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(b) APPLICABILITY OF FINAL REGULATIONS.—Final
regulations applicable to the guidance regarding new tech-
nologies described in subsection (a) shall not be effective
until the first plan year beginning at least 6 months after
the issuance of such final regulations.
SEC. 1308. EXTENSION OF MORATORIUM ON APPLICATION
OF CERTAIN NONDISCRIMINATION RULES TO
STATE AND LOCAL GOVERNMENTS.
(a) GENERAL NONDISCRIMINATION AND PARTICIPA-
TION RULES.—
(1) NONDISCRIMINATION
REQUIREMENTS.—Sec-
tion 401(a)(5) (relating to qualified pension, profit-
sharing, and stock bonus plans) is amended by add-
ing at the end the following:
‘‘(G) GOVERNMENTAL PLANS.—Paragraphs
(3) and (4) shall not apply to a governmental
plan (within the meaning of section 414(d)).’’.
(2) 
ADDITIONAL
PARTICIPATION
REQUIRE-
MENTS.—Section 401(a)(26)(H) (relating to addi-
tional participation requirements) is amended to read
as follows:
‘‘(H) 
EXCEPTION
FOR
GOVERNMENTAL
PLANS.—This paragraph shall not apply to a
governmental plan (within the meaning of sec-
tion 414(d)).’’.
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(3) MINIMUM PARTICIPATION STANDARDS.—Sec-
tion 410(c)(2) (relating to application of participa-
tion standards to certain plans) is amended to read
as follows:
‘‘(2) A plan described in paragraph (1) shall be
treated as meeting the requirements of this section for
purposes of section 401(a), except that in the case of
a plan described in subparagraph (B), (C), or (D) of
paragraph (1), this paragraph shall only apply if
such plan meets the requirements of section 401(a)(3)
(as in effect on September 1, 1974).’’.
(b) PARTICIPATION STANDARDS FOR QUALIFIED CASH
OR DEFERRED ARRANGEMENTS.—
(1) IN GENERAL.—Section 401(k)(3) (relating to
application of participation and discrimination
standards) is amended by adding at the end the fol-
lowing:
‘‘(G) The requirements of subparagraph
(A)(i) and (C) shall not apply to a governmental
plan (within the meaning of section 414(d)).’’.
(2) 
MATCHING
CONTRIBUTIONS.—Section
401(m)(2) is amended by adding at the end the fol-
lowing new subparagraph:
‘‘(C) SPECIAL
RULE
FOR
GOVERNMENTAL
PLANS.—A defined contribution plan which is a
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governmental plan (as defined in section 414(d))
shall be treated as meeting the requirements of
this paragraph.’’.
(c) NONDISCRIMINATION RULES FOR SECTION 403(b)
PLANS.—Section 403(b)(12) (relating to nondiscrimination
requirements) is amended by adding at the end the follow-
ing:
‘‘(C) GOVERNMENTAL PLANS.—For purposes
of paragraph (1)(D), the requirements of sub-
paragraph (A)(i) (other than those relating to
section 401(a)(17)) shall not apply to a govern-
mental plan (within the meaning of section
414(d)).’’.
(d) EFFECTIVE DATE.—
(1) IN
GENERAL.—The amendments made by
this section apply to taxable years beginning on or
after the date of enactment of this Act.
(2) TREATMENT FOR YEARS BEGINNING BEFORE
DATE OF ENACTMENT.—A governmental plan (within
the meaning of section 414(d) of the Internal Revenue
Code of 1986) shall be treated as satisfying the re-
quirements 
of 
sections 
401(a)(3), 
401(a)(4),
401(a)(26), 401(k), 401(m), 403 (b)(1)(D) and
(b)(12), and 410 of such Code for all taxable years be-
ginning before the date of enactment of this Act.
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SEC. 1309. CLARIFICATION OF CERTAIN RULES RELATING
TO EMPLOYEE STOCK OWNERSHIP PLANS OF
S CORPORATIONS.
(a) CERTAIN CASH DISTRIBUTIONS PERMITTED.—
(1) Paragraph (2) of section 409(h) is amended
by adding at the end the following new subparagraph:
‘‘(B) PLAN
MAINTAINED
BY
S
CORPORA-
TION.—In the case of a plan established and
maintained by an S corporation which otherwise
meets the requirements of this subsection or sec-
tion 4975(e)(7), such plan shall not be treated as
failing to meet the requirements of this sub-
section or section 401(a) merely because it does
not permit a participant to exercise the right de-
scribed in paragraph (1)(A) if such plan pro-
vides that the participant entitled to a distribu-
tion has a right to receive the distribution in
cash.’’.
(2) Paragraph (2) of section 409(h) is amend-
ed—
(A) by striking ‘‘a plan which’’ in the first
sentence and inserting the following:
‘‘(A) IN GENERAL.—A plan which’’, and
(B) by moving the text before subparagraph
(B) 2 ems to the right.
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(b) CERTAIN SHAREHOLDER-EMPLOYEES NOT TREAT-
ED AS OWNER-EMPLOYEES.—
(1) AMENDMENT TO 1986 CODE.—The last sen-
tence of section 4975(d) is amended by inserting ‘‘,
except that this sentence shall not apply for purposes
of any sale of stock by such a shareholder-employee to
an employee stock ownership plan (as defined in sub-
section (e)(7))’’ after ‘‘owner-employee’’.
(2) AMENDMENT TO ERISA.—The last sentence of
section 408(d) of the Employee Retirement Income
Security Act of 1974 (29 U.S.C. 1108(d)) is amended
by inserting ‘‘, except that this sentence shall not
apply for purposes of any sale of stock by such a
shareholder-employee to an employee stock ownership
plan (as defined in section 4975(e)(7) of the Internal
Revenue Code of 1986)’’ after ‘‘owner-employee’’.
(c) EFFECTIVE DATE.—The amendments made by this
section shall apply to taxable years beginning after Decem-
ber 31, 1997.
SEC. 1310. MODIFICATION OF 10 PERCENT TAX FOR NON-
DEDUCTIBLE CONTRIBUTIONS.
(a) IN GENERAL.—Section 4972(c)(6)(B) (relating to
exceptions) is amended to read as follows:
‘‘(B) so much of the contributions to 1 or
more defined contribution plans which are not
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deductible when contributed solely because of sec-
tion 404(a)(7) as does not exceed the greater of—
‘‘(i) the amount of contributions not in
excess of 6 percent of compensation (within
the meaning of section 404(a)) paid or ac-
crued (during the taxable year for which the
contributions were made) to beneficiaries
under the plans, or
‘‘(ii) the sum of—
‘‘(I) the amount of contributions
described in section 401(m)(4)(A), plus
‘‘(II) the amount of contributions
described in section 402(g)(3)(A).’’.
(b) EFFECTIVE DATE.—The amendments made by this
section shall apply to taxable years beginning after Decem-
ber 31, 1997.
SEC. 1311. MODIFICATION OF FUNDING REQUIREMENTS
FOR CERTAIN PLANS.
(a) FUNDING RULES FOR CERTAIN PLANS.—Section
769 of the Retirement Protection Act of 1994 is amended
by adding at the end the following new subsection:
‘‘(c) TRANSITION RULES FOR CERTAIN PLANS.—
‘‘(1) IN GENERAL.—In the case of a plan that—
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‘‘(A) was not required to pay a variable
rate premium for the plan year beginning in
1996;
‘‘(B) has not, in any plan year beginning
after 1995 and before 2009, merged with another
plan (other than a plan sponsored by an em-
ployer that was in 1996 within the controlled
group of the plan sponsor); and
‘‘(C) is sponsored by a company that is en-
gaged primarily in the interurban or interstate
passenger bus service,
the transition rules described in paragraph (2) shall
apply for any plan year beginning after 1996 and be-
fore 2010.
‘‘(2) TRANSITION RULES.—The transition rules
described in this paragraph are as follows:
‘‘(A) For purposes of section 412(l)(9)(A) of the
Internal 
Revenue 
Code 
of 
1986 
and 
section
302(d)(9)(A) of the Employee Retirement Income Se-
curity Act of 1974—
‘‘(i) the funded current liability percentage
for any plan year beginning after 1996 and be-
fore 2005 shall be treated as not less than 90 per-
cent if for such plan year the funded current li-
ability percentage is at least 85 percent, and
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‘‘(ii) the funded current liability percentage
for any plan year beginning after 2004 and be-
fore 2010 shall be treated as not less than 90 per-
cent if for such plan year the funded current li-
ability percentage satisfies the minimum per-
centage determined according to the following
table:
‘‘In the case of a plan year beginning in:
The minimum
percentage is:
2005 .......................................................................
86 percent
2006 .......................................................................
87 percent
2007 .......................................................................
88 percent
2008 .......................................................................
89 percent
2009 and thereafter ..............................................
90 percent.
‘‘(B) Sections 412(c)(7)(E)(i)(I) of such Code
and 302(c)(7)(E)(i)(I) of such Act shall be applied—
‘‘(i) by substituting ‘85 percent’ for ‘90 per-
cent’ for plan years beginning after 1996 and be-
fore 2005, and
‘‘(ii) by substituting the minimum percent-
age specified in the table contained in subpara-
graph (A)(ii) for ‘90 percent’ for plan years be-
ginning after 2004 and before 2010.
‘‘(C) In the event the funded current liability
percentage of a plan is less than 85 percent for any
plan year beginning after 1996 and before 2005, the
transition rules under subparagraphs (A) and (B)
shall continue to apply to the plan if contributions
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for such a plan year are made to the plan in an
amount equal to the lesser of—
‘‘(i) the amount necessary to result in a
funded current liability percentage of 85 percent,
or
‘‘(ii) the greater of—
‘‘(I) 2 percent of the plan’s current li-
ability as of the beginning of such plan
year, or
‘‘(II) the amount necessary to result in
a funded current liability percentage of 80
percent as of the end of such plan year.
For the plan year beginning in 2005 and for the 3
succeeding plan years, the transition rules under sub-
paragraphs (A) and (B) shall continue to apply to
the plan for such plan year only if contributions to
the plan equal at least the expected increase in cur-
rent liability due to benefits accruing during such
plan year.’’.
(b) EFFECTIVE DATE.—The amendment made by this
section shall apply to contributions due after December 31,
1997.
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TITLE XIV—TECHNICAL AMEND-
MENTS RELATED TO SMALL
BUSINESS JOB PROTECTION
ACT OF 1996 AND OTHER LEG-
ISLATION
SEC. 1401. AMENDMENTS RELATED TO SMALL BUSINESS
JOB PROTECTION ACT OF 1996.
(a) AMENDMENTS RELATED TO SUBTITLE A.—
(1) AMENDMENT RELATED TO SECTION 1116.—
Paragraph (1) of section 6050R(c) is amended by
striking ‘‘name and address’’ and inserting ‘‘name,
address, and phone number of the information con-
tact’’.
(2) AMENDMENT TO SECTION 1116.—Paragraphs
(1) and (2)(C) of section 1116(b) of the Small Busi-
ness Job Protection Act of 1996 shall each be applied
as if the reference to chapter 68 were a reference to
chapter 61.
(b) AMENDMENT RELATED TO SUBTITLE B.—Sub-
section (c) of section 52 is amended by striking ‘‘targeted
jobs credit’’ and inserting ‘‘work opportunity credit’’.
(c) AMENDMENTS RELATED TO SUBTITLE C.—
(1) AMENDMENT RELATED TO SECTION 1302.—
Subparagraph (B) of section 1361(e)(1) is amended
by striking ‘‘and’’ at the end of clause (i), striking the
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period at the end of clause (ii) and inserting ‘‘, and’’,
and adding at the end the following new clause:
‘‘(iii) any charitable remainder annu-
ity trust or charitable remainder unitrust
(as defined in section 664(d)).’’.
(2) EFFECTIVE DATE FOR SECTION 1307.—
(A) Notwithstanding section 1317 of the
Small Business Job Protection Act of 1996, the
amendments made by subsections (a) and (b) of
section 1307 of such Act shall apply to deter-
minations made after December 31, 1996.
(B) In no event shall the 120-day period re-
ferred to in section 1377(b)(1)(B) of the Internal
Revenue Code of 1986 (as added by such section
1307) expire before the end of the 120-day period
beginning on the date of the enactment of this
Act.
(3) AMENDMENT RELATED TO SECTION 1308.—
Subparagraph (A) of section 1361(b)(3) is amended
by striking ‘‘For purposes of this title’’ and inserting
‘‘Except as provided in regulations prescribed by the
Secretary, for purposes of this title’’.
(4) AMENDMENTS RELATED TO SECTION 1316.—
(A) Paragraph (2) of section 512(e) is
amended by striking ‘‘within the meaning of sec-
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tion 1012’’ and inserting ‘‘as defined in section
1361(e)(1)(C)’’.
(B) Paragraph (7) of section 1361(c) is re-
designated as paragraph (6).
(C) Subparagraph (B) of section 1361(b)(1)
is amended by striking ‘‘subsection (c)(7)’’ and
inserting ‘‘subsection (c)(6)’’.
(D) Paragraph (1) of section 512(e) is
amended by striking ‘‘section 1361(c)(7)’’ and
inserting ‘‘section 1361(e)(6)’’.
(d) AMENDMENTS RELATED TO SUBTITLE D.—
(1) AMENDMENTS RELATED TO SECTION 1421.—
(A) Subsection (i) of section 408 is amended
in the last sentence by striking ‘‘30 days’’ and
inserting ‘‘31 days’’.
(B) Subparagraph (H) of section 408(k)(6)
is amended by striking ‘‘if the terms of such pen-
sion’’ and inserting ‘‘of an employer if the terms
of simplified employee pensions of such em-
ployer’’.
(C)(i) 
Subparagraph 
(B) 
of 
section
408(l)(2) is amended—
(I) by inserting ‘‘and the issuer of an
annuity established under such an arrange-
ment’’ after ‘‘under subsection (p)’’, and
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(II) in clause (i), by inserting ‘‘or is-
suer’’ after ‘‘trustee’’.
(ii) Paragraph (2) of section 6693(c) is
amended—
(I) by inserting ‘‘or issuer’’ after
‘‘trustee’’, and
(II) in the heading, by inserting ‘‘AND
ISSUER’’ after ‘‘trustee’’.
(D) Subsection (p) of section 408 is amend-
ed by adding at the end the following new para-
graph:
‘‘(8) COORDINATION WITH MAXIMUM LIMITATION
UNDER SUBSECTION (a).—In the case of any simple
retirement account, subsections (a)(1) and (b)(2) shall
be applied by substituting ‘the sum of the dollar
amount in effect under paragraph (2)(A)(ii) of this
subsection and the employer contribution required
under subparagraph (A)(iii) or (B)(i) of paragraph
(2) of this subsection, whichever is applicable’ for
‘$2,000’.’’.
(E) Clause (i) of section 408(p)(2)(D) is
amended by adding at the end the following new
sentence: ‘‘If only individuals other than employ-
ees described in subparagraph (A) or (B) of sec-
tion 410(b)(3) are eligible to participate in such
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arrangement, then the preceding sentence shall be
applied without regard to any qualified plan in
which only employees so described are eligible to
participate.’’.
(F) Subparagraph (D) of section 408(p)(2)
is amended by adding at the end the following
new clause:
‘‘(iii) GRACE PERIOD.—In the case of
an employer who establishes and maintains
a plan under this subsection for 1 or more
years and who fails to meet any require-
ment of this subsection for any subsequent
year due to any acquisition, disposition, or
similar transaction involving another such
employer, rules similar to the rules of sec-
tion 410(b)(6)(C) shall apply for purposes
of this subparagraph.’’.
(G) Paragraph (5) of section 408(p) is
amended in the text preceding subparagraph (A)
by striking ‘‘simplified’’ and inserting ‘‘simple’’.
(2) AMENDMENTS RELATED TO SECTION 1422.—
(A) Clause (ii) of section 401(k)(11)(D) is
amended by striking the period and inserting ‘‘if
such plan allows only contributions required
under this paragraph.’’.
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(B) Paragraph (11) of section 401(k) is
amended by adding at the end the following new
subparagraph:
‘‘(E) COST-OF-LIVING
ADJUSTMENT.—The
Secretary shall adjust the $6,000 amount under
subparagraph (B)(i)(I) at the same time and in
the 
same 
manner 
as 
under 
section
408(p)(2)(E).’’.
(C) Subparagraph (A) of section 404(a)(3)
is amended—
(i) in clause (i), by striking ‘‘not in ex-
cess of’’ and all that follows and inserting
the following: ‘‘not in excess of the greater
of—
‘‘(I) 15 percent of the compensa-
tion otherwise paid or accrued during
the taxable year to the beneficiaries
under the stock bonus or profit-sharing
plan, or
‘‘(II) the amount such employer is
required to contribute to such trust
under section 401(k)(11) for such
year.’’, and
(ii) in clause (ii), by striking ‘‘15 per-
cent’’ and all that follows and inserting the
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following ‘‘the amount described in sub-
clause (I) or (II) of clause (i), whichever is
greater, with respect to such taxable year.’’.
(D) Subparagraph (B) of section 401(k)(11)
is amended by adding at the end the following
new clause:
‘‘(iii) 
ADMINISTRATIVE
REQUIRE-
MENTS.—
‘‘(I) IN GENERAL.—Rules similar
to the rules of subparagraphs (B) and
(C) of section 408(p)(5) shall apply for
purposes of this subparagraph.
‘‘(II) NOTICE
OF
ELECTION
PE-
RIOD.—The requirements of this sub-
paragraph shall not be treated as met
with respect to any year unless the em-
ployer notifies each employee eligible to
participate, within a reasonable period
of time before the 60th day before the
beginning of such year (and, for the
first year the employee is so eligible,
the 60th day before the first day such
employee is so eligible), of the rules
similar 
to 
the 
rules 
of 
section
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408(p)(5)(C) which apply by reason of
subclause (I).’’.
(3) AMENDMENT RELATED TO SECTION 1433.—
The heading of paragraph (11) of section 401(m) is
amended by striking ‘‘ALTERNATIVE’’ and inserting
‘‘ADDITIONAL ALTERNATIVE’’.
(4) AMENDMENTS RELATED TO SECTION 1461.—
(A) Section 415(e)(5)(A) is amended to read
as follows:
‘‘(A) CERTAIN
MINISTERS
MAY
PARTICI-
PATE.—For purposes of this part—
‘‘(i) IN GENERAL.—A duly ordained,
commissioned, or licensed minister of a
church is described in paragraph (3)(B) if,
in connection with the exercise of their min-
istry, the minister—
‘‘(I) is a self-employed individual
(within 
the 
meaning 
of 
section
401(c)(1)(B), or
‘‘(II) is employed by an organiza-
tion other than an organization which
is described in section 501(c)(3) and
with respect to which the minister
shares common religious bonds.
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‘‘(ii) TREATMENT AS EMPLOYER AND
EMPLOYEE.—For 
purposes 
of 
sections
403(b)(1)(A) and 404(a)(10), a minister de-
scribed in clause (i)(I) shall be treated as
employed by the minister’s own employer
which is an organization described in sec-
tion 501(c)(3) and exempt from tax under
section 501(a).’’.
(B) Section 403(b)(1)(A) is amended by
striking ‘‘or’’ at the end of clause (i), by insert-
ing ‘‘or’’ at the end of clause (ii), and by adding
at the end the following new clause:
‘‘(iii) for the minister described in sec-
tion 415(e)(5)(A) by the minister or by an
employer,’’.
(5) AMENDMENT RELATED TO SECTION 1462.—
The paragraph (7) of section 414(q) added by section
1462 of the Small Business Job Protection Act of
1996 is redesignated as paragraph (9).
(6) CLARIFICATION OF SECTION 1450.—
(A) Section 403(b)(11) of the Internal Reve-
nue Code of 1986 shall not apply with respect to
a distribution from a contract described in sec-
tion 1450(b)(1) of such Act to the extent that
such distribution is not includible in income by
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reason of section 403(b)(8) of such Code (deter-
mined after the application of section 1450(b)(2)
of such Act).
(B) This paragraph shall apply as if in-
cluded in section 1450 of the Small Business Job
Protection Act of 1996.
(e) AMENDMENT RELATED TO SUBTITLE E.—Sub-
paragraph (A) of section 956(b)(1) is amended by inserting
‘‘to the extent such amount was accumulated in prior tax-
able years’’ after ‘‘section 316(a)(1)’’.
(f) AMENDMENTS RELATED TO SUBTITLE F.—
(1) AMENDMENTS RELATED TO SECTION 1601.—
(A) The heading of section 30A is amended
to read as follows:
‘‘SEC. 30A. PUERTO RICO ECONOMIC ACTIVITY CREDIT.’’.
(B) The table of sections for subpart B of
part IV of subchapter A of chapter 1 is amended
in the item relating to section 30A by striking
‘‘Puerto Rican’’ and inserting ‘‘Puerto Rico’’.
(C) Paragraph (1) of section 55(c) is
amended by striking ‘‘Puerto Rican’’ and insert-
ing ‘‘Puerto Rico’’.
(2) AMENDMENTS RELATED TO SECTION 1606.—
(A) Clause (ii) of section 9503(c)(2)(A) is
amended by striking ‘‘(or with respect to quali-
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fied diesel-powered highway vehicles purchased
before January 1, 1999)’’.
(B) Subparagraph (A) of section 9503(e)(5)
is amended by striking ‘‘; except that’’ and all
that follows and inserting a period.
(3) AMENDMENTS RELATED TO SECTION 1607.—
(A) Subsection (f) of section 4001 (relating
to phasedown of tax on luxury passenger auto-
mobiles) is amended—
(i) by inserting ‘‘and section 4003(a)’’
after ‘‘subsection (a)’’, and
(ii) by inserting ‘‘, each place it ap-
pears,’’ before ‘‘the percentage’’.
(B) Subsection (g) of section 4001 (relating
to termination) is amended by striking ‘‘tax im-
posed by this section’’ and inserting ‘‘taxes im-
posed by this section and section 4003’’ and by
striking ‘‘or use’’ and inserting ‘‘, use, or instal-
lation’’.
(4) AMENDMENTS RELATED TO SECTION 1609.—
(A) Subsection (l) of section 4041 is amend-
ed—
(i) by inserting ‘‘or a fixed-wing air-
craft’’ after ‘‘helicopter’’, and
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(ii) in the heading, by striking ‘‘HELI-
COPTER’’.
(B) The last sentence of section 4041(a)(2)
is amended by striking ‘‘section 4081(a)(2)(A)’’
and inserting ‘‘section 4081(a)(2)(A)(i)’’.
(C) Subsection (b) of section 4092 is amend-
ed by striking ‘‘section 4041(c)(4)’’ and inserting
‘‘section 4041(c)(2)’’.
(D) Subsection (g) of section 4261 (as redes-
ignated by title X) is amended by inserting ‘‘on
that flight’’ after ‘‘dedicated’’.
(E) Paragraph (1) of section 1609(h) of
such Act is amended by striking ‘‘paragraph
(3)(A)(i)’’ and inserting ‘‘paragraph (3)(A)’’.
(F) Paragraph (4) of section 1609(h) of
such Act is amended by inserting before the pe-
riod ‘‘or exclusively for the use described in sec-
tion 4092(b) of such Code’’.
(5) AMENDMENTS RELATED TO SECTION 1616.—
(A) Subparagraph (A) of section 593(e)(1)
is amended by inserting ‘‘(and, in the case of an
S corporation, the accumulated adjustments ac-
count, as defined in section 1368(e)(1))’’ after
‘‘1951,’’.
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(B) Paragraph (7) of section 1374(d) is
amended by adding at the end the following new
sentence: ‘‘For purposes of applying this section
to any amount includible in income by reason of
section 593(e), the preceding sentence shall be ap-
plied without regard to the phrase ‘10-year’.’’.
(6) AMENDMENTS RELATED TO SECTION 1621.—
(A) Subparagraph (A) of section 860L(b)(1)
is amended in the text preceding clause (i) by
striking ‘‘after the startup date’’ and inserting
‘‘on or after the startup date’’.
(B) Paragraph (2) of section 860L(d) is
amended by striking ‘‘section 860I(c)(2)’’ and
inserting ‘‘section 860I(b)(2)’’.
(C) Subparagraph (B) of section 860L(e)(2)
is amended by inserting ‘‘other than foreclosure
property’’ after ‘‘any permitted asset’’.
(D) Subparagraph (A) of section 860L(e)(3)
is amended by striking ‘‘if the FASIT’’ and all
that follows and inserting the following new flush
text after clause (ii):
‘‘if the FASIT were treated as a REMIC and
permitted assets (other than cash or cash equiva-
lents) were treated as qualified mortgages.’’.
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(E)(i) Paragraph (3) of section 860L(e) is
amended by adding at the end the following new
subparagraph:
‘‘(D) 
INCOME
FROM
DISPOSITIONS
OF
FORMER
HEDGE
ASSETS.—Paragraph (2)(A)
shall not apply to income derived from the dis-
position of—
‘‘(i) an asset which was described in
subsection (c)(1)(D) when first acquired by
the FASIT but on the date of such disposi-
tion was no longer described in subsection
(c)(1)(D)(ii), or
‘‘(ii) a contract right to acquire an
asset described in clause (i).’’.
(ii) Subparagraph (A) of section 860L(e)(2)
is amended by inserting ‘‘except as provided in
paragraph (3),’’ before ‘‘the receipt’’.
(g) AMENDMENTS RELATED TO SUBTITLE G.—
(1) EXTENSION OF PERIOD FOR CLAIMING RE-
FUNDS FOR ALCOHOL FUELS.—Notwithstanding sec-
tion 6427(i)(3)(C) of the Internal Revenue Code of
1986, a claim filed under section 6427(f) of such Code
for any period after September 30, 1995, and before
October 1, 1996, shall be treated as timely filed if
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filed before the 60th day after the date of the enact-
ment of this Act.
(2) AMENDMENTS TO SECTIONS 1703 AND 1704.—
Sections 1703(n)(8) and 1704(j)(4)(B) of the Small
Business Job Protection Act of 1996 shall each be ap-
plied as if such sections referred to section 1702 in-
stead of section 1602.
(h) AMENDMENTS RELATED TO SUBTITLE H.—
(1) AMENDMENTS RELATED TO SECTION 1806.—
(A) Subparagraph (B) of section 529(e)(1)
is amended by striking ‘‘subsection (c)(2)(C)’’
and inserting ‘‘subsection (c)(3)(C)’’.
(B) Subparagraph (C) of section 529(e)(1)
is amended by inserting ‘‘(or agency or instru-
mentality thereof)’’ after ‘‘local government’’.
(C) Paragraph (2) of section 1806(c) of the
Small Business Job Protection Act of 1996 is
amended by striking so much of the first sentence
as follows subparagraph (B)(ii) and inserting
the following:
‘‘then such program (as in effect on August 20, 1996)
shall be treated as a qualified State tuition program
with respect to contributions (and earnings allocable
thereto) pursuant to contracts entered into under such
program before the first date on which such program
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meets such requirements (determined without regard
to this paragraph) and the provisions of such pro-
gram (as so in effect) shall apply in lieu of section
529(b) of the Internal Revenue Code of 1986 with re-
spect to such contributions and earnings.’’.
(2) AMENDMENTS RELATED TO SECTION 1807.—
(A) Paragraph (2) of section 23(a) is
amended to read as follows:
‘‘(2) YEAR CREDIT ALLOWED.—The credit under
paragraph (1) with respect to any expense shall be al-
lowed—
‘‘(A) in the case of any expense paid or in-
curred before the taxable year in which such
adoption becomes final, for the taxable year fol-
lowing the taxable year during which such ex-
pense is paid or incurred, and
‘‘(B) in the case of an expense paid or in-
curred during or after the taxable year in which
such adoption becomes final, for the taxable year
in which such expense is paid or incurred.’’.
(B) Subparagraph (B) of section 23(b)(2) is
amended by striking ‘‘determined—’’ and all
that follows and inserting the following: ‘‘deter-
mined without regard to sections 911, 931, and
933.’’.
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(C) Paragraph (1) of section 137(b) (relat-
ing to adoption assistance programs) is amended
by striking ‘‘amount excludable from gross in-
come’’ and inserting ‘‘of the amounts paid or ex-
penses incurred which may be taken into ac-
count’’.
(D)(i) 
Subparagraph 
(C) 
of 
section
414(n)(3) is amended by inserting ‘‘137,’’ after
‘‘132,’’.
(ii) Paragraph (2) of section 414(t) is
amended by inserting ‘‘137,’’ after ‘‘132,’’.
(iii) Paragraph (1) of section 6039D(d) is
amended by striking ‘‘or 129’’ and inserting
‘‘129, or 137’’.
(i) AMENDMENTS RELATED TO SUBTITLE I.—
(1) AMENDMENT RELATED TO SECTION 1901.—
Subsection (b) of section 6048 is amended in the
heading by striking ‘‘GRANTOR’’ and inserting
‘‘OWNER’’.
(2) AMENDMENTS RELATED TO SECTION 1903.—
Clauses (ii) and (iii) of section 679(a)(3)(C)
are each amended by inserting ‘‘, owner,’’ after
‘‘grantor’’.
(3) AMENDMENTS RELATED TO SECTION 1907.—
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(A) Clause (ii) of section 7701(a)(30)(E) is
amended by striking ‘‘fiduciaries’’ and inserting
‘‘persons’’.
(B) Subsection (b) of section 641 is amend-
ed by adding at the end the following new sen-
tence: ‘‘For purposes of this subsection, a foreign
trust or foreign estate shall be treated as a non-
resident alien individual who is not present in
the United States at any time.’’.
(4) EFFECTIVE DATE RELATED
TO SUBTITLE
I.—The Secretary of the Treasury may by regulations
or other administrative guidance provide that the
amendments made by section 1907(a) of the Small
Business Job Protection Act of 1996 shall not apply
to a trust with respect to a reasonable period begin-
ning on the date of the enactment of such Act, if—
(A) such trust is in existence on August 20,
1996, and is a United States person for purposes
of the Internal Revenue Code of 1986 on such
date (determined without regard to such amend-
ments),
(B) no election is in effect under section
1907(a)(3)(B) of such Act with respect to such
trust,
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(C) before the expiration of such reasonable
period, such trust makes the modifications nec-
essary to be treated as a United States person for
purposes of such Code (determined with regard
to such amendments), and
(D) such trust meets such other conditions
as the Secretary may require.
(j) EFFECTIVE DATE.—
(1) IN GENERAL.—Except as provided in para-
graph (2), the amendments made by this section shall
take effect as if included in the provisions of the
Small Business Job Protection Act of 1996 to which
they relate.
(2) CERTAIN
ADMINISTRATIVE
REQUIREMENTS
WITH
RESPECT
TO
CERTAIN
PENSION
PLANS.—The
amendment made by subsection (d)(2)(D) shall apply
to calendar years beginning after the date of the en-
actment of this Act.
SEC. 1402. AMENDMENTS RELATED TO HEALTH INSURANCE
PORTABILITY AND ACCOUNTABILITY ACT OF
1996.
(a) AMENDMENTS RELATED TO SECTION 301.—
(1) Paragraph (2) of section 26(b) is amended by
striking ‘‘and’’ at the end of subparagraph (N), by
striking the period at the end of subparagraph (O)
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and inserting ‘‘, and’’, and by adding at the end the
following new subparagraph:
‘‘(P) section 220(f)(4) (relating to addi-
tional tax on medical savings account distribu-
tions not used for qualified medical expenses).’’.
(2) Paragraph (3) of section 220(c) is amended
by striking subparagraph (A) and redesignating sub-
paragraphs (B) through (D) as subparagraphs (A)
through (C), respectively.
(3) Subparagraph (C) of section 220(d)(2) is
amended by striking ‘‘an eligible individual’’ and in-
serting ‘‘described in clauses (i) and (ii) of subsection
(c)(1)(A)’’.
(4) Subsection (a) of section 6693 is amended by
adding at the end the following new sentence:
‘‘This subsection shall not apply to any report which is an
information return described in section 6724(d)(1)(C)(i) or
a payee statement described in section 6724(d)(2)(X).’’.
(5) Paragraph (4) of section 4975(d) is amended
by striking ‘‘if, with respect to such transaction’’ and
all that follows and inserting the following: ‘‘if section
220(e)(2) applies to such transaction.’’.
(b) AMENDMENT RELATED TO SECTION 321.—Sub-
paragraph (B) of section 7702B(c)(2) is amended in the
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last sentence by inserting ‘‘described in subparagraph
(A)(i)’’ after ‘‘chronically ill individual’’.
(c) AMENDMENT RELATED TO SECTION 322.—Sub-
paragraph (B) of section 162(l)(2) is amended by adding
at the end the following new sentence: ‘‘The preceding sen-
tence shall be applied separately with respect to—
‘‘(i) plans which include coverage for
qualified long-term care services (as defined
in section 7702B(c)) or are qualified long-
term care insurance contracts (as defined in
section 7702B(b)), and
‘‘(ii) plans which do not include such
coverage and are not such contracts.’’.
(d) AMENDMENTS RELATED TO SECTION 323.—
(1) Paragraph (1) of section 6050Q(b) is amend-
ed by inserting ‘‘, address, and phone number of the
information contact’’ after ‘‘name’’.
(2)(A) Paragraph (2) of section 6724(d) is
amended by striking so much as follows subparagraph
(Q) and precedes the last sentence, and inserting the
following new subparagraphs:
‘‘(R) section 6050R(c) (relating to returns
relating to certain purchases of fish),
‘‘(S) section 6051 (relating to receipts for
employees),
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(1) Paragraph (4) of section 264(a) is amended
by striking subparagraph (A) and all that follows
through ‘‘by the taxpayer.’’ and inserting the follow-
ing:
‘‘(A) is or was an officer or employee, or
‘‘(B) is or was financially interested in,
any trade or business carried on (currently or for-
merly) by the taxpayer.’’.
(2) 
The 
last 
sentences 
of 
section
264(d)(2)(B)(ii) are amended to read as follows:
‘‘For purposes of subclause (II), the term
‘applicable period’ means the 12-month pe-
riod beginning on the date the policy is is-
sued (and each successive 12-month period
thereafter) unless the taxpayer elects a num-
ber of months (not greater than 12) other
than such 12-month period to be its appli-
cable period. Such an election shall be made
not later than the 90th day after the date
of the enactment of this sentence and, if
made, shall apply to the taxpayer’s first
taxable year ending on or after October 13,
1995, and all subsequent taxable years un-
less revoked with the consent of the Sec-
retary.’’.
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(3) Subparagraph (B) of section 264(d)(4) is
amended by striking ‘‘the employer’’ and inserting
‘‘the taxpayer’’.
(4) Subsection (c) of section 501 of the Health
Insurance Portability and Accountability Act of 1996
is amended by striking paragraph (3).
(5) Paragraph (2) of section 501(d) of such Act
is amended by striking ‘‘no additional premiums’’
and all that follows and inserting the following: ‘‘a
lapse occurring by reason of no additional premiums
being received under the contract after October 13,
1995.’’.
(g) AMENDMENTS RELATED TO SECTION 511.—
(1) Subparagraph (B) of section 877(d)(2) is
amended by striking ‘‘the 10-year period described in
subsection (a)’’ and inserting ‘‘the 10-year period be-
ginning on the date the individual loses United States
citizenship’’.
(2) Subparagraph (D) of section 877(d)(2) is
amended by adding at the end the following new sen-
tence: ‘‘In the case of any exchange occurring during
such 5 years, any gain recognized under this subpara-
graph shall be recognized immediately after such loss
of citizenship.’’.
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(3) Paragraph (3) of section 877(d) is amended
by inserting ‘‘and the period applicable under para-
graph (2)’’ after ‘‘subsection (a)’’.
(4) Subparagraph (A) of section 877(d)(4) is
amended—
(A) by inserting ‘‘during the 10-year period
beginning on the date the individual loses United
States citizenship’’ after ‘‘contributes property’’
in clause (i),
(B) by inserting ‘‘immediately before such
contribution’’ after ‘‘from such property’’, and
(C) by striking ‘‘during the 10-year period
referred to in subsection (a),’’.
(5) Subparagraph (C) of section 2501(a)(3) is
amended by striking ‘‘decedent’’ and inserting
‘‘donor’’.
(6)(A) Clause (i) of section 2107(c)(2)(A) is
amended by striking ‘‘such foreign country in respect
of property included in the gross estate’’ and inserting
‘‘such foreign country’’.
(B) Subparagraph (C) of section 2107(c)(2) is
amended to read as follows:
‘‘(C) PROPORTIONATE SHARE.—In the case
of property which is included in the gross estate
solely by reason of subsection (b), such property’s
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proportionate share is the percentage which the
value of such property bears to the total value of
all property included in the gross estate solely by
reason of subsection (b).’’.
(h) AMENDMENTS RELATED TO SECTION 512.—
(1) Subpart A of part III of subchapter A of
chapter 61 is amended by redesignating the section
6039F added by section 512 of the Health Insurance
Portability and Accountability Act of 1996 as section
6039G and by moving such section 6039G to imme-
diately after the section 6039F added by section 1905
of the Small Business Job Protection Act of 1996.
(2) The table of sections for subpart A of part III
of subchapter A of chapter 61 is amended by striking
the item relating to the section 6039F related to infor-
mation on individuals losing United States citizen-
ship and inserting after the item relating to the sec-
tion 6039F related to notice of large gifts received
from foreign persons the following new item:
‘‘Sec. 6039G. Information on individuals losing United States citi-
zenship.’’.
(3) Paragraph (1) of section 877(e) is amended
by striking ‘‘6039F’’ and inserting ‘‘6039G’’.
(i) EFFECTIVE DATE.—The amendments made by this
section shall take effect as if included in the provisions of
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the Health Insurance Portability and Accountability Act
of 1996 to which such amendments relate.
SEC. 1403. AMENDMENTS RELATED TO TAXPAYER BILL OF
RIGHTS 2.
(a) AMENDMENT RELATED TO SECTION 1311.—Sub-
section (b) of section 4962 is amended by striking ‘‘sub-
chapter A or C’’ and inserting ‘‘subchapter A, C, or D’’.
(b) AMENDMENTS RELATED TO SECTION 1312.—
(1)(A) Paragraph (10) of section 6033(b) is
amended by striking all that precedes subparagraph
(A) and inserting the following:
‘‘(10) the respective amounts (if any) of the taxes
imposed on the organization, or any organization
manager of the organization, during the taxable year
under any of the following provisions (and the respec-
tive amounts (if any) of reimbursements paid by the
organization during the taxable year with respect to
taxes imposed on any such organization manager
under any of such provisions):’’.
(B) Subparagraph (C) of section 6033(b)(10) is
amended by adding at the end the following: ‘‘except
to the extent that, by reason of section 4962, the taxes
imposed under such section are not required to be
paid or are credited or refunded,’’.
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(2) Paragraph (11) of section 6033(b) is amend-
ed to read as follows:
‘‘(11) the respective amounts (if any) of—
‘‘(A) the taxes imposed with respect to the
organization on any organization manager, or
any disqualified person, during the taxable year
under section 4958 (relating to taxes on private
excess benefit from certain charitable organiza-
tions), and
‘‘(B) reimbursements paid by the organiza-
tion during the taxable year with respect to taxes
imposed under such section,
except to the extent that, by reason of section 4962,
the taxes imposed under such section are not required
to be paid or are credited or refunded,’’.
(c) EFFECTIVE DATE.—The amendments made by this
section shall take effect as if included in the provisions of
the Taxpayer Bill of Rights 2 to which such amendments
relate.
SEC. 1404. MISCELLANEOUS PROVISIONS.
(a) AMENDMENTS RELATED TO ENERGY POLICY ACT
OF 1992.—
(1) Paragraph (1) of section 263(a) is amended
by striking ‘‘or’’ at the end of subparagraph (F), by
striking the period at the end of subparagraph (G)
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and inserting ‘‘; or’’, and by adding at the end the
following new subparagraph:
‘‘(H) expenditures for which a deduction is
allowed under section 179A.’’.
(2) Subparagraph (B) of section 312(k)(3) is
amended—
(A) by striking ‘‘179’’ in the heading and
the first place it appears in the text and insert-
ing ‘‘179 or 179A’’, and
(B) by striking ‘‘179’’ the last place it ap-
pears and inserting ‘‘179 or 179A, as the case
may be’’.
(3) Paragraphs (2)(C) and (3)(C) of section
1245(a) are each amended by inserting ‘‘179A,’’ after
‘‘179,’’.
(4) The amendments made by this subsection
shall take effect as if included in the amendments
made by section 1913 of the Energy Policy Act of
1992.
(b) AMENDMENTS RELATED
TO URUGUAY ROUND
AGREEMENTS ACT.—
(1) Paragraph (1) of section 6621(a) is amended
in the last sentence by striking ‘‘subsection (c)(3))’’
and inserting ‘‘subsection (c)(3), applied by substitut-
ing ‘overpayment’ for ‘underpayment’)’’.
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(2) Subclause (II) of section 412(m)(5)(E)(ii) is
amended by striking ‘‘clause (i)’’ and inserting ‘‘sub-
clause (I)’’.
(3) Subparagraph (A) of section 767(d)(3) of the
Uruguay Round Agreements Act is amended in the
last sentence by striking ‘‘(except that’’ and all that
follows through ‘‘into account)’’.
(4) The amendments made by this subsection
shall take effect as if included in the sections of the
Uruguay Round Agreements Act to which they relate.
(c) AMENDMENT RELATED TO TAX REFORM ACT OF
1986.—Paragraph (3) of section 1059(d) is amended by
striking ‘‘subsection (a)(2)’’ and inserting ‘‘subsection (a)’’.
(d) AMENDMENT RELATED TO TAX REFORM ACT OF
1984.—
(1) Section 267(f) is amended by adding at the
end the following new paragraph:
‘‘(4) DETERMINATION
OF
RELATIONSHIP
RE-
SULTING IN DISALLOWANCE OF LOSS, FOR PURPOSES
OF OTHER PROVISIONS.—For purposes of any other
section of this title which refers to a relationship
which would result in a disallowance of losses under
this section, deferral under paragraph (2) shall be
treated as disallowance.’’.
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(2) EFFECTIVE DATE.—The amendment made
by paragraph (1) shall take effect as if included in
section 174(b) of the Tax Reform Act of 1984.
(e) CLERICAL AMENDMENTS.—
(1) Clause (iii) of section 163(j)(2)(B) is amend-
ed by striking ‘‘clause (i)’’ and inserting ‘‘clause
(ii)’’.
(2) Paragraph (1) of section 665(d) is amended
in the last sentence by striking ‘‘or 669(d) and (e)’’.
(3) Subsection (g) of section 1441 (relating to
cross reference) is amended by striking ‘‘one-half’’ and
inserting ‘‘85 percent’’.
(4) Paragraph (1) of section 2523(g) is amended
by striking ‘‘qualified remainder trust’’ and inserting
‘‘qualified charitable remainder trust’’.
(5) Subsection (d) of section 9502 is amended by
redesignating the paragraph added by section 806 of
the Federal Aviation Reauthorization Act of 1996 as
paragraph (6).
TITLE XV—CHILDREN’S HEALTH
INSURANCE INITIATIVES
SEC. 1501. ESTABLISHMENT OF CHILDREN’S HEALTH IN-
SURANCE INITIATIVES.
(a) IN GENERAL.—The Social Security Act is amend-
ed by adding at the end the following:
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‘‘TITLE XXI—CHILD HEALTH INSURANCE
INITIATIVES
‘‘SEC. 2101. PURPOSE.
‘‘The purpose of this title is to provide funds to States
to enable such States to expand the provision of health in-
surance coverage for low-income children. Funds provided
under this title shall be used to achieve this purpose through
outreach activities described in section 2106(a) and, at the
option of the State through—
‘‘(1) a grant program conducted in accordance
with section 2107 and the other requirements of this
title; or
‘‘(2) expansion of coverage of such children
under the State medicaid program who are not re-
quired to be provided medical assistance under section
1902(l) (taking into account the process of individ-
uals aging into eligibility under subsection (l)(1)(D)).
‘‘SEC. 2102. DEFINITIONS.
‘‘In this title:
‘‘(1) BASE-YEAR
COVERED
LOW-INCOME
CHILD
POPULATION.—The term ‘base-year covered low-in-
come child population’ means the total number of
low-income children with respect to whom, as of fiscal
year 1996, an eligible State provides or pays the cost
of health benefits either through a State funded pro-
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gram or through expanded eligibility under the State
plan under title XIX (including under a waiver of
such plan), as determined by the Secretary. Such
term does not include any low-income child described
in paragraph (3)(A) that a State must cover in order
to be considered an eligible State under this title.
‘‘(2) CHILD.—The term ‘child’ means an indi-
vidual under 19 years of age.
‘‘(3) ELIGIBLE STATE.—The term ‘eligible State’
means, with respect to a fiscal year, a State that—
‘‘(A) provides, under section 1902(l)(1)(D)
or under a waiver, for eligibility for medical as-
sistance under a State plan under title XIX of
individuals under 17 years of age in fiscal year
1998, and under 19 years of age in fiscal year
2000, regardless of date of birth;
‘‘(B) has submitted to the Secretary under
section 2104 a program outline that—
‘‘(i) sets forth how the State intends to
use the funds provided under this title to
provide health insurance coverage for low-
income children consistent with the provi-
sions of this title; and
‘‘(ii) is approved under section 2104;
and
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‘‘(iii) otherwise satisfies the require-
ments of this title; and
‘‘(C) satisfies the maintenance of effort re-
quirement described in section 2105(c)(5).
‘‘(4) FEDERAL MEDICAL ASSISTANCE PERCENT-
AGE.—The term ‘Federal medical assistance percent-
age’ means, with respect to a State, the meaning
given that term under section 1905(b). Any cost-shar-
ing imposed under this title may not be included in
determining Federal medical assistance percentage for
reimbursement of expenditures under a State program
funded under this title.
‘‘(5) FEHBP-EQUIVALENT CHILDREN’S HEALTH
INSURANCE
COVERAGE.—The term ‘FEHBP-equiva-
lent children’s health insurance coverage’ means, with
respect to a State, any plan or arrangement that pro-
vides, or pays the cost of, health benefits that the Sec-
retary has certified are equivalent to or better than
the services covered for a child, including hearing and
vision services, under the standard Blue Cross/Blue
Shield preferred provider option service benefit plan
offered under chapter 89 of title 5, United States
Code.
‘‘(6) INDIANS.—The term ‘Indians’ has the
meaning given that term in section 4(c) of the Indian
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Health Care Improvement Act (25 U.S.C. 1601 et
seq.).
‘‘(7) LOW-INCOME CHILD.—The term ‘low-income
child’ means a child in a family whose income is
below 200 percent of the poverty line for a family of
the size involved.
‘‘(8) POVERTY
LINE.—The term ‘poverty line’
has the meaning given that term in section 673(2) of
the Community Services Block Grant Act (42 U.S.C.
9902(2)), including any revision required by such sec-
tion.
‘‘(9) SECRETARY.—The term ‘Secretary’ means
the Secretary of Health and Human Services.
‘‘(10) STATE.—The term ‘State’ means each of
the 50 States, the District of Columbia, Puerto Rico,
Guam, the Virgin Islands, American Samoa, and the
Northern Mariana Islands.
‘‘(11) STATE
CHILDREN’S
HEALTH
EXPENDI-
TURES.—The term ‘State children’s health expendi-
tures’ means the State share of expenditures by the
State for providing children with health care items
and services under—
‘‘(A) the State plan for medical assistance
under title XIX;
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‘‘(B) the maternal and child health services
block grant program under title V;
‘‘(C) the preventive health services block
grant program under part A of title XIX of the
Public Health Services Act (42 U.S.C. 300w et
seq.);
‘‘(D) State-funded programs that are de-
signed to provide health care items and services
to children;
‘‘(E) school-based health services programs;
‘‘(F) State programs that provide uncom-
pensated or indigent health care;
‘‘(G) county-indigent care programs for
which the State requires a matching share by a
county government or for which there are inter-
governmental transfers from a county to State
government; and
‘‘(H) any other program under which the
Secretary determines the State incurs uncompen-
sated expenditures for providing children with
health care items and services.
‘‘(12) STATE
MEDICAID
PROGRAM.—The term
‘State medicaid program’ means the program of med-
ical assistance provided under title XIX.
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‘‘SEC. 2103. APPROPRIATION.
‘‘(a) APPROPRIATION.—
‘‘(1) IN GENERAL.—Subject to subsection (b), out
of any money in the Treasury of the United States
not otherwise appropriated, there is appropriated for
the purpose of carrying out this title—
‘‘(A) for each of fiscal years 1998 and 1999,
$1,000,000,000;
‘‘(B) for each of fiscal years 2000 through
2002, $2,000,000,000; and
‘‘(C) for each of fiscal years 2003 through
2007, $0.
‘‘(2) AVAILABILITY.—Funds appropriated under
this section shall remain available without fiscal year
limitation, as provided under section 2105(b)(4).
‘‘(b) REDUCTION FOR INCREASED MEDICAID EXPENDI-
TURES.—With respect to each of the fiscal years described
in subsection (a)(1), the amount appropriated under sub-
section (a)(1) for each such fiscal year shall be reduced by
an amount equal to the amount of the total Federal outlays
under the medicaid program under title XIX resulting
from—
‘‘(1) the amendment made by section 5732 of the
Balanced Budget Act of 1997 (regarding the State op-
tion to provide 12-month continuous eligibility for
children);
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‘‘(2) increased enrollment under State plans ap-
proved under such program as a result of outreach ac-
tivities under section 2106(a); and
‘‘(3) the requirement under section 2102(3)A) to
provide eligibility for medical assistance under the
State plan under title XIX for all children under 19
years of age who have families with income that is at
or below the poverty line.
‘‘(c) STATE
ENTITLEMENT.—This title constitutes
budget authority in advance of appropriations Acts and
represents the obligation of the Federal Government to pro-
vide for the payment to States of amounts provided in ac-
cordance with the provisions of this title.
‘‘(d) EFFECTIVE DATE.—No State is eligible for pay-
ments under section 2105 for any calendar quarter begin-
ning before October 1, 1997.
‘‘SEC. 2104. PROGRAM OUTLINE.
‘‘(a) GENERAL DESCRIPTION.—A State shall submit to
the Secretary for approval a program outline, consistent
with the requirements of this title, that—
‘‘(1) identifies, on or after the date of enactment
of the Balanced Budget Act of 1997, which of the 2
options described in section 2101 the State intends to
use to provide low-income children in the State with
health insurance coverage;
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‘‘(2) describes the manner in which such coverage
shall be provided; and
‘‘(3) provides such other information as the Sec-
retary may require.
‘‘(b) OTHER REQUIREMENTS.—The program outline
submitted under this section shall include the following:
‘‘(1) ELIGIBILITY STANDARDS AND METHODOLO-
GIES.—A summary of the standards and methodolo-
gies used to determine the eligibility of low-income
children for health insurance coverage under a State
program funded under this title.
‘‘(2) ELIGIBILITY
SCREENING; 
COORDINATION
WITH OTHER HEALTH COVERAGE.—A description of
the procedures to be used to ensure—
‘‘(A) through both intake and followup
screening, that only low-income children are fur-
nished health insurance coverage through funds
provided under this title; and
‘‘(B) that any health insurance coverage
provided for children through funds under this
title does not reduce the number of children who
are provided such coverage through any other
publicly or privately funded health plan.
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‘‘(3) INDIANS.—A description of how the State
will ensure that Indians are served through a State
program funded under this title.
‘‘(c) DEADLINE FOR SUBMISSION.—A State program
outline shall be submitted to the Secretary by not later than
March 31 of any fiscal year (October 1, 1997, in the case
of fiscal year 1998).
‘‘SEC. 2105. DISTRIBUTION OF FUNDS.
‘‘(a) ESTABLISHMENT OF FUNDING POOLS.—
‘‘(1) IN
GENERAL.—From the amount appro-
priated under section 2103(a)(1) for each fiscal year,
determined after the reduction required under section
2103(b), the Secretary shall, for purposes of fiscal
year 1998, reserve 85 percent of such amount for dis-
tribution to eligible States through the basic allotment
pool under subsection (b) and 15 percent of such
amount for distribution through the new coverage in-
centive pool under subsection (c)(2)(B)(ii).
‘‘(2) ANNUAL
ADJUSTMENT
OF
RESERVE
PER-
CENTAGES.—The Secretary shall annually adjust the
amount of the percentages described in paragraph (1)
in order to provide sufficient basic allotments and
sufficient new coverage incentives to achieve the pur-
pose of this title.
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‘‘(b) DISTRIBUTION OF FUNDS UNDER THE BASIC AL-
LOTMENT POOL.—
‘‘(1) STATES.—
‘‘(A) IN GENERAL.—From the total amount
reserved under subsection (a) for a fiscal year for
distribution through the basic allotment pool, the
Secretary shall first set aside 0.25 percent for
distribution under paragraph (2) and shall allot
from the amount remaining to each eligible State
not described in such paragraph the State’s allot-
ment percentage for such fiscal year.
‘‘(B) STATE’S ALLOTMENT PERCENTAGE.—
‘‘(i) IN
GENERAL.—For purposes of
subparagraph (A), the allotment percentage
for a fiscal year for each State is the per-
centage equal to the ratio of the number of
low-income children in the base period in
the State to the total number of low-income
children in the base period in all States not
described in paragraph (2).
‘‘(ii) NUMBER OF LOW-INCOME CHIL-
DREN IN THE BASE PERIOD.—In clause (i),
the number of low-income children in the
base period for a fiscal year in a State is
equal to the average of the number of low-
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income children in the State for the period
beginning on October 1, 1992, and ending
on September 30, 1995, as reported in the
March 1994, March 1995, and March 1996
supplements to the Current Population Sur-
vey of the Bureau of the Census.
‘‘(2) OTHER STATES.—
‘‘(A) IN GENERAL.—From the amount set
aside under paragraph (1)(A) for each fiscal
year, the Secretary shall make allotments for
such fiscal year in accordance with the percent-
ages specified in subparagraph (B) to Puerto
Rico, Guam, the Virgin Islands, American
Samoa, and the Northern Mariana Islands, if
such States are eligible States for such fiscal
year.
‘‘(B) PERCENTAGES SPECIFIED.—The per-
centages specified in this subparagraph are in
the case of—
‘‘(i) Puerto Rico, 91.6 percent;
‘‘(ii) Guam, 3.5 percent;
‘‘(iii) the Virgin Islands, 2.6 percent;
‘‘(iv) American Samoa, 1.2 percent;
and
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‘‘(v) the Northern Mariana Islands, 1.1
percent.
‘‘(3) THREE-YEAR
AVAILABILITY
OF
AMOUNTS
ALLOTTED.—Amounts allotted to a State pursuant to
this subsection for a fiscal year shall remain available
for expenditure by the State through the end of the
second succeeding fiscal year.
‘‘(4) PROCEDURE FOR DISTRIBUTION OF UNUSED
FUNDS.—The Secretary shall determine an appro-
priate procedure for distribution of funds to eligible
States that remain unused under this subsection after
the expiration of the availability of funds required
under paragraph (3). Such procedure shall be devel-
oped and administered in a manner that is consistent
with the purpose of this title.
‘‘(c) PAYMENTS.—
‘‘(1) IN GENERAL.—The Secretary shall—
‘‘(A) before October 1 of any fiscal year,
pay an eligible State an amount equal to 1 per-
cent of the amount allotted to the State under
subsection (b) for conducting the outreach activi-
ties required under section 2106(a); and
‘‘(B) make quarterly fiscal year payments
to an eligible State from the amount remaining
of such allotment for such fiscal year in an
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amount equal to the Federal medical assistance
percentage for the State (as defined under section
2102(4) and determined without regard to the
amount of Federal funds received by the State
under title XIX before the date of enactment of
this title) of the Federal and State incurred cost
of providing health insurance coverage for a low-
income child in the State plus the applicable
bonus amount.
‘‘(2) APPLICABLE BONUS.—
‘‘(A) IN GENERAL.—For purposes of para-
graph (1), the applicable bonus amount is—
‘‘(i) 5 percent of the Federal and State
incurred cost, with respect to a period, of
providing health insurance coverage for
children covered at State option among the
base-year covered low-income child popu-
lation (measured in full year equivalency)
(including such children covered by the
State through expanded eligibility under the
medicaid program under title XIX before
the date of enactment of this title, but ex-
cluding any low-income child described in
section 2102(3)(A) that a State must cover
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in order to be considered an eligible State
under this title); and
‘‘(ii) 10 percent of the Federal and
State incurred cost, with respect to a pe-
riod, of providing health insurance coverage
for children covered at State option among
the number (as so measured) of low-income
children that are in excess of such popu-
lation.
‘‘(B) SOURCE OF BONUSES.—
‘‘(i) BASE-YEAR COVERED LOW-INCOME
CHILD POPULATION.—A bonus described in
subparagraph (A)(i) shall be paid out of an
eligible State’s allotment for a fiscal year.
‘‘(ii) FOR OTHER LOW-INCOME CHILD
POPULATIONS.—A bonus described in sub-
paragraph (A)(ii) shall be paid out of the
new coverage incentive pool reserved under
subsection (a)(1).
‘‘(3) DEFINITION
OF
COST
OF
PROVIDING
HEALTH INSURANCE COVERAGE.—For purposes of this
subsection the cost of providing health insurance cov-
erage for a low-income child in the State means—
‘‘(A) in the case of an eligible State that
opts to use funds provided under this title
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through the medicaid program, the cost of pro-
viding such child with medical assistance under
the State plan under title XIX; and
‘‘(B) in the case of an eligible State that
opts to use funds provided under this title under
section 2107, the cost of providing such child
with health insurance coverage under such sec-
tion.
‘‘(4) LIMITATION
ON
TOTAL
PAYMENTS.—With
respect to a fiscal year, the total amount paid to an
eligible State under this title (including any bonus
payments) shall not exceed 85 percent of the total cost
of a State program conducted under this title for such
fiscal year.
‘‘(5) MAINTENANCE OF EFFORT.—
‘‘(A) DEEMED COMPLIANCE.—A State shall
be deemed to be in compliance with this provi-
sion if—
‘‘(i) it does not adopt income and re-
source standards and methodologies that are
more restrictive than those applied as of
June 1, 1997, for purposes of determining a
child’s eligibility for medical assistance
under the State plan under title XIX; and
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‘‘(ii) in the case of fiscal year 1998
and each fiscal year thereafter, the State
children’s health expenditures defined in
section 2102(11) are not less than the
amount of such expenditures for fiscal year
1996.
‘‘(B) FAILURE
TO
MAINTAIN
MEDICAID
STANDARDS
AND
METHODOLOGIES.—A State
that fails to meet the conditions described in sub-
paragraph (A) shall not receive—
‘‘(i) funds under this title for any child
that would be determined eligible for medi-
cal assistance under the State plan under
title XIX using the income and resource
standards and methodologies applied under
such plan as of June 1, 1997; and
‘‘(ii) any bonus amounts described in
paragraph (2)(A)(ii).
‘‘(C) FAILURE TO MAINTAIN SPENDING ON
CHILD HEALTH PROGRAMS.—A State that fails
to meet the condition described in subparagraph
(A)(ii) shall not receive funding under this title.
‘‘(6) ADVANCE
PAYMENT; RETROSPECTIVE
AD-
JUSTMENT.—The Secretary may make payments
under this subsection for each quarter on the basis of
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advance estimates of expenditures submitted by the
State and such other investigation as the Secretary
may find necessary, and shall reduce or increase the
payments as necessary to adjust for any overpayment
or underpayment for prior quarters.
‘‘SEC. 2106. USE OF FUNDS.
‘‘(a) SET-ASIDE FOR OUTREACH ACTIVITIES.—
‘‘(1) IN GENERAL.—From the amount allotted to
a State under section 2105(b) for a fiscal year, each
State shall conduct outreach activities described in
paragraph (2).
‘‘(2) OUTREACH
ACTIVITIES
DESCRIBED.—The
outreach activities described in this paragraph in-
clude activities to—
‘‘(A) identify and enroll children who are
eligible for medical assistance under the State
plan under title XIX; and
‘‘(B) conduct public awareness campaigns
to encourage employers to provide health insur-
ance coverage for children.
‘‘(b) STATE OPTIONS FOR REMAINDER.—A State may
use the amount remaining of the allotment to a State under
section 2105(b) for a fiscal year, determined after the pay-
ment required under section 2105(c)(1)(A), in accordance
with section 2107 or the State medicaid program (but not
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both). Nothing in the preceding sentence shall be construed
as limiting a State’s eligibility for receiving the 5 percent
bonus described in section 2105(c)(2)(A)(i) for children cov-
ered by the State through expanded eligibility under the
medicaid program under title XIX before the date of enact-
ment of this title.
‘‘(c) PROHIBITION ON USE OF FUNDS.—No funds pro-
vided under this title may be used to provide health insur-
ance coverage for—
‘‘(1) families of State public employees; or
‘‘(2) children who are committed to a penal in-
stitution.
‘‘(d) USE LIMITED TO STATE PROGRAM EXPENDI-
TURES.—Funds provided to an eligible State under this
title shall only be used to carry out the purpose of this title
(as described in section 2101), and any health insurance
coverage provided with such funds may include coverage of
abortion only if necessary to save the life of the mother or
if the pregnancy is the result of an act of rape or incest.
‘‘(e) ADMINISTRATIVE EXPENDITURES.—
‘‘(1) IN GENERAL.—Not more than the applicable
percentage of the amount allotted to a State under
section 2105(b) for a fiscal year, determined after the
payment required under section 2105(c)(1)(A), shall
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be used for administrative expenditures for the pro-
gram funded under this title.
‘‘(2) APPLICABLE
PERCENTAGE.—For purposes
of paragraph (1), the applicable percentage with re-
spect to a fiscal year is—
‘‘(A) for the first 2 years of a State pro-
gram funded under this title, 10 percent;
‘‘(B) for the third year of a State program
funded under this title, 7.5 percent; and
‘‘(C) for the fourth year of a State program
funded under this title and each year thereafter,
5 percent.
‘‘(f) NONAPPLICATION OF FIVE-YEAR LIMITED ELIGI-
BILITY FOR MEANS-TESTED PUBLIC BENEFITS.—The pro-
visions of section 403 of the Personal Responsibility and
Work Opportunity Reconciliation Act of 1996 (8 U.S.C.
1613) shall not apply with respect to a State program fund-
ed under this title.
‘‘(g) AUDITS.—The provisions of section 506(b) shall
apply to funds expended under this title to the same extent
as they apply to title V.
‘‘(h) REQUIREMENT
TO FOLLOW STATE PROGRAM
OUTLINE.—The State shall conduct the program in accord-
ance with the program outline approved by the Secretary
under section 2104.
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‘‘SEC. 2107. STATE OPTION FOR THE PURCHASE OR PROVI-
SION OF CHILDREN’S HEALTH INSURANCE.
‘‘(a) STATE OPTION.—
‘‘(1) IN GENERAL.—An eligible State that opts to
use funds provided under this title under this section
shall use such funds to provide FEHBP-equivalent
children’s health insurance coverage for low-income
children who reside in the State.
‘‘(2) PRIORITY FOR LOW-INCOME CHILDREN.—A
State that uses funds provided under this title under
this section shall not cover low-income children with
higher family income without covering such children
with a lower family income.
‘‘(3) DETERMINATION OF ELIGIBILITY AND FORM
OF ASSISTANCE.—An eligible State may establish any
additional eligibility criteria for the provision of
health insurance coverage for a low-income child
through funds provided under this title, so long as
such criteria and assistance are consistent with the
purpose and provisions of this title.
‘‘(4) AFFORDABILITY.—An eligible State may
impose any family premium obligations or cost-shar-
ing requirements otherwise permitted under this title
on low-income children with family incomes that ex-
ceed 150 percent of the poverty line. In the case of a
low-income child whose family income is at or below
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150 percent of the poverty line, limits on beneficiary
costs generally applicable under title XIX apply to
coverage provided such children under this section.
‘‘(b) NONENTITLEMENT.—Nothing in this section shall
be construed as providing an entitlement for an individual
or person to any health insurance coverage, assistance, or
service provided through a State program funded under this
title. If, with respect to a fiscal year, an eligible State deter-
mines that the funds provided under this title are not suffi-
cient to provide health insurance coverage for all the low-
income children that the State proposes to cover in the State
program outline submitted under section 2104 for such fis-
cal year, the State may adjust the applicable eligibility cri-
teria for such children appropriately or adjust the State
program in another manner specified by the Secretary, so
long as any such adjustments are consistent with the pur-
pose of this title.
‘‘SEC. 2107A. MENTAL HEALTH PARITY.
‘‘(a) PROHIBITION.—In the case of a health plan that
enrolls children through the use of assistance provided
under a grant program conducted under this title, such
plan, if the plan provides both medical and surgical benefits
and mental health benefits, shall not impose treatment limi-
tations or financial requirements on the coverage of mental
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health benefits if similar limitations or requirements are
not imposed on medical and surgical benefits.
‘‘(b) RULE OF CONSTRUCTION.—Nothing in this sec-
tion shall be construed—
‘‘(1) as prohibiting a health plan from requiring
preadmission screening prior to the authorization of
services covered under the plan or from applying
other limitations that restrict coverage for mental
health services to those services that are medically
necessary; and
‘‘(2) as requiring a health plan to provide any
mental health benefits.
‘‘(c) SEPARATE APPLICATION TO EACH OPTION OF-
FERED.—In the case of a health plan that offers a child
described in subsection (a) 2 or more benefit package op-
tions under the plan, the requirements of this section shall
be applied separately with respect to each such option.
‘‘(d) DEFINITIONS.—In this section:
‘‘(1) MEDICAL
OR
SURGICAL
BENEFITS.—The
term ‘medical or surgical benefits’ means benefits
with respect to medical or surgical services, as defined
under the terms of the plan, but does not include
mental health benefits.
‘‘(2) MENTAL
HEALTH
BENEFITS.—The term
‘mental health benefits’ means benefits with respect to
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mental health services, as defined under the terms of
the plan, but does not include benefits with respect to
the treatment of substance abuse and chemical de-
pendency.
‘‘SEC. 2108. PROGRAM INTEGRITY.
‘‘The following provisions of the Social Security Act
shall apply to eligible States under this title in the same
manner as such provisions apply to a State under title
XIX:
‘‘(1) Section 1116 (relating to administrative
and judicial review).
‘‘(2) Section 1124 (relating to disclosure of own-
ership and related information).
‘‘(3) Section 1126 (relating to disclosure of infor-
mation about certain convicted individuals).
‘‘(4) Section 1128 (relating to exclusion from in-
dividuals and entities from participation in State
health care plans).
‘‘(5) Section 1128A (relating to civil monetary
penalties).
‘‘(6) Section 1128B (relating to criminal pen-
alties).
‘‘(7) Section 1132 (relating to periods within
which claims must be filed).
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‘‘(8) Section 1902(a)(4)(C) (relating to conflict
of interest standards).
‘‘(9) Section 1903(i) (relating to limitations on
payment).
‘‘(10) Section 1903(m)(5) (as in effect on the day
before the date of enactment of the Balanced Budget
Act of 1997).
‘‘(11) Section 1903(w) (relating to limitations on
provider taxes and donations).
‘‘(12) Section 1905(a)(B) (relating to the exclu-
sion of care or services for any individual who has
not attained 65 years of age and who is a patient in
an institution for mental diseases from the definition
of medical assistance).
‘‘(13) Section 1921 (relating to state licensure
authorities).
‘‘(14) Sections 1902(a)(25), 1912(a)(1)(A), and
1903(o) (insofar as such sections relate to third party
liability).
‘‘(15) Sections 1948 and 1949 (as added by sec-
tion 5701(a)(2) of the Balanced Budget Act of 1997).
‘‘SEC. 2109. ANNUAL REPORTS.
‘‘(a) ANNUAL STATE ASSESSMENT OF PROGRESS.—An
eligible State shall—
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‘‘(1) assess the operation of the State program
funded under this title in each fiscal year, including
the progress made in providing health insurance cov-
erage for low-income children; and
‘‘(2) report to the Secretary, by January 1 fol-
lowing the end of the fiscal year, on the result of the
assessment.
‘‘(b) REPORT
OF
THE SECRETARY.—The Secretary
shall submit to the appropriate committees of Congress an
annual report and evaluation of the State programs funded
under this title based on the State assessments and reports
submitted under subsection (a). Such report shall include
any conclusions and recommendations that the Secretary
considers appropriate.’’.
(b) CONFORMING AMENDMENT.—Section 1128(h) (42
U.S.C. 1320a–7(h)) is amended by—
(1) in paragraph (2), by striking ‘‘or’’ at the
end;
(2) in paragraph (3), by striking the period and
inserting ‘‘, or’’; and
(3) by adding at the end the following:
‘‘(4) a program funded under title XXI.’’.
SEC. 1502. APPLICABILITY.
If, on the date of enactment of this Act, the Social Se-
curity Act contains a title XXI, the amendments made to
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the Social Security Act by this title shall not take effect,
except that amounts appropriated under such title XXI for
a fiscal year shall be increased by the amounts that would
have been appropriated for such fiscal year under section
2103 of the Social Security Act, as added by this title.
TITLE XVI—BUDGET
ENFORCEMENT
Subtitle 
A—Amendments 
to 
the
Congressional Budget and Im-
poundment Control Act of 1974
SEC. 1601. AMENDMENTS TO SECTION 201.
Section 201 of the Congressional Budget Act of 1974
is amended by redesignating subsection (g) (relating to rev-
enue estimates) as subsection (f).
SEC. 1602. AMENDMENTS TO SECTION 202.
(a) ASSISTANCE TO BUDGET COMMITTEES.—The first
sentence of section 202(a) of the Congressional Budget Act
of 1974 is amended by inserting ‘‘primary’’ before ‘‘duty’’.
(b) ELIMINATION OF EXECUTED PROVISION.—Section
202 of the Congressional Budget Act of 1974 is amended
by striking subsection (e) and by redesignating subsections
(f), (g), and (h) as subsections (e), (f), and (g), respectively.
SEC. 1603. AMENDMENT TO SECTION 300.
The item relating to February 25 in the timetable set
forth in section 300 of the Congressional Budget Act of 1974
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is amended by striking ‘‘February 25’’ and inserting ‘‘With-
in 6 weeks after President submits budget’’.
SEC. 1604. AMENDMENTS TO SECTION 301.
(a) TERMS
OF
BUDGET
RESOLUTIONS.—Section
301(a) of the Congressional Budget Act of 1974 is amended
by striking ‘‘, and planning levels for each of the two ensu-
ing fiscal years,’’ and inserting ‘‘and for at least each of
the 4 ensuing fiscal years’’.
(b) CONTENTS
OF BUDGET RESOLUTIONS.—Para-
graphs (1) and (4) of section 301(a) of the Congressional
Budget Act of 1974 are amended by striking ‘‘, budget out-
lays, direct loan obligations, and primary loan guarantee
commitments’’ each place it appears and inserting ‘‘and
budget outlays’’.
(c) ADDITIONAL MATTERS.—Section 301(b) of the
Congressional Budget Act of 1974 is amended by—
(1) amending paragraph (7) to read as follows—
‘‘(7) set forth pay-as-you-go procedures in the
Senate whereby committee allocations, aggregates, and
other levels can be revised for legislation if such legis-
lation would not increase the deficit or would not in-
crease the deficit when taken with other legislation en-
acted after the adoption of the resolution for the first
fiscal year or the total period of fiscal years covered
by the resolution;’’;
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(2) in paragraph 8, striking the period and in-
serting ‘‘; and’’; and
(3) adding the following new paragraph:
‘‘(9) set forth direct loan obligations and pri-
mary loan commitment guarantee levels.’’.
(d) VIEWS AND ESTIMATES.—The first sentence of sec-
tion 301(d) of the Congressional Budget Act of 1974 is
amended by inserting ‘‘or at such time as may be requested
by the Committee on the Budget,’’ after ‘‘Code,’’.
(e) HEARINGS AND REPORT.—Section 301(e) of the
Congressional Budget Act of 1974 is amended—
(1) by striking ‘‘In developing’’ and inserting the
following:
‘‘(1) IN GENERAL.—In developing’’; and
(2) by striking the sentence beginning with ‘‘The
report accompanying ’’ and all that follows through
the end of the subsection and inserting the following:
‘‘(2) REQUIRED CONTENTS OF REPORT.—The re-
port accompanying such concurrent resolution shall
include—
‘‘(A) a comparison of the appropriate levels
of total new budget authority, total budget out-
lays, and total revenues as set forth in such con-
current resolution with those requested in the
budget submitted by the President;
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‘‘(B) with respect to each major functional
category, an estimate of total new budget author-
ity and total outlays with the estimates divided
between permanent authority and funds provided
in appropriations Acts;
‘‘(C) the economic assumptions which un-
derlie each of the matters set forth in such con-
current resolution and any alternative economic
assumptions and objectives that the committee
considered;
‘‘(D) projections for the period of 5 fiscal
years beginning with such fiscal year, of the esti-
mated levels of total new budget authority, total
outlays and total revenues and the surplus or
deficit for each fiscal year;
‘‘(E) information, data, and comparisons
indicating the manner in which, and the basis
on which, the committee determined each of the
matters set forth in the concurrent resolutions;
‘‘(F) the estimated levels of tax expenditures
(the tax expenditures budget) by major items and
functional categories for the President’s budget
and in the concurrent resolution; and
‘‘(G) allocations described in section 302(a).
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‘‘(3) ADDITIONAL CONTENTS OF REPORT.—The
report accompanying such concurrent resolution may
include—
‘‘(A) a statement of any significant changes
in the proposed levels of Federal assistance to
State and local governments;
‘‘(B) an allocation of the level of Federal
revenues recommended in the concurrent resolu-
tion among the major sources of such revenues;
‘‘(C) information, data, and comparisons
on the share of total Federal budget outlays and
of gross domestic product devoted to investment
in the budget submitted by the President and in
the concurrent resolution; and
‘‘(D) other matters, relating to the budget
and fiscal policy, the committee deems appro-
priate.’’.
(f) SOCIAL SECURITY CORRECTIONS.—Section 301(i)
of the Congressional Budget Act of 1974 is amended by—
(1) inserting ‘‘SOCIAL
SECURITY
POINT
OF
ORDER.—’’ after ‘‘(i)’’; and
(2) striking ‘‘as reported to the Senate’’ and in-
serting ‘‘(or amendment, motion, or conference report
on such a resolution)’’.
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(g) REPEAL OF BUDGET RESOLUTION PROVISION.—
Section 22 of House Concurrent Resolution 218 (103d Con-
gress) is repealed.
SEC. 1605. AMENDMENTS TO SECTION 302.
(a) 
ALLOCATIONS
AND
SUBALLOCATIONS.—Sub-
sections (a) and (b) of section 302 of the Congressional
Budget Act of 1974 are amended to read as follows:
‘‘(a) COMMITTEE SPENDING ALLOCATIONS.—
‘‘(1) HOUSE OF REPRESENTATIVES.—
‘‘(A) ALLOCATION
AMONG
COMMITTEES.—
The joint explanatory statement accompanying a
conference report on a budget resolution shall in-
clude allocations, consistent with the resolution
recommended in the conference report, of the ap-
propriate levels (for each fiscal year covered by
that resolution and a total for all such years)
of—
‘‘(i) total new budget authority;
‘‘(ii) total entitlement authority; and
‘‘(iii) total outlays;
among each committee of the House of Represent-
atives that has jurisdiction over legislation pro-
viding or creating such amounts.
‘‘(B) NO DOUBLE COUNTING.—Any item al-
located to one committee of the House of Rep-
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resentatives may not be allocated to another such
committee.
‘‘(C) FURTHER
DIVISION
OF
AMOUNTS.—
The amounts allocated to each committee for
each fiscal year, other than the Committee on
Appropriations, shall be further divided between
amounts provided or required by law on the date
of filing of that conference report and amounts
not so provided or required. The amounts allo-
cated to the Committee on Appropriations for
each fiscal year shall be further divided between
discretionary and mandatory amounts or pro-
grams, as appropriate.
‘‘(2) SENATE
ALLOCATION
AMONG
COMMIT-
TEES.—The joint explanatory statement accompany-
ing a conference report on a budget resolution shall
include an allocation, consistent with the resolution
recommended in the conference report, of the appro-
priate levels of—
‘‘(A) total new budget authority; and
‘‘(B) total outlays;
among each committee of the Senate that has jurisdic-
tion over legislation providing or creating such
amounts.
‘‘(3) AMOUNTS NOT ALLOCATED.—
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‘‘(A) IN THE HOUSE.—In the House of Rep-
resentatives, if a committee receives no allocation
of new budget authority, entitlement authority,
or outlays, that committee shall be deemed to
have received an allocation equal to zero for new
budget authority, entitlement authority, or out-
lays.
‘‘(B) IN THE SENATE.—In the Senate, if a
committee receives no allocation of new budget
authority, outlays, or social security outlays,
that committee shall be deemed to have received
an allocation equal to zero for new budget au-
thority, outlays, or social security outlays.
‘‘(4) SCOPE OF ALLOCATIONS IN THE SENATE.—
In the Senate, the allocations made pursuant to para-
graph (2) shall be made for all committees for the
first fiscal year covered by the resolution and for all
committees other than the Committee on Appropria-
tions for the period of fiscal years covered by such res-
olution.
‘‘(b) SUBALLOCATIONS BY APPROPRIATION COMMIT-
TEES.—As soon as practicable after a concurrent resolution
on the budget is agreed to, the Committee on Appropriations
of each House (after consulting with the Committee on Ap-
propriations of the other House) shall suballocate each
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amount allocated to it for the budget year under subsection
(a)(1)(A) or (a)(2) among its subcommittees. Each Commit-
tee on Appropriations shall promptly report to its House
suballocations made or revised under this paragraph.’’.
(b) POINT OF ORDER.—Section 302(c) of the Congres-
sional Budget Act of 1974 is amended to read as follows:
‘‘(c) POINT OF ORDER.—After the Committee on Ap-
propriations has received an allocation pursuant to sub-
section (a) for a fiscal year, it shall not be in order in the
House of Representatives or the Senate to consider any bill,
joint resolution, amendment, motion, or conference report
providing new budget authority for that fiscal year within
the jurisdiction of that committee, until such committee
makes the suballocations required by subsection (b).’’.
(c) ENFORCEMENT
OF POINT
OF ORDER.—Section
302(f)(2) of the Congressional Budget Act of 1974 is amend-
ed to read as follows:
‘‘(2) ENFORCEMENT
OF
COMMITTEE
ALLOCA-
TIONS AND SUBALLOCATIONS.—After a concurrent res-
olution on the budget is agreed to, it shall not be in
order in the Senate to consider any bill, joint resolu-
tion, amendment, motion, or conference report that
would cause—
‘‘(A) in the case of any committee except the
Committee on Appropriations, the appropriate
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(b) CONFORMING AMENDMENT.—The item relating to
section 303 in the table of contents set forth in section 1(b)
of the Congressional Budget and Impoundment Control Act
of 1974 is amended by striking ‘‘new credit authority,’’.
SEC. 1607. AMENDMENT TO SECTION 305.
Section 305(a)(1) of the Congressional Budget Act of
1974 is amended by inserting ‘‘when the House is not in
session’’ after ‘‘holidays’’ each place it appears.
SEC. 1608. AMENDMENT TO SECTION 308.
(a) ELIMINATION OF REFERENCES TO CREDIT AU-
THORITY.—Section 308 of the Congressional Budget Act of
1974 is amended—
(1) by striking the center heading and inserting
the following:
‘‘REPORTS ON SPENDING AND REVENUE LEGISLATION’’;
(2) in paragraphs (1) and (2) of subsection (a),
by striking ‘‘or new credit authority,’’ each place it
appears and insert ‘‘and’’ before ‘‘new spending’’ each
place it appears;
(3) in subsection (b)(1), by striking ‘‘or new
credit authority,’’ and insert ‘‘and’’ before ‘‘new
spending’’; and
(4) in subsection (c), by inserting ‘‘and’’ after
the semicolon at the end of paragraph (3), strike ‘‘;
and’’ at the end of paragraph (4) and insert a period;
and strike paragraph (5).
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(b) CONFORMING AMENDMENT.—The item relating to
section 308 in the table of contents set forth in section 1(b)
of the Congressional Budget and Impoundment Control Act
of 1974 is amended by striking ‘‘or new credit authority’’
and by inserting ‘‘and’’ after the first comma.
SEC. 1609. AMENDMENTS TO SECTION 311.
Section 311 of the Congressional Budget Act of 1974
is amended to read as follows:
‘‘NEW
BUDGET
AUTHORITY, NEW
SPENDING
AUTHORITY,
AND REVENUE LEGISLATION MUST BE WITHIN APPRO-
PRIATE LEVELS
‘‘SEC. 311. (a) ENFORCEMENT OF BUDGET AGGRE-
GATES.—
‘‘(1) IN THE HOUSE OF REPRESENTATIVES.—Ex-
cept as provided by subsection (c), after the Congress
has completed action on a concurrent resolution on
the budget for a fiscal year, it shall not be in order
in the House of Representatives to consider any bill,
joint resolution, amendment, motion, or conference re-
port providing new budget authority for such fiscal
year, providing new entitlement authority effective
during such fiscal year, or reducing revenues for such
fiscal year, if—
‘‘(A) the enactment of such bill or resolution
as reported;
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‘‘(B) the adoption and enactment of such
amendment; or
‘‘(C) the enactment of such bill or resolution
in the form recommended in such conference re-
port;
would cause the appropriate level of total new budget
authority or total budget outlays set forth in the most
recently agreed to concurrent resolution on the budget
for such fiscal year to be exceeded, or would cause rev-
enues to be less than the appropriate level of total rev-
enues set forth in such concurrent resolution except in
the case that a declaration of war by the Congress is
in effect.
‘‘(2) IN THE SENATE.—After a concurrent resolu-
tion on the budget is agreed to, it shall not be in
order in the Senate to consider any bill, resolution,
amendment, motion, or conference report that—
‘‘(A) would cause the appropriate level of
total new budget authority or total outlays set
forth for the first fiscal year in such resolution
to be exceeded; or
‘‘(B) would cause revenues to be less than
the appropriate level of total revenues set forth
for the first fiscal year covered by such resolution
or for the period including the first fiscal year
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plus the following 4 fiscal years in such resolu-
tion.
‘‘(3) ENFORCEMENT OF SOCIAL SECURITY LEV-
ELS IN THE SENATE.—After a concurrent resolution
on the budget is agreed to, it shall not be in order in
the Senate to consider any bill, resolution, amend-
ment, motion, or conference report that would cause
a decrease in social security surpluses or an increase
in social security deficits derived from the levels of so-
cial security revenues and social security outlays set
forth for the first fiscal year covered by the resolution
and for the period including the first fiscal year plus
the following 4 fiscal years in such resolution.
‘‘(b) SOCIAL SECURITY LEVELS.—
‘‘(1) IN
GENERAL.—For the purposes of sub-
section (a)(3), social security surpluses equal the ex-
cess of social security revenues over social security
outlays in a fiscal year or years with such an excess
and social security deficits equal the excess of social
security outlays over social security revenues in a fis-
cal year or years with such an excess.
‘‘(2) TAX TREATMENT.—For the purposes of this
section, no provision of any legislation involving a
change in chapter 1 of the Internal Revenue Code of
1986 shall be treated as affecting the amount of social
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security revenues or outlays unless such provision
changes the income tax treatment of social security
benefits.
‘‘(c) EXCEPTION IN THE HOUSE OF REPRESENTA-
TIVES.—Subsection (a)(1) shall not apply in the House of
Representatives to any bill, resolution, or amendment which
provides new budget authority or new entitlement authority
effective during such fiscal year, or to any conference report
on any such bill or resolution, if—
‘‘(1) the enactment of such bill or resolution as
reported;
‘‘(2) the adoption and enactment of such amend-
ment; or
‘‘(3) the enactment of such bill or resolution in
the form recommended in such conference report;
would not cause the appropriate allocation of new discre-
tionary budget authority or new entitlement authority
made pursuant to section 302(a) for such fiscal year, for
the committee within whose jurisdiction such bill, resolu-
tion, or amendment falls, to be exceeded.’’.
SEC. 1610. AMENDMENT TO SECTION 312.
(a) IN GENERAL.—Section 312 of the Congressional
Budget Act of 1974 is amended to read as follows:
‘‘POINTS OF ORDER
‘‘SEC. 312. (a) DETERMINATIONS.—For purposes of
this title and title IV, the levels of new budget authority,
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budget outlays, spending authority as described in section
401(c)(2), direct spending, new entitlement authority, and
revenues for a fiscal year shall be determined on the basis
of estimates made by the Committee on the Budget of the
House of Representatives or the Senate, as the case may
be.
‘‘(b) DISCRETIONARY SPENDING POINT OF ORDER IN
THE SENATE.—
‘‘(1) Except as otherwise provided in this sub-
section, it shall not be in order in the Senate to con-
sider any concurrent resolution on the budget (or
amendment, motion, or conference report on such a
resolution) that would exceed any of the discretionary
spending limits in section 251(c) of the Balanced
Budget and Emergency Deficit Control Act of 1985.
‘‘(2) This subsection shall not apply if a declara-
tion of war by the Congress is in effect or if a joint
resolution pursuant to section 258 of the Balanced
Budget and Emergency Deficit Control Act of 1985
has been enacted.
‘‘(c) MAXIMUM DEFICIT AMOUNT POINT OF ORDER IN
THE SENATE.—It shall not be in order in the Senate to
consider any concurrent resolution on the budget for a fiscal
year under section 301, or to consider any amendment to
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that concurrent resolution, or to consider a conference re-
port on that concurrent resolution—
‘‘(1) if the level of total budget outlays for the
first fiscal year that is set forth in that concurrent
resolution or conference report exceeds the rec-
ommended level of Federal revenues set forth for that
year by an amount that is greater than the maximum
deficit amount, if any, specified in the Balanced
Budget and Emergency Deficit Control Act of 1985
for such fiscal year; or
‘‘(2) if the adoption of such amendment would
result in a level of total budget outlays for that fiscal
year which exceeds the recommended level of Federal
revenues for that fiscal year, by an amount that is
greater than the maximum deficit amount, if any,
specified in the Balanced Budget and Emergency Def-
icit Control Act of 1985 for such fiscal year.
‘‘(d) TIMING OF POINTS OF ORDER IN THE SENATE.—
A point of order under this Act may not be raised against
a bill, resolution, amendment, motion, or conference report
while an amendment or motion, the adoption of which
would remedy the violation of this Act, is pending before
the Senate.
‘‘(e) POINTS OF ORDER IN THE SENATE AGAINST
AMENDMENTS BETWEEN THE HOUSES.—Each provision of
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this Act that establishes a point of order against an amend-
ment also establishes a point of order in the Senate against
an amendment between the Houses. If a point of order
under this Act is raised in the Senate against an amend-
ment between the Houses, and the point of order is sus-
tained, the effect shall be the same as if the Senate had dis-
agreed to the amendment.
‘‘(f) EFFECT OF A POINT OF ORDER ON A BILL IN THE
SENATE.—In the Senate, if the Chair sustains a point of
order under this Act against a bill, the Chair shall then
send the bill to the committee of appropriate jurisdiction
for further consideration.’’.
(b) CONFORMING
AMENDMENTS.—Sections 302(g),
311(c), and 313(e) of the Congressional Budget Act of 1974
are repealed.
SEC. 1611. ADJUSTMENTS.
(a) IN GENERAL.—Title III of the Congressional
Budget Act of 1974 is amended by adding at the end the
following new sections:
‘‘ADJUSTMENTS
‘‘SEC. 314. (a) ADJUSTMENTS.—When—
‘‘(1)(A) the Committee on Appropriations re-
ports an appropriation measure for fiscal year 1998,
1999, 2000, 2001, or 2002 that specifies an amount
for emergencies pursuant to section 251(b)(2)(A) of
the Balanced Budget and Emergency Deficit Control
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Act of 1985 or for continuing disability reviews pur-
suant to section 251(b)(2)(C) of that Act;
‘‘(B) any other committee reports emergency leg-
islation described in section 252(e) of that Act;
‘‘(C) the Committee on Appropriations reports
an appropriation measure for fiscal year 1998, 1999,
2000, 2001, or 2002 that includes an appropriation
with respect to clause (i) or (ii), the adjustment shall
be the amount of budget authority in the measure that
is the dollar equivalent, in terms of Special Drawing
Rights, of—
‘‘(i) an increase in the United States quota
as part of the International Monetary Fund
Eleventh General Review of Quotas (United
States Quota); or
‘‘(ii) an increase in the maximum amount
available to the Secretary of the Treasury pursu-
ant to section 17 of the Bretton Woods Agree-
ments Act, as amended from time to time (New
Arrangements to Borrow); or
‘‘(D) the Committee on Appropriations reports
an appropriation measure for fiscal year 1998, 1999,
or 2000 that includes an appropriation for arrearages
for international organizations, international peace-
keeping, and multilateral development banks during
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that fiscal year, and the sum of the appropriations
for the period of fiscal years 1998 through 2000 does
not exceed $1,884,000,000 in budget authority; or
‘‘(2) a conference committee submits a conference
report thereon;
the chairman of the Committee on the Budget of the Senate
or House of Representatives (whichever is appropriate)
shall make the adjustments referred to in subsection (c) to
reflect the additional new budget authority for such matter
provided in that measure or conference report and the addi-
tional outlays flowing from such amounts for such matter.
‘‘(b) APPLICATION
OF ADJUSTMENTS.—The adjust-
ments and revisions to allocations, aggregates, and limits
made by the Chairman of the Committee on the Budget pur-
suant to subsection (a) for legislation shall only apply while
such legislation is under consideration shall only perma-
nently take effect upon the enactment of that legislation.
‘‘(c) CONTENT OF ADJUSTMENTS.—The adjustments
referred to in subsection (a) shall consist of adjustments,
as appropriate, to—
‘‘(1) the discretionary spending limits as set
forth in the most recently adopted concurrent resolu-
tion on the budget;
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HR 2014 EAS
‘‘(2) the allocations made pursuant to the most
recently adopted concurrent resolution on the budget
pursuant to section 302(a); and
‘‘(3) the budgetary aggregates as set forth in the
most recently adopted concurrent resolution on the
budget.
‘‘(d) REPORTING REVISED SUBALLOCATIONS.—Fol-
lowing the adjustments made under subsection (a), the Com-
mittees on Appropriations of the Senate and the House of
Representatives shall report appropriately revised sub-
allocations pursuant to section 302(b) to carry out this sub-
section.
‘‘(e) DEFINITIONS.—As used in subsection (a)(1)(A),
when referring to continuing disability reviews, the terms
‘continuing disability reviews’, ‘additional new budget au-
thority’, and ‘additional outlays’ shall have the same mean-
ings as provided in section 251(b)(2)(C)(ii) of the Balanced
Budget and Emergency Deficit Control Act of 1985.’’.
(b) TABLE OF CONTENTS.—The table of contents set
forth in section 1(b) of the Congressional Budget and Im-
poundment Control Act of 1974 is amended by—
(1) striking the item for section 312 and insert-
ing the following:
‘‘Sec. 312. Points of order.’’; and
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(2) adding after the item relating to section 313
the following new item:
‘‘Sec. 314. Adjustments.’’.
SEC. 1612. AMENDMENTS TO TITLE V.
(a) SECTION 502.—Section 502 of the Federal Credit
Reform Act of 1990 is amended as follows:
(1) In the second sentence of paragraph (1), in-
sert ‘‘and refinancing arrangements that defer pay-
ment for more than 90 days, including the sale of a
government asset on credit terms’’ before the period.
(2) In paragraph (5)(A), insert ‘‘or modification
thereof’’ before the first comma.
(3) In paragraph (5)(B)(iii), strike ‘‘and other
recoveries’’ and insert ‘‘, other recoveries, and routine
workouts of troubled loans or loans in imminent de-
fault when those workouts are to maximize repay-
ments to the Government or to minimize claims on
the Government’’.
(4) In paragraph (5)(C), strike ‘‘, and’’ at the
end of clause (i), strike ‘‘the’’ in clause (ii) and strike
the period and insert ‘‘, and’’ at the end of that
clause, and at the end add the following new clause:
‘‘(iii) routine workouts of troubled loans or
loans in imminent default when those workouts
are to maximize the repayments to the Govern-
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ment or to minimize claims on the Govern-
ment.’’.
(5) In paragraph (5), amend subparagraph (D)
to read as follows:
‘‘(D) The cost of a modification is the difference
in cost that results from the modification of a direct
loan or loan guarantee (or direct loan obligation or
loan guarantee commitment). This difference in cost
is the difference between the currently estimated net
present value of the remaining cash flows under the
terms of the direct loan or loan guarantee contract as-
sumed in the most recent President’s budget submitted
to Congress, and the currently estimated net present
value of the remaining cash flows under the terms of
the contract, as modified. Except for interest rates,
the estimates shall be consistent with the economic
and technical assumptions underlying the most recent
President’s budget submitted to Congress.’’.
(6) Redesignate paragraph (9) as paragraph
(10) and after paragraph (8) add the following new
paragraph:
‘‘(9) The term ‘modification’ means any Govern-
ment action that alters the estimated cost of an out-
standing direct loan (or direct loan obligation) or an
outstanding loan guarantee (or loan guarantee com-
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mitment) from the estimate based on the cash flows
contained in the most recent President’s budget sub-
mitted to Congress. This includes the sale of loan as-
sets, with or without recourse, and the purchase of
guaranteed loans. This also includes any action re-
sulting from new legislation, or from the exercise of
administrative discretion under existing law, that di-
rectly or indirectly alters the estimated cost of out-
standing direct loans (or direct loan obligations) or
loan guarantees (or loan guarantee commitments)
such as a change in collection procedures. The term
‘modification’ does not include the routine adminis-
trative work-outs of troubled loans or loans in immi-
nent default. Work-outs are actions undertaken to
maximize the repayments to the Government under
existing direct loans or to minimize claims under ex-
isting loan guarantees. The expected effects of such
work-outs shall be included in the original estimate of
the cash flows. Insofar as the effects on cash flows are
more or less than originally estimated, the differences
in cash flows shall be included in a reestimate of the
cost. The term ‘modification’ does not include changes
in loan or guarantee terms resulting from the exercise
by the borrower of an option included in the loan or
guarantee contract. The expected effects of such
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HR 2014 EAS
changes in terms shall be included in the original es-
timate of the cash flow. Insofar as the effects on cash
flow are more or less than originally estimated, the
differences in cash flow shall be included in a reesti-
mate of the cost; and’’.
(b) SECTION 504.—Section 504 of the Federal Credit
Reform Act of 1990 is amended as follows:
(1) Amend subsection (b)(1) to read as follows:
‘‘(1) new budget authority to cover their costs is
provided in advance in appropriation Acts;’’.
(2) In subsection (b)(2), strike ‘‘enacted’’ and in-
sert ‘‘provided in an appropriation Act’’.
(3) In subsection (d)(1), strike ‘‘directly or indi-
rectly alter the costs of outstanding direct loans and
loan guarantees’’ and insert ‘‘modify outstanding di-
rect loans (or direct loan obligations) or loan guaran-
tees (or loan guarantee commitments)’’.
(4) In subsection (e), strike ‘‘A direct loan obli-
gation or loan guarantee commitment’’ and insert
‘‘An outstanding direct loan (or direct loan obliga-
tion) or loan guarantee (or loan guarantee commit-
ment)’’, after ‘‘unless’’ insert ‘‘new’’, and strike ‘‘or
from other budgetary resources’’.
(c) SECTION 505.—Section 505 of the Federal Credit
Reform Act of 1990 is amended as follows:
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(1) In subsection (c), by inserting before the pe-
riod at the end of the second sentence the following:
‘‘, except that the rate of interest charged by the Sec-
retary on lending to financing accounts (including
amounts treated as lending to financing accounts by
the Federal Financing Bank (hereinafter in this sub-
section referred to as the ‘Bank‘) pursuant to section
406(b)) and the rate of interest paid to financing ac-
counts on uninvested balances in financing accounts
shall be the same as the rate determined pursuant to
section 502(5)(E). For guaranteed loans financed by
the Bank and treated as direct loans by a Federal
agency pursuant to section 406(b), any fee or interest
surcharge (the amount by which the interest rate
charged exceeds the rate determined pursuant to sec-
tion 502(5)(E)) that the Bank charges to a private
borrower pursuant to section 6(c) of the Federal Fi-
nancing Bank Act of 1973 shall be considered a cash
flow to the Government for the purposes of determin-
ing the cost of the direct loan pursuant to section
502(5). All such amounts shall be credited to the ap-
propriate financing account. The Bank is authorized
to require reimbursement from a Federal agency to
cover the administrative expenses of the Bank that are
attributable to the direct loans financed for that agen-
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cy. All such payments by an agency shall be consid-
ered administrative expenses subject to section 504(g).
This section shall apply to transactions related to di-
rect loan obligations or loan guarantee commitments
made on or after October 1, 1991.’’.
(2) In subsection (c), by striking ‘‘supercede’’
and inserting ‘‘supersede’’.
(3) By amending subsection (d) to read as fol-
lows:
‘‘(d) AUTHORIZATION FOR LIQUIDATING ACCOUNTS.—
(1) Amounts in liquidating accounts shall be available only
for payments resulting from direct loan obligations or loan
guarantee commitments made prior to October 1, 1991.
These payments shall include—
‘‘(A) interest payments and principal repay-
ments to the Treasury or the Federal Financing Bank
for amounts borrowed;
‘‘(B) disbursements of loans;
‘‘(C) default and other guarantee claim pay-
ments;
‘‘(D) interest supplement payments;
‘‘(E) payments for the costs of foreclosing, man-
aging, and selling collateral that are capitalized or
routinely deducted from the proceeds of sales;
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‘‘(F) payments to financing accounts when re-
quired for modifications;
‘‘(G) administrative expenses, if—
‘‘(i) amounts credited to the liquidating ac-
count would have been available for administra-
tive expenses under a provision of law in effect
prior to October 1, 1991; and
‘‘(ii) no direct loan obligation or loan guar-
antee commitment has been made, or any modi-
fication of a direct loan or loan guarantee has
been made, since September 30, 1991; and
‘‘(H) such other payments as are necessary for
the liquidation of such direct loan obligations and
loan guarantee commitments.
‘‘(2) Amounts credited to liquidating accounts in any
year shall be available only for payments required in that
year. Any unobligated balances in liquidating accounts at
the end of a fiscal year shall be transferred to miscellaneous
receipts as soon as practicable after the end of the fiscal
year.
‘‘(3) If funds in liquidating accounts are insufficient
to satisfy obligations and commitments of said accounts,
there is hereby provided permanent, indefinite authority to
make any payments required to be made on such obligations
and commitments.’’.
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SEC. 1613. REPEAL OF TITLE VI.
(a) REPEALER.—Title VI of the Congressional Budget
Act of 1974 is repealed.
(b) CONFORMING AMENDMENTS.—Title VI of the table
of contents set forth in section 1(b) of the Congressional
Budget and Impoundment Control Act of 1974 is repealed.
SEC. 1614. AMENDMENTS TO SECTION 904.
(a) WAIVERS.—Section 904(c) of the Congressional
Budget Act of 1974 is amended to read as follows:
‘‘(c) WAIVERS.—
‘‘(1) 
Sections 
305(b)(2), 
305(c)(4), 
306,
310(d)(2), 313, 904(c), and 904(d) of this Act may be
waived or suspended in the Senate only by the affirm-
ative vote of three-fifths of the Members, duly chosen
and sworn.
‘‘(2) Sections 301(i), 302(c), 302(f), 310(g),
311(a), 312(b), and 312(c) of this Act and sections
258(a)(4)(C), 
258A(b)(3)(C)(I), 
258B(f)(1),
258B(h)(1), 258(h)(3), 258C(a)(5), and 258C(b)(1) of
the Balanced Budget and Emergency Deficit Control
Act of 1985 may be waived or suspended in the Sen-
ate only by the affirmative vote of three-fifths of the
Members, duly chosen and sworn.’’.
(b) APPEALS.—Section 904(d) of the Congressional
Budget Act of 1974 is amended to read as follows:
‘‘(d) APPEALS.—
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‘‘(1) Appeals in the Senate from the decisions of
the Chair relating to any provision of title III or IV
or section 1017 shall, except as otherwise provided
therein, be limited to 1 hour, to be equally divided be-
tween, and controlled by, the mover and the manager
of the resolution, concurrent resolution, reconciliation
bill, or rescission bill, as the case may be.
‘‘(2) An affirmative vote of three-fifths of the
Members, duly chosen and sworn, shall be required in
the Senate to sustain an appeal of the ruling of the
Chair on a point of order raised under sections
305(b)(2), 305(c)(4), 306, 310(d)(2), 313, 904(c), and
904(d) of this Act.
‘‘(3) An affirmative vote of three-fifths of the
Members, duly chosen and sworn, shall be required in
the Senate to sustain an appeal of the ruling of the
Chair on a point of order raised under sections
301(i), 302(c), 302(f), 310(g), 311(a), 312(b), and
312(c) of this Act and sections 258(a)(4)(C),
258A(b)(3)(C)(I), 258B(f)(1), 258B(h)(1), 258(h)(3),
258C(a)(5), and 258C(b)(1) of the Balanced Budget
and Emergency Deficit Control Act of 1985.’’.
(c) EXPIRATION
OF SUPERMAJORITY VOTING RE-
QUIREMENTS.—Section 904 of the Congressional Budget
Act of 1974 is amended by adding at the end the following: