H. R. 2491—679
regard to section 2503(b)), and is not shown on such return,
any tax imposed by chapter 12 on such gift may be assessed,
or a proceeding in court for the collection of such tax may
be begun without assessment, at any time. The preceding sen-
tence shall not apply to any item which is disclosed in such
return, or in a statement attached to the return, in a manner
adequate to apprise the Secretary of the nature of such item.
The value of any item which is so disclosed may not be redeter-
mined by the Secretary after the expiration of the period under
subsection (a).’’
(c) DECLARATORY JUDGMENT PROCEDURE
FOR DETERMINING
VALUE OF GIFT.—
(1) IN GENERAL.—Part IV of subchapter C of chapter 76
is amended by inserting after section 7476 the following new
section:
‘‘SEC. 7477. DECLARATORY JUDGMENTS RELATING TO VALUE OF CER-
TAIN GIFTS.
‘‘(a) CREATION OF REMEDY.—In a case of an actual controversy
involving a determination by the Secretary of the value of any
gift shown on the return of tax imposed by chapter 12 or disclosed
on such return or in any statement attached to such return, upon
the filing of an appropriate pleading, the Tax Court may make
a declaration of the value of such gift. Any such declaration shall
have the force and effect of a decision of the Tax Court and shall
be reviewable as such.
‘‘(b) LIMITATIONS.—
‘‘(1) PETITIONER.—A pleading may be filed under this sec-
tion only by the donor.
‘‘(2) EXHAUSTION OF ADMINISTRATIVE REMEDIES.—The court
shall not issue a declaratory judgment or decree under this
section in any proceeding unless it determines that the peti-
tioner has exhausted all available administrative remedies
within the Internal Revenue Service.
‘‘(3) TIME FOR BRINGING ACTION.—If the Secretary sends
by certified or registered mail notice of his determination as
described in subsection (a) to the petitioner, no proceeding
may be initiated under this section unless the pleading is
filed before the 91st day after the date of such mailing.’’
(2) CLERICAL AMENDMENT.—The table of sections for such
part IV is amended by inserting after the item relating to
section 7476 the following new item:
‘‘Sec. 7477. Declaratory judgments relating to value of certain gifts.’’
(d) CONFORMING AMENDMENT.—Subsection (c) of section 2504
is amended by striking ‘‘, and if a tax under this chapter or under
corresponding provisions of prior laws has been assessed or paid
for such preceding calendar period’’.
(e) EFFECTIVE DATES.—
(1) IN GENERAL.—The amendments made by subsections
(a) and (c) shall apply to gifts made after the date of the
enactment of this Act.
(2) SUBSECTION (b).—The amendment made by subsection
(b) shall apply to gifts made in calendar years ending after
the date of the enactment of this Act.
H. R. 2491—680
SEC. 11617. CLARIFICATIONS RELATING TO DISCLAIMERS.
(a) PARTIAL TRANSFER-TYPE DISCLAIMERS PERMITTED.—Para-
graph (3) of section 2518(c) (relating to certain transfers treated
as disclaimers) is amended by inserting ‘‘(or an undivided portion
of such interest)’’ after ‘‘entire interest in the property’’.
(b) RETENTION OF INTEREST BY DECEDENT’S SPOUSE PERMITTED
IN TRANSFER-TYPE DISCLAIMERS.—Paragraph (3) of section 2518(c)
is amended by adding at the end the following new flush sentence:
‘‘For purposes of the preceding sentence, a written transfer
by the spouse of the decedent of property to a trust shall
not fail to be treated as a transfer of such spouse’s interest
in such property by reason of such spouse having an interest
in such trust.’’
(c) DISCLAIMERS ARE EFFECTIVE FOR INCOME TAX PURPOSES.—
Subsection (a) of section 2518 is amended by inserting ‘‘and subtitle
A’’ after ‘‘this subtitle’’ each place it appears.
(d) EFFECTIVE DATE.—The amendments made by this section
shall apply to transfers creating an interest in the person disclaim-
ing, and disclaimers, made after the date of the enactment of
this Act.
SEC. 11618. CLARIFICATION OF TREATMENT OF SURVIVOR ANNUITIES
UNDER QUALIFIED TERMINABLE INTEREST RULES.
(a) IN GENERAL.—Subparagraph (C) of section 2056(b)(7) is
amended by inserting ‘‘(or, in the case of an interest in an annuity
arising under the community property laws of a State, included
in the gross estate of the decedent under section 2033)’’ after
‘‘section 2039’’.
(b) EFFECTIVE DATE.—The amendment made by this section
shall apply to estates of decedents dying after the date of the
enactment of this Act.
SEC. 11619. TREATMENT UNDER QUALIFIED DOMESTIC TRUST RULES
OF FORMS OF OWNERSHIP WHICH ARE NOT TRUSTS.
(a) IN GENERAL.—Subsection (c) of section 2056A (defining
qualified domestic trust) is amended by adding at the end the
following new paragraph:
‘‘(3) TRUST.—To the extent provided in regulations pre-
scribed by the Secretary, the term ‘trust’ includes other arrange-
ments which have substantially the same effect as a trust.’’
(b) EFFECTIVE DATE.—The amendment made by this section
shall apply to estates of decedents dying after the date of the
enactment of this Act.
Subchapter C—Generation-Skipping Tax Provisions
SEC. 11631. TAXABLE TERMINATION NOT TO INCLUDE DIRECT SKIPS.
(a) IN GENERAL.—Paragraph (1) of section 2612(a) (defining
taxable termination) is amended by adding at the end the following
new flush sentence:
‘‘Such term shall not include a direct skip.’’
(b) EFFECTIVE DATE.—The amendment made by subsection (a)
shall apply to generation-skipping transfers (as defined in section
2611 of the Internal Revenue Code of 1986) after the date of
the enactment of this Act.
H. R. 2491—681
CHAPTER 7—EXCISE TAX SIMPLIFICATION
Subchapter A—Provisions Related to Distilled Spirits,
Wines, and Beer
SEC. 11641. CREDIT OR REFUND FOR IMPORTED BOTTLED DISTILLED
SPIRITS RETURNED TO DISTILLED SPIRITS PLANT.
(a) IN GENERAL.—Paragraph (1) of section 5008(c) (relating
to distilled spirits returned to bonded premises) is amended by
striking ‘‘withdrawn from bonded premises on payment or deter-
mination of tax’’ and inserting ‘‘on which tax has been determined
or paid’’.
(b) EFFECTIVE DATE.—The amendment made by subsection (a)
shall take effect at the beginning of the first calendar quarter
beginning more than 180 days after the date of the enactment
of this Act.
SEC. 11642. FERMENTED MATERIAL FROM ANY BREWERY MAY BE
RECEIVED AT A DISTILLED SPIRITS PLANT.
(a) IN GENERAL.—Paragraph (2) of section 5222(b) (relating
to production, receipt, removal, and use of distilling materials)
is amended to read as follows:
‘‘(2) beer conveyed without payment of tax from brewery
premises, beer which has been lawfully removed from brewery
premises upon determination of tax, or’’.
(b) CLARIFICATION OF AUTHORITY TO PERMIT REMOVAL OF BEER
WITHOUT PAYMENT OF TAX FOR USE AS DISTILLING MATERIAL.—
Section 5053 (relating to exemptions) is amended by redesignating
subsection (f) as subsection (i) and by inserting after subsection
(e) the following new subsection:
‘‘(f) REMOVAL FOR USE AS DISTILLING MATERIAL.—Subject to
such regulations as the Secretary may prescribe, beer may be
removed from a brewery without payment of tax to any distilled
spirits plant for use as distilling material.’’
(c) CLARIFICATION OF REFUND AND CREDIT OF TAX.—Section
5056 (relating to refund and credit of tax, or relief from liability)
is amended—
(1) by redesignating subsection (c) as subsection (d) and
by inserting after subsection (b) the following new subsection:
‘‘(c) BEER RECEIVED AT A DISTILLED SPIRITS PLANT.—Any tax
paid by any brewer on beer produced in the United States may
be refunded or credited to the brewer, without interest, or if the
tax has not been paid, the brewer may be relieved of liability
therefor, under regulations as the Secretary may prescribe, if such
beer is received on the bonded premises of a distilled spirits plant
pursuant to the provisions of section 5222(b)(2), for use in the
production of distilled spirits.’’, and
(2) by striking ‘‘or rendering unmerchantable’’ in subsection
(d) 
(as 
so 
redesignated) 
and 
inserting 
‘‘rendering
unmerchantable, or receipt on the bonded premises of a distilled
spirits plant’’.
(d) EFFECTIVE DATE.—The amendments made by this section
shall take effect at the beginning of the first calendar quarter
beginning more than 180 days after the date of the enactment
of this Act.
H. R. 2491—682
SEC. 11643. REFUND OF TAX ON WINE RETURNED TO BOND NOT LIM-
ITED TO UNMERCHANTABLE WINE.
(a) IN GENERAL.—Subsection (a) of section 5044 (relating to
refund of tax on unmerchantable wine) is amended by striking
‘‘as unmerchantable’’.
(b) CONFORMING AMENDMENTS.—
(1) Section 5361 is amended by striking ‘‘unmerchantable’’.
(2) The section heading for section 5044 is amended by
striking ‘‘UNMERCHANTABLE’’.
(3) The item relating to section 5044 in the table of sections
for subpart C of part I of subchapter A of chapter 51 is amended
by striking ‘‘unmerchantable’’.
(c) EFFECTIVE DATE.—The amendments made by this section
shall take effect at the beginning of the first calendar quarter
beginning more than 180 days after the date of the enactment
of this Act.
SEC. 11644. BEER MAY BE WITHDRAWN FREE OF TAX FOR DESTRUC-
TION.
(a) IN GENERAL.—Section 5053 is amended by inserting after
subsection (g) the following new subsection:
‘‘(h) REMOVALS FOR DESTRUCTION.—Subject to such regulations
as the Secretary may prescribe, beer may be removed from the
brewery without payment of tax for destruction.’’
(b) EFFECTIVE DATE.—The amendment made by subsection (a)
shall take effect at the beginning of the first calendar quarter
beginning more than 180 days after the date of the enactment
of this Act.
SEC. 11645. TRANSFER TO BREWERY OF BEER IMPORTED IN BULK
WITHOUT PAYMENT OF TAX.
(a) IN GENERAL.—Part II of subchapter G of chapter 51 is
amended by adding at the end the following new section:
‘‘SEC. 5418. BEER IMPORTED IN BULK.
‘‘Beer imported or brought into the United States in bulk
containers may, under such regulations as the Secretary may pre-
scribe, be withdrawn from customs custody and transferred in such
bulk containers to the premises of a brewery without payment
of the internal revenue tax imposed on such beer. The proprietor
of a brewery to which such beer is transferred shall become liable
for the tax on the beer withdrawn from customs custody under
this section upon release of the beer from customs custody, and
the importer, or the person bringing such beer into the United
States, shall thereupon be relieved of the liability for such tax.’’
(b) CLERICAL AMENDMENT.—The table of sections for such part
II is amended by adding at the end the following new item:
‘‘Sec. 5418. Beer imported in bulk.’’
(c) EFFECTIVE DATE.—The amendments made by this section
shall take effect at the beginning of the first calendar quarter
beginning more than 180 days after the date of the enactment
of this Act.
H. R. 2491—683
Subchapter B—Consolidation of Taxes on Aviation Gasoline
SEC. 11651. CONSOLIDATION OF TAXES ON AVIATION GASOLINE.
(a) IN GENERAL.—Subparagraph (A) of section 4081(a)(2) (relat-
ing to imposition of tax on gasoline and diesel fuel) is amended
by redesignating clause (ii) as clause (iii) and by striking clause
(i) and inserting the following:
‘‘(i) in the case of gasoline other than aviation
gasoline, 18.3 cents per gallon,
‘‘(ii) in the case of aviation gasoline, 19.3 cents
per gallon, and’’.
(b) TERMINATION.—Subsection (d) of section 4081 is amended
by redesignating paragraph (2) as paragraph (3) and by inserting
after paragraph (1) the following new paragraph:
‘‘(2) AVIATION GASOLINE.—On and after January 1, 1996,
the rate specified in subsection (a)(2)(A)(ii) shall be 4.3 cents
per gallon.’’
(c) REPEAL OF RETAIL LEVEL TAX.—
(1) Subsection (c) of section 4041 is amended by striking
paragraphs (2) and (3) and by redesignating paragraphs (4)
and (5) as paragraphs (2) and (3), respectively.
(2) Paragraph (3) of section 4041(c), as redesignated by
paragraph (1), is amended by striking ‘‘paragraphs (1) and
(2)’’ and inserting ‘‘paragraph (1)’’.
(d) CONFORMING AMENDMENTS.—
(1) Paragraph (1) of section 4041(k) is amended by adding
‘‘and’’ at the end of subparagraph (A), by striking ‘‘, and’’
at the end of subparagraph (B) and inserting a period, and
by striking subparagraph (C).
(2) Paragraph (1) of section 4081(d) is amended by striking
‘‘each rate of tax specified in subsection (a)(2)(A)’’ and inserting
‘‘the rates of tax specified in clauses (i) and (iii) of subsection
(a)(2)(A)’’.
(3) Sections 6421(f)(2)(A) and 9502(f)(1)(A) are each
amended by striking ‘‘section 4041(c)(4)’’ and inserting ‘‘section
4041(c)(2)’’.
(4) Paragraph (2) of section 9502(b) is amended by striking
‘‘14 cents’’ and inserting ‘‘15 cents’’.
(e) EFFECTIVE DATE.—The amendments made by this section
shall take effect on January 1, 1996.
(f) FLOOR STOCKS TAX.—
(1) IMPOSITION OF TAX.—In the case of aviation gasoline
on which tax was imposed under section 4081 of the Internal
Revenue Code of 1986 before January 1, 1996, and which
is held on such date by any person, there is hereby imposed
a floor stocks tax of 1 cent per gallon of such gasoline.
(2) LIABILITY FOR TAX AND METHOD OF PAYMENT.—
(A) LIABILITY
FOR
TAX.—A person holding aviation
gasoline on January 1, 1996, to which the tax imposed
by paragraph (1) applies shall be liable for such tax.
(B) METHOD OF PAYMENT.—The tax imposed by para-
graph (1) shall be paid in such manner as the Secretary
shall prescribe.
(C) TIME FOR PAYMENT.—The tax imposed by para-
graph (1) shall be paid on or before June 30, 1996.
(3) DEFINITIONS.—For purposes of this subsection:
H. R. 2491—684
(A) HELD BY A PERSON.—Gasoline shall be considered
as ‘‘held by a person’’ if title thereto has passed to such
person (whether or not delivery to the person has been
made).
(B) SECRETARY.—The term ‘‘Secretary’’ means the Sec-
retary of the Treasury or his delegate.
(4) EXCEPTION
FOR
EXEMPT
USES.—The tax imposed by
paragraph (1) shall not apply to gasoline held by any person
exclusively for any use to the extent a credit or refund of
the tax imposed by section 4081 of such Code is allowable
for such use.
(5) EXCEPTION FOR FUEL HELD IN AIRCRAFT TANK.—No tax
shall be imposed by paragraph (1) on aviation gasoline held
in the tank of an aircraft.
(6) EXCEPTION FOR CERTAIN AMOUNTS OF FUEL.—
(A) IN GENERAL.—No tax shall be imposed by para-
graph (1) on aviation gasoline held on January 1, 1996,
by any person if the aggregate amount of aviation gasoline
held by such person on such date does not exceed 6,000
gallons. The preceding sentence shall apply only if such
person submits to the Secretary (at the time and in the
manner required by the Secretary) such information as
the Secretary shall require for purposes of this paragraph.
(B) EXEMPT FUEL.—For purposes of subparagraph (A),
there shall not be taken into account fuel held by any
person which is exempt from the tax imposed by paragraph
(1) by reason of paragraph (4) or (5).
(C) CONTROLLED GROUPS.—
(i) CORPORATIONS.—In the case of a controlled
group, the 6,000 gallon amount in subparagraph (A)
shall be apportioned among the component members
of such group in such manner as the Secretary shall
by regulations prescribe. For purposes of the preceding
sentence, the term ‘‘controlled group’’ has the meaning
given to such term by subsection (a) of section 1563
of such Code; except that for such purposes the phrase
‘‘more than 50 percent’’ shall be substituted for the
phrase ‘‘at least 80 percent’’ each place it appears
in such subsection.
(ii) NONINCORPORATED
PERSONS
UNDER
COMMON
CONTROL.—Under regulations prescribed by the Sec-
retary, principles similar to the principles of clause
(i) shall apply to a group under common control where
1 or more of the members is not a corporation.
(7) OTHER LAWS APPLICABLE.—All provisions of law, includ-
ing penalties, applicable with respect to the taxes imposed
by section 4081 of such Code shall, insofar as applicable and
not inconsistent with the provisions of this subsection, apply
with respect to the floor stock taxes imposed by paragraph
(1) to the same extent as if such taxes were imposed by such
section 4081.
H. R. 2491—685
Subchapter C—Other Excise Tax Provisions
SEC. 11661. CERTAIN COMBINATIONS NOT TREATED AS MANUFACTURE
UNDER RETAIL SALES TAX ON HEAVY TRUCKS.
(a) IN GENERAL.—Paragraph (2) of section 4052(c) (relating
to certain combinations not treated as manufacture) is amended
by striking ‘‘or wood or metal floor’’ and inserting ‘‘wood or metal
floor, or a power take-off and dump body’’.
(b) REMOVAL
OF FIFTH WHEEL.—Paragraph (1) of section
4052(c) is amended by inserting before the period ‘‘or the removal
of any coupling device (including any fifth wheel)’’.
(c) EFFECTIVE DATE.—The amendments made by this section
shall take effect on the date of the enactment of this Act.
CHAPTER 8—ADMINISTRATIVE PROVISION
SEC. 11671. CERTAIN NOTICES DISREGARDED UNDER PROVISION
INCREASING INTEREST RATE ON LARGE CORPORATE
UNDERPAYMENTS.
(a) GENERAL RULE.—Subparagraph (B) of section 6621(c)(2)
(defining applicable date) is amended by adding at the end the
following new clause:
‘‘(iii) EXCEPTION FOR LETTERS OR NOTICES INVOLV-
ING SMALL AMOUNTS.—For purposes of this paragraph,
any letter or notice shall be disregarded if the amount
of the deficiency or proposed deficiency (or the assess-
ment or proposed assessment) set forth in such letter
or notice is not greater than $100,000 (determined
by not taking into account any interest, penalties, or
additions to tax).’’
(b) EFFECTIVE DATE.—The amendment made by subsection (a)
shall apply for purposes of determining interest for periods after
December 31, 1995.
Subtitle K—Miscellaneous Provisions
SEC. 11701. TREATMENT OF STORAGE OF PRODUCT SAMPLES.
(a) IN GENERAL.—Paragraph (2) of section 280A(c) is amended
by striking ‘‘inventory’’ and inserting ‘‘inventory or product sam-
ples’’.
(b) EFFECTIVE DATE.—The amendment made by subsection (a)
shall apply to taxable years beginning after December 31, 1995.
SEC. 11702. ADJUSTMENT OF DEATH BENEFIT LIMITS FOR CERTAIN
POLICIES.
(a) IN GENERAL.—Subparagraph (C)(i) of section 7702(e)(2)
(relating to limited increases in death benefit permitted) is amended
by striking ‘‘$5,000’’ and inserting ‘‘$7,000’’ and by striking
‘‘$25,000’’ and inserting ‘‘$30,000’’.
(b) INFLATION ADJUSTMENTS.—Section 7702(e) (relating to com-
putational rules) is amended by adding at the end the following
new paragraph:
‘‘(3) INFLATION ADJUSTMENT TO DEATH BENEFIT LIMITS FOR
YEARS AFTER 1996.—In the case of any taxable year beginning
in a calendar year after 1996, each dollar amount contained
H. R. 2491—686
in paragraph (2)(C)(i) shall be increased by an amount equal
to—
‘‘(A) such dollar amount, multiplied by
‘‘(B) the cost-of-living adjustment determined under
section 1(f)(3), for the calendar year in which the taxable
year begins, by substituting ‘calendar year 1995’ for ‘cal-
endar year 1992’ in subparagraph (B) thereof.’’.
(c) CONFORMING AMENDMENT.—Section 72(e)(10)(B) is amended
by striking ‘‘$25,000’’ and inserting ‘‘$30,000 (adjusted at the same
time and in the same manner as under section 7702(e)(3))’’.
(d) EFFECTIVE DATE.—The amendments made by this section
shall apply to contracts entered into after December 31, 1995.
SEC. 11703. ORGANIZATIONS SUBJECT TO SECTION 833.
(a) IN GENERAL.—Section 833(c) (relating to organization to
which section applies) is amended by adding at the end the following
new paragraph:
‘‘(4) TREATMENT AS EXISTING BLUE CROSS OR BLUE SHIELD
ORGANIZATION.—
‘‘(A) IN GENERAL.—Paragraph (2) shall be applied to
an organization described in subparagraph (B) as if it were
a Blue Cross or Blue Shield organization.
‘‘(B) APPLICABLE
ORGANIZATION.—An organization is
described in this subparagraph if it—
‘‘(i) is organized under, and governed by, State
laws which are specifically and exclusively applicable
to not-for-profit health insurance or health service type
organizations, and
‘‘(ii) is not a Blue Cross or Blue Shield organization
or health maintenance organization.’’.
(b) EFFECTIVE DATE.—The amendment made by this section
shall apply to taxable years ending after October 13, 1995.
SEC. 11704. CORRECTION OF INFLATION ADJUSTMENT IN LUXURY
EXCISE TAX ON AUTOMOBILES.
(a) IN GENERAL.—Subsection (e) of section 4001 (relating to
inflation adjustment) is amended to read as follows:
‘‘(e) INFLATION ADJUSTMENT.—
‘‘(1) IN GENERAL.—The $30,000 amount in subsection (a)
and section 4003(a) shall be increased by an amount equal
to—
‘‘(A) $30,000, multiplied by
‘‘(B) the cost-of-living adjustment under section 1(f)(3)
for the calendar year in which the vehicle is sold, deter-
mined by substituting ‘calendar year 1990’ for ‘calendar
year 1992’ in subparagraph (B) thereof.
‘‘(2) ROUNDING.—If any amount as adjusted under para-
graph (1) is not a multiple of $2,000, such amount shall be
rounded to the next lowest multiple of $2,000.’’
(b) EFFECTIVE DATE.—The amendment made by subsection (a)
shall take effect on the date of the enactment of this Act.
SEC. 11705. EXTENSION AND PHASEDOWN OF LUXURY PASSENGER
AUTOMOBILE TAX.
(a) EXTENSION.—Subsection (f) of section 4001 is amended by
striking ‘‘1999’’ and inserting ‘‘2002’’.
(b) PHASEDOWN.—Section 4001 is amended by redesignating
subsection (f) (as amended by subsection (a) of this section) as
H. R. 2491—687
subsection (g) and by inserting after subsection (e) the following
new subsection:
‘‘(f) PHASEDOWN.—For sales occurring in a calendar year after
1995 and before 2003, subsection (a) shall be applied by substituting
for ‘10 percent’ the percentage determined in accordance with the
following table:
‘‘If the calendar year is:
The percentage is:
1996 ..................................................................................................... 9 percent
1997 ..................................................................................................... 8 percent
1998 ..................................................................................................... 7 percent
1999 ..................................................................................................... 6 percent
2000 ..................................................................................................... 5 percent
2001 ..................................................................................................... 4 percent
2002 ..................................................................................................... 3 percent.’’
(c) EFFECTIVE DATE.—The amendments made by this section
shall take effect on January 1, 1996.
Subtitle K—Miscellaneous
SEC. 13101. FOOD STAMP ELIGIBILITY.
Section 6(f) of the Food Stamp Act of 1977 (7 U.S.C. 2015(f))
is amended by striking the third sentence and inserting the follow-
ing: ‘‘The State agency shall, at its option, consider either all income
and financial resources of the individual rendered ineligible to
participate in the food stamp program under this subsection, or
such income, less a pro rata share, and the financial resources
of the ineligible individual, to determine the eligibility and the
value of the allotment of the household of which such individual
is a member.’’.
SEC. 13102. REDUCTION IN BLOCK GRANTS FOR SOCIAL SERVICES.
Section 2003(c) of the Social Security Act (42 U.S.C. 1397b)
is amended—
(1) by striking ‘‘and’’ at the end of paragraph (4); and
(2) by striking paragraph (5) and inserting the following:
‘‘(5) $2,800,000,000 for each of the fiscal years 1990 through
1996; and
‘‘(6) $2,240,000,000 for each fiscal year after fiscal year
1996.’’.
Subtitle L—Generalized System of
Preferences
SEC. 11801. SHORT TITLE.
This subtitle may be cited as the ‘‘GSP Renewal Act of 1995’’.
SEC. 11802. GENERALIZED SYSTEM OF PREFERENCES.
(a) IN GENERAL.—Title V of the Trade Act of 1974 is amended
to read as follows:
H. R. 2491—688
‘‘TITLE V—GENERALIZED SYSTEM OF
PREFERENCES
‘‘SEC. 501. AUTHORITY TO EXTEND PREFERENCES.
‘‘The President may provide duty-free treatment for any eligible
article from any beneficiary developing country in accordance with
the provisions of this title. In taking any such action, the President
shall have due regard for—
‘‘(1) the effect such action will have on furthering the
economic development of developing countries through the
expansion of their exports;
‘‘(2) the extent to which other major developed countries
are undertaking a comparable effort to assist developing coun-
tries by granting generalized preferences with respect to
imports of products of such countries;
‘‘(3) the anticipated impact of such action on United States
producers of like or directly competitive products; and
‘‘(4) the extent of the beneficiary developing country’s
competitiveness with respect to eligible articles.
‘‘SEC. 502. DESIGNATION OF BENEFICIARY DEVELOPING COUNTRIES.
‘‘(a) AUTHORITY TO DESIGNATE COUNTRIES.—
‘‘(1) BENEFICIARY DEVELOPING COUNTRIES.—The President
is authorized to designate countries as beneficiary developing
countries for purposes of this title.
‘‘(2) LEAST-DEVELOPED
BENEFICIARY
DEVELOPING
COUN-
TRIES.—The President is authorized to designate any bene-
ficiary developing country as a least-developed beneficiary
developing country for purposes of this title, based on the
considerations in section 501 and subsection (c) of this section.
‘‘(b) COUNTRIES INELIGIBLE FOR DESIGNATION.—
‘‘(1) SPECIFIC COUNTRIES.—The following countries may not
be designated as beneficiary developing countries for purposes
of this title:
‘‘(A) Australia.
‘‘(B) Canada.
‘‘(C) European Union member states.
‘‘(D) Iceland.
‘‘(E) Japan.
‘‘(F) Monaco.
‘‘(G) New Zealand.
‘‘(H) Norway.
‘‘(I) Switzerland.
‘‘(2) OTHER BASES FOR INELIGIBILITY.—The President shall
not designate any country a beneficiary developing country
under this title if any of the following applies:
‘‘(A) Such country is a Communist country, unless—
‘‘(i) the products of such country receive non-
discriminatory treatment,
‘‘(ii) such country is a WTO Member (as such term
is defined in section 2(10) of the Uruguay Round Agree-
ments Act) (19 U.S.C. 3501(10)) and a member of the
International Monetary Fund, and
‘‘(iii) such country is not dominated or controlled
by international communism.
H. R. 2491—689
‘‘(B) Such country is a party to an arrangement of
countries and participates in any action pursuant to such
arrangement, the effect of which is—
‘‘(i) to withhold supplies of vital commodity
resources from international trade or to raise the price
of such commodities to an unreasonable level, and
‘‘(ii) to cause serious disruption of the world econ-
omy.
‘‘(C) Such country affords preferential treatment to
the products of a developed country, other than the United
States, which has, or is likely to have, a significant adverse
effect on United States commerce.
‘‘(D)(i) Such country—
‘‘(I) has nationalized, expropriated, or otherwise
seized ownership or control of property, including pat-
ents, trademarks, or copyrights, owned by a United
States citizen or by a corporation, partnership, or
association which is 50 percent or more beneficially
owned by United States citizens,
‘‘(II) has taken steps to repudiate or nullify an
existing contract or agreement with a United States
citizen or a corporation, partnership, or association
which is 50 percent or more beneficially owned by
United States citizens, the effect of which is to
nationalize, expropriate, or otherwise seize ownership
or control of property, including patents, trademarks,
or copyrights, so owned, or
‘‘(III) has imposed or enforced taxes or other exac-
tions, restrictive maintenance or operational condi-
tions, or other measures with respect to property,
including patents, trademarks, or copyrights, so owned,
the effect of which is to nationalize, expropriate, or
otherwise seize ownership or control of such property,
unless clause (ii) applies.
‘‘(ii) This clause applies if the President determines
that—
‘‘(I) prompt, adequate, and effective compensation
has been or is being made to the citizen, corporation,
partnership, or association referred to in clause (i),
‘‘(II) good faith negotiations to provide prompt,
adequate, and effective compensation under the
applicable provisions of international law are in
progress, or the country described in clause (i) is other-
wise taking steps to discharge its obligations under
international law with respect to such citizen, corpora-
tion, partnership, or association, or
‘‘(III) a dispute involving such citizen, corporation,
partnership, or association over compensation for such
a seizure has been submitted to arbitration under the
provisions of the Convention for the Settlement of
Investment Disputes, or in another mutually agreed
upon forum,
and the President promptly furnishes a copy of such deter-
mination to the Senate and House of Representatives.
‘‘(E) Such country fails to act in good faith in recogniz-
ing as binding or in enforcing arbitral awards in favor
of United States citizens or a corporation, partnership,
H. R. 2491—690
or association which is 50 percent or more beneficially
owned by United States citizens, which have been made
by arbitrators appointed for each case or by permanent
arbitral bodies to which the parties involved have submit-
ted their dispute.
‘‘(F) Such country aids or abets, by granting sanctuary
from prosecution to, any individual or group which has
committed an act of international terrorism.
‘‘(G) Such country has not taken or is not taking steps
to afford internationally recognized worker rights to work-
ers in the country (including any designated zone in that
country).
Subparagraphs (D), (E), (F), and (G) shall not prevent the
designation of any country as a beneficiary developing country
under this title if the President determines that such designa-
tion will be in the national economic interest of the United
States and reports such determination to the Congress with
the reasons therefor.
‘‘(c) FACTORS AFFECTING COUNTRY DESIGNATION.—In determin-
ing whether to designate any country as a beneficiary developing
country under this title, the President shall take into account—
‘‘(1) an expression by such country of its desire to be so
designated;
‘‘(2) the level of economic development of such country,
including its per capita gross national product, the living stand-
ards of its inhabitants, and any other economic factors which
the President deems appropriate;
‘‘(3) whether or not other major developed countries are
extending generalized preferential tariff treatment to such
country;
‘‘(4) the extent to which such country has assured the
United States that it will provide equitable and reasonable
access to the markets and basic commodity resources of such
country and the extent to which such country has assured
the United States that it will refrain from engaging in
unreasonable export practices;
‘‘(5) the extent to which such country is providing adequate
and effective protection of intellectual property rights;
‘‘(6) the extent to which such country has taken action
to—
‘‘(A) reduce trade distorting investment practices and
policies (including export performance requirements); and
‘‘(B) reduce or eliminate barriers to trade in services;
and
‘‘(7) whether or not such country has taken or is taking
steps to afford to workers in that country (including any des-
ignated zone in that country) internationally recognized worker
rights.
‘‘(d) WITHDRAWAL, SUSPENSION, OR LIMITATION
OF COUNTRY
DESIGNATION.—
‘‘(1) IN GENERAL.—The President may withdraw, suspend,
or limit the application of the duty-free treatment accorded
under this title with respect to any country. In taking any
action under this subsection, the President shall consider the
factors set forth in section 501 and subsection (c) of this section.
‘‘(2) CHANGED CIRCUMSTANCES.—The President shall, after
complying with the requirements of subsection (f)(2), withdraw
H. R. 2491—691
or suspend the designation of any country as a beneficiary
developing country if, after such designation, the President
determines that as the result of changed circumstances such
country would be barred from designation as a beneficiary
developing country under subsection (b)(2). Such country shall
cease to be a beneficiary developing country on the day on
which the President issues an Executive order or Presidential
proclamation revoking the designation of such country under
this title.
‘‘(3) ADVICE TO CONGRESS.—The President shall, as nec-
essary, advise the Congress on the application of section 501
and subsection (c) of this section, and the actions the President
has taken to withdraw, to suspend, or to limit the application
of duty-free treatment with respect to any country which has
failed to adequately take the actions described in subsection
(c).
‘‘(e) MANDATORY GRADUATION
OF BENEFICIARY DEVELOPING
COUNTRIES.—If the President determines that a beneficiary develop-
ing country has become a ‘high income’ country, as defined by
the official statistics of the International Bank for Reconstruction
and Development, then the President shall terminate the designa-
tion of such country as a beneficiary developing country for purposes
of this title, effective on January 1 of the second year following
the year in which such determination is made.
‘‘(f) CONGRESSIONAL NOTIFICATION.—
‘‘(1) NOTIFICATION OF DESIGNATION.—
‘‘(A) IN GENERAL.—Before the President designates any
country as a beneficiary developing country under this
title, the President shall notify the Congress of the Presi-
dent’s intention to make such designation, together with
the considerations entering into such decision.
‘‘(B) DESIGNATION
AS
LEAST-DEVELOPED
BENEFICIARY
DEVELOPING COUNTRY.—At least 60 days before the Presi-
dent designates any country as a least-developed bene-
ficiary developing country, the President shall notify the
Congress of the President’s intention to make such designa-
tion.
‘‘(2) NOTIFICATION OF TERMINATION.—If the President has
designated any country as a beneficiary developing country
under this title, the President shall not terminate such designa-
tion unless, at least 60 days before such termination, the Presi-
dent has notified the Congress and has notified such country
of the President’s intention to terminate such designation,
together with the considerations entering into such decision.
‘‘SEC. 503. DESIGNATION OF ELIGIBLE ARTICLES.
‘‘(a) ELIGIBLE ARTICLES.—
‘‘(1) DESIGNATION.—
‘‘(A) IN GENERAL.—Except as provided in subsection
(b), the President is authorized to designate articles as
eligible articles from all beneficiary developing countries
for purposes of this title by Executive order or Presidential
proclamation after receiving the advice of the International
Trade Commission in accordance with subsection (e).
‘‘(B) LEAST-DEVELOPED BENEFICIARY DEVELOPING COUN-
TRIES.—Except for articles described in subparagraphs (A),
(B), and (E) of subsection (b)(1) and articles described in
H. R. 2491—692
paragraphs (2) and (3) of subsection (b), the President
may, in carrying out section 502(d)(1) and subsection (c)(1)
of this section, designate articles as eligible articles only
for countries designated as least-developed beneficiary
developing countries under section 502(a)(2) if, after receiv-
ing the advice of the International Trade Commission in
accordance with subsection (e) of this section, the President
determines that such articles are not import-sensitive in
the context of imports from least-developed beneficiary
developing countries.
‘‘(C) THREE-YEAR RULE.—If, after receiving the advice
of the International Trade Commission under subsection
(e), an article has been formally considered for designation
as an eligible article under this title and denied such
designation, such article may not be reconsidered for such
designation for a period of 3 years after such denial.
‘‘(2) RULE OF ORIGIN.—
‘‘(A) GENERAL RULE.—The duty-free treatment provided
under this title shall apply to any eligible article which
is the growth, product, or manufacture of a beneficiary
developing country if—
‘‘(i) that article is imported directly from a bene-
ficiary developing country into the customs territory
of the United States; and
‘‘(ii) the sum of—
‘‘(I) the cost or value of the materials produced
in the beneficiary developing country or any two
or more such countries that are members of the
same association of countries and are treated as
one country under section 507(2), plus
‘‘(II) the direct costs of processing operations
performed in such beneficiary developing country
or such member countries,
is not less than 35 percent of the appraised value
of such article at the time it is entered.
‘‘(B) EXCLUSIONS.—An article shall not be treated as
the growth, product, or manufacture of a beneficiary devel-
oping country by virtue of having merely undergone—
‘‘(i) simple combining or packaging operations, or
‘‘(ii) mere dilution with water or mere dilution
with another substance that does not materially alter
the characteristics of the article.
‘‘(3) REGULATIONS.—The Secretary of the Treasury, after
consulting with the United States Trade Representative, shall
prescribe such regulations as may be necessary to carry out
paragraph (2), including, but not limited to, regulations provid-
ing that, in order to be eligible for duty-free treatment under
this title, an article—
‘‘(A) must be wholly the growth, product, or manufac-
ture of a beneficiary developing country, or
‘‘(B) must be a new or different article of commerce
which has been grown, produced, or manufactured in the
beneficiary developing country.
‘‘(b) ARTICLES THAT MAY NOT BE DESIGNATED AS ELIGIBLE
ARTICLES.—
‘‘(1) IMPORT SENSITIVE ARTICLES.—The President may not
designate any article as an eligible article under subsection
H. R. 2491—693
(a) if such article is within one of the following categories
of import-sensitive articles:
‘‘(A) Textile and apparel articles which were not eligible
articles for purposes of this title on January 1, 1994, as
this title was in effect on such date.
‘‘(B) Watches, except those watches entered after June
30, 1989, that the President specifically determines, after
public notice and comment, will not cause material injury
to watch or watch band, strap, or bracelet manufacturing
and assembly operations in the United States or the United
States insular possessions.
‘‘(C) Import-sensitive electronic articles.
‘‘(D) Import-sensitive steel articles.
‘‘(E) Footwear, handbags, luggage, flat goods, work
gloves, and leather wearing apparel which were not eligible
articles for purposes of this title on January 1, 1995, as
this title was in effect on such date.
‘‘(F) Import-sensitive semimanufactured and manufac-
tured glass products.
‘‘(G) Any other articles which the President determines
to be import-sensitive in the context of the Generalized
System of Preferences.
‘‘(2) ARTICLES AGAINST WHICH OTHER ACTIONS TAKEN.—An
article shall not be an eligible article for purposes of this
title for any period during which such article is the subject
of any action proclaimed pursuant to section 203 of this Act
(19 U.S.C. 2253) or section 232 or 351 of the Trade Expansion
Act of 1962 (19 U.S.C. 1862, 1981).
‘‘(3) AGRICULTURAL PRODUCTS.—No quantity of an agricul-
tural product subject to a tariff-rate quota that exceeds the
in-quota quantity shall be eligible for duty-free treatment under
this title.
‘‘(c) WITHDRAWAL, SUSPENSION, OR LIMITATION OF DUTY-FREE
TREATMENT; COMPETITIVE NEED LIMITATION.—
‘‘(1) IN GENERAL.—The President may withdraw, suspend,
or limit the application of the duty-free treatment accorded
under this title with respect to any article, except that no
rate of duty may be established with respect to any article
pursuant to this subsection other than the rate which would
apply but for this title. In taking any action under this sub-
section, the President shall consider the factors set forth in
sections 501 and 502(c).
‘‘(2) COMPETITIVE NEED LIMITATION.—
‘‘(A) BASIS
FOR
WITHDRAWAL
OF
DUTY-FREE
TREAT-
MENT.—
‘‘(i) IN
GENERAL.—Except as provided in clause
(ii) and subject to subsection (d), whenever the Presi-
dent determines that a beneficiary developing country
has exported (directly or indirectly) to the United
States during any calendar year beginning after
December 31, 1995—
‘‘(I) a quantity of an eligible article having
an appraised value in excess of the applicable
amount for the calendar year, or
‘‘(II) a quantity of an eligible article equal
to or exceeding 50 percent of the appraised value
H. R. 2491—695
on whether any industry in the United States is likely
to be adversely affected by such waiver,
‘‘(B) determines, based on the considerations described
in sections 501 and 502(c) and the advice described in
subparagraph (A), that such waiver is in the national eco-
nomic interest of the United States, and
‘‘(C) publishes the determination described in subpara-
graph (B) in the Federal Register.
‘‘(2) CONSIDERATIONS BY THE PRESIDENT.—In making any
determination under paragraph (1), the President shall give
great weight to—
‘‘(A) the extent to which the beneficiary developing
country has assured the United States that such country
will provide equitable and reasonable access to the markets
and basic commodity resources of such country, and
‘‘(B) the extent to which such country provides ade-
quate and effective protection of intellectual property
rights.
‘‘(3) OTHER BASES FOR WAIVER.—The President may waive
the application of subsection (c)(2) if, before July 1 of the
calendar year beginning after the calendar year for which a
determination described in subsection (c)(2) was made with
respect to a beneficiary developing country, the President deter-
mines that—
‘‘(A) there has been a historical preferential trade rela-
tionship between the United States and such country,
‘‘(B) there is a treaty or trade agreement in force
covering economic relations between such country and the
United States, and
‘‘(C) such country does not discriminate against, or
impose unjustifiable or unreasonable barriers to, United
States commerce,
and the President publishes that determination in the Federal
Register.
‘‘(4) LIMITATIONS ON WAIVERS.—
‘‘(A) IN GENERAL.—The President may not exercise the
waiver authority under this subsection with respect to a
quantity of an eligible article entered during any calendar
year beginning after 1995, the aggregate appraised value
of which equals or exceeds 30 percent of the aggregate
appraised value of all articles that entered duty-free under
this title during the preceding calendar year.
‘‘(B) OTHER WAIVER LIMITS.—The President may not
exercise the waiver authority provided under this sub-
section with respect to a quantity of an eligible article
entered during any calendar year beginning after 1995,
the aggregate appraised value of which exceeds 15 percent
of the aggregate appraised value of all articles that have
entered duty-free under this title during the preceding
calendar year from those beneficiary developing countries
which for the preceding calendar year—
‘‘(i) had a per capita gross national product (cal-
culated on the basis of the best available information,
including 
that 
of 
the 
International 
Bank 
for
Reconstruction and Development) of $5,000 or more;
or
H. R. 2491—696
‘‘(ii) had exported (either directly or indirectly) to
the United States a quantity of articles that was duty-
free under this title that had an aggregate appraised
value of more than 10 percent of the aggregate
appraised value of all articles that entered duty-free
under this title during that year.
‘‘(C) CALCULATION
OF
LIMITATIONS.—There shall be
counted against the limitations imposed under subpara-
graphs (A) and (B) for any calendar year only that value
of any eligible article of any country that—
‘‘(i) entered duty-free under this title during such
calendar year; and
‘‘(ii) is in excess of the value of that article that
would have been so entered during such calendar year
if the limitations under subsection (c)(2)(A) applied.
‘‘(5) EFFECTIVE PERIOD OF WAIVER.—Any waiver granted
under this subsection shall remain in effect until the President
determines that such waiver is no longer warranted due to
changed circumstances.
‘‘(e) INTERNATIONAL TRADE COMMISSION ADVICE.—Before des-
ignating articles as eligible articles under subsection (a)(1), the
President shall publish and furnish the International Trade
Commission with lists of articles which may be considered for
designation as eligible articles for purposes of this title. The provi-
sions of sections 131, 132, 133, and 134 shall be complied with
as though action under section 501 and this section were action
under section 123 to carry out a trade agreement entered into
under section 123.
‘‘(f) SPECIAL RULE CONCERNING PUERTO RICO.—No action under
this title may affect any tariff duty imposed by the Legislature
of Puerto Rico pursuant to section 319 of the Tariff Act of 1930
on coffee imported into Puerto Rico.
‘‘SEC. 504. REVIEW AND REPORTS TO CONGRESS.
‘‘The President shall submit an annual report to the Congress
on the status of internationally recognized worker rights within
each beneficiary developing country.
‘‘SEC. 505. DATE OF TERMINATION.
‘‘No duty-free treatment provided under this title shall remain
in effect after December 31, 1996.
‘‘SEC. 506. AGRICULTURAL EXPORTS OF BENEFICIARY DEVELOPING
COUNTRIES.
‘‘The appropriate agencies of the United States shall assist
beneficiary developing countries to develop and implement meas-
ures designed to assure that the agricultural sectors of their econo-
mies are not directed to export markets to the detriment of the
production of foodstuffs for their citizenry.
‘‘SEC. 507. DEFINITIONS.
‘‘For purposes of this title:
‘‘(1) BENEFICIARY DEVELOPING COUNTRY.—The term ‘bene-
ficiary developing country’ means any country with respect
to which there is in effect an Executive order or Presidential
proclamation by the President designating such country as
a beneficiary developing country for purposes of this title.
H. R. 2491—697
‘‘(2) COUNTRY.—The term ‘country’ means any foreign coun-
try or territory, including any overseas dependent territory
or possession of a foreign country, or the Trust Territory of
the Pacific Islands. In the case of an association of countries
which is a free trade area or customs union, or which is contrib-
uting to comprehensive regional economic integration among
its members through appropriate means, including, but not
limited to, the reduction of duties, the President may by Execu-
tive order or Presidential proclamation provide that all mem-
bers of such association other than members which are barred
from designation under section 502(b) shall be treated as one
country for purposes of this title.
‘‘(3) ENTERED.—The term ‘entered’ means entered, or with-
drawn from warehouse for consumption, in the customs terri-
tory of the United States.
‘‘(4) INTERNATIONALLY RECOGNIZED WORKER RIGHTS.—The
term ‘internationally recognized worker rights’ includes—
‘‘(A) the right of association;
‘‘(B) the right to organize and bargain collectively;
‘‘(C) a prohibition on the use of any form of forced
or compulsory labor;
‘‘(D) a minimum age for the employment of children;
and
‘‘(E) acceptable conditions of work with respect to mini-
mum wages, hours of work, and occupational safety and
health.
‘‘(5) LEAST-DEVELOPED
BENEFICIARY
DEVELOPING
COUN-
TRY.—The term ‘least-developed beneficiary developing country’
means a beneficiary developing country that is designated as
a least-developed beneficiary developing country under section
502(a)(2).’’.
(b) TABLE OF CONTENTS.—The items relating to title V in the
table of contents of the Trade Act of 1974 are amended to read
as follows:
‘‘TITLE V—GENERALIZED SYSTEM OF PREFERENCES
‘‘Sec. 501. Authority to extend preferences.
‘‘Sec. 502. Designation of beneficiary developing countries.
‘‘Sec. 503. Designation of eligible articles.
‘‘Sec. 504. Review and reports to Congress.
‘‘Sec. 505. Date of termination.
‘‘Sec. 506. Agricultural exports of beneficiary developing countries.
‘‘Sec. 507. Definitions.’’.
SEC. 11803. RETROACTIVE APPLICATION FOR CERTAIN LIQUIDATIONS
AND RELIQUIDATIONS.
(a) IN GENERAL.—Notwithstanding section 514 of the Tariff
Act of 1930 or any other provision of law and subject to subsection
(b), the entry—
(1) of any article to which duty-free treatment under title
V of the Trade Act of 1974 would have applied if the entry
had been made on July 31, 1995, and
(2) that was made after July 31, 1995, and before the
date of the enactment of this Act,
shall be liquidated or reliquidated as free of duty, and the Secretary
of the Treasury shall refund any duty paid with respect to such
entry. As used in this subsection, the term ‘‘entry’’ includes a
withdrawal from warehouse for consumption.
(b) REQUESTS.—Liquidation or reliquidation may be made under
subsection (a) with respect to an entry only if a request therefor
H. R. 2491—698
is filed with the Customs Service, within 180 days after the date
of the enactment of this Act, that contains sufficient information
to enable the Customs Service—
(1) to locate the entry; or
(2) to reconstruct the entry if it cannot be located.
SEC. 11804. CONFORMING AMENDMENTS.
(a) TRADE LAWS.—
(1) Section 1211(b) of the Omnibus Trade and Competitive-
ness Act of 1988 (19 U.S.C. 3011(b)) is amended—
(A) in paragraph (1), by striking ‘‘(19 U.S.C. 2463(a),
2464(c)(3))’’ and inserting ‘‘(as in effect on July 31, 1995)’’;
and
(B) in paragraph (2), by striking ‘‘(19 U.S.C. 2464(c)(1))’’
and inserting the following: ‘‘(as in effect on July 31, 1995)’’.
(2) Section 203(c)(7) of the Andean Trade Preference Act
(19 U.S.C. 3202(c)(7)) is amended by striking ‘‘502(a)(4)’’ and
inserting ‘‘507(4)’’.
(3) Section 212(b)(7) of the Caribbean Basin Economic
Recovery Act (19 U.S.C. 2702(b)(7)) is amended by striking
‘‘502(a)(4)’’ and inserting ‘‘507(4)’’.
(4) General note 3(a)(iv)(C) of the Harmonized Tariff Sched-
ule of the United States is amended by striking ‘‘sections 503(b)
and 504(c)’’ and inserting ‘‘subsections (a), (c), and (d) of section
503’’.
(5) Section 201(a)(2) of the North American Free Trade
Agreement Implementation Act (19 U.S.C. 3331(a)(2)) is
amended by striking ‘‘502(a)(2) of the Trade Act of 1974 (19
U.S.C. 2462(a)(2))’’ and inserting ‘‘502(f)(2) of the Trade Act
of 1974’’.
(6) Section 131 of the Uruguay Round Agreements Act
(19 U.S.C. 3551) is amended in subsections (a) and (b)(1) by
striking ‘‘502(a)(4)’’ and inserting ‘‘507(4)’’.
(b) OTHER LAWS.—
(1) Section 871(f)(2)(B) of the Internal Revenue Code of
1986 is amended by striking ‘‘within the meaning of section
502’’ and inserting ‘‘under title V’’.
(2) Section 2202(8) of the Export Enhancement Act of 1988
(15 U.S.C. 4711(8)) is amended by striking ‘‘502(a)(4)’’ and
inserting ‘‘507(4)’’.
(3) Section 231A(a) of the Foreign Assistance Act of 1961
(22 U.S.C. 2191a(a)) is amended—
(A) in paragraph (1) by striking ‘‘502(a)(4) of the Trade
Act of 1974 (19 U.S.C. 2462(a)(4))’’ and inserting ‘‘507(4)
of the Trade Act of 1974’’;
(B) in paragraph (2) by striking ‘‘505(c) of the Trade
Act of 1974 (19 U.S.C. 2465(c))’’ and inserting ‘‘504 of
the Trade Act of 1974’’; and
(C) in paragraph (4) by striking ‘‘502(a)(4)’’ and insert-
ing ‘‘507(4)’’.
(4) Section 1621(a)(1) of the International Financial Institu-
tions Act (22 U.S.C. 262p–4p(a)(1)) is amended by striking
‘‘502(a)(4)’’ and inserting ‘‘507(4)’’.
(5) Section 103B of the Agricultural Act of 1949 (7 U.S.C.
1444–2) is amended in subsections (a)(5)(F)(v) and (n)(1)(C)
by striking ‘‘503(d) of the Trade Act of 1974 (19 U.S.C. 2463(d))’’
and inserting ‘‘503(b)(3) of the Trade Act of 1974’’.
H. R. 2491—699
Subtitle M—Increase in Public Debt Limit
SEC. 11901. INCREASE IN PUBLIC DEBT LIMIT.
Subsection (b) of section 3101 of title 31, United States Code,
is amended by striking the dollar amount contained in the first
sentence and inserting ‘‘$5,500,000,000,000’’ and by striking the
second sentence (if any).
TITLE XII—TEACHING HOSPITALS AND
GRADUATE 
MEDICAL 
EDUCATION;
ASSET SALES; WELFARE; AND OTHER
PROVISIONS
SEC. 12001. SHORT TITLE.
Subtitles A through K of this title may be cited as the ‘‘Personal
Responsibility and Work Opportunity Act of 1995’’.
SEC. 12002. TABLE OF CONTENTS.
The table of contents of subtitles A through L of this title
is as follows:
Sec. 12001. Short title.
Sec. 12002. Table of contents.
Subtitle A—Block Grants for Temporary Assistance for Needy Families
Sec. 12100. References to the Social Security Act.
Sec. 12101. Block grants to States.
Sec. 12102. Report on data processing.
Sec. 12103. Conforming amendments to the Social Security Act.
Sec. 12104. Conforming amendments to the Food Stamp Act of 1977 and related
provisions.
Sec. 12105. Conforming amendments to other laws.
Sec. 12106. Effective date; transition rule.
Subtitle B—Supplemental Security Income
Sec. 12200. Reference to Social Security Act.
CHAPTER 1—ELIGIBILITY RESTRICTIONS
Sec. 12201. Denial of supplemental security income benefits by reason of disability
to drug addicts and alcoholics.
Sec. 12202. Denial of SSI benefits for 10 years to individuals found to have fraudu-
lently misrepresented residence in order to obtain benefits simulta-
neously in 2 or more States.
Sec. 12203. Denial of SSI benefits for fugitive felons and probation and parole vio-
lators.
CHAPTER 2—BENEFITS FOR DISABLED CHILDREN
Sec. 12211. Definition and eligibility rules.
Sec. 12212. Eligibility redeterminations and continuing disability reviews.
Sec. 12213. Additional accountability requirements.
Sec. 12214. Reduction in cash benefits payable to institutionalized individuals
whose medical costs are covered by private insurance.
Sec. 12215. Regulations.
Subtitle C—Child Support
Sec. 12300. Reference to Social Security Act.
CHAPTER 1—ELIGIBILITY FOR SERVICES; DISTRIBUTION OF PAYMENTS
Sec. 12301. State obligation to provide child support enforcement services.
Sec. 12302. Distribution of child support collections.
Sec. 12303. Privacy safeguards.
H. R. 2491—700
CHAPTER 2—LOCATE AND CASE TRACKING
Sec. 12311. State case registry.
Sec. 12312. Collection and disbursement of support payments.
Sec. 12313. State directory of new hires.
Sec. 12314. Amendments concerning income withholding.
Sec. 12315. Locator information from interstate networks.
Sec. 12316. Expansion of the Federal parent locator service.
Sec. 12317. Collection and use of social security numbers for use in child support
enforcement.
CHAPTER 3—STREAMLINING AND UNIFORMITY OF PROCEDURES
Sec. 12321. Adoption of uniform State laws.
Sec. 12322. Improvements to full faith and credit for child support orders.
Sec. 12323. Administrative enforcement in interstate cases.
Sec. 12324. Use of forms in interstate enforcement.
Sec. 12325. State laws providing expedited procedures.
CHAPTER 4—PATERNITY ESTABLISHMENT
Sec. 12331. State laws concerning paternity establishment.
Sec. 12332. Outreach for voluntary paternity establishment.
Sec. 12333. Cooperation by applicants for and recipients of temporary family assist-
ance.
CHAPTER 5—PROGRAM ADMINISTRATION AND FUNDING
Sec. 12341. Performance-based incentives and penalties.
Sec. 12342. Federal and State reviews and audits.
Sec. 12343. Required reporting procedures.
Sec. 12344. Automated data processing requirements.
Sec. 12345. Technical assistance.
Sec. 12346. Reports and data collection by the Secretary.
CHAPTER 6—ESTABLISHMENT AND MODIFICATION OF SUPPORT ORDERS
Sec. 12351. Simplified process for review and adjustment of child support orders.
Sec. 12352. Furnishing consumer reports for certain purposes relating to child sup-
port.
Sec. 12353. Nonliability for financial institutions providing financial records to
State child support enforcement agencies in child support cases.
CHAPTER 7—ENFORCEMENT OF SUPPORT ORDERS
Sec. 12361. Internal Revenue Service collection of arrearages.
Sec. 12362. Authority to collect support from Federal employees.
Sec. 12363. Enforcement of child support obligations of members of the Armed
Forces.
Sec. 12364. Voiding of fraudulent transfers.
Sec. 12365. Work requirement for persons owing past-due child support.
Sec. 12366. Definition of support order.
Sec. 12367. Reporting arrearages to credit bureaus.
Sec. 12368. Liens.
Sec. 12369. State law authorizing suspension of licenses.
Sec. 12370. International child support enforcement.
Sec. 12371. Financial institution data matches.
Sec. 12372. Enforcement of orders against paternal or maternal grandparents in
cases of minor parents.
CHAPTER 8—MEDICAL SUPPORT
Sec. 12376. Correction to ERISA definition of medical child support order.
Sec. 12377. Enforcement of orders for health care coverage.
CHAPTER 9—ENHANCING RESPONSIBILITY AND OPPORTUNITY FOR NON-RESIDENTIAL
PARENTS
Sec. 12381. Grants to States for access and visitation programs.
CHAPTER 10—EFFECT OF ENACTMENT
Sec. 12391. Effective dates.
Subtitle D—Restricting Welfare and Public Benefits for Aliens
CHAPTER 1—ELIGIBILITY FOR FEDERAL BENEFITS
Sec. 12401. Aliens who are not qualified aliens ineligible for Federal public bene-
fits.
H. R. 2491—701
Sec. 12402. Limited eligibility of certain qualified aliens for certain Federal pro-
grams.
Sec. 12403. Five-year limited eligibility of qualified aliens for Federal means-tested
public benefit.
CHAPTER 2—ATTRIBUTION OF INCOME AND AFFIDAVITS OF SUPPORT
Sec. 12421. Attribution of sponsor’s income and resources to alien.
Sec. 12422. Requirements for sponsor’s affidavit of support.
Sec. 12423. Cosignature of alien student loans.
CHAPTER 3—GENERAL PROVISIONS
Sec. 12431. Definitions.
Sec. 12432. Reapplication for SSI benefits.
Sec. 12433. Statutory construction.
Subtitle E—Teaching Hospital and Graduate Medical Education Trust Fund
CHAPTER 1—TRUST FUND
Sec. 13501. Establishment of Fund; payments to teaching hospitals.
CHAPTER 2—AMENDMENTS TO MEDICARE PROGRAM
Sec. 13511. Transfer of funds.
Subtitle F—National Defense Stockpile
Sec. 12601. Disposal of certain materials in national defense stockpile for deficit re-
duction.
Subtitle G—Child Protection Block Grant Program And Foster Care and Adoption
Assistance
Sec. 12701. Establishment of program.
Sec. 12702. Conforming amendments.
Sec. 12703. Effective date; transition rule.
Subtitle H—Child Care
Sec. 12801. Short title and references.
Sec. 12802. Authorization of appropriations.
Sec. 12803. Lead agency.
Sec. 12804. Application and plan.
Sec. 12805. Limitation on State allotments.
Sec. 12806. Activities to improve the quality of child care.
Sec. 12807. Administration and enforcement.
Sec. 12808. Payments.
Sec. 12809. Annual report and audits.
Sec. 12810. Allotments.
Sec. 12811. Definitions.
Subtitle I—Child Nutrition Programs
CHAPTER 1—NATIONAL SCHOOL LUNCH ACT
Sec. 12901. Termination of additional payment for lunches served in high free and
reduced price participation schools.
Sec. 12902. Direct Federal expenditures.
Sec. 12903. Value of food assistance.
Sec. 12904. Reduced price lunches.
Sec. 12905. Lunches, breakfasts, and supplements.
Sec. 12906. Summer food service program for children.
Sec. 12907. Child care food program.
Sec. 12908. Pilot projects.
Sec. 12909. Information clearinghouse.
CHAPTER 2—CHILD NUTRITION ACT
Sec. 12921. Special milk program.
Sec. 12922. Free and reduced price breakfasts.
Sec. 12923. Conforming reimbursement for paid breakfasts and lunches.
Sec. 12924. School breakfast program authorization.
Sec. 12925. Miscellaneous provisions and definitions.
Sec. 12926. Nutrition education and training.
Subtitle J—Food Stamps and Commodity Distribution
Sec. 13001. Short title.
H. R. 2491—702
CHAPTER 1—FOOD STAMP PROGRAM
Sec. 13011. Definition of certification period.
Sec. 13012. Definition of coupon.
Sec. 13013. Treatment of children living at home.
Sec. 13014. Optional additional criteria for separate household determinations.
Sec. 13015. Adjustment of thrifty food plan.
Sec. 13016. Definition of homeless individual.
Sec. 13017. State option for eligibility standards.
Sec. 13018. Earnings of students.
Sec. 13019. Energy assistance.
Sec. 13020. Deductions from income.
Sec. 13021. Vehicle allowance.
Sec. 13022. Vendor payments for transitional housing counted as income.
Sec. 13023. Doubled penalties for violating food stamp program requirements.
Sec. 13024. Disqualification of convicted individuals.
Sec. 13025. Disqualification.
Sec. 13026. Caretaker exemption.
Sec. 13027. Employment and training.
Sec. 13028. Comparable treatment for disqualification.
Sec. 13029. Disqualification for receipt of multiple food stamp benefits.
Sec. 13030. Disqualification of fleeing felons.
Sec. 13031. Cooperation with child support agencies.
Sec. 13032. Disqualification relating to child support arrears.
Sec. 13033. Work requirement.
Sec. 13034. Encourage electronic benefit transfer systems.
Sec. 13035. Value of minimum allotment.
Sec. 13036. Benefits on recertification.
Sec. 13037. Optional combined allotment for expedited households.
Sec. 13038. Failure to comply with other means-tested public assistance programs.
Sec. 13039. Allotments for households residing in centers.
Sec. 13040. Condition precedent for approval of retail food stores and wholesale
food concerns.
Sec. 13041. Authority to establish authorization periods.
Sec. 13042. Information for verifying eligibility for authorization.
Sec. 13043. Waiting period for stores that fail to meet authorization criteria.
Sec. 13044. Expedited coupon service.
Sec. 13045. Withdrawing fair hearing requests.
Sec. 13046. Disqualification of retailers who intentionally submit falsified applica-
tions.
Sec. 13047. Disqualification of retailers who are disqualified under the WIC pro-
gram.
Sec. 13048. Collection of overissuances.
Sec. 13049. Authority to suspend stores violating program requirements pending
administrative and judicial review.
Sec. 13050. Limitation of Federal match.
Sec. 13051. Work supplementation or support program.
Sec. 13052. Authorization of pilot projects.
Sec. 13053. Employment initiatives program.
Sec. 13054. Reauthorization of Puerto Rico nutrition assistance program.
Sec. 13055. Simplified food stamp program.
Sec. 13056. State food assistance block grant.
Sec. 13057. American Samoa.
Sec. 13058. Assistance for community food projects.
CHAPTER 2—COMMODITY DISTRIBUTION PROGRAMS
Sec. 13071. Emergency food assistance program.
Subtitle K—Miscellaneous
Sec. 13101. Food stamp eligibility.
Sec. 13102. Reduction in block grants for social services.
Subtitle L—Reform of the Earned Income Credit
Sec. 13200. Amendment of 1986 code.
Sec. 13201. Earned income credit denied to individuals not authorized to be em-
ployed in the United States.
Sec. 13202. Repeal of earned income credit for individuals without children.
Sec. 13203. Modification of earned income credit amount and phaseout.
Sec. 13204. Rules relating to denial of earned income credit on basis of disqualified
income.
Sec. 13205. Modification of adjusted gross income definition for earned income cred-
it.
Sec. 13206. Provisions to improve tax compliance.
H. R. 2491—703
Subtitle A—Block Grants for Temporary
Assistance for Needy Families
SEC. 12100. REFERENCES TO THE SOCIAL SECURITY ACT.
Except as otherwise specifically provided, wherever in this sub-
title an amendment is expressed in terms of an amendment to
or repeal of a section or other provision, the reference shall be
considered to be made to that section or other provision of the
Social Security Act.
SEC. 12101. BLOCK GRANTS TO STATES.
Part A of title IV (42 U.S.C. 601 et seq.) is amended to read
as follows:
‘‘PART A—BLOCK GRANTS TO STATES FOR
TEMPORARY ASSISTANCE FOR NEEDY FAMI-
LIES
‘‘SEC. 401. ELIGIBLE STATES; STATE PLAN.
‘‘(a) IN GENERAL.—As used in this part, the term ‘eligible State’
means, with respect to a fiscal year, a State that, during the
2-year period immediately preceding the fiscal year, has submitted
to the Secretary a plan that includes the following:
‘‘(1) OUTLINE OF FAMILY ASSISTANCE PROGRAM.—
‘‘(A) GENERAL PROVISIONS.—A written document that
outlines how the State intends to do the following:
‘‘(i) Conduct a program, designed to serve all politi-
cal subdivisions in the State, that provides assistance
to needy families with (or expecting) children and pro-
vides parents with job preparation, work, and support
services to enable them to leave the program and
become self-sufficient.
‘‘(ii) Require a parent or caretaker receiving assist-
ance under the program to engage in work (as defined
by the State) once the State determines the parent
or caretaker is ready to engage in work, or once the
parent or caretaker has received assistance under the
program for 24 months (whether or not consecutive),
whichever is earlier.
‘‘(iii) Ensure that parents and caretakers receiving
assistance under the program engage in work activities
in accordance with section 406.
‘‘(iv) Take such reasonable steps as the State
deems necessary to restrict the use and disclosure of
information about individuals and families receiving
assistance under the program.
‘‘(v) Establish goals and take action to prevent
and reduce the incidence of out-of-wedlock pregnancies,
with special emphasis on teenage pregnancies, and
establish numerical goals for reducing the illegitimacy
ratio of the State (as defined in section 402(a)(2)(B))
for calendar years 1996 through 2005.
‘‘(B) SPECIAL PROVISIONS.—
‘‘(i) The document shall indicate whether the State
intends to treat families moving into the State from