98th Congress > House > Vote 569
Description: TO PASS H.R. 4170, A BILL PROVIDING FOR TAX REFORM IN ORDER TO RAISE $50 BILLION IN TAX REVENUE BY 1987. (MOTION PASSED)
Bill summary: (Conference report filed in House, H. Rept. 98-861)
Deficit Reduction Act of 1984 -
Division A
- Tax Reform Act of 1984 -
Title I: Tax Freeze; Tax Reforms Generally - Subtitle A: Deferral of Certain Tax Reductions
- Amends the Internal Revenue Code to defer from 1985 to 1987 the scheduled increase in the maximum amount of used property eligible for the investment tax credit. (Present law schedules an increase from $125,000 to $150,000 in 1985.)
Amends the Tax Equity and Fiscal Responsibility
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Act of 1982 to defer from 1984 to 1988 the effective date of special rules relating to the finance leasing of limited use property and fixed price purchase options. Exempts from such postponement of finance leasing rules: (1) up to $150,000,000 of a qualified lessee's automotive manufacturing property; and (2) property that is part of a coal-fired cogeneration facility for which certification and construction permit applications were filed on specified dates.
Freezes the maximum amount of personal property which businesses may elect to expense (in order to claim a tax deduction for such property) each year at $5,000 through 1987. Increases such limit to $7,500 for 1988 and 1989 and to $10,000 thereafter. (Present law increases such limit to $7,500 for 1984 and 1985 and to $10,000 thereafter.)
Freezes the limit on the income tax credit for employer contributions to an employee stock ownership plan (ESOP) at one-half of one percent of payroll.
Defers from 1986 to 1988 the scheduled indexing of the limits on contributions to, and benefits from, tax-qualified pension plans.
Defers from 1983 to 1988 the scheduled increase in the income tax exclusion for foreign earned income. Freezes the limit on the amount of such income which can be excluded at $80,000 until 1988. Increases such limit in $5,000 increments to $95,000 in 1990.
Defers from 1984 to 1988 the scheduled reduction in the maximum estate and gift tax. Freezes such rate at 55 percent through 1987. Reduces such rate to 50 percent in 1988 and thereafter.
Defers from 1984 to 1988 the scheduled reduction in the windfall profit tax rate on newly discovered oil. Freezes the rate of such tax at 22.5 percent through 1987. Reduces such rate to 20 percent in 1988, and 15 percent in 1989 and subsequent years.
Defers from 1985 to 1987 the termination date of the telephone excise tax.
Increases the excise tax on distilled spirits from $10.50 per proof gallon to $12.50 per proof gallon, effective on October 1, 1985. Revises rules for the payment of floor stocks taxes on distilled spirits. Requires the payment of the excise taxes on cigarettes and all alcohol products by means of electronic funds transfer to a Federal Reserve bank in the case of taxpayers whose gross tax liability was $5,000,000 or more during the preceding calendar year.
Subtitle B: Tax-Exempt Entity Leasing
- Denies property used by governments, tax-exempt foreign individuals, and other tax-exempt entities accelerated depreciation deductions. Requires that any deductions for depreciation of such property be calculated according to the straight line method. Exempts from such limitation short-term or casual leases of property and property used in an unrelated trade or business.
Denies the investment tax credit for property used by foreign governments and other foreign persons.
Denies the investment tax credit for rehabilitation expenditures for property which is financed by the proceeds of industrial development bonds.
States that the provisions of this Act shall be effective for property placed in service after May 23, 1983, with an exception for binding contracts and mass commuting vehicles financed by tax-exempt securities.
Requires that organizations electing exemption from rules relating to previously tax-exempt organizations must elect taxation of exempt arbitrage profits. Sets forth rules for the taxation of exempt arbitrage profits.
Sets forth transitional rules for specific projects involving: (1) substantial rehabilitation or new construction of buildings where a qualifying action occurred before November 1, 1983; and (2) the rehabilitation of certain educational facilities with respect to which there was substantial reliance on present law.
Sets forth special rules for the treatment of motor vehicle operating leases containing a terminal rental adjustment clause.
Subtitle C: Treatment of Bonds and Other Debt Instruments - Subpart A: Original Issue Discount
- Provides that any amounts received by the holder on retirement of any debt instrument shall be treated as amounts received in a taxable exchange.
Provides that original issue discount on debt instruments issued after July 1, 1982, shall be included in income on the basis of a constant interest rate. Sets forth rules for the determination of the amount of the original issue discount. Sets forth rules for the determination of issue price in the case of certain debt instruments issued for property.
Subpart B: Market Discount on Bonds
- Treats as ordinary income any gain on the disposition of any market discount bond to the extent it does not exceed the accrued market discount on such bond. Provides that the net interest expense with respect to any market discount bond shall be allowed as a tax deduction for the taxable year only to the extent that such expense exceeds the portion of the market discount allocable to the days of the taxable year on which such bond was held by the taxpayer.
Subpart C: Discount on Short-Term Obligations
- Requires the inclusion in gross income of the discount on certain short-term obligations. Requires the deferral of the net interest expense deduction allocable to the accrued discount on certain short-term obligations.
Subpart D: Miscellaneous Provisions
- Requires that any stripped bond or stripped coupon purchased after July 1, 1982, be treated as original issue discount bonds.
Denies capital gain treatment for gains on registration-required obligations which are not in registered form. Sets forth rules for the treatment of original issue discount on tax-exempt obligations.
Sets forth rules for the determination of interest on certain deferred payments. Exempts sales of farm land and principal residences costing less than $250,000 from such rules.
Subtitle D: Corporate Provisions
- Limits the income tax deduction for dividends received by a corporate shareholder which acquires another corporation to the extent such acquisition was debt financed. Sets forth the method for the calculation of such limit.
Requires the reduction in the basis of a corporate shareholder's stock if the corporation receives an extraordinary dividend with respect to any share of stock. Defines "extraordinary dividend" as any dividend with respect to any share of stock issued by a corporation to a corporation which has acquired the issuer by merger if the dividend equals or exceeds a specified percentage of the taxpayer's adjusted basis in such share of stock.
Requires the recognition of gain on distributions of appreciated property used to redeem stock to the extent the fair market value of such property exceeds its adjusted basis in the hands of the distributing corporation.
Extends the holding period for losses attributable to capital gain dividends of regulated investment companies or real estate investment trusts.
Denies an income tax deduction for certain expenses incurred in connection with short sales of stock. Provides for the nonrecognition of gain or loss by a corporation on options with respect to its stock.
Provides that the accumulated earnings tax applies to corporations which are not closely held.
Repeals the stock for debt exception for purposes of determining income from discharge of indebtedness.
Sets forth rules for the tax treatment of obligations having an original issue discount. Revises the definition of affiliated group for taxable years beginning after 1984 for purposes of eligibility to file consolidated returns.
Requires specified adjustments to the earnings and profits of a corporation to reflect economic gain and loss.
Provides for a two-year delay (from 1984 to 1986) in the application of the net operating loss rules added by the Tax Reform Act of 1976.
Requires a target corporation to distribute assets in a specified type of reorganization. Revises the definition of control for purposes of nondivisive reorganizations. Phases out graduated tax rates for large corporations having a taxable income in excess of $1,000,000 for any taxable year. Revises the definition of collapsible corporations.
Imposes restrictions on "golden parachute payments." Defines a "parachute payment" as any payment in the nature of compensation to specified individuals if such payment is contingent on a change in the ownership or effective control of a corporation or in the ownership of a substantial portion of its assets. Limits the amount of the income tax deduction which may be claimed for such payments. Sets forth the method of calculating such limit. Imposes a 20 percent tax on the recipient of any parachute payment in excess of the deductible amount.
Increases the reduction in certain corporate tax preferences from 15 percent to 20 percent.
Subtitle E: Partnership Provisions
- Sets forth rules for partnership allocations with respect to contributed property and for the determination of distributive shares when a partner's interest changes.
Treats as a sale of property any payments to partners for property or certain services.
Treats as ordinary income or ordinary loss any gain or loss recognized by a partnership on the disposition of property which: (1) was contributed to the partnership by a partner; and (2) was an unrealized receivable in the hands of such partner immediately before such contribution.
Provides that for purposes of determining the amount of gain recognized by a corporation on a distribution, any distribution of an interest in a partnership or trust shall be treated as a distribution of the corporation's proportionate share of the recognition of such partnership or trust.
Provides that for purposes of determining whether property of a partnership is an unrealized receivable or an inventory item, such partnership shall be treated as owning its proportionate share of the property of any other partnership in which it is a partner.
Provides for nonrecognition of gain or loss from exchanges solely in kind.
Subtitle F: Trust Provisions
- Provides that the basis of any property received by a beneficiary in a distribution from an estate or trust shall be the adjusted basis of such property in the hands of the estate or trust immediately before the distribution adjusted for any gain or loss recognized to the estate or trust.
Sets forth rules for the treatment of multiple trusts.
Subtitle G: Accounting Changes
- Provides that for purposes of determining whether an amount has been incurred with respect to any item during any taxable year, certain amounts shall not be treated as incurred before economic performance. Prohibits tax shelters from deducting items earlier than when economic performance occurs. Provides for a ten year net operating loss carryback period for deferred statutory or tort liability deductions.
Sets forth special rules for the establishment of reserve funds for: (1) mining and solid waste reclamation and closing costs; and (2) nuclear decommissioning costs. Sets forth rules for the tax treatment of deferred payments for the use of property or services.
Requires corporations to capitalize construction period interest and taxes for residential real property (other than low-income housing). Requires taxpayers to treat business or trade start-up expenditures as deferred expenses. Allows the amortization of such expenditures over a period of not less than 60 months as may be selected by the taxpayer.
Provides that LIFO conformity rules (relating to last-in, first-out inventories) shall be applied on a controlled group basis for all members of the same group of financially related corporations.
Subtitle H: Provisions Relating to Tax Straddles
- Repeals the exception from tax straddle rules for stock options and certain stock. Extends certain rules relating to regulated futures contracts marked to market to: (1) regulated futures contracts; (2) foreign currency contracts; (3) nonequity options; and (4) dealer equity options.
Sets forth limitations on losses from hedging transactions. Sets forth the method of calculating such limitations.
Requires the recognition of gain or loss with respect to options on regulated futures contracts and cash settlement options. Specifies that wash sale rules shall apply to losses on certain short sales of stocks or securities.
Subtitle I: Depreciation
- Increases the recovery period for certain real property from 15 years to 18 years. Sets forth special rules for low-income housing property and transitional rules for property placed in service before a specified date. Provides for the recognition of recapture income in the year of disposition in the case of installment sales of property.
Allows an election to treat sound recordings as three-year recovery property. Disallows the treatment of films and video tapes as recovery.
Subtitle J: Foreign Provisions
-Treats specified types of income as derived from United States sources for purposes of the limitation on the foreign tax credit. Treats certain amounts attributable to United States-owned foreign corporations as interest for purposes of the limitation on the foreign tax credit.
Treats any income arising from a trade or service receivable acquired directly or indirectly by a foreign corporation from a related person as if it were interest on a loan to the obligor under the receivable.
Treats all transportation income attributable to transportation which begins and ends in the United States as derived from sources within the United States.
Treats as income derived from sources within the United States any distributions received by a United States-owned foreign corporation from the earning and profits of a corporation more than ten percent of which is derived from sources within the United States or is effectively connected with the conduct of trade or business within the United States.
Requires the allocation to income from sources within the United States of all amounts allowable as a deduction for qualified research and experimental expenditures.
Repeals the 30 percent tax on interest received by foreigners on certain portfolio investments. Repeals the tax on interest of foreign corporations received from portfolio debt investments. Sets forth rules for the treatment of United States source original issue discount in the case of foreign persons. Requires the withholding of tax on dispositions of United States real property interests by a foreign person. Requires the reporting of direct investments in United States real property interests held by foreign persons.
Exempts from treatment as a foreign corporation any corporation created or organized in Guam or the Virgin Islands if: (1) less than 25 percent of the stock of such organization is owned by foreign persons; and (2) at least 20 percent of the gross income is derived from sources within Guam or the Virgin Islands.
Sets forth rules for the taxation of certain transfers of property outside the United States. Requires the reporting by United States persons of transfers of property to a foreign corporation in specified types of exchanges.
Revises attribution of ownership rules concerning family members owning stock of a foreign personal holding company. Revises the definition of foreign investment company to include corporations trading in commodities or futures or forward contracts or options. Applies rules relating to collapsible corporations to foreign corporations.
Redefines "resident alien" for U.S. tax purposes. Treats any individual as a resident alien if such individual: (1) is a lawful permanent resident of the United States at any time during the calendar year; or (2) is present in the United States for a substantial period of time (at least 183 days during a three year period weighted toward the present year - "substantial presence test"). Exempts an individual from the application of the substantial presence test if such individual is present in the United States for fewer than 183 days and establishes that he or she has a closer connection with a foreign country than with the United States. Treats foreign government-related individuals, teachers or trainees, or students as nonresident aliens even if they meet the substantial presence test criteria. Authorizes the Secretary to require aliens who claim exemption from the substantial presence test to file statements explaining the basis for their exemption.
Prohibits a married couple, both of whom are nonresident aliens, from using community property laws to split the U.S. earned income of one spouse for purposes of computing U.S. tax liability.
Subtitle K: Reporting, Penalty, and Other Provisions
- Requires the registration of tax shelters by tax shelter organizers. Requires organizers and sellers of potentially abusive tax shelters to maintain lists of investors in such tax shelters. Sets forth penalties for failure to maintain such lists. Increases the penalty for promoting abusive tax shelters from ten percent to 20 percent of the gross income derived from such tax shelter. Increases the rate of interest on substantial underpayments attributable to certain tax motivated transactions.
Requires the reporting of the receipt of $600 or more of mortgage interest. Requires the reporting of cash received in a trade or business in amounts of more than $10,000.
Provides that regulations may require reports relating to individual retirement accounts to identify years to which contributions relate. Increases from $10 to $50 the penalty for failure to file reports on individual retirement accounts.
Requires the reporting of the acquisition of property due to foreclosure or abandonment of security.
Requires the reporting of exchanges of partnership interests where unrealized receivables are involved. Requires brokers to furnish statements to customers where substitute dividend payments are made.
Exempts non-itemizing taxpayers from the provisions requiring the reporting of State and local refunds. Requires the furnishing of taxpayer indentification numbers under backup withholding.
Requires the Secretary to prescribe regulations requiring the substantiation of charitable contributions of property valued in excess of $5,000. Requires the reporting of dispositions of donated property within two years after its receipt.
Imposes penalties in cases of a valuation understatement for purposes of estate or gift taxes. Sets forth the method of calculating such penalty.
Authorizes the Secretary to disregard appraisals by persons penalized for aiding in understatements of tax liability. Requires that deposits of taxes in excess of $20,000 by large employers must be made by due date. (Present law allows mailing of deposits two days prior to the due date.)
Imposes interest on penalties for: (1) failure to file; (2) gross valuation overstatement; (3) valuation understatement for purposes of estate or gift taxes; and (4) substantial understatement. Provides that the criminal penalty for supplying false or fraudulent withholding information or willfully failing to supply information is in addition to (rather than in lieu of) any other penalty. Applies the penalty for frivolous proceedings to proceedings pending before the Tax Court.
Provides that if a taxpayer does not request a change in accounting methods, the absence of the Secretary's consent to a change cannot be asserted as a defense to any penalty or addition to tax. Provides that the transfer of venue in a criminal tax prosecution shall be required only when the sole basis for venue in a particular district is receipt by the Internal Revenue Service of mailed materials. Extends the statute of limitations with respect to certain expenditures relating to contributions in aid of construction.
Subtitle L: Miscellaneous Provisions
- Revises rules concerning the inclusion in income of certain tax benefit items. Sets forth rules for the tax treatment of loans which are classified as gift loans and demand loans.
Decreases the base period for eligibility for income averaging from four taxable years to three taxable years. Increases the percentage of average base income to be taken into account for purposes of income averaging from 120 percent to 140 percent.
Disallows an income tax deduction for any loss from the sale or exchange of property between certain related parties.
Repeals the exemption from Federal tax of the Federal Home Loan Mortgage Corporation. Sets forth special rules relating to sales or exchanges of certain economic interests in coal between related parties.
Limits the amount of depreciation and the investment tax credit allowable for luxury automobiles. Sets forth the method of calculating such limit.
Title II: Life Insurance Provisions - Subtitle A: Taxation of Life Insurance Companies
- Sets the rate of tax on a life insurance company at the corporate rate on its life insurance company taxable income (LICTI). Sets forth an alternative tax in the case of capital gains. Defines life insurance company taxable income as life insurance gross income reduced by life insurance deductions.
Defines life insurance gross income as the sum of: (1) premiums; (2) decreases in certain reserves; and (3) other amounts generally includible by a taxpayer in gross income. Allows three types of deductions: (1) general life insurance deductions; (2) the special life insurance deduction; and (3) the small life insurance company deduction. Sets forth definitions and special rules for each type of deduction. Sets forth rules for the calculation of net increases and decreases in reserves.
Requires life insurance companies to use either the accrual method of accounting or a method permitted under regulations which combines an accrual method with another recognized method. Sets forth rules for the amortization of premium and accrual of discount. Sets forth rules for the computation of a company's share and the policyholders' share of investment income.
Sets forth rules for the tax treatment of foreign life insurance companies. Requires an adjustment to LICTI where a required surplus held in the United States is less than a specified amount. Sets forth rules for the tax treatment of contiguous country branches of domestic life insurance companies.
Provides that LICTI which has an existing policyholders surplus account shall be increased by any direct or indirect distribution to shareholders from such account.
Defines "life insurance company" as an insurance company which is engaged in the business of issuing life insurance and annuity contracts or noncancellable contracts of health and life insurance if its life insurance reserves plus unearned premiums and unpaid losses comprise more than 50 percent of its total reserves.
Sets forth rules for the tax treatment of variable contracts. Sets forth rules relating to capital gains and losses of a life insurance company.
Sets forth the effective date for the provisions of this Act. Provides transitional rules.
Subtitle B: Taxation of Life Insurance Products
- Redefines "life insurance contract" for purposes of the Internal Revenue Code. Defines such a contract as any contract which is a life insurance contract under applicable State or foreign law but only if the contract meets either of two alternatives: (1) a cash value accumulation test; or (2) a test consisting of a guideline premium requirement and a cash value corridor requirement. Specifies the requirements for each such test. Sets forth rules for contracts not meeting the life insurance definition. Sets forth transitional rules.
Treats as distributed to a contract holder any amount of an annuity contract held by an individual who dies before the annuity starting date. Exempts any such amount from the five-percent penalty tax on a premature distribution from an annuity.
Extends to former employees and key employees the limitations on group-term life insurance purchased for employees.
Subtitle C: Studies
- Requires the Secretary to report annually to specified committees of the Congress on the revenues received by this Act and to compare the amount of such revenue and the amount anticipated by reason of changes made by the Tax Equity and Fiscal Responsibility Act of 1982 and this Act.
Requires the Secretary to make annual reports in the years 1986, 1987, 1988, and 1989 concerning the impact of this Act on specified segments and products of the life insurance industry.
Title III: Revision of Private Foundation Provisions
- Increases from 20 percent to 30 percent the percentage limitation for individual contributions to private foundations. Allows a five year carryover of excess contributions to private foundations. Allows a deduction for the full fair market value of certain stock contributed to private foundations where market quotations for such stock are readily available.
Exempts from the excise tax on investment income certain operating foundations. Reduces from two percent to one percent the excise tax on investment income where a private foundation meets certain distribution requirements. Limits the amount of certain administrative expenses which may be taken into account as qualifying distributions for purposes of the tax on failure to distribute income.
Authorizes the Secretary of the Treasury to abate first-tier private foundation taxes (other than the tax on self-dealing) if it is established that the violation of private foundation rules was due to reasonable cause and not to willful neglect and has been corrected within the appropriate correction period.
Allows a five year extension of the requirement to dispose of certain excess holdings attributable to large gifts and bequests. Disregards any decrease in percentage holdings attributable to issuance of stock where the decrease is two percent or less.
Requires the aggregation of stock holdings of a private foundation and disqualified persons in applying the 95 percent ownership test. Grants a five year period to dispose of excess holdings resulting from certain acquisitions by disqualified persons.
Provides that the conducting of certain games of chance by a nonprofit organization shall not be treated as an unrelated trade or business. Provides that the penalty tax on self-dealing shall not apply to certain stock purchases. Provides that a person shall cease to be a substantial contributor after ten years with no connection to a foundation.
Title IV: Tax Simplification - Subtitle A: Revision and Simplification of Estimated Income Tax for Individuals
- Revises provisions dealing with the quarterly payment of estimated tax by individuals. Establishes the amount of the penalty for underpayment of estimated tax as the amount of the underpayment for the period of underpayment, plus interest on such amount. Revises the schedule for the payment of estimated tax installments. Specifies that the amount of the required annual estimated tax payment shall be the lesser of 80 percent of the current tax shown on the taxpayer's return or 100 percent of the preceding year's tax liability. Permits lower estimated tax payments if the taxpayer can show that the installment payments made over the year were adequate for each quarter based on an annualized income concept.
Exempts a taxpayer from an estimated tax penalty: (1) where the tax liability is less than $500; (2) where there is no tax liability for the preceding taxable year; or (3) where there is reasonable cause for the underpayment. Exempts a taxpayer from a penalty for underpayment of estimated tax for the fourth quarter if such taxpayer files on or before January 31 of the following taxable year a return and pays any tax liability in full (March 1 for farmers and fishermen).
Permits farmers and fishermen to make only one annual estimated tax payment on January 15 of each year. Lowers the percentage of the required estimated tax payment for such farmers and fishermen to 66-2/3 percent of the tax shown on their returns.
Requires the Secretary of the Treasury to prescribe regulations to carry out the provisions of this title.
Repeals provisions of the Internal Revenue Code dealing with the declaration of estimated tax by individuals, the time for filing declarations of estimated tax, and installment payments of estimated income tax by individuals.
Requires that the crediting of a prior year overpayment of income tax against estimated tax shall be determined without regard to a specified Revenue Ruling.
Subtitle B: Domestic Relations
- Amends the Internal Revenue Code to provide for the nonrecognition of gain from the transfer of property to a spouse or to a former spouse, if such transfer is incident to a divorce. Treats such transfer as a gift for purposes of determining the spouse's basis in such property (same basis as transferor spouse). Requires that any transfer of property under this provision occur within one year after the marriage ceases or be related to the cessation of the marriage.
Redefines "alimony or separate maintenance payments" for purposes of determining whether such amounts should be included in gross income. Eliminates requirements that alimony payments must be made on account of a marital obligation imposed under local law and that such payments be made on a periodic basis.
Requires that alimony payments be made in cash to a spouse under a divorce or separation agreement. Specifies that the divorce or separation agreement may indicate whether a payment to a spouse is alimony. Prohibits the characterization of a payment to a spouse as alimony if it is made for a transfer of property by the payee spouse or if both spouses are members of the same household at the time of payment. Prohibits payments of alimony to the estate of a deceased spouse. Characterizes a payment to a spouse as alimony if such payment is one of a series of cash payments where it is reasonable to expect that 50 percent of such payments will be made more than one year after the date of the first payment.
Requires a spouse paying alimony to furnish the Internal Revenue Service with the taxpayer identification number of the spouse receiving alimony payments. Imposes a $50 fine for each failure to provide such information.
Allocates the personal tax exemption for a dependent child of divorced parents to the parent having custody unless such custodial parent signs a written declaration that he or she will not claim the child as a dependent. Requires that such written declaration be attached to the income tax return of the noncustodial parent claiming the tax exemption. Treats a child of divorced parents as the dependent child of either parent for purposes of the medical expense deduction. Applies these tax rules to taxable years beginning after 1983. Permits a noncustodial parent to continue to claim a tax exemption for a dependent child in cases where such parent entered into an agreement with the custodial parent prior to January 1, 1984, which allocated the exemption to the noncustodial parent, and the noncustodial parent contributes at least $600 to the child's support for the year.
Revises requirements relating to the exemption from liability of spouses who have no knowledge of substantial understatements of tax liability of their spouses with respect to jointly reported items of income and community property.
Allows an estate tax deduction for transfers of property in settlement of marital or property rights not subject to the gift tax.
Provides that income from sheltered workshops shall not be taken into account for purposes of determining the dependency exemption.
Subtitle C: Revision of At-Risk Rules
- Amends the Internal Revenue Code to revise the at-risk rules on the investment tax credit. Reduces the credit base of property eligible for investment tax credit treatment by the amount of nonqualified nonrecourse financing with respect to such property. Defines "nonqualified nonrecourse financing" (financing in which the taxpayer is protected against loss) as any nonrecourse financing which is not qualified commercial financing. Defines "qualified commercial financing" as any financing with respect to property if: (1) such property is not acquired from a related party (family, controlled corporations, etc.); (2) the amount the nonrecourse financing does not exceed 80 percent of the credit base of the property; and (3) such financing is obtained from certain business lenders or from any Federal, State, or local government. Sets forth special rules for the treatment of S corporation shareholders and partners with respect to the at-risk rules. Provides rules for the treatment of subsequent increases and decreases in nonqualified nonrecourse financing with respect to investment tax credit property.
Excludes the active businesses of qualified C corporations from at-risk rules.
Subtitle D: Miscellaneous Treasury Administrative Provisions
- Amends the Internal Revenue Code to require the submission of reports on possessions corporations on a biennial basis. Requires the submission of the international boycott report every four years. Revises requirements for determining which taxpayers will be included in the high income taxpayer report.
Repeals the $1,000,000 limitation on the working capital fund in the Department of the Treasury. Increases the limitation on the real property redemption revolving fund to $10,000,000 (such fund is used by the Internal Revenue Service in exercising redemption rights upon sale of property on which the IRS has a lien). Removes the $1,000,000 limitation on special authority to dispose of obligations. Authorizes the Secretary to accept gifts and bequests of property for purposes of facilitating the work of the Department of the Treasury.
Extends the period of court review of IRS jeopardy assessments in cases where the IRS has not been properly notified of court proceedings.
Extends the period of time during which additional tax shown on an amended return may be assessed.
Allows the placement of a lien on guaranteed drafts issued by financial institutions. Allows the disclosure of windfall profit tax information to State tax agencies.
Repeals provisions requiring approval of a change of financial reporting method for the investment tax credit.
Repeals the occupational tax on the manufacturers of stills and condensers. Requires notice of the manufacture and set-up of stills. Allows the disclosure of alcohol fuel producers to administrators of State alcohol laws. Repeals the stamp requirement for distilled spirits. Provides that cooking wine may be fortified using distilled spirits withdrawn from bonded premises free of tax or without payment of tax.
Subtitle E: Tax Court Provisions
- Increases the jurisdictional limit for small tax cases from $5,000 to $10,000.
Increases the maximum annuities receivable by dependent survivors of deceased Tax Court judges from $900 per year per family to $4,644 per year per family.
Specifies types of cases which the chief judge of the Tax Court may assign to commissioners, subject to review and final decision by a Tax Court judge. Designates commissioners of the Tax Court as special trial judges.
Empowers the Tax Court to prevent the disclosure of trade secrets and other confidential information.
Subtitle F: Simplification of Income Tax Credits
- Revises provisions of the Internal Revenue Code relating to income tax credits. Groups all credits into nonrefundable personal credits (allowable first against tax liability), foreign tax credit, orphan drug credit and fuel production credit, nonrefundable credits, and business related credits. Combines business credits and the investment tax credit into one general business credit. Establishes the general business credit at 100 percent of the first $25,000 of tax liability and 85 percent of the remaining tax liability. Permits a three year carryback and a 15 year carryforward of unused business credits.
Subtitle G: Miscellaneous Simplification Provisions
- Extends ordinary loss treatment to losses incurred on the disposal of preferred stock of a small business corporation. (Present law restricts such treatment to common stock.) Allows a medical care income tax deduction for lodging away from home where such lodging is primarily for and essential to medical care.
Subtitle H: Repeal of Certain Obsolete Provisions
- Repeals provisions of the Internal Revenue Code relating to qualified bond purchase plans and retirement bonds with respect to bonds issued after December 31, 1983. Repeals rules relating to gains from the disposition of property used in farming where farm losses offset nonfarm income.
Title V: Employee Benefit Provisions - Subtitle A: Welfare Benefit Plans
- Revises rules for determining the timing and the amount of the employer's deduction for a contribution to a funded welfare benefit plan. Limits the amount of the deductions allowed for welfare benefit plans to the qualified costs for the taxable year. Defines "qualified costs" as the employer's qualified direct cost for the taxable year, plus any addition to a qualified asset account for the taxable year. Provides that the cost of any child care facility may be amortized over a 60 month period in determining the direct costs of the employer.
Provides that a "qualified asset account" consists of assets set aside to provide payment of: (1) disability benefits; (2) medical benefits; (3) SUB or severance pay benefits; and (4) life insurance benefits. Establishes rules relating to the limitation of additions to the qualified asset account. Sets forth special rules for the operating of the qualified asset account.
Imposes a penalty tax on an employer who provides a disqualified benefit under a welfare benefit plan maintained by the employer.
Sets forth rules relating to the treatment of unfunded deferred benefits.
Establishes additional requirements for the tax-exempt status of voluntary employees' beneficiary associations.
Subtitle B: Provisions Relating to Pension Plans
- Requires a qualified pension plan to distribute the entire interest of the employee: (1) no later than the required commencement date (April 1 of the calendar year following the year in which the employee attains age 70 1/2 or the employee retires, whichever is later); or (2) alternatively, beginning no later than the required commencement date over the life of the employee, the lives of the employee and a designated beneficiary, a period not extending beyond the life expectancy of the employee, or a period not extending beyond the life expectancy of the employee and a designated beneficiary. Requires the distribution of the employee's entire interest in the plan to employees who are five percent owners when they attain age 70 1/2 even though the employee might not have retired.
Provides rules for distributions from pension plans where the employee dies before the entire interest in the plan is distributed.
Provides for a tax-free rollover to an individual retirement account of a distribution of at least 50 percent of the balance to the credit of an employee under a qualified plan or tax-sheltered annuity contract. Provides that any subsequent distribution from the same plan is not eligible for the special ten-year income averaging or long-term capital gain treatment accorded lump sum distributions. Does not require the aggregating of similar plans of an employer for applying the 50 percent test.
Provides that if substantially all of the accrued benefits under a qualified pension plan are derived from employee contributions, then distributions under the plan will be considered to be income until all income has been withdrawn. Provides that if an employee receives (directly or indirectly) any amount as a loan under the plan, the amount of the loan shall be treated as a withdrawal from the plan.
Makes certain changes in the rules governing the top-heavy plans. Applies the ten-percent tax on distributions prior to a certain age for key employees to five-percent owners of the employer without regard to whether the plan is top-heavy.
Repeals the separate $100,000 estate tax exclusion for benefits under qualified plans, tax-sheltered annuities, individual retirement accounts, and military retirement plans.
Provides that, in determining whether a group of employers constitutes an affiliated service group, more comprehensive attribution-of-ownership rules shall be provided to include "brother-sister" relationships. Requires the Secretary of the Treasury to issue regulations to prevent the avoidance of any employee benefit requirement to which the employee leasing provisions apply through the use of employee leasing or other arrangements.
Modifies the rules relating to the cash-or-deferred arrangement whereby highly compensated employees may elect to defer (and exclude from current gross income) certain amounts.
Provides that contributions allocated to an individual medical account which is a part of a defined benefit plan must be treated as an annual addition to a defined contribution plan with respect to a participant. Requires a plan to maintain a medical benefit account for each key employee.
Provides that alimony will be treated as income for purposes of determining the deduction to an individual retirement account.
Subtitle C: Tax Treatment of Fringe Benefits
- Excludes from gross income any fringe benefit which qualifies as: (1) a no-additional-cost service; (2) a qualified employee discount; (3) a working condition fringe; and (4) a de minimis fringe. Provides definitions and sets forth rules for such tax exclusion. Sets forth rules relating to cafeteria plans for employees. Imposes a tax on certain fringe benefits provided by the employer.
Excludes from gross income reductions in tuition provided by an employer to employees.
Subtitle D: Employee Stock Ownership Plans
- Provides for the nonrecognition of gain by a taxpayer for the sale of stock to an employee stock ownership plan or a worker-owned cooperative if the taxpayer acquires qualified replacement property. Requires that immediately after the sale the employee stock ownership plan or the cooperative must own at least 30 percent of the total value of the qualified securities outstanding as of such time. Sets forth special rules and definitions relating to the nonrecognition of gain provisions.
Permits a corporation to deduct the amount of any dividend paid in cash by such corporation during the taxable year with respect to the stock of such corporation if: (1) such stock is held on the record date for the dividend by a tax credit employee stock ownership plan which is maintained by such corporation or by any other corporation that is a member of a controlled group of corporations that includes such corporation; and (2) the dividend is paid in cash to the participants in the plan, or the dividend is paid to the plan and is distributed in cash to the participants. Denies the partial exclusion of dividends which are deductible under this provision. Provides for no withholding of tax on distributions of dividends pursuant to these provisions.
Permits a bank, an insurance company, or a corporation actively engaged in the business of lending money to exclude 50 percent of the interest received with respect to a securities acquisition loan. Defines a "securities acquisition loan" to mean any loan to a corporation or to an employee stock ownership plan, to the extent that the proceeds are used to acquire employer securities.
Permits an employee stock ownership plan to assume the liability of a decedent's estate for estate taxes in return for a transfer from the estate to such a plan of stock of an equal value, provided the sponsor company guarantees payment of the tax and agrees to pay such tax over a period of years. Requires the executor of the estate for which the employee stock ownership plan agrees to assume estate tax liability to elect the application of this provision by the time prescribed for filing the estate tax return.
Imposes a ten percent excise tax on the disposition of stock by an employee stock ownership plan or worker- owned cooperative if such stock was acquired within three years as a result of acquisition of such stock from a taxpayer who was allowed nonrecognition treatment on the gain from the sale of the stock. Sets forth special rules and definitions.
Subtitle E: Miscellaneous
- Permits transfers of certain pension plan distributions received during 1976 and 1977 into an individual retirement account to be treated as a qualifying rollover distribution, and therefore as not includible in the income of the individual.
Provides that a partial termination of a qualified pension plan does not occur, in the case of a turnover of employees under a plan in the State of Alaska occurring between December 31, 1975, and January 1, 1980, in connection with the completion of the Trans-Alaskan Oil Pipeline construction project, if certain requirements are met.
Provides that an amount is not required to be distributed under the usual rules for qualified pension plans and individual retirement accounts to the extent that the amounts are held by an insurer that, on March 15, 1984, is engaged in a rehabilitation proceeding under applicable State insurance law. Limits the time for the application of these provisions.
Extends the period for making and repaying a qualified refunding loan from a qualified plan to January 1, 1985, with respect to individuals who are not key employees, without regard to whether the plan is top-heavy.
Revises the incentive stock option rules.
Provides that, in the case of any transfer of property in connection with the performance of services after June 30, 1976, and on or before November 18, 1982, the election to include in income the difference between the fair market value of the property and the amount paid for it may be made with the income tax return for the first taxable year ending after the date of enactment of this Act, if certain conditions are met.
Treats employers and employee benefit associations as related persons for purposes of determining gain from the sale of property between related taxpayers.
Eliminates the retroactive application of amendments made by the Multiemployer Pension Plan Amendments Act of 1980.
Sets forth rules relating to the pension plan rights of employees involved in the divestiture of American Telephone and Telegraph and its subsidiaries. Provides that in case of any change in employment on or after January 1, 1985, by a covered employee, the recognition of service credit and the enforcement of such recognition shall be governed in the same manner and to the same extent as provided under the divestiture interchange agreement for a change in employment by a covered employee during the calendar year 1984.
Requires the Secretary of the Treasury to make a study and report to Congress concerning the problems relating to the use of employee benefit plans for the provision of benefits to current and retired employees, including a study of the need for participation, vesting, and funding standards.
Title VI: Tax-Exempt Bond Provisions - Subtitle A: Mortgage Subsidy Bonds
- Extends the tax exemption for interest on qualified mortgage bonds issued prior to January 1, 1988. (Present law limits such exclusion to bonds issued prior to January 1, 1983.) Sets forth reporting requirements for issuers of such bonds, including the extent to which the proceeds were made available to low-income individuals. Requires a State official to certify that the mortgage subsidy bonds issued meet the limitations on the aggregate amount of mortgage subsidy bonds issued during the calendar year. Requires the submission of an annual report which states the housing, development, and income distribution policies in issuing mortgage subsidy bonds and mortgage credit certificates.
Requires the issuers of mortgage subsidy bonds to submit an annual report to the Department of the Treasury which states the policy of the issuer in distributing proceeds of qualified mortgage bonds and mortgage credit certificates and evaluates the performance of the issuer's program relative to the congressional intent.
Limits the authority to issue qualified veterans' mortgage bonds to programs that issued such bonds before June 22, 1984. Limits loans made with the proceeds of qualified veterans' mortgage bonds issued after June 22, 1984, to veterans who served in active duty for any period before 1977. Provides that application for a loan made with the proceeds of qualified mortgage bonds must be made before the later of the date which is 30 years from the date of discharge from military service or January 31, 1985.
Allows State and local governments to elect, for any calendar year beginning after 1983, to exchange all or part of their qualified mortgage bond authority for authority to issue mortgage credit certificates (MCCs) to individuals. Allows individuals who hold such MCCs a nonrefundable Federal income tax credit for not more than 50 percent (but not less than ten percent) of interest on indebtedness incurred to finance the acquisition (or qualified rehabilitation or improvement) of qualified principal residences. Sets forth definitions, special rules, and requirements for the administration of a MCC program.
Grants authority to the Federal Financing Bank to make cash flow loans to the State Housing Agency of Oregon.
Subtitle B: Private Activity Bonds
- Imposes a ceiling on the maximum amount of industrial development bonds (IDBs) and student loan bonds that each State may issue during any calendar year. Sets the amount of such ceiling at $150 for every individual who is a resident of the State or $200,000,000, whichever is greater. Sets forth rules for the allocation of such limitation among the various governmental units of the State.
Denies the tax exemption for interest on certain obligations if the obligation is federally guaranteed. Sets forth definitions, special rules, and certain exceptions to such denial.
Restricts to $40,000,000 the amount of small issue IDBs that can be issued for a particular beneficiary of IDBs. Extends mortgage subsidy bond arbitrage rules to industrial development bonds and student loan bonds. Provides that a specified State permanent university fund does not violate the arbitrage restrictions.
Provides that tax-exempt bonds may be used to make loans or finance loans for qualified student loans. Sets forth definitions, special rules, and certain exceptions for student loans. Requires the Comptroller General and the Congressional Budget Office to conduct studies of the appropriate role of tax-exempt bonds which are issued in connection with the guaranteed student loan program and the appropriate arbitrage rules for such bonds.
Denies the tax-exempt status for consumer loan bonds. Defines "consumer loan bonds" as any obligation which is issued as part of an issue all or a significant portion of the proceeds of which are reasonably expected to be used directly or indirectly to make or finance loans to persons who are not exempt persons. Sets forth certain rules and exceptions.
Provides that IDBs cannot be used for the purchase or acquisition of land or existing facilities. Exempts from such prohibition: (1) the substantial rehabilitation of existing facilities; and (2) the acquisition of farm land by a first time farmer.
Denies the tax exemption on interest of an IDB if any protion of the proceeds of the IDB are to be used to provide any airplane, skybox, or other private luxury box, any facility primarily used for gambling, or any store the principal business of which is the sale of alcoholic beverages for consumption off premises.
Extends certain rules relating to tax-exempt obligations to bonds which are described in Federal laws other than the Internal Revenue Code.
Provides that obligations issued by certain public utilities shall be treated as tax-exempt industrial development bonds. Treats obligations of certain railroads as industrial development bonds.
Extends the small issue IDB tax exemption only with respect to bonds used to finance manufacturing facilities issued on or before December 31, 1988.
Subtitle C: Miscellaneous Provisions
- Provides that nothing in any provision of law exempting property from taxation shall exempt the transfer of such property from Federal estate, gift, and generation-skipping transfer taxes.
Requires the taxpayer to report the transfer of public housing bonds occurring after December 31, 1983, and before June 19, 1984, to allow the determination of the tax and interest due if it is ultimately determined that such transfers are subject to estate, gift, or generation-skipping tax.
Treats a qualified educational organization as a State governmental unit for purposes of tax-exempt status of obligations of the educational organization, but only with respect to a trade or business carried on by such organization which is not an unrelated trade or business.
Provides an exception to the local furnishing rules of electric utilities for purposes of tax-exempt financing of facilities for certain local utilities.
Provides that a utility shall be considered a local furnishing utility where the facility was initially authorized by the Federal Government.
Provides for a review and the filing of a report by the Department of the Treasury with respect to any adverse determinations by the Department of Education regarding issuance of tax-exempt student loan bonds.
Provides that the Virgin Islands and American Samoa shall have authority to issue industrial development bonds and the District of Columbia housing finance agency shall have the authority to issue industrial development bonds and mortgage subsidy bonds.
Sets forth a special arbitrage rule relating to certain securities or obligations.
Title VII: Technical Corrections - Subtitle A: Amendments Related to the Tax Equity and Fiscal Responsibility Act of 1982
- Makes technical corrections to provisions relating to individual taxpayers. Revises the definition of regular tax. Limits the special election for intangible drilling and development costs to wells located in the United States. Revises the newspaper and periodical circulation expense tax preference provisions by providing a three-year amortization period (rather than the ten-year period) for individuals to amortize circulation expenses. Revises the formula for determination of the deduction for casualty losses.
Makes technical corrections to provisions primarily relating to businesses. Limits the investment tax credit allowed for mineral exploration and development costs to deposits located in the United States. Revises rules relating to corporate preference items relating to capital gains and cost depletion. Revises the definition of interest on debt to carry tax-exempt obligations acquired after December 31, 1982. Requires the adjustment in the bases of an interest in a partnership or an S corporation to take into account the amount of any investment tax credit taken. Includes real property held by a cooperative housing corporation and used for dwelling purposes as property not eligible for the real property construction period income tax deduction. Sets forth rules for passthru entities in the case of corporate distributions. Redefines "purchase" for purposes of certain stock purchases which are treated as asset acquisitions. Provides that rules relating to the recognition of gain or loss on sales or exchanges in connection with certain liquidations shall apply where a target corporation has adopted a plan for complete liquidation.
Authorizes the Secretary of the Treasury to disallow deductions, credits, or other allowances in the case of certain liquidations after qualified stock purchases if the principal purpose of such liquidation is the evasion or avoidance of income tax.
Sets forth rules for determining the basis of assets of a target corporation involved in a corporate acquisition. Sets forth rules for determining the amount constituting dividends in the case of redemptions through the use of related corporations. Provides that any assumption of a liability shall not be treated as a distribution of property in the case of distributions incident to the formation of bank holding companies.
Makes technical corrections to certain pension provisions. Revises rules relating to actuarial adjustments for retirment income benefits. Revises rules relating to the treatment of loans to participants from qualified pension plans. Increases the amount of the deduction for simplified employee pensions. Revises rules relating to the treatment of self-employed individuals for exclusion of employees' death benefits.
Revises the treatment of simplified employee pensions. Revises the definitions of "key employee" and "top-heavy plan" for purposes of required distributions before death. Permits distributions to be made to a beneficiary of a participant if the beneficiary is a dependent who is under age 22 or is permanently and totally disabled.
Delays the effective date for special rules related to government plans. Delays the effective date for provisions related to inherited individual retirement plans.
Allows the award of court costs and attorney's fees for cases in the United States Claims Court. Sets forth penalties for failure to give notice to recipients of certain pension distributions.
Requires the fiduciary of any estate or trust required to file a return to furnish each beneficiary with a statement of the information shown on the return as required by the Secretary.
Subtitle B: Amendments Related to Subchapter S Revision Act of 1982; Etc.
- Provides for the nonrecognition of gain or loss on the complete liquidation of a subchapter S corporation or on the distribution of certain stock in a reorganization.
Allows an election to not have new passive income rules apply during 1982. Treats a subchapter S corporation as a partnership for purposes of constructive ownership of stock. Sets forth rules for elections for certain short taxable years. Revises rules relating to the ownership of stock in certain inactive corporations. Revises the definition of a qualified subchapter S trust.
Subtitle C: Amendments Relating to Highway Revenue Act of 1982
- Provides that the value of used components shall not be taken into account in determining price for purposes of the retail sales tax on heavy trucks and trailers. Provides that the excise tax on gasoline shall apply to gasohol.
Provides for floor stocks refunds for tires taxed at lower rate after January 1, 1984. Sets forth rules relating to overpayments of tax on trucks and tires.
Treats as a "producer," for purposes of the exemption from the excise tax on gasoline, any person who regularly sells gasoline to owners, lessees, or operators of aircraft for use as fuel in noncommercial aviation.
Exempts from the retail tax on heavy trucks: (1) camper coaches bodies for self-propelled mobile homes; (2) feed, seed, and fertilizer equipment; (3) ambulances and hearses; (4) concrete mixers; (5) house trailers; (6) trash containers; and (7) rail trailers and rail vans. Exempts from the excise tax on tires any tires with internal wire fastening and tires used on intercity, local, and school buses.
Title VIII: Foreign Sales Corporations
- Amends the Internal Revenue Code to provide for the tax treatment of foreign sales corporations (FSC) and exports of goods and services. Excludes from gross income the exempt foreign trade income of a FSC. Requires the allocation of the deductions of a FSC to its exempt and nonexempt income. Limits the types of income tax credits which a FSC may claim. Treats the foreign trade income (other than exempt foreign trade income), investment income, and carrying charges of a FSC as U.S. source income, subject to the income tax.
Defines a "FSC" as any corporation which: (1) was created under the laws of any foreign country or possession of the United States; (2) has no more than 25 shareholders at any time during the taxable year; (3) has no preferred stock; (4) maintains an office inside and outside the United States at which permanent tax records are kept; (5) has one director who is not a U.S. resident; (6) is not a member of a controlled group of corporations of which a domestic international sales corporation is a member; and (7) has made an election to be treated as a FSC. Defines a "small foreign sales corporation" as having up to $5,000,000 of export receipts.
Sets forth a special rule for foreign trade income allocable to a cooperative.
Sets forth a formula for determining the portion of a FSC's foreign trade income which is exempt foreign trade income.
Identifies the gross receipts of any FSC as foreign trading gross receipts which are: (1) from the sale, exchange, or other disposition of export property; (2) from lease or rental of export property for use by the lessee outside the United States; (3) for related services; (4) for engineering or architectural services for construction projects located outside the United States; or (5) for performance or managerial services. Sets forth rules for the treatment of specified items of income as foreign trading gross receipts.
Sets forth transfer pricing rules for the treatment of export property sold to a FSC. Requires the Secretary of the Treasury to prescribe regulations for commissions, rentals, and marginal costing with respect to the sale of export property to a FSC.
Sets forth rules for the tax treatment of distributions to shareholders of a FSC.
Requires the payment of interest on the deferral of tax on shareholder income of a domestic international sales corporation.
Requires the taxable year of a DISC and FSC to conform to the taxable year of the shareholder who holds the highest percentage of voting power.
Requires the Secretary of the Treasury to submit a biennial report to the Congress setting forth an analysis of the operation and effect of the Foreign Sales Corporation tax provisions.
Title IX: Highway Revenue Provisions - Subtitle A: Provisions Relating to Heavy Vehicle Use Tax
- Revises the heavy vehicle highway use tax to eliminate the tax on vehicles under 55,000 pounds and provide a maximum tax rate effective July 1, 1984. Sets forth special rules in the case of certain owner-operators.
Reduces by 25 percent the heavy vehicle use tax on vehicles the exclusive use of which is the transportation of forest products and which are registered as logging vehicles. Exempts agricultural vehicles from the heavy highway use tax where the use of the highway by the vehicle will be less than 7,500 miles.
Subtitle B: Provisions Relating to Fuel Tax
- Increases the amount of excise tax on diesel fuel from nine to 15 cents per gallon. Provides owners of recent model year diesel vehicles and purchasers of new diesel vehicles with a one-time advance repayment of the increased diesel fuel tax.
Decreases the excise tax imposed on gasohol. Modifies the excise tax imposed on methanol and ethanol. Extends until September 31, 1985, the reduction in the excise tax on fuel used by taxicabs. Reduces the amount of refund allowable for the excise tax on diesel fuel used in local buses.
Subtitle C: Temporary Reduction in Retail Tax on Certain Piggyback Trailers
- Reduces the excise tax on piggyback trailers for a one year period beginning with the date of enactment of this Act.
Subtitle D: Studies
- Requires the Secretary of Transportation, in consultation with the Secretary of the Treasury, to conduct a study: (1) of whether highway motor vehicles with taxable gross weights of 80,000 pounds or more bear a proportionate share of the cost of the highway system; (2) to determine the significance of the excise tax on highway motor vehicles on trans-border trucking operations; and (3) to evaluate the feasibility and ability of weight-distance truck taxes to provide the greatest degree of equity among highway users, to ease the costs of compliance of such taxes, and to improve the efficiency by which such taxes might be administered. Requires the Secretary of Transportation to submit a report on each study to specified committees of Congress not later than October 1, 1987.
Requires the Secretary of the Treasury to conduct a study of the reduced rate of fuel taxes provided for taxicabs. Requires such study to be submitted to the Congress no later than January 1, 1985. Requires the Secretary of Transportation, in consultation with the Secretary of the Treasury, to conduct a study of the appropriate application and level of excise tax on trucks and trailers sold at retail on piggyback trailers and semi-trailers. Requires the Secretary to submit to specified committees of Congress a report on the excise tax on piggyback trailers and semi-trailers by May 1, 1985.
Title X: Miscellaneous Revenue Provisions - Subtitle A: Capital Gains and Losses
- Decreases the holding period required for long-term capital gain treatment from one year to six months.
Subtitle B: Excise Tax Provisions
- Amends the Federal Boat Safety Act of 1971 to remove authority for facilities improvement under the recreational boating safety program. Authorizes the Secretary of Transportation to expend for State recreational boating safety programs two-thirds of the amount transferred each year to the National Recreational Boating Safety Fund from motorboat fuel taxes. Authorizes such expenditures for FY 1984 through 1988. Directs the Secretary to establish guidelines prescribing the purposes of such funds. Makes the remaining amounts in such fund available to the Secretary for FY 1984 through 1988 for the operating expenses of the Coast Guard, including the Coast Guard Auxiliary for recreational boating safety.
Amends the Federal Aid in Fish Restoration Act to direct coastal States to equitably allocate apportioned revenues under the Fish Restoration Act of 1983 between marine and freshwater fish products. Defines "coastal States" for purposes of this Act.
Authorizes appropriations for fiscal years after September 30, 1984, equal to revenues accruing under the Sport Fish Restoration Account.
Reduces the percentage of annual appropriations available to the Secretary of the Interior for the expenses of investigation and administration. Eliminates the requirement that States give notice of their intent to accept apportioned funds.
Authorizes the Secretary to enter into agreements to finance up to 75 percent of the costs of land acquisition and construction of facilities.
Requires each State to allocate ten percent of specified apportioned funds to improve facilities for recreational boating. Authorizes the Secretary to expend the balance of such unobligated funds to carry out the research program on fish of material value for sport or recreation.
Permits each State to use up to ten percent of apportioned funds for aquatic resource education.
Amends the Internal Revenue Code to impose an excise tax on the sale by manufacturers, producers, or importers of sport fishing equipment, including any parts or accessories, equal to ten percent of the price of the item when sold. Imposes a three percent excise tax on the sale of electric outboard motors and sonar devices suitable for finding fish. Limits the tax on sonar devices to a maximum of $30.
Establishes in the Treasury the Aquatic Resources Trust Fund containing a Sport Fish Restoration Account and a Boat Safety Account.
Imposes an excise tax on the sale of bows and arrows by the manufacturer, producer, or importer equal to 11 percent of the price for which the item was sold.
Exempts from the aviation excise tax helicopter operations involving the transport of individuals, equipment, or supplies in the exploration for or the development or removal of hard minerals or the exploration for oil or gas.
Amends the Hazardous Substance Response Revenue Act of 1980 to exempt light hydrocarbons added to gasoline, diesel fuel, and aviation fuel from the excise tax. Exempts from the excise tax certain substances having only a transitory presence during the smelting, refining, or extracting of metal from ore. Eliminates the certification procedure for the fertilizer exemption.
Subtitle C: Estate and Gift Tax Provisions
- Amends the estate and gift tax provisions to provide that interests in closely held corporations may be considered for purposes of the installment payment of estate tax provisions provided the indirectly owned interest would meet the requirements for installment treatment were the closely held corporation directly owned. Provides that the special four percent interest rate and the five-year deferral of principal payments may not be elected in such cases. Provides that in the case of all corporations and partnerships, only active business assets are considered for purposes of the installment payment provisions of the estate tax.
Provides a permanent rule for the reformation of charitable split interest instruments for purposes of meeting the requirement for the tax deduction for gifts of split interests to charity. Requires that the charitable and noncharitable interests in the split interest trust generally remain the same before and after the reformation. Treats the premature death of an income beneficiary of a charitable remainder trust as the equivalent of a reformation.
Permits the executor of an estate to elect an alternate date for valuing estate property only if such election will result in a decrease of the value of the gross estate and the amount of estate tax liability. Permits the executor to elect an alternate valuation date on a later filed return.
Permits an executor who makes an election to have real property valued as farm property and has failed to provide required information or signatures to provide such information within 90 days of notification of the failure of the election.
Provides that payment of the gift tax by a donee does not result in income to the donor in the case of net gifts made before March 4, 1981.
Provides that certain usufruct interests qualify for the estate tax marital deduction.
Provides a special estate tax credit for the estates of Nell J. Redfield and Elizabeth Schultz Rabe for the transfer to the Secretary of Agriculture of real property for addition to the Toiyabe National Forest.
Subtitle D: Charitable Contributions and Exempt Organizations
- Increases to 12 cents per mile the amount allowable for computing the automobile costs deductible for charitable volunteer mileage. Includes within the definition of tax-exempt organizations certain organizations providing child care.
Establishes rules and restrictions regarding the ability of the Secretary of the Treasury to conduct inquiries and examinations with respect to a church tax examination.
Provides rules relating to the acquisition indebtedness for real property acquired by certain educational institutions.
Establishes a transitional rule relating to the charitable contribution deduction for qualified conservation contributions.
Subtitle E: Income Tax Credits
- Extends the targeted jobs credit for one year to December 31, 1985. Increases the earned income credit from ten to 11 percent. Establishes an alternative test for the definition of a qualified rehabilitated building for purposes of the investment tax credit.
Subtitle F: Miscellaneous Housing Provisions
- Allows a taxpayer a disaster loss deduction where the taxpayer is ordered to demolish or relocate his residence if such residence is located in an area which has been declared a disaster area by the President.
Precludes the application of the deduction disallowance rule to mortgage interest and real estate taxes paid or incurred by January 1, 1986, by a minister or member of the armed forces.
Provides that in the case of a member of the armed forces who is stationed outside the United States or who is required to reside in Government quarters at a remote site, the normal nonrecognition period for the sale of a residence will not expire until the end of four years after the sale of the old principal residence or one year after the member is no longer required to reside in such quarters, whichever is later, but not to exceed eight years.
Subtitle G: Extension of Existing Provisions and Transition Rules
- Extends the Payment in Kind (PIK) tax provisions to property withdrawn from production under the 1984 PIK program. Extends and increases the deduction allowed for expenses for eliminating architectural and transportation barriers to the handicapped.
Disallows permanently the deduction for expenses incurred in demolishing certain historic structures. Permits the amortization over a 60-month period of certain expenditures for rehabilitation of low-income housing. Makes this provision effective for three years, through December 31, 1986.
Makes permanent the provisions which treat Indian tribal governments as State governments for certain purposes. Expands such treatment to include the following purposes: (1) treatment of payments under certain State accident and health plans; (2) deductibility of certain costs associated with appearances before the State legislature; and (3) rules relating to treatment of original issue discount on certain State obligations.
Sets forth transitional rules for the treatment of certain income from subchapter S corporations.
Provides special leasing rules for certain coal gasification facilities.
Subtitle H: Additional Provisions
- Repeals the prohibition which denies eligibility for regulated investment company status to a personal holding company. Provides that the undistributed investment company taxable income of a regulated investment company which is a personal holding company will be subject to tax at the highest rate (presently 46 percent). Provides that corporations with accumulated earnings and profits attributable to a non-regulated investment company year will be ineligible to elect regulated investment company status without a distribution of those earnings.
Provides that the issue discount accruing with respect to any short-term government obligation will be taxable to the regulated investment company as it accrues, if the company so elects in the prescribed manner. Provides a transitional rule with respect to a corporation with earnings attributable to a non-related investment company year who wishes to elect regulated investment company status.
Revises the method for reducing the employee allocation of gross receipts for purposes of tip reporting requirements imposed on large food or beverage establishments. Provides that persons owning 50 percent or more of the value of a corporation that operates the food or beverage establishment shall not be considered employees, for purposes of determining whether the establishment is subject to such reporting requirements.
Provides that all tip income reported by the employee to the employer shall be considered wages for Federal unemployment tax purposes.
Extends through December 31, 1984, the exemption from Federal unemployment tax of remuneration paid to fishing boat crew members if the remuneration depends on the boat's catch and the crew normally consists of fewer than ten members.
Amends the Revenue Act of 1978 to provide that unemployment compensation payments made for weeks of unemployment ending before December 1, 1978, shall not be includible in income. Extends the period for claiming any credit or refund attributable to this change in the law to one year after enactment of this Act.
Provides a permanent exclusion from income of amounts realized by reason of cancellation of certain student loans where the recipient performs certain professional services for any of a broad class of employers.
Authorizes the Secretary of the Interior, with the concurrence of the Secretary of the Treasury, to license color, as well as black and white, reproductions of migratory bird hunting stamps. Requires any proceeds received by the Federal Government to be paid into the migratory bird conservation fund. Permits the color reproduction of migratory bird hunting stamps in philatelic advertising designed to encourage collectors to purchase such stamps.
Excludes from gross income payments received by the taxpayer from the United States Forest Service as a result of restricting motorized traffic in the Boundary Waters Canoe Area.
Revises rules relating to the tax exemption of corporations organized under Acts of Congress.
Subtitle I: Studies
- Requires the Secretary of the Treasury to submit to the Congress a study of alternative tax systems (covering both individual and corporate income taxes). Requires such study to include a study of tax shelters.
Requires the Secretary to study the practices of foreign countries that impose taxes on the basis of services that are performed in the United States, including the status of treaty negotiations with such countries and options to alleviate the resulting double tax burden on U.S. taxpayers.
Division B
: Spending Reduction Act of 1984 -
Title I: General Provisions
- Declares that it is the sense of the Senate that ceilings on FY 1985 appropriation bills shall not exceed specified amounts for non-defense, discretionary accounts, and defense accounts.
Declares that it is the sense of the Senate that in the absence of a first concurrent budget resolution for FY 1985 the allocations of such sums shall be done by the Senate Appropriations Committee.
Declares that it is the sense of the House that: (1) in FY 1985 through 1987 Federal deficits shall be reduced by a specified amount as a result of the first concurrent resolution on the budget for FY 1985 and the Deficit Reduction Act of 1984 and that such reductions shall be divided among revenue increases, domestic spending reductions, and limits on the growth in military spending; (2) in the absence of agreement on a first concurrent resolution on the budget for FY 1985 the House will continue to abide by House Concurrent Resolution 280, as passed the House; and (3) Congress shall immediately adopt a conference report on the first concurrent resolution on the budget for FY 1985 and the aggregate levels of revenue and spending shall be enforced.
Rescinds specified amounts provided in the Department of the Interior and Related Agencies Appropriation Act, 1980, for the energy security reserve. Provides that a specified portion on such rescinded funds shall be derived from the unused portion of the commitment of financial assistance previously awarded to the Oil Shale Company.
Title II: Civil Service and Military Retirement Programs
- Prohibits payment of any Government annuity or retired or retirement pay for any month before the first business day of the next month.
Delays the FY 1984 cost of living adjustment in the pay for prevailing rate employees for 90 days.
Repeals a provision of the Omnibus Budget Reconciliation Act of 1982 which requires the amount of a cost of living adjustment in the retired or retainer pay of a member or former member of the uniformed services to be deducted from the pay of any such individual holding a civilian position with the Government.
Amends the Defense Department Overseas Teachers Pay and Personnel Practices Act to repeal the 75 day limit on the amount of leave that may be accumulated by teachers in the Department of Defense schools overseas.
Amends the Omnibus Budget Reconciliation Act of 1982 to extend the applicability of provisions concerning deposits for civil service retirement credit for military service after 1956 to employees who retire prior to October 1, 1985.
Extends until September 15, 1984, the period during which certain Federal officers and employees may make or change elections concerning retirement coverage under the Federal Employees' Retirement Contribution Temporary Adjustment Act of 1983.
Provides a four percent pay increase to Federal judges, effective retroactive to January 1, 1984.
Provides for the recomputation of the annuity or survivor annuity of any native of the Pribilof Islands who performed activities in connection with the administration of such Islands and of any individual of Aleut ancestry who, while a U.S. citizen, was interned in any camp in Alaska during World War II, regardless of the date such person retires.
Amends the Omnibus Budget Reconciliation Act of 1981 to extend through FY 1987 provisions prohibiting the United States Postal Service from taking any action to reduce the number of days each week for regular mail delivery.
Title III: Medicare, Medicaid, and Maternal and Child Health Amendments
- Medicare and Medicaid Budget Reconciliation Amendments of 1984 -
Subtitle A: Medicare Amendments
- Amends title XVIII (Medicare) of the Social Security Act and the Age Discrimination in Employment Act of 1967 to provide that employers must offer group health insurance to a non-working spouse who is between the ages of 65 to 70 on the same basis as such insurance is available to those under age 65.
Extends for two years provisions of part B (Supplementary Medical Insurance) of title XVIII which set part B enrollee premiums.
Directs the Secretary of Health and Human Services to establish, under part B of title XVIII, fee schedules for clinical diagnostic laboratory tests except those provided to hospital inpatients. Directs the Secretary to set the fee schedules at 60 percent (or, in the case of a test performed by a hospital laboratory for outpatients of such hospital, 62 percent) of the prevailing charge level for similar tests for the applicable area. Provides that when payment is made on the basis of an assignment the Medicare reimbursement shall be 100 percent of the fee schedule amount. Provides, in other cases, that reimbursement shall be: (1) 80 percent of the lesser of the amount determined under the fee schedule or the charges billed; or (2) 100 percent of a negotiated rate which the Secretary is authorized to establish and which is acceptable to the person or entity performing the test. Directs the Secretary to simplify procedures with respect to claims and payments for clinical diagnostic laboratory tests so as to reduce unnecessary paperwork which assuring that sufficient information is supplied to identify instances of fraud and abuse. Directs the Comptroller General to report to Congress concerning the fee schedules.
Directs the Secretary to issue revisions to the current guidelines for payment under part B of title XVIII for the transtelephonic monitoring of cardiac pacemakers. Requires such guidelines to include provisions regarding the specifications for and frequency of transtelephonic monitoring procedures which will be found to be reasonable and necessary. Provides that, except in special cases where more frequent monitoring is justified, if the guidelines are not in effect by October 1, 1984, and until such guidelines are put into effect, payment may not be made under part B for transtelephonic monitoring procedures, with respect to a single-chamber cardiac pacemaker powered by lithium batteries, more frequently than: (1) weekly during the first month after implantation; (2) once every two months during the period representing 80 percent of the estimated life of the implant; and (3) monthly thereafter. Directs the Secretary to review and report to Congress concerning the appropriateness of physicians' charges associated with the implantation or replacement of pacemaker leads and devices. Directs the Prospective Payment Assessment Commission to review and report to Congress regarding hospital payment amounts for implantation and replacement. Directs the Secretary, through the Commissioner of the Food and Drug Administration, to provide for a registry of all cardiac pacemaker devices and leads for which Medicare payment was made.
Eliminates special payment provisions for preadmission diagnostic testing.
Limits the Medicare physician reasonable charge level and prevailing charge level, for the 15 month period beginning July 1, 1984, to a level that is not higher than the level set for the 12-month period beginning July 1, 1983. Permits any physician or supplier to voluntarily enter into an agreement with the Secretary to become a "participating physician or supplier." States that a "participating physician or supplier" is one who will accept payment on the basis of an assignment. Directs the Secretary to publish annually: (1) a directory of all participating physicians and suppliers; and (2) a list containing the percent of claims submitted with respect to each physician and supplier that was paid on the basis of an assignment. Directs the Secretary, in the case of a physician, to monitor the physician's charges for the 15-month period beginning July 1, 1984, and authorizes the Secretary to apply sanctions against a nonparticipating physician if such physician knowingly and willfully bills Medicare enrollees for actual charges in excess of such physician's actual charges for the calendar quarter beginning on April 1, 1984. Directs the Secretary: (1) during the 15 month period, to monitor physicians' services in order to determine any changes in the per capita volume and mix of physicians' services provided to beneficiaries under part B of title XVIII, classified by participating and nonparticipating physicians, by assigned and nonassigned claims, by specialty, and by geographic area; (2) to report to Congress concerning the monitoring; and (3) to include recommendations in the report as to how to limit part B program costs without burdening part B beneficiaries. Provides for the transfer from the Federal Supplementary Medical Insurance Trust Fund of funds for FY 1984 and 1985, in addition to other funds available for such fiscal years, for payments to implement this paragraph.
Provides that if all of the teaching physicians in a hospital agree to have payment made for all their part B patients on the basis of an assignment, the payment rate shall be 90 percent of the prevailing charge. Revises the formula for determining customary charges for teaching physicians to provide that the customary charges cannot be less than 85 percent of the prevailing charge. Directs the Comptroller General to conduct a study of and report to the appropriate House and Senate committees concerning teaching physicians' charges.
Directs the Secretary to issue regulations which require, for purposes of title XVIII, that providers of services calculate and report the lesser of cost or charges determinations separately with respect to payments for services under part A (Hospital Insurance) and part B of title XVIII (other than clinical diagnostic laboratory tests), and that payment under title XVIII be based upon such separate determinations. Provides that charges representing 60 percent or less of costs shall be considered nominal for purposes of applying the nominality test under parts A and B with respect to services furnished by a public provider free of charge or at a nominal costs.
Directs the Director of the Office of Technology Assessment to conduct a study of physician reimbursement under the Medicare program and to report to Congress on such study. Directs the Secretary, in order to assist the Director in completing the study and facilitate congressional review, to compile a centralized Medicare part B charge data base.
Revises provisions relating to the target rate reimbursement system which limits the increase in Medicare hospital costs per case by substituting "one-quarter of one percentage point" for "one percentage point" in the formula for determining the applicable percentage increase. Permits a hospital which is classified as a rural hospital to appeal to the Secretary for classification as a rural referral center on the basis of criteria established by the Secretary which allow the hospital to demonstrate that it should be so reclassified because certain of its operating characteristics are similar to those of a typical urban hospital located in the same census region. Directs the Secretary to publish the criteria, not later than 30 days after the date of the enactment of this Act, for implementation by October 1, 1984. Provides that: (1) a hospital located in a Metropolitan Statistical Area (MSA) shall be deemed to be located in the region in which the majority of the hospitals in the same MSA are located, or, at the option of the Secretary, the region in which the majority of Medicare inpatient discharges from hospitals in the same MSA are located; and (2) a hospital reclassified under clause (1) shall not have its Medicare payments reduced for discharges occurring before October 1, 1984. Directs the Secretary to conduct a study of: (1) the distinction between urban and rural hospitals for purposes of the Diagnosis Related Group (DRG) payment provisions and the effect which such distinction may have on rural hospitals in the case of those DRGs which have high fixed nonlabor components which do not vary significantly between urban and rural areas; (2) the advisability and feasibility of varying by DRG the proportions of the labor and nonlabor components of the Federal payment amount instead of applying those components to all DRGs; and (3) further refinements which may be appropriate in the inpatient hospital prospective payment provisions of title XVIII in order to address the problems of differences in payment amounts to specific hospitals. Requires the results of such studies to be reported to Congress.
Provides for payment to a hospital on the basis of reasonable cost for the costs incurred by such hospital for anesthesia services provided by a certified registered nurse anesthetist. Directs the Secretary to conduct a study of possible methods of reimbursement under Medicare which would not discourage the use of certified registered nurse anesthetists by hospitals.
Provides for an Executive Director of the Prospective Payment Assessment Commission. Authorizes the Secretary, in order to supplement the activities of the Commission, to carry out or award grants or contracts for original research and experimentation.
Provides that in establishing an appropriate allowance for depreciation under Medicare and for interest on capital indebtedness and a return on equity capital with respect to an asset of a hospital or skilled nursing facility which has undergone a change of ownership, the valuation of the asset after such change shall be the lesser of the allowable acquisition cost of such asset to the first owner of record on or after the enactment of this paragraph or the acquisition cost of such asset to the new owner. Requires a State's Medicaid program (title XIX of the Social Security Act) to provide assurances that the payment methodology utilized by the State's Medicaid program for payments to hospitals, skilled nursing facilities, and intermediate care facilities can reasonably be expected not to increase such payments solely as a result of a change of ownership in excess of the increase which would result from the application of the previous sentence.
Directs the Secretary to: (1) conduct a study to develop an appropriate wage index for hospital workers; (2) report the results to Congress; and (3) adjust hospital payments under Medicare as necessary. Directs the Secretary to conduct a study and report to Congress proposed criteria under which the Secretary would make adjustments for certain hospitals' discharges to more accurately reflect the discharges.
Specifies a deadline of July 1, 1985, for a report to Congress on including payment for physicians' services to hospital inpatients in DRG payment amounts.
Defines the term "bona fide emergency services" as used in title XVIII.
Prohibits the Secretary, in determining Medicare payment amounts with respect to routine service costs of extended care services for cost reporting periods beginning on or after July 1, 1984, from recognizing as reasonable per diem costs for such services costs exceeding: (1) for free-standing facilities in rural and urban areas, 112 percent of the mean per diem routine service costs for free-standing skilled nursing facilities located in rural and urban areas; and (2) for hospital-based skilled nursing facilities located in rural and urban areas, the limit for free-standing skilled nursing facilities (located in rural and urban areas), plus 50 percent of the amount by which 112 percent of the mean per diem routine service costs for hospital-based skilled nursing facilities (located in rural and urban areas) exceeds the limit for freestanding skilled nursing facilities located in rural and urban areas. Directs the Secretary to submit to Congress, prior to December 1, 1984: (1) the report required by the Social Security Amendments of 1983 relating to skilled nursing facilities; and (2) a report on the range of options for prospective payment of skilled nursing facilities under Medicare. Directs the Secretary to report to the appropriate House and Senate committees, prior to August 1, 1984, proposals required under part A (General Provisions) of title XI of the Social Security Act for prospective reimbursement of skilled nursing facilities.
Permits payments to a hospital under part A of Medicare for the operation of mobile intensive care units if certain conditions are met. Requires the hospital to be a statewide demonstration project hospital located in New Jersey and requires the project to provide for payments to hospitals in the State on a prospective basis related to a classification of patients by diagnosis related groups.
Limits payment to home health agencies for durable medical equipment to a maximum of 80 percent of the reasonable cost of the equipment, except for equipment furnished free of charge by a public home health agency. Defines the term "durable medical equipment."
Provides for the coverage, as medical and other health services, of the services of a clinical psychologist furnished pursuant to a risk-sharing contract with a health maintenance organization or a competitive medical plan.
Provides for coverage of hepatitis B vaccine and its administration when furnished to an individual who is at high or intermediate risk of contracting hepatitis B.
Provides for the coverage, as medical and other health services, of blood clotting factors for hemophilia patients competent to use such factors to control bleeding without medical or other supervision and items related to the administration of such factors.
Directs the Secretary to prohibit payment for a physician's debridement of mycotic toenails if performed more than once every 60 days, unless the physician documents the necessity for such treatment.
Allows the Secretary, during FY 1985 to 1986, to enter into not more than two competitively bid contracts with Medicare intermediaries and carriers under part A of Medicare and two under part B (Supplementary Medical Insurance) of Medicare. Permits the Secretary to employ competitive bidding without regard to the nominating process only to replace an intermediary or carrier which over a period of time has been in the lowest 20th percentile of organizations having contracts. Directs the Secretary, by July 1, 1987, to limit to no more than ten the number of regional intermediaries for home health agencies. Directs the Secretary, in determining the necessary and proper cost of administration for carriers and intermediaries, to take into account their reasonable and adequate costs. Directs the Comptroller General to conduct a study on and report to Congress concerning Medicare claims processing.
Removes the prohibition, under part A (General Provisions) of title XI of the Social Security Act, on making research and demonstration grants to for-profit organizations.
Provides that the Administrator of the Health Care Financing Administration shall be appointed by the President by and with the advice and consent of the Senate.
Authorizes the Secretary to bar from participation in Medicare or Medicaid any provider of which five percent or more is owned by an individual convicted of Medicare or Medicaid related crimes.
Provides for provider representation in peer review organizations.
Repeals specified requirements relating to coverage of tuberculosis treatments under Medicare and Medicaid (title XIX of the Social Security Act.)
Permits a physician who has a financial interest in an agency which is a sole community home health agency to carry out the certification and plan-of-care functions for patients who will receive services from the agency.
Provides that payroll taxes shall be transferred from the Treasury to the Federal Hospital Insurance Trust Fund from time to time.
Waives the Medicare part B delayed enrollment penalty and provides a special enrollment period for working individuals aged 65 to 69 who were enrolled in private health plans.
Permits part B Medicare payments to be made to an entity: (1) which provides coverage of the service under a health benefits plan; (2) which has paid the person who provided the service the amount which that person has accepted as payment in full for the service; and (3) to which the individual has agreed in writing that payment may be made.
Revises provisions relating to the accreditation of psychiatric hospitals and psychiatric units of general hospitals with respect to Medicare and Medicaid participation.
Includes podiatrists in the definition of "physician" for purposes of outpatient physical therapy services. Includes podiatrists and dentists in the definition of "physician" for outpatient ambulatory surgery purposes. Allows physical therapists to establish Medicare qualified plans for physical therapy.
Authorizes the Secretary to waive certain nursing care requirements for hospices located in rural areas which were in operation on or before January 1, 1983, and have demonstrated a good faith effort to hire enough nurses. Directs the Secretary to study and report to Congress on the necessity and appropriateness of the requirements that certain core services be furnished directly by a hospice.
Authorizes the United States to bring an action directly against third party insurance programs for Medicare costs.
Prohibits the Secretary from disclosing any accreditation survey made and released to the Secretary by the Joint Commission on Accreditation of Hospitals, the American Osteopathic Association, or any other national accreditation body, of any entity accredited by such body.
Extends the Secretary's authority to rely on accrediting organizations in determining whether rural health clinics, laboratories, clinics, rehabilitation agencies, including outpatient rehabilitation facilities, psychiatric hospitals, and public health agencies meet Medicare requirements.
Requires a hospital, for purposes of Medicare, to maintain an agreement with a professional standards review organization or with a utilization and quality control peer review organization. (Current law requires only an agreement with a utilization and quality control peer review organization.)
Provides that coverage for the services of a home health agency or hospice shall end 30 days following the termination of the home health agency's or hospice's Medicare participation agreement.
Eliminates the Health Insurance Benefits Advisory Council.
Directs the Secretary to establish a single 30-day period in which all of the competitive medical plans (CMP) and health maintenance organizations (HMO) in an area participating in Medicare must have an open enrollment period. Authorizes the Secretary to phase in the provision of the previous sentence over a three year period. Permits an HMO or a CMP to withhold and reserve a part of the value of the additional benefits required to be furnished to enrollees for use in subsequent contract periods.
Provides that providers, with respect to hearings before the Provider Reimbursement Review Board, shall have the right to obtain judicial review of any action of a fiscal intermediary which involves a question of law or regulations relevant to the matters in controversy whenever the Provider Reimbursement Review Board determines that it is without authority to decide the question, by a civil action commenced within 60 days of the date on which notification of such determination is made.
Authorizes the Secretary, if patient health and safety is not jeopardized, to apply less severe sanctions than are presently available for dealing with an end-stage renal disease facility which is not in compliance with applicable regulations.
Directs the Secretary to carry out a study and report to Congress with respect to payments to promote the closure and conversion of under utilized hospital facilities.
Makes miscellaneous technical corrections to Medicare provisions.
Requires the Secretary to approve certain waivers for projects demonstrating the concept of a social HMO. Requires the Secretary to report to Congress concerning the projects.
Subtitle B: Medicaid and Maternal and Child Health Amendments
- Amends title XIX (Medicaid) of the Social Security Act to require States to provide Medicaid coverage to needy qualified pregnant women or children. Defines a "qualified pregnant woman or child" to mean: (1) a pregnant woman who would be eligible for AFDC (part A of title IV of the Social Security Act) if her child was born and was living with her in the month such aid would be paid and such pregnancy has been medically verified, or is a member of a family which would be eligible for AFDC payments under AFDC provisions providing for payments to children of unemployed parents; and (2) a child who is under age five, was born after September 30, 1983, and meets the AFDC income and resources requirements.
Provides that a child born to a woman eligible for and receiving Medicaid on the date of the child's birth shall be deemed to have applied for and have been found eligible for medical assistance on the date of such birth and to remain eligible for such assistance for one year so long as the child is a member of the woman's household and the woman remains eligible for such assistance.
Requires recertifications of skilled nursing facility patients 30, 60, and 90 days after admission and every 60 days thereafter. Requires recertification of intermediate care facility every 60 days, 180 days, 12 months, 18 months, and 24 months after the date of the initial certification, and every 12 months thereafter.
Authorizes the Secretary to modify or waive the requirement which limits the total Medicare and Medicaid membership to 75 percent for an HMO if the organization: (1) is a nonprofit organization with at least 75,000 members; (2) is and has been a qualified HMO for at least four years; (3) provides basic services through members of the staff of the organization; (4) is located in a medically underserved area; and (5) previously received a membership waiver. Revises provisions relating to the disenrollment of a Medicaid beneficiary in a HMO. Permits a State to require an enrollment period of up to six months, when a beneficiary does not have good cause to disenroll sooner.
Increases the Medicaid ceiling amount for Puerto Rico, the Virgin Islands, Guam, the Northern Mariana Islands, and American Samoa.
Delays until July 1, 1985, payment reductions for a public psychiatric hospital to be made due to the level of care received in such hospital. Provides that reductions made for the 12-month periods ending June 30, 1986, and June 30, 1987, shall be one-third and two-thirds, respectively, of amounts otherwise required.
Requires a State Medicaid plan to require the mandatory assignment to the State of rights of payment for medical support and other medical care owed to recipients.
Provides that skilled nursing facilities and intermediate care faciliies shall have identical requirements for medical review and independent professional review under Medicaid.
Authorizes payments for long-term care services furnished by a hospital either on the basis of the special payment rate now available or on the basis of general rates applicable to hospitals and long-term care facilities.
Grants the Secretary the authority to issue and enforce subpoenas under Medicaid.
Provides, for purposes of Medicaid coverage, that the administrator of a clinic need not be a physician.
Amends title V (Maternal and Child Health Services Block Grant) of the Social Security Act to increase the authorization of appropriations.
Sets forth technical corrections to titles V and XIX of the Social Security Act. Prohibits the Secretary, during an 18 month moratorium period, from taking any compliance, disallowance, penalty, or other regulatory action against a State because the State's Medicaid plan is using a less restrictive income or resource standard than would otherwise be required for noncash Medicaid recipients. Directs the Secretary to report to Congress with respect to the appropriateness, and impact on States and recipients of medical assistance, of applying standards and methodologies utilized in cash assistance programs to those recipients of medical assistance who do not receive cash assistance and any recommendations for changes in such requirements.
Subtitle C: Recovery of Hill-Burton Funds
- Amends the Public Health Service Act to revise provisions relating to the recovery of Federal expenditures for construction or modernization of a hospital or other medical facility.
Subtitle D: Uncompensated Services Provided by Skilled Nursing Facilities and Intermediate Care Facilities
- Directs the Secretary to conduct a study to determine whether regulations implementing provisions of the Public Health Service Act relating to assistance for construction and modernization for health care facilities providing uncompensated services should distinguish between assisted hospitals and long-term care facilities.
Title IV: Small Business Programs
- Amends the Small Business Act to extend for one year (from October 1, 1986, to October 1, 1987) the period before which an agricultural enterprise shall not be eligible for loan assistance unless it is declined for emergency loan assistance from the Farmers Home Administration.
Title V: Veterans' Programs - Part A: Cost Savings Under the Veterans' Administration Pension Program
- Changes the effective date of disability pension awards for veterans who are permanently and totally disabled and who are prevented from applying for a disability pension for at least 30 days after becoming disabled. Changes the effective date for an award of a death pension.
Part B: Actions to Increase Receipts and Reduce Costs Under the Veterans' Administration Home-Loan Guaranty Program
- Requires that a loan fee shall be collected from each person obtaining a loan from the Administrator of Veterans Affairs to finance the purchase of real property from the Administrator. Increases the loan fee for home loans guaranteed by the Veterans Administration. Imposes the same fee on loans to finance the purchase of real property from the Administrator. Extends the period during which such fees may be collected until September 30, 1987. Requires that all amounts collected through such fees shall be deposited in the Veterans' Administration Loan Guaranty Revolving Fund.
Authorizes the Administrator, upon default in payment of a guaranteed home loan, to pay the holder of the guaranty a specified amount. (Currently, the Administrator is required to make such payment.)
Requires the holder of a defaulted home loan to notify the Administrator of a proposed liquidation sale of the real property securing the loan. Requires the Administrator to determine and notify the holder of the net value of the real property and the total indebtedness under the loan. Sets forth the options of the holder and the liability of the United States if the net value of the property securing a defaulted loan exceeds the amount of the total indebtedness under the loan minus the amount of the loan guaranty.
Provides that if the net value of the property securing a defaulted loan is not greater than the amount of the total indebtedness under the loan minus the amount of the loan guaranty: (1) the Administrator may not accept conveyance of the property from the holder of the loan; and (2) the U.S. liability under the loan guaranty shall be limited to the amount of the total indebtedness under the loan minus the amount realized by the holder by the sale of the property.
Limits U.S. liability under a loan guaranty to the amount guaranteed.
Limits the percentage of purchases made during any fiscal year of real property acquired by the Administrator because of loan defaults that may be financed by a loan made by the Administrator. Permits the maximum percentage to be increased from 75 to 80 percent if the Administrator determines that such an increase is necessary in order to maintain the effective functioning of the loan guaranty program. Requires the Administrator, to the greatest extent possible, to minimize the number of loans made to finance such purchases of real property. Terminates on October 1, 1987, the provisions dealing with loan defaults and purchases of property acquired because of such defaults.
Requires the Administrator to take steps to authorize Veterans Administration attorneys to exercise the right of the United States to bring suit in court to foreclose a loan made or acquired by the Administrator and to recover possession of property acquired by the Administrator. Authorizes the Administrator to acquire the services of private attorneys to exercise that right.
Requires the Administrator and the Attorney General, within 180 days of enactment, to submit a joint report to the appropriate congressional committees that: (1) describes and explains actions taken to implement the use of Veterans Administration attorneys in court; and (2) sets forth their views with respect to the advisability of employing private attorneys to bring court actions for the Veterans Administration.
Directs the Administrator, by December 1, 1986, to submit to specified congressional committees a report on the administration and functioning of the loan guaranty program and on the status of the Veterans Administration Loan Guaranty Revolving Fund. Sets forth information to be included in the report.
Title VI: OASDI, SSI, AFDC, and Other Programs - Subtitle A: Improvements in OASDI Program
- Amends title II (Old Age, Survivors and Disability Insurance) of the Social Security Act and the Internal Revenue Code to provide that a Federal employee who has been continuously performing service since December 31, 1983, shall not not be covered under the Old Age, Survivors and Disability Insurance (OASDI) program if such employee returned to Federal service after being detailed to an international organization, working for the American Institute of Taiwan, or performing service in the armed forces for less than 366 consecutive days.
Provides that a legislative branch employee who receives a lump-sum payment of his or her contributions to the Civil Service Retirement System or who has any legislative branch employment which is not subject to such system may not be exempt from coverage under the OASDI program. Permits legislative branch and other Federal employees to requalify for an exemption from such coverage under specified circumstances.
Provides that for purposes of coverage under the OASDI program, employees of nonprofit organizations who are covered on a mandatory basis by the Civil Service Retirement System shall be treated as Federal employees.
Amends title II of the Social Security Act to require the Secretary of Health and Human Services to develop and implement procedures to avoid the payment of more than the correct amount of OASDI benefits to any individual as a result of such individual's failure to file a correct report or estimate of wages or earnings.
Amends title II of the Social Security Act and the Internal Revenue Code to permit a church or qualified church-controlled organization to elect to have services performed in the employ of such church or organization (other than service in an unrelated trade or business) excluded from employment for purposes of coverage under the OASDI program if such church or organization states that it is opposed for religious reasons to the payment of social security taxes. Makes such an election applicable to services performed after December 31, 1983. Prohibits the revocation of such an election. Authorizes the Secretary of the Treasury to revoke an election for continuing failure to provide required information with respect to remuneration paid for services by the church or organization. Provides that wages of less than $100 for a calendar year paid to an employee of an electing church or organization shall not be included as self- employment income.
Subtitle B: Improvements in SSI Program
- Amends title XVI (Supplemental Security Income) of the Social Security Act to increase for the next five years the resources limit: (1) for single individuals, by $100 per year from $1,500 to $2,000; and (2) for married couples, by $150 per year from $2,250 to $3,000.
Provides that in situations where there has not been fraud in connection with an SSI overpayment, such overpayment shall be recovered through adjustments in future benefits in amounts not exceeding the lesser of: (1) the monthly benefit; or (2) an amount equal to ten percent of a beneficiary's monthly income. Permits a higher or lower adjustment or recovery at the request of a beneficiary if the Secretary determines such request to be justified and appropriate.
Provides that if an SSI overpayment is attributable to the possession of resources which exceed the applicable limit by $50 or less, no adjustment shall be made in SSI benefits, unless the SSI recipient knowingly and willfully failed to report the correct value of the resources.
Excludes from resources, for six months from the date of receipt, underpayment amounts received.
Amends part A (General Provisions) of title XI of the Social Security Act to provide for adjustments in certain SSI benefits made because of retroactive Old Age, Survivors and Disability Insurance (title II of the Act) benefits received.
Provides, with respect to the exclusion from income of certain "Alaska bonus payments," that in addition to meeting the present requirements for exclusion an individual on or before September 30, 1985, must: (1) become an SSI eligible individual; and (2) satisfy the 25 year residency requirement as was in effect prior to January 1, 1983.
Amends part A (Aid to Families With Dependent Children) of title IV of the Social Security Act to revise the gross income limitation. Makes ineligible any family whose income exceeds 185 percent of the State's standard of need.
Applies the $75 monthly work expense deduction to both full-time and part-time workers.
Limits the $30 AFDC disregard to 12 months and the one-third disregard to four months.
Requires a State plan to provide that, in certain cases where a family has ceased to receive AFDC because of loss of the $30 plus one-third disregard, such family shall be considered for Medicaid purposes to be receiving AFDC for nine months after the loss of AFDC eligibility. Permits a State to extend such period for an additional six months. Sets forth application and eligibility requirements for a family seeking such benefits.
Defines the AFDC term "earned income" to mean gross income, prior to any deductions.
Excludes from resources for AFDC purposes: (1) burial plots and funeral arrangements; and (2) for such period as the Secretary may prescribe, real property which a family is making a good faith effort to sell, except that any AFDC compensation for such period shall be conditioned upon such sale, and any AFDC payments for that period shall (at the time of sale) be considered overpayments to the extent that they would not have been made had the sale occurred at the beginning of the period for which the payments of such aid were made.
Provides that where a State is unable to provide day care and transportation for community work experience program participants, the State shall directly reimburse participants for such costs.
Requires retrospective budgeting for families required to file a monthly report, but makes such budgeting optional with States in other cases. Requires monthly reporting for families with a recent work history or earned income, but makes such reporting optional in other cases. Permits the Secretary to grant waivers of such requirements to the extent necessary to make such requirements compatible with the Food Stamp Act of 1977.
Provides for the exclusion from income, for AFDC purposes, of amounts received as an earned income tax credit.
Amends part A (General Provisions) of title XI of the Social Security Act to permit any State with an approved AFDC plan to establish and conduct one or more pilot projects to demonstrate the use of integrated service delivery systems for human services programs in that State or in one or more political subdivisions of such State. Requires any State desiring to establish and conduct a pilot project to apply to the Secretary. Directs the Secretary to approve a project only if the project will not lower or restrict the levels of aid, assistance, benefits, or services, or the income or resource standards, deductions, or exclusions of any of the human services programs involved. Permits a State with an approved application to request the Secretary to waive any requirement which would otherwise apply with respect to the proposed project under any of the laws governing the human services programs to be included in the project. Sets forth guidelines for approving or disapproving such waiver request. Sets forth guidelines relating to information disclosure. Provides that Federal funding for an approved pilot project shall be: (1) 90 percent for the first 18 months; (2) 80 percent for the following 12 months; and (3) 70 percent for the next 12-month period. Directs the Secretary and the Comptroller General to report to Congress concerning approved projects. Authorizes funds to be appropriated for such projects for FY 1985 through 1988.
Exempts women in the third trimester of pregnancy from requirements of registering for the work incentive program.
Permits a State to recalculate the period of AFDC ineligibility which occurs when a family receives a nonrecurring lump sum, if: (1) an event occurs which, had the family been receiving AFDC for the month of the occurence, would have changed the aid for that month; (2) the income received has become unavailable for reason beyond the control of the family; or (3) the family incurs, becomes responsible for, and pays medical expenses which offset the lump sum income.
Provides that recovery of an AFDC overpayment need not be attempted, except in cases involving fraud, if the cost of recovery would equal or exceed the amount of the overpayment.
Requires protective AFDC payments to be made by a State unless the State, after making reasonable efforts, cannot locate an appropriate individual to whom such payments can be made.
Provides that any individual who is an alien and whose sponsor was a public or private agency shall be ineligible for AFDC for the three-year period following such alien's entry into the United States, unless the State agency administering the plan determines that the sponsor either no longer exists or has become unable to meet the individual's needs.
Permits the disclosure of certain information concerning an AFDC recipient who is a fugitive felon to a State or local law enforcement officer.
Establishes a payment schedule for the Federal reimbursement of States' back claims for public assistance programs under the Social Security Act.
Permits, with respect to a work supplementation program: (1) a State to disregard the $30 plus one-third income disregard; and (2) the use of private employers. Revises the Federal funding formula for such program.
Provides that in-kind assistance furnished by a private nonprofit agency or a supplier of home heating oil or gas shall be disregarded from income for AFDC and SSI purposes until October 1, 1987. Requires a State, in determining the needs of a dependent child, to include the child's parent and dependent minor siblings who meet the definition of "dependent child" under part A, if the parent or sibling lives in the same home as the dependent child. Includes any income of or available for such parent or sibling in determinations of such need. Requires a State plan, in determining need with respect to a dependent child whose parent is a minor, to include any income of such minor's own parent if living in the same household.
Disregards, for AFDC purposes, the first $50 of monthly child support collected, including support collected under part D (Child Support and Establishment of Paternity) of title IV.
Permits participants in community work experience programs to perform work in the public interest for a Federal agency. Prohibits consideration of participants as Federal employees.
Authorizes a State to exclude for up to six months, for purposes of the AFDC gross income limitation, the earned income of a dependent child who is a full-time student.
Sets forth effective date provisions for this subtitle.
Subtitle C: Implementation of Grace Commission Recommendations
- Amends part A (General Provisions) of title XI of the Social Security Act to require the following programs to participate in an income and eligibility verification system established by this subtitle: (1) the AFDC program; (2) the Medicaid program; (3) the unemployment compensation program; (4) the food stamp program; (5) the SSI program; and (6) any program under titles I (Grants to States for Old-Age Assistance and Medical Assistance for the Aged), X (Grants to States for Aid to the Blind), or XIV (Grants to States for Aid to the Permanently and Totally Disabled) of the Social Security Act. Amends such programs to require the disclosure of the information required by the system. Requires a State system to: (1) require as a condition of eligibility in one of the programs that each applicant for or recipient of benefits furnish his or her social security number to the State; (2) request wage information from agencies administering unemployment compensation programs and wage and other information from the Social Security Administration and the Internal Revenue Service; (3) require quarterly reports from employers; (4) provide for the exchange of information among agencies administering the programs and make such information available for assisting in the child support program of title IV of the Social Security Act and the OASDI program; (5) provide adequate safeguards so as to assure that information received will be made available only as necessary and will be protected against unauthorized disclosure for other purposes; (6) notify applicants for and recipients of benefits that information will be requested and utilized; and (7) provide that accounting systems are utilized which assure that programs providing data receive appropriate reimbursement from the programs utilizing the data for the costs incurred in providing the data. Requires any agency receiving information to independently verify any information received before adjusting any program benefits. Amends the Internal Revenue Code to direct the Commissioner of Social Security, upon written request, to disclose return information with respect to net earnings from self-employment, wages, retirement income, and unearned income to any agency administering one of the programs. Limits such disclosure to the purposes of, and to the extent necessary in, determining eligibility for, or the correct amount of, benefits under one of the programs.
Subtitle D: Technical Corrections
- Makes technical corrections to various provisions of the Social Security Act, the Internal Revenue Code, and the Social Security Amendments of 1983.
Subtitle E: Trade Adjustment Assistance
- Amends the Trade Act of 1974 to begin the period for the 26-week additional trade readjustment allowances with the first week the worker is in training if that training has not been approved until after the last week of entitlement to basic benefits. Increases the maximum job search allowance from $600 to $800. Increases the maximum relocation allowance from $600 to $800.
Extends eligibility for industry-wide technical assistance to industries in which a substantial number of workers have been certified for trade adjustment assistance. Increases from $2,000,000 to $10,000,000 the amount of assistance that can be provided annually to a single industry.
Subtitle F: Certain Provisions Relating to Puerto Rico and the Virgin Islands
- Amends the Internal Revenue Code to provide that no article containing distilled spirits shall be treated as produced in Puerto Rico or the Virgin Islands unless at least 92 percent of the distilled spirits in such article are attributable to distilled spirits originally distilled in Puerto Rico or the Virgin Islands.
Places limitations on transfers of excise tax revenues to Puerto Rico and the Virgin Islands.
Title VII: Competition in Contracting
- Competition in Contracting Act of 1984 -
Subtitle A: Amendments to the Federal Property and Administrative Services Act of 1949
- Amends the Federal Property and Administrative Services Act of 1949 to revise Government procurement procedures.
Requires any executive agency, when procuring property or services, to obtain full and open competition by using the competitive procedures best suited under the circumstances. Directs any agency to solicit sealed bids when: (1) time permits the solicitation, submission, and evaluation of sealed bids; (2) the award will be made on the basis of price and other price-related factors; (3) discussions with responding sources are not necessary; and (4) there is a reasonable expectation of receiving more than one bid. Directs an agency to request competitive proposals when sealed bids are not appropriate. Allows an agency to exclude a particular source when using competitive procedures in order to establish or maintain any alternative source of supply upon determining that to do so would: (1) increase or maintain competition and reduce costs; (2) serve national defense interests by having a facility available for furnishing property or service in case of a national emergency or industrial mobilization; or (3) serve national defense interests by establishing or maintaining an essential engineering, research, or development capability. Allows an agency to restrict competition under a solicitation to small businesses to fulfill statutory requirements concerning small businesses.
Authorizes an agency to use procedures other than competitive procedures only when: (1) there is only one source and no substitute for the property or service needed; (2) the agency's need for the property or service is of such unusual or compelling urgency that the Government would be seriously injured unless the agency is permitted to limit the sources from which it solicits bids or proposals; (3) it is necessary to award the contract to a particular source to maintain a source available for furnishing property or services in a national emergency, to achieve industrial mobilization, or to establish or maintain an essential engineering, research, or development capability; (4) an international agreement or treaty with a foreign government or international organization requires such procedures; (5) a statute authorizes or requires that the procurement be made through another agency or a specified source; (6) the agency needs to procure a brand name commercial item for authorized resale; (7) disclosure of an agency's needs would compromise national security unless the agency is permitted to limit the number of sources; (8) the agency head notifies Congress that it is in the public interest to use other than competitive procedures in a particular procurement; or (9) the award of a follow-on contract for the continued development or production of a major system or highly specialized equipment to other than the original source is likely to result in a substantial duplication of cost or unacceptable delays.
Prohibits an agency from awarding a contract using other than competitive procedures unless: (1) the contracting officer justifies the use of such procedures in writing and certifies the accuracy and completeness of such justification; (2) such justification is approved by the competition advocate for the procuring activity, the head of the procuring activity or delegate, or the senior procurement executive of the agency, depending on the value of the contract; and (3) any required procurement notice has been published and all bids or proposals received in response to such notice have been considered. Lists required contents of such a justification.
Prohibits any agency from procuring goods or services: (1) using other than competitive procedures on the basis of a lack of planning or agency procurement funds; or (2) from another agency unless such other agency complies with the procurement requirements of this Act.
Requires the establishment of special simplified procedures for small purchases of property and services (purchases not exceeding $25,000).
Directs an agency, in preparing for a procurement activity, to: (1) use advance procurement planning and market research; and (2) solicit bids and develop solicitation specifications so as to achieve full and open competition.
Requires all solicitations for bids or proposals for other than small purchases to state: (1) the relative importance of all significant factors which the agency will consider in evaluating such bids or proposals; (2) in the case of sealed bids, that there will be no discussions with bidders; and (3) in the case of competitive proposals, that proposals are intended to be evaluated with discussions with the offerors, but might be evaluated without discussions.
Requires each agency to: (1) evaluate bids and proposals solely on the basis of factors specified in the solicitation; and (2) award contracts to the bidder or offeror whose bid or proposal is most advantageous to the Government, considering the price and other factors. Permits an agency to reject all bids or proposals if such action is in the public interest. Requires an agency, when evaluating competitive proposals, to award a contract: (1) after conducting written or oral discussions with all offerors submitting proposals within a specified range; or (2) on the basis of the proposals as received without discussions with the offerors (beyond minor clarifications) when it can be demonstrated from the existence of full and open competition or accurate prior cost experience with the product or service that acceptance of an initial proposal without discussions would result in the lowest overall cost to the Government.
Defines "competitive procedures" to include: (1) procurement procedures providing for full and open competition; (2) procurement of architectural or engineering services conducted in accordance with the Federal Property and Administrative Services Act of 1949; (3) the competitive selection of basic research proposals resulting from a general solicitation and the peer or scientific review of such proposals; and (4) the procedures for the multiple awards schedule program of the General Services Administration (GSA) if participation has been open to all responsible sources and the orders and contracts under such procedures result in the lowest overall cost to the Government.
Requires a prime Government contractor or subcontractor, with specified exceptions, to submit and certify the accuracy of cost or pricing data before: (1) the award of contracts using other than sealed bid procedures and certain subcontracts if the price is expected to exceed $100,000; or (2) the pricing of any modification to such a contract or subcontract is expected to result in a price adjustment exceeding $100,000. Requires the price to the Government of such a contract, subcontract, or modification to be adjusted to exclude any significant amount by which the price was increased because of inaccurate data. Authorizes an agency representative, for three years after final payment under such a contract or subcontract, to examine the contractor's records and other information to evaluate the accuracy of the cost and pricing data.
Directs the board of contract appeals of GSA to review any decision of an agency contracting officer concerning the procurement of automatic data processing equipment that is alleged to violate procurement law. Directs the board, if a request for such a review is filed before or within ten days after the contract is awarded, to: (1) hold a hearing within ten days to determine whether to suspend the GSA Administrator's procurement authority or the Administrator's delegation of procurement authority for the protested procurement pending the board's decision; and (2) suspend such authority unless the agency concerned establishes that urgent and compelling circumstances which significantly affect U.S. interests will not permit waiting for the board's decision. Requires the board to issue its final decision within 45 working days unless the board's chairman determines that unique circumstances require a longer period.
Authorizes the board to: (1) dismiss frivolous or invalid protests; (2) suspend, revoke, or revise procurement authority applicable to a challenged procurement which violates procurement law; and (3) award an appropriate party the costs of filing and pursuing the protest and of preparing a bid or proposal. Provides for the appeal of the board's determination as set forth in the Contract Disputes Act of 1978. Declares that a contract affected by the board's action after the contract has been awarded shall be presumed to be valid as to goods or services delivered and accepted before such action.
Terminates on January 15, 1988, the authority of the board to review and modify agency procurement authority for automatic data processing equipment.
Subtitle B: Amendments to Title 10, United States Code
- Amends the Armed Services Procurement Act to revise procurement procedures for the Department of Defense, the military services, the Coast Guard, and the National Aeronautics and Space Administration to correspond with the procurement procedures set forth in this title. Prohibits the head of an agency from delegating the authority to determine that the use of noncompetitive procurement procedures is necessary in the public interest.
Subtitle C: Amendments to the Office of Federal Procurement Policy Act
- Amends the Office of Federal Procurement Policy Act to require each executive agency to furnish for publication by the Secretary of Commerce in the Commerce Business Daily a notice announcing: (1) its intention to solicit bids or proposals for a contract at a price expected to exceed $10,000; and (2) the award of a contract for a price exceeding $25,000 if there is likely to be a subcontract. Directs an agency not to: (1) issue a solicitation earlier than 15 days after such solicitation notice is published; or (2) provide less than 30 days after such notice is published for the submission of bids. Requires that such notice include: (1) an accurate description of the property or service to be procured; (2) the name, address, and phone number of the contracting officer and the agency representative to contact to obtain a copy of the solicitation; (3) a statement that all responsible sources may submit a bid or proposal; and (4) a justification of any use of noncompetitive procuedures. Declares that such solicitation notice requirements shall not apply: (1) if such notice would disclose agency needs the disclosure of which would compromise national security; (2) to any procurement resulting from an unsolicited proposal that demonstrates a unique or innovative research concept if publication of any notice of such proposal would disclose the innovativeness of the proposal or proprietary information; (3) to any procurement made against an order placed under a requirements contract; (4) to any procurement made for perishable subsistence supplies; or (5) to any procurement for which the agency head and the Administrator for Federal Procurement Policy concur that it is not appropriate to publish a notice before issuing a solicitation.
Requires each executive agency to: (1) maintain a computer file for five years, by fiscal year, containing unclassified records of all competitive procurements (with competitive procurements for which only one bid was received listed separately) and noncompetitive procurements, excluding small purchases; and (2) transmit such information to GSA for entry into the Federal Procurement Data System.
Requires the head of each executive agency to designate an employee (other than the senior procurement executive) to serve as an advocate for competition for the agency and for each procuring activity of the agency. Directs each advocate to: (1) be responsible for promoting and challenging barriers to full and open competition in agency procurement; (2) report to the agency's senior procurement executive on actions taken to achieve full and open competition, conditions restricting such competition, such advocate's activities during the preceding year, barriers to competition, and initiatives to increase competition; and (3) recommend to such executive goals and plans to increase competition and a system of personal and organizational accountability for competition.
Directs the head of each executive agency to submit to each house of Congress annual reports for FY 1986 through 1990 describing: (1) agency actions taken to increase competition for contracts and to reduce the number and dollar value of noncompetitive contracts; and (2) activities of the agency's advocate for competition.
Requires each agency head to increase the use of full and open competition in agency procurement by practices that assure that the agency receives a sufficient number of bids or proposals from responsible sources to meet the Government's requirements at the lowest reasonable cost.
Subtitle D: Procurement Protest System
- Establishes a procurement protest system under which the Comptroller General shall decide any protest concerning alleged violations of the procurement laws submitted by an interested party. Directs the Comptroller General to notify an agency within one working day of the receipt of a protest concerning a procurement by such agency. Requires the agency to submit a report on such procurement within a specified period. Prohibits any contract from being awarded or, if awarded within the preceding ten days, performed after a notice of protest has been received and while the protest is pending. Authorizes the head of the agency to authorize the award or performance of a contract notwithstanding a protest after notifying the Comptroller General that compelling, urgent circumstances significantly affecting interests of the United States will not permit awaiting the Comptroller General's decision.
Requires the Comptroller General to: (1) provide for the inexpensive and expeditious resolution of such protests; (2) issue a final decision on a protest within 90 days unless specific circumstances require a longer period; and (3) establish an express option for deciding protests suitable for resolution within 45 days. Authorizes the Comptroller General to dismiss frivolous or invalid protests.
Directs the Comptroller General, upon determining that a protested solicitation, proposed award, or award does not comply with procurement law, to recommend that the agency: (1) refrain from exercising any of its options under the contract; (2) repeat competitive procedures for such contract immediately; (3) issue a new solicitation; (4) terminate the contract; (5) award a contract consistent with procurement law; or (6) comply with such recommendations as the Comptroller General determines to be necessary to comply with procurement law. Authorizes the Comptroller General, upon making such determination, to require the agency to reimburse the appropriate party for the costs of: (1) filing and pursuing the protest; and (2) preparing the contract bid or proposal. Requires the head of the procuring activity responsible for the protested action to report to the Comptroller General if the agency fails to implement the Comptroller General's recommendations within 60 days. Directs the Comptroller General to report to Congress annually on such failures.
Subtitle E: Effective Date; Regulations; Study
- Sets forth the effective dates of specified provisions of this title.
Requires the single Government-wide procurement regulation in the Office of Federal Procurement Policy Act to be modified to conform to the requirements of this title.
Requires the Administrators of the Office of Federal Procurement Policy, GSA, and NASA, by January 31, 1985, to complete a study of alternatives and recommend to specified congressional committees a plan to increase the opportunities to achieve full and open competition in the procurement of professional, technical, and managerial services.
Title VIII: Federal Credit Union Act Amendments
- Amends the Federal Credit Union Act to require a credit union applying for insurance for member accounts to pay and maintain a deposit for such insurance. Requires certification of such deposits to be included with required annual certified statements.
Requires each insured credit union to pay to and maintain with the National Credit Union Share Insurance Fund a deposit in an amount equaling one percent of the credit union's insured shares.
Provides for the return of such deposit in the event that its insurance coverage is terminated, it converts to insurance coverage from another source, or in the event the operations of the fund are transferred from the National Credit Union Administration Board.
Requires the Board, when at the end of a given insurance year any loans to the Fund from the Government and the interest thereon have been repaid and the equity of the fund exceeds the normal operating level, to effect a pro rata distribution to insured credit unions of an amount sufficient to reduce the equity in the Fund to its normal operating level. Repeals the provisions of such Act which allowed the Board to reduce the premium charge for insurance in such instances.
Includes share, share draft, and share certificates within the definition of insured shares.
Requires the Board to make annual reports to Congress with respect to the operating level of the Fund, including the results of an independent audit of the Fund.
Provides that when an insured credit union's insured status is terminated and the credit union obtains comparable insurance coverage from another source, insurance of its accounts by the Fund may cease immediately.
Exempts the Central Liquidity Facility and its franchise, activities, capital reserves, surplus, and income from all State and local taxation.
Eliminates Federal payroll deduction fees on financial institutions.
Title IX - Miscellaneous Provisions
- Expresses the sense of Congress that departments, agencies, and instrumentalities of the executive branch of Government can continue to make management improvements in various specified areas. Requires the Director of the Office of Management and Budget (OMB) to prepare and transmit to the appropriate congressional committees a report detailing the baseline costs and savings expected due to improved management in each specified area. Requires explanations for each area in which expected savings are less than certain specified sums.
Makes various findings concerning the conveying and use of certain land at Montauk Air Force Base, New York.
Requires the President to review recent recommendations for management improvement and cost control opportunities which require administrative or presidential action. Requires a report, together with recommendations, to be submitted at the same time the 1985 Budget is submitted. Requires each congressional authorizing committee to review the presidential report and, in turn, make recommendations to the Budget Committees concerning cost savings in management.
Requires the director of the Congressional Budget Office (CBO) to conduct a study of the nature and reliability of the assumptions upon which budget estimates are bared and to make a report to the Budget Committees for both Houses of Congress by June 1, 1985. Specifies various information to be included in such study. Requires CBO, on a trial basis, to conduct a review of the budget estimates prepared by the Department of Defense and one civilian agency to determine: (1) whether there is a systematic underestimation of costs; and (2) what effects any systematic costing errors may have upon the long-run costs of programs, the mix of programs implemented, and the effectiveness of programs in meeting agency missions and goals. Requires the General Accounting Office to look at all phases of budget preparation and program evaluation and to examine historical patterns of funding to determine the effect of cost estimation biases.
Requires each of the Directors of CBO and OMB to conduct a study of the administrative feasibility and potential impact of applying alternative formula approaches to the entire Federal budget. Specifies certain formulas to be included in such study.
Expresses the sense of Congress that no funds shall be obligated or expended for the purpose of planning, directing, executing, or supporting the mining of the ports or territorial waters of Nicaragua.
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Bill titles: An act to provide for tax reform, and for deficit reduction.; A bill to provide for tax reform, and for other purposes.; Competition in Contracting Act of 1984; Medicare and Medicaid Budget Reconciliation Amendments of 1984; Spending Reduction Act of 1984; Tax Reform Act of 1984
Original source documents: Digest of the Congressional Record vol. 47, p. 2741;
Links for more info on the vote: congress.gov
