‘‘(A) the product of—
‘‘(i) the base amortization amount,
and
‘‘(ii) the progressivity factor for the
taxpayer for such taxable year, or
‘‘(B) 20 percent of the excess of—
‘‘(i) the modified adjusted gross in-
come of the taxpayer for such taxable year,
over
‘‘(ii)(I) in the case of a joint return,
the sum of the standard deduction applica-
ble to such return and twice the exemption
amount for the taxable year, and
‘‘(II) in any other case, the sum of
the standard deduction applicable to such
individual and the exemption amount for
the taxable year.
For purposes of subparagraph (B)(ii), the term
‘standard deduction’ has the meaning given
such term by section 63(c), and the term ‘ex-
emption amount’ has the meaning given such
term by section 151(d).
‘‘(2) BASE AMORTIZATION AMOUNT.—
‘‘(A) IN GENERAL.—For purposes of this
section, the term ‘base amortization amount’
means the amount which, if paid at the close of
each year for a period of 12 consecutive years,
would fully repay (with interest) at the close of
such period the maximum account balance of
the borrower. For purposes of the preceding
sentence, an 7-percent annual rate of interest
shall be assumed.
‘‘(B) JOINT RETURNS.—In the case of a
joint return where each spouse has an account
balance and is in repayment status, the amount
determined under subparagraph (A) shall be
the sum of the base amortization amounts of
each spouse.
‘‘(3) PROGRESSIVITY FACTOR.—
‘‘(A) IN GENERAL.—For purposes of this
section, the term ‘progressivity factor’ means
the number determined under tables prescribed
by the Secretary which is based on the following
tables for the circumstances specified:
‘‘(i) 
JOINT
RETURNS; 
SURVIVING
SPOUSES.—In the case of a taxpayer to
whom section 1(a) applies—
‘‘If the taxpayer’s modified
The progressivity
adjusted gross income is:
factor is:
Not over $8,253 ............................................................
0.429
$12,285 .........................................................................
0.500
$17,577 .........................................................................
0.571
$22,806 .........................................................................
0.643
$28,224 .........................................................................
0.786
$34,335 .........................................................................
0.893
$41,013 .........................................................................
1.000
$51,030 .........................................................................
1.000
$66,654 .........................................................................
1.152
$91,728 .........................................................................
1.272
$122,890 .......................................................................
1.364
$171,234 .......................................................................
1.485
$253,000 and over ........................................................
2.000
‘‘(ii) HEADS
OF
HOUSEHOLDS.—In
the case of a taxpayer to whom section
1(b) applies—
‘‘If the taxpayer’s modified
The progressivity
adjusted gross income is:
factor is:
Not over $6,867 ............................................................
0.429
$10,836 .........................................................................
0.500
$12,915 .........................................................................
0.607
$16,884 .........................................................................
0.643
$20,916 .........................................................................
0.714
$26,271 .........................................................................
0.857
$32,949 .........................................................................
1.000
$39,627 .........................................................................
1.000
$49,644 .........................................................................
1.094
$66,339 .........................................................................
1.313
$89,712 .........................................................................
1.406
$125,466 .......................................................................
1.500
$205,020 and over ........................................................
2.000
‘‘(iii) 
UNMARRIED
INDIVIDUALS,
ETC.—In the case of a taxpayer to whom
section 1(c) applies—
‘‘If the taxpayer’s modified
The progressivity
adjusted gross income is:
factor is:
Not over $6,867 ............................................................
0.467
$9,450 ...........................................................................
0.500
$12,159 .........................................................................
0.533
$14,931 .........................................................................
0.600
$17,577 .........................................................................
0.667
$20,916 .........................................................................
0.767
$26,271 .........................................................................
0.867
$32,949 .........................................................................
1.000
$39,627 .........................................................................
1.000
$47,628 .........................................................................
1.118
$60,984 .........................................................................
1.235
$86,373 .........................................................................
1.412
$99,036 .........................................................................
1.500
$176,400 and over ........................................................
2.000
‘‘(iv) MARRIED
INDIVIDUALS
FILING
SEPARATE
RETURNS.—In the case of a
taxpayer to whom section 1(d) applies—
‘‘If the taxpayer’s modified
The progressivity
adjusted gross income is:
factor is:
Not over $4,127 ............................................................
0.483
$6,143 ...........................................................................
0.552
$8,789 ...........................................................................
0.655
$11,403 .........................................................................
0.759
$14,112 .........................................................................
0.862
$17,168 .........................................................................
1.000
$20,507 .........................................................................
1.000
$25,515 .........................................................................
1.182
$33,327 .........................................................................
1.333
$45,864 .........................................................................
1.485
$88,200 and over ..........................................................
2.000
‘‘(B) RATABLE CHANGES.—The tables pre-
scribed by the Secretary under subparagraph
(A) shall provide for ratable increases (rounded
to the nearest 1/1,000) in the progressivity fac-
tors between the amounts of modified adjusted
gross income contained in the tables.
‘‘(C) INFLATION
ADJUSTMENT
OF
MODI-
FIED AGI AMOUNTS.—For inflation adjustment
of amounts of modified adjusted gross income,
see subsection (h)(3).
‘‘(4) MODIFIED
ADJUSTED
GROSS
INCOME.—
For purposes of this subsection, the term ‘modified
adjusted gross income’ means adjusted gross income
for the taxable year—
‘‘(A) determined without regard to section
62(b) and without regard to the deductions
from gross income allowable under section
62(a) by reason of—
‘‘(i) paragraph (6) thereof (relating to
profit-sharing, annuities, and bond-pur-
chase plans of self-employed individuals),
‘‘(ii) paragraph (7) thereof (relating
to retirement savings), and
‘‘(iii) paragraph (11) thereof (relating
to reforestation expenses), and
‘‘(B) increased by—
‘‘(i) interest exempt from the tax im-
posed by chapter 1, and
‘‘(ii) the items of tax preference de-
scribed in section 57 (other than sub-
section (a)(5) thereof).
‘‘(c) TERMINATION
OF BORROWER’S REPAYMENT
OBLIGATION.—
‘‘(1) IN GENERAL.—The repayment obligation
of a borrower of an IDEA loan shall terminate only
if there is repaid with respect to such loan an
amount equal to—
‘‘(A) in the case of any repayment during
the first 12 years for which the borrower is in
repayment status with respect to any loan, the
sum of—
‘‘(i) the principal amount of the loan,
plus
‘‘(ii) interest computed for each year
the loan is outstanding at an annual rate
equal to the annual rate otherwise applica-
ble to such loan for such year, plus 1 per-
cent, and
‘‘(B) in the case of any repayment during
any subsequent year, the principal amount of
the loan plus interest computed at the rates
applicable to the loan.
‘‘(2) NO
REPAYMENT
REQUIRED
AFTER
YEARS IN REPAYMENT STATUS.—No amount shall be
required to be repaid under this section with respect
to any loan for any taxable year after the 25th year
for which the borrower is in repayment status with
respect to such loan.
‘‘(3) EXCEPTION FOR DE MINIMUS LOANS RE-
PAID DURING FIRST 12 YEARS IN REPAYMENT STA-
TUS.—In any case where the maximum account bal-
ance of any borrower is $3,000 or less, subpara-
graph (B), and not subparagraph (A), of paragraph
(1) shall apply to repayment of such loan.
‘‘(4) DETERMINATION
OF
YEARS
IN
REPAY-
MENT STATUS.—For purposes of paragraphs (1)(A)
‘‘(A) such borrower was, during at least 7
months of such year, an eligible student, as
that term is defined in section 109(2) of the In-
come-Dependent Education Assistance Act of
1993; or
‘‘(B) such taxable year was the first year
in which the borrower was such an eligible stu-
dent and the borrower was such an eligible stu-
dent during the last 3 months of such taxable
year.
‘‘(4) IDEA LOAN.—The term ‘IDEA loan’
means any loan made under title I of the Income-
Dependent Education Assistance Act of 1993.
‘‘(e) PAYMENT OF AMOUNT OWING.—Any amount to
be collected from an individual under this section shall be
paid—
‘‘(1) not later than the last date (determined
without regard to extensions) prescribed for filing
his return of tax imposed by chapter 1 for the tax-
able year ending before the date the notice under
subsection (a) is sent, and
‘‘(2)(A) if such return is filed not later than
such date, with such return, or
‘‘(B) in any case not described in subparagraph
(A), in such manner as the Secretary may by regula-
tions prescribe.
‘‘(f) FAILURE TO PAY AMOUNT OWING.—If an indi-
vidual fails to pay the full amount required to be paid on
or before the last date described in subsection (e)(1), the
Secretary shall assess and collect the unpaid amount in
the same manner, with the same powers, and subject to
the same limitations applicable to a tax imposed by sub-
title C the collection of which would be jeopardized by
delay.
‘‘(g) LOANS OF DECEASED AND PERMANENTLY DIS-
ABLED BORROWERS; DISCHARGE BY SECRETARY.—
‘‘(1) DISCHARGE IN THE EVENT OF DEATH.—
If a borrower of an IDEA loan dies or becomes per-
manently and totally disabled (as determined in ac-
cordance with regulations of the Secretary), then the
Secretary shall discharge the borrower’s liability on
the loan.
‘‘(2) LIMITATION
ON
DISCHARGE.—The dis-
charge of the liability of an individual under this
subsection shall not discharge the liability of any
spouse with respect to any IDEA loan made to such
spouse.
‘‘(h) 
CREDITING
OF
COLLECTIONS; 
SPECIAL
RULES.—
‘‘(1) CREDITING OF AMOUNTS PAID ON A JOINT
RETURN.—Amounts collected under this section on a
joint return from a husband and wife both of whom
are in repayment status shall be credited to the ac-
counts of such spouses in the following order:
‘‘(A) first, to repayment of interest added
to each account at the end of the preceding cal-
endar year in proportion to the interest so
added to the respective accounts of the spouses,
and
‘‘(B) then, to repayment of unpaid prin-
cipal, and unpaid interest accrued before such
preceding calendar year, in proportion to the re-
spective maximum account balances of the
spouses.
‘‘(2) COMPUTATION OF ALTERNATIVE ANNUAL
PAYMENT FOR INDIVIDUALS WHO HAVE ATTAINED
AGE 55.—In the case of an individual who attains
age 55 before the close of the calendar year ending
in the taxable year, or of an individual filing a joint
return whose spouse attains age 55 before the close
of such calendar year, the progressivity factor appli-
cable to the base amortization amount of such indi-
vidual for such taxable year shall not be less than
1.0.
‘‘(3) INFLATION ADJUSTMENT IN COMPUTATION
OF PROGRESSIVITY FACTOR.—
‘‘(A) IN
GENERAL.—Not later than De-
cember 15 of 1996 and of each 3d calendar
year thereafter, the Secretary shall prescribe ta-
bles which shall apply in lieu of the tables con-
tained in subsection (b)(3)(A) with respect to
the succeeding 3 calendar years.
‘‘(B) METHOD OF PRESCRIBING TABLES.—
The table which under subparagraph (A) is to
apply in lieu of the table contained in clause (i),
(ii), (iii), or (iv) of subsection (b)(3)(A), as the
case may be, shall be prescribed—
‘‘(i) by increasing each amount of
modified adjusted gross income in such
table by the cost-of-living adjustment for
the calendar year, and
‘‘(ii) by not changing the progressivity
factor applicable to the modified adjusted
gross income as adjusted under clause (i).
If any increase under the preceding sentence is
not a multiple of $10, such increase shall be
rounded to the nearest multiple of $10 (or, if
such increase is a multiple of $5 and is not a
multiple of $10, such increase shall be in-
creased to the next highest multiple of $10).
‘‘(C) COST-OF-LIVING ADJUSTMENT.—For
purposes of this paragraph, the cost-of-living
adjustment for any calendar year is the per-
centage (if any) by which—
‘‘(i) the CPI for the preceding cal-
endar year, exceeds
‘‘(ii) the CPI for the calendar year
1995.
‘‘(D) CPI FOR ANY CALENDAR YEAR.—For
purposes of subparagraph (C), the CPI for any
calendar year is the average of the Consumer
Price Index as of the close of the 12-month pe-
riod ending on September 30 of such calendar
year.
‘‘(E) CONSUMER PRICE INDEX.—For pur-
poses of subparagraph (D), the term ‘Consumer
Price Index’ means the last Consumer Price
Index for all-urban consumers published by the
Department of Labor.
‘‘(5) RULES RELATING TO BANKRUPTCY.—
‘‘(A) IN GENERAL.—An IDEA loan shall
not be dischargeable in a case under title 11 of
the United States Code.
‘‘(B) CERTAIN
AMOUNTS
MAY
BE
POST-
PONED.—If any individual receives a discharge
in a case under title 11 of the United States
Code, the Secretary may postpone any amount
of the portion of the liability of such individual
on any IDEA loan which is attributable to
amounts required to be paid on such loan for
periods preceding the date of such discharge.
‘‘(6) FINALITY OF ASSESSMENT AND COLLEC-
TION.—The first sentence of subsection (b) of sec-
tion 6305 shall apply to assessments and collections
under subsection (f) of this section.’’
(b) APPLICATION OF ESTIMATED TAX.—Subsection
(f) of section 6654 of such Code (relating to failure by
individual to pay estimated income tax) is amended by
striking ‘‘minus’’ at the end of paragraph (2) and insert-
ing ‘‘plus’’, by redesignating paragraph (3) as paragraph
(4), and by inserting after paragraph (2) the following new
paragraph:
‘‘(3) the amount required to be repaid under
section 6306 (relating to collection of income-de-
pendent education assistance loans), minus.’’
(c) FILING REQUIREMENT.—Subsection (a) of sec-
tion 6012 of such Code (relating to persons required to
make returns of income) is amended by inserting after
paragraph (9) the following new paragraph:
‘‘(10) Every individual required to make a pay-
ment for the taxable year under section 6306 (relat-
ing to collection of income-dependent education as-
sistance loans).’’
(d) CLERICAL AMENDMENT.—The table of sections
for subchapter A of chapter 64 of such Code is amended
by adding at the end thereof the following new item:
‘‘Sec. 6306. Collection of income-dependent education assistance
loans.’’
Æ
HR 2073 IH——2
HR 2073 IH——3