Topic: Government Operations — Tax Administration
Subject: Economics and public finance
Date: 2015-03-04 00:00:00

(This measure has not been amended since the Senate agreed to the House amendment to the Senate amendment on October 30, 2015. The summary of that version is repeated here.)

Bipartisan Budget Act of 2015 

TITLE I--BUDGET ENFORCEMENT

(Sec. 101) This bill amends the Balanced Budget and Emergency Deficit Control Act of 1985 to increase the discretionary spending limits for FY2016 and FY2017.

The bill revises procedures for implementing the sequester of direct spending, which is required under current law and involves cuts that interact with discretionary spending levels. The bill requires the sequester to take place in FY2016 and FY2017 as if the amendments that this bill makes to the discretionary spending limits have not been made. It also adds an additional year to the sequester in FY2025 and adjusts the cuts required for Medicare.

(Direct spending, also known as mandatory spending, is spending provided by laws other than appropriations bills. Sequestration is a process of automatic, usually across-the-board spending reductions under which budgetary resources are permanently cancelled to enforce specific budget policy goals.)

The bill requires the discretionary spending limits in FY2016 and FY2017 to be increased by specified amounts for overseas contingency operations.

(Sec. 102) The chairman of the Senate Budget Committee must file for publication in the Congressional Record committee allocations, aggregate spending and revenue levels, and levels of revenues and outlays for Social Security consistent with this bill. The chairman may also include reserve funds contained in the FY2016 budget resolution that are extended by one year.

The bill provides that the allocations, aggregates, and levels submitted by the chairman are enforceable in the Senate as if they were included in a budget resolution conference agreement. The provisions in this section expire if Congress agrees to a budget resolution for FY2017.

TITLE II--AGRICULTURE

(Sec. 201) The bill amends the Federal Crop Insurance Act to require the Department of Agriculture (USDA) to renegotiate the Standard Reinsurance Agreement no later than December 31, 2016, and at least once every five years thereafter.

(The Standard Reinsurance Agreement is an agreement between USDA and the private companies that administer the federal crop insurance program. It specifies details such as administrative and operating expense reimbursements and risk sharing between USDA and the companies in the operation of the program.)

The bill establishes an 8.9% cap on the overall rate of return for insurance providers under the agreement, which is a decrease from the current negotiated rate of approximately 14.5%.

TITLE III--COMMERCE

(Sec. 301) The bill amends the Communications Act of 1934 to authorize the use of automated telephone equipment to call cellular telephones for the purpose of collecting debts owed to the U.S. government. The Federal Communications Commission must issue regulations implementing this section within nine months of enactment of this bill. The regulations may restrict the number and duration of the calls.

TITLE IV--STRATEGIC PETROLEUM RESERVE

 (Sec. 401) The Energy Policy and Conservation Act is amended to revise the requirement that the Department of Energy (DOE) transmit a detailed explanation to Congress regarding a test drawdown and sale or exchange of petroleum products from the Strategic Petroleum Reserve (SPR).

DOE shall notify Congress of the test at least 14 days before the date on which it is conducted, unless an emergency requires the test, in which case DOE must notify Congress as soon as possible.

The detailed description of the test DOE is currently required to submit to Congress must be submitted within 180 days after completion of the test.

The term "severe energy supply interruption" shall now include a national energy supply shortage resulting, or is likely to result, from an act of terrorism.

(Sec. 402) DOE shall within 180 days after enactment of this Act:

 complete a long-range strategic review of the SPR and submit to Congress a proposed action plan and implementation schedule specifying both near- and long-term roles of the SPR relative to U.S. energy and economic security; describe whether existing legal authorities governing SPR policies, configuration, and capabilities are adequate to ensure that the SPR can meet current and future U.S. energy and economic security objectives; identify SPR configuration and performance capabilities; recommend an action plan to achieve the optimal capacity, location, and composition of SPR petroleum products in addition to storage and distributional capabilities; and estimate the resources required to attain and maintain SPR long-term sustainability and operational effectiveness. (Sec. 403) For each of FY2018-FY2025 DOE shall draw down and sell from the SPR specified barrels of crude oil ranging from 5 million (FY2018) to 10 million barrels (FY2025).

 DOE shall not, however, draw down and sell crude oil in amounts that would limit presidential authority to sell the full amount of petroleum products authorized when necessary to prevent or reduce the adverse impact of severe domestic energy supply interruptions.

(Sec. 404) There is established in the Treasury the Energy Security and Infrastructure Modernization Fund for the deposit of SPR crude oil sales proceeds to provide for the construction, maintenance, repair, and replacement of SPR facilities.

To protect the U.S. economy from the impacts of emergency product supply disruptions, DOE shall establish an SPR modernization program, for which appropriations are authorized for FY2017-2020.

DOE authority to draw down and sell crude oil from the SPR under this section shall expire at the end of FY2020.

TITLE V--PENSIONS

(Sec. 501) This section amends the Employee Retirement Income Security Act of 1974 (ERISA) to increase the annual fixed rate premium payable to the Pension Benefits Guaranty Corporation by a single-employer plan for basic benefits to $69 in plan years beginning in 2017, $74 in plan years beginning in 2018, and $80 in plan years beginning after 2018. The variable rate premium for such plans increases by an additional $3 for plan years beginning in 2017 and by an additional $4 for plan years beginning in 2018 and 2019.

(Sec. 502) This section changes the due date for premium payments for plan years beginning in 2025 to the 15th day of the 9th calendar month beginning on or after the 1st day of the premium payment year.

(Sec. 503) This section changes criteria for mortality tables used by defined benefit pension plans for plan years beginning after 2015. The determination of whether a plan has credible mortality information shall be made in accordance with established actuarial credibility theory, which is materially different from current mortality rules under ERISA and Revenue Procedure 2007-37. A plan may use mortality tables that are adjusted from tables provided by the Department of the Treasury if such adjustments are based on a plan's experience.

(Sec. 504) This section amends the Internal Revenue Code and ERISA to adjust interest rates used to calculate minimum funding contributions to pension plans The tables provide for adjustments to interest rates so that they fall within a range based on average interest rates over a 25-year period. For plan years beginning after 2015, the range variance is 10% through 2020, 15% in 2021, 20% in 2022, 25% in 2023, and 30% in 2024 and subsequent plan years.

TITLE VI--HEALTH CARE

(Sec. 601) The bill amends title XVIII (Medicare) of the Social Security Act (SSAct) to: (1) mitigate 2016 increases to Medicare Part B premiums and deductibles for enrollees, and (2) authorize federal funding to offset the corresponding reduction in aggregate monthly premiums.

Under current law, the Centers for Medicare & Medicaid Services must annually determine the monthly actuarial rate upon which Part B premiums and deductibles are based. For 2016, the bill revises this methodology, effectively reducing increases to premiums and deductibles for certain enrollees in 2016. (Current law already protects Part B enrollees whose benefits are deducted from their Social Security benefits from premium increases that would result in a smaller net benefit from Social Security.)

This methodology shall also apply in 2017 if, as in 2016, there is no increase in monthly Social Security benefits.

(Sec. 602) The bill amends title XIX (Medicaid) of the SSAct to require manufacturers of generic drugs to join manufacturers of single-source or innovator drugs in paying rebates to state Medicaid programs for price increases over inflation.

(Sec. 603) The bill excludes certain hospital outpatient department services from the prospective payment system in which predetermined amounts form the basis for payment under Medicare. With specified exceptions, services are excluded from this system if they are furnished by a provider's off-campus outpatient department.

(Sec. 604) The bill amends the Fair Labor Standards Act of 1938 to repeal the requirement, established under the Patient Protection and Affordable Care Act, for large employers offering health benefit plans to automatically enroll full-time employees in such a plan. A large employer is one that has more than 200 full-time employees.

TITLE VII--JUDICIARY

Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015

(Sec. 701) This title amends the Federal Civil Penalties Inflation Adjustment Act of 1990 to require federal agencies that impose civil monetary penalties subject to inflation adjustments under the Adjustment Act to adjust the penalties for inflation annually instead of at least every four years.

The categories of penalties required to be adjusted for inflation under the Adjustment Act are expanded to include civil penalties under the Occupational Safety and Health Act of 1970 and the Social Security Act.

For all civil penalties adjusted for inflation under the Adjustment Act, federal agencies must make an initial adjustment after enactment of this bill by the percentage by which the Consumer Price Index (CPI) for October 2015 exceeds the CPI for the month of October of the calendar year during which the amount of such civil monetary penalty was established or adjusted under a provision of law other than this bill. The increase in penalties from the initial adjustment is prohibited from exceeding 150% of the amount of that penalty on the date of enactment of this bill.

An agency may adjust penalties by less than the required amount under an exception that applies to the first adjustment if: (1) the agency determines in a rulemaking with an opportunity for public comment that the adjustment would have a negative economic impact or social costs that outweigh the benefits, and (2) the Office of Management and Budget (OMB) concurs.

The annual inflation adjustment in subsequent years must be a cost-of-living adjustment based on any increases in the October CPI each year.

Inflation adjustment increases must be rounded to the nearest multiple of $1.

This section also requires: (1) the OMB to issue guidance to agencies regarding the implementation of adjustments, (2) agencies to include information about adjustments to civil monetary penalties in agency financial reports, and (3) the Government Accountability Office to submit an annual report assessing agency compliance.

(Sec. 702) This section rescinds and permanently cancels $1.5 billion of the funds deposited or available in the Crime Victims Fund under the Victims of Crime Act of 1984.

(Sec. 703) This section rescinds and permanently cancels $746 million of the amounts deposited in the Department of Justice Assets Forfeiture Fund.

TITLE VIII--SOCIAL SECURITY

Social Security Benefit Protection and Opportunity Enhancement Act of 2015 

Subtitle A--Ensuring Correct Payments and Reducing Fraud

(Sec. 811) The Social Security Administration (SSA) must expand Cooperative Disability Investigations (CDI) Units that investigate suspected fraud before benefits are awarded to cover all 50 States, the District of Columbia, Puerto Rico, Guam, the Northern Mariana Islands, the Virgin Islands, and American Samoa.

(Sec. 812) Title II (Old Age, Survivors and Disability Insurance) of the Social Security Act is amended to prohibit evidence submitted by unlicensed or sanctioned physicians and health care providers from being considered in making disability determinations.

(Sec. 813) A new felony for conspiracy to commit Social Security fraud is created. Penalties for individuals in a position of trust who defraud the SSA are increased. Individuals are disqualified from receiving benefits during a trial work period if they are assessed a civil monetary penalty for concealing work activity.

(Sec. 814) Prohibitions and penalties regarding the misuse of symbols, emblems, and names associated with Social Security and Medicare are applied to electronic and internet communications, and each internet viewing is treated as a separate offense.

(Sec. 815) The Balanced Budget and Emergency Deficit Control Act of 1985 is amended to revise the permissible uses and amounts of adjustments to discretionary spending limits for program integrity spending. The permissible uses are expanded to include CDI units, Special Assistant U.S. Attorneys who prosecute Social Security fraud, and work-related continuing disability reviews.

Subtitle B--Promoting Opportunity for Disability Beneficiaries

(Sec. 821) The authority for Disability Insurance (DI) demonstration projects is extended through 2021 and all projects must be terminated by the end of 2022.

(Sec. 822) The authority for DI demonstration projects is modified to: (1) revise congressional reporting and review requirements, and (2) require participation in the projects to be voluntary and include informed consent.

(Sec. 823) The SSA must carry out a pilot program to test the effect on beneficiary earnings of changes in how earnings are treated for the purpose of ongoing DI benefit eligibility. Under the demonstration, the existing "cash cliff" under which beneficiaries lose their entire benefit after exceeding the earnings threshold would be replaced by a benefit offset under which the DI benefit is reduced by $1 for every $2 of earnings in excess of a threshold.

(Sec. 824) The SSA may obtain, with beneficiary consent, data on beneficiary earnings from payroll providers through a data exchange. Individuals for whom the SSA obtains earnings data from these sources are exempt from the requirement to report their own earnings.

(Sec. 825) The SSA may simplify the process of evaluating a beneficiary's earnings derived from services by presuming that wages and salaries were earned in: (1) the month in which the services were performed for making a determination of initial entitlement on the basis of disability, and (2) the month in which the earnings were paid for any other purpose. These presumptions apply unless information is available that shows when the income was earned.

(Sec. 826) The SSA must permit DI beneficiaries to report their earnings electronically, including by telephone and Internet, based on the system that is currently available to Supplemental Security Income recipients.

Subtitle C--Protecting Social Security Benefits

(Sec. 831) Provisions in the Social Security Act related to deemed filing, dual entitlement, and benefit suspension are amended to prevent individuals from obtaining larger benefits than Congress intended.

(Sec. 832) In making an initial determination of disability, the SSA must make every reasonable effort to ensure that a qualified physician, psychiatrist, or psychologist has completed the medical portion of the case review.

(Sec. 833) Specified payroll tax revenues are reallocated to the Disability Insurance Trust Fund to pay benefits until 2022.

(Sec. 834) The SSA may verify certain financial information when an individual requests a waiver of an overpayment because they are without fault and unable to repay the funds.

Subtitle D--Relieving Administrative Burdens and Miscellaneous Provisions

(Sec. 841) Under current law, the Office of Personnel Management (OPM) must reduce disability payments made to a Federal Employment Retirement (FERS) annuitant who also receives Social Security disability benefits. The bill increases interagency coordination by permitting SSA to repay the OPM the amount of overpaid FERS benefits if the individual is eligible for DI and entitled to an award of past-due benefits. The overpaid amounts are deducted from the past-due Social Security payment.

(Sec. 842) The requirement that the SSA make determinations every five years relating to wage credits for military service prior to 1957 is eliminated after the 2010 determination.

(Sec. 843) Electronic certification to the Railroad Retirement Board is permitted for benefits payable to a divorced spouse of a railroad worker.

(Sec. 844) Technical and conforming changes are made to eliminate obsolete provisions from the Social Security Act.

(Sec. 845) The SSA must report to Congress on: (1) fraud prevention activities and improper payments, (2) work-related continuing disability reviews, and (3) overpayment waivers.

(Sec. 846) The SSA may request that OPM hold additional examinations for the purpose of hiring Administrative Law Judges as needed.

TITLE IX--TEMPORARY EXTENSION OF PUBLIC DEBT LIMIT

(Sec. 901) The public debt limit is suspended through March 15, 2017. On March 16, 2017, the limit is increased to accommodate obligations issued during the suspension period.

(Sec. 902) Adjustments to the debt limit for obligations during the suspension period are limited to obligations necessary to fund a commitment incurred by the federal government that required payment before March 16, 2017. The Department of the Treasury may not issue obligations during the suspension period to increase cash balances above normal operating balances.

TITLE X--SPECTRUM PIPELINE

Spectrum Pipeline Act of 2015

(Sec. 1004) This title requires the Department of Commerce to submit to the President and to the Federal Communications Commission (FCC) a report identifying 30 megahertz of electromagnetic spectrum to reallocate from federal use to: (1) nonfederal use, (2) shared federal and nonfederal use, or (3) a combination of such uses.

The President must then withdraw or modify the assignment to a federal government station of the identified spectrum.

By July 1, 2024, the FCC must begin competitive bidding auctions to grant new initial licenses for that spectrum.

(Sec. 1005) The National Telecommunications and Information Administration Organization Act is amended to make amounts available from the Spectrum Relocation Fund for the Office of Management and Budget (OMB) to pay federal entities for research and development activities to improve the efficiency and effectiveness of their spectrum use in order to make additional frequencies available for auction.

As a condition to the OMB paying a federal entity for such activities, the federal entity must have a plan: (1) approved by a technical panel within the National Telecommunications and Information Administration (NTIA), and (2) submitted by the OMB to the appropriate congressional committees for a period of 60 days.

(Sec. 1006) The FCC must coordinate with the NTIA to submit successive proposals to Congress by 2022 and by 2024 that identify additional spectrum to be assigned new licenses for nonfederal use. Each proposal must identify at least another 50 megahertz.

(Sec. 1007) For purposes of auctioning the 30 megahertz that Commerce identifies under this Act, the FCC's authority to grant licenses or permits is extended until September 30, 2025. The FCC's authority continues to expire on September 30, 2022, for other competitive bidding auctions.

(Sec. 1008) The FCC must submit to Congress, within three years after enactment of this Act, reports that analyze: (1) rules changes relating to frequencies between 3550 and 3650 megahertz, and (2) proposals to promote and identify additional spectrum bands that can be shared between incumbent uses and new licensed and unlicensed services under such rules. The FCC must also identify at least 1 gigahertz within a specified range for such use.

TITLE XI--REVENUE PROVISIONS RELATED TO TAX COMPLIANCE

(Sec. 1101) This section amends the Internal Revenue Code to revise rules for audits of large for-profit partnerships (partnerships with more than 100 partners). Existing audit rules for such partnerships are repealed and partnerships with fewer than 100 partners are granted an election to opt out of the provisions of this Act.

The new audit rules require that: (1) any adjustment to items of partnership income, gain, loss, deductions, or credits be determined at the partnership level, instead of for each individual partner; (2) each partner's return be consistent with the partnership return; (3) each partnership designate a partner or other person with a substantial presence in the United States as the partnership representative to act as the sole authority on behalf of the partnership; and (4) notice be given to the partnership and the partnership representative of any administrative proceeding initiated at the partnership level, of any proposed partnership adjustment resulting from such proceeding, and of any final partnership adjustment resulting from such proceeding.

The partnership may file a petition for readjustment of any partnership item within 90 days after the date on which a notice of a final partnership adjustment is mailed to the partnership. The petition may be filed with the U.S. Tax Court, a U.S. district court for the district in which the partnership's principal place of business is located, or the U.S. Court of Claims.

The period for making adjustments to a partnership return is limited to the date that is three years (six years in the case of a substantial omission of income) after the latest of the date on which the partnership return was filed, the return due date for the taxable year, or the date on which the partnership filed an administrative adjustment request. No limit applies in the case of a false or fraudulent partnership return or if no return is filed.

(Sec. 1102) This section sets forth a rule with respect to partnership interests created by gift to provide that in the case of a capital interest in a partnership in which capital is a material income-producing factor, the determination of whether a person is a partner with respect to such interest is made without regard to whether such interest was derived by gift from any other person. This new rule applies to partnership taxable years beginning on or after January 1, 2015.

TITLE XII--DESIGNATION OF SMALL HOUSE ROTUNDA

This title designates the first floor of the area of the House of Representatives wing of the U.S. Capitol known as the small House rotunda as the "Freedom Foyer."