I 
113TH CONGRESS 
2D SESSION 
H. R. 1 
To amend the Internal Revenue Code of 1986 to provide for comprehensive 
tax reform. 
IN THE HOUSE OF REPRESENTATIVES 
DECEMBER 10, 2014 
Mr. CAMP introduced the following bill; which was referred to the Committee 
on Ways and Means 
A BILL 
To amend the Internal Revenue Code of 1986 to provide 
for comprehensive tax reform. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE; ETC. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Tax Reform Act of 2014’’. 
(b) AMENDMENT OF 1986 CODE.—Except as other-
wise expressly provided, whenever in this Act an amend-
ment or repeal is expressed in terms of an amendment 
to, or repeal of, a section or other provision, the reference 
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shall be considered to be made to a section or other provi-
sion of the Internal Revenue Code of 1986. 
(c) TABLE OF CONTENTS.—The table of contents of 
this Act is as follows: 
Sec. 1. Short title; etc. 
TITLE I—TAX REFORM FOR INDIVIDUALS 
Subtitle A—Individual Income Tax Rate Reform 
Sec. 1001. Simplification of individual income tax rates. 
Sec. 1002. Deduction for adjusted net capital gain. 
Sec. 1003. Conforming amendments related to simplification of individual in-
come tax rates. 
Subtitle B—Simplification of Tax Benefits for Families 
Sec. 1101. Standard deduction. 
Sec. 1102. Increase and expansion of child tax credit. 
Sec. 1103. Modification of earned income tax credit. 
Sec. 1104. Repeal of deduction for personal exemptions. 
Subtitle C—Simplification of Education Incentives 
Sec. 1201. American opportunity tax credit. 
Sec. 1202. Expansion of Pell Grant exclusion from gross income. 
Sec. 1203. Repeal of exclusion of income from United States savings bonds 
used to pay higher education tuition and fees. 
Sec. 1204. Repeal of deduction for interest on education loans. 
Sec. 1205. Repeal of deduction for qualified tuition and related expenses. 
Sec. 1206. No new contributions to Coverdell education savings accounts. 
Sec. 1207. Repeal of exclusion for discharge of student loan indebtedness. 
Sec. 1208. Repeal of exclusion for qualified tuition reductions. 
Sec. 1209. Repeal of exclusion for education assistance programs. 
Sec. 1210. Repeal of exception to 10-percent penalty for higher education ex-
penses. 
Subtitle D—Repeal of Certain Credits for Individuals 
Sec. 1301. Repeal of dependent care credit. 
Sec. 1302. Repeal of credit for adoption expenses. 
Sec. 1303. Repeal of credit for nonbusiness energy property. 
Sec. 1304. Repeal of credit for residential energy efficient property. 
Sec. 1305. Repeal of credit for qualified electric vehicles. 
Sec. 1306. Repeal of alternative motor vehicle credit. 
Sec. 1307. Repeal of alternative fuel vehicle refueling property credit. 
Sec. 1308. Repeal of credit for new qualified plug-in electric drive motor vehi-
cles. 
Sec. 1309. Repeal of credit for health insurance costs of eligible individuals. 
Sec. 1310. Repeal of first-time homebuyer credit. 
Subtitle E—Deductions, Exclusions, and Certain Other Provisions 
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Sec. 1401. Exclusion of gain from sale of a principal residence. 
Sec. 1402. Mortgage interest. 
Sec. 1403. Charitable contributions. 
Sec. 1404. Denial of deduction for expenses attributable to the trade or busi-
ness of being an employee. 
Sec. 1405. Repeal of deduction for taxes not paid or accrued in a trade or busi-
ness. 
Sec. 1406. Repeal of deduction for personal casualty losses. 
Sec. 1407. Limitation on wagering losses. 
Sec. 1408. Repeal of deduction for tax preparation expenses. 
Sec. 1409. Repeal of deduction for medical expenses. 
Sec. 1410. Repeal of disqualification of expenses for over-the-counter drugs 
under certain accounts and arrangements. 
Sec. 1411. Repeal of deduction for alimony payments and corresponding inclu-
sion in gross income. 
Sec. 1412. Repeal of deduction for moving expenses. 
Sec. 1413. Termination of deduction and exclusions for contributions to medical 
savings accounts. 
Sec. 1414. Repeal of 2-percent floor on miscellaneous itemized deductions. 
Sec. 1415. Repeal of overall limitation on itemized deductions. 
Sec. 1416. Deduction for amortizable bond premium allowed in determining ad-
justed gross income. 
Sec. 1417. Repeal of exclusion, etc., for employee achievement awards. 
Sec. 1418. Clarification of special rule for certain governmental plans. 
Sec. 1419. Limitation on exclusion for employer-provided housing. 
Sec. 1420. Fringe benefits. 
Sec. 1421. Repeal of exclusion of net unrealized appreciation in employer secu-
rities. 
Sec. 1422. Consistent basis reporting between estate and person acquiring 
property from decedent. 
Subtitle F—Employment Tax Modifications 
Sec. 1501. Modifications of deduction for Social Security taxes in computing 
net earnings from self-employment. 
Sec. 1502. Determination of net earnings from self-employment. 
Sec. 1503. Repeal of exemption from FICA taxes for certain foreign workers. 
Sec. 1504. Repeal of exemption from FICA taxes for certain students. 
Sec. 1505. Override of Treasury guidance providing that certain employer-pro-
vided supplemental unemployment benefits are not subject to 
employment taxes. 
Sec. 1506. Certified professional employer organizations. 
Subtitle G—Pensions and Retirement 
PART 1—INDIVIDUAL RETIREMENT PLANS 
Sec. 1601. Elimination of income limits on contributions to Roth IRAs. 
Sec. 1602. No new contributions to traditional IRAs. 
Sec. 1603. Inflation adjustment for Roth IRA contributions. 
Sec. 1604. Repeal of special rule permitting recharacterization of Roth IRA 
contributions as traditional IRA contributions. 
Sec. 1605. Repeal of exception to 10-percent penalty for first home purchases. 
PART 2—EMPLOYER-PROVIDED PLANS 
Sec. 1611. Termination for new SEPs. 
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Sec. 1612. Termination for new SIMPLE 401(k)s. 
Sec. 1613. Rules related to designated Roth contributions. 
Sec. 1614. Modifications of required distribution rules for pension plans. 
Sec. 1615. Reduction in minimum age for allowable in-service distributions. 
Sec. 1616. Modification of rules governing hardship distributions. 
Sec. 1617. Extended rollover period for the rollover of plan loan offset amounts 
in certain cases. 
Sec. 1618. Coordination of contribution limitations for 403(b) plans and gov-
ernmental 457(b) plans. 
Sec. 1619. Application of 10-percent early distribution tax to governmental 457 
plans. 
Sec. 1620. Inflation adjustments for qualified plan benefit and contribution lim-
itations. 
Sec. 1621. Inflation adjustments for qualified plan elective deferral limitations. 
Sec. 1622. Inflation adjustments for SIMPLE retirement accounts. 
Sec. 1623. Inflation adjustments for catch-up contributions for certain em-
ployer plans. 
Sec. 1624. Inflation adjustments for governmental and tax-exempt organization 
plans. 
Subtitle H—Certain Provisions Related to Members of Indian Tribes 
Sec. 1701. Indian general welfare benefits. 
Sec. 1702. Tribal Advisory Committee. 
Sec. 1703. Other relief for Indian tribes. 
TITLE II—ALTERNATIVE MINIMUM TAX REPEAL 
Sec. 2001. Repeal of alternative minimum tax. 
TITLE III—BUSINESS TAX REFORM 
Subtitle A—Tax Rates 
Sec. 3001. 25-percent corporate tax rate. 
Subtitle B—Reform of Business-Related Exclusions and Deductions 
Sec. 3101. Revision of treatment of contributions to capital. 
Sec. 3102. Repeal of deduction for local lobbying expenses. 
Sec. 3103. Expenditures for repairs in connection with casualty losses. 
Sec. 3104. Reform of accelerated cost recovery system. 
Sec. 3105. Repeal of amortization of pollution control facilities. 
Sec. 3106. Net operating loss deduction. 
Sec. 3107. Circulation expenditures. 
Sec. 3108. Amortization of research and experimental expenditures. 
Sec. 3109. Repeal of deductions for soil and water conservation expenditures 
and endangered species recovery expenditures. 
Sec. 3110. Amortization of certain advertising expenses. 
Sec. 3111. Expensing certain depreciable business assets for small business. 
Sec. 3112. Repeal of election to expense certain refineries. 
Sec. 3113. Repeal of deduction for energy efficient commercial buildings. 
Sec. 3114. Repeal of election to expense advanced mine safety equipment. 
Sec. 3115. Repeal of deduction for expenditures by farmers for fertilizer, etc. 
Sec. 3116. Repeal of special treatment of certain qualified film and television 
productions. 
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Sec. 3117. Repeal of special rules for recoveries of damages of antitrust viola-
tions, etc. 
Sec. 3118. Treatment of reforestation expenditures. 
Sec. 3119. 20-year amortization of goodwill and certain other intangibles. 
Sec. 3120. Treatment of environmental remediation costs. 
Sec. 3121. Repeal of expensing of qualified disaster expenses. 
Sec. 3122. Phaseout and repeal of deduction for income attributable to domes-
tic production activities. 
Sec. 3123. Unification of deduction for organizational expenditures. 
Sec. 3124. Prevention of arbitrage of deductible interest expense and tax-ex-
empt interest income. 
Sec. 3125. Prevention of transfer of certain losses from tax indifferent parties. 
Sec. 3126. Entertainment, etc. expenses. 
Sec. 3127. Repeal of limitation on corporate acquisition indebtedness. 
Sec. 3128. Denial of deductions and credits for expenditures in illegal busi-
nesses. 
Sec. 3129. Limitation on deduction for FDIC premiums. 
Sec. 3130. Repeal of percentage depletion. 
Sec. 3131. Repeal of passive activity exception for working interests in oil and 
gas property. 
Sec. 3132. Repeal of special rules for gain or loss on timber, coal, or domestic 
iron ore. 
Sec. 3133. Repeal of like-kind exchanges. 
Sec. 3134. Restriction on trade or business property treated as similar or re-
lated in service to involuntarily converted property in disaster 
areas. 
Sec. 3135. Repeal of rollover of publicly traded securities gain into specialized 
small business investment companies. 
Sec. 3136. Termination of special rules for gain from certain small business 
stock. 
Sec. 3137. Certain self-created property not treated as a capital asset. 
Sec. 3138. Repeal of special rule for sale or exchange of patents. 
Sec. 3139. Depreciation recapture on gain from disposition of certain depre-
ciable realty. 
Sec. 3140. Common deduction conforming amendments. 
Subtitle C—Reform of Business Credits 
Sec. 3201. Repeal of credit for alcohol, etc., used as fuel. 
Sec. 3202. Repeal of credit for biodiesel and renewable diesel used as fuel. 
Sec. 3203. Research credit modified and made permanent. 
Sec. 3204. Low-income housing tax credit. 
Sec. 3205. Repeal of enhanced oil recovery credit. 
Sec. 3206. Phaseout and repeal of credit for electricity produced from certain 
renewable resources. 
Sec. 3207. Repeal of Indian employment credit. 
Sec. 3208. Repeal of credit for portion of employer Social Security taxes paid 
with respect to employee cash tips. 
Sec. 3209. Repeal of credit for clinical testing expenses for certain drugs for 
rare diseases or conditions. 
Sec. 3210. Repeal of credit for small employer pension plan startup costs. 
Sec. 3211. Repeal of employer-provided child care credit. 
Sec. 3212. Repeal of railroad track maintenance credit. 
Sec. 3213. Repeal of credit for production of low sulfur diesel fuel. 
Sec. 3214. Repeal of credit for producing oil and gas from marginal wells. 
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Sec. 3215. Repeal of credit for production from advanced nuclear power facili-
ties. 
Sec. 3216. Repeal of credit for producing fuel from a nonconventional source. 
Sec. 3217. Repeal of new energy efficient home credit. 
Sec. 3218. Repeal of energy efficient appliance credit. 
Sec. 3219. Repeal of mine rescue team training credit. 
Sec. 3220. Repeal of agricultural chemicals security credit. 
Sec. 3221. Repeal of credit for carbon dioxide sequestration. 
Sec. 3222. Repeal of credit for employee health insurance expenses of small em-
ployers. 
Sec. 3223. Repeal of rehabilitation credit. 
Sec. 3224. Repeal of energy credit. 
Sec. 3225. Repeal of qualifying advanced coal project credit. 
Sec. 3226. Repeal of qualifying gasification project credit. 
Sec. 3227. Repeal of qualifying advanced energy project credit. 
Sec. 3228. Repeal of qualifying therapeutic discovery project credit. 
Sec. 3229. Repeal of work opportunity tax credit. 
Sec. 3230. Repeal of deduction for certain unused business credits. 
Subtitle D—Accounting Methods 
Sec. 3301. Limitation on use of cash method of accounting. 
Sec. 3302. Rules for determining whether taxpayer has adopted a method of ac-
counting. 
Sec. 3303. Certain special rules for taxable year of inclusion. 
Sec. 3304. Installment sales. 
Sec. 3305. Repeal of special rule for prepaid subscription income. 
Sec. 3306. Repeal of special rule for prepaid dues income of certain member-
ship organizations. 
Sec. 3307. Repeal of special rule for magazines, paperbacks, and records re-
turned after close of the taxable year. 
Sec. 3308. Modification of rules for long-term contracts. 
Sec. 3309. Nuclear decommissioning reserve funds. 
Sec. 3310. Repeal of last-in, first-out method of inventory. 
Sec. 3311. Repeal of lower of cost or market method of inventory. 
Sec. 3312. Modification of rules for capitalization and inclusion in inventory 
costs of certain expenses. 
Sec. 3313. Modification of income forecast method. 
Sec. 3314. Repeal of averaging of farm income. 
Sec. 3315. Treatment of patent or trademark infringement awards. 
Sec. 3316. Repeal of redundant rules with respect to carrying charges. 
Sec. 3317. Repeal of recurring item exception for spudding of oil or gas wells. 
Subtitle E—Financial Instruments 
PART 1—DERIVATIVES AND HEDGES 
Sec. 3401. Treatment of certain derivatives. 
Sec. 3402. Modification of certain rules related to hedges. 
PART 2—TREATMENT OF DEBT INSTRUMENTS 
Sec. 3411. Current inclusion in income of market discount. 
Sec. 3412. Treatment of certain exchanges of debt instruments. 
Sec. 3413. Coordination with rules for inclusion not later than for financial ac-
counting purposes. 
Sec. 3414. Rules regarding certain government debt. 
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PART 3—CERTAIN RULES FOR DETERMINING GAIN AND LOSS 
Sec. 3421. Cost basis of specified securities determined without regard to iden-
tification. 
Sec. 3422. Wash sales by related parties. 
Sec. 3423. Nonrecognition for derivative transactions by a corporation with re-
spect to its stock. 
PART 4—TAX FAVORED BONDS 
Sec. 3431. Termination of private activity bonds. 
Sec. 3432. Termination of credit for interest on certain home mortgages. 
Sec. 3433. Repeal of advance refunding bonds. 
Sec. 3434. Repeal of tax credit bond rules. 
Subtitle F—Insurance Reforms 
Sec. 3501. Exception to pro rata interest expense disallowance for corporate- 
owned life insurance restricted to 20-percent owners. 
Sec. 3502. Net operating losses of life insurance companies. 
Sec. 3503. Repeal of small life insurance company deduction. 
Sec. 3504. Computation of life insurance tax reserves. 
Sec. 3505. Adjustment for change in computing reserves. 
Sec. 3506. Modification of rules for life insurance proration for purposes of de-
termining the dividends received deduction. 
Sec. 3507. Repeal of special rule for distributions to shareholders from pre- 
1984 policyholders surplus account. 
Sec. 3508. Modification of proration rules for property and casualty insurance 
companies. 
Sec. 3509. Repeal of special treatment of Blue Cross and Blue Shield organiza-
tions, etc. 
Sec. 3510. Modification of discounting rules for property and casualty insur-
ance companies. 
Sec. 3511. Repeal of special estimated tax payments. 
Sec. 3512. Capitalization of certain policy acquisition expenses. 
Sec. 3513. Tax reporting for life settlement transactions. 
Sec. 3514. Clarification of tax basis of life insurance contracts. 
Sec. 3515. Exception to transfer for valuable consideration rules. 
Subtitle G—Pass-Thru and Certain Other Entities 
PART 1—S CORPORATIONS 
Sec. 3601. Reduced recognition period for built-in gains made permanent. 
Sec. 3602. Modifications to S corporation passive investment income rules. 
Sec. 3603. Expansion of qualifying beneficiaries of an electing small business 
trust. 
Sec. 3604. Charitable contribution deduction for electing small business trusts. 
Sec. 3605. Permanent rule regarding basis adjustment to stock of S corpora-
tions making charitable contributions of property. 
Sec. 3606. Extension of time for making S corporation elections. 
Sec. 3607. Relocation of C corporation definition. 
PART 2—PARTNERSHIPS 
Sec. 3611. Repeal of rules relating to guaranteed payments and liquidating dis-
tributions. 
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Sec. 3612. Mandatory adjustments to basis of partnership property in case of 
transfer of partnership interests. 
Sec. 3613. Mandatory adjustments to basis of undistributed partnership prop-
erty. 
Sec. 3614. Corresponding adjustments to basis of properties held by partner-
ship where partnership basis adjusted. 
Sec. 3615. Charitable contributions and foreign taxes taken into account in de-
termining limitation on allowance of partner’s share of loss. 
Sec. 3616. Revisions related to unrealized receivables and inventory items. 
Sec. 3617. Repeal of time limitation on taxing precontribution gain. 
Sec. 3618. Partnership interests created by gift. 
Sec. 3619. Repeal of technical termination. 
Sec. 3620. Publicly traded partnership exception restricted to mining and nat-
ural resources partnerships. 
Sec. 3621. Ordinary income treatment in the case of partnership interests held 
in connection with performance of services. 
Sec. 3622. Partnership audits and adjustments. 
PART 3—REITS AND RICS 
Sec. 3631. Prevention of tax-free spinoffs involving REITs. 
Sec. 3632. Extension of period for prevention of REIT election following rev-
ocation or termination. 
Sec. 3633. Certain short-life property not treated as real property for purposes 
of REIT provisions. 
Sec. 3634. Repeal of special rules for timber held by REITs. 
Sec. 3635. Limitation on fixed percentage rent and interest exceptions for 
REIT income tests. 
Sec. 3636. Repeal of preferential dividend rule for publicly offered REITs. 
Sec. 3637. Authority for alternative remedies to address certain REIT distribu-
tion failures. 
Sec. 3638. Limitations on designation of dividends by REITs. 
Sec. 3639. Non-REIT earnings and profits required to be distributed by REIT 
in cash. 
Sec. 3640. Debt instruments of publicly offered REITs and mortgages treated 
as real estate assets. 
Sec. 3641. Asset and income test clarification regarding ancillary personal 
property. 
Sec. 3642. Hedging provisions. 
Sec. 3643. Modification of REIT earnings and profits calculation to avoid du-
plicate taxation. 
Sec. 3644. Reduction in percentage limitation on assets of REIT which may be 
taxable REIT subsidiaries. 
Sec. 3645. Treatment of certain services provided by taxable REIT subsidi-
aries. 
Sec. 3646. Study relating to taxable REIT subsidiaries. 
Sec. 3647. C corporation election to become, or transfer assets to, a RIC or 
REIT. 
Sec. 3648. Interests in RICs and REITs not excluded from definition of United 
States real property interests. 
Sec. 3649. Dividends derived from RICs and REITs ineligible for deduction for 
United States source portion of dividends from certain foreign 
corporations. 
PART 4—PERSONAL HOLDING COMPANIES 
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Sec. 3661. Exclusion of dividends from controlled foreign corporations from the 
definition of personal holding company income for purposes of 
the personal holding company rules. 
Subtitle H—Taxation of Foreign Persons 
Sec. 3701. Prevention of avoidance of tax through reinsurance with non-taxed 
affiliates. 
Sec. 3702. Taxation of passenger cruise gross income of foreign corporations 
and nonresident alien individuals. 
Sec. 3703. Restriction on insurance business exception to passive foreign invest-
ment company rules. 
Sec. 3704. Modification of limitation on earnings stripping. 
Sec. 3705. Limitation on treaty benefits for certain deductible payments. 
Subtitle I—Provisions Related to Compensation 
PART 1—EXECUTIVE COMPENSATION 
Sec. 3801. Nonqualified deferred compensation. 
Sec. 3802. Modification of limitation on excessive employee remuneration. 
Sec. 3803. Excise tax on excess tax-exempt organization executive compensa-
tion. 
Sec. 3804. Denial of deduction as research expenditure for stock transferred 
pursuant to an incentive stock option. 
PART 2—WORKER CLASSIFICATION 
Sec. 3811. Determination of worker classification. 
Subtitle J—Zones and Short-Term Regional Benefits 
Sec. 3821. Repeal of provisions relating to Empowerment Zones and Enterprise 
Communities. 
Sec. 3822. Repeal of DC Zone provisions. 
Sec. 3823. Repeal of provisions relating to renewal communities. 
Sec. 3824. Repeal of various short-term regional benefits. 
TITLE IV—PARTICIPATION EXEMPTION SYSTEM FOR THE 
TAXATION OF FOREIGN INCOME 
Subtitle A—Establishment of Exemption System 
Sec. 4001. Deduction for dividends received by domestic corporations from cer-
tain foreign corporations. 
Sec. 4002. Limitation on losses with respect to specified 10-percent owned for-
eign corporations. 
Sec. 4003. Treatment of deferred foreign income upon transition to participa-
tion exemption system of taxation. 
Sec. 4004. Look-thru rule for related controlled foreign corporations made per-
manent. 
Subtitle B—Modifications Related to Foreign Tax Credit System 
Sec. 4101. Repeal of section 902 indirect foreign tax credits; determination of 
section 960 credit on current year basis. 
Sec. 4102. Foreign tax credit limitation applied by allocating only directly allo-
cable deductions to foreign source income. 
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Sec. 4103. Passive category income expanded to include other mobile income. 
Sec. 4104. Source of income from sales of inventory determined solely on basis 
of production activities. 
Subtitle C—Rules Related to Passive and Mobile Income 
PART 1—MODIFICATION OF SUBPART F PROVISIONS 
Sec. 4201. Subpart F income to only include low-taxed foreign income. 
Sec. 4202. Foreign base company sales income. 
Sec. 4203. Inflation adjustment of de minimis exception for foreign base com-
pany income. 
Sec. 4204. Active financing exception extended with limitation for low-taxed 
foreign income. 
Sec. 4205. Repeal of inclusion based on withdrawal of previously excluded sub-
part F income from qualified investment. 
PART 2—PREVENTION OF BASE EROSION 
Sec. 4211. Foreign intangible income subject to taxation at reduced rate; intan-
gible income treated as subpart F income. 
Sec. 4212. Denial of deduction for interest expense of United States share-
holders which are members of worldwide affiliated groups with 
excess domestic indebtedness. 
TITLE V—TAX EXEMPT ENTITIES 
Subtitle A—Unrelated Business Income Tax 
Sec. 5001. Clarification of unrelated business income tax treatment of entities 
treated as exempt from taxation under section 501(a). 
Sec. 5002. Name and logo royalties treated as unrelated business taxable in-
come. 
Sec. 5003. Unrelated business taxable income separately computed for each 
trade or business activity. 
Sec. 5004. Exclusion of research income limited to publicly available research. 
Sec. 5005. Parity of charitable contribution limitation between trusts and cor-
porations. 
Sec. 5006. Increased specific deduction. 
Sec. 5007. Repeal of exclusion of gain or loss from disposition of distressed 
property. 
Sec. 5008. Qualified sponsorship payments. 
Subtitle B—Penalties 
Sec. 5101. Increase in information return penalties. 
Sec. 5102. Manager-level accuracy-related penalty on underpayment of unre-
lated business income tax. 
Subtitle C—Excise Taxes 
Sec. 5201. Modification of intermediate sanctions. 
Sec. 5202. Modification of taxes on self-dealing. 
Sec. 5203. Excise tax on failure to distribute within 5 years contribution to 
donor advised fund. 
Sec. 5204. Simplification of excise tax on private foundation investment income. 
Sec. 5205. Repeal of exception for private operating foundation failure to dis-
tribute income. 
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(b)(2)(C), (e)(3)(A), and (e)(3)(B) shall be increased 
by an amount equal to— 
‘‘(A) such dollar amount, multiplied by 
‘‘(B) the cost-of-living adjustment deter-
mined under this subsection for the calendar 
year in which the taxable year begins. 
If any increase determined under the preceding sen-
tence is not a multiple of $100, such increase shall 
be rounded to the next lowest multiple of $100. 
‘‘(2) COST-OF-LIVING ADJUSTMENT.—For pur-
poses of this subsection— 
‘‘(A) IN GENERAL.—The cost-of-living ad-
justment for any calendar year is the percent-
age (if any) by which— 
‘‘(i) the C-CPI-U for the preceding 
calendar year, exceeds 
‘‘(ii) the normalized CPI for calendar 
year 2012. 
‘‘(B) SPECIAL
RULE
FOR
ADJUSTMENTS 
WITH A BASE YEAR AFTER 2012.—For purposes 
of any provision which provides for the substi-
tution of a year after 2012 for ‘2012’ in sub-
paragraph (A)(ii), subparagraph (A) shall be 
applied by substituting ‘C-CPI-U’ for ‘normal-
ized CPI’ in clause (ii). 
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