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[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2141 Introduced in House (IH)]

103d CONGRESS
  1st Session
                                H. R. 2141

   To provide for budget reconciliation with respect to revenue and 
 spending matters within the jurisdiction of the Committee on Ways and 
        Means for fiscal year 1994 and subsequent fiscal years.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                              May 18, 1993

  Mr. Rostenkowski introduced the following bill; which was referred 
 jointly to the Committees on Ways and Means, Energy and Commerce, and 
                                 Rules

_______________________________________________________________________

                                 A BILL

 
   To provide for budget reconciliation with respect to revenue and 
 spending matters within the jurisdiction of the Committee on Ways and 
        Means for fiscal year 1994 and subsequent fiscal years.

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

 TITLE I--SHORT TITLE; REFERENCES TO OMNIBUS BUDGET RECONCILIATION ACT 
                                OF 1993

SEC. 101. SHORT TITLE.

    This Act may be cited as the ``Ways and Means Budget Reconciliation 
Act of 1993''.

SEC. 102. REFERENCES TO OMNIBUS BUDGET RECONCILIATION ACT OF 1993.

    Any reference in this Act (or in any amendment made by this Act) to 
the Omnibus Budget Reconciliation Act of 1993 shall be deemed to be a 
reference to this Act.

                       TITLES II-XII--[RESERVED]

            TITLE XIII--COMMITTEE ON WAYS AND MEANS--SAVINGS

    Subtitle A--Old-Age, Survivors, and Disability Insurance Program

                     TABLE OF CONTENTS OF SUBTITLE

Sec. 13001. Explicit requirements for maintenance of telephone access 
                            to local offices of the Social Security 
                            Administration.
Sec. 13002. Expansion of State option to exclude service of election 
                            officials or election workers from 
                            coverage.
Sec. 13003. Use of social security numbers by States and local 
                            governments and Federal district courts for 
                            jury selection purposes.
Sec. 13004. Authorization for all States to extend coverage to State 
                            and local policemen and firemen under 
                            existing coverage agreements.
Sec. 13005. Limited exemption for Canadian ministers from certain self-
                            employment tax liability.
Sec. 13006. Exclusion of totalization benefits from the application of 
                            the windfall elimination provision.
Sec. 13007. Exclusion of military reservists from application of the 
                            government pension offset and windfall 
                            elimination provisions.
Sec. 13008. Repeal of the facility-of-payment provision.
Sec. 13009. Maximum family benefits in guarantee cases.
Sec. 13010. Authorization for disclosure by the Secretary of Health and 
                            Human Services of information for purposes 
                            of public or private epidemiological and 
                            similar research.
Sec. 13011. Improvement and clarification of provisions prohibiting 
                            misuse of symbols, emblems, or names in 
                            reference to social security programs and 
                            agencies.
Sec. 13012. Increased penalties for unauthorized disclosure of social 
                            security information.
Sec. 13013. Simplification of employment taxes on domestic services.
Sec. 13014. Increase in authorized period for extension of time to file 
                            annual earnings report.
Sec. 13015. Allocations to Federal Disability Insurance Trust Fund.
Sec. 13016. Extension of disability insurance program demonstration 
                            project authority.
Sec. 13017. Technical and clerical amendments.
Sec. 13018. Cross-matching of social security account number 
                            information and employer identification 
                            number information maintained by the 
                            Department of Agriculture.
Sec. 13019. Prohibition of misuse of Department of the Treasury names, 
                            symbols, etc.
Sec. 13020. Availability and use of death information under the old-
                            age, survivors, and disability insurance 
                            program.

SEC. 13001. EXPLICIT REQUIREMENTS FOR MAINTENANCE OF TELEPHONE ACCESS 
              TO LOCAL OFFICES OF THE SOCIAL SECURITY ADMINISTRATION.

    (a) Maintenance of Service to Local Offices.--
            (1) In general.--Section 5110(a) of the Omnibus Budget 
        Reconciliation Act of 1990 (104 Stat. 1388-272) is amended by 
        adding at the end the following new sentence: ``In carrying out 
        the requirements of the preceding sentence, the Secretary shall 
        reestablish and maintain in service at least the same number of 
        telephone lines to each such local office as was in place as of 
        such date, including telephone sets for connections to such 
        lines.''.
            (2) Effective date.--The Secretary of Health and Human 
        Services shall ensure that the requirements of the amendment 
        made by paragraph (1) are carried out no later than 90 days 
        after the date of the enactment of this Act.
            (3) GAO report.--The Comptroller General of the United 
        States shall make an independent determination of the number of 
        telephone lines to each local office of the Social Security 
        Administration which are in place as of 90 days after the 
        enactment of this Act and shall report his findings to the 
        Committee on Ways and Means of the House of Representatives and 
        the Committee on Finance of the Senate no later than 150 days 
        after the date of the enactment of this Act.
    (b) Maintenance of Toll-Free Telephone Number Service.--The 
Secretary of Health and Human Services shall ensure that toll-free 
telephone service provided by the Social Security Administration is 
maintained at a level which is at least equal to that in effect on the 
date of the enactment of this Act.

SEC. 13002. EXPANSION OF STATE OPTION TO EXCLUDE SERVICE OF ELECTION 
              OFFICIALS OR ELECTION WORKERS FROM COVERAGE.

    (a) Limitation on Mandatory Coverage of State Election Officials 
and Election Workers Without State Retirement System.--
            (1) Amendment to social security act.--Section 
        210(a)(7)(F)(iv) of the Social Security Act (42 U.S.C. 
        410(a)(7)(F)(iv)) (as amended by section 11332(a) of the 
        Omnibus Budget Reconciliation Act of 1990) is amended by 
        striking ``$100'' and inserting ``$1,000 with respect to 
        service performed during 1994, and the adjusted amount 
        determined under section 218(c)(8)(B) for any subsequent year 
        with respect to service performed during such subsequent 
        year''.
            (2) Amendment to fica.--Section 3121(b)(7)(F)(iv) of the 
        Internal Revenue Code of 1986 (as amended by section 11332(b) 
        of the Omnibus Budget Reconciliation Act of 1990) is amended by 
        striking ``$100'' and inserting ``$1,000 with respect to 
        service performed during 1994, and the adjusted amount 
        determined under section 218(c)(8)(B) of the Social Security 
        Act for any subsequent year with respect to service performed 
        during such subsequent year''.
    (b) Conforming Amendments Relating to Medicare Qualified Government 
Employment.--
            (1) Amendment to social security act.--Section 210(p)(2)(E) 
        of the Social Security Act (42 U.S.C. 410(p)(2)(E)) is amended 
        by striking ``$100'' and inserting ``$1,000 with respect to 
        service performed during 1994, and the adjusted amount 
        determined under section 218(c)(8)(B) for any subsequent year 
        with respect to service performed during such subsequent 
        year''.
            (2) Amendment to fica.--Section 3121(u)(2)(B)(ii)(V) of the 
        Internal Revenue Code of 1986 is amended by striking ``$100'' 
        and inserting ``$1,000 with respect to service performed during 
        1994, and the adjusted amount determined under section 
        218(c)(8)(B) of the Social Security Act for any subsequent year 
        with respect to service performed during such subsequent 
        year''.
    (c) Authority for States To Modify Coverage Agreements With Respect 
to Election Officials and Election Workers.--Section 218(c)(8) of the 
Social Security Act (42 U.S.C. 418(c)(8)) is amended--
            (1) by striking ``on or after January 1, 1968,'' and 
        inserting ``at any time'';
            (2) by striking ``$100'' and inserting ``$1,000 with 
        respect to service performed during 1994, and the adjusted 
        amount determined under subparagraph (B) for any subsequent 
        year with respect to service performed during such subsequent 
        year''; and
            (3) by striking the last sentence and inserting the 
        following new sentence: ``Any modification of an agreement 
        pursuant to this paragraph shall be effective with respect to 
        services performed in and after the calendar year in which the 
        modification is mailed or delivered by other means to the 
        Secretary.''.
    (d) Indexation of Exempt Amount.--Section 218(c)(8) of such Act (as 
amended by subsection (c)) is further amended--
            (1) by inserting ``(A)'' after ``(8)''; and
            (2) by adding at the end the following new subparagraph:
    ``(B) For each year after 1994, the Secretary shall adjust the 
amount referred to in subparagraph (A) at the same time and in the same 
manner as is provided under section 215(a)(1)(B)(ii) with respect to 
the amounts referred to in section 215(a)(1)(B)(i), except that--
            ``(i) for purposes of this subparagraph, 1992 shall be 
        substituted for the calendar year referred to in section 
        215(a)(1)(B)(ii)(II), and
            ``(ii) such amount as so adjusted, if not a multiple of 
        $100, shall be rounded to the next higher multiple of $100 
        where such amount is a multiple of $50 and to the nearest 
        multiple of $100 in any other case.
The Secretary shall determine and publish in the Federal Register each 
adjusted amount determined under this subparagraph not later than 
November 1 preceding the year for which the adjustment is made.''.
    (e) Effective Date.--The amendments made by subsections (a), (b), 
and (c) shall apply with respect to service performed on or after 
January 1, 1994.

SEC. 13003. USE OF SOCIAL SECURITY NUMBERS BY STATES AND LOCAL 
              GOVERNMENTS AND FEDERAL DISTRICT COURTS FOR JURY 
              SELECTION PURPOSES.

    (a) In General.--Section 205(c)(2) of the Social Security Act (42 
U.S.C. 405(c)(2)) is amended--
            (1) in subparagraph (B)(i), by striking ``(E)'' in the 
        matter preceding subclause (I) and inserting ``(F)'';
            (2) by redesignating subparagraphs (E) and (F) as 
        subparagraphs (F) and (G), respectively; and
            (3) by inserting after subparagraph (D) the following:
    ``(E)(i) It is the policy of the United States that--
            ``(I) any State (or any political subdivision of a State) 
        may utilize the social security account numbers issued by the 
        Secretary for the additional purposes described in clause (ii) 
        if such numbers have been collected and are otherwise utilized 
        by such State (or political subdivision) in accordance with 
        applicable law, and
            ``(II) any district court of the United States may use, for 
        such additional purposes, any such social security account 
        numbers which have been so collected and are so utilized by any 
        State.
    ``(ii) The additional purposes described in this clause are the 
following:
            ``(I) identifying duplicate names of individuals on master 
        lists used for jury selection purposes, and
            ``(II) identifying on such master lists those individuals 
        who are ineligible to serve on a jury by reason of their 
        conviction of a felony.
    ``(iii) To the extent that any provision of Federal law enacted 
before the date of the enactment of this subparagraph is inconsistent 
with the policy set forth in clause (i), such provision shall, on and 
after that date, be null, void, and of no effect.
    ``(iv) For purposes of this subparagraph, the term `State' has the 
meaning such term has in subparagraph (D).''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
take effect on the date of the enactment of this Act.

SEC. 13004. AUTHORIZATION FOR ALL STATES TO EXTEND COVERAGE TO STATE 
              AND LOCAL POLICEMEN AND FIREMEN UNDER EXISTING COVERAGE 
              AGREEMENTS.

    (a) In General.--Section 218(l) of the Social Security Act (42 
U.S.C. 418(l)) is amended--
            (1) in paragraph (1), by striking ``(1)'' after ``(l)'', 
        and by striking ``the State of'' and all that follows through 
        ``prior to the date of enactment of this subsection'' and 
        inserting ``a State entered into pursuant to this section''; 
        and
            (2) by striking paragraph (2).
    (b) Conforming Amendment.--Section 218(d)(8)(D) of such Act (42 
U.S.C. 418(d)(8)(D)) is amended by striking ``agreements with the 
States named in'' and inserting ``State agreements modified as provided 
in''.
    (c) Effective Date.--The amendments made by this section shall 
apply with respect to modifications filed by States after the date of 
the enactment of this Act.

SEC. 13005. LIMITED EXEMPTION FOR CANADIAN MINISTERS FROM CERTAIN SELF-
              EMPLOYMENT TAX LIABILITY.

    (a) In General.--Notwithstanding any other provision of law, if--
            (1) an individual performed services described in section 
        1402(c)(4) of the Internal Revenue Code of 1986 which are 
        subject to tax under section 1401 of such Code,
            (2) such services were performed in Canada at a time when 
        no agreement between the United States and Canada pursuant to 
        section 233 of the Social Security Act was in effect, and
            (3) such individual was required to pay contributions on 
        the earnings from such services under the social insurance 
        system of Canada,
then such individual may file a certificate under this section in such 
form and manner, and with such official, as may be prescribed in 
regulations issued under chapter 2 of such Code. Upon the filing of 
such certificate, notwithstanding any judgment which has been entered 
to the contrary, such individual shall be exempt from payment of such 
tax with respect to services described in paragraphs (1) and (2) and 
from any penalties or interest for failure to pay such tax or to file a 
self-employment tax return as required under section 6017 of such Code.
    (b) Period for Filing.--A certificate referred to in subsection (a) 
may be filed only during the 180-day period commencing with the date on 
which the regulations referred to in subsection (a) are issued.
    (c) Taxable Years Affected by Certificate.--A certificate referred 
to in subsection (a) shall be effective for taxable years ending after 
December 31, 1978, and before January 1, 1985.
    (d) Restriction on Crediting of Exempt Self-Employment Income.--In 
any case in which an individual is exempt under this section from 
paying a tax imposed under section 1401 of the Internal Revenue Code of 
1986, any income on which such tax would have been imposed but for such 
exemption shall not constitute self-employment income under section 
211(b) of the Social Security Act (42 U.S.C. 411(b)), and, if such 
individual's primary insurance amount has been determined under section 
215 of such Act (42 U.S.C. 415), notwithstanding section 215(f)(1) of 
such Act, the Secretary of Health and Human Services shall recompute 
such primary insurance amount so as to take into account the provisions 
of this subsection. The recomputation under this subsection shall be 
effective with respect to benefits for months following approval of the 
certificate of exemption.

SEC. 13006. EXCLUSION OF TOTALIZATION BENEFITS FROM THE APPLICATION OF 
              THE WINDFALL ELIMINATION PROVISION.

    (a) In General.--Section 215(a)(7) of the Social Security Act (42 
U.S.C. 415(a)(7)) is amended--
            (1) in subparagraph (A), by striking ``but excluding'' and 
        all that follows through ``1937'' and inserting ``but excluding 
        (I) a payment under the Railroad Retirement Act of 1974 or 
        1937, and (II) a payment by a social security system of a 
        foreign country based on an agreement concluded between the 
        United States and such foreign country pursuant to section 
        233''; and
            (2) in subparagraph (E), by inserting after ``in the case 
        of an individual'' the following: ``whose eligibility for old-
        age or disability insurance benefits is based on an agreement 
        concluded pursuant to section 233 or an individual''.
    (b) Conforming Amendment Relating to Benefits Under 1939 Act.--
Section 215(d)(3) of such Act (42 U.S.C. 415(d)(3)) is amended by 
striking ``but excluding'' and all that follows through ``1937'' and 
inserting ``but excluding (I) a payment under the Railroad Retirement 
Act of 1974 or 1937, and (II) a payment by a social security system of 
a foreign country based on an agreement concluded between the United 
States and such foreign country pursuant to section 233''.
    (c) Effective Date.--The amendments made by this section shall 
apply (notwithstanding section 215(f)(1) of the Social Security Act (42 
U.S.C. 415(f)(1))) with respect to benefits payable for months after 
October 1993.

SEC. 13007. EXCLUSION OF MILITARY RESERVISTS FROM APPLICATION OF THE 
              GOVERNMENT PENSION OFFSET AND WINDFALL ELIMINATION 
              PROVISIONS.

    (a) Exclusion from Government Pension Offset Provisions.--
Subsections (b)(4), (c)(2), (e)(7), (f)(2), and (g)(4) of section 202 
of the Social Security Act (42 U.S.C. 402 (b)(4), (c)(2), (e)(7), 
(f)(2), and (g)(4)) are each amended--
            (1) in subparagraph (A)(ii), by striking ``unless 
        subparagraph (B) applies.'';
            (2) in subparagraph (A), by striking ``The'' in the matter 
        following clause (ii) and inserting ``unless subparagraph (B) 
        applies. The''; and
            (3) in subparagraph (B), by redesignating the existing 
        matter as clause (ii), and by inserting before such clause (ii) 
        (as so redesignated) the following:
    ``(B)(i) Subparagraph (A)(i) shall not apply with respect to 
monthly periodic benefits based wholly on service as a member of a 
uniformed service (as defined in section 210(m)).''.
    (b) Exclusion From Windfall Elimination Provisions.--Section 
215(a)(7)(A) of such Act (as amended by section 13006(a) of this Act) 
and section 215(d)(3) of such Act (as amended by section 13006(b) of 
this Act) are each further amended--
            (1) by striking ``and'' before ``(II)''; and
            (2) by striking ``section 233'' and inserting ``section 
        233, and (III) a payment based wholly on service as a member of 
        a uniformed service (as defined in section 210(m))''.
    (c) Effective Date.--The amendments made by this section shall 
apply (notwithstanding section 215(f) of the Social Security Act) with 
respect to benefits payable for months after October 1993.

SEC. 13008. REPEAL OF THE FACILITY-OF-PAYMENT PROVISION.

    (a) Repeal of Rule Precluding Redistribution Under Family 
Maximum.--Section 203(i) of the Social Security Act (42 U.S.C. 403(i)) 
is repealed.
    (b) Coordination Under Family Maximum of Reduction in Beneficiary's 
Auxiliary Benefits With Suspension of Auxiliary Benefits of Other 
Beneficiary Under Earnings Test.--Section 203(a)(4) of such Act (42 
U.S.C. 403(a)(4)) is amended by striking ``section 222(b). Whenever'' 
and inserting the following: ``section 222(b). Notwithstanding the 
preceding sentence, any reduction under this subsection in the case of 
an individual who is entitled to a benefit under subsection (b), (c), 
(d), (e), (f), (g), or (h) of section 202 for any month on the basis of 
the same wages and self-employment income as another person--
            ``(A) who also is entitled to a benefit under subsection 
        (b), (c), (d), (e), (f), (g), or (h) of section 202 for such 
        month,
            ``(B) who does not live in the same household as such 
        individual, and
            ``(C) whose benefit for such month is suspended (in whole 
        or in part) pursuant to subsection (h)(3) of this section,
shall be made before the suspension under subsection (h)(3). 
Whenever''.
    (c) Conforming Amendment Applying Earnings Reporting Requirement 
Despite Suspension of Benefits.--The third sentence of section 
203(h)(1)(A) of such Act (42 U.S.C. 403(h)(1)(A)) is amended by 
striking ``Such report need not be made'' and all that follows through 
``The Secretary may grant'' and inserting the following: ``Such report 
need not be made for any taxable year--
            ``(i) beginning with or after the month in which such 
        individual attained age 70, or
            ``(ii) if benefit payments for all months (in such taxable 
        year) in which such individual is under age 70 have been 
        suspended under the provisions of the first sentence of 
        paragraph (3) of this subsection, unless--
                    ``(I) such individual is entitled to benefits under 
                subsection (b), (c), (d), (e), (f), (g), or (h) of 
                section 202,
                    ``(II) such benefits are reduced under subsection 
                (a) of this section for any month in such taxable year, 
                and
                    ``(III) in any such month there is another person 
                who also is entitled to benefits under subsection (b), 
                (c), (d), (e), (f), (g), or (h) of section 202 on the 
                basis of the same wages and self-employment income and 
                who does not live in the same household as such 
                individual.
The Secretary may grant''.
    (d) Conforming Amendment Deleting Special Income Tax Treatment of 
Benefits No Longer Required by Reason of Repeal.--Section 86(d)(1) of 
the Internal Revenue Code of 1986 (relating to income tax on social 
security benefits) is amended by striking the last sentence.
    (e) Effective Dates.--
            (1) The amendments made by subsections (a), (b), and (c) 
        shall apply with respect to benefits payable for months after 
        December 1994.
            (2) The amendment made by subsection (d) shall apply with 
        respect to benefits received after December 31, 1994, in 
        taxable years ending after such date.

SEC. 13009. MAXIMUM FAMILY BENEFITS IN GUARANTEE CASES.

    (a) In General.--Section 203(a) of the Social Security Act (42 
U.S.C. 403(a)) is amended by adding at the end the following new 
paragraph:
    ``(10)(A) Subject to subparagraphs (B) and (C)--
            ``(i) the total monthly benefits to which beneficiaries may 
        be entitled under sections 202 and 223 for a month on the basis 
        of the wages and self-employment income of an individual whose 
        primary insurance amount is computed under section 
        215(a)(2)(B)(i) shall equal the total monthly benefits which 
        were authorized by this section with respect to such 
        individual's primary insurance amount for the last month of his 
        prior entitlement to disability insurance benefits, increased 
        for this purpose by the general benefit increases and other 
        increases under section 215(i) that would have applied to such 
        total monthly benefits had the individual remained entitled to 
        disability insurance benefits until the month in which he 
        became entitled to old-age insurance benefits or reentitled to 
        disability insurance benefits or died, and
            ``(ii) the total monthly benefits to which beneficiaries 
        may be entitled under sections 202 and 223 for a month on the 
        basis of the wages and self-employment income of an individual 
        whose primary insurance amount is computed under section 
        215(a)(2)(C) shall equal the total monthly benefits which were 
        authorized by this section with respect to such individual's 
        primary insurance amount for the last month of his prior 
        entitlement to disability insurance benefits.
    ``(B) In any case in which--
            ``(i) the total monthly benefits with respect to such 
        individual's primary insurance amount for the last month of his 
        prior entitlement to disability insurance benefits was computed 
        under paragraph (6), and
            ``(ii) the individual's primary insurance amount is 
        computed under subparagraph (B)(i) or (C) of section 215(a)(2) 
        by reason of the individual's entitlement to old-age insurance 
        benefits or death,
the total monthly benefits shall equal the total monthly benefits that 
would have been authorized with respect to the primary insurance amount 
for the last month of his prior entitlement to disability insurance 
benefits if such total monthly benefits had been computed without 
regard to paragraph (6).
    ``(C) This paragraph shall apply before the application of 
paragraph (3)(A), and before the application of section 203(a)(1) of 
this Act as in effect in December 1978.''.
    (b) Conforming Amendment.--Section 203(a)(8) of such Act (42 U.S.C. 
403(a)(8)) is amended by striking ``Subject to paragraph (7),'' and 
inserting ``Subject to paragraph (7) and except as otherwise provided 
in paragraph (10)(C),''.
    (c) Effective Date.--The amendments made by this section shall 
apply for the purpose of determining the total monthly benefits to 
which beneficiaries may be entitled under sections 202 and 223 of the 
Social Security Act based on the wages and self-employment income of an 
individual who--
            (1) becomes entitled to an old-age insurance benefit under 
        section 202(a) of such Act,
            (2) becomes reentitled to a disability insurance benefit 
        under section 223 of such Act, or
            (3) dies,
after October 1993.

SEC. 13010. AUTHORIZATION FOR DISCLOSURE BY THE SECRETARY OF HEALTH AND 
              HUMAN SERVICES OF INFORMATION FOR PURPOSES OF PUBLIC OR 
              PRIVATE EPIDEMIOLOGICAL AND SIMILAR RESEARCH.

    (a) In General.--Section 1106 of the Social Security Act (42 U.S.C. 
1306) is amended--
            (1) by redesignating subsections (d) and (e) as subsections 
        (e) and (f), respectively;
            (2) in subsection (f) (as so redesignated), by striking 
        ``subsection (d)'' and inserting ``subsection (e)''; and
            (3) by inserting after subsection (c) the following new 
        subsection:
    ``(d) Notwithstanding any other provision of this section, in any 
case in which--
            ``(1) information regarding whether an individual is shown 
        on the records of the Secretary as being alive or deceased is 
        requested from the Secretary for purposes of epidemiological or 
        similar research which the Secretary finds may reasonably be 
        expected to contribute to a national health interest, and
            ``(2) the requester agrees to reimburse the Secretary for 
        providing such information and to comply with limitations on 
        safeguarding and rerelease or redisclosure of such information 
        as may be specified by the Secretary,
the Secretary shall comply with such request, except to the extent that 
compliance with such request would constitute a violation of the terms 
of any contract entered into under section 205(r).''.
    (b) Availability of Information Returns Regarding Wages Paid 
Employees.--Section 6103(l)(5) of the Internal Revenue Code of 1986 
(relating to disclosure of returns and return information to the 
Department of Health and Human Services for purposes other than tax 
administration) is amended--
            (1) by striking ``for the purpose of'' and inserting ``for 
        the purpose of--'';
            (2) by striking ``carrying out, in accordance with an 
        agreement'' and inserting the following:
                    ``(A) carrying out, in accordance with an 
                agreement'';
            (3) by striking ``program.'' and inserting ``program; or''; 
        and
            (4) by adding at the end the following new subparagraph:
                    ``(B) providing information regarding the mortality 
                status of individuals for epidemiological and similar 
                research in accordance with section 1106(d) of the 
                Social Security Act.''.
    (c) Effective Date.--The amendments made by this section shall 
apply with respect to requests for information made after the date of 
the enactment of this Act.

SEC. 13011. IMPROVEMENT AND CLARIFICATION OF PROVISIONS PROHIBITING 
              MISUSE OF SYMBOLS, EMBLEMS, OR NAMES IN REFERENCE TO 
              SOCIAL SECURITY PROGRAMS AND AGENCIES.

    (a) Prohibition of Unauthorized Reproduction, Reprinting, or 
Distribution for Fee of Certain Official Publications.--Section 1140(a) 
of the Social Security Act (42 U.S.C. 1320b-10(a)) is amended--
            (1) by redesignating paragraphs (1) and (2) as 
        subparagraphs (A) and (B), respectively;
            (2) by inserting ``(1)'' after ``(a)''; and
            (3) by adding at the end the following new paragraph:
    ``(2) No person may, for a fee, reproduce, reprint, or distribute 
any item consisting of a form, application, or other publication of the 
Social Security Administration unless such person has obtained 
specific, written authorization for such activity in accordance with 
regulations which the Secretary shall prescribe.''.
    (b) Addition to Prohibited Words, Letters, Symbols, and Emblems.--
Paragraph (1) of section 1140(a) of such Act (as redesignated by 
subsection (a)) is further amended--
            (1) in subparagraph (A) (as redesignated), by striking 
        ``Administration', the letters `SSA' or `HCFA','' and inserting 
        ``Administration', `Department of Health and Human Services', 
        `Health and Human Services', `Supplemental Security Income 
        Program', or `Medicaid', the letters `SSA', `HCFA', `DHHS', 
        `HHS', or `SSI',''; and
            (2) in subparagraph (B) (as redesignated), by striking 
        ``Social Security Administration'' each place it appears and 
        inserting ``Social Security Administration, Health Care 
        Financing Administration, or Department of Health and Human 
        Services'', and by striking ``or of the Health Care Financing 
        Administration''.
    (c) Exemption for Use of Words, Letters, Symbols, and Emblems of 
State and Local Government Agencies by Such Agencies.--Paragraph (1) of 
section 1140(a) of such Act (as redesignated by subsection (a)) is 
further amended by adding at the end the following new sentence: ``The 
preceding provisions of this subsection shall not apply with respect to 
the use by any agency or instrumentality of a State or political 
subdivision of a State of any words or letters which identify an agency 
or instrumentality of such State or of a political subdivision of such 
State or the use by any such agency or instrumentality of any symbol or 
emblem of an agency or instrumentality of such State or a political 
subdivision of such State.''.
    (d) Inclusion of Reasonableness Standard.--Section 1140(a)(1) of 
such Act (as amended by the preceding provisions of this section) is 
further amended, in the matter following subparagraph (B) (as 
redesignated), by striking ``convey'' and inserting ``convey, or in a 
manner which reasonably could be interpreted or construed as 
conveying,''.
    (e) Ineffectiveness of Disclaimers.--Subsection (a) of section 1140 
of such Act (as amended by the preceding provisions of this section) is 
further amended by adding at the end the following new paragraph:
    ``(3) Any determination of whether the use of one or more words, 
letters, symbols, or emblems (or any combination or variation thereof) 
in connection with an item described in paragraph (1) or the 
reproduction, reprinting, or distribution of an item described in 
paragraph (2) is a violation of this subsection shall be made without 
regard to any inclusion in such item (or any so reproduced, reprinted, 
or distributed copy thereof) of a disclaimer of affiliation with the 
United States Government or any particular agency or instrumentality 
thereof.''.
    (f) Violations With Respect to Individual Items.--Section 
1140(b)(1) of such Act (42 U.S.C. 1320b-10(b)(1)) is amended by adding 
at the end the following new sentence: ``In the case of any items 
referred to in subsection (a)(1) consisting of pieces of mail, each 
such piece of mail which contains one or more words, letters, symbols, 
or emblems in violation of subsection (a) shall represent a separate 
violation. In the case of any item referred to in subsection (a)(2), 
the reproduction, reprinting, or distribution of such item shall be 
treated as a separate violation with respect to each copy thereof so 
reproduced, reprinted, or distributed.''.
    (g) Elimination of Cap on Aggregate Liability Amount.--
            (1) Repeal.--Paragraph (2) of section 1140(b) of such Act 
        (42 U.S.C. 1320b-10(b)(2)) is repealed.
            (2) Conforming amendments.--Section 1140(b) of such Act is 
        further amended--
                    (A) by striking ``(1) Subject to paragraph (2), 
                the'' and inserting ``The'';
                    (B) by redesignating subparagraphs (A) and (B) as 
                paragraphs (1) and (2), respectively; and
                    (C) in paragraph (1) (as redesignated), by striking 
                ``subparagraph (B)'' and inserting ``paragraph (2)''.
    (h) Removal of Formal Declination Requirement.--Section 1140(c)(1) 
of such Act (42 U.S.C. 1320b-10(c)(1)) is amended by inserting ``and 
the first sentence of subsection (c)'' after ``and (i)''.
    (i) Penalties Relating to Social Security Administration Deposited 
in OASI Trust Fund.--Section 1140(c)(2) of such Act (42 U.S.C. 1320b-
10(c)(2)) is amended in the second sentence by striking ``United 
States.'' and inserting ``United States, except that, to the extent 
that such amounts are recovered under this section as penalties imposed 
for misuse of words, letters, symbols, or emblems relating to the 
Social Security Administration, such amounts shall be deposited into 
the Federal Old-Age and Survivor's Insurance Trust Fund.''.
    (j) Enforcement.--Section 1140 of such Act (42 U.S.C. 1320b-10) is 
amended by adding at the end the following new subsection:
    ``(d) The preceding provisions of this section shall be enforced 
through the Office of Inspector General of the Department of Health and 
Human Services.''.
    (k) Annual Reports.--Section 1140 of such Act (as amended by the 
preceding provisions of this section) is further amended by adding at 
the end the following new subsection:
    ``(e) The Secretary shall include in the annual report submitted 
pursuant to section 704 a report on the operation of this section 
during the year covered by such annual report. Such report shall 
specify--
            ``(1) the number of complaints of violations of this 
        section received by the Social Security Administration during 
        the year,
            ``(2) the number of cases in which a notice of violation of 
        this section was sent by the Social Security Administration 
        during the year requesting that an individual cease activities 
        in violation of this section,
            ``(3) the number of complaints of violations of this 
        section referred by the Social Security Administration to the 
        Inspector General in the Department of Health and Human 
        Services during the year,
            ``(4) the number of investigations of violations of this 
        section undertaken by the Inspector General during the year,
            ``(5) the number of cases in which a demand letter was sent 
        during the year assessing a civil money penalty under this 
        section,
            ``(6) the total amount of civil money penalties assessed 
        under this section during the year,
            ``(7) the number of requests for hearings filed during the 
        year pursuant to subsection (c)(1) of this section and section 
        1128A(c)(2),
            ``(8) the disposition during such year of hearings filed 
        pursuant to sections 1140(c)(1) and 1128A(c)(2), and
            ``(9) the total amount of civil money penalties under this 
        section deposited into the Federal Old-Age and Survivors 
        Insurance Trust Fund during the year.''.
    (l) Effective Date.--The amendments made by this section shall 
apply with respect to violations occurring after the date of the 
enactment of this Act.

SEC. 13012. INCREASED PENALTIES FOR UNAUTHORIZED DISCLOSURE OF SOCIAL 
              SECURITY INFORMATION.

    (a) Unauthorized Disclosure.--Section 1106(a) of the Social 
Security Act (42 U.S.C. 1306(a)) is amended--
            (1) by striking ``misdemeanor'' and inserting ``felony'';
            (2) by striking ``$1,000'' and inserting ``$10,000 for each 
        occurrence of a violation''; and
            (3) by striking ``one year'' and inserting ``5 years''.
    (b) Unauthorized Disclosure by Fraud.--Section 1107(b) of such Act 
(42 U.S.C. 1307(b)) is amended--
            (1) by inserting ``social security account number,'' after 
        ``information as to the'';
            (2) by striking ``misdemeanor'' and inserting ``felony'';
            (3) by striking ``$1,000'' and inserting ``$10,000 for each 
        occurrence of a violation''; and
            (4) by striking ``one year'' and inserting ``5 years''.
    (c) Effective Date.--The amendments made by this section shall 
apply to violations occurring on or after the date of the enactment of 
this Act.

SEC. 13013. SIMPLIFICATION OF EMPLOYMENT TAXES ON DOMESTIC SERVICES.

    (a) Coordination of Collection of Domestic Service Employment With 
Collection of Income Taxes.--
            (1) In general.--Chapter 25 of the Internal Revenue Code of 
        1986 (relating to general provisions relating to employment 
        taxes) is amended by adding at the end thereof the following 
        new section:

``SEC. 3510. COORDINATION OF COLLECTION OF DOMESTIC SERVICE EMPLOYMENT 
              TAXES WITH COLLECTION OF INCOME TAXES.

    ``(a) General Rule.--Except as otherwise provided in this section--
            ``(1) returns with respect to domestic service employment 
        taxes shall be made on a calendar year basis,
            ``(2) any such return for any calendar year shall be filed 
        on or before the 15th day of the fourth month following the 
        close of the employer's taxable year which begins in such 
        calendar year, and
            ``(3) no requirement to make deposits (or to pay 
        installments under section 6157) shall apply with respect to 
        such taxes.
    ``(b) Domestic Service Employment Taxes Subject to Estimated Tax 
Provisions.--
            ``(1) In general.--Solely for purposes of section 6654, 
        domestic service employment taxes imposed with respect to any 
        calendar year shall be treated as a tax imposed by chapter 2 
        for the taxable year of the employer which begins in such 
        calendar year.
            ``(2) Annualization.--Under regulations prescribed by the 
        Secretary, appropriate adjustments shall be made in the 
        application of section 6654(d)(2) in respect of the amount 
        treated as tax under paragraph (1).
            ``(3) Transitional rule.--For purposes of applying section 
        6654 to a taxable year beginning in 1993, the amount referred 
        to in clause (ii) of section 6654(d)(1)(B) shall be increased 
        by 90 percent of the amount treated as tax under paragraph (1) 
        for such taxable year.
    ``(c) Domestic Service Employment Taxes.--For purposes of this 
section, the term `domestic service employment taxes' means--
            ``(1) any taxes imposed by chapter 21 or 23 on remuneration 
        paid for domestic service in a private home of the employer, 
        and
            ``(2) any amount withheld from such remuneration pursuant 
        to an agreement under section 3402(p).
For purposes of this subsection, the term `domestic service in a 
private home of the employer' does not include service described in 
section 3121(g)(5).
    ``(d) Exception Where Employer Liable for Other Employment Taxes.--
To the extent provided in regulations prescribed by the Secretary, this 
section shall not apply to any employer for any calendar year if such 
employer is liable for any tax under this subtitle with respect to 
remuneration for services other than domestic service in a private home 
of the employer.
    ``(e) General Regulatory Authority.--The Secretary shall prescribe 
such regulations as may be necessary or appropriate to carry out the 
purposes of this section. Such regulations may treat domestic service 
employment taxes as taxes imposed by chapter 1 for purposes of 
coordinating the assessment and collection of such employment taxes 
with the assessment and collection of domestic employers' income taxes.
    ``(f) Authority To Enter Into Agreements To Collect State 
Unemployment Taxes.--
            ``(1) In general.--The Secretary is hereby authorized to 
        enter into an agreement with any State to collect, as the agent 
        of such State, such State's unemployment taxes imposed on 
        remuneration paid for domestic service in a private home of the 
        employer. Any taxes to be collected by the Secretary pursuant 
        to such an agreement shall be treated as domestic service 
        employment taxes for purposes of this section.
            ``(2) Transfers to state account.--Any amount collected 
        under an agreement referred to in paragraph (1) shall be 
        transferred by the Secretary to the account of the State in the 
        Unemployment Trust Fund.
            ``(3) Subtitle f made applicable.--For purposes of subtitle 
        F, any amount required to be collected under an agreement under 
        paragraph (1) shall be treated as a tax imposed by chapter 23.
            ``(4) State.--For purposes of this subsection, the term 
        `State' has the meaning given such term by section 
        3306(j)(1).''
            (2) Clerical amendment.--The table of sections for chapter 
        25 of such Code is amended by adding at the end thereof the 
        following:

                              ``Sec. 3510. Coordination of collection 
                                        of domestic service employment 
                                        taxes with collection of income 
                                        taxes.''
            (3) Effective date.--The amendments made by this subsection 
        shall apply to remuneration paid in calendar years beginning 
        after December 31, 1993.
            (4) Expanded information to employers.--The Secretary of 
        the Treasury or his delegate shall prepare and make available 
        information on the Federal tax obligations of employers with 
        respect to employees performing domestic service in a private 
        home of the employer. Such information shall also include a 
        statement that such employers may have obligations with respect 
        to such employees under State laws relating to unemployment 
        insurance and workers compensation.
    (b) Threshold Requirement for Social Security Taxes.--
            (1) Amendments of internal revenue code.--
                    (A) Subparagraph (B) of section 3121(a)(7) of the 
                Internal Revenue Code of 1986 (defining wages) is 
                amended to read as follows:
                    ``(B) cash remuneration paid by an employer in any 
                calendar year to an employee for domestic service in a 
                private home of the employer (within the meaning of 
                subsection (y)), if the cash remuneration paid in such 
                year by the employer to the employee for such service 
                is less than the applicable dollar threshold (as 
                defined in subsection (y)) for such year;''.
                    (B) Section 3121 of such Code is amended by adding 
                at the end thereof the following new subsection:
    ``(y) Domestic Service in a Private Home.--For purposes of 
subsection (a)(7)(B)--
            ``(1) Exclusion for certain farm service.--The term 
        `domestic service in a private home of the employer' does not 
        include service described in subsection (g)(5).
            ``(2) Applicable dollar threshold.--The term `applicable 
        dollar threshold' means $1,800. In the case of calendar years 
        after 1994, the Secretary of Health and Human Services shall 
        adjust such $1,800 amount at the same time and in the same 
        manner as under section 215(a)(1)(B)(ii) of the Social Security 
        Act with respect to the amounts referred to in section 
        215(a)(1)(B)(i) of such Act, except that, for purposes of this 
        subparagraph, 1992 shall be substituted for the calendar year 
        referred to in section 215(a)(1)(B)(ii)(II) of such Act. If the 
        amount determined under the preceding sentence is not a 
        multiple of $50, such amount shall be rounded to the nearest 
        multiple of $50.''
                    (C) The second sentence of section 3102(a) of such 
                Code is amended--
                            (i) by striking ``calendar quarter'' each 
                        place it appears and inserting ``calendar 
                        year'', and
                            (ii) by striking ``$50'' and inserting 
                        ``the applicable dollar threshold (as defined 
                        in section 3121(y)(2)) for such year''.
            (2) Amendment of social security act.--Subparagraph (B) of 
        section 209(a)(6) of the Social Security Act (42 U.S.C. 
        409(a)(6)(B)) is amended to read as follows:
            ``(B) Cash remuneration paid by an employer in any calendar 
        year to an employee for domestic service in a private home of 
        the employer, if the cash remuneration paid in such year by the 
        employer to the employee for such service is less than the 
        applicable dollar threshold (as defined in section 3121(y)(2) 
        of the Internal Revenue Code of 1986) for such year. As used in 
        this subparagraph, the term `domestic service in a private home 
        of the employer' does not include service described in section 
        210(f)(5).''
            (3) Effective date.--The amendments made by this subsection 
        shall apply to remuneration paid in calendar years beginning 
        after December 31, 1993.
            (4) Relief from liability for certain underpayment 
        amounts.--
                    (A) In general.--On and after the date of the 
                enactment of this Act, an underpayment to which this 
                paragraph applies (and any penalty, addition to tax, 
                and interest with respect to such underpayment) shall 
                not be assessed (or, if assessed, shall not be 
                collected).
                    (B) Underpayments to which paragraph applies.--This 
                paragraph shall apply to an underpayment to the extent 
                of the amount thereof which would not be an 
                underpayment if--
                            (i) the amendments made by paragraph (1) 
                        had applied to all calendar years after 1950 
                        and before 1994, and
                            (ii) the applicable dollar threshold for 
                        any such calendar year were the amount 
                        determined under the following table:

                  In the case of
                                                         The applicable
                    calendar year:
                                                   dollar threshold is:
          1951, 1952, or 1953........................     $   200      
          1954, 1955, 1956, or 1957..................         250      
          1958, 1959, 1960, 1961, or 1962............         300      
          1963, 1964, 1965, or 1966..................         350      
          1967, 1968, 1969...........................         400      
          1970.......................................         450      
          1971, 1972, or 1973........................         500      
          1974 or 1975...............................         600      
          1976.......................................         650      
          1977.......................................         700      
          1978.......................................         750      
          1979.......................................         800      
          1980.......................................         850      
          1981.......................................         900      
          1982.......................................       1,000      
          1983.......................................       1,100      
          1984.......................................       1,200      
          1985.......................................       1,250      
          1986.......................................       1,300      
          1987.......................................       1,350      
          1988.......................................       1,400      
          1989.......................................       1,500      
          1990.......................................       1,550      
          1991.......................................       1,600      
          1992.......................................       1,700      
          1993.......................................       1,750      

SEC. 13014. INCREASE IN AUTHORIZED PERIOD FOR EXTENSION OF TIME TO FILE 
              ANNUAL EARNINGS REPORT.

    (a) In General.--Section 203(h)(1)(A) of the Social Security Act 
(42 U.S.C. 403(h)(1)(A)) is amended in the last sentence by striking 
``three months'' and inserting ``four months''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply with respect to reports of earnings for taxable years ending on 
or after December 31, 1993.

SEC. 13015. ALLOCATIONS TO FEDERAL DISABILITY INSURANCE TRUST FUND.

    (a) Allocation with Respect to Wages.--Section 201(b)(1) of the 
Social Security Act (42 U.S.C. 401(b)(1)) is amended to read as 
follows:
            ``(1) 1.75 percent of the wages (as defined in section 3121 
        of the Internal Revenue Code of 1986) paid after December 31, 
        1992, and reported to the Secretary of the Treasury or his 
        delegate pursuant to subtitle F of the Internal Revenue Code of 
        1986, which wages shall be certified by the Secretary of Health 
        and Human Services on the basis of the records of wages 
        established and maintained by such Secretary in accordance with 
        such reports; and''.
    (b) Allocation with Respect to Self-Employment Income.--Section 
201(b)(2) of such Act (42 U.S.C. 401(b)(2)) is amended to read as 
follows:
            ``(2) 1.75 percent of the self-employment income (as 
        defined in section 1402 of the Internal Revenue Code of 1986) 
        reported to the Secretary of the Treasury or his delegate on 
        tax returns under subtitle F of the Internal Revenue Code of 
        1986 for any taxable year beginning after December 31, 1992, 
        which self-employment income shall be certified by the 
        Secretary of Health and Human Services on the basis of the 
        records of self-employment income established and maintained by 
        the Secretary of Health and Human Services in accordance with 
        such returns.''.
    (c) Effective Date.--The amendments made by this section shall 
apply with respect to wages paid after December 31, 1992, and self-
employment income for taxable years beginning after such date.
    (d) Study on Rising Costs of Disability Benefits.--
            (1) In general.--As soon as practicable after the date of 
        the enactment of this Act, the Secretary of Health and Human 
        Services shall conduct a comprehensive study of the reasons for 
        rising costs payable from the Federal Disability Insurance 
        Trust Fund.
            (2) Matters to be included in study.--In conducting the 
        study under this subsection, the Secretary shall--
                    (A) determine the relative importance of the 
                following factors in increasing the costs payable from 
                the Trust Fund:
                            (i) increased numbers of applications for 
                        benefits;
                            (ii) higher rates of benefit allowances; 
                        and
                            (iii) decreased rates of benefit 
                        terminations; and
                    (B) identify, to the extent possible, underlying 
                social, economic, demographic, programmatic, and other 
                trends responsible for changes in disability benefit 
                applications, allowances, and terminations.
            (3) Report.--Not later than December 31, 1995, the 
        Secretary shall transmit a report to the Committee on Ways and 
        Means of the House of Representatives and the Committee on 
        Finance of the Senate setting forth the results of the study 
        conducted under this subsection, together with any 
        recommendations for legislative changes which the Secretary 
        determines appropriate.

SEC. 13016. EXTENSION OF DISABILITY INSURANCE PROGRAM DEMONSTRATION 
              PROJECT AUTHORITY.

    (a) In General.--Section 505 of the Social Security Disability 
Amendments of 1980 (Public Law 96-265), as amended by section 12101 of 
the Consolidated Omnibus Budget Reconciliation Act of 1985 (Public Law 
99-272), section 10103 of the Omnibus Budget Reconciliation Act of 1989 
(Public Law 101-239), and section 5120 of the Omnibus Budget 
Reconciliation Act of 1990 (Public Law 101-508) is further amended--
            (1) in paragraph (3) of subsection (a), by striking ``June 
        10, 1993'' and inserting ``June 10, 1996'';
            (2) in paragraph (4) of subsection (a), by striking 
        ``1992'' and inserting ``1995''; and
            (3) in subsection (c), by striking ``October 1, 1993'' and 
        inserting ``June 9, 1996''.
    (b) Effective Date.--The amendments made by this section shall take 
effect on the date of the enactment of this Act.

SEC. 13017. TECHNICAL AND CLERICAL AMENDMENTS.

    (a) Amendments to Title II of the Social Security Act.--
            (1) Section 201(a) of the Social Security Act (42 U.S.C. 
        401(a)) is amended, in the matter following clause (4), by 
        striking ``and and'' and inserting ``and''.
            (2) Section 202(d)(8)(D)(ii) of such Act (42 U.S.C. 
        402(d)(8)(D)(ii)) is amended by adding a period at the end and 
        by adjusting the left hand margination thereof so as to align 
        with section 202(d)(8)(D)(i) of such Act.
            (3) Section 202(q)(1)(A) of such Act (42 U.S.C. 
        402(q)(1)(A)) is amended by striking the dash at the end.
            (4) Section 202(q)(9) of such Act (42 U.S.C. 402(q)(9)) is 
        amended, in the matter preceding subparagraph (A), by striking 
        ``parargaph'' and inserting ``paragraph''.
            (5) Section 202(t)(4)(D) of such Act (42 U.S.C. 
        402(t)(4)(D)) is amended by inserting ``if the'' before 
        ``Secretary'' the second and third places it appears.
            (6) Clauses (i) and (ii) of section 203(f)(5)(C) of such 
        Act (42 U.S.C. 403(f)(5)(C)) are amended by adjusting the left-
        hand margination thereof so as to align with clauses (i) and 
        (ii) of section 203(f)(5)(B) of such Act.
            (7) Paragraph (3)(A) and paragraph (3)(B) of section 205(b) 
        of such Act (42 U.S.C. 405(b)) are amended by adjusting the 
        left-hand margination thereof so as to align with the matter 
        following section 205(b)(2)(C) of such Act.
            (8) Section 205(c)(2)(B)(iii) of such Act (42 U.S.C. 
        405(c)(2)(B)(iii)) is amended by striking ``non-public'' and 
        inserting ``nonpublic''.
            (9) Section 205(c)(2)(C) of such Act (42 U.S.C. 
        405(c)(2)(C)) is amended--
                    (A) by striking the clause (vii) added by section 
                2201(c) of Public Law 101-624; and
                    (B) by redesignating the clause (iii) added by 
                section 2201(b)(3) of Public Law 101-624, clause (iv), 
                clause (v), clause (vi), and the clause (vii) added by 
                section 1735(b) of Public Law 101-624 as clause (iv), 
                clause (v), clause (vi), clause (vii), and clause 
                (viii), respectively;
                    (C) in clause (v) (as redesignated), by striking 
                ``subclause (I) of'', and by striking ``subclause (II) 
                of clause (i)'' and inserting ``clause (ii)''; and
                    (D) in clause (viii)(IV) (as redesignated), by 
                inserting ``a social security account number or'' 
                before ``a request for''.
            (10) The heading for section 205(j) of such Act (42 U.S.C. 
        405(j)) is amended to read as follows:

                       ``Representative Payees''.

            (11) The heading for section 205(s) of such Act (42 U.S.C. 
        405(s)) is amended to read as follows:

                        ``Notice Requirements''.

            (12) Section 208(c) of such Act (42 U.S.C. 408(c)) is 
        amended by striking ``subsection (g)'' and inserting 
        ``subsection (a)(7)''.
            (13) Section 210(a)(5)(B)(i)(V) of such Act (42 U.S.C. 
        410(a)(5)(B)(i)(V)) is amended by striking ``section 
        105(e)(2)'' and inserting ``section 104(e)(2)''.
            (14) Section 211(a) of such Act (42 U.S.C. 411(a)) is 
        amended--
                    (A) in paragraph (13), by striking ``and'' at the 
                end; and
                    (B) in paragraph (14), by striking the period and 
                inserting ``; and''.
            (15) Section 213(c) of such Act (42 U.S.C. 413(c)) is 
        amended by striking ``section'' the first place it appears and 
        inserting ``sections''.
            (16) Section 215(a)(5)(B)(i) of such Act (42 U.S.C. 
        415(a)(5)(B)(i)) is amended by striking ``subsection'' the 
        second place it appears and inserting ``subsections''.
            (17) Section 215(f)(7) of such Act (42 U.S.C. 415(f)(7)) is 
        amended by inserting a period after ``1990''.
            (18) Subparagraph (F) of section 218(c)(6) of such Act (42 
        U.S.C. 418(c)(6)) is amended by adjusting the left-hand 
        margination thereof so as to align with section 218(c)(6)(E) of 
        such Act.
            (19) Section 223(i) of such Act (42 U.S.C. 423(i)) is 
        amended by adding at the beginning the following heading:

                ``Limitation on Payments to Prisoners''.

    (b) Related Amendments.--
            (1) Section 603(b)(5)(A) of Public Law 101-649 (amending 
        section 202(n)(1) of the Social Security Act) (104 Stat. 5085) 
        is amended by inserting ``under'' before ``paragraph (1),'' and 
        by striking ``(17), or (18)'' and inserting ``(17), (18), or 
        (19)'', effective as if this paragraph were included in such 
        section 603(b)(5)(A).
            (2) Section 10208(b)(1) of Public Law 101-239 (amending 
        section 230(b)(2)(A) of the Social Security Act) (103 Stat. 
        2477) is amended by striking ``230(b)(2)(A)'' and 
        ``430(b)(2)(A)'' and inserting ``230(b)(2)'' and ``430(b)(2)'', 
        respectively, effective as if this paragraph were included in 
        such section 10208(b)(1).
    (c) Conforming, Clerical Amendments Updating, Without Substantive 
Change, References in Title II of the Social Security Act to the 
Internal Revenue Code.--
            (1)(A) Section 201(a) of such Act (42 U.S.C. 401(a)) is 
        amended--
                    (i) by striking clauses (1) and (2);
                    (ii) in clause (3), by striking ``(3) the taxes 
                imposed'' and all that follows through ``December 31, 
                1954,'' and inserting ``(1) the taxes imposed by 
                chapter 21 (other than sections 3101(b) and 3111(b)) of 
                the Internal Revenue Code of 1986 with respect to wages 
                (as defined in section 3121 of such Code) reported to 
                the Secretary of the Treasury or his delegate pursuant 
                to subtitle F of such Code,'', and by striking 
                ``subchapter or'';
                    (iii) in clause (4), by striking ``(4) the taxes 
                imposed'' and all that follows through ``such Code,'' 
                and inserting ``(2) the taxes imposed by chapter 2 
                (other than section 1401(b)) of the Internal Revenue 
                Code of 1986 with respect to self-employment income (as 
                defined in section 1402 of such Code) reported to the 
                Secretary of the Treasury or his delegate on tax 
                returns under subtitle F of such Code,'', and by 
                striking ``subchapter or chapter'' and inserting 
                ``chapter''; and
                    (iv) in the matter following the clauses amended by 
                this subparagraph, by striking ``clauses (3) and (4)'' 
                each place it appears and inserting ``clauses (1) and 
                (2)''.
            (B) The amendments made by subparagraph (A) shall apply 
        only with respect to taxes imposed with respect to wages paid 
        on or after January 1, 1993, or with respect to self-employment 
        income for taxable years beginning on or after such date.
            (2)(A)(i) Section 201(g)(1) of such Act (42 U.S.C. 
        401(g)(1)) is amended--
                    (I) in subparagraph (A)(i), by striking ``and 
                subchapter E'' and all that follows through ``1954'' 
                and inserting ``and chapters 2 and 21 of the Internal 
                Revenue Code of 1986'';
                    (II) in subparagraph (A)(ii), by striking ``1954'' 
                and inserting ``1986'';
                    (III) in the matter in subparagraph (A) following 
                clause (ii), by striking ``subchapter E'' and all that 
                follows through ``1954.'' and inserting ``chapters 2 
                and 21 of the Internal Revenue Code of 1986.'', and by 
                striking ``1954 other'' and inserting ``1986 other''; 
                and
                    (IV) in subparagraph (B), by striking ``1954'' each 
                place it appears and inserting ``1986''.
            (ii) The amendments made by clause (i) shall apply only 
        with respect to periods beginning on or after the date of the 
        enactment of this Act.
            (B)(i) Section 201(g)(2) of such Act (42 U.S.C. 401(g)(2)) 
        is amended by striking ``section 3101(a)'' and all that follows 
        through ``1950.'' and inserting ``section 3101(a) of the 
        Internal Revenue Code of 1986 which are subject to refund under 
        section 6413(c) of such Code with respect to wages (as defined 
        in section 3121 of such Code).'', and by striking ``wages 
        reported'' and all that follows through ``1954,'' and inserting 
        ``wages reported to the Secretary of the Treasury or his 
        delegate pursuant to subtitle F of such Code,''.
            (ii) The amendments made by clause (i) shall apply only 
        with respect to wages paid on or after January 1, 1993.
            (C) Section 201(g)(4) of such Act (42 U.S.C. 401(g)(4)) is 
        amended--
                    (i) by striking ``The Board of Trustees shall 
                prescribe before January 1, 1981, the method'' and 
                inserting ``If at any time or times the Boards of 
                Trustees of such Trust Funds deem such action 
                advisable, they may modify the method prescribed by 
                such Boards'';
                    (ii) by striking ``1954'' and inserting ``1986''; 
                and
                    (iii) by striking the last sentence.
            (3) Section 202(v) of such Act (42 U.S.C. 402(v)) is 
        amended--
                    (A) in paragraph (1), by striking ``1954'' and 
                inserting ``1986''; and
                    (B) in paragraph (3)(A), by inserting ``of the 
                Internal Revenue Code of 1986'' after ``3127''.
            (4) Section 205(c)(5)(F)(i) of such Act (42 U.S.C. 
        405(c)(5)(F)(i)) is amended by inserting ``or the Internal 
        Revenue Code of 1986'' after ``1954''.
            (5)(A) Section 208(a)(1) of such Act (42 U.S.C. 408(a)(1)) 
        is amended--
                    (i) in the matter preceding subparagraph (A), by 
                striking ``subchapter E'' and all that follows through 
                ``1954'' and inserting ``chapter 2 or 21 or subtitle F 
                of the Internal Revenue Code of 1986'';
                    (ii) in subparagraph (A), by inserting ``of 1986'' 
                after ``Internal Revenue Code''; and
                    (iii) in subparagraph (B), by inserting ``of 1986'' 
                after ``Internal Revenue Code''.
            (B) The amendments made by subparagraph (A) shall apply 
        only with respect to violations occurring on or after the date 
        of the enactment of this Act.
            (6)(A) Section 209(a)(4)(A) of such Act (42 U.S.C. 
        409(a)(4)(A)) is amended by inserting ``or the Internal Revenue 
        Code of 1986'' after ``Internal Revenue Code of 1954''.
            (B) Section 209(a) of such Act (42 U.S.C. 409(a)) is 
        amended--
                    (i) in subparagraphs (C) and (E) of paragraph (4),
                    (ii) in paragraph (5)(A),
                    (iii) in subparagraphs (A) and (B) of paragraph 
                (14),
                    (iv) in paragraph (15),
                    (v) in paragraph (16), and
                    (vi) in paragraph (17),
        by striking ``1954'' each place it appears and inserting 
        ``1986''.
            (C) Subsections (b), (f), (g), (i)(1), and (j) of section 
        209 of such Act (42 U.S.C. 409) are amended by striking 
        ``1954'' each place it appears and inserting ``1986''.
            (7) Section 211(a)(15) of such Act (42 U.S.C. 411(a)(15)) 
        is amended by inserting ``of the Internal Revenue Code of 
        1986'' after ``section 162(m)''.
            (8) Title II of such Act is further amended--
                    (A) in subsections (f)(5)(B)(ii) and (k) of section 
                203 (42 U.S.C. 403),
                    (B) in section 205(c)(1)(D)(i) (42 U.S.C. 
                405(c)(1)(D)(i)),
                    (C) in the matter in section 210(a) (42 U.S.C. 
                410(a)) preceding paragraph (1) and in paragraphs (8), 
                (9), and (10) of section 210(a),
                    (D) in subsections (p)(4) and (q) of section 210 
                (42 U.S.C. 410),
                    (E) in the matter in section 211(a) (42 U.S.C. 
                411(a)) preceding paragraph (1) and in paragraphs (3), 
                (4), (6), (10), (11), and (12) and clauses (iii) and 
                (iv) of section 211(a),
                    (F) in the matter in section 211(c) (42 U.S.C. 
                411(c)) preceding paragraph (1), in paragraphs (3) and 
                (6) of section 211(c), and in the matter following 
                paragraph (6) of section 211(c),
                    (G) in subsections (d), (e), and (h)(1)(B) of 
                section 211 (42 U.S.C. 411),
                    (H) in section 216(j) (42 U.S.C. 416(j)),
                    (I) in section 218(e)(3) (42 U.S.C. 418(e)(3)),
                    (J) in section 229(b) (42 U.S.C. 429(b)),
                    (K) in section 230(c) (42 U.S.C. 430(c)), and
                    (L) in section 232 (42 U.S.C. 432),
        by striking ``1954'' each place it appears and inserting 
        ``1986''.
    (d) Rules of Construction.--
            (1) The preceding provisions of this section shall be 
        construed only as technical and clerical corrections and as 
        reflecting the original intent of the provisions amended 
        thereby.
            (2) Any reference in title II of the Social Security Act to 
        the Internal Revenue Code of 1986 shall be construed to include 
        a reference to the Internal Revenue Code of 1954 to the extent 
        necessary to carry out the provisions of paragraph (1).
    (e) Utilization of National Average Wage Index for Wage-Based 
Adjustments.--
            (1) Definition of national average wage index.--Section 
        209(k) of the Social Security Act (42 U.S.C. 409(k)) is 
        amended--
                    (A) by redesignating paragraph (2) as paragraph 
                (3);
                    (B) in paragraph (3) (as redesignated), by striking 
                ``paragraph (1)'' and inserting ``this subsection''; 
                and
                    (C) by striking paragraph (1) and inserting the 
                following new paragraphs:
    ``(k)(1) For purposes of sections 203(f)(8)(B)(ii), 213(d)(2)(B), 
215(a)(1)(B)(ii), 215(a)(1)(C)(ii), 215(a)(1)(D), 215(b)(3)(A)(ii), 
215(i)(1)(E), 215(i)(2)(C)(ii), 224(f)(2)(B), and 230(b)(2) (and 
230(b)(2) as in effect immediately prior to the enactment of the Social 
Security Amendments of 1977), the term `national average wage index' 
for any particular calendar year means, subject to regulations of the 
Secretary under paragraph (2), the average of the total wages for such 
particular calendar year.
    ``(2) The Secretary shall prescribe regulations under which the 
national average wage index for any calendar year shall be computed--
            ``(A) on the basis of amounts reported to the Secretary of 
        the Treasury or his delegate for such year,
            ``(B) by disregarding the limitation on wages specified in 
        subsection (a)(1),
            ``(C) with respect to calendar years after 1990, by 
        incorporating deferred compensation amounts and factoring in 
        for such years the rate of change from year to year in such 
        amounts, in a manner consistent with the requirements of 
        section 10208 of the Omnibus Budget Reconciliation Act of 1989, 
        and
            ``(D) with respect to calendar years before 1978, in a 
        manner consistent with the manner in which the average of the 
        total wages for each of such calendar years was determined as 
        provided by applicable law as in effect for such years.''.
            (2) Conforming amendments.--
                    (A) Section 203(f)(8)(B)(ii) of such Act (42 U.S.C. 
                403(f)(8)(B)(ii)) is amended by striking ``deemed 
                average total wages'' each place it appears and 
                inserting ``national average wage index''.
                    (B) Section 213(d)(2)(B) of such Act (42 U.S.C. 
                413(d)(2)(B)) is amended by striking ``deemed average 
                total wages'' and inserting ``national average wage 
                index'', and by striking ``the average of the total 
                wages'' and all that follows and inserting ``the 
                national average wage index (as so defined) for 
                1976,''.
                    (C) Section 215(a)(1)(B)(ii) of such Act (42 U.S.C. 
                415(a)(1)(B)(ii)) is amended--
                            (i) in subclause (I), by striking ``deemed 
                        average total wages'' and inserting ``national 
                        average wage index''; and
                            (ii) in subclause (II), by striking ``the 
                        average of the total wages'' and all that 
                        follows and inserting ``the national average 
                        wage index (as so defined) for 1977.''.
                    (D) Section 215(a)(1)(C)(ii) of such Act (42 U.S.C. 
                415(a)(1)(C)(ii)) is amended by striking ``deemed 
                average total wages'' and inserting ``national average 
                wage index''.
                    (E) Section 215(a)(1)(D) of such Act (42 U.S.C. 
                415(a)(1)(D)) is amended--
                            (i) by striking ``after 1978'';
                            (ii) by striking ``and the average of the 
                        total wages (as described in subparagraph 
                        (B)(ii)(I))'' and inserting ``and the national 
                        average wage index (as defined in section 
                        209(k)(1))''; and
                            (iii) by striking the last sentence.
                    (F) Section 215(b)(3)(A)(ii) of such Act (42 U.S.C. 
                415(b)(3)(A)(ii)) is amended by striking ``deemed 
                average total wages'' each place it appears and 
                inserting ``national average wage index''.
                    (G) Section 215(i)(1) of such Act (42 U.S.C. 
                415(i)(1)) is amended--
                            (i) in subparagraph (E), by striking ``SSA 
                        average wage index'' and inserting ``national 
                        average wage index (as defined in section 
                        209(k)(1))''; and
                            (ii) by striking subparagraph (G) and 
                        redesignating subparagraph (H) as subparagraph 
                        (G).
                    (H) Section 215(i)(2)(C)(ii) of such Act (42 U.S.C. 
                415(i)(1)(C)(ii)) is amended to read as follows:
    ``(ii) The Secretary shall determine and promulgate the OASDI fund 
ratio for the current calendar year on or before November 1 of the 
current calendar year, based upon the most recent data then available. 
The Secretary shall include a statement of the fund ratio and the 
national average wage index (as defined in section 209(k)(1)) and a 
statement of the effect such ratio and the level of such index may have 
upon benefit increases under this subsection in any notification made 
under clause (i) and any determination published under subparagraph 
(D).''.
                    (I) Section 224(f)(2) of such Act (42 U.S.C. 
                424a(f)(2)) is amended--
                            (i) in subparagraph (A), by adding ``and'' 
                        at the end;
                            (ii) by striking subparagraph (C); and
                            (iii) by striking subparagraph (B) and 
                        inserting the following:
            ``(B) the ratio of (i) the national average wage index (as 
        defined in section 209(k)(1)) for the calendar year before the 
        year in which such redetermination is made to (ii) the national 
        average wage index (as so defined) for the calendar year before 
        the year in which the reduction was first computed (but not 
        counting any reduction made in benefits for a previous period 
        of disability).''.
                    (J) Section 230(b)(2) of such Act (42 U.S.C. 
                430(b)(2)) is amended by striking ``deemed average 
                total wages'' each place it appears and inserting 
                ``national average wage index''.
                    (K) Section 230(d) of such Act (42 U.S.C. 430(d)) 
                is amended by striking ``deemed average total wage'' 
                and inserting ``national average wage index''.

SEC. 13018. CROSS-MATCHING OF SOCIAL SECURITY ACCOUNT NUMBER 
              INFORMATION AND EMPLOYER IDENTIFICATION NUMBER 
              INFORMATION MAINTAINED BY THE DEPARTMENT OF AGRICULTURE.

    (a) Social Security Account Number Information.--Clause (iii) of 
section 205(c)(2)(C) of the Social Security Act (42 U.S.C. 
405(c)(2)(C)) (as added by section 1735(a)(3) of the Food, Agriculture, 
Conservation, and Trade Act of 1990 (Public Law 101-624; 104 Stat. 
3791)) is amended--
            (1) by inserting ``(I)'' after ``(iii)''; and
            (2) by striking ``The Secretary of Agriculture shall 
        restrict'' and all that follows and inserting the following:
    ``(II) The Secretary of Agriculture may share any information 
contained in any list referred to in subclause (I) with any other 
agency or instrumentality of the United States which otherwise has 
access to social security account numbers in accordance with this 
subsection or other applicable Federal law, except that the Secretary 
of Agriculture may share such information only to the extent that such 
Secretary determines such sharing would assist in verifying and 
matching such information against information maintained by such other 
agency or instrumentality. Any such information shared pursuant to this 
subclause may be used by such other agency or instrumentality only for 
the purpose of effective administration and enforcement of the Food 
Stamp Act of 1977 or for the purpose of investigation of violations of 
other Federal laws or enforcement of such laws.
    ``(III) The Secretary of Agriculture, and the head of any other 
agency or instrumentality referred to in this subclause, shall 
restrict, to the satisfaction of the Secretary of Health and Human 
Services, access to social security account numbers obtained pursuant 
to this clause only to officers and employees of the United States 
whose duties or responsibilities require access for the purposes 
described in subclause (II).
    ``(IV) The Secretary of Agriculture, and the head of any agency or 
instrumentality with which information is shared pursuant to clause 
(II), shall provide such other safeguards as the Secretary of Health 
and Human Services determines to be necessary or appropriate to protect 
the confidentiality of the social security account numbers.''.
    (b) Employer Identification Number Information.--Subsection (f) of 
section 6109 of the Internal Revenue Code of 1986 (as added by section 
1735(c) of the Food, Agriculture, Conservation, and Trade Act of 1990 
(Public Law 101-624; 104 Stat. 3792)) (relating to access to employer 
identification numbers by Secretary of Agriculture for purposes of Food 
Stamp Act of 1977) is amended--
            (1) by striking paragraph (2) and inserting the following:
            ``(2) Sharing of Information and Safeguards.--
                    ``(A) Sharing of information.--The Secretary of 
                Agriculture may share any information contained in any 
                list referred to in paragraph (1) with any other agency 
                or instrumentality of the United States which otherwise 
                has access to employer identification numbers in 
                accordance with this section or other applicable 
                Federal law, except that the Secretary of Agriculture 
                may share such information only to the extent that such 
                Secretary determines such sharing would assist in 
                verifying and matching such information against 
                information maintained by such other agency or 
                instrumentality. Any such information shared pursuant 
                to this subparagraph may be used by such other agency 
                or instrumentality only for the purpose of effective 
                administration and enforcement of the Food Stamp Act of 
                1977 or for the purpose of investigation of violations 
                of other Federal laws or enforcement of such laws.
                    ``(B) Safeguards.--The Secretary of Agriculture, 
                and the head of any other agency or instrumentality 
                referred to in subparagraph (A), shall restrict, to the 
                satisfaction of the Secretary of the Treasury, access 
                to employer identification numbers obtained pursuant to 
                this subsection only to officers and employees of the 
                United States whose duties or responsibilities require 
                access for the purposes described in subparagraph (A). 
                The Secretary of Agriculture, and the head of any 
                agency or instrumentality with which information is 
                shared pursuant to subparagraph (A), shall provide such 
                other safeguards as the Secretary of the Treasury 
                determines to be necessary or appropriate to protect 
                the confidentiality of the employer identification 
                numbers.'';
            (2) in paragraph (3), by striking ``by the Secretary of 
        Agriculture pursuant to this subsection'' and inserting 
        ``pursuant to this subsection by the Secretary of Agriculture 
        or the head of any agency or instrumentality with which 
        information is shared pursuant to paragraph (2)'', and by 
        striking ``social security account numbers'' and inserting 
        ``employer identification numbers''; and
            (3) in paragraph (4), by striking ``by the Secretary of 
        Agriculture pursuant to this subsection'' and inserting 
        ``pursuant to this subsection by the Secretary of Agriculture 
        or any agency or instrumentality with which information is 
        shared pursuant to paragraph (2)''.

SEC. 13019. PROHIBITION OF MISUSE OF DEPARTMENT OF THE TREASURY NAMES, 
              SYMBOLS, ETC.

    (a) General Rule.--Subchapter II of chapter 3 of title 31, United 
States Code, is amended by adding at the end thereof the following new 
section:
``Sec. 333. Prohibition of misuse of Department of the Treasury names, 
              symbols, etc.
    ``(a) General Rule.--No person may use, in connection with, or as a 
part of, any advertisement, solicitation, business activity, or 
product, whether alone or with other words, letters, symbols, or 
emblems--
            ``(1) the words `Department of the Treasury', or the name 
        of any service, bureau, office, or other subdivision of the 
        Department of the Treasury,
            ``(2) the titles `Secretary of the Treasury' or `Treasurer 
        of the United States' or the title of any other officer or 
        employee of the Department of the Treasury,
            ``(3) the abbreviations or initials of any entity referred 
        to in paragraph (1),
            ``(4) the words `United States Savings Bond' or the name of 
        any other obligation issued by the Department of the Treasury,
            ``(5) any symbol or emblem of an entity referred to in 
        paragraph (1) (including the design of any envelope or 
        stationary used by such an entity), and
            ``(6) any colorable imitation of any such words, titles, 
        abbreviations, initials, symbols, or emblems,
in a manner which could reasonably be interpreted or construed as 
conveying the false impression that such advertisement, solicitation, 
business activity, or product is in any manner approved, endorsed, 
sponsored, or authorized by, or associated with, the Department of the 
Treasury or any entity referred to in paragraph (1) or any officer or 
employee thereof.
    ``(b) Treatment of Disclaimers.--Any determination of whether a 
person has violated the provisions of subsection (a) shall be made 
without regard to any use of a disclaimer of affiliation with the 
United States Government or any particular agency or instrumentality 
thereof.
    ``(c) Civil Penalty.--
            ``(1) In general.--The Secretary of the Treasury may impose 
        a civil penalty on any person who violates the provisions of 
        subsection (a).
            ``(2) Amount of penalty.--The amount of the civil penalty 
        imposed by paragraph (1) shall not exceed $5,000 for each use 
        of any material in violation of subsection (a). If such use is 
        in a broadcast or telecast, the preceding sentence shall be 
        applied by substituting `$25,000' for `$5,000'.
            ``(3) Time limitations.--
                    ``(A) Assessments.--The Secretary of the Treasury 
                may assess any civil penalty under paragraph (1) at any 
                time before the end of the 3-year period beginning on 
                the date of the violation with respect to which such 
                penalty is imposed.
                    ``(B) Civil action.--The Secretary of the Treasury 
                may commence a civil action to recover any penalty 
                imposed under this subsection at any time before the 
                end of the 2-year period beginning on the date on which 
                such penalty was assessed.
            ``(4) Coordination with subsection (d).--No penalty may be 
        assessed under this subsection with respect to any violation 
        after a criminal proceeding with respect to such violation has 
        been commenced under subsection (d).
    ``(d) Criminal Penalty.--
            ``(1) In general.--If any person knowingly violates 
        subsection (a), such person shall, upon conviction thereof, be 
        fined not more than $10,000 for each such use or imprisoned not 
        more than 1 year, or both. If such use is in a broadcast or 
        telecast, the preceding sentence shall be applied by 
        substituting `$50,000' for `$10,000'.
            ``(2) Time limitations.--No person may be prosecuted, 
        tried, or punished under paragraph (1) for any violation of 
        subsection (a) unless the indictment is found or the 
        information instituted during the 3-year period beginning on 
        the date of the violation.
            ``(3) Coordination with subsection (c).--No criminal 
        proceeding may be commenced under this subsection with respect 
        to any violation if a civil penalty has previously been 
        assessed under subsection (c) with respect to such violation.''
    (b) Clerical Amendment.--The analysis for chapter 3 of title 31, 
United States Code, is amended by adding after the item relating to 
section 332 the following new item:

``333. Prohibition of misuse of Department of the Treasury names, 
                            symbols, etc.''.
    (c) Effective Date.--The amendments made by this section shall take 
effect on the date of the enactment of this Act.
    (d) Report.--Not later than May 1, 1995, the Secretary of the 
Treasury shall submit a report to the Committee on Ways and Means of 
the House of Representatives and the Committee on Finance of the Senate 
on the implementation of the amendments made by this section. Such 
report shall include the number of cases in which the Secretary has 
notified persons of violations of section 333 of title 31, United 
States Code (as added by subsection (a)), the number of prosecutions 
commenced under such section, and the total amount of the penalties 
collected in such prosecutions.

SEC. 13020. AVAILABILITY AND USE OF DEATH INFORMATION UNDER THE OLD-
              AGE, SURVIVORS, AND DISABILITY INSURANCE PROGRAM.

    (a) Improvements in Program for Use of Death Certificates to 
Correct Program Information.--
            (1) Elimination of state restrictions on use of 
        information.--Section 205(r)(1) of the Social Security Act (42 
        U.S.C. 405(r)(1)) is amended by adding at the end, after and 
        below subparagraph (B), the following new sentence:
``Any contract entered into pursuant to subparagraph (A) shall not 
include any restriction on the use of information obtained by the 
Secretary pursuant to such contract, except to the extent that such use 
may be restricted under paragraph (6).''.
            (2) Information provided to state agencies free of 
        charge.--
                    (A) In general.--Section 205(r)(4) of such Act (42 
                U.S.C. 405(r)(4)) is amended to read as follows:
    ``(4)(A) In the case of individuals with respect to whom federally 
funded benefits are provided by (or through) a State agency other than 
under this Act, the Secretary shall to the extent feasible provide such 
information free of charge through a cooperative arrangement with such 
agency, for ensuring proper payment of those benefits with respect to 
such individuals, if such arrangement does not conflict with the duties 
of the Secretary under paragraph (1).
    ``(B) The Secretary may enter into similar agreements with States 
to provide information free of charge for their use in programs wholly 
funded by the States if such arrangement does not conflict with the 
duties of the Secretary under paragraph (1).''.
                    (B) Conforming amendment.--Section 205(r)(3) of 
                such Act (42 U.S.C. 405(r)(3)) is amended by striking 
                ``or State''.
            (3) Use by states of social security account numbers 
        contingent upon participation in program.--Section 205(r)(2) of 
        such Act (42 U.S.C. 405(r)(2)) is amended--
                    (A) by inserting ``(A)'' after ``(2)''; and
                    (B) by adding at the end the following new 
                subparagraph:
    ``(B) Notwithstanding section 7(a)(2)(B) of the Privacy Act of 1974 
and clauses (i) and (v) of subsection (c)(2)(C) of this section, any 
State which is not a party to a contract with the Secretary meeting the 
requirements of paragraph (1) (and any political subdivision thereof) 
may not utilize an individual's social security account number in the 
administration of any driver's license or motor vehicle registration 
law.''.
    (b) Study Regarding Improvements in Gathering and Reporting of 
Death Information.
            (1) In general.--As soon as practicable after the date of 
        the enactment of this Act, the Secretary of Health and Human 
        Services shall conduct a study of possible improvements in the 
        current methods of gathering and reporting death information by 
        the Federal, State, and local governments which would result in 
        more efficient and expeditious handling of such information.
            (2) Specific matters to be studied.--In carrying out the 
        study required under this subsection, the Secretary shall--
                    (A) ascertain the delays in the receipt of death 
                information which are currently encountered by the 
                Social Security Administration and other agencies in 
                need of such information on a regular basis,
                    (B) analyze the causes of such delays,
                    (C) develop alternative options for improving 
                Federal, State, and local agency cooperation in 
                reducing such delays, and
                    (D) evaluate the costs and benefits associated with 
                the options referred to in subparagraph (C).
            (3) Report.--Not later than June 1, 1994, the Secretary 
        shall submit a written report to the Committee on Ways and 
        Means of the House of Representatives and the Committee on 
        Finance of the Senate setting forth the results of the study 
        conducted pursuant to this subsection, together with such 
        administrative and legislative recommendations as the Secretary 
        may consider appropriate.
    (c) Effective Date.--
            (1) In general.--The amendments made by subsection (a) 
        shall take effect 1 year after the date of the enactment of 
        this Act.
            (2) Promotion of entry into new contracts.--As soon as 
        practicable after the date of the enactment of this Act, the 
        Secretary of Health and Human Services shall take such actions 
        as are necessary and appropriate to promote entry into 
        contracts under section 205(r) of the Social Security Act which 
        are in compliance with the requirements of the amendments made 
        by subsection (a).

                Subtitle D--Customs and Trade Provisions

SEC. 13601. CUSTOMS AND TRADE AGENCY AUTHORIZATIONS FOR FISCAL YEARS 
              1994 AND 1995.

    (a) United States International Trade Commission.--Section 
330(e)(2) of the Tariff Act of 1930 (19 U.S.C. 1330(e)(2)) is amended 
to read as follows:
    ``(2)(A) There are authorized to be appropriated to the Commission 
for necessary expenses (including the rental of conference rooms in the 
District of Columbia and elsewhere) not to exceed the following:
            ``(i) $45,416,000 for fiscal year 1994.
            ``(ii) $45,974,000 for fiscal year 1995.
    ``(B) Not to exceed $2,500 of the amount authorized to be 
appropriated for any fiscal year under subparagraph (A) may be used, 
subject to the approval of the Chairman of the Commission, for 
reception and entertainment expenses.
    ``(C) No part of any sum that is appropriated under the authority 
of subparagraph (A) may be used by the Commission in the making of any 
special study, investigation, or report that is requested by any agency 
of the executive branch unless that agency reimburses the Commission 
for the cost thereof.''.
    (b) United States Customs Service.--Section 301(b) of the Customs 
Procedural Reform and Simplification Act of 1978 (19 U.S.C. 2075(b)) is 
amended to read as follows:
    ``(b) Authorization of Appropriations.--
            ``(1) For noncommercial operations.--There are authorized 
        to be appropriated for the salaries and expenses of the Customs 
        Service that are incurred in noncommercial operations not to 
        exceed the following:
                    ``(A) $540,783,000 for fiscal year 1994.
                    ``(B) $527,000,000 for fiscal year 1995.
            ``(2) For commercial operations.--(A) There are authorized 
        to be appropriated for the salaries and expenses of the Customs 
        Service that are incurred in commercial operations not less 
        than the following:
                    ``(i) $771,036,000 for fiscal year 1994.
                    ``(ii) $748,000,000 for fiscal year 1995.
            ``(B) The monies authorized to be appropriated under 
        subparagraph (A) for any fiscal year, except for such sums as 
        may be necessary for the salaries and expenses of the Customs 
        Service that are incurred in connection with the processing of 
        merchandise that is exempt from the fees imposed under section 
        13031(a) (9) and (10) of the Consolidated Omnibus Budget 
        Reconciliation Act of 1985, shall be appropriated from the 
        Customs User Fee Account.
            ``(3) For air and marine interdiction.--There are 
        authorized to be appropriated for the operation (including 
        salaries and expenses) and maintenance of the air and marine 
        interdiction programs of the Customs Service not to exceed the 
        following:
                    ``(A) $95,156,000 for fiscal year 1994.
                    ``(B) $128,000,000 for fiscal year 1995.''.
    (c) Office of the United States Trade Representative.--Section 
141(g)(1) of the Trade Act of 1974 (19 U.S.C. 2171(g)(1)) is amended to 
read as follows:
    ``(g)(1)(A) There are authorized to be appropriated to the Office 
for the purposes of carrying out its functions not to exceed the 
following:
            ``(i) $20,143,000 for fiscal year 1994.
            ``(ii) $20,419,000 for fiscal year 1995.
    ``(B) Of the amounts authorized to be appropriated under 
subparagraph (A) for any fiscal year--
            ``(i) not to exceed $98,000 may be used for entertainment 
        and representation expenses of the Office; and
            ``(ii) not to exceed $2,500,000 shall remain available 
        until expended.''.

SEC. 13602. EXTENSION OF AUTHORITY TO LEVY CUSTOMS USER FEES.

    Section 13031(j)(3) of the Consolidated Omnibus Budget 
Reconciliation Act of 1985 (19 U.S.C. 58c(j)(3)) is amended by striking 
out ``1995'' and inserting ``1998''.

SEC. 13603. GENERALIZED SYSTEM OF PREFERENCES.

    (a) Treatment of Countries Formerly Within the Union of Soviet 
Socialist Republics.--The table in section 502(b) of the Trade Act of 
1974 (19 U.S.C. 2462(b)) is amended by striking out ``Union of Soviet 
Socialist Republics''.
    (b) Extension of Duty-Free Treatment Under System.--
            (1) In general.--Section 505(a) of the Trade Act of 1974 
        (19 U.S.C. 2465(a)) is amended by striking out ``July 4, 1993'' 
        and inserting ``September 30, 1994''.
            (2) Retroactive application for certain liquidations and 
        reliquidations.--Notwithstanding section 514 of the Tariff Act 
        of 1930 or any other provision of law, upon proper request 
        filed with the appropriate customs officer within 180 days 
        after the date of the enactment of this Act, the entry--
                    (A) of any article to which duty-free treatment 
                under title V of the Trade Act of 1974 would have 
                applied if the entry had been made on July 4, 1993, and
                    (B) that was made after July 4, 1993, and before 
                such date of enactment,
        shall be liquidated or reliquidated as free of duty, and the 
        Secretary of the Treasury shall refund any duty paid with 
        respect to such entry. As used in this paragraph, the term 
        ``entry'' includes a withdrawal from warehouse for consumption.

SEC. 13604. EXTENSION OF, AND AUTHORIZATION OF APPROPRIATIONS FOR, THE 
              WORKER TRADE ADJUSTMENT ASSISTANCE PROGRAM.

    (a) Extension.--Section 285 of the Trade Act of 1974 (19 U.S.C. 
note preceding 2271) is amended--
            (1) by striking out ``No'' and all that follows thereafter 
        down through ``chapter 2, no'' in subsection (b) and inserting 
        ``No''; and
            (2) by adding at the end the following new subsection:
    ``(c) No assistance, vouchers, allowances, or other payments may be 
provided under chapter 2 after September 30, 1996.''.
    (b) Authorization of Appropriations.--Section 245 of the Trade Act 
of 1974 (19 U.S.C. 2317) is amended by striking out ``and 1993,'' and 
inserting ``1993, 1994, 1995, and 1996,''.

SEC. 13605. EXTENSION OF URUGUAY ROUND TRADE AGREEMENT NEGOTIATING AND 
              PROCLAMATION AUTHORITY AND OF ``FAST TRACK'' PROCEDURES 
              TO IMPLEMENTING LEGISLATION.

    Section 1102 of the Omnibus Trade and Competitiveness Act of 1988 
(19 U.S.C. 2902) is amended by inserting at the end the following new 
subsection:
    ``(e) Special Provisions Regarding Uruguay Round Trade 
Negotiations.--
            ``(1) In general.--Notwithstanding the time limitations in 
        subsections (a) and (b), if the Uruguay Round of multilateral 
        trade negotiations under the auspices of the General Agreement 
        on Tariffs and Trade has not resulted in trade agreements by 
        May 31, 1993, the President may, during the period after May 
        31, 1993, and before April 16, 1994, enter into, under 
        subsections (a) and (b), trade agreements resulting from such 
        negotiations.
            ``(2) Application of tariff proclamation authority.--No 
        proclamation under subsection (a) to carry out the provisions 
        regarding tariff barriers of a trade agreement that is entered 
        into pursuant to paragraph (1) may take effect before the 
        effective date of a bill that implements the provisions 
        regarding nontariff barriers of a trade agreement that is 
        entered into under such paragraph.
            ``(3) Application of implementing and `fast track' 
        procedures.--Section 1103 applies to any trade agreement 
        negotiated under subsection (b) pursuant to paragraph (1), 
        except that--
                    ``(A) in applying subsection (a)(1)(A) of section 
                1103 to any such agreement, the phrase `at least 120 
                calendar days before the day on which he enters into 
                the trade agreement (but not later than December 15, 
                1993),' shall be substituted for the phrase `at least 
                90 calendar days before the day on which he enters into 
                the trade agreement; and
                    ``(B) no provision of subsection (b) of section 
                1103 other than paragraph (1)(A) applies to any such 
                agreement and in applying such paragraph, `April 16, 
                1994;' shall be substituted for `June 1, 1991;'.
            ``(4) Advisory committee reports.--The report required 
        under section 135(e)(1) of the Trade Act of 1974 regarding any 
        trade agreement provided for under paragraph (1) shall be 
        provided to the President, the Congress, and the United States 
        Trade Representative not later than 30 days after the date on 
        which the President notifies the Congress under section 
        1103(a)(1)(A) of his intention to enter into the agreement (but 
        before January 15, 1994).''.

SEC. 13606. REPEAL OF EAST-WEST TRADE STATISTICS MONITORING SYSTEM.

    (a) Repeal.--Section 410 of the Trade Act of 1974 (19 U.S.C. 2440) 
is repealed.
    (b) Conforming Amendment.--The table of contents for such Act of 
1974 is amended by striking out the following:

``Sec. 410. East-West Trade Statistics Monitoring System.''.

                 Subtitle E--Customs Officer Pay Reform

SEC. 13701. OVERTIME AND PREMIUM PAY FOR CUSTOMS OFFICERS.

    (a) In General.--Section 5 of the Act of February 13, 1911 (19 
U.S.C. 261 and 267) is amended to read as follows:

``SEC. 5. OVERTIME AND PREMIUM PAY FOR CUSTOMS OFFICERS.

    ``(a) Overtime Pay.--
            ``(1) In general.--Subject to paragraph (2) and subsection 
        (c), a customs officer who is officially assigned to perform 
        work in excess of 40 hours in the administrative workweek of 
        the officer or in excess of 8 hours in a day shall be 
        compensated for that work at an hourly rate of pay that is 
        equal to 2 times the hourly rate of the basic pay of the 
        officer. For purposes of this paragraph, the hourly rate of 
        basic pay for a customs officer does not include any premium 
        pay provided for under subsection (b).
            ``(2) Special provisions relating to overtime work on 
        callback basis.--
                    ``(A) Minimum duration.--Any work for which 
                compensation is authorized under paragraph (1) and for 
                which the customs officer is required to return to the 
                officer's place of work shall be treated as being not 
                less than 2 hours in duration; but only if such work 
                begins at least 1 hour after the end of any previous 
                regularly scheduled work assignment and ends at least 1 
                hour before the beginning of the following regularly 
                scheduled work assignment.
                    ``(B) Compensation for commuting time.--
                            ``(i) In general.--Except as provided in 
                        clause (ii), in addition to the compensation 
                        authorized under paragraph (1) for work to 
                        which subparagraph (A) applies, the customs 
                        officer is entitled to be paid, as compensation 
                        for commuting time, an amount equal to 3 times 
                        the hourly rate of basic pay of the officer.
                            ``(ii) Exception.--Compensation for 
                        commuting time is not payable under clause (i) 
                        if the work for which compensation is 
                        authorized under paragraph (1)--
                                    ``(I) does not commence within 16 
                                hours of the customs officer's last 
                                regularly scheduled work assignment, or
                                    ``(II) commences within 2 hours of 
                                the next regularly scheduled work 
                                assignment of the customs officer.
    ``(b) Premium Pay for Customs Officers.--
            ``(1) Night work differential.--
                    ``(A) 3 p.m. to midnight shiftwork.--If the 
                majority of the hours of regularly scheduled work of a 
                customs officer occur during the period beginning at 3 
                p.m. and ending at 12 a.m., the officer is entitled to 
                pay for work during such period (except for work to 
                which paragraph (2) or (3) applies) at the officer's 
                hourly rate of basic pay plus premium pay amounting to 
                15 percent of that basic rate.
                    ``(B) 11 p.m. to 8 a.m. shiftwork.--If the majority 
                of the hours of regularly scheduled work of a customs 
                officer occur during the period beginning at 11 p.m. 
                and ending at 8 a.m., the officer is entitled to pay 
                for work during such period (except for work to which 
                paragraph (2) or (3) applies) at the officer's hourly 
                rate of basic pay plus premium pay amounting to 20 
                percent of that basic rate.
                    ``(C) 7:30 p.m. to 3:30 a.m. shiftwork.--If the 
                regularly scheduled work assignment of a customs 
                officer is 7:30 p.m. to 3:30 a.m., the officer is 
                entitled to pay for work during such period (except for 
                work to which paragraph (2) or (3) applies) at the 
                officer's hourly rate of basic pay plus premium pay 
                amounting to 15 percent of that basic rate for the 
                period from 7:30 p.m. to 11:30 p.m. and at the 
                officer's hourly rate of basic pay plus premium pay 
                amounting to 20 percent of that basic rate for the 
                period from 11:30 p.m. to 3:30 a.m.
            ``(2) Sunday differential.--A customs officer who performs 
        any regularly scheduled work on a Sunday that is not a holiday 
        is entitled to pay for that work at the officer's hourly rate 
        of basic pay plus premium pay amounting to 50 percent of that 
        basic rate.
            ``(3) Holiday differential.--A customs officer who performs 
        any regularly scheduled work on a holiday is entitled to pay 
        for that work at the officer's hourly rate of basic pay plus 
        premium pay amounting to 100 percent of that basic rate.
            ``(4) Treatment of premium pay.--Premium pay provided for 
        under this subsection may not be treated as being overtime pay 
        or compensation for any purpose.
    ``(c) Limitations.--
            ``(1) Fiscal year cap.--The aggregate of overtime pay under 
        subsection (a) (including commuting compensation under 
        subsection (a)(2)(B)) and premium pay under subsection (b) that 
        a customs officer may be paid in any fiscal year may not exceed 
        $25,000; except that the Commissioner of Customs or his 
        designee may waive this limitation in individual cases in order 
        to prevent excessive costs or to meet emergency requirements of 
        the Customs Service.
            ``(2) Exclusivity of pay under this section.--A customs 
        officer who receives overtime pay under subsection (a) or 
        premium pay under subsection (b) for time worked may not 
        receive pay or other compensation for that work under any other 
        provision of law.
    ``(d) Regulations.--The Secretary of the Treasury shall prescribe 
such regulations as are necessary or appropriate to carry out this 
section, including regulations--
            ``(1) to ensure that callback work assignments are 
        commensurate with the overtime pay authorized for such work; 
        and
            ``(2) to prevent the disproportionate assignment of 
        overtime work to customs officers who are near to retirement.
    ``(e) Definitions.--As used in this section:
            ``(1) The term `customs officer' means an individual 
        performing those functions specified by regulation by the 
        Secretary of the Treasury for a customs inspector or canine 
        enforcement officer. Such functions shall be consistent with 
        such applicable standards as may be promulgated by the Office 
        of Personnel Management.
            ``(2) The term `holiday' means any day designated as a 
        holiday under a Federal statute or Executive order.''.
    (b) Conforming Amendments.--
            (1) Section 2 of the Act of June 3, 1944 (19 U.S.C. 1451a), 
        is repealed.
            (2) Section 450 of the Tariff Act of 1930 (19 U.S.C. 1450) 
        is amended--
                    (A) by striking out ``at night'' in the section 
                heading and inserting ``during overtime hours'';
                    (B) by striking out ``at night'' and inserting 
                ``during overtime hours''; and
                    (C) by inserting ``aircraft,'' immediately before 
                ``vessel''.
    (c) Effective Date.--The amendments made by subsections (a) and (b) 
apply to customs inspectional services provided on or after October 1, 
1993.

SEC. 13702. FOREIGN LANGUAGE PROFICIENCY AWARDS FOR CUSTOMS OFFICERS.

    Cash awards for foreign language proficiency may, under regulations 
prescribed by the Secretary of the Treasury, be paid to customs 
officers (as referred to in section 5(e)(1) of the Act of February 13, 
1911) to the same extent and in the same manner as would be allowable 
under subchapter III of chapter 45 of title 5, United States Code, with 
respect to law enforcement officers (as defined by section 4521 of such 
title).

SEC. 13703. APPROPRIATIONS REIMBURSEMENTS FROM THE CUSTOMS USER FEE 
              ACCOUNT.

    Section 13031(f)(3) of the Consolidated Omnibus Budget 
Reconciliation Act of 1985 (19 U.S.C. 58c(f)(3)) is amended--
            (1) by amending clause (i) of subparagraph (A) to read as 
        follows: ``(i) in--
                    ``(I) paying overtime compensation under section 
                5(a) of the Act of February 13, 1911,
                    ``(II) paying premium pay under section 5(b) of the 
                Act of February 13, 1911, but the amount for which 
                reimbursement may be made under this subclause may not, 
                for any fiscal year, exceed the difference between the 
                cost of the premium pay for that year calculated under 
                such section 5(b) as amended by section 13701 of the 
                Omnibus Budget Reconciliation Act of 1993 and the cost 
                of such pay calculated under subchapter V of chapter 55 
                of title 5, United States Code,
                    ``(III) paying agency contributions to the Civil 
                Service Retirement and Disability Fund to match 
                deductions from the overtime compensation paid under 
                subclause (I), and
                    ``(IV) providing all preclearance services for 
                which the recipients of such services are not required 
                to reimburse the Secretary of the Treasury, and'';
            (2) by inserting before the flush sentence appearing after 
        clause (ii) of subparagraph (A) the following sentence: ``The 
        transfer of funds required under subparagraph (C)(iii) has 
        priority over reimbursements under this subparagraph to carry 
        out subclauses (II), (III), and (IV) of clause (i).'';
            (3) by striking out ``except for costs described in 
        subparagraph (A)(i) (I) and (II),'' in subparagraph (B)(i); and
            (4) by amending subparagraph (C)--
                    (A) by striking out ``to fully reimburse 
                inspectional overtime and preclearance costs'' in 
                clause (i) and inserting ``to reimburse costs described 
                in subparagraph (A)(i)''; and
                    (B) by inserting after clause (ii) of subparagraph 
                (C) the following:
            ``(iii) For each fiscal year, the Secretary of the Treasury 
        shall calculate the difference between--
                    ``(I) the estimated cost for overtime compensation 
                that would have been incurred during that fiscal year 
                for inspectional services if section 5 of the Act of 
                February 13, 1911 (19 U.S.C. 261 and 267), as in effect 
                before the enactment of section 13701 of the Omnibus 
                Budget Reconciliation Act of 1993, had governed such 
                costs, and
                    ``(II) the actual cost for overtime compensation, 
                premium pay, and agency retirement contributions that 
                is incurred during that fiscal year in regard to such 
                services under section 5 of the Act of February 13, 
                1991, as amended by section 13701 of the Omnibus Budget 
                Reconciliation Act of 1993, and under section 8331(3) 
                of title 5, United States Code, as amended by section 
                13704 of such Act of 1993,
        and shall transfer from the Customs User Fee Account to the 
        General Fund of the Treasury an amount equal to the difference 
        calculated under this clause, or $18,000,000, whichever amount 
        is less. Transfers shall be made under this clause at least 
        quarterly and on the basis of estimates to the same extent as 
        are reimbursements under subparagraph (B)(iii).''.

SEC. 13704. TREATMENT OF CERTAIN PAY OF CUSTOMS OFFICERS FOR RETIREMENT 
              PURPOSES.

    (a) In General.--Section 8331(3) of title 5, United States Code, is 
amended--
            (1) by striking out ``and'' at the end of subparagraph (C);
            (2) by striking out the semicolon at the end of 
        subparagraph (D) and inserting ``; and'';
            (3) by adding after subparagraph (D) the following:
                    ``(E) with respect to a customs officer (referred 
                to in subsection (e)(1) of section 5 of the Act of 
                February 13, 1911), compensation for overtime 
                inspectional services provided for under subsection (a) 
                of such section 5, but not to exceed 50 percent of any 
                statutory maximum in overtime pay for customs officers 
                which is in effect for the year involved;''; and
            (4) by striking out ``subparagraphs (B), (C), and (D) of 
        this paragraph,'' and inserting ``subparagraphs (B), (C), (D), 
        and (E) of this paragraph''.
    (b) Effective Date.--The amendments made by subsection (a) take 
effect on the date of the enactment of this Act and apply only with 
respect to service performed on or after such date.

SEC. 13705. REPORTS.

    (a) Customs User Fee Account Reports.--Subparagraph (D) of section 
13031(f)(3) of the Consolidated Omnibus Budget Reconciliation Act of 
1985 (19 U.S.C. 58c(f)(3)(D)) is amended to read as follows:
                    ``(D) At the close of each fiscal year, the 
                Secretary of the Treasury shall submit a report to the 
                Committee on Finance of the Senate and the Committee on 
                Ways and Means of the House of Representatives--
                            ``(i) containing a detailed accounting of 
                        all expenditures from the Customs User Fee 
                        Account during such year, including a summary 
                        of the expenditures, on a port-by-port basis, 
                        for which reimbursement has been provided under 
                        subparagraph (A)(ii);
                            ``(ii) containing a listing of all callback 
                        assignments of customs officers for which 
                        overtime compensation was paid under section 
                        5(a) of the Act of February 13, 1911, and that 
                        were less than 1 hour in duration; and
                            ``(iii) containing a listing of all customs 
                        officers who were paid $25,000 or more under 
                        subsections 5(a) and 5(b) of the Act of 
                        February 13, 1911, including a listing of the 
                        total compensation paid to each of those 
                        customs officers under all other statutory 
                        authority.''.
    (b) Other Reports.--
            (1) GAO report.--The Comptroller General of the United 
        States shall undertake--
                    (A) an evaluation of the appropriateness and 
                efficiency of the customs user fee laws for financing 
                the provision of customs inspectional services; and
                    (B) a study to determine whether cost savings in 
                the provision of overtime inspectional services could 
                be realized by the United States Customs Service 
                through the use of additional inspectors as opposed to 
                continuing the current practice of relying on overtime 
                pay.
        The Comptroller General shall submit a report on the evaluation 
        and study required under this subsection to the Committees by 
        no later than the 1st anniversary of the date of the enactment 
        of this Act.
            (2) Treasury recommendation.--On the day that the President 
        submits the budget for the United States Government for fiscal 
        year 1995 to the Congress under section 1105(a) of title 31, 
        United States Code, the Secretary of the Treasury shall submit 
        to the Committees recommended legislative proposals for 
        improving the operation of customs user fee laws in financing 
        the provision of customs inspectional services.
            (3) Definition of committees.--For purposes of this 
        subsection, the term ``Committees'' means the Committee on Ways 
        and Means of the House of Representatives and the Committee on 
        Finance of the Senate.

                 Subtitle E--Customs Officer Pay Reform

SEC. 13701. OVERTIME AND PREMIUM PAY FOR CUSTOMS OFFICERS.

    (a) In General.--Section 5 of the Act of February 13, 1911 (19 
U.S.C. 261 and 267) is amended to read as follows:

``SEC. 5. OVERTIME AND PREMIUM PAY FOR CUSTOMS OFFICERS.

    ``(a) Overtime Pay.--
            ``(1) In general.--Subject to paragraph (2) and subsection 
        (c), a customs officer who is officially assigned to perform 
        work in excess of 40 hours in the administrative workweek of 
        the officer or in excess of 8 hours in a day shall be 
        compensated for that work at an hourly rate of pay that is 
        equal to 2 times the hourly rate of the basic pay of the 
        officer. For purposes of this paragraph, the hourly rate of 
        basic pay for a customs officer does not include any premium 
        pay provided for under subsection (b).
            ``(2) Special provisions relating to overtime work on 
        callback basis.--
                    ``(A) Minimum duration.--Any work for which 
                compensation is authorized under paragraph (1) and for 
                which the customs officer is required to return to the 
                officer's place of work shall be treated as being not 
                less than 2 hours in duration; but only if such work 
                begins at least 1 hour after the end of any previous 
                regularly scheduled work assignment and ends at least 1 
                hour before the beginning of the following regularly 
                scheduled work assignment.
                    ``(B) Compensation for commuting time.--
                            ``(i) In general.--Except as provided in 
                        clause (ii), in addition to the compensation 
                        authorized under paragraph (1) for work to 
                        which subparagraph (A) applies, the customs 
                        officer is entitled to be paid, as compensation 
                        for commuting time, an amount equal to 3 times 
                        the hourly rate of basic pay of the officer.
                            ``(ii) Exception.--Compensation for 
                        commuting time is not payable under clause (i) 
                        if the work for which compensation is 
                        authorized under paragraph (1)--
                                    ``(I) does not commence within 16 
                                hours of the customs officer's last 
                                regularly scheduled work assignment, or
                                    ``(II) commences within 2 hours of 
                                the next regularly scheduled work 
                                assignment of the customs officer.
    ``(b) Premium Pay for Customs Officers.--
            ``(1) Night work differential.--
                    ``(A) 3 p.m. to midnight shiftwork.--If the 
                majority of the hours of regularly scheduled work of a 
                customs officer occur during the period beginning at 3 
                p.m. and ending at 12 a.m., the officer is entitled to 
                pay for work during such period (except for work to 
                which paragraph (2) or (3) applies) at the officer's 
                hourly rate of basic pay plus premium pay amounting to 
                15 percent of that basic rate.
                    ``(B) 11 p.m. to 8 a.m. shiftwork.--If the majority 
                of the hours of regularly scheduled work of a customs 
                officer occur during the period beginning at 11 p.m. 
                and ending at 8 a.m., the officer is entitled to pay 
                for work during such period (except for work to which 
                paragraph (2) or (3) applies) at the officer's hourly 
                rate of basic pay plus premium pay amounting to 20 
                percent of that basic rate.
                    ``(C) 7:30 p.m. to 3:30 a.m. shiftwork.--If the 
                regularly scheduled work assignment of a customs 
                officer is 7:30 p.m. to 3:30 a.m., the officer is 
                entitled to pay for work during such period (except for 
                work to which paragraph (2) or (3) applies) at the 
                officer's hourly rate of basic pay plus premium pay 
                amounting to 15 percent of that basic rate for the 
                period from 7:30 p.m. to 11:30 p.m. and at the 
                officer's hourly rate of basic pay plus premium pay 
                amounting to 20 percent of that basic rate for the 
                period from 11:30 p.m. to 3:30 a.m.
            ``(2) Sunday differential.--A customs officer who performs 
        any regularly scheduled work on a Sunday that is not a holiday 
        is entitled to pay for that work at the officer's hourly rate 
        of basic pay plus premium pay amounting to 50 percent of that 
        basic rate.
            ``(3) Holiday differential.--A customs officer who performs 
        any regularly scheduled work on a holiday is entitled to pay 
        for that work at the officer's hourly rate of basic pay plus 
        premium pay amounting to 100 percent of that basic rate.
            ``(4) Treatment of premium pay.--Premium pay provided for 
        under this subsection may not be treated as being overtime pay 
        or compensation for any purpose.
    ``(c) Limitations.--
            ``(1) Fiscal year cap.--The aggregate of overtime pay under 
        subsection (a) (including commuting compensation under 
        subsection (a)(2)(B)) and premium pay under subsection (b) that 
        a customs officer may be paid in any fiscal year may not exceed 
        $25,000; except that the Commissioner of Customs or his 
        designee may waive this limitation in individual cases in order 
        to prevent excessive costs or to meet emergency requirements of 
        the Customs Service.
            ``(2) Exclusivity of pay under this section.--A customs 
        officer who receives overtime pay under subsection (a) or 
        premium pay under subsection (b) for time worked may not 
        receive pay or other compensation for that work under any other 
        provision of law.
    ``(d) Regulations.--The Secretary of the Treasury shall prescribe 
such regulations as are necessary or appropriate to carry out this 
section, including regulations--
            ``(1) to ensure that callback work assignments are 
        commensurate with the overtime pay authorized for such work; 
        and
            ``(2) to prevent the disproportionate assignment of 
        overtime work to customs officers who are near to retirement.
    ``(e) Definitions.--As used in this section:
            ``(1) The term `customs officer' means an individual 
        performing those functions specified by regulation by the 
        Secretary of the Treasury for a customs inspector or canine 
        enforcement officer. Such functions shall be consistent with 
        such applicable standards as may be promulgated by the Office 
        of Personnel Management.
            ``(2) The term `holiday' means any day designated as a 
        holiday under a Federal statute or Executive order.''.
    (b) Conforming Amendments.--
            (1) Section 2 of the Act of June 3, 1944 (19 U.S.C. 1451a), 
        is repealed.
            (2) Section 450 of the Tariff Act of 1930 (19 U.S.C. 1450) 
        is amended--
                    (A) by striking out ``at night'' in the section 
                heading and inserting ``during overtime hours'';
                    (B) by striking out ``at night'' and inserting 
                ``during overtime hours''; and
                    (C) by inserting ``aircraft,'' immediately before 
                ``vessel''.
    (c) Effective Date.--The amendments made by subsections (a) and (b) 
apply to customs inspectional services provided on or after October 1, 
1993.

SEC. 13702. FOREIGN LANGUAGE PROFICIENCY AWARDS FOR CUSTOMS OFFICERS.

    Cash awards for foreign language proficiency may, under regulations 
prescribed by the Secretary of the Treasury, be paid to customs 
officers (as referred to in section 5(e)(1) of the Act of February 13, 
1911) to the same extent and in the same manner as would be allowable 
under subchapter III of chapter 45 of title 5, United States Code, with 
respect to law enforcement officers (as defined by section 4521 of such 
title).

SEC. 13703. APPROPRIATIONS REIMBURSEMENTS FROM THE CUSTOMS USER FEE 
              ACCOUNT.

    Section 13031(f)(3) of the Consolidated Omnibus Budget 
Reconciliation Act of 1985 (19 U.S.C. 58c(f)(3)) is amended--
            (1) by amending clause (i) of subparagraph (A) to read as 
        follows: ``(i) in--
                    ``(I) paying overtime compensation under section 
                5(a) of the Act of February 13, 1911,
                    ``(II) paying premium pay under section 5(b) of the 
                Act of February 13, 1911, but the amount for which 
                reimbursement may be made under this subclause may not, 
                for any fiscal year, exceed the difference between the 
                cost of the premium pay for that year calculated under 
                such section 5(b) as amended by section 13701 of the 
                Omnibus Budget Reconciliation Act of 1993 and the cost 
                of such pay calculated under subchapter V of chapter 55 
                of title 5, United States Code,
                    ``(III) paying agency contributions to the Civil 
                Service Retirement and Disability Fund to match 
                deductions from the overtime compensation paid under 
                subclause (I), and
                    ``(IV) providing all preclearance services for 
                which the recipients of such services are not required 
                to reimburse the Secretary of the Treasury, and'';
            (2) by inserting before the flush sentence appearing after 
        clause (ii) of subparagraph (A) the following sentence: ``The 
        transfer of funds required under subparagraph (C)(iii) has 
        priority over reimbursements under this subparagraph to carry 
        out subclauses (II), (III), and (IV) of clause (i).'';
            (3) by striking out ``except for costs described in 
        subparagraph (A)(i) (I) and (II),'' in subparagraph (B)(i); and
            (4) by amending subparagraph (C)--
                    (A) by striking out ``to fully reimburse 
                inspectional overtime and preclearance costs'' in 
                clause (i) and inserting ``to reimburse costs described 
                in subparagraph (A)(i)''; and
                    (B) by inserting after clause (ii) of subparagraph 
                (C) the following:
            ``(iii) For each fiscal year, the Secretary of the Treasury 
        shall calculate the difference between--
                    ``(I) the estimated cost for overtime compensation 
                that would have been incurred during that fiscal year 
                for inspectional services if section 5 of the Act of 
                February 13, 1911 (19 U.S.C. 261 and 267), as in effect 
                before the enactment of section 13701 of the Omnibus 
                Budget Reconciliation Act of 1993, had governed such 
                costs, and
                    ``(II) the actual cost for overtime compensation, 
                premium pay, and agency retirement contributions that 
                is incurred during that fiscal year in regard to such 
                services under section 5 of the Act of February 13, 
                1991, as amended by section 13701 of the Omnibus Budget 
                Reconciliation Act of 1993, and under section 8331(3) 
                of title 5, United States Code, as amended by section 
                13704 of such Act of 1993,
        and shall transfer from the Customs User Fee Account to the 
        General Fund of the Treasury an amount equal to the difference 
        calculated under this clause, or $18,000,000, whichever amount 
        is less. Transfers shall be made under this clause at least 
        quarterly and on the basis of estimates to the same extent as 
        are reimbursements under subparagraph (B)(iii).''.

SEC. 13704. TREATMENT OF CERTAIN PAY OF CUSTOMS OFFICERS FOR RETIREMENT 
              PURPOSES.

    (a) In General.--Section 8331(3) of title 5, United States Code, is 
amended--
            (1) by striking out ``and'' at the end of subparagraph (C);
            (2) by striking out the semicolon at the end of 
        subparagraph (D) and inserting ``; and'';
            (3) by adding after subparagraph (D) the following:
                    ``(E) with respect to a customs officer (referred 
                to in subsection (e)(1) of section 5 of the Act of 
                February 13, 1911), compensation for overtime 
                inspectional services provided for under subsection (a) 
                of such section 5, but not to exceed 50 percent of any 
                statutory maximum in overtime pay for customs officers 
                which is in effect for the year involved;''; and
            (4) by striking out ``subparagraphs (B), (C), and (D) of 
        this paragraph,'' and inserting ``subparagraphs (B), (C), (D), 
        and (E) of this paragraph''.
    (b) Effective Date.--The amendments made by subsection (a) take 
effect on the date of the enactment of this Act and apply only with 
respect to service performed on or after such date.

SEC. 13705. REPORTS.

    (a) Customs User Fee Account Reports.--Subparagraph (D) of section 
13031(f)(3) of the Consolidated Omnibus Budget Reconciliation Act of 
1985 (19 U.S.C. 58c(f)(3)(D)) is amended to read as follows:
                    ``(D) At the close of each fiscal year, the 
                Secretary of the Treasury shall submit a report to the 
                Committee on Finance of the Senate and the Committee on 
                Ways and Means of the House of Representatives--
                            ``(i) containing a detailed accounting of 
                        all expenditures from the Customs User Fee 
                        Account during such year, including a summary 
                        of the expenditures, on a port-by-port basis, 
                        for which reimbursement has been provided under 
                        subparagraph (A)(ii);
                            ``(ii) containing a listing of all callback 
                        assignments of customs officers for which 
                        overtime compensation was paid under section 
                        5(a) of the Act of February 13, 1911, and that 
                        were less than 1 hour in duration; and
                            ``(iii) containing a listing of all customs 
                        officers who were paid $25,000 or more under 
                        subsections 5(a) and 5(b) of the Act of 
                        February 13, 1911, including a listing of the 
                        total compensation paid to each of those 
                        customs officers under all other statutory 
                        authority.''.
    (b) Other Reports.--
            (1) GAO report.--The Comptroller General of the United 
        States shall undertake--
                    (A) an evaluation of the appropriateness and 
                efficiency of the customs user fee laws for financing 
                the provision of customs inspectional services; and
                    (B) a study to determine whether cost savings in 
                the provision of overtime inspectional services could 
                be realized by the United States Customs Service 
                through the use of additional inspectors as opposed to 
                continuing the current practice of relying on overtime 
                pay.
        The Comptroller General shall submit a report on the evaluation 
        and study required under this subsection to the Committees by 
        no later than the 1st anniversary of the date of the enactment 
        of this Act.
            (2) Treasury recommendation.--On the day that the President 
        submits the budget for the United States Government for fiscal 
        year 1995 to the Congress under section 1105(a) of title 31, 
        United States Code, the Secretary of the Treasury shall submit 
        to the Committees recommended legislative proposals for 
        improving the operation of customs user fee laws in financing 
        the provision of customs inspectional services.
            (3) Definition of committees.--For purposes of this 
        subsection, the term ``Committees'' means the Committee on Ways 
        and Means of the House of Representatives and the Committee on 
        Finance of the Senate.

                 Subtitle B--Human Resources Amendments

SEC. 13201. TABLE OF CONTENTS.

    The table of contents of this subtitle is as follows:

                 Subtitle B--Human Resources Amendments

Sec. 13201. Table of contents.
Sec. 13202. References.
Chapter 1--Child Welfare Services, Foster Care, and Adoption Assistance

Sec. 13211. Entitlement funding for services designed to strengthen and 
                            preserve families.
Sec. 13212. Grants for State courts to assess and improve handling of 
                            proceedings relating to foster care and 
                            adoption.
Sec. 13213. Required protections for foster children.
Sec. 13214. States required to report on measures taken to comply with 
                            the Indian Child Welfare Act.
Sec. 13215. Child welfare traineeships.
Sec. 13216. Dissolved adoptions.
Sec. 13217. Time frame for judicial determinations on voluntary 
                            placements.
Sec. 13218. Study of reasonable efforts.
Sec. 13219. Enhanced match for automated data systems.
Sec. 13220. Periodic reevaluation of foster care maintenance payments.
Sec. 13221. Dispositional hearing.
Sec. 13222. Health care plans for foster children.
Sec. 13223. Independent living.
Sec. 13224. Elimination of foster care ceilings and of authority to 
                            transfer unused foster care funds to child 
                            welfare services programs.
Sec. 13225. Training of agency staff and foster and adoptive parents.
Sec. 13226. On-site reviews and audits of State claims for foster care 
                            and adoption assistance.
Sec. 13227. Conformity reviews.
Sec. 13228. Repeal of annual report on voluntary placement.
Sec. 13229. Demonstration projects.
Sec. 13230. Placement accountability.
Sec. 13231. Payments of State claims for foster care and adoption 
                            assistance.
Sec. 13232. Moratorium on collection of disallowances.
Sec. 13233. Border region child welfare worker training demonstration.
Sec. 13234. Effect of failure to carry out State plan.
                  Chapter 2--Child Support Enforcement

Sec. 13241. State paternity establishment programs.
Sec. 13242. Enforcement of health insurance support.
Sec. 13243. Reports to credit bureaus on persons delinquent in child 
                            support payments.
                Chapter 3--Supplemental Security Income

Sec. 13251. Fees for Federal administration of State supplementary 
                            payments.
Sec. 13252. Exclusion from income of State relocation assistance.
Sec. 13253. Prevention of adverse effects on eligibility for, and 
                            amount of, benefits when spouse or parent 
                            of beneficiary is absent from the household 
                            due to active military service.
Sec. 13254. Eligibility for children of Armed Forces personnel residing 
                            outside the United States other than in 
                            foreign countries.
Sec. 13255. Definition of disability for children under age 18 applied 
                            to all individuals under age 18.
Sec. 13256. Valuation of certain in-kind support and maintenance when 
                            there is a cost of living adjustment in 
                            benefits.
Sec. 13257. Exclusion from income of certain amounts received by 
                            Indians from interests held in trust.
           Chapter 4--Aid To Families With Dependent Children

Sec. 13261. 50 percent Federal match of State administrative costs.
Sec. 13262. Delay in effective date of penalty for failure to meet 
                            required participation rate for unemployed 
                            parents in the JOBS program.
Sec. 13263. Report to the Congress with respect to performance 
                            standards in the JOBS program.
Sec. 13264. Measurement and reporting of welfare participation.
Sec. 13265. New Hope demonstration project.
Sec. 13266. Delay in requirement that outlying areas operate an AFDC-UP 
                            program.
Sec. 13267. Adult in family or household allowed to attest to 
                            citizenship status of family or household 
                            members.
Sec. 13268. Increase in stepparent income disregard.
Sec. 13269. Extension of New York State child support demonstration 
                            program.
Sec. 13270. Early childhood development projects.
                   Chapter 5--Unemployment Insurance

Sec. 13271. Treatment of short-time compensation programs.
Sec. 13272. Technical amendment to Unemployment Trust Fund.
Sec. 13273. Extension of reporting date for advisory council.
Sec. 13274. Clarification of emergency unemployment benefits 
                            provisions.
Sec. 13275. Modifications to extended unemployment program.
Sec. 13276. Extension of current Federal unemployment rate.
Sec. 13277. Disclosure of information to Railroad Retirement Board.
                    Chapter 6--Technical Provisions

Sec. 13281. Corrections related to the income security and human 
                            resources provisions of the Omnibus Budget 
                            Reconciliation Act of 1990.
Sec. 13282. Technical corrections related to the human resource and 
                            income security provisions of the Omnibus 
                            Budget Reconciliation Act of 1989.
Sec. 13283. Elimination of obsolete provisions relating to treatment of 
                            the earned income tax credit.
Sec. 13284. Redesignation of certain provisions.

SEC. 13202. REFERENCES.

    Except as otherwise expressly provided, wherever in this subtitle 
an amendment or repeal is expressed in terms of an amendment to, or 
repeal of, a section or other provision, the reference shall be 
considered to be made to a section or other provision of the Social 
Security Act.

CHAPTER 1--CHILD WELFARE SERVICES, FOSTER CARE, AND ADOPTION ASSISTANCE

SEC. 13211. ENTITLEMENT FUNDING FOR SERVICES DESIGNED TO STRENGTHEN AND 
              PRESERVE FAMILIES.

    (a) In General.--Part B of title IV (42 U.S.C. 620-628) is 
amended--
            (1) by striking the heading and inserting the following:

                  ``PART B--CHILD AND FAMILY SERVICES

               ``Subpart 1--Child Welfare Services''; and

            (2) by adding at the end the following:

         ``Subpart 2--Family Preservation and Support Services

``SEC. 430. PURPOSES; LIMITATIONS ON AUTHORIZATIONS OF APPROPRIATIONS; 
              RESERVATION OF CERTAIN AMOUNTS.

    ``(a) Purposes; Limitations on Authorization of Appropriations.--
For the purpose of encouraging and enabling each State to develop and 
establish, or expand, and to operate a program of family preservation 
services and community-based family support services, there are 
authorized to be appropriated to the Secretary--
            ``(1) $60,000,000 for fiscal year 1994;
            ``(2) $135,000,000 for fiscal year 1995;
            ``(3) $240,000,000 for fiscal year 1996;
            ``(4) $360,000,000 for fiscal year 1997; and
            ``(5) $600,000,000 for fiscal year 1998.
    ``(b) Reservation of Certain Amounts.--
            ``(1) Evaluation, research, training, and technical 
        assistance.--The Secretary shall reserve 1 percent of the 
        amount appropriated pursuant to subsection (a) for each fiscal 
        year, for expenditure by the Secretary for evaluation, 
        research, training, and technical assistance related to the 
        program under this subpart.
            ``(2) State court assessments.--The Secretary shall reserve 
        $5,000,000 of the amount appropriated pursuant to subsection 
        (a) for fiscal year 1995, and $10,000,000 of the amount so 
        appropriated for each of fiscal years 1996, 1997, and 1998, for 
        grants under section 13212 of the Omnibus Budget Reconciliation 
        Act of 1993.
            ``(3) Indian tribes.--The Secretary shall reserve 1 percent 
        of the amount appropriated pursuant to subsection (a) for each 
        fiscal year, for allotment to Indian tribes in accordance with 
        section 433(a).

``SEC. 431. DEFINITIONS.

    ``(a) In General.--As used in this subpart:
            ``(1) Family preservation services.--The term `family 
        preservation services' means services for children and families 
        designed to help families (including adoptive and extended 
        families) at risk or in crisis, including--
                    ``(A) service programs designed to help children--
                            ``(i) where appropriate, return to families 
                        from which they have been removed; or
                            ``(ii) be placed for adoption, with a legal 
                        guardian, or, if adoption or legal guardianship 
                        is determined not to be appropriate for a 
                        child, in some other planned, permanent living 
                        arrangement;
                    ``(B) preplacement preventive services programs, 
                such as intensive family preservation programs, 
                designed to help children at risk of foster care 
                placement remain with their families;
                    ``(C) service programs designed to provide followup 
                care to families to whom a child has been returned 
                after a foster care placement;
                    ``(D) respite care of children to provide temporary 
                relief for parents and other caregivers (including 
                foster parents); and
                    ``(E) services designed to improve parenting skills 
                (by reinforcing parents' confidence in their strengths, 
                and helping them to identify where improvement is 
                needed and to obtain assistance in improving those 
                skills) with respect to matters such as child 
                development, family budgeting, coping with stress, 
                health, and nutrition.
            ``(2) Family support services.--The term `family support 
        services' means community-based services to promote the well-
        being of children and families designed to increase the 
        strength and stability of families (including adoptive, foster, 
        and extended families), to increase parents' confidence and 
        competence in their parenting abilities, to afford children a 
        stable and supportive family environment, and otherwise to 
        enhance child development, including--
                    ``(A) services described in paragraph (1)(E);
                    ``(B) respite care of children to provide temporary 
                relief for parents and other caregivers;
                    ``(C) structured activities involving parents and 
                children to strengthen the parent-child relationship;
                    ``(D) drop-in centers to afford families 
                opportunities for informal interaction with other 
                families and with program staff;
                    ``(E) information and referral services to afford 
                families access to other community services, including 
                child care, health care, nutrition programs, adult 
                education and literacy programs, and counseling and 
                mentoring services; and
                    ``(F) early developmental screening of children to 
                assess the needs of such children, and assistance to 
                families in securing specific services to meet these 
                needs.
            ``(3) State agency.--The term `State agency' means the 
        State agency responsible for administering the program under 
        subpart 1.
            ``(4) State.--The term `State' includes an Indian tribe or 
        tribal organization, in addition to the meaning given such term 
        for purposes of subpart 1.
            ``(5) Tribal organization.--The term `tribal organization' 
        means the recognized governing body of any Indian tribe.
            ``(6) Indian tribe.--The term `Indian tribe' means any 
        Indian tribe (as defined in section 482(i)(5)) and any Alaska 
        Native organization (as defined in section 482(i)(7)(A)).
    ``(b) Other Terms.--For other definitions of other terms used in 
this subpart, see section 475.

``SEC. 432. STATE PLANS.

    ``(a) Plan Requirements.--A State plan meets the requirements of 
this subsection if the plan--
            ``(1) provides that the State agency shall administer, or 
        supervise the administration of, the State program under this 
        subpart;
            ``(2)(A)(i) sets forth the goals intended to be 
        accomplished under the plan by the end of the 5th fiscal year 
        in which the plan is in operation in the State, and (ii) is 
        updated periodically to set forth the goals intended to be 
        accomplished under the plan by the end of each 5th fiscal year 
        thereafter;
            ``(B) describes the methods to be used in measuring 
        progress toward accomplishment of the goals;
            ``(C) contains a commitment that the State--
                    ``(i) after the end of each of the 1st 4 fiscal 
                years covered by a set of goals, will perform an 
                interim review of progress toward accomplishment of the 
                goals, and on the basis of the interim review will 
                revise the statement of goals in the plan, if 
                necessary, to reflect changed circumstances; and
                    ``(ii) after the end of the last fiscal year 
                covered by a set of goals, will perform a final review 
                of progress toward accomplishment of the goals, and on 
                the basis of the final review (I) will prepare, 
                transmit to the Secretary, and make available to the 
                public a final report on progress toward accomplishment 
                of the goals, and (II) will develop (in consultation 
                with the entities required to be consulted pursuant to 
                subsection (b)) and add to the plan a statement of the 
                goals intended to be accomplished by the end of the 5th 
                succeeding fiscal year;
            ``(3) provides for coordination, to the extent feasible and 
        appropriate, of the provision of services under the plan and 
        the provision of services or benefits under other Federal or 
        federally assisted programs serving the same populations;
            ``(4) contains assurances that not less than 90 percent of 
        expenditures under the plan for any fiscal year with respect to 
        which the State is eligible for payment under section 433 for 
        the fiscal year shall be for services for children and 
        families, and that significant portions of such 90 percent 
        shall be expended--
                    ``(A) for family preservation services; and
                    ``(B) for community-based family support services;
            ``(5) provides that, by the beginning of the 6th fiscal 
        year during which the plan is in effect, programs under the 
        plan shall be available on a statewide basis, to the extent 
        feasible and appropriate;
            ``(6) contains assurances that the State will--
                    ``(A) annually prepare, furnish to the Secretary, 
                and make available to the public a description 
                (including separate descriptions with respect to family 
                preservation services and community-based family 
                support services) of--
                            ``(i) the service programs to be made 
                        available under the plan in the immediately 
                        succeeding fiscal year;
                            ``(ii) the populations which the programs 
                        will serve; and
                            ``(iii) the geographic areas in the State 
                        in which the services will be available; and
                    ``(B) perform the activities described in 
                subparagraph (A)--
                            ``(i) in the case of the 1st fiscal year 
                        under the plan, at the time the State submits 
                        its initial plan; and
                            ``(ii) in the case of each succeeding 
                        fiscal year, by the end of the 3rd quarter of 
                        the immediately preceding fiscal year;
            ``(7) provides for such methods of administration as the 
        Secretary finds to be necessary for the proper and efficient 
        operation of the plan;
            ``(8)(A) contains assurances that Federal funds provided to 
        the State under this subpart will not be used to supplant 
        Federal or non-Federal funds for existing services and 
        activities which promote the purposes of this subpart; and
            ``(B) provides that the State will furnish reports to the 
        Secretary, at such times, in such format, and containing such 
        information as the Secretary may require, that demonstrate the 
        State's compliance with the prohibition contained in 
        subparagraph (A); and
            ``(9) provides that the State agency will furnish such 
        reports, containing such information, and participate in such 
        evaluations, as the Secretary may require.
    ``(b) Approval of Plans.--
            ``(1) In general.--The Secretary shall approve a plan that 
        meets the requirements of subsection (a) only if the plan was 
        developed jointly by the Secretary and the State, after 
        consultation by the State agency with appropriate public and 
        nonprofit private agencies and community-based organizations 
        with experience in administering programs of services for 
        children and families (including family preservation and family 
        support services).
            ``(2) Plans of indian tribes exempted from inappropriate 
        requirements.--The Secretary may exempt a plan submitted by an 
        Indian tribe from any requirement of this section that the 
        Secretary determines would be inappropriate to apply to the 
        Indian tribe, taking into account the resources, needs, and 
        other circumstances of the Indian tribe.

``SEC. 433. ALLOTMENTS TO STATES.

    ``(a) Indian Tribes.--
            ``(1) In general.--From the amount reserved pursuant to 
        section 430(b)(3), the Secretary shall allot to each Indian 
        tribe with a plan approved under this subpart (except as 
        provided in paragraph (2) of this subsection) an amount that 
        bears the same ratio to such reserved amount as the number of 
        children in the Indian tribe bears to the total number of 
        children in all Indian tribes with State plans so approved, as 
        determined by the Secretary on the basis of the most current 
        and reliable information available to the Secretary.
            ``(2) Special rule.--The Secretary may not allot funds to 
        an Indian tribe with a plan approved under this subpart whose 
        allotment (but for this paragraph) would be less than $10,000 
        if allotments were made under paragraph (1) to all Indian 
        tribes with plans approved under this subpart with the same or 
        larger numbers of children.
    ``(b) Territories.--From the amount appropriated pursuant to 
section 430 that remains after applying section 430(b) for each fiscal 
year, the Secretary shall allot to each of the jurisdictions of Puerto 
Rico, Guam, the Virgin Islands, the Northern Mariana Islands, and 
American Samoa an amount determined in the same manner as the allotment 
to each of such jurisdictions is determined under section 421.
    ``(c) Other States.--
            ``(1) In general.--From the amount appropriated pursuant to 
        section 430 that remains after applying section 430(b) and 
        subsection (b) of this section for each fiscal year, the 
        Secretary shall allot to each State (other than an Indian 
        tribe) which is not specified in subsection (b) of this section 
        an amount equal to such remaining amount multiplied by the food 
        stamp percentage of the State for the fiscal year.
            ``(2) Food stamp percentage defined.--
                    ``(A) In general.--As used in paragraph (1) of this 
                subsection, the term `food stamp percentage' means, 
                with respect to a State and a fiscal year, the average 
                monthly number of children receiving food stamp 
                benefits in the State for months in the 3 fiscal years 
                referred to in subparagraph (B) of this paragraph, as 
                determined from sample surveys made under section 16(c) 
                of the Food Stamp Act of 1977, expressed as a 
                percentage of the average monthly number of children 
                receiving food stamp benefits in the States described 
                in such paragraph (1) for months in such 3 fiscal 
                years, as so determined.
                    ``(B) Fiscal years used in calculation.--For 
                purposes of the calculation pursuant to subparagraph 
                (A), the Secretary shall use data for the 3 most recent 
                fiscal years, preceding the fiscal year for which the 
                State's allotment is calculated under this subsection, 
                for which such data are available to the Secretary.

``SEC. 434. PAYMENTS TO STATES.

    ``(a) Entitlement.--
            ``(1) General rule.--Except as provided in paragraph (2) of 
        this subsection, each State which has a plan approved under 
        this subpart shall be entitled to payment of the lesser of--
                    ``(A) 75 percent of the total cost of activities 
                under the plan during the fiscal year or the 
                immediately succeeding fiscal year; or
                    ``(B) the allotment of the State under section 433 
                for the fiscal year.
            ``(2) Special rule.--Upon submission by a State to the 
        Secretary during fiscal year 1994 of an application in such 
        form and containing such information as the Secretary may 
        require (including, if the State is seeking payment of an 
        amount pursuant to subparagraph (B) of this paragraph, a 
        description of the services to be provided with the amount), 
        the State shall be entitled to payment of an amount equal to 
        the sum of--
                    ``(A) such amount not exceeding $1,000,000 as the 
                State may require to develop and submit a plan for 
                approval under section 432; and
                    ``(B) an amount equal to the lesser of--
                            ``(i) 75 percent of the cost of State 
                        services to children and families provided in 
                        accordance with section 432(a)(4); or
                            ``(ii) the allotment of the State under 
                        section 433 for fiscal year 1994, reduced by 
                        any amount paid to the State pursuant to 
                        subparagraph (A) of this paragraph.
    ``(b) Prohibitions.--
            ``(1) No use of other federal funds for state match.--Each 
        State receiving an amount paid under paragraph (1) or (2)(B) of 
        subsection (a) may not expend any Federal funds to meet the 
        costs of services described in this subpart not covered by the 
        amount so paid.
            ``(2) Availability of funds.--
                    ``(A) In general.--A State may not expend any 
                amount paid under subsection (a)(1) for any fiscal year 
                after the end of the immediately succeeding fiscal 
                year.
                    ``(B) Plan development.--A State may not expend any 
                amount paid under subsection (a)(2) after the end of 
                fiscal year 1994.
    ``(c) Direct Payments to Tribal Organizations of Indian Tribes.--
The Secretary shall pay any amount to which an Indian tribe is entitled 
under this section directly to the tribal organization of the Indian 
tribe.

``SEC. 435. EVALUATIONS; REPORT.

    ``(a) Evaluations.--
            ``(1) In general.--The Secretary shall evaluate the 
        effectiveness of the programs carried out pursuant to this 
        subpart in accomplishing the purposes of this subpart, in 
        accordance with criteria established in accordance with 
        paragraph (2).
            ``(2) Criteria to be used.--In developing the criteria to 
        be used in evaluations under paragraph (1), the Secretary shall 
        consult with appropriate parties, such as--
                    ``(A) State agencies administering programs under 
                this part and part E;
                    ``(B) persons administering child and family 
                services programs (including family preservation and 
                family support programs) for private, nonprofit 
                organizations with an interest in child welfare; and
                    ``(C) other persons with recognized expertise in 
                the evaluation of child and family services programs 
                (including family preservation and family support 
                programs) or other related programs.
    ``(b) Report to the Congress.--Not later than December 31, 1997, 
the Secretary shall submit to the Congress a report containing findings 
with respect to the evaluations required by subsection (a).
    ``(c) Coordination of Evaluations.--The Secretary shall develop 
procedures to coordinate evaluations under this section, to the extent 
feasible, with evaluations by the States of the effectiveness of 
programs under this subpart.''.
    (b) Conforming Amendments.--
            (1) Section 422 (42 U.S.C. 622) is amended--
                    (A) in subsection (a), by striking ``this part'' 
                and inserting ``this subpart'';
                    (B) in subsection (b), by striking ``this part'' 
                each place such term appears and inserting ``this 
                subpart''; and
                    (C) in subsection (b)(2), by inserting ``under the 
                State plan approved under subpart 2 of this part,'' 
                after ``part A of this title,''.
            (2) Section 423(a) (42 U.S.C. 623(a)) is amended by 
        striking ``this part'' and inserting ``this subpart''.
            (3) Section 428(a) (42 U.S.C. 628(a)) is amended by 
        striking ``this part'' each place such term appears and 
        inserting ``this subpart''.
            (4) Section 471(a)(2) (42 U.S.C. 671(a)(2)) is amended by 
        inserting ``subpart 1 of'' before ``part B''.
    (c) Effective Date.--The amendments made by this section shall be 
effective with respect to calendar quarters beginning on or after 
October 1, 1993.

SEC. 13212. GRANTS FOR STATE COURTS TO ASSESS AND IMPROVE HANDLING OF 
              PROCEEDINGS RELATING TO FOSTER CARE AND ADOPTION.

    (a) In General.--The Secretary shall make grants, in accordance 
with this section, to the highest State courts in States participating 
in the program under part E of title IV of the Social Security Act, for 
the purpose of enabling such courts--
            (1) to conduct assessments, in accordance with subsection 
        (b), of the role, responsibilities, and effectiveness of State 
        courts in carrying out State laws requiring proceedings 
        (conducted by or under the supervision of the courts)--
                    (A) to determine the advisability or 
                appropriateness of foster care placement;
                    (B) to determine whether to terminate parental 
                rights; and
                    (C) to legally recognize the adoption of a child; 
                and
            (2) to implement changes deemed necessary as a result of 
        the assessments.
    (b) Assessments.--Each assessment conducted with funds provided 
under this section shall--
            (1) identify the requirements imposed on State courts with 
        respect to proceedings described in subsection (a), addressing 
        separately--
                    (A) rules, standards, and criteria imposed pursuant 
                to State laws (including laws implementing parts B and 
                E of title IV of the Social Security Act, laws relating 
                to child abuse and neglect, or any other laws on 
                related matters) to be applied in determinations with 
                respect to placement of a child, or with respect to 
                related matters concerning the parent-child 
                relationship and the welfare of the child, including 
                determinations--
                            (i) whether to remove a child from or 
                        return a child to the home of the child;
                            (ii) whether to place a child in foster 
                        care or to continue a foster care placement;
                            (iii) whether to terminate parental rights;
                            (iv) whether to place a child for adoption 
                        or in another permanent arrangement; and
                            (v) whether to set aside or to finalize an 
                        adoption; and
                    (B) rules and procedures, established by or under 
                State law or adopted by the State court system on its 
                own initiative, with respect to the conduct of such 
                proceedings, that address matters such as--
                            (i) whether a proceeding should be judicial 
                        or administrative;
                            (ii) timetables for such proceedings, and 
                        determinations of the priority of such 
                        proceedings relative to other matters under the 
                        jurisdiction of the State courts;
                            (iii) procedural safeguards of the rights 
                        of parents (including foster and adoptive 
                        parents), guardians, and children, such as 
                        provisions for legal representation and for 
                        guardians ad litem; and
                            (iv) rules for conduct of the proceeding 
                        with respect to matters such as admissible 
                        evidence, opportunity to present witnesses, and 
                        time limits on the presentation of evidence and 
                        the making of arguments;
            (2) evaluate the performance of the State courts in 
        implementing the requirements identified under paragraph (1), 
        by assessing--
                    (A) the extent to which particular practices or 
                procedures have been successful in facilitating 
                compliance with such requirements;
                    (B) the frequency of failures to comply with any 
                such requirements, and patterns with respect to the 
                circumstances of and factors contributing to the 
                failures; and
                    (C) the extent to which caseload size and resource 
                limitations contribute to the failures identified 
                pursuant to subparagraph (B);
            (3) determine the extent to which the rules and practices 
        identified under paragraph (1) or (2) are in accord with 
        recommended standards of national organizations concerned with 
        permanent placement for foster children;
            (4) determine, from the standpoint of the State courts, the 
        extent to which particular requirements under paragraph (1)--
                    (A) are facilitating or impeding achievement of the 
                purposes of such parts B and E, including the goal of 
                appropriate permanent placement for each child; and
                    (B) are imposing significant administrative burdens 
                on the State court system; and
            (5) make specific recommendations for improvement, based on 
        the conclusions reached as a result of activities described in 
        paragraphs (1) through (4), including recommendations for--
                    (A) changes in Federal or State laws, regulations, 
                or policies;
                    (B) changes in procedures and practices of the 
                State courts and of the State agencies administering 
                foster care, adoption, child welfare, and child 
                protective services programs;
                    (C) additional education or training of State court 
                judges, or of personnel of the judicial system or of 
                the State agencies described in subparagraph (B);
                    (D) collection or dissemination of additional data 
                or information for purposes of increasing the 
                understanding of personnel of State courts and State 
                agencies of matters relating to case review proceedings 
                in general, or to specific case review proceedings; and
                    (E) increases in manpower, reductions in the number 
                of case reviews, or other changes needed to enable the 
                State courts to better manage their caseloads with 
                respect to such proceedings.
    (c) Applications.--In order to be eligible for a grant under this 
section, a highest State court shall submit to the Secretary, at such 
time and in such form as the Secretary may require, an application 
containing--
            (1) a timetable for conducting and completing the 
        assessment;
            (2) a budget for the assessment;
            (3) a description of the methods to be used to select State 
        courts for inclusion in, and to conduct, the assessment;
            (4) certifications by the head of the State agency 
        administering the State program under such part E, and by the 
        State foster care citizen review board or State organization of 
        such review boards (if any), that such entities have had an 
        opportunity to review and comment on a draft of the application 
        before its submission, and a copy of such comments;
            (5) a description of the process to be used by the court to 
        consult with the entities referred to in paragraph (4) of this 
        subsection in conducting the assessment under subsection (b);
            (6) an assurance that, to the extent funds provided under 
        this section are not necessary to complete the assessment under 
        subsection (b), the court will use such funds to implement, to 
        the extent feasible, recommendations made pursuant to 
        subsection (b)(5);
            (7) an assurance that funds provided under this section 
        will not be used to supplant State or local funds which would 
        otherwise be used for similar purposes;
            (8) a commitment to furnish to the Secretary--
                    (A) an interim report following the end of the 2nd 
                year of assessment activities under this section; and
                    (B) a final report following the completion of the 
                assessment; and
            (9) any other information the Secretary may require.
    (d) Allotments.--
            (1) In general.--Each highest State court which has an 
        application approved under subsection (c), and is conducting 
        assessment activities in accordance with this section, shall be 
        entitled to payment, for each of fiscal years 1995 through 
        1998, from amounts reserved pursuant to section 430(b)(2) of 
        the Social Security Act, of an amount equal to the sum of--
                    (A) for fiscal year 1995, $75,000 plus the amount 
                described in paragraph (2) for fiscal year 1995; and
                    (B) for each of fiscal years 1996 through 1998, 
                $85,000 plus the amount described in paragraph (2) for 
                each of such fiscal years.
            (2) Formula.--The amount described in this paragraph for 
        any fiscal year is the amount that bears the same ratio to the 
        amount reserved pursuant to section 430(b)(2) of the Social 
        Security Act for the fiscal year (reduced by the dollar amount 
        specified in paragraph (1) of this subsection for the fiscal 
        year) as the number of individuals in the State who have not 
        attained 21 years of age bears to the total number of such 
        individuals in all States the highest State courts of which 
        have approved applications under subsection (c).
    (e) Use of Grant Funds.--Each highest State court which receives 
funds paid under this section may use such funds to pay--
            (1) any or all costs of activities under this section in 
        fiscal year 1995; and
            (2) not more than 75 percent of the cost of activities 
        under this section in each of fiscal years 1996, 1997, and 
        1998.

SEC. 13213. REQUIRED PROTECTIONS FOR FOSTER CHILDREN.

    (a) In General.--Section 422(b) (42 U.S.C. 622(b)) is amended--
            (1) by striking ``and'' at the end of paragraph (7);
            (2) by striking the period at the end of paragraph (8) and 
        inserting ``; and''; and
            (3) by adding at the end the following:
            ``(9) provide assurances that the State--
                    ``(A) since June 17, 1980, has completed an 
                inventory of all children who, before the inventory, 
                had been in foster care under the responsibility of the 
                State for 6 months or more, which determined--
                            ``(i) the appropriateness of, and necessity 
                        for, the foster care placement;
                            ``(ii) whether the child could or should be 
                        returned to the parents of the child or should 
                        be freed for adoption or other permanent 
                        placement; and
                            ``(iii) the services necessary to 
                        facilitate the return of the child or the 
                        placement of the child for adoption or legal 
                        guardianship;
                    ``(B) is operating, to the satisfaction of the 
                Secretary--
                            ``(i) a statewide information system from 
                        which can be readily determined the status, 
                        demographic characteristics, location, and 
                        goals for the placement of every child who is 
                        (or, within the immediately preceding 12 
                        months, has been) in foster care;
                            ``(ii) a case review system (as defined in 
                        section 475(5)) for each child receiving foster 
                        care under the supervision of the State;
                            ``(iii) a service program designed to help 
                        children--
                                    ``(I) where appropriate, return to 
                                families from which they have been 
                                removed; or
                                    ``(II) be placed for adoption, with 
                                a legal guardian, or, if adoption or 
                                legal guardianship is determined not to 
                                be appropriate for a child, in some 
                                other planned, permanent living 
                                arrangement; and
                            ``(iv) a preplacement preventive services 
                        program designed to help children at risk of 
                        foster care placement remain with their 
                        families; and
                    ``(C)(i) has reviewed (or within 12 months after 
                the date of the enactment of this paragraph will 
                review) State laws and administrative and judicial 
                procedures in effect for children abandoned at or 
                shortly after birth (including laws and procedures 
                providing for legal representation of such children); 
                and
                    ``(ii) has enacted and is implementing (or within 
                24 months after the date of the enactment of this 
                paragraph will enact and implement) such laws and 
                procedures as the State determines, on the basis of the 
                review described in clause (i), to be necessary to 
                enable permanent decisions to be made expeditiously 
                with respect to the placement of such children.''.
    (b) Restriction on Reallotment.--Section 424 (42 U.S.C. 624) is 
amended--
            (1) in the 1st sentence, by striking ``The amount'' and 
        inserting the following:
    ``(a) In General.--Subject to subsection (b), the amount''; and
            (2) by adding at the end the following:
    ``(b) Exception Relating to Foster Child Protections.--The 
Secretary shall not reallot under subsection (a) of this section any 
amount that is withheld or recovered from a State due to the failure of 
the State to comply with section 422(b)(9).''.
    (c) Repeal.--Section 427 (42 U.S.C. 627) is hereby repealed.
    (d) Conforming Amendments.--
            (1) Section 423(a) (42 U.S.C. 623(a)) is amended by 
        striking ``and in section 427''.
            (2) Section 425(a)(2) (42 U.S.C. 625(a)(2)) is amended by 
        striking ``the statistical report required by section'' and 
        inserting ``with section 422(b)(9) or''.
            (3) Section 472(d) (42 U.S.C. 672(d)) is amended by 
        striking ``427(b)'' and inserting ``422(b)(9)''.
    (e) Effective Date.--The amendments and repeal made by this section 
shall be effective for fiscal years beginning on or after October 1, 
1994.
    (f) Construction of Section.--This section and the amendments and 
repeal made by this section shall not be construed to permit any State 
to interrupt the provision of the foster care protections described in 
section 427 of the Social Security Act, as in effect on the effective 
date of such amendments and repeal.

SEC. 13214. STATES REQUIRED TO REPORT ON MEASURES TAKEN TO COMPLY WITH 
              THE INDIAN CHILD WELFARE ACT.

    (a) State Plan Requirement.--Section 422(b) (42 U.S.C. 622(b)), as 
amended by section 13213(a) of this Act, is amended--
            (1) by striking ``and'' at the end of paragraph (8);
            (2) by striking the period at the end of paragraph (9) and 
        inserting ``; and''; and
            (3) by adding at the end the following:
            ``(10) contain a description, developed after consultation 
        with tribal organizations (as defined in section 4 of the 
        Indian Self-Determination and Education Assistance Act) in the 
        State, of the specific measures taken by the State to comply 
        with the Indian Child Welfare Act.''.
    (b) Effective Date.--The amendments made by subsection (a) shall be 
effective with respect to calendar quarters beginning on or after 
October 1, 1994.

SEC. 13215. CHILD WELFARE TRAINEESHIPS.

    (a) In General.--Part B of title IV (42 U.S.C. 620-628) is amended 
by inserting after section 428 the following:

``SEC. 429. CHILD WELFARE TRAINEESHIPS.

    ``The Secretary may approve an application for a grant to a public 
or nonprofit institution for higher learning to provide traineeships 
with stipends under section 426(a)(1)(C) only if the application--
            ``(1) provides assurances that each individual who receives 
        a stipend with such traineeship (in this section referred to as 
        a `recipient') will enter into an agreement with the 
        institution under which the recipient agrees--
                    ``(A) to participate in training at a public or 
                private nonprofit child welfare agency on a regular 
                basis (as determined by the Secretary) for the period 
                of the traineeship;
                    ``(B) to be employed for a period of years 
                equivalent to the period of the traineeship, in a 
                public or private nonprofit child welfare agency in any 
                State, within a period of time (determined by the 
                Secretary in accordance with regulations) after 
                completing the postsecondary education for which the 
                traineeship was awarded;
                    ``(C) to furnish to the institution and the 
                Secretary evidence of compliance with subparagraphs (A) 
                and (B); and
                    ``(D) if the recipient fails to comply with 
                subparagraph (A) or (B) and does not qualify for any 
                exception to this subparagraph which the Secretary may 
                prescribe in regulations, to repay to the Secretary all 
                (or an appropriately prorated part) of the amount of 
                the stipend, plus interest, and, if applicable, 
                reasonable collection fees (in accordance with 
                regulations promulgated by the Secretary);
            ``(2) provides assurances that the institution will--
                    ``(A) enter into agreements with child welfare 
                agencies for onsite training of recipients;
                    ``(B) permit an individual who is employed in the 
                field of child welfare services to apply for a 
                traineeship with a stipend if the traineeship furthers 
                the progress of the individual toward the completion of 
                degree requirements; and
                    ``(C) develop and implement a system that, for the 
                3-year period that begins on the date any student 
                completes a child welfare services program of study, 
                tracks the employment record of the student, for the 
                purpose of determining the percentage of students who 
                secure employment in the field of child welfare 
                services and remain employed in the field.''.
    (b) Conforming Amendment.--Section 426(a)(1)(C) (42 U.S.C. 
626(a)(1)(C)) is amended by inserting ``described in section 429'' 
after ``including traineeships''.
    (c) Applicability.--The amendments made by this section shall apply 
to grants awarded on or after April 1, 1994.

SEC. 13216. DISSOLVED ADOPTIONS.

    (a) Eligibility for Foster Care Maintenance Payments.--Section 472 
(42 U.S.C. 672) is amended--
            (1) in subsection (b), by inserting ``or (i)'' after 
        ``subsection (a)''; and
            (2) by adding at the end the following:
    ``(i) Any State with a plan approved under this part may make 
foster care maintenance payments under this part on behalf of a child--
            ``(1) with respect to whom such payments were previously 
        made;
            ``(2) whose adoption has been set aside by a court;
            ``(3) who meets the requirements of paragraphs (1), (2), 
        and (3) of subsection (a); and
            ``(4) who fails to meet the requirements of subsection 
        (a)(4) but would meet such requirements if--
                    ``(A) the child were treated as if the child were 
                in the same financial and other circumstances the child 
                was in the last time the child was determined eligible 
                for such payments; and
                    ``(B) the adoption were treated as having never 
                occurred.''.
    (b) Effective Date.--The amendments made by this section shall 
apply to payments under part E of title IV of the Social Security Act 
in fiscal years beginning on or after October 1, 1995.

SEC. 13217. TIME FRAME FOR JUDICIAL DETERMINATIONS ON VOLUNTARY 
              PLACEMENTS.

    (a) In General.--Section 472(e) (42 U.S.C. 672(e)) is amended--
            (1) by striking ``No'' and inserting ``(1) Except as 
        provided in paragraph (2), no''; and
            (2) by adding at the end the following:
            ``(2) If the judicial determination referred to in 
        paragraph (1) is made after the 180-day period described 
        therein, the payments referred to therein may not be made for 
        the period that begins at the end of the 180-day period and 
        ends 180 days after the date of the judicial determination, but 
        shall (unless otherwise prohibited) be made for periods 
        thereafter.''.
    (b) Effective Date.--The amendments made by subsection (a) shall be 
effective with respect to foster care maintenance payments made, under 
State plans in fiscal year 1996 and succeeding fiscal years, on behalf 
of children placed in foster care on or after October 1, 1995.

SEC. 13218. STUDY OF REASONABLE EFFORTS.

    (a) In General.--The Secretary of Health and Human Services shall 
conduct a study of the implementation by the States of section 
471(a)(15) of the Social Security Act, giving particular attention to--
            (1) standards used by States in determining what action to 
        take, and whether and for how long to continue efforts--
                    (A) before the placement of a child in foster care, 
                to prevent or eliminate the need for removal of the 
                child from the home of the child; and
                    (B) to return a child home rather than to seek some 
                other planned, permanent placement; and
            (2) the responses of the courts to the State actions 
        described in paragraph (1) of this subsection, including 
        whether such responses facilitate or impede the achievement by 
        State agencies of the objectives of such section 471(a)(15).
    (b) Report and Recommendations.--Within 18 months after the date of 
the enactment of this Act, the Secretary of Health and Human Services 
shall submit to the Congress a report, with such recommendations as the 
Secretary finds appropriate, based on the results of the study required 
by subsection (a) of this section, which describes State practices that 
the Secretary has found effective in achieving the objectives of 
section 471(a)(15) of the Social Security Act, and, if appropriate, 
shall set forth model practices for consideration by the States.

SEC. 13219. ENHANCED MATCH FOR AUTOMATED DATA SYSTEMS.

    (a) Payments to States.--
            (1) In general.--Section 474(a)(3) (42 U.S.C. 674(a)(3)) is 
        amended--
                    (A) by striking ``and'' at the end of subparagraph 
                (B);
                    (B) by redesignating subparagraph (C) as 
                subparagraph (E); and
                    (C) by inserting after subparagraph (B) the 
                following:
                    ``(C) 90 percent of so much of such expenditures as 
                are for the planning, design, development, or 
                installation of statewide mechanized data collection 
                and information retrieval systems (including 90 percent 
                of the full amount of expenditures for hardware 
                components for such systems) but only to the extent 
                that such systems--
                            ``(i) meet the requirements imposed by 
                        regulations promulgated pursuant to section 
                        479(b)(2);
                            ``(ii) to the extent practicable, are 
                        capable of interfacing with the State data 
                        collection system that collects information 
                        relating to child abuse and neglect;
                            ``(iii) to the extent practicable, have the 
                        capability of interfacing with, and retrieving 
                        information from, the State data collection 
                        system that collects information relating to 
                        the eligibility of individuals under part A 
                        (for the purposes of facilitating verification 
                        of eligibility of foster children); and
                            ``(iv) are determined by the Secretary to 
                        be likely to provide more efficient, 
                        economical, and effective administration of the 
                        programs carried out under a State plan 
                        approved under part B or this part; and
                    ``(D) 50 percent of so much of such expenditures as 
                are for the operation of the statewide mechanized data 
                collection and information retrieval systems referred 
                to in subparagraph (C); and''.
            (2) Treatment of state expenditures for data collection and 
        information retrieval systems.--Section 474 (42 U.S.C. 674), as 
        amended by section 13224 of this Act, is amended by adding at 
        the end the following:
    ``(c) Automated Data Collection Expenditures.--The Secretary shall 
treat as necessary for the proper and efficient administration of the 
State plan all expenditures of a State necessary in order for the State 
to plan, design, develop, install, and operate data collection and 
information retrieval systems described in subsection (a)(3)(C), 
without regard to whether the systems may be used with respect to 
foster or adoptive children other than those on behalf of whom foster 
care maintenance payments or adoption assistance payments may be made 
under this part.''.
            (3) Effective date.--The amendments made by this subsection 
        shall apply to expenditures during fiscal years 1994, 1995, and 
        1996.
    (b) Termination of Enhanced Match.--
            (1) In general.--Section 474(a)(3)(C) (42 U.S.C. 
        674(a)(3)(C)), as amended by subsection (a) of this section, is 
        amended by striking ``90 percent'' each place such term appears 
        and inserting ``50 percent''.
            (2) Effective date.--The amendment made by paragraph (1) 
        shall apply to expenditures during fiscal years beginning on or 
        after October 1, 1996.

SEC. 13220. PERIODIC REEVALUATION OF FOSTER CARE MAINTENANCE PAYMENTS.

    (a) In General.--Section 471(a)(11) (42 U.S.C. 671(a)(11)) is 
amended--
            (1) by inserting ``(A)'' after ``(11)'';
            (2) by striking ``and amounts paid as foster care 
        maintenance payments and adoption assistance''; and
            (3) by adding at the end the following:
            ``(B) provides that, at least once every 3 years, the State 
        agency will review the amount paid as foster care maintenance 
        payments and adoption assistance payments to ensure their 
        continuing appropriateness, and will submit to the Secretary 
        (and make available to the public) a report on the results of 
        the review, in such form and manner as the Secretary may by 
        regulation require, which contains, at a minimum--
                    ``(i) a statement of the manner in which the foster 
                care maintenance payment level is determined, including 
                information on the cost of foster care with respect to 
                which such payments are made;
                    ``(ii) information on the amount of the basic 
                foster care maintenance payment level, and as to 
                whether such payment level includes an amount to cover 
                the cost of clothing, and whether such payment level 
                varies by the type of care or the special needs or age 
                of the child, and, if so, the payment levels for each 
                special needs, care, or age category;
                    ``(iii) if such payments are not made at a 
                different rate for children who test positive for human 
                immunodeficiency virus, have acquired immune deficiency 
                syndrome, are addicted to drugs, suffer from 
                complications due to exposure to drugs or alcohol, or 
                have other severe special needs, the reasons therefor; 
                and
                    ``(iv) information on any limitations imposed by 
                the State on adoption assistance payment levels;''.
    (b) Effective Date.--The amendment made by this section shall be 
effective with respect to calendar quarters beginning on or after 
October 1, 1994.

SEC. 13221. DISPOSITIONAL HEARING.

    Section 475(5)(C) (42 U.S.C. 675(5)(C)) is amended by striking 
``periodically'' and inserting ``not less frequently than every 12 
months''.

SEC. 13222. HEALTH CARE PLANS FOR FOSTER CHILDREN.

    (a) In General.--Section 475(1)(C) (42 U.S.C. 675(1)(C)) is 
amended--
            (1) in clause (vii), by striking ``and''; and
            (2) by redesignating clause (viii) as clause (ix) and 
        inserting after clause (vii) the following:
                    ``(viii) a record indicating that the child's 
                foster care provider was advised (where appropriate) of 
                the child's eligibility for early and periodic 
                screening, diagnostic, and treatment services under 
                title XIX; and''.
    (b) Effective Date.--The amendments made by this section shall 
apply to case plans established or reviewed on or after January 1, 
1994.

SEC. 13223. INDEPENDENT LIVING.

    (a) Treatment of Assets of Participating Youths.--Section 477 (42 
U.S.C. 677) is amended--
            (1) by redesignating subsection (i) as subsection (j); and
            (2) by inserting after subsection (h) the following:
    ``(i) Notwithstanding any other provision of this title, with 
respect to a child who is included in a program established by a State 
agency under subsection (a), an amount of the assets of the child which 
would otherwise be regarded as resources for purposes of determining 
eligibility for benefits under this title may be disregarded for the 
purpose of allowing the child to establish a household, pursue 
education, or otherwise complete the transition to independent living. 
The amount disregarded may not exceed an amount determined by the State 
agency to be reasonable for such purposes.''.
    (b) Permanent Extension of Program.--Section 477 (42 U.S.C. 677) is 
amended--
            (1) in subsection (a)(1), by striking the 3rd sentence;
            (2) in subsection (c), by striking ``of the fiscal years 
        1988 through 1992'' and inserting ``succeeding fiscal year'';
            (3) in subsection (e)(1)(A), by striking ``each of the 
        fiscal years 1987 through 1992'' and inserting ``fiscal year 
        1987 and any succeeding fiscal year'';
            (4) in subsection (e)(1)(B), by striking ``fiscal years 
        1991 and 1992'' and inserting ``fiscal year 1991 and any 
        succeeding fiscal year''; and
            (5) in subsection (e)(1)(C)(ii), by striking ``fiscal year 
        1992'' and inserting ``any succeeding fiscal year''.
    (c) Effective Dates.--
            (1) Treatment of assets of participating youths.--The 
        amendments made by subsection (a) shall apply to activities in 
        fiscal years beginning on or after October 1, 1995.
            (2) Permanent extension of program.--The amendments made by 
        subsection (b) shall apply to activities engaged in on or after 
        October 1, 1992.

SEC. 13224. ELIMINATION OF FOSTER CARE CEILINGS AND OF AUTHORITY TO 
              TRANSFER UNUSED FOSTER CARE FUNDS TO CHILD WELFARE 
              SERVICES PROGRAMS.

    (a) Repeal.--Subsections (b) and (c) of section 474 (42 U.S.C. 674 
(b) and (c)) are hereby repealed.
    (b) Conforming Amendments.--Section 474 (42 U.S.C. 674) is 
amended--
            (1) in subsection (d)(1)--
                    (A) by striking ``subsections (a), (b), and (c)'' 
                and inserting ``subsection (a)''; and
                    (B) by striking ``the provisions of such 
                subsections'' and inserting ``subsection (a)''; and
            (2) by redesignating subsection (d) as subsection (b).
    (c) Effective Date.--The amendments and repeal made by this section 
shall apply to payments for calendar quarters beginning on or after 
October 1, 1993.

SEC. 13225. TRAINING OF AGENCY STAFF AND FOSTER AND ADOPTIVE PARENTS.

    (a) In General.--Section 8006(b) of the Omnibus Budget 
Reconciliation Act of 1989 (42 U.S.C. 674 note) is amended by striking 
``, and before October 1, 1992''.
    (b) Retroactive Applicability.--The Social Security Act shall be 
applied and administered as if the amendment made by subsection (a) had 
been made on October 1, 1992.

SEC. 13226. ON-SITE REVIEWS AND AUDITS OF STATE CLAIMS FOR FOSTER CARE 
              AND ADOPTION ASSISTANCE.

    (a) On-Site Reviews and Audits of State Claims.--Section 474 (42 
U.S.C. 674), as amended by sections 13224 and 13219(a)(2) of this Act, 
is amended--
            (1) by redesignating subsection (c) as subsection (d); and
            (2) by inserting after subsection (b) the following:
    ``(c) On-Site Reviews and Audits of State Claims for Payment.--
            ``(1) Regulations specifying review standards.--The 
        Secretary shall promulgate regulations applicable to on-site 
        reviews and audits of State expenditures for foster care 
        maintenance payments and adoption assistance payments under 
        this part, which specify--
                    ``(A) the criteria to be used to determine the 
                appropriateness of expenditures identified in sampled 
                case files;
                    ``(B) the criteria to be used to determine the 
                appropriateness of expenditures for child placement 
                services and plan administration; and
                    ``(C) the types of erroneous expenditures which 
                will be disregarded for purposes of determining the 
                appropriateness of payments under this part (including 
                erroneous payments resulting from the State's reliance 
                upon and correct use of formal written statements of 
                Federal law or policy provided to the State by the 
                Secretary).
            ``(2) Development and publication of written standards and 
        procedures.--The Secretary, after consultation with 
        organizations representing State and local governmental 
        agencies with responsibility for foster care and adoption 
        services and other relevant agencies and organizations, shall 
        develop and furnish to State agencies a written description of 
        the methods and procedures to be used in the on-site audits and 
        reviews referred to in paragraph (1), which specify--
                    ``(A) the methods and procedures to be used to 
                select a sample of case files for review or audit;
                    ``(B) the procedures to be used in reviewing or 
                auditing sampled case files to determine erroneous 
                expenditures;
                    ``(C) the procedures to be used to review or audit 
                State expenditures for child placement services and 
                plan administration; and
                    ``(D) the methodology to be used to extrapolate 
                from review or audit findings to all expenditures under 
                the State plan.
            ``(3) Advance notice to states.--The Secretary shall not, 
        in a review or audit of State expenditures during a fiscal 
        year, use any criterion specified pursuant to paragraph (1), or 
        any procedure or methodology specified pursuant to paragraph 
        (2), which was not published in final regulations or furnished 
        in writing to the State (as applicable) at least 3 months 
        before the beginning of the fiscal year.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to expenditures in fiscal years beginning on or after October 1, 
1994.

SEC. 13227. CONFORMITY REVIEWS.

    (a) In General.--Part A of title XI (42 U.S.C. 1301-1320b-13) is 
amended by inserting after section 1122 the following:

``SEC. 1123. REVIEWS OF CHILD AND FAMILY SERVICES PROGRAMS, AND OF 
              FOSTER CARE AND ADOPTION ASSISTANCE PROGRAMS, FOR 
              COMPLIANCE WITH STATE PLAN REQUIREMENTS.

    ``(a) In General.--The Secretary shall not impose a financial 
penalty on any State for any failure of the State programs under parts 
B and E of title IV to comply with any requirement of any State plan 
approved under such part B or E, except pursuant to final regulations, 
developed after consultation with State agencies administering such 
programs, which meet the requirements of this section.
    ``(b) Elements of Review System.--The regulations referred to in 
subsection (a) shall--
            ``(1) specify the timetable for compliance reviews of State 
        programs, which--
                    ``(A) shall provide for annual reviews of each 
                State program during the 1st 2 years of operation;
                    ``(B) shall provide for review of a State program 
                not later than 1 year following a review in which the 
                State program was found not to be in substantial 
                compliance with plan requirements; and
                    ``(C) may provide for less frequent reviews of 
                State programs which have been found to be in 
                substantial compliance with plan requirements, but 
                shall permit the Secretary to reinstate more frequent 
                reviews based on information which indicates that the 
                State program may not be in compliance with plan 
                requirements;
            ``(2) specify the plan requirements subject to review, and 
        the criteria to be used to measure compliance with such 
        requirements and to determine whether there is a substantial 
        failure to comply with a plan requirement;
            ``(3) specify the method to be used to determine the 
        financial penalty to be imposed (subject to paragraph (4)) for 
        a failure to comply with plan requirements, which ensures 
        that--
                    ``(A) a financial penalty will not be imposed with 
                respect to a program, unless it is determined that the 
                program fails substantially to so comply;
                    ``(B) a financial penalty will not be imposed for a 
                failure to so comply resulting from the State's 
                reliance upon and correct use of formal written 
                statements of Federal law or policy provided to the 
                State by the Secretary; and
                    ``(C) the amount of financial penalty is related to 
                the extent of the noncompliance; and
            ``(4) require the Secretary, with respect to any State 
        found to have failed substantially to comply with plan 
        requirements--
                    ``(A) to afford the State an opportunity to adopt 
                and implement a corrective action plan, approved by the 
                Secretary, designed to end the noncompliance;
                    ``(B) to make technical assistance available to the 
                State to the extent necessary to enable the State to 
                develop and implement such a corrective action plan;
                    ``(C) to suspend the imposition of any penalty 
                under this section while such a corrective action plan 
                is in effect; and
                    ``(D) to rescind any such penalty if the 
                noncompliance is ended by successful completion of such 
                a corrective action plan.
    ``(c) Provisions for Administrative and Judicial Review.--The 
regulations referred to in subsection (a) shall--
            ``(1) require the Secretary, not later than 10 days after a 
        determination that a program of the State is not in compliance 
        with applicable plan requirements, to notify the State of--
                    ``(A) the basis for the determination; and
                    ``(B) the amount of the financial penalty (if any) 
                imposed on the State;
            ``(2) afford the State an opportunity to appeal the 
        determination to the Departmental Appeals Board within 60 days 
        after receipt of the notice described in paragraph (1) (or, if 
        later, after failure to continue or to complete a corrective 
        action plan); and
            ``(3) afford the State an opportunity to obtain judicial 
        review of an adverse decision of the Board, within 60 days 
        after the State receives notice of the decision of the Board, 
        by appeal to the district court of the United States for the 
        judicial district in which the principal or headquarters office 
        of the agency responsible for administering the program is 
        located.''.
    (b) Conforming Amendment.--Section 471(b) (42 U.S.C. 671(b)) is 
amended by striking all that follows the 1st sentence.
    (c) Effective Date.--The amendments made by subsections (a) and (b) 
shall take effect on the date of the enactment of this Act.
    (d) Construction.--This section shall not be construed to prevent 
the Secretary, before the effective date of final regulations meeting 
the requirements of section 1123 of the Social Security Act, from 
conducting compliance reviews of State programs under parts B and E of 
such Act for the purpose of providing information and technical 
assistance to States concerning corrective actions needed in order to 
comply with plan requirements applicable to such programs.

SEC. 13228. REPEAL OF ANNUAL REPORT ON VOLUNTARY PLACEMENT.

    Section 102(e) of the Adoption Assistance and Child Welfare Act of 
1980 (42 U.S.C. 672 note) is hereby repealed.

SEC. 13229. DEMONSTRATION PROJECTS.

    Part A of title XI (42 U.S.C. 1301-1320b-13) is amended by 
inserting after section 1128B the following:

``SEC. 1129. DEMONSTRATION PROJECTS.

    ``(a) In General.--The Secretary may authorize not more than 10 
States to conduct demonstration projects pursuant to this section which 
the Secretary finds are likely to promote the objectives of part B or E 
of title IV.
    ``(b) Waiver Authority.--The Secretary may waive compliance with 
any requirement of part B or E of title IV which (if applied) would 
prevent a State from carrying out a demonstration project under this 
section or prevent the State from effectively achieving the purpose of 
such a project, except that the Secretary may not waive--
            ``(1) any provision of section 427 (as in effect before 
        October 1, 1994), section 422(b)(9) (as in effect after such 
        date), or section 479; or
            ``(2) any provision of such part E, to the extent that the 
        waiver would impair the entitlement of any qualified child or 
        family to benefits under a State plan approved under such part 
        E.
    ``(c) Treatment as Program Expenditures.--For purposes of parts B 
and E of title IV, the Secretary shall consider the expenditures of any 
State to conduct a demonstration project under this section to be 
expenditures under subpart 1 or 2 of such part B, or under such part E, 
as the State may elect.
    ``(d) Duration of Demonstration.--A demonstration project under 
this section may be conducted for not more than 5 years.
    ``(e) Application.--Any State seeking to conduct a demonstration 
project under this section shall submit to the Secretary an 
application, in such form as the Secretary may require, which 
includes--
            ``(1) a description of the proposed project, the geographic 
        area in which the proposed project would be conducted, the 
        children or families who would be served by the proposed 
        project, and the services which would be provided by the 
        proposed project (which shall provide, where appropriate, for 
        random assignment of children and families to groups served 
        under the project and to control groups);
            ``(2) a statement of the period during which the proposed 
        project would be conducted;
            ``(3) a discussion of the benefits that are expected from 
        the proposed project (compared to a continuation of activities 
        under the approved plan or plans of the State);
            ``(4) an estimate of the costs or savings of the proposed 
        project;
            ``(5) a statement of program requirements for which waivers 
        would be needed to permit the proposed project to be conducted;
            ``(6) a description of the proposed evaluation design; and
            ``(7) such additional information as the Secretary may 
        require.
    ``(f) Evaluations; Report.--Each State authorized to conduct a 
demonstration project under this section shall--
            ``(1) obtain an evaluation by an independent contractor of 
        the effectiveness of the project, using an evaluation design 
        approved by the Secretary which provides for--
                    ``(A) comparison of methods of service delivery 
                under the project, and such methods under a State plan 
                or plans, with respect to efficiency, economy, and any 
                other appropriate measures of program management;
                    ``(B) comparison of outcomes for children and 
                families (and groups of children and families) under 
                the project, and such outcomes under a State plan or 
                plans, for purposes of assessing the effectiveness of 
                the project in achieving program goals; and
                    ``(C) any other information that the Secretary may 
                require; and
            ``(2) provide interim and final evaluation reports to the 
        Secretary, at such times and in such manner as the Secretary 
        may require.
    ``(g) Cost Neutrality.--The Secretary may not authorize a State to 
conduct a demonstration project under this section unless the Secretary 
determines that the total amount of Federal funds that will be expended 
under (or by reason of) the project over its approved term (or such 
portion thereof or other period as the Secretary may find appropriate) 
will not exceed the amount of such funds that would be expended by the 
State under the State plans approved under parts B and E of title IV if 
the project were not conducted.''.

SEC. 13230. PLACEMENT ACCOUNTABILITY.

    (a) Case Plan Requirements.--Section 475(5)(A) (42 U.S.C. 
675(5)(A)) is amended by adding at the end the following: ``which--
                            ``(i) if the child has been placed in a 
                        foster family home or child-care institution a 
                        substantial distance from the home of the 
                        parents of the child, or in a State different 
                        from the State in which the home is located, 
                        sets forth the reasons why such placement is in 
                        the best interests of the child, and
                            ``(ii) if the child has been placed in 
                        foster care outside the State, requires that, 
                        at least every 6 months, a caseworker on the 
                        staff of the State agency of the State in which 
                        the home of the parents of the child is 
                        located, or of the State in which the child has 
                        been placed, visit such child in such home or 
                        institution and submit a report on such visit 
                        to the State agency of the State in which the 
                        home of the parents of the child is located,''.
    (b) Dispositional Hearing.--Section 475(5)(C) (42 U.S.C. 675(5)(C)) 
is amended by inserting ``and, in the case of a child described in 
subparagraph (A)(ii), whether the out-of-State placement continues to 
be appropriate and in the best interests of the child,'' after ``long-
term basis)''.
    (c) Data Collection.--Section 479(c)(3)(C) (42 U.S.C. 679(c)(3)(C)) 
is amended--
            (1) by striking ``and'' at the end of clause (i); and
            (2) by adding at the end the following:
                            ``(iii) children placed in foster care 
                        outside the State, and''.
    (d) Effective Dates.--The amendments made by subsections (a), (b), 
and (c) shall be effective with respect to fiscal years beginning on 
and after October 1, 1994.

SEC. 13231. PAYMENTS OF STATE CLAIMS FOR FOSTER CARE AND ADOPTION 
              ASSISTANCE.

    Section 474(b) (42 U.S.C. 674(b)), as so redesignated by section 
13239(b)(2) of this Act, is amended by adding at the end the following:
    ``(4)(A) Within 60 days after receipt of a State claim for 
expenditures pursuant to subsection (a), the Secretary shall allow, 
disallow, or defer such claim.
    ``(B) Within 15 days after a decision to defer such a State claim, 
the Secretary shall notify the State of the reasons for the deferral 
and of the additional information necessary to determine the 
allowability of the claim.
    ``(C) Within 90 days after receiving such necessary information (in 
readily reviewable form), the Secretary shall--
            ``(i) disallow the claim, if able to complete the review 
        and determine that the claim is not allowable, or
            ``(ii) in any other case, allow the claim, subject to 
        disallowance (as necessary)--
                    ``(I) upon completion of the review, if it is 
                determined that the claim is not allowable; or
                    ``(II) on the basis of findings of an audit or 
                financial management review.''.

SEC. 13232. MORATORIUM ON COLLECTION OF DISALLOWANCES.

    The Secretary of Health and Human Services shall not--
            (1) before October 1, 1994, reduce any payment to, withhold 
        any payment from, or seek any repayment from any State under 
        part B or E of title IV of the Social Security Act by reason of 
        a determination made in connection with a review of State 
        compliance with section 427 of such Act for any Federal fiscal 
        year before fiscal year 1995; or
            (2) reduce any payment to, withhold any payment from, or 
        seek any repayment from any State under such part E by reason 
        of a determination made in connection with any on-site Federal 
        financial review, or any audit conducted by the Inspector 
        General using similar methodologies.

SEC. 13233. BORDER REGION CHILD WELFARE WORKER TRAINING DEMONSTRATION.

    (a) In General.--The Secretary shall make grants to not more than 5 
eligible institutions to train individuals to deliver culturally 
sensitive and bilingual child welfare services in areas of the United 
States that border on Mexico, 1 of which grants shall be for training 
to deliver child welfare services to historically unserved or 
underserved populations in an urban center with a high concentration of 
such populations.
    (b) Applications.--The Secretary shall approve an application of an 
institution for a grant under this section only if the application--
            (1) demonstrates to the satisfaction of the Secretary that 
        the institution has a history of, or a plan for, training 
        students to deliver culturally sensitive and bilingual child 
        welfare services in a border county;
            (2) provides assurances that the institution will develop 
        and implement, in consultation with the child welfare agency of 
        the State in which the institution is located, a curriculum in 
        the field of child welfare services which--
                    (A) is sensitive to the culture of--
                            (i) the areas of the United States that 
                        border on Mexico; or
                            (ii) in the case of the institution which 
                        receives the urban center grant described in 
                        subsection (a), the historically unserved or 
                        underserved populations in the urban center; 
                        and
                    (B) includes training for identification of health 
                problems of children and their families and of child 
                abuse and neglect;
            (3) provides assurances that each individual who receives a 
        stipend with such training will enter into an agreement with 
        the institution under which the individual agrees--
                    (A) to be employed for a period of years equivalent 
                to the period of such training, in a public or private 
                nonprofit family assistance agency that provides 
                services directly to residents of--
                            (i) the border county in which the agency 
                        is located; or
                            (ii) in the case of the institution which 
                        receives the urban center grant described in 
                        subsection (a), the urban center in which the 
                        agency is located; and
                    (B) if the individual fails to be so employed for 
                such period, to repay to the Secretary, in accordance 
                with such conditions as the Secretary may prescribe, 
                all or part of the amount of the stipend, plus 
                interest, and, if applicable, reasonable collection 
                fees; and
            (4) provides that each agreement entered into with an 
        individual pursuant to paragraph (3) will fully disclose the 
        terms and conditions under which the stipend is to be provided.
    (c) Evaluations.--Each institution that receives a grant under this 
section shall develop and carry out a plan for evaluating the effects 
of the training provided under the grant, and shall submit to the 
Secretary a report on the evaluation.
    (d) Definitions.--As used in this section:
            (1) Family assistance agency.--The term ``family assistance 
        agency'' means a child welfare agency, family planning agency, 
        hospital, clinic, community mental health facility, or drug and 
        alcohol treatment program.
            (2) Eligible institution.--The term ``eligible 
        institution'' means a public or private nonprofit institution 
        of higher learning that is located in a State that contains a 
        border county.
            (3) Border county.--The term ``border county'' means--
                    (A) a United States county that borders on Mexico; 
                and
                    (B) a United States county that borders on a county 
                described in subparagraph (A).
            (c) Urban center.--The term ``urban center'' means an area 
        in a metropolitan statistical area, as designated by the Office 
        of Management and Budget, which has a high incidence of 
        individuals in historically unserved or underserved populations 
        who are in need of social services, as determined by the 
        Secretary using the most recent and best available information.
            (5) Historically unserved or underserved populations.--The 
        term ``historically unserved or underserved populations'' 
        includes--
                    (A) socially and economically disadvantaged 
                populations;
                    (B) persons with limited English proficiency;
                    (C) populations residing in urban areas and 
                exhibiting a high incidence of child abuse, neglect, or 
                abandonment, as determined by the Secretary;
                    (D) homeless persons (within the meaning of section 
                103 of the Stewart B. McKinney Homeless Assistance 
                Act);
                    (E) persons who are, or are in danger of becoming, 
                infected with the human immunodeficiency virus; and
                    (F) persons who abuse alcohol or drugs.
            (6) Secretary.--The term ``Secretary'' means the Secretary 
        of Health and Human Services.
    (e) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as may be necessary to carry out this section.

SEC. 13234. EFFECT OF FAILURE TO CARRY OUT STATE PLAN.

    (a) In General.--Part A of title XI (42 U.S.C. 1301-1320b-13), as 
amended by section 13229 of this Act, is amended by inserting after 
section 1129 the following:

``SEC. 1130. EFFECT OF FAILURE TO CARRY OUT STATE PLAN.

    ``In an action brought to enforce a provision of the Social 
Security Act, such provision is not to be deemed unenforceable because 
of its inclusion in a section of the Act requiring a State plan or 
specifying the required contents of a State plan. This section is not 
intended to limit or expand the grounds for determining the 
availability of private actions to enforce State plan requirements 
other than by overturning any such grounds applied in Suter v. Artist 
M., 112 S. Ct. 1360 (1992), but not applied in prior Supreme Court 
decisions respecting such enforceability: Provided, however, That this 
section is not intended to alter the holding in Suter v. Artist M. that 
section 471(a)(15) of the Act is not enforceable in a private right of 
action.''.
    (b) Applicability.--The amendment made by subsection (a) shall 
apply to actions pending on the date of the enactment of this Act and 
to actions brought on or after such date of enactment.

                  CHAPTER 2--CHILD SUPPORT ENFORCEMENT

SEC. 13241. STATE PATERNITY ESTABLISHMENT PROGRAMS.

    (a) Performance Standards.--Section 452(g) (42 U.S.C. 652(g)) is 
amended--
            (1) in paragraph (1)--
                    (A) by striking ``1991'' and inserting ``1994'';
                    (B) by inserting ``is based on reliable data and'' 
                before ``equals or exceeds''; and
                    (C) by striking subparagraphs (A), (B), and (C) and 
                inserting the following:
            ``(A) 75 percent;
            ``(B) for a State with a paternity establishment percentage 
        of not less than 50 percent but less than 75 percent for the 
        fiscal year, the paternity establishment percentage of the 
        State for the immediately preceding year plus 3 percentage 
        points; or
            ``(C) for a State with a paternity establishment percentage 
        of less than 50 percent for such fiscal year, the paternity 
        establishment percentage of the State for the immediately 
        preceding year plus 6 percentage points.''; and
            (2) in paragraph (2)--
                    (A) by striking ``(or under all such plans)'' each 
                place such term appears;
                    (B) by inserting ``or part E'' after ``under part 
                A'' each place such term appears;
                    (C) by amending subparagraph (B) to read as 
                follows:
                    ``(B) the term `reliable data' means the most 
                recent data available which are found by the Secretary 
                to be reliable for purposes of this section.'';
                    (D) by inserting ``unless paternity is established 
                for such child'' after ``the death of a parent'';
                    (E) by striking ``parent or'' and inserting 
                ``parent,''; and
                    (F) by inserting ``, or any child with respect to 
                whom the State agency administering the plan under part 
                E determines (as provided in section 454(4)(B)) that it 
                is against the best interest of such child to do so'' 
                after ``cooperate under section 402(a)(26)''.
    (b) State Plan Requirements.--
            (1) Required procedures.--Section 466(a) (42 U.S.C. 666(a)) 
        is amended--
                    (A) in paragraph (2)--
                            (i) by striking ``at the option of the 
                        State,''; and
                            (ii) by inserting ``and paternity 
                        establishment'' after ``support order issuance 
                        and enforcement'';
                    (B) in paragraph (5), by adding at the end the 
                following:
                    ``(C) Procedures for a simple civil process for 
                voluntarily acknowledging paternity under which the 
                State must explain the rights and responsibilities of 
                acknowledging paternity, and afford due process 
                safeguards. Such procedures must include (i) a 
                hospital-based program for the voluntary acknowledgment 
                of paternity during the period immediately before or 
                after the birth of a child, and (ii) the inclusion of 
                signature lines on applications for official birth 
                certificates which, once signed by the father and the 
                mother, are considered a voluntary acknowledgment of 
                paternity.
                    ``(D) Procedures under which the voluntary 
                acknowledgment of paternity of a child by an individual 
                in the manner described in subparagraph (C)(ii) creates 
                a rebuttable or, at the option of the State, conclusive 
                presumption that the individual is the father of the 
                child, and under which such a voluntary acknowledgment 
                is admissible as evidence of paternity.
                    ``(E) Procedures under which a voluntary 
                acknowledgment of paternity in the manner described in 
                subparagraph (C)(ii) must be recognized as a basis for 
                seeking a support order without first requiring any 
                further proceedings to establish paternity.
                    ``(F) Procedures requiring that (i) any objection 
                to genetic testing results be made in writing within a 
                specified number of days before any hearing at which 
                such results may be introduced into evidence, and (ii) 
                if no objection is made, the test results be admissible 
                as evidence of paternity without the need for 
                foundation testimony or other proof of authenticity or 
                accuracy.
                    ``(G) Procedures which create a rebuttable or, at 
                the option of the State, conclusive presumption of 
                paternity of a child, upon genetic testing results 
                indicating a threshold probability of the alleged 
                father being the father of the child.
                    ``(H) Procedures requiring a default order to be 
                entered in a paternity case upon a showing that process 
                has been served on the defendant and any additional 
                showing required by State law.''; and
                    (C) by inserting after paragraph (10) the 
                following:
            ``(11) Procedures under which a State must give full faith 
        and credit to a determination of paternity made by any other 
        State, whether established through voluntary acknowledgment or 
        through administrative or judicial processes.''.
            (2) Furnishing of social security numbers.--
                    (A) In general.--Section 466(a) (42 U.S.C. 666(a)), 
                as amended by paragraph (1)(C) of this subsection, is 
                amended by inserting after paragraph (11) the 
                following:
            ``(12)(A) Procedures under which, in the administration of 
        any law involving the issuance, reissuance, or amendment of a 
        birth certificate, the State shall require each parent to 
        furnish to the State, or any agency or political subdivision 
        thereof having administrative responsibility for the law 
        involved, the social security account number (or numbers, if 
        the parent has more than 1 such number) issued to the parent, 
        unless the State (in accordance with regulations prescribed by 
        the Secretary) finds good cause for not requiring the 
        furnishing of the number.
            ``(B) Procedures under which any number furnished under 
        subparagraph (A) shall be made available to the agency 
        administering the State plan under this part, in accordance 
        with Federal or State law or regulation.
            ``(C) Procedures under which--
                    ``(i) any number furnished under subparagraph (A) 
                shall not be recorded on the birth certificate; and
                    ``(ii) any social security account number, obtained 
                with respect to the issuance by the State of any birth 
                certificate, shall not be used for other than child 
                support purposes, unless section 7(a) of the Privacy 
                Act of 1974 does not prohibit the State from requiring 
                the disclosure of the number, by reason of the State 
                having adopted, before January 1, 1975, a statute or 
                regulation requiring such disclosure.''.
                    (B) Conforming amendments.--Section 
                205(c)(2)(C)(ii) (42 U.S.C. 405(c)(2)(C)(ii)) is 
                amended--
                            (i) by striking ``(ii) In the 
                        administration of any law involving the 
                        issuance'' and inserting ``(ii) In the 
                        administration of any law involving the 
                        issuance, reissuance, or amendment''; and
                            (ii) by striking ``any purpose other than 
                        for the enforcement of child support orders in 
                        effect in the State'' and inserting ``other 
                        than child support purposes''.
    (c) Conforming Repeal.--Section 468 (42 U.S.C. 668) is hereby 
repealed.
    (d) Effective Date.--The amendments and repeal made by this section 
shall become effective with respect to a State--
            (1) on October 1, 1993, or, if later
            (2) upon enactment by the legislature of the State of all 
        laws required by such amendments,
but in no event later than the 1st day of the 1st calendar quarter 
beginning after the close of the 1st regular session of the State 
legislature that begins after the date of the enactment of this Act. 
For purposes of the preceding sentence, in the case of a State that has 
a 2-year legislative session, each year of such session shall be deemed 
to be a separate regular session of the State legislature.

SEC. 13242. ENFORCEMENT OF HEALTH INSURANCE SUPPORT.

    (a) State Plan Requirements.--Section 454(a) (42 U.S.C. 654(a)) is 
amended--
            (1) by striking ``and'' at the end of paragraph (23);
            (2) by striking the period at the end of paragraph (24) and 
        inserting ``; and''; and
            (3) by inserting after paragraph (24) the following:
            ``(25) provide assurances satisfactory to the Secretary 
        that the State has in effect laws applicable to health insurers 
        and insurance policies or programs subject to the laws of the 
        State that--
                    ``(A) prohibit insurers' consideration, in 
                determining an individual's eligibility for or coverage 
                under any such policy or program, of such individual's 
                eligibility for or coverage under the plan of any State 
                under title XIX;
                    ``(B) provide that, where an individual assigns 
                rights to any State in accordance with section 1912, 
                that State is subrogated, to the extent of medical 
                assistance furnished, to the individual's rights under 
                any health insurance policy or program;
                    ``(C) prohibit insurers from applying, to State 
                agencies administering programs under title XIX and 
                acting as agents or subrogees (for purposes of 
                insurance policies or programs of such insurers) of 
                individuals receiving medical assistance under such 
                State programs, requirements (with respect to deadlines 
                for filing claims or any other matters) different from 
                requirements applicable to any other applicant, 
                beneficiary, agent, or subrogee;
                    ``(D) prohibit insurers from denying enrollment of 
                a child under the health insurance coverage of the 
                child's parent on grounds that--
                            ``(i) the child does not reside with the 
                        parent, or
                            ``(ii) the child was born out of wedlock;
                    ``(E) in any case where a parent is required by 
                court or administrative order to provide health 
                insurance coverage for a child, require insurers, 
                without regard to otherwise applicable enrollment 
                season restrictions--
                            ``(i) to permit such parent, upon 
                        application, to enroll in family coverage (if 
                        otherwise eligible and not already so 
                        enrolled), and to enroll such child under such 
                        family coverage, and
                            ``(ii) where such a parent who is enrolled 
                        in family coverage fails to make application, 
                        to enroll such child under such family coverage 
                        upon application by the child's other parent or 
                        by the State agency administering the program 
                        under this part or title XIX; and
                    ``(F) in any case where a child is covered under 
                the health insurance of a noncustodial parent, require 
                insurers--
                            ``(i) to permit the custodial parent (or 
                        service provider, with the custodial parent's 
                        approval), or any State agency administering a 
                        program under title XIX, to submit claims for 
                        covered services without the approval of the 
                        noncustodial parent, and
                            ``(ii) to make payment on claims submitted 
                        in accordance with clause (i) directly to the 
                        custodial parent, service provider, or State 
                        agency submitting such claim;
            ``(26) provide assurances satisfactory to the Secretary 
        that the State has in effect laws requiring employers doing 
        business in the State--
                    ``(A) upon notice of a court or administrative 
                order requiring an employee to provide health insurance 
                coverage for the employee's child, and upon application 
                by such employee (or, where such employee fails to make 
                application, by the child's other parent or the State 
                agency administering the program under this part or 
                title XIX), to permit enrollment of such child at any 
                time as a dependent of the employee under the 
                employer's group health insurance;
                    ``(B) to permit disenrollment from such group 
                health insurance by such employee, or elimination of 
                coverage of such child, only upon receipt of 
                satisfactory evidence, in writing, that--
                            ``(i) such court or administrative order is 
                        no longer in effect, or
                            ``(ii) the employee has enrolled or will 
                        enroll in alternative health insurance covering 
                        such child which will take effect immediately 
                        upon the effective date of such disenrollment; 
                        and
                    ``(C) to withhold from such employee's compensation 
                the employee's share (if any) of premiums for such 
                health insurance, and to pay such share of premiums to 
                the insurer;
            ``(27) provide assurances satisfactory to the Secretary 
        that the State has in effect laws requiring the State agency to 
        garnish the wages, salary, or other employment income of, and 
        to withhold amounts from State tax refunds to, any person who--
                    ``(A) is required by court or administrative order 
                to provide coverage of the costs of medical services to 
                an individual eligible for medical assistance under 
                title XIX,
                    ``(B) has received payment from a third party for 
                the costs of medical services to such individual, and
                    ``(C) has not used such payments to reimburse, as 
                appropriate, either such individual or the provider of 
                such services,
        to the extent necessary to reimburse the State agency for 
        expenditures for such costs under its plan under title XIX, but 
        any claims for current or past-due child support shall take 
        priority over any such claims for the costs of medical 
        services.''.
    (b) Effective Date.--
            (1) In general.--The amendments made by subsection (a) 
        apply to calendar quarters beginning on or after April 1, 1994, 
        except as provided in paragraph (2).
            (2) Extension for state law amendment.--In the case of a 
        State plan under part D of title IV of the Social Security Act 
        which the Secretary of Health and Human Services determines 
        requires State legislation in order for the plan to meet the 
        additional requirements imposed by the amendments made by 
        subsection (a), the State plan shall not be regarded as failing 
        to comply with the requirements of such title solely on the 
        basis of its failure to meet these additional requirements 
        before the 1st day of the 1st calendar quarter beginning after 
        the close of the 1st regular session of the State legislature 
        that begins after the date of enactment of this Act. For 
        purposes of the preceding sentence, in the case of a State that 
        has a 2-year legislative session, each year of such session 
        shall be deemed to be a separate regular session of the State 
        legislature.

SEC. 13243. REPORTS TO CREDIT BUREAUS ON PERSONS DELINQUENT IN CHILD 
              SUPPORT PAYMENTS.

    (a) In General.--Section 466(a)(7) (42 U.S.C. 666(a)(7)) is 
amended--
            (1) by striking ``upon the request of such agency'' and 
        inserting ``, and procedures which require the State to 
        periodically report to any such agency the name of any parent 
        who owes overdue support and is at least 2 months delinquent in 
        the payment of such support and the amount of such delinquency 
        unless the agency requests not to receive such information''; 
        and
            (2) by striking ``(C) a fee'' and all that follows through 
        ``by the State'' and inserting ``, and (C) such information 
        shall not be made available to (i) a consumer reporting agency 
        which the State determines does not have sufficient capability 
        to systematically and timely make accurate use of such 
        information, or (ii) an entity which has not furnished evidence 
        satisfactory to the State that the entity is a consumer 
        reporting agency''.
    (b) Effective Date.--
            (1) In general.--Except as provided in paragraph (2), the 
        amendments made by subsection (a) shall take effect on October 
        1, 1994.
            (2) Exception.--If the Secretary of Health and Human 
        Services determines that a State is unable to comply with the 
        amendments made by subsection (a), such State shall be exempt 
        from compliance with such amendments until the State 
        establishes an automated data processing and information 
        retrieval system under section 454(24) of the Social Security 
        Act, or October 1, 1995, whichever occurs earlier.

                CHAPTER 3--SUPPLEMENTAL SECURITY INCOME

SEC. 13251. FEES FOR FEDERAL ADMINISTRATION OF STATE SUPPLEMENTARY 
              PAYMENTS.

    (a) In General.--
            (1) Optional state supplementary payments.--Section 1616(d) 
        (42 U.S.C. 1382e(d)) is amended--
                    (A) by inserting ``(1)'' after ``(d)'';
                    (B) by inserting ``, plus an administration fee 
                assessed in accordance with paragraph (2) and any 
                additional services fee charged in accordance with 
                paragraph (3)'' before the period; and
                    (C) by adding after and below the end the 
                following:
    ``(2)(A) The Secretary shall assess each State an administration 
fee in an amount equal to--
            ``(i) the number of supplementary payments made by the 
        Secretary on behalf of the State under this section for any 
        month in a fiscal year; multiplied by
            ``(ii) the applicable rate for the fiscal year.
    ``(B) As used in subparagraph (A), the term `applicable rate' 
means--
            ``(i) for fiscal year 1994, $1.67;
            ``(ii) for fiscal year 1995, $3.33;
            ``(iii) for fiscal year 1996, $5.00; and
            ``(iv) for fiscal year 1997 and each succeeding fiscal 
        year, $5.00, or such different rate as the Secretary determines 
        pursuant to criteria established in regulations is appropriate 
        for the State, taking into account the complexity of the 
        State's supplementary payment program.
    ``(C) All fees collected pursuant to this paragraph shall be 
transferred to the United States at the same time that amounts for such 
supplementary payments are required to be so transferred.
    ``(3)(A) The Secretary shall charge a State an additional services 
fee if, at the request of the State, the Secretary provides additional 
services beyond the level customarily provided, in the administration 
of State supplementary payments pursuant to this section.
    ``(B) The additional services fee shall be in an amount that the 
Secretary determines is necessary to cover all costs (including 
indirect costs) incurred by the Federal Government in furnishing the 
additional services referred to in subparagraph (A).
    ``(C) The additional services fee shall be payable in advance or by 
way of reimbursement.
    ``(4) All administration fees and additional services fees 
collected pursuant to this subsection shall be deposited in the general 
fund of the Treasury of the United States as miscellaneous receipts.''.
            (2) Mandatory state supplementary payments.--Section 
        212(b)(3) of Public Law 93-66 (42 U.S.C. 1382 note) is 
        amended--
                    (A) by inserting ``(A)'' after ``(3)'';
                    (B) by inserting ``, plus an administration fee 
                assessed in accordance with subparagraph (B) and any 
                additional services fee charged in accordance with 
                subparagraph (C)'' before the period; and
                    (C) by adding after and below the end the 
                following:
    ``(B)(i) The Secretary shall assess each State an administration 
fee in an amount equal to--
            ``(I) the number of supplementary payments made by the 
        Secretary on behalf of the State under this subsection for any 
        month in a fiscal year; multiplied by
            ``(II) the applicable rate for the fiscal year.
    ``(ii) As used in clause (i), the term `applicable rate' means--
            ``(I) for fiscal year 1994, $1.67;
            ``(II) for fiscal year 1995, $3.33;
            ``(III) for fiscal year 1996, $5.00; and
            ``(IV) for fiscal year 1997 and each succeeding fiscal 
        year, $5.00, or such different rate as the Secretary determines 
        pursuant to regulations established in regulations is 
        appropriate for the State, taking into account the complexity 
        of the State's supplementary payment program.
    ``(iii) All fees collected pursuant to this subparagraph shall be 
transferred to the United States at the same time that amounts for such 
supplementary payments are required to be so transferred.
    ``(C)(i) The Secretary shall charge a State an additional services 
fee if, at the request of the State, the Secretary provides additional 
services beyond the level customarily provided, in the administration 
of State supplementary payments pursuant to this subsection.
    ``(ii) The additional services fee shall be in an amount that the 
Secretary determines is necessary to cover all costs (including 
indirect costs) incurred by the Federal Government in furnishing the 
additional services referred to in clause (i).
    ``(iii) The additional services fee shall be payable in advance or 
by way of reimbursement.
    ``(D) All administration fees and additional services fees 
collected pursuant to this paragraph shall be deposited in the general 
fund of the Treasury of the United States as miscellaneous receipts.''.
    (b) Effective Date.--The amendments made by this section shall 
apply to supplementary payments made pursuant to section 1616(a) of the 
Social Security Act or section 212(a) of Public Law 93-66 for any 
calendar month beginning after September 30, 1993, and to services 
furnished after such date, regardless of whether regulations to 
implement such amendments have been promulgated by such date, or 
whether any agreement entered into under such section 1616(a) or such 
section 212(a) has been modified.

SEC. 13252. EXCLUSION FROM INCOME OF STATE RELOCATION ASSISTANCE.

    Section 5035(c) of the Omnibus Budget Reconciliation Act of 1990 
(42 U.S.C. 1382a note; 104 Stat. 1388-225) is amended--
            (1) by striking ``The amendments made by this section'' and 
        inserting ``(1) The amendments made by subsection (b)''; and
            (2) by adding at the end the following:
    ``(2) The amendments made by subsection (a) shall apply with 
respect to benefits for calendar months beginning on or after May 1, 
1991.''.

SEC. 13253. PREVENTION OF ADVERSE EFFECTS ON ELIGIBILITY FOR, AND 
              AMOUNT OF, BENEFITS WHEN SPOUSE OR PARENT OF BENEFICIARY 
              IS ABSENT FROM THE HOUSEHOLD DUE TO ACTIVE MILITARY 
              SERVICE.

    (a) Absent Person Generally Deemed To Be Living in the Household.--
Section 1614(f) (42 U.S.C. 1382c(f)) is amended by adding at the end 
the following:
    ``(4) For purposes of paragraphs (1) and (2), a spouse or parent 
(or spouse of such a parent) who is absent from the household in which 
the individual lives due solely to a duty assignment as a member of the 
Armed Forces on active duty shall, in the absence of evidence to the 
contrary, be deemed to be living in the same household as the 
individual.''.
    (b) Exclusion From Income of Hazardous Duty Pay Received While in 
Active Military Service.--Section 1612(b) (42 U.S.C. 1382a(b)) is 
amended--
            (1) in paragraph (18), by striking ``and'' the 2nd place 
        such term appears;
            (2) in paragraph (19), by striking the period and inserting 
        ``; and''; and
            (3) by adding at the end the following:
            ``(20) special pay received pursuant to section 310 of 
        title 37, United States Code.''.
    (c) Effective Date.--The amendments made by this section shall take 
effect on the 1st day of the 2nd month that begins after the date of 
the enactment of this Act.

SEC. 13254. ELIGIBILITY FOR CHILDREN OF ARMED FORCES PERSONNEL RESIDING 
              OUTSIDE THE UNITED STATES OTHER THAN IN FOREIGN 
              COUNTRIES.

    (a) In General.--Section 1614(a)(1)(B)(ii) (42 U.S.C. 
1382c(a)(1)(B)(ii)) is amended by striking ``the District of Columbia'' 
and all that follows to the period and inserting ``and who, for the 
month before the parent reported for such assignment, received a 
benefit under this title''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
take effect on October 1, 1993.

SEC. 13255. DEFINITION OF DISABILITY FOR CHILDREN UNDER AGE 18 APPLIED 
              TO ALL INDIVIDUALS UNDER AGE 18.

    (a) In General.--Section 1614(a)(3)(A) (42 U.S.C. 1382c(a)(3)(A)) 
is amended by striking ``a child'' and inserting ``an individual''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to determinations made on or after the date of the enactment of 
this Act.

SEC. 13256. VALUATION OF CERTAIN IN-KIND SUPPORT AND MAINTENANCE WHEN 
              THERE IS A COST OF LIVING ADJUSTMENT IN BENEFITS.

    (a) In General.--Section 1611(c) (42 U.S.C. 1382(c)) is amended--
            (1) in paragraph (1), by striking ``and (5)'' and inserting 
        ``(5), and (6)''; and
            (2) by redesignating paragraphs (6) and (7) as paragraphs 
        (7) and (8), respectively; and
            (3) by inserting after paragraph (5) the following:
    ``(6) The dollar amount in effect under subsection (b) as a result 
of any increase in benefits under this title by reason of section 1617 
shall be used to determine the value of any in-kind support and 
maintenance required to be taken into account in determining the 
benefit payable under this title to an individual (and the eligible 
spouse, if any, of the individual) for the 1st 2 months for which the 
increase in benefits applies.''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
apply to benefits paid for months after the calendar year 1993.

SEC. 13257. EXCLUSION FROM INCOME OF CERTAIN AMOUNTS RECEIVED BY 
              INDIANS FROM INTERESTS HELD IN TRUST.

    (a) In General.--Section 8 of the Act of October 19, 1973, (25 
U.S.C. 1408) is amended by inserting ``, and the first $2,000 per year 
of income received by individual Indians that is derived from such 
interests shall not be considered income,'' after ``resource''.
    (b) Effective Date.--The amendment made by this section shall take 
effect on January 1, 1993.

           CHAPTER 4--AID TO FAMILIES WITH DEPENDENT CHILDREN

SEC. 13261. 50 PERCENT FEDERAL MATCH OF STATE ADMINISTRATIVE COSTS.

    (a) In General.--Section 403(a)(3) (42 U.S.C. 603(a)(3)) is amended 
by striking ``the sum of'' and all that follows through the end of 
subparagraph (D) and inserting ``50 percent of the total amounts 
expended during such quarter as the Secretary has found necessary for 
the proper and efficient administration of the State plan (including 
any amounts expended by the State to carry out initial evaluations 
under section 486(a)),''.
    (b) Optional Use of Certain Procedures to Verify Immigration Status 
of AFDC Applicants.--Section 1137(d) (42 U.S.C. 1320b-7(d)) is 
amended--
            (1) in each of paragraphs (3) and (4)(B)(i), by inserting 
        ``(or, in the case of the program specified in subsection 
        (b)(1), may)'' after ``shall''; and
            (2) in paragraph (4), by inserting ``(if required)'' after 
        ``verified''.
    (c) Effective Date.--
            (1) In general.--Except as provided in paragraph (2), the 
        amendments made by this section shall apply to payments made 
        for calendar quarters beginning on or after April 1, 1994.
            (2) Delayed applicability to certain states.--
                    (A) In general.--The Secretary of Health and Human 
                Services may delay the applicability to a qualified 
                State of the amendments made by subsection (a) until 
                the 1st calendar quarter that begins after the close of 
                the 1st regular session of the State legislature that 
                begins after the date of the enactment of this section.
                    (B) Qualified state defined.--As used in 
                subparagraph (A), the term ``qualified State'' means a 
                State that meets such criteria as the Secretary shall 
                establish and apply uniformly, including whether the 
                State legislature meets biennially and does not have a 
                regular session scheduled in calendar year 1994.

SEC. 13262. DELAY IN EFFECTIVE DATE OF PENALTY FOR FAILURE TO MEET 
              REQUIRED PARTICIPATION RATE FOR UNEMPLOYED PARENTS IN THE 
              JOBS PROGRAM.

    Section 403(l)(4)(B) (42 U.S.C. 603(l)(4)(B)) is amended--
            (1) in clause (i), by striking ``1994'' and inserting 
        ``1995'';
            (2) in clause (ii), by striking ``1995'' and inserting 
        ``1996'';
            (3) in clause (iii), by striking ``1996'' and inserting 
        ``1997''; and
            (4) in clause (iv), by striking ``1997 and 1998'' and 
        inserting ``1998 and 1999''.

SEC. 13263. REPORT TO THE CONGRESS WITH RESPECT TO PERFORMANCE 
              STANDARDS IN THE JOBS PROGRAM.

    Section 487(a) (42 U.S.C. 687(a)) is amended--
            (1) by striking ``3'' and inserting ``4'';
            (2) in paragraph (1), by inserting ``criteria for'' after 
        ``develop'';
            (3) in paragraph (2), by striking ``for'' and inserting 
        ``with respect to''; and
            (4) in the 2nd sentence, by striking ``under this 
        subsection'' and inserting ``with respect to the program under 
        this part''.

SEC. 13264. MEASUREMENT AND REPORTING OF WELFARE PARTICIPATION.

    (a) Congressional Policy.--The Congress hereby declares that--
            (1) it is the policy and responsibility of the Federal 
        Government to reduce the rate at which, and the degree to 
        which, families depend on income from welfare programs, and the 
        duration of welfare participation, to assist families toward 
        self-sufficiency, and to increase the living standards of low-
        income families, consistent with other essential national 
        goals;
            (2) it is the policy of the United States to strengthen 
        families and improve the life prospects of their children, to 
        ensure that children grow up in families that are economically 
        self-sufficient, and to underscore the responsibility of 
        parents to support their children;
            (3) the Federal Government should help welfare recipients 
        as well as individuals at risk of welfare participation to 
        improve their education and job skills, to obtain access to 
        high quality child care and other necessary support services, 
        and to take such other steps as may assist them to meet their 
        responsibilities to become financially independent; and
            (4) it is the purpose of this section to provide the public 
        with generally accepted measures of welfare participation so 
        that the public can track such participation over time and 
        determine whether progress is being made in reducing the rate 
        at which, and the degree to which, families depend on income 
        from welfare programs, and the duration of welfare 
        participation.
    (b) Development of Welfare Participation Measures and Predictors.--
            (1) In general.--The Secretary of Health and Human Services 
        (in this section referred to as the ``Secretary'') in 
        consultation with the Secretary of Agriculture shall develop--
                    (A) measures of--
                            (i) the rate at which, and the degree to 
                        which, families depend on income from welfare 
                        programs; and
                            (ii) the duration of welfare participation; 
                        and
                    (B) predictors of welfare participation.
            (2) Interim report.--Not later than 2 years after the date 
        of the enactment of this section, the Secretary shall provide 
        an interim report containing conclusions resulting from such 
        development, to--
                    (A) the Committee on Ways and Means of the House of 
                Representatives;
                    (B) the Committee on Education and Labor of the 
                House of Representatives;
                    (C) the Committee on Agriculture of the House of 
                Representatives;
                    (D) the Committee on Energy and Commerce of the 
                House of Representatives;
                    (E) the Committee on Finance of the Senate;
                    (F) the Committee on Labor and Human Resources of 
                the Senate; and
                    (G) the Committee on Agriculture, Nutrition, and 
                Forestry of the Senate.
    (c) Advisory Board on Welfare Participation.--
            (1) Establishment.--There is established an Advisory Board 
        on Welfare Participation (in this section referred to as the 
        ``Board'').
            (2) Composition.--The Board shall be composed of 12 members 
        with equal numbers to be appointed by the House of 
        Representatives, the Senate, and the President. The Board shall 
        be composed of experts in the fields of welfare research and 
        statistical methodology, representatives of State and local 
        welfare agencies, and organizations concerned with welfare 
        issues.
            (3) Vacancies.--Any vacancy occurring in the membership of 
        the Board shall be filled in the same manner as the original 
        appointment for the position being vacated. The vacancy shall 
        not affect the power of the remaining members to execute the 
        duties of the Board.
            (4) Duties.--Duties of the Board shall include--
                    (A) providing advice and recommendations to the 
                Secretary on the development of measures of the rate at 
                which, and the degree to which, families depend on 
                income from welfare programs, and the duration of 
                welfare participation; and
                    (B) providing advice on the development and 
                presentation of the report required by subsection (d).
            (5) Travel expenses.--Members of the Board shall not be 
        compensated, but shall receive travel expenses, including per 
        diem in lieu of subsistence, at rates authorized for employees 
        of agencies under subchapter I of chapter 57 of title 5, United 
        States Code, for each day the member is engaged in the 
        performance of duties away from the home or regular place of 
        business of the member.
            (6) Detail of federal employees.--The Secretary shall 
        detail, without reimbursement, any of the personnel of the 
        Department of Health and Human Services to the Board to assist 
        the Board in carrying out its duties. Any detail shall not 
        interrupt or otherwise affect the civil service status or 
        privileges of the Federal employee.
            (7) Voluntary service.--Notwithstanding section 1342 of 
        title 31, United States Code, the Board may accept the 
        voluntary services provided by a member of the Board.
            (8) Termination of board.--The Board shall be terminated at 
        such time as the Secretary determines the duties described in 
        subsection (c)(4) have been completed, but in any case prior to 
        the submission of the 1st report required by subsection (d).
    (d) Annual Welfare Participation Reports.--
            (1) Preparation.--The Secretary shall prepare annual 
        reports on welfare participation in the United States.
            (2) Coverage.--The report shall include analysis of 
        families and individuals receiving assistance under means-
        tested benefit programs, including the program of aid to 
        families with dependent children under part A of title IV of 
        the Social Security Act (42 U.S.C. 601 et seq.), the food stamp 
        program under the Food Stamp Act of 1977 (7 U.S.C. 2011 et 
        seq.), and the supplemental security income program under title 
        XVI of the Social Security Act (42 U.S.C. 1381 et seq.), or as 
        general assistance under programs administered by State and 
        local governments.
            (3) Contents.--Each such report shall set forth, for each 
        means-tested benefit program described in paragraph (2)--
                    (A) measures of--
                            (i) the rate at which, and the degree to 
                        which, families depend on income from welfare 
                        programs; and
                            (ii) the duration of welfare participation;
                    (B) trends in the measures;
                    (C) predictors of welfare participation;
                    (D) the causes of welfare participation;
                    (E) patterns of multiple program participation;
                    (F) such other information as the Secretary deems 
                relevant; and
                    (G) such recommendations for legislation, which 
                shall not include proposals to reduce eligibility 
                levels or impose barriers to program access, as the 
                Secretary may determine to be necessary or desirable to 
                reduce--
                            (i) the rate at which, and the degree to 
                        which, families depend on income from welfare 
                        programs; and
                            (ii) the duration of welfare participation.
            (4) Submission.--The Secretary shall submit such reports 
        not later than 3 years after the date of the enactment of this 
        section, and annually thereafter, to the committees specified 
        in subsection (b)(2). Each such report shall be transmitted 
        during the 1st 60 days of each regular session of the Congress.

SEC. 13265. NEW HOPE DEMONSTRATION PROJECT.

    (a) In General.--The Secretary of Health and Human Services (in 
this section referred to as the ``Secretary'') shall provide for a 
demonstration project for a qualified program to be conducted in 
Milwaukee, Wisconsin, in accordance with this section.
    (b) Payments.--For each calendar quarter in which there is a 
qualified program approved under this subsection, the Secretary shall 
pay to the operator of the qualified program, for no more than 20 
calendar quarters, an amount equal to the aggregate amount that would 
otherwise have been payable to the State with respect to participants 
in the program for such calendar quarter, in the absence of the 
program, for cash assistance and child care under part A of title IV of 
the Social Security Act and for administrative expenses related to such 
assistance. In calculating the amount of such payment, the expenses of 
the program incurred in evaluating the effects of the program may be 
treated as amounts necessary for the proper and efficient 
administration of the program, for purposes of part A of title IV of 
such Act.
    (c) Demonstration Project Described.--For purposes of this section, 
the term ``qualified program'' means a program operated--
            (1) by The New Hope Project, Inc., a private, not-for-
        profit corporation incorporated under the laws of the State of 
        Wisconsin (in this section referred to as the ``operator''), 
        which offers low-income residents of Milwaukee, Wisconsin, 
        employment, wage supplements, child care, health care, and 
        counseling and training for job retention or advancement; and
            (2) in accordance with an application submitted by the 
        operator of the program and approved by the Secretary based on 
        the Secretary's determination that the application satisfies 
        the requirements of subsection (d).
    (d) Contents of Application.--The operator of the qualified program 
shall provide, in its application to conduct a demonstration project 
for the program, that the following terms and conditions will be met:
            (1) The operator will develop and implement an evaluation 
        plan designed to provide reliable information on the impact and 
        implementation of the program. The evaluation plan will include 
        adequately sized groups of project participants and control 
        groups assigned at random.
            (2) The operator will develop and implement a plan 
        addressing the services and assistance to be provided by the 
        program, the timing and determination of payments from the 
        Secretary to the operator of the program, and the roles and 
        responsibilities of the Secretary and the operator with respect 
        to meeting the requirements of this paragraph.
            (3) The operator will specify a methodology for determining 
        expenditures to be paid to the operator by the Secretary, with 
        assistance from the Secretary in calculating the amount that 
        would otherwise have been payable to the State in the absence 
        of the program, pursuant to subsection (b).
            (4) The operator will issue an interim and final report on 
        the results of the evaluation described in paragraph (1) to the 
        Secretary at such times as required by the Secretary.
    (e) Effective Date.--This section shall take effect on the 1st day 
of the 1st calendar quarter that begins after the date of enactment of 
this Act.

SEC. 13266. DELAY IN REQUIREMENT THAT OUTLYING AREAS OPERATE AN AFDC-UP 
              PROGRAM.

    Section 401(g)(2) of the Family Support Act of 1988 (42 U.S.C. 602 
note; 102 Stat. 2396) is amended by striking ``October 1, 1992'' and 
inserting ``the date of the repeal of the limitations contained in 
section 1108(a) of the Social Security Act on payments to such 
jurisdictions for purposes of making maintenance payments under parts A 
and E of title IV of such Act''.

SEC. 13267. ADULT IN FAMILY OR HOUSEHOLD ALLOWED TO ATTEST TO 
              CITIZENSHIP STATUS OF FAMILY OR HOUSEHOLD MEMBERS.

    (a) In General.--Section 1137(d)(1)(A) (42 U.S.C. 1320b-7(d)(1)(A)) 
is amended--
            (1) by inserting ``(i)'' after ``(1)(A)'';
            (2) by inserting ``(other than the aid to families with 
        dependent children program under part A of title IV of this 
        Act)'' after ``any program listed in subsection (b)''; and
            (3) by adding at the end the following:
            ``(ii) The State shall require, as a condition of an 
        individual's eligibility for benefits under the aid to families 
        with dependent children program under part A of title IV of 
        this Act, a declaration in writing, under penalty of perjury--
                    ``(I) in the case of an individual who is an adult 
                member of a family or household applying for or 
                receiving such benefits, by such individual or another 
                adult member of such family or household on such 
                individual's behalf;
                    ``(II) in the case of an individual who is a child, 
                by an adult on the individual's behalf; or
                    ``(III) in the case of an individual born into a 
                family or household receiving such benefits, by an 
                adult member of such individual's family or household 
                on the individual's behalf no later than the next 
                redetermination of eligibility of such family or 
                household following the birth of such individual,
        stating whether the individual is a citizen or national of the 
        United States, and, if that individual is not a citizen or 
        national of the United States, that the individual is in a 
        satisfactory immigration status.''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
become effective with respect to benefits provided on or after October 
1, 1993.

SEC. 13268. INCREASE IN STEPPARENT INCOME DISREGARD.

    (a) In General.--Section 402(a)(31) (42 U.S.C. 602(a)(31)) is 
amended by striking ``$75'' and inserting ``$90''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
take effect on October 1, 1993, and shall apply to payments under part 
A of title IV of the Social Security Act for fiscal year 1994 and such 
payments for succeeding fiscal years.

SEC. 13269. EXTENSION OF NEW YORK STATE CHILD SUPPORT DEMONSTRATION 
              PROGRAM.

    Section 9122(g)(1) of the Omnibus Budget Reconciliation Act of 1987 
(42 U.S.C. 602 note; 101 Stat. 1330-312) is amended by striking 
``five'' and inserting ``10''.

SEC. 13270. EARLY CHILDHOOD DEVELOPMENT PROJECTS.

    Section 501(a) of the Family Support Act of 1988 (42 U.S.C. 1315 
note; 102 Stat. 2400) is amended by adding at the end the following:
    ``(4) For grants to States to conduct demonstration projects under 
this subsection, there are authorized to be appropriated not to exceed 
$3,000,000 for each of the fiscal years 1994 through 1998.''.

                   CHAPTER 5--UNEMPLOYMENT INSURANCE

SEC. 13271. TREATMENT OF SHORT-TIME COMPENSATION PROGRAMS.

    (a) General Rule.--Section 3306 of the Internal Revenue Code of 
1986 is amended by adding at the end thereof the following new 
subsection:
    ``(t) Short-Time Compensation Program.--For purposes of this 
chapter, the term `short-time compensation program' means a program 
under which--
            ``(1) individuals whose workweeks have been reduced by at 
        least 10 percent are eligible for unemployment compensation;
            ``(2) the amount of unemployment compensation payable to 
        any such individual is a pro rata portion of the unemployment 
        compensation which would be payable to the individual if the 
        individual were totally unemployed;
            ``(3) eligible employees are not required to meet the 
        availability for work or work search test requirements while 
        collecting short-time compensation benefits, but are required 
        to be available for their normal workweek;
            ``(4) eligible employees may participate in an employer-
        sponsored training program to enhance jobs skills if such 
        program has been approved by the State agency;
            ``(5) there is a reduction in the number of hours worked by 
        employees in lieu of temporary layoffs;
            ``(6) there is a plan of an employer (or an employers 
        association which is party to a collective bargaining 
        agreement) approved by the State agency consisting of factors 
        in this subsection or other factors as the Secretary of Labor 
        may find relevant; and
            ``(7) the employer continues to provide health benefits and 
        pension benefits under a pension plan (as defined in section 
        3(35) of the Employee Retirement Income Security Act of 1974) 
        to any employee whose workweek is reduced under such plan.
A short-time compensation program may also contain such other factors 
as the Secretary of Labor finds relevant.''
    (b) Conforming Amendments.--
            (1) Subparagraph (E) of section 3304(a)(4) of such Code is 
        amended to read as follows:
                    ``(E) amounts may be withdrawn for the payment of 
                short-time compensation under a short-time compensation 
                program approved by the Secretary of Labor:''.
            (2) Paragraph (4) of section 3306(f) of such Code is 
        amended to read as follows:
            ``(4) amounts may be withdrawn for the payment of short-
        time compensation under a short-time compensation program 
        approved by the Secretary of Labor.''
            (3) Section 303(a)(5) of the Social Security Act is amended 
        by striking ``the payment of short-time compensation under a 
        plan approved by the Secretary of Labor'' and inserting ``the 
        payment of short-time compensation under a short-time 
        compensation program (as defined in section 3306(t) of the 
        Internal Revenue Code of 1986) approved by the Secretary of 
        Labor''.

SEC. 13272. TECHNICAL AMENDMENT TO UNEMPLOYMENT TRUST FUND.

    Paragraph (1) of section 905(b) of the Social Security Act is 
amended to read as follows:
    ``(b)(1) Except as provided in paragraph (3), the Secretary of the 
Treasury shall transfer (as of the close of each month), from the 
employment security administration account to the extended unemployment 
compensation account established by subsection (a), an amount equal to 
20 percent of the amount by which--
            ``(A) the transfers to such account pursuant to section 
        901(b)(2) during such month, exceed
            ``(B) the payments during such month from the employment 
        security administration account pursuant to section 901(b)(3) 
        and (d).
If for any month the payments referred to in subparagraph (B) exceed 
the transfers referred to in subparagraph (A), proper adjustments shall 
be made in the amounts subsequently transferred.''

SEC. 13273. EXTENSION OF REPORTING DATE FOR ADVISORY COUNCIL.

    In the case of the first Advisory Council on Unemployment 
Compensation established under section 908 of the Social Security Act, 
subsection (f) of such section 908 shall be applied--
            (1) by substituting ``3rd year'' for ``2d year'' in 
        paragraph (1), and
            (2) by substituting ``February 1, 1995'' for ``February 1, 
        1994'' in paragraph (2).

SEC. 13274. CLARIFICATION OF EMERGENCY UNEMPLOYMENT BENEFITS 
              PROVISIONS.

    (a) In General.--Subclauses (II) and (III) of section 
102(b)(2)(A)(v) of the Emergency Unemployment Compensation Act of 1991 
are amended to read as follows:
                                    ``(II) The requirements of this 
                                subclause are met for any week if the 
                                national rate of total unemployment 
                                (seasonally adjusted) for each of the 2 
                                most recent calendar months (not 
                                averaged) for which data are published 
                                before the close of such week is less 
                                than 7 percent, and if the requirements 
                                of subclause (III) are not met for such 
                                week.
                                    ``(III) The requirements of this 
                                subclause are met for any week if the 
                                national rate of total unemployment 
                                (seasonally adjusted) for each of the 2 
                                most recent calendar months (not 
                                averaged) for which data are published 
                                before the close of such week is less 
                                than 6.8 percent.''
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply as if included in the amendments made by section 101(b) of the 
Unemployment Compensation Amendments of 1992.

SEC. 13275. MODIFICATIONS TO EXTENDED UNEMPLOYMENT PROGRAM.

    (a) Increase in Reimbursement Rate.--Subsection (a) of section 204 
of the Federal-State Extended Unemployment Compensation Act of 1970 is 
amended by striking ``one-half'' and inserting ``75 percent''.
    (b) Repeal of Special Eligibility Requirements.--Subsection (a) of 
section 202 of such Act is amended--
            (1) by striking paragraphs (3), (4), and (7),
            (2) by redesignating paragraphs (5) and (6) as paragraphs 
        (3) and (4), respectively, and
            (3) by striking ``paragraphs (3), (4), and (5)'' in 
        paragraph (4) (as redesignated by paragraph (1) of this 
        subsection) and inserting ``paragraph (3)''.
    (c) Effective Date.--
            (1) In general.--The amendments made by this section shall 
        apply to weeks beginning after October 2, 1993.
            (2) Special rule.--In the case of any State the legislature 
        of which has not been in session for at least 30 calendar days 
        (whether or not successive) between the date of the enactment 
        of this Act and October 1, 1993, the amendment made by 
        subsection (b) shall not be a requirement of the State law of 
        such State before the date 30 calendar days after the 1st day 
        on which such legislature is in session on or after October 1, 
        1993.

SEC. 13276. EXTENSION OF CURRENT FEDERAL UNEMPLOYMENT RATE.

    Section 3301 of the Internal Revenue Code of 1986 is amended--
            (1) by striking ``1996'' in paragraph (1) and inserting 
        ``1998'', and
            (2) by striking ``1997'' in paragraph (2) and inserting 
        ``1999''.

SEC. 13277. DISCLOSURE OF INFORMATION TO RAILROAD RETIREMENT BOARD.

    Section 6103(l)(1)(C) of the Internal Revenue Code of 1986 is 
amended to read as follows:
                    ``(C) taxes imposed by chapters 22 and 23A, to the 
                Railroad Retirement Board for purposes of its 
                administration of the Railroad Retirement and Railroad 
                Unemployment Insurance Acts.''.

                    CHAPTER 6--TECHNICAL PROVISIONS

SEC. 13281. CORRECTIONS RELATED TO THE INCOME SECURITY AND HUMAN 
              RESOURCES PROVISIONS OF THE OMNIBUS BUDGET RECONCILIATION 
              ACT OF 1990.

    (a) Amendment Related to Section 5035(a)(2).--Section 5035(a)(2) of 
the Omnibus Budget Reconciliation Act of 1990 (Public Law 101-508) is 
amended by striking ``a semicolon'' and inserting ```; and'''.
    (b) Repeal of Provision Inadvertently Included.--Section 5057 of 
the Omnibus Budget Reconciliation Act of 1990 (Public Law 101-508), and 
the amendment made by such section, are hereby repealed, and section 
1139(d) of the Social Security Act shall be applied and administered as 
if such section 5057 had never been enacted.
    (c) Amendment Related to Section 5105(d)(1)(B).--Section 
5105(d)(1)(B) of the Omnibus Budget Reconciliation Act of 1990 (Public 
Law 101-508; 104 Stat. 1388-266) is amended to read as follows:
                    ``(B) Title xvi.--Section 1631(a)(2)(F) (42 U.S.C. 
                1383(a)(2)(F)), as so redesignated by subsection (c)(2) 
                of this section, is amended to read as follows:
    ```(F) The Secretary shall include as a part of the annual report 
required under section 704 information with respect to the 
implementation of the preceding provisions of this paragraph, 
including--
            ```(i) the number of cases in which the representative 
        payee was changed;
            ```(ii) the number of cases discovered where there has been 
        a misuse of funds;
            ```(iii) how any such cases were dealt with by the 
        Secretary;
            ```(iv) the final disposition of such cases (including any 
        criminal penalties imposed); and
            ```(v) such other information as the Secretary determines 
        to be appropriate.'.''.
    (d) Amendment Related to Section 5105(a)(1)(B).--The 2nd paragraph 
of section 1631(a) (42 U.S.C. 1383(a)) is amended by striking ``(A)(i) 
Payments'' and inserting ``(2)(A)(i) Payments''.
    (e) Amendments Related to Section 5105(b).--Section 1631(a)(2)(C) 
(42 U.S.C. 1383(a)(2)(C)) is amended--
            (1) by striking clause (ii);
            (2) by redesignating clauses (iii), (iv), and (v) as 
        clauses (ii), (iii), and (iv), respectively; and
            (3) in clause (iv) (as so redesignated), by striking 
        ``(iii), and (iv)'' and inserting ``and (iii)''.
    (f) Amendments Related to Section 5107(a)(2)(B).--Section 
1631(c)(1)(B) (42 U.S.C. 1383(c)(1)(B)) is amended by striking 
``paragraph (1)'' each place such term appears and inserting 
``subparagraph (A)''.
    (g) Amendment Related to Section 5109(a)(2).--Section 1631 (42 
U.S.C. 1383) is amended by redesignating the subsection (n) added by 
section 5109(a)(2) of the Omnibus Budget Reconciliation Act of 1990, as 
subsection (o).
    (h) Amendments Related to Section 11115(b)(2).--Section 11115(b)(2) 
of the Omnibus Budget Reconciliation Act of 1990 (Public Law 101-508) 
is amended--
            (1) in subparagraph (A), by striking ``paragraph (8)'' and 
        inserting ``paragraph (9)'';
            (2) in subparagraph (B), by striking ``paragraph (9)'' and 
        inserting ``paragraph (10)''; and
            (3) in subparagraph (C), by redesignating the new paragraph 
        added thereby as paragraph (11).
    (i) Amendment Related to Section 13101(d)(2).--Section 256(k)(2)(A) 
of the Balanced Budget and Emergency Deficit Control Act of 1985 is 
amended--
            (1) by striking ``--'' the 2nd place it appears and all 
        that follows through ``(I)''; and
            (2) by striking ``; or'' and all that follows through 
        ``(II)'' and inserting ``, except that a State may not be 
        allotted an amount under this subparagraph that exceeds''.
    (j) Effective Date.--Each amendment made by this section shall take 
effect as if included in the provision of the Omnibus Budget 
Reconciliation Act of 1990 to which the amendment relates at the time 
such provision became law.

SEC. 13282. TECHNICAL CORRECTIONS RELATED TO THE HUMAN RESOURCE AND 
              INCOME SECURITY PROVISIONS OF THE OMNIBUS BUDGET 
              RECONCILIATION ACT OF 1989.

    (a) Amendment Relating to Section 8004(a).--Section 408(m)(2)(A) 
(42 U.S.C. 608(m)(2)(A)) is amended by striking ``a fiscal'' and 
inserting ``the fiscal''.
    (b) Amendment Relating to Section 8006(a).--Section 473(a)(6)(B) 
(42 U.S.C. 673(a)(6)(B)) is amended by striking ``474(a)(3)(B)'' and 
inserting ``474(a)(3)(C)''.
    (c) Amendment Relating to Section 8007(b)(3).--Subparagraph (D) of 
section 475(5) (42 U.S.C. 675(5)(D)) is amended by moving such 
subparagraph 2 ems to the right so that the left margin of such 
subparagraph is aligned with the left margin of subparagraph (C) of 
such section.
    (d) Effective Date.--Each amendment made by this section shall take 
effect as if the amendment had been included in the provision of the 
Omnibus Budget Reconciliation Act of 1989 to which the amendment 
relates, at the time the provision became law.

SEC. 13283. ELIMINATION OF OBSOLETE PROVISIONS RELATING TO TREATMENT OF 
              THE EARNED INCOME TAX CREDIT.

    (a) Treatment of EITC as Earned Income.--Section 1612(a)(1) (42 
U.S.C. 1382a(a)(1)) is amended by striking subparagraph (C) and by 
redesignating subparagraphs (D) and (E) as subparagraphs (C) and (D), 
respectively.
    (b) Adjustment of Benefits Due to Treatment of EITC as Earned 
Income.--Section 1631(b) (42 U.S.C. 1383(b)) is amended by striking 
paragraph (3) and by redesignating paragraphs (4) and (5) as paragraphs 
(3) and (4), respectively.

SEC. 13284. REDESIGNATION OF CERTAIN PROVISIONS.

    Section 1631(e)(6) (42 U.S.C. 1383(e)(6)) is amended by 
redesignating subparagraphs (1) and (2) as subparagraphs (A) and (B), 
respectively.

                      Subtitle C--Medicare Program

SEC. 13400. REFERENCES IN SUBTITLE; TABLE OF CONTENTS OF SUBTITLE.

    (a) Amendments to Social Security Act.--Except as otherwise 
specifically provided, whenever in this subtitle an amendment is 
expressed in terms of an amendment to or repeal of a section or other 
provision, the reference shall be considered to be made to that section 
or other provision of the Social Security Act.
    (b) References to OBRA.--In this subtitle, the terms ``OBRA-1986'', 
``OBRA-1987'', ``OBRA-1989'', and ``OBRA-1990'' refer to the Omnibus 
Budget Reconciliation Act of 1986 (Public Law 99-509), the Omnibus 
Budget Reconciliation Act of 1987 (Public Law 100-203), the Omnibus 
Budget Reconciliation Act of 1989 (Public Law 101-239), and the Omnibus 
Budget Reconciliation Act of 1990 (Public Law 101-508), respectively.
    (c) Table of Contents of Subtitle.--The table of contents of this 
subtitle is as follows:

Sec. 13400. References in subtitle; table of contents of subtitle.
  subchapter a--elimination of inflation update for services provided 
                              under part a
Sec. 13401. Inpatient hospital services and hospice care.
Sec. 13402. Limits on per diem routine service costs for extended care 
           subchapter b--other provisions relating to part a
Sec. 13411. Wage index provisions.
Sec. 13412. Transition for hospital outlier thresholds.
Sec. 13413. Essential access community hospital (EACH) amendments.
Sec. 13414. Rural health transition grant program extension.
Sec. 13415. Regional referral center extension.
Sec. 13416. Medicare-dependent, small rural hospital payment extension.
Sec. 13417. Extension of regional floor.
Sec. 13418. Extension of rural hospital demonstration.
Sec. 13419. Hemophilia pass-through extension.
Sec. 13420. State hospital payment programs.
Sec. 13421. Psychology services in hospitals.
Sec. 13422. Graduate medical education payments in hospital-owned 
                            community health centers.
Sec. 13423. Treatment of certain military facilities.
Sec. 13424. Epilepsy DRG.
Sec. 13425. Skilled nursing facility wage index.
Sec. 13426. Hospice notification to beneficiaries.
Sec. 13427. Reduction in part A premium for certain individuals with 30 
                            or more quarters of Social Security 
                            coverage.
Sec. 13428. Periodic updates to salary equivalency guidelines for 
                            physical therapy and respiratory therapy 
                            services.
Sec. 13429. Extension of deadline for application for geographic 
                            classification for certain reclassified 
                            hospitals.
Sec. 13430. Clarification of DRG payment window expansion; 
                            miscellaneous and technical corrections.
             subchapter a--elimination of inflation update
Sec. 13431. Elimination of inflation update for physician and related 
                            professional services.
Sec. 13432. Elimination of cost-of-living adjustments for certain items 
                            and services.
Sec. 13433. Ambulatory surgical center services.
Sec. 13434. Other isubchapter b--physicians' services
Sec. 13441. Reinstating separate payment for the interpretation of 
                            electrocardiograms (EKGs).
Sec. 13442. Payments for new physicians and practitioners.
Sec. 13443. Retaining payment for actual anesthesia time.
Sec. 13444. Geographic cost of practice index refinements.
Sec. 13445. Extra-billing.
Sec. 13446. Relative values for pediatric services.
Sec. 13447. Antigens under physician fee schedule.
Sec. 13448. Administration of claims relating to physicians' services.
Sec. 13449.subchapter c--ambulatory surgical center services
Sec. 13451. Designation of certain hospitals as eye or eye and ear 
                            hospitals.
Sec. 13452. Treatment of intraocular lenses.
Sec. 13453. Techsubchapter d--durable medical equipment
Sec. 13461. Certification of suppliers.
Sec. 13462. Prohibition against carrier forum shopping.
Sec. 13463. Restrictions on certain marketing and sales activities.
Sec. 13464. Anti-kickback clarification.
Sec. 13465. Limitations on beneficiary liability for noncovered 
                            services.
Sec. 13466. Adjustments for inherent reasonableness.
Sec. 13467. Treatment of nebulizers and aspirators.
Sec. 13468. Payment for ostomy supplies and other supplies.
Sec. 13469. Miscellansubchapter e--other provisions.
Sec. 13471. Clarifying payments for medically directed certified 
                            registered nurse anesthetist services.
Sec. 13472. Extension of Alzheimer's disease demonstration projects.
Sec. 13473. Oral cancer drugs.
Sec. 13474. Part B premium for late enrollment.
Sec. 13475. Coverage of services of speech-language pathologists and 
                            audiologists.
Sec. 13476. Extension of municipal health service demonstration 
                            projects.
Sec. 13477. Treatment of certain Indian health programs and facilities 
                            as Federally-qualified health centers.
Sec. 13478. Miscellanesubchapter f--part b premiums.
Sec. 13481. Part B premium.
            Chaptesubchapter a--elimination of updatesand B
Sec. 13501. Elimination of cost-of-living update in per resident 
                            amounts for direct medical education.
Sec. 13502. Elimination of inflation update in cost limits for home 
           subchapter b--medicare secondary payer provisions
Sec. 13511. Extension of transfer of data.
Sec. 13512. 3-year extension of medicare secondary payer to disabled 
                            beneficiaries.
Sec. 13513. 3-year extension of 18-month rule for ESRD beneficiaries.
Sec. 13514. Msubchapter c--physician ownership and referral
Sec. 13521. Application of medicare ban on self-referrals to all 
                            payers.
Sec. 13522. Extension of self-referral ban to additional specified 
                            services.
Sec. 13523. Exceptions for both ownership and compensation 
                            arrangements.
Sec. 13524. Exceptions related only to ownership or investment.
Sec. 13525. Exceptions related only to compensation arrangements.
Sec. 13526. Clarification concerning civil money penalty sanctions.
Sec. 13527. Requirements for group practice.
Sec. 13538. No Federal preemption of more restrictive State laws.
Sec. 13529. Miscellaneous provisions.
Sec. 13530. Effectivesubchapter d--other provisions
Sec. 13551. Direct graduate medical education.
Sec. 13552. Immunosuppressive drug therapy.
Sec. 13553. Reduction in payments for erythropoientin.
Sec. 13554. Qualified medicare beneficiary outreach.
Sec. 13555. Extension of social health maintenance organization 
                            demonstrations.
Sec. 13556. Hospice notification to home health beneficiaries.
Sec. 13557. Interest payments.
Sec. 13558. Peer review organizations.
Sec. 13559. Health maintenance organizations.
Sec. 13560. Medicare administration budget process.
Sec. 13561. Other provisions.
          Chapter 4--Medicare Supplemental Insurance Policies

Sec. 13571. Standards for medicare supplemental insurance policies.
       Chapter 5--Treatment of Certain State Health Care Programs

Sec. 13581. Treatment of certain State health care programs.

                CHAPTER 1--PROVISIONS RELATING TO PART A

  Subchapter A--Elimination of Inflation Update for Services Provided 
                              Under Part A

SEC. 13401. INPATIENT HOSPITAL SERVICES AND HOSPICE CARE.

    Section 1886(b)(3)(B)(iii) (42 U.S.C. 1395ww(b)(3)(B)(iii)) is 
amended--
            (1) by striking ``(iii) For purposes of this subparagraph'' 
        and inserting ``(iii)(I) Except as provided in subclause (II), 
        for purposes of this subparagraph'', and
            (2) by adding at the end the following new subclause:
    ``(II) For purposes of this subparagraph and section 
1814(i)(1)(C)(ii), the `market basket percentage increase', with 
respect to cost reporting periods and discharges occurring in fiscal 
year 1994 or 1995, is 0 percent.''.

SEC. 13402. LIMITS ON PER DIEM ROUTINE SERVICE COSTS FOR EXTENDED CARE 
              SERVICES.

    The Secretary of Health and Human Services shall not provide for 
any increase, on the basis of inflation or changes in the cost of goods 
and services, in the limits on per diem routine service costs for 
extended care services under section 1888 of the Social Security Act 
for cost reporting periods beginning during fiscal year 1994 or fiscal 
year 1995.

           Subchapter B--Other Provisions Relating to Part A

SEC. 13411. WAGE INDEX PROVISIONS.

    (a) Wage Index Hold Harmless Protection.--
            (1) In general.--Section 1886(d)(8)(C) (42 U.S.C. 
        1395ww(d)(8)(C)) is amended by adding at the end the following 
        new clause:
    ``(iv) The application of subparagraph (B) or a decision of the 
Medicare Geographic Classification Review Board or the Secretary under 
paragraph (1)) may not result in a reduction in an urban area's wage 
index if--
            ``(I) the urban area has a wage index below the wage index 
        for rural areas in the State in which it is located; or
            ``(II) the urban area is located in a State that is 
        composed of a single urban area.''.
            (2) No standardized amount adjustment.--The Secretary of 
        Health and Human Services shall not revise the fiscal year 1992 
        or fiscal year 1993 standardized amounts pursuant to 
        subsections (d)(3)(B) and (d)(8)(D) of section 1886 of the 
        Social Security Act to account for the amendment made by 
        paragraph (1).
            (3) Effective date.--The amendment made by paragraph (1) 
        shall apply to discharges occurring--
                    (A) on or after October 1, 1991, in the case of 
                hospitals located in an urban area described in section 
                1886(d)(8)(C)(iv)(I) of the Social Security Act (as 
                added by paragraph (1)); and
                    (B) on or after the date of the enactment of this 
                Act, in the case of hospitals located in an urban area 
                described in section 1886(d)(8)(C)(iv)(II) of the 
                Social Security Act (as added by paragraph (1)).
    (b) Updating Standards for Treating Rural Counties as Urban 
Counties Based on Rates of Commutation.--
            (1) In general.--Section 1886(d)(8)(B) (42 U.S.C. 
        1395ww(d)(8)(B)) is amended--
                    (A) by striking ``standards'' each place it appears 
                and inserting ``standards most recently used'', and
                    (B) by striking ``published in the Federal Register 
                on January 3, 1980''.
            (2) Hold harmless for counties currently treated as 
        urban.--Any hospital that is treated as being located in an 
        urban metropolitan statistical area pursuant to section 
        1886(d)(8)(B) of the Social Security Act as of September 30, 
        1992, shall continue to be so treated notwithstanding the 
        amendments made by paragraph (1).
            (3) Effective date.--The amendments made by paragraph (1) 
        shall be effective on October 1, 1993.
    (c) Use of Occupational Mix in Guidelines.--
            (1) In general.--Section 1886(d)(10)(D)(i)(I) (42 U.S.C. 
        1395ww(d)(10)(D)(i)(I)) is amended by inserting ``(to the 
        extent the Secretary determines appropriate)'' after ``taking 
        into account''.
            (2) Effective date.--The amendment made by paragraph (1) 
        shall take effect as if included in the enactment of OBRA-1989.

SEC. 13412. TRANSITION FOR HOSPITAL OUTLIER THRESHOLDS.

    Section 1886(d)(5)(A) (42 U.S.C. 1395ww(d)(5)(A)) is amended--
            (1) in clause (i), by striking ``The Secretary'' and 
        inserting ``For discharges occurring during fiscal years ending 
        on or before September 30, 1997, the Secretary''; and
            (2) by adding at the end the following new clauses:
    ``(v) The Secretary shall provide that--
            ``(I) the day outlier percentage for fiscal year 1995 shall 
        be 75 percent of the day outlier percentage for fiscal year 
        1994;
            ``(II) the day outlier percentage for fiscal year 1996 
        shall be 50 percent of the day outlier percentage for fiscal 
        year 1994; and
            ``(III) the day outlier percentage for fiscal year 1997 
        shall be 25 percent of the day outlier percentage for fiscal 
        year 1994.
    ``(vi) For purposes of this subparagraph, the term `day outlier 
percentage' means, for a fiscal year, the percentage of the total 
additional payments made by the Secretary under this subparagraph for 
discharges in that fiscal year which are additional payments under 
clause (i).''.

SEC. 13413. ESSENTIAL ACCESS COMMUNITY HOSPITAL (EACH) AMENDMENTS.

    (a) Increasing Number of Participating States.--Section 1820(a)(1) 
(42 U.S.C. 1395i-4(a)(1)) is amended by striking ``7'' and inserting 
``9''.
    (b) Treatment of Inpatient Hospital Services Provided in Rural 
Primary Care Hospitals.--
            (1) In general.--Section 1820(f)(1)(F) (42 U.S.C. 1395i-
        4(f)(1)(F)) is amended to read as follows:
                    ``(F) subject to paragraph (4), provides not more 
                than 6 inpatient beds (meeting such conditions as the 
                Secretary may establish) for providing inpatient care 
                to patients requiring stabilization before discharge or 
                transfer to a hospital, except that the facility may 
                not provide any inpatient hospital services--
                            ``(i) to any patient whose attending 
                        physician does not certify that the patient may 
                        reasonably be expected to be discharged or 
                        transferred to a hospital within 72 hours of 
                        admission to the facility; or
                            ``(ii) consisting of surgery or any other 
                        service requiring the use of general anesthesia 
                        (other than surgical procedures specified by 
                        the Secretary under section 1833(i)(1)(A)), 
                        unless the attending physician certifies that 
                        the risk associated with transferring the 
                        patient to a hospital for such services 
                        outweighs the benefits of transferring the 
                        patient to a hospital for such services.''.
            (2) Limitation on average length of stay.--Section 1820(f) 
        (42 U.S.C. 1395i-4(f)) is amended by adding at the end the 
        following new paragraph:
            ``(4) Limitation on average length of inpatient stays.--The 
        Secretary may terminate a designation of a rural primary care 
        hospital under paragraph (1) if the Secretary finds that the 
        average length of stay for inpatients at the facility during 
        the previous year in which the designation was in effect 
        exceeded 72 hours. In determining the compliance of a facility 
        with the requirement of the previous sentence, there shall not 
        be taken into account periods of stay of inpatients in excess 
        of 72 hours to the extent such periods exceed 72 hours because 
        transfer to a hospital is precluded because of inclement 
        weather or other emergency conditions.''.
            (3) Conforming amendment.--Section 1814(a)(8) (42 U.S.C. 
        1395f(a)(8)) is amended by striking ``such services'' and all 
        that follows and inserting ``the individual may reasonably be 
        expected to be discharged or transferred to a hospital within 
        72 hours after admission to the rural primary care hospital.''.
            (4) GAO reports.--Not later than 2 years after the date of 
        the enactment of this Act, the Comptroller General shall submit 
        reports to Congress on--
                    (A) the application of the requirements under 
                section 1820(f) of the Social Security Act (as amended 
                by this subsection) that rural primary care hospitals 
                provide inpatient care only to those individuals whose 
                attending physicians certify may reasonably be expected 
                to be discharged within 72 hours after admission and 
                maintain an average length of inpatient stay during a 
                year that does not exceed 72 hours; and
                    (B) the extent to which such requirements have 
                resulted in such hospitals providing inpatient care 
                beyond their capabilities or have limited the ability 
                of such hospitals to provide needed services.
    (c) Designation of Hospitals.--
            (1) Permitting designation of hospitals located in urban 
        areas.--
                    (A) In general.--Section 1820 (42 U.S.C. 1395i-4) 
                is amended--
                            (i) by striking paragraph (1) of subsection 
                        (e) and redesignating paragraphs (2) through 
                        (6) as paragraphs (1) through (5); and
                            (ii) in subsection (e)(1)(A) (as 
                        redesignated by subparagraph (A))--
                                    (I) by striking ``is located'' and 
                                inserting ``except in the case of a 
                                hospital located in an urban area, is 
                                located'',
                                    (II) by striking ``, (ii)'' and 
                                inserting ``or (ii)'',
                                    (III) by striking ``or (iii)'' and 
                                all that follows through ``section,'', 
                                and
                                    (IV) in subsection (i)(1)(B), by 
                                striking ``paragraph (3)'' and 
                                inserting ``paragraph (2)''.
                    (B) No change in medicare prospective payment.--
                Section 1886(d)(5)(D) (42 U.S.C. 1395ww(d)(5)(D)) is 
                amended--
                            (i) in clause (iii)(III), by inserting 
                        ``located in a rural area and'' after ``that 
                        is'', and
                            (ii) in clause (v), by inserting ``located 
                        in a rural area and'' after ``in the case of a 
                        hospital''.
            (2) Permitting hospitals located in adjoining states to 
        participate in state program.--
                    (A) In general.--Section 1820 (42 U.S.C. 1395i-4) 
                is amended--
                            (i) by redesignating subsection (k) as 
                        subsection (l); and
                            (ii) by inserting after subsection (j) the 
                        following new subsection:
    ``(k) Eligibility of Hospitals Not Located in Participating 
States.--Notwithstanding any other provision of this section--
            ``(1) for purposes of including a hospital or facility as a 
        member institution of a rural health network, a State may 
        designate a hospital or facility that is not located in the 
        State as an essential access community hospital or a rural 
        primary care hospital if the hospital or facility is located in 
        an adjoining State and is otherwise eligible for designation as 
        such a hospital;
            ``(2) the Secretary may designate a hospital or facility 
        that is not located in a State receiving a grant under 
        subsection (a)(1) as an essential access community hospital or 
        a rural primary care hospital if the hospital or facility is a 
        member institution of a rural health network of a State 
        receiving a grant under such subsection; and
            ``(3) a hospital or facility designated pursuant to this 
        subsection shall be eligible to receive a grant under 
        subsection (a)(2).''.
                    (B) Conforming amendments.--(i) Section 1820(c)(1) 
                (42 U.S.C. 1395i-4(c)(1)) is amended by striking 
                ``paragraph (3)'' and inserting ``paragraph (3) or 
                subsection (k)''.
                    (ii) Paragraphs (1)(A) and (2)(A) of section 
                1820(i) (42 U.S.C. 1395i-4(i)) are each amended--
                            (I) in clause (i), by striking ``(a)(1)'' 
                        and inserting ``(a)(1) (except as provided in 
                        subsection (k))'', and
                            (II) in clause (ii), by striking 
                        ``subparagraph (B)'' and inserting 
                        ``subparagraph (B) or subsection (k)''.
    (d) Skilled Nursing Services in Rural Primary Care Hospitals.--
Section 1820(f)(3) (42 U.S.C. 1395i-4(f)(3)) is amended by striking 
``because the facility'' and all that follows and inserting the 
following: ``because, at the time the facility applies to the State for 
designation as a rural primary care hospital, there is in effect an 
agreement between the facility and the Secretary under section 1883 
under which the facility's inpatient hospital facilities are used for 
the furnishing of extended care services, except that the number of 
beds used for the furnishing of such services may not exceed the total 
number of licensed inpatient beds at the time the facility applies to 
the State for such designation (minus the number of inpatient beds used 
for providing inpatient care pursuant to paragraph (1)(F)). For 
purposes of the previous sentence, the number of beds of the facility 
used for the furnishing of extended care services shall not include any 
beds of a unit of the facility that is licensed as a distinct-part 
skilled nursing facility at the time the facility applies to the State 
for designation as a rural primary care hospital.''.
    (e) Payment for Outpatient Rural Primary Care Hospital Services.--
            (1) Implementation of prospective payment system.--Section 
        1834(g) (42 U.S.C. 1395m(g)) is amended--
                    (A) in paragraph (1), by striking ``during a year 
                before 1993'' and inserting ``during a year before the 
                prospective payment system described in paragraph (2) 
                is in effect''; and
                    (B) in paragraph (2), by striking ``January 1, 
                1993,'' and inserting ``January 1, 1996,''.
            (2) No use of customary charge in determining payment.--
        Section 1834(g)(1) (42 U.S.C. 1395m(g)(1)) is amended by adding 
        at the end the following:
        ``The amount of payment shall be determined under either method 
        without regard to the amount of the customary or other 
        charge.''.
    (f) Clarification of Physician Staffing Requirement for Rural 
Primary Care Hospitals.--Section 1820(f)(1)(H) (42 U.S.C. 1395i-
4(f)(1)(H)) is amended by striking the period and inserting the 
following: ``, except that in determining whether a facility meets the 
requirements of this subparagraph, subparagraphs (E) and (F) of that 
paragraph shall be applied as if any reference to a `physician' is a 
reference to a physician as defined in section 1861(r)(1).''.
    (g) Technical Amendments Relating to Part A Deductible, 
Coinsurance, and Spell of Illness.--(1) Section 1812(a)(1) (42 U.S.C. 
1395d(a)(1)) is amended--
            (A) by striking ``inpatient hospital services'' the first 
        place it appears and inserting ``inpatient hospital services or 
        inpatient rural primary care hospital services'';
            (B) by striking ``inpatient hospital services'' the second 
        place it appears and inserting ``such services''; and
            (C) by striking ``and inpatient rural primary care hospital 
        services''.
    (2) Sections 1813(a) and 1813(b)(3)(A) (42 U.S.C. 1395e(a), 
1395e(b)(3)(A)) are each amended by striking ``inpatient hospital 
services'' each place it appears and inserting ``inpatient hospital 
services or inpatient rural primary care hospital services''.
    (3) Section 1813(b)(3)(B) (42 U.S.C. 1395e(b)(3)(B)) is amended by 
striking ``inpatient hospital services'' and inserting ``inpatient 
hospital services, inpatient rural primary care hospital services''.
    (4) Section 1861(a) (42 U.S.C. 1395x(a)) is amended--
            (A) in paragraphs (1), by striking ``inpatient hospital 
        services'' and inserting ``inpatient hospital services, 
        inpatient rural primary care hospital services''; and
            (B) in paragraph (2), by striking ``hospital'' and 
        inserting ``hospital or rural primary care hospital''.
    (h) Authorization of Appropriations.--Section 1820(k) (42 U.S.C. 
1395i-4(k)) is amended by striking ``1990, 1991, and 1992'' and 
inserting ``1990 through 1995''.
    (i) Effective Date.--The amendments made by this section shall take 
effect on the date of the enactment of this Act.

SEC. 13414. RURAL HEALTH TRANSITION GRANT PROGRAM EXTENSION.

    Section 4005(e)(9) of OBRA-1987 is amended--
            (1) by striking ``1989 and'' and inserting ``1989,''; and
            (2) by striking ``1992'' and inserting ``1992 and 
        $30,000,000 for each of fiscal years 1993 through 1997''.

SEC. 13415. REGIONAL REFERRAL CENTER EXTENSION.

    (a) Extension of Classification Through Fiscal Year 1994.--
Effective on the date of the enactment of this Act, section 6003(d) of 
such Act (42 U.S.C. 1395ww note) is amended by striking ``October 1, 
1992'' and inserting ``October 1, 1994''.
    (b) Permitting Hospitals to Decline Reclassification.--If any 
hospital fails to qualify as a rural referral center under section 
1886(d)(5)(C) of the Social Security Act as a result of a decision by 
the Medicare Geographic Classification Review Board under section 
1886(d)(10) of such Act to reclassify the hospital as being located in 
an urban area for fiscal year 1993 or fiscal year 1994, the Secretary 
of Health and Human Services shall--
            (1) notify such hospital of such failure to qualify,
            (2) provide an opportunity for such hospital to decline 
        such reclassification, and
            (3) if the hospital declines such reclassification, 
        administer the Social Security Act (other than section 
        1886(d)(8)(D)) for such fiscal year as if the decision by the 
        Review Board had not occurred.
    (c) Requiring Lump-sum Retroactive Payment for Hospitals Losing 
Classification.--
            (1) In general.--In the case of an affected regional 
        referral center (as described in paragraph (2)), the Secretary 
        of Health and Human Services shall make a lump sum payment to 
        the center equal to the difference between the aggregate 
        payment made to the center under section 1886 of such Act 
        (excluding outlier payments under subsection (d)(5)(A) of such 
        section) during the period of applicability described in 
        paragraph (3) and the aggregate payment that would have been 
        made to the center under such section if, during the period of 
        applicability, the center was classified a regional referral 
        center under section 1886(d)(5)(C) of such Act.
            (2) Affected centers described.--In paragraph (1), an 
        ``affected regional referral center'' is a hospital classified 
        as regional referral center under section 1886(d)(5)(C) of the 
        Social Security Act as of September 30, 1992, that was not 
        classified as such a center after such date but would have been 
        so classified if the reference in section 6003(d) of OBRA-1989 
        to ``October 1, 1992,'' had been deemed a reference to 
        ``October 1, 1994,''.
            (3) Period of applicability.--In paragraph (1), the 
        ``period of applicability'' is the period that begins on 
        October 1, 1992, and ends on the date of the enactment of this 
        Act.

SEC. 13416. MEDICARE-DEPENDENT, SMALL RURAL HOSPITAL PAYMENT EXTENSION.

    (a) Extension of Additional Payments.--Effective on the date of the 
enactment of this Act, section 1886(d)(5)(G) (42 U.S.C. 
1395ww(d)(5)(G)) is amended--
            (1) in clause (i) in the matter preceding subclause (I)--
                    (A) by inserting ``(or portion thereof)'' after 
                ``cost reporting period'', and
                    (B) by striking ``March 31, 1993,'' and all that 
                follows and inserting the following: ``September 30, 
                1994, in the case of a subsection (d) hospital which is 
                a medicare-dependent, small rural hospital, payment 
                under paragraph (1)(A) shall be equal to the sum of the 
                amount determined under clause (ii) and the amount 
                determined under paragraph (1)(A)(iii).'';
            (2) by redesignating clauses (ii) and (iii) as clauses 
        (iii) and (iv); and
            (3) by inserting after clause (i) the following new clause:
    ``(ii) The amount determined under this clause is
            ``(I) for discharges occurring during the first 3 12-month 
        cost reporting periods that begin on or after April 1, 1990, 
        the amount by which the hospital's target amount for the cost 
        reporting period (as defined in subsection (b)(3)(D)) exceeds 
        the amount determined under paragraph (1)(A)(iii); and
            ``(II) for discharges occurring during any subsequent cost 
        reporting period (or portion thereof), 50 percent of the amount 
        by which the hospital's target amount for the cost reporting 
        period (as defined in subsection (b)(3)(D)) exceeds the amount 
        determined under paragraph (1)(A)(iii).''.
     (b) Permitting Hospitals to Decline Reclassification.--If any 
hospital fails to qualify as a medicare-dependent, small rural hospital 
under section 1886(d)(5)(G)(i) of the Social Security Act as a result 
of a decision by the Medicare Geographic Classification Review Board 
under section 1886(d)(10) of such Act to reclassify the hospital as 
being located in an urban area for fiscal year 1993 or fiscal year 
1994, the Secretary of Health and Human Services shall--
            (1) notify such hospital of such failure to qualify,
            (2) provide an opportunity for such hospital to decline 
        such reclassification, and
            (3) if the hospital declines such reclassification, 
        administer the Social Security Act (other than section 
        1886(d)(8)(D)) for such fiscal year as if the decision by the 
        Review Board had not occurred.
    (c) Requiring Lump-sum Retroactive Payment.--
            (1) In general.--In the case of a hospital treated as a 
        medicare dependent, small rural hospital under section 
        1886(d)(5)(G) of the Social Security Act, the Secretary of 
        Health and Human Services shall make a lump sum payment to the 
        hospital equal to the difference between the aggregate payment 
        made to the hospital under section 1886 of such Act (excluding 
        outlier payments under subsection (d)(5)(A) of such section) 
        during the period of applicability described in paragraph (2) 
        and the aggregate payment that would have been made to the 
        hospital under such section if, during the period of 
        applicability, section 1886(d)(5)(G) of such Act had been 
        applied as if--
                    (A) the reference in clause (i) to ``March 31, 
                1993,'' had been deemed a reference to ``September 30, 
                1994,''; and
                    (B) the amendments made by subsection (a) had been 
                in effect.
            (2) Period of applicability.--In paragraph (1), the 
        ``period of applicability'' is, with respect to a hospital, the 
        period that begins on the first day of the hospital's first 12-
        month cost reporting period that begins after April 1, 1992, 
        and ends on the date of the enactment of this Act.

SEC. 13417. EXTENSION OF REGIONAL FLOOR.

    Section 1886(d)(1)(A)(iii) (42 U.S.C. 1395ww(d)(1)(A)(iii)) is 
amended by striking ``September 30, 1993'' and inserting ``September 
30, 1996''.

SEC. 13418. EXTENSION OF RURAL HOSPITAL DEMONSTRATION.

    Section 4008(i)(1) of OBRA-1990 is amended by adding at the end the 
following new sentence: ``The Secretary shall continue any such 
demonstration project until at least December 31, 1995.''.

SEC. 13419. HEMOPHILIA PASS-THROUGH EXTENSION.

    Effective as if included in the enactment of OBRA-1989, section 
6011(d) of such Act is amended by striking ``2 years after the date of 
enactment of this Act'' and inserting ``September 30, 1994''.

SEC. 13420. STATE HOSPITAL PAYMENT PROGRAMS.

    In the case of a State hospital reimbursement system that meets the 
requirements of section 1814(b)(3) of the Social Security Act, no other 
provision of law shall be construed as preventing the system from 
providing that payment for services covered under the system be made on 
the basis of rates provided for under the system.

SEC. 13421. PSYCHOLOGY SERVICES IN HOSPITALS.

    Section 1861(e)(4) (42 U.S.C. 1395x(e)(4)) is amended by striking 
``physician;'' and inserting ``physician, except that a patient 
receiving qualified psychologist services (as defined in subsection 
(ii)) may be under the care of a clinical psychologist with respect to 
such services to the extent permitted under State law;''.

SEC. 13422. GRADUATE MEDICAL EDUCATION PAYMENTS IN HOSPITAL-OWNED 
              COMMUNITY HEALTH CENTERS.

    Section 1886(d)(5)(B)(iv) (42 U.S.C. 1395ww(d)(5)(B)(iv)) is 
amended by inserting after ``the hospital'' the following: ``or 
providing services at any entity receiving a grant under section 330 of 
the Public Health Service Act that is under the ownership or control of 
the hospital (if the hospital incurs all, or substantially all, of the 
costs of the services furnished to the hospital by such interns and 
residents)''.

SEC. 13423. TREATMENT OF CERTAIN MILITARY FACILITIES.

    (a) Coverage of Services Provided in Certain Uniformed Services 
Treatment Facilities.--
            (1) In general.--The Secretary of Health and Human Services 
        may not take any recoupment action to recover amounts that were 
        paid by the United States under title XVIII of the Social 
        Security Act to the facilities described in paragraph (2) (or 
        to other individuals or entities with whom such facilities had 
        entered into agreements to provide services under such title) 
        for services provided during the period beginning October 1, 
        1986, and ending December 31, 1989, except to the extent that 
        funds were obligated to the Uniformed Services Treatment 
        Facilities program to fulfill such an action pursuant to title 
        VI of the Department of Defense Appropriations Act, 1993.
            (2) Facilities described.--The facilities referred to in 
        paragraph (1) are the hospitals described in section 248c of 
        title 42, United States Code, that are located in Boston, 
        Massachusetts; Baltimore, Maryland; and Seattle, Washington.
    (b) Study of Joint Medical Facilities.--
            (1) Study.--The Secretary of Health and Human Services, in 
        consultation with the Secretary of Defense and the Secretary of 
        Veterans Affairs, shall conduct a study of the feasibility and 
        desirability of establishing joint medical facilities among the 
        Department of Defense, the Department of Veterans' Affairs, and 
        other public and private entities, and shall include in such 
        study an analysis of the need to make changes in the medicare 
        and medicaid programs (including facility certification 
        standards under such programs) in order to facilitate the 
        establishment of such joint medical facilities.
            (2) Report.--Not later than October 1, 1993, the Secretary 
        of Health and Human Services shall submit a report to Congress 
        on the study conducted under paragraph (1).

SEC. 13424. EPILEPSY DRG.

    (a) In General.--The Secretary of Health and Human Services shall 
review the diagnosis-related groups established pursuant to section 
1886(d)(4) of the Social Security Act that are assigned to discharges 
of patients with intractable epilepsy, including patients whose 
admissions involve intensive neurodiagnostic monitoring, and shall 
revise, for discharges occurring on or after October 1, 1994, the 
assignment of discharges to such groups as the Secretary considers 
appropriate to account for the resource requirements of such patients.
    (b) Consultation Requirements.--In carrying out subsection (a), the 
Secretary shall consult with the Prospective Payment Assessment 
Commission and national organizations representing individuals with 
epilepsy or individuals and entities providing specialized medical 
services to such individuals related to the treatment of epilepsy.

SEC. 13425. SKILLED NURSING FACILITY WAGE INDEX.

    (a) In General.--Not later than 1 year after the date of the 
enactment of this Act, the Secretary of Health and Human Services shall 
begin to collect data on employee compensation and paid hours of 
employment in skilled nursing facilities for the purpose of 
constructing a skilled nursing facility wage index adjustment to the 
routine service cost limits required under section 1888(a)(4) of the 
Social Security Act.
    (b) ProPAC Report.--The Prospective Payment Assessment Commission 
shall, by March 1, 1994, study and report to the Congress on the impact 
of applying routine per diem cost limits for skilled nursing facilities 
on a regional basis.

SEC. 13426. HOSPICE NOTIFICATION TO BENEFICIARIES.

    (a) Hospitals.--Section 1861(ee)(2)(D) (42 U.S.C. 1395x(ee)(2)(D)) 
is amended by inserting ``, including hospice services,'' after ``post-
hospital services''.
    (b) Nursing Facilities.--Section 1819(c)(1)(B) (42 U.S.C. 1395i-
3(c)(1)(B)) is amended--
            (1) by striking ``and'' at the end of clause (ii);
            (2) by striking the period at the end of clause (iii) and 
        inserting ``; and''; and
            (3) by inserting after clause (iii) the following new 
        clause:
                            ``(iv) inform each resident who is entitled 
                        to benefits under this title, orally and in 
                        writing at the time of admission to the 
                        facility, of the entitlement of individuals to 
                        hospice care under section 1812(a)(4) (unless 
                        there is no hospice program providing hospice 
                        care for which payment may be made under this 
                        title within the geographic area of the 
                        facility and it is not the common practice of 
                        the facility to refer patients to hospice 
                        programs located outside such geographic 
                        area).''.
    (c) Effective Date.--The amendments made by this section shall 
apply to services furnished on or after the first day of the first 
month beginning more than one year after the date of the enactment of 
this Act.

SEC. 13427. REDUCTION IN PART A PREMIUM FOR CERTAIN INDIVIDUALS WITH 30 
              OR MORE QUARTERS OF SOCIAL SECURITY COVERAGE.

    (a) In General.--Section 1818(d) (42 U.S.C. 1395i-2(d)) is 
amended--
            (1) in the second sentence of paragraph (2), by striking 
        ``Such amount'' and inserting ``Subject to paragraph (4), the 
        amount of an individual's monthly premium under this section''; 
        and
            (2) by adding at the end the following new paragraph:
    ``(4)(A) In the case of an individual described in subparagraph 
(B), the monthly premium for a month shall be reduced by the applicable 
reduction percent specified in the following table:

                                               The applicable reduction
``For a month in:                                      percent is:     
    1994..........................................           25 percent
    1995..........................................           30 percent
    1996..........................................           35 percent
    1997..........................................           40 percent
    1998 or subsequent year.......................          45 percent.
    ``(B) An individual described in this subparagraph with respect to 
a month is an individual who establishes to the satisfaction of the 
Secretary that, as of the last day of the previous month, the 
individual--
            ``(i) had at least 30 quarters of coverage under title II;
            ``(ii) was married (and had been married for the previous 1 
        year period) to an individual who had at least 30 quarters of 
        coverage under such title;
            ``(iii) had been married to an individual for a period of 
        at least 1 year (at the time of the individual's death) if at 
        such time the individual had at least 30 quarters of coverage 
        under such title; and
            ``(iv) is divorced from an individual and had been married 
        to the individual for a period of at least 10 years (at the 
        time of the divorce) if at such time the individual had at 
        least 30 quarters of coverage under such title.''.
    (b) Effective Date.--The amendments made by this section shall 
apply to monthly premiums under section 1818 of the Social Security Act 
for months beginning with January 1, 1994.

SEC. 13428. PERIODIC UPDATES TO SALARY EQUIVALENCY GUIDELINES FOR 
              PHYSICAL THERAPY AND RESPIRATORY THERAPY SERVICES.

    (a) In General.--Section 1861(v)(5) (42 U.S.C. 1395x(v)(5)) is 
amended by adding at the end the following new subparagraph:
    ``(C) Using the most recent available data, the Secretary shall 
update, not less often than every 3 years, the salary equivalency 
guidelines used under subparagraph (A) with respect to physical therapy 
and respiratory therapy services.''.
    (b) Effective Date.--The Secretary of Health and Human Services 
shall first update the salary equivalency guidelines, under the 
amendment made by subsection (a), by not later than December 31, 1993. 
Such updated guidelines shall apply to cost reporting periods beginning 
on or after July 1, 1993.

SEC. 13429. EXTENSION OF DEADLINE FOR APPLICATION FOR GEOGRAPHIC 
              CLASSIFICATION FOR CERTAIN RECLASSIFIED HOSPITALS.

    Notwithstanding section 1886(d)(10)(C)(ii) of the Social Security 
Act, a hospital may submit an application to the Medicare Geographic 
Classification Review Board requesting a change in geographic 
classification for fiscal year 1994 after the first day of fiscal year 
1993 if--
            (1) the hospital's geographic classification for fiscal 
        year 1994 was changed from urban to rural as a result of the 
        issuance of the Revised Statistical Definitions for 
        Metropolitan Areas established by the Office of Management and 
        Budget on December 28, 1992 (pursuant to OMB Bulletin No. 93-
        05); and
            (2) the hospital submits the application not later than 60 
        days after the date of the enactment of this Act.

SEC. 13430. CLARIFICATION OF DRG PAYMENT WINDOW EXPANSION; 
              MISCELLANEOUS AND TECHNICAL CORRECTIONS.

    (a) Clarification of DRG Payment Window Expansion.--The first 
sentence of section 1886(a)(4) (42 U.S.C. 1395ww(a)(4)) is further 
amended by striking ``and includes'' and inserting ``and (in the case 
of a subsection (d) hospital) includes''.
    (b) Technical Correction Relating to Resident Assessment in Nursing 
Homes.--Section 1819(b)(3)(C)(i)(I) (42 U.S.C. 1395i-3(b)(3)(C)(i)(I)) 
is amended by striking ``not later than'' before ``14 days''.
    (c) Clerical Corrections.--(1) Section 1814(i)(1)(C)(i) (42 U.S.C. 
1395f(i)(1)(C)(i)) is amended by striking ``1990,,'' and inserting 
``1990,''.
    (2) Section 1816(f)(2)(A)(ii) (42 U.S.C. 1396h(f)(2)(A)(ii)) is 
amended by striking ``such agency'' and inserting ``such agency's''.
    (3) Section 1886(d)(1)(A)(iii) (42 U.S.C. 1395ww(d)(1)(A)(iii)) is 
amended by striking ``, the sum of'' and inserting ``is equal to the 
sum of''.

                CHAPTER 2--PROVISIONS RELATING TO PART B

             Subchapter A--Elimination of Inflation Update

SEC. 13431. ELIMINATION OF INFLATION UPDATE FOR PHYSICIAN AND RELATED 
              PROFESSIONAL SERVICES.

    (a) No Increase in Index.--Section 1848(d)(3)(A) (42 U.S.C. 1395w-
4(d)(3)(A)) is amended--
            (1) in clause (i), by striking ``clause (iii)'' and 
        inserting ``clauses (iii) and (iv)'', and
            (2) by adding at the end the following new clause:
                            ``(iv) No increase in index for 1994 or 
                        1995.--In applying clause (i) for services 
                        furnished on or after January 1, 1994, the 
                        percentage increase in the appropriate update 
                        index for each of 1994 and 1995 shall be 0 per 
                        cent.''.
    (b) No Increase in MEI for 1994 and 1995.--Section 1842(b)(4)(E) 
(42 U.S.C. 1395u(b)(4)(E)) is amended by adding at the end the 
following new clause:
    ``(vi) For purposes of this part for items and services furnished 
in 1994 or 1995, the percentage increase in the MEI is 0 percent.''.

SEC. 13432. ELIMINATION OF COST-OF-LIVING ADJUSTMENTS FOR CERTAIN ITEMS 
              AND SERVICES.

    (a) Clinical Laboratory Services.--Section 1833(h)(2)(A)(ii) (42 
U.S.C. 1395l(h)(2)(A)(ii)) is amended--
            (1) by striking ``and'' at the end of subclause (II),
            (2) by striking the period at the end of subclause (III) 
        and inserting ``, and'', and
            (3) by adding at the end the following new subclause:
            ``(IV) the annual adjustment in the fee schedules 
        determined under clause (i) for each of the years 1994 and 1995 
        shall be 0 percent.''.
    (b) Durable Medical Equipment.--Section 1834(a)(14) (42 U.S.C. 
1395m(a)(14)) is amended--
            (1) in subparagraph (A), as amended by 13469(a), by 
        striking ``and'' at the end;
            (2) in subparagraph (B)--
                    (A) by striking ``a subsequent year'' and inserting 
                ``1993'', and
                    (B) by striking ``June of the previous year.'' and 
                inserting ``June 1992,''; and
            (3) by adding at the end the following new subparagraphs:
                    ``(C) for 1994 and 1995, no percentage change, and
                    ``(D) for a subsequent year, the percentage 
                increase in the consumer price index for all urban 
                consumers (U.S. city average) for the 12-month period 
                ending with June of the previous year.''.
    (c) Orthotics and Prosthetics.--Section 1834(h)(4)(A) (42 U.S.C. 
1395m(h)(4)(A)) is amended--
            (1) in clause (i), by striking ``and'';
            (2) in clause (ii), by striking ``a subsequent year'' and 
        inserting ``1992 and 1993''; and
            (3) by adding at the end the following new clauses:
                            ``(iii) for 1994 and 1995, 0 percent, and
                            ``(iv) for a subsequent year, the 
                        percentage increase in the consumer price index 
                        for all urban consumers (United States city 
                        average) for the 12-month period ending with 
                        June of the previous year;''.
    (d) Reasonable Charge Limits for Enteral and Parenteral Nutrients, 
Supplies and Equipment.--In determining the amount of payment under 
part B of title XVIII of the Social Security Act during 1994 and 1995, 
the charges determined to be reasonable with respect to parenteral and 
enteral nutrients, supplies, and equipment may not exceed the charges 
determined to be reasonable with respect to such nutrients, supplies, 
and equipment during 1993.

SEC. 13433. AMBULATORY SURGICAL CENTER SERVICES.

    (a) Elimination of Inflation Update.--The Secretary of Health and 
Human Services shall not provide for any inflation update in the 
payment amounts under subparagraphs (A) and (B) of section 1833(i)(2) 
of the Social Security Act for fiscal year 1994 or for fiscal year 
1995.
    (b) Conforming Amendment.--Section 1833(i)(2)(C) (42 U.S.C. 
1395l(i)(2)(C)), as added by section 13453(a)(2)(B), is amended by 
striking ``fiscal year 1995'' and inserting ``fiscal year 1996''.

SEC. 13434. OTHER ITEMS AND SERVICES UNDER PART B.

    (a) Rural Health Clinic Services; Federally-Qualified Health Center 
Services; Comprehensive Outpatient Rehabilitation Facility Services.--
In determining the amount of payment made for rural health clinic 
services, Federally qualified health center services, or comprehensive 
outpatient rehabilitation facility services furnished under part B of 
title XVIII of the Social Security Act for services furnished on or 
after January 1, 1994, the Secretary of Health and Human Services shall 
provide that any inflation update, in the applicable limits used to 
determine the costs which are reasonable and related to the cost of 
furnishing such services under section 1833(a)(3) of such Act, that 
would otherwise have applied for 1994 or for 1995 shall be deemed to be 
0 percent.
    (b) Dialysis Services.--In determining the amount of payment made 
for dialysis services furnished under part B of title XVIII of the 
Social Security Act on or after January 1, 1994, the Secretary of 
Health and Human Services shall provide that any inflation update, in 
the payment amounts determined under section 1881(b)(2)(B) of such Act 
or the rates determined under section 1881(b)(7) of such Act, that 
would otherwise have applied for 1994 or for 1995 shall be deemed to be 
0 percent.
    (c) Other Part B Items and Services.--In determining the amount of 
payment made for an item or service furnished under part B of title 
XVIII of the Social Security Act on or after January 1, 1994, other 
than an item or service to which a preceding provision of (or amendment 
made by) this subchapter applies, the Secretary of Health and Human 
Services shall provide that any inflation update in the fee schedule 
amount for the item or service established under such part B of such 
title, or (if applicable) any applicable limit used to determine the 
actual charge, reasonable charge, or reasonable cost for the item or 
service under such part, that would otherwise have applied for 1994 or 
for 1995 shall be deemed to be 0 percent.

                   Subchapter B--Physicians' Services

SEC. 13441. REINSTATING SEPARATE PAYMENT FOR THE INTERPRETATION OF 
              ELECTROCARDIOGRAMS (EKGS).

    (a) In General.--Paragraph (3) of section 1848(b) (42 U.S.C. 1395w-
4(b)) is amended to read as follows:
            ``(3) Treatment of interpretation of electrocardiograms.--
        The Secretary--
                    ``(A) shall make separate payment under this 
                section for the interpretation of electrocardiograms 
                performed or ordered to be performed as part of or in 
                conjunction with a visit to or a consultation with a 
                physician, and
                    ``(B) shall adjust the relative values established 
                for visits and consultations under subsection (c) so as 
                not to include relative value units for interpretations 
                of electrocardiograms in the relative value for visits 
                and consultations.''.
    (b) Assuring Budget Neutrality.--Section 1848(c)(2) (42 U.S.C. 
1395w-4(c)(2)) is amended by adding at the end the following new 
subparagraph:
                    ``(E) Budget neutrality adjustments.--The 
                Secretary--
                            ``(i) shall reduce the relative values for 
                        all services (other than anesthesia services) 
                        established under this paragraph (and, in the 
                        case of anesthesia services, the conversion 
                        factor established by the Secretary for such 
                        services) by such percentage as the Secretary 
                        determines to be necessary so that, beginning 
                        in 1996, the amendment made by section 13441(a) 
                        of the Omnibus Budget Reconciliation Act of 
                        1993 would not result in expenditures under 
                        this section that exceed the amount of such 
                        expenditures that would have been made if such 
                        amendment had not been made, and
                            ``(ii) shall reduce the amounts determined 
                        under subsection (a)(2)(B)(i)(I) by such 
                        percentage as the Secretary determines to be 
                        required to assure that, taking into account 
                        the reductions made under clause (i), the 
                        amendment made by section 13441(a) of the 
                        Omnibus Budget Reconciliation Act of 1993 would 
                        not result in expenditures under this section 
                        in 1993 that exceed the amount of such 
                        expenditures that would have been made if such 
                        amendment had not been made.''.
    (c) Conforming Amendments.--Section 1848 (42 U.S.C. 1395w-4) is 
amended--
            (1) in subsection (a)(2)(B)(i)(I), by inserting ``and as 
        adjusted under subsection (c)(2)(E)(ii)'' after ``for 1993'';
            (2) in subsection (c)(2)(A)(i), by adding at the end the 
        following: ``Such relative values are subject to adjustment 
        under subparagraph (E)(i).''; and
            (3) in subsection (i)(1)(B), by adding at the end 
        ``including adjustments under subsection (c)(2)(E),''.
    (d) Effective Date.--The amendments made by this section shall 
apply to services furnished on or after January 1, 1994.

SEC. 13442. PAYMENTS FOR NEW PHYSICIANS AND PRACTITIONERS.

    (a) Equal Treatment of New Physicians and Practitioners.--(1) 
Section 1848(a) (42 U.S.C. 1395w-4(a)) is amended by striking paragraph 
(4).
    (2) Section 1842(b)(4) (42 U.S.C. 1395u(b)(4)) is amended by 
striking subparagraph (F).
    (b) Budget Neutrality Adjustment.--Notwithstanding any other 
provision of law, the Secretary of Health and Human Services shall 
reduce the following values and amounts for 1993 (to be applied for 
that year and subsequent years) by such uniform percentage as the 
Secretary determines to be required to assure that the amendments made 
by subsection (a) will not result in expenditures under part B of title 
XVIII of the Social Security Act in 1993 that exceed the amount of such 
expenditures that would have been made if such amendments had not been 
made:
            (1) The relative values established under section 1848(c) 
        of such Act for services (other than anesthesia services) and, 
        in the case of anesthesia services, the conversion factor 
        established under section 1848 of such Act for such services.
            (2) The amounts determined under section 
        1848(a)(2)(B)(i)(I) of such Act.
            (3) The prevailing charges or fee schedule amounts to be 
        applied under such part for services of a health care 
        practitioner (as defined in section 1842(b)(4)(F)(ii)(I) of 
        such Act, as in effect before the date of the enactment of this 
        Act).
    (c) Conforming Amendments.--Section 1848 (42 U.S.C. 1395w-4), as 
amended by section 13441(c), is amended--
            (1) in subsection (a)(2)(B)(i)(I), by inserting ``and 
        section 13442(b) of the Omnibus Budget Reconciliation Act of 
        1993'' after ``(c)(2)(E)(ii)'' after ``for 1993'';
            (2) in subsection (c)(2)(A)(i), by inserting ``and section 
        13442(b) of the Omnibus Budget Reconciliation Act of 1993'' 
        after ``under subparagraph (E)(i)''; and
            (3) in subsection (i)(1)(B), by inserting ``and section 
        13442(b) of the Omnibus Budget Reconciliation Act of 1993'' 
        after ``under subsection (c)(2)(E)''.
    (d) Effective Date.--The amendments made by subsection (a) shall 
apply to services furnished on or after January 1, 1994.

SEC. 13443. RETAINING PAYMENT FOR ACTUAL ANESTHESIA TIME.

    (a) Physicians' Services.--Section 1848(b)(2)(B) (42 U.S.C. 1395w-
4(b)(2)(B)) is amended by adding at the end the following: ``The 
Secretary may not modify the methodology in effect as of January 1, 
1992, for determining the amount of time that may be billed for such 
services under this section.''.
    (b) Services of Certified Registered Nurse Anesthetists.--Section 
1833(l)(1)(B) (42 U.S.C. 1395l(l)(1)(B)) is amended by adding at the 
end the following: ``The Secretary may not modify the methodology in 
effect as of January 1, 1992, for determining the amount of time that 
may be billed for such services under this section.''.
    (c) Effective Date.--The amendments made by this section shall take 
apply to services furnished on or after the date of the enactment of 
this Act.

SEC. 13444. GEOGRAPHIC COST OF PRACTICE INDEX REFINEMENTS.

    (a) Requiring Consultation with Representatives of Physicians in 
Reviewing Geographic Adjustment Factors.--Section 1848(e)(1)(C) (42 
U.S.C. 1395w-4(e)(1)(C)) is amended by striking ``shall review'' and 
inserting ``shall, in consultation with appropriate representatives of 
physicians, review''.
    (b) Use of Most Recent Data In Geographic Adjustment.--Section 
1848(e)(1) (42 U.S.C. 1395w-4(e)(1)) is amended by adding at the end 
the following new subparagraph:
                    ``(D) Use of recent data.--In establishing indices 
                and index values under this paragraph, the Secretary 
                shall use the most recent data available relating to 
                practice expenses, malpractice expenses, and physician 
                work effort in different fee schedule areas.''.
    (c) Deadline for Initial Review and Revision.--The Secretary of 
Health and Human Services shall first review and revise geographic 
adjustment factors under section 1848(e)(1)(C) of the Social Security 
Act by not later than January 1, 1995. Not later than April 1, 1994, 
the Secretary shall study and report to the Committee on Finance of the 
Senate and the Committee on Ways and Means and the Committee on Energy 
and Commerce of the House of Representatives on the construction of the 
geographic cost of practice index under section 1848(e)(1)(A)(i) of 
such Act.
    (d) Report on Review Process.--Not later than 1 year after the date 
of the enactment of this Act, the Secretary of Health and Human 
Services shall study and report to the Committee on Finance of the 
Senate and the Committee on Ways and Means and the Committee on Energy 
and Commerce of the House of Representatives on--
            (1) the data necessary to review and revise the indices 
        established under section 1848(e)(1)(A) of the Social Security 
        Act, including--
                    (A) the shares allocated to physicians' work 
                effort, practice expenses (other than malpractice 
                expenses), and malpractice expenses;
                    (B) the weights assigned to the input components of 
                such shares; and
                    (C) the index values assigned to such components;
            (2) any limitations on the availability of data necessary 
        to review and revise such indices at least every three years;
            (3) ways of addressing such limitations, with particular 
        attention to the development of alternative data sources for 
        input components for which current index values are based on 
        data collected less frequently than every three years; and
            (4) the costs of developing more accurate and timely data.
    (e) Development of Criteria for Use in Determining Payment 
Localities.--The Physician Payment Review Commission shall conduct a 
study to develop criteria that would be used to refine the fee schedule 
areas that are used within States, in applying geographic adjustment 
factors for computing payment amounts, under section 1848 of the Social 
Security Act. The Commission shall include a report on such study in 
its recommendations submitted to the Congress under section 1845(b) of 
such Act in 1994.

SEC. 13445. EXTRA-BILLING.

    (a) Enforcement and Uniform Application.--
            (1) Enforcement.--Paragraph (1) of section 1848(g) (42 
        U.S.C. 1395w-4(g)) is amended to read as follows:
            ``(1) Limitation on actual charges.--
                    ``(A) In general.--In the case of a 
                nonparticipating physician or nonparticipating supplier 
                or other person (as defined in section 1842(i)(2)) who 
                does not accept payment on an assignment-related basis 
                for a physician's service furnished with respect to an 
                individual enrolled under this part, the following 
                rules apply:
                            ``(i) Application of limiting charge.--No 
                        person may bill or collect an actual charge for 
                        the service in excess of the limiting charge 
                        described in paragraph (2) for such service.
                            ``(ii) No liability for excess charges.--No 
                        person is liable for payment of any amounts 
                        billed for the service in excess of such 
                        limiting charge.
                            ``(iii) Correction of excess charges.--If 
                        such a physician, supplier, or other person 
                        bills, but does not collect, an actual charge 
                        for a service in violation of clause (i), the 
                        physician, supplier, or other person shall 
                        reduce on a timely basis the actual charge 
                        billed for the service to an amount not to 
                        exceed the limiting charge for the service.
                            ``(iv) Refund of excess collections.--If 
                        such a physician, supplier, or other person 
                        collects an actual charge for a service in 
                        violation of clause (i), the physician, 
                        supplier, or other person shall provide on a 
                        timely basis a refund to the individual charged 
                        in the amount by which the amount collected 
                        exceeded the limiting charge for the service. 
                        The amount of such a refund shall be reduced to 
                        the extent the individual has an outstanding 
                        balance owed by the individual to the 
                        physician.
                    ``(B) Sanctions.--If a physician, supplier, or 
                other person--
                            ``(i) knowingly and willfully bills or 
                        collects for services in violation of 
                        subparagraph (A)(i) on a repeated basis, or
                            ``(ii) fails to comply with clause (iii) or 
                        (iv) of subparagraph (A) on a timely basis,
                the Secretary may apply sanctions against the 
                physician, supplier, or other person in accordance with 
                paragraph (2) of section 1842(j). In applying this 
                subparagraph, paragraph (4) of such section applies in 
                the same manner as such paragraph applies to such 
                section and any reference in such section to a 
                physician is deemed also to include a reference to a 
                supplier or other person under this subparagraph.
                    ``(C) Timely basis.--For purposes of this 
                paragraph, a correction of a bill for an excess charge 
                or refund of an amount with respect to a violation of 
                subparagraph (A)(i) in the case of a service is 
                considered to be provided `on a timely basis', if the 
                reduction or refund is made not later than 30 days 
                after the date the physician, supplier, or other person 
                is notified by the carrier under this part of such 
                violation and of the requirements of subparagraph 
                (A).''.
            (2) Uniform application of extra-billing limits to 
        physicians' services.--
                    (A) In general.--Section 1848(g)(2)(C) (42 U.S.C. 
                1395w-4(g)(2)(C)) is amended by inserting ``or for 
                nonparticipating suppliers or other persons'' after 
                ``nonparticipating physicians''.
                    (B) Conforming definition.--Section 1842(i)(2) (42 
                U.S.C. 1395u(i)(2)) is amended--
                            (i) by striking ``, and the term'' and 
                        inserting ``; the term'', and
                            (ii) by inserting before the period at the 
                        end the following: ``; and the term 
                        `nonparticipating supplier or other person' 
                        means a supplier or other person (excluding a 
                        provider of services) that is not a 
                        participating physician or supplier (as defined 
                        in subsection (h)(1))''.
    (b) Pre-Payment Screening of Claims.--Subparagraph (G) of section 
1842(b)(3) (42 U.S.C. 1395u(b)(3)) is amended to read as follows:
            ``(G) will, for a service that is furnished with respect to 
        an individual enrolled under this part, that is not paid on an 
        assignment-related basis, and that is subject to a limiting 
        charge under section 1848(g)--
                    ``(i) determine, prior to making payment, whether 
                the amount billed for such service exceeds the limiting 
                charge applicable under section 1848(g)(2);
                    ``(ii) notify the physician, supplier, or other 
                person periodically (but not less often than once every 
                30 days) of determinations that amounts billed exceeded 
                such applicable limiting charges; and
                    ``(iii) provide for prompt response to inquiries of 
                physicians, suppliers, and other persons concerning the 
                accuracy of such limiting charges for their 
                services;''.
    (c) Information on Extra-Billing Limits.--
            (1) Part of explanation of medicare benefits.--Section 
        1842(h)(7) (42 U.S.C. 1395u(h)(7)) is amended--
                    (A) by striking ``and'' at the end of subparagraph 
                (B),
                    (B) in subparagraph (C), by striking ``shall 
                include'' and by striking the period at the end and 
                inserting ``, and'', and
                    (C) by adding at the end the following new 
                subparagraph:
            ``(D) in the case of services for which the billed amount 
        exceeds the limiting charge imposed under section 1848(g), 
        information regarding such applicable limiting charge 
        (including information concerning the right to a refund under 
        section 1848(g)(1)(A)(iv)).''.
            (2) Report on charges in excess of limiting charge.--
        Section 1848(g)(6)(B) (42 U.S.C. 1395w-4(g)(6)(B)) is amended 
        by inserting ``the extent to which actual charges exceed 
        limiting charges, the number and types of services involved, 
        and the average amount of excess charges and'' after ``report 
        to the Congress''.
    (d) Applying the Limiting Charge to Nonphysician Services Provided 
Under the Physician Fee Schedule.--Section 1848 (42 U.S.C. 1395w-4) is 
amended--
            (1) in subsection (a)(3), by inserting ``and suppliers'' 
        after ``physicians'', and by inserting ``or a nonparticipating 
        supplier or other person'' after ``nonparticipating physician'' 
        and by adding at the end the following: ``In the case of 
        physicians' services (including services which the Secretary 
        excludes pursuant to subsection (j)(3)) of a nonparticipating 
        physician, supplier, or other person for which payment is made 
        under this part on a basis other than the fee schedule amount, 
        the payment shall be based on 95 percent of the payment basis 
        for such services furnished by a participating physician, 
        supplier, or other person.'';
            (2) in subsection (g)(1)(A), as amended by subsection (a), 
        in the matter before clause (i), by inserting ``(including 
        services which the Secretary excludes pursuant to subsection 
        (j)(3))'' after ``a physician's service'';
            (3) in subsection (g)(2)(D), by inserting ``(or, if payment 
        under this part is made on a basis other than the fee schedule 
        under this section, 95 percent of the other payment basis)'' 
        after ``subsection (a)'';
            (4) in subsection (g)(3)(B)--
                    (A) by inserting after the first sentence the 
                following: `` No person is liable for payment of any 
                amounts billed for such a service in violation of the 
                previous sentence.'', and
                    (B) in the last sentence, by striking ``previous 
                sentence'' and inserting ``first sentence'';
            (5) in subsection (h)--
                    (A) by inserting ``or nonparticipating supplier or 
                other person furnishing physicians' services (as 
                defined in section 1848(j)(3))'' after ``physician'' 
                the first place it appears,
                    (B) by inserting ``, supplier, or other person'' 
                after ``physician'' the second place it appears, and
                    (C) by inserting ``, suppliers, and other persons'' 
                after ``physicians'' the second place it appears; and
            (6) in subsection (j)(3), by inserting ``, except for 
        purposes of subsections (a)(3), (g), and (h)'' after ``tests 
        and''.
    (e) Clarification of Mandatory Assignment Rules for Certain 
Practitioners.--
            (1) In general.--Section 1842(b) (42 U.S.C. 1395u(b)) is 
        amended by adding at the end the following new paragraph:
    ``(19)(A) Payment for any service furnished by a practitioner 
described in subparagraph (C) and for which payment may be made under 
this part on a reasonable charge or fee schedule basis may only be made 
under this part on an assignment-related basis.
    ``(B) A practitioner described in subparagraph (C) or other person 
may not bill (or collect any amount from) the individual or another 
person for any service described in subparagraph (A), except for 
deductible and coinsurance amounts applicable under this part. No 
person is liable for payment of any amounts billed for such a service 
in violation of the previous sentence. If a practitioner or other 
person knowingly and willfully bills (or collects an amount) for such a 
service in violation of such sentence, the Secretary may apply 
sanctions against the practitioner or other person in the same manner 
as the Secretary may apply sanctions against a physician in accordance 
with section 1842(j)(2) in the same manner as such section applies with 
respect to a physician. Paragraph (4) of section 1842(j) shall apply in 
this subparagraph in the same manner as such paragraph applies to such 
section.
    ``(C) A practitioner described in this subparagraph is any of the 
following:
            ``(i) A physician assistant, nurse practitioner, or 
        clinical nurse specialist (as defined in section 1861(aa)(5)).
            ``(ii) A certified registered nurse anesthetist (as defined 
        in section 1861(bb)(2)).
            ``(iii) A certified nurse-midwife (as defined in section 
        1861(gg)(2)).
            ``(iv) A clinical social worker (as defined in section 
        1861(hh)(1)).
            ``(v) A clinical psychologist (as defined by the Secretary 
        for purposes of section 1861(ii)).
    ``(D) For purposes of this paragraph, a service furnished by a 
practitioner described in subparagraph (C) includes any services and 
supplies furnished as incident to the service as would otherwise be 
covered under this part if furnished by a physician or as incident to a 
physician's service.''.
            (2) Conforming amendments.--
                    (A) Section 1833 (42 U.S.C. 1395l) is amended--
                            (i) in subsection (l)(5), by striking 
                        subparagraph (B) and redesignating subparagraph 
                        (C) as subparagraph (B);
                            (ii) by striking subsection (p); and
                            (iii) in subsection (r), by striking 
                        paragraph (3) and redesignating paragraph (4) 
                        as paragraph (3).
                    (B) Section 1842(b)(12) (42 U.S.C. 1395u(b)(12)) is 
                amended by striking subparagraph (C).
    (f) Miscellaneous and Technical Amendments.--Section 1833 (42 
U.S.C. 1395l) is amended--
            (1) in subsection (a)(1), as amended by section 
        13479(e)(2)--
                    (A) by striking ``and'' before ``(O)'', and
                    (B) by inserting before the semicolon at the end 
                the following: ``, and (P) with respect to services 
                described in clauses (i), (ii) and (iv) of section 
                1861(s)(2)(K), the amounts paid are subject to the 
                provisions of section 1842(b)(12)''; and
            (2) in subsection (h)(5)(D)--
                    (A) by striking ``paragraphs (2) and (3)'' and by 
                inserting ``paragraph (2)'', and
                    (B) by adding at the end the following: ``Paragraph 
                (4) of such section shall apply in this subparagraph in 
                the same manner as such paragraph applies to such 
                section.''.
    (g) Effective Dates.--
            (1) Enforcement and uniform application; miscellaneous and 
        technical amendments.--The amendments made by subsections (a), 
        (d), and (f) shall apply to services furnished on or after the 
        date of the enactment of this Act; except that such amendments 
        made by subsections (a) and (d) shall not apply to services of 
        a nonparticipating supplier or other person furnished before 
        January 1, 1994.
            (2) Carrier determinations.--The amendments made by 
        subsection (b) shall apply to contracts as of January 1, 1994.
            (3) EOMBs.--The amendments made by subsection (c)(1) shall 
        apply to explanations of benefits provided on or after January 
        1, 1994.
            (4) Report.--The amendment made by subsection (c)(2) shall 
        apply to reports for years beginning with 1994.
            (5) Practitioners.--The amendments made by subsection (e) 
        shall apply to services furnished on or after January 1, 1994.

SEC. 13446. RELATIVE VALUES FOR PEDIATRIC SERVICES.

    (a) In General.--The Secretary of Health and Human Services shall 
fully develop, by not later than July 1, 1994, relative values for the 
full range of pediatric physicians' services which are consistent with 
the relative values developed for other physicians' services under 
section 1848(c) of the Social Security Act. In developing such values, 
the Secretary shall conduct such refinements as may be necessary to 
produce appropriate estimates for such relative values.
    (b) Study.--
            (1) In general.--The Secretary shall conduct a study of the 
        relative values for pediatric and other services to determine 
        whether there are significant variations in the resources used 
        in providing similar services to different populations. In 
        conducting such study, the Secretary shall consult with 
        appropriate organizations representing pediatricians and other 
        physicians.
            (2) Report.--Not later than July 1, 1994, the Secretary 
        shall submit to Congress a report on the study conducted under 
        paragraph (1). Such report shall include any appropriate 
        recommendations regarding needed changes in coding or other 
        payment policies to ensure that payments for pediatric services 
        appropriately reflect the resources required to provide these 
        services.

SEC. 13447. ANTIGENS UNDER PHYSICIAN FEE SCHEDULE.

    (a) In General.--Section 1848(j)(3) (42 U.S.C. 1395w-4(j)(3)) is 
amended by inserting ``(2)(G),'' after ``(2)(D),''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to services furnished on or after January 1, 1995.

SEC. 13448. ADMINISTRATION OF CLAIMS RELATING TO PHYSICIANS' SERVICES.

    (a) Limitation on Carrier User Fees.--Section 1842(c) (42 U.S.C. 
1395u(c)) is amended by adding at the end the following new paragraph:
    ``(4) Neither a carrier nor the Secretary may impose a fee under 
this title--
            ``(A) for the filing of claims related to physicians' 
        services,
            ``(B) for an error in filing a claim relating to 
        physicians' services or for such a claim which is denied,
            ``(C) for any appeal under this title with respect to 
        physicians' services,
            ``(D) for applying for (or obtaining) a unique identifier 
        under subsection (r), or
            ``(E) for responding to inquiries respecting physicians' 
        services or for providing information with respect to medical 
        review of such services.''.
    (b) Clarification of Permissible Substitute Billing Arrangements.--
            (1) In general.--Clause (D) of section 1842(b)(6) (42 
        U.S.C. 1395u(b)(6)), as amended by section 13449(f), is amended 
        to read as follows: ``(D) payment may be made to a physician 
        for physicians' services (and services furnished incident to 
        such services) furnished by a second physician to patients of 
        the first physician if (i) the first physician is unavailable 
        to provide the services; (ii) the services are furnished 
        pursuant to an arrangement between the two physicians that (I) 
        is informal and reciprocal, or (II) involves per diem or other 
        fee-for-time compensation for such services; (iii) the services 
        are not provided by the second physician over a continuous 
        period of more than 60 days; and (iv) the claim form submitted 
        to the carrier for such services includes the second 
        physician's unique identifier (provided under the system 
        established under subsection (r)) and indicates that the claim 
        meets the requirements of this clause for payment to the first 
        physician''.
            (2) Effective date.--The amendment made by paragraph (1) 
        shall apply to services furnished on or after the first day of 
        the first month beginning more than 60 days after the date of 
        the enactment of this Act.

SEC. 13449. MISCELLANEOUS AND TECHNICAL CORRECTIONS.

    (a) Overvalued Procedures (Section 4101 of OBRA-1990).--(1) Section 
1842(b)(16)(B)(iii) (42 U.S.C. 1395u(b)(16)(B)(iii)) is amended--
            (A) by striking ``, simple and subcutaneous'',
            (B) by striking ``; small'' and inserting ``and small'',
            (C) by striking ``treatments;'' the first place it appears 
        and inserting ``and'',
            (D) by striking ``lobectomy;'',
            (E) by striking ``enterectomy; colectomy; 
        cholecystectomy;'',
            (F) by striking ``; transurerethral resection'' and 
        inserting ``and resection'', and
            (G) by striking ``sacral laminectomy;''.
    (2) Section 4101(b)(2) of OBRA-1990 is amended--
            (A) in the matter before subparagraph (A), by striking 
        ``1842(b)(16)'' and inserting ``1842(b)(16)(B)'', and
            (B) in subparagraph (B)--
                    (i) by striking ``, simple and subcutaneous'',
                    (ii) by striking ``(HCPCS codes 19160 and 19162)'' 
                and inserting ``(HCPCS code 19160)'', and
                    (iii) by striking all that follows ``(HCPCS codes 
                92250'' and inserting ``and 92260).''.
    (b) Radiology Services (Section 4102 of OBRA-1990).--(1) Section 
1834(b)(4) (42 U.S.C. 1395m(b)(4)) is amended by redesignating 
subparagraphs (E) and (F) as subparagraphs (F) and (G), respectively.
    (2) Section 1834(b)(4)(D) (42 U.S.C. 1395m(b)(4)(D)) is amended--
            (A) in the matter before clause (i), by striking ``shall be 
        determined as follows:'' and inserting ``shall, subject to 
        clause (vii), be reduced to the adjusted conversion factor for 
        the locality determined as follows:'',
            (B) in clause (iv), by striking ``Local adjustment.--
        Subject to clause (vii), the conversion factor to be applied 
        to'' and inserting ``Adjusted conversion factor.--The adjusted 
        conversion factor for'',
            (C) in clause (vii), by striking ``under this 
        subparagraph'', and
            (D) in clause (vii), by inserting ``reduced under this 
        subparagraph by'' after ``shall not be''.
    (3) Section 4102(c)(2) of OBRA-1990 is amended by striking 
``radiology services'' and all that follows and inserting ``nuclear 
medicine services''.
    (4) Section 4102(d) of OBRA-1990 is amended by striking ``new 
paragraph'' and inserting ``new subparagraph''.
    (5) Section 1834(b)(4)(E) (42 U.S.C. 1395m(b)(4)(E)) is amended by 
inserting ``Rule for certain scanning services.--'' after ``(E)''.
    (6) Section 1848(a)(2)(D)(iii) (42 U.S.C. 1395w-4(a)(2)(D)(iii)) is 
amended by striking ``that are subject to section 6105(b) of the 
Omnibus Budget Reconciliation Act of 1989'' and by striking ``provided 
under such section'' and inserting ``provided under section 6105(b) of 
the Omnibus Budget Reconciliation Act of 1989''.
    (c) Anesthesia Services (Section 4103 of OBRA-1990).--(1) Section 
4103(a) of OBRA-1990 is amended by striking ``Reduction in Fee 
Schedule'' and inserting ``Reduction in Prevailing Charges''.
    (2) Section 1842(q)(1)(B) (42 U.S.C. 1395u(q)(1)(B)) is amended--
            (A) in the matter before clause (i), by striking ``shall be 
        determined as follows:'' and inserting ``shall, subject to 
        clause (iv), be reduced to the adjusted prevailing charge 
        conversion factor for the locality determined as follows:'', 
        and
            (B) in clause (iii), by striking ``Subject to clause (iv), 
        the prevailing charge conversion factor to be applied in'' and 
        inserting ``The adjusted prevailing charge conversion factor 
        for''.
    (d) Assistants at Surgery (Section 4107 of OBRA-1990).--(1) Section 
4107(c) of OBRA-1990 is amended by inserting ``(a)(1)'' after 
``subsection''.
    (2) Section 4107(a)(2) of OBRA-1990 is amended by adding at the end 
the following: ``In applying section 1848(g)(2)(D) of the Social 
Security Act for services of an assistant-at-surgery furnished during 
1991, the recognized payment amount shall not exceed the maximum amount 
specified under section 1848(i)(2)(A) of such Act (as applied under 
this paragraph in such year).''.
    (e) Technical Components of Diagnostic Services (Section 4108 of 
OBRA-1990).--Section 1842(b) (42 U.S.C. 1395u(b)) is amended by 
redesignating paragraph (18), as added by section 4108(a) of OBRA-1990, 
as paragraph (17) and, in such paragraph, by inserting ``, tests 
specified in paragraph (14)(C)(i),'' after ``diagnostic laboratory 
tests''.
    (f) Reciprocal Billing Arrangements (Section 4110 of OBRA-1990).--
Section 1842(b)(6)(D) (42 U.S.C. 1395u(b)(6)(D)) is amended--
            (1) by striking ``visit services (including emergency 
        visits and related services)'' and inserting ``physicians' 
        services (and services furnished incident to such services)'';
            (2) by striking ``on an occasional, reciprocal basis'' and 
        inserting ``under an arrangement that is informal and 
        reciprocal or involves per diem or other fee-for-time 
        compensation for services'';
            (3) by striking ``visit'' in subclauses (i), (ii), and 
        (iv); and
            (4) in subclause (iii), by striking ``the claim'' and all 
        that follows through the comma at the end and inserting ``the 
        claim meets the requirements of this clause for payment to the 
        first physician''.
    (g) Study of Aggregation Rule for Claims of Similar Physician 
Services (Section 4113 of OBRA-1990).--Section 4113 of OBRA-1990 is 
amended--
            (1) by inserting ``of the Social Security Act'' after 
        ``1869(b)(2)''; and
            (2) by striking ``December 31, 1992'' and inserting 
        ``December 31, 1993''.
    (h) Statewide Fee Schedules (Section 4117 of OBRA-1990).--Section 
4117 of OBRA-1990 is amended--
            (1) in subsection (a)--
                    (A) by striking ``In General.--'', and
                    (B) by striking ``, if the'' and all that follows 
                through ``1991, ''; and
            (2) by striking subsections (b), (c), and (d).
    (i) Other Miscellaneous and Technical Amendments.--(1) The heading 
of section 1834(f) (42 U.S.C. 1395m(f)) is amended by striking ``Fiscal 
Year''.
    (2)(A) Section 4105(b) of OBRA-1990 is amended--
            (i) in paragraph (2), by striking ``amendments'' and 
        inserting ``amendment'', and
            (ii) in paragraph (3), by striking ``amendments made by 
        paragraphs (1) and (2)'' and inserting ``amendment made by 
        paragraph (1)''.
    (B) Section 1848(f)(2)(C) (42 U.S.C. 1395w-4(f)(2)(C)) is amended 
by inserting ``Performance standard rates of increase for fiscal year 
1991.--'' after ``(C)''.
    (C) Section 4105(d) of OBRA-1990 is amended by inserting 
``Publication of Performance Standard Rates.--'' after ``(d)''.
    (3) Section 1842(b)(4)(F) (42 U.S.C. 1395u(b)(4)(F)) is amended--
            (A) in clause (i), by striking ``prevailing charge'' the 
        first place it appears and inserting ``customary charge''; and
            (B) in clause (ii)(III), by striking ``second, third, and 
        fourth'' and inserting ``first, second, and third''.
    (4) Section 1842(b)(4)(F)(ii)(I) (42 U.S.C. 1395u(b)(4)(F)(ii)(I)) 
is amended by striking ``respiratory therapist,''.
    (5) Section 4106(c) of OBRA-1990 is amended by inserting ``of the 
Social Security Act'' after ``1848(d)(1)(B)''.
    (6) Section 4114 of OBRA-1990 is amended by striking ``patients'' 
the second place it appears.
    (7) Section 1848(e)(1)(C) (42 U.S.C. 1395w-4(e)(1)(C)) is amended 
by inserting ``date of the'' after ``since the''.
    (8) Section 4118(f)(1)(D) of OBRA-1990 is amended by striking ``is 
amended''.
    (9) Section 4118(f)(1)(N)(ii) of OBRA-1990 is amended by striking 
``subsection (f)(5)(A)'' and inserting ``subsection (f)(5)(A))''.
    (10) Section 1845(e) (42 U.S.C. 1395w-1(e)) is amended--
            (A) by striking paragraph (2); and
            (B) by redesignating paragraphs (3), (4), and (5) as 
        paragraphs (2), (3), and (4).
    (11) Section 4118(j)(2) of OBRA-1990 is amended by striking ``In 
section'' and inserting ``Section''.
    (12)(A) Section 1848(i)(3) (42 U.S.C. 1395w-4(i)(3)) is amended by 
striking the space before the period at the end.
    (B) Section 1834(a)(10)(B) (42 U.S.C. 1395m(a)(10)(B)) is amended--
            (i) by striking ``apply to'' and inserting ``would 
        otherwise apply to'', and
            (ii) by inserting before the period at the end ``but for 
        the application of section 1848(i)(3)''.
    (j) Effective Date.--The amendments made by this section and the 
provisions of this section shall take effect as if included in the 
enactment of OBRA-1990.

           Subchapter C--Ambulatory Surgical Center Services

SEC. 13451. DESIGNATION OF CERTAIN HOSPITALS AS EYE OR EYE AND EAR 
              HOSPITALS.

    (a) In General.--Section 1833(i) (42 U.S.C. 1395l(i)) is amended--
            (1) in subparagraph (B)(ii)--
                    (A) by striking ``the last sentence of this 
                clause'' and inserting ``paragraph (4)'', and
                    (B) by striking the last sentence; and
            (2) by inserting after paragraph (3) the following new 
        paragraph:
    ``(4)(A) In the case of a hospital that--
            ``(i) makes application to the Secretary and demonstrates 
        that it specializes in eye services or eye and ear services (as 
        determined by the Secretary),
            ``(ii) receives more than 30 percent of its total revenues 
        from outpatient services, and
            ``(iii) on October 1, 1987--
                    ``(I) was an eye specialty hospital or an eye and 
                ear specialty hospital, or
                    ``(II) was operated as an eye or eye and ear unit 
                (as defined in subparagraph (B)) of a general acute 
                care hospital which, on the date of the application 
                described in clause (i), operates less than 20 percent 
                of the beds that the hospital operated on October 1, 
                1987, and has sold or otherwise disposed of a 
                substantial portion of the hospital's other acute care 
                operations,
the cost proportion and ASC proportion in effect under subclauses (I) 
and (II) of paragraph (2)(B)(ii) for cost reporting periods beginning 
in fiscal year 1988 shall remain in effect for cost reporting periods 
beginning on or after October 1, 1988, and before January 1, 1995.
    ``(B) For purposes of this subparagraph (A)(iii)(II), the term `eye 
or eye and ear unit' means a physically separate or distinct unit 
containing separate surgical suites devoted solely to eye or eye and 
ear services.''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
apply to portions of cost reporting periods beginning on or after 
January 1, 1994.

SEC. 13452. TREATMENT OF INTRAOCULAR LENSES.

    (a) Extension of Cap on Payments Through 1994.--
            (1) In general.--Section 4151(c)(3) of OBRA-1990 is amended 
        by striking ``December 31, 1992'' and inserting ``December 31, 
        1994''.
            (2) Effective date.--The amendment made by paragraph (1) 
        this subsection shall be effective as if included in the 
        enactment of OBRA-1990.
    (b) Study of Costs of Intraocular Lenses.--
            (1) Study.--The Secretary of Health and Human Services 
        shall conduct a study, based on recent data, of the acquisition 
        costs to providers of intraocular lenses provided to 
        individuals enrolled under part B of the medicare program and 
        shall include in the study an analysis of the impact of the 
        availability of new technology lenses on such costs.
            (2) Report.--Not later than 1 year after the date of the 
        enactment of this Act, the Secretary shall submit a report on 
        the study conducted under paragraph (1) to the Committee on 
        Finance of the Senate and the Committees on Ways and Means and 
        Energy and Commerce of the House of Representatives, and shall 
        include in the report any recommendations the Secretary 
        considers appropriate regarding the determination of payment 
        amounts for intraocular lenses under part B of the medicare 
        program.

SEC. 13453. TECHNICAL AMENDMENTS.

    (a) Payment Amounts for Services Furnished in Ambulatory Surgical 
Centers.--
            (1) Use of survey to determine incurred costs.--Section 
        1833(i)(2)(A)(i) (42 U.S.C. 1395l(i)(2)(A)(i)) is amended by 
        striking the comma at the end and inserting the following: ``, 
        as determined in accordance with a survey (based upon a 
        representative sample of procedures and facilities) taken not 
        later than January 1, 1994, and every 5 years thereafter, of 
        the actual audited costs incurred by such centers in providing 
        such services,''.
            (2) Automatic application of inflation adjustment.--Section 
        1833(i)(2) (42 U.S.C. 1395l(i)(2)) is amended--
                    (A) in the second sentence of subparagraph (A) and 
                the second sentence of subparagraph (B), by striking 
                ``and may be adjusted by the Secretary, when 
                appropriate,''; and
                    (B) by adding at the end the following new 
                subparagraph:
    ``(C) Notwithstanding the second sentence of subparagraph (A) or 
the second sentence of subparagraph (B), if the Secretary has not 
updated amounts established under such subparagraphs with respect to 
facility services furnished during a fiscal year (beginning with fiscal 
year 1995), such amounts shall be increased by the percentage increase 
in the consumer price index for all urban consumers (U.S. city average) 
for the 12-month period ending with March of the preceding fiscal 
year.''.
            (3) Consultation requirement.--The second sentence of 
        section 1833(i)(1) (42 U.S.C. 1395l(i)(1)) is amended by 
        striking the period and inserting the following: ``, in 
        consultation with appropriate trade and professional 
        organizations.''.
    (b) Adjustments to Payment Amounts for New Technology Intraocular 
Lenses.--
            (1) Establishment of process for review of amounts.--Not 
        later than 1 year after the date of the enactment of this Act, 
        the Secretary of Health and Human Services (in this subsection 
        referred to as the ``Secretary'') shall develop and implement a 
        process under which interested parties may request review by 
        the Secretary of the appropriateness of the reimbursement 
        amount provided under section 1833(i)(2)(A)(iii) of the Social 
        Security Act with respect to a class of new technology 
        intraocular lenses. For purposes of the preceding sentence, an 
        intraocular lens may not be treated as a new technology lens 
        unless it has been approved by the Food and Drug 
        Administration.
            (2) Factors considered.--In determining whether to provide 
        an adjustment of payment with respect to a particular lens 
        under paragraph (1), the Secretary shall take into account 
        whether use of the lens is likely to result in reduced risk of 
        intraoperative or postoperative complication or trauma, 
        accelerated postoperative recovery, reduced induced 
        astigmatism, improved postoperative visual acuity, more stable 
        postoperative vision, or other comparable clinical advantages.
            (3) Notice and comment.--The Secretary shall publish notice 
        in the Federal Register from time to time (but no less often 
        than once each year) of a list of the requests that the 
        Secretary has received for review under this subsection, and 
        shall provide for a 30-day comment period on the lenses that 
        are the subjects of the requests contained in such notice. The 
        Secretary shall publish a notice of his determinations with 
        respect to intraocular lenses listed in the notice within 90 
        days after the close of the comment period.
            (4) Effective date of adjustment.--Any adjustment of a 
        payment amount (or payment limit) made under this subsection 
        shall become effective not later than 30 days after the date on 
        which the notice with respect to the adjustment is published 
        under paragraph (3).
    (c) Technical Correction Relating to Blend Amounts for Ambulatory 
Surgical Center Payments.--
            (1) In general.--Subclauses (I) and (II) of section 
        1833(i)(3)(B)(ii) (42 U.S.C. 1395l(i)(3)(B)(ii)) are each 
        amended--
                    (A) by striking ``for reporting'' and inserting 
                ``for portions of cost reporting''; and
                    (B) by striking ``and on or before'' and inserting 
                ``and ending on or before''.
            (2) Effective date.--The amendments made by paragraph (1) 
        shall take effect as if included in the enactment of OBRA-1990.
    (d) Technical Correction Related to Cataract Surgery.--Effective as 
if included in the enactment of OBRA-1990, section 4151(c)(3) of such 
Act is amended by striking ``for the insertion of an intraocular lens'' 
and inserting ``for an intraocular lens inserted''.

                Subchapter D--Durable Medical Equipment

SEC. 13461. CERTIFICATION OF SUPPLIERS.

    (a) Requirements.--
            (1) In general.--Section 1834 (42 U.S.C. 1395m) is amended 
        by adding at the end the following new subsection:
    ``(i) Requirements for Suppliers of Medical Equipment and 
Supplies.--
            ``(1) Issuance and renewal of supplier number.--
                    ``(A) Payment.--Except as provided in subparagraph 
                (C), no payment may be made under this part after 
                October 1, 1993, for items furnished by a supplier of 
                medical equipment and supplies unless such supplier 
                obtains (and renews at such intervals as the Secretary 
                may require) a supplier number.
                    ``(B) Standards for possessing a supplier number.--
                A supplier may not obtain a supplier number unless--
                            ``(i) for medical equipment and supplies 
                        furnished on or after October 1, 1993, and on 
                        or before December 31, 1994, the supplier meets 
                        standards prescribed by the Secretary; and
                            ``(ii) for medical equipment and supplies 
                        furnished on or after January 1, 1995, the 
                        supplier meets revised standards prescribed by 
                        the Secretary (in consultation with 
                        representatives of suppliers of medical 
                        equipment and supplies, carriers, and 
                        consumers) that shall include requirements that 
                        the supplier--
                                    ``(I) comply with all applicable 
                                State and Federal licensure and 
                                regulatory requirements;
                                    ``(II) maintain a physical facility 
                                on an appropriate site;
                                    ``(III) have proof of appropriate 
                                liability insurance; and
                                    ``(IV) meet such other requirements 
                                as the Secretary may specify.
                    ``(C) Exception for items furnished as incident to 
                a physician's service.--Subparagraph (A) shall not 
                apply with respect to medical equipment and supplies 
                furnished as an incident to a physician's service.
                    ``(D) Prohibition against multiple supplier 
                numbers.--The Secretary may not issue more than one 
                supplier number to any supplier of medical equipment 
                and supplies unless the issuance of more than one 
                number is appropriate to identify subsidiary or 
                regional entities under the supplier's ownership or 
                control.
                    ``(E) Prohibition against delegation of supplier 
                determinations.--The Secretary may not delegate (other 
                than by contract under section 1842) the responsibility 
                to determine whether suppliers meet the standards 
                necessary to obtain a supplier number.
            ``(2) Certificates of medical necessity.--
                    ``(A) Standardized certificates.--Not later than 
                October 1, 1993, the Secretary shall, in consultation 
                with carriers under this part, develop one or more 
                standardized certificates of medical necessity (as 
                defined in subparagraph (C)) for medical equipment and 
                supplies for which the Secretary determines that such a 
                certificate is necessary.
                    ``(B) Prohibition against distribution by suppliers 
                of certificates of medical necessity.--
                            ``(i) In general.--Except as provided in 
                        clause (ii), a supplier of medical equipment 
                        and supplies may not distribute to physicians 
                        or to individuals entitled to benefits under 
                        this part for commercial purposes any completed 
                        or partially completed certificates of medical 
                        necessity on or after October 1, 1993.
                            ``(ii) Exception for certain billing 
                        information.--Clause (i) shall not apply with 
                        respect to a certificate of medical necessity 
                        for any item that is not contained on the list 
                        of potentially overused items developed by the 
                        Secretary under subsection (a)(15)(A) to the 
                        extent that such certificate contains only 
                        information completed by the supplier of 
                        medical equipment and supplies identifying such 
                        supplier and the beneficiary to whom such 
                        medical equipment and supplies are furnished, a 
                        description of such medical equipment and 
                        supplies, any product code identifying such 
                        medical equipment and supplies, and any other 
                        administrative information (other than 
                        information relating to the beneficiary's 
                        medical condition) identified by the Secretary. 
                        In the event a supplier provides a certificate 
                        of medical necessity containing information 
                        permitted under this clause, such certificate 
                        shall also contain the fee schedule amount and 
                        the supplier's charge for the medical equipment 
                        or supplies being furnished prior to 
                        distribution of such certificate to the 
                        physician.
                            ``(iii) Penalty.--Any supplier of medical 
                        equipment and supplies who knowingly and 
                        willfully distributes a certificate of medical 
                        necessity in violation of clause (i) is subject 
                        to a civil money penalty in an amount not to 
                        exceed $1,000 for each such certificate of 
                        medical necessity so distributed. The 
                        provisions of section 1128A (other than 
                        subsections (a) and (b)) shall apply to civil 
                        money penalties under this subparagraph in the 
                        same manner as they apply to a penalty or 
                        proceeding under section 1128A(a).
                    ``(C) Definition.--For purposes of this paragraph, 
                the term `certificate of medical necessity' means a 
                form or other document containing information required 
                by the Secretary to be submitted to show that a covered 
                item is reasonable and necessary for the diagnosis or 
                treatment of illness or injury or to improve the 
                functioning of a malformed body member.
    ``(3) Coverage and review criteria.--
                    ``(A) Development and establishment.--Not later 
                than January 1, 1995, the Secretary, in consultation 
                with representatives of suppliers of medical equipment 
                and supplies, individuals enrolled under this part, and 
                appropriate medical specialty societies, shall develop 
                and establish uniform national coverage and utilization 
                review criteria for 200 items of medical equipment and 
                supplies selected in accordance with the standards 
                described in subparagraph (B). The Secretary shall 
                publish the criteria as part of the instructions 
                provided to fiscal intermediaries and carriers under 
                this part and no further publication, including 
                publication in the Federal Register, shall be required.
                    ``(B) Standards for selecting items subject to 
                criteria.--The Secretary may select an item for 
                coverage under the criteria developed and established 
                under subparagraph (A) if the Secretary finds that--
                            ``(i) the item is frequently purchased or 
                        rented by beneficiaries;
                            ``(ii) the item is frequently subject to a 
                        determination that such item is not medically 
                        necessary; or
                            ``(iii) the coverage or utilization 
                        criteria applied to the item (as of the date of 
                        the enactment of this subsection) is not 
                        consistent among carriers.
                    ``(C) Annual review and expansion of items subject 
                to criteria.--The Secretary shall annually review the 
                coverage and utilization of items of medical equipment 
                and supplies to determine whether items not included 
                among the items selected under subparagraph (A) should 
                be made subject to uniform national coverage and 
                utilization review criteria, and, if appropriate, shall 
                develop and apply such criteria to such additional 
                items.
            ``(4) Definition.--The term `medical equipment and 
        supplies'' means--
                    ``(A) durable medical equipment (as defined in 
                section 1861(n));
                    ``(B) prosthetic devices (as described in section 
                1861(s)(8));
                    ``(C) orthotics and prosthetics (as described in 
                section 1861(s)(9));
                    ``(D) surgical dressings (as described in section 
                1861(s)(5));
                    ``(E) such other items as the Secretary may 
                determine; and
                    ``(F) for purposes of paragraphs (1) and (3)--
                            ``(i) home dialysis supplies and equipment 
                        (as described in section 1861(s)(2)(F)), and
                            ``(ii) immunosuppressive drugs (as 
                        described in section 1861(s)(2)(J)).''.
    (2) Conforming amendment.--Effective October 1, 1993, paragraph 
(16) of section 1834(a) (42 U.S.C. 1395m(a)) is repealed.
    (b) Report on effect of uniform criteria on utilization of items.--
Not later than July 1, 1995, the Secretary shall submit a report to the 
Committee on Ways and Means and the Committee on Energy and Commerce of 
the House of Representatives and the Committee on Finance of the Senate 
analyzing the impact of the uniform criteria established under section 
1834(i)(3)(A) of the Social Security Act (as added by subsection (a)) 
on the utilization of items of medical equipment and supplies by 
individuals enrolled under part B of the medicare program.
    (c) Use of Covered Items by Disabled Beneficiaries.--
            (1) In general.--The Secretary of Health and Human Services 
        in consultation with representatives of suppliers of durable 
        medical equipment under part B of the medicare program and 
        individuals entitled to benefits under such program on the 
        basis of disability, shall conduct a study of the effects of 
        the methodology for determining payments for items of such 
        equipment under such part on the ability of such individuals to 
        obtain items of such equipment, including customized items.
            (2) Report.--Not later than May 1, 1994, the Secretary 
        shall submit a report to Congress on the study conducted under 
        paragraph (1), and shall include in the report such 
        recommendations as the Secretary considers appropriate to 
        assure that disabled medicare beneficiaries have access to 
        items of durable medical equipment.
    (d) Criteria for Treatment of Items as Prosthetics Devices or 
Orthotics and Prosthetics.--Not later than July 1, 1994, the Secretary 
of Health and Human Services shall submit a report to the Committees on 
Ways and Means and Energy and Commerce of the House of Representatives 
and the Committee on Finance of the Senate describing prosthetic 
devices or orthotics and prosthetics covered under part B of the 
medicare program that do not require individualized or custom fitting 
and adjustment to be used by a patient. Such report shall include 
recommendations for an appropriate methodology for determining the 
amount of payment for such items under such program.

SEC. 13462. PROHIBITION AGAINST CARRIER FORUM SHOPPING.

    (a) In General.--Section 1834(a)(12) (42 U.S.C. 1395m(a)(12)) is 
amended to read as follows:
            ``(12) Use of carriers to process claims.--
                    ``(A) Designation of regional carriers.--The 
                Secretary may designate, by regulation under section 
                1842, one carrier for one or more entire regions to 
                process all claims within the region for covered items 
                under this section.
                    ``(B) Prohibition against carrier shopping.--(i) No 
                supplier of a covered item may present or cause to be 
                presented a claim for payment under this part unless 
                such claim is presented to the appropriate regional 
                carrier (as designated by the Secretary).
                    ``(ii) For purposes of clause (i), the term 
                `appropriate regional carrier' means the carrier having 
                jurisdiction over the geographic area that includes the 
                permanent residence of the patient to whom the item is 
                furnished.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to items furnished on or after October 1, 1993.
    (c) Clarification of Authority to Designate Carriers for Other 
Items and Services.--Nothing in this subsection or the amendment made 
by this subsection may be construed to restrict the authority of the 
Secretary of Health and Human Services to designate regional carriers 
or modify claims jurisdiction rules with respect to items or services 
under part B of the medicare program that are not covered items under 
section 1834(a) of the Social Security Act or prosthetic devices or 
orthotics and prosthetics under section 1834(h) of such Act.

SEC. 13463. RESTRICTIONS ON CERTAIN MARKETING AND SALES ACTIVITIES.

    (a) Prohibiting Unsolicited Telephone Contacts From Suppliers of 
Durable Medical Equipment to Medicare Beneficiaries.--
            (1) In general.--Section 1834(a) (42 U.S.C. 1395m(a)) is 
        amended by adding at the end the following new paragraph:
            ``(17) Prohibition against unsolicited telephone contacts 
        by suppliers.--
                    ``(A) In general.--A supplier of a covered item 
                under this subsection may not contact an individual 
                enrolled under this part by telephone regarding the 
                furnishing of a covered item to the individual (other 
                than a covered item the supplier has already furnished 
                to the individual) unless--
                            ``(i) the individual gives permission to 
                        the supplier to make contact by telephone for 
                        such purpose; or
                            ``(ii) the supplier has furnished a covered 
                        item under this subsection to the individual 
                        during the 15-month period preceding the date 
                        on which the supplier contacts the individual 
                        for such purpose.
                    ``(B) Prohibiting payment for items furnished 
                subsequent to unsolicited contacts.--If a supplier 
                knowingly contacts an individual in violation of 
                subparagraph (A), no payment may be made under this 
                part for any item subsequently furnished to the 
                individual by the supplier.
                    ``(C) Exclusion from program for suppliers engaging 
                in pattern of unsolicited contacts.--If a supplier 
                knowingly contacts individuals in violation of 
                subparagraph (A) to such an extent that the supplier's 
                conduct establishes a pattern of contacts in violation 
                of such subparagraph, the Secretary shall exclude the 
                supplier from participation in the programs under this 
                Act, in accordance with the procedures set forth in 
                subsections (c), (f), and (g) of section 1128.''.
            (2) Requiring refund of amounts collected for disallowed 
        items.--Section 1834(a) (42 U.S.C. 1395m(a)), as amended by 
        paragraph (1), is amended by adding at the end the following 
        new paragraph:
            ``(18) Refund of amounts collected for certain disallowed 
        items.--
                    ``(A) In general.--If a nonparticipating supplier 
                furnishes to an individual enrolled under this part a 
                covered item for which no payment may be made under 
                this part by reason of paragraph (17)(B), the supplier 
                shall refund on a timely basis to the patient (and 
                shall be liable to the patient for) any amounts 
                collected from the patient for the item, unless--
                            ``(i) the supplier establishes that the 
                        supplier did not know and could not reasonably 
                        have been expected to know that payment may not 
                        be made for the item by reason of paragraph 
                        (17)(B), or
                            ``(ii) before the item was furnished, the 
                        patient was informed that payment under this 
                        part may not be made for that item and the 
                        patient has agreed to pay for that item.
                    ``(B) Sanctions.--If a supplier knowingly and 
                willfully fails to make refunds in violation of 
                subparagraph (A), the Secretary may apply sanctions 
                against the supplier in accordance with section 
                1842(j)(2).
                    ``(C) Notice.--Each carrier with a contract in 
                effect under this part with respect to suppliers of 
                covered items shall send any notice of denial of 
                payment for covered items by reason of paragraph 
                (17)(B) and for which payment is not requested on an 
                assignment-related basis to the supplier and the 
                patient involved.
                    ``(D) Timely basis defined.--A refund under 
                subparagraph (A) is considered to be on a timely basis 
                only if--
                            ``(i) in the case of a supplier who does 
                        not request reconsideration or seek appeal on a 
                        timely basis, the refund is made within 30 days 
                        after the date the supplier receives a denial 
                        notice under subparagraph (C), or
                            ``(ii) in the case in which such a 
                        reconsideration or appeal is taken, the refund 
                        is made within 15 days after the date the 
                        supplier receives notice of an adverse 
                        determination on reconsideration or appeal.''.
    (b) Conforming Amendment.--Section 1834(h)(3) (42 U.S.C. 
1395m(h)(3)) is amended by striking ``Paragraph (12)'' and inserting 
``Paragraphs (12) and (17)''.
    (c) Effective Date.--The amendments made by subsections (a) and (b) 
shall apply to items furnished after the expiration of the 60-day 
period that begins on the date of the enactment of this Act.

SEC. 13464. ANTI-KICKBACK CLARIFICATION.

    (a) In General.--Section 1128B(b)(3)(B) (42 U.S.C. 1320a-
7b(b)(3)(B)) is amended by inserting before the semicolon ``(except 
that in the case of a contract supply arrangement between any entity 
and a supplier of medical supplies and equipment (as defined in section 
1834(i)(4), but not including items described in subparagraph (F) of 
such section), such employment shall not be considered bona fide to the 
extent that it includes tasks of a clerical and cataloging nature in 
transmitting to suppliers assignment rights of individuals eligible for 
benefits under part B of title XVIII, or performance of warehousing or 
stock inventory functions)''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply with respect to services furnished on or after the first day of 
the first month that begins after the expiration of the 60-day period 
beginning on the date of the enactment of this Act.

SEC. 13465. LIMITATIONS ON BENEFICIARY LIABILITY FOR NONCOVERED 
              SERVICES.

    (a) In General.--Section 1834(i) (42 U.S.C. 1395m(i)), as added by 
section 13461(a)(1), is amended--
            (1) by redesignating paragraph (4) as paragraph (5), and
            (2) by inserting after paragraph (3) the following new 
        paragraph:
            ``(4) Limitation on patient liability.--If a supplier of 
        medical equipment and supplies (as defined in paragraph (5))--
                    ``(A) furnishes an item or service to a beneficiary 
                for which no payment may be made by reason of paragraph 
                (1);
                    ``(B) furnishes an item or service to a beneficiary 
                for which payment is denied in advance under subsection 
                (a)(15); or
                    ``(C) furnishes an item or service to a beneficiary 
                for which payment is denied under section 1862(a)(1);
        any expenses incurred for items and services furnished to an 
        individual by such a supplier not on an assigned basis shall be 
        the responsibility of such supplier. The individual shall have 
        no financial responsibility for such expenses and the supplier 
        shall refund on a timely basis to the individual (and shall be 
        liable to the individual for) any amounts collected from the 
        individual for such items or services. The provisions of 
        subsection (a)(18) shall apply to refunds required under the 
        previous sentence in the same manner as such provisions apply 
        to refunds under such subsection.''.
            (2) Conforming amendment.--Section 1128B(b)(3)(B) (42 
        U.S.C. 1320a-7b(b)(3)(B)), as amended by section 13464(a), is 
        amended by striking ``1834(i)(4)'' and inserting 
        ``1834(i)(5)''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
apply to items or services furnished on or after October 1, 1993.

SEC. 13466. ADJUSTMENTS FOR INHERENT REASONABLENESS.

    (a) Adjustments Made to Final Payment Amounts.--
            (1) In general.--Section 1834(a)(10)(B) (42 U.S.C. 
        1395m(a)(10)(B)) is amended by adding at the end the following: 
        ``In applying such provisions to payments for an item under 
        this subsection, the Secretary shall make adjustments to the 
        payment basis for the item described in paragraph (1)(B) if the 
        Secretary determines (in accordance with such provisions and on 
        the basis of prices and costs applicable at the time the item 
        is furnished) that such payment basis is not inherently 
        reasonable.''.
            (2) Effective date.--The amendment made by paragraph (1) 
        shall take effect on the date of the enactment of this Act.
    (b) Adjustment Required for Certain Items.--
            (1) In general.--In accordance with section 1834(a)(10)(B) 
        of the Social Security Act (as amended by subsection (a)), the 
        Secretary of Health and Human Services shall determine whether 
        the payment amounts for the items described in paragraph (2) 
        are not inherently reasonable, and shall adjust such amounts in 
        accordance with such section if the amounts are not inherently 
        reasonable.
            (2) Items described.--The items referred to in paragraph 
        (1) are decubitus care equipment, transcutaneous electrical 
        nerve stimulators, and any other items considered appropriate 
        by the Secretary.

SEC. 13467. TREATMENT OF NEBULIZERS AND ASPIRATORS.

    (a) In General.--Section 1834(a)(3)(A) (42 U.S.C. 1395m(a)(3)(A)) 
is amended by striking ``ventilators, aspirators, IPPB machines, and 
nebulizers'' and inserting ``ventilators and IPPB machines''.
    (b) Payment for Accessories Relating to Nebulizers and 
Aspirators.--Section 1834(a)(2)(A) (42 U.S.C. 1395m(a)) is amended--
            (1) by striking ``or'' at the end of clause (i),
            (2) by adding ``or'' at the end of clause (ii), and
            (3) by inserting after clause (ii) the following new 
        clause:
                            ``(iii) which is an accessory used in 
                        conjunction with a nebulizer or aspirator,''.
    (c) Effective Date.--The amendments made by this section shall 
apply to items furnished on or after January 1, 1994.

SEC. 13468. PAYMENT FOR OSTOMY SUPPLIES AND OTHER SUPPLIES.

    (a) Ostomy Supplies, Tracheostomy Supplies, and Urologicals.--
            (1) In general.--Section 1834(h)(1) (42 U.S.C. 1395m(h)(1)) 
        is amended by adding at the end the following new subparagraph:
                    ``(E) Exception for certain items.--Payment for 
                ostomy supplies, tracheostomy supplies, and urologicals 
                shall be made in accordance with subparagraphs (B) and 
                (C) of section 1834(a)(2).''.
            (2) Conforming amendment.--Section 1834(h)(1)(B) (42 U.S.C. 
        1395m(h)(1)(B)) is amended by striking ``subparagraph (C),'' 
        and inserting ``subparagraphs (C) and (E),''.
            (3) Effective date.--The amendments made by this subsection 
        shall apply to items furnished on or after January 1, 1994.
    (b) Surgical Dressings.--
            (1) In general.--Section 1834 (42 U.S.C. 1395m), as amended 
        by section 13461(a), is amended by adding at the end the 
        following new subsection:
    ``(j) Payment for Surgical Dressings.--
            ``(1) In general.--Payment under this subsection for 
        surgical dressings (described in section 1861(s)(5)) shall be 
        made in a lump sum amount for the purchase of the item in an 
        amount equal to 80 percent of the lesser of--
                    ``(A) the actual charge for the item; or
                    ``(B) a payment amount determined in accordance 
                with the methodology described in subparagraphs (B) and 
                (C) of subsection (a)(2) (except that in applying such 
                methodology, the national limited payment amount 
                referred to in such subparagraphs shall be initially 
                computed based on local payment amounts using average 
                reasonable charges for the 12-month period ending 
                December 31, 1992, increased by the covered item 
                updates described in such subsection for 1993 and 
                1994).
            ``(2) Exceptions.--Paragraph (1) shall not apply to 
        surgical dressings that are--
                    ``(A) furnished as an incident to a physician's 
                professional service; or
                    ``(B) furnished by a home health agency.''.
            (2) Conforming amendment.--Section 1833(a)(1) (42 U.S.C. 
        1395l(a)(1)), as amended by sections 13478(e)(2) and 
        13445(e)(1), is amended--
                    (A) by striking ``and'' before ``(P)'', and
                    (B) by inserting before the semicolon at the end 
                the following: ``, and (Q) with respect to surgical 
                dressings, the amounts paid shall be the amounts 
                determined under section 1834(j);''.
            (3) Effective date.--The amendments made by this subsection 
        shall apply to items furnished on or after January 1, 1994.
    (c) Reduction in Payments for TENS Devices.--
            (1) In general.--Section 1834(a)(1)(D) (42 U.S.C. 
        1395m(a)(1)(D)) is amended by striking ``15 percent'' the 
        second place it appears and inserting ``45 percent''.
            (2) Effective date.--The amendment made by paragraph (1) 
        shall apply to items furnished on or after January 1, 1994.

SEC. 13469. MISCELLANEOUS AND TECHNICAL CORRECTIONS.

    (a) Updates to Payment Amounts.--Subparagraph (A) of section 
1834(a)(14) (42 U.S.C. 1395m(a)(14)) is amended to read as follows:
                    ``(A) for 1991 and 1992, the percentage increase in 
                the consumer price index for all urban consumers (U.S. 
                city average) for the 12-month period ending with June 
                of the previous year reduced by 1 percentage point; 
                and''.
    (b) Treatment of Potentially Overused Items and Advanced 
Determinations of Coverage.--
            (1) In general.--Effective on the date of the enactment of 
        this Act, section 1834(a)(15) (42 U.S.C. 1395m(a)(15)) is 
        amended to read as follows:
            ``(15) Special treatment for potentially overused items.--
                    ``(A) Development of list of items by secretary.--
                The Secretary shall develop and periodically update a 
                list of items for which payment may be made under this 
                subsection that are potentially overused, and shall 
                include in such list seat-lift mechanisms, 
                transcutaneous electrical nerve stimulators, motorized 
                scooters, decubitus care mattresses, and any such other 
                item determined by the Secretary to be potentially 
                overused on the basis of any of the following 
                criteria--
                            ``(i) the item is marketed directly to 
                        potential patients;
                            ``(ii) the item is marketed with an offer 
                        to potential patients to waive the costs of 
                        coinsurance associated with the item or is 
                        marketed as being available at no cost to 
                        policyholders of a medicare supplemental policy 
                        (as defined in section 1882(g)(1));
                            ``(iii) the item has been subject to a 
                        consistent pattern of overutilization; or
                            ``(iv) a high proportion of claims for 
                        payment for such item under this part may not 
                        be made because of the application of section 
                        1862(a)(1).
                    ``(B) Items subject to special carrier scrutiny.--
                Payment may not be made under this part for any item 
                contained in the list developed by the Secretary under 
                subparagraph (A) unless the carrier has subjected the 
                claim for payment for the item to special scrutiny or 
                has followed the procedures described in paragraph 
                (11)(C) with respect to the item.''.
    (2) Advance determination by carriers.--Effective January 1, 1994, 
section 1834(a)(11) (42 U.S.C. 1395m(a)) is amended by adding at the 
end the following new subparagraph:
                    ``(C) Carrier determinations for certain items in 
                advance.--A carrier shall determine in advance whether 
                payment for an item may not be made under this 
                subsection because of the application of section 
                1862(a)(1) if--
                            ``(i) the item is a customized item (other 
                        than inexpensive items specified by the 
                        Secretary); or
                            ``(ii) the item is a specified covered item 
                        under subparagraph (B).''.
    (3) Inclusion in carrier performance evaluations.--Effective for 
standards applied for contract years beginning after the date of the 
enactment of this Act, section 1842(c) (42 U.S.C. 1395u(c)), as amended 
by section 13448(a), is amended by adding at the end the following new 
paragraph:
    ``(5) Each contract under this section which provides for the 
disbursement of funds, as described in subsection (a)(1)(B), shall 
require the carrier to meet criteria developed by the Secretary to 
measure the timeliness of carrier responses to requests for payment of 
items described in section 1834(a)(11)(C).''.
    (4) Application to prosthetic devices and orthotics and 
prosthetics.--Section 1834(h)(3) (42 U.S.C. 1395m(h)(3)) is amended by 
striking ``paragraph (10) and paragraph (11)'' and inserting 
``paragraphs (10) and (11)''.
    (c) Study of Variations in Durable Medical Equipment Supplier 
Costs.--
            (1) Collection and analysis of supplier cost data.--The 
        Administration of the Health Care Financing Administration 
        shall, in consultation with appropriate organizations, collect 
        data on supplier costs of durable medical equipment for which 
        payment may be made under part B of the medicare program, and 
        shall analyze such data to determine the proportions of such 
        costs attributable to the service and product components of 
        furnishing such equipment and the extent to which such 
        proportions vary by type of equipment and by the geographic 
        region in which the supplier is located.
            (2) Development of geographic adjustment index; reports.--
        Not later than January 1, 1995--
                    (A) the Administrator shall submit a report to the 
                Committees on Energy and Commerce and Ways and Means of 
                the House of Representatives and the Committee on 
                Finance of the Senate on the data collected and the 
                analysis conducted under paragraph (1), and shall 
                include in such report the Administrator's 
                recommendations for a geographic cost adjustment index 
                for suppliers of durable medical equipment under the 
                medicare program and an analysis of the impact of such 
                proposed index on payments under the medicare program; 
                and
                    (B) the Comptroller General shall submit a report 
                to the Committees on Energy and Commerce and Ways and 
                Means of the House of Representatives and the Committee 
                on Finance of the Senate analyzing on a geographic 
                basis the supplier costs of durable medical equipment 
                under the medicare program.
    (d) Oxygen Retesting.--Section 1834(a)(5)(E) (42 U.S.C. 
1395m(a)(5)(E)) is amended by striking ``55'' and inserting ``56''.
    (e) Other Miscellaneous and Technical Amendments.--(1) Section 
4152(a)(3) of OBRA-1990 is amended by striking ``amendment made by 
subsection (a)'' and inserting ``amendments made by this subsection''.
    (2) Section 4152(c)(2) of OBRA-1990 is amended by striking 
``1395m(a)(7)(A)'' and inserting ``1395m(a)(7)''.
    (3) Section 1834(a)(7)(A)(iii)(II) (42 U.S.C. 
1395m(a)(7)(A)(iii)(II)) is amended by striking ``clause (v)'' and 
inserting ``clause (vi)''.
    (4) Section 1834(a)(7)(C)(i) (42 U.S.C. 1395m(a)(7)(C)(i)) is 
amended by striking ``or paragraph (3)''.
    (5) Section 1834(a)(3) (42 U.S.C. 1395m(a)(3)) is amended by 
striking subparagraph (D).
    (6) Section 4153(c)(1) of OBRA-1990 is amended by striking 
``1834(a)'' and inserting ``1834(h)''.
    (7) Section 4153(d)(2) of OBRA-1990 is amended by striking 
``Reconiliation'' and inserting ``Reconciliation''.
    (8)(A) Section 1834(a) (42 U.S.C. 1395m(a)) is amended by striking 
paragraph (6).
    (B) Section 1834(a) (42 U.S.C. 1395m(a)) is amended--
            (i) in subparagraphs (A) and (B) of paragraph (1), by 
        striking ``(2) through (7)'' each place it appears and 
        inserting ``(2) through (5) and (7)'';
            (ii) in paragraph (7), by striking ``(2) through (6)'' and 
        inserting ``(2) through (5)'';
            (iii) in paragraph (8), by striking ``paragraphs (6) and 
        (7)'' each place it appears in the matter preceding 
        subparagraph (A) and in subparagraph (C) and inserting 
        ``paragraph (7)''; and
            (iv) in paragraph (8)(A)(i), by striking ``described--'' 
        and all that follows and inserting ``described in paragraph (7) 
        equal to the average of the purchase prices on the claims 
        submitted on an assignment-related basis for the unused item 
        supplied during the 6-month period ending with December 
        1986.''.
    (9) The amendments made by this subsection shall take effect as if 
included in the enactment of OBRA-1990.

                     Subchapter E--Other Provisions

SEC. 13471. CLARIFYING PAYMENTS FOR MEDICALLY DIRECTED CERTIFIED 
              REGISTERED NURSE ANESTHETIST SERVICES.

    (a) In General.--Section 1833(l)(4)(B) (42 U.S.C. 1395l(l)(4)(B)) 
is amended to read as follows:
    ``(B) Except as provided in subparagraph (D), the conversion factor 
used to determine the amount paid under the fee schedule under this 
subsection for services furnished by a certified registered nurse 
anesthetist who is medically directed--
            ``(i) in a year after 1993 and before 1997, shall be 
        $10.75, or
            ``(ii) in a subsequent calendar year, shall be the previous 
        year's conversion factor increased by the update determined 
        under section 1848(d)(3) for physician anesthesia services for 
        that year.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to services furnished on or after January 1, 1994.

SEC. 13472. EXTENSION OF ALZHEIMER'S DISEASE DEMONSTRATION PROJECTS.

    Section 9342 of OBRA-1986, as amended by section 4164(a)(2) of 
OBRA-1990, is amended--
            (1) in subsection (c)(1), by striking ``4 years'' and 
        inserting ``5 years''; and
            (2) in subsection (f), --
                    (A) by striking ``$55,000,000'' and inserting 
                ``$58,000,000'', and
                    (B) by striking ``$3,000,000'' and inserting 
                ``$5,000,000''.

SEC. 13473. ORAL CANCER DRUGS.

    (a) New Coverage of Certain Self-Administered Anticancer Drugs.--
Section 1861(s)(2) (42 U.S.C. 1395(s)(2)), as amended by section 
13478(f)(8)(B), is amended--
            (1) by striking ``and'' at the end of subparagraph (N);
            (2) by adding ``and'' at the end of subparagraph (O); and
            (3) by adding at the end the following new subparagraph:
            ``(P) an oral drug (which is approved by the Federal Food 
        and Drug Administration) prescribed for use as an anticancer 
        chemotherapeutic agent for a given indication, and containing 
        an active ingredient (or ingredients), which is the same 
        indication and active ingredient (or ingredients) as a drug 
        which the carrier determines would be covered pursuant to 
        subparagraph (A) or (B) if the drug could not be self-
        administered;''.
    (b) Uniform Coverage of ``Off-Label'' Anticancer Drugs.--Section 
1861(t) (42 U.S.C. 1395x(t)) is amended--
            (1) by inserting ``(1)'' after ``(t)'';
            (2) by striking ``(m)(5) of this section'' and inserting 
        ``(m)(5) and paragraph (2)''; and
            (3) by adding at the end the following new paragraph:
    ``(2)(A) For purposes of paragraph (1), the term `drugs' also 
includes any drugs or biologicals used in an anticancer 
chemotherapeutic regimen for a medically accepted indication (as 
described in subparagraph (B)).
    ``(B) In subparagraph (A), the term `medically accepted 
indication', with respect to the use of a drug, includes any use which 
has been approved by the Food and Drug Administration for the drug, and 
includes another use of the drug if--
            ``(i) the drug has been approved by the Food and Drug 
        Administration, and
            ``(ii) the carrier involved determines, based upon guidance 
        provided by the Secretary to carriers for determining medically 
        accepted uses of drugs, that the use is medically accepted 
        taking into account the uses of such drug which are--
                    ``(I) included (or approved for inclusion) in one 
                or more of the following compendia: the American 
                Hospital Formulary Service-Drug Information, the 
                American Medical Association Drug Evaluations, and the 
                United States Pharmacopoeia-Drug Information; or
                    ``(II) supported by clinical evidence in peer 
                reviewed medical literature appearing in publications 
                which have been specifically approved for purposes of 
                this paragraph by the Secretary.''.
    (c) Study of Medicare Coverage of Patient Care Costs Associated 
With Clinical Trials of New Cancer Therapies.--
            (1) Study.--The Secretary of Health and Human Services 
        shall conduct a study of the effects of expressly covering 
        under the medicare program the patient care costs for 
        beneficiaries enrolled in clinical trials of new cancer 
        therapies, where the protocol for the trial has been approved 
        by the National Cancer Institute or meets similar scientific 
        and ethical standards, including approval by an institutional 
        review board. The study shall include--
                    (A) an estimate of the cost of such coverage, 
                taking into account the extent to which medicare 
                currently pays for such patient care costs in practice;
                    (B) an assessment of the extent to which such 
                clinical trials represent the best available treatment 
                for the patients involved and of the effects of 
                participation in the trials on the health of such 
                patients;
                    (C) an assessment of whether progress in developing 
                new anticancer therapies would be assisted by medicare 
                coverage of such patient care costs; and
                    (D) an evaluation of whether there should be 
                special criteria for the admission of medicare 
                beneficiaries (on account of their age or physical 
                condition) to clinical trials for which medicare would 
                pay the patient care costs.
            (2) Report.--Not later than 2 years after the date of the 
        enactment of this Act, the Secretary of Health and Human 
        Services shall submit a report on the study conducted under 
        paragraph (1) to the Committee on Ways and Means and the 
        Committee on Energy and Commerce of the House of 
        Representatives and the Committee on Finance of the Senate. 
        Such report shall include recommendations as to the coverage 
        under the medicare program of patient care costs of 
        beneficiaries enrolled in clinical trials of new cancer 
        therapies.
    (d) Effective Date.--The amendments made by subsections (a) and (b) 
shall apply to items furnished on or after January 1, 1994.

SEC. 13474. PART B PREMIUM PAYMENTS FOR LATE ENROLLMENT.

    (a) Limitation on Medicare Part B Late Enrollment Penalty.--
            (1) In general.--Section 1839 (42 U.S.C. 1395r) is amended 
        by adding at the end the following new subsection:
    ``(g) The percent increase in premiums under subsection (b) due to 
late enrollment under this part shall not exceed 25 percent in the case 
of an individual who is an annuitant described in subparagraph (A) or 
(B) of section 8901(3) of title 5, United States Code (including an 
individual or survivor described in section 8906(g)(2)(A) of such 
title) for a month if--
            ``(1) during the individual's initial enrollment period 
        under section 1837(d)--
                    ``(A) the individual was enrolled in a group health 
                plan (as defined in section 1862(b)(1)(A)(v)) that 
                provided coverage of items and services for which 
                payment may be made under this part, and
                    ``(B) the individual elected not to enroll (or to 
                be deemed enrolled) under this section; and
            ``(2) due to a change of coverage under such plan, there is 
        no coverage during the month under such plan with respect to 
        items and services for which payment may be made under this 
        part unless the individual is enrolled under this part.''.
            (2) Effective date.--The amendment made by paragraph (1) 
        shall apply to premiums for months beginning with January 1992.
    (b) Payment of Part B Premium Late Enrollment Penalties by 
States.--Section 1839 (42 U.S.C. 1395r), as amended by subsection (a), 
is further amended by adding at the end the following new subsection:
    ``(h)(1) Upon the request of a State, the Secretary may enter into 
an agreement with the State under which the State agrees to pay on a 
quarterly or other periodic basis to the Secretary (to be deposited in 
the Treasury to the credit of the Federal Supplementary Medical 
Insurance Trust Fund) an amount equal to the amount of the part B late 
enrollment premium increases with respect to the premiums for eligible 
individuals (as defined in paragraph (3)(A)).
    ``(2) No part B late enrollment premium increase shall apply to an 
eligible individual for premiums for months for which the amount of 
such an increase is payable under an agreement under paragraph (1).
    ``(3) In this subsection:
            ``(A) The term `eligible individual' means an individual 
        who is enrolled under this part B and who is within a class of 
        individuals specified in the agreement under paragraph (1).
            ``(B) The term `part B late enrollment premium increase' 
        means any increase in a premium as a result of the application 
        of subsection (b).''.

SEC. 13475. COVERAGE OF SERVICES OF SPEECH-LANGUAGE PATHOLOGISTS AND 
              AUDIOLOGISTS.

    (a) Services Defined.--Section 1861 (42 U.S.C. 1395x), as amended 
by section 13478(f)(8)(E), is amended by inserting after subsection 
(kk) the following new subsection:

        ``Speech-Language Pathology Services; Audiology Services

    ``(ll)(1) The term `speech-language pathology services' means such 
speech, language, and related function assessment and rehabilitation 
services furnished by a qualified speech-language pathologist as the 
speech-language pathologist is legally authorized to perform under 
State law (or the State regulatory mechanism provided by State law) as 
would otherwise be covered if furnished by a physician.
    ``(2) The term `audiology services' means such hearing and balance 
assessment services furnished by a qualified audiologist as the 
audiologist is legally authorized to perform under State law (or the 
State regulatory mechanism provided by State law).
    ``(3) In this subsection:
            ``(A) The term `qualified speech-language pathologist' 
        means an individual with a master's or doctoral degree in 
        speech-language pathology who has performed not less than 9 
        months of supervised full-time speech-language pathology 
        services after obtaining such degree and who--
                    ``(i) is licensed (or is otherwise certified) as a 
                speech-language pathologist by the State in which the 
                individual furnishes such services, or
                    ``(ii) in the case of an individual who furnishes 
                services in a State which does not provide for the 
                licensing (or other form of certification) of speech-
                language pathologists, has successfully completed a 
                national clinical competency examination in speech-
                language pathology approved by the Secretary.
            ``(B) The term `qualified audiologist' means an individual 
        with a master's or doctoral degree in audiology who has 
        performed not less than 9 months of supervised full-time 
        audiology services after obtaining such degree and who--
                    ``(i) is licensed (or is otherwise certified) as an 
                audiologist by the State in which the individual 
                furnishes such services, or
                    ``(ii) in the case of an individual who furnishes 
                services in a State which does not provide for the 
                licensing (or other form of certification) of 
                audiologists, has successfully completed a national 
                clinical competency examination in audiology approved 
                by the Secretary.''.
    (b) Conforming Amendments Relating to Medicare Treatment of Speech 
and Language Services.--
            (1) Extended care services.--Section 1861(h)(3) (42 U.S.C. 
        1395x(h)(3)) is amended by striking ``, occupational, or speech 
        therapy'' and inserting ``or occupational therapy or speech-
        language pathology services''.
            (2) Home health services.--Section 1861(m)(2) (42 U.S.C. 
        1395x(m)(2)) is amended by striking ``, occupational, or speech 
        therapy'' and inserting ``or occupational therapy or speech-
        language pathology services''.
            (3) Outpatient physical therapy services.--The fourth 
        sentence of section 1861(p) (42 U.S.C. 1395x(p)) is amended by 
        striking ``speech pathology services'' and inserting ``speech-
        language pathology services''.
            (4) Comprehensive outpatient rehabilitation facility 
        services.--Section 1861(cc)(1)(B) (42 U.S.C. 1395x(cc)(1)(B)) 
        is amended by striking ``speech pathology services'' and 
        inserting ``speech-language pathology services''.
            (5) Hospice care.--Section 1861(dd)(1)(B) (42 U.S.C. 
        1395x(dd)(1)(B)) is amended by striking ``therapy or speech-
        language pathology'' and inserting ``therapy, or speech-
        language pathology services''.
    (c) Effective Date.--The amendments made by this section shall take 
effect on January 1, 1994.

SEC. 13476. EXTENSION OF MUNICIPAL HEALTH SERVICE DEMONSTRATION 
              PROJECTS.

    Section 9215 of the Consolidated Omnibus Budget Reconciliation Act 
of 1985, as amended by section 6135 of OBRA-1989, is amended--
            (1) by striking ``December 31, 1993'' and inserting 
        ``December 31, 1997'', and
            (2) in the second sentence, by inserting after 
        ``beneficiary costs,'' the following: ``costs to the medicaid 
        program and other payers, access to care, outcomes, beneficiary 
        satisfaction, utilization differences among the different 
        populations served by the projects,''.

SEC. 13477. TREATMENT OF CERTAIN INDIAN HEALTH PROGRAMS AND FACILITIES 
              AS FEDERALLY-QUALIFIED HEALTH CENTERS.

    (a) In General.--Section 1861(aa)(4) (42 U.S.C. 1395x(aa)(4)) is 
amended--
            (1) by striking ``or'' at the end of subparagraph (B);
            (2) by striking the period at the end of subparagraph (C) 
        and inserting ``; or''; and
            (3) by adding at the end the following new subparagraph:
            ``(D) is an outpatient health program or facility operated 
        by a tribe or tribal organization under the Indian Self-
        Determination Act or by an urban Indian organization receiving 
        funds under title V of the Indian Health Care Improvement 
        Act.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to services furnished on or after January 1, 1994.

SEC. 13478. MISCELLANEOUS AND TECHNICAL CORRECTIONS.

    (a) Revision of Information on Part B Claims Forms.--Section 
1833(q)(1) (42 U.S.C. 1395l(q)(1)) is amended--
            (1) by striking ``provider number'' and inserting ``unique 
        physician identification number''; and
            (2) by striking ``and indicate whether or not the referring 
        physician is an interested investor (within the meaning of 
        section 1877(h)(5))''.
    (b) Consultation for Social Workers.--Effective with respect to 
services furnished on or after January 1, 1991, section 6113(c) of 
OBRA-1989 is amended--
            (1) by inserting ``and clinical social worker services'' 
        after ``psychologist services''; and
            (2) by striking ``psychologist'' the second and third place 
        it appears and inserting ``psychologist or clinical social 
        worker''.
    (c) Reports on Hospital Outpatient Payment.--(1) OBRA-1989 is 
amended by striking section 6137.
    (2) Section 1135(d) (42 U.S.C. 1320b-5(d)) is amended--
            (A) by striking paragraph (6); and
            (B) in paragraph (7)--
                    (i) by striking ``systems'' each place it appears 
                and inserting ``system''; and
                    (ii) by striking ``paragraphs (1) and (6)'' and 
                inserting ``paragraph (1)''.
    (d) Radiology and Diagnostic Services Provided in Hospital 
Outpatient Departments.--(1) Effective as if included in the enactment 
of OBRA-1989, section 1833(n)(1)(B)(i)(II) (42 U.S.C. 
1395l(n)(1)(B)(i)(II)) is amended--
            (A) by striking ``1989'' and inserting ``1989 and for 
        services described in subsection (a)(2)(E)(ii) furnished on or 
        after January 1, 1992''; and
            (B) by striking ``1842(b)'' and inserting ``1842(b) (or, in 
        the case of services furnished on or after January 1, 1992, 
        under section 1848)''.
    (2) Effective as if included in the enactment of OBRA-1989, section 
1833(n)(1)(B)(i)(II) (42 U.S.C. 1395l(n)(1)(B)(i)(II)) is amended by 
striking ``January 1, 1989'' and inserting ``April 1, 1989''.
    (e) Payments to Nurse Practitioners in Rural Areas (Section 4155 of 
OBRA-1990).--(1) Section 1861(s)(2)(K)(iii) (42 U.S.C. 
1395x(s)(2)(K)(iii)) is amended--
            (A) by striking ``subsection (aa)(3)'' and inserting 
        ``subsection (aa)(5)''; and
            (B) by striking ``subsection (aa)(4)'' and inserting 
        ``subsection (aa)(6)''.
    (2) Section 1833(a)(1) (42 U.S.C. 1395l(a)(1)) is amended--
            (A) by striking ``and'' before ``(N)''; and
            (B) with respect to the matter inserted by section 
        4155(b)(2)(B) of OBRA-1990--
                    (i) by striking ``(M)'' and inserting ``, and 
                (O)'', and
                    (ii) by transferring and inserting it (as amended) 
                immediately before the semicolon at the end.
    (3) Section 1833(r)(1) (42 U.S.C. 1395l(r)(1)) is amended--
            (A) by striking ``ambulatory'' each place it appears and 
        inserting ``or ambulatory''; and
            (B) by striking ``center,'' and inserting ``center''.
    (4) Section 1833(r)(2)(A) (42 U.S.C. 1395l(r)(2)(A)) is amended by 
striking ``subsection (a)(1)(M)'' and inserting ``subsection 
(a)(1)(O)''.
    (5) Section 1861(b)(4) (42 U.S.C. 1395x(b)(4)) is amended by 
striking ``subsection (s)(2)(K)(i)'' and inserting ``clauses (i) or 
(iii) of subsection (s)(2)(K)''.
    (6) Section 1861(aa)(5) (42 U.S.C. 1395x(aa)(5)) is amended by 
striking ``this Act'' and inserting ``this title''.
    (7) Section 1862(a)(14) (42 U.S.C. 1395y(a)(14)) is amended by 
striking ``1861(s)(2)(K)(i)'' and inserting ``1861(s)(2)(K)(i) or 
1861(s)(2)(K)(iii)''.
    (8) Section 1866(a)(1)(H) (42 U.S.C. 1395cc(a)(1)(H)) is amended by 
striking ``1861(s)(2)(K)(i)'' and inserting ``1861(s)(2)(K)(i) or 
1861(s)(2)(K)(iii)''.
    (f) Other Miscellaneous and Technical Amendments.--
            (1) Immediate enrollment in part b by individuals covered 
        by an employment-based plan.--(A) Subparagraphs (A) and (B) of 
        section 1837(i)(3) (42 U.S.C. 1395p(i)(3)) are each amended--
                    (i) by striking ``beginning with the first day of 
                the first month in which the individual is no longer 
                enrolled'' and inserting ``including each month during 
                any part of which the individual is enrolled''; and
                    (ii) by striking ``and ending seven months later'' 
                and inserting ``ending with the last day of the eighth 
                consecutive month in which the individual is at no time 
                so enrolled''.
            (B) Paragraphs (1) and (2) of section 1838(e) (42 U.S.C. 
        1395q(e)) are amended to read as follows:
            ``(1) in any month of the special enrollment period in 
        which the individual is at any time enrolled in a plan 
        (specified in subparagraph (A) or (B), as applicable, of 
        section 1837(i)(3)) or in the first month following such a 
        month, the coverage period shall begin on the first day of the 
        month in which the individual so enrolls (or, at the option of 
        the individual, on the first day of any of the following three 
        months), or
            ``(2) in any other month of the special enrollment period, 
        the coverage period shall begin on the first day of the month 
        following the month in which the individual so enrolls.''.
            (C) The amendments made by subparagraphs (A) and (B) shall 
        take effect on the first day of the first month that begins 
        after the expiration of the 120-day period that begins on the 
        date of the enactment of this Act.
            (2) Blend amounts for ambulatory surgical center 
        payments.--Subclauses (I) and (II) of section 1833(i)(3)(B)(ii) 
        (42 U.S.C. 1395l(i)(3)(B)(ii)) are each amended--
                    (A) by striking ``for reporting'' and inserting 
                ``for portions of cost reporting''; and
                    (B) by striking ``and on or before'' and inserting 
                ``and ending on or before''.
            (3) Clinical diagnostic laboratory tests (section 4154 of 
        obra-1990).--Section 4154(e)(5) of OBRA-1990 is amended by 
        striking ``(1)(A)'' and inserting ``(1)(A),''.
            (4) Separate payment under part b for certain services 
        (section 4157 of obra-1990).--Section 4157(a) of OBRA-1990 is 
        amended by striking ``(a) Services of'' and all that follows 
        through ``Section'' and inserting ``(a) Treatment of Services 
        of Certain Health Practitioners.--Section''.
            (5) Certified registered nurse anesthetists (section 4160 
        of obra-1990).--Section 1833(l)(4)(B)(ii)(VII) (42 U.S.C. 
        1395l(l)(4)(B)(ii)(VII)) is amended by striking ``1997'' and 
        inserting ``1996''.
            (6) Community health centers and rural health clinics 
        (section 4161 of obra-1990).--(A) The fourth sentence of 
        section 1861(aa)(2) (42 U.S.C. 1395x(aa)(2)) is amended--
                    (i) by striking ``certification'' the first place 
                it appears and inserting ``approval''; and
                    (ii) by striking ``the Secretary's approval or 
                disapproval of the certification'' and inserting 
                ``Secretary's approval or disapproval''.
            (B) Section 4161(a)(7)(B) of OBRA-1990 is amended by 
        inserting ``and to the Committee on Finance of the Senate'' 
        after ``Representatives''.
            (7) Screening mammography (section 4163 of obra-1990).--
        Section 4163 of OBRA-1990 is amended--
                    (A) by adding at the end of subsection (d) the 
                following new paragraph:
            ``(3) The amendment made by paragraph (2)(A)(iv) shall 
        apply to screening pap smears performed on or after July 1, 
        1990.''; and
                    (B) in subsection (e), by striking ``The 
                amendments'' and inserting ``Except as provided in 
                subsection (d)(3), the amendments.''.
            (8) Injectable drugs for treatment of osteoporosis.--
                    (A) Clarification of drugs covered.--The section 
                1861(jj) (42 U.S.C. 1395x(jj)) inserted by section 
                4156(a)(2) of OBRA-1990 is amended--
                            (i) in the matter preceding paragraph (1), 
                        by striking ``a bone fracture related to''; and
                            (ii) in paragraph (1), by striking 
                        ``patient'' and inserting ``individual has 
                        suffered a bone fracture related to post-
                        menopausal osteoporosis and that the 
                        individual''.
                    (B) Limiting coverage to drugs provided by home 
                health agencies.--(i) The section 1861(jj) (42 U.S.C. 
                1395x(jj)) inserted by section 4156(a)(2) of OBRA-1990 
                is amended by striking ``if'' and inserting ``by a home 
                health agency if''.
                    (ii) Section 1861(m)(5) (42 U.S.C. 1395x(m)(5)) is 
                amended by striking ``but excluding'' and inserting 
                ``and a covered osteoporosis drug (as defined in 
                subsection (kk), but excluding other''.
                    (iii) Section 1861(s)(2) (42 U.S.C. 1395x(s)(2)) is 
                amended--
                            (I) by adding ``and'' at the end of 
                        subparagraph (N), and
                            (II) by striking subparagraph (O) and 
                        redesignating subparagraph (P) as subparagraph 
                        (O).
                    (C) Payment based on reasonable cost.--Section 
                1833(a)(2) (42 U.S.C. 1395l(a)(2)) is amended--
                            (i) in subparagraph (A), by striking 
                        ``health services'' and inserting ``health 
                        services (other than covered osteoporosis drug 
                        (as defined in section 1861(kk)))'';
                            (ii) by striking ``and'' at the end of 
                        subparagraph (D);
                            (iii) by striking the semicolon at the end 
                        and inserting ``; and''; and
                            (iv) by adding at the end the following new 
                        subparagraph:
                    ``(F) with respect to covered osteoporosis drug (as 
                defined in section 1861(kk)) furnished by a home health 
                agency, 80 percent of the reasonable cost of such 
                service, as determined under section 1861(v);''.
                    (D) Application of part b deductible.--Section 
                1833(b)(2) (42 U.S.C. 1395l(b)(2)) is amended by 
                striking ``services'' and inserting ``services (other 
                than covered osteoporosis drug (as defined in section 
                1861(kk)))''.
                    (E) Covered osteoporosis drug (section 4156 of 
                obra-1990).--Section 1861 (42 U.S.C. 1395x) is amended, 
                in the subsection (jj) inserted by section 4156(a)(2) 
                of OBRA-1990, by striking ``(jj) The term'' and 
                inserting ``(kk) The term''.
            (9) Other miscellaneous and technical corrections (section 
        4164 of obra-1990).--
                    (A) Ownership disclosure requirements.--(i) Section 
                1124A(a)(2)(A) (42 U.S.C. 1320a-3a(a)(2)(A)) is amended 
                by striking ``of the Social Security Act''.
                    (ii) Section 4164(b)(4) of OBRA-1990 is amended by 
                striking ``paragraph'' and inserting ``paragraphs''.
                    (B) Directory of unique physician identifier 
                numbers.--Section 4164(c) of OBRA-1990 is amended by 
                striking ``publish'' and inserting ``publish, and shall 
                periodically update,''.
    (g) Effective Date.--Except as otherwise provided in this section, 
the amendments made by this section shall take effect as if included in 
the enactment of OBRA-1990.

                      Subchapter F--Part B Premium

SEC. 13481. PART B PREMIUM.

    Section 1839(e) (42 U.S.C. 1395r(e)) is amended--
            (1) in paragraph (1)(A), by inserting ``and for each month 
        in 1996 and 1997'' after ``January 1991'', and
            (2) in paragraph (2), by striking ``1991'' and inserting 
        ``1998''.

            CHAPTER 3--PROVISIONS RELATING TO PARTS A AND B

                  Subchapter A--Elimination of Updates

SEC. 13501. ELIMINATION OF COST-OF-LIVING UPDATE IN PER RESIDENT 
              AMOUNTS FOR DIRECT MEDICAL EDUCATION.

    Section 1886(h)(2)(D) (42 U.S.C. 1395ww(h)(2)(D)) is amended by 
inserting ``(other than in the case of cost reporting periods beginning 
during fiscal year 1994 or fiscal year 1995)'' after ``updated''.

SEC. 13502. ELIMINATION OF INFLATION UPDATE IN COST LIMITS FOR HOME 
              HEALTH SERVICES.

    The Secretary of Health and Human Services shall not provide for 
any increase, on the basis of inflation or changes in the cost of goods 
and services, in the per visit cost limits for home health services 
under section 1861(v)(1)(L) of the Social Security Act for cost 
reporting periods beginning during fiscal year 1994 or fiscal year 
1995.

           Subchapter B--Medicare Secondary Payer Provisions

SEC. 13511. EXTENSION OF TRANSFER OF DATA.

    (a) Extension of Data Match Program.--
            (1) Section 1862(b)(5)(C)(iii) of the Social Security Act 
        (42 U.S.C. 1395y(b)(5)(C)(iii)) is amended by striking ``1995'' 
        and inserting ``1998''.
            (2) Section 6103(l)(12)(F) of the Internal Revenue Code of 
        1986 is amended--
                    (A) in clause (i), by striking ``1995'' and 
                inserting ``1998'',
                    (B) in clause (ii)(I), by striking ``1994'' and 
                inserting ``1997'', and
                    (C) in clause (ii)(II), by striking ``1995'' and 
                inserting ``1998''.
    (b) Secondary Payer Exemption for Members of Religious Orders.--
Effective as if included in the enactment of OBRA-1989, section 
6202(e)(2) of such Act is amended by adding at the end the following: 
``Such amendment also shall apply to items and services furnished 
before such date with respect to secondary payer cases which the 
Secretary of Health and Human Services had not identified as of such 
date.''.
    (c) Permitting the Use of Minimum Income Thresholds.--
            (1) Section 6103(l)(12)(B)(i) of the Internal Revenue Code 
        of 1986 is amended by inserting ``, above an amount (if any) 
        specified by the Secretary of Health and Human Services,'' 
        after ``section 3401(a))''.
            (2) The matter in section 6103(l)(12)(B)(ii) of such Code 
        preceding subclause (I) is amended by inserting ``, above an 
        amount (if any) specified by the Secretary of Health and Human 
        Services,'' after ``wages''.
            (3) The heading to section 6103(l)(12) of such Code is 
        amended by striking ``taxpayer identity'' and inserting 
        ``return''.

SEC. 13512. 3-YEAR EXTENSION OF MEDICARE SECONDARY PAYER TO DISABLED 
              BENEFICIARIES.

    Section 1862(b)(1)(B)(iii) (42 U.S.C. 1395y(b)(1)(B)(iii)) is 
amended by striking ``1995'' and inserting ``1998''.

SEC. 13513. 3-YEAR EXTENSION OF 18-MONTH RULE FOR ESRD BENEFICIARIES.

    Section 1862(b)(1)(C) (42 U.S.C. 1395y(b)(1)(C)) is amended by 
striking ``1996'' and inserting ``1999''.

SEC. 13514. MEDICARE SECONDARY PAYER REFORMS.

    (a) Improving Identification of Medicare Secondary Payer 
Situations.--
            (1) Survey of beneficiaries.--
                    (A) In general.--Section 1862(b)(5) (42 U.S.C. 
                1395y(b)(5)) is amended by adding at the end the 
                following new subparagraph:
                    ``(D) Obtaining information from beneficiaries.--
                Before an individual applies for benefits under part A 
                or enrolls under part B, the Administrator shall mail 
                the individual a questionnaire to obtain information on 
                whether the individual is covered under a primary plan 
                and the nature of the coverage provided under the plan, 
                including the name, address, and identifying number of 
                the plan.''.
                    (B) Distribution of questionnaire by contractor.--
                The Secretary of Health and Human Services shall enter 
                into an agreement with an entity not later than 
                November 1, 1993, to distribute the questionnaire 
                described in section 1862(b)(5)(D) of the Social 
                Security Act (as added by subparagraph (A)).
                    (C) No medicare secondary payer denial based on 
                failure to complete questionnaire.--Section 1862(b)(2) 
                (42 U.S.C. 1395y(b)(2)) is amended by adding at the end 
                the following new subparagraph:
                    ``(C) Treatment of questionnaires.--The Secretary 
                may not fail to make payment under subparagraph (A) 
                solely on the ground that an individual failed to 
                complete a questionnaire concerning the existence of a 
                primary plan.''.
            (2) Mandatory screening by providers and suppliers under 
        part b.--
                    (A) In general.--Section 1862(b) (42 U.S.C. 
                1395y(b)) is amended by adding at the end the following 
                new paragraph:
            ``(6) Screening requirements for providers and suppliers.--
                    ``(A) In general.--Notwithstanding any other 
                provision of this title, no payment may be made for any 
                item or service furnished under part B unless the 
                entity furnishing such item or service completes (to 
                the best of its knowledge and on the basis of 
                information obtained from the individual to whom the 
                item or service is furnished) the portion of the claim 
                form relating to the availability of other health 
                benefit plans.
                    ``(B) Penalties.--An entity that knowingly, 
                willfully, and repeatedly fails to complete a claim 
                form in accordance with subparagraph (A) or provides 
                inaccurate information relating to the availability of 
                other health benefit plans on a claim form under such 
                subparagraph shall be subject to a civil money penalty 
                of not to exceed $2,000 for each such incident. The 
                provisions of section 1128A (other than subsections (a) 
                and (b)) shall apply to a civil money penalty under the 
                previous sentence in the same manner as such provisions 
                apply to a penalty or proceeding under section 
                1128A(a).''.
                    (B)  Effective date.--The amendment made by 
                subparagraph (A) shall apply with respect to items and 
                services furnished on or after January 1, 1994.
    (b) Improvements in Recovery of Payments From Primary Payers.--
            (1) Submission of reports on efforts to recover erroneous 
        payments.--
                    (A) Fiscal intermediaries under part a.--Section 
                1816 (42 U.S.C. 1396h) is amended by adding at the end 
                the following new subsection:
    ``(k) An agreement with an agency or organization under this 
section shall require that such agency or organization submit an annual 
report to the Secretary describing the steps taken to recover payments 
made for items or services for which payment has been or could be made 
under a primary plan (as defined in section 1862(b)(2)(A)).''.
                    (B) Carriers under part b.--Section 1842(b)(3) (42 
                U.S.C. 1395u(b)(3)) is amended--
                            (i) by striking ``and'' at the end of 
                        subparagraph (H); and
                            (ii) by inserting after subparagraph (H) 
                        the following new subparagraph:
            ``(I) will submit annual reports to the Secretary 
        describing the steps taken to recover payments made under this 
        part for items or services for which payment has been or could 
        be made under a primary plan (as defined in section 
        1862(b)(2)(A)).''.
            (2) Requirements under carrier performance evaluation 
        program.--
                    (A) Fiscal intermediaries under part a.--Section 
                1816(f)(1)(A) (42 U.S.C. 1396h(f)(1)(A)) is amended by 
                striking ``processing'' and inserting ``processing 
                (including the agency's or organization's success in 
                recovering payments made under this title for services 
                for which payment has been or could be made under a 
                primary plan (as defined in section 1862(b)(2)(A)))''.
                    (B) Carriers under part b.--Section 1842(b)(2) (42 
                U.S.C. 1395u(b)(2)) is amended by adding at the end the 
                following new subparagraph:
    ``(D) In addition to any other standards and criteria established 
by the Secretary for evaluating carrier performance under this 
paragraph relating to avoiding erroneous payments, the Secretary shall 
establish standards and criteria relating to the carrier's success in 
recovering payments made under this part for items or services for 
which payment has been or could be made under a primary plan (as 
defined in section 1862(b)(2)(A)).''.
            (3) Deadline for reimbursement by primary plans.--
                    (A) In general.--Section 1862(b)(2)(B)(i) (42 
                U.S.C. 1395y(b)(2)(B)(i)) is amended by adding at the 
                end the following sentence: ``If reimbursement is not 
                made to the appropriate Trust Fund before the 
                expiration of the 60-day period that begins on the date 
                such notice or other information is received, the 
                Secretary may charge interest (beginning with the date 
                on which the notice or other information is received) 
                on the amount of the reimbursement until reimbursement 
                is made (at a rate determined by the Secretary in 
                accordance with regulations of the Secretary of the 
                Treasury applicable to charges for late payments).''.
                    (B) Conforming amendment.--The heading of clause 
                (i) of section 1862(b)(2)(B) is amended to read as 
                follows: ``Repayment required.--''.
                    (C) Effective date.--The amendments made by this 
                paragraph shall apply to payments for items and 
                services furnished on or after the date of the 
                enactment of this Act.
            (4) Effective date.--The amendments made by paragraphs (1) 
        and (2) shall apply to contracts with fiscal intermediaries and 
        carriers under title XVIII of the Social Security Act for years 
        beginning with 1994.
    (c) Application of Aggregation Rules.--
            (1) Working aged.--Section 1862(b)(1)(A) (42 U.S.C. 
        1395y(b)(1)(A)) is amended by adding at the end the following 
        new clause:
                            ``(vi) Application of aggregation rules.--
                        All employers treated as a single employer 
                        under subsection (a) or (b) of section 52 of 
                        the Internal Revenue Code of 1986 shall be 
                        treated as a single employer for purposes of 
                        this subparagraph.''.
            (2) Disabled individuals.--Section 5000(b)(2) of the 
        Internal Revenue Code of 1986 (relating to large group health 
        plans) is amended by adding at the end the following: ``All 
        employers treated as a single employer under subsection (a) or 
        (b) of section 52 shall be treated as a single employer for 
        purposes of this paragraph.''.
            (3) Effective date.--The amendments made by this subsection 
        shall take effect 90 days after the date of the enactment of 
        this Act.
    (d) Application of Excise Tax to Failure to Reimburse Federal 
Government.--
            (1) In general.--Section 5000(c) of the Internal Revenue 
        Code of 1986 (relating to nonconforming group health plans) is 
        amended by striking ``of section 1862(b)(1)'' and inserting 
        ``of paragraph (1), or with the requirements of paragraph (2), 
        of section 1862(b)''.
            (2) Effective date.--The amendment made by paragraph (1) 
        shall apply to demands for repayment issued after the date of 
        the enactment of this Act.
    (e) Miscellaneous and Technical Corrections.--
            (1) The sentence in section 1862(b)(1)(C) added by section 
        4203(c)(1)(B) of OBRA-1990 is amended--
                    (A) by striking ``on or before'' and inserting 
                ``before'', and
                    (B) by striking ``clauses (i) and (ii)'' and 
                inserting ``this subparagraph''.
            (2) Effective as if included in the enactment of OBRA-1989, 
        section 1862(b)(1) is amended--
                    (A) in subparagraphs (A)(v) and (B)(iv)(II), by 
                inserting ``, without regard to section 5000(d) of such 
                Code'' before the period at the end of each 
                subparagraph;
                    (B) in subparagraph (A)(iii), by striking ``current 
                calendar year or the preceding calendar year'' and 
                inserting ``current calendar year and the preceding 
                calendar year''; and
                    (C) in the matter in subparagraph (C) after clause 
                (ii), by striking ``taking into account that'' and 
                inserting ``paying benefits secondary to this title 
                when''.
            (3) Effective as if included in the enactment of OBRA-1989, 
        section 1862(b)(5)(C)(i) (42 U.S.C. 1395y(b)(5)(C)(i)) is 
        amended by striking ``6103(l)(12)(D)(iii)'' and inserting 
        ``6103(l)(12)(E)(iii)''.
            (4) Section 4203(c)(2) of OBRA-1990 is amended--
                    (A) by striking ``the application of clause (iii)'' 
                and inserting ``the second sentence'';
                    (B) by striking ``on individuals'' and all that 
                follows through ``section 226A of such Act'';
                    (C) in clause (ii), by striking ``clause'' and 
                inserting ``sentence'';
                    (D) in clause (v), by adding ``and'' at the end; 
                and
                    (E) in clause (vi)--
                            (i) by inserting ``of such Act'' after 
                        ``1862(b)(1)(C)'', and
                            (ii) by striking the period at the end and 
                        inserting the following: ``, without regard to 
                        the number of employees covered by such 
                        plans.''.
            (5) Section 4203(d) of OBRA-1990 is amended by striking 
        ``this subsection'' and inserting ``this section''.
            (6) Except as provided in paragraphs (2) and (3), the 
        amendments made by this subsection shall be effective as if 
        included in the enactment of OBRA-1990.

             Subchapter C--Physician Ownership and Referral

SEC. 13521. APPLICATION OF MEDICARE BAN ON SELF-REFERRALS TO ALL 
              PAYERS.

    (a) In General.--Section 1877 (42 U.S.C. 1395nn) is amended--
            (1) in subsection (a)--
                    (A) in paragraph (1)(A), by striking ``for which 
                payment otherwise may be made under this title'' and 
                inserting ``for which a charge is imposed'', and
                    (B) in paragraph (1)(B), by striking ``under this 
                title'';
            (2) by amending paragraph (1) of subsection (g) to read as 
        follows:
            ``(1) Denial of payment.--No payment may be made under this 
        title, under another Federal health care program, or under a 
        State health care program (as defined in section 1128(h)) for a 
        designated health service for which a claim is presented in 
        violation of subsection (a)(1)(B). No individual, third party 
        payer, or other entity is liable for payment for designated 
        health services for which a claim is presented in violation of 
        such subsection.''; and
            (3) in subsection (g)(3), by striking ``for which payment 
        may not be made under paragraph (1)'' and inserting ``for which 
        such a claim may not be presented under subsection (a)(1)''.
    (b) Conforming Amendment to Reporting Requirement.--Section 1877(f) 
(42 U.S.C. 1395nn(f)) is amended--
            (1) by striking ``for which payment may be made under this 
        title'' each place it appears and inserting ``for which a 
        charge is imposed'', and
            (2) by striking the third sentence.

SEC. 13522. EXTENSION OF SELF-REFERRAL BAN TO ADDITIONAL SPECIFIED 
              SERVICES.

    Section 1877 (42 U.S.C. 1395nn) is amended--
            (1) by striking ``clinical laboratory service'', ``clinical 
        laboratory services'', and ``clinical laboratory services'' and 
        inserting ``designated health service'', ``designated health 
        services'', and ``designated health services'', respectively, 
        each place each appears in subsections (a)(1), (b)(2)(A)(ii), 
        (b)(4), (d)(1), (d)(2), (d)(3), (f), (g)(1), and (h)(7)(B); and
            (2) by adding at the end the following new subsection:
    ``(i) Designated Health Services Defined.--In this section, the 
term `designated health services' means any of the following items or 
services:
            ``(1) clinical laboratory services;
            ``(2) physical and occupational therapy services;
            ``(3) radiology services, including magnetic resonance 
        imaging, computerized axial tomography scans, and ultrasound 
        services;
            ``(4) radiation therapy services;
            ``(5) durable medical equipment;
            ``(6) parenteral and enteral nutrition equipment and 
        supplies;
            ``(7) prosthetic devices and orthotics and prosthetics;
            ``(8) outpatient prescription drugs;
            ``(9) home infusion therapy services, home dialysis, and 
        home health services;
            ``(10) ambulance services;
            ``(11) inpatient and outpatient hospital services;
            ``(12) comprehensive outpatient rehabilitation facility 
        services;
            ``(13) contact lenses and eyeglasses; and
            ``(14) hearing aids.''.

SEC. 13523. EXCEPTIONS FOR BOTH OWNERSHIP AND COMPENSATION 
              ARRANGEMENTS.

    (a) Modification to Exception for In-Office Ancillary Services.--
Section 1877(b)(2) (42 U.S.C. 1395nn(b)(2)) is amended--
            (1) by inserting ``(other than durable medical equipment, 
        parenteral and enteral nutrition equipment and supplies, and 
        ambulance services)'' after ``services'' the first place it 
        appears, and
            (2) in subparagraph (A)(ii)(II), by striking ``centralized 
        provision'' and inserting ``provision of some or all''.
    (b) Modification of Rural Provider Exception.--
            (1) In general.--Section 1877(b) (42 U.S.C. 1395nn(b)) is 
        amended--
                    (A) by redesignating paragraph (5) as paragraph 
                (6), and
                    (B) by inserting after paragraph (4) the following 
                new paragraph:
            ``(5) Rural providers.--In the case of designated health 
        services if--
                    ``(A) the entity furnishing the services is in a 
                rural area (as defined in section 1886(d)(2)(D)), and
                    ``(B) substantially all of the services (as defined 
                by the Secretary) furnished by the entity are furnished 
                to individuals who reside in such a rural area.''.
            (2) Conforming amendments.--Section 1877(d) (42 U.S.C. 
        1395nn(d)) is amended--
                    (A) by striking paragraph (2), and
                    (B) by redesignating paragraph (3) as paragraph 
                (2).

SEC. 13524. EXCEPTIONS RELATED ONLY TO OWNERSHIP OR INVESTMENT.

    (a) Publicly-Traded Securities.--Section 1877(c)(2) (42 U.S.C. 
1395nn(c)(2)) is amended by striking ``total assets'' and inserting 
``stockholder equity''.
    (b) Rural Providers.--For amendment to exception relation to rural 
providers, see section 13523(b).

SEC. 13525. EXCEPTIONS RELATED ONLY TO COMPENSATION ARRANGEMENTS.

    (a) Rental of Office Space and Equipment.--
            (1) In general.--Paragraph (1) of section 1877(e) (42 
        U.S.C. 1395nn(e)) is amended to read as follows:
            ``(1) Rental of office space; rental of equipment.--
                    ``(A) Office space.--Payments made by a lessee to a 
                lessor for the use of premises if--
                            ``(i) the lease is set out in writing, 
                        signed by the parties, and specifies the 
                        premises covered by the lease,
                            ``(ii) the aggregate space rented or leased 
                        does not exceed that which is reasonable and 
                        necessary for the legitimate business purposes 
                        of the lease or rental and is used exclusively 
                        by the lessee when being used by the lessee,
                            ``(iii) the lease provides for a term of 
                        rental or lease for at least one year,
                            ``(iv) the aggregate rental charges over 
                        the term of the lease are set in advance, are 
                        consistent with fair market value, and are not 
                        determined in a manner that takes into account 
                        the volume or value of any referrals or other 
                        business generated between the parties,
                            ``(v) the lease would be commercially 
                        reasonable even if no referrals were made 
                        between the parties,
                            ``(vi) the lease covers all of the premises 
                        leased between the parties for the period of 
                        the lease, and
                            ``(vii) the compensation arrangement meets 
                        such other requirements as the Secretary may 
                        impose by regulation as needed to protect 
                        against program or patient abuse.
                    ``(B) Equipment.--Payments made by a lessee of 
                equipment to the lessor of the equipment for the use of 
                the equipment if--
                            ``(i) the lease is set out in writing, 
                        signed by the parties, and specifies the 
                        equipment covered by the lease,
                            ``(ii) the equipment rented or leased does 
                        not exceed that which is reasonable and 
                        necessary for the legitimate business purposes 
                        of the lease or rental and is used exclusively 
                        by the lessee when being used by the lessee,
                            ``(iii) the lease provides for a term of 
                        rental or lease of at least one year,
                            ``(iv) the aggregate rental charges over 
                        the term of the lease are set in advance, are 
                        consistent with fair market value, and are not 
                        determined in a manner that takes into account 
                        the volume or value of any referrals or other 
                        business generated between the parties,
                            ``(v) the lease would be commercially 
                        reasonable even if no referrals were made 
                        between the parties,
                            ``(vi) the lease covers all of the 
                        equipment leased between the parties for the 
                        period of the lease, and
                            ``(vii) the compensation arrangement meets 
                        such other requirements as the Secretary may 
                        impose by regulation as needed to protect 
                        against program or patient abuse.''.
            (2) Conforming amendment.--Section 1877(h) (42 U.S.C. 
        1395nn(h)) is amended by striking paragraphs (5) and (6).
    (b) Bona Fide Employment Relationships.--Section 1877(e) (42 U.S.C. 
1395nn(e)) is amended--
            (1) in paragraph (2)--
                    (A) by striking ``Employment'' and all that follows 
                through ``if'' and inserting ``Bona fide employment 
                relationships.--Any amount paid by an employer to a 
                physician (or immediate family member) who has a bona 
                fide employment relationship with the employer for the 
                provision of services if'';
                    (B) in subparagraphs (A), (B), and (D), by striking 
                ``arrangement'' and inserting ``employment'';
                    (C) in subparagraph (C), by striking ``to the 
                hospital''; and
                    (D) by adding at the end the following:
        ``Subparagraph (B)(ii) shall not be construed as prohibiting 
        the payment of remuneration in the form of shares of overall 
        profits or in the form of a productivity bonus based on 
        services performed personally by the physician or family 
        member, if the amount of the remuneration is not determined in 
        a manner that takes into account directly the volume or value 
        of any referrals by the referring physician.''; and
            (2) in paragraph (5)(A), by striking ``in the same manner 
        as they apply to a hospital''.
    (c) Personal Service Arrangements.--
            (1) In general.--Paragraph (3) of section 1877(e) (42 
        U.S.C. 1395nn(e)) is amended to read as follows:
            ``(3) Personal service arrangements.--Remuneration from an 
        entity under an arrangement if--
                    ``(A) the arrangement is set out in writing, signed 
                by the parties, and specifies the services covered by 
                the arrangement,
                    ``(B) the arrangement covers all of the services to 
                be provided by the physician (or family member) to the 
                entity,
                    ``(C) the aggregate services contracted for do not 
                exceed those that are reasonable and necessary for the 
                legitimate business purposes of the arrangement,
                    ``(D) the term of the arrangement is for at least 
                one year,
                    ``(E) the compensation to be paid over the term of 
                the arrangement is set in advance, does not exceed fair 
                market value, and is not determined in a manner that 
                takes into account directly or indirectly the volume or 
                value of any referrals or other business generated 
                between the parties,
                    ``(F) the services to be performed under the 
                arrangement do not involve the counseling or promotion 
                of a business arrangement or other activity that 
                violates any State or Federal law, and
                    ``(G) the arrangement meets such other requirements 
                as the Secretary may impose by regulation as needed to 
                protect against program or patient abuse.''.
            (2) Health services furnished under certain hospital 
        arrangements.--Section 1877(e) (42 U.S.C. 1395nn(e)) is amended 
        by adding at the end the following new paragraph:
            ``(7) Certain group practice arrangements with a 
        hospital.--
                    ``(A) In general.--An arrangement between a 
                hospital and a group for the provision of designated 
                health services by the group but billed in the name of 
                the hospital if--
                            ``(i) the group would be a group practice, 
                        but for the fact that it bills for such 
                        services in the name of the hospital;
                            ``(ii) with respect to services provided to 
                        an inpatient of the hospital, the arrangement 
                        is pursuant to the provision of inpatient 
                        hospital services under section 1861(b)(3);
                            ``(iii) the arrangement began before 
                        December 19, 1989, and has continued in effect 
                        without interruption since such date;
                            ``(iv) the group provides substantially all 
                        of the designated health services furnished 
                        under the arrangement to the hospital's 
                        patients;
                            ``(v) the arrangement is pursuant to an 
                        agreement that is set out in writing and that 
                        specifies the services to be provided by the 
                        parties and the compensation for services 
                        provided under the agreement;
                            ``(vi) the compensation paid over the term 
                        of the agreement is consistent with fair market 
                        value and the compensation per unit of services 
                        is fixed in advance and is not determined in a 
                        manner that takes into account the volume or 
                        value of any referrals or other business 
                        generated between the parties;
                            ``(vii) the compensation is provided 
                        pursuant to an agreement which would be 
                        commercially reasonable even if no referrals 
                        were made to the entity; and
                            ``(viii) the arrangement between the 
                        parties meets such other requirements as the 
                        Secretary may impose by regulation as needed to 
                        protect against program or patient abuse.''.
    (d) Physician Recruitment.--Section 1877(e)(4) (42 U.S.C. 
1395nn(e)(4)) is amended--
            (1) by redesignating subparagraphs (A) through (C) as 
        subparagraph (B) through (D), and
            (2) by inserting before subparagraph (B), as so 
        redesignated, the following new subparagraph:
                    ``(A) the remuneration arrangement is set out in 
                writing, signed by the parties, and specifies the 
                benefits provided by the hospital, the terms under 
                which the benefits are to be provided, and the 
                obligations of the parties,''.
    (e) Isolated Transactions.--Section 1877(e)(5) (42 U.S.C. 
1395nn(e)(5)) is amended--
            (1) by striking ``Isolated'' and inserting ``One-time'',
            (2) by striking ``isolated'' and inserting ``one-time'', 
        and
            (3) by inserting ``or practice'' after ``one-time sale of 
        property''.
    (f) New Exception for Payments by Physician.--Section 1877(e) (42 
U.S.C. 1395nn(e)), as amended by subsection (c)(2), is further amended 
by adding at the end the following new paragraph:
            ``(8) Payments by a physician for items and services.--
        Payments made by a physician--
                    ``(A) to a laboratory in exchange for the provision 
                of clinical laboratory services, or
                    ``(B) to an entity as compensation for other items 
                or services if the items or services are furnished at a 
                price that is consistent with fair market value.''.

SEC. 13526. CLARIFICATION CONCERNING CIVIL MONEY PENALTY SANCTIONS.

    Section 1877(g)(3) (42 U.S.C. 1395nn(g)(3)) is amended by inserting 
``(including a referring physician)'' after ``Any person''.

SEC. 13527. REQUIREMENTS FOR GROUP PRACTICE.

    (a) Additional Requirements.--Section 1877(h)(4) (42 U.S.C. 
1395nn(h)(4)) is amended--
            (1) by striking ``and'' at the end of subparagraph (C);
            (2) by redesignating subparagraphs (A), (B), (C), and (D) 
        as clauses (i), (ii), (iii), and (vii), respectively;
            (3) by inserting ``(A)'' after ``.--'';
            (4) by inserting after clause (iii), as so redesignated, 
        the following:
                    ``(iv) subject to subparagraph (B), no physician 
                who is a member of the group receives compensation 
                based on the volume or value of referrals by the 
                physician;
                    ``(v) there are no less than, on average, 5 
                physicians for each office location (as defined in 
                subparagraph (C)), except where there is only a single 
                office location for the entire group practice;
                    ``(vi) members of the group personally conduct no 
                less than 75 percent of the physician-patient 
                encounters of the group practice; and''; and
            (5) by adding at the end the following new subparagraphs:
            ``(B) A physician in a group practice may be paid a share 
        of overall profits of the group or a productivity bonus (based 
        on services personally performed or personally supervised by 
        the physician or by another physician in the group) so long as 
        the share or bonus is not determined in any manner which is 
        directly related to the volume or value of referrals by that 
        physician.
            ``(C)(i) Except as provided in clauses (ii) through (iv), 
        the term `office location' means an office where physician 
        services are offered to patients.
            ``(ii) Such term does not include a location consisting 
        solely of a diagnostic facility, nursing facility, or treatment 
        facility (such as a physical or occupational therapy center), 
        or administrative services affiliated with the group practice.
            ``(iii) Any office location which is located immediately 
        adjacent to another office location shall be treated as the 
        same office location.
            ``(iv) The term `office location' does not include an 
        office located in a rural area (as defined in section 
        1886(d)(2)(D)) if at least 85 percent of the physician services 
        at the location are provided to individuals who reside in such 
        a rural area.''.
    (b) Use of Billing Numbers, Etc.--Section 1877 (42 U.S.C. 1395nn) 
is amended--
            (1) in subsection (b)(2)(B), by inserting ``under a billing 
        number assigned to the group practice'' after ``member'',
            (2) in subsection (h)(4)(A)(ii), as redesignated by 
        subsection (a)(2), by inserting ``and under a billing number 
        assigned to the group'' after ``in the name of the group'', and
            (3) in subsection (h)(4)(A)(iii), as redesignated by 
        subsection (a)(2), by striking ``by members of the group''.
    (c) Treatment of Certain Faculty Practice Plans.--The last sentence 
of section 1877(h)(4)(A) (42 U.S.C. 1395nn(h)(4)(A)), as redesignated 
by subsection (a)(2), is amended by inserting ``, institution of higher 
education, or medical school'' after ``hospital''.

SEC. 13538. NO FEDERAL PREEMPTION OF MORE RESTRICTIVE STATE LAWS.

    Section 1877 (42 U.S.C. 1395nn), as amended by section 13522(2), is 
amended by adding at the end the following new subsection:
    ``(j) No Federal Preemption of More Restrictive State Laws.--
Nothing in this section shall preempt provisions of State law--
            ``(1) that relate to referrals not covered by this section, 
        or
            ``(2) that relate to referrals covered by this section and 
        are more restrictive with respect to such referrals than the 
        provisions of this section.''.

SEC. 13529. MISCELLANEOUS PROVISIONS.

    (a) Indirect Financial Relationships.--The last sentence of section 
1877(a)(2) (42 U.S.C. 1395nn(a)(2)) is amended by inserting before the 
period the following: ``and includes an interest in an entity that 
holds an ownership or investment in another entity''.
    (b) Minor Remuneration.--Section 1877(h)(1) (42 U.S.C. 
1395nn(h)(1)) is amended--
            (1) in subparagraph (A), by inserting before the period at 
        the end the following: ``(other than an arrangement involving 
        only remuneration described in subparagraph (C))'', and
            (2) by adding at the end the following new subparagraph:
            ``(C) Remuneration described in this subparagraph is any 
        remuneration consisting of any of the following:
                    ``(i) The forgiveness of amounts owed for 
                inaccurate tests or procedures, mistakenly performed 
                tests or procedures, or the correction of minor billing 
                errors.
                    ``(ii) The provision of items, devices, or supplies 
                that are used solely to--
                            ``(I) collect, transport, process, or store 
                        specimens for the entity providing the item, 
                        device, or supply, or
                            ``(II) communicate the results of tests or 
                        procedures for such entity.''.
    (c) Referring Physician.--Section 1877(h)(7)(C) (42 U.S.C. 
1395nn(h)(7)(C)) is amended--
            (1) by inserting ``a request by a radiologist for 
        diagnostic radiology services, and a request by a radiation 
        oncologist for radiation therapy,'' after ``examination 
        services,'', and
            (2) by inserting ``, radiologist, or radiation oncologist'' 
        after ``pathologist'' the second place it appears.
    (d) Miscellaneous and Technical Corrections.--Section 1877 (42 
U.S.C. 1395nn) is further amended--
            (1) in the next to last sentence of subsection (f)--
                    (A) by striking ``provided'' and inserting 
                ``furnished'', and
                    (B) by striking ``provides'' and inserting 
                ``furnish'';
            (2) in the last sentence of subsection (f)--
                    (A) by striking ``providing'' each place it appears 
                and inserting ``furnishing'',
                    (B) by striking ``with respect to the providers'' 
                and inserting ``with respect to the entities'', and
                    (C) by striking ``diagnostic imaging services of 
                any type'' and inserting ``magnetic resonance imaging, 
                computerized axial tomography scans, and ultrasound 
                services''; and
            (3) in subsection (a)(2)(B), by striking ``subsection 
        (h)(1)(A)'' and inserting ``subsection (h)(1)''.

SEC. 13530. EFFECTIVE DATES.

    (a) Expansion of Payers and Services.--The amendments made by 
sections 13521 and 13522 shall apply with respect to a referral by a 
physician made on or after December 31, 1994.
    (b) Other Provisions.--
            (1) In general.--Except as provided in this subsection, the 
        amendments made by sections 13523 through 13529 shall apply to 
        referrals made on or after January 1, 1992.
            (2) Delay in effectiveness for more restrictive 
        provisions.--The amendments made by the following sections 
        shall apply with respect to a referral by a physician made on 
        or after December 31, 1994:
                    (A) Section 13523(b) (relating to the rural 
                provider exception).
                    (B) Section 13524(a) (relating to publicly-traded 
                securities).
                    (C)(i) Section 13525(a) (relating to an exception 
                for office rental and equipment), other than the 
                exception relating to equipment.
                    (ii) Section 13525(c)(1) (relating to exception for 
                personal services arrangements).
                    (iii) Section 13525(d) (relating to physician 
                recruitment).
                    (D) Section 13526 (relating to civil money 
                penalty).
                    (E) Section 13527 (relating to requirements for 
                group practices), other than subsection (c) (relating 
                to faculty plans).
                    (F) Section 13528 (relating to non-preemption).
                    (G) Section 13529(a) (relating to indirect 
                financial relationships).

                     Subchapter D--Other Provisions

SEC. 13551. DIRECT GRADUATE MEDICAL EDUCATION.

    (a) Adjustment in GME Base-year Costs of Federal Insurance 
Contributions Act.--
            (1) In general.--In determining the amount of payment to be 
        made under section 1886(h) of the Social Security Act in the 
        case of a hospital described in paragraph (2) for cost 
        reporting periods beginning on or after October 1, 1992, the 
        Secretary of Health and Human Services shall redetermine the 
        approved FTE resident amount to reflect the amount that would 
        have been paid the hospital if, during the hospital's base cost 
        reporting period, the hospital had been liable for FICA taxes 
        or for contributions to the retirement system of a State, a 
        political subdivision of a State, or an instrumentality of such 
        a State or political subdivision with respect to interns and 
        residents in its medical residency training program.
            (2) Hospitals affected.--A hospital described in this 
        paragraph is a hospital that did not pay FICA taxes with 
        respect to interns and residents in its medical residency 
        training program during the hospital's base cost reporting 
        period, but is required to pay FICA taxes or make contributions 
        to a retirement system described in paragraph (1) with respect 
        to such interns and residents because of the amendments made by 
        section 11332(b) of OBRA-1990.
            (3) Definitions.--In this subsection:
                    (A) The ``base cost reporting period'' for a 
                hospital is the hospital's cost reporting period that 
                began during fiscal year 1984.
                    (B) The term ``FICA taxes'' means, with respect to 
                a hospital, the taxes under section 3111 of the 
                Internal Revenue Code of 1986.
    (b) Publicly-Funded Family Practice Residency Programs.--
            (1) In general.--Section 1886(h)(5) (42 U.S.C. 
        1395ww(h)(5)) is amended by adding at the end the following new 
        subparagraph:
                    ``(I) Adjustments for certain family practice 
                residency programs.--
                            ``(i) In general.--In the case of an 
                        approved medical residency training program 
                        (meeting the requirements of clause (ii)) of a 
                        hospital which received payments from the 
                        United States, a State, or a political 
                        subdivision of a State or an instrumentality of 
                        such a State or political subdivision (other 
                        than payments under this title or a State plan 
                        under title XIX) for the program during the 
                        cost reporting period that began during fiscal 
                        year 1984, the Secretary shall--
                                    ``(I) provide for an average amount 
                                under paragraph (2)(A) that takes into 
                                account the Secretary's estimate of the 
                                amount that would have been recognized 
                                as reasonable under this title if the 
                                hospital had not received such 
                                payments, and
                                    ``(II) reduce the payment amount 
                                otherwise provided under this 
                                subsection in an amount equal to the 
                                proportion of such program payments 
                                during the cost reporting period 
                                involved that is allocable to this 
                                title.
                            ``(ii) Additional requirements.--A 
                        hospital's approved medical residency program 
                        meets the requirements of this clause if--
                                    ``(I) the program is limited to 
                                training for family and community 
                                medicine;
                                    ``(II) the program is the only 
                                approved medical residency program of 
                                the hospital; and
                                    ``(III) the average amount 
                                determined under paragraph (2)(A) for 
                                the hospital (as determined without 
                                regard to the increase in such amount 
                                described in clause (i)(I)) does not 
                                exceed $10,000.''.
            (2) Effective date.--The amendment made by paragraph (1) 
        shall apply to payments under section 1886(h) of the Social 
        Security Act for cost reporting periods beginning on or after 
        October 1, 1990.
    (c) Preventive Care Residencies.--
            (1) Eligibility of preventive care residency programs for 
        expanded initial residency periods.--Section 1886(h)(5)(F)(ii) 
        (42 U.S.C. 1395ww(h)(5)(F)(ii)) is amended by inserting after 
        ``fellowship program'' the following: ``or a preventive care 
        residency or fellowship program''.
            (2) Effective date.--The amendment made by paragraph (1) 
        shall apply to cost reporting periods beginning on or after 
        October 1, 1993.

SEC. 13552. IMMUNOSUPPRESSIVE DRUG THERAPY.

    Section 1861(s)(2)(J) (42 U.S.C. 1395x(s)(2)(J)) is amended by 
striking ``title, within'' and all that follows and inserting the 
following: ``title, but only in the case of drugs furnished--
                    ``(i) before 1994, within 12 months after the date 
                of the transplant procedure,
                    ``(ii) during 1994, within 18 months after the date 
                of the transplant procedure,
                    ``(iii) during 1995, within 24 months after the 
                date of the transplant procedure,
                    ``(iv) during 1996, within 30 months after the date 
                of the transplant procedure, and
                    ``(v) during any year after 1997, within 36 months 
                after the date of the transplant procedure;''.

SEC. 13553. REDUCTION IN PAYMENTS FOR ERYTHROPOIENTIN.

    (a) In General.--Section 1881(b)(11)(B)(ii)(I) (42 U.S.C. 
1395rr(b)(11)(B)(ii)(I)) is amended--
            (1) by striking ``1991'' and inserting ``1994''; and
            (2) by striking ``$11'' and inserting ``$10''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
apply to erythropoietin furnished on or after January 1, 1994.

SEC. 13554. QUALIFIED MEDICARE BENEFICIARY OUTREACH.

    The Secretary of Health and Human Services shall establish and 
implement a method for obtaining information from newly eligible 
medicare beneficiaries that may be used to determine whether such 
beneficiaries may be eligible for medical assistance for medicare cost-
sharing under State medicaid plans as qualified medicare beneficiaries, 
and for transmitting such information to the State in which such a 
beneficiary resides.

SEC. 13555. EXTENSION OF SOCIAL HEALTH MAINTENANCE ORGANIZATION 
              DEMONSTRATIONS.

    (a) Extension of Current Waivers.--Section 4018(b) of OBRA-1987, as 
amended by section 4207(b)(4)(B) of OBRA-1990, is amended--
            (1) in paragraph (1) by striking ``December 31, 1995'' and 
        inserting ``December 31, 1997''; and
            (2) in paragraph (4) by striking ``March 31, 1996'' and 
        inserting ``March 31, 1998''.
    (b) Expansion of Demonstrations.--Section 2355 of the Deficit 
Reduction Act of 1984 is amended--
            (1) in the last sentence of subsection (a) by striking ``12 
        months'' and inserting ``36 months''; and
            (2) in subsection (b)(1)(B)--
                    (A) by striking ``or'' at the end of clause (iii); 
                and
                    (B) by redesignating clause (iv) as clause (v) and 
                inserting after clause (iii) the following new clause:
                            ``(iv) integrating acute and chronic care 
                        management for patients with end-stage renal 
                        disease through expanded community care case 
                        management services (and for purposes of a 
                        demonstration project conducted under this 
                        clause, any requirement under a waiver granted 
                        under this section that a project disenroll 
                        individuals who develop end-stage renal disease 
                        shall not apply); or''.
    (c) Expansion of Number of Members Per Site.--The Secretary of 
Health and Human Services may not impose a limit of less than 12,000 on 
the number of individuals that may participate in a project conducted 
under section 2355 of the Deficit Reduction Act of 1984.
    (d) Miscellaneous and Technical Corrections.--
            (1) The section following section 4206 of OBRA-1990 is 
        amended by striking ``Sec. 4027.'' and inserting ``Sec. 
        4207.'', and in this subtitle is referred to as section 4207 of 
        OBRA-1990.
            (2) Section 2355(b)(1)(B) of the Deficit Reduction Act of 
        1984, as amended by section 4207(b)(4)(B)(ii) of OBRA-1990, is 
        amended--
                    (A) by striking ``12907(c)(4)(A)'' and inserting 
                ``4207(b)(4)(B)(i)'', and
                    (B) by striking ``feasibilitly'' and inserting 
                ``feasibility''.
            (3) Section 4207(b)(4)(B)(iii)(III) of OBRA-1990 is amended 
        by striking the period at the end and inserting a semicolon.
            (4) Subsections (c)(3) and (e) of section 2355 of the 
        Deficit Reduction Act of 1984, as amended by section 
        4207(b)(4)(B) of OBRA-1990, are each amended by striking 
        ``12907(c)(4)(A)'' each place it appears and inserting 
        ``4207(b)(4)(B)''.
            (5) Section 4207(c)(2) of OBRA-1990 is amended by striking 
        ``the Committee on Ways and Means'' each place it appears and 
        inserting ``the Committees on Ways and Means and Energy and 
        Commerce''.
            (6) Section 4207(d) of OBRA-1990 is amended by 
        redesignating the second paragraph (3) (relating to effective 
        date) as paragraph (4).
            (7) Section 4207(i)(2) of OBRA-1990 is amended--
                    (A) by striking the period at the end of clause 
                (iii) and inserting a semicolon, and
                    (B) in clause (v), by striking ``residents'' and 
                inserting ``patients''.
            (8) Section 4207(j) of OBRA-1990 is amended by striking 
        ``title'' each place it appears and inserting ``subtitle''.
    (e) Effective Date.--The amendments made by this section shall take 
effect as if included in the enactment of OBRA-90.

SEC. 13556. HOSPICE NOTIFICATION TO HOME HEALTH BENEFICIARIES.

    (a) In General.--Section 1891(a)(1) (42 U.S.C. 1395bbb(a)(1)) is 
amended by adding at the end the following new subparagraph:
                    ``(H) The right, in the case of a resident who is 
                entitled to benefits under this title, to be fully 
                informed orally and in writing (at the time of coming 
                under the care of the agency) of the entitlement of 
                individuals to hospice care under section 1812(a)(4) 
                (unless there is no hospice program providing hospice 
                care for which payment may be made under this title 
                within the geographic area of the facility and it is 
                not the common practice of the agency to refer patients 
                to hospice programs located outside such geographic 
                area).''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to services furnished on or after the first day of the first 
month beginning more than one year after the date of the enactment of 
this Act.

SEC. 13557. INTEREST PAYMENTS.

    (a) In General.--Sections 1816(c)(2)(B)(ii)(IV) and 
1842(c)(2)(B)(ii)(IV) of the Social Security Act shall be applied with 
respect to claims received in the 12-month period beginning October 1, 
1992, by substituting ``30 calendar days'' for ``24 calendar days'' and 
``17 calendar days''.
    (b) Effective Date.--Subsection (a) shall be in effect during the 
period that begins on the date of the enactment of this Act and ends on 
September 30, 1993.

SEC. 13558. PEER REVIEW ORGANIZATIONS.

    (a) Repeal Of PRO Precertification Requirement for Certain Surgical 
Procedures.--
            (1) In general.--Section 1164 (42 U.S.C. 1320c-13) is 
        repealed.
            (2) Conforming amendments.--
                    (A) Section 1154 (42 U.S.C. 1320c-3) is amended--
                            (i) in subsection (a), by striking 
                        paragraph (12), and
                            (ii) in subsection (d), by striking ``(and 
                        except as provided in section 1164)''.
                    (B) Section 1833 (42 U.S.C. 1395l) is amended--
                            (i) in subsection (a)(1)(D)(i), by striking 
                        ``, or for tests furnished in connection with 
                        obtaining a second opinion required under 
                        section 1164(c)(2) (or a third opinion, if the 
                        second opinion was in disagreement with the 
                        first opinion)'';
                            (ii) in subsection (a)(1), by striking 
                        clause (G);
                            (iii) in subsection (a)(2)(A), by striking 
                        ``, to items and services (other than clinical 
                        diagnostic laboratory tests) furnished in 
                        connection with obtaining a second opinion 
                        required under section 1164(c)(2) (or a third 
                        opinion, if the second opinion was in 
                        disagreement with the first opinion),'';
                            (iv) in subsection (a)(2)(D)(i)--
                                    (I) by striking ``basis,'' and 
                                inserting ``basis or'', and
                                    (II) by striking ``, or for tests 
                                furnished in connection with obtaining 
                                a second opinion required under section 
                                1164(c)(2) (or a third opinion, if the 
                                second opinion was in disagreement with 
                                the first opinion)'';
                            (v) in subsection (a)(3), by striking ``and 
                        for items and services furnished in connection 
                        with obtaining a second opinion required under 
                        section 1164(c)(2), or a third opinion, if the 
                        second opinion was in disagreement with the 
                        first opinion)''; and
                            (vi) in the first sentence of subsection 
                        (b), by striking ``(4)'' and all that follows 
                        through ``and (5)'' and inserting and (4)''.
                    (C) Section 1834(g)(1)(B) (42 U.S.C. 
                1395m(g)(1)(B)) is amended by striking ``and for items 
                and services furnished in connection with obtaining a 
                second opinion required under section 1164(c)(2), or a 
                third opinion, if the second opinion was in 
                disagreement with the first opinion)''.
                    (D) Section 1862(a) (42 U.S.C. 1395y(a)) is 
                amended--
                            (i) by adding ``or'' at the end of 
                        paragraph (14),
                            (ii) by striking ``; or'' at the end of 
                        paragraph (15) and inserting a period, and
                            (iii) by striking paragraph (16).
                    (E) The third sentence of section 1866(a)(2)(A) (42 
                U.S.C. 1395w(a)(2)(A)) is amended by striking ``, with 
                respect to items and services furnished in connection 
                with obtaining a second opinion required under section 
                1164(c)(2) (or a third opinion, if the second opinion 
                was in disagreement with the first opinion),''.
            (3) Effective date.--The amendments made by this subsection 
        shall apply to services provided on or after the date of the 
        enactment of this Act.
    (b) Miscellaneous and Technical Corrections.--(1) The third 
sentence of section 1156(b)(1) (42 U.S.C. 1320c-5(b)(1)) is amended by 
striking ``whehter'' and inserting ``whether''.
    (2) Section 1154(a)(9)(B) (42 U.S.C. 1320c-3(a)(9)(B)) is amended 
by striking ``this subsection'' and inserting ``section 1156(a)''.
    (3) Section 4205(d)(2)(B) of OBRA-1990 is amended by striking 
``amendments'' and inserting ``amendment''.
    (4) Section 1160(d) (42 U.S.C. 1320c-9(d)) is amended by striking 
``subpena'' and inserting ``subpoena''.
    (5) Section 4205(e)(2) of OBRA-1990 is amended by striking 
``amendments'' and inserting ``amendment'' and by striking ``all''.
    (6)(A) Except as provided in subparagraph (B), the amendments made 
by this subsection shall take effect as if included in the enactment of 
OBRA-1990.
    (B) The amendment made by paragraph (2) (relating to the 
requirement on reporting of information to State licensing boards) 
shall take effect on the date of the enactment of this Act.

SEC. 13559. HEALTH MAINTENANCE ORGANIZATIONS.

    (a) Adjustment in Medicare Capitation Payments To Account for 
Regional Variations in Application of Secondary Payer Provisions.--
            (1) In general.--Section 1876(a)(4) (42 U.S.C. 
        1395mm(a)(4)) is amended by adding at the end the following new 
        sentence: ``In establishing the adjusted average per capita 
        cost for a geographic area, the Secretary shall take into 
        account the differences between the proportion of individuals 
        in the area with respect to whom there is a group health plan 
        that is a primary plan (within the meaning of section 
        1862(b)(2)(A)) compared to the proportion of all such 
        individuals with respect to whom there is such a group health 
        plan.''.
            (2) Effective date.--The amendment made by paragraph (1) 
        shall apply to contracts entered into for years beginning with 
        1994.
    (b) Revisions in the Payment Methodology for Risk Contractors.--
Section 4204(b) of OBRA-1990 is amended to read as follows:
    ``(b) Revisions in the Payment Methodology for Risk Contractors.--
(1)(A) Not later than October 1, 1993, the Secretary of Health and 
Human Services (in this subsection referred to as the ``Secretary'') 
shall submit a proposal to the Congress that provides for revisions to 
the payment method to be applied in years beginning with 1995 for 
organizations with a risk-sharing contract under section 1876(g) of the 
Social Security Act.
    ``(B) In proposing the revisions required under subparagraph (A) 
the Secretary shall consider--
            ``(i) the difference in costs associated with medicare 
        beneficiaries with differing health status and demographic 
        characteristics; and
            ``(ii) the effects of using alternative geographic 
        classifications on the determinations of costs associated with 
        beneficiaries residing in different areas.
    ``(2) Not later than 3 months after the date of submittal of the 
proposal under paragraph (1), the Comptroller General shall review the 
proposal and shall report to Congress on the appropriateness of the 
proposed modifications.''.
    (c) Miscellaneous and Technical Corrections.--(1) Section 
1876(a)(3) (42 U.S.C. 1395mm(a)(3)) is amended by striking ``subsection 
(c)(7)'' and inserting ``subsections (c)(2)(B)(ii) and (c)(7)''.
    (2) Section 4204(c)(3) of OBRA-1990 is amended by striking ``for 
1991'' and inserting ``for years beginning with 1991''.
    (3) Section 4204(d)(2) of OBRA-1990 is amended by striking 
``amendment'' and inserting ``amendments''.
    (4) Section 1876(a)(1)(E)(ii)(I) (42 U.S.C. 1395mm(a)(1)(E)(ii)(I)) 
is amended by striking the comma after ``contributed to''.
    (5) Section 4204(e)(2) of OBRA-1990 is amended by striking ``(which 
has a risk-sharing contract under section 1876 of the Social Security 
Act)''.
    (6) Section 4204(f)(4) of OBRA-1990 is amended by striking 
``final''.
    (7) Section 1862(b)(3)(C) (42 U.S.C. 1395y(b)(3)(C)) is amended--
            (A) in the heading, by striking ``plan'' and inserting 
        ``plan or a large group health plan'';
            (B) by striking ``group health plan'' and inserting ``group 
        health plan or a large group health plan'';
            (C) by striking ``, unless such incentive is also offered 
        to all individuals who are eligible for coverage under the 
        plan''; and
            (D) by striking ``the first sentence of subsection (a) and 
        other than subsection (b)'' and inserting ``subsections (a) and 
        (b)''.
    (8) The amendments made by this subsection shall take effect as if 
included in the enactment of OBRA-1990.

SEC. 13560. MEDICARE ADMINISTRATION BUDGET PROCESS.

    (a) Adjustments.--Section 251(b)(2) of the Balanced Budget and 
Emergency Deficit Control Act of 1985 is amended by redesignating 
subparagraphs (E) and (F) as subparagraphs (F) and (G), respectively, 
and by inserting after subparagraph (D) the following new subparagraph:
                    ``(E) Medicare administrative costs.--To the extent 
                that appropriations are enacted that provide additional 
                new budget authority (as compared with a base level of 
                $1,526,000,000 for new budget authority) for the 
                administration of the Medicare program by fiscal 
                intermediaries and carriers pursuant to sections 1816 
                and 1842(a) of title XVIII of the Social Security Act, 
                the adjustment for that year shall be that amount, but 
                shall not exceed--
                            ``(i) for fiscal year 1994, $198,000,000 in 
                        new budget authority and $198,000,000 in 
                        outlays; and
                            ``(ii) for fiscal year 1995, $220,000,000 
                        in new budget authority and $220,000,000 in 
                        outlays; and
        the prior-year outlays resulting from these appropriations of 
        budget authority and additional adjustments equal to the sum of 
        the maximum adjustments that could have been made in preceding 
        fiscal years under this subparagraph.''.
    (b) Conforming Amendments.--
            (1) Section 603(a) of the Congressional Budget Act of 1974 
        is amended by striking ``section 251(b)(2)(E)(i)'' and 
        inserting ``section 251(b)(2)(F)(i)''.
            (2) Section 606(d) of the Congressional Budget Act of 1974 
        is amended--
                    (A) in paragraph (1)(A) by striking ``section 
                251(b)(2)(E)(i)'' and inserting ``section 
                251(b)(2)(F)(i)''; and
                    (B) in paragraph (2), by inserting 
                ``251(b)(2)(E),'' after ``251(b)(2)(D),''.

SEC. 13561. OTHER PROVISIONS.

    (a) Survey and Certification Requirements.--(1) Section 1864 (42 
U.S.C. 1395aa) is amended--
            (A) in subsection (e), by striking ``title'' and inserting 
        ``title (other than any fee relating to section 353 of the 
        Public Health Service Act)''; and
            (B) in the first sentence of subsection (a), by striking 
        ``1861(s) or'' and all that follows through ``Service Act,'' 
        and inserting ``1861(s),''.
    (2) An agreement made by the Secretary of Health and Human Services 
with a State under section 1864(a) of the Social Security Act may 
include an agreement that the services of the State health agency or 
other appropriate State agency (or the appropriate local agencies) will 
be utilized by the Secretary for the purpose of determining whether a 
laboratory meets the requirements of section 353 of the Public Health 
Service Act.
    (b) Home Dialysis Demonstration Technical Correction.--Section 4202 
of OBRA-1990 is amended--
            (1) in subsection (b)(1)(A), by striking ``home 
        hemodialysis staff assistant'' and inserting ``qualified home 
        hemodialysis staff assistant (as described in subsection 
        (d))'';
            (2) in subsection (b)(2)(B)(ii)(I), by striking ``(as 
        adjusted to reflect differences in area wage levels);
            (3) in subsection (c)(1)(A), by striking ``skilled''; and
            (4) in subsection (c)(1)(E), by striking ``(b)(4)'' and 
        inserting ``(b)(2)''.
    (c) Other Technical Amendments.--(1) Section 1833 (42 U.S.C. 1395l) 
is amended by redesignating the subsection (r) added by section 
4206(b)(2) of OBRA-1990 as subsection (s).
    (2) Section 1866(f)(1) (42 U.S.C. 1395cc(f)(1)) is amended by 
striking ``1833(r)'' and inserting ``1833(s)''.
    (3) Section 1861(s)(2) (42 U.S.C. 1395x(s)(2)) is amended by moving 
subparagraph (O), as redesignated by section 13478(f)(8)(B)(iii)(II) of 
this title, two ems to the left.
    (4) Section 1881(b)(1)(C) (42 U.S.C. 1395rr(b)(1)(C)) is amended by 
striking ``1861(s)(2)(Q)'' and inserting ``1861(s)(2)(P)''.
    (5) Section 4201(d)(2) of OBRA-1990 is amended by striking ``(B) by 
striking'', ``(C) by striking'', and ``(3) by adding'' and inserting 
``(i) by striking'', ``(ii) by striking'', and ``(B) by adding'', 
respectively.
    (6)(A) Section 4207(a)(1) of OBRA-1990 is amended by adding closing 
quotation marks and a period after ``such review.''.
    (B) Section 4207(a)(4) of OBRA-1990 is amended by striking ``this 
subsection'' and inserting ``paragraphs (2) and (3)''.
    (C) Section 4207(b)(1) of OBRA-1990 is amended by striking 
``section 3(7)'' and inserting ``section 601(a)(1)''.
    (d) Effective Date.--The amendments made by this section shall take 
effect as if included in the enactment of OBRA-1990.

          CHAPTER 4--MEDICARE SUPPLEMENTAL INSURANCE POLICIES

SEC. 13571. STANDARDS FOR MEDICARE SUPPLEMENTAL INSURANCE POLICIES.

    (a) Simplification of Medicare Supplemental Policies.--
            (1) Section 4351 of OBRA-1990 is amended by striking ``(a) 
        In General.--''.
            (2) Section 1882(p) (42 U.S.C. 1395ss(p)) is amended--
                    (A) in paragraph (1)(A)--
                            (i) by striking ``promulgates'' and 
                        inserting ``changes the revised NAIC Model 
                        Regulation (described in subsection (m)) to 
                        incorporate'',
                            (ii) by striking ``(such limitations, 
                        language, definitions, format, and standards 
                        referred to collectively in this subsection as 
                        `NAIC standards')'', and
                            (iii) by striking ``included a reference to 
                        the NAIC standards'' and inserting ``were a 
                        reference to the revised NAIC Model Regulation 
                        as changed under this subparagraph (such 
                        changed regulation referred to in this section 
                        as the `1991 NAIC Model Regulation')'';
                    (B) in paragraph (1)(B)--
                            (i) by striking ``promulgate NAIC 
                        standards'' and inserting ``make the changes in 
                        the revised NAIC Model Regulation'',
                            (ii) by striking ``limitations, language, 
                        definitions, format, and standards described in 
                        clauses (i) through (iv) of such subparagraph 
                        (in this subsection referred to collectively as 
                        `Federal standards')'' and inserting ``a 
                        regulation'', and
                            (iii) by striking ``included a reference to 
                        the Federal standards'' and inserting ``were a 
                        reference to the revised NAIC Model Regulation 
                        as changed by the Secretary under this 
                        subparagraph (such changed regulation referred 
                        to in this section as the `1991 Federal 
                        Regulation')'';
                    (C) in paragraph (1)(C)(i), by striking ``NAIC 
                standards or the Federal standards'' and inserting 
                ``1991 NAIC Model Regulation or 1991 Federal 
                Regulation'';
                    (D) in paragraphs (1)(C)(ii)(I), (1)(E), (2), and 
                (9)(B), by striking ``NAIC or Federal standards'' and 
                inserting ``1991 NAIC Model Regulation or 1991 Federal 
                Regulation'';
                    (E) in paragraph (2)(C), by striking ``(5)(B)'' and 
                inserting ``(4)(B)'';
                    (F) in paragraph (4)(A)(i), by inserting ``or 
                paragraph (6)'' after ``(B)'';
                    (G) in paragraph (4), by striking ``applicable 
                standards'' each place it appears and inserting 
                ``applicable 1991 NAIC Model Regulation or 1991 Federal 
                Regulation'';
                    (H) in paragraph (6), by striking ``in regard to 
                the limitation of benefits described in paragraph (4)'' 
                and inserting ``described in clauses (i) through (iii) 
                of paragraph (1)(A)'';
                    (I) in paragraph (7), by striking ``policyholder'' 
                and inserting ``policyholders'';
                    (J) in paragraph (8), by striking ``after the 
                effective date of the NAIC or Federal standards with 
                respect to the policy, in violation of the previous 
                requirements of this subsection'' and inserting ``on 
                and after the effective date specified in paragraph 
                (1)(C) (but subject to paragraph (10)), in violation of 
                the applicable 1991 NAIC Model Regulation or 1991 
                Federal Regulation insofar as such regulation relates 
                to the requirements of subsection (o) or (q) or clause 
                (i), (ii), or (iii) of paragraph (1)(A)'';
                    (K) in paragraph (9), by adding at the end the 
                following new subparagraph:
    ``(D) Subject to paragraph (10), this paragraph shall apply to 
sales of policies occurring on or after the effective date specified in 
paragraph (1)(C).''; and
                    (L) in paragraph (10), by striking ``this 
                subsection'' and inserting ``paragraph (1)(A)(i)''.
    (b) Guaranteed Renewability.--Section 1882(q) (42 U.S.C. 1395ss(q)) 
is amended--
            (1) in paragraph (2), by striking ``paragraph (2)'' and 
        inserting ``paragraph (4)'', and
            (2) in paragraph (4), by striking ``the succeeding issuer'' 
        and inserting ``issuer of the replacement policy''.
    (c) Enforcement of Standards.--
            (1) Section 1882(a)(2) (42 U.S.C. 1395ss(a)(2)) is 
        amended--
                    (A) in subparagraph (A), by striking ``NAIC 
                standards or the Federal standards'' and inserting 
                ``1991 NAIC Model Regulation or 1991 Federal 
                Regulation'', and
                    (B) by striking ``after the effective date of the 
                NAIC or Federal standards with respect to the policy'' 
                and inserting ``on and after the effective date 
                specified in subsection (p)(1)(C)''.
            (2) The sentence in section 1882(b)(1) added by section 
        4353(c)(5) of OBRA-1990 is amended--
                    (A) by striking ``The report'' and inserting ``Each 
                report'',
                    (B) by inserting ``and requirements'' after 
                ``standards'',
                    (C) by striking ``and'' after ``compliance,'', and
                    (D) by striking the comma after ``Commissioners''.
            (3) Section 1882(g)(2)(B) (42 U.S.C. 1395ss(g)(2)(B)) is 
        amended by striking ``Panel'' and inserting ``Secretary''.
            (4) Section 1882(b)(1) (42 U.S.C. 1395ss(b)(1)) is amended 
        by striking ``the the Secretary'' and inserting ``the 
        Secretary''.
    (d) Preventing Duplication.--
            (1) Section 1882(d)(3)(A) (42 U.S.C. 1395ss(d)(3)(A)) is 
        amended--
                    (A) by amending the first sentence to read as 
                follows:
    ``(i) It is unlawful for a person to sell or issue to an individual 
entitled to benefits under part A or enrolled under part B of this 
title--
            ``(I) a health insurance policy with knowledge that the 
        policy duplicates health benefits to which the individual is 
        otherwise entitled under this title or title XIX,
            ``(II) a medicare supplemental policy with knowledge that 
        the individual is entitled to benefits under another medicare 
        supplemental policy, or
            ``(III) a health insurance policy (other than a medicare 
        supplemental policy) with knowledge that the policy duplicates 
        health benefits to which the individual is otherwise entitled, 
        other than benefits to which the individual is entitled under a 
        requirement of State or Federal law.'';
                    (B) by designating the second sentence as clause 
                (ii) and, in such clause, by striking ``the previous 
                sentence'' and inserting ``clause (i)'';
                    (C) by designating the third sentence as clause 
                (iii) and, in such clause--
                            (i) by striking ``the previous sentence'' 
                        and inserting ``clause (i) with respect to the 
                        sale of a medicare supplemental policy'', and
                            (ii) by striking ``and the statement'' and 
                        all that follows up to the period at the end; 
                        and
                    (D) by striking the last sentence.
            (2) Section 1882(d)(3)(B) (42 U.S.C. 1395ss(d)(3)(B)) is 
        amended--
                    (A) in clause (ii)(II), by striking ``65 years of 
                age or older'',
                    (B) in clause (iii)(I), by striking ``another 
                medicare'' and inserting ``a medicare'',
                    (C) in clause (iii)(I), by striking ``such a 
                policy'' and inserting ``a medicare supplemental 
                policy'',
                    (D) in clause (iii)(II), by striking ``another 
                policy'' and inserting ``a medicare supplemental 
                policy'', and
                    (E) by amending subclause (III) of clause (iii) to 
                read as follows:
    ``(III) If the statement required by clause (i) is obtained and 
indicates that the individual is entitled to any medical assistance 
under title XIX, the sale of the policy is not in violation of clause 
(i) (insofar as such clause relates to such medical assistance), if a 
State medicaid plan under such title pays the premiums for the policy, 
or, in the case of a qualified medicare beneficiary described in 
section 1905(p)(1), if the State pays less than the full amount of 
medicare cost-sharing as described in subparagraphs (B), (C), and (D) 
of section 1905(p)(3) for such individual.''.
            (3)(A) Section 1882(d)(3)(C) (42 U.S.C. 1395ss(d)(3)(C)) is 
        amended--
                    (i) by striking ``the selling'' and inserting ``(i) 
                the sale or issuance'', and
                    (ii) by inserting before the period at the end the 
                following: ``, (ii) the sale or issuance of a policy or 
                plan described in subparagraph (A)(i)(I) (other than a 
                medicare supplemental policy to an individual entitled 
                to any medical assistance under title XIX) under which 
                all the benefits are fully payable directly to or on 
                behalf of the individual without regard to other health 
                benefit coverage of the individual but only if (for 
                policies sold or issued more than 60 days after the 
                date the statements are published or promulgated under 
                subparagraph (D)) there is disclosed in a prominent 
                manner as part of (or together with) the application 
                the applicable statement (specified under subparagraph 
                (D)) of the extent to which benefits payable under the 
                policy or plan duplicate benefits under this title, or 
                (iii) the sale or issuance of a policy or plan 
                described in subparagraph (A)(i)(III) under which all 
                the benefits are fully payable directly to or on behalf 
                of the individual without regard to other health 
                benefit coverage of the individual''.
            (B) Section 1882(d)(3) (42 U.S.C. 1395ss(d)(3)) is amended 
        by adding at the end the following:
    ``(D)(i) If--
            ``(I) within the 90-day period beginning on the date of the 
        enactment of this subparagraph, the National Association of 
        Insurance Commissioners develops (after consultation with 
        consumer and insurance industry representatives) and submits to 
        the Secretary a statement for each of the types of health 
        insurance policies (other than medicare supplemental policies 
        and including, as separate types of policies, policies paying 
        directly to the beneficiary fixed, cash benefits) which are 
        sold to persons entitled to health benefits under this title, 
        of the extent to which benefits payable under the policy or 
        plan duplicate benefits under this title, and
            ``(II) the Secretary approves all the statements submitted 
        as meeting the requirements of subclause (I),
each such statement shall be (for purposes of subparagraph (C)) the 
statement specified under this subparagraph for the type of policy 
involved. The Secretary shall review and approve (or disapprove) all 
the statements submitted under subclause (I) within 30 days after the 
date of their submittal. Upon approval of such statements, the 
Secretary shall publish such statements.
    ``(ii) If the Secretary does not approve the statements under 
clause (i) or the statements are not submitted within the 90-day period 
specified in such clause, the Secretary shall promulgate (after 
consultation with consumer and insurance industry representatives and 
not later than 90 days after the date of disapproval or the end of such 
90-day period (as the case may be)) a statement for each of the types 
of health insurance policies (other than medicare supplemental policies 
and including, as separate types of policies, policies paying directly 
to the beneficiary fixed, cash benefits) which are sold to persons 
entitled to health benefits under this title, of the extent to which 
benefits payable under the policy or plan duplicate benefits under this 
title, and each such statement shall be (for purposes of subparagraph 
(C)) the statement specified under this subparagraph for the type of 
policy involved.''.
            (C) The requirement of a disclosure under section 
        1882(d)(3)(C)(ii) of the Social Security Act shall not apply to 
        an application made for a policy or plan before 60 days after 
        the date of the Secretary of Health and Human Services 
        publishes or promulgates all the statements under section 
        1882(d)(3)(D) of such Act.
            (4) Subparagraphs (A) and (B) of section 1882(q)(5)(A) are 
        amended by striking ``of the Social Security Act''.
            (5) The second subsection (b) of section 4354 of OBRA-1990 
        (relating to effective date) is amended by redesignating such 
        subsection as subsection (c).
    (e) Loss Ratios and Refunds of Premiums.--
            (1) Section 1882(r) (42 U.S.C. 1395ss(r)) is amended--
                    (A) in paragraph (1), by striking ``or sold'' and 
                inserting ``or renewed (or otherwise provide coverage 
                after the date described in subsection (p)(1)(C))'';
                    (B) in paragraph (1)(A), by inserting ``for periods 
                after the effective date of these provisions'' after 
                ``the policy can be expected'';
                    (C) in paragraph (1)(A), by striking 
                ``Commissioners,'' and inserting ``Commissioners)'';
                    (D) in paragraph (1)(B), by inserting before the 
                period at the end the following: ``, treating policies 
                of the same type as a single policy for each standard 
                package'';
                    (E) by adding at the end of paragraph (1) the 
                following: ``For the purpose of calculating the refund 
                or credit required under paragraph (1)(B) for a policy 
                issued before the date specified in subsection 
                (p)(1)(C), the refund or credit calculation shall be 
                based on the aggregate benefits provided and premiums 
                collected under all such policies issued by an insurer 
                in a State (separated as to individual and group 
                policies) and shall be based only on aggregate benefits 
                provided and premiums collected under such policies 
                after the date specified in section 13571(m)(4) of the 
                Omnibus Budget Reconciliation Act of 1993.'';
                    (F) in the first sentence of paragraph (2)(A), by 
                striking ``by policy number'' and inserting ``by 
                standard package'';
                    (G) by striking the second sentence of paragraph 
                (2)(A) and inserting the following: ``Paragraph (1)(B) 
                shall not apply to a policy until 12 months following 
                issue.'';
                    (H) in the last sentence of paragraph (2)(A), by 
                striking ``in order'' and all that follows through 
                ``are effective'';
                    (I) by adding at the end of paragraph (2)(A), the 
                following new sentence: ``In the case of a policy 
                issued before the date specified in subsection 
                (p)(1)(C), paragraph (1)(B) shall not apply until 1 
                year after the date specified in section 13571(m)(4) of 
                the Omnibus Budget Reconciliation Act of 1993.'';
                    (J) in paragraph (2), by striking ``policy year'' 
                each place it appears and inserting ``calendar year'';
                    (K) in paragraph (4), by striking ``February'', 
                ``disllowance'', ``loss-ratios'' each place it appears, 
                and ``loss-ratio'' and inserting ``October'', 
                ``disallowance'', ``loss ratios'', and ``loss ratio'', 
                respectively;
                    (L) in paragraph (6)(A), by striking ``issues a 
                policy in violation of the loss ratio requirements of 
                this subsection'' and ``such violation'' and inserting 
                ``fails to provide refunds or credits as required in 
                paragraph (1)(B)'' and ``policy issued for which such 
                failure occurred'', respectively; and
                    (M) in paragraph (6)(B), by striking ``to 
                policyholders'' and inserting ``to the policyholder or, 
                in the case of a group policy, to the certificate 
                holder''.
            (2) Section 1882(b)(1) (42 U.S.C. 1395ss(b)(1)) is amended, 
        in the matter after subparagraph (H), by striking ``subsection 
        (F)'' and inserting ``subparagraph (F)''.
            (3) Section 4355(d) of OBRA-1990 is amended by striking 
        ``sold or issued'' and all that follows and inserting ``issued 
        or renewed (or otherwise providing coverage after the date 
        described in section 1882(p)(1)(C) of the Social Security Act) 
        on or after the date specified in section 1882(p)(1)(C) of such 
        Act.''.
    (f) Treatment of HMO's.--
            (1) Section 1882(g)(1) (42 U.S.C. 1395ss(g)(1)) is amended 
        by striking ``a health maintenance organization or other direct 
        service organization'' and all that follows through ``1833'' 
        and inserting ``an eligible organization (as defined in section 
        1876(b)) if the policy or plan provides benefits pursuant to a 
        contract under section 1876 or an approved demonstration 
        project described in section 603(c) of the Social Security 
        Amendments of 1983, section 2355 of the Deficit Reduction Act 
        of 1984, or section 9412(b) of the Omnibus Budget 
        Reconciliation Act of 1986 or, during the period beginning on 
        the date specified in subsection (p)(1)(C) and ending on 
        December 31, 1994, a policy or plan of an organization if the 
        policy or plan provides benefits pursuant to an agreement under 
        section 1833(a)(1)(A)''.
            (2) Section 4356(b) of OBRA-1990 is amended by striking 
        ``on the date of the enactment of this Act'' and inserting ``on 
        the date specified in section 1882(p)(1)(C) of the Social 
        Security Act''.
    (g) Pre-existing Condition Limitations.--Section 1882(s) (42 U.S.C. 
1395ss(s)) is amended--
            (1) in paragraph (2)(A), by striking ``for which an 
        application is submitted'' and inserting ``in the case of an 
        individual for whom an application is submitted prior to or'',
            (2) in paragraph (2)(A), by striking ``in which the 
        individual (who is 65 years of age or older) first is enrolled 
        for benefits under part B'' and inserting ``as of the first day 
        on which the individual is 65 years of age or older and is 
        enrolled for benefits under part B'', and
            (3) in paragraph (2)(B), by striking ``before it'' and 
        inserting ``before the policy''.
    (h) Medicare Select Policies.--
            (1) Section 1882(t) (42 U.S.C. 1395ss(t)) is amended--
                    (A) in paragraph (1), by inserting ``medicare 
                supplemental'' after ``If a'',
                    (B) in paragraph (1), by striking ``NAIC Model 
                Standards'' and inserting ``1991 NAIC Model Regulation 
                or 1991 Federal Regulation'',
                    (C) in paragraph (1)(A), by inserting ``or 
                agreements'' after ``contracts'',
                    (D) in subparagraphs (E)(i) and (F) of paragraph 
                (1), by striking ``NAIC standards'' and inserting 
                ``standards in the 1991 NAIC Model Regulation or 1991 
                Federal Regulation'', and
                    (E) in paragraph (2), by inserting ``the issuer'' 
                before ``is subject to a civil money penalty''.
            (2) Section 1154(a)(4)(B) (42 U.S.C. 1320c-3(a)(4)(B)) is 
        amended--
                    (A) by inserting ``that is'' after ``(or'', and
                    (B) by striking ``1882(t)'' and inserting 
                ``1882(t)(3)''.
    (i) Health Insurance Counseling.--Section 4360 of OBRA-1990 is 
amended--
            (1) in subsection (b)(2)(A)(ii), by striking ``Act'' and 
        inserting ``Act)'';
            (2) in subsection (b)(2)(D), by striking ``services'' and 
        inserting ``counseling'';
            (3) in subsection (b)(2)(I), by striking ``assistance'' and 
        inserting ``referrals'';
            (4) in subsection (c)(1), by striking ``and that such 
        activities will continue to be maintained at such level'';
            (5) in subsection (d)(3), by striking ``to the rural 
        areas'' and inserting ``eligible individuals residing in rural 
        areas'';
            (6) in subsection (e)--
                    (A) by striking ``subsection (c) or (d)'' and 
                inserting ``this section'',
                    (B) by striking ``and annually thereafter, issue an 
                annual report'' and inserting ``and annually thereafter 
                during the period of the grant, issue a report'',
                    (C) in paragraph (1), by striking ``State-wide'', 
                and
                    (D) in subsection (f), by striking paragraph (2) 
                and by redesignating paragraphs (3) through (5) as 
                paragraphs (2) through (4), respectively; and
            (7) by redesignating the second subsection (f) (relating to 
        authorization of appropriations for grants) as subsection (g).
    (j) Telephone Information System.--
            (1) Section 1804 (42 U.S.C. 1395b-2) is amended--
                    (A) by adding at the end of the heading the 
                following: ``; medicare and medigap information'',
                    (B) by inserting ``(a)'' after ``1804.'', and
                    (C) by adding at the end the following new 
                subsection:
    ``(b) The Secretary shall provide information via a toll-free 
telephone number on the programs under this title.''.
            (2) Section 1882(f) (42 U.S.C. 1395ss(f)) is amended by 
        adding at the end the following new paragraph:
    ``(3) The Secretary shall provide information via a toll-free 
telephone number on medicare supplemental policies (including the 
relationship of State programs under title XIX to such policies).''.
            (3) Section 1889 is repealed.
    (k) Mailing of Policies.--Section 1882(d)(4) (42 U.S.C. 
1395ss(d)(4)) is amended--
            (1) in subparagraph (D), by striking ``, if such policy'' 
        and all that follows up to the period at the end, and
            (2) by adding at the end the following new subparagraph:
    ``(E) Subparagraph (A) shall not apply in the case of an issuer who 
mails or causes to be mailed a policy, certificate, or other matter 
solely to comply with the requirements of subsection (q).''.
    (l) Effective Date.--The amendments made by this section shall be 
effective as if included in the enactment of OBRA-1990; except that--
            (1) the amendments made by subsection (d)(1) shall take 
        effect on the date of the enactment of this Act, but no penalty 
        shall be imposed under section 1882(d)(3)(A) of the Social 
        Security Act (for an action occurring after the effective date 
        of the amendments made by section 4354 of OBRA-1990 and before 
        the date of the enactment of this Act) with respect to the sale 
        or issuance of a policy which is not unlawful under section 
        1882(d)(3)(A)(i)(II) of the Social Security Act (as amended by 
        this section);
            (2) the amendments made by subsection (d)(2)(A) and by 
        subparagraphs (A), (B), and (E) of subsection (e)(1) shall be 
        effective on the date specified in subsection (m)(4); and
            (3) the amendment made by subsection (g)(2) shall take 
        effect on January 1, 1994, and shall apply to individuals who 
        attain 65 years of age or older on or after the effective date 
        of section 1882(s)(2) of the Social Security Act (and, in the 
        case of individuals who attained 65 years of age after such 
        effective date and before January 1, 1994, and who were not 
        covered under such section before January 1, 1994, the 6-month 
        period specified in that section shall begin January 1, 1994).
    (m) Transition Provisions.--
            (1) In general.--If the Secretary of Health and Human 
        Services identifies a State as requiring a change to its 
        statutes or regulations to conform its regulatory program to 
        the changes made by this section, the State regulatory program 
        shall not be considered to be out of compliance with the 
        requirements of section 1882 of the Social Security Act due 
        solely to failure to make such change until the date specified 
        in paragraph (4).
            (2) NAIC standards.--If, within 6 months after the date of 
        the enactment of this Act, the National Association of 
        Insurance Commissioners (in this subsection referred to as the 
        ``NAIC'') modifies its 1991 NAIC Model Regulation (adopted in 
        July 1991) to conform to the amendments made by this section 
        and to delete from section 15C the exception which begins with 
        ``unless'', such modifications shall be considered to be part 
        of that Regulation for the purposes of section 1882 of the 
        Social Security Act.
            (3) Secretary standards.--If the NAIC does not make the 
        modifications described in paragraph (2) within the period 
        specified in such paragraph, the Secretary of Health and Human 
        Services shall make the modifications described in such 
        paragraph and such modifications shall be considered to be part 
        of that Regulation for the purposes of section 1882 of the 
        Social Security Act.
            (4) Date specified.--
                    (A) In general.--Subject to subparagraph (B), the 
                date specified in this paragraph for a State is the 
                earlier of--
                            (i) the date the State changes its statutes 
                        or regulations to conform its regulatory 
                        program to the changes made by this section, or
                            (ii) 1 year after the date the NAIC or the 
                        Secretary first makes the modifications under 
                        paragraph (2) or (3), respectively.
                    (B) Additional legislative action required.--In the 
                case of a State which the Secretary identifies as--
                            (i) requiring State legislation (other than 
                        legislation appropriating funds) to conform its 
                        regulatory program to the changes made in this 
                        section, but
                            (ii) having a legislature which is not 
                        scheduled to meet in 1994 in a legislative 
                        session in which such legislation may be 
                        considered,
                the date specified in this paragraph is the first day 
                of the first calendar quarter beginning after the close 
                of the first legislative session of the State 
                legislature that begins on or after January 1, 1994. 
                For purposes of the previous sentence, in the case of a 
                State that has a 2-year legislative session, each year 
                of such session shall be deemed to be a separate 
                regular session of the State legislature.

       CHAPTER 5--TREATMENT OF CERTAIN STATE HEALTH CARE PROGRAMS

SEC. 13581. TREATMENT OF CERTAIN STATE HEALTH CARE PROGRAMS.

    Section 514(b)(5) of the Employee Retirement Income Security Act of 
1974 (29 U.S.C. 1144(b)(5)) is amended to read as follows:
            ``(5)(A) Except as provided in subparagraphs (B) and (C), 
        subsection (a) shall not apply to the Hawaii Prepaid Health 
        Care Act (Haw. Rev. Stat. Sec. Sec. 393-1 through 393-51).
            ``(B) Nothing in subparagraph (A) shall be construed to 
        exempt from subsection (a) any State tax law relating to 
        employee benefits plans.
            ``(C) If the Secretary of Labor notifies the Governor of 
        the State of Hawaii that as the result of an amendment to the 
        Hawaii Prepaid Health Care Act enacted after October 5, 1992--
                    ``(i) the proportion of the population with health 
                care coverage under such Act is less than such 
                proportion on such date, or
                    ``(ii) the level of benefit coverage provided under 
                such Act is less than the actuarial equivalent of such 
                level of coverage on such date,
        subparagraph (A) shall not apply with respect to the 
        application of such amendment to such Act after the date of 
        such notification.''.

                     TITLE XIV--REVENUE PROVISIONS

SEC. 14001. SHORT TITLE; ETC.

    (a) Short Title.--This title may be cited as the ``Revenue 
Reconciliation Act of 1993''.
    (b) Amendment to 1986 Code.--Except as otherwise expressly 
provided, whenever in this title an amendment or repeal is expressed in 
terms of an amendment to, or repeal of, a section or other provision, 
the reference shall be considered to be made to a section or other 
provision of the Internal Revenue Code of 1986.
    (c) Section 15 Not To Apply.--Except in the case of the amendments 
made by section 14221 (relating to corporate rate increase), no 
amendment made by this title shall be treated as a change in a rate of 
tax for purposes of section 15 of the Internal Revenue Code of 1986.
    (d) Waiver of Estimated Tax Penalties.--No addition to tax shall be 
made under section 6654 or 6655 of the Internal Revenue Code of 1986 
for any period before April 16, 1994 (March 16, 1994, in the case of a 
corporation), with respect to any underpayment to the extent such 
underpayment was created or increased by any provision of this title.
    (e) Table of Contents.--

                     TITLE XIV--REVENUE PROVISIONS

Sec. 14001. Short title; etc.
             Subtitle A--Training and Investment Incentives

         Part I--Provisions Relating to Education and Training

Sec. 14101. Employer-provided educational assistance.
Sec. 14102. Targeted jobs credit.
                     Pasubpart a--research credites
Sec. 14111. Permanent extension of research credit.
Sec. 14112. Modification of fixed base percentage for startup 
                   subpart b--capital gain provisions
Sec. 14113. 50-percent exclusion for gain from certain small business 
                            stock.
Sec. 14114. Rollover of gain from sale of publicly traded securities 
                            into specialized small business investment 
       subpart c--modifications to minimum tax depreciation rules
Sec. subpart d--increase in expense treatment for small businesses
Sec. 14116. Increase in expense treatment for small businesses.
                  Part III--Tax-Exempt Bond Provisions

Sec. 14121. High-speed intercity rail facility bonds exempt from State 
                            volume cap.
Sec. 14122. Permanent extension of qualified small issue bonds.
   Part IV--Expansion and Simplification of Earned Income Tax Credit

Sec. 14131. Expansion and simplification of earned income tax credit.
subpart a--extension of qualified mortgage bonds and low-income housing 
                                 credit
Sec. 14141. Permanent extension of qualified mortgage bonds.
Sec. 14142. Psubpart b--modification of passive loss rulesit.
Sec. 14143. Application of passive loss rules to rental real estate 
 subpart c--provisions relating to real estate investments by pension 
                                 funds
Sec. 14144. Real estate property acquired by a qualified organization.
Sec. 14145. Repeal of special treatment of publicly traded 
                            partnerships.
Sec. 14146. Title-holding companies permitted to receive small amounts 
                            of unrelated business taxable income.
Sec. 14147. Exclusion from unrelated business tax of gains from certain 
                            property.
Sec. 14148. Exclusion from unrelated business tax of certain fees and 
                            option premiums.
Sec. 14149. Treatment of pension fund investments in real estate 
                  subpart d--discharge of indebtedness
Sec. 14150. Exclusion from gross income for income from discharge of 
                            qualified real property business 
subpart e--increase in recovery period for nonresidential real property
Sec. 14151. Increase in recovery period for nonresidential real 
                            property.
                          Part VI--Luxury Tax

Sec. 14161. Repeal of luxury excise taxes other than on passenger 
                            vehicles.
Sec. 14162. Exemption from luxury excise tax for certain equipment 
                            installed on passenger vehicles for use by 
                            disabled individuals.
Sec. 14163. Tax on diesel fuel used in noncommercial boats.
                        Part VII--Other Changes

Sec. 14171. Alternative minimum tax treatment of contributions of 
                            appreciated property.
Sec. 14172. Certain transfers to railroad retirement account made 
                            permanent.
Sec. 14173. Temporary extension of deduction for health insurance costs 
                            of self-employed individuals.
                     Subtitle B--Revenue Increases

                Part I-subpart a--rate increasesividuals
Sec. 14201. Increase in top marginal rate under section 1.
Sec. 14202. Surtax on high-income taxpayers.
Sec. 14203. Modifications to alternative minimum tax rates and 
                            exemption amounts.
Sec. 14204. Overall limitation on itemized deductions for high-income 
                            taxpayers made permanent.
Sec. 14205. Phaseout of personal exemption of high-income taxpayers 
                            made permanent.
Sec. 14206. Provisions to prevent conversion of ordinary income to 
                      subpart b--other provisions
Sec. 14207. Repeal of limitation on amount of wages subject to health 
                            insurance employment tax.
Sec. 14208. Top estate and gift tax rates made permanent.
Sec. 14209. Reduction in deductible portion of business meals and 
                            entertainment.
Sec. 14210. Elimination of deduction for club membership fees.
Sec. 14211. Disallowance of deduction for certain employee remuneration 
                            in excess of $1,000,000.
Sec. 14212. Reduction in compensation taken into account in determining 
                            contributions and benefits under qualified 
                            retirement plans.
Sec. 14213. Modification to deduction for certain moving expenses.
Sec. 14214. Simplification of individual estimated tax safe harbor 
                            based on last year's tax.
Sec. 14215. Social security and tier 1 railroad retirement benefits.
                Part II--Provisions Affecting Businesses

Sec. 14221. Increase in top marginal rate under section 11.
Sec. 14222. Denial of deduction for lobbying expenses.
Sec. 14223. Mark to market accounting method for securities dealers.
Sec. 14224. Clarification of treatment of certain FSLIC financial 
                            assistance.
Sec. 14225. Modification of corporate estimated tax rules.
Sec. 14226. Limitation on section 936 credit.
Sec. 14227. Modification to limitation on deduction for certain 
                            interest.
 subpart a--current taxation of certain earnings of controlled foreign 
                              corporations
Sec. 14231. Earnings invested in excess passive assets.
Sec. 14232. Modification to taxation of investment in United States 
                            property.
Sec.subpart b--allocation of research and experimental expenditures
Sec. 14234. Allocationsubpart c--other provisionsal expenditures.
Sec. 14235. Repeal of certain exceptions for working capital.
Sec. 14236. Modifications of accuracy-related penalty.
Sec. 14237. Denial of portfolio interest exemption for contingent 
                            interest.
Sec. 14238. Regulations dealing with conduit arrangements.
               subpart a--energy tax based on btu content
Sec. 14241. Isubpart b--modifications to tax on diesel fuel
Sec. 14242. Modifications to tax on diesel fuel.
Ssubpart c--extension of motor fuel tax rates; increased deposits into 
                           highway trust fund
Sec. 14244. Extension of motor fuel tax rates; increased deposits into 
                            highway trust fund.
                     Part V--Compliance Provisions

Sec. 14251. Reporting required for certain payments to corporations.
Sec. 14252. Modifications to substantial understatement and return-
                            preparer penalties.
Sec. 14253. Returns relating to the cancellation of indebtedness by 
                            certain financial entities.
                   Part VI--Treatment of Intangibles

Sec. 14261. Amortization of goodwill and certain other intangibles.
Sec. 14262. Treatment of certain payments to retired or deceased 
                            partner.
                   Part VII--Miscellaneous Provisions

Sec. 14271. Substantiation requirement for deduction of certain 
                            charitable contributions.
Sec. 14272. Disclosure related to quid pro quo contributions.
Sec. 14273. Disallowance of interest on certain overpayments of tax.
Sec. 14274. Denial of deduction relating to travel expenses.
Sec. 14275. Increase in withholding from supplemental wage payments.
     Subtitle C--Empowerment Zones and Enterprise Communities, Etc.

          Part I--Empowerment Zones and Enterprise Communities

Sec. 14301. Designation and treatment of empowerment zones and 
                            enterprise communities.
Sec. 14302. Expansion of targeted jobs credit.
Sec. 14303. Technical and conforming amendments.
Sec. 14304. Effective date.
  Part II--Credit for Contributions to Certain Community Development 
                              Corporations

Sec. 14311. Credit for contributions to certain community development 
                            corporations.
                      Subtitle D--Other Provisions

                     Part I--Disclosure Provisions

Sec. 14401. Disclosure of return information for administration of 
                            certain veterans programs.
Sec. 14402. Disclosure of return information to carry out income 
                            contingent repayment of student loans.
Sec. 14403. Use of return information for income verification under 
                            certain housing assistance programs.
                      Part II--User Fee Provisions

Sec. 14411. Fees for applications for alcohol labeling and formula 
                            reviews.
Sec. 14412. Use of Harbor Maintenance Trust Fund amounts for 
                            administrative expenses.
Sec. 14413. Increase in tax on fuel used in commercial transportation 
                            on inland waterways.
                      Part III--Public Debt Limit

Sec. 14421. Increase in public debt limit.
                      Part IV--Vaccine Provisions

Sec. 14431. Excise tax on certain vaccines made permanent.
Sec. 14432. Continuation coverage under group health plans of costs of 
                            pediatric vaccines.
Sec. 14433. Childhood Immunization Trust Fund.

             Subtitle A--Training and Investment Incentives

         PART I--PROVISIONS RELATING TO EDUCATION AND TRAINING

SEC. 14101. EMPLOYER-PROVIDED EDUCATIONAL ASSISTANCE.

    (a) Permanent Extension of Exclusion.--
            (1) In general.--Section 127 (relating to educational 
        assistance programs) is amended by striking subsection (d) and 
        by redesignating subsection (e) as subsection (d).
            (2) Conforming amendment.--Paragraph (2) of section 103(a) 
        of the Tax Extension Act of 1991 is hereby repealed.
    (b) Coordination With Section 132.--Paragraph (8) of section 132(i) 
is amended to read as follows:
            ``(8) Application of section to otherwise taxable 
        educational or training benefits.--Amounts paid or expenses 
        incurred by the employer for education or training provided to 
        the employee which are not excludable from gross income under 
        section 127 shall be excluded from gross income under this 
        section if (and only if) such amounts or expenses are a working 
        condition fringe.''
    (c) Effective Dates.--
            (1) Subsection (a).--The amendments made by subsection (a) 
        shall apply to taxable years ending after June 30, 1992.
            (2) Subsection (b).--The amendment made by subsection (b) 
        shall apply to taxable years beginning after December 31, 1988.
    (d) Transition Rules.--
            (1) Waiver of interest and penalties.--No interest, 
        penalty, or addition to tax shall be imposed or required to be 
        paid solely by reason of a failure, before the date of the 
        enactment of this Act, to treat educational assistance in a 
        manner consistent with the provisions of section 103(a) of the 
        Tax Extension Act of 1991 (as in effect before the amendments 
        made by subsection (a)).
            (2) Special rules for 1992.--
                    (A) Employment taxes.--If--
                            (i) an employer provided an employee with 
                        educational assistance during the period 
                        beginning on July 1, 1992, and ending on 
                        December 31, 1992,
                            (ii) consistent with the provisions of 
                        section 103(a) of the Tax Extension Act of 1991 
                        (as so in effect), such employer treated such 
                        assistance as taxable for purposes of any 
                        employment tax and as a result of such 
                        treatment there was an increase in taxable 
                        wages for purposes of such tax,
                            (iii) on or after the date of the enactment 
                        of this Act and before January 1, 1994, such 
                        employer pays such employee amounts which are 
                        taxable wages for purposes of such tax and 
                        which equal or exceed the increase referred to 
                        in clause (ii), and
                            (iv) such employee did not treat such 
                        assistance for purposes of such employment tax 
                        (or for purposes of chapter 1 of the Internal 
                        Revenue Code of 1986 in the case of employment 
                        tax imposed by chapter 24 of such Code) in a 
                        manner inconsistent with the employer's 
                        treatment of such assistance,
                the amendments made by subsection (a) shall not apply 
                to such educational assistance for purposes of such 
                employment tax, but, for purposes of applying such 
                employment tax (and for purposes of the reporting 
                requirements imposed by chapter 61 of such Code), the 
                taxable wages of the employee referred to in clause 
                (iii) shall be reduced by the amount of the increase 
                referred to in clause (ii). For purposes of clause 
                (iv), an employer may assume that the employee treated 
                the assistance in a manner consistent with the 
                employer's treatment unless such employer has actual 
                knowledge to the contrary.
                    (B) Reporting requirement.--An employer shall 
                separately report the amounts of any reduction under 
                subparagraph (A) as nontaxable income on any returns or 
                receipts required under chapter 61 of such Code for 
                calendar year 1993.
                    (C) Definitions.--For purposes of this paragraph--
                            (i) Employment tax.--The term ``employment 
                        tax'' means any tax imposed by subtitle C of 
                        such Code.
                            (ii) Taxable wages.--The term ``taxable 
                        wages''means--
                                    (I) wages (as defined in section 
                                3121(a) of such Code) in the case of 
                                the taxes imposed by chapter 21 of such 
                                Code,
                                    (II) compensation (as defined in 
                                section 3231(e) of such Code) in the 
                                case of the taxes imposed by chapter 22 
                                of such Code,
                                    (III) wages (as defined in section 
                                3306(b) of such Code) in the case of 
                                the taxes imposed by chapter 23 of such 
                                Code, and
                                    (IV) wages (as defined in section 
                                3401(a) of such Code) in the case of 
                                the taxes imposed by chapter 24 of such 
                                Code.
            (3) Income tax treatment.--If--
                    (A) subparagraph (A) of paragraph (2) applies to 
                any educational assistance referred to in such 
                paragraph provided to any employee, and
                    (B) such employee included such assistance in his 
                taxable income for purposes of the tax imposed by 
                chapter 1 of such Code,
        the amendments made by subsection (a) shall not apply to such 
        assistance for purposes of such chapter 1, but the amount 
        included in the gross income of such employee by reason of 
        wages received from the employer referred to in subparagraph 
        (A) of paragraph (2) during 1993 shall be reduced in the manner 
        provided in such subparagraph (A).

SEC. 14102. TARGETED JOBS CREDIT.

    (a) Permanent Extension of Credit.--
            (1) In general.--Subsection (c) of section 51 (relating to 
        amount of targeted jobs credit) is amended by striking 
        paragraph (4).
            (2) Effective date.--The amendment made by paragraph (1) 
        shall apply to individuals who begin work for the employer 
        after June 30, 1992.
    (b) Credit for Participants in Approved School-To-Work Programs.--
            (1) In general.--Subparagraph (I) of section 51(d)(1) 
        (defining members of targeted group) is amended to read as 
        follows:
                                    ``(I) a qualified participant in an 
                                approved school-to-work program, or''.
            (2) Qualified participant in an approved school-to-work 
        program.--Paragraph (10) of section 51(d) is amended to read as 
        follows:
            ``(10) Qualified participant in an approved school-to-work 
        program defined.--
                    ``(A) In general.--Except as otherwise provided in 
                this paragraph, the term `qualified participant in an 
                approved school-to-work program' means any individual 
                who is certified under an approved school-to-work 
                program as--
                            ``(i) having attained age 16 but not having 
                        attained age 21, and
                            ``(ii) being enrolled in and making 
                        satisfactory progress in completing such 
                        approved school-to-work program.
                    ``(B) Limitation on number of participants.--
                            ``(i) In general.--Any individual who 
                        begins work for the employer during any 
                        calendar year shall not be treated as a 
                        qualified participant in an approved school-to-
                        work program unless the individual is certified 
                        under such program as an eligible participant 
                        with respect to such calendar year.
                            ``(ii) Limitation on certifications.--The 
                        aggregate number of individuals certified under 
                        an approved school-to-work program as eligible 
                        participants with respect to any calendar year 
                        shall not exceed the portion of the national 
                        school-to-work program limitation for such 
                        calendar year allocated under subsection (l) to 
                        such program.
                    ``(C) Approved school-to-work program.--The term 
                `approved school-to-work program' means any program 
                which--
                            ``(i) is a planned program of structured 
                        job training designed to integrate academic 
                        instruction provided by an educational 
                        institution and work-based learning provided by 
                        an employer, and
                            ``(ii) is approved by the Secretaries of 
                        Labor and Education.
                    ``(D) Limitation on amount of wages taken into 
                account.--For purposes of applying this subpart to 
                wages paid or incurred to any qualified participant in 
                an approved school-to-work program, subsection (b)(3) 
                shall be applied by substituting `$3,000' for `$6,000'.
                    ``(E) Wages.--In the case of remuneration 
                attributable to services performed while the individual 
                meets the requirements of subparagraph (A), wages, and 
                unemployment insurance wages, shall be determined 
                without regard to section 3306(c)(10)(C).''
            (3) Overall limitations.--Section 51 is amended by adding 
        at the end thereof the following new subsection:
    ``(l) Overall Limitation on Approved School-To-Work Program 
Participants.--
            ``(1) In general.--For purposes of subsection (d)(10), the 
        national school-to-work program limitation--
                    ``(A) for calendar year 1994 is 125,000,
                    ``(B) for calendar year 1995 is 140,000,
                    ``(C) for calendar year 1996 is 160,000,
                    ``(D) for calendar year 1997 is 180,000, and
                    ``(E) for calendar year 1998 and any subsequent 
                calendar year is 200,000.
            ``(2) Allocation to states.--The national school-to-work 
        program limitation for any calendar year shall be allocated 
        among the States in proportion to the number of their eligible 
        participants that are estimated to be served in approved 
        school-to-work programs for that year. Such estimates shall be 
        published by the Secretaries of Labor and Education before the 
        beginning of the calendar year to which the allocation applies.
            ``(3) Allocation to approved school-to-work programs.--The 
        portion of the national school-to-work program limitation for 
        any calendar year which is allocated to any State shall be 
        allocated among the approved school-to-work programs in such 
        State in such manner as the Secretaries of Labor and Education 
        shall prescribe.''
            (4) Effective date.--The amendments made by this subsection 
        shall apply in the case of individuals who begin work for the 
        employer after December 31, 1993.

                     PART II--INVESTMENT INCENTIVES

                       Subpart A--Research Credit

SEC. 14111. PERMANENT EXTENSION OF RESEARCH CREDIT.

    (a) In General.--Section 41 (relating to credit for increasing 
research activities) is amended by striking subsection (h).
    (b) Conforming Amendment.--Paragraph (1) of section 28(b) is 
amended by striking subparagraph (D).
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years ending after June 30, 1992.

SEC. 14112. MODIFICATION OF FIXED BASE PERCENTAGE FOR STARTUP 
              COMPANIES.

    (a) General Rule.--Clause (ii) of section 41(c)(3)(B) is amended to 
read as follows:
                            ``(ii) Fixed-base percentage.--In a case to 
                        which this subparagraph applies, the fixed-base 
                        percentage is--
                                    ``(I) 3 percent for each of the 
                                taxpayer's 1st 5 taxable years 
                                beginning after December 31, 1993, for 
                                which the taxpayer has qualified 
                                research expenses,
                                    ``(II) in the case of the 
                                taxpayer's 6th such taxable year, 1/6 
                                of the percentage which the aggregate 
                                qualified research expenses of the 
                                taxpayer for the 4th and 5th such 
                                taxable years is of the aggregate gross 
                                receipts of the taxpayer for such 
                                years,
                                    ``(III) in the case of the 
                                taxpayer's 7th such taxable year, 1/3 
                                of the percentage which the aggregate 
                                qualified research expenses of the 
                                taxpayer for the 5th and 6th such 
                                taxable years is of the aggregate gross 
                                receipts of the taxpayer for such 
                                years,
                                    ``(IV) in the case of the 
                                taxpayer's 8th such taxable year, 1/2 
                                of the percentage which the aggregate 
                                qualified research expenses of the 
                                taxpayer for the 5th, 6th, and 7th such 
                                taxable years is of the aggregate gross 
                                receipts of the taxpayer for such 
                                years,
                                    ``(V) in the case of the taxpayer's 
                                9th such taxable year, 2/3 of the 
                                percentage which the aggregate 
                                qualified research expenses of the 
                                taxpayer for the 5th, 6th, 7th, and 8th 
                                such taxable years is of the aggregate 
                                gross receipts of the taxpayer for such 
                                years,
                                    ``(VI) in the case of the 
                                taxpayer's 10th such taxable year, 5/6 
                                of the percentage which the aggregate 
                                qualified research expenses of the 
                                taxpayer for the 5th, 6th, 7th, 8th, 
                                and 9th such taxable years is of the 
                                aggregate gross receipts of the 
                                taxpayer for such years, and
                                    ``(VII) for taxable years 
                                thereafter, the percentage which the 
                                aggregate qualified research expenses 
                                for any 5 taxable years selected by the 
                                taxpayer from among the 5th through the 
                                10th such taxable years is of the 
                                aggregate gross receipts of the 
                                taxpayer for such selected years.''
    (b) Conforming Amendments.--
            (1) Clause (iii) of section 41(c)(3)(B) is amended by 
        striking ``clause (i)'' and inserting ``clauses (i) and (ii)''.
            (2) Subparagraph (D) of section 41(c)(3) is amended by 
        striking ``subparagraph (A)'' and inserting ``subparagraphs (A) 
        and (B)(ii)''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1993.

                   Subpart B--Capital Gain Provisions

SEC. 14113. 50-PERCENT EXCLUSION FOR GAIN FROM CERTAIN SMALL BUSINESS 
              STOCK.

    (a) General Rule.--Part I of subchapter P of chapter 1 (relating to 
capital gains and losses) is amended by adding at the end thereof the 
following new section:

``SEC. 1202. 50-PERCENT EXCLUSION FOR GAIN FROM CERTAIN SMALL BUSINESS 
              STOCK.

    ``(a) 50-Percent Exclusion.--In the case of a taxpayer other than a 
corporation, gross income shall not include 50 percent of any gain from 
the sale or exchange of qualified small business stock held for more 
than 5 years.
    ``(b) Per-Issuer Limitation on Taxpayer's Eligible Gain.--
            ``(1) In general.--If the taxpayer has eligible gain for 
        the taxable year from 1 or more dispositions of stock issued by 
        any corporation, the aggregate amount of such gain from 
        dispositions of stock issued by such corporation which may be 
        taken into account under subsection (a) for the taxable year 
        shall not exceed the greater of--
                    ``(A) $10,000,000 reduced by the aggregate amount 
                of eligible gain taken into account under subsection 
                (a) for prior taxable years and attributable to 
                dispositions of stock issued by such corporation, or
                    ``(B) 10 times the aggregate adjusted bases of 
                qualified small business stock issued by such 
                corporation and disposed of by the taxpayer during the 
                taxable year.
        For purposes of subparagraph (B), the adjusted basis of any 
        stock shall be determined without regard to any addition to 
        basis after the date on which such stock was originally issued.
            ``(2) Eligible gain.--For purposes of this subsection, the 
        term `eligible gain' means any gain from the sale or exchange 
        of qualified small business stock held for more than 5 years.
            ``(3) Treatment of married individuals.--
                    ``(A) Separate returns.--In the case of a separate 
                return by a married individual, paragraph (1)(A) shall 
                be applied by substituting `$5,000,000' for 
                `$10,000,000'.
                    ``(B) Allocation of exclusion.--In the case of any 
                joint return, the amount of gain taken into account 
                under subsection (a) shall be allocated equally between 
                the spouses for purposes of applying this subsection to 
                subsequent taxable years.
                    ``(C) Marital status.--For purposes of this 
                subsection, marital status shall be determined under 
                section 7703.
    ``(c) Qualified Small Business Stock.--For purposes of this 
section--
            ``(1) In general.--Except as otherwise provided in this 
        section, the term `qualified small business stock' means any 
        stock in a C corporation which is originally issued after 
        December 31, 1992, if--
                    ``(A) as of the date of issuance, such corporation 
                is a qualified small business, and
                    ``(B) except as provided in subsections (f) and 
                (h), such stock is acquired by the taxpayer at its 
                original issue (directly or through an underwriter)--
                            ``(i) in exchange for money or other 
                        property (not including stock), or
                            ``(ii) as compensation for services 
                        provided to such corporation (other than 
                        services performed as an underwriter of such 
                        stock).
            ``(2) Active business requirement; etc.--
                    ``(A) In general.--Stock in a corporation shall not 
                be treated as qualified small business stock unless, 
                during substantially all of the taxpayer's holding 
                period for such stock, such corporation meets the 
                active business requirements of subsection (e) and such 
                corporation is a C corporation.
                    ``(B) Special rule for certain small business 
                investment companies.--
                            ``(i) Waiver of active business 
                        requirement.--Notwithstanding any provision of 
                        subsection (e), a corporation shall be treated 
                        as meeting the active business requirements of 
                        such subsection for any period during which 
                        such corporation qualifies as a specialized 
                        small business investment company.
                            ``(ii) Specialized small business 
                        investment company.--For purposes of clause 
                        (i), the term `specialized small business 
                        investment company' means any eligible 
                        corporation (as defined in subsection (e)(4)) 
                        which is licensed to operate under section 
                        301(d) of the Small Business Investment Act of 
                        1958 (as in effect on May 13, 1993).
            ``(3) Certain purchases by corporation of its own stock.--
                    ``(A) Redemptions from taxpayer or related 
                person.--Stock acquired by the taxpayer shall not be 
                treated as qualified small business stock if, at any 
                time during the 4-year period beginning on the date 2 
                years before the issuance of such stock, the 
                corporation issuing such stock purchased (directly or 
                indirectly) any of its stock from the taxpayer or from 
                a person related (within the meaning of section 267(b) 
                or 707(b)) to the taxpayer.
                    ``(B) Significant redemptions.--Stock issued by a 
                corporation shall not be treated as qualified business 
                stock if, during the 2-year period beginning on the 
                date 1 year before the issuance of such stock, such 
                corporation made 1 or more purchases of its stock with 
                an aggregate value (as of the time of the respective 
                purchases) exceeding 5 percent of the aggregate value 
                of all of its stock as of the beginning of such 2-year 
                period.
                    ``(C) Acquisitions by related persons.--For 
                purposes of this paragraph, the purchase by any person 
                related (within the meaning of section 267(b) or 
                707(b)) to the issuing corporation of any stock in the 
                issuing corporation shall be treated as a purchase by 
                the issuing corporation.
    ``(d) Qualified Small Business.--For purposes of this section--
            ``(1) In general.--The term `qualified small business' 
        means any domestic corporation which is a C corporation if--
                    ``(A) the aggregate capitalization of such 
                corporation (or any predecessor thereof) at all times 
                on or after January 1, 1993, and before the issuance 
                did not exceed $50,000,000,
                    ``(B) the aggregate capitalization of such 
                corporation immediately after the issuance (determined 
                by taking into account amounts received in the 
                issuance) does not exceed $50,000,000, and
                    ``(C) such corporation agrees to submit such 
                reports to the Secretary and to shareholders as the 
                Secretary may require to carry out the purposes of this 
                section.
            ``(2) Aggregate capitalization.--For purposes of paragraph 
        (1), the term `aggregate capitalization' means the excess of--
                    ``(A) the amount of cash and the aggregate adjusted 
                bases of other property held by the corporation, over
                    ``(B) the aggregate amount of the short-term 
                indebtedness of the corporation.
        For purposes of the preceding sentence, the term `short-term 
        indebtedness' means any indebtedness which, when incurred, did 
        not have a term in excess of 1 year.
            ``(3) Look-thru in case of subsidiaries.--In determining 
        whether a corporation meets the requirements of this 
        subsection--
                    ``(A) stock and debt of any subsidiary (as defined 
                in subsection (e)(5)(C)) held by such corporation shall 
                be disregarded, and
                    ``(B) such corporation shall be treated as holding 
                its ratable share of the assets of such subsidiary and 
                as being liable for its ratable share of the 
                indebtedness of such subsidiary.
    ``(e) Active Business Requirement.--
            ``(1) In general.--For purposes of subsection (c)(2), the 
        requirements of this subsection are met by a corporation for 
        any period if during such period--
                    ``(A) at least 80 percent (by value) of the assets 
                of such corporation are used by such corporation in the 
                active conduct of a qualified trade or business, and
                    ``(B) such corporation is an eligible corporation.
            ``(2) Special rule for certain activities.--For purposes of 
        paragraph (1), if, in connection with any future qualified 
        trade or business, a corporation is engaged in--
                    ``(A) start-up activities described in section 
                195(c)(1)(A),
                    ``(B) activities resulting in the payment or 
                incurring of expenditures which may be treated as 
                research and experimental expenditures under section 
                174, or
                    ``(C) activities with respect to in-house research 
                expenses described in section 41(b)(4),
        assets used in such activities shall be treated as used in the 
        active conduct of a qualified trade or business. Any 
        determination under this paragraph shall be made without regard 
        to whether a corporation has any gross income from such 
        activities at the time of the determination.
            ``(3) Qualified trade or business.--For purposes of this 
        subsection, the term `qualified trade or business' means any 
        trade or business other than--
                    ``(A) any trade or business involving the 
                performance of services in the fields of health, law, 
                engineering, architecture, accounting, actuarial 
                science, performing arts, consulting, athletics, 
                financial services, brokerage services, or any other 
                trade or business where the principal asset of such 
                trade or business is the reputation or skill of 1 or 
                more of its employees,
                    ``(B) any banking, insurance, financing, leasing, 
                investing, or similar business,
                    ``(C) any farming business (including the business 
                of raising or harvesting trees),
                    ``(D) any business involving the production or 
                extraction of products of a character with respect to 
                which a deduction is allowable under section 613 or 
                613A, and
                    ``(E) any business of operating a hotel, motel, 
                restaurant, or similar business.
            ``(4) Eligible corporation.--For purposes of this 
        subsection, the term `eligible corporation' means any domestic 
        corporation; except that such term shall not include--
                    ``(A) a DISC or former DISC,
                    ``(B) a corporation with respect to which an 
                election under section 936 is in effect,
                    ``(C) a regulated investment company, real estate 
                investment trust, or REMIC, and
                    ``(D) a cooperative.
            ``(5) Stock in other corporations.--
                    ``(A) Look-thru in case of subsidiaries.--For 
                purposes of this subsection, stock and debt in any 
                subsidiary corporation shall be disregarded and the 
                parent corporation shall be deemed to own its ratable 
                share of the subsidiary's assets, and to conduct its 
                ratable share of the subsidiary's activities.
                    ``(B) Portfolio stock or securities.--A corporation 
                shall be treated as failing to meet the requirements of 
                paragraph (1) for any period during which more than 10 
                percent of the value of its assets (in excess of 
                liabilities) consists of stock or securities in other 
                corporations which are not subsidiaries of such 
                corporation (other than assets described in paragraph 
                (6)).
                    ``(C) Subsidiary.--For purposes of this paragraph, 
                a corporation shall be considered a subsidiary if the 
                parent owns more than 50 percent of the combined voting 
                power of all classes of stock entitled to vote, or more 
                than 50 percent in value of all outstanding stock, of 
                such corporation.
            ``(6) Working capital.--For purposes of paragraph (1)(A), 
        any assets which--
                    ``(A) are held as a part of the reasonably required 
                working capital needs of a qualified trade or business 
                of the corporation, or
                    ``(B) are held for investment and are reasonably 
                expected to be used within 2 years to finance future 
                research and experimentation in a qualified trade or 
                business or increases in working capital needs of a 
                qualified trade or business,
        shall be treated as used in the active conduct of a qualified 
        trade or business. For periods after the corporation has been 
        in existence for at least 2 years, in no event may more than 50 
        percent of the assets of the corporation qualify as used in the 
        active conduct of a qualified trade or business by reason of 
        this paragraph.
            ``(7) Maximum real estate holdings.--A corporation shall 
        not be treated as meeting the requirements of paragraph (1) for 
        any period during which more than 10 percent of the total value 
        of its assets consists of real property which is not used in 
        the active conduct of a qualified trade or business. For 
        purposes of the preceding sentence, the ownership of, dealing 
        in, or renting of real property shall not be treated as the 
        active conduct of a qualified trade or business.
            ``(8) Computer software royalties.--For purposes of 
        paragraph (1), rights to computer software which produces 
        active business computer software royalties (within the meaning 
        of section 543(d)(1)) shall be treated as an asset used in the 
        active conduct of a trade or business.
    ``(f) Stock Acquired on Conversion of Preferred Stock.--If any 
stock in a corporation is acquired solely through the conversion of 
other stock in such corporation which is qualified small business stock 
in the hands of the taxpayer--
            ``(1) the stock so acquired shall be treated as qualified 
        small business stock in the hands of the taxpayer, and
            ``(2) the stock so acquired shall be treated as having been 
        held during the period during which the converted stock was 
        held.
    ``(g) Treatment of Pass-Thru Entities.--
            ``(1) In general.--If any amount included in gross income 
        by reason of holding an interest in a pass-thru entity meets 
        the requirements of paragraph (2)--
                    ``(A) such amount shall be treated as gain 
                described in subsection (a), and
                    ``(B) for purposes of applying subsection (b), such 
                amount shall be treated as gain from a disposition of 
                stock in the corporation issuing the stock disposed of 
                by the pass-thru entity and the taxpayer's 
                proportionate share of the adjusted basis of the pass-
                thru entity in such stock shall be taken into account.
            ``(2) Requirements.--An amount meets the requirements of 
        this paragraph if--
                    ``(A) such amount is attributable to gain on the 
                sale or exchange by the pass-thru entity of stock which 
                is qualified small business stock in the hands of such 
                entity (determined by treating such entity as an 
                individual) and which was held by such entity for more 
                than 5 years, and
                    ``(B) such amount is includible in the gross income 
                of the taxpayer by reason of the holding of an interest 
                in such entity which was held by the taxpayer on the 
                date on which such pass-thru entity acquired such stock 
                and at all times thereafter before the disposition of 
                such stock by such pass-thru entity.
            ``(3) Limitation based on interest originally held by 
        taxpayer.--Paragraph (1) shall not apply to any amount to the 
        extent such amount exceeds the amount to which paragraph (1) 
        would have applied if such amount were determined by reference 
        to the interest the taxpayer held in the pass-thru entity on 
        the date the qualified small business stock was acquired.
            ``(4) Pass-thru entity.--For purposes of this subsection, 
        the term `pass-thru entity' means--
                    ``(A) any partnership,
                    ``(B) any S corporation,
                    ``(C) any regulated investment company, and
                    ``(D) any common trust fund.
    ``(h) Certain Tax-Free and Other Transfers.--For purposes of this 
section--
            ``(1) In general.--In the case of a transfer described in 
        paragraph (2), the transferee shall be treated as--
                    ``(A) having acquired such stock in the same manner 
                as the transferor, and
                    ``(B) having held such stock during any continuous 
                period immediately preceding the transfer during which 
                it was held (or treated as held under this subsection) 
                by the transferor.
            ``(2) Description of transfers.--A transfer is described in 
        this subsection if such transfer is--
                    ``(A) by gift,
                    ``(B) at death, or
                    ``(C) from a partnership to a partner of stock with 
                respect to which requirements similar to the 
                requirements of subsection (g) are met at the time of 
                the transfer (without regard to the 5-year holding 
                period requirement).
            ``(3) Certain rules made applicable.--Rules similar to the 
        rules of section 1244(d)(2) shall apply for purposes of this 
        section.
            ``(4) Incorporations and reorganizations involving 
        nonqualified stock.--
                    ``(A) In general.--In the case of a transaction 
                described in section 351 or a reorganization described 
                in section 368, if qualified small business stock is 
                exchanged for other stock which would not qualify as 
                qualified small business stock but for this 
                subparagraph, such other stock shall be treated as 
                qualified small business stock acquired on the date on 
                which the exchanged stock was acquired.
                    ``(B) Limitation.--This section shall apply to gain 
                from the sale or exchange of stock treated as qualified 
                small business stock by reason of subparagraph (A) only 
                to the extent of the gain which would have been 
                recognized at the time of the transfer described in 
                subparagraph (A) if section 351 or 368 had not applied 
                at such time.
                    ``(C) Successive application.--For purposes of this 
                paragraph, stock treated as qualified small business 
                stock under subparagraph (A) shall be so treated for 
                subsequent transactions or reorganizations, except that 
                the limitation of subparagraph (B) shall be applied as 
                of the time of the first transfer to which subparagraph 
                (A) applied.
                    ``(D) Control test.--Except in the case of a 
                transaction described in section 368, this paragraph 
                shall apply only if, immediately after the transaction, 
                the corporation issuing the stock owns directly or 
                indirectly stock representing control (within the 
                meaning of section 368(c)) of the corporation whose 
                stock was exchanged.
    ``(i) Basis Rules.--For purposes of this section--
            ``(1) Stock exchanged for property.--In the case where the 
        taxpayer transfers property (other than money or stock) to a 
        corporation in exchange for stock in such corporation--
                    ``(A) such stock shall be treated as having been 
                acquired by the taxpayer on the date of such exchange, 
                and
                    ``(B) the basis of such stock in the hands of the 
                taxpayer shall in no event be less than the fair market 
                value of the property exchanged.
            ``(2) Treatment of contributions to capital.--If the 
        adjusted basis of any qualified small business stock is 
        adjusted by reason of any contribution to capital after the 
        date on which such stock was originally issued, in determining 
        the amount of the adjustment by reason of such contribution, 
        the basis of the contributed property shall in no event be 
        treated as less than its fair market value on the date of the 
        contribution.
    ``(j) Treatment of Certain Short Positions.--
            ``(1) In general.--If the taxpayer has an offsetting short 
        position with respect to any qualified small business stock, 
        subsection (a) shall not apply to any gain from the sale or 
        exchange of such stock unless--
                    ``(A) such stock was held by the taxpayer for more 
                than 5 years as of the first day on which there was 
                such a short position, and
                    ``(B) the taxpayer elects to recognize gain as if 
                such stock were sold on such first day for its fair 
                market value.
            ``(2) Offsetting short position.--For purposes of paragraph 
        (1), the taxpayer shall be treated as having an offsetting 
        short position with respect to any qualified small business 
        stock if--
                    ``(A) the taxpayer has made a short sale of 
                substantially identical property,
                    ``(B) the taxpayer has acquired an option to sell 
                substantially identical property at a fixed price, or
                    ``(C) to the extent provided in regulations, the 
                taxpayer has entered into any other transaction which 
                substantially reduces the risk of loss from holding 
                such qualified small business stock.
        For purposes of the preceding sentence, any reference to the 
        taxpayer shall be treated as including a reference to any 
        person who is related (within the meaning of section 267(b) or 
        707(b)) to the taxpayer.
    ``(k) Regulations.--The Secretary shall prescribe such regulations 
as may be appropriate to carry out the purposes of this section, 
including regulations to prevent the avoidance of the purposes of this 
section through split-ups, shell corporations, partnerships, or 
otherwise.''
    (b) One-Half of Exclusion Treated as Preference for Minimum Tax.--
            (1) In general.--Subsection (a) of section 57 (relating to 
        items of tax preference) is amended by adding at the end 
        thereof the following new paragraph:
            ``(8) Exclusion for gains on sale of certain small business 
        stock.--An amount equal to one-half of the amount excluded from 
        gross income for the taxable year under section 1202.''
            (2) Conforming amendment.--Subclause (II) of section 
        53(d)(1)(B)(ii) is amended by striking ``and (6)'' and 
        inserting ``(6), and (8)''.
    (c) Penalty for Failure To Comply With Reporting Requirements.--
Section 6652 is amended by inserting before the last subsection thereof 
the following new subsection:
    ``(k) Failure To Make Reports Required Under Section 1202.--In the 
case of a failure to make a report required under section 1202(d)(1)(C) 
which contains the information required by such section on the date 
prescribed therefor (determined with regard to any extension of time 
for filing), there shall be paid (on notice and demand by the Secretary 
and in the same manner as tax) by the person failing to make such 
report, an amount equal to $50 for each report with respect to which 
there was such a failure. In the case of any failure due to negligence 
or intentional disregard, the preceding sentence shall be applied by 
substituting `$100' for `$50'. In the case of a report covering periods 
in 2 or more years, the penalty determined under preceding provisions 
of this subsection shall be multiplied by the number of such years.''
    (d) Conforming Amendments.--
            (1)(A) Section 172(d)(2) (relating to modifications with 
        respect to net operating loss deduction) is amended to read as 
        follows:
            ``(2) Capital gains and losses of taxpayers other than 
        corporations.--In the case of a taxpayer other than a 
        corporation--
                    ``(A) the amount deductible on account of losses 
                from sales or exchanges of capital assets shall not 
                exceed the amount includable on account of gains from 
                sales or exchanges of capital assets; and
                    ``(B) the exclusion provided by section 1202 shall 
                not be allowed.''
            (B) Subparagraph (B) of section 172(d)(4) is amended by 
        inserting ``, (2)(B),'' after ``paragraph (1)''.
            (2) Paragraph (4) of section 642(c) is amended to read as 
        follows:
            ``(4) Adjustments.--To the extent that the amount otherwise 
        allowable as a deduction under this subsection consists of gain 
        described in section 1202(a), proper adjustment shall be made 
        for any exclusion allowable to the estate or trust under 
        section 1202. In the case of a trust, the deduction allowed by 
        this subsection shall be subject to section 681 (relating to 
        unrelated business income).''
            (3) Paragraph (3) of section 643(a) is amended by adding at 
        the end thereof the following new sentence: ``The exclusion 
        under section 1202 shall not be taken into account.''
            (4) Paragraph (4) of section 691(c) is amended by striking 
        ``1201, and 1211'' and inserting ``1201, 1202, and 1211''.
            (5) The second sentence of paragraph (2) of section 871(a) 
        is amended by inserting ``such gains and losses shall be 
        determined without regard to section 1202 and'' after ``except 
        that''.
            (6) The table of sections for part I of subchapter P of 
        chapter 1 is amended by adding after the item relating to 
        section 1201 the following new item:

                              ``Sec. 1202. 50-percent exclusion for 
                                        gain from certain small 
                                        business stock.''
    (e) Effective Date.--The amendments made by this section shall 
apply to stock issued after December 31, 1992.

SEC. 14114. ROLLOVER OF GAIN FROM SALE OF PUBLICLY TRADED SECURITIES 
              INTO SPECIALIZED SMALL BUSINESS INVESTMENT COMPANIES.

    (a) In General.--Part III of subchapter O of chapter 1 (relating to 
common nontaxable exchanges) is amended by adding at the end the 
following new section:

``SEC. 1044. ROLLOVER OF PUBLICLY TRADED SECURITIES GAIN INTO 
              SPECIALIZED SMALL BUSINESS INVESTMENT COMPANIES.

    ``(a) Nonrecognition of Gain.--In the case of the sale of any 
publicly traded securities with respect to which the taxpayer elects 
the application of this section, gain from such sale shall be 
recognized only to the extent that the amount realized on such sale 
exceeds--
            ``(1) the cost of any common stock or partnership interest 
        in a specialized small business investment company purchased by 
        the taxpayer during the 60-day period beginning on the date of 
        such sale, reduced by
            ``(2) any portion of such cost previously taken into 
        account under this section.
This section shall not apply to any gain which is treated as ordinary 
income for purposes of this subtitle.
    ``(b) Limitations.--
            ``(1) Limitation on individuals.--In the case of an 
        individual, the amount of gain which may be excluded under 
        subsection (a) for any taxable year shall not exceed the lesser 
        of--
                    ``(A) $50,000, or
                    ``(B) $500,000, reduced by the amount of gain 
                excluded under subsection (a) for all preceding taxable 
                years.
            ``(2) Limitation on c corporations.--In the case of a C 
        corporation, the amount of gain which may be excluded under 
        subsection (a) for any taxable year shall not exceed the lesser 
        of--
                    ``(A) $250,000, or
                    ``(B) $1,000,000, reduced by the amount of gain 
                excluded under subsection (a) for all preceding taxable 
                years.
            ``(3) Special rules for married individuals.--For purposes 
        of this subsection--
                    ``(A) Separate returns.--In the case of a separate 
                return by a married individual, paragraph (1) shall be 
                applied by substituting `$25,000' for `$50,000' and 
                `$250,000' for `$500,000'.
                    ``(B) Allocation of gain.--In the case of any joint 
                return, the amount of gain excluded under subsection 
                (a) for any taxable year shall be allocated equally 
                between the spouses for purposes of applying this 
                subsection to subsequent taxable years.
                    ``(C) Marital status.--For purposes of this 
                subsection, marital status shall be determined under 
                section 7703.
            ``(4) Special rules for c corporation.--For purposes of 
        this subsection--
                    ``(A) all corporations which are members of the 
                same controlled group of corporations (within the 
                meaning of section 52(a)) shall be treated as 1 
                taxpayer, and
                    ``(B) any gain excluded under subsection (a) by a 
                predecessor of any C corporation shall be treated as 
                having been excluded by such C corporation.
    ``(c) Definitions and Special Rules.--For purposes of this 
section--
            ``(1) Publicly traded securities.--The term `publicly 
        traded securities' means securities which are traded on an 
        established securities market.
            ``(2) Purchase.--The term `purchase' has the meaning given 
        such term by section 1043(b)(4).
            ``(3) Specialized small business investment company.--The 
        term `specialized small business investment company' means any 
        partnership or corporation which is licensed by the Small 
        Business Administration under section 301(d) of the Small 
        Business Investment Act of 1958 (as in effect on May 13, 1993).
            ``(4) Certain entities not eligible.--This section shall 
        not apply to any estate, trust, partnership, or S corporation.
    ``(d) Basis Adjustments.--If gain from any sale is not recognized 
by reason of subsection (a), such gain shall be applied to reduce (in 
the order acquired) the basis for determining gain or loss of any 
common stock or partnership interest in any specialized small business 
investment company which is purchased by the taxpayer during the 60-day 
period described in subsection (a). This subsection shall not apply for 
purposes of section 1202.''
    (b) Conforming Amendment.--Paragraph (24) of section 1016(a) is 
amended--
            (1) by striking ``section 1043'' and inserting ``section 
        1043 or 1044'', and
            (2) by striking ``section 1043(c)'' and inserting ``section 
        1043(c) or 1044(d), as the case may be''.
    (c) Clerical Amendment.--The table of sections for part III of 
subchapter O of chapter 1 is amended by adding at the end the following 
new item:

                              ``Sec. 1044. Rollover of publicly traded 
                                        securities gain into 
                                        specialized small business 
                                        investment companies.''
    (d) Effective Date.--The amendments made by this section shall 
apply to sales on and after the date of the enactment of this Act, in 
taxable years ending on and after such date.

       Subpart C--Modifications To Minimum Tax Depreciation Rules

SEC. 14115. MODIFICATION TO MINIMUM TAX DEPRECIATION RULES.

    (a) General Rule.--Paragraph (1) of section 56(a) (relating to 
depreciation) is amended by redesignating subparagraphs (B), (C), and 
(D) as subparagraphs (C), (D), and (E), respectively, and by inserting 
after subparagraph (A) the following new subparagraph:
                    ``(B) Treatment of certain personal property placed 
                in service after 1993.--
                            ``(i) In general.--In the case of any 
                        property to which this subparagraph applies, 
                        the depreciation deduction allowable under 
                        section 167 shall be determined as provided in 
                        section 168(a), except that the method of 
                        depreciation used shall be--
                                    ``(I) the 120 percent declining 
                                balance method switching to the 
                                straight line method for the 1st 
                                taxable year for which using the 
                                straight line method with respect to 
                                the adjusted basis as of the beginning 
                                of the year will yield a higher 
                                allowance, or
                                    ``(II) the straight line method in 
                                the case of property for which the 
                                applicable depreciation method under 
                                section 168(a) is the straight line 
                                method.
                            ``(ii) Property to which subparagraph 
                        applies.--This subparagraph shall apply to any 
                        tangible property placed in service after 
                        December 31, 1993, except that this 
                        subparagraph shall not apply to--
                                    ``(I) any residential rental 
                                property or nonresidential real 
                                property (within the meaning of section 
                                168(e)), and
                                    ``(II) any other property for which 
                                the depreciation deduction provided by 
                                section 167(a) for purposes of the 
                                regular tax is computed under the 
                                alternative depreciation system of 
                                section 168(g).
                            ``(iii) Coordination with subparagraph 
                        (a).--Subparagraph (A) shall not apply to any 
                        property to which this subparagraph applies.''
    (b) Elimination of ACE Depreciation Adjustment.--Clause (i) of 
section 56(g)(4)(A) (relating to depreciation adjustments for computing 
adjusted current earnings) is amended by adding at the end thereof the 
following new sentence: ``The preceding sentence shall not apply to any 
property to which subsection (a)(1)(B) applies, and the depreciation 
deduction with respect to such property shall be determined under the 
rules of subsection (a)(1)(B).''.
    (c) Conforming Amendments.--
            (1) Paragraph (2) of section 168(b) is amended to read as 
        follows:
            ``(2) Special rule for declining balance method in certain 
        cases.--
                    ``(A) 150 percent method for certain property.--
                Paragraph (1) shall be applied by substituting `150 
                percent' for `200 percent' in the case of--
                            ``(i) any 15-year or 20-year property, or
                            ``(ii) any property used in a farming 
                        business (within the meaning of section 
                        263A(e)(4)).
                    ``(B) Election to use minimum tax method.--In the 
                case of any property (other than property described in 
                paragraph (3)) with respect to which the taxpayer 
                elects under paragraph (5) to have the provisions of 
                this subparagraph apply, paragraph (1) shall be applied 
                by substituting `120 percent' for `200 percent' (and 
                subparagraph (A) of this paragraph shall not apply).''
            (2) Paragraph (5) of section 168(b) is amended by striking 
        ``paragraph (2)(C)'' and inserting ``paragraph (2)(B)''.
            (3) Subsection (c) of section 168 is amended--
                    (A) by striking paragraph (2), and
                    (B) by striking so much of such subsection as 
                precedes the table contained in paragraph (1) and 
                inserting the following:
    ``(c) Applicable Recovery Period.--For purposes of this section, 
the applicable recovery period shall be determined in accordance with 
the following table:''.
    (d) Effective Dates.--
            (1) In general.--Except as provided in paragraph (2), the 
        amendments made by this section shall apply to property placed 
        in service after December 31, 1993.
            (2) Coordination with transitional rules.--The amendments 
        made by this section shall not apply to any property to which 
        paragraph (1) of section 56(a) of the Internal Revenue Code of 
        1986 does not apply by reason of subparagraph (D)(i) thereof 
        (as redesignated by subsection (a) of this section).

     Subpart D--Increase in Expense Treatment for Small Businesses

SEC. 14116. INCREASE IN EXPENSE TREATMENT FOR SMALL BUSINESSES.

    (a) General Rule.--Paragraph (1) of section 179(b) (relating to 
dollar limitation) is amended by striking ``$10,000'' and inserting 
``$25,000''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to taxable years beginning after December 31, 1992.

                  PART III--TAX-EXEMPT BOND PROVISIONS

SEC. 14121. HIGH-SPEED INTERCITY RAIL FACILITY BONDS EXEMPT FROM STATE 
              VOLUME CAP.

    (a) In General.--Paragraph (4) of section 146(g) (relating to 
exemption for certain bonds) is amended by striking ``75 percent of''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to bonds issued after December 31, 1993.

SEC. 14122. PERMANENT EXTENSION OF QUALIFIED SMALL ISSUE BONDS.

    (a) In general.--Subparagraph (B) of section 144(a)(12) is amended 
to read as follows:
                            ``(B) Bonds issued to finance manufacturing 
                        facilities and farm property.--Subparagraph (A) 
                        shall not apply to any bond issued as part of 
                        an issue 95 percent or more of the net proceeds 
                        of which are to be used to provide--
                            ``(i) any manufacturing facility, or
                            ``(ii) any land or property in accordance 
                        with section 147(c)(2).''
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to bonds issued after June 30, 1992.

   PART IV--EXPANSION AND SIMPLIFICATION OF EARNED INCOME TAX CREDIT

SEC. 14131. EXPANSION AND SIMPLIFICATION OF EARNED INCOME TAX CREDIT.

    (a) General Rule.--Section 32 (relating to earned income credit) is 
amended by striking subsections (a) and (b) and inserting the 
following:
    ``(a) Allowance of Credit.--
            ``(1) In general.--In the case of an eligible individual, 
        there shall be allowed as a credit against the tax imposed by 
        this subtitle for the taxable year an amount equal to the 
        credit percentage of so much of the taxpayer's earned income 
        for the taxable year as does not exceed the earned income 
        amount.
            ``(2) Limitation.--The amount of the credit allowable to a 
        taxpayer under paragraph (1) for any taxable year shall not 
        exceed the excess (if any) of--
                    ``(A) the credit percentage of the earned income 
                amount, over
                    ``(B) the phaseout percentage of so much of the 
                adjusted gross income (or, if greater, the earned 
                income) of the taxpayer for the taxable year as exceeds 
                the phaseout amount.
    ``(b) Percentages and Amounts.--For purposes of subsection (a)--
            ``(1) Percentages.--The credit percentage and the phaseout 
        percentage shall be determined as follows:
                    ``(A) In general.--In the case of taxable years 
                beginning after 1994:

      

                                                                                                                
                 In the case of an eligible                                                                     
                      individual with:            The credit percentage is:        The phaseout percentage is:  
                                                                                                                
                1 qualifying child..........  34.37...........................                16.16             
                2 or more qualifying                                                                            
                 children...................  39.66...........................                19.83             
                No qualifying children......  7.65............................                7.65              
                                                                                                                

                    ``(B) Transitional percentages.--In the case of a 
                taxable year beginning in 1994:

      

                                                                                                                
                        In the case of an                                                                       
                       eligible individual        The credit percentage is:        The phaseout percentage is:  
                              with:                                                                             
                                                                                                                
                    1 qualifying child......  26.60...........................                16.16             
                    2 or more qualifying                                                                        
                     children...............  31.59...........................                15.79             
                    No qualifying children..  7.65............................                7.65              
                                                                                                                

            ``(2) Amounts.--The earned income amount and the phaseout 
        amount shall be determined as follows:
                    ``(A) In general.--In the case of taxable years 
                beginning after 1994:

      

                                                                                                                
                 In the case of an eligible                                                                     
                      individual with:          The earned income amount is:         The phaseout amount is:    
                                                                                                                
                1 qualifying child..........  $6,000..........................               $11,000            
                2 or more qualifying                                                                            
                 children...................  $8,500..........................               $11,000            
                No qualifying children......  $4,000..........................               $5,000             
                                                                                                                

                    ``(B) Transitional amounts.--In the case of a 
                taxable year beginning in 1994:

      

                                                                                                                
                        In the case of an                                                                       
                       eligible individual      The earned income amount is:         The phaseout amount is:    
                              with:                                                                             
                                                                                                                
                    1 qualifying child......  $7,750..........................              $11,000           
                    2 or more qualifying                                                                        
                     children...............  $8,500..........................              $11,000           
                    No qualifying children..  $4,000..........................              $5,000''.           
                                                                                                                

    (b) Eligible Individual.--Subparagraph (A) of section 32(c)(1) 
(defining eligible individual) is amended to read as follows:
                    ``(A) In general.--The term `eligible individual' 
                means--
                            ``(i) any individual who has a qualifying 
                        child for the taxable year, or
                            ``(ii) any other individual who does not 
                        have a qualifying child for the taxable year, 
                        if--
                                    ``(I) such individual's principal 
                                place of abode is in the United States 
                                for more than one-half of such taxable 
                                year,
                                    ``(II) such individual (or, if the 
                                individual is married, the individual's 
                                spouse) has attained age 22 before the 
                                close of the taxable year, and
                                    ``(III) such individual (or, if the 
                                individual is married, the individual's 
                                spouse) is not a dependent for whom a 
                                deduction is allowable under section 
                                151 to another taxpayer for any taxable 
                                year beginning in the same calendar 
                                year as such taxable year.''
    (c) Inflation Adjustments.--Section 32(i) (relating to inflation 
adjustments) is amended--
            (1) by striking paragraphs (1) and (2) and inserting the 
        following new paragraph:
            ``(1) In general.--In the case of any taxable year 
        beginning after 1994, each dollar amount contained in 
        subsection (b)(2)(A) shall be increased by an amount equal to--
                    ``(A) such dollar amount, multiplied by
                    ``(B) the cost-of-living adjustment determined 
                under section 1(f)(3), for the calendar year in which 
                the taxable year begins, by substituting `calendar year 
                1993' for `calendar year 1992'.'', and
            (2) by redesignating paragraph (3) as paragraph (2).
    (d) Conforming Amendments.--
            (1) Subparagraph (D) of section 32(c)(3) is amended--
                    (A) by striking ``clause (i) or (ii)'' in clause 
                (iii) and inserting ``clause (i)'',
                    (B) by striking clause (ii), and
                    (C) by redesignating clause (iii) as clause (ii).
            (2) Paragraph (3) of section 162(l) is amended to read as 
        follows:
            ``(3) Coordination with medical deduction.--Any amount paid 
        by a taxpayer for insurance to which paragraph (1) applies 
        shall not be taken into account in computing the amount 
        allowable to the taxpayer as a deduction under section 
        213(a).''
            (3) Section 213 is amended by striking subsection (f).
            (4) Subsection (b) of section 3507 is amended by 
        redesignating paragraphs (2) and (3) as paragraphs (3) and (4), 
        respectively, and by inserting after paragraph (1) the 
        following new paragraph:
            ``(2) certifies that the employee has 1 or more qualifying 
        children (within the meaning of section 32(c)(3)) for such 
        taxable year,''.
            (5) Subparagraph (B) of section 3507(c)(2) is amended by 
        striking clauses (i) and (ii) and inserting the following:
                            ``(i) of not more than the credit 
                        percentage in effect under section 32(b)(1) for 
                        an eligible individual with 1 qualifying child 
                        and with earned income not in excess of the 
                        earned income amount in effect under section 
                        32(b)(2) for such an eligible individual, which
                            ``(ii) phases out at the phaseout 
                        percentage in effect under section 32(b)(1) for 
                        such an eligible individual between the 
                        phaseout amount in effect under section 
                        32(b)(2) for such an eligible individual and 
                        the amount of earned income at which the credit 
                        under section 32(a) phases out for such an 
                        eligible individual, or''.
    (e) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1993.

            PART V--INCENTIVES FOR INVESTMENT IN REAL ESTATE

Subpart A--Extension of Qualified Mortgage Bonds and Low-Income Housing 
                                 Credit

SEC. 14141. PERMANENT EXTENSION OF QUALIFIED MORTGAGE BONDS.

    (a) In General.--Paragraph (1) of section 143(a) (defining 
qualified mortgage bond) is amended to read as follows:
            ``(1) Qualified mortgage bond defined.--For purposes of 
        this title, the term `qualified mortgage bond' means a bond 
        which is issued as part of a qualified mortgage issue.''
    (b) Mortgage Credit Certificates.--Section 25 is amended by 
striking subsection (h) and by redesignating subsections (i) and (j) as 
subsections (h) and (i), respectively.
    (c) Effective Dates.--
            (1) Bonds.--The amendment made by subsection (a) shall 
        apply to bonds issued after June 30, 1992.
            (2) Certificates.--The amendment made by subsection (b) 
        shall apply to elections for periods after June 30, 1992.

SEC. 14142. PERMANENT EXTENSION OF LOW-INCOME HOUSING CREDIT.

    (a) In General.--Section 42 (relating to low-income housing credit) 
is amended by striking subsection (o).
    (b) HOME Assistance Not To Result in Certain Buildings Being 
Federally Subsidized.--Paragraph (2) of section 42(i) (relating to 
determination of whether building is federally subsidized) is amended 
by adding at the end thereof the following new subparagraph:
                    ``(E) Buildings receiving home assistance.--
                Assistance provided under the HOME Investment 
                Partnerships Act (as in effect on the date of the 
                enactment of this subparagraph) with respect to any 
                building shall not be taken under subparagraph (D) if 
                40 percent or more of the residential units in the 
                building are occupied by individuals whose income is 50 
                percent or less of area median gross income. Subsection 
                (d)(5)(C) shall not apply to any building to which the 
                preceding sentence applies.''.
    (c) Effective Dates.--
            (1) The amendment made by subsection (a) shall apply to 
        periods after June 30, 1992.
            (2) The amendment made by subsection (b) shall apply to 
        periods after the date of the enactment of this Act.

             Subpart B--Modification of Passive Loss Rules

SEC. 14143. APPLICATION OF PASSIVE LOSS RULES TO RENTAL REAL ESTATE 
              ACTIVITIES.

    (a) Rental Real Estate Activities of Persons in Real Property 
Business Not Automatically Treated as Passive Activities.--Subsection 
(c) of section 469 (defining passive activity) is amended by adding at 
the end thereof the following new paragraph:
            ``(7) Special rules for taxpayers in real property 
        business.--
                    ``(A) In general.--If this paragraph applies to any 
                taxpayer for a taxable year--
                            ``(i) paragraph (2) shall not apply to any 
                        rental real estate activity of such taxpayer 
                        for such taxable year, and
                            ``(ii) this section shall be applied as if 
                        each interest of the taxpayer in rental real 
                        estate were a separate activity.
                Notwithstanding clause (ii), a taxpayer may elect to 
                treat all interests in rental real estate as one 
                activity. Nothing in the preceding provisions of this 
                subparagraph shall be construed as affecting the 
                determination of whether the taxpayer materially 
                participates with respect to any interest in a limited 
                partnership as a limited partner.
                    ``(B) Taxpayers to whom paragraph applies.--This 
                paragraph shall apply to a taxpayer for a taxable year 
                if more than one-half of the personal services 
                performed in trades or businesses by the taxpayer 
                during such taxable year are performed in real property 
                trades or businesses in which the taxpayer materially 
                participates.
                    ``(C) Real property trade or business.--For 
                purposes of this paragraph, the term `real property 
                trade or business' means any real property development, 
                redevelopment, construction, reconstruction, 
                acquisition, conversion, rental, operation, management, 
                leasing, or brokerage trade or business.
                    ``(D) Special rules for subparagraph (b).--
                            ``(i) Closely held c corporations.--In the 
                        case of a closely held C corporation, the 
                        requirements of subparagraph (B) shall be 
                        treated as met for any taxable year if more 
                        than 50 percent of the gross receipts of such 
                        corporation for such taxable year are derived 
                        from real property trades or businesses in 
                        which the corporation materially participates.
                            ``(ii) Personal services as an employee.--
                        For purposes of subparagraph (B), personal 
                        services performed as an employee shall not be 
                        treated as performed in real property trades or 
                        businesses. The preceding sentence shall not 
                        apply if such employee is a 5-percent owner (as 
                        defined in section 416(i)(1)(B)) in the 
                        employer.''
    (b) Conforming Amendments.--
            (1) Paragraph (2) of section 469(c) is amended by striking 
        ``The'' and inserting ``Except as provided in paragraph (7), 
        the''.
            (2) Clause (iv) of section 469(i)(3)(E) is amended by 
        inserting ``or any loss allowable by reason of subsection 
        (c)(7)'' after ``loss''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1993.

 Subpart C--Provisions Relating To Real Estate Investments by Pension 
                                 Funds

SEC. 14144. REAL ESTATE PROPERTY ACQUIRED BY A QUALIFIED ORGANIZATION.

    (a) Modifications of Exceptions.--Paragraph (9) of section 514(c) 
(relating to real property acquired by a qualified organization) is 
amended by adding at the end thereof the following new subparagraphs:
                    ``(G) Special rules for purposes of the 
                exceptions.--Except as otherwise provided by 
                regulations--
                            ``(i) Small leases disregarded.--For 
                        purposes of clauses (iii) and (iv) of 
                        subparagraph (B), a lease to a person described 
                        in such clause (iii) or (iv) shall be 
                        disregarded if no more than 25 percent of the 
                        leasable floor space in a building (or complex 
                        of buildings) is covered by the lease and if 
                        the lease is on commercially reasonable terms.
                            ``(ii) Commercially reasonable financing.--
                        Clause (v) of subparagraph (B) shall not apply 
                        if the financing is on commercially reasonable 
                        terms.
                    ``(H) Qualifying sales by financial institutions.--
                            ``(i) In general.--In the case of a 
                        qualifying sale by a financial institution, 
                        except as provided in regulations, clauses (i) 
                        and (ii) of subparagraph (B) shall not apply 
                        with respect to financing provided by such 
                        institution for such sale.
                            ``(ii) Qualifying sale.--For purposes of 
                        this clause, there is a qualifying sale by a 
                        financial institution if--
                                    ``(I) a qualified organization 
                                acquires property described in clause 
                                (iii) from a financial institution and 
                                any gain recognized by the financial 
                                institution with respect to the 
                                property is ordinary income,
                                    ``(II) the stated principal amount 
                                of the financing provided by the 
                                financial institution does not exceed 
                                the amount of the outstanding 
                                indebtedness (including accrued but 
                                unpaid interest) of the financial 
                                institution with respect to the 
                                property described in clause (iii) 
                                immediately before the acquisition 
                                referred to in clause (iii) or (v), 
                                whichever is applicable, and
                                    ``(III) the present value 
                                (determined as of the time of the sale 
                                and by using the applicable Federal 
                                rate determined under section 1274(d)) 
                                of the maximum amount payable pursuant 
                                to the financing that is determined by 
                                reference to the revenue, income, or 
                                profits derived from the property 
                                cannot exceed 30 percent of the total 
                                purchase price of the property 
                                (including the contingent payments).
                            ``(iii) Property to which subparagraph 
                        applies.--Property is described in this clause 
                        if such property is foreclosure property, or is 
                        real property which--
                                    ``(I) was acquired by the qualified 
                                organization from a financial 
                                institution which is in conservatorship 
                                or receivership, or from the 
                                conservator or receiver of such an 
                                institution, and
                                    ``(II) was held by the financial 
                                institution at the time it entered into 
                                conservatorship or receivership.
                            ``(iv) Financial institution.--For purposes 
                        of this subparagraph, the term `financial 
                        institution' means--
                                    ``(I) any financial institution 
                                described in section 581 or 591(a),
                                    ``(II) any other corporation which 
                                is a direct or indirect subsidiary of 
                                an institution referred to in subclause 
                                (I) but only if, by virtue of being 
                                affiliated with such institution, such 
                                other corporation is subject to 
                                supervision and examination by a 
                                Federal or State agency which regulates 
                                institutions referred to in subclause 
                                (I), and
                                    ``(III) any person acting as a 
                                conservator or receiver of an entity 
                                referred to in subclause (I) or (II) 
                                (or any government agency or 
                                corporation succeeding to the rights or 
                                interest of such person).
                            ``(v) Foreclosure property.--For purposes 
                        of this subparagraph, the term `foreclosure 
                        property' means any real property acquired by 
                        the financial institution as the result of 
                        having bid on such property at foreclosure, or 
                        by operation of an agreement or process of law, 
                        after there was a default (or a default was 
                        imminent) on indebtedness which such property 
                        secured.''.
    (b) Conforming Amendment.--Paragraph (9) of section 514(c) is 
amended--
            (1) by adding the following new sentence at the end of 
        subparagraph (A): ``For purposes of this paragraph, an interest 
        in a mortgage shall in no event be treated as real property.'', 
        and
            (2) by striking the last sentence of subparagraph (B).
    (c) Effective Dates.--
            (1) In general.--The amendments made by this section shall 
        apply to acquisitions on or after January 1, 1994.
            (2) Small leases.--The provisions of section 
        514(c)(9)(G)(i) of the Internal Revenue Code of 1986 shall, in 
        addition to any leases to which the provisions apply by reason 
        of paragraph (1), apply to leases entered into on or after 
        January 1, 1994.

SEC. 14145. REPEAL OF SPECIAL TREATMENT OF PUBLICLY TREATED 
              PARTNERSHIPS.

    (a) General Rule.--Subsection (c) of section 512 is amended--
            (1) by striking paragraph (2),
            (2) by redesignating paragraph (3) as paragraph (2), and
            (3) by striking ``paragraph (1) or (2)'' in paragraph (2) 
        (as so redesignated) and inserting ``paragraph (1)''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
apply to partnership years beginning on or after January 1, 1994.

SEC. 14146. TITLE-HOLDING COMPANIES PERMITTED TO RECEIVE SMALL AMOUNTS 
              OF UNRELATED BUSINESS TAXABLE INCOME.

    (a) General Rule.--Paragraph (25) of section 501(c) is amended by 
adding at the end thereof the following new subparagraph:
                    ``(G)(i) An organization shall not be treated as 
                failing to be described in this paragraph merely by 
                reason of the receipt of any otherwise disqualifying 
                income which is incidentally derived from the holding 
                of real property.
                    ``(ii) Clause (i) shall not apply if the amount of 
                gross income described in such clause exceeds 10 
                percent of the organization's gross income for the 
                taxable year unless the organization establishes to the 
                satisfaction of the Secretary that the receipt of gross 
                income described in clause (i) in excess of such 
                limitation was inadvertent and reasonable steps are 
                being taken to correct the circumstances giving rise to 
                such income.''
    (b) Conforming Amendment.--Paragraph (2) of section 501(c) is 
amended by adding at the end thereof the following new sentence: 
``Rules similar to the rules of subparagraph (G) of paragraph (25) 
shall apply for purposes of this paragraph.''
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning on or after January 1, 1994.

SEC. 14147. EXCLUSION FROM UNRELATED BUSINESS TAX OF GAINS FROM CERTAIN 
              PROPERTY.

    (a) General Rule.--Subsection (b) of section 512 (relating to 
modifications) is amended by adding at the end thereof the following 
new paragraph:
            ``(16)(A) Notwithstanding paragraph (5)(B), there shall be 
        excluded all gains or losses from the sale, exchange, or other 
        disposition of any real property described in subparagraph (B) 
        if--
                    ``(i) such property was acquired by the 
                organization from--
                            ``(I) a financial institution described in 
                        section 581 or 591(a) which is in 
                        conservatorship or receivership, or
                            ``(II) the conservator or receiver of such 
                        an institution (or any government agency or 
                        corporation succeeding to the rights or 
                        interests of the conservator or receiver),
                    ``(ii) such property is designated by the 
                organization within the 9-month period beginning on the 
                date of its acquisition as property held for sale, 
                except that not more than one-half (by value determined 
                as of such date) of property acquired in a single 
                transaction may be so designated,
                    ``(iii) such sale, exchange, or disposition occurs 
                before the later of--
                            ``(I) the date which is 30 months after the 
                        date of the acquisition of such property, or
                            ``(II) the date specified by the Secretary 
                        in order to assure an orderly disposition of 
                        property held by persons described in 
                        subparagraph (A), and
                    ``(iv) while such property was held by the 
                organization, the aggregate expenditures on 
                improvements and development activities included in the 
                basis of the property are (or were) not in excess of 20 
                percent of the net selling price of such property.
            ``(B) Property is described in this subparagraph if it is 
        real property which--
                    ``(i) was held by the financial institution at the 
                time it entered into conservatorship or receivership, 
                or
                    ``(ii) was foreclosure property (as defined in 
                section 514(c)(9)(H)(v)) which secured indebtedness 
                held by the financial institution at such time.
        For purposes of this subparagraph, real property includes an 
        interest in a mortgage.''
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to property acquired on or after January 1, 1994.

SEC. 14148. EXCLUSION FROM UNRELATED BUSINESS TAX OF CERTAIN FEES AND 
              OPTION PREMIUMS.

    (a) Loan Commitment Fees.--Paragraph (1) of section 512(b) 
(relating to modifications) is amended by inserting ``amounts received 
or accrued as consideration for entering into agreements to make 
loans,'' before ``and annuities''.
    (b) Option Premiums.--The second sentence of section 512(b)(5) is 
amended--
            (1) by striking ``all gains on'' and inserting ``all gains 
        or losses recognized, in connection with the organization's 
        investment activities, from'',
            (2) by striking ``, written by the organization in 
        connection with its investment activities,'' and
            (3) by inserting ``or real property and all gains or losses 
        from the forfeiture of good-faith deposits (that are consistent 
        with established business practice) for the purchase, sale, or 
        lease of real property in connection with the organization's 
        investment activities'' before the period.
    (c) Effective Date.--The amendments made by this section shall 
apply to amounts received on or after January 1, 1994.

SEC. 14149. TREATMENT OF PENSION FUND INVESTMENTS IN REAL ESTATE 
              INVESTMENT TRUSTS.

    (a) General Rule.--Subsection (h) of section 856 (relating to 
closely held determinations) is amended by adding at the end thereof 
the following new paragraph:
            ``(3) Treatment of trusts described in section 401(a).--
                    ``(A) Look-thru treatment.--
                            ``(i) In general.--Except as provided in 
                        clause (ii), in determining whether the stock 
                        ownership requirement of section 542(a)(2) is 
                        met for purposes of paragraph (1)(A), any stock 
                        held by a qualified trust shall be treated as 
                        held directly by its beneficiaries in 
                        proportion to their actuarial interests in such 
                        trust and shall not be treated as held by such 
                        trust.
                            ``(ii) Certain related trusts not 
                        eligible.--Clause (i) shall not apply to any 
                        qualified trust if one or more disqualified 
                        persons (as defined in section 4975(e)(2), 
                        without regard to subparagraphs (B) and (I) 
                        thereof) with respect to such qualified trust 
                        hold in the aggregate 5 percent or more in 
                        value of the interests in the real estate 
                        investment trust and such real estate 
                        investment trust has accumulated earnings and 
                        profits attributable to any period for which it 
                        did not qualify as a real estate investment 
                        trust.
                    ``(B) Coordination with personal holding company 
                rules.--If any entity qualifies as a real estate 
                investment trust for any taxable year by reason of 
                subparagraph (A), such entity shall not be treated as a 
                personal holding company for such taxable year for 
                purposes of part II of subchapter G of this chapter.
                    ``(C) Treatment for purposes of unrelated business 
                tax.--If any qualified trust holds more than 10 percent 
                (by value) of the interests in any pension-held REIT at 
                any time during a taxable year, the trust shall be 
                treated as having for such taxable year gross income 
                from an unrelated trade or business in an amount which 
                bears the same ratio to the aggregate dividends paid 
                (or treated as paid) by the REIT to the trust for the 
                taxable year of the REIT with or within which the 
                taxable year of the trust ends (the `REIT year') as--
                            ``(i) the gross income (less direct 
                        expenses related thereto) of the REIT for the 
                        REIT year from unrelated trades or businesses 
                        (determined as if the REIT were a qualified 
                        trust), bears to
                            ``(ii) the gross income (less direct 
                        expenses related thereto) of the REIT for the 
                        REIT year.
                This subparagraph shall apply only if the ratio 
                determined under the preceding sentence is at least 5 
                percent.
                    ``(D) Pension-held reit.--The purposes of 
                subparagraph (C)--
                            ``(i) In general.--A real estate investment 
                        trust is a pension-held REIT if such trust 
                        would not have qualified as a real estate 
                        investment trust but for the provisions of this 
                        paragraph and if such trust is predominantly 
                        held by qualified trusts.
                            ``(ii) Predominantly held.--For purposes of 
                        clause (i), a real estate investment trust is 
                        predominantly held by qualified trusts if--
                                    ``(I) at least 1 qualified trust 
                                holds more than 25 percent (by value) 
                                of the interests in such real estate 
                                investment trust, or
                                    ``(II) 1 or more qualified trusts 
                                (each of whom own more than 10 percent 
                                by value of the interests in such real 
                                estate investment trust) hold in the 
                                aggregate more than 50 percent (by 
                                value) of the interests in such real 
                                estate investment trust.
                    ``(E) Qualified trust.--For purposes of this 
                paragraph, the term `qualified trust' means any trust 
                described in section 401(a) and exempt from tax under 
                section 501(a).''
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 1993.

                  Subpart D--Discharge of Indebtedness

SEC. 14150. EXCLUSION FROM GROSS INCOME FOR INCOME FROM DISCHARGE OF 
              QUALIFIED REAL PROPERTY BUSINESS INDEBTEDNESS.

    (a) In General.--Paragraph (1) of section 108(a) (relating to 
income from discharge of indebtedness) is amended by striking ``or'' at 
the end of subparagraph (B), by striking the period at the end of 
subparagraph (C) and inserting ``, or'', and by adding at the end the 
following new subparagraph:
            ``(D) in the case of a taxpayer other than a C corporation, 
        the indebtedness discharged is qualified real property business 
        indebtedness.''
    (b) Qualified Real Property Business Indebtedness.--Section 108 is 
amended by inserting after subsection (b) the following new subsection:
    ``(c) Treatment of Discharge of Qualified Real Property Business 
Indebtedness.--
            ``(1) Basis reduction.--
                    ``(A) In general.--The amount excluded from gross 
                income under subparagraph (D) of subsection (a)(1) 
                shall be applied to reduce the basis of the depreciable 
                real property of the taxpayer.
                    ``(B) Cross reference.--For provisions making the 
                reduction described in subparagraph (A), see section 
                1017.
            ``(2) Limitations.--
                    ``(A) Indebtedness in excess of value.--The amount 
                excluded under subparagraph (D) of subsection (a)(1) 
                with respect to any qualified real property business 
                indebtedness shall not exceed the excess (if any) of--
                            ``(i) the outstanding principal amount of 
                        such indebtedness (immediately before the 
                        discharge), over
                            ``(ii) the fair market value of the real 
                        property described in paragraph (3)(A) (as of 
                        such time), reduced by the outstanding 
                        principal amount of any other qualified real 
                        property business indebtedness secured by such 
                        property (as of such time).
                    ``(B) Overall limitation.--The amount excluded 
                under subparagraph (D) of subsection (a)(1) shall not 
                exceed the aggregate adjusted bases of depreciable real 
                property (determined after any reductions under 
                subsections (b) and (g)) held by the taxpayer 
                immediately before the discharge (other than 
                depreciable real property acquired in contemplation of 
                such discharge).
            ``(3) Qualified real property business indebtedness.--The 
        term `qualified real property business indebtedness' means 
        indebtedness which--
                    ``(A) was incurred or assumed by the taxpayer in 
                connection with real property used in a trade or 
                business and is secured by such real property,
                    ``(B) was incurred or assumed before January 1, 
                1993, or if incurred or assumed on or after such date, 
                is qualified acquisition indebtedness, and
                    ``(C) with respect to which such taxpayer makes an 
                election to have this paragraph apply.
        Such term shall not include qualified farm indebtedness. 
        Indebtedness under subparagraph (B) shall include indebtedness 
        resulting from the refinancing of indebtedness under 
        subparagraph (B) (or this sentence), but only to the extent it 
        does not exceed the amount of the indebtedness being 
        refinanced.
            ``(4) Qualified acquisition indebtedness.--For purposes of 
        paragraph (3)(B), the term `qualified acquisition indebtedness' 
        means, with respect to any real property described in paragraph 
        (3)(A), indebtedness incurred or assumed to acquire, construct, 
        reconstruct, or substantially improve such property.
            ``(5) Regulations.--The Secretary shall issue such 
        regulations as are necessary to carry out this subsection, 
        including regulations preventing the abuse of this subsection 
        through cross-collateralization or other means.''
    (c) Technical Amendments.--
            (1) Subparagraph (A) of section 108(a)(2) is amended by 
        striking ``and (C)'' and inserting ``, (C), and (D)''.
            (2) Subparagraph (B) of section 108(a)(2) is amended to 
        read as follows:
                    ``(B) Insolvency exclusion takes precedence over 
                qualified farm exclusion and qualified real property 
                business exclusion.--Subparagraphs (C) and (D) of 
                paragraph (1) shall not apply to a discharge to the 
                extent the taxpayer is insolvent.''
            (3) Subsection (d) of section 108 is amended--
                    (A) by striking ``subsections (a), (b), and (g)'' 
                in paragraphs (6) and (7)(A) and inserting 
                ``subsections (a), (b), (c), and (g)'',
                    (B) by striking ``Subsections (a), (b), and (g)'' 
                in the subsection heading and inserting ``Certain 
                Provisions'', and
                    (C) by striking ``Subsections (a), (b), and (g)'' 
                in the headings of paragraphs (6) and (7)(A) and 
                inserting ``Certain provisions''.
            (4) Subparagraph (B) of section 108(d)(7) is amended by 
        adding at the end thereof the following new sentence: ``The 
        preceding sentence shall not apply to any discharge to the 
        extent that subsection (a)(1)(D) applies to such discharge.''
            (5) Subparagraph (A) of section 108(d)(9) is amended by 
        inserting ``or under paragraph (3)(B) of subsection (c)'' after 
        ``subsection (b)''.
            (6) Paragraph (2) of section 1017(a) is amended by striking 
        ``or (b)(5)'' and inserting ``, (b)(5), or (c)(1)''.
            (7) Subparagraph (A) of section 1017(b)(3) is amended by 
        inserting ``or (c)(1)'' after ``subsection (b)(5)''.
            (8) Section 1017(b)(3) is amended by adding at the end the 
        following new subparagraph:
                    ``(F) Special rules for qualified real property 
                business indebtedness.--In the case of any amount which 
                under section 108(c)(1) is to be applied to reduce 
                basis--
                            ``(i) depreciable property shall only 
                        include depreciable real property for purposes 
                        of subparagraphs (A) and (C),
                            ``(ii) subparagraph (E) shall not apply, 
                        and
                            ``(iii) in the case of property taken into 
                        account under section 108(c)(2)(B), the 
                        reduction with respect to such property shall 
                        be made as of the time immediately before 
                        disposition if earlier than the time under 
                        subsection (a).''
            (9) Paragraph (1) of section 703(b) is amended by striking 
        ``subsection (b)(5)'' and inserting ``subsection (b)(5) or 
        (c)(3)''.
    (d) Effective Date.--The amendments made by this section shall 
apply to discharges after December 31, 1992, in taxable years ending 
after such date.

Subpart E--Increase in Recovery Period for Nonresidential Real Property

SEC. 14151. INCREASE IN RECOVERY PERIOD FOR NONRESIDENTIAL REAL 
              PROPERTY.

    (a) General Rule.--Paragraph (1) of section 168(c) (relating to 
applicable recovery period) is amended by striking the item relating to 
nonresidential real property and inserting the following:

    ``Nonresidential real property................         39 years.''.
    (b) Effective Date.--
            (1) In general.--Except as provided in paragraph (2), the 
        amendment made by subsection (a) shall apply to property placed 
        in service by the taxpayer on or after February 25, 1993.
            (2) Exception.--The amendments made by this section shall 
        not apply to property placed in service by the taxpayer before 
        January 1, 1994, if--
                    (A) the taxpayer or a qualified person entered into 
                a binding written contract to purchase or construct 
                such property before February 25, 1993, or
                    (B) the construction of such property was commenced 
                by or for the taxpayer or a qualified person before 
                February  25, 1993.
        For purposes of this paragraph, the term ``qualified person'' 
        means any person who transfers his rights in such a contract or 
        such property to the taxpayer but only if the property is not 
        placed in service by such person before such rights are 
        transferred to the taxpayer.

                          PART VI--LUXURY TAX

SEC. 14161. REPEAL OF LUXURY EXCISE TAXES OTHER THAN ON PASSENGER 
              VEHICLES.

    (a) In General.--Subchapter A of chapter 31 (relating to retail 
excise taxes) is amended to read as follows:

              ``Subchapter A--Luxury Passenger Automobiles

                              ``Sec. 4001. Imposition of tax.
                              ``Sec. 4002. 1st retail sale; uses, etc. 
                                        treated as sales; determination 
                                        of price.
                              ``Sec. 4003. Special rules.

``SEC. 4001. IMPOSITION OF TAX.

    ``(a) Imposition of Tax.--There is hereby imposed on the 1st retail 
sale of any passenger vehicle a tax equal to 10 percent of the price 
for which so sold to the extent such price exceeds $30,000.
    ``(b) Passenger Vehicle.--
            ``(1) In general.--For purposes of this subchapter, the 
        term `passenger vehicle' means any 4-wheeled vehicle--
                    ``(A) which is manufactured primarily for use on 
                public streets, roads, and highways, and
                    ``(B) which is rated at 6,000 pounds unloaded gross 
                vehicle weight or less.
            ``(2) Special rules.--
                    ``(A) Trucks and vans.--In the case of a truck or 
                van, paragraph (1)(B) shall be applied by substituting 
                `gross vehicle weight' for `unloaded gross vehicle 
                weight'.
                    ``(B) Limousines.--In the case of a limousine, 
                paragraph (1) shall be applied without regard to 
                subparagraph (B) thereof.
    ``(c) Exceptions for Taxicabs, Etc.--The tax imposed by this 
section shall not apply to the sale of any passenger vehicle for use by 
the purchaser exclusively in the active conduct of a trade or business 
of transporting persons or property for compensation or hire.
    ``(d) Exemption for Law Enforcement Uses, Etc.--No tax shall be 
imposed by this section on the sale of any passenger vehicle--
            ``(1) to the Federal Government, or a State or local 
        government, for use exclusively in police, firefighting, search 
        and rescue, or other law enforcement or public safety 
        activities, or in public works activities, or
            ``(2) to any person for use exclusively in providing 
        emergency medical services.
    ``(e) Inflation Adjustment.--
            ``(1) In general.--In the case of any calendar year after 
        1992, the $30,000 amount in subsection (a) and section 4003(a) 
        shall be increased by an amount equal to--
                    ``(A) $30,000, multiplied by
                    ``(B) the cost-of-living adjustment under section 
                1(f)(3) for such calendar year, determined by 
                substituting `calendar year 1991' for `calendar year 
                1992' in subparagraph (B) thereof.
            ``(2) Rounding.--If any amount as adjusted under paragraph 
        (1) is not a multiple of $100, such amount shall be rounded to 
        the nearest multiple of $100 (or, if such amount is a multiple 
        of $50 and not of $100, such amount shall be rounded to the 
        next highest multiple of $100).
    ``(f) Termination.--The tax imposed by this section shall not apply 
to any sale or use after December 31, 1999.

``SEC. 4002. 1ST RETAIL SALE; USES, ETC. TREATED AS SALES; 
              DETERMINATION OF PRICE.

    ``(a) 1st Retail Sale.--For purposes of this subchapter, the term 
`1st retail sale' means the 1st sale, for a purpose other than resale, 
after manufacture, production, or importation.
    ``(b) Use Treated as Sale.--
            ``(1) In general.--If any person uses a passenger vehicle 
        (including any use after importation) before the 1st retail 
        sale of such vehicle, then such person shall be liable for tax 
        under this subchapter in the same manner as if such vehicle 
        were sold at retail by him.
            ``(2) Exemption for further manufacture.--Paragraph (1) 
        shall not apply to use of a vehicle as material in the 
        manufacture or production of, or as a component part of, 
        another vehicle taxable under this subchapter to be 
        manufactured or produced by him.
            ``(3) Exemption for demonstration use.--Paragraph (1) shall 
        not apply to any use of a passenger vehicle as a demonstrator.
            ``(4) Exception for use after importation of certain 
        vehicles.--Paragraph (1) shall not apply to the use of a 
        vehicle after importation if the user or importer establishes 
        to the satisfaction of the Secretary that the 1st use of the 
        vehicle occurred before January 1, 1991, outside the United 
        States.
            ``(5) Computation of tax.--In the case of any person made 
        liable for tax by paragraph (1), the tax shall be computed on 
        the price at which similar vehicles are sold at retail in the 
        ordinary course of trade, as determined by the Secretary.
    ``(c) Leases Considered as Sales.--For purposes of this 
subchapter--
            ``(1) In general.--Except as otherwise provided in this 
        subsection, the lease of a vehicle (including any renewal or 
        any extension of a lease or any subsequent lease of such 
        vehicle) by any person shall be considered a sale of such 
        vehicle at retail.
            ``(2) Special rules for long-term leases.--
                    ``(A) Tax not imposed on sale for leasing in a 
                qualified lease.--The sale of a passenger vehicle to a 
                person engaged in a passenger vehicle leasing or rental 
                trade or business for leasing by such person in a long-
                term lease shall not be treated as the 1st retail sale 
                of such vehicle.
                    ``(B) Long-term lease.--For purposes of 
                subparagraph (A), the term `long-term lease' means any 
                long-term lease (as defined in section 4052).
                    ``(C) Special rules.--In the case of a long-term 
                lease of a vehicle which is treated as the 1st retail 
                sale of such vehicle--
                            ``(i) Determination of price.--The tax 
                        under this subchapter shall be computed on the 
                        lowest price for which the vehicle is sold by 
                        retailers in the ordinary course of trade.
                            ``(ii) Payment of tax.--Rules similar to 
                        the rules of section 4217(e)(2) shall apply.
                            ``(iii) No tax where exempt use by 
                        lessee.--No tax shall be imposed on any lease 
                        payment under a long-term lease if the lessee's 
                        use of the vehicle under such lease is an 
                        exempt use (as defined in section 4003(b)) of 
                        such vehicle.
    ``(d) Determination of Price.--
            ``(1) In general.--In determining price for purposes of 
        this subchapter--
                    ``(A) there shall be included any charge incident 
                to placing the article in condition ready for use,
                    ``(B) there shall be excluded--
                            ``(i) the amount of the tax imposed by this 
                        subchapter,
                            ``(ii) if stated as a separate charge, the 
                        amount of any retail sales tax imposed by any 
                        State or political subdivision thereof or the 
                        District of Columbia, whether the liability for 
                        such tax is imposed on the vendor or vendee, 
                        and
                            ``(iii) the value of any component of such 
                        article if--
                                    ``(I) such component is furnished 
                                by the 1st user of such article, and
                                    ``(II) such component has been used 
                                before such furnishing, and
                    ``(C) the price shall be determined without regard 
                to any trade-in.
            ``(2) Other rules.--Rules similar to the rules of 
        paragraphs (2) and (4) of section 4052(b) shall apply for 
        purposes of this subchapter.

``SEC. 4003. SPECIAL RULES.

    ``(a) Separate Purchase of Vehicle and Parts and Accessories 
Therefor.--Under regulations prescribed by the Secretary--
            ``(1) In general.--Except as provided in paragraph (2), 
        if--
                    ``(A) the owner, lessee, or operator of any 
                passenger vehicle installs (or causes to be installed) 
                any part or accessory on such vehicle, and
                    ``(B) such installation is not later than the date 
                6 months after the date the vehicle was 1st placed in 
                service,
        then there is hereby imposed on such installation a tax equal 
        to 10 percent of the price of such part or accessory and its 
        installation.
            ``(2) Limitation.--The tax imposed by paragraph (1) on the 
        installation of any part or accessory shall not exceed 10 
        percent of the excess (if any) of--
                    ``(A) the sum of--
                            ``(i) the price of such part or accessory 
                        and its installation,
                            ``(ii) the aggregate price of the parts and 
                        accessories (and their installation) installed 
                        before such part or accessory, plus
                            ``(iii) the price for which the passenger 
                        vehicle was sold, over
                    ``(B) $30,000.
            ``(3) Exceptions.--Paragraph (1) shall not apply if--
                    ``(A) the part or accessory installed is a 
                replacement part or accessory,
                    ``(B) the part or accessory is installed to enable 
                or assist an individual with a disability to operate 
                the vehicle, or to enter or exit the vehicle, by 
                compensating for the effect of such disability, or
                    ``(C) the aggregate price of the parts and 
                accessories (and their installation) described in 
                paragraph (1) with respect to the vehicle does not 
                exceed $200 (or such other amount or amounts as the 
                Secretary may by regulation prescribe).
        The price of any part or accessory (and its installation) to 
        which paragraph (1) does not apply by reason of this paragraph 
        shall not be taken into account under paragraph (2)(A).
            ``(4) Installers secondarily liable for tax.--The owners of 
        the trade or business installing the parts or accessories shall 
        be secondarily liable for the tax imposed by this subsection.
    ``(b) Imposition of Tax on Sales, Etc., Within 2 Years of Vehicles 
Purchased Tax-Free.--
            ``(1) In general.--If--
                    ``(A) no tax was imposed under this subchapter on 
                the 1st retail sale of any passenger vehicle by reason 
                of its exempt use, and
                    ``(B) within 2 years after the date of such 1st 
                retail sale, such vehicle is resold by the purchaser or 
                such purchaser makes a substantial nonexempt use of 
                such vehicle,
        then such sale or use of such vehicle by such purchaser shall 
        be treated as the 1st retail sale of such vehicle for a price 
        equal to its fair market value at the time of such sale or use.
            ``(2) Exempt use.--For purposes of this subsection, the 
        term `exempt use' means any use of a vehicle if the 1st retail 
        sale of such vehicle is not taxable under this subchapter by 
        reason of such use.
    ``(c) Parts and Accessories Sold With Taxable Article.--Parts and 
accessories sold on, in connection with, or with the sale of any 
passenger vehicle shall be treated as part of the vehicle.
    ``(d) Partial Payments, Etc.--In the case of a contract, sale, or 
arrangement described in paragraph (2), (3), or (4) of section 4216(c), 
rules similar to the rules of section 4217(e)(2) shall apply for 
purposes of this subchapter.''
    (b) Technical Amendments.--
            (1) Subsection (c) of section 4221 is amended by striking 
        ``4002(b), 4003(c), 4004(a)'' and inserting ``4001(d)''.
            (5) Subsection (d) of section 4222 is amended by striking 
        ``4002(b), 4003(c), 4004(a)'' and inserting ``4001(d)''.
            (3) The table of subchapters for chapter 31 is amended by 
        striking the item relating to subchapter A and inserting the 
        following:

                              ``Subchapter A. Luxury passenger 
                                        vehicles.''
    (c) Effective Date.--The amendments made by this section shall take 
effect on January 1, 1993.

SEC. 14162. EXEMPTION FROM LUXURY EXCISE TAX FOR CERTAIN EQUIPMENT 
              INSTALLED ON PASSENGER VEHICLES FOR USE BY DISABLED 
              INDIVIDUALS.

    (a) In General.--Paragraph (3) of section 4004(b) (relating to 
separate purchase of article and parts and accessories therefor), as in 
effect on the day before the date of the enactment of this Act, is 
amended--
            (1) by striking ``or'' at the end of subparagraph (A),
            (2) by redesignating subparagraph (B) as subparagraph (C),
            (3) by inserting after subparagraph (A) the following new 
        subparagraph:
                    ``(B) the part or accessory is installed on a 
                passenger vehicle to enable or assist an individual 
                with a disability to operate the vehicle, or to enter 
                or exit the vehicle, by compensating for the effect of 
                such disability, or'', and
            (4) by inserting after subparagraph (C) the following flush 
        sentence:
        ``The price of any part or accessory (and its installation) to 
        which paragraph (1) does not apply by reason of this paragraph 
        shall not be taken into account under paragraph (2)(A).''
    (b) Effective Date.--The amendments made by this section shall take 
effect as if included in the amendments made by section 11221(a) of the 
Omnibus Budget Reconciliation Act of 1990.
    (c) Period For Filing Claims.--If refund or credit of any 
overpayment of tax resulting from the application of the amendments 
made by this section is prevented at any time before the close of the 
1-year period beginning on the date of the enactment of this Act by the 
operation of any law or rule of law (including res judicata), refund or 
credit of such overpayment (to the extent attributable to such 
amendments) may, nevertheless, be made or allowed if claim therefor is 
filed before the close of such 1-year period.

SEC. 14163. TAX ON DIESEL FUEL USED IN NONCOMMERCIAL BOATS.

    (a) General Rule.--
            (1) Paragraph (2) of section 4092(a) (defining diesel fuel) 
        is amended by striking ``or a diesel-powered train'' and 
        inserting ``, a diesel-powered train, or a diesel-powered 
        boat''.
            (2) Paragraph (1) of section 4041(a) is amended--
                    (A) by striking ``diesel-powered highway vehicle'' 
                each place it appears and inserting ``diesel-powered 
                highway vehicle or diesel-powered boat'', and
                    (B) by striking ``such vehicle'' and inserting 
                ``such vehicle or boat''.
            (3) Subparagraph (B) of section 4092(b)(1) is amended by 
        striking ``commercial and noncommercial vessels'' each place it 
        appears and inserting ``vessels for use in an off-highway 
        business use (as defined in section 6421(e)(2)(B))''.
    (b) Exemption for Use In Fisheries or Commercial Navigation.--
Subparagraph (B) of section 6421(e)(2) is amended to read as follows:
                    ``(B) Uses in boats.--The term `off-highway 
                business use' does not include any use in a motorboat; 
                except that such term shall include any use in--
                            ``(i) a vessel employed in the fisheries or 
                        in the whaling business, and
                            ``(ii) in the case of diesel fuel, a boat 
                        in the active conduct of--
                                    ``(I) a trade or business of 
                                commercial fishing or transporting 
                                persons or property for compensation or 
                                hire, or
                                    ``(II) any other trade or business 
                                unless the boat is used predominantly 
                                in any activity which is of a type 
                                generally considered to constitute 
                                entertainment, amusement or 
                                recreation.''
    (c) Retention of Taxes in General Fund.--
            (1) Taxes imposed at highway trust fund financing rate.--
        Paragraph (4) of section 9503(b) (relating to transfers to 
        Highway Trust Fund) is amended--
                    (A) by striking ``and'' at the end of subparagraph 
                (A),
                    (B) by striking the period at the end of 
                subparagraph (B) and inserting ``, and'', and
                    (C) by adding at the end thereof the following new 
                subparagraph:
                    ``(C) there shall not be taken into account the 
                taxes imposed by sections 4041 and 4091 on diesel fuel 
                sold for use or used as fuel in a diesel-powered 
                boat.''
            (2) Taxes imposed at leaking underground storage tank trust 
        fund financing rate.--Subsection (b) of section 9508 (relating 
        to transfers to Leaking Underground Storage Tank Trust Fund) is 
        amended by adding at the end thereof the following new 
        sentence: ``For purposes of this subsection, there shall not be 
        taken into account the taxes imposed by sections 4041 and 4091 
        on diesel fuel sold for use or used as fuel in a diesel-powered 
        boat.''
    (d) Effective Date.--The amendments made by this section shall take 
effect on January 1, 1994.

                        PART VII--OTHER CHANGES

SEC. 14171. ALTERNATIVE MINIMUM TAX TREATMENT OF CONTRIBUTIONS OF 
              APPRECIATED PROPERTY.

    (a) Repeal of Tax Preference.--Subsection (a) of section 57 (as 
amended by section 14113) is amended by striking paragraph (6) 
(relating to appreciated property charitable deduction) and by 
redesignating paragraphs (7) and (8) as paragraphs (6) and (7), 
respectively.
    (b) Effect on Adjusted Current Earnings.--Paragraph (4) of section 
56(g) is amended by adding at the end thereof the following new 
subparagraph:
                    ``(J) Treatment of charitable contributions.--
                Notwithstanding subparagraphs (B) and (C), no 
                adjustment related to the earnings and profits effects 
                of any charitable contribution shall be made in 
                computing adjusted current earnings.''
    (c) Conforming Amendment.--Subclause (II) of section 
53(d)(1)(B)(ii) (as amended by section 14113) is amended by striking 
``(5), (6), and (8)'' and inserting ``(5), and (7)''.
    (d) Effective Date.--The amendments made by this section shall 
apply to contributions made after June 30, 1992, except that in the 
case of any contribution of capital gain property which is not tangible 
personal property, such amendments shall apply only if the contribution 
is made after December 31, 1992.
    (e) Report on Advance Determination of Value of Charitable Gifts.--
Not later than 1 year after the date of the enactment of this Act, the 
Secretary of the Treasury shall report to the Committee on Finance of 
the Senate and the Committee on Ways and Means of the House of 
Representatives on the development of a procedure under which taxpayers 
may elect to seek an agreement with the Secretary as to the value of 
tangible personal property prior to the donation of such property to a 
qualifying charitable organization if the time limits for the donation 
and other conditions contained in the agreement are satisfied. Such 
report shall address the setting of possible threshold amounts for 
claimed value (and the payment of fees) by a taxpayer in order to seek 
agreement under the procedure, possible limitations on applying the 
procedure only to items with significant artistic or cultural value, 
and recommendations for legislative action needed to implement the 
proposed procedure.

SEC. 14172. CERTAIN TRANSFERS TO RAILROAD RETIREMENT ACCOUNT MADE 
              PERMANENT.

    Subsection (c)(1)(A) of section 224 of the Railroad Retirement 
Solvency Act of 1983 (relating to section 72(r) revenue increase 
transferred to certain railroad accounts) is amended by striking ``with 
respect to benefits received before October 1, 1992''.

SEC. 14173. TEMPORARY EXTENSION OF DEDUCTION FOR HEALTH INSURANCE COSTS 
              OF SELF-EMPLOYED INDIVIDUALS.

    (a) In General.--
            (1) Extension.--Paragraph (6) of section 162(l) (relating 
        to special rules for health insurance costs of self-employed 
        individuals) is amended by striking ``June 30, 1992'' and 
        inserting ``December 31, 1993''.
            (2) Conforming amendment.--Paragraph (2) of section 110(a) 
        of the Tax Extension Act of 1991 is hereby repealed.
            (3) Effective date.--The amendments made by this subsection 
        shall apply to taxable years ending after June 30, 1992.
    (b) Determination of Eligibility for Employer-Sponsored Health 
Plan.--
            (1) In general.--Paragraph (2)(B) of section 162(l) is 
        amended to read as follows:
                    ``(B) Other coverage.--Paragraph (1) shall not 
                apply to any taxpayer for any calendar month for which 
                the taxpayer is eligible to participate in any 
                subsidized health plan maintained by any employer of 
                the taxpayer or of the spouse of the taxpayer.''
            (2) Effective date.--The amendment made by paragraph (1) 
        shall apply to taxable years beginning after December 31, 1992.

                     Subtitle B--Revenue Increases

                PART I--PROVISIONS AFFECTING INDIVIDUALS

                       Subpart A--Rate Increases

SEC. 14201. INCREASE IN TOP MARGINAL RATE UNDER SECTION 1.

    (a) General Rule.--Section 1 (relating to tax imposed) is amended 
by striking subsections (a) through (e) and inserting the following:
    ``(a) Married Individuals Filing Joint Returns and Surviving 
Spouses.--There is hereby imposed on the taxable income of--
            ``(1) every married individual (as defined in section 7703) 
        who makes a single return jointly with his spouse under section 
        6013, and
            ``(2) every surviving spouse (as defined in section 2(a)),
a tax determined in accordance with the following table:

``If taxable income is:             The tax is:
    Not over $36,900...............
                                        15% of taxable income.
    Over $36,900 but not over 
        $89,150.
                                        $5,535, plus 28% of the excess 
                                                over $36,900.
    Over $89,150 but not over 
        $140,000.
                                        $20,165, plus 31% of the excess 
                                                over $89,150.
    Over $140,000..................
                                        $35,928.50, plus 36% of the 
                                                excess over $140,000.
    ``(b) Heads of Households.--There is hereby imposed on the taxable 
income of every head of a household (as defined in section 2(b)) a tax 
determined in accordance with the following table:

``If taxable income is:             The tax is:
    Not over $29,600...............
                                        15% of taxable income.
    Over $29,600 but not over 
        $76,400.
                                        $4,440, plus 28% of the excess 
                                                over $29,600.
    Over $76,400 but not over 
        $127,500.
                                        $17,544, plus 31% of the excess 
                                                over $76,400.
    Over $127,500..................
                                        $33,385, plus 36% of the excess 
                                                over $127,500.
    ``(c) Unmarried Individuals (Other Than Surviving Spouses and Heads 
of Households).--There is hereby imposed on the taxable income of every 
individual (other than a surviving spouse as defined in section 2(a) or 
the head of a household as defined in section 2(b)) who is not a 
married individual (as defined in section 7703) a tax determined in 
accordance with the following table:

``If taxable income is:             The tax is:
    Not over $22,100...............
                                        15% of taxable income.
    Over $22,100 but not over 
        $53,500.
                                        $3,315, plus 28% of the excess 
                                                over $22,100.
    Over $53,500 but not over 
        $115,000.
                                        $12,107, plus 31% of the excess 
                                                over $53,500.
    Over $115,000..................
                                        $31,172, plus 36% of the excess 
                                                over $115,000.
    ``(d) Married Individuals Filing Separate Returns.--There is hereby 
imposed on the taxable income of every married individual (as defined 
in section 7703) who does not make a single return jointly with his 
spouse under section 6013, a tax determined in accordance with the 
following table:

``If taxable income is:             The tax is:
    Not over $18,450...............
                                        15% of taxable income.
    Over $18,450 but not over 
        $44,575.
                                        $2,767.50, plus 28% of the 
                                                excess over $18,450.
    Over $44,575 but not over 
        $70,000.
                                        $10,082.50, plus 31% of the 
                                                excess over $44,575.
    Over $70,000...................
                                        $17,964.25, plus 36% of the 
                                                excess over $70,000.

    ``(e) Estates and Trusts.--There is hereby imposed on the taxable 
income of--
            ``(1) every estate, and
            ``(2) every trust,
taxable under this subsection a tax determined in accordance with the 
following table:

``If taxable income is:             The tax is:
    Not over $1,500................
                                        15% of taxable income.
    Over $1,500 but not over $3,500
                                        $225, plus 28% of the excess 
                                                over $1,500.
    Over $3,500 but not over $5,500
                                        $785, plus 31% of the excess 
                                                over $3,500.
    Over $5,500....................
                                        $1,405, plus 36% of the excess 
                                                over $5,500.''
    (b) Conforming Amendments.--
            (1) Section 531 is amended by striking ``28 percent'' and 
        inserting ``36 percent''.
            (2) Section 541 is amended by striking ``28 percent'' and 
        inserting ``36 percent''.
            (3)(A) Subsection (f) of section 1 is amended--
                    (i) by striking ``1990'' in paragraph (1) and 
                inserting ``1993'', and
                    (ii) by striking ``1989'' in paragraph (3)(B) and 
                inserting ``1992''.
            (B) Subsection (f) of section 1 is amended by adding at the 
        end thereof the following new paragraph:
            ``(7) Special rule for certain brackets.--
                    ``(A) Calendar year 1994.--In prescribing the 
                tables under paragraph (1) which apply with respect to 
                taxable years beginning in calendar year 1994, the 
                Secretary shall make no adjustment to the dollar 
                amounts at which the 36 percent rate bracket begins or 
                at which the 39.6 percent rate begins under any table 
                contained in subsection (a), (b), (c), (d), or (e).
                    ``(B) Later calendar years.--In prescribing tables 
                under paragraph (1) which apply with respect to taxable 
                years beginning in a calendar year after 1994, the 
                cost-of-living adjustment used in making adjustments to 
                the dollar amounts referred to in subparagraph (A) 
                shall be determined under paragraph (3) by substituting 
                `1993' for `1992'.''
            (C) Subparagraph (C) of section 41(e)(5) is amended by 
        striking ``1989'' each place it appears and inserting ``1992''.
            (D) Subparagraph (B) of section 63(c)(4) is amended by 
        striking ``1989'' and inserting ``1992''.
            (E) Subparagraph (B) of section 68(b)(2) is amended by 
        striking ``1989'' and inserting ``1992''.
            (F) Subparagraph (B) of section 132(f)(6) is amended by 
        striking ``, determined by substituting'' and all that follows 
        down through the period at the end thereof and inserting a 
        period.
            (G) Subparagraphs (A)(ii) and (B)(ii) of section 151(d)(4) 
        are each amended by striking ``1989'' and inserting ``1992''.
            (H) Clause (ii) of section 513(h)(2)(C) is amended by 
        striking ``1989'' and inserting ``1992''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1992.

SEC. 14202. SURTAX ON HIGH-INCOME TAXPAYERS.

    (a) General Rule.--
            (1) Subsection (a) of section 1 (as amended by section 
        14201) is amended by striking the last item in the table 
        contained therein and inserting the following:

    Over $140,000 but not over 
        $250,000.
                                        $35,928.50, plus 36% of the 
                                                excess over $140,000.
    Over $250,000..................
                                        $75,528.50, plus 39.6% of the 
                                                excess over $250,000.''
            (2) Subsection (b) of section 1 (as so amended) is amended 
        by striking the last item in the table contained therein and 
        inserting the following:

    Over $127,500 but not over 
        $250,000.
                                        $33,385, plus 36% of the excess 
                                                over $127,500.
    Over $250,000..................
                                        $77,485, plus 39.6% of the 
                                                excess over $250,000.''
            (3) Subsection (c) of section 1 (as so amended) is amended 
        by striking the last item in the table contained therein and 
        inserting the following:

    Over $115,000 but not over 
        $250,000.
                                        $31,172, plus 36% of the excess 
                                                over $115,000.
    Over $250,000..................
                                        $79,772, plus 39.6% of the 
                                                excess over $250,000.''
            (4) Subsection (d) of section 1 (as so amended) is amended 
        by striking the last item in the table contained therein and 
        inserting the following:

    Over $70,000 but not over 
        $125,000.
                                        $17,964.25, plus 36% of the 
                                                excess over $70,000.
    Over $125,000..................
                                        $37,764.25, plus 39.6% of the 
                                                excess over $125,000.''
            (5) Subsection (e) of section 1 (as so amended) is amended 
        by striking the last item in the table contained therein and 
        inserting the following:

    Over $5,500 but not over $7,500
                                        $1,405, plus 36% of the excess 
                                                over $5,500.
    Over $7,500....................
                                        $2,125, plus 39.6% of the 
                                                excess over $7,500.''
    (b) Technical Amendment.--Sections 531 and 541 (as amended by 
section 14201) are each amended by striking ``36 percent'' and 
inserting ``39.6 percent''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1992.

SEC. 14203. MODIFICATIONS TO ALTERNATIVE MINIMUM TAX RATES AND 
              EXEMPTION AMOUNTS.

    (a) Increase in Rate.--Paragraph (1) of section 55(b) (defining 
tentative minimum tax) is amended to read as follows:
            ``(1) Amount of tentative tax.--
                    ``(A) Noncorporate taxpayers.--
                            ``(i) In general.--In the case of a 
                        taxpayer other than a corporation, the 
                        tentative minimum tax for the taxable year is 
                        the sum of--
                                    ``(I) 26 percent of so much of the 
                                taxable excess as does not exceed 
                                $175,000, plus
                                    ``(II) 28 percent of so much of the 
                                taxable excess as exceeds $175,000.
                        The amount determined under the preceding 
                        sentence shall be reduced by the alternative 
                        minimum tax foreign tax credit for the taxable 
                        year.
                            ``(ii) Taxable excess.--For purposes of 
                        clause (i), the term `taxable excess' means so 
                        much of the alternative minimum taxable income 
                        for the taxable year as exceeds the exemption 
                        amount.
                            ``(iii) Married individual filing separate 
                        return.--In the case of a married individual 
                        filing a separate return, clause (i) shall be 
                        applied by substituting `$87,500' for 
                        `$175,000' each place it appears. For purposes 
                        of the preceding sentence, marital status shall 
                        be determined under section 7703.
                    ``(B) Corporations.--In the case of a corporation, 
                the tentative minimum tax for the taxable year is--
                            ``(i) 20 percent of so much of the 
                        alternative minimum taxable income for the 
                        taxable year as exceeds the exemption amount, 
                        reduced by
                            ``(ii) the alternative minimum tax foreign 
                        tax credit for the taxable year.''
    (b) Increase in Exemption Amounts.--Paragraph (1) of section 55(d) 
(defining exemption amount) is amended--
            (1) by striking ``$40,000'' in subparagraph (A) and 
        inserting ``$45,000'',
            (2) by striking ``$30,000'' in subparagraph (B) and 
        inserting ``$33,750'', and
            (3) by striking ``$20,000'' in subparagraph (C) and 
        inserting ``$22,500''.
    (c) Conforming Amendments.--
            (1) The last sentence of section 55(d)(3) is amended by 
        striking ``$155,000 or (ii) $20,000'' and inserting ``$165,000 
        or (ii) $22,500''.
            (2)(A) Subparagraph (A) of section 897(a)(2) is amended by 
        striking ``the amount determined under section 55(b)(1)(A) 
        shall not be less than 21 percent of'' and inserting ``the 
        taxable excess for purposes of section 55(b)(1)(A) shall not be 
        less than''.
            (B) The heading for paragraph (2) of section 897(a) is 
        amended by striking ``21-Percent''.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1992.

SEC. 14204. OVERALL LIMITATION ON ITEMIZED DEDUCTIONS FOR HIGH-INCOME 
              TAXPAYERS MADE PERMANENT.

    Subsection (f) of section 68 (relating to overall limitation on 
itemized deductions) is hereby repealed.

SEC. 14205. PHASEOUT OF PERSONAL EXEMPTION OF HIGH-INCOME TAXPAYERS 
              MADE PERMANENT.

    Section 151(d)(3) (relating to phaseout of personal exemption) is 
amended by striking subparagraph (E).

SEC. 14206. PROVISIONS TO PREVENT CONVERSION OF ORDINARY INCOME TO 
              CAPITAL GAIN.

    (a) Interest Embedded in Financial Transactions.--
            (1) In general.--Part IV of subchapter P of chapter 1 
        (relating to special rules for determining capital gains and 
        losses) is amended by adding at the end thereof the following 
        new section:

``SEC. 1258. RECHARACTERIZATION OF GAIN FROM CERTAIN FINANCIAL 
              TRANSACTIONS.

    ``(a) General Rule.--In the case of any gain--
            ``(1) which (but for this section) would be treated as gain 
        from the sale or exchange of a capital asset, and
            ``(2) which is recognized on the disposition of any 
        property which was held as part of a conversion transaction,
such gain (to the extent such gain does not exceed the applicable 
imputed income amount) shall be treated as ordinary income.
    ``(b) Applicable Imputed Income Amount.--For purposes of subsection 
(a), the term `applicable imputed income amount' means, with respect to 
any disposition referred to in subsection (a), an amount equal to--
            ``(1) the amount of interest which would have accrued on 
        the taxpayer's net investment in the conversion transaction for 
        the period ending on the date of such disposition (or, if 
        earlier, the date on which the requirements of subsection (c) 
        ceased to be satisfied) at a rate equal to 120 percent of the 
        applicable rate, reduced by
            ``(2) the amount treated as ordinary income under 
        subsection (a) with respect to any prior disposition of 
        property which was held as a part of such transaction.
The Secretary shall by regulations provide for such reductions in the 
applicable imputed income amount as may be appropriate by reason of 
amounts capitalized under section 263(g), ordinary income received, or 
otherwise.
    ``(c) Conversion Transaction.--For purposes of this section, the 
term `conversion transaction' means any of the following where 
substantially all of the taxpayer's expected return from the 
transaction is attributable to the time value of the taxpayer's net 
investment in such transaction:
            ``(1) The holding of any property (whether or not actively 
        traded), and the entering into a contract to sell such property 
        (or substantially identical property) at a price determined in 
        accordance with such contract, but only if such property was 
        acquired and such contract was entered into on a substantially 
        contemporaneous basis.
            ``(2) Any applicable straddle.
            ``(3) Any other transaction which is marketed or sold as 
        producing capital gains.
            ``(4) Any other transaction specified in regulations 
        prescribed by the Secretary.
    ``(d) Definitions and Special Rules.--For purposes of this 
section--
            ``(1) Applicable straddle.--The term `applicable straddle' 
        means any straddle (within the meaning of section 1092(c)); 
        except that the term `personal property' shall include stock.
            ``(2) Applicable rate.--The term `applicable rate' means--
                    ``(A) the applicable Federal rate determined under 
                section 1274(d) (compounded semiannually) as if the 
                conversion transaction were a debt instrument, or
                    ``(B) if the term of the conversion transaction is 
                indefinite, the Federal short-term rates in effect 
                under section 6621(b) during the period of the 
                conversion transaction (compounded daily).
            ``(3) Treatment of property with built-in loss.--
                    ``(A) In general.--If any property with a built-in 
                loss becomes part of a conversion transaction--
                            ``(i) for purposes of applying this 
                        subtitle to such property for periods after 
                        such property becomes part of such transaction, 
                        the adjusted basis of such property shall be 
                        its fair market value as of the time it became 
                        part of such transaction, except that
                            ``(ii) upon the disposition of such 
                        property in a transaction in which gain or loss 
                        is recognized, such built-in loss shall be 
                        recognized and shall have a character 
                        determined without regard to this section.
                    ``(B) Built-in loss.--For purposes of subparagraph 
                (A), the term `built-in loss' means the excess (if any) 
                of the adjusted basis of any property over its fair 
                market value (determined as of the date on which such 
                property became part of such transaction).
            ``(4) Property taken into account at fair market value.--In 
        determining the taxpayer's net investment in any conversion 
        transaction, there shall be included the fair market value of 
        any property which becomes part of such transaction (determined 
        as of the date on which such property became part of such 
        transaction).''
            (2) Clerical amendment.--The table of sections for part IV 
        of subchapter P of chapter 1 is amended by adding at the end 
        thereof the following new item:

                              ``Sec. 1258. Recharacterization of gain 
                                        from certain financial 
                                        transactions.''
            (3) Effective date.--The amendments made by this section 
        shall apply to conversion transactions entered into after April 
        30, 1993.
    (b) Repeal of Certain Exceptions to Market Discount Rules.--
            (1) Market discount bonds issued on or before july 18, 
        1984.--The following provisions are hereby repealed:
                    (A) Section 1276(e).
                    (B) Section 1277(d).
            (2) Tax-exempt obligations.--
                    (A) In general.--Paragraph (1) of section 1278(a) 
                (defining market discount bond) is amended--
                            (i) by striking clause (ii) of subparagraph 
                        (B) and redesignating subclauses (iii) and (iv) 
                        of such subparagraph as clauses (ii) and (iii), 
                        respectively,
                            (ii) by redesignating subparagraph (C) as 
                        subparagraph (D), and
                            (iii) by inserting after subparagraph (B) 
                        the following new subparagraph:
                    ``(C) Section 1277 not applicable to tax-exempt 
                obligations.--For purposes of section 1277, the term 
                `market discount bond' shall not include any tax-exempt 
                obligation (as defined in section 1275(a)(3)).''
                    (B) Conforming amendment.--Sections 1276(a)(4) and 
                1278(b)(1) are each amended by striking ``sections 
                871(a)'' and inserting ``sections 103, 871(a),''.
            (3) Effective date.--The amendments made by this section 
        shall apply to obligations purchased (within the meaning of 
        section 1272(d)(1) of the Internal Revenue Code of 1986) after 
        April 30, 1993.
    (c) Treatment of Stripped Preferred Stock.--
            (1) In general.--Section 305 is amended by redesignating 
        subsection (e) as subsection (f) and by inserting after 
        subsection (d) the following new subsection:
    ``(e) Treatment of Purchaser of Stripped Preferred Stock.--
            ``(1) In general.--If any person purchases after April 30, 
        1993 any stripped preferred stock, then such person, while 
        holding such stock, shall include in gross income amounts equal 
        to the amounts which would have been so includible if such 
        stripped preferred stock were a bond issued on the purchase 
        date and having original issue discount equal to the excess, if 
        any, of--
                    ``(A) the redemption price for such stock, over
                    ``(B) the price at which such person purchased such 
                stock.
        The preceding sentence shall also apply in the case of any 
        person whose basis in such stock is determined by reference to 
        the basis in the hands of such purchaser.
            ``(2) Basis adjustments.--Appropriate adjustments to basis 
        shall be made for amounts includible in gross income under 
        paragraph (1).
            ``(3) Tax treatment of person stripping stock.--If any 
        person strips the rights to 1 or more dividends from any stock 
        described in paragraph (5)(B) and after April 30, 1993 disposes 
        of such dividend rights, for purposes of paragraph (1), such 
        person shall be treated as having purchased the stripped 
        preferred stock on the date of such disposition for a purchase 
        price equal to such person's adjusted basis in such stripped 
        preferred stock.
            ``(4) Amounts treated as ordinary income.--Any amount 
        included in gross income under paragraph (1) shall be treated 
        as ordinary income.
            ``(5) Stripped preferred stock.--For purposes of this 
        subsection--
                    ``(A) In general.--The term `stripped preferred 
                stock' means any stock described in subparagraph (B) if 
                there has been a separation in ownership between such 
                stock and any dividend on such stock which has not 
                become payable.
                    ``(B) Description of stock.--Stock is described in 
                this subsection if such stock--
                            ``(i) is limited and preferred as to 
                        dividends and does not participate in corporate 
                        growth to any significant extent, and
                            ``(ii) has a fixed redemption price.
            ``(6) Purchase.--For purposes of this subsection, the term 
        `purchase' means--
                    ``(A) any acquisition of stock, where
                    ``(B) the basis of such stock is not determined in 
                whole or in part by the reference to the adjusted basis 
                of such stock in the hands of the person from whom 
                acquired.''
            (2) Coordination with section 167(e).--Paragraph (2) of 
        section 167(e) is amended to read as follows:
            ``(2) Coordination with other provisions.--
                    ``(A) Section 273.--This subsection shall not apply 
                to any term interest to which section 273 applies.
                    ``(B) Section 305(e).--This subsection shall not 
                apply to the holder of the dividend rights which were 
                separated from any stripped preferred stock to which 
                section 305(e)(1) applies.''
            (3) Effective date.--The amendments made by this subsection 
        shall take effect on April 30, 1993.
    (d) Treatment of Capital Gain Under Limitation on Investment 
Interest.--
            (1) In general.--Subparagraph (B) of section 163(d)(4) 
        (defining investment income) is amended to read as follows:
                    ``(B) Investment income.--The term `investment 
                income' means the sum of--
                            ``(i) gross income from property held for 
                        investment (other than any gain taken into 
                        account under clause (ii)(I)),
                            ``(ii) the excess (if any) of--
                                    ``(I) the net gain attributable to 
                                the disposition of property held for 
                                investment, over
                                    ``(II) the net capital gain 
                                determined by only taking into account 
                                gains and losses from dispositions of 
                                property held for investment, plus
                            ``(iii) so much of the net capital gain 
                        referred to in clause (ii)(II) (or, if lesser, 
                        the net gain referred to in clause (ii)(I)) as 
                        the taxpayer elects to take into account under 
                        this clause.''
            (2) Coordination with special capital gains rate.--
        Subsection (h) of section 1 is amended by adding at the end 
        thereof the following new sentence:
``For purposes of the preceding sentence, the net capital gain for any 
taxable year shall be reduced (but not below zero) by the amount which 
the taxpayer elects to take into account as investment income for the 
taxable year under section 163(d)(4)(B)(iii).''
            (3) Effective date.--The amendments made by this subsection 
        shall apply to taxable years beginning after December 31, 1992.
    (e) Treatment of Certain Appreciated Inventory.--
            (1) Paragraph (1) of section 751(d) is amended to read as 
        follows:
            ``(1) Substantial appreciation.--
                    ``(A) In general.--Inventory items of the 
                partnership shall be considered to have appreciated 
                substantially in value if their fair market value 
                exceeds 120 percent of the adjusted basis to the 
                partnership of such property.
                    ``(B) Certain property excluded.--For purposes of 
                subparagraph (A), there shall be excluded any inventory 
                property if a principal purpose for acquiring such 
                property was to avoid the provisions of this section 
                relating to inventory items.''
            (2) Effective date.--The amendment made by paragraph (1) 
        shall apply to sales, exchanges, and distributions after April 
        30, 1993.

                      Subpart B--Other Provisions

SEC. 14207. REPEAL OF LIMITATION ON AMOUNT OF WAGES SUBJECT TO HEALTH 
              INSURANCE EMPLOYMENT TAX.

    (a) Hospital Insurance Tax.--
            (1) Paragraph (1) of section 3121(a) (defining wages) is 
        amended--
                    (A) by inserting ``in the case of the taxes imposed 
                by sections 3101(a) and 3111(a)'' after ``(1)'',
                    (B) by striking ``applicable contribution base (as 
                determined under subsection (x))'' each place it 
                appears and inserting ``contribution and benefit base 
                (as determined under section 230 of the Social Security 
                Act)'', and
                    (C) by striking ``such applicable contribution 
                base'' and inserting ``such contribution and benefit 
                base''.
            (2) Section 3121 is amended by striking subsection (x).
    (b) Self-Employment Tax.--
            (1) Subsection (b) of section 1402 is amended--
                    (A) by striking ``that part of the net'' in 
                paragraph (1) and inserting ``in the case of the tax 
                imposed by section 1401(a), that part of the net'',
                    (B) by striking ``applicable contribution base (as 
                determined under subsection (k))'' in paragraph (1) and 
                inserting ``contribution and benefit base (as 
                determined under section 230 of the Social Security 
                Act)'',
                    (C) by inserting ``and'' after ``section 
                3121(b),'', and
                    (D) by striking ``and (C) includes'' and all that 
                follows through ``3111(b)''.
            (2) Section 1402 is amended by striking subsection (k).
    (c) Railroad Retirement Tax.--
            (1) Subparagraph (A) of section 3231(e)(2) is amended by 
        adding at the end thereof the following new clause:
                            ``(iii) Hospital insurance taxes.--Clause 
                        (i) shall not apply to--
                                    ``(I) so much of the rate 
                                applicable under section 3201(a) or 
                                3221(a) as does not exceed the rate of 
                                tax in effect under section 3101(b), 
                                and
                                    ``(II) so much of the rate 
                                applicable under section 3211(a)(1) as 
                                does not exceed the rate of tax in 
                                effect under section 1402(b).''
            (2) Clause (i) of section 3231(e)(2)(B) is amended to read 
        as follows:
                            ``(i) Tier 1 taxes.--Except as provided in 
                        clause (ii), the term `applicable base' means 
                        for any calendar year the contribution and 
                        benefit base determined under section 230 of 
                        the Social Security Act for such calendar 
                        year.''
    (d) Technical Amendments.--
            (1) Paragraph (1) of section 6413(c) is amended by striking 
        ``section 3101 or section 3201'' and inserting ``section 
        3101(a) or section 3201(a) (to the extent the rate applicable 
        under section 3201(a) as does not exceed the rate of tax in 
        effect under section 3101(a))''.
            (2) Subparagraphs (B) and (C) of section 6413(c)(2) are 
        each amended by striking ``section 3101'' each place it appears 
        and inserting ``section 3101(a)''.
            (3) Subsection (c) of section 6413 is amended by striking 
        paragraph (3).
            (4) Sections 3122 and 3125 of such Code are each amended by 
        striking ``applicable contribution base limitation'' and 
        inserting ``contribution and benefit base limitation''.
    (e) Effective Date.--The amendments made by this section shall 
apply to 1994 and later calendar years.

SEC. 14208. TOP ESTATE AND GIFT TAX RATES MADE PERMANENT.

    (a) General Rule.--The table contained in paragraph (1) of section 
2001(c) is amended by striking the last item and inserting the 
following new items:
            

    ``Over $2,500,000 but not over 
        $3,000,000.
                                        $1,025,800, plus 53% of the 
                                                excess over $2,500,000.
    Over $3,000,000................
                                        $1,290,800, plus 55% of the 
                                                excess over 
                                                $3,000,000.''
    (b) Conforming Amendments.--
            (1) Subsection (c) of section 2001 is amended by striking 
        paragraph (2) and by redesignating paragraph (3) as paragraph 
        (2).
            (2) Paragraph (2) of section 2001(c), as redesignated by 
        paragraph (1), is amended by striking ``($18,340,000 in the 
        case of decedents dying, and gifts made, after 1992)''.
            (3) The last sentence of section 2101(b) is amended by 
        striking ``section 2001(c)(3)'' and inserting ``section 
        2001(c)(2)''.
    (c) Effective Date.--The amendments made by this section shall 
apply in the case of decedents dying, and gifts made, after December 
31, 1992.

SEC. 14209. REDUCTION IN DEDUCTIBLE PORTION OF BUSINESS MEALS AND 
              ENTERTAINMENT.

    (a) General Rule.--Paragraph (1) of section 274(n) (relating to 
only 80 percent of meal and entertainment expenses allowed as 
deduction) is amended by striking ``80 percent'' and inserting ``50 
percent''.
    (b) Conforming Amendment.--The subsection heading for section 
274(n) is amended by striking ``80'' and inserting ``50''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1993.

SEC. 14210. ELIMINATION OF DEDUCTION FOR CLUB MEMBERSHIP FEES.

    (a) In General.--Subsection (a) of section 274 (relating to 
disallowance of certain entertainment, etc., expenses) is amended by 
adding at the end thereof the following new paragraph:
            ``(3) Denial of deduction for club dues.--Notwithstanding 
        the preceding provisions of this subsection, no deduction shall 
        be allowed under this chapter for amounts paid or incurred for 
        membership in any club organized for business, pleasure, 
        recreation, or other social purpose. The preceding sentence 
        shall not apply in the case of an airline or hotel club.''
    (b) Exception for Employee Recreational Expenses Not To Apply.--
Paragraph (4) of section 274(e) is amended by adding at the end thereof 
the following: ``This paragraph shall not apply for purposes of 
subsection (a)(3).''
    (c) Effective Date.--The amendments made by this section shall 
apply to amounts paid or incurred after December 31, 1993.

SEC. 14211. DISALLOWANCE OF DEDUCTION FOR CERTAIN EMPLOYEE REMUNERATION 
              IN EXCESS OF $1,000,000.

    (a) General Rule.--Section 162 (relating to trade or business 
expenses) is amended by redesignating subsection (m) as subsection (n) 
and by inserting after subsection (l) the following new subsection:
    ``(m) Certain Excessive Employee Remuneration.--
            ``(1) In general.--In the case of any publicly held 
        corporation, no deduction shall be allowed under this chapter 
        for applicable employee remuneration with respect to any 
        covered employee to the extent that the amount of such 
        remuneration for the taxable year with respect to such employee 
        exceeds $1,000,000.
            ``(2) Publicly held corporation.--For purposes of this 
        subsection, the term `publicly held corporation' means any 
        corporation issuing any class of common equity securities 
        required to be registered under section 12 of the Securities 
        Exchange Act of 1934.
            ``(3) Covered employee.--For purposes of this subsection, 
        the term `covered employee' means any employee of the taxpayer 
        if--
                    ``(A) as of the close of the taxable year, such 
                employee is the chief executive officer of the taxpayer 
                or an individual acting in such a capacity, or
                    ``(B) the total compensation for the taxable year 
                of such employee is required to be reported to 
                shareholders under the Securities Exchange Act of 1934 
                by reason of such employee being among the 4 highest 
                compensated officers for the taxable year (other than 
                the chief executive officer).
            ``(4) Applicable employee remuneration.--For purposes of 
        this subsection--
                    ``(A) In general.--Except as otherwise provided in 
                this paragraph, the term `applicable employee 
                remuneration' means, with respect to any covered 
                employee for any taxable year, the aggregate amount 
                allowable as a deduction under this chapter for such 
                taxable year (determined without regard to this 
                subsection) for remuneration for services performed by 
                such employee (whether or not during the taxable year).
                    ``(B) Exception for remuneration payable on 
                commission basis.--The term `applicable employee 
                remuneration' shall not include any remuneration 
                payable on a commission basis solely on account of 
                income generated directly by the individual performance 
                of the individual to whom such remuneration is payable.
                    ``(C) Other performance-based compensation.--The 
                term `applicable employee remuneration' shall not 
                include any remuneration payable solely on account of 
                the attainment of one or more performance goals but 
                only if--
                            ``(i) the performance goals are determined 
                        by a compensation committee of the board of 
                        directors of the taxpayer which is comprised 
                        solely of 2 or more independent directors,
                            ``(ii) the material terms under which the 
                        remuneration is to be paid, including the 
                        performance goals, are disclosed to 
                        shareholders and approved by a majority of the 
                        vote in a separate shareholder vote before the 
                        payment of such remuneration, and
                            ``(iii) before any payment of such 
                        remuneration, the compensation committee 
                        referred to in clause (i) certifies that the 
                        performance goals and any other material terms 
                        were in fact satisfied.
                    ``(D) Exception for existing binding contracts.--
                The term `applicable employee remuneration' shall not 
                include any remuneration payable under a written 
                binding contract which was in effect on February 17, 
                1993, and which was not modified thereafter in any 
                material respect before such remuneration is paid.
                    ``(E) Remuneration.--For purposes of this 
                paragraph, the term `remuneration' includes any 
                remuneration (including benefits) in any medium other 
                than cash, but shall not include--
                            ``(i) any payment referred to in so much of 
                        section 3121(a)(5) as precedes subparagraph (E) 
                        thereof, and
                            ``(ii) any benefit provided to or on behalf 
                        of an employee if at the time such benefit is 
                        provided it is reasonable to believe that the 
                        employee will be able to exclude such benefit 
                        from gross income under this chapter.
                For purposes of clause (i), section 3121(a)(5) shall be 
                applied without regard to section 3121(v)(1).
                    ``(F) Coordination with disallowed golden parachute 
                payments.--The dollar limitation contained in paragraph 
                (1) shall be reduced (but not below zero) by the amount 
                (if any) which would have been included in the 
                applicable employee remuneration of the covered 
                employee for the taxable year but for being disallowed 
                under section 280G.''
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to amounts which would otherwise be deductible for taxable years 
beginning on or after January 1, 1994.

SEC. 14212. REDUCTION IN COMPENSATION TAKEN INTO ACCOUNT IN DETERMINING 
              CONTRIBUTIONS AND BENEFITS UNDER QUALIFIED RETIREMENT 
              PLANS.

    (a) In General.--Sections 401(a)(17), 404(l), and 505(b)(7) are 
each amended--
            (1) by striking ``$200,000'' in the first sentence and 
        inserting ``$150,000'', and
            (2) by striking the second sentence and inserting ``In the 
        case of years beginning after 1994, the Secretary shall adjust 
        the $150,000 amount at the same time and in the same manner as 
        under section 415(d), except that the base period for purposes 
        of section 415(d)(1)(A) shall be the calendar quarter beginning 
        October 1, 1994.''
    (b) Simplified Employee Pensions.--
            (1) In general.--Paragraphs (3)(C) and (6)(D)(ii) of 
        section 408(k) are each amended by striking ``$200,000'' and 
        inserting ``$150,000''.
            (2) Cost-of-living.--Paragraph (8) of section 408(k) is 
        amended to read as follows:
            ``(8) Cost-of-living adjustment.--The Secretary shall 
        adjust the $300 amount in paragraph (2)(C) at the same time and 
        in the same manner as under section 415(d) and shall adjust the 
        $150,000 amount in paragraphs (3)(C) and (6)(D)(ii) at the same 
        time and by the same amount as the adjustment to the $150,000 
        amount in section 401(a)(17).''
    (c) Conforming Amendment.--The heading for section 505(b)(7) is 
amended by striking ``$200,000''.
    (d) Effective Date.--The amendments made by this section shall 
apply to benefits accruing in plan years beginning after December 31, 
1993.

SEC. 14213. MODIFICATION TO DEDUCTION FOR CERTAIN MOVING EXPENSES.

    (a) Repeal of Deduction for Qualified Residence Sale, Etc., 
Expenses.--
            (1) In general.--Paragraph (1) of section 217(b) (defining 
        moving expenses) is amended by inserting ``or'' at the end of 
        subparagraph (C), by striking ``, or'' at the end of 
        subparagraph (D) and inserting a period, and by striking 
        subparagraph (E).
            (2) Conforming amendments.--
                    (A) Subsection (b) of section 217 is amended by 
                striking paragraph (2) and redesignating paragraph (3) 
                as paragraph (2).
                    (B) Paragraph (2) of section 217(b) (as 
                redesignated by subparagraph (A)) is amended--
                            (i) by striking the last sentence of 
                        subparagraph (A), and
                            (ii) by striking ``, and by'' in 
                        subparagraph (B) and all that follows down 
                        through the period at the end of subparagraph 
                        (B) and inserting a period.
                    (C) Paragraph (1) of section 217(h) is amended by 
                striking subparagraphs (B) and (C) and inserting the 
                following:
                    ``(B) subsection (b)(2)(A) shall be applied by 
                substituting `$4,500' for `$1,500', and
                    ``(C) subsection (b)(2)(B) shall be applied as if 
                the last sentence of such subsection read as follows: 
                `In the case of a husband and wife filing separate 
                returns, subparagraph (A) shall be applied by 
                substituting ``$2,250'' for ``$4,500''.' ''
                    (D) Section 217 is amended by striking subsection 
                (e).
    (b) Deduction Disallowed for Meal Expenses.--Paragraph (1) of 
section 217(b) is amended--
            (1) by striking ``meals and lodging'' in subparagraphs (B), 
        (C) and (D) and inserting ``lodging'', and
            (2) by adding at the end thereof the following new 
        sentence:
        ``Such term shall not include any expenses for meals.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to expenses incurred after December 31, 1993.

SEC. 14214. SIMPLIFICATION OF INDIVIDUAL ESTIMATED TAX SAFE HARBOR 
              BASED ON LAST YEAR'S TAX.

    (a) In General.--Paragraph (1) of section 6654(d) (relating to 
amount of required estimated tax installments) is amended by striking 
subparagraphs (C), (D), (E), and (F) and by inserting the following new 
subparagraph:
                    ``(C) Limitation on use of preceding year's tax.--
                            ``(i) In general.--If the adjusted gross 
                        income shown on the return of the individual 
                        for the preceding taxable year exceeds 
                        $150,000, clause (ii) of subparagraph (B) shall 
                        be applied by substituting `110 percent' for 
                        `100 percent'.
                            ``(ii) Separate returns.--In the case of a 
                        married individual (within the meaning of 
                        section 7703) who files a separate return for 
                        the taxable year for which the amount of the 
                        installment is being determined, clause (i) 
                        shall be applied by substituting `$75,000' for 
                        `$150,000'.
                            ``(iii) Special rule.--In the case of an 
                        estate or trust, adjusted gross income shall be 
                        determined as provided in section 67(e).''
    (b) Conforming Amendments.--
            (1) Subparagraph (A) of section 6654(j)(3) is amended by 
        striking ``and subsection (d)(1)(C)(iii) shall not apply'',
            (2) Paragraph (4) of section 6654(l) is amended by striking 
        ``paragraphs (1)(C)(iv) and (2)(B)(i) of subsection (d)'' and 
        inserting ``subsection (d)(2)(B)(i)''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1993.

SEC. 14215. SOCIAL SECURITY AND TIER 1 RAILROAD RETIREMENT BENEFITS.

    (a) In General.--Subsections (a)(1) and (2) of section 86 (relating 
to social security and tier 1 railroad retirement benefits) are each 
amended by striking ``one-half'' and inserting ``85 percent''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to taxable years beginning after December 31, 1993.
    (c) Additional Receipts Retained in General Fund.--
            (1) Subsection (e) of section 121 of the Social Security 
        Amendments of 1983 is amended by adding at the end the 
        following new paragraph:
            ``(5) Certain increased receipts retained in general 
        fund.--In determining the amount appropriated to any payor fund 
        under paragraph (1), there shall be excluded any increase in 
        tax liability to the extent such increase is attributable to 
        the amendments made to section 86 of the Internal Revenue Code 
        of 1986 by the Revenue Reconciliation Act of 1993.''
            (2) Paragraph (4) of subsection (e) of such section 121 is 
        amended by redesignating subparagraphs (A) and (B) as 
        subparagraphs (B) and (C) and by inserting before subparagraph 
        (B) (as so redesignated) the following new subparagraph:
                    ``(A) the total aggregate increase in tax liability 
                under chapter 1 of the Internal Revenue Code of 1986 
                which is attributable to the application of sections 86 
                and 871(a)(3) of such Code,''.

                PART II--PROVISIONS AFFECTING BUSINESSES

SEC. 14221. INCREASE IN TOP MARGINAL RATE UNDER SECTION 11.

    (a) General Rule.--Paragraph (1) of section 11(b) (relating to 
amount of tax) is amended--
            (1) by striking ``and'' at the end of subparagraph (B),
            (2) by striking subparagraph (C) and inserting the 
        following:
                    ``(C) 34 percent of so much of the taxable income 
                as exceeds $75,000 but does not exceed $10,000,000, and
                    ``(D) 35 percent of so much of the taxable income 
                as exceeds $10,000,000.'', and
            (3) by adding at the end thereof the following new 
        sentence: ``In the case of a corporation which has taxable 
        income in excess of $15,000,000, the amount of the tax 
        determined under the foregoing provisions of this paragraph 
        shall be increased by an additional amount equal to the lesser 
        of (i) 3 percent of such excess, or (ii) $100,000.''.
    (b) Certain Personal Service Corporations.--Paragraph (2) of 
section 11(b) is amended by striking ``34 percent'' and inserting ``35 
percent''.
    (c) Conforming Amendments.--
            (1) Clause (iii) of section 852(b)(3)(D) is amended by 
        striking ``66 percent'' and inserting ``65 percent''.
            (2) Subsection (a) of section 1201 is amended by striking 
        ``34 percent'' each place it appears and inserting ``35 
        percent''.
            (3) Paragraphs (1) and (2) of section 1445(e) are each 
        amended by striking ``34 percent'' and inserting ``35 
        percent''.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning on or after January 1, 1993; except 
that the amendment made by subsection (c)(3) shall take effect on the 
date of the enactment of this Act.

SEC. 14222. DENIAL OF DEDUCTION FOR LOBBYING EXPENSES.

    (a) Disallowance of Deduction.--Section 162(e) (relating to 
appearances, etc., with respect to legislation) is amended to read as 
follows:
    ``(e) Denial of Deduction for Certain Lobbying and Political 
Expenditures.--
            ``(1) In general.--No deduction shall be allowed under 
        subsection (a) for any amount paid or incurred--
                    ``(A) in connection with influencing legislation,
                    ``(B) for participation in, or intervention in, any 
                political campaign on behalf of (or in opposition to) 
                any candidate for public office, or
                    ``(C) in connection with any attempt to influence 
                the general public, or segments thereof, with respect 
                to elections.
            ``(2) Application to dues.--
                    ``(A) In general.--No deduction shall be allowed 
                under subsection (a) for the portion of dues or other 
                similar amounts (paid by the taxpayer with respect to 
                an organization) which is allocable to the expenditures 
                described in paragraph (1).
                    ``(B) Allocation.--
                            ``(i) In general.--For purposes of 
                        subparagraph (A), expenditures described in 
                        paragraph (1) shall be treated as paid out of 
                        dues or other similar amounts.
                            ``(ii) Carryover of lobbying expenditures 
                        in excess of dues.--For purposes of this 
                        paragraph, if expenditures described in 
                        paragraph (1) exceed the dues or other similar 
                        amounts for any calendar year, such excess 
                        shall be treated as expenditures described in 
                        paragraph (1) which are paid or incurred by the 
                        organization during the following calendar 
                        year.
            ``(3) Influencing legislation.--For purposes of this 
        subsection--
                    ``(A) In general.--The term `influencing 
                legislation' means--
                            ``(i) any attempt to influence the general 
                        public, or segments thereof, with respect to 
                        legislation, and
                            ``(ii) any attempt to influence any 
                        legislation through communication with any 
                        member or employee of the legislative body, or 
                        with any government official or employee who 
                        may participate in the formulation of the 
                        legislation.
                    ``(B) Exception for certain technical advice.--The 
                term `influencing legislation' shall not include the 
                providing of technical advice or assistance to a 
                governmental body or to a committee or other 
                subdivision thereof in response to a specific written 
                request by such governmental entity to the taxpayer 
                which specifies the nature of the advice or assistance 
                requested.
                    ``(C) Legislation.--The term `legislation' has the 
                meaning given such term by section 4911(e)(2).
            ``(4) Exception for certain taxpayers.--In the case of any 
        taxpayer engaged in the trade or business of conducting 
        activities described in paragraph (1), paragraph (1) shall not 
        apply to expenditures of the taxpayer in conducting such 
        activities on behalf of another person (but shall apply to 
        payments by such other person to the taxpayer for conducting 
        such activities).
            ``(5) Cross reference.--

                                ``For reporting requirements related to 
this subsection, see section 6050O.''
    (b) Reporting Requirements.--
            (1) In general.--Subpart B of part III of subchapter A of 
        chapter 61 (relating to information concerning transactions 
        with other persons) is amended by adding at the end the 
        following new section:

``SEC. 6050O. RETURNS RELATING TO LOBBYING EXPENDITURES OF CERTAIN 
              ORGANIZATIONS.

    ``(a) Requirement of Reporting.--Each organization referred to in 
section 162(e)(2) shall make a return, according to the forms or 
regulations prescribed by the Secretary, setting forth the names and 
addresses of persons paying dues to the organization, the amount of the 
dues paid by such person, and the portion of such dues which is 
nondeductible under section 162(e)(2).
    ``(b) Statements To Be Furnished to Persons With Respect to Whom 
Information Is Furnished.--Any organization required to make a return 
under subsection (a) shall furnish to each person whose name is 
required to be set forth in such return a written statement showing--
            ``(1) the name and address of the organization, and
            ``(2) the dues paid by the person during the calendar year 
        and the portion of such dues which is nondeductible under 
        section 162(e)(2).
The written statement required under the preceding sentence shall be 
furnished (either in person or in a statement mailing by first-class 
mail which includes adequate notice that the statement is enclosed) to 
the persons on or before January 31 of the year following the calendar 
year for which the return under subsection (a) was made and shall be in 
such form as the Secretary may prescribe by regulations.
    ``(c) Waiver.--The Secretary may waive the reporting requirements 
of this section with respect to any organization or class of 
organizations if the Secretary determines that such reporting is not 
necessary to carry out the purposes of section 162(e).
    ``(d) Dues.--For purposes of this section, the term `dues' includes 
other similar amounts.''
            (2) Penalties.--
                    (A) Returns.--Subparagraph (A) of section 
                6724(d)(1) (defining information return) is amended by 
                striking ``or'' at the end of clause (xi), by striking 
                the period at the end of the clause (xii) relating to 
                section 4101(d) and inserting a comma, by redesignating 
                the clause (xii) relating to section 338(h)(10) as 
                clause (xiii), by striking the period at the end of 
                clause (xiii) (as so redesignated) and inserting ``, 
                or'', and by adding at the end the following new 
                clause:
                            ``(xiv) section 6050O(a) (relating to 
                        information on nondeductible lobbying 
                        expenditures).''
                    (B) Payee statements.--Paragraph (2) of section 
                6724(d) (defining payee statement) is amended by 
                striking ``or'' at the end of subparagraph (R), by 
                striking the period at the end of subparagraph (S) and 
                inserting ``, or'', and by adding at the end the 
                following new subparagraph:
                    ``(T) section 6050O(b) (relating to returns on 
                nondeductible lobbying expenditures).''
                    (C) Excessive underreporting.--Section 6721 
                (relating to failure to file correct information 
                returns) is amended by adding at the end the following 
                new subsection:
    ``(f) Penalty in Case of Excessive Underreporting on Nondeductible 
Dues.--If the aggregate amount of nondeductible dues which is reported 
on the return required to be filed under section 6050O(a) for any 
calendar year is less than 75 percent of the aggregate amount required 
to be so reported--
            ``(1) subsections (b), (c), and (d) shall not apply, and
            ``(2) the penalty imposed under subsection (a) shall be 
        equal to the product of--
                    ``(A) the amount required to be reported which was 
                not so reported, and
                    ``(B) the highest rate of tax imposed by section 11 
                for taxable years beginning in such calendar year.''
            (3) Conforming amendment.--The table of sections for 
        subpart B of part III of subchapter A of chapter 61 is amended 
        by adding at the end the following new item:

                              ``Sec. 6050O. Returns relating to 
                                        lobbying expenditures of 
                                        certain organizations.''
    (c) Effective Date.--The amendments made by this section shall 
apply to amounts paid or incurred after December 31, 1993.

SEC. 14223. MARK TO MARKET ACCOUNTING METHOD FOR SECURITIES DEALERS.

    (a) General Rule.--Subpart D of part II of subchapter E of chapter 
1 (relating to inventories) is amended by adding at the end thereof the 
following new section:

``SEC. 475. MARK TO MARKET ACCOUNTING METHOD FOR DEALERS IN SECURITIES.

    ``(a) General Rule.--Notwithstanding any other provision of this 
subpart, the following rules shall apply to securities held by a dealer 
in securities:
            ``(1) Any security which is inventory in the hands of the 
        dealer shall be included in inventory at its fair market value.
            ``(2) In the case of any security which is not inventory in 
        the hands of the dealer and which is held at the close of any 
        taxable year--
                    ``(A) the dealer shall recognize gain or loss as if 
                such security were sold for its fair market value on 
                the last business day of such taxable year, and
                    ``(B) any gain or loss shall be taken into account 
                for such taxable year.
        Proper adjustment shall be made in the amount of any gain or 
        loss subsequently realized for gain or loss taken into account 
        under the preceding sentence. The Secretary may provide by 
        regulations for the application of this paragraph at times 
        other than the times provided in this paragraph.
    ``(b) Exceptions.--
            ``(1) In general.--Subsection (a) shall not apply to--
                    ``(A) any security held for investment,
                    ``(B)(i) any security described in subsection 
                (c)(2)(C) which is acquired (including originated) by 
                the taxpayer in the ordinary course of a trade or 
                business of the taxpayer and which is not held for 
                sale, and (ii) any obligation to acquire a security 
                described in clause (i) if such obligation is entered 
                into in the ordinary course of such trade or business 
                and is not held for sale, and
                    ``(C) any security which is a hedge with respect 
                to--
                            ``(i) a security to which subsection (a) 
                        does not apply, or
                            ``(ii) a position, right to income, or a 
                        liability which is not a security in the hands 
                        of the taxpayer.
        To the extent provided in regulations, subparagraph (C) shall 
        not apply to any security held by a person in its capacity as a 
        dealer in securities.
            ``(2) Identification required.--A security shall not be 
        treated as described in subparagraph (A), (B), or (C) of 
        paragraph (1), as the case may be, unless such security is 
        clearly identified in the dealer's records as being described 
        in such subparagraph before the close of the day on which it 
        was acquired, originated, or entered into (or such other time 
        as the Secretary may by regulations prescribe).
            ``(3) Securities subsequently not exempt.--If a security 
        ceases to be described in paragraph (1) at any time after it 
        was identified as such under paragraph (2), subsection (a) 
        shall apply to any changes in value of the security occurring 
        after the cessation.
            ``(4) Special rule for property held for investment.--To 
        the extent provided in regulations, subparagraph (A) of 
        paragraph (1) shall not apply to any security described in 
        subparagraph (D) or (E) of subsection (c)(2) which is held by a 
        dealer in such securities.
    ``(c) Definitions.--For purposes of this section--
            ``(1) Dealer in securities defined.--The term `dealer in 
        securities' means a taxpayer who--
                    ``(A) regularly purchases securities from or sells 
                securities to customers in the ordinary course of a 
                trade or business; or
                    ``(B) regularly offers to enter into, assume, 
                offset, assign or otherwise terminate positions in 
                securities with customers in the ordinary course of a 
                trade or business.
            ``(2) Security defined.--The term `security' means any--
                    ``(A) share of stock in a corporation;
                    ``(B) partnership or beneficial ownership interest 
                in a widely held or publicly traded partnership or 
                trust;
                    ``(C) note, bond, debenture, or other evidence of 
                indebtedness;
                    ``(D) interest rate, currency, or equity notional 
                principal contract;
                    ``(E) evidence of an interest in, or a derivative 
                financial instrument in, any security described in 
                subparagraph (A), (B), (C), or (D), or any currency, 
                including any option, forward contract, short position, 
                and any similar financial instrument in such a security 
                or currency; and
                    ``(F) position which--
                            ``(i) is not a security described in 
                        subparagraph (A), (B), (C), (D), or (E),
                            ``(ii) is a hedge with respect to such a 
                        security, and
                            ``(iii) is clearly identified in the 
                        dealer's records as being described in this 
                        subparagraph before the close of the day on 
                        which it was acquired or entered into (or such 
                        other time as the Secretary may by regulations 
                        prescribe).
        Subparagraph (E) shall not include any contract to which 
        section 1256(a) applies.
            ``(3) Hedge.--The term `hedge' means any position which 
        reduces the dealer's risk of interest rate or price changes or 
        currency fluctuations, including any position which is 
        reasonably expected to become a hedge within 60 days after the 
        acquisition of the position.
    ``(d) Special Rules.--For purposes of this section--
            ``(1) Coordination with certain rules.--The rules of 
        sections 263(g), 263A, and 1256(a) shall not apply to 
        securities to which subsection (a) applies, and section 1091 
        shall not apply (and section 1092 shall apply) to any loss 
        recognized under subsection (a).
            ``(2) Improper identification.--If a taxpayer--
                    ``(A) identifies any security under subsection 
                (b)(2) as being described in subsection (b)(1) and such 
                security is not so described, or
                    ``(B) fails under subsection (c)(2)(F)(iii) to 
                identify any position which is described in subsection 
                (c)(2)(F) (without regard to clause (iii) thereof) at 
                the time such identification is required,
        the provisions of subsection (a) shall apply to such security 
        or position, except that any loss under this section prior to 
        the disposition of the security or position shall be recognized 
        only to the extent of gain previously recognized under this 
        section (and not previously taken into account under this 
        paragraph) with respect to such security or position.
            ``(3) Character of gain or loss.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B) or section 1236(b)--
                            ``(i) In general.--Any gain or loss with 
                        respect to a security under subsection (a)(2) 
                        shall be treated as ordinary income or loss.
                            ``(ii) Special rule for dispositions.--If--
                                    ``(I) gain or loss is recognized 
                                with respect to a security before the 
                                close of the taxable year, and
                                    ``(II) subsection (a)(2) would have 
                                applied if the security were held as of 
                                the close of the taxable year,
                        such gain or loss shall be treated as ordinary 
                        income or loss.
                    ``(B) Exception.--Subparagraph (A) shall not apply 
                to any gain or loss which is allocable to a period 
                during which--
                            ``(i) the security is described in 
                        subsection (b)(1)(C) (without regard to 
                        subsection (b)(2)),
                            ``(ii) the security is held by a person 
                        other than in connection with its activities as 
                        a dealer in securities, or
                            ``(iii) the security is improperly 
                        identified (within the meaning of subparagraph 
                        (A) or (B) of paragraph (2)).
    ``(e) Regulatory Authority.--The Secretary shall prescribe such 
regulations as may be necessary or appropriate to carry out the 
purposes of this section, including rules--
            ``(1) to prevent the use of year-end transfers, related 
        parties, or other arrangements to avoid the provisions of this 
        section, and
            ``(2) to provide for the application of this section to any 
        security which is a hedge which cannot be identified with a 
        specific security, position, right to income, or liability.''
    (b) Conforming Amendments.--
            (1) Paragraph (1) of section 988(d) is amended--
                    (A) by striking ``section 1256'' and inserting 
                ``section 475 or 1256'', and
                    (B) by striking ``1092 and 1256'' and inserting 
                ``475, 1092, and 1256''.
            (2) The table of sections for subpart D of part II of 
        subchapter E of chapter 1 is amended by adding at the end 
        thereof the following new item:

                              ``Sec. 475. Mark to market accounting 
                                        method for dealers in 
                                        securities.''

    (c) Effective Date.--
            (1) In general.--The amendments made by this section shall 
        apply to all taxable years ending on or after December 31, 
        1993.
            (2) Change in method of accounting.--In the case of any 
        taxpayer required by this section to change its method of 
        accounting for any taxable year--
                    (A) such change shall be treated as initiated by 
                the taxpayer,
                    (B) such change shall be treated as made with the 
                consent of the Secretary, and
                    (C) except as provided in paragraph (3), the net 
                amount of the adjustments required to be taken into 
                account by the taxpayer under section 481 of the 
                Internal Revenue Code of 1986 shall be taken into 
                account ratably over the 5-taxable year period 
                beginning with the first taxable year ending on or 
                after December 31, 1993.
            (3) Special rule for floor specialists and market makers.--
                    (A) In general.--If--
                            (i) a taxpayer used the last-in first-out 
                        (LIFO) method of accounting with respect to any 
                        qualified securities for its last taxable year 
                        ending before December 31, 1993, and
                            (ii) any portion of the net amount 
                        described in paragraph (2)(C) is attributable 
                        to the use of such method of accounting,
                then paragraph (2)(C) shall be applied by taking such 
                portion into account ratably over the 20-taxable year 
                period beginning with the first taxable year ending on 
                or after December 31, 1993 (or, if shorter, the period 
                of taxable years equal to the greater of 5 years or the 
                number of taxable years before such first taxable year 
                for which the taxpayer (or any predecessor) used such 
                method of accounting).
                    (B) Qualified security.--For purposes of this 
                paragraph, the term ``qualified security'' means any 
                security acquired--
                            (i) by a floor specialist (as defined in 
                        section 1236(d)(2) of the Internal Revenue Code 
                        of 1986) in connection with the specialist's 
                        duties as a specialist on an exchange, but only 
                        if the security is one in which the specialist 
                        is registered with the exchange, or
                            (ii) by a taxpayer who is a market maker in 
                        connection with the taxpayer's duties as a 
                        market maker, but only if--
                                    (I) the security is included on the 
                                National Association of Security 
                                Dealers Automated Quotation System,
                                    (II) the taxpayer is registered as 
                                a market maker in such security with 
                                the National Association of Security 
                                Dealers, and
                                    (III) as of the last day of the 
                                taxable year preceding the taxpayer's 
                                first taxable year ending on or after 
                                December 31, 1993, the taxpayer (or any 
                                predecessor) has been actively and 
                                regularly engaged as a market maker in 
                                such security for the 2-year period 
                                ending on such date (or, if shorter, 
                                the period beginning 61 days after the 
                                security was listed in such quotation 
                                system and ending on such date).

SEC. 14224. CLARIFICATION OF TREATMENT OF CERTAIN FSLIC FINANCIAL 
              ASSISTANCE.

    (a) General Rule.--For purposes of chapter 1 of the Internal 
Revenue Code of 1986--
            (1) any FSLIC assistance with respect to any loss of 
        principal, capital, or similar amount upon the disposition of 
        any asset shall be taken into account as compensation for such 
        loss for purposes of section 165 of such Code, and
            (2) any FSLIC assistance with respect to any debt shall be 
        taken into account for purposes of section 166, 585, or 593 of 
        such Code in determining whether such debt is worthless (or the 
        extent to which such debt is worthless) and in determining the 
        amount of any addition to a reserve for bad debts arising from 
        the worthlessness or partial worthlessness of such debts.
    (b) FSLIC Assistance.--For purposes of this section, the term 
``FSLIC assistance'' means any assistance (or right to assistance) with 
respect to a domestic building and loan association (as defined in 
section 7701(a)(19) of such Code without regard to subparagraph (C) 
thereof) under section 406(f) of the National Housing Act or section 
21A of the Federal Home Loan Bank Act (or under any similar provision 
of law).
    (c) Effective Date.--
            (1) In general.--Except as otherwise provided in this 
        subsection--
                    (A) The provisions of this section shall apply to 
                taxable years ending on or after March 4, 1991, but 
                only with respect to FSLIC assistance not credited 
                before March 4, 1991.
                    (B) If any FSLIC assistance not credited before 
                March 4, 1991, is with respect to a loss sustained or 
                charge-off in a taxable year ending before March 4, 
                1991, for purposes of determining the amount of any net 
                operating loss carryover to a taxable year ending on or 
                after March 4, 1991, the provisions of this section 
                shall apply to such assistance for purposes of 
                determining the amount of the net operating loss for 
                the taxable year in which such loss was sustained or 
                debt written off. Except as provided in the preceding 
                sentence, this section shall not apply to any FSLIC 
                assistance with respect to a loss sustained or charge-
                off in a taxable year ending before March 4, 1991.
            (2) Exceptions.--The provisions of this section shall not 
        apply to any assistance to which the amendments made by section 
        1401(a)(3) of the Financial Institutions Reform, Recovery, and 
        Enforcement Act of 1989 apply.

SEC. 14225. MODIFICATION OF CORPORATE ESTIMATED TAX RULES.

    (a) Increase in Required Installment Based on Current Year Tax.--
            (1) In general.--Clause (i) of section 6655(d)(1)(B) 
        (relating to amount of required installment) is amended by 
        striking ``91 percent'' each place it appears and inserting 
        ``100 percent''.
            (2) Conforming amendments.--
                    (A) Subsection (d) of section 6655 is amended--
                            (i) by striking paragraph (3), and
                            (ii) by striking ``91 percent'' in the 
                        paragraph heading of paragraph (2) and 
                        inserting ``100 percent''.
                    (B) Clause (ii) of section 6655(e)(2)(B) is amended 
                by striking the table contained therein and inserting 
                the following:

``In the case of the following            The applicable percentage is:
        required installments:
    1st...........................................                   25
    2nd...........................................                   50
    3rd...........................................                   75
    4th...........................................               100.''
                    (C) Clause (i) of section 6655(e)(3)(A) is amended 
                by striking ``91 percent'' and inserting ``100 
                percent''.
    (b) Modification of Periods for Applying Annualization.--
            (1) Clause (i) of section 6655(e)(2)(A) is amended--
                    (A) by striking ``or for the first 5 months'' in 
                subclause (II),
                    (B) by striking ``or for the first 8 months'' in 
                subclause (III), and
                    (C) by striking ``or for the first 11 months'' in 
                subclause (IV).
            (2) Paragraph (2) of section 6655(e) is amended by adding 
        at the end thereof the following new subparagraph:
                    ``(C) Election for different annualization 
                periods.--
                            ``(i) If the taxpayer makes an election 
                        under this clause--
                                    ``(I) subclause (I) of subparagraph 
                                (A)(i) shall be applied by substituting 
                                `2 months' for `3 months',
                                    ``(II) subclause (II) of 
                                subparagraph (A)(i) shall be applied by 
                                substituting `4 months' for `3 months',
                                    ``(III) subclause (III) of 
                                subparagraph (A)(i) shall be applied by 
                                substituting `7 months' for `6 months', 
                                and
                                    ``(IV) subclause (IV) of 
                                subparagraph (A)(i) shall be applied by 
                                substituting `10 months' for `9 
                                months'.
                            ``(ii) If the taxpayer makes an election 
                        under this clause--
                                    ``(I) subclause (II) of 
                                subparagraph (A)(i) shall be applied by 
                                substituting `5 months' for `3 months',
                                    ``(II) subclause (III) of 
                                subparagraph (A)(i) shall be applied by 
                                substituting `8 months' for `6 months', 
                                and
                                    ``(III) subclause (IV) of 
                                subparagraph (A)(i) shall be applied by 
                                substituting `11 months' for `9 
                                months'.
                            ``(iii) An election under clause (i) or 
                        (ii) shall apply to the taxable year for which 
                        made and such an election shall be effective 
                        only if made on or before the date required for 
                        the payment of the first required installment 
                        for such taxable year.''
            (3) The last sentence of section 6655(f)(3)(A) is amended 
        by striking ``and subsection (e)(2)(A)'' and inserting ``and, 
        except in the case of an election under subsection (e)(2)(C), 
        subsection (e)(2)(A)''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1993.

SEC. 14226. LIMITATION ON SECTION 936 CREDIT.

    (a) General Rule.--Subsection (a) of section 936 (relating to 
Puerto Rico and possession tax credit) is amended--
            (1) by striking ``as provided in paragraph (3)'' in 
        paragraph (1) and inserting ``as otherwise provided in this 
        section'';
            (2) by adding at the end thereof the following new 
        paragraph:
            ``(4) Limitations on credit.--
                    ``(A) Credit for active business income.--The 
                amount of the credit determined under paragraph (1)(A) 
                for any taxable year shall not exceed 60 percent of the 
                aggregate amount of the possession corporation's 
                qualified possession wages for such taxable year.
                    ``(B) Credit for investment income.--
                            ``(i) In general.--If--
                                    ``(I) the QPSII assets of the 
                                possession corporation for any taxable 
                                year, exceed
                                    ``(II) 80 percent of such 
                                possession corporation's qualified 
                                tangible business investment for such 
                                taxable year,
                        the credit determined under paragraph (1)(B) 
                        for such taxable year shall be reduced by the 
                        amount determined under clause (ii).
                            ``(ii) Amount of reduction.--The reduction 
                        determined under this clause for any taxable 
                        year is an amount which bears the same ratio to 
                        the credit determined under paragraph (1)(B) 
                        for such taxable year (determined without 
                        regard to this subparagraph) as--
                                    ``(I) the excess determined under 
                                clause (i), bears to
                                    ``(II) the QPSII assets of the 
                                possession corporation for such taxable 
                                year.
                    ``(C) Cross reference.--

                                ``For definitions and special rules 
applicable to this paragraph, see subsection (i).''
    (b) Definitions and Special Rules.--Section 936 is amended by 
adding at the end thereof the following new subsection:
    ``(i) Definitions and Special Rules Relating to Limitations of 
Subsection (a)(4).--
            ``(1) Qualified possession wages.--For purposes of this 
        section--
                    ``(A) In general.--The term `qualified possession 
                wages' means wages paid or incurred by the possession 
                corporation during the taxable year to any employee for 
                services performed in a possession of the United 
                States, but only if such services are performed while 
                the principal place of employment of such employee is 
                within such possession.
                    ``(B) Limitation on amount of wages taken into 
                account.--
                            ``(i) In general.--The amount of wages 
                        which may be taken into account under 
                        subparagraph (A) with respect to any employee 
                        for any taxable year shall not exceed the 
                        contribution and benefit base determined under 
                        section 230 of the Social Security Act for the 
                        calendar year in which such taxable year 
                        begins.
                            ``(ii) Treatment of part-time employees, 
                        etc.--If--
                                    ``(I) any employee is not employed 
                                by the possession corporation on a 
                                substantially full-time basis at all 
                                times during the taxable year, or
                                    ``(II) the principal place of 
                                employment of any employee with the 
                                possession corporation is not within a 
                                possession at all times during the 
                                taxable year,
                        the limitation applicable under clause (i) with 
                        respect to such employee shall be the 
                        appropriate portion (as determined by the 
                        Secretary) of the limitation which would 
                        otherwise be in effect under clause (i).
                    ``(C) Treatment of certain employees.--The term 
                `qualified possession wages' shall not include any 
                wages paid to employees who are assigned by the 
                employer to perform services for another person, unless 
                the principal trade or business of the employer is to 
                make employees available for temporary periods to other 
                persons in return for compensation. All possession 
                corporations treated as 1 corporation under paragraph 
                (4) shall be treated as 1 employer for purposes of the 
                preceding sentence.
                    ``(D) Wages.--
                            ``(i) In general.--Except as provided in 
                        clause (ii), the term `wages' has the meaning 
                        given to such term by subsection (b) of section 
                        3306 (determined without regard to any dollar 
                        limitation contained in such section). For 
                        purposes of the preceding sentence, such 
                        subsection (b) shall be applied as if the term 
                        `United States' included all possessions of the 
                        United States.
                            ``(ii) Special rule for agricultural labor 
                        and railway labor.--In any case to which 
                        subparagraph (A) or (B) of paragraph (1) of 
                        section 51(h) applies, the term `wages' has the 
                        meaning given to such term by section 51(h)(2).
            ``(2) QPSII assets.--For purposes of this section--
                    ``(A) In general.--The QPSII assets of a possession 
                corporation for any taxable year is the average of the 
                amounts of the possession corporation's qualified 
                investment assets as of the close of each quarter of 
                such taxable year.
                    ``(B) Qualified investment assets.--The term 
                `qualified investment assets' means the aggregate 
                adjusted bases of the assets which are held by the 
                possession corporation and the income from which 
                qualifies as qualified possession source investment 
                income. For purposes of the preceding sentence, the 
                adjusted basis of any asset shall be its adjusted basis 
                as determined for purposes of computing earnings and 
                profits.
            ``(3) Qualified tangible business investment.--For purposes 
        of this section--
                    ``(A) In general.--The qualified tangible business 
                investment of any possession corporation for any 
                taxable year is the average of the amounts of the 
                possession corporation's qualified possession 
                investments as of the close of each quarter of such 
                taxable year.
                    ``(B) Qualified possession investments.--The term 
                `qualified possession investments' means the aggregate 
                adjusted bases of tangible property used by the 
                possession corporation in a possession of the United 
                States in the active conduct of a trade or business 
                within such possession. For purposes of the preceding 
                sentence, the adjusted basis of any property shall be 
                its adjusted basis as determined for purposes of 
                computing earnings and profits.
            ``(4) Relocated businesses.--
                    ``(A) In general.--In determining--
                            ``(i) the possession corporation's 
                        qualified possession wages for any taxable 
                        year, and
                            ``(ii) the possession corporation's 
                        qualified tangible business investment for such 
                        taxable year,
                there shall be excluded all wages and all qualified 
                possession investments which are allocable to a 
                disqualified relocated business.
                    ``(B) Disqualified relocated business.--For 
                purposes of subparagraph (A), the term `disqualified 
                relocated business' means any trade or business 
                commenced by the possession corporation after May 13, 
                1993, or any addition after such date to an existing 
                trade or business of such possession corporation 
                unless--
                            ``(i) the possession corporation certifies 
                        that the commencement of such trade or business 
                        or such addition will not result in a decrease 
                        in employment at an existing business operation 
                        located in the United States, and
                            ``(ii) there is no reason to believe that 
                        such commencement or addition was done with the 
                        intention of closing down operations of an 
                        existing business located in the United States.
            ``(5) Election to compute credit on consolidated basis.--
                    ``(A) In general.--Any affiliated group may elect 
                to treat all possession corporations which would be 
                members of such group but for section 1504(b)(4) as 1 
                corporation for purposes of this section. The credit 
                determined under this section with respect to such 1 
                corporation shall be allocated among such possession 
                corporations in such manner as the Secretary may 
                prescribe.
                    ``(B) Election.--An election under subparagraph (A) 
                shall apply to the taxable year for which made and all 
                succeeding taxable years unless revoked with the 
                consent of the Secretary.
            ``(6) Treatment of certain taxes.--Notwithstanding 
        subsection (c), if--
                    ``(A) the credit determined under subsection (a)(1) 
                for any taxable year is limited under subsection 
                (a)(4), and
                    ``(B) the possession corporation has paid or 
                accrued any taxes of a possession of the United States 
                for such taxable year which are treated as not being 
                income, war profits, or excess profits taxes paid or 
                accrued to a possession of the United States by reason 
                of subsection (c),
        such possession corporation shall be allowed a deduction for 
        such taxable year equal to the portion of such taxes which are 
        allocable (on a pro rata basis) to taxable income of the 
        possession corporation the tax on which is not offset by reason 
        of the limitations of subsection (a)(4). In determining the 
        credit under subsection (a) and in applying the preceding 
        sentence, taxable income shall be determined without regard to 
        the preceding sentence.
            ``(7) Possession corporation.--The term `possession 
        corporation' means a domestic corporation for which the 
        election provided in subsection (a) is in effect.
            ``(8) Transitional rule.--If any possession corporation 
        elects the benefits of this paragraph for any taxable year 
        beginning in 1994 or 1995--
                    ``(A) subsection (a)(4) shall not apply to such 
                taxable year, and
                    ``(B) the credit determined under subsection (a)(1) 
                for such taxable year shall be the following percentage 
                of the credit which would otherwise have been 
                determined under such subsection:
                            ``(i) 80 percent in the case of a taxable 
                        year beginning in 1994.
                            ``(ii) 60 percent in the case of a taxable 
                        year beginning in 1995.
                A possession corporation which elects the benefits of 
                this paragraph shall be entitled to the benefits of 
                paragraph (6) for taxes allocable to taxable income the 
                tax on which is not offset by reason of this 
                paragraph.''
    (c) Minimum Tax Treatment.--
            (1) In general.--Clause (ii) of section 56(g)(4)(C) 
        (relating to treatment of special rule for certain dividends) 
        is amended by striking ``sections 936 and 921'' and inserting 
        ``sections 936 (including subsection (a)(4) thereof) and 921''.
            (2) Treatment of foreign taxes.--Clause (iii) of section 
        56(g)(4)(C) is amended by adding at the end thereof the 
        following subclauses:
                                    ``(IV) Separate application of 
                                foreign tax credit limitations.--In 
                                determining the alternative minimum 
                                foreign tax credit, section 904(d) 
                                shall be applied as if dividends from a 
                                corporation eligible for the credit 
                                provided by section 936 were a separate 
                                category of income referred to in a 
                                subparagraph of section 904(d)(1).
                                    ``(V) Coordination with limitation 
                                on 936 credit.--Any reference in this 
                                clause to a dividend received from a 
                                corporation eligible for the credit 
                                provided by section 936 shall be 
                                treated as a reference to the portion 
                                of any such dividend for which the 
                                dividends received deduction is 
                                disallowed under clause (i) after the 
                                application of clause (ii)(I).''
    (d) Conforming Amendment.--Paragraph (4) of section 904(b) is 
amended by inserting before the period at the end thereof the 
following: ``(without regard to subsection (a)(4) thereof)''.
    (e) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1993.

SEC. 14227. MODIFICATION TO LIMITATION ON DEDUCTION FOR CERTAIN 
              INTEREST.

    (a) General Rule.--Paragraph (3) of section 163(j) (defining 
disqualified interest) is amended to read as follows:
            ``(3) Disqualified interest.--For purposes of this 
        subsection, the term `disqualified interest' means--
                    ``(A) any interest paid or accrued by the taxpayer 
                (directly or indirectly) to a related person if no tax 
                is imposed by this subtitle with respect to such 
                interest, and
                    ``(B) any interest paid or accrued by the taxpayer 
                with respect to any indebtedness to a person who is not 
                a related person if--
                            ``(i) there is a disqualified guarantee of 
                        such indebtedness, and
                            ``(ii) no gross basis tax is imposed by 
                        this subtitle with respect to such interest.''
    (b) Definitions.--Paragraph (6) of section 163(j) is amended by 
adding at the end thereof the following new subparagraphs:
                    ``(D) Disqualified guarantee.--
                            ``(i) In general.--Except as provided in 
                        clause (ii), the term `disqualified guarantee' 
                        means any guarantee by a related person which 
                        is--
                                    ``(I) an organization exempt from 
                                taxation under this subtitle, or
                                    ``(II) a foreign person.
                            ``(ii) Exceptions.--The term `disqualified 
                        guarantee' shall not include a guarantee--
                                    ``(I) in any circumstances 
                                identified by the Secretary by 
                                regulation, where the interest on the 
                                indebtedness would have been subject to 
                                a net basis tax if the interest had 
                                been paid to the guarantor, or
                                    ``(II) if the taxpayer owns a 
                                controlling interest in the guarantor.
                        For purposes of subclause (II), except as 
                        provided in regulations, the term `a 
                        controlling interest' means direct or indirect 
                        ownership of at least 80 percent of the total 
                        voting power and value of all classes of stock 
                        of a corporation, or 80 percent of the profit 
                        and capital interests in any other entity. For 
                        purposes of the preceding sentence, the rules 
                        of paragraphs (1) and (5) of section 267(c) 
                        shall apply; except that such rules shall also 
                        apply to interest in entities other than 
                        corporations.
                            ``(iii) Guarantee.--Except as provided in 
                        regulations, the term `guarantee' includes any 
                        arrangement under which a person (directly or 
                        indirectly through an entity or otherwise) 
                        assures, on a conditional or unconditional 
                        basis, the payment of another person's 
                        obligation under any indebtedness.
                    ``(E) Gross basis and net basis taxation.--
                            ``(i) Gross basis tax.--The term `gross 
                        basis tax' means any tax imposed by this 
                        subtitle which is determined by reference to 
                        the gross amount of any item of income without 
                        any reduction for any deduction allowed by this 
                        subtitle.
                            ``(ii) Net basis tax.--The term `net basis 
                        tax' means any tax imposed by this subtitle 
                        which is not a gross basis tax.''
    (c) Conforming Amendment.--Subparagraph (B) of section 163(j)(5) is 
amended by striking ``to a related person''.
    (d) Effective Date.--The amendments made by this section shall 
apply to interest paid or accrued in taxable years beginning after 
December 31, 1993.

                    PART III--FOREIGN TAX PROVISIONS

 Subpart A--Current Taxation of Certain Earnings of Controlled Foreign 
                              Corporations

SEC. 14231. EARNINGS INVESTED IN EXCESS PASSIVE ASSETS.

    (a) General Rule.--Paragraph (1) of section 951(a) (relating to 
amounts included in gross income of United States shareholders) is 
amended by striking ``and'' at the end of subparagraph (A), by striking 
the period at the end of subparagraph (B) and inserting ``; and'', and 
by adding at the end thereof the following new subparagraph:
                    ``(C) the amount determined under section 956A with 
                respect to such shareholder for such year (but only to 
                the extent not excluded from gross income under section 
                959(a)(3)).''
    (b) Amount of Inclusion.--Subpart F of part III of subchapter N of 
chapter 1 is amended by inserting after section 956 the following new 
section:

``SEC. 956A. EARNINGS INVESTED IN EXCESS PASSIVE ASSETS.

    ``(a) General Rule.--In the case of any controlled foreign 
corporation, the amount determined under this section with respect to 
any United States shareholder for any taxable year is the lesser of--
            ``(1) the excess (if any) of--
                    ``(A) such shareholder's pro rata share of the 
                amount of the controlled foreign corporation's excess 
                passive assets for such taxable year, over
                    ``(B) the amount of earnings and profits described 
                in section 959(c)(1)(B) with respect to such 
                shareholder, or
            ``(2) such shareholder's pro rata share of the applicable 
        earnings of such controlled foreign corporation determined 
        after the application of section 951(a)(1)(B).
    ``(b) Applicable Earnings.--For purposes of this section, the term 
`applicable earnings' means, with respect to any controlled foreign 
corporation, the amounts referred to in sections 316(a)(1) and 
316(a)(2) (but reduced by distributions made during the taxable year), 
reduced by the earnings and profits described in section 959(c)(1).
    ``(c) Excess Passive Assets.--For purposes of this section--
            ``(1) In general.--The excess passive assets of any 
        controlled foreign corporation for any taxable year is the 
        excess (if any) of--
                    ``(A) the average of the amounts of passive assets 
                held by such corporation as of the close of each 
                quarter of such taxable year, over
                    ``(B) 25 percent of the average of the amounts of 
                total assets held by such corporation as of the close 
                of each quarter of such taxable year.
        For purposes of the preceding sentence, the amount taken into 
        account with respect to any asset shall be its adjusted basis 
        as determined for purposes of computing earnings and profits.
            ``(2) Passive asset.--
                    ``(A) In general.--Except as otherwise provided in 
                this section, the term `passive asset' means any asset 
                held by the controlled foreign corporation which 
                produces passive income (as defined in section 1296(b)) 
                or is held for the production of such income.
                    ``(B) Coordination with section 956.--The term 
                `passive asset' shall not include any United States 
                property (as defined in section 956).
            ``(3) Look-thru rules made applicable.--For purposes of 
        this subsection, the rules of section 1296(c) shall apply.
            ``(4) Leasing rules made applicable.--For purposes of this 
        subsection, the rules of section 1297(d) shall apply.
    ``(d) Special Rule Where Corporation Ceases To Be Controlled 
Foreign Corporation During Taxable Year.--If any foreign corporation 
ceases to be a controlled foreign corporation during any taxable year--
            ``(1) the determination of any United States shareholder's 
        pro rata share shall be made on the basis of stock owned 
        (within the meaning of section 958(a)) by such shareholder on 
        the last day during the taxable year on which the foreign 
        corporation is a controlled foreign corporation, and
            ``(2) the amount of such corporation's excess passive 
        assets for such taxable year shall be determined by only taking 
        into account quarters ending on or before such last day, and
            ``(3) in determining applicable earnings, the amount taken 
        into account by reason of being described in paragraph (2) of 
        section 316(a) shall be the portion of the amount so described 
        which is allocable (on a pro rata basis) to the part of such 
        year during which the corporation is a controlled foreign 
        corporation.
    ``(e) Transition Rule.--In the case of any taxable year of a 
controlled foreign corporation beginning after September 30, 1993, and 
before October 1, 1997, the amount determined under subsection (a) 
shall be the applicable percentage (determined under the following 
table) of the amount which would otherwise be determined under such 
subsection:

``In the case of a taxable year be-
                                                                       
  ginning during the 1-year pe-
                                                         The applicable
  riod beginning on:
                                                         percentage is:
        October 1, 1993..............................            20    
        October 1, 1994..............................            25    
        October 1, 1995..............................            35    
        October 1, 1996..............................           50.    
    ``(f) Regulations.--The Secretary shall prescribe such regulations 
as may be necessary to carry out the purposes of this section, 
including regulations to prevent the avoidance of the provisions of 
this section through reorganizations or otherwise.''
    (c) Previously Taxed Income Rules.--
            (1) In general.--Subsection (a) of section 959 (relating to 
        exclusion from gross income of previously taxed earnings and 
        profits) is amended by striking ``or'' at the end of paragraph 
        (1), by adding ``or'' at the end of paragraph (2), and by 
        inserting after paragraph (2) the following new paragraph:
            ``(3) such amounts would, but for this subsection, be 
        included under section 951(a)(1)(C) in the gross income of,''.
            (2) Allocation rules.--
                    (A) Subsection (a) of section 959 is amended by 
                adding at the end thereof the following new sentence: 
                ``The rules of subsection (c) shall apply for purposes 
                of paragraph (1) of this subsection and the rules of 
                subsection (f) shall apply for purposes of paragraphs 
                (2) and (3) of this subsection.''.
                    (B) Section 959 is amended by adding at the end 
                thereof the following new subsection:
    ``(f) Allocation Rules for Certain Inclusions.--
            ``(1) In general.--For purposes of this section, amounts 
        that would be included under subparagraph (B) or (C) of section 
        951(a)(1) (determined without regard to this section) shall be 
        treated as attributable first to earnings described in 
        subsection (c)(2), and then to earnings described in subsection 
        (c)(3).
            ``(2) Treatment of distributions.--In applying this 
        section, actual distributions shall be taken into account 
        before amounts that would be included under subparagraphs (B) 
        and (C) of section 951(a)(1) (determined without regard to this 
        section).''
                    (C) Paragraph (1) of section 959(c) is amended to 
                read as follows:
            ``(1) first to the aggregate of--
                    ``(A) earnings and profits attributable to amounts 
                included in gross income under section 951(a)(1)(B) (or 
                which would have been included except for subsection 
                (a)(2) of this section), and
                    ``(B) earnings and profits attributable to amounts 
                included in gross income under section 951(a)(1)(C) (or 
                which would have been included except for subsection 
                (a)(3) of this section),
        with any distribution being allocated between earnings and 
        profits described in subparagraph (A) and earnings and profits 
        described in subparagraph (B) proportionately on the basis of 
        the respective amounts of such earnings and profits,''.
            (3) Conforming amendments.--
                    (A) Subsections (a) and (b) of section 959 are each 
                amended by striking ``earnings and profits for a 
                taxable year'' and inserting ``earnings and profits''.
                    (B) Paragraph (2) of section 959(c) is amended to 
                read as follows:
            ``(2) then to earnings and profits attributable to amounts 
        included in gross income under section 951(a)(1)(A) (but 
        reduced by amounts not included under subparagraph (B) or (C) 
        of section 951(a)(1) because of the exclusions in paragraphs 
        (2) and (3) of subsection (a) of this section), and''
                    (C) Subsection (b) of section 989 is amended by 
                striking ``section 951(a)(1)(B)'' and inserting 
                ``subparagraph (B) or (C) of section 951(a)(1)''.
    (d) Modifications to Passive Foreign Investment Company Rules.--
            (1) Adjusted basis used in certain determinations.--
        Subsection (a) of section 1296 is amended by striking the 
        material following paragraph (2) and inserting the following:
``In the case of a controlled foreign corporation (or any other foreign 
corporation if such corporation so elects), the determination under 
paragraph (2) shall be based on the adjusted bases (as determined for 
purposes of computing earnings and profits) of its assets in lieu of 
their value. Such an election, once made, may be revoked only with the 
consent of the Secretary.''
            (2) Treatment of certain subpart f inclusions.--Subsection 
        (b) of section 1297 is amended by adding at the end thereof the 
        following new paragraph:
            ``(9) Treatment of certain subpart f inclusions.--Any 
        amount included in gross income under subparagraph (B) or (C) 
        of section 951(a)(1) shall be treated as a distribution 
        received with respect to the stock.''
            (3) Treatment of certain dealers in securities.--Subsection 
        (b) of section 1296 is amended by adding at the end thereof the 
        following new paragraph:
            ``(3) Treatment of certain dealers in securities.--
                    ``(A) In general.--In the case of any foreign 
                corporation which is a controlled foreign corporation 
                (as defined in section 957(a)), the term `passive 
                income' does not include any income derived in the 
                active conduct of a securities business by such 
                corporation if such corporation is registered as a 
                securities broker or dealer under section 15(a) of the 
                Securities Exchange Act of 1934 or is registered as a 
                Government securities broker or dealer under section 
                15C(a) of such Act. To the extent provided in 
                regulations, such term shall not include any income 
                derived in the active conduct of a securities business 
                by a controlled foreign corporation which is not so 
                registered.
                    ``(B) Application of look-thru rules.--For purposes 
                of paragraph (2)(C), rules similar to the rules of 
                subparagraph (A) shall apply in determining whether any 
                income of a related person (whether or not a 
                corporation) is passive income.
                    ``(C) Limitation.--The preceding provisions of this 
                paragraph shall only apply in the case of persons who 
                are United States shareholders (as defined in section 
                951(b)) in the controlled foreign corporation.''
            (4) Leasing rules.--Section 1297 is amended by 
        redesignating subsection (d) as subsection (e) and by inserting 
        after subsection (c) the following new subsection:
    ``(d) Treatment of Certain Leased Property.--For purposes of this 
part--
            ``(1) In general.--Any tangible personal property with 
        respect to which a foreign corporation is the lessee under a 
        lease with a term of at least 12 months shall be treated as an 
        asset actually held by such corporation.
            ``(2) Determination of adjusted basis.--
                    ``(A) In general.--The adjusted basis of any asset 
                to which paragraph (1) applies shall be the unamortized 
                portion (as determined under regulations prescribed by 
                the Secretary) of the present value of the payments 
                under the lease for the use of such property.
                    ``(B) Present value.--For purposes of subparagraph 
                (A), the present value of payments described in 
                subparagraph (A) shall be determined in the manner 
                provided in regulations prescribed by the Secretary--
                            ``(i) as of the beginning of the lease 
                        term, and
                            ``(ii) except as provided in such 
                        regulations, by using a discount rate equal to 
                        the applicable Federal rate determined under 
                        section 1274(d)--
                                    ``(I) by substituting the lease 
                                term for the term of the debt 
                                instrument, and
                                    ``(II) without regard to paragraph 
                                (2) or (3) thereof.
            ``(3) Exceptions.--This subsection shall not apply in any 
        case where--
                    ``(A) the lessor is a related person (as defined in 
                section 954(d)(3)) with respect to the foreign 
                corporation, or
                    ``(B) a principal purpose of leasing the property 
                was to avoid the provisions of this section.''
    (e) Effective Date.--The amendments made by this section shall 
apply to taxable years of foreign corporations beginning after 
September 30, 1993, and to taxable years of United States shareholders 
in which or with which such taxable years of foreign corporations end.

SEC. 14232. MODIFICATION TO TAXATION OF INVESTMENT IN UNITED STATES 
              PROPERTY.

    (a) General Rule.--Section 956 (relating to investment of earnings 
in United States property) is amended--
            (1) by redesignating subsections (b) and (c) as subsections 
        (c) and (d), respectively, and
            (2) by striking subsection (a) and inserting the following:
    ``(a) General Rule.--In the case of any controlled foreign 
corporation, the amount determined under this section with respect to 
any United States shareholder for any taxable year is the lesser of--
            ``(1) the excess (if any) of--
                    ``(A) such shareholder's pro rata share of the 
                average of the amounts of United States property held 
                (directly or indirectly) by the controlled foreign 
                corporation as of the close of each quarter of such 
                taxable year, over
                    ``(B) the amount of earnings and profits described 
                in section 959(c)(1)(A) with respect to such 
                shareholder, or
            ``(2) such shareholder's pro rata share of the applicable 
        earnings of such controlled foreign corporation.
The amount taken into account under paragraph (1) with respect to any 
property shall be its adjusted basis as determined for purposes of 
computing earnings and profits, reduced by any liability to which the 
property is subject.
    ``(b) Adjustments for Certain Distributions; Other Special Rules.--
            ``(1) Applicable earnings.--For purposes of this section, 
        the term `applicable earnings' has the meaning given to such 
        term by section 956A(b).
            ``(2) Special rule where corporation ceases to be 
        controlled foreign corporation.--Rules similar to the rules of 
        section 956A(d) shall apply for purposes of this section.''
    (b) Conforming Amendments.--
            (1) Subparagraph (B) of section 951(a)(1) is amended to 
        read as follows:
                    ``(B) the amount determined under section 956 with 
                respect to such shareholder for such year (but only to 
                the extent not excluded from gross income under section 
                959(a)(2)); and''
            (2) Subsection (a) of section 951 is amended by striking 
        paragraph (4).
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years of controlled foreign corporations beginning 
after September 30, 1993, and to taxable years of United States 
shareholders in which or with which such taxable years of controlled 
foreign corporations end.
    (d) Study of Investments by Controlled Foreign Corporations in 
United States Property.--
            (1) In general.--The Secretary of the Treasury shall 
        conduct a study of the tax treatment of investments by 
        controlled foreign corporations in obligations of United States 
        persons other than corporations. Such study shall include the 
        Secretary's views as to whether the treatment of such 
        investments should be changed, along with a discussion of the 
        merits and consequences of any such change.
            (2) Report.--Not later than December 31, 1993, the 
        Secretary of the Treasury shall submit to the Committee on Ways 
        and Means of the House of Representatives and the Committee on 
        Finance of the Senate a report on the study conducted under 
        this subsection, together with such recommendations as he may 
        deem advisable.

SEC. 14233. OTHER MODIFICATIONS TO SUBPART F.

    (a) Same Country Exception Not To Apply To Certain Dividends.--
            (1) In general.--Paragraph (3) of section 954(c) (relating 
        to certain income received from related persons) is amended by 
        adding at the end thereof the following new subparagraph:
                    ``(C) Exception for certain dividends.--
                Subparagraph (A)(i) shall not apply to any dividend 
                with respect to any stock which is attributable to 
                earnings and profits of the distributing corporation 
                accumulated during any period during which the person 
                receiving such dividend did not hold such stock.''
            (2) Effective date.--The amendment made by paragraph (1) 
        shall apply to taxable years of controlled foreign corporations 
        beginning after September 30, 1993, and to taxable years of 
        United States shareholders in which or with which such taxable 
        years of controlled foreign corporations end.
    (b) Simplification of Section 960(b).--
            (1) In general.--Subsection (b) of section 960 is amended--
                    (A) by redesignating paragraphs (3) and (4) as 
                paragraphs (4) and (5), respectively, and
                    (B) by striking paragraphs (1) and (2) and 
                inserting the following new paragraphs:
            ``(1) Increase in section 904 limitation.--In the case of 
        any taxpayer who--
                    ``(A) either (i) chose to have the benefits of 
                subpart A of this part for a taxable year beginning 
                after September 30, 1993, in which he was required 
                under section 951(a) to include any amount in his gross 
                income, or (ii) did not pay or accrue for such taxable 
                year any income, war profits, or excess profits taxes 
                to any foreign country or to any possession of the 
                United States,
                    ``(B) chooses to have the benefits of subpart A of 
                this part for any taxable year in which he receives 1 
                or more distributions or amounts which are excludable 
                from gross income under section 959(a) and which are 
                attributable to amounts included in his gross income 
                for taxable years referred to in subparagraph (A), and
                    ``(C) for the taxable year in which such 
                distributions or amounts are received, pays, or is 
                deemed to have paid, or accrues income, war profits, or 
                excess profits taxes to a foreign country or to any 
                possession of the United States with respect to such 
                distributions or amounts,
        the limitation under section 904 for the taxable year in which 
        such distributions or amounts are received shall be increased 
        by the lesser of the amount of such taxes paid, or deemed paid, 
        or accrued with respect to such distributions or amounts or the 
        amount in the excess limitation account as of the beginning of 
        such taxable year.
            ``(2) Excess limitation account.--
                    ``(A) Establishment of account.--Each taxpayer 
                meeting the requirements of paragraph (1)(A) shall 
                establish an excess limitation account. The opening 
                balance of such account shall be zero.
                    ``(B) Increases in account.--For each taxable year 
                beginning after September 30, 1993, the taxpayer shall 
                increase the amount in the excess limitation account by 
                the excess (if any) of--
                            ``(i) the amount by which the limitation 
                        under section 904(a) for such taxable year was 
                        increased by reason of the total amount of the 
                        inclusions in gross income under section 951(a) 
                        for such taxable year, over
                            ``(ii) the amount of any income, war 
                        profits, and excess profits taxes paid, or 
                        deemed paid, or accrued to any foreign country 
                        or possession of the United States which were 
                        allowable as a credit under section 901 for 
                        such taxable year and which would not have been 
                        allowable but for the inclusions in gross 
                        income described in clause (i).
                Proper reductions in the amount added to the account 
                under the preceding sentence for any taxable year shall 
                be made for any increase in the credit allowable under 
                section 901 for such taxable year by reason of a 
                carryback if such increase would not have been 
                allowable but for the inclusions in gross income 
                described in clause (i).
                    ``(C) Decreases in account.--For each taxable year 
                beginning after September 30, 1993, for which the 
                limitation under section 904 was increased under 
                paragraph (1), the taxpayer shall reduce the amount in 
                the excess limitation account by the amount of such 
                increase.
            ``(3) Distributions of income previously taxed in years 
        beginning before october 1, 1993.--If the taxpayer receives a 
        distribution or amount in a taxable year beginning after 
        September 30, 1993, which is excluded from gross income under 
        section 959(a) and is attributable to any amount included in 
        gross income under section 951(a) for a taxable year beginning 
        before October 1, 1993, the limitation under section 904 for 
        the taxable year in which such amount or distribution is 
        received shall be increased by the amount determined under this 
        subsection as in effect on the day before the date of the 
        enactment of the Revenue Reconcilation Act of 1993.''
            (2) Effective date.--The amendment made by paragraph (1) 
        shall apply to taxable years beginning after September 30, 
        1993.

    Subpart B--Allocation of Research and Experimental Expenditures

SEC. 14234. ALLOCATION OF RESEARCH AND EXPERIMENTAL EXPENDITURES.

    (a) General Rule.--Subparagraph (B) of section 864(f)(1) (relating 
to allocation of research and experimental expenditures) is amended by 
striking ``64 percent'' each place it appears and inserting ``50 
percent''.
    (b) Conforming Amendments.--
            (1) Subsection (f) of section 864 is amended by striking 
        paragraph (5) and inserting the following:
            ``(5) Regulations.--The Secretary shall prescribe such 
        regulations as may be appropriate to carry out the purposes of 
        this subsection, including regulations relating to the 
        determination of whether any expenses are attributable to 
        activities conducted in the United States or outside the United 
        States and regulations providing such adjustments to the 
        provisions of this subsection as may be appropriate in the case 
        of cost-sharing arrangements and contract research.''
            (2) Subparagraph (D) of section 864(f)(4) is amended by 
        striking ``subparagraph (C)'' and inserting ``subparagraph (B) 
        or (C)''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years ending after the date of the enactment of this 
Act; except that such amendments shall not apply in the case of any 
taxable year to which Revenue Procedure 92-56 applies or would apply if 
the taxpayer elected the benefits of such Revenue Procedure.

                      Subpart C--Other Provisions

SEC. 14235. REPEAL OF CERTAIN EXCEPTIONS FOR WORKING CAPITAL.

    (a) Provisions Relating to Oil and Gas Income.--
            (1) Amendments to section 907.--
                    (A) Paragraph (1) of section 907(c) is amended by 
                adding at the end thereof the following new flush 
                sentence:
``Such term does not include any dividend or interest income which is 
passive income (as defined in section 904(d)(2)(A)).''.
                    (B) Paragraph (2) of section 907(c) is amended by 
                adding at the end thereof the following new flush 
                sentence:
``Such term does not include any dividend or interest income which is 
passive income (as defined in section 904(d)(2)(A)).''.
            (2) Separate application of foreign tax credit.--Clause 
        (iii) of section 904(d)(2)(A) is amended by inserting ``and'' 
        at the end of subclause (II), by striking ``, and'' at the end 
        of subclause (III) and inserting a period, and by striking 
        subclause (IV).
            (3) Treatment under subpart f.--
                    (A) Paragraph (1) of section 954(g) is amended by 
                adding at the end thereof the following new flush 
                sentence:
Such term shall not include any foreign personal holding company income 
(as defined in subsection (c)).''.
                    (B) Paragraph (8) of section 954(b) is amended by 
                striking ``(1),''.
    (b) Treatment of Shipping Income.--Subsection (f) of section 954 is 
amended by adding at the end thereof the following new sentence: ``Such 
term shall not include any dividend or interest income which is foreign 
personal holding company income (as defined in subsection (c)).''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1992.

SEC. 14236. MODIFICATIONS OF ACCURACY-RELATED PENALTY.

    (a) Threshold Requirement.--Clause (ii) of section 6662(e)(1)(B) 
(relating to substantial valuation misstatement under chapter 1) is 
amended to read as follows:
                            ``(ii) the net section 482 transfer price 
                        adjustment for the taxable year exceeds the 
                        lesser of $5,000,000 or 10 percent of the 
                        taxpayer's gross receipts.''
    (b) Certain Adjustments Excluded in Determining Threshold.--
Subparagraph (B) of section 6662(e)(3) is amended to read as follows:
                    ``(B) Certain adjustments excluded in determining 
                threshold.--For purposes of determining whether the 
                threshold requirements of paragraph (1)(B)(ii) are met, 
                the following shall be excluded:
                            ``(i) Any portion of the net increase in 
                        taxable income referred to in subparagraph (A) 
                        which is attributable to any redetermination of 
                        a price if--
                                    ``(I) it is established that the 
                                taxpayer determined such price in 
                                accordance with a specific pricing 
                                method set forth in the regulations 
                                prescribed under section 482 and that 
                                the taxpayer's use of such method was 
                                reasonable,
                                    ``(II) the taxpayer has 
                                documentation (which was in existence 
                                as of the time of filing the return) 
                                which sets forth the determination of 
                                such price in accordance with such a 
                                method and which establishes that the 
                                use of such method was reasonable, and
                                    ``(III) the taxpayer provides such 
                                documentation to the Secretary within 
                                30 days of a request for such 
                                documentation.
                            ``(ii) Any portion of the net increase in 
                        taxable income referred to in subparagraph (A) 
                        which is attributable to a redetermination of 
                        price where such price was not determined in 
                        accordance with such a specific pricing method 
                        if--
                                    ``(I) the taxpayer establishes that 
                                none of such pricing methods was likely 
                                to result in a price that would clearly 
                                reflect income, the taxpayer used 
                                another pricing method to determine 
                                such price, and such other pricing 
                                method was likely to result in a price 
                                that would clearly reflect income,
                                    ``(II) the taxpayer has 
                                documentation (which was in existence 
                                as of the time of filing the return) 
                                which sets forth the determination of 
                                such price in accordance with such 
                                other method and which establishes that 
                                the requirements of subclause (I) were 
                                satisfied, and
                                    ``(III) the taxpayer provides such 
                                documentation to the Secretary within 
                                30 days of request for such 
                                documentation.
                            ``(iii) Any portion of such net increase 
                        which is attributable to any transaction solely 
                        between foreign corporations unless, in the 
                        case of any such corporations, the treatment of 
                        such transaction affects the determination of 
                        income from sources within the United States or 
                        taxable income effectively connected with the 
                        conduct of a trade or business within the 
                        United States.''
    (b) Coordination With Reasonable Cause Exception.--Paragraph (3) of 
section 6662(e) is amended by adding at the end thereof the following 
new subparagraph:
                    ``(D) Coordination with reasonable cause 
                exception.--For purposes of section 6664(c) the 
                taxpayer shall not be treated as having reasonable 
                cause for any portion of an underpayment attributable 
                to a net section 482 transfer price adjustment unless 
                such taxpayer meets the requirements of clause (i), 
                (ii), or (iii) of subparagraph (B) with respect to such 
                portion.''
    (c) Conforming Amendment.--Clause (iii) of section 6662(h)(2)(A) is 
amended to read as follows:
                            ``(iii) in paragraph (1)(B)(ii)--
                                    ``(I) `$20,000,000' for 
                                `$5,000,000', and
                                    ``(II) `20 percent' for `10 
                                percent'.''
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1993.

SEC. 14237. DENIAL OF PORTFOLIO INTEREST EXEMPTION FOR CONTINGENT 
              INTEREST.

    (a) General Rule.--
            (1) Subsection (h) of section 871 (relating to repeal of 
        tax on interest of nonresident alien individuals received from 
        certain portfolio debt investments) is amended by redesignating 
        paragraphs (4), (5), and (6) as paragraphs (5), (6), and (7), 
        respectively, and by inserting after paragraph (3) the 
        following new paragraph:
            ``(4) Portfolio interest not to include certain contingent 
        interest.--For purposes of this subsection--
                    ``(A) In general.--Except as otherwise provided in 
                this paragraph, the term `portfolio interest' shall not 
                include--
                            ``(i) any interest if the amount of such 
                        interest is determined by reference to--
                                    ``(I) any receipts, sales or other 
                                cash flow of the debtor or a related 
                                person,
                                    ``(II) any income or profits of the 
                                debtor or a related person,
                                    ``(III) any change in value of any 
                                property of the debtor or a related 
                                person, or
                                    ``(IV) any dividend, partnership 
                                distributions, or similar payments made 
                                by the debtor or a related person, or
                            ``(ii) any other type of contingent 
                        interest that is identified by the Secretary by 
                        regulation, where a denial of the portfolio 
                        interest exemption is necessary or appropriate 
                        to prevent avoidance of Federal income tax.
                    ``(B) Related person.--The term `related person' 
                means any person who is related to the debtor within 
                the meaning of section 267(b) or 707(b)(1), or who is a 
                party to any arrangement undertaken for a purpose of 
                avoiding the application of this paragraph.
                    ``(C) Exceptions.--Subparagraph (A)(i) shall not 
                apply to--
                            ``(i) any amount of interest solely by 
                        reason of the fact that the timing of any 
                        interest or principal payment is subject to a 
                        contingency,
                            ``(ii) any amount of interest solely by 
                        reason of the fact that the interest is paid 
                        with respect to nonrecourse or limited recourse 
                        indebtedness,
                            ``(iii) any amount of interest all or 
                        substantially all of which is determined by 
                        reference to any other amount of interest not 
                        described in subparagraph (A) (or by reference 
                        to the principal amount of indebtedness on 
                        which such other interest is paid),
                            ``(iv) any amount of interest solely by 
                        reason of the fact that the debtor or a related 
                        person enters into a hedging transaction to 
                        reduce the risk of interest rate or currency 
                        fluctuations with respect to such interest,
                            ``(v) any amount of interest determined by 
                        reference to--
                                    ``(I) changes in the value of 
                                property (including stock) that is 
                                actively traded (within the meaning of 
                                section 1092(d)) other than property 
                                described in section 897(c)(1) or (g),
                                    ``(II) the yield on property 
                                described in subclause (I), other than 
                                a debt instrument that pays interest 
                                described in subparagraph (A), or stock 
                                or other property that represents a 
                                beneficial interest in the debtor or a 
                                related person, or
                                    ``(III) changes in any index of the 
                                value of property described in 
                                subclause (I) or of the yield on 
                                property described in subclause (II), 
                                and
                            ``(vi) any other type of interest 
                        identified by the Secretary by regulation.
                    ``(D) Exception for certain existing 
                indebtedness.--Subparagraph (A) shall not apply to any 
                interest paid or accrued with respect to any 
                indebtedness with a fixed term--
                            ``(i) which was issued on or before April 
                        7, 1993, or
                            ``(ii) which was issued after such date 
                        pursuant to a written binding contract in 
                        effect on such date and at all times thereafter 
                        before such indebtedness was issued.''
            (2) Subsection (c) of section 881 is amended by 
        redesignating paragraphs (4), (5), and (6) as paragraphs (5), 
        (6), and (7), respectively, and by inserting after paragraph 
        (3) the following new paragraph:
            ``(4) Portfolio interest not to include certain contingent 
        interest.--For purposes of this subsection, the term `portfolio 
        interest' shall not include any interest which is treated as 
        not being portfolio interest under the rules of section 
        871(h)(4).''
    (b) Conforming Amendments.--
            (1) Clause (ii) of section 871(h)(2)(B) is amended by 
        striking ``paragraph (4)'' and inserting ``paragraph (5)''.
            (2) Clause (ii) of section 881(c)(2)(B) is amended by 
        striking ``section 871(h)(4)'' and inserting ``section 
        871(h)(5)''.
            (3) Paragraph (6) of section 881(c) (as redesignated by 
        subsection (a)) is amended by striking ``section 871(h)(5)'' 
        each place it appears and inserting ``section 871(h)(6)''.
            (4) Paragraph (9) of section 1441(c) is amended by striking 
        ``section 871(h)(3)'' and inserting ``section 871(h)(3) or 
        (4)''.
            (5) Subsection (a) of section 1442 is amended--
                    (A) by striking ``871(h)(3)'' and inserting 
                ``871(h)(3) or (4)'', and
                    (B) by striking ``881(c)(3)'' and inserting 
                ``881(c)(3) or (4)''.
    (c) Effective Date.--The amendments made by this section shall 
apply to interest received after December 31, 1993.

SEC. 14238. REGULATIONS DEALING WITH CONDUIT ARRANGEMENTS.

    Section 7701 is amended by redesignating subsection (l) as 
subsection (m) and by inserting after subsection (k) the following new 
subsection:
    ``(l) Regulations Relating to Conduit Arrangements.--The Secretary 
may prescribe regulations recharacterizing any multiple-party financing 
transaction as a transaction directly among any 2 or more of such 
parties where the Secretary determines that such recharacterization is 
appropriate to prevent avoidance of any tax imposed by this title.''

                     PART IV--ENERGY TAX PROVISIONS

               Subpart A--Energy Tax Based on Btu Content

SEC. 14241. IMPOSITION OF ENERGY TAX BASED ON BTU CONTENT.

    (a) In General.--Chapter 36 (relating to other excise taxes) is 
amended by redesignating subchapters A and B as subchapters B and C, 
respectively, and by inserting before subchapter B (as so redesignated) 
the following new subchapter:

                      ``Subchapter A--Energy Taxes

                              ``Part I. Imposition of tax on refined 
                                        petroleum products.
                              ``Part II. Imposition of taxes on natural 
                                        gas, coal, and electricity.
                              ``Part III. Tax rates.
                              ``Part IV. Use taxes; floor stocks taxes; 
                                        administrative provisions; 
                                        definitions and special rules.
                              ``Part V. Tax on imported products with 
                                        high embedded energy costs.

       ``PART I--IMPOSITION OF TAX ON REFINED PETROLEUM PRODUCTS

                              ``Sec. 4441. Taxable refined petroleum 
                                        products.
                              ``Sec. 4442. Tax-free transfers and uses; 
                                        refunds for certain sales and 
                                        uses.

``SEC. 4441. TAXABLE REFINED PETROLEUM PRODUCTS.

    ``(a) Imposition of Tax.--
            ``(1) In general.--There is hereby imposed a tax on any 
        taxable refined petroleum product--
                    ``(A) removed from any refinery in the United 
                States,
                    ``(B) removed from any terminal in the United 
                States,
                    ``(C) entered into the United States for 
                consumption, use, or warehousing, and
                    ``(D) sold to any person who is not registered 
                under section 4453(d).
        No tax shall be imposed by subparagraph (D) if there was a 
        prior taxable removal or entry under subparagraph (A), (B), or 
        (C).
            ``(2) Exception for bulk transfers to registered refineries 
        or terminals.--The tax imposed by paragraph (1) shall not apply 
        to any removal or entry of any taxable refined petroleum 
        product transferred in bulk to a refinery or terminal if the 
        person removing or entering such product and the operator of 
        such refinery or terminal are registered under section 4453(d).
    ``(b) Rate of Tax.--
            ``(1) In general.--The amount of the tax imposed by 
        subsection (a) on each barrel of any taxable refined petroleum 
        product shall be the sum of--
                    ``(A) the base rate, and
                    ``(B) the supplemental rate,
        multiplied by the applicable per unit Btu factor for such 
        product.
            ``(2) Only base rate applies to qualified heating oil, 
        diesel fuel used on farms, and liquefied petroleum gases.--
                    ``(A) In general.--Subparagraph (B) of paragraph 
                (1) shall not apply to--
                            ``(i) qualified heating oil,
                            ``(ii) qualified farm diesel fuel, and
                            ``(iii) any liquefied petroleum gas.
                    ``(B) Qualified heating oil.--For purposes of 
                subparagraph (A), the term `qualified heating oil' 
                means No. 2 distillate fuel oil (including any kerosene 
                in a mixture with such oil) which--
                            ``(i) is indelibly dyed (or dyed and 
                        marked) in accordance with regulations that the 
                        Secretary shall prescribe, and
                            ``(ii) is delivered (or is to be delivered) 
                        to any building to heat the building.
                    ``(C) Qualified farm diesel fuel.--For purposes of 
                subparagraph (A), the term `qualified farm diesel fuel' 
                means any diesel fuel which--
                            ``(i) is indelibly dyed (or dyed and 
                        marked) in accordance with regulations that the 
                        Secretary shall prescribe, and
                            ``(ii) is used (or to be used) on a farm 
                        for farming purposes (determined under section 
                        6420(c)).
    ``(c) Liability for Tax.--The determination of who is liable for 
the tax imposed by subsection (a) shall be made under the rules 
applicable in determining liability for the tax imposed by section 
4081. Section 4103 shall apply to the tax imposed by subsection (a) in 
the same manner as it applies to the tax imposed by section 4081.
    ``(d) Taxable Refined Petroleum Product.--For purposes of this 
subchapter, the term `taxable refined petroleum product' means--
            ``(1) aviation gasoline,
            ``(2) motor gasoline (including blending components of 
        gasoline),
            ``(3) kerosene-type jet fuel,
            ``(4) naphtha-type jet fuel,
            ``(5) distillate fuel oil,
            ``(6) kerosene,
            ``(7) residual fuel oil,
            ``(8) petroleum coke,
            ``(9) butane,
            ``(10) propane,
            ``(11) ethanol,
            ``(12) methanol, and
            ``(13) to the extent provided in regulations prescribed by 
        the Secretary, any other refined petroleum product.
    ``(e) Applicable Per Unit Btu Factor.--For purposes of this 
subchapter--
            ``(1) In general.--

                                                The applicable per unit
                                              Btu factor is the follow-
                  ``In the case of:
                                                 ing amount per barrel:
                          Aviation gasoline..........             5.048
                          Motor gasoline (including               5.267
                            blending components of 
                            gasoline).
                          Kerosene-type jet fuel.....             5.670
                          Naphtha-type jet fuel......             5.355
                          Distillate fuel oil........             5.852
                          Kerosene...................             5.670
                          Residual fuel oil..........             6.486
                          Petroleum coke.............             6.024
                          Ethanol....................             3.500
                          Methanol...................             3.500
                          Butane.....................             4.326
                          Propane....................           3.836. 
            ``(2) Mixtures.--Any mixture which includes a taxable 
        refined petroleum product shall be treated as specified in 
        paragraph (1) and--
                    ``(A) if more than 1 such product is included in 
                such mixture, the applicable per unit Btu factor shall 
                be the weighted average of the applicable per unit Btu 
                factors for the taxable refined petroleum products 
                included in the mixture, and
                    ``(B) if any substance is included in the mixture 
                which is not a taxable refined petroleum product, the 
                applicable per unit Btu factor for the portion of such 
                mixture's volume which is attributable to such 
                substance shall be zero.
            ``(3) Cross reference.--

                                ``For authority to adjust per unit Btu 
amounts, see section 4453(e).
    ``(f) Other Definitions.--For purposes of this subchapter--
            ``(1) Refinery.--The term `refinery' means any facility--
                    ``(A) at which crude oil or any petroleum product 
                is refined,
                    ``(B) which is a natural gas processing or 
                fractionation plant, or
                    ``(C) at which ethanol or methanol is produced for 
                use as a fuel.
            ``(2) Blending components.--The term `blending components' 
        does not include ethanol or methanol.
            ``(3) Ethanol and methanol.--The terms `ethanol' and 
        `methanol' include ether derivatives of ethanol and methanol, 
        respectively.
            ``(4) Barrel.--The term `barrel' means 42 United States 
        gallons determined with such temperature adjustments as the 
        Secretary may prescribe. In the case of a taxable refined 
        petroleum product which is not a liquid, the term `barrel' 
        means a volume determined under regulations prescribed by the 
        Secretary on the basis of an equivalence to a barrel of oil.
    ``(g) Refunds in Certain Cases.--Under regulations prescribed by 
the Secretary, if any person who paid the tax imposed by this section 
with respect to any taxable refined petroleum product establishes to 
the satisfaction of the Secretary that a prior tax was paid (and not 
credited or refunded) with respect to such product, then an amount 
equal to the tax paid by such person shall be allowed as a refund 
(without interest) to such person in the same manner as if it were an 
overpayment of tax imposed by this section.

``SEC. 4442. TAX-FREE TRANSFERS AND USES; REFUNDS FOR CERTAIN SALES AND 
              USES.

    ``(a) Tax-Free Sales, Etc.--
            ``(1) In general.--No tax shall be imposed by section 
        4441--
                    ``(A) on any taxable refined petroleum product 
                which is used in an exempt use by the person otherwise 
                liable for such tax, or
                    ``(B) by reason of a removal, entry, or sale of 
                such product for an exempt use by the person receiving 
                the product.
            ``(2) Exempt use.--For purposes of this subsection, the 
        term `exempt use' means--
                    ``(A) export,
                    ``(B) any use in the generation of electricity,
                    ``(C) any qualified feedstock use, and
                    ``(D) any use in the manufacture or production of 
                synthetic natural gas or any other synthetic fuel 
                specified in regulations prescribed by the Secretary.
            ``(3) Qualified feedstock use.--For purposes of this 
        subsection--
                    ``(A) In general.--In the case of any qualified 
                feedstock use, only the exempt percentage of any 
                taxable refined petroleum product shall be exempt from 
                tax under paragraph (1).
                    ``(B) Qualified feedstock use.--The term `qualified 
                feedstock use' means use of any taxable refined 
                petroleum product in the manufacture or production of 
                any substance.
                    ``(C) Exempt percentage.--For purposes of 
                subparagraph (A), the term `exempt percentage' means 
                the percentage (determined on the basis of chemical 
                structure) of the taxable refined petroleum product 
                which is incorporated into the substance manufactured 
                or produced.
            ``(4) Registration requirements.--To the extent provided by 
        the Secretary, paragraph (1) shall not apply to any taxable 
        event unless--
                    ``(A) such persons with respect to such event as 
                the Secretary may specify are registered under section 
                4453(d), and
                    ``(B) in the case of a sale, the purchaser's name 
                and address, and the purchaser's registration number 
                for purposes of this subchapter, are provided to the 
                seller.
            ``(5) Refunds of products purchased tax-paid.--If tax was 
        imposed under section 4441 with respect to any taxable refined 
        petroleum product and such product is used by any person in an 
        exempt use, the Secretary shall pay to such person an amount 
        equal to the tax so imposed (or, in the case of a qualified 
        feedstock use, the exempt percentage of the tax so imposed).
            ``(6) Cross reference.--

                                ``For tax on fuel used to produce steam 
at facility which also generates electricity, see section 4451(e).
    ``(b) Refunds to Ultimate Vendors in Certain Cases.--Under 
regulations prescribed by the Secretary--
            ``(1) Heating oil.--If the supplemental rate of tax was 
        imposed under section 4441 with respect to any No. 2 distillate 
        fuel oil (including any kerosene in a mixture with such oil) 
        and such fuel oil is delivered to any building to heat the 
        building, the Secretary shall pay to the ultimate vendor of 
        such fuel oil an amount equal to the product of the 
        supplemental rate and the applicable per unit Btu factor per 
        barrel of the fuel oil (and kerosene) so delivered.
            ``(2) International commercial transportation.--
                    ``(A) In general.--If tax was imposed under section 
                4441 with respect to any taxable refined petroleum 
                product and such product is sold for use or used by the 
                purchaser for international commercial transportation, 
                the Secretary shall pay to the ultimate vendor of such 
                product an amount equal to the tax so imposed.
                    ``(B) International commercial transportation.--For 
                purposes of subparagraph (A), the term `international 
                commercial transportation' means transportation in the 
                trade or business of transporting persons or property 
                for hire--
                            ``(i) by any vessel actually engaged in 
                        foreign trade or trade between the United 
                        States and any of its possessions, or
                            ``(ii) by aircraft from a point within the 
                        United States to a point outside the United 
                        States and outside the 225-mile zone (as 
                        defined in section 4262(c)(2)).
            ``(3) Vendor requirements.--A payment may be made under 
        this subsection to a vendor only if the vendor establishes that 
        such vendor--
                    ``(A)(i) has not included the tax in the price of 
                the product, and
                    ``(ii) has not collected the tax from the purchaser 
                of such product, or
                    ``(B) has agreed to repay the tax to the purchaser.
    ``(c) Production of Calcined Coke.--If tax was imposed under 
section 4441 with respect to any petroleum product and such product is 
used by any person to produce calcined coke, the Secretary shall pay to 
such person an amount equal to the sum of the base rate and the 
supplemental rate for each million Btu's of the actual Btu content of 
the coke produced.
    ``(d) Cross Reference.--

                                ``For refunds of gasoline and diesel 
fuel used on farms, see sections 6420(a) and 6427(m).

  ``PART II--IMPOSITION OF TAXES ON NATURAL GAS, COAL, AND ELECTRICITY

                              ``Sec. 4444. Natural gas.
                              ``Sec. 4445. Coal.
                              ``Sec. 4446. Electricity.

``SEC. 4444. NATURAL GAS.

    ``(a) Imposition of Tax.--
            ``(1) In general.--There is hereby imposed a tax on natural 
        gas--
                    ``(A) removed from any pipeline in the United 
                States,
                    ``(B) entered into the United States for 
                consumption, use, or warehousing, and
                    ``(C) entered into any pipeline the operator of 
                which is not registered under section 4453(d).
            ``(2) Exception for transfers to registered pipelines.--
                    ``(A) Pipeline to pipeline transfers.--The tax 
                imposed by paragraph (1) shall not apply to any removal 
                from a pipeline to another pipeline if the operators of 
                both pipelines are registered under section 4453(d).
                    ``(B) Entry into united states to pipeline 
                transfers.--The tax imposed by paragraph (1) shall not 
                apply to any entry into the United States if--
                            ``(i) pursuant to such entry the natural 
                        gas is entered into any pipeline, and
                            ``(ii) the operator of such pipeline is 
                        registered under section 4453(d).
    ``(b) Rate of Tax.--
            ``(1) In general.--The amount of the tax imposed by 
        subsection (a) on each MCF of natural gas shall be the base 
        rate multiplied by the applicable per unit Btu factor.
            ``(2) Authority to use actual btu content.--To the extent 
        provided in regulations prescribed by the Secretary, the amount 
        of the tax imposed by subsection (a) shall be the base rate for 
        each million Btu's of the actual Btu content of the natural 
        gas.
    ``(c) Liability for, and Collection of, Tax.--
            ``(1) In general.--The tax imposed by subsection 
        (a)(1)(A)--
                    ``(A) shall be paid by the person receiving the 
                natural gas, and
                    ``(B) shall be collected by the operator of the 
                pipeline.
            ``(2) Importation.--The tax imposed by subsection (a)(1)(B) 
        shall be paid by the person entering the natural gas into the 
        United States for consumption, use, or warehousing.
            ``(3) Entry into unregistered pipelines.--The tax imposed 
        by subsection (a)(1)(C) shall be paid by the person entering 
        the natural gas.
            ``(4) Collection of tax.--
                    ``(A) In general.--In the case of natural gas 
                removed from a local distribution system, the operator 
                shall also be liable for any tax imposed by subsection 
                (a) which is not collected from the person receiving 
                the natural gas.
                    ``(B) Exception for large users from local 
                distribution systems.--Subparagraph (A) shall not apply 
                to natural gas received by any person during any month 
                from a local distribution system if the value 
                (exclusive of taxes) of the natural gas received by 
                such person from such system during the 12-month period 
                ending before such month exceeded $3,500,000.
    ``(d) Definitions.--For purposes of this subchapter--
            ``(1) Applicable per unit btu factor.--
                    ``(A) In general.--The applicable per unit Btu 
                factor with respect to natural gas is 1.031 per MCF.
                    ``(B) Cross Reference.--

                                ``For authority to adjust per unit Btu 
amounts, see section 4453(e).
            ``(2) Pipeline.--The term `pipeline' includes a local 
        distribution system. To the extent provided in regulations 
        prescribed by the Secretary, such term includes a gathering 
        system.
            ``(3) Natural gas.--The term `natural gas' includes 
        synthetic natural gas produced from coal or from any petroleum 
        product.
            ``(4) MCF.--The term `MCF' means 1,000 cubic feet of 
        natural gas measured at a pressure of 14.73 pounds per square 
        inch (absolute) and a temperature of 60 degrees Fahrenheit.
    ``(e) Exemption From Tax for Certain Uses.--
            ``(1) In general.--No tax shall be imposed by subparagraph 
        (A) or (B) of subsection (a)(1)--
                    ``(A) on any natural gas which is used in an exempt 
                natural gas use by the person otherwise liable for such 
                tax, or
                    ``(B) by reason of a removal or entry of natural 
                gas for an exempt natural gas use by the person 
                receiving the natural gas.
            ``(2) Exempt natural gas use.--For purposes of this 
        subsection, the term `exempt natural gas use' means--
                    ``(A) use in the generation of electricity,
                    ``(B) any qualified feedstock use, or
                    ``(C) use in enhanced heavy oil recovery.
            ``(3) Qualified feedstock use.--For purposes of this 
        subsection--
                    ``(A) In general.--In the case of any qualified 
                feedstock use, only the exempt percentage of the 
                natural gas shall be exempt from tax under paragraph 
                (1).
                    ``(B) Qualified feedstock use; exempt percentage.--
                The terms `qualified feedstock use' and `exempt 
                percentage' have the respective meanings given such 
                terms by section 4442(a)(3) determined by substituting 
                `natural gas' for `taxable refined petroleum product' 
                each place it appears.
            ``(4) Enhanced heavy oil recovery.--For purposes of this 
        subsection--
                    ``(A) In general.--Natural gas shall be treated as 
                used in enhanced heavy oil recovery if such gas is used 
                in an enhanced oil recovery project in the United 
                States for the recovery of oil having a weighted 
                average gravity of 20 degrees API or less (corrected to 
                60 degrees Fahrenheit).
                    ``(B) Enhanced oil recovery project.--For purposes 
                of subparagraph (A), the term `enhanced oil recovery 
                project' means any project which involves the 
                application (in accordance with sound engineering 
                principles) of 1 or more tertiary recovery methods (as 
                defined in section 193(b)(3)) which can reasonably be 
                expected to result in more than an insignificant 
                increase in the amount of crude oil which will 
                ultimately be recovered.
            ``(5) Registration requirements.--To the extent provided by 
        the Secretary, paragraph (1) shall not apply to any taxable 
        event unless the requirements of section 4442(a)(4) are met 
        with respect to such event.
            ``(6) Refunds of natural gas purchased tax-paid.--If tax 
        was imposed by this section with respect to any natural gas and 
        such gas is used by any person in an exempt natural gas use, 
        the Secretary shall pay to such person an amount equal to the 
        tax so imposed (or, in the case of a qualified feedstock use, 
        the exempt percentage of the tax so imposed).
            ``(7) Cross reference.--

                              ``For tax on fuel used to produce steam 
at facility which also generates electricity, see section 4451(e).
    ``(f) Methane Recovered From Biomass or Coal Mining.--
            ``(1) In general.--If--
                    ``(A) methane is recovered from biomass or in 
                conjunction with room and pillar or long wall coal 
                mining operations, and
                    ``(B) such methane is entered into any natural gas 
                pipeline,
        the Secretary shall pay to the person so entering such methane 
        an amount equal to the amount of tax which would be imposed 
        under this section on such methane if such entry were a taxable 
        event under such section.
            ``(2) Recapture of credit for methane recovered from coal 
        mining in certain cases.--
                    ``(A) In general.--If--
                            ``(i) the Secretary has made a payment 
                        under paragraph (1) to any person with respect 
                        to methane recovered from coal mining 
                        operations before the date the actual mining 
                        commences, and
                            ``(ii)(I) such person disposes of his 
                        interest in such coal mining operations, or
                            ``(II) the actual mining commences more 
                        than 10 years after the date such methane was 
                        first recovered,
                then the tax under chapter 1 of such person for the 
                taxable year in which such disposition occurs (or, in a 
                case to which clause (ii)(II) applies, such 10th year 
                ends) shall be increased by the aggregate of such 
                payments to such person plus interest at the 
                underpayment rate under section 6621 for the periods 
                beginning on the dates such payments were made.
                    ``(B) No further payments until mining commences.--
                If there is an increase in tax under subparagraph (A) 
                with respect to any payments for methane recovered from 
                any site, no further payments shall be made under this 
                subsection with respect to methane recovered from such 
                site until actual mining commences at such site.
                    ``(C) No credits against tax, etc.--Any increase in 
                tax under this paragraph shall not be taken into 
                account in determining the amount of any credit 
                allowable under part IV of subchapter A of chapter 1 or 
                in determining the amount of the tax imposed by section 
                55.
                    ``(D) Changes in form of business disregarded.--A 
                person shall not be treated as disposing of an interest 
                in coal mining operations by reason of a mere change in 
                the form of conducting the trade or business so long as 
                the coal mining operations are retained in such trade 
                or business and the taxpayer retains a substantial 
                interest in such trade or business.
    ``(g) Refunds in Certain Cases.--A rule similar to the rule of 
section 4441(g) shall apply to the tax imposed by this section.

``SEC. 4445. COAL.

    ``(a) General Rule.--There is hereby imposed a tax on coal received 
at any facility in the United States for use as a fuel at such 
facility.
    ``(b) Rate of Tax.--The amount of the tax imposed by subsection (a) 
shall be the base rate for each million Btu's of the actual Btu content 
of the coal. For purposes of the preceding sentence, the actual Btu 
content of any coal shall be determined under procedures prescribed by 
the Secretary.
    ``(c) Liability for Tax.--
            ``(1) In general.--Except as otherwise provided in this 
        subsection, the tax imposed by subsection (a) shall be paid by 
        the operator of the facility.
            ``(2) Coal received at small facilities.--If the ultimate 
        vendor of coal received at a facility receives a certificate 
        from the operator of such facility (or otherwise determines) 
        that such facility received less than 1,000 tons of coal during 
        the preceding calendar year, the tax imposed by subsection (a) 
        shall be paid by the ultimate vendor.
            ``(3) Residential property.--
                    ``(A) In general.--In the case of coal received at 
                a residential property, the tax imposed by subsection 
                (a) shall be paid by the ultimate vendor.
                    ``(B) Residential property.--For purposes of this 
                paragraph, the term `residential property' means any 
                building which contains 1 or more dwelling units used 
                for residential purposes other than on a transient 
                basis.
    ``(d) Exemption From Tax for Certain Uses.--
            ``(1) In general.--No tax shall be imposed by subsection 
        (a) on coal received for--
                    ``(A) use in the generation of electricity,
                    ``(B) any qualified feedstock use,
                    ``(C) use in enhanced heavy oil recovery (as 
                determined under section 4444(e)(4) by substituting 
                `coal' for `natural gas'),
                    ``(D) use in the manufacture or production of 
                synthetic natural gas or any other synthetic fuel 
                specified in regulations prescribed by the Secretary, 
                or
                    ``(E) any use in a vessel used in international 
                commercial transportation (as defined in section 
                4442(b)(2)(B)(i)).
            ``(2) Qualified feedstock use.--For purposes of this 
        subsection--
                    ``(A) In general.--In the case of any qualified 
                feedstock use, only the exempt percentage of the coal 
                shall be exempt from tax under paragraph (1).
                    ``(B) Qualified feedstock use; exempt percentage.--
                The terms `qualified feedstock use' and `exempt 
                percentage' have the respective meanings given such 
                terms by section 4442(a)(3) determined by substituting 
                `coal' for `taxable refined petroleum product' each 
                place it appears.
            ``(3) Cross reference.--

                              ``For tax on fuel used to produce steam 
at facility which also generates electricity, see section 4451(e).
    ``(e) Production of Coke for Steel.--If tax was imposed under this 
subchapter with respect to any coal and such coal is used by any person 
to produce coke for use in the reduction of iron-bearing ores in the 
iron and steel process, the Secretary shall pay to such person an 
amount equal to the base rate for each million Btu's of the actual Btu 
content of the coke produced.

``SEC. 4446. ELECTRICITY.

    ``(a) General Rule.--There is hereby imposed a tax on--
            ``(1) the sale of electricity to ultimate users in the 
        United States, and
            ``(2) the use of electricity in the United States which was 
        not subject to tax under paragraph (1).
    ``(b) Rate of Tax.--The amount of the tax imposed by subsection (a) 
on each kilowatt hour of electricity sold or used during any month 
shall be the deemed Btu tax per kilowatt hour applicable for such 
month--
            ``(1) to the seller in the case of the tax imposed by 
        subsection (a)(1), and
            ``(2) to the user in the case of the tax imposed by 
        subsection (a)(2).
    ``(c) Liability for, and Collection of, Tax.--
            ``(1) Sales.--The tax imposed by subsection (a)(1)--
                    ``(A) shall be paid by the person to whom the 
                electricity is sold, and
                    ``(B) shall be collected by the seller.
            ``(2) Uses.--The tax imposed by subsection (a)(2) shall be 
        paid by the person using the electricity.
            ``(3) Collection of tax.--
                    ``(A) In general.--The seller shall also be liable 
                for the tax imposed by subsection (a)(1) which is not 
                collected from the person to whom the electricity is 
                sold.
                    ``(B) Exception for large users.--Subparagraph (A) 
                shall not apply to electricity sold to any person 
                during any month by the seller if the amount paid by 
                such person for electricity (exclusive of taxes) sold 
                by such seller during the 12-month period ending before 
                such month exceeded $3,500,000.
    ``(d) Deemed Btu Taxes.--For purposes of this section--
            ``(1) In general.--The deemed Btu taxes per kilowatt hour 
        of electricity applicable to any person for any month shall be 
        the weighted average of--
                    ``(A) the deemed Btu taxes per kilowatt hour of 
                electricity generated at each facility of the person 
                during the base period, and
                    ``(B) the deemed Btu taxes per kilowatt hour of 
                electricity purchased by such person during the base 
                period.
        For purposes of this paragraph, the term `base period' means, 
        with respect to any month, the 2d month preceding such month.
            ``(2) Deemed btu taxes per facility.--The deemed Btu taxes 
        per kilowatt hour of electricity generated at any facility 
        during any month shall be determined by dividing--
                    ``(A) the deemed Btu taxes on fuels used at such 
                facility to generate electricity during such month by
                    ``(B) the aggregate kilowatt hours of electricity 
                generated at such facility during such month.
            ``(3) Deemed btu taxes.--
                    ``(A) In general.--Except as otherwise provided in 
                this paragraph, the term `deemed Btu taxes' means, with 
                respect to electricity, the aggregate taxes which would 
                have been imposed by this subchapter on the fuels used 
                to generate such electricity--
                            ``(i) but for the exemption of such fuels 
                        from such taxes, and
                            ``(ii) determined as of the month for which 
                        the rate of the tax imposed by subsection (a) 
                        is being determined.
                    ``(B) Electricity generated by hydropower or 
                nuclear power.--The deemed Btu taxes per kilowatt hour 
                of electricity generated by hydropower or nuclear power 
                shall be equal to the base rate multiplied by a 
                fraction the numerator of which is 10,335 and the 
                denominator of which is 1,000,000.
                    ``(C) Imported electricity.--
                            ``(i) In general.--Except as provided in 
                        clause (ii), the deemed Btu taxes per kilowatt 
                        hour of electricity transmitted into the United 
                        States shall be determined as if such 
                        electricity were generated by hydropower.
                            ``(ii) Lower deemed btu tax may be 
                        established.--If the importer establishes to 
                        the satisfaction of the Secretary the amount 
                        which would be the deemed Btu taxes per 
                        kilowatt hour of the electricity if the 
                        electricity were generated in the United 
                        States, such amount shall be used in lieu of 
                        the amount under clause (i).
                    ``(D) Electricity generated by renewable sources.--
                The deemed Btu taxes per kilowatt hour of electricity 
                generated from any renewable source shall be zero. For 
                purposes of the preceding sentence, the term `renewable 
                source' means solar energy, wind energy, any geothermal 
                deposit, biomass, municipal solid waste, and tires.
            ``(4) Sellers to specify deemed btu taxes.--
                    ``(A) In general.--In the case of electricity which 
                is sold other than to the ultimate user, the seller 
                shall certify to the purchaser the deemed Btu taxes per 
                kilowatt hour of the electricity sold.
                    ``(B) Failure to certify.--If the seller fails to 
                so certify--
                            ``(i) the tax imposed by subsection (a) 
                        shall apply to such sale at the rate specified 
                        in subparagraph (C),
                            ``(ii) the tax imposed by subsection (a) 
                        shall apply to any subsequent sale or use 
                        without regard to clause (i), and
                            ``(iii) the rate specified in subparagraph 
                        (C) shall be the deemed Btu taxes per kilowatt 
                        hour of such electricity for purposes of 
                        determining the tax imposed by subsection (a) 
                        on any subsequent sale or use of such 
                        electricity.
                    ``(C) Rate.--The rate specified in this 
                subparagraph is, for each kilowatt hour, the product 
                of--
                            ``(i) the sum of the base rate and the 
                        supplemental rate, multiplied by
                            ``(ii) a fraction the numerator of which is 
                        10,335 and the denominator of which is 
                        1,000,000.
            ``(5) Regulations.--The Secretary shall prescribe such 
        regulations as may be necessary or appropriate to carry out 
        this subsection, including regulations--
                    ``(A) prescribing a base period to be used by any 
                person not in existence during the base period, and
                    ``(B) prescribing such other modifications to the 
                application of this subsection as are necessary to 
                carry out the purposes of this subsection.
    ``(e) Exceptions.--
            ``(1) Electricity used in certain electrolytic processes.--
                    ``(A) In general.--In the case of electricity used 
                in any electrolytic process, the tax imposed by this 
                section shall not apply to the feedstock portion of 
                such electricity.
                    ``(B) Feedstock portion.--For purposes of 
                subparagraph (A), the feedstock portion of electricity 
                is the portion of the electrical energy which is 
                incorporated into the manufactured product.
            ``(2) Electricity used to generate pumped storage, etc.--
        The tax imposed by this section shall not apply to electricity 
        used in the United States to create any hydropower source to 
        generate electricity. The electricity generated by such 
        hydropower source shall be disregarded in determining the 
        deemed Btu taxes of the electricity.
            ``(3) Use tax exception.--The Secretary may provide by 
        regulations that the tax imposed by subsection (a)(2) shall not 
        apply in cases where the Secretary determines that such an 
        exception is warranted, after taking into account the 
        protection of revenues to the United States from this 
        subchapter and the ease of administration for both taxpayers 
        and the Secretary.

                         ``PART III--TAX RATES

                              ``Sec. 4448. Tax rates.

``SEC. 4448. TAX RATES.

    ``(a) Base Rate.--For purposes of this subchapter--
            ``(1) Phase-in rates.--Effective during--
                    ``(A) the 1-year period beginning on July 1, 1994, 
                the base rate is 8.9 cents, and
                    ``(B) the 1-year period beginning on July 1, 1995, 
                the base rate is 17.9 cents.
            ``(2) Permanent unindexed rate.--Effective on and after 
        July 1, 1996, the base rate is 26.8 cents.
            ``(3) Indexed rates.--
                    ``(A) In general.--Effective during any calendar 
                year after 1997, the base rate under paragraph (2) 
                shall be increased by an amount equal to--
                            ``(i) 26.8 cents, multiplied by
                            ``(ii) the inflation adjustment for such 
                        calendar year.
                    ``(B) Inflation adjustment.--For purposes of 
                subparagraph (A), the inflation adjustment for any 
                calendar year is the percentage (if any) by which--
                            ``(i) the GDP deflator for the preceding 
                        calendar year, exceeds
                            ``(ii) the GDP deflator for 1996.
                    ``(C) GDP deflator for calendar year.--For purposes 
                of subparagraph (B), the GDP deflator for any calendar 
                year is the GDP deflator for the second calendar 
                quarter of such year.
                    ``(D) GDP deflator.--For purposes of subparagraph 
                (C), the term `GDP deflator' means the most recent 
                revision of the implicit price deflator for the gross 
                domestic product as computed and published by the 
                Department of Commerce before November 15 of the 
                calendar year referred to in subparagraph (B)(i).
    ``(b) Supplemental Rate.--For purposes of this subchapter--
            ``(1) Phase-in rates.--Effective during--
                    ``(A) the 1-year period beginning on July 1, 1994, 
                the supplemental rate is 11.4 cents, and
                    ``(B) the 1-year period beginning on July 1, 1995, 
                the supplemental rate is 22.8 cents.
            ``(2) Permanent unindexed rate.--Effective on and after 
        July 1, 1996, the supplemental rate is 34.2 cents.
            ``(3) Indexed rates.--Effective during any calendar year 
        after 1997, the supplemental rate under paragraph (2) shall be 
        increased by an amount equal to--
                    ``(A) 34.2 cents, multiplied by
                    ``(B) the inflation adjustment for such calendar 
                year determined under subsection (a)(3)(B).
    ``(c) Rounding.--If any increase determined under subsection (a)(3) 
or (b)(3) is not a multiple of 0.1 cent, such increase shall be rounded 
to the nearest multiple of 0.1 cent.

 ``PART IV--USE TAXES; FLOOR STOCKS TAXES; ADMINISTRATIVE PROVISIONS; 
                     DEFINITIONS AND SPECIAL RULES

                              ``Sec. 4451. Tax on certain uses.
                              ``Sec. 4452. Floor stocks taxes.
                              ``Sec. 4453. Administrative provisions.
                              ``Sec. 4454. Definitions and special 
                                        rules.

``SEC. 4451. TAX ON CERTAIN USES.

    ``(a) General Rule.--There is hereby imposed a tax on the use of 
any fossil fuel--
            ``(1) in the manufacture or production in the United States 
        of a fuel other than at a refinery, or
            ``(2) as a fuel.
The preceding sentence shall not apply if tax was imposed under this 
subchapter before such use and such tax is not credited or refunded.
    ``(b) Rate of Tax.--
            ``(1) In general.--Except as otherwise provided in this 
        subsection, the amount of tax imposed by subsection (a) shall 
        be the amount which would be imposed under the appropriate 
        section of part I or II if such use were a taxable event under 
        such section.
            ``(2) Crude oil and other products not taxed on removal or 
        importation.--The amount of the tax imposed by subsection (a) 
        on crude oil or other product not subject to tax under part I 
        or II shall be the base rate (increased by the supplemental 
        rate in the case of crude oil or any petroleum product other 
        than any liquefied petroleum gas, isopentane, and natural 
        gasoline) for each million Btu's of the Btu content of such oil 
        or product.
            ``(3) Authority to prescribe applicable per unit btu 
        factors.--In the case of crude oil or any other product for 
        which an applicable per unit Btu factor is not prescribed for 
        purposes of part I or II, the Secretary may prescribe such a 
        factor, and, if so prescribed, such factor shall apply for 
        purposes of paragraph (2).
    ``(c) Liability for Tax.--The taxes imposed by subsection (a) shall 
be paid by the person using the fuel.
    ``(d) Exceptions.--
            ``(1) In general.--Except as provided in subsection (e), 
        the tax imposed by this section shall not apply to--
                    ``(A) any use to which section 4442, section 
                4444(e), or subsection (d) or (e) of section 4445 
                applies, or
                    ``(B) any use of methane described in section 
                4444(f)(1)(A).
            ``(2) Use on production premises.--The tax imposed by this 
        section shall not apply to any use of crude oil or natural gas 
        for producing crude oil or natural gas if--
                    ``(A) in the case of crude oil, it is used before 
                entry at the lease automatic custody transfer point (or 
                its manual equivalent), and
                    ``(B) in the case of natural gas, it is used before 
                entry into an interstate or intrastate transmission 
                pipeline.
            ``(3) Crude oil used at refinery, etc.--The tax imposed by 
        this section shall not apply to--
                    ``(A) any use of crude oil at a facility at which 
                crude oil is refined or any use at such facility of any 
                product produced at such facility,
                    ``(B) any use of natural gas at a natural gas 
                processing or fractionation plant or any use at such 
                plant of any product produced at such plant, or
                    ``(C) any use of ethanol at a facility at which 
                ethanol is produced for use as a fuel.
            ``(4) Otherwise taxable event occurring before effective 
        date.--The tax imposed by this section shall not apply to any 
        use if no tax would be imposed by this section on such use were 
        this subchapter in effect for all periods before July 1, 1994.
    ``(e) Generation of Steam and Electricity.--
            ``(1) In general.--In the case of a facility which uses any 
        taxable refined petroleum product, natural gas, or coal--
                    ``(A) to generate electricity, and
                    ``(B) to produce steam which is used or which is 
                furnished or sold in the trade or business of the 
                furnishing or sale of steam,
        the tax imposed by subsection (a) shall apply to the use of 
        such product, gas, or coal at such facility to the extent such 
        use is attributable (determined on the basis of the 
        proportionate Btu content of the electricity and the steam) to 
        the production of steam which is so used, furnished, or sold.
            ``(2) Exceptions.--Paragraph (1) shall not apply to steam 
        used for any purpose if tax would not be imposed under this 
        subchapter on the fuel used to produce the steam had such fuel 
        been used directly for such purpose.
    ``(f) Treatment of Natural Gas Lost in Transmission.--For purposes 
of this section, natural gas lost in transmission by a pipeline shall 
be treated as used as a fuel for such pipeline.

``SEC. 4452. FLOOR STOCKS TAXES.

    ``(a) Imposition of Tax.--There is hereby imposed a tax on any 
taxable fuel which on any tax-increase date is held in the United 
States by any person.
    ``(b) Amount of Tax.--The amount of the tax imposed by subsection 
(a) on any taxable fuel with respect to any tax-increase date shall be 
equal to the excess (if any) of--
            ``(1) the amount of tax which would be imposed under part I 
        or II if a taxable event with respect to such fuel had occurred 
        on such date, over
            ``(2) the prior tax (if any) imposed by this subchapter on 
        such fuel.
    ``(c) Liability for Tax.--The person holding the taxable fuel on 
any tax-increase date shall pay the tax imposed by subsection (a).
    ``(d) Exceptions.--The tax imposed by subsection (a) shall not 
apply to--
            ``(1) any taxable fuel held before the point where it would 
        otherwise be subject to tax under part I or II, or
            ``(2) any taxable fuel held by any person exclusively for 
        any use by such person to the extent a credit or refund (or 
        other payment) of the tax imposed by this section would be 
        allowable or payable if such tax were imposed by part I or II.
    ``(e) Credit Against Tax.--
            ``(1) In general.--Each person shall be allowed $200 as a 
        credit against the taxes imposed by subsection (a) with respect 
        to each tax-increase date. Such credit shall not exceed the 
        amount of taxes imposed by subsection (a) for which such person 
        is liable with respect to such date.
            ``(2) Controlled groups.--For purposes of paragraph (1)--
                    ``(A) all persons who are treated as a single 
                employer under subsection (a) or (b) of section 52 
                shall be treated as 1 taxpayer, and
                    ``(B) the $200 amount specified in paragraph (1) 
                shall be apportioned among such persons under 
                regulations prescribed by the Secretary.
    ``(f) Definitions.--For purposes of this section--
            ``(1) Taxable fuel.--The term `taxable fuel' means any 
        taxable refined petroleum product, natural gas, or coal.
            ``(2) Tax-increase date.--The term `tax-increase date' 
        means--
                    ``(A) July 1, 1994,
                    ``(B) July 1, 1995,
                    ``(C) July 1, 1996, and
                    ``(D) January 1 of each calendar year for which 
                there is an increase in a rate of tax by reason of 
                subsection (a)(3) or (b)(3) of section 4448 (relating 
                to inflation adjustment).
    ``(g) Due Date.--The tax imposed by subsection (a) shall be paid on 
or before the close of the 7-month period beginning on the tax-increase 
date.

``SEC. 4453. ADMINISTRATIVE PROVISIONS.

    ``(a) Rules Relating to Refunds for Exempt and Other Uses.--
            ``(1) Period for filing claims.--No payment shall be made 
        under section 4442, 4444(f), or 4445(e) unless, within 2 years 
        after the date that the event occurs giving rise to a right to 
        such payment, a claim therefor is filed by the person entitled 
        to such payment.
            ``(2) Denial of interest.--Except as provided in paragraph 
        (3), no interest shall be paid on claims for payments under 
        section 4442, 4444(f), or 4445(e).
            ``(3) Minimum amounts and periods.--In the case of persons 
        who meet such requirements as the Secretary may prescribe, if--
                    ``(A) a claim for payment is filed under section 
                4442, 4444(f), or 4445(e) for any period for which more 
                than $1,000 is payable and which is not less than 1 
                week, and
                    ``(B) the Secretary has not paid such claim within 
                20 days after the date the claim was filed,
        such claim shall be paid with interest from such date using the 
        overpayment rate and method under section 6621. The preceding 
        sentence shall not apply to a claim filed under section 
        4442(b)(1). Nothing in section 6611(e) shall bar interest 
        payable under this paragraph.
            ``(4) Heating oil.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), not more than 1 claim may be filed 
                under section 4442(b)(1) by any person with respect to 
                fuel oil sold by such person during any calendar year.
                    ``(B) Exception.--If $1,000 or more is payable 
                under section 4442(b)(1) to any person with respect to 
                fuel oil sold during any of the 1st 3 quarters of the 
                calendar year, a claim may be filed under section 
                4442(b)(1) with respect to fuel oil sold during such 
                quarter. No claim filed under this subparagraph shall 
                be allowed unless filed on or before the last day of 
                the 1st quarter following the quarter for which the 
                claim is filed.
            ``(5) Applicable laws.--
                    ``(A) In general.--All provisions of law, including 
                penalties, applicable in respect of the tax imposed by 
                this subchapter shall, insofar as applicable and not 
                inconsistent with this subsection and section 4442, 
                4444(f), or 4445(e), apply in respect of payments 
                provided for in such section to the same extent as if 
                such payments constituted refunds of overpayments of 
                the tax so imposed.
                    ``(B) Examination of books and witnesses.--For the 
                purpose of ascertaining the correctness of any claim 
                made under section 4442, 4444(f), or 4445(e), or the 
                correctness of any payment made in respect of such 
                claim, the Secretary shall have the authority granted 
                by paragraphs (1), (2), and (3) of section 7602(a) 
                (relating to examination of books and witnesses) as if 
                the claimant were the person liable for tax.
    ``(b) Payment of Tax to Persons Required to Collect Tax.--
            ``(1) Payment within 30 days.--In the case of the taxes 
        imposed by sections 4444 and 4446 which are required to be 
        collected by another person, the person liable for such tax 
        shall remit the tax to such other person within 30 days after 
        the date of the taxable event.
            ``(2) Relief from penalty for certain failures to collect 
        tax.--No penalty shall be imposed under this title on the 
        failure of any person to collect the taxes referred to in 
        paragraph (1) if--
                    ``(A) during the 30-day period referred to in 
                paragraph (1), such person exercises due diligence in 
                attempting to collect such tax, and
                    ``(B) such person notifies the Secretary, within 15 
                days after the close of the month in which such 30-day 
                period ends, of the failure to collect such tax and 
                provides such other information as the Secretary may 
                require.
            ``(3) Exception for persons with secondary liability.--
        Paragraphs (1) and (2) shall not apply if the person required 
        to collect the tax is required to pay any portion of such tax 
        which is not paid by the person primarily liable for such tax.
    ``(c) Information Reporting.--The Secretary may require--
            ``(1) information reporting by each remitter of tax imposed 
        by this subchapter, and
            ``(2) information reporting by, and registration of, such 
        other persons as the Secretary deems necessary to carry out 
        this subchapter.
    ``(d) Registration.--
            ``(1) In general.--Every person required by the Secretary 
        to register under this subsection with respect to any tax 
        imposed by this subchapter shall register with the Secretary at 
        such time, in such form and manner, and subject to such terms 
        and conditions, as the Secretary may by regulations prescribe. 
        A registration under this subsection may be used only in 
        accordance with regulations prescribed under this section.
            ``(2) Other rules.--Rules similar to the rules of section 
        4101(b) and 4222(c) shall apply for purposes of this 
        subsection.
    ``(e) Adjustments to Per Unit Btu Factors.--
            ``(1) In general.--If the Secretary determines that the 
        applicable per unit Btu factor then in effect for any taxable 
        refined petroleum product or natural gas does not, when 
        multiplied by 1,000,000, properly reflect the Btu content per 
        unit for such substance (in the circumstances where taxable 
        events under this subchapter occur with respect to such 
        substance), the Secretary may modify the applicable per unit 
        Btu factor for such substance. Any such modification shall be 
        effective as of the date prescribed by the Secretary.
            ``(2) Modification of list of refined petroleum products.--
        The Secretary may modify, as appropriate, the list of refined 
        petroleum products in section 4441 for which applicable per 
        unit Btu factors are separately determined.

``SEC. 4454. DEFINITIONS AND SPECIAL RULES.

    ``(a) Definitions.--For purposes of this subchapter--
            ``(1) Fossil fuel.--The term `fossil fuel' means crude oil, 
        any petroleum product, natural gas, any natural gas product, 
        and coal.
            ``(2) Crude oil.--The term `crude oil' includes condensates 
        from crude oil.
            ``(3) Coal.--The term `coal' includes lignite.
            ``(4) United states.--The term `United States' means the 50 
        States, the District of Columbia, and the foreign trade zones 
        of the United States.
            ``(5) Person.--The term `person' includes the United 
        States, any State or political subdivision thereof, the 
        District of Columbia, and any agency or instrumentality of any 
        of the foregoing.
    ``(c) Fractional Part of Unit.--In the case of a fraction of a 
unit, the tax imposed by this subchapter shall be the same fraction of 
the amount of such tax imposed on a whole unit.
    ``(d) Special Rules Relating to Puerto Rico and the Virgin 
Islands.--
            ``(1) Like tax on articles brought into the united states 
        from puerto rico or the virgin islands.--For purposes of this 
        subchapter, articles brought into the United States from the 
        Commonwealth of Puerto Rico or the Virgin Islands shall be 
        treated as entered into the United States at the time brought 
        into the United States.
            ``(2) Disposition of revenues.--The provisions of 
        subsections (a)(3) and (b)(3) of section 7652 shall not apply 
        to any tax imposed by this subchapter.
    ``(e) No Exemption From Tax.--No person shall be exempt from any 
tax imposed by this subchapter except to the extent provided in this 
subchapter or in any provision of law enacted after the date of the 
enactment of this subchapter which grants a specific exemption, by 
reference to this subchapter, from a tax imposed by this subchapter.

             ``PART V--TAX ON IMPORTED HIGH-ENERGY PRODUCTS

                              ``Sec. 4456. Imposition of tax.
                              ``Sec. 4457. Definitions and special 
                                        rules.

``SEC. 4456. IMPOSITION OF TAX.

    ``(a) General Rule.--There is hereby imposed a tax on any taxable 
high-energy product entered into the United States for consumption, 
use, or warehousing.
    ``(b) Amount of Tax.--The amount of the tax imposed by subsection 
(a) on any taxable high-energy product shall be the imputed Btu tax 
with respect to such product.
    ``(c) Liability for Tax.--The tax imposed by subsection (a) shall 
be paid by the person entering the product for consumption, use, or 
warehousing.

``SEC. 4457. DEFINITIONS AND SPECIAL RULES.

    ``(a) Taxable High-Energy Product.--For purposes of this part--
            ``(1) In general.--The term `taxable high-energy product' 
        means any product which, at the time entered into the United 
        States for consumption, use, or warehousing, is listed as a 
        taxable high-energy product by the Secretary.
            ``(2) Determination of products on list.--A product shall 
        be listed under paragraph (1) if the product is produced in an 
        industry identified (using 4-digit SIC codes) in the most 
        recent census of manufacturing as producing products which on 
        average have more than 2 percent of their value attributable to 
        direct energy inputs (exclusive of the tax imposed by parts I 
        and II) of taxable energy sources.
            ``(3) Taxable energy source.--The term `taxable energy 
        source' means any taxable refined petroleum product, natural 
        gas, coal, and electricity.
    ``(b) Imputed Btu Tax.--For purposes of this part--
            ``(1) In general.--Except as otherwise provided in this 
        subsection, the term `imputed Btu tax' means, with respect to 
        any taxable high-energy product, the amount of tax which would 
        have been imposed by parts I and II on taxable energy sources 
        directly used in the manufacture or production of the product 
        if--
                    ``(A) such product were manufactured or produced 
                using the predominant method of manufacture or 
                production of such product in the United States, and
                    ``(B) such taxable energy sources had been subject 
                to tax under such parts on the date of the entry of the 
                product into the United States for consumption, use, or 
                warehousing.
            ``(2) Tax where information furnished.--If the person 
        liable for the tax imposed by section 4456 with respect to any 
        product furnishes to the Secretary (at such time and in such 
        manner as the Secretary shall prescribe) sufficient information 
        to determine the imputed Btu tax with respect to such product, 
        the imputed Btu tax determined using such information shall 
        apply in lieu of the amount determined under paragraph (1).
    ``(c) Requests To Change List.--If any importer or producer of any 
product requests that the Secretary determine whether--
            ``(1) such product should be listed as a taxable high-
        energy product under subsection (a)(1) or be removed from such 
        listing, or
            ``(2) the imputed Btu tax for such product under subsection 
        (b)(1),
the Secretary shall make such determination within 180 days after the 
date the request was filed.''
    (b) Refunds for Farm Use of Gasoline and Diesel Fuel.--
            (1) Gasoline.--
                    (A) Subsection (a) of section 6420 is amended by 
                adding at the end thereof the following new flush 
                sentence:
``If the supplemental rate of the tax imposed by section 4441 was 
imposed on such gasoline, the Secretary shall also pay (without 
interest) to such ultimate purchaser an amount equal to the product of 
such supplemental rate and the applicable per unit Btu factor per 
barrel (determined under section 4441) of the gasoline so used.''
                    (B) Subsection (h) of section 6420 is amended by 
                inserting ``and taxes imposed by section 4441'' after 
                ``financing rate''.
            (2) Diesel fuel.--
                    (A) Section 6427 is amended by redesignating 
                subsections (m) through (r) as subsections (n) through 
                (s), respectively, and by inserting after subsection 
                (l) the following new subsection:
    ``(m) Refunds of Supplemental Rate of Btu Tax on Farm Use of Diesel 
Fuel.--Except as provided in subsection (k), if the supplemental rate 
of the tax imposed by section 4441 was imposed on diesel fuel used on a 
farm for farming purposes (within the meaning of section 6420(c)), the 
Secretary shall pay (without interest) to the ultimate purchaser of 
such fuel an amount equal to the product of such supplemental rate and 
the applicable per unit Btu factor per barrel (determined under section 
4441) of the diesel fuel so used.''
                    (B) Paragraph (1) of section 6427(i) is amended by 
                inserting ``(m),'' after ``(l),''.
                    (C) Paragraph (4) of section 6427(i), as amended by 
                subpart B, is amended--
                            (i) by striking ``or 4091'' in the 
                        paragraph heading and inserting ``, 4091, or 
                        4441'', and
                            (ii) by striking ``subsection (l)'' each 
                        place it appears and inserting ``subsections 
                        (l) and (m)''.
    (c) Civil Penalty For Using Reduced-Rate Fuel For Taxable Use.--
            (1) In general.--Part I of subchapter B of chapter 68 
        (relating to assessable penalties) is amended by adding at the 
        end thereof the following new section:

``SEC. 6714. DYED FUEL SOLD FOR USE OR USED IN TAXABLE USE.

    ``(a) Imposition of Penalty.--If any dyed fuel--
            ``(1) is sold by any person for any use which such person 
        knows or has reason to know is not a reduced-tax use of such 
        fuel, or
            ``(2) is used by any person for a use other than a reduced-
        tax use and such person knew, or had reason to know, that such 
        fuel was so dyed,
then, in addition to the tax, such person shall pay a penalty on such 
sale or use.
    ``(b) Amount of Penalty.--The amount of the penalty under 
subsection (a) on any sale or use shall be the greater of--
            ``(1) $1,000, or
            ``(2) an amount equal to twice the excess of the aggregate 
        taxes which should have been imposed under section 4441 on the 
        fuel so sold or used over the prior taxes (if any) imposed on 
        such fuel under such section which have not been credited or 
        refunded.
    ``(c) Definitions.--For purposes of this section--
            ``(1) Dyed fuel.--The term `dyed fuel' means--
                    ``(A) qualified heating oil (as defined in section 
                4441(b)(2)(B)), and
                    ``(B) diesel fuel dyed in accordance with section 
                4441(b)(2)(C).
            ``(2) Reduced-tax use.--The term `reduced-tax use' means, 
        with respect to any fuel, the use for which such fuel was 
        dyed.''
            (2) Clerical amendment.--The table of sections for such 
        part I is amended by adding at the end thereof the following 
        new item:

                              ``Sec. 6714. Dyed fuel sold for use or 
                                        used in taxable use.''
    (d) Technical Amendments.--
            (1)(A) Subsection (a) of section 6675 is amended by 
        inserting ``section 4442 (relating to refunds of petroleum tax 
        for certain sales and uses), section 4444(f) (relating to 
        methane recovered from biomass or coal mining), section 4445(e) 
        (relating to coal used in production of coke for steel),'' 
        before ``section 6420''.
            (B) Subsection (b) of section 6675 is amended by inserting 
        ``4442, 4444(f), 4445(e),'' before ``6420''.
            (2) Section 6206 is amended--
                    (A) by inserting ``(a) Fuel Taxes.--'' before ``Any 
                portion of'', and
                    (B) by adding at the end thereof the following new 
                subsection:
    ``(b) Btu Taxes.--Any portion of a payment made under section 4442, 
4444(f), or 4445(e) which constitutes an excessive amount (as defined 
in section 6675(b)), and any civil penalty provided by section 6675, 
may be assessed and collected as if it were a tax imposed by subchapter 
A of chapter 36 and as if the person who made the claim were liable for 
such tax. The period for assessing any such portion, and for assessing 
any such penalty, shall be 3 years from the last day prescribed for 
filing a claim under section 4442, 4444(f), or 4445(e).''
            (3)(A) The section heading for section 6206 is amended by 
        striking ``under sections 6420, 6421, and 6427'' and inserting 
        ``for certain fuels tax refunds and energy tax refunds''.
            (B) The item relating to section 6206 in the table of 
        sections for subchapter A of chapter 63 is amended by striking 
        ``under sections 6420, 6421, and 6427'' and inserting ``for 
        certain fuels tax refunds and energy tax refunds''.
            (4) Subparagraph (B) of section 6724(d)(1) is amended--
                    (A) by striking ``or'' at the end of clause (xi),
                    (B) by striking the period at the end of the clause 
                (xii) relating to section 4101(d) and inserting a 
                comma,
                    (C) by redesignating the clause (xii) relating to 
                section 338(h)(10)(C) as clause (xiii) and by striking 
                the period at the end thereof and inserting ``, or'', 
                and
                    (D) by inserting after clause (xiii), as so 
                redesignated, the following new clause:
                            ``(xiv) section 4453(c) (relating to 
                        information reporting with respect to energy 
                        taxes).''
            (5) Sections 7210, section 7603, subsections (b) and (c)(2) 
        of section 7604, section 7605, and 7610(c) are each amended by 
        inserting ``4453(a)(5)(B),'' before ``6420(e)(2)'' each place 
        it appears.
            (6) Subparagraph (A) of section 9505(c)(3) is amended by 
        striking ``subchapter A'' and inserting ``subchapter B''.
            (7) The table of subchapters for chapter 36 is amended by 
        striking the items relating to subchapters A and B and 
        inserting the following:

                              ``Subchapter A. Energy taxes.
                              ``Subchapter B. Harbor maintenance tax.
                              ``Subchapter C. Transportation by 
                                        water.''
    (e) Effective Date.--The amendments made by this section shall take 
effect on July 1, 1994.

             Subpart B--Modifications to Tax on Diesel Fuel

SEC. 14242. MODIFICATIONS TO TAX ON DIESEL FUEL.

    (a) In General.--Subparts A and B of part III of subchapter A of 
chapter 32 (relating to manufacturers excise taxes) are amended to read 
as follows:

                 ``Subpart A--Gasoline and Diesel Fuel

``Sec. 4081. Imposition of tax.
``Sec. 4082. Exemptions for diesel fuel.
``Sec. 4083. Definitions and special rule.
``Sec. 4084. Cross references.

``SEC. 4081. IMPOSITION OF TAX.

    ``(a) Tax Imposed.--
            ``(1) Tax on removal, entry, or sale.--
                    ``(A) In general.--There is hereby imposed a tax at 
                the rate specified in paragraph (2) on--
                            ``(i) the removal of a taxable fuel from 
                        any refinery,
                            ``(ii) the removal of a taxable fuel from 
                        any terminal,
                            ``(iii) the entry into the United States of 
                        any taxable fuel for consumption, use, or 
                        warehousing, and
                            ``(iv) the sale of a taxable fuel to any 
                        person who is not registered under section 4101 
                        unless there was a prior taxable removal or 
                        entry of such fuel under clause (i), (ii), or 
                        (iii).
                    ``(B) Exemption for bulk transfers to registered 
                terminals.--The tax imposed by this paragraph shall not 
                apply to any removal or entry of a taxable fuel 
                transferred in bulk to a terminal if the person 
                removing or entering the taxable fuel and the operator 
                of such terminal are registered under section 4101.
            ``(2) Rates of tax.--
                    ``(A) In general.--The rate of the tax imposed by 
                this section is the sum of--
                            ``(i) the Highway Trust Fund financing 
                        rate,
                            ``(ii) the Leaking Underground Storage Tank 
                        Trust Fund financing rate, and
                            ``(iii) the deficit reduction rate.
                    ``(B) Rates.--For purposes of subparagraph (A)--
                            ``(i) the Highway Trust Fund financing rate 
                        is--
                                    ``(I) 11.5 cents per gallon in the 
                                case of gasoline, and
                                    ``(II) 17.5 cents per gallon in the 
                                case of diesel fuel,
                            ``(ii) the Leaking Underground Storage Tank 
                        Trust Fund financing rate is 0.1 cent per 
                        gallon, and
                            ``(iii) the deficit reduction rate is 2.5 
                        cents per gallon.
    ``(b) Treatment of Removal or Subsequent Sale by Blender.--
            ``(1) In general.--There is hereby imposed a tax at the 
        rate specified in subsection (a) on taxable fuel removed or 
        sold by the blender thereof.
            ``(2) Credit for tax previously paid.--If--
                    ``(A) tax is imposed on the removal or sale of a 
                taxable fuel by reason of paragraph (1), and
                    ``(B) the blender establishes the amount of the tax 
                paid with respect to such fuel by reason of subsection 
                (a),
        the amount of the tax so paid shall be allowed as a credit 
        against the tax imposed by reason of paragraph (1).
    ``(c) Taxable Fuels Mixed With Alcohol at Refinery, Etc.--
            ``(1) Reduced rates.--
                    ``(A) In general.--Under regulations prescribed by 
                the Secretary, subsection (a) shall be applied by 
                substituting rates which are the applicable fraction of 
                the otherwise applicable rates in the case of the 
                removal or entry of any taxable fuel for use in 
                producing at the time of such removal or entry a 
                qualified alcohol mixture. Subject to such terms and 
                conditions as the Secretary may prescribe (including 
                the application of section 4101), the treatment under 
                the preceding sentence also shall apply to use in 
                producing such a mixture after the time of such removal 
                or entry.
                    ``(B) Applicable fraction.--For purposes of 
                subparagraph (A), the applicable fraction is--
                            ``(i) in the case of a qualified alcohol 
                        mixture which contains gasoline, the fraction 
                        the numerator of which is 10 and the 
                        denominator of which is--
                                    ``(I) 9 in the case of 10 percent 
                                gasohol,
                                    ``(II) 9.23 in the case of 7.7 
                                percent gasohol, and
                                    ``(II) 9.43 in the case of 5.7 
                                percent gasohol, and
                            ``(ii) in the case of a qualified alcohol 
                        mixture which does not contain gasoline, \10/
                        9\.
            ``(2) Later separation of fuel from qualified alcohol 
        mixture.--If any person separates the taxable fuel from a 
        qualified alcohol mixture on which tax was imposed under 
        subsection (a) at the otherwise applicable Highway Trust Fund 
        financing rate (or its equivalent) by reason of this subsection 
        (or with respect to which a credit or payment was allowed or 
        made by reason of section 6427(f)(1)), such person shall be 
        treated as the refiner of such taxable fuel. The amount of tax 
        imposed on any removal of such fuel by such person shall be 
        reduced by the amount of tax imposed (and not credited or 
        refunded) on any prior removal or entry of such fuel.
            ``(3) Alcohol; qualified alcohol mixture.--For purposes of 
        this subsection--
                    ``(A) Alcohol.--The term `alcohol' includes 
                methanol and ethanol but does not include alcohol 
                produced from petroleum, natural gas, or coal 
                (including peat). Such term does not include alcohol 
                with a proof of less than 190 (determined without 
                regard to any added denaturants).
                    ``(B) Qualified alcohol mixture.--The term 
                `qualified alcohol mixture' means--
                            ``(i) any mixture of gasoline with alcohol 
                        if at least 5.7 percent of such mixture is 
                        alcohol, and
                            ``(ii) any mixture of diesel fuel with 
                        alcohol if at least 10 percent of such mixture 
                        is alcohol.
            ``(4) Otherwise applicable rates for gasoline mixtures.--
        For purposes of this subsection--
                    ``(A) In general.--In the case of the Highway Trust 
                Fund financing rate, the otherwise applicable rate for 
                gasoline in a qualified alcohol mixture is--
                            ``(i) 6.1 cents a gallon for 10 percent 
                        gasohol,
                            ``(ii) 7.342 cents a gallon for 7.7 percent 
                        gasohol, and
                            ``(iii) 8.422 cents a gallon for 5.7 
                        percent gasohol.
                In the case of a mixture none of the alcohol in which 
                consists of ethanol, clauses (i), (ii), and (iii) shall 
                be applied by substituting `5.5 cents' for `6.1 cents', 
                `6.88 cents' for `7.342 cents', and `8.08 cents' for 
                `8.422 cents'.
                    ``(B) 10 percent gasohol.--The term `10 percent 
                gasohol' means any mixture of gasoline with alcohol if 
                at least 10 percent of such mixture is alcohol.
                    ``(C) 7.7 percent gasohol.--The term `7.7 percent 
                gasohol' means any mixture of gasoline with alcohol if 
                at least 7.7 percent, but not 10 percent or more, of 
                such mixture is alcohol.
                    ``(D) 5.7 percent gasohol.--The term `5.7 percent 
                gasohol' means any mixture of gasoline with alcohol if 
                at least 5.7 percent, but not 7.7 percent or more, of 
                such mixture is alcohol.
            ``(5) Otherwise applicable rates for diesel fuel 
        mixtures.--For purposes of this subsection, in the case of the 
        Highway Trust Fund financing rate, the otherwise applicable 
        rate for diesel fuel in a qualified alcohol mixture is 12.1 
        cents per gallon (11.5 cents per gallon in the case of a 
        qualified alcohol mixture none of the alcohol in which consists 
        of ethanol).
            ``(6) Termination.--Paragraph (1) shall not apply to any 
        removal or sale after September 30, 2000.
    ``(d) Termination.--
            ``(1) Highway trust fund financing rate.--On and after 
        October 1, 1999, the Highway Trust Fund financing rate under 
        subsection (a)(2) shall not apply.
            ``(2) Leaking underground storage tank trust fund financing 
        rate.--The Leaking Underground Storage Tank Trust Fund 
        financing rate under subsection (a)(2) shall not apply after 
        December 31, 1995.
            ``(3) Deficit reduction rate.--On and after October 1, 
        1995, the deficit reduction rate under subsection (a)(2) shall 
        not apply.
    ``(e) Refunds in Certain Cases.--Under regulations prescribed by 
the Secretary, if any person who paid the tax imposed by this section 
with respect to any taxable fuel establishes to the satisfaction of the 
Secretary that a prior tax was paid (and not credited or refunded) with 
respect to such taxable fuel, then an amount equal to the tax paid by 
such person shall be allowed as a refund (without interest) to such 
person in the same manner as if it were an overpayment of tax imposed 
by this section.

``SEC. 4082. EXEMPTIONS FOR DIESEL FUEL.

    ``(a) In General.--The tax imposed by section 4081 shall not apply 
to diesel fuel--
            ``(1) which the Secretary determines is destined for a 
        nontaxable use,
            ``(2) which is indelibly dyed in accordance with 
        regulations which the Secretary shall prescribe, and
            ``(3) which meets such marking requirements (if any) as may 
        be prescribed by the Secretary in regulations.
    ``(b) Nontaxable Use.--For purposes of this section, the term 
`nontaxable use' means--
            ``(1) any use which is exempt from the tax imposed by 
        section 4041(a)(1) other than by reason of the imposition of 
        tax on any sale thereof,
            ``(2) any use in a train, and
            ``(3) any use described in section 6427(b)(1).
    ``(c) Regulations.--The Secretary shall prescribe such regulations 
as may be necessary to carry out this section, including regulations 
requiring the conspicuous labeling of retail diesel fuel pumps and 
other delivery facilities to assure that persons are aware of which 
fuel is available only for nontaxable uses.
    ``(d) Cross Reference.--

                                ``For tax on train, motorboat, and 
certain bus uses of fuel purchased tax-free, see section 4041(a)(1).

``SEC. 4083. DEFINITIONS AND SPECIAL RULE.

    ``(a) Taxable Fuel.--For purposes of this subpart--
            ``(1) In general.--The term `taxable fuel' means--
                    ``(A) gasoline, and
                    ``(B) diesel fuel.
            ``(2) Gasoline.--The term `gasoline' includes, to the 
        extent prescribed in regulations--
                    ``(A) gasoline blend stocks, and
                    ``(B) products commonly used as additives in 
                gasoline.
        For purposes of subparagraph (A), the term `gasoline blend 
        stock' means any petroleum product component of gasoline.
            ``(3) Diesel fuel.--The term `diesel fuel' means any liquid 
        (other than gasoline) which is suitable for use as a fuel in a 
        diesel-powered highway vehicle, a diesel-powered train, or a 
        diesel-powered boat.
    ``(b) Certain Uses Defined as Removal.--If any person uses taxable 
fuel (other than in the production of gasoline, diesel fuel, or special 
fuels referred to in section 4041), such use shall for the purposes of 
this chapter be considered a removal.

``SEC. 4084. CROSS REFERENCES.

                                ``(1) For provisions to relieve farmers 
from excise tax in the case of gasoline used on the farm for farming 
purposes, see section 6420.
                                ``(2) For provisions to relieve 
purchasers of gasoline from excise tax in the case of gasoline used for 
certain nonhighway purposes, used by local transit systems, or sold for 
certain exempt purposes, see section 6421.
                                ``(3) For provisions to relieve 
purchasers from excise tax in the case of taxable fuel not used for 
taxable purposes, see section 6427.

                       ``Subpart B--Aviation Fuel

                              ``Sec. 4091. Imposition of tax.
                              ``Sec. 4092. Exemptions.
                              ``Sec. 4093. Definitions.

``SEC. 4091. IMPOSITION OF TAX.

    ``(a) In General.--There is hereby imposed a tax on the sale of 
aviation fuel by the producer or the importer thereof or by any 
producer of aviation fuel.
    ``(b) Rate of Tax.--
            ``(1) In general.--The rate of the tax imposed by 
        subsection (a) shall be the sum of--
                    ``(A) the Airport and Airway Trust Fund financing 
                rate, and
                    ``(B) the Leaking Underground Storage Tank Trust 
                Fund financing rate.
            ``(2) Airport and airway trust fund financing rate.--For 
        purposes of paragraph (1), the Airport and Airway Trust Fund 
        financing rate is 17.5 cents per gallon.
            ``(3) Leaking underground storage tank trust fund financing 
        rate.--For purposes of paragraph (1), the Leaking Underground 
        Storage Tank Trust Fund financing rate is 0.1 cent per gallon.
            ``(4) Termination of rates.--
                    ``(A) The Airport and Airway Trust Fund financing 
                rate shall not apply on and after January 1, 1996.
                    ``(B) The Leaking Underground Storage Tank Fund 
                financing rate shall not apply during any period during 
                which the Leaking Underground Storage Tank Trust Fund 
                financing rate under section 4081 does not apply.
    ``(c) Reduced Rate of Tax for Aviation Fuel in Alcohol Mixture, 
Etc.--
            ``(1) In general.--The Airport and Airway Trust Fund 
        financing rate shall be--
                    ``(A) 4.1 cents per gallon in the case of the sale 
                of any mixture of aviation fuel if--
                            ``(i) at least 10 percent of such mixture 
                        consists of alcohol (as defined in section 
                        4081(c)(3)), and
                            ``(ii) the aviation fuel in such mixture 
                        was not taxed under subparagraph (B), and
                    ``(B) 4.56 cents per gallon in the case of the sale 
                of aviation fuel for use (at the time of such sale) in 
                producing a mixture described in subparagraph (A).
        In the case of a sale described in subparagraph (B), the 
        Leaking Underground Storage Tank Trust Fund financing rate 
        shall be \1/9\ cent per gallon.
            ``(2) Later separation.--If any person separates the 
        aviation fuel from a mixture of the aviation fuel and alcohol 
        on which tax was imposed under subsection (a) at the Airport 
        and Airway Trust Fund financing rate equivalent to 4.1 cents 
        per gallon by reason of this subsection (or with respect to 
        which a credit or payment was allowed or made by reason of 
        section 6427(f)(1)), such person shall be treated as the 
        producer of such aviation fuel. The amount of tax imposed on 
        any sale of such aviation fuel by such person shall be reduced 
        by the amount of tax imposed (and not credited or refunded) on 
        any prior sale of such fuel.
            ``(3) Termination.--Paragraph (1) shall not apply to any 
        sale after September 30, 2000.
    ``(d) Lower Rates of Tax on Alcohol Mixtures Not Made From 
Ethanol.--In the case of a mixture described in subsection (c)(1)(A)(i) 
none of the alcohol in which is ethanol--
            ``(1) subsections (c)(1)(A) and (c)(2) shall each be 
        applied by substituting rates which are 0.6 cents less than the 
        rates contained therein, and
            ``(2) subsection (c)(1)(B) shall be applied by substituting 
        rates which are \10/9\ of the rates determined under paragraph 
        (1).

``SEC. 4092. EXEMPTIONS.

    ``(a) Nontaxable Uses.--The Airport and Airway Trust Fund financing 
rate under section 4091 shall not apply to aviation fuel sold by a 
producer or importer for use by the purchaser in a nontaxable use (as 
defined in section 6427(l)(2)(B)).
    ``(b) Sales to Producer.--Under regulations prescribed by the 
Secretary, the tax imposed by section 4091 shall not apply to aviation 
fuel sold to a producer of such fuel.
    ``(c) Supplies for Vessels and Aircraft.--Under regulations 
prescribed by the Secretary, the Leaking Underground Storage Tank Trust 
Fund financing rate under section 4091 shall not apply to aviation fuel 
sold for use or used as supplies for vessels or aircraft (within the 
meaning of section 4221(d)(3)).

``SEC. 4093. DEFINITIONS.

    ``(a) Aviation Fuel.--For purposes of this subpart, the term 
`aviation fuel' means any liquid (other than any product taxable under 
section 4081) which is suitable for use as a fuel in an aircraft.
    ``(b) Producer.--For purposes of this subpart--
            ``(1) Certain persons treated as producers.--
                    ``(A) In general.--The term `producer' includes any 
                person described in subparagraph (B) and registered 
                under section 4101 with respect to the tax imposed by 
                section 4091.
                    ``(B) Persons described.--A person is described in 
                this subparagraph if such person is--
                            ``(i) a refiner, blender, or wholesale 
                        distributor of aviation fuel, or
                            ``(ii) a dealer selling aviation fuel 
                        exclusively to producers of aviation fuel.
                    ``(C) Reduced rate purchasers treated as 
                producers.--Any person to whom aviation fuel is sold at 
                a reduced rate under this subpart shall be treated as 
                the producer of such fuel.
            ``(2) Wholesale distributor.--For purposes of paragraph 
        (1), the term `wholesale distributor' includes any person who 
        sells aviation fuel to producers, retailers, or to users who 
        purchase in bulk quantities and deliver into bulk storage 
        tanks. Such term does not include any person who (excluding the 
        term `wholesale distributor' from paragraph (1)) is a producer 
        or importer.''
    (b) Civil Penalty For Using Reduced-Rate Fuel For Taxable Use.--
            (1) Paragraph (1) of section 6714(c), as added by subpart 
        A, is amended by striking ``and'' at the end of subparagraph 
        (A), by striking the period at the end of subparagraph (B) and 
        inserting ``, and'', and by adding at the end thereof the 
        following new subparagraph:
                    ``(C) diesel fuel dyed in accordance with section 
                4082.''
            (2) Paragraph (2) of section 6714(b), as added by subpart 
        A, is amended by striking ``section 4441'' and inserting 
        ``sections 4081 and 4441'' and by striking ``such section'' and 
        inserting ``such sections''.
    (c) Technical and Conforming Amendments.--
            (1) Subsection (c) of section 40 is amended by striking ``, 
        section 4081(c), or section 4091(c)'' and inserting ``or 
        section 4081(c)''.
            (2) Subsection (a) of section 4101 is amended by striking 
        ``4081'' and inserting ``4041(a)(1), 4081,''.
            (3) Section 4102 is amended by striking ``gasoline'' and 
        inserting ``any taxable fuel (as defined in section 4083)''.
            (4) Paragraph (1) of section 4041(a) is amended to read as 
        follows:
            ``(1) Tax on diesel fuel in certain cases.--
                    ``(A) In general.--There is hereby imposed a tax on 
                any liquid other than gasoline (as defined in section 
                4083)--
                            ``(i) sold by any person to an owner, 
                        lessee, or other operator of a diesel-powered 
                        highway vehicle, a diesel-powered train, or a 
                        diesel-powered boat for use as a fuel in such 
                        vehicle, train, or boat, or
                            ``(ii) used by any person as a fuel in a 
                        diesel-powered highway vehicle, a diesel-
                        powered train, or a diesel-powered boat unless 
                        there was a taxable sale of such fuel under 
                        clause (i).
                    ``(B) Exemption for previously taxed fuel.--No tax 
                shall be imposed by this paragraph on the sale or use 
                of diesel fuel if there was a taxable sale of such fuel 
                under section 4081 and the tax thereon was not credited 
                or refunded.
                    ``(C) Rate of tax.--
                            ``(i) In general.--Except as otherwise 
                        provided in this subparagraph, the rate of the 
                        tax imposed by this paragraph shall be the sum 
                        of the Highway Trust Fund financing rate on 
                        diesel fuel and the deficit reduction rate in 
                        effect under section 4081 at the time of such 
                        sale or use.
                            ``(ii) Highway rate not to apply to 
                        trains.--The Highway Trust Fund financing rate 
                        shall not apply to any sale for use, or use, of 
                        fuel in a train.
                            ``(iii) Certain bus uses.--If the 
                        limitation in section 6427(b)(2)(A) applies to 
                        fuel sold for use or used in an automobile bus, 
                        the Highway Trust Fund financing rate shall be 
                        3 cents per gallon and the deficit reduction 
                        rate shall not apply.''
            (5) Paragraph (2) of section 4041(a) is amended by striking 
        ``or paragraph (1) of this subsection'' and by inserting ``on 
        gasoline'' after ``Highway Trust Fund financing rate''.
            (6) Paragraph (2) of section 4041(c) is amended by striking 
        ``any product taxable under section 4081'' and inserting 
        ``gasoline (as defined in section 4083)''.
            (7) Paragraph (2) of section 4041(d) is amended--
                    (A) by striking ``(other than a product taxable 
                under section 4081)'' and inserting ``(other than 
                gasoline (as defined in section 4083))'', and
                    (B) by striking ``section 4091'' and inserting 
                ``section 4081''.
            (8) Paragraph (3) of section 4041(d) is amended by striking 
        ``(other than any product taxable under section 4081)'' and 
        inserting ``(other than gasoline (as defined in section 
        4083))''.
            (9) Subparagraph (A) of section 4041(k)(1) is amended by 
        striking ``sections 4081(c) and 4091(c), as the case may be'' 
        and inserting ``section 4081(c)''.
            (10) Subparagraph (B) of section 4041(m)(1) is amended by 
        striking ``section 4091(d)(1)'' and inserting ``section 
        4091(c)(1)''.
            (11) Section 6206 is amended by striking ``4041 or 4091'' 
        and inserting ``4041, 4081, or 4091''.
            (12) Paragraph (1) of section 6302(f) is amended by 
        inserting ``on gasoline'' after ``section 4081'' and after 
        ``such tax''.
            (13) Paragraph (1) of section 6412(a) is amended by 
        striking ``gasoline'' each place it appears (including the 
        heading) and inserting ``taxable fuel''.
            (14)(A) Subparagraph (A) of section 6416(a)(4) is amended 
        by striking ``product'' each place it appears and inserting 
        ``gasoline''.
            (B) Subparagraph (B) of section 6416(a)(4) is amended by 
        striking all that follows ``substituting'' and inserting ```any 
        gasoline taxable under section 4081' for `aviation fuel' 
        therein).''
            (15) Sections 6420(c)(5) and 6421(e)(1) are each amended by 
        striking ``section 4082(b)'' and inserting ``section 4083(a)''.
            (16) Subsection (b) of section 6427 is amended--
                    (A) by striking ``if any fuel'' in paragraph (1) 
                and inserting ``if any diesel fuel (as defined in 
                section 4083(a))'', and
                    (B) by striking ``4091'' each place it appears and 
                inserting ``4081''.
            (17)(A) Paragraph (1) of section 6427(f) is amended by 
        striking ``4091(c)(1)(A), or 4091(d)(1)(A)'' and inserting ``or 
        4091(c)(1)(A)''.
            (B) Paragraph (2) of section 6427(f) is amended to read as 
        follows:
            ``(2) Definitions.--For purposes of paragraph (1)--
                    ``(A) Regular tax rate.--The term `regular tax 
                rate' means--
                            ``(i) in the case of gasoline or diesel 
                        fuel, the aggregate rate of tax imposed by 
                        section 4081 determined without regard to 
                        subsection (c) thereof, and
                            ``(ii) in the case of aviation fuel, the 
                        aggregate rate of tax imposed by section 4091 
                        determined without regard to subsection (c) 
                        thereof.
                    ``(B) Incentive tax rate.--The term `incentive tax 
                rate' means--
                            ``(i) in the case of gasoline or diesel 
                        fuel, the aggregate rate of tax imposed by 
                        section 4081 with respect to fuel described in 
                        subsection (c)(1) thereof, and
                            ``(ii) in the case of aviation fuel, the 
                        aggregate rate of tax imposed by section 4091 
                        with respect to fuel described in subsection 
                        (c)(1)(B) thereof.''
            (18) Subsection (h) of section 6427 is amended by striking 
        ``section 4082(b)'' and inserting ``section 4083(a)(2)''.
            (19) Paragraph (3) of section 6427(i) is amended--
                    (A) by striking ``gasohol'' in the heading and 
                inserting ``alcohol mixture'', and
                    (B) by striking ``gasoline used to produce gasohol 
                (as defined in section 4081(c)(1))'' in subparagraph 
                (A) and inserting ``gasoline or diesel fuel used to 
                produce a qualified alcohol mixture (as defined in 
                section 4081(c)(3))''.
            (20) The heading of paragraph (4) of section 6427(i) is 
        amended by inserting ``4081 or'' before ``4091''.
            (21) Subsection (l) of section 6427 is amended to read as 
        follows:
    ``(l) Nontaxable Uses of Diesel Fuel and Aviation Fuel.--
            ``(1) In general.--Except as provided in subsection (k) and 
        in paragraphs (3) and (4) of this subsection, if--
                    ``(A) any diesel fuel on which tax has been imposed 
                by section 4081, or
                    ``(B) any aviation fuel on which tax has been 
                imposed by section 4091,
        is used by any person in a nontaxable use, the Secretary shall 
        pay (without interest) to the ultimate purchaser of such fuel 
        an amount equal to the aggregate amount of tax imposed on such 
        fuel under section 4081 or 4091, as the case may be.
            ``(2) Nontaxable use.--For purposes of this subsection, the 
        term `nontaxable use' means--
                    ``(A) in the case of diesel fuel, any use which is 
                exempt from the tax imposed by section 4041(a)(1) other 
                than by reason of the imposition of tax on any sale 
                thereof, and
                    ``(B) in the case of aviation fuel, any use which 
                is exempt from the tax imposed by section 4041(c)(1) 
                other than by reason of the imposition of tax on any 
                sale thereof.
            ``(3) Limit on refund of leaking underground storage tank 
        trust fund financing rate.--Paragraph (1) shall not apply to so 
        much of the tax imposed by section 4081 or 4091 as is 
        attributable to the Leaking Underground Storage Tank Trust Fund 
        financing rate imposed by such section in the case of--
                    ``(A) fuel used in a diesel-powered train, and
                    ``(B) fuel used in any aircraft (other than as 
                supplies for vessels or aircraft, within the meaning of 
                section 4221(d)(3)).
            ``(4) No refund of deficit reduction tax on fuel used in 
        trains.--Fuel used in a diesel-powered train shall be treated 
        as a nontaxable use for purposes of this section, except that 
        paragraph (1) shall not apply to so much of the tax imposed by 
        section 4081 as is attributable to the deficit reduction rate 
        imposed by such section unless such fuel was used by a State or 
        any political subdivision thereof.''
            (22) Paragraph (1) of section 9503(b) is amended--
                    (A) by striking ``gasoline),'' in subparagraph (E) 
                and inserting ``gasoline and diesel fuel), and'',
                    (B) by striking subparagraph (F), and
                    (C) by redesignating subparagraph (G) as 
                subparagraph (F).
            (23)(A) Subparagraph (B) of section 9503(b)(4) is amended 
        by striking ``, 4081, and 4091'' and inserting ``and 4081''.
            (B) Subparagraph (C) of section 9503(b)(4), as amended by 
        subtitle A, is amended by striking ``4091'' and inserting 
        ``4081''.
            (24) Subparagraph (D) of section 9503(c)(6) is amended by 
        striking ``, 4081, and 4091'' and inserting ``and 4081''.
            (25) Paragraph (2) of section 9503(e) is amended--
                    (A) by striking ``, 4081, and 4091'' and inserting 
                ``and 4081'', and
                    (B) by striking ``, 4081, or 4091'' and inserting 
                ``or 4081''.
            (26) Subsection (b) of section 9508 is amended--
                    (A) by inserting ``and diesel fuel'' after 
                ``gasoline'' in paragraph (2),
                    (B) by striking ``diesel fuel and'' in paragraph 
                (3), and
                    (C) by striking ``4091'' in the last sentence, as 
                added by subtitle A, and inserting ``4081''.
            (27) The table of subparts for part III of subchapter A of 
        chapter 32 is amended by striking the items relating to 
        subparts A and B and inserting the following new items:

                              ``Subpart A. Gasoline and diesel fuel.
                              ``Subpart B. Aviation fuel.''
    (d) Effective Date.--The amendments made by this section shall take 
effect on April 1, 1994.

SEC. 14243. FLOOR STOCKS TAX.

    (a) In General.--There is hereby imposed a floor stocks tax on 
diesel fuel held by any person on April 1, 1994, if--
            (1) no tax was imposed on such fuel under section 4041(a) 
        or 4091 of the Internal Revenue Code of 1986 as in effect on 
        the day before the date of the enactment of this Act, and
            (2) tax would have been imposed by section 4081 of such 
        Code, as amended by this Act, on any prior removal, entry, or 
        sale of such fuel had such section 4081 applied to all prior 
        removals, entries, and sales of such fuel.
    (b) Rate of Tax.--The rate of the tax imposed by subsection (a) 
shall be the amount of tax which would be imposed under section 4081 of 
the Internal Revenue Code of 1986 if there were a taxable sale of such 
fuel on such date.
    (c) Liability and Payment of Tax.--
            (1) Liability for tax.--A person holding the diesel fuel on 
        April 1, 1994, to which the tax imposed by this section applies 
        shall be liable for such tax.
            (2) Method of payment.--The tax imposed by this section 
        shall be paid in such manner as the Secretary shall prescribe.
            (3) Time for payment.--The tax imposed by this section 
        shall be paid on or before January 31, 1995.
    (d) Definitions.--For purposes of this section--
            (1) Diesel fuel.--The term ``diesel fuel'' has the meaning 
        given such term by section 4083(a) of such Code.
            (2) Secretary.--The term ``Secretary'' means the Secretary 
        of the Treasury or his delegate.
    (e) Exceptions.--
            (1) Persons entitled to credit or refund.--The tax imposed 
        by this section shall not apply to fuel held by any person 
        exclusively for any use to the extent a credit or refund of the 
        tax imposed by section 4081 is allowable for such use.
            (2) Compliance with dyeing required.--Paragraph (1) shall 
        not apply to the holder of any fuel if the holder of such fuel 
        fails to comply with any requirement imposed by the Secretary 
        with respect to dyeing and marking such fuel.
    (f) Other Laws Applicable.--All provisions of law, including 
penalties, applicable with respect to the taxes imposed by section 4081 
of such Code shall, insofar as applicable and not inconsistent with the 
provisions of this section, apply with respect to the floor stock taxes 
imposed by this section to the same extent as if such taxes were 
imposed by such section 4081.

 Subpart C--Extension of Motor Fuel Tax Rates; Increased Deposits Into 
                           Highway Trust Fund

SEC. 14244. EXTENSION OF MOTOR FUEL TAX RATES; INCREASED DEPOSITS INTO 
              HIGHWAY TRUST FUND.

    (a) In General.--Clause (i) of section 4081(a)(2)(B), as amended by 
subpart B, is amended--
            (1) by striking ``11.5 cents'' and inserting ``14 cents'', 
        and
            (2) by striking ``17.5 cents'' and inserting ``20 cents''.
    (b) Conforming Amendments.--
            (1) Subparagraph (A) of section 4081(c)(4), as so amended, 
        is amended to read as follows:
                    ``(A) In general.--In the case of the Highway Trust 
                Fund financing rate, the otherwise applicable rate for 
                gasoline in a qualified alcohol mixture is--
                            ``(i) 8.6 cents a gallon for 10 percent 
                        gasohol,
                            ``(ii) 9.842 cents a gallon for 7.7 percent 
                        gasohol, and
                            ``(iii) 10.922 cents a gallon for 5.7 
                        percent gasohol.
        In the case of a mixture none of the alcohol in which consists 
        of ethanol, clauses (i), (ii), and (iii) shall be applied by 
        substituting `8.0 cents' for `8.6 cents', `9.38 cents' for 
        `9.842 cents', and `10.58 cents' for `10.922'.''
            (2) Paragraph (5) of section 4081(c), as so amended, is 
        amended--
                    (A) by striking ``12.1 cents'' and inserting ``14.6 
                cents'', and
                    (B) by striking ``11.5 cents'' and inserting 
                ``14.0''.
            (3) Subparagraph (A) of section 4041(m)(1) is amended to 
        read as follows:
                    ``(A) under subsection (a)(2) the Highway Trust 
                Fund financing shall be 7 cents per gallon, and''.
            (4) Paragraph (4) of section 6427(l), as amended by subpart 
        B, is amended--
                    (A) by striking ``the deficit reduction rate'' and 
                inserting ``2.5 cents per gallon of the Highway Trust 
                Fund financing rate'', and
                    (B) by striking ``deficit reduction tax'' in the 
                heading and inserting ``portion of tax''.
            (5) Subsection (b) of section 9503 is amended by adding at 
        the end thereof the following new paragraph:
            ``(6) Retention of certain taxes in general fund.--
                    ``(A) In general.--There shall not be taken into 
                account under paragraphs (1) and (2)--
                            ``(i) the tax imposed by section 4081 on 
                        diesel fuel used in any train, and
                            ``(ii) so much of the following taxes as 
                        are attributable to 2.5 cents of the Highway 
                        Trust Fund financing rate:
                                    ``(I) Motorboat fuel taxes (as 
                                defined in subsection (c)(4)(D)).
                                    ``(II) Small-engine fuel taxes (as 
                                defined in subsection (c)(5)(B)).
                                    ``(III) Nonhighway recreational 
                                fuel taxes (as defined in subsection 
                                (c)(6)(D)).
                    ``(B) Transfers from highway trust fund.--For 
                purposes of determining the amount paid from the 
                Highway Trust Fund under paragraphs (4), (5), and (6) 
                of subsection (c), the Highway Trust Fund financing 
                rates shall be treated as being 2.5 cents less than the 
                otherwise applicable rates.''
    (c) Increase in Deposits in Mass Transit Account.--Paragraph (2) of 
section 9503(e) is amended by striking ``1.5 cents'' and inserting ``2 
cents''.
    (d) Repeal of Expired Provisions.--
            (1) Subparagraph (A) of section 4081(a)(2) (relating to 
        rate of tax), as amended by subpart B, is amended--
                    (A) by adding ``and'' at the end of clause (i),
                    (B) by striking ``, and'' at the end of clause (ii) 
                and inserting a period, and
                    (C) by striking clause (iii).
            (2) Subparagraph (B) of section 4081(a)(2), as so amended, 
        is amended--
                    (A) by adding ``and'' at the end of clause (i),
                    (B) by striking ``, and'' at the end of clause (ii) 
                and inserting a period, and
                    (C) by striking clause (iii).
            (3) Subsection (d) of section 4081, as so amended, is 
        amended by striking paragraph (3).
            (4) Paragraphs (1) and (2) of section 4041(a) (as so 
        amended), and paragraph (3) of section 4041(c), are each 
        amended by striking ``the sum of the Highway Trust Fund 
        financing rate and the diesel fuel deficit reduction rate'' and 
        by inserting ``the Highway Trust Fund financing rate''.
            (5) Clause (ii) of section 4041(a)(1)(C), as so amended, is 
        amended--
                    (A) by striking ``The Highway Trust Fund financing 
                rate'' and inserting ``So much of the Highway Trust 
                Fund financing rate as exceeds 2.5 cents per gallon'', 
                and
                    (B) by striking ``Highway rate'' in the heading and 
                inserting ``Portion of highway rate''.
            (6) Clause (iii) of section 4041(a)(1)(C), as so amended, 
        is amended by striking ``and the deficit reduction rate shall 
        not apply''.
    (e) Effective Date.--The amendments made by this section shall take 
effect October 1, 1995, but the amendment made by subsection (c) shall 
apply only to amounts attributable to taxes imposed on or after such 
date.

                     PART V--COMPLIANCE PROVISIONS

SEC. 14251. REPORTING REQUIRED FOR CERTAIN PAYMENTS TO CORPORATIONS.

    (a) Section 6041.--Section 6041 (relating to information at source) 
is amended by adding at the end thereof the following new subsection:
    ``(f) Special Rules for Payments for Services.--No payment for the 
performance of services shall be exempt from the requirements of this 
section merely because it is a payment to a corporation.''
    (b) Section 6041A(a).--Subsection (a) of section 6041A is amended 
by adding at the end thereof the following new sentence: ``A payment 
shall not be exempt from the requirements of this subsection merely 
because it is a payment to a corporation.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to payments made after December 31, 1993.

SEC. 14252. MODIFICATIONS TO SUBSTANTIAL UNDERSTATEMENT AND RETURN-
              PREPARER PENALTIES.

    (a) Reasonable Basis Required.--
            (1) Substantial understatement penalty.--Clause (ii) of 
        section 6662(d)(2)(B) (relating to reduction for understatement 
        due to position of taxpayer or disclosed item) is amended to 
        read as follows:
                            ``(ii) any item if--
                                    ``(I) the relevant facts affecting 
                                the item's tax treatment are adequately 
                                disclosed in the return or in a 
                                statement attached to the return, and
                                    ``(II) there is a reasonable basis 
                                for the tax treatment of such item by 
                                the taxpayer.''
            (2) Return preparer penalty.--Paragraph (3) of section 
        6694(a) (relating to understatement of taxpayer's liability by 
        income tax return preparer) is amended to read as follows:
            ``(3) the requirements of subclauses (I) and (II) of 
        section 6662(d)(2)(B)(ii) are not satisfied with respect to 
        such position,''.
    (b) Special Tax Shelter Rule.--Subclause (II) of section 
6662(d)(2)(C)(i) (relating to special rules for tax shelters) is 
amended by inserting before the period at the end thereof the 
following: ``and the reasonably anticipated after-tax benefits from the 
taxpayer's investment in such shelter do not significantly exceed the 
reasonably anticipated pre-tax economic profit or loss from such 
investment''.
    (c) Reasonable Cause Exception.--Paragraph (1) of section 6664(c) 
is revised by striking ``this part'' and inserting ``section 6662''.
    (d) Effective Date.--The amendments made by this section shall 
apply to returns the due dates for which (determined without regard to 
extensions) are after December 31, 1993.

SEC. 14253. RETURNS RELATING TO THE CANCELLATION OF INDEBTEDNESS BY 
              CERTAIN FINANCIAL ENTITIES.

    (a) In General.--Subpart B of part III of subchapter A of chapter 
61 (relating to information concerning transactions with other persons) 
is amended by adding at the end thereof the following new section:

``SEC. 6050P. RETURNS RELATING TO THE CANCELLATION OF INDEBTEDNESS BY 
              CERTAIN FINANCIAL ENTITIES.

    ``(a) In General.--Any applicable financial entity which discharges 
(in whole or in part) the indebtedness of any person during any 
calendar year shall make a return (at such time and in such form as the 
Secretary may by regulations prescribe) setting forth--
            ``(1) the name, address, and TIN of each person whose 
        indebtedness was discharged during such calendar year,
            ``(2) the date of the discharge and the amount of the 
        indebtedness discharged, and
            ``(3) such other information as the Secretary may 
        prescribe.
    ``(b) Exception.--Subsection (a) shall not apply to any discharge 
of less than $600.
    ``(c) Definitions and Special Rules.--For purposes of this 
section--
            ``(1) Applicable financial entity.--The term `applicable 
        financial entity' means--
                    ``(A) any financial institution described in 
                section 581 or 591(a) and any credit union,
                    ``(B) the Federal Deposit Insurance Corporation, 
                the Resolution Trust Corporation, and the National 
                Credit Union Administration, and any successor or 
                subunit of any of the foregoing, and
                    ``(C) any other corporation which is a direct or 
                indirect subsidiary of an entity referred to in 
                subparagraph (A) but only if, by virtue of being 
                affiliated with such entity, such other corporation is 
                subject to supervision and examination by a Federal or 
                State agency which regulates entities referred to in 
                subparagraph (A).
            ``(2) Governmental units.--In the case of an entity 
        described in paragraph (1)(B), any return under this section 
        shall be made by the officer or employee appropriately 
        designated for the purpose of making such return.
    ``(d) Statements To Be Furnished to Persons With Respect to Whom 
Information Is Required To Be Furnished.--Every applicable financial 
entity required to make a return under subsection (a) shall furnish to 
each person whose name is required to be set forth in such return a 
written statement showing--
            ``(1) the name and address of the entity required to make 
        such return, and
            ``(2) the information required to be shown on the return 
        with respect to such person.
The written statement required under the preceding sentence shall be 
furnished to the person on or before January 31 of the year following 
the calendar year for which the return under subsection (a) was made.''
    (b) Penalties.--
            (1) Returns.--Subparagraph (B) of section 6724(d)(1) is 
        amended by redesignating clauses (viii) through (xv) as clauses 
        (ix) through (xvi), respectively, and by inserting after clause 
        (vii) the following new clause:
                            ``(viii) section 6050P (relating to returns 
                        relating to the cancellation of indebtedness by 
                        certain financial entities),''.
            (2) Statements.--Paragraph (2) of section 6724(d) is 
        amended by redesignating subparagraphs (P) through (S) as 
        subparagraphs (Q) through (T), respectively, and by inserting 
        after subparagraph (O) the following new subparagraph:
                    ``(P) section 6050P(d) (relating to returns 
                relating to the cancellation of indebtedness by certain 
                financial entities),''.
    (c) Clerical Amendment.--The table of sections for subpart B of 
part III of subchapter A of chapter 61 is amended by adding at the end 
thereof the following new item:

                              ``Sec. 6050P. Returns relating to the 
                                        cancellation of indebtedness by 
                                        certain financial entities.''
    (d) Effective Date.--The amendments made by this section shall 
apply to discharges of indebtedness after the date of the enactment of 
this Act.

                   PART VI--TREATMENT OF INTANGIBLES

SEC. 14261. AMORTIZATION OF GOODWILL AND CERTAIN OTHER INTANGIBLES.

    (a) General Rule.--Part VI of subchapter B of chapter 1 (relating 
to itemized deductions for individuals and corporations) is amended by 
adding at the end thereof the following new section:

``SEC. 197. AMORTIZATION OF GOODWILL AND CERTAIN OTHER INTANGIBLES.

    ``(a) General Rule.--A taxpayer shall be entitled to an 
amortization deduction with respect to any amortizable section 197 
intangible. The amount of such deduction shall be determined by 
amortizing the adjusted basis (for purposes of determining gain) of 
such intangible ratably over the 14-year period beginning with the 
month in which such intangible was acquired.
    ``(b) No Other Depreciation or Amortization Deduction Allowable.--
Except as provided in subsection (a), no depreciation or amortization 
deduction shall be allowable with respect to any amortizable section 
197 intangible.
    ``(c) Amortizable Section 197 Intangible.--For purposes of this 
section--
            ``(1) In general.--Except as otherwise provided in this 
        section, the term `amortizable section 197 intangible' means 
        any section 197 intangible--
                    ``(A) which is acquired by the taxpayer after the 
                date of the enactment of this section, and
                    ``(B) which is held in connection with the conduct 
                of a trade or business or an activity described in 
                section 212.
            ``(2) Exclusion of self-created intangibles, etc.--The term 
        `amortizable section 197 intangible' shall not include any 
        section 197 intangible--
                    ``(A) which is not described in subparagraph (D), 
                (E), or (F) of subsection (d)(1), and
                    ``(B) which is created by the taxpayer.
        This paragraph shall not apply if the intangible is created in 
        connection with a transaction (or series of related 
        transactions) involving the acquisition of assets constituting 
        a trade or business or substantial portion thereof.
            ``(3) Anti-churning rules.--

                                ``For exclusion of intangibles acquired 
in certain transactions, see subsection (f)(9).
    ``(d) Section 197 Intangible.--For purposes of this section--
            ``(1) In general.--Except as otherwise provided in this 
        section, the term `section 197 intangible' means--
                    ``(A) goodwill,
                    ``(B) going concern value,
                    ``(C) any of the following intangible items:
                            ``(i) workforce in place including its 
                        composition and terms and conditions 
                        (contractual or otherwise) of its employment,
                            ``(ii) business books and records, 
                        operating systems, or any other information 
                        base (including lists or other information with 
                        respect to current or prospective customers),
                            ``(iii) any patent, copyright, formula, 
                        process, design, pattern, knowhow, format, or 
                        other similar item,
                            ``(iv) any customer-based intangible,
                            ``(v) any supplier-based intangible, and
                            ``(vi) any other similar item,
                    ``(D) any license, permit, or other right granted 
                by a governmental unit or an agency or instrumentality 
                thereof,
                    ``(E) any covenant not to compete (or other 
                arrangement to the extent such arrangement has 
                substantially the same effect as a covenant not to 
                compete) entered into in connection with an acquisition 
                (directly or indirectly) of an interest in a trade or 
                business or substantial portion thereof, and
                    ``(F) any franchise, trademark, or trade name.
            ``(2) Customer-based intangible.--
                    ``(A) In general.--The term `customer-based 
                intangible' means--
                            ``(i) composition of market,
                            ``(ii) market share, and
                            ``(iii) any other value resulting from 
                        future provision of goods or services pursuant 
                        to relationships (contractual or otherwise) in 
                        the ordinary course of business with customers.
                    ``(B) Special rule for financial institutions.--In 
                the case of a financial institution, the term 
                `customer-based intangible' includes deposit base and 
                similar items.
            ``(3) Supplier-based intangible.--The term `supplier-based 
        intangible' means any value resulting from future acquisitions 
        of goods or services pursuant to relationships (contractual or 
        otherwise) in the ordinary course of business with suppliers of 
        goods or services to be used or sold by the taxpayer.
    ``(e) Exceptions.--For purposes of this section, the term `section 
197 intangible' shall not include any of the following:
            ``(1) Financial interests.--Any interest--
                    ``(A) in a corporation, partnership, trust, or 
                estate, or
                    ``(B) under an existing futures contract, foreign 
                currency contract, notional principal contract, or 
                other similar financial contract.
            ``(2) Land.--Any interest in land.
            ``(3) Computer software.--
                    ``(A) In general.--Any--
                            ``(i) computer software which is readily 
                        available for purchase by the general public, 
                        is subject to a nonexclusive license, and has 
                        not been substantially modified, and
                            ``(ii) other computer software which is not 
                        acquired in a transaction (or series of related 
                        transactions) involving the acquisition of 
                        assets constituting a trade or business or 
                        substantial portion thereof.
                    ``(B) Computer software defined.--For purposes of 
                subparagraph (A), the term `computer software' means 
                any program designed to cause a computer to perform a 
                desired function. Such term shall not include any data 
                base or similar item unless the data base or item is in 
                the public domain and is incidental to the operation of 
                otherwise qualifying computer software.
            ``(4) Certain interests or rights acquired separately.--Any 
        of the following not acquired in a transaction (or series of 
        related transactions) involving the acquisition of assets 
        constituting a trade business or substantial portion thereof:
                    ``(A) Any interest in a film, sound recording, 
                video tape, book, or similar property.
                    ``(B) Any right to receive tangible property or 
                services under a contract or granted by a governmental 
                unit or agency or instrumentality thereof.
                    ``(C) Any interest in a patent or copyright.
                    ``(D) To the extent provided in regulations, any 
                right under a contract (or granted by a governmental 
                unit or an agency or instrumentality thereof) if such 
                right--
                            ``(i) has a fixed duration of less than 14 
                        years, or
                            ``(ii) is fixed as to amount and, without 
                        regard to this section, would be recoverable 
                        under a method similar to the unit-of-
                        production method.
            ``(5) Interests under leases and debt instruments.--Any 
        interest under--
                    ``(A) an existing lease of tangible property, or
                    ``(B) except as provided in subsection (d)(2)(B), 
                any existing indebtedness.
            ``(6) Treatment of sports franchises.--A franchise to 
        engage in professional football, basketball, baseball, or other 
        professional sport, and any item acquired in connection with 
        such a franchise.
            ``(7) Certain transaction costs.--Any fees for professional 
        services, and any transaction costs, incurred by parties to a 
        transaction with respect to which any portion of the gain or 
        loss is not recognized under part III of subchapter C.
    ``(f) Special Rules.--
            ``(1) Treatment of certain dispositions, etc.--If there is 
        a disposition of any amortizable section 197 intangible 
        acquired in a transaction or series of related transactions (or 
        any such intangible becomes worthless) and one or more other 
        amortizable section 197 intangibles acquired in such 
        transaction or series of related transactions are retained--
                    ``(A) no loss shall be recognized by reason of such 
                disposition (or such worthlessness), and
                    ``(B) appropriate adjustments to the adjusted bases 
                of such retained intangibles shall be made for any loss 
                not recognized under subparagraph (A).
        All persons treated as a single taxpayer under section 41(f)(1) 
        shall be so treated for purposes of the preceding sentence.
            ``(2) Treatment of certain transfers.--
                    ``(A) In general.--In the case of any section 197 
                intangible transferred in a transaction described in 
                subparagraph (B), the transferee shall be treated as 
                the transferor for purposes of applying this section 
                with respect to so much of the adjusted basis in the 
                hands of the transferee as does not exceed the adjusted 
                basis in the hands of the transferor.
                    ``(B) Transactions covered.--The transactions 
                described in this subparagraph are--
                            ``(i) any transaction described in section 
                        332, 351, 361, 721, 731, 1031, or 1033, and
                            ``(ii) any transaction between members of 
                        the same affiliated group during any taxable 
                        year for which a consolidated return is made by 
                        such group.
            ``(3) Treatment of amounts paid pursuant to covenants not 
        to compete, etc.--Any amount paid or incurred pursuant to a 
        covenant or arrangement referred to in subsection (d)(1)(E) 
        shall be treated as an amount chargeable to capital account.
            ``(4) Treatment of franchises, etc.--
                    ``(A) Franchise.--The term `franchise' has the 
                meaning given to such term by section 1253(b)(1).
                    ``(B) Treatment of renewals.--Any renewal of a 
                franchise, trademark, or trade name (or of a license, a 
                permit, or other right referred to in subsection 
                (d)(1)(D)) shall be treated as an acquisition. The 
                preceding sentence shall only apply with respect to 
                costs incurred in connection with such renewal.
                    ``(C) Certain amounts not taken into account.--Any 
                amount to which section 1253(d)(1) applies shall not be 
                taken into account under this section.
            ``(5) Treatment of certain reinsurance transactions.--In 
        the case of any amortizable section 197 intangible resulting 
        from an assumption reinsurance transaction, the amount taken 
        into account as the adjusted basis of such intangible under 
        this section shall be the excess of--
                    ``(A) the amount paid or incurred by the acquirer 
                under the assumption reinsurance transaction, over
                    ``(B) the amount required to be capitalized under 
                section 848 in connection with such transaction.
        Subsection (b) shall not apply to any amount required to be 
        capitalized under section 848.
            ``(6) Treatment of certain subleases.--For purposes of this 
        section, a sublease shall be treated in the same manner as a 
        lease of the underlying property involved.
            ``(7) Treatment as depreciable.--For purposes of this 
        chapter, any amortizable section 197 intangible shall be 
        treated as property which is of a character subject to the 
        allowance for depreciation provided in section 167.
            ``(8) Treatment of certain increments in value.--This 
        section shall not apply to any increment in value if, without 
        regard to this section, such increment is properly taken into 
        account in determining the cost of property which is not a 
        section 197 intangible.
            ``(9) Anti-churning rules.--For purposes of this section--
                    ``(A) In general.--The term `amortizable section 
                197 intangible' shall not include any section 197 
                intangible which is described in subparagraph (A) or 
                (B) of subsection (d)(1) (or for which depreciation or 
                amortization would not have been allowable but for this 
                section) and which is acquired by the taxpayer after 
                the date of the enactment of this section, if--
                            ``(i) the intangible was held or used at 
                        any time on or after July 25, 1991, and on or 
                        before such date of enactment by the taxpayer 
                        or a related person,
                            ``(ii) the intangible was acquired from a 
                        person who held such intangible at any time on 
                        or after July 25, 1991, and on or before such 
                        date of enactment, and, as part of the 
                        transaction, the user of such intangible does 
                        not change, or
                            ``(iii) the taxpayer grants the right to 
                        use such intangible to a person (or a person 
                        related to such person) who held or used such 
                        intangible at any time on or after July 25, 
                        1991, and on or before such date of enactment.
                For purposes of this subparagraph, the determination of 
                whether the user of property changes as part of a 
                transaction shall be determined in accordance with 
                regulations prescribed by the Secretary. For purposes 
                of this subparagraph, deductions allowable under 
                section 1253(d) shall be treated as deductions 
                allowable for amortization.
                    ``(B) Exception where gain recognized.--If--
                            ``(i) subparagraph (A) would not apply to 
                        an intangible acquired by the taxpayer but for 
                        the last sentence of subparagraph (C)(i), and
                            ``(ii) the person from whom the taxpayer 
                        acquired the intangible elects, notwithstanding 
                        any other provision of this title--
                                    ``(I) to recognize gain on the 
                                disposition of the intangible, and
                                    ``(II) to pay a tax on such gain 
                                which, when added to any other income 
                                tax on such gain under this title, 
                                equals such gain multiplied by the 
                                highest rate of income tax applicable 
                                to such person under this title,
                        then subparagraph (A) shall apply to the 
                        intangible only to the extent that the 
                        taxpayer's adjusted basis in the intangible 
                        exceeds the gain recognized under clause 
                        (ii)(I).
                    ``(C) Related person defined.--For purposes of this 
                paragraph--
                            ``(i) Related person.--A person 
                        (hereinafter in this paragraph referred to as 
                        the `related person') is related to any person 
                        if--
                                    ``(I) the related person bears a 
                                relationship to such person specified 
                                in section 267(b) or section 707(b)(1), 
                                or
                                    ``(II) the related person and such 
                                person are engaged in trades or 
                                businesses under common control (within 
                                the meaning of subparagraphs (A) and 
                                (B) of section 41(f)(1)).
                        For purposes of subclause (I), in applying 
                        section 267(b) or 707(b)(1), `20 percent' shall 
                        be substituted for `50 percent'.
                            ``(ii) Time for making determination.--A 
                        person shall be treated as related to another 
                        person if such relationship exists immediately 
                        before or immediately after the acquisition of 
                        the intangible involved.
                    ``(D) Acquisitions by reason of death.--
                Subparagraph (A) shall not apply to the acquisition of 
                any property by the taxpayer if the basis of the 
                property in the hands of the taxpayer is determined 
                under section 1014(a).
                    ``(E) Special rule for partnerships.--With respect 
                to any increase in the basis of partnership property 
                under section 732, 734, or 743, determinations under 
                this paragraph shall be made at the partner level and 
                each partner shall be treated as having owned and used 
                such partner's proportionate share of the partnership 
                assets.
                    ``(F) Anti-abuse rules.--The term `amortizable 
                section 197 intangible' does not include any section 
                197 intangible acquired in a transaction, one of the 
                principal purposes of which is to avoid the requirement 
                of subsection (c)(1) that the intangible be acquired 
                after the date of the enactment of this section or to 
                avoid the provisions of subparagraph (A).
    ``(g) Regulations.--The Secretary shall prescribe such regulations 
as may be appropriate to carry out the purposes of this section, 
including such regulations as may be appropriate to prevent avoidance 
of the purposes of this section through related persons or otherwise.''
    (b) Modifications to Depreciation Rules.--
            (1) Treatment of certain property excluded from section 
        197.--Section 167 (relating to depreciation deduction) is 
        amended by redesignating subsection (f) as subsection (g) and 
        by inserting after subsection (e) the following new subsection:
    ``(f) Treatment of Certain Property Excluded From Section 197.--
            ``(1) Computer software.--
                    ``(A) In general.--If a depreciation deduction is 
                allowable under subsection (a) with respect to any 
                computer software, such deduction shall be computed by 
                using the straight line method and a useful life of 36 
                months.
                    ``(B) Computer software.--For purposes of this 
                section, the term `computer software' has the meaning 
                given to such term by section 197(e)(3)(B); except that 
                such term shall not include any such software which is 
                an amortizable section 197 intangible.
            ``(2) Certain interests or rights acquired separately.--If 
        a depreciation deduction is allowable under subsection (a) with 
        respect to any property described in subparagraph (B), (C), or 
        (D) of section 197(e)(4), such deduction shall be computed in 
        accordance with regulations prescribed by the Secretary.''
            (2) Allocation of basis in case of leased property.--
        Subsection (c) of section 167 is amended to read as follows:
    ``(c) Basis for Depreciation.--
            ``(1) In general.--The basis on which exhaustion, wear and 
        tear, and obsolescence are to be allowed in respect of any 
        property shall be the adjusted basis provided in section 1011, 
        for the purpose of determining the gain on the sale or other 
        disposition of such property.
            ``(2) Special rule for property subject to lease.--If any 
        property is acquired subject to a lease--
                    ``(A) no portion of the adjusted basis shall be 
                allocated to the leasehold interest, and
                    ``(B) the entire adjusted basis shall be taken into 
                account in determining the depreciation deduction (if 
                any) with respect to the property subject to the 
                lease.''
    (c) Amendments to Section 1253.--Subsection (d) of section 1253 is 
amended by striking paragraphs (2), (3), (4), and (5) and inserting the 
following:
            ``(2) Other payments.--Any amount paid or incurred on 
        account of a transfer, sale, or other disposition of a 
        franchise, trademark, or trade name to which paragraph (1) does 
        not apply shall be treated as an amount chargeable to capital 
        account.
            ``(3) Renewals, etc.--For purposes of determining the term 
        of a transfer agreement under this section, there shall be 
        taken into account all renewal options (and any other period 
        for which the parties reasonably expect the agreement to be 
        renewed).''
    (d) Amendment to Section 848.--Subsection (g) of section 848 is 
amended by striking ``this section'' and inserting ``this section or 
section 197''.
    (e) Amendments to Section 1060.--
            (1) Paragraph (1) of section 1060(b) is amended by striking 
        ``goodwill or going concern value'' and inserting ``section 197 
        intangibles''.
            (2) Paragraph (1) of section 1060(d) is amended by striking 
        ``goodwill or going concern value (or similar items)'' and 
        inserting ``section 197 intangibles''.
    (f) Technical and Conforming Amendments.--
            (1) Subsection (g) of section 167 (as redesignated by 
        subsection (b)) is amended to read as follows:
    ``(g) Cross References.--

                                ``(1) For additional rule applicable to 
depreciation of improvements in the case of mines, oil and gas wells, 
other natural deposits, and timber, see section 611.
                                ``(2) For amortization of goodwill and 
certain other intangibles, see section 197.''
            (2) Subsection (f) of section 642 is amended by striking 
        ``section 169'' and inserting ``sections 169 and 197''.
            (3) Subsection (a) of section 1016 is amended by striking 
        paragraph (19) and by redesignating the following paragraphs 
        accordingly.
            (4) Subparagraph (C) of section 1245(a)(2) is amended by 
        striking ``193, or 1253(d) (2) or (3)'' and inserting ``or 
        193''.
            (5) Paragraph (3) of section 1245(a) is amended by striking 
        ``section 185 or 1253(d) (2) or (3)''.
            (6) The table of sections for part VI of subchapter B of 
        chapter 1 is amended by adding at the end thereof the following 
        new item:

                              ``Sec. 197. Amortization of goodwill and 
                                        certain other intangibles.''
    (g) Effective Date.--
            (1) In general.--Except as otherwise provided in this 
        subsection, the amendments made by this section shall apply 
        with respect to property acquired after the date of the 
        enactment of this Act.
            (2) Election to have amendments apply to property acquired 
        after july 25, 1991.--
                    (A) In general.--If an election under this 
                paragraph applies to the taxpayer--
                            (i) the amendments made by this section 
                        shall apply to property acquired by the 
                        taxpayer after July 25, 1991,
                            (ii) subsection (c)(1)(A) of section 197 of 
                        the Internal Revenue Code of 1986 (as added by 
                        this section) (and so much of subsection 
                        (f)(9)(A) of such section 197 as precedes 
                        clause (i) thereof) shall be applied with 
                        respect to the taxpayer by treating July 25, 
                        1991, as the date of the enactment of such 
                        section, and
                            (iii) in applying subsection (f)(9) of such 
                        section, with respect to any property acquired 
                        by the taxpayer on or before the date of the 
                        enactment of this Act, only holding or use on 
                        July 25, 1991, shall be taken into account.
                    (B) Election.--An election under this paragraph 
                shall be made at such time and in such manner as the 
                Secretary of the Treasury or his delegate may 
                prescribe. Such an election by any taxpayer, once 
                made--
                            (i) may be revoked only with the consent of 
                        the Secretary, and
                            (ii) shall apply to the taxpayer making 
                        such election and any other taxpayer under 
                        common control with the taxpayer (within the 
                        meaning of subparagraphs (A) and (B) of section 
                        41(f)(1) of such Code) at any time after 
                        November 22, 1991, and on or before the date on 
                        which such election is made.
            (3) Elective binding contract exception.--
                    (A) In general.--The amendments made by this 
                section shall not apply to any acquisition of property 
                by the taxpayer if--
                            (i) such acquisition is pursuant to a 
                        written binding contract in effect on the date 
                        of the enactment of this Act and at all times 
                        thereafter before such acquisition,
                            (ii) an election under paragraph (2) does 
                        not apply to the taxpayer, and
                            (iii) the taxpayer makes an election under 
                        this paragraph with respect to such contract.
                    (B) Election.--An election under this paragraph 
                shall be made at such time and in such manner as the 
                Secretary of the Treasury or his delegate shall 
                prescribe. Such an election, once made--
                            (i) may be revoked only with the consent of 
                        the Secretary, and
                            (ii) shall apply to all property acquired 
                        pursuant to the contract with respect to which 
                        such election was made.
    (h) Annual Reports.--The Secretary of the Treasury shall submit 
annual reports to the Committee on Ways and Means of the House of 
Representatives and the Committee on Finance of the Senate on the 
implementation and effects of the amendments made by this section, 
including the effects of such amendments on merger and acquisition 
activities. The first such annual report shall be submitted on or 
before December 31, 1994.
    (i) Annual Reports on Outstanding Cases.--The Secretary of the 
Treasury shall submit annual reports to the Committee on Ways and Means 
of the House of Representatives and the Committee on Finance of the 
Senate regarding the volume of cases still outstanding that involve 
disputes regarding the amortization of intangibles, progress made in 
resolving such cases, efforts made to coordinate settlement 
proceedings, and factors inhibiting the resolution of such cases. The 
report shall also address the impact of the amendments made by this 
section on the volume of disputes regarding the amortization of 
intangibles. The first such annual report shall be submitted on or 
before December 31, 1994.

SEC. 14262. TREATMENT OF CERTAIN PAYMENTS TO RETIRED OR DECEASED 
              PARTNER.

    (a) Section 736(b) Not To Apply in Certain Cases.--Subsection (b) 
of section 736 (relating to payments for interest in partnership) is 
amended by adding at the end thereof the following new paragraph:
            ``(3) Limitation on application of paragraph (2).--
        Paragraph (2) shall apply only if--
                    ``(A) capital is not a material income-producing 
                factor for the partnership, and
                    ``(B) the retiring or deceased partner was a 
                general partner in the partnership.''
    (b) Limitation on Definition of Unrealized Receivables.--
            (1) In general.--Subsection (c) of section 751 (defining 
        unrealized receivables) is amended--
                    (A) by striking ``sections 731, 736, and 741'' each 
                place they appear and inserting ``, sections 731 and 
                741 (but not for purposes of section 736)'', and
                    (B) by striking ``section 731, 736, or 741'' each 
                place it appears and inserting ``section 731 or 741''.
            (2) Technical amendments.--
                    (A) Subsection (e) of section 751 is amended by 
                striking ``sections 731, 736, and 741'' and inserting 
                ``sections 731 and 741''.
                    (B) Section 736 is amended by striking subsection 
                (c).
    (c) Effective Date.--
            (1) In general.--The amendments made by this section shall 
        apply in the case of partners retiring or dying on or after 
        January 5, 1993.
            (2) Binding contract exception.--The amendments made by 
        this section shall not apply to any partner retiring on or 
        after January 5, 1993, if a written contract to purchase such 
        partner's interest in the partnership was binding on January 4, 
        1993, and at all times thereafter before such purchase.

                   PART VII--MISCELLANEOUS PROVISIONS

SEC. 14271. SUBSTANTIATION REQUIREMENT FOR DEDUCTION OF CERTAIN 
              CHARITABLE CONTRIBUTIONS.

    (a) Substantiation Requirement.--Section 170(f) (providing special 
rules relating to the deduction of charitable contributions and gifts) 
is amended by adding at the end the following new paragraph:
            ``(8) Substantiation requirement for certain 
        contributions.--
                    ``(A) General rule.--No deduction shall be allowed 
                under subsection (a) for any contribution of $750 or 
                more unless the taxpayer substantiates the contribution 
                by a contemporaneous written acknowledgment of the 
                contribution by the donee organization that meets the 
                requirements of subparagraph (B).
                    ``(B) Content of acknowledgment.--An acknowledgment 
                meets the requirements of this subparagraph if it 
                provides information sufficient to substantiate the 
                amount of the deductible contribution. If the 
                contribution was made by means of a payment part of 
                which constituted consideration for goods or services 
                provided by the donee organization, the acknowledgment 
                must provide a good faith estimate of the value of such 
                goods or services.
                    ``(C) Contemporaneous.--For purposes of 
                subparagraph (A), an acknowledgment shall be considered 
                to be contemporaneous if the taxpayer obtains the 
                acknowledgment on or before the earlier of--
                            ``(i) the date on which the taxpayer files 
                        a return for the taxable year in which the 
                        contribution was made, or
                            ``(ii) the due date (including extensions) 
                        for filing such return.
                    ``(D) Substantiation not required for contributions 
                reported by the donee organization.--Subparagraph (A) 
                shall not apply to a contribution if the donee 
                organization files a return, on such form and in 
                accordance with such regulations as the Secretary may 
                prescribe, which includes the information described in 
                subparagraph (B) with respect to the contribution.
                    ``(E) Regulations.--The Secretary shall prescribe 
                such regulations as may be necessary or appropriate to 
                carry out the purposes of this paragraph, including 
                regulations that may provide that some or all of the 
                requirements of this paragraph do not apply in 
                appropriate cases.''
    (b) Effective Date.--The provisions of this section shall apply to 
contributions made on or after January 1, 1994.

SEC. 14272. DISCLOSURE RELATED TO QUID PRO QUO CONTRIBUTIONS.

    (a) Disclosure Requirement.--Subchapter B of chapter 61 (relating 
to information and returns) is amended by redesignating section 6115 as 
section 6116 and by inserting after section 6114 the following new 
section:

``SEC. 6115. DISCLOSURE RELATED TO QUID PRO QUO CONTRIBUTIONS.

    ``(a) Disclosure Requirement.--If an organization described in 
section 170(c) (other than paragraph (1) thereof) receives a quid pro 
quo contribution, the organization shall, in connection with the 
solicitation or receipt of the contribution--
            ``(1) inform the donor that the amount of the contribution 
        that is deductible for Federal income tax purposes is limited 
        to the excess of the amount of any money and the value of any 
        property other than money contributed by the donor over the 
        value of the goods or services provided by the organization, 
        and
            ``(2) provide the donor with a good faith estimate of the 
        value of such goods or services.
    ``(b) Quid Pro Quo Contribution.--For purposes of this section, the 
term `quid pro quo contribution' means a payment made partly as a 
contribution and partly in consideration for goods or services provided 
to the payor by the donee organization.''
    (b) Penalty for Failure To Disclose.--Part I of subchapter B of 
chapter 68 (relating to assessable penalties) is amended by inserting 
after section 6713 the following new section:

``SEC. 6714. FAILURE TO MEET DISCLOSURE REQUIREMENTS APPLICABLE TO QUID 
              PRO QUO CONTRIBUTIONS.

    ``(a) Imposition of Penalty.--If an organization fails to meet the 
disclosure requirement of section 6115 with respect to a quid pro quo 
contribution, such organization shall pay a penalty of $10 for each 
contribution in respect of which the organization fails to make the 
required disclosure, except that the total penalty imposed by this 
subsection with respect to a particular fundraising event or mailing 
shall not exceed $5,000.
    ``(b) Reasonable Cause Exception.--No penalty shall be imposed 
under this section with respect to any failure if it is shown that such 
failure is due to reasonable cause.''
    (c) Clerical Amendments.--
            (1) The table for subchapter B of chapter 61 is amended by 
        striking the item relating to section 6115 and inserting the 
        following new item:

                              ``Sec. 6115. Disclosure related to quid 
                                        pro quo contributions.
                              ``Sec. 6116. Cross reference.''
            (2) The table for part I of subchapter B of chapter 68 is 
        amended by inserting after the item for section 6713 the 
        following new item:

                              ``Sec. 6714. Failure to meet disclosure 
                                        requirements applicable to quid 
                                        pro quo contributions.''
    (d) Effective Date.--The provisions of this section shall apply to 
quid pro quo contributions made on or after January 1, 1994.

SEC. 14273. DISALLOWANCE OF INTEREST ON CERTAIN OVERPAYMENTS OF TAX.

    (a) General Rule.--Subsection (e) of section 6611 is amended to 
read as follows:
    ``(e) Disallowance of Interest on Certain Overpayments.--
            ``(1) Refunds within 45 days after return is filed.--If any 
        overpayment of tax imposed by this title is refunded within 45 
        days after the last day prescribed for filing the return of 
        such tax (determined without regard to any extension of time 
        for filing the return) or, in the case of a return filed after 
        such last date, is refunded within 45 days after the date the 
        return is filed, no interest shall be allowed under subsection 
        (a) on such overpayment.
            ``(2) Refunds after claim for credit or refund.--If--
                    ``(A) the taxpayer files a claim for a credit or 
                refund for any overpayment of tax imposed by this 
                title, and
                    ``(B) such overpayment is refunded within 45 days 
                after such claim is filed,
        no interest shall be allowed on such overpayment from the date 
        the claim is filed until the day the refund is made.
            ``(3) IRS initiated adjustments.--If an adjustment 
        initiated by the Secretary, results in a refund or credit of an 
        overpayment, interest on such overpayment shall be computed by 
        subtracting 45 days from the number of days interest would 
        otherwise be allowed with respect to such overpayment.''
    (b) Effective Dates.--
            (1) Paragraph (1) of section 6611(e) of the Internal 
        Revenue Code of 1986 (as amended by subsection (a)) shall apply 
        in the case of returns the due date for which (determined 
        without regard to extensions) is on or after January 1, 1994.
            (2) Paragraph (2) of section 6611(e) of such Code (as so 
        amended) shall apply in the case of claims for credit or refund 
        of any overpayment filed on or after January 1, 1995, 
        regardless of the taxable period to which such refund relates.
            (3) Paragraph (3) of section 6611(e) of such Code (as so 
        amended) shall apply in the case of any refund paid on or after 
        January 1, 1995, regardless of the taxable period to which such 
        refund relates.

SEC. 14274. DENIAL OF DEDUCTION RELATING TO TRAVEL EXPENSES.

    (a) In General.--Section 274(m) (relating to additional limitations 
on travel expenses) is amended by adding at the end thereof the 
following new paragraph:
            ``(3) Travel expenses of spouse, dependent, or others.--No 
        deduction shall be allowed under this chapter (other than 
        section 217) for travel expenses paid or incurred with respect 
        to a spouse, dependent, or other individual accompanying the 
        taxpayer (or an officer or employee of the taxpayer) on 
        business travel, unless--
                    ``(A) the spouse, dependent, or other individual is 
                an employee of the taxpayer,
                    ``(B) the travel of the spouse, dependent, or other 
                individual is for a bona fide business purpose, and
                    ``(C) such expenses would otherwise be deductible 
                by the spouse, dependent, or other individual.''
    (b) Effective Date.--The amendment made by this section shall apply 
to amounts paid or incurred after December 31, 1993.

SEC. 14275. INCREASE IN WITHHOLDING FROM SUPPLEMENTAL WAGE PAYMENTS.

    If an employer elects under Treasury Regulation 31.3402 (g)-1 to 
determine the amount to be deducted and withheld from any supplemental 
wage payment by using a flat percentage rate, the rate to be used in 
determining the amount to be so deducted and withheld shall not be less 
than 28 percent. The preceding sentence shall apply to payments made 
after December 31, 1993.

     Subtitle C--Empowerment Zones and Enterprise Communities, Etc.

          PART I--EMPOWERMENT ZONES AND ENTERPRISE COMMUNITIES

SEC. 14301. DESIGNATION AND TREATMENT OF EMPOWERMENT ZONES AND 
              ENTERPRISE COMMUNITIES.

    (a) In General.--Chapter 1 (relating to normal taxes and surtaxes) 
is amended by inserting after subchapter T the following new 
subchapter:

  ``Subchapter U--Designation and Treatment of Empowerment Zones and 
                         Enterprise Communities

                              ``Part I. Designation.
                              ``Part II. Incentives for empowerment 
                                        zones and enterprise 
                                        communities.
                              ``Part III. Additional incentives for 
                                        empowerment zones.
                              ``Part IV. Regulations.

                         ``PART I--DESIGNATION

                              ``Sec. 1391. Designation procedure.
                              ``Sec. 1392. Eligibility criteria.
                              ``Sec. 1393. Definitions and special 
                                        rules.

``SEC. 1391. DESIGNATION PROCEDURE.

    ``(a) In General.--From among the areas nominated for designation 
under this section, the appropriate Secretaries may, in consultation 
with the Enterprise Board, designate empowerment zones and enterprise 
communities.
    ``(b) Number of Designations.--
            ``(1) Enterprise communities.--The appropriate Secretaries 
        may designate in the aggregate 100 nominated areas as 
        enterprise communities under this section, subject to the 
        availability of eligible nominated areas. Of that number, not 
        more than 65 may be designated in urban areas, not more than 30 
        may be designated in rural areas, and not more than 5 may be 
        designated by the Secretary of the Interior in Indian 
        reservations.
            ``(2) Empowerment zones.--The appropriate Secretaries may 
        designate in the aggregate 10 nominated areas as empowerment 
        zones under this section, subject to the availability of 
        eligible nominated areas. Of that number, not more than 6 may 
        be designated in urban areas, not more than 3 may be designated 
        in rural areas, and not more than 1 may be designated by the 
        Secretary of the Interior in an Indian reservation. If 6 
        empowerment zones are designated in urban areas, no less than 1 
        shall be designated in an urban area the most populous city of 
        which has a population of 500,000 or less. The Secretary of 
        Housing and Urban Development shall designate empowerment zones 
        located in urban areas in such a manner that the aggregate 
        population of all such zones does not exceed 750,000.
    ``(c) Period Designations May Be Made.--A designation may be made 
under this section only after 1993 and before 1996.
    ``(d) Period for Which Designation Is In Effect.--
            ``(1) In general.--Any designation under this section shall 
        remain in effect during the period beginning on the date of the 
        designation and ending on the earliest of--
                    ``(A) the close of the 10th calendar year beginning 
                on or after such date of designation,
                    ``(B) the termination date designated by the State 
                and local governments as provided for in their 
                nomination, or
                    ``(C) the date the appropriate Secretary revokes 
                the designation.
            ``(2) Revocation of designation.--
                    ``(A) In general.--The appropriate Secretary, in 
                consultation with the Enterprise Board, may revoke the 
                designation under this section of an area if such 
                Secretary determines that the local government or the 
                State in which it is located--
                            ``(i) has modified the boundaries of the 
                        area, or
                            ``(ii) is not complying substantially with, 
                        or fails to make progress in achieving the 
                        benchmarks set forth in, the strategic plan 
                        under subsection (f)(2).
                    ``(B) Applicable procedures.--A designation may be 
                revoked by the appropriate Secretary under subparagraph 
                (A) only after a hearing on the record involving 
                officials of the State or local government involved.
    ``(e) Limitations on Designations.--An area may be designated under 
subsection (a) only if--
            ``(1) the area is nominated by 1 or more local governments 
        and the State or States in which it is located for designation 
        under this section,
            ``(2) such State or States and the local governments have 
        the authority--
                    ``(A) to nominate the area for designation under 
                this section, and
                    ``(B) to provide the assurances described in 
                paragraph (3),
            ``(3) such State or States and the local governments 
        provide written assurances satisfactory to the appropriate 
        Secretary that the strategic plan described in the application 
        under subsection (f)(2) for such area will be implemented,
            ``(4) the appropriate Secretary determines that any 
        information furnished is reasonably accurate, and
            ``(5) such State or States and local governments certify 
        that no portion of the area nominated is already included in an 
        empowerment zone or in an enterprise community or in an area 
        otherwise nominated to be designated under this section.
    ``(f) Application.--An application for designation as an 
empowerment zone or as an enterprise community shall--
            ``(1) demonstrate that the nominated area satisfies the 
        eligibility criteria described in section 1392,
            ``(2) include a strategic plan for accomplishing the 
        purposes of this subchapter that--
                    ``(A) describes the coordinated economic, human, 
                community, and physical development plan and related 
                activities proposed for the nominated area,
                    ``(B) describes the process by which the affected 
                community is a full partner in the process of 
                developing and implementing the plan and the extent to 
                which local institutions and organizations have 
                contributed to the planning process,
                    ``(C) identifies the amount of State, local, and 
                private resources that will be available in the 
                nominated area and the private/public partnerships to 
                be used, which may include participation by, and 
                cooperation with, universities, medical centers, and 
                other private and public entities,
                    ``(D) identifies the funding requested under any 
                Federal program in support of the proposed economic, 
                human, community, and physical development and related 
                activities,
                    ``(E) identifies baselines, methods, and benchmarks 
                for measuring the success of carrying out the strategic 
                plan, including the extent to which poor persons and 
                families will be empowered to become economically self-
                sufficient, and
                    ``(F) does not include any action to assist any 
                establishment in relocating from one area outside the 
                nominated area to the nominated area, except that 
                assistance for the expansion of an existing business 
                entity through the establishment of a new branch, 
                affiliate, or subsidiary is permitted if--
                            ``(i) the establishment of the new branch, 
                        affiliate, or subsidiary will not result in a 
                        decrease in employment in the area of original 
                        location or in any other area where the 
                        existing business entity conducts business 
                        operations, and
                            ``(ii) there is no reason to believe that 
                        the new branch, affiliate, or subsidiary is 
                        being established with the intention of closing 
                        down the operations of the existing business 
                        entity in the area of its original location or 
                        in any other area where the existing business 
                        entity conducts business operation, and
            ``(3) include such other information as may be required by 
        the appropriate Secretary or the Enterprise Board.

``SEC. 1392. ELIGIBILITY CRITERIA.

    ``(a) In General.--A nominated area shall be eligible for 
designation under section 1391 only if it meets the following criteria:
            ``(1) Population.--The nominated area has a maximum 
        population of--
                    ``(A) in the case of an urban area, the lesser of--
                            ``(i) 200,000, or
                            ``(ii) the greater of 50,000 or 10 percent 
                        of the population of the most populous city 
                        located within the nominated area, and
                    ``(B) in the case of a rural area, 30,000.
            ``(2) Distress.--The nominated area is one of pervasive 
        poverty, unemployment, and general distress.
            ``(3) Size.--The nominated area--
                    ``(A) does not exceed 20 square miles if an urban 
                area or 1,000 square miles if a rural area or an Indian 
                reservation,
                    ``(B) has a boundary which is continuous, or, 
                except in the case of a rural area located in more than 
                1 State, consists of not more than 3 noncontiguous 
                parcels,
                    ``(C)(i) in the case of an urban area, is located 
                entirely within no more than 2 contiguous States, and
                    ``(ii) in the case of a rural area, is located 
                entirely within no more than 3 contiguous States, and
                    ``(D) does not include any portion of a central 
                business district (as such term is used for purposes of 
                the most recent Census of Retail Trade) unless the 
                poverty rate for each population census tract in such 
                district is not less than 35 percent (30 percent in the 
                case of an enterprise community).
            ``(4) Poverty rate.--The poverty rate--
                    ``(A) for each population census tract within the 
                nominated area is not less than 20 percent,
                    ``(B) for at least 90 percent of the population 
                census tracts within the nominated area is not less 
                than 25 percent, and
                    ``(C) for at least 50 percent of the population 
                census tracts within the nominated area is not less 
                than 35 percent.
    ``(b) Special Rules Relating to Determination of Poverty Rate.--For 
purposes of subsection (a)(4)--
            ``(1) Treatment of census tracts with small populations.--
                    ``(A) Tracts with no population.--In the case of a 
                population census tract with no population--
                            ``(i) such tract shall be treated as having 
                        a poverty rate which meets the requirements of 
                        subparagraphs (A) and (B) of subsection (a)(4), 
                        but
                            ``(ii) such tract shall be treated as 
                        having a zero poverty rate for purposes of 
                        applying subparagraph (C) thereof.
                    ``(B) Tracts with populations of less than 2,000.--
                A population census tract with a population of less 
                than 2,000 shall be treated as having a poverty rate 
                which meets the requirements of subparagraphs (A) and 
                (B) of subsection (a)(4) if more than 75 percent of 
                such tract is zoned for commercial or industrial use.
            ``(2) Discretion to adjust requirements.--Where necessary 
        to carry out the purposes of this subchapter, the appropriate 
        Secretary may reduce by 5 percentage points one of the 
        following thresholds for not more than 10 percent of the 
        population census tracts (or, if fewer, 5 population census 
        tracts) in the nominated area:
                    ``(A) The 20 percent threshold in subsection 
                (a)(4)(A).
                    ``(B) The 25 percent threshold in subsection 
                (a)(4)(B).
                    ``(C) The 35 percent threshold in subsection 
                (a)(4)(C).
        If the appropriate Secretary elects to reduce the threshold 
        under subparagraph (C) for an enterprise community, such 
        Secretary may (in lieu of applying the preceding sentence) 
        reduce by 10 percentage points the threshold under subparagraph 
        (C) for 3 population census tracts.
            ``(3) Each noncontiguous area must satisfy poverty rate 
        rule.--A nominated area may not include a noncontiguous parcel 
        unless such parcel separately meets (subject to paragraphs (1) 
        and (2)) the criteria set forth in subsection (a)(4).
            ``(4) Areas not within census tracts.--In the case of an 
        area which is not tracted for population census tracts, the 
        equivalent county divisions (as defined by the Bureau of the 
        Census for purposes of defining poverty areas) shall be used 
        for purposes of determining poverty rates.
    ``(c) Factors To Consider.--From among the nominated areas eligible 
for designation under section 1391 by the appropriate Secretary, such 
appropriate Secretary shall make designations of empowerment zones and 
enterprise communities on the basis of--
            ``(1) the effectiveness of the strategic plan submitted 
        pursuant to section 1391(f)(2) and the assurances made pursuant 
        to section 1391(e)(3), and
            ``(2) criteria specified by the Enterprise Board.

``SEC. 1393. DEFINITIONS AND SPECIAL RULES.

    ``(a) In General.--For purposes of this subchapter--
            ``(1) Appropriate secretary.--The term `appropriate 
        Secretary' means--
                    ``(A) the Secretary of Housing and Urban 
                Development in the case of any nominated area which is 
                located in an urban area,
                    ``(B) the Secretary of Agriculture in the case of 
                any nominated area which is located in a rural area, 
                and
                    ``(C) the Secretary of the Interior in the case of 
                any nominated area which is located in an Indian 
                reservation.
            ``(2) Enterprise board.--The term `Enterprise Board' means 
        any board hereafter established and designated for purposes of 
        this subchapter as the `Enterprise Board'.
            ``(3) Rural area.--The term `rural area' means any area 
        which is--
                    ``(A) outside of a metropolitan statistical area 
                (within the meaning of section 143(k)(2)(B)), or
                    ``(B) determined by the Secretary of Agriculture, 
                after consultation with the Secretary of Commerce, to 
                be a rural area.
            ``(4) Urban area.--The term `urban area' means an area 
        which is not a rural area.
            ``(5) Indian reservation.--
                    ``(A) In general.--The term `Indian reservation' 
                means a reservation as defined in--
                            ``(i) section 3(d) of the Indian Financing 
                        Act of 1974 (25 U.S.C. 1452(d)), or
                            ``(ii) section 4(10) of the Indian Child 
                        Welfare Act of 1978 (25 U.S.C. 1903(10)).
                    ``(B) Governments.--In the case of an area in an 
                Indian reservation, the reservation governing body (as 
                determined by the Secretary of the Interior) shall be 
                deemed to be both the State and local governments with 
                respect to such area.
            ``(6) Local government.--The term `local government' 
        means--
                    ``(A) any county, city, town, township, parish, 
                village, or other general purpose political subdivision 
                of a State, and
                    ``(B) any combination of political subdivisions 
                described in subparagraph (A) recognized by the 
                appropriate Secretary.
            ``(7) Nominated area.--The term `nominated area' means an 
        area which is nominated by 1 or more local governments and the 
        State or States in which it is located for designation under 
        section 1391.
            ``(8) Governments.--If more than 1 State or local 
        government seeks to nominate an area as a tax enterprise zone, 
        any reference to, or requirement of, this subchapter shall 
        apply to all such governments.
            ``(9) Special rule.--An area shall be treated as nominated 
        by a State and a local government if it is nominated by such 
        other entity as may be specified by the Enterprise Board.
            ``(10) Use of census data.--Population and poverty rate 
        shall be determined by the most recent decennial census data 
        available.
    ``(b) Empowerment Zone; Enterprise Community.--For purposes of this 
title, the terms `empowerment zone' and `enterprise community' mean 
areas designated as such under section 1391.

 ``PART II--INCENTIVES FOR EMPOWERMENT ZONES AND ENTERPRISE COMMUNITIES

                              ``Sec. 1394. Incentives.

``SEC. 1394. INCENTIVES.

    ``(a) Increase in Low Income Housing Credit.--For purposes of 
section 42(d)(5)(C), a building shall be treated as located in a 
qualified census tract if--
            ``(1) such building is located in a census tract having a 
        poverty rate of at least 30 percent (determined in accordance 
        with section 1393(a)(10)), and
            ``(2) such building is located in an empowerment zone or an 
        enterprise community.
    ``(b) Tax Exempt Enterprise Zone Facility Bonds.--
            ``(1) In general.--For purposes of part IV of subchapter B 
        of chapter 1 (relating to tax exemption requirements for State 
        and local bonds), the term `exempt facility bond' includes any 
        bond issued as part of an issue 95 percent or more of the net 
        proceeds (as defined in section 150(a)(3)) of which are to be 
        used to provide any enterprise zone facility.
            ``(2) Enterprise zone facility.--For purposes of this 
        subsection--
                    ``(A) In general.--The term `enterprise zone 
                facility' means any qualified zone property the 
                principal user of which is an enterprise zone business 
                (as defined in section 1399B), and any land which is 
                functionally related and subordinate to such property.
                    ``(B) Qualified zone property.--The term `qualified 
                zone property' has the meaning given such term by 
                section 1399(c); except that--
                            ``(i) section 1399(c)(3) shall not apply, 
                        and
                            ``(ii) the references to empowerment zones 
                        shall be treated as including references to 
                        enterprise communities.
            ``(3) Limitation on amount of bonds.--
                    ``(A) In general.--Paragraph (1) shall not apply to 
                any issue if the aggregate amount of outstanding 
                enterprise zone facility bonds allocable to any 
                enterprise zone business (taking into account such 
                issue) exceeds--
                            ``(i) $3,000,000 with respect to any 1 
                        empowerment zone or enterprise community, or
                            ``(ii) $20,000,000 with respect to all 
                        empowerment zones and enterprise communities.
                    ``(B) Aggregate enterprise zone facility bond 
                benefit.--For purposes of subparagraph (A), the 
                aggregate amount of outstanding enterprise zone 
                facility bonds allocable to any business shall be 
                determined under rules similar to the rules of section 
                144(a)(10), taking into account only bonds to which 
                paragraph (1) applies.
            ``(4) Acquisition of land and existing property 
        permitted.--The requirements of sections 147(c)(1)(A) and 
        147(d) shall not apply to any bond described in paragraph (1).
            ``(5) Partial exemption from volume cap.--Only for purposes 
        of section 146, the term `private activity bond' shall not 
        include 50 percent of any bond issued as part of an issue 
        described in paragraph (1).
            ``(6) Penalty for ceasing to meet requirements.--
                    ``(A) Failures corrected.--An issue which fails to 
                meet 1 or more of the requirements of paragraphs (1) 
                and (2) shall be treated as meeting such requirements 
                if--
                            ``(i) the issuer and any principal user in 
                        good faith attempted to meet such requirements, 
                        and
                            ``(ii) any failure to meet such 
                        requirements is corrected within a reasonable 
                        period after such failure is first discovered.
                    ``(B) Loss of deductions where facility ceases to 
                be qualified.--No deduction shall be allowed under this 
                chapter for interest on any financing provided from any 
                bond to which paragraph (1) applies with respect to any 
                facility to the extent such interest accrues during the 
                period beginning on the first day of the calendar year 
                which includes the date on which--
                            ``(i) substantially all of the facility 
                        with respect to which the financing was 
                        provided ceases to be used in an empowerment 
                        zone or enterprise community, or
                            ``(ii) the principal user of such facility 
                        ceases to be an enterprise zone business (as 
                        defined in section 1399B, but treating 
                        references to empowerment zones as including 
                        references to enterprise communities).
                    ``(C) Exception if zone ceases.--Subparagraphs (A) 
                and (B) shall not apply solely by reason of the 
                termination or revocation of a designation as an 
                empowerment zone or an enterprise community.
                    ``(D) Exception for bankruptcy.--Subparagraphs (A) 
                and (B) shall not apply to any cessation resulting from 
                bankruptcy.
    ``(c) Enterprise Zone Facility Bonds Not Subject to Interest 
Deduction Limitations on Financial Institutions.--Any tax-exempt bond 
described in subsection (b)(1)--
            ``(1) shall be treated as acquired before August 8, 1986, 
        for purposes of sections 265(b) and 291(e)(1)(B), and
            ``(2) shall not be taken into account in determining 
        whether any issuer is a qualified small issuer for purposes of 
        section 265(b).
    ``(d) Additional Low-Income Housing Credit Amount.--
            ``(1) In general.--Each State which includes any 
        empowerment zone or enterprise community shall receive an 
        additional State housing credit ceiling amount for purposes of 
        section 42 of $818,000 for each such zone or community.
            ``(2) Additional amount must be allocated to buildings in 
        designated areas.--
                    ``(A) In general.--The portion of the additional 
                amount received under paragraph (1) by reason of any 
                empowerment zone or enterprise community which may be 
                applied to increase the State housing credit ceiling 
                for any calendar year shall not exceed the lesser of--
                            ``(i) the unused portion of such additional 
                        amount with respect to such zone or community, 
                        or
                            ``(ii) the aggregate housing credit dollar 
                        amount allocated from such ceiling for such 
                        year to buildings located in such zone or 
                        community.
                    ``(B) Unused portion.--For purposes of subparagraph 
                (A), the unused portion for any calendar year of the 
                additional amount received under paragraph (1) is the 
                amount equal to the excess of--
                            ``(i) the additional amount received under 
                        paragraph (1) by the State by reason of the 
                        zone or community, over
                            ``(ii) the aggregate of the increases in 
                        the State housing credit ceiling by reason of 
                        such amount for all prior calendar years.
            ``(3) Availability of additional amount.--None of the 
        additional amount received under paragraph (1) may be applied 
        after 1996.
            ``(4) Areas located in more than 1 state.--In the case of 
        an empowerment zone or enterprise community which is located in 
        more than 1 State, the $818,000 amount shall be allocated among 
        such States in proportion to the population of such zone or 
        community which is within each such State.
            ``(5) Zones located in constitutional home rule cities.--If 
        any empowerment zone or enterprise community is located in a 
        constitutional home rule city (as defined in section 
        42(h)(4)(E)), the additional amount received under paragraph 
        (1) shall be allocated to such city and shall not be taken into 
        account in determining such city's share of the State housing 
        credit ceiling under section 42(h)(4)(E).

        ``PART III--ADDITIONAL INCENTIVES FOR EMPOWERMENT ZONES

                              ``Subpart A. Empowerment zone employment 
                                        credit.
                              ``Subpart B. Zone resident empowerment 
                                        savings credit.
                              ``Subpart C. Depreciation and other 
                                        incentives.

            ``Subpart A--Empowerment Zone Employment Credit

                              ``Sec. 1396. Empowerment zone employment 
                                        credit.
                              ``Sec. 1397. Other definitions and 
                                        special rules.

``SEC. 1396. EMPOWERMENT ZONE EMPLOYMENT CREDIT.

    ``(a) Amount of Credit.--For purposes of section 38, the amount of 
the empowerment zone employment credit determined under this section 
with respect to any employer for any taxable year is the applicable 
percentage of the qualified zone wages paid or incurred during the 
calendar year which ends with or within such taxable year.
    ``(b) Applicable Percentage.--For purposes of this section, the 
term `applicable percentage' means the percentage determined in 
accordance with the following table:

                  ``In the case of wages paid or
                                                         The applicable
                    incurred during calendar year:
                                                         percentage is:
                          1994 through 2000..........          25      
                          2001.......................          20      
                          2002.......................          15      
                          2003.......................          10      
                          2004.......................           5      
    ``(c) Qualified Zone Wages.--
            ``(1) In general.--For purposes of this section, the term 
        `qualified zone wages' means any wages paid or incurred by an 
        employer for services performed by an employee while such 
        employee is a qualified zone employee.
            ``(2) Only first $20,000 of wages per year taken into 
        account.--With respect to each qualified zone employee, the 
        amount of qualified zone wages which may be taken into account 
        for a calendar year shall not exceed $20,000.
            ``(3) Coordination with targeted jobs credit.--
                    ``(A) In general.--The term `qualified zone wages' 
                shall not include wages taken into account in 
                determining the credit under section 51.
                    ``(B) Coordination with paragraph (2).--The $20,000 
                amount in paragraph (2) shall be reduced for any 
                calendar year by the amount of wages paid or incurred 
                during such year which are taken into account in 
                determining the credit under section 51.
    ``(d) Qualified Zone Employee.--For purposes of this section--
            ``(1) In general.--Except as otherwise provided in this 
        subsection, the term `qualified zone employee' means, with 
        respect to any period, any employee of an employer if--
                    ``(A) substantially all of the services performed 
                during such period by such employee for such employer 
                are performed within an empowerment zone in a trade or 
                business of the employer, and
                    ``(B) the principal place of abode of such employee 
                while performing such services is within such 
                empowerment zone.
            ``(2) Certain individuals not eligible.--The term 
        `qualified zone employee' shall not include--
                    ``(A) any individual described in subparagraph (A), 
                (B), or (C) of section 51(i)(1),
                    ``(B) any 5-percent owner (as defined in section 
                416(i)(1)(B)),
                    ``(C) any individual employed by the employer for 
                less than 90 days,
                    ``(D) any individual employed by the employer at 
                any facility described in section 144(c)(6)(B), and
                    ``(E) any individual employed by the employer in a 
                trade or business the principal activity of which is 
                farming (within the meaning of subparagraphs (A) or (B) 
                of section 2032A(e)(5)), but only if, as of the close 
                of the taxable year, the sum of--
                            ``(i) the aggregate unadjusted bases (or, 
                        if greater, the fair market value) of the 
                        assets owned by the employer which are used in 
                        such a trade or business, and
                            ``(ii) the aggregate value of assets leased 
                        by the employer which are used in such a trade 
                        or business (as determined under regulations 
                        prescribed by the Secretary),
                exceeds $500,000.
            ``(3) Special rules related to termination of employment.--
                    ``(A) In general.--Paragraph (2)(C) shall not apply 
                to--
                            ``(i) a termination of employment of an 
                        individual who before the close of the period 
                        referred to in paragraph (2)(C) becomes 
                        disabled to perform the services of such 
                        employment unless such disability is removed 
                        before the close of such period and the 
                        taxpayer fails to offer reemployment to such 
                        individual, or
                            ``(ii) a termination of employment of an 
                        individual if it is determined under the 
                        applicable State unemployment compensation law 
                        that the termination was due to the misconduct 
                        of such individual.
                    ``(B) Changes in form of business.--For purposes of 
                paragraph (2)(C), the employment relationship between 
                the taxpayer and an employee shall not be treated as 
                terminated--
                            ``(i) by a transaction to which section 
                        381(a) applies if the employee continues to be 
                        employed by the acquiring corporation, or
                            ``(ii) by reason of a mere change in the 
                        form of conducting the trade or business of the 
                        taxpayer if the employee continues to be 
                        employed in such trade or business and the 
                        taxpayer retains a substantial interest in such 
                        trade or business.

``SEC. 1397. OTHER DEFINITIONS AND SPECIAL RULES.

    ``(a) Wages.--For purposes of this subpart--
            ``(1) In general.--The term `wages' has the same meaning as 
        when used in section 51.
            ``(2) Certain training and educational benefits.--
                    ``(A) In general.--The following amounts shall be 
                treated as wages paid to an employee:
                            ``(i) Any amount paid or incurred by an 
                        employer which is excludable from the gross 
                        income of an employee under section 127, but 
                        only to the extent paid or incurred to a person 
                        not related to the employer.
                            ``(ii) In the case of an employee who has 
                        not attained the age of 19, any amount paid or 
                        incurred by an employer for any youth training 
                        program operated by such employer in 
                        conjunction with local education officials.
                    ``(B) Related person.--A person is related to any 
                other person if the person bears a relationship to such 
                other person specified in section 267(b) or 707(b)(1), 
                or such person and such other person are engaged in 
                trades or businesses under common control (within the 
                meaning of subsections (a) and (b) of section 52). For 
                purposes of the preceding sentence, in applying section 
                267(b) or 707(b)(1), `10 percent' shall be substituted 
                for `50 percent'.
    ``(b) Controlled Groups.--For purposes of this subpart--
            ``(1) all employers treated as a single employer under 
        subsection (a) or (b) of section 52 shall be treated as a 
        single employer for purposes of this subpart, and
            ``(2) the credit (if any) determined under section 1396 
        with respect to each such employer shall be its proportionate 
        share of the wages giving rise to such credit.
    ``(c) Certain Other Rules Made Applicable.--For purposes of this 
subpart, rules similar to the rules of section 51(k) and subsections 
(c), (d), and (e) of section 52 shall apply.
    ``(d) Notice of Availability of Advance Payment of Earned Income 
Credit.--Each employer shall take reasonable steps to notify all 
qualified zone employees of the availability to eligible individuals of 
receiving advanced payments of the credit under section 32 (relating to 
the earned income credit).

         ``Subpart B--Zone Resident Empowerment Savings Credit

                              ``Sec. 1398. Zone resident empowerment 
                                        savings credit.

``SEC. 1398. ZONE RESIDENT EMPOWERMENT SAVINGS CREDIT.

    ``(a) General Rule.--For purposes of section 38, the amount of the 
zone resident empowerment savings credit determined under this section 
with respect to any employer for any taxable year is 50 percent of the 
qualified savings contributions for the taxable year.
    ``(b) Qualified Savings Contributions.--For purposes of this 
section--
            ``(1) In general.--The term `qualified savings 
        contribution' means any contribution by an employer to a 
        defined contribution plan--
                    ``(A) which is made on behalf of an employee in 
                connection with services performed by such employee 
                while such employee is a qualified zone employee, and
                    ``(B) with respect to which the employee has a 
                nonforfeitable right.
            ``(2) Limitation based on compensation.--
                    ``(A) In general.--The qualified savings 
                contributions taken into account with respect to any 
                qualified zone employee for any taxable year shall not 
                exceed an amount equal to 2 percent of so much of the 
                employee's compensation (as defined in section 414(s)) 
                as does not exceed $35,000.
                    ``(B) Zone designation in effect for partial 
                year.--If a designation of an area as an empowerment 
                zone is in effect for less than the entire taxable 
                year, the $35,000 amount under subparagraph (A) shall 
                be ratably reduced to reflect the portion of the year 
                such designation is not in effect.
            ``(3) Certain contributions excluded.--The term `qualified 
        savings contribution' shall not include any contribution--
                    ``(A) to a plan subject to the funding requirements 
                of section 412,
                    ``(B) to a tax credit employee stock ownership plan 
                (as defined in section 409(a)) or to an employee stock 
                ownership plan (as defined in section 4975(e)(7)),
                    ``(C) to a stock bonus plan, or
                    ``(D) which is an elective deferral (within the 
                meaning of section 402(g)(3)).
            ``(4) Simplified employee pension.--A contribution to an 
        individual savings plan pursuant to a simplified employee 
        pension (as defined in section 408(k)) shall be treated as a 
        contribution to a defined contribution plan.
    ``(c) Employer Requirements.--This section shall apply to an 
employer for any taxable year only if--
            ``(1) the employer elects the application of this section, 
        and
            ``(2) the plan pursuant to which any qualified savings 
        contribution is made provides that any contribution to such 
        plan (whether or not a qualified savings contribution) may be 
        withdrawn by a qualified zone employee as described in section 
        72(t)(2) (B) or (D).
    ``(d) Definitions.--For purposes of this section--
            ``(1) Qualified zone employee.--The term `qualified zone 
        employee' has the meaning given such term by section 1396(d).
            ``(2) Defined contribution plan.--The term `defined 
        contribution plan' means a defined contribution plan (as 
        defined in section 414(i)) which is described in section 401(a) 
        and includes a trust exempt from tax under section 501(a).
    ``(e) Treatment of Plans.--A plan shall not be treated as failing 
to meet any requirement of part I of subchapter D of chapter 1 by 
reason of permitting withdrawals required to be permitted under 
subsection (c)(2).

             ``Subpart C--Depreciation and Other Incentives

                              ``Sec. 1399. Depreciation benefits.
                              ``Sec. 1399A. Additional exclusion from 
                                        volume cap for certain 
                                        enterprise zone facility bonds.
                              ``Sec. 1399B. Enterprise zone business.

``SEC. 1399. DEPRECIATION BENEFITS.

    ``(a) Increase in Expensing Under Section 179.--
            ``(1) In general.--In the case of an enterprise zone 
        business, for purposes of section 179--
                    ``(A) qualified zone property shall be treated as 
                section 179 property,
                    ``(B) the limitation under section 179(b)(1) shall 
                be increased by the lesser of--
                            ``(i) $50,000, or
                            ``(ii) the cost of qualified zone property 
                        placed in service during the taxable year, and
                    ``(C) section 179(b)(2) shall be applied by 
                substituting `by one-half of the amount by which the 
                cost of qualified zone property (other than real 
                property) and other section 179 property' for `by the 
                amount by which the cost of section 179 property'.
    ``(b) Accelerated Depreciation.--
            ``(1) In general.--For purposes of section 168(a), with 
        respect to qualified zone property of an enterprise zone 
        business, the applicable recovery period shall be determined in 
        accordance with the table contained in paragraph (2) in lieu of 
        the table contained in section 168(c).
            ``(2) Applicable recovery period for qualified zone 
        property.--For purposes of paragraph (1)--

                                                         The applicable
``In the case of:                                   recovery period is:
    3-year property...............................              2 years
    5-year property...............................              3 years
    7-year property...............................              4 years
    10-year property..............................              6 years
    15-year property..............................              9 years
    20-year property..............................             12 years
    Nonresidential real property..................            22 years.
            ``(3) Deduction allowed in computing minimum tax.--
        Paragraph (1) shall apply for purposes of determining 
        alternative minimum taxable income under section 55.
    ``(c) Qualified Zone Property.--For purposes of this section--
            ``(1) In general.--The term `qualified zone property' means 
        any property to which section 168 applies (or would apply but 
        for section 179) if--
                    ``(A) such property was acquired by the taxpayer by 
                purchase (as defined in section 179(d)(2)) after the 
                date on which the designation of the empowerment zone 
                took effect,
                    ``(B) the original use of which in an empowerment 
                zone commences with the taxpayer, and
                    ``(C) substantially all of the use of which is in 
                an empowerment zone and is in the active conduct of a 
                trade or business by the taxpayer in such zone.
            ``(2) Special rule for substantial renovations.--In the 
        case of any property which is substantially renovated by the 
        taxpayer, the requirements of subparagraphs (A) and (B) of 
        paragraph (1) shall be treated as satisfied. For purposes of 
        the preceding sentence, property shall be treated as 
        substantially renovated by the taxpayer if, during any 24-month 
        period beginning after the date on which the designation of the 
        empowerment zone took effect, additions to basis with respect 
        to such property in the hands of the taxpayer exceed the 
        greater of (i) an amount equal to the adjusted basis at the 
        beginning of such 24-month period in the hands of the taxpayer, 
        or (ii) $5,000.
            ``(3) Exception for alternative depreciation property.--The 
        term `qualified zone property' does not include any property to 
        which the alternative depreciation system under section 168(g) 
        applies, determined--
                    ``(A) without regard to section 168(g)(7) (relating 
                to election to use alternative depreciation system), 
                and
                    ``(B) after the application of section 280F(b) 
                (relating to listed property with limited business 
                use).
    ``(d) Special Rules for Sale-Leasebacks.--For purposes of 
subsection (c)(1)(B), if property is sold and leased back by the 
taxpayer within 3 months after the date such property was originally 
placed in service, such property shall be treated as originally placed 
in service not earlier than the date on which such property is used 
under the leaseback.
    ``(e) Recapture.--Rules similar to the rules under section 
179(d)(10) shall apply with respect to any qualified zone property of 
any business which ceases to be an enterprise zone business.

``SEC. 1399A. ADDITIONAL EXCLUSION FROM VOLUME CAP FOR CERTAIN 
              ENTERPRISE ZONE FACILITY BONDS.

    ``(a) In General.--Section 1394(b)(5) shall be applied by 
substituting `75 percent' for `50 percent' in the case of any bond 
described in section 1394(b)(1) issued as part of an issue 95 percent 
or more of the net proceeds (as defined in section 150(a)(3)) of which 
are used to provide qualified zone property the principal user of which 
is any enterprise zone business if the ownership requirements of 
subsection (b) are met with respect to such business.
    ``(b) Ownership Requirements.--The ownership requirements of this 
subsection are met with respect to an enterprise zone business if--
            ``(1) in the case of a sole proprietorship, the principal 
        place of abode of the proprietor is in an empowerment zone,
            ``(2) in the case of a corporation, more than 50 percent of 
        the stock (by vote and value) in the corporation is owned 
        (directly or indirectly) by individuals whose principal place 
        of abode is in an empowerment zone, and
            ``(3) in the case of a partnership, more than 50 percent of 
        the capital and profits interests in the partnership is owned 
        (directly or indirectly) by individuals whose principal place 
        of abode is in an empowerment zone.

``SEC. 1399B. ENTERPRISE ZONE BUSINESS DEFINED.

    ``(a) In General.--For purposes of this subpart, the term 
`enterprise zone business' means--
            ``(1) any qualified business entity, and
            ``(2) any qualified proprietorship.
    ``(b) Qualified Business Entity.--For purposes of this section, the 
term `qualified business entity' means, with respect to any taxable 
year, any corporation or partnership if for such year--
            ``(1) every trade or business of such entity is the active 
        conduct of a qualified business within an empowerment zone,
            ``(2) at least 80 percent of the total gross income of such 
        entity is derived from the active conduct of such business,
            ``(3) substantially all of the use of the tangible property 
        of such entity (whether owned or leased) is within an 
        empowerment zone,
            ``(4) substantially all of the intangible property of such 
        entity is used in, and exclusively related to, the active 
        conduct of any such business,
            ``(5) substantially all of the services performed for such 
        entity by its employees are performed in an empowerment zone,
            ``(6) at least 35 percent of its employees are residents of 
        an empowerment zone,
            ``(7) less than 5 percent of the average of the aggregate 
        unadjusted bases of the property of such entity is attributable 
        to collectibles (as defined in section 408(m)(2)) other than 
        collectibles that are held primarily for sale to customers in 
        the ordinary course of such business, and
            ``(8) less than 5 percent of the average of the aggregate 
        unadjusted bases of the property of such entity is attributable 
        to nonqualified financial property.
    ``(c) Qualified Proprietorship.--For purposes of this section, the 
term `qualified proprietorship' means, with respect to any taxable 
year, any qualified business carried on by an individual as a 
proprietorship if for such year--
            ``(1) at least 80 percent of the total gross income of such 
        individual from such business is derived from the active 
        conduct of such business in an empowerment zone,
            ``(2) substantially all of the use of the tangible property 
        of such individual in such business (whether owned or leased) 
        is within an empowerment zone,
            ``(3) substantially all of the intangible property of such 
        business is used in, and exclusively related to, the active 
        conduct of such business,
            ``(4) substantially all of the services performed for such 
        individual in such business by employees of such business are 
        performed in an empowerment zone,
            ``(5) at least 35 percent of such employees are residents 
        of an empowerment zone,
            ``(6) less than 5 percent of the average of the aggregate 
        unadjusted bases of the property of such individual which is 
        used in such business is attributable to collectibles (as 
        defined in section 408(m)(2)) other than collectibles that are 
        held primarily for sale to customers in the ordinary course of 
        such business, and
            ``(7) less than 5 percent of the average of the aggregate 
        unadjusted bases of the property of such individual which is 
        used in such business is attributable to nonqualified financial 
        property.
For purposes of this subsection, the term `employee' includes the 
proprietor.
    ``(d) Qualified Business.--For purposes of this section--
            ``(1) In general.--Except as otherwise provided in this 
        subsection, the term `qualified business' means any trade or 
        business.
            ``(2) Rental of real property.--The rental to others of 
        real property located in an empowerment zone shall be treated 
        as a qualified business if and only if--
                    ``(A) the property is not residential rental 
                property (as defined in section 168(e)(2)), and
                    ``(B) at least 50 percent of the gross rental 
                income from the real property is from enterprise zone 
                businesses.
            ``(3) Rental of tangible personal property.--The rental to 
        others of tangible personal property shall be treated as a 
        qualified business if and only if substantially all of the 
        rental of such property is by enterprise zone businesses or by 
        residents of an empowerment zone.
            ``(4) Treatment of business holding intangibles.--The term 
        `qualified business' shall not include any trade or business 
        consisting predominantly of the development or holding of 
        intangibles for sale or license.
            ``(5) Certain businesses excluded.--The term `qualified 
        business' shall not include--
                    ``(A) any trade or business consisting of the 
                operation of any facility described in section 
                144(c)(6)(B), and
                    ``(B) any trade or business the principal activity 
                of which is farming (within the meaning of 
                subparagraphs (A) or (B) of section 2032A(e)(5)), but 
                only if, as of the close of the preceding taxable year, 
                the sum of--
                            ``(i) the aggregate unadjusted bases (or, 
                        if greater, the fair market value) of the 
                        assets owned by the taxpayer which are used in 
                        such a trade or business, and
                            ``(ii) the aggregate value of assets leased 
                        by the taxpayer which are used in such a trade 
                        or business,
                exceeds $500,000.
        For purposes of subparagraph (B), rules similar to the rules of 
        section 1397(b) shall apply.
    ``(e) Nonqualified Financial Property.--For purposes of this 
section, the term `nonqualified financial property' means debt, stock, 
partnership interests, options, futures contracts, forward contracts, 
warrants, notional principal contracts, annuities, and other similar 
property specified in regulations; except that such term shall not 
include--
            ``(1) reasonable amounts of working capital held in cash, 
        cash equivalents, or debt instruments with a term of 18 months 
        or less, or
            ``(2) debt instruments described in section 1221(4).

                         ``PART IV--REGULATIONS

                              ``Sec. 1399C. Regulations.

``SEC. 1399C. REGULATIONS.

    ``The Secretary shall prescribe such regulations as may be 
necessary or appropriate to carry out the purposes of parts II and III, 
including--
            ``(1) regulations limiting the benefit of parts II and III 
        in circumstances where such benefits, in combination with 
        benefits provided under other Federal programs, would result in 
        an activity being 100 percent or more subsidized by the Federal 
        Government,
            ``(2) regulations preventing abuse of the provisions of 
        parts II and III, and
            ``(3) regulations dealing with inadvertent failures of 
        entities to be enterprise zone businesses.''
    (b) Clerical Amendment.--The table of subchapters for chapter 1 is 
amended by inserting after the item relating to subchapter T the 
following new item:

                              ``Subchapter U. Designation and treatment 
                                        of empowerment zones and 
                                        enterprise communities.''

SEC. 14302. EXPANSION OF TARGETED JOBS CREDIT.

    (a) Allowance of Credit for Hiring Empowerment Zone Resident.--
Paragraph (1) of section 51(d) (defining members of targeted groups) is 
amended by striking ``or'' at the end of subparagraph (I), by striking 
the period at the end of subparagraph (J) and inserting ``, or'', and 
by adding at the end the following new subparagraph:
            ``(K) an economically disadvantaged empowerment zone 
        resident.''
    (b) Economically Disadvantaged Empowerment Zone Resident.--Section 
51(d) is amended by redesignating paragraphs (13) through (16) as 
paragraphs (14) through (17), respectively, and by inserting after 
paragraph (12) the following new paragraph:
            ``(13) Economically disadvantaged empowerment zone 
        resident.--The term `economically disadvantaged empowerment 
        zone resident' means an individual--
                    ``(A) whose principal place of abode while 
                performing services for the employer is within an 
                empowerment zone, and
                    ``(B) who is certified by the designated local 
                agency as being a member of an economically 
                disadvantaged family (as determined under paragraph 
                (11)).
        Such term shall not include a qualified zone employee (as 
        defined in section 1396(d) without regard to paragraph (2) 
        thereof).''
    (c) Conforming Amendment.--Subparagraph (C) of section 51(d)(12) is 
amended by striking ``paragraph (14)'' and inserting ``paragraph 
(15)''.

SEC. 14303. TECHNICAL AND CONFORMING AMENDMENTS.

    (a) Certain Credits Part of General Business Credit.--
            (1) Subsection (b) of section 38 (relating to current year 
        business credit) is amended by striking ``plus'' at the end of 
        paragraph (7), by striking the period at the end of paragraph 
        (8) and inserting a comma, and by adding at the end the 
        following new paragraphs:
            ``(9) the empowerment zone employment credit determined 
        under section 1396(a), plus
            ``(10) the zone resident empowerment savings credit 
        determined under section 1398.''
            (2) Subsection (d) of section 39 is amended by adding at 
        the end the following new paragraph:
            ``(4) Enterprise zone credits.--No portion of the unused 
        business credit which is attributable to the credit determined 
        under section 1396 (relating to empowerment zone employment 
        credit) or section 1398 (relating to zone resident empowerment 
        savings credit) may be carried to any taxable year ending 
        before January 1, 1994.''
    (b) Denial of Deduction for Portion of Wages Equal to Empowerment 
Zone Employment Credit.--
            (1) Subsection (a) of section 280C (relating to rule for 
        targeted jobs credit) is amended--
                    (A) by striking ``the amount of the credit 
                determined for the taxable year under section 51(a)'' 
                and inserting ``the sum of the credits determined for 
                the taxable year under sections 51(a) and 1396(a)'', 
                and
                    (B) by striking ``Targeted Jobs Credit'' in the 
                subsection heading and inserting ``Employment 
                Credits''.
            (2) Subsection (c) of section 196 (relating to deduction 
        for certain unused business credits) is amended by striking 
        ``and'' at the end of paragraph (4), by striking the period at 
        the end of paragraph (5) and inserting ``, and'', and by adding 
        at the end the following new paragraph:
            ``(6) the empowerment zone employment credit determined 
        under section 1396(a).''
    (c) Employment and Savings Credits May Offset 25 Percent of Minimum 
Tax.--
            (1) In general.--Section 38(c) (relating to limitation 
        based on amount of tax) is amended by redesignating paragraph 
        (2) as paragraph (3) and by inserting after paragraph (1) the 
        following new paragraph:
            ``(2) Empowerment zone credits may offset 25 percent of 
        minimum tax.--
                    ``(A) In general.--In the case of the empowerment 
                zone credits--
                            ``(i) this section and section 39 shall be 
                        applied separately with respect to such 
                        credits, and
                            ``(ii) for purposes of applying paragraph 
                        (1) to such credits--
                                    ``(I) 75 percent of the tentative 
                                minimum tax shall be substituted for 
                                the tentative minimum tax under 
                                subparagraph (A) thereof, and
                                    ``(II) the limitation under 
                                paragraph (1) (as modified by subclause 
                                (I)) shall be reduced by the credit 
                                allowed under subsection (a) for the 
                                taxable year (other than the 
                                empowerment zone credits).
                    ``(B) Empowerment zone credits.--For purposes of 
                this paragraph, the term `empowerment zone credits' 
                means the portion of the credit under subsection (a) 
                which is attributable to the credits determined under 
                section 1396 (relating to empowerment zone employment 
                credit) and section 1398 (relating to zone resident 
                empowerment savings credit).''
    (d) Changes Relating to Empowerment Zone Resident Empowerment 
Savings Credit.--
            (1) Disallowance of deduction.--Section 404 (relating to 
        deduction for certain employer contributions) is amended by 
        adding at the end the following new subsection:
    ``(m) Coordination With Empowerment Zone Credit.--No deduction 
shall be allowed under this section for any qualified employer 
contribution taken into account in computing the credit determined 
under section 1398.''
            (2) Penalty-free distributions.--
                    (A) In general.--Paragraph (2) of section 72(t) 
                (relating to exceptions to 10-percent additional tax on 
                early distributions from qualified retirement plans) is 
                amended by adding at the end thereof the following new 
                subparagraph:
                    ``(D) Distributions from certain plans for first 
                home purchases or educational expenses.--
                            ``(i) In general.--Distributions to an 
                        individual from a qualified retirement plan--
                                    ``(I) which are qualified first-
                                time homebuyer distributions (as 
                                defined in paragraph (6)),
                                    ``(II) to the extent such 
                                distributions do not exceed the 
                                qualified higher education expenses (as 
                                defined in paragraph (7)) of the 
                                taxpayer for the taxable year, or
                                    ``(III) to the extent such 
                                distributions do not exceed an amount 
                                equal to the aggregate investment made 
                                by the taxpayer during the taxable year 
                                in any enterprise zone business (as 
                                defined in section 1399B) that meets 
                                the ownership requirements of section 
                                1399A(b).
                            ``(ii) Limitation.--Clause (i) shall not 
                        apply to the extent that the aggregate amount 
                        of the distributions described in clause (i) is 
                        greater than the excess of--
                                    ``(I) the qualified savings 
                                contributions (as defined in section 
                                1398(b)) of the taxpayer, and any 
                                earnings thereon, over
                                    ``(II) the aggregate amounts to 
                                which clause (i) and the last sentence 
                                of paragraph (3)(A) applied for 
                                preceding taxable years.''
                    (B) Definitions.--Section 72(t) is amended by 
                adding at the end thereof the following new paragraphs:
            ``(6) Qualified first-time homebuyer distributions.--For 
        purposes of paragraph (2)(D)(i)(I)--
                    ``(A) In general.--The term `qualified first-time 
                homebuyer distribution' means any payment or 
                distribution received by an individual to the extent 
                such payment or distribution is used by the individual 
                before the close of the 60th day after the day on which 
                such payment or distribution is received to pay 
                qualified acquisition costs with respect to a principal 
                residence of a first-time homebuyer who is such 
                individual or the spouse of such individual.
                    ``(B) Qualified acquisition costs.--For purposes of 
                this paragraph, the term `qualified acquisition costs' 
                means the costs of acquiring, constructing, or 
                reconstructing a residence. Such term includes any 
                usual or reasonable settlement, financing, or other 
                closing costs.
                    ``(C) First-time homebuyer; other definitions.--For 
                purposes of this paragraph--
                            ``(i) First-time homebuyer.--The term 
                        `first-time homebuyer' means any individual 
                        if--
                                    ``(I) such individual (and if 
                                married, such individual's spouse) had 
                                no present ownership interest in a 
                                principal residence during the 3-year 
                                period ending on the date of 
                                acquisition of the principal residence 
                                to which this paragraph applies, and
                                    ``(II) subsection (a)(6), (h), or 
                                (k) of section 1034 did not suspend the 
                                running of any period of time specified 
                                in section 1034 with respect to such 
                                individual on the day before the date 
                                the distribution is applied pursuant to 
                                subparagraph (A)(ii).
                            ``(ii) Principal residence.--The term 
                        `principal residence' has the same meaning as 
                        when used in section 1034.
                            ``(iii) Date of acquisition.--The term 
                        `date of acquisition' means the date--
                                    ``(I) on which a binding contract 
                                to acquire the principal residence to 
                                which subparagraph (A) applies is 
                                entered into, or
                                    ``(II) on which construction or 
                                reconstruction of such a principal 
                                residence is commenced.
                    ``(D) Special rule where delay in acquisition.--If 
                any distribution from any qualified retirement plan 
                fails to meet the requirements of subparagraph (A) 
                solely by reason of a delay or cancellation of the 
                purchase or construction of the residence, the amount 
                of the distribution may be recontributed to the plan 
                from which it was distributed within 120 days after the 
                date of such distribution.
            ``(7) Qualified higher education expenses.--For purposes of 
        paragraph (2)(D)(ii)(II)--
                    ``(A) In general.--The term `qualified higher 
                education expenses' means tuition, fees, books, 
                supplies, and equipment required for the enrollment or 
                attendance of--
                            ``(i) the taxpayer,
                            ``(ii) the taxpayer's spouse, or
                            ``(iii) the taxpayer's child (as defined in 
                        section 151(c)(3)) or grandchild,
                at an eligible educational institution (as defined in 
                section 135(c)(3)).
                    ``(B) Coordination with savings bond provisions.--
                The amount of qualified higher education expenses for 
                any taxable year shall be reduced by any amount 
                excludable from gross income under section 135.''
                    (C) Conforming amendments.--
                            (i) Subparagraph (B) of section 72(t)(2) is 
                        amended by striking ``or (C)'' and inserting 
                        ``, (C), or (D)''.
                            (ii) Section 401(k)(2)(B)(i) is amended by 
                        striking ``or'' at the end of subclause (III), 
                        by striking ``and'' at the end of subclause 
                        (IV) and inserting ``or'', and by inserting 
                        after subclause (IV) the following new 
                        subclause:
                                    ``(V) subject to the limitation of 
                                section 72(t)(2)(D)(ii), the date on 
                                which qualified first-time homebuyer 
                                distributions (as defined in section 
                                72(t)(6)), distributions for qualified 
                                higher education expenses (as defined 
                                in section 72(t)(7)), or distributions 
                                for investments described in section 
                                72(t)(2)(D)(i)(III) are made, and''.
    (e) Amendment of Targeted Jobs Credit.--Subparagraph (A) of section 
51(i)(1) is amended by inserting ``, or, if the taxpayer is an entity 
other than a corporation, to any individual who owns, directly or 
indirectly, more than 50 percent of the capital and profits interests 
in the entity,'' after ``of the corporation''.
    (f) Carryovers.--Subsection (c) of section 381 (relating to 
carryovers in certain corporate acquisitions) is amended by adding at 
the end the following new paragraph:
            ``(26) Enterprise zone provisions.--The acquiring 
        corporation shall take into account (to the extent proper to 
        carry out the purposes of this section and subchapter U, and 
        under such regulations as may be prescribed by the Secretary) 
        the items required to be taken into account for purposes of 
        subchapter U in respect of the distributor or transferor 
        corporation.''

SEC. 14304. EFFECTIVE DATE.

    The amendments made by this part shall take effect on the date of 
the enactment of this Act.

  PART II--CREDIT FOR CONTRIBUTIONS TO CERTAIN COMMUNITY DEVELOPMENT 
                              CORPORATIONS

SEC. 14311. CREDIT FOR CONTRIBUTIONS TO CERTAIN COMMUNITY DEVELOPMENT 
              CORPORATIONS.

    (a) In General.--For purposes of section 38 of the Internal Revenue 
Code of 1986, the current year business credit shall include the credit 
determined under this section.
    (b) Determination of Credit.--The credit determined under this 
section for each taxable year in the credit period with respect to any 
qualified CDC contribution made by the taxpayer is an amount equal to 5 
percent of such contribution.
    (c) Credit Period.--For purposes of this section, the credit period 
with respect to any qualified CDC contribution is the period of 10 
taxable years beginning with the taxable year during which such 
contribution was made.
    (d) Qualified CDC Contribution.--For purposes of this section--
            (1) In general.--The term ``qualified CDC contribution'' 
        means any transfer of cash--
                    (A) which is made to a selected community 
                development corporation during the 5-year period 
                beginning on the date such corporation was selected for 
                purposes of this section,
                    (B) the amount of which is available for use by 
                such corporation for at least 10 years,
                    (C) which is to be used by such corporation for 
                qualified low-income assistance within its operational 
                area, and
                    (D) which is designated by such corporation for 
                purposes of this section.
            (2) Limitations on amount designated.--The aggregate amount 
        of contributions to a selected community development 
        corporation which may be designated by such corporation shall 
        not exceed $4,000,000.
    (e) Selected Community Development Corporations.--
            (1) In general.--For purposes of this section, the term 
        ``selected community development corporation'' means any 
        corporation--
                    (A) which is described in section 501(c)(3) of such 
                Code and exempt from tax under section 501(a) of such 
                Code,
                    (B) the principal purposes of which include 
                promoting employment of, and business opportunities 
                for, low-income individuals who are residents of the 
                operational area, and
                    (C) which is selected by the Secretary of Housing 
                and Urban Development for purposes of this section.
            (2) Only 10 corporations may be selected.--
                    (A) In general.--The Secretary of Housing and Urban 
                Development may select 10 corporations for purposes of 
                this section, subject to the availability of eligible 
                corporations. Such selections may be made only before 
                July 1, 1994. At least 4 of the operational areas of 
                the corporations selected must be rural areas (as 
                defined by section 1393(a)(3) of such Code).
                    (B) Priority of designations.--In selecting 
                corporations for purposes of this section, such 
                Secretary shall give priority to corporations with a 
                demonstrated record of performance in administering 
                community development programs which target at least 75 
                percent of the jobs emanating from their investment 
                funds to low income or unemployed individuals.
            (3) Operational areas must have certain characteristics.--A 
        corporation may be selected for purposes of this section only 
        if its operational area meets the following criteria:
                    (A) The area meets the size requirements under 
                section 1392(a)(3).
                    (B) The unemployment rate (as determined by the 
                appropriate available data) is not less than the 
                national unemployment rate.
                    (C) The median family income of residents of such 
                area does not exceed 80 percent of the median gross 
                income of residents of the jurisdiction of the local 
                government which includes such area.
    (f) Qualified Low-Income Assistance.--For purposes of this section, 
the term ``qualified low-income assistance'' means assistance--
            (1) which is designed to provide employment of, and 
        business opportunities for, low-income individuals who are 
        residents of the operational area of the community development 
        corporation, and
            (2) which is approved by the Secretary of Housing and Urban 
        Development.

                      Subtitle D--Other Provisions

                     PART I--DISCLOSURE PROVISIONS

SEC. 14401. DISCLOSURE OF RETURN INFORMATION FOR ADMINISTRATION OF 
              CERTAIN VETERANS PROGRAMS.

    (a) General Rule.--Subparagraph (D) of section 6103(l)(7) (relating 
to disclosure of return information to Federal, State, and local 
agencies administering certain programs) is amended by striking 
``September 30, 1997'' in the second sentence following clause (viii) 
and inserting ``September 30, 1998''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
take effect on the date of the enactment of this Act.

SEC. 14402. DISCLOSURE OF RETURN INFORMATION TO CARRY OUT INCOME 
              CONTINGENT REPAYMENT OF STUDENT LOANS.

    (a) General Rule.--Subsection (l) of section 6103 (relating to 
confidentiality and disclosure of returns and return information) is 
amended by adding at the end thereof the following new paragraph:
            ``(13) Disclosure of return information to carry out income 
        contingent repayment of student loans.--
                    ``(A) In general.--The Secretary may, upon written 
                request from the Secretary of Education, disclose to 
                officers and employees of the Department of Education 
                return information with respect to a taxpayer who has 
                received an applicable student loan and whose loan 
                repayment amounts are based in whole or in part on the 
                taxpayer's income. Such return information shall be 
                limited to--
                            ``(i) taxpayer identity information with 
                        respect to such taxpayer,
                            ``(ii) the filing status of such taxpayer, 
                        and
                            ``(iii) the adjusted gross income of such 
                        taxpayer.
                    ``(B) Restriction on use of disclosed 
                information.--Return information disclosed under 
                subparagraph (A) may be used by officers and employees 
                of the Department of Education only for the purposes 
                of, and to the extent necessary in, establishing the 
                appropriate income contingent repayment amount for an 
                applicable student loan.
                    ``(C) Applicable student loan.--For purposes of 
                this paragraph, the term `applicable student loan' 
                means--
                            ``(i) any loan made under the program 
                        authorized under part D of title IV of the 
                        Higher Education Act of 1965, and
                            ``(ii) any loan made under part B or E of 
                        title IV of the Higher Education Act of 1965 
                        which is in default and has been assigned to 
                        the Department of Education.
                    ``(D) Termination.--This paragraph shall not apply 
                to any request made after September 30, 1998.''
    (b) Conforming Amendments.--
            (1) So much of paragraph (4) of section 6103(m) as precedes 
        subparagraph (B) thereof is amended to read as follows:
            ``(4) Individuals who owe an overpayment of federal pell 
        grants or who have defaulted on student loans administered by 
        the department of education.--
                    ``(A) In general.--Upon written request by the 
                Secretary of Education, the Secretary may disclose the 
                mailing address of any taxpayer--
                            ``(i) who owes an overpayment of a grant 
                        awarded to such taxpayer under subpart 1 of 
                        part A of title IV of the Higher Education Act 
                        of 1965, or
                            ``(ii) who has defaulted on a loan--
                                    ``(I) made under part B, D, or E of 
                                title IV of the Higher Education Act of 
                                1965, or
                                    ``(II) made pursuant to section 
                                3(a)(1) of the Migration and Refugee 
                                Assistance Act of 1962 to a student at 
                                an institution of higher education,
                for use only by officers, employees, or agents of the 
                Department of Education for purposes of locating such 
                taxpayer for purposes of collecting such overpayment or 
                loan.''
            (2) Subparagraph (B) of section 6103(m)(4) is amended--
                    (A) in clause (i), by striking ``under part B'' and 
                inserting ``under part B or D''; and
                    (B) in clause (ii), by striking ``under part E'' 
                and inserting ``under subpart 1 of part A, or part D or 
                E,'';
            (3) Section 6103(p) is amended--
                    (A) in paragraph (3)(A), by striking ``(11), or 
                (12), (m)'' and inserting ``(11), (12), or (13), (m)'';
                    (B) in paragraph (4)--
                            (i) in the matter preceding subparagraph 
                        (A), by striking out ``(10), or (11),'' and 
                        inserting ``(10), (11), or (13),'', and
                            (ii) in subparagraph (F)(ii), by striking 
                        ``(11), or (12),'' and inserting ``(11), (12), 
                        or (13),''.
    (c) Effective Date.--The amendments made by this section shall take 
effect on the date of the enactment of this Act.
    (d) Study of Internal Revenue Service Collection of Student 
Loans.--
            (1) General rule.--The Secretary of the Treasury, in 
        consultation with the Secretary of Education, shall conduct a 
        study of the feasibility of implementing a system for the 
        repayment of Federal student loans through wage withholding or 
        other means involving the Internal Revenue Service. Such study 
        shall include an examination of--
                    (A) whether the Internal Revenue Service could 
                implement such a system within its current resources 
                and without adversely affecting the ability of the 
                Internal Revenue Service to collect tax revenues,
                    (B) the cumulative impact on voluntary compliance 
                with the tax system of increased disclosure of tax 
                return information and increased Internal Revenue 
                Service involvement in nontax collection activities,
                    (C) the anticipated effect on the management of 
                Federal student loan collections and on borrower 
                repayment of such loans, and
                    (D) the ability of the Internal Revenue Service to 
                effectively service student loans.
            (2) Recommendations.--Not later than the date 6 months 
        after the date of the enactment of this Act, the Secretary of 
        the Treasury shall submit to the Congress a report on the study 
        conducted under paragraph (1) (together with such legislative 
        recommendations as such Secretary may deem advisable).

SEC. 14403. USE OF RETURN INFORMATION FOR INCOME VERIFICATION UNDER 
              CERTAIN HOUSING ASSISTANCE PROGRAMS.

    (a) In General.--Subparagraph (D) of section 6103(l)(7) (relating 
to the disclosure of return information to Federal, State, and local 
agencies administering certain programs) is amended--
            (1) in clause (vii), by striking ``and'' at the end;
            (2) in clause (viii), by striking the period at the end and 
        inserting ``; and'';
            (3) by inserting after clause (viii) the following new 
        clause:
            ``(ix) any housing assistance program administered by the 
        Department of Housing and Urban Development that involves 
        initial and periodic review of an applicant's or participant's 
        income, except that return information may be disclosed under 
        this clause only on written request by the Secretary of Housing 
        and Urban Development and only for use by officers and 
        employees of the Department of Housing and Urban Development 
        with respect to applicants for and participants in such 
        programs.''; and
            (4) by adding at the end thereof the following: ``Clause 
        (ix) shall not apply after September 30, 1998.''
    (b) Conforming Amendment.--The heading of paragraph (7) of section 
6103(l) is amended by inserting after ``code'' the following: ``, or 
certain housing assistance programs''.
    (c) Effective Date.--The amendments made by this section shall take 
effect on the date of the enactment of this Act.
    (d) Study.--The Secretary of the Treasury or his delegate, in 
consultation with the Secretary of Housing and Urban Development, shall 
conduct a study on--
            (1) whether the information provided under section 
        6103(l)(7)(D)(ix) of the Internal Revenue Code of 1986 is being 
        used effectively by the Department of Housing and Urban 
        Development,
            (2) such Department's compliance with the requirements of 
        section 6103(p) of such Code, and
            (3) the impact on the privacy rights of applicants for and 
        participants in housing assistance programs administered by the 
        Department of Housing and Urban Development.
The report of such study shall be submitted before January 1, 1998, to 
the Congress.

                      PART II--USER FEE PROVISIONS

SEC. 14411. FEES FOR APPLICATIONS FOR ALCOHOL LABELING AND FORMULA 
              REVIEWS.

    (a) In General.--The Secretary of the Treasury or his delegate 
(hereinafter in this section referred to as the `Secretary') shall 
establish a program requiring the payment of user fees for--
            (1) requests for each certificate of alcohol label approval 
        required under the Federal Alcohol Administration Act (27 
        U.S.C. 201 et seq.) and for each request for exemption from 
        such requirement, and
            (2) requests for each formula review, and requests for each 
        statement of process (including laboratory tests and analyses), 
        under such Act or under chapter 51 of the Internal Revenue Code 
        of 1986.
    (b) Program Criteria.--
            (1) In general.--The fees charged under the program 
        required by subsection (a) shall be determined such that the 
        Secretary estimates that the aggregate of such fees received 
        during any fiscal year will be $5,000,000.
            (2) Minimum fees.--The fee charged under the program 
        required by subsection (a) shall not be less than--
                    (A) $50 for each request referred to in subsection 
                (a)(1), and
                    (B) $250 for each request referred to in subsection 
                (a)(2).
    (c) Application of Section.--Subsection (a) shall apply to requests 
made on or after the 90th day after the date of the enactment of this 
Act.
    (d) Deposit and Credit as Offsetting Receipts.--The amounts 
collected by the Secretary under the program required by subsection (a) 
(to the extent such amounts do not exceed $5,000,000) shall be 
deposited into the Treasury as offsetting receipts and ascribed to the 
alcohol compliance program of the Bureau of Alcohol, Tobacco, and 
Firearms.

SEC. 14412. USE OF HARBOR MAINTENANCE TRUST FUND AMOUNTS FOR 
              ADMINISTRATIVE EXPENSES.

    (a) In General.--Paragraph (3) of section 9505(c) (relating to 
expenditures from Harbor Maintenance Trust Fund) is amended to read as 
follows:
            ``(3) for the payment of all expenses of administration 
        incurred by the Department of the Treasury in administering 
        subchapter A of chapter 36 (relating to harbor maintenance 
        tax), but not in excess of $5,000,000 for any fiscal year.''
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to fiscal years beginning after the date of the enactment of this 
Act.

SEC. 14413. INCREASE IN TAX ON FUEL USED IN COMMERCIAL TRANSPORTATION 
              ON INLAND WATERWAYS.

    (a) In General.--The table contained in section 4042(a)(2)(A) is 
amended to read as follows:

                  ``If the use occurs during:
                                                 The tax per gallon is:
                          1994.......................    24 cents      
                          1995.......................    40 cents      
                          1996.......................    55 cents      
                          1997 or thereafter......... 70 cents.''      
    (b) Effective Date.--The amendment made by subsection (a) shall 
take effect on January 1, 1994.

                      PART III--PUBLIC DEBT LIMIT

SEC. 14421. INCREASE IN PUBLIC DEBT LIMIT.

    (a) General Rule.--Subsection (b) of section 3101 of title 31, 
United States Code, is amended by striking out the dollar limitation 
contained in such subsection and inserting in lieu thereof 
``$4,900,000,000,000''.
    (b) Repeal of Temporary Increase.--Effective on and after the date 
of the enactment of this Act, section 1 of Public Law 103-12 is hereby 
repealed.

                      PART IV--VACCINE PROVISIONS

SEC. 14431. EXCISE TAX ON CERTAIN VACCINES MADE PERMANENT.

    (a) Tax.--Subsection (c) of section 4131 (relating to tax on 
certain vaccines) is amended to read as follows:
    ``(c) Application of Section.--The tax imposed by this section 
shall apply--
            ``(1) after December 31, 1987, and before January 1, 1993, 
        and
            ``(2) during periods after the date of the enactment of 
        this subsection.''
    (b) Trust Fund.--Paragraph (1) of section 9510(c) (relating to 
expenditures from Vaccine Injury Compensation Trust Fund) is amended by 
striking ``and before October 1, 1992,''.
    (c) Study.--The Secretary of the Treasury, in consultation with the 
Secretary of Health and Human Services, shall conduct a study of--
            (1) the estimated amount that will be paid from the Vaccine 
        Injury Compensation Trust Fund with respect to vaccines 
        administered after September 30, 1988,
            (2) the rates of vaccine-related injury or death with 
        respect to the various types of such vaccines,
            (3) new vaccines and immunization practices being developed 
        or used for which amounts may be paid from such Trust Fund,
            (4) whether additional vaccines should be included in the 
        vaccine injury compensation program, and
            (5) the appropriate treatment of vaccines produced by State 
        governmental entities.
The report of such study shall be submitted not later than 1 year after 
the date of the enactment of this Act, to the Committee on Ways and 
Means of the House of Representatives and the Committee on Finance of 
the Senate.
    (d) Floor Stocks Tax.--
            (1) Imposition of tax.--On any taxable vaccine--
                    (A) which was sold by the manufacturer, producer, 
                or importer before the date of the enactment of this 
                Act,
                    (B) on which no tax was imposed by section 4131 of 
                the Internal Revenue Code of 1986 (or, if such tax was 
                imposed, was credited or refunded), and
                    (C) which is held on such date by any person for 
                sale or use,
        there is hereby imposed a tax in the amount determined under 
        section 4131(b) of such Code.
            (2) Liability for tax and method of payment.--
                    (A) Liability for tax.--The person holding any 
                taxable vaccine to which the tax imposed by paragraph 
                (1) applies shall be liable for such tax.
                    (B) Method of payment.--The tax imposed by 
                paragraph (1) shall be paid in such manner as the 
                Secretary shall prescribe by regulations.
                    (C) Time for payment.--The tax imposed by paragraph 
                (1) shall be paid on or before the last day of the 6th 
                month beginning after the date of the enactment of this 
                Act.
            (3) Definitions.--For purposes of this subsection, terms 
        used in this subsection which are also used in section 4131 of 
        such Code shall have the respective meanings such terms have in 
        such section.
            (4) Other laws applicable.--All provisions of law, 
        including penalties, applicable with respect to the taxes 
        imposed by section 4131 of such Code shall, insofar as 
        applicable and not inconsistent with the provisions of this 
        subsection, apply to the floor stocks taxes imposed by 
        paragraph (1), to the same extent as if such taxes were imposed 
        by such section 4131.

SEC. 14432. CONTINUATION COVERAGE UNDER GROUP HEALTH PLANS OF COSTS OF 
              PEDIATRIC VACCINES.

    (a) In General.--Paragraph (1) of section 4980B(f) is amended by 
inserting ``the coverage of the costs of pediatric vaccines (as defined 
under section 2162 of the Public Health Service Act) is not reduced 
below the coverage provided by the plan as of May 1, 1993, and only 
if'' after ``only if''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply with respect to plan years beginning after the date of the 
enactment of this Act.

SEC. 14433. CHILDHOOD IMMUNIZATION TRUST FUND.

    (a) In General.--Subchapter A of chapter 98 (relating to trust fund 
code) is amended by adding at the end thereof the following new 
section:

``SEC. 9512. CHILDHOOD IMMUNIZATION TRUST FUND.

    ``(a) Creation of Trust Fund.--There is established in the Treasury 
of the United States a trust fund to be known as the `Childhood 
Immunization Trust Fund', consisting of such amounts as may be 
appropriated or credited to such Trust Fund as provided in this section 
or section 9602(b).
    ``(b) Transfers to Trust Fund.--There are hereby appropriated to 
the Childhood Immunization Trust Fund amounts equivalent to the taxes 
received in the Treasury under any tax hereafter specified by law for 
purposes of this subsection.
    ``(c) Expenditures From Trust Fund.--Amounts in the Childhood 
Immunization Trust Fund shall be available, as provided in 
appropriation Acts, only for purposes of making expenditures to carry 
out part A of subtitle 3 of title XXI of the Public Health Service 
Act.''
    (b) Clerical Amendment.--The table of sections for such subchapter 
A is amended by adding at the end thereof the following new item:

                              ``Sec. 9512. Childhood Immunization Trust 
                                        Fund.''
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