In this task, you are given text for US Congressional and California state bills, your task is to generate a summary for this bill.

Ex Input:
SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Farm and Ranch Risk Management 
Act''.

SEC. 2. FARM AND RANCH RISK MANAGEMENT ACCOUNTS.

    (a) In General.--Subpart C of part II of subchapter E of chapter 1 
of the Internal Revenue Code of 1986 (relating to taxable year for 
which deductions taken) is amended by inserting after section 468B the 
following:

``SEC. 468C. FARM AND RANCH RISK MANAGEMENT ACCOUNTS.

    ``(a) Deduction Allowed.--In the case of an individual engaged in 
an eligible farming business or commercial fishing, there shall be 
allowed as a deduction for any taxable year the amount paid in cash by 
the taxpayer during the taxable year to a Farm and Ranch Risk 
Management Account (hereinafter referred to as the `FARRM Account').
    ``(b) Limitation.--
            ``(1) Contributions.--The amount which a taxpayer may pay 
        into the FARRM Account for any taxable year shall not exceed 20 
        percent of so much of the taxable income of the taxpayer 
        (determined without regard to this section) which is 
        attributable (determined in the manner applicable under section 
        1301) to any eligible farming business or commercial fishing.
            ``(2) Distributions.--Distributions from a FARRM Account 
        may not be used to purchase, lease, or finance any new fishing 
        vessel, add capacity to any fishery, or otherwise contribute to 
        the overcapitalization of any fishery. The Secretary of 
        Commerce shall implement regulations to enforce this paragraph.
    ``(c) Eligible Businesses.--For purposes of this section--
            ``(1) Eligible farming business.--The term `eligible 
        farming business' means any farming business (as defined in 
        section 263A(e)(4)) which is not a passive activity (within the 
        meaning of section 469(c)) of the taxpayer.
            ``(2) Commercial fishing.--The term `commercial fishing' 
        has the meaning given such term by section (3) of the Magnuson-
        Stevens Fishery Conservation and Management Act (16 U.S.C. 
        1802) but only if such fishing is not a passive activity 
        (within the meaning of section 469(c)) of the taxpayer.
    ``(d) FARRM Account.--For purposes of this section--
            ``(1) In general.--The term `FARRM Account' means a trust 
        created or organized in the United States for the exclusive 
        benefit of the taxpayer, but only if the written governing 
        instrument creating the trust meets the following requirements:
                    ``(A) No contribution will be accepted for any 
                taxable year in excess of the amount allowed as a 
                deduction under subsection (a) for such year.
                    ``(B) The trustee is a bank (as defined in section 
                408(n)) or another person who demonstrates to the 
                satisfaction of the Secretary that the manner in which 
                such person will administer the trust will be 
                consistent with the requirements of this section.
                    ``(C) The assets of the trust consist entirely of 
                cash or of obligations which have adequate stated 
                interest (as defined in section 1274(c)(2)) and which 
                pay such interest not less often than annually.
                    ``(D) All income of the trust is distributed 
                currently to the grantor.
                    ``(E) The assets of the trust will not be 
                commingled with other property except in a common trust 
                fund or common investment fund.
            ``(2) Account taxed as grantor trust.--The grantor of a 
        FARRM Account shall be treated for purposes of this title as 
        the owner of such Account and shall be subject to tax thereon 
        in accordance with subpart E of part I of subchapter J of this 
        chapter (relating to grantors and others treated as substantial 
        owners).
    ``(e) Inclusion of Amounts Distributed.--
            ``(1) In general.--Except as provided in paragraph (2), 
        there shall be includible in the gross income of the taxpayer 
        for any taxable year--
                    ``(A) any amount distributed from a FARRM Account 
                of the taxpayer during such taxable year, and
                    ``(B) any deemed distribution under--
                            ``(i) subsection (f)(1) (relating to 
                        deposits not distributed within 5 years),
                            ``(ii) subsection (f)(2) (relating to 
                        cessation in eligible farming business), and
                            ``(iii) subparagraph (A) or (B) of 
                        subsection (f)(3) (relating to prohibited 
                        transactions and pledging account as security).
            ``(2) Exceptions.--Paragraph (1)(A) shall not apply to--
                    ``(A) any distribution to the extent attributable 
                to income of the Account, and
                    ``(B) the distribution of any contribution paid 
                during a taxable year to a FARRM Account to the extent 
                that such contribution exceeds the limitation 
                applicable under subsection (b) if requirements similar 
                to the requirements of section 408(d)(4) are met.
        For purposes of subparagraph (A), distributions shall be 
        treated as first attributable to income and then to other 
        amounts.
    ``(f) Special Rules.--
            ``(1) Tax on deposits in account which are not distributed 
        within 5 years.--
                    ``(A) In general.--If, at the close of any taxable 
                year, there is a nonqualified balance in any FARRM 
                Account--
                            ``(i) there shall be deemed distributed 
                        from such Account during such taxable year an 
                        amount equal to such balance, and
                            ``(ii) the taxpayer's tax imposed by this 
                        chapter for such taxable year shall be 
                        increased by 10 percent of such deemed 
                        distribution.
                The preceding sentence shall not apply if an amount 
                equal to such nonqualified balance is distributed from 
                such Account to the taxpayer before the due date 
                (including extensions) for filing the return of tax 
                imposed by this chapter for such year (or, if earlier, 
                the date the taxpayer files such return for such year).
                    ``(B) Nonqualified balance.--For purposes of 
                subparagraph (A), the term `nonqualified balance' means 
                any balance in the Account on the last day of the 
                taxable year which is attributable to amounts deposited 
                in such Account before the 4th preceding taxable year.
                    ``(C) Ordering rule.--For purposes of this 
                paragraph, distributions from a FARRM Account (other 
                than distributions of current income) shall be treated 
                as made from deposits in the order in which such 
                deposits were made, beginning with the earliest 
                deposits.
            ``(2) Cessation in eligible business.--At the close of the 
        first disqualification period after a period for which the 
        taxpayer was engaged in an eligible farming business or 
        commercial fishing, there shall be deemed distributed from the 
        FARRM Account of the taxpayer an amount equal to the balance in 
        such Account (if any) at the close of such disqualification 
        period. For purposes of the preceding sentence, the term 
        `disqualification period' means any period of 2 consecutive 
        taxable years for which the taxpayer is not engaged in an 
eligible farming business or commercial fishing.
            ``(3) Certain rules to apply.--Rules similar to the 
        following rules shall apply for purposes of this section:
                    ``(A) Section 220(f)(8) (relating to treatment on 
                death).
                    ``(B) Section 408(e)(2) (relating to loss of 
                exemption of account where individual engages in 
                prohibited transaction).
                    ``(C) Section 408(e)(4) (relating to effect of 
                pledging account as security).
                    ``(D) Section 408(g) (relating to community 
                property laws).
                    ``(E) Section 408(h) (relating to custodial 
                accounts).
            ``(4) Time when payments deemed made.--For purposes of this 
        section, a taxpayer shall be deemed to have made a payment to a 
        FARRM Account on the last day of a taxable year if such payment 
        is made on account of such taxable year and is made on or 
        before the due date (without regard to extensions) for filing 
        the return of tax for such taxable year.
            ``(5) Individual.--For purposes of this section, the term 
        `individual' shall not include an estate or trust.
            ``(6) Deduction not allowed for self-employment tax.--The 
        deduction allowable by reason of subsection (a) shall not be 
        taken into account in determining an individual's net earnings 
        from self-employment (within the meaning of section 1402(a)) 
        for purposes of chapter 2.
    ``(g) Reports.--The trustee of a FARRM Account shall make such 
reports regarding such Account to the Secretary and to the person for 
whose benefit the Account is maintained with respect to contributions, 
distributions, and such other matters as the Secretary may require 
under regulations. The reports required by this subsection shall be 
filed at such time and in such manner and furnished to such persons at 
such time and in such manner as may be required by such regulations.''.
    (b) Tax on Excess Contributions.--
            (1) Subsection (a) of section 4973 of such Code (relating 
        to tax on excess contributions to certain tax-favored accounts 
        and annuities) is amended by striking ``or'' at the end of 
        paragraph (3), by redesignating paragraph (4) as paragraph (5), 
        and by inserting after paragraph (3) the following:
            ``(4) a FARRM Account (within the meaning of section 
        468C(d)), or''.
            (2) Section 4973 of such Code is amended by adding at the 
        end the following:
    ``(g) Excess Contributions to FARRM Accounts.--For purposes of this 
section, in the case of a FARRM Account (within the meaning of section 
468C(d)), the term `excess contributions' means the amount by which the 
amount contributed for the taxable year to the Account exceeds the 
amount which may be contributed to the Account under section 468C(b) 
for such taxable year. For purposes of this subsection, any 
contribution which is distributed out of the FARRM Account in a 
distribution to which section 468C(e)(2)(B) applies shall be treated as 
an amount not contributed.''.
            (3) The section heading for section 4973 of such Code is 
        amended to read as follows:

``SEC. 4973. EXCESS CONTRIBUTIONS TO CERTAIN ACCOUNTS, ANNUITIES, 
              ETC.''.

            (4) The table of sections for chapter 43 of such Code is 
        amended by striking the item relating to section 4973 and 
        inserting the following:

                              ``Sec. 4973. Excess contributions to 
                                        certain accounts, annuities, 
                                        etc.''.
    (c) Tax on Prohibited Transactions.--
            (1) Subsection (c) of section 4975 of such Code (relating 
        to tax on prohibited transactions) is amended by adding at the 
        end the following:
            ``(6) Special rule for farrm accounts.--A person for whose 
        benefit a FARRM Account (within the meaning of section 468C(d)) 
        is established shall be exempt from the tax imposed by this 
        section with respect to any transaction concerning such account 
        (which would otherwise be taxable under this section) if, with 
        respect to such transaction, the account ceases to be a FARRM 
        Account by reason of the application of section 468C(f)(3)(A) 
        to such account.''.
            (2) Paragraph (1) of section 4975(e) of such Code is 
        amended by redesignating subparagraphs (E) and (F) as 
        subparagraphs (F) and (G), respectively, and by inserting after 
        subparagraph (D) the following:
                    ``(E) a FARRM Account described in section 
                468C(d),''.
    (d) Failure To Provide Reports on FARRM Accounts.--Paragraph (2) of 
section 6693(a) of such Code (relating to failure to provide reports on 
certain tax-favored accounts or annuities) is amended by redesignating 
subparagraphs (C) and (D) as subparagraphs (D) and (E), respectively, 
and by inserting after subparagraph (B) the following:
                    ``(C) section 468C(g) (relating to FARRM 
                Accounts),''.
    (e) Clerical Amendment.--The table of sections for subpart C of 
part II of subchapter E of chapter 1 of such Code is amended by 
inserting after the item relating to section 468B the following:

                              ``Sec. 468C. Farm and Ranch Risk 
                                        Management Accounts.''.
    (f) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.

Ex Output:
Farm and Ranch Risk Management Act - Amends the Internal Revenue Code to allow an individual engaged in an eligible farming or commercial fishing business a deduction for any taxable year of up to 20 percent of taxable income attributable to the eligible farming or commercial fishing business which was paid in cash by the taxpayer to a Farm and Ranch Risk Management Account (FARRM Account).Includes distributions from a FARRM account in the taxpayer's gross income, and subjects to a special ten percent surtax any distributions not made within five years of contribution. Establishes a tax on excess contributions, but exempts the taxpayer from the tax on certain prohibited transactions.


Ex Input:
SECTION 1. SHORT TITLE.
    This Act may be cited as the ``Lions Clubs International Century of 
Service Commemorative Coin Act''.
SEC. 2. FINDINGS.
    The Congress finds as follows:
        (1) Lions Clubs International is the world's largest service 
    club organization founded in 1917 by Chicago business leader Melvin 
    Jones. Lions Clubs International empowers volunteers to serve their 
    communities, meet humanitarian needs, encourage peace and promote 
    international understanding through Lions clubs.
        (2) Today, Lions Clubs International has over 1.35 million 
    members in more than 45,000 clubs globally, extending its mission 
    of service throughout the world every day.
        (3) In 1945, Lions Clubs International became one of the first 
    nongovernmental organizations invited to assist in drafting the 
    United Nations Charter and has enjoyed a special relationship with 
    the United Nations ever since.
        (4) In 1968, Lions Clubs International Foundation was 
    established to assist with global and large-scale local 
    humanitarian projects and has since then awarded more than $700 
    million to fund five unique areas of service: preserving sight, 
    combating disability, promoting health, serving youth and providing 
    disaster relief.
        (5) In 1990, the Lions Clubs International Foundation launched 
    the SightFirst program to build comprehensive eye care systems to 
    fight the major causes of blindness and care for the blind or 
    visually impaired. Thanks to the generosity of Lions worldwide, 
    over $415 million has been raised, resulting in the prevention of 
    serious vision loss in 30 million people and improved eye care for 
    hundreds of millions of people.
        (6) On June 7, 2017, Lions Clubs International will celebrate 
    100 years of community service to men, women, and children in need 
    throughout the world.
SEC. 3. COIN SPECIFICATIONS.
    (a) $1 Silver Coins.--The Secretary of the Treasury (hereafter in 
this Act referred to as the ``Secretary'') shall mint and issue not 
more than 400,000 $1 coins in commemoration of the centennial of the 
founding of the Lions Clubs International, each of which shall--
        (1) weigh 26.73 grams;
        (2) have a diameter of 1.500 inches; and
        (3) contain 90 percent silver and 10 percent copper.
    (b) Legal Tender.--The coins minted under this Act shall be legal 
tender, as provided in section 5103 of title 31, United States Code.
    (c) Numismatic Items.--For purposes of sections 5134 and 5136 of 
title 31, United States Code, all coins minted under this Act shall be 
considered to be numismatic items.
SEC. 4. DESIGN OF COINS.
    (a) Design Requirements.--
        (1) In general.--The design of the coins minted under this Act 
    shall be emblematic of the centennial of the Lions Clubs 
    International.
        (2) Designation and inscriptions.--On each coin minted under 
    this Act, there shall be--
            (A) a designation of the value of the coin;
            (B) an inscription of the year ``2017''; and
            (C) inscriptions of the words ``Liberty'', ``In God We 
        Trust'', ``United States of America'', and ``E Pluribus Unum''.
    (b) Selection.--The design for the coins minted under this Act 
shall be--
        (1) chosen by the Secretary after consultation with Lions Clubs 
    International Special Centennial Planning Committee and the 
    Commission of Fine Arts; and
        (2) reviewed by the Citizens Coinage Advisory Committee.
SEC. 5. ISSUANCE OF COINS.
    (a) Quality of Coins.--Coins minted under this Act shall be issued 
in uncirculated and proof qualities.
    (b) Mint Facility.--Only one facility of the United States Mint may 
be used to strike any particular quality of the coins minted under this 
Act.
    (c) Period for Issuance.--The Secretary may issue coins under this 
Act only during the calendar year beginning on January 1, 2017.
SEC. 6. SALE OF COINS.
    (a) Sale Price.--The coins issued under this Act shall be sold by 
the Secretary at a price equal to the sum of--
        (1) the face value of the coins;
        (2) the surcharge provided in section 7 with respect to such 
    coins; and
        (3) the cost of designing and issuing the coins (including 
    labor, materials, dies, use of machinery, overhead expenses, 
    marketing, and shipping).
    (b) Bulk Sales.--The Secretary shall make bulk sales of the coins 
issued under this Act at a reasonable discount.
    (c) Prepaid Orders.--
        (1) In general.--The Secretary shall accept prepaid orders for 
    the coins minted under this Act before the issuance of such coins.
        (2) Discount.--Sale prices with respect to prepaid orders under 
    paragraph (1) shall be at a reasonable discount.
SEC. 7. SURCHARGES.
    (a) In General.--All sales of coins issued under this Act shall 
include a surcharge of $10 per coin.
    (b) Distribution.--Subject to section 5134(f) of title 31, United 
States Code, all surcharges received by the Secretary from the sale of 
coins issued under this Act shall be promptly paid by the Secretary to 
the Lions Clubs International Foundation for the purposes of--
        (1) furthering its programs for the blind and visually impaired 
    in the United States and abroad;
        (2) investing in adaptive technologies for the disabled; and
        (3) investing in youth and those affected by a major disaster.
    (c) Audits.--The Lions Clubs International Foundation shall be 
subject to the audit requirements of section 5134(f)(2) of title 31, 
United States Code, with regard to the amounts received under 
subsection (b).
    (d) Limitation.--Notwithstanding subsection (a), no surcharge may 
be included with respect to the issuance under this Act of any coin 
during a calendar year if, as of the time of such issuance, the 
issuance of such coin would result in the number of commemorative coin 
programs issued during such year to exceed the annual 2 commemorative 
coin program issuance limitation under section 5112(m)(1) of title 31, 
United States Code. The Secretary may issue guidance to carry out this 
subsection.
SEC. 8. FINANCIAL ASSURANCES.
    The Secretary shall take such actions as may be necessary to ensure 
that--
        (1) minting and issuing coins under this Act will not result in 
    any net cost to the United States Government; and
        (2) no funds, including applicable surcharges, shall be 
    disbursed to any recipient designated in section 7 until the total 
    cost of designing and issuing all of the coins authorized by this 
    Act (including labor, materials, dies, use of machinery, overhead 
    expenses, marketing, and shipping) is recovered by the United 
    States Treasury, consistent with sections 5112(m) and 5134(f) of 
    title 31, United States Code.
SEC. 9. BUDGET COMPLIANCE.
    The budgetary effects of this Act, for the purpose of complying 
with the Statutory Pay-As-You-Go Act of 2010, shall be determined by 
reference to the latest statement titled ``Budgetary Effects of PAYGO 
Legislation'' for this Act, submitted for printing in the Congressional 
Record by the Chairman of the Committee on the Budget of the House of 
Representatives, provided that such statement has been submitted prior 
to the vote on passage.

                               Speaker of the House of Representatives.

                            Vice President of the United States and    
                                               President of the Senate.

Ex Output:
Lions Clubs International Century of Service Commemorative Coin Act - Directs the Secretary of the Treasury to mint and issue as legal tender up to 400,000 $1 coins in commemoration of the centennial of the founding of the Lions Clubs International. Requires the design of the coins to be emblematic of the centennial.

Permits the Secretary to issue such coins only during calendar 2017.

Requires coin sales to include a surcharge of $10 per coin, to be paid by the Secretary to the Lions Clubs International Foundation.

Subjects such Foundation to specified audit requirements with regard to the funds received from the Secretary.


Ex Input:
OFFICERS.

    ``The State Administrator shall establish a Problem Resolution 
Office. Problem Resolution Officers shall have the authority to 
investigate taxpayer complaints and enjoin collection activity if, in 
the opinion of the Problem Resolution Officer, said collection activity 
is reasonably likely to not be in compliance with law. Said 
administrative injunction may only be reversed by the highest official 
in the relevant State or Federal taxing authority or by its General 
Counsel upon a finding that the collection activity is justified by 
clear and convincing evidence. The authority to reverse this 
administrative injunction may not be delegated. Problem Resolution 
Officers shall not be disciplined or adversely affected for the 
issuance of administrative injunctions unless a pattern or issuing 
injunctions that are manifestly unreasonable is proven in an 
administrative hearing. Nothing in this section shall limit the 
authority of the State Administrators or the taxpayer to pursue any 
legal remedy in any court with jurisdiction over the dispute at issue.

``SEC. 53. JURISDICTION AND INTERSTATE ALLOCATION.

    ``(a) Allocation Rules.--For purposes of allocating revenue between 
or among administering states from taxes imposed by this subtitle, the 
revenue shall be allocated to those states that are the destination of 
the taxable property or services. The destination of the purchase of 
taxable property and services shall be determined in accordance with 
this section.
    ``(b) Federal Office of Revenue Allocation.--The Secretary shall 
establish an Office of Revenue Allocation to arbitrate any claims or 
disputes among administering states as to the destination of taxable 
property and services for purposes of allocating revenue between or 
among the states from taxes imposed by this subtitle. The determination 
of the Administrator of the Office of Revenue Allocation shall be 
subject to judicial review in any federal court with competent 
jurisdiction provided, however, that the standard of review shall be 
abuse of discretion.
    ``(c) Tangible Personal Property.--The destination of tangible 
personal property shall be the state or territory in which the property 
was first delivered to the purchaser. Tangible personal property 
shipped by means of the mail or common carrier shall be deemed 
delivered to the location of the purchaser for purposes of this 
subsection upon shipment by mail or common carrier.
    ``(d) Real Property.--The destination of real property or rents or 
leaseholds on real property shall be state or territory in which the 
real property is located.
    ``(e) Other Property.--The destination of other property shall be 
residence of the purchaser.
    ``(f) Services.--
            ``(1) General rule.--The destination of services shall be 
        state or territory in which the use, consumption or enjoyment 
        of the services occurred. Allocation of service invoices 
        relating to more than one jurisdiction shall be on the basis of 
        time.
            ``(2) Telecommunications services.--The destination of 
        telecommunications services shall be the residence of the 
        purchaser. Telecommunications services shall include telephone, 
        telegraph, cable television, satellite and computer on-line or 
        network services.
            ``(3) Domestic transportation services.--For transportation 
        services where all of the final destinations are within the 
        United States, the destination of transportation services shall 
        be the final destination of the trip (in the case of round or 
        multiple trip fares, the services amount shall be equally 
        allocated among the final destinations).
            ``(4) International transportation services.--For 
        transportation services where the final destination or origin 
        of the trip is without the United States, the service amount 
        shall be deemed 50 percent attributable to the United States 
        destination or origin.
    ``(g) Financial Intermediation Services.--The destination of 
financial intermediation services shall be the residence of the 
purchase.
    ``(h) A State Tax Administrator shall have jurisdiction over any 
gross payments made which have a destination (as determined in 
accordance with this section) within the state of said State Tax 
Administrator. This grant of jurisdiction is not exclusive of other 
jurisdiction that said State Tax Administrator may have.
    ``(i) Rents and Royalties Paid for the Lease of Tangible 
Property.--
            ``(1) General rule.--The destination of rents and royalties 
        paid for the lease of tangible property shall be where the 
        property is located.
            ``(2) Vehicles.--The destination of rent and lease payments 
        on vehicles shall be--
                    ``(A) in the case of rentals and leases of a term 
                one month or less, the location where the vehicle was 
                originally delivered to the lessee; and
                    ``(B) in the case of rentals and leases of a term 
                greater than one month, the residence of the lessee.

``SEC. 54. TAX TO BE STATED AND CHARGED SEPARATELY.

    ``(a) In General.--For each purchase of taxable property or 
services for which a tax is imposed pursuant to section 1, the sales 
tax shall be charged separately from the purchase price by the vendor 
or seller. For purchase of taxable property or services for which a tax 
is imposed pursuant to section 1, the vendor shall provide to the 
purchaser a receipt that sets forth at least the following information:
            ``(1) The property or services price exclusive of tax.
            ``(2) The amount of tax paid.
            ``(3) The property or service price inclusive of tax.
            ``(4) The tax rate (the amount of tax paid (per 
        subparagraph 2) divided by the property or service price 
        inclusive of tax (per subparagraph 3)).
            ``(5) The date that the good or service was sold.
            ``(6) The name of the vendor.
            ``(7) The vendor registration number.
    ``(b) Vending Machine Exception.--The requirements of subsection 
(a) shall be inapplicable in the case of sales by vending machines. 
Vending machines for purposes of this subsection shall mean machines--
            ``(1) that dispense taxable property in exchange for coins, 
        one, five, ten or twenty dollar bills, and
            ``(2) that sell no single item exceeding ten dollars per 
        unit in price.

``SEC. 55. INSTALLMENT AGREEMENTS; COMPROMISES.

    ``The State Administrator or the Secretary, as the case may be, is 
authorized to enter into written agreements with any person under which 
the person is allowed to satisfy liability for payment of any tax in 
installment payments if he determines that such agreement will 
facilitate the collection of such liability. The agreement shall remain 
in effect for the term of the agreement unless the information that the 
person provided to the Secretary or the State Administrator was 
materially inaccurate or incomplete. The Secretary and the State 
Administrator may compromise any amounts alleged to be due.

``SEC. 56. ACCOUNTING.

    ``(a) Cash Method To Be Used Generally.--Vendors and other persons 
shall remit taxes and report transactions with respect to the month for 
which payment was received or the tax imposed by this chapter otherwise 
becomes due.
    ``(b) Election To Use Accrual Method.--A person may elect with 
respect to a calendar year, in a form prescribed by the Secretary, to 
remit taxes and report transactions with respect to the month where a 
sale was invoiced and accrued.
    ``(c) Cross Reference.--

                                ``For rules relating to bad debts for 
vendors electing the accrual method, see section 11(g).

``SEC. 57. HOBBY ACTIVITIES.

    ``(a) The exemption afforded by section 2(a)(1) shall not be 
available for any taxable property or service used by a trade or 
business if that trade or business is not engaged in for profit.
    ``(b) If the trade or business has received gross payments for the 
sale of taxable property or services that exceed the sum of--
            ``(1) taxable property and services purchased,
            ``(2) wages paid, and
            ``(3) taxes paid,
in 2 or more of the most recent 4 calendar years during which it 
operated, then the business activity shall be conclusively deemed to be 
engaged in for profit.''.

SEC. 5. PHASE-OUT OF THE INTERNAL REVENUE SERVICE.

    (a) In General.--Appropriations for any expenses of the Internal 
Revenue Service including processing income tax returns for years prior 
to the repeal of the income tax, revenue accounting, management, 
transfer of payroll tax data to the Social Security Administration and 
otherwise for years after fiscal year 2007 are not authorized.
    (b) Excise and Sales Tax Bureaus.--Section 7801 is amended by 
adding the following new subsections:
    ``(d) Excise Tax Bureau.--There shall be in the Department of 
Treasury an Excise Tax Bureau to administer those excise taxes not 
repealed by this Act.
    ``(e) Sales Tax Bureau.--There shall be in the Department of 
Treasury a Sales Tax Bureau to administer the national sales tax in 
those States where it is required pursuant to section 31(g), and to 
discharge other Federal duties and powers relating to the national 
sales tax (including those required by sections 32, 33, and 53(b)). The 
Office of Revenue Allocation shall be within the Sales Tax Bureau.''.
    (c) Assistant General Counsels.--Section 7801(b)(2) is amended to 
read as follows:
            ``(2) Assistant general counsels.--The Secretary of the 
        Treasury may appoint, without regard to the provisions of the 
        civil service laws, and fix the duties of not more than 5 
        Assistant General Counsels.''.
    (d) Short Year.--
            (1) For purposes of the Federal income tax, the tax imposed 
        by section 1 and section 11 for taxable years ending June 30, 
        2006, shall be modified as set forth in this subsection.
            (2) For calendar year taxpayers, the dollar figures in 
        section 1 and section 11 shall be reduced by dividing by 2 all 
        dollar figures that would be applicable but for this 
        subsection.
            (3) For fiscal year taxpayers, the dollar figures in 
        section 1 and section 11 shall be equal to the product of--
                    (A) the dollar amount that would be applicable but 
                for this subsection, and
                    (B) the ratio that has as its numerator the number 
                of months in the taxpayer's taxable year ending June 
                30, 2006, and as its denominator 12.
            (4) The Secretary shall publish tax rate schedules in 
        accordance with this subsection.

SEC. 6. SOCIAL SECURITY ADMINISTRATION TO COLLECT PAYROLL TAXES.

    (a) In General.--Commencing January 1, 2006, the Social Security 
Administration shall collect and administer the taxes imposed pursuant 
to chapter 2 of subtitle A (relating to self employment income taxes) 
and subtitle C (relating to employment taxes) of the Internal Revenue 
Code of 1986.
    (b) Cross References.--

                                For revised rules relating to the self-
employment tax, see section 7 of this Act.
                                For rules relating to revised 
withholding tax schedules and family consumption refund, see section 
13.

SEC. 7. SELF-EMPLOYMENT TAX.

    (a) In General.--Subsection 1402(a) of the Internal Revenue Code of 
1986 is amended to read as follows:
    ``(a) In General.--`Self employment income' shall mean gross 
payments received in a calendar year from the sale of taxable property 
or services (without regard to exemption) less the sum in a calendar 
year of--
            ``(1) purchases of taxable property or services (without 
        regard to exemption) in furtherance of a business purpose,
            ``(2) any wages paid (whether to the self-employed person 
        or others) in furtherance of a business purpose,
            ``(3) unused transition amounts, and
            ``(4) undeducted negative self employment income amounts 
        from prior periods.
    ``(b) Transition Amounts.--
            ``(1) General rule.--The transition amount for the ten 
        calendar years commencing in 2006 shall be the unrecovered 
        basis amount as of the end of December 31, 2005, divided by 
        ten.
            ``(2) Unrecovered basis amount.--The unrecovered basis 
        amount shall be remaining income tax basis relating to--
                    ``(A) prior law section 167 property placed in 
                service prior to January 1, 2006, and
                    ``(B) inventory held as of the end of 2005 
                (including any amounts capitalized in accordance with 
                prior law section 263A).''.
    (b) Conforming Amendments.--Subsections 1402(b) and 1402(c) are 
hereby repealed. Subsections 1402(d) et seq. are hereby renumbered as 
subsections 1402(b) et seq.

SEC. 8. SOCIAL SECURITY BENEFITS INDEXED ON SALES TAX INCLUSIVE BASIS.

    Subparagraph (D) of paragraph (1) of subsection (i) of section 215 
of the Social Security Act (42 U.S.C. 415) (relating to cost-of-living 
increases in Social Security benefits) is amended to read as follows:
            ``(D)(i) the term `CPI increase percentage', with respect 
        to a base quarter or cost-of-living quarter in any calendar 
        year, means the percentage (rounded to the nearest one-tenth of 
        1 percent) by which the Consumer Price Index for that quarter 
        (as prepared by the Department of Labor) exceeds such index for 
        the most recent prior calendar quarter which was a base quarter 
        under subparagraph (A)(ii) or, if later, the most recent cost-
        of-living computation quarter under subparagraph (B);
            ``(ii) if the Consumer Price Index (as prepared by the 
        Department of Labor) does not include the national sales tax 
        paid, then the term `CPI increase percentage' with respect to a 
        base quarter or cost-of-living quarter in any calendar year, 
        means the percentage (rounded to the nearest one-tenth of 1 
        percent) by which the product of--
                    ``(I) the Consumer Price Index for that quarter (as 
                prepared by the Department of Labor); and
                    ``(II) the national sales tax factor,
        exceeds such index for the most recent prior calendar quarter 
        which was a base quarter under subparagraph (A)(ii) or, if 
        later, the most recent cost-of-living computation quarter under 
        subparagraph (B); and
            ``(iii) for purposes of clause (ii), the `national sales 
        tax factor' is equal to one plus the quotient that is--
                    ``(I) the sales tax rate (as defined in section 1 
                of title 26), divided by
                    ``(II) the quantity that is one minus the sales tax 
                rate.''.

SEC. 9. COMPENSATING PAYMENTS TO CERTAIN PERSONS ON FIXED INCOME.

    (a) Compensating Payment.--Eligible persons (as defined in 
subsection (c)) shall receive a compensating payment (as defined in 
subsection (b)) provided that they comply with subsection (g) (relating 
to applications).
    (b) Compensating Payment Defined.--The term ``compensating 
payment'' means the product of the qualified fixed income payment 
amount (as defined in subsection (e)) and the excess inflation rate (as 
defined in subsection (f)).
    (c) Eligible Person Defined.--An eligible person is any person with 
respect to any calendar year who is entitled to--
            (1) Social Security benefits; and
            (2) qualified fixed income payments (as defined in 
        subsection (d)).
    (d) Qualified Fixed Income Payment Defined.--A qualified fixed 
income payment is a payment received by--
            (1) a beneficiary under a defined benefit plan (within the 
        meaning of section 414(j) of the Internal Revenue Code as in 
        effect prior to the enactment of this Act) whether sponsored by 
        a private or Government employer; or
            (2) by an annuitant pursuant to an annuity contract between 
        the annuitant and a bona fide insurance company.
A payment pursuant to a plan or annuity contract is not a qualified 
fixed income payment if the payment varies with investment performance, 
interest rates, or inflation. Payments pursuant to an annuity contract 
entered into after June 30, 2006, shall not be qualified fixed income 
payments. Payments pursuant to a defined benefit plan to a beneficiary 
that had been a participant in said defined benefit plan (within the 
meaning of section 410 of the Internal Revenue Code as in effect prior 
to the enactment of this Act) for less than 5 years shall not be 
qualified fixed income payments.
    (e) Qualified Fixed Income Payment Amount.--The qualified fixed 
income payment amount is \1/12\ of qualified fixed income payments that 
an eligible person is entitled to receive during the calendar year 
subsequent to the year for which the compensating payment is 
calculated, provided, however, that the qualified fixed income payment 
amount shall not exceed $5,000.
    (f) Excess Inflation Rate Defined.--The term ``excess inflation 
rate'' shall mean the excess, if any, of the consumer price index (all 
urban) during the 18-month period ending December 31, 2006, over the 
increase projected for the consumer price index (all urban) in the 
Office of Management and Budget baseline reported in the Budget of the 
United States for Fiscal Year 2006 for said 18-month period. The 
baseline assumption for the 6 months in 2006 shall be \1/2\ of the 
assumed increase for the entire calendar year 2006.
    (g) Application Required.--In order to receive compensating 
payments, each eligible person must apply in a form prescribed by the 
Secretary of Health and Human Services and provide such documentation 
as the Secretary may reasonably require.
    (h) Means of Payment.--Each person entitled to a compensating 
payment shall receive the compensating payment with their Social 
Security benefit payment. The compensating payment shall be separately 
indicated but may be included in one check. The funds to make 
compensating payments shall come from the general fund.
    (i) The Secretary of Health and Human Services may require insurers 
that are parties to annuity contracts and defined benefit plan sponsors 
to issue a statement to annuitants or plan participants including such 
information as the Secretary may require to determine the qualified 
fixed income payment amount.

SEC. 10. INTEREST.

    Section 6621 of the Internal Revenue Code of 1986 is amended by 
striking the last sentence in section 6621(a)(1) and by striking ``3'' 
in section 6621(a)(2)(B) and substituting in its stead ``2''.

SEC. 11. SUPERMAJORITY REQUIRED TO RAISE RATE.

    (a) In General.--It shall not be in order in the House of 
Representatives or the Senate to consider any bill, joint resolution, 
amendment thereto, or conference report thereon that includes any 
provision that--
            (1) increases any federal sales tax rate, and
            (2) provides any exemption, deduction, credit or other 
        benefit which results in a reduction in federal revenues.
    (b) Waiver or Suspension.--This section may be waived or suspended 
in the House of Representatives or the Senate only by the affirmative 
vote of two-thirds of the Members, duly chosen and sworn.

Ex Output:

Individual Tax Freedom Act of 2004 - Amends the Internal Revenue Code to repeal the income tax, estate and gift taxes, certain excise taxes, and certain tax administration provisions of the Internal Revenue Code of 1986 (effective in 2006). Imposes a national sales tax (effective in 2006) equal to 15 percent of the gross payments for the use, consumption or enjoyment in the United States of any taxable property or service, whether produced or rendered within or without the United States. Allows certain exemptions from such tax, including exemptions for property or services purchased for a business purpose in an active trade or business or for export for use or consumption outside the United States. Sets forth provisions for the administration and collection of the tax and for credits and refunds. Allows for: (1) installment payments of tax resulting from the purchase of a principal residence; (2) a sales tax rebate for certain low-income families; and (3) compensating payments to certain persons on fixed incomes. Grants States the authority to administer and collect the sales tax and to remit tax proceeds to the Treasury. Prohibits the funding of the Internal Revenue Service after FY 2007. Establishes in the Department of Treasury: (1) an Excise Tax Bureau to administer any excise taxes not repealed by this Act; and (2) a Sales Tax Bureau to administer the national sales tax established by this Act. Directs the Social Security Administration to collect and administer employment and self-employment payroll taxes. Requires a two-thirds vote of the Members of the House of Representatives or the Senate to consider any legislation that raises any Federal sales tax rate or results in a reduction in Federal revenues.