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PROBLEM: SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Budget Surplus Dividend Act of 
1997''.

SEC. 2. 50 PERCENT OF FEDERAL BUDGET SURPLUS TO REIMBURSE EMPLOYERS AND 
              EMPLOYEES FOR A PORTION OF THEIR SOCIAL SECURITY TAXES.

    (a) In General.--Subpart C of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 (relating to refundable credits) 
is amended by redesignating section 35 as section 36 and by inserting 
after section 34 the following new section:

``SEC. 35. CREDIT FOR PORTION OF SOCIAL SECURITY TAXES.

    ``(a) Allowance of Credit.--In the case of a taxable year to which 
this section applies, there shall be allowed as a credit against the 
tax imposed by this subtitle for the taxable year an amount equal to 
the applicable percentage of the taxpayer's social security taxes for 
the taxable year.
    ``(b) Taxable Years to Which Section Applies.--This section shall 
apply to any taxable year beginning in the first calendar year 
beginning after a fiscal year if there is a Federal budget surplus for 
such fiscal year of more than $1,000,000,000.
    ``(c) Applicable Percentage.--For purposes of this section--
            ``(1) In general.--The term `applicable percentage' means--
                    ``(A) the base percentage with respect to so much 
                of the taxpayer's social security taxes as does not 
                exceed $3,000, and
                    ``(B) the phasedown percentage with respect to so 
                much of the taxpayer's social security taxes as exceeds 
                $3,000.
            ``(2) Base percentage.--The term `base percentage' means, 
        for taxable years beginning in a calendar year, the percentage 
        which the Secretary estimates will result in a reduction of 
        revenues to the Treasury by reason of this section for such 
        taxable year equal to 50 percent of the Federal budget surplus 
        for the most recent fiscal year ending before such calendar 
        year. Proper adjustments shall be made in the percentage 
        determined under the preceding sentence with respect to any 
        subsequent fiscal year to the extent that prior estimates were 
        in excess of or less than the proper percentage.
            ``(3) Phasedown percentage.--The term `phasedown 
        percentage' means the base percentage reduced (but not below 
        zero) by the number of percentage points which bears the same 
        ratio to the base percentage as--
                    ``(A) the excess of the taxpayer's social security 
                taxes over $3,000 bears to
                    ``(B) the excess of the maximum social security 
                taxes over $3,000.
            ``(4) Maximum social security taxes.--The term `maximum 
        social security taxes' means the amount which would be the 
        social security taxes of the taxpayer if the amount on which 
        such taxes are determined were equal to the maximum amount of 
        remuneration which may be taken into account under section 
        3101(a).
            ``(5) Special rules.--
                    ``(A) Dollar limitations on per employee basis.--
                The dollar limitations in paragraphs (1) and (3) shall 
                be applied on a per employee basis.
                    ``(B) Self-employed individuals.--Paragraphs (1) 
                and (3) shall be applied by substituting `$6,000' for 
                `$3,000' each place it appears in the case of the taxes 
                referred to in subparagraph (C) or (D) of subsection 
                (d)(1).
    ``(d) Social Security Taxes.--For purposes of this section--
            ``(1) In general.--The term `social security taxes' means, 
        with respect to any taxpayer for any taxable year--
                    ``(A) the taxes imposed by sections 3101 and 
                3201(a) (relating to taxes on employees) on amounts 
                received by the taxpayer during the calendar year in 
                which the taxable year begins,
                    ``(B) the taxes imposed by sections 3111 and 
                3221(a) (relating to taxes on employers) on amounts 
                paid by the taxpayer during the calendar year in which 
                the taxable year begins,
                    ``(C) the taxes imposed by section 1401 on the 
                self-employment income of the taxpayer for the taxable 
                year, and
                    ``(D) the taxes imposed by section 3211(a)(1) on 
                amounts received by the taxpayer during the calendar 
                year in which the taxable year begins.
            ``(2) Coordination with special refund of social security 
        taxes.--The term `social security taxes' shall not include any 
        taxes to the extent the taxpayer is entitled to a special 
        refund of such taxes under section 6413(c).
            ``(3) Special rule.--Any amounts paid pursuant to an 
        agreement under section 3121(l) (relating to agreements entered 
        into by American employers with respect to foreign affiliates) 
        which are equivalent to the taxes referred to in paragraph 
        (1)(A) shall be treated as taxes referred to in such 
        paragraph.''
    (b) Clerical Amendment.--The table of sections for subpart C of 
part IV of subchapter A of chapter 1 of such Code is amended by 
striking the item relating to section 35 and inserting the following:

                              ``Sec. 35. Credit for portion of social 
                                        security taxes.
                              ``Sec. 36. Overpayments of tax.''
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1997.

SEC. 3. APPROPRIATION TO USE 25 PERCENT OF FEDERAL BUDGET SURPLUS TO 
              REDUCE OUTSTANDING PUBLIC DEBT.

    There is hereby appropriated for the first fiscal year following 
each fiscal year for which there is a Federal budget surplus an amount 
equal to 25 percent of such surplus for purpose of paying at maturity, 
or to redeem or buy before maturity, obligations of the Government 
included in the public debt. An obligation of the Government that is 
paid, redeemed, or bought with funds appropriated by the preceding 
sentence shall be canceled and retired and may not be reissued.

SEC. 4. USE 25 PERCENT OF FEDERAL BUDGET SURPLUS TO INCREASE NONDEFENSE 
              DISCRETIONARY SPENDING LIMITS.

    For the first fiscal year following each fiscal year for which 
there is a Federal budget surplus, the Director of the Office of 
Management and Budget shall increase (on a pro rata basis between the 
applicable nondefense categories for that fiscal year) the 
discretionary spending limit for new budget authority under section 
251(c) of the Balanced Budget and Emergency Deficit Control Act of 1985 
by an amount equal to 25 percent of such surplus and shall adjust the 
outlays flowing from that budget authority accordingly.

SOLUTION: Budget Surplus Dividend Act of 1997 - Amends the Internal Revenue Code to allocate credits to taxpayers for social security taxes, during any year in which there is a Federal budget surplus of more than $1 billion, so as to utilize 50 percent of such surplus.  Requires that, during any such year, the remainder of such surplus shall be split and used to:  (1) reduce the outstanding public debt; and (2) increase nondefense discretionary spending limits.

PROBLEM: SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Federal Courts of Appeals 
Modernization Act''.

SEC. 2. ESTABLISHMENT.

    There is established a Commission on Structural Alternatives for 
the Federal Courts of Appeals (in this Act referred to as the 
``Commission'').

SEC. 3. MEMBERSHIP.

    (a) Composition.--The Commission shall be composed of 5 members who 
shall be appointed by the Chief Justice of the United States.
    (b) Appointment.--The members of the Commission shall be appointed 
not later than 30 days after the date of enactment of this Act.
    (c) Vacancy.--Any vacancy in the Commission shall be filled in the 
same manner as the original appointment.
    (d) Chair.--The Commission shall elect a chair and vice chair from 
among its members.
    (e) Quorum.--Three members of the Commission shall constitute a 
quorum.

SEC. 4. DUTIES.

    The Commission shall--
            (1) study the present division of the United States courts 
        of appeals, with particular references to the United States 
        Court of Appeals for the Ninth Circuit; and
            (2) submit to the President and Congress a report on the 
        recommendations of the Commission with respect to changes in 
        circuit boundaries or structure as may be appropriate for the 
        expeditious and effective disposition of the caseload of the 
        United States courts of appeals, consistent with fundamental 
        concepts of fairness and due process.

SEC. 5. COMMISSION PERSONNEL MATTERS.

    (a) Compensation of Members.--Each member of the Commission who is 
not an officer or employee of the Federal Government shall be 
compensated at a rate equal to $300 for each day (including travel 
time) during which such member is engaged in the performance of the 
duties of the Commission. All members of the Commission who are 
officers or employees of the United States shall serve without 
compensation in addition to that received for their services as 
officers or employees of the United States.
    (b) Travel Expenses.--Each member of the Commission shall be 
allowed travel expenses, including per diem in lieu of subsistence, at 
rates not greater than those described in section 456 of title 28, 
United States Code.

SEC. 6. STAFF.

    (a) Executive Director.--The Commission may appoint an executive 
director who shall be compensated at a rate not greater than the daily 
equivalent of the annual rate of basic pay prescribed for a position at 
GS-15 of the General Schedule for each day (including travel time) 
during which the executive director is engaged in the performance of 
the duties of the Commission.
    (b) Staff.--The Executive Director, with the approval of the 
Commission, may appoint and fix the compensation of such additional 
personnel as the Executive Director determines necessary, without 
regard to the provisions of title 5, United States Code, governing 
appointments in the competitive service, and without regard to the 
provisions of chapter 51 and subchapter III of chapter 53 of such title 
relating to classification and General Schedule pay rates, except that 
a rate of pay fixed under this subsection may not exceed the annual 
maximum rate of basic pay for a position above GS-15 of the General 
Schedule under section 5108 of title 5, United States Code.
    (c) Experts and Consultants.--The Executive Director may procure by 
contract the temporary or intermittent services of experts or 
consultants in accordance with section 3109 of title 5, United States 
Code, at rates for individuals that are not greater than the daily 
equivalent of the annual rate of basic pay for a comparable position 
paid under the General Schedule.
    (d) Services.--The Administrative Office of the United States 
Courts shall provide administrative services, including financial and 
budgeting services, to the Commission on a reimbursable basis. The 
Federal Judicial Center shall provide necessary research services to 
the Commission on a reimbursable basis.

SEC. 7. INFORMATION.

    The Commission is authorized to request from any department, 
agency, or independent instrumentality of the United States any 
information and assistance the Commission determines necessary to carry 
out its functions under this Act. Each such department, agency, and 
independent instrumentality is authorized to provide such information 
and assistance to the extent permitted by law when requested by the 
Chair of the Commission.

SEC. 8. STUDY AND REPORT.

    (a) Study.--Not later than the 10-month period beginning on the 
date on which a quorum of the Commission is present, the Commission 
shall conclude a study on the issues described in section 4(1).
    (b) Report.--Not later than 60 days after the date on which the 
period described in subsection (a) expires, the Commission shall submit 
to the President and Congress the report described in section 4(1).

SEC. 9. TERMINATION.

    The Commission shall terminate 90 days after the Commission submits 
the report described in section 8(b).

SEC. 10. AUTHORIZATION OF APPROPRIATIONS.

    There are authorized to be appropriated such sums as are necessary 
not to exceed $1,000,000 to carry out this Act, to remain available 
until expended.

SOLUTION: Federal Courts of Appeals Modernization Act This bill establishes a Commission on Structural Alternatives for the Federal Courts of Appeals to: (1) study the present division of the U.S. courts of appeals, with particular references to the U.S. Court of Appeals for the Ninth Circuit; and (2) submit to the President and Congress recommendations for changes in circuit boundaries or structure for the expeditious and effective disposition of the caseload of such courts. The commission shall be composed of five members appointed by the Chief Justice of the United States.

PROBLEM: SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Savings Advancement and Enhancement 
(SAVE) Act of 1998''.

SEC. 2. EXEMPTION OF CERTAIN INTEREST AND DIVIDEND INCOME FROM TAX.

    (a) In General.--Part III of subchapter B of chapter 1 of the 
Internal Revenue Code of 1986 (relating to amounts specifically 
excluded from gross income) is amended by inserting after section 115 
the following new section:

``SEC. 116. PARTIAL EXCLUSION OF DIVIDENDS AND INTEREST RECEIVED BY 
              INDIVIDUALS.

    ``(a) Exclusion From Gross Income.--Gross income does not include 
the sum of the amounts received during the taxable year by an 
individual as--
            ``(1) dividends from domestic corporations, or
            ``(2) interest.
    ``(b) Limitations.--
            ``(1) Maximum amount.--The aggregate amount excluded under 
        subsection (a) for any taxable year shall not exceed $250 ($500 
        in the case of a joint return).
            ``(2) Limitation based on taxable income.--No exclusion 
        from gross income shall be allowed under this section for an 
        individual for a taxable year if the individual has any amount 
        of taxable income taxed at the rate of 39.6 percent for the 
        taxable year.
            ``(3) Certain dividends excluded.--Subsection (a)(1) shall 
        not apply to any dividend from a corporation which, for the 
        taxable year of the corporation in which the distribution is 
        made, or for the next preceding taxable year of the 
        corporation, is a corporation exempt from tax under section 501 
        (relating to certain charitable, etc., organization) or section 
        521 (relating to farmers' cooperative associations).
    ``(c) Interest.--For purposes of this section, the term `interest' 
means--
            ``(1) interest on deposits with a bank (as defined in 
        section 581),
            ``(2) amounts (whether or not designated as interest) paid 
        in respect of deposits, investment certificates, or 
        withdrawable or repurchasable shares, by--
                    ``(A) a mutual savings bank, cooperative bank, 
                domestic building and loan association, industrial loan 
                association or bank, or credit union, or
                    ``(B) any other savings or thrift institution which 
                is chartered and supervised under Federal or State law,
        the deposits or accounts in which are insured under Federal or 
        State law or which are protected and guaranteed under State 
        law,
            ``(3) interest on--
                    ``(A) evidences of indebtedness (including bonds, 
                debentures, notes, and certificates) issued by a 
                domestic corporation in registered form, and
                    ``(B) to the extent provided in regulations 
                prescribed by the Secretary, other evidences of 
                indebtedness issued by a domestic corporation of a type 
                offered by corporations to the public,
            ``(4) interest on obligations of the United States, a 
        State, or a political subdivision of a State (not excluded from 
        gross income of the taxpayer under any other provision of law), 
        and
            ``(5) interest attributable to participation shares in a 
        trust established and maintained by a corporation established 
        pursuant to Federal law.
    ``(d) Special Rules.--For purposes of this section--
            ``(1) Distributions from regulated investment companies and 
        real estate investment trusts.--Subsection (a) shall apply with 
        respect to distributions by--
                    ``(A) regulated investment companies to the extent 
                provided in section 854(c), and
                    ``(B) real estate investment trusts to the extent 
                provided in section 857(c).
            ``(2) Distributions by a trust.--For purposes of subsection 
        (a), the amount of dividends and interest properly allocable to 
a beneficiary under section 652 or 662 shall be deemed to have been 
received by the beneficiary ratably on the same date that the dividends 
and interest were received by the estate or trust.
            ``(3) Certain nonresident aliens ineligible for 
        exclusion.--In the case of a nonresident alien individual, 
        subsection (a) shall apply only--
                    ``(A) in determining the tax imposed for the 
                taxable year pursuant to section 871(b)(1) and only in 
                respect of dividends and interest which are effectively 
                connected with the conduct of a trade or business 
                within the United States, or
                    ``(B) in determining the tax imposed for the 
                taxable year pursuant to section 877(b).''.
    (b) Conforming Amendments.--
            (1) The table of sections for part III of subchapter B of 
        chapter 1 of such Code is amended by inserting after the item 
        relating to section 115 the following new item:

                              ``Sec. 116. Partial exclusion of 
                                        dividends and interest received 
                                        by individuals.''.
            (2) Paragraph (2) of section 265(a) of such Code is amended 
        by inserting before the period at the end the following: ``, or 
        to purchase or carry obligations or shares, or to make 
        deposits, to the extent the interest thereon is excludable from 
gross income under section 116''.
            (3) Subsection (c) of section 584 of such Code is amended 
        by adding at the end the following new flush sentence:
``The proportionate share of each participant in the amount of 
dividends or interest received by the common trust fund and to which 
section 116 applies shall be considered for purposes of such section as 
having been received by such participant.''.
            (4) Subsection (a) of section 643 of such Code is amended 
        by redesignating paragraph (7) as paragraph (8) and by 
        inserting after paragraph (6) the following new paragraph:
            ``(7) Dividends or interest.--There shall be included the 
        amount of any dividends or interest excluded from gross income 
        pursuant to section 116.''.
            (5) Section 854 of such Code is amended by adding at the 
        end the following new subsection:
    ``(c) Treatment Under Section 116.--
            ``(1) In general.--For purposes of section 116, in the case 
        of any dividend (other than a dividend described in subsection 
        (a)) received from a regulated investment company which meets 
        the requirements of section 852 for the taxable year in which 
        it paid the dividend--
                    ``(A) the entire amount of such dividend shall be 
                treated as a dividend if the sum of the aggregate 
                dividends and the aggregate interest received by such 
                company during the taxable year equals or exceeds 75 
                percent of its gross income, or
                    ``(B) if subparagraph (A) does not apply, there 
                shall be taken into account under section 116 only the 
                portion of such dividend which bears the same ratio to 
                the amount of such dividend as the sum of the aggregate 
                dividends received and aggregate interest received 
                bears to gross income.
        For purposes of the preceding sentence, gross income and 
        aggregate interest received shall each be reduced by so much of 
        the deduction allowable by section 163 for the taxable year as 
        does not exceed aggregate interest received for the taxable 
        year.
            ``(2) Notice to shareholders.--The amount of any 
        distribution by a regulated investment company which may be 
        taken into account as a dividend for purposes of the exclusion 
        under section 116 shall not exceed the amount so designated by 
        the company in a written notice to its shareholders mailed not 
        later than 60 days after the close of its taxable year.
            ``(3) Definitions.--For purposes of this subsection--
                    ``(A) Gross income.--The term `gross income' does 
                not include gain from the sale or other disposition of 
                stock or securities.
                    ``(B) Aggregate dividends.--The term `aggregate 
                dividends' includes only dividends received from 
                domestic corporations other than dividends described in 
                section 116(b)(2). In determining the amount of any 
                dividend for purposes of this subparagraph, the rules 
                provided in section 116(d)(1) (relating to certain 
                distributions) shall apply.
                    ``(C) Interest.--The term `interest' has the 
                meaning given such term by section 116(c).''.
            (6) Subsection (c) of section 857 of such Code is amended 
        to read as follows:
    ``(c) Limitations Applicable to Dividends Received From Real Estate 
Investment Trusts.--
            ``(1) In general.--For purposes of section 116 (relating to 
        an exclusion for dividends and interest received by 
        individuals) and section 243 (relating to deductions for 
        dividends received by corporations), a dividend received from a 
        real estate investment trust which meets the requirements of 
        this part shall not be considered as a dividend.
            ``(2) Treatment as interest.--For purposes of section 116, 
        in the case of a dividend (other than a capital gain dividend, 
        as defined in subsection (b)(3)(C)) received from a real estate 
        investment trust which meets the requirements of this part for 
        the taxable year in which it paid the dividend--
                    ``(A) such dividend shall be treated as interest if 
                the aggregate interest received by the real estate 
                investment trust for the taxable year equals or exceeds 
                75 percent of its gross income, or
                    ``(B) if subparagraph (A) does not apply, the 
                portion of such dividend which bears the same ratio to 
                the amount of such dividend as the aggregate interest 
                received bears to gross income shall be treated as 
                interest.
            ``(3) Adjustments to gross income and aggregate interest 
        received.--For purposes of paragraph (2)--
                    ``(A) gross income does not include the net capital 
                gain,
                    ``(B) gross income and aggregate interest received 
                shall each be reduced by so much of the deduction 
                allowable by section 163 for the taxable year (other 
                than for interest on mortgages on real property owned 
                by the real estate investment trust) as does not exceed 
                aggregate interest received by the taxable year, and
                    ``(C) gross income shall be reduced by the sum of 
                the taxes imposed by paragraphs (4), (5), and (6) of 
                section 857(b).
            ``(4) Interest.--The term `interest' has the meaning given 
        such term by section 116(c).
            ``(5) Notice to shareholders.--The amount of any 
        distribution by a real estate investment trust which may be 
        taken into account as interest for purposes of the exclusion 
        under section 116 shall not exceed the amount so designated by 
        the trust in a written notice to its shareholders mailed not 
        later than 60 days after the close of its taxable year.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1997.

SOLUTION:
Savings Advancement and Enhancement (SAVE) Act of 1998 - Amends the Internal Revenue Code to exclude from individual gross income up to $250 ($500 for joint filers) of the sum of dividends from domestic corporations or interest.    Sets forth related provisions with respect to:  (1) distributions from regulated investment companies and real estate investment trusts; and (2) nonresident aliens.