Social Security Amendments of 1983
PL 98-21 (H.R.1900), enacted 04/20/1983

PUBLIC LAW 98-21—APR. 20, 1983 
97 STAT. 65 
Public Law 98-21 
98th Congress 
An Act 
To assure the solvency of the Social Security Trust Funds, to reform the medicare 
^pj. 20 1983 
reimbursement of hospitals, to extend the Federal supplemental compensation 
prc^am, and for other purposes. 
[H.R. 1900] 
Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled. 
Social Security 
Amendments of 
1983. 
SHORT TITLE 
SECTION 1. This Act, with the following table of contents, may be 42 use 1305 
cited as the "Social Security Amendments of 1983". 
"o^-
T
A
B
L
E OF CONTENTS 
Sec. 1. Short title. 
TITLE I-PROVISIONS AFFECTING THE FINANCING OF THE SOCIAL 
SECURITY SYSTEM 
PART A—COVERAGE 
Sec. 101. Coverage of newly hired Federal employees. 
Sec. 102. Coverage of employees of nonprofit organizations. 
Sec. 103. Duration of agreements for coverage of State and local employees. 
PART B—COMPUTATION OF BENEFIT AMOUNTS 
Sec. 111. Shift of cost-of-living adjustments to calendar year basis. 
Sec. 112. Cost-of-living increases to be based on either wages or prices (whichever is 
lower) when balance in OASDI trust funds falls below specified level. 
Sec. 113. Elimination of windfall benefits for individuals receiving pensions from 
noncovered employment. 
Sec. 114. Increase in old-age insurance benefit amounts on account of delayed 
retirement. 
PART C—REVENUE PROVISIONS 
Sec. 121. Taxation of social security and tier 1 railroad retirement benefits. 
Sec. 122. Credit for the elderly and the permanently and totally disabled. 
Sec. 123. Acceleration of increases in FICA taxes; 1984 employee tax credit. 
Sec. 124. Taxes on self-employment income; credit against such taxes for years 
before 1990; deduction of such taxes for years after 1989. 
Sec. 125. Treatment of certain faculty practice plans. 
Sec. 126. Allocations to disability insurance trust fund. 
PART D—BENEFITS FOR CERTAIN SURVIVING, DIVORCED, AND DISABLED SPOUSES 
Sec. 131. Benefits for surviving divorced spouses and disabled widows and widowers 
who remarry. 
Sec. 132. Entitlement to divorced spouse's benefits without regard to entitlement of 
insured individual to benefits; exemption of divorced spouse's benefits 
from deduction on account of work. 
Sec. 133. Indexing of deferred surviving spouse's benefits to recent wage levels. 
Sec. 134. Limitation on benefit reduction for early retirement in case of disabled 
widows and widowers. 
PART E—MECHANISMS TO ASSURE CONTINUED BENEFIT PAYMENTS IN UNEXPECTEDLY 
ADVERSE CONDITIONS 
Sec. 141. Normalized crediting of social security taxes to trust funds. 
Sec. 142. Interfund borrowing extension. 
1 1 - 1 9 4 O
85 — 4 : QL 3 
97 STAT. 66 
PUBLIC LAW 98-21—APR. 20, 1983 
Sec. 143. Recommendations by Board of Trustees to remedy inadequate balances in 
the Social Security Trust Funds. 
PART F—OTHER FINANCING AMENDMENTS 
Sec. 151. Financing of noncontributory military wage credits. 
Sec. 152. Accounting for certain unnegotiated checks for benefits under the social 
security program. 
Sec. 153. Float periods. 
Sec. 154. Trust fund trustees' reports. 
TITLE II—ADDITIONAL PROVISIONS RELATING TO LONG-TERM FINANCING 
OF THE SOCIAL SECURITY SYSTEM 
Sec. 201. Increase in retirement age. 
TITLE III—MISCELLANEOUS AND TECHNICAL PROVISIONS 
PART A—ELIMINATION OF GENDER-BASED DISTINCTIONS 
Sec. 301. Divorced husbands. 
Sec. 302. Remarriage of surviving spouse before age of eligibility. 
Sec. 303. Illegitimate children. 
Sec. 304. Transitional insured status. 
Sec. 305. Equalization of benefits under section 228. 
Sec. 306. Father's insurance benefits. 
Sec. 307. Effect of marriage on childhood disability benefits and on other depend-
ents' or survivors' benefits. 
Sec. 308. Credit for certain military service. 
Sec. 309. Conforming amendments. 
Sec. 310. Effective date of part A. 
PART B—COVERAGE 
Sec. 321. Coverage of employees of foreign affiliates of American employers. 
Sec. 322. Extension of coverage by international social security agreement. 
Sec. 323. Treatment of certain service performed outside the United States. 
Sec. 324. Amount received under certain deferred compensation and salary reduc-
tion arrangements treated as wages for FICA taxes. 
Sec. 325. Effect of changes in names of State and local employee groups in Utah. 
Sec. 326. Effective dates of international social security agreements. 
Sec. 327. Codification of Rowan decision with respect to meals and lodging. 
Sec. 328. Treatment of contributions under simplified employee pensions. 
PART C—OTHER AMENDMENTS 
Sec. 331. Technical and conforming amendments to maximum family benefit provi-
sions. 
Sec. 332. Relaxation of insured status requirements for certain workers previously 
entitled to a period of disability. 
Sec. 333. Protection of benefits of illegitimate children of disabled beneficiaries. 
Sec. 334. One-month retroactivity of widow's and widower's insurance benefits. 
Sec. 335. Nonassignability of benefits. 
Sec. 336. Use of death certificates to prevent erroneous benefit payments to de-
ceased individuals. 
Sec. 337. Public pension offset. 
Sec. 338. Study concerning the establishment of the Social Security Administration 
as an independent agency. 
Sec. 339. Limitation on payments to prisoners. 
Sec. 340. Requirement of previous United States residency for alien dependents and 
survivors living outside the United States. 
Sec. 341. Addition of public members to Trust Fund Board of Trustees. 
Sec. 342. Payment schedule by State and local governments. 
Sec. 343. Earnings sharing implementation report. 
Sec. 344. Veterans' Administration reorganization. 
Sec. 345. Social security cards. 
• Sec. 346. Budgetary treatment of Trust Fund operations. 
Sec. 347. Liberalization of earnings test. 
TITLE IV—SUPPLEMENTAL SECURITY INCOME BENEFITS 
Sec. 401. Increase in Federal SSI benefit standard. 
Sec. 402. Adjustments in Federal SSI pass-through provisions. 
PUBLIC LAW 98-21—APR. 20, 1983 
97 STAT. 67 
Sec. 403. SSI eligibility for temporaiy residents of emeigenc^ shelters 
for 
the home-
less. 
Sec. 404. Disre&xding of emergency and other in-kind assistance provided by non-
profit oiganizations. 
Sec. 405. Notification r^arding SSI. 
TITLE V-UNEMPLOYMENT COMPENSATION PROVISIONS 
PART A—FEDERAL SUPPI£MENTAL CkoiPENSATiON 
Sec. 501. Extension of program. 
Sec. 502. Number of weeks for which compensation payable. 
Sec. 503. Effective date. 
Sec. 504. Training. 
Sec. 505. Coordination with trade readjustment program. 
PART B—PROVISIONS RELATING TO INTEREST AND CREDIT REDUCTIONS 
Sec. 511. Deferral of interest. 
Sec. 512. Cap on credit reduction. 
Sec. 513. Average employer contribution rate. 
Sec. 514. Date for payment of interest. 
Sec. 515. Penalty for failure to pay interest. 
PART C—MISCELLANEOUS PROVISIONS 
Sec. 521. Treatment of employees providing services to educational institutions. 
Sec. 522. Extended benefits for individuals who are hospitalized or on jury duty. 
Sec. 523. Voluntary health insurance programs permitted. 
Sec. 524. Treatment of certain or^izations retroactively determined to be de-
scribed in section 501(cK3) of the Internal Revenue Code of 1954. 
TITLE VI-PROSPECnVE PAYMENTS FOR MEDICARE INPATIENT 
HOSPITAL SERVICES 
Sec. 601. Medicare payments for inpatient hospital services on the basis of prospec-
tive rates. 
Sec. 602. Conforming amendments. 
Sec. 603. Reports, experiments, and demonstration projects. 
Sec. 604. Effective dates. 
Sec. 605. Delay in provision relating to hospital-based skilled nursing facilities. 
Sec. 606. Shift in medicare premiums to comcide with cost-of-livii^ increase. 
Sec. 607. Section 1122 amendments. 
TITLE I—PROVISIONS AFFECTING THE FI-
NANCING OF THE SOCIAL SECURITY 
SYSTEM 
PART A—COVERAGE 
COVERAGE OF NEWLY HIRED FEDERAL EMPLOYEES 
SEC. 101. (aXD Section 210(a) of the Social Security Act is amended 42 use 4io. 
by striking out paragraphs (5) and (6) and inserting in lieu thereof 
the foUowing: 
"(5) Service performed in the employ of the United States or 
any instrumentality of the United States, if such service— 
"(A) would be excluded from the term 'employment' for 
purposes of this title if the provisions of paragraphs (5) and 
(6) of this subsection as in effect in January 1983 had 
remained in effect, and 
"(B) is performed by an individual who (i) has been 
continuously in the employ of the United States or an 
instrumentality thereof since December 31, 1983 (and for 
this purpose an individual who returns to the performance 
97 STAT. 68 
PUBLIC LAW 98-21—APR. 20, 1983 
of such service after being separated therefrom following a 
previous period of such service shall nevertheless be consid-
ered upon such return as having been continuously in the 
employ of the United States or an instrumentality thereof, 
regardless of whether the period of such separation began 
before, on, or after December 31, 1983, if the period of such 
separation does not exceed 365 consecutive days), or (ii) is 
receiving an annuity from the Civil Service Retirement and 
Disability Fund, or benefits (for service as an employee) 
under another retirement system established by a law of 
the United States for employees of the Federal Government 
(other than for members of the uniformed services); 
except that this paragraph shall not apply with respect to— 
"(i) service performed as the President or Vice President 
of the United States, 
"(ii) service performed— 
"(I) in a position placed in the Executive Schedule 
under sections 5312 through 5317 of title 5, United 
States Code, 
"(II) as a noncareer appointee in the Senior Execu-
tive Service or a noncareer member of the Senior For-
eign Service, or 
"(III) in a position to which the individual is 
appointed by the President (or his designee) or the Vice 
President under section 105(a)(1), 106(a)(1), or 107 (a)(1) 
or Oo)(l) of title 3, United States Code, if the maximum 
rate of basic pay for such position is at or above the 
rate for level V of the Executive Schedule, 
"(iii) service performed as the Chief Justice of the United 
States, an Associate Justice of the Supreme Court, a judge 
of a United States court of appeals, a judge of a United 
States district court (including the district court of a terri-
tory), a judge of the United States Claims Court, a judge of 
the United States Court of International Trade, a judge of 
the United States Tax Court, a United States magistrate, or 
a referee in bankruptcy or United States bankruptcy judge, 
"(iv) service performed as a Member, Delegate, or Resi-
dent Commissioner of or to the Congress, or 
"(v) any other service in the legislative branch of the 
Federal Government if such service is performed by an 
individual who, on December 31, 1983, is not subject to 
5 use 8331. 
subchapter III of chapter 83 of title 5, United States Code; 
"(6) Service performed in the employ of the United States or 
any instrumentality of the United States if such service is 
performed— 
"(A) in a penal institution of the United States by an 
inmate thereof; 
"(B) by any individual as an employee included under 
section 5351(2) of title 5, United States Code (relating to 
certain interns, student nurses, and other student employ-
ees of hospitals of the Federal Government), other than as a 
medical or dental intern or a medical or dental resident in 
training; or 
"(C) by any individual as an employee serving on a 
temporary basis in case of fire, storm, earthquake, flood, or 
other similar emergency;". 
PUBLIC LAW 98-21—APR. 20, 1983 
97 STAT. 69 
(2) Section 210(p) of such Act is amended by striking out "provi- 96 stat. 560. 
sions of—" and all that follows and inserting in lieu thereof "provi- ^2 use 4io. 
sions of subsection (a)(5).". 
(b)(1) Section 3121(b) of the Internal Revenue Code of 1954 is 26 use 3121. 
amended by striking out paragraphs (5) and (6) and inserting in lieu 
thereof the following: 
"(5) service performed in the employ of the United States or 
any instrumentality of the United States, if such service— 
"(A) would be excluded from the term 'employment' for 
purposes of this title if the provisions of paragraphs ^5; and 
(6) of this subsection as in effect in January 1983 had 
remained in effect, and 
"(B) is performed by an individual who (i) has been 
continuously in the employ of the United States or an 
instrumentality thereof since December 31, 1983 (and for 
this purpose an individual who returns to the performance 
of such service after being separated therefrom following a 
previous period of such service shall nevertheless be consid-
ered upon such return as having been continuously in the 
employ of the United States or an instrumentality thereof, 
regardless of whether the period of such separation began 
before, on, or after December 31,1983, if the period of such 
separation does not exceed 365 consecutive days), or (ii) is 
receiving an annuity from the Civil Service Retirement and 
Disability Fund, or benefits (for service as an employee) 
under another retirement system established by law of the 
United States for employees of the Federal Government 
(other than for members of the uniformed services); 
except that this paragraph shall not apply with respect to— 
"(i) service performed as the President or Vice President 
of the United States, 
"(ii) service performed— 
"(I) in a position placed in the Executive Schedule 
under sections 5312 through 5317 of title 5, United 
States Code, 
"(II) as a noncareer appointee in the Senior Execu 
tive Service or a noncareer member of the Senior For 
eign Service, or 
"(III) in a position to which the individual is 
appointed by the President (or his designee) or the Vice 
President under section 105(a)(1), 106(a)(1), or 107 (a)(1) 
or (b)(1) of title 3, United States Code, if the maximum 
rate of basic pay for such position is at or above the 
rate for level V of the Executive Schedule, 
"(iii) service performed as the Chief Justice of the United 
States, an Associate Justice of the Supreme Court, a judge 
of a United States court of appeals, a judge of a United 
States district court (including the district court of a terri-
tory), a judge of the United States Claims Court, a judge of 
the United States Court of International Trade, a judge of 
the United States Tax Court, a United States magistrate, or 
a referee in bankruptcy or United States bankruptcy judge, 
"(iv) service performed as a Member, Delegate, or Resi-
dent Commissioner of or to the Congress, or 
"(v) any other service in the legislative branch of the 
Federal Government if such service is performed by an 
97 STAT. 70 
PUBLIC LAW 98-21—APR. 20, 1983 
5 use 8331. 
96 Stat. 559. 
26 use 3121. 
42 use 409. 
26 use 3121. 
Effective date. 
26 use 3121 
note. 
Entitlements. 
42 u s e 410 note. 
individual who, on December 31, 1983, is not subject to 
subchapter III of chapter 83 of title 5, United States Code; 
"(6) service performed in the employ of the United States or 
any instrumentality of the United States if such service is 
performed— 
"(A) in a penal institution of the United States by an 
inmate thereof; 
"(B) by any individual as an employee included under 
section 5351(2) of title 5, United States Code (relating to 
certain interns, student nurses, and other student employ-
ees of hospitals of the Federal Government), other than as a 
medical or dental intern or a medical or dental resident in 
training; or 
"(C) by any individual as an employee serving on a 
temporary basis in case of fire, storm, earthquake, flood, or 
other similar emergency;". 
(2) Section 3121(u)(l) of such Code is amended to read as follows: 
"(1) IN GENERAL.—For purposes of the taxes imposed by sec-
tions 3101(b) and 3111(b), subsection (b) shall be applied without 
regard to paragraph (5) thereof.". 
(c)(1) Section 209 of the Social Security Act is amended by adding 
at the end thereof the following new paragraph: 
"For purposes of this title, in the case of an individual performing 
service under the provisions of section 294 of title 28, United States 
Code (relating to assignment of retired justices and judges to active 
duty), the term 'wages' shall, subject to the provisions of subsection 
(a) of this section, include any payment under section 371(b) of such 
title 28 which is received during the period of such service.". 
(2) Section 3121(i) of the Internal Revenue Code of 1954 (relating to 
computation of wages in certain cases) is amended by adding at the 
end thereof the following new paragraph: 
"(5) SERVICE PERFORMED BY CERTAIN RETIRED JUSTICES AND 
JUDGES.—For purposes of this chapter, in the case of an individ-
ual performing service under the provisions of section 294 of 
title 28, United States Code (relating to assignment of retired 
justices and judges to active duty), the term 'wages' shall, 
subject to the provisions of subsection (a)(1) of this section, 
include any payment under section 3710k)) of such title 28 which 
is received during the period of such service.". 
(d) The amendments made by this section shall be effective with 
respect to remuneration paid after December 31,1983. 
(e) Nothing in this Act shall reduce the accrued entitlements to 
future benefits under the Federal Retirement System of current and 
retired Federal employees and their families. 
COVERAGE OF EMPLOYEES OF NONPROFIT ORGANIZATIONS 
42 use 410. 
SEC. 102. (a) Section 210(a)(8) of the Social Security Act is 
amended— 
(1) by striking out "(A)" immediately after "(8)"; 
(2) by striking out "subparagraph" where it first appears and 
inserting in lieu thereof "paragraph"; and 
(3) by striking out subparagraph (B). 
26 use 3121. 
(b)(1) Section 3121(b)(8) of the Internal Revenue Code of 1954 is 
amended— 
(A) by striking out "(A)" immediately after "(8)"; 
PUBLIC LAW 98-21—APR. 20, 1983 
97 STAT. 71 
(B) by striking out "subparagraph" where it first appears and 
inserting in lieu thereof "paragraph"; and 
(C) by striking out subparagraph (B). 
(2) Section 3121(k) of such Code is repealed. 
26 use 3121. 
(3) Section 3121(r) of such Code is amended— 
(A) by striking out "subsection (bXSXA)" and "section 
21()(a)(8)(A)" in paragraph (3) and inserting in lieu thereof 
"subsection (b)(8) and "section 210(aX8)", respectively; and 
(B) by striking out paragraph (4). 
(c) The amendments made by the preceding provisions of this 
section shall be effective with respect to service performed after 
December 31, 1983 (but the provisions of sections 2 and 3 of Public 
Law 94-563 and section 312(c) of Public Law 95-216 shall continue in 
effect, to the extent applicable, as though such amendments had not 
been made). 
(d) The period for which a certificate is in effect under section 
3121(k) of the Internal Revenue Code of 1954 may not be terminated 
under paragraph (1)(D) or (2) thereof on or after March 31,1983; but 
no such certificate shall be effective with respect to any service to 
which the amendments made by this section apply. 
(eXD If any individual— 
(A) on January 1,1984, is age 55 or over, and is an employee 
of an organization described in section 210(a)(8XB) of the Social 
Security Act (A) which does not have in effect (on that date) a 
waiver certificate under section 3121(k) of the Internal Revenue 
Code of 1954 and (B) to the employees of which social security 
coverage is extended on January 1,1984, solely by reason of the 
enactment of this section, £ind 
(B) after December 31,1983, acquires the number of quarters 
of coverage (within the meaning of section 213 of the Social 
Security Act) which is required for purposes of this subpara- 42 use 413. 
graph under paragraph (2), 
then such individual shall be deemed to be a fully insured individual 
(as defined in section 214 of the Social Security Act) for all of the 42 use 414. 
purposes of title II of such Act. 
(2) The number of quarters of coverage which is required for 
purposes of subparagraph (B) of paragraph (1) shall be determined 
as follows: 
The number of quarters of 
In the case of an individual who on 
coverage so required 
January 1,1984, is— 
shall be— 
age 60 or over 
6 
age 59 or over but less than age 60 
8 
£ige 58 or over but less than age 59 
12 
age 57 or over but less than age 58 
16 
age 55 or over but less than age 57 
20. 
Effective date. 
26 use 3121 
note. 
26 use 3121 
note. 
26 use 3121 
note. 
Supra. 
42 use 414 note. 
42 use 410. 
DURATION OF AGREEMENTS FOR COVERAGE OF STATE AND LOCAL 
EMPLOYEES 
SEC. 103. (a) Section 218(g) of the Social Security Act is amended to 
read as follows: 
42 use 418. 
"Duration of Agreement 
"(g) No agreement under this section may be terminated, either in 
its entirety or with respect to any coverage group, on or after the 
date of the enactment of the Social Security Amendments of 1983/'. 
97 STAT. 72 
PUBLIC LAW 98-21—APR. 20, 1983 
42 use 418 note. 
(b) The amendment made by subsection (a) shall appjly to any 
42 use 418. 
agreement in effect under section 218 of the Social Security Act on 
the date of the enactment of this Act, without regard to whether a 
notice of termination is in effect on such date, and to any agreement 
or modification thereof which may become effective under such 
section 218 after that date. 
PART B—COMPUTATION OF BENEFIT AMOUNTS 
SHIFT OF COST-OF-LIVING ADJUSTMENTS TO CALENDAR YEAR BASIS 
42 use 415. 
SEC. 111. (a)(1) Section 215(iX2)(AXii) of the Social Security Act is 
amended by striking out "June" and inserting in lieu thereof 
"December'\ 
(2) Section 215(iX2)(A)(iii) of such Act is amended by striking out 
"May" and inserting in lieu thereof "November". 
(3) Section 215(iX2XB) of such Act is amended by striking out 
"May" each place it appears and inserting in lieu thereof in each 
instance "November". 
42 use 403. 
(4) Section 203(f)(8)(A) of such Act is amended by striking out 
"June" and inserting in lieu thereof "December". 
42 use 430. 
(5) Section 230(a) of such Act is amended by striking out "June" 
and inserting in lieu thereof "December". 
(6) Section 215(iX2) of such Act as in effect in December 1978, and 
as applied in certain cases under the provisions of such Act as in 
effect after December 1978, is amended by striking out "June" in 
subparagraph (AXii) and inserting in lieu thereof "December", and 
by striking out "May" each place it appears in subparagraph (B) and 
inserting in lieu thereof in each instance "November". 
42 use 402. 
(7) Section 202(m) of such Act (as it applies in certain cases by 
95 Stat. 1660. 
reason of section 2 of Public Law 97-123) is amended by striking out 
"May" and inserting in lieu thereof "November". 
42 use 402 note. 
(8) The amendments made by this subsection shall apply with 
respect to cost-of-living increases determined under section 215(i) of 
the Social Security Act for years after 1982. 
(bXD Section 215(iXlXA) of the Social Security Act is amended by 
striking out "March 31" and inserting in lieu thereof "September 
30", and by striking out "1974" and inserting in lieu thereof "1982". 
(2) Section 215(i)(l)(A) of such Act as in effect in December 1978, 
and as applied in certain cases under the provisions of such Act as in 
effect after December 1978, is amended by striking out "March 31" 
and inserting in lieu thereof "September 30" and by striking out 
"1974" and inserting in lieu thereof "1982". 
42 use 415 note. 
(3) The amendments made by this subsection shall apply with 
respect to cost-of-living increases determined under section 215(i) of 
the Social Security Act for years after 1983. 
(c) Section 215(1X4) of such Act is amended by inserting ", and as 
amended by section 111 (aX6) and (bX2) of the Social Security 
Amendments of 1983," after "as in effect in December 1978" the 
first place it appears. 
42 use 415 note. 
(d) Notwithstanding any provision to the contrary in section 215(i) 
of the Social Security Act, the "base quarter" (as defined in para-
graph (l)(AXi) of such section) in the calendar year 1983 shall be a 
cost-of-living computation quarter" within the meaning of para-
graph (1)(B) of such section (and shall be deemed to have been 
determined by the Secretary of Health and Human Services to be a 
"cost-of-living computation quarter" under paragraph (2)(A) of such 
PUBLIC LAW 98-21—APR. 20, 1983 
97 STAT. 73 
96 Stat. 802. 
38 u s e 3023 
note. 
section) for all of the purposes of such Act as amended by this 
section and by other provisions of this Act, without r^ard to the 
extent by which the Consumer Price Index has increased since the 
last prior cost-of-living computation quarter which was established 
under such paragraph dXB). 
(e) Section 403(b) of the Omnibus Reconciliation Act of 1982 
(Public Law 97-253) is amended to read as follows: 
"(b)(1) Except as provided in paragraph (2), the amendment made 
by subsection (a)(1) shall apply with respect to amounts payable for 
periods beginning after May 31,1983. 
"(2) In the cases of individuals to whom pension is payable under Effective date. 
sections 521, 541, and 542 of title 38, United States Code, the 
amendment made by subsection (a)(1) shall take effect on the first 
day after May 31, 1983, that an increase is made in maximum 
annual rates of pension pursuant to section 3112 of title 38, United 
States Code.". 
COST-OF-LIVING INCREASES TO BE BASED ON EITHER WAGES OR PRICES 
(WHICHEVER IS LOWER) WHEN BALANCE IN OASDI TRUST FUNDS 
FALLS BELOW SPECIFIED LEVEL 
SEC. 112. (a) Section 215(i)(l) of the Social Security Act is 42 use 415. 
amended— 
(1) by striking out "in which" in subparagraph (B) and all that 
follows down through the first semicolon in such subparagraph 
and inserting in lieu thereof "with respect to which the applica-
ble increase percentage is 3 percent or more;"; 
(2) by striking out "and at the end of subparagraph (B); 
(3) by redesignating subparagraph (C) as subparagraph (H); 
and 
(4) by inserting after subparagraph (B) the following new 
subparagraphs: 
"(C) the term 'applicable increase percentage' means— 
Definitions, 
"(i) with respect to a base quarter or cost-of-living compu-
tation quarter in any calendar year before 1984, or in any 
calendar year after 1983 and before 1989 for which the 
OASDI fund ratio is 15.0 percent or more, or in any calen-
dar year after 1988 for which the OASDI fund ratio is 20.0 
percent or more, the CPI increase percentage; and 
"(ii) with respect to a base quarter or cost-of-living compu-
tation quarter in any calendar year after 1983 and before 
1989 for which the OASDI fund ratio is less than 15.0 
percent, or in any calendar year after 1988 for which the 
OASDI fund ratio is less than 20.0 percent, the CPI increase 
percentage or the wage increase percentage, whichever 
(with respect to that quarter) is the lower; 
"(D) the term 'CPI increase percentage', with respect to a base 
quarter or cost-of-living computation 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); 
"(E) the term wage increase percentage', with respect to a 
base quarter or cost-of-living computation quarter in any calen-
dar year, means the percentage (rounded to the nearest one-
97 STAT. 74 
PUBLIC LAW 98-21—APR. 20, 1983 
tenth of 1 percent) by which the SSA average wage index for the 
year immediately preceding such calendar year exceeds such 
mdex for the year immediately preceding the most recent prior 
calendar year which included a base quarter under subpara-
^aph (A)(ii) or, if later, which included a cost-of-living computa-
tion quarter; 
"(F) the term 'OASDI fimd ratio*, with respect to any calendar 
year, means the ratio o
f
— 
"(i) the combined balance in the Federal Old-Age and 
Survivors Insurance Trust Fund and the Federal Disability 
Insurance Trust Fund as of the beginning of such year, 
42 use 401. 
including the taxes transferred under section 201(a) on the 
first day of such year and reduced by the outstanding 
amount of any loan (including interest thereon) theretofore 
made to either such Fund from the Federal Hospital Insur-
ance Trust Fund under section 201(1), to 
"(ii) the total amount which (as estimated by the Secre-
tary) will be paid from the Federal Old-Age and Survivors 
Insurance Trust Fund and the Federal Disability Insurance 
Trust Fund during such calendar year for ml purposes 
authorized by section 201 (other than payments of interest 
on, or repayments of, loans from the Federal Hospital 
Insurance Trust Fund under section 201(1)), but excluding 
any transfer payments between such trust funds and reduc-
ing the amount of any transfers to the Railroad Retirement 
Account by the amount of any transfers into either such 
trust fund from that Account; 
"(G) the term *SSA average wage index', with respect to any 
calendar year, means the average of the total wages reported to 
the Secretary of the Treasury or his delegate as determined for 
purposes of subsection (b)(3)(A)(ii); and". 
42 use 415. 
(b) Section 215(i)(2)(A)(ii) of such Act is amended by striking out 
"by the same percentage" and all that follows down through the 
semicolon, in the sentence immediately following subdivision (III), 
and inserting in lieu thereof "by the applicable increase percent-
age;". 
(c) Section 215(i) of such Act is further amended by adding at the 
end thereof the following new paragraph: 
"(5)(A)If-
"(i) with respect to any calendar year the 'applicable increase 
percentage' was determined under clause (ii) of paragraph (IXC) 
rather than under clause (i) of such paragraph, and the increase 
becoming effective under paragraph (2) in such year was accord-
ingly determined on the basis of the wage increase percentage 
rather than the CPI increase percentage (or there was no such 
increase becoming effective under paragraph (2) in that year 
because the wage increase percentage was less than 3 percent), 
and 
"(ii) for any subsequent calendar year in which an increase 
under paragraph (2) becomes effective the OASDI fund ratio is 
greater than 32.0 percent, 
then each of the amounts described in subdivisions (I), (ID, and (m) 
of paragraph (2XAXii), as increased under paragraph (2) effective 
with the month of December in such subsequent calendar year, shall 
be further increased (effective with such month) by an additional 
percentage, which shall be determined under subparagraph (B) and 
shall apply as provided in subparagraph (C). 
PUBLIC LAW 98-21—APR. 20, 1983 
97 STAT. 75 
"(B) The applicable additional percentage by which the amounts 
described in subdivisions (I), (II), and (III) of paragraph (2XAXii) are 
to be further increased under subparagraph (A) in the subsequent 
calendar year involved shall be the amount derived by— 
"(i) subtracting (I) the compounded percentage benefit 
increases that were actually paid under paragraph (2) and this 
paragraph from (II) the compounded percentage benefit 
increases that would have been paid if all increases under 
paragraph (2) had been made on the basis of the CPI increase 
percentage, 
"(ii) dividing the difference by the sum of the compounded 
percentage in subdivision (I) and 100 percent, and 
**(iii) multiplying such quotient by 100 and rounding to the 
nearest one-tenth of 1 percent, 
with the compounded increases referred to in subdivisions (I) and (II) 
being measured— 
"(iv) in the case of amounts described in subdivision (I) of 
paragraph (2)(AKii), over the period beginning with the calendar 
year in which monthly benefits described in such subdivision 
were first increased on the basis of the wage increase percent-
age and ending with such subsequent calendar year, and 
"(v) in the case of amounts described in subdivisions (II) and 
(III) of paragraph (2)(A)(ii), over the period beginning with the 
calendar year in which the individual whose primary insurance 
amount is increased under such subdivision (II) initially became 
eligible for an old-age or disability insurance benefit, or died 
before becoming so eligible, and ending with such subsequent 
calendar year; 
except that if the Secretary determines in any case that the applica-
tion (in accordance with subparagraph (O) of the additional per-
centage as computed under the preceding provisions of this 
subparagraph would cause the OASDI fund ratio to fall below 32.0 
percent in the calendar year immediately following such subsequent 
year, he shall reduce such applicable additional percentage to the 
extent necessary to ensure that the OASDI fund ratio will remain at 
or above 32,0 percent through the end of such following year. 
"(C) Any applicable additional percentage increase in an amount 
described in subdivision (I), (II), or (III) of paragraph (2)(A)(ii), made 
under this paragraph in any calendar year, shall thereafter be 
treated for all the purposes of this Act as a part of the increase made 
in such amount under paragraph (2) for that year.". 
(d)(1) Section 215(i)(2)(C) of such Act is amended by adding at the 42 use 415. 
end thereof the following new clause: 
"(iii) The Secretary shall determine and promulgate the OASDI 
fund ratio for the current calendar year and the SSA wage index for 
the preceding calendar year before November 1 of the current 
calendar year, based upon the most recent data then available, and 
shall include a statement of such fund ratio and wage index (and of 
the effect such ratio and the level of such index may have upon 
benefit increases under this subsection) in any notification made 
under clause (ii) and any determination published under subpara-
graph (D).". 
(2) Section 215(iX4) of such Act (as amended by section 111(c) of 
this Act) is further amended by striking out "section 111 (a)(6) and 
(bX2)" and inserting in lieu thereof "sections 111(a)(6), 111(b)(2), and 
112". 
97 STAT. 76 
PUBLIC LAW 98-21—APR. 20, 1983 
42 use 415 note. 
(e) The amendments made by the preceding provisions of this 
section shall apply with respect to monthly benefits under title II of 
42 use 401. 
the Social Security Act for months after December 1983. 
42 use 415 note. 
(f) Notwithstanding anything to the contrary in section 215(iXlXP) 
of the Social Security Act (as added by subsection (a)(4) of this 
section), the combined balance in the Trust Funds which is to be 
used in determining the "OASDI fund ratio" with respect to the 
calendar year 1984 under such section shall be the estimated com-
bined balance in such Funds as of the close of that year (rather than 
as of its beginning), including the taxes transferred under section 
42 use 401. 
201(a) on the first day of the year following that year. 
EUMINATION OF WINDFALL BENEFITS FOR INDIVIDUALS RECEIVING 
PENSIONS FROM NONCOVERED EMPLOYMENT 
42 use 415. 
SEC. 113. (a) Section 215(a) of the Social Security Act is amended 
by adding at the end thereof the following new paragraph: 
"(7)(A) In the case of an individual whose primary insurance 
amount would be computed under paragraph (1) of this subsection, 
who— 
"(i) attains age 62 after 1985 (except where he or she became 
entitled to a disability insurance benefit before 1986 and 
remained so entitled in any of the 12 months immediately 
preceding his or her attainment of age 62), or 
"(ii) would attain age 62 after 1985 and becomes eligible for a 
disability insurance benefit after 1985, 
and who first becomes eligible after 1985 for a monthly periodic 
E
ayment (including a pajrment determined under subparagraph (C), 
ut excluding a payment under the Railroad Retirement Act of 1974 
45 use 23it. 
or 1937) which is based in whole or in part upon his or her earnings 
for service which did not constitute 'employment' as defined in 
42 use 410. 
section 210 for purposes of this title (hereafter in this paragraph and 
in subsection (d)(5) referred to as 'noncovered service), the primary 
insurance amount of that individual during his or her concurrent 
entitlement to such monthly periodic payment and to old-age or 
disability insurance benefits shall be computed or recomputed under 
subparagraph (B) with respect to the initial month in which the 
individual becomes eligible for such benefits. 
"(B)(i) If paragraph (1) of this subsection would apply to such an 
individual (except for subparagraph (A) of this paragraph), there 
shall first be computed an amount equal to the individual s primary 
insurance amount under paragraph (1) of this subsection, except 
that for purposes of such computation the percentage of the individ-
ual's average indexed monthly earnings established by subpara-
graph (A)(i) of paragraph (1) shall be the percent specified in clause 
(ii). There shall then be computed (without regard to this paragraph) 
a second amount, which shall be equal to the individual's primary 
insurance amount under paragraph (1) of this subsection, except 
that such second amount shall be reduced by an amount equal to 
one-half of the portion of the monthly periodic payment which is 
attributable to noncovered service performed after 1956 (with such 
attribution being based on the proportionate number of years of 
such noncovered service) and to which the individual is entitled (or 
is deemed to be entitled) for the initial month of his or her eligibility 
for old-age or disability insurance benefits. The individual's primary 
insurance amount shall be the larger of the two amounts computed 
under this subparagraph Obefore the application of subsection (i)) 
PUBLIC LAW 98-21—APR. 20, 1983 
97 STAT. 77 
and shall be deemed to be computed under paragraph (1) of this 
subsection for the purpose of appljdng other provisions of this title. 
"(ii) For purposes of clause (i), the percent specified in this clause 
is— 
"(I) 80.0 percent with respect to individuals who initially 
become eligible for old-age or disability insurance benefits in 
1986; 
"(ID 70.0 percent with respect to individuals who so become 
eligible in 1987; 
"(III) 60.0 percent with respect to individuals who so become 
eligible in 1988; 
"(IV) 50.0 percent with respect to individuals who so become 
eligible in 1989; and 
"(V) 40.0 percent with respect to individuals who so become 
eligible in 1990 or thereafter. 
"(C)(i) Any periodic payment which otherwise meets the require-
ments of subparagraph (A), but which is paid on other than a 
monthly basis, shall be allocated on a basis equivalent to a monthly 
payment (as determined by the Secretary), and such equivalent 
monthly payment shall constitute a monthly periodic pajnnent for 
purposes of this paragraph. 
"(ii) In the case of an individual who has elected to receive a 
periodic payment that has been reduced so as to provide a survivors 
benefit to any other individual, the payment shall be deemed to be 
increased (for purposes of any computation under this paragraph or 
subsection (d)(5)) by the amount of such reduction. 
"(iii) If an individual to whom subparagraph (A) applies is eligible 
for a periodic payment beginning with a month that is subsequent to 
the month in which he or she becomes eligible for old-age or 
disability insurance benefits, the amount of that payment (for pur-
poses of subparagraph (B)) shall be deemed to be the amount to 
which he or she is, or is deemed to be, entitled (subject to clauses (i), 
(ii), and (iv) of this subparagraph) in such subsequent month. 
"(iv) For purposes of this paragraph, the term 'periodic payment' 
includes a payment payable in a lump sum if it is a commutation of, 
or a substitute for, periodic payments. 
"(D) This paragraph shall not apply in the case of an individual 
who has 30 years or more of coverage (as defined in paragraph 
(l)(C)(ii)). In the case of an individual who has more than 25 years of 
coverage but less than 30 years of coverage (as so defined), the 
percent specified in the applicable subdivision of subparagraph 
(B)(ii) shall (if such percent is smaller than the percent specified in 
whichever of the following clauses applies) be deemed to be— 
"(i) 80 percent, in the case of an individual who has 29 of such 
years of coverage; 
"(ii) 70 percent, in the case of an individual who has 28 of such 
years; 
"(iii) 60 percent, in the case of an individual who has 27 of 
such years; and 
"(iv) 50 percent, in the case of an individual who has 26 of 
such years. 
"(E) This paragraph shall not apply in the case of an individual Limitations. 
who on January 1,1984— 
"(i) is an employee performing service to which social security 
coverage is extended on that date solely by reason of the 
amendments made by section 101 of the Social Security Amend-
ments of 1983; or 
Ante, p. 67. 
"Periodic 
payment." 
97 STAT. 78 
PUBLIC LAW 98-21—APR. 20, 1983 
"(ii) is an employee of a nonprofit organization which (on 
December 31, 1983) did not have in effect a waiver certificate 
Ante, p. 71. 
under section 3121(k) of the Internal Revenue Code of 1954 and 
to the employees of which social security coverage is extended 
on that date solely by reason of the amendments made by 
section 102 of that Act, unless social security coverage had 
previously extended to service performed by such individual as 
an employee of that organization under a waiver certificate 
which was subsequently (prior to December 31, 1983) termi-
nated.". 
42 use 415. 
(b) Section 215(d) of such Act is amended by adding at the end 
thereof the following new paragraph: 
"(5) In the case of an individual whose primary insurance amount 
is not computed under paragraph (1) of subsection (a) by reason of 
paragraph (4)(B)(ii) of that subsection, who— 
"(A) attains age 62 after 1985 (except where he or she became 
entitled to a disability insurance benefit before 1986, and 
remained so entitled in any of the 12 months immediately 
preceding his or her attainment of age 62), or 
"(B) would attain age 62 after 1985 and becomes eligible for a 
disability insurance benefit after 1985, 
and who first becomes eligible after 1985 for a monthly periodic 
payment (including a payment determined under subsection 
(a)(7)(C), but excluding a payment under the Railroad Retirement 
45 use 23it. 
Act of 1974 or 1937) which is based (in whole or in part) upon his or 
her earnings in noncovered service, the primary insurance amount 
of such individual during his or her concurrent entitlement to such 
monthly periodic payment and to old-age or disability insurance 
benefits shall be the primary insurance amount computed or recom-
puted under this subsection (without regard to this paragraph and 
before the application of subsection (i)) reduced by an amount equal 
to the smaller o
f
— 
"(i) one-half of the primary insurance amount (computed 
without regard to this paragraph and before the application of 
subsection (i)), or 
"(ii) one-half of the portion of the monthly periodic payment 
(or payment determined under subsection (a)(7)(C)) which is 
attributable to noncovered service performed after 1956 (with 
such attribution being based on the proportionate number of 
years of such noncovered service) and to which that individual 
is entitled (or is deemed to be entitled) for the initial month of 
his or her eligibility for old-age or disability insurance benefits. 
This paragraph shall not apply in the case of any individual to 
whom subsection (a)(7) would not apply by reason of subparagraph 
(E) or the first sentence of subparagraph (D) thereof.". 
42 use 415. 
(c) Section 215(f) of such Act is amended by adding at the end 
thereof the following new paragraph: 
"(9)(A) In the case of an individual who becomes entitled to a 
periodic pa5nnent determined under subsection (a)(7)(A) (including a 
payment determined under subsection (a)(7)(C)) in a month subse-
quent to the first month in which he or she becomes entitled to an 
old-age or disability insurance benefit, and whose primary insurance 
amount has been computed without regard to either such subsection 
or subsection (d)(5), such individual's primary insurance amount 
shall be recomputed (notwithstanding paragraph (4) of this subsec-
tion), in accordance with either such subsection or subsection (dX5), 
PUBLIC LAW 98-21—APR. 20, 1983 
97 STAT. 79 
as may be applicable, effective with the first month of his or her 
concurrent entitlement to such benefit and such periodic payment. 
"(B) If an individual's primary insurance amount has been com-
puted under subsection (a)(7) or (dX5), and it becomes necessary to 
recompute that primary insurance amount under this subsection— 
"(i) so as to increase the monthly benefit amount payable with 
respect to such primary insurance amount (except in the case of 
the individual's death), such increase shall be determined as 
though such primary insurance amount had initially been com-
puted without regard to subsection (a)(7) or (d)(5), or 
"(ii) by reason of the individual's death, such primary insur-
ance amount shall be recomputed without regard to (and as 
though it had never been computed with regard to) subsection 
(aX7)or(dX5).". 
(d) Sections 202(eX2) and 202(fX3) of such Act are each amended by 
striking out "section 215(f) (5) or (6)" wherever it appears and 
inserting in lieu thereof "section 215(fX5), 215(fX6), or 215(f)(9XB)". 
42 use 402. 
INCREASE IN OLD-AGE INSURANCE BENEFTF AMOUNTS ON ACCOUNT OF 
DELAYED RETIREMENT 
SEC 114. (a) Section 202(wXlXA) of the Social Security Act is 
amended to read as follows: 
"(A) the applicable percentage (as determined under para-
graph (6)) of such amount, multiplied by", 
(b) Section 202(w) of such Act is further amended by adding at the 
end thereof the following new paragraph: 
"(6) For purposes of paragraph (IXA), the 'applicable percentage' 
is— 
"(A) Viz of 1 percent in the case of an individual who first 
becomes eligible for an old-age insurance benefit in any calen-
dar year before 1979; 
"(B) *
A of 1 percent in the case of an individual who first 
becomes eligible for an old-age insurance benefit in any calen-
dar year after 1978 and before 1987; 
"(C) in the case of an individual who first becomes eligible for 
an old-age insurance benefit in a calendar year after 1986 and 
before 2005, a percentage equal to the applicable percentage in 
effect under this paragraph for persons who first became eligi-
ble for an old-age insurance benefit in the preceding calendar 
year (as increased pursuant to this subparagraph), plus ¥24 of 1 
percent if the calendar year in which that particular individual 
first becomes eligible for such benefit is not evenly divisible by 
2; and 
"(D) % of 1 percent in the case of an individual who first 
becomes eligible for an old-age insurance benefit in a calendar 
year after 2004.". 
(c)(1) Paragraphs (2) (A) and (3) of section 202(w) of such Act are 
each amend^ by striking out "age 72" and inserting in Ueu thereof 
"age 70". 
(2) The amendments made by paragraph (1) shall apply with 
respect to increment months in calendar years after 1983. 
42 use 402. 
Effective date. 
42 use 402 note. 
97 STAT. 80 
PUBLIC LAW 98-21—APR. 20, 1983 
PART C—REVENUE PROVISIONS 
SEC. 121. TAXATION OF SOCIAL SECURITY AND TIER 1 RAILROAD RETIRE-
MENT BENEFITS. 
(a) GENERAL RULE.—Part II of subchapter B of chapter 1 of the 
Internal Revenue Code of 1954 (relating to amounts specifically 
included in gross income) is amended by redesignating section 86 as 
section 87 and by inserting after section 85 the following new 
section: 
26 use 86. 
"SEC. 86. SOCIAL SECURITY AND TIER 1 RAILROAD RETIREMENT BENE-
FITS. 
"(a) IN GENERAL.—Gross income for the taxable year of any 
taxpayer described in subsection O
t
)
) includes social security benefits 
in an amount equal to the lesser o
f
— 
"(1) one-half of the social security benefits received during the 
taxable year, or 
"(2) one-half of the excess described in subsection (b)(1). 
"(b) TAXPAYERS TO WHOM SUBSECTION (a) APPLIES.— 
"(1) IN GENERAL.—A tsixpayer is described in this subsection 
i
f
— 
"(A) the sum o
f
— 
"(i) the modified adjusted gross income of the taxpay-
er for the taxable year, plus 
"(ii) one-half of the social security benefits received 
during the taxable year, exceeds 
"(B) the base amount. 
"(2) MODIFIED ADJUSTED GROSS INCOME.—For purposes of this 
subsection, the term 'modified adjusted gross income' means 
adusted gross income— 
"(A) determined without regard to this section and sec-
tions 221, 911, 931, and 933, and 
"(B) increased by the amount of interest received or 
accrued by the taxpayer during the taxable year which is 
exempt from tax. 
"(c) BASE AMOUNT.—For purposes of this section, the term 'base 
amount' means— 
"(1) except as otherwise provided in this subsection, $25,000, 
"(2) $32,000, in the case of a joint return, and 
"(3) zero, in the case of a taxpayer who— 
"(A) is married at the close of the taxable year (within the 
meaning of section 143) but does not file a joint return for 
such year, and 
"(B) does not live apart from his spouse at all times 
during the taxable year. 
"(d) SOCIAL SECURITY BENEFIT.— 
"(1) IN GENERAL.—For purposes of this section, the term 
'social security benefit' means any amount received by the 
taxpayer by reason of entitlement to— 
"(A) a monthly benefit under title II of the Social Secu-
42 use 401. 
rity Act, or 
"(B) a tier 1 railroad retirement benefit. 
For purposes of the preceding sentence, the amount received by 
any taxpayer shall be determined as if the Social Security Act 
42 use 403. 
did not contain section 203(i) thereof. 
"(2) ADJUSTMENT FOR REPAYMENTS DURING YEAR.— 
PUBLIC LAW 98-21—APR. 20, 1983 
97 STAT. 81 
"(A) IN GENERAL.—For purposes of this section, the 
amount of social security benefits received during any tax-
able year shall be reduced by any repayment made by the 
taxpayer during the taxable year of a social security benefit 
previously received by the taxpayer (whether or not such 
benefit was received during the taxable year). 
"(B) DENIAL OF DEDUCTION.—If (but for this subpara-
graph) any portion of the repayments referred to in subpar-
agraph (A) would have been allowable as a deduction for 
the taxable year under section 165, such portion shall be 
allowable as a deduction only to the extent it exceeds the 
social security benefits received by the taxpayer during the 
taxable year (and not repaid during such taxable year). 
"(3) WORKMEN'S COMPENSATION BENEFITS SUBSTITUTED FOR 
S
O
C
I
A
L S
E
C
U
R
F
T
Y BENEFITS.—For purposos of this section, if, by 
reason of section 224 of the Social Security Act (or by reason of ^2 use 424a. 
section 3(a)(1) of the Railroad Retirement Act of 1974), any 45 use 23ib. 
social security benefit is reduced by reason of the receipt of a 
benefit under a workmen's compensation act, the term 'social 
security benefit' includes that portion of such benefit received 
under the workmen's compensation act which equals such re-
duction. 
"(4) TIER i RAILROAD RETIREMENT BENEFIT.—For purposes of 
paragraph (1), the term 'tier 1 railroad retirement benefit' 
means a monthly benefit under section 3(a), 4(a), or 4(f) of the 
Railroad Retirement Act of 1974. 
45 use 23ib, 
"(e) LIMITATION ON AMOUNT INCLUDED WHERE TAXPAYER RECEIVES ^^^'^ 
LUMP-SUM PAYMENT.— 
"(1) LIMITATION.—If— 
"(A) any portion of a lump-sum payment of social security 
benefits received during the taxable year is attributable to 
prior taxable years, and 
"(B) the taxpayer makes an election under this subsection 
for the taxable year, 
then the amount included in gross income under this section for 
the taxable year by reason of the receipt of such portion shall 
not exceed the sum of the increases in gross income under this 
chapter for prior taxable years which would result solely from 
taking into account such portion in the taxable years to which it 
is attributable. 
"(2) SPECIAL RULES.— 
"(A) YEAR TO WHICH BENEFIT ATTRIBUTABLE.—For pur-
poses of this subsection, a social security benefit is attribut-
able to a taxable year if the generally applicable payment 
date for such benefit occurred during such taxable year. 
"(B) ELECTION.—An election under this subsection shall 
be made at such time and in such manner as the Secretary 
shall by regulations prescribe. Such election, once made, 
may be revoked only with the consent of the Secretary. 
"(f) TREATMENT AS PENSION OR ANNUITY FOR CERTAIN PURPOSES.— 
For purposes o
f
— 
"(1) section 43(c)(2) (defining earned income), 
"(2) section 219(f)(1) (defining compensation), 
"(3) section 221(b)(2) (defining earned income), and 
"(4) section 911(b)(1) (defining foreign earned income), 
any social securitj^ benefit shall be treated as an amount received as 
a pension or annuity." 
97 STAT. 82 
PUBLIC LAW 98-21—APR. 20, 1983 
(b) INFORMATION REPORTING.—Subpart B of part HI of subchapter 
A of chapter 61 of such Code (relating to information concerning 
transactions with other persons) is amended by adding at the end 
thereof the following new section: 
26 use 6050F. 
"SEC. 6050F. RETURNS RELATING TO SOCIAL SECURITY BENEFITS. 
"(a) REQUIREMENT OF REPORTING.—The appropriate Federal offi-
cial shall make a return, according to the forms and regulations 
prescribed by the Secretary, setting forth— 
"(Dthe— 
"(A) aggregate amount of social security benefits paid 
with respect to any individual during any calendar year, 
"(B) aggregate amount of social security benefits repaid 
by such individual during such calendar year, and 
"(C) aggregate reductions under section 224 of the Social 
42 use 424a. 
Security Act (or under section 3(a)(1) of the Railroad Retire-
45 use 231b. 
ment Act of 1974) in benefits which would otherwise have 
been paid to such individual during the calendar year on 
account of amounts received under a workmen's compensa-
tion act, and 
"(2) the name and address of such individual. 
"(b) STATEMENTS TO BE FURNISHED TO INDIVIDUALS WITH RESPECT 
To WHOM INFORMATION IS FURNISHED.—Every person making a 
return under subsection (a) shall furnish to each individual whose 
name is set forth in such return a written statement showing— 
"(1) the name of the agency making the payments, and 
"(2) the aggregate amount of payments, of repayments, and of 
reductions, with respect to the individual as shown on such 
return. 
The written statement required under the preceding sentence shall 
be furnished to the individual on or before January 31 of the year 
following the calendar year for which the return under subsection 
(a) was made. 
"(c) DEFINITIONS,—For purposes of this section— 
"(1) APPROPRIATE FEDERAL OFFICIAL.—The term 'appropriate 
Federal official' means— 
"(A) the Secretary of Health and Human Services in the 
case of social security benefits described in section 
86(d)(1)(A), and 
"(B) the Railroad Retirement Board in the case of social 
Ante, p. 80. 
security benefits described in section 86(dXlXB). 
"(2) SOCIAL SECURITY BENEFIT.—The term 'social security bene-
fit' has the meaning given to such term by section 86(d)(1)." 
(c) TREATMENT OF NONRESIDENT AUENS.— 
(1) AMENDMENT OF SECTION 871(a).—Subsection (a) of section 
26 use 871. 
871 of such Code (relating to tax on income not connected with 
United States business) is amended by adding at the end thereof 
the following new paragraph: 
"(3) TAXATION OF SOCIAL SECURITY BENEFITS.—For purposes of 
this section and section 1441— 
"(A) one-half of any social security benefit (as defined in 
section 86(d)) shall be included in gross income, and 
"(B) section 86 shall not apply." 
26 use 1441. 
(2) AMENDMENT OF SECTION 1441.—Section 1441 of such Code 
(relating to withholding of tax on nonresident aliens) is 
amended by adding at the end thereof the following new subsec-
tion: 
PUBLIC LAW 98-21—APR. 20, 1983 
97 STAT. 83 
"(g) CROSS REFERENCE.— 
"For provision treating one-half of social security benefits as subject to 
withholding under this section, see section 871(a)(3)." 
(3) DISCLOSURE OF INFORMATION TO SOCIAL SECURITY ADMINIS-
TRATION O
R RAILROAD RETIREMENT BOARD.— 
(A) IN GENERAL.—Subsection (h) of section 6103 of such 
26 use 6103. 
Code (relating to disclosure to certain Federal officers and 
employees for purposes of tax administration, etc.) is 
amended by adding at the end thereof the following new 
paragraph: 
"(6) WITHHOLDING OF TAX FROM SOCIAL SECURITY BENEFITS.— 
Upon written request of the payor agency, the Secretary may 
disclose available return information from the master files of 
the Internal Revenue Service with respect to the address and 
status of an individual as a nonresident alien or as a citizen or 
resident of the United States to the Social Security Administra-
tion or the Railroad Retirement Board (whichever is appropri-
ate) for purposes of carrying out its responsibilities for 
withholding tax under section 1441 from social security benefits 
(as defined in section 86(d))." 
Ante, p. 80. 
(B) CONFORMING AMENDMENT.—Paragraph (4) of section 
61()3(p) of such Code (relating to safeguards) is amended by 26 use 6103. 
inserting "(h)(6)," after "(h)(2)," in the material preceding 
subparagraph (A) and in subparagraph (F)(ii), thereof. 
(C) DISCLOSURE BY FINANCIAL INSTITUTIONS.—Section 1113 
of the Right to Financial Privacy Act of 1978 (92 Stat. 3706; 
12 U.S.C. 3413) is amended by adding at the end thereof the 
following new subsection: 
"(k)(l) Nothing in this title shall apply to the disclosure by the 
financial institution of the name and address of any customer to the 
Department of the Treasury, the Social Security Administration, or 
the Railroad Retirement Board, where the disclosure of such infor-
mation is necessary to, and such information is used solely for the 
purpose of, the proper administration of section 1441 of the Internal 
Revenue Code of 1954, title II of the Social Security Act, or the 
Railroad Retirement Act of 1974. 
"(2) Notwithstanding any other provision of law, any request 
authorized by paragraph (1) (and the information contained therein) 
may be used by the financial institution or its agents solely for the 
purpose of providing the customer's name and address to the De-
partment of the Treasury, the Social Security Administration, or the 
Railroad Retirement Board and shall be barred from redisclosure by 
the financial institution or its agents." 
(d) 
SOCIAL 
SECURITY 
BENEFITS 
TREATED AS UNITED 
STATES 
SOURCED.—Subsection (a) of section 861 of such Code (relating to 
26 use 861. 
income from sources within the United States) is amended by adding 
at the end thereof the following new paragraph: 
"(8) SOCIAL SECURITY BENEFITS.—Any social security benefit 
(as defined in section 86(d))." 
Ante, p. 80. 
(e) TRANSFERS TO TRUST FUNDS.— 
42 use 40i note. 
(1) IN GENERAL.—There are hereby appropriated to each 
payor fund amounts equivalent to the aggregate increase in tax 
liabilities under chapter 1 of the Internal Revenue Code of 1954 26 use i et seq. 
which is attributable to the application of sections 86 and 
Ante, p. 80. 
871(a)(3) of such Code (as added by this section) to payments 
from such payor fund. 
Information 
disclosure. 
26 use 1441; 42 
use 401; 45 USC 
231t. 
97 STAT. 84 
PUBLIC LAW 98-21—APR. 20, 1983 
(2) TRANSFERS.—The amounts appropriated by paragraph (1) 
to any payor fund shall be transferred from time to time (but 
not less frequently than quarterly) from the general fund of the 
Tregisury on the b£isis of estimates made by the Secretary of the 
Treasury of the amounts referred to in such paragraph. Any 
such quarterly payment shall be made on the first day of such 
quarter and shall take into account social security benefits 
estimated to be received during such quarter. Proper adjust-
ments shall be made in the amounts subsequently transferred 
to the extent prior estimates were in excess of or less than the 
amounts required to be transferred. 
(3) DEFINITIONS.—For purposes of this subsection— 
(A) PAYOR FUND.—The term "payor fund" means any 
trust fund or account from which payments of social secu-
rity benefits are made. 
(B) SOCIAL SECURITY BENEFITS.—The term "social security 
benefits" has the meaning given such term by section 
Ante, p. 80. 
86(d)(1) of the Internal Revenue Code of 1954. 
(4) REPORTS.—The Secretary of the Treasury shall submit 
annual reports to the Congress and to the Secretary of Health 
and Human Services and the Railroad Retirement Board on— 
(A) the transfers made under this subsection during the 
year, and the methodology used in determining the amount 
of such transfers and the funds or account to which made, 
and 
(B) the anticipated operation of this subsection during the 
next 5 years. 
(f) TECHNICAL AMENDMENTS.:— 
26 use 85. 
(1) Subsection (a) of section 85 of such Code is amended by 
striking out "this section," and inserting in lieu thereof "this 
section, section 86,". 
96 Stet. 2375. 
(2) Subparagraph (B) of section 128(c)(3) of such Code (as in 
26 use 128. 
effect for taxable years beginning after December 31, 1984) is 
amended by striking out "85," and inserting in lieu thereof "85, 
86,". 
(3) The table of sections for part II of subchapter B of chapter 
1 of such Code is amended by striking out the item relating to 
section 86 and inserting in lieu thereof the following: 
"Sec. 86. Social security and tier 1 railroad retirement benefits. 
"Sec. 87. Alcohol fuel credit." 
(4) The table of sections for subpart B of part III of subchapter 
A of chapter 61 of such Code is amended by adding at the end 
thereof the following new item: 
"Sec. 6050F. Returns relating to social security benefits." 
26 use 86 note. 
(g) EFFECTIVE DATES.— 
(1) IN GENERAL.—Except as provided in paragraph (2), the 
amendments made by this section shall apply to benefits re-
ceived after December 31, 1983, in taxable years ending after 
such date. 
(2) TREATMENT OF CERTAIN LUMP-SUM PAYMENTS RECEIVED 
AFTER DECEMBER 31, 1983.—The amendments made by this sec-
tion shall not apply to any portion of a lump-sum payment of 
social security benefits (as defined in section 86(d) of the Inter-
Ante, p. 80. 
nal Revenue Code of 1954) received after December 31, 1983, if 
the generally applicable payment date for such portion was 
before January 1,1984. 
PUBLIC LAW 98-21—APR. 20, 1983 
97 STAT. 85 
SEC. 122. CREDIT FOR THE ELDERLY A
N
D THE P
E
R
M
A
N
E
N
T
L
Y A
N
D 
T
O
T
A
L
L
Y DISABLED. 
(a) GENERAL RULE.—Section 37 of the Internal Revenue Code of 
1954 (relating to credit for the elderly) is amended to read as follows: 26 use 37. 
"SEC. 37. CREDIT FOR THE ELDERLY A
N
D THE P
E
R
M
A
N
E
N
T
L
Y A
N
D 
TOTALLY DISABLED. 
"(a) GENERAL RULE.—In the case of a qualified individual, there 
shall be allowed as a credit against the tax imposed by this chapter 
for the taxable year an amount equal to 15 percent of such individ-
ual's section 37 amount for such taxable year. 
"(b) QUALIFIED INDIVIDUAL.—For purposes of this section, the term 
'qualified individual' means any individual— 
"(1) who has attained age 65 before the close of the taxable 
year, or 
"(2) who retired on disability before the close of the taxable 
year and who, when he retired, was permanently and totally 
disabled. 
"(c) SECTION 37 AMOUNT.—For 
purposes of 
subsection (a)— 
"(1) IN GENERAL.—An individual's section 37 amount for the 
taxable year shall be the applicable initial amount determined 
under paragraph (2), reduced as provided in paragraph (3) and 
in subsection (d). 
"(2) INITIAL AMOUNT— 
"(A) IN GENERAL.—Except as provided in subparagraph 
(B), the initial amount shaU be— 
"(i) $5,000 in the case of a single individual, or a joint 
return where only one spouse is a qualified individual, 
"(ii) $7,500 in the case of a joint return where both 
spouses are qualified individuals, or 
"(iii) $3,750 in the case of a married individual filing 
a separate return. 
"(B) LIMITATION IN CASE OP INDIVIDUALS WHO HAVE NOT 
ATTAINED AGE 65.— 
"(i) IN GENERAL.—In the case of a qualified individual 
who has not attained age 65 before the close of the 
taxable year, except as provided in clause (ii), the 
initial amount shall not exceed the disability income 
for the taxable year. 
"(ii) SPECIAL RULES IN CASE OP JOINT RETURN —In the 
case of a joint return where both spouses are qualified 
individuals and at least one spouse has not attained age 
65 before the close of the taxable year— 
"(I) if both spouses have not attained age 65 
before the close of the taxable year, the initial 
amount shall not exceed the sum of such spouses' 
disability income, or 
"(n) if one spouse has attained age 65 before the 
close of the taxable year, the initial amount shall 
not exceed the sum of $5,000 plus the disability 
income for the taxable year of the spouse who has 
not attained age 65 before the close of the taxable 
year, 
"(iii) DISABILITY INCOME.—For purposes of this sub-
paragraph, the term 'disability income' means the ag-
gregate amount includable in the gross income of the 
individual for the taxable year under section 72 or 
97 STAT. 86 
PUBLIC LAW 98-21—APR. 20, 1983 
105(a) to the extent such amount constitutes wages (or 
payments in lieu of wages) for the period during which 
the individual is absent from work on account of per-
manent and total disabiUty. 
"(3) REDUCTION.— 
"(A) IN GENERAL.—The reduction under this paragraph is 
an amount equal to the sum of the amounts received by the 
individual (or, in the case of a joint return, by either spouse) 
as a pension or annuity or as a disability benefit— 
"(i) which is excluded from gross income and payable 
under— 
42 use 401. 
"(I) title II of the Social Security Act, 
45USC23it. 
"(II) the Railroad Retirement Act of 1974, or 
"(in) a law administered by the Veterans' Ad-
ministration, or 
"(ii) which is excluded from gross income under any 
provision of law not contained in this title. 
No reduction shall be made under clause (i)(III) for any 
26 use 104. 
amount described in section 104(a)(4). 
"(B) TREATMENT OF CERTAIN WORKMEN'S COMPENSATION 
BENEFITS.—For purposos of subparagraph (A), any amount 
Ante, p. 80. 
treated as a social security benefit under section 86(d)(3) 
shall be treated as a disability benefit received under title II 
of the Social Security Act. 
"(d) LIMITATIONS.— 
"(1) ADJUSTED GROSS INCOME LIMITATION.—If the adjusted 
gross income of the taxpayer exceeds— 
"(A) $7,500 in the case of a single individual, 
"(B) $10,000 in the case of a joint return, or 
"(C) $5,000 in the case of a married individual filing a 
separate return, 
the section 37 amount shall be reduced by one-half of the excess 
of the adjusted gross income over $7,500, $10,000, or $5,000, as 
the case may be. 
"(2) LIMITATION BASED ON AMOUNT OP TAX.—The amount of 
the credit allowed by this section for the taxable year shall not 
exceed the amount of the tax imposed by this chapter for such 
taxable year. 
"(e) DEFINITIONS AND SPECIAL RULES.—For purposes of this sec-
tion— 
"(1) MARRIED COUPLE MUST FILE JOINT RETURN.—Except in the 
case of a husband and wife who live apart at all times during 
the taxable year, if the taxpayer is married at the close of the 
taxable year, the credit provided by this section shall be allowed 
only if the taxpayer and his spouse file a joint return for the 
taxable year. 
"(2) MARITAL STATUS.—Marital status shall be determined 
under section 143. 
"(3) PERMANENT A
N
D T
O
T
A
L D
I
S
A
B
I
U
T
Y DEFINED.—An individ-
ual is permanently and totally disabled if he is unable to engage 
in any substantial gainful activity by reason of any medically 
determinable physical or mental impairment which can be 
expected to result in death or which has lasted or can be 
expected to last for a continuous period of not less than 12 
months. An individual shall not be considered to be perma-
nently and totally disabled unless he furnishes proof of the 
PUBLIC LAW 98-21—APR. 20, 1983 
97 STAT. 87 
existence thereof in such form and manner, and at such times, 
as the Secretary may require. 
"(f) NONRESIDENT ALIEN INELIGIBLE FOR CREDIT.—NO credit shall 
be allowed under this section to any nonresident alien." 
(b) REPEAL OF EXCLUSION FOR CERTAIN DISABIUTY PAYMENTS.— 
Subsection (d) of section 105 of such Code (relating to certain disabil- 
26 use 105. 
ity payments) is hereby repealed. 
(c) CONFORMING AMENDMENTS.— 
(1) Sections 41(b)(2), 44A(b)(2), 46(a)(4)(B), 53(a)(2), and 904(g) of 26 use 4i, 44A, 
such Code are each amended by striking out "relating to credit '*^' ^^' ^^^• 
for the elderly" and inserting in lieu thereof "relating to credit 
for the elderly and the permanently and totally disabled". 
(2) Subsection (a) of section 85 of such Code is amended by 26 use 85. 
striking out ", section 105(d),". 
(3) Subparagraph (B) of section 128(c)(3) of such Code (as in Ante, p. 84. 
effect for taxable years beginning after December 31, 1984) is 26 use 128. 
amended by striking out "105(d),". 
(4) Paragraph (3) of section 403(b) of such Code is amended by 26 use 403. 
striking out "sections 105(d) and 911" and inserting in lieu 
thereof "section 911". 
(5) Clause (i) of section 415(cX3XC) of such Code is amended by 96 Stat. 532. 
striking out "section 105(dX4)" and inserting in lieu thereof 
26 use 415. 
"section 37(eX3)". 
(6) Paragraph (6) of section 7871(a) of such Code is amended by 96 Stat. 2608. 
striking out subparagraph (A), and by redesignating subpara- 26 use 7871. 
graphs (B), (C), and (D) as subparagraphs (A), (B), and (C), 
respectively. 
(7) The table of sections for subpart A of part IV of subchapter 
A of chapter 1 of such Code is amended by striking out the item 
relating to section 37 and inserting in lieu thereof the following: 
"Sec. 37. Credit for the elderly and the permanently and totally disabled." 
(d) EFFECTIVE DATE.— 
26 use 37 note. 
(1) IN GENERAL.—The amendments made by this section shall 
apply to taxable years beginning after December 31,1983. 
(2) TRANSITIONAL RULE.—If an individual's annuity starting 
date was deferred under section 105(dX6) of the Internal Reve-
nue Code of 1954 (as in effect on the day before the date of the Supra. 
enactment of this section), such deferral shall end on the first 
day of such individual's first taxable year beginning after De-
cember 31,1983. 
SEC. 123. ACCELERATION OF INCREASES IN PICA TAXES; 1984 EMPLOYEE 
TAX CREDIT. 
(a) ACCELERATION OF INCREASES IN F I C A TAXES.— 
(1) TAX ON EMPLOYEES.—Subsection (a) of section 3101 of the 
Internal Revenue Code of 1954 (relating to rate of tax on 26 use 3101. 
employees for old-age, survivors, and disability insurance) is 
amended by striking out paragraphs (1) through (7) and insert-
ing in lieu thereof the following: 
"In cases of wages 
The rate 
received during: 
shall be: 
1984, 1985,1986, or 1987 
5.7 percent 
1988 or 1989 
6.06 percent 
1990 or thereafter 
6.2 percent." 
97 STAT. 88 
PUBLIC LAW 98-21—APR. 20, 1983 
26 use 3111. 
(2) EMPLOYER TAX.—Subsection (a) of section 3111 of such Code 
is amended by striking out paragraphs (1) through (7) and 
inserting in lieu thereof the following: 
"In cases of wages 
The rate 
paid during: 
shall be: 
1984,1985,1986, or 1987 
5.7 percent 
1988 or 1989 
6.06 percent 
1990 or thereafter 
6.2 percent." 
26 use 3101 
(3) EFFECTIVE DATE.—The amendments made by this subsec-
^°^- 
tion shall apply to remuneration paid after December 31,1983. 
(b) 1984 EMPLOYEE TAX CREDIT.— 
(1) IN GENERAL.—Chapter 25 of such Code is amended by 
adding at the end thereof the following new section: 
26 use 3510. 
"SEC. 3510. CREDIT FOR INCREASED SOCIAL SECURITY EMPLOYEE TAXES 
AND RAILROAD RETIREMENT TIER 1 EMPLOYEE TAXES IM-
POSED DURING 1984. 
"(a) GENERAL RULE.—There shall be allowed as a credit against 
the tax imposed by section 3101(a) on wages received during 1984 an 
amount equal to %o of 1 percent of the wages so received. 
"(b) TIME CREDIT ALLOWED.—The credit under subsection (a) shall 
be taken into account in determining the simount of the tax 
deducted under section 3102(a). 
"(c) WAGES.—For purposes of this section, the term 'wages' has the 
meaning given to such term by section 3121(a). 
"(d) APPLICATION TO AGREEMENTS UNDER SECTION 218 OF THE 
42 use 418. 
SOCIAL SECURITY ACT.—For purposes of determining amounts equiv-
alent to the tax imposed by section 3101(a) with respect to remu-
neration which— 
"(1) is covered by an agreement under section 218 of the 
Social Security Act, and 
"(2) is paid during 1984, 
the credit allowed by subsection (a) shall be taken into account. A 
similar rule shall also apply in the case of an agreement under 
section 3121(1). 
"(e) CREDIT AGAINST RAILROAD RETIREMENT EMPLOYEE AND EM-
PLOYEE REPRESENTATIVE TAXES.— 
"(1) IN GENERAL.—There shall be allowed as a credit against 
the taxes imposed by sections 3201(a) and 3211(a) on compensa-
tion paid during 1984 and subject to such taxes at rates deter-
mined by reference to section 3101 an amount equal to %o of 1 
percent of such compensation. 
"(2) TIME CREDIT ALLOWED.—The credit under paragraph (1) 
shall be taken into account in determining the amount of the 
tax deducted under section 3202(a) (or the amount of the tax 
under section 3211(a)). 
"(3) COMPENSATION.—For purposes of this subsection, the 
term 'compensation' has the meaning given to such term by 
section 3231(e). 
"(f) COORDINATION WITH SECTION 6413(C).—For purposes of subsec-
tion (c) of section 6413, in determining the amount of the tax 
imposed by section 3101 or 3201, any credit allowed by this section 
shall be taken into account." 
(2) CLERICAL AMENDMENT.—The table of sections for chapter 
25 of such Code is amended by adding at the end thereof the 
following new item: 
PUBLIC LAW 98-21—APR. 20, 1983 
97 STAT. 89 
"Sec. 3510. Credit for increased social security employee taxes and railroad 
retirement tier 1 employee taxes imposed during 1984." 
(3) EFFECTIVE DATE.—The amendments made by this subsec- 2
6 use 35io 
tion shall apply to remuneration paid during 1984. 
^°^-
(4) DEPOSITS IN SOCIAL SECURITY TRUST FUNDS.—For purposes 42 use 4i8 note. 
of subsection (h) of section 218 of the Social Security Act (relat- 42 use 418. 
ing to deposits in social security trust funds of amounts received 
under section 218 agreements), amounts allowed as a credit 
pursuant to subsection (d) of section 3510 of the Internal Reve-
nue Code of 1954 (relating to credit for remuneration paid Ante, p. 88. 
during 1984 which is covered under an agreement under section 
218 of the Social Security Act) shall be treated as amounts 
received under such an agreement. 
(5) DEPOSITS IN RAILROAD RETIREMENT ACCOUNT.—For purposes 45 use 23in 
of subsection (a) of section 15 of the Railroad Retirement Act of "
°
*
® 
1974, amounts allowed as a credit under subsection (e) of section 45 use 23in. 
3510 of the Internal Revenue Code of 1954 shall be treated as 
amounts covered into the Treasury under subsection (a) of 
section 3201 of such Code. 
SEC. 124. TAXES ON SELF-EMPLOYMENT INCOME; CREDIT AGAINST SUCH 
TAXES FOR YEARS BEFORE 1990; DEDUCTION OF SUCH TAXES 
FOR YEARS AFTER 1989. 
(a) INCREASE IN RATES.—Subsections (a) and (b) of section 1401 of 
the Internal Revenue Code of 1954 (relating to rates of tax on self- 2
6 use I40i. 
emplojnnent income) are amended to read as follows: 
"(a) OLD-AGE, SURVIVORS, AND DISABIUTY INSURANCE.—In addition 
to other taxes, there shall be imposed for each taxable year, on the 
self-emplo5anent income of every individual, a tax equal to the 
following percent of the amount of the self-emplojnnent income for 
such taxable year: 
"In the case of a taxable year 
Beginning after: 
And before: 
Percent: 
December 31,1983 
January 1,1988 
11.40 
December 31,1987 
January 1,1990 
12.12 
December 31,1989 
12.40 
"(b) HOSPITAL INSURANCE.—In addition to the tax imposed by the 
preceding subsection, there shall be imposed for each taxable year, 
on the self-employment income of every individual, a tax equal to 
the following percent of the amount of the self-emplojnnent income 
for such taxable year: 
"In the case of a taxable year 
Beginning aften 
And before: 
Percent: 
December 31,1983 
January 1,1985 
2.60 
December 31,1984 
January 1,1986 
2.70 
December 31,1985 
2.90." 
(b) CREDIT FOR YEARS BEFORE 1990 AGAINST SELF-EMPLOYMENT 
TAXES.—Section 1401 of such Code is amended by redesignating 
subsection (c) as subsection (d) and by inserting after subsection O
t
>
) 
the following new subsection: 
"(c) CREDIT AGAINST TAXES IMPOSED BY THIS SECTION.— 
"(1) IN GENERAL.—In the case of a taxable year beginning 
before 1990, there shall be allowed as a credit against the taxes 
imposed by this section for any taxable year an amount equal to 
97 STAT. 90 
PUBLIC LAW 98-21—APR. 20, 1983 
the applicable percentage of the self-employment income of the 
individual for such taxable year. 
"(2) APPLICABLE PERCENTAGE.—For purposes of paragraph (1), 
the applicable percentage shall be determined in accordance 
with the following table: 
"In the case of taxable 
The applicable 
years begrinning in: 
percentage is: 
1984 
2.7 
1985 
2.3 
1986,1987, 
1988, 
or 
1989 
2.0." 
(c) ALLOWANCE OF DEDUCTION FOR YEARS AFTER 1989 FOR ONE-
HALF OF TAXES ON SELF-EMPLOYMENT INCOME.— 
26 use 164. 
(1) IN GENERAL.—Section 164 of such Code (relating to deduc-
tion for taxes) is amended by redesignating subsection (f) as 
subsection (g) and by inserting after subsection (e) the following 
new subsection: 
"(f) DEDUCTION FOR ONE-HALF OF SELF-EMPLOYMENT TAXES.— 
"(1) IN GENERAL.—In the case of an individual, in addition to 
the taxes described in subsection (a), there shall be allowed as a 
deduction for the taxable year an amount equal to one-half of 
the taxes imposed by section 1401 for such taxable year. 
"(2) DEDUCTION TREATED AS ATTRIBUTABLE TO TRADE OR BUSI-
NESS.—For purposes of this chapter, the deduction allowed by 
paragraph (1) shall be treated as attributable to a trade or 
business carried on by the taxpayer which does not consist of 
the performance of services by the taxpayer as an employee." 
(2) ALTERNATIVE DEDUCTION ALLOWED IN COMPUTING SELF-EM-
26 use 1402. 
PLOYMENT TAXES.—Subsection (a) of section 1402 of such Code 
(defining net earnings from self-employment) is amended by 
striking out "and" at the end of paragraph (11), by redes-
ignating paragraph (12) as paragraph (13), and by inserting 
after paragraph (11) the following new paragraph: 
"(12) in lieu of the deduction provided by section 164(f) (relat-
ing to deduction for one-half of self-emplojnnent taxes), there 
shall be allowed a deduction equal to the product of— 
"(A) the taxpayer's net earnings from self-employment 
for the taxable year (determined without regard to this 
paragraph), and 
"(B) one-half of the sum of the rates imposed by subsec-
tions (a) and (b) of section 1401 for such year; and". 
(3) CONFORMING AMENDMENT TO SOCIAL SECURITY ACT.—Sub-
42 use 411. 
section (a) of section 211 of the Social Security Act is amended 
by striking out "and" at the end of paragraph (10), by redes-
ignating paragraph (11) as paragraph (12), and by inserting 
after paragraph (10) the following new paragraph: 
"(11) In lieu of the deduction provided by section 164(f) of the 
Internal Revenue Code of 1954 (relating to deduction for one-
half of self-employment taxes), there shall be allowed a deduc-
tion equal to the product of— 
"(A) the taxpayer's net earnings from self-employment 
for the taxable year (determined without regard to this 
paragraph), and 
"(B) one-half of the sum of the rates imposed by subsec-
tions (a) and (b) of section 1401 of such Code for such year; 
and". 
Supra. 
(4) SECTION 164(F) DEDUCTION TAKEN INTO ACCOUNT IN COM-
PUTING EARNED INCOME.— 
PUBLIC LAW 98-21—APR. 20, 1983 
97 STAT. 91 
(A) Subparagraph (A) of section 401(cX2) of such Code 96 Stat. 513. 
(defining earned income) is amended by striking out "and" ^6 use 40i. 
at the end of clause (iv), by striking out the period at the 
end of clause (v) and inserting in lieu thereof '\ and", and 
by inserting after clause (v) the following new clause: 
"(vi) with regard to the deduction allowed to the 
taxpayer by section 164(f)." 
^nte, p. 90. 
(B) Clause (ii) of section 43(c)(2XA) of such Code is 26 use 43. 
amended by inserting before the period ", but such net 
earnings shall be determined with regard to the deduction 
allowed to the taxpayer by section 164(f)". 
(5) CONFORMING AMENDMENT.—Subsection (a) of section 275 of 26 use 275. 
such Code (relating to denial of deduction for certain taxes) is 
amended by adding at the end thereof the following new sen-
tence: 
"Paragraph (1) shall not apply to any taxes to the extent such taxes 
are allowable as a deduction under section 164(f)." 
(d) EFFECTIVE DATES.— 
26 use I40i 
(1) IN GENERAL.—Except as provided in paragraph (2), the "°^-
amendments made by this section shall apply to taxable years 
beginning after December 31,1983. 
(2) SUBSECTION (C) .—The amendments made by subsection (c) 
shall apply to taxable years beginning after December 31, 1989. 
SEC. 125. TREATMENT OF CERTAIN FACULTY PRACTICE PLANS. 
26 USC 3121 
(a) GENERAL RULE.—For purposes of subsection (s) of section 3121 
of the Internal Revenue Code of 1954 (relating to concurrent employ-
ment by 2 or more employers)— 
(1) the following entities shall be deemed to be related corpo-
rations: 
(A) a State university which employs health professionals 
as faculty members at a medical school, and 
(B) a faculty practice plan described in section 501(c)(3) of 
such Code and exempt from tax under section 501(a) of such 
Code— 
(i) which employs faculty members of such medical 
school, and 
(ii) 30 percent or more of the employees of which are 
concurrently employed by such medical school; and 
(2) remuneration which is disbursed by such faculty practice 
plan to a health professional employed by both such entities 
shall be deemed to have been actually disbursed by such univer-
sity as a common paymaster and not to have been actually 
disbursed by such faculty practice plan. 
(b) EFFECTIVE DATE.—The provisions of subsection (a) shall apply 
to remuneration paid after December 31,1983. 
ALLOCATIONS TO DISABIUTY INSURANCE TRUST FUND 
SEC. 126. (a) Section 201(b)(1) of the Social Security Act is amended 42 use 40i. 
by striking out clauses (K) through (M) and inserting in lieu thereof 
the following: "(K) 1.65 per centum of the wages (as so defined) paid 
after December 31, 1981, and before January 1, 1983, and so 
reported, (L) 1.25 per centum of the wages (as so defined) paid after 
December 31, 1982, and before January 1, 1984, and so reported, (M) 
1.00 per centum of the wages (as so defined) paid after December 31, 
1983, and before January 1, 1988, and so reported, (N) 1.06 per 
97 STAT. 92 
PUBLIC LAW 98-21—APR. 20, 1983 
centum of the wages (as so defined) paid after December 31, 1987, 
and before January 1, 1990, and so reported, (O) 1.20 per centum of 
the wages (as so defined) paid after December 31, 1989, and before 
January 1, 2000, and so reported, and (P) 1.42 per centum of the 
wages (as so defined) paid after December 31, 1999, and so 
reported,". 
42 use 401. 
(b) Section 2010t))(2) of such Act is amended by striking out clauses 
(K) through (M) and inserting in lieu thereof the following: "(K) 
1.2375 per centum of the amount of self-employment income (as so 
defined) so reported for any taxable year beginning after December 
31, 1981, and before January 1, 1983, (L) 0.9375 per centum of the 
amount of self-employment income (as so defined) so reported for 
any taxable year beginning after December 31, 1982, and before 
January 1, 1984, (M) 1.00 per centum of the amount of self-employ-
ment income (as so defined) so reported for any taxable year begin-
ning after December 31, 1983, and before January 1, 1988, (N) 1.06 
per centum of the self-employment income (as so defined) so 
reported for any taxable year beginning after December 31, 1987, 
and before January 1, 1990, (O) 1.20 per centum of the amount of 
self-employment income (as so defined) so reported for any taxable 
year beginning after December 31,1989, and before January 1, 2000, 
and (P) 1.42 per centum of the self-employment income (as so 
defined) so reported for any taxable year beginning after December 
31,1999,". 
PART D—BENEFITS FOR CERTAIN SURVIVING, DIVORCED, AND 
DISABLED SPOUSES 
BENEFITS FOR SURVIVING DIVORCED SPOUSES AND DISABLED WIDOWS 
AND WIDOWERS WHO REMARRY 
42 use 402. 
SEC. 131. (a)(1) Section 202(e)(3) of the Social Security Act is 
repealed. 
(2) Section 202(e)(4) of such Act is amended to read as follows: 
"(4) For purposes of paragraph (1), i
f
— 
"(A) a widow or surviving divorced wife marries after attain-
ing age 60 (or after attaining age 50 if she was entitled before 
such marriage occurred to benefits based on disability under 
this subsection), or 
"(B) a disabled widow or disabled surviving divorced wife 
described in paragraph (l)(B)(ii) marries after attaining age 50, 
such marriage shall be deemed not to have occurred.". 
(3)(A) Section 202(e) of such Act is further amended by redes-
ignating paragraph (4) (as amended by paragraph (2) of this subsec-
tion), and paragraphs (5) through (8), as paragraphs (3) through (7), 
respectively. 
(B) Section 202(e)(l)(B)(ii) of such Act is amended by striking out 
"(5)" and inserting in lieu thereof "(4)". 
(C) Section 202(e)(1)(F) of such Act is amended by striking out "(6)" 
in clause (i) and "(5)" in clause (ii) and inserting in lieu thereof "(5)" 
and "(4)", respectively. 
(D) Section 202(e)(2)(A) of such Act is amended by striking out 
"(8)" and inserting in lieu thereof "(7)". 
(E) The paragraph of section 202(e) of such Act redesignated as 
paragraph (5) by subparagraph (A) of this paragraph is amended by 
striking out "(5)" and inserting in lieu thereof "(4)". 
PUBLIC LAW 98-21—APR. 20, 1983 
97 STAT. 93 
(F) The paragraph of such section 202(e) redesignated as para-
graph (7) by subparagraph (A) of this paragraph is amended by 
striking out "(4)" and inserting in lieu thereof "(3r. 
(G) Section 202(k) of such Act is amended by striking out "(eX4)" 
each place it appears in paragraphs (2XB) and (3XB) and inserting in 
lieu thereof "(eX3)". 
(H) Section 226(eXlXA) of such Act is amended by striking out 
"202(eX5)" and inserting in lieu thereof "202(eX4)". 
O
b
X
D Section 202(f)(4) of such Act is repealed. 
(2) Section 202(fK5) of such Act is amended to read as follows: 
"(5) For purposes of paragraph (1), i
f
— 
"(A) a widower marries after attaining age 60 (or after attain-
ing age 50 if he was entitled before such marriage occurred to 
benefits based on disability under this subsection), or 
"(B) a disabled widower described in paragraph (IXBXii) mar-
ries after attaining age 50, 
such marriage shall be deemed not to have occurred.". 
(3XA) Section 202(D of such Act is further amended by redes-
ignating paragraph (5) (as amended by paragraph (2) of this subsec-
tion), and paragraphs (6) through (8), as paragraphs (4) through (7), 
respectively. 
(B) Section 202(f)(IXBXii) of such Act is amended by striking out 
"(6)" and inserting in lieu thereof "(5)". 
(C) Section 202(f)(lXF) of such Act is amended by striking out "(7)" 
in clause (i) and "(6)" in clause (ii) and inserting in lieu thereof "(6)" 
and "(5)", respectively. 
(D) Section 202(f)(2XA) of such Act is amended by striking out "(5)" 
and inserting in lieu thereof "(4)". 
(E) The paragraph of section 202(f) of such Act redesignated as 
paragraph (6) by subparagraph (A) of this paragraph is amended by 
striking out "(6)" and inserting in lieu thereof "(5)". 
(F) Section 202(k) of such Act is amended by striking out "(fK5)" 
each place it appears in paragraphs (2XB) and (3XB) and inserting in 
lieu thereof "(f)(4)". 
(G) Section 226(eXl)(A) of such Act is amended by striking out 
"202(f)(6)" and inserting in lieu thereof "202(f)(5)". 
(cXD Section 202(sX2) of such Act is amended by striking out 
"Subsection (f)(4), and so much of subsections (bX3), (dX5), (eX3), 
(gX3), and (h)(4)" and inserting in lieu thereof "So much of subsec-
tions (bX3), (dX5), (gX3), and (h)(4)". 
(2) Section 202(sX3) of such Act is amended by striking out "(eX3),". 
(dXD The amendments made by this section shall be effective with 
respect to monthly benefits payable under title II of the Social 
Security Act for months after December 1983. 
(2) In the case of an individual who was not entitled to a monthly 
benefit of the type involved under title II of such Act for December 
1983, no benefit shall be paid under such title by reason of such 
amendments unless proper application for such benefit is made. 
42 u s e 402. 
42 u s e 426. 
Effective date. 
42 u s e 402 note. 
42 u s e 401. 
ENTITLEMENT TO DIVORCED SPOUSE S BENEFITS WITHOUT REGARD TO 
ENTITLEMENT OF INSURED INDIVIDUAL TO BENEFITS; EXEMPTION OF 
DIVORCED SPOUSE'S BENEFITS FROM DEDUCTION ON ACCOUNT OF 
WORK 
SEC 132. (a) Section 202(b) of the Social Security Act is amended 
by adding at the end thereof the following new paragraph: 
42 u s e 402. 
97 STAT. 94 
PUBLIC LAW 98-21—APR. 20, 1983 
"(5)(A) Notwithstanding the preceding provisions of this subsec-
tion, except as provided in subparagraph (B), the divorced wife of an 
individual who is not entitled to old-age or disability insurance 
benefits, but who has attained s^e 62 and is a fully insured indi-
42 use 414. 
vidual (as defined in section 214), if such divorced wife— 
"(i) meets the requirements of subparagraphs (A) through (D) 
of paragraph (1), and 
(ii) has been divorced from such insured individual for not 
less than 2 years, 
shall be entitled to a wife's insurance benefit under this subsection 
for each month, in such amount, and beginning and ending with 
such months, as determined (under regulations of the Secretary) in 
the manner otherwise provided for wife's insurance benefits under 
this subsection, as if such insured individual had become entitled to 
old-age insurance benefits on the date on which the divorced wife 
first meets the criteria for entitlement set forth in clauses (i) and (ii). 
"(B) A wife's insurance benefit provided under this paragraph 
which has not otherwise terminated in accordance with subpara-
graph (E), (F), (H), or (J) of paragraph (1) shall terminate with the 
month preceding the first month in which the insured individual is 
no longer a fully insured individual.". 
42 use 403. 
(b)(1)(A) Section 203(b) of such Act is amended— 
(i) by inserting "(1)" after "(b)"; 
(ii) by striking out "(1) such individual's benefit" and "(2) if 
such individual' and inserting in lieu thereof "(A) such individ-
ual's benefit" and "(B) if such individual", respectively; 
(iii) by striking out "clauses (1) and (2)" and inserting in lieu 
thereof "clauses (A) and (B)"; 
(iv) by striking out "(A) an individual" and "(B) if a deduc-
tion" and inserting in lieu thereof "(i) an individual" and "(ii) if 
a deduction", respectively; and 
(v) by adding at the end thereof the following new paragraph: 
"(2) When any of the other persons referred to in paragraph (1)(B) 
is entitled to monthly benefits as a divorced spouse under section 
42 use 402. 
202 (b) or (c) for any month and such person has been so divorced for 
not less than 2 years, the benefit to which he or she is entitled on 
the basis of the wages and self-employment income of the individual 
referred to in paragraph (1) for such month shall be determined 
without regard to deductions under this subsection as a result of 
excess earnings of such individual, and the benefits of all other 
individuals who are entitled for such month to monthly benefits 
under section 202 on the basis of the wages and self-employment 
income of such individual referred to in pareigraph (1) shall be 
determined as if no such divorced spouse were entitled to benefits 
for such month.". 
(B)(i) Section 203(fKl) of such Act is amended— 
(I) in the first sentence, by inserting "(excluding divorced 
spouses referred to in subsection (b)(2)) after "all other per-
sons" the first place it appears, and by striking out "all other 
persons" the second place it appears and inserting in lieu 
thereof "all such other persons"; and 
(II) in the second sentence, by inserting "(excluding divorced 
spouses referred to in subsection (b)(2))" after "other persons". 
(ii) Section 203(f)(7) of such Act is amended by inserting "(exclud-
ing divorced spouses referred to in subsection (bX2))" after "all 
persons". 
(2) Section 203(d)(1) of such Act is amended— 
PUBLIC LAW 98-21—APR. 20, 1983 
97 STAT. 95 
(A) by inserting "(A)" after "(dXD"; and 
(B) by adding at the end thereof the following new subpara-
graph: 
"(B) When any divorced spouse is entitled to monthly benefits 
under section 202 (b) or (c) for any month and such divorced spouse 42 use 402. 
has been so divorced for not less than 2 years, the benefit to which 
he or she is entitled for such month on the basis of the wages and 
self-employment income of the individual entitled to old-age insur-
ance benefits referred to in subparagraph (A) shall be determined 
without regard to deductions under this paragraph as a result of 
excess earnings of such individual, and the benefits of all other 
individuals who are entitled for such month to monthly benefits 
under section 202 on the basis of the wages and self-employment 
income of such individual referred to in subparagraph (A) shall be 
determined as if no such divorced spouse were entitled to benefits 
for such month.". 
(c)(1) The amendments made by subsection (a) shall apply with 
respect to monthly insurance benefits for months after December 
1984, but only on the basis of applications filed on or after January 
1,1985. 
(2) The amendments made by subsection (b) shall apply with 
respect to monthly insurance benefits for months after December 
1984. 
Effective date. 
42 u s e 402 note. 
Effective date. 
42 u s e 403 note. 
INDEXING OF DEFERRED SURVIVING SPOUSE S BENEFITS TO RECENT 
WAGE LEVELS 
SEC. 133. (a)(1) Section 202(e)(2) of the Social Security Act is 42 use 402. 
amended— 
(A) by redesignating subparagraph (B) as subparagraph (D); 
and 
(B) by striking out "(2)(A) Except" and all that follows down 
through "If such deceased individual" and inserting in lieu 
thereof the following: 
"(2)(A) Except as provided in subsection (q), paragraph (8) of this 
subsection, and subparagraph (D) of this paragraph, such widow's 
insurance benefit for each month shall be equal to the primary 
insurance amount (as determined for purposes of this subsection 
after application of subparagraphs (B) and (O) of such deceased 
individual. 
"(B)(i) For purposes of this subsection, in any case in which such 
deceased individual dies before attaining age 62 and section 215(a)(1) 42 use 415. 
(as in effect after December 1978) is applicable in determining such 
individual's primary insurance amount— 
^ 
"(I) such primary insurance amount shall be determined 
under the formula set forth in section 215(aXl)(B) (i) and (ii) 
which is applicable to individuals who initially become eligible 
for old-ag:e insurance benefits in the second year after the year 
specified in clause (ii), 
"(II) the year specified in clause (ii) shall be substituted for 
the second calendar year specified in section 215(b)(3)(A)(ii)(I), 
and 
"(III) such primary insurance amount shall be increased 
under section 215(i) as if it were the primary insurance amount 
referred to in section 215(i)(2)(A)(ii)(II), except that it shall be 
increased only for years beginning after the first year after the 
year specified in clause (ii). 
97 STAT. 96 
PUBLIC LAW 98-21—APR. 20, 1983 
"(ii) The year specified in this clause is the earlier o
f
— 
"(I) the year in which the deceased individual attained age 60, 
or would have attained age 60 had he lived to that age, or 
"(II) the second year preceding the year in which the widow or 
surviving divorced wife first meets the requirements of para-
graph (1)(B) or the second year preceding the year in which the 
deceased individual died, whichever is later, 
"(iii) This subparagraph shall apply with respect to any benefit 
under this subsection only to the extent its application does not 
result in a primary insurance amount for purposes of this subsection 
which is less than the primary insurance amount otherwise deter-
42 use 415. 
mined for such deceased individual under section 215. 
"(C) If such deceased individual.". 
(2) Section 202(e) of such Act (as amended by paragraph (1) of this 
subsection) is further amended— 
(A) in paragraph (1)(D) and in the matter in paragraph (1) 
following subparagraph (F)(ii), by inserting "(as determined 
after application of subparagraphs (B) and (C) of paragraph (2))" 
after "primary insurance amount"; and 
(B) in paragraph (2)(D)(ii), by inserting "(as determined with-
out regard to subparagraph (C))" after "primary insurance 
amount". 
42 use 402. 
(b)(1) Section 202(f)(3) of such Act is amended— 
(A) by redesignating subparagraph (B) as subparagraph (D); 
and 
(B) by striking out "(3)(A) Except" and all that follows down 
through "If such deceased individual" and inserting in lieu 
thereof the following: 
"(3)(A) Except as provided in subsection (q), paragraph (2) of this 
subsection, and subparagraph (D) of this paragraph, such widower's 
insurance benefit for each month shall be equal to the primary 
insurance amount (as determined for purposes of this subsection 
after application of subparagraphs (B) and (O) of such deceased 
individual. 
"(B)(i) For purposes of this subsection, in any case in which such 
deceased individual dies before attaining age 62 and section 215(a)(1) 
(as in effect after December 1978) is applicable in determining such 
individual's primary insurance amount— 
"(I) such primary insurance amount shall be determined 
under the formula set forth in section 215(a)(lXB) (i) and (ii) 
which is applicable to individuals who initially become eligible 
for old-age insurance benefits in the second year after the year 
specified in clause (ii), 
"(II) the year specified in clause (ii) shall be substituted for 
the second calendar year specified in section 215(b)(3)(A)(iiXI), 
and 
"(III) such primary insurance amount shall be increased 
under section 215(i) as if it were the primary insurance amount 
referred to in section 215(i)(2)(A)(ii)(II), except that it shall be 
increased only for years beginning after the first year after the 
year specified in clause (ii). 
"(ii) The year specified in this clause is the earlier o
f
— 
"(I) the year in which the deceased individual attained age 60, 
or would have attained age 60 had she lived to that age, or 
"(II) the second year preceding the year in which the widower 
first meets the requirements of paragraph dXB) or the second 
PUBLIC LAW 98-21—APR. 20, 1983 
97 STAT. 97 
42 u s e 415. 
year preceding the year in which the deceased individual died, 
whichever is later. 
"(iii) This subparagraph shall apply with respect to any benefit 
under this subsection only to the extent its application does not 
result in a primary insurance amount for purposes of this subsection 
which is less than the primary insurance amount otherwise deter-
mined for such deceased individual under section 215. 
"(C) If such deceased individual.". 
(2) Section 202(f) of such Act (as amended by paragraph (1) of this 42 use 402 
subsection) is further amended— 
(A) in paragraph (1)(D) and in the matter in paragraph (1) 
following subparagraph (F)(ii), by inserting "(as determined 
after application of subparagraphs (B) and (C) of paragraph (3))" 
after "primary insurance amount"; and 
(B) in paragraph (3XD)(ii), by inserting "(as determined with-
out regard to subparagraph (C))" after "primary insurance 
amount". 
(c) The amendments made by this section shall apply with respect 
to monthly insurance benefits for months after December 1984 for 
individuals who first meet all criteria for entitlement to benefits 
under section 202 (e) or (f) of the Social Security Act (other than 
making application for such benefits) after December 1984. 
Effective date. 
42 u s e 402 note. 
LIMITATION ON BENEFIT REDUCTION FOR EARLY RETIREMENT IN CASE 
OF DISABLED WIDOWS AND WIDOWERS 
SEC. 134. (a)(1) Section 202(q)(l) of the Social Security Act is 42 use 402. 
amended by striking out the semicolon at the end of subparagraph 
(B)(ii) and all that follows and inserting in lieu thereof a period. 
(2)(A) Section 202(q)(6) of such Act is amended to read as follows: 
"(6) For purposes of this subsection, the 'reduction period' for an 
individual's old-age, wife's, husband's, widow's, or widower's insur-
ance benefit is the period— 
"(A) beginning— 
"(i) in the case of an old-age or husband's insurance 
benefit, with the first day of the first month for which such 
individual is entitled to such benefit, 
"(ii) in the case of a wife's insurance benefit, with the 
first day of the first month for which a certificate described 
in paragraph (5)(A)(i) is effective, or 
(iii) in the case of a widow's or widower's insurance 
benefit, with the first day of the first month for which such 
individual is entitled to such benefit or the first day of the 
month in which such individual attains age 60, whichever is 
the later, and 
"(B) ending with the last day of the month before the month 
in which such individual attains retirement age.". 
(B) Section 202(q)(3XG) of such Act is amended by striking out 
"paragraph (6XA) (or, if such paragraph does not apply, the period 
specified in paragraph (6XB))" and inserting in lieu thereof para-
graph (6)". 
(C) Section 202(q) of such Act is further amended, in paragraphs 
(IXBXi), (3XEXii), and (3XFXiiXI), by striking out "paragraph (6XA)" 
and inserting in lieu thereof "paragraph (6) . 
(3) Section 202(qX7) of such Act is amended by striking out the 
matter preceding subparagraph (A) and inserting in lieu thereof the 
following: 
11-194 0 - 8 5 
— 5 : Q
L 3 
97 STAT. 98 
PUBLIC LAW 98-21—APR. 20, 1983 
42 u s e 402. 
95 Stat. 1660. 
Effective date. 
42 u s e 402 note. 
"(7) For purposes of this subsection, the 'adjusted reduction 
period' for an individual's old-age, wife's, husband's, widow's, or 
widower's insurance benefit is the reduction period prescribed in 
paragraph (6) for such benefit, excluding—". 
(4) Section 202(q)(10) of such Act is amended— 
(A) in that part of the second sentence preceding clause (A), 
by striking out "or an additional adjusted reduction period"; 
(B) in clauses (B)(i) and (CXi), by striking out ", plus the 
number of months in the adjusted additional reduction period 
multiplied by ''%4o of 1 percent"; 
(C) in clause (B)(ii), by striking out "plus the number of 
months in the additional reduction period multiplied by *%4o of 
1 percent,"; and 
(D) in clause (C)(ii), by striking out "plus the number of 
months in the adjusted additional reduction period multiplied 
by *%4o of 1 percent.". 
(b) Section 202(m)(2)(B) of such Act (as applicable after the enact-
ment of section 2 of Public Law 97-123) is amended by striking out 
"subsection (q)(6)(A)(ii)" and inserting in lieu thereof "subsection 
(q)(6)(B)". 
(c) The amendments made by this section shall apply with respect 
to benefits for months after December 1983. 
PART E—MECHANISMS TO ASSURE CONTINUED BENEFIT PAYMENTS IN 
UNEXPECTEDLY ADVERSE CONDITIONS 
NORMALIZED CREDITING OF SOCIAL SECURITY TAXES TO TRUST FUNDS 
42 use 401. 
SEC. 141. (a)(1) The last sentence of section 201(a) of the Social 
Security Act is amended— 
(A) by striking out "from time to time" each place it appears 
and inserting in lieu thereof "monthly on the first day of each 
calendar month"; and 
(B) by striking out "paid to or deposited into the Treasury" 
and inserting in lieu thereof "to be paid to or deposited into the 
Treasury during such month". 
(2) Section 201(a) of such Act is further amended by adding at the 
end thereof the following new sentence: "All amounts transferred to 
either Trust Fund under the preceding sentence shall be invested by 
the Managing Trustee in the same manner and to the same extent 
as the other assets of such Trust Fund; and such Trust Fund shall 
pay interest to the general fund on the amount so transferred on the 
first day of any month at a rate (calculated on a daily basis, and 
applied against the difference between the amount so transferred on 
such first day and the amount which would have been transferred to 
the Trust Fund up to that day under the procedures in effect on 
January 1, 1983) equal to the rate earned by the investments of such 
Fund in the same month under subsection (d).". 
42 use 13951. 
(b)(1) The last sentence of section 1817(a) of such Act is amended— 
(A) by striking out "from time to time" and inserting in lieu 
thereof "monthly on the first day of each calendar month"; and 
(B) by striking out "paid to or deposited into the Treasury" 
and inserting in lieu thereof "to be paid to or deposited into the 
Treasury during such month". 
(2) Section 1817(a) of such Act is further amended by adding at the 
end thereof the following new sentence: "All amounts transferred to 
the Trust Fund under the preceding sentence shall be invested by 
PUBLIC LAW 98-21—APR. 20, 1983 
97 STAT. 99 
Effective date. 
42 u s e 401 note. 
the Managing Trustee in the same manner and to the same extent 
as the other assets of the Trust Fund; and the Trust Fund shall pay 
interest to the general fund on the amount so transferred on the 
first day of any month at a rate (calculated on a daily basis, and 
applied against the difference between the amount so transferred on 
such first day and the amount which would have been transferred to 
the Trust Fund up to that day under the procedures in effect on 
January 1, 1983) equal to the rate earned by the investments of the 
Trust Fund in the same month under subsection (c).". 
(c) The amendments made by this section shall become effective 
on the first day of the month following the month in which this Act 
is enacted. 
INTERFUND BORROWING EXTENSION 
SEC. 142. (a)(1) Section 201(1)(1) of the Social Security Act is 42USC40i 
amended— 
(A) by striking out "January 1983" and inserting in lieu 
thereof "January 1988"; and 
(B) by inserting after "or" the second place it appears ", 
subject to paragraph (5),". 
(2) (A) Section 201(1)(2) of such Act is amended— 
(i) by striking out "from time to time" and inserting in lieu 
thereof "on the last day of each month after such loan is made"; 
(ii) by striking out "interest" and inserting in lieu thereof 
"the total interest accrued to such day"; and 
(iii) by inserting before the period at the end thereof the 
following: "(even if such an investment would earn interest at a 
rate different than the rate earned by investments redeemed by 
the lending fund in order to make the loan)". 
(B) The amendment made by this paragraph shall apply with 
respect to months beginning more than thirty days after the date of 
enactment of this Act. 
(3) Section 201(1)(3) of such Act is amended— 
(A) by inserting "(A)" after the paragraph designation; and 
(B) by adding at the end thereof the following new subpara-
graphs: 
"(B)(i) If on the last day of any year after a loan has been made 
under paragraph (1) by the Federal Hospital Insurance Trust Fund 
to the Federal Old-Age and Survivors Trust Fund or the Federal 
Disability Insurance Trust Fund, the Managing Trustee determines 
that the OASDI trust fund ratio exceeds 15 percent, he shall trans-
fer from the borrowing Trust Fund to the Federal Hospital Insur-
ance Trust Fund an amount that— 
"(I) together with any amounts transferred from another 
borrowing Trust Fund under this paragraph for such year, will 
reduce the OASDI trust fund ratio to 15 percent; and 
"(II) does not exceed the outstanding balance of such loan. 
"(ii) Amounts required to be transferred under clause (i) shall be 
transferred on the last day of the first month of the year succeeding 
the year in which the determination described in clause (i) is made, 
"(iii) For purposes of this subparagraph, the term 'OASDI trust 
fund ratio' means, with respect to any calendar year, the ratio of— 
"(I) the combined balance in the Federal Old-Age and Survi-
vors Insurance Trust Fund and the Federal Disability Insurance 
Trust Fund, as of the last day of such calendar year, to 
"(II) the amount estimated by the Secretary to be the total 
amount to be paid from the Federal Old-Age and Survivors 
Effective date. 
42 u s e 401 note. 
97 STAT. 100 
PUBLIC LAW 98-21—APR. 20, 1983 
Insurance Trust Fund and the Federal Disability Insurance 
Trust Fund during the calendar year following such calendar 
year for all purposes authorized by section 201 (other than 
payments of interest on, and repayments of, loans from the 
Federal Hospital Insurance Trust Fund under paragraph (1), 
but excluding any transfer payments between such trust funds 
and reducing the amount of any transfer to the Railroad Retire-
ment Account by the amount of any transfers into either such 
trust fund from that Account). 
Repayment date. 
"(C)(i) The full amount of all loans made under paragraph (1) 
(whether made before or after January 1, 1983) shall be repaid at 
the earliest feasible date and in any event no later than Decem-
ber 31, 1989. 
"(ii) For the period after December 31,1987, and before January 1, 
1990, the Managing Trustee shall transfer each month to the Fed-
eral Hospital Insurance Trust Fund from any Trust Fund with any 
amount outstanding on a loan made from the Federal Hospital 
Insurance Trust Fund under paragraph (1) an amount not less than 
an amount equal to (I) the amount owed to the Federal Hospital 
Insurance Trust Fund by such Trust Fund at the beginning of such 
month (plus the interest accrued on the outstanding balance of such 
loan during such month), divided by (II) the number of months 
elapsing after the preceding month and before January 1990. The 
Managing Trustee may, during this period, transfer larger amounts 
than prescribed by the preceding sentence.". 
42 use 401. 
(4) Section 201(1) of such Act is further amended by adding at the 
end thereof the following new paragraph: 
"(5)(A) No amounts may be borrowed from the Federal Hospital 
Insurance Trust Fund under paragraph (1) during any month if the 
Hospital Insurance Trust Fund ratio for such month is less than 10 
percent. 
"(B) For purposes of this paragraph, the term 'Hospital Insurance 
Trust Fund ratio' means, with respect to any month, the ratio o
f
— 
"(i) the balance in the Federal Hospital Insurance Trust 
Fund, reduced by the outstanding amount of any loan (including 
interest thereon) theretofore made to such Trust Fund under 
this subsection, as of the last day of the second month preceding 
such month, to 
"(ii) the amount obtained by multiplying by twelve the total 
amount which (as estimated by the Secretary) will be paid from 
the Federal Hospital Insurance Trust Fund during the month 
for which such ratio is to be determined (other than payments 
of interest on, or repayments of loans from another Trust Fund 
^ 
under this subsection), and reducing the amount of any trans-
fers to the Railroad Retirement Account by the amount of any 
transfer into the Hospital Insurance Trust Fund from that 
Account.". 
42 use 13951. 
(b)(1) Section 1817(jXl) of such Act is amended— 
(A) by striking out "January 1983" and inserting in lieu 
thereof "January 1988"; and 
(B) by inserting ", subject to paragraph (5)," after "may". 
(2XA) Section 1817(j)(2) of such Act is amended— 
(i) by striking out "from time to time" and inserting in lieu 
thereof "on the last day of each month after such loan is made"; 
(ii) by striking out "interest" and inserting in lieu thereof 
"the total interest accrued to such day"; and 
"Hospital 
Insurance Trust 
Fund ratio." 
PUBLIC LAW 98-21—APR. 20, 1983 
97 STAT. 101 
Effective date. 
42 u s e 13951 
note. 
42 u s e 1395i. 
"Hospital 
Insurance Trust 
Fund ratio." 
(iii) by inserting before the period at the end thereof the 
following: "(even if such an investment would earn interest at a 
rate different than the rate earned by investments redeemed by 
the lending fund in order to make the loan)". 
(B) The amendment made by this paragraph shall apply with 
respect to months beginning more than 30 days after the date of 
enactment of this Act. 
(3) Section 1817(j)(3) of such Act is amended— 
(A) by inserting "(A)" after the paragraph designation; and 
(B) by adding at the end thereof the following new subpara-
graphs: 
"(B)(i) If on the last day of any year after a loan has been made 
under paragraph (1) by the Federal Old-Age and Survivors Insur-
ance Trust Fund or the Federal Disability Insurance Trust Fund to 
the Federal Hospital Insurance Trust Fund, the Managing Trustee 
determines that the Hospital Insurance Trust Fund ratio exceeds 15 
percent, he shall transfer from such Trust Fund to the lending trust 
fund an amount that— 
"(I) together with any amounts transferred to another lending 
trust fund under this paragraph for such year, will reduce the 
Hospital Insurance Trust Fund ratio to 15 percent; and 
"(II) does not exceed the outstanding balance of such loan. 
"(ii) Amounts required to be transferred under clause (i) shall be 
transferred on the last day of the first month of the year succeeding 
the year in which the determination described in clause (i) is made. 
"(iii) For purposes of this subparagraph, the term 'Hospital Insur-
ance Trust Fund ratio' means, with respect to any calendar year, 
the ratio o
f
— 
"(I) the balance in the Federal Hospital Insurance Trust 
Fund, as of the last day of such calendar year; to 
"(II) the amount estimated by the Secretary to be the total 
amount to be paid from the Federal Hospital Insurance Trust 
Fund during the calendar year following such calendar year 
(other than payments of interest on, and repayments of, loans 
from the Federal Old-Age and Survivors Insurance Trust Fund 
and the Federal Disability Insurance Trust Fund under para-
graph (D), and reducing the amount of any transfer to the 
Railroad Retirement Account by the amount of any transfers 
into such Trust Fund from the Railroad Retirement Account. 
"(C)(i) The full amount of all loans made under paragraph (1) Repayment date 
(whether made before or after January 1, 1983) shall be repaid at 
the earliest feasible date and in any event no later than Decem-
ber 31, 1989.". 
"(ii) For the period after December 31,1987 and before January 1, 
1990, the Managing Trustee shall transfer each month from the 
Federal Hospital Insurance Trust Fund to any Trust Fund that is 
owed any amount by the Federal Hospital Insurance Trust Fund on 
a loan made under paragraph (1), an amount not less than an 
amount equal to (I) the amount owed to such Trust Fund by the 
Federal Hospital Insurance Trust Fund at the beginning of such 
month (plus the interest accrued on the outstanding balance of such 
loan during such month), divided by (II) the number of months 
elapsing after the preceding month and before January 1990. The 
Managing Trustee may, during this period, transfer larger amounts 
than prescribed by the preceding sentence.". 
(4) Section 1817(j) of such Act is further amended by adding at the 
end thereof the following new paragraph: 
97 STAT. 102 
PUBLIC LAW 98-21—APR. 20, 1983 
"OASDI trust 
fund ratio." 
42 u s e 401. 
"(5)(A) No amounts may be loaned by the Federal Old-Age and 
Survivors Insurance Trust Fund or the Federal Disability Insurance 
Trust Fund under paragraph (1) during any month if the OASDI 
trust fund ratio for such month is less than 10 percent. 
"(B) For purposes of this paragraph, the term 'OASDI trust fund 
ratio' means, with respect to any month, the ratio of^ 
"(i) the combined balance in the Federal Old-Age and Survi-
vors Insurance Trust Fund and the Federal Disability Insurance 
Trust Fund, reduced by the outstanding amount of any loan 
(including interest thereon) theretofore made to either such 
Trust Fund from the Federal Hospital Insurance Trust Fund 
under section 201(1), as of the last day of the second month 
preceding such month, to 
"(ii) the amount obtained by multiplying by twelve the total 
amount which (as estimated by the Secretary) will be paid from 
the Federal Old-Age and Survivors Insurance Trust Fund and 
the Federal Disability Insurance Trust Fund during the month 
for which such ratio is to be determined for all purposes author-
ized by section 201 (other than payments of interest on, or 
repayments of, loans from the Federal Hospital Insurance Trust 
Fund under section 201(1)), but excluding any transfer payments 
between such trust funds and reducing the amount of any 
transfers to the Railroad Retirement Account by the amount of 
any transfers into either such trust fund from that Account.". 
RECOMMENDATIONS BY BOARD OF TRUSTEES TO REMEDY INADEQUATE 
BALANCES IN THE SOCIAL SECURITY TRUST FUNDS 
SEC. 143. Title VII of the Social Security Act is amended by 
adding at the end thereof the following new section: 
Report to 
Congress. 
42 u s e 910. 
26 u s e 1401, 
3101, 3111. 
"Balance ratio.' 
RECOMMENDATIONS BY BOARD OF TRUSTEES TO REMEDY INADEQUATE 
BALANCES IN THE SOCIAL SECURITY TRUST FUNDS 
"SEC. 709. (a) If the Board of Trustees of the Federal Old-Age and 
Survivors Insurance Trust Fund and the Federal Disability Insur-
ance Trust Fund, the Federal Hospital Insurance Trust Fund, or the 
Federal Supplementary Medical Insurance Trust Fund determines 
at any time that the balance ratio of any such Trust Fund for any 
calendar year may become less than 20 percent, the Board shall 
promptly submit to each House of the Congress a report setting 
forth its recommendations for statutory adjustments affecting the 
receipts and disbursements of such Trust Fund necessary to main-
tain the balance ratio of such Trust Fund at not less than 20 
percent, with due regard to the economic conditions which created 
such inadequacy in the balance ratio and the amount of time 
necessary to alleviate such inadequacy in a prudent manner. The 
report shall set forth specifically the extent to which benefits would 
have to be reduced, taxes under section 1401, 3101, or 3111 of the 
Internal Revenue Code of 1954 would have to be increased, or a 
combination thereof, in order to obtain the objectives referred to in 
the preceding sentence. 
"(b) For purposes of this section, the term 'balance ratio' means, 
with respect to any calendar year in connection with any Trust 
Fund referred to in subsection (a), the ratio o
f
— 
"(1) the balance in such Trust Fund, reduced by the outstand-
ing amount of any loan (including interest thereon) theretofore 
PUBLIC LAW 98-21—APR. 20, 1983 
97 STAT. 103 
made to such Trust Fund under section 201(1) or 1817(j), as of 42 use 40i, 
the beginning of such year, to 
^
^
^
^
^
• 
"(2) the total amount which (as estimated by the Secretary) 
will be paid from such Trust Fund during such calendar year for 
all purposes authorized by section 201, 1817, or 1841 (as appli- 42 use I395t. 
cable), other than payments of 
interest on, or repayments of, loans 
under section 201(1) or 1817(j), but excluding any transfer pay-
ments between such Trust Fund and any other Trust Fund 
referred to in subsection (a) and reducing the amount of any 
transfers to the Railroad Retirement Account by the amount of 
any transfers into such Trust Fund from that Account.". 
PART F—OTHER FINANCING AMENDMENTS 
FINANCING OF NONCONTRIBUTORY MILITARY WAGE CREDITS 
SEC. 151. (a) Section 217(g) of the Social Security Act is amended to 42 use 417. 
read as follows: 
"Appropriation to Trust Funds 
"(g)(1) Within thirty days after the date of the enactment of the 
Social Security Amendments of 1983, the Secretary shall determine 
the amount equal to the excess o
f
— 
"(A) the actuarial present value as of such date of enactment 
of the past and future benefit payments from the Federal Old-
Age and Survivors Insurance Trust Fund, the Federal Disability 
Insurance Trust Fund, and the Federal Hospital Insurance 
Trust Fund under this title and title XVIII, together with 42 use 1395. 
associated administrative costs, resulting from the operation of 
this section (other than this subsection) and section 210 of this 
Act as in effect before the enactment of the Social Security 42 use 4io. 
Amendments of 1950, over 
42 use 1
3
0
5 
"(B) any amounts previously transferred from the general "
°
*
® 
fund of the Treasury to such Trust Funds pursuant to the 
provisions of this subsection as in effect immediately before the 
date of the enactment of the Social Security Amendments of 
1983. 
Such actuarial present value shall be based on the relevant actuar-
ial assumptions set forth in the report of the Board of Trustees of 
each such Trust Fund for 1983 under sections 201(c) and 1817(b). Post,pp.m,m. 
Within thirty days after the date of the enactment of the Social 
Security Amendments of 1983, the Secretary of the Treasury shall 
transfer the amount determined under this paragraph with respect 
to each such Trust Fund to such Trust Fund from amounts in the 
general fund of the Treasury not otherwise appropriated. 
"(2) The Secretary shall revise the amount determined under 
paragraph (1) with respect to each such Trust Fund in 1985 and each 
fifth year thereafter, as determined appropriate by the Secretary 
from data which becomes available to him after the date of the 
determination under paragraph (1) on the basis of the amount of 
benefits and administrative expenses actually paid from such Trust 
Fund under this title or title XVIII and the relevant actuarial 
assumptions set forth in the report of the Board of Trustees of such 
Trust Fund for such year under section 201(c) or 1817(b). Within 30 
days after any such revision, the Secretary of the Treasury, to the 
extent provided in advance in appropriation Acts, shall transfer to 
such Trust Fund, from amounts in the general fund of the Treasury 
97 STAT. 104 
PUBLIC LAW 98-21—APR. 20, 1983 
not otherwise appropriated, or from such Trust Fund to the general 
fund of the Treasury, such amounts as the Secretary of the Treasury 
determines necessary to take into account such revision.". 
42 use 429. 
(b)(1) Section 229(b) of such Act is amended to read as follows: 
"(b) There are authorized to be appropriated to each of the Trust 
Funds, consisting of the Federal Old-Age and Survivors Insurance 
Trust Fund, the Federal Disability Insurance Trust Fund, and the 
Federal Hospital Insurance Trust Fund, for transfer on July 1 of 
each calendar year to such Trust Fund from amounts in the general 
fund in the Treasury not otherwise appropriated, an amount equal 
to the total of the additional amounts which would be appropriated 
to such Trust Fund for the fiscal year ending September 30 of such 
42 use 401, 
calendar year under section 201 or 1817 of this Act if the amounts of 
the additional wages deemed to have been paid for such calendar 
year by reason of subsection (a) constituted remuneration for em-
ployment (as defined in section 3121(b) of the Internal Revenue Code 
26 use 3121. 
of 1954) for purposes of the taxes imposed by sections 3101 and 3111 
26 use 3101, 
of the Internal Revenue Code of 1954. Amounts authorized to be 
^^^^- 
appropriated under this subsection for transfer on July 1 of each 
calendar year shall be determined on the basis of estimates of the 
Secretary of the wages deemed to be paid for such calendar year 
under subsection (a); and proper adjustments shall be made in 
amounts authorized to be appropriated for subsequent transfer to 
the extent prior estimates were in excess of or were less than such 
wages so deemed to be paid.". 
Effective date. 
(2) The amendment made by paragraph (1) shall be effective with 
42 use 429 note, respect to wages deemed to have been paid for calendar years after 
1983 
42 use 429 note. 
(3)(A) Within thirty days after the date of the enactment of this 
Act, the Secretary of Health and Human Services shall determine 
the additional amounts which would have been appropriated to the 
Federal Old-Age and Survivors Insurance Trust Fund, the Federal 
Disability Insurance Trust Fund, and the Federal Hospital Insur-
ance Trust Fund under sections 201 and 1817 of the Social Security 
Act if the additional wages deemed to have been paid under section 
42 use 429. 
229(a) of the Social Security Act prior to 1984 had constituted 
remuneration for employment (as defined in section 312105) of the 
Internal Revenue Code of 1954) for purposes of the taxes imposed by 
sections 3101 and 3111 of the Internal Revenue Code of 1954, and the 
amount of interest which would have been earned on such amounts 
if they had been so appropriated. 
(B)(i) Within thirty days after the date of the enactment of this 
Act, the Secretary of the Treasury shall transfer to each such Trust 
Fund, from amounts in the general fund of the Treasury not other-
wise appropriated, an amount equal to the amount determined with 
respect to such Trust Fund under subparagraph (A), less any 
amount appropriated to such Trust Fund pursuant to the provisions 
Supra. 
of section 229(b) of the Social Security Act prior to the date of the 
determination made under subparagraph (A) with respect to wages 
deemed to have been paid for calendar years prior to 1984. 
(ii) The Secretary of Health and Human Services shall revise the 
amount determined under clause (i) with respect to each such Trust 
Fund within one year after the date of the transfer made to such 
Trust Fund under clause (i), as determined appropriate by such 
Secretary from data which becomes available to him after the date 
of the transfer under clause (i). Within 30 days after any such 
revision, the Secretary of the Treasury shall transfer to such Trust 
PUBLIC LAW 98-21—APR. 20, 1983 
97 STAT. 105 
Fund, from amounts in the general fund of the Treasury not other-
wise appropriated, or from such Trust Fund to the general fund of 
the Treasury, such amounts as the Secretary of Health and Human 
Services certifies as necessary to take into account such revision. 
ACCOUNTING FOR CERTAIN UNNEGOTIATED CHECKS FOR BENEFITS 
UNDER THE SOCIAL SECURITY PROGRAM 
SEC. 152. (a) Section 201 of the Social Security Act is amended by 
adding at the end thereof the following new subsection: 
"(m)(l) The Secretary of the Treasury shall implement procedures 
to permit the identification of each check issued for benefits under 
this title that has not been presented for payment by the close of the 
sixth month following the month of its issuance. 
"(2) The Secretary of the Treasury shall, on a monthly basis, 
credit each of the Trust Funds for the amount of all benefit checks 
(including interest thereon) drawn on such Trust Fund more than 6 
months previously but not presented for payment and not pre-
viously credited to such Trust Fund, to the extent provided in 
advance in appropriation Acts. 
"(3) If a benefit check is presented for payment to the Treasury 
and the amount thereof has been previously credited pursuant to 
paragraph (2) to one of the Trust Funds, the Secretary of the 
Treasury shall nevertheless pay such check, if otherwise proper, 
recharge such Trust Fund, and notify the Secretary of Health and 
Human Services. 
"(4) A benefit check bearing a current date may be issued to an 
individual who did not negotiate the original benefit check and who 
surrenders such check for cancellation if the Secretary of the Treas-
ury determines it is necessary to effect proper payment of benefits.". 
(b) The amendment made by subsection (a) shall apply with 
respect to all checks for benefits under title II of the Social Security 
Act which are issued on or after the first day of the twenty-fourth 
month following the month in which this Act is enacted. 
(c)(1) The Secretary of the Treasury shall transfer from the general 
fund of the Treasury to the Federal Old-Age and Survivors 
Insurance Trust Fund and to the Federal Disability Insurance Trust 
Fund, in the month following the month in which this Act is enacted 
and in each of the succeeding 30 months, such sums as may be 
necessary to reimburse such Trust Funds in the total amount of all 
checks (including interest thereof) which he and the Secretary of 
Health and Human Services jointly determine to be unnegotiated 
benefit checks, to the extent provided in advance in appropriation 
Acts. After any amounts authorized by this subsection have been 
transferred to a Trust Fund with respect to any benefit check, the 
provisions of paragraphs (3) and (4) of section 201(m) of the Social 
Security Act (as added by subsection (a) of this section) shall be 
applicable to such check. 
(2) As used in paragraph (1), the term "unnegotiated benefit 
checks" means checks for benefits under title II of the Social 
Security Act which are issued prior to the twenty-fourth month 
following the month in which this Act is enacted, which remain 
unnegotiated after the sixth month following the date on which they 
were issued, and with respect to which no transfers have previously 
been made in accordance with the first sentence of such paragraph. 
42 u s e 401. 
Effective date. 
42 u s e 401 note. 
42 u s e 401. 
Transfers from 
general 
Treasury fund. 
42 u s e 401 note. 
"Unnegotiated 
benefit checks." 
97 STAT. 106 
PUBLIC LAW 98-21—APR. 20, 1983 
Study. 
42 u s e 401 note. 
42 u s e 401. 
Consultation 
with 0MB 
Director. 
Reports to 
President and 
eongress. 
FLOAT PERIODS 
SEC. 153. (a) The Secretary of Health and Human Services and the 
Secretary of the Treasury shall jointly undertake, as soon as possi-
ble after the date of the enactment of this Act, a thorough study 
with respect to the period of time (hereafter in this section referred 
to as the "float period") between the issuance of checks from the 
general fund of the Treasury in payment of monthly insurance 
benefits under title II of the Social Security Act and the transfer to 
the general fund from the Federal Old-Age and Survivors Insurance 
Trust Fund or the Federal Disability Insurance Trust Fund, as 
applicable, of the amounts necessary to compensate the general 
fund for the issuance of such checks. Each such Secretary shall 
consult the other regularly during the course of the study and shall, 
as appropriate, provide the other with such information and assist-
ance as he may require. 
(b) The study shall include— 
(1) an investigation of the feasibility and desirability of main-
taining the float periods which are allowed as of the date of the 
enactment of this section in the procedures governing the pay-
ment of monthly insurance benefits under title II of the Social 
Security Act, and of the general feasibility and desirability of 
making adjustments in such procedures with respect to float 
periods; and 
(2) a separate investigation of the feasibility and desirability 
of providing, as a specific form of adjustment in such procedures 
with respect to float periods, for the transfer each day to the 
general fund of the Treasury from the Federal Old-Age and 
Survivors Insurance Trust Fund and the Federal Disability 
Insurance Trust Fund, as appropriate, of amounts equal to the 
amounts of the checks referred to in subsection (a) which are 
paid by the Federal Reserve Banks on such day. 
(c) In conducting the study required by subsection (a), the Secre-
taries shall consult, as appropriate, the Director of the Office of 
Management and Budget, and the Director shall provide the Secre-
taries with such information and assistance as they may require. 
The Secretaries shall also solicit the views of other appropriate 
officials and organizations. 
(d)(1) Not later than six months after the date of the enactment of 
this Act, the Secretaries shall submit to the President and the 
Congress a report of the findings of the investigation required by 
subsection (bXD, and the Secretary of the Treasury shall by regula-
tion make such adjustments in the procedures governing the pay-
ment of monthly insurance benefits under title II of the Social 
Security Act with respect to float periods (other than adjustments in 
the form described in subsection (bX2)) as may have been found in 
such investigation to be necessary or appropriate. 
(2) Not later than twelve months after the date of the enactment 
of this Act, the Secretaries shall submit to the President and the 
Congress a report of the findings of the separate investigation 
required by subsection (bX2), together with their recommendations 
with respect thereto; and, to the extent necessary or appropriate to 
carry out such recommendations, the Secretary of the Treasury 
shall by regulation make adjustments in the procedures with respect 
to float periods in the form described in such subsection. 
4ik 
PUBLIC LAW 98-21—APR. 20, 1983 
97 STAT. 107 
42 use 13951. 
TRUST FUND TRUSTEES REPORTS 
SEC. 154. (a) The next to last sentence of section 201(c) of the Social 
Security Act is amended by striking out "Such report shall also 42 use 401. 
include" and inserting in lieu thereof the following: "Such report 
shall include an actuarial opinion by the Chief Actuary of the Social 
Security Administration certifying that the techniques and method-
ologies used are generally accepted within the actuarial profession 
and that the assumptions and cost estimates used are reasonable: 
Provided, That the certification shall not refer to economic assump-
tions underlying the Trustee's report, and shall also include". 
(b) Section 18170?) of such Act is amended by inserting immedi-
ately before the last sentence the following new sentence: "Such 
report shall also include an actuarial opinion by the Chief Actuarial 
Officer of the Health Care Financing Administration certifying that 
the techniques and methodologies used are generally accepted 
within the actuarial profession and that the assumptions and cost 
estimates used are reasonable: Provided, That the certification shall 
not refer to economic assumptions underlying the Trustee's report.". 
(c) Section 18410b) of such Act is amended by inserting immedi-
ately before the last sentence the following new sentence: "Such 
report shall also include an actuarial opinion by the Chief Actuarial 
Officer of the Health Care Financing Administration certifying that 
the techniques and methodologies used are generally accepted 
within the actuarial profession and that the assumptions and cost 
estimates used are reasonable: Provided, That the certification shall 
not refer to economic assumptions underlying the Trustee's report.". 
(d) Notwithstanding sections 201(c)(2), 18170b)(2), and 1841(b)(2) of 42use40i note 
the Social Security Act, the annual reports of the Boards of Trustees 
of the Trust Funds which are required in the calendar year 1983 
under those sections may be filed at any time not later than forty-
five days after the date of the enactment of this Act. 
(e) The amendments made by this section shall take effect on the 
date of the enactment of this Act. 
42 use 1395t. 
Effective date. 
42 use 401 note. 
TITLE II—ADDITIONAL PROVISIONS RELATING TO LONG-
TERM FINANCING OF THE SOCIAL SECURITY SYSTEM 
INCREASE IN RETIREMENT AGE 
SEC. 201. (a) Section 216 of the Social Security Act is amended by 
adding at the end thereof the following new subsection: 
42 use 416. 
"Retirement Age 
"(1)(1) The term 'retirement age' means— 
"(A) with respect to an individual who attains early retire-
ment age (as defined in paragraph (2)) before January 1, 2000, 
65vearsofage; 
(B) with respect to an individual who attains early retire-
ment age after December 31, 1999, and before January 1, 2005, 
65 years of age plus the number of months in the age increase 
factor (as determined under paragraph (3)) for the calendar year 
in which such individual attains early retirement age; 
"(C) with respect to an individual who attains early retire-
ment age after December 31, 2004, and before January 1, 2017, 
66 years of age; 
97 STAT. 108 
PUBLIC LAW 98-21—APR. 20, 1983 
"(D) with respect to an individual who attains early retire-
ment age after December 31, 2016, and before January 1, 2022, 
66 years of age plus the number of months in the age increase 
factor (as determined under paragraph (3)) for the calendar year 
in which such individual attains early retirement age; and 
"(E) with respect to an individual who attains early retire-
ment age after December 31,2021,67 years of age. 
"Early 
"(2) The term 'early retirement age' means age 62 in the case of 
retirement age." ^j^ old-age, wife's, or husband's insurance benefit, and age 60 in the 
case of a widow's or widower's insurance benefit. 
Age increase 
"(3) The age increase factor for any individual who attains early 
factor. 
retirement age in a calendar year within the period to which 
subparagraph (B) or (D) of paragraph (1) applies shall be determined 
as follows: 
"(A) With respect to an individual who attains early retire-
ment age in the 5-year period consisting of the calendar years 
2000 through 2004, the age increase factor shall be equal to two-
twelfths of the number of months in the period beginning with 
January 2000 and ending with December of the year in which 
the individual attains early retirement age. 
"(B) With respect to an individual who attains early retire-
ment age in the 5-year period consisting of the calendar years 
2017 through 2021, the age increase factor shall be equal to two-
twelfths of the number of months in the period beginning with 
January 2017 and ending with December of the year in which 
the individual attains early retirement age.". 
42 use 402. 
(b)(1) Section 202(q)(9) of such Act is amended to read as follows: 
"(9) The amount of the reduction for early retirement specified in 
parargaph (D— 
"(A) for old-age insurance benefits, wife's insurance benefits, 
and husband's insurance benefits, shall be the amount specified 
in such paragraph for the first 36 months of the reduction 
period (as defined in paragraph (6)) or adjusted reduction period 
(as defined in paragraph (7)), and five-twelfths of 1 percent for 
any additional months included in such periods; and 
"(B) for widow's insurance benefits and widower's insurance 
benefits, shall be periodically revised by the Secretary such 
that— 
"(i) the amount of the reduction at early retirement age 
Post, p. 112. 
as defined in section 216(a) shall be 28.5 percent of the full 
benefit; and 
"(ii) the amount of the reduction for each month in the 
reduction period (specified in paragraph (6)) or the adjusted 
reduction period (specified in paragraph (7)) shall be estab-
lished by linear interpolation between 28.5 percent at the 
month of attainment of early retirement age and 0 percent 
at the month of attainment of retirement age.". 
(2) Section 202(q)(l) of such Act is amended by striking out "If 
and inserting in lieu thereof "Subject to paragraph (9), if. 
42 use 401. 
(c) Title II of the Social Security Act is further amended— 
(1) by striking out "age 65 or "age of 65", as the case may be, 
each place it appears in the following sections and inserting in 
lieu thereof in each instance "retirement age (as defined in 
section 216(1))": 
(A) subsections (a), (b), (c), (d), (e), (f), (q), (r), and (w) of 
42 use 402. 
section 202; 
PUBLIC LAW 98-21—APR. 20, 1983 
97 STAT. 109 
(B) subsections (c) (as amended by section 309(g) of this 
Act) and (f) of section 203; 
(C) subsection (f) of section 215; 
(D) subsections (h) and (i) of section 216; and 
(E) section 223(a); and 
(2) by striking out "age sixty-five" in section 203(c) (as amended 
by section 309(g) of this Act) and inserting in lieu thereof 
"retirement age (as defined in section 216(1))"; and 
(3) by striking out "age of sixty-five" in section 223(a) and 
inserting in lieu thereof "retirement age (as defined in section 
216(1))". 
(d) The Secretary shall conduct a comprehensive study and analy-
sis of the implications of the changes made by this section in 
retirement age in the case of those individuals (affected by such 
changes) who, because they are engaged in physically demanding 
employment or because they are unable to extend their working 
careers for health reasons, may not benefit from improvements in 
longevity. The Secretary shall submit to the Congress no later than 
January 1,1986, a full report on the study and analysis. Such report 
shall include any recommendations for legislative changes, includ-
ing recommendations with respect to the provision of protection 
against the risks associated with early retirement due to health 
considerations, which the Secretary finds necessary or desirable as a 
result of the findings contained in this study. 
TITLE III—MISCELLANEOUS AND TECHNICAL PROVISIONS 
PART A—EUMINATION OF GENDER-BASED DISTINCTIONS 
42 use 403. 
42 use 415. 
42 use 416. 
42 use 423. 
42 use 403. 
42 use 423. 
Implications of 
changes, study 
and analysis. 
42 use 416 note. 
Report to 
eongress. 
DIVORCED HUSBANDS 
SEC. 301. (a)(1) Section 202(c)(1) of the Social Security Act is 42 use 402. 
amended, in the matter preceding subparagraph (A), by inserting 
"and every divorced husband (as defined in section 216(d))" before 
"of an individual" and by inserting "or such divorced husband" 
after "if such husband". 
(2) Section 202(c)(1) of such Act is further amended— 
(A) by striking out "and" at the end of subparagraph (B); 
(B) by redesignating subparagraph (C) as subparagraph (D), 
and by inserting after subparagraph (B) the following new 
subparagraph: 
"(C) in the case of a divorced husband, is not married, and"; 
and 
(C) by striking out the matter following subparagraph (D) (as 
so redesignated) and inserting in lieu thereof the following: 
"shall be entitled to a husband's insurance benefit for each month, 
beginning with— 
"(i) in the case of a husband or divorced husband (as so 
defined) of an individual who is entitled to an old-age insurance 
benefit, if such husband or divorced husband has attained age 
65, the first month in which he meets the criteria specified in 
subparagraphs (A), (B), (C), and (D), or 
"(ii) in the case of a husband or divorced husband (as so 
defined) o
f
— 
"(I) an individual entitled to old-age insurance benefits, if 
such husband or divorced husband has not attained age 65, 
or 
97 STAT. 110 
PUBLIC LAW 98-21—APR. 20, 1983 
"(11) an individual entitled to disability insurance bene-
fits, 
the first month throughout which he is such a husband or 
divorced husband and meets the criteria specified in subpara-
graphs (B), (C), and (D) (if in such month he meets the criterion 
specified in subparagraph (A)), 
whichever is earlier, and ending with the month preceding the 
month to which any of the following occurs: 
"(E) he dies, 
"(F) such individual dies, 
"(G) in the case of a husband, they are divorced and either (i) 
he has not attained age 62, or (ii) he has attained age 62 but has 
not been married to such individual for a period of 10 years 
immediately before the divorce became effective, 
"(H) in the case of a divorced husband, he marries a person 
other than such individual, 
"(I) he becomes entitled to an old-age or disability insurance 
benefit based on a primary insurance amount which is equal to 
or exceeds one-half of the primary insurance amount of such 
individual, or 
"(J) such individual is not entitled to disability insurance 
benefits and is not entitled to old-age insurance benefits.". 
42 use 402. 
(3) Section 202(c)(3) of such Act is amended by inserting "(or, in 
the case of a divorced husband, his former wife)" before "for such 
month". 
(4) Section 202(c) of such Act is further amended by adding after 
paragraph (3) the following new paragraph: 
"(4) In the case of dny divorced husband who marries— 
"(A) an individual entitled to benefits under subsection Qo), (e), 
(g), or (h) of this section, or 
"(B) an individual who has attained the age of 18 and is 
entitled to benefits under subsection (d), by reason of paragraph 
(l)(B)(ii) thereof, 
such divorced husband's entitlement to benefits under this subsec-
tion, notwithstanding the provisions of paragraph (1) (but subject to 
subsection (s)), shall not be terminated by reason of such marriage.". 
(5) Section 202(c) of such Act is further amended by adding after 
paragraph (4) (as added by paragraph (4) of this subsection) the 
following new paragraph: 
"(5)(A) Notwithstanding the preceding provisions of this subsec-
tion, except as provided in subparagraph (B), the divorced husband 
of an individual who is not entitled to old-age or disability insurance 
benefits, but who has attained age 62 and is a fully insured indi-
42 use 414. 
vidual (as defined in section 214), if such divorced husband— 
"(i) meets the requirements of subparagraphs (A) through (D) 
of paragraph (1), and 
"(ii) has been divorced from such insured individual for not 
less than 2 years, 
shall be entitled to a husband's insurance benefit under this subsec-
tion for each month, in such amount, and beginning and ending 
with such months, as determined (under regulations of the Secre-
tary) in the manner otherwise provided for husband's insurance 
benefits under this subsection, as if such insured individual had 
become entitled to old-age insurance benefits on the date on which 
the divorced husband first meets the criteria for entitlement set 
forth in classes (i) and (ii). 
PUBLIC LAW 98-21—APR. 20, 1983 
97 STAT. Ill 
"(B) A husband's insurance benefit provided under this paragraph 
which has not otherwise terminated in accordance with subpara-
graph (E), (F), (H), or (I) of paragraph (1) shall terminate with the 
month preceding the first month in which the insured individual is 
no longer a fully insured individual.". 
(6) Section 202(c)(2)(A) of such Act is amended by inserting "(or 
42 USC 402. 
divorced husband)" after "payable to such husband". 
(7) Section 202(b)(3)(A) of such Act is amended by striking out "(f)" 
and inserting in lieu thereof "(c), (f),". 
(8) Section 202(c)(1)(D) of such Act (as redesignated by paragraph 
(2) of this subsection) is amended by striking out "his wife" and 
inserting in lieu thereof "such individual". 
(9) Section 202(d)(5)(A) of such Act is amended by inserting "(c)," 
after "(b),". 
(b)(1) Section 202(f)(1) of such Act is amended, in the matter 
preceding subparagraph (A), by inserting "and every surviving 
divorced husband (as defined in section 216(d))" before "of an 
individual" and by inserting "or such surviving divorced husband" 
after "if such widower". 
(2) Section 202(f)(1) of such Act is further amended by striking out 
"his deceased wife" in subparagraph (D) and in the matter following 
subparagraph (F) and inserting in lieu thereof "such deceased indi-
vidual". 
(3) Section 202(f)(3)(B)(ii)(II) of such Act (as amended by section Ante, p. 96. 
138(b)(1)(B) of this Act) is amended by inserting "or surviving 
divorced husband" after "widower". 
(4) Paragraph (3)(D) of section 202(f) of such Act (as redesignated 
by section 133(b)(1)(A) of this Act), and paragraphs (4), (5), and (6) of 
such section (as redesignated by section 131(b)(3)(A) of this Act), are 
each amended by inserting "or surviving divorced husband" after 
"widower" wherever it appears. 
(5) Paragraph (3)(D) of section 202(f) of such Act (as redesignated 
by section 133(b)(1)(A) of this Act) is further amended by striking out 
"wife" 
wherever 
it appears and 
inserting 
in 
lieu 
thereof 
"individual". 
(6) Section 202(g)(3)(A) of such Act is amended by inserting "(c)," 
before "(f),". 
(7) Section 202(h)(4)(A) of such Act is amended by inserting "(c)," 
before "(e),". 
(c)(1) Section 216(d) of such Act is amended by redesignating 
paragraph (4) as paragraph (6), and by inserting after paragraph (3) 
the following new paragraphs: 
"(4) The term 'divorced husband' means a man divorced from an 
individual, but only if he had been married to such individual for a 
period of 10 years immediately before the date the divorce became 
effective. 
"(5) The term 'surviving divorced husband' means a man divorced 
from an individual who has died, but only if he had been married to 
the individual for a period of 10 years immediately before the 
divorce became effective.". 
(2) The heading of section 216(d) of such Act is amended to read as 
follows: 
"Divorced Spouses; Divorce". 
(d)(1) Section 205(b) of such Act is amended by inserting "divorced 42 USC 405. 
husband," after "husband,", and by inserting "surviving divorced 
husband," after "widower,". 
42 USC 416. 
"Divorced 
husband." 
"Surviving 
divorced 
husband." 
m 
97 STAT. 112 
PUBLIC LAW 98-21—APR. 20, 1983 
42 use 405. 
(2) Section 205(c)(1)(C) of such Act is amended by inserting "surviv-
ing divorced husband," after "wife,". 
REMARRIAGE OF SURVIVING SPOUSE BEFORE AGE OF ELIGIBILITY 
42 use 402. 
SEC. 302. Section 202(f)(1)(A) of the Social Security Act is amended 
by striking out "has not remarried" and inserting in Heu thereof "is 
not married". 
ILLEGITIMATE CHILDREN 
42 use 416. 
SEC. 303. (a) Section 216(h)(3) of the Social Security Act is amended 
by inserting "mother or" before "father" wherever it appears. 
(b) Section 216(h)(3)(A)(ii) of such Act is amended by striking out 
all that follows "time" and inserting in lieu thereof "such appli-
cant's application for benefits was filed;". 
(c) Section 216(h)(3)(B)(ii) of such Act is amended by striking out 
"such period of disability began" and inserting in lieu thereof "such 
applicant's application for benefits was filed". 
(d) Section 216(h)(3) of such Act is further amended— 
(1) by striking out "his" wherever it appears and inserting in 
lieu thereof "his or her"; and 
(2) by striking out "he" in subparagraph (B) and inserting in 
lieu thereof "he or she". 
TRANSITIONAL INSURED STATUS 
42 use 427. 
SEC. 304. (a) Section 227(a) of the Social Security Act is amended— 
(1) by striking out "wife" wherever it appears and inserting in 
lieu thereof "spouse"; 
(2) by striking out "wife's" wherever it appears and inserting 
in lieu thereof "spouse's"; 
(3) by striking out "she" wherever it appears and inserting in 
lieu thereof "he or she"; 
(4) by striking out "his" and inserting in lieu thereof "the"; 
and 
(5) by inserting "or section 202(c)" after "section 202(b)" wher-
ever it appears. 
(b) Section 227(b) and section 227(c) of such Act are amended— 
(1) by striking out "widow" wherever it appears and inserting 
in lieu thereof "surviving spouse"; 
(2) by striking out "widow's" wherever it appears and insert-
ing in lieu thereof "surviving spouse's"; 
(3) by striking out "her" wherever it appears and inserting in 
lieu thereof "the"; and 
(4) by inserting "or section 202(f)" after "section 202(e)" wher-
ever it appears. 
Definitions. 
(c) Section 216 of such Act is amended by inserting before subsec-
42 use 416. 
^JQJJ (I3) ^j^g following new subsection: 
"Spouse; Surviving Spouse 
"(a)(1) The term 'spouse' means a wife as defined in subsection (b) 
or a husband as defined in subsection (f). 
"(2) The term 'surviving spouse' means a widow as defined in 
subsection (c) or a widower as defined in subsection (g).". 
PUBLIC LAW 98-21—APR. 20, 1983 
97 STAT. 113 
EQUALIZATION OF BENEFITS UNDER SECTION 228 
SEC. 305. (a) Section 228(b) of the Social Security Act is amended— 
42 use 428. 
(1) by striking out "(1) Except as provided in paragraph (2), 
the" and inserting in lieu thereof "The"; and 
(2) by striking out paragraph (2). 
(b) Section 228(c)(2) of such Act is amended by striking out "(B) the 
larger o f and all that follows and inserting in lieu thereof "(B) the 
benefit amount as determined without regard to this subsection.". 
(c) Section 228(c)(3) of such Act is amended to read as follows: 
"(3) In the case of a husband or wife both of whom are entitled to 
benefits under this section for any month, the benefit amount of 
each spouse, after any reduction under paragraph (1), shall be 
further reduced (but not below zero) by the excess (if any) of (A) the 
total amount of any periodic benefits under governmental pension 
systems for which the other spouse is eligible for such month, over 
(B) the benefit amount of such other spouse as determined without 
regard to this subsection.". 
(d) Section 228 of such Act is further amended— 
(1) by striking out "he" wherever it appears in subsections (a) 
and (c)(1) and inserting in lieu thereof "he or she"; and 
(2) by striking out "his" in subsection (c)(4)(C) and inserting in 
lieu thereof "his or her", 
(e) The Secretary shall increase the amounts specified in section 
42 use 428 note. 
228 of the Social Security Act, as amended by this section, to take 
into account any general benefit increases (as referred to in section 
215(i)(3) of such Act), and any increases under section 215(i) of such 
42 use 415. 
Act, which have occurred after June 1974 or may hereafter occur. 
FATHER'S INSURANCE BENEFITS 
SEC. 306. (a) Section 202(g) of the Social Security Act is amended— 
42 use 402. 
(1) by striking out "widow" wherever it appears and inserting 
in lieu thereof "surviving spouse"; 
(2) by striking out "widow's" wherever it appears and insert-
ing in lieu thereof "surviving spouse's"; 
(3) by striking out "wife's insurance benefits" and "he" in 
paragraph (1)(D) and inserting in lieu thereof "a spouse's insur-
ance benefit" and "such individual", respectively; 
(4) by striking out "her" wherever it appears and inserting in 
lieu thereof "his or her"; 
(5) by striking out "she" wherever it appears and inserting in 
lieu thereof "he or she"; 
(6) by striking out "mother" wherever it appears and insert-
ing in lieu thereof "parent"; 
(7) by inserting "or father's" after "mother's" wherever it 
appears; 
(8) by striking out "after August 1950"; and 
(9) in paragraph (3)(A) (as amended by section 301(b)(6) of this 
Act)— 
(A) by inserting "this subsection or" before "subsection 
(a)"; and 
(B) by striking out "(c)," and inserting in lieu thereof "(b), 
(c), (e),". 
(b) The heading of section 202(g) of such Act is amended by 
inserting "and Father's" after "Mother's". 
97 STAT. 114 
PUBLIC LAW 98-21—APR. 20, 1983 
42 use 416. 
"Surviving 
divorced father." 
"Surviving 
divorced 
parent." 
42 u s e 402. 
Ante, p. 93. 
42 use 403. 
(c) Section 216(d) of such Act (as amended by section 301(c)(1) of 
this Act) is further amended by redesignating paragraph (6) as 
paragraph (8) and by inserting after paragraph (5) the following new 
paragraphs: 
"(6) The term 'surviving divorced father' means a man divorced 
from an individual who has died, but only if (A) he is the father of 
her son or daughter, (B) he legally adopted her son or daughter 
while he was married to her and while such son or daughter was 
under the age of 18, (C) she legally adopted his son or daughter while 
he was married to her and while such son or daughter was under 
the age of 18, or (D) he was married to her at the time both of them 
legally adopted a child under the age of 18. 
"(7) The term 'surviving divorced parent' means a surviving 
divorced mother as defined in paragraph (3) of this subsection or a 
surviving divorced father as defined in paragraph (6).". 
(d) Section 202(c)(1) of such Act (as amended by section 301(a) of 
this Act) is further amended by inserting "(subject to subsection (s))" 
before "be entitled to" in the matter following subparagraph (D) and 
preceding subparagraph (E). 
(e) Section 202(c)(1)(B) of such Act is amended by inserting after 
"62" the following: "or (in the case of a husband) has in his care 
(individually or jointly with such individual) at the time of filing 
such application a child entitled to child's insurance benefits on the 
basis of the wages and self-employment income of such individual". 
(f) Section 202(c)(1) of such Act (as amended by section 301(a) of 
this Act and the preceding provisions of this section) is further 
amended by redesignating the new subparagraphs (I) and (J) as 
subparagraphs (J) and (K), respectively, and by inserting after sub-
paragraph (H) the following new subparagraph: 
"(I) in the case of a husband who has not attained age 62, no 
child of such individual is entitled to a child's insurance bene-
fit,". 
(g) Section 202(f)(1)(C) of such Act is amended by inserting "(i)" 
after "(C)", by inserting "or" after "223,", and by adding at the end 
thereof the following new clause: 
"(ii) was entitled, on the basis of such wages and self-employ-
ment income, to father's insurance benefits for the month 
preceding the month in which he attained age 65, and", 
(h) Section 202(f)(5) of such Act (as redesignated by section 
131(b)(3)(A) of this Act) is amended by striking out "or" at the end of. 
subparagraph (A), by redesignating subparagraph (B) as subpara-
graph (C), and by inserting immediately after subparagraph (A) the 
following new subparagraph: 
"(B) the last month for which he was entitled to father's 
insurance benefits on the basis of the wages and self-employ-
ment income of such individual, or", 
(i) Section 203(f)(1)(F) of such Act is amended by striking out 
"section 202(b) (but only by reason of having a child in her care 
within the meaning of paragraph (1)(B) of that subsection)" and 
inserting in lieu thereof "section 202(b) or (c) (but only by reason of 
having a child in his or her care within the meaning of paragraph 
(1)(B) of subsection (b) or (c), as may be applicable)". 
PUBLIC LAW 98-21—APR. 20, 1983 
97 STAT. 115 
EFFECT OF MARRIAGE ON CHILDHOOD DISABILITY BENEFITS AND ON 
OTHER DEPENDENTS' OR SURVIVORS* BENEFITS 
SEC. 307. (a) Subsections (b)(3), (d)(5), (g)(3), and (h)(4) of section 202 
of the Social Security Act (as amended by the preceding provisions 42 use 402. 
of this Act) are each amended by striking out "; except that" and all 
that follows and inserting in lieu thereof a period. 
(b) The amendments made by subsection (a) shall apply with Effective date, 
respect to benefits under title II of the Social Security Act for 42 use 402 note. 
months after the month in which this Act is enacted, but only in 42 use 401. 
cases in which the "last month" referred to in the provision 
amended is a month after the month in which this Act is enacted. 
CREDIT FOR CERTAIN MILITARY SERVICE 
SEC. 308. Section 217(f) of the Social Security Act is amended— 
42 use 417. 
(1) by striking out "widow" each place it appears and insert-
ing in lieu thereof "surviving spouse , and 
(2) by striking out "his" and "her" wherever they appear 
(except in clause (A) of paragraph (D) and inserting in lieu 
thereof in each instance "his or her". 
CONFORMING AMENDMENTS 
SEC. 309. (a) Section 202(b)(3)(A) of the Social Security Act (as 42 use 402. 
amended by section 301(a)(6) of this Act) is further amended by 
inserting "(g)," after "(f),". 
(b) Section 202(q)(3) of such Act is amended by inserting "or 
surviving divorced husband" after "widower" in subparagraphs (E), 
(F), and (G). 
(c) Section 202(q)(5) of such Act is amended— 
(1) by inserting "or husband's" after "wife's" wherever it 
appears; 
(2) by striking out "her" in subparagraph (A)(i) and inserting 
in lieu thereof "him or her"; 
(3) by striking out "her" the second place it appears in 
subparagraph (AXii) and inserting in lieu thereof "the ; 
(4) by striking out "she" wherever it appears and inserting in 
lieu thereof "he or she"; 
(5) by striking out "her" wherever it appears (except where 
paragraphs (2) and (3) of this subsection apply) and inserting in 
lieu thereof "his or her"; 
(6) by striking out "the woman" in subparagraph (B)(ii) and "a 
woman" in subparagraph (C) and inserting in lieu thereof "the 
individual" and "an individual", respectively; and 
(7) in subparagraph (D)— 
(A) by inserting "or widower's" after "widow's"; 
(B) by striking out "husband" wherever it appears and 
inserting in lieu thereof "spouse"; 
(C) by striking out "husband's" wherever it appears and 
inserting in lieu thereof "spouse's"; and 
(D) by inserting "or father's" after "mother's". 
(d)(1) Section 202(q)(6)(A) of such Act (as amended by section 
134(a)(2) of this Act) is further amended by striking out "or hus-
band's" in clause (i) and by inserting "or husband's' after "wife's" 
in clause (ii). 
(2) Section 202(q)(7) of such Act is amended— 
97 STAT. 116 
PUBLIC LAW 98-21—APR. 20, 1983 
(A) in subparagraph (B), by inserting "or husband's" after 
"wife's", by striking out "she" and inserting in lieu thereof 
"such individual", and by inserting "his or" before "her", and 
(B) in subparagraph (D), by inserting "or widower's" after 
"widow's". 
42 use 402. 
(e)(1) Section 202(s)(l) of such Act is amended by inserting "(c)(1)," 
after "(b)(1),". 
(2) Section 202(s)(2) of such Act (as amended by section 131(c)(1) of 
this Act) is further amended by inserting "(c)(4)," after "(b)(3),". 
(3) Section 202(s)(3) of such Act (as amended by section 131(c)(2) of 
this Act) is further amended by striking out "So much" and all that 
follows down through "the last sentence" and inserting in lieu 
tliGrGof **ThG l3.st SGnt,GncG 
42 use 403. 
(f) The third sentence of section 203(b)(1) of such Act (as amended 
by section 132(b) of this Act) is further amended by inserting "or 
father's" after "mother's", 
(g) Section 203(c) of such Act is amended to read as follows: 
42 use 402. 
Child's 
insurance 
benefit, 
entitlement. 
42 use 422. 
"Deductions on Account of Noncovered Work Outside the United 
States or Failure to Have Child in Care 
"(c) Deductions, in such amounts and at such time or times as the 
Secretary shall determine, shall be made from any payment or 
payments under this title to which an individual is entitled, until 
the total of such deductions equals such individual's benefits or 
benefit under section 202 for any month— 
"(1) in which such individual is under the age of seventy and 
for more than forty-five hours of which such individual engaged 
in noncovered remunerative activity outside the United States; 
"(2) in which such individual, if a wife or husband under age 
sixty-five entitled to a wife's or husband's insurance benefit, did 
not have in his or her care (individually or jointly with his or 
her spouse) a child of such spouse entitled to a child's insurance 
benefit and such wife's or husband's insurance benefit for such 
month was not reduced under the provisions of section 202(q); 
"(3) in which such individual, if a widow or widower entitled 
to a mother's or father's insurance benefit, did not have in his 
or her care a child of his or her deceased spouse entitled to a 
child's insurance benefit; or 
"(4) in which such an individual, if a surviving divorced 
mother or father entitled to a mother's or father's insurance 
benefit, did not have in his or her care a child of his or her 
deceased former spouse who (A) is his or her son, daughter, or 
legally adopted child and (B) is entitled to a child's insurance 
benefit on the basis of the wages and self-employment income of 
such deceased former spouse. 
For purposes of paragraphs (2), (3), and (4) of this subsection, a child 
shall not be considered to be entitled to a child's insurance benefit 
for any month in which paragraph (1) of section 202(s) applies or an 
event specified in section 222(b) occurs with respect to such child. 
Subject to paragraph (3) of such section 202(s), no deduction shall be 
made under this subsection from any child's insurance benefit for 
the month in which the child entitled to such benefit attained the 
age of eighteen or any subsequent month; nor shall any deduction be 
made under this subsection from any widow's insurance benefit for 
any month in which the widow or surviving divorced wife is entitled 
and has not attained age 65 (but only if she became so entitled prior 
PUBLIC LAW 98-21—APR. 20, 1983 
97 STAT. 117 
42 use 403. 
42 use 416. 
42 use 422. 
to attaining age 60), or from any widower's insurance benefit for any 
month in which the widower or surviving divorced husband is 
entitled and has not attained age 65 (but only if he became so 
entitled prior to attaining age 60).". 
(h) Section 203(d) of such Act is amended by inserting "divorced 
husband," after "husband," in paragraph (1)(A) (as amended by 
section i32(b)(2) of this Act) and by inserting "or father's" after 
"mother's" each place it appears in paragraph (2). 
(i)(l) Section 205(b) of such Act (as amended bv section 301(d)(1) of 42 use 405. 
this Act) is further amended by inserting 
'surviving divorced 
father," after "surviving divorced mother,". 
(2) Section 205(c)(1)(C) of such Act (as amended by section 301(d)(2) 
of this Act) is further amended by inserting "surviving divorced 
father," after "surviving divorced mother,". 
0') Section 216(f)(3)(A) of such Act is amended by inserting "(c)," 
before "(f)". 
(k) Section 216(g)(6)(A) of such Act is amended by inserting "(c)," 
before "(f)". 
(1) Section 222(b)(1) of such Act is amended by striking out "or 
surviving divorced wife" and inserting in lieu thereof ", surviving 
divorced wife, or surviving divorced husband". 
(m) Section 222(b)(2) of such Act is amended by inserting "or 
father's" after "mother's" wherever it appears. 
(n) Section 222(b)(3) of such Act is amended by inserting "divorced 
husband," after "husband,". 
(o) Section 223(d)(2) of such Act is amended by striking out "or 42 use 423. 
widower" in subparagraphs (A) and (B) and inserting in lieu thereof 
"widower, or surviving divorced husband". 
(p) Section 225(a) of such Act is amended by inserting "or surviv-
ing divorced husband" after "widower". 
(q)(l) Section 226(e)(3) of such Act is amended to read as follows: 
"(3) For purposes of determining entitlement to hospital insurance 
benefits under subsection (b), any disabled widow aged 50 or older 
who is entitled to mother's insurance benefits (and who would have 
been entitled to widow's insurance benefits by reason of disability if 
she had filed for such widow's benefits), and any disabled widower 
aged 50 or older who is entitled to father's insurance benefits (and 
who would have been entitled to widower's insurance benefits by 
reason of disability if he had filed for such widower's benefits), shall, 
upon application for such hospital insurance benefits be deemed to 
have filed for such widow's or widower's insurance benefits.". 
(2) For purposes of determining entitlement to hospital insurance 42 use 426 note. 
benefits under section 226(e)(3) of such Act, as amended by para-
graph (1), an individual becoming entitled to such hospital insurance 
benefits as a result of the amendment made by such paragraph 
shall, upon furnishing proof of his or her disability within twelve 
months after the month in which this Act is enacted, under such 
procedures as the Secretary of Health and Human Services may 
prescribe, be deemed to have been entitled to the widow's or widow-
er's benefits referred to in such section 226(e)(3), as so amended, as of 
the time such individual would have been entitled to such widow's 
or widower's benefits if he or she had filed a timely application 
therefor. 
EFFECTIVE DATE OF PART A 
SEC. 310. (a) Except as otherwise specifically provided in this title, 42 use 402 note. 
the amendments made by this part apply only with respect to 
42 use 425. 
Hospital 
insurance 
benefits. 
42 use 426. 
97 STAT. 118 
PUBLIC LAW 98-21—APR. 20, 1983 
42 use 401. 
monthly benefits payable under title II of the Social Security Act for 
months after the month in which this Act is enacted. 
(b) Nothing in any amendment made by this part shall be con-
strued as affecting the validity of any benefit which was paid, prior 
to the effective date of such amendment, as a result of a judicial 
determination. 
PART B—COVERAGE 
COVERAGE OF EMPLOYEES OF FOREIGN AFFIUATES OF AMERICAN 
EMPLOYERS 
SEC. 321. (a)(1) So much of subsection (1) of section 3121 of the 
26 use 3121. 
Internal Revenue Code of 1954 (relating to agreements entered into 
by domestic corporations with respect to foreign subsidiaries) as 
precedes the second sentence of paragraph (1) thereof is amended to 
read as follows: 
"(1) AGREEMENTS ENTERED INTO BY AMERICAN EMPLOYERS WITH 
RESPECT TO FOREIGN AFFIUATES.— 
"(1) AGREEMENT WITH RESPECT TO CERTAIN EMPLOYEES OF FOR-
EIGN AFFILIATE.—The Secretary shall, at the American employ-
er's request, enter into an agreement (in such manner and form 
as may be prescribed by the Secretary) with any American 
employer (as defined in subsection (h)) who desires to have the 
insurance system established by title II of the Social Security 
42 use 401. 
Act extended to service performed outside the United States in 
the employ of any 1 or more of such employer's foreign affiliates 
(as defined in paragraph (8)) by all employees who are citizens 
or residents of the United States, except that the agreement 
shall not apply to any service performed by, or remuneration 
paid to, an employee if such service or remuneration would be 
excluded from the term 'employment' or 'wages', as defined in 
this section, had the service been performed in the United 
States." 
26 use 3121. 
(2) Paragraph (8) of section 3121(1) of such Code (defining foreign 
subsidiary) is amended to read as follows: 
"(8) FOREIGN AFFIUATE DEFINED.—For purposes of this subsec-
42 use 410. 
tion and section 210(a) of the Social Security Act— 
"(A) IN GENERAL.—A foreign affiliate of an American 
employer is any foreign entity in which such American 
employer has not less than a 10-percent interest. 
"(B) DETERMINATION OF IO-PERCENT INTEREST.—For pur-
poses of subparagraph (A), an American employer has a 10-
percent interest in any entity if such employer has such an 
interest directly (or through one or more entities)— 
"(i) in the case of a corporation, in the voting stock 
thereof, and 
"(ii) in the case of any other entity, in the profits 
thereof." 
(b) The clause (B) of section 210(a) of the Social Security Act 
(defining employment) which precedes paragraph (1) thereof (as 
amended by section 323(a)(2) of this Act) is further amended to read 
as follows: "(B) outside the United States by a citizen or resident of 
the United States as an employee (i) of an American employer (as 
defined in subsection (e) of this section), or (ii) of a foreign affiliate 
Supra. 
(as defined in section 3121(1)(8) of the Internal Revenue Code of 1954) 
of an American employer during any period for which there is in 
PUBLIC LAW 98-21—APR. 20, 1983 
97 STAT. 119 
effect an agreement, entered into pursuant to section 3121(1) of such 
Code, with respect to such affiliate,". 
2
6 use 3i2i. 
(c) Subsection (a) of section 406 of the Internal Revenue Code of 
1954 (relating to treatment of certain employees of foreign subsidiar- 26 use 406. 
ies for pension, etc., purposes) is amended to read as follows: 
"(a) TREATMENT AS EMPLOYEES OF AMERICAN EMPLOYER.—For pur-
poses of applying this part with respect to a pension, profit-sharing, 
or stock bonus plan described in section 401(a), an annuity plan 
described in section 403(a), or a bond purchase plan described in 
section 405(a), of an American employer (as defined in section 
3121(h)), an individual who is a citizen or resident of the United 
States and who is an employee of a foreign affiliate (as defined in 
section 3121(1)(8)) of such American employer shall be treated as an ^nte, p. ii8. 
employee of such American employer, i
f
— 
"(1) such American employer has entered into an agreement 
under section 3121(1) which applies to the foreign affiliate of 
which such individual is an employee; 
"(2) the plan of such American employer expressly provides 
for contributions or benefits for individuals who are citizens or 
residents of the United States and who are employees of its 
foreign affiliates to which an agreement entered into by such 
American employer under section 3121(1) applies; and 
''(3) contributions under a funded plan of deferred compensa-
tion (whether or not a plan described in section 401(a), 403(a), or 
405(a)) are not provided by any other person with respect to the 
remuneration paid to such individual by the foreign affiliate." 
(d) Paragraph (1) of section 407(a) of such Code (relating to certain 26 use 407. 
employees of domestic subsidiaries engaged in business outside the 
United States) is amended— 
(1) by striking out "citizen of the United States" and inserting 
in lieu thereof "citizen or resident of the United States", and 
(2) by striking out "citizens of the United States" and insert-
ing in lieu thereof "citizens or residents of the United States". 
(e)(1) Those provisions of subsection (1) of section 3121 of such Code 26 use 3121. 
which are not amended by subsection (a) of this section are amended 
in accordance with the following table: 
Strike out (wherever it appears 
in the text or heading): 
And insert: 
domestic corporation 
American employer 
domestic corporations 
American employers 
subsidiary 
affiliate 
subsidiaries 
affiliates 
foreign corporation 
foreign entity 
foreign corporations 
foreign entities 
citizens 
citizens or residents 
the word "a" where it appears 
an 
before "domestic". 
(2)(A) Section 406 of such Code (other than subsection (a^ thereof) 26 use 406. 
is amended in accordance with the following table: 
Strike out (wherever appearing 
in the text): 
And insert: 
domestic corporation 
American employer 
subsidiary 
affiliate 
the word "a" where it appears 
an 
before "domestic". 
(B) Paragraph (3) of subsection (c) of such section 406 (as in effect 
before the amendment made by subparagraph (A)) is amended by 
striking out "another corporation controlled by such domestic corpo-
97 STAT. 120 
PUBLIC LAW 98-21—APR. 20, 1983 
ration" and inserting in lieu thereof "another entity in which such 
American employer has not less than a 10-percent interest (within 
Ante, p. 118. 
the meaning of section 3121(1)(8)(B))". 
2
6 use 406. 
(C)(i) So much of subsection (d) of such section 406 as precedes 
paragraph (1) thereof is amended by striking out "another corpora-
tion and inserting in lieu thereof "another taxpayer". 
(ii) Paragraph (1) of subsection (d) of such section 406 is amended 
by striking out "any other corporation" and inserting in lieu thereof 
"any other taxpayer". 
(D)(i) The heading of such section 406 is amended to read as 
follows: 
"SEC. 406. EMPLOYEES OF FOREIGN AFFILIATES COVERED BY SECTION 
3121(1) AGREEMENTS.". 
(ii) The table of sections for subpart A of part I of subchapter D of 
chapter 1 of such Code is amended by striking out the item relating 
to section 406 and inserting in lieu thereof the following: 
"Sec. 406. Employees of foreign affiliates covered by section 3121(1) agree-
ments." 
(3) Clause (A) of the second sentence of section 1402(b) of such 
26 use 1402. 
Code (defining self-employment income) is amended by striking out 
"employees of foreign subsidiaries of domestic corporations" and 
inserting in lieu thereof "employees of foreign affiliates of American 
employers". 
26 use 6413. 
(4)(A) Subparagraph (C) of section 6413(c)(2) of such Code (relating 
to special refunds of PICA taxes in the case of employees of certain 
foreign corporations) is amended— 
(i) by striking out "FOREIGN CORPORATIONS" in the heading 
and inserting in lieu thereof "FOREIGN AFFIUATES", and 
(ii) by striking out "domestic corporation" in the text and 
inserting in lieu thereof "American employer". 
(B) The heading of paragraph (2) of section 6413(c) of such Code is 
amended by striking out "FOREIGN CORPORATIONS" and inserting in 
lieu thereof "FOREIGN AFFILIATES". 
Effective dates. 
(f)(1)(A) The amendments made by this section (other than subsec-
26 use 406 note, ^JQJJ (^J)) gjj^u apply to agreements entered into after the date of the 
enactment of this Act. 
(B) At the election of any American employer, the amendments 
made by this section (other than subsection (d)) shall also apply to 
any agreement entered into on or before the date of the enactment 
of this Act. Any such election shall be made at such time and in 
such manner as the Secretary may by regulations prescribe. 
(2)(A) The amendments made by subsection (d) shall apply to plans 
established after the date of the enactment of this Act. 
(B) At the election of any domestic parent corporation the amend-
ments made by subsection (d) shall also apply to any plan estab-
lished on or before the date of the enactment of this Act. Any such 
election shall be made at such time and in such manner as the 
Secretary may by regulations prescribe. 
EXTENSION OF COVERAGE BY INTERNATIONAL SOCIAL SECURFFY 
AGREEMENT 
42 use 410. 
SEC. 322. (a)(1) Section 210(a) of 
the Social Security Act (as amended 
by sections 321(b) and 323(a)(2) of this Act) is further amended, in 
the matter preceding paragraph (1)— 
(A) by striking out "either" before "(A)", and 
PUBLIC LAW 98-21—APR. 20, 1983 
97 STAT. 121 
(B) by inserting before "; except" the following: ", or (C) if it is 
service, regardless of where or by whom performed, which is 
designated as employment or recognized as equivalent to em-
ployment under an agreement entered into under section 233". 
(2) Section 3121(b) of the Internal Revenue Code of 1954 is 
amended, in the matter preceding paragraph (1)— 
(A) by striking out "either" before "(A)", and 
(B) by inserting before "; except" the following: ", or (C) if it is 
service, regardless of where or by whom performed, which is 
designated as employment or recognized as equivalent to 
employment under an agreement entered into under section 233 
of the Social Security Act". 
(b)(1) Section 211(b) of the Social Security Act is amended by 
inserting after "non-resident alien individual" the following: ", 
except as provided by an agreement under section 233". 
(2) The first sentence of section 1402(b) of the Internal Revenue 
Code of 1954 is amended by inserting after "non-resident alien 
individual" the following: ", except as provided by an agreement 
under section 233 of the Social Security Act". 
(c) The amendments made by this section shall be effective for 
taxable years beginning on or after the date of the enactment of this 
Act. 
42 use 433. 
26 use 3121. 
42 use 433. 
42 use 411. 
26 use 1402. 
Effective date. 
26 use 3121 
note. 
TREATMENT OF CERTAIN SERVICE PERFORMED OUTSIDE THE UNITED 
STATES 
SEC. 323. (a)(1) Subsection (b) of section 3121 of the Internal 
Revenue Code of 1954 (defining employment) is amended by striking 
out "a citizen of the United States" in the matter preceding para-
graph (1) thereof and inserting in lieu thereof "a citizen or resident 
ofthe United States". 
(2) Subsection (a) of section 210 of the Social Security Act is 
amended by striking out "a citizen of the United States" in the 
matter preceding paragraph (1) thereof and inserting in lieu thereof 
"a citizen or resident ofthe United States". 
(b)(1) Paragraph (11) of section 1402(a) of the Internal Revenue 
Code of 1954 (defining net earnings from self-employment) is 
amended by striking out "in the case of an individual described in 
section 911(d)(1)(B),". 
(2)(A) Paragraph (10) of section 211(a) ofthe Social Security Act (as 
amended by section 124(c)(3) of this Act) is further amended to read 
as follows: 
"(10) The exclusion from gross income provided by section 
911(a)(1) ofthe Internal Revenue Code of 1954 shall not apply;". 
(B) Effective with respect to taxable years beginning after Decem-
ber 31, 1981, and before January 1, 1984, paragraph (10) of section 
211(a) of such Act is amended to read as follows: 
"(10) In the case of an individual described in section 
911(d)(1)(B) of the Internal Revenue Code of 1954, the exclusion 
from gross income provided by section 911(a)(1) of such Code 
shall not apply;". 
(c)(1) The amendments made by subsection (a) shall apply to 
remuneration paid after December 31,1983. 
(2) Except as provided in subsection (b)(2)(B), the amendments 
made by subsection (b) shall apply to taxable years beginning after 
December 31,1983. 
26 use 3121. 
42 use 410. 
26 use 1402. 
Ante, p. 90. 
26 use 911. 
Effective dates. 
26 use 3121 
note. 
26 use 1402 
note. 
97 STAT. 122 
PUBLIC LAW 98-21—APR. 20, 1983 
AMOUNTS RECEIVED UNDER CERTAIN DEFERRED COMPENSATION AND 
SALARY REDUCTION ARRANGEMENTS TREATED AS WAGES FOR FICA 
TAXES 
26 use 3121. 
SEC. 324. (a)(1) Section 3121 of the Internal Revenue Code of 1954 
(relating to definitions) is amended by adding at the end thereof the 
following new subsection: 
"(v) TREATMENT OF CERTAIN DEFERRED COMPENSATION AND SALARY 
REDUCTION ARRANGEMENTS.— 
"(1) CERTAIN EMPLOYER CONTRIBUTIONS TREATED AS WAGES.— 
Nothing in any paragraph of subsection (a) (other than para-
graph (1)) shall exclude from the term 'wages'— 
"(A) any employer contribution under a qualified cash or 
deferred arrangement (as defined in section 401(k)) to the 
extent not included in gross income by reason of section 
402(aX8), or 
"(B) any amount treated as an employer contribution 
under section 414(h)(2). 
"(2) T R E A T M E N T O F CERTAIN N O N Q U A L I F I E D DEFERRED COMPEN-
SATION PLANS.— 
"(A) IN GENERAL.—Any amount deferred under a non-
qualified deferred compensation plan shall be taken into 
account for purposes of this chapter as of the later of— 
"(i) when the services are performed, or 
"(ii) when there is no substantial risk of forefeiture of 
the rights to such amount. 
"(B) TAXED ONLY ONCE.—Any amount taken into account 
as wages by reason of subparagraph (A) (and the income 
attributable thereto) shall not thereafter be treated as 
wages for purposes of this chapter. 
"(C) NONQUALIFIED DEFERRED COMPENSATION PLAN.—For 
purposes of this paragraph, the term 'nonqualified deferred 
compensation plan' means any plan or other arrangement 
for deferral of compensation other than a plan described in 
subsection (a)(5). 
"(3) EXEMPT GOVERNMENTAL DEFERRED COMPENSATION PLAN.— 
For purposes of subsection (a)(5), the term 'exempt governmen-
tal deferred compensation plan' means any plan providing for 
deferral of compensation established and maintained for its 
employees by the United States, by a State or political subdivi-
sion thereof, or by an agency or instrumentality of any of the 
foregoing. Such term shall not include— 
"(A) any plan to which section 83, 402(b), 403(c), 457(a), or 
457(e)(1) applies, and 
"(B) any annuity contract described in section 403(b)." 
(2) Paragraph (5) of section 3121(a) of such Code (defining wages) is 
amended— 
(A) by striking out "or" at the end of subparagraph (C), 
(B) by striking out the semicolon at the end of subparagraph 
(D) and inserting in lieu thereof a comma, and 
(C) by adding at the end thereof the following new subpara-
graphs: 
"(E) under or to an annuity contract described in section 
403(b), other than a payment for the purchase of such 
contract which is made by reason of a salary reduction 
agreement (whether evidenced by a written instrument or 
otherwise), 
PUBLIC LAW 98-21—APR. 20, 1983 
97 STAT. 123 
"(F) under or to an exempt governmental deferred com-
pensation plan (as defined in subsection (v)(3)), or 
"(G) to supplement pension benefits under a plan or trust 
described in any of the foregoing provisions of this para-
graph to take into account some portion or all of the 
increase in the cost of living (as determined by the Secre-
tary of Labor) since retirement but only if such supplemen-
tal payments are under a plan which is treated as a welfare 
plan under section 3(2)(B)(ii) of the Employee Retirement 
Income Security Act of 1974;". 
29 use 1002. 
(3) Subsection (a) of section 3121 of such Code (defining wages) is 26 use 3121. 
amended— 
(A) in paragraph (2), by striking out subparagraph (A) and 
redesignating subparagraphs (B), (C), and (D) as subparagraphs 
(A), (B), and (C), respectively, 
(B) by striking out paragraphs (3) and (9), 
(C) in paragraph (13)(A)— 
(i) by inserting "or" after "death,", and 
(ii) by striking out "or (iii) retirement after attaining an 
age specified in the plan referred to in subparagraph (B) or 
in a pension plan of the employer,", and 
(D) by striking out "subparg^graph (B)" in the last sentence 
thereof and inserting in lieu thereof "subparagraph (A)". 
(b)(1) Section 3306 of the Internal Revenue Code of 1954 (relating 26 use 3306. 
to definitions) is amended by adding at the end thereof the following 
new subsection: 
"(r) TREATMENT OF CERTAIN DEFERRED COMPENSATION AND SALARY 
REDUCTION ARRANGEMENTS.— 
"(1) CERTAIN EMPLOYER CONTRIBUTIONS TREATED AS WAGES.— 
Nothing in any paragraph of subsection Ot)) (other than para-
graph (1)) shall exclude from the term 'wages'— 
"(A) any employer contribution under a qualified cash or 
deferred arrangement (as defined in section 401(k)) to the 
extent not included in gross income by reason of section 
402(a)(8), or 
"(B) any amount treated as an employer contribution 
under section 414(hX2). 
"(2) TREATMENT OF CERTAIN NONQUAUFIED DEFERRED COMPEN-
SATION PLANS.— 
"(A) IN GENERAL.—Any amount deferred under a non-
qualified deferred compensation plan shall be taken into 
account for purposes of this chapter as of the later of^ 
"(i) when the services are performed, or 
"(ii) when there is no substantial risk of forfeiture of 
the rights to such amount. 
"(B) TAXED ONLY ONCE.—Any amount taken into account 
as wages by reason of subparagraph (A) (and the income 
attributable thereto) shall not thereafter be treated as 
wages for purposes of this chapter. 
"(C) NONQUAUFIED DEFERRED COMPENSATION PLAN.—For 
purposes of this paragraph, the term 'nonqualified deferred 
compensation plan' means any plan or other arrangement 
for deferral of compensation other than a plan described in 
subsection Ot)X5)." 
(2) Paragraph (5) of section 33060t)) of such Code (defining wages) is 
amended— 
(A) by striking out "or" at the end of subparagraph (C), 
97 STAT. 124 
PUBLIC LAW 98-21—APR. 20, 1983 
(B) by striking out the semicolon at the end of subparagraph 
(D) and inserting in heu thereof a comma, and 
(C) by adding at the end thereof the following new subpara-
graphs: 
"(E) under or to an annuity contract described in section 
403G5), other than a payment for the purchase of such contract 
which is made by reason of a salary reduction ^reement 
(whether evidenced by a written instrument or otherwise), 
"(F) under or to an exempt governmental deferred compensa-
Ante, p. 122. 
tion plan (as defined in section 3121(v)(3)), or 
"(G) to supplement pension benefits under a plan or trust 
described in any of the foregoing provisions of this paragraph to 
take into account some portion or all of the increase in the cost 
of living (as determined by the Secretary of Labor) since retire-
ment but only if such supplemental payments are under a plan 
which is treated as a welfare plan under section 3(2)(BXii) of the 
2
9 use 1002. 
Employee Retirement Income Security Act of 1974;". 
26 use 3306. 
(3) Subsection (b) of section 3306 of such Code (defining wages) is 
amended— 
(A) in paragraph (2), by striking out subparagraph (A) and 
redesignating subparagraphs (B), (C), and (D) as subparagraphs 
(A), (B), and (C), respectively, 
(B) by striking out paragraphs (3) and (8), and 
(C) in paragraph (lOXA)— 
(i) by inserting "or" after "death,", and 
(ii) by striking out "or (iii) retirement after attaining an 
age specified in the plan referred to in subparagraph (B) or 
in a pension plan of the employer,". 
(4)(A) Subparagraph (A) of section 3306(b)(2) of such Code, as 
redesignated by paragraph (3)(A), is amended to read as follows: 
"(A) sickness or accident disability (but, in the case of pay-
ments made to an employee or any of his dependents, this 
subparagraph shall exclude from the term 'wages' only pay-
ments which are received under a workman's compensation 
law), or". 
(B) Subsection (Jb) of section 3306 of such Code (defining wages) is 
amended by adding at the end thereof the following new flush 
sentence: 
"Except as otherwise provided in regulations prescribed by the 
Secretary, any third party which m^es a payment included in 
wages solely by reason of the parenthetical matter contained in 
subparagraph (A) of paragraph (2) shall be treated for purposes of 
26 use 3201 et this chapter and chapter 22 as the employer with respect to such 
««9- 
wages." 
26 use 3306 
(C) Rules similar to the rules of subsections (d) and (e) of section 3 
"^^TTo^ 0
1
0
1 
of the Act entitled "An Act to amend the Omnibus Reconciliation 
Act of 1981 to restore minimum benefits under the Social Security 
Act" (Public Law 97-123), approved December 29, 1981, shall apply 
Supra. 
in the administration of section 33060t>)(2)(A) of such Code (as 
amended by subparagraph (A)). 
Ante, p. 70. 
(cXD Section 209 of the Social Security Act (as amended by section 
lOl(cXl) of this Act) is further amended by adding at the end thereof 
the following new paragraphs: 
"Nothing in any of the foregoing provisions of this section (other 
than subsection (a)) shall exclude from the term 'wages'— 
"(1) Any employer contribution under a qualified cash or 
deferred arrangement (as defined in section 401(k) of the Inter-
26 use 3121 
note 
PUBLIC LAW 98-21—APR. 20, 1983 
97 STAT. 125 
nal Revenue Code of 1954) to the extent not included in gross 
income by reason of section 402(a)(8) of such Code, or 
"(2) Any amount which is treated as an employer contribution 
under section 414(h)(2) of such Code. 
"Any amount deferred under a nonqualified deferred compensa-
tion plan (within the meaning of section 3121(vX2)(C) of the Internal 
Revenue Code of 1954) shall be taken into account for purposes of 
this title as of the later of when the services are performed, or when 
there is no substantial risk of forfeiture of the rights to such 
amount. Any amount taken into account as wages by reason of the 
preceding sentence (and the income attributable thereto) shall not 
thereafter be treated as wages for purposes of this title." 
(2) Subsection (e) of section 209 of such Act is amended by adding 
before the semicolon at the end thereof the following: ", or (5) under 
or to an annuity contract described in section 403(b) of the Internal 
Revenue Code of 1954, other than a payment for the purchase of 
such contract which is made by reason of a salary reduction agree-
ment (whether evidenced by a written instrument or otherwise), or 
(6) under or to an exempt governmental deferred compensation plan 
(as defined in section 3121(vK3) of such Code), or (7) to supplement 
pension benefits under a plan or trust described in any of the 
foregoing provisions of this subsection to take into account some 
portion or all of the increase in the cost of living (as determined by 
the Secretary of Labor) since retirement but only if such supplemen-
tal payments are under a plan which is treated as a welfare plan 
under section 3(2XBXii) of the Employee Retirement Income Secu-
rity Act of 1974;". 
(3) Section 209 of such Act is amended— 
(A) in subsection (b), by striking out paragraph (1) and redes-
ignating paragraphs (2), (3), and (4) as paragraphs (1), (2), and 
(3), respectively, 
(B) by striking out subsections (c) and (i), and 
(C) in subsection (mXl)— 
(i) by inserting "or" after "death,", and 
(ii) by striking out "or (C) retirement after attaining an 
age specified in the plan referred to in paragraph (2) or in a 
pension plan of the employer,". 
(4) Section 203(fK5XC) of the Social Security Act is amended by 
adding at the end thereof the following new sentence: "The term 
'wages' does not include— 
"(i) the amount of any pa3rment made to, or on behalf of, 
an emplojree or any of his dependents (including any 
amount paid by an employer for insurance or annuities, or 
into a fund, to provide for any such payment) on account of 
retirement, or 
"(ii) any payment or series of payments by an employer to 
an employee or any of his dependents upon or after the 
termination of the employee's employment relationship be-
cause of retirement after attaining an age specified in a 
plan referred to in section 209(mX2) or in a pension plan of 
the employer." 
(dXl) Except as otherwise provided in this subsection, the amend-
ments made by this section shall apply to remuneration paid after 
December 31,1983. 
(2) Except as otherwise provided in this subsection, the amend-
ments made by subsection (b) shall apply to remuneration paid after 
December 31,1984. 
26 use 401. 
Ante, p. 122. 
42 use 409. 
26 use 403. 
Ante, p. 122. 
29 use 1002. 
42 use 409. 
42 use 403. 
42 use 409. 
Effective 
dates. 
26 use 3121 
note. 
97 STAT. 126 
PUBLIC LAW 98-21—APR. 20, 1983 
Employer contri-
butions. 
26 u s e 401. 
Ante, p. 122. 
26 u s e 457. 
(3) The amendments made by this section shall not apply to 
employer contributions made during 1984 and attributable to serv-
ices performed during 1983 under a qualified cash or deferred 
arrangement (as defined in section 401(k) of the Internal Revenue 
Code of 1954) if, under the terms of such arrangement as in effect on 
March 24,1983— 
(A) the employee makes an election with respect to such 
contribution before January 1,1984, and 
(B) the employer identifies the amount of such contribution 
before January 1,1984. 
In the case of the amendments made by subsection (b), the preceding 
sentence shall be applied by substituting "1985" for "1984" each 
place it appears and by substituting "during 1984" for "during 
1983". 
(4) In the case of an agreement in existence on March 24, 1983, 
between a nonqualified deferred compensation plan (as defined in 
section 3121(v)(2)(C) of the Internal Revenue Code of 1954, as added 
by this section) and an individual— 
(A) the amendments made by this section (other than subsec-
tion (b)) shall apply with respect to services performed by such 
individual after December 31,1983, and 
(B) the amendments made by subsection (b) shall apply with 
respect to services performed by such individual after December 
31,1984. 
The preceding sentence shall not apply in the case of a plan to 
which section 457(a) of such Code applies. 
42 u s e 418. 
Effective 
date. 
42 u s e 418 
note. 
EFFECT OF CHANGES IN NAMES OF STATE AND LOCAL EMPLOYEE GROUPS 
IN UTAH 
SEC. 325. (a) Section 218(o) of the Social Security Act is amended 
by adding at the end thereof the following new sentence: "Coverage 
provided for in this subsection shall not be affected by a subsequent 
change in the name of a group.". 
(b) The amendment made by subsection (a) shall apply with 
respect to name changes made before, on, or after the date of the 
enactment of this section. 
42 u s e 433. 
Effective 
date. 
42 u s e 433 note. 
26 u s e 3121. 
EFFECTIVE DATES OF INTERNATIONAL SOCIAL SECURITY AGREEMENTS 
SEC. 326. (a) Section 233(eX2) of the Social Security Act is amended 
by striking out "during which each House of the Congress has been 
in session on each of 90 days" and inserting in lieu thereof "during 
which at least one House of the Congress has been in session on each 
of 60 days". 
(b) The amendment made by subsection (a) shall be effective on 
the date of the enactment of this Act. 
CODIFICATION OF ROWAN DECISION WITH RESPECT TO MEALS AND 
LODGING 
SEC 327. (aXD Subsection (a) of section 3121 of the Internal 
Revenue Code of 1954 (defining wages) is amended by striking out 
"or" at the end of paragraph (17), by striking out the period at the 
end of paragraph (18) and inserting in lieu thereof "; or", and by 
inserting after paragraph (18) the following new paragraph: 
PUBLIC LAW 98-21—APR. 20, 1983 
97 STAT. 127 
"(19) the value of any meals or lodging furnished by or on 
behalf of the employer if at the time of such furnishing it is 
reasonable to believe that the employee will be able to exclude 
such items from income under section 119.". 
(2) Section 209 of the Social Security Act is amended by striking 42 use 409. 
out "or" at the end of the subsection (p) which was added by Public 
Law 95-472, by striking out the period at the end of subsection (q) 92 Stat. 1333. 
and inserting in lieu thereof "; or", and by inserting after subsection 
(q) the following new subsection: 
"(r) The value of any meals or lodging furnished by or on behalf of 
the employer if at the time of such furnishing it is reasonable to 
believe that the employee will be able to exclude such items from 
income under section 119 of the Internal Revenue Code of 1954.". 26 use 119. 
(b)(1) Subsection (a) of section 3121 of such Code is amended by 26 use 3i2i. 
inserting after and below paragraph (19) (as added by subsection (a) 
of this section) the following new sentence: 
"Nothing in the regulations prescribed for purposes of chapter 24 
(relating to income tax withholding) which provides an exclusion 
from 'wages' as used in such chapter shall be construed to require a 
similar exclusion from 'wages' in the regulations prescribed for 
purposes of this chapter.". 
(2) Section 209 of the Social Security Act is amended by inserting 42 use 409. 
immediately after and below subsection (r) (as added by subsection 
(a) of this section) the following new sentence: 
"Nothing in the regulations prescribed for purposes of chapter 24 of 
the Internal Revenue Code of 1954 (relating to income tax withhold- 26 use 3401 
ing) which provides an exclusion from 'wages' as used in such ^^*^^-
chapter shall be construed to require a similar exclusion from 
'wages' in the regulations prescribed for purposes of this title.". 
(c) Subsection (b) of section 3306 of the Internal Revenue Code of 
1954 (defining wages) is amended— 
26 use 3306. 
(1) by striking out "or" at the end of paragraph (12), 
(2) by striking out the period at the end of paragraph (13) and 
inserting in lieu thereof ", or", 
(3) by adding immediately after paragraph (13) the following 
new paragraph: 
"(14) the value of any meals or lodging furnished by or on 
behalf of the employer if at the time of such furnishing it is 
reasonable to believe that the employee will be able to exclude 
such items from income under section 119.", and 
(4) by adding at the end thereof the following new flush 
sentence: 
"Nothing in the regulations prescribed for purposes of chapter 24 
(relating to income tax withholding) which provides an exclusion 
from 'wages' as used in such chapter shall be construed to require a 
similar exclusion from 'wages' in the regulations prescribed for 
purposes of this chapter.". 
(dXD Except as provided in paragraph (2), the amendments made Effective 
by subsections (a) and (b) shall apply to remuneration paid after '
^
^
*
®
^
-
December 31,1983. 
26^use 3i2i 
(2) The amendments made by subsection (c) shall apply to remu-
neration paid after December 31,1984. 
97 STAT. 128 
PUBLIC LAW 98-21—APR. 20, 1983 
TREATMENT OF CONTRIBUTIONS UNDER SIMPUFIED EMPLOYEE PENSIONS 
SEC. 328. (a) Subparagraph (D) of section 3121(a)(5) of the Internal 
26 use 3121. 
Revenue Code of 1954 (defining wages) is amended by striking out 
"section 219" and inserting in lieu thereof "section 219(b)(2)". 
42 use 409. 
(b) Subsection (e) of section 209 of the Social Security Act, (as 
amended by section 324(c)(2) of this Act) is further amended by 
striking out the semicolon at the end thereof and inserting in lieu 
thereof the following: ", or (8) under a simplified employee pension 
26 use 408. 
(as defined in section 408(k) of the Internal Revenue Code of 1954) if, 
at the time of the payment, it is reasonable to believe that the 
employee will be entitled to a deduction under section 2190t))(2) of 
such Code for such payment;". 
(c) Subparagraph (D) of section 330603)(5) of the Internal Revenue 
26 use 3306. 
Code of 1954 is amended by striking out "section 219" and inserting 
in lieu thereof "section 219a)X2)". 
Effective dates. 
((i)(i) Except as provided in paragraph (2), the amendments made 
26 use 3121 
by this section shall apply to remuneration paid after December 31, 
note. 
1983 
(2) The amendments made by subsection (c) shall apply to remu-
neration paid after December 31,1984. 
PART C—OTHER AMENDMENTS 
TECHNICAL AND CONFORMING AMENDMENTS TO MAXIMUM 
FAMILY BENEFIT PROVISIONS 
42 use 403. 
SEC. 331. (a)(1) Section 203(a)(3XA) of the Social Security Act is 
amended by striking out clause (ii) and inserting in lieu thereof the 
following: 
"(ii) an amount (I) initially equal to the product of 1.75 and 
the primary insurance amount that would be computed under 
42 use 415. 
section 215(aXl), for January of the year determined for pur-
poses of this clause under the following two sentences, with 
respect to average indexed monthly earnings equal to one-
twelfth of the contribution and benefit base determined for that 
42 use 430. 
year under section 230, and (II) thereafter increased in accord-
ance with the provisions of section 215(iX2XAXii). 
The year established for purposes of clause (ii) shall be 1983 or, if it 
occurs later with respect to any individual, the year in which 
occurred the month that the application of the reduction provisions 
contained in this subparagraph began with respect to benefits pay-
able on the basis of the wages and self-employment income of the 
insured individual. If for any month subsequent to the first month 
for which clause (ii) applies (with respect to benefits payable on the 
basis of the wages and self-employment income of the insured 
individual) the reduction under this subparagraph ceases to apply, 
then the year determined under the preceding sentence shall be 
redetermined (for purposes of any subsequent application of this 
subparagraph with respect to benefits payable on the basis of such 
wages and self-employment income) as though this subparagraph 
had not been previously applicable.". 
(2) Section 203(aX7) of such Act is amended by striking out every-
thing that follows "shall be reduced to an amount equal to" and 
inserting in lieu thereof "the amount determined in accordance with 
the provisions of paragraph (3XAXii) of this subsection, except that 
for this purpose the references to subparagraph (A) in the last two 
PUBLIC LAW 98-21—APR. 20, 1983 
97 STAT. 129 
sentences of paragraph (3)(A) shall be deemed to be references to 
paragraph (7).". 
(b) Clause (i) in the last sentence of section 203(b)(1) of such Act (as 
amended by section 132(b) of this Act) is further amended by strik-
ing out "penultimate sentence" and inserting in lieu thereof "first 
sentence of paragraph (4)". 
(c) The amendments made by subsection (a) shall be effective with 
respect to payments made for months after December 1983. 
42 u s e 403. 
Ante, p. 94. 
Effective date. 
42 u s e 403 note. 
RELAXATION OF INSURED STATUS REQUIREMENTS FOR CERTAIN 
WORKERS PREVIOUSLY ENTITLED TO A PERIOD OF DISABILITY 
SEC. 332. (a) Section 216(i)(3) of the Social Security Act is 
amended— 
(1) by striking out the semicolon at the end of clause (ii) of 
subparagraph (B) and inserting in lieu thereof ", or"; and 
(2) by inserting after clause (ii) of such subparagraph the 
following new clause: 
"(iii) in the case of an individual (not otherwise insured under 
clause (i)) who, by reason of clause (ii), had a prior period of 
disability that began during a period before the quarter in 
which he or she attained age 31, not less than one-half of the 
quarters beginning after such individual attained age 21 and 
ending with such quarter are quarters of coverage, or (if the 
number of quarters in such period is less than 12) not less than 
6 of the quarters in the 12-quarter period ending with such 
quarter are quarters of coverage;". 
O
t
)
) Section 223(c)(lXB) of such Act is amended— 
(1) by striking out the semicolon at the end of clause (ii) and 
inserting in lieu thereof ", or"; and 
(2) by inserting after clause (ii) the following new clause: 
"(iii) in the case of an individual (not otherwise 
insured under clause (i)) who, by reason of section 
216(i)(3)(BXii), had a prior period of disability that 
began during a period before the quarter in which he or 
she attained age 31, not less than one-half of the quar-
ters beginning after such individual attained age 21 
and ending with the quarter in which such month 
occurs are quarters of coverage, or (if the number of 
quarters in such period is less than 12) not less than 6 
of the quarters in the 12-quarter period ending with 
such quarter are quarters of coverage;". 
(c) The amendments made by this section shall be effective with 
respect to applications for disability insurance benefits under sec-
tion 223 of the Social Security Act, and for disability determinations 
under section 216(i) of such Act, filed after the date of the enactment 
of this Act, except that no monthly benefits under title II of the 
Social Security Act shall be payable or increased by reason of the 
amendments made by this section for months before the month 
following the month of enactment of this Act. 
42 u s e 416. 
42 u s e 423. 
42 u s e 416. 
Effective date. 
42 u s e 416 note. 
42 u s e 423. 
42 u s e 416. 
42 u s e 401. 
PROTECTION OF BENEFITS OF ILLEGITIMATE CHILDREN OF DISABLED 
BENEFICIARIES 
SEC 333. (a) The last sentence of section 216(h)(3) of the Social 
Security Act is amended by striking out "subparagraph (AXi)" and 
inserting in lieu thereof "subparagraphs (AXi) and (BXi)". 
42 u s e 416. 
11-194 0 - 8 5 — 6 
: QL 3 
97 STAT. 130 
PUBLIC LAW 98-21—APR. 20, 1983 
Effective date. 
(b) The amendment made by subsection (a) shall be effective on 
42 use 416 note, the date of the enactment of this Act. 
ONE-MONTH RETROACTIVITY OF WIDOW'S AND WIDOWER'S INSURANCE 
BENEFITS 
42 use 402. 
SEC. 334. (a) Section 202(j)(4XB) of the Social Security Act is 
amended— 
(1) by redesignating clauses (iii) and (iv) as clauses (iv) and (v), 
respectively; and 
(2) by adding after clause (ii) the following new clause: 
"(iii) Subparagraph (A) does not apply to a benefit under subsec-
tion (e) or (f) for the month immediately preceding the month of 
application, if the insured individual died in that preceding month.". 
Effective date. 
(b) The amendments made by subsection (a) shall apply with 
42 use 402 note, respect to survivors whose applications for monthly benefits are 
filed after the second month following the month in which this Act 
is enacted. 
42 u s e 407. 
42 u s e 659. 
26 u s e 86. 
Ante, p. 80. 
26 u s e 871. 
Ante, p. 82. 
Effective date. 
42 u s e 407 note. 
NONASSIGNABILITY OF BENEFITS 
SEC. 335. (a) Section 207 of the Social Security Act is amended— 
(1) by inserting "(a)" before "The right"; and 
(2) by adding at the end thereof the following new subsection: 
"(b) No other provision of law, enacted before, on, or after the date 
of the enactment of this section, may be construed to limit, super-
sede, or otherwise modify the provisions of this section except to the 
extent that it does so by express reference to this section.". 
(b)(1) Section 459(a) of such Act is amended by inserting "(includ-
ing section 207)" after "any other provision of law". 
(2)(A) Section 86(a) of the Internal Revenue Code of 1954 (as added 
by section 121(a) of this Act) is amended by inserting "(notwith-
standing section 207 of the Social Security Act)" before "includes". 
(B) Section 871(a)(3)(A) of such Code (as added by section 121(cXl) 
of this Act) is amended by inserting "(notwithstanding section 207 of 
the Social Security Act)" after "income". 
(c) The amendments made by subsection (a) shall apply only with 
respect to benefits payable or rights existing under the Social 
Security Act on or after the date of the enactment of this Act. 
42 u s e 405. 
USE OF DEATH CERTIFICATES TO PREVENT ERRONEOUS BENEFIT 
PAYMENTS TO DECEASED INDIVIDUALS 
SEC. 336. Section 205 of the Social Security Act is amended by 
adding at the end thereof the following new subsection: 
USE 
OF 
DEATH 
CERTIFICATES 
TO 
CORRECT 
PROGRAM INFORMATION 
"(rXD The Secretary shall undertake to establish a program under 
which— 
"(A) States (or political subdivisions thereof) voluntarily con-
tract with the Secretary to furnish the Secretary periodically 
with information (in a form established by the Secretary in 
consultation with the States) concerning individuals with 
respect to whom death certificates (or equivalent documents 
maintained by the States or subdivisions) have been officially 
filed with them; and 
PUBLIC LAW 98-21—APR. 20, 1983 
97 STAT. 131 
"(B) there will be (i) a comparison of such information on such 
individuals with information on such individuals in the records 
being used in the administration of this Act, (ii) validation of 
the results of such comparisons, and (iii) corrections in such 
records to accurately reflect the status of such individuals. 
"(2) Each State (or political subdivision thereof) which furnishes 
the Secretary with information on records of deaths in the State or 
subdivision under this subsection may be paid by the Secretary from 
amounts available for administration of this Act the reasonable 
costs (established by the Secretary in consultations with the States) 
for transcribing and transmitting such information to the Secretary. 
"(3) In the case of individuals with respect to whom federally 
funded benefits are provided by (or through) a Federal or State 
agency other than under this Act, the Secretary shall to the extent 
feasible provide such information through a cooperative arrange-
ment with such agency, for ensuring proper payment of those 
benefits with respect to such individuals i
f
— 
"(A) under such arrangement the agency provides reimburse-
ment to the Secretary for the reasonable cost of carrying out 
such arrangement, and 
"(B) such arrangement does not conflict with the duties of the 
Secretary under paragraph (1). 
"(4) The Secretary may enter into similar agreements with States 
to provide information for their use in programs wholly funded by 
the States if the requirements of (r)(3)(A) and (r)(3)(B) are met. 
"(5) The Secretary may use or provide for the use of such records 
as may be corrected under this section, subject to such safeguards as 
the Secretary determines are necessary or appropriate to protect the 
information from unauthorized use or disclosure, for statistical and 
research activities conducted by Federal and State agencies. 
"(6) Information furnished to the Secretary under this subsection 
may not be used for any purpose other than the purpose described in 
this subsection and is exempt from disclosure under section 552 of 
title 5, United States Code, and from the requirements of section 
552a of such title. 
"(7) The Secretary shall include information on the status of the 
program established under this section and impediments to the 
effective implementation of the program in the 1984 report required 
under section 704 of the Act.". 
Cooperative 
arrangements 
with State or 
Federal 
agencies. 
Information 
protection. 
Information 
disclosure, 
exemption. 
42 u s e 904. 
PUBUC PENSION OFFSET 
SEC. 337. (a) Subsections (bX4XA), (c)(2XA), (fX2XA), and (gX4)(A) of 
section 202 of the Social Security Act, and paragraph (7XA) of 42 use 402. 
section 202(e) of such Act (as redesignated by section 131(aX3XA) of 
this Act), are each amended— 
Ante, p. 92. 
(1) by striking out "by an amount equal to the amount of any 
monthly periodic benefit" and inserting in lieu thereof "by an 
amount equal to two-thirds of the amount of any monthly 
periodic benefit"; and 
(2) by adding at the end thereof the following new sentence: 
"The amount of the reduction in any benefit under this subpar-
agraph, if not a multiple of $0.10, shall be rounded to the next 
higher multiple of $0.10.". 
O
b
) The amendments made by subsection (a) of this section shall Effective date. 
apply only with respect to monthly insurance benefits payable 4
2 use 402 note. 
under title II of the Social Security Act to individuals who initially 42 use 401. 
97 STAT. 132 
PUBLIC LAW 98-21—APR. 20, 1983 
42 u s e 402 and 
note, 426. 
become eligible (as defined in section 334 of Public Law 95-216) for 
monthly periodic benefits (within the meaning of the provisions 
amended by subsection (a)) for months after June 1983. 
Joint Study 
Panel on the 
Social Security 
Administration. 
42 u s e 902 note. 
Membership. 
Vacancies. 
Pay. 
Appropriation 
authorization. 
STUDY CONCERNING THE ESTABLISHMENT OF THE SOCIAL SECURITY 
ADMINISTRATION AS AN INDEPENDENT AGENCY 
SEC. 338. (a) There is hereby established, under the authority of 
the Committee on Ways and Means of the House of Representatives 
and the Committee on Finance of the Senate, a joint study panel to 
be known as the Joint Study Panel on the Social Security Adminis-
tration (hereafter in this section referred to as the "Panel"). The 
duties of the Panel shall be to conduct the study provided for in 
subsection (c). 
(b)(1) The Panel shall be composed of 3 members, appointed jointly 
by the chairmen of the Committee on Ways and Means of the House 
of Representatives and the Committee on Finance of the Senate and 
such chairmen shall jointly select one member of the Panel to serve 
as chairman of the Panel. Members of the Panel shall be chosen, on 
the basis of their integrity, impartiality, and good judgment, from 
individuals who, as a result of their training, experience, and attain-
ments, are widely recognized by professionals in the fields of govern-
ment administration, social insurance, and labor relations as experts 
in those fields. 
(2) Vacancies in the membership of the Panel shall not affect the 
power of the remaining members to perform the duties of the Panel 
and shall be filled in the same manner in which the original 
appointment was made. 
(3) Each member of the Panel not otherwise in the employ of the 
United States Government shall receive the daily equivalent of the 
annual rate of basic pay payable for level V of the Executive 
Schedule under section 5316 of title 5, United States Code, for each 
day during which such member is actually engaged in the perform-
ance of the duties of the Panel. Each member of the Panel shall be 
allowed travel expenses in the same manner as any individual 
employed intermittently by the Federal Government is allowed 
travel expenses under section 5703 of title 5, United States Code. 
(4) By agreement between the chairmen of the Committee on 
Ways and Means of the House of Representatives and the Commit-
tee on Finance of the Senate, such Committees shall provide the 
Panel, on a reimbursible basis, office space, clerical personnel, and 
such supplies and equipment as may be necessary for the Panel to 
carry out its duties under this section. Subject to such limitations as 
the chairmen of such Committees may jointly prescribe, the Panel 
may appoint such additional personnel as the Panel considers neces-
sary and fix the compensation of such personnel as it considers 
appropriate at an annual rate which does not exceed the rate of 
basic pay then payable for GS-18 of the General Schedule under 
section 5332 of title 5, United States Code, and may procure by 
contract the temporary or intermittent services of clerical personnel 
and experts or consultants, or organizations thereof. 
(5) There are hereby authorized to be appropriated to the Panel, 
from amounts in the general fund of the Treasury not otherwise 
appropriated, such sums as are necessary to carry out the purposes 
of this section. 
(cXD The Panel shall undertake, as soon as possible after the date 
tif the enactment of this Act, a thorough study with respect to the 
PUBLIC LAW 98-21—APR. 20, 1983 
97 STAT. 133 
implementation of removing the Social Security Administration 
from the Department of Health and Human Services and establish-
ing it as an independent agency in the executive branch with its 
own independent administrative structure, including the possibility 
of such a structure headed by a board appointed by the President, by 
and with the advice and consent of the Senate. 
(2) The Panel in its study under paragraph (1) shall address, 
analyze, and report specifically on the following matters: 
(A) the manner in which the transition to an independent 
agency would be conducted; 
(B) the authorities which would have to be transferred or 
amended in such a transition; 
(C) the program or programs which would be included within 
the jurisdiction of the new agency; 
(D) the legal and other relationships of the Social Security 
Administration with other organizations which would be 
required as a result of establishing the Social Security Adminis-
tration as an independent agency; and 
(E) any other details which may be necessary for the develop-
ment of appropriate legislation to establish the Social Security 
Administration as an independent agency. 
(d) The Panel shall submit to the Committee on Ways and Means 
of the House of Representatives and the Committee on Finance of 
the Senate, not later than April 1, 1984, a report of the findings of 
the study conducted under subsection (c), together with any recom-
mendations the Panel considers appropriate. The Panel and all 
authority granted in this section shall expire thirty days after the 
date of the submission of its report under this section. 
Matters to 
be analyzed. 
Report to 
congressional 
committees. 
Expiration date. 
LIMITATION ON PAYMENTS TO PRISONERS 
SEC. 339. (a) Section 202 of the Social Security Act is amended by 
adding at the end thereof the following new subsection: 
"(x)(l) Notwithstanding any other provision of this title, no 
monthly benefits shall be paid under this section or under section 
223 to any individual for any month during which such individual is 
confined in a jail, prison, or other penal institution or correctional 
facility, pursuant to his conviction of an offense which constituted a 
felony under applicable law, unless such individual is actively and 
satisfactorily participating in a rehabilitation program which has 
been specifically approved for such individual by a court of law and, 
as determined by the Secretary, is expected to result in such individ-
ual being able to engage in substantial gainful activity upon release 
and within a reasonable time. 
"(2) Benefits which would be payable to any individual (other than 
a confined individual to whom benefits are not payable by reason of 
paragraph (1)) under this title on the basis of the wages and self-
employment income of such a confined individual but for the provi-
sions of paragraph (1), shall be payable as though such confined 
individual were receiving such benefits under this section or section 
223. 
"(3) Notwithstanding the provisions of section 552a of title 5, 
United States Code, or any other provision of Federal or State law, 
any agency of the United States Government or of any State (or 
political subdivision thereof) shall make available to the Secretary, 
upon written request, the name and social security account number 
of any individual who is confined in a jail, prison, or other penal 
42 u s e 402. 
42 u s e 423. 
97 STAT. 134 
PUBLIC LAW 98-21—APR. 20, 1983 
institution or correctional facility under the jurisdiction of such 
agency, pursuant to his conviction of an offense which constituted a 
felony under applicable law, which the Secretary may require to 
carry out the provisions of this subsection.". 
42 use 423. 
(b) Section 228 of such Act is amended by striking out sub-
section (f). 
Effective date. 
(c) The amendments made by subsections (a) and (b) shall apply 
42 use 402 note, ^i^jji respect to monthly benefits payable for months beginning on or 
after the date of enactment of this Act. 
REQUIREMENT OF PREVIOUS UNITED STATES RESIDENCY FOR ALIEN 
DEPENDENTS AND SURVIVORS LIVING OUTSIDE THE UNITED STATES 
42 use 402. 
SEC. 340. (a) Section 202(t) of the Social Security Act is amended— 
(1) in the heading, by adding after "United States" the follow-
ing: "; Residency Requirements for Dependents and Survivors"; 
and 
(2) by adding at the end thereof the following new paragraph: 
"(11)(A) Paragraph (2) and subparagraphs (A), (B), (C), and (E) of 
paragraph (4) shall apply with respect to an individual's monthly 
benefits under subsection 0?), (c), (d), (e), (f), (g), or (h) only if such 
individual meets the residency requirements of this paragraph with 
respect to those benefits. 
"(B) An individual entitled to benefits under subsection (b), (c), (e), 
(f), or (g) meets the residency requirements of this paragraph with 
respect to those benefits only if such individual has resided in the 
United States, and while so residing bore a spousal relationship to 
the person on whose wages and self-employment income such enti-
tlement is based, for a total period of not less than 5 years. For 
purposes of this subparagraph, a period of time for which an individ-
ual bears a spousal relationship to another person consists of a 
period throughout which the individual has been, with respect to 
such other person, a wife, a husband, a widow, a widower, a divorced 
wife, a divorced husband, a surviving divorced wife, a surviving 
divorced husband, a surviving divorced mother, a surviving divorced 
father, or (as applicable in the course of such period) any two or 
more of the foregoing. 
"(C) An individual entitled to benefits under subsection (d) meets 
the residency requirements of this paragraph with respect to those 
benefits only i
f
— 
"(i)(I) such individual has resided in the United States (as the 
child of the person on whose wages and self-employment income 
such entitlement is based) for a total period of not less than 5 
years, or 
"(II) the person on whose wages and self-employment income 
such entitlement is based, and the individual's other parent 
(within the meaning of subsection (h)(3)), if any, have each 
resided in the United States for a total period of not less than 5 
years (or died while residing in the United States), and 
"(ii) in the case of an individual entitled to such benefits as an 
adopted child, such individual was adopted within the United 
States by the person on whose wages and self-employment 
income such entitlement is based, and has lived in the United 
States with such person and received at least one-half of his or 
her support from such person for a period (beginning before 
such individual attained age 18) consisting o
f
— 
PUBLIC LAW 98-21—APR. 20, 1983 
97 STAT. 135 
"(I) the year immediately before the month in which such 
person became eligible for old-age insurance benefits or 
disability insurance benefits or died, whichever occurred 
first, or 
"(II) if such person had a period of disability which 
continued until he or she became entitled to old-age insur-
ance benefits or disability insurance benefits or died, the 
year immediately before the month in which such period of 
disability began. 
"(D) An individual entitled to benefits under subsection (h) meets 
the residency requirements of this paragraph with respect to those 
benefits only if such individual has resided in the United States, and 
while so residing was a parent (within the meaning of subsection 
(hX3)) of the person on whose wages and self-employment income 
such entitlement is based, for a total period of not less than 5 years. 
"(E) This paragraph shall not apply with respect to any individual 
who is a citizen or resident of a foreign country with which the 
United States has an agreement in force concluded pursuant to 
section 233, except to the extent provided by such agreement.". 
(b) Paragraphs (2) and (4) of section 202(t) of such Act are each 
amended by striking out "Paragraph (1) shall not apply" and insert-
ing in lieu thereof "Subject to paragraph (11), paragraph (1) shall 
not apply". 
(c) The amendments made by this section shall apply with respect 
to any individual who initially becomes eligible for benefits under 
section 202 or 223 after December 31,1984. 
42 u s e 433. 
42 u s e 402. 
Effective date. 
42 u s e 402 note. 
ADDITION OF PUBLIC MEMBERS TO TRUST FUND BOARD OF TRUSTEES 
SEC. 341. (a) Section 201(c) of the Social Security Act is amended— 
Ante, p. 107. 
(1) in the first sentence, by striking out "Secretary of Health, 
Education, and Welfare, all ex officio" and inserting in lieu 
thereof "Secretary of Health and Human Services, all ex officio, 
and of two members of the public (both of whom may not be 
from the same political party), who shall be nominated by the 
President for a term of four years and subject to confirmation 
by the Senate"; and 
(2) by adding at the end thereof the following new sentence: 
"A person serving on the Board of Trustees shall not be consid-
ered to be a fiduciary and shall not be personally liable for 
actions taken in such capacity with respect to the Trust 
Funds.". 
(b) Section 1817(b) of such Act is amended— 
Ante, p. 107. 
(1) in the first sentence, by striking out "Secretary of Health, 
Education, and Welfare, all ex officio" and inserting in lieu 
thereof "Secretary of Health and Human Services, all ex officio, 
and of two members of the public (both of whom may not be 
from the same political party), who shall be nominated by the 
President for a term of four years and subject to confirmation 
by the Senate"; and 
(2) by adding at the end thereof the following new sentence: 
"A person serving on the Board of Trustees shall not be consid-
ered to be a fiduciary and shall not be personally liable for 
actions taken in such capacity with respect to the Trust Fund.". 
(c) Section 18410t>) of such Act is amended— 
Ante, p. 107. 
(1) in the first sentence, by striking out "Secretary of Health, 
Education, and Welfare, all ex officio" and inserting in lieu 
97 STAT. 136 
PUBLIC LAW 98-21—APR. 20, 1983 
thereof "Secretary of Health and Human Services, all ex officio, 
and of two members of the public (both of whom may not be 
from the same political party), who shall be nominated by the 
President for a term of four years and subject to confirmation 
by the Senate"; and 
(2) by adding at the end thereof the following new sentence: 
"A person serving on the Board of Trustees shall not be consid-
ered to be a fiduciary and shall not be personally liable for 
actions taken in such capacity with respect to the Trust Fund.". 
Effective date. 
(d) The amendments made by this section shall become effective 
42 use 401 note, on the date of enactment of this Act. 
PAYMENT SCHEDULE BY STATE AND LOCAL GOVERNMENTS 
42 use 418. 
SEC. 342. (a) Section 218(e)(1)(A) of the Social Security Act is 
amended to read as follows: 
"(A) that the State will pay to the Secretary of the Treasury— 
"(i) on the last day of each calendar month, amounts 
equivalent to the sum of the taxes which would be imposed 
by sections 3101 and 3111 of the Internal Revenue Code of 
26 use 3101, 
1954 with respect to the period which includes the first 
^^^^ 
fifteen days of such calendar month if the services for 
which wages were paid in such period to employees covered 
by the agreement constituted employment as defined in 
26 use 3121. 
section 3121 of such Code, and 
"(ii) on the fifteenth day of the calendar month following 
such calendar month, amounts equivalent to the sum of the 
taxes Which would be imposed by sections 3101 and 3111 of 
such Code with respect to the period beginning with the 
sixteenth day of such calendar month and ending with the 
last day of such calendar month if the services for which 
wages were paid in such period to employees covered by the 
agreement constituted employment as defined in section 
3121 ofsuch Code; and". 
Effective date. 
(b) The amendments made by this section shall apply to calendar 
42 use 418 note, months beginning after December 31,1983. 
EARNINGS SHARING IMPLEMENTATION REPORT 
42 use 902 note. 
SEC. 343. (a) The Secretary of Health and Human Services (herein-
after in this section referred to as the "Secretary") shall develop, in 
consultation with the Committee on Finance of the Senate and the 
Committee on Ways and Means of the House of Representatives, 
proposals for earnings sharing legislation as described in subsection 
(b). The Secretary shall report such proposals to such committees 
not later than July 1, 1984. The report and proposals provided to 
such committees shall— 
(1) take into account, discuss, and analyze the impact of 
earnings sharing on various categories of social security 
beneficiaries and include recommendations for the implementa-
tion of earnings sharing which may be necessary to provide 
adequate protection for particular classes of beneficiaries; 
(2) include specific recommendations with respect to an appro-
priate and feasible time period or time periods for implementa-
tion of such proposals along with recommendations for any 
transition provisions which may be necessary or appropriate; 
and 
PUBLIC LAW 98-21—APR. 20, 1983 
97 STAT. 137 
(3) provide cost-impact analyses on each proposal presented. 
(b) For the purposes of subsection (a), the term "earnings sharing" 
refers to proposals that the combined earnings of a husband and 
wife during the period of their marriage shall be divided equally and 
shared between them for social security benefit purposes. 
(c) In preparing the report and proposals required in subsection 
(a), the Secretary shall include consideration and analysis of the 
earnings sharing proposals contained in (1) S. 3, 98th Congress, 1st 
Session, (2) H.R. 1513, 97th Congress, 1st Session, and (3) the earn-
ings sharing option described in the report entitled "Social Security 
and the Changing Roles of Men and Women", submitted to the 
Congress pursuant to Public Law 95-216, the Social Security 
Amendments of 1977. 
(d) In carrying out subsections (a), Ob), and (c), the Secretary shall 
consult with the Director of the Congressional Budget Office. Not 
later than 30 days after the Secretary submits the report required in 
subsection (a), the Director of the Congressional Budget Office shall 
submit a report to the committees identified in such subsection on 
the methodologies, recommendations, and analyses used in the Sec-
retary's report. 
42 u s e 1305 
note. 
VETERANS ADMINISTRATION REORGANIZATION 
SEC. 344. The requirements of section 210(bX2)(A) of title 38, 
United States Code, shall not apply to the planned administrative 
reorganization at the Veterans' Administration Los Angeles Data 
Processing Center involving the transfer of 25 full-time equivalent 
employees from the Office of Data Management and Technology to 
the Department of Medicine and Surgery of the Veterans' Adminis-
tration. 
SOCIAL SECURITY CARDS 
SEC. 345. (a) Section 205(cX2) of the Social Security Act is amended 42 use 405. 
by adding at the end thereof the following new subparagraph: 
"(D) The Secretary shall issue a social security card to each 
individual at the time of the issuance of a social security account 
number to such individual. The social security card shall ble made of 
banknote paper, and (to the maximum extent practicable) shall be a 
card which cannot be counterfeited.". 
O
b
) The amendment made by this section shall apply with respect Effective date. 
to all new and replacement social security cards issued more than 42 use 405 note. 
193 days after the date of the enactment of this Act. 
(c) Within 90 days after the date of the enactment of this Act the Report to 
Secretary of Health and Human Services shall report to the Con- Congress. 
gress on his plans for implementing the amendment made by this 
section. 
BUDGETARY TREATMENT OF TRUST FUND OPERATIONS 
SEC. 346. (aXD Title VII of the Social Security Act (as amended by 
section 143 of this Act) is further amended by adding at the end Ante, p. 102. 
thereof the following new section: 
BUDGETARY TREATMENT OF TRUST FUND OPERATIONS 
"SEC. 710. The disbursements of the Federal Old-Age and Survi- 42USC9ii. 
vors Insurance Trust Fund, the Federal Disability Insurance Trust 
97 STAT. 138 
PUBLIC LAW 98-21—APR. 20, 1983 
26 u s e 1401, 
3101, 3111. 
Effective date. 
42 u s e 911 note. 
Ante, p. 137. 
Fund, the Federal Hospital Insurance Trust Fund, and the Federal 
Supplementary Medical Insurance Trust Fund shall be treated as a 
separate major functional category in the budget of the United 
States Grovernment as submitted by the President and in the con-
gressional budget, and the receipts of such Trust Funds, including 
the taxes imposed under sections 1401, 3101, and 3111 of the Inter-
nal Revenue Code of 1954, shall be set forth separately in such 
budgets.". 
(2) The amendment made by paragraph (1) shall apply with 
respect to fiscal years beginning on or after October 1, 1984, and 
ending on or before September 30, 1992, except that such amend-
ment shall apply with respect to the fiscal year beginning on 
October 1, 1983, to the extent it relates to the congressional budget. 
(b) Effective for fiscal years beginning on or after October 1, 1992, 
section 710 of such Act (as added by subsection (a) of this section) is 
amended to read as follows: 
26 
use 
1401, 
3101, 
3111. 
42 u s e 403. 
42 u s e 416. 
Effective date. 
42 u s e 403 note. 
BUDGETARY TREATMENT OP TRUST FUND OPERATIONS 
"SEC. 710. (a) The receipts and disbursements of the Federal Old-
Age and Survivors Insurance Trust Fund, the Federal Disability 
Insurance Trust Fund, and the Federal Hospital Insurance Trust 
Fund and the taxes imposed under sections 1401, 3101, and 3111 of 
the Internal Revenue Code of 1954 shall not be included in the totals 
of the budget of the United States Government as submitted by the 
President or of the congressional budget and shall be exempt from 
any general budget limitation imposed by statute on expenditures 
and net lending (budget outlays) of the United States Government. 
"(b) The disbursements of the Federal Supplementary Medical 
Insurance Trust Fund shall be treated as a separate major func-
tional category in the budget of the United States Government as 
submitted by the President and in the congressional budget, and the 
receipts of such Trust Fund shall be set forth separately in such 
budgets.". 
LIBERALIZATION OF EARNINGS TEST 
SEC. 347. (a) Section 203(f)(3) of the Social Security Act is amended 
by striking out "50 per centum of his earnings for such year in 
excess of the product of the applicable exempt amount as deter-
mined under paragraph (8)" and inserting in lieu thereof the follow-
ing: "33 V
a percent of his earnings for such year in excess of the 
product of the applicable exempt amount as determined under 
paragraph (8) in the case of an individual who has attained retire-
ment age (as defined in section 216(1)) before the close of such 
taxable year, or 50 percent of his earnings for such year in excess of 
such product in the case of any other individual". 
(b) The amendment made by subsection (a) shall apply only with 
respect to taxable years beginning after December 1989, and only in 
the case of individuals who have attained retirement age (as defined 
in section 216(1) of the Social Security Act). 
TITLE IV—SUPPLEMENTAL SECURITY INCOME BENEFITS 
I N C R E A S E IN F E D E R A L SSI BENEFIT STANDARD 
42 use I382f. 
SEC. 401. (a)(1) Section 1617 of the Social Security Act is amended 
by adding at the end thereof the following new subsection: 
PUBLIC LAW 98-21—APR. 20, 1983 
97 STAT. 139 
"(c) Effective July 1,1983— 
"(1) each of the dollar amounts in effect under subsections 
(a)(1)(A) and (b)(1) of section 1611, as previously increased under 
42 use 1382. 
this section, shall be increased by $240 (and the dollar amount 
in effect under subsection (a)(1)(A) of section 211 of Public Law 
93-66, as previously so increased, shall be increased by $120); 87 Stat. 154. 
and 
"(2) each of the dollar amounts in effect under subsections 
(a)(2)(A) and (b)(2) of section 1611, as previously increased under 
this section, shall be increased by $360.". 
(2) Section 1617(b) of such Act is amended by striking out "this 
4
2 use I382f. 
section" and inserting in lieu thereof "subsection (a) of this section". 
(b) Section 1617(a)(2) of such Act is amended by inserting ", or, if 
greater (in any case where the increase under title II was deter- 42 use 401. 
mined on the basis of the wage increase percentage rather than the 
CPI increase percentage), the percentage by which benefit amounts 
under title II would be increased for such month if the increase had 
been determined on the basis of the CPI increase percentage," after 
"are increased for such month". 
ADJUSTMENTS IN FEDERAL SSI PASS-THROUGH PROVISIONS 
SEC. 402. Section 1618 of the Social Security Act is amended by 96 Stat. 1917. 
redesignating the subsection (c) which was added by Public Law 97- 42 use I382g. 
377 as subsection (d), and by adding at the end thereof the following 
new subsection: 
"(e)(1) For any particular month after March 1983, a State which 
is not treated as meeting the requirements imposed by paragraph (4) 
of subsection (a) by reason of subsection OJ) shall be treated as 
meeting such requirements if and only if^ 
"(A) the combined level of its supplementary payments (to 
recipients of the type involved) and the amounts payable (to or 
on behalf of such recipients) under section 1611(b) of this Act 4
2 use 1382. 
and section 211(a)(lXA) of Public Law 93-66, for that particular 8
7 Stat. 154. 
month, 
is not less than— 
"(B) the combined level of its supplementary payments (to 
recipients of the type involved) and the amounts payable (to or 
on behalf of such recipients) under section 1611(b) of this Act 
and section 211(aXlXA) of Public Law 93-66, for March 1983, 
increased by the amount of all cost-of-living adjustments under 
section 1617 (and any other benefit increases under this title) 42 use I382f. 
which have occurred after March 1983 and before that particu-
lar month. 
"(2) In determining the amount of any increase in the combined 
level involved under paragraph (IXB) of this subsection, any portion 
of such amount which would otherwise be attributable to the in-
crease under section 1617(c) shall be deemed instead to be equal to 
the amount of the cost-of-living adjustment which would have oc-
curred in July 1983 (without regard to the 3-percent limitation 
contained in section 215(iXlXB)) if section 111 of the Social Security 42 use 415. 
Amendments of 1983 had not been enacted.". 
^"*«' P '^2. 
97 STAT. 140 
PUBLIC LAW 98-21—APR. 20, 1983 
SSI ELIGIBILITY FOR TEMPORARY RESIDENTS OF EMERGENCY SHELTERS 
FOR THE HOMELESS 
4
2 use 1382. 
SEC. 403. (a) Section 1611(e)(1) of the Social Security Act is 
amended— 
(1) by striking out "subparagraph (B) and (C)" in subpara-
graph (A) and inserting in lieu thereof "subparagraphs (B), (C), 
and (D)"; and 
(2) by adding at the end thereof the following new subpara-
graph: 
"(D) A person may be an eligible individual or eligible spouse for 
purposes of this title with respect to any month throughout which 
he is a resident of a public emergency shelter for the homeless (as 
defined in regulations which shall be prescribed by the Secretary); 
except that no person shall be an eligible individual or eligible 
spouse by reason of this subparagraph more than three months in 
any 12-month period.". 
(b) The amendments made by subsection (a) shall be effective with 
respect to months after the month in which this Act is enacted. 
DISREGARDING OF EMERGENCY AND OTHER IN-KIND ASSISTANCE 
PROVIDED BY NONPROFIT ORGANIZATIONS 
SEC. 404. (a) Section 1612(b)(13) of the Social Security Act is 
amended by striking out "any assistance received" and all that 
follows down through "(B)" and inserting in lieu thereof the follow-
ing: "any support or maintenance assistance furnished to or on 
behalf of such individual (and spouse if any) which (as determined 
under regulations of the Secretary by such State agency as the chief 
executive officer of the State may designate) is based on need for 
such support or maintenance, including assistance received to assist 
in meeting the costs of home energy (including both heating and 
cooling), and which". 
42 use 602. 
(b) Section 402(a)(36) of such Act is amended by striking out "shall 
not include as income" and all that follows down through "(B)" and 
inserting in lieu thereof the following: "shall not include as income 
any support or maintenance assistance furnished to or on behalf of 
the family which (as determined under regulations of the Secretary 
by such State agency as the chief executive officer of the State may 
designate) is based on need for such support and maintenance, 
including assistance received to assist in meeting the costs of home 
energy (including both heating and cooling), and which". 
Effective date. 
(c) The amendments made by this section shall be effective with 
42 use 602 note, respoct to months which begin after the month in which this Act is 
enacted and end before October 1,1984. 
Effective date. 
42 u s e 1382 
note. 
42 u s e 1382a. 
42 u s e 1382 
note. 
42 u s e 401. 
42 u s e 1381. 
NOTIFICATION REGARDING SSI 
SEC. 405. Prior to July 1, 1984, the Secretary of Health and 
Human Services shall notify all elderly recipients of benefits under 
title II of the Social Security Act who may be eligible for supplemen-
tal security income benefits under title XVI of such Act of the 
availability of the supplemental security income program, and shall 
encourage such recipients to contact the Social Security district 
office. Such notification shall also be made to all recipients prior to 
attainment of age 65, with the notification made with respect to 
eligibility for supplementary medical insurance. 
PUBLIC LAW 98-21—APR. 20, 1983 
97 STAT. 141 
TITLE V-UNEMPLOYMENT COMPENSATION PROVISIONS 
PART A—FEDERAL SUPPLEMENTAL COMPENSATION 
EXTENSION OF PROGRAM 
SEC. 501. (a) Paragraph (2) of section 602(f) of the Federal Supple-
mental Compensation Act of 1982 is amended by striking out 96Stat. 702. 
"March 31, 1983" and inserting in lieu thereof "September 30, 2
6 use 3304 
1Q8T' 
note. 
(b) Section 605(2) of such Act is amended by striking out "April 1, 9
6 stat. 705. 
1983" and insertmg in lieu thereof "October 1,1983". 
26^sc 3304 
NUMBER OF WEEKS FOR WHICH COMPENSATION PAYABLE 
SEC. 502. (a) Subsection (e) of section 602 of the Federal Supple-
mental Compensation Act of 1982 is amended by redesignating 9
6 stat. 702. 
paragraph (3) as paragraph (4) and by striking out paragraph (2) and 26 use 3304 
inserting in lieu thereof the following new paragraphs: 
"°*^ 
'X2)(A) In the case of any account from which Federal supplemen-
tal compensation was first payable to an individual for a week 
beginning after March 31, 1983, the amount established in such 
account shall be equal to the lesser o
f
— 
"(i) 55 per centum of the total amount of regular compensa-
tion (including dependents' allowances) payable to the individ-
ual with respect to the benefit year (as determined under the 
State law) on the basis of which he most recently received 
regular compensation, or 
"(ii) the applicable limit determined under the following table 
times his average weekly benefit amount for his benefit year: 
"In the case of 
The applicable 
weeks during a: 
limit is: 
6-percent period 
14 
5-percent period 
12 
4-percent period 
10 
Low-unemployment period 
8 
"(B) In the case of any State whose applicable limit, as determined 
under clause (ii) of subparagraph (A) for the first week beginning 
after March 27,1983, and after the date of the enactment of part A 
of title V of the Social Security Amendments of 1983, would be more Supra. 
than 4 weeks lower than the number of weeks applicable to such 
State under this paragraph as in effect for the week beginning 
March 27,1983, the applicable limit for such State for that week and 
any succeeding week shall not be lower than 4 less than the number 
so applicable to such State for the week beginning March 27, 1983. 
"(C) In the case of any account from which Federal supplemental 
compensation was payable to an individual for a week beginning 
before April 1,1983, the amount established in such account shall be 
equal to the lesser of the subparagraph (A) entitlement or the sum 
of-
"(i) the subparagraph (A) entitlement reduced (but not below 
zero) by the aggregate amount of Federal supplemental compen-
sation paid to such individual for weeks beginning before April 
1,1983, plus 
"(ii) such individual's additional entitlement. 
"(D) For purposes of subparagraph (C) and this subparagraph— 
97 STAT. 142 
PUBLIC LAW 98-21—APR. 20, 1983 
Definitions. 
Definitions. 
26 use 3304 
note. 
26 use 3304 
note. 
96 Stat. 702. 
26 use 3304 
note. 
"(i) The term 'subparagraph (A) entitlement' means the 
amount which would have been established in the account if 
subparagraph (A) had applied to such account. 
"(ii) The term 'additional entitlement' means the lesser o
f
— 
"(I) three-fourths of the subparagraph (A) entitlement, or 
"(II) the applicable limit determined under the following 
table times the individual's average weekly benefit amount 
for his benefit year: 
"In the case of 
The applicable 
weeks during a: 
limit is: 
6-percent period 
10 
5-percent period 
8 
4-percent period 
8 
Low-employment period 
6 
"(E) Except as provided in subparagraph (C)(i), for purposes of 
determining the amount of Federal supplemental compensation 
payable for weeks beginning after March 31, 1983, from an account 
described in subparagraph (C), no reduction in such account shall be 
made by reason of any Federal supplemental compensation paid to 
the individual for weeks beginning before April 1,1983. 
"(3)(A) For purposes of this subsection, the terms '6-percent 
period', '5-percent period', '4 percent period', and 'low-unemploy-
ment period' mean, with respect to any State, the period which— 
"(i) begins with the 3d week after the 1st week in which the 
rate of insured unemployment in the State for the period 
consisting of such week and the immediately preceding 12 
weeks falls in the applicable range, and 
"(ii) ends with the 3d week after the 1st week in which the 
rate of insured unemployment for the period consisting of such 
week and the immediately preceding 12 weeks does not fall 
within the applicable range. 
"(B) For purposes of subparagraph (A), the applicable range is as 
follows: 
"In the case of a: 
The applicable range is: 
6-percent period 
A rate equal to or exceeding 6 percent. 
5-percent period 
A rate equal to or exceeding 5 percent 
but less than 6 percent. 
4-percent period 
A rate equal to or exceeding 4 percent 
but less than 5 percent. 
Low-employment period 
A rate less than 4 percent. 
"(C) No 6-percent period, 5-percent period, or 4-percent period, as the 
case may be, shall last for a period of less than 4 weeks unless the State 
enters a period with a higher percentage designation. 
"(D) For purposes of this subsection— 
"(i) The rate of insured unemployment for any period shall be 
determined in the same manner as determined for purposes of 
section 203 of the Federal-State Extended Unemployment Com-
pensation Act of 1970. 
"(ii) The amount of an individual's average weekly benefit 
amount shall be determined in the same manner as determined 
for purposes of section 202(b)(1)(C) of such Act." 
(b)(1) Section 602(f)(2) of such Act is amended by inserting before 
the period at the end thereof the following: "; except that in the case 
of any individual who received such compensation for the week 
preceding the last week beginning after such date, such compensa-
tion shall be payable to such individual for weeks beginning after 
PUBLIC LAW 98-21—APR. 20, 1983 
97 STAT. 143 
such date, but the total amount of such compensation payable for 
such weeks shall be limited to 50 percent of the total amount which 
would otherwise be payable for such weeks". 
(2) Section 605(2) of such Act is amended by inserting before the 
96 Stat. 705. 
semicolon the following: "(except as otherwise provided in section 
26 use 3304 
602(f)(2))". 
'^°^-
(c) Paragraph (3) of section 602(d) of the Federal Supplemental 
96 Stat. 702. 
Compensation Act of 1982 is amended to read as follows: 
note^^^ ^^^^ 
"(3) the maximum amount of Federal supplemental compen-
sation payable to any individual for whom an account is estab-
lished under subsection (e) shall not exceed the lesser of (A) the 
amount established in such account for such individual, or (B) in 
the case of an individual filing a claim under the interstate 
benefit payment plan for Federal supplemental compensation, 
the amount which would have been established in such account 
if the amount established in such account were determined by 
reference to the applicable limit under subparagraph (A)(ii) or 
(D)(ii) of subsection (eX2) applicable in the State in which the 
individual is filing such interstate claim under the interstate 
benefit payment plan for the week in which he is filing such 
claim." 
EFFECTIVE DATE 
SEC. 503. (a) The amendments made by this part shall apply to 26 use 3304 
weeks beginning after March 31,1983. 
^°^-
(b) In the case of any eligible individual— 
(1) to whom any Federal supplemental compensation was 
payable for any week beginning before April 1,1983, and 
(2) who exhausted his rights to such compensation (by reason 
of the payment of all the amount in his Federal supplemental 
compensation account) before the first week beginning after 
March 31,1983, 
such individual's eligibility for additional weeks of compensation by 
reason of the amendments made by this part shall not be limited or 
terminated by reason of any event, or failure to meet any require-
ment of law relating to eligibility for unemployment compensation, 
occurring after the date of such exhaustion of rights and before 
April 1, 1983 (and the period after such exhaustion and before 
April 1, 1983, shall not be counted for purposes of determining the 
expiration of the two years following the end of his benefit year for 
purposes of section 602(b) of the Federal Supplemental Compensa-
tion Act of 1982). 
96 Stat. 702. 
(c) The Secretary of Labor shall, at the earliest practicable date 
26 use 3304 
after the date of the enactment of this Act, propose to each State g°*^ 
with which he has in effect an agreement under section 602 of the 
modifications. 
Federal Supplemental Compensation Act of 1982 a modification of 
such agreement designed to provide for the payment of Federal 
supplemental compensation under such Act in accordance with the 
amendments made by this part. Notwithstanding any other provi-
sion of law, if any State fails or refuses, within the 3-week period 
beginning on the date the Secretary of Labor proposed such a 
modification to such State, to enter into such a modification of such 
agreement, the Secretary of Labor shall terminate such agreement 
effective with the end of the last week which ends on or before such 
3-week period. 
97 STAT. 144 
PUBLIC LAW 98-21—APR. 20, 1983 
TRAINING 
96 Stat. 702. 
SEC. 504. Section 602 of the Federal Supplemental Compensation 
26 use 3304 
Act of 1982 is amended by adding at the end thereof the following 
"° 
new subsection: 
"(g) The payment of Federal supplemental compensation shall not 
be denied to any recipient (who submits documentation prescribed 
by the Secretary) for any week because the recipient is in training or 
attending an accredited educational institution on a substantially 
full-time basis, or because of the application of State law to any such 
recipient relating to the availability for work, the active search for 
work, or the refusal to accept work on account of such training or 
attendance, unless the State agency determines that such training 
or attendance will not improve the opportunities for employment of 
the recipient.". 
COORDINATION WITH 
TRADE 
READJUSTMENT PROGRAM 
SEC. 505. Subsection (e) of section 602 of the Federal Supplemental 
96 Stat. 702. 
Compensation Act of 1982 is amended by adding at the end thereof 
26 use 3304 
the following new paragraph: 
"°*®- 
"(5)(A) Except as provided in subparagraph (B), the maximum 
amount of Federal supplemental compensation payable to an indi-
vidual shall not be reduced by reason of any trade readjustment 
allowance to which the individual was entitled under the Trade Act 
19 use 2101. 
of 1974. 
"(B) If an individual received any trade readjustment allowance 
under the Trade Act of 1974 in respect of any benefit year, the 
maximum amount of Federal supplemental compensation payable 
under this subtitle in respect of such benefit year shall be reduced 
(but not below zero) so that (to the extent possible by making such a 
reduction) the aggregate amount o
f
— 
"(i) regular compensation, 
"(ii) extended compensation, 
"(iii) trade readjustment allowances, and 
"(iv) Federal supplemental compensation, 
payable in respect of such benefit year does not exceed the aggregate 
amount which would have been so payable had the individual not 
been entitled to any trade readjustment allowance." 
PART B—PROVISIONS RELATING TO INTEREST AND CREDIT 
REDUCTIONS 
DEFERRAL OF INTEREST 
42 use 1322. 
SEC. 511. (a) Section 1202(b) of the Social Security Act is amended 
by adding at the end thereof the following new paragraphs: 
"(8)(A) With respect to interest due under this section on Septem-
ber 30 of 1983,1984, or 1985 (other than interest previously deferred 
under paragraph (3XC)), a State may pay 80 percent of such interest 
in four annual installments of at least 20 percent beginning with the 
year after the year in which it is otherwise due, if such State meets 
the criteria of subparagraph (B). No interest shall accrue on such 
deferred interest. 
"(B) To meet the criteria of this subparagraph a State must— 
"(i) have taken no action since October 1, 1982, which would 
reduce its net unemployment tax effort or the net solvency of its 
PUBLIC LAW 98-21—APR. 20, 1983 
97 STAT, 145 
unemployment system (as determined for purposes of section 
3302(0 of the Internal Revenue Ck)de of 1954); and 
26 use 3302. 
"(iiXD have taken an action (as certified by the Secretary of 
Labor) after March 31, 1982, which would have increased reve-
nue liabilities and decreased benefits under the State's unem-
ployment compensation system (hereinafter referred to as a 
'solvency effort') by a combined total of the applicable percent-
age (as compared to such revenues and benefits as would have 
been in effect without such State action) for the calendar year 
for which the deferral is requested; or 
"(II) have had, for taxable year 1982, an average unemploy-
ment tax rate which was equal to or greater than 2.0 percent of 
the total of the wages (as determined without any limitation on 
amount) attributable to such State subject to contribution under 
the State unemployment compensation law with respect to such 
taxable year. 
In the case of the first year for which there is a deferral (over a 4-
year period) of the interest otherwise payable for such year, the 
applicable percentage shall be 25 percent. In the case of the second 
such year, the applicable percentage shall be 35 percent. In the case 
of the third such year, the applicable percent^e shall be 50 percent. 
"(CXi) The base year is the first year for which deferral under this 
provision is requested and subsequently granted. The Secretary of 
Labor shall estimate the unemployment rate for the base year. To 
determine whether a State meets the requirements of subparagraph 
(BXii)(I), the Secretary of Labor shall determine the percentage by 
which the benefits and taxes in the base year with the application of 
the action referred to in subparagraph (BXiiXD are lower or greater, 
as the case may be, than such benefits* and taxes would have been 
without the application of such action. In making this determina-
tion, the Secretary shall deem the application of the action referred 
to in subparagraph (BXiiXD to have been effective for the base year 
to the same extent as such action is effective for the year following 
the year for which the deferral is sought. Once a deferral is ap-
proved under clause (iiXD of subparagraph (B) a State must continue 
to maintain its solvency effort. Failure to do so shall result in the 
State being required to make immediate payment of all deferred 
interest. 
"(ii) Increases in the taxable wage base from $6,000 to $7,000 or 
increases after 1984 in the maximum tax rate to 5.4 percent shall 
not be counted for purposes of meeting the requirement of subpara-
graph (B). 
"(D) In the case of a State which produces a solvency effort of 50 
percent, 80 percent, and 90 percent rather than the 25 percent, 35 
percent, and 50 percent required under subparagraph (B), the inter-
est shall be computed at an interest rate which is 1 percentage point 
less than the otherwise applicable interest rate. 
"(9) Any interest otherwise due from a State on September 30 of a 
calendar year after 1982 may be deferred (and no interest shall 
accrue on such deferred interest) for a grace period of not to exceed 
9 months if, for the most recent 12-month period for which data are 
available before the date such interest is otherwise due, the State 
had an average total unemployment rate of 13.5 percent or greater." 
(b) Section 1202(bX7) of such Act is amended by striking out ", and 42 use 1322. 
before January 1,1988". 
97 STAT. 146 
PUBLIC LAW 98-21—APR. 20, 1983 
42 use 1322. 
(c) Section 1202(b)(3)(C)(i) of the Social Security Act is amended by 
striking the matter that follows clause (II) and inserting "No inter-
est shall accrue on such deferred interest." 
CAP ON CREDIT REDUCTION 
SEC. 512. (a)(1) Section 3302(f) of the Internal Revenue Code of 
26 use 3302. 
1954 is amended by adding at the end thereof the following new 
paragraph: 
"(8) PARTIAL LIMITATION.— 
"(A) In the case of a State which would meet the require-
ments of this subsection for a taxable year prior to 1987 but 
for its failure to meet one of the requirements contained in 
subparagraph (C) or (D) of paragraph (2), the reduction 
under subsection (c)(2) in credits otherwise applicable to 
taxpayers in such State for such taxable year and each 
subsequent year (in a period of consecutive years for each of 
which a credit reduction is in effect for taxpayers in such 
State) shall be reduced by 0.1 percentage point. 
"(B) In the case of a State which does not meet the 
requirements of paragraph (2) but meets the requirements 
of subparagraphs (A) and (B) of paragraph (2) and which 
also meets the requirements of section 1202(b)(8)(B) of the 
Ante, p. 144. 
Social Security Act with respect to such taxable year, the 
reduction under subsection (c)(2) in credits otherwise appli-
cable to taxpayers in such State for such taxable year and 
each subsequent year (in a period of consecutive years for 
each of which a credit reduction is in effect for taxpayers in 
such State) shall be further reduced by an additional 0.1 
percentage point. 
"(C) In no case shall the application of subparagraphs (A) 
and (B) reduce the credit reduction otherwise applicable 
under subsection (c)(2) below the limitation under para-
graph (1)." 
Effective date. 
(2) The amendment made by paragraph (1) shall apply with 
nnfY 
respect to taxable year 1983 and taxable years thereafter. 
(b) Section 3302(f)(1) of such Code is amended by striking out 
"beginning before January 1,1988,". 
note. 
AVERAGE EMPLOYER CONTRIBUTION RATE 
26 use 3302. 
SEC. 513. (a) Section 3302(d)(4)(B) of the Internal Revenue Code of 
1954 is amended to read as follows: 
"(B)(i) for purposes of subparagraph (B) of subsection 
(c)(2), the total of the wages (as determined without any 
limitation on amount) attributable to such State subject to 
contributions under this chapter with respect to such calen-
dar year, and 
"(ii) for purposes of subparagraph (C) of subsection (c)(2), 
the total of the remuneration subject to contributions under 
the State unemployment compensation law with respect to 
such calendar year." 
O
t
>
) Section 3302(c)(2)(B)(i) of such Code is amended by striking out 
"2.7" and inserting in lieu thereof "2.7 multiplied by a fraction, the 
numerator of which is the wage base under this chapter and the 
denominator of which is the estimated United States average 
PUBLIC LAW 98-21—APR. 20, 1983 
97 STAT. 147 
annual wage in covered emplo5mient for the C£ilendar year in which 
the determination is to be made". 
(c) Section 3302(c)(2)(B) of such Code is amended by inserting after 
"(if any)" the following: ", multiplied by a fraction, the numerator of 
which is the State's average annual wage in covered employment for 
the calendar year in which the determination is made and the 
determination of which is the w^e base under this chapter,". 
(d) The amendments made by this section shall be effective for 
taxable year 1983 and taxable years thereafter. 
DATE FOR PAYMENT OF INTEREST 
26 u s e 3302. 
Effective date. 
26 u s e 3302 
note. 
SEC. 514. Section 1202(b)(3)(A) of the Social Security Act is 42 use 1322. 
amended by striking out "not later than" and inserting in lieu 
thereof "prior to". 
PENALTY FOR FAILURE TO PAY INTEREST 
SEC. 515. (a) Section 303(c) of the Social Security Act is amended 42 use 503. 
by striking out "or" at the end of paragraph (1), striking out the 
period at the end of paragraph (2) and inserting "; or", and adding at 
the end thereof the following new paragraph: 
"(3) that any interest required to be paid on advances under 
title XII of this Act has not been paid by the date on which such 
interest is required to be paid or has been paid directly or 
indirectly (by an equivalent reduction in State unemployment 
taxes or otherwise) by such State from amounts in such State's 
unemployment fund, until such interest is properly paid.", 
(b) Section 3304(a) of the Internal Revenue Code of 1954 (relating 26 use 3304. 
to certification of State unemployment compensation laws) is 
amended by redesignating paragraph (17) as paragraph (18) and by 
inserting after paragraph (16) the following new paragraph: 
"(17) any interest required to be paid on advances under title 
XII of the Social Security Act shall be paid in a timely manner 4
2 use i32i. 
and shall not be paid, directly or indirectly (by an equivalent 
reduction in State unemployment taxes or otherwise) by such 
State from amounts in such State's unemployment fund; and". 
PART C—MISCELLANEOUS PROVISIONS 
TREATMENT OF EMPLOYEES PROVIDING SERVICES TO EDUCATIONAL 
INSTITUTIONS 
SEC. 521. (a)(1) Section 3304(a)(6)(A) of the Internal Revenue Code 
of 1954 is amended by adding at the end thereof the following new 
clause: 
"(v) with respect to services to which section 3309(a)(1) 
applies, if such services are provided to or on behalf of an 
educational institution, compensation may be denied under the 
same circumstances as described in clauses (i) through (iv), 
and". 
(2) Clauses (iiXI), (iii), and (iv) of such section are each amended by 
striking out "may be denied" and inserting in lieu thereof "shall be 
denied'. 
Ot)Xl) Except as provided in paragraph (2), the amendments made 
by this section shall apply in the case of compensation paid for 
weeks beginning on or after April 1,1984. 
26 u s e 3304. 
Effective date. 
26 u s e 8304 
note. 
97 STAT. 148 
PUBLIC LAW 98-21—APR. 20, 1983 
'Session." 
(2) In the case of a State with respect to which the Secretary of 
Labor has determined that State legislation is required in order to 
comply with the amendment made by this section, the amendment 
made by this section shall apply in the case of compensation paid for 
weeks which begin on or after April 1,1984, and after the end of the 
first session of the State legislature which begins after the date of 
the enactment of this Act, or which began prior to the date of the 
enactment of this Act and remained in session for at least twenty-
five calendar days after such date of enactment. For purposes of the 
preceding sentence, the term "session" means a regular, special, 
budget, or other session of a State legislature. 
26 u s e 3304 
note. 
Effective date. 
26 u s e 3304 
note. 
26 u s e 3304. 
42 u s e 503. 
EXTENDED BENEFITS FOR INDIVDUALS WHO ARE HOSPITALIZED OR ON 
JURY DUTY 
SEC. 522. (a) Clause (ii) of paragraph (3)(A) of section 202(a) of the 
Federal-State Extended Unemployment Compensation Act of 1970 is 
amended to read as follows: 
"(ii) during which he fails to actively engeige in seeking work, 
unless such individual is not actively engaged in seeking work 
because such individual is, as determined in accordance with 
State law— 
"(I) before any court of the United States or any State 
pursuant to a lawfully issued summons to appear for jury 
duty {as such term may be defined by the Secretary of 
Labor), or 
"(II) hospitalized for treatment of an emergency or a life-
threatening condition (as such term may be defined by such 
Secretary), 
if such exemptions in clauses (I) and (II) apply to recipients of 
regular benefits, and the State chooses to apply such exemp-
tions for recipients of extended benefits.", 
(b) The amendment made by this section shall become effective on 
the date of the enactment of this Act. 
VOLUNTARY HEALTH INSURANCE PROGRAMS PERMITTED 
SEC. 523. (a) AMENDMENT OF INTERNAL REVENUE CODE OF 1954.— 
Paragraph (4) of section 3304(a) of the Internal Revenue Code of 1954 
(relating to requirements for approval of State unemployment com-
pensation laws) is amended by striking out "and" at the end of 
subparagr'aph (A), by adding "and" at the end of subparagraph 
(B), and by adding after subparagraph (B) the following new 
subparagraph: 
(C) nothing in this paragraph shall be construed to 
prohibit deducting an amount from unemplo5nnent compen-
sation otherwise payable to an individual and using the 
amount so deducted to pay for health insurance if the 
individual.elected to have such deduction made and such 
deduction was made under a program approved by the 
Secretary of Labor;". 
O
t
)
) AMENDMENT OF SOCIAL SECURITY ACT.—Paragraph (5) of 
section 303(a) of the Social Security Act is amended by striking out 
"; and" at the end thereof and inserting in lieu thereof "• Provided 
further, That nothing in this paragraph shall be construed to prohib-
it deducting an amount from unemployment compensation other-
wise payable to an individual and using the amount so deducted to 
PUBLIC LAW 98-21—APR. 20, 1983 
97 STAT. 149 
pay for health insurance if the individual elected to have such 
deduction made and such deduction was made under a program 
approved by the Secretary of Labor; and". 
(c) EFFECTIVE DATE.—The amendments made by this section shall 26 use 3304 
take effect on the date of the enactment of this Act. 
note. 
TREATMENT OF CERTAIN ORGANIZATIONS RETROACTIVELY DETERMINED 
TO BE DESCRIBED IN SECTION 501(C) (3) OF THE INTERNAL REVENUE 
CODE OF 1954 
26 u s e 3303 
note. 
26 u s e 3309. 
26 u s e 501. 
SEC 524. I
f
— 
(1) an organization did not make an election to make pay-
ments (in lieu of contributions) as provided in section 3309(a)(2) 
of the Internal Revenue C!ode of 1954 before April 1, 1972, 
because such organization, as of such date, was treated as an 
organization described in section 501(c)(4) of such Ck)de, 
(2) the Internal Revenue Service subsequently determined 
that such organization was described in section 501(cX3) of such 
Code, and 
(3) such organization made such an election before the earlier 
o
f
— 
(A) the date 18 months after such election was first 
available to it under the State law, or 
(B) January 1,1984, 
then section 3303(f) of such Code shall be applied with respect to 26 use 3303 
such organization as if it did not contain the requirement that the 
election be made before April 1, 1972, and by substituting "Jan-
uary 1,1982" for "January 1,1969". 
TITLE VI—PROSPECTIVE PAYMENTS FOR MEDICARE 
INPATIENT HOSPITAL SERVICES 
MEDICARE PAYMENTS FOR INPATIENT HOSPITAL SERVICES ON THE BASIS 
OF PROSPECTIVE RATES 
96 Stat. 331. 
42 u s e 1395WW. 
SEC 601. (aXD Subsection (aXD of section 1886 of the Social 
Security Act is amended by adding at the end the following new 
subparagraph: 
"(D) Subparagraph (A) shall not apply to cost reporting periods 
beginning on or after October 1,1983. . 
(2) Sul^ection (aX4) of such section is amended by adding at the 
end the following new sentence: "Such term does not include costs of 
approved educational activities, or, with respect to costs incurred in 
cost reporting periods beginning prior to October 1, 1986, capital-
related costs, as defined by the Secretary.". 
(3) It is the intent of Congress that, in considering the implemen-
tation of a system for including capit£il-related costs under a pro-
spectively determined payment rate for inpatient hospital services, 
costs related to capital projects for which expenditures are obligated 
on or after the effective date of the implementation of such a 
system, may or may not be distinguished and treated differently 
from costs of projects for which expenditures were obligated before 
such date. 
(b) Section 1886(b) of such Act is amended— 
(1) by striking out "Notwithstanding sections 1814(b), but 42usei395f. 
subject to the provisions of sections" in paragraph (1) and 
42 u s e 1395WW 
note. 
97 STAT. 150 
PUBLIC LAW 98-21—APR. 20, 1983 
26 u s e 3111. 
42 u s e 1395mm. 
42 use 1395CC. 
42 use 1395y. 
inserting in lieu thereof "Notwithstanding section 1814(b) but 
subject to the provisions of section"; 
(2) by inserting "(other than a subsection (d) hospital, as 
defined in subsection (d)(1)(B))" in the matter before subpara-
graph (A) of paragraph (1) after "of a hospital"; 
(3) by inserting, in the matter in paragraph (1) following 
subparagraph (B), "(other than on the basis of a DRG prospec-
tive payment rate determined under subsection (d))" after "pay-
able under this title"; 
(4) by repealing paragraph (2); 
(5) by inserting "and subsection (d) and except as provided in 
subsection (e)" in paragraph (3)(B) after "subparagraph (A)"; 
(6) by inserting "or fiscal year" after "cost reporting period" 
each place it appears in paragraph (3)(B); 
(7) by inserting "before the beginning of the period or year" in 
paragraph (3)(B) after "estimated by the Secretary"; 
(8) by striking out "exceeds" in paragraph (3)(B) and inserting 
in lieu thereof "will exceed"; and 
(9) by repealing paragraph (6), effective with respect to cost 
reporting periods beginning on or after October 1, 1982, and by 
inserting after paragraph (5), effective with respect to cost 
reporting periods beginning on or after October 1, 1983, the 
following new paragraph (6): 
"(6) In the case of any hospital which becomes subject to the taxes 
under section 3111 of the Internal Revenue Code of 1954, with 
respect to any or all of its employees, for part or all of a cost 
reporting period, and was not subject to such taxes with respect to 
any or all of its employees for all or part of the 12-month base cost 
reporting period referred to in subsection (b)(3)(A)(i), the Secretary 
shall provide for an adjustment by increasing the base period 
amount described in such subsection for such hospital by an amount 
equal to the amount of such taxes which would have been paid or 
accrued by such hospital for such base period if such hospital had 
been subject to such taxes for all of such base period with respect to 
all its employees, minus the amount of any such taxes actually paid 
or accrued for such base period.". 
(c)(1) Subsection (c)(1) of such section is amended— 
(A) by striking out "and" at the end of subparagraph (B), 
(B) by striking out the period at the end of subparagraph (C) 
and inserting in lieu thereof a semicolon, and 
(C) by adding at the end the following: 
"(D) the Secretary determines that the system will not pre-
clude an eligible organization (as defined in section 1876(b)) 
from negotiating directly with hospitals with respect to the 
organization's rate of payment for inpatient hospital services; 
and 
"(E) the Secretary determines that the system requires hospi-
tals to meet the requirement of section 1866(a)(1)(G) and the 
system provides for the exclusion of certain costs in accordance 
with section 1862(a)(14) (except for such waivers thereof as the 
Secretary provides by regulation). 
The Secretary cannot deny the application of a State under this 
subsection on the ground that the State's hospital reimbursement 
control system is based on a payment methodology other than on 
the bsisis of a diagnosis-related group or on the ground that the 
amount of payments made under this title under such system must 
be less than the amount of payments which would otherwise have 
PUBLIC LAW 98-21—APR. 20, 1983 
97 STAT. 151 
been made under this title not using such system. If the Secretary 
determines that the conditions described in subparagraph (C) are 
based on maintaining payment amounts at no more than a specified 
percentage increase above the payment amounts in a base period, 
the State has the option of applying such test (for inpatient hospital 
services under part A) on an aggregate payment basis or on the 
basis of the amount of payment per inpatient discharge or admis-
sion. If the Secretary determines that the conditions described in 
subparagraph (C) are based on maintaining aggregate payment 
amounts below a national average percentage increase in total 
payments under part A for inpatient hospital services, the Secretary 
cannot deny the application of a State under this subsection on the 
ground that the State's rate of increase in such payments for such 
services must be less than such national average rate of increase." 
(2) Subsection (c)(3) of such section is amended— 
(A) by striking out "requirement of paragraph (1)(A)" and 
inserting in lieu thereof "requirements of subparagraphs (A), 
(D), and (E) of paragraph (1) and, if applicable, the requirements 
of paragraph (5),", and 
(B) by inserting "(or, if applicable, in paragraph (5))" in 
subparagraph (B) after "paragraph (1)". 
(3) Subsection (c) of such section is further amended by adding at 
the end the following new paragraphs: 
"(4) The Secretary shall approve the request of a State under 
paragraph (1) with respect to a hospital reimbursement control 
system i
f
— 
"(A) the requirements of subparagraphs (A), (B), (C), and (D) of 
paragraph (1) have been met with respect to the system, and 
"(B) with respect to that system a waiver of certain require-
ments of title XVIII of the Social Security Act has been 
approved on or before (and which is in effect as of) the date of 
the enactment of the Social Security Amendments of 1983, 
pursuant to section 402(a) of the Social Security Amendments of 42 use I395b-i. 
1967 or section 222(a) of the Social Security Amendments of 
1972. 
With respect to a State system described in this paragraph, the 
Secretary shall judge the effectiveness of such system on the basis of 
its rate of increase or inflation in inpatient hospital payments for 
individuals under this title, as compared to the national rate of 
increase or inflation for such payments, with the State retaining the 
option to have the test applied on the basis of the aggregate pay-
ment or payments per inpatient admission or discharge during the 
three cost reporting periods beginning on or after October 1, 1983, 
after which such test, at the option of the Secretary, shall no longer 
apply, and such State systems shall be treated in the same manner 
as under other waivers. 
"(5) The Secretary shall approve the request of a State under 
paragraph (1) with respect to a hospital reimbursement control 
system i
f
— 
"(A) the requirements of subparagraphs (A), (B), (C), (D), and 
(E) of paragraph (1) have been met with respect to the system; 
"(B) the Secretary determines that the system— 
"(i) is operated directly by the State or by an entity 
designated pursuant to State law, 
"(ii) provides for payment of hospitals covered under the 
system under a methodology (which sets forth exceptions 
and adjustments, as well as any method for changes in the 
42 use 1395. 
42 use 1395b-l 
note. 
97 STAT. 152 
PUBLIC LAW 98-21—APR. 20, 1983 
96 Stat. 339. 
42 use 1395WW. 
42 u s e 1395f. 
methodology) by which rates or amounts to be paid for 
hospital services during a specified period are established 
under the system prior to the defined rate period, and 
"(iii) hospitals covered under the system will make such 
reports (in lieu of cost and other reports, identified by the 
Secretary, otherwise required under this title) as the Secre-
tary may require in order to properly monitor assurances 
provided under this subsection; 
"(C) the State has provided the Secretary with satisfactory 
assurances that operation of the system will not result in any 
change in hospital admission practices which result in— 
"(i) a significant reduction in the proportion of patients 
(receiving hospital services covered under the system) who 
have no third-party coverage and who are unable to pay for 
hospital services, 
"(ii) a significant reduction in the proportion of individ-
uals admitted to hospitals for inpatient hospital services for 
which payment is (or is likely to be) less than the antici-
pated charges for or costs of such services, 
"(iii) the refusal to admit patients who would be expected 
to require unusually costly or prolonged treatment for rea-
sons other than those related to the appropriateness of the 
care available at the hospital, or 
'Xiv) the refusal to provide emergency services to any 
person who is in need of emergency services if the hospital 
provides such services; 
"(D) any change by the State in the system which has the 
effect of materially reducing payments to hospitals can only 
take effect upon 60 days notice to the Secretary and to the 
hospitals the payment to which is likely to be materially 
affected by the change; and 
"(E) the State has provided the Secretary with satisfactory 
assurances that in the development of the system the State has 
consulted with local governmental officials concerning the 
impact of the system on public hospitals. 
The Secretary shall respond to requests of States under this para-
graph within 60 days of the date the request is submitted to the 
Secretary. 
"(6) If the Secretary determines that the assurances described in 
paragraph (1)(C) have not been met with respect to any 36-month 
period, the Secretary may reduce payments under this title to 
hospitals under the system in an amount equal to the amount by 
which the payment under this title under such system for such 
period exceeded the amount of payments which would otherwise 
have been made under this title not using such system.". 
(d) Subsection (d) of such section, as added by section 110 of the 
Tax Equity and Fiscal Responsibility Act of 1982, is amended— 
(1) by striking out "section 1814(b)" in paragraph (2)(A) and 
inserting in lieu thereof "subsection (b)", and 
(2) by redesignating the subsection as subsection 0) and trans-
ferring and inserting such subsection at the end of section 1814 
of the Social Security Act under the following heading: 
96 Stat. 331. 
42 use 1395WW. 
"Elimination of Lesser-of-Cost-or-Charges Provision". 
(e) Such section 1886 is further amended by adding at the end the 
fjoUowing new subsections: 
PUBLIC LAW 98-21—APR. 20, 1983 
97 STAT. 153 
"(dXlXA) Notwithstanding section 1814(b) but subject to the provi-
sions of section 1813, the amount of the payment with respect to the 
operating costs of inpatient hospital services (as defined in subsec-
tion (aX4)) of a subsection (d) hospital (as defined in subparagraph 
(B)) for inpatient hospital discharges in a cost reporting period or in 
a fiscal year— 
"(i) beginning on or after October 1,1983, and before October 
1,1984, is equal to the sum o
f
— 
"(I) the target percentage (as defined in subparagraph (O) 
of the hospital's target amount for the cost reporting period 
(as defined in subsection (bX3XA), but determined without 
the application of subsection (a)), and 
"(II) the DRG percentage (as defined in subparagraph (O) 
of the regional adjusted DRG prospective payment rate 
determined under paragraph (2) for such dischai^es; 
"(ii) beginning on or after October 1,1984, and before October 
1,1986, is equal to the sum o
f
—
-
"(I) the target percentage (as defined in subparagraph (C)) 
of the hospital's target amount for the cost reporting period 
(as defined in subsection (bX3XA), but determined without 
the application of subsection (a)), and 
"(II) the DRG percentage (as defined in subparagraph (O) 
of the applicable combined adjusted DRG prospective pay-
ment rate determined under subparagraph (U) for such 
discharges; or 
"(iii) beginning on or after October 1, 1986, is equal to the 
national adjusted DRG prospective payment rate determined 
under paragraph (3) for such discharges. 
"(B) As used in this section, the term 'subsection (d) hospital' 
means a hospital located in one of the fifty States or the District of 
Columbia other than— 
"(i) a psychiatric hospital (as defined in section 1861(f)), 
"(ii) a rehabilitation hospital (as defined by the Secretary), 
"(iii) a hospital whose inpatients are predominantly individ-
uals under 18 years of age, or 
"(iv) a hospital which has an average inpatient length of stay 
(as determined by the Secretaiy) of greater than 25 days; 
and, in accordance with regulations of the Secretary, does not 
include a psychiatric or rehabilitation unit of the hospital which is a 
distinct part of the hospital (as defined by the Secretary). 
"(C) For purposes of this subsection, for cost reporting periods 
beginning, or discharges occurring-
"(i) on or after October 1,1983, and before October 1,1984, the 
'target percentage' is 75 percent and the *DRG percentage' is 25 
percent; 
"(ii) on or after October 1, 1984, and before October 1, 1985, 
the 'target percentage' is 50 percent and the 'DRG percentage' 
is 50 percent; and 
"(iii) on or after October 1, 1985, and before October 1, 1986, 
the 'target percentage' is 25 percent and the 'DRG percentage' 
is 75 percent. 
"(D) For purposes of subparagraph (AXiiXII), the 'applicable com-
bined adjusted DRG prospective payment rate' for cost reporting 
periods beginning, or discharges occurring— 
"(i) on or after October 1,1984, and before October 1,1985, is a 
combined rate consisting of 25 percent of the national adjusted 
DRG prospective pa5rment rate, and 75 percent of the regional 
42 use 1395f, 
1395e. 
42 use 1395x. 
97 STAT. 154 
PUBLIC LAW 98-21—APR. 20, 1983 
adjusted DRG prospective payment rate, determined under 
paragraph (3) for such discharges; and 
"(ii) on or after October 1, 1985, and before October 1, 1986, is 
a combined rate consisting of 50 percent of the national adjusted 
DRG prospective payment rate, and 50 percent of the regional 
adjusted DRG prospective payment rate, determined under 
paragraph (3) for such discharges. 
"(2) The Secretary shall determine a national adjusted DRG pros-
pective payment rate, for each inpatient hospital discharge in fiscal 
year 1984 involving inpatient hospital services of a subsection (d) 
hospital in the United States, and shall determine a regional 
adjusted DRG prospective payment rate for such discharges in each 
region, for which payment may be made under part A of this title. 
Each such rate shall be determined for hospitals located in urban or 
rural areas within the United States or within each such region, 
respectively, as follows: 
"(A) DETERMINING ALLOWABLE INDIVIDUAL HOSPITAL COSTS FOR 
BASE PERIOD.—The Secretary shall determine the allowable 
operating costs per discharge of inpatient hospital services for 
the hospital for the most recent cost reporting period for which 
data are available. 
"(B) UPDATING FOR FISCAL YEAR I984.—The Secretary shall 
update each amount determined under subparagraph (A) for 
fiscal year 1984 by— 
"(i) updating for fiscal year 1983 by the estimated average 
rate of change of hospital costs industry-wide between the 
cost reporting period used under such subparagraph and 
fiscal year 1983 and the most recent case-mix data availa-
ble, and 
"(ii) projecting for fiscal year 1984 by the applicable 
percentage increase (as defined in subsection (b)(3)(B)) for 
fiscal year 1984. 
"(C) STANDARDIZING AMOUNTS.—The Secretary shall standard-
ize the amount updated under subparagraph (B) for each hospi-
tal by— 
"(i) excluding an estimate of indirect medical education 
costs, 
"(ii) adjusting for variations among hospitals by area in 
the average hospital wage level, and 
"(iii) adjusting for variations in case mix among hospitals. 
"(D) COMPUTING URBAN AND RURAL AVERAGES.—The Secretary 
shall compute an average of the standardized amounts deter-
mined under subparagraph (C) for the United States and for 
each region— 
"(i) for all subsection (d) hospitals located in an urban 
area within the United States or that region, respectively, 
and 
"(ii) for all subsection (d) hospitals located in a rural area 
within the United States or that region, respectively. 
'Region." 
For purposes of this subsection, the term 'region' means one of 
the nine census divisions, comprising the fifty States and the 
District of Columbia, established by the Bureau of the Census 
'Urban area." 
for statistical and reporting purposes; the term 'urban area' 
means an area within a Standard Metropolitan Statistical Area 
(as defined by the Office of Management and Budget) or within 
such similar area as the Secretary has recognized under subsec-
PUBLIC LAW 98-21—APR. 20, 1983 
97 STAT. 155 
tion (a) by regulation; and the term 'rural area* means any area 
outside such an area or similar area. 
"(E) REDUCING FOR VALUE OF OUTUER PAYMENTS.—The Secre-
tary shall reduce each of the average standardized amounts 
determined under subparagraph (D) by a proportion equal to 
the proportion (estimated by the Secretary) of the amount of 
payments under this subsection based on DRG prospective pay-
ment rates which are additional payments described in para-
graph (5)(A) (relating to outlier payments). 
"(F) MAINTAINING BUDGET NEUTRAUTY.—The Secretary shall 
adjust each of such average standardized amounts as may be 
required under subsection (eXlXB) for that fiscal year. 
(G) COMPUTING DRG-SPECIFIC RATES FOR URBAN AND RURAL 
HOSPITALS IN THE UNITED STATES AND IN EACH REGION.—For each 
discharge classified within a diagnosis-related group, the Secre-
tary shall establish a national DRG prospective payment rate 
and shall establish a regional DRG prospective payment rate for 
each re^on, each of which is equal— 
*Xi) for hospitals located in an urban area in the United 
States or that region (respectively), to the product o
f
— 
"(I) the average standardized amount (computed 
under subparagraph (D), reduced under subparagraph 
(E), and adjusted under subparagraph (F)) for hospitals 
located in an urban area in the United States or that 
region, and 
(II) the weighting factor (determined under para-
graph (4XB)) for that diagnosis-related group; and 
"(ii) for hospitals located in a rural area in the United 
States or that region (respectively), to the product o
f
— 
"(I) the average standardized amount (computed 
under subparagraph (D), reduced under subparagraph 
(E), and adjusted under subparagraph (F)) for hospitals 
located in a rural area in the United States or that 
region, and 
(II) the weighting factor (determined under para-
graph (4XB)) for that diagnosis-related group. 
"(H) ADJUSTING FOR DIFFERENT AREA WAGE LEVELS.—The Sec-
retary shall adjust the proportion, (as estimated by the Secre-
tary from time to time) of hospitals' costs which are attributable 
to wages and wage-related costs, of the national and regional 
DRG prospective payment rates computed under subparagraph 
(G) for area differences in hospital wage levels by a factor 
(established by the Secretary) reflecting the relative hospital 
wage level in the geographic area of the hospital compared to 
the national average hospital wage level. 
"(3) The Secretary shall determine a national adjusted DRG pros-
pective payment rate, for each inpatient hospital discharge in a 
fiscal year after fiscal year 1984 involving inpatient hospital services 
of a subsection (d) hospital in the United States, and shall determine 
a regional adjusted DRG prospective payment rate for such dis-
charges in each region for which payment may be made under part 
A of this title. Each such rate shall be determined for hospitals 
located in urban or rural areas within the United States and within 
each such region, respectively, as follows: 
"(A) UPDATING PREVIOUS STANDARDIZED AMOUNTS.—The Secre-
tary shall compute an average standardized amount for hospi-
tals located in an urban area and for hospitals located in a rural 
"Rural area." 
97 STAT. 156 
PUBLIC LAW 98-21—APR. 20, 1983 
area within the United States and for hospitals located in an 
urban area and for hospitals located in a rural area within each 
region, equal to the respective average standardized amount 
computed for the previous fiscal year under paragraph (2KD) or 
under this subparagraph, increased for fiscal year 1985 by the 
applicable percentage increase under subsection (bX3XB), and 
adjusted for subsequent fiscal years in accordance with the final 
determination of the Secretary under subsection (eX4), and 
adjusted to reflect the most recent case-mix data available. 
(B) REDUCING FOR VALUE OF OUTLIER PAYMENTS.—The Secre-
tary shall reduce each of the average standardized amounts 
determined under subparagraph (A) by a proportion equal to 
the proportion (estimated by the Secretary) of the amount of 
payments under this subsection based on DRG prospective pay-
ment amounts which are additional pajmients described in 
paragraph (5XA) (relating to outlier payments). 
"(C) MAINTAINING BUDGET NEUTRALITY.—The Secretary shall 
adjust each of such average standardized amounts as may be 
required under subsection (eXlXB) for that fiscal year. 
"(D) COMPUTING DRG-SPECIFIC RATES FOR URBAN AND RURAL 
HOSPITALS.—For each discharge classified within a diagnosis-
related group, the Secretary shall establish for the fiscal year a 
national DRG prospective payment rate and shall establish a 
regional DRG prospective payment rate for each region, each of 
which is equal— 
"(i) for hospitals located in an urban area in the United 
States or that region (respectively), to the product o
f
— 
"(I) the average standardized amount (computed 
under subparagraph (A), reduced under subparagraph 
(B), and adjusted under subparagraph (C), for the fiscal 
year for hospitals located in an urban area in the 
United States or that region, and 
"(II) the weighting factor (determined under para-
graph (4XB)) for that diagnosis-related group; and 
"(ii) for hospitals located in a rural area in the United 
States or that region (respectively), to the product o
f
— 
"(I) the average standardized amount (computed 
under subparagraph (A), reduced under subparagraph 
(B), and adjusted under subparagraph (O) for the fiscal 
year for hospitals located in a rural area in the United 
States or that region, and 
"(II) the weighting factor (determined under para-
graph (4XB)) for that diagnosis-related group. 
"(E) ADJUSTING FOR DIFFERENT AREA WAGE LEVELS.—The Sec-
retary shall adjust the proportion, (as estimated by the Secre-
tary from time to time) of hospitals' costs which are attributable 
to wages and wage-related costs, of the DRG prospective pay-
ment rates computed under subparagraph (D) for area differ-
ences in hospital wage levels by a factor (established by the 
Secretary) reflecting the relative hospital wage level in the 
geographic area of the hospital compared to the national aver-
age hospital wage level. 
"(4)(A) The Secretary shall establish a classification of inpatient 
hospital discharges by diagnosis-related groups and a methodology 
for classifying specific hospital discharges within these groups. 
"(B) For each such diagnosis-related group the Secretary shall 
assign an appropriate weighting factor which reflects the relative 
PUBLIC LAW 98-21—APR. 20, 1983 
97 STAT. 157 
hospital resources used with respect to discharges classified within 
that group compared to discharges classified within other groups. 
"(C) The Secretary shall adjust the classifications and weighting 
factors established under subparagraphs (A) and (B), for discharges 
in fiscal year 1986 and at least every four fiscal years thereafter, to 
reflect changes in treatment patterns, technology, and other factors 
which may change the relative use of hospital resources. 
"(D) The Commission (established under subsection (e)(2)) shall 
consult with and make recommendations to the Secretary with 
respect to the need for adjustments under subparagraph (C), based 
upon its evaluation of scientific evidence with respect to new prac-
tices, including the use of new technologies and treatment modali-
ties. The Commission shall report to the Congress with respect to its Report to 
evaluation of any adjustments made by the Secretary under subpar- Congress. 
agraph (C). 
"(5)(A)(i) The Secretary shall provide for an additional payment 
for a subsection (d) hospital for any discharge in a diagnosis-related 
group, the length of stay of which exceeds the mean length of stay 
for discharges within that group by a fixed number of days, or 
exceeds such mean length of stay by some fixed number of standard 
deviations, whichever is the fewer number of days. 
"(ii) For cases which are not included in clause (i), a subsection (d) 
hospital may request additional payments in any case where 
charges, adjusted to cost, exceed a fixed multiple of the applicable 
DRG prospective payment rate, or exceed such other fixed dollar 
amount, whichever is greater. 
"(iii) The amount of such additional payment under clauses (i) and 
(ii) shall be determined by the Secretary and shall approximate the 
marginal cost of care beyond the cutoff point applicable under 
clause (i) or (ii). 
"(iv) The total amount of the additional payments made under 
this subparagraph for discharges in a fiscal year may not be less 
than 5 percent nor more than 6 percent of the total payments 
projected or estimated to be made based on DRG prospective pay-
ment rates for discharges in that year. 
"(B) The Secretary shall provide for an additional payment 
amount for subsection (d) hospitals with indirect costs of medical 
education, in an amount computed in the same manner as the 
adjustment for such costs under regulations (in effect as of Janu-
ary 1,1983) under subsection (a)(2), except that in the computation 
under this subparagraph the Secretary shall use an educational 
adjustment factor equal to twice the factor provided under such 
regulations. 
"(C)(i) The Secretary shall provide for such exceptions and adjust-
ments to the payment amounts established under this subsection as 
the Secretary deems appropriate to take into account the special 
needs of regional and national referral centers (including those 
hospitals of 500 or more beds located in rural areas), and of public or 
other hospitals that serve a significantly disproportionate number of 
patients who have low income or are entitled to benefits under part 
A of this title. 
"(ii) With respect to a subsection (d) hospital which is a 'sole 
community hospital', payment under paragraph (1)(A) for any cost 
reporting period or fiscel year beginning on or after October 1,1984, 
shall be determined under the formula provided in clause (i) of that 
paragraph with the target and DRG percentages determined under 
paragraph (l)(CXi) (except that any reference to paragraph (2) shall 
97 STAT. 158 
PUBLIC LAW 98-21—APR. 20, 1983 
"Sole 
community 
hospital." 
42 use 1395y. 
Publication in 
Federal 
Register. 
42 use 139500. 
be deemed, for this purpose, a reference to paragraph (3)). In the 
case of a sole community hospital that experiences, in a cost report-
ing period (beginning on or after October 1,1983, and before October 
1,1986) compared to the previous cost reporting period, a decrease of 
more than 5 percent in its total number of inpatient cases due to 
circumstances beyond its control, the Secretary shall provide for 
such adjustment to the payment amounts under this subsection as 
may be necessary to fully compensate the hospital for the fixed costs 
it incurs in the period in providing inpatient hospital services, 
including the reasonable cost of maintaining necessary core staff 
and services. For purposes of this subparagraph, the term 'sole 
community hospital' means a hospital that, by reason of factors such 
as isolated location, weather conditions, travel conditions, or ab-
sence of other hospitals (as determined by the Secretary), is the sole 
source of inpatient hospital services reasonably available to individ-
uals in a geographical area who are entitled to benefits under part 
A. 
"(iii) The Secretary shall provide by regulation for such other 
exceptions and adjustments to such payment amounts under this 
subsection as the Secretary deems appropriate (including exceptions 
and adjustments that may be appropriate with respect to hospitals 
involved extensively in treatment for and research on cancer). 
"(iv) The Secretary may provide for such adjustments to the 
payment amounts under this subsection as the Secretary deems 
appropriate to take into account the unique circumstances of hospi-
tals located in Alaska and Hawaii. 
"(D)(i) The Secretary shall estimate the amount of reimbursement 
made for services described in section 1862(a)(14) with respect to 
which payment was made under part B in the base reporting periods 
referred to in paragraph (2)(A) and with respect to which payment is 
no longer being made. 
"(ii) The Secretary shall provide for an adjustment to the payment 
for subsection (d) hospitals in each fiscal year so as appropriately to 
reflect the net amount described in clause (i). 
"(6) The Secretary shall provide for publication in the Federal 
Register, on or before the September 1 before each fiscal year 
(beginning with fiscal year 1984), of a description of the methodology 
and data used in computing the adjusted DRG prospective payment 
rates under this subsection, including any adjustments required 
under subsection (e)(1)(B). 
"(7) There shall be no administrative or judicial review under 
section 1878 or otherwise o
f
— 
"(A) the determination of the requirement, or the propor-
tional amount, of any adjustment effected pursuant to subsec-
tion (e)(1), and 
"(B) the establishment of diagnosis-related groups, of the 
methodology for the classification of discharges within such 
groups, and of the appropriate weighting factors thereof under 
paragraph (4). 
"(e)(1)(A) For cost reporting periods of hospitals beginning in fiscal 
year 1984 or fiscal year 1985, the Secretary shall provide for such 
proportional adjustment in the applicable percentage increase (oth-
erwise applicable to the periods under subsection (b)(3)(B)) as may be 
necessary to assure that— 
"(i) the aggregate payment amounts otherwise provided under 
subsection (d)(l)(A)(i)(I) for that fiscal year for operating costs of 
PUBLIC LAW 98-21—APR. 20, 1983 
97 STAT. 159 
inpatient hospital services of hospitals (excluding payments 
made under section 1866(a)(1)(F)), 
42 use i395cc. 
are not greater or less than— 
"(ii) the target percentage (as defined in subsection (dXl)(C)) of 
the payment amounts which would have been payable for such 
services for those same hospitals for that fiscal year under this 
section under the law as in effect before the date of the enact-
ment of the Social Security Amendments of 1983 (excluding 
payments made under section 1866(a)(1)(F)); 
except that the adjustment made under this subparagraph shall 
apply only to subsection (d) hospitals and shall not apply for pur-
poses of making computations under subsection (d)(2)(B)(ii) or sub-
section (d)(3)(A). 
"(B) For discharges occurring in fiscal year 1984 or fiscal year 
1985, the Secretary shall provide under subsections (d)(2)(F) and 
(d)(3)(C) for such equal proportional adjustment in each of the 
average standardized amounts otherwise computed for that fiscsd 
year as may be necessary to assure that— 
"(i) the aggregate payment amounts otherwise provided under 
subsection (d)(l)(A)(i)(II) and (d)(5) for that fiscal year for operat-
ing costs of inpatient hospital services of hospitals (excluding 
payments made under section 1866(a)(1)(F)), 
are not greater or less than— 
"(ii) the DRG percentage (as defined in subsection (d)(1)(C)) of 
the payment amounts which would have been payable for such 
services for those same hospitals for that fiscal year under this 
section under the law as in effect before the date of the enact-
ment of the Social Security Amendments of 1983 (excluding 
payments made under section 1866(a)(1)(F)). 
"(2) The Director of the Congressional Ofiice of Technology Assess-
ment (hereinafter in this subsection referred to as the 'Director' and 
the 'Office', respectively) shall provide for appointment of a Prospec-
tive Payment Assessment Commission (hereinafter in this subsec-
tion referred to as the 'Commission'), to be composed of independent 
experts appointed by the Director. In addition to carrying out its 
functions under subsection (d)(4)(D), the Commission shall review 
the applicable percentage increase factor described in subsection 
(b)(3)(B) and make recommendations to the Secretary on the appro-
priate percentage change which should be effected for hospital 
inpatient discharges under subsections (b) and (d) for fiscal years 
beginning with fiscal year 1986. In making its recommendations, the 
Commission shall take into account changes in the hospital market-
basket described in subsection (b)(3)(B), hospital productivity, tech-
nological and scientific advances, the quality of health care provided 
in hospitals (including the quality and skill level of professional 
nursing required to maintain quality care), and long-term cost-
effectiveness in the provision of inpatient hospital services. 
"(3) The Commission, not later than the April 1 before the begin- Recommendations. 
ning of each fiscal year (beginning with fiscal year 1986), shall 
report its recommendations to the Secretary on an appropriate 
change factor which should be used (instead of the applicable per-
centage increase described in subsection (b)(3)(B)) for inpatient hos-
pitsl services for discharges in that fiscal year. 
"(4) Taking into consideration the recommendations of the Com-
mission, the Secretary shall determine for each fiscal year (begin-
ning with fiscal year 1986) the percentage change which will apply 
for purposes of this section as the applicable percentage increase 
97 STAT. 160 
PUBLIC LAW 98-21—APR. 20, 1983 
(otherwise described in subsection (b)(3)(B)) for discharges in that 
fiscal year, and which will take into account amounts necessary for 
the efficient and effective delivery of medically appropriate and 
necessary care of high quality. 
Publication in 
"(5) The Secretary shall cause to have published for public com-
Federal 
ment in the Federal Register, not later than— 
Kegister. 
«^^^ ^^IQ June 1 before each fiscal year (beginning with fiscal 
year 1986), the Secretary's proposed determination under para-
graph (4) for that fiscal year, and 
"(B) the September 1 before such fiscal year after such consid-
eration of public comment on the proposal as is feasible in the 
time available, the Secretary's final determination under such 
paragraph for that year. 
The Secretary shall include in the publication referred to in subpar-
agraph (A) for a fiscal year the report of the Commission's recom-
mendations submitted under paragraph (3) for that fiscal year. 
"(6) (A) The Commission shall consist of 15 individuals. Members 
of the Commission shall first be appointed no later than April 1, 
1984, for a term of three years, except that the Director may provide 
initially for such shorter terms as will insure that (on a continuing 
basis) the terms of no more than seven members expire in any one 
year. 
"(B) The membership of the Commission shall provide expertise 
and experience in the provision and financing of health care, includ-
ing physicians and registered professional nurses, employers, third 
party payors, individuals skilled in the conduct and interpretation of 
biomedical, health services, and health economics research, and 
individuals having expertise in the research and development of 
technological and scientific advances in health care. The Director 
shall seek nominations from a wide range of groups, including— 
"(i) national organizations representing physicians, including 
medical specialty organizations and registered professional 
nurses and other skilled health professionals; 
"(ii) national organizations representing hospitals, including 
teaching hospitals; 
"(iii) national organizations representing manufacturers of 
health care products; and 
"(iv) national organizations representing the business commu-
nity, health benefit programs, labor, and the elderly. 
"(C) Subject to such review as the Office deems necessary to 
assure the efficient administration of the Commission, the Commis-
sion may— 
"(i) employ and fix the compensation of such personnel (not to 
exceed 25) as may be necessary to carry out its duties; 
"(ii) seek such assistance and support as may be required in 
the performance of its duties from appropriate Federal depart-
ments and agencies; 
"(iii) enter into contracts or make other arrangements, as 
may be necessary for the conduct of the work of the 
Commission; 
"(iv) make advance, progress, and other payments which 
relate to the work of the Commission; 
"(v) provide transportation and subsistence for persons serv-
ing without compensation; and 
"(vi) prescribe such rules and regulations as it deems neces-
sary with respect to the internal organization and operation of 
the Commission. 
PUBLIC LAW 98-21—APR. 20, 1983 
97 STAT. 161 
"(D) While serving on the business of the Commission (including 
traveltime), a member of the Commission shall be entitled to com-
pensation at the per diem equivalent of the rate provided for level 
IV of the Executive Schedule under section 5315 of title 5, United 
States Code; and while so serving away from home and his regular 
place of business, a member may be allowed travel expenses, as 
authorized by the Chairman of the Commission. 
"(E) In order to identify medically appropriate patterns of health 
resources use in accordance with paragraph (2), the Commission 
shall collect and assess information on medical and surgical proce-
dures and services, including information on regional variations of 
medical practice and lengths of hospitalization and on other patient-
care data, giving special attention to treatment patterns for condi-
tions which appear to involve excessively costly or inappropriate 
services not adding to the quality of care provided. In order to assess 
the safety, efficacy, and cost-effectiveness of new and existing medi-
cal and surgical procedures, the Commission shall, in coordination 
to the extent possible with the Secretary, collect and assess factual 
information, giving special attention to the needs of updating exist-
ing diagnosis-related groups, establishing new diagnosis-related 
groups, and making recommendations on relative weighting factors 
for such groups to reflect appropriate differences in resource con-
sumption in delivering safe, efficacious, and cost-effective care. In 
collecting and assessing information, the Commission shall— 
"(i) utilize existing information, both published and unpub-
lished, where possible, collected and assessed either by its own 
staff or under other arrangements made in accordance with this 
paragraph; 
"(ii) carry out, or award grants or contracts for, original 
research and experimentation, including clinical research, 
where existing information is inadequate for the development of 
useful and valid guidelines by the Commission; and 
"(iii) adopt procedures allowing any interested party to 
submit information with respect to medical and surgical proce-
dures and services (including new practices, such as the use of 
new technologies and treatment modalities), which information 
the Commission shall consider in making reports and recom-
mendations to the Secretary and Congress. 
"(F) The Commission shall have access to such relevant informa-
tion and data as may be available from appropriate Federal agencies 
and shall assure that its activities, especially the conduct of original 
research and medical studies, are coordinated with the activities of 
Federal agencies. 
"(G)(i) The Office shall report annually to the Congress on the 
functioning and progress of the Commission and on the status of the 
assessment of medical procedures and services by the Commission, 
"(ii) The Office shall nave unrestricted access to all deliberations, 
records, and data of the Commission, immediately upon its request, 
"(iii) In order to carry out its duties under this paragraph, the 
Office is authorized to expend reasonable and neccessary funds as 
mutually agreed upon by the Office and the Commission. The Office 
shall be reimbursed for such funds by the Commission from the 
appropriations made with respect to the Commission. 
(H) The Commission shall be subject to periodic audit by the Audit 
General Accounting Office. 
"(IXi) There are authorized to be appropriated such sums as may 
be necessary to carry out the provisions of this paragraph. 
Report to 
Congress. 
Appropriation 
authorization. 
1 1 - 1 9 4 O 
85 — 7 
QL 3 
97 STAT. 162 
PUBLIC LAW 98-21—APR. 20, 1983 
42 use 1320c. 
42 use 1301. 
42 use 1395y. 
42 use 1320a-l. 
42 use 1395y. 
"(ii) Eighty-five percent of such appropriation shall be payable 
from the Federal Hospital Insurance Trust Fund, and 15 percent of 
such appropriation shall be payable from the Federal Supplemen-
tal^ Medical Insurance Trust Fund. 
(fKD The Secretary shall maintain, for a period ending not 
earlier than September 30,1988, a system for the reporting of costs 
of hospitals receiving pa3mients computed under subsection (d). 
"(2) If the Secretary determines, based upon information supplied 
by a utilization and quality control peer review organization under 
part B of title XI, that a hospital, in order to circumvent the 
payment method established under subsection (b) or (d) of this 
section, has taken an action that results in the admission of individ-
uals entitled to benefits under part A unnecessarily, unnecessary 
multiple admissions of the same such individuals, or other inappro-
priate medical or other practices with respect to such individuals, 
the Secretary may— 
"(A) deny payment (in whole or in part) under part A with 
respect to inpatient hospital services provided with respect to 
such an unnecessary admission (or subsequent admission of the 
same individual), or 
"(B) require the hospital to take other corrective action neces-
sary to prevent or correct the inappropriate practice. 
"(3) The provisions of paragraphs (2), (3), and (4) of section 1862(d) 
shall apply to determinations under paragraph (2) of this subsection 
in the same manner as they apply to determinations made under 
section 1862(dXl). 
"(gXD If the Congress does not enact legislation, after the date of 
the enactment of this subsection and before October 1,1986, respect-
ing the payment under this title for capital-related costs for inpa-
tient hospital services, no payment may be made under this title for 
capital-related costs of capital expenditures (as defined in section 
1122(g) and except as provided in section 1122(j)) for inpatient 
hospital services in a State, which expenditures are obligated after 
September 30, 1986, unless the State has an agreement with the 
Secretary under section 1122(b) and under the ^eement the State 
has recommended approval of the capital expenditures. 
"(2) The Secretary shall provide that the amount which is allow-
able, with respect to reasonable costs of inpatient hospital services 
for which payment may be made under this title, for a return on 
equity capital for hospitals shall, for cost reporting periods begin-
ning on or after the date of the enactment of this subsection, be 
equal to amounts otherwise allowable under regulations in effect on 
March 1,1983, except that the rate of return to be recognized shall 
be equal to the average of the rates of interest, for each of the 
months any part of which is included in the reporting period, on 
obligations issued for purchase by the Federal Hospitm Insurance 
Trust Fund.". 
(f) Section 1862(aXl) of the Social Security Act is amended— 
(1) by striking out "(B) or (C)" and inserting in lieu thereof 
"(B),(C),or(D)"; 
(2) by striking out "and" at the end of subparagraph (B); 
(3) by striking out the semicolon at the end of subparagraph 
(C) and inserting in lieu thereof a comma and "and"; and 
(4) by adding at the end thereof the following new 
subparagraph: 
"(D) in the case of clinical care items and services provided 
with the concurrence of the Secretary and with respect to 
PUBLIC LAW 98-21—APR. 20, 1983 
97 STAT. 163 
96 Stat. 331. 
42 u s e 1395WW. 
42 u s e 1395WW 
note. 
42 u s e 1395f, 
1395n. 
42 u s e 1395x. 
research and experimentation conducted by, or under contract 
with, the Prospective Payment Assessment Commission or the 
Secretary, which are not reasonable and necessary to carry out 
the purposes of section 1886(e)(6);". 
(g) In determining whether a hospital is in an urban or rural area 
for purposes of section 1886(d) of the Social Security Act, the Secre-
tary of Health and Human Services shall classify any hospital 
located in New England as being located in an urban area if such 
hospital was classified as being located in an urban area under the 
Standard Metropolitan Statistical Area system of classification in 
effect in 1979. 
CONFORMING AMENDMENTS 
SEC. 602. (a) Section 1153(b)(2) of the Social Security Act is 42 use i320c-2. 
amended by adding at the end the following new subparagraph: 
"(C) The twelve-month period referred to in subparagraph (A) 
shall be deemed to begin not later than October 1983.". 
(b) Sections 1814(g) and 1835(e) of the Social Security Act are each 
amended by inserting "(or would be if section 1886 did not apply)" 
after "section 1861(vXl)(D)". 
(c) Section 1814(hX2) of such Act is amended by striking out "the 
reasonable costs for such services" and inserting in lieu thereof "the 
amount that would be payable for such services under subsection (b) 
and section 1886". 
(d)(1) The matter in section 1861(v)(lXGXi) of such Act following 
subclause (III) is amended by striking out "on the basis of the 
reasonable cost of and inserting in lieu thereof "the amount other-
wise payable under part A with respect to". 
(2) Section 1861(v)(2XA) of such Act is amended by striking out "an 
amount equal to the reasonable cost of and inserting in lieu thereof 
"the amount that would be taken into account with respect to". 
(3) Section 1861(vX2XB) of such Act is amended by striking out 
"the equivalent of the reasonable cost of. 
(4) Section 1861(vX3) of such Act is amended by striking out "the 
reasonable cost of such bed and board furnished in semiprivate 
accommodations (determined pursuant to paragraph (1))" and 
inserting in lieu thereof "the amount otherwise payable under 
this title for such bed and board furnished in semiprivate 
accommodations". 
(e) Section 1862(a) of such Act is amended— 
(1) by striking out "or" at the end of paragraph (12), 
(2) by striking out the period at the end of paragraph (13) and 
inserting in lieu thereof "; or", and 
(3) by adding at the end the following new paragraph: 
"(14) which are other than physicians' services (as defined in 
regulations promulgated specifically for purposes of this para-
graph) and which are furnished to an individual who is an 
inpatient of a hospital by an entity other than the hospital, 
unless the services are furnished under arrangements (as de-
fined in section 1861(wXl)) with the entity made by the hospi-
tal.". 
(fKD Section 1866(aXl) of such Act is amended— 
(A) by striking out "and" at the end of subparagraph (D), 
(B) by striking out the period at the end of subparagraph (E), 
and 
(C) by adding at the end the following new subparagraphs: 
42 u s e 1395y. 
42 u s e 1395CC. 
97 STAT. 164 
PUBLIC LAW 98-21—APR. 20, 1983 
96 Stat. 331. 
42 use 1395WW. 
42 use 1320c. 
42 use 1301. 
42 use 1395CC. 
42 use 1395mm. 
"(F) in the case of hospitals which provide inpatient hospital 
services for which payment may be made under subsection (c) or 
(d) of section 1886, to maintain an agreement with a utilization 
and quality control peer review organization (if there is such an 
organization which has a contract with the Secretary under 
part B of title XI for the area in which the hospital is located) 
under which the organization will perform functions under that 
part with respect to the review of the validity of diagnostic 
information provided by such hospital, the completeness, ade-
quacy, and quality of care provided, the appropriateness of 
admissions and discharges, and the appropriateness of care 
provided for which additional payments are sought under sec-
tion 1886(d)(5), with respect to inpatient hospital services for 
which payment may be made under part A of this title (and for 
purposes of payment under this title, the cost of such agreement 
to the hospital shall be considered a cost incurred by such 
hospital in providing inpatient services under part A, and (i) 
shall be paid directly by the Secretary to such organization on 
behalf of such hospital in accordance with a rate per review 
established by the Secretary, (ii) shall be transferred from the 
Federal Hospital Insurance Trust Fund, without regard to 
amounts appropriated in advance in appropriation Acts, in the 
same manner as transfers are made for payment for services 
provided directly to beneficiaries, (iii) shall be not less than an 
amount which reflects the rates per review established in fiscal 
year 1982 for both direct and administrative costs (adjusted for 
inflation), and (iv) shall not be less in the aggregate for a fiscal 
year than the aggregate amount expended in fiscal year 1982 
for direct and administrative costs (adjusted for inflation)) of 
such reviews, 
"(G) in the case of hospitals which provide inpatient hospital 
services for which payment may be made under subsection (b) or 
(d) of section 1886, not to charge any individual or any other 
person for inpatient hospital services for which such individual 
would be entitled to have payment made under part A but for a 
denial or reduction of payments under section 1886(f)(2), and 
"(H) in the case of hospitals which provide inpatient hospital 
services for which payment may be made under this title, to 
have all items and services (other than physicians' services as 
defined in regulations for purposes of section 1862(a)(14)) (i) that 
are furnished to an individual who is an inpatient of the 
hospital, and (ii) for which the individual is entitled to have 
payment made under this title, furnished by the hospital or 
otherwise under arrangements (as defined in section 1861(w)(l)) 
made by the hospital.". 
(2) The matter in section 1866(a)(2)(B)(ii) of such Act preceding 
subclause (I) is amended by inserting "and except with respect to 
inpatient hospital costs with respect to which amounts are payable 
under section 1886(d)" after "(except with respect to emergency 
services". 
(g) Section 1876(g) of such Act is-amended by adding at the end the 
following: 
"(4) A risk-sharing contract under this subsection may, at the 
option of an eligible organization, provide that, the Secretary— 
"(A) will reimburse hospitals either for payment amounts 
determined in accordance with section 1886, or, if applicable, for 
the reasonable cost (as determined under section 1861(v)), of 
PUBLIC LAW 98-21—APR. 20, 1983 
97 STAT. 165 
42 u s e 139500. 
inpatient hospital services furnished to individuals enrolled 
with such organization pursuant to subsection (d), and 
"(B) will deduct the amount of such reimbursement for pay-
ment which would otherwise be made to such organization.'. 
(h)(1) Section 1878(a) of such Act is amended— 
(A) by inserting "and (except as provided in subsection (g)(2)) 
any hospital which receives payments in amounts computed 
under subsection (b) or (d) of section 1886 and which has submit-
ted such reports within such time as the Secretary may require 
in order to make payment under such section may obtain a 
hearing with respect to such payment by the Board" after 
"subsection (h)" in the matter before paragraph (1), 
(B) by inserting "(i)" after "(A)" in paragraph (1)(A), 
(C) by inserting "or" at the end of paragraph (1)(A) and by 
adding after such paragraph the following new clause: 
"(ii) is dissatisfied with a final determination of the Secre-
tary as to the amount of the payment under subsection (b) 
or (d) of section 1886,", and 
(D) by striking out "(IXA)" in paragraph (3) and inserting in 
lieu thereof "(l)(A)(i), or with respect to appeals under para-
graph (l)(A)(ii), 180 days after notice of the Secretary's final 
determination,". 
(2)(A) The last sentence of section 1878(0(1) of the Social Security 
Act is amended by inserting "(or, in an action brought jointly by 
several providers, the judicial district in which the greatest number 
of such providers are located)" after "the judicial district in which 
the provider is located". 
(B) Section 1878(f)(1) of such Act is further amended by adding at 
the end thereof the following new sentence: "Any appeal to the 
Board or action for judicial review by providers which are under 
common ownership or control must be brought by such providers as 
a group with respect to any matter involving an issue common to 
such providers.". 
(3) Section 1878(g) of such Act is amended by inserting "(1)" after 
"(g)" and by adding at the end the following new paragraph: 
"(2) The determinations and other decisions described in section 
1886(d)(7) shall not be reviewed by the Board or by any court 
pursuant to an action brought under subsection (0 or otherwise." 
(4) The third sentence of section 1878(h) of such Act is amended by 
striking out "cost reimbursement" and inserting in lieu thereof 
"payment of providers of services". 
(i) The first sentence of section 18810t))(2)(A) of such Act is 
amended by inserting "or section 1886 (if applicable)" after "section 
1861(v)". 
0') Section 1887(a)(lKB) of such Act is amended by inserting "or on 
the bases described in section 1886" after "on a reasonable cost 
basis". 
(k) The Secretary of Health and Human Services may, for any cost 
reporting period beginning prior to October 1, 1986, waive the 
requirements of sections 1862(aX14) and 1866(aXl)(H) of the Social 
Security Act in the case of a hospital which has followed a practice, 
since prior to October 1,1982, of allowing direct billing under part B 
of title XVIII of such Act for services (other than physicians serv-
ices) so extensively, that immediate compliance with those require-
ments would threaten the stability of patient care. Any such waiver 
shall provide that such billing may continue to be made under part 
B of such title but that the payments to such hospital under part A 42 U
S
C I395j 
42 USC 1395rr. 
96 Stat. 337. 
42 USC 1395XX. 
42 USC 1395y 
note. 
42 USC 1395y, 
1395CC. 
42 USC 1395. 
97 STAT. 166 
PUBLIC LAW 98-21—APR. 20, 1983 
42 u s e 1395c. 
42 u s e 1395J. 
42 u s e 1395CC. 
of such title shall be reduced by the amount of the billings for such 
services under part B of such title. If such a waiver is granted, at the 
end of the waiver period the Secretary may provide for such meth-
ods of payments under part A as is appropriate, given the organiza-
tional structure of the institution. 
(1) Effective October 1, 1984, section 1866(a)(1) of the Social Secu-
rity Act, as amended by subsection (f)(1) of this section, is further 
amended— 
(1) by striking out "(if there is such an organization" in 
subparagraph (F) and insert in lieu thereof "(with an organiza-
tion", and 
(2) by adding at the end the following new sentence: 
"In the case of a hospital which has an agreement in effect with an 
organization described in subparagraph (F), which organization's 
contract with the Secretary under part B of title XI is terminated on 
or after October 1, 1984, the hospital shall not be determined to be 
out of compliance with the requirement of such subparagraph 
during the six month period beginning on the date of the termina-
tion of that contract.". 
42 u s e 1395WW 
note. 
96 Stat. 331. 
42 u s e 1395WW. 
REPORTS, EXPERIMENTS, AND DEMONSTRATION PROJECTS 
SEC. 603. (a)(1) The Secretary of Health and Human Services 
(hereinafter in this title referred to as the "Secretary") shall study, 
develop, and report to the Congress within 18 months after the date 
of the enactment of this Act on the method and proposals for 
legislation by which capital-related costs, such as return on net 
equity, associated with inpatient hospital services can be included 
within the prospective payment amounts computed under section 
1886(d) of the Social Security Act. 
(2)(A) The Secretary shall studj^ and report annually to the Con-
gress at the end of each year O^eginning with 1984 and ending with 
1987) on the impact, of the payment methodology under section 
1886(d) of the Social Security Act during the previous year, on 
classes of hospitals, beneficiaries, and other payors for inpatient 
hospital services, and other providers, and, in particular, on the 
impact of computing DRG prospective payment rates by census 
division, rather than exclusively on a national basis. Each such 
report shall include such recommendations for such changes in 
legislation as the Secretary deems appropriate. 
(B) During fiscal year 1984, the Secretary shall begin the collec-
tion of data necessary to compute the amount of physician charges 
attributable, by diagnosis-related groups, to physicians' services fur-
nished to inpatients of hospitals whose discharges are classified 
within those groups. The Secretary shall include, in a report to 
Congress in 1985, recommendations on the advisability and feasibil-
ity of providing for determining the amount of the payments for 
physicians' services furnished to hospital inpatients based on the 
DRG type classification of the discharges of those inpatients, and 
legislative recommendations thereon. 
(C) In the annual report to Congress under subparagraph (A) for 
1985, the Secretary shall include the results of studies on— 
(i) the feasibility and impact of eliminating or phasing out 
separate urban and rural DRG prospective payment rates under 
paragraph (3) of section 1886(d) of the Social Security Act; 
(ii) whether and the method under which hospitals, not paid 
based on amounts determined under such section, can be paid 
PUBLIC LAW 98-21—APR. 20, 1983 
97 STAT. 167 
for inpatient hospital services on a prospective basis as under 
such section; 
(iii) the appropriateness of the factors used under paragraph 
(5)(A) of such section to compensate hospitals for the additional 
expenses of outlier cases, and the application of severity of 
illness, intensity of care, or other modifications to the diagnosis-
related groups, and the advisability and feasibility of providing 
for such modifications; 
(iv) the feasibility and desirability of appljdng the payment 
methodology under such section to pajmient by all payors for 
inpatient hospital services; and 
(v) the impact of such section on hospital admissions and the 
feasibility of making a volume adjustment in the DRG prospec-
tive payment rates or requiring preadmission certification in 
order to minimize the incentive to increase admissions. 
Such report shall specifically include, with respect to the item 
described in clause (iv), consideration of the extent of cost-shifting to 
non-Federal payors and the impact of such cost-shifting on health 
insurance costs and premiums borne by employers and employees. 
(D) In the annual report to Congress under subparagraph (A) for 
1986, the Secretary shall include the results of a study examining 
the overall impact of State systems of hospital payment (either 
approved under section 1886(c) of the Social Security Act or under a 
waiver approved under section 402(a) of the Social Security Amend-
ments of 1967 or section 222(a) of the Social Security Amendments of 
1972), particularly assessing such systems' impact not only on the 
medicare program but also on the medicaid program, on payments 
and premiums under private health insurance plans, and on tax 
expenditures. 
(3)(A) The Secretary shall complete a study and make legislative 
recommendations to the Congress with respect to an equitable 
method of reimbursing sole community hospitals which takes into 
account their unique vulnerability to substantial variations in 
occupancy. 
(B) In addition, the Secretary shall examine ways to coordinate an 
information transfer between parts A and B of title XVIII of the 
Social Security Act, particularly with respect to those cases where a 
denial of coverage is made under part A of such title and no 
adjustment is made in the reimbursement to the admitting physi-
cian or physicians. 
(C) The Secretary shall also report on the appropriate treatment 
of uncompensated care costs, and adjustments that might be appro-
priate for large teaching hospitals located in rural areas. 
(D) The Secretary shall also report on the advisability of having 
hospitals make available information on the cost of care to patients 
financed by both public programs and private payors. 
(E) The studies and reports described in this paragraph shall be 
completed and submitted not later than April 1,1985. 
(4) The Secretary shall complete a study and make recommenda-
tions to the Congress, before April 1, 1984, with respect to a method 
for including hospitals located outside of the fifty States and the 
District of Columbia under a prospective payment system. 
(bXD Except as provided in paragraph (2), the amendments made 
by this title shall not affect the authority of the Secretary to 
develop, carry out, or continue experiments and demonstration 
projects. 
96 Stat. 331. 
42 use 1395WW. 
42 use 1395b-l. 
42 use 1395b-l 
note. 
Study and 
recommendations. 
42 use 1395c, 
1395J. 
Study and 
recommendations. 
Effective date. 
42 use 1395b-l 
note. 
97 STAT. 168 
PUBLIC LAW 98-21—APR. 20, 1983 
42 use 1395. 
42 use 1395b-l. 
42 u s e 1395b-l 
note. 
42 use 1315. 
42 use 1396. 
42 use 1395b-l 
note. 
42 use 1
3
9
5
W
W 
note. 
Ante, p. 163. 
Ante, p. 152. 
Publication in 
Federal 
Register. 
(2) The Secretary shall provide that, upon the request of a State 
which has a demonstration project, for payment of hospitals under 
title XVIII of the Social Security Act approved under section 402(a) 
of the Social Security Amendments of 1967 or section 222(a) of the 
Social Security Amendments of 1972, which (A) is in effect as of 
March 1, 1983, and (B) was entered into after August 1982 (or upon 
the request of another party to demonstration project agreement), 
the terms of the demonstration agreement shall be modified so that 
the demonstration project is not required to maintain the rate of 
increase in medicare hospital costs in that State below the national 
rate of increase in medicare hospital costs. 
(c) The Secretary shall approve, with appropriate terms and condi-
tions as defined by the Secretary, within 30 days after the date of 
enactment of this Act— 
(1) the risk-sharing application of On Lok Senior Health 
Services (according to terms and conditions as specified by the 
Secretary), dated July 2, 1982, for waivers, pursuant to section 
222 of the Social Security Amendments of 1972 and section 
402(a) of the Social Security Amendments of 1967, of certain 
requirements of title XVIII of the Social Security Act over a 
period of 36 months in order to carry out a long-term care 
demonstration project, and 
(2) the application of the Department of Health Services, 
State of California, dated November 1,1982, pursuant to section 
1115 of the Social Security Act, for the waiver of certain 
requirements of title XIX of such Act over a period of 36 months 
in order to carry out a demonstration project for capitated 
reimbursement for comprehensive long-term care services 
involving On Lok Senior Health Services. 
(d) The Secretary shall conduct demonstrations with hospitals in 
areas with critical shortages of skilled nursing facilities to study the 
feasibility of providing alternative systems of care or methods of 
payment. 
EFFECTIVE DATES 
SEC. 604. (a)(1) Except as provided in section 602(1) and in para-
graph (2), the amendments made by the preceding provisions of this 
title apply to items and services furnished by or under arrange-
ments with a hospital beginning with its first cost reporting period 
that begins on or after October 1,1983. A change in a hospital s cost 
reporting period that has been made after November 1982 shall be 
recognized for purposes of this section only if the Secretary finds 
good cause for that change. 
(2) Section 1866(a)(1)(F) of the Social Security Act (as added by 
section 602(f)(1)(C) of this title), section 1862(a)(14) (as added by 
section 602(e)(3) of this title) and sections 1886(a)(1) (G) and (H) of 
such Act (as added by section 602(f)(lXC) of this title) take effect on 
October 1,1983. 
(b) The Secretary shall make an appropriate reduction in the 
payment amount under section 1886(d) of the Social Security Act {as 
amended by this title) for any discharge, if the admission has 
occurred before a hospital's first cost reporting period that begins 
after September 1983, to take into account amounts payable under 
title XVIII of that Act (as in effect before the date of the enactment 
of this Act) for items and services furnished before that period. 
(cXD The Secretary shall cause to be published in the Federal 
Register a notice of the interim final DRG prospective payment 
PUBLIC LAW 98-21—APR. 20, 1983 
97 STAT. 169 
rates established under subsection (d) of section 1886 of the Social 
Security Act (as amended by this title) no later than September 1, 
1983, and allow for a period of public comment thereon. Payment on 
the basis of prospective rates shall become effective on October 1, 
1983, without the necessity for consideration of comments received, 
but the Secretary shall, by notice published in the Federal Register, 
affirm or modify the amounts by December 31, 1983, after consider-
ing those comments. 
(2) A modification under paragraph (1) that reduces a prospective 
payment rate shall apply only to discharges occurring after 30 days 
after the date the notice of the modification is published in the 
Federal Register. 
(3) Rules to implement subsection (d) of section 1886 of the Social 
Security Act (as so amended) shall be established in accordance with 
the procedure described in this subsection. 
Ante, p. 152. 
DELAY IN PROVISION RELATING TO HOSPITAL-BASED SKILLED NURSING 
FACILITIES 
SEC. 605. 
bility Act 
inserting in 
(b) The Secretary of Health and Human Services shall, prior to 
December 31, 1983, complete a study and report to the Congress 
with respect to (1) the effect which the implementation of section 
102 of the Tax Equity and Fiscal Responsibility Act of 1982 would 
have on hospital-based skilled nursing facilities, given the differ-
ences (if any) in the patient populations served by such facilities and 
by community-based skilled nursing facilities and (2) the impact on 
skilled nursing facilities of hospital prospective payment systems, 
and recommendations concerning payment of skilled nursing 
facilities. 
96 Stat. 336. 
42 u s e 1395x 
note. 
42 u s e 1395x 
note. 
SHIFT IN MEDICARE PREMIUMS TO COINCIDE WITH COST-OF-LIVING 
INCREASE 
SEC. 606. (a)(1) Section 1839 of the Social Security Act is amended 42 use I395r. 
by striking out subsections (a), (b), and (c) and inserting in lieu 
thereof the following: 
"(a)(1) The Secretary shall, during September of 1983 and of each 
year thereafter, determine the monthly actuarial rate for enrollees 
age 65 and over which shall be applicable for the succeeding calen-
dar year. Such actuarial rate shall be the amount the Secretary 
estimates to be necessary so that the aggregate amount for such 
calendar year with respect to those enrollees age 65 and older will 
equal one-half of the total of the benefits and administrative costs 
which he estimates will be payable from the Federal Supplementary 
Medical Insurance Trust Fund for services performed and related 
administrative costs incurred in such calendar year with respect to 
such enrollees. In calculating the monthly actuarial rate, the Secre-
tary shall include an appropriate amount for a contingency margin. 
(2) The monthly premium of each individual enrolled under this 
part for each month after December 1983 shall, except as provided 
in subsections (b) and (e), be the amount determined under para-
graph (3). 
"(3) The Secretary shall, during September of 1983 and of each 
year thereafter, determine and promulgate the monthly premium 
97 STAT. 170 
PUBLIC LAW 98-21—APR. 20, 1983 
applicable for individuals enrolled under this part for the succeeding 
calendar year. The monthly premium shall (except as otherwise 
provided in subsection (e)) be equal to the smaller of— 
"(A) the monthly actuarial rate for enrollees age 65 and over, 
determined according to paragraph (1) of this subsection, for 
that calendar year, or 
"(B) the monthly premium rate most recently promulgated by 
the Secretary under this paragraph, increased by a percentage 
determined as follows: The Secretary shall ascertain the pri-
42 use 415. 
mary insurance amount computed under section 215(a)(1), based 
upon average indexed monthly earnings of $900, that applied to 
individuals who became eligible for and entitled to old-age 
insurance benefits on November 1 of the year before the year of 
the promulgation. He shall increase the monthly premium rate 
by the same percentage by which that primary insurance 
amount is increased when, by reason of the law in effect at the 
time the promulgation is made, it is so computed to apply to 
those individuals for the following November 1. 
Whenever the Secretary promulgates the dollar amount which shall 
be applicable as the monthly premium for any period, he shall, at 
the time such promulgation is announced, issue a public statement 
setting forth the actuarial assumptions and bases employed by him 
in arriving at the amount of an adequate actuarial rate for enrollees 
age 65 and older as provided in paragraph (1) and the derivation of 
the dollar amounts specified in this paragraph. 
"(4) The Secretary shall also, during September of 1983 and of 
each year thereafter, determine the monthly actuarial rate for 
disabled enrollees under age 65 which shall be applicable for the 
succeeding calendar year. Such actuarial rate shall be the amount 
the Secretary estimates to be necessary so that the aggregate 
amount for such calendar year with respect to disabled enrollees 
under age 65 which will equal one-half of the total of the benefits 
and administrative costs which he estimates will be payable from 
the Federal Supplementary Medical Insurance Trust Fund for serv-
ices performed and related administrative costs incurred in such 
calendar year with respect to such enrollees. In calculating the 
monthly actuarial rate under this paragraph, the Secretary shall 
include an appropriate amount for a contingency margin.". 
42 use I395r. 
(2) Subsections (d), (e), (f), and (g) of section 1839 of such Act are 
redesignated as subsections Ot)), (c), (d), and (e), respectively. 
(3)(A) Section 1839(b) of such Act (as so redesignated) is amended 
by striking out "subsection (b), (c), or (g)" and inserting in lieu 
thereof "subsection (a) or (e)". 
(B) Section 1839(d) of such Act (as so redesignated) is amended by 
striking out "purposes of subsection (c)" and inserting in lieu thereof 
"purposes of subsection 0))"-
(C) Section 1839(e) of such Act (as so redesignated) is amended— 
(i) by striking out "(c)", "(c)(1)", and "(c)(3)" and inserting in 
lieu thereof "(a)", "(a)(1)", and "(a)(3)", respectively, 
(ii) by striking out "June 1983" in paragraph (1) and inserting 
in lieu thereof "December 1983", and 
(iii) by striking out "July 1985" and inserting in lieu thereof 
"January 1986" each place it appears. 
42 use i395i-2. 
(D) Section 1818(c) of such Act is amended by striking out "subsec-
tion (c) of section 1839" and inserting in lieu thereof "subsection (a) 
of section 1839". 
PUBLIC LAW 98-21—APR. 20, 1983 
97 STAT. 171 
(E) Section 1843(d)(1) of such Act is amended by striking out 
"without any increase under subsection (c) thereof and inserting in 
lieu thereof "without any increase under subsection (b) thereof. 
(F) Section 1844(a)(l)(A)(i) of such Act is amended— 
(i) by striking out "1839(cXl)" and inserting in lieu thereof 
"1839(a)(1)"; and 
(ii) by striking out "1839(c)(3) or 1839(g)" and inserting in lieu 
thereof "183&(a)(3) or 1839(e)". 
(G) Section 1844(a)(l)(B)(i) of such Act is amended— 
(i) by strikmg out "1839(c)(4)" and inserting in lieu thereof 
"1839(a)(4)"; and 
(ii) by striking out "1839(cK3) or 1839(g)" and inserting in lieu 
thereof "1839(a)(3) or 1839(e)". 
(H) Section 1876(a)(5) of such Act is amended— 
(i) in subparagraph (AKii), by striking out "1839(c)(1)" and 
inserting in lieu thereof "1839(aKl)"; and 
(ii) in subparagraph (B)(ii), by striking out "1839(c)(4)" and 
inserting in lieu thereof "1839(aX4)". 
(b) Section 1818(d)(2) of such Act is amended— 
(1) by strikmg out "during the last calendar quarter of each 
year, beginning in 1973," in the first sentence and inserting in 
lieu thereof "during the next to last calendar quarter of each 
year"; 
(2) by striking out "the 12-month period commencing July 1 of 
the next year" in the first sentence and inserting in lieu thereof 
"the following calendar year"; and 
(3) by striking out "for such next year" in the second sentence 
and inserting in lieu thereof "for that following calendar year". 
(c) The amendments made by this section shall apply to premiums 
for months beginning with January 1984, and for months after June 
1983 and before January 1984— 
(1) the monthly premiums under part A and under part B of 
title XVIII of the Social Security Act for individuals enrolled 
under each respective part shall be the monthly premium under 
that part for the month of June 1983, and 
(2) the amount of the Government contributions under section 
1844(a)(1) of such Act shall be computed on the basis of the 
actuarially adequate rate which would have been in effect 
under part B of title XVIII of such Act for such months without 
regard to the amendments made by this section, but using the 
amount of the premium in effect for the month of June 1983. 
42 use 1395v. 
42 use 1395w. 
42 use 1395mm. 
42 use 1395i-2. 
Effective date. 
42 use 1395r 
note. 
42 use 1395c, 
1395J. 
SECTION 1122 AMENDMENTS 
SEC. 607. (a) Section 1122(c) of the Social Security Act is amended 42 use i320a-i. 
by striking out "the Federal Hospital Insurance Trust Fund" and 
inserting "the general fund in the Treasury". 
(b)(1) Section 1122(g) of such Act is amended— 
(A) by striking out "$100,000" the first place it appears and 
inserting in lieu thereof "$600,000 (or such lesser amount as the 
State may establish)", and 
(B) by striking out "$100,000" the second place it appears and 
inserting in lieu thereof "the dollar amount specified in clause 
(1)". 
(2) Section 1861(z)(2) of such Act is amended by striking out 42 use I395x. 
"$100,000" and inserting m lieu thereof "$600,000 (or such lesser 
97 STAT. 172 
PUBLIC LAW 98-21—APR. 20, 1983 
amount as may be established by the State under section 1122(gXl) 
in which the hospital is located)". 
42 use I320a-i. 
(c) Section 1122 of such Act is amended by adding at the end 
thereof the following: 
"(j) A capital expenditure made by or on behalf of a health care 
facility shall not be subject to review pursuant to this section if 75 
percent of the patients who can reasonably be expected to use the 
service with respect to which the capital expenditure is made will be 
individuals enrolled in an eligible organization as defined in section 
1876(b), and if the Secretary determines that such capital expendi-
ture is for services and facilities which are needed by such organiza-
tion in order to operate efficiently and economically and which are 
not otherwise readily accessible to such organization because— 
"(1) the facilities do not provide common services at the same 
site (as usually provided by the organization), 
"(2) the facilities are not available under a contract of reason-
able duration, 
"(3) full and equal medical staff privil^es in the facilities are 
not available, 
"(4) arrangements with such facilities are not administra-
tively feasible, or 
"(5) the purchase of such services is more costly than if the 
organization provided the services directly.". 
42 use 1
3
9
5
X
. 
(d) Section 1861(zX2) of such Act is amended by inserting "(A)" 
after "(2)" and by adding at the end thereof the following new 
subparagraph: 
"(B) provides that such plan is submitted to the agency 
designated under section 1122(b), or if no such agency is desig-
nated, to the appropriate health planning agency in the State 
(but this subparagraph shall not apply in the case of a facility 
exempt from review under section 1122 by reason of section 
1122(j));". 
Approved April 20, 1983. 
LEGISLATIVE HISTORY—H.R. 1900 (S. 1): 
HOUSE REPORTS: No. 98-25, Pt. 1 (Comm. on Ways and Means) and No. 98-47 
(Comm. of Conference). 
SENATE REPORT No. 98-23 accompanying S. 1 (Comm. on Finance). 
CONGRESSIONAL RECORD, Vol. 129 (1983): 
Mar. 9, considered and passed House. 
Mar. 16-18, 21-23, considered and passed Senate, amended. 
Mar. 24, House and Senate agreed to conference report. 
WEEKLY COMPILATION OF PRESIDENTIAL DOCUMENTS, Vol. 19, No. 16 (1983): 
Apr. 20, Presidential statement.