I 
112TH CONGRESS 
2D SESSION 
H. R. 6474 
To adopt the seven immediate reforms recommended by the National Commis-
sion on Fiscal Responsibility and Reform to reduce spending and make 
the Federal Government more efficient. 
IN THE HOUSE OF REPRESENTATIVES 
SEPTEMBER 20, 2012 
Mr. ROSS of Florida introduced the following bill; which was referred to the 
Committee on Ways and Means, and in addition to the Committees on 
Oversight and Government Reform, House Administration, Rules, and 
the Budget, for a period to be subsequently determined by the Speaker, 
in each case for consideration of such provisions as fall within the juris-
diction of the committee concerned 
A BILL 
To adopt the seven immediate reforms recommended by the 
National Commission on Fiscal Responsibility and Re-
form to reduce spending and make the Federal Govern-
ment more efficient. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 
(a) IN GENERAL.—This Act may be cited as the ‘‘Im-
plementation of Simpson-Bowles Spending Reductions Act 
of 2012’’. 
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(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. No cost of living adjustment in pay of 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 
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 deduc-
tions. 
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 mix-
tures. 
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 expendi-
tures. 
Sec. 228. Repeal of deduction for energy efficient commercial building property. 
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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 serv-
ices necessary for gainful employment. 
Sec. 238. Repeal of credit for adoption expenses. 
Sec. 239. Repeal of credit for expenditures to provide access to disabled individ-
uals. 
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. Treatment of capital gains and dividends as ordinary income. 
Sec. 251. Termination of partial exclusion for gain from certain small business 
stock. 
Sec. 252. Termination of treatment of losses on small business stock as ordi-
nary. 
Sec. 253. Repeal of student loan interest deduction. 
Sec. 254. Repeal of deduction of tuition and related expenses. 
Sec. 255. Repeal of gross income exclusion for United States savings bonds 
used to pay higher education expenses. 
Sec. 256. Elimination of personal exemption for students age 19 and older. 
Sec. 257. Elimination of above the line deduction for certain expenses of ele-
mentary and secondary school teachers. 
Sec. 258. Elimination of gross income exclusion for discharge of certain student 
loan debt. 
Sec. 259. Repeal of exclusion from gross income for rental value of parsonages. 
Sec. 260. Repeal of exclusion from gross income for benefits provided to volun-
teer firefighters and emergency medical responders. 
Sec. 261. Repeal of special treatment of Blue Cross and Blue Shield organiza-
tions, etc. 
Sec. 262. Sense of the House regarding a territorial tax system. 
Sec. 263. Temporary dividends received deduction allowed for 2011 or 2012. 
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. 
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Sec. 383. Termination of exempt facility bond treatment for water, sewage, and 
solid waste facilities. 
Sec. 384. Termination of expensing and amortization of reforestation expendi-
tures and expensing of timber-growing costs. 
Sec. 385. Termination of deferral of gain on sales of stock in agricultural refin-
ers 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. 
TITLE I—REDUCED 
EXPENDITURES 
SEC. 101. REDUCTION IN APPROPRIATIONS TO THE WHITE 
HOUSE AND CONGRESS. 
(a) APPROPRIATIONS TO THE WHITE HOUSE.—Not-
withstanding any other provision of law, the total amount 
of funds appropriated to the appropriations account under 
the heading ‘‘THE WHITE HOUSE’’ under the heading 
‘‘EXECUTIVE OFFICE OF THE PRESIDENT AND 
FUNDS APPROPRIATED TO THE PRESIDENT’’ for 
each of fiscal years 2012 through 2016 may not exceed 
85 percent of the total amount of funds appropriated to 
that account for fiscal year 2011. 
(b) 
APPROPRIATIONS
TO
CONGRESS.—Notwith-
standing any other provision of law, the total amount of 
funds appropriated under the headings ‘‘SENATE’’ and 
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‘‘HOUSE OF REPRESENTATIVES’’ for each of fiscal 
years 2012 through 2016 may not exceed 85 percent of 
the total amount of funds appropriated under those head-
ings for fiscal year 2011. 
SEC. 102. NO COST OF LIVING ADJUSTMENT IN PAY OF 
MEMBERS OF CONGRESS. 
Notwithstanding any other provision of law, no ad-
justment shall be made under section 601(a) of the Legis-
lative Reorganization Act of 1946 (2 U.S.C. 31) (relating 
to cost of living adjustments for Members of Congress) 
during fiscal years 2013, 2014, and 2015. 
SEC. 103. PAY FREEZE FOR FEDERAL EMPLOYEES. 
Section 147 of the Continuing Appropriations Act, 
2011 (Public Law 111–242) is amended— 
(1) in subsection (b)(1), by striking ‘‘December 
31, 2012’’ and inserting ‘‘December 31, 2015’’; and 
(2) in subsection (c), by striking ‘‘December 31, 
2012’’ and inserting ‘‘December 31, 2015’’. 
SEC. 104. REDUCTION IN FEDERAL WORKFORCE. 
(a) DEFINITION.—For the purpose of this section— 
(1) the term ‘‘total number of Federal employ-
ees’’ means the total number of Federal employees 
in all agencies; 
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(2) the term ‘‘Federal employee’’ means an em-
ployee as defined by section 2105 of title 5, United 
States Code; and 
(3) the term ‘‘agency’’ means an Executive 
agency as defined by section 105 of title 5, United 
States Code, excluding the Government Account-
ability Office. 
(b) LIMITATION.—The President, through the Office 
of Management and Budget (in consultation with the Of-
fice of Personnel Management), shall take appropriate 
measures to ensure that, effective beginning in fiscal year 
2015, the total number of Federal employees (as deter-
mined under subsection (c)) shall not exceed 90 percent 
of the total number of Federal employees as of September 
30, 2011 (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, 2011, 
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 
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(2) whenever a determination under paragraph 
(1) is made that the total number of Federal em-
ployees 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, 2014, or any subsequent 
quarter, the Office of Management and Budget provides 
written notice under subsection (c)(2) that the total num-
ber of Federal employees exceeds the maximum number 
allowable under subsection (b), no agency may thereafter 
appoint any employee to fill any vacancy within such agen-
cy until the Office of Management and Budget provides 
written notice to the President and Congress of a deter-
mination 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 determina-
tion relates. 
(e) WAIVER.— 
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(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 safe-
ty, property, or the environment so requires. 
(2) AGENCY
EFFICIENCY
OR
CRITICAL
MIS-
SION.—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 consulta-
tion with the Office of Personnel Management) shall take 
appropriate measures to ensure that agencies shall ap-
point no more than 1 employee for every 3 employees retir-
ing or otherwise separating from Government service after 
the date of the enactment of this Act. This subsection 
shall cease to apply after September 30, 2014. 
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(g) COUNTING RULE.—For purposes of this section, 
any determination of the number of employees in an agen-
cy shall be expressed on a full-time equivalent basis. 
(h) LIMITATION
ON PROCUREMENT
OF SERVICE 
CONTRACTS.—The President, through the Office of Man-
agement 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. 
SEC. 105. REDUCTION IN GOVERNMENT TRAVEL COSTS. 
(a) DEFINITION.—In this section, the term ‘‘agency’’ 
means an executive agency as defined under section 105 
of title 5, United States Code. 
(b) REDUCTION.—Notwithstanding any other provi-
sion of law, the total amount of funds appropriated to the 
appropriations account providing for travel expenses for 
each agency for each of fiscal years 2012, 2013, 2014, 
2015, and 2016 may not exceed 80 percent of the total 
amount of funds appropriated to each of those appropria-
tions accounts for fiscal year 2011. 
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SEC. 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 depart-
ments 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 2012, except that 
the Director shall ensure that essential printed docu-
ments prepared for social security recipients, medi-
care beneficiaries, and other populations in areas 
with limited internet access or use continue to re-
main available; 
(2) establish government-wide Federal guide-
lines 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 en-
sure that Federal employee printing costs unrelated 
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to national defense, homeland security, border secu-
rity, 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 distrib-
uted to the public and issued or paid for by the Fed-
eral Government— 
(A) the name of the issuing agency, de-
partment, commission or office; 
(B) the total number of copies of the docu-
ment 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. 
SEC. 107. REDUCTION IN FEDERAL VEHICLE COSTS. 
Notwithstanding any other provision of law, for fiscal 
year 2012 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 fis-
cal year 2010. 
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SEC. 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: 
‘‘SUBCHAPTER VII—EXPEDITED DISPOSAL OF 
REAL PROPERTY 
‘‘§ 621. Definitions 
‘‘In this subchapter: 
‘‘(1) DIRECTOR.—The term ‘Director’ means 
the Director of the Office of Management and Budg-
et. 
‘‘(2) LANDHOLDING AGENCY.—The term ‘land-
holding agency’ means a landholding agency (as de-
fined in section 501(i) of the McKinney-Vento 
Homeless Assistance Act (42 U.S.C. 11411(i))). 
‘‘(3) REAL PROPERTY.— 
‘‘(A) IN GENERAL.—The term ‘real prop-
erty’ means— 
‘‘(i) a parcel of real property under 
the administrative jurisdiction of the Fed-
eral Government that is— 
‘‘(I) excess; 
‘‘(II) surplus; 
‘‘(III) underperforming; or 
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‘‘(IV) otherwise not meeting the 
needs of the Federal Government, as 
determined by the Director; and 
‘‘(ii) a building or other structure lo-
cated on real property described in clause 
(i). 
‘‘(B) EXCLUSION.—The term ‘real prop-
erty’ excludes any parcel of real property, and 
any building or other structure located on real 
property, that is to be closed or realigned under 
the Defense Authorization Amendments and 
Base Closure and Realignment Act (10 U.S.C. 
2687 note; 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 Direc-
tor, is not being used, and will not be used, to meet the 
needs of the Federal Government for the period of fiscal 
years 2011 through 2015. 
‘‘(b) RECOMMENDATIONS.—The head of each land-
holding agency shall recommend to the Director real prop-
erty for disposal under subsection (a). 
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‘‘(c) SELECTION OF PROPERTIES.—After receiving 
recommendations of candidate real property under sub-
section (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 sec-
tion to the Department of Housing and Urban Develop-
ment 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 
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‘‘Sec. 621. Definitions. 
‘‘Sec. 622. Disposal program.’’. 
SEC. 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 Represent-
atives to consider a bill, resolution, or amend-
ment that includes an earmark, limited tax ben-
efit, 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 Represent-
atives 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, 
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an appropriations act, upon a point of order 
being made by any Senator pursuant to this 
paragraph, and such point of order being sus-
tained, such material contained in such con-
ference 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 amend-
ment, 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 strick-
en. Any such motion in the Senate shall be de-
batable 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 sub-
section), 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. 
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‘‘(4) DEFINITIONS.—For the purpose of this 
subsection— 
‘‘(A) the term ‘earmark’ means a provision 
or report language included primarily at the re-
quest of a Senator or Member of the House of 
Representatives providing, authorizing, or rec-
ommending a specific amount of discretionary 
budget authority, credit authority, or other 
spending authority for a contract, loan, loan 
guarantee, grant, loan authority, or other ex-
penditure with or to an entity, or targeted to a 
specific State, locality or Congressional district, 
other than through a statutory or administra-
tive formula-driven or competitive award proc-
ess; 
‘‘(B) the term ‘limited tax benefit’ means 
any revenue provision that— 
‘‘(i) provides a Federal tax deduction, 
credit, exclusion, or preference to a par-
ticular 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 
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to potential beneficiaries of such provision; 
and 
‘‘(C) the term ‘limited tariff benefit’ means 
a provision modifying the Harmonized Tariff 
Schedule of the United States in a manner that 
benefits 10 or fewer entities. 
‘‘(5) APPLICATION.—This subsection shall not 
apply to any authorization of appropriations to a 
Federal entity if such authorization is not specifi-
cally targeted to a State, locality or congressional 
district.’’. 
TITLE II—TAX REFORM 
Subtitle A—Tax Rates 
SEC. 201. INDIVIDUAL RATES. 
(a) IN GENERAL.—Section 1 of the Internal Revenue 
Code of 1986 is amended by adding at the end the fol-
lowing new subsection: 
‘‘(j) 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 sub-
sections (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.— 
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‘‘(A) IN
GENERAL.—In the case of any 
taxable year beginning after 2013, the Sec-
retary 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’ for ‘1992’.’’. 
(b) MAXIMUM CAPITAL GAINS RATE.—Paragraph 
(1) of section 1(b) of such Code 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 cap-
ital gain as does not exceed $1,000,000; and 
‘‘(C) 20 percent of so much of net capital 
gain as exceeds $1,000,000.’’. 
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SEC. 202. REPEAL OF ALTERNATIVE MINIMUM TAX ON INDI-
VIDUALS. 
(a) IN GENERAL.—Section 55(a) of the Internal Rev-
enue Code of 1986 (relating to alternative minimum tax 
imposed) 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, 2011, shall be zero.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to taxable years beginning after 
December 31, 2011. 
SEC. 203. PERMANENT REPEAL OF PERSONAL EXEMPTION 
PHASEOUT. 
Section 901 of the Economic Growth and Tax Relief 
Reconciliation Act of 2001 shall not apply to the amend-
ments made by section 102 of such Act. 
SEC. 204. PERMANENT REPEAL OF PHASEOUT OF OVERALL 
LIMITATION ON ITEMIZED DEDUCTIONS. 
Section 901 of the Economic Growth and Tax Relief 
Reconciliation Act of 2001 shall not apply to the amend-
ments made by section 103 of such Act. 
SEC. 205. CORPORATE INCOME TAX RATE REDUCED TO 
FLAT RATE OF 20 PERCENT. 
(a) IN GENERAL.—Paragraph (1) of section 11(b) of 
the Internal Revenue Code of 1986 is amended by striking 
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‘‘shall be the sum of—’’ and all that follows through the 
period at the end and inserting ‘‘shall be 20 percent of 
taxable income.’’. 
(b) PERSONAL
SERVICE
CORPORATIONS.—Para-
graph (2) of section 11(b) of such Code is amended by 
striking ‘‘35 percent’’ and inserting ‘‘20 percent’’. 
(c) CONFORMING AMENDMENTS.— 
(1) Subsection (a) of section 1201 of such Code 
is amended— 
(A) by striking ‘‘35 percent (determined 
without regard to the last 2 sentences of section 
11(b))’’ and inserting ‘‘20 percent’’, and 
(B) by striking ‘‘35 percent’’ each place it 
appears (other than in the matter preceding 
paragraph (1)) and inserting ‘‘20 percent’’. 
(2) Paragraphs (1), (2), and (6) of section 
1445(e) of such Code are each amended by striking 
‘‘35 percent’’ and inserting ‘‘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. 
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SEC. 206. RENEWED TEMPORARY DIVIDENDS RECEIVED DE-
DUCTION. 
(a) ELECTION.—Subsection (f) of section 965 of the 
Internal Revenue Code of 1986 (relating to election) 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 be-
gins before the date of the enactment of this sub-
section, or 
‘‘(2) the taxpayer’s first taxable year which be-
gins 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) of 
such Code is amended to read as follows: 
‘‘(1) IN GENERAL.—The amount of dividends 
taken into account under subsection (a) shall not ex-
ceed the sum of the current and accumulated earn-
ings 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 for-
eign corporations of the United States shareholder.’’. 
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(c) FAILURE TO MAINTAIN EMPLOYMENT LEV-
ELS.—Paragraph (4) of section 965(b) of such Code (re-
lating to limitations) 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 cal-
endar 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 tax-
payer’s average employment level during such 
period falls below the prior average employment 
(but not exceeding the aggregate amount al-
lowed as a deduction pursuant to subsection 
(a)(1)) shall be taken into income by the tax-
payer 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 
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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’ shall be the average 
number of full-time United States employees of 
the taxpayer during the period consisting of the 
24 calendar months immediately preceding the 
calendar month in which the taxpayer first re-
ceives a distribution described in subsection 
(a)(1). 
‘‘(D) FULL-TIME
UNITED
STATES
EM-
PLOYEE.—For purposes of this paragraph— 
‘‘(i) IN
GENERAL.—The term ‘full- 
time United States employee’ means an in-
dividual who provides services in the 
United States as a full-time employee, 
based on the employer’s standards and 
practices; except that regardless of the em-
ployer’s classification of the employee, an 
employee whose normal schedule is 40 
hours or more per week is considered a 
full-time employee. 
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‘‘(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 pe-
riod referred to in subparagraph (A); 
and 
‘‘(II) any individual who was an 
employee of any trade or business dis-
posed of by the taxpayer during the 
24-month period referred to in sub-
paragraph (A) or the 24-month period 
referred to in subparagraph (C). 
‘‘(E) AGGREGATION
RULES.—In deter-
mining 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 of such Code 
is amended by striking ‘‘June 30, 2003’’ each place it oc-
curs and inserting ‘‘June 30, 2011’’. 
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(e) BASE PERIOD.—Paragraph (2) of subsection 
965(c) of such Code 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.—Sub-
paragraph (B) of section 965(b)(3) of such Code is 
amended by striking ‘‘October 3, 2004’’ and inserting 
‘‘January 19, 2012’’. 
(g) CONFORMING AMENDMENTS.— 
(1) Subsection 965(c) of such Code, as amend-
ed by subsection (e), is amended by striking para-
graph (1) and redesignating paragraphs (2), (3), 
(4), and (5) as paragraphs (1), (2), (3), and (4), re-
spectively. 
(2) Paragraph 965(c)(4) of such Code, as re-
designated 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 share-
holder.’’. 
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(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. 
Subtitle B—Elimination of Tax 
Expenditures 
SEC. 211. TERMINATION OF CREDIT FOR INCREASING RE-
SEARCH ACTIVITIES. 
Effective for taxable years beginning after the date 
of the enactment of this Act, section 41 of the Internal 
Revenue Code of 1986 is hereby repealed. 
SEC. 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 sub-
section 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),’’ and inserting ‘‘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. 
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SEC. 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’’ at the end of clause (iii), by striking the period at 
the end of clause (iv) and inserting ‘‘, or’’, and by adding 
at the end the following new clause: 
‘‘(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. 
SEC. 214. REPEAL PERCENTAGE DEPLETION FOR OIL AND 
NATURAL GAS WELLS. 
(a) IN GENERAL.—Section 613A is amended by add-
ing at the end the following new subsection: 
‘‘(f) TERMINATION.—After the date of the enactment 
of the Implementation of Simpson-Bowles Spending Re-
ductions Act of 2012, this section and section 611 shall 
not apply to any oil or gas well.’’. 
(b) CONFORMING AMENDMENT.—Section 613A(c)(1) 
is amended by striking ‘‘subsection (d)’’ and inserting 
‘‘subsections (d) and (f)’’. 
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(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
the date of the enactment of this Act. 
SEC. 215. TERMINATION OF CREDIT FOR ELECTRICITY 
PRODUCED FROM CERTAIN RENEWABLE RE-
SOURCES. 
Effective for property placed in service after the date 
of the enactment of this Act, section 45 is repealed. 
SEC. 216. TERMINATION OF ENERGY CREDIT. 
Effective for property placed in service after the date 
of the enactment of this Act, section 48 is repealed. 
SEC. 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. 
SEC. 218. REPEAL OF CREDIT FOR ALCOHOL FUEL, BIO-
DIESEL, AND ALTERNATIVE FUEL MIXTURES. 
Effective for fuel sold and used after the date of the 
enactment of this Act, section 6426 is repealed. 
SEC. 219. REPEAL OF CREDIT FOR BIODIESEL AND RENEW-
ABLE DIESEL USED AS FUEL. 
Effective for fuel produced, and sold or used, after 
the date of the enactment of this Act, section 40A is re-
pealed. 
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SEC. 220. REPEAL OF CREDIT FOR CERTAIN PLUG-IN ELEC-
TRIC VEHICLES. 
Effective for property placed in service after the date 
of the enactment of this Act, section 30 is repealed. 
SEC. 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. 
SEC. 222. REPEAL OF DEDUCTION FOR ENERGY CONSERVA-
TION SUBSIDIES PROVIDED BY PUBLIC UTILI-
TIES. 
Effective for amounts received after the date of the 
enactment of this Act, section 136 is repealed. 
SEC. 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. 
SEC. 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. 
SEC. 225. REPEAL OF SPECIAL ALLOWANCE FOR CELLU-
LOSIC BIOFUEL PLANT PROPERTY. 
(a) IN GENERAL.—Section 168 is amended by strik-
ing subsection (l). 
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(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. 
SEC. 226. REPEAL OF ELECTION TO EXPENSE CERTAIN RE-
FINERIES. 
Effective for property placed in service after the date 
of the enactment of this Act, section 179C is repealed. 
SEC. 227. REPEAL OF 2-YEAR AMORTIZATION OF GEOLOGI-
CAL AND GEOPHYSICAL EXPENDITURES. 
(a) IN GENERAL.—Paragraphs (1) and (4) of section 
167(h) are each amended by striking ‘‘24-month’’ and in-
serting ‘‘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. 
SEC. 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. 
SEC. 229. REPEAL OF CREDIT FOR CONSTRUCTION OF NEW 
ENERGY EFFICIENT HOMES. 
Effective for homes acquired after the date of the en-
actment of this Act, section 45L is repealed. 
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SEC. 230. REPEAL OF CREDIT FOR ENERGY EFFICIENT AP-
PLIANCES. 
Effective for property placed in service after the date 
of the enactment of this Act, section 25C is repealed. 
SEC. 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. 
SEC. 232. REPEAL OF ADVANCED ENERGY PROJECT CRED-
IT. 
Effective for property placed in service after the date 
of the enactment of this Act, section 48C is repealed. 
SEC. 233. REPEAL OF CREDIT FOR CARBON DIOXIDE SE-
QUESTRATION. 
Effective for carbon dioxide captured after the date 
of the enactment of this Act, section 45Q is repealed. 
SEC. 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. 
SEC. 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. 
SEC. 236. REPEAL OF WORK OPPORTUNITY TAX CREDIT. 
Effective for wages paid after the date of the enact-
ment of this Act, section 51 is repealed. 
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SEC. 237. REPEAL OF CREDIT FOR EXPENSES FOR HOUSE-
HOLD AND DEPENDENT CARE SERVICES NEC-
ESSARY FOR GAINFUL EMPLOYMENT. 
Effective for expenses paid after the date of the en-
actment of this Act, section 21 is repealed. 
SEC. 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. 
SEC. 239. REPEAL OF CREDIT FOR EXPENDITURES TO PRO-
VIDE ACCESS TO DISABLED INDIVIDUALS. 
Effective for expenditures paid or incurred after the 
date of the enactment of this Act, section 44 is repealed. 
SEC. 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. 
SEC. 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. 
SEC. 242. REPEAL OF ELECTION TO EXPENSE CERTAIN RE-
FINERY PROPERTY. 
Effective for property placed in service after the date 
of the enactment of this Act, sections 168(l) and 179C 
are repealed. 
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SEC. 243. REPEAL OF DEDUCTION FOR ENDANGERED SPE-
CIES RECOVERY EXPENDITURES. 
(a) IN GENERAL.—Subsections (a) and (c)(1) of sec-
tion 175 are each amended by striking ‘‘, or for endan-
gered 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 pur-
suant to the Endangered Species Act of 1973’’, 
and 
(B) by striking ‘‘, OR ENDANGERED SPE-
CIES RECOVERY PLAN’’ in the heading thereof. 
(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. 
SEC. 244. REPEAL OF EXCLUSION OF CANCELLATION OF IN-
DEBTEDNESS INCOME OF SOLVENT FARM-
ERS. 
(a) IN GENERAL.—Paragraph (1) of section 108(a) 
is amended by striking subparagraph (C) and by redesig-
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nating 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 inserting 
‘‘and (D)’’. 
(2) Subparagraph (B) of section 108(a)(2) is 
amended— 
(A) by striking ‘‘Subparagraphs (C) and 
(D)’’ and inserting ‘‘Subparagraph (C)’’, and 
(B) by striking ‘‘QUALIFIED FARM EXCLU-
SION AND’’. 
(3) Paragraph (1) of section 108(b) is amended 
by striking ‘‘(B), or (C)’’ and inserting ‘‘or (B)’’. 
(4) Subsection (c) of section 108 is amended by 
striking ‘‘under subparagraph (D)’’ each place is ap-
pears and inserting ‘‘under subparagraph (C)’’. 
(5) Section 108 is amended by striking sub-
section (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. 
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SEC. 245. REPEAL OF ALTERNATIVE MINIMUM TAX TREAT-
MENT OF CERTAIN PROPERTY AND CAS-
UALTY 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. 
SEC. 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—’’ and all that follows through the period 
at the end and inserting the following: ‘‘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 be-
fore the date of the enactment of the Implementa-
tion of Simpson-Bowles Spending Reductions Act of 
2012’’ after ‘‘section 806(b)(3)’’. 
(3) Subclause (II) of section 465(c)(7)(D)(v) is 
amended by inserting ‘‘, as in effect on the day be-
fore the date of the enactment of the Implementa-
tion of Simpson-Bowles Spending Reductions Act of 
2012’’ after ‘‘section 806(b)(3)’’. 
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(4) Subparagraph (A) of section 815(c)(2) is 
amended by striking clause (ii), by inserting ‘‘and’’ 
at the end of clause (i), and by redesignating clause 
(iii) as clause (ii). 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
the date of the enactment of this Act. 
SEC. 247. TERMINATION OF $25,000 EXEMPTION FROM PAS-
SIVE LOSS RULES FOR RENTAL REAL ESTATE 
ACTIVITIES. 
(a) IN GENERAL.—Section 469 is amended by strik-
ing 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. 
SEC. 248. REPEAL OF DISCHARGE OF INDEBTEDNESS EX-
CLUSION. 
Effective for discharges of indebtedness occurring on 
or after the date of the enactment of this Act, section 108 
is repealed. 
SEC. 249. REPEAL OF CERTAIN EXCEPTIONS FOR IMPUTED 
INTEREST RULES. 
(a) DETERMINATION OF ISSUE PRICE IN THE CASE 
OF CERTAIN DEBT INSTRUMENTS ISSUED FOR PROP-
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