1413
‘‘(8) SUBSTANTIATION REQUIREMENT FOR CER-
TAIN CONTRIBUTIONS.—
‘‘(A) GENERAL RULE.—No deduction shall
be allowed under subsection (a) for any con-
tribution of $750 or more unless the taxpayer
substantiates the contribution by a contempora-
neous written acknowledgment of the contribu-
tion by the donee organization that meets the
requirements of subparagraph (B).
‘‘(B) CONTENT OF ACKNOWLEDGMENT.—
An acknowledgment meets the requirements of
this subparagraph if it provides information
sufficient to substantiate the amount of the de-
ductible contribution. If the contribution was
made by means of a payment part of which con-
stituted consideration for goods or services pro-
vided by the donee organization, the acknowl-
edgment must provide a good faith estimate of
the value of such goods or services.
‘‘(C) CONTEMPORANEOUS.—For purposes
of subparagraph (A), an acknowledgment shall
be considered to be contemporaneous if the tax-
payer obtains the acknowledgment on or before
the earlier of—
1414
‘‘(i) the date on which the taxpayer
files a return for the taxable year in which
the contribution was made, or
‘‘(ii) the due date (including exten-
sions) for filing such return.
‘‘(D) SUBSTANTIATION
NOT
REQUIRED
FOR
CONTRIBUTIONS
REPORTED
BY
THE
DONEE
ORGANIZATION.—Subparagraph 
(A)
shall not apply to a contribution if the donee
organization files a return, on such form and in
accordance with such regulations as the Sec-
retary may prescribe, which includes the infor-
mation described in subparagraph (B) with re-
spect to the contribution.
‘‘(E) REGULATIONS.—The Secretary shall
prescribe such regulations as may be necessary
or appropriate to carry out the purposes of this
paragraph, including regulations that may pro-
vide that some or all of the requirements of this
paragraph do not apply in appropriate cases.’’
(b) EFFECTIVE DATE.—The provisions of this sec-
tion shall apply to contributions made on or after January
1, 1994.
1415
SEC. 14272. DISCLOSURE RELATED TO QUID PRO QUO
CONTRIBUTIONS.
(a) DISCLOSURE REQUIREMENT.—Subchapter B of
chapter 61 (relating to information and returns) is amend-
ed by redesignating section 6115 as section 6116 and by
inserting after section 6114 the following new section:
‘‘SEC. 6115. DISCLOSURE RELATED TO QUID PRO QUO CON-
TRIBUTIONS.
‘‘(a) DISCLOSURE REQUIREMENT.—If an organiza-
tion described in section 170(c) (other than paragraph (1)
thereof) receives a quid pro quo contribution, the organi-
zation shall, in connection with the solicitation or receipt
of the contribution—
‘‘(1) inform the donor that the amount of the
contribution that is deductible for Federal income
tax purposes is limited to the excess of the amount
of any money and the value of any property other
than money contributed by the donor over the value
of the goods or services provided by the organiza-
tion, and
‘‘(2) provide the donor with a good faith esti-
mate of the value of such goods or services.
‘‘(b) QUID PRO QUO CONTRIBUTION.—For purposes
of this section, the term ‘quid pro quo contribution’ means
a payment made partly as a contribution and partly in
1416
consideration for goods or services provided to the payor
by the donee organization.’’
(b) PENALTY FOR FAILURE TO DISCLOSE.—Part I
of subchapter B of chapter 68 (relating to assessable pen-
alties) is amended by inserting after section 6713 the fol-
lowing new section:
‘‘SEC. 6714. FAILURE TO MEET DISCLOSURE REQUIRE-
MENTS APPLICABLE TO QUID PRO QUO CON-
TRIBUTIONS.
‘‘(a) IMPOSITION OF PENALTY.—If an organization
fails to meet the disclosure requirement of section 6115
with respect to a quid pro quo contribution, such organiza-
tion shall pay a penalty of $10 for each contribution in
respect of which the organization fails to make the re-
quired disclosure, except that the total penalty imposed
by this subsection with respect to a particular fundraising
event or mailing shall not exceed $5,000.
‘‘(b) REASONABLE CAUSE EXCEPTION.—No penalty
shall be imposed under this section with respect to any
failure if it is shown that such failure is due to reasonable
cause.’’
(c) CLERICAL AMENDMENTS.—
(1) The table for subchapter B of chapter 61
is amended by striking the item relating to section
6115 and inserting the following new item:
1417
‘‘Sec. 6115. Disclosure related to quid pro quo contributions.
‘‘Sec. 6116. Cross reference.’’
(2) The table for part I of subchapter B of
chapter 68 is amended by inserting after the item
for section 6713 the following new item:
‘‘Sec. 6714. Failure to meet disclosure requirements applicable to
quid pro quo contributions.’’
(d) EFFECTIVE DATE.—The provisions of this sec-
tion shall apply to quid pro quo contributions made on
or after January 1, 1994.
SEC. 14273. DISALLOWANCE OF INTEREST ON CERTAIN
OVERPAYMENTS OF TAX.
(a) GENERAL RULE.—Subsection (e) of section 6611
is amended to read as follows:
‘‘(e) DISALLOWANCE
OF INTEREST
ON CERTAIN
OVERPAYMENTS.—
‘‘(1) REFUNDS WITHIN 45 DAYS AFTER RETURN
IS FILED.—If any overpayment of tax imposed by
this title is refunded within 45 days after the last
day prescribed for filing the return of such tax (de-
termined without regard to any extension of time for
filing the return) or, in the case of a return filed
after such last date, is refunded within 45 days after
the date the return is filed, no interest shall be al-
lowed under subsection (a) on such overpayment.
‘‘(2) REFUNDS AFTER CLAIM FOR CREDIT OR
REFUND.—If—
1418
‘‘(A) the taxpayer files a claim for a credit
or refund for any overpayment of tax imposed
by this title, and
‘‘(B) such overpayment is refunded within
45 days after such claim is filed,
no interest shall be allowed on such overpayment
from the date the claim is filed until the day the re-
fund is made.
‘‘(3) IRS INITIATED ADJUSTMENTS.—If an ad-
justment initiated by the Secretary, results in a re-
fund or credit of an overpayment, interest on such
overpayment shall be computed by subtracting 45
days from the number of days interest would other-
wise be allowed with respect to such overpayment.’’
(b) EFFECTIVE DATES.—
(1) Paragraph (1) of section 6611(e) of the In-
ternal Revenue Code of 1986 (as amended by sub-
section (a)) shall apply in the case of returns the
due date for which (determined without regard to
extensions) is on or after January 1, 1994.
(2) Paragraph (2) of section 6611(e) of such
Code (as so amended) shall apply in the case of
claims for credit or refund of any overpayment filed
on or after January 1, 1995, regardless of the tax-
able period to which such refund relates.
1419
(3) Paragraph (3) of section 6611(e) of such
Code (as so amended) shall apply in the case of any
refund paid on or after January 1, 1995, regardless
of the taxable period to which such refund relates.
SEC. 14274. DENIAL OF DEDUCTION RELATING TO TRAVEL
EXPENSES.
(a) IN GENERAL.—Section 274(m) (relating to addi-
tional limitations on travel expenses) is amended by add-
ing at the end thereof the following new paragraph:
‘‘(3) TRAVEL EXPENSES OF SPOUSE, DEPEND-
ENT, OR OTHERS.—No deduction shall be allowed
under this chapter (other than section 217) for trav-
el expenses paid or incurred with respect to a
spouse, dependent, or other individual accompanying
the taxpayer (or an officer or employee of the tax-
payer) on business travel, unless—
‘‘(A) the spouse, dependent, or other indi-
vidual is an employee of the taxpayer,
‘‘(B) the travel of the spouse, dependent,
or other individual is for a bona fide business
purpose, and
‘‘(C) such expenses would otherwise be de-
ductible by the spouse, dependent, or other indi-
vidual.’’
1420
(b) EFFECTIVE DATE.—The amendment made by
this section shall apply to amounts paid or incurred after
December 31, 1993.
SEC. 14275. INCREASE IN WITHHOLDING FROM SUPPLE-
MENTAL WAGE PAYMENTS.
If an employer elects under Treasury Regulation
31.3402 (g)–1 to determine the amount to be deducted
and withheld from any supplemental wage payment by
using a flat percentage rate, the rate to be used in deter-
mining the amount to be so deducted and withheld shall
not be less than 28 percent. The preceding sentence shall
apply to payments made after December 31, 1993.
Subtitle C—Empowerment Zones
and Enterprise Communities, Etc.
PART I—EMPOWERMENT ZONES AND
ENTERPRISE COMMUNITIES
SEC. 
14301. 
DESIGNATION 
AND 
TREATMENT 
OF
EMPOWERMENT 
ZONES 
AND 
ENTERPRISE
COMMUNITIES.
(a) IN GENERAL.—Chapter 1 (relating to normal
taxes and surtaxes) is amended by inserting after sub-
chapter T the following new subchapter:
1421
‘‘Subchapter U—Designation and Treatment
of Empowerment Zones and Enterprise
Communities
‘‘Part I. Designation.
‘‘Part II. Incentives for empowerment zones and enterprise com-
munities.
‘‘Part III. Additional incentives for empowerment zones.
‘‘Part IV. Regulations.
‘‘PART I—DESIGNATION
‘‘Sec. 1391. Designation procedure.
‘‘Sec. 1392. Eligibility criteria.
‘‘Sec. 1393. Definitions and special rules.
‘‘SEC. 1391. DESIGNATION PROCEDURE.
‘‘(a) IN GENERAL.—From among the areas nomi-
nated for designation under this section, the appropriate
Secretaries may, in consultation with the Enterprise
Board, designate empowerment zones and enterprise
communities.
‘‘(b) NUMBER OF DESIGNATIONS.—
‘‘(1) ENTERPRISE COMMUNITIES.—The appro-
priate Secretaries may designate in the aggregate
100 nominated areas as enterprise communities
under this section, subject to the availability of eligi-
ble nominated areas. Of that number, not more than
65 may be designated in urban areas, not more than
30 may be designated in rural areas, and not more
than 5 may be designated by the Secretary of the
Interior in Indian reservations.
1422
‘‘(2) EMPOWERMENT ZONES.—The appropriate
Secretaries may designate in the aggregate 10 nomi-
nated areas as empowerment zones under this sec-
tion, subject to the availability of eligible nominated
areas. Of that number, not more than 6 may be des-
ignated in urban areas, not more than 3 may be des-
ignated in rural areas, and not more than 1 may be
designated by the Secretary of the Interior in an In-
dian reservation. If 6 empowerment zones are des-
ignated in urban areas, no less than 1 shall be des-
ignated in an urban area the most populous city of
which has a population of 500,000 or less. The Sec-
retary of Housing and Urban Development shall des-
ignate empowerment zones located in urban areas in
such a manner that the aggregate population of all
such zones does not exceed 750,000.
‘‘(c) PERIOD DESIGNATIONS MAY BE MADE.—A des-
ignation may be made under this section only after 1993
and before 1996.
‘‘(d) PERIOD FOR WHICH DESIGNATION IS IN EF-
FECT.—
‘‘(1) IN GENERAL.—Any designation under this
section shall remain in effect during the period be-
ginning on the date of the designation and ending
on the earliest of—
1423
‘‘(A) the close of the 10th calendar year
beginning on or after such date of designation,
‘‘(B) the termination date designated by
the State and local governments as provided for
in their nomination, or
‘‘(C) the date the appropriate Secretary re-
vokes the designation.
‘‘(2) REVOCATION OF DESIGNATION.—
‘‘(A) IN GENERAL.—The appropriate Sec-
retary, in consultation with the Enterprise
Board, may revoke the designation under this
section of an area if such Secretary determines
that the local government or the State in which
it is located—
‘‘(i) has modified the boundaries of
the area, or
‘‘(ii) is not complying substantially
with, or fails to make progress in achieving
the benchmarks set forth in, the strategic
plan under subsection (f)(2).
‘‘(B) APPLICABLE PROCEDURES.—A des-
ignation may be revoked by the appropriate
Secretary under subparagraph (A) only after a
hearing on the record involving officials of the
State or local government involved.
1424
‘‘(e) LIMITATIONS ON DESIGNATIONS.—An area may
be designated under subsection (a) only if—
‘‘(1) the area is nominated by 1 or more local
governments and the State or States in which it is
located for designation under this section,
‘‘(2) such State or States and the local govern-
ments have the authority—
‘‘(A) to nominate the area for designation
under this section, and
‘‘(B) to provide the assurances described in
paragraph (3),
‘‘(3) such State or States and the local govern-
ments provide written assurances satisfactory to the
appropriate Secretary that the strategic plan de-
scribed in the application under subsection (f)(2) for
such area will be implemented,
‘‘(4) the appropriate Secretary determines that
any information furnished is reasonably accurate,
and
‘‘(5) such State or States and local govern-
ments certify that no portion of the area nominated
is already included in an empowerment zone or in an
enterprise community or in an area otherwise nomi-
nated to be designated under this section.
1425
‘‘(f) APPLICATION.—An application for designation
as an empowerment zone or as an enterprise community
shall—
‘‘(1) demonstrate that the nominated area sat-
isfies the eligibility criteria described in section
1392,
‘‘(2) include a strategic plan for accomplishing
the purposes of this subchapter that—
‘‘(A) describes the coordinated economic,
human, community, and physical development
plan and related activities proposed for the
nominated area,
‘‘(B) describes the process by which the af-
fected community is a full partner in the proc-
ess of developing and implementing the plan
and the extent to which local institutions and
organizations have contributed to the planning
process,
‘‘(C) identifies the amount of State, local,
and private resources that will be available in
the nominated area and the private/public part-
nerships to be used, which may include partici-
pation by, and cooperation with, universities,
medical centers, and other private and public
entities,
1426
‘‘(D) identifies the funding requested
under any Federal program in support of the
proposed economic, human, community, and
physical development and related activities,
‘‘(E) identifies baselines, methods, and
benchmarks for measuring the success of carry-
ing out the strategic plan, including the extent
to which poor persons and families will be em-
powered to become economically self-sufficient,
and
‘‘(F) does not include any action to assist
any establishment in relocating from one area
outside the nominated area to the nominated
area, except that assistance for the expansion of
an existing business entity through the estab-
lishment of a new branch, affiliate, or subsidi-
ary is permitted if—
‘‘(i) the establishment of the new
branch, affiliate, or subsidiary will not re-
sult in a decrease in employment in the
area of original location or in any other
area where the existing business entity
conducts business operations, and
‘‘(ii) there is no reason to believe that
the new branch, affiliate, or subsidiary is
1427
being established with the intention of clos-
ing down the operations of the existing
business entity in the area of its original
location or in any other area where the ex-
isting business entity conducts business op-
eration, and
‘‘(3) include such other information as may be
required by the appropriate Secretary or the Enter-
prise Board.
‘‘SEC. 1392. ELIGIBILITY CRITERIA.
‘‘(a) IN GENERAL.—A nominated area shall be eligi-
ble for designation under section 1391 only if it meets the
following criteria:
‘‘(1) POPULATION.—The nominated area has a
maximum population of—
‘‘(A) in the case of an urban area, the
lesser of—
‘‘(i) 200,000, or
‘‘(ii) the greater of 50,000 or 10 per-
cent of the population of the most popu-
lous city located within the nominated
area, and
‘‘(B) in the case of a rural area, 30,000.
1428
‘‘(2) DISTRESS.—The nominated area is one of
pervasive poverty, unemployment, and general dis-
tress.
‘‘(3) SIZE.—The nominated area—
‘‘(A) does not exceed 20 square miles if an
urban area or 1,000 square miles if a rural
area or an Indian reservation,
‘‘(B) has a boundary which is continuous,
or, except in the case of a rural area located in
more than 1 State, consists of not more than
3 noncontiguous parcels,
‘‘(C)(i) in the case of an urban area, is lo-
cated entirely within no more than 2 contiguous
States, and
‘‘(ii) in the case of a rural area, is located
entirely within no more than 3 contiguous
States, and
‘‘(D) does not include any portion of a
central business district (as such term is used
for purposes of the most recent Census of Re-
tail Trade) unless the poverty rate for each
population census tract in such district is not
less than 35 percent (30 percent in the case of
an enterprise community).
‘‘(4) POVERTY RATE.—The poverty rate—
1429
‘‘(A) for each population census tract with-
in the nominated area is not less than 20 per-
cent,
‘‘(B) for at least 90 percent of the popu-
lation census tracts within the nominated area
is not less than 25 percent, and
‘‘(C) for at least 50 percent of the popu-
lation census tracts within the nominated area
is not less than 35 percent.
‘‘(b) SPECIAL RULES RELATING TO DETERMINATION
OF POVERTY RATE.—For purposes of subsection (a)(4)—
‘‘(1) TREATMENT
OF
CENSUS
TRACTS
WITH
SMALL POPULATIONS.—
‘‘(A) TRACTS WITH NO POPULATION.—In
the case of a population census tract with no
population—
‘‘(i) such tract shall be treated as hav-
ing a poverty rate which meets the require-
ments of subparagraphs (A) and (B) of
subsection (a)(4), but
‘‘(ii) such tract shall be treated as
having a zero poverty rate for purposes of
applying subparagraph (C) thereof.
‘‘(B) TRACTS WITH POPULATIONS OF LESS
THAN 2,000.—A population census tract with a
1430
population of less than 2,000 shall be treated as
having a poverty rate which meets the require-
ments of subparagraphs (A) and (B) of sub-
section (a)(4) if more than 75 percent of such
tract is zoned for commercial or industrial use.
‘‘(2) 
DISCRETION
TO
ADJUST
REQUIRE-
MENTS.—Where necessary to carry out the purposes
of this subchapter, the appropriate Secretary may
reduce by 5 percentage points one of the following
thresholds for not more than 10 percent of the popu-
lation census tracts (or, if fewer, 5 population cen-
sus tracts) in the nominated area:
‘‘(A) The 20 percent threshold in sub-
section (a)(4)(A).
‘‘(B) The 25 percent threshold in sub-
section (a)(4)(B).
‘‘(C) The 35 percent threshold in sub-
section (a)(4)(C).
If the appropriate Secretary elects to reduce the
threshold under subparagraph (C) for an enterprise
community, such Secretary may (in lieu of applying
the preceding sentence) reduce by 10 percentage
points the threshold under subparagraph (C) for 3
population census tracts.
1431
‘‘(3) EACH NONCONTIGUOUS AREA MUST SAT-
ISFY POVERTY RATE RULE.—A nominated area may
not include a noncontiguous parcel unless such par-
cel separately meets (subject to paragraphs (1) and
(2)) the criteria set forth in subsection (a)(4).
‘‘(4) AREAS NOT WITHIN CENSUS TRACTS.—In
the case of an area which is not tracted for popu-
lation census tracts, the equivalent county divisions
(as defined by the Bureau of the Census for pur-
poses of defining poverty areas) shall be used for
purposes of determining poverty rates.
‘‘(c) FACTORS TO CONSIDER.—From among the
nominated areas eligible for designation under section
1391 by the appropriate Secretary, such appropriate Sec-
retary shall make designations of empowerment zones and
enterprise communities on the basis of—
‘‘(1) the effectiveness of the strategic plan sub-
mitted pursuant to section 1391(f)(2) and the assur-
ances made pursuant to section 1391(e)(3), and
‘‘(2) criteria specified by the Enterprise Board.
‘‘SEC. 1393. DEFINITIONS AND SPECIAL RULES.
‘‘(a) 
IN
GENERAL.—For 
purposes 
of 
this
subchapter—
‘‘(1) APPROPRIATE SECRETARY.—The term ‘ap-
propriate Secretary’ means—
1432
‘‘(A) the Secretary of Housing and Urban
Development in the case of any nominated area
which is located in an urban area,
‘‘(B) the Secretary of Agriculture in the
case of any nominated area which is located in
a rural area, and
‘‘(C) the Secretary of the Interior in the
case of any nominated area which is located in
an Indian reservation.
‘‘(2) ENTERPRISE BOARD.—The term ‘Enter-
prise Board’ means any board hereafter established
and designated for purposes of this subchapter as
the ‘Enterprise Board’.
‘‘(3) RURAL
AREA.—The term ‘rural area’
means any area which is—
‘‘(A) outside of a metropolitan statistical
area 
(within 
the 
meaning 
of 
section
143(k)(2)(B)), or
‘‘(B) determined by the Secretary of Agri-
culture, after consultation with the Secretary of
Commerce, to be a rural area.
‘‘(4) URBAN
AREA.—The term ‘urban area’
means an area which is not a rural area.
‘‘(5) INDIAN RESERVATION.—
1433
‘‘(A) IN GENERAL.—The term ‘Indian res-
ervation’ means a reservation as defined in—
‘‘(i) section 3(d) of the Indian Financ-
ing Act of 1974 (25 U.S.C. 1452(d)), or
‘‘(ii) section 4(10) of the Indian Child
Welfare 
Act 
of 
1978 
(25 
U.S.C.
1903(10)).
‘‘(B) GOVERNMENTS.—In the case of an
area in an Indian reservation, the reservation
governing body (as determined by the Secretary
of the Interior) shall be deemed to be both the
State and local governments with respect to
such area.
‘‘(6) LOCAL
GOVERNMENT.—The term ‘local
government’ means—
‘‘(A) any county, city, town, township, par-
ish, village, or other general purpose political
subdivision of a State, and
‘‘(B) any combination of political subdivi-
sions described in subparagraph (A) recognized
by the appropriate Secretary.
‘‘(7) NOMINATED AREA.—The term ‘nominated
area’ means an area which is nominated by 1 or
more local governments and the State or States in
1434
which it is located for designation under section
1391.
‘‘(8) GOVERNMENTS.—If more than 1 State or
local government seeks to nominate an area as a tax
enterprise zone, any reference to, or requirement of,
this subchapter shall apply to all such governments.
‘‘(9) SPECIAL RULE.—An area shall be treated
as nominated by a State and a local government if
it is nominated by such other entity as may be speci-
fied by the Enterprise Board.
‘‘(10) USE OF CENSUS DATA.—Population and
poverty rate shall be determined by the most recent
decennial census data available.
‘‘(b) EMPOWERMENT ZONE; ENTERPRISE COMMU-
NITY.—For purposes of this title, the terms ‘empowerment
zone’ and ‘enterprise community’ mean areas designated
as such under section 1391.
‘‘PART II—INCENTIVES FOR EMPOWERMENT
ZONES AND ENTERPRISE COMMUNITIES
‘‘Sec. 1394. Incentives.
‘‘SEC. 1394. INCENTIVES.
‘‘(a) INCREASE IN LOW INCOME HOUSING CREDIT.—
For purposes of section 42(d)(5)(C), a building shall be
treated as located in a qualified census tract if—
1435
‘‘(1) such building is located in a census tract
having a poverty rate of at least 30 percent (deter-
mined in accordance with section 1393(a)(10)), and
‘‘(2) 
such 
building 
is 
located 
in 
an
empowerment zone or an enterprise community.
‘‘(b) TAX EXEMPT ENTERPRISE ZONE FACILITY
BONDS.—
‘‘(1) IN GENERAL.—For purposes of part IV of
subchapter B of chapter 1 (relating to tax exemption
requirements for State and local bonds), the term
‘exempt facility bond’ includes any bond issued as
part of an issue 95 percent or more of the net pro-
ceeds (as defined in section 150(a)(3)) of which are
to be used to provide any enterprise zone facility.
‘‘(2) ENTERPRISE ZONE FACILITY.—For pur-
poses of this subsection—
‘‘(A) IN GENERAL.—The term ‘enterprise
zone facility’ means any qualified zone property
the principal user of which is an enterprise zone
business (as defined in section 1397D), and any
land which is functionally related and subordi-
nate to such property.
‘‘(B) QUALIFIED
ZONE
PROPERTY.—The
term ‘qualified zone property’ has the meaning
1436
given such term by section 1397B(c); except
that—
‘‘(i) section 1397B(c)(3) shall not
apply, and
‘‘(ii) the references to empowerment
zones shall be treated as including ref-
erences to enterprise communities.
‘‘(3) LIMITATION ON AMOUNT OF BONDS.—
‘‘(A) IN
GENERAL.—Paragraph (1) shall
not apply to any issue if the aggregate amount
of outstanding enterprise zone facility bonds al-
locable to any enterprise zone business (taking
into account such issue) exceeds—
‘‘(i) $3,000,000 with respect to any 1
empowerment zone or enterprise commu-
nity, or
‘‘(ii) $20,000,000 with respect to all
empowerment zones and enterprise com-
munities.
‘‘(B) AGGREGATE ENTERPRISE ZONE FA-
CILITY BOND BENEFIT.—For purposes of sub-
paragraph (A), the aggregate amount of out-
standing enterprise zone facility bonds allocable
to any business shall be determined under rules
similar to the rules of section 144(a)(10), tak-
1437
ing into account only bonds to which paragraph
(1) applies.
‘‘(4) ACQUISITION
OF
LAND
AND
EXISTING
PROPERTY PERMITTED.—The requirements of sec-
tions 147(c)(1)(A) and 147(d) shall not apply to any
bond described in paragraph (1).
‘‘(5) PARTIAL
EXEMPTION
FROM
VOLUME
CAP.—Only for purposes of section 146, the term
‘private activity bond’ shall not include 50 percent of
any bond issued as part of an issue described in
paragraph (1).
‘‘(6) PENALTY
FOR
CEASING
TO
MEET
RE-
QUIREMENTS.—
‘‘(A) FAILURES
CORRECTED.—An issue
which fails to meet 1 or more of the require-
ments of paragraphs (1) and (2) shall be
treated as meeting such requirements if—
‘‘(i) the issuer and any principal user
in good faith attempted to meet such re-
quirements, and
‘‘(ii) any failure to meet such require-
ments is corrected within a reasonable pe-
riod after such failure is first discovered.
‘‘(B) LOSS OF DEDUCTIONS WHERE FACIL-
ITY CEASES TO BE QUALIFIED.—No deduction
1438
shall be allowed under this chapter for interest
on any financing provided from any bond to
which paragraph (1) applies with respect to any
facility to the extent such interest accrues dur-
ing the period beginning on the first day of the
calendar year which includes the date on
which—
‘‘(i) substantially all of the facility
with respect to which the financing was
provided 
ceases 
to 
be 
used 
in 
an
empowerment zone or enterprise commu-
nity, or
‘‘(ii) the principal user of such facility
ceases to be an enterprise zone business
(as defined in section 1397D, but treating
references to empowerment zones as in-
cluding references to enterprise commu-
nities).
‘‘(C) EXCEPTION IF ZONE CEASES.—Sub-
paragraphs (A) and (B) shall not apply solely
by reason of the termination or revocation of a
designation as an empowerment zone or an en-
terprise community.
1439
‘‘(D) EXCEPTION
FOR
BANKRUPTCY.—
Subparagraphs (A) and (B) shall not apply to
any cessation resulting from bankruptcy.
‘‘(c) ENTERPRISE ZONE FACILITY BONDS NOT SUB-
JECT TO INTEREST DEDUCTION LIMITATIONS ON FINAN-
CIAL INSTITUTIONS.—Any tax-exempt bond described in
subsection (b)(1)—
‘‘(1) shall be treated as acquired before August
8, 1986, for purposes of sections 265(b) and
291(e)(1)(B), and
‘‘(2) shall not be taken into account in deter-
mining whether any issuer is a qualified small issuer
for purposes of section 265(b).
‘‘(d) ADDITIONAL LOW-INCOME HOUSING CREDIT
AMOUNT.—
‘‘(1) IN GENERAL.—Each State which includes
any empowerment zone or enterprise community
shall receive an additional State housing credit ceil-
ing amount for purposes of section 42 of $818,000
for each such zone or community.
‘‘(2) ADDITIONAL
AMOUNT
MUST
BE
ALLO-
CATED TO BUILDINGS IN DESIGNATED AREAS.—
‘‘(A) IN GENERAL.—The portion of the ad-
ditional amount received under paragraph (1)
by reason of any empowerment zone or enter-
1440
prise community which may be applied to in-
crease the State housing credit ceiling for any
calendar year shall not exceed the lesser of—
‘‘(i) the unused portion of such addi-
tional amount with respect to such zone or
community, or
‘‘(ii) the aggregate housing credit dol-
lar amount allocated from such ceiling for
such year to buildings located in such zone
or community.
‘‘(B) UNUSED PORTION.—For purposes of
subparagraph (A), the unused portion for any
calendar year of the additional amount received
under paragraph (1) is the amount equal to the
excess of—
‘‘(i) the additional amount received
under paragraph (1) by the State by rea-
son of the zone or community, over
‘‘(ii) the aggregate of the increases in
the State housing credit ceiling by reason
of such amount for all prior calendar
years.
‘‘(3) AVAILABILITY OF ADDITIONAL AMOUNT.—
None of the additional amount received under para-
graph (1) may be applied after 1996.
1441
‘‘(4) AREAS
LOCATED
IN
MORE
THAN
STATE.—In the case of an empowerment zone or en-
terprise community which is located in more than 1
State, the $818,000 amount shall be allocated
among such States in proportion to the population
of such zone or community which is within each
such State.
‘‘(5) ZONES
LOCATED
IN
CONSTITUTIONAL
HOME RULE CITIES.—If any empowerment zone or
enterprise community is located in a constitutional
home rule city (as defined in section 42(h)(4)(E)),
the additional amount received under paragraph (1)
shall be allocated to such city and shall not be taken
into account in determining such city’s share of the
State 
housing 
credit 
ceiling 
under 
section
42(h)(4)(E).
‘‘PART III—ADDITIONAL INCENTIVES FOR
EMPOWERMENT ZONES
‘‘SUBPART A. Empowerment zone employment credit.
‘‘SUBPART B. Zone resident empowerment savings credit.
‘‘SUBPART C. Depreciation and other incentives.
‘‘Subpart A—Empowerment Zone Employment Credit
‘‘Sec. 1396. Empowerment zone employment credit.
‘‘Sec. 1397. Other definitions and special rules.
‘‘SEC. 1396. EMPOWERMENT ZONE EMPLOYMENT CREDIT.
‘‘(a) AMOUNT OF CREDIT.—For purposes of section
38, the amount of the empowerment zone employment
1442
credit determined under this section with respect to any
employer for any taxable year is the applicable percentage
of the qualified zone wages paid or incurred during the
calendar year which ends with or within such taxable year.
‘‘(b) APPLICABLE PERCENTAGE.—For purposes of
this section, the term ‘applicable percentage’ means the
percentage determined in accordance with the following
table:
‘‘In the case of wages paid or
The applicable
incurred during calendar year:
percentage is:
1994 through 2000 ........................................
2001 ...............................................................
2002 ...............................................................
2003 ...............................................................
2004 ...............................................................
‘‘(c) QUALIFIED ZONE WAGES.—
‘‘(1) IN GENERAL.—For purposes of this sec-
tion, the term ‘qualified zone wages’ means any
wages paid or incurred by an employer for services
performed by an employee while such employee is a
qualified zone employee.
‘‘(2) ONLY FIRST $20,000 OF WAGES PER YEAR
TAKEN INTO ACCOUNT.—With respect to each quali-
fied zone employee, the amount of qualified zone
wages which may be taken into account for a cal-
endar year shall not exceed $20,000.
‘‘(3) COORDINATION
WITH
TARGETED
JOBS
CREDIT.—
1443
‘‘(A) IN
GENERAL.—The term ‘qualified
zone wages’ shall not include wages taken into
account in determining the credit under section
51.
‘‘(B) COORDINATION
WITH
PARAGRAPH
(2).—The $20,000 amount in paragraph (2)
shall be reduced for any calendar year by the
amount of wages paid or incurred during such
year which are taken into account in determin-
ing the credit under section 51.
‘‘(d) QUALIFIED ZONE EMPLOYEE.—For purposes of
this section—
‘‘(1) IN GENERAL.—Except as otherwise pro-
vided in this subsection, the term ‘qualified zone em-
ployee’ means, with respect to any period, any em-
ployee of an employer if—
‘‘(A) substantially all of the services per-
formed during such period by such employee for
such 
employer 
are 
performed 
within 
an
empowerment zone in a trade or business of the
employer, and
‘‘(B) the principal place of abode of such
employee while performing such services is
within such empowerment zone.
1444
‘‘(2) CERTAIN INDIVIDUALS NOT ELIGIBLE.—
The term ‘qualified zone employee’ shall not
include—
‘‘(A) any individual described in subpara-
graph (A), (B), or (C) of section 51(i)(1),
‘‘(B) any 5-percent owner (as defined in
section 416(i)(1)(B)),
‘‘(C) any individual employed by the em-
ployer for less than 90 days,
‘‘(D) any individual employed by the em-
ployer at any facility described in section
144(c)(6)(B), and
‘‘(E) any individual employed by the em-
ployer in a trade or business the principal activ-
ity of which is farming (within the meaning of
subparagraphs 
(A) 
or 
(B) 
of 
section
2032A(e)(5)), but only if, as of the close of the
taxable year, the sum of—
‘‘(i) the aggregate unadjusted bases
(or, if greater, the fair market value) of
the assets owned by the employer which
are used in such a trade or business, and
‘‘(ii) the aggregate value of assets
leased by the employer which are used in
such a trade or business (as determined
1445
under regulations prescribed by the Sec-
retary),
exceeds $500,000.
‘‘(3) SPECIAL
RULES
RELATED
TO
TERMI-
NATION OF EMPLOYMENT.—
‘‘(A) IN
GENERAL.—Paragraph (2)(C)
shall not apply to—
‘‘(i) a termination of employment of
an individual who before the close of the
period referred to in paragraph (2)(C) be-
comes disabled to perform the services of
such employment unless such disability is
removed before the close of such period
and the taxpayer fails to offer reemploy-
ment to such individual, or
‘‘(ii) a termination of employment of
an individual if it is determined under the
applicable State unemployment compensa-
tion law that the termination was due to
the misconduct of such individual.
‘‘(B) CHANGES IN FORM OF BUSINESS.—
For purposes of paragraph (2)(C), the employ-
ment relationship between the taxpayer and an
employee shall not be treated as terminated—
1446
‘‘(i) by a transaction to which section
381(a) applies if the employee continues to
be employed by the acquiring corporation,
or
‘‘(ii) by reason of a mere change in
the form of conducting the trade or busi-
ness of the taxpayer if the employee con-
tinues to be employed in such trade or
business and the taxpayer retains a sub-
stantial interest in such trade or business.
‘‘SEC. 1397. OTHER DEFINITIONS AND SPECIAL RULES.
‘‘(a) WAGES.—For purposes of this subpart—
‘‘(1) IN GENERAL.—The term ‘wages’ has the
same meaning as when used in section 51.
‘‘(2) CERTAIN
TRAINING
AND
EDUCATIONAL
BENEFITS.—
‘‘(A) 
IN
GENERAL.—The 
following
amounts shall be treated as wages paid to an
employee:
‘‘(i) Any amount paid or incurred by
an employer which is excludable from the
gross income of an employee under section
127, but only to the extent paid or in-
curred to a person not related to the
employer.
1447
‘‘(ii) In the case of an employee who
has not attained the age of 19, any
amount paid or incurred by an employer
for any youth training program operated
by such employer in conjunction with local
education officials.
‘‘(B) RELATED PERSON.—A person is re-
lated to any other person if the person bears a
relationship to such other person specified in
section 267(b) or 707(b)(1), or such person and
such other person are engaged in trades or
businesses under common control (within the
meaning of subsections (a) and (b) of section
52). For purposes of the preceding sentence, in
applying section 267(b) or 707(b)(1), ‘10 per-
cent’ shall be substituted for ‘50 percent’.
‘‘(b) CONTROLLED GROUPS.—For purposes of this
subpart—
‘‘(1) all employers treated as a single employer
under subsection (a) or (b) of section 52 shall be
treated as a single employer for purposes of this
subpart, and
‘‘(2) the credit (if any) determined under sec-
tion 1396 with respect to each such employer shall
1448
be its proportionate share of the wages giving rise
to such credit.
‘‘(c) CERTAIN OTHER RULES MADE APPLICABLE.—
For purposes of this subpart, rules similar to the rules
of section 51(k) and subsections (c), (d), and (e) of section
52 shall apply.
‘‘(d) NOTICE OF AVAILABILITY OF ADVANCE PAY-
MENT
OF EARNED INCOME CREDIT.—Each employer
shall take reasonable steps to notify all qualified zone em-
ployees of the availability to eligible individuals of receiv-
ing advanced payments of the credit under section 32 (re-
lating to the earned income credit).
‘‘Subpart B—Zone Resident Empowerment Savings
Credit
‘‘Sec. 1397A. Zone resident empowerment savings credit.
‘‘SEC. 1397A. ZONE RESIDENT EMPOWERMENT SAVINGS
CREDIT.
‘‘(a) GENERAL RULE.—For purposes of section 38,
the amount of the zone resident empowerment savings
credit determined under this section with respect to any
employer for any taxable year is 50 percent of the quali-
fied savings contributions for the taxable year.
‘‘(b) QUALIFIED
SAVINGS
CONTRIBUTIONS.—For
purposes of this section—
1449
‘‘(1) IN GENERAL.—The term ‘qualified savings
contribution’ means any contribution by an employer
to a defined contribution plan—
‘‘(A) which is made on behalf of an em-
ployee in connection with services performed by
such employee while such employee is a quali-
fied zone employee, and
‘‘(B) with respect to which the employee
has a nonforfeitable right.
‘‘(2) LIMITATION BASED ON COMPENSATION.—
‘‘(A) IN GENERAL.—The qualified savings
contributions taken into account with respect to
any qualified zone employee for any taxable
year shall not exceed an amount equal to 2 per-
cent of so much of the employee’s compensation
(as defined in section 414(s)) as does not
exceed $35,000.
‘‘(B) ZONE DESIGNATION IN EFFECT FOR
PARTIAL YEAR.—If a designation of an area as
an empowerment zone is in effect for less than
the entire taxable year, the $35,000 amount
under subparagraph (A) shall be ratably re-
duced to reflect the portion of the year such
designation is not in effect.
1450
‘‘(3) CERTAIN
CONTRIBUTIONS
EXCLUDED.—
The term ‘qualified savings contribution’ shall not
include any contribution—
‘‘(A) to a plan subject to the funding re-
quirements of section 412,
‘‘(B) to a tax credit employee stock owner-
ship plan (as defined in section 409(a)) or to an
employee stock ownership plan (as defined in
section 4975(e)(7)),
‘‘(C) to a stock bonus plan, or
‘‘(D) which is an elective deferral (within
the meaning of section 402(g)(3)).
‘‘(4) SIMPLIFIED EMPLOYEE PENSION.—A con-
tribution to an individual savings plan pursuant to
a simplified employee pension (as defined in section
408(k)) shall be treated as a contribution to a de-
fined contribution plan.
‘‘(c) EMPLOYER REQUIREMENTS.—This section shall
apply to an employer for any taxable year only if—
‘‘(1) the employer elects the application of this
section, and
‘‘(2) the plan pursuant to which any qualified
savings contribution is made provides that any con-
tribution to such plan (whether or not a qualified
savings contribution) may be withdrawn by a quali-
1451
fied zone employee as described in section 72(t)(2)
(B) or (D).
‘‘(d) DEFINITIONS.—For purposes of this section—
‘‘(1) QUALIFIED ZONE EMPLOYEE.—The term
‘qualified zone employee’ has the meaning given such
term by section 1396(d).
‘‘(2) DEFINED
CONTRIBUTION
PLAN.—The
term ‘defined contribution plan’ means a defined
contribution plan (as defined in section 414(i))
which is described in section 401(a) and includes a
trust exempt from tax under section 501(a).
‘‘(e) TREATMENT OF PLANS.—A plan shall not be
treated as failing to meet any requirement of part I of
subchapter D of chapter 1 by reason of permitting with-
drawals required to be permitted under subsection (c)(2).
‘‘Subpart C—Depreciation and Other Incentives
‘‘Sec. 1397B. Depreciation benefits.
‘‘Sec. 1397C. Additional exclusion from volume cap for certain en-
terprise zone facility bonds.
‘‘Sec. 1397D. Enterprise zone business.
‘‘SEC. 1397B. DEPRECIATION BENEFITS.
‘‘(a) INCREASE
IN EXPENSING UNDER SECTION
179.—
‘‘(1) IN GENERAL.—In the case of an enterprise
zone business, for purposes of section 179—
‘‘(A) qualified zone property shall be treat-
ed as section 179 property,
1452
‘‘(B) 
the 
limitation 
under 
section
179(b)(1) shall be increased by the lesser of—
‘‘(i) $50,000, or
‘‘(ii) the cost of qualified zone prop-
erty placed in service during the taxable
year, and
‘‘(C) section 179(b)(2) shall be applied by
substituting ‘by one-half of the amount by
which the cost of qualified zone property (other
than real property) and other section 179 prop-
erty’ for ‘by the amount by which the cost of
section 179 property’.
‘‘(b) ACCELERATED DEPRECIATION.—
‘‘(1) IN
GENERAL.—For purposes of section
168(a), with respect to qualified zone property of an
enterprise zone business, the applicable recovery pe-
riod shall be determined in accordance with the table
contained in paragraph (2) in lieu of the table con-
tained in section 168(c).
‘‘(2) APPLICABLE
RECOVERY
PERIOD
FOR
QUALIFIED ZONE PROPERTY.—For purposes of para-
graph (1)—
The applicable
‘‘In the case of:
recovery period is:
3-year property ........................................................................
2 years
5-year property ........................................................................
3 years
7-year property ........................................................................
4 years
10-year property ......................................................................
6 years
15-year property ......................................................................
9 years
1453
The applicable
‘‘In the case of:
recovery period is:
20-year property ......................................................................
12 years
Nonresidential real property ....................................................
22 years.
‘‘(3) DEDUCTION
ALLOWED
IN
COMPUTING
MINIMUM TAX.—Paragraph (1) shall apply for pur-
poses of determining alternative minimum taxable
income under section 55.
‘‘(c) QUALIFIED ZONE PROPERTY.—For purposes of
this section—
‘‘(1) IN GENERAL.—The term ‘qualified zone
property’ means any property to which section 168
applies (or would apply but for section 179) if—
‘‘(A) such property was acquired by the
taxpayer by purchase (as defined in section
179(d)(2)) after the date on which the designa-
tion of the empowerment zone took effect,
‘‘(B) the original use of which in an
empowerment zone commences with the tax-
payer, and
‘‘(C) substantially all of the use of which
is in an empowerment zone and is in the active
conduct of a trade or business by the taxpayer
in such zone.
‘‘(2) SPECIAL
RULE
FOR
SUBSTANTIAL
REN-
OVATIONS.—In the case of any property which is
substantially renovated by the taxpayer, the require-
1454
ments of subparagraphs (A) and (B) of paragraph
(1) shall be treated as satisfied. For purposes of the
preceding sentence, property shall be treated as sub-
stantially renovated by the taxpayer if, during any
24-month period beginning after the date on which
the designation of the empowerment zone took ef-
fect, additions to basis with respect to such property
in the hands of the taxpayer exceed the greater of
(i) an amount equal to the adjusted basis at the be-
ginning of such 24-month period in the hands of the
taxpayer, or (ii) $5,000.
‘‘(3) EXCEPTION FOR ALTERNATIVE DEPRECIA-
TION
PROPERTY.—The term ‘qualified zone prop-
erty’ does not include any property to which the al-
ternative depreciation system under section 168(g)
applies, determined—
‘‘(A) without regard to section 168(g)(7)
(relating to election to use alternative deprecia-
tion system), and
‘‘(B) after the application of section
280F(b) (relating to listed property with limited
business use).
‘‘(d) SPECIAL RULES FOR SALE-LEASEBACKS.—For
purposes of subsection (c)(1)(B), if property is sold and
leased back by the taxpayer within 3 months after the date
1455
such property was originally placed in service, such prop-
erty shall be treated as originally placed in service not ear-
lier than the date on which such property is used under
the leaseback.
‘‘(e) RECAPTURE.—Rules similar to the rules under
section 179(d)(10) shall apply with respect to any quali-
fied zone property of any business which ceases to be an
enterprise zone business.
‘‘SEC. 1397C. ADDITIONAL EXCLUSION FROM VOLUME CAP
FOR CERTAIN ENTERPRISE ZONE FACILITY
BONDS.
‘‘(a) IN GENERAL.—Section 1394(b)(5) shall be ap-
plied by substituting ‘75 percent’ for ‘50 percent’ in the
case of any bond described in section 1394(b)(1) issued
as part of an issue 95 percent or more of the net proceeds
(as defined in section 150(a)(3)) of which are used to pro-
vide qualified zone property the principal user of which
is any enterprise zone business if the ownership require-
ments of subsection (b) are met with respect to such
business.
‘‘(b) OWNERSHIP REQUIREMENTS.—The ownership
requirements of this subsection are met with respect to
an enterprise zone business if—
1456
‘‘(1) in the case of a sole proprietorship, the
principal place of abode of the proprietor is in an
empowerment zone,
‘‘(2) in the case of a corporation, more than 50
percent of the stock (by vote and value) in the cor-
poration is owned (directly or indirectly) by individ-
uals whose principal place of abode is in an
empowerment zone, and
‘‘(3) in the case of a partnership, more than 50
percent of the capital and profits interests in the
partnership is owned (directly or indirectly) by indi-
viduals whose principal place of abode is in an
empowerment zone.
‘‘SEC. 1397D. ENTERPRISE ZONE BUSINESS DEFINED.
‘‘(a) IN GENERAL.—For purposes of this subpart, the
term ‘enterprise zone business’ means—
‘‘(1) any qualified business entity, and
‘‘(2) any qualified proprietorship.
‘‘(b) QUALIFIED BUSINESS ENTITY.—For purposes
of this section, the term ‘qualified business entity’ means,
with respect to any taxable year, any corporation or part-
nership if for such year—
‘‘(1) every trade or business of such entity is
the active conduct of a qualified business within an
empowerment zone,
1457
‘‘(2) at least 80 percent of the total gross in-
come of such entity is derived from the active con-
duct of such business,
‘‘(3) substantially all of the use of the tangible
property of such entity (whether owned or leased) is
within an empowerment zone,
‘‘(4) substantially all of the intangible property
of such entity is used in, and exclusively related to,
the active conduct of any such business,
‘‘(5) substantially all of the services performed
for such entity by its employees are performed in an
empowerment zone,
‘‘(6) at least 35 percent of its employees are
residents of an empowerment zone,
‘‘(7) less than 5 percent of the average of the
aggregate unadjusted bases of the property of such
entity is attributable to collectibles (as defined in
section 408(m)(2)) other than collectibles that are
held primarily for sale to customers in the ordinary
course of such business, and
‘‘(8) less than 5 percent of the average of the
aggregate unadjusted bases of the property of such
entity is attributable to nonqualified financial prop-
erty.
1458
‘‘(c) QUALIFIED PROPRIETORSHIP.—For purposes of
this section, the term ‘qualified proprietorship’ means,
with respect to any taxable year, any qualified business
carried on by an individual as a proprietorship if for such
year—
‘‘(1) at least 80 percent of the total gross in-
come of such individual from such business is de-
rived from the active conduct of such business in an
empowerment zone,
‘‘(2) substantially all of the use of the tangible
property of such individual in such business (wheth-
er owned or leased) is within an empowerment zone,
‘‘(3) substantially all of the intangible property
of such business is used in, and exclusively related
to, the active conduct of such business,
‘‘(4) substantially all of the services performed
for such individual in such business by employees of
such business are performed in an empowerment
zone,
‘‘(5) at least 35 percent of such employees are
residents of an empowerment zone,
‘‘(6) less than 5 percent of the average of the
aggregate unadjusted bases of the property of such
individual which is used in such business is attrib-
utable 
to 
collectibles 
(as 
defined 
in 
section
1459
408(m)(2)) other than collectibles that are held pri-
marily for sale to customers in the ordinary course
of such business, and
‘‘(7) less than 5 percent of the average of the
aggregate unadjusted bases of the property of such
individual which is used in such business is attrib-
utable to nonqualified financial property.
For purposes of this subsection, the term ‘employee’ in-
cludes the proprietor.
‘‘(d) QUALIFIED BUSINESS.—For purposes of this
section—
‘‘(1) IN GENERAL.—Except as otherwise pro-
vided in this subsection, the term ‘qualified business’
means any trade or business.
‘‘(2) RENTAL OF REAL PROPERTY.—The rental
to 
others 
of 
real 
property 
located 
in 
an
empowerment zone shall be treated as a qualified
business if and only if—
‘‘(A) the property is not residential rental
property (as defined in section 168(e)(2)), and
‘‘(B) at least 50 percent of the gross rental
income from the real property is from enter-
prise zone businesses.
‘‘(3) RENTAL OF TANGIBLE PERSONAL PROP-
ERTY.—The rental to others of tangible personal
1460
property shall be treated as a qualified business if
and only if substantially all of the rental of such
property is by enterprise zone businesses or by resi-
dents of an empowerment zone.
‘‘(4) TREATMENT OF BUSINESS HOLDING IN-
TANGIBLES.—The term ‘qualified business’ shall not
include any trade or business consisting predomi-
nantly of the development or holding of intangibles
for sale or license.
‘‘(5) CERTAIN
BUSINESSES
EXCLUDED.—The
term ‘qualified business’ shall not include—
‘‘(A) any trade or business consisting of
the operation of any facility described in section
144(c)(6)(B), and
‘‘(B) any trade or business the principal
activity of which is farming (within the meaning
of subparagraphs (A) or (B) of section
2032A(e)(5)), but only if, as of the close of the
preceding taxable year, the sum of—
‘‘(i) the aggregate unadjusted bases
(or, if greater, the fair market value) of
the assets owned by the taxpayer which are
used in such a trade or business, and
1461
‘‘(ii) the aggregate value of assets
leased by the taxpayer which are used in
such a trade or business,
exceeds $500,000.
For purposes of subparagraph (B), rules similar to
the rules of section 1397(b) shall apply.
‘‘(e) NONQUALIFIED FINANCIAL PROPERTY.—For
purposes of this section, the term ‘nonqualified financial
property’ means debt, stock, partnership interests, op-
tions, futures contracts, forward contracts, warrants, no-
tional principal contracts, annuities, and other similar
property specified in regulations; except that such term
shall not include—
‘‘(1) reasonable amounts of working capital
held in cash, cash equivalents, or debt instruments
with a term of 18 months or less, or
‘‘(2) debt instruments described in section
1221(4).
‘‘PART IV—REGULATIONS
‘‘Sec. 1397E. Regulations.
‘‘SEC. 1397E. REGULATIONS.
‘‘The Secretary shall prescribe such regulations as
may be necessary or appropriate to carry out the purposes
of parts II and III, including—
1462
‘‘(1) regulations limiting the benefit of parts II
and III in circumstances where such benefits, in
combination with benefits provided under other Fed-
eral programs, would result in an activity being 100
percent or more subsidized by the Federal Govern-
ment,
‘‘(2) regulations preventing abuse of the provi-
sions of parts II and III, and
‘‘(3) regulations dealing with inadvertent fail-
ures of entities to be enterprise zone businesses.’’
(b) CLERICAL AMENDMENT.—The table of sub-
chapters for chapter 1 is amended by inserting after the
item relating to subchapter T the following new item:
‘‘Subchapter U. Designation and treatment of empowerment
zones and enterprise communities.’’
SEC. 14302. EXPANSION OF TARGETED JOBS CREDIT.
(a) 
ALLOWANCE
OF
CREDIT
FOR
HIRING
EMPOWERMENT ZONE RESIDENT.—Paragraph (1) of sec-
tion 51(d) (defining members of targeted groups) is
amended by striking ‘‘or’’ at the end of subparagraph (I),
by striking the period at the end of subparagraph (J) and
inserting ‘‘, or’’, and by adding at the end the following
new subparagraph:
‘‘(K) 
an 
economically 
disadvantaged
empowerment zone resident.’’
1463
(b) ECONOMICALLY
DISADVANTAGED
EMPOWER-
MENT ZONE RESIDENT.—Section 51(d) is amended by re-
designating paragraphs (13) through (16) as paragraphs
(14) through (17), respectively, and by inserting after
paragraph (12) the following new paragraph:
‘‘(13) 
ECONOMICALLY
DISADVANTAGED
EMPOWERMENT
ZONE
RESIDENT.—The term ‘eco-
nomically disadvantaged empowerment zone resi-
dent’ means an individual—
‘‘(A) whose principal place of abode while
performing services for the employer is within
an empowerment zone, and
‘‘(B) who is certified by the designated
local agency as being a member of an economi-
cally disadvantaged family (as determined
under paragraph (11)).
Such term shall not include a qualified zone em-
ployee (as defined in section 1396(d) without regard
to paragraph (2) thereof).’’
(c) CONFORMING AMENDMENT.—Subparagraph (C)
of section 51(d)(12) is amended by striking ‘‘paragraph
(14)’’ and inserting ‘‘paragraph (15)’’.
SEC. 14303. TECHNICAL AND CONFORMING AMENDMENTS.
(a) CERTAIN CREDITS PART OF GENERAL BUSINESS
CREDIT.—
1464
(1) Subsection (b) of section 38 (relating to
current year business credit) is amended by striking
‘‘plus’’ at the end of paragraph (7), by striking the
period at the end of paragraph (8) and inserting a
comma, and by adding at the end the following new
paragraphs:
‘‘(9) the empowerment zone employment credit
determined under section 1396(a), plus
‘‘(10) the zone resident empowerment savings
credit determined under section 1397A.’’
(2) Subsection (d) of section 39 is amended by
adding at the end the following new paragraph:
‘‘(4) ENTERPRISE ZONE CREDITS.—No portion
of the unused business credit which is attributable to
the credit determined under section 1396 (relating
to empowerment zone employment credit) or section
1397A (relating to zone resident empowerment sav-
ings credit) may be carried to any taxable year end-
ing before January 1, 1994.’’
(b) DENIAL OF DEDUCTION FOR PORTION OF WAGES
EQUAL
TO
EMPOWERMENT
ZONE
EMPLOYMENT
CREDIT.—
(1) Subsection (a) of section 280C (relating to
rule for targeted jobs credit) is amended—
1465
(A) by striking ‘‘the amount of the credit
determined for the taxable year under section
51(a)’’ and inserting ‘‘the sum of the credits
determined for the taxable year under sections
51(a) and 1396(a)’’, and
(B) 
by 
striking 
‘‘TARGETED
JOBS
CREDIT’’ in the subsection heading and insert-
ing ‘‘EMPLOYMENT CREDITS’’.
(2) Subsection (c) of section 196 (relating to
deduction for certain unused business credits) is
amended by striking ‘‘and’’ at the end of paragraph
(4), by striking the period at the end of paragraph
(5) and inserting ‘‘, and’’, and by adding at the end
the following new paragraph:
‘‘(6) the empowerment zone employment credit
determined under section 1396(a).’’
(c) EMPLOYMENT AND SAVINGS CREDITS MAY OFF-
SET 25 PERCENT OF MINIMUM TAX.—
(1) IN
GENERAL.—Section 38(c) (relating to
limitation based on amount of tax) is amended by
redesignating paragraph (2) as paragraph (3) and
by inserting after paragraph (1) the following new
paragraph:
‘‘(2) EMPOWERMENT ZONE CREDITS MAY OFF-
SET 25 PERCENT OF MINIMUM TAX.—
1466
‘‘(A) IN
GENERAL.—In the case of the
empowerment zone credits—
‘‘(i) this section and section 39 shall
be applied separately with respect to such
credits, and
‘‘(ii) for purposes of applying para-
graph (1) to such credits—
‘‘(I) 75 percent of the tentative
minimum tax shall be substituted for
the tentative minimum tax under sub-
paragraph (A) thereof, and
‘‘(II) the limitation under para-
graph (1) (as modified by subclause
(I)) shall be reduced by the credit al-
lowed under subsection (a) for the
taxable 
year 
(other 
than 
the
empowerment zone credits).
‘‘(B) EMPOWERMENT
ZONE
CREDITS.—
For purposes of this paragraph, the term
‘empowerment zone credits’ means the portion
of the credit under subsection (a) which is at-
tributable to the credits determined under sec-
tion 1396 (relating to empowerment zone em-
ployment credit) and section 1397A (relating to
zone resident empowerment savings credit).’’
1467
(d) CHANGES RELATING TO EMPOWERMENT ZONE
RESIDENT EMPOWERMENT SAVINGS CREDIT.—
(1) DISALLOWANCE
OF
DEDUCTION.—Section
404 (relating to deduction for certain employer con-
tributions) is amended by adding at the end the fol-
lowing new subsection:
‘‘(m) COORDINATION WITH EMPOWERMENT ZONE
CREDIT.—No deduction shall be allowed under this sec-
tion for any qualified employer contribution taken into ac-
count in computing the credit determined under section
1397A.’’
(2) PENALTY-FREE DISTRIBUTIONS.—
(A) IN GENERAL.—Paragraph (2) of sec-
tion 72(t) (relating to exceptions to 10-percent
additional tax on early distributions from quali-
fied retirement plans) is amended by adding at
the end thereof the following new subpara-
graph:
‘‘(D) 
DISTRIBUTIONS
FROM
CERTAIN
PLANS FOR FIRST HOME PURCHASES OR EDU-
CATIONAL EXPENSES.—
‘‘(i) IN
GENERAL.—Distributions to
an individual from a qualified retirement
plan—
1468
‘‘(I) which are qualified first-time
homebuyer distributions (as defined in
paragraph (6)),
‘‘(II) to the extent such distribu-
tions do not exceed the qualified high-
er education expenses (as defined in
paragraph (7)) of the taxpayer for the
taxable year, or
‘‘(III) to the extent such distribu-
tions do not exceed an amount equal
to the aggregate investment made by
the taxpayer during the taxable year
in any enterprise zone business (as
defined in section 1397D) that meets
the ownership requirements of section
1397C(b).
‘‘(ii) LIMITATION.—Clause (i) shall
not apply to the extent that the aggregate
amount of the distributions described in
clause (i) is greater than the excess of—
‘‘(I) the qualified savings con-
tributions (as defined in section
1397A(b)) of the taxpayer, and any
earnings thereon, over
1469
‘‘(II) the aggregate amounts to
which clause (i) and the last sentence
of paragraph (3)(A) applied for pre-
ceding taxable years.’’
(B) 
DEFINITIONS.—Section 
72(t) 
is
amended by adding at the end thereof the fol-
lowing new paragraphs:
‘‘(6) QUALIFIED FIRST-TIME HOMEBUYER DIS-
TRIBUTIONS.—For 
purposes 
of 
paragraph
(2)(D)(i)(I)—
‘‘(A) IN
GENERAL.—The term ‘qualified
first-time homebuyer distribution’ means any
payment or distribution received by an individ-
ual to the extent such payment or distribution
is used by the individual before the close of the
60th day after the day on which such payment
or distribution is received to pay qualified ac-
quisition costs with respect to a principal resi-
dence of a first-time homebuyer who is such in-
dividual or the spouse of such individual.
‘‘(B) QUALIFIED
ACQUISITION
COSTS.—
For purposes of this paragraph, the term
‘qualified acquisition costs’ means the costs of
acquiring, constructing, or reconstructing a res-
idence. Such term includes any usual or reason-
1470
able settlement, financing, or other closing
costs.
‘‘(C) FIRST-TIME
HOMEBUYER; 
OTHER
DEFINITIONS.—For 
purposes 
of 
this
paragraph—
‘‘(i) FIRST-TIME
HOMEBUYER.—The
term ‘first-time homebuyer’ means any in-
dividual if—
‘‘(I) such individual (and if mar-
ried, such individual’s spouse) had no
present ownership interest in a prin-
cipal residence during the 3-year pe-
riod ending on the date of acquisition
of the principal residence to which
this paragraph applies, and
‘‘(II) subsection (a)(6), (h), or
(k) of section 1034 did not suspend
the running of any period of time
specified in section 1034 with respect
to such individual on the day before
the date the distribution is applied
pursuant to subparagraph (A)(ii).
‘‘(ii) 
PRINCIPAL
RESIDENCE.—The
term ‘principal residence’ has the same
meaning as when used in section 1034.
1471
‘‘(iii) DATE
OF
ACQUISITION.—The
term ‘date of acquisition’ means the date—
‘‘(I) on which a binding contract
to acquire the principal residence to
which subparagraph (A) applies is en-
tered into, or
‘‘(II) on which construction or re-
construction of such a principal resi-
dence is commenced.
‘‘(D) SPECIAL RULE WHERE DELAY IN AC-
QUISITION.—If any distribution from any quali-
fied retirement plan fails to meet the require-
ments of subparagraph (A) solely by reason of
a delay or cancellation of the purchase or con-
struction of the residence, the amount of the
distribution may be recontributed to the plan
from which it was distributed within 120 days
after the date of such distribution.
‘‘(7) QUALIFIED
HIGHER
EDUCATION
EX-
PENSES.—For 
purposes 
of 
paragraph
(2)(D)(ii)(II)—
‘‘(A) IN
GENERAL.—The term ‘qualified
higher education expenses’ means tuition, fees,
books, supplies, and equipment required for the
enrollment or attendance of—
1472
‘‘(i) the taxpayer,
‘‘(ii) the taxpayer’s spouse, or
‘‘(iii) the taxpayer’s child (as defined
in section 151(c)(3)) or grandchild,
at an eligible educational institution (as defined
in section 135(c)(3)).
‘‘(B) COORDINATION WITH SAVINGS BOND
PROVISIONS.—The amount of qualified higher
education expenses for any taxable year shall be
reduced by any amount excludable from gross
income under section 135.’’
(C) CONFORMING AMENDMENTS.—
(i) Subparagraph (B) of section
72(t)(2) is amended by striking ‘‘or (C)’’
and inserting ‘‘, (C), or (D)’’.
(ii) Section 401(k)(2)(B)(i) is amend-
ed by striking ‘‘or’’ at the end of subclause
(III), by striking ‘‘and’’ at the end of
subclause (IV) and inserting ‘‘or’’, and by
inserting after subclause (IV) the following
new subclause:
‘‘(V) subject to the limitation of
section 72(t)(2)(D)(ii), the date on
which qualified first-time homebuyer
distributions (as defined in section
1473
72(t)(6)), distributions for qualified
higher education expenses (as defined
in section 72(t)(7)), or distributions
for investments described in section
72(t)(2)(D)(i)(III) are made, and’’.
(e) AMENDMENT
OF TARGETED JOBS CREDIT.—
Subparagraph (A) of section 51(i)(1) is amended by in-
serting ‘‘, or, if the taxpayer is an entity other than a
corporation, to any individual who owns, directly or indi-
rectly, more than 50 percent of the capital and profits in-
terests in the entity,’’ after ‘‘of the corporation’’.
(f) CARRYOVERS.—Subsection (c) of section 381 (re-
lating to carryovers in certain corporate acquisitions) is
amended by adding at the end the following new para-
graph:
‘‘(26) ENTERPRISE
ZONE
PROVISIONS.—The
acquiring corporation shall take into account (to the
extent proper to carry out the purposes of this sec-
tion and subchapter U, and under such regulations
as may be prescribed by the Secretary) the items re-
quired to be taken into account for purposes of sub-
chapter U in respect of the distributor or transferor
corporation.’’
1474
SEC. 14304. EFFECTIVE DATE.
The amendments made by this part shall take effect
on the date of the enactment of this Act.
PART II—CREDIT FOR CONTRIBUTIONS TO CER-
TAIN COMMUNITY DEVELOPMENT CORPORA-
TIONS
SEC. 14311. CREDIT FOR CONTRIBUTIONS TO CERTAIN
COMMUNITY DEVELOPMENT CORPORATIONS.
(a) IN GENERAL.—For purposes of section 38 of the
Internal Revenue Code of 1986, the current year business
credit shall include the credit determined under this sec-
tion.
(b) DETERMINATION OF CREDIT.—The credit deter-
mined under this section for each taxable year in the credit
period with respect to any qualified CDC contribution
made by the taxpayer is an amount equal to 5 percent
of such contribution.
(c) CREDIT PERIOD.—For purposes of this section,
the credit period with respect to any qualified CDC con-
tribution is the period of 10 taxable years beginning with
the taxable year during which such contribution was made.
(d) QUALIFIED CDC CONTRIBUTION.—For purposes
of this section—
(1) IN GENERAL.—The term ‘‘qualified CDC
contribution’’ means any transfer of cash—
1475
(A) which is made to a selected community
development corporation during the 5-year pe-
riod beginning on the date such corporation was
selected for purposes of this section,
(B) the amount of which is available for
use by such corporation for at least 10 years,
(C) which is to be used by such corpora-
tion for qualified low-income assistance within
its operational area, and
(D) which is designated by such corpora-
tion for purposes of this section.
(2) LIMITATIONS ON AMOUNT DESIGNATED.—
The aggregate amount of contributions to a selected
community development corporation which may be
designated by such corporation shall not exceed
$4,000,000.
(e) SELECTED COMMUNITY DEVELOPMENT COR-
PORATIONS.—
(1) IN GENERAL.—For purposes of this section,
the term ‘‘selected community development corpora-
tion’’ means any corporation—
(A) which is described in section 501(c)(3)
of such Code and exempt from tax under sec-
tion 501(a) of such Code,
1476
(B) the principal purposes of which include
promoting employment of, and business oppor-
tunities for, low-income individuals who are
residents of the operational area, and
(C) which is selected by the Secretary of
Housing and Urban Development for purposes
of this section.
(2) ONLY
CORPORATIONS
MAY
BE
SE-
LECTED.—
(A) IN GENERAL.—The Secretary of Hous-
ing and Urban Development may select 10 cor-
porations for purposes of this section, subject to
the availability of eligible corporations. Such se-
lections may be made only before July 1, 1994.
At least 4 of the operational areas of the cor-
porations selected must be rural areas (as de-
fined by section 1393(a)(3) of such Code).
(B) PRIORITY OF DESIGNATIONS.—In se-
lecting corporations for purposes of this section,
such Secretary shall give priority to corpora-
tions with a demonstrated record of perform-
ance in administering community development
programs which target at least 75 percent of
the jobs emanating from their investment funds
to low income or unemployed individuals.
1477
(3) OPERATIONAL AREAS MUST HAVE CERTAIN
CHARACTERISTICS.—A corporation may be selected
for purposes of this section only if its operational
area meets the following criteria:
(A) The area meets the size requirements
under section 1392(a)(3).
(B) The unemployment rate (as deter-
mined by the appropriate available data) is not
less than the national unemployment rate.
(C) The median family income of residents
of such area does not exceed 80 percent of the
median gross income of residents of the juris-
diction of the local government which includes
such area.
(f) QUALIFIED LOW-INCOME ASSISTANCE.—For pur-
poses of this section, the term ‘‘qualified low-income as-
sistance’’ means assistance—
(1) which is designed to provide employment of,
and business opportunities for, low-income individ-
uals who are residents of the operational area of the
community development corporation, and
(2) which is approved by the Secretary of Hous-
ing and Urban Development.
1478
Subtitle D—Other Provisions
PART I—DISCLOSURE PROVISIONS
SEC. 14401. DISCLOSURE OF RETURN INFORMATION FOR
ADMINISTRATION OF CERTAIN VETERANS
PROGRAMS.
(a) GENERAL RULE.—Subparagraph (D) of section
6103(l)(7) (relating to disclosure of return information to
Federal, State, and local agencies administering certain
programs) is amended by striking ‘‘September 30, 1997’’
in the second sentence following clause (viii) and inserting
‘‘September 30, 1998’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall take effect on the date of the enact-
ment of this Act.
SEC. 14402. DISCLOSURE OF RETURN INFORMATION TO
CARRY OUT INCOME CONTINGENT REPAY-
MENT OF STUDENT LOANS.
(a) GENERAL RULE.—Subsection (l) of section 6103
(relating to confidentiality and disclosure of returns and
return information) is amended by adding at the end
thereof the following new paragraph:
‘‘(13) DISCLOSURE OF RETURN INFORMATION
TO CARRY OUT INCOME CONTINGENT REPAYMENT
OF STUDENT LOANS.—
1479
‘‘(A) IN
GENERAL.—The Secretary may,
upon written request from the Secretary of
Education, disclose to officers and employees of
the Department of Education return informa-
tion with respect to a taxpayer who has received
an applicable student loan and whose loan re-
payment amounts are based in whole or in part
on the taxpayer’s income. Such return informa-
tion shall be limited to—
‘‘(i) taxpayer identity information
with respect to such taxpayer,
‘‘(ii) the filing status of such tax-
payer, and
‘‘(iii) the adjusted gross income of
such taxpayer.
‘‘(B) RESTRICTION ON USE OF DISCLOSED
INFORMATION.—Return information disclosed
under subparagraph (A) may be used by offi-
cers and employees of the Department of Edu-
cation only for the purposes of, and to the ex-
tent necessary in, establishing the appropriate
income contingent repayment amount for an
applicable student loan.
1480
‘‘(C) APPLICABLE
STUDENT
LOAN.—For
purposes of this paragraph, the term ‘applicable
student loan’ means—
‘‘(i) any loan made under the program
authorized under part D of title IV of the
Higher Education Act of 1965, and
‘‘(ii) any loan made under part B or
E of title IV of the Higher Education Act
of 1965 which is in default and has been
assigned to the Department of Education.
‘‘(D) 
TERMINATION.—This 
paragraph
shall not apply to any request made after Sep-
tember 30, 1998.’’
(b) CONFORMING AMENDMENTS.—
(1) So much of paragraph (4) of section
6103(m) as precedes subparagraph (B) thereof is
amended to read as follows:
‘‘(4) INDIVIDUALS WHO OWE AN OVERPAYMENT
OF
FEDERAL
PELL
GRANTS
OR
WHO
HAVE
DE-
FAULTED ON STUDENT LOANS ADMINISTERED BY
THE DEPARTMENT OF EDUCATION.—
‘‘(A) IN GENERAL.—Upon written request
by the Secretary of Education, the Secretary
may disclose the mailing address of any
taxpayer—
1481
‘‘(i) who owes an overpayment of a
grant awarded to such taxpayer under sub-
part 1 of part A of title IV of the Higher
Education Act of 1965, or
‘‘(ii) who has defaulted on a loan—
‘‘(I) made under part B, D, or E
of title IV of the Higher Education
Act of 1965, or
‘‘(II) made pursuant to section
3(a)(1) of the Migration and Refugee
Assistance Act of 1962 to a student
at an institution of higher education,
for use only by officers, employees, or agents of
the Department of Education for purposes of
locating such taxpayer for purposes of collecting
such overpayment or loan .’’
(2) Subparagraph (B) of section 6103(m)(4) is
amended—
(A) in clause (i), by striking ‘‘under part
B’’ and inserting ‘‘under part B or D’’; and
(B) in clause (ii), by striking ‘‘under part
E’’ and inserting ‘‘under subpart 1 of part A,
or part D or E,’’;
(3) Section 6103(p) is amended—
1482
(A) in paragraph (3)(A), by striking ‘‘(11),
or (12), (m)’’ and inserting ‘‘(11), (12), or
(13), (m)’’;
(B) in paragraph (4)—
(i) in the matter preceding subpara-
graph (A), by striking out ‘‘(10), or (11),’’
and inserting ‘‘(10), (11), or (13),’’, and
(ii) in subparagraph (F)(ii), by strik-
ing ‘‘(11), or (12),’’ and inserting ‘‘(11),
(12), or (13),’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall take effect on the date of the enactment
of this Act.
(d) STUDY OF INTERNAL REVENUE SERVICE COL-
LECTION OF STUDENT LOANS.—
(1) GENERAL
RULE.—The Secretary of the
Treasury, in consultation with the Secretary of Edu-
cation, shall conduct a study of the feasibility of im-
plementing a system for the repayment of Federal
student loans through wage withholding or other
means involving the Internal Revenue Service. Such
study shall include an examination of—
(A) whether the Internal Revenue Service
could implement such a system within its cur-
rent resources and without adversely affecting
1483
the ability of the Internal Revenue Service to
collect tax revenues,
(B) the cumulative impact on voluntary
compliance with the tax system of increased dis-
closure of tax return information and increased
Internal Revenue Service involvement in nontax
collection activities,
(C) the anticipated effect on the manage-
ment of Federal student loan collections and on
borrower repayment of such loans, and
(D) the ability of the Internal Revenue
Service to effectively service student loans.
(2) RECOMMENDATIONS.—Not later than the
date 6 months after the date of the enactment of
this Act, the Secretary of the Treasury shall submit
to the Congress a report on the study conducted
under paragraph (1) (together with such legislative
recommendations as such Secretary may deem advis-
able).
SEC. 14403. USE OF RETURN INFORMATION FOR INCOME
VERIFICATION UNDER CERTAIN HOUSING AS-
SISTANCE PROGRAMS.
(a) IN GENERAL.—Subparagraph (D) of section
6103(l)(7) (relating to the disclosure of return information
1484
to Federal, State, and local agencies administering certain
programs) is amended—
(1) in clause (vii), by striking ‘‘and’’ at the end;
(2) in clause (viii), by striking the period at the
end and inserting ‘‘; and’’;
(3) by inserting after clause (viii) the following
new clause:
‘‘(ix) any housing assistance program adminis-
tered by the Department of Housing and Urban De-
velopment that involves initial and periodic review of
an applicant’s or participant’s income, except that
return information may be disclosed under this
clause only on written request by the Secretary of
Housing and Urban Development and only for use
by officers and employees of the Department of
Housing and Urban Development with respect to ap-
plicants for and participants in such programs.’’;
and
(4) by adding at the end thereof the following:
‘‘Clause (ix) shall not apply after September 30,
1998.’’
(b) CONFORMING AMENDMENT.—The heading of
paragraph (7) of section 6103(l) is amended by inserting
after ‘‘CODE’’ the following: ‘‘, OR CERTAIN HOUSING AS-
SISTANCE PROGRAMS’’.
1485
(c) EFFECTIVE DATE.—The amendments made by
this section shall take effect on the date of the enactment
of this Act.
(d) STUDY.—The Secretary of the Treasury or his
delegate, in consultation with the Secretary of Housing
and Urban Development, shall conduct a study on—
(1) whether the information provided under sec-
tion 6103(l)(7)(D)(ix) of the Internal Revenue Code
of 1986 is being used effectively by the Department
of Housing and Urban Development,
(2) such Department’s compliance with the re-
quirements of section 6103(p) of such Code, and
(3) the impact on the privacy rights of appli-
cants for and participants in housing assistance pro-
grams administered by the Department of Housing
and Urban Development.
The report of such study shall be submitted before Janu-
ary 1, 1998, to the Congress.
PART II—USER FEE PROVISIONS
SEC. 14411. FEES FOR APPLICATIONS FOR ALCOHOL LA-
BELING AND FORMULA REVIEWS.
(a) IN GENERAL.—The Secretary of the Treasury or
his delegate (hereinafter in this section referred to as the
‘Secretary’) shall establish a program requiring the pay-
ment of user fees for—
1486
(1) requests for each certificate of alcohol label
approval required under the Federal Alcohol Admin-
istration Act (27 U.S.C. 201 et seq.) and for each
request for exemption from such requirement, and
(2) requests for each formula review, and re-
quests for each statement of process (including lab-
oratory tests and analyses), under such Act or under
chapter 51 of the Internal Revenue Code of 1986.
(b) PROGRAM CRITERIA.—
(1) IN GENERAL.—The fees charged under the
program required by subsection (a) shall be deter-
mined such that the Secretary estimates that the ag-
gregate of such fees received during any fiscal year
will be $5,000,000.
(2) MINIMUM FEES.—The fee charged under
the program required by subsection (a) shall not be
less than—
(A) $50 for each request referred to in
subsection (a)(1), and
(B) $250 for each request referred to in
subsection (a)(2).
(c) APPLICATION OF SECTION.—Subsection (a) shall
apply to requests made on or after the 90th day after the
date of the enactment of this Act.
1487
(d) DEPOSIT
AND CREDIT
AS OFFSETTING RE-
CEIPTS.—The amounts collected by the Secretary under
the program required by subsection (a) (to the extent such
amounts do not exceed $5,000,000) shall be deposited into
the Treasury as offsetting receipts and ascribed to the al-
cohol compliance program of the Bureau of Alcohol, To-
bacco, and Firearms.
SEC. 14412. USE OF HARBOR MAINTENANCE TRUST FUND
AMOUNTS FOR ADMINISTRATIVE EXPENSES.
(a) IN GENERAL.—Paragraph (3) of section 9505(c)
(relating to expenditures from Harbor Maintenance Trust
Fund) is amended to read as follows:
‘‘(3) for the payment of all expenses of adminis-
tration incurred by the Department of the Treasury
in administering subchapter A of chapter 36 (relat-
ing to harbor maintenance tax), but not in excess of
$5,000,000 for any fiscal year.’’
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall apply to fiscal years beginning after
the date of the enactment of this Act.
SEC. 14413. INCREASE IN TAX ON FUEL USED IN COMMER-
CIAL TRANSPORTATION ON INLAND WATER-
WAYS.
(a) IN GENERAL.—The table contained in section
4042(a)(2)(A) is amended to read as follows:
1488
‘‘If the use occurs during:
The tax per gallon is:
1994 ............................................................... 24 cents
1995 ............................................................... 40 cents
1996 ............................................................... 55 cents
1997 or thereafter ......................................... 70 cents.’’
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall take effect on January 1, 1994.
PART III—PUBLIC DEBT LIMIT
SEC. 14421. INCREASE IN PUBLIC DEBT LIMIT.
(a) GENERAL RULE.—Subsection (b) of section 3101
of title 31, United States Code, is amended by striking
out the dollar limitation contained in such subsection and
inserting in lieu thereof ‘‘$4,900,000,000,000’’.
(b) REPEAL OF TEMPORARY INCREASE.—Effective
on and after the date of the enactment of this Act, section
1 of Public Law 103–12 is hereby repealed.
PART IV—VACCINE PROVISIONS
SEC. 14431. EXCISE TAX ON CERTAIN VACCINES MADE PER-
MANENT.
(a) TAX.—Subsection (c) of section 4131 (relating to
tax on certain vaccines) is amended to read as follows:
‘‘(c) APPLICATION OF SECTION.—The tax imposed by
this section shall apply—
‘‘(1) after December 31, 1987, and before Jan-
uary 1, 1993, and
‘‘(2) during periods after the date of the enact-
ment of this subsection.’’
1489
(b) TRUST FUND.—Paragraph (1) of section 9510(c)
(relating to expenditures from Vaccine Injury Compensa-
tion Trust Fund) is amended by striking ‘‘and before Oc-
tober 1, 1992,’’.
(c) STUDY.—The Secretary of the Treasury, in con-
sultation with the Secretary of Health and Human Serv-
ices, shall conduct a study of—
(1) the estimated amount that will be paid from
the Vaccine Injury Compensation Trust Fund with
respect to vaccines administered after September 30,
1988,
(2) the rates of vaccine-related injury or death
with respect to the various types of such vaccines,
(3) new vaccines and immunization practices
being developed or used for which amounts may be
paid from such Trust Fund,
(4) whether additional vaccines should be in-
cluded in the vaccine injury compensation program,
and
(5) the appropriate treatment of vaccines pro-
duced by State governmental entities.
The report of such study shall be submitted not later than
1 year after the date of the enactment of this Act, to the
Committee on Ways and Means of the House of Rep-
resentatives and the Committee on Finance of the Senate.
1490
(d) FLOOR STOCKS TAX.—
(1) IMPOSITION
OF
TAX.—On any taxable
vaccine—
(A) which was sold by the manufacturer,
producer, or importer before the date of the en-
actment of this Act,
(B) on which no tax was imposed by sec-
tion 4131 of the Internal Revenue Code of 1986
(or, if such tax was imposed, was credited or re-
funded), and
(C) which is held on such date by any per-
son for sale or use,
there is hereby imposed a tax in the amount deter-
mined under section 4131(b) of such Code.
(2) LIABILITY FOR TAX AND METHOD OF PAY-
MENT.—
(A) LIABILITY
FOR
TAX.—The person
holding any taxable vaccine to which the tax
imposed by paragraph (1) applies shall be liable
for such tax.
(B) METHOD OF PAYMENT.—The tax im-
posed by paragraph (1) shall be paid in such
manner as the Secretary shall prescribe by reg-
ulations.
1491
(C) TIME
FOR
PAYMENT.—The tax im-
posed by paragraph (1) shall be paid on or be-
fore the last day of the 6th month beginning
after the date of the enactment of this Act.
(3) DEFINITIONS.—For purposes of this sub-
section, terms used in this subsection which are also
used in section 4131 of such Code shall have the re-
spective meanings such terms have in such section.
(4) OTHER LAWS APPLICABLE.—All provisions
of law, including penalties, applicable with respect to
the taxes imposed by section 4131 of such Code
shall, insofar as applicable and not inconsistent with
the provisions of this subsection, apply to the floor
stocks taxes imposed by paragraph (1), to the same
extent as if such taxes were imposed by such section
4131.
SEC. 14432. CONTINUATION COVERAGE UNDER GROUP
HEALTH PLANS OF COSTS OF PEDIATRIC
VACCINES.
(a) 
IN
GENERAL.—Paragraph 
(1) 
of 
section
4980B(f) is amended by inserting ‘‘the coverage of the
costs of pediatric vaccines (as defined under section 2162
of the Public Health Service Act) is not reduced below
the coverage provided by the plan as of May 1, 1993, and
only if’’ after ‘‘only if’’.
1492
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall apply with respect to plan years begin-
ning after the date of the enactment of this Act.
SEC. 14433. CHILDHOOD IMMUNIZATION TRUST FUND.
(a) IN GENERAL.—Subchapter A of chapter 98 (re-
lating to trust fund code) is amended by adding at the
end thereof the following new section:
‘‘SEC. 9512. CHILDHOOD IMMUNIZATION TRUST FUND.
‘‘(a) CREATION OF TRUST FUND.—There is estab-
lished in the Treasury of the United States a trust fund
to be known as the ‘Childhood Immunization Trust Fund’,
consisting of such amounts as may be appropriated or
credited to such Trust Fund as provided in this section
or section 9602(b).
‘‘(b) TRANSFERS TO TRUST FUND.—There are here-
by appropriated to the Childhood Immunization Trust
Fund amounts equivalent to the taxes received in the
Treasury under any tax hereafter specified by law for pur-
poses of this subsection.
‘‘(c) EXPENDITURES FROM TRUST FUND.—Amounts
in the Childhood Immunization Trust Fund shall be avail-
able, as provided in appropriation Acts, only for purposes
of making expenditures to carry out part A of subtitle 3
of title XXI of the Public Health Service Act.’’
1493
(b) CLERICAL AMENDMENT.—The table of sections
for such subchapter A is amended by adding at the end
thereof the following new item:
‘‘Sec. 9512. Childhood Immunization Trust Fund.’’
TITLE XV—BUDGET PROCESS
SEC. 15001. PURPOSE.
The purposes of this title are to extend through fiscal
year 1998 the enforcement of budget legislation by discre-
tionary caps and the pay-as-you-go requirement; to make
simplifications and technical corrections to those methods
of budget enforcement; to conform congressional budget
enforcement to those methods of budget enforcement to
the extent possible; and to make permanent the require-
ment for 5-year, enforceable budget resolutions.
Subtitle A—Budget Enforcement
Act of 1993
SEC. 15100. SHORT TITLE; REFERENCES.
(a) SHORT TITLE.—This subtitle may be cited as the
‘‘Budget Enforcement Act of 1993’’.
(b) REFERENCES.—Except as otherwise expressly
provided, whenever in this subtitle an amendment or re-
peal is expressed in terms of an amendment to, or repeal
of, a section or other provision, the reference shall be con-
sidered to be made to a section or other provision of the
Balanced Budget and Emergency Deficit Control Act of
1985.
1494
SEC. 15101. DEFINITIONS.
Section 250 is amended as follows:
(1) Strike ‘‘; STATEMENT OF BUDGET EN-
FORCEMENT
THROUGH
SEQUESTRATION;’’ in
the section heading and insert ‘‘AND’’.
(2) Strike subsection (a) and insert the follow-
ing new subsection:
‘‘(a) TABLE OF CONTENTS.—
‘‘Sec. 250. Table of contents and definitions.
‘‘Sec. 251. Discretionary limits.
‘‘Sec. 252. Pay-as-you-go.
‘‘Sec. 253. Enforcing deficit targets.
‘‘Sec. 254. Reports and orders.
‘‘Sec. 255. Exempt programs and activities.
‘‘Sec. 256. General and special sequestration rules.
‘‘Sec. 257. The baseline.
‘‘Sec. 258. Suspension in the event of war or low growth.
‘‘Sec. 258A. Modification of Presidential order.
‘‘Sec. 258B. Alternative defense sequestration.
‘‘Sec. 258C. Special reconciliation process.’’.
(3) Strike subsections (b) and (c) and insert
after subsection (a) the following new subsection:
‘‘(b) DEFINITIONS AND TREATMENTS.—As used in
this Act:
‘‘(1) The terms ‘budget authority’, ‘new budget
authority’, ‘outlays’, and ‘deficit’ have the meanings
given to such terms in section 3 of the Congressional
Budget and Impoundment Control Act of 1974 and
the term ‘receipts’ shall be treated as a synonym for
the term ‘revenues’ as it is used in that Act.
‘‘(2) The terms ‘sequester’ and ‘sequestration’
refer to or mean the cancellation of budget authority
1495
provided by discretionary appropriations or direct
spending law.
‘‘(3) The term ‘breach’ means, for any fiscal
year, the amount (if any) by which the baseline level
of discretionary new budget authority or outlays for
that year exceeds the discretionary limit on new
budget authority or outlays for that year.
‘‘(4) The term ‘baseline’ or ‘current policy base-
line’ means the projection (described in section 257)
of current-year levels of new budget authority, out-
lays, receipts, and the surplus or deficit into the
budget year and the outyears.
‘‘(5) The term ‘discretionary limits’ refers to
the limits on discretionary new budget authority and
outlays set forth in section 601 of the Congressional
Budget Act of 1974, as adjusted under section
251(b).
‘‘(6) The term ‘discretionary’ refers to pro-
grams (except direct-spending programs) for which
new budget authority is provided in appropriation
Acts. If an appropriation Act alters the level of di-
rect spending, that effect shall be treated as a dis-
cretionary appropriation.
‘‘(7) The term ‘direct spending’ means budget
authority provided by a law other than an appropria-
1496
tion Act or by a law that determines amounts need-
ed to fund mandatory appropriations (including the
food stamp program). If a law other than an appro-
priation Act alters the level of discretionary appro-
priations, that effect shall be treated as direct
spending.
‘‘(8) As used in this Act, all references to man-
datory appropriations shall include the list of man-
datory appropriations included in the joint explana-
tory statement of managers accompanying the con-
ference report on the Omnibus Budget Reconcili-
ation Act of 1993.
‘‘(9) The term ‘current’ means, with respect to
OMB estimates included with a budget submission
under section 1105(a) of title 31, United States
Code, the estimates consistent with the economic
and technical assumptions underlying that budget
and with respect to estimates that are not included
with a budget submission, estimates consistent with
the economic and technical assumptions underlying
the most recently submitted President’s budget, ex-
cept to the extent that clerical errors are corrected
in the midsession review as required by section 1106
of title 31, United States Code.
1497
‘‘(10) The term ‘real economic growth’, with re-
spect to any fiscal year, means the growth in the
gross domestic product during such fiscal year, ad-
justed for inflation, consistent with Department of
Commerce definitions.
‘‘(11) The term ‘account’ means an item for
which appropriations are made in any appropriation
Act and, for items not provided for in appropriation
Acts, an item for which there is a designated budget
account identification code number in the Presi-
dent’s budget.
‘‘(12) The term ‘budget year’ means, with re-
spect to a session of Congress, the fiscal year of the
Government that starts on October 1 of the calendar
year in which that session begins.
‘‘(13) The term ‘current year’ means, with re-
spect to a budget year, the fiscal year that imme-
diately precedes that budget year.
‘‘(14) The term ‘outyear’ means, with respect
to a budget year, any of the fiscal years that follow
the budget year, through fiscal year 1998 in the case
of discretionary programs and through 2002 in the
case of direct spending and receipts.
‘‘(15) The term ‘OMB’ means the Director of
the Office of Management and Budget.
1498
‘‘(16) The term ‘CBO’ means the Director of
the Congressional Budget Office.
‘‘(17) The term ‘deposit insurance’ refers to the
expenses of the Federal Deposit Insurance Corpora-
tion and the funds it incorporates, the Resolution
Trust Corporation, the National Credit Union Ad-
ministration and the funds it incorporates, the Of-
fice of Thrift Supervision, the Comptroller of the
Currency Assessment Fund, and the RTC Office of
Inspector General.
‘‘(18) The term ‘composite discretionary outlay
rate’ means the percent of new budget authority
that is converted to outlays in the fiscal year for
which the budget authority is provided and subse-
quent fiscal years, as follows: 60 percent for the first
year, 25 percent for the second year, 7 percent for
the third year, and 3 percent for the fourth year.
‘‘(19) The term ‘asset sale’ means the sale by
the Government to the public of a nonloan asset.
‘‘(20) Notwithstanding any other provision of
law, the receipts and disbursements of the Hospital
Insurance Trust Fund shall be included in all cal-
culations required by this Act.’’.
SEC. 15102. DISCRETIONARY LIMITS.
Section 251 is amended to read as follows:
1499
‘‘SEC. 251. DISCRETIONARY LIMITS.
‘‘(a) INITIAL AMOUNTS.—Subject to adjustments
under subsection (b), the discretionary limits are as set
forth in section 601 of the Congressional Budget Act of
1974.
‘‘(b) ADJUSTMENTS TO LIMITS.—Whenever appro-
priate, adjustments to the discretionary limits (as they
exist at the time of the adjustment) for one or more fiscal
years shall be made as follows:
‘‘(1) CHANGES
IN
ACCOUNTING
CONCEPTS.—
For any fiscal year, the discretionary limits shall be
adjusted to reflect any change in budget accounting
concepts (including scorekeeping conventions, budget
classifications, and definitions), which change shall
equal the baseline levels of new budget authority and
outlays using up-to-date concepts minus those levels
using the concepts in effect before the change.
‘‘(2) CHANGES
IN
INFLATION.—(A) For the
budget year and each outyear, the discretionary limit
on new budget authority for each such year shall be
multiplied by the inflation adjustment factor (for the
fiscal year immediately preceding the current year)
calculated under subparagraph (B). The discre-
tionary limit on outlays for each such year shall be
adjusted by applying the composite discretionary
1500
outlay rate to the change in the limits on new budg-
et authority under the preceding sentence.
‘‘(B) The inflation adjustment factor shall be
the ratio of (i) the level of year-over-year inflation
measured for the fiscal year immediately preceding
the current year, and (ii) the applicable estimated
level for that year set forth below:
‘‘For 1993, 1.030.
‘‘For 1994, 1.027.
‘‘For 1995, 1.026.
‘‘For 1996, 1.025.
Inflation shall be measured by the average of the es-
timated fixed-weight gross domestic product price
index for a fiscal year divided by the average index
for the prior fiscal year.
‘‘(3) IMF FUNDING.—If for any fiscal year an
appropriation is enacted to provide to the Inter-
national Monetary Fund the dollar equivalent, in
terms of Special Drawing Rights, of the increase in
the United States quota, the limit on discretionary
new budget authority shall be increased by the
amount of that appropriation.
‘‘(4) IRS FUNDING.—To the extent discre-
tionary appropriations are enacted for fiscal year
1994 or 1995 that provide new budget authority or
1501
result in outlays greater than the amount in the
CBO baseline of June 1990 for the IRS compliance
initiative, the discretionary limits shall be adjusted
upward by those amounts, but not to exceed
$187,000,000 
in 
new 
budget 
authority 
and
$183,000,000 in outlays for fiscal year 1994 and
$188,000,000 in new budget authority and outlays
for fiscal year 1995.
‘‘(5) NET
GUARANTEE
COSTS.—The discre-
tionary limits for each fiscal year shall be adjusted
by the net costs for that year of the appropriation
made under section 601 of Public Law 102–391.
‘‘(6) EXPIRING HOUSING CONTRACTS.—For any
fiscal year, the adjustment shall be the amounts by
which the costs of renewing expiring multiyear sub-
sidized housing contracts or providing contracts to
replace units lost due to prepayments differ from the
amounts in OMB’s baseline of February 1993.
‘‘(7) EMERGENCIES.—If for any fiscal year dis-
cretionary appropriations are enacted that are des-
ignated as emergency requirements by statute, the
adjustment shall be the amount of those appropria-
tions that the President also designates in writing as
emergency requirements and the outlays estimated
to flow therefrom in each fiscal year. If any amount
1502
previously designated as an emergency requirement
is rescinded, the adjustment shall be the amount of
that rescission and the outlays estimated to be saved
thereby in each fiscal year.
‘‘(8) TECHNICAL ESTIMATING DIFFERENCES.—
‘‘(A) If for any fiscal year the amount of
discretionary new budget authority provided in
appropriation Acts exceeds the discretionary
limit on new budget authority due to technical
estimates made by OMB, the adjustment is the
amount of the excess, but not to exceed 1⁄10 of
1 percent of that limit.
‘‘(B) If for any fiscal year discretionary
outlays exceed the discretionary limit on outlays
but discretionary new budget authority does not
exceed its limit (after application of a seques-
tration under subsection (d)(1)(A), if nec-
essary), the adjustment in outlays is the
amount of that excess; but the adjustment in
any fiscal year shall not exceed the lesser of (i)
$6,500,000,000 less the outlay adjustments
made under section 251(b)(2)(E) of the Bal-
anced Budget and Emergency Deficit Control
Act of 1985 as in effect immediately before the
enactment of this Act (or that would have been
1503
made under that subparagraph if that Act had
applied through fiscal year 1998, with adjust-
ments in new budget authority occurring
through fiscal year 1995 and in outlays through
fiscal year 1998), or (ii) 1 percent of the discre-
tionary limit on outlays for that year.
‘‘(c) DISCRETIONARY SCORECARD: 1994–1998.—
‘‘(1) ESTABLISHMENT OF SCORECARD.—Start-
ing for budget year 1994 and ending for fiscal year
1998, there shall be a scorecard upon which shall be
entered the amount of discretionary new budget au-
thority and outlays enacted into law for the budget
year and the current year (except current year
1993). Entries shall be made separately for each fis-
cal year. Discretionary new budget authority and
outlays for the budget year resulting from the enact-
ment of a law in a previous session shall be attrib-
uted to the corresponding law enacted in the current
session. Reductions in new budget authority and
outlays through the imposition of a sequestration
under this section shall also be entered upon the
scorecard. Amounts shall be entered on the score-
card within 5 days after the enactment of each such
law or the imposition of any sequestration, shall
equal the amounts contained in the bill cost reports
1504
under section 254(e), and may not thereafter be al-
tered except to correct clerical errors or errors in the
application of this Act. The entry for each such law
or sequestration shall be displayed separately.
‘‘(2) LOOKBACK.—(A) If after June 30 any dis-
cretionary appropriation is enacted that would
breach the discretionary limit on new budget author-
ity or outlays for the current year, then that breach
shall be entered on the scorecard as a cost under the
column for the budget year.
‘‘(B) If any discretionary appropriation is en-
acted after June 30, 1993, that would have breached
a discretionary spending limit for fiscal year 1993
(under this Act and title VI of the Congressional
Budget Act of 1974 as in effect immediately before
the date of enactment of the Budget Enforcement
Act of 1993), then that breach shall be entered on
the scorecard as a cost under the column for the
budget year.
‘‘(d) ENFORCING DISCRETIONARY LIMITS.—
‘‘(1) SEQUESTRATION.—Within 15 days after
Congress adjourns to end a session there shall be a
sequestration to reduce the amount of nonexempt
discretionary budget authority in the current policy
baseline for the budget year of that session by—
1505
‘‘(A) the amount needed to eliminate a
breach of the discretionary limit on new budget
authority for that year, and
‘‘(B) if any breach of the discretionary
limit on outlays remains, the amount needed to
eliminate that breach for that year,
as measured under subsection (c), unless the total
amount under subparagraphs (A) and (B) is less
than $50,000,000.
‘‘(2) UNIFORM REDUCTION.—Each nonexempt
account (or activity within an account) shall be re-
duced by a dollar amount calculated by multiplying
the baseline level of nonexempt gross discretionary
budget authority for that account or activity by the
uniform percent necessary to reduce net new budget
authority by the amount in paragraph (1), except
that the health programs set forth in section 256(e)
shall not be reduced more than 2 percent and the
uniform percent applicable to all other programs
shall be increased (if necessary) to a level sufficient
to achieve the amount in paragraph (1).
‘‘(3) MILITARY PERSONNEL.—If the President
uses the authority under section 255(f) to exempt
any amounts appropriated for military personnel
from sequestration, all remaining nonexempt discre-
1506
tionary budget authority within subfunction 051
shall be further reduced by the uniform percent
needed to fully offset the reduction in the amount
sequestered resulting from that exemption.
‘‘(4) PART-YEAR APPROPRIATIONS.—If, on the
date of a sequestration under paragraph (1), there
is in effect an Act making or continuing appropria-
tions for part of a fiscal year for any budget ac-
count, then the dollar reduction calculated for that
account under paragraphs (2) and (3) shall be ap-
plied to—
‘‘(A) the annualized amount otherwise
available by law in that account under that or
a subsequent part-year appropriation; and
‘‘(B) when a full-year appropriation for
that account is enacted, from the amount other-
wise provided by that appropriation.
‘‘(e) WITHIN-SESSION
ENFORCEMENT.—If, after
Congress adjourns to end the session for a budget year
but before July 1 of that fiscal year, an appropriation for
that fiscal year is enacted that causes a discretionary limit
to be breached, within 15 days after there shall be a se-
questration to eliminate that breach, following the rules
and procedures set forth in subsection (d).’’.
1507
SEC. 15103. PAY-AS-YOU-GO.
Section 252 is amended to read as follows:
‘‘SEC. 252. PAY-AS-YOU-GO.
‘‘(a) PAY-AS-YOU-GO SCORECARD.—
‘‘(1) ESTABLISHMENT
OF
SCORECARD: 1994–
2002.—There shall be a scorecard for each fiscal year
through 2002 upon which shall be entered the 5-
year estimated increase or decrease in the deficit
(relative to the current policy baseline described in
section 257) for the budget year and each outyear,
as calculated under this subsection, resulting from—
‘‘(A) the enactment, after the date of en-
actment of this Act and before October 1, 1998,
of any direct spending or receipts law, or
‘‘(B) the change in the baseline from the
application of section 257(b)(3), which relates
to certain expiring provisions of law and to vet-
erans’ compensation.
Entries under the preceding sentence shall exclude
resulting debt service changes and any incidental
changes in intragovernmental receipts of Federal re-
tirement trust funds. Amounts shall be entered on
the scorecard within 5 days after the enactment of
each such law and may not thereafter be altered ex-
cept to correct clerical errors or errors in the appli-
1508
cation of this Act. Each entry shall be displayed sep-
arately.
‘‘(2) 
ROLLING
5-YEAR
SCOREKEEPING.—
Amounts entered on the scorecard established by
paragraph (1) shall equal the amounts contained in
the bill cost reports under section 254(e) for the
budget year and the 4 subsequent fiscal years (ex-
cept for budget years after 1998), plus any amount
required by the lookback provision of paragraph (3).
‘‘(3) LOOKBACK.—If in any session a law is en-
acted affecting the current-year level of direct spend-
ing or receipts, the amount of that current-year ef-
fect shall be entered on the scorecard under the col-
umn for the budget year (except for budget years
after 1998).
‘‘(4) EMERGENCIES.—If after the enactment of
this Act a provision of direct spending or receipts
legislation is enacted that is designated as an emer-
gency requirement by statute and that the President
also designates, in writing, as an emergency require-
ment, then no entries related to that provision shall
be made on the scorecard.
‘‘(5) DEPOSIT INSURANCE.—Provisions of law
that provide full funding of, and continuation of, the
deposit insurance commitment in effect on Septem-
1509
ber 30, 1993, shall not have their estimated effects
entered on the scorecard.
‘‘(b) ENFORCING PAY-AS-YOU-GO.—
‘‘(1) SEQUESTRATION.—Within 15 calendar
days after Congress adjourns to end a session, there
shall be a sequestration to offset the amount of any
net deficit increase recorded on the pay-as-you-go
scorecard under subsection (a) for the budget year,
unless that amount is less than $50,000,000.
‘‘(2) ELIMINATING A DEFICIT INCREASE.—The
amount required to be sequestered in a fiscal year
under paragraph (1) shall be obtained from
nonexempt direct spending accounts (which are as-
sumed to be at the level in the baseline) by seques-
tration actions taken in the following order:
‘‘(A) The maximum reductions in auto-
matic spending increases permissible under sec-
tion 256(b) shall be made.
‘‘(B) If additional reductions in direct
spending accounts are required to be made, the
maximum reductions permissible under section
256(c) (foster care and adoption assistance)
shall be made.
‘‘(C) If additional reductions in direct
spending accounts are required to be made,
1510
each remaining nonexempt direct spending ac-
count shall be reduced by the uniform percent
necessary to make the reductions in direct
spending required by paragraph (1); except that
the medicare programs specified in section
256(d) shall not be reduced by more than 4
percent and the uniform percent applicable to
all other direct spending programs under this
subparagraph shall be increased (if necessary)
to a level sufficient to achieve the required re-
duction in direct spending.
‘‘(3) UNIFORM PERCENT.—The uniform percent
under paragraph (2) shall be calculated so that the
total amount estimated to be saved in all fiscal years
by the budget-year or other sequestrations under
section 256 shall equal the amount required to be
saved under paragraph (1). The total amount esti-
mated to be saved shall exclude resulting debt serv-
ice 
changes 
and 
any 
incidental 
changes 
in
intragovernmental receipts of Federal retirement
trust funds.’’.
SEC. 15104. CONFORMING AMENDMENTS TO SECTION 253.
Section 253 is amended as follows:
(1) In subsection (a), strike ‘‘(other’’ and all
that follows through ‘‘252,’’.
1511
(2) In subsection (b)(2), strike ‘‘252(e)’’ and
insert ‘‘252(a)(4)’’.
(3) In subsection (d), strike ‘‘251(a)(3)’’ and
insert ‘‘251(d)(3)’’.
(4) In subsection (e)(1), strike ‘‘256(a)’’ and
insert ‘‘256(b)’’.
(5) In subsection (e)(2), strike ‘‘sections 256(b)
(guaranteed student loans) and’’ and insert ‘‘sec-
tion’’.
(6) In subsection (e)(3), strike ‘‘(A)’’, strike
subparagraph (B), and redesignate clauses (i) and
(ii) as subparagraphs (A) and (B).
(7) In subsection (g)(1)(B), strike the last sen-
tence.
(8) In subsection (g)(2)(B)(i), strike ‘‘252(b)’’
and insert ‘‘254(e)’’.
SEC. 15105. REPORTS AND ORDERS.
Section 254 is amended to read as follows:
‘‘SEC. 254. REPORTS AND ORDERS.
‘‘(a) TIMETABLE.—The timetable with respect to this
part for any budget year is as follows:
‘‘Date:
Action to be completed:
5 days before the President’s
budget submission.
CBO sequestration preview report.
The President’s budget submission
OMB sequestration preview report.
August 10 ......................................
Notification regarding military per-
sonnel.
Weekly, starting the 2d Wednes-
day in September.
Scorecard reports.
10 days after end of session ..........
CBO final sequestration report.
1512
‘‘Date:
Action to be completed:
15 days after end of session ..........
OMB final sequestration report; Pres-
idential order.
30 days later ..................................
GAO compliance report.
‘‘(b) SUBMISSION AND AVAILABILITY OF REPORTS
AND ORDERS.—Each report or order required by this sec-
tion (except bill cost reports under subsection (e) and
scorecard reports under subsection (f)) shall be submitted,
in the case of CBO, to the House of Representatives, the
Senate and OMB and, in the case of OMB, to the House
of Representatives, the Senate, and the President on the
day it is issued. On the following day a notice of the report
shall be printed in the Federal Register.
‘‘(c) SEQUESTRATION PREVIEW REPORTS.—
‘‘(1) REPORTING REQUIREMENT.—On the dates
specified in subsection (a), OMB and CBO shall
issue a preview report regarding discretionary, pay-
as-you-go, and deficit sequestration based on laws
enacted through those dates.
‘‘(2) 
DISCRETIONARY
SEQUESTRATION
RE-
PORT.—The preview reports shall set forth estimates
for the current year and each subsequent year
through 1998 of the applicable discretionary limits
and an explanation of any adjustments in such lim-
its under section 251. It shall also set forth for the
current year and the budget year the estimated dis-
cretionary new budget authority and outlays and the
1513
amounts remaining under the applicable discre-
tionary limits.
‘‘(3) 
PAY-AS-YOU-GO
SEQUESTRATION
RE-
PORTS.—The preview reports shall set forth for the
budget year and each outyear estimates for each of
the following:
‘‘(A) The amount of net deficit increase or
decrease, if any, calculated under subsection
252.
‘‘(B) The pay-as-you-go scorecard as of
that date, itemizing the entries that add to the
net deficit increase or decrease shown under
subparagraph (A).
‘‘(C) The sequestration percentage or (if
the required sequestration percentage is greater
than the maximum allowable percentage for
medicare) percentages necessary to eliminate a
deficit increase under section 252 at the end of
the budget-year session.
‘‘(4) DEFICIT SEQUESTRATION REPORTS.—The
preview reports shall set forth for the budget year
estimates for each of the following:
‘‘(A) The maximum deficit amount, the es-
timated deficit calculated under section 253(b),
the excess deficit, and the margin.
1514
‘‘(B) The amount of reductions required
under section 252, the excess deficit remaining
after those reductions have been made, and the
amount of reductions required under section
253 
from 
defense 
accounts 
and 
from
nondefense accounts.
‘‘(C) The sequestration percentage nec-
essary to achieve the required reduction in de-
fense accounts under section 253(d).
‘‘(D) The reductions required under sec-
tions 253(e)(1) and 253(e)(2).
‘‘(E) The sequestration percentage nec-
essary to achieve the required reduction in
nondefense accounts under section 253(e)(3).
The CBO report need not set forth the items other
than the maximum deficit amount for fiscal year
1992, 1993, or any fiscal year for which the Presi-
dent notifies the House of Representatives and the
Senate that he will adjust the maximum deficit
amount 
under 
the 
option 
under 
section
253(g)(1)(B).
‘‘(5) EXPLANATION
OF
DIFFERENCES.—The
OMB reports shall thoroughly explain the dif-
ferences between OMB and CBO estimates for each
item set forth in this subsection.
1515
‘‘(d) NOTIFICATION REGARDING MILITARY PERSON-
NEL.—On or before the date specified in subsection (a),
the President shall notify the Congress of the manner in
which he intends to exercise flexibility with respect to mili-
tary personnel accounts under section 255(f).
‘‘(e) BILL COST REPORTS.—As soon as practicable
after Congress completes action on any discretionary ap-
propriation or legislation affecting direct spending or re-
ceipts, and after consultation with the committees on the
Budget of the House and Senate, CBO shall provide OMB
with an estimate of the entry or entries to be made on
the appropriate scorecard as a result of that legislation.
Within 5 calendar days after the enactment of any such
legislation (enacted after the date of enactment of this
Act) OMB shall transmit a report to the House of Rep-
resentatives and the Senate containing the CBO estimate
of the scorecard entry or entries for that legislation,
OMB’s estimate for the same legislation, and a thorough
explanation of any difference between the 2 estimates.
CBO and OMB shall prepare estimates under this sub-
section in conformance with the baseline rules under sub-
section 257, the scorecard rules under section 251 or 252
as applicable, and scorekeeping guidelines determined
after consultation among the House and Senate Commit-
tees on the Budget, CBO, and OMB.
1516
‘‘(f) SCORECARD REPORTS.—On or before the date
specified in subsection (a) and weekly thereafter through
the adjournment of Congress, OMB shall transmit a re-
port to the House of Representatives and the Senate con-
taining the discretionary and the pay-as-you-go scorecards
prepared by CBO and OMB, each updated to reflect all
bill cost reports issued under subsection (e).
‘‘(g) FINAL SEQUESTRATION REPORTS.—
‘‘(1) REPORTING REQUIREMENT.—On or before
the dates specified in subsection (a), OMB and CBO
shall issue a final sequestration report, updated to
reflect laws enacted through those dates.
‘‘(2) 
DISCRETIONARY
SEQUESTRATION
RE-
PORTS.—The final reports shall set forth estimates
for each of the following:
‘‘(A) For the current fiscal year and each
subsequent year through 1998 the applicable
discretionary limits and an explanation of any
adjustments in such limits under section
251(b).
‘‘(B) For the current year and the budget
year the estimated discretionary new budget au-
thority and outlays and the budget-year breach,
if any.
1517
‘‘(C) The sequestration percentages nec-
essary to achieve the required reduction.
‘‘(D) For the budget year, for each ac-
count to be sequestered, estimates of the base-
line level of nonexempt budget authority and re-
sulting outlays and the amount of nonexempt
budget authority to be sequestered and result-
ing outlay reductions.
‘‘(3) PAY-AS-YOU-GO AND DEFICIT SEQUESTRA-
TION REPORTS.—The final reports shall contain all
the information required in the pay-as-you-go and
deficit sequestration preview reports. In addition,
these reports shall contain, for the budget year, for
each account to be sequestered, estimates of the
baseline level of outlays for nonexempt direct spend-
ing programs and the amount to be sequestered. The
reports shall also contain estimates of the outlay
effects in each outyear resulting from the sequestra-
tion.
‘‘(4) EXPLANATION
OF
DIFFERENCES.—The
OMB report shall explain any differences between
OMB and CBO estimates of the amount of any net
deficit change calculated under section 252(a), any
excess deficit, any breach, and any required seques-
tration percentage. The OMB report shall also ex-
1518
plain differences in the amount of sequestrable re-
sources for any budget account to be reduced if that
difference is greater than $5,000,000.
‘‘(h) WITHIN-SESSION SEQUESTRATION REPORTS.—
If a within-session sequestration is required under section
251(e), 10 days later CBO shall issue a report containing
the information required in subsection (g)(2). Fifteen days
after enactment, OMB shall issue a report containing the
information required in subsections (g) (2) and (4).
‘‘(i) PRESIDENTIAL ORDER.—On the day OMB is-
sues a report under subsection (g) or (h), if in that report
OMB estimates that any sequestration is required, the
President shall issue an order fully implementing without
change all sequestrations required by the OMB calcula-
tions set forth in that report. The order shall be effective
on issuance.
‘‘(j) GAO COMPLIANCE REPORT.—On the date speci-
fied in subsection (a), the Comptroller General shall sub-
mit to the Congress and the President a report on—
‘‘(1) the extent to which each order issued by
the President under this section complies with all of
the requirements contained in this Act, either cer-
tifying that the order fully and accurately complies
with such requirements or indicating the respects in
which it does not; and
1519
‘‘(2) the extent to which each report issued by
OMB or CBO under this section complies with all of
the requirements contained in this Act, either cer-
tifying that the report fully and accurately complies
with such requirements or indicating the respects in
which it does not.
‘‘(k) LOW-GROWTH REPORT.—At any time, CBO
shall notify the Congress if—
‘‘(1) during the period consisting of the quarter
during which such notification is given, the quarter
preceding such notification, and the 4 quarters fol-
lowing such notification, CBO or OMB has deter-
mined that real economic growth is projected or esti-
mated to be less than zero with respect to each of
any 2 consecutive quarters within such period; or
‘‘(2) the most recent of the Department of
Commerce’s advance preliminary or final reports of
actual real economic growth indicate that the rate of
real economic growth for each of the most recently
reported quarter and the immediately preceding
quarter is less than one percent.
‘‘(l) OMB’S ESTIMATING ASSUMPTIONS.—In all re-
ports required by this section, OMB shall use current eco-
nomic and technical assumptions.’’.
1520
SEC. 15106. EXEMPT PROGRAMS AND ACTIVITIES.
Section 255 is amended to read as follows:
‘‘SEC. 255. EXEMPT PROGRAMS AND ACTIVITIES.
‘‘(a) SOCIAL SECURITY BENEFITS AND TIER I RAIL-
ROAD RETIREMENT BENEFITS.—Benefits payable under
the old-age, survivors, and disability insurance program
established under title II of the Social Security Act, and
benefits payable under section 3(a), 3(f)(3), 4(a), or 4(f)
of the Railroad Retirement Act of 1974, shall be exempt
from reduction under any order issued under this Act.
‘‘(b) VETERANS PROGRAMS.—The following pro-
grams shall be exempt from reduction under any order is-
sued under this Act:
‘‘National Service Life Insurance Fund (36–
8132–0–7–701);
‘‘Service-Disabled Veterans Insurance Fund
(36–4012–0–3–701);
‘‘Veterans Special Life Insurance Fund (36–
8455–0–8–701);
‘‘Veterans Reopened Insurance Fund (36–
4010–0–3–701);
‘‘United States Government Life Insurance
Fund (36–8150–0–7–701);
‘‘Veterans Insurance and Indemnities (36–
0120–0–1–701);
1521
‘‘Special Therapeutic and Rehabilitation Activi-
ties Fund (36–4048–0–3–703);
‘‘Canteen Service Revolving Fund (36–4014–0–
3–705);
‘‘Benefits under chapter 21 of title 38, United
States Code, relating to specially adapted housing
and mortgage-protection life insurance for certain
veterans with service-connected disabilities (36–
0120–0–1–701);
‘‘Benefits under section 907 of title 38, United
States Code, relating to burial benefits for veterans
who die as a result of service-connected disability
(36–0155–0–1–701);
‘‘Benefits under chapter 39 of title 38, United
States Code, relating to automobiles and adaptive
equipment for certain disabled veterans and mem-
bers of the Armed Forces (36–0137–0–1–702);
‘‘Compensation (36–0153–0–1–701); and
‘‘Pensions (36–0154–0–1–701).
‘‘(c) NET INTEREST.—No reduction of payments for
net interest (all of major functional category 900) shall
be made under any order issued under this Act.
‘‘(d) EARNED INCOME TAX CREDIT.—Payments to
individuals made pursuant to section 32 of the Internal
1522
Revenue Code of 1954 shall be exempt from reduction
under any order issued under this Act.
‘‘(e) NON-DEFENSE UNOBLIGATED BALANCES.—Un-
obligated balances of budget authority carried over from
prior fiscal years, except balances in the defense function,
shall be exempt from reduction under any order issued
under this Act.
‘‘(f) OPTIONAL EXEMPTION OF MILITARY PERSON-
NEL.—
‘‘(1) The President may, with respect to any
military personnel account, exempt that account
from sequestration or provide for a lower uniform
percentage reduction than would otherwise apply.
‘‘(2) The President may not use the authority
provided by paragraph (1) unless he notifies the
Congress of the manner in which such authority will
be exercised on or before the date specified in sec-
tion 254(d) for the budget year.
‘‘(g) OTHER PROGRAMS AND ACTIVITIES.—
‘‘(1)(A) The following budget accounts and ac-
tivities shall be exempt from reduction under any
order issued under this Act:
‘‘Activities resulting from private dona-
tions, bequests, or voluntary contributions to
the Government;
1523
‘‘Administration of Territories, Northern
Mariana Islands Covenant grants (14–0412–0–
1–808);
‘‘Alaska Power Administration, Operation
and maintenance (89–0304–0–1–271);
‘‘Appropriations for the District of Colum-
bia (to the extent they are appropriations of lo-
cally raised funds);
‘‘Bonneville Power Administration fund
and borrowing authority established pursuant
to section 13 of Public Law 93–454 (1974), as
amended (89–4045–0–3–271);
‘‘Bureau of Indian Affairs, Indian land
and water claim settlements and miscellaneous
payments to Indians (14–2303–0–1–452);
‘‘Bureau of Indian Affairs, Miscellaneous
trust funds (14–9973–0–7–999);
‘‘Claims, defense (97–0102–0–1–051);
‘‘Claims, judgments, and relief acts (20–
1895–0–1–808);
‘‘Coinage profit fund (20–5811–0–2–803);
‘‘Compact of Free Association, (14–0415–
0–1–808);
‘‘Compensation of the President (11–
0001–0–1–802);
1524
‘‘Conservation Reserve Program (12-3319-
0-1-302);
‘‘Credit liquidating and financing accounts;
‘‘Customs Service, miscellaneous perma-
nent appropriations (20–9922–0–2–806);
‘‘Comptroller of the Currency, Assessment
funds (20–8413–0–8–373);
‘‘Dual benefits payments account (60–
0111–0–1–601);
‘‘Exchange stabilization fund (20–4444–0–
3–155);
‘‘Federal Deposit Insurance Corporation,
Bank Insurance Fund (51–4064–0–3–373);
‘‘Federal Deposit Insurance Corporation,
FSLIC Resolution Fund (51–4065–0–3–373);
‘‘Federal Deposit Insurance Corporation,
Savings Association Insurance Fund (51–4066–
0–3–373);
‘‘Federal Housing Finance Board (95–
4039–0–3–371);
‘‘Federal payment to the railroad retire-
ment accounts (60–0113–0–1–601);
‘‘Foreign military sales trust fund (11–
8242–0–7–155);
1525
‘‘Health professions graduate student loan
insurance program account (Health Education
Assistance Loan Program) (75–0340–0–1–
552);
‘‘Higher education facilities loans (91–
0240–01–502);
‘‘Internal Revenue collections for Puerto
Rico (20–5737–0–2–806);
‘‘Intragovernmental funds, including those
from which the outlays are derived primarily
from resources paid in from other government
accounts, except to the extent such funds are
augmented by direct appropriations for the fis-
cal year during which an order is in effect;
‘‘Panama Canal Commission, Panama
Canal Revolving Fund (95–4061–0–3–403);
‘‘Medical facilities guarantee and loan
fund, Federal interest subsidies for medical fa-
cilities (75–9931–0–3–550);
‘‘National Credit Union Administration op-
erating fund (25–4056–0–3–373);
‘‘National Credit Union Administration,
Central liquidity facility (25–4470–0–3–373);
1526
‘‘National Credit Union Administration,
Credit union share insurance fund (25–4468–
0–3–373);
‘‘Office of Thrift Supervision (20–4108–0–
3–373);
‘‘Payment of Vietnam and USS ‘Pueblo’
prisoner-of-war claims (15–0104–0–1–153);
‘‘Payment to civil service retirement and
disability fund (24–0200–0–1–805);
‘‘Payment to Judiciary Trust Funds (10–
0941–0–1–752);
‘‘Payments to copyright owners (03–5175–
0–2–376);
‘‘Payments to health care trust funds (75–
0580–0–1–571);
‘‘Payment to military retirement fund (97–
0040–0–1–054);
‘‘Payments to social security trust funds
(75–0404–0–1–651);
‘‘Payments to the foreign service retire-
ment and disability fund (11–1036–0–1–153
and 19–0540–0–1–153);
‘‘Payments to trust funds from excise
taxes or other receipts properly creditable to
such trust funds;
1527
‘‘Payments to the United States terri-
tories, fiscal assistance (14–0418–0–1–806);
‘‘Payments to widows and heirs of de-
ceased Members of Congress (00–0215–0–1–
801);
‘‘Postal service fund (18–4020–0–3–372);
‘‘Resolution Trust Corporation Revolving
Fund (22–4055–0–3–373);
‘‘Salaries of Article III judges;
‘‘Soldiers’ and Airmen’s Home, payments
of claims (84–8930–0–7–705);
‘‘Southeastern Power Administration, Op-
eration and maintenance (89–0302–0–1–271);
‘‘Southwestern Power Administration, Op-
eration and maintenance (89–0303–0–1–271);
‘‘Tennessee Valley Authority fund, except
non-power programs and activities (64–4110–
0–3–999);
‘‘Thrift Savings Fund;
‘‘United States Enrichment Corporation
Fund (95–4054–0–3–271);
‘‘Vaccine Injury Compensation (75–0320–
0–1–551);
‘‘Vaccine Injury Compensation Program
Trust Fund (20–8175–0–7–551);
1528
‘‘Washington Metropolitan Area Transit
Authority, interest payments (46–0300–0–1–
401);
‘‘Western Area Power Administration,
Construction, rehabilitation, operation, and
maintenance (89–5068–0–2–271); and
‘‘Western Area Power Administration, Col-
orado River basins power marketing fund (89–
4452–0–3–271).
‘‘(B) The following Federal retirement and dis-
ability accounts and activities shall be exempt from
reduction under any order issued under this Act:
‘‘Black Lung Disability Trust Fund (20–
8144–0–7–601);
‘‘Central Intelligence Agency retirement
and disability system fund (56–3400–0–1–054);
‘‘Civil service retirement and disability
fund (24–8135–0–7–602);
‘‘Comptrollers general retirement system
(05–0107–0–1–801);
‘‘Foreign service retirement and disability
fund (19–8186–0–7–602);
‘‘Judicial survivors’ annuities fund (10–
8110–0–7–602);
1529
‘‘Judicial Officers’ Retirement Fund (10–
8122–0–7–602);
‘‘Claims Court Judges’ Retirement Fund
(10–8124–0–7–602);
‘‘Special workers compensation expenses
(Longshoremen’s 
and 
harborworkers’ 
com-
pensation benefits) (16–9971–0–7–601);
‘‘Military retirement fund (97–8097–0–7–
602);
‘‘National Oceanic and Atmospheric Ad-
ministration retirement (13–1450–0–1–306);
‘‘Pensions for former Presidents (47–
0105–0–1–802);
‘‘Rail Industry Pension Fund (60–8011–
0–7–601);
‘‘Railroad supplemental annuity pension
fund (60–8012–0–7–602);
‘‘Retired pay, Coast Guard (69–0241–0–1–
403);
‘‘Retirement pay and medical benefits for
commissioned officers, Public Health Service
(75–0379–0–1–551);
‘‘Special 
benefits 
(Federal 
Employees’
Compensation Act) (16–1521–0–1–600);
1530
‘‘Special benefits for disabled coal miners
(75–0409–0–1–601); and
‘‘Tax Court judges survivors annuity fund
(23–8115–0–7–602).
‘‘(2) Prior legal obligations of the Government
in the following budget accounts and activities shall
be exempt from any order issued under this Act:
‘‘Biomass energy development (20–0114–
0–1–271);
‘‘United States Treasury check forgery in-
surance fund (20–4109–0–3–803);
‘‘Employees life insurance fund (24–8424–
0–8–602);
‘‘Energy security reserve (Synthetic Fuels
Corporation) (20–0112–0–1–271);
‘‘Federal Aviation Administration, Aviation
insurance revolving fund (69–4120–0–3–402);
‘‘Federal Crop Insurance Corporation fund
(12–4085–0–3–351);
‘‘Federal Emergency Management Agency,
National flood insurance fund (58–4236–0–3–
453);
‘‘Federal Emergency Management Agency,
National insurance development fund (58–
4235–0–3–451);
1531
‘‘Geothermal resources development fund
(89–0206–0–1–271);
‘‘Homeowners assistance fund, Defense
(97–4090–0–3–051);
‘‘International Trade Administration, Op-
erations and administration (13–1250–0–1–
376);
‘‘Low-rent public housing, Loans and other
expenses (86–4098–0–3–604);
‘‘Maritime Administration, War-risk insur-
ance revolving fund (69–4302–0–3–403);
‘‘Overseas Private Investment Corporation
(71–4030–0–3–151);
‘‘Pension Benefit Guaranty Corporation
fund (16–4204–0–3–601);
‘‘Rail service assistance (69–0122–0–1–
401);
‘‘Department of Veterans Affairs, Service-
men’s group life insurance fund (36–4009–0–3–
701).
‘‘(h) LOW-INCOME PROGRAMS.—The following pro-
grams shall be exempt from reduction under any order is-
sued under this Act:
‘‘Aid to families with dependent children (75–
1501–0–1–609);
1532
‘‘Child nutrition (12–3539–0–1–605);
‘‘Commodity supplemental food program (12–
3512–0–1–605);
‘‘Food stamp programs (12–3505–0–1–605 and
12–3550–0–1–605);
‘‘Grants to States for Medicaid (75–0512–0–1–
551);
‘‘Supplemental Security Income Program (75–
0406–0–1–609); and
‘‘Women, infants, and children program (12–
3510–0–1–605).
‘‘(i) IDENTIFICATION OF PROGRAMS.—For purposes
of subsections (b), (g), and (h), each account is identified
by the designated budget account identification code num-
ber set forth in the Budget of the United States Govern-
ment, 1994—Appendix, and an activity within an account
is designated by the name of the activity and the identi-
fication code number of the account.’’.
SEC. 
15107. 
GENERAL 
AND 
SPECIAL 
SEQUESTRATION
RULES.
Section 256 is amended as follows:
(1) Strike the section heading and insert the
following new section heading:
1533
‘‘SEC. 
256. 
GENERAL 
AND 
SPECIAL 
SEQUESTRATION
RULES.’’.
(2) Subsection (a) is amended by striking
‘‘part’’ and inserting ‘‘Act’’.
(3) Subsection (b) is repealed and subsection
(a) is redesignated as subsection (b).
(4) A new subsection (a) is inserted, as follows:
‘‘(a) BUDGET-YEAR SEQUESTRATION.—For each di-
rect spending program subject to sequestration under this
Act, a sequestration shall apply for the period starting on
the date the sequestration order under section 254 is is-
sued and ending on the last day of the budget year, unless
a different period is specified in this section. For purposes
of section 253, the amount estimated to be saved in all
fiscal years by a budget-year sequestration under section
252 or 253 shall be considered to have been saved in the
budget year.’’.
(5) Subsection (e)(1) is amended by striking
‘‘be—’’ and all that follows through ‘‘subsequent fis-
cal year’’ and inserting ‘‘be 2 percent’’.
(6) Subsection (h)(4) is amended by striking
‘‘(D) Office of Thrift Supervision.’’ and ‘‘(H) Reso-
lution Funding Corporation.’’ and redesignating the
remaining subparagraphs accordingly.
(7) Subsection (j) is amended by striking ‘‘joint
resolution’’ and inserting ‘‘Act’’ each place it ap-
1534
pears and by amending paragraph (5) to read as
follows:
‘‘(5) DAIRY PROGRAM.—Notwithstanding other
provisions of this subsection, as the sole means of
achieving any reduction in outlays under the milk
price support program, the Secretary of Agriculture
shall provide for a reduction to be made in the price
received by producers for all milk produced in the
United States and marketed by producers for com-
mercial use. That price reduction (measured in cents
per hundredweight of milk marketed) shall occur
under subparagraph (A) of section 201(d)(2) of the
Agricultural Act of 1949 (7 U.S.C. 1446(d)(2)(A)),
shall begin on the day any sequestration order is is-
sued under section 254, and shall not exceed the ag-
gregate amount of the reduction in outlays under
the milk price support program that otherwise would
have been achieved by reducing payments for the
purchase of milk or the products of milk under this
subsection during the applicable fiscal year.’’.
(8) Subsection (k)(2) is amended by striking
the dash the second place it appears and all that fol-
lows through ‘‘(I)’’; and by striking ‘‘; or’’ and all
that follows through ‘‘(II)’’ and inserting ‘‘, except
1535
that a State may not be allotted an amount under
this subparagraph that exceeds’’.
(9) Subsection (l) is redesignated as subsection
(m) and is amended by striking paragraph (4) and
by redesignating paragraphs (5) and (6) as para-
graphs (4) and (5), respectively’’.
(10) After subsection (k) add the following new
subsection:
‘‘(l) STUDENT LOANS.—For all student loans under
part B or D of title IV of the Higher Education Act of
1965 made during the period when a sequestration order
under section 254 is in effect, origination fees under sec-
tions 438(c)(2) and 456(c) of that Act shall be increased
by a uniform percentage sufficient to produce the dollar
savings in student loan programs (as a result of that
sequestration order) required by section 252 or 253, as
applicable.’’.
SEC. 15108. THE BASELINE.
Section 257 is amended as follows:
(1) In subsection (a), insert ‘‘, and discre-
tionary regulations promulgated as final by,’’ after
‘‘through’’.
(2) In subsection (b), strike ‘‘budget year’’ and
insert ‘‘current year, the budget year,’’.
(3) Amend subsection (b)(1) to read as follows:
1536
‘‘(1) IN GENERAL.—Laws providing or creating
direct spending and receipts are assumed to operate
in the manner specified in those laws for each such
year, funding for mandatory appropriations is as-
sumed to be adequate to make all payments required
by those mandates, and regulations over which the
President has discretion are assumed to remain in
effect as they were at the time the baseline for the
budget year was first completed.’’.
(4) Amend subsection (b)(2)(A) to read as fol-
lows:
‘‘(A) No program with estimated current-
year gross new budget authority greater than
$50,000,000 is assumed to expire in the budget
year or outyears. In carrying out the preceding
sentence, expiring programs funded by manda-
tory appropriations or by indefinite budget au-
thority are assumed to continue under the di-
rect spending law in effect just prior to their
expiration, and other expiring programs are as-
sumed to continue with new budget authority
projected as under subsection (c)(4).’’.
(5) In subsection (b)(2)(B), insert ‘‘percentage’’
before ‘‘increase’’.
(6) Amend subsection (b)(3) to read as follows:
1537
‘‘(3) CUTOFF DATE.—Programs or taxes that
expire on or before December 31 and that have not
been reauthorized by the date of the final sequestra-
tion report are assumed to expire. If an increase in
veterans compensation for the budget year has not
been enacted by the date of the final sequestration
report, it is not assumed.’’.
(7) In subsection (c), strike ‘‘budget year’’ and
insert ‘‘current year, the budget year,’’ and strike
‘‘all amounts other than those covered by subsection
(b)’’ and insert ‘‘discretionary programs’’.
(8) Paragraphs (1) and (2) of subsection (c)
are amended to read as follows:
‘‘(1) INFLATION OF CURRENT-YEAR APPROPRIA-
TIONS.—
‘‘(A) Gross new budget authority shall be
at the level provided for that fiscal year in ap-
propriation Acts and discretionary offsetting
collections shall be at the estimated level re-
quired by existing law (assuming the baseline
level of gross new budget authority).
‘‘(B) If for any account an appropriation
has not yet been enacted, gross new budget au-
thority is assumed to be at the level available
in the current year, adjusted for expiring hous-
1538
ing contracts as specified in paragraph (2), for
social insurance administrative expenses as
specified in paragraph (3), for inflation as spec-
ified in paragraph (4), and to account for
changes required by law in the level of agency
payments for personnel benefits other than pay.
‘‘(2) EXPIRING
HOUSING
CONTRACTS.—New
budget authority to renew expiring multiyear sub-
sidized housing contracts or provide contracts to re-
place units lost due to prepayments shall be adjusted
to reflect the difference in the number of such con-
tracts that are estimated to expire or be prepaid in
that fiscal year and the number expiring or being
prepaid in the current year.’’.
(9) In subsection (c)(3), strike ‘‘Budgetary’’
and insert ‘‘New budgetary’’, insert ‘‘or number of
claims, as applicable,’’ after ‘‘population’’, and insert
‘‘the Federal Old-Age and Survivors Insurance
Trust Fund, the Federal Disability Insurance Trust
Fund,’’ after the colon.
(10) In subsection (c), strike paragraph (4) and
redesignate paragraphs (5) and (6) as (4) and (5),
respectively.
(11) Amend the first sentence of subsection
(c)(4) to read as follows: ‘‘The inflator to adjust new
1539
budget authority relating to civilian personnel is the
percent by which the average rate of basic pay for
the general schedule pay system, calculated as speci-
fied in sections 5303(a) and 5304 of title 5, United
States Code, for that fiscal year exceeds the average
rate of basic pay for the current year. The inflator
for military personnel is the percent by which the
average rate of basic pay, as specified in section
1009 of title 37, United States Code, for that fiscal
year exceeds the average rate of basic pay for the
current year.’’.
(12) In the second sentence of subsection
(c)(4), strike ‘‘used in paragraph (1)’’ and strike
‘‘national’’ and insert ‘‘domestic’’.
(13) Amend the side heading and first sentence
of subsection (c)(5) to read as follows: ‘‘PART-YEAR
APPROPRIATIONS; PERMISSIVE TRANSFERS.—If, for
any account, a continuing appropriation is in effect
for less than an entire fiscal year, then the amount
available for that fiscal year is assumed to equal the
amount that would be available if that continuing
appropriation covered the entire fiscal year.’’.
(14) In the second sentence of subsection
(c)(5), insert ‘‘or midsession review’’ after ‘‘original
budget’’.
1540
(15) Amend subsection (e) to read as follows:
‘‘(e) ASSET SALES.—Amounts realized from new
asset sales shall not be counted for purposes of this sec-
tion. Asset sales shall not be considered new if the author-
ity to make those sales was enacted in a prior session of
Congress or is a reauthorization of routine, ongoing asset
sales at levels consistent with agency operations in fiscal
year 1993.’’.
SEC. 15109. FAST-TRACK PROCEDURES.
(a) REPEALER.—The first section 258 (relating to
modification of Presidential orders) is repealed.
(b) CONFORMING AMENDMENT.—In the second sec-
tion 258, strike ‘‘254(j)’’ each time it appears and insert
‘‘254(k)’’; strike ‘‘310(d)’’ and insert ‘‘310(c)’’; and in
subsection (a)(4)(A) strike ‘‘discharged pursuant’’ and in-
sert ‘‘discharged in the Senate pursuant’’.
(c) 
CONFORMING
AMENDMENT.—In 
section
258A(b)(6), strike ‘‘, IV, and VI’’ and insert ‘‘and IV’’.
(d) 
CONFORMING
AMENDMENT.—In 
section
258B(k), strike ‘‘306, and 401(b)(1)’’ and insert ‘‘and
306’’.
(e) 
CONFORMING
AMENDMENT.—In 
section
258C(a)(1), strike ‘‘sequestration update’’ and insert
‘‘scorecard’’ and strike ‘‘or 253’’.
1541
SEC. 15110. JUDICIAL REVIEW.
Section 274 is amended as follows:
(1) Strike ‘‘252’’ or ‘‘252(b)’’ each place it oc-
curs and insert ‘‘254’’.
(2) In subsection (d)(1)(A), strike ‘‘257(l) to
the extent that’’ and insert ‘‘256(b) if’’, strike the
parenthetical phrase, and at the end insert ‘‘or’’.
(3) In subsection (d)(1)(B), strike ‘‘new budg-
et’’ and all that follows through ‘‘spending author-
ity’’ and insert ‘‘budgetary resources’’ and strike
‘‘or’’ after the comma.
(4) Strike subsection (d)(1)(C).
(5) Strike subsection (f) and redesignate sub-
sections (g) and (h) as subsections (f) and (g), re-
spectively.
(6) Amend subsection (g) to read as follows:
‘‘(g) ECONOMIC DATA, ASSUMPTIONS, AND METH-
ODOLOGIES.—The economic data and economic assump-
tions used by the Director of OMB in preparing the budg-
et of the United States Government, or in making calcula-
tions under this Act, shall not be subject to review in any
judicial or administrative proceeding.’’.
SEC. 15111. EFFECTIVE DATE.
(a) EXPIRATION.—Section 275(b) is amended to read
as follows:
1542
‘‘(b) EXPIRATION.—(1) Except as provided by para-
graph (2), part C of this Act shall expire on September
30, 2002.
‘‘(2) Sections 251, 257, and 258B of this Act and
sections 1105(f) and 1106(c) of title 31, United States
Code, shall expire on September 30, 1998, and section 253
of this Act shall expire on September 30, 1995.’’.
(b) EFFECTIVE DATES.—
(1) IN GENERAL.—The amendments made by
this subtitle shall be effective upon enactment for
fiscal year 1994 and subsequent fiscal years.
(2) SPECIAL RULE FOR FISCAL YEAR 1993.—
For fiscal year 1993, the Balanced Budget and
Emergency Deficit Control Act of 1985 and title VI
of the Congressional Budget Act of 1974 shall be
applied and administered as if this title had not been
enacted.
Subtitle B—Amendments to the
Congressional Budget and Im-
poundment Control Act of 1974;
Conforming Amendments
SEC. 15201. DEFINITIONS.
Section 3 of the Congressional Budget and Impound-
ment Control Act of 1974 is amended as follows:
(1) Repeal the first paragraph (2).
1543
(2) Amend the second paragraph (2) to read as
follows:
‘‘(2) BUDGET AUTHORITY AND NEW BUDGET
AUTHORITY.—
‘‘(A) IN GENERAL.—The term ‘budget au-
thority’
means
the
authority
provided
by
Federal law to incur financial obligations, as
follows:
‘‘(i) provisions of law that make funds
available for obligation and expenditure
(other than borrowing authority), including
the authority to obligate and expend the
proceeds of offsetting receipts and collec-
tions;
‘‘(ii) 
borrowing 
authority, 
which
means authority granted to a Federal en-
tity to borrow, obligate, and expend the
borrowed funds, including through the is-
suance of promissory notes or other mone-
tary credits;
‘‘(iii) contract authority, which means
the making of funds available for obliga-
tion but not for expenditure; or
‘‘(iv) offsetting receipts and collections
as
negative
budget
authority,
and
the
1544
reduction thereof
as
positive
budget
authority.
‘‘(B) LIMITATIONS ON BUDGET AUTHOR-
ITY.—Any amount that is precluded from obli-
gation in a fiscal year by a provision of law
(such as a limitation or a benefit formula) shall
not be budget authority in that year.
‘‘(C) LOAN COSTS.—The term ‘budget au-
thority’ includes the cost for direct loan and
loan guarantee programs, as those terms are
defined by title V.
‘‘(D) DIRECT
SPENDING.—The term ‘di-
rect spending’ means budget authority provided
by law other than an appropriation Act or by
a law that determines amounts needed to fund
mandatory appropriations (including the food
stamp program), but such term does not in-
clude salary or basic pay funded through an ap-
propriation Act.
‘‘(E) NEW
BUDGET
AUTHORITY.—The
term ‘new budget authority’ means, with re-
spect to a fiscal year—
‘‘(i) budget authority that first be-
comes available for obligation in that year,
including budget authority that becomes
1545
available in that year as a result of a reap-
propriation; or
‘‘(ii) a change in any account in the
availability of unobligated balances of
budget authority carried over from a prior
year, resulting from a provision of law first
effective in that year.
New budget authority, with respect to a fiscal
year, includes a change in the estimated level of
the authority to incur obligations in an account
that, under existing law, has authority to obli-
gate indefinite amounts, if the change results
from a change in law.’’.
(3) Repeal paragraph (9), redesignate para-
graphs (3) through (8) as paragraphs (4) through
(9), and insert after paragraph (2) the following new
paragraph:
‘‘(3) DEFICIT IMPACT NUMBER (OR SURPLUS
IMPACT NUMBER).—The term ‘deficit impact num-
ber’ (or ‘surplus impact number’) means, with re-
spect to a fiscal year, the change in the deficit (or
surplus) that may be caused by any combination of
increases or decreases in direct spending and reve-
nue assumed by the most recently agreed to concur-
rent resolution to be enacted in the current session
1546
of Congress and allocated to a committee. An impact
number greater than zero increases the deficit (or
decreases the surplus) and an impact number less
than zero decreases the deficit (or increases the
surplus).’’.
(4) Amend paragraph (6) (as redesignated) by
inserting before the period the following: ‘‘, and the
term ‘appropriation measure’ means a general or
supplemental appropriation bill or a joint resolution
making continuing appropriations, but not yet en-
acted into law’’.
(5) At the end, add the following new para-
graph:
‘‘(11) The term ‘new credit authority’ means
credit authority not provided by law as of February
1, 1986, including any increase in or addition to
credit authority provided by law on such date.’’.
SEC. 15202. CONGRESSIONAL BUDGET OFFICE.
Title II of the Congressional Budget Act of 1974 is
amended as follows:
(1) The first section 201(g) is amended by
striking ‘‘(g)’’ and inserting ‘‘(f)’’.
(2) The side heading of section 202(f) is
amended by striking ‘‘TO BUDGET COMMITTEES’’.
1547
(3) Section 202(f)(1) is amended by striking
‘‘On or before February 15 of each year’’ and insert-
ing ‘‘Within 20 days after the President’s budget
submission’’.
(4) Section 202(f) is amended by adding at the
end the following new paragraphs:
‘‘(4) As soon as practicable after the beginning
of each fiscal year, the Director shall issue a report
projecting for the period of 5 fiscal years beginning
with such fiscal year—
‘‘(A) total new budget authority and total
budget outlays for each fiscal year in such
period;
‘‘(B) revenues to be received and the major
sources thereof, and the surplus or deficit, if
any, for each fiscal year in such period; and
‘‘(C) tax expenditures for each fiscal year
in such period.
‘‘(5)(A) The Director shall, to the extent prac-
ticable, prepare for each bill or joint resolution re-
ported by any committee of the House of Represent-
atives or the Senate (except the Committee on Ap-
propriations of each House), and submit to such
committee—
1548
‘‘(i) an estimate of the costs which would
be incurred in carrying out such bill or joint
resolution in the fiscal year in which it is to be-
come effective and in each of the 4 fiscal years
following such fiscal year, together with the
basis for each such estimate;
‘‘(ii) an estimate of the cost which would
be incurred by State and local governments in
carrying out or complying with any significant
bill or joint resolution in the fiscal year in
which it is to become effective and in each of
the four fiscal years following such fiscal year,
together with the basis for each such estimate;
and
‘‘(iii) a comparison of the estimates of
costs described in clauses (i) and (ii), with any
available estimates of costs made by such com-
mittee or by any Federal agency.
The estimates, comparison, and description so sub-
mitted shall be included in the report accompanying
such bill or joint resolution if timely submitted to
such committee before such report is filed.
‘‘(B) For purposes of subparagraph (A)(ii), the
term ‘local government’ has the same meaning as in
1549
section 103 of the Intergovernmental Cooperation
Act of 1968.
‘‘(C) For purposes of subparagraph (A)(ii), the
term ‘significant bill or joint resolution’ is defined as
any bill or joint resolution which in the judgment of
the Director of the Congressional Budget Office is
likely to result in an annual cost to State and local
governments of $200,000,000 or more, or is likely to
have exceptional fiscal consequences for a geographic
region or a particular level of government.’’.
(5) Section 202(h) is amended by striking
‘‘budget outlays, credit authority,’’ and insert ‘‘var-
ious forms of spending programs, including grants
and loans,’’.
SEC. 15203. CONGRESSIONAL BUDGET PROCESS.
Title III of the Congressional Budget Act of 1974
is amended to read as follows:
‘‘TITLE III—CONGRESSIONAL
BUDGET PROCESS
‘‘SEC. 300. TIMETABLE.
‘‘The timetable with respect to the congressional
budget process for any fiscal year is as follows:
‘‘On or before:
Action to be completed:
First Monday in February ............
President submits the budget.
Six weeks after President’s budget
submission.
Committees submit views and esti-
mates to Budget Committees.
April 1 ...........................................
Senate Budget Committee reports
concurrent resolution on the budg-
et.
1550
‘‘On or before:
Action to be completed:
April 15 .........................................
Congress completes action on concur-
rent resolution on the budget.
May 15 ..........................................
House committees report bills author-
izing new budget authority.
June 10 .........................................
House Appropriations Committee re-
ports last annual appropriation bill.
June 30 .........................................
House completes action on annual ap-
propriation bills and (if required) a
reconciliation bill.
October 1 .......................................
Fiscal year begins.
‘‘SEC. 301. ANNUAL ADOPTION OF CONCURRENT RESOLU-
TION ON THE BUDGET.
‘‘(a) CONTENT OF CONCURRENT RESOLUTION ON
THE BUDGET.—On or before April 15 of each year, the
Congress shall complete action on a concurrent resolution
on the budget. The concurrent resolution shall set forth
appropriate levels for the fiscal year beginning on October
1 of such year and for each of the 4 ensuing fiscal years,
for the following—
‘‘(1) totals of new budget authority and budget
outlays;
‘‘(2) total Federal revenues and the amount, if
any, by which the aggregate level of Federal reve-
nues should be increased or decreased by bills and
resolutions to be reported by the appropriate com-
mittees;
‘‘(3) the surplus or deficit in the budget;
‘‘(4) new budget authority and budget outlays
for each major functional category, based on alloca-
1552
surance Trust Fund shall be included in the computations
required by paragraphs (1) through (5), and no separate
display of Hospital Insurance Trust Fund receipts or al-
ternative displays of budget totals excluding Hospital in-
surance receipts and disbursements are required to be in-
cluded in any concurrent resolution on the budget.
‘‘(b) ADDITIONAL MATTERS IN CONCURRENT RESO-
LUTION.—The concurrent resolution on the budget may—
‘‘(1) set forth, if required by subsection (f), the
calendar year in which, in the opinion of the Con-
gress, the goals for reducing unemployment set forth
in section 4(b) of the Employment Act of 1946
should be achieved;
‘‘(2) include reconciliation directives described
in section 310;
‘‘(3) set forth the appropriate level of the public
debt for purposes of rule XLIX of the Rules of the
House of Representatives; and
‘‘(4) set forth such other matters, and require
such other procedures, relating to the budget, as
may be appropriate to carry out the purposes of this
Act.
‘‘(c) CONSIDERATION OF PROCEDURES OR MATTERS
WHICH HAVE THE EFFECT OF CHANGING ANY RULE OF
THE HOUSE OF REPRESENTATIVES.—If the Committee
1553
on the Budget of the House of Representatives reports
any concurrent resolution on the budget which includes
any procedure or matter which has the effect of changing
any rule of the House of Representatives, such concurrent
resolution shall then be referred to the Committee on
Rules with instructions to report it within five calendar
days (not counting any day on which the House is not
in session). The Committee on Rules shall have jurisdic-
tion to report any concurrent resolution referred to it
under this paragraph with an amendment or amendments
changing or striking out any such procedure or matter.
‘‘(d) VIEWS AND ESTIMATES OF OTHER COMMIT-
TEES.—Within 6 weeks after the President submits a
budget under section 1105(a) of title 31, United States
Code, each committee of the House of Representatives
having legislative jurisdiction may submit to the Commit-
tee on the Budget of the House and each committee of
the Senate having legislative jurisdiction may submit to
the Committee on the Budget of the Senate its views and
estimates (as determined by the committee making such
submission) with respect to all matters set forth in sub-
sections (a) and (b) which relate to matters within the
jurisdiction or functions of such committee. The Joint
Economic Committee shall submit to the Committees on
the Budget of both Houses its recommendations as to the
1554
fiscal policy appropriate to the goals of the Employment
Act of 1946. Any other committee of the House of Rep-
resentatives or the Senate may submit to the Committee
on the Budget of its House, and any joint committee of
the Congress may submit to the Committees on the Budg-
et of both Houses, its views and estimates with respect
to all matters set forth in subsections (a) and (b) which
relate to matters within its jurisdiction or functions.
‘‘(e) HEARINGS
AND REPORT.—In developing the
concurrent resolution on the budget referred to in sub-
section (a) for each fiscal year, the Committee on the
Budget of each House shall hold hearings and shall receive
testimony from Members of Congress and such appro-
priate representatives of Federal departments and agen-
cies, the general public, and national organizations as the
committee deems desirable. Each of the recommendations
as to short-term and medium-term goals set forth in the
report submitted by the members of the Joint Economic
Committee under subsection (d) may be considered by the
Committee on the Budget of each House as part of its
consideration of such concurrent resolution, and its report
may reflect its views thereon, including its views on how
the estimates of revenues and total levels of new budget
authority and outlays set forth in such concurrent resolu-
tion are designed to achieve any economic goals it is rec-
1555
ommending. The report accompanying such concurrent
resolution shall include, but not be limited to—
‘‘(1) a comparison of revenues estimated by the
committee with those estimated in the budget sub-
mitted by the President;
‘‘(2) a comparison of the appropriate levels of
total budget outlays and total new budget authority
as set forth in such concurrent resolution with those
estimated or requested in the budget submitted by
the President;
‘‘(3) with respect to each major functional cat-
egory, an estimate of budget outlays and an appro-
priate level of new budget authority for all proposed
programs and for all existing programs (including
renewals thereof), with the estimate and level for ex-
isting programs being divided between permanent
authority and funds provided in appropriation Acts,
and with each such division being subdivided be-
tween controllable amounts and all other amounts;
‘‘(4) an allocation of the level of Federal reve-
nues recommended in the concurrent resolution
among the major sources of such revenues;
‘‘(5) the economic assumptions and objectives
which underlie each of the matters set forth in such
concurrent resolution and any alternative economic
1556
assumptions and objectives which the committee
considered;
‘‘(6) the estimated levels of tax expenditures
(the tax expenditures budget) by major functional
categories;
‘‘(7) a statement of any significant changes in
the proposed levels of Federal assistance to State
and local governments;
‘‘(8) information, data, and comparisons indi-
cating the manner in which, and the basis on which,
the committee determined each of the matters set
forth in the concurrent resolution; and
‘‘(9) allocations described in sections 302(a)
and 311(a).
‘‘(f) ACHIEVEMENT OF GOALS FOR REDUCING UN-
EMPLOYMENT.—
‘‘(1) If, pursuant to section 4(c) of the Employ-
ment Act of 1946, the President recommends in the
Economic Report that the goals for reducing unem-
ployment set forth in section 4(b) of such Act be
achieved in a year after the close of the five-year pe-
riod prescribed by such subsection, the concurrent
resolution on the budget for the fiscal year begin-
ning after the date on which such Economic Report
is received by the Congress may set forth the year
1557
in which, in the opinion of the Congress, such goals
can be achieved.
‘‘(2) After the Congress has expressed its opin-
ion pursuant to paragraph (1) as to the year in
which the goals for reducing unemployment set forth
in section 4(b) of the Employment Act of 1946 can
be achieved, if, pursuant to section 4(e) of such Act,
the President recommends in the Economic Report
that such goals be achieved in a year which is dif-
ferent from the year in which the Congress has ex-
pressed its opinion that such goals should be
achieved, either in its action pursuant to paragraph
(1) or in its most recent action pursuant to this
paragraph, the concurrent resolution on the budget
for the fiscal year beginning after the date on which
such Economic Report is received by the Congress
may set forth the year in which, in the opinion of
the Congress, such goals can be achieved.
‘‘(g) ECONOMIC ASSUMPTIONS.—
‘‘(1) It shall not be in order in the Senate to
consider any concurrent resolution on the budget for
a fiscal year, or any amendment thereto, or any con-
ference report thereon, that sets forth amounts and
levels that are determined on the basis of more than
one set of economic and technical assumptions.
1558
‘‘(2) The joint explanatory statement accom-
panying a conference report on a concurrent resolu-
tion on the budget shall set forth the common eco-
nomic assumptions upon which such joint statement
and conference report are based, or upon which any
amendment contained in the joint explanatory state-
ment to be proposed by the conferees in the case of
technical disagreement, is based.
‘‘(3) Determinations by the Committee on the
Budget of the House of Representatives or the Sen-
ate, as the case may be, under titles III and IV of
the Congressional Budget Act of 1974 shall be based
upon
such
common
economic
and
technical
assumptions.
‘‘(h) BUDGET COMMITTEES CONSULTATION WITH
COMMITTEES.—The Committee on the Budget of the
House of Representatives shall consult with the commit-
tees of its House having legislative jurisdiction during the
preparation, consideration, and enforcement of the concur-
rent resolution on the budget with respect to all matters
which relate to the jurisdiction or functions of such com-
mittees. The Committee on the Budget of the House of
Representatives may not report a concurrent resolution on
the budget containing the matter referred to in subsection
1559
(b)(3) except after consultation with the Committee on
Ways and Means about that matter.
‘‘(i) SOCIAL SECURITY POINT OF ORDER IN THE
SENATE.—It shall not be in order in the Senate to con-
sider any concurrent resolution on the budget as reported
to the Senate or any amendment thereto that would de-
crease the excess of social security revenues over social se-
curity outlays in any of the fiscal years covered by the
concurrent resolution. No change in chapter 1 of the In-
ternal Revenue Code of 1986 shall be treated as affecting
the amount of social security revenues unless such provi-
sion changes the income tax treatment of social security
benefits.
‘‘SEC. 302. APPROPRIATION COMMITTEE ALLOCATIONS
AND ENFORCEMENT.
‘‘(a) COMMITTEE SPENDING ALLOCATIONS.—The
joint explanatory statement accompanying a conference
report on a budget resolution shall include an allocation,
consistent with the resolution recommended in the con-
ference report, of the appropriate levels (for the budget
year covered by that resolution) of total new budget au-
thority and total outlays for the Committee on Appropria-
tions of each House. The amounts so allocated shall be
further divided between discretionary and mandatory
amounts, as appropriate.
1560
‘‘(b) SUBDIVISIONS
BY APPROPRIATIONS COMMIT-
TEES.—As soon as practicable after a budget resolution
is agreed to, the Committee on Appropriations of each
House shall subdivide each amount allocated to it for the
budget year under subsection (a) among its subcommit-
tees. Each Committee on Appropriations shall promptly
report to its House subdivisions made or revised under
this subsection.
‘‘(c) POINT OF ORDER.—It shall not be in order in
the House of Representatives or the Senate to consider
any appropriation measure, or amendment thereto, or mo-
tion or conference report thereon, unless and until the
Committee on Appropriations of that House reports sub-
divisions required by subsection (b) consistent with the
most recently agreed to concurrent resolution on the
budget.
‘‘(d) SUBSEQUENT CONCURRENT RESOLUTIONS.—In
the case of a concurrent resolution on the budget referred
to in section 304, the allocations under subsection (a) and
the subdivisions under subsection (b) shall be required
only to the extent necessary to take into account revisions
made in the most recently agreed to concurrent resolution
on the budget.
‘‘(e) ALTERATION OF SUBDIVISIONS.—At any time
after the Committee on Appropriations of either House re-
1561
ports the subdivisions required to be made under sub-
section (b), that committee may report to its House an
alteration of such subdivisions. Any alteration of such sub-
divisions must be consistent with any actions already
taken by its House on measures within that committee’s
jurisdiction.
‘‘(f) LEGISLATION
SUBJECT
TO
POINT
OF
ORDER.—
(1) It shall not be in order in the House of
Representatives or the Senate to consider any appro-
priation measure or amendment thereto or motion or
conference report thereon, if the new budget author-
ity provided in that measure when added to already
enacted levels of new budget authority would
cause—
‘‘(A) any allocation of new budget author-
ity made pursuant to subsection (a) under the
most recently agreed to concurrent resolution
on the budget to be exceeded; or
‘‘(B) any subdivision of new budget au-
thority made pursuant to subsection (b) under
the most recently agreed to concurrent resolu-
tion on the budget to be exceeded except for a
supplemental appropriation for the current fis-
cal year.
1562
‘‘(2) An appropriation measure, amendment, or
conference report shall be considered to violate para-
graph (1) only if—
‘‘(A) the enactment of such appropriation
measure in the form it will be considered as
original text for purposes of amendment;
‘‘(B) the amendment is not an amendment
considered as original text for purposes of
amendment and the adoption of such amend-
ment and enactment of that measure as so
amended; or
‘‘(C) the enactment of such measure in the
form recommended in such conference report,
would cause such a violation.
‘‘(g) DETERMINATIONS BY BUDGET COMMITTEES.—
For purposes of this section, the levels of new budget au-
thority shall be determined on the basis of estimates made
by the Committee on the Budget of the House of Rep-
resentatives or the Senate, as the case may be.
‘‘(h) ADJUSTMENTS OF ALLOCATIONS OF DISCRE-
TIONARY SPENDING.—
‘‘(1) If a concurrent resolution on the budget is
not adopted by April 30, the chairman of the Com-
mittee on the Budget of the House of Representa-
tives shall submit to the House, on the first legisla-
1563
tive day following April 30, an allocation under sub-
section (a) to the Committee on Appropriations con-
sistent with the discretionary spending limits con-
tained in the most recent budget submitted by the
President under section 1105(a) of title 31, United
States Code.
‘‘(2) As soon as practicable after an allocation
under paragraph (1) is submitted to the House, the
Committee on Appropriations shall make subdivi-
sions and promptly report those subdivisions to the
House of Representatives.
‘‘(3) Allocations and subdivisions made under
this subsection shall, for all purposes of this title, be
deemed to be allocations and subdivisions made
under subsections (a) and (b), until superseded by
allocations and subdivisions made under those sec-
tions for the same fiscal year.
‘‘SEC. 303. LEGISLATION PROVIDING NEW BUDGET AU-
THORITY OR CHANGES IN REVENUES OR THE
PUBLIC DEBT LIMIT MAY ONLY DO SO FOR
YEARS COVERED BY MOST RECENT BUDGET
RESOLUTION.
‘‘(a) IN GENERAL.—
‘‘(1) It shall not be in order in the House of
Representatives or the Senate to consider any bill,
1564
joint resolution, amendment, motion, or conference
report which contains a provision that—
‘‘(A) increases new budget authority;
‘‘(B) decreases revenues; or
‘‘(C) increases or decreases the public debt
limit,
first effective in the last fiscal year covered by the
most recently agreed to concurrent resolution on the
budget or any subsequent fiscal year.
‘‘(2) A bill, joint resolution, amendment, or con-
ference report shall be considered to violate para-
graph (1) only if—
‘‘(A) the enactment of such bill or resolu-
tion in the form it will be considered as original
text for purposes of amendment;
‘‘(B) the amendment is not an amendment
considered as original text for purposes of
amendment and the adoption of such amend-
ment and enactment of the bill or joint resolu-
tion as so amended; or
‘‘(C) the enactment of such bill or resolu-
tion in the form recommended in such con-
ference report,
would cause such a violation.
‘‘(b) WAIVER IN THE SENATE.—
1565
‘‘(1) The committee of the Senate which reports
any bill or resolution (or amendment thereto) to
which subsection (a) applies may at or after the time
it reports such bill or resolution (or amendment), re-
port a resolution to the Senate (A) providing for the
waiver of subsection (a) with respect to such bill or
resolution (or amendment), and (B) stating the rea-
sons why the waiver is necessary. The resolution
shall then be referred to the Committee on the
Budget of the Senate. That committee shall report
the resolution to the Senate within 10 days after the
resolution is referred to it (not counting any day on
which the Senate is not in session) beginning with
the day following the day on which it is so referred,
accompanied by that committee’s recommendations
and reasons for such recommendations with respect
to the resolution. If the committee does not report
the resolution within such 10-day period, it shall
automatically be discharged from further consider-
ation of the resolution and the resolution shall be
placed on the calendar.
‘‘(2) During the consideration of any such reso-
lution, debate shall be limited to one hour, to be
equally divided between, and controlled by, the ma-
jority leader and minority leader or their designees,
1566
and the time on any debatable motion or appeal
shall be limited to twenty minutes, to be equally di-
vided between, and controlled by, the mover and the
manager of the resolution. In the event the manager
of the resolution is in favor of any such motion or
appeal, the time in opposition thereto shall be con-
trolled by the minority leader or his designee. Such
leaders, or either of them, may, from the time under
their control on the passage of such resolution, allot
additional time to any Senator during the consider-
ation of any debatable motion or appeal. No amend-
ment to the resolution is in order.
‘‘(3) If, after the Committee on the Budget has
reported (or been discharged from further consider-
ation of) the resolution, the Senate agrees to the
resolution, then subsection (a) shall not apply with
respect to the bill or resolution (or amendment
thereto) to which the resolution so agreed to applies.
‘‘SEC. 304. PERMISSIBLE REVISIONS OF CONCURRENT RES-
OLUTIONS ON THE BUDGET.
‘‘The two Houses may adopt a concurrent resolution
on the budget which revises or reaffirms the concurrent
resolution on the budget most recently agreed to and
which satisfies the requirements of section 301.
1567
‘‘SEC. 305. PROVISIONS RELATING TO THE CONSIDERATION
OF CONCURRENT RESOLUTIONS ON THE
BUDGET.
‘‘(a) PROCEDURE IN HOUSE OF REPRESENTATIVES
AFTER REPORT OF COMMITTEE; DEBATE.—
‘‘(1) When the Committee on the Budget of the
House of Representatives has reported any concur-
rent resolution on the budget, it is in order subject
to clause (2)(l)(6) of rule XI of the Rules of the
House of Representatives to move that the House
resolve itself into the Committee of the Whole House
on the State of the Union for the consideration of
the concurrent resolution. The motion is highly priv-
ileged and is not debatable. An amendment to the
motion is not in order, and it is not in order to move
to reconsider the vote by which the motion is agreed
to or disagreed to. A motion to resolve into the Com-
mittee of the Whole may be made even though a
previous motion has been disagreed to.
‘‘(2) General debate on any concurrent resolu-
tion on the budget in the House of Representatives
shall be limited to not more than 10 hours, which
shall be divided equally between the majority and
minority parties, and such additional hours of debate
as are consumed pursuant to paragraph (3). A mo-
tion further to limit debate is not debatable.
1568
‘‘(3) Following the presentation of opening
statements on the concurrent resolution on the
budget for a fiscal year by the chairman and rank-
ing minority member of the Committee on the Budg-
et of the House, there shall be a period of up to four
hours for debate on economic goals and policies.
‘‘(4) Only if a concurrent resolution on the
budget reported by the Committee on the Budget of
the House sets forth the economic goals (as de-
scribed in sections 3(a)(2) and (4)(b) of the Full
Employment Act of 1946) which the estimates,
amounts, and levels (as described in section 301(a))
set forth in such resolution are designed to achieve,
shall it be in order to offer to such resolution an
amendment relating to such goals, and such amend-
ment shall be in order only if it also proposes to
alter such estimates, amounts, and levels in germane
fashion in order to be consistent with the goals pro-
posed in such amendment.
‘‘(5) Consideration of any concurrent resolution
on the budget by the House of Representatives shall
be in the Committee of the Whole, and the resolu-
tion shall be considered for amendment under the
five-minute rule in accordance with the applicable
provisions of rule XXIII of the Rules of the House
1569
of Representatives. After the Committee rises and fi-
nally reports the resolution back to the House, the
previous question shall be considered as ordered on
the resolution and any amendments thereto to final
passage without intervening motion; except that it
shall be in order at any time prior to final passage
(notwithstanding any other rule or provision of law)
to consider an amendment (or a series of amend-
ments) changing any figure or figures in the resolu-
tion as so reported to the extent necessary solely to
achieve mathematical consistency. The concurrent
resolution is not divisible in the House or in the
Committee of the Whole. A motion to recommit the
concurrent resolution is not in order, and it is not
in order to move to reconsider the vote by which the
concurrent resolution is agreed to or disagreed to.
‘‘(6) Debate in the House of Representatives on
a conference report on a concurrent resolution on
the budget shall be limited to not more than 5
hours, which shall be divided equally between the
majority and minority parties. A motion further to
limit debate is not debatable. A motion to recommit
the conference report is not in order, and it is not
in order to move to reconsider the vote by which the
conference report is agreed to or disagreed to.
1570
‘‘(7) Appeals from decisions of the Chair relat-
ing to the application of the Rules of the House of
Representatives to the procedure relating to any con-
current resolution on the budget shall be decided
without debate.
‘‘(b) PROCEDURE IN SENATE AFTER REPORT OF
COMMITTEE; DEBATE; AMENDMENTS.—
‘‘(1) Debate in the Senate on any concurrent
resolution on the budget, and all amendments there-
to and debatable motions and appeals in connection
therewith, shall be limited to not more than 50
hours, except that with respect to any concurrent
resolution referred to in section 304(a) all such de-
bate shall be limited to not more than 15 hours. The
time shall be equally divided between, and controlled
by, the majority leader and the minority leader or
their designees.
‘‘(2) Debate in the Senate on any amendment
to a concurrent resolution on the budget shall be
limited to 2 hours, to be equally divided between,
and controlled by, the mover and the manager of the
concurrent resolution, and debate on any amend-
ment to an amendment, debatable motion, or appeal
shall be limited to 1 hour, to be equally divided be-
tween, and controlled by, the mover and the man-
1571
ager of the concurrent resolution, except that in the
event the manager of the concurrent resolution is in
favor of any such amendment, motion, or appeal, the
time in opposition thereto shall be controlled by the
minority leader or his designee. No amendment that
is not germane to the provisions of such concurrent
resolution shall be received. Such leaders, or either
of them, may, from the time under their control on
the passage of the concurrent resolution, allot addi-
tional time to any Senator during the consideration
of any amendment, debatable motion, or appeal.
‘‘(3) Following the presentation of opening
statements on the concurrent resolution on the
budget for a fiscal year by the chairman and rank-
ing minority member of the Committee on the Budg-
et of the Senate, there shall be a period of up to
four hours for debate on economic goals and policies.
‘‘(4) Subject to the other limitations of this Act,
only if a concurrent resolution on the budget re-
ported by the Committee on the Budget of the Sen-
ate sets forth the economic goals (as described in
sections 3(a)(2) and 4(b) of the Employment Act of
1946) which the estimates, amounts, and levels (as
described in section 301(a)) set forth in such resolu-
tion are designed to achieve, shall it be in order to
1573
‘‘(c) ACTION
ON CONFERENCE REPORTS
IN
THE
SENATE.—
‘‘(1) A motion to proceed to the consideration
of the conference report on any concurrent resolu-
tion on the budget (or a reconciliation bill or resolu-
tion) may be made even though a previous motion
to the same effect has been disagreed to.
‘‘(2) During the consideration in the Senate of
the conference report (or a message between
Houses) on any concurrent resolution on the budget,
and all amendments in disagreement, and all amend-
ments thereto, and debatable motions and appeals in
connection therewith, debate shall be limited to 10
hours, to be equally divided between, and controlled
by, the majority leader and minority leader or their
designees. Debate on any debatable motion or appeal
related to the conference report (or a message be-
tween Houses) shall be limited to 1 hour, to be
equally divided between, and controlled by, the
mover and the manager of the conference report (or
a message between Houses).
‘‘(3) Should the conference report be defeated,
debate on any request for a new conference and the
appointment of conferees shall be limited to 1 hour,
to be equally divided between, and controlled by, the
1574
manager of the conference report and the minority
leader or his designee, and should any motion be
made to instruct the conferees before the conferees
are named, debate on such motion shall be limited
to one-half hour, to be equally divided between, and
controlled by, the mover and the manager of the
conference report. Debate on any amendment to any
such instructions shall be limited to 20 minutes, to
be equally divided between and controlled by the
mover and the manager of the conference report. In
all cases when the manager of the conference report
is in favor of any motion, appeal, or amendment, the
time in opposition shall be under the control of the
minority leader or his designee.
‘‘(4) In any case in which there are amend-
ments in disagreement, time on each amendment
shall be limited to 30 minutes, to be equally divided
between, and controlled by, the manager of the con-
ference report and the minority leader or his des-
ignee. No amendment that is not germane to the
provisions of such amendments shall be received.
‘‘(d) CONCURRENT RESOLUTION MUST BE CONSIST-
ENT IN THE SENATE.—It shall not be in order in the Sen-
ate to vote on the question of agreeing to—
1575
‘‘(1) a concurrent resolution on the budget un-
less the figures then contained in such resolution are
mathematically consistent; or
‘‘(2) a conference report on a concurrent resolu-
tion on the budget unless the figures contained in
such resolution, as recommended in such conference
report, are mathematically consistent.
‘‘SEC. 306. LEGISLATION DEALING WITH CONGRESSIONAL
BUDGET MUST BE HANDLED BY BUDGET
COMMITTEES.
‘‘No bill, resolution, amendment, motion, or con-
ference report dealing with any matter which is within the
jurisdiction of the Committee on the Budget of either
House shall be considered in that House unless it is a bill
or resolution which has been reported by the Committee
on the Budget of that House (or from the consideration
of which such committee has been discharged) or unless
it is an amendment to such a bill or resolution.
‘‘SEC. 307. HOUSE COMMITTEE ACTION ON ALL APPROPRIA-
TION BILLS TO BE COMPLETED BY JUNE 10.
‘‘On or before June 10 of each year, the Committee
on Appropriations of the House of Representatives shall
report annual appropriation bills providing new budget au-
thority under the jurisdiction of all of its subcommittees
for the fiscal year which begins on October 1 of that year.
1576
‘‘SEC. 308. REPORTS, SUMMARIES, AND PROJECTIONS OF
CONGRESSIONAL BUDGET ACTIONS.
‘‘(a) REPORTS ON LEGISLATION PROVIDING NEW
BUDGET AUTHORITY OR PROVIDING AN INCREASE OR
DECREASE IN REVENUES OR TAX EXPENDITURES.—
‘‘(1) Whenever a committee of either House re-
ports to its House a bill or joint resolution providing
new budget authority (other than continuing appro-
priations) or providing an increase or decrease in
revenues or tax expenditures for a fiscal year (or fis-
cal years), the report accompanying that bill or joint
resolution shall contain—
‘‘(A) a cost statement comparing the levels
in such measure as recommended by that com-
mittee to the appropriate allocations and sub-
divisions submitted under subsections (a) and
(b) of section 302 or the appropriate allocation
pursuant to section 311(a) for the most re-
cently agreed to concurrent resolution on the
budget; or
‘‘(B) the Congressional Budget Office cost
estimate required in section 202(f)(5), if timely
submitted before such report is filed.
‘‘(2) Whenever a conference report is filed in ei-
ther House and such conference report or any
amendment reported in disagreement or any motion
1577
printed in the joint statement of managers to dis-
pose of such amendment on such bill or resolution
provides new budget authority (other than continu-
ing appropriations) or provides an increase or de-
crease in revenues for a fiscal year (or fiscal years),
the statement of managers accompanying such con-
ference report shall contain the information required
by paragraph (1), if available on a timely basis. If
such information is not available when the con-
ference report is filed, the committee shall make
such information available to Members as soon as
practicable.
‘‘(b) UP-TO-DATE
TABULATIONS
OF
CONGRES-
SIONAL BUDGET ACTION.—
‘‘(1) The Director of the Congressional Budget
Office shall issue to the committees of the House of
Representatives and the Senate reports on at least
a monthly basis detailing and tabulating the
progress of congressional action on bills and resolu-
tions providing new budget authority or providing an
increase or decrease in revenues or tax expenditures
for each fiscal year covered by a concurrent resolu-
tion on the budget. Such reports shall include but
are not limited to an up-to-date tabulation compar-
ing the appropriate aggregate and functional levels
1578
(including outlays) included in the most recently
adopted concurrent resolution on the budget with
the levels provided in bills and resolutions reported
by committees or adopted by either House or by the
Congress, and with the levels provided by law for the
fiscal year preceding the first fiscal year covered by
the appropriate concurrent resolution.
‘‘(2) The Committee on the Budget of each
House shall make available to Members of its House
summary 
budget 
scorekeeping 
reports. 
Such
reports—
‘‘(A) shall be made available on at least a
monthly basis, but in any case frequently
enough to provide Members of each House an
accurate representation of the current status of
congressional consideration of revenue and
spending measures;
‘‘(B) shall include, but are not limited to
summaries of tabulations provided under sub-
section (b)(1); and
‘‘(C) shall be based on information pro-
vided under subsection (b)(1) without sub-
stantive revision.
The chairman of the Committee on the Budget of
the House of Representatives shall submit such re-
1579
ports to the Speaker and such reports shall be print-
ed in the Congressional Record.
‘‘SEC. 309. HOUSE APPROVAL OF REGULAR APPROPRIA-
TION BILLS.
‘‘In order that all annual appropriation bills may be
considered and approved by the House of Representatives
by June 30, bills authorizing budget authority contained
in those appropriation bills should be reported to the
House of Representatives by May 15.
‘‘SEC. 310. RECONCILIATION.
‘‘(a) INCLUSION OF RECONCILIATION DIRECTIVES IN
CONCURRENT RESOLUTIONS ON THE BUDGET.—A con-
current resolution on the budget for any fiscal year, to
the extent necessary to effectuate the provisions and re-
quirements of such resolution, shall—
‘‘(1) specify the total amount by which direct
spending contained in laws within the jurisdiction of
a committee is to be increased or decreased and di-
rect that committee to determine and recommend
changes to accomplish a change of such total
amount;
‘‘(2) specify the total amount by which revenues
are to be increased or decreased and direct that the
committees having jurisdiction to determine and rec-
1580
ommend changes in the revenue laws to accomplish
a change of such total amount;
‘‘(3) specify the amounts by which the statutory
limit on the public debt is to be increased or de-
creased and direct the committee having jurisdiction
to recommend such change; or
‘‘(4) specify and direct any combination of the
matters described in paragraphs (1), (2), and (3)
(including a direction to achieve deficit reduction).
‘‘(b) LEGISLATIVE PROCEDURE.—If a concurrent
resolution containing directives to one or more committees
to determine and recommend changes in laws is agreed
to in accordance with subsection (a) and—
‘‘(1) only one committee of the House or the
Senate is directed to determine and recommend
changes, that committee shall promptly make such
determination and recommendations and report to
its House reconciliation measure containing such
recommendations; or
‘‘(2) more than one committee of the House or
the Senate is directed to determine and recommend
changes, each such committee so directed shall
promptly 
make 
such 
determination 
and 
rec-
ommendations and submit such recommendations to
the Committee on the Budget of its House, which
1581
upon receiving all such recommendations, shall re-
port to its House a reconciliation measure carrying
out all such recommendations without any sub-
stantive revision.
‘‘(c) AMENDMENTS TO RECONCILIATION BILLS.—
‘‘(1) It shall not be in order in the House of
Representatives to consider any amendment to a rec-
onciliation bill if such amendment would have the ef-
fect of increasing direct spending above the level of
such direct spending provided in the bill (for the fis-
cal years covered by the reconciliation instructions
set forth in the most recently agreed to concurrent
resolution on the budget), or would have the effect
of reducing any specific Federal revenues below the
level of such revenues provided in the bill (for such
fiscal years), unless such amendment makes at least
an equivalent reduction in other direct spending, an
equivalent increase in other specific Federal reve-
nues, or an equivalent combination thereof (for such
fiscal years). A motion to strike a provision provid-
ing new budget authority may be in order.
‘‘(2) It shall not be in order in the Senate to
consider any amendment to a reconciliation bill if
such amendment would have the effect of decreasing
any direct spending reductions below the level of
1582
such direct spending reductions provided (for the fis-
cal years covered) in the reconciliation instructions
which relate to such bill set forth in a resolution
providing for reconciliation, or would have the effect
of reducing Federal revenue increases below the level
of such revenue increases provided (for such fiscal
years) in such instructions relating to such bill, un-
less such amendment makes a reduction in other di-
rect spending, an increase in other specific Federal
revenues, or a combination thereof (for such fiscal
years) at least equivalent to any increase in direct
spending or decrease in revenues provided by such
amendment, except that a motion to strike a provi-
sion shall always be in order.
‘‘(3) Paragraphs (1) and (2) shall not apply if
a declaration of war by the Congress is in effect.
‘‘(4) For purposes of this section, the levels of
direct spending and Federal revenues for a fiscal
year shall be determined on the basis of estimates
made by the Committee on the Budget of either
House, as the case may be.
‘‘(5) If a committee or committees of the House
fail to meet its directive in recommended changes it
has submitted to its Committee on the Budget pur-
suant to its instruction, the Committee on Rules of
1583
the House of Representatives may recommend that
the House make in order amendments to achieve
changes specified by reconciliation directives con-
tained in a concurrent resolution on the budget.
‘‘(d) PROCEDURE IN THE SENATE.—
‘‘(1) Except as provided in paragraph (2), the
provisions of section 305 for the consideration in the
Senate of concurrent resolutions on the budget and
conference reports thereon shall also apply to the
consideration in the Senate of reconciliation bills re-
ported under subsection (b) and conference reports
thereon.
‘‘(2) Debate in the Senate on any reconciliation
bill reported under subsection (b), and all amend-
ments thereto and debatable motions and appeals in
connection therewith, shall be limited to not more
than 20 hours.
‘‘(e) LIMITATION ON CHANGES TO THE SOCIAL SE-
CURITY ACT.—Notwithstanding any other provision of
law, it shall not be in order in the Senate or the House
of Representatives to consider any reconciliation bill re-
ported pursuant to a concurrent resolution on the budget
agreed to under section 301 or 304, or any amendment
thereto or conference report thereon, that contains rec-
ommendations to reduce benefits under the old-age, survi-
1584
vors, and disability insurance program established under
title II of the Social Security Act.
‘‘SEC. 311. DIRECT SPENDING AND REVENUE LEGISLATION
MUST BE WITHIN APPROPRIATE LEVELS.
‘‘(a) COMMITTEE ALLOCATIONS.—The joint explana-
tory statement accompanying a conference report on a
budget resolution shall include an allocation, consistent
with the resolution recommended in the conference report,
of the appropriate deficit impact number (or surplus im-
pact number) for the budget year and a total for all fiscal
years covered by that resolution for each committee of
each House of Congress, except for the Committees on Ap-
propriations. Any item assumed in an allocation to one
committee may not be assumed in an allocation to another
committee of the same House.
‘‘(b) DISPLAY ALLOCATIONS.—The joint explanatory
statement accompanying a conference report on a budget
resolution may include an allocation for display purposes
only, consistent with the resolution recommended in the
conference report, of the total amount of direct spending
and revenue under existing law within the jurisdiction of
each committee.
‘‘(c) LEGISLATION SUBJECT TO POINT OF ORDER.—
‘‘(1) It shall not be in order in the House of
Representatives or the Senate to consider any bill or
1585
joint resolution or amendment increasing the deficit
(or lowering the surplus) in any fiscal year covered
by the most recently agreed to concurrent resolution
on the budget, or any motion or conference report
on any such bill or joint resolution, if it would
produce a higher deficit (or lower surplus) than an
appropriate impact number allocated pursuant to
subsection (a).
‘‘(2) A bill, joint resolution, amendment, or con-
ference report shall be considered to exceed an ap-
propriate impact number only if—
‘‘(A) the enactment of such bill or resolu-
tion in the form it will be considered as original
text for purposes of amendment;
‘‘(B) the amendment is not an amendment
considered as original text for purposes of
amendment and the adoption of such amend-
ment and enactment of the bill or joint resolu-
tion as so amended; or
‘‘(C) the enactment of such bill or resolu-
tion in the form recommended in such con-
ference report,
would cause an appropriate impact number allocated pur-
suant to subsection (a) to be exceeded.
1586
‘‘(d) DETERMINATIONS BY BUDGET COMMITTEES.—
For purposes of this section, impact numbers shall be de-
termined on the basis of estimates made by the Committee
on the Budget of either House, as the case may be.
‘‘SEC. 312. EFFECTS OF POINTS OF ORDER.
‘‘(a) POINTS OF ORDER IN THE SENATE AGAINST
AMENDMENTS BETWEEN THE HOUSES.—Each provision
of this Act that establishes a point of order against an
amendment 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
amendment between the Houses, and the Presiding Officer
sustains the point of order, the effect shall be the same
as if the Senate had disagreed to the amendment.
‘‘(b) 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 jurisdic-
tion for further consideration.
‘‘SEC. 313. EXTRANEOUS MATTER IN RECONCILIATION LEG-
ISLATION.
‘‘(a) IN GENERAL.—When the Senate is considering
a reconciliation bill or a reconciliation resolution pursuant
to section 310 (whether that bill or resolution originated
in the Senate or the House) or section 258C of the Bal-
1587
anced Budget and Emergency Deficit Control Act of 1985,
upon a point of order being made by any Senator against
material extraneous to the instructions to a committee
which is contained in any title or provision of the bill or
resolution or offered as an amendment to the bill or reso-
lution, and the point of order is sustained by the Chair,
any part of said title or provision that contains material
extraneous to the instructions to said Committee as de-
fined in subsection (b) shall be deemed stricken from the
bill and may not be offered as an amendment from the
floor.
‘‘(b) EXTRANEOUS PROVISIONS.—
‘‘(1)(A) Except as provided in paragraph (2), a
provision of a reconciliation bill or reconciliation res-
olution considered pursuant to section 310 shall be
considered extraneous if such provision does not
produce a change in outlays or revenue, including
changes in outlays and revenues brought about by
changes in the terms and conditions under which
outlays are made or revenues are required to be col-
lected (but a provision in which outlay decreases or
revenue increases exactly offset outlay increases or
revenue decreases shall not be considered extraneous
by virtue of this subparagraph); (B) any provision
producing an increase in outlays or decrease in reve-
1588
nues shall be considered extraneous if the net effect
of provisions reported by the Committee reporting
the title containing the provision is that the Commit-
tee fails to achieve its reconciliation instructions; (C)
a provision that is not in the jurisdiction of the
Committee with jurisdiction over said title or provi-
sion shall be considered extraneous; (D) a provision
shall be considered extraneous if it produces changes
in outlays or revenues which are merely incidental to
the non-budgetary components of the provision; (E)
a provision shall be considered to be extraneous if it
increases, or would increase, net outlays, or if it de-
creases, or would decrease, revenues during a fiscal
year after the fiscal years covered by such reconcili-
ation bill or reconciliation resolution, and such in-
creases or decreases are greater than outlay reduc-
tions or revenue increases resulting from other pro-
visions in such title in such year; and (F) a provi-
sion shall be considered extraneous if it violates sec-
tion 310(e).
‘‘(2) A Senate-originated provision shall not be
considered extraneous under paragraph (1)(A) if the
Chairman and Ranking Minority Member of the
Committee on the Budget and the Chairman and
Ranking Minority Member of the Committee which
1589
reported the provision certify that: (A) the provision
mitigates direct effects clearly attributable to a pro-
vision changing outlays or revenue and both provi-
sions together produce a net reduction in the deficit;
(B) the provision will result in a substantial reduc-
tion in outlays or a substantial increase in revenues
during fiscal years after the fiscal years covered by
the reconciliation bill or reconciliation resolution; (C)
a reduction of outlays or an increase in revenues is
likely to occur as a result of the provision, in the
event of new regulations authorized by the provision
or likely to be proposed, court rulings on pending
litigation, or relationships between economic indices
and stipulated statutory triggers pertaining to the
provision, other than the regulations, court rulings
or relationships currently projected by the Congres-
sional Budget Office for scorekeeping purposes; or
(D) such provision will be likely to produce a signifi-
cant reduction in outlays or increase in revenues
but, due to insufficient data, such reduction or in-
crease cannot be reliably estimated.
‘‘(3) A provision reported by a committee shall
not be considered extraneous under paragraph
(1)(C) if (A) the provision is an integral part of a
provision or title, which if introduced as a bill or res-
1590
olution would be referred to such committee, and the
provision sets forth the procedure to carry out or
implement the substantive provisions that were re-
ported and which fall within the jurisdiction of such
committee; or (B) the provision states an exception
to, or a special application of, the general provision
or title of which it is a part and such general provi-
sion or title if introduced as a bill or resolution
would be referred to such committee.
‘‘(c) EXTRANEOUS MATERIALS.—Upon the reporting
or discharge of a reconciliation bill or resolution pursuant
to section 310 in the Senate, and again upon the submis-
sion of a conference report on such a reconciliation bill
or resolution, the Committee on the Budget of the Senate
shall submit for the record a list of material considered
to be extraneous under subsections (b)(1)(A), (b)(1)(B),
and (b)(1)(E) of this section to the instructions of a com-
mittee as provided in this section. The inclusion or exclu-
sion of a provision shall not constitute a determination of
extraneousness by the Presiding Officer of the Senate.
‘‘(d) CONSIDERATION OF CONFERENCE REPORTS.—
When the Senate is considering a conference report on,
or an amendment between the Houses in relation to, a
reconciliation bill or reconciliation resolution pursuant to
section 310, upon—
1591
‘‘(1) a point of order being made by any Sen-
ator against extraneous material meeting the defini-
tion of subsections (b)(1)(A), (b)(1)(B), (b)(1)(D),
(b)(1)(E), or (b)(1)(F), and
‘‘(2) such point of order being sustained,
such material contained in such conference report or
amendment shall be deemed stricken, and the Senate shall
proceed, without intervening action or motion, to consider
the question of whether the Senate shall recede from its
amendment and concur with a further amendment, or con-
cur in the House amendment with a further amendment,
as the case may be, which further amendment shall consist
of only that portion of the conference report or House
amendment, as the case may be, not so stricken. Any such
motion in the Senate shall be debatable for two hours. In
any case in which such point of order is sustained against
a conference report (or Senate amendment derived from
such conference report by operation of this subsection),
no further amendment shall be in order.
‘‘(e) GENERAL POINT OF ORDER.—Notwithstanding
any other law or rule of the Senate, it shall be in order
for a Senator to raise a single point of order that several
provisions of a bill, resolution, amendment, motion, or con-
ference report violate this section. The Presiding Officer
may sustain the point of order as to some or all of the
1592
provisions against which the Senator raised the point of
order. If the Presiding Officer so sustains the point of
order as to some of the provisions (including provisions
of an amendment, motion, or conference report) against
which the Senator raised the point of order, then only
those provisions (including provisions of an amendment,
motion, or conference report) against which the Presiding
Officer sustains the point of order shall be deemed strick-
en pursuant to this section. Before the Presiding Officer
rules on such a point of order, any Senator may move to
waive such a point of order as it applies to some or all
of the provisions against which the point of order was
raised. Such a motion to waive is amendable in accordance
with the rules and precedents of the Senate. After the Pre-
siding Officer rules on such a point of order, any Senator
may appeal the ruling of the Presiding Officer on such
a point of order as it applies to some or all of the provi-
sions on which the Presiding Officer ruled.
‘‘(f) DETERMINATION OF LEVELS.—For purposes of
this section, the levels of new budget authority, budget
outlays, new entitlement authority, and revenues for a fis-
cal year shall be determined on the basis of estimates
made by the Committee on the Budget of the Senate.’’.
1593
SEC. 15204. CONTROL OF BACKDOOR SPENDING.
Title IV of the Congressional Budget Act of 1974 is
amended to read as follows:
‘‘TITLE IV—CONTROL OF
BACKDOOR SPENDING
‘‘SEC. 401. BILLS PROVIDING NEW SPENDING AUTHORITY.
‘‘(a) 
CONTROLS
ON
LEGISLATION
PROVIDING
SPENDING AUTHORITY.—
‘‘(1) 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 which provides contract or borrowing author-
ity, unless that bill, resolution, conference report, or
amendment also provides that such contract or bor-
rowing authority is to be effective for any fiscal year
only to such extent or in such amounts as are pro-
vided in advance in appropriation Acts.
‘‘(2) A bill, joint resolution, amendment, or con-
ference report shall be considered to violate para-
graph (1) only if—
‘‘(A) the enactment of such bill or resolu-
tion in the form it will be considered as original
text for purposes of amendment;
‘‘(B) the amendment is not an amendment
considered as original text for purposes of
amendment and the adoption of such amend-
1594
ment and enactment of the bill or joint resolu-
tion as so amended; or
‘‘(C) the enactment of such bill or resolu-
tion in the form recommended in such con-
ference report;
would cause such a violation.
‘‘(b) EXCEPTIONS.—
‘‘(1) Subsection (a) shall not apply to contract
or borrowing authority if that authority is derived—
‘‘(A) from a trust fund established by the
Social Security Act (as in effect on the date of
the enactment of this Act); or
‘‘(B) from any other trust fund, 90 percent
or more of the noninterest receipts of which
consist or will consist of amounts (transferred
from the general fund of the Treasury) equiva-
lent to amounts of taxes (related to the pur-
poses for which such outlays are or will be
made) received in the Treasury under specified
provisions of the Internal Revenue Code of
1954.
‘‘(2) Subsection (a) shall not apply to contract
or borrowing authority to the extent that—
‘‘(A) the outlays resulting therefrom are
made by an organization which is (i) a mixed-
1595
ownership Government corporation (as defined
in section 201 of the Government Corporation
Control Act), or (ii) a wholly owned Govern-
ment corporation (as defined in section 101 of
such Act) which is specifically exempted by law
from compliance with any or all of the provi-
sions of that Act, as of the date of enactment
of the Budget Enforcement Act of 1993; or
‘‘(B) the outlays resulting therefrom con-
sist exclusively of the proceeds of gifts or be-
quests made to the United States for a specific
purpose.
‘‘SEC. 402. LEGISLATION PROVIDING NEW CREDIT AUTHOR-
ITY.
‘‘(a) POINT OF ORDER.—It shall not be in order in
the House of Representatives or the Senate to consider
any bill, joint resolution, amendment, motion, or con-
ference report which provides new credit authority, unless
that bill, resolution, conference report, or amendment also
provides that such new credit authority is to be effective
for any fiscal year only to such extent or in such amounts
as are provided in appropriation Acts in accordance with
section 504.
1596
‘‘(b) 
APPLICABILITY.—A 
bill, 
joint 
resolution,
amendment, or conference report shall be considered to
violate subsection (a) only if—
‘‘(1) the enactment of such bill or resolution in
the form it will be considered as original text for
purposes of amendment;
‘‘(2) the amendment is not an amendment con-
sidered as original text for purposes of amendment
and the adoption of such amendment and enactment
of the bill or joint resolution as so amended; or
‘‘(3) the enactment of such bill or resolution in
the form recommended in such conference report;
would cause such a violation.
‘‘SEC. 403. OFF-BUDGET AGENCIES, PROGRAMS, AND AC-
TIVITIES.
‘‘(a) Notwithstanding any other provision of law,
budget authority, credit authority, and estimates of out-
lays and receipts for activities of the Federal budget which
are off-budget immediately prior to the date of enactment
of the Balanced Budget and Emergency Deficit Control
Act of 1985, not including activities of the Federal Old-
Age and Survivors Insurance and Federal Disability In-
surance Trust Funds and the United States Postal Serv-
ice, shall be included in a budget submitted pursuant to
section 1105 of title 31, United States Code, and in a con-
1597
current resolution on the budget reported pursuant to sec-
tion 301 or section 304 of this Act and shall be considered,
for purposes of this Act, budget authority, outlays, and
spending authority in accordance with definitions set forth
in this Act.
‘‘(b) All receipts and disbursements of the Federal
Financing Bank with respect to any obligations which are
issued, sold, or guaranteed by a Federal agency shall be
treated as a means of financing such agency for purposes
of section 1105 of title 31, United States Code, and for
purposes of this Act.
‘‘(c) Notwithstanding any other provision of law, re-
ceipts and disbursements of the Hospital Insurance Trust
Fund shall be included in all calculations required by this
Act.’’.
SEC. 15205. TITLE V OF THE CONGRESSIONAL BUDGET ACT
OF 1974.
(a) SECTION 502.—Section 502 of the Congressional
Budget Act of 1974 is amended—
(1) in paragraph (5)(A), by inserting ‘‘or a
modification thereof’’ after ‘‘loan guarantee’’;
(2) in paragraph (5)(B), by striking ‘‘recover-
ies.’’ and inserting the following: ‘‘recoveries, and
routine work-outs of troubled loans or loans in immi-
nent danger of default when those work-outs are to