Bowles-Simpson Plan of Lowering America's Debt Act

To adopt the seven immediate reforms recommended by the National Commission on Fiscal Responsibility and Reform to reduce spending and make the Federal Government more efficient. 1. Short title; table of contents (a) In general This Act may be cited as the Bowles-Simpson Plan of Lowering America’s Debt Act (b) Table of contents The table of contents for this Act is as follows: Sec. 1. Short title; table of contents. Title I—Reduced expenditures Sec. 101. Reduction in appropriations to the White House and Congress. Sec. 102. Denial of certain annual pay adjustments for Members of Congress. Sec. 103. Pay freeze for Federal employees. Sec. 104. Reduction in Federal workforce. Sec. 105. Reduction in Government travel costs. Sec. 106. Limitation on Government printing costs. Sec. 107. Reduction in Federal vehicle costs. Sec. 108. Sale of excess Federal property. Sec. 109. Prohibition on earmarks. Title II—Tax Reform Sec. 200. Amendment of 1986 Code. Subtitle A—Tax rates Sec. 201. Individual rates. Sec. 202. Repeal of alternative minimum tax on individuals. Sec. 203. Permanent repeal of personal exemption phaseout. Sec. 204. Permanent repeal of phaseout of overall limitation on itemized deductions. Sec. 205. Corporate income tax rate reduced to flat rate of 20 percent. Sec. 206. Renewed temporary dividends received deduction. Subtitle B—Elimination of tax expenditures Sec. 211. Termination of credit for increasing research activities. Sec. 212. Termination of deduction for intangible drilling and development costs. Sec. 213. Repeal of domestic production activities deduction with respect to production of coal, lignite, or oil shale. Sec. 214. Repeal percentage depletion for oil and natural gas wells. Sec. 215. Termination of credit for electricity produced from certain renewable resources. Sec. 216. Termination of energy credit. Sec. 217. Repeal of credit for alcohol used as fuel. Sec. 218. Repeal of credit for alcohol fuel, biodiesel, and alternative fuel mixtures. Sec. 219. Repeal of credit for biodiesel and renewable diesel used as fuel. Sec. 220. Repeal of credit for certain plug-in electric vehicles. Sec. 221. Early termination of credit for qualified fuel cell motor vehicles. Sec. 222. Repeal of deduction for energy conservation subsidies provided by public utilities. Sec. 223. Repeal of qualifying advanced coal project credit. Sec. 224. Repeal of qualifying gasification project credit. Sec. 225. Repeal of special allowance for cellulosic biofuel plant property. Sec. 226. Repeal of election to expense certain refineries. Sec. 227. Repeal of 2-year amortization of geological and geophysical expenditures. Sec. 228. Repeal of deduction for energy efficient commercial building property. Sec. 229. Repeal of credit for construction of new energy efficient homes. Sec. 230. Repeal of credit for energy efficient appliances. Sec. 231. Repeal of credit for residential energy efficient property. Sec. 232. Repeal of advanced energy project credit. Sec. 233. Repeal of credit for carbon dioxide sequestration. Sec. 234. Repeal of low-income housing credit. Sec. 235. Repeal of Hope and Lifetime Learning Credits. Sec. 236. Repeal of work opportunity tax credit. Sec. 237. Repeal of credit for expenses for household and dependent care services necessary for gainful employment. Sec. 238. Repeal of credit for adoption expenses. Sec. 239. Repeal of credit for expenditures to provide access to disabled individuals. Sec. 240. Repeal of earned income tax credit. Sec. 241. Repeal of energy conservation subsidies provided by public utilities. Sec. 242. Repeal of election to expense certain refinery property. Sec. 243. Repeal of deduction for endangered species recovery expenditures. Sec. 244. Repeal of exclusion of cancellation of indebtedness income of solvent farmers. Sec. 245. Repeal of alternative minimum tax treatment of certain property and casualty insurance companies. Sec. 246. Repeal of small life insurance company deduction. Sec. 247. Termination of $25,000 exemption from passive loss rules for rental real estate activities. Sec. 248. Repeal of discharge of indebtedness exclusion. Sec. 249. Repeal of certain exceptions for imputed interest rules. Sec. 250. Termination of partial exclusion for gain from certain small business stock. Sec. 251. Termination of treatment of losses on small business stock as ordinary. Sec. 252. Repeal of student loan interest deduction. Sec. 253. Repeal of deduction of tuition and related expenses. Sec. 254. Repeal of gross income exclusion for United States savings bonds used to pay higher education expenses. Sec. 255. Elimination of personal exemption for students age 19 and older. Sec. 256. Elimination of above the line deduction for certain expenses of elementary and secondary school teachers. Sec. 257. Elimination of gross income exclusion for discharge of certain student loan debt. Sec. 258. Repeal of exclusion from gross income for rental value of parsonages. Sec. 259. Repeal of exclusion from gross income for benefits provided to volunteer firefighters and emergency medical responders. Sec. 260. Repeal of special treatment of Blue Cross and Blue Shield organizations, etc. Sec. 261. Sense of the House regarding a territorial tax system. Subtitle C—Phaseout of Tax Expenditures Sec. 271. Five-year phaseout of certain tax expenditures. Subtitle D—Special Status Sec. 381. Termination of qualified energy conservation bonds. Sec. 382. Termination of new clean renewable energy bonds. Sec. 383. Termination of exempt facility bond treatment for water, sewage, and solid waste facilities. Sec. 384. Termination of expensing and amortization of reforestation expenditures and expensing of timber-growing costs. Sec. 385. Termination of deferral of gain on sales of stock in agricultural refiners and processors to eligible farm cooperatives. Sec. 386. Termination of election to expense certain depreciable business assets. Sec. 387. Termination of qualified small issue bonds. Sec. 388. Termination of exempt facility bond treatment for qualified highway or surface freight transfer facilities. Sec. 389. Termination of exempt facility bond treatment for airports, docks, and wharves. Sec. 390. Termination of tribal economic development bonds. Sec. 391. Termination of exclusion from gross income of United States savings bonds interest used to pay higher education expenses. Sec. 392. Termination of qualified zone academy bonds. Sec. 393. Termination of exempt facility bond treatment for qualified public educational facilities. Sec. 394. Termination of hospital bonds. I Reduced expenditures 101. Reduction in appropriations to the White House and Congress (a) Appropriations to the White House Notwithstanding any other provision of law, the total amount of funds appropriated to the appropriations account under the heading The White House EXECUTIVE OFFICE OF THE PRESIDENT AND FUNDS APPROPRIATED TO THE PRESIDENT (b) Appropriations to Congress Notwithstanding any other provision of law, the total amount of funds appropriated under the headings SENATE HOUSE OF REPRESENTATIVES 102. Denial of certain annual pay adjustments for Members of Congress Notwithstanding any other provision of law, no adjustment shall be made under section 601(a) of the Legislative Reorganization Act of 1946 ( 2 U.S.C. 31 103. Pay freeze for Federal employees (a) In general Section 147 of the Continuing Appropriations Act, 2011 ( Public Law 111–242 5 U.S.C. 5303 Public Law 112–175 (1) in subsection (b)(1), by striking the matter after ending on shall be made December 31, 2015 (2) in subsection (c), by striking the matter after ending on no senior executive December 31, 2015 (b) Elimination of delayed adjustment Section 114(b) of the Continuing Appropriations Resolution, 2013 is repealed. 104. Reduction in Federal workforce (a) Definition For the purpose of this section— (1) the term total number of Federal employees (2) the term Federal employee (3) the term agency (b) Limitation The President, through the Office of Management and Budget (in consultation with the Office of Personnel Management), shall take appropriate measures to ensure that, effective beginning in fiscal year 2017, the total number of Federal employees (as determined under subsection (c)) shall not exceed 90 percent of the total number of Federal employees as of September 30, 2013 (as so determined). (c) Monitoring and notification The Office of Management and Budget (in consultation with the Office of Personnel Management)— (1) shall continuously monitor all agencies and make a determination, as of September 30, 2013, and the last day of each quarter of each fiscal year beginning thereafter, as to whether or not the total number of Federal employees exceeds the maximum number allowable under subsection (b); and (2) whenever a determination under paragraph (1) is made that the total number of Federal employees exceeds the maximum number allowable under subsection (b), shall provide written notice to that effect to the President and Congress within 14 days after the last day of the quarter to which such determination relates. (d) Compliance Whenever, with respect to the quarter ending on September 30, 2016, or any subsequent quarter, the Office of Management and Budget provides written notice under subsection (c)(2) that the total number of Federal employees exceeds the maximum number allowable under subsection (b), no agency may thereafter appoint any employee to fill any vacancy within such agency until the Office of Management and Budget provides written notice to the President and Congress of a determination under subsection (c)(1) that the total number of Federal employees no longer exceeds the maximum number allowable under subsection (b). Any notice under the preceding sentence shall be provided within 14 days after the last day of the quarter to which the determination relates. (e) Waiver (1) Emergencies This section may be waived upon a determination by the President that— (A) the existence of a state of war or other national security concern so requires; or (B) the existence of an extraordinary emergency threatening life, health, public safety, property, or the environment so requires. (2) Agency efficiency or critical mission This section may be waived, with respect to a particular position or category of positions in an agency, upon a determination by the President that the efficiency of the agency or the performance of a critical agency mission so requires. (f) Replacement rate To the extent necessary to achieve the workforce reduction required by subsection (b), the Office of Management and Budget (in consultation with the Office of Personnel Management) shall take appropriate measures to ensure that agencies shall appoint no more than 1 employee for every 3 employees retiring or otherwise separating from Government service after the date of the enactment of this Act. This subsection shall cease to apply after September 30, 2016. (g) Counting rule For purposes of this section, any determination of the number of employees in an agency shall be expressed on a full-time equivalent basis. (h) Limitation on procurement of service contracts The President, through the Office of Management and Budget (in consultation with the Office of Personnel Management), shall take appropriate measures to ensure that there is no increase in the procurement of service contracts by reason of the enactment of this Act, except in cases in which a cost comparison demonstrates that such contracts would be to the financial advantage of the Government. 105. Reduction in Government travel costs (a) Definition In this section, the term agency section 105 (b) Reduction Notwithstanding any other provision of law, the total amount of funds appropriated to the appropriations account providing for travel expenses for each agency for each of fiscal years 2014, 2015, 2016, 2017, and 2018 may not exceed 80 percent of the total amount of funds appropriated to each of those appropriations accounts for fiscal year 2013. 106. Limitation on Government printing costs Not later than 180 days after the date of enactment of this Act, the Director of the Office of Management and Budget shall coordinate with the heads of Federal departments and independent agencies to— (1) determine which Government publications could be available on Government websites and no longer printed and to devise a strategy to reduce overall Government printing costs over the 10-year period beginning with fiscal year 2014, except that the Director shall ensure that essential printed documents prepared for social security recipients, medicare beneficiaries, and other populations in areas with limited internet access or use continue to remain available; (2) establish government-wide Federal guidelines on employee printing; (3) issue on the Office of Management and Budget's public website the results of a cost-benefit analysis on implementing a digital signature system and on establishing employee printing identification systems, such as the use of individual employee cards or codes, to monitor the amount of printing done by Federal employees; except that the Director of the Office of Management and Budget shall ensure that Federal employee printing costs unrelated to national defense, homeland security, border security, national disasters, and other emergencies do not exceed $860,000,000 annually; and (4) issue guidelines requiring every department, agency, commission or office to list at a prominent place near the beginning of each publication distributed to the public and issued or paid for by the Federal Government— (A) the name of the issuing agency, department, commission or office; (B) the total number of copies of the document printed; (C) the collective cost of producing and printing all of the copies of the document; and (D) the name of the firm publishing the document. 107. Reduction in Federal vehicle costs Notwithstanding any other provision of law, for fiscal year 2014 and each fiscal year thereafter, the amount made available to the General Services Administration for the acquisition of new vehicles for the Federal fleet shall not exceed an amount equal to 80 percent of the amount made available for the acquisition of those vehicles for fiscal year 2012. 108. Sale of excess Federal property (a) In general Chapter 5 of subtitle I of title 40, United States Code, is amended by adding at the end the following: VII Expedited disposal of real property 621. Definitions In this subchapter: (1) Director The term Director (2) Landholding agency The term landholding agency 42 U.S.C. 11411(i) (3) Real property (A) In general The term real property (i) a parcel of real property under the administrative jurisdiction of the Federal Government that is— (I) excess; (II) surplus; (III) underperforming; or (IV) otherwise not meeting the needs of the Federal Government, as determined by the Director; and (ii) a building or other structure located on real property described in clause (i). (B) Exclusion The term real property 10 U.S.C. 2687 Public Law 100–526 622. Disposal program (a) In general Except as provided in subsection (e), the Director shall, by sale or auction, dispose of a quantity of real property with an aggregate value of not less than $100,000,000 that, as determined by the Director, is not being used, and will not be used, to meet the needs of the Federal Government for the period of fiscal years 2014 through 2019. (b) Recommendations The head of each landholding agency shall recommend to the Director real property for disposal under subsection (a). (c) Selection of properties After receiving recommendations of candidate real property under subsection (b), the Director— (1) with the concurrence of the head of each landholding agency, may select the real property for disposal under subsection (a); and (2) shall notify the recommending landholding agency head of the selection of the real property. (d) Website The Director shall ensure that all real properties selected for disposal under this section are listed on a website that shall— (1) be updated routinely; and (2) include the functionality to allow any member of the public, at the option of the member, to receive updates of the list through electronic mail. (e) Transfer of property The Director may transfer real property selected for disposal under this section to the Department of Housing and Urban Development if the Secretary of Housing and Urban Development determines that the real property is suitable for use in assisting the homeless. . (b) Technical and Conforming Amendment The table of sections for chapter 5 of subtitle I of title 40, United States Code, is amended by inserting after the item relating to section 611 the following: SUBCHAPTER VII—Expedited disposal of real property Sec. 621. Definitions. Sec. 622. Disposal program. . 109. Prohibition on earmarks Section 312 of the Congressional Budget Act of 1974 is amended by inserting at the end the following: (g) Prohibition on earmarks (1) Bills and joint resolutions (A) In general It shall not be in order in the Senate or the House of Representatives to consider a bill, resolution, or amendment that includes an earmark, limited tax benefit, or limited tariff benefit. (B) Procedure In the Senate, a point of order under this paragraph may be raised by a Senator as provided in section 313(e) of the Congressional Budget Act of 1974. (2) Conference report (A) In general It shall not be in order in the Senate or the House of Representatives to vote on the adoption of a report of a committee of conference if the report includes an earmark, limited tax benefit, or limited tariff benefit. (B) Procedure When the Senate is considering a conference report on, or an amendment between the Houses in relation to, an appropriation Act, upon a point of order being made by any Senator pursuant to this paragraph, and such point of order being sustained, such material contained in such conference report shall be deemed stricken, and the Senate shall proceed to consider the question of whether the Senate shall recede from its amendment and concur with a further amendment, or concur in the House amendment with a further amendment, as the case may be, which further amendment shall consist of only that portion of the conference report or House amendment, as the case may be, not so stricken. Any such motion in the Senate shall be debatable under the same conditions as was the conference report. In any case in which such point of order is sustained against a conference report (or Senate amendment derived from such conference report by operation of this subsection), no further amendment shall be in order. (3) Waiver Any Senator may move to waive any or all points of order under this subsection by an affirmative vote of two-thirds of the Members, duly chosen and sworn. (4) Definitions For the purpose of this subsection— (A) the term earmark (B) the term limited tax benefit (i) provides a Federal tax deduction, credit, exclusion, or preference to a particular beneficiary or limited group of beneficiaries under the Internal Revenue Code of 1986; and (ii) contains eligibility criteria that are not uniform in application with respect to potential beneficiaries of such provision; and (C) the term limited tariff benefit (5) Application This subsection shall not apply to any authorization of appropriations to a Federal entity if such authorization is not specifically targeted to a State, locality or congressional district. . II Tax Reform 200. Amendment of 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. A Tax rates 201. Individual rates (a) In general Section 1(i) is amended to read as follows: (i) Post-2012 rate table (1) In general In the case of taxable years beginning after December 31, 2012, the following table shall apply in lieu of the tables under subsections (a), (b), (c), (d), and (e): If taxable income is: The tax is: Not over $100,000 10% of taxable income Over $100,000 $10,000, plus 20% of the excess over $100,000. (2) Inflation adjustment (A) In general In the case of any taxable year beginning after 2013, the Secretary shall prescribe, in the same manner as under subsection (f), a table which shall apply in lieu of the table under paragraph (1), except that subsection (f)(3)(B) shall be applied by substituting 2012 1992 . (b) Maximum capital gains rate Paragraph (1) of section 1(h) is amended to read as follows: (1) In general If a taxpayer has a net capital gain for any taxable year, the tax imposed by this section for such taxable year shall not exceed the sum of— (A) a tax computed at the rates and in the same manner as if this subsection had not been enacted on taxable income reduced by the net capital gain; (B) 0 percent of so much of the net capital gain as does not exceed $1,000,000; and (C) 20 percent of so much of net capital gain as exceeds $1,000,000. . (c) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2012. 202. Repeal of alternative minimum tax on individuals (a) In general Section 55(a) is amended by adding at the end the following new flush sentence: For purposes of this title, the tentative minimum tax on any taxpayer other than a corporation for any taxable year beginning after December 31, 2012, shall be zero. . (b) Effective date The amendment made by this section shall apply to taxable years beginning after December 31, 2012. 203. Permanent repeal of personal exemption phaseout (a) In general Section 151(d) is amended by striking paragraph (3). (b) Effective date The amendment made by this section shall apply to taxable years beginning after December 31, 2012. 204. Permanent repeal of phaseout of overall limitation on itemized deductions (a) In general Part I of subchapter B of chapter 1 is amended by striking section 68 (and the item relating to such section in the table of sections for such part). (b) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2012. 205. Corporate income tax rate reduced to flat rate of 20 percent (a) In general Paragraph (1) of section 11(b) is amended by striking shall be the sum of— shall be 20 percent of taxable income. (b) Personal Service Corporations Paragraph (2) of section 11(b) is amended by striking 35 percent 20 percent (c) Conforming Amendments (1) Subsection (a) of section 1201 is amended— (A) by striking 35 percent (determined without regard to the last 2 sentences of section 11(b)) 20 percent (B) by striking 35 percent 20 percent (2) Paragraphs (1), (2), and (6) of section 1445(e) are each amended by striking 35 percent 20 percent (d) Effective date The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act. 206. Renewed temporary dividends received deduction (a) Election Subsection (f) of section 965 is amended to read as follows: (f) Election The taxpayer may elect to apply this section to— (1) the taxpayer’s last taxable year which begins before the date of the enactment of this subsection, or (2) the taxpayer’s first taxable year which begins during the 1-year period beginning on such date. Such election may be made for a taxable year only if made on or before the due date (including extensions) for filing the return of tax for such taxable year. . (b) Limitation Paragraph (1) of section 965(b) is amended to read as follows: (1) In general The amount of dividends taken into account under subsection (a) shall not exceed the sum of the current and accumulated earnings and profits described in section 959(c)(3) for the year a deduction is claimed under subsection (a), without diminution by reason of any distributions made during the election year, for all controlled foreign corporations of the United States shareholder. . (c) Failure To maintain employment levels Paragraph (4) of section 965(b) is amended to read as follows: (4) Reduction in benefits for failure to maintain employment levels (A) In general If, during the period consisting of the calendar month in which the taxpayer first receives a distribution described in subsection (a)(1) and the succeeding 23 calendar months, the taxpayer does not maintain an average employment level at least equal to the taxpayer’s prior average employment, an additional amount equal to $25,000 multiplied by the number of employees by which the taxpayer’s average employment level during such period falls below the prior average employment (but not exceeding the aggregate amount allowed as a deduction pursuant to subsection (a)(1)) shall be taken into income by the taxpayer during the taxable year that includes the final day of such period. (B) Average employment level For purposes of this paragraph, the taxpayer’s average employment level for a period shall be the average number of full-time United States employees of the taxpayer, measured at the end of each month during the period. (C) Prior average employment For purposes of this paragraph, the taxpayer’s prior average employment (D) Full-time united states employee For purposes of this paragraph— (i) In general The term full-time United States employee (ii) Exception for changes in ownership of trades or businesses Such term does not include— (I) any individual who was an employee, on the date of acquisition, of any trade or business acquired by the taxpayer during the 24-month period referred to in subparagraph (A); and (II) any individual who was an employee of any trade or business disposed of by the taxpayer during the 24-month period referred to in subparagraph (A) or the 24-month period referred to in subparagraph (C). (E) Aggregation rules In determining the taxpayer’s average employment level and prior average employment, all domestic members of a controlled group shall be treated as a single taxpayer. . (d) Threshold period Section 965 is amended by striking June 30, 2003 June 30, 2011 (e) Base period Paragraph (2) of subsection 965(c) is amended by inserting at the end of subparagraph (A) the following flush sentence: For purposes of this paragraph, taxable years shall not include any year for which an election under section 965 was in effect. . (f) Indebtedness determination date Subparagraph (B) of section 965(b)(3) is amended by striking October 3, 2004 January 19, 2012 (g) Conforming amendments (1) Subsection 965(c), as amended by subsection (e), is amended by striking paragraph (1) and redesignating paragraphs (2), (3), (4), and (5) as paragraphs (1), (2), (3), and (4), respectively. (2) Paragraph 965(c)(4), as redesignated by paragraph (1), is amended to read as follows: (4) Controlled groups All United States shareholders which are members of an affiliated group filing a consolidated return under section 1501 shall be treated as one United States shareholder. . (h) Effective date The amendments made by this section shall apply to taxable years ending on or after the date of the enactment of this Act. B Elimination of tax expenditures 211. Termination of credit for increasing research activities Effective for taxable years beginning after the date of the enactment of this Act, section 41 is hereby repealed. 212. Termination of deduction for intangible drilling and development costs (a) In general Section 263(c) is amended by adding at the end the following new sentence: This subsection shall not apply to any taxable year beginning after the date of the enactment of this sentence. (b) Conforming amendments Paragraphs (2) and (3) of section 291(b) are each amended by striking section 263(c), 616(a), section 616(a) (c) Effective date The amendments made by this section shall apply to costs paid or incurred in taxable years beginning after the date of the enactment of this Act. 213. Repeal of domestic production activities deduction with respect to production of coal, lignite, or oil shale (a) In general Subparagraph (B) of section 199(c)(4), as amended by this Act, is amended by striking or , or (v) the lease, rental, license, sale, exchange, or other disposition of coal, lignite, or oil shale. . (b) Effective date The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act. 214. Repeal percentage depletion for oil and natural gas wells (a) In general Section 613A is amended by adding at the end the following new subsection: (f) Termination After the date of the enactment of the Bowles-Simpson Plan of Lowering America’s Debt Act . (b) Conforming amendment Section 613A(c)(1) is amended by striking subsection (d) subsections (d) and (f) (c) Effective date The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act. 215. Termination of credit for electricity produced from certain renewable resources Effective for property placed in service after the date of the enactment of this Act, section 45 is repealed. 216. Termination of energy credit Effective for property placed in service after the date of the enactment of this Act, section 48 is repealed. 217. Repeal of credit for alcohol used as fuel Effective for fuel sold or used after the date of the enactment of this Act, section 40 is repealed. 218. Repeal of credit for alcohol fuel, biodiesel, and alternative fuel mixtures Effective for fuel sold and used after the date of the enactment of this Act, section 6426 is repealed. 219. Repeal of credit for biodiesel and renewable diesel used as fuel Effective for fuel produced, and sold or used, after the date of the enactment of this Act, section 40A is repealed. 220. Repeal of credit for certain plug-in electric vehicles Effective for property placed in service after the date of the enactment of this Act, section 30 is repealed. 221. Early termination of credit for qualified fuel cell motor vehicles Effective for property placed in service after the date of the enactment of this Act, section 30B is repealed. 222. Repeal of deduction for energy conservation subsidies provided by public utilities Effective for amounts received after the date of the enactment of this Act, section 136 is repealed. 223. Repeal of qualifying advanced coal project credit Effective for taxable years beginning after the date of the enactment of this Act, section 48A is repealed. 224. Repeal of qualifying gasification project credit Effective for taxable years beginning after the date of the enactment of this Act, section 48B is repealed. 225. Repeal of special allowance for cellulosic biofuel plant property (a) In general Section 168 is amended by striking subsection (l). (b) Effective date The amendment made by this section shall apply to property placed in service after the date of the enactment of this Act. 226. Repeal of election to expense certain refineries Effective for property placed in service after the date of the enactment of this Act, section 179C is repealed. 227. Repeal of 2-year amortization of geological and geophysical expenditures (a) In general Paragraphs (1) and (4) of section 167(h) are each amended by striking 24-month 7-year (b) Conforming amendment Subsection (h) of section 167 is amended by striking paragraph (5). (c) Effective date The amendments made by this section shall apply to property placed in service after the date of the enactment of this Act. 228. Repeal of deduction for energy efficient commercial building property Effective for property placed in service after the date of the enactment of this Act, section 179D is repealed. 229. Repeal of credit for construction of new energy efficient homes Effective for homes acquired after the date of the enactment of this Act, section 45L is repealed. 230. Repeal of credit for energy efficient appliances Effective for property placed in service after the date of the enactment of this Act, section 25C is repealed. 231. Repeal of credit for residential energy efficient property Effective for property placed in service after the date of the enactment of this Act, section 25D is repealed. 232. Repeal of advanced energy project credit Effective for property placed in service after the date of the enactment of this Act, section 48C is repealed. 233. Repeal of credit for carbon dioxide sequestration Effective for carbon dioxide captured after the date of the enactment of this Act, section 45Q is repealed. 234. Repeal of low-income housing credit Effective for property placed in service after the date of the enactment of this Act, section 42 is repealed. 235. Repeal of Hope and Lifetime Learning Credits Effective for amounts paid or incurred after the date of the enactment of this Act, section 25A is repealed. 236. Repeal of work opportunity tax credit Effective for wages paid after the date of the enactment of this Act, section 51 is repealed. 237. Repeal of credit for expenses for household and dependent care services necessary for gainful employment Effective for expenses paid after the date of the enactment of this Act, section 21 is repealed. 238. Repeal of credit for adoption expenses Effective for expenses paid or incurred after the date of the enactment of this Act, section 23 is repealed. 239. Repeal of credit for expenditures to provide access to disabled individuals Effective for expenditures paid or incurred after the date of the enactment of this Act, section 44 is repealed. 240. Repeal of earned income tax credit Effective for taxable years beginning after the date of the enactment of this Act, section 32 is repealed. 241. Repeal of energy conservation subsidies provided by public utilities Effective for amounts received after the date of the enactment of this Act, section 136 is repealed. 242. Repeal of election to expense certain refinery property Effective for property placed in service after the date of the enactment of this Act, sections 168(l) and 179C are repealed. 243. Repeal of deduction for endangered species recovery expenditures (a) In general Subsections (a) and (c)(1) of section 175 are each amended by striking , or for endangered species recovery (b) Conforming amendments (1) The heading for section 175 is amended by striking ; endangered species recovery expenditures (2) Paragraph (1) of section 175(c) is amended by striking the second sentence. (3) Subparagraph (A) of section 175(c)(3) is amended— (A) by striking or the recovery plan pursuant to the Endangered Species Act of 1973 (B) by striking , or endangered species recovery plan (c) Effective date The amendments made by this section shall apply to expenditures paid or incurred after the date of the enactment of this Act. 244. Repeal of exclusion of cancellation of indebtedness income of solvent farmers (a) In general Paragraph (1) of section 108(a) is amended by striking subparagraph (C) and by redesignating subparagraphs (D) and (E) as subparagraphs (C) and (D) respectively. (b) Conforming amendments (1) Subparagraph (A) of section 108(a)(2) is amended by striking (D), and (E) and (D) (2) Subparagraph (B) of section 108(a)(2) is amended— (A) by striking Subparagraphs (C) and (D) Subparagraph (C) (B) by striking qualified farm exclusion and (3) Paragraph (1) of section 108(b) is amended by striking (B), or (C) or (B) (4) Subsection (c) of section 108 is amended by striking under subparagraph (D) under subparagraph (C) (5) Section 108 is amended by striking subsection (g) and by redesignating subsections (h) and (i) as subsections (g) and (h), respectively. (c) Effective date The amendments made by this section shall apply to discharges of indebtedness after the date of the enactment of this Act. 245. Repeal of alternative minimum tax treatment of certain property and casualty insurance companies (a) In general Clause (i) of section 56(g)(4)(B) is amended by striking the last sentence. (b) Effective date The amendment made by this section shall apply to taxable years beginning after the date of the enactment of this Act. 246. Repeal of small life insurance company deduction (a) In general Section 806 is repealed. (b) Conforming amendments (1) Section 804 is amended by striking means— means the general deductions provided in section 805. (2) Subparagraph (B) of section 453B(e)(2) is amended by inserting , as in effect on the day before the date of the enactment of the Bowles-Simpson Plan of Lowering America’s Debt Act section 806(b)(3) (3) Subclause (II) of section 465(c)(7)(D)(v) is amended by inserting , as in effect on the day before the date of the enactment of the Bowles-Simpson Plan of Lowering America’s Debt Act section 806(b)(3) (4) Subparagraph (A) of section 815(c)(2) is amended by striking clause (ii), by inserting and (c) Effective date The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act. 247. Termination of $25,000 exemption from passive loss rules for rental real estate activities (a) In general Section 469 is amended by striking subsection (i). (b) Effective date The amendment made by this section shall apply to taxable years beginning after the date of the enactment of this Act. 248. Repeal of discharge of indebtedness exclusion Effective for discharges of indebtedness occurring on or after the date of the enactment of this Act, section 108 is repealed. 249. Repeal of certain exceptions for imputed interest rules (a) Determination of issue price in the case of certain debt instruments issued for property Paragraph (3) of section 1274(c)(3) is amended by striking subparagraphs (A), (B), and (C). (b) Special rule for certain transactions where stated principal amount does not exceed certain amount Section 1274A is amended by adding at the end the following new subsection: (f) Termination This section shall not apply to any sales or exchanges after the date of the enactment of this Act. . (c) Effective date The amendment made by subsection (a) shall apply to sales or exchanges after the date of the enactment of this Act. 250. Termination of partial exclusion for gain from certain small business stock Section 1202 is amended by adding at the end the following new subsection: (l) Termination This section shall not apply to any sale or exchange of stock after the date of the enactment of the Bowles-Simpson Plan of Lowering America’s Debt Act . 251. Termination of treatment of losses on small business stock as ordinary Section 1244 is amended by adding at the end the following new subsection: (f) Termination This section shall not apply to any sale or exchange of stock after the date of the enactment of the Bowles-Simpson Plan of Lowering America’s Debt Act . 252. Repeal of student loan interest deduction Effective for any loan interest paid after the date of the enactment of this Act, section 221 is repealed. 253. Repeal of deduction of tuition and related expenses Effective for amounts paid after the date of the enactment of this Act, section 222 is repealed. 254. Repeal of gross income exclusion for United States savings bonds used to pay higher education expenses Effective for taxable years beginning after the date of the enactment of this Act, section 135 is repealed. 255. Elimination of personal exemption for students age 19 and older (a) In general Subparagraph (A) of section 152(c)(3) is amended— (1) by striking clause (ii), (2) by striking , or (3) by striking child and (i) has not attained child and has not attained (b) Effective date The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act. 256. Elimination of above the line deduction for certain expenses of elementary and secondary school teachers (a) In general Paragraph (2) of section 62(a) is amended by striking subparagraph (D) and by redesignating subparagraph (E) as subparagraph (D). (b) Conforming amendments (1) Section 62 is amended by striking subsection (d) and redesignating subsection (e) as subsection (d). (2) Paragraph (20) of section 62(a) is amended by striking subsection (e) subsection (d) (c) Effective date The amendments made by this section shall apply to amounts paid or incurred after the date of the enactment of this Act. 257. Elimination of gross income exclusion for discharge of certain student loan debt Section 108 is amended by adding at the end the following new paragraph: (5) Termination This subsection shall not apply to discharges of indebtedness after the date of the enactment of the Bowles-Simpson Plan of Lowering America’s Debt Act . 258. Repeal of exclusion from gross income for rental value of parsonages Effective for taxable years beginning after the date of the enactment of this Act, section 107 is repealed. 259. Repeal of exclusion from gross income for benefits provided to volunteer firefighters and emergency medical responders Effective for taxable years beginning after the date of the enactment of this Act, section 139B is repealed. 260. Repeal of special treatment of Blue Cross and Blue Shield organizations, etc Effective for taxable years beginning after the date of the enactment of this Act, section 833 is repealed. 261. Sense of the House regarding a territorial tax system It is the sense of the House that the Committee on Ways and Means of the House of Representatives should report legislation that will transition the United States to a territorial tax system. C Phaseout of Tax Expenditures 271. Five-year phaseout of certain tax expenditures (a) In general Effective for taxable years beginning after December 31, 2012, the amount allowable as a credit, exclusion from gross income, exemption from taxation, or deduction for the taxable year under the tax provisions specified in subsection (c) (determined without regard to this section) shall be reduced by the applicable percentage of the amount so allowable. (b) Applicable percentage For purposes if this section, the applicable percentage shall be determined in accordance with the following table: In the case of taxable years The applicable percentage shall be: 2013 20 2014 40 2015 60 2016 80 2017 and thereafter 100. (c) Specified provisions For purposes of this section, the tax provisions specified in this subsection are as follows: (1) Section 911 of the Internal Revenue Code of 1986 (relating to citizens or residents of the United States living abroad). (2) Section 912 of such Code (relating to exemption for certain allowances). (3) Section 41 of such Code (relating to credit for increasing research activities). (4) Section 631(c) of such Code (relating to disposal of coal or domestic iron ore with a retained economic interest). (5) Section 451(i) of such Code (relating to special rule for sales or dispositions to implement Federal Energy Regulatory Commission or State Electric Restructuring Policy). (6) Section 613 of such Code (relating to percentage depletion) in the case of nonfuel minerals. (7) Section 631(a) of such Code (relating to election to consider cutting as sale or exchange). (8) Section 512(b)(19) of such Code (relating to treatment of gain or loss on sale or exchange of certain brownfield sites). (9) The exclusion from gross income of income on life insurance contracts (as determined under section 7702(g) of the Internal Revenue Code of 1986). (10) Section 103(a) of such Code, to the extent the interest is attributable to a qualified mortgage bond (as defined in section 143(a) of such Code), a qualified veterans’ mortgage bond (as defined is section 143(b) of such Code), or an issue described in section 142(a)(7) of such Code. (11) Section 199 of such Code (relating to include attributable to domestic production activities). (12) Section 181 of such Code (relating to treatment of certain qualified film and television productions). (13) Section 7518 of such Code (relating to tax incentives relating to merchant marine capital construction funds) and chapter 535 (14) Section 132(a)(5) of such Code (relating to qualified transportation fringe) to the extent attributable to a transit pass (as defined in section 132(f)(5) of such Code) or qualified parking (as so defined). (15) Section 45G(a) of such Code (relating to railroad track maintenance credit). (16) Section 46(a) of such Code (relating to rehabilitation credit). (17) Section 45D of such Code (relating to new markets tax credit). (18) Section 131 of such Code (relating to certain foster care payments). (19) Section 213 of such Code (relating to medical, dental, etc., payments). (20) Section 36B of such Code (relating to refundable credit for coverage under a qualified health plan). (21) Section 45R of such Code (relating to employee health insurance expenses of small employers). (22) Section 45C of such Code (relating to clinical testing expenses for certain drugs for rare diseases or conditions). (23) Section 35 of such Code (relating to health insurance costs of eligible individuals). (24) Means-tested payments otherwise excludable under the general welfare doctrine. (25) Section 79 of such Code (relating to group-term life insurance purchased for employees). (26) Section 106 of such Code (relating to contributions by employer to accident and health plans) to the extent attributable to employer provided coverage under an accident or disability insurance plan. (27) Section 165 of such Code (relating to losses) to the extent the loss is described in section 165(c)(3) of such Code. (28) Section 164(a)(1) of such Code (relating to real property taxes) to the extent not attributable to real property used in a trade or business or the principal residence of the taxpayer (within the meaning of section 121 of such Code). D Special Status 381. Termination of qualified energy conservation bonds Subsection (a) of section 54D is amended by striking and , and (4) the bond is issued before the date of the enactment of the Implementation of Simpson-Bowles Spending Reductions Act of 2012. . 382. Termination of new clean renewable energy bonds Subsection (a) of section 54C is amended by striking and , and (4) the bond is issued before the date of the enactment of the Implementation of Simpson-Bowles Spending Reductions Act of 2012. . 383. Termination of exempt facility bond treatment for water, sewage, and solid waste facilities (a) In general Subsection (a) of section 142 is amended by striking paragraphs (4), (5), and (6). (b) Effective date The amendments made by this section shall apply to bonds issued after the date of the enactment of this Act. 384. Termination of expensing and amortization of reforestation expenditures and expensing of timber-growing costs (a) Reforestation expenditures Section 194 is amended by adding at the end the following new subsection: (e) Termination This section shall not apply to amount paid or incurred after the date of the enactment of the Implementation of Simpson-Bowles Spending Reductions Act of 2012. . (b) Expensing of timber growing costs Subsection (c) of section 263A is amended by striking paragraph (5). (c) Effective date The amendment made by this section shall apply to expenses paid or incurred after the date of the enactment of this Act. 385. Termination of deferral of gain on sales of stock in agricultural refiners and processors to eligible farm cooperatives Subsection (g) of section 1042 is amended by adding at the end the following new paragraph: (5) Termination This subsection shall not apply to any sales after the date of the enactment of the Implementation of Simpson-Bowles Spending Reductions Act of 2012. . 386. Termination of election to expense certain depreciable business assets (a) In general Subparagraph (D) of section 179(b)(1) is amended by striking $25,000 $0 (b) Effective date The amendment made by this section shall apply to property placed in service after December 31, 2012. 387. Termination of qualified small issue bonds Paragraph (1) of section 144(a) is amended by inserting before the date of the enactment of the Implementation of Simpson-Bowles Spending Reductions Act of 2012 any bond issued 388. Termination of exempt facility bond treatment for qualified highway or surface freight transfer facilities (a) In general Subsection (a) of section 142 is amended by striking paragraph (15). (b) Effective date The amendment made by this section shall apply to bonds issued after the date of the enactment of this Act. 389. Termination of exempt facility bond treatment for airports, docks, and wharves (a) In general Subsection (a) of section 142 is amended by striking paragraphs (1) and (2). (b) Effective date The amendments made by this section shall apply to bonds issued after the date of the enactment of this Act. 390. Termination of tribal economic development bonds Subparagraph (A) of section 7871(f)(3) is amended by inserting before the date of the enactment of the Implementation of Simpson-Bowles Spending Reductions Act of 2012 any bond issued 391. Termination of exclusion from gross income of United States savings bonds interest used to pay higher education expenses Subparagraph (A) of section 135(c)(1) is amended by inserting and before the date of the enactment of the Implementation of Simpson-Bowles Spending Reductions Act of 2012 December 31, 1989, 392. Termination of qualified zone academy bonds Subsection (a) of section 54E is amended by striking and , and (4) the bond is issued before the date of the enactment of the Implementation of Simpson-Bowles Spending Reductions Act of 2012. . 393. Termination of exempt facility bond treatment for qualified public educational facilities (a) In general Subsection (a) of section 142 is amended by striking paragraph (13). (b) Effective date The amendments made by this section shall apply to bonds issued after the date of the enactment of this Act. 394. Termination of hospital bonds (a) In general Paragraph (1) of section 145(a) is amended by striking or a governmental unit , or a governmental unit, other than a hospital (b) Conforming amendments (1) Section 145 is amended by striking subsection (c) and by redesignating subsections (d) and (e) as subsections (c) and (d), respectively. (2) Subsection (b) of section 145 is amended by striking nonhospital (3) Paragraph (1) of section 145(b) is amended by striking (other than a qualified hospital bond) (4) Paragraph (2) of section 145(b) is amended— (A) by striking other than a qualified hospital bond (B) by striking subparagraph (C). (5) The heading for subsection (b) of section 145 is amended by striking on bonds other than hospital bonds (6) The heading for paragraph (2) of section 145(b) is amended by striking nonhospital (c) Effective date The amendments made by this section shall apply to bonds issued after the date of the enactment of this Act.

Summary: Bowles-Simpson Plan of Lowering America's Debt Act - Prohibits the total amount of appropriations to the White House for the Executive Office of the President, to the President, and to Congress for FY2014-FY2018 from exceeding 85% of the total amount of such appropriations for FY2013. Eliminates cost-of-living adjustments (COLA) for Members of Congress during FY2014-FY2016. Amends the Continuing Appropriations Act, 2011 to extend through December 31, 2015, the freeze on any COLA to the pay of certain federal civilian employees (thus extending such freeze from two to five calendar years). Requires the Office of Management and Budget (OMB) to: (1) take appropriate measures to ensure that the total number of federal employees, beginning in FY2017, does not exceed 90% of the total number of federal employees on September 30, 2013; (2) continuously monitor all agencies, make a determination, as of September 30, 2013, on whether the total number of federal employees in any quarter of a&nbsp;fiscal year&nbsp;exceeds the maximum number allowed by this Act, and notify the President and Congress if the number exceeds the maximum; and (3) ensure that there is no increase in the procurement of service contracts due to this Act unless a cost comparison demonstrates that such contracts would be financially advantageous to the federal government. Allows the President to waive the workforce limitations imposed by this Act in specified circumstances. Requires OMB to: (1) take appropriate measures through FY2016 to ensure that agencies shall appoint no more than one employee for every three employees retiring or otherwise separating from government service; (2) coordinate with federal departments and independent agencies to take certain steps to limit government printing costs; and (3) dispose of a quantity of real property worth at least $100 million altogether (with specified exceptions) that is not being used, and that will not be used, to meet the needs of the federal government for FY2014-FY2019. Prohibits the total amount of funds appropriated for travel expenses for each agency for each of FY2014-FY2018 from exceeding 80% of the total amount of funds appropriated for FY2013. Reduces the amount available to the General Services Administration (GSA) for FY2014 and succeeding fiscal years for acquiring new vehicles for the federal fleet to 80% of the amount available for FY2012 for such purpose. Amends the Congressional Budget Act of 1974 to prohibit consideration in Congress of legislation that includes an earmark, limited tax benefit, or limited tariff benefit. Amends the Internal Revenue Code to: (1) impose after 2012, a 10% income tax rate on taxable income of $100,000 or less and a 20% rate on taxable income over $100,000, and a 20% rate for net capital gain exceeding $1 million; (2) reduce the income tax rate on corporations to a flat rate of 20%; (3) repeal various tax credits, deductions, and exclusions, including the alternative minimum tax (AMT) on individuals; (4) provide for 5-year phaseout of specified tax expenditures, and (5) terminate the authority for issuing certain tax-exempt bonds for financing projects relating to energy conservation, infrastructure, education, and hospital construction.