[Congressional Bills 103th Congress]
[From the U.S. Government Printing Office]
[H.R. 2264 Public Print (PP)]

103d CONGRESS

  1st Session

                               H. R. 2264

_______________________________________________________________________

                               AMENDMENT

                June 29 (legislative day, June 22), 1993

                    Ordered to be printed as passed
  
  
  
  
  
  
  
  
  
  

                June 29 (legislative day, June 22), 1993

                    Ordered to be printed as passed






                  In the Senate of the United States,

                              June 25 (legislative day, June 22), 1993.
      Resolved, That the bill from the House of Representatives (H.R. 
2264) entitled ``An Act to provide for reconciliation pursuant to 
section 7 of the concurrent resolution on the budget for fiscal year 
1994'', do pass with the following

                               AMENDMENT:

            Strike out all after the enacting clause and insert:

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Omnibus Budget Reconciliation Act of 
1993''.

SEC. 2. TABLE OF CONTENTS.

    The table of contents is as follows:

       TITLE I--COMMITTEE ON AGRICULTURE, NUTRITION, AND FORESTRY

                 TITLE II--COMMITTEE ON ARMED SERVICES

      TITLE III--COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS

              TITLE IV--COMMUNICATIONS AND TRANSPORTATION

           TITLE V--COMMITTEE ON ENERGY AND NATURAL RESOURCES

          TITLE VI--COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS

  TITLE VII--FINANCE COMMITTEE RECONCILIATION PROVISIONS RELATING TO 
                 MEDICARE, MEDICAID, AND OTHER PROGRAMS

            TITLE VIII--FINANCE COMMITTEE REVENUE PROVISIONS

                TITLE IX--COMMITTEE ON FOREIGN RELATIONS

               TITLE X--COMMITTEE ON GOVERNMENTAL AFFAIRS

                  TITLE XI--COMMITTEE ON THE JUDICIARY

           TITLE XII--COMMITTEE ON LABOR AND HUMAN RESOURCES

                     TITLE XIII--VETERANS' PROGRAMS

                   TITLE XIV--ENFORCEMENT PROCEDURES

                   TITLE XV--MISCELLANEOUS PROVISIONS

       TITLE I--COMMITTEE ON AGRICULTURE, NUTRITION, AND FORESTRY

SEC. 1001. SHORT TITLE AND TABLE OF CONTENTS.

    (a) Short Title.--This title may be cited as the ``Agricultural 
Reconciliation Act of 1993''.
    (b) Table of Contents.--The table of contents of this title is as 
follows:

Sec. 1001. Short title and table of contents.

                     Subtitle A--Commodity Programs

Sec. 1101. Wheat program.
Sec. 1102. Feed grain program.
Sec. 1103. Upland cotton program.
Sec. 1104. Rice program.
Sec. 1105. Dairy program.
Sec. 1106. Tobacco program.
Sec. 1107. Sugar program.
Sec. 1108. Oilseeds program.
Sec. 1109. Peanut program.
Sec. 1110. Honey program.
Sec. 1111. Wool and mohair program.

               Subtitle B--Restructuring of Loan Programs

Sec. 1201. Electric and telephone loan programs.

                     Subtitle C--Food Stamp Program

Sec. 1301. Uniform reimbursement rates.

                     Subtitle D--Agricultural Trade

Sec. 1401. Market promotion program.
Sec. 1402. Acreage reduction requirements.
Sec. 1403. End-use certificates.
Sec. 1404. Sense of Congress regarding the export of vegetable oil.

                       Subtitle E--Miscellaneous

Sec. 1501. Federal crop insurance.
Sec. 1502. Environmental conservation acreage reserve program 
                            amendments.
Sec. 1503. Admission, entrance, and recreation fees.
Sec. 1504. Sense of the Senate regarding deficit reduction.

                     Subtitle A--Commodity Programs

SEC. 1101. WHEAT PROGRAM.

    Section 107B(c)(1)(E) of the Agricultural Act of 1949 (7 U.S.C. 
1445b-3a(c)(1)(E)) is amended--
            (1) in the subparagraph heading, by striking ``0/92 
        program'' and inserting ``0/85 program''; and
            (2) by inserting after ``8 percent'' both places it appears 
        in clause (i) the following: ``for each of the 1991 through 
        1993 crops, and 15 percent for each of the 1994 and 1995 crops 
        (except as provided in clause (vii)),'', and by adding at the 
        end of the subparagraph the following new clause:
                            ``(vii) Exceptions to 0/85.--In the case of 
                        each of the 1994 and 1995 crops of wheat, 
                        producers on a farm shall be eligible to 
                        receive deficiency payments as provided in 
                        clause (ii) if an acreage limitation program 
                        under subsection (e) is in effect for the crop 
                        and--
                                    ``(I)(aa) the producers have been 
                                determined by the Secretary (in 
                                accordance with section 503(c)) to be 
                                prevented from planting the crop or 
                                have incurred a reduced yield for the 
                                crop (due to a natural disaster); and
                                    ``(bb) the producers elect to 
                                devote a portion of the maximum payment 
                                acres for wheat (as calculated under 
                                subparagraph (C)(ii)) equal to more 
                                than 8 percent of the wheat acreage, to 
                                conservation uses; or
                                    ``(II) the producers elect to 
                                devote a portion of the maximum payment 
                                acres for wheat (as calculated under 
                                subparagraph (C)(ii)) equal to more 
                                than 8 percent of the wheat acreage, to 
                                alternative crops as provided in 
                                subparagraph (F).''.

SEC. 1102. FEED GRAIN PROGRAM.

    (a) 0/92 Program.--Section 105B(c)(1)(E) of the Agricultural Act of 
1949 (7 U.S.C. 1444f(c)(1)(E)) is amended--
            (1) in the subparagraph heading, by striking ``0/92 
        program'' and inserting ``0/85 program''; and
            (2) by inserting after ``8 percent'' both places it appears 
        in clause (i) the following: ``for each of the 1991 through 
        1993 crops, and 15 percent for each of the 1994 and 1995 crops 
        (except as provided in clause (vii)),'', and by adding at the 
        end of the subparagraph the following new clause:
                            ``(vii) Exceptions to 0/85.--In the case of 
                        each of the 1994 and 1995 crops of feed grains, 
                        producers on a farm shall be eligible to 
                        receive deficiency payments as provided in 
                        clause (ii) if an acreage limitation program 
                        under subsection (e) is in effect for the crop 
                        and--
                                    ``(I)(aa) the producers have been 
                                determined by the Secretary (in 
                                accordance with section 503(c)) to be 
                                prevented from planting the crop or 
                                have incurred a reduced yield for the 
                                crop (due to a natural disaster); and
                                    ``(bb) the producers elect to 
                                devote a portion of the maximum payment 
                                acres for feed grains (as calculated 
                                under subparagraph (C)(ii)) equal to 
                                more than 8 percent of the feed grain 
                                acreage, to conservation uses; or
                                    ``(II) the producers elect to 
                                devote a portion of the maximum payment 
                                acres for feed grains (as calculated 
                                under subparagraph (C)(ii)) equal to 
                                more than 8 percent of the feed grain 
                                acreage, to alternative crops as 
                                provided in subparagraph (F).''.
    (b) Technical Amendment.--Section 105B(c)(1)(B)(iii)(IV)(bb) of 
such Act is amended by striking ``clause (i)(I)'' and inserting 
``clauses (i)(I) and (ii)(I)''.

SEC. 1103. UPLAND COTTON PROGRAM.

    (a) 50/92 Program.--Section 103B(c)(1)(D) of the Agricultural Act 
of 1949 (7 U.S.C. 1444-2(c)(1)(D)) is amended--
            (1) in the subparagraph heading, by striking ``50/92 
        program'' and inserting ``50/85 program''; and
            (2) by inserting after ``8 percent'' both places it appears 
        in clause (i) the following: ``for each of the 1991 through 
        1993 crops, and 15 percent for each of the 1994 and 1995 crops 
        (except as provided in clause (v)(II)),'', and in clause (v)--
                    (A) by striking ``(v) Prevented planting.--If'' and 
                inserting the following:
                            ``(v) Prevented planting and reduced 
                        yields.--
                                    ``(I) 1991 through 1993 crops.--In 
                                the case of each of the 1991 through 
                                1993 crops of upland cotton, if''; and
                    (B) by adding at the end the following new 
                subclause:
                                    ``(II) 1994 and 1995 crops.--In the 
                                case of each of the 1994 and 1995 crops 
                                of upland cotton, producers on a farm 
                                shall be eligible to receive deficiency 
                                payments as provided in clause (iii) if 
                                an acreage limitation program under 
                                subsection (e) is in effect for the 
                                crop and--
                                            ``(aa) the producers have 
                                        been determined by the 
                                        Secretary (in accordance with 
                                        section 503(c)) to be prevented 
                                        from planting the crop or have 
                                        incurred a reduced yield for 
                                        the crop (due to a natural 
                                        disaster) and the producers 
                                        elect to devote a portion of 
                                        the maximum payment acres for 
                                        upland cotton (as calculated 
                                        under subparagraph (C)(ii)) 
                                        equal to more than 8 percent of 
                                        the upland cotton acreage, to 
                                        conservation uses; or
                                            ``(bb) the producers elect 
                                        to devote a portion of the 
                                        maximum payment acres for 
                                        upland cotton (as calculated 
                                        under subparagraph (C)(ii)) 
                                        equal to more than 8 percent of 
                                        the upland cotton acreage, to 
                                        alternative crops as provided 
                                        in subparagraph (E).''.
    (b) Acreage Limitation Program.--Section 103B(e)(1)(D) of such Act 
is amended by inserting after ``30 percent'' the following: ``for each 
of the 1991 through 1994 crops, and 29\1/2\ percent for the 1995 
crop''.

SEC. 1104. RICE PROGRAM.

    Section 101B(c)(1)(D) of the Agricultural Act of 1949 (7 U.S.C. 
1441-2(c)(1)(D)) is amended--
            (1) in the subparagraph heading, by striking ``50/92 
        program'' and inserting ``50/85 program''; and
            (2) by inserting after ``8 percent'' both places it appears 
        in clause (i) the following: ``for each of the 1991 through 
        1993 crops, and 15 percent for each of the 1994 and 1995 crops 
        (except as provided in clause (v)(II)),'', and in clause (v)--
                    (A) by striking ``(v) Prevented planting.--If'' and 
                inserting the following:
                            ``(v) Prevented planting and reduced 
                        yields.--
                                    ``(I) 1991 through 1993 crops.--In 
                                the case of each of the 1991 through 
                                1993 crops of rice, if''; and
                    (B) by adding at the end the following new 
                subclause:
                                    ``(II) 1994 and 1995 crops.--In the 
                                case of each of the 1994 and 1995 crops 
                                of rice, producers on a farm shall be 
                                eligible to receive deficiency payments 
                                as provided in clause (iii) if an 
                                acreage limitation program under 
                                subsection (e) is in effect for the 
                                crop and--
                                            ``(aa) the producers have 
                                        been determined by the 
                                        Secretary (in accordance with 
                                        section 503(c)) to be prevented 
                                        from planting the crop or have 
                                        incurred a reduced yield for 
                                        the crop (due to a natural 
                                        disaster) and the producers 
                                        elect to devote a portion of 
                                        the maximum payment acres for 
                                        rice (as calculated under 
                                        subparagraph (C)(ii)) equal to 
                                        more than 8 percent of the rice 
                                        acreage, to conservation uses; 
                                        or
                                            ``(bb) the producers elect 
                                        to devote a portion of the 
                                        maximum payment acres for rice 
                                        (as calculated under 
                                        subparagraph (C)(ii)) equal to 
                                        more than 8 percent of the rice 
                                        acreage, to alternative crops 
                                        as provided in subparagraph 
                                        (E).''.

SEC. 1105. DAIRY PROGRAM.

    (a) In General.--Section 204 of the Agricultural Act of 1949 (7 
U.S.C. 1446e) is amended--
            (1) in subsection (c)(3)--
                    (A) in the first sentence of subparagraph (A), by 
                striking ``The Secretary'' and inserting ``Subject to 
                subparagraph (B), the Secretary'';
                    (B) by redesignating subparagraph (B) as 
                subparagraph (C); and
                    (C) by inserting after subparagraph (A) the 
                following new subparagraph:
                    ``(B) Guidelines.--In the case of purchases of 
                butter and nonfat dry milk that are made by the 
                Secretary under this section on or after the date of 
                enactment of this clause, in allocating the rate of 
                price support between the purchase prices of butter and 
                nonfat dry milk under this paragraph, the Secretary may 
                not--
                            ``(i) offer to purchase butter for more 
                        than $0.65 per pound; or
                            ``(ii) offer to purchase nonfat dry milk 
                        for less than $1.034 per pound.''; and
            (2) in subsection (h)(2)--
                    (A) by striking ``and'' at the end of subparagraph 
                (A);
                    (B) by striking the period at the end of 
                subparagraph (B) and inserting ``; and''; and
                    (C) by adding at the end the following new 
                subparagraph:
                    ``(C) during calendar year 1996, 10 cents per 
                hundredweight of milk marketed, which rate shall be 
                adjusted on or before May 1 of calendar year 1996 in 
                the manner provided in subparagraph (B).''.
    (b) Sale, Marketing, or Use of Bovine Growth Hormone.--Section 204 
of such Act is amended--
            (1) by redesignating subsection (k) as subsection (l); and
            (2) by inserting after subsection (j) the following new 
        subsection:
    ``(k) Sale, Marketing, or Use of Bovine Growth Hormone.--
            ``(1) Definition of bovine growth hormone.--As used in this 
        subsection, the term `bovine growth hormone' means a synthetic 
        growth hormone produced through the process of recombinant DNA 
        techniques that is intended for use in bovine animals.
            ``(2) Prohibition on sale, marketing, or use.--During the 
        period beginning on the date of enactment of this paragraph and 
        ending on September 30, 1994, it shall be unlawful for a person 
        to sell, market, or use bovine growth hormone for commercial 
        agricultural purposes.
            ``(3) Enforcement.--Not later than 30 days after the date 
        of enactment of this paragraph, the Secretary shall issue 
        regulations to provide for the enforcement of the prohibition 
        contained in paragraph (2).''.
    (c) Conforming Amendments.--Section 204 of such Act is amended--
            (1) in the section heading, by striking ``1995'' and 
        inserting ``1996'';
            (2) by striking ``1995'' each place it appears (other than 
        in subsection (h)(2)(B)) and inserting ``1996''; and
            (3) in subsection (g)(2), by striking ``1994'' and 
        inserting ``1995''.

SEC. 1106. TOBACCO PROGRAM.

    (a) Domestic Marketing Assessment.--Part I of subtitle B of title 
III of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1311 et seq.) 
is amended by adding at the end the following new section:

``SEC. 320C. DOMESTIC MARKETING ASSESSMENT.

    ``(a) Certification.--A domestic manufacturer of cigarettes shall 
certify to the Secretary, for each calendar year, the percentage of the 
quantity of tobacco that the manufacturer uses to produce cigarettes 
during the year that is produced in the United States.
    ``(b) Penalties.--
            ``(1) In general.--A domestic manufacturer of cigarettes 
        that has failed, as determined by the Secretary after notice 
        and opportunity for a hearing, to use in the manufacture of 
        cigarettes during a calendar year at least 75 percent of 
        tobacco produced in the United States, or to comply with 
        subsection (a), shall be subject to the requirements of 
        subsections (c), (d), and (e).
            ``(2) Failure to certify.--For purposes of this section, if 
        a manufacturer fails to comply with subsection (a), the 
        manufacturer shall be presumed to have used only imported 
        tobacco in the manufacture of cigarettes produced by the 
        manufacturer.
            ``(3) Reports and records.--The Secretary may require a 
        manufacturer to make such reports and maintain such records as 
        are necessary to carry out this section in accordance with 
        section 373.
    ``(c) Domestic Marketing Assessment.--
            ``(1) In general.--A domestic manufacturer of cigarettes 
        described in subsection (b) shall remit to the Commodity Credit 
        Corporation a nonrefundable marketing assessment in accordance 
        with this subsection.
            ``(2) Amount.--The amount of an assessment imposed on a 
        manufacturer under this subsection shall be determined by 
        multiplying--
                    ``(A) the quantity by which the quantity of 
                imported tobacco used by the manufacturer to produce 
                cigarettes during a preceding calendar year exceeds 25 
                percent of the quantity of all tobacco used by the 
                manufacturer to produce cigarettes during the preceding 
                calendar year; by
                    ``(B) the difference between--
                            ``(i) \1/2\ of the sum of--
                                    ``(I) the average price per pound 
                                received by domestic producers for 
                                Burley tobacco during the preceding 
                                calendar year; and
                                    ``(II) the average price per pound 
                                received by domestic producers for 
                                Flue-cured tobacco during the preceding 
                                calendar year; and
                            ``(ii) the average price per pound of 
                        unmanufactured imported tobacco during the 
                        preceding calendar year, as determined by the 
                        Secretary.
            ``(3) Collection.--An assessment imposed under this 
        subsection shall be--
                    ``(A) collected by this Secretary and transmitted 
                to the Commodity Credit Corporation; and
                    ``(B) enforced in the same manner as provided in 
                section 320B.
    ``(d) Purchase of Burley Tobacco.--
            ``(1) In general.--A domestic manufacturer of cigarettes 
        described in subsection (b) shall purchase from the inventories 
        of the producer-owned cooperative marketing associations for 
        Burley tobacco described in section 320B(a)(2), at the 
        applicable list price published by the association, the 
        quantity of tobacco described in paragraph (2).
            ``(2) Quantity.--Subject to paragraph (3), the quantity of 
        Burley tobacco required to be purchased by a manufacturer 
        during a calendar year under this subsection shall equal \1/2\ 
        of the quantity of imported tobacco used by the manufacturer to 
        produce cigarettes during the preceding calendar year that 
        exceeds 25 percent of the quantity of all tobacco used by the 
        manufacturer to produce cigarettes during the preceding 
        calendar year.
            ``(3) Limitation.--If the total quantity of Burley tobacco 
        required to be purchased by all manufacturers under paragraph 
        (2) would reduce the inventories of the producer-owned 
        cooperative marketing associations for Burley tobacco to less 
        than the reserve stock level for Burley tobacco, the Secretary 
        shall reduce the quantity of tobacco required to be purchased 
        by manufacturers under paragraph (2), on a pro rata basis, to 
        ensure that the inventories will not be less than the reserve 
        stock level for Burley tobacco.
            ``(4) Noncompliance.--If a manufacturer fails to purchase 
        from the inventories of the producer-owned cooperative 
        marketing associations the quantity of Burley tobacco required 
        under this subsection, the manufacturer shall be subject to a 
        penalty of 75 percent of the average market price (calculated 
        to the nearest whole cent) for Burley tobacco for the 
        immediately preceding year on the quantity of tobacco as to 
        which the failure occurs.
            ``(5) Purchase requirements.--Tobacco purchased by a 
        manufacturer under this subsection shall not be included in 
        determining the quantity of tobacco purchased by the 
        manufacturer under section 320B.
    ``(e) Purchase of Flue-Cured Tobacco.--
            ``(1) In general.--A domestic manufacturer of cigarettes 
        described in subsection (b) shall purchase from the inventories 
        of the producer-owned cooperative marketing association for 
        Flue-cured tobacco described in section 320B(a)(2), at the 
        applicable list price published by the association, the 
        quantity of tobacco described in paragraph (2).
            ``(2) Quantity.--Subject to paragraph (3), the quantity of 
        Flue-cured tobacco required to be purchased by a manufacturer 
        during a calendar year under this subsection shall equal \1/2\ 
        of the quantity of imported tobacco used by the manufacturer to 
        produce cigarettes during the preceding calendar year that 
        exceeds 25 percent of the quantity of all tobacco used by the 
        manufacturer to produce cigarettes during the preceding 
        calendar year.
            ``(3) Limitation.--If the total quantity of Flue-cured 
        tobacco required to be purchased by all manufacturers under 
        paragraph (2) would reduce the inventories of the producer-
        owned cooperative marketing association for Flue-cured tobacco 
        to less than the reserve stock level for Flue-cured tobacco, 
        the Secretary shall reduce the quantity of tobacco required to 
        be purchased by manufacturers under paragraph (2), on a pro 
        rata basis, to ensure that the inventories will not be less 
        than the reserve stock level for Flue-cured tobacco.
            ``(4) Noncompliance.--If a manufacturer fails to purchase 
        from the inventories of the producer-owned cooperative 
        marketing association the quantity of Flue-cured tobacco 
        required under this subsection, the manufacturer shall be 
        subject to a penalty of 75 percent of the average market price 
        (calculated to the nearest whole cent) for Flue-cured tobacco 
        for the immediately preceding year on the quantity of tobacco 
        as to which the failure occurs.
            ``(5) Purchase requirements.--Tobacco purchased by a 
        manufacturer under this subsection shall not be included in 
        determining the quantity of tobacco purchased by the 
        manufacturer under section 320B.
    ``(f) Enforcement.--The Secretary may enforce this section in the 
courts of the United States.''.
    (b) Budget Deficit Assessment.--
            (1) In general.--Section 106 of the Agricultural Act of 
        1949 (7 U.S.C. 1445) is amended--
                    (A) in subsection (g)(1), by striking ``1995'' and 
                inserting ``1998''; and
                    (B) by adding at the end the following new 
                subsection:
    ``(h)(1) Effective only for each of the 1994 through 1998 crops of 
tobacco, an importer of tobacco that is produced outside the United 
States shall remit to the Commodity Credit Corporation a nonrefundable 
marketing assessment in an amount equal to the product obtained by 
multiplying--
            ``(A) the number of pounds of tobacco that is imported by 
        the importer; by
            ``(B) the sum of--
                    ``(i) the per pound marketing assessment imposed on 
                purchasers of domestic Burley tobacco pursuant to 
                subsection (g); and
                    ``(ii) the per pound marketing assessment imposed 
                on purchasers of domestic Flue-cured tobacco pursuant 
                to subsection (g).
    ``(2) An assessment imposed under this subsection shall be paid by 
the importer.
    ``(3)(A) The importer shall remit the assessment at such time and 
in such manner as may be prescribed by the Secretary.
    ``(B) If the importer fails to comply with subparagraph (A), the 
importer shall be liable for a marketing penalty at a rate equal to 
37.5 percent of the sum of the average market price (calculated to the 
nearest whole cent) of Flue-cured and Burley tobacco for the 
immediately preceding year on the quantity of tobacco as to which the 
failure occurs.
    ``(C) The Secretary may reduce an assessment in such amount as the 
Secretary determines equitable in any case in which the Secretary 
determines that the failure was unintentional or without knowledge on 
the part of the person concerned.
    ``(D) Any assessment provided for under this subsection shall be 
assessed by the Secretary after notice and opportunity for a hearing.
    ``(4)(A) Any person against whom a penalty is assessed under this 
subsection may obtain review of the penalty in an appropriate district 
court of the United States by filing a civil action in the court not 
later than 30 days after the penalty is imposed.
    ``(B) The Secretary shall promptly file in the court a certified 
copy of the record on which the penalty is based.
    ``(5) The district courts of the United States shall have 
jurisdiction to review and enforce any penalty imposed under this 
subsection.
    ``(6) An amount equivalent to any penalty collected by the 
Secretary under this subsection shall be deposited for use by the 
Commodity Credit Corporation.''.
            (2) Importer assessments for no net cost tobacco fund.--
        Section 106A of such Act (7 U.S.C. 1445-1) is amended--
                    (A) in subsection (c), by inserting ``and 
                importers'' after ``purchasers'';
                    (B) in subsection (d)(1)(A)--
                            (i) by striking ``and'' at the end of 
                        clause (i); and
                            (ii) by inserting after clause (ii) the 
                        following new clause:
                            ``(iii) each importer of Flue-cured or 
                        Burley tobacco shall pay to the appropriate 
                        association, for deposit in the Fund of the 
                        association, an assessment, in an amount that 
                        is equal to the product obtained by 
                        multiplying--
                                    ``(I) the number of pounds of 
                                tobacco that is imported by the 
                                importer; by
                                    ``(II) the sum of the amount of per 
                                pound producer contributions and 
                                purchaser assessments that are payable 
                                by domestic producers and purchasers of 
                                Flue-cured and Burley tobacco under 
                                clauses (i) and (ii); and'';
                    (C) in subsection (d)(2)--
                            (i) by inserting ``or importer'' after ``or 
                        purchaser'';
                            (ii) by striking ``and'' at the end of 
                        subparagraph (B);
                            (iii) by inserting ``and'' at the end of 
                        subparagraph (C); and
                            (iv) by adding at the end the following new 
                        subparagraph:
                    ``(D) if the tobacco involved is imported by an 
                importer, from the importer.''; and
                    (D) in subsection (h)(1)--
                            (i) by redesignating subparagraphs (B) and 
                        (C) as subparagraphs (C) and (D), respectively; 
                        and
                            (ii) by inserting after subparagraph (A) 
                        the following new subparagraph:
    ``(B) Each importer who fails to pay to the association an 
assessment as required by subsection (d)(2) at such time and in such 
manner as may be prescribed by the Secretary, shall be liable, in 
addition to any amount due, to a marketing penalty at a rate equal to 
75 percent of the average market price (calculated to the nearest whole 
cent) for the respective kind of tobacco for the immediately preceding 
year on the quantity of tobacco as to which the failure occurs.''.
            (3) Importer assessments to no net cost tobacco account.--
        Section 106B of such Act (7 U.S.C. 1445-2) is amended--
                    (A) in subsection (c)(1), by striking ``producers 
                and purchasers'' and inserting ``producers, purchasers, 
                and importers'';
                    (B) in subsection (d)(1)--
                            (i) by designating the first and second 
                        sentences as subparagraphs (A) and (B), 
                        respectively; and
                            (ii) by adding at the end the following new 
                        subparagraph:
    ``(C) The Secretary shall also require (in lieu of any requirement 
under section 106A(d)(1)) that each importer of Flue-cured and Burley 
tobacco shall pay to the Corporation, for deposit in the Account of the 
association, an assessment, as determined under paragraph (2) and 
collected under paragraph (3), with respect to purchases of all such 
kind of tobacco imported by the importer.'';
                    (C) in subsection (d)(2), by adding at the end the 
                following new subparagraph:
    ``(C) The amount of the assessment to be paid by importers shall be 
an amount that is equal to the product obtained by multiplying--
            ``(i) the number of pounds of tobacco that is imported by 
        the importer; by
            ``(ii) the sum of the amount of per pound producer and 
        purchaser assessments that are payable by domestic producers 
        and purchasers of the respective kind of tobacco under this 
        paragraph.'';
                    (D) in subsection (d)(3), by adding at the end the 
                following new subparagraph:
    ``(D) If Flue-cured or Burley tobacco is imported by an importer, 
any importer assessment required by subsection (d) shall be collected 
from the importer.''; and
                    (E) in subsection (j)(1)--
                            (i) by redesignating subparagraphs (B) and 
                        (C) as subparagraphs (C) and (D), respectively; 
                        and
                            (ii) by inserting after subparagraph (A) 
                        the following new subparagraph:
    ``(B) Each importer who fails to pay to the Corporation an 
assessment as required by subsection (d) at such time and in such 
manner as may be prescribed by the Secretary, shall be liable, in 
addition to any amount due, to a marketing penalty at a rate equal to 
75 percent of the average market price (calculated to the nearest whole 
cent) for the respective kind of tobacco for the immediately preceding 
year on the quantity of tobacco as to which the failure occurs.''.
    (c) Fees for Inspecting Imported Tobacco.--The second sentence of 
section 213(d) of the Tobacco Adjustment Act of 1983 (7 U.S.C. 511r(d)) 
is amended by inserting before the period at the end the following: ``, 
and which shall be comparable to fees and charges fixed and collected 
for services provided in connection with tobacco produced in the United 
States''.
    (d) Extension of Quota Reduction Floors.--
            (1) Burley tobacco.--Section 319(c)(3)(C)(ii) of the 
        Agricultural Adjustment Act of 1938 (7 U.S.C. 
        1314e(c)(3)(C)(ii)) is amended--
                    (A) by striking ``1993'' and inserting ``1996''; 
                and
                    (B) by inserting before the period at the end the 
                following: ``, except that, in the case of each of the 
                1995 and 1996 crops of Burley tobacco, the Secretary 
                may waive the requirements of this clause if the 
                Secretary determines that the requirements would likely 
                result in inventories of the producer-owned cooperative 
                marketing associations for Burley tobacco described in 
                section 320B(a)(2) to exceed 150 percent of the reserve 
                stock level for Burley tobacco''.
            (2) Flue-cured tobacco.--Section 317(a)(1)(C)(ii) of such 
        Act (7 U.S.C. 1314c(a)(1)(C)(ii)) is amended--
                    (A) by striking ``1993'' and inserting ``1996''; 
                and
                    (B) by inserting before the period at the end the 
                following: ``, except that, in the case of each of the 
                1995 and 1996 crops of Flue-cured tobacco, the 
                Secretary may waive the requirements of this clause if 
                the Secretary determines that the requirements would 
                likely result in inventories of the producer-owned 
                cooperative marketing association for Flue-cured 
                tobacco described in section 320B(a)(2) to exceed 150 
                percent of the reserve stock level for Flue-cured 
                tobacco''.

SEC. 1107. SUGAR PROGRAM.

    Section 206(i) of the Agricultural Act of 1949 (7 U.S.C. 1446g(i)) 
is amended--
            (1) in paragraph (1), by striking ``equal to'' and all that 
        follows through the period and inserting the following: ``equal 
        to--
                    ``(A) in the case of marketings during each of 
                fiscal years 1992 through 1994, .18 cents per pound of 
                raw cane sugar, processed by the processor from 
                domestically produced sugarcane or sugarcane molasses, 
                that has been marketed (including the transfer or 
                delivery of the sugar to a refinery for further 
                processing or marketing); and
                    ``(B) in the case of marketings during each of 
                fiscal years 1995 and 1996, .198 cents per pound of raw 
                cane sugar, processed by the processor from 
                domestically produced sugarcane or sugarcane molasses, 
                that has been marketed (including the transfer or 
                delivery of the sugar to a refinery for further 
                processing or marketing).''; and
            (2) in paragraph (2), by striking ``equal to'' and all that 
        follows through the period and inserting the following: ``equal 
        to--
                    ``(A) in the case of marketings during each of 
                fiscal years 1992 through 1994, .193 cents per pound of 
                beet sugar, processed by the processor from 
                domestically produced sugar beets or sugar beet 
                molasses, that has been marketed; and
                    ``(B) in the case of marketings during each of 
                fiscal years 1995 and 1996, .2123 cents per pound of 
                beet sugar, processed by the processor from 
                domestically produced sugar beets or sugar beet 
                molasses, that has been marketed.''.

SEC. 1108. OILSEEDS PROGRAM.

    (a) Loan Level.--Section 205(c) of the Agricultural Act of 1949 (7 
U.S.C. 1446f(c)) is amended--
            (1) in paragraph (1), by inserting after ``$5.02 per 
        bushel'' the following: ``for each of the 1991 through 1993 
        crops and $4.92 per bushel for each of the 1994 and 1995 
        crops''; and
            (2) in paragraph (2), by inserting after ``$0.089 per 
        pound'' the following: ``for each of the 1991 through 1993 
        crops and $0.087 per pound for each of the 1994 and 1995 
        crops''.
    (b) Loan Maturity.--Section 205(h) of such Act is amended by 
striking ``mature on the last day of the 9th month following the month 
the application for the loan is made.'' and inserting the following: 
``mature--
            ``(1) in the case of each of the 1991 through 1993 crops, 
        on the last day of the 9th month following the month the 
        application for the loan is made; and
            ``(2) in the case of each of the 1994 and 1995 crops, on 
        the last day of the 9th month following the month the 
        application for the loan is made, except that the loan may not 
        mature later than the last day of the fiscal year in which the 
        application is made.''.
    (c) Loan Origination Fee.--Section 205(m) of such Act is amended by 
adding at the end the following new paragraph:
            ``(3) Applicability.--This subsection shall apply only to 
        each of the 1991 through 1993 crops of oilseeds.''.

SEC. 1109. PEANUT PROGRAM.

    Section 108B(g) of the Agricultural Act of 1949 (7 U.S.C. 1445c-
3(g)) is amended--
            (1) in paragraph (1), by inserting after ``1 percent'' both 
        places it appears the following: ``for each of the 1991 through 
        1993 crops, and 1.1 percent for each of the 1994 and 1995 
        crops,''; and
            (2) in paragraph (2)(A)--
                    (A) in clause (i), by striking ``\1/2\ percent'' 
                and inserting ``.5 percent for each of the 1991 through 
                1993 crops, and .6 percent for each of the 1994 and 
                1995 crops,''; and
                    (B) in clause (ii), by striking ``\1/2\ percent'' 
                and inserting ``.5 percent''.

SEC. 1110. HONEY PROGRAM.

    (a) Reduced Support Rate.--Section 207(a) of the Agricultural Act 
of 1949 (7 U.S.C. 1446h(a)) is amended by striking ``than 53.8 cents 
per pound.'' and inserting the following: ``than--
            ``(1) 53.8 cents per pound for each of the 1991 through 
        1993 crops; and
            ``(2) 47 cents per pound for each of the 1994 through 1997 
        crops.''.
    (b) Payment Limitations.--Section 207(e)(1) of such Act is 
amended--
            (1) by striking ``and'' at the end of subparagraph (C); and
            (2) by striking subparagraph (D) and inserting the 
        following new subparagraphs:
                    ``(D) $125,000 in the 1994 crop year;
                    ``(E) $100,000 in the 1995 crop year;
                    ``(F) $75,000 in the 1996 crop year; and
                    ``(G) $50,000 in the 1997 crop year.''.
    (c) Conforming Amendments.--Section 207 of such Act (as amended by 
subsection (b)) is further amended by striking ``1995'' each place it 
appears (other than in subsection (e)(1)(E)) and inserting ``1997''.

SEC. 1111. WOOL AND MOHAIR PROGRAM.

    (a) Payment Limitations.--Section 704(b)(1) of the National Wool 
Act of 1954 (7 U.S.C. 1783(b)(1)) is amended--
            (1) by striking ``and'' at the end of subparagraph (C); and
            (2) by striking subparagraph (D) and inserting the 
        following new subparagraphs:
                    ``(D) $125,000 for the 1994 marketing year;
                    ``(E) $100,000 for the 1995 marketing year;
                    ``(F) $75,000 for the 1996 marketing year; and
                    ``(G) $50,000 for the 1997 marketing year.''.
    (b) Support Price for Shorn Wool.--Paragraph (3) of section 703(b) 
of such Act (7 U.S.C. 1782(b)(3)) is amended to read as follows:
    ``(3) Effective only for each of the 1994 through 1997 marketing 
years, the support price for shorn wool shall not exceed the support 
price for shorn wool for the 1993 marketing year.''.
    (c) Marketing Assessment.--Section 704(c) of such Act (7 U.S.C. 
1783(c)) is amended by striking ``through 1995'' and inserting ``and 
1992''.
    (d) Marketing Charges.--Section 706 of such Act (7 U.S.C. 1785) is 
amended by inserting after the second sentence the following new 
sentence: ``In determining the net sales proceeds and national payment 
rates for shorn wool and shorn mohair, the Secretary shall not deduct 
marketing charges for commissions, coring, or grading.''.
    (e) Technical and Conforming Amendments.--
            (1) Technical amendment.--Section 703(b)(2) of such Act (7 
        U.S.C. 1782(b)(2)) is amended by striking ``1982'' and 
        inserting ``1990''.
            (2) Conforming amendments.--Section 703 of such Act (7 
        U.S.C. 1782) is amended by striking ``1995'' both places it 
        appears in subsections (a) and (b) and inserting ``1997''.

               Subtitle B--Restructuring of Loan Programs

SEC. 1201. ELECTRIC AND TELEPHONE LOAN PROGRAMS.

    (a) Loan Programs Under the Rural Electrification Act of 1936.--
            (1) Insured loan programs.--Section 305 of the Rural 
        Electrification Act of 1936 (7 U.S.C. 935) is amended--
                    (A) by striking subsections (b) and (d);
                    (B) by redesignating subsection (c) as subsection 
                (b); and
                    (C) by inserting after subsection (b) (as so 
                redesignated) the following new subsections:
    ``(c) Insured Electric Loans.--
            ``(1) Hardship loans.--
                    ``(A) In general.--The Administrator shall make 
                insured electric loans, to the extent of qualifying 
                applications for the loans, at an interest rate of 5 
                percent per year to any applicant for a loan who meets 
                each of the following requirements:
                            ``(i) The average revenue per kilowatt-hour 
                        sold by the applicant is not less than 120 
                        percent of the average revenue per kilowatt-
                        hour sold by all utilities in the State in 
                        which the applicant provides service.
                            ``(ii) The average residential revenue per 
                        kilowatt-hour sold by the applicant is not less 
                        than 120 percent of the average residential 
                        revenue per kilowatt-hour sold by all utilities 
                        in the State in which the applicant provides 
                        service.
                            ``(iii) The average per capita income of 
                        the residents receiving electric service from 
                        the applicant is less than the average per 
                        capita income of the residents of the State in 
                        which the applicant provides service, or the 
                        median household income of the households 
                        receiving electric service from the applicant 
                        is less than the median household income of the 
                        households in the State.
                    ``(B) Severe hardship loans.--In addition to 
                hardship loans that are made under subparagraph (A), 
                the Administrator may make an insured electric loan at 
                an interest rate of 5 percent per year to an applicant 
                for a loan if, in the sole discretion of the 
                Administrator, the applicant has experienced a severe 
                hardship.
                    ``(C) Limitation.--The Administrator may not make a 
                loan under this paragraph to an applicant for the 
                purpose of furnishing or improving electric service to 
                a consumer located in an urban area (as defined by the 
                Bureau of the Census) if the average number of 
                consumers per mile of line of the total electric system 
                of the applicant exceeds 17.
            ``(2) Municipal rate loans.--
                    ``(A) In general.--The Administrator shall make 
                insured electric loans, to the extent of qualifying 
                applications for the loans, at the interest rate 
                described in subparagraph (B) for the term or terms 
                selected by the applicant pursuant to subparagraph (C).
                    ``(B) Interest rate.--
                            ``(i) In general.--Subject to clause (ii), 
                        the interest rate described in this 
                        subparagraph on a loan to a qualifying 
                        applicant shall be--
                                    ``(I) the interest rate determined 
                                by the Administrator to be equal to the 
                                current market yield on outstanding 
                                municipal obligations with remaining 
                                periods to maturity similar to the term 
                                selected by the applicant pursuant to 
                                subparagraph (C), but not greater than 
                                the rate determined under section 
                                307(a)(3)(A) of the Consolidated Farm 
                                and Rural Development Act (7 U.S.C. 
                                1927(a)(3)(A)) that is based on the 
                                current market yield on outstanding 
                                municipal obligations; plus
                                    ``(II) if the applicant for the 
                                loan makes an election pursuant to 
                                subparagraph (D) to include in the loan 
                                agreement the right of the applicant to 
                                prepay the loan, a rate equal to the 
                                amount by which--
                                            ``(aa) the interest rate on 
                                        commercial loans for a similar 
                                        period that afford the borrower 
                                        such a right; exceeds
                                            ``(bb) the interest rate on 
                                        commercial loans for the period 
                                        that do not afford the borrower 
                                        such a right.
                            ``(ii) Maximum rate.--The interest rate 
                        described in this subparagraph on a loan to an 
                        applicant for the loan shall not exceed 7 
                        percent if--
                                    ``(I) the average number of 
                                consumers per mile of line of the total 
                                electric system of the applicant is 
                                less than 5.50; or
                                    ``(II)(aa) the average revenue per 
                                kilowatt-hour sold by the applicant is 
                                more than the average revenue per 
                                kilowatt-hour sold by all utilities in 
                                the State in which the applicant 
                                provides service; and
                                    ``(bb) the average per capita 
                                income of the residents receiving 
                                electric service from the applicant is 
                                less than the average per capita income 
                                of the residents of the State in which 
                                the applicant provides service, or the 
                                median household income of the 
                                households receiving electric service 
                                from the applicant is less than the 
                                median household income of the 
                                households in the State.
                            ``(iii) Exception.--Clause (ii) shall not 
                        apply to a loan to be made to an applicant for 
                        the purpose of furnishing or improving electric 
                        service to consumers located in an urban area 
                        (as defined by the Bureau of the Census) if the 
                        average number of consumers per mile of line of 
                        the total electric system of the applicant 
                        exceeds 17.
                    ``(C) Loan term.--
                            ``(i) In general.--Subject to clause (ii), 
                        the applicant for a loan under this paragraph 
                        may select the term for which an interest rate 
                        shall be determined pursuant to subparagraph 
                        (B), and, at the end of the term (and any 
                        succeeding term selected by the applicant under 
                        this subparagraph), may renew the loan for 
                        another term selected by the applicant.
                            ``(ii) Maximum term.--
                                    ``(I) Applicant.--The applicant may 
                                not select a term that ends more than 
                                35 years after the beginning of the 
                                first term the applicant selects under 
                                clause (i).
                                    ``(II) Administrator.--The 
                                Administrator may prohibit an applicant 
                                from selecting a term that would result 
                                in the total term of the loan being 
                                greater than the expected useful life 
                                of the assets being financed.
                    ``(D) Call provision.--The Administrator shall 
                offer any applicant for a loan under this paragraph the 
                option to include in the loan agreement the right of 
                the applicant to prepay the loan on terms consistent 
                with similar provisions of commercial loans.
            ``(3) Other source of credit not required in certain 
        cases.--The Administrator may not require any applicant for a 
        loan made under this subsection who is eligible for a loan 
        under paragraph (1) to obtain a loan from another source as a 
        condition of approving the application for the loan or 
        advancing any amount under the loan.
    ``(d) Insured Telephone Loans.--
            ``(1) Hardship loans.--
                    ``(A) In general.--The Administrator shall make 
                insured telephone loans, to the extent of qualifying 
                applications for the loans, at an interest rate of 5 
                percent per year, to any applicant who meets each of 
                the following requirements:
                            ``(i) The average number of subscribers per 
                        mile of line in the proposed service area of 
                        the applicant is not more than 4.
                            ``(ii) The applicant is capable of 
                        producing net income or margins, after interest 
                        payments on the loan applied for, of not less 
                        than 100 percent (but not more than 300 
                        percent) of the interest requirements on all of 
                        the outstanding and proposed loans of the 
                        applicant.
                            ``(iii) The Administrator has approved a 
                        telecommunications modernization plan for the 
                        State under paragraph (3) and, if the plan was 
                        developed by telephone borrowers under this 
                        title, the applicant is a participant in the 
                        plan.
                    ``(B) Authority to waive tier requirement.--The 
                Administrator may waive the requirement of subparagraph 
                (A)(ii) in any case in which the Administrator 
                determines (and sets forth the reasons for the waiver 
                in writing) that the requirement would prevent 
                emergency restoration of the telephone system of the 
                applicant or result in severe hardship to the 
                applicant.
                    ``(C) Effect of lack of funds.--On request of any 
                applicant who is eligible for a loan under this 
                paragraph for which funds are not available, the 
                applicant shall be considered to have applied for a 
                loan under title IV.
            ``(2) Cost-of-money loans.--
                    ``(A) In general.--The Administrator may make 
                insured telephone loans for the acquisition, purchase, 
                and installation of telephone lines, systems, and 
                facilities (other than buildings used primarily for 
                administrative purposes, vehicles not used primarily in 
                construction, and customer premise equipment) related 
                to the furnishing, improvement, or extension of rural 
                telecommunications service, at an interest rate equal 
                to the then current cost of money to the Government of 
                the United States for loans of similar maturity, but 
                not more than 7 percent per year, to any applicant for 
                a loan who meets the following requirements:
                            ``(i) The average number of subscribers per 
                        mile of line in the service area of the 
                        applicant is not more than 15.
                            ``(ii) The applicant is capable of 
                        producing net income or margins, before 
                        interest payments on the loan applied for, of 
                        not less than 100 percent (but not more than 
                        500 percent) of the interest requirements on 
                        all of the outstanding and proposed loans of 
                        the applicant.
                            ``(iii) The Administrator has approved a 
                        telecommunications modernization plan for the 
                        State under paragraph (3), and, if the plan was 
                        developed by telephone borrowers under this 
                        title, the applicant is a participant in the 
                        plan.
                    ``(B) Call provision.--The Administrator shall 
                offer any applicant for a loan under this paragraph the 
                option to include in the loan agreement the right of 
                the applicant to prepay the loan on terms consistent 
                with similar provisions of commercial loans.
                    ``(C) Concurrent loan authority.--On request of any 
                applicant for a loan under this paragraph during any 
                fiscal year, the Administrator shall--
                            ``(i) consider the application to be for a 
                        loan under this paragraph and a loan under 
                        section 408; and
                            ``(ii) if the applicant is eligible for a 
                        loan, make a loan to the applicant under this 
                        paragraph in an amount equal to the amount that 
                        bears the same ratio to the total amount of 
                        loans for which the applicant is eligible under 
                        this paragraph and under section 408, as the 
                        amount made available for loans under this 
                        paragraph for the fiscal year bears to the 
                        total amount made available for loans under 
                        this paragraph and under section 408 for the 
                        fiscal year.
                    ``(D) Effect of lack of funds.--On request of any 
                applicant who is eligible for a loan under this 
                paragraph for which funds are not available, the 
                applicant shall be considered to have applied for a 
                loan guarantee under section 306.
            ``(3) State telecommunications modernization plans.--
                    ``(A) Approval.--If, not later than 180 days after 
                final regulations are promulgated to carry out this 
                paragraph, the public utility commission of any State 
                develops a telecommunications modernization plan that 
                meets the requirements of subparagraph (B), the 
                Administrator shall approve the plan for the State. If 
                a State does not develop a plan in accordance with the 
                requirements of the preceding sentence, the 
                Administrator shall approve any telecommunications 
                modernization plan for the State that meets the 
                requirements that is developed by a majority of the 
                borrowers of telephone loans made under this title who 
                are located in the State.
                    ``(B) Requirements.--For purposes of subparagraph 
                (A), a telecommunications modernization plan must, at a 
                minimum, meet the following objectives:
                            ``(i) The plan must provide for the 
                        elimination of party line service.
                            ``(ii) The plan must provide for the 
                        availability of telecommunications services for 
                        improved business, educational, and medical 
                        services.
                            ``(iii) The plan must encourage and improve 
                        computer networks and information highways for 
                        subscribers in rural areas.
                            ``(iv) The plan must provide for--
                                    ``(I) subscribers in rural areas to 
                                be able to receive through telephone 
                                lines--
                                            ``(aa) multiple voices;
                                            ``(bb) video images; and
                                            ``(cc) data at a rate of at 
                                        least 1,000,000 bits of 
                                        information per second; and
                                    ``(II) the proper routing of 
                                information to subscribers.
                            ``(v) The plan must provide for uniform 
                        deployment schedules to ensure that advanced 
                        services are deployed at the same time in rural 
                        and nonrural areas.
                            ``(vi) The plan must provide for such 
                        additional requirements for service standards 
                        as may be required by the Administrator.
                    ``(C) Finality of approval.--
                            ``(i) In general.--A telecommunications 
                        modernization plan approved under subparagraph 
                        (A) may not subsequently be disapproved. 
                        Notwithstanding subsection (c)(1)(A)(iii), 
                        subsection (c)(2)(A)(iii), and section 
                        408(b)(4)(C), the Administrator and the 
                        Governor of the telephone bank may make a loan 
                        to a borrower serving a State that does not 
                        have a telecommunication modernization plan 
                        approved by the Administrator if the loan is 
                        made less than 1 year after the Administrator 
                        has adopted final regulations implementing 
                        subsection (c)(3).''.
            (2) Rural telephone bank loan program.--Section 408 of such 
        Act (7 U.S.C. 948) is amended--
                    (A) in subsection (a), by striking ``, (2)'' and 
                all that follows through ``408 of this Act,'' and 
                inserting ``, (2) for the acquisition, purchase, and 
                installation of telephone lines, systems, and 
                facilities (other than buildings used primarily for 
                administrative purposes, vehicles not used primarily in 
                construction, and customer premise equipment) related 
                to the furnishing, improvement, or extension of rural 
                telecommunications service,''; and
                    (B) in subsection (b)--
                            (i) by striking paragraph (4) and inserting 
                        the following new paragraph:
            ``(4) The Governor of the telephone bank may make a loan 
        under this section only to an applicant for the loan who meets 
        the following requirements:
                    ``(A) The average number of subscribers per mile of 
                line in the service area of the applicant is not more 
                than 15.
                    ``(B) The applicant is capable of producing net 
                income or margins, after interest payments on the loan 
                applied for, of not less than 100 percent (but not more 
                than 500 percent) of the interest requirements on all 
                of the outstanding and proposed loans of the applicant.
                    ``(C) The Administrator has approved, under section 
                305(d)(3), a telecommunications modernization plan for 
                the State in which the applicant is located, and, if 
                the plan was developed by telephone borrowers under 
                title III, the applicant is a participant in the 
                plan.'';
                            (ii) in paragraph (8)--
                                    (I) by inserting ``(A)'' after 
                                ``(8)'';
                                    (II) by striking ``if such 
                                prepayment is not made later than 
                                September 30, 1988'' and inserting 
                                ``except for any prepayment penalty 
                                provided for in a loan agreement 
                                entered into before the date of 
                                enactment of the Omnibus Budget 
                                Reconciliation Act of 1993''; and
                                    (III) by adding at the end the 
                                following new subparagraph:
            ``(B) If a borrower prepays part or all of a loan made 
        under this section, then, notwithstanding section 407(b), the 
        Governor of the telephone bank shall use the full amount of the 
        prepayment to repay obligations of the telephone bank issued 
        pursuant to section 407(b) before October 1, 1991, to the 
        extent any such obligations are outstanding.''; and
                            (iii) by adding at the end the following 
                        new paragraphs:
            ``(9) On request of any applicant for a loan under this 
        section during any fiscal year, the Governor of the telephone 
        bank shall--
                    ``(A) consider the application to be for a loan 
                under this section and a loan under section 305(d)(2); 
                and
                    ``(B) if the applicant is eligible for a loan, make 
                a loan to the applicant under this section in an amount 
                equal to the amount that bears the same ratio to the 
                total amount of loans for which the applicant is 
                eligible under this section and under section 
                305(d)(2), as the amount made available for loans under 
                this section for the fiscal year bears to the total 
                amount made available for loans under this section and 
                under section 305(d)(2) for the fiscal year.
            ``(10) On request of any applicant who is eligible for a 
        loan under this section for which funds are not available, the 
        applicant shall be considered to have applied for a loan under 
        section 305(d)(2).''.
            (3) Funding.--Section 314 of such Act (7 U.S.C. 940d) is 
        amended to read as follows:

``SEC. 314. LIMITATIONS ON AUTHORIZATION OF APPROPRIATIONS.

    ``(a) Definition of Adjustment Percentage.--As used in this 
section, the term `adjustment percentage' means, with respect to a 
fiscal year, the percentage (if any) by which--
            ``(1) the average of the Consumer Price Index (as defined 
        in section 1(f)(5) of the Internal Revenue Code of 1986) for 
        the 1-year period ending on July 31 of the immediately 
        preceding fiscal year; exceeds
            ``(2) the average of the Consumer Price Index (as so 
        defined) for the 1-year period ending on July 31, 1993.
    ``(b) Fiscal Years 1994 through 1998.--In the case of each of 
fiscal years 1994 through 1998, there are authorized to be appropriated 
to the Administrator such sums as may be necessary for the cost of 
loans in the following amounts, for the following purposes:
            ``(1) Electric hardship loans.--For loans under section 
        305(c)(1)--
                    ``(A) for fiscal year 1994, $125,000,000; and
                    ``(B) for each of fiscal years 1995 through 1998, 
                $125,000,000, increased by the adjustment percentage 
                for the fiscal year.
            ``(2) Electric municipal rate loans.--For loans under 
        section 305(c)(2)--
                    ``(A) for fiscal year 1994, $600,000,000; and
                    ``(B) for each of fiscal years 1995 through 1998, 
                $600,000,000, increased by the adjustment percentage 
                for the fiscal year.
            ``(3) Telephone hardship loans.--For loans under section 
        305(d)(1)--
                    ``(A) for fiscal year 1994, $125,000,000; and
                    ``(B) for each of fiscal years 1995 through 1998, 
                $125,000,000, increased by the adjustment percentage 
                for the fiscal year.
            ``(4) Telephone cost-of-money loans.--For loans under 
        section 305(d)(2)--
                    ``(A) for fiscal year 1994, $198,000,000; and
                    ``(B) for each of fiscal years 1995 through 1998, 
                $198,000,000, increased by the adjustment percentage 
                for the fiscal year.
    ``(c) Funding Levels.--The Administrator shall make insured loans 
under this title for the purposes, in the amounts, and for the periods 
of time specified in subsection (b), as provided in advance in 
appropriations Acts.
    ``(d) Availability of Funds for Insured Loans.--Amounts made 
available for loans under section 305 are authorized to remain 
available until expended.''.
            (4) Miscellaneous amendments.--
                    (A) Section 2 of such Act (7 U.S.C. 902) is 
                amended--
                            (i) by inserting ``(a)'' before ``The 
                        Administrator'';
                            (ii) by striking ``telephone service in 
                        rural areas, as hereinafter provided;'' and 
                        inserting ``electric and telephone service in 
                        rural areas, as provided in this Act, and for 
                        the purpose of assisting electric borrowers to 
                        implement demand side management and energy 
                        conservation programs;''; and
                            (iii) by adding at the end the following 
                        new subsection:
    ``(b) Not later than January 1, 1994, the Administrator shall issue 
interim regulations to implement the authority contained in subsection 
(a) to make loans for the purpose of assisting electric borrowers to 
implement demand side management and energy conservation programs. If 
the regulations are not issued by January 1, 1994, the Administrator 
shall consider any demand side management program that is approved by a 
State agency to be eligible for the loans.''.
                    (B) Section 4 of such Act (7 U.S.C. 904) is amended 
                by inserting after ``central station service'' the 
                following: ``and for the furnishing and improving of 
                electric service to persons in rural areas, including 
                by assisting electric borrowers to implement demand 
                side management and energy conservation programs''.
                    (C) Section 13 of such Act (7 U.S.C. 913) is 
                amended--
                            (i) by inserting ``, except as provided in 
                        section 203(b),'' before ``shall be deemed to 
                        mean any area''; and
                            (ii) by striking ``city, village, or 
                        borough having a population in excess of 
                        fifteen hundred inhabitants'' and inserting 
                        ``urban area, as defined by the Bureau of the 
                        Census''.
                    (D) Section 203(b) of such Act (7 U.S.C. 924(b)) is 
                amended by striking ``one thousand five hundred'' and 
                inserting ``5,000''.
                    (E) Section 305 of such Act (7 U.S.C. 935) (as 
                amended by subsection (a)(1)) is further amended--
                            (i) by striking ``Sec. 305. Insured Loans; 
                        Interest Rates and Lending Levels.--(a) The'' 
                        and inserting the following:

``SEC. 305. INSURED LOANS; INTEREST RATES AND LENDING LEVELS.

    ``(a) In General.--The''; and
                            (ii) in subsection (b), by striking ``(b) 
                        Loans'' and inserting ``(b) Insured Loans.--
                        Loans''.
                    (F) Section 307 of such Act (7 U.S.C. 937) is 
                amended by adding at the end the following new 
                sentence: ``The Administrator may not request any 
                applicant for an electric loan under this Act to apply 
                for and accept a loan in an amount exceeding 30 percent 
                of the credit needs of the applicant.''.
                    (G) Section 406 of such Act (7 U.S.C. 946) is 
                amended by adding at the end the following new 
                subsection:
    ``(i) The Governor of the telephone bank may invest in obligations 
of the United States the amounts in the account in the Treasury of the 
United States numbered 12X8139 (known as the `RTB Equity Fund').''.
                    (H) Section 18 of such Act (7 U.S.C. 918) is 
                amended--
                            (i) by inserting ``(a) No Consideration of 
                        Borrower's Level of General Funds.--'' before 
                        ``The Administrator''; and
                            (ii) by adding at the end the following new 
                        subsections:
    ``(b) No Loan Origination Fees.--The Administrator and the Governor 
of the telephone bank may not charge any fee or charge not expressly 
provided in this Act in connection with any loan made or guaranteed 
under this Act.
    ``(c) Consultants.--
            ``(1) In general.--To facilitate timely action on 
        applications by borrowers for financial assistance under this 
        Act and for approvals required of the agency pursuant to the 
        terms of outstanding loan or security instruments or otherwise, 
        the Administrator may use consultants funded by the borrower, 
        paid for out of the general funds of the borrower, for 
        financial, legal, engineering, and other technical advice and 
        services in connection with the review of the application by 
        the Rural Electrification Administration.
            ``(2) Conflicts of interest.--The Administrator shall 
        establish procedures for the selection and the provision of 
        technical services by consultants to ensure that the 
        consultants have no financial or other potential conflicts of 
        interest in the outcome of the application of the borrower.
            ``(3) Payment of costs.--The Administrator may not, without 
        the consent of the borrower, require, as a condition of 
        processing an application for approval, that the borrower agree 
        to pay the costs, fees, and expenses of consultants hired to 
        provide technical or advisory services to the Administrator.
            ``(4) Contracts, grants, and agreements.--The Administrator 
        may enter into such contracts, grants, or cooperative 
        agreements as are necessary to carry out this section without 
        regard to any requirement for competition, section 3709 of the 
        Revised Statutes (41 U.S.C. 5) and section 3324 of title 31, 
        United States Code.
            ``(5) Use of consultants.--Nothing in this subsection shall 
        limit the authority of the Administrator to retain the services 
        of consultants from funds made available to the Administrator 
        or otherwise.''.
                    (I) Title III of such Act is amended by inserting 
                after section 306B (7 U.S.C. 936b) the following new 
                sections:

``SEC. 306C. ELIGIBILITY OF DISTRIBUTION BORROWERS FOR LOANS, LOAN 
              GUARANTEES, AND LIEN ACCOMMODATIONS.

    ``For the purpose of determining the eligibility of a distribution 
borrower not in default on the repayment of a loan made or guaranteed 
under this Act for a loan, loan guarantee, or lien accommodation under 
this title, a default by a borrower from which the distribution 
borrower purchases wholesale power shall not--
            ``(1) be considered a default by the distribution borrower;
            ``(2) reduce the eligibility of the distribution borrower 
        for assistance under this Act; or
            ``(3) be the cause, directly or indirectly, of imposing any 
        requirement or restriction on the borrower as a condition of 
        the assistance, except such requirements or restrictions as are 
        necessary to implement a debt restructuring agreed on by the 
        power supply borrower and the Government.

``SEC. 306D. ADMINISTRATIVE PROHIBITIONS APPLICABLE TO ELECTRIC 
              BORROWERS.

    ``The Administrator may not require prior approval of, impose any 
requirement, restriction, or prohibition with respect to the operations 
of, or deny or delay the granting of a lien accommodation to, any 
electric borrower under this Act whose net worth exceeds 110 percent of 
the outstanding principal balance on all loans made or guaranteed to 
the borrower by the Administrator.''.
    (b) Expanded Eligibility for Loans for Water and Waste Disposal 
Facilities.--Section 306(a)(1) of the Consolidated Farm and Rural 
Development Act (7 U.S.C. 1926(a)(1)) is amended by inserting after the 
first sentence the following new sentence: ``The Secretary may also 
make loans to any borrower to whom a loan has been made under the Rural 
Electrification Act of 1936 (7 U.S.C. 901 et seq.), for the 
conservation, development, use, and control of water, and the 
installation of drainage or waste disposal facilities, primarily 
serving farmers, ranchers, farm tenants, farm laborers, rural 
businesses, and other rural residents.''.
    (c) Rural Economic Development.--Section 364 of the Consolidated 
Farm and Rural Development Act (7 U.S.C. 2006f) is amended by adding at 
the end the following new subsection:
    ``(g) Rural Economic Development.--
            ``(1) In general.--A borrower of a loan or loan guarantee 
        under the Rural Electrification Act of 1936 (7 U.S.C. 901 et 
        seq.) shall be eligible for assistance under all programs 
        administered by the Rural Development Administration.
            ``(2) Participation.--The Administrator of the Rural 
        Development Administration shall encourage and facilitate the 
        full participation of borrowers referred to in paragraph (1) in 
        programs administered by the Rural Development 
        Administration.''.
    (d) Regulations.--Not later than October 1, 1993, interim final 
rules shall be issued by--
            (1) the Administrator of the Rural Electrification 
        Administration in the case of amendments made by this section 
        to programs administered by the Administrator; and
            (2) the Administrator of the Rural Development 
        Administration in the case of amendments made by this section 
        to programs administered by the Administrator.

                     Subtitle C--Food Stamp Program

SEC. 1301. UNIFORM REIMBURSEMENT RATES.

    (a) In General.--Section 16 of the Food Stamp Act of 1977 (7 U.S.C. 
2025) is amended--
            (1) in the first sentence of subsection (a)--
                    (A) by striking ``and (5)'' and inserting ``(5)'';
                    (B) by inserting before ``: Provided,'' the 
                following: ``, (6) automated data processing and 
                information retrieval systems subject to the conditions 
                set forth in subsection (g), (7) food stamp program 
                investigations and prosecutions, and (8) implementing 
                and operating the immigration status verification 
                system established under section 1137(d) of the Social 
                Security Act (42 U.S.C. 1320b-7(d))''; and
                    (C) in the proviso, by striking ``authorized to pay 
                each State agency an amount not less than 75 per centum 
                of the costs of State food stamp program investigations 
                and prosecutions, and is further'';
            (2) in subsection (g)--
                    (A) by striking ``an amount equal to 63 percent 
                effective on October 1, 1991, of'' and inserting ``the 
                amount authorized under subsection (a)(6) for''; and
                    (B) by striking ``automatic'' and inserting 
                ``automated'';
            (3) by striking subsection (j); and
            (4) by redesignating subsection (k) as subsection (j).
    (b) Effective Date.--
            (1) In general.--Except as provided in paragraph (2), the 
        amendments made by this section shall be effective with respect 
        to calendar quarters beginning on or after April 1, 1994.
            (2) Biennial legislatures.--In the case of a State whose 
        legislature meets biennially, and does not have a regular 
        session scheduled in calendar year 1994, and that demonstrates 
        to the satisfaction of the Secretary of Agriculture that there 
        is no mechanism, under the constitution and laws of the State, 
        for appropriating the additional funds required by the 
        amendments made by this section before the next such regular 
        legislative session, the Secretary may delay the effective date 
        of all or part of the amendments made by subsection (a) until 
        the beginning date of a calendar quarter that is not later than 
        the first calendar quarter beginning after the close of the 
        first regular session of the State legislature after the date 
        of enactment of this Act.

                     Subtitle D--Agricultural Trade

SEC. 1401. MARKET PROMOTION PROGRAM.

    (a) Reduction of Funding Level.--Section 211(c) of the Agricultural 
Trade Act of 1978 (7 U.S.C. 5641(c)) is amended--
            (1) in paragraph (1)--
                    (A) by striking ``1995'' and inserting ``1993''; 
                and
                    (B) by striking ``and'' at the end;
            (2) by redesignating paragraph (2) as paragraph (3); and
            (3) by inserting after paragraph (1) the following new 
        paragraph:
            ``(2) in addition to any funds that may be specifically 
        appropriated to implement a market development program, for 
        each of fiscal years 1994 and 1995, of the funds of, or an 
        equal value of commodities owned by, the Commodity Credit 
        Corporation--
                    ``(A) not less than $33,000,000 for--
                            ``(i) branded promotion activities 
                        involving small-sized commercial entities and 
                        medium-sized commercial entities that are 
                        beginning exporters; and
                            ``(ii) activities other than branded 
                        promotion activities that only benefit small-
                        sized commercial entities and medium-sized 
                        commercial entities, or (as determined by the 
                        Secretary) small-sized agricultural producers 
                        and medium-sized agricultural producers; and
                    ``(B) in addition to funding specified in 
                subparagraph (A), not less than $77,000,000 for program 
                activities by any eligible trade organization, 
                including organizations specified under subparagraph 
                (A); and''.
    (b) Definitions.--Section 102 of such Act (7 U.S.C. 5602) is 
amended by adding at the end the following new paragraph:
            ``(9) Commercial entity.--
                    ``(A) In general.--The term `commercial entity' 
                means a cooperative or private organization that 
                exports or promotes an agricultural commodity, 
                including an entity that controls, is controlled by, or 
                is under common control with such a cooperative or 
                private organization.
                    ``(B) Medium-sized commercial entity.--The term 
                `medium-sized commercial entity' means a commercial 
                entity that employs not less than 51, nor more than 
                500, individuals.
                    ``(C) Small-sized commercial entity.--The term 
                `small-sized commercial entity' means a commercial 
                entity that employs not more than 50 individuals.''.

SEC. 1402. ACREAGE REDUCTION REQUIREMENTS.

    (a) In General.--Section 1104 of the Omnibus Budget Reconciliation 
Act of 1990 (7 U.S.C. 1445b-3a note) is amended--
            (1) in subsection (a), by striking paragraph (2) and 
        inserting the following new paragraph:
            ``(2) corn under which the acreage planted to corn for 
        harvest on a farm would be limited to the corn crop acreage 
        base for the farm for the crop reduced by not less than 7\1/2\ 
        percent.''; and
            (2) in subsection (b)(2), by striking ``grain sorghum, and 
        barley,''.
    (b) Readjustment of Support Levels.--Section 1302 of such Act (7 
U.S.C. 1421 note) is amended--
            (1) in subsection (b)--
                    (A) by striking paragraph (1); and
                    (B) by redesignating paragraphs (2) and (3) as 
                paragraphs (1) and (2), respectively;
            (2) in subsection (c), by striking ``and other programs''; 
        and
            (3) in subsection (d)--
                    (A) in paragraph (1)--
                            (i) by striking subparagraph (A); and
                            (ii) by redesignating subparagraphs (B) and 
                        (C) as subparagraphs (A) and (B), respectively;
                    (B) in paragraph (2), by striking ``(A), (B), and 
                (C)'' and inserting ``(A) and (B)''; and
                    (C) in paragraph (3)--
                            (i) by striking ``measures specified in 
                        subparagraph (A) of paragraph (1) and''; and
                            (ii) by striking ``(B) or (C)'' and 
                        inserting ``(A) or (B)''.

SEC. 1403. END-USE CERTIFICATES.

    (a) In General.--Subtitle A of title IV of the Agricultural Trade 
Act of 1978 (7 U.S.C. 5661 et seq.) is amended--
            (1) by redesignating section 404 (7 U.S.C. 5664) as section 
        405; and
            (2) by inserting after section 403 the following new 
        section:

``SEC. 404. END-USE CERTIFICATES.

    ``(a) Definitions.--As used in this section:
            ``(1) Covered foreign commodity.--The term `covered foreign 
        commodity' means any wheat or barley produced in a foreign 
        country that is imported into the United States, including any 
        imported commodity that will be subsequently commingled with a 
        like commodity produced in the United States.
            ``(2) End-use certificate.--The term `end-use certificate' 
        means a certification that describes--
                    ``(A) the class, quantity, and country of origin of 
                the covered foreign commodity;
                    ``(B) the importer and consignee of the covered 
                foreign commodity;
                    ``(C) the end use for which the consignee will use 
                the covered foreign commodity; and
                    ``(D) at the option of the Secretary, the sales 
                price and quality of the covered foreign commodity.
    ``(b) Statement of Purpose.--The Secretary shall improve monitoring 
of the end use of covered foreign commodities, as provided in this 
section, in order to ensure that exports of agricultural commodities 
under the programs authorized by this Act and other agricultural trade 
programs are entirely produced in the United States.
    ``(c) Requirement on Covered Foreign Commodities.--The Commissioner 
of Customs shall not permit the entry into, or the withdrawal from a 
warehouse for use in, the United States of a covered foreign commodity, 
unless the importer of record presents an end-use certificate for the 
covered foreign commodity that complies with this section at the time 
of entry or withdrawal, as appropriate.
    ``(d) Maintenance of Certificate with Covered Foreign Commodity.--
The end-use certificate shall be maintained with the covered foreign 
commodity until the commodity reaches the end use of the commodity 
within the United States. The end use of a covered foreign commodity 
includes feeding to livestock, first stage processing for human 
consumption, exporting from the United States, or (as determined by the 
Secretary) other end uses.
    ``(e) Certification.--The Secretary shall require any importer or 
consignee of a covered foreign commodity to certify, on a quarterly 
basis, the end use or transfer, during the period the commodity is a 
covered foreign commodity, by the importer or consignee, along with any 
additional information the Secretary determines to be appropriate.
    ``(f) Compliance.--Subsections (b), (c), and (d) of section 402 
shall apply to an importer or consignee of a covered foreign commodity 
subject to the terms and conditions specified in this section.''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
become effective on the date that is 120 days after the date of 
enactment of this Act.

SEC. 1404. SENSE OF CONGRESS REGARDING THE EXPORT OF VEGETABLE OIL.

    It is the sense of Congress that the Secretary of Agriculture 
should continue aggressively to promote the export of vegetable oil 
through all available authorities, including but not limited to the 
export enhancement program established under section 301 of the 
Agricultural Trade Act of 1978 (7 U.S.C. 5651).

                       Subtitle E--Miscellaneous

SEC. 1501. FEDERAL CROP INSURANCE.

    (a) Actuarial Soundness.--Section 506 of the Federal Crop Insurance 
Act (7 U.S.C. 1506) is amended by adding at the end the following new 
subsection:
    ``(n) Actuarial Soundness.--The Corporation shall take such actions 
as are necessary to improve the actuarial soundness of Federal 
multiperil crop insurance coverage made available under this title to 
achieve, on and after October 1, 1995, an overall projected loss ratio 
of not greater than 1.1, including--
            ``(1) instituting appropriate requirements for 
        documentation of the actual production history of insured 
        producers to establish recorded or appraised yields for Federal 
        crop insurance coverage that more accurately reflect the 
        associated actuarial risk, except that the Corporation may not 
        carry out this paragraph in a manner that would prevent 
        beginning farmers from obtaining adequate Federal crop 
        insurance, as determined by the Corporation;
            ``(2) establishing in counties, to the extent practicable, 
        a crop insurance option based on area yields in a manner that 
        allows an insured producer to qualify for an indemnity if a 
        loss has occurred in a specified area in which the farm of the 
        insured producer is located;
            ``(3) establishing a database that contains the social 
        security account and employee identification numbers of 
        participating producers and using the numbers to identify 
        insured producers who are high risk for actuarial purposes and 
        insured producers who have not documented at least 4 years of 
        production history, to assess the performance of insurance 
        providers, and for other purposes permitted by law; and
            ``(4) taking any other measures authorized by law to 
        improve the actuarial soundness of the Federal crop insurance 
        program while maintaining fairness and effective coverage for 
        agricultural producers.''.
    (b) Conforming Amendments.--
            (1) Reinsurance.--Section 508(h) of such Act (7 U.S.C. 
        1508(h)) is amended by striking the fifth sentence and 
        inserting the following new sentence: ``The Corporation shall 
        also pay operating and administrative costs to insurers of 
        policies on which the Corporation provides reinsurance in an 
        amount determined by the Corporation.''.
            (2) Area yield plan.--Section 508 of such Act (7 U.S.C. 
        1508) is amended by adding at the end the following new 
        subsection:
    ``(n) Area Yield Plan.--
            ``(1) In general.--Notwithstanding any other provision of 
        this title, the Corporation may offer, only as an option to 
        individual crop insurance coverage available under this Act, a 
        crop insurance plan based on an area yield that allows an 
        insured producer to qualify for an indemnity if a loss has 
        occurred in an area, as specified by the Corporation, in which 
        the farm of the producer is located.
            ``(2) Level of coverage.--Under a plan offered under 
        paragraph (1), an insured producer shall be allowed to select 
        the level of production at which an indemnity will be paid 
        consistent with terms and conditions established by the 
        Corporation.''.
            (3) Yield coverage.--Section 508A of such Act (7 U.S.C. 
        1508a) is amended--
                    (A) in subsection (a)(1), by striking ``may'' and 
                inserting ``shall''; and
                    (B) in subsection (b)--
                            (i) in paragraph (1)(A)--
                                    (I) by striking ``A crop insurance 
                                contract'' and all that follows through 
                                ``producer--'' and inserting ``Under 
                                regulations issued by the Corporation, 
                                a crop insurance contract offered under 
                                this title to an eligible insured 
                                producer of a commodity with respect to 
                                which the Corporation provides crop 
                                insurance coverage shall make available 
                                to the producer either--'';
                                    (II) by striking ``or'' at the end 
                                of clause (i);
                                    (III) in clause (ii)--
                                            (aa) by striking ``5'' and 
                                        inserting ``4 building to 10''; 
                                        and
                                            (bb) by striking the period 
                                        at the end and inserting ``; 
                                        or''; and
                                    (IV) by adding at the end the 
                                following new clause:
                            ``(iii) yield coverage based on--
                                    ``(I) not less than 65 percent of 
                                the transitional yield of the producer 
                                (adjusted to reflect actual 
                                experience), as specified in 
                                regulations issued by the Corporation 
                                based on production history 
                                requirements; or
                                    ``(II) the area yield under section 
                                508(n) for the crop established under 
                                the program for the commodity 
                                involved.'';
                            (ii) in paragraph (1)(B)--
                                    (I) by striking ``two'' and 
                                inserting ``3''; and
                                    (II) by inserting after 
                                ``subparagraph (A)'' the following: ``, 
                                where available (as determined by the 
                                Corporation),'';
                            (iii) in paragraph (2)--
                                    (I) by striking ``5'' and inserting 
                                ``4 building to 10''; and
                                    (II) by inserting after ``previous 
                                crops,'' the following: ``not less than 
                                65 percent of the transitional yield of 
                                the producer (adjusted to reflect 
                                actual experience), or the area 
                                yield,''; and
                            (iv) in paragraph (3)(A)(i), by inserting 
                        after ``farm program yield'' the following: ``, 
                        not less than 65 percent of the transitional 
                        yield of the producer (adjusted to reflect 
                        actual experience), as specified in regulations 
                        issued by the Corporation based on production 
                        history requirements, or the area yield under 
                        section 508(n), whichever is applicable,''.
    (c) Effective Date.--
            (1) In general.--Except as provided in paragraph (2), this 
        section and the amendments made by this section shall become 
        effective on October 1, 1993.
            (2) Regulations.--Not later than 30 days after the date of 
        enactment of this Act, the Secretary of Agriculture shall 
        publish, for public comment, proposed regulations to implement 
        the amendments made by this section.

SEC. 1502. ENVIRONMENTAL CONSERVATION ACREAGE RESERVE PROGRAM 
              AMENDMENTS.

    Subtitle D of title XII of the Food Security Act of 1985 (16 U.S.C. 
3830 et seq.) is amended--
            (1) in section 1230(b) (16 U.S.C. 3830(b)), by striking 
        ``to place in'' and all that follows through ``acres'';
            (2) in section 1231(d) (16 U.S.C. 3831(d))--
                    (A) by striking ``may'' and inserting ``shall'';
                    (B) by striking ``the amount of acres specified in 
                section 1230(b)'' and inserting ``a total of 38,000,000 
                acres during the 1986 through 1995 calendar years''; 
                and
                    (C) by striking ``each of calendar years 1994 and 
                1995'' and inserting ``the 1995 calendar year'';
            (3) in section 1237 (16 U.S.C. 3837)--
                    (A) by striking subsection (b) and inserting the 
                following new subsection:
    ``(b) Minimum Enrollment.--The Secretary shall enroll into the 
wetlands reserve program--
            ``(1) a total of not less than 330,000 acres by the end of 
        the 1995 calendar year; and
            ``(2) a total of not less than 975,000 acres during the 
        1991 through 2000 calendar years.''; and
                    (B) in subsection (c), by striking ``1995'' and 
                inserting ``2000''; and
            (4) in section 1241 (16 U.S.C. 3841)--
                    (A) in subsection (a)--
                            (i) by striking ``(a)(1) During each of the 
                        fiscal years ending September 30, 1986, and 
                        September 30, 1987'' and inserting ``(a) During 
                        each of fiscal years 1994 through 2000''; and
                            (ii) by striking paragraph (2); and
                    (B) in subsection (b), by striking ``(A) through 
                (E)'' and inserting ``A through E''.

SEC. 1503. ADMISSION, ENTRANCE, AND RECREATION FEES.

    (a) Definitions.--As used in this section:
            (1) Area of concentrated public use.--The term ``area of 
        concentrated public use'' means an area administered by the 
        Secretary that meets each of the following criteria:
                    (A) The area is managed primarily for outdoor 
                recreation purposes.
                    (B) Facilities and services necessary to 
                accommodate heavy public use are provided in the area.
                    (C) The area contains at least one major recreation 
                attraction.
                    (D) Public access to the area is provided in such a 
                manner that admission fees can be efficiently collected 
                at 1 or more centralized locations.
            (2) Boat launching facility.--The term ``boat launching 
        facility'' includes any boat launching facility, regardless of 
        whether specialized facilities or services, such as mechanical 
        or hydraulic boat lifts or facilities, are provided.
            (3) Campground.--The term ``campground'' means any 
        campground where a majority of the following amenities are 
        provided, as determined by the Secretary:
                    (A) Tent or trailer spaces.
                    (B) Drinking water.
                    (C) An access road.
                    (D) Refuse containers.
                    (E) Toilet facilities.
                    (F) The personal collection of recreation use fees 
                by an employee or agent of the Secretary.
                    (G) Reasonable visitor protection.
                    (H) If campfires are permitted in the campground, 
                simple devices for containing the fires.
            (4) Secretary.--The term ``Secretary'' means the Secretary 
        of Agriculture.
    (b) Authority To Impose Fees.--The Secretary--
            (1) may charge admission or entrance fees at national 
        monuments, national volcanic monuments, national scenic areas, 
        and areas of concentrated public use administered by the 
        Secretary;
            (2) acting through the Forest Service, shall reimburse the 
        Agricultural Stabilization and Conservation Service for 
        administrative costs incurred under the Stewardship Incentive 
        Program for the actual cost of services provided by the 
        Agricultural Stabilization and Conservation Service, except 
        that the actual costs shall not exceed 10 percent of the total 
        annual appropriation for the program; and
            (3) may charge recreation use fees at lands administered by 
        the Secretary in connection with the use of specialized outdoor 
        recreation sites, equipment, services, and facilities, 
        including visitors' centers, picnic tables, boat launching 
        facilities, and campgrounds.
    (c) Amount of Fees.--The amount of the admission, entrance, and 
recreation fees authorized to be imposed under this section shall be 
determined by the Secretary.

SEC. 1504. SENSE OF THE SENATE REGARDING DEFICIT REDUCTION.

    It is the sense of the Senate that--
            (1) farmers should pay no more than their fair share of any 
        budget reduction necessary to achieve the goal of deficit 
        reduction; and
            (2) the level of budget reduction should take into account 
        and be adjusted to reflect any BTU or energy taxes, any other 
        taxes, reduction in interest rates, and other user fees.

                 TITLE II--COMMITTEE ON ARMED SERVICES

SEC. 2001. LIMITATION ON COST-OF-LIVING ADJUSTMENTS FOR MILITARY 
              RETIREES.

    Paragraph (2) of section 1401a(b) of title 10, United States Code, 
is amended to read as follows:
            ``(2) Pre-august 1, 1986 members.--
                    ``(A) General rule.--The Secretary shall increase 
                the retired pay of each member and former member who 
                first became a member of a uniformed service before 
                August 1, 1986, by the percent (adjusted to the nearest 
                one-tenth of 1 percent) by which--
                            ``(i) the price index for the base quarter 
                        of that year, exceeds
                            ``(ii) the base index.
                    ``(B) Special rules for fiscal years 1994 through 
                1998.--
                            ``(i) Fiscal years 1994 through 1997.--In 
                        the case of an increase in retired pay that, 
                        pursuant to paragraph (1), becomes effective on 
                        December 1 of 1993, 1994, 1995, or 1996, the 
                        initial month for which such increase is 
                        payable as part of such retired pay shall 
                        (notwithstanding such December 1 effective 
                        date) be September of the following year.
                            ``(ii) Fiscal year 1998.--In the case of an 
                        increase in retired pay that, pursuant to 
                        paragraph (1), becomes effective on December 1, 
                        1997, the initial month for which such increase 
                        is payable as part of such retired pay shall 
                        (notwithstanding such December 1 effective 
                        date) be August 1998.
                    ``(C) Inapplicability to disability retirees.--
                Subparagraph (B) does not apply with respect to the 
                retired pay of a member retired under chapter 61 of 
                this title.''.

      TITLE III--COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS

SEC. 3001. NATIONAL DEPOSITOR PREFERENCE.

    (a) In General.--Section 11(d)(11) of the Federal Deposit Insurance 
Act (12 U.S.C. 1821(d)(11)) is amended to read as follows:
            ``(11) Depositor preference.--
                    ``(A) In general.--Subject to section 5(e)(2)(C), 
                amounts realized from the liquidation or other 
                resolution of any insured depository institution by any 
                receiver appointed for such institution shall be 
                distributed to pay claims (other than secured claims to 
                the extent of any such security) in the following order 
                of priority:
                            ``(i) Administrative expenses of the 
                        receiver.
                            ``(ii) Any deposit liability of the 
                        institution.
                            ``(iii) Any other general or senior 
                        liability of the institution (which is not a 
                        liability described in clause (iv) or (v)).
                            ``(iv) Any obligation subordinated to 
                        depositors or general creditors (which is not 
                        an obligation described in clause (v)).
                            ``(v) Any obligation to shareholders or 
                        members arising as a result of their status as 
                        shareholders or members (including any 
                        depository institution holding company or any 
                        shareholder or creditor of such company).
                    ``(B) Effect on state law.--
                            ``(i) In general.--The provisions of 
                        subparagraph (A) shall not supersede the law of 
                        any State except to the extent such law is 
                        inconsistent with the provisions of such 
                        subparagraph, and then only to the extent of 
                        the inconsistency.
                            ``(ii) Procedure for determination of 
                        inconsistency.--Upon the Corporation's own 
                        motion or upon the request of any person with a 
                        claim described in subparagraph (A)(i) or any 
                        State which is submitted to the Corporation in 
                        accordance with procedures which the 
                        Corporation shall prescribe, the Corporation 
                        shall determine whether any provision of the 
                        law of any State is inconsistent with any 
                        provision of subparagraph (A) and the extent of 
                        any such inconsistency.
                            ``(iii) Judicial review.--The final 
                        determination of the Corporation under clause 
                        (ii) shall be subject to judicial review under 
                        chapter 7 of title 5, United States Code.
                    ``(C) Accounting report.--Any distribution by the 
                Corporation in connection with any claim described in 
                subparagraph (A)(vi) shall be accompanied by the 
                accounting report required under paragraph (15)(B).''.
    (b) Technical and Conforming Amendments.--
            (1) Section 11(c)(13) of the Federal Deposit Insurance Act 
        (12 U.S.C. 1821(c)(13)) is amended--
                    (A) in subparagraph (A), by striking ``subject to 
                subparagraph (B),'';
                    (B) by inserting ``and'' after the semicolon at the 
                end of subparagraph (A);
                    (C) by striking subparagraph (B); and
                    (D) by redesignating subparagraph (C) as 
                subparagraph (B).
            (2) Section 11(g)(4) of the Federal Deposit Insurance Act 
        (12 U.S.C. 1921(g)(4)) is amended by striking ``If the 
        Corporation'' and inserting ``Subject to subsection (d)(11), if 
        the Corporation''.
    (c) Effective Date.--The amendments made by this section shall 
apply with respect to insured depository institutions for which a 
receiver is appointed after the date of the enactment of this Act.

SEC. 3002. TRANSFER OF FEDERAL RESERVE SURPLUSES.

    (a) In General.--The 1st undesignated paragraph of section 7 of the 
Federal Reserve Act (12 U.S.C. 289) is amended to read as follows:
    ``(a) Dividends and Surplus Funds of Reserve Banks.--
            ``(1) Stockholder dividends.--
                    ``(A) In general.--After all necessary expenses of 
                a Federal reserve bank have been paid or provided for, 
                the stockholders of the bank shall be entitled to 
                receive an annual dividend of 6 percent on paid-in 
                capital stock.
                    ``(B) Dividend cumulative.--The entitlement to 
                dividends under subparagraph shall be cumulative.
            ``(2) Deposit of net earnings in surplus fund.--That 
        portion of net earnings of each Federal reserve bank which 
        remains after dividend claims under subparagraph (A) have been 
        fully met shall be deposited in the surplus fund of the bank.
            ``(3) Payment to treasury.--During fiscal years 1997 and 
        1998, any amount in the surplus fund of any Federal reserve 
        bank in excess of the amount equal to 3 percent of the total 
        paid-in capital and surplus of the member banks of such bank 
        shall be transferred to the Board for transfer to the Secretary 
        of the Treasury for deposit in the general fund of the 
        Treasury.''.
    (b) Additional Transfers for Fiscal Years 1997 and 1998.--
            (1) In general.--In addition to the amounts required to be 
        transferred from the surplus funds of the Federal reserve banks 
        pursuant to section 7(a)(3) of the Federal Reserve Act, the 
        Federal reserve banks shall transfer from such surplus funds to 
        the Board of Governors of the Federal Reserve System for 
        transfer to the Secretary of the Treasury for deposit in the 
        general fund of the Treasury, a total amount of $106,000,000 in 
        fiscal year 1997 and a total amount of $107,000,000 in fiscal 
        year 1998.
            (2) Allocation by fed.--Of the total amount required to be 
        paid by the Federal reserve banks under paragraph (1) for 
        fiscal year 1997 or 1998, the Board of Governors of the Federal 
        Reserve System shall determine the amount each such bank shall 
        pay in such fiscal year.
            (3) Replenishment of surplus fund prohibited.--No Federal 
        reserve bank may replenish such bank's surplus fund by the 
        amount of any transfer by such bank under paragraph (1) during 
        fiscal years 1997 and 1998.
    (c) Technical and Conforming Amendments.--
            (1) The penultimate undesignated paragraph of section 7 of 
        the Federal Reserve Act (12 U.S.C. 290) is amended by striking 
        ``The net earnings derived'' and inserting ``(b) Use of 
        Earnings Transferred to the Treasury.--The net earnings 
        derived''.
            (2) The last undesignated paragraph of section 7 of the 
        Federal Reserve Act (12 U.S.C. 531) is amended by striking 
        ``Federal reserve banks'' and inserting ``(c) Exemption From 
        Taxation.--Federal reserve banks''.

SEC. 3003. USE OF RETURN DATA FOR INCOME VERIFICATION UNDER CERTAIN 
              HOUSING ASSISTANCE PROGRAMS.

    (a) Amendments to Housing Acts.--Section 904 of the Stewart B. 
McKinney Homeless Assistance Amendments Act of 1988 (42 U.S.C. 3544) is 
amended as follows:
            (1) Definition.--In subsection (a), by adding at the end 
        the following:
            ``(4) Program of the department of housing and urban 
        development.--The term `program of the Department of Housing 
        and Urban Development' includes Indian housing programs 
        assisted under title II of the United States Housing Act of 
        1937.''.
            (2) Consent forms.--In subsection (b)--
                    (A) in paragraph (1), by striking ``and'' at the 
                end;
                    (B) in paragraph (2), by striking the period at the 
                end and inserting ``; and'';
                    (C) by inserting after paragraph (2) the following 
                new paragraph:
            ``(3) sign a consent form approved by the Secretary 
        authorizing the Secretary to request the Commissioner of Social 
        Security and the Secretary of the Treasury to release 
        information pursuant to section 6103(l)(7)(D)(ix) of the 
        Internal Revenue Code of 1986 with respect to such applicant or 
        participant for the sole purpose of the Secretary verifying 
        income information pertinent to the applicant's or 
        participant's eligibility or level of benefits.''; and
                    (D) in the last sentence, by striking ``This'' and 
                inserting the following: ``Except as provided in this 
                subsection, this''.
            (2) Applicant, participant, and public housing agency 
        protections.--In subsection (c)(2)--
                    (A) in subparagraph (A)--
                            (i) in the matter preceding clause (i)--
                                    (I) by inserting after 
                                ``compensation law'' the following: 
                                ``or pursuant to section 
                                6103(l)(7)(D)(ix) of the Internal 
                                Revenue Code of 1986 from the 
                                Commissioner of Social Security or the 
                                Secretary of the Treasury''; and
                                    (II) by inserting ``(in the case of 
                                information obtained pursuant to such 
                                section 303(i))'' before 
                                ``representatives''; and
                            (ii) in clause (ii), by inserting ``or 
                        public housing agency'' after ``owner'' each 
                        place it appears; and
                    (B) in subparagraph (B), by inserting after 
                ``wages'' each place it appears the following: ``, 
                other earnings or income,''.
            (3) Penalty.--In subsection (c)(3)--
                    (A) in subparagraph (A), by inserting ``or section 
                6103(l)(7)(D)(ix) of the Internal Revenue Code of 
                1986'' after ``Social Security Act''; and
                    (B) in the first sentence of subparagraph (B)--
                            (i) by striking clause (i) and inserting 
                        the following: ``(i) a negligent or knowing 
                        disclosure of information referred to in this 
                        section, section 303(i) of the Social Security 
                        Act, or section 6103(l)(7)(D)(ix) of the 
                        Internal Revenue Code of 1986 about such person 
                        by an officer or employee of any public housing 
                        agency or owner (or employee thereof), which 
                        disclosure is not authorized by this section, 
                        such section 303(i), such section 
                        6103(l)(7)(D)(ix), or any regulation 
                        implementing this section, such section 303(i), 
                        or such section 6103(l)(7)(D)(ix), or''; and
                            (ii) in clause (ii), by inserting ``such 
                        section 6103(l)(7)(D)(ix),'' after ``303(i),''.
            (4) Conforming amendment.--The heading of subsection (c) of 
        section 904 of the Stewart B. McKinney Homeless Assistance 
        Amendments Act of 1988 is amended by striking ``State 
        Employment''.
            (5) Operating subsidy adjustments.--Section 9(a) of the 
        United States Housing Act of 1937 (42 U.S.C. 1437g(c)) is 
        amended by adding at the end the following:
    ``(4) Adjustments to a public housing agency's operating subsidy 
made by the Secretary under this section shall reflect actual changes 
in rental income collections resulting from the application of section 
904 of the Stewart B. McKinney Homeless Assistance Amendments Act of 
1988.''.
    (b) Conforming Internal Revenue Code Amendments.--
            (1) In general.--Subparagraph (D) of section 6103(l)(7) of 
        the Internal Revenue Code of 1986 (26 U.S.C. 6103(l)(7)(D); 
        relating to the disclosure of return information to Federal, 
        State, and local agencies administering certain programs) is 
        amended--
                    (A) in clause (vii), by striking ``, and'' at the 
                end and inserting a semicolon;
                    (B) in clause (viii), by striking the period at the 
                end and inserting ``; and'';
                    (C) by inserting after clause (viii) the following 
                new clause:
                            ``(ix) any housing assistance program 
                        administered by the Department of Housing and 
                        Urban Development that involves initial and 
                        periodic review of an applicant's or 
                        participant's income, except that return 
                        information may be disclosed under this 
                        paragraph only to the Secretary of Housing and 
                        Urban Development and only with respect to 
                        applicants for and participants in such 
                        programs who have signed consent forms under 
                        section 904(b)(3) of the Stewart B. McKinney 
                        Homeless Assistance Amendments Act of 1988.''; 
                        and
                    (D) by adding at the end the following: ``Clause 
                (ix) shall not apply after September 30, 1998.''.
            (2) Amendment to the heading.--The heading of paragraph (7) 
        of section 6103(l) of the Internal Revenue Code of 1986 is 
        amended by inserting after ``1977,'' the following: ``certain 
        housing assistance programs,''.

SEC. 3004. GNMA REMIC GUARANTEE FEES.

    Section 306(g)(3) of the National Housing Act (12 U.S.C. 
1721(g)(3)) is amended by adding at the end the following new 
subparagraph:
    ``(E)(i) Notwithstanding subparagraphs (A) through (D), fees 
charged for the guarantee of, or commitment to guarantee, multiclass 
securities backed by a trust or pool of securities or notes guaranteed 
by the Association under this subsection, and other related fees shall 
be charged by the Association in an amount the Association deems 
appropriate. The Association shall take such action as may be necessary 
to reasonably assure that such portion of the benefit, resulting from 
the Association's multiclass securities program, as the Association 
determines is appropriate accrues to mortgagors who execute eligible 
mortgages after the date of the enactment of this subparagraph.
    ``(ii) In its annual report, the Association shall provide a 
summary of each activity of the Association pertaining to the 
Association's multiclass securities program. Each summary shall contain 
a description of the activity and shall include--
            ``(I) information pertaining to the size of the 
        transactions closed, the number of mortgages involved, the 
        amount of fees charged, those persons or entities receiving 
        payments for services provided and the amounts of such 
        payments; and
            ``(II) an estimate of the portion of the benefit of the 
        multiclass securities program accruing to mortgagors as well as 
        a description of any action taken by the Association to ensure 
        such accrual.
    ``(iii) The Association shall provide for the initial 
implementation of the program for which fees are charged under the 
first sentence of clause (i) by notice published in the Federal 
Register. The notice shall be effective upon publication and shall 
provide an opportunity for public comment. Not later than 12 months 
after publication of the notice, the Association shall issue 
regulations for such program based on the notice, comments received, 
and the experience of the Association in carrying out the program 
during such period.
    ``(iv) The Association shall consult with persons or entities in 
such manner as the Association deems appropriate to ensure the 
efficient commencement and operation of the multiclass securities 
program.
    ``(v) No State or local law, and no Federal law (except Federal law 
enacted expressly in limitation of this clause after the effective date 
of this subparagraph) shall preclude or limit the exercise by the 
Association of its power to contract with persons or entities, and its 
rights to enforce such contracts, for the purpose of ensuring the 
efficient commencement and continued operation of the multiclass 
securities program.
    ``(vi) Prior to the commencement of the multiclass securities 
program, the Association shall provide to the Committee on Banking, 
Housing, and Urban Affairs of the Senate and the Committee on Banking, 
Finance and Urban Affairs of the House of Representatives a report 
describing the Association's design of the multiclass securities 
program, including program elements that ensure the minimization of 
risks arising from the operation of the multiclass securities program, 
such as--
            ``(I) any industry proven safeguards, including capital 
        standards for sponsors and provisions for indemnification from 
        private parties for events that may result in the Association's 
        liability under its guaranty or commitment to guaranty; and
            ``(II) the sufficiency of the Association's staff resources 
        to administer the multiclass securities program.''.

SEC. 3005. MUTUAL MORTGAGE INSURANCE FUND PREMIUMS.

    To improve the actuarial soundness of the Mutual Mortgage Insurance 
Fund under the National Housing Act, the Secretary of Housing and Urban 
Development shall increase the rate at which the Secretary earns the 
single premium payment collected at the time of insurance of a mortgage 
that is an obligation of such Fund (with respect to the rate in effect 
on the date of the enactment of this Act). In establishing such 
increased rate, the Secretary shall consider any current audit findings 
and reserve analyses and information regarding the expected average 
duration of mortgages that are obligations of such Fund and may 
consider any other information that the Secretary determines to be 
appropriate.

              TITLE IV--COMMUNICATIONS AND TRANSPORTATION

              Subtitle A--Spectrum Allocation and Auction

SEC. 4001. SHORT TITLE.

    This subtitle may be cited as the ``Emerging Telecommunications 
Technologies Act of 1993''.

SEC. 4002. FINDINGS.

    The Congress finds that--
            (1) the Federal Government currently reserves for its own 
        use, or has priority of access to, approximately 40 percent of 
        the electromagnetic spectrum that is assigned for use pursuant 
        to the Communications Act of 1934;
            (2) many of such frequencies are underutilized by Federal 
        Government licensees;
            (3) the public interest requires that many of such 
        frequencies be utilized more efficiently by Federal Government 
        and non-Federal licensees;
            (4) additional frequencies are assigned for services that 
        could be obtained more efficiently from commercial providers or 
        other vendors;
            (5) scarcity of assignable frequencies for licensing by the 
        Commission can and will--
                    (A) impede the development and commercialization of 
                new telecommunications products and services;
                    (B) limit the capacity and efficiency of 
                telecommunications systems in the United States;
                    (C) prevent some State and local police, fire, and 
                emergency services from obtaining urgently needed radio 
                channels; and
                    (D) adversely affect the productive capacity and 
                international competitiveness of the United States 
                economy;
            (6) a reassignment of these frequencies can produce 
        significant economic returns;
            (7) a reassignment of Federal Government frequencies can be 
        accomplished without adverse impact on amateur radio licenses 
        that currently share allocations with Federal Government 
        stations;
            (8) current spectrum assignment procedures--comparative 
        hearings and lotteries--can be expensive and time consuming, 
        can strain the limited resources of the Federal Communications 
        Commission, and can result in an inefficient distribution of 
        spectrum and an unjustified windfall to speculators;
            (9) competitive bidding could reduce the cost in time and 
        money--and increase the efficiency--of the spectrum assignment 
        process for certain radio services, discourage speculative 
        applications, encourage the efficient use of spectrum by 
        licensees, and fairly compensate United States taxpayers for 
        use of a scarce public natural resource;
            (10) competitive bidding should be structured to--
                    (A) facilitate introduction of new spectrum-based 
                technologies and services and entry of new companies 
                into the telecommunications market;
                    (B) recognize the legitimate needs of rural 
                telephone companies in providing spectrum-based, common 
                carrier services in rural markets in which they provide 
                telephone exchange service by wire;
                    (C) give appropriate consideration to small 
                businesses and minority-owned businesses that want to 
                participate in the competitive bidding process;
                    (D) recognize the need to make reasonably priced 
                mobile communications services available to businesses 
                in rural areas;
                    (E) recognize the need to ensure that adequate 
                spectrum continues to be available for public safety 
                services; and
                    (F) otherwise further the public interest;
            (11) competitive bidding should apply only to the granting 
        of new spectrum licenses and should not--
                    (A) disrupt the operations of existing spectrum 
                licensees;
                    (B) alter existing spectrum allocation procedures;
                    (C) apply to certain services governed by public 
                interest regulations;
                    (D) diminish the existing authority of the Federal 
                Communications Commission to regulate or reclaim 
                spectrum licenses;
                    (E) prevent or discourage the allocation of 
                spectrum to meet the current or future needs of public 
                safety services; or
                    (F) grant any right to a spectrum licensee 
                different from the rights awarded to licensees who 
                obtain their license through assignment methods other 
                than competitive bidding;
            (12) in appropriating revenues received from competitive 
        bidding, priority should be given to--
                    (A) funding spectrum management, planning, 
                monitoring, and enforcement and other activities of the 
                Federal Communications Commission, the National 
                Telecommunications and Information Administration, and 
                other Federal agencies aimed at increasing the 
                efficiency and effectiveness of spectrum use, 
                facilitating the introduction of new spectrum-based 
                technologies and services, and enhancing the 
                international competitiveness of the United States and 
                the ability of American companies to enter new markets; 
                and
                    (B) extending the reach of public radio and 
                television to underserved areas of the United States 
                and underserved groups of Americans and enhancing the 
                ability of public telecommunications to deliver needed 
                original, high-quality public service programming; and
            (13) because commercial mobile services require a Federal 
        license and the Federal Government is attempting to promote 
        competition for such services, and because providers of such 
        services do not exercise market power vis-a-vis telephone 
        exchange service carriers and State regulation can be a barrier 
        to the development of competition in this market, uniform 
        national policy is necessary and in the public interest.

SEC. 4003. NATIONAL SPECTRUM PLANNING.

    (a) Planning Activities.--The Assistant Secretary of Commerce for 
Communications and Information and the Chairman of the Commission shall 
meet, at least biannually, to conduct joint spectrum planning with 
respect to the following issues:
            (1) the future spectrum requirements for public and private 
        uses, including State and local government public safety 
        agencies;
            (2) the spectrum allocation actions necessary to 
        accommodate those uses; and
            (3) actions necessary to promote the efficient use of the 
        spectrum, including spectrum management techniques to promote 
        increased shared use of the spectrum that does not cause 
        harmful interference, as a means of increasing commercial 
        access.
    (b) Report On Planning Activities.--Not later than 24 months after 
the date of enactment of this Act, the Assistant Secretary of Commerce 
for Communications and Information and the Chairman of the Commission 
shall submit a joint report to the Committee on Energy and Commerce of 
the House of Representatives and the Committee on Commerce, Science, 
and Transportation of the Senate on the joint spectrum planning 
activities conducted under subsection (a) and recommendations for 
action developed pursuant to such activities. The report shall contain 
recommendations for the reform of the process of allocating spectrum 
between Federal uses and non-Federal uses.
    (c) Procedures To Ensure Opportunity for Minority-Owned Businesses 
and Small Businesses.--The Commission shall develop procedures to 
ensure that minority-owned businesses and small businesses are given 
the opportunity to provide spectrum-based services. In developing such 
procedures, the Commission shall consider the use of tax certificates 
and bidding preferences.
    (d) Study on Spectrum Needs of Public Safety Agencies.--The 
Commission shall complete and submit to Congress, not later than 18 
months after the date of enactment of this Act, a study of current and 
future spectrum needs of State and local government public safety 
agencies through the year 2010, and a specific plan to satisfy those 
spectrum needs.

SEC. 4004. RECOMMENDATIONS FOR REALLOCATION OF CERTAIN FREQUENCIES.

    (a) Identification Required.--For purposes of reallocation, the 
Secretary shall identify frequencies that--
            (1) are allocated on a primary basis for Federal Government 
        use;
            (2) are not required for the present or identifiable future 
        needs of the Federal Government;
            (3) can feasibly be made available, as of the date of such 
        identification or at any time during the next 15 years, for use 
        under the Act (other than for Federal Government stations under 
        section 305 of the Act) without resulting in costs to the 
        Federal Government, or loss of services or benefits to the 
        public, that are excessive in relation to the benefits to the 
        public that may be provided by non-Federal licensees; and
            (4) are most likely to have the greatest potential for 
        productive uses and public benefits under the Act if allocated 
        for commercial uses.
    (b) Minimum Amount of Spectrum Recommended.--
            (1) Overall recommendation.--In accordance with the 
        provisions of this section, the Secretary shall recommend for 
        reallocation, for use other than by Federal Government stations 
        under section 305 of the Act (47 U.S.C. 305), at least 200 
        megahertz of frequencies identified under subsection (a) that 
        are located below 5 gigahertz. At least one-half of such 
        frequencies shall be located below 3 gigahertz.
            (2) Mixed uses permitted to be counted.--Among the 
        frequencies recommended under this section for reallocation, 
        the Secretary may include frequencies and frequency bands that 
        are to be partially retained for use by Federal Government 
        stations but that are also recommended to be reallocated under 
        the Act for use by non-Federal stations, except that--
                    (A) such mixed-use frequencies and frequency bands 
                may not count toward more than one-half of the 200 
                megahertz minimum required by paragraph (1);
                    (B) such mixed-use frequencies and frequency bands 
                may not be so counted unless the assignments of the 
                frequencies to Federal Government stations under 
                section 305 of the Act (47 U.S.C. 305) are limited by 
                geographic area, by time, or by other means so as to 
                guarantee that the potential use to be made by such 
                Federal Government stations is substantially less (as 
                measured by geographic area, time, or otherwise) than 
                the potential use to be made by non-Federal stations; 
                and
                    (C) the operational sharing permitted under this 
                paragraph shall be subject to coordination procedures 
                that the Commission and the Secretary shall jointly 
                establish and implement to ensure against harmful 
                interference.
    (c) Consideration of Criteria for Identification.--
            (1) Needs of the federal government.--In determining 
        whether a frequency meets the criteria specified in subsection 
        (a)(2), the Secretary shall--
                    (A) consider whether the frequency is used to 
                provide a communications service that is or could be 
                made available from a commercial carrier or other 
                vendor;
                    (B) seek to promote--
                            (i) the maximum practicable reliance on 
                        commercially available substitutes;
                            (ii) the sharing of frequencies (as 
                        permitted under subsection (b)(2));
                            (iii) the development and use of new 
                        communications technologies; and
                            (iv) the use of nonradiating communications 
                        systems where practicable; and
                    (C) seek to avoid--
                            (i) serious degradation of Federal 
                        Government services and operations;
                            (ii) excessive costs to the Federal 
                        Government and users of Federal Government 
                        services; and
                            (iii) excessive disruption of existing use 
                        of Federal Government frequencies by amateur 
                        radio licensees.
            (2) Feasibility of use.--In determining whether a frequency 
        meets the criteria specified in subsection (a)(3), the 
        Secretary shall--
                    (A) assume that the frequency will be assigned by 
                the Commission under section 303 of the Act (47 U.S.C. 
                303) within 15 years;
                    (B) assume reasonable rates of scientific progress 
                and growth of demand for telecommunications services;
                    (C) seek to include frequencies which can be used 
                to stimulate the development of new technologies; and
                    (D) consider the immediate and recurring costs to 
                reestablish services displaced by the reallocation of 
                spectrum.
            (3) Commercial use.--In determining whether a frequency 
        meets the criteria specified in subsection (a)(4), the 
        Secretary shall consider--
                    (A) the extent to which equipment is available that 
                is capable of utilizing such frequency;
                    (B) the proximity of frequencies that are already 
                assigned for commercial or other non-Federal use;
                    (C) the extent to which, in general, commercial 
                users could share the frequency with amateur radio 
                licensees; and
                    (D) the activities of foreign governments in making 
                frequencies available for experimentation or commercial 
                assignments in order to support their domestic 
                manufacturers of equipment.
            (4) Other uses.--
                    (A) Applicability of criteria.--The criteria 
                specified by subsection (a) shall be deemed not to be 
                met for any purpose under this subtitle with regard to 
                any frequency assignment to, or any frequency 
                assignment used by, a Federal power agency for the 
                purpose of withdrawing that assignment.
                    (B) Mixed use eligibility.--The frequencies 
                assigned to any Federal power agency may only be 
                eligible for mixed use under subsection (b)(2) in 
                geographically separate areas, but in those cases where 
                a frequency is to be shared by an affected Federal 
                power agency and a non-Federal user, such use by the 
                non-Federal user shall not cause harmful interference 
                to the affected Federal power agency or adversely 
                affect the reliability of its power system.
                    (C) Definition.--As used in this paragraph, the 
                term ``Federal power agency'' means the Tennessee 
                Valley Authority, the Bonneville Power Administration, 
                the Western Area Power Administration, or the 
                Southwestern Power Administration.
    (d) Procedure for Identification of Reallocable Bands of 
Frequencies.--
            (1) Report identifying 30 megahertz for immediate 
        reallocation.--Within 6 months after the date of enactment of 
        this Act, the Secretary shall prepare and submit to the 
        President and the Congress a report that recommends for 
        immediate reallocation no less than 30 megahertz of frequencies 
        identified under subsection (a). None of the frequencies 
        covered by such report may be allocated for mixed use as 
        described in subsection (b)(2). Not less than one-half of such 
        frequencies shall be located below 3 gigahertz.
            (2) Preliminary report on other reallocable frequencies.--
        Within 6 months after the date of enactment of this Act, the 
        Secretary shall prepare, make publicly available, and submit to 
        the President and the Congress a preliminary report that 
        recommends for reallocation at least 170 megahertz of 
        frequencies identified under subsection (a), other than those 
        recommended for immediate reallocation under paragraph (1).
            (3) Public comment; changes to report.--The Secretary shall 
        receive public comment on the preliminary report required by 
        paragraph (2) and shall, based upon the comments, make such 
        changes to the report as are warranted to meet the objectives 
        of this section.
            (4) Direct discussions.--The Secretary shall encourage and 
        provide opportunity for direct discussions among commercial 
        representatives and Federal Government users of the spectrum to 
        aid the Secretary in determining which frequencies to recommend 
        for reallocation. The Secretary shall provide notice to the 
        public of any such discussions, including the name or names of 
        any businesses or other persons represented in such 
        discussions, and shall provide the public with an opportunity 
        to comment on the results of any such negotiations prior to the 
        submission of the final report required by paragraph (5).
            (5) Final report on other reallocable frequencies.--Within 
        18 months after the date of enactment of this Act, the 
        Secretary shall prepare and submit to the President and the 
        Congress a final report that recommends the reallocation of at 
        least 170 megahertz of frequencies as described in paragraph 
        (2). Not less than one-half of such frequencies shall be 
        located below 3 gigahertz.
            (6) Limitation on reallocation.--None of the frequencies 
        recommended for reallocation in the reports required by this 
        subsection shall have been recommended, prior to the date of 
        enactment of this Act, for reallocation to non-Federal use by 
        international agreement.
    (e) Timetable for reallocation and limitation.--The Secretary 
shall, as part of the reports required by paragraphs (1) and (2) of 
subsection (d), include a timetable that recommends dates by which the 
President shall withdraw or limit assignments of the frequencies 
specified in the reports. In setting the recommended effectived dates, 
the Secretary shall--
            (1) consider the need to reallocate frequencies as early as 
        possible, taking into account the requirements of section 406;
            (2) consider the useful remaining life of equipment that 
        has been purchased or contracted for purchase to operate on 
        identified frequencies;
            (3) consider the need to coordinate frequency use with 
        other nations; and
            (4) take into account the relationship between the costs to 
        the Federal Government of changing to different frequencies and 
        the benefits that may be obtained from commercial and other 
        non-Federal uses of the reassigned frequencies.

SEC. 4005. WITHDRAWAL OR LIMITATION OF ASSIGNMENT TO FEDERAL GOVERNMENT 
              STATIONS.

    (a) In General.--The President shall--
            (1) within 12 months after receipt of the report required 
        by section 404(d)(1), withdraw the assignment to a Federal 
        Government station of any frequency in the frequencies 
        recommended by that report for immediate reallocation;
            (2) by the effective date recommended by the Secretary 
        under section 404(e) (except as provided in subsection (b)(4) 
        of this section), withdraw or limit the assignment to a Federal 
        Government station of any frequency which the report required 
        by section 404(d)(3) recommends be reallocated or made 
        available for mixed use on such recommended effective date;
            (3) assign or reassign other frequencies to Federal 
        Government stations as necessary to adjust to such withdrawal 
        or limitation of assignments; and
            (4) transmit a notice and description to the Commission and 
        each House of Congress of the actions taken under this 
        subsection.
    (b) Exceptions.--
            (1) Authority to substitute.--If the President determines 
        that a circumstance described in paragraph (2) exists, the 
        President--
                    (A) may substitute an alternative frequency for the 
                frequency that is subject to such determination and 
                withdraw (or limit) the assignment of that alternative 
                frequency in the manner required by subsection (a); and
                    (B) shall submit a statement of the reasons for 
                taking the action described in subparagraph (A) to the 
                Committee on Energy and Commerce of the House of 
                Representatives and the Committee on Commerce, Science, 
                and Transportation of the Senate.
            (2) Grounds for substitution.--Each of the following 
        subparagraphs describes a circumstance referred to in paragraph 
        (1):
                    (A) The reassignment would seriously jeopardize the 
                national defense interests of the United States.
                    (B) The frequency proposed for reassignment is 
                uniquely suited to meeting important governmental 
                needs.
                    (C) The reassignment would seriously jeopardize 
                public health or safety.
                    (D) The reassignment will result in costs to the 
                Federal Government that are excessive in relation to 
                the benefits that may be obtained from commercial or 
                other non-Federal uses of the reassigned frequency.
                    (E) The reassignment will disrupt the existing use 
                of a Federal Government band of frequencies by amateur 
                radio licensees.
            (3) Criteria for substituted frequencies.--For purposes of 
        paragraph (1), a frequency may not be substituted for a 
        frequency identified and recommended under section 404 for 
        reallocation, unless the substituted frequency also meets each 
        of the criteria specified by section 404(a).
            (4) Delays in implementation.--If the President determines 
        that any action cannot be completed by the effective date 
        recommended by the Secretary pursuant to section 404(e), or 
        that such an action by such date would result in a frequency 
        being unused as a consequence of the Commission's plan under 
        section 404(b), the President may--
                    (A) withdraw or limit the assignment to Federal 
                Government stations on a later date that is consistent 
                with such plan, except that the President shall notify 
                each Committee specified in paragraph (1)(B) and the 
                Commission of the reason that withdrawal or limitation 
                at a later date is required; or
                    (B) substitute alternative frequencies pursuant to 
                this subsection.
    (c) Costs of Withdrawing Frequencies Assigned to the Federal 
Government.--
            (1) Reimbursement authorized.--Any Federal agency, or non-
        Federal entity operating on behalf of a Federal agency, whose 
        operation is displaced from a frequency pursuant to this 
        section may be reimbursed, from revenues received pursuant to 
        section 408, not more than the incremental costs such agency or 
        entity incurs (in such amounts as are provided in advance in an 
        appropriations Act) that are directly attributable to the 
        displacement from the frequency. The estimates of these costs 
        shall be prepared by the affected agency, in consultation with 
        the Department of Commerce.
            (2) Authorization of appropriations.--There are authorized 
        to be appropriated to the affected Federal agencies such sums 
        as may be necessary to carry out the purposes of this 
        subsection.
    (d) Existing Authority Retained.--
            (1) Additional reallocation.--Nothing in this subtitle 
        prevents or limits additional reallocation of spectrum from the 
        Federal Government to the commercial or other sectors.
            (2) Implementation of new technologies and services.--
        Notwithstanding any other provision of this subtitle--
                    (A) the Secretary may at any time allow frequencies 
                allocated on a primary basis for Federal Government use 
                to be used by non-Federal licensees on a mixed-use 
                basis for the purpose of facilitating the prompt 
                implementation of new technologies or services; and
                    (B) the Commission shall expedite and give priority 
                to the allocation of any frequencies identified 
                pursuant to subparagraph (A), and any associated 
                licensing.

SEC. 4006. ALLOCATION AND ASSIGNMENT OF FREQUENCIES BY THE COMMISSION.

    (a) Allocation and Assignment of Immediately Available 
Frequencies.--With respect to the frequencies made available for 
immediate reallocation pursuant to section 405(a)(1), the Commission, 
not later than 18 months after the date of enactment of this Act, shall 
issue rules to allocate such frequencies and shall propose rules to 
assign such frequencies.
    (b) Allocation and Assignment of Remaining Available Frequencies.--
With respect to the frequencies made available for reallocation 
pursuant to section 405(a)(2), the Commission shall, not later than 1 
year after receipt of the final report identified in section 404(d)(4), 
prepare, in consultation with the Assistant Secretary of Commerce for 
Communications and Information, submit to the President and the 
Congress, and implement, a plan for the allocation and assignment under 
the Act of such frequencies. Such plan shall--
            (1) not propose the immediate allocation and assignment of 
        all such frequencies but, taking into account the timetable 
        recommended by the Secretary pursuant to section 404(e), shall 
        propose--
                    (A) gradually to allocate and assign the 
                frequencies remaining, after making the reservation 
                required by subparagraph (B), over the course of 10 
                years beginning on the date of submission of such plan; 
                and
                    (B) to reserve a significant portion of such 
                frequencies for distribution beginning after the end of 
                such 10-year period;
            (2) contain appropriate provisions to ensure the 
        availability of frequencies for (A) new technologies and 
        services in accordance with the policies of section 7 of the 
        Act (47 U.S.C. 157) and (B) the safety of life and property in 
        accordance with the policies of section 1 of the Act (47 U.S.C. 
        151);
            (3) address (A) the feasibility of reallocating portions of 
        the spectrum from current commercial and other non-Federal uses 
        to provide for more efficient use of the spectrum, and (B) 
        innovation and marketplace developments that may affect the 
        relative efficiencies of different spectrum allocations;
            (4) not prevent the Commission from allocating frequencies, 
        and assigning licenses to use frequencies, not included in the 
        plan; and
            (5) not preclude the Commission from making changes to the 
        plan in future proceedings.
    (c) Amendment to the Act.--Section 303 of the Act (47 U.S.C. 303) 
is amended by adding at the end the following new subsection:
    ``(v) Have authority to assign licenses to use the frequencies 
reallocated from United States Government use to non-United States 
Government use pursuant to the Emerging Telecommunications Technologies 
Act of 1993; except that any such assignment shall be made expressly 
subject to the right of the President to reclaim such frequencies under 
section 7 of such Act.''.

SEC. 4007. AUTHORITY TO RECLAIM REASSIGNED FREQUENCIES.

    (a) Authority of President.--Subsequent to the withdrawal of 
assignment to Federal Government stations pursuant to section 405, the 
President may reclaim reassigned frequencies for reassignment to 
Federal Government stations in accordance with this section.
    (b) Procedure for Reclaiming Frequencies.--
            (1) Unallocated frequencies.--If the frequencies to be 
        reclaimed have not been allocated or assigned by the Commission 
        pursuant to the Act, the President shall follow the procedures 
        for substitution of frequencies established by section 405(b) 
        of this subtitle.
            (2) Allocated frequencies.--If the frequencies to be 
        reclaimed have been allocated or assigned by the Commission, 
        the President shall follow the procedures for substitution of 
        frequencies established by section 405(b) of this subtitle, 
        except that the notification required by section 405(b)(1)(B) 
        shall include--
                    (A) a timetable to accommodate an orderly 
                transition for displaced licensees to obtain new 
                frequencies and equipment necessary for its 
                utilization; and
                    (B) an estimate of the cost of displacing spectrum 
                uses licensed by the Commission.
    (c) Costs of Reclaiming Frequencies; Appropriations Authorized.--
The Federal Government shall bear all costs of reclaiming frequencies 
pursuant to this section, including the cost of equipment which is 
rendered unusable, the cost of relocating operations to a different 
frequency, and any other costs that are directly attributable to the 
reclaiming of the frequency pursuant to this section. There are 
authorized to be appropriated such sums as may be necessary to carry 
out the purposes of this section.
    (d) Effective Date of Reclaimed Frequencies.--The Commission shall 
not withdraw licenses for any reclaimed frequencies until the end of 
the fiscal year following the fiscal year in which the President's 
notification is received.
    (e) Effect on Other Law.--Nothing in this section shall be 
construed to limit or otherwise affect the authority of the President 
under section 706 of the Act (47 U.S.C. 606).

SEC. 4008. COMPETITIVE BIDDING.

    (a) Competitive Bidding.--
            (1) In general.--
                    (A) Five-year authorization.--The Commission shall, 
                during fiscal years 1994 through 1998, use the 
                competitive bidding process authorized under the 
                amendment made by subsection (b) to grant all radio 
                spectrum licenses for which two or more mutually 
                exclusive applications have been filed, including the 
                200 megahertz of spectrum made available to the 
                Commission under this subtitle, and including the 
                licenses issued for a personal communications service 
                established pursuant to the proceeding entitled 
                ``Amendment to the Commission's Rules to Establish New 
                Personal Communications Services'', or any successor 
                proceeding, except for those licenses identified in 
                subparagraphs (A) through (E) of section 309(j)(4) of 
                the Act and those licenses that the Commission 
                determines should in the public interest be issued by 
                comparative hearing under section 309(a) through (f) of 
                the Act. To the extent possible, and consistent with 
                the purposes of this subtitle, the Commission shall 
                seek to ensure that revenues received pursuant to the 
                competitive bidding process are received before the end 
                of fiscal year 1998.
                    (B) Expiration of requirements.--The requirements 
                of subparagraph (A) shall expire either--
                            (i) upon a determination by the Secretary 
                        of the Treasury that competitive bidding has 
                        resulted in or is reasonably expected to result 
                        in the receipt of $7,200,000,000 by the end of 
                        fiscal year 1998, or
                            (ii) at the end of fiscal year 1998, 
                        whichever is earlier.
                    (C) Report to president and congress.--The 
                Commission shall prepare, in consultation with the 
                Assistant Secretary of Commerce for Communications and 
                Information, and submit to the President and the 
                Congress, not later than March 31, 1997, and March 31, 
                1999, reports on the use of competitive bidding under 
                subparagraph (A). Such reports shall examine, in 
                addition to any other matters deemed appropriate by the 
                Commission, whether and to what extent--
                            (i) competitive bidding significantly 
                        improved the efficiency and effectiveness of 
                        the process for granting radio spectrum 
                        licenses;
                            (ii) competitive bidding facilitated the 
                        introduction of new spectrum-based technologies 
                        and the entry of new companies into the 
                        telecommunications market;
                            (iii) the needs of rural spectrum users 
                        were adequately addressed in the competitive 
                        bidding process;
                            (iv) small businesses and minority-owned 
                        businesses were able to participate 
                        successfully in the competitive bidding 
                        process; and
                            (v) statutory changes are needed to improve 
                        the competitive bidding process.
            (2) Retention of revenues.--Notwithstanding paragraph (6) 
        of section 309(j) of the Act, as added by this subtitle, the 
        salaries and expenses account of the Commission shall retain as 
        an offsetting collection such sums as may be necessary from the 
        receipts received pursuant to such section for the costs of 
        developing and implementing the program required by subsection 
        (a)(1)(A). Such offsetting collections shall be available for 
        obligation subject to the terms and conditions of the receiving 
        appropriations account, and shall be deposited in such accounts 
        on a quarterly basis. Any funds appropriated to the Commission 
        for fiscal years 1994 through 1998 for the purpose of assigning 
        licenses using random selection under section 309(i) of the Act 
        shall be used by the Commission to implement section 309(j) of 
        the Act.
    (b) Competitive Bidding Authorization.--Section 309 of the Act (47 
U.S.C. 309) is amended by adding at the end the following new 
subsection:
    ``(j)(1) Subject to the exemptions and conditions set forth in the 
other provisions of this subsection, if there are two or more mutually 
exclusive applications for any construction permit or initial license 
which will involve any use of the electromagnetic spectrum, the 
Commission shall have authority to use competitive bidding in the 
granting of such construction permit or initial license.
    ``(2)(A) The Commission shall, within 6 months after the date of 
enactment of the Emerging Telecommunications Technologies Act of 1993 
and following public notice and comment proceedings, issue rules 
establishing competitive bidding procedures under this subsection. Such 
rules shall include safeguards to protect the public interest in the 
use of the spectrum and shall ensure the opportunity for successful 
participation by small businesses and minority-owned businesses.
    ``(B)(i) In the rules issued pursuant to subparagraph (A), the 
Commission shall require potential bidders to file a first-stage 
application indicating an intent to participate in the competitive 
bidding process and containing such other information as the Commission 
finds necessary. After conducting the bidding, the Commission shall 
require the wining bidder to file a second-stage application. After 
determining that such application is acceptable for filing and that the 
winning bidder is qualified as described in clause (ii), the Commission 
shall grant the permit or license to the winning bidder.
    ``(ii) No permit or license shall be granted to a winning bidder 
pursuant to clause (i) unless the Commission determines that such 
winning bidder is qualified pursuant to section 308(b) and subsection 
(a) of this section, on the basis of the information contained in the 
first-stage and second-stage applications submitted pursuant to clause 
(i).
    ``(iii) Each participant in the competitive bidding process shall 
be subject to the schedule of charges contained in section 8.
    ``(C) In the rules issued pursuant to subparagraph (A), the 
Commission, in addition to other actions it finds necessary to 
implement competitive bidding fairly and effectively, shall--
            ``(i) establish the method of bidding (including but not 
        limited to sealed bids) and the basis for payment (such as 
        installment or lump sum payments, royalties on future income, a 
        combination thereof, or other reasonable forms of payment 
        specified by the Commission); and
            ``(ii) establish other appropriate conditions on such 
        permits and licenses that serve the public interest.
    ``(3)(A)(i) If the Commission decides to use competitive bidding to 
grant two or more national, regional, or local licenses per market in a 
terrestrial service that will compete with telephone exchange service 
provided by a qualified common carrier, the Commission shall designate 
one such license per market as a rural program license.
    ``(ii) The Commission shall define the geographic boundaries of the 
rural program license to correspond to the geographic area of the 
telephone exchange service by which the qualified common carrier became 
eligible for the rural program license under subparagraph (E)(ii).
    ``(B)(i) Except as provided in subparagraph (D), the Commission 
shall either grant a rural program license to the qualified common 
carrier providing telephone exchange service in the area covered by 
such license, or grant a license to a consortium of such qualified 
carriers.
    ``(ii) No qualified common carrier that receives a rural program 
license shall be eligible to--
            ``(I) receive any other license to provide the same service 
        in such area; or
            ``(II) own any equity interest in, become a creditor of, or 
        otherwise become affiliated with any entity that holds a 
        license to provide the same service in such area.
    ``(iii) Any qualified common carrier that receives a rural program 
license shall (I) provide to all other licensees providing the same 
service in such area the same quality of access to its wire network 
that it provides itself, and (II) shall interconnect its wireless 
service with the wireless service provided by another licensee 
providing the same service on the same frequency in a different 
geographic area. Such other licensee shall provide an equivalent 
interconnection with the wireless service of such rural program 
licensee.
    ``(iv) The Commission may establish other rules or conditions for 
the award of a rural program license, consistent with the intent of 
this paragraph.
    ``(C)(i) Upon the grant of a rural program license to a qualified 
common carrier, such carrier shall pay a fee (in lump sum or 
installment payments, in royalties on future income, in a combination 
thereof, or on any other reasonable basis specified by the Commission) 
equal to the value of such license. The value of such license shall be 
the average of the amounts paid by persons granted licenses through 
competitive bidding to provide the same service in such area, except 
that the Commission shall determine the value of such license by any 
reasonable means when the geographic area served by the rural program 
license is not congruent with the geographic area served by the other 
license or licenses. The Commission shall ensure that the total amount 
paid by qualified common carriers for all the licenses issued to them 
under the rural program shall equal the total value, as determined 
under clause (ii), of such licenses.
    ``(ii) The Commission shall determine the total value of the 
licenses issued under the rural program to qualified common carriers by 
first adding the amounts paid for the licenses not subject to the rural 
program, and dividing that sum by the number of licenses per market 
that are not subject to the rural program. The Commission shall then 
subtract from the amount found in the previous calculation the total 
amount paid for the licenses issued for the non-rural areas under 
bidding subject to the rural program and the total amount paid for 
licenses issued pursuant to subparagraph (D). The amount remaining 
shall be the total value of all the licenses issued under the rural 
program to qualified common carriers.
    ``(D) If no qualified common carrier applies for a rural program 
license in a particular market and the Commission awards the non-rural 
program licenses through competitive bidding, the rural program shall 
not apply for that particular market and the Commission shall use 
competitive bidding to award the licenses for the former rural program 
areas, either separately or as part of larger license areas.
    ``(E) For purposes of this paragraph--
            ``(i) the term `rural area' means any geographic area that 
        does not include either--
                    ``(I) any incorporated place of 10,000 inhabitants 
                or more, or any part thereof; or
                    ``(II) any territory, incorporated or 
                unincorporated, included in an urbanized area (as 
                defined by the Bureau of the Census as of the date of 
                enactment of the Emerging Telecommunications 
                Technologies Act of 1993); and
            ``(ii) the term `qualified common carrier' means a common 
        carrier that--
                    ``(I) either provides telephone exchange service by 
                wire in a rural area, provides telephone exchange 
                service by wire to less than 10,000 subscribers, or is 
                a telephone utility whose income accrues to a State or 
                political subdivision thereof; and
                    ``(II) submits an application for a rural program 
                license that meets the standards established by the 
                Commission to determine ability to provide the service 
                covered by the license.
    ``(F) The provisions of subparagraph (A)(ii) do not limit the 
Commission's discretion to determine, for licenses issued other than 
under this paragraph, the size of any market area or the number of 
licensees for any service.
    ``(4) The competitive bidding authority provided to the Commission 
in paragraph (1) shall not--
            ``(A) because of the need to avoid excessive service 
        disruption, extend to license renewals and modifications;
            ``(B) because of the essential services they provide, 
        extend to licenses reserved for the United States Government 
        and State or local government entities;
            ``(C) because of their public service obligations, extend 
        to licenses to provide amateur operator services, over-the-air 
        terrestrial radio and television broadcast services, public 
        safety services, and radio astronomy services;
            ``(D) because they do not involve mutually exclusive 
        applications, extend to private radio end-user licenses, 
        including Specialized Mobile Radio Service (SMRS), maritime, 
        and aeronautical end-user licenses;
            ``(E) because of the need to avoid excessive service 
        disruption, extend to any license grant to a non-Federal 
        licensee being moved from its current frequency assignment to a 
        different one by the Commission in order to make spectrum 
        available for new technologies; and
            ``(F) extend to any other service, class of services, or 
        assignments that the Commission determines, after conducting 
        public notice and comment proceedings, should be exempt from 
        competitive bidding because of public interest factors 
        warranting an exemption to the extent the Commission determines 
        the use of competitive bidding would jeopardize appropriate 
        treatment of those factors.
    ``(5) No provision of this subsection or of the Emerging 
Telecommunications Technologies Act of 1993 shall be construed, in any 
way, to--
            ``(A) alter spectrum allocation criteria and procedures 
        established by the other provisions of this Act;
            ``(B) allow the Commission to consider potential revenues 
        from competitive bidding when making decisions concerning 
        spectrum allocation;
            ``(C) diminish the authority of the Commission under the 
        other provisions of this Act to regulate or reclaim spectrum 
        licenses;
            ``(D) grant any right to a spectrum licensee different from 
        the rights awarded to licensees who obtained their license 
        through assignment methods other than competitive bidding; or
            ``(E) prevent the Commission from awarding licenses to 
        those persons who make significant contributions to the 
        development of a new telecommunications service or technology.
    ``(6) Moneys received from competitive bidding pursuant to this 
subsection shall be deposited in the general fund of the Treasury.''
    (c) State and Local Tax Treatment of Licenses and Permits.--Title 
VII of the Act (47 U.S.C. 601 et seq.) is amended by adding at the end 
the following new section:

``SEC. 714. STATE AND LOCAL TAX TREATMENT OF LICENSES AND PERMITS.

    ``A license or permit issued by the Commission under this Act shall 
not be treated as the property of the licensee for property tax 
purposes, or other similar tax purposes, by any State or local 
government entity.''.

SEC. 4009. REGULATORY PARITY.

    (a) Amendment.--Section 332 of the Act (47 U.S.C. 332) is amended--
            (1) by striking ``private land'' from the heading of the 
        section; and
            (2) by amending subsection (c) to read as follows:
    ``(c)(1)(A) A person engaged in the provision of commercial mobile 
services shall, insofar as such person is so engaged, be treated as a 
common carrier for purposes of this Act, except that the Commission may 
waive the requirements of sections 203, 204, 205, and 214, and the 30-
day notice provision of section 309(a), for commercial mobile services 
and such other provisions of title II as the Commission may, consistent 
with the public interest, specify by rule. In prescribing any such 
rule, the Commission may not waive for commercial mobile services the 
requirements of section 201, 202, 206, 208, 209, 215(c), 216, 217, 220 
(d) or (e), 223, 225, 226 (a), (b), (c), (d), (e), (f), (g), or (i), 
227, or 228, or any other provision that is necessary in order to 
ensure that the charges, practices, classifications, or regulations for 
or in connection with commercial mobile services are just and 
reasonable and are not unjustly or unreasonably discriminatory or that 
is otherwise in the public interest.
    ``(B) Upon reasonable request of any person providing commercial 
mobile service, the Commission shall order a common carrier to 
establish physical connections with such service pursuant to section 
201. Except to the extent that the Commission is required to respond to 
such a request, this subparagraph shall not be construed as a 
limitation or expansion of the Commission's authority to order 
interconnection under this Act.
    ``(2) A person engaged in private land mobile service shall not, 
insofar as such person is so engaged, be treated as a common carrier 
for any purpose under this Act. A common carrier shall not provide any 
dispatch service on any frequency allocated for common carrier service, 
except to the extent that such dispatch service is provided on stations 
licensed by the Commission in the Specialized Mobile Radio Service 
prior to May 24, 1993, or is provided on stations licensed in the 
domestic public land mobile radio service before January 1, 1982. The 
Commission may by regulation terminate, in whole or in part, the 
prohibition contained in the preceding sentence if the commission 
determines that such termination will service the public interest.
    ``(3)(A) Notwithstanding sections 2(b) and 221(b), no State or 
local government shall have any authority to regulate the entry of or 
the rates charged by any commercial mobile service or any private land 
mobile service, except that this paragraph shall not prohibit a State 
from regulating the other terms and conditions of commercial mobile 
services. Nothing in this subparagraph shall exempt providers of 
commercial mobile services (where such services are a substitute for 
land line telephone exchange service for a substantial portion of the 
communications within such State) from requirements imposed by a State 
commission on all providers of telecommunications services necessary to 
ensure the continued availability of telephone exchange service at 
affordable rates.
    ``(B) Notwithstanding subparagraph (A), a State may petition the 
Commission for authority to regulate the rates for any commercial 
mobile service if such State demonstrates that (i) such service is a 
substitute for land line telephone exchange service for a substantial 
portion of the communications within such State, or (ii) market 
conditions with respect to such services fail to protect subscribers 
adequately from unjust and unreasonable rates or rates that are 
unjustly or unreasonably discriminatory. The Commission shall provide 
reasonable opportunity for public comment in response to such petition, 
and shall, within 9 months after the date of its submission, grant or 
deny such petition. If the Commission grants such petition, the 
Commission shall authorize the State to exercise under State law such 
authority over rates, for such periods of time, as the Commission deems 
necessary to ensure that such rates are just and reasonable and not 
unjustly or unreasonably discriminatory.
    ``(C) If a State has in effect on June 1, 1993, any regulation 
concerning the rates for any commercial mobile service, such State may, 
no later than 1 year after the date of enactment of the Emerging 
Telecommunications Technologies Act of 1993, petition the Commission 
requesting that the State be authorized to continue exercising 
authority over such rates. The State's existing regulation shall, 
notwithstanding subparagraph (A), remain in effect until the Commission 
issues a final order granting or denying such petition. The Commission 
shall review such petition in accordance with the procedures and 
schedule established in subparagraph (B), and shall grant such petition 
if the State satisfies the showing required under subparagraph (B)(i) 
or (B)(ii). If the Commission grants such petition, the Commission 
shall authorize the State to exercise under the State law such 
authority over rates, for such period of time, as the Commission deems 
necessary to ensure that such rates are just and reasonable and not 
unjustly or unreasonably discriminatory.
    ``(D) After a reasonable period of time, as determined by the 
Commission, has elapsed from the issuance of an order under 
subparagraph (B) or (C), any interested party may petition the 
Commission for an order that the exercise of authority by a State 
pursuant to such subparagraph is no longer necessary to ensure that the 
rates for commercial mobile services are just and reasonable and not 
unjustly or unreasonably discriminatory. The Commission shall provide 
reasonable opportunity for public comment in response to such petition, 
and shall, within 9 months after the date of its submission, grant or 
deny such petition in whole or in part.
    ``(4) Nothing in this subsection shall be construed to alter or 
affect the regulatory treatment required by title IV of the 
Communications Satellite Act of 1962 of the corporation authorized by 
title III of such Act.
    ``(5) The Commission shall continue to determine whether the 
provision of space segment capacity by satellite systems to providers 
of commercial mobile services shall be treated as common carriage.
    ``(6) The provisions of section 310(b) shall not apply to any 
lawful foreign ownership in a provider of commercial mobile services 
prior to May 24, 1993, if that provider was not regulated as a common 
carrier prior to the date of enactment of the Emerging 
Telecommunications Technologies Act of 1993 and is deemed to be a 
common carrier under this Act.
    ``(7) As part of any proceeding under this subsection the 
Commission (i) shall consider in such proceeding the ability of new 
entrants to compete in the services to which such proceeding relates, 
and (ii) shall have the flexibility to amend, modify, or forbear from 
any regulation of new entrants under this subsection, or, consistent 
with the public interest, take other appropriate action, to provide a 
full opportunity for new entrants to compete in such services.
    ``(8) For purposes of this section--
            ``(A) the term `commercial mobile service' means any mobile 
        service (as defined in section 3(n)) that, as specified by 
        regulation by the Commission, is provided for profit and makes 
        interconnected service available (i) to the public or (ii) to 
        such broad classes of eligible users as to be effectively 
        available to a substantial portion of the public;
            ``(B) the term `interconnected service' means service that 
        is interconnected with the public switched network (as such 
        term is defined by regulation by the Commission) or service for 
        which interconnection pursuant to paragraph (1)(B) is pending; 
        and
            ``(C) the term `private land mobile service' means any 
        mobile service (as defined in section 3(n)) that is not a 
        commercial mobile service under subparagraph (A).''.
    (b) Conforming Amendments.--
            (1) Definition of mobile service.--Section 3 of the Act (47 
        U.S.C. 153) is amended--
                    (A) in subsection (n)--
                            (i) by inserting ``(1)'' immediately after 
                        ``and includes''; and
                            (ii) by inserting immediately before the 
                        period at the end the following: ``, (2) a 
                        mobile service which provides a regularly 
                        interacting group of base, mobile, portable, 
                        and associated control and relay stations 
                        (whether licensed on an individual, 
                        cooperative, or multiple basis) for private 
                        one-way or two-way land mobile radio 
                        communications by eligible users over 
                        designated areas of operation, and (3) any 
                        service for which a license is required in a 
                        personal communications service established 
                        pursuant to the proceeding entitled `Amendment 
                        to the Commission's Rules to Establish New 
                        Personal Communications Services' (GEN Docket 
                        No. 90-314; ET Docket No. 92-100), or any 
                        successor proceeding; but such term does not 
                        include any rural radio service as defined by 
                        the Commission and does not include the 
                        provision, by a local exchange carrier, of 
                        telephone exchange service by radio instead of 
                        by wire''; and
                    (B) by striking subsection (gg).
            (2) Regulation of intrastate communications.--Section 2(b) 
        of the Act (47 U.S.C. 152(b)) is amended by inserting ``and 
        section 332'' immediately after ``inclusive,''.
    (c) Rulemaking Schedule; Effective Date.--
            (1) Rulemaking required.--Within 1 year after the date of 
        enactment of this Act, the Commission shall--
                    (A) issue such modifications or terminations of its 
                regulations as are necessary to implement the 
                amendments made by subsection (a);
                    (B) make such other modifications of such 
                regulations as may be necessary to promote parity in 
                the regulatory treatment of providers of all commercial 
                mobile services that offer services that are 
                substantially similar; and
                    (C) include in such modifications and terminations 
                such provisions as are necessary to provide for an 
                orderly transition to the regulatory treatment required 
                by such amendments.
            (2) Effective date.--The amendments made by subsection (a) 
        shall be effective 1 year after such date of enactment, except 
        that--
                    (A) section 332(c)(1)(A) of the Act, as added by 
                such amendments, shall take effect upon such date of 
                enactment; and
                    (B) any person that provides private land mobile 
                services before such date of enactment shall continue 
                to be treated as a provider of private land mobile 
                service until 3 years after such date of enactment.

SEC. 4010. DEADLINES FOR PCS ORDERS AND LICENSING.

    The Commission shall--
            (1) within 180 days after the date of enactment of this 
        Act, issue a final report and order (A) in the matter entitled 
        ``Redevelopment of Spectrum to Encourage Innovation in the Use 
        of New Telecommunications Technologies'' (ET Docket No. 92-9); 
        and (B) in the matter entitled ``Amendment of the Commission's 
        Rules to Establish New Personal Communications Services'' (GEN 
        Docket No. 90-314; ET Docket No. 92-100); and
            (2) within 270 days after such date of enactment, commence 
        issuing licenses and permits in the personal communications 
        service.

SEC. 4011. DEFINITIONS.

    As used in this subtitle:
            (1) The term ``allocation'' means an entry in the National 
        Table of Frequency Allocations of a given frequency band for 
        the purpose of its use by one or more radiocommunication 
        services.
            (2) The term ``assignment'' means an authorization given to 
        a station licensee to use specific frequencies or channels in a 
        particular geographic area.
            (3) The term ``commercial carrier'' means any entity that 
        uses a facility licensed by the Federal Communications 
        Commission pursuant to the Communications Act of 1934 for hire 
        or for its own use, but does not include Federal Government 
        stations licensed pursuant to section 305 of the Act (47 U.S.C. 
        305).
            (4) The term ``Commission'' means the Federal 
        Communications Commission.
            (5) The term ``Secretary'' means the Secretary of Commerce.
            (6) The term ``the Act'' means the Communications Act of 
        1934 (47 U.S.C. 151 et seq.).

                   Subtitle B--Vessel Tonnage Duties

SEC. 4051. EXTENSION OF VESSEL TONNAGE DUTIES.

    (a) Extension of Duties.--Section 36 of the Act of August 5, 1909 
(36 Stat. 111; 46 App. U.S.C. 121), is amended--
            (1) by striking ``and 1995,'' each place it appears and 
        inserting in lieu thereof ``1995, 1996, 1997, and 1998,'';
            (2) by striking ``place,'' and inserting in lieu thereof 
        ``place;''; and
            (3) by striking ``port, not, however, to include vessels in 
        distress or not engaged in trade'' and inserting in lieu 
        thereof ``port. However, neither duty shall be imposed on 
        vessels in distress or not engaged in trade''.
    (b) Conforming Amendment.--The Act of March 8, 1910 (36 Stat. 234; 
46 App. U.S.C. 132), is amended by striking ``and 1995,'' and inserting 
in lieu thereof ``1995, 1996, 1997, and 1998.''.
    (c) Technical Correction.--
            (1) Correction.--Section 10402(a) of the Omnibus Budget 
        Reconciliation Act of 1990 (104 Stat. 1388-398) is amended by 
        striking ``in the second paragraph''.
            (2) Effective date.--The amendment made by paragraph (1) 
        shall be effective on and after November 5, 1990.

           TITLE V--COMMITTEE ON ENERGY AND NATURAL RESOURCES

             Subtitle A--Recreation and Commercial Use Fees

SEC. 5001. ADMISSION FEES.

    Section 4(a) of the Land and Water Conservation Fund Act of 1965 
(16 U.S.C. 460l-6a(a)), is amended:
            (1) by inserting in the first sentence of the first 
        paragraph after the words ``National Park System'' the words 
        ``and for fiscal years 1994 through 1998, the Bureau of Land 
        Management'' and by inserting after the words ``National 
        Recreation Areas'' the words ``, and for fiscal years 1994 
        through 1998, National Monuments, National Volcanic Monuments, 
        National Scenic Areas, and areas of concentrated public use''; 
        and
            (2) by adding at the end the following new paragraph:
            ``(13) For the purposes of this subsection, `areas of 
        concentrated public use' shall meet each of the following 
        criteria:
                    ``(A) be managed primarily for outdoor recreation 
                purposes;
                    ``(B) provide facilities and services necessary to 
                accommodate heavy public use;
                    ``(C) contain at least one major recreation 
                attraction including, but not limited to, a lake, 
                river, historical site, or geologic feature; and
                    ``(D) provide public access such that admission 
                fees can be efficiently collected at one or more 
                centralized locations.''.

SEC. 5002. RECREATION USE FEES.

    (a) In General.--The first sentence of section 4(b) of the Land and 
Water Conservation Fund Act of 1965 (16 U.S.C. 460l-6a(b)) is amended 
by striking out ``visitors' centers,'' and all that follows down 
through the period at the end thereof and inserting the following: 
``scenic drives, or toilet facilities: Provided, That in no event shall 
there be any charge for the use of any campground not having a majority 
of the following: tent or trailer spaces, picnic tables, drinking 
water, access road, refuse containers, toilet facilities, fee 
collection by an employee or agent of the Federal agency operating the 
facility, reasonable visitor protection, and simple devices for 
containing a campfire (where campfires are permitted). For purposes of 
this subsection, the term `specialized outdoor recreation site' 
includes but shall not be limited to campgrounds, swimming sites, boat 
launch facilities, and managed parking lots.''.
    (b) Costs of Collection.--Section 4(i) of the Land and Water 
Conservation Fund Act of 1965 (16 U.S.C. 460l-6a(i)) is amended by 
inserting ``(A)'' after ``(1)'' and by adding the following at the end 
of paragraph (1):
            ``(B) Notwithstanding subparagraph (A), in any fiscal year, 
        the Secretary of Agriculture and the Secretary of the Interior 
        may withhold from the special account established under 
        subparagraph (A) such portion of all receipts the fees 
        collected in that fiscal year under this section as such 
        Secretary determines to be equal to the additional fee 
        collection costs for that fiscal year. The amounts so withheld 
        shall be retained by the Secretary of Agriculture or the 
        Secretary of the Interior and shall be available, without 
        further appropriation, for expenditure by the Secretary 
        concerned in the fiscal year in which collected to cover such 
        additional fee collection costs. The Secretary concerned shall 
        deposit in the special account established pursuant to 
        subparagraph (A) any amounts so retained which remain 
        unexpended and unobligated at the end of such fiscal year. For 
        the purposes of this subparagraph, for any fiscal year, the 
        term `additional fee collection costs' means those costs for 
        personnel and infrastructure directly associated with the 
        collection fees imposed under this section which exceed the 
        costs for personnel and infrastructure directly associated with 
        the collection of such fees during fiscal year 1993.''.
    (c) Commerical Tour Use Fees.--(1) For fiscal years 1994 through 
1998, in the case of each unit of the National Park System for which an 
admission fee is charged under section 4 of the Land and Water 
Conservation Fund Act of 1965 (16 U.S.C. 460l-4), the Secretary of the 
Interior shall establish, by October 1, 1993, a commercial tour use fee 
to be imposed on each vehicle entering the unit for the purpose of 
providing commercial tour services within the unit. Fee revenue derived 
from such commercial tour use fees shall be deposited into the special 
account established under section 4(i) of the Land and Water 
Conservation Fund Act of 1965.
    (2) The Secretary shall establish the amount of fee per entry as 
follows:
            (A) $25 per vehicle with a passenger capacity of 25 persons 
        or less, and
            (B) $50 per vehicle with a passenger capacity of more than 
        25 persons.
    (3) The commercial tour use fee imposed under this subsection shall 
not apply to either of the following:
            (A) Any vehicle transporting organized school groups or 
        outings conducted for educational purposes  by  schools  or  
        other  bona  fide  educational institutions.
            (B) Any vehicle entering a park system unit pursuant to a 
        contract issued under the Act of October 9, 1965 (16 U.S.C. 20-
        20g) entitled ``An Act relating to the establishment of 
        concession policies in the areas administered by the National 
        Park Service and for other purposes.''.
    (d) Non-Federal Golden Eagle Passport Sales.--Section 4(a)(1)(A) of 
the Land and Water Conservation Fund Act of 1965 (16 U.S.C. 460l-
6a(a)(1)(A)) is amended by redesignating the paragraph as 4(a)(1)(A)(i) 
and adding at the end thereof the following new paragraph:
    ``(ii) For fiscal years 1994 through 1998, the Secretary of the 
Interior and the Secretary of Agriculture may authorize businesses, 
non-profit entities, and other organizations to sell and collect fees 
for the Golden Eagle Passport subject to such conditions as the 
Secretaries may jointly prescribe. The Secretaries shall develop 
detailed guidelines for promotional advertising of non-Federal Golden 
Eagle Passport sales and shall monitor compliance with such guidelines. 
The Secretaries may authorize the sellers to maintain an inventory of 
Golden Eagle Passports for periods not to exceed 6 months, and to 
withhold amounts up to, but not exceeding 7 per centum of the fees of 
the gross fees collected from the sale of such passports as 
reimbursement for actual expenses of the sales.''.

SEC. 5002A. EXTENSION OF AUTHORITY TO COLLECT FEE.

    The third undesignated paragraph under the heading ``ADMINISTRATIVE 
PROVISIONS'' in chapter VII of title I of Public Law 98-63 (97 Stat. 
329) is amended by striking paragraph (3).

SEC. 5003. RADIO AND TELEVISION COMMUNICATION SITE FEES.

    (a) Notwithstanding any other provision of law, the Secretary of 
Agriculture and the Secretary of the Interior (hereinafter referred to 
as ``the Secretaries''), shall assess and collect charges for 
utilization of radio and television communications sites located on 
Federal lands administered by the Forest Service or the Bureau of Land 
Management at such rates as the Forest Service and the Bureau of Land 
Management shall establish or at such modified rates as are established 
pursuant to the provisions of subsection (b) of this section.
    (b) The schedule of charges established under this section shall be 
reviewed by the Forest Service and the Bureau of Land Management on an 
annual basis, and shall be adjusted by the Forest Service and the 
Bureau of Land Management to reflect changes in the Consumer Price 
Index. Increases or decreases in charges shall apply to all categories 
of charges, but any increase or decrease shall not total less than 3 
percent or more than 5 percent of the charge assessed to the user in 
the preceding year. The Bureau of Land Management and the Forest 
Service shall transmit to the Congress notification of any such 
adjustment not later than 60 days before the effective date of such 
adjustment.
            (1) Under the schedule of charges established under the 
        section, if any radio or television communications site user is 
        to be charged an amount that is greater than $1,000 more than 
        the amount such site user pays to the Bureau of Land Management 
        or the Forest Service as of January 1, 1993, then during the 
        first year in which the schedule of charges is in effect, such 
        site user shall pay an amount equal to the amount it paid to 
        the Bureau of Land Management or the Forest Service as of 
        January 1, 1993 plus $1,000. Each year thereafter, such site 
        user shall pay the full amount under the schedule of charges, 
        as modified pursuant to the subsection.
            (2) Under the schedule of charges established under this 
        section, if any radio or television communications site user is 
        to be charged an amount that is less than the amount such site 
        user paid to the Bureau of Land Management or the Forest 
        Service as of January 1, 1993, such site user shall continue to 
        pay the higher amount until such time as the charge to the site 
        user in the schedule of charges equals or exceeds that amount, 
        as modified pursuant to this subsection.
    (c)(1) If the radio or television communications site user is 
permitted under the terms of its site use authorization from the Bureau 
of Land Management or the Forest Service to grant access to the site to 
additional users, then the radio or television communications site user 
shall pay annually to the Bureau of Land Management or the Forest 
Service an amount equal to 25 percent of the gross income it receives 
from each such additional user during that year.
    (2) Authorizations to radio and television communications site 
users shall require such site users to provide the Bureau of Land 
Management or the Forest Service with a certified list which identifies 
all additional users of such sites and all gross revenues received from 
such additional users. The Bureau of Land Management and the Forest 
Service shall not require any additional user of a radio or television 
communications site to obtain a separate authorization to use such a 
site.
    (d)(1) The Secretaries shall prescribe appropriate rules and 
regulations to carry out the provisions of this section.
    (2) Ten years after the date of enactment of this section, the 
Secretaries shall establish a broad-based advisory group, including 
representatives from the radio and television broadcast industry, to 
review the schedule of charges and other acceptable criteria for 
determining fair market value for radio and television communications 
site users. The advisory group shall report its findings to the 
Congress no later than 1 year after it is established.
    (e)(1) Until modified pursuant to subsection (b) of this section, 
the schedule of charges for television communications site users which 
the Secretaries shall prescribe pursuant to subsection (a) of this 
section shall be as listed in exhibit 3, (television rental fee 
schedule) in the report of the radio and television broadcast use fee 
advisory committee dated December 1992.
    (2) Until modified pursuant to subsection (b) of this section, the 
schedule of charges for radio communications site users which the 
Secretaries shall prescribe pursuant to subsection (a) of this section 
shall be as listed in exhibit 4, (radio rental fee schedule) in the 
report of the radio and television broadcast use fee advisory committee 
dated December 1992.
    (f)(1) The Secretaries are directed to jointly establish a broad-
based advisory group comprised of representatives from the non-
broadcast communications industry (users of both private and public 
communication sites) and the two agencies to review recommendations on 
acceptable criteria for determining fair market values and next best 
alternative use.
    (2) The advisory group shall review the methodology used in any 
previous studies and reach concurrence on such methodology.
    (3) The advisory group shall also assess the validity of the 
results of such studies, taking into account all reasonable options for 
the establishment of fair market values and next best alternative use.
    (4) The advisory group shall report its findings to the Committee 
on Energy and Natural Resources of the United States Senate and the 
Committee on Natural Resources of the United States House of 
Representatives within one year after the enactment of this Act.

           Subtitle B--Hardrock Mining Claim Maintenance Fee

SEC. 5101. FEE.

    (a) Except as provided in section 2511(e)(2) of the Energy Policy 
Act of 1992, for each unpatented mining claim, mill or tunnel site on 
federally owned lands, whether located before or after enactment of 
this Act, each claimant shall pay to the Secretary of the Interior, on 
or before August 31 of each year, for years 1994 through 1998, a claim 
maintenance fee of $100 per claim to hold such unpatented mining claim, 
mill or tunnel site for the assessment year beginning at noon on the 
next day, September 1. Such claim maintenance fee shall be in lieu of 
the assessment work requirement contained in the Mining Law of 1872 (30 
U.S.C. 28-28e) and the related filing requirements contained in section 
314(a) and (c) of the Federal Land Policy and Management Act of 1976 
(43 U.S.C. 1744(a) and (c)).
    (b)(1) The claim maintenance fee required under this section shall 
be waived for a claimant who certifies in writing to the Secretary that 
on the date the payment was due, the claimant and all related parties--
            (A) held not more than 10 mining claims, mill sites, or 
        tunnel sites, or any combination thereof, on public lands; and
            (B) have performed assessment work required under the 
        Mining Law of 1872 (30 U.S.C. 28-28e) to maintain the mining 
        claims held by the claimant and such related parties for the 
        assessment year ending on noon of September 1 of the calendar 
        year in which payment of the claim maintenance fee was due.
    (2) For purposes of paragraph (1), with respect to any claimant, 
the term ``all related parties'' means--
            (A) the spouse and dependent children (as defined in 
        section 152 of the Internal Revenue Code of 1986), of the 
        claimant; or
            (B) a person affiliated with the claimant, including--
                    (i) a person controlled by, controlling, or under 
                common control with the claimant; or
                    (ii) a subsidiary or parent company or corporation 
                of the claimant.
    (c)(1) The Secretary shall adjust the fees required by this section 
to reflect changes in the Consumer Price Index published by the Bureau 
of Labor Statistics of the Department of Labor every 5 years after the 
date of enactment of this Act, or more frequently if the Secretary 
determines an adjustment to be reasonable.
    (2) The Secretary shall provide claimants notice of any adjustment 
made under this subsection not later than July 1 of any year in which 
the adjustment is made.
    (3) A fee adjustment under this section shall begin to apply the 
calendar year following the calendar year in which it is made.
    (d) Monies received under this section shall be deposited as 
miscellaneous receipts in the Treasury.

SEC. 5102. LOCATION.

    (a) Notwithstanding any provision of law, for every unpatented 
mining claim, mill or tunnel site located after the date of enactment 
of this subtitle and before September 30, 1998, the locator shall, at 
the time the location notice is recorded with the Bureau of Land 
Management, pay to the Secretary of the Interior a location fee, in 
addition to the fee required by section 5101, of $25.00 per claim.
    (b) Moneys received under this section shall be deposited as 
miscellaneous receipts in the Treasury.

SEC. 5103. CO-OWNERSHIP.

    The co-ownership provisions of the Mining Law of 1872 (30 U.S.C. 
28-28e) will remain in effect except that the annual claim maintenance 
fee, where applicable, shall replace applicable assessment requirements 
and expenditures.

SEC. 5104. FAILURE TO PAY.

    Failure to pay the claim maintenance fee as required by section 
5101 of this subtitle shall conclusively constitute a forfeiture of the 
unpatented mining claim, mill or tunnel site by the claimant and the 
claim shall be deemed null and void by operation of law.

SEC. 5105. OTHER REQUIREMENTS.

    (a) Nothing in this subtitle shall change or modify the 
requirements of section 314(b) of the Federal Land Policy and 
Management Act of 1976 (43 U.S.C. 1744(b)), or the requirements of 
section 314(c) of the Federal Land Policy and Management Act of 1976 
(43 U.S.C. 1744(c)) related to filings required by section 314(b), 
which remain in effect.
    (b) The third sentence of 2324 of the Revised Statutes (30 U.S.C. 
28) is amended by inserting after ``On each claim located after the 
10th day of May, 1972,'' the following: ``that is eligible for a waiver 
under section 5101 of the Omnibus Budget Reconciliation Act of 1993,''.

SEC. 5106. REGULATIONS.

    The Secretary of the Interior shall promulgate rules and 
regulations to carry out the purposes of this subtitle as soon as 
practicable after the date of enactment of this subtitle.

     Subtitle C--Commonwealth of Northern Mariana Islands Agreement

SEC. 5201. COMMONWEALTH OF NORTHERN MARIANA ISLANDS AGREEMENT.

    Public Law 94-241 (90 Stat. 263), as amended, is further amended by 
striking ``law'' in subsection 4(b) and inserting in lieu thereof the 
following: ``law: Provided, That for fiscal years 1994 through 1998, 
payments shall be limited to the amounts and for the purposes set forth 
in the Agreement of the Special Representatives on Future Federal 
Financial Assistance of the Northern Mariana Islands, executed on 
December 17, 1992 between the special representative of the President 
and the special representatives of the Governor of the Northern Mariana 
Islands: Provided further, That after 1998, the amount shall continue 
at the annual amount of $27.720 million.

                      Subtitle D--Mineral Receipts

SEC. 5301. AMENDMENT TO THE MINERAL LEASING ACT.

    Section 35 of the Mineral Leasing Act, as amended (30 U.S.C. 191) 
is amended as follows:
            (1) by deleting the last sentence and redesignating the 
        remaining language as subsection (a);
            (2) by amending subsection (a) by inserting the words 
        ``and, subject to the provisions of subsection (b),'' between 
        the words ``United States;'' and ``50 per centum'';
            (3) by adding a new subsection (b) as follows:
    ``(b)(1) In calculating the amount to be paid to States during any 
fiscal year under this section or under any other provision of law 
requiring payment to a State of any revenues derived from the leasing 
of any onshore lands or interest in land owned by the United States for 
the production of the same types of minerals leasable under this Act or 
of geothermal steam, 50 per centum of the portion of the enacted 
appropriation of the Department of the Interior and any other agency 
during the preceding fiscal year allocable to the administration of all 
laws providing for the leasing of any onshore lands or interest in land 
owned by the United States for the production of the same types of 
minerals leasable under this Act or of geothermal steam, and in 
enforcing such laws, shall be deducted from the receipts derived under 
those laws in approximately equal amounts each month (subject to 
paragraph (4)) prior to the division and distribution of such receipts 
between the States and the United States.
    ``(2) The proportion of the deduction provided in paragraph (1) 
allocable to each State shall be determined by dividing the monies 
disbursed to the State during the preceding fiscal year derived from 
onshore mineral leasing referred to in paragraph (1) in that State by 
the total money disbursed to States during the preceding fiscal year 
from such onshore mineral leasing in all States.
    ``(3) In the event the deduction apportioned to any State under 
this subsection exceeds 50 per centum of the Secretary of the 
Interior's estimate of the amounts attributable to onshore mineral 
leasing referred to in paragraph (1) within that State during the 
preceding fiscal year, the deduction from receipts received from leases 
in that State shall be limited to such estimated amounts and the total 
amount to be deducted from such onshore mineral leasing receipts shall 
be reduced accordingly.
    ``(4) If the amount otherwise deductible under this subsection in 
any month from the portion of receipts to be distributed to a State 
exceeds the amount payable to the State during that month, any amount 
exceeding the amount payable shall be carried forward and deducted 
amounts payable to the State in subsequent months. If any amount 
remains to be carried forward at the end of the fiscal year, such 
amount shall not be deducted from any disbursements in any subsequent 
fiscal year.
    ``(5) All deductions to be made pursuant to this subsection shall 
be made in full during the fiscal year in which such deductions were 
incurred.
    ``(6) All amounts deducted under this subsection from monies 
otherwise payable to a State shall be credited to miscellaneous 
receipts in the Treasury.''.

SEC. 5302. CONFORMING AMENDMENTS.

    (a) Section 6 of the Mineral Leasing Act for Acquired Lands, as 
amended (30 U.S.C. 355), is amended by adding the following words 
``Subject to the provisions of 30 U.S.C. 191(b),'' at the beginning of 
the first sentence.
    (b) Section 5(a) of the Geothermal Steam Act, as amended (30 U.S.C. 
1019), is amended by adding the words ``Subject to the provisions of 30 
U.S.C. 191(b),'' at the beginning of that section.

          TITLE VI--COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS

SEC. 6001. NUCLEAR REGULATORY COMMISSION ANNUAL CHARGES.

    Section 6101(a)(3) of the Omnibus Budget Reconciliation Act of 1990 
(42 U.S.C. 2214(a)(3)) is amended by striking ``September 30, 1995'' 
and inserting ``September 30, 1998''.

SEC. 6002. CORPS OF ENGINEERS RECREATION USER FEES.

    (a) In General.--Section 210 of the Flood Control Act of 1968 (16 
U.S.C. 460d-3) is amended--
            (1) by inserting ``(a)'' before ``No entrance'';
            (2) by striking the second sentence; and
            (3) by adding at the end the following new subsection:
    ``(b)(1) Except as provided in paragraph (2), notwithstanding 
section 4(b) of the Land and Water Conservation Fund Act of 1965 (16 
U.S.C. 460l-6a(b)), the Secretary of the Army may charge fees for the 
use of developed recreation sites and facilities, including campsites, 
swimming beaches, and boat launching ramps.
    ``(2) The Secretary may not charge fees for the use or provision of 
drinking water, wayside exhibits, general purpose roads, overlook 
sites, toilet facilities, or general visitor information.
    ``(3) Fees collected under this subsection shall be deposited into 
the special account established in the Treasury of the United States 
for the Army Corps of Engineers under section 4(i) of the Land and 
Water Conservation Fund Act of 1965 (16 U.S.C. 460l-6a(i)).''.
    (b) Conforming Amendment.--Section 4(b) of the Land and Water 
Conservation Fund Act of 1965 (16 U.S.C. 460l-6a(b)) is amended by 
striking the second sentence.

  TITLE VII--FINANCE COMMITTEE RECONCILIATION PROVISIONS RELATING TO 
                 MEDICARE, MEDICAID, AND OTHER PROGRAMS

SEC. 7000. AMENDMENTS TO SOCIAL SECURITY ACT; REFERENCES; TABLE OF 
              CONTENTS.

    (a) Amendments to Social Security Act.--Except as otherwise 
specifically provided, whenever in this title an amendment is expressed 
in terms of an amendment to or repeal of a section or other provision, 
the reference shall be considered to be made to that section or other 
provision of the Social Security Act.
    (b) References to OBRA.--In this title, the terms ``OBRA-1986'', 
``OBRA-1987'', ``OBRA-1989'', and ``OBRA-1990'' refer to the Omnibus 
Budget Reconciliation Act of 1986 (Public Law 99-509), the Omnibus 
Budget Reconciliation Act of 1987 (Public Law 100-203), the Omnibus 
Budget Reconciliation Act of 1989 (Public Law 101-239), and the Omnibus 
Budget Reconciliation Act of 1990 (Public Law 101-508), respectively.
    (c) References to Omnibus Budget Reconciliation Act of 1993.--Any 
reference in this title (or in any amendment made by this title) to the 
Omnibus Budget Reconciliation Act of 1993 shall be deemed to be a 
reference to this title.
    (d) Table of Contents.--The table of contents of this title is as 
follows:

Sec. 7000. Amendments to Social Security Act; references; table of 
                            contents.

                          Subtitle A--Medicare

                 Part I--Provisions Relating to Part A

Sec. 7101. Payment updates for inpatient hospital services. 
Sec. 7102. Loss of regional referral center status.
Sec. 7103. Medicare-dependent, small rural hospital payment extension.
Sec. 7104. Elimination of return on equity for proprietary skilled 
                            nursing facilities. 
Sec. 7105. Skilled nursing facility cost limits.

                 Part II--Provisions Relating to Part B

                    subpart a--physicians' services
Sec. 7201. Reduction in default update for conversion factor for 1994.
Sec. 7202. Reduction in performance standard rate of increase and 
                            increase in maximum reduction permitted in 
                            default update and classification of 
                            primary care services as a separate 
                            category of services.
Sec. 7203. Phased-in reduction in practice expense relative value units 
                            for certain services.
Sec. 7204. Limitation on payment for the anesthesia care team.
Sec. 7205. Separate payment for interpretation of electrocardiograms.
Sec. 7206. Payments for new physicians and practitioners.
Sec.subpart b--outpatient hospital services and ambulatory surgical 
                                services
Sec. 7221. Extension of 10 percent reduction in payments for capital-
                            related costs of outpatient hospital 
                            services.
Sec. 7222. Extension of reduction in payments for other costs of 
                            outpatient hospital services.
Sec. 7223. Reductisubpart c--durable medical equipments.
Sec. 7231. Revisions to payment rules for durable medical equipment.
Sec. 7232. Treatment of nebulizers and aspirators.
Sec. 7233. Payment for surgical dressings.
Sec. 7234. Payments forsubpart d--part b premium
Sec. 7251. Part B premsubpart e--other provisions
Sec. 7261. Payments for clinical diagnostic laboratory tests.

             Part III--Provisions Relating to Parts A and B

Sec. 7301. Payments for direct graduate medical education costs.
Sec. 7302. Revision of home health agency cost limits.
Sec. 7303. Medicare as secondary payer. 
Sec. 7304. Extension of self-referral ban to additional specified 
                            services.
Sec. 7305. Reduction in payment for erythropoietin.

                      Subtitle B--Medicaid Program

                   Part I--Program Savings Provisions

                      subpart a--repeal of mandate
Sec. 7401. Personal care services furnished outside the home as 
                subpart b--outpatient prescription drugs
Sec. 7411. Permitting prescription drug formularies under State plans.
Sec. 7412. Elimination of special exemption from prior authorization 
                            for new drugs.
Sesubpart c--restrictions on divestiture of assets and estate recovery
Sec. 7421. Medicaid estate recoveries.
Sec. 7422. Transfers of assets. 
subpart d--improvement in identification and collection of third party 
                                payments
Sec. 7431. Liability of third parties to pay for care and services.
Sec. 7432. Medical child support.
Sec. 7433. Offset of payment obligations relating to medical assistance 
                            against overpayments of State and Federal 
subpart e--assuring proper payments to disproportionate share hospitals
Sec. 7441. Assuring proper payments to disproportionate share 
               subpart f--anti-fraud and abuse provisions
Sec. 7451. Application of medicare rules limiting certain physician 
                            referrals.

                   Part II--Other Medicaid Provisions

Sec. 7501. Extension of demonstration project on the effect of allowing 
                            States to extend medicaid coverage to 
                            certain low-income families.

                  Subtitle C--Income Security Programs

Sec. 7601. Matching of State administrative costs.
Sec. 7602. State paternity establishment programs.
Sec. 7603. Fees for Federal administration of State supplementary 
                            payments.

                  Subtitle D--Miscellaneous Provisions

                        Part I--Trade Provisions

Sec. 7701. Extension of authority to levy customs user fees.
Sec. 7702. Extension of, and authorization of appropriations for, trade 
                            adjustment assistance program.

          Part II--Improved Access to Childhood Immunizations

Sec. 7801. Reimbursement to vaccine manufacturers.
Sec. 7802. State option to provide that certain payments under AFDC are 
                            conditioned on receipt of immunizations.

                    Part III--Disclosure Provisions

Sec. 7901. Disclosure of return information for administration of 
                            certain veterans programs.
Sec. 7902. Disclosure of return information to carry out income 
                            contingent repayment of student loans.
Sec. 7903. Use of return information for income verification under 
                            certain housing assistance programs.
Sec. 7904. Use of return information for health coverage clearinghouse.

                       Part IV--Other Provisions

Sec. 7950. Disallowance of interest on certain overpayments of tax.
Sec. 7951. Fees for applications for alcohol labeling and formula 
                            reviews.
Sec. 7952. Use of Harbor Maintenance Trust Fund amounts for 
                            administrative expenses.
Sec. 7953. Increase in presidential election campaign fund check-off.
Sec. 7954. Increase in public debt limit.

                          Subtitle A--Medicare

                 PART I--PROVISIONS RELATING TO PART A

SEC. 7101. PAYMENT UPDATES FOR INPATIENT HOSPITAL SERVICES.

    (a) Reduction.--
            (1) PPS hospitals.--
                    (A) In general.--Section 1886(b)(3)(B)(i) (42 
                U.S.C. 1395ww(b)(3)(B)(i)) is amended--
                            (i) in the matter preceding subclause (I), 
                        by striking ``fiscal year'' and inserting 
                        ``particular time period'',
                            (ii) in subclause (VIII), by inserting 
                        ``and the 3 succeeding months'' after ``fiscal 
                        year 1993'',
                            (iii) in subclause (IX)--
                                    (I) by striking ``fiscal year'',
                                    (II) by inserting ``minus 2.18 
                                percentage points'' after ``market 
                                basket percentage increase'' the first 
                                place it appears, and
                                    (III) by striking ``plus 1.5 
                                percentage points'' and inserting 
                                ``minus .68 percentage point'',
                            (iv) in subclause (X)--
                                    (I) by striking ``fiscal year'',
                                    (II) by inserting ``minus 2.27 
                                percentage points'' after ``market 
                                basket percentage increase'', and
                                    (III) by striking ``and'' at the 
                                end,
                            (v) in subclause (XI)--
                                    (I) by striking ``for fiscal year 
                                1996 and each subsequent fiscal year'' 
                                and inserting ``for 1996'',
                                    (II) by inserting ``minus 2.0 
                                percentage points'' after ``market 
                                basket percentage increase'', and
                                    (III) by striking the period and 
                                inserting a comma, and
                            (vi) by adding at the end the following new 
                        subclauses:
            ``(XII) for 1997, the market basket percentage increase 
        minus 1.0 percentage point for hospitals in all areas, and
            ``(XIII) for 1998 and each subsequent year, the market 
        basket percentage increase for hospitals in all areas.''.
                    (B) Adjustment of labor and non-labor portions of 
                standardized amounts.--Section 1886(d)(3)(A) (42 U.S.C. 
                1395ww(d)(3)(A)) is amended by adding at the end the 
                following new clause:
                    ``(vi) For discharges occurring on or after January 
                1, 1995, the Secretary shall adjust the ratio of the 
                labor portion to non-labor portion of each average 
                standardized amount to equal such ratio for the 
                national average standardized amount.''.
            (2) Other hospitals.--Section 1886(b)(3)(B)(ii) (42 U.S.C. 
        1395ww(b)(3)(B)(ii)) is amended--
                    (A) by striking ``, (C), (D),''
                    (B) by striking ``and'' at the end of subclause 
                (III),
                    (C) by striking subclause (IV) and inserting the 
                following new subclauses:
            ``(IV) fiscal years 1988 through 1993 and the 3 succeeding 
        months, is the market basket percentage increase,
            ``(V) 1994, is 75 percent of the difference between the 
        market basket percentage increase and 1.0 percentage point,
            ``(VI) 1995 through 1997, is the market basket percentage 
        increase minus 1.0 percentage points, and
            ``(VII) 1998 and each subsequent year, is the market basket 
        percentage increase.''.
            (3) Sole community and medicare-dependent, small rural 
        hospitals.--
                    (A) In general.--Section 1886(b)(3)(B) (42 U.S.C. 
                1395ww(b)(3)(B)) is amended by adding at the end the 
                following new clause:
    ``(iv) For purposes of subparagraphs (C) and (D), the applicable 
percentage increase for discharges occurring during--
            ``(I) cost reporting periods beginning in fiscal year 1986 
        through fiscal year 1993 and the 3 succeeding months, is the 
        increase specified in clause (ii),
            ``(II) for 1994, is 75 percent of the difference between 
        the market basket percentage increase and 2.0 percentage 
        points,
            ``(III) for 1995, is the market basket percentage increase, 
        minus 2.0 percentage points, and
            ``(IV) for 1996 and each subsequent year, is the increase 
        described in clause (i) for such year.
For purposes of subclause (I), the annual update applied for a cost 
reporting period beginning during calendar year 1993 is adjusted to 
reflect only the time period occurring from the beginning of the 
hospital's cost reporting period through December 31, 1993.''.
                    (B) Target amount adjustment.--
                            (i) Sole community hospital.--Section 
                        1886(b)(3)(C) (42 U.S.C. 1395ww(b)(3)(C)) is 
                        amended--
                                    (I) in clause (i)(II), by striking 
                                ``or'',
                                    (II) in clause (ii)--
                                            (aa) by inserting ``or 
                                        portion of a cost reporting 
                                        period occurring before 
                                        December 31, 1993,'' before 
                                        ``the target amount'',
                                            (bb) by striking 
                                        ``subparagraph (B)(ii)'' and 
                                        inserting ``subparagraph 
                                        (B)(iv)'', and
                                            (cc) by striking the period 
                                        at the end and inserting a 
                                        comma, and
                                            (dd) by adding at the end 
                                        the following new clauses:
            ``(iii) with respect to discharges occurring in 1994, the 
        target amount for the cost reporting period beginning in 1993 
        increased by the applicable percentage increase under 
        subparagraph (B)(iv), or
            ``(iv) with respect to discharges occurring in 1995 and 
        each subsequent year, the target amount for the preceding year 
        increased by the applicable percentage increase under 
        subparagraph (B)(iv).''.
                            (ii) Medicare-dependent, small rural 
                        hospital.--Section 1886(b)(3)(D) (42 U.S.C. 
                        1395ww(b)(3)(D)) is amended--
                                    (I) in clause (i)(II), by striking 
                                ``or'',
                                    (II) in clause (ii)--
                                            (aa) by inserting ``or 
                                        portion of a cost reporting 
                                        period occurring before 
                                        December 31, 1993,'' before 
                                        ``the target amount'',
                                            (bb) by striking 
                                        ``subparagraph (B)(ii)'' and 
                                        inserting ``subparagraph 
                                        (B)(iv)'', and
                                            (cc) by striking the period 
                                        at the end and inserting ``, 
                                        or'' and
                                            (dd) by adding at the end 
                                        the following new clause:
            ``(iii) with respect to discharges occurring in 1994, the 
        target amount for the cost reporting period beginning in 1993 
        increased by the applicable percentage increase under 
        subparagraph (B)(iv).''.
            (4) Delay in increase in disproportionate share payments 
        for certain urban hospitals.--Section 1886(d)(5)(F)(vii)(II) 
        (42 U.S.C. 1395ww(d)(5)(F)(vii)(II)) is amended--
                    (A) in subdivision (b), by striking ``September 30, 
                1993'' and inserting ``December 31, 1993'', and
                    (B) in subdivision (c), by striking ``October 1, 
                1993'' and inserting ``January 1, 1994''.
            (5) Regional floor extended.--Section 1886(d)(1)(A) (42 
        U.S.C. 1395ww(d)(1)(A)) is amended--
                            (i) in clause (ii), by striking ``or'' at 
                        the end;
                            (ii) in clause (iii), by striking 
                        ``September 30, 1993, '' and inserting 
                        ``December 31, 1993''; and
                            (iii) by adding at the end the following 
                        new clause:
            ``(iv) beginning on and after January 1, 1994, is equal to 
        the national adjusted DRG prospective payment rate determined 
        under paragraph (3) for such discharges.''.
    (b) Conforming Amendments.--
            (1) Section 1886(b)(3)(B)(iii) (42 U.S.C. 
        1395ww(b)(3)(B)(iii)) is amended--
                    (A) by inserting ``beginning in'' after ``cost 
                reporting periods'',
                    (B) by striking ``fiscal year'' the first place it 
                appears and inserting ``particular time period'',
                    (C) by striking ``or fiscal year'' the first and 
                second place it appears, and
                    (D) by striking ``cost reporting period or fiscal 
                year'' and inserting ``period''.
            (2) The first sentence in the matter in section 1886(d)(3) 
        (42 U.S.C. 1395ww(d)(3)) preceding subparagraph (A) is amended 
        by inserting ``or calendar'' after ``fiscal'' the first place 
        it appears.
            (3) Section 1886(d)(3)(A)(ii) (42 U.S.C. 
        1395ww(d)(3)(A)(ii)) is amended--
                    (A) by striking ``1994,'' and inserting ``1992, in 
                the 15-month period beginning on October 1, 1992, and 
                in 1994,'', and
                    (B) by striking ``fiscal year'' the second and 
                third place it appears and inserting ``time period''.
            (4) Section 1886(d)(3)(A)(iii) (42 U.S.C. 
        1395ww(d)(3)(A)(iii)) is amended by striking ``the fiscal year 
        beginning on October 1, 1994'' and inserting ``1995''.
            (5) Section 1886(d)(3)(A)(iv) (42 U.S.C. 
        1395ww(d)(3)(A)(iv)) is amended--
                    (A) by striking ``fiscal year beginning on or after 
                October 1, 1995'' and inserting ``year beginning on or 
                after January 1, 1996'',
                    (B) by striking ``and within each region'', and
                    (C) by striking ``fiscal'' each place it appears.
            (6) Section 1886(d)(3)(D) (42 U.S.C. 1395ww(d)(3)(D)) is 
        amended--
                    (A) by inserting ``or calendar'' after ``fiscal'' 
                each place it appears, and
                    (B) by inserting ``for each fiscal year through 
                1993'' after ``and shall establish''.
            (7) Section 1886(d)(3)(E) (42 U.S.C. 1395ww(d)(3)(E)) is 
        amended--
                    (A) in the second sentence, by striking ``October 
                1, 1993'' and inserting ``January 1, 1994'', and
                    (B) in the last sentence, by inserting ``or 
                calendar'' after ``fiscal'' the first and last place it 
                appears.
            (8)(A) Section 1886(d)(4)(C)(iii) (42 U.S.C. 
        1395ww(d)(4)(C)(iii)) is amended--
                    (i) by inserting ``or calendar'' after ``fiscal'' 
                the first place it appears, and
                    (ii) by deleting ``fiscal'' the third place it 
                appears.
            (B) The requirements of paragraphs (3)(E) and (4)(C)(iii) 
        of section 1886(d) of the Social Security Act (42 U.S.C. 
        1395ww(d)(4)(C)(iii)) shall be applied on a 15-month basis for 
        the period beginning on October 1, 1992, and ending on December 
        31, 1993.
            (9) Section 1886(d)(4)(E) is (42 U.S.C. 1395ww(d)(4)(E)) is 
        amended by striking ``October 1, 1993'' and inserting ``January 
        1, 1994''.
            (10)(A) Section 1886(d)(5)(A)(iv) (42 U.S.C. 
        1395ww(d)(5)(A)(iv)) is amended by inserting ``or calendar'' 
        after ``fiscal''.
            (B) The requirement of section 1886(d)(5)(A)(iv) of the 
        Social Security Act (42 U.S.C. 1395ww(d)(5)(A)(iv)) shall be 
        applied on a 15-month basis for the period beginning on October 
        1, 1992, and ending on December 31, 1993.
            (11) Section 1886(d)(5)(B)(i) (42 U.S.C. 
        1395ww(d)(5)(B)(i)) is amended by striking ``or, if applicable, 
        the amount determined under paragraph (1)(A)(iii)'' and 
        inserting ``or, the amount determined under paragraphs 
        (1)(A)(iii) or (1)(A)(iv), as applicable''.
            (12) Section 1886(d)(5)(E)(ii) (42 U.S.C. 
        1395ww(d)(5)(E)(ii)) is amended by inserting ``or calendar'' 
        after ``fiscal''.
            (13) Section 1886(d)(6) (42 U.S.C. 1395ww(d)(5)(6)) is 
        amended by striking ``the September 1 before each fiscal year 
        (beginning with fiscal year 1984)'' and inserting ``December 1 
        each year''.
            (14) The matter in section 1886(d)(9)(A) (42 U.S.C. 
        1395ww(d)(9)(A)) preceding clause (i) is amended by striking 
        ``fiscal year'' and inserting ``particular time period''.
            (15) Section 1886(d)(9)(C)(i) (42 U.S.C. 
        1395ww(d)(9)(C)(i)) is amended--
                    (A) by striking ``fiscal year'' the first place it 
                appears and inserting ``time period'', and
                    (B) by striking ``fiscal years'' and inserting 
                ``time periods''.
            (16) Subparagraphs (A) and (B) of section 1886(e)(3) (42 
        U.S.C. 1395ww(e)(3)) are each amended by striking ``that fiscal 
        year'' and inserting ``the coming fiscal or calendar year''.
            (17) The first sentence of section 1886(e)(4)(A) (42 U.S.C. 
        1395ww(e)(4)(A)) is amended by inserting ``or calendar'' after 
        ``fiscal'' the first and last place it appears.
            (18) Section 1886(e)(4)(B) (42 U.S.C. 1395ww(e)(4)(B)) is 
        amended by inserting ``or calendar'' after ``fiscal''.
            (19) Section 1886(e)(5)(A) (42 U.S.C. 1395ww(e)(5)(A)) is 
        amended by striking ``that fiscal year'' and inserting ``the 
        coming fiscal or calendar year''.
            (20) The second and third sentences of section 1886(e)(5) 
        (42 U.S.C. 1395ww(e)(5)) are each amended by inserting ``or 
        calendar'' after ``fiscal'' each place it appears.

SEC. 7102. LOSS OF REGIONAL REFERRAL CENTER STATUS.

    (a) Continuation of Other Urban Payment Rate Through Calendar Year 
1994.--Effective on the date of the enactment of this Act, any hospital 
that was classified as a regional referral center under section 
1886(d)(5)(C) of the Social Security Act as of September 30, 1992, 
shall continue to be paid under this subsection the standardized amount 
for hospitals located in other urban areas for discharges occurring 
before the earlier of--
            (1) January 1, 1995, or
            (2) the reclassification of such hospital as an urban 
        hospital under section 1886(d)(10)(C) of such Act.
    (b) Permitting Hospitals To Decline Reclassification.--If any 
hospital fails to qualify as a rural referral center under section 
1886(d)(5)(C) of the Social Security Act as a result of a decision by 
the Medicare Geographic Classification Review Board under section 
1886(d)(10) of such Act to reclassify the hospital as being located in 
an urban area for fiscal year 1993 or fiscal year 1994, the Secretary 
of Health and Human Services shall--
            (1) notify such hospital of such failure to qualify,
            (2) provide an opportunity for such hospital to decline 
        such reclassification, and
            (3) if the hospital declines such reclassification, 
        administer the Social Security Act (other than section 
        1886(d)(8)(D)) for such fiscal year as if the decision by the 
        Review Board had not occurred.
    (c) Requiring Lump-Sum Retroactive Payment for Hospitals Losing 
Classification.--
            (1) In general.--In the case of any regional referral 
        center described in subsection (a), the Secretary of Health and 
        Human Services shall make a lump-sum payment to the center 
        equal to the difference between--
                    (A) the aggregate payment made to the center under 
                section 1886 of the Social Security Act (excluding 
                outlier payments under subsection (d)(5)(A) of such 
                section) during the period of applicability described 
                in paragraph (2), and
                    (B) the aggregate payment that would have been made 
                to the center under such section if, during the period 
                of applicability, the center had been paid as if 
                subsection (a) of this section had been in effect.
            (2) Period of applicability.--In paragraph (1), the 
        ``period of applicability'' is the period that begins on 
        October 1, 1992, and ends on the date of the enactment of this 
        Act.

SEC. 7103. MEDICARE-DEPENDENT, SMALL RURAL HOSPITAL PAYMENT EXTENSION.

    (a) Extension of Additional Payments.--
            (1) In general.--Section 1886(d)(5)(G) (42 U.S.C. 
        1395ww(d)(5)(G)) is amended--
                    (A) in clause (i)--
                            (i) by inserting ``(or portion thereof)'' 
                        after ``cost reporting period'' in the matter 
                        preceding subclause (I), and
                            (ii) by striking ``March 31, 1993,'' and 
                        all that follows and inserting: ``January 1, 
                        1995, in the case of a subsection (d) hospital 
                        which is a medicare-dependent, small rural 
                        hospital, payment under paragraph (1)(A) shall 
                        be equal to the sum of the amount determined 
                        under clause (ii) and the amount determined 
                        under clause (iii) or (iv) of paragraph 
                        (1)(A).'';
                    (B) by redesignating clauses (ii) and (iii) as 
                clauses (iii) and (iv); and
                    (C) by inserting after clause (i) the following new 
                clause:
    ``(ii) The amount determined under this clause is--
            ``(I) for discharges occurring during the first 3 12-month 
        cost reporting periods that begin on or after April 1, 1990, 
        the amount by which the hospital's target amount for the cost 
        reporting period (as defined in subsection (b)(3)(D)) exceeds 
        the amount determined under clause (iii) or (iv) paragraph 
        (1)(A); and
            ``(II) for discharges occurring during any subsequent cost 
        reporting period (or portion thereof), 50 percent of the amount 
        by which the hospital's target amount for the cost reporting 
        period (as defined in subsection (b)(3)(D)) exceeds the amount 
        determined under clause (iii) or (iv) of paragraph (1)(A).''.
            (2) Effective date.--The amendments made by paragraph (1) 
        shall be effective as if included in the amendment made by 
        section 6003(f) of OBRA-1989.
    (b) Permitting Hospitals To Decline Reclassification.--If any 
hospital fails to qualify as a medicare-dependent, small rural hospital 
under section 1886(d)(5)(G)(i) of the Social Security Act as a result 
of a decision by the Medicare Geographic Classification Review Board 
under section 1886(d)(10) of such Act to reclassify the hospital as 
being located in an urban area for fiscal year 1993 or fiscal year 1994 
the Secretary of Health and Human Services shall--
            (1) notify such hospital of such failure to qualify,
            (2) provide an opportunity for such hospital to decline 
        such reclassification, and
            (3) if the hospital declines such reclassification, 
        administer the Social Security Act (other than section 
        1886(d)(8)(D)) for such fiscal year as if the decision by the 
        Review Board had not occurred.
    (c) Requiring Lump-Sum Retroactive Payment.--
            (1) In general.--In the case of a hospital treated as a 
        medicare-dependent, small rural hospital under section 
        1886(d)(5)(G) of the Social Security Act, the Secretary of 
        Health and Human Services shall make a lump-sum payment to the 
        hospital equal to the difference between--
                    (A) the aggregate payment made to the hospital 
                under section 1886 of such Act (excluding outlier 
                payments under subsection (d)(5)(A) of such section) 
                during the period of applicability described in 
                paragraph (2), and
                    (B) the aggregate payment that would have been made 
                to the hospital under such section if, during the 
                period of applicability, section 1886(d)(5)(G) of such 
                Act had been applied as if--
                            (i) the reference in clause (i) to ``March 
                        31, 1993,'' had been deemed a reference to 
                        ``January 1, 1995,''; and
                            (ii) the amendments made by subsection (a) 
                        had been in effect.
            (2) Period of applicability.--In paragraph (1), the 
        ``period of applicability'' is, with respect to a hospital, the 
        period that begins on the first day of the hospital's first 12-
        month cost reporting period that begins after April 1, 1992, 
        and ends on the date of the enactment of this Act.

SEC. 7104. ELIMINATION OF RETURN ON EQUITY FOR PROPRIETARY SKILLED 
              NURSING FACILITIES.

    (a) Repeal of Requirement for Return on Equity.--(1) Section 
1861(v)(1)(B) (42 U.S.C. 1395x(v)(1)(B)) is amended to read as follows:
    ``(B) In the case of extended care services, the regulations under 
subparagraph (A) shall not include provision for specific recognition 
of a return on equity capital.''.
    (2) Section 1878(f)(2) (42 U.S.C. 1395oo(f)(2)) is amended by 
striking ``the rate of return on equity capital established by 
regulation pursuant to section 1861(v)(1)(B) and in effect at the 
time'' and inserting ``the average of the rates of interest on 
obligations issued for purchase by the Federal Hospital Insurance Trust 
Fund for each of the months any part of which is included in the cost 
reporting period in which''.
    (3) Section 1881(b)(2)(C) (42 U.S.C. 1395rr(b)(2)(C)) is amended by 
striking all that follows ``capital'' up to the period.
    (b) Effective Date.--The amendments made by subsection (a) apply to 
portions of cost reporting periods occurring on or after October 1, 
1993.

SEC. 7105. SKILLED NURSING FACILITY COST LIMITS.

    (a) Skilled Nursing Facility Cost Limits.--
            (1) In general.--Section 1888(a) (42 U.S.C. 1395yy(a)) is 
        amended by striking ``112 percent of the mean'' and inserting 
        ``110 percent of the median'' each place it appears.
            (2) Effective date.--The amendments made by paragraph (1) 
        shall apply to cost reporting periods beginning on or after 
        October 1, 1993.
    (b) Skilled Nursing Facility Wage Index.--Not later than 1 year 
after the date of the enactment of this Act, the Secretary of Health 
and Human Services shall begin to collect data on employee compensation 
and paid hours of employment in skilled nursing facilities for the 
purpose of constructing a skilled nursing facility wage index 
adjustment to the routine service cost limits required under section 
1888(a) of the Social Security Act.
    (c) ProPAC Report.--The Prospective Payment Assessment Commission 
shall, by March 31, 1994, study and report to the Congress on the 
impact of applying the routine per diem cost limits for skilled nursing 
facilities on a regional basis.

                 PART II--PROVISIONS RELATING TO PART B

                    Subpart A--Physicians' Services

SEC. 7201. REDUCTION IN DEFAULT UPDATE FOR CONVERSION FACTOR FOR 1994.

    Section 1848(d)(3)(A) (42 U.S.C. 1395w-4(d)(3)(A)) is amended--
            (1) in clause (i), by striking ``clause (iii)'' and 
        inserting ``clauses (iii) and (iv)'', and
            (2) by adding at the end the following new clause:
                            ``(iv) Adjustment in percentage increase 
                        for 1994.--In applying clause (i) for services 
                        (other than primary care services) furnished in 
                        1994, the percentage increase in the 
                        appropriate update index shall be reduced by--
                                    ``(I) 8 percentage points for 
                                surgical services (as defined for 
                                purposes of subsection (j)(1)), and
                                    ``(II) 4.4 percentage points for 
                                other services.''.

SEC. 7202. REDUCTION IN PERFORMANCE STANDARD RATE OF INCREASE AND 
              INCREASE IN MAXIMUM REDUCTION PERMITTED IN DEFAULT UPDATE 
              AND CLASSIFICATION OF PRIMARY CARE SERVICES AS A SEPARATE 
              CATEGORY OF SERVICES.

    (a) Reduction in Performance Standard Factor.--Section 
1848(f)(2)(B) (42 U.S.C. 1395w-4(f)(2)(B)) is amended to read as 
follows:
                    ``(B) Performance standard factor.--For purposes of 
                subparagraph (A)--
                            ``(i) In general.--Except as provided in 
                        clause (ii), the performance standard factor--
                                    ``(I) for 1993 is 2 percentage 
                                points,
                                    ``(II) for 1994 is 3\1/2\ 
                                percentage points, and
                                    ``(III) for each succeeding year is 
                                4 percentage points.
                            ``(ii) Primary care services.--The 
                        performance standard factor for primary care 
                        services (as defined in section 1842(i)(4)) is 
                        0 percentage points.''.
    (b) Increase in Maximum Reduction Permitted in Default Update.--
Section 1848(d)(3)(B)(ii) (42 U.S.C. 1395w-4(d)(3)(B)(ii)) is amended--
            (1) in subclause (II), by striking ``or 1995'', and
            (2) in subclause (III), by striking ``3'' and inserting 
        ``5''.
    (c) Classification of Primary Care Services as Separate Category of 
Services.--
            (1) In general.--Section 1848(j)(1) (42 U.S.C. 1395w-
        4(j)(1)) is amended by inserting ``, primary care services (as 
        defined in section 1842(i)(4)),'' after ``Secretary)''.
            (2) Effective date.--The amendment made by paragraph (1) 
        shall apply--
                    (A) to volume performance standard rates of 
                increase established under section 1848(f) of the 
                Social Security Act for fiscal years beginning on or 
                after October 1, 1993, and
                    (B) to updates in the conversion factors for 
                physicians' services established under section 1848(d) 
                of such Act for physicians' services to be furnished in 
                calendar years beginning after 1995.

SEC. 7203. PHASED-IN REDUCTION IN PRACTICE EXPENSE RELATIVE VALUE UNITS 
              FOR CERTAIN SERVICES.

    (a) In General.--Section 1848(c)(2) (42 U.S.C. 1395w-4(c)(2)) is 
amended by adding at the end the following new subparagraph:
                    ``(E) Reduction in practice expense relative value 
                units for certain services.--
                            ``(i) In general.--Subject to clause (ii), 
                        the Secretary shall reduce the practice expense 
                        relative value units applied to services 
                        described in clause (iii) furnished in--
                                    ``(I) 1994, by 25 percent of the 
                                number by which the number of practice 
                                expense relative value units 
                                (determined for 1994 without regard to 
                                this subparagraph) exceeds the number 
                                of work relative value units determined 
                                for 1994,
                                    ``(II) 1995, by an additional 25 
                                percent of such excess, and
                                    ``(III) 1996, by an additional 25 
                                percent of such excess.
                            ``(ii) Floor on reductions.--The practice 
                        expense relative value units for a physician's 
                        service shall not be reduced under this 
                        subparagraph to a number less than 110 percent 
                        of the number of work relative value units.
                            ``(iii) Services covered.--For purposes of 
                        clause (i), the services described in this 
                        clause are physicians' services that are not 
                        described in clause (iv) and for which--
                                    ``(I) there are work relative value 
                                units, and
                                    ``(II) the number of practice 
                                expense relative value units 
                                (determined for 1994) exceeds 110 
                                percent of the number of work relative 
                                value units (determined for such year).
                            ``(iv) Excluded services.--For purposes of 
                        clause (iii), the services described in this 
                        clause are services which the Secretary 
                        determines at least 75 percent of which are 
                        provided under this title in an office 
                        setting.''.
    (b) Development of Resource-Based Methodology for Practice 
Expenses.--
            (1) The Secretary of Health and Human Services shall 
        develop a methodology for implementing in 1997 a resource-based 
        system for determining practice expense relative value units 
        for each physician's service.
            (2) The Secretary shall transmit a report by June 30, 1996, 
        on the methodology developed under paragraph (1) to the 
        Committee on Ways and Means and the Committee on Energy and 
        Commerce of the House of Representatives and the Committee on 
        Finance of the Senate. The report shall include a presentation 
        of data utilized in developing the methodology and an 
        explanation of the methodology.

SEC. 7204. LIMITATION ON PAYMENT FOR THE ANESTHESIA CARE TEAM.

    (a) Limit on Payment to a Physician for Medical Direction.--
            (1) In general.--Section 1848(a) (42 U.S.C. 1395w-4(a)) is 
        amended by adding at the end the following new paragraph:
            ``(5) Special rule for medical direction.--
                    ``(A) In general.--With respect to physicians' 
                services furnished on or after January 1, 1994, and 
                consisting of medical direction of 2, 3, or 4 
                concurrent anesthesia cases, the fee schedule amount to 
                be applied shall not exceed one-half of the amount 
                described in subparagraph (B).
                    ``(B) Amount.--The amount described in this 
                subparagraph, for a physician's medical direction of 
                the performance of anesthesia services, is the 
                following percentage of the fee schedule amount 
                otherwise applicable under this section if the 
                anesthesia services were personally performed by the 
                physician alone:
                            ``(i) For services furnished during 1994, 
                        120 percent.
                            ``(ii) For services furnished during 1995, 
                        115 percent.
                            ``(iii) For services furnished during 1996, 
                        110 percent.
                            ``(iv) For services furnished during 1997, 
                        105 percent.
                            ``(v) For services furnished after 1997, 
                        100 percent.''.
            (2) Elimination of reduction for medical direction of 
        multiple nurse anesthetists.--Section 1842(b) (42 U.S.C. 
        1395u(b)) is amended by striking paragraph (13).
    (b) Payment to a Certified Registered Nurse Anesthetist for 
Medically Directed Services.--Subparagraph (B) of section 1833(l)(4) 
(42 U.S.C. 1395l(l)(4)) is amended--
            (1) in clause (i), by inserting ``and before January 1, 
        1994,'' after ``1991,'';
            (2) in clause (ii)--
                    (A) by adding ``and'' at the end of subclause (II),
                    (B) by striking the comma at the end of subclause 
                (III) and inserting a period, and
                    (C) by striking subclauses (IV) through (VII); and
            (3) by adding at the end the following new clause:
    ``(iii) In the case of services of a certified registered nurse 
anesthetist who is medically directed or medically supervised by a 
physician which are furnished on or after January 1, 1994, the fee 
schedule amount shall be 50 percent of the amount described in section 
1848(a)(5)(B) with respect to the physician.''.

SEC. 7205. SEPARATE PAYMENT FOR INTERPRETATION OF ELECTROCARDIOGRAMS.

    (a) In General.--Paragraph (3) of section 1848(b) (42 U.S.C. 1395w-
4(b)) is amended to read as follows:
            ``(3) Treatment of interpretation of electrocardiograms.--
        The Secretary--
                    ``(A) shall make separate payment under this 
                section for the interpretation of electrocardiograms 
                performed or ordered to be performed as part of or in 
                conjunction with a visit to or a consultation with a 
                physician, and
                    ``(B) shall adjust the relative values established 
                for visits and consultations under subsection (c) so as 
                not to include relative value units for interpretations 
                of electrocardiograms in the relative value for visits 
                and consultations.''.
    (b) Assuring Budget Neutrality.--Section 1848(c)(2) (42 U.S.C. 
1395w-4(c)(2)), as amended by section 7203(a), is further amended by 
adding at the end the following new subparagraph:
                    ``(F) Budget neutrality adjustments.--The 
                Secretary--
                            ``(i) shall reduce the relative values for 
                        all services (other than anesthesia services) 
                        established under this paragraph (and, in the 
                        case of anesthesia services, the conversion 
                        factor established by the Secretary for such 
                        services) by such percentage as the Secretary 
                        determines to be necessary so that, beginning 
                        in 1996, the amendment made by section 7205(a) 
                        of the Omnibus Budget Reconciliation Act of 
                        1993 would not result in expenditures under 
                        this section that exceed the amount of such 
                        expenditures that would have been made if such 
                        amendment had not been made, and
                            ``(ii) shall reduce the amounts determined 
                        under subsection (a)(2)(B)(ii)(I) by such 
                        percentage as the Secretary determines to be 
                        required to assure that, taking into account 
                        the reductions made under clause (i), the 
                        amendment made by section 7205(a) of the 
                        Omnibus Budget Reconciliation Act of 1993 would 
                        not result in expenditures under this section 
                        in 1994 that exceed the amount of such 
                        expenditures that would have been made if such 
                        amendment had not been made.''.
    (c) Conforming Amendments.--Section 1848 (42 U.S.C. 1395w-4) is 
amended--
            (1) in subsection (a)(2)(B)(ii)(I), by inserting ``and as 
        adjusted under subsection (c)(2)(F)(ii)'' after ``for 1994'';
            (2) in subsection (c)(2)(A)(i), by adding at the end the 
        following: ``Such relative values are subject to adjustment 
        under subparagraph (F)(i).''; and
            (3) in subsection (i)(1)(B), by adding at the end 
        ``including adjustments under subsection (c)(2)(F),''.
    (d) Effective Date.--The amendments made by this section shall 
apply to services furnished on or after January 1, 1994.

SEC. 7206. PAYMENTS FOR NEW PHYSICIANS AND PRACTITIONERS.

    (a) Equal Treatment of New Physicians and Practitioners.--(1) 
Section 1848(a) (42 U.S.C. 1395w-4(a)), as amended by section 7204(a), 
is further amended by striking paragraph (4) and by redesignating 
paragraph (5) as paragraph (4).
    (2) Section 1842(b)(4) (42 U.S.C. 1395u(b)(4)) is amended by 
striking subparagraph (F).
    (b) Budget Neutrality Adjustment.--Notwithstanding any other 
provision of law, the Secretary of Health and Human Services shall 
reduce the following values and amounts for 1994 (to be applied for 
that year and subsequent years) by such uniform percentage as the 
Secretary determines to be required to assure that the amendments made 
by subsection (a) will not result in expenditures under part B of title 
XVIII of the Social Security Act in 1994 that exceed the amount of such 
expenditures that would have been made if such amendments had not been 
made:
            (1) The relative values established under section 1848(c) 
        of such Act for services (other than anesthesia services) and, 
        in the case of anesthesia services, the conversion factor 
        established under section 1848 of such Act for such services.
            (2) The amounts determined under section 
        1848(a)(2)(B)(ii)(I) of such Act.
            (3) The prevailing charges or fee schedule amounts to be 
        applied under such part for services of a health care 
        practitioner (as defined in section 1842(b)(4)(F)(ii)(I) of 
        such Act, as in effect before the date of the enactment of this 
        Act).
    (c) Conforming Amendments.--Section 1848 (42 U.S.C. 1395w-4), as 
amended by section 7205(c), is amended--
            (1) in subsection (a)(2)(B)(ii)(I), by inserting ``and 
        under section 7206(b) of the Omnibus Budget Reconciliation Act 
        of 1993'' after ``subsection (c)(2)(F)(ii)'';
            (2) in subsection (c)(2)(A)(i), by inserting ``and section 
        7206(b) of the Omnibus Budget Reconciliation Act of 1993'' 
        after ``under subparagraph (F)(i)''; and
            (3) in subsection (i)(1)(B), by inserting ``and section 
        7206(b) of the Omnibus Budget Reconciliation Act of 1993'' 
        after ``under subsection (c)(2)(F)''.
    (d) Effective Date.--The amendments made by subsection (a) shall 
apply to services furnished on or after January 1, 1994.

SEC. 7207. EXTRA-BILLING LIMITS.

    (a) Enforcement and Uniform Application.--
            (1) Enforcement.--Paragraph (1) of section 1848(g) (42 
        U.S.C. 1395w-4(g)) is amended to read as follows:
            ``(1) Limitation on actual charges.--
                    ``(A) In general.--In the case of a 
                nonparticipating physician or nonparticipating supplier 
                or other person (as defined in section 1842(i)(2)) who 
                does not accept payment on an assignment-related basis 
                for a physician's service furnished with respect to an 
                individual enrolled under this part, the following 
                rules apply:
                            ``(i) Application of limiting charge.--No 
                        person may bill or collect an actual charge for 
                        the service in excess of the limiting charge 
                        described in paragraph (2) for such service.
                            ``(ii) No liability for excess charges.--No 
                        person is liable for payment of any amounts 
                        billed for the service in excess of such 
                        limiting charge.
                            ``(iii) Correction of excess charges.--If 
                        such a physician, supplier, or other person 
                        bills, but does not collect, an actual charge 
                        for a service in violation of clause (i), the 
                        physician, supplier, or other person shall 
                        reduce on a timely basis the actual charge 
                        billed for the service to an amount not to 
                        exceed the limiting charge for the service.
                            ``(iv) Refund of excess collections.--If 
                        such a physician, supplier, or other person 
                        collects an actual charge for a service in 
                        violation of clause (i), the physician, 
                        supplier, or other person shall provide on a 
                        timely basis a refund to the individual charged 
                        in the amount by which the amount collected 
                        exceeded the limiting charge for the service. 
                        The amount of such a refund shall be reduced to 
                        the extent the individual has an outstanding 
                        balance owed to the physician.
                    ``(B) Sanctions.--If a physician, supplier, or 
                other person--
                            ``(i) knowingly and willfully bills or 
                        collects for services in violation of 
                        subparagraph (A)(i) on a repeated basis, or
                            ``(ii) fails to comply with clause (iii) or 
                        (iv) of subparagraph (A) on a timely basis,
                the Secretary may apply sanctions against the 
                physician, supplier, or other person in accordance with 
                paragraph (2) of section 1842(j). In applying this 
                subparagraph, paragraph (4) of such section applies in 
                the same manner as such paragraph applies to such 
                section and any reference in such section to a 
                physician is deemed also to include a reference to a 
                supplier or other person under this subparagraph.
                    ``(C) Timely basis.--For purposes of this 
                paragraph, a reduction or refund under clauses (iii) 
                and (iv) of subparagraph (A) shall be treated as done 
                on a timely basis if the reduction or refund is made 
                not later than 30 days after the date the physician, 
                supplier, or other person is notified by the carrier 
                under this part of such violation and of the 
                requirements of subparagraph (A).''.
            (2) Uniform application of extra-billing limits to 
        physicians' services.--
                    (A) In general.--Section 1848(g)(2)(C) (42 U.S.C. 
                1395w-4(g)(2)(C)) is amended by inserting ``or for 
                nonparticipating suppliers or other persons'' after 
                ``nonparticipating physicians''.
                    (B) Conforming definition.--Section 1842(i)(2) (42 
                U.S.C. 1395u(i)(2)) is amended--
                            (i) by striking ``, and the term'' and 
                        inserting ``; the term'', and
                            (ii) by inserting before the period at the 
                        end the following: ``; and the term 
                        `nonparticipating supplier or other person' 
                        means a supplier or other person (excluding a 
                        provider of services) that is not a 
                        participating physician or supplier (as defined 
                        in subsection (h)(1))''.
            (3) Additional conforming amendments.--Section 1848 (42 
        U.S.C. 1395w-4) is amended--
                    (A) in subsection (a)(3)--
                            (i) by inserting ``and suppliers'' after 
                        ``physicians'' in the heading,
                            (ii) by inserting ``or a nonparticipating 
                        supplier or other person'' after 
                        ``nonparticipating physician'', and
                            (iii) by adding at the end the following: 
                        ``In the case of physicians' services 
                        (including services which the Secretary 
                        excludes pursuant to subsection (j)(3)) of a 
                        nonparticipating physician, supplier, or other 
                        person for which payment is made under this 
                        part on a basis other than the fee schedule 
                        amount, the payment shall be based on 95 
                        percent of the payment basis for such services 
                        furnished by a participating physician, 
                        supplier, or other person.'';
                    (B) in subsection (g)(1)(A), as amended by 
                subsection (a), in the matter before clause (i), by 
                inserting ``(including services which the Secretary 
                excludes pursuant to subsection (j)(3))'' after ``a 
                physician's service'';
                    (C) in subsection (g)(2)(D), by inserting ``(or, if 
                payment under this part is made on a basis other than 
                the fee schedule under this section, 95 percent of the 
                other payment basis)'' after ``subsection (a)'';
                    (D) in subsection (g)(3)(B)--
                            (i) by inserting after the first sentence 
                        the following: ``No person is liable for 
                        payment of any amounts billed for such a 
                        service in violation of the preceding 
                        sentence.'', and
                            (ii) in the last sentence, by striking 
                        ``previous sentence'' and inserting ``first 
                        sentence'';
                    (E) in subsection (h)--
                            (i) by inserting ``or nonparticipating 
                        supplier or other person furnishing physicians' 
                        services (as defined in section 1848(j)(3))'' 
                        after ``physician'' the first place it appears,
                            (ii) by inserting ``, supplier, or other 
                        person'' after ``physician'' the second place 
                        it appears, and
                            (iii) by inserting ``, suppliers, and other 
                        persons'' after ``physicians'' the second place 
                        it appears; and
                    (F) in subsection (j)(3), by inserting ``, except 
                for purposes of subsections (a)(3), (g), and (h),'' 
                after ``tests and''.
    (b) Clarification of Mandatory Assignment Rules for Certain 
Practitioners.--
            (1) In general.--Section 1842(b) (42 U.S.C. 1395u(b)) is 
        amended by adding at the end the following new paragraph:
    ``(19)(A) Payment for any service furnished by a practitioner 
described in subparagraph (C) and for which payment may be made under 
this part on a reasonable charge or fee schedule basis may only be made 
under this part on an assignment-related basis.
    ``(B) A practitioner described in subparagraph (C) or other person 
may not bill (or collect any amount from) the individual or another 
person for any service described in subparagraph (A), except for 
deductible and coinsurance amounts applicable under this part. No 
person is liable for payment of any amounts billed for such a service 
in violation of the previous sentence. If a practitioner or other 
person knowingly and willfully bills (or collects an amount) for such a 
service in violation of such sentence, the Secretary may apply 
sanctions against the practitioner or other person in the same manner 
as the Secretary may apply sanctions against a physician in accordance 
with subsection (j)(2) in the same manner as such section applies with 
respect to a physician. Paragraph (4) of subsection (j) shall apply in 
this subparagraph in the same manner as such paragraph applies to such 
section.
    ``(C) A practitioner described in this subparagraph is any of the 
following:
            ``(i) A physician assistant, nurse practitioner, or 
        clinical nurse specialist (as defined in section 1861(aa)(5)).
            ``(ii) A certified registered nurse anesthetist (as defined 
        in section 1861(bb)(2)).
            ``(iii) A certified nurse-midwife (as defined in section 
        1861(gg)(2)).
            ``(iv) A clinical social worker (as defined in section 
        1861(hh)(1)).
            ``(v) A clinical psychologist (as defined by the Secretary 
        for purposes of section 1861(ii)).
    ``(D) For purposes of this paragraph, a service furnished by a 
practitioner described in subparagraph (C) includes any services and 
supplies furnished as incident to the service as would otherwise be 
covered under this part if furnished by a physician or as incident to a 
physician's service.''.
            (2) Conforming amendments.--
                    (A) Section 1833 (42 U.S.C. 1395l) is amended--
                            (i) in subsection (l)(5), by striking 
                        subparagraph (B) and redesignating subparagraph 
                        (C) as subparagraph (B);
                            (ii) by striking subsection (p); and
                            (iii) in subsection (r), by striking 
                        paragraph (3) and redesignating paragraph (4) 
                        as paragraph (3).
                    (B) Section 1842(b)(12) (42 U.S.C. 1395u(b)(12)) is 
                amended by striking subparagraph (C).
    (c) Information on Extra-Billing Limits.--
            (1) Part of explanation of medicare benefits.--Section 
        1842(h)(7) (42 U.S.C. 1395u(h)(7)) is amended--
                    (A) by striking ``and'' at the end of subparagraph 
                (B),
                    (B) in subparagraph (C), by striking ``shall 
                include'',
                    (C) in subparagraph (C), by striking the period at 
                the end and inserting ``, and'', and
                    (D) by adding at the end the following new 
                subparagraph:
            ``(D) in the case of services for which the billed amount 
        exceeds the limiting charge imposed under section 1848(g), 
        information regarding such applicable limiting charge 
        (including information concerning the right to a refund under 
        section 1848(g)(1)(A)(iv)).''.
            (2) Determinations by carriers.--Subparagraph (G) of 
        section 1842(b)(3) (42 U.S.C. 1395u(b)(3)) is amended to read 
        as follows:
            ``(G) will, for a service that is furnished with respect to 
        an individual enrolled under this part, that is not paid on an 
        assignment-related basis, and that is subject to a limiting 
        charge under section 1848(g)--
                    ``(i) determine, prior to making payment, whether 
                the amount billed for such service exceeds the limiting 
                charge applicable under section 1848(g)(2);
                    ``(ii) notify the physician, supplier, or other 
                person periodically (but not less often than once every 
                30 days) of determinations that amounts billed exceeded 
                such applicable limiting charges; and
                    ``(iii) provide for prompt response to inquiries of 
                physicians, suppliers, and other persons concerning the 
                accuracy of such limiting charges for their 
                services;''.
    (d) Report on Charges in Excess of Limiting Charge.--Section 
1848(g)(6)(B) (42 U.S.C. 1395w-4(g)(6)(B)) is amended by inserting 
``the extent to which actual charges exceed limiting charges, the 
number and types of services involved, and the average amount of excess 
charges and'' after ``report to the Congress''.
    (e) Miscellaneous and Technical Amendments.--Section 1833 (42 
U.S.C. 1395l) is amended--
            (1) in subsection (a)(1)--
                    (A) by striking ``and'' before ``(N)'';
                    (B) with respect to the matter inserted by section 
                4155(b)(2)(B) of OBRA-1990--
                            (i) by striking ``(M)'' and inserting ``, 
                        and (O)''; and
                            (ii) by transferring and inserting it (as 
                        amended) immediately before the semicolon at 
                        the end;
                    (C) by striking ``and'' before ``(O)'', and
                    (D) by inserting before the semicolon at the end 
                the following: ``, and (P) with respect to services 
                described in clauses (i), (ii) and (iv) of section 
                1861(s)(2)(K), the amounts paid are subject to the 
                provisions of section 1842(b)(12)''; and
            (2) in subsection (h)(5)(D)--
                    (A) by striking ``paragraphs (2) and (3)'' and by 
                inserting ``paragraph (2)'', and
                    (B) by adding at the end the following: ``Paragraph 
                (4) of such section shall apply in this subparagraph in 
                the same manner as such paragraph applies to such 
                section.''.
    (f) Effective Dates.--
            (1) Enforcement and uniform application; miscellaneous and 
        technical amendments.--The amendments made by subsections (a) 
        and (e) shall apply to services furnished on or after the date 
        of the enactment of this Act; except that the amendments made 
        by subsection (a) shall not apply to services of a 
        nonparticipating supplier or other person furnished before 
        January 1, 1994.
            (2) Practitioners.--The amendments made by subsection (b) 
        shall apply to services furnished on or after January 1, 1994.
            (3) EOMBs.--The amendments made by subsection (c)(1) shall 
        apply to explanations of benefits provided on or after January 
        1, 1994.
            (4) Carrier determinations.--The amendments made by 
        subsection (c)(2) shall apply to contracts as of January 1, 
        1994.
            (5) Report.--The amendment made by subsection (d) shall 
        apply to reports for years beginning after 1993.

    Subpart B--Outpatient Hospital Services and Ambulatory Surgical 
                                Services

SEC. 7221. EXTENSION OF 10 PERCENT REDUCTION IN PAYMENTS FOR CAPITAL-
              RELATED COSTS OF OUTPATIENT HOSPITAL SERVICES.

    Section 1861(v)(1)(S)(ii)(I) (42 U.S.C. 1395x(v)(1)(S)(ii)(I)) is 
amended by striking ``fiscal year 1992, 1993, 1994, or 1995'' and 
inserting ``fiscal years 1992 through 1998''.

SEC. 7222. EXTENSION OF REDUCTION IN PAYMENTS FOR OTHER COSTS OF 
              OUTPATIENT HOSPITAL SERVICES.

    Section 1861(v)(1)(S)(ii)(II) (42 U.S.C. 1395x(v)(1)(S)(ii)(II)) is 
amended by striking ``, 1992, 1993, 1994, or 1995'' and inserting 
``through 1998''.

SEC. 7223. REDUCTION IN PAYMENTS FOR INTRAOCULAR LENSES.

    (a) Payment for Intraocular Lens.--Section 4151(c)(3) of OBRA-1990 
is amended--
            (1) by striking ``center'' and all that follows and 
        inserting ``center--
                    ``(A) on or after the date of the enactment of this 
                Act and on or before December 31, 1993, shall be equal 
                to $200; and
                    ``(B) on or after January 1, 1994, and on or before 
                December 31, 1998, shall be equal to $150.''; and
            (2) in the heading, by striking ``2-year freeze in 
        allowance'' and inserting ``Allowance''.
    (b) Conforming Amendments.--
            (1) Payment amounts for services furnished in ambulatory 
        surgical centers.--(A)(i) Section 1833(i)(2)(A)(i) (42 U.S.C. 
        1395l(i)(2)(A)(i)) is amended by striking the comma at the end 
        and inserting the following: ``, as determined in accordance 
        with a survey (based upon a representative sample of procedures 
        and facilities) taken not later than January 1, 1995, and every 
        5 years thereafter, of the actual audited costs incurred by 
        such centers in providing such services,''.
            (ii) The second sentence of section 1833(i)(1) (42 U.S.C. 
        1395l(i)(1)) is amended by striking the period and inserting 
        the following: ``, in consultation with appropriate trade and 
        professional organizations.''.
            (B) Section 4151(c)(3) of OBRA-1990, as amended in 
        subsection (a), is amended by striking ``for the insertion of 
        an intraocular lens'' and inserting ``for an intraocular lens 
        inserted''.
            (2) Adjustments to payment amounts for new technology 
        intraocular lenses.--(A) Notwithstanding section 4151(c)(3) of 
        OBRA-1990 (as amended by subsection (a)), the Secretary of 
        Health and Human Services (in this paragraph referred to as the 
        ``Secretary'') shall, not later than 1 year after the date of 
        the enactment of this Act, develop and implement a process 
        under which interested parties may request review by the 
        Secretary of the appropriateness of the reimbursement amount 
        provided under section 1833(i)(2)(A)(iii) of the Social 
        Security Act with respect to a class of new technology 
        intraocular lenses. For purposes of the preceding sentence, an 
        intraocular lens may not be treated as a new technology 
        intraocular lens unless it has been approved by the Food and 
        Drug Administration.
            (B) In determining whether to provide an adjustment of 
        payment with respect to a particular lens under subparagraph 
        (A), the Secretary shall take into account whether use of the 
        lens is likely to result in reduced risk of intraoperative or 
        postoperative complication or trauma, accelerated postoperative 
        recovery, reduced induced astigmatism, improved postoperative 
        visual acuity, more stable postoperative vision, or other 
        comparable clinical advantages.
            (C) The Secretary shall publish notice in the Federal 
        Register from time to time (but no less often than once each 
        year) of a list of the requests that the Secretary has received 
        for review under this subsection, and shall provide for a 30-
        day comment period on the lenses that are the subjects of the 
        requests contained in such notice. The Secretary shall publish 
        a notice of the determinations with respect to intraocular 
        lenses listed in the notice within 90 days after the close of 
        the comment period.
            (D) Any adjustment of a payment amount (or payment limit) 
        made under this paragraph shall become effective not later than 
        30 days after the date on which the notice with respect to the 
        adjustment is published under subparagraph (C).
            (3) Blend Amounts for Ambulatory Surgical Center 
        Payments.--
                    (A) In general.--Subclauses (I) and (II) of section 
                1833(i)(3)(B)(ii) (42 U.S.C. 1395l(i)(3)(B)(ii)) are 
                each amended--
                            (i) by striking ``for reporting'' and 
                        inserting ``for portions of cost reporting''; 
                        and
                            (ii) by striking ``and on or before'' and 
                        inserting ``and ending on or before''.
                    (B) Effective date.--The amendments made by 
                subparagraph (A) shall take effect as if included in 
                the enactment of OBRA-1990.

                  Subpart C--Durable Medical Equipment

SEC. 7231. REVISIONS TO PAYMENT RULES FOR DURABLE MEDICAL EQUIPMENT.

    (a) Basing National Payment Limits on Median of Local Payment 
Amounts.--
            (1) Inexpensive and routinely purchased items; items 
        requiring frequent and substantial servicing.--(A) Paragraphs 
        (2)(C)(i)(II) and (3)(C)(i)(II) of section 1834(a) (42 U.S.C. 
        1395m(a)) are each amended--
                    (i) by striking ``1992'' the first place it appears 
                and inserting ``1992, 1993, and 1994''; and
                    (ii) by striking ``1992'' the second place it 
                appears and inserting ``the year''.
            (B) Paragraphs (2)(C)(ii) and (3)(C)(ii) of section 1834(a) 
        (42 U.S.C. 1395m(a)) are each amended--
                    (i) by striking ``and'' at the end of subclause 
                (I);
                    (ii) by redesignating subclause (II) as (IV); and
                    (iii) by inserting after subclause (I) the 
                following new subclauses:
                                    ``(II) for 1992 and 1993, the 
                                amount determined under this clause for 
                                the preceding year increased by the 
                                covered item update for such subsequent 
                                year,
                                    ``(III) for 1994, the local payment 
                                amount determined under clause (i) for 
                                such item or device for that year, 
                                except that the national limited 
                                payment amount may not exceed 100 
                                percent of the median of all local 
                                payment amounts determined under such 
                                clause for such item for that year and 
                                may not be less than 85 percent of the 
                                median of all local payment amounts 
                                determined under such clause for such 
                                item or device for that year, and''.
            (2) Miscellaneous devices and items.--Section 1834(a)(8) 
        (42 U.S.C. 1395m(a)(8)) is amended--
                    (A) in subparagraph (A)(ii)(III), by striking 
                ``1992'' and inserting ``1992, 1993, and 1994''; and
                    (B) in subparagraph (B)--
                            (i) by striking ``and'' at the end of 
                        clause (i),
                            (ii) by redesignating clause (ii) as (iv), 
                        and
                            (iii) by inserting after clause (i) the 
                        following new clauses:
                            ``(ii) for 1992 and 1993, the amount 
                        determined under this subparagraph for the 
                        preceding year increased by the covered item 
                        update for such subsequent year;
                            ``(iii) for 1994, the local purchase price 
                        computed under subparagraph (A)(ii) for the 
                        item for the year, except that such national 
                        limited purchase price may not exceed 100 
                        percent of the median of all local purchase 
                        prices computed for the item under such 
                        subparagraph for the year and may not be less 
                        than 85 percent of the median of all local 
                        purchase prices computed under such 
                        subparagraph for the item for the year; and''.
            (3) Oxygen and oxygen equipment.--Section 1834(a)(9) (42 
        U.S.C. 1395m(a)(9)) is amended--
                    (A) in subparagraph (A)(ii)(II), by striking ``1991 
                and 1992'' and inserting ``1991, 1992, 1993, and 
                1994''; and
                    (B) in subparagraph (B)--
                            (i) by striking ``and'' at the end of 
                        clause (i),
                            (ii) by redesignating clause (ii) as (iv), 
                        and
                            (iii) by inserting after clause (i) the 
                        following new clauses:
                            ``(ii) for 1992 and 1993, the amount 
                        determined under this subparagraph for the 
                        preceding year increased by the covered item 
                        update for such subsequent year;
                            ``(iii) for 1994, the local monthly payment 
                        rate computed under subparagraph (A)(ii) for 
                        the item for the year, except that such 
                        national limited monthly payment rate may not 
                        exceed 100 percent of the median of all local 
                        monthly payment rates computed for the item 
                        under such subparagraph for the year and may 
                        not be less than 85 percent of the median of 
                        all local monthly payment rates computed for 
                        the item under such subparagraph for the year; 
                        and''.
    (b) Payment for Prosthetic Devices and Orthotics and Prosthetics.--
            (1) In general.--Section 1834(h)(2) (42 U.S.C. 1395m(h)(2)) 
        is amended--
                    (A) in subparagraph (A)(ii)(II), by striking ``1992 
                or 1993'' and inserting ``1992, 1993, or 1994'';
                    (B) in subparagraph (B)(ii), by striking ``each 
                subsequent year'' and inserting ``1993'';
                    (C) in subparagraph (C)(iv), by striking ``regional 
                purchase price computed under subparagraph (B)'' and 
                inserting ``national limited purchase price computed 
                under subparagraph (E)'';
                    (D) in subparagraph (D)(ii), by striking ``a 
                subsequent year'' and inserting ``1993''; and
                    (E) by adding at the end the following new 
                subparagraph:
                    ``(E) Computation of national limited purchase 
                price.--With respect to the furnishing of a particular 
                item in a year, the Secretary shall compute a national 
                limited purchase price--
                            ``(i) for 1994, equal to the local purchase 
                        price computed under subparagraph (A)(ii)(II) 
                        for the item for the year, except that such 
                        national limited purchase price may not exceed 
                        100 percent of the median of all local purchase 
                        prices for the item computed under such 
                        subparagraph for the year, and may not be less 
                        than 85 percent of the median of all local 
                        purchase prices for the item computed under 
                        such subparagraph for the year; and
                            ``(ii) for each subsequent year, equal to 
                        the amount determined under this subparagraph 
                        for the preceding year increased by the 
                        applicable percentage increase for such 
                        subsequent year.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to items furnished on or after January 1, 1994.

SEC. 7232. TREATMENT OF NEBULIZERS AND ASPIRATORS.

    (a) In General.--Section 1834(a)(3)(A) (42 U.S.C. 1395m(a)(3)(A)) 
is amended by striking ``(such as ventilators, aspirators, IPPB 
machines, and nebulizers)''.
    (b) Payment for Accessories Relating to Nebulizers and 
Aspirators.--Section 1834(a)(2)(A) (42 U.S.C. 1395m(a)) is amended--
            (1) by striking ``or'' at the end of clause (i),
            (2) by adding ``or'' at the end of clause (ii), and
            (3) by inserting after clause (ii) the following new 
        clause:
                            ``(iii) which is an accessory used in 
                        conjunction with a nebulizer or aspirator,''.
    (c) Effective Date.--The amendments made by this section shall 
apply to items furnished on or after January 1, 1994.

SEC. 7233. PAYMENT FOR SURGICAL DRESSINGS.

    (a) In General.--Section 1834 (42 U.S.C. 1395m) is amended by 
adding at the end the following new subsection:
    ``(i) Payment for Surgical Dressings.--
            ``(1) In general.--Payment under this subsection for 
        surgical dressings (described in section 1861(s)(5)) shall be 
        made in a lump sum amount for the purchase of the item in an 
        amount equal to 80 percent of the lesser of--
                    ``(A) the actual charge for the item; or
                    ``(B) a payment amount determined in accordance 
                with the methodology described in subparagraphs (B) and 
                (C) of subsection (a)(2) (except that in applying such 
                methodology, the national limited payment amount 
                referred to in such subparagraphs shall be initially 
                computed based on local payment amounts using average 
                reasonable charges for the 12-month period ending 
                December 31, 1992, increased by the covered item 
                updates described in such subsection for 1993 and 
                1994).
            ``(2) Exceptions.--Paragraph (1) shall not apply to 
        surgical dressings that are--
                    ``(A) furnished as an incident to a physician's 
                professional service; or
                    ``(B) furnished by a home health agency.''.
    (b) Conforming Amendment.--Section 1833(a)(1) (42 U.S.C. 
1395l(a)(1)), as amended by section 7207(e)(1), is amended--
            (1) by striking ``and'' before ``(P)'', and
            (2) by inserting before the semicolon at the end the 
        following: ``, and (Q) with respect to surgical dressings, the 
        amounts paid shall be the amounts determined under section 
        1834(j)''.
    (c) Effective Date.--The amendments made by this section shall 
apply to items furnished on or after January 1, 1994.

SEC. 7234. PAYMENTS FOR TENS DEVICES.

    (a) In General.--Section 1834(a)(1)(D) (42 U.S.C. 1395m(a)(1)(D)) 
is amended by striking ``15 percent'' the second place it appears and 
inserting ``45 percent''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to items furnished on or after January 1, 1994.

                       Subpart D--Part B Premium

SEC. 7251. PART B PREMIUM.

    Section 1839(e) (42 U.S.C. 1395r(e)) is amended--
            (1) in paragraph (1)(A), by striking ``December 1983 and 
        prior to January 1991 shall be an amount equal to 50 percent'' 
        and inserting ``after December 1995 and prior to January 1999 
        shall be an amount equal to 50 percent'', and
            (2) in paragraph (2), by striking ``1991'' and inserting 
        ``1998''.

                      Subpart E--Other Provisions

SEC. 7261. PAYMENTS FOR CLINICAL DIAGNOSTIC LABORATORY TESTS.

    (a) Lower Cap.--Section 1833(h)(4)(B) (42 U.S.C. 1395l(h)(4)(B)) is 
amended--
            (1) by striking ``and'' at the end of clause (iii),
            (2) in clause (iv), by inserting ``and before January 1, 
        1994,'' after ``1990,'',
            (3) by striking the period at the end of clause (iv) and 
        inserting ``, and'', and
            (4) by adding at the end the following:
            ``(v) after December 31, 1993, is equal to 76 percent of 
        the median of all the fee schedules established for that test 
        for that laboratory setting under paragraph (1).''.
    (b) No Update for 1994 Through 1998.--Section 1833(h)(2)(A)(ii)(II) 
(42 U.S.C. 1395l(h)(2)(A)(ii)(III)) is amended by inserting ``1994, 
1995, 1996, 1997, and 1998'' after ``1988''.

             PART III--PROVISIONS RELATING TO PARTS A AND B

SEC. 7301. PAYMENTS FOR DIRECT GRADUATE MEDICAL EDUCATION COSTS.

    (a) Weighting Factors.--Section 1886(h)(4)(C) (42 U.S.C. 
1395ww(h)(4)(C)) is amended to read as follows:
                    ``(C) Weighting factors for certain residents.--
                Subject to subparagraph (D), such rules shall provide, 
                in calculating the number of full-time-equivalent 
                residents in an approved residency program--
                            ``(i) with respect to residents entering an 
                        approved medical residency training program 
                        before September 1, 1993--
                                    ``(I) for a resident who is in the 
                                resident's initial residency period, 
                                the weighting factor is 1.00, and
                                    ``(II) for a resident who is not in 
                                the resident's initial residency 
                                period, the weighting factor is .50; 
                                and
                            ``(ii) with respect to residents entering 
                        an approved medical residency training program 
                        on or after September 1, 1993--
                                    ``(I) for a resident who is in the 
                                resident's initial residency period, 
                                and is in--
                                            ``(aa) a primary care 
                                        residency, the weighting factor 
                                        is 1.10, and
                                            ``(bb) any other residency, 
                                        the weighting factor is 0.70, 
                                        and
                                    ``(II) for a resident who is not in 
                                the resident's initial residency 
                                period, the weighting factor is 
                                0.50.''.
    (b) Initial Residency Period.--
            (1) In general.--Section 1886(h)(5)(F) (42 U.S.C. 
        1395ww(h)(5)(F)) is amended by striking ``plus one year''.
            (2) Effective date.--The amendment made by paragraph (1) 
        shall be effective on and after July 1, 1995.
    (c) Primary Care Residency.--Section 1886(h)(5) (42 U.S.C. 
1395ww(h)(5)) is amended by adding at the end the following new 
subparagraph:
                    ``(I) Primary care residency.--The term `primary 
                care residency' means a residency training program in 
                family medicine, general internal medicine, general 
                pediatrics, preventive care, geriatric care, or 
                osteopathic general practice.''.
    (d) Preventive Care Services as Part of Initial Residency Period.--
Section 1886(h)(5)(F)(ii) (42 U.S.C. 1395ww(h)(5)(F)(ii)) is amended by 
inserting ``or a preventive care residency or fellowship program'' 
after ``fellowship program''.
    (e) Successor Exams Included in Definition of FMGEMS Examination.--
            (1) In general.--Section 1886(h)(5)(E) is amended by 
        inserting ``or any successor examination'' after ``Medical 
        Sciences''.
            (2) Effective date.--The amendment made by paragraph (1) 
        shall apply as if included in the enactment of the Consolidated 
        Omnibus Budget Reconciliation Act of 1985 (Public Law 99-272).
    (f) Report by the Secretary.--
            (1) Recommendations.--The Secretary shall make 
        recommendations--
                    (A) concerning the extent to which variation in the 
                approved FTE per resident amounts should be reduced;
                    (B) whether the approved FTE per resident amounts 
                should be adjusted to account for substantial changes 
                in the operation of an approved medical residency 
                training program since the base year calculation; and
                    (C) potential changes in the graduate medical 
                education payment system that would promote residency 
                training in nonhospital ambulatory site.
            (2) Report.--Not later than July 31, 1994, the Secretary 
        shall deliver a report to Congress which shall contain 
        recommendations on each of the matters under paragraph (1).

SEC. 7302. REVISION OF HOME HEALTH AGENCY COST LIMITS.

    (a) In General.--Section 1861(v)(1)(L) (42 U.S.C. 
1395x(v)(1)(L)(i)) is amended--
            (1) in clause (i), by striking ``for cost reporting 
        periods'' and all that follows through to the period and 
        inserting ``110 percent of the median of the labor-related and 
        nonlabor per visit costs for home health agencies.'', and
            (2) in clause (ii), by striking ``specific basis,'' and all 
        that follows through ``agencies.'' and inserting ``specific 
        basis.''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
apply to cost reporting periods beginning on or after October 1, 1993.

SEC. 7303. MEDICARE AS SECONDARY PAYER.

    (a) Extension of and Modifications to Data Match Program.--(1)(A) 
Section 1862(b)(5)(C)(iii) (42 U.S.C. 1395y(b)(5)(C)(iii)) is amended 
by striking ``1995'' and inserting ``1998''.
    (B) Section 6103(l)(12)(F) of the Internal Revenue Code of 1986 is 
amended--
            (i) in clause (i), by striking ``1995'' and inserting 
        ``1998'',
            (ii) in clause (ii)(I), by striking ``1994'' and inserting 
        ``1997'', and
            (iii) in clause (ii)(II), by striking ``1995'' and 
        inserting ``1998''.
    (2)(A) Section 6103(l)(12)(B)(i) of the Internal Revenue Code of 
1986 is amended by inserting ``, above an amount (if any) specified by 
the Secretary of Health and Human Services,'' after ``section 
3401(a))''.
    (B) The matter in section 6103(l)(12)(B)(ii) of such Code preceding 
subclause (I) is amended by inserting ``, above an amount (if any) 
specified by the Secretary of Health and Human Services,'' after 
``wages''.
    (C) The heading to section 6103(l)(12) of such Code is amended by 
striking ``taxpayer identity'' and inserting ``return''.
    (3)(A) Section 6103(l)(12) of the Internal Revenue Code of 1986, as 
amended by paragraph (1), is amended--
            (i) by redesignating subparagraphs (E) and (F) as 
        subparagraphs (F) and (G), respectively, and
            (ii) by inserting after subparagraph (D) the following new 
        subparagraph:
                    ``(E) Disclosure concerning enforcement 
                activities.--The Secretary shall, upon written request 
                from the Secretary of Health and Human Services, 
                disclose to the Secretary of Health and Human Services 
                the status of any activities undertaken (with respect 
                to persons specified by the Secretary of Health and 
                Human Services) to enforce the requirements of section 
                5000.''.
    (B) Section 6103(l)(12)(D)(i) of such Code is amended by striking 
``this paragraph'' and inserting ``subparagraphs (A) through (C)''.
    (C) The heading to section 6103(l)(12) of such Code is amended by 
inserting ``and for facilitation of enforcement of medicare secondary 
payer requirements'' before the period.
    (D) Section 1862(b)(5)(C)(i) (42 U.S.C. 1395y(b)(5)(C)(i)) is 
amended by striking ``6103(l)(12)(D)(iii)'' and inserting 
``6103(l)(12)(F)(iii)''.
    (b) Permanent Application to Disabled Active Individuals.--Section 
1862(b)(1)(B) (42 U.S.C. 1395y(b)(1)(B)) is amended by striking clause 
(iii).
    (c) Application of ESRD Rules to Certain Aged and Disabled 
Beneficiaries and Increase in Medicare Secondary Payer Coverage for 
ESRD Services to 24-months.--(1) Subparagraphs (A)(iv) and (B)(ii) of 
section 1862(b)(1) (42 U.S.C. 1395y(b)(1)) are each amended--
            (A) by striking ``Clause (i) shall not apply'' and 
        inserting ``Subparagraph (C) shall apply instead of clause 
        (i)'', and
            (B) by inserting ``(without regard to entitlement under 
        section 226)'' after ``individual is, or''.
    (2) Section 1862(b)(1)(C) (42 U.S.C. 1395y(b)(1)(C)) is amended--
            (A) in the second sentence, by striking ``on or before 
        January 1, 1996'' and inserting before ``January 1, 1994'', and
            (B) by adding at the end the following: ``Effective for 
        items and services furnished on or after January 1, 1994, and 
        before October 1, 1998, (with respect to periods beginning on 
        or after July 1, 1992), this subparagraph shall be applied by 
        substituting `24-month' for `12-month' each place it 
        appears.''.
    (d) Application of Excise Tax to Failure To Reimburse Federal 
Government.--
            (1) In general.--Section 5000(c) of the Internal Revenue 
        Code of 1986 is amended by striking ``of section 1862(b)(1)'' 
        and inserting ``of paragraph (1), or with the requirements of 
        paragraph (2), of section 1862(b).''.
            (2) Effective date.--The amendment made by paragraph (1) 
        shall apply to demands for repayment issued after the date of 
        the enactment of this Act.
    (e) Retroactive Exemption for Certain Situations Involving 
Religious Orders.--Section 1862(b)(1)(D) of the Social Security Act (42 
U.S.C. 1395y(b)(1)(D)) applies, with respect to items and services 
furnished before October 1, 1989, to any claims that the Secretary of 
Health and Human Services had not identified before that date as 
subject to the provisions of this subsection.
    (f) Uniform Rules for Size of Employer.--(1) Section 1862(b)(1) (42 
U.S.C. 1395y(b)(1)) is amended by adding at the end the following new 
subparagraph:
                    ``(E) General provisions.--
                            ``(i) Exclusion of group health plan of a 
                        small employer.--Subparagraphs (A) through (C) 
                        shall not apply to a group health plan unless 
                        the plan is a plan of, or contributed to by, an 
                        employer or employee organization that has 20 
                        or more individuals in current employment 
                        status for each working day in each of 20 or 
                        more calendar weeks in the current calendar 
                        year or the preceding calendar year.
                            ``(ii) Exception for small employers in 
                        multiemployer or multiple employer group health 
                        plans.--Subparagraphs (A) through (C) shall not 
                        apply with respect to individuals enrolled in a 
                        multiemployer or multiple employer group health 
                        plan if the coverage of the individuals under 
                        the plan is by virtue of current employment 
                        status with an employer that does not have 20 
                        or more individuals in current employment 
                        status for each working day in each of 20 or 
                        more calendar weeks in the current calendar 
                        year or the preceding calendar year; but the 
                        exception provided in this clause applies only 
                        if the plan elects treatment under this clause.
                            ``(iii) Special rules.--For purposes of 
                        clauses (i) and (ii)--
                                    ``(I) all employees of corporations 
                                which are members of a controlled group 
                                of corporations (within the meaning of 
                                section 1563(a) of the Internal Revenue 
                                Code of 1986, determined without regard 
                                to section 1563(a)(4) or section 
                                (e)(3)(C) of such Code), shall be 
                                treated as employed by a single 
                                employer,
                                    ``(II) all employees of trades or 
                                businesses (whether or not 
                                incorporated) which are under common 
                                control (under regulations prescribed 
                                by the Secretary of the Treasury under 
                                section 414(c) of such Code) shall be 
                                treated as employed by a single 
                                employer,
                                    ``(III) all employees of the 
                                members of an affiliated service group 
                                (as defined in section 414(m) of such 
                                Code) shall be treated as employed by a 
                                single employer, and
                                    ``(IV) leased employees (as defined 
                                in section 414(n)(2) of such Code) 
                                shall be treated as employees of the 
                                person for whom they perform services 
                                to the extent they are so treated under 
                                section 414(n) of such Code.
                        In applying sections of the Internal Revenue 
                        Code under this clause, the Secretary shall 
                        rely upon regulations and decisions of the 
                        Secretary of the Treasury respecting such 
                        sections.''.
                            ``(iv) Group health plan defined.--For 
                        purposes of this subsection, the term `group 
                        health plan' has the meaning given such term in 
                        section 5000(b) of the Internal Revenue Code of 
                        1986, without regard to section 5000(d) of such 
                        Code.
                            ``(v) Current employment status defined.--
                        For purposes of this subsection, an individual 
                        has `current employment status' with an 
                        employer if the individual is an employee, is 
                        the employer, or is associated with the 
                        employer in a business relationship.
                            ``(vi) Employer defined.--For purposes of 
                        this subsection, the term `employer' includes a 
                        self-employed person.''.
    (2)(A) Section 1862(b)(1)(A)(i)(I) (42 U.S.C. 1395y(b)(1)(A)(i)(I)) 
is amended to read as follows:
                                    ``(I) may not take into account 
                                that an individual (or the individual's 
                                spouse) who is covered under the plan 
                                by virtue of the individual's current 
                                employment status with an employer is 
                                entitled to benefits under this title 
                                under section 226(a), and''.
    (B) Section 1862(b)(1)(A)(i)(II) (42 U.S.C. 1395y(b)(1)(A)(i)(II)) 
is amended to read as follows:
                                    ``(II) shall provide that any 
                                individual age 65 or over (and the 
                                individual's spouse age 65 or older) 
                                who is covered under the plan by virtue 
                                of the individual's current employment 
                                status with an employer shall be 
                                entitled to the same benefits under the 
                                plan under the same conditions as any 
                                such individual (or spouse) under age 
                                65.''.
    (C) Section 1862(b)(1)(A) (42 U.S.C. 1395y(b)(1)(A)), as amended by 
subsection (c)(1), is amended--
            (i) by striking clauses (ii), (iii), and (v), and
            (ii) by redesignating clause (iv) as clause (ii).
    (3)(A) Section 1862(b)(1)(B) (42 U.S.C. 1395y(b)(1)(B)(i)) is 
amended--
            (i) by striking the heading and inserting the following new 
        heading:
                    ``(B) Disabled individuals under group health 
                plans.--'', and
            (ii) by striking clause (i) and inserting the following new 
        clause:
                    ``(i) In general.--A group health plan may not take 
                into account that an individual (or a member of the 
                individual's family) who is covered under the plan by 
                virtue of the individual's current employment status 
                with an employer is entitled to benefits under this 
                title under section 226(b).''.
    (B) Section 1862(b)(1)(B) (42 U.S.C. 1395y(b)(1)(B)) is amended by 
striking clause (iv).
    (4) Section 1862(b)(1)(C) (42 U.S.C. 1395y(b)(1)(C)) is amended--
            (A) in the matter preceding clause (i), by striking ``(as 
        defined in subparagraph (A)(v))'',
            (B) by striking ``solely'' each place it appears,
            (C) by striking ``by reason of'' and inserting ``under'' 
        each place it appears, and
            (D) by inserting ``or eligible for'' after ``entitled to'' 
        the first and last place it appears.
    (5) The second sentence of section 1862(b)(2)(A) (42 U.S.C. 
1395y(b)(2)(A)) is amended by striking ``or large group health plan''.
    (6)(A) Subsection (a) of section 5000 of the Internal Revenue Code 
of 1986 is amended by inserting ``(including a self-employed person)'' 
after ``employer'';
    (B) Subsection (b) of section 5000 of such Code is amended to read 
as follows:
    ``(b) Group Health Plan.--The term `group health plan' means a plan 
(including a self-insured plan) of, or contributed to by, an employer 
(including a self-employed person) or employee organization to provide 
health care (directly or otherwise) to the employees, former employees, 
the employer, others associated or formerly associated with the 
employer in a business relationship, or their families.''; and
    (C) Subsection (c) of section 5000 of such Code by striking ``or 
large group health plan''.
    (D) Section 6103(l)(12)(F)(ii) of such Code (as redesignated by 
subsection (a)(3)(A)(i) of this section) is amended to read as follows:
                            ``(ii) Group health plan.--The term `group 
                        health plan' means any group health plan (as 
                        defined in section 5000(b)).''.
    (g) Effective Date.--The amendments made by subsections (c)(1), 
(d), and (f) apply to items and services furnished after the third 
calendar month beginning after the date of enactment of this Act.

SEC. 7304. EXTENSION OF SELF-REFERRAL BAN TO ADDITIONAL SPECIFIED 
              SERVICES.

    (a) Extension to Designated Health Services.--
            (1) In general.--Section 1877(h) (42 U.S.C. 1395nn(h)) is 
        amended by adding at the end the following new paragraph:
            ``(8) Designated health services.--The term `designated 
        health services' means--
                    ``(A) clinical laboratory services;
                    ``(B) physical or occupational therapy services;
                    ``(C) radiology or other diagnostic services;
                    ``(D) radiation therapy services;
                    ``(E) the furnishing of durable medical equipment;
                    ``(F) the furnishing of parenteral and enteral 
                nutrition nutrients, supplies, and equipment;
                    ``(G) home health services; and
                    ``(H) the furnishing of prosthetics, orthotics, and 
                prosthetic devices.''.
            (2) Conforming amendments.--Section 1877 (42 U.S.C. 1395nn) 
        is amended--
                    (A) by striking ``clinical laboratory services'' 
                and ``clinical laboratory services'' and inserting 
                ``designated health services'' and ``designated health 
                services'', respectively, each place either appears in 
                subsections (a)(1), (b)(2)(A)(ii), (d)(1), (d)(2), and 
                (d)(3); and
                    (B) by striking ``clinical laboratory service'' and 
                inserting ``designated health service'' each place it 
                appears in subsections (g)(1) and (h)(7)(B).
    (b) Modification to Exception for In-Office Ancillary Services.--
Section 1877(b)(2) (42 U.S.C. 1395nn(b)(2)) is amended--
            (1) by inserting ``(other than durable medical equipment 
        and parenteral and enteral nutrition equipment and supplies)'' 
        after ``services'' the first place it appears; and
            (2) in subparagraph (A)(ii)(II), by striking ``centralized 
        provision'' and inserting ``provision of some or all''.
    (c) Treatment of Compensation Arrangements.--
            (1) Rental of office space and equipment.--
                    (A) In general.--Paragraph (1) of section 1877(e) 
                (42 U.S.C. 1395nn(e)) is amended to read as follows:
            ``(1) Rental of office space; rental of equipment.--
                    ``(A) Office space.--Payments made by a lessee to a 
                lessor for the use of premises if--
                            ``(i) the lease is set out in writing, 
                        signed by the parties, and specifies the 
                        premises covered by the lease,
                            ``(ii) the space rented or leased is 
                        reasonable and necessary for the legitimate 
                        business purposes of the lease or rental and is 
                        used exclusively by the lessee when being used 
                        by the lessee, except that the lessee may make 
                        payments for the use of space consisting of 
                        common areas if such payments do not exceed the 
                        lessee's pro rata share of expenses for such 
                        space based upon the ratio of the space used 
                        exclusively by the lessee to the total amount 
                        of space (other than common areas) occupied by 
                        all persons using such common areas,
                            ``(iii) the lease provides for a term of 
                        rental or lease for at least one year,
                            ``(iv) the rental charges over the term of 
                        the lease are set in advance, are consistent 
                        with fair market value, and are not determined 
                        in a manner that takes into account the volume 
                        or value of any referrals or other business 
                        generated between the parties,
                            ``(v) the lease would be commercially 
                        reasonable even if no referrals were made 
                        between the parties,
                            ``(vi) the lease covers all of the premises 
                        leased between the parties for the period of 
                        the lease, and
                            ``(vii) the compensation arrangement meets 
                        such other requirements as the Secretary may 
                        impose by regulation as needed to protect 
                        against program or patient abuse.
                    ``(B) Equipment.--Payments made by a lessee of 
                equipment to the lessor of the equipment for the use of 
                the equipment if--
                            ``(i) the lease is set out in writing, 
                        signed by the parties, and specifies the 
                        equipment covered by the lease,
                            ``(ii) the equipment rented or leased is 
                        reasonable and necessary for the legitimate 
                        business purposes of the lease or rental and is 
                        used exclusively by the lessee when being used 
                        by the lessee,
                            ``(iii) the lease provides for a term of 
                        rental or lease of at least one year,
                            ``(iv) the rental charges over the term of 
                        the lease are set in advance, are consistent 
                        with fair market value, and are not determined 
                        in a manner that takes into account the volume 
                        or value of any referrals or other business 
                        generated between the parties,
                            ``(v) the lease would be commercially 
                        reasonable even if no referrals were made 
                        between the parties,
                            ``(vi) the lease covers all of the 
                        equipment leased between the parties for the 
                        period of the lease, and
                            ``(vii) the compensation arrangement meets 
                        such other requirements as the Secretary may 
                        impose by regulation as needed to protect 
                        against program or patient abuse.''.
                    (B) Conforming amendment.--Section 1877(h) (42 
                U.S.C. 1395nn(h)) is amended by striking paragraphs (5) 
                and (6) and by redesignating paragraphs (7) and (8) (as 
                added by subsection (a)(1)) as paragraphs (5) and (6), 
                respectively.
            (2) Bona fide employment relationships.--Section 1877(e)(2) 
        (42 U.S.C. 1395nn(e)(2)) is amended--
                    (A) by striking ``and service'' and ``with 
                hospitals'';
                    (B) by striking ``An arrangement'' and all that 
                follows through ``if'' and inserting ``Any amount paid 
                by an employer to a physician (or an immediate family 
                member of such physician) who has a bona fide 
                employment relationship with the employer for the 
                provision of services if'';
                    (C) in subparagraphs (A), (B), and (D), by striking 
                ``arrangement'' and inserting ``employment 
                relationship'';
                    (D) in subparagraph (C), by striking ``hospital'' 
                and inserting ``employer''; and
                    (E) by adding at the end the following new flush 
                sentence:
        ``Subparagraph (B)(ii) shall not be construed as prohibiting 
        the payment of remuneration in the form of a productivity bonus 
        based on services performed personally by the physician (or an 
        immediate family member of such physician).''.
            (3) Personal service arrangements.--Section 1877(e)(3) (42 
        U.S.C. 1395nn(e)(3)) is amended to read as follows:
            ``(3) Service arrangements.--
                    ``(A) Personal service arrangements.--Remuneration 
                from an entity under an arrangement if--
                            ``(i) the arrangement is set out in 
                        writing, signed by the parties, and specifies 
                        the services covered by the arrangement,
                            ``(ii) the arrangement covers all of the 
                        services to be provided,
                            ``(iii) the aggregate services contracted 
                        for do not exceed those that are reasonable and 
                        necessary for the legitimate business purposes 
                        of the arrangement,
                            ``(iv) the term of the arrangement is for 
                        at least one year,
                            ``(v) the compensation to be paid over the 
                        term of the arrangement is set in advance, does 
                        not exceed fair market value, and is not 
                        determined in a manner that takes into account 
                        the volume or value of any referrals or other 
                        business generated between the parties,
                            ``(vi) the services to be performed under 
                        the arrangement do not involve the counseling 
                        or promotion of a business arrangement of other 
                        activity that violates any State or Federal 
                        law, and
                            ``(vii) the arrangement meets such other 
                        requirements as the Secretary may impose by 
                        regulation as needed to protect against program 
                        or patient abuse.
                    ``(B) Other service arrangements.--Remuneration 
                from an entity under an arrangement if--
                            ``(i) the arrangement is--
                                    ``(I) for specific identifiable 
                                services as the medical director or as 
                                a member of a medical advisory board at 
                                the entity pursuant to a requirement of 
                                this title,
                                    ``(II) for specific identifiable 
                                physicians' services to be furnished to 
                                an individual receiving hospice care if 
                                payment for such services may only be 
                                made under this title as hospice care,
                                    ``(III) for specific physicians' 
                                services furnished to a nonprofit blood 
                                center, or
                                    ``(IV) for specific identifiable 
                                administrative services (other than 
                                direct patient care services), but only 
                                under exceptional circumstances 
                                specified by the Secretary in 
                                regulations;
                            ``(ii) the requirements described in 
                        subparagraphs (B) and (C) of paragraph (2) are 
                        met with respect to the entity in the same 
                        manner as they apply to an employer; and
                            ``(iii) the arrangement meets such other 
                        requirements as the Secretary may impose by 
                        regulation as needed to protect against program 
                        or patient abuse.''.
            (4) Health services furnished under certain hospital 
        arrangements.--Section 1877(e) (42 U.S.C. 1395nn(e)) is amended 
        by adding at the end the following new paragraph:
            ``(7) Certain group practice arrangements with a 
        hospital.--
                    ``(A) In general.--An arrangement between a 
                hospital and a group under which designated health 
                services are provided by the group but are billed by 
                the hospital if--
                            ``(i) the group would be a group practice, 
                        but for the fact that it bills for such 
                        services through the hospital;
                            ``(ii) with respect to services provided to 
                        an inpatient of the hospital, the arrangement 
                        is pursuant to the provision of inpatient 
                        hospital services under section 1861(b)(3);
                            ``(iii) the arrangement began before 
                        December 19, 1989, and has continued in effect 
                        without interruption since such date;
                            ``(iv) the group provides substantially all 
                        of the designated health services furnished 
                        under the arrangement to the hospital's 
                        patients;
                            ``(v) the arrangement is pursuant to an 
                        agreement that is set out in writing and that 
                        specifies the services to be provided by the 
                        parties and the compensation for services 
                        provided under the arrangement;
                            ``(vi) the compensation paid over the term 
                        of the agreement is consistent with fair market 
                        value and the compensation per unit of services 
                        is fixed in advance and is not determined in a 
                        manner that takes into account the volume or 
                        value of any referrals or other business 
                        generated between the parties;
                            ``(vii) the compensation is provided 
                        pursuant to an agreement which would be 
                        commercially reasonable even if no referrals 
                        were made to the entity; and
                            ``(viii) the arrangement between the 
                        parties meets such other requirements as the 
                        Secretary may impose by regulation as needed to 
                        protect against program or patient abuse.''.
            (5) Additional exception.--Section 1877(e) (42 U.S.C. 
        1395nn(e)) is further amended by adding at the end the 
        following new paragraph:
            ``(8) Payments by a physician for items and services.--
        Payments made by a physician--
                    ``(A) to a laboratory in exchange for the provision 
                of clinical laboratory diagnostic tests, or
                    ``(B) to an entity as compensation for other items 
                or services if the items or services are furnished at a 
                price that is consistent with fair market value.''.
            (6) Referring physicians.--Subparagraph (C) of section 
        1877(h)(5) (42 U.S.C. 1395nn(h)(5)), as redesignated by 
        subsection (c)(1)(B), is amended--
                    (A) by inserting ``a request by a radiologist for 
                diagnostic radiology services, and a request by a 
                radiation oncologist for radiation therapy,'' after 
                ``examination services,'', and
                    (B) by inserting ``, radiologist, or radiation 
                oncologist'' after ``pathologist'' the second place it 
                appears.
            (7) Conforming amendment.--Section 1877(b) (42 U.S.C. 
        1395nn(b)) is amended by striking paragraph (4) and 
        redesignating paragraph (5) as paragraph (4).
    (d) Requirements for Group Practice.--
            (1) Additional requirements.--Section 1877(h)(4) (42 U.S.C. 
        1395nn(h)(4)) is amended to read as follows:
            ``(4) Group practice.--
                    ``(A) Definition of group practice.--The term 
                `group practice' means a group of 2 or more physicians 
                legally organized as a partnership, professional 
                corporation, foundation, not-for-profit corporation, 
                faculty practice plan, or similar association--
                            ``(i) in which each physician who is a 
                        member of the group provides substantially the 
                        full range of services which the physician 
                        routinely provides, including medical care, 
                        consultation, diagnosis, or treatment, through 
                        the joint use of shared office space, 
                        facilities, equipment and personnel;
                            ``(ii) for which substantially all of the 
                        services of the physicians who are members of 
                        the group are provided through the group and 
                        are billed in the name of the group and amounts 
                        so received are treated as receipts of the 
                        group;
                            ``(iii) in which the overhead expenses of 
                        and the income from the practice are 
                        distributed in accordance with methods 
                        previously determined by members of the group;
                            ``(iv) except as provided in subparagraph 
                        (B)(i), in which no physician who is a member 
                        of the group directly or indirectly receives 
                        compensation based on the volume or value of 
                        referrals by the physician;
                            ``(v) in which, on average, there are no 
                        less than 5 physicians per office location, but 
                        if a group has less than 15 physicians such 
                        group may have up to 3 office locations any one 
                        of which may have less than 5 physicians;
                            ``(vi) in which members of the group 
                        personally conduct no less than 75 percent of 
                        the physician-patient encounters of the group 
                        practice; and
                            ``(vii) which meets such other standards as 
                        the Secretary may impose by regulation.
                    ``(B) Special rules.--
                            ``(i) Profits and productivity bonuses.--A 
                        physician in a group practice may be paid a 
                        share of overall profits of the group, or a 
                        productivity bonus based on services personally 
                        performed or services incident to such 
                        personally performed services, so long as the 
                        share or bonus is not determined in any manner 
                        which is directly related to the volume or 
                        value of referrals by such physician.
                            ``(ii) Faculty practice plans.--In the case 
                        of a faculty practice plan associated with a 
                        hospital, institution of higher education, or 
                        medical school with an approved medical 
                        residency training program in which physician 
                        members may provide a variety of different 
                        specialty services and provide professional 
                        services both within and outside the group, as 
                        well as perform other tasks such as research, 
                        subparagraph (A) shall be applied only with 
                        respect to the services provided within the 
                        faculty practice plan.
                    ``(C) Definition of office location.--For purposes 
                of this paragraph, the term `office location' means an 
                office where physician services are offered to patients 
                except that--
                    ``(i) such term does not include--
                            ``(I) a location consisting solely of a 
                        diagnostic facility, nursing facility, or 
                        treatment facility such as a physical or 
                        occupational therapy center, or a facility 
                        providing administrative services affiliated 
                        with the group practice; or
                            ``(II) an office located in a rural area 
                        (as defined in section 1886(d)(2)(D)) if at 
                        least 85 percent of the physicians' services 
                        furnished at the location are furnished to 
                        individuals who reside in such a rural area; 
                        and
                    ``(ii) any office location which is located 
                immediately adjacent to another office location shall 
                be treated as the same office location.''.
            (2) Use of billing numbers, etc.--Section 1877 (42 U.S.C. 
        1395nn) is amended--
                    (A) in subsection (b)(2)(B), by inserting ``under a 
                billing number assigned to the group practice'' after 
                ``member'',
                    (B) in subsection (h)(4)(A)(ii), as added by 
                subsection (d)(1), by inserting ``and under a billing 
                number assigned to the group'' after ``in the name of 
                the group'', and
                    (C) in subsection (h)(4)(A)(iii), as so added, by 
                striking ``by members of the group''.
            (3) Conforming amendment.--Section 1877(h) (42 U.S.C. 
        1395nn(h)) is amended by striking ``Definitions.--'' and 
        inserting ``Definitions and Special Rules.--''.
    (e) Expanding Rural Provider Exception To Cover Compensation 
Arrangements.--
            (1) In general.--Section 1877(b) (42 U.S.C. 1395nn(b)) is 
        amended--
                    (A) by redesignating paragraph (4), as redesignated 
                by subsection (c)(7), as paragraph (5), and
                    (B) by inserting after paragraph (3) the following 
                new paragraph:
            ``(4) Rural providers.--In the case of designated health 
        services if--
                    ``(A) the services are furnished in a rural area 
                (as defined in section 1886(d)(2)(D)), and
                    ``(B) substantially all of the services furnished 
                by the entity furnishing the services described in 
                subparagraph (A) are furnished to individuals entitled 
                to benefits under this title who reside in such a rural 
                area.''.
            (2) Conforming amendments.--Section 1877(d) (42 U.S.C. 
        1395nn(d)) is amended--
                    (A) by striking paragraph (2), and
                    (B) by redesignating paragraph (3) as paragraph 
                (2).
    (f) Exemption of Compensation Arrangements Involving Certain Types 
of Remuneration.--Section 1877(h)(1) (42 U.S.C. 1395nn(h)(1)) is 
amended--
            (1) in subparagraph (A), by inserting before the period at 
        the end the following: ``other than an arrangement involving 
        only remuneration described in subparagraph (C)'', and
            (2) by adding at the end the following new subparagraph:
            ``(C) Remuneration described in this subparagraph is any 
        remuneration consisting of any of the following:
                    ``(i) The forgiveness of amounts owed for 
                inaccurate tests or procedures, mistakenly performed 
                tests or procedures, or the correction of minor billing 
                errors.
                    ``(ii) The provision of items, devices, or supplies 
                of minor value that are used to--
                            ``(I) collect, transport, process, or store 
                        specimens for the entity providing the item, 
                        device, or supply, or
                            ``(II) communicate the results of tests or 
                        procedures for such entity.''.
    (g) Exception for Publicly-Traded Securities.--Section 1877(c) (42 
U.S.C. 1395nn(c)) is amended--
            (1) in the matter preceding paragraph (1), by striking ``on 
        terms generally available to the public'' and inserting 
        ``through public trading on a public exchange or which were 
        inherited''; and
            (2) in paragraph (2), by striking ``total assets exceeding 
        $100,000,000'' and inserting ``stockholder equity exceeding 
        $75,000,000''.
    (h) Miscellaneous and Technical Corrections.--Section 1877 (42 
U.S.C. 1395nn) is amended--
            (1) in subsection (b)(2)(A)(i), by striking ``who are 
        employed by such physician or group practice and who are 
        personally'' and inserting ``who are directly'';
            (2) in the fourth sentence of subsection (f)--
                    (A) by striking ``provided'' and inserting 
                ``furnished'', and
                    (B) by striking ``provides'' and inserting 
                ``furnish'';
            (3) in the last sentence of subsection (f)--
                    (A) by striking ``providing'' each place it appears 
                and inserting ``furnishing'',
                    (B) by striking ``with respect to the providers'' 
                and inserting ``with respect to the entities'', and
                    (C) by striking ``diagnostic imaging services of 
                any type'' and inserting ``magnetic resonance imaging, 
                computerized axial tomography scans, and ultrasound 
                services''; and
            (4) in subsection (a)(2)(B), by striking ``subsection 
        (h)(1)(A)'' and inserting ``subsection (h)(1)''.
    (i) Effective Dates.--
            (1) Except as provided in paragraph (2), the amendments 
        made by this section shall apply to referrals made on or after 
        January 1, 1992.
            (2) The amendments made by subsection (a) apply with 
        respect to a referral by a physician for designated health 
        services (as defined in section 1877(h)(6) of the Social 
        Security Act) made after December 31, 1994.

SEC. 7305. REDUCTION IN PAYMENT FOR ERYTHROPOIETIN.

    (a) In General.--Section 1881(b)(11)(B)(ii)(I) (42 U.S.C. 
1395rr(b)(11)(B)(ii)(I)) is amended--
            (1) by striking ``1991'' and inserting ``1994'', and
            (2) by striking ``$11'' and inserting ``$10''.
    (b) Effective Date.--The amendments made by subsection (a) apply to 
erythropoietin furnished after 1993.

                      Subtitle B--Medicaid Program

                   PART I--PROGRAM SAVINGS PROVISIONS

                      Subpart A--Repeal of Mandate

SEC. 7401. PERSONAL CARE SERVICES FURNISHED OUTSIDE THE HOME AS 
              OPTIONAL BENEFIT.

    (a) In General.--Section 1905(a) (42 U.S.C. 1396d(a)), as amended 
by subsection (b), is amended--
            (1) in paragraph (7), by striking ``including personal care 
        services'' and all that follows through ``nursing facility'';
            (2) in paragraph (23), by striking ``and'' at the end;
            (3) by redesignating paragraph (24) as paragraph (25); and
            (4) by inserting after paragraph (23) the following new 
        paragraph:
            ``(24) personal care services furnished to an individual 
        who is not an inpatient or resident of a nursing facility or 
        other medical institution that are (A) authorized by a 
        physician for the individual in accordance with a plan of 
        treatment, (B) provided by an individual who is qualified to 
        provide such services and who is not a member of the 
        individual's family, (C) supervised by a registered nurse, and 
        (D) furnished in a home or other location; and''.
    (b) Redesignations to Paragraphs Added by OBRA-1990.--Section 
1905(a) (42 U.S.C. 1396d(a)) is amended--
            (1) by striking ``and'' at the end of paragraph (21);
            (2) in paragraph (24), by striking the comma at the end and 
        inserting ``; and''; and
            (3) by redesignating paragraphs (22), (23), and (24) as 
        paragraphs (24), (22), and (23), respectively, and by 
        transferring and inserting paragraph (24), as so redesignated, 
        after paragraph (23), as so redesignated.
    (c) Conforming Amendments.--(1) Section 1902(a)(10)(C)(iv) (42 
U.S.C. 1396a(a)(10)(C)(iv)) is amended by striking ``through (21)'' and 
inserting ``through (24)''.
    (2) Section 1902(j) (42 U.S.C. 1396a(j)) is amended by striking 
``through (22)'' and inserting ``through (25)''.
    (d) Effective Date.--The amendments made by this section shall take 
effect as if included in the enactment of OBRA-1990.

                Subpart B--Outpatient Prescription Drugs

SEC. 7411. PERMITTING PRESCRIPTION DRUG FORMULARIES UNDER STATE PLANS.

    (a) Elimination of Prohibition Against Use of Formularies.--
Paragraph (54) of section 1902(a) (42 U.S.C. 1396a(a)) is amended to 
read as follows:
            ``(54) in the case of a State plan that provides medical 
        assistance for covered outpatient drugs (as defined in section 
        1927(k)), comply with the applicable requirements of section 
        1927;''.
    (b) Standards for Formularies.--Section 1927(d) (42 U.S.C. 1396r-
8(d)), as amended by section 7412(a), is amended--
            (1) by adding at the end of paragraph (1) the following new 
        subparagraph:
            ``(C) In the case of a State that establishes a formulary 
        in accordance with paragraph (6), the State may exclude 
        coverage of a covered outpatient drug that is not included in 
        the formulary.''; and
            (2) by inserting after paragraph (5) the following new 
        paragraph:
            ``(6) Requirements for formularies.--A State may establish 
        a formulary only if the following requirements are met:
                    ``(A) The formulary is developed by a committee 
                consisting of physicians, pharmacists, and other 
                appropriate individuals appointed by the Governor of 
                the State or, at the option of the State, the State's 
                drug use review board established under subsection 
                (g)(3).
                    ``(B) The formulary includes each covered 
                outpatient drug of a manufacturer which has entered 
                into and complies with an agreement under subsection 
                (a) unless the drug is contained in the list referred 
                to in paragraph (2) or excluded in accordance with 
                subparagraph (C).
                    ``(C)(i) The committee may exclude a covered 
                outpatient drug with respect to the treatment of a 
                specific disease or condition for an identified 
                population (if any) only if the committee finds that 
                the excluded drug does not have a significant, 
                clinically meaningful therapeutic advantage in terms of 
                safety, effectiveness, or clinical outcome of such 
                treatment for such population over other drugs included 
                in the formulary.
                    ``(ii) The committee's finding under clause (i) 
                shall be based on--
                            ``(I) the drug's labeling, or
                            ``(II) in the case of a drug the prescribed 
                        use of which is not approved under the Federal 
                        Food, Drug, and Cosmetic Act but is a medically 
                        accepted indication, on information from the 
                        appropriate compendia described in subsection 
                        (k)(6).
                    ``(D) With respect to a recommendation to exclude a 
                covered outpatient drug from the formulary or to 
                exclude a prescribed use of such a drug, the committee 
                issues a written explanation of its recommendation that 
                is available to the public.
                    ``(E) The State plan permits coverage of a drug 
                excluded from the formulary pursuant to a prior 
                authorization program that is consistent with paragraph 
                (5) unless the drug is contained in the list referred 
                to in paragraph (2).
                    ``(F) The formulary meets such other requirements 
                as the Secretary may impose.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to calendar quarters beginning on or after October 1, 1993, 
without regard to whether or not regulations to carry out such 
amendments have been promulgated by such date.

SEC. 7412. ELIMINATION OF SPECIAL EXEMPTION FROM PRIOR AUTHORIZATION 
              FOR NEW DRUGS.

    (a) In General.--Section 1927(d) (42 U.S.C. 1396r-8(d)) is amended 
by striking paragraph (6).
    (b) Conforming Amendment.--(1) Section 1927(d)(1)(A) (42 U.S.C. 
1396r-8(d)(1)(A)) is amended by striking ``Except as provided in 
paragraph (6), a State'' and inserting ``A State''.
    (2) Section 1927(d)(3) (42 U.S.C. 1396r-8(d)(3)) is amended by 
striking ``(except with respect'' and all that follows through ``of 
this paragraph)''.
    (c) Effective Date.--The amendments made by this section shall 
apply to calendar quarters beginning on or after October 1, 1993, 
without regard to whether or not regulations to carry out such 
amendments have been promulgated by such date.

SEC. 7413. MODIFICATIONS TO DRUG REBATE PROGRAM.

    (a) Elimination of Additional Rebate Based on Weighted Average 
Manufacturer Price.--Paragraph (2) of section 1927(c) (42 U.S.C. 1396r-
8(c)) is amended to read as follows:
            ``(2) Additional rebate for single source and innovator 
        multiple source drugs.--
                    ``(A) In general.--The amount of the rebate for a 
                calendar quarter with respect to each dosage form and 
                strength of a single source drug or an innovator 
                multiple source drug, is increased by an amount equal 
                to the product of--
                            ``(i) the total number of dosage units 
                        dispensed after December 31, 1990, for which 
                        payment was made under the State plan for the 
                        period reported by the State under subsection 
                        (b)(2), and
                            ``(ii) the amount (if any) by which--
                                    ``(I) the average manufacturer 
                                price for the dosage form and strength 
                                of the drug for the period, exceeds
                                    ``(II) the average manufacturer 
                                price for such dosage form and strength 
                                for the calendar quarter beginning July 
                                1, 1990, increased by the percentage by 
                                which the average of the consumer price 
                                indices for all urban consumers (U.S. 
                                city average) for months during the 
                                calendar quarter exceeds such index for 
                                September 1990.
                    ``(B) Special rule.--In the case of a covered 
                outpatient drug approved by the Food and Drug 
                Administration after October 1, 1990, subclause (II) of 
                subparagraph (A)(ii) shall be applied by substituting 
                `the first full calendar quarter after the drug was 
                marketed' for `the calendar quarter beginning July 1, 
                1990' and `the month prior to the first month of the 
                first full calendar quarter after the drug was 
                marketed' for `September 1990'.''.
    (b) Base Date for Covered Outpatient Drug Sold or Transferred.--
Paragraph (2) of section 1927(c) (42 U.S.C. 1396r-8(c)), as amended by 
subsection (a), is amended by adding at the end the following new 
subparagraph:
                    ``(C) Base date for covered outpatient drug sold or 
                transferred.--For purposes of computing the additional 
                rebate under this paragraph for any covered outpatient 
                drug that is sold or transferred to any entity, 
                including a division or subsidiary of a manufacturer, 
                the base date for such drug after such sale or transfer 
                shall be the original base date established for such 
                drug.''.
    (c) Maximum Allowable Cost Limitations.--Section 1927 (42 U.S.C. 
1396r-8) is amended by adding at the end the following new subsection:
    ``(l) Maximum Allowable Cost Limitations.--This section shall not 
supersede or affect provisions in effect prior to January 1, 1991, 
relating to maximum allowable cost limitations for payment by States 
for covered outpatient drugs, and rebates under this section shall be 
made without regard to whether or not payment by the State for such 
drugs is subject to such limitations or the amount of such cost 
limitations.''.
    (d) Effective Dates.--(1) The amendments made by subsections (a) 
and (c) shall be effective as if included in the enactment of section 
4401 of OBRA-1990.
    (2) The amendment made by subsection (b) shall be effective on the 
date of the enactment of this Act.

  Subpart C--Restrictions on Divestiture of Assets and Estate Recovery

SEC. 7421. MEDICAID ESTATE RECOVERIES.

    (a) Mandate To Seek Recovery.--The matter preceding subparagraph 
(A) of section 1917(b)(1) (42 U.S.C. 1396p(b)(1)) is amended to read as 
follows: ``The State agency shall seek adjustment or recovery of any 
medical assistance correctly paid on behalf of an individual under the 
State plan--''.
    (b) Hardship Waiver.--Section 1917(b) (42 U.S.C. 1396p(b)) is 
amended by adding at the end the following new paragraph:
    ``(3) The State agency shall establish procedures (in accordance 
with standards specified by the Secretary) under which the agency shall 
waive the application of this subsection if such application would work 
an undue hardship as determined on the basis of criteria established by 
the Secretary.''.
    (c) Definition of Estate.--Section 1917(b) (42 U.S.C. 1396p(b)), as 
amended by subsection (b), is amended by adding at the end the 
following new paragraph:
    ``(4) Definition.--For purposes of this section, the term `estate', 
with respect to a deceased individual--
            ``(A) shall include all real and personal property and 
        other assets included within the individual's estate, as 
        defined for purposes of State law with respect to inheritance, 
        and
            ``(B) may include, at the option of the State, any or all 
        other real or personal property or other assets in which the 
        individual had any legal title or interest at the time of 
        death, including such assets conveyed to a survivor, heir, or 
        assign of the deceased individual through joint tenancy, 
        tenancy in common, survivorship, life estate, living trust, or 
        other arrangement.''.
    (d) Effective Date.--(1)(A) Except as provided in subparagraph (B), 
the amendments made by this section shall apply to payments under title 
XIX of the Social Security Act for calendar quarters beginning on or 
after October 1, 1993.
    (B) In the case of a State plan for medical assistance under title 
XIX of the Social Security Act which the Secretary of Health and Human 
Services determines requires State legislation (other than legislation 
appropriating funds) in order for the plan to meet the additional 
requirements imposed by the amendments made by this section, the State 
plan shall not be regarded as failing to comply with the requirements 
imposed by such amendments solely on the basis of its failure to meet 
these additional requirements before the first day of the first 
calendar quarter beginning after the close of the first regular session 
of the State legislature that begins after the date of the enactment of 
this Act. For purposes of the preceding sentence, in the case of a 
State that has a 2-year legislative session, each year of such session 
shall be deemed to be a separate regular session of the State 
legislature.
    (2) The amendments made by this section shall not apply to 
individuals who died before October 1, 1993.

SEC. 7422. TRANSFERS OF ASSETS.

    (a) Mandatory and Optional Periods of Ineligibility.--Section 
1917(c) (42 U.S.C. 1396p(c)) is amended--
            (1) by amending paragraph (1) to read as follows:
    ``(1)(A) In order to meet the requirements of this subsection for 
purposes of section 1902(a)(18), the State plan shall provide that any 
institutionalized individual (or the spouse of such individual) who 
disposes of assets for less than fair market value on the date 
specified in subparagraph (B)(ii), or at any time thereafter during 
such individual's lifetime, is ineligible for medical assistance for--
            ``(i) nursing facility services,
            ``(ii) a level of care in any institution equivalent to 
        that of nursing facility services, and
            ``(iii) home or community-based services under subsection 
        (c) or (d) of section 1915,
during any and all applicable periods specified in paragraph (2).
    ``(B)(i) The date specified in this clause, with respect to an 
institutionalized individual, is the first date as of which the 
individual--
            ``(I) is an institutionalized individual, and
            ``(II) has applied for or is receiving medical assistance 
        under the State plan.
    ``(ii) The date specified in this clause, with respect to an 
institutionalized individual, is the date 30 months before the date 
specified in clause (i) (or, at the option of the State, such earlier 
date as provided by the State in accordance with paragraph 
(3)(A)(iii)).'';
            (2) by redesignating paragraphs (2) through (5) as 
        paragraphs (4) through (7) and by inserting after paragraph (1) 
        the following new paragraphs:
    ``(2) The period of ineligibility required under paragraph (1) with 
respect to an institutionalized individual--
            ``(A) shall be a number of months equal to--
                    ``(i) the total uncompensated value of all assets 
                transferred by the individual or the individual's 
                spouse on or after the date specified in paragraph 
                (1)(B)(ii), divided by
                    ``(ii) the average cost to a private patient of 
                nursing facility services in the State (or, at the 
                option of the State, in the community in which the 
                individual is institutionalized) on the date specified 
                in paragraph (1)(B)(i) based on costs which include the 
                cost of services included in the State's nursing 
                facility reimbursement rate; and
            ``(B) shall begin with the first month in which--
                    ``(i) the individual--
                            ``(I) is an institutionalized individual,
                            ``(II) is (or but for the provisions of 
                        this subsection would be) entitled to have 
                        medical assistance paid under the State plan 
                        for services specified under paragraph (1), and
                            ``(III) is receiving or is an applicant for 
                        such medical assistance, and
                    ``(ii) the State has become aware that assets have 
                been transferred.
    ``(3)(A) The State plan may include, in accordance with this 
paragraph, any or all of the following provisions concerning 
eligibility for medical assistance of individuals who (or whose 
spouses) dispose of assets for less than fair market value:
            ``(i) The State plan may provide for periods of 
        ineligibility for medical assistance for long-term care 
        services specified by the State and approved by the Secretary 
        for any or all individuals (or groups of individuals) otherwise 
        eligible for such medical assistance, in addition to the 
        individuals specified in paragraph (1).
            ``(ii) Subject to such restrictions as the Secretary may 
        impose, the State plan may provide for periods of ineligibility 
        for medical assistance for any long-term care services (in 
        addition to the services specified in paragraph (1)(A)) for 
        which medical assistance is otherwise available under the plan.
            ``(iii) The State plan may provide for a date on and after 
        which transfers of assets are subject to review earlier than 
        the date specified in paragraph (1)(B)(ii), but not earlier 
        than 4 years before--
                    ``(I) in the case of an institutionalized 
                individual, the date specified in paragraph (1)(B)(i), 
                or 
                    ``(II) in the case of any other individual, the 
                date on which the individual applied for medical 
                assistance under the State plan.
    ``(B)(i) The period of ineligibility imposed by the State pursuant 
to this paragraph for services other than those specified in paragraph 
(1)(A) shall not be longer than the period of ineligibility that would 
have resulted if the individual had expended the assets transferred for 
the costs of medical care furnished on and after the date the 
individual applied for medical assistance, as determined by the State 
in accordance with clause (ii).
    ``(ii) In determining the period of ineligibility of an individual 
pursuant to clause (i), the State--
            ``(I) may presume that the individual's cost of medical 
        care furnished is equal to the average cost to a private 
        patient for such care on a daily, monthly, or other basis, or
            ``(II) may use any other method approved by the 
        Secretary.'';
            (3) in paragraph (4), as redesignated--
                    (A) by amending subparagraph (B) to read as 
                follows:
            ``(B) the resources--
                    ``(i) were transferred to the individual's spouse 
                or to another for the sole benefit of the individual's 
                spouse and did not exceed the amount permitted under 
                section 1924(f)(1);
                    ``(ii) were transferred from the individual's 
                spouse to another for the sole benefit of the 
                individual's spouse and did not exceed the amount 
                permitted under section 1924(f)(1); or
                    ``(iii) were transferred to the individual's child 
                described in subparagraph (A)(ii)(II);'';
                    (B) in subparagraph (C)--
                            (i) by striking ``any'';
                            (ii) by striking ``or (ii)'' and inserting 
                        ``(ii)''; and
                            (iii) by striking ``; or'' and inserting 
                        ``, or (iii) all assets transferred by an 
                        individual for less than fair market value have 
                        been returned to the individual;'';
                    (C) by amending subparagraph (D) to read as 
                follows:
            ``(D) the State determines (in accordance with regulations 
        promulgated by the Secretary) that denial of eligibility would 
        work an undue hardship; or'';
                    (D) by adding at the end the following new 
                subparagraph:
            ``(E) the State determines that the total fair market value 
        of all of the assets transferred by the individual during the 
        period between the date specified in paragraph (1)(B)(i) and 
        the date specified by the State under paragraph (1)(B)(ii) are 
        below an amount determined appropriate by the State and 
        approved by the Secretary.''; and
                    (E) by adding at the end the following flush 
                sentence:
``In determining whether an individual has made a satisfactory showing 
to the State under subparagraph (C)(ii), the State shall consider the 
individual's health status at the time of the transfer of assets and 
whether, at the time of such transfer, the individual retained assets 
sufficient to meet the individual's foreseeable future health care 
needs based on such health status.'';
            (4) by striking paragraph (5), as redesignated, and 
        inserting the following:
    ``(5) For purposes of this subsection, in the case of an asset held 
by an individual in common with another person or persons in a joint 
tenancy, tenancy in common, or similar arrangement, the asset (or the 
affected portion of such asset) shall be considered to be transferred 
by such individual when any action is taken, either by such individual 
or by any other person, that reduces or eliminates such individual's 
ownership or control of such asset, except to the extent an action 
taken by a person other than the individual is an action consistent 
with partial ownership of the asset, as provided in regulations issued 
by the Secretary.'';
            (5) by adding the following at the end of paragraph (6), as 
        redesignated: ``In the case of a transfer by the spouse of an 
        institutionalized individual which results in a period of 
        ineligibility for medical assistance under a State plan for the 
        institutionalized individual, a State shall apply a reasonable 
        methodology to transfer all or a portion of any such period of 
        ineligibility to such spouse if the spouse becomes an 
        institutionalized individual.''; and
            (6) by amending paragraph (7), as redesignated, to read as 
        follows:
    ``(7) For purposes of this subsection:
            ``(A) The term `assets', with respect to an individual, 
        includes all income and resources of the individual and of the 
        individual's spouse, including any income or resources which 
        the individual or such individual's spouse is entitled to but 
        does not receive because of action--
                    ``(i) by the individual or such individual's 
                spouse,
                    ``(ii) by a person, including a court or 
                administrative body, with legal authority to act in 
                place of or on behalf of the individual or such 
                individual's spouse, or
                    ``(iii) by any person, including any court or 
                administrative body, acting at the direction or upon 
                the request of the individual or such individual's 
                spouse.
            ``(B) The term `income' has the meaning given such term in 
        section 1612.
            ``(C) The term `resources' has the meaning given such term 
        in section 1613, without regard (in the case of an 
        institutionalized individual) to the exclusion described in 
        subsection (a)(1) of such section.
            ``(D) The term `institutionalized individual' means, and 
        the term `individual is institutionalized' refers to, an 
        individual receiving any of the services specified in paragraph 
        (1)(A).''.
    (b) Conforming Amendments.--(1) Section 1902(a)(51) (42 U.S.C. 
1396a(a)(51)) is amended--
            (A) by striking ``(A)''; and
            (B) by striking ``, and (B)'' and all that follows and 
        inserting a semicolon.
    (2) Section 1924(f)(1) (42 U.S.C. 1396r-5(f)(1)) is amended by 
striking ``transfer an amount'' and inserting ``transfer an amount 
sufficient to make the resources of the community spouse''.
    (c) Requirements for Nursing Facilities.--
            (1) Medicaid program.--Section 1919(c)(5)(A)(i) (42 U.S.C. 
        1396r(c)(5)(A)(i)) is amended by striking ``and (III)'' and 
        inserting ``(III) not require individuals applying to reside or 
        residing in the facility, or family members of such 
        individuals, to provide any financial information other than to 
        identify the source of payment for such individual's stay in 
        the facility, and (IV)''.
            (2) Medicare program.--Section 1819(c)(5)(A)(i) (42 U.S.C. 
        1395i-3(c)(5)(A)(i)) is amended by striking ``and (III)'' and 
        inserting ``(III) not require individuals applying to reside or 
        residing in the facility, or family members of such 
        individuals, to provide any financial information other than to 
        identify the source of payment for such individual's stay in 
        the facility, and (IV)''.
    (d) Effective Date.--(1)(A) Except as provided in subparagraph (B), 
the amendments made by this section shall apply to calendar quarters 
beginning on or after October 1, 1993.
    (B) In the case of a State plan for medical assistance under title 
XIX of the Social Security Act which the Secretary of Health and Human 
Services determines requires State legislation (other than legislation 
appropriating funds) in order for the plan to meet the additional 
requirements imposed by the amendments made by this section, the State 
plan shall not be regarded as failing to comply with the requirements 
imposed by such amendments solely on the basis of its failure to meet 
these additional requirements before the first day of the first 
calendar quarter beginning after the close of the first regular session 
of the State legislature that begins after the date of the enactment of 
this Act. For purposes of the preceding sentence, in the case of a 
State that has a 2-year legislative session, each year of such session 
shall be deemed to be a separate regular session of the State 
legislature.
    (2) The amendments made by this section shall not apply with 
respect to assets disposed of before the date which is 60 days after 
the date of the enactment of this Act.

SEC. 7423. TREATMENT OF CERTAIN TRUSTS.

    (a) In General.--Section 1917 (42 U.S.C. 1396p) is amended by 
adding at the end the following:
    ``(d)(1) For purposes of determining an individual's eligibility 
for, or amount of, benefits under a State plan under this title, the 
following rules shall apply to a trust established by such individual:
            ``(A) In the case of a revocable trust--
                    ``(i) the corpus of the trust shall be considered 
                resources available to the individual,
                    ``(ii) payments from the trust to or for the 
                benefit of the individual shall be considered income of 
                the individual, and
                    ``(iii) any other payments from the trust shall be 
                considered a transfer of assets by the individual 
                subject to subsection (c).
            ``(B) In the case of an irrevocable trust--
                    ``(i) the portion of the corpus from which, or the 
                income on the corpus from which, payment to the 
                individual could be made shall be considered resources 
                available to the individual, and payments from that 
                portion of the corpus or income--
                            ``(I) to or for the benefit of the 
                        individual, shall be considered income of the 
                        individual, and
                            ``(II) for any other purpose, shall be 
                        considered a transfer of assets by the 
                        individual subject to subsection (c); and
                    ``(ii) any portion of the trust from which, or any 
                income on the corpus from which, no payment could under 
                any circumstances be made to the individual shall be 
                considered, as of the date of establishment of the 
                trust (or, if later, the date on which payment to the 
                individual was foreclosed) a transfer of assets by the 
                individual subject to subsection (c), and payments from 
                such portion of the trust after such date shall be 
                disregarded.
    ``(2)(A) For purposes of this subsection, an individual shall be 
considered to have established a trust if--
            ``(i) any of the following individuals established such 
        trust other than by will:
                    ``(I) the individual,
                    ``(II) the individual's spouse,
                    ``(III) a person, including a court or 
                administrative body, with legal authority to act in 
                place of or on behalf of the individual or the 
                individual's spouse, or
                    ``(IV) a person, including any court or 
                administrative body, acting at the direction or upon 
                the request of the individual or the individual's 
                spouse; and
            ``(ii) assets of the individual were used to form all or 
        part of the corpus of the trust.
    ``(B) In the case of a trust the corpus of which includes assets of 
an individual (as determined under subparagraph (A)) and assets of any 
other person or persons, the provisions of this subsection shall apply 
to the portion of the trust attributable to the assets of the 
individual.
    ``(3) This subsection shall apply without regard to--
            ``(A) the purposes for which a trust is established,
            ``(B) whether the trustees have or exercise any discretion 
        under the trust,
            ``(C) any restrictions on when or whether distributions may 
        be made from the trust, or
            ``(D) any restrictions on the use of distributions from the 
        trust.
    ``(4)(A) This subsection shall not apply to any of the following 
trusts:
            ``(i) A trust containing the assets of a disabled 
        individual (as determined under section 1614(a)(3)) established 
        for the benefit of such individual by a parent, grandparent, 
        legal guardian of the individual, or a court if the State will 
        receive all amounts remaining in the trust upon the death of 
        such individual up to an amount equal to the total medical 
        assistance received by the individual under a State plan under 
        this title.
            ``(ii) A trust established in a State for the benefit of an 
        individual if--
                    ``(I) the trust is composed only of pension, Social 
                Security, and other income to the individual (and 
                accumulated income in the trust),
                    ``(II) the State will receive all amounts remaining 
                in the trust upon the death of such individual up to an 
                amount equal to the total medical assistance received 
                by the individual under a State plan under this title, 
                and
                    ``(III) the State makes medical assistance 
                available to individuals described in section 
                1902(a)(10)(A)(ii)(V), but does not make such 
                assistance available to individuals for nursing 
                facility services under section 1902(a)(10)(C).
    ``(B) For purposes of this subsection, the term `trust' includes 
any legal instrument or device that is similar to a trust but includes 
an annuity only to such extent and in such manner as the Secretary 
specifies.
    ``(C) The State agency shall establish procedures (in accordance 
with standards specified by the Secretary) under which the agency 
waives the application of this subsection with respect to an individual 
if the individual establishes that such application would work an undue 
hardship on the individual as determined on the basis of criteria 
established by the Secretary.
    ``(5) For purposes of this subsection, the terms `assets', 
`income', and `resources' shall have the meaning given to such terms 
under subsection (c)(7).''.
    (b) Conforming Amendments.--(1) Section 1902(a)(18) (42 U.S.C. 
1396a(a)(18)) is amended by striking ``and transfers of assets'' and 
inserting ``, transfers of assets, and treatment of certain trusts''.
    (2) Section 1902 (42 U.S.C. 1396a) is amended by repealing 
subsection (k).
    (c) Effective Date.--(1)(A) Except as provided in subparagraph (B), 
the amendments made by this section shall apply to payments under title 
XIX of the Social Security Act for calendar quarters beginning on or 
after October 1, 1993.
    (B) In the case of a State plan for medical assistance under title 
XIX of the Social Security Act which the Secretary of Health and Human 
Services determines requires State legislation (other than legislation 
appropriating funds) in order for the plan to meet the additional 
requirements imposed by the amendments made by this section, the State 
plan shall not be regarded as failing to comply with the requirements 
imposed by such amendments solely on the basis of its failure to meet 
these additional requirements before the first day of the first 
calendar quarter beginning after the close of the first regular session 
of the State legislature that begins after the date of the enactment of 
this Act. For purposes of the preceding sentence, in the case of a 
State that has a 2-year legislative session, each year of such session 
shall be deemed to be a separate regular session of the State 
legislature.
    (2) The amendments made by this section shall not apply with 
respect to trusts established before the date which is 60 days after 
the date of the enactment of this Act.

Subpart D--Improvement in Identification and Collection of Third Party 
                                Payments

SEC. 7431. LIABILITY OF THIRD PARTIES TO PAY FOR CARE AND SERVICES.

    (a) Liability of ERISA Plans.--(1) Section 1902(a)(25)(A) (42 
U.S.C. 1396a(a)(25)(A)) is amended by striking ``insurers)'' and 
inserting ``insurers, group health plans (as defined in section 607(1) 
of the Employee Retirement Income Security Act of 1974), service 
benefit plans, and health maintenance organizations)''.
    (2) Section 1903(o) (42 U.S.C. 1396b(o)) is amended by striking 
``regulation)'' and inserting ``regulation and including a group health 
plan (as defined in section 607(1) of the Employee Retirement Income 
Security Act of 1974)), a service benefit plan, and a health 
maintenance organization''.
    (b) Requiring State To Prohibit Insurers From Taking Medicaid 
Status Into Account.--Section 1902(a)(25) (42 U.S.C. 1396a(a)(25)) is 
amended--
            (1) by striking ``and'' at the end of subparagraph (F);
            (2) by adding ``and'' at the end of subparagraph (G); and
            (3) by adding after subparagraph (G) the following new 
        subparagraph:
                    ``(H) assurances satisfactory to the Secretary that 
                the State has in effect laws which prohibit any health 
                insurer (including a group health plan, as defined in 
                section 607(1) of the Employee Retirement Income 
                Security Act of 1974, a service benefit plan, and a 
                health maintenance organization), in enrolling an 
                individual or in making any payments for benefits to 
                the individual or on the individual's behalf, from 
                taking into account that the individual is eligible for 
                or is provided medical assistance under a plan under 
                this title for such State, or any other State;''.
    (c) State Right to Third Party Payments for Recipient.--Section 
1902(a)(25) (42 U.S.C. 1396a(a)(25)), as amended by subsection (b), is 
amended--
            (1) by striking ``and'' at the end of subparagraph (G);
            (2) by adding ``and'' at the end of subparagraph (H); and
            (3) by adding after subparagraph (H) the following new 
        subparagraph:
                    ``(I) assurances satisfactory to the Secretary that 
                the State has in effect laws under which, to the extent 
                that payment has been made under the State plan for 
                medical assistance for health care items or services 
                furnished to an individual, the State is considered to 
                have acquired the rights of such individual to payment 
                by any other party for such health care items or 
                services;''.
    (d) Effective Date.--(1) Except as provided in paragraph (2), the 
amendments made by subsections (a)(1), (b), and (c) shall apply to 
calendar quarters beginning on or after October 1, 1993, without regard 
to whether or not final regulations to carry out such amendments have 
been promulgated by such date.
    (2) In the case of a State plan for medical assistance under title 
XIX of the Social Security Act which the Secretary of Health and Human 
Services determines requires State legislation (other than legislation 
appropriating funds) in order for the plan to meet the additional 
requirements imposed by the amendments made by subsections (a) and (b), 
the State plan shall not be regarded as failing to comply with the 
requirements of such title solely on the basis of its failure to meet 
these additional requirements before the first day of the first 
calendar quarter beginning after the close of the first regular session 
of the State legislature that begins after the date of the enactment of 
this Act. For purposes of the preceding sentence, in the case of a 
State that has a 2-year legislative session, each year of such session 
shall be deemed to be a separate regular session of the State 
legislature.
    (3) The amendment made by subsection (a)(2) shall apply to items 
and services furnished on or after October 1, 1993.

SEC. 7432. MEDICAL CHILD SUPPORT.

    (a) State Plan Requirement.--Section 1902(a) (42 U.S.C. 1396a(a)), 
as amended by subsection (c), is amended--
            (1) by striking ``and'' at the end of paragraph (58);
            (2) by striking the period at the end of paragraph (59) and 
        inserting ``; and''; and
            (3) by adding at the end the following new paragraph:
            ``(60) provide that the State agency shall provide 
        assurances satisfactory to the Secretary that the State has in 
        effect the laws relating to medical child support required 
        under section 1908.''.
    (b) Medical Child Support Laws.--Title XIX (42 U.S.C 1936 et seq.) 
is amended by inserting after section 1907 the following new section:

           ``required laws relating to medical child support

    ``Sec. 1908. (a) In General.--The laws relating to medical child 
support, which a State is required to have in effect under section 
1902(a)(60), are as follows:
            ``(1) A law that prohibits an insurer from denying 
        enrollment of a child under the health coverage of the child's 
        parent on the ground that--
                    ``(A) the child was born out of wedlock,
                    ``(B) the child is not claimed as a dependent on 
                the parent's Federal income tax return, or
                    ``(C) the child does not reside with the parent or 
                in the insurer's service area.
            ``(2) In any case in which a parent is required by a court 
        or administrative order to provide health coverage for a child 
        and the parent is eligible for family health coverage through 
        an insurer, a law that requires such insurer--
                    ``(A) to permit such parent to enroll under such 
                family coverage any such child who is otherwise 
                eligible for such coverage (without regard to any 
                enrollment season restrictions and subject to the 
                requirements under paragraph (1)); and
                    ``(B) if such a parent fails to provide such health 
                insurance coverage for any such child, to enroll such 
                child under such family coverage upon application by 
                the child's other parent or by the State agency 
                administering the program under this title or part D of 
                title IV.
            ``(3) In any case in which a parent is required by a court 
        or administrative order to provide health coverage for a child 
        and the parent is eligible for family health coverage through 
        an employer doing business in the State, a law that requires 
        such employer--
                    ``(A) to permit such parent to enroll under such 
                family coverage any such child who is otherwise 
                eligible for such coverage (without regard to any 
                enrollment season restrictions and subject to the 
                requirements under paragraph (1));
                    ``(B) if such a parent fails to provide such health 
                insurance coverage for a child, to enroll such child 
                under such family coverage upon application by the 
                child's other parent or by the State agency 
                administering the program under this title or part D of 
                title IV;
                    ``(C) not to disenroll (or eliminate coverage of) 
                any such child unless the employer is provided 
                satisfactory written evidence that--
                            ``(i) such court or administrative order is 
                        no longer in effect, or
                            ``(ii) the child is or will be enrolled in 
                        comparable health coverage which will take 
                        effect not later than the effective date of 
                        such disenrollment; and
                    ``(D) to withhold from such employee's compensation 
                the employee's share (if any) of premiums for health 
                coverage and to pay such share of premiums to the 
                insurer.
            ``(4) A law that prohibits an insurer from imposing 
        requirements on a State agency, which has been assigned the 
        rights of an individual eligible for medical assistance under 
        this title and covered for health benefits from the insurer, 
        that are different from requirements applicable to an agent or 
        assignee of any other individual so covered.
            ``(5) A law that requires an insurer, in any case in which 
        a child has health coverage through the insurer of a 
        noncustodial parent--
                    ``(A) to provide such information to the custodial 
                parent as may be necessary for the child to obtain 
                benefits through such coverage;
                    ``(B) to permit the custodial parent (or provider, 
                with the custodial parent's approval) to submit claims 
                for covered services without the approval of the 
                noncustodial parent; and
                    ``(C) to make payment on claims submitted in 
                accordance with subparagraph (B) directly to such 
                custodial parent, the provider, or the State agency.
            ``(6) A law that permits the State agency under this title 
        to garnish the wages, salary, or other employment income of, 
        and requires withholding amounts from State tax refunds to, any 
        person who--
                    ``(A) is required by court or administrative order 
                to provide coverage of the costs of health services to 
                a child who is eligible for medical assistance under 
                this title,
                    ``(B) has received payment from a third party for 
                the costs of such services to such child, but
                    ``(C) has not used such payments to reimburse, as 
                appropriate, either the other parent or guardian of 
                such child or the provider of such services,
        to the extent necessary to reimburse the State agency for 
        expenditures for such costs under its plan under this title, 
        but any claims for current or past-due child support shall take 
        priority over any such claims for the costs of such services.
    ``(b) Special Rule.--The Secretary may provide by regulation for 
such exceptions to the requirement under subsection (a)(3) as the 
Secretary determines necessary to ensure compliance with the conditions 
of any order referred to in such subsection or with the maximum amounts 
permitted to be withheld under section 303(b) of the Consumer Credit 
Protection Act.
    ``(c) Definition.--For purposes of this subsection, the term 
`insurer' includes a group health plan, as defined in section 607(1) of 
the Employee Retirement Income Security Act of 1974, a health 
maintenance organization, and an entity offering a service benefit 
plan.''.
    (c) Redesignations to Paragraphs Added by OBRA-1990.--Section 
1902(a) (42 U.S.C. 1396a(a)) is amended--
            (1) by striking ``and'' at the end of paragraph (54);
            (2) in the paragraph (55) inserted by section 4602(a)(3) of 
        OBRA-1990, by striking the period at the end and inserting a 
        semicolon;
            (3) by redesignating the paragraph (55) inserted by section 
        4604(b)(3) of OBRA-1990 as paragraph (56), by transferring and 
        inserting it after the paragraph (55) inserted by section 
        4602(a)(3) of such Act, and by striking the period at the end 
        and inserting a semicolon;
            (4) by placing paragraphs (57) and (58), inserted by 
        section 4751(a)(1)(C) of OBRA-1990, immediately after paragraph 
        (56), as redesignated by paragraph (3);
            (5) in the paragraph (58) inserted by section 4751(a)(1)(C) 
        of OBRA-1990, by striking the period at the end and inserting 
        ``; and''; and
            (6) by redesignating the paragraph (58) inserted by section 
        4752(c)(1)(C) of OBRA-1990 as paragraph (59) and by 
        transferring and inserting it after the paragraph (58) inserted 
        by section 4751(a)(1)(C) of such Act.
    (d) Effective Date.--(1) Except as provided in paragraph (2), the 
amendments made by this section apply to calendar quarters beginning on 
or after April 1, 1994.
    (2) In the case of a State plan under title XIX of the Social 
Security Act which the Secretary of Health and Human Services 
determines requires State legislation in order for the plan to meet the 
additional requirements imposed by the amendments made by this section, 
the State plan shall not be regarded as failing to comply with the 
requirements of such title solely on the basis of its failure to meet 
these additional requirements before the first day of the first 
calendar quarter beginning after the close of the first regular session 
of the State legislature that begins after the date of enactment of 
this Act. For purposes of the preceding sentence, in the case of a 
State that has a 2-year legislative session, each year of such session 
shall be deemed to be a separate regular session of the State 
legislature.

SEC. 7433. OFFSET OF PAYMENT OBLIGATIONS RELATING TO MEDICAL ASSISTANCE 
              AGAINST OVERPAYMENTS OF STATE AND FEDERAL INCOME TAXES.

    (a) Amendments to the Internal Revenue Code of 1986.--
            (1) In general.--Section 6402 of the Internal Revenue Code 
        of 1986 is amended--
                    (A) by redesignating subsections (e), (f), (g), 
                (h), and (i) as subsections (f), (g), (h), (i), and 
                (j), respectively; and
                    (B) by adding after subsection (d) the following 
                new subsection:
    ``(e) Collection of Certain Debts Owed to States.--
            ``(1) In general.--Upon receiving notice from any State 
        under section 1931(b)(1) of the Social Security Act that a 
        named person owes a legally enforceable debt for any payment 
        obligation relating to medical assistance, the Secretary 
        shall--
                    ``(A) reduce the amount of any overpayment payable 
                to such person by the amount of such debt;
                    ``(B) pay the amount by which such overpayment is 
                reduced under subparagraph (A) to such State; and
                    ``(C) notify the person making such overpayment 
                that such overpayment has been reduced by an amount 
                necessary to satisfy such debt.
            ``(2) Priorities for offset.--Any overpayment by a person 
        shall be reduced pursuant to this subsection after such 
        overpayment is reduced pursuant to subsections (c) and (d) and 
        before such overpayment is credited to the future liability for 
        tax of such person pursuant to subsection (b). Any overpayment 
        by a person shall be applied against any debts described in 
        paragraph (1) in the order in which such debts accrued.
            ``(3) Notice; protection of other persons filing joint 
        return.--For purposes of this subsection, rules similar to the 
        rules described in clause (i) and the first sentence of clause 
        (ii) of subsection (d)(3)(B) shall apply.
            ``(4) Definition.--For purposes of this subsection, the 
        term `medical assistance' means medical assistance provided 
        under title XIX of the Social Security Act.''.
            (2) Conforming amendment.--Section 6402(f) of the Internal 
        Revenue Code of 1986, as redesignated, is amended by striking 
        ``(c) or (d)'' and inserting ``(c), (d), or (e)''.
            (3) Effective date.--The amendments made by this subsection 
        shall be effective for taxable years beginning after December 
        31, 1993.
    (b) Amendments to the Social Security Act.--
            (1) State plan amendment.--Section 1902(a) (42 U.S.C. 
        1396a(a)), as amended by section 7432, is amended--
                    (A) by striking ``and'' at the end of paragraph 
                (59);
                    (B) by striking the period at the end of paragraph 
                (60) and inserting ``; and''; and
                    (C) by adding at the end the following new 
                paragraph:
            ``(61) provide that recovery of any legally enforceable 
        debt for any payment obligation relating to medical assistance 
        provided under this title shall be made in accordance with a 
        program for the collection of such debt from State and Federal 
        tax refunds in accordance with section 1931.''.
            (2) Program for collections from state and federal tax 
        refunds.--Title XIX (42 U.S.C 1936 et seq.) is amended by 
        adding at the end the following new section:

``collection of payment obligations relating to medical assistance from 
                     state and federal tax refunds

    ``Sec. 1931. (a) State Tax Refunds.--If a State with a State plan 
approved under this title has a State income tax system, such State 
shall require the State agency administering the State plan and the 
State agency responsible for administering the States income tax system 
to develop and implement a program under which any person determined 
appropriate by the State agency administering the State plan who owes a 
legally enforceable debt for any payment obligation relating to medical 
assistance provided under this title will have withheld an appropriate 
amount from any refund otherwise payable to such person under the State 
income tax system.
    ``(b) Federal Tax Refunds.--
            ``(1) Notice to the secretary of the treasury.--
                    ``(A) In general.--If a State with a State plan 
                approved under this title--
                            ``(i) implements a program described in 
                        subsection (a), or
                            ``(ii) is a State that does not have a 
                        State income tax system,
                the State agency administering such plan may provide a 
                notice to the Secretary of the Treasury regarding any 
                person determined appropriate by such State agency who 
                owes a legally enforceable debt for any payment 
                obligation relating to medical assistance provided 
                under this title and the Secretary of the Treasury 
                shall withhold an appropriate amount from any refund 
                otherwise payable to such person in accordance with 
                section 6402(e) of the Internal Revenue Code of 1986 
                (hereafter in this section referred to as the `Code').
                    ``(B) Regulations relating to notices.--The 
                Secretary of the Treasury shall issue regulations, 
                after consultation with the Secretary, which--
                            ``(i) prescribe the timing by which State 
                        agencies may submit notices of payment 
                        obligations relating to medical assistance,
                            ``(ii) specify the manner in which such 
                        notices must be submitted,
                            ``(iii) specify the necessary information 
                        that must be contained in or accompany such 
                        notices,
                            ``(iv) specify the minimum payment 
                        obligation relating to medical assistance to 
                        which the offset procedures may be applied,
                            ``(v) specify the fee that a State must pay 
                        to reimburse the Secretary of the Treasury for 
                        the full cost of applying the offset procedure, 
                        and
                            ``(vi) provide that the Secretary of the 
                        Treasury will advise the Secretary, not less 
                        frequently than annually, of the States which 
                        have furnished notices under this subsection, 
                        the number of cases in each State with respect 
                        to which such notices have been furnished, the 
                        total amount of payment obligations sought to 
                        be collected under this subsection by each 
                        State, and the amount of such collections 
                        actually made in the case of each State.
            ``(2) Notice.--Prior to notifying the Secretary of the 
        Treasury under paragraph (1), the State agency shall send a 
        notice to the person owing the legally enforceable debt for a 
        payment obligation relating to medical assistance provided 
        under this title which--
                    ``(A) explains that a withholding may be made under 
                6402(e) of the Code from any refund otherwise payable 
                to such person,
                    ``(B) instructs the person having the payment 
                obligation of the steps which may be taken to contest 
                the State's determination that such payment obligation 
                is owed or the amount of the payment obligation, and
                    ``(C) provides information with respect to 
                procedures to be followed, in the case of a joint 
                return, to protect the share of the refund which may be 
                payable to another person.
            ``(3) Excess withholding.--In any case in which an amount 
        was withheld under section 6402(e) of the Code and the State 
        subsequently determines that the amount certified as owing with 
        respect to medical assistance was in excess of the amount 
        actually owed at the time the amount withheld is distributed to 
        the State, the State shall pay the excess amount withheld to 
        the named person determined to have the payment obligation (or, 
        in the case of amounts withheld on the basis of a joint return, 
        jointly to the parties filing such return).''.
            (3) Effective date.--
                    (A) In general.--The amendments made by this 
                paragraph shall apply to calendar quarters beginning on 
                or after December 31, 1993.
                    (B) Special rule.--In the case of a State which the 
                Secretary determines requires State legislation (other 
                than legislation authorizing or appropriating funds) in 
                order to comply with the amendments made by 
                subparagraph (A), the State shall not be regarded as 
                failing to comply with such amendments solely on the 
                basis of its failure to meet the requirements of such 
                amendments before the first day of the first calendar 
                quarter beginning after the close of the first regular 
                session of the State legislature that begins after the 
                date of the enactment of this Act. For purposes of the 
                preceding sentence, in the case of a State that has a 
                2-year legislative session, each year of such session 
                shall be deemed to be a separate regular session of the 
                State legislature.

Subpart E--Assuring Proper Payments to Disproportionate Share Hospitals

SEC. 7441. ASSURING PROPER PAYMENTS TO DISPROPORTIONATE SHARE 
              HOSPITALS.

    (a) Disproportionate Share Hospitals Required To Provide Minimum 
Level of Services to Medicaid Patients.--Section 1923 (42 U.S.C. 1396r-
4) is amended--
            (1) in subsection (a)(1)(A), by striking ``requirement'' 
        and inserting ``requirements'';
            (2) in subsection (b)(1), by striking ``requirement'' and 
        inserting ``requirements'';
            (3) in the heading to subsection (d), by striking 
        ``Requirement'' and inserting ``Requirements'';
            (4) by adding at the end of subsection (d) the following 
        new paragraph:
            ``(3) No hospital may be defined or deemed as a 
        disproportionate share hospital under a State plan under this 
        title or under subsection (b) or (e) of this section unless the 
        hospital has a medicaid inpatient utilization rate (as defined 
        in subsection (b)(2)) of not less than 1 percent.'';
            (5) in subsection (e)(1)--
                    (A) by striking ``and'' before ``(B)'', and
                    (B) by inserting before the period at the end the 
                following: ``, and (C) the plan meets the requirement 
                of subsection (d)(3) and such payment adjustments are 
                made consistent with the fourth sentence of subsection 
                (c)''; and
            (6) in subsection (e)(2)--
                    (A) in subparagraph (A), by inserting ``(other than 
                the fourth sentence of subsection (c))'' after ``(c)'',
                    (B) by striking ``and'' at the end of subparagraph 
                (A),
                    (C) by striking the period at the end of 
                subparagraph (B) and inserting ``, and'', and
                    (D) by adding at the end the following new 
                subparagraph:
            ``(C) subsection (d)(3) shall apply.''.
    (b) Limiting Amount of Payment Adjustments for State or County 
Hospitals to Uncovered Costs.--Subsection (c) of section 1923 (42 
U.S.C. 1396r-4) is amended by adding at the end the following: ``A 
payment adjustment during a year is not considered to be consistent 
with this subsection with respect to a hospital owned or operated by a 
State (or by an instrumentality of, or a unit of government within, a 
State) if the payment adjustment exceeds the costs incurred during the 
year of furnishing hospital services (as determined by the Secretary 
and net of payments under this title, other than under this section, 
and by uninsured patients) by the hospital to individuals who either 
are eligible for medical assistance under the State plan or have no 
health insurance (or other source of third party coverage) for services 
provided during the year. For purposes of the preceding sentence, 
payments made to a hospital for services provided to indigent patients 
made by a State or a unit of local government within a State shall not 
be considered to be a source of third party payment.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to payments to States under section 1903(a) of the Social 
Security Act which are for payments to hospitals made under State plans 
after the end of the State fiscal year that ends during 1995.

               Subpart F--Anti-Fraud and Abuse Provisions

SEC. 7451. APPLICATION OF MEDICARE RULES LIMITING CERTAIN PHYSICIAN 
              REFERRALS.

    (a) In General.--Section 1903(i) (42 U.S.C. 1396b(i)), as amended 
by subsection (b), is amended--
            (1) in paragraph (12), by striking ``or'' at the end,
            (2) in paragraph (13), by striking the period at the end 
        and inserting ``; or'', and
            (3) by inserting after paragraph (13) the following new 
        paragraph:
            ``(14) with respect to any amount expended for an item or 
        service for which payment would be denied under section 
        1877(g)(1) if the item or service were furnished to an 
        individual entitled to benefits under title XVIII.''.
    (b) Redesignations.--Section 1903(i) (42 U.S.C. 1396b(i)), as 
amended by section 2(b)(2) of the Medicaid Voluntary Contribution and 
Provider-Specific Tax Amendments of 1991, is amended--
            (1) by redesignating the paragraph (12) inserted by section 
        4752(a)(2) of OBRA-1990 as paragraph (11), by transferring and 
        inserting it after the paragraph (10) inserted by section 
        4401(a)(1)(B) of OBRA-1990, and by striking the period at the 
        end and inserting a semicolon;
            (2) by redesignating the paragraph (14) inserted by section 
        4752(e) of OBRA-1990 as paragraph (12), by transferring and 
        inserting it after paragraph (11), as redesignated by paragraph 
        (2), and by striking the period at the end and inserting ``; 
        or''; and
            (3) by redesignating the paragraph (11) inserted by section 
        4801(e)(16)(A) of OBRA-1990 as paragraph (13) and by 
        transferring and inserting it after paragraph (12), as 
        redesignated by paragraph (3), and by striking ``; or'' and 
        inserting a period.
    (c) Effective Date.--The amendment made by subsection (a) shall 
apply to items and services furnished on or after October 1, 1993.

                   PART II--OTHER MEDICAID PROVISIONS

SEC. 7501. EXTENSION OF DEMONSTRATION PROJECT ON THE EFFECT OF ALLOWING 
              STATES TO EXTEND MEDICAID COVERAGE TO CERTAIN LOW-INCOME 
              FAMILIES.

    (a) In General.--Section 4745 of OBRA-1990 is amended--
            (1) in paragraph (1) of subsection (e), by striking 
        ``$12,000,000 in each of fiscal years 1991, 1992, and 1993, and 
        to no more than $4,000,000 in fiscal year 1994'' and inserting 
        ``$40,000,000''; and
            (2) in paragraph (2) of subsection (f) by striking 
        ``January 1, 1995'' and inserting ``one year after the 
        termination of the projects''.
    (b) Effective Date.--The amendments made by paragraph (1) shall 
take effect as if included in the enactment of OBRA-1990.

                  Subtitle C--Income Security Programs

SEC. 7601. MATCHING OF STATE ADMINISTRATIVE COSTS.

    (a) AFDC Matching.--Section 403(a)(3) (42 U.S.C. 603(a)(3)) is 
amended to read as follows:
            ``(3) in the case of any State, 50 percent of the total 
        amounts expended during such quarter as found necessary by the 
        Secretary for the proper and efficient administration of the 
        State plan, except that no payment shall be made with respect 
        to amounts expended in connection with the provision of any 
        service described in section 2002(a) of this Act other than 
        services furnished pursuant to section 402(g); and''.
    (b) Territorial Programs for Aged, Blind, and Disabled.--Sections 
3(a)(4), 1003(a)(3), 1403(a)(3), and 1603(a)(4) (42 U.S.C. 303(a)(3), 
1203(a)(3), 1353(a)(3), and 1383 note) (as in effect as provided by 
section 303 of the Social Security Amendments of 1972) are each amended 
by striking ``the sum of'' and all that follows and inserting ``50 
percent of the total amounts expended during such quarter as found 
necessary by the Secretary for the proper and efficient administration 
of the State plan.''.
    (c) Requirements for Attesting to Citizenship Status.--Paragraph 
(1)(A) of section 1137(d) (42 U.S.C. 1320b-7(d)) is amended to read as 
follows:
            ``(1)(A) The State shall require, as a condition of an 
        individual's eligibility for benefits under a program listed in 
        subsection (b), a declaration in writing, under penalty of 
        perjury--
                    ``(i) by the individual,
                    ``(ii) in the case in which eligibility for program 
                benefits is determined on a family or household basis, 
                by any adult member of such individual's family or 
                household (as applicable), or
                    ``(iii) in the case of an individual born into a 
                family or household receiving benefits under such 
                program, by any adult member of such family or 
                household no later than the next redetermination of 
                eligibility of such family or household following the 
                birth of such individual,
        stating whether the individual is a citizen or national of the 
        United States, and, if that individual is not a citizen or 
        national of the United States, that the individual is in a 
        satisfactory immigration status.''.
    (d) Effective Dates.--
            (1) In general.--Except as provided in paragraph (2), the 
        amendments made by--
                    (A) subsections (a) and (b) shall be effective with 
                respect to calendar quarters beginning on or after 
                April 1, 1994, and
                    (B) subsection (c) shall be effective on and after 
                the date of the enactment of this Act.
            (2) Special rule.--In the case of a State whose legislature 
        meets biennially, and does not have a regular session scheduled 
        in calendar year 1994, the amendments made by subsections (a) 
        and (b) shall be effective no later than the first day of the 
        first calendar quarter beginning after the close of the first 
        regular session of the State legislature that begins after the 
        date of enactment of this Act.

SEC. 7602. STATE PATERNITY ESTABLISHMENT PROGRAMS.

    (a) Performance Standards for State Paternity Establishment 
Programs.--Section 452(g) (42 U.S.C. 652(g)) is amended--
            (1) in paragraph (1)--
                    (A) by striking ``1991'' and inserting ``1994'';
                    (B) by inserting ``is based on reliable data and'' 
                before ``equals or exceeds''; and
                    (C) by striking subparagraphs (A), (B), and (C) and 
                inserting the following new subparagraphs:
                    ``(A) 75 percent;
                    ``(B) for a State with a paternity establishment 
                percentage of not less than 50 percent but less than 75 
                percent for such fiscal year, the paternity 
                establishment percentage of the State for the 
                immediately preceding fiscal year plus 3 percentage 
                points; or
                    ``(C) for a State with a paternity establishment 
                percentage of less than 50 percent for such fiscal 
                year, the paternity establishment percentage of the 
                State for the immediately preceding fiscal year plus 6 
                percentage points.''; and
            (2) in paragraph (2)--
                    (A) by striking ``(or under all such plans)'' each 
                place it appears;
                    (B) by inserting ``or part (E)'' after ``under part 
                A'' each place it appears;
                    (C) by striking subparagraph (B) and inserting the 
                following new subparagraph:
                    ``(B) the term `reliable data' means the most 
                recent data available which are found by the Secretary 
                to be reliable for purposes of this section.'';
                    (D) by inserting ``unless paternity is established 
                for such child'' after ``the death of a parent''; and
                    (E) by inserting ``or any child with respect to 
                whom the State agency administering the plan under part 
                E determines (as provided in section 454(4)(B)) that it 
                is against the best interest of such child to do so'' 
                after ``cooperate under section 402(a)(26)''.
    (b) State Plan Requirements for the Establishment of Paternity.--
Section 466(a) (42 U.S.C. 666(a)) is amended--
            (1) in paragraph (2)--
                    (A) by striking ``at the option of the State,''; 
                and
                    (B) by inserting ``or paternity establishment'' 
                after ``support order issuance and enforcement'';
            (2) in paragraph (5) by adding at the end the following new 
        subparagraphs:
                    ``(C) Procedures for a simple civil process for 
                voluntarily acknowledging paternity under which the 
                State must provide that the rights and responsibilities 
                of acknowledging paternity are explained and ensure 
                that due process safeguards are afforded. Such 
                procedures must include (i) a hospital-based program 
                for the voluntary acknowledgment of paternity during 
                the period immediately preceding or following the birth 
                of a child, and (ii) the inclusion of signature lines 
                on applications for official birth certificates which, 
                once signed by the father and the mother, constitute a 
                voluntary acknowledgment of paternity.
                    ``(D) Procedures under which the voluntary 
                acknowledgment of paternity creates a rebuttable, or at 
                the option of the State, conclusive presumption of 
                paternity, and under which such voluntary 
                acknowledgment is admissible as evidence of paternity.
                    ``(E) Procedures under which the voluntary 
                acknowledgment of paternity must be recognized as a 
                basis for seeking a support order without first 
                requiring any further proceedings to establish 
                paternity.
                    ``(F) Procedures which provide that (i) any 
                objection to genetic testing results must be made in 
                writing within a specified number of days before any 
                hearing at which such results may be introduced into 
                evidence, and (ii) if no objection is made, the test 
                results are admissible as evidence of paternity without 
                the need for foundation testimony or other proof of 
                authenticity or accuracy.
                    ``(G) Procedures which create a rebuttable or, at 
                the option of the State, conclusive presumption of 
                paternity upon genetic testing results indicating a 
                threshold probability of the alleged father being the 
                father of the child.
                    ``(H) Procedures requiring a default order to be 
                entered in a paternity case upon a showing of service 
                of process on the defendent and any additional showing 
                required by State law.''; and
            (3) by inserting after paragraph (10) the following new 
        paragraph:
            ``(11) Procedures under which a State must give full faith 
        and credit to a determination of paternity made by any other 
        State, whether established through voluntary acknowledgment or 
        through administrative or judicial processes.''.
    (c) Effective Date.--The amendments made by this section shall 
become effective with respect to a State on the later of--
            (1) October 1, 1993 or,
            (2) the date of enactment by the legislature of such State 
        of all laws required by such amendments,
but in no event later than the first day of the first calendar quarter 
beginning after the close of the first regular session of the State 
legislature that begins after the date of enactment of this Act. For 
purposes of the previous sentence, in the case of a State that has a 2-
year legislative session, each year of such session shall be deemed to 
be a separate regular session of the State legislature.

SEC. 7603. FEES FOR FEDERAL ADMINISTRATION OF STATE SUPPLEMENTARY 
              PAYMENTS.

    (a) In General.--
            (1) Optional state supplementary payments.--Section 1616(d) 
        (42 U.S.C. 1382e(d)) is amended--
                    (A) by inserting ``(1)'' after ``(d)'';
                    (B) by inserting ``, plus an administration fee 
                assessed in accordance with paragraph (2) and any 
                additional services fee charged in accordance with 
                paragraph (3)'' before the period; and
                    (C) by adding after and below the end the 
                following:
    ``(2)(A) The Secretary shall assess each State an administration 
fee in an amount equal to--
            ``(i) the number of supplementary payments made by the 
        Secretary on behalf of the State under this section for any 
        month in a fiscal year; multiplied by
            ``(ii) the applicable rate for the fiscal year.
    ``(B) As used in subparagraph (A), the term `applicable rate' 
means--
            ``(i) for fiscal year 1995, $1.67;
            ``(ii) for fiscal year 1996, $3.33;
            ``(iii) for fiscal year 1997, $5.00; and
            ``(iv) for fiscal year 1998 and each succeeding fiscal 
        year, $5.00, or such different rate as the Secretary determines 
        pursuant to criteria established in regulations is appropriate 
        for the State, taking into account the complexity of the 
        State's supplementary payment program.
    ``(C) All fees collected pursuant to this paragraph shall be 
transferred to the United States at the same time that amounts for such 
supplementary payments are required to be so transferred.
    ``(3)(A) The Secretary shall charge a State an additional services 
fee if, at the request of the State, the Secretary provides additional 
services beyond the level customarily provided, in the administration 
of State supplementary payments pursuant to this section.
    ``(B) The additional services fee shall be in an amount that the 
Secretary determines is necessary to cover all costs (including 
indirect costs) incurred by the Federal Government in furnishing the 
additional services referred to in subparagraph (A).
    ``(C) The additional services fee shall be payable in advance or by 
way of reimbursement.
    ``(4) All administration fees and additional services fees 
collected pursuant to this subsection shall be deposited in the general 
fund of the Treasury of the United States as miscellaneous receipts.''.
            (2) Mandatory state supplementary payments.--Section 
        212(b)(3) of Public Law 93-66 (42 U.S.C. 1382 note) is 
        amended--
                    (A) by inserting ``(A)'' after ``(3)'';
                    (B) by inserting ``, plus an administration fee 
                assessed in accordance with subparagraph (B) and any 
                additional services fee charged in accordance with 
                subparagraph (C)'' before the period; and
                    (C) by adding after and below the end the 
                following:
    ``(B)(i) The Secretary shall assess each State an administration 
fee in an amount equal to--
            ``(I) the number of supplementary payments made by the 
        Secretary on behalf of the State under this subsection for any 
        month in a fiscal year; multiplied by
            ``(II) the applicable rate for the fiscal year.
    ``(ii) As used in clause (i), the term `applicable rate' means--
            ``(I) for fiscal year 1995, $1.67;
            ``(II) for fiscal year 1996, $3.33;
            ``(III) for fiscal year 1997, $5.00; and
            ``(IV) for fiscal year 1998 and each succeeding fiscal 
        year, $5.00, or such different rate as the Secretary determines 
        pursuant to regulations established in regulations is 
        appropriate for the State, taking into account the complexity 
        of the State's supplementary payment program.
    ``(iii) All fees collected pursuant to this subparagraph shall be 
transferred to the United States at the same time that amounts for such 
supplementary payments are required to be so transferred.
    ``(C)(i) The Secretary shall charge a State an additional services 
fee if, at the request of the State, the Secretary provides additional 
services beyond the level customarily provided, in the administration 
of State supplementary payments pursuant to this subsection.
    ``(ii) The additional services fee shall be in an amount that the 
Secretary determines is necessary to cover all costs (including 
indirect costs) incurred by the Federal Government in furnishing the 
additional services referred to in clause (i).
    ``(iii) The additional services fee shall be payable in advance or 
by way of reimbursement.
    ``(D) All administration fees and additional services fees 
collected pursuant to this paragraph shall be deposited in the general 
fund of the Treasury of the United States as miscellaneous receipts.''.
    (b) Effective Date.--The amendments made by this section shall 
apply to supplementary payments made pursuant to section 1616(a) of the 
Social Security Act or section 212(a) of Public Law 93-66 for any 
calendar month beginning after September 30, 1994, and to services 
furnished after such date, regardless of whether regulations to 
implement such amendments have been promulgated by such date, or 
whether any agreement entered into under such section 1616(a) or such 
section 212(a) has been modified.

                  Subtitle D--Miscellaneous Provisions

                        PART I--TRADE PROVISIONS

SEC. 7701. EXTENSION OF AUTHORITY TO LEVY CUSTOMS USER FEES.

    Section 13031(j)(3) of the Consolidated Omnibus Budget 
Reconciliation Act of 1985 (19 U.S.C. 58c(j)(3)) is amended by striking 
out ``1995'' and inserting ``1998''.

SEC. 7702. EXTENSION OF, AND AUTHORIZATION OF APPROPRIATIONS FOR, TRADE 
              ADJUSTMENT ASSISTANCE PROGRAM.

    (a) Extension.--Section 285 of the Trade Act of 1974 (19 U.S.C. 
2271, preceding note) is amended--
            (1) by striking ``No'' and all that follows through ``and 
        no duty'' in subsection (b) and inserting ``No duty''; and
            (2) by adding at the end the following new subsection:
    ``(c) No assistance, vouchers, allowances, or other payments may be 
provided under chapter 2, and no technical assistance may be provided 
under chapter 3, after September 30, 1998.''.
    (b) Authorization of Appropriations.--
            (1) Chapter 2 adjustment assistance.--Section 245 of the 
        Trade Act of 1974 (19 U.S.C. 2317) is amended by striking 
        ``1988, 1989, 1990, 1991, 1992, and 1993'' and inserting 
        ``1993, 1994, 1995, 1996, 1997, and 1998''.
            (2) Chapter 3 adjustment assistance.--Section 256(b) of 
        such Act (19 U.S.C. 2346(b)) is amended by striking ``1988, 
        1989, 1990, 1991, 1992, and 1993'' and inserting ``1993, 1994, 
        1995, 1996, 1997, and 1998''.



          PART II--IMPROVED ACCESS TO CHILDHOOD IMMUNIZATIONS

SEC. 7801. REIMBURSEMENT TO VACCINE MANUFACTURERS.

    (a) In General.--Section 1902(a)(32) (42 U.S.C. 1396a(32)) is 
amended--
            (1) by striking ``and'' at the end of subparagraph (B);
            (2) by striking the period at the end of subparagraph (C) 
        and inserting ``; and''; and
            (3) by adding at the end the following new subparagraph:
                    ``(D) nothing in this paragraph shall be construed 
                to prevent the making of such payment to a manufacturer 
                of a childhood vaccine under a contract with the State 
                pursuant to which the manufacturer participates in a 
                vaccine replacement program described in subsection 
                (z).''.
    (b) State Vaccine Bulk Purchase Program.--Section 1902 (42 U.S.C. 
1396a) is amended by adding after paragraph (58) the following new 
paragraph:
            ``(59) provide for the establishment of a State vaccine 
        bulk purchase program for the purchase of pediatric vaccines.''
and by adding at the end the following new subsection:
    ``(z)(1) For purposes of section 1396a(a)(59), a vaccine 
replacement program described in this subsection is a vaccine bulk 
purchase program under which a State with a State plan approved under 
this title contracts with each manufacturer of childhood vaccines 
selling such vaccines in the State to--
            ``(A) supply doses of childhood vaccines to providers (or 
        in the case of a State medicaid vaccine program, the State) 
        administering such vaccines to individuals eligible to receive 
        medical assistance under the State plan and replace such 
        vaccines as needed; and
            ``(B) charge the State agency for such doses of childhood 
        vaccine the price under the most recent bid (determined once 
        such a bid price is made public) submitted by a manufacturer 
        which receives the Centers for Disease Control and Prevention 
        contract with respect to the childhood immunization program 
        under the Public Health Services Act, plus a reasonable fee to 
        cover shipping and handling of returns for such doses.
    ``(2) Any manufacturer of childhood vaccines selling such vaccines 
in a State which does not participate in a vaccine replacement program 
described in paragraph (1) which is operated in such State shall be 
ineligible to bid for Centers for Disease Control and Prevention 
Immunization contracts under section 317(j) of the Public Health 
Services Act.''.
    (c) Definition of State Vaccine Bulk Purchase Program.--Section 
1902 (42 U.S.C. 1396d) is amended by adding at the end the following 
new subsection:
    ``(t) Vaccine Bulk Purchase Program.--The term `vaccine bulk 
purchase program' means a State program which purchases vaccines at 
prices negotiated by the Centers for Disease Control and Prevention's 
childhood immunization program and distributes such vaccines free of 
charge to entities providing medical assistance to individuals eligible 
for such medical assistance under this title.''.
    (d) Agreement With the State.--Section 1902(a)(27) (42 U.S.C. 
1396a(a)(27)) is amended--
            (1) by striking ``under the State plan'', and inserting 
        ``under the State plan and with any entity that is a 
        manufacturer of a childhood vaccine under a contract with the 
        State pursuant to which the manufacturer participates in a 
        vaccine replacement program described in subsection (z)''; and
            (2) by striking ``such person or institution'' each place 
        it appears and inserting ``such person, institution, or 
        entity''.
    (e) CDC Price Plus CPI.--To the extent that, at the date of 
enactment, a specific vaccine is purchased under contract with the 
Centers for Disease Control and Prevention as provided in the Public 
Health Service Act, no bid for the purchase of such vaccine shall be 
accepted by the Centers for Disease Control and Prevention if the price 
per dose of such vaccine exceeds the price in effect on the date of 
enactment increased by the percentage increase in CPI from date of the 
contract in effect on the date of the enactment to the date of the 
contract. This provision shall be in effect for contracts made in 
fiscal year 1994 through fiscal year 1998.
    (f) Multiple Suppliers.--The Public Health Service provisions 
relating to the Centers for Disease Control and Prevention purchase of 
vaccine may not be construed as prohibiting the Secretary from entering 
into a contract with each manufacturer of a vaccine that meets the 
terms and conditions of the Secretary for an award of such a contract 
(including terms and conditions regarding safety, quality, and price).

SEC. 7802. STATE OPTION TO PROVIDE THAT CERTAIN PAYMENTS UNDER AFDC ARE 
              CONDITIONED ON RECEIPT OF IMMUNIZATIONS.

    (a) In General.--Section 402 (42 U.S.C. 602) is amended--
            (1) in paragraph (44), by striking ``; and'' and inserting 
        a semicolon;
            (2) in paragraph (45) by striking the period at the end and 
        inserting ``; and''; and
            (3) by adding at the end the following new paragraph:
            ``(46) at the option of the State, provide that if a family 
        receiving aid to families with dependent children for any month 
        includes a child under the age of 6 who has not received 
        appropriate immunizations (as determined by the State), the 
        State will take actions to encourage the timely immunization of 
        such child including, but not limited to, reducing the total 
        benefits received by such family for such month by all or a 
        portion of the benefits allocable to the parent or guardian of 
        such child and either--
                    ``(A) placing all or a portion of such amount in an 
                account until the family demonstrates to the State that 
                such child has been appropriately immunized; or
                    ``(B) using all or a portion of such amount to 
                provide services to such family intended to ensure that 
                such child receives appropriate immunizations.''.
    (b) State Programs to Encourage Appropriate Immunizations.--
            (1) In general.--The Secretary of Health and Human Services 
        (hereafter referred to in this subsection as the ``Secretary'') 
        shall provide for the establishment or programs intended to 
        ensure the appropriate immunization of children to be operated 
        in the States electing to take actions to encourage the timely 
        immunization of children described in section 402(a)(46) of the 
        Social Security Act.
            (2) Payments to states and limits on funding.--
                    (A) Payments to states.--Except as provided in 
                subparagraph (B), the Secretary shall pay to each State 
                conducting a program under this subsection for each 
                quarter in which such program is conducted an amount 
                equal such State's Federal percentage (as determined 
                under section 403(a) of the Social Security Act) of the 
                expenditures incurred by such State during such quarter 
                in conducting such program.
                    (B) Limits on funding.--In conducting programs 
                under this subsection, the Secretary shall limit the 
                total amount of the Federal share of expenses incurred 
                under title IV and section 1903 of the Social Security 
                Act to no more than $250,000 for each State in any 
                year.
    (c) Effective Date.--The amendment made by subsection (a) and the 
provisions of subsection (b) shall become effective on the date of the 
enactment of this Act.

                    PART III--DISCLOSURE PROVISIONS

SEC. 7901. DISCLOSURE OF RETURN INFORMATION FOR ADMINISTRATION OF 
              CERTAIN VETERANS PROGRAMS.

    (a) General Rule.--Subparagraph (D) of section 6103(l)(7) of the 
Internal Revenue Code of 1986 (relating to disclosure of return 
information to Federal, State, and local agencies administering certain 
programs) is amended by striking ``September 30, 1997'' in the second 
sentence following clause (viii) and inserting ``September 30, 1998''.
    (b) Authority for Secretary of Veterans Affairs To Obtain 
Information.--Section 5317(g) of title 38, United States Code, is 
amended by striking out ``September 30, 1997'' and inserting 
``September 30, 1998''.
    (c) Effective Date.--The amendments made by this section shall take 
effect on the date of the enactment of this Act.

SEC. 7902. DISCLOSURE OF RETURN INFORMATION TO CARRY OUT INCOME 
              CONTINGENT REPAYMENT OF STUDENT LOANS.

    (a) General Rule.--Subsection (l) of section 6103 of the Internal 
Revenue Code of 1986 (relating to confidentiality and disclosure of 
returns and return information) is amended by adding at the end thereof 
the following new paragraph:
            ``(13) Disclosure of return information to carry out income 
        contingent repayment of student loans.--
                    ``(A) In general.--The Secretary may, upon written 
                request from the Secretary of Education, disclose to 
                officers and employees of the Department of Education 
                return information with respect to a taxpayer who has 
                received an applicable student loan and whose loan 
                repayment amounts are based in whole or in part on the 
                taxpayer's income. Such return information shall be 
                limited to--
                            ``(i) taxpayer identity information with 
                        respect to such taxpayer,
                            ``(ii) the filing status of such taxpayer, 
                        and
                            ``(iii) the adjusted gross income of such 
                        taxpayer.
                    ``(B) Restriction on use of disclosed 
                information.--Return information disclosed under 
                subparagraph (A) may be used by officers and employees 
                of the Department of Education only for the purposes 
                of, and to the extent necessary in, establishing the 
                appropriate income contingent repayment amount for an 
                applicable student loan.
                    ``(C) Applicable student loan.--For purposes of 
                this paragraph, the term `applicable student loan' 
                means--
                            ``(i) any loan made under the program 
                        authorized under part D of title IV of the 
                        Higher Education Act of 1965, and
                            ``(ii) any loan made under part B or E of 
                        title IV of the Higher Education Act of 1965 
                        which is in default and has been assigned to 
                        the Department of Education.
                    ``(D) Termination.--This paragraph shall not apply 
                to any request made after September 30, 1998.''
    (b) Conforming Amendments.--
            (1) So much of paragraph (4) of section 6103(m) of such 
        Code as precedes subparagraph (B) thereof is amended to read as 
        follows:
            ``(4) Individuals who owe an overpayment of federal pell 
        grants or who have defaulted on student loans administered by 
        the department of education.--
                    ``(A) In general.--Upon written request by the 
                Secretary of Education, the Secretary may disclose the 
                mailing address of any taxpayer--
                            ``(i) who owes an overpayment of a grant 
                        awarded to such taxpayer under subpart 1 of 
                        part A of title IV of the Higher Education Act 
                        of 1965, or
                            ``(ii) who has defaulted on a loan--
                                    ``(I) made under part B, D, or E of 
                                title IV of the Higher Education Act of 
                                1965, or
                                    ``(II) made pursuant to section 
                                3(a)(1) of the Migration and Refugee 
                                Assistance Act of 1962 to a student at 
                                an institution of higher education,
                for use only by officers, employees, or agents of the 
                Department of Education for purposes of locating such 
                taxpayer for purposes of collecting such overpayment or 
                loan .''
            (2) Subparagraph (B) of section 6103(m)(4) of such Code is 
        amended--
                    (A) in clause (i), by striking ``under part B'' and 
                inserting ``under part B or D''; and
                    (B) in clause (ii), by striking ``under part E'' 
                and inserting ``under subpart 1 of part A, or part D or 
                E,'';
            (3) Section 6103(p) of such Code is amended--
                    (A) in paragraph (3)(A), by striking ``(11), or 
                (12), (m)'' and inserting ``(11), (12), or (13), (m)'';
                    (B) in paragraph (4)--
                            (i) in the matter preceding subparagraph 
                        (A), by striking out ``(10), or (11),'' and 
                        inserting ``(10), (11), or (13),'', and
                            (ii) in subparagraph (F)(ii), by striking 
                        ``(11), or (12),'' and inserting ``(11), (12), 
                        or (13),''.
    (c) Effective Date.--The amendments made by this section shall take 
effect on the date of the enactment of this Act.

SEC. 7903. USE OF RETURN INFORMATION FOR INCOME VERIFICATION UNDER 
              CERTAIN HOUSING ASSISTANCE PROGRAMS.

    (a) In General.--Subparagraph (D) of section 6103(l)(7) of the 
Internal Revenue Code of 1986 (relating to the disclosure of return 
information to Federal, State, and local agencies administering certain 
programs) is amended--
            (1) in clause (vii), by striking ``and'' at the end;
            (2) in clause (viii), by striking the period at the end and 
        inserting ``; and'';
            (3) by inserting after clause (viii) the following new 
        clause:
            ``(ix) any housing assistance program administered by the 
        Department of Housing and Urban Development that involves 
        initial and periodic review of an applicant's or participant's 
        income, except that return information may be disclosed under 
        this clause only on written request by the Secretary of Housing 
        and Urban Development and only for use by officers and 
        employees of the Department of Housing and Urban Development 
        with respect to applicants for and participants in such 
        programs.''; and
            (4) by adding at the end thereof the following: ``Clause 
        (ix) shall not apply after September 30, 1998.''
    (b) Conforming Amendment.--The heading of paragraph (7) of section 
6103(l) of such Code is amended by inserting after ``code'' the 
following: ``, or certain housing assistance programs''.
    (c) Effective Date.--The amendments made by this section shall take 
effect on the date of the enactment of this Act.

SEC. 7904. USE OF RETURN INFORMATION FOR HEALTH COVERAGE CLEARINGHOUSE.

    (a) Establishment of Health Coverage Clearinghouse.--Part A of 
title XI (42 U.S.C. 1301 et seq.) is amended by adding at the end the 
following new section:

                 ``third party liability clearinghouse

    ``Sec. 1144. (a) Establishment of Clearinghouse.--
            ``(1) In general.--The Secretary shall establish and 
        operate a Third Party Liability Clearinghouse (hereafter in 
        this section referred to as the `Clearinghouse') for the 
        purpose of identifying third parties responsible for payment 
        for health care items and services furnished to beneficiaries 
        of the medicare program under title XVIII and the medicaid 
        program under title XIX.
            ``(2) Director.--The Clearinghouse established pursuant to 
        paragraph (1) shall be headed by a Director.
    ``(b) Data Bank.--
            ``(1) Maintenance of information.--The Clearinghouse shall 
        maintain a data bank containing information obtained pursuant 
        to section 6103(l)(12) of the Internal Revenue Code of 1986. 
        Information in the data bank shall be retained for not less 
        than 1 year after the date the information was obtained.
            ``(2) Disclosure of information in data bank.--The Director 
        is authorized (subject to the restriction in section 
        6103(l)(12)(E)(i) of the Internal Revenue Code of 1986) to 
        disclose any information in the data bank established pursuant 
        to paragraph (1) to the Commissioner of Social Security, the 
        Secretary of the Treasury, employers, group health plans, the 
        administrator of the medicare program under title XVIII, and 
        the administrators of the medicaid program under title XIX, to 
        the extent necessary to assist the administration of such 
        programs.
    ``(c) Requirement That Employers Furnish Information.--
            ``(1) In general.--An employer shall furnish to the 
        Director the information requested pursuant to section 
        6103(l)(12)(C)(i) of the Internal Revenue Code of 1986 within 
        60 days after receipt of such a request.
            ``(2) Civil money penalty for failure to cooperate.--An 
        employer (other than a Federal or other governmental entity) 
        who willfully or repeatedly fails to provide a timely and 
        accurate response to a request for information pursuant to 
        paragraph (1) shall be subject, in addition to any other 
        penalties that may be prescribed by law, to a civil money 
        penalty of not to exceed $1,000 for each individual or 
        individual's spouse with respect to which such a request is 
        made. The provisions of section 1128A (other than subsections 
        (a) and (b)) shall apply to such civil money penalty in the 
        same manner as such provisions apply to penalties or 
        proceedings under section 1128A(a).
    ``(d) Collections From Third Parties.--The Director is authorized, 
upon request by the administrator of the medicare program under title 
XVIII or any administrator of the medicaid program under title XIX, to 
assist in the collection of amounts due from liable third parties to 
reimburse costs incurred by such program for health care items and 
services.
    ``(e) Fees for Clearinghouse Services.--The Director shall 
establish fees for services provided under section 6103(l)(12)(C)(ii) 
of the Internal Revenue Code of 1986 and subsection (d) which are 
designed to cover the full costs to the Clearinghouse of providing such 
services. Clearinghouse services under such section and subsection 
shall be available subject to payment of such fees.
    ``(f) Evaluation Responsibilities.--The Director shall evaluate 
methods for improving--
            ``(1) procedures for the collection, management, and 
        appropriate disclosure of health care coverage information, and
            ``(2) Federal laws and policies concerning third party 
        liability for medical care.
    ``(g) Definitions.--For purposes of this section, the term `group 
health plan' has the meaning given to such term in section 
6103(l)(12)(G) of the Internal Revenue Code of 1986.''.
    (b) Disclosure of Tax Return Information.--
            (1) In general.--Paragraph (12) of section 6103(l) of the 
        Internal Revenue Code of 1986, as amended by section 7303, is 
        amended to read as follows:
            ``(12) Disclosure of certain taxpayer return information 
        for purposes of identifying health insurance coverage of 
        certain individuals and spouses.--
                    ``(A) Return information from internal revenue 
                service.--The Secretary shall, upon written request 
                from the Commissioner of Social Security (referred to 
                in this subparagraph as the `Commissioner'), disclose 
                to the Commissioner available filing status and 
                taxpayer identity information from the individual 
                master files of the Internal Revenue Service relating 
                to whether any individual identified by the 
                Commissioner was a married individual (as defined in 
                section 7703) for any specified year after 1986, and, 
                if so, the name of the spouse of such individual and 
                such spouse's TIN.
                    ``(B) Return information from social security 
                administration.--The Commissioner shall, upon written 
                request from the Director of the Third Party Liability 
                Clearinghouse (referred to in this subparagraph as the 
                `Director'), disclose to the Director the following 
                information with respect to the individuals, and the 
                spouses of such individuals, specified in subparagraph 
                (A):
                            ``(i) For each such individual who is 
                        identified as having received wages (as defined 
                        in section 3401(a)) above an amount (if any) 
                        specified by the Secretary of Health and Human 
                        Services from an employer in a previous year--
                                    ``(I) the name and TIN of the 
                                individual,
                                    ``(II) the name, address, and TIN 
                                of the employer, and
                                    ``(III) the information reported 
                                under section 6051(a)(10).
                            ``(ii) For each individual who was 
                        identified as married under subparagraph (A) 
                        and whose spouse is identified as having 
                        received wages above an amount (if any) 
                        specified by the Secretary of Health and Human 
                        Services from an employer in a previous year--
                                    ``(I) the name and TIN of the 
                                individual,
                                    ``(II) the name and TIN of the 
                                spouse,
                                    ``(III) the name, address, and TIN 
                                of the spouse's employer, and
                                    ``(IV) the information reported 
                                under section 6051(a)(10) with respect 
                                to the spouse.
                    ``(C) Disclosure by third party liability 
                clearinghouse.--The Director may (subject to the 
                provisions of subparagraph (E)) disclose--
                            ``(i) with respect to the information 
                        disclosed under subparagraph (B), to the 
                        employer referred to in such subparagraph the 
                        name and TIN of each individual identified 
                        under such subparagraph as having received 
                        wages from the employer (hereafter referred to 
                        in this subparagraph as the `employee') for 
                        purposes of determining during what period such 
                        employee or the employee's spouse may be (or 
                        have been) covered under a group health plan of 
                        the employer and what benefits are or were 
                        covered under the plan (including the name, 
                        address, and identifying number of the plan),
                            ``(ii) to the administrator of the medicare 
                        program under title XVIII of the Social 
                        Security Act or to any administrator of the 
                        medicaid program under title XIX of such Act 
                        the information disclosed under subparagraph 
                        (B) and clause (i) for purposes of providing 
                        information concerning employment and group 
                        health coverage of individuals and individual's 
                        spouses who are program beneficiaries,
                            ``(iii) to any agent of such Director the 
                        information referred to in subparagraph (B) for 
                        purposes of carrying out clauses (i) and (ii) 
                        on behalf of such Director, and
                            ``(iv) to any person specified in 
                        subsection (b)(2) of section 1144 of the Social 
                        Security Act, information in the data bank 
                        established pursuant to subsection (b)(1) of 
                        such section, for the purposes specified in 
                        such subsection.
                    ``(D) Disclosure by certain programs to group 
                health plans.--The administrator of the medicare 
                program under title XVIII of the Social Security Act or 
                any administrator of the medicaid program under title 
                XIX of such Act may (subject to the provisions of 
                subparagraph (E)) disclose information concerning an 
                employee or spouse disclosed to the Director pursuant 
                to subparagraph (B) and redisclosed to such 
                administrator pursuant to subparagraph (C)--
                            ``(i) to any group health plan which 
                        provides or provided coverage to such employee 
                        or spouse, and
                            ``(ii) to any agent of such administrator,
                for purposes of identifying, or collecting on claims 
                under coverage of such employee or spouse under such 
                group health plan.
                    ``(E) Special rules.--
                            ``(i) Restrictions on disclosure.--
                        Information may be disclosed under 
                        subparagraphs (A) through (D) only for purposes 
                        of, and to the extent necessary in, determining 
                        the extent to which any individual is covered 
                        under any group health plan.
                            ``(ii) Timely response to requests.--Any 
                        request made under subparagraph (A) or (B) 
                        shall be complied with as soon as possible but 
                        in no event later than 120 days after the date 
                        the request was made.
                    ``(F) Disclosure concerning enforcement 
                activities.--The Secretary shall, upon written request 
                from the Secretary of Health and Human Services, 
                disclose to the Secretary of Health and Human Services 
                the status of any activities undertaken (with respect 
                to persons specified by the Secretary of Health and 
                Human Services) to enforce the requirements of section 
                5000.
                    ``(G) Definitions.--For purposes of this paragraph, 
                the term `group health plan' means any group health 
                plan (as defined in section 5000(b)).''.
            (2) Reporting of group health plan information.--Section 
        6051(a) of the Internal Revenue Code of 1986 is amended--
                    (A) by striking ``and'' at the end of paragraph 
                (8),
                    (B) by striking the period at the end of paragraph 
                (9) and inserting ``, and'', and
                    (C) by inserting after paragraph (9) the following 
                new paragraph:
            ``(10) whether a group health plan (as defined in section 
        6103(l)(12)(G)) is available to the employee and the plan 
        coverage (single or family) elected by such employee (if 
        any).''.
    (c) Conforming Amendment.--Section 1862(b)(5) (42 U.S.C. 
1395y(b)(5)), as amended by section 7303, is amended to read as 
follows:
            ``(5) Identification of secondary payer situations.--In 
        addition to any other information provided under this title to 
        fiscal intermediaries and carriers, the Administrator shall 
        disclose to such intermediaries and carriers (or to such a 
        single intermediary or carrier as the Secretary may designate) 
        the information received under section 6103(l)(12)(C)(ii) of 
        the Internal Revenue Code of 1986.''.
    (d) Exception From Privacy Act Requirements.--Subsection (a)(8)(B) 
of section 552a of title 5, United States Code, is amended--
            (1) in clause (v), by striking ``; or'' at the end;
            (2) in clause (vi), by striking the semicolon at the end 
        and inserting ``; or''; and
            (3) by adding at the end the following new clause:
                            ``(vii) matches performed pursuant to 
                        section 6103(l)(12) of the Internal Revenue 
                        Code of 1986 and section 1144 of the Social 
                        Security Act for the purpose of identifying 
                        third parties responsible for payment for 
                        health care items and services furnished to 
                        beneficiaries of certain Federal and federally 
                        assisted programs;''.
    (e) Effective Date.--The amendments made by this section shall take 
effect on April 1, 1995.

                       PART IV--OTHER PROVISIONS

SEC. 7950. DISALLOWANCE OF INTEREST ON CERTAIN OVERPAYMENTS OF TAX.

    (a) General Rule.--Subsection (e) of section 6611 of the Internal 
Revenue Code of 1986 (relating to income tax refund within 45 days 
after return is filed) is amended to read as follows:
    ``(e) Disallowance of Interest on Certain Overpayments.--
            ``(1) Refunds within 45 days after return is filed.--If any 
        overpayment of tax imposed by this title is refunded within 45 
        days after the last day prescribed for filing the return of 
        such tax (determined without regard to any extension of time 
        for filing the return) or, in the case of a return filed after 
        such last date, is refunded within 45 days after the date the 
        return is filed, no interest shall be allowed under subsection 
        (a) on such overpayment.
            ``(2) Refunds after claim for credit or refund.--If--
                    ``(A) the taxpayer files a claim for a credit or 
                refund for any overpayment of tax imposed by this 
                title, and
                    ``(B) such overpayment is refunded within 45 days 
                after such claim is filed,
        no interest shall be allowed on such overpayment from the date 
        the claim is filed until the day the refund is made.
            ``(3) IRS initiated adjustments.--If an adjustment 
        initiated by the Secretary, results in a refund or credit of an 
        overpayment, interest on such overpayment shall be computed by 
        subtracting 45 days from the number of days interest would 
        otherwise be allowed with respect to such overpayment.''
    (b) Effective Dates.--
            (1) Paragraph (1) of section 6611(e) of the Internal 
        Revenue Code of 1986 (as amended by subsection (a)) shall apply 
        in the case of returns the due date for which (determined 
        without regard to extensions) is on or after January 1, 1994.
            (2) Paragraph (2) of section 6611(e) of such Code (as so 
        amended) shall apply in the case of claims for credit or refund 
        of any overpayment filed on or after January 1, 1995, 
        regardless of the taxable period to which such refund relates.
            (3) Paragraph (3) of section 6611(e) of such Code (as so 
        amended) shall apply in the case of any refund paid on or after 
        January 1, 1995, regardless of the taxable period to which such 
        refund relates.

SEC. 7951. FEES FOR APPLICATIONS FOR ALCOHOL LABELING AND FORMULA 
              REVIEWS.

    (a) In General.--The Secretary of the Treasury or his delegate 
(hereinafter in this section referred to as the `Secretary') shall 
establish a program requiring the payment of user fees for--
            (1) requests for each certificate of alcohol label approval 
        required under the Federal Alcohol Administration Act (27 
        U.S.C. 201 et seq.) and for each request for exemption from 
        such requirement, and
            (2) requests for each formula review, and requests for each 
        statement of process (including laboratory tests and analyses), 
        under such Act or under chapter 51 of the Internal Revenue Code 
        of 1986.
    (b) Program Criteria.--
            (1) In general.--The fees charged under the program 
        required by subsection (a) shall be determined such that the 
        Secretary estimates that the aggregate of such fees received 
        during any fiscal year will be $5,000,000.
            (2) Minimum fees.--The fee charged under the program 
        required by subsection (a) shall not be less than--
                    (A) $50 for each request referred to in subsection 
                (a)(1), and
                    (B) $250 for each request referred to in subsection 
                (a)(2).
    (c) Application of Section.--Subsection (a) shall apply to requests 
made on or after the 90th day after the date of the enactment of this 
Act.
    (d) Deposit and Credit as Offsetting Receipts.--The amounts 
collected by the Secretary under the program required by subsection (a) 
(to the extent such amounts do not exceed $5,000,000) shall be 
deposited into the Treasury as offsetting receipts and ascribed to the 
alcohol compliance program of the Bureau of Alcohol, Tobacco, and 
Firearms.

SEC. 7952. USE OF HARBOR MAINTENANCE TRUST FUND AMOUNTS FOR 
              ADMINISTRATIVE EXPENSES.

    (a) In General.--Paragraph (3) of section 9505(c) of the Internal 
Revenue Code of 1986 (relating to expenditures from Harbor Maintenance 
Trust Fund) is amended to read as follows:
            ``(3) for the payment of all expenses of administration 
        incurred by the Department of the Treasury, the Army Corps of 
        Engineers, and the Department of Commerce related to the 
        administration of subchapter A of chapter 36 (relating to 
        harbor maintenance tax), but not in excess of $5,000,000 for 
        any fiscal year.''
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to fiscal years beginning after the date of the enactment of this 
Act.

SEC. 7953. INCREASE IN PRESIDENTIAL ELECTION CAMPAIGN FUND CHECK-OFF.

    (a) In General.--Section 6096(a) of the Internal Revenue Code of 
1986 (relating to designation by individuals) is amended--
            (1) by striking ``$1'' each place it appears and inserting 
        ``$3'', and
            (2) by striking ``$2'' and inserting ``$6''.
    (b) Effective Date.--The amendments made by subsection (a) apply 
with respect to tax returns required to be filed after December 31, 
1993.

SEC. 7954. INCREASE IN PUBLIC DEBT LIMIT.

    (a) General Rule.--Subsection (b) of section 3101 of title 31, 
United States Code, is amended by striking out the dollar limitation 
contained in such subsection and inserting in lieu thereof 
``$4,900,000,000,000''.
    (b) Repeal of Temporary Increase.--Effective on and after the date 
of the enactment of this Act, section 1 of Public Law 103-12 is hereby 
repealed.

            TITLE VIII--FINANCE COMMITTEE REVENUE PROVISIONS

SEC. 8000. SHORT TITLE; ETC.

    (a) Short Title.--This title may be cited as the ``Revenue 
Reconciliation Act of 1993''.
    (b) Amendment to 1986 Code.--Except as otherwise expressly 
provided, whenever in this title an amendment or repeal is expressed in 
terms of an amendment to, or repeal of, a section or other provision, 
the reference shall be considered to be made to a section or other 
provision of the Internal Revenue Code of 1986.
    (c) Section 15 Not To Apply.--Except in the case of the amendments 
made by section 8221 (relating to corporate rate increase), no 
amendment made by this title shall be treated as a change in a rate of 
tax for purposes of section 15 of the Internal Revenue Code of 1986.
    (d) Waiver of Estimated Tax Penalties.--No addition to tax shall be 
made under section 6654 or 6655 of the Internal Revenue Code of 1986 
for any period before April 16, 1994 (March 16, 1994, in the case of a 
corporation), with respect to any underpayment to the extent such 
underpayment was created or increased by any provision of this title.
    (e) Table of Contents.--

Sec. 8000. Short title; etc.

             Subtitle A--Training and Investment Incentives

         Part I--Provisions Relating to Education and Training

Sec. 8101. Employer-provided educational assistance.
Sec. 8102. Targeted jobs credit.

                     Part II--Investment Incentives

                       subpart a--research credit
Sec. 8111. Extension of research credit.
Sec. 8112. Modification of fixed base percentage for startup companies.
Sec. 8113. Sense of Senate regarding permanent extension of research 
       subpart b--modification to minimum tax depreciation rules
Sec. subpart c--increase in expense treatment for small businesses
Sec. 8119. Increase insubpart d--tax exempt bondsl businesses.
Sec. 8121. Extension of qualified small issue bonds.

   Part III--Expansion and Simplification of Earned Income Tax Credit

Sec. 8131. Expansion and simplification of earned income tax credit.

           Part IV--Incentives for Investment in Real Estate

subpart a--extension of qualified mortgage bonds and low-income housing 
                                 credit
Sec. 8141. Extension of qualified mortgage bonds.
Sec. 8141A. Sense of the Senate regarding permanent extension of 
                            qualified mortgage bonds.
Sec. 8142. Low-incomesubpart b--passive loss rules
Ssubpart c--provisions relating to real estate investments by pension 
                                 funds
Sec. 8144. Real estate property acquired by a qualified organization.
Sec. 8145. Repeal of special treatment of publicly treated 
                            partnerships.
Sec. 8146. Title-holding companies permitted to receive small amounts 
                            of unrelated business taxable income.
Sec. 8147. Exclusion from unrelated business tax of gains from certain 
                            property.
Sec. 8148. Exclusion from unrelated business tax of certain fees and 
                            option premiums.
Sec. 8149. Treatment of pension fund investments in real estate 
subpart d--increase in recovery period for nonresidential real property
Sec. 8151. Increase in recovery period for nonresidential real 
                            property.

                           Part V--Luxury Tax

Sec. 8161. Repeal of luxury excise taxes other than on passenger 
                            vehicles.
Sec. 8162. Exemption from luxury excise tax for certain equipment 
                            installed on passenger vehicles for use by 
                            disabled individuals.
Sec. 8163. Tax on diesel fuel used in noncommercial boats.

                         Part VI--Other Changes

Sec. 8171. Alternative minimum tax treatment of contributions of 
                            appreciated property.
Sec. 8172. Substantiation requirement for deduction of certain 
                            charitable contributions.
Sec. 8173. Disclosure related to quid pro quo contributions.
Sec. 8174. Certain transfers to railroad retirement account made 
                            permanent.
Sec. 8175. Temporary extension of deduction for health insurance costs 
                            of self-employed individuals.

              Part VII--Investment in Indian Reservations

Sec. 8181. Investment tax credit for property on Indian Reservations.
Sec. 8182. Indian employment credit.

                     Subtitle B--Revenue Increases

                Part I--Provisions Affecting Individuals

                       subpart a--rate increases
Sec. 8201. Increase in top marginal rate under section 1.
Sec. 8202. Surtax on high-income taxpayers.
Sec. 8203. Modifications to alternative minimum tax rates and exemption 
                            amounts.
Sec. 8203A. Rate increases not to take effect until July 1, 1993.
Sec. 8204. Overall limitation on itemized deductions for high-income 
                            taxpayers made permanent. 
Sec. 8205. Phaseout of personal exemption of high-income taxpayers made 
                            permanent.
Sec. 8206. Provisions to prevent conversion of ordinary income to 
                      subpart b--other provisions
Sec. 8207. Repeal of limitation on amount of wages subject to health 
                            insurance employment tax.
Sec. 8208. Top estate and gift tax rates made permanent.
Sec. 8209. Reduction in deductible portion of business meals and 
                            entertainment.
Sec. 8209A. Sense of the Senate relating to the deductibility of 
                            business meals and entertainment expenses.
Sec. 8210. Elimination of deduction for club membership fees.
Sec. 8211. Disallowance of deduction for certain employee remuneration 
                            in excess of $1,000,000.
Sec. 8212. Reduction in compensation taken into account in determining 
                            contributions and benefits under qualified 
                            retirement plans.
Sec. 8213. Modification to deduction for certain moving expenses.
Sec. 8214. Simplification of individual estimated tax safe harbor based 
                            on last year's tax.
Sec. 8215. Social security and tier 1 railroad retirement benefits.

                Part II--Provisions Affecting Businesses

Sec. 8221. Increase in top marginal rate under section 11.
Sec. 8222. Disallowance of deduction for lobbying expenditures.
Sec. 8223. Mark to market accounting method for securities dealers.
Sec. 8224. Clarification of treatment of certain FSLIC financial 
                            assistance.
Sec. 8225. Modification of corporate estimated tax rules.
Sec. 8226. Modifications of discharge of indebtedness provisions.
Sec. 8227. Limitation on section 936 credit.
Sec. 8228. Modification to limitation on deduction for certain 
                            interest.

                    Part III--Foreign Tax Provisions

 subpart a--current taxation of certain earnings of controlled foreign 
                              corporations
Sec. 8231. Earnings invested in excess passive assets.
Sec. 8232. Modification to taxation of investment in United States 
                            property.
Sec.subpart b--allocation of research and experimental expenditures
Sec. 8234. Allocation subpart c--other provisionsl expenditures.
Sec. 8235. Repeal of certain exceptions for working capital.
Sec. 8236. Modifications of accuracy-related penalty.
Sec. 8237. Denial of portfolio interest exemption for contingent 
                            interest.
Sec. 8238. Regulations dealing with conduit arrangements.
Sec. 8239. Treatment of export of certain softwood logs.

                Part IV--Transportation Fuels Provisions

                  subpart a--transportation fuels tax
Sec. 8241. Trsubpart b--modifications to tax on diesel fuel
Sec. 8242. Modifications to tax on diesel fuel.
Ssubpart c--extension of motor fuel tax rates; increased deposits into 
                           highway trust fund
Sec. 8244. Extension of motor fuel tax rates; increased deposits into 
                            Highway Trust Fund.

                     Part V--Compliance Provisions

Sec. 8251. Modifications to substantial understatement and return-
                            preparer penalties.
Sec. 8252. Returns relating to the cancellation of indebtedness by 
                            certain financial entities.

                   Part VI--Treatment of Intangibles

Sec. 8261. Amortization of goodwill and certain other intangibles.
Sec. 8262. Treatment of certain payments to retired or deceased 
                            partner.

                   Part VII--Miscellaneous Provisions

Sec. 8271. Denial of deduction relating to travel expenses.
Sec. 8272. Increase in withholding from supplemental wage payments.
Sec. 8273. Excise tax on certain vaccines made permanent.

             Subtitle A--Training and Investment Incentives

         PART I--PROVISIONS RELATING TO EDUCATION AND TRAINING

SEC. 8101. EMPLOYER-PROVIDED EDUCATIONAL ASSISTANCE.

    (a) Extension of Exclusion.--
            (1) In general.--Subsection (d) of section 127 (relating to 
        educational assistance programs) is amended to read as follows:
    ``(d) Termination.--
            ``(1) In general.--This section shall not apply to taxable 
        years beginning after June 30, 1994.
            ``(2) Special rule.--In the case of any taxable year 
        beginning in 1994, only amounts paid before July 1, 1994, by 
        the employer for educational assistance for any employee shall 
        be taken into account for purposes of this section.''
            (2) Conforming amendment.--Paragraph (2) of section 103(a) 
        of the Tax Extension Act of 1991 is hereby repealed.
    (b) Coordination With Section 132.--Paragraph (8) of section 132(i) 
is amended to read as follows:
            ``(8) Application of section to otherwise taxable 
        educational or training benefits.--Amounts paid or expenses 
        incurred by the employer for education or training provided to 
        the employee which are not excludable from gross income under 
        section 127 shall be excluded from gross income under this 
        section if (and only if) such amounts or expenses are a working 
        condition fringe.''
    (c) Effective Dates.--
            (1) Subsection (a).--The amendments made by subsection (a) 
        shall apply to taxable years ending after June 30, 1992.
            (2) Subsection (b).--The amendment made by subsection (b) 
        shall apply to taxable years beginning after December 31, 1988.

SEC. 8102. TARGETED JOBS CREDIT.

    (a) Extension of Credit.--Paragraph (4) of section 51(c) (relating 
to amount of targeted jobs credit) is amended by striking ``1992'' and 
inserting ``1994''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to individuals who begin work for the employer after June 30, 
1992.

                     PART II--INVESTMENT INCENTIVES

                       Subpart A--Research Credit

SEC. 8111. EXTENSION OF RESEARCH CREDIT.

    (a) In General.--Subsection (h) of section 41 (relating to credit 
for research activities) is amended to read as follows:
    ``(h) Nonapplicability.--
            ``(1) In general.--This section shall not apply to amounts 
        paid or incurred during any suspension period.
            ``(2) Base amount.--In the case of any taxable year which 
        includes a portion of any suspension period, the base amount 
        with respect to such taxable year shall be the amount which 
        bears the same ratio to the base amount for such year 
        (determined without regard to this paragraph) as the number of 
        days in such taxable year which are not in any suspension 
        period bears to the total number of days in such taxable year.
            ``(3) Fixed-base percentage.--The fixed-base percentage 
        under subsection (c)(3)(B)(ii) shall be computed as if this 
        section were in effect during any suspension period.
            ``(4) Suspension period.--For purposes of this subsection, 
        the term `suspension period' includes--
                    ``(A) the period beginning July 1, 1992, and ending 
                June 30, 1993, and
                    ``(B) any period after June 30, 1994.''
    (b) Conforming Amendment.--Subparagraph (D) of section 28(b)(1) is 
amended by striking ``for periods after June 30, 1992'' and inserting 
``during any suspension period (as defined in section 41(h)(4))''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years ending after June 30, 1992.

SEC. 8112. MODIFICATION OF FIXED BASE PERCENTAGE FOR STARTUP COMPANIES.

    (a) General Rule.--Clause (ii) of section 41(c)(3)(B) is amended to 
read as follows:
                            ``(ii) Fixed-base percentage.--In a case to 
                        which this subparagraph applies, the fixed-base 
                        percentage is--
                                    ``(I) 3 percent for each of the 
                                taxpayer's 1st 5 taxable years 
                                beginning after December 31, 1993, for 
                                which the taxpayer has qualified 
                                research expenses,
                                    ``(II) in the case of the 
                                taxpayer's 6th such taxable year, \1/6\ 
                                of the percentage which the aggregate 
                                qualified research expenses of the 
                                taxpayer for the 4th and 5th such 
                                taxable years is of the aggregate gross 
                                receipts of the taxpayer for such 
                                years,
                                    ``(III) in the case of the 
                                taxpayer's 7th such taxable year, \1/3\ 
                                of the percentage which the aggregate 
                                qualified research expenses of the 
                                taxpayer for the 5th and 6th such 
                                taxable years is of the aggregate gross 
                                receipts of the taxpayer for such 
                                years,
                                    ``(IV) in the case of the 
                                taxpayer's 8th such taxable year, \1/2\ 
                                of the percentage which the aggregate 
                                qualified research expenses of the 
                                taxpayer for the 5th, 6th, and 7th such 
                                taxable years is of the aggregate gross 
                                receipts of the taxpayer for such 
                                years,
                                    ``(V) in the case of the taxpayer's 
                                9th such taxable year, \2/3\ of the 
                                percentage which the aggregate 
                                qualified research expenses of the 
                                taxpayer for the 5th, 6th, 7th, and 8th 
                                such taxable years is of the aggregate 
                                gross receipts of the taxpayer for such 
                                years,
                                    ``(VI) in the case of the 
                                taxpayer's 10th such taxable year, \5/
                                6\ of the percentage which the 
                                aggregate qualified research expenses 
                                of the taxpayer for the 5th, 6th, 7th, 
                                8th, and 9th such taxable years is of 
                                the aggregate gross receipts of the 
                                taxpayer for such years, and
                                    ``(VII) for taxable years 
                                thereafter, the percentage which the 
                                aggregate qualified research expenses 
                                for any 5 taxable years selected by the 
                                taxpayer from among the 5th through the 
                                10th such taxable years is of the 
                                aggregate gross receipts of the 
                                taxpayer for such selected years.''.
    (b) Conforming Amendments.--
            (1) Clause (iii) of section 41(c)(3)(B) is amended by 
        striking ``clause (i)'' and inserting ``clauses (i) and (ii)''.
            (2) Subparagraph (D) of section 41(c)(3) is amended by 
        striking ``subparagraph (A)'' and inserting ``subparagraphs (A) 
        and (B)(ii)''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1993.

SEC. 8113. SENSE OF SENATE REGARDING PERMANENT EXTENSION OF RESEARCH 
              CREDIT.

    It is the sense of the Senate that the research credit under 
section 41 of the Internal Revenue Code of 1986 be extended 
permanently.

       Subpart B--Modification To Minimum Tax Depreciation Rules

SEC. 8115. MODIFICATION TO MINIMUM TAX DEPRECIATION RULES.

    (a) Elimination of ACE Depreciation Adjustment.--Clause (i) of 
section 56(g)(4)(A) (relating to depreciation adjustments for computing 
adjusted current earnings) is amended by adding at the end thereof the 
following new sentence: ``The preceding sentence shall not apply to any 
property placed in service after December 31, 1993, and the 
depreciation deduction with respect to such property shall be 
determined under the rules of subsection (a)(1)(A).''.
    (b) Effective Dates.--
            (1) In general.--Except as provided in paragraph (2), the 
        amendments made by this section shall apply to property placed 
        in service after December 31, 1993.
            (2) Coordination with transitional rules.--The amendments 
        made by this section shall not apply to any property to which 
        paragraph (1) of section 56(a) of the Internal Revenue Code of 
        1986 does not apply by reason of subparagraph (C)(i) thereof.

     Subpart C--Increase in Expense Treatment for Small Businesses

SEC. 8119. INCREASE IN EXPENSE TREATMENT FOR SMALL BUSINESSES.

    (a) General Rule.--Paragraph (1) of section 179(b) (relating to 
dollar limitation) is amended by striking ``$10,000'' and inserting 
``$20,500''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to taxable years beginning after December 31, 1992.

                      Subpart D--Tax Exempt Bonds

SEC. 8121. EXTENSION OF QUALIFIED SMALL ISSUE BONDS.

    (a) In General.--Subparagraph (B) of section 144(a)(12) is amended 
by striking ``1992'' and inserting ``1994''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to bonds issued after June 30, 1992.

   PART III--EXPANSION AND SIMPLIFICATION OF EARNED INCOME TAX CREDIT

SEC. 8131. EXPANSION AND SIMPLIFICATION OF EARNED INCOME TAX CREDIT.

    (a) General Rule.--Section 32 (relating to earned income credit) is 
amended by striking subsections (a) and (b) and inserting the 
following:
    ``(a) Allowance of Credit.--
            ``(1) In general.--In the case of an eligible individual, 
        there shall be allowed as a credit against the tax imposed by 
        this subtitle for the taxable year an amount equal to the 
        credit percentage of so much of the taxpayer's earned income 
        for the taxable year as does not exceed the earned income 
        amount.
            ``(2) Limitation.--The amount of the credit allowable to a 
        taxpayer under paragraph (1) for any taxable year shall not 
        exceed the excess (if any) of--
                    ``(A) the credit percentage of the earned income 
                amount, over
                    ``(B) the phaseout percentage of so much of the 
                adjusted gross income (or, if greater, the earned 
                income) of the taxpayer for the taxable year as exceeds 
                the phaseout amount.
    ``(b) Percentages and Amounts.--For purposes of subsection (a)--
            ``(1) Percentages.--The credit percentage and the phaseout 
        percentage shall be determined as follows:
                    ``(A) In general.--In the case of taxable years 
                beginning after 1995:

      

                                                                                                                
                 In the case of an eligible                                                                     
                      individual with:            The credit percentage is:        The phaseout percentage is:  
                                                                                                                
                1 qualifying child..........  34..............................                16.16             
                2 or more qualifying                                                                            
                 children...................  39..............................                20.72             
                                                                                                                

                    ``(B) Transitional percentages for 1995.--In the 
                case of a taxable year beginning in 1995:

      

                                                                                                                
                 In the case of an eligible                                                                     
                      individual with:            The credit percentage is:        The phaseout percentage is:  
                                                                                                                
                1 qualifying child..........  34..............................                16.16             
                2 or more qualifying                                                                            
                 children...................  34..............................                15.94             
                                                                                                                

                    ``(C) Transitional percentages for 1994.--In the 
                case of a taxable year beginning in 1994:

      

                                                                                                                
                 In the case of an eligible                                                                     
                      individual with:            The credit percentage is:        The phaseout percentage is:  
                                                                                                                
                1 qualifying child..........  26..............................                16.16             
                2 or more qualifying                                                                            
                 children...................  30..............................                15.94             
                                                                                                                

            ``(2) Amounts.--The earned income amount and the phaseout 
        amount shall be determined as follows:
                    ``(A) In general.--In the case of taxable years 
                beginning after 1994:

      

                                                                                                                
                 In the case of an eligible                                                                     
                      individual with:          The earned income amount is:         The phaseout amount is:    
                                                                                                                
                1 qualifying child..........  $6,000..........................               $11,000            
                2 or more qualifying                                                                            
                 children...................  $8,500..........................               $11,000            
                                                                                                                

                    ``(B) Transitional amounts.--In the case of a 
                taxable year beginning in 1994:

      

                                                                                                                
                 In the case of an eligible                                                                     
                      individual with:          The earned income amount is:         The phaseout amount is:    
                                                                                                                
                1 qualifying child..........  $7,750..........................              $11,000           
                2 or more qualifying                                                                            
                 children...................  $8,500..........................             $11,000.''           
                                                                                                                

    (b) Inflation Adjustments.--Section 32(i) (relating to inflation 
adjustments) is amended--
            (1) by striking paragraphs (1) and (2) and inserting the 
        following new paragraph:
            ``(1) In general.--In the case of any taxable year 
        beginning after 1994, each dollar amount contained in 
        subsection (b)(2)(A) shall be increased by an amount equal to--
                    ``(A) such dollar amount, multiplied by
                    ``(B) the cost-of-living adjustment determined 
                under section 1(f)(3), for the calendar year in which 
                the taxable year begins, by substituting `calendar year 
                1993' for `calendar year 1992'.'', and
            (2) by redesignating paragraph (3) as paragraph (2).
    (c) Conforming Amendments.--
            (1) Subparagraph (D) of section 32(c)(3) is amended--
                    (A) by striking ``clause (i) or (ii)'' in clause 
                (iii) and inserting ``clause (i)'',
                    (B) by striking clause (ii), and
                    (C) by redesignating clause (iii) as clause (ii).
            (2) Paragraph (3) of section 162(l) is amended to read as 
        follows:
            ``(3) Coordination with medical deduction.--Any amount paid 
        by a taxpayer for insurance to which paragraph (1) applies 
        shall not be taken into account in computing the amount 
        allowable to the taxpayer as a deduction under section 
        213(a).''
            (3) Section 213 is amended by striking subsection (f).
            (4) Subsection (b) of section 3507 is amended by 
        redesignating paragraphs (2) and (3) as paragraphs (3) and (4), 
        respectively, and by inserting after paragraph (1) the 
        following new paragraph:
            ``(2) certifies that the employee has 1 or more qualifying 
        children (within the meaning of section 32(c)(3)) for such 
        taxable year,''.
            (5) Subparagraph (B) of section 3507(c)(2) is amended by 
        striking clauses (i) and (ii) and inserting the following:
                            ``(i) of not more than the credit 
                        percentage in effect under section 32(b)(1) for 
                        an eligible individual with 1 qualifying child 
                        and with earned income not in excess of the 
                        earned income amount in effect under section 
                        32(b)(2) for such an eligible individual, which
                            ``(ii) phases out at the phaseout 
                        percentage in effect under section 32(b)(1) for 
                        such an eligible individual between the 
                        phaseout amount in effect under section 
                        32(b)(2) for such an eligible individual and 
                        the amount of earned income at which the credit 
                        under section 32(a) phases out for such an 
                        eligible individual, or''.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1993.

           PART IV--INCENTIVES FOR INVESTMENT IN REAL ESTATE

Subpart A--Extension of Qualified Mortgage Bonds and Low-Income Housing 
                                 Credit

SEC. 8141. EXTENSION OF QUALIFIED MORTGAGE BONDS.

    (a) In General.--Subparagraph (B) of section 143(a)(1) (defining 
qualified mortgage bond) is amended by striking ``1992'' each place it 
appears and inserting ``1994''.
    (b) Mortgage Credit Certificates.--Subsection (h) of section 25 is 
amended by striking ``1992'' and inserting ``1994''.
    (c) Effective Dates.--
            (1) Bonds.--The amendment made by subsection (a) shall 
        apply to bonds issued after June 30, 1992.
            (2) Certificates.--The amendment made by subsection (b) 
        shall apply to elections for periods after June 30, 1992.

SEC. 8141A. SENSE OF THE SENATE REGARDING PERMANENT EXTENSION OF 
              QUALIFIED MORTGAGE BONDS.

    (a) Findings.--The Senate finds that:
            (1) Low and moderate income families often have difficulty 
        in obtaining affordable mortgage financing.
            (2) The mortgage revenue bond provisions of the Internal 
        Revenue Code are an important tool in providing affordable 
        financing for first-time home buyers.
            (3) The tax-exempt status of mortgage revenue bonds have 
        enabled State and local housing agencies to finance home 
        mortgages for first-time buyers at rates below conventional 
        market rates. This cost differential enables buyers, who 
        otherwise might not be able to get mortgage financing, to 
        obtain a loan at an affordable rate.
            (4) Mortgage revenue bonds are targeted to families with 
        the greatest need. In 1992, the average income of a mortgage 
        revenue bond borrower was 74 percent of median income. Mortgage 
        revenue bonds are only available to buyers who have not owned a 
        home within the past 3 years, earn 115 percent or less of the 
        applicable median income, and buy a principal residence that 
        does not exceed 90 percent of the average home purchase price.
            (5) Prior to its expiration in June, mortgage revenue bonds 
        were the only Federal assistance targeted to first-time home 
        buyers. During the past 15 years, mortgage revenue bonds have 
        financed more than 2 million home purchases and accounted for 1 
        out of every 12 mortgages made to first-time buyers.
            (6) In the last decade, mortgage revenue bonds have been 
        scheduled to sunset 7 times, making administration and timing 
        of bond issues extremely difficult and costly. The mortgage 
        revenue bond program lapsed on June 30, underscoring the need 
        for permanent extension.
    (b) Sense of the Senate.--It is the sense of the Senate that 
mortgage revenue bonds are a vital, proven tool for providing 
affordable home ownership opportunities for low- and moderate-income 
families and that Congress should adopt a permanent extension of the 
mortgage revenue bond program as part of the Internal Revenue Code.

SEC. 8142. LOW-INCOME HOUSING CREDIT.

    (a) Permanent Extension.--
            (1) In general.--Section 42 (relating to low-income housing 
        credit) is amended by striking subsection (o).
            (2) Effective date.--The amendments made by paragraph (1) 
        shall apply to periods ending after June 30, 1992.
    (b) Modifications.--
            (1) Housing credit agency determination of reasonableness 
        of project costs.--Subparagraph (B) of section 42(m)(2) 
        (relating to credit allocated to building not to exceed amount 
        necessary to assure project feasibility) is amended--
                    (A) by striking ``and'' at the end of clause (ii),
                    (B) by striking the period at the end of clause 
                (iii) and inserting ``, and'', and
                    (C) by inserting after clause (iii) the following 
                new clause:
                            ``(iv) the reasonableness of the 
                        developmental and operational costs of the 
                        project.''
            (2) Units with certain full-time students not 
        disqualified.--Subparagraph (D) of section 42(i)(3) (defining 
        low-income unit) is amended to read as follows:
                    ``(D) Certain students not to disqualify unit.--A 
                unit shall not fail to be treated as a low-income unit 
                merely because it is occupied--
                            ``(i) by an individual who is--
                                    ``(I) a student and receiving 
                                assistance under title IV of the Social 
                                Security Act, or
                                    ``(II) enrolled in a job training 
                                program receiving assistance under the 
                                Job Training Partnership Act or under 
                                other similar Federal, State, or local 
                                laws, or
                            ``(ii) entirely by full-time students if 
                        such students are--
                                    ``(I) single parents and their 
                                children and such parents and children 
                                are not dependents (as defined in 
                                section 152) of another individual, or
                                    ``(II) married and file a joint 
                                return.''
            (3) Treasury waivers of certain de minimis errors and 
        recertifications.--Subsection (g) of section 42 (relating to 
        qualified low-income housing projects) is amended by adding at 
        the end thereof the following new paragraph:
            ``(8) Waiver of certain de minimis errors and 
        recertifications.--On application by the taxpayer, the 
        Secretary may waive--
                    ``(A) any recapture under subsection (j) in the 
                case of any de minimis error in complying with 
                paragraph (1), or
                    ``(B) any annual recertification of tenant income 
                for purposes of this subsection, if the entire building 
                is occupied by low-income tenants.''
            (4) Discrimination against tenants prohibited.--Section 
        42(h)(6)(B) (defining extended low-income housing commitment) 
        is amended by redesignating clauses (iv) and (v) as clauses (v) 
        and (vi) and by inserting after clause (iii) the following new 
        clause:
                            ``(iv) which prohibits the refusal to lease 
                        to a holder of a voucher or certificate of 
                        eligibility under section 8 of the United 
                        States Housing Act of 1937 because of the 
                        status of the prospective tenant as such a 
                        holder,''.
            (5) Effective dates.--
                    (A) In general.--Except as provided in subparagraph 
                (B), the amendments made by this subsection shall apply 
                to--
                            (i) determinations under section 42 of the 
                        Internal Revenue Code of 1986 with respect to 
                        housing credit dollar amounts allocated from 
                        State housing credit ceilings after June 30, 
                        1992, or
                            (ii) buildings placed in service after June 
                        30, 1992, to the extent paragraph (1) of 
                        section 42(h) of such Code does not apply to 
                        any building by reason of paragraph (4) 
                        thereof, but only with respect to bonds issued 
                        after such date.
                    (B) Waiver authority and prohibited 
                discrimination.--The amendments made by paragraphs (3) 
                and (4) shall take effect on the date of the enactment 
                of this Act.
    (c) Election To Determine Rent Limitation Based on Number of 
Bedrooms and Deep Rent Skewing.--In the case of a building to which the 
amendments made by subsection (e)(1) or (n)(2) of section 7108 of the 
Revenue Reconciliation Act of 1989 did not apply, the taxpayer may 
elect to have such amendments apply to such building but only with 
respect to tenants first occupying any unit in the building after the 
date of the election, and only if the taxpayer has met the requirements 
of the procedures described in section 42(m)(1)(B)(iii) of the Internal 
Revenue Code of 1986. Such an election may be made only during the 180 
day period beginning on the date of the enactment of this Act and, once 
made, shall be irrevocable.

                     Subpart B--Passive Loss Rules

SEC. 8143. MODIFICATION OF PASSIVE LOSS RULES.

    (a) General Rule.--Section 469 (relating to passive activity losses 
and credits limited) is amended by redesignating subsections (l) and 
(m) as subsections (m) and (n), respectively, and by inserting after 
subsection (k) the following new subsection:
    ``(l) Special Rules for Real Estate Activities.--
            ``(1) Loss from certain rental real estate activities 
        treated as not passive.--If the taxpayer meets the requirements 
        of paragraph (2) for the taxable year, subsection (a) shall not 
        apply to so much of the passive activity loss for such taxable 
        year as does not exceed the least of--
                    ``(A) the lesser of--
                            ``(i) the net loss for such taxable year 
                        from rental real estate activities in which the 
                        taxpayer materially participates, or
                            ``(ii) the net loss for such taxable year 
                        from all rental real estate activities of the 
                        taxpayer,
                    ``(B) the net income of the taxpayer for the 
                taxable year from real property trade or business 
                activities which are not passive activities, or
                    ``(C) the taxable income of the taxpayer for the 
                taxable year determined without regard to this 
                subsection.
        A similar rule shall apply to any passive activity credit.
            ``(2) Requirements.--The taxpayer meets the requirements of 
        this paragraph for any taxable year if more than one-half of 
        the personal services performed in trades or businesses by the 
        taxpayer during such taxable year are performed in real 
        property trades or businesses in which the taxpayer materially 
        participates.
            ``(3) Real property trade or business.--For purposes of 
        this paragraph, the term `real property trade or business' 
        means any real property development, redevelopment, 
        construction, reconstruction, acquisition, conversion, rental, 
        operation, management, leasing, or brokerage trade or business.
            ``(4) Special rules.--
                    ``(A) Personal services as an employee.--For 
                purposes of paragraph (2), personal services performed 
                as an employee shall not be treated as performed in 
                real property trades or businesses. The preceding 
                sentence shall not apply if such employee is a 5-
                percent owner (as defined in section 416(i)(1)(B)) in 
                the employer.
                    ``(B) Closely held c corporations.--This subsection 
                shall not apply to any interests held by a closely held 
                C corporation.
            ``(5) Coordination with subsection (i).--
                    ``(A) In general.--This subsection shall be applied 
                after the application of subsection (i).
                    `'(B) Amounts allowed under subsection (i).--For 
                purposes of this subsection--
                            ``(i) the passive activity loss and passive 
                        activity credit, and
                            ``(ii) the net loss referred to in 
                        paragraph (1)(A),
                shall not include any amount allowed under subsection 
                (i).''
    (b) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1993.

 Subpart C--Provisions Relating to Real Estate Investments by Pension 
                                 Funds

SEC. 8144. REAL ESTATE PROPERTY ACQUIRED BY A QUALIFIED ORGANIZATION.

    (a) Modifications of Exceptions.--Paragraph (9) of section 514(c) 
(relating to real property acquired by a qualified organization) is 
amended by adding at the end thereof the following new subparagraphs:
                    ``(G) Special rules for purposes of the 
                exceptions.--Except as otherwise provided by 
                regulations--
                            ``(i) Small leases disregarded.--For 
                        purposes of clauses (iii) and (iv) of 
                        subparagraph (B), a lease to a person described 
                        in such clause (iii) or (iv) shall be 
                        disregarded if no more than 25 percent of the 
                        leasable floor space in a building (or complex 
                        of buildings) is covered by the lease and if 
                        the lease is on commercially reasonable terms.
                            ``(ii) Commercially reasonable financing.--
                        Clause (v) of subparagraph (B) shall not apply 
                        if the financing is on commercially reasonable 
                        terms.
                    ``(H) Qualifying sales by financial institutions.--
                            ``(i) In general.--In the case of a 
                        qualifying sale by a financial institution, 
                        except as provided in regulations, clauses (i) 
                        and (ii) of subparagraph (B) shall not apply 
                        with respect to financing provided by such 
                        institution for such sale.
                            ``(ii) Qualifying sale.--For purposes of 
                        this clause, there is a qualifying sale by a 
                        financial institution if--
                                    ``(I) a qualified organization 
                                acquires property described in clause 
                                (iii) from a financial institution and 
                                any gain recognized by the financial 
                                institution with respect to the 
                                property is ordinary income,
                                    ``(II) the stated principal amount 
                                of the financing provided by the 
                                financial institution does not exceed 
                                the amount of the outstanding 
                                indebtedness (including accrued but 
                                unpaid interest) of the financial 
                                institution with respect to the 
                                property described in clause (iii) 
                                immediately before the acquisition 
                                referred to in clause (iii) or (v), 
                                whichever is applicable, and
                                    ``(III) the present value 
                                (determined as of the time of the sale 
                                and by using the applicable Federal 
                                rate determined under section 1274(d)) 
                                of the maximum amount payable pursuant 
                                to the financing that is determined by 
                                reference to the revenue, income, or 
                                profits derived from the property 
                                cannot exceed 30 percent of the total 
                                purchase price of the property 
                                (including the contingent payments).
                            ``(iii) Property to which subparagraph 
                        applies.--Property is described in this clause 
                        if such property is foreclosure property, or is 
                        real property which--
                                    ``(I) was acquired by the qualified 
                                organization from a financial 
                                institution which is in conservatorship 
                                or receivership, or from the 
                                conservator or receiver of such an 
                                institution, and
                                    ``(II) was held by the financial 
                                institution at the time it entered into 
                                conservatorship or receivership.
                            ``(iv) Financial institution.--For purposes 
                        of this subparagraph, the term `financial 
                        institution' means--
                                    ``(I) any financial institution 
                                described in section 581 or 591(a),
                                    ``(II) any other corporation which 
                                is a direct or indirect subsidiary of 
                                an institution referred to in subclause 
                                (I) but only if, by virtue of being 
                                affiliated with such institution, such 
                                other corporation is subject to 
                                supervision and examination by a 
                                Federal or State agency which regulates 
                                institutions referred to in subclause 
                                (I), and
                                    ``(III) any person acting as a 
                                conservator or receiver of an entity 
                                referred to in subclause (I) or (II) 
                                (or any government agency or 
                                corporation succeeding to the rights or 
                                interest of such person).
                            ``(v) Foreclosure property.--For purposes 
                        of this subparagraph, the term `foreclosure 
                        property' means any real property acquired by 
                        the financial institution as the result of 
                        having bid on such property at foreclosure, or 
                        by operation of an agreement or process of law, 
                        after there was a default (or a default was 
                        imminent) on indebtedness which such property 
                        secured.''.
    (b) Conforming Amendment.--Paragraph (9) of section 514(c) is 
amended--
            (1) by adding the following new sentence at the end of 
        subparagraph (A): ``For purposes of this paragraph, an interest 
        in a mortgage shall in no event be treated as real property.'', 
        and
            (2) by striking the last sentence of subparagraph (B).
    (c) Effective Dates.--
            (1) In general.--The amendments made by this section shall 
        apply to acquisitions on or after January 1, 1994.
            (2) Small leases.--The provisions of section 
        514(c)(9)(G)(i) of the Internal Revenue Code of 1986 shall, in 
        addition to any leases to which the provisions apply by reason 
        of paragraph (1), apply to leases entered into on or after 
        January 1, 1994.

SEC. 8145. REPEAL OF SPECIAL TREATMENT OF PUBLICLY TREATED 
              PARTNERSHIPS.

    (a) General Rule.--Subsection (c) of section 512 is amended--
            (1) by striking paragraph (2),
            (2) by redesignating paragraph (3) as paragraph (2), and
            (3) by striking ``paragraph (1) or (2)'' in paragraph (2) 
        (as so redesignated) and inserting ``paragraph (1)''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
apply to partnership years beginning on or after January 1, 1994.

SEC. 8146. TITLE-HOLDING COMPANIES PERMITTED TO RECEIVE SMALL AMOUNTS 
              OF UNRELATED BUSINESS TAXABLE INCOME.

    (a) General Rule.--Paragraph (25) of section 501(c) is amended by 
adding at the end thereof the following new subparagraph:
                    ``(G)(i) An organization shall not be treated as 
                failing to be described in this paragraph merely by 
                reason of the receipt of any otherwise disqualifying 
                income which is incidentally derived from the holding 
                of real property.
                    ``(ii) Clause (i) shall not apply if the amount of 
                gross income described in such clause exceeds 10 
                percent of the organization's gross income for the 
                taxable year unless the organization establishes to the 
                satisfaction of the Secretary that the receipt of gross 
                income described in clause (i) in excess of such 
                limitation was inadvertent and reasonable steps are 
                being taken to correct the circumstances giving rise to 
                such income.''
    (b) Conforming Amendment.--Paragraph (2) of section 501(c) is 
amended by adding at the end thereof the following new sentence: 
``Rules similar to the rules of subparagraph (G) of paragraph (25) 
shall apply for purposes of this paragraph.''
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning on or after January 1, 1994.

SEC. 8147. EXCLUSION FROM UNRELATED BUSINESS TAX OF GAINS FROM CERTAIN 
              PROPERTY.

    (a) General Rule.--Subsection (b) of section 512 (relating to 
modifications) is amended by adding at the end thereof the following 
new paragraph:
            ``(16)(A) Notwithstanding paragraph (5)(B), there shall be 
        excluded all gains or losses from the sale, exchange, or other 
        disposition of any real property described in subparagraph (B) 
        if--
                    ``(i) such property was acquired by the 
                organization from--
                            ``(I) a financial institution described in 
                        section 581 or 591(a) which is in 
                        conservatorship or receivership, or
                            ``(II) the conservator or receiver of such 
                        an institution (or any government agency or 
                        corporation succeeding to the rights or 
                        interests of the conservator or receiver),
                    ``(ii) such property is designated by the 
                organization within the 9-month period beginning on the 
                date of its acquisition as property held for sale, 
                except that not more than one-half (by value determined 
                as of such date) of property acquired in a single 
                transaction may be so designated,
                    ``(iii) such sale, exchange, or disposition occurs 
                before the later of--
                            ``(I) the date which is 30 months after the 
                        date of the acquisition of such property, or
                            ``(II) the date specified by the Secretary 
                        in order to assure an orderly disposition of 
                        property held by persons described in 
                        subparagraph (A), and
                    ``(iv) while such property was held by the 
                organization, the aggregate expenditures on 
                improvements and development activities included in the 
                basis of the property are (or were) not in excess of 20 
                percent of the net selling price of such property.
            ``(B) Property is described in this subparagraph if it is 
        real property which--
                    ``(i) was held by the financial institution at the 
                time it entered into conservatorship or receivership, 
                or
                    ``(ii) was foreclosure property (as defined in 
                section 514(c)(9)(H)(v)) which secured indebtedness 
                held by the financial institution at such time.
        For purposes of this subparagraph, real property includes an 
        interest in a mortgage.''
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to property acquired on or after January 1, 1994.

SEC. 8148. EXCLUSION FROM UNRELATED BUSINESS TAX OF CERTAIN FEES AND 
              OPTION PREMIUMS.

    (a) Loan Commitment Fees.--Paragraph (1) of section 512(b) 
(relating to modifications) is amended by inserting ``amounts received 
or accrued as consideration for entering into agreements to make 
loans,'' before ``and annuities''.
    (b) Option Premiums.--The second sentence of section 512(b)(5) is 
amended--
            (1) by striking ``all gains on'' and inserting ``all gains 
        or losses recognized, in connection with the organization's 
        investment activities, from'',
            (2) by striking ``, written by the organization in 
        connection with its investment activities,'' and
            (3) by inserting ``or real property and all gains or losses 
        from the forfeiture of good-faith deposits (that are consistent 
        with established business practice) for the purchase, sale, or 
        lease of real property in connection with the organization's 
        investment activities'' before the period.
    (c) Effective Date.--The amendments made by this section shall 
apply to amounts received on or after January 1, 1994.

SEC. 8149. TREATMENT OF PENSION FUND INVESTMENTS IN REAL ESTATE 
              INVESTMENT TRUSTS.

    (a) General Rule.--Subsection (h) of section 856 (relating to 
closely held determinations) is amended by adding at the end thereof 
the following new paragraph:
            ``(3) Treatment of trusts described in section 401(a).--
                    ``(A) Look-thru treatment.--
                            ``(i) In general.--Except as provided in 
                        clause (ii), in determining whether the stock 
                        ownership requirement of section 542(a)(2) is 
                        met for purposes of paragraph (1)(A), any stock 
                        held by a qualified trust shall be treated as 
                        held directly by its beneficiaries in 
                        proportion to their actuarial interests in such 
                        trust and shall not be treated as held by such 
                        trust.
                            ``(ii) Certain related trusts not 
                        eligible.--Clause (i) shall not apply to any 
                        qualified trust if one or more disqualified 
                        persons (as defined in section 4975(e)(2), 
                        without regard to subparagraphs (B) and (I) 
                        thereof) with respect to such qualified trust 
                        hold in the aggregate 5 percent or more in 
                        value of the interests in the real estate 
                        investment trust and such real estate 
                        investment trust has accumulated earnings and 
                        profits attributable to any period for which it 
                        did not qualify as a real estate investment 
                        trust.
                    ``(B) Coordination with personal holding company 
                rules.--If any entity qualifies as a real estate 
                investment trust for any taxable year by reason of 
                subparagraph (A), such entity shall not be treated as a 
                personal holding company for such taxable year for 
                purposes of part II of subchapter G of this chapter.
                    ``(C) Treatment for purposes of unrelated business 
                tax.--If any qualified trust holds more than 10 percent 
                (by value) of the interests in any pension-held REIT at 
                any time during a taxable year, the trust shall be 
                treated as having for such taxable year gross income 
                from an unrelated trade or business in an amount which 
                bears the same ratio to the aggregate dividends paid 
                (or treated as paid) by the REIT to the trust for the 
                taxable year of the REIT with or within which the 
                taxable year of the trust ends (the `REIT year') as--
                            ``(i) the gross income (less direct 
                        expenses related thereto) of the REIT for the 
                        REIT year from unrelated trades or businesses 
                        (determined as if the REIT were a qualified 
                        trust), bears to
                            ``(ii) the gross income (less direct 
                        expenses related thereto) of the REIT for the 
                        REIT year.
                This subparagraph shall apply only if the ratio 
                determined under the preceding sentence is at least 5 
                percent.
                    ``(D) Pension-held reit.--The purposes of 
                subparagraph (C)--
                            ``(i) In general.--A real estate investment 
                        trust is a pension-held REIT if such trust 
                        would not have qualified as a real estate 
                        investment trust but for the provisions of this 
                        paragraph and if such trust is predominantly 
                        held by qualified trusts.
                            ``(ii) Predominantly held.--For purposes of 
                        clause (i), a real estate investment trust is 
                        predominantly held by qualified trusts if--
                                    ``(I) at least 1 qualified trust 
                                holds more than 25 percent (by value) 
                                of the interests in such real estate 
                                investment trust, or
                                    ``(II) 1 or more qualified trusts 
                                (each of whom own more than 10 percent 
                                by value of the interests in such real 
                                estate investment trust) hold in the 
                                aggregate more than 50 percent (by 
                                value) of the interests in such real 
                                estate investment trust.
                    ``(E) Qualified trust.--For purposes of this 
                paragraph, the term `qualified trust' means any trust 
                described in section 401(a) and exempt from tax under 
                section 501(a).''
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 1993.

Subpart D--Increase in Recovery Period for Nonresidential Real Property

SEC. 8151. INCREASE IN RECOVERY PERIOD FOR NONRESIDENTIAL REAL 
              PROPERTY.

    (a) General Rule.--Paragraph (1) of section 168(c) (relating to 
applicable recovery period) is amended by striking the item relating to 
nonresidential real property and inserting the following:

    ``Nonresidential real property................         38 years.''.
    (b) Effective Date.--
            (1) In general.--Except as provided in paragraph (2), the 
        amendment made by subsection (a) shall apply to property placed 
        in service by the taxpayer on or after February 25, 1993.
            (2) Exception.--The amendments made by this section shall 
        not apply to property placed in service by the taxpayer before 
        January 1, 1994, if--
                    (A) the taxpayer or a qualified person entered into 
                a binding written contract to purchase or construct 
                such property before February 25, 1993, or
                    (B) the construction of such property was commenced 
                by or for the taxpayer or a qualified person before 
                February  25, 1993.
        For purposes of this paragraph, the term ``qualified person'' 
        means any person who transfers his rights in such a contract or 
        such property to the taxpayer but only if the property is not 
        placed in service by such person before such rights are 
        transferred to the taxpayer.

                           PART V--LUXURY TAX

SEC. 8161. REPEAL OF LUXURY EXCISE TAXES OTHER THAN ON PASSENGER 
              VEHICLES.

    (a) In General.--Subchapter A of chapter 31 (relating to retail 
excise taxes) is amended to read as follows:

              ``Subchapter A--Luxury Passenger Automobiles

                              ``Sec. 4001. Imposition of tax.
                              ``Sec. 4002. 1st retail sale; uses, etc. 
                                        treated as sales; determination 
                                        of price.
                              ``Sec. 4003. Special rules.

``SEC. 4001. IMPOSITION OF TAX.

    ``(a) Imposition of Tax.--There is hereby imposed on the 1st retail 
sale of any passenger vehicle a tax equal to 10 percent of the price 
for which so sold to the extent such price exceeds $30,000.
    ``(b) Passenger Vehicle.--
            ``(1) In general.--For purposes of this subchapter, the 
        term `passenger vehicle' means any 4-wheeled vehicle--
                    ``(A) which is manufactured primarily for use on 
                public streets, roads, and highways, and
                    ``(B) which is rated at 6,000 pounds unloaded gross 
                vehicle weight or less.
            ``(2) Special rules.--
                    ``(A) Trucks and vans.--In the case of a truck or 
                van, paragraph (1)(B) shall be applied by substituting 
                `gross vehicle weight' for `unloaded gross vehicle 
                weight'.
                    ``(B) Limousines.--In the case of a limousine, 
                paragraph (1) shall be applied without regard to 
                subparagraph (B) thereof.
    ``(c) Exceptions for Taxicabs, Etc.--The tax imposed by this 
section shall not apply to the sale of any passenger vehicle for use by 
the purchaser exclusively in the active conduct of a trade or business 
of transporting persons or property for compensation or hire.
    ``(d) Exemption for Law Enforcement Uses, Etc.--No tax shall be 
imposed by this section on the sale of any passenger vehicle--
            ``(1) to the Federal Government, or a State or local 
        government, for use exclusively in police, firefighting, search 
        and rescue, or other law enforcement or public safety 
        activities, or in public works activities, or
            ``(2) to any person for use exclusively in providing 
        emergency medical services.
    ``(e) Inflation Adjustment.--
            ``(1) In general.--In the case of any calendar year after 
        1992, the $30,000 amount in subsection (a) and section 4003(a) 
        shall be increased by an amount equal to--
                    ``(A) $30,000, multiplied by
                    ``(B) the cost-of-living adjustment under section 
                1(f)(3) for such calendar year, determined by 
                substituting `calendar year 1990' for `calendar year 
                1992' in subparagraph (B) thereof.
            ``(2) Rounding.--If any amount as adjusted under paragraph 
        (1) is not a multiple of $100, such amount shall be rounded to 
        the nearest multiple of $100.
    ``(f) Termination.--The tax imposed by this section shall not apply 
to any sale or use after December 31, 1999.

``SEC. 4002. 1ST RETAIL SALE; USES, ETC. TREATED AS SALES; 
              DETERMINATION OF PRICE.

    ``(a) 1st Retail Sale.--For purposes of this subchapter, the term 
`1st retail sale' means the 1st sale, for a purpose other than resale, 
after manufacture, production, or importation.
    ``(b) Use Treated as Sale.--
            ``(1) In general.--If any person uses a passenger vehicle 
        (including any use after importation) before the 1st retail 
        sale of such vehicle, then such person shall be liable for tax 
        under this subchapter in the same manner as if such vehicle 
        were sold at retail by him.
            ``(2) Exemption for further manufacture.--Paragraph (1) 
        shall not apply to use of a vehicle as material in the 
        manufacture or production of, or as a component part of, 
        another vehicle taxable under this subchapter to be 
        manufactured or produced by him.
            ``(3) Exemption for demonstration use.--Paragraph (1) shall 
        not apply to any use of a passenger vehicle as a demonstrator.
            ``(4) Exception for use after importation of certain 
        vehicles.--Paragraph (1) shall not apply to the use of a 
        vehicle after importation if the user or importer establishes 
        to the satisfaction of the Secretary that the 1st use of the 
        vehicle occurred before January 1, 1991, outside the United 
        States.
            ``(5) Computation of tax.--In the case of any person made 
        liable for tax by paragraph (1), the tax shall be computed on 
        the price at which similar vehicles are sold at retail in the 
        ordinary course of trade, as determined by the Secretary.
    ``(c) Leases Considered as Sales.--For purposes of this 
subchapter--
            ``(1) In general.--Except as otherwise provided in this 
        subsection, the lease of a vehicle (including any renewal or 
        any extension of a lease or any subsequent lease of such 
        vehicle) by any person shall be considered a sale of such 
        vehicle at retail.
            ``(2) Special rules for long-term leases.--
                    ``(A) Tax not imposed on sale for leasing in a 
                qualified lease.--The sale of a passenger vehicle to a 
                person engaged in a passenger vehicle leasing or rental 
                trade or business for leasing by such person in a long-
                term lease shall not be treated as the 1st retail sale 
                of such vehicle.
                    ``(B) Long-term lease.--For purposes of 
                subparagraph (A), the term `long-term lease' means any 
                long-term lease (as defined in section 4052).
                    ``(C) Special rules.--In the case of a long-term 
                lease of a vehicle which is treated as the 1st retail 
                sale of such vehicle--
                            ``(i) Determination of price.--The tax 
                        under this subchapter shall be computed on the 
                        lowest price for which the vehicle is sold by 
                        retailers in the ordinary course of trade.
                            ``(ii) Payment of tax.--Rules similar to 
                        the rules of section 4217(e)(2) shall apply.
                            ``(iii) No tax where exempt use by 
                        lessee.--No tax shall be imposed on any lease 
                        payment under a long-term lease if the lessee's 
                        use of the vehicle under such lease is an 
                        exempt use (as defined in section 4003(b)) of 
                        such vehicle.
    ``(d) Determination of Price.--
            ``(1) In general.--In determining price for purposes of 
        this subchapter--
                    ``(A) there shall be included any charge incident 
                to placing the passenger vehicle in condition ready for 
                use,
                    ``(B) there shall be excluded--
                            ``(i) the amount of the tax imposed by this 
                        subchapter,
                            ``(ii) if stated as a separate charge, the 
                        amount of any retail sales tax imposed by any 
                        State or political subdivision thereof or the 
                        District of Columbia, whether the liability for 
                        such tax is imposed on the vendor or vendee, 
                        and
                            ``(iii) the value of any component of such 
                        passenger vehicle if--
                                    ``(I) such component is furnished 
                                by the 1st user of such passenger 
                                vehicle, and
                                    ``(II) such component has been used 
                                before such furnishing, and
                    ``(C) the price shall be determined without regard 
                to any trade-in.
            ``(2) Other rules.--Rules similar to the rules of 
        paragraphs (2) and (4) of section 4052(b) shall apply for 
        purposes of this subchapter.

``SEC. 4003. SPECIAL RULES.

    ``(a) Separate Purchase of Vehicle and Parts and Accessories 
Therefor.--Under regulations prescribed by the Secretary--
            ``(1) In general.--Except as provided in paragraph (2), 
        if--
                    ``(A) the owner, lessee, or operator of any 
                passenger vehicle installs (or causes to be installed) 
                any part or accessory on such vehicle, and
                    ``(B) such installation is not later than the date 
                6 months after the date the vehicle was 1st placed in 
                service,
        then there is hereby imposed on such installation a tax equal 
        to 10 percent of the price of such part or accessory and its 
        installation.
            ``(2) Limitation.--The tax imposed by paragraph (1) on the 
        installation of any part or accessory shall not exceed 10 
        percent of the excess (if any) of--
                    ``(A) the sum of--
                            ``(i) the price of such part or accessory 
                        and its installation,
                            ``(ii) the aggregate price of the parts and 
                        accessories (and their installation) installed 
                        before such part or accessory, plus
                            ``(iii) the price for which the passenger 
                        vehicle was sold, over
                    ``(B) $30,000.
            ``(3) Exceptions.--Paragraph (1) shall not apply if--
                    ``(A) the part or accessory installed is a 
                replacement part or accessory,
                    ``(B) the part or accessory is installed to enable 
                or assist an individual with a disability to operate 
                the vehicle, or to enter or exit the vehicle, by 
                compensating for the effect of such disability, or
                    ``(C) the aggregate price of the parts and 
                accessories (and their installation) described in 
                paragraph (1) with respect to the vehicle does not 
                exceed $200 (or such other amount or amounts as the 
                Secretary may by regulation prescribe).
        The price of any part or accessory (and its installation) to 
        which paragraph (1) does not apply by reason of this paragraph 
        shall not be taken into account under paragraph (2)(A).
            ``(4) Installers secondarily liable for tax.--The owners of 
        the trade or business installing the parts or accessories shall 
        be secondarily liable for the tax imposed by this subsection.
    ``(b) Imposition of Tax on Sales, Etc., Within 2 Years of Vehicles 
Purchased Tax-Free.--
            ``(1) In general.--If--
                    ``(A) no tax was imposed under this subchapter on 
                the 1st retail sale of any passenger vehicle by reason 
                of its exempt use, and
                    ``(B) within 2 years after the date of such 1st 
                retail sale, such vehicle is resold by the purchaser or 
                such purchaser makes a substantial nonexempt use of 
                such vehicle,
        then such sale or use of such vehicle by such purchaser shall 
        be treated as the 1st retail sale of such vehicle for a price 
        equal to its fair market value at the time of such sale or use.
            ``(2) Exempt use.--For purposes of this subsection, the 
        term `exempt use' means any use of a vehicle if the 1st retail 
        sale of such vehicle is not taxable under this subchapter by 
        reason of such use.
    ``(c) Parts and Accessories Sold With Taxable Passenger Vehicle.--
Parts and accessories sold on, in connection with, or with the sale of 
any passenger vehicle shall be treated as part of the vehicle.
    ``(d) Partial Payments, Etc.--In the case of a contract, sale, or 
arrangement described in paragraph (2), (3), or (4) of section 4216(c), 
rules similar to the rules of section 4217(e)(2) shall apply for 
purposes of this subchapter.''
    (b) Technical Amendments.--
            (1) Subsection (c) of section 4221 is amended by striking 
        ``4002(b), 4003(c), 4004(a)'' and inserting ``4001(d)''.
            (2) Subsection (d) of section 4222 is amended by striking 
        ``4002(b), 4003(c), 4004(a)'' and inserting ``4001(d)''.
            (3) The table of subchapters for chapter 31 is amended by 
        striking the item relating to subchapter A and inserting the 
        following:

                              ``Subchapter A. Luxury passenger 
                                        vehicles.''
    (c) Effective Date.--The amendments made by this section shall take 
effect on January 1, 1993.

SEC. 8162. EXEMPTION FROM LUXURY EXCISE TAX FOR CERTAIN EQUIPMENT 
              INSTALLED ON PASSENGER VEHICLES FOR USE BY DISABLED 
              INDIVIDUALS.

    (a) In General.--Paragraph (3) of section 4004(b) (relating to 
separate purchase of article and parts and accessories therefor), as in 
effect on the day before the date of the enactment of this Act, is 
amended--
            (1) by striking ``or'' at the end of subparagraph (A),
            (2) by redesignating subparagraph (B) as subparagraph (C),
            (3) by inserting after subparagraph (A) the following new 
        subparagraph:
                    ``(B) the part or accessory is installed on a 
                passenger vehicle to enable or assist an individual 
                with a disability to operate the vehicle, or to enter 
                or exit the vehicle, by compensating for the effect of 
                such disability, or'', and
            (4) by inserting after subparagraph (C) the following flush 
        sentence:
        ``The price of any part or accessory (and its installation) to 
        which paragraph (1) does not apply by reason of this paragraph 
        shall not be taken into account under paragraph (2)(A).''
    (b) Effective Date.--The amendments made by this section shall take 
effect as if included in the amendments made by section 11221(a) of the 
Omnibus Budget Reconciliation Act of 1990.
    (c) Period for Filing Claims.--If refund or credit of any 
overpayment of tax resulting from the application of the amendments 
made by this section is prevented at any time before the close of the 
1-year period beginning on the date of the enactment of this Act by the 
operation of any law or rule of law (including res judicata), refund or 
credit of such overpayment (to the extent attributable to such 
amendments) may, nevertheless, be made or allowed if claim therefor is 
filed before the close of such 1-year period.

SEC. 8163. TAX ON DIESEL FUEL USED IN NONCOMMERCIAL BOATS.

    (a) General Rule.--
            (1) Paragraph (2) of section 4092(a) (defining diesel fuel) 
        is amended by striking ``or a diesel-powered train'' and 
        inserting ``, a diesel-powered train, or a diesel-powered 
        boat''.
            (2) Paragraph (1) of section 4041(a) is amended--
                    (A) by striking ``diesel-powered highway vehicle'' 
                each place it appears and inserting ``diesel-powered 
                highway vehicle or diesel-powered boat'', and
                    (B) by striking ``such vehicle'' and inserting 
                ``such vehicle or boat''.
            (3) Subparagraph (B) of section 4092(b)(1) is amended by 
        striking ``commercial and noncommercial vessels'' each place it 
        appears and inserting ``vessels for use in an off-highway 
        business use (as defined in section 6421(e)(2)(B))''.
    (b) Exemption for Use in Fisheries or Commercial Navigation.--
Subparagraph (B) of section 6421(e)(2) is amended to read as follows:
                    ``(B) Uses in boats.--
                            ``(i) In general.--Except as otherwise 
                        provided in this subparagraph, the term `off-
                        highway business use' does not include any use 
                        in a motorboat.
                            ``(ii) Fisheries and whaling.--The term 
                        `off-highway business use' shall include any 
                        use in a vessel employed in the fisheries or in 
                        the whaling business.
                            ``(iii) Exception for diesel fuel.--The 
                        term `off-highway business use' shall include 
                        the use of diesel fuel in a boat in the active 
                        conduct of--
                                    ``(I) a trade or business of 
                                commercial fishing or transporting 
                                persons or property for compensation or 
                                hire, or
                                    ``(II) any other trade or business, 
                                except that this subclause shall not 
                                apply to noncommercial uses described 
                                in clause (iv) during a taxable period.
                            ``(iv) Taxable periods for noncommercial 
                        boats.--In the case of any use of diesel fuel 
                        in a boat used predominantly in any activity 
                        which is of a type generally considered to 
                        constitute entertainment, amusement, or 
                        recreation, the taxable period for purposes of 
                        clause (iii)(II) shall be--
                                    ``(I) in the case so much of the 
                                tax under section 4091 as is 
                                attributable to 4.3 cents of the diesel 
                                fuel deficit reduction rate imposed 
                                under such section, any period 
                                beginning after September 30, 1993, and
                                    ``(II) in the case so much of the 
                                tax under section 4091 as is not 
                                described in subclause (I) the period 
                                beginning after January 1, 1994, and 
                                ending on December 31, 1999.
    (c) Retention of Taxes in General Fund.--
            (1) Taxes imposed at highway trust fund financing rate.--
        Paragraph (4) of section 9503(b) (relating to transfers to 
        Highway Trust Fund) is amended--
                    (A) by striking ``and'' at the end of subparagraph 
                (A),
                    (B) by striking the period at the end of 
                subparagraph (B) and inserting ``, and'', and
                    (C) by adding at the end thereof the following new 
                subparagraph:
                    ``(C) there shall not be taken into account the 
                taxes imposed by sections 4041 and 4091 on diesel fuel 
                sold for use or used as fuel in a diesel-powered 
                boat.''
            (2) Taxes imposed at leaking underground storage tank trust 
        fund financing rate.--Subsection (b) of section 9508 (relating 
        to transfers to Leaking Underground Storage Tank Trust Fund) is 
        amended by adding at the end thereof the following new 
        sentence: ``For purposes of this subsection, there shall not be 
        taken into account the taxes imposed by sections 4041 and 4091 
        on diesel fuel sold for use or used as fuel in a diesel-powered 
        boat.''
    (d) Effective Date.--
            (1) In general.--Except as provided in paragraph (2), the 
        amendments made by this section shall take effect on October 1, 
        1993.
            (2) Special rule.--No tax shall be imposed before January 
        1, 1994, under section 4091 of the Internal Revenue Code of 
        1986 by reason of the amendments made by this section, other 
        than the portion of such tax as is attributable to 4.3 cents of 
        the diesel fuel deficit reduction rate imposed by such section.

                         PART VI--OTHER CHANGES

SEC. 8171. ALTERNATIVE MINIMUM TAX TREATMENT OF CONTRIBUTIONS OF 
              APPRECIATED PROPERTY.

    (a) Repeal of Tax Preference.--Subsection (a) of section 57 is 
amended by striking paragraph (6) (relating to appreciated property 
charitable deduction) and by redesignating paragraph (7) as paragraph 
(6).
    (b) Effect on Adjusted Current Earnings.--Paragraph (4) of section 
56(g) is amended by adding at the end thereof the following new 
subparagraph:
                    ``(J) Treatment of charitable contributions.--
                Notwithstanding subparagraphs (B) and (C), no 
                adjustment related to the earnings and profits effects 
                of any charitable contribution shall be made in 
                computing adjusted current earnings.''
    (c) Conforming Amendment.--Subclause (II) of section 
53(d)(1)(B)(ii) is amended by striking ``(5) and (6)'' and inserting 
``(5)''.
    (d) Effective Date.--The amendments made by this section shall 
apply to contributions made after June 30, 1992, except that in the 
case of any contribution of capital gain property which is not tangible 
personal property, such amendments shall apply only if the contribution 
is made after December 31, 1992.

SEC. 8172. SUBSTANTIATION REQUIREMENT FOR DEDUCTION OF CERTAIN 
              CHARITABLE CONTRIBUTIONS.

    (a) Substantiation Requirement.--Section 170(f) (providing special 
rules relating to the deduction of charitable contributions and gifts) 
is amended by adding at the end the following new paragraph:
            ``(8) Substantiation requirement for certain 
        contributions.--
                    ``(A) General rule.--No deduction shall be allowed 
                under subsection (a) for any contribution of $250 or 
                more unless the taxpayer substantiates the contribution 
                by a contemporaneous written acknowledgment of the 
                contribution by the donee organization that meets the 
                requirements of subparagraph (B).
                    ``(B) Content of acknowledgment.--
                            ``(i) In general.--An acknowledgment meets 
                        the requirements of this subparagraph if it 
                        provides information sufficient to substantiate 
                        the amount of the deductible contribution. 
                        Nothing in this clause shall be construed as 
                        requiring the donee organization to estimate 
                        the value of a noncash contribution.
                            ``(ii) Quid pro quo contributions.--If the 
                        contribution was made by means of a payment 
                        part of which constituted consideration for 
                        goods or services provided by the donee 
                        organization, the acknowledgment must provide a 
                        good faith estimate of the value of such goods 
                        or services. The preceding sentence shall not 
                        apply to any payment made to an organization, 
                        organized exclusively for religious purposes, 
                        in return for which the taxpayer receives 
                        solely an intangible religious benefit that 
                        generally is not sold in a commercial 
                        transaction outside the donative context.
                    ``(C) Contemporaneous.--For purposes of 
                subparagraph (A), an acknowledgment shall be considered 
                to be contemporaneous if the taxpayer obtains the 
                acknowledgment on or before the earlier of--
                            ``(i) the date on which the taxpayer files 
                        a return for the taxable year in which the 
                        contribution was made, or
                            ``(ii) the due date (including extensions) 
                        for filing such return.
                    ``(D) Substantiation not required for contributions 
                reported by the donee organization.--Subparagraph (A) 
                shall not apply to a contribution if the donee 
                organization files a return, on such form and in 
                accordance with such regulations as the Secretary may 
                prescribe, which includes the information described in 
                subparagraph (B) with respect to the contribution.
                    ``(E) Regulations.--The Secretary shall prescribe 
                such regulations as may be necessary or appropriate to 
                carry out the purposes of this paragraph, including 
                regulations that may provide that some or all of the 
                requirements of this paragraph do not apply in 
                appropriate cases.''
    (b) Effective Date.--The provisions of this section shall apply to 
contributions made on or after January 1, 1994.

SEC. 8173. DISCLOSURE RELATED TO QUID PRO QUO CONTRIBUTIONS.

    (a) Disclosure Requirement.--Subchapter B of chapter 61 (relating 
to information and returns) is amended by redesignating section 6115 as 
section 6116 and by inserting after section 6114 the following new 
section:

``SEC. 6115. DISCLOSURE RELATED TO QUID PRO QUO CONTRIBUTIONS.

    ``(a) Disclosure Requirement.--If an organization described in 
section 170(c) (other than paragraph (1) thereof) receives a quid pro 
quo contribution in excess of $75, the organization shall, in 
connection with the solicitation or receipt of the contribution, 
provide a written statement which--
            ``(1) informs the donor that the amount of the contribution 
        that is deductible for Federal income tax purposes is limited 
        to the excess of the amount of any money and the value of any 
        property other than money contributed by the donor over the 
        value of the goods or services provided by the organization, 
        and
            ``(2) provides the donor with a good faith estimate of the 
        value of such goods or services.
    ``(b) Quid Pro Quo Contribution.--For purposes of this section, the 
term `quid pro quo contribution' means a payment made partly as a 
contribution and partly in consideration for goods or services provided 
to the payor by the donee organization. A quid pro quo contribution 
does not include any payment made to an organization, organized 
exclusively for religious purposes, in return for which the taxpayer 
receives solely an intangible religious benefit that generally is not 
sold in a commercial transaction outside the donative context.''
    (b) Penalty for Failure To Disclose.--Part I of subchapter B of 
chapter 68 (relating to assessable penalties) is amended by inserting 
after section 6713 the following new section:

``SEC. 6714. FAILURE TO MEET DISCLOSURE REQUIREMENTS APPLICABLE TO QUID 
              PRO QUO CONTRIBUTIONS.

    ``(a) Imposition of Penalty.--If an organization fails to meet the 
disclosure requirement of section 6115 with respect to a quid pro quo 
contribution, such organization shall pay a penalty of $10 for each 
contribution in respect of which the organization fails to make the 
required disclosure, except that the total penalty imposed by this 
subsection with respect to a particular fundraising event or mailing 
shall not exceed $5,000.
    ``(b) Reasonable Cause Exception.--No penalty shall be imposed 
under this section with respect to any failure if it is shown that such 
failure is due to reasonable cause.''
    (c) Clerical Amendments.--
            (1) The table for subchapter B of chapter 61 is amended by 
        striking the item relating to section 6115 and inserting the 
        following new items:

                              ``Sec. 6115. Disclosure related to quid 
                                        pro quo contributions.
                              ``Sec. 6116. Cross reference.''

            (2) The table for part I of subchapter B of chapter 68 is 
        amended by inserting after the item for section 6713 the 
        following new item:

                              ``Sec. 6714. Failure to meet disclosure 
                                        requirements applicable to quid 
                                        pro quo contributions.''

    (d) Effective Date.--The provisions of this section shall apply to 
quid pro quo contributions made on or after January 1, 1994.

SEC. 8174. CERTAIN TRANSFERS TO RAILROAD RETIREMENT ACCOUNT MADE 
              PERMANENT.

    Subsection (c)(1)(A) of section 224 of the Railroad Retirement 
Solvency Act of 1983 (relating to section 72(r) revenue increase 
transferred to certain railroad accounts) is amended by striking ``with 
respect to benefits received before October 1, 1992''.

SEC. 8175. TEMPORARY EXTENSION OF DEDUCTION FOR HEALTH INSURANCE COSTS 
              OF SELF-EMPLOYED INDIVIDUALS.

    (a) In General.--
            (1) Extension.--Paragraph (6) of section 162(l) (relating 
        to special rules for health insurance costs of self-employed 
        individuals) is amended by striking ``June 30, 1992'' and 
        inserting ``December 31, 1993''.
            (2) Conforming amendment.--Paragraph (2) of section 110(a) 
        of the Tax Extension Act of 1991 is hereby repealed.
            (3) Effective date.--The amendments made by this subsection 
        shall apply to taxable years ending after June 30, 1992.
    (b) Determination of Eligibility for Employer-Sponsored Health 
Plan.--
            (1) In general.--Paragraph (2)(B) of section 162(l) is 
        amended to read as follows:
                    ``(B) Other coverage.--Paragraph (1) shall not 
                apply to any taxpayer for any calendar month for which 
                the taxpayer is eligible to participate in any 
                subsidized health plan maintained by any employer of 
                the taxpayer or of the spouse of the taxpayer.''
            (2) Effective date.--The amendment made by paragraph (1) 
        shall apply to taxable years beginning after December 31, 1992.

              Part VII--Investment in Indian Reservations

SEC. 8181. INVESTMENT TAX CREDIT FOR PROPERTY ON INDIAN RESERVATIONS.

    (a) Allowance of Indian Reservation Credit.--Section 46 (relating 
to investment credits) is amended by striking ``and'' at the end of 
paragraph (2), by striking the period at the end of paragraph (3) and 
inserting ``, and'', and by adding after paragraph (3) the following 
new paragraph:
            ``(4) the Indian reservation credit.''
    (b) Amount of Indian Reservation Credit.--
            (1) In general.--Section 48 (relating to the energy credit 
        and the reforestation credit) is amended by adding after 
        subsection (b) the following new subsection:
    ``(c) Indian Reservation Credit.--
            ``(1) In general.--For purposes of section 46, the Indian 
        reservation credit for any taxable year is the Indian 
        reservation percentage of the qualified investment in qualified 
        Indian reservation property placed in service during such 
        taxable year, determined in accordance with the following 
        table:

          ``In the case of qualified
                                                                       
                  Indian reservation property
                                                 The Indian reservation
                  which is:
                                                         percentage is:
                  Reservation personal property......          10      
                  New reservation construction                 15      
                    property.
                  Reservation infrastructure                  15.      
                    investment.

            ``(2) Qualified investment in qualified indian reservation 
        property defined.--For purposes of this subpart--
                    ``(A) In general.--The term `qualified Indian 
                reservation property' means property--
                            ``(i) which is--
                                    ``(I) reservation personal 
                                property,
                                    ``(II) new reservation construction 
                                property, or
                                    ``(III) reservation infrastructure 
                                investment, and
                            ``(ii) not acquired (directly or 
                        indirectly) by the taxpayer from a person who 
                        is related to the taxpayer (within the meaning 
                        of section 465(b)(3)(C)).
                The term `qualified Indian reservation property' does 
                not include any property (or any portion thereof) 
                placed in service for purposes of conducting or housing 
                class I, II, or III gaming (as defined in section 4 of 
                the Indian Regulatory Act (25 U.S.C. 2703)).
                    ``(B) Qualified investment.--The term `qualified 
                investment' means--
                            ``(i) in the case of reservation 
                        infrastructure investment, the amount expended 
                        by the taxpayer for the acquisition or 
                        construction of the reservation infrastructure 
                        investment; and
                            ``(ii) in the case of all other qualified 
                        Indian reservation property, the taxpayer's 
                        basis for such property.
                    ``(C) Reservation personal property.--The term 
                `reservation personal property' means qualified 
                personal property which is used by the taxpayer 
                predominantly in the active conduct of a trade or 
                business within an Indian reservation. Property shall 
                not be treated as `reservation personal property' if it 
                is used or located outside the Indian reservation on a 
                regular basis.
                    ``(D) Qualified personal property.--The term 
                `qualified personal property' means property--
                            ``(i) for which depreciation is allowable 
                        under section 168,
                            ``(ii) which is not--
                                    ``(I) nonresidential real property,
                                    ``(II) residential rental property, 
                                or
                                    ``(III) real property which is not 
                                described in (I) or (II) and which has 
                                a class life of more than 12.5 years.
                For purposes of this subparagraph, the terms 
                `nonresidential real property', `residential rental 
                property', and `class life' have the respective 
                meanings given such terms by section 168.
                    ``(E) New reservation construction property.--The 
                term `new reservation construction property' means 
                qualified real property--
                            ``(i) which is located in an Indian 
                        reservation,
                            ``(ii) which is used by the taxpayer 
                        predominantly in the active conduct of a trade 
                        or business within an Indian reservation, and
                            ``(iii) which is originally placed in 
                        service by the taxpayer.
                    ``(F) Qualified real property.--The term `qualified 
                real property' means property for which depreciation is 
                allowable under section 168 and which is described in 
                clause (I), (II), or (III) of subparagraph (D)(ii).
                    ``(G) Reservation infrastructure investment.--
                            ``(i) In general.--The term `reservation 
                        infrastructure investment' means qualified 
                        personal property or qualified real property 
                        which--
                                    ``(I) benefits the tribal 
                                infrastructure,
                                    ``(II) is available to the general 
                                public, and
                                    ``(III) is placed in service in 
                                connection with the taxpayer's active 
                                conduct of a trade or business within 
                                an Indian reservation.
                            ``(ii) Property may be located outside the 
                        reservation.--Qualified personal property and 
                        qualified real property used or located outside 
                        an Indian reservation shall be reservation 
                        infrastructure investment only if its purpose 
                        is to connect to existing tribal infrastructure 
                        in the reservation, and shall include, but not 
                        be limited to, roads, power lines, water 
                        systems, railroad spurs, and communications 
                        facilities.
                    ``(H) Coordination with other credits.--The term 
                `qualified Indian reservation property' shall not 
                include any property with respect to which the energy 
                credit or the rehabilitation credit is allowed.
            ``(3) Real estate rentals.--For purposes of this section, 
        the rental to others of real property located within an Indian 
        reservation shall be treated as the active conduct of a trade 
        or business in an Indian reservation.
            ``(4) Indian reservation defined.--For purposes of this 
        subpart, the term `Indian reservation' means a reservation, as 
        defined in--
                    ``(A) section 3(d) of the Indian Financing Act of 
                1974 (25 U.S.C. 1452(d)), or
                    ``(B) section 4(10) of the Indian Child Welfare Act 
                of 1978 (25 U.S.C. 1903(10)).
            ``(5) Limitation based on unemployment.--
                    ``(A) General rule.--The Indian reservation credit 
                allowed under section 46 for any taxable year shall 
                equal--
                            ``(i) if the Indian unemployment rate on 
                        the applicable Indian reservation for which the 
                        credit is sought exceeds 300 percent of the 
                        national average unemployment rate at any time 
                        during the calendar year in which the property 
                        is placed in service or during the immediately 
                        preceding 2 calendar years, 100 percent of such 
                        credit,
                            ``(ii) if such Indian unemployment rate 
                        exceeds 150 percent but not 300 percent, 50 
                        percent of such credit, and
                            ``(iii) if such Indian unemployment rate 
                        does not exceed 150 percent, 0 percent of such 
                        credit.
                    ``(B) Special rule for large projects.--In the case 
                of a qualified Indian reservation property which has 
                (or is a component of a project which has) a projected 
                construction period of more than 2 years or a cost of 
                more than $1,000,000, subparagraph (A) shall apply by 
                substituting `during the earlier of the calendar year 
                in which the taxpayer enters into a binding agreement 
                to make a qualified investment or the first calendar 
                year in which the taxpayer has expended at least 10 
                percent of the taxpayer's qualified investment, or the 
                preceding calendar year' for `during the calendar year 
                in which the property is placed in service or during 
                the immediately preceding 2 calendar years'.
                    ``(C) Determination of indian unemployment.--For 
                purposes of this paragraph, with respect to any Indian 
                reservation, the Indian unemployment rate shall be 
                based upon Indians unemployed and able to work, and 
                shall be certified by the Secretary of the Interior.
            ``(6) Coordination with nonrevenue laws.--Any reference in 
        this subsection to a provision not contained in this title 
        shall be treated for purposes of this subsection as a reference 
        to such provision as in effect on the date of the enactment of 
        this paragraph.''
            (2) Lodging to qualify.--Paragraph (2) of section 50(b) 
        (relating to property used for lodging) is amended--
                    (A) by striking ``and'' at the end of subparagraph 
                (C),
                    (B) by striking the period at the end of 
                subparagraph (D) and inserting ``; and'' and
                    (C) by adding at the end thereof the following 
                subparagraph:
                    ``(E) new reservation construction property.''
    (c) Recapture.--Subsection (a) of section 50 (relating to recapture 
in case of dispositions, etc.), is amended by adding at the end thereof 
the following new paragraph:
            ``(6) Special rules for indian reservation property.--
                    ``(A) In general.--If, during any taxable year, 
                property with respect to which the taxpayer claimed an 
                Indian reservation credit--
                            ``(i) is disposed of, or
                            ``(ii) in the case of reservation personal 
                        property--
                                    ``(I) otherwise ceases to be 
                                investment credit property with respect 
                                to the taxpayer, or
                                    ``(II) is removed from the Indian 
                                reservation, converted or otherwise 
                                ceases to be Indian reservation 
                                property,
                the tax under this chapter for such taxable year shall 
                be increased by the amount described in subparagraph 
                (B).
                    ``(B) Amount of increase.--The increase in tax 
                under subparagraph (A) shall equal the aggregate 
                decrease in the credits allowed under section 38 by 
                reason of section 48(c) for all prior taxable years 
                which would have resulted had the qualified investment 
                taken into account with respect to the property been 
                limited to an amount which bears the same ratio to the 
                qualified investment with respect to such property as 
                the period such property was held by the taxpayer bears 
                to the applicable recovery period under section 168(g).
                    ``(C) Coordination with other recapture 
                provisions.--In the case of property to which this 
                paragraph applies, paragraph (1) shall not apply and 
                the rules of paragraphs (3), (4), and (5) shall 
                apply.''
    (d) Basis Adjustment To Reflect Investment Credit.--Paragraph (3) 
of section 50(c) (relating to basis adjustment to investment credit 
property) is amended by striking ``energy credit or reforestation 
credit'' and inserting ``energy credit, reforestation credit or Indian 
reservation credit other than with respect to any expenditure for new 
reservation construction property''.
    (e) Certain Governmental Use Property To Qualify.--Paragraph (4) of 
section 50(b) (relating to property used by governmental units or 
foreign persons or entities) is amended by redesignating subparagraphs 
(D) and (E) as subparagraphs (E) and (F), respectively, and inserting 
after subparagraph (C) the following new subparagraph:
                    ``(D) Exception for reservation infrastructure 
                investment.--This paragraph shall not apply for 
                purposes of determining the Indian reservation credit 
                with respect to reservation infrastructure 
                investment.''
    (f) Application of At-Risk Rules.--Subparagraph (C) of section 
49(a)(1) is amended by striking ``and'' at the end of clause (ii), by 
striking the period at the end of clause (iii) and inserting ``, and'', 
and by adding at the end the following new clause:
                            ``(iv) the qualified investment in 
                        qualified Indian reservation property.''
    (g) Clerical Amendments.--
            (1) Section 48 is amended by striking the heading and 
        inserting the following:

``SEC. 48. ENERGY CREDIT; REFORESTATION CREDIT; INDIAN RESERVATION 
              CREDIT.''

            (2) The table of sections for subpart E of part IV of 
        subchapter A of chapter 1 is amended by striking out the item 
        relating to section 48 and inserting the following:

                              ``Sec. 48. Energy credit; reforestation 
                                        credit; Indian reservation 
                                        credit.''
    (h) Effective Date.--The amendments made by this section shall 
apply to property placed in service after December 31, 1993.

SEC. 8182. INDIAN EMPLOYMENT CREDIT.

    (a) Allowance of Indian Employment Credit.--Section 38(b) (relating 
to general business credits) is amended by striking ``plus'' at the end 
of paragraph (6), by striking the period at the end of paragraph (7) 
and inserting ``, plus'', and by adding after paragraph (7) the 
following new paragraph:
            ``(8) the Indian employment credit as determined under 
        section 45(a).''
    (b) Amount of Indian Employment Credit.--Subpart D of Part IV of 
subchapter A of chapter 1 (relating to business related credits) is 
amended by adding at the end thereof the following new section:

``SEC. 45. INDIAN EMPLOYMENT CREDIT.

    ``(a) Amount of Credit.--
            ``(1) In general.--For purposes of section 38, the amount 
        of the Indian employment credit determined under this section 
        with respect to any employer for any taxable year is 10 percent 
        (30 percent in the case of an employer with at least 85 percent 
        Indian employees throughout the taxable year) of the sum of--
                    ``(A) the qualified wages paid or incurred during 
                such taxable year, plus
                    ``(B) qualified employee health insurance costs 
                paid or incurred during such taxable year.
        In no event shall the amount of the Indian employment credit 
        for any taxable year exceed the credit limitation amount 
        determined under subsection (e) for such taxable year.
            ``(2) Indian employee.--For purposes of paragraph (1), the 
        term `Indian employee' means an employee who is an enrolled 
        member of an Indian tribe or the spouse of such a member.
    ``(b) Qualified Wages; Qualified Employee Health Insurance Costs.--
For purposes of this section--
            ``(1) Qualified wages.--
                    ``(A) In general.--The term `qualified wages' means 
                any wages paid or incurred by an employer for services 
                performed by an employee while such employee is a 
                qualified employee.
                    ``(B) Coordination with targeted jobs credit.--The 
                term `qualified wages' shall not include wages 
                attributable to service rendered during the 1-year 
                period beginning with the day the individual begins 
                work for the employer if any portion of such wages is 
                taken into account in determining the credit under 
                section 51.
            ``(2) Qualified employee health insurance costs.--
                    ``(A) In general.--The term `qualified employee 
                health insurance costs' means any amount paid or 
                incurred by an employer for health insurance to the 
                extent such amount is attributable to coverage provided 
                to any employee while such employee is a qualified 
                employee.
                    ``(B) Exception for amounts paid under salary 
                reduction arrangements.--No amount paid or incurred for 
                health insurance pursuant to a salary reduction 
                arrangement shall be taken into account under 
                subparagraph (A).
    ``(c) Qualified Employee.--For purposes of this section--
            ``(1) In general.--Except as otherwise provided in this 
        subsection, the term `qualified employee' means, with respect 
        to any period, any employee of an employer if--
                    ``(A) substantially all of the services performed 
                during such period by such employee for such employer 
                are performed within an Indian reservation,
                    ``(B) the principal place of abode of such employee 
                while performing such services is on or near the 
                reservation in which the services are performed, and
                    ``(C) the employee began work for such employer on 
                or after January 1, 1994.
            ``(2) Credit allowed only for first 7 years.--An employee 
        shall not be treated as a qualified employee for any period 
        after the date 7 years after the day on which such employee 
        first began work for the employer.
            ``(3) Individuals receiving wages in excess of $30,000 not 
        eligible.--An employee shall not be treated as a qualified 
        employee for any taxable year of the employer if the total 
        amount of the wages paid or incurred by such employer to such 
        employee during such taxable year (whether or not for services 
        within an Indian reservation) exceeds the amount determined at 
        an annual rate of $30,000. The Secretary shall adjust the 
        $30,000 amount contained in the preceding sentence for years 
        beginning after 1993 at the same time and in the same manner as 
        under section 415(d).
            ``(4) Employment must be trade or business employment.--An 
        employee shall be treated as a qualified employee for any 
        taxable year of the employer only if more than 50 percent of 
        the wages paid or incurred by the employer to such employee 
        during such taxable year are for services performed in a trade 
        or business of the employer. Any determination as to whether 
        the preceding sentence applies with respect to any employee for 
        any taxable year shall be made without regard to subsection 
        (f)(2).
            ``(5) Certain employees not eligible.--The term `qualified 
        employee' shall not include--
                    ``(A) any individual described in subparagraph (A), 
                (B), or (C) of section 51(i)(1),
                    ``(B) any 5-percent owner (as defined in section 
                416(i)(1)(B)),
                    ``(C) any individual who is neither an enrolled 
                member of an Indian tribe nor the spouse of an enrolled 
                member of an Indian tribe, and
                    ``(D) any individual if the services performed by 
                such individual for the employer involve the conduct of 
                class I, II, or III gaming as defined in section 4 of 
                the Indian Gaming Regulatory Act (25 U.S.C. 2703), or 
                are performed in a building housing such gaming 
                activity.
            ``(6) Indian tribe defined.--The term `Indian tribe' means 
        any Indian tribe, band, nation, pueblo, or other organized 
        group or community, including any Alaska Native village, or 
        regional or village corporation, as defined in, or established 
        pursuant to, the Alaska Native Claims Settlement Act (43 U.S.C. 
        1601 et seq.) which is recognized as eligible for the special 
        programs and services provided by the United States to Indians 
        because of their status as Indians.
            ``(7) Indian reservation defined.--The term `Indian 
        reservation' means a reservation, as defined in--
                    ``(A) section 3(d) of the Indian Financing Act of 
                1974 (25 U.S.C. 1452(d)), or
                    ``(B) section 4(10) of the Indian Child Welfare Act 
                of 1978 (25 U.S.C. 1903 (10)).
    ``(d) Early Termination of Employment by Employer.--
            ``(1) In general.--If the employment of any employee is 
        terminated by the taxpayer before the day 1 year after the day 
        on which such employee began work for the employer--
                    ``(A) no wages (or qualified employee health 
                insurance costs) with respect to such employee shall be 
                taken into account under subsection (a) for the taxable 
                year in which such employment is terminated, and
                    ``(B) the tax under this chapter for the taxable 
                year in which such employment is terminated shall be 
                increased by the aggregate credits (if any) allowed 
                under section 38(a) for prior taxable years by reason 
                of wages (or qualified employee health insurance costs) 
                taken into account with respect to such employee.
            ``(2) Carrybacks and carryovers adjusted.--In the case of 
        any termination of employment to which paragraph (1) applies, 
        the carrybacks and carryovers under section 39 shall be 
        properly adjusted.
            ``(3) Subsection not to apply in certain cases.--
                    ``(A) In general.--Paragraph (1) shall not apply 
                to--
                            ``(i) a termination of employment of an 
                        employee who voluntarily leaves the employment 
                        of the taxpayer,
                            ``(ii) a termination of employment of an 
                        individual who before the close of the period 
                        referred to in paragraph (1) becomes disabled 
                        to perform the services of such employment 
                        unless such disability is removed before the 
                        close of such period and the taxpayer fails to 
                        offer reemployment to such individual, or
                            ``(iii) a termination of employment of an 
                        individual if it is determined under the 
                        applicable State unemployment compensation law 
                        that the termination was due to the misconduct 
                        of such individual.
                    ``(B) Changes in form of business.--For purposes of 
                paragraph (1), the employment relationship between the 
                taxpayer and an employee shall not be treated as 
                terminated--
                            ``(i) by a transaction to which section 
                        381(a) applies if the employee continues to be 
                        employed by the acquiring corporation, or
                            ``(ii) by reason of a mere change in the 
                        form of conducting the trade or business of the 
                        taxpayer if the employee continues to be 
                        employed in such trade or business and the 
                        taxpayer retains a substantial interest in such 
                        trade or business.
            ``(4) Special rule.--Any increase in tax under paragraph 
        (1) shall not be treated as a tax imposed by this chapter for 
        purposes of--
                    ``(A) determining the amount of any credit 
                allowable under this chapter, and
                    ``(B) determining the amount of the tax imposed by 
                section 55.
    ``(e) Credit Limitation Amount.--For purposes of this section--
            ``(1) Credit limitation amount.--The credit limitation 
        amount for a taxable year shall be an amount equal to the 
        credit rate (10 or 30 percent as determined under subsection 
        (a)) multiplied by the increased credit base.
            ``(2) Increased credit base.--The increased credit base for 
        a taxable year shall be the excess of--
                    ``(A) the sum of any qualified wages and qualified 
                employee health insurance costs paid or incurred by the 
                employer during the taxable year with respect to 
                employees whose wages (paid or incurred by the 
                employer) during the taxable year do not exceed the 
                amount determined under paragraph (3) of subsection 
                (c), over
                    ``(B) the sum of any qualified wages and qualified 
                employee health insurance costs paid or incurred by the 
                employer (or any predecessor) during calendar year 1993 
                with respect to employees whose wages (paid or incurred 
                by the employer or any predecessor) during 1993 did not 
                exceed $30,000.
            ``(3) Special rule for short taxable years.--For any 
        taxable year having less than 12 months--
                    ``(A) the amounts paid or incurred by the employer 
                shall be annualized for purposes of determining the 
                increased credit base, and
                    ``(B) the credit limitation amount shall be 
                multiplied by a fraction, the numerator of which is the 
                number of days in the taxable year and the denominator 
                of which is 365.
    ``(f) Other Definitions and Special Rules.--For purposes of this 
section--
            ``(1) Wages.--The term `wages' has the same meaning given 
        to such term in section 51.
            ``(2) Controlled groups.--
                    ``(A) All employers treated as a single employer 
                under section (a) or (b) of section 52 shall be treated 
                as a single employer for purposes of this section.
                    ``(B) The credit (if any) determined under this 
                section with respect to each such employer shall be its 
                proportionate share of the wages and qualified employee 
                health insurance costs giving rise to such credit.
            ``(3) Certain other rules made applicable.--Rules similar 
        to the rules of section 51(k) and subsections (c), (d), and (e) 
        of section 52 shall apply.
            ``(4) Coordination with nonrevenue laws.--Any reference in 
        this section to a provision not contained in this title shall 
        be treated for purposes of this section as a reference to such 
        provision as in effect on the date of the enactment of this 
        paragraph.''
    (c) Denial of Deduction for Portion of Wages Equal to Indian 
Employment Credit.--
            (1) Subsection (a) of section 280C (relating to rule for 
        targeted jobs credit) is amended by striking ``51(a)'' and 
        inserting ``45(a), 51(a), and''.
            (2) Subsection (c) of section 196 (relating to deduction 
        for certain unused business credits) is amended by striking 
        ``and'' at the end of paragraph (5), by striking the period at 
        the end of paragraph (6) and inserting ``, and'', and by adding 
        at the end the following new paragraph:
            ``(7) the Indian employment credit determined under section 
        45(a).''
    (d) Denial of Carrybacks to Preenactment Years.--Subsection (d) of 
section 39 is amended by adding at the end thereof the following new 
paragraph:
            ``(4) No carryback of section 45 credit before enactment.--
        No portion of the unused business credit for any taxable year 
        which is attributable to the Indian employment credit 
        determined under section 45 may be carried to a taxable year 
        ending before the date of the enactment of section 45.''
    (e) Clerical Amendment.--The table of sections for subpart D of 
part IV of subchapter A of chapter 1 is amended by adding at the end 
thereof the following:

                              ``Sec. 45. Indian employment credit.''
    (f) Effective Date.--The amendments made by this section shall 
apply to wages paid or incurred after December 31, 1993.

                     Subtitle B--Revenue Increases

                PART I--PROVISIONS AFFECTING INDIVIDUALS

                       Subpart A--Rate Increases

SEC. 8201. INCREASE IN TOP MARGINAL RATE UNDER SECTION 1.

    (a) General Rule.--Section 1 (relating to tax imposed) is amended 
by striking subsections (a) through (e) and inserting the following:
    ``(a) Married Individuals Filing Joint Returns and Surviving 
Spouses.--There is hereby imposed on the taxable income of--
            ``(1) every married individual (as defined in section 7703) 
        who makes a single return jointly with his spouse under section 
        6013, and
            ``(2) every surviving spouse (as defined in section 2(a)),
a tax determined in accordance with the following table:

``If taxable income is:             The tax is:
    Not over $36,900...............
                                        15% of taxable income.
    Over $36,900 but not over 
        $89,150.
                                        $5,535, plus 28% of the excess 
                                                over $36,900.
    Over $89,150 but not over 
        $140,000.
                                        $20,165, plus 31% of the excess 
                                                over $89,150.
    Over $140,000..................
                                        $35,928.50, plus 36% of the 
                                                excess over $140,000.
    ``(b) Heads of Households.--There is hereby imposed on the taxable 
income of every head of a household (as defined in section 2(b)) a tax 
determined in accordance with the following table:

``If taxable income is:             The tax is:
    Not over $29,600...............
                                        15% of taxable income.
    Over $29,600 but not over 
        $76,400.
                                        $4,440, plus 28% of the excess 
                                                over $29,600.
    Over $76,400 but not over 
        $127,500.
                                        $17,544, plus 31% of the excess 
                                                over $76,400.
    Over $127,500..................
                                        $33,385, plus 36% of the excess 
                                                over $127,500.
    ``(c) Unmarried Individuals (Other Than Surviving Spouses and Heads 
of Households).--There is hereby imposed on the taxable income of every 
individual (other than a surviving spouse as defined in section 2(a) or 
the head of a household as defined in section 2(b)) who is not a 
married individual (as defined in section 7703) a tax determined in 
accordance with the following table:

``If taxable income is:             The tax is:
    Not over $22,100...............
                                        15% of taxable income.
    Over $22,100 but not over 
        $53,500.
                                        $3,315, plus 28% of the excess 
                                                over $22,100.
    Over $53,500 but not over 
        $115,000.
                                        $12,107, plus 31% of the excess 
                                                over $53,500.
    Over $115,000..................
                                        $31,172, plus 36% of the excess 
                                                over $115,000.
    ``(d) Married Individuals Filing Separate Returns.--There is hereby 
imposed on the taxable income of every married individual (as defined 
in section 7703) who does not make a single return jointly with his 
spouse under section 6013, a tax determined in accordance with the 
following table:

``If taxable income is:             The tax is:
    Not over $18,450...............
                                        15% of taxable income.
    Over $18,450 but not over 
        $44,575.
                                        $2,767.50, plus 28% of the 
                                                excess over $18,450.
    Over $44,575 but not over 
        $70,000.
                                        $10,082.50, plus 31% of the 
                                                excess over $44,575.
    Over $70,000...................
                                        $17,964.25, plus 36% of the 
                                                excess over $70,000.
    ``(e) Estates and Trusts.--There is hereby imposed on the taxable 
income of--
            ``(1) every estate, and
            ``(2) every trust,
taxable under this subsection a tax determined in accordance with the 
following table:

``If taxable income is:             The tax is:
    Not over $1,500................
                                        15% of taxable income.
    Over $1,500 but not over $3,500
                                        $225, plus 28% of the excess 
                                                over $1,500.
    Over $3,500 but not over $5,500
                                        $785, plus 31% of the excess 
                                                over $3,500.
    Over $5,500....................
                                        $1,405, plus 36% of the excess 
                                                over $5,500.''
    (b) Conforming Amendments.--
            (1) Section 531 is amended by striking ``28 percent'' and 
        inserting ``36 percent''.
            (2) Section 541 is amended by striking ``28 percent'' and 
        inserting ``36 percent''.
            (3)(A) Subsection (f) of section 1 is amended--
                    (i) by striking ``1990'' in paragraph (1) and 
                inserting``1993'', and
                    (ii) by striking ``1989'' in paragraph (3)(B) and 
                inserting ``1992''.
            (B) Subsection (f) of section 1 is amended by adding at the 
        end thereof the following new paragraph:
            ``(7) Special rule for certain brackets.--
                    ``(A) Calendar year 1994.--In prescribing the 
                tables under paragraph (1) which apply with respect to 
                taxable years beginning in calendar year 1994, the 
                Secretary shall make no adjustment to the dollar 
                amounts at which the 36 percent rate bracket begins or 
                at which the 39.6 percent rate begins under any table 
                contained in subsection (a), (b), (c), (d), or (e).
                    ``(B) Later calendar years.--In prescribing tables 
                under paragraph (1) which apply with respect to taxable 
                years beginning in a calendar year after 1994, the 
                cost-of-living adjustment used in making adjustments to 
                the dollar amounts referred to in subparagraph (A) 
                shall be determined under paragraph (3) by substituting 
                `1993' for `1992'.''
            (C) Subparagraph (C) of section 41(e)(5) is amended by 
        striking ``1989'' each place it appears and inserting ``1992''.
            (D) Subparagraph (B) of section 63(c)(4) is amended by 
        striking ``1989'' and inserting ``1992''.
            (E) Subparagraph (B) of section 68(b)(2) is amended by 
        striking ``1989'' and inserting ``1992''.
            (F) Subparagraph (B) of section 132(f)(6) is amended by 
        striking ``, determined by substituting'' and all that follows 
        down through the period at the end thereof and inserting a 
        period.
            (G) Subparagraphs (A)(ii) and (B)(ii) of section 151(d)(4) 
        are each amended by striking ``1989'' and inserting ``1992''.
            (H) Clause (ii) of section 513(h)(2)(C) is amended by 
        striking ``1989'' and inserting ``1992''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1992.

SEC. 8202. SURTAX ON HIGH-INCOME TAXPAYERS.

    (a) General Rule.--
            (1) Subsection (a) of section 1 (as amended by section 
        8201) is amended by striking the last item in the table 
        contained therein and inserting the following:

    ``Over $140,000 but not over 
        $250,000.
                                        $35,928.50, plus 36% of the 
                                                excess over $140,000.
    Over $250,000..................
                                        $75,528.50, plus 39.6% of the 
                                                excess over $250,000.''
            (2) Subsection (b) of section 1 (as so amended) is amended 
        by striking the last item in the table contained therein and 
        inserting the following:

    ``Over $127,500 but not over 
        $250,000.
                                        $33,385, plus 36% of the excess 
                                                over $127,500.
    Over $250,000..................
                                        $77,485, plus 39.6% of the 
                                                excess over $250,000.''
            (3) Subsection (c) of section 1 (as so amended) is amended 
        by striking the last item in the table contained therein and 
        inserting the following:

    ``Over $115,000 but not over 
        $250,000.
                                        $31,172, plus 36% of the excess 
                                                over $115,000.
    Over $250,000..................
                                        $79,772, plus 39.6% of the 
                                                excess over $250,000.''
            (4) Subsection (d) of section 1 (as so amended) is amended 
        by striking the last item in the table contained therein and 
        inserting the following:

    ``Over $70,000 but not over 
        $125,000.
                                        $17,964.25, plus 36% of the 
                                                excess over $70,000.
    Over $125,000..................
                                        $37,764.25, plus 39.6% of the 
                                                excess over $125,000.''
            (5) Subsection (e) of section 1 (as so amended) is amended 
        by striking the last item in the table contained therein and 
        inserting the following:

    ``Over $5,500 but not over 
        $7,500.
                                        $1,405, plus 36% of the excess 
                                                over $5,500.
    Over $7,500....................
                                        $2,125, plus 39.6% of the 
                                                excess over $7,500.''
    (b) Surtax on Net Capital Gains.--Section 1(h) (relating to maximum 
capital gains rate) is amended by striking the period at the end of 
paragraph (2) and inserting ``, plus'', and by adding at the end the 
following new paragraph:
            ``(3) a tax of 2.8 percent of the lesser of--
                    ``(A) the net capital gain, or
                    ``(B) the amount of taxable income in excess of the 
                dollar amount at which the last rate bracket begins for 
                such taxable year in the table contained in subsection 
                (a), (b), (c), (d), or (e), whichever is applicable.''
    (c) Technical Amendment.--Sections 531 and 541 (as amended by 
section 8201) are each amended by striking ``36 percent'' and inserting 
``39.6 percent''.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1992.

SEC. 8203. MODIFICATIONS TO ALTERNATIVE MINIMUM TAX RATES AND EXEMPTION 
              AMOUNTS.

    (a) Increase in Rate.--Paragraph (1) of section 55(b) (defining 
tentative minimum tax) is amended to read as follows:
            ``(1) Amount of tentative tax.--
                    ``(A) Noncorporate taxpayers.--
                            ``(i) In general.--In the case of a 
                        taxpayer other than a corporation, the 
                        tentative minimum tax for the taxable year is 
                        the sum of--
                                    ``(I) 26 percent of so much of the 
                                taxable excess as does not exceed 
                                $175,000, plus
                                    ``(II) 28 percent of so much of the 
                                taxable excess as exceeds $175,000.
                        The amount determined under the preceding 
                        sentence shall be reduced by the alternative 
                        minimum tax foreign tax credit for the taxable 
                        year.
                            ``(ii) Taxable excess.--For purposes of 
                        clause (i), the term `taxable excess' means so 
                        much of the alternative minimum taxable income 
                        for the taxable year as exceeds the exemption 
                        amount.
                            ``(iii) Married individual filing separate 
                        return.--In the case of a married individual 
                        filing a separate return, clause (i) shall be 
                        applied by substituting `$87,500' for 
                        `$175,000' each place it appears. For purposes 
                        of the preceding sentence, marital status shall 
                        be determined under section 7703.
                    ``(B) Corporations.--In the case of a corporation, 
                the tentative minimum tax for the taxable year is--
                            ``(i) 20 percent of so much of the 
                        alternative minimum taxable income for the 
                        taxable year as exceeds the exemption amount, 
                        reduced by
                            ``(ii) the alternative minimum tax foreign 
                        tax credit for the taxable year.''
    (b) Increase in Exemption Amounts.--Paragraph (1) of section 55(d) 
(defining exemption amount) is amended--
            (1) by striking ``$40,000'' in subparagraph (A) and 
        inserting ``$45,000'',
            (2) by striking ``$30,000'' in subparagraph (B) and 
        inserting ``$33,750'', and
            (3) by striking ``$20,000'' in subparagraph (C) and 
        inserting ``$22,500''.
    (c) Conforming Amendments.--
            (1) The last sentence of section 55(d)(3) is amended by 
        striking ``$155,000 or (ii) $20,000'' and inserting ``$165,000 
        or (ii) $22,500''.
            (2)(A) Subparagraph (A) of section 897(a)(2) is amended by 
        striking ``the amount determined under section 55(b)(1)(A) 
        shall not be less than 21 percent of'' and inserting ``the 
        taxable excess for purposes of section 55(b)(1)(A) shall not be 
        less than''.
            (B) The heading for paragraph (2) of section 897(a) is 
        amended by striking ``21-percent''.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1992.

SEC. 8203A. RATE INCREASES NOT TO TAKE EFFECT UNTIL JULY 1, 1993.

    (a) In General.--Section 1 (relating to tax imposed) is amended by 
adding at the end the following new subsection:
    ``(i) Special Rules for Taxable Years Beginning in 1993.--
            ``(1) In general.--In the case of taxable years beginning 
        in calendar year 1993, each of the tables contained in 
        subsections (a), (b), (c), (d), and (e) shall be applied--
                    ``(A) by substituting `33.5 percent' for `36 
                percent',
                    ``(B) by substituting `35.3 percent' for `39.6 
                percent', and
                    ``(C) by substituting for the dollar amount of tax 
                in the last rate bracket the dollar amount determined 
                under the table contained in paragraph (2).
            ``(2) Dollar amount of tax.--The dollar amount substituted 
        under paragraph (1) shall be determined as follows:

      ``In the case of:                   The dollar amount is:

          Subsection (a)...........
                                              $72,778.50 for 
                                                $75,528.50.
          Subsection (b)...........
                                              $74,422.50 for 
                                                $77,485.00.
          Subsection (c)...........
                                              $76,397.00 for 
                                                $79,772.00.
          Subsection (d)...........
                                              $36,389.25 for 
                                                $37,764.25.
          Subsection (e)...........
                                              $2,075.00 for 
                                                $2,125.00.''

    (b) Conforming Amendments.--
            (1) Sections 531 and 541 (as amended by section 8202) are 
        each amended by inserting ``(35.3 percent in the case of 
        taxable years beginning in calendar year 1993)'' after ``39.6 
        percent''.
            (2) Section 1(h)(3), as added by section 8202(b), is 
        amended by inserting ``(1.4 percent in the case of taxable 
        years beginning in calendar year 1993)'' after ``2.8 percent''.
            (3) Paragraph (1) of section 55(b), as amended by section 
        8203, is amended by adding at the end the following new 
        subparagraph:
                    ``(C) Special rules for 1993.--In the case of any 
                taxable year beginning in the calendar year 1993, 
                subparagraph (A)(i) shall be applied by substituting--
                            ``(i) `25 percent' for `26 percent' in 
                        subclause (I), and
                            ``(ii) `26 percent' for `28 percent' in 
                        subclause (II).''
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1992.

SEC. 8204. OVERALL LIMITATION ON ITEMIZED DEDUCTIONS FOR HIGH-INCOME 
              TAXPAYERS MADE PERMANENT.

    Subsection (f) of section 68 (relating to overall limitation on 
itemized deductions) is hereby repealed.

SEC. 8205. PHASEOUT OF PERSONAL EXEMPTION OF HIGH-INCOME TAXPAYERS MADE 
              PERMANENT.

    Section 151(d)(3) (relating to phaseout of personal exemption) is 
amended by striking subparagraph (E).

SEC. 8206. PROVISIONS TO PREVENT CONVERSION OF ORDINARY INCOME TO 
              CAPITAL GAIN.

    (a) Interest Embedded in Financial Transactions.--
            (1) In general.--Part IV of subchapter P of chapter 1 
        (relating to special rules for determining capital gains and 
        losses) is amended by adding at the end the following new 
        section:

``SEC. 1258. RECHARACTERIZATION OF GAIN FROM CERTAIN FINANCIAL 
              TRANSACTIONS.

    ``(a) General Rule.--In the case of any gain--
            ``(1) which (but for this section) would be treated as gain 
        from the sale or exchange of a capital asset, and
            ``(2) which is recognized on the disposition or other 
        termination of any position which was held as part of a 
        conversion transaction,
such gain (to the extent such gain does not exceed the applicable 
imputed income amount) shall be treated as ordinary income.
    ``(b) Applicable Imputed Income Amount.--For purposes of subsection 
(a), the term `applicable imputed income amount' means, with respect to 
any disposition or other termination referred to in subsection (a), an 
amount equal to--
            ``(1) the amount of interest which would have accrued on 
        the taxpayer's net investment in the conversion transaction for 
        the period ending on the date of such disposition or other 
        termination (or, if earlier, the date on which the requirements 
        of subsection (c) ceased to be satisfied) at a rate equal to 
        120 percent of the applicable rate, reduced by
            ``(2) the amount treated as ordinary income under 
        subsection (a) with respect to any prior disposition or other 
        termination of a position which was held as a part of such 
        transaction.
The Secretary shall by regulations provide for such reductions in the 
applicable imputed income amount as may be appropriate by reason of 
amounts capitalized under section 263(g), ordinary income received, or 
otherwise.
    ``(c) Conversion Transaction.--For purposes of this section, the 
term `conversion transaction' means any transaction--
            ``(1) substantially all of the taxpayer's expected return 
        from which is attributable to the time value of the taxpayer's 
        net investment in such transaction, and
            ``(2) which is--
                    ``(A) the holding of any property (whether or not 
                actively traded), and the entering into a contract to 
                sell such property (or substantially identical 
                property) at a price determined in accordance with such 
                contract, but only if such property was acquired and 
                such contract was entered into on a substantially 
                contemporaneous basis,
                    ``(B) an applicable straddle,
                    ``(C) any other transaction which is marketed or 
                sold as producing capital gains and as a transaction 
                described in paragraph (1), or
                    ``(D) any other transaction specified in 
                regulations prescribed by the Secretary.
    ``(d) Definitions and Special Rules.--For purposes of this 
section--
            ``(1) Applicable straddle.--The term `applicable straddle' 
        means any straddle (within the meaning of section 1092(c)); 
        except that the term `personal property' shall include stock.
            ``(2) Applicable rate.--The term `applicable rate' means--
                    ``(A) the applicable Federal rate determined under 
                section 1274(d) (compounded semiannually) as if the 
                conversion transaction were a debt instrument, or
                    ``(B) if the term of the conversion transaction is 
                indefinite, the Federal short-term rates in effect 
                under section 6621(b) during the period of the 
                conversion transaction (compounded daily).
            ``(3) Treatment of built-in losses.--
                    ``(A) In general.--If any position with a built-in 
                loss becomes part of a conversion transaction--
                            ``(i) for purposes of applying this 
                        subtitle to such position for periods after 
                        such position becomes part of such transaction, 
                        such position shall be taken into account at 
                        its fair market value as of the time it became 
                        part of such transaction, except that
                            ``(ii) upon the disposition or other 
                        termination of such position in a transaction 
                        in which gain or loss is recognized, such 
                        built-in loss shall be recognized and shall 
                        have a character determined without regard to 
                        this section.
                    ``(B) Built-in loss.--For purposes of subparagraph 
                (A), the term `built-in loss' means the loss (if any) 
                which would have been realized if the position had been 
                disposed of or otherwise terminated at its fair market 
                value as of the time such position became part of such 
                transaction.
            ``(4) Position taken into account at fair market value.--In 
        determining the taxpayer's net investment in any conversion 
        transaction, there shall be included the fair market value of 
        any position which becomes part of such transaction (determined 
        as of the time such position became part of such transaction).
            ``(5) Special rule for options dealers and commodities 
        traders.--
                    ``(A) In general.--Subsection (a) shall not apply 
                to transactions --
                            ``(i) of an options dealer in the normal 
                        course of the dealer's trade or business of 
                        dealing with options, or
                            ``(ii) of a commodities trader in the 
                        normal course of the trader's trade or business 
                        of trading section 1256 contracts.
                    ``(B) Definitions.--For purposes of this 
                paragraph--
                            ``(i) Options dealer.--The term `options 
                        dealer' has the meaning given such term by 
                        section 1256(g)(8).
                            ``(ii) Commodities trader.-- The term 
                        `commodities trader' means any person who is a 
                        member (or, to the extent provided in 
                        regulations, is entitled to trade as a member) 
                        of a domestic board of trade which is 
                        designated as a contract market by the 
                        Commodity Futures Trading Commission.
                    ``(C) Limited partners and limited entrepreneurs.--
                In the case of any gain from a transaction recognized 
                by an entity which is allocable to a limited partner or 
                limited entrepreneur (within the meaning of section 
                464(e)(2)), subparagraph (A) shall not apply if--
                            ``(i) substantially all of the limited 
                        partner's (or limited entrepreneur's) expected 
                        return from the entity is attributable to the 
                        time value of the partner's (or entrepreneur's) 
                        net investment in such entity,
                            ``(ii) the transaction (or the interest in 
                        the entity) was marketed or sold as producing 
                        capital gains treatment and as a transaction 
                        described in subsection (c)(1), or
                            ``(iii) the transaction (or the interest in 
                        the entity) is a transaction (or interest) 
                        specified in regulations prescribed by the 
                        Secretary.''
            (2) Clerical amendment.--The table of sections for part IV 
        of subchapter P of chapter 1 is amended by adding at the end 
        thereof the following new item:

                              ``Sec. 1258. Recharacterization of gain 
                                        from certain financial 
                                        transactions.''
            (3) Effective date.--The amendments made by this section 
        shall apply to conversion transactions entered into after April 
        30, 1993.
    (b) Repeal of Certain Exceptions to Market Discount Rules.--
            (1) Market discount bonds issued on or before july 18, 
        1984.--The following provisions are hereby repealed:
                    (A) Section 1276(e).
                    (B) Section 1277(d).
            (2) Tax-exempt obligations.--
                    (A) In general.--Paragraph (1) of section 1278(a) 
                (defining market discount bond) is amended--
                            (i) by striking clause (ii) of subparagraph 
                        (B) and redesignating subclauses (iii) and (iv) 
                        of such subparagraph as clauses (ii) and (iii), 
                        respectively,
                            (ii) by redesignating subparagraph (C) as 
                        subparagraph (D), and
                            (iii) by inserting after subparagraph (B) 
                        the following new subparagraph:
                    ``(C) Section 1277 not applicable to tax-exempt 
                obligations.--For purposes of section 1277, the term 
                `market discount bond' shall not include any tax-exempt 
                obligation (as defined in section 1275(a)(3)).''
                    (B) Conforming amendment.--Sections 1276(a)(4) and 
                1278(b)(1) are each amended by striking ``sections 
                871(a)'' and inserting ``sections 103, 871(a),''.
            (3) Effective date.--The amendments made by this section 
        shall apply to obligations purchased (within the meaning of 
        section 1272(d)(1) of the Internal Revenue Code of 1986) after 
        April 30, 1993.
    (c) Treatment of Stripped Preferred Stock.--
            (1) In general.--Section 305 is amended by redesignating 
        subsection (e) as subsection (f) and by inserting after 
        subsection (d) the following new subsection:
    ``(e) Treatment of Purchaser of Stripped Preferred Stock.--
            ``(1) In general.--If any person purchases after April 30, 
        1993, any stripped preferred stock, then such person, while 
        holding such stock, shall include in gross income amounts equal 
        to the amounts which would have been so includible if such 
        stripped preferred stock were a bond issued on the purchase 
        date and having original issue discount equal to the excess, if 
        any, of--
                    ``(A) the redemption price for such stock, over
                    ``(B) the price at which such person purchased such 
                stock.
        The preceding sentence shall also apply in the case of any 
        person whose basis in such stock is determined by reference to 
        the basis in the hands of such purchaser.
            ``(2) Basis adjustments.--Appropriate adjustments to basis 
        shall be made for amounts includible in gross income under 
        paragraph (1).
            ``(3) Tax treatment of person stripping stock.--If any 
        person strips the rights to 1 or more dividends from any stock 
        described in paragraph (5)(B) and after April 30, 1993, 
        disposes of such dividend rights, for purposes of paragraph 
        (1), such person shall be treated as having purchased the 
        stripped preferred stock on the date of such disposition for a 
        purchase price equal to such person's adjusted basis in such 
        stripped preferred stock.
            ``(4) Amounts treated as ordinary income.--Any amount 
        included in gross income under paragraph (1) shall be treated 
        as ordinary income.
            ``(5) Stripped preferred stock.--For purposes of this 
        subsection--
                    ``(A) In general.--The term `stripped preferred 
                stock' means any stock described in subparagraph (B) if 
                there has been a separation in ownership between such 
                stock and any dividend on such stock which has not 
                become payable.
                    ``(B) Description of stock.--Stock is described in 
                this subsection if such stock--
                            ``(i) is limited and preferred as to 
                        dividends and does not participate in corporate 
                        growth to any significant extent, and
                            ``(ii) has a fixed redemption price.
            ``(6) Purchase.--For purposes of this subsection, the term 
        `purchase' means--
                    ``(A) any acquisition of stock, where
                    ``(B) the basis of such stock is not determined in 
                whole or in part by the reference to the adjusted basis 
                of such stock in the hands of the person from whom 
                acquired.''
            (2) Coordination with section 167(e).--Paragraph (2) of 
        section 167(e) is amended to read as follows:
            ``(2) Coordination with other provisions.--
                    ``(A) Section 273.--This subsection shall not apply 
                to any term interest to which section 273 applies.
                    ``(B) Section 305(e).--This subsection shall not 
                apply to the holder of the dividend rights which were 
                separated from any stripped preferred stock to which 
                section 305(e)(1) applies.''
            (3) Effective date.--The amendments made by this subsection 
        shall take effect on April 30, 1993.
    (d) Treatment of Capital Gain Under Limitation on Investment 
Interest.--
            (1) In general.--Subparagraph (B) of section 163(d)(4) 
        (defining investment income) is amended to read as follows:
                    ``(B) Investment income.--The term `investment 
                income' means the sum of--
                            ``(i) gross income from property held for 
                        investment (other than any gain taken into 
                        account under clause (ii)(I)),
                            ``(ii) the excess (if any) of--
                                    ``(I) the net gain attributable to 
                                the disposition of property held for 
                                investment, over
                                    ``(II) the net capital gain 
                                determined by only taking into account 
                                gains and losses from dispositions of 
                                property held for investment, plus
                            ``(iii) so much of the net capital gain 
                        referred to in clause (ii)(II) (or, if lesser, 
                        the net gain referred to in clause (ii)(I)) as 
                        the taxpayer elects to take into account under 
                        this clause.''
            (2) Coordination with special capital gains rate.--
        Subsection (h) of section 1, as amended by section 8202(b), is 
        amended by adding at the end the following new sentence:
``For purposes of the preceding sentence, the net capital gain for any 
taxable year shall be reduced (but not below zero) by the amount which 
the taxpayer elects to take into account as investment income for the 
taxable year under section 163(d)(4)(B)(iii).''
            (3) Effective date.--The amendments made by this subsection 
        shall apply to taxable years beginning after December 31, 1992.
    (e) Treatment of Certain Appreciated Inventory.--
            (1) In general.--Paragraph (1) of section 751(d) is amended 
        to read as follows:
            ``(1) Substantial appreciation.--
                    ``(A) In general.--Inventory items of the 
                partnership shall be considered to have appreciated 
                substantially in value if their fair market value 
                exceeds 120 percent of the adjusted basis to the 
                partnership of such property.
                    ``(B) Certain property excluded.--For purposes of 
                subparagraph (A), there shall be excluded any inventory 
                property if a principal purpose for acquiring such 
                property was to avoid the provisions of this section 
                relating to inventory items.''
            (2) Effective date.--The amendment made by paragraph (1) 
        shall apply to sales, exchanges, and distributions after April 
        30, 1993.

                      Subpart B--Other Provisions

SEC. 8207. REPEAL OF LIMITATION ON AMOUNT OF WAGES SUBJECT TO HEALTH 
              INSURANCE EMPLOYMENT TAX.

    (a) Hospital Insurance Tax.--
            (1) Paragraph (1) of section 3121(a) (defining wages) is 
        amended--
                    (A) by inserting ``in the case of the taxes imposed 
                by sections 3101(a) and 3111(a)'' after ``(1)'',
                    (B) by striking ``applicable contribution base (as 
                determined under subsection (x))'' each place it 
                appears and inserting ``contribution and benefit base 
                (as determined under section 230 of the Social Security 
                Act)'', and
                    (C) by striking ``such applicable contribution 
                base'' and inserting ``such contribution and benefit 
                base''.
            (2) Section 3121 is amended by striking subsection (x).
    (b) Self-Employment Tax.--
            (1) Subsection (b) of section 1402 is amended--
                    (A) by striking ``that part of the net'' in 
                paragraph (1) and inserting ``in the case of the tax 
                imposed by section 1401(a), that part of the net'',
                    (B) by striking ``applicable contribution base (as 
                determined under subsection (k))'' in paragraph (1) and 
                inserting ``contribution and benefit base (as 
                determined under section 230 of the Social Security 
                Act)'',
                    (C) by inserting ``and'' after ``section 
                3121(b),'', and
                    (D) by striking ``and (C) includes'' and all that 
                follows through ``3111(b)''.
            (2) Section 1402 is amended by striking subsection (k).
    (c) Railroad Retirement Tax.--
            (1) Subparagraph (A) of section 3231(e)(2) is amended by 
        adding at the end thereof the following new clause:
                            ``(iii) Hospital insurance taxes.--Clause 
                        (i) shall not apply to--
                                    ``(I) so much of the rate 
                                applicable under section 3201(a) or 
                                3221(a) as does not exceed the rate of 
                                tax in effect under section 3101(b), 
                                and
                                    ``(II) so much of the rate 
                                applicable under section 3211(a)(1) as 
                                does not exceed the rate of tax in 
                                effect under section 1401(b).''
            (2) Clause (i) of section 3231(e)(2)(B) is amended to read 
        as follows:
                            ``(i) Tier 1 taxes.--Except as provided in 
                        clause (ii), the term `applicable base' means 
                        for any calendar year the contribution and 
                        benefit base determined under section 230 of 
                        the Social Security Act for such calendar 
                        year.''
    (d) Technical Amendments.--
            (1) Paragraph (1) of section 6413(c) is amended by striking 
        ``section 3101 or section 3201'' and inserting ``section 
        3101(a) or section 3201(a) (to the extent of so much of the 
        rate applicable under section 3201(a) as does not exceed the 
        rate of tax in effect under section 3101(a))''.
            (2) Subparagraphs (B) and (C) of section 6413(c)(2) are 
        each amended by striking ``section 3101'' each place it appears 
        and inserting ``section 3101(a)''.
            (3) Subsection (c) of section 6413 is amended by striking 
        paragraph (3).
            (4) Sections 3122 and 3125 are each amended by striking 
        ``applicable contribution base limitation'' and inserting 
        ``contribution and benefit base limitation''.
    (e) Effective Date.--The amendments made by this section shall 
apply to 1994 and later calendar years.

SEC. 8208. TOP ESTATE AND GIFT TAX RATES MADE PERMANENT.

    (a) General Rule.--The table contained in paragraph (1) of section 
2001(c) is amended by striking the last item and inserting the 
following new items:

    ``Over $2,500,000 but not over 
        $3,000,000.
                                        $1,025,800, plus 53% of the 
                                                excess over $2,500,000.
    Over $3,000,000................
                                        $1,290,800, plus 55% of the 
                                                excess over 
                                                $3,000,000.''
    (b) Conforming Amendments.--
            (1) Subsection (c) of section 2001 is amended by striking 
        paragraph (2) and by redesignating paragraph (3) as paragraph 
        (2).
            (2) Paragraph (2) of section 2001(c), as redesignated by 
        paragraph (1), is amended by striking ``($18,340,000 in the 
        case of decedents dying, and gifts made, after 1992)''.
            (3) The last sentence of section 2101(b) is amended by 
        striking ``section 2001(c)(3)'' and inserting ``section 
        2001(c)(2)''.
    (c) Effective Date.--The amendments made by this section shall 
apply in the case of decedents dying, and gifts made, after December 
31, 1992.

SEC. 8209. REDUCTION IN DEDUCTIBLE PORTION OF BUSINESS MEALS AND 
              ENTERTAINMENT.

    (a) General Rule.--Paragraph (1) of section 274(n) (relating to 
only 80 percent of meal and entertainment expenses allowed as 
deduction) is amended by striking ``80 percent'' and inserting ``50 
percent''.
    (b) Substantiation Requirement.--In the case of taxable years 
beginning after December 31, 1993, Treasury Regulation Sec. 1.274-
5T(c)(2)(iii)(B) shall be applied by substituting ``$20'' for ``$25''.
    (c) Conforming Amendment.--The subsection heading for section 
274(n) is amended by striking ``80'' and inserting ``50''.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1993.

SEC. 8209A. SENSE OF THE SENATE RELATING TO THE DEDUCTIBILITY OF 
              BUSINESS MEALS AND ENTERTAINMENT EXPENSES.

    (a) Findings.--The Congress finds the following:
            (1) That--
                    (A) travel and tourism is the third largest retail 
                industry in the United States and accounts for 11 
                percent of the total value of goods and services 
                exported by the United States;
                    (B) in 1992, the tourism industry produced revenues 
                in the amount of $369,000,000,000 which produced 
                $44,000,000,000 in tax revenues; and
                    (C) of such tax revenues, the Federal Government 
                received $24,000,000,000.
            (2) The restaurant industry provides thousands of jobs in 
        the United States.
            (3) The American performing arts community supports, 
        develops, and exports world-class performing arts.
            (4) The reduction in the rate of the tax deductibility of 
        business meals and entertainment expenses from 80 percent to 50 
        percent may have a negative impact on the United States 
        restaurant, entertainment, and tourism industries.
            (5) Any loss of revenues due to the reduction described in 
        paragraph (4) may result in the loss of jobs in the restaurant, 
        entertainment, and tourism industries, many of which are filled 
        by young individuals in their first jobs and by members of 
        minority groups.
            (6) The unemployment rate among individuals and members 
        described in paragraph (5) greatly exceeds the national 
        unemployment rate of 6.9 percent.
    (b) Sense of the Senate.--It is the sense of the Senate that the 
conferees with respect to this title will make every effort to reduce 
or eliminate the proposed reduction in the deductibility of business 
meals and entertainment expenses.

SEC. 8210. ELIMINATION OF DEDUCTION FOR CLUB MEMBERSHIP FEES.

    (a) In General.--Subsection (a) of section 274 (relating to 
disallowance of certain entertainment, etc., expenses) is amended by 
adding at the end thereof the following new paragraph:
            ``(3) Denial of deduction for club dues.--Notwithstanding 
        the preceding provisions of this subsection, no deduction shall 
        be allowed under this chapter for amounts paid or incurred for 
        membership in any club organized for business, pleasure, 
        recreation, or other social purpose.''
    (b) Exception for Employee Recreational Expenses Not To Apply.--
Paragraph (4) of section 274(e) is amended by adding at the end thereof 
the following: ``This paragraph shall not apply for purposes of 
subsection (a)(3).''
    (c) Effective Date.--The amendments made by this section shall 
apply to amounts paid or incurred after December 31, 1993.

SEC. 8211. DISALLOWANCE OF DEDUCTION FOR CERTAIN EMPLOYEE REMUNERATION 
              IN EXCESS OF $1,000,000.

    (a) General Rule.--Section 162 (relating to trade or business 
expenses) is amended by redesignating subsection (m) as subsection (n) 
and by inserting after subsection (l) the following new subsection:
    ``(m) Certain Excessive Employee Remuneration.--
            ``(1) In general.--In the case of any publicly held 
        corporation, no deduction shall be allowed under this chapter 
        for applicable employee remuneration with respect to any 
        covered employee to the extent that the amount of such 
        remuneration for the taxable year with respect to such employee 
        exceeds $1,000,000.
            ``(2) Publicly held corporation.--For purposes of this 
        subsection, the term `publicly held corporation' means any 
        corporation issuing any class of common equity securities 
        required to be registered under section 12 of the Securities 
        Exchange Act of 1934.
            ``(3) Covered employee.--For purposes of this subsection, 
        the term `covered employee' means any employee of the taxpayer 
        if--
                    ``(A) as of the close of the taxable year, such 
                employee is the chief executive officer of the taxpayer 
                or is an individual acting in such a capacity, or
                    ``(B) the total compensation for the taxable year 
                of such employee is required to be reported to 
                shareholders under the Securities Exchange Act of 1934 
                by reason of such employee being among the 4 highest 
                compensated officers for the taxable year (other than 
                the chief executive officer).
            ``(4) Applicable employee remuneration.--For purposes of 
        this subsection--
                    ``(A) In general.--Except as otherwise provided in 
                this paragraph, the term `applicable employee 
                remuneration' means, with respect to any covered 
                employee for any taxable year, the aggregate amount 
                allowable as a deduction under this chapter for such 
                taxable year (determined without regard to this 
                subsection) for remuneration for services performed by 
                such employee (whether or not during the taxable year).
                    ``(B) Exception for remuneration payable on 
                commission basis.--The term `applicable employee 
                remuneration' shall not include any remuneration 
                payable on a commission basis solely on account of 
                income generated directly by the individual performance 
                of the individual to whom such remuneration is payable.
                    ``(C) Other performance-based compensation.--The 
                term `applicable employee remuneration' shall not 
                include any remuneration payable solely on account of 
                the attainment of one or more performance goals, but 
                only if--
                            ``(i) the performance goals are determined 
                        by a compensation committee of the board of 
                        directors of the taxpayer which is comprised 
                        solely of 2 or more outside directors,
                            ``(ii) the material terms under which the 
                        remuneration is to be paid, including the 
                        performance goals, are disclosed to 
                        shareholders and approved by a majority of the 
                        vote in a separate shareholder vote before the 
                        payment of such remuneration, and
                            ``(iii) before any payment of such 
                        remuneration, the compensation committee 
                        referred to in clause (i) certifies that the 
                        performance goals and any other material terms 
                        were in fact satisfied.
                    ``(D) Exception for existing binding contracts.--
                The term `applicable employee remuneration' shall not 
                include any remuneration payable under a written 
                binding contract which was in effect on February 17, 
                1993, and which was not modified thereafter in any 
                material respect before such remuneration is paid.
                    ``(E) Remuneration.--For purposes of this 
                paragraph, the term `remuneration' includes any 
                remuneration (including benefits) in any medium other 
                than cash, but shall not include--
                            ``(i) any payment referred to in so much of 
                        section 3121(a)(5) as precedes subparagraph (E) 
                        thereof, and
                            ``(ii) any benefit provided to or on behalf 
                        of an employee if at the time such benefit is 
                        provided it is reasonable to believe that the 
                        employee will be able to exclude such benefit 
                        from gross income under this chapter.
                For purposes of clause (i), section 3121(a)(5) shall be 
                applied without regard to section 3121(v)(1).
                    ``(F) Coordination with disallowed golden parachute 
                payments.--The dollar limitation contained in paragraph 
                (1) shall be reduced (but not below zero) by the amount 
                (if any) which would have been included in the 
                applicable employee remuneration of the covered 
                employee for the taxable year but for being disallowed 
                under section 280G.''
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to amounts which would otherwise be deductible for taxable years 
beginning on or after January 1, 1994.

SEC. 8212. REDUCTION IN COMPENSATION TAKEN INTO ACCOUNT IN DETERMINING 
              CONTRIBUTIONS AND BENEFITS UNDER QUALIFIED RETIREMENT 
              PLANS.

    (a) Qualification Requirement.--
            (1) In general.--Section 401(a)(17) is amended--
                    (A) by striking ``$200,000'' in the first sentence 
                and inserting ``$150,000'',
                    (B) by striking the second sentence, and
                    (C) by adding at the end the following new 
                subparagraph:
                    ``(B) Cost-of-living adjustment.--
                            ``(i) In general.--If, for any calendar 
                        year after 1994, the excess (if any) of--
                                    ``(I) $150,000, increased by the 
                                cost-of-living adjustment for the 
                                calendar year, over
                                    ``(II) the dollar amount in effect 
                                under subparagraph (A) for taxable 
                                years beginning in the calendar year,
                        is equal to or greater than $10,000, then the 
                        $150,000 amount under subparagraph (A) (as 
                        previously adjusted under this subparagraph) 
                        for any taxable year beginning in any 
                        subsequent calendar year shall be increased by 
                        $10,000.
                            ``(ii) Cost-of-living adjustment.--The 
                        cost-of-living adjustment for any calendar year 
                        shall be the adjustment made under section 
                        415(d) for such calendar year, except that the 
                        base period for purposes of section 
                        415(d)(1)(A) shall be the calendar quarter 
                        beginning October 1, 1993.''
            (2) Conforming amendment.--Section 401(a)(17) is amended by 
        striking ``(17) A trust'' and inserting:
            ``(17) Compensation limit.--
                    ``(A) In general.--A trust''.
    (b) Simplified Employee Pensions.--
            (1) In general.--Paragraphs (3)(C) and (6)(D)(ii) of 
        section 408(k) are each amended by striking ``$200,000'' and 
        inserting ``$150,000''.
            (2) Cost-of-living.--Paragraph (8) of section 408(k) is 
        amended to read as follows:
            ``(8) Cost-of-living adjustment.--The Secretary shall 
        adjust the $300 amount in paragraph (2)(C) at the same time and 
        in the same manner as under section 415(d) and shall adjust the 
        $150,000 amount in paragraphs (3)(C) and (6)(D)(ii) at the same 
        time, and by the same amount, as the adjustment under section 
        401(a)(17)(B).''
    (c) Other Related Provisions.--
            (1) In general.--Sections 404(l) and 505(b)(7) are each 
        amended--
                    (A) by striking ``$200,000'' in the first sentence 
                and inserting ``$150,000'', and
                    (B) by striking the second sentence and inserting 
                ``The Secretary shall adjust the $150,000 amount at the 
                same time, and by the same amount, as the adjustment 
                under section 401(a)(17)(B).''
            (2) Conforming amendment.--The heading for section 
        505(b)(7) is amended by striking ``$200,000''.
    (d) Effective Dates.--
            (1) In general.--Except as provided in paragraph (2), the 
        amendments made by this section shall apply to benefits 
        accruing in plan years beginning after December 31, 1993.
            (2) Exception for collectively bargained plans.--In the 
        case of a plan maintained pursuant to 1 or more collective 
        bargaining agreements between employee representatives and 1 or 
        more employers ratified before the date of the enactment of 
        this Act, the amendments made by this section shall not apply 
        to contributions or benefits pursuant to such agreements for 
        plan years beginning before the earlier of--
                    (A) the latest of--
                            (i) January 1, 1994,
                            (ii) the date on which the last of such 
                        collective bargaining agreements terminates 
                        (without regard to any extension, amendment, or 
                        modification of such agreements on or after 
                        such date of enactment), or
                            (iii) in the case of a plan maintained 
                        pursuant to collective bargaining under the 
                        Railway Labor Act, the date of execution of an 
                        extension or replacement of the last of such 
                        collective bargaining agreements in effect on 
                        such date of enactment, or
                    (B) January 1, 1997.
            (3) Transition rule for state and local plans.--
                    (A) In general.--In the case of an eligible 
                participant in a governmental plan (within the meaning 
                of section 414(d) of the Internal Revenue Code of 
                1986), the dollar limitation under section 401(a)(17) 
                of such Code shall not apply to the extent the amount 
                of compensation which is allowed to be taken into 
                account under the plan would be reduced below the 
                amount which was allowed to be taken into account under 
                the plan as in effect on July 1, 1993.
                    (B) Eligible participant.--For purposes of 
                subparagraph (A), an eligible participant is an 
                individual who first became a participant in the plan 
                during a plan year beginning before the 1st plan year 
                beginning after the earlier of--
                            (i) the plan year in which the plan is 
                        amended to reflect the amendments made by this 
                        section, or
                            (ii) December 31, 1995.
                    (C) Plan must be amended to incorporate limits.--
                This paragraph shall not apply to any eligible 
                participant of a plan unless the plan is amended so 
                that the plan incorporates by reference the dollar 
                limitation under section 401(a)(17) of the Internal 
                Revenue Code of 1986, effective with respect to 
                noneligible participants for plan years beginning after 
                December 31, 1995 (or earlier if the plan amendment so 
                provides).

SEC. 8213. MODIFICATION TO DEDUCTION FOR CERTAIN MOVING EXPENSES.

    (a) Dollar Limitation.--
            (1) In general.--Paragraph (3) of section 217(b) is amended 
        by striking subparagraphs (A) and (B) and inserting the 
        following:
                    ``(A) Dollar limit.--
                            ``(i) In general.--The aggregate amount 
                        allowable as a deduction under subsection (a) 
                        in connection with a commencement of work shall 
                        not exceed $10,000, of which the aggregate 
                        amount which is attributable to expenses 
                        described in subparagraph (C) or (D) of 
                        paragraph (1) shall not exceed $1,500.
                            ``(ii) Cost-of-living adjustment.--In the 
                        case of taxable years beginning in calendar 
                        years after 1994, the $10,000 amount under 
                        clause (i) shall be increased by an amount 
                        equal to the product of such dollar amount and 
                        the cost-of-living adjustment determined under 
                        section 1(f)(3) for the calendar year in which 
                        the taxable year begins, except that section 
                        1(f)(3)(B) shall be applied by substituting 
                        `1993' for `1992'. Any amount determined under 
                        this clause which is not a multiple of $50 
                        shall be rounded to the next lowest multiple of 
                        $50.
                    ``(B) Husband and wife.--If a husband and wife both 
                commence work at a new principal place of work within 
                the same general location, subparagraph (A) shall be 
                applied as if there was only 1 commencement of work. In 
                the case of a husband and wife filing separate returns, 
                subparagraph (A) shall be applied by substituting 
                `$5,000' for `$10,000' and `$750' for `$1,500'.''
            (2) Foreign moves.--Paragraph (1) of section 217(h) is 
        amended by striking subparagraphs (B) and (C) and inserting:
                    ``(B) subsection (b)(2)(A) shall be applied by 
                substituting `$4,500' for `$1,500', and
                    ``(C) subsection (b)(2)(B) shall be applied as if 
                the last sentence of such subsection read as follows: 
                `In the case of a husband and wife filing separate 
                returns, subparagraph (A) (as modified by subsection 
                (h)(1)(B)) shall be applied by substituting ``$2,250'' 
                for ``$4,500''.'.''
    (b) Repeal of Deduction for Qualified Residence Sale, Etc., 
Expenses.--
            (1) In general.--Paragraph (1) of section 217(b) (defining 
        moving expenses) is amended by inserting ``or'' at the end of 
        subparagraph (C), by striking ``, or'' at the end of 
        subparagraph (D) and inserting a period, and by striking 
        subparagraph (E).
            (2) Conforming amendments.--
                    (A) Subsection (b) of section 217, as amended by 
                subsection (a), is amended by striking paragraph (2) 
                and redesignating paragraph (3) as paragraph (2).
                    (B) Section 217 is amended by striking subsection 
                (e).
    (c) Deduction Disallowed for Meal Expenses.--Paragraph (1) of 
section 217(b) is amended--
            (1) by striking ``meals and lodging'' in subparagraphs (B), 
        (C) and (D) and inserting ``lodging'', and
            (2) by adding at the end thereof the following new 
        sentence:
        ``Such term shall not include any expenses for meals.''
    (d) Effective Date.--The amendments made by this section shall 
apply to expenses incurred after December 31, 1993.

SEC. 8214. SIMPLIFICATION OF INDIVIDUAL ESTIMATED TAX SAFE HARBOR BASED 
              ON LAST YEAR'S TAX.

    (a) In General.--Paragraph (1) of section 6654(d) (relating to 
amount of required estimated tax installments) is amended by striking 
subparagraphs (C), (D), (E), and (F) and by inserting the following new 
subparagraph:
                    ``(C) Limitation on use of preceding year's tax.--
                            ``(i) In general.--If the adjusted gross 
                        income shown on the return of the individual 
                        for the preceding taxable year exceeds 
                        $150,000, clause (ii) of subparagraph (B) shall 
                        be applied by substituting `110 percent' for 
                        `100 percent'.
                            ``(ii) Separate returns.--In the case of a 
                        married individual (within the meaning of 
                        section 7703) who files a separate return for 
                        the taxable year for which the amount of the 
                        installment is being determined, clause (i) 
                        shall be applied by substituting `$75,000' for 
                        `$150,000'.
                            ``(iii) Special rule.--In the case of an 
                        estate or trust, adjusted gross income shall be 
                        determined as provided in section 67(e).''
    (b) Conforming Amendments.--
            (1) Subparagraph (A) of section 6654(j)(3) is amended by 
        striking ``and subsection (d)(1)(C)(iii) shall not apply''.
            (2) Paragraph (4) of section 6654(l) is amended by striking 
        ``paragraphs (1)(C)(iv) and (2)(B)(i) of subsection (d)'' and 
        inserting ``subsection (d)(2)(B)(i)''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1993.

SEC. 8215. SOCIAL SECURITY AND TIER 1 RAILROAD RETIREMENT BENEFITS.

    (a) Additional Inclusion for Certain Taxpayers.--
            (1) In general.--Subsection (a) of section 86 (relating to 
        social security and tier 1 railroad retirement benefits) is 
        amended by adding at the end the following new paragraph:
            ``(2) Additional amount.--In the case of a taxpayer with 
        respect to whom the amount determined under subsection 
        (b)(1)(A) exceeds the adjusted base amount, the amount included 
        in gross income under this section shall be equal to the lesser 
        of--
                    ``(A) the sum of--
                            ``(i) 85 percent of such excess, plus
                            ``(ii) the lesser of the amount determined 
                        under paragraph (1) or an amount equal to one-
                        half of the difference between the adjusted 
                        base amount and the base amount of the 
                        taxpayer, or
                    ``(B) 85 percent of the social security benefits 
                received during the taxable year.''
            (2) Conforming amendments.--Subsection (a) of section 86 is 
        amended--
                    (A) by striking ``Gross'' and inserting:
            ``(1) In general.--Except as provided in paragraph (2), 
        gross'', and
                    (B) by redesignating paragraphs (1) and (2) as 
                subparagraphs (A) and (B), respectively.
    (b) Adjusted Base Amount.--Section 86(c) (defining base amount) is 
amended to read as follows:
    ``(c) Base Amount and Adjusted Base Amount.--For purposes of this 
section--
            ``(1) Base amount.--The term `base amount' means--
                    ``(A) except as otherwise provided in this 
                paragraph, $25,000,
                    ``(B) $32,000 in the case of a joint return, and
                    ``(C) zero in the case of a taxpayer who--
                            ``(i) is married as of the close of the 
                        taxable year (within the meaning of section 
                        7703) but does not file a joint return for such 
                        year, and
                            ``(ii) does not live apart from his spouse 
                        at all times during the taxable year.
            ``(2) Adjusted base amount.--The term `adjusted base 
        amount' means--
                    ``(A) except as otherwise provided in this 
                paragraph, $32,000,
                    ``(B) $40,000 in the case of a joint return, and
                    ``(C) zero in the case of a taxpayer described in 
                paragraph (1)(C).''
    (c) Transfers to the Hospital Insurance Trust Fund.--
            (1) In general.--Paragraph (1) of section 121(e) of the 
        Social Security Amendments of 1983 (Public Law 92-21) is 
        amended by--
                    (A) striking ``There'' and inserting:
                    ``(A) There'';
                    (B) inserting ``(i)'' immediately following 
                ``amounts equivalent to''; and
                    (C) striking the period and inserting the 
                following: ``, less (ii) the amounts equivalent to the 
                aggregate increase in tax liabilities under chapter 1 
                of the Internal Revenue Code of 1986 which is 
                attributable to the amendments to section 86 of such 
                Code made by section 8215 of the Revenue Reconciliation 
                Act of 1993.
                    ``(B) There are hereby appropriated to the hospital 
                insurance trust fund amounts equal to the increase in 
                tax liabilities described in subparagraph (A)(ii). Such 
                appropriated amounts shall be transferred from the 
                general fund of the Treasury on the basis of estimates 
                of such tax liabilities made by the Secretary of the 
                Treasury. Transfers shall be made pursuant to a 
                schedule made by the Secretary of the Treasury that 
                takes into account estimated timing of collection of 
                such liabilities.''
            (2) Definition.--Paragraph (3) of section 121(e) of such 
        Act is amended by redesignating subparagraph (B) as 
        subparagraph (C), and by inserting after subparagraph (A) the 
        following new subparagraph:
                    ``(B) Hospital insurance trust fund.--The term 
                `hospital insurance trust fund' means the fund 
                established pursuant to section 1817 of the Social 
                Security Act.''.
            (3) Conforming amendment.--Paragraph (2) of section 121(e) 
        of such Act is amended in the first sentence by striking 
        ``paragraph (1)'' and inserting ``paragraph (1)(A).''
            (4) Technical amendments.--Paragraph (1)(A) of section 
        121(e) of such Act, as redesignated and amended by paragraph 
        (1), is amended by striking ``1954'' and inserting ``1986''.
    (d) Effective Date.--The amendments made by subsections (a) and (b) 
shall apply to taxable years beginning after December 31, 1993.

                PART II--PROVISIONS AFFECTING BUSINESSES

SEC. 8221. INCREASE IN TOP MARGINAL RATE UNDER SECTION 11.

    (a) General Rule.--Paragraph (1) of section 11(b) (relating to 
amount of tax) is amended--
            (1) by striking ``and'' at the end of subparagraph (B),
            (2) by striking subparagraph (C) and inserting the 
        following:
                    ``(C) 34 percent of so much of the taxable income 
                as exceeds $75,000 but does not exceed $10,000,000, and
                    ``(D) 35 percent of so much of the taxable income 
                as exceeds $10,000,000.'', and
            (3) by adding at the end thereof the following new 
        sentence: ``In the case of a corporation which has taxable 
        income in excess of $15,000,000, the amount of the tax 
        determined under the foregoing provisions of this paragraph 
        shall be increased by an additional amount equal to the lesser 
        of (i) 3 percent of such excess, or (ii) $100,000.''
    (b) Certain Personal Service Corporations.--Paragraph (2) of 
section 11(b) is amended by striking ``34 percent'' and inserting ``35 
percent''.
    (c) Conforming Amendments.--
            (1) Clause (iii) of section 852(b)(3)(D) is amended by 
        striking ``66 percent'' and inserting ``65 percent''.
            (2) Subsection (a) of section 1201 is amended by striking 
        ``34 percent'' each place it appears and inserting ``35 
        percent''.
            (3) Paragraphs (1) and (2) of section 1445(e) are each 
        amended by striking ``34 percent'' and inserting ``35 
        percent''.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning on or after January 1, 1993; except 
that the amendment made by subsection (c)(3) shall take effect on the 
date of the enactment of this Act.

SEC. 8222. DISALLOWANCE OF DEDUCTION FOR LOBBYING EXPENDITURES.

    (a) Disallowance of Deduction.--
            (1) In general.--Part IX of subchapter B of chapter 1 
        (relating to items not deductible) is amended by adding at the 
        end the following new section:

``SEC. 280I. LOBBYING EXPENDITURES.

    ``(a) Deduction Disallowed.--No deduction shall be allowed under 
this chapter for any amount paid or incurred--
            ``(1) for lobbying activities, or
            ``(2) to another person for the conduct of lobbying 
        activities.
    ``(b) Lobbying Activities.--For purposes of this section--
            ``(1) In general.--The term `lobbying activity' means--
                    ``(A) any lobbying contact, or
                    ``(B) any activity in support of a lobbying 
                contact.
            ``(2) Support activities.--For purposes of paragraph 
        (1)(B), the following shall be treated as in support of a 
        lobbying contact:
                    ``(A) Any preparation or planning activity relating 
                to a lobbying contact (including, in the case of a 
                lobbyist, the formulation, review, and management of 
                the lobbying contacts on behalf of a client).
                    ``(B) Any research or other background work 
                relating to a lobbying contact.
                    ``(C) Any activity coordinating the lobbying 
                activity of 2 or more persons.
            ``(3) Meals, entertainment, or travel.--Any amount paid or 
        incurred in connection with the providing of meals, 
        entertainment, or travel to a covered legislative or executive 
        branch official (or to an individual accompanying such 
        official) shall be treated as paid or incurred for a lobbying 
        activity without regard to whether it is in support of a 
        lobbying contact.
    ``(c) Lobbying Contact.--For purposes of this section--
            ``(1) In general.--The term `lobbying contact' means--
                    ``(A) in the case of a lobbyist, any oral or 
                written communication with a covered legislative or 
                executive branch official, and
                    ``(B) in the case of any other person, any oral or 
                written communication with a covered legislative or 
                executive branch official in connection with an attempt 
                to influence governmental actions described in 
                paragraph (2).
            ``(2) Governmental actions affected.--The following 
        governmental actions are described in this paragraph:
                    ``(A) The formulation, modification, adoption, or 
                repeal of legislation (including legislative 
                proposals).
                    ``(B) The formulation, modification, adoption, or 
                repeal of a Federal rule, regulation, Executive order, 
                or any other program, policy, or position of the United 
                States.
                    ``(C) The administration or execution of a Federal 
                program or policy (including the negotiation, award, or 
                administration of a Federal contract, grant, loan, 
                permit, or license).
            ``(3) Exceptions.--The term `lobbying contact' shall not 
        include any contact--
                    ``(A) required by subpoena, civil investigative 
                demand, or otherwise compelled by statute, regulation, 
                or other action of Congress, a State or local 
                legislative body, or a Federal agency,
                    ``(B) made in response to a notice in the Federal 
                Register, Commerce Business Daily, or other similar 
                publication soliciting communications from the public 
                and directed to the agency official specifically 
                designated in the notice to receive such 
                communications,
                    ``(C) made to Federal agency officials with regard 
                to judicial proceedings, criminal or civil law 
                enforcement inquiries, investigations or proceedings, 
                or filings required by statute or regulation,
                    ``(D) made in compliance with written agency 
                procedures regarding an adjudication conducted by the 
                agency under section 554 of title 5, United States 
                Code, or any substantially similar provision, or
                    ``(E) made on behalf of an individual with regard 
                to such individual's benefits, employment, other 
                personal matters involving only that individual, or 
                disclosures by that individual pursuant to applicable 
                whistleblower statutes,
                    ``(F) in the case of any governmental action 
                described in paragraph (2) (B) or (C), which consists 
                of written comments filed in a public docket or other 
                communications made on the record in a public 
                proceeding, or
                    ``(G) in the case of any governmental action 
                described in paragraph (2)(C), which consists of 
                communications which are made to officials serving in 
                the agency responsible for taking such action who serve 
                in the Senior Executive Service or who are members of 
                the uniformed services whose pay grade is lower than 0-
                9 under section 201 of title 37, United States Code.
    ``(d) Special Rule for Exempt Organizations.--
            ``(1) Treatment of dues, etc.--Subsection (a) shall apply 
        to dues, assessments, or other similar amounts paid by any 
        person to an organization exempt from taxation under this 
        chapter (other than an organization described in section 
        170(c)) to the extent such dues, assessments, or amounts are 
        attributable to amounts paid or incurred by the organization 
        which are described in subsection (a).
            ``(2) Special rule for charities.--In the case of an 
        organization described in section 170(c) (other than paragraph 
        (1) thereof or section 170(b)(1)(A)(i)), subsection (a) shall 
        apply to any dues, assessments, contributions, or other similar 
        amounts which are paid to the organization and which are 
        otherwise deductible under this chapter to the extent that any 
        such amount--
                    ``(A) is attributable to amounts paid or incurred 
                by the organization which are described in subsection 
                (a),
                    ``(B) is in connection with lobbying activities of 
                direct financial interest to the payor's (or a related 
                person's) trade or business, and
                    ``(C) when added to all other payments made by the 
                payor (and any related person) to the organization 
                during the calendar year in which the taxable year 
                begins, exceeds $2,000.
            ``(3) Allocation rules.--For purposes of this subsection--
                    ``(A) dues or other similar amounts paid during any 
                calendar year shall, except as provided by the 
                Secretary, only be attributable to amounts not 
                deductible under subsection (a) which are paid or 
                incurred by the organization during such calendar year, 
                and
                    ``(B) amounts which are not deductible under 
                subsection (a) shall be treated as paid first out of 
                dues or other similar amounts.
            ``(4) Reporting requirements.--

                                ``For requirements of organization to 
notify contributors, see section 6050O.
    ``(e) Other Rules and Definitions.--For purposes of this section--
            ``(1) Special rule for certain taxpayers.--In the case of--
                    ``(A) any taxpayer engaged in the trade or business 
                of conducting activities described in subsection (a), 
                or
                    ``(B) any taxpayer who is an employee who is 
                reimbursed by his employer for expenses incurred in 
                conducting such activities,
        subsection (a) shall not apply to expenditures of the taxpayer 
        in conducting such activities on behalf of another person or 
        his employer (but shall apply to payments by such other person 
        or the employer to the taxpayer for conducting the activities).
            ``(2)  Agency.--The term `agency' has the same meaning 
        given such term by section 551(1) of title 5, United States 
        Code.
            ``(3) Covered executive branch official.--The term `covered 
        executive branch official' means--
                    ``(A) the President,
                    ``(B) the Vice President,
                    ``(C) any officer or employee of the Executive 
                Office of the President, other than a clerical or 
                secretarial employee,
                    ``(D) any officer or employee serving in an 
                Executive level I, II, III, IV, or V position, as 
                designated in statute or Executive order,
                    ``(E) any officer or employee serving in a Senior 
                Executive Service position as defined under section 
                3232(a)(2) of title 5, United States Code,
                    ``(F) any member of the uniformed services whose 
                pay grade is at or in excess of O-7 under section 201 
                of title 37, United States Code, and
                    ``(G) any officer or employee serving in a position 
                of confidential or policy-determining character under 
                schedule C of the excepted service pursuant to section 
                7511 of title 5, United States Code.
            ``(4) Covered legislative branch official.--The term 
        `covered legislative branch official' means--
                    ``(A) a Member of Congress,
                    ``(B) an elected officer of Congress,
                    ``(C) any employee of a Member of the House of 
                Representatives, of a committee of the House of 
                Representatives, or on the leadership staff of the 
                House of Representatives,
                    ``(D) any employee of a Senator, of a Senate 
                committee, or on the leadership staff of the Senate, 
                and
                    ``(E) any employee of a joint committee of the 
                Congress.
        Such term includes any member, officer, or employee of a State 
        or local legislative body.
            ``(5) Lobbyist.--The term `lobbyist' means any person who 
        is employed or retained by another person to perform services 
        which include any attempt to influence a governmental action 
        described in subsection (c)(2). Such term does not include a 
        person whose lobbying activities are only incidental to, and 
        are not a significant part of, the services the person performs 
        for such other person. For purposes of the preceding sentence, 
        lobbying activities shall not include activities described in 
        subsection (c)(3).
            ``(6) Legislation.--The term `legislation' has the meaning 
        given such term by section 4911(e)(2).
            ``(7) Coordination with section 4911.--No tax shall be 
        imposed under section 4911 on any amount with respect to which 
        a deduction is not allowed by reason of subsection (d).
    ``(f) Cross Reference.--

                                ``For disallowance of deductions for 
grassroots lobbying expenditures, see section 162(e)(2).''
            (2) Conforming amendments.--
                    (A) Section 162(e) (relating to appearances, etc., 
                with respect to legislation) is amended to read as 
                follows:
    ``(e) Denial of Deduction for Certain Political Expenditures.--
            ``(1) In general.--No deduction shall be allowed under this 
        chapter for any amount paid or incurred--
                    ``(A) for participation in, or intervention in, any 
                political campaign on behalf of (or in opposition to) 
                any candidate for public office, or
                    ``(B) in connection with any attempt to influence 
                the general public, or segments thereof, with respect 
                to legislative matters, elections, or referendums.
            ``(2) Application to dues.--
                    ``(A) In general.--No deduction shall be allowed 
                under this chapter for the portion of dues or other 
                similar amounts paid by the taxpayer to an organization 
                which is allocable to the expenditures described in 
                paragraph (1).
                    ``(B) Allocation.--For purposes of subparagraph 
                (A), expenditures described in paragraph (1) shall be 
                treated as paid first out of dues or other similar 
                amounts.
            ``(3) Cross reference.--

                                ``For disallowance of deductions for 
lobbying expenditures, see section 280I.''
                    (B) The table of sections for part IX of subchapter 
                B of chapter 1 is amended by adding at the end the 
                following new item:

                              ``Sec. 280I. Lobbying expenditures.''
            (3) Effective date.--The amendments made by this subsection 
        shall apply to amounts paid or incurred after December 31, 
        1993.
    (b) Reporting Requirements Relating to Lobbying Expenditures.--
            (1) In general.--Subpart B of part III of subchapter A of 
        chapter 61 (relating to information concerning transactions 
        with other persons) is amended by adding at the end the 
        following new section:

``SEC. 6050O. RETURNS RELATING TO LOBBYING EXPENDITURES OF CERTAIN 
              ORGANIZATIONS.

    ``(a) Requirement of Reporting.--Each organization described in 
section 280I(d) shall make a return, according to the forms or 
regulations prescribed by the Secretary, setting forth the names and 
addresses of persons paying dues to the organization, the amount of the 
dues paid by such person, and the portion of such dues which is 
nondeductible under section 280I.
    ``(b) Statements To Be Furnished to Persons With Respect to Whom 
Information Is Furnished.--Any organization required to make a return 
under subsection (a) shall furnish to each person whose name is 
required to be set forth in such return a written statement showing--
            ``(1) the name and address of the organization, and
            ``(2) the dues paid by the person during the calendar year 
        and the portion of such dues which is nondeductible under 
        section 280I.
The written statement required under the preceding sentence shall be 
furnished (either in person or in a statement mailing by first-class 
mail which includes adequate notice that the statement is enclosed) to 
the persons on or before January 31 of the year following the calendar 
year for which the return under subsection (a) was made and shall be in 
such form as the Secretary may prescribe by regulations.
    ``(c) De Minimus Exception.--This section shall not apply to any 
organization for any calendar year if the organization's lobbying 
expenditures described in section 280I(a) for such year are less than 
$2,000. For purposes of the preceding sentence, overhead costs 
otherwise allocable to lobbying activities shall not be taken into 
account.
    ``(d) Waiver.--The Secretary may waive the reporting requirements 
of this section with respect to any organization or class of 
organizations if the Secretary determines that such reporting is not 
necessary to carry out the purposes of section 280I.
    ``(e) Dues.--For purposes of this section, the term `dues' includes 
assessments, contributions, and other similar amounts.''
            (2) Penalties.--
                    (A) Returns.--Subparagraph (B) of section 
                6724(d)(1) (defining information return) is amended by 
                striking ``or'' at the end of clause (xi), by striking 
                the period at the end of the clause (xii) relating to 
                section 4101(d) and inserting a comma, by redesignating 
                the clause (xii) relating to section 338(h)(10) as 
                clause (xiii), by striking the period at the end of 
                clause (xiii) (as so redesignated) and inserting ``, 
                or'', and by adding at the end the following new 
                clause:
                            ``(xiv) section 6050O(a) (relating to 
                        information on nondeductible lobbying 
                        expenditures).''
                    (B) Payee statements.--Paragraph (2) of section 
                6724(d) (defining payee statement) is amended by 
                striking ``or'' at the end of subparagraph (R), by 
                striking the period at the end of subparagraph (S) and 
                inserting ``, or'', and by adding at the end the 
                following new subparagraph:
                    ``(T) section 6050O(b) (relating to returns on 
                nondeductible lobbying expenditures).''
            (3) Conforming amendment.--The table of sections for 
        subpart B of part III of subchapter A of chapter 61 is amended 
        by adding at the end the following new item:

                              ``Sec. 6050O. Returns relating to 
                                        lobbying expenditures of 
                                        certain organizations.''
            (4) Effective date.--The amendments made by this subsection 
        shall apply to calendar years beginning after December 31, 
        1993.

SEC. 8223. MARK TO MARKET ACCOUNTING METHOD FOR SECURITIES DEALERS.

    (a) General Rule.--Subpart D of part II of subchapter E of chapter 
1 (relating to inventories) is amended by adding at the end thereof the 
following new section:

``SEC. 475. MARK TO MARKET ACCOUNTING METHOD FOR DEALERS IN SECURITIES.

    ``(a) General Rule.--Notwithstanding any other provision of this 
subpart, the following rules shall apply to securities held by a dealer 
in securities:
            ``(1) Any security which is inventory in the hands of the 
        dealer shall be included in inventory at its fair market value.
            ``(2) In the case of any security which is not inventory in 
        the hands of the dealer and which is held at the close of any 
        taxable year--
                    ``(A) the dealer shall recognize gain or loss as if 
                such security were sold for its fair market value on 
                the last business day of such taxable year, and
                    ``(B) any gain or loss shall be taken into account 
                for such taxable year.
        Proper adjustment shall be made in the amount of any gain or 
        loss subsequently realized for gain or loss taken into account 
        under the preceding sentence. The Secretary may provide by 
        regulations for the application of this paragraph at times 
        other than the times provided in this paragraph.
    ``(b) Exceptions.--
            ``(1) In general.--Subsection (a) shall not apply to--
                    ``(A) any security held for investment, and
                    ``(B) any security which is a hedge with respect 
                to--
                            ``(i) a security to which subsection (a) 
                        does not apply, or
                            ``(ii) a position, right to income, or a 
                        liability which is not a security in the hands 
                        of the taxpayer.
        To the extent provided in regulations, subparagraph (B) shall 
        not apply to any security held by a person in its capacity as a 
        dealer in securities.
            ``(2) Identification required.--A security shall not be 
        treated as described in subparagraph (A) or (B) of paragraph 
        (1), as the case may be, unless such security is clearly 
        identified in the dealer's records as being described in such 
        subparagraph before the close of the day on which it was 
        acquired, originated, or entered into (or such other time as 
        the Secretary may by regulations prescribe).
            ``(3) Securities subsequently not exempt.--If a security 
        ceases to be described in paragraph (1) at any time after it 
        was identified as such under paragraph (2), subsection (a) 
        shall apply to any changes in value of the security occurring 
        after the cessation.
            ``(4) Special rule for property held for investment.--To 
        the extent provided in regulations, subparagraph (A) of 
        paragraph (1) shall not apply to any security described in 
        subparagraph (D) or (E) of subsection (c)(2) which is held by a 
        dealer in such securities.
    ``(c) Definitions.--For purposes of this section--
            ``(1) Dealer in securities defined.--The term `dealer in 
        securities' means a taxpayer who--
                    ``(A) regularly purchases securities from or sells 
                securities to customers in the ordinary course of a 
                trade or business; or
                    ``(B) regularly offers to enter into, assume, 
                offset, assign or otherwise terminate positions in 
                securities with customers in the ordinary course of a 
                trade or business.
            ``(2) Security defined.--The term `security' means any--
                    ``(A) share of stock in a corporation;
                    ``(B) partnership or beneficial ownership interest 
                in a widely held or publicly traded partnership or 
                trust;
                    ``(C) note, bond, debenture, or other evidence of 
                indebtedness;
                    ``(D) interest rate, currency, or equity notional 
                principal contract;
                    ``(E) evidence of an interest in, or a derivative 
                financial instrument in, any security described in 
                subparagraph (A), (B), (C), or (D), or any currency, 
                including any option, forward contract, short position, 
                and any similar financial instrument in such a security 
                or currency; and
                    ``(F) position which--
                            ``(i) is not a security described in 
                        subparagraph (A), (B), (C), (D), or (E),
                            ``(ii) is a hedge with respect to such a 
                        security, and
                            ``(iii) is clearly identified in the 
                        dealer's records as being described in this 
                        subparagraph before the close of the day on 
                        which it was acquired or entered into (or such 
                        other time as the Secretary may by regulations 
                        prescribe).
        Subparagraph (E) shall not include any contract to which 
        section 1256(a) applies.
            ``(3) Hedge.--The term `hedge' means any position which 
        reduces the dealer's risk of interest rate or price changes or 
        currency fluctuations, including any position which is 
        reasonably expected to become a hedge within 60 days after the 
        acquisition of the position.
    ``(d) Special Rules.--For purposes of this section--
            ``(1) Coordination with certain rules.--The rules of 
        sections 263(g), 263A, and 1256(a) shall not apply to 
        securities to which subsection (a) applies, and section 1091 
        shall not apply (and section 1092 shall apply) to any loss 
        recognized under subsection (a).
            ``(2) Improper identification.--If a taxpayer--
                    ``(A) identifies any security under subsection 
                (b)(2) as being described in subsection (b)(1) and such 
                security is not so described, or
                    ``(B) fails under subsection (c)(2)(F)(iii) to 
                identify any position which is described in subsection 
                (c)(2)(F) (without regard to clause (iii) thereof) at 
                the time such identification is required,
        the provisions of subsection (a) shall apply to such security 
        or position, except that any loss under this section prior to 
        the disposition of the security or position shall be recognized 
        only to the extent of gain previously recognized under this 
        section (and not previously taken into account under this 
        paragraph) with respect to such security or position.
            ``(3) Character of gain or loss.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B) or section 1236(b)--
                            ``(i) In general.--Any gain or loss with 
                        respect to a security under subsection (a)(2) 
                        shall be treated as ordinary income or loss.
                            ``(ii) Special rule for dispositions.--If--
                                    ``(I) gain or loss is recognized 
                                with respect to a security before the 
                                close of the taxable year, and
                                    ``(II) subsection (a)(2) would have 
                                applied if the security were held as of 
                                the close of the taxable year,
                        such gain or loss shall be treated as ordinary 
                        income or loss.
                    ``(B) Exception.--Subparagraph (A) shall not apply 
                to any gain or loss which is allocable to a period 
                during which--
                            ``(i) the security is described in 
                        subsection (b)(1)(B) (without regard to 
                        subsection (b)(2)),
                            ``(ii) the security is held by a person 
                        other than in connection with its activities as 
                        a dealer in securities, or
                            ``(iii) the security is improperly 
                        identified (within the meaning of subparagraph 
                        (A) or (B) of paragraph (2)).
    ``(e) Regulatory Authority.--The Secretary shall prescribe such 
regulations as may be necessary or appropriate to carry out the 
purposes of this section, including rules--
            ``(1) to prevent the use of year-end transfers, related 
        parties, or other arrangements to avoid the provisions of this 
        section, and
            ``(2) to provide for the application of this section to any 
        security which is a hedge which cannot be identified with a 
        specific security, position, right to income, or liability.''
    (b) Conforming Amendments.--
            (1) Paragraph (1) of section 988(d) is amended--
                    (A) by striking ``section 1256'' and inserting 
                ``section 475 or 1256'', and
                    (B) by striking ``1092 and 1256'' and inserting 
                ``475, 1092, and 1256''.
            (2) The table of sections for subpart D of part II of 
        subchapter E of chapter 1 is amended by adding at the end 
        thereof the following new item:

                              ``Sec. 475. Mark to market accounting 
                                        method for dealers in 
                                        securities.''

    (c) Effective Date.--
            (1) In general.--The amendments made by this section shall 
        apply to all taxable years ending on or after December 31, 
        1993.
            (2) Change in method of accounting.--In the case of any 
        taxpayer required by this section to change its method of 
        accounting for any taxable year--
                    (A) such change shall be treated as initiated by 
                the taxpayer,
                    (B) such change shall be treated as made with the 
                consent of the Secretary, and
                    (C) except as provided in paragraph (3), the net 
                amount of the adjustments required to be taken into 
                account by the taxpayer under section 481 of the 
                Internal Revenue Code of 1986 shall be taken into 
                account ratably over the 5-taxable year period 
                beginning with the first taxable year ending on or 
                after December 31, 1993.
            (3) Special rule for floor specialists and market makers.--
                    (A) In general.--If--
                            (i) a taxpayer (or any predecessor) used 
                        the last-in first-out (LIFO) method of 
                        accounting with respect to any qualified 
                        securities for the 5-taxable year period ending 
                        with its last taxable year ending before 
                        December 31, 1993, and
                            (ii) any portion of the net amount 
                        described in paragraph (2)(C) is attributable 
                        to the use of such method of accounting,
                then paragraph (2)(C) shall be applied by taking such 
                portion into account ratably over the 15-taxable year 
                period beginning with the first taxable year ending on 
                or after December 31, 1993.
                    (B) Qualified security.--For purposes of this 
                paragraph, the term ``qualified security'' means any 
                security acquired--
                            (i) by a floor specialist (as defined in 
                        section 1236(d)(2) of the Internal Revenue Code 
                        of 1986) in connection with the specialist's 
                        duties as a specialist on an exchange, but only 
                        if the security is one in which the specialist 
                        is registered with the exchange, or
                            (ii) by a taxpayer who is a market maker in 
                        connection with the taxpayer's duties as a 
                        market maker, but only if--
                                    (I) the security is included on the 
                                National Association of Security 
                                Dealers Automated Quotation System,
                                    (II) the taxpayer is registered as 
                                a market maker in such security with 
                                the National Association of Security 
                                Dealers, and
                                    (III) as of the last day of the 
                                taxable year preceding the taxpayer's 
                                first taxable year ending on or after 
                                December 31, 1993, the taxpayer (or any 
                                predecessor) has been actively and 
                                regularly engaged as a market maker in 
                                such security for the 2-year period 
                                ending on such date (or, if shorter, 
                                the period beginning 61 days after the 
                                security was listed in such quotation 
                                system and ending on such date).

SEC. 8224. CLARIFICATION OF TREATMENT OF CERTAIN FSLIC FINANCIAL 
              ASSISTANCE.

    (a) General Rule.--For purposes of chapter 1 of the Internal 
Revenue Code of 1986--
            (1) any FSLIC assistance with respect to any loss of 
        principal, capital, or similar amount upon the disposition of 
        any asset shall be taken into account as compensation for such 
        loss for purposes of section 165 of such Code, and
            (2) any FSLIC assistance with respect to any debt shall be 
        taken into account for purposes of section 166, 585, or 593 of 
        such Code in determining whether such debt is worthless (or the 
        extent to which such debt is worthless) and in determining the 
        amount of any addition to a reserve for bad debts arising from 
        the worthlessness or partial worthlessness of such debts.
    (b) FSLIC Assistance.--For purposes of this section, the term 
``FSLIC assistance'' means any assistance (or right to assistance) with 
respect to a domestic building and loan association (as defined in 
section 7701(a)(19) of such Code without regard to subparagraph (C) 
thereof) under section 406(f) of the National Housing Act or section 
21A of the Federal Home Loan Bank Act (or under any similar provision 
of law).
    (c) Effective Date.--
            (1) In general.--Except as otherwise provided in this 
        subsection--
                    (A) The provisions of this section shall apply to 
                taxable years ending on or after March 4, 1991, but 
                only with respect to FSLIC assistance not credited 
                before March 4, 1991.
                    (B) If any FSLIC assistance not credited before 
                March 4, 1991, is with respect to a loss sustained or 
                charge-off in a taxable year ending before March 4, 
                1991, for purposes of determining the amount of any net 
                operating loss carryover to a taxable year ending on or 
                after March 4, 1991, the provisions of this section 
                shall apply to such assistance for purposes of 
                determining the amount of the net operating loss for 
                the taxable year in which such loss was sustained or 
                debt written off. Except as provided in the preceding 
                sentence, this section shall not apply to any FSLIC 
                assistance with respect to a loss sustained or charge-
                off in a taxable year ending before March 4, 1991.
            (2) Exceptions.--The provisions of this section shall not 
        apply to any assistance to which the amendments made by section 
        1401(a)(3) of the Financial Institutions Reform, Recovery, and 
        Enforcement Act of 1989 apply.

SEC. 8225. MODIFICATION OF CORPORATE ESTIMATED TAX RULES.

    (a) Increase in Required Installment Based on Current Year Tax.--
            (1) In general.--Clause (i) of section 6655(d)(1)(B) 
        (relating to amount of required installment) is amended by 
        striking ``91 percent'' each place it appears and inserting 
        ``100 percent''.
            (2) Conforming amendments.--
                    (A) Subsection (d) of section 6655 is amended--
                            (i) by striking paragraph (3), and
                            (ii) by striking ``91 percent'' in the 
                        paragraph heading of paragraph (2) and 
                        inserting ``100 percent''.
                    (B) Clause (ii) of section 6655(e)(2)(B) is amended 
                by striking the table contained therein and inserting 
                the following:

                    ``In the case of the following 
                    re-
                                                         The applicable
                      quired installments:
                                                         percentage is:
                          1st........................          25      
                          2nd........................          50      
                          3rd........................          75      
                          4th........................      100.''      
                    (C) Clause (i) of section 6655(e)(3)(A) is amended 
                by striking ``91 percent'' and inserting ``100 
                percent''.
    (b) Modification of Periods for Applying Annualization.--
            (1) Clause (i) of section 6655(e)(2)(A) is amended--
                    (A) by striking ``or for the first 5 months'' in 
                subclause (II),
                    (B) by striking ``or for the first 8 months'' in 
                subclause (III), and
                    (C) by striking ``or for the first 11 months'' in 
                subclause (IV).
            (2) Paragraph (2) of section 6655(e) is amended by adding 
        at the end thereof the following new subparagraph:
                    ``(C) Election for different annualization 
                periods.--
                            ``(i) If the taxpayer makes an election 
                        under this clause--
                                    ``(I) subclause (I) of subparagraph 
                                (A)(i) shall be applied by substituting 
                                `2 months' for `3 months',
                                    ``(II) subclause (II) of 
                                subparagraph (A)(i) shall be applied by 
                                substituting `4 months' for `3 months',
                                    ``(III) subclause (III) of 
                                subparagraph (A)(i) shall be applied by 
                                substituting `7 months' for `6 months', 
                                and
                                    ``(IV) subclause (IV) of 
                                subparagraph (A)(i) shall be applied by 
                                substituting `10 months' for `9 
                                months'.
                            ``(ii) If the taxpayer makes an election 
                        under this clause--
                                    ``(I) subclause (II) of 
                                subparagraph (A)(i) shall be applied by 
                                substituting `5 months' for `3 months',
                                    ``(II) subclause (III) of 
                                subparagraph (A)(i) shall be applied by 
                                substituting `8 months' for `6 months', 
                                and
                                    ``(III) subclause (IV) of 
                                subparagraph (A)(i) shall be applied by 
                                substituting `11 months' for `9 
                                months'.
                            ``(iii) An election under clause (i) or 
                        (ii) shall apply to the taxable year for which 
                        made and such an election shall be effective 
                        only if made on or before the date required for 
                        the payment of the first required installment 
                        for such taxable year.''
            (3) The last sentence of section 6655(g)(3) is amended by 
        striking ``and subsection (e)(2)(A)'' and inserting ``and, 
        except in the case of an election under subsection (e)(2)(C), 
        subsection (e)(2)(A)''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1993.

SEC. 8226. MODIFICATIONS OF DISCHARGE OF INDEBTEDNESS PROVISIONS.

    (a) Repeal of Stock for Debt Exception in Determining Income From 
Discharge of Indebtedness.--
            (1) In general.--Subsection (e) of section 108 is amended--
                    (A) by striking paragraph (10) and by redesignating 
                paragraph (11) as paragraph (10), and
                    (B) by amending paragraph (8) to read as follows:
            ``(8) Indebtedness satisfied by corporation's stock.--For 
        purposes of determining income of a debtor from discharge of 
        indebtedness, if a debtor corporation transfers stock to a 
        creditor in satisfaction of its indebtedness, such corporation 
        shall be treated as having satisfied the indebtedness with an 
        amount of money equal to the fair market value of the stock.''
            (2) Conforming amendment.--Subparagraph (C) of section 
        382(l)(5) is amended to read as follows:
                    ``(C) Coordination with section 108.--In applying 
                section 108(e)(8) to any case to which subparagraph (A) 
                applies, there shall not be taken into account any 
                indebtedness for interest described in subparagraph 
                (B).''
            (3) Effective date.--
                    (A) In general.--Except as otherwise provided in 
                this paragraph, the amendments made by this subsection 
                shall apply to stock transferred after June 17, 1993, 
                in satisfaction of any indebtedness.
                    (B) Exception for title 11 cases.--The amendments 
                made by this subsection shall not apply to stock 
                transferred in satisfaction of any indebtedness if such 
                transfer is in a title 11 or similar case (as defined 
                in section 368(a)(3)(A) of the Internal Revenue Code of 
                1986) which was filed on or before June 17, 1993.
                    (C) Exception for binding contracts.--The 
                amendments made by this section shall not apply to any 
                stock transferred after June 17, 1993, and before 
                January 1, 1994, if such transfer is pursuant to a 
                binding contract in effect on June 17, 1993, and at all 
                times thereafter before the transfer.
                    (D) Exception for certain filings.--The amendments 
                made by this section shall not apply to any stock 
                transferred in satisfaction of any indebtedness if--
                            (i) such transfer occurs after June 17, 
                        1993, and before January 1, 1994, and
                            (ii) the taxpayer had filed with the 
                        Securities and Exchange Commission on or before 
                        June 17, 1993, a registration statement which 
                        proposed a stock-for-debt exchange with respect 
                        to such indebtedness, and which discussed the 
                        possible application of the stock-for-debt 
                        exception to such exchange.
    (b) Tax Attributes Subject to Reduction.--
            (1) Minimum tax credit.--Section 108(b)(2) (relating to tax 
        attributes affected; order of reduction) is amended by 
        redesignating subparagraphs (C), (D), and (E) as subparagraphs 
        (D), (E), and (F) and by adding after subparagraph (B) the 
        following new subparagraph:
                    ``(C) Minimum tax credit.--The amount of the 
                minimum tax credit available under section 53(b) as of 
                the beginning of the taxable year immediately following 
                the taxable year of the discharge.''
            (2) Passive activity losses and credits.--Section 
        108(b)(2), as amended by paragraph (1), is amended by 
        redesignating subparagraph (F) as subparagraph (G) and by 
        adding after subparagraph (E) the following new subparagraph:
                    ``(F) Passive activity loss and credit 
                carryovers.--Any passive activity loss or credit 
                carryover of the taxpayer under section 469(b) from the 
                taxable year of the discharge.''
            (3) Conforming amendments.--
                    (A) Subparagraph (B) of section 108(b)(3) is 
                amended to read as follows:
                    ``(B) Credit carryover reduction.--The reductions 
                described in subparagraphs (B), (C), and (G) shall be 
                33\1/3\ cents for each dollar excluded by subsection 
                (a). The reduction described in subparagraph (F) in any 
                passive activity credit carryover shall be 33\1/3\ 
                cents for each dollar excluded by subsection (a).''
                    (B) Subparagraph (B) of section 108(b)(4) is 
                amended by striking ``(C)'' in the text and heading 
                thereof and inserting ``(D)''.
                    (C) Subparagraph (C) of section 108(b)(4) is 
                amended by striking ``(E)'' in the text and heading 
                thereof and inserting ``(G)''.
                    (D) Subparagraph (B) of section 108(g)(3) is 
                amended--
                            (i) by striking ``subparagraphs (A), (B), 
                        (C), and (E)'' and inserting ``subparagraphs 
                        (A), (B), (C), (D), (F), and (G)'',
                            (ii) by striking ``subparagraphs (B) and 
                        (E)'' and inserting ``subparagraphs (B), (C), 
                        and (G)'', and
                            (iii) by inserting before the period at the 
                        end the following: ``and the attribute 
                        described in subparagraph (F) of subsection 
                        (b)(2) to the extent attributable to any 
                        passive activity credit carryover''.
            (4) Effective date.--The amendments made by this section 
        shall apply to taxable years beginning after December 31, 1993.

SEC. 8227. LIMITATION ON SECTION 936 CREDIT.

    (a) General Rule.--Subsection (a) of section 936 (relating to 
Puerto Rico and possession tax credit) is amended--
            (1) by striking ``as provided in paragraph (3)'' in 
        paragraph (1) and inserting ``as otherwise provided in this 
        section'';
            (2) by adding at the end thereof the following new 
        paragraph:
            ``(4) Limitations on credit for active business income.--
                    ``(A) In general.--The amount of the credit 
                determined under paragraph (1)(A) for any taxable year 
                shall not exceed the sum of the following amounts:
                            ``(i) 95 percent of the sum of--
                                    ``(I) the aggregate amount of the 
                                possession corporation's qualified 
                                possession wages for such taxable year, 
                                plus
                                    ``(II) the allocable employee 
                                fringe benefit expenses of the 
                                possession corporation for the taxable 
                                year.
                            ``(ii) The sum of--
                                    ``(I) 50 percent of the 
                                depreciation deductions allowable under 
                                section 167 to the possession 
                                corporation for the taxable year with 
                                respect to short-life qualified 
                                tangible property,
                                    ``(II) 75 percent of the 
                                depreciation deductions allowable under 
                                section 167 to the possession 
                                corporation for the taxable year with 
                                respect to medium-life qualified 
                                tangible property, and
                                    ``(III) 100 percent of the 
                                depreciation deductions allowable under 
                                section 167 to the possession 
                                corporation for the taxable year with 
                                respect to long-life qualified tangible 
                                property.
                            ``(iii) If the possession corporation does 
                        not have an election to use the method 
                        described in subsection (h)(5)(C)(ii) (relating 
                        to profit split) in effect for the taxable 
                        year, the amount of qualified possession income 
                        taxes for the taxable year allocable to 
                        nonsheltered income.
                    ``(B) Election to take reduced credit.--
                            ``(i) In general.--If an election under 
                        this subparagraph applies to a possession 
                        corporation for any taxable year--
                                    ``(I) subparagraph (A), and the 
                                provisions of subsection (i), shall not 
                                apply to such possession corporation 
                                for such taxable year, and
                                    ``(II) the credit determined under 
                                paragraph (1)(A) for such taxable year 
                                shall be the applicable percentage of 
                                the credit which would otherwise have 
                                been determined under such paragraph.
                        Notwithstanding subclause (I), a possession 
                        corporation to which an election under this 
                        subparagraph applies shall be entitled to the 
                        benefits of subsection (i)(3)(B) for taxes 
                        allocable (on a pro rata basis) to taxable 
                        income the tax on which is not offset by reason 
                        of this subparagraph.
                            ``(ii) Applicable percentage.--The term 
                        `applicable percentage' means the percentage 
                        determined in accordance with the following 
                        table:

``In the case of taxable                             The percentage is:
year beginning in:
    1994..........................................                   60
    1995..........................................                   55
    1996..........................................                   50
    1997..........................................                   45
    1998 and thereafter...........................                  40.
                            ``(iii) Election.--
                                    ``(I) In general.--An election 
                                under this subparagraph by any 
                                possession corporation may be made only 
                                for the corporation's first taxable 
                                year beginning after December 31, 1993, 
                                for which it is a possession 
                                corporation.
                                    ``(II) Period of election.--An 
                                election under this subparagraph shall 
                                apply to the taxable year for which 
                                made and all subsequent taxable years 
                                unless revoked.
                                    ``(III) Affiliated groups.--If, for 
                                any taxable year, an election is not in 
                                effect for any possession corporation 
                                which is a member of an affiliated 
                                group, any election under this 
                                subparagraph for any other member of 
                                such group is revoked for such taxable 
                                year and all subsequent taxable years. 
                                For purposes of this subclause, members 
                                of an affiliated group shall be 
                                determined without regard to the 
                                exceptions contained in section 1504(b) 
                                and as if the constructive ownership 
                                rules of section 1563(e) applied for 
                                purposes of section 1504(a). The 
                                Secretary may prescribe regulations to 
                                prevent the avoidance of this subclause 
                                through deconsolidation or otherwise.
                    ``(C) Cross reference.--

                                ``For definitions and special rules 
applicable to this paragraph, see subsection (i).''; and
            (3) by inserting ``97.5 percent of'' after ``equal to'' in 
        paraagraph (1).
    (b) Definitions and Special Rules.--Section 936 is amended by 
adding at the end thereof the following new subsection:
    ``(i) Definitions and Special Rules Relating to Limitations of 
Subsection (a)(4).--
            ``(1) Qualified possession wages.--For purposes of this 
        section--
                    ``(A) In general.--The term `qualified possession 
                wages' means wages paid or incurred by the possession 
                corporation during the taxable year in connection with 
                the active conduct of a trade or business within a 
                possession of the United States to any employee for 
                services performed in such possession, but only if such 
                services are performed while the principal place of 
                employment of such employee is within such possession.
                    ``(B) Limitation on amount of wages taken into 
                account.--
                            ``(i) In general.--The amount of wages 
                        which may be taken into account under 
                        subparagraph (A) with respect to any employee 
                        for any taxable year shall not exceed 85 
                        percent of the contribution and benefit base 
                        determined under section 230 of the Social 
                        Security Act for the calendar year in which 
                        such taxable year begins.
                            ``(ii) Treatment of part-time employees, 
                        etc.--If--
                                    ``(I) any employee is not employed 
                                by the possession corporation on a 
                                substantially full-time basis at all 
                                times during the taxable year, or
                                    ``(II) the principal place of 
                                employment of any employee with the 
                                possession corporation is not within a 
                                possession at all times during the 
                                taxable year,
                        the limitation applicable under clause (i) with 
                        respect to such employee shall be the 
                        appropriate portion (as determined by the 
                        Secretary) of the limitation which would 
                        otherwise be in effect under clause (i).
                    ``(C) Treatment of certain employees.--The term 
                `qualified possession wages' shall not include any 
                wages paid to employees who are assigned by the 
                employer to perform services for another person, unless 
                the principal trade or business of the employer is to 
                make employees available for temporary periods to other 
                persons in return for compensation. All possession 
                corporations treated as 1 corporation under paragraph 
                (6) shall be treated as 1 employer for purposes of the 
                preceding sentence.
                    ``(D) Wages.--
                            ``(i) In general.--Except as provided in 
                        clause (ii), the term `wages' has the meaning 
                        given to such term by subsection (b) of section 
                        3306 (determined without regard to any dollar 
                        limitation contained in such section). For 
                        purposes of the preceding sentence, such 
                        subsection (b) shall be applied as if the term 
                        `United States' included all possessions of the 
                        United States.
                            ``(ii) Special rule for agricultural labor 
                        and railway labor.--In any case to which 
                        subparagraph (A) or (B) of paragraph (1) of 
                        section 51(h) applies, the term `wages' has the 
                        meaning given to such term by section 51(h)(2).
            ``(2) Allocable employee fringe benefit expenses.--
                    ``(A) In general.--The allocable employee fringe 
                benefit expenses of any possession corporation for any 
                taxable year is an amount which bears the same ratio to 
                the amount determined under subparagraph (B) for such 
                taxable year as--
                            ``(i) the aggregate amount of the 
                        possession corporation's qualified possession 
                        wages for such taxable year, bears to
                            ``(ii) the aggregate amount of the wages 
                        paid or incurred by such possession corporation 
                        during such taxable year.
                In no event shall the amount determined under the 
                preceding sentence exceed 15 percent of the amount 
                referred to in clause (i).
                    ``(B) Expenses taken into account.--For purposes of 
                subparagraph (A), the amount determined under this 
                subparagraph for any taxable year is the aggregate 
                amount allowable as a deduction under this chapter to 
                the possession corporation for such taxable year 
                (determined without regard to paragraph (5)) with 
                respect to--
                            ``(i) employer contributions under a stock 
                        bonus, pension, profit-sharing, or annuity 
                        plan,
                            ``(ii) employer-provided coverage under any 
                        accident or health plan for employees, and
                            ``(iii) the cost of life or disability 
                        insurance provided to employees.
                Any amount treated as wages under paragraph (1)(D) 
                shall not be taken into account under this 
                subparagraph.
            ``(3) Treatment of possession taxes.--
                    ``(A) Amount of credit for possession corporations 
                not using profit split.--
                            ``(i) In general.--For purposes of 
                        subsection (a)(4)(A)(iii), the amount of the 
                        qualified possession income taxes for any 
                        taxable year allocable to nonsheltered income 
                        shall be an amount which bears the same ratio 
                        to the possession income taxes for such taxable 
                        year as--
                                    ``(I) the increase in the tax 
                                liability of the possession corporation 
                                under this chapter by reason of 
                                subsection (a)(4)(A) (without regard to 
                                clause (iii) thereof) and paragraph (5) 
                                of this subsection, bears to
                                    ``(II) the tax liability of the 
                                possession corporation for the taxable 
                                year determined without regard to the 
                                credit allowable under this section and 
                                without regard to paragraph (5) of this 
                                subsection.
                            ``(ii) Limitation on amount of taxes taken 
                        into account.--Possession income taxes shall 
                        not be taken into account under clause (i) for 
                        any taxable year to the extent that the amount 
                        of such taxes exceeds 9 percent of the amount 
                        of the taxable income for such taxable year.
                    ``(B)  Deduction for possession corporations using 
                profit split.--Notwithstanding subsection (c) if a 
                possession corporation is not described in subsection 
                (a)(4)(A)(iii) for any taxable year, such possession 
                corporation shall be allowed a deduction for such 
                taxable year in an amount which bears the same ratio to 
                the possession income taxes for such taxable year as--
                            ``(i) the increase in the tax liability of 
                        the possession corporation under this chapter 
                        by reason of subsection (a)(4)(A) and paragraph 
                        (5) of this subsection, bears to
                            ``(ii) the tax liability of the possession 
                        corporation for the taxable year determined 
                        without regard to the credit allowable under 
                        this section and without regard to paragraph 
                        (5) of this subsection.
                In determining the credit under subsection (a) and in 
                applying the preceding sentence, taxable income shall 
                be determined without regard to the preceding sentence.
                    ``(C) Possession income taxes.--For purposes of 
                this paragraph, the term `possession income taxes' 
                means any taxes of a possession of the United States 
                which are treated as not being income, war profits, or 
                excess profits taxes paid or accrued to a possession of 
                the United States by reason of subsection (c).
            ``(4) Categories of depreciable property.--For purposes of 
        this section--
                    ``(A) Qualified tangible property.--The term 
                `qualified tangible property' means any tangible 
                property used by the possession corporation in a 
                possession of the United States in the active conduct 
                of a trade or business within such possession.
                    ``(B) Short-life qualified tangible property.--The 
                term `short-life qualified tangible property' means any 
                qualified tangible property to which section 168 
                applies and which is 3-year property or 5-year property 
                for purposes of such section.
                    ``(C) Medium-life qualified tangible property.--The 
                term `medium-life qualified tangible property' means 
                any qualified tangible property to which section 168 
                applies and which is 7-year property or 10-year 
                property for purposes of such section.
                    ``(D) Long-life qualified tangible property.--The 
                term `long-life qualified tangible property' means any 
                qualified tangible property to which section 168 
                applies and which is not described in subparagraph (B) 
                or (C).
                    ``(E) Transitional rule.--In the case of any 
                qualified tangible property to which section 168 (as in 
                effect on the day before the date of the enactment of 
                the Tax Reform Act of 1986) applies, any reference in 
                this paragraph to section 168 shall be treated as a 
                reference to such section as so in effect.
            ``(5) Denial of double benefit.--
                    ``(A) In general.--Notwithstanding any other 
                provision of this chapter, no deduction shall be 
                allowed to a possession corporation for--
                            ``(i) any qualified possession wages,
                            ``(ii) any allocable employee fringe 
                        benefit expenses, and
                            ``(iii) any depreciation deductions 
                        referred to in subsection (a)(4)(A)(ii).
                    ``(B) Coordination with other provisions.--
                Subparagraph (A) shall not apply for purposes of--
                            ``(i) determining the amount of the credit 
                        allowable under subsection (a)(1)(A) or 
                        otherwise determining the taxable income of the 
                        possession corporation under any other 
                        provision of this section, and
                            ``(ii) determining adjustments to the basis 
                        of any property on account of depreciation 
                        deductions.
            ``(6) Election to compute credit on consolidated basis.--
                    ``(A) In general.--Any affiliated group may elect 
                to treat all possession corporations which would be 
                members of such group but for section 1504(b) (3) or 
                (4) as 1 corporation for purposes of this section. The 
                credit determined under this section with respect to 
                such 1 corporation shall be allocated among such 
                possession corporations in such manner as the Secretary 
                may prescribe.
                    ``(B) Election.--An election under subparagraph (A) 
                shall apply to the taxable year for which made and all 
                succeeding taxable years unless revoked with the 
                consent of the Secretary.
            ``(7) Possession corporation.--The term `possession 
        corporation' means a domestic corporation for which the 
        election provided in subsection (a) is in effect.''
    (c) Minimum Tax Treatment.--
            (1) In general.--Clause (ii) of section 56(g)(4)(C) 
        (relating to treatment of special rule for certain dividends) 
        is amended by striking ``sections 936 and 921'' and inserting 
        ``sections 936 (including subsections (a)(4) and (i) thereof) 
        and 921''.
            (2) Treatment of foreign taxes.--Clause (iii) of section 
        56(g)(4)(C) is amended by adding at the end thereof the 
        following subclauses:
                                    ``(IV) Separate application of 
                                foreign tax credit limitations.--In 
                                determining the alternative minimum 
                                foreign tax credit, section 904(d) 
                                shall be applied as if dividends from a 
                                corporation eligible for the credit 
                                provided by section 936 were a separate 
                                category of income referred to in a 
                                subparagraph of section 904(d)(1).
                                    ``(V) Coordination with limitation 
                                on 936 credit.--Any reference in this 
                                clause to a dividend received from a 
                                corporation eligible for the credit 
                                provided by section 936 shall be 
                                treated as a reference to the portion 
                                of any such dividend for which the 
                                dividends received deduction is 
                                disallowed under clause (i) after the 
                                application of clause (ii)(I).''
    (d) Conforming Amendment.--Paragraph (4) of section 904(b) is 
amended by inserting before the period at the end thereof the 
following: ``(without regard to subsections (a)(4) and (i) thereof)''.
    (e) Increase in Limitation on Cover Over.--Paragraph (1) of section 
7652(f) is amended to read as follows:
            ``(1) $10.50 ($11.30 in the case of distilled spirits 
        brought into the United States during the 5-year period 
        beginning on July 1, 1995), or.''
    (f) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1993; except that 
the amendment made by subsection (e) shall take effect on October 1, 
1993.

SEC. 8228. MODIFICATION TO LIMITATION ON DEDUCTION FOR CERTAIN 
              INTEREST.

    (a) General Rule.--Paragraph (3) of section 163(j) (defining 
disqualified interest) is amended to read as follows:
            ``(3) Disqualified interest.--For purposes of this 
        subsection, the term `disqualified interest' means--
                    ``(A) any interest paid or accrued by the taxpayer 
                (directly or indirectly) to a related person if no tax 
                is imposed by this subtitle with respect to such 
                interest, and
                    ``(B) any interest paid or accrued by the taxpayer 
                with respect to any indebtedness to a person who is not 
                a related person if--
                            ``(i) there is a disqualified guarantee of 
                        such indebtedness, and
                            ``(ii) no gross basis tax is imposed by 
                        this subtitle with respect to such interest.''
    (b) Definitions.--Paragraph (6) of section 163(j) is amended by 
adding at the end thereof the following new subparagraphs:
                    ``(D) Disqualified guarantee.--
                            ``(i) In general.--Except as provided in 
                        clause (ii), the term `disqualified guarantee' 
                        means any guarantee by a related person which 
                        is--
                                    ``(I) an organization exempt from 
                                taxation under this subtitle, or
                                    ``(II) a foreign person.
                            ``(ii) Exceptions.--The term `disqualified 
                        guarantee' shall not include a guarantee--
                                    ``(I) in any circumstances 
                                identified by the Secretary by 
                                regulation, where the interest on the 
                                indebtedness would have been subject to 
                                a net basis tax if the interest had 
                                been paid to the guarantor, or
                                    ``(II) if the taxpayer owns a 
                                controlling interest in the guarantor.
                        For purposes of subclause (II), except as 
                        provided in regulations, the term `a 
                        controlling interest' means direct or indirect 
                        ownership of at least 80 percent of the total 
                        voting power and value of all classes of stock 
                        of a corporation, or 80 percent of the profit 
                        and capital interests in any other entity. For 
                        purposes of the preceding sentence, the rules 
                        of paragraphs (1) and (5) of section 267(c) 
                        shall apply; except that such rules shall also 
                        apply to interest in entities other than 
                        corporations.
                            ``(iii) Guarantee.--Except as provided in 
                        regulations, the term `guarantee' includes any 
                        arrangement under which a person (directly or 
                        indirectly through an entity or otherwise) 
                        assures, on a conditional or unconditional 
                        basis, the payment of another person's 
                        obligation under any indebtedness.
                    ``(E) Gross basis and net basis taxation.--
                            ``(i) Gross basis tax.--The term `gross 
                        basis tax' means any tax imposed by this 
                        subtitle which is determined by reference to 
                        the gross amount of any item of income without 
                        any reduction for any deduction allowed by this 
                        subtitle.
                            ``(ii) Net basis tax.--The term `net basis 
                        tax' means any tax imposed by this subtitle 
                        which is a not a gross basis tax.''
    (c) Conforming Amendment.--Subparagraph (B) of section 163(j)(5) is 
amended by striking ``to a related person''.
    (d) Effective Date.--The amendments made by this section shall 
apply to interest paid or accrued in taxable years beginning after 
December 31, 1993.

                    PART III--FOREIGN TAX PROVISIONS

 Subpart A--Current Taxation of Certain Earnings of Controlled Foreign 
                              Corporations

SEC. 8231. EARNINGS INVESTED IN EXCESS PASSIVE ASSETS.

    (a) General Rule.--Paragraph (1) of section 951(a) (relating to 
amounts included in gross income of United States shareholders) is 
amended by striking ``and'' at the end of subparagraph (A), by striking 
the period at the end of subparagraph (B) and inserting ``; and'', and 
by adding at the end thereof the following new subparagraph:
                    ``(C) the amount determined under section 956A with 
                respect to such shareholder for such year (but only to 
                the extent not excluded from gross income under section 
                959(a)(3)).''
    (b) Amount of Inclusion.--Subpart F of part III of subchapter N of 
chapter 1 is amended by inserting after section 956 the following new 
section:

``SEC. 956A. EARNINGS INVESTED IN EXCESS PASSIVE ASSETS.

    ``(a) General Rule.--In the case of any controlled foreign 
corporation, the amount determined under this section with respect to 
any United States shareholder for any taxable year is the lesser of--
            ``(1) the excess (if any) of--
                    ``(A) such shareholder's pro rata share of the 
                amount of the controlled foreign corporation's excess 
                passive assets for such taxable year, over
                    ``(B) the amount of earnings and profits described 
                in section 959(c)(1)(B) with respect to such 
                shareholder, or
            ``(2) such shareholder's pro rata share of the applicable 
        earnings of such controlled foreign corporation determined 
        after the application of section 951(a)(1)(B).
    ``(b) Applicable Earnings.--For purposes of this section, the term 
`applicable earnings' means, with respect to any controlled foreign 
corporation, the sum of--
            ``(1) the amount referred to in section 316(a)(1) to the 
        extent such amount was accumulated in taxable years beginning 
        after September 30, 1993, and
            ``(2) the amount referred to in section 316(a)(2),
but reduced by distributions made during the taxable year and reduced 
by the earnings and profits described in section 959(c)(1) to the 
extent that the earnings and profits so described were accumulated in 
taxable years beginning after September 30, 1993.
    ``(c) Excess Passive Assets.--For purposes of this section--
            ``(1) In general.--The excess passive assets of any 
        controlled foreign corporation for any taxable year is the 
        excess (if any) of--
                    ``(A) the average of the amounts of passive assets 
                held by such corporation as of the close of each 
                quarter of such taxable year, over
                    ``(B) 25 percent of the average of the amounts of 
                total assets held by such corporation as of the close 
                of each quarter of such taxable year.
        For purposes of the preceding sentence, the amount taken into 
        account with respect to any asset shall be its adjusted basis 
        as determined for purposes of computing earnings and profits.
            ``(2) Passive asset.--
                    ``(A) In general.--Except as otherwise provided in 
                this section, the term `passive asset' means any asset 
                held by the controlled foreign corporation which 
                produces passive income (as defined in section 1296(b)) 
                or is held for the production of such income.
                    ``(B) Coordination with section 956.--The term 
                `passive asset' shall not include any United States 
                property (as defined in section 956).
            ``(3)Certain rules to apply.--For purposes of this 
        subsection, the rules of the following provisions shall apply:
                    ``(A) Section 1296(c) (relating to look-thru 
                rules).
                    ``(B) Section 1297(d) (relating to leasing rules).
                    ``(C) Section 1297(e) (relating to intangible 
                property).
    ``(d) Treatment of Certain Chains of Controlled Foreign 
Corporation.--
            ``(1) In general.--For purposes of applying subsection 
        (c)--
                    ``(A) all controlled foreign corporations which are 
                members of the same CFC chain shall be treated as 1 
                controlled foreign corporation, and
                    ``(B) the amount of the excess passive assets 
                determined with respect to such 1 corporation shall be 
                allocated among the controlled foreign corporations 
                which are members of such chain in proportion to their 
                respective amounts of applicable earnings.
            ``(2) CFC chain.--For purposes of paragraph (1), the term 
        `CFC chain' means any chain of controlled foreign corporations 
        connected through stock ownership, but only if more than 50 
        percent (by vote or value) of the stock of each member of such 
        chain (other than the top tier corporation) is owned (directly 
        or indirectly) by one or more other members of the chain.
    ``(e) Special Rule Where Corporation Ceases To Be Controlled 
Foreign Corporation During Taxable Year.--If any foreign corporation 
ceases to be a controlled foreign corporation during any taxable year--
            ``(1) the determination of any United States shareholder's 
        pro rata share shall be made on the basis of stock owned 
        (within the meaning of section 958(a)) by such shareholder on 
        the last day during the taxable year on which the foreign 
        corporation is a controlled foreign corporation, and
            ``(2) the amount of such corporation's excess passive 
        assets for such taxable year shall be determined by only taking 
        into account quarters ending on or before such last day, and
            ``(3) in determining applicable earnings, the amount taken 
        into account by reason of being described in paragraph (2) of 
        section 316(a) shall be the portion of the amount so described 
        which is allocable (on a pro rata basis) to the part of such 
        year during which the corporation is a controlled foreign 
        corporation.
    ``(f) Regulations.--The Secretary shall prescribe such regulations 
as may be necessary to carry out the purposes of this section, 
including regulations to prevent the avoidance of the provisions of 
this section through reorganizations or otherwise.''
    (c) Previously Taxed Income Rules.--
            (1) In general.--Subsection (a) of section 959 (relating to 
        exclusion from gross income of previously taxed earnings and 
        profits) is amended by striking ``or'' at the end of paragraph 
        (1), by adding ``or'' at the end of paragraph (2), and by 
        inserting after paragraph (2) the following new paragraph:
            ``(3) such amounts would, but for this subsection, be 
        included under section 951(a)(1)(C) in the gross income of,''.
            (2) Allocation rules.--
                    (A) Subsection (a) of section 959 is amended by 
                adding at the end thereof the following new sentence: 
                ``The rules of subsection (c) shall apply for purposes 
                of paragraph (1) of this subsection and the rules of 
                subsection (f) shall apply for purposes of paragraphs 
                (2) and (3) of this subsection.''.
                    (B) Section 959 is amended by adding at the end 
                thereof the following new subsection:
    ``(f) Allocation Rules for Certain Inclusions.--
            ``(1) In general.--For purposes of this section--
                    ``(A) amounts that would be included under 
                subparagraph (B) of section 951(a)(1) (determined 
                without regard to this section) shall be treated as 
                attributable first to earnings described in subsection 
                (c)(2), and then to earnings described in subsection 
                (c)(3), and
                    ``(B) amounts that would be included under 
                subparagraph (C) of section 951(a)(1) (determined 
                without regard to this section) shall be treated as 
                attributable first to earnings described in subsection 
                (c)(2) to the extent the earnings so described were 
                accumulated in taxable years beginning after September 
                30, 1993, and then to earnings described in subsection 
                (c)(3).
            ``(2) Treatment of distributions.--In applying this 
        section, actual distributions shall be taken into account 
        before amounts that would be included under subparagraphs (B) 
        and (C) of section 951(a)(1) (determined without regard to this 
        section).''
                    (C) Paragraph (1) of section 959(c) is amended to 
                read as follows:
            ``(1) first to the aggregate of--
                    ``(A) earnings and profits attributable to amounts 
                included in gross income under section 951(a)(1)(B) (or 
                which would have been included except for subsection 
                (a)(2) of this section), and
                    ``(B) earnings and profits attributable to amounts 
                included in gross income under section 951(a)(1)(C) (or 
                which would have been included except for subsection 
                (a)(3) of this section),
        with any distribution being allocated between earnings and 
        profits described in subparagraph (A) and earnings and profits 
        described in subparagraph (B) proportionately on the basis of 
        the respective amounts of such earnings and profits,''.
            (3) Conforming amendments.--
                    (A) Subsections (a) and (b) of section 959 are each 
                amended by striking ``earnings and profits for a 
                taxable year'' and inserting ``earnings and profits''.
                    (B) Paragraph (2) of section 959(c) is amended to 
                read as follows:
            ``(2) then to earnings and profits attributable to amounts 
        included in gross income under section 951(a)(1)(A) (but 
        reduced by amounts not included under subparagraph (B) or (C) 
        of section 951(a)(1) because of the exclusions in paragraphs 
        (2) and (3) of subsection (a) of this section), and''
                    (C) Subsection (b) of section 989 is amended by 
                striking ``section 951(a)(1)(B)'' and inserting 
                ``subparagraph (B) or (C) of section 951(a)(1)''.
    (d) Modifications to Passive Foreign Investment Company Rules.--
            (1) Adjusted basis used in certain determinations.--
        Subsection (a) of section 1296 is amended by striking the 
        material following paragraph (2) and inserting the following:
``In the case of a controlled foreign corporation (or any other foreign 
corporation if such corporation so elects), the determination under 
paragraph (2) shall be based on the adjusted bases (as determined for 
purposes of computing earnings and profits) of its assets in lieu of 
their value. Such an election, once made, may be revoked only with the 
consent of the Secretary.''
            (2) Treatment of certain subpart f inclusions.--Subsection 
        (b) of section 1297 is amended by adding at the end thereof the 
        following new paragraph:
            ``(9) Treatment of certain subpart f inclusions.--Any 
        amount included in gross income under subparagraph (B) or (C) 
        of section 951(a)(1) shall be treated as a distribution 
        received with respect to the stock.''
            (3) Treatment of certain dealers in securities.--Subsection 
        (b) of section 1296 is amended by adding at the end thereof the 
        following new paragraph:
            ``(3) Treatment of certain dealers in securities.--
                    ``(A) In general.--In the case of any foreign 
                corporation which is a controlled foreign corporation 
                (as defined in section 957(a)), the term `passive 
                income' does not include any income derived in the 
                active conduct of a securities business by such 
                corporation if such corporation is registered as a 
                securities broker or dealer under section 15(a) of the 
                Securities Exchange Act of 1934 or is registered as a 
                Government securities broker or dealer under section 
                15C(a) of such Act. To the extent provided in 
                regulations, such term shall not include any income 
                derived in the active conduct of a securities business 
                by a controlled foreign corporation which is not so 
                registered.
                    ``(B) Application of look-thru rules.--For purposes 
                of paragraph (2)(C), rules similar to the rules of 
                subparagraph (A) of this paragraph shall apply in 
                determining whether any income of a related person 
                (whether or not a corporation) is passive income.
                    ``(C) Limitation.--The preceding provisions of this 
                paragraph shall only apply in the case of persons who 
                are United States shareholders (as defined in section 
                951(b)) in the controlled foreign corporation.''
            (4) Leasing and intangible asset rules.--Section 1297 is 
        amended by redesignating subsection (d) as subsection (f) and 
        by inserting after subsection (c) the following new 
        subsections:
    ``(d) Treatment of Certain Leased Property.--For purposes of this 
part:
            ``(1) In general.--Any tangible personal property with 
        respect to which a foreign corporation is the lessee under a 
        lease with a term of at least 12 months shall be treated as an 
        asset actually held by such corporation.
            ``(2) Determination of adjusted basis.--
                    ``(A) In general.--The adjusted basis of any asset 
                to which paragraph (1) applies shall be the unamortized 
                portion (as determined under regulations prescribed by 
                the Secretary) of the present value of the payments 
                under the lease for the use of such property.
                    ``(B) Present value.--For purposes of subparagraph 
                (A), the present value of payments described in 
                subparagraph (A) shall be determined in the manner 
                provided in regulations prescribed by the Secretary--
                            ``(i) as of the beginning of the lease 
                        term, and
                            ``(ii) except as provided in such 
                        regulations, by using a discount rate equal to 
                        the applicable Federal rate determined under 
                        section 1274(d)--
                                    ``(I) by substituting the lease 
                                term for the term of the debt 
                                instrument, and
                                    ``(II) without regard to paragraph 
                                (2) or (3) thereof.
            ``(3) Exceptions.--This subsection shall not apply in any 
        case where--
                    ``(A) the lessor is a related person (as defined in 
                section 954(d)(3)) with respect to the foreign 
                corporation, or
                    ``(B) a principal purpose of leasing the property 
                was to avoid the provisions of this section.
    ``(e)Special Rules For Certain Intangibles.--
            ``(1) Research expenditures.--The adjusted basis of the 
        total assets of a controlled foreign corporation shall be 
        increased by the research or experimentation expenditures 
        (within the meaning of section 174) paid or incurred by such 
        foreign corporation during the taxable year and the preceding 2 
        taxable years.
            ``(2) Certain licensed intangibles.--In the case of any 
        intangible property (as defined in section 936(h)(3)(B)) with 
        respect to which a controlled foreign corporation is a licensee 
        and which is used by such foreign corporation in the active 
        conduct of a trade or business, the adjusted basis of the total 
        assets of such foreign corporation shall be increased by an 
        amount equal to 300 percent of the payments made during the 
        taxable year for the use of such intangible property. For 
        purposes of the preceding sentence, payments to a foreign 
        person shall not be taken into account if such foreign person 
        is a related person (as defined in section 954(d)(3)) with 
        respect to the controlled foreign corporation.
            ``(3) Controlled foreign corporation.--For purposes of this 
        subsection, the term `controlled foreign corporation' has the 
        meaning given such term by section 957(a).''
    (e) Effective Date.--The amendments made by this section shall 
apply to taxable years of foreign corporations beginning after 
September 30, 1993, and to taxable years of United States shareholders 
in which or with which such taxable years of foreign corporations end.

SEC. 8232. MODIFICATION TO TAXATION OF INVESTMENT IN UNITED STATES 
              PROPERTY.

    (a) General Rule.--Section 956 (relating to investment of earnings 
in United States property) is amended--
            (1) by redesignating subsections (b) and (c) as subsections 
        (c) and (d), respectively, and
            (2) by striking subsection (a) and inserting the following:
    ``(a) General Rule.--In the case of any controlled foreign 
corporation, the amount determined under this section with respect to 
any United States shareholder for any taxable year is the lesser of--
            ``(1) the excess (if any) of--
                    ``(A) such shareholder's pro rata share of the 
                average of the amounts of United States property held 
                (directly or indirectly) by the controlled foreign 
                corporation as of the close of each quarter of such 
                taxable year, over
                    ``(B) the amount of earnings and profits described 
                in section 959(c)(1)(A) with respect to such 
                shareholder, or
            ``(2) such shareholder's pro rata share of the applicable 
        earnings of such controlled foreign corporation.
The amount taken into account under paragraph (1) with respect to any 
property shall be its adjusted basis as determined for purposes of 
computing earnings and profits, reduced by any liability to which the 
property is subject.
    ``(b) Adjustments for Certain Distributions; Other Special Rules.--
            ``(1) Applicable earnings.--For purposes of this section, 
        the term `applicable earnings' has the meaning given to such 
        term by section 956A(b), except that the provisions of such 
        section disregarding earnings and profits accumulated in 
        taxable years beginning before October 1, 1993 shall be 
        disregarded.
            ``(2) Special rule where corporation ceases to be 
        controlled foreign corporation.--Rules similar to the rules of 
        section 956A(e) shall apply for purposes of this section.''
    (b) Conforming Amendments.--
            (1) Subparagraph (B) of section 951(a)(1) is amended to 
        read as follows:
                    ``(B) the amount determined under section 956 with 
                respect to such shareholder for such year (but only to 
                the extent not excluded from gross income under section 
                959(a)(2)); and''
            (2) Subsection (a) of section 951 is amended by striking 
        paragraph (4).
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years of controlled foreign corporations beginning 
after September 30, 1993, and to taxable years of United States 
shareholders in which or with which such taxable years of controlled 
foreign corporations end.

SEC. 8233. OTHER MODIFICATIONS TO SUBPART F.

    (a) Same Country Exception Not To Apply to Certain Dividends.--
            (1) In general.--Paragraph (3) of section 954(c) (relating 
        to certain income received from related persons) is amended by 
        adding at the end thereof the following new subparagraph:
                    ``(C) Exception for certain dividends.--
                Subparagraph (A)(i) shall not apply to any dividend 
                with respect to any stock which is attributable to 
                earnings and profits of the distributing corporation 
                accumulated during any period during which the person 
                receiving such dividend did not hold such stock.''
            (2) Effective date.--The amendment made by paragraph (1) 
        shall apply to taxable years of controlled foreign corporations 
        beginning after September 30, 1993, and to taxable years of 
        United States shareholders in which or with which such taxable 
        years of controlled foreign corporations end.
    (b) Simplification of Section 960(b).--
            (1) In general.--Subsection (b) of section 960 is amended--
                    (A) by redesignating paragraphs (3) and (4) as 
                paragraphs (4) and (5), respectively, and
                    (B) by striking paragraphs (1) and (2) and 
                inserting the following new paragraphs:
            ``(1) Increase in section 904 limitation.--In the case of 
        any taxpayer who--
                    ``(A) either (i) chose to have the benefits of 
                subpart A of this part for a taxable year beginning 
                after September 30, 1993, in which he was required 
                under section 951(a) to include any amount in his gross 
                income, or (ii) did not pay or accrue for such taxable 
                year any income, war profits, or excess profits taxes 
                to any foreign country or to any possession of the 
                United States,
                    ``(B) chooses to have the benefits of subpart A of 
                this part for any taxable year in which he receives 1 
                or more distributions or amounts which are excludable 
                from gross income under section 959(a) and which are 
                attributable to amounts included in his gross income 
                for taxable years referred to in subparagraph (A), and
                    ``(C) for the taxable year in which such 
                distributions or amounts are received, pays, or is 
                deemed to have paid, or accrues income, war profits, or 
                excess profits taxes to a foreign country or to any 
                possession of the United States with respect to such 
                distributions or amounts,
        the limitation under section 904 for the taxable year in which 
        such distributions or amounts are received shall be increased 
        by the lesser of the amount of such taxes paid, or deemed paid, 
        or accrued with respect to such distributions or amounts or the 
        amount in the excess limitation account as of the beginning of 
        such taxable year.
            ``(2) Excess limitation account.--
                    ``(A) Establishment of account.--Each taxpayer 
                meeting the requirements of paragraph (1)(A) shall 
                establish an excess limitation account. The opening 
                balance of such account shall be zero.
                    ``(B) Increases in account.--For each taxable year 
                beginning after September 30, 1993, the taxpayer shall 
                increase the amount in the excess limitation account by 
                the excess (if any) of--
                            ``(i) the amount by which the limitation 
                        under section 904(a) for such taxable year was 
                        increased by reason of the total amount of the 
                        inclusions in gross income under section 951(a) 
                        for such taxable year, over
                            ``(ii) the amount of any income, war 
                        profits, and excess profits taxes paid, or 
                        deemed paid, or accrued to any foreign country 
                        or possession of the United States which were 
                        allowable as a credit under section 901 for 
                        such taxable year and which would not have been 
                        allowable but for the inclusions in gross 
                        income described in clause (i).
                Proper reductions in the amount added to the account 
                under the preceding sentence for any taxable year shall 
                be made for any increase in the credit allowable under 
                section 901 for such taxable year by reason of a 
                carryback if such increase would not have been 
                allowable but for the inclusions in gross income 
                described in clause (i).
                    ``(C) Decreases in account.--For each taxable year 
                beginning after September 30, 1993, for which the 
                limitation under section 904 was increased under 
                paragraph (1), the taxpayer shall reduce the amount in 
                the excess limitation account by the amount of such 
                increase.
            ``(3) Distributions of income previously taxed in years 
        beginning before october 1, 1993.--If the taxpayer receives a 
        distribution or amount in a taxable year beginning after 
        September 30, 1993, which is excluded from gross income under 
        section 959(a) and is attributable to any amount included in 
        gross income under section 951(a) for a taxable year beginning 
        before October 1, 1993, the limitation under section 904 for 
        the taxable year in which such amount or distribution is 
        received shall be increased by the amount determined under this 
        subsection as in effect on the day before the date of the 
        enactment of the Revenue Reconcilation Act of 1993.''
            (2) Effective date.--The amendment made by paragraph (1) 
        shall apply to taxable years beginning after September 30, 
        1993.

    Subpart B--Allocation of Research and Experimental Expenditures

SEC. 8234. ALLOCATION OF RESEARCH AND EXPERIMENTAL EXPENDITURES.

    (a) General Rule.--Subparagraph (B) of section 864(f)(1) (relating 
to allocation of research and experimental expenditures) is amended by 
striking ``64 percent'' each place it appears and inserting ``50 
percent''.
    (b) Conforming Amendments.--
            (1) Subsection (f) of section 864 is amended by striking 
        paragraph (5) and inserting the following new paragraphs:
            ``(5) Regulations.--The Secretary shall prescribe such 
        regulations as may be appropriate to carry out the purposes of 
        this subsection, including regulations relating to the 
        determination of whether any expenses are attributable to 
        activities conducted in the United States or outside the United 
        States and regulations providing such adjustments to the 
        provisions of this subsection as may be appropriate in the case 
        of cost-sharing arrangements and contract research.
            ``(6) Applicability.--This subsection shall apply to the 
        taxpayer's first taxable year (beginning on or before August 1, 
        1994) following the taxpayer's last taxable year to which 
        Revenue Procedure 92-56 applies or would apply if the taxpayer 
        elected the benefits of such Revenue Procedure.''
            (2) Subparagraph (D) of section 864(f)(4) is amended by 
        striking ``subparagraph (C)'' and inserting ``subparagraph (B) 
        or (C)''.

                      Subpart C--Other Provisions

SEC. 8235. REPEAL OF CERTAIN EXCEPTIONS FOR WORKING CAPITAL.

    (a) Provisions Relating to Oil and Gas Income.--
            (1) Amendments to section 907.--
                    (A) Paragraph (1) of section 907(c) is amended by 
                adding at the end thereof the following new flush 
                sentence:
``Such term does not include any dividend or interest income which is 
passive income (as defined in section 904(d)(2)(A)).''.
                    (B) Paragraph (2) of section 907(c) is amended by 
                adding at the end thereof the following new flush 
                sentence:
``Such term does not include any dividend or interest income which is 
passive income (as defined in section 904(d)(2)(A)).''.
            (2) Separate application of foreign tax credit.--Clause 
        (iii) of section 904(d)(2)(A) is amended by inserting ``and'' 
        at the end of subclause (II), by striking ``, and'' at the end 
        of subclause (III) and inserting a period, and by striking 
        subclause (IV).
            (3) Treatment under subpart f.--
                    (A) Paragraph (1) of section 954(g) is amended by 
                adding at the end thereof the following new flush 
                sentence:
Such term shall not include any foreign personal holding company income 
(as defined in subsection (c)).''.
                    (B) Paragraph (8) of section 954(b) is amended by 
                striking ``(1),''.
    (b) Treatment of Shipping Income.--Subsection (f) of section 954 is 
amended by adding at the end thereof the following new sentence: ``Such 
term shall not include any dividend or interest income which is foreign 
personal holding company income (as defined in subsection (c)).''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1992.

SEC. 8236. MODIFICATIONS OF ACCURACY-RELATED PENALTY.

    (a) Threshold Requirement.--Clause (ii) of section 6662(e)(1)(B) 
(relating to substantial valuation misstatement under chapter 1) is 
amended to read as follows:
                            ``(ii) the net section 482 transfer price 
                        adjustment for the taxable year exceeds the 
                        lesser of $5,000,000 or 10 percent of the 
                        taxpayer's gross receipts.''
    (b) Certain Adjustments Excluded in Determining Threshold.--
Subparagraph (B) of section 6662(e)(3) is amended to read as follows:
                    ``(B) Certain adjustments excluded in determining 
                threshold.--For purposes of determining whether the 
                threshold requirements of paragraph (1)(B)(ii) are met, 
                the following shall be excluded:
                            ``(i) Any portion of the net increase in 
                        taxable income referred to in subparagraph (A) 
                        which is attributable to any redetermination of 
                        a price if--
                                    ``(I) it is established that the 
                                taxpayer determined such price in 
                                accordance with a specific pricing 
                                method set forth in the regulations 
                                prescribed under section 482 and that 
                                the taxpayer's use of such method was 
                                reasonable,
                                    ``(II) the taxpayer has 
                                documentation (which was in existence 
                                as of the time of filing the return) 
                                which sets forth the determination of 
                                such price in accordance with such a 
                                method and which establishes that the 
                                use of such method was reasonable, and
                                    ``(III) the taxpayer provides such 
                                documentation to the Secretary within 
                                30 days of a request for such 
                                documentation.
                            ``(ii) Any portion of the net increase in 
                        taxable income referred to in subparagraph (A) 
                        which is attributable to a redetermination of 
                        price where such price was not determined in 
                        accordance with such a specific pricing method 
                        if--
                                    ``(I) the taxpayer establishes that 
                                none of such pricing methods was likely 
                                to result in a price that would clearly 
                                reflect income, the taxpayer used 
                                another pricing method to determine 
                                such price, and such other pricing 
                                method was likely to result in a price 
                                that would clearly reflect income,
                                    ``(II) the taxpayer has 
                                documentation (which was in existence 
                                as of the time of filing the return) 
                                which sets forth the determination of 
                                such price in accordance with such 
                                other method and which establishes that 
                                the requirements of subclause (I) were 
                                satisfied, and
                                    ``(III) the taxpayer provides such 
                                documentation to the Secretary within 
                                30 days of request for such 
                                documentation.
                            ``(iii) Any portion of such net increase 
                        which is attributable to any transaction solely 
                        between foreign corporations unless, in the 
                        case of any such corporations, the treatment of 
                        such transaction affects the determination of 
                        income from sources within the United States or 
                        taxable income effectively connected with the 
                        conduct of a trade or business within the 
                        United States.''
    (c) Coordination With Reasonable Cause Exception.--Paragraph (3) of 
section 6662(e) is amended by adding at the end thereof the following 
new subparagraph:
                    ``(D) Coordination with reasonable cause 
                exception.--For purposes of section 6664(c) the 
                taxpayer shall not be treated as having reasonable 
                cause for any portion of an underpayment attributable 
                to a net section 482 transfer price adjustment unless 
                such taxpayer meets the requirements of clause (i), 
                (ii), or (iii) of subparagraph (B) with respect to such 
                portion.''
    (d) Conforming Amendment.--Clause (iii) of section 6662(h)(2)(A) is 
amended to read as follows:
                            ``(iii) in paragraph (1)(B)(ii)--
                                    ``(I) `$20,000,000' for 
                                `$5,000,000', and
                                    ``(II) `20 percent' for `10 
                                percent'.''
    (e) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1993.

SEC. 8237. DENIAL OF PORTFOLIO INTEREST EXEMPTION FOR CONTINGENT 
              INTEREST.

    (a) General Rule.--
            (1) Subsection (h) of section 871 (relating to repeal of 
        tax on interest of nonresident alien individuals received from 
        certain portfolio debt investments) is amended by redesignating 
        paragraphs (4), (5), and (6) as paragraphs (5), (6), and (7), 
        respectively, and by inserting after paragraph (3) the 
        following new paragraph:
            ``(4) Portfolio interest not to include certain contingent 
        interest.--For purposes of this subsection--
                    ``(A) In general.--Except as otherwise provided in 
                this paragraph, the term `portfolio interest' shall not 
                include--
                            ``(i) any interest if the amount of such 
                        interest is determined by reference to--
                                    ``(I) any receipts, sales or other 
                                cash flow of the debtor or a related 
                                person,
                                    ``(II) any income or profits of the 
                                debtor or a related person,
                                    ``(III) any change in value of any 
                                property of the debtor or a related 
                                person, or
                                    ``(IV) any dividend, partnership 
                                distributions, or similar payments made 
                                by the debtor or a related person, or
                            ``(ii) any other type of contingent 
                        interest that is identified by the Secretary by 
                        regulation, where a denial of the portfolio 
                        interest exemption is necessary or appropriate 
                        to prevent avoidance of Federal income tax.
                    ``(B) Related person.--The term `related person' 
                means any person who is related to the debtor within 
                the meaning of section 267(b) or 707(b)(1), or who is a 
                party to any arrangement undertaken for a purpose of 
                avoiding the application of this paragraph.
                    ``(C) Exceptions.--Subparagraph (A)(i) shall not 
                apply to--
                            ``(i) any amount of interest solely by 
                        reason of the fact that the timing of any 
                        interest or principal payment is subject to a 
                        contingency,
                            ``(ii) any amount of interest solely by 
                        reason of the fact that the interest is paid 
                        with respect to nonrecourse or limited recourse 
                        indebtedness,
                            ``(iii) any amount of interest all or 
                        substantially all of which is determined by 
                        reference to any other amount of interest not 
                        described in subparagraph (A) (or by reference 
                        to the principal amount of indebtedness on 
                        which such other interest is paid),
                            ``(iv) any amount of interest solely by 
                        reason of the fact that the debtor or a related 
                        person enters into a hedging transaction to 
                        reduce the risk of interest rate or currency 
                        fluctuations with respect to such interest,
                            ``(v) any amount of interest determined by 
                        reference to--
                                    ``(I) changes in the value of 
                                property (including stock) that is 
                                actively traded (within the meaning of 
                                section 1092(d)) other than property 
                                described in section 897(c)(1) or (g),
                                    ``(II) the yield on property 
                                described in subclause (I), other than 
                                a debt instrument that pays interest 
                                described in subparagraph (A), or stock 
                                or other property that represents a 
                                beneficial interest in the debtor or a 
                                related person, or
                                    ``(III) changes in any index of the 
                                value of property described in 
                                subclause (I) or of the yield on 
                                property described in subclause (II), 
                                and
                            ``(vi) any other type of interest 
                        identified by the Secretary by regulation.
                    ``(D) Exception for certain existing 
                indebtedness.--Subparagraph (A) shall not apply to any 
                interest paid or accrued with respect to any 
                indebtedness with a fixed term--
                            ``(i) which was issued on or before April 
                        7, 1993, or
                            ``(ii) which was issued after such date 
                        pursuant to a written binding contract in 
                        effect on such date and at all times thereafter 
                        before such indebtedness was issued.''
            (2) Subsection (c) of section 881 is amended by 
        redesignating paragraphs (4), (5), and (6) as paragraphs (5), 
        (6), and (7), respectively, and by inserting after paragraph 
        (3) the following new paragraph:
            ``(4) Portfolio interest not to include certain contingent 
        interest.--For purposes of this subsection, the term `portfolio 
        interest' shall not include any interest which is treated as 
        not being portfolio interest under the rules of section 
        871(h)(4).''
    (b) Conforming Amendments.--
            (1) Clause (ii) of section 871(h)(2)(B) is amended by 
        striking ``paragraph (4)'' and inserting ``paragraph (5)''.
            (2) Clause (ii) of section 881(c)(2)(B) is amended by 
        striking ``section 871(h)(4)'' and inserting ``section 
        871(h)(5)''.
            (3) Paragraph (6) of section 881(c) (as redesignated by 
        subsection (a)) is amended by striking ``section 871(h)(5)'' 
        each place it appears and inserting ``section 871(h)(6)''.
            (4) Paragraph (9) of section 1441(c) is amended by striking 
        ``section 871(h)(3)'' and inserting ``section 871(h)(3) or 
        (4)''.
            (5) Subsection (a) of section 1442 is amended--
                    (A) by striking ``871(h)(3)'' and inserting 
                ``871(h)(3) or (4)'', and
                    (B) by striking ``881(c)(3)'' and inserting 
                ``881(c)(3) or (4)''.
    (c) Effective Date.--The amendments made by this section shall 
apply to interest received after December 31, 1993.

SEC. 8238. REGULATIONS DEALING WITH CONDUIT ARRANGEMENTS.

    Section 7701 is amended by redesignating subsection (l) as 
subsection (m) and by inserting after subsection (k) the following new 
subsection:
    ``(l) Regulations Relating to Conduit Arrangements.--The Secretary 
may prescribe regulations recharacterizing any multiple-party financing 
transaction as a transaction directly among any 2 or more of such 
parties where the Secretary determines that such recharacterization is 
appropriate to prevent avoidance of any tax imposed by this title.''

SEC. 8239. TREATMENT OF EXPORT OF CERTAIN SOFTWOOD LOGS.

    (a) Foreign Sales Corporations.--Paragraph (2) of section 927(a) 
(relating to exclusion of certain property) is amended by striking 
``or'' at the end of subparagraph (C), by striking the period at the 
end of subparagraph (D) and inserting ``, or'', and by adding at the 
end the following:
                    ``(E) any unprocessed timber which is a softwood.
        For purposes of subparagraph (E), the term `unprocessed timber' 
        means any log, cant, or similar form of timber.''
    (b) Domestic International Sales Corporations.--Paragraph (2) of 
section 993(c) (relating to exclusion of certain property) is amended--
            (1) by striking ``or'' at the end of subparagraph (C), by 
        striking the period at the end of subparagraph (D) and 
        inserting ``, or'', and by adding after subparagraph (D) the 
        following new subparagraph:
                    ``(E) any unprocessed timber which is a 
                softwood.'', and
            (2) by adding at the end the following new sentence: ``For 
        purposes of subparagraph (E), the term `unprocessed timber' 
        means any log, cant, or similar form of timber.''
    (c) Source Rule.--Subsection (b) of section 865 (relating to source 
rules for personal property sales) is amended by adding at the end the 
following: ``Notwithstanding the preceding sentence, any income from 
the sale of any unprocessed timber which is a softwood and was cut from 
an area in the United States shall be sourced in the United States and 
the rules of sections 862(a)(6) and 863(b) shall not apply to any such 
income. For purposes of the preceding sentence, the term `unprocessed 
timber' means any log, cant, or similar form of timber.''
    (d) Elimination of Deferral.--Subsection (d) of section 954 is 
amended by adding at the end the following new paragraph:
            ``(4) Special rule for certain timber products.--For 
        purposes of subsection (a)(2), the term `foreign base company 
        sales income' includes any income (whether in the form of 
        profits, commissions, fees, or otherwise) derived in connection 
        with--
                    ``(A) the sale of any unprocessed timber referred 
                to in section 865(b), or
                    ``(B) the milling of any such timber outside the 
                United States.
        Subpart G shall not apply to any amount treated as subpart F 
        income by reason of this paragraph.''
    (e) Effective Date.--The amendments made by this section shall 
apply to sales, exchanges, or other dispositions after the date of the 
enactment of this Act.

                PART IV--TRANSPORTATION FUELS PROVISIONS

                  Subpart A--Transportation Fuels Tax

SEC. 8241. TRANSPORTATION FUELS TAX.

    (a) Gasoline.--
            (1) In general.--Clause (iii) of section 4081(a)(2)(B) 
        (relating to rates of tax) is amended to read as follows:
                    ``(iii) the deficit reduction rate is 6.8 cents a 
                gallon (4.3 cents a gallon on and after October 1, 
                1995).''
            (2) Deficit reduction rate made permanent.--Section 4081(d) 
        (relating to termination) is amended by striking paragraph (3).
    (b) Diesel Fuel and Aviation Fuel.--
            (1) Diesel fuel.--
                    (A) In general.--Paragraph (4) of section 4091(b) 
                (relating to rate of tax) is amended by striking ``2.5 
                cents per gallon'' and inserting ``6.8 cents per gallon 
                (4.3 cents per gallon on and after October 1, 1995)''.
                    (B) Diesel fuel deficit reduction rate made 
                permanent.--Section 4091(b)(6) (relating to 
                termination) is amended by striking subparagraph (D).
            (2) Aviation fuel.--
                    (A) Gasoline in noncommercial aviation.--Paragraph 
                (3) of section 4041(c) is amended to read as follows:
            ``(3) Rate of tax.--The rate of tax imposed by paragraph 
        (2) on any gasoline is 1 cent.''
            (3) Conforming amendments.--
                    (A) Subparagraphs (A) and (B) of section 4093(c)(2) 
                are amended to read as follows:
                    ``(A) No refund of certain taxes on fuel used in 
                diesel-powered trains.--In the case of fuel sold for 
                use in a diesel-powered train, paragraph (1) shall not 
                apply to so much of the tax imposed by section 4091 as 
                is attributable to the Leaking Underground Storage Tank 
                Trust Fund financing rate and the diesel fuel deficit 
                reduction rate imposed under such section. The 
                preceding sentence shall not apply in the case of fuel 
                sold for exclusive use by a State or any political 
                subdivision thereof.
                    ``(B) No refund of certain taxes on fuel used in 
                aircraft.--In the case of fuel sold for use in any 
                aircraft (except supplies for vessels or aircraft 
                within the meaning of section 4221(d)(3)), paragraph 
                (1) also shall not apply to so much of the tax imposed 
                by section 4091 as is attributable to the Leaking 
                Underground Storage Tank Trust Fund financing rate and 
                the aviation fuel deficit reduction rate imposed by 
                such section. The preceding sentence shall not apply in 
                the case of fuel sold for exclusive use by a State or 
                any political subdivision thereof.''
                    (B) Section 4093(d) is amended by inserting ``and 
                the aviation fuel deficit reduction rate'' after 
                ``rate''.
    (c) Special Fuels.--Section 4041(m)(1)(A) is amended by striking 
``1.25 cents'' and inserting ``5.55 cents (4.3 cents on and after 
October 1, 1995)''.
    (d) Fuel Used in Commercial Transportation on Inland Waterways.--
            (1) In general.--Section 4042(b)(1) (relating to amount of 
        tax) is amended--
                    (A) by striking ``and'' at the end of subparagraph 
                (A),
                    (B) by striking the period at the end of 
                subparagraph (B) and inserting ``, and'', and
                    (C) by adding at the end thereof the following new 
                subparagraph:
                    ``(C) the deficit reduction rate.''
            (2) Rate.--Section 4042(b)(2) (relating to rates) is 
        amended by adding at the end the following new subparagraph:
                    ``(C) The deficit reduction rate is 4.3 cents per 
                gallon.''
    (e) Conforming Amendments.--
            (1) Section 6421(f) is amended--
                    (A) by striking subparagraph (B) of paragraph (2) 
                and inserting the following:
                    ``(B) in aviation which is not noncommercial 
                aviation (as so defined) with respect to the tax 
                imposed by section 4081 at the Leaking Underground 
                Storage Tank Trust Fund financing rate and at the 
                deficit reduction rate to the extent such deficit 
                reduction rate does not exceed 4.3 cents per gallon.'', 
                and
                    (B) by inserting ``and at the deficit reduction 
                rate to the extent such deficit reduction rate does not 
                exceed 4.3 cents per gallon'' after ``financing rate'' 
                in paragraph (3), and
                    (C) by inserting ``and deficit reduction tax'' 
                after ``tax'' in the heading for paragraph (3).
            (2) Section 6427(l) is amended by striking paragraphs (3) 
        and (4) and inserting the following new paragraphs:
            ``(3) No refund of certain taxes on fuel used in diesel-
        powered trains.--In the case of fuel used in a diesel-powered 
        train, paragraph (1) shall not apply to so much of the tax 
        imposed by section 4091 as is attributable to the Leaking 
        Underground Storage Tank Trust Fund financing rate and the 
        diesel fuel deficit reduction rate imposed by such section. The 
        preceding sentence shall not apply in the case of fuel sold for 
        exclusive use by a State or any political subdivision thereof.
            ``(4) No refund of certain taxes on fuel used in 
        aircraft.--In the case of fuel used in any aircraft (except 
        supplies for vessels or aircraft within the meaning of section 
        4221(d)(3)), paragraph (1) also shall not apply to so much of 
        the tax imposed by section 4091 as is attributable to the 
        Leaking Underground Storage Tank Trust Fund financing rate and 
        the aviation fuel deficit reduction rate imposed by such 
        section. The preceding sentence shall not apply in the case of 
        fuel sold for exclusive use by a State or any political 
        subdivision thereof.''
            (3) Section 9502(b)(3) is amended by inserting ``and the 
        deficit reduction rate'' after ``financing rate''.
            (4) Section 9503(b)(4)(B) is amended by inserting ``and the 
        deficit reduction rates under such sections to the extent such 
        rates do not exceed 4.3 cents per gallon'' after ``such 
        sections''.
            (5) Section 9503(c)(4)(D) is amended by inserting ``and the 
        deficit reduction rates under such sections to the extent such 
        rates do not exceed 4.3 cents per gallon'' after ``such 
        sections''.
            (6) Section 9503(c)(5)(B) is amended by inserting ``and the 
        deficit reduction rate under such section to the extent such 
        rate does not exceed 4.3 cents per gallon'' after ``such 
        section''.
            (7) Section 9503(c)(6)(D) is amended by inserting ``and the 
        deficit reduction rate to the extent such rate does not exceed 
        4.3 cents per gallon'' after ``financing rate''.
            (8) Section 9506(b) is amended by inserting ``and the 
        deficit reduction rate'' after ``financing rate''.
    (f) Effective Date.--The amendments made by this section shall take 
effect on October 1, 1993.
    (g) Floor Stocks Taxes.--
            (1) Imposition of tax.--In the case of gasoline, diesel 
        fuel, and aviation fuel on which tax was imposed under section 
        4081 or 4091 of the Internal Revenue Code of 1986 before 
        October 1, 1993, and which is held on such date by any person, 
        there is hereby imposed a floor stocks tax of 4.3 cents per 
        gallon on such gasoline, diesel fuel, and aviation fuel.
            (2) Liability for tax and method of payment.--
                    (A) Liability for tax.--A person holding gasoline, 
                diesel fuel, or aviation fuel on October 1, 1993, to 
                which the tax imposed by paragraph (1) applies shall be 
                liable for such tax.
                    (B) Method of payment.--The tax imposed by 
                paragraph (1) shall be paid in such manner as the 
                Secretary shall prescribe.
                    (C) Time for payment.--The tax imposed by paragraph 
                (1) shall be paid on or before November 30, 1993.
            (3) Definitions.--For purposes of this subsection--
                    (A) Held by a person.--Gasoline, diesel fuel, and 
                aviation fuel shall be considered as ``held by a 
                person'' if title thereto has passed to such person 
                (whether or not delivery to the person has been made).
                    (B) Gasoline.--The term ``gasoline'' has the 
                meaning given such term by section 4082 of such Code.
                    (C) Diesel fuel.--The term ``diesel fuel'' has the 
                meaning given such term by section 4092 of such Code.
                    (D) Aviation fuel.--The term ``aviation fuel'' has 
                the meaning given such term by section 4092 of such 
                Code.
                    (E) Secretary.--The term ``Secretary'' means the 
                Secretary of the Treasury or his delegate.
            (4) Exception for exempt uses.--The tax imposed by 
        paragraph (1) shall not apply to gasoline, diesel fuel, or 
        aviation fuel held by any person exclusively for any use to the 
        extent a credit or refund of the tax imposed by section 4081 or 
        4091 of such Code, as the case may be, is allowable for such 
        use.
            (5) Exception for fuel held in vehicle tax.--No tax shall 
        be imposed by paragraph (1) on gasoline or diesel fuel held in 
        the tank of a motor vehicle or motorboat.
            (6) Exception for certain amounts of fuel.--
                    (A) In general.--No tax shall be imposed by 
                paragraph (1)--
                            (i) on gasoline held on October 1, 1993, by 
                        any person if the aggregate amount of gasoline 
                        held by such person on such date does not 
                        exceed 4,000 gallons, and
                            (ii) on diesel fuel or aviation fuel held 
                        on October 1, 1993, by any person if the 
                        aggregate amount of diesel fuel or aviation 
                        fuel held by such person on such date does not 
                        exceed 2,000 gallons.
                The preceding sentence shall apply only if such person 
                submits to the Secretary (at the time and in the manner 
                required by the Secretary) such information as the 
                Secretary shall require for purposes of this paragraph.
                    (B) Exempt fuel.--For purposes of subparagraph (A), 
                there shall not be taken into account fuel held by any 
                person which is exempt from the tax imposed by 
                paragraph (1) by reason of paragraph (4) or (5).
                    (C) Controlled groups.--For purposes of this 
                paragraph--
                            (i) Corporations.--
                                    (I) In general.--All persons 
                                treated as a controlled group shall be 
                                treated as 1 person.
                                    (II) Controlled group.--The term 
                                ``controlled group'' has the meaning 
                                given to such term by subsection (a) of 
                                section 1563 of such Code; except that 
                                for such purposes the phrase ``more 
                                than 50 percent'' shall be substituted 
                                for the phrase ``at least 80 percent'' 
                                each place it appears in such 
                                subsection.
                            (ii) Nonincorporated persons under common 
                        control.--Under regulations prescribed by the 
                        Secretary, principles similar to the principles 
                        of clause (i) shall apply to a group of persons 
                        under common control where 1 or more of such 
                        persons is not a corporation.
            (7) Other law applicable.--All provisions of law, including 
        penalties, applicable with respect to the taxes imposed by 
        section 4081 of such Code in the case of gasoline and section 
        4091 of such Code in the case of diesel fuel shall, insofar as 
        applicable and not inconsistent with the provisions of this 
        subsection, apply with respect to the floor stock taxes imposed 
        by paragraph (1) to the same extent as if such taxes were 
        imposed by such section 4081 or 4091.

             Subpart B--Modifications to Tax on Diesel Fuel

SEC. 8242. MODIFICATIONS TO TAX ON DIESEL FUEL.

    (a) In General.--Subparts A and B of part III of subchapter A of 
chapter 32 (relating to manufacturers excise taxes), as amended by 
subpart A, are amended to read as follows:

                 ``Subpart A--Gasoline and Diesel Fuel

                              ``Sec. 4081. Imposition of tax.
                              ``Sec. 4082. Exemptions for diesel fuel.
                              ``Sec. 4083. Definitions and special 
                                        rule.
                              ``Sec. 4084. Cross references.

``SEC. 4081. IMPOSITION OF TAX.

    ``(a) Tax Imposed.--
            ``(1) Tax on removal, entry, or sale.--
                    ``(A) In general.--There is hereby imposed a tax at 
                the rate specified in paragraph (2) on--
                            ``(i) the removal of a taxable fuel from 
                        any refinery,
                            ``(ii) the removal of a taxable fuel from 
                        any terminal,
                            ``(iii) the entry into the United States of 
                        any taxable fuel for consumption, use, or 
                        warehousing, and
                            ``(iv) the sale of a taxable fuel to any 
                        person who is not registered under section 4101 
                        unless there was a prior taxable removal or 
                        entry of such fuel under clause (i), (ii), or 
                        (iii).
                    ``(B) Exemption for bulk transfers to registered 
                terminals or refineries.--The tax imposed by this 
                paragraph shall not apply to any removal or entry of a 
                taxable fuel transferred in bulk to a terminal or 
                refinery if the person removing or entering the taxable 
                fuel and the operator of such terminal or refinery are 
                registered under section 4101.
            ``(2) Rates of tax.--
                    ``(A) In general.--The rate of the tax imposed by 
                this section is the sum of--
                            ``(i) the Highway Trust Fund financing 
                        rate,
                            ``(ii) the Leaking Underground Storage Tank 
                        Trust Fund financing rate, and
                            ``(iii) the deficit reduction rate.
                    ``(B) Rates.--For purposes of subparagraph (A)--
                            ``(i) the Highway Trust Fund financing rate 
                        is--
                                    ``(I) 11.5 cents per gallon in the 
                                case of gasoline, and
                                    ``(II) 17.5 cents per gallon in the 
                                case of diesel fuel,
                            ``(ii) the Leaking Underground Storage Tank 
                        Trust Fund financing rate is 0.1 cent per 
                        gallon, and
                            ``(iii) the deficit reduction rate is 6.8 
                        cents per gallon (4.3 cents per gallon on and 
                        after October 1, 1995).
    ``(b) Treatment of Removal or Subsequent Sale by Blender.--
            ``(1) In general.--There is hereby imposed a tax at the 
        rate specified in subsection (a) on taxable fuel removed or 
        sold by the blender thereof.
            ``(2) Credit for tax previously paid.--If--
                    ``(A) tax is imposed on the removal or sale of a 
                taxable fuel by reason of paragraph (1), and
                    ``(B) the blender establishes the amount of the tax 
                paid with respect to such fuel by reason of subsection 
                (a),
        the amount of the tax so paid shall be allowed as a credit 
        against the tax imposed by reason of paragraph (1).
    ``(c) Taxable Fuels Mixed With Alcohol at Refinery, Etc.--
            ``(1) Reduced rates.--
                    ``(A) In general.--Under regulations prescribed by 
                the Secretary, subsection (a) shall be applied by 
                substituting rates which are the applicable fraction of 
                the otherwise applicable rates in the case of the 
                removal or entry of any taxable fuel for use in 
                producing at the time of such removal or entry a 
                qualified alcohol mixture. Subject to such terms and 
                conditions as the Secretary may prescribe (including 
                the application of section 4101), the treatment under 
                the preceding sentence also shall apply to use in 
                producing such a mixture after the time of such removal 
                or entry.
                    ``(B) Applicable fraction.--For purposes of 
                subparagraph (A), the applicable fraction is--
                            ``(i) in the case of a qualified alcohol 
                        mixture which contains gasoline, the fraction 
                        the numerator of which is 10 and the 
                        denominator of which is--
                                    ``(I) 9 in the case of 10 percent 
                                gasohol,
                                    ``(II) 9.23 in the case of 7.7 
                                percent gasohol, and
                                    ``(III) 9.43 in the case of 5.7 
                                percent gasohol, and
                            ``(ii) in the case of a qualified alcohol 
                        mixture which does not contain gasoline, \10/
                        9\.
            ``(2) Later separation of fuel from qualified alcohol 
        mixture.--If any person separates the taxable fuel from a 
        qualified alcohol mixture on which tax was imposed under 
        subsection (a) at the otherwise applicable Highway Trust Fund 
        financing rate (or its equivalent) by reason of this subsection 
        (or with respect to which a credit or payment was allowed or 
        made by reason of section 6427(f)(1)), such person shall be 
        treated as the refiner of such taxable fuel. The amount of tax 
        imposed on any removal of such fuel by such person shall be 
        reduced by the amount of tax imposed (and not credited or 
        refunded) on any prior removal or entry of such fuel.
            ``(3) Alcohol; qualified alcohol mixture.--For purposes of 
        this subsection--
                    ``(A) Alcohol.--The term `alcohol' includes 
                methanol and ethanol but does not include alcohol 
                produced from petroleum, natural gas, or coal 
                (including peat). Such term does not include alcohol 
                with a proof of less than 190 (determined without 
                regard to any added denaturants).
                    ``(B) Qualified alcohol mixture.--The term 
                `qualified alcohol mixture' means--
                            ``(i) any mixture of gasoline with alcohol 
                        if at least 5.7 percent of such mixture is 
                        alcohol, and
                            ``(ii) any mixture of diesel fuel with 
                        alcohol if at least 10 percent of such mixture 
                        is alcohol.
            ``(4) Otherwise applicable rates for gasoline mixtures.--
        For purposes of this subsection--
                    ``(A) In general.--In the case of the Highway Trust 
                Fund financing rate, the otherwise applicable rate for 
                gasoline in a qualified alcohol mixture is--
                            ``(i) 6.1 cents a gallon for 10 percent 
                        gasohol,
                            ``(ii) 7.342 cents a gallon for 7.7 percent 
                        gasohol, and
                            ``(iii) 8.422 cents a gallon for 5.7 
                        percent gasohol.
                In the case of a mixture none of the alcohol in which 
                consists of ethanol, clauses (i), (ii), and (iii) shall 
                be applied by substituting `5.5 cents' for `6.1 cents', 
                `6.88 cents' for `7.342 cents', and `8.08 cents' for 
                `8.422 cents'.
                    ``(B) 10 percent gasohol.--The term `10 percent 
                gasohol' means any mixture of gasoline with alcohol if 
                at least 10 percent of such mixture is alcohol.
                    ``(C) 7.7 percent gasohol.--The term `7.7 percent 
                gasohol' means any mixture of gasoline with alcohol if 
                at least 7.7 percent, but not 10 percent or more, of 
                such mixture is alcohol.
                    ``(D) 5.7 percent gasohol.--The term `5.7 percent 
                gasohol' means any mixture of gasoline with alcohol if 
                at least 5.7 percent, but not 7.7 percent or more, of 
                such mixture is alcohol.
            ``(5) Otherwise applicable rates for diesel fuel 
        mixtures.--For purposes of this subsection, in the case of the 
        Highway Trust Fund financing rate, the otherwise applicable 
        rate for diesel fuel in a qualified alcohol mixture is 12.1 
        cents per gallon (11.5 cents per gallon in the case of a 
        qualified alcohol mixture none of the alcohol in which consists 
        of ethanol).
            ``(6) Termination.--Paragraph (1) shall not apply to any 
        removal or sale after September 30, 2000.
    ``(d) Termination.--
            ``(1) Highway trust fund financing rate.--On and after 
        October 1, 1999, the Highway Trust Fund financing rate under 
        subsection (a)(2) shall not apply.
            ``(2) Leaking underground storage tank trust fund financing 
        rate.--The Leaking Underground Storage Tank Trust Fund 
        financing rate under subsection (a)(2) shall not apply after 
        December 31, 1995.
    ``(e) Refunds in Certain Cases.--Under regulations prescribed by 
the Secretary, if any person who paid the tax imposed by this section 
with respect to any taxable fuel establishes to the satisfaction of the 
Secretary that a prior tax was paid (and not credited or refunded) with 
respect to such taxable fuel, then an amount equal to the tax paid by 
such person shall be allowed as a refund (without interest) to such 
person in the same manner as if it were an overpayment of tax imposed 
by this section.

``SEC. 4082. EXEMPTIONS FOR DIESEL FUEL.

    ``(a) In General.--Except as provided in subsection (d), the tax 
imposed by section 4081 shall not apply to diesel fuel--
            ``(1) which the Secretary determines is destined for a 
        nontaxable use, and
            ``(2) which is indelibly dyed in accordance with 
        regulations which the Secretary shall prescribe.
Such regulations shall allow an individual choice of dye color approved 
by the Secretary or chosen from any list of approved dye colors that 
the Secretary may publish.
    ``(b) Nontaxable Use.--For purposes of this section, the term 
`nontaxable use' means--
            ``(1) any use which is exempt from the tax imposed by 
        section 4041(a)(1) other than by reason of the imposition of 
        tax on any sale thereof,
            ``(2) any use in a train, and
            ``(3) any use described in section 6427(b)(1).
    ``(c) Regulations.--The Secretary shall prescribe such regulations 
as may be necessary to carry out this section, including regulations 
requiring the conspicuous labeling of retail diesel fuel pumps and 
other delivery facilities to assure that persons are aware of which 
fuel is available only for nontaxable uses.
    ``(d) Cross Reference.--

                                ``For tax on train, motorboat, and 
certain bus uses of fuel purchased tax-free, see section 4041(a)(1).

``SEC. 4083. DEFINITIONS AND SPECIAL RULE.

    ``(a) Taxable Fuel.--For purposes of this subpart--
            ``(1) In general.--The term `taxable fuel' means--
                    ``(A) gasoline, and
                    ``(B) diesel fuel.
            ``(2) Gasoline.--The term `gasoline' includes, to the 
        extent prescribed in regulations--
                    ``(A) gasoline blend stocks, and
                    ``(B) products commonly used as additives in 
                gasoline.
        For purposes of subparagraph (A), the term `gasoline blend 
        stock' means any petroleum product component of gasoline.
            ``(3) Diesel fuel.--The term `diesel fuel' means any liquid 
        (other than gasoline) which is suitable for use as a fuel in a 
        diesel-powered highway vehicle, a diesel-powered train, or a 
        diesel-powered boat.
    ``(b) Certain Uses Defined as Removal.--If any person uses taxable 
fuel (other than in the production of gasoline, diesel fuel, or special 
fuels referred to in section 4041), such use shall for the purposes of 
this chapter be considered a removal.

``SEC. 4084. CROSS REFERENCES.

                                ``(1) For provisions to relieve farmers 
from excise tax in the case of gasoline used on the farm for farming 
purposes, see section 6420.
                                ``(2) For provisions to relieve 
purchasers of gasoline from excise tax in the case of gasoline used for 
certain nonhighway purposes, used by local transit systems, or sold for 
certain exempt purposes, see section 6421.
                                ``(3) For provisions to relieve 
purchasers from excise tax in the case of taxable fuel not used for 
taxable purposes, see section 6427.

                       ``Subpart B--Aviation Fuel

                              ``Sec. 4091. Imposition of tax.
                              ``Sec. 4092. Exemptions.
                              ``Sec. 4093. Definitions.

``SEC. 4091. IMPOSITION OF TAX.

    ``(a) Tax on Sale.--
            ``(1) In general.--There is hereby imposed a tax on the 
        sale of aviation fuel by the producer or the importer thereof 
        or by any producer of aviation fuel.
            ``(2) Use treated as sale.--For purposes of paragraph (1), 
        if any producer uses aviation fuel (other than for a nontaxable 
        use as defined in section 6427(l)(2)(B)) on which no tax has 
        been imposed under such paragraph, then such use shall be 
        considered a sale.
    ``(b) Rate of Tax.--
            ``(1) In general.--The rate of the tax imposed by 
        subsection (a) shall be the sum of--
                    ``(A) the Airport and Airway Trust Fund financing 
                rate,
                    ``(B) the Leaking Underground Storage Tank Trust 
                Fund financing rate.
            ``(2) Airport and airway trust fund financing rate.--For 
        purposes of paragraph (1), the Airport and Airway Trust Fund 
        financing rate is 17.5 cents per gallon.
            ``(3) Leaking underground storage tank trust fund financing 
        rate.--For purposes of paragraph (1), the Leaking Underground 
        Storage Tank Trust Fund financing rate is 0.1 cent per gallon.
            ``(4) Deficit reduction rate.--For purposes of paragraph 
        (1), the deficit reduction rate is 4.3 cents per gallon.
            ``(5) Termination of rates.--
                    ``(A) The Airport and Airway Trust Fund financing 
                rate shall not apply on and after January 1, 1996.
                    ``(B) The Leaking Underground Storage Tank Fund 
                financing rate shall not apply during any period during 
                which the Leaking Underground Storage Tank Trust Fund 
                financing rate under section 4081 does not apply.
    ``(c) Reduced Rate of Tax for Aviation Fuel in Alcohol Mixture, 
Etc.--
            ``(1) In general.--The Airport and Airway Trust Fund 
        financing rate shall be--
                    ``(A) 4.1 cents per gallon in the case of the sale 
                of any mixture of aviation fuel if--
                            ``(i) at least 10 percent of such mixture 
                        consists of alcohol (as defined in section 
                        4081(c)(3)), and
                            ``(ii) the aviation fuel in such mixture 
                        was not taxed under subparagraph (B), and
                    ``(B) 4.56 cents per gallon in the case of the sale 
                of aviation fuel for use (at the time of such sale) in 
                producing a mixture described in subparagraph (A).
        In the case of a sale described in subparagraph (B), the 
        Leaking Underground Storage Tank Trust Fund financing rate 
        shall be \1/9\ cent per gallon and the deficit reduction rate 
        shall be \10/9\ of such rate.
            ``(2) Later separation.--If any person separates the 
        aviation fuel from a mixture of the aviation fuel and alcohol 
        on which tax was imposed under subsection (a) at the Airport 
        and Airway Trust Fund financing rate equivalent to 4.1 cents 
        per gallon by reason of this subsection (or with respect to 
        which a credit or payment was allowed or made by reason of 
        section 6427(f)(1)), such person shall be treated as the 
        producer of such aviation fuel. The amount of tax imposed on 
        any sale of such aviation fuel by such person shall be reduced 
        by the amount of tax imposed (and not credited or refunded) on 
        any prior sale of such fuel.
            ``(3) Termination.--Paragraph (1) shall not apply to any 
        sale after September 30, 2000.
    ``(d) Lower Rates of Tax on Alcohol Mixtures Not Made From 
Ethanol.--In the case of a mixture described in subsection (c)(1)(A)(i) 
none of the alcohol in which is ethanol--
            ``(1) subsections (c)(1)(A) and (c)(2) shall each be 
        applied by substituting rates which are 0.6 cents less than the 
        rates contained therein, and
            ``(2) subsection (c)(1)(B) shall be applied by substituting 
        rates which are \10/9\ of the rates determined under paragraph 
        (1).

``SEC. 4092. EXEMPTIONS.

    ``(a) Nontaxable Uses.--The Airport and Airway Trust Fund financing 
rate under section 4091 shall not apply to aviation fuel sold by a 
producer or importer for use by the purchaser in a nontaxable use (as 
defined in section 6427(l)(2)(B)).
    ``(b) Sales to Producer.--Under regulations prescribed by the 
Secretary, the tax imposed by section 4091 shall not apply to aviation 
fuel sold to a producer of such fuel.
    ``(c) Supplies for Vessels and Aircraft.--The Leaking Underground 
Storage Tank Trust Fund financing rate and the deficit reduction rate 
under section 4091 shall not apply to aviation fuel sold for use or 
used as supplies for vessels or aircraft (within the meaning of section 
4221(d)(3)).

``SEC. 4093. DEFINITIONS.

    ``(a) Aviation Fuel.--For purposes of this subpart, the term 
`aviation fuel' means any liquid (other than any product taxable under 
section 4081) which is suitable for use as a fuel in an aircraft.
    ``(b) Producer.--For purposes of this subpart--
            ``(1) Certain persons treated as producers.--
                    ``(A) In general.--The term `producer' includes any 
                person described in subparagraph (B) and registered 
                under section 4101 with respect to the tax imposed by 
                section 4091.
                    ``(B) Persons described.--A person is described in 
                this subparagraph if such person is--
                            ``(i) a refiner, blender, or wholesale 
                        distributor of aviation fuel, or
                            ``(ii) a dealer selling aviation fuel 
                        exclusively to producers of aviation fuel.
                    ``(C) Reduced rate purchasers treated as 
                producers.--Any person to whom aviation fuel is sold at 
                a reduced rate under this subpart shall be treated as 
                the producer of such fuel.
            ``(2) Wholesale distributor.--For purposes of paragraph 
        (1), the term `wholesale distributor' includes any person who 
        sells aviation fuel to producers, retailers, or to users who 
        purchase in bulk quantities and deliver into bulk storage 
        tanks. Such term does not include any person who (excluding the 
        term `wholesale distributor' from paragraph (1)) is a producer 
        or importer.''
    (b) Civil Penalty For Using Reduced-Rate Fuel For Taxable Use.--
            (1) In general.--Part I of subchapter B of chapter 68 
        (relating to assessable penalties) is amended by adding at the 
        end thereof the following new section:

``SEC. 6714. DYED FUEL SOLD FOR USE OR USED IN TAXABLE USE.

    ``(a) Imposition of Penalty.--If any dyed fuel--
            ``(1) is sold or held for sale by any person for any use 
        which such person knows or has reason to know is not a reduced-
        tax use of such fuel, or
            ``(2) is used by any person for a use other than a reduced-
        tax use and such person knew, or had reason to know, that such 
        fuel was so dyed,
then, in addition to the tax, such person shall pay a penalty on such 
sale or use.
    ``(b) Amount of Penalty.--The amount of the penalty under 
subsection (a) on any sale or use shall be the greater of--
            ``(1) $1,000, or
            ``(2) an amount equal to twice the excess of the aggregate 
        taxes which should have been imposed under section 4081 on the 
        fuel so sold or used over the prior taxes (if any) imposed on 
        such fuel under such section which have not been credited or 
        refunded.
    ``(c) Definitions.--For purposes of this section--
            ``(1) Dyed fuel.--The term `dyed fuel' means diesel fuel 
        dyed in accordance with section 4082.
            ``(2) Reduced-tax use.--The term `reduced-tax use' means, 
        with respect to any fuel, the use for which such fuel was 
        dyed.''
            (2) Clerical amendment.--The table of sections for such 
        part I is amended by adding at the end thereof the following 
        new item:

                              ``Sec. 6714. Dyed fuel sold for use or 
                                        used in taxable use.''
    (c) Registered Vendors To Administer Claims for Refund of Diesel 
Fuel.--Section 6427(l) (relating to nontaxable uses of diesel fuel and 
aviation fuel) is amended by adding at the end the following new 
paragraph:
            ``(5) Registered vendors to administer claims for refund of 
        diesel fuel sold to farmers and state and local governments.--
                    ``(A) In general.--Paragraph (1) shall not apply to 
                the ultimate purchaser of undyed diesel fuel used on a 
                farm for farming purposes (within the meaning of 
                section 6420(c)) or for the exclusive use of a State or 
                local government.
                    ``(B) Payment to ultimate, registered vendor.--The 
                amount which would have otherwise been paid under 
                paragraph (1) (without regard to subparagraph (A)) 
                shall be paid to the ultimate vendor of such fuel, if 
                such vendor--
                            ``(i) is registered under section 4101, and
                            ``(ii) meets the requirements of section 
                        6416(a).''
    (d) Technical and Conforming Amendments.--
            (1) Subsection (c) of section 40 is amended by striking ``, 
        section 4081(c), or section 4091(c)'' and inserting ``or 
        section 4081(c)''.
            (2) Subsection (a) of section 4101 is amended by striking 
        ``4081'' and inserting ``4041(a)(1), 4081,''.
            (3) Section 4102 is amended by striking ``gasoline'' and 
        inserting ``any taxable fuel (as defined in section 4083)''.
            (4) Paragraph (1) of section 4041(a), as amended by 
        subtitle A, is amended to read as follows:
            ``(1) Tax on diesel fuel in certain cases.--
                    ``(A) In general.--There is hereby imposed a tax on 
                any liquid other than gasoline (as defined in section 
                4083)--
                            ``(i) sold by any person to an owner, 
                        lessee, or other operator of a diesel-powered 
                        highway vehicle, a diesel-powered train, or a 
                        diesel-powered boat for use as a fuel in such 
                        vehicle, train, or boat, or
                            ``(ii) used by any person as a fuel in a 
                        diesel-powered highway vehicle, a diesel-
                        powered train, or a diesel-powered boat unless 
                        there was a taxable sale of such fuel under 
                        clause (i).
                    ``(B) Exemption for previously taxed fuel.--No tax 
                shall be imposed by this paragraph on the sale or use 
                of diesel fuel if there was a taxable removal of such 
                fuel under section 4081 and the tax thereon was not 
                credited or refunded.
                    ``(C) Rate of tax.--
                            ``(i) In general.--Except as otherwise 
                        provided in this subparagraph, the rate of the 
                        tax imposed by this paragraph shall be the sum 
                        of the Highway Trust Fund financing rate on 
                        diesel fuel and the deficit reduction rate in 
                        effect under section 4081 at the time of such 
                        sale or use.
                            ``(ii) Certain rates not to apply to 
                        trains.--
                                    ``(I) Highway trust fund financing 
                                rate.--The Highway Trust Fund financing 
                                rate shall not apply to any sale for 
                                use, or use, of fuel in a train.
                                    ``(II) Deficit reduction rate.--The 
                                deficit reduction rate shall not apply 
                                to any sale for use, or use, of fuel in 
                                a train if such fuel is used by a State 
                                or any political subdivision thereof
                            ``(iii) Certain bus uses.--If the 
                        limitation in section 6427(b)(2)(A) applies to 
                        fuel sold for use or used in an automobile bus, 
                        the Highway Trust Fund financing rate shall be 
                        3 cents per gallon and so much of the deficit 
                        reduction rate as exceeds 4.3 cents per gallon 
                        shall not apply.''
            (5) Paragraph (2) of section 4041(a), as amended by 
        subtitle A, is amended by striking ``or paragraph (1) of this 
        subsection'' and by inserting ``on gasoline'' after ``Highway 
        Trust Fund financing rate''.
            (6) Paragraph (1) of section 4041(c), as amended by subpart 
        A, is amended by striking ``the aviation fuel deficit reduction 
        rate'' and inserting ``the deficit reduction rate imposed under 
        section 4091 on''.
            (7) Paragraph (2) of section 4041(c) is amended by striking 
        ``any product taxable under section 4081'' and inserting 
        ``gasoline (as defined in section 4083)''.
            (8) Paragraph (2) of section 4041(d) is amended--
                    (A) by striking ``(other than a product taxable 
                under section 4081)'' and inserting ``(other than 
                gasoline (as defined in section 4083))'', and
                    (B) by striking ``section 4091'' and inserting 
                ``section 4081''.
            (9) Paragraph (3) of section 4041(d) is amended by striking 
        ``(other than any product taxable under section 4081)'' and 
        inserting ``(other than gasoline (as defined in section 
        4083))''.
            (10) Subparagraph (A) of section 4041(k)(1) is amended by 
        striking ``sections 4081(c) and 4091(c), as the case may be'' 
        and inserting ``section 4081(c)''.
            (11) Subparagraph (B) of section 4041(m)(1) is amended by 
        striking ``section 4091(d)(1)'' and inserting ``section 
        4091(c)(1)''.
            (12) Section 6206 is amended by striking ``4041 or 4091'' 
        and inserting ``4041, 4081, or 4091''.
            (13) The heading for subsection (f) of section 6302 is 
        amended by inserting ``and Diesel Fuel'' after ``Gasoline''.
            (14) Paragraph (1) of section 6412(a) is amended by 
        striking ``gasoline'' each place it appears (including the 
        heading) and inserting ``taxable fuel''.
            (15)(A) Subparagraph (A) of section 6416(a)(4) is amended 
        by striking ``product'' each place it appears and inserting 
        ``gasoline''.
            (B) Subparagraph (B) of section 6416(a)(4) is amended by 
        striking all that follows ``substituting'' and inserting ```any 
        gasoline taxable under section 4081' for `aviation fuel' 
        therein).''
            (16) The third sentence of section 6416(b)(2) is amended by 
        inserting ``any tax imposed under section 4081 on diesel fuel 
        and'' after ``in the case of''.
            (17) Sections 6420(c)(5) and 6421(e)(1) are each amended by 
        striking ``section 4082(b)'' and inserting ``section 4083(a)''.
            (18) Section 6421(e)(2)(B)(iv), as added in subtitle A, is 
        amended
                    (A) by striking ``4091'' both places it appears and 
                inserting ``4081'', and
                    (B) by striking ``diesel fuel deficit'' in 
                subclause (I) and inserting ``deficit''.
            (19) Subsection (b) of section 6427 is amended--
                    (A) by striking ``if any fuel'' in paragraph (1) 
                and inserting ``if any fuel other than gasoline (as 
                defined in section 4083(a))'', and
                    (B) by striking ``4091'' each place it appears and 
                inserting ``4081''.
            (20)(A) Paragraph (1) of section 6427(f) is amended by 
        striking ``, 4091(c)(1)(A), or 4091(d)(1)(A)'' and inserting 
        ``or 4091(c)(1)(A)''.
            (B) Paragraph (2) of section 6427(f) is amended to read as 
        follows:
            ``(2) Definitions.--For purposes of paragraph (1)--
                    ``(A) Regular tax rate.--The term `regular tax 
                rate' means--
                            ``(i) in the case of gasoline or diesel 
                        fuel, the aggregate rate of tax imposed by 
                        section 4081 determined without regard to 
                        subsection (c) thereof, and
                            ``(ii) in the case of aviation fuel, the 
                        aggregate rate of tax imposed by section 4091 
                        determined without regard to subsection (c) 
                        thereof.
                    ``(B) Incentive tax rate.--The term `incentive tax 
                rate' means--
                            ``(i) in the case of gasoline or diesel 
                        fuel, the aggregate rate of tax imposed by 
                        section 4081 with respect to fuel described in 
                        subsection (c)(1) thereof, and
                            ``(ii) in the case of aviation fuel, the 
                        aggregate rate of tax imposed by section 4091 
                        with respect to fuel described in subsection 
                        (c)(1)(B) thereof.''
            (21) Subsection (h) of section 6427 is amended by striking 
        ``section 4082(b)'' and inserting ``section 4083(a)(2)''.
            (22) Paragraph (3) of section 6427(i) is amended--
                    (A) by striking ``gasohol'' in the heading and 
                inserting ``alcohol mixture'', and
                    (B) by striking ``gasoline used to produce gasohol 
                (as defined in section 4081(c)(1))'' in subparagraph 
                (A) and inserting ``gasoline or diesel fuel used to 
                produce a qualified alcohol mixture (as defined in 
                section 4081(c)(3))''.
            (23) The heading of paragraph (4) of section 6427(i) is 
        amended by inserting ``4081 or'' before ``4091''.
            (24) Subsection (l) of section 6427, as amended by subpart 
        A, is amended to read as follows:
    ``(l) Nontaxable Uses of Diesel Fuel and Aviation Fuel.--
            ``(1) In general.--Except as provided in subsection (k) and 
        in paragraphs (3) and (4) of this subsection, if--
                    ``(A) any diesel fuel on which tax has been imposed 
                by section 4081, or
                    ``(B) any aviation fuel on which tax has been 
                imposed by section 4091,
        is used by any person in a nontaxable use, the Secretary shall 
        pay (without interest) to the ultimate purchaser of such fuel 
        an amount equal to the aggregate amount of tax imposed on such 
        fuel under section 4081 or 4091, as the case may be.
            ``(2) Nontaxable use.--For purposes of this subsection, the 
        term `nontaxable use' means--
                    ``(A) in the case of diesel fuel, any use which is 
                exempt from the tax imposed by section 4041(a)(1) other 
                than by reason of the imposition of tax on any sale 
                thereof, and
                    ``(B) in the case of aviation fuel, any use which 
                is exempt from the tax imposed by section 4041(c)(1) 
                other than by reason of the imposition of tax on any 
                sale thereof.
            ``(3) No refund of certain taxes on fuel used in diesel-
        powered trains.--Fuel used in a diesel-powered train shall be 
        treated as a nontaxable use for purposes of this section, 
        except that paragraph (1) shall not apply to so much of the tax 
        imposed by section 4081 as is attributable to the Leaking 
        Underground Storage Tank Trust Fund financing rate and the 
        deficit reduction rate imposed by such section, unless such 
        fuel was used by a State or any political subdivision thereof.
            ``(4) No refund of certain taxes on fuels used in 
        aircraft.--In the case of fuel used in any aircraft (other than 
        as supplies for vessels or aircraft, within the meaning of 
        section 4221(d)(3)), paragraph (1) also shall not apply to so 
        much of the tax imposed by section 4091 as is attributable to 
        the Leaking Underground Storage Tank Trust Fund financing rate 
        and the deficit reduction rate imposed by such section. The 
        preceding sentence shall not apply if such fuel was used by a 
        State or any political subdivision thereof.''
            (25) Paragraph (1) of section 9503(b) is amended--
                    (A) by striking ``gasoline),'' in subparagraph (E) 
                and inserting ``gasoline and diesel fuel), and'',
                    (B) by striking subparagraph (F), and
                    (C) by redesignating subparagraph (G) as 
                subparagraph (F).
            (26)(A) Subparagraph (B) of section 9503(b)(4) is amended 
        by striking ``, 4081, and 4091'' and inserting ``and 4081''.
            (B) Subparagraph (C) of section 9503(b)(4), as amended by 
        subtitle A, is amended by striking ``4091'' and inserting 
        ``4081''.
            (27) Subparagraph (D) of section 9503(c)(6) is amended by 
        striking ``, 4081, and 4091'' and inserting ``and 4081''.
            (28) Paragraph (2) of section 9503(e) is amended--
                    (A) by striking ``, 4081, and 4091'' and inserting 
                ``and 4081'', and
                    (B) by striking ``, 4081, or 4091'' and inserting 
                ``or 4081''.
            (29) Subsection (b) of section 9508 is amended--
                    (A) by inserting ``and diesel fuel'' after 
                ``gasoline'' in paragraph (2),
                    (B) by striking ``diesel fuel and'' in paragraph 
                (3), and
                    (C) by striking ``4091'' in the last sentence, as 
                added by subtitle A, and inserting ``4081''.
            (30) The table of subparts for part III of subchapter A of 
        chapter 32 is amended by striking the items relating to 
        subparts A and B and inserting the following new items:

                              ``Subpart A. Gasoline and diesel fuel.
                              ``Subpart B. Aviation fuel.''
    (e) Effective Date.--The amendments made by this section shall take 
effect on January 1, 1994.

SEC. 8243. FLOOR STOCKS TAX.

    (a) In General.--There is hereby imposed a floor stocks tax on 
diesel fuel held by any person on January 1, 1994, if--
            (1) no tax was imposed on such fuel under section 4041(a) 
        or 4091 of the Internal Revenue Code of 1986 as in effect on 
        the day before the date of the enactment of this Act, and
            (2) tax would have been imposed by section 4081 of such 
        Code, as amended by this Act, on any prior removal, entry, or 
        sale of such fuel had such section 4081 applied to such fuel 
        for periods before such date of enactment.
    (b) Rate of Tax.--The rate of the tax imposed by subsection (a) 
shall be the amount of tax which would be imposed under section 4081 of 
the Internal Revenue Code of 1986 if there were a taxable sale of such 
fuel on such date.
    (c) Liability and Payment of Tax.--
            (1) Liability for tax.--A person holding the diesel fuel on 
        January 1, 1994, to which the tax imposed by this section 
        applies shall be liable for such tax.
            (2) Method of payment.--The tax imposed by this section 
        shall be paid in such manner as the Secretary shall prescribe.
            (3) Time for payment.--The tax imposed by this section 
        shall be paid on or before July 31, 1994.
    (d) Definitions.--For purposes of this section--
            (1) Diesel fuel.--The term ``diesel fuel'' has the meaning 
        given such term by section 4083(a) of such Code.
            (2) Secretary.--The term ``Secretary'' means the Secretary 
        of the Treasury or his delegate.
    (e) Exceptions.--
            (1) Persons entitled to credit or refund.--The tax imposed 
        by this section shall not apply to fuel held by any person 
        exclusively for any use to the extent a credit or refund of the 
        tax imposed by section 4081 is allowable for such use.
            (2) Compliance with dyeing required.--Paragraph (1) shall 
        not apply to the holder of any fuel if the holder of such fuel 
        fails to comply with any requirement imposed by the Secretary 
        with respect to dyeing.
    (f) Other Laws Applicable.--All provisions of law, including 
penalties, applicable with respect to the taxes imposed by section 4081 
of such Code shall, insofar as applicable and not inconsistent with the 
provisions of this section, apply with respect to the floor stock taxes 
imposed by this section to the same extent as if such taxes were 
imposed by such section 4081.

 Subpart C--Extension of Motor Fuel Tax Rates; Increased Deposits Into 
                           Highway Trust Fund

SEC. 8244. EXTENSION OF MOTOR FUEL TAX RATES; INCREASED DEPOSITS INTO 
              HIGHWAY TRUST FUND.

    (a) In General.--Clause (i) of section 4081(a)(2)(B), as amended by 
subpart B, is amended--
            (1) by striking ``11.5 cents'' and inserting ``14 cents'', 
        and
            (2) by striking ``17.5 cents'' and inserting ``20 cents''.
    (b) Conforming Amendments.--
            (1) Subparagraph (A) of section 4081(c)(4), as so amended, 
        is amended to read as follows:
                    ``(A) In general.--In the case of the Highway Trust 
                Fund financing rate, the otherwise applicable rate for 
                gasoline in a qualified alcohol mixture is--
                            ``(i) 8.6 cents a gallon for 10 percent 
                        gasohol,
                            ``(ii) 9.842 cents a gallon for 7.7 percent 
                        gasohol, and
                            ``(iii) 10.922 cents a gallon for 5.7 
                        percent gasohol.
        In the case of a mixture none of the alcohol in which consists 
        of ethanol, clauses (i), (ii), and (iii) shall be applied by 
        substituting `8.0 cents' for `8.6 cents', `9.38 cents' for 
        `9.842 cents', and `10.58 cents' for `10.922'.''
            (2) Paragraph (5) of section 4081(c), as so amended, is 
        amended--
                    (A) by striking ``12.1 cents'' and inserting ``14.6 
                cents'', and
                    (B) by striking ``11.5 cents'' and inserting 
                ``14.0''.
            (3) Subparagraph (A) of section 4041(m)(1), as amended by 
        subpart A, is amended to read as follows:
                    ``(A) under subsection (a)(2) the Highway Trust 
                Fund financing shall be 7 cents per gallon and the 
                deficit reduction rate shall be 4.3 cents per gallon, 
                and''.
            (4) Clause (ii) of section 4041(a)(1)(C), as so amended, is 
        amended--
                    (A) by striking ``The Highway Trust Fund financing 
                rate'' and inserting ``So much of the Highway Trust 
                Fund financing rate as exceeds 2.5 cents per gallon'', 
                and
                    (B) by striking ``Highway rate'' in the heading and 
                inserting ``Portion of highway rate''.
            (5) Paragraph (4) of section 6427(l), as amended by subpart 
        B, is amended--
                    (A) by inserting ``2.5 cents per gallon of the 
                Highway Trust Fund financing rate and'' after 
                ``attributable to'', and
                    (B) by striking ``deficit reduction tax'' in the 
                heading and inserting ``portion of tax''.
            (6) Subsection (b) of section 9503 is amended by adding at 
        the end thereof the following new paragraph:
            ``(6) Retention of certain taxes in general fund.--
                    ``(A) In general.--There shall not be taken into 
                account under paragraphs (1) and (2)--
                            ``(i) the tax imposed by section 4081 on 
                        diesel fuel used in any train, and
                            ``(ii) so much of the nonhighway 
                        recreational fuel taxes (as defined in 
                        subsection (c)(6)(D)) as are attributable to 
                        2.5 cents of the Highway Trust Fund financing 
                        rate.
                    ``(B) Transfers from highway trust fund.--For 
                purposes of determining the amount paid from the 
                Highway Trust Fund under subsection (c)(6), the Highway 
                Trust Fund financing rate shall be treated as being 2.5 
                cents less than the otherwise applicable rate.''
    (c) Increase in Deposits in Mass Transit Account.--Paragraph (2) of 
section 9503(e) is amended by striking ``1.5 cents'' and inserting ``2 
cents''.
    (d) Effective Date.--The amendments made by this section shall take 
effect October 1, 1995, but the amendment made by subsection (c) shall 
apply only to amounts attributable to taxes imposed on or after such 
date.

                     PART V--COMPLIANCE PROVISIONS

SEC. 8251. MODIFICATIONS TO SUBSTANTIAL UNDERSTATEMENT AND RETURN-
              PREPARER PENALTIES.

    (a) Reasonable Basis Required.--
            (1) Substantial understatement penalty.--Clause (ii) of 
        section 6662(d)(2)(B) (relating to reduction for understatement 
        due to position of taxpayer or disclosed item) is amended to 
        read as follows:
                            ``(ii) any item if--
                                    ``(I) the relevant facts affecting 
                                the item's tax treatment are adequately 
                                disclosed in the return or in a 
                                statement attached to the return, and
                                    ``(II) there is a reasonable basis 
                                for the tax treatment of such item by 
                                the taxpayer.''
    (b) Effective Date.--The amendments made by this section shall 
apply to returns the due dates for which (determined without regard to 
extensions) are after December 31, 1993.

SEC. 8252. RETURNS RELATING TO THE CANCELLATION OF INDEBTEDNESS BY 
              CERTAIN FINANCIAL ENTITIES.

    (a) In General.--Subpart B of part III of subchapter A of chapter 
61 (relating to information concerning transactions with other persons) 
is amended by adding at the end thereof the following new section:

``SEC. 6050P. RETURNS RELATING TO THE CANCELLATION OF INDEBTEDNESS BY 
              CERTAIN FINANCIAL ENTITIES.

    ``(a) In General.--Any applicable financial entity which discharges 
(in whole or in part) the indebtedness of any person during any 
calendar year shall make a return (at such time and in such form as the 
Secretary may by regulations prescribe) setting forth--
            ``(1) the name, address, and TIN of each person whose 
        indebtedness was discharged during such calendar year,
            ``(2) the date of the discharge and the amount of the 
        indebtedness discharged, and
            ``(3) such other information as the Secretary may 
        prescribe.
    ``(b) Exception.--Subsection (a) shall not apply to any discharge 
of less than $600.
    ``(c) Definitions and Special Rules.--For purposes of this 
section--
            ``(1) Applicable financial entity.--The term `applicable 
        financial entity' means--
                    ``(A) any financial institution described in 
                section 581 or 591(a) and any credit union,
                    ``(B) the Federal Deposit Insurance Corporation, 
                the Resolution Trust Corporation, the National Credit 
                Union Administration, and any other Federal executive 
                agency (as defined in section 6050M), and any successor 
                or subunit of any of the foregoing, and
                    ``(C) any other corporation which is a direct or 
                indirect subsidiary of an entity referred to in 
                subparagraph (A) but only if, by virtue of being 
                affiliated with such entity, such other corporation is 
                subject to supervision and examination by a Federal or 
                State agency which regulates entities referred to in 
                subparagraph (A).
            ``(2) Governmental units.--In the case of an entity 
        described in paragraph (1)(B), any return under this section 
        shall be made by the officer or employee appropriately 
        designated for the purpose of making such return.
    ``(d) Statements To Be Furnished to Persons With Respect to Whom 
Information Is Required To Be Furnished.--Every applicable financial 
entity required to make a return under subsection (a) shall furnish to 
each person whose name is required to be set forth in such return a 
written statement showing--
            ``(1) the name and address of the entity required to make 
        such return, and
            ``(2) the information required to be shown on the return 
        with respect to such person.
The written statement required under the preceding sentence shall be 
furnished to the person on or before January 31 of the year following 
the calendar year for which the return under subsection (a) was made.''
    (b) Penalties.--
            (1) Returns.--Subparagraph (B) of section 6724(d)(1) is 
        amended by redesignating clauses (viii) through (xv) as clauses 
        (ix) through (xvi), respectively, and by inserting after clause 
        (vii) the following new clause:
                            ``(viii) section 6050P (relating to returns 
                        relating to the cancellation of indebtedness by 
                        certain financial entities),''.
            (2) Statements.--Paragraph (2) of section 6724(d) is 
        amended by redesignating subparagraphs (P) through (S) as 
        subparagraphs (Q) through (T), respectively, and by inserting 
        after subparagraph (O) the following new subparagraph:
                    ``(P) section 6050P(d) (relating to returns 
                relating to the cancellation of indebtedness by certain 
                financial entities),''.
    (c) Clerical Amendment.--The table of sections for subpart B of 
part III of subchapter A of chapter 61 is amended by adding at the end 
thereof the following new item:

                              ``Sec. 6050P. Returns relating to the 
                                        cancellation of indebtedness by 
                                        certain financial entities.''
    (d) Effective Date.--The amendments made by this section shall 
apply to discharges of indebtedness after the date of the enactment of 
this Act.

                   PART VI--TREATMENT OF INTANGIBLES

SEC. 8261. AMORTIZATION OF GOODWILL AND CERTAIN OTHER INTANGIBLES.

    (a) General Rule.--Part VI of subchapter B of chapter 1 (relating 
to itemized deductions for individuals and corporations) is amended by 
adding at the end thereof the following new section:

``SEC. 197. AMORTIZATION OF GOODWILL AND CERTAIN OTHER INTANGIBLES.

    ``(a) General Rule.--A taxpayer shall be entitled to an 
amortization deduction with respect to any amortizable section 197 
intangible. The amount of such deduction shall be determined by 
amortizing 75 percent of the adjusted basis (for purposes of 
determining gain) of such intangible ratably over the 14-year period 
beginning with the month in which such intangible was acquired.
    ``(b) No Other Depreciation or Amortization Deduction Allowable.--
Except as provided in subsection (a), no depreciation or amortization 
deduction shall be allowable with respect to any amortizable section 
197 intangible.
    ``(c) Amortizable Section 197 Intangible.--For purposes of this 
section--
            ``(1) In general.--Except as otherwise provided in this 
        section, the term `amortizable section 197 intangible' means 
        any section 197 intangible--
                    ``(A) which is acquired by the taxpayer after the 
                date of the enactment of this section, and
                    ``(B) which is held in connection with the conduct 
                of a trade or business or an activity described in 
                section 212.
            ``(2) Exclusion of self-created intangibles, etc.--The term 
        `amortizable section 197 intangible' shall not include any 
        section 197 intangible--
                    ``(A) which is not described in subparagraph (D), 
                (E), or (F) of subsection (d)(1), and
                    ``(B) which is created by the taxpayer.
        This paragraph shall not apply if the intangible is created in 
        connection with a transaction (or series of related 
        transactions) involving the acquisition of assets constituting 
        a trade or business or substantial portion thereof.
            ``(3) Anti-churning rules.--

                                ``For exclusion of intangibles acquired 
in certain transactions, see subsection (f)(9).

    ``(d) Section 197 Intangible.--For purposes of this section--
            ``(1) In general.--Except as otherwise provided in this 
        section, the term `section 197 intangible' means--
                    ``(A) goodwill,
                    ``(B) going concern value,
                    ``(C) any of the following intangible items:
                            ``(i) workforce in place including its 
                        composition and terms and conditions 
                        (contractual or otherwise) of its employment,
                            ``(ii) business books and records, 
                        operating systems, or any other information 
                        base (including lists or other information with 
                        respect to current or prospective customers),
                            ``(iii) any patent, copyright, formula, 
                        process, design, pattern, knowhow, format, or 
                        other similar item,
                            ``(iv) any customer-based intangible,
                            ``(v) any supplier-based intangible, and
                            ``(vi) any other similar item,
                    ``(D) any license, permit, or other right granted 
                by a governmental unit or an agency or instrumentality 
                thereof,
                    ``(E) any covenant not to compete (or other 
                arrangement to the extent such arrangement has 
                substantially the same effect as a covenant not to 
                compete) entered into in connection with an acquisition 
                (directly or indirectly) of an interest in a trade or 
                business or substantial portion thereof, and
                    ``(F) any franchise, trademark, or trade name.
            ``(2) Customer-based intangible.--
                    ``(A) In general.--The term `customer-based 
                intangible' means--
                            ``(i) composition of market,
                            ``(ii) market share, and
                            ``(iii) any other value resulting from 
                        future provision of goods or services pursuant 
                        to relationships (contractual or otherwise) in 
                        the ordinary course of business with customers.
                    ``(B) Special rule for financial institutions.--In 
                the case of a financial institution, the term 
                `customer-based intangible' includes deposit base and 
                similar items.
            ``(3) Supplier-based intangible.--The term `supplier-based 
        intangible' means any value resulting from future acquisitions 
        of goods or services pursuant to relationships (contractual or 
        otherwise) in the ordinary course of business with suppliers of 
        goods or services to be used or sold by the taxpayer.
    ``(e) Exceptions.--For purposes of this section, the term `section 
197 intangible' shall not include any of the following:
            ``(1) Financial interests.--Any interest--
                    ``(A) in a corporation, partnership, trust, or 
                estate, or
                    ``(B) under an existing futures contract, foreign 
                currency contract, notional principal contract, or 
                other similar financial contract.
            ``(2) Land.--Any interest in land.
            ``(3) Computer software.--
                    ``(A) In general.--Any--
                            ``(i) computer software which is readily 
                        available for purchase by the general public, 
                        is subject to a nonexclusive license, and has 
                        not been substantially modified, and
                            ``(ii) other computer software which is not 
                        acquired in a transaction (or series of related 
                        transactions) involving the acquisition of 
                        assets constituting a trade or business or 
                        substantial portion thereof.
                    ``(B) Computer software defined.--For purposes of 
                subparagraph (A), the term `computer software' means 
                any program designed to cause a computer to perform a 
                desired function. Such term shall not include any data 
                base or similar item unless the data base or item is in 
                the public domain and is incidental to the operation of 
                otherwise qualifying computer software.
            ``(4) Certain interests or rights acquired separately.--Any 
        of the following not acquired in a transaction (or series of 
        related transactions) involving the acquisition of assets 
        constituting a trade business or substantial portion thereof:
                    ``(A) Any interest in a film, sound recording, 
                video tape, book, or similar property.
                    ``(B) Any right to receive tangible property or 
                services under a contract or granted by a governmental 
                unit or agency or instrumentality thereof.
                    ``(C) Any interest in a patent or copyright.
                    ``(D) To the extent provided in regulations, any 
                right under a contract (or granted by a governmental 
                unit or an agency or instrumentality thereof) if such 
                right--
                            ``(i) has a fixed duration of less than 14 
                        years, or
                            ``(ii) is fixed as to amount and, without 
                        regard to this section, would be recoverable 
                        under a method similar to the unit-of-
                        production method.
            ``(5) Interests under leases and debt instruments.--Any 
        interest under--
                    ``(A) an existing lease of tangible property, or
                    ``(B) except as provided in subsection (d)(2)(B), 
                any existing indebtedness.
            ``(6) Treatment of sports franchises.--A franchise to 
        engage in professional football, basketball, baseball, or other 
        professional sport, and any item acquired in connection with 
        such a franchise.
            ``(7) Mortgage servicing.--Any right to service 
        indebtedness which is secured by residential real property 
        unless such right is acquired in a transaction (or series of 
        related transactions) involving the acquisition of assets 
        (other than rights described in this paragraph) constituting a 
        trade or business or substantial portion thereof.
            ``(8) Certain transaction costs.--Any fees for professional 
        services, and any transaction costs, incurred by parties to a 
        transaction with respect to which any portion of the gain or 
        loss is not recognized under part III of subchapter C.
    ``(f) Special Rules.--
            ``(1) Treatment of certain dispositions, etc.--If there is 
        a disposition of any amortizable section 197 intangible 
        acquired in a transaction or series of related transactions (or 
        any such intangible becomes worthless) and one or more other 
        amortizable section 197 intangibles acquired in such 
        transaction or series of related transactions are retained--
                    ``(A) no loss shall be recognized by reason of such 
                disposition (or such worthlessness), and
                    ``(B) appropriate adjustments to the adjusted bases 
                of such retained intangibles shall be made for any loss 
                not recognized under subparagraph (A).
        All persons treated as a single taxpayer under section 41(f)(1) 
        shall be so treated for purposes of the preceding sentence.
            ``(2) Treatment of certain transfers.--
                    ``(A) In general.--In the case of any section 197 
                intangible transferred in a transaction described in 
                subparagraph (B), the transferee shall be treated as 
                the transferor for purposes of applying this section 
                with respect to so much of the adjusted basis in the 
                hands of the transferee as does not exceed the adjusted 
                basis in the hands of the transferor.
                    ``(B) Transactions covered.--The transactions 
                described in this subparagraph are--
                            ``(i) any transaction described in section 
                        332, 351, 361, 721, 731, 1031, or 1033, and
                            ``(ii) any transaction between members of 
                        the same affiliated group during any taxable 
                        year for which a consolidated return is made by 
                        such group.
            ``(3) Treatment of amounts paid pursuant to covenants not 
        to compete, etc.--Any amount paid or incurred pursuant to a 
        covenant or arrangement referred to in subsection (d)(1)(E) 
        shall be treated as an amount chargeable to capital account.
            ``(4) Treatment of franchises, etc.--
                    ``(A) Franchise.--The term `franchise' has the 
                meaning given to such term by section 1253(b)(1).
                    ``(B) Treatment of renewals.--Any renewal of a 
                franchise, trademark, or trade name (or of a license, a 
                permit, or other right referred to in subsection 
                (d)(1)(D)) shall be treated as an acquisition. The 
                preceding sentence shall only apply with respect to 
                costs incurred in connection with such renewal.
                    ``(C) Certain amounts not taken into account.--Any 
                amount to which section 1253(d)(1) applies shall not be 
                taken into account under this section.
            ``(5) Treatment of certain reinsurance transactions.--In 
        the case of any amortizable section 197 intangible resulting 
        from an assumption reinsurance transaction, the amount taken 
        into account as the adjusted basis of such intangible under 
        this section shall be the excess of--
                    ``(A) the amount paid or incurred by the acquirer 
                under the assumption reinsurance transaction, over
                    ``(B) the amount required to be capitalized under 
                section 848 in connection with such transaction.
        Subsection (b) shall not apply to any amount required to be 
        capitalized under section 848.
            ``(6) Treatment of certain subleases.--For purposes of this 
        section, a sublease shall be treated in the same manner as a 
        lease of the underlying property involved.
            ``(7) Treatment as depreciable.--For purposes of this 
        chapter, any amortizable section 197 intangible shall be 
        treated as property which is of a character subject to the 
        allowance for depreciation provided in section 167.
            ``(8) Treatment of certain increments in value.--This 
        section shall not apply to any increment in value if, without 
        regard to this section, such increment is properly taken into 
        account in determining the cost of property which is not a 
        section 197 intangible.
            ``(9) Anti-churning rules.--For purposes of this section--
                    ``(A) In general.--The term `amortizable section 
                197 intangible' shall not include any section 197 
                intangible which is described in subparagraph (A) or 
                (B) of subsection (d)(1) (or for which depreciation or 
                amortization would not have been allowable but for this 
                section) and which is acquired by the taxpayer after 
                the date of the enactment of this section, if--
                            ``(i) the intangible was held or used at 
                        any time on or after July 25, 1991, and on or 
                        before such date of enactment by the taxpayer 
                        or a related person,
                            ``(ii) the intangible was acquired from a 
                        person who held such intangible at any time on 
                        or after July 25, 1991, and on or before such 
                        date of enactment, and, as part of the 
                        transaction, the user of such intangible does 
                        not change, or
                            ``(iii) the taxpayer grants the right to 
                        use such intangible to a person (or a person 
                        related to such person) who held or used such 
                        intangible at any time on or after July 25, 
                        1991, and on or before such date of enactment.
                For purposes of this subparagraph, the determination of 
                whether the user of property changes as part of a 
                transaction shall be determined in accordance with 
                regulations prescribed by the Secretary. For purposes 
                of this subparagraph, deductions allowable under 
                section 1253(d) shall be treated as deductions 
                allowable for amortization.
                    ``(B) Exception where gain recognized.--If--
                            ``(i) subparagraph (A) would not apply to 
                        an intangible acquired by the taxpayer but for 
                        the last sentence of subparagraph (C)(i), and
                            ``(ii) the person from whom the taxpayer 
                        acquired the intangible elects, notwithstanding 
                        any other provision of this title--
                                    ``(I) to recognize gain on the 
                                disposition of the intangible, and
                                    ``(II) to pay a tax on such gain 
                                which, when added to any other income 
                                tax on such gain under this title, 
                                equals such gain multiplied by the 
                                highest rate of income tax applicable 
                                to such person under this title,
                        then subparagraph (A) shall apply to the 
                        intangible only to the extent that the 
                        taxpayer's adjusted basis in the intangible 
                        exceeds the gain recognized under clause 
                        (ii)(I).
                    ``(C) Related person defined.--For purposes of this 
                paragraph--
                            ``(i) Related person.--A person 
                        (hereinafter in this paragraph referred to as 
                        the `related person') is related to any person 
                        if--
                                    ``(I) the related person bears a 
                                relationship to such person specified 
                                in section 267(b) or section 707(b)(1), 
                                or
                                    ``(II) the related person and such 
                                person are engaged in trades or 
                                businesses under common control (within 
                                the meaning of subparagraphs (A) and 
                                (B) of section 41(f)(1)).
                        For purposes of subclause (I), in applying 
                        section 267(b) or 707(b)(1), `20 percent' shall 
                        be substituted for `50 percent'.
                            ``(ii) Time for making determination.--A 
                        person shall be treated as related to another 
                        person if such relationship exists immediately 
                        before or immediately after the acquisition of 
                        the intangible involved.
                    ``(D) Acquisitions by reason of death.--
                Subparagraph (A) shall not apply to the acquisition of 
                any property by the taxpayer if the basis of the 
                property in the hands of the taxpayer is determined 
                under section 1014(a).
                    ``(E) Special rule for partnerships.--With respect 
                to any increase in the basis of partnership property 
                under section 732, 734, or 743, determinations under 
                this paragraph shall be made at the partner level and 
                each partner shall be treated as having owned and used 
                such partner's proportionate share of the partnership 
                assets.
                    ``(F) Anti-abuse rules.--The term `amortizable 
                section 197 intangible' does not include any section 
                197 intangible acquired in a transaction, one of the 
                principal purposes of which is to avoid the requirement 
                of subsection (c)(1) that the intangible be acquired 
                after the date of the enactment of this section or to 
                avoid the provisions of subparagraph (A).
    ``(g) Special Rules for Acquisition of Certain Computer Software 
Businesses.--
            ``(1) In general.--In the case of any section 197 
        intangible acquired in a transaction to which this subsection 
        applies, subsection (a) shall be applied with respect to one-
        half of the 75 percent of its adjusted basis which is 
        amortizable under subsection (a) by substituting `5-year 
        period' for `14-year period'.
            ``(2) Transactions to which subsection applies.--
                    ``(A) In general.--This subsection shall apply to a 
                transaction (or series of related transactions) 
                involving the acquisition of assets constituting a 
                trade or business or substantial portion thereof if--
                            ``(i) the principal business activity of 
                        the trade or business (or portion) is computer 
                        software development, computer sales, 
                        licensing, or leasing, the provision of 
                        computer software services, or a combination 
                        thereof, and
                            ``(ii) during the testing period, the 
                        aggregate computer software development costs 
                        of such trade or business (or portion) are not 
                        less than 17 percent of the greater of--
                                    ``(I) the aggregate gross receipts 
                                of such trade or business (or portion), 
                                or
                                    ``(II) the aggregate gross 
                                expenditures of such trade or business 
                                (or portion).
                    ``(B) Computer software development costs.--For 
                purposes of subparagraph (A), the term `computer 
                software development costs' means the sum of--
                            ``(i) the computer software development 
                        costs which qualify as research and 
                        experimentation expenditures under section 174, 
                        plus
                            ``(ii) the amortization deductions of the 
                        trade or business with respect to computer 
                        software not acquired in a transaction (or 
                        series of related transactions) involving the 
                        acquisition of assets constituting a trade or 
                        business or substantial portion thereof.
                    ``(C) Testing period.--For purposes of subparagraph 
                (A), the term `testing period' means the 5-year period 
                ending on the date of the last transaction described in 
                subparagraph (A) pursuant to which the section 197 
                intangible was acquired (or, if shorter, the entire 
                period of existence of the trade or business (or 
                portion) before such date).
    ``(h) Regulations.--The Secretary shall prescribe such regulations 
as may be appropriate to carry out the purposes of this section, 
including such regulations as may be appropriate to prevent avoidance 
of the purposes of this section through related persons or otherwise.''
    (b) Modifications to Depreciation Rules.--
            (1) Treatment of certain property excluded from section 
        197.--Section 167 (relating to depreciation deduction) is 
        amended by redesignating subsection (f) as subsection (g) and 
        by inserting after subsection (e) the following new subsection:
    ``(f) Treatment of Certain Property Excluded From Section 197.--
            ``(1) Computer software.--
                    ``(A) In general.--If a depreciation deduction is 
                allowable under subsection (a) with respect to any 
                computer software, such deduction shall be computed by 
                using the straight line method and a useful life of 36 
                months.
                    ``(B) Computer software.--For purposes of this 
                section, the term `computer software' has the meaning 
                given to such term by section 197(e)(3)(B); except that 
                such term shall not include any such software which is 
                an amortizable section 197 intangible.
            ``(2) Certain interests or rights acquired separately.--If 
        a depreciation deduction is allowable under subsection (a) with 
        respect to any property described in subparagraph (B), (C), or 
        (D) of section 197(e)(4), such deduction shall be computed in 
        accordance with regulations prescribed by the Secretary.
            ``(3) Mortgage servicing rights.--If a depreciation 
        deduction is allowable under subsection (a) with respect to any 
        right described in section 197(e)(7), such deduction shall be 
        computed by using the straight line method and a useful life of 
        108 months.''
            (2) Allocation of basis in case of leased property.--
        Subsection (c) of section 167 is amended to read as follows:
    ``(c) Basis for Depreciation.--
            ``(1) In general.--The basis on which exhaustion, wear and 
        tear, and obsolescence are to be allowed in respect of any 
        property shall be the adjusted basis provided in section 1011, 
        for the purpose of determining the gain on the sale or other 
        disposition of such property.
            ``(2) Special rule for property subject to lease.--If any 
        property is acquired subject to a lease--
                    ``(A) no portion of the adjusted basis shall be 
                allocated to the leasehold interest, and
                    ``(B) the entire adjusted basis shall be taken into 
                account in determining the depreciation deduction (if 
                any) with respect to the property subject to the 
                lease.''
    (c) Amendments to Section 1253.--Subsection (d) of section 1253 is 
amended by striking paragraphs (2), (3), (4), and (5) and inserting the 
following:
            ``(2) Other payments.--Any amount paid or incurred on 
        account of a transfer, sale, or other disposition of a 
        franchise, trademark, or trade name to which paragraph (1) does 
        not apply shall be treated as an amount chargeable to capital 
        account.
            ``(3) Renewals, etc.--For purposes of determining the term 
        of a transfer agreement under this section, there shall be 
        taken into account all renewal options (and any other period 
        for which the parties reasonably expect the agreement to be 
        renewed).''
    (d) Amendment to Section 848.--Subsection (g) of section 848 is 
amended by striking ``this section'' and inserting ``this section or 
section 197''.
    (e) Amendments to Section 1060.--
            (1) Paragraph (1) of section 1060(b) is amended by striking 
        ``goodwill or going concern value'' and inserting ``section 197 
        intangibles''.
            (2) Paragraph (1) of section 1060(d) is amended by striking 
        ``goodwill or going concern value (or similar items)'' and 
        inserting ``section 197 intangibles''.
    (f) Technical and Conforming Amendments.--
            (1) Subsection (g) of section 167 (as redesignated by 
        subsection (b)) is amended to read as follows:
    ``(g) Cross References.--

                                ``(1) For additional rule applicable to 
depreciation of improvements in the case of mines, oil and gas wells, 
other natural deposits, and timber, see section 611.
                                ``(2) For amortization of goodwill and 
certain other intangibles, see section 197.''

            (2) Subsection (f) of section 642 is amended by striking 
        ``section 169'' and inserting ``sections 169 and 197''.
            (3) Subsection (a) of section 1016 is amended by striking 
        paragraph (19) and by redesignating the following paragraphs 
        accordingly.
            (4) Subparagraph (C) of section 1245(a)(2) is amended by 
        striking ``193, or 1253(d) (2) or (3)'' and inserting ``or 
        193''.
            (5) Paragraph (3) of section 1245(a) is amended by striking 
        ``section 185 or 1253(d) (2) or (3)''.
            (6) The table of sections for part VI of subchapter B of 
        chapter 1 is amended by adding at the end thereof the following 
        new item:

                              ``Sec. 197. Amortization of goodwill and 
                                        certain other intangibles.''.
    (g) Effective Date.--
            (1) In general.--Except as otherwise provided in this 
        subsection, the amendments made by this section shall apply 
        with respect to property acquired after the date of the 
        enactment of this Act.
            (2) Election to have amendments apply to property acquired 
        after july 25, 1991.--
                    (A) In general.--If an election under this 
                paragraph applies to the taxpayer--
                            (i) the amendments made by this section 
                        shall apply to property acquired by the 
                        taxpayer after July 25, 1991,
                            (ii) subsection (c)(1)(A) of section 197 of 
                        the Internal Revenue Code of 1986 (as added by 
                        this section) (and so much of subsection 
                        (f)(9)(A) of such section 197 as precedes 
                        clause (i) thereof) shall be applied with 
                        respect to the taxpayer by treating July 25, 
                        1991, as the date of the enactment of such 
                        section, and
                            (iii) in applying subsection (f)(9) of such 
                        section, with respect to any property acquired 
                        by the taxpayer on or before the date of the 
                        enactment of this Act, only holding or use on 
                        July 25, 1991, shall be taken into account.
                    (B) Election.--An election under this paragraph 
                shall be made at such time and in such manner as the 
                Secretary of the Treasury or his delegate may 
                prescribe. Such an election by any taxpayer, once 
                made--
                            (i) may be revoked only with the consent of 
                        the Secretary, and
                            (ii) shall apply to the taxpayer making 
                        such election and any other taxpayer under 
                        common control with the taxpayer (within the 
                        meaning of subparagraphs (A) and (B) of section 
                        41(f)(1) of such Code) at any time after 
                        November 22, 1991, and on or before the date on 
                        which such election is made.
            (3) Elective binding contract exception.--
                    (A) In general.--The amendments made by this 
                section shall not apply to any acquisition of property 
                by the taxpayer if--
                            (i) such acquisition is pursuant to a 
                        written binding contract in effect on the date 
                        of the enactment of this Act and at all times 
                        thereafter before such acquisition,
                            (ii) an election under paragraph (2) does 
                        not apply to the taxpayer, and
                            (iii) the taxpayer makes an election under 
                        this paragraph with respect to such contract.
                    (B) Election.--An election under this paragraph 
                shall be made at such time and in such manner as the 
                Secretary of the Treasury or his delegate shall 
                prescribe. Such an election, once made--
                            (i) may be revoked only with the consent of 
                        the Secretary, and
                            (ii) shall apply to all property acquired 
                        pursuant to the contract with respect to which 
                        such election was made.

SEC. 8262. TREATMENT OF CERTAIN PAYMENTS TO RETIRED OR DECEASED 
              PARTNER.

    (a) Section 736(b) Not To Apply in Certain Cases.--Subsection (b) 
of section 736 (relating to payments for interest in partnership) is 
amended by adding at the end thereof the following new paragraph:
            ``(3) Limitation on application of paragraph (2).--
        Paragraph (2) shall apply only if--
                    ``(A) capital is not a material income-producing 
                factor for the partnership, and
                    ``(B) the retiring or deceased partner was a 
                general partner in the partnership.''
    (b) Limitation on Definition of Unrealized Receivables.--
            (1) In general.--Subsection (c) of section 751 (defining 
        unrealized receivables) is amended--
                    (A) by striking ``sections 731, 736, and 741'' each 
                place they appear and inserting ``, sections 731 and 
                741 (but not for purposes of section 736)'', and
                    (B) by striking ``section 731, 736, or 741'' each 
                place it appears and inserting ``section 731 or 741''.
            (2) Technical amendments.--
                    (A) Subsection (e) of section 751 is amended by 
                striking ``sections 731, 736, and 741'' and inserting 
                ``sections 731 and 741''.
                    (B) Section 736 is amended by striking subsection 
                (c).
    (c) Effective Date.--
            (1) In general.--The amendments made by this section shall 
        apply in the case of partners retiring or dying on or after 
        January 5, 1993.
            (2) Binding contract exception.--The amendments made by 
        this section shall not apply to any partner retiring on or 
        after January 5, 1993, if a written contract to purchase such 
        partner's interest in the partnership was binding on January 4, 
        1993, and at all times thereafter before such purchase.

                   PART VII--MISCELLANEOUS PROVISIONS

SEC. 8271. DENIAL OF DEDUCTION RELATING TO TRAVEL EXPENSES.

    (a) In General.--Section 274(m) (relating to additional limitations 
on travel expenses) is amended by adding at the end thereof the 
following new paragraph:
            ``(3) Travel expenses of spouse, dependent, or others.--No 
        deduction shall be allowed under this chapter (other than 
        section 217) for travel expenses paid or incurred with respect 
        to a spouse, dependent, or other individual accompanying the 
        taxpayer (or an officer or employee of the taxpayer) on 
        business travel, unless--
                    ``(A) the spouse, dependent, or other individual is 
                an employee of the taxpayer,
                    ``(B) the travel of the spouse, dependent, or other 
                individual is for a bona fide business purpose, and
                    ``(C) such expenses would otherwise be deductible 
                by the spouse, dependent, or other individual.''
    (b) Effective Date.--The amendment made by this section shall apply 
to amounts paid or incurred after December 31, 1993.

SEC. 8272. INCREASE IN WITHHOLDING FROM SUPPLEMENTAL WAGE PAYMENTS.

    If an employer elects under Treasury Regulation 31.3402(g)-1 to 
determine the amount to be deducted and withheld from any supplemental 
wage payment by using a flat percentage rate, the rate to be used in 
determining the amount to be so deducted and withheld shall not be less 
than 28 percent. The preceding sentence shall apply to payments made 
after December 31, 1993.

SEC. 8273. EXCISE TAX ON CERTAIN VACCINES MADE PERMANENT.

    (a) Tax.--Subsection (c) of section 4131 (relating to tax on 
certain vaccines) is amended to read as follows:
    ``(c) Application of Section.--The tax imposed by this section 
shall apply--
            ``(1) after December 31, 1987, and before January 1, 1993, 
        and
            ``(2) during periods after the date of the enactment of the 
        Omnibus Budget Reconciliation Act of 1993.''
    (b) Trust Fund.--Paragraph (1) of section 9510(c) (relating to 
expenditures from Vaccine Injury Compensation Trust Fund) is amended by 
striking ``and before October 1, 1992,''.
    (c) Floor Stocks Tax.--
            (1) Imposition of tax.--On any taxable vaccine--
                    (A) which was sold by the manufacturer, producer, 
                or importer before the date of the enactment of this 
                Act,
                    (B) on which no tax was imposed by section 4131 of 
                the Internal Revenue Code of 1986 (or, if such tax was 
                imposed, was credited or refunded), and
                    (C) which is held on such date by any person for 
                sale or use,
        there is hereby imposed a tax in the amount determined under 
        section 4131(b) of such Code.
            (2) Liability for tax and method of payment.--
                    (A) Liability for tax.--The person holding any 
                taxable vaccine to which the tax imposed by paragraph 
                (1) applies shall be liable for such tax.
                    (B) Method of payment.--The tax imposed by 
                paragraph (1) shall be paid in such manner as the 
                Secretary shall prescribe by regulations.
                    (C) Time for payment.--The tax imposed by paragraph 
                (1) shall be paid on or before the last day of the 6th 
                month beginning after the date of the enactment of this 
                Act.
            (3) Definitions.--For purposes of this subsection, terms 
        used in this subsection which are also used in section 4131 of 
        such Code shall have the respective meanings such terms have in 
        such section.
            (4) Other laws applicable.--All provisions of law, 
        including penalties, applicable with respect to the taxes 
        imposed by section 4131 of such Code shall, insofar as 
        applicable and not inconsistent with the provisions of this 
        subsection, apply to the floor stocks taxes imposed by 
        paragraph (1), to the same extent as if such taxes were imposed 
        by such section 4131.

                TITLE IX--COMMITTEE ON FOREIGN RELATIONS

SEC. 9001. DELAY IN COST-OF-LIVING ADJUSTMENTS IN FOREIGN SERVICE 
              RETIREMENT BENEFITS DURING FISCAL YEARS 1994, 1995, AND 
              1996.

    (a) Applicability.--This section shall apply with respect to any 
cost-of-living increase scheduled to take effect under section 826 or 
858 of the Foreign Service Act of 1980 during fiscal year 1994, 1995, 
or 1996.
    (b) Delay in Effective Date of Adjustments.--A cost-of-living 
increase described in subsection (a) shall not take effect until the 
first day of the third calendar month after the date such increase 
would take effect but for this subsection.
    (c) Rule of Construction.--
            (1) Size of cost-of-living adjustment.--Nothing in this 
        section shall be considered to affect the size of the cost-of-
        living adjustment under section 8340(b) or section 8462(b) of 
        title 5, United States Code, in the same fiscal year as a cost-
        of-living increase described in subsection (a).
            (2) Determinations of eligibility.--The delay in the 
        effective date of cost-of-living adjustments under subsection 
        (b) shall not affect any determination relating to eligibility 
        for an annuity increase or the amount of the first increase in 
        an annuity under section 826 or 858 of the Foreign Service Act 
        of 1980.

SEC. 9002. ELIMINATION OF THE ALTERNATIVE-FORM-OF-ANNUITY OPTION UNDER 
              THE FOREIGN SERVICE RETIREMENT AND DISABILITY SYSTEM 
              EXCEPT FOR INDIVIDUALS WITH CRITICAL MEDICAL CONDITIONS.

    (a) In General.--Section 807(e)(1) of the Foreign Service Act of 
1980 (22 U.S.C. 4047(e)(1)) is amended by striking ``a participant 
may,'' and inserting ``any participant who has a life-threatening 
affliction or other critical medical condition may,''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
take effect January 1, 1994.

               TITLE X--COMMITTEE ON GOVERNMENTAL AFFAIRS

                       Subtitle A--Civil Service

SEC. 10001. DELAY IN COST-OF-LIVING ADJUSTMENTS IN FEDERAL EMPLOYEE 
              RETIREMENT BENEFITS DURING FISCAL YEARS 1994, 1995, AND 
              1996.

    (a) Applicability.--This section shall apply with respect to any 
cost-of-living increase scheduled to take effect, during fiscal year 
1994, 1995, or 1996, under--
            (1) section 8340(b) or 8462(b) of title 5, United States 
        Code; or
            (2) section 291 of the Central Intelligence Agency 
        Retirement Act (50 U.S.C. 2131), as set forth in section 802 of 
        the CIARDS Technical Corrections Act of 1992 (Public Law 102-
        496; 106 Stat. 3196).
    (b) Delay in Effective Date of Adjustments.--A cost-of-living 
increase described in subsection (a) shall not take effect until the 
first day of the third calendar month after the date such increase 
would otherwise take effect.
    (c) Rule of Construction.--Nothing in this section shall be 
considered to affect any determination relating to eligibility for an 
annuity increase or the amount of the first increase in an annuity 
under section 8340(b) or (c) or section 8462 (b) or (c) of title 5, 
United States Code, or comparable provisions of law.

SEC. 10002. PERMANENT ELIMINATION OF THE ALTERNATIVE-FORM-OF-ANNUITY 
              OPTION EXCEPT FOR INDIVIDUALS WITH A CRITICAL MEDICAL 
              CONDITION.

    (a) Civil Service Retirement System; Federal Employees' Retirement 
System.--Sections 8343a and 8420a of title 5, United States Code, are 
each amended--
            (1) in subsection (a) by striking ``an employee or Member 
        may,'' and inserting ``any employee or Member who has a life-
        threatening affliction or other critical medical condition 
        may,''; and
            (2) by striking subsection (f).
    (b) Central Intelligence Agency Retirement and Disability System.--
Section 294(a) of the Central Intelligence Agency Retirement Act (50 
U.S.C. 2143(a)), as set forth in section 802 of the CIARDS Technical 
Corrections Act of 1992 (Public Law 102-496; 106 Stat. 3196), is 
amended by striking ``a participant may,'' and inserting ``any 
participant who has a life-threatening affliction or other critical 
medical condition may,''.
    (c) Effective Date.--The amendments made by this section shall 
become effective on October 1, 1995, and shall apply with respect to 
any annuity commencing on or after that date.

SEC. 10003. DISTRICT OF COLUMBIA GOVERNMENT CONTRIBUTIONS FOR CERTAIN 
              EMPLOYEE AND ANNUITANT HEALTH BENEFITS.

    (a) Contributions After 1993.--
            (1) In general.--Section 8906(g) of title 5, United States 
        Code, is amended by adding at the end thereof the following new 
        paragraph:
            ``(3) The Government contributions authorized by this 
        section for health benefits for an annuitant shall be paid by 
        the government of the District of Columbia, in the case of an 
        annuitant whose eligibility for an annuity is based on a 
        separation from service with such government, or who is a 
        survivor of such an annuitant or a survivor of an employee who 
        died while employed by such government.''.
            (2) Effective date.--The amendment made by paragraph (1) 
        shall take effect on October 1, 1993, and shall apply with 
        respect to amounts payable for periods beginning on or after 
        that date.
    (b) Contributions for Period Between 1975 and 1993.--
            (1) In general.--The government of the District of Columbia 
        shall pay into the Employees Health Benefit Fund, as payment 
        for any amounts which would, for the period beginning on 
        January 1, 1975 through September 30, 1993, have been payable 
        under the provisions of section 8906(g)(3) of title 5, United 
        States Code (as added by subsection (a)(1) of this section) if 
        such provision had been in effect as of January 1, 1975, of 
        which--
                    (A) at least 25 percent of the total of such 
                amounts shall be paid no later than January 1, 1994;
                    (B) at least 25 percent of the total of such 
                amounts shall be paid no later than January 1, 1995;
                    (C) at least 25 percent of the total of such 
                amounts shall be paid no later than January 1, 1996; 
                and
                    (D) any remaining balance shall be paid no later 
                than January 1, 1997.
            (2) Prorated payments.--In determining any amount for which 
        the government of the District of Columbia is liable under 
        paragraph (1), the amount of the liability shall be prorated to 
        reflect only that portion of total service which is 
        attributable to civilian service performed (by the former 
        employee of the government of the District of Columbia or by 
        the deceased individual referred to under section 8906 (g)(3) 
        of title 5, United States Code, as the case may be) during the 
        period beginning on January 1, 1975, through September 30, 
        1993, as estimated by the Office of Personnel Management.

                       Subtitle B--Postal Service

SEC. 10101. PAYMENTS TO BE MADE BY THE UNITED STATES POSTAL SERVICE.

    (a) Relating to Corrected Calculations for Past Retirement COLAs.--
In addition to any other payments required under section 8348(m) of 
title 5, United States Code, or any other provision of law, the United 
States Postal Service shall pay into the Civil Service Retirement and 
Disability Fund a total of $693,000,000, of which--
            (1) at least one-third shall be paid not later than 
        September 30, 1996;
            (2) at least two-thirds shall be paid not later than 
        September 30, 1997; and
            (3) any remaining balance shall be paid not later than 
        September 30, 1998.
    (b) Relating to Corrected Calculations for Past Health Benefits.--
In addition to any other payments required under section 8906(g)(2) of 
title 5, United States Code, or any other provision of law, the United 
States Postal Service shall pay into the Employees Health Benefits Fund 
a total of $348,000,000, of which--
            (1) at least one-third shall be paid not later than 
        September 30, 1996;
            (2) at least two-thirds shall be paid not later than 
        September 30, 1997; and
            (3) any remaining balance shall be paid not later than 
        September 30, 1998.

                       Subtitle C--Miscellaneous

SEC. 10201. FEDERAL EMPLOYEES' SURVIVOR ANNUITY IMPROVEMENTS.

    (a) Civil Service Retirement System.--
            (1) Reduction for spousal annuity.--Section 8339(j) of 
        title 5, United States Code, is amended--
                    (A) in paragraph (3)--
                            (i) in the second sentence, by striking out 
                        ``, within such 2-year period,''; and
                            (ii) by striking out the fourth sentence 
                        and inserting in lieu thereof the following: 
                        ``The Office shall, by regulation, provide for 
                        payment of the deposit required under this 
                        paragraph by a reduction in the annuity of the 
                        employee or Member. The reduction shall, to the 
                        extent practicable, be designed so that the 
                        present value of the future reduction is 
                        actuarially equivalent to the deposit required 
                        under this paragraph, except that the total 
                        reductions in the annuity of an employee or 
                        Member to pay deposits required by the 
                        provisions of this paragraph, paragraph (5), or 
                        subsection (k)(2) shall not exceed 25 percent 
                        of the annuity computed under subsections (a) 
                        through (i), (n), and (q), including 
                        adjustments under section 8340. The reduction, 
                        which shall be effective on the same date as 
                        the election under this paragraph, shall be 
                        permanent and unaffected by any future 
                        termination of the entitlement of the former 
                        spouse. Such reduction shall be independent of 
                        and in addition to the reduction required under 
                        the first sentence of this paragraph.''; and
                    (B) in paragraph (5)(C)--
                            (i) in clause (ii), by striking out ``, 
                        within 2 years after the date of the remarriage 
                        or, if later, the death or remarriage of the 
                        former spouse (or of the last such surviving 
                        former spouse),''; and
                            (ii) by amending clause (iii) to read as 
                        follows:
                    ``(iii) The Office shall, by regulation, provide 
                for payment of the deposit required under clause (ii) 
                by a reduction in the annuity of the employee or 
                Member. The reduction shall, to the extent practicable, 
                be designed so that the present value of the future 
                reduction is actuarially equivalent to the deposit 
                required under clause (ii), except that total 
                reductions in the annuity of an employee or Member to 
                pay deposits required by the provisions of this 
                paragraph or paragraph (3) shall not exceed 25 percent 
                of the annuity computed under subsections (a) through 
                (i), (n), and (q), including adjustments under section 
                8340. The reduction required by this clause, which 
                shall be effective on the same date as the election 
                under clause (i), shall be permanent and unaffected by 
                any future termination of the marriage. Such reduction 
                shall be independent of and in addition to the 
                reduction required under clause (i).''.
            (2) Reduction relating to former spouse.--Section 
        8339(k)(2) of title 5, United States Code, is amended--
                    (A) in subparagraph (B)(ii), by striking out 
                ``Within 2 years after the date of the marriage, the'' 
                and inserting in lieu thereof ``The''; and
                    (B) by amending subparagraph (C) to read as 
                follows:
            ``(C) The Office shall, by regulation, provide for payment 
        of the deposit required under subparagraph (B)(ii) by a 
        reduction in the annuity of the employee or Member. The 
        reduction shall, to the extent practicable, be designed so that 
        the present value of the future reduction is actuarially 
        equivalent to the deposit required under subparagraph (B)(ii), 
        except that total reductions in the annuity of an employee or 
        Member to pay deposits required by this subsection or 
        subsection (j)(3) shall not exceed 25 percent of the annuity 
        computed under subsections (a) through (i), (n), and (q), 
        including adjustments under section 8340. The reduction 
        required by this subparagraph, which shall be effective on the 
        same date as the election under subparagraph (A), shall be 
        permanent and unaffected by any future termination of the 
        marriage. Such reduction shall be independent of and in 
        addition to the reduction required under subparagraph (A).''.
            (3) Deposits.--Section 8334(h) of title 5, United States 
        Code, is amended by striking out ``and by section 8339(j)(5)(C) 
        and the last sentence of section 8339(k)(2) of this title''.
    (b) Federal Employees Retirement System.--Section 8418 of title 5, 
United States Code, is amended--
            (1) in subsection (a)(1), by striking out ``, before the 
        expiration of the 2-year period involved,''; and
            (2) by amending subsection (b) to read as follows:
    ``(b) The Office shall, by regulation, provide for payment of the 
deposit required under subsection (a) by a reduction in the annuity of 
the employee or Member. The reduction shall, to the extent practicable, 
be designed so that the present value of the future reduction is 
actuarially equivalent to the deposit required under subsection (a), 
except that the total reductions in the annuity of an employee or 
Member to pay deposits required by this section shall not exceed 25 
percent of the annuity computed under section 8415 or section 8452, 
including adjustments under section 8462. The reduction required by 
this subsection, which shall be effective at the same time as the 
election under section 8416 (b) and (c) or section 8417(b), shall be 
permanent and unaffected by any future termination of the marriage or 
the entitlement of the former spouse. Such reduction shall be 
independent of and in addition to the reduction required under section 
8416 (b) and (c) or section 8417(b).''.
    (c) Effective Date.--
            (1) In general.--The amendments made by this section shall 
        take effect on the first day of the first month beginning 30 
        days after the date of the enactment of this Act and shall 
        apply to all deposits required under section 8339(j) (3) and 
        (5), 8339(k)(2), or 8418 of title 5, United States Code, on 
        which no payment has been made prior to such effective date.
            (2) Partial deposit.--For any deposit required under 
        section 8339(j) (3) and (5), 8339(k)(2), or 8418 of title 5, 
        United States Code, or section 4 (b) and (c) of the Civil 
        Service Retirement Spouse Equity Act of 1984 that has been 
        partially, but not fully, paid before the effective date of 
        this Act, the Office shall by regulation provide for 
        determining the remaining portion of the deposit and for 
        payment of the remaining portion of the deposit by a 
        prospective reduction in the annuity of the employee or Member. 
        The reduction shall be similar to the reductions provided 
        pursuant to the amendments made under this section.

                          TITLE XI--JUDICIARY

SEC. 11001. PATENT AND TRADEMARK FEES.

    Section 10101 of the Omnibus Budget Reconciliation Act of 1990 (35 
U.S.C. 41 note) is amended--
            (1) in subsection (a) by striking ``1995'' and inserting 
        ``1998'';
            (2) in subsection (b)(2) by striking ``1995'' and inserting 
        ``1998''; and
            (3) in subsection (c)--
                    (A) by striking ``through 1995'' and inserting 
                ``through 1998''; and
                    (B) by adding at the end the following:
            ``(6) $111,000,000 in fiscal year 1996.
            ``(7) $115,000,000 in fiscal year 1997.
            ``(8) $119,000,000 in fiscal year 1998.''.

           TITLE XII--COMMITTEE ON LABOR AND HUMAN RESOURCES

                  Subtitle A--Student Loan Provisions

SEC. 12001. SHORT TITLE; REFERENCES.

    (a) Short Title.--This subtitle may be cited as the ``Student Loan 
Reform Act of 1993''.
    (b) References.--References in this subtitle to ``the Act'' are 
references to the Higher Education Act of 1965 (20 U.S.C. 1001 et 
seq.).

             CHAPTER 1--FEDERAL DIRECT STUDENT LOAN PROGRAM

SEC. 12011. FEDERAL DIRECT STUDENT LOAN PROGRAM.

    Part D of title IV (20 U.S.C. 1087a) is amended to read as follows:

             ``PART D--FEDERAL DIRECT STUDENT LOAN PROGRAM

``SEC. 451. PURPOSE; PROGRAM AUTHORIZATION.

    ``(a) Purpose.--It is the purpose of this part--
            ``(1) to simplify the delivery of student loans to 
        borrowers and eliminate borrower confusion;
            ``(2) to provide a variety of repayment plans, including 
        income contingent repayment, to borrowers so that borrowers 
        have flexibility in managing their student loan repayment 
        obligations, and so that those obligations do not foreclose 
        careers in community or public service for those borrowers;
            ``(3) to replace, through an orderly transition, the 
        Federal Family Education Loan Program under part B of this 
        title with the Federal Direct Student Loan Program under this 
        part;
            ``(4) to avoid the unnecessary cost, to taxpayers and 
        borrowers, and administrative complexity associated with the 
        Federal Family Education Loan Program under part B of this 
        title through the use of a direct student loan program; and
            ``(5) to create a more streamlined student loan program 
        that can be managed more effectively at the Federal level.
    ``(b) Program Authority.--There are hereby made available, in 
accordance with the provisions of this part, such sums as may be 
necessary to make loans to all eligible students in attendance at 
participating institutions of higher education selected by the 
Secretary (and the eligible parents of such students), to enable such 
students to pursue their courses of study at such institutions during 
the period beginning July 1, 1994. Such loans shall be made by 
participating institutions, or consortia thereof, that have agreements 
with the Secretary to originate loans, or by alternative originators 
designated by the Secretary to make loans for students in attendance at 
participating institutions (and their parents).

``SEC. 452. FUNDS FOR ORIGINATION OF DIRECT STUDENT LOANS.

    ``(a) In General.--The Secretary shall provide funds for student 
and parent loans under this part--
            ``(1) directly to an institution of higher education that 
        has an agreement with the Secretary under section 454(a) to 
        participate in the direct student loan program under this part 
        and that also has an agreement with the Secretary under section 
        454(b) to originate loans under this part; or
            ``(2) through an alternative originator designated by the 
        Secretary, on the basis of the need and the eligibility of 
        students at each participating institution, and parents of such 
        students, for such loans.
    ``(b) Fees for Origination Services.--
            ``(1) Fees for institutions.--The Secretary shall pay fees 
        to institutions of higher education or consortia thereof having 
        agreements under section 454(b), in an amount established by 
        the Secretary, to assist in meeting the costs of loan 
        origination. Such fees--
                    ``(A) shall be paid by the Secretary based on all 
                the loans made under this part to a particular borrower 
                in the same academic year;
                    ``(B) shall be subject to a sliding scale that 
                decreases the amount of such fees as the number of 
                borrowers increases; and
                    ``(C)(i) for academic year 1994-1995, shall not 
                exceed a program-wide average of $10 per borrower for 
                all the loans made under this part to such borrower in 
                the same academic year; and
                    ``(ii) for succeeding academic years, the Secretary 
                shall establish such average fee pursuant to 
                regulations.
            ``(2) Fees for alternative originators.--The Secretary 
        shall pay fees for loan origination services to alternative 
        originators of loans made under this part in an amount 
        established by the Secretary in accordance with the terms of 
        the contract described in section 456(b) between the Secretary 
        and each such alternative originator.
    ``(c) No Entitlement To Participate or Originate.--No institution 
of higher education shall have a right to participate in the program 
authorized by this part, originate loans, or perform any program 
function under this part. Nothing in this subsection shall be construed 
so as to limit the entitlement of an eligible student attending a 
participating institution (or the eligible parent of such student) to 
borrow under this part nor limit the borrower's contractual right 
against the United States to receive any loan for which the student (or 
parent) is eligible.
    ``(d) Delivery of Loan Funds.--Loan funds shall be paid and 
delivered to an institution by the Secretary prior to the beginning of 
the payment period established by the Secretary in a manner that is 
consistent with payment and delivery of basic grants under subpart 1 of 
part A.

``SEC. 453. SELECTION OF INSTITUTIONS FOR PARTICIPATION AND 
              ORIGINATION.

    ``(a) Phase-In of Program.--
            ``(1) General authority.--The Secretary shall enter into 
        agreements pursuant to section 454(a) with institutions of 
        higher education to participate in the direct student loan 
        program under this part, and agreements pursuant to section 
        454(b) with institutions of higher education, or consortia 
        thereof, to originate loans in such program, for academic years 
        beginning on or after July 1, 1994. Alternative origination 
        services, through which an entity other than the participating 
        institution at which the student is in attendance originates 
        the loan, shall be provided by the Secretary, through 1 or more 
        contracts under section 456(b) or such other means as the 
        Secretary may provide, for students attending participating 
        institutions that do not originate direct student loans under 
        this part. Such agreements for the academic year 1994-1995 
        shall, to the extent feasible, be entered into not later than 
        January 1, 1994.
            ``(2) Transition provisions.--In order to ensure an 
        expeditious but orderly transition from the loan programs under 
        part B of this title to the direct student loan program under 
        this part, the Secretary shall, in the exercise of the 
        Secretary's discretion, determine the number of institutions 
        with which the Secretary whall enter into agreements under 
        subsections (a) and (b) of section 454 for any academic year, 
        except that the Secretary shall exercise such discretion so as 
        to achieve the following goals:
                    ``(A) For academic year 1994-1995, loans made under 
                this part shall represent 5 percent of the new student 
                loan volume for such year.
                    ``(B) For academic year 1995-1996, loans made under 
                this part shall represent 30 percent of the new student 
                loan volume for such year.
                    ``(C) For academic year 1996-1997, loans made under 
                this part shall represent 40 percent of the new student 
                loan volume for such year.
                    ``(D) For academic year 1997-1998 and fiscal year 
                1998, loans made under this part shall represent 50 
                percent of the new student loan volume for such years.
            ``(3) New student loan volume.--For the purpose of this 
        part, the term `new student loan volume' means the estimated 
        sum of all loans that will be made, insured or guaranteed under 
        this part and part B in the year for which the determination is 
        made. The Secretary shall base the estimate described in the 
        preceding sentence on the most recent program data available.
            ``(4) Cash management.--The requirements of sections 3335, 
        6501, and 6503 of title 31, United States Code (the Cash 
        Management Improvement Act of 1990) shall apply to the program 
        under this part only to the extent specified in a schedule 
        established by the Secretaries of Education and the Treasury, 
        except that such schedule shall provide for the application of 
        all such requirements not later than July 1, 1998.
    ``(b) Selection Criteria.--
            ``(1) Application.--Each institution of higher education 
        desiring to participate in the direct student loan program 
        under this part shall submit an application satisfactory to the 
        Secretary containing such information and assurances as the 
        Secretary may require.
            ``(2) Selection criteria.--The Secretary shall select 
        institutions for participation in the direct student loan 
        program under this part, and shall enter into agreements with 
        such institutions under section 454(a), from among those 
        institutions that submit the applications described in 
        paragraph (1), and meet such other eligibility requirements as 
        the Secretary shall prescribe, by, to the extent possible--
                    ``(A)(i) categorizing such institutions according 
                to anticipated loan volume, length of academic program, 
                control of the institution, highest degree offered, 
                size of student enrollment, percentage of students 
                borrowing under part B, geographic location, annual 
                loan volume, default experience and composition of the 
                student body; and
                    ``(ii) beginning in academic year 1995-1996 
                selecting institutions that are reasonably 
                representative of each of the categories described 
                pursuant to clause (i); and
                    ``(B) if the Secretary determines it necessary to 
                carry out the purposes of this part, selecting 
                additional institutions.
    ``(c) Selection Criteria for Origination.--
            ``(1) In general.--The Secretary may enter into a 
        supplemental agreement with an institution (or a consortium of 
        such institutions) that--
                    ``(A) has an agreement under subsection 454(a);
                    ``(B) desires to originate loans under this part; 
                and
                    ``(C) meets the criteria described in paragraph 
                (2).
            ``(2) Transition selection criteria.--For academic year 
        1994-1995, the Secretary may approve an institution to 
        originate loans only if such institution--
                    ``(A) made loans under part E of this title in 
                academic year 1993-1994 and did not exceed the 
                applicable maximum default rate under section 462(g) 
                for the most recent fiscal year for which data are 
                available;
                    ``(B) is not on the reimbursement system of payment 
                for any of the programs under subpart 1 or 3 of part A, 
                part C, or part E;
                    ``(C) is not overdue on program or financial 
                reports or audits required under this title;
                    ``(D) is not subject to an emergency action, or a 
                limitation, suspension, or termination under section 
                428(b)(1)(T), 432(h), or 487(c);
                    ``(E) in the opinion of the Secretary, has not had 
                significant deficiencies identified by a State 
                postsecondary review entity under subpart 1 of part H 
                of this title;
                    ``(F) in the opinion of the Secretary, has not had 
                severe performance deficiencies for any of the programs 
                under this title, including such deficiencies 
                demonstrated by audits or program reviews submitted or 
                conducted during the 5 calendar years immediately 
                preceding the date of application;
                    ``(G) provides an assurance that such institution 
                has no delinquent outstanding debts to the Federal 
                Government, unless such debts are being repaid under or 
                in accordance with a repayment arrangement satisfactory 
                to the Federal Government, or the Secretary in the 
                Secretary's discretion determines that the existence or 
                amount of such debts has not been finally determined by 
                the cognizant Federal agency; and
                    ``(H) meets such other criteria as the Secretary 
                may establish to protect the financial interest of the 
                United States and to promote the purposes of this part.
            ``(3) Regulations governing approval after transaction.--
        For academic year 1995-1996 and subsequent academic years, the 
        Secretary shall promulgate and publish in the Federal Register 
        regulations governing the approval of institutions to originate 
        loans under this part in accordance with section 458(a)(2).
    ``(d) Consortia.--Subject to such requirements as the Secretary may 
prescribe, eligible institutions of higher education with agreements 
under section 454(a) may apply to the Secretary as consortia to 
originate loans under this part for students in attendance at such 
institutions. Such institutions shall each be required to meet the 
requirements of subsection (c) with respect to loan origination.

``SEC. 454. AGREEMENTS WITH INSTITUTIONS.

    ``(a) Participation Agreements.--An agreement with any institution 
of higher education for participation in the direct student loan 
program under this part shall--
            ``(1) provide for the establishment and maintenance of a 
        direct student loan program at the institution under which the 
        institution will--
                    ``(A) identify eligible students who seek student 
                financial assistance at such institution in accordance 
                with section 484;
                    ``(B) estimate the need of each such student as 
                required by part F of this title for an academic year, 
                except that, any loan obtained by a student under this 
                part with the same terms as loans made under section 
                428H (except as otherwise provided in this part), or a 
                loan obtained by a parent under this part with the same 
                terms as loans made under section 428B (except as 
                otherwise provided in this part), or obtained under any 
                State-sponsored or private loan program, may be used to 
                offset the expected family contribution of the student 
                for that year;
                    ``(C) provide a statement that certifies the 
                eligibility of any student to receive a loan under this 
                part that is not in excess of the annual or aggregate 
                limit applicable to such loan, except that the 
                institution may, in exceptional circumstances 
                identified by the Secretary, refuse to certify a 
                statement that permits a student to receive a loan 
                under this part, or certify a loan amount that is less 
                than the student's determination of need (as determined 
                under part F of this title), if the reason for such 
                action is documented and provided in written form to 
                such student;
                    ``(D) set forth a schedule for disbursement of the 
                proceeds of the loan in installments, consistent with 
                the requirements of section 428G (other than subsection 
                (b)(1) of such section); and
                    ``(E) provide timely and accurate information--
                            ``(i) concerning the status of student 
                        borrowers (and students on whose behalf parents 
                        borrow under this part) while such students are 
                        in attendance at the institution and concerning 
                        any new information of which the institution 
                        becomes aware for such students (or their 
                        parents) after such borrowers leave the 
                        institution, to the Secretary for the servicing 
                        and collecting of loans made under this part; 
                        and
                            ``(ii) if the institution does not have an 
                        agreement with the Secretary under subsection 
                        (b), concerning student eligibility and need, 
                        as determined under subparagraphs (A) and (B), 
                        to the Secretary as needed for the alternative 
                        origination of loans to eligible students and 
                        parents in accordance with this part;
            ``(2) provide assurances that the institution will comply 
        with requirements established by the Secretary relating to 
        student loan information with respect to loans made under this 
        part;
            ``(3) provide that the institution accepts responsibility 
        and financial liability stemming from its failure to perform 
        its functions pursuant to the agreement;
            ``(4) provide that students at the institution and their 
        parents (with respect to such students) will be eligible to 
        participate in the programs under part B of this title at the 
        discretion of the Secretary for the period during which such 
        institution participates in the direct student loan program 
        under this part;
            ``(5) provide for the implementation of a quality assurance 
        system, as established by the Secretary and developed in 
        consultation with institutions of higher education, to ensure 
        that the institution is complying with program requirements and 
        meeting program objectives;
            ``(6) provide that the institution will not charge any fees 
        of any kind, however described, to student or parent borrowers 
        for origination activities or the provision of any information 
        necessary for a student or parent to receive a loan under this 
        part, or any benefits associated with such loan; and
            ``(7) include such other provisions as the Secretary 
        determines are necessary to protect the interests of the United 
        States and to promote the purposes of this part.
    ``(b) Origination.--An agreement with any institution of higher 
education, or consortia thereof, for the origination of loans under 
this part shall--
            ``(1) supplement the agreement entered into in accordance 
        with subsection (a);
            ``(2) include provisions established by the Secretary that 
        are similar to the participation agreement provisions described 
        in paragraphs (1)(E)(ii), (2), (3), (4), (5), (6), and (7) of 
        subsection (a), as modified to relate to the origination of 
        loans by the institution or consortium;
            ``(3) provide that the institution or consortium will 
        originate loans to eligible students and parents in accordance 
        with this part; and
            ``(4) provide that the note or evidence of obligation on 
        the loan shall be the property of the Secretary.
    ``(c) Withdrawal and Termination Procedures.--The Secretary shall 
establish procedures by which institutions or consortia may withdraw or 
be terminated from the program under this part.

``SEC. 455. TERMS AND CONDITIONS OF LOANS.

    ``(a) In General.--
            ``(1) Parallel terms, conditions, benefits, and amounts.--
        Unless otherwise specified in this part, loans made to 
        borrowers under this part shall have the same terms, 
        conditions, and benefits as loans made to borrowers under 
        sections 428, 428B, and 428H of this title.
            ``(2) Designation of loans.--Loans made to borrowers under 
        this part that, except as otherwise specified in this part, 
        have the same terms, conditions, and benefits as loans made to 
        borrowers under--
                    ``(A) section 428 shall be known as `Federal Direct 
                Stafford Loans';
                    ``(B) section 428B shall be known as `Federal 
                Direct PLUS Loans'; and
                    ``(C) section 428H shall be known as `Federal 
                Direct Unsubsidized Stafford Loans'.
    ``(b) Interest Rate.--
            ``(1) Rates for fdsl and fdusl.--(A) For Federal Direct 
        Stafford Loans and Federal Direct Unsubsidized Stafford Loans 
        for which the first disbursement is made on or after July 1, 
        1994, the applicable rate of interest shall, during any 12-
        month period beginning on July 1 and ending on June 30, be 
        determined on the preceding June 1 and be equal to--
                    ``(i) the bond equivalent rate of 91-day Treasury 
                bills auctioned at the final auction held prior to such 
                June 1; plus
                    ``(ii) 3.1 percent,
        except that such rate shall not exceed 8.25 percent.
            ``(B)(i) Notwithstanding the provisions of subparagraph 
        (A), with respect to any Federal Direct Stafford Loan or 
        Federal Direct Unsubsidized Stafford Loan for which the first 
        disbursement is made on or after July 1, 1994, the applicable 
        rate of interest for interest which accrues--
                    ``(I) prior to the beginning of the repayment 
                period of the loan; or
                    ``(II) during the period in which principal need 
                not be paid (whether or not such principal is in fact 
                paid) by reason of a provision described in section 
                428(b)(1)(M) or 427(a)(2)(C),
        shall not exceed the rate determined under clause (ii).
            ``(ii) For purposes of clause (i) the rate determined under 
        this clause shall, during any 12-month period beginning on July 
        1 and ending on June 30, be determined on the preceding June 1 
        and be equal to--
                    ``(I) the bond equivalent rate of 91-day Treasury 
                bills auctioned at the final auction prior to such June 
                1; plus
                    ``(II) 2.5 percent,
        except that such rate shall not exceed 8.25 percent.
            ``(2) Rates for fdplus.--For Federal Direct PLUS Loans for 
        which the first disbursement is made on or after July 1, 1994, 
        the applicable rate of interest shall, during any 12-month 
        period beginning on July 1 and ending on June 30, be determined 
        on the preceding June 1 and be equal to--
                    ``(A) the bond equivalent rate of 52-week Treasury 
                bills auctioned at final auction held prior to such 
                June 1; plus
                    ``(B) 3.1 percent,
        except that such rate shall not exceed 9 percent.
            ``(3) Publication.--The Secretary shall determine the 
        applicable rates of interest under this subsection after 
        consultation with the Secretary of Treasury and shall publish 
        such rate in the Federal Register as soon as practicable after 
        the date of determination.
    ``(c) Origination Fee.--The Secretary shall charge the borrower of 
a loan made under this part an origination fee of 4.0 percent of the 
principal amount of the loan.
    ``(d) Repayment Plans.--
            ``(1) Design and selection.--Consistent with criteria 
        established by the Secretary, the Secretary shall offer a 
        borrower of a loan made under this part a variety of plans for 
        repayment of such loan, including principal and interest on the 
        loan. The borrower shall be entitled to accelerate, without 
        penalty, repayment on the borrowers loans under this part. The 
        borrower may choose--
                    ``(A) a standard repayment plan, with a fixed 
                annual repayment amount paid over a fixed period of 
                time;
                    ``(B) an extended repayment plan, with a fixed 
                annual repayment amount paid over an extended period of 
                time, except that the borrower shall annually repay a 
                minimum amount determined by the Secretary in 
                accordance with section 428(b)(1)(L);
                    ``(C) a graduated repayment plan, with annual 
                repayment amounts established at 2 or more graduated 
                levels and paid over a fixed or extended period of 
                time, except that the borrower's scheduled payments 
                shall not be less than 50 percent, nor more than 150 
                percent, of what the amortized payment on the amount 
                owed would be if the loan were repaid under the 
                standard repayment plan; and
                    ``(D) an income contingent repayment plan, with 
                varying annual repayment amounts based on the income of 
                the borrower, paid over an extended period of time, not 
                to exceed 20 years, except that the plan described in 
                this subparagraph shall not be available to the 
                borrower of a Federal Direct PLUS loan.
            ``(2) Selection by secretary.--If a borrower of a loan made 
        under this part does not select a repayment plan described in 
        paragraph (1), the Secretary may provide the borrower with a 
        repayment plan described in subparagraph (A), (B), or (C) of 
        paragraph (1).
            ``(3) Changes in selections.--The borrower of a loan made 
        under this part may change the borrower's selection of a 
        repayment plan under paragraph (1), or the Secretary's 
        selection of a plan for the borrower under paragraph (2), as 
        the case may be, under such terms and conditions as may be 
        established by the Secretary.
            ``(4) Alternative repayment plans.--The Secretary may 
        provide, on a case by case basis, an alternative repayment plan 
        to a borrower of a loan made under this part who demonstrates 
        to the satisfaction of the Secretary that the terms and 
        conditions of the repayment plans available under paragraph (1) 
        are not adequate to accommodate the borrower's exceptional 
        circumstances. In designing such alternative repayment plans, 
        the Secretary shall ensure that such plans do not exceed the 
        cost to the Federal Government, as determined on the basis of 
        the present value of future payments by such borrowers, of 
        loans made using the plans available under paragraph (1).
            ``(5) Repayment after default.--The Secretary may require 
        any borrower who has defaulted on a loan made under this part 
        to--
                    ``(A) pay all reasonable collection costs 
                associated with such loan; and
                    ``(B) repay the loan pursuant to an income 
                contingent repayment plan.
    ``(e) Income Contingent Repayment.--
            ``(1) Information and procedures.--The Secretary may obtain 
        such information as is reasonably necessary regarding the 
        income of a borrower (and the borrower's spouse, if applicable) 
        of a loan made under this part that is, or may be, repaid 
        pursuant to income contingent repayment, for the purpose of 
        determining the annual repayment obligation of the borrower. 
        Return and return information (as defined in section 6103 of 
        the Internal Revenue Code of 1986) may be obtained under the 
        preceding sentence only to the extent authorized by section 
        6103(l)(13) of such Code. The Secretary shall establish 
        procedures for determining the borrower's repayment obligation 
        on that loan for such year, and such other procedures as are 
        necessary to implement effectively income contingent repayment.
            ``(2) Repayment based on adjusted gross income.--A 
        repayment schedule for a loan made under this part and repaid 
        pursuant to income contingent repayment shall be based on the 
        adjusted gross income (as defined in section 62 of the Internal 
        Revenue Code of 1986) of the borrower or, if the borrower is 
        married and files a Federal income tax return jointly with the 
        borrower's spouse, on the adjusted gross income of the borrower 
        and the borrower's spouse.
            ``(3) Additional documents.--A borrower who chooses, or is 
        required, to repay a loan made under this part pursuant to 
        income contingent repayment, and for whom adjusted gross income 
        is unavailable or does not reasonably reflect the borrower's 
        current income, shall provide to the Secretary other 
        documentation of income satisfactory to the Secretary, which 
        documentation the Secretary may use to determine an appropriate 
        repayment schedule.
            ``(4) Repayment schedules.--Income contingent repayment 
        schedules shall be established by regulations promulgated by 
        the Secretary and shall require payments that vary in relation 
        to the appropriate portion of the annual income of the borrower 
        (and the borrower's spouse, if applicable) as determined by the 
        Secretary.
            ``(5) Calculation of balance due.--The balance due on a 
        loan made under this part that is repaid pursuant to income 
        contingent repayment shall equal the unpaid principal amount of 
        the loan, any accrued interest, and any fees, such as late 
        charges, assessed on such loan. The Secretary may promulgate 
        regulations limiting the amount of interest that may be 
        capitalized on such loan, and the timing of any such 
        capitalization.
            ``(6) Notification to borrowers.--The Secretary shall 
        establish procedures under which a borrower of a loan made 
        under this part who chooses or is required to repay such loan 
        pursuant to income contingent repayment is notified of the 
        terms and conditions of such plan, including notification of 
        such borrower--
                    ``(A) that the Internal Revenue Service will 
                disclose to the Secretary tax return information as 
                authorized under section 6103(l)(13) of the Internal 
                Revenue Code of 1986; and
                    ``(B) that if a borrower considers that special 
                circumstances, such as a loss of employment by the 
                borrower or the borrower's spouse, warrant an 
                adjustment in the borrower's loan repayment as 
                determined using the information described in 
                subparagraph (A), or the alternative documentation 
                described in paragraph (3), the borrower may contact 
                the Secretary, who shall determine whether such 
                adjustment is appropriate, in accordance with criteria 
                established by the Secretary.
    ``(f) Deferment.--
            ``(1) Effect on principal and interest.--A borrower of a 
        loan made under this part who meets the requirements described 
        in paragraph (2) shall be eligible for a deferment, during 
        which periodic installments of principal need not be paid, and 
        interest--
                    ``(A) shall not accrue, in the case of a Federal 
                Direct Stafford Loan or a Federal Direct Consolidation 
                Loan that consolidated only Federal Direct Stafford 
                Loans, or a combination of such loans and Federal 
                Stafford Loans for which the student borrower received 
                an interest subsidy under section 428; or
                    ``(B) shall accrue and be capitalized or paid by 
                the borrower, in the case of a Federal Direct PLUS 
                Loan, a Federal Direct Unsubsidized Stafford Loan, or a 
                Federal Direct Consolidation Loan other than loans 
                described in subparagraph (A).
            ``(2) Eligibility.--A borrower of a loan made under this 
        part shall be eligible for a deferment during any period--
                    ``(A) during which the borrower--
                            ``(i) is carrying at least one-half the 
                        normal full-time work load for the course of 
                        study that the borrower is pursuing, as 
                        determined by the eligible institution (as such 
                        term is defined in section 435) the borrower is 
                        attending; or
                            ``(ii) is pursuing a course of study 
                        pursuant to a graduate fellowship program 
                        approved by the Secretary, or pursuant to a 
                        rehabilitation training program for individuals 
                        with disabilities approved by the Secretary,
                except that no borrower shall be eligible for a 
                deferment under this subparagraph, or a loan made under 
                this part (other than a Federal Direct PLUS Loan or a 
                Federal Direct Consolidation Loan), while serving in a 
                medical internship or residency program;
                    ``(B) not in excess of 3 years during which the 
                borrower is seeking and unable to find full-time 
                employment;
                    ``(C) not in excess of 3 years during which the 
                Secretary determines, in accordance with regulations 
                prescribed under section 435(o), that the borrower has 
                experienced or will experience an economic hardship, 
                regardless of the reason for such hardship.
    ``(g) Federal Direct Consolidation Loans.--A borrower of a loan 
made under this part may consolidate such loan with the loans described 
in section 428C(a)(4) and section 428C(d)(1)(C) only under such terms 
and conditions as the Secretary shall establish pursuant to regulations 
promulgated under this part. Loans made under this subsection shall be 
known as `Federal Direct Consolidation Loans'.
    ``(h) Borrower Defenses.--Notwithstanding any other provision of 
law, the Secretary shall specify in regulations (except as authorized 
under section 458(a)), which acts or omissions of an institution of 
higher education a borrower may assert as a defense to repayment of a 
loan made under this part, except that in no event may a borrower 
recover from the Secretary, in any action arising from or relating to a 
loan made under this part, an amount in excess of the amount such 
borrower has repaid on such loan.
    ``(i) Optically Imaged Documents.--Records maintained in accordance 
with section 484A(c) may be used in any proceeding, as permitted 
pursuant to section 484A(c), with respect to a loan made under this 
part.
    ``(j) Nondischargeability in Bankruptcy.--Notwithstanding any other 
provision of law, a loan made under this part shall not be 
dischargeable in any Federal or State bankruptcy proceeding.
    ``(k) Loan Application and Promissory Note.--The common financial 
reporting form required in 483(a)(1) shall constitute the application 
for loans made under this part. The Secretary shall develop, print, and 
distribute to participating institutions a standard promissory note and 
loan disclosure form.
    ``(l) Loan Disbursement.--
            ``(1) In general.--Payments of loan proceeds to students 
        under this part shall be made by crediting the student's 
        account for tuition and fees, and, in the case of 
        institutionally owned housing, room and board. The student may 
        elect to have the institution provide other such goods and 
        services by crediting the student's account. Loan proceeds that 
        remain after the application of the previous sentences shall be 
        delivered to the borrower in accordance with section 427(a)(3).
            ``(2) Payment periods.--The Secretary shall establish 
        periods for the payments described in paragraph (2) in a manner 
        that is consistent with payment of basic grants under subpart 1 
        of part A.
    ``(m) Fiscal Control and Fund Accountability.--
            ``(1) In general.--(A) An institution shall maintain 
        financial records in a manner consistent with records 
        maintained for other programs under title IV.
            ``(B) An institution may maintain loan funds under this 
        part in the same account as other Federal student financial 
        assistance.
            ``(2) Payments; refunds; enrollment status.--Payments, 
        refunds and enrollment status shall be reconciled in a manner 
        and schedule that is consistent with the manner and schedule 
        set forth for the quarterly submission of a payment summary 
        report required of institutions participating in the program 
        assisted under subpart 1 of part A.
            ``(3) Transaction histories.--All transaction histories 
        under this part shall be maintained using the same system 
        designated by the Secretary for the provision of basic grants 
        under subpart 1 of part A.
    ``(n) Entitlement Provision.--Except as provided in section 
454(a)(1)(C), an eligible student in attendance at a participating 
institution (or a parent borrower) shall have a contractual right 
against the United States to receive any loan under this part for which 
such student (or parent) is eligible.

``SEC. 456. CONTRACTS.

    ``(a) Contracts for Supplies and Services.--
            ``(1) In general.--The Secretary may award 1 or more 
        contracts for services and supplies described in subsection 
        (b). The entities with which the Secretary may enter into such 
        contracts shall include entities which the Secretary determines 
        are qualified to provide such services and supplies and will 
        comply with the procedures applicable to the award of such 
        contracts. In the case of awarding contracts for the servicing 
        of loans under this part, the Secretary shall only enter into 
        contracts with entities that have extensive experience and a 
        demonstrated record in loan servicing and collection.
            ``(2) Exemption.--The Secretary may award, through June 30, 
        1998, contracts under this section without regard to the 
        requirements in section 303 of the Federal Property and 
        Administrative Services Act of 1949, section 18 of the Office 
        of Federal Procurement Policy Act, and section 8(e) of the 
        Small Business Act, and the corresponding requirements of the 
        Federal Acquisition Regulations, if the Secretary determines, 
        on a case-by-case basis, that exemption from such requirements 
        is in the public interest and necessary for the orderly 
        transition from the loan programs under part B to the direct 
        student loan program under this part.
            ``(3) Application of requirements.--On and after July 1, 
        1998, all statutory and regulatory requirements described in 
        paragraph (2) shall apply to the award of a contract under this 
        section.
    ``(b) Contracts for Origination, Servicing, and Data Systems.--The 
Secretary may enter into 1 or more contracts for--
            ``(1) the alternative origination of loans to students 
        attending institutions with agreements to participate in the 
        program under this part (or their parents), if such 
        institutions do not have agreements with the Secretary under 
        section 454(b);
            ``(2) the servicing and collection of loans made under this 
        part;
            ``(3) the establishment and operation of 1 or more data 
        systems for the maintenance of records on all loans made under 
        this part;
            ``(4) services to assist in the orderly transition from the 
        loan programs under part B to the direct student loan program 
        under this part; and
            ``(5) such other aspects of the direct student loan program 
        as the Secretary determines are necessary to ensure the 
        successful operation of the program.

``SEC. 457. PLAN FOR IRS PARTICIPATION AND OTHER REPAYMENT OPTIONS.

    ``(a) In General.--The Secretaries of Education and the Treasury 
shall, within 6 months of the date of enactment of this part, submit a 
plan to the President that--
            ``(1) provides for--
                    ``(A) repayment of loans made under this part 
                through wage withholding by the Internal Revenue 
                Service;
                    ``(B) procedures for the resolution of disputes 
                through the Secretary of Education; and
                    ``(C) an alternate system of fees and penalties, 
                which shall not include the seizure of real property, 
                by the Internal Revenue Service for the nonpayment of 
                amounts due; and
            ``(2) evaluates the feasibility of other wage-withholding 
        repayment options for such loans.
    ``(b) Presidential Determination.--If the President determines that 
the implementation of 1 or more repayment options contained in the plan 
described in subsection (a) would further the purposes of this part, 
the Secretaries of Education and the Treasury shall be authorized to 
take such actions as are reasonable and necessary to implement such 
repayment options, including entering into an agreement pursuant to 
section 6306 of the Internal Revenue Code of 1986.
    ``(c) Funding.--The Secretary of Education may use such amounts as 
the Secretary of Education determines necessary from the funds made 
available under section 460 to implement the repayment options selected 
by the President under subsection (b) and shall make available to the 
Secretary of the Treasury such amounts from the funds made available 
under section 460 as the Secretaries determine to be necessary to 
implement the repayment options carried out by the Internal Revenue 
Service.

``SEC. 458. SECRETARIAL ACTIVITIES.

    ``(a) Regulatory Activities.--
            ``(1) Notice in lieu of regulations for first year of 
        program.--The Secretary shall publish in the Federal Register 
        whatever standards, criteria, and procedures, consistent with 
        the provisions of this part, that the Secretary, in 
        consultation with members of the higher education community, 
        determine are reasonable and necessary to the successful 
        implementation of the direct student loan program under this 
        part in academic year 1994-1995. Section 431 of the General 
        Education Provisions Act shall not apply to the publication of 
        such standards, criteria, and procedures.
            ``(2) Negotiated rulemaking.--Beginning with academic year 
        1995-1996, all standards, criteria, procedures and regulations 
        implementing this part shall be subject to negotiated 
        rulemaking, including all such standards, criteria, procedures 
        and regulations promulgated from the date of enactment of this 
        part.
    ``(b) Closing Date for Applications From Institutions.--The 
Secretary shall establish a date not later than October 1, 1993, as the 
closing date for receiving applications from institutions of higher 
education desiring to participate in the direct loan program under this 
part in academic year 1994-1995.
    ``(c) Publication of List of Participating Institutions and Control 
Group.--Not later than January 1, 1994, the Secretary shall publish in 
the Federal Register a list of the institutions of higher education 
selected to participate in the direct loan program under this part in 
academic year 1994-1995.

``SEC. 459. REPORTS.

    ``(a) Annual Reports.--The Secretary shall submit to the Congress 
not later than July 1, 1994, and each July 1 for the 4 succeeding years 
an annual report describing the progress and status of the direct loan 
program.
    ``(b) Research, Demonstration, and Evaluation.--The Secretary may 
use a portion of the funds made available pursuant to section 460 for 
research on, or the demonstration or evaluation of, any aspects of the 
program authorized by this part, including flexible repayment plans.
    ``(c) GAO Interim Final Report.--The Comptroller General shall 
submit to the Congress not later than January 1, 1997, an interim final 
report evaluating the experience of the Department of Education, the 
participating institutions of higher education, students, and parents 
with respect to the direct student loan program. The report shall 
include--
            ``(1) the administrative costs, including costs per loan, 
        incurred by participating institutions of higher education in 
        administering the direct student loan program;
            ``(2) the administrative costs, including costs per loan, 
        incurred by the Department of Education and its contractors in 
        carrying out its responsibilities, including the costs of 
        origination, data systems, servicing, and collection;
            ``(3) an evaluation of the effectiveness of the direct 
        student loan program in providing services to students and 
        parents, including loan application, loan origination, student 
        financial aid packaging, tracking of student status, 
        responsiveness to student inquiries and processing of 
        deferments, forbearances, and repayments;
            ``(4) the frequency and cost of borrower delinquency and 
        default under the direct student loan program and losses 
        incurred by institutions of higher education and servicers, 
        including losses caused by improper origination or servicing of 
        loans;
            ``(5) the timeliness of capital availability to 
        institutions of higher education and of loans to students and 
        parents and the cost of loan capital;
            ``(6) an evaluation of the effectiveness of the income 
        contingent repayment option;
            ``(7) a comparison of the experience of institutions of 
        higher education, students, and parents participating in direct 
        student loan program with the experience of institutions, 
        students, and parents in the control group described in 
        subsection (e) with respect to the subjects indicated in 
        paragraphs (1) through (6) of this subsection;
            ``(8) an evaluation of the administrative performance of 
        the Department;
            ``(9) an analysis of the reasons institutions selected by 
        the Secretary to participate in the direct student loan program 
        chose not to participate and the reasons institutions withdrew 
        or were terminated from such program;
            ``(10) an analysis of the experience of borrowers with 
        loans under both this part and part B and recommendations for 
        the most effective repayment procedures for such borrowers;
            ``(11) a comparison of the cost of loan capital for loans 
        for the direct student loan program with the cost of loan 
        capital for the comparable programs in part B of this title;
            ``(12) an analysis, where practicable, of the experience of 
        institutions which participate as part of a consortia; and
            ``(13) recommendations for modifications, continuation, 
        expansion, suspension, or termination of the direct student 
        loan program or replacement of all or some of the programs 
        authorized by part B.
    ``(d) GAO Final Report.--The Comptroller General shall submit to 
the Congress not later than May 1, 1998, a final report evaluating the 
experience of the Department of Education, the participating 
institutions of higher education, and students with respect to the 
direct student loan program. The report shall include the same matters 
provided for in subsection (c) of this section.
    ``(e) Control Group.--To assist the Comptroller General in 
preparing the reports required by subsections (c) and (d) of this 
section, the Secretary shall select a control group of institutions of 
higher education, which represent a cross-section of all institutions 
of higher education participating in part B of this title and which is 
comparable to the cross-section of institutions of higher education 
selected for participating in the direct student loan program. The 
Secretary shall select the control groups in the same manner that the 
institutions of higher education are selected to participate in the 
direct student loan program.
    ``(f) Treatment of Costs.--In reporting with respect to costs in 
the reports required by subsections (c) and (d) of this section, the 
Comptroller General shall report separately the nonrecurrent costs such 
as start-up costs associated with the direct student loan program, the 
administrative costs incurred by institutions of higher education in 
providing information to enable the Comptroller General to prepare the 
reports required by subsections (c) and (d) of this section and the 
normal costs of operating the direct student loan program.

``SEC. 460. FUNDS FOR ADMINISTRATIVE EXPENSES.

    ``(a) In General.--In each fiscal year beginning with fiscal year 
1994, there shall be available to the Secretary of Education from funds 
not otherwise appropriated, funds to be obligated for administrative 
costs under this part, including the costs of the transition from the 
loan programs under part B to the direct student loan program under 
this part and transition support for the expenses of guaranty agencies 
in servicing outstanding loans in their portfolios and in guaranteeing 
new loans, not to exceed $20,000,000 in fiscal year 1994, $70,000,000 
in fiscal year 1995, $170,000,000 in fiscal year 1996, $305,000,000 in 
fiscal year 1997, and $480,000,000 in fiscal year 1998. If in any 
fiscal year, the Secretary determines that additional funds for 
administrative expenses are needed as a result of such transition, or 
the expansion of the direct student loan program under this part, the 
Secretary is authorized to use funds available under this section for 
any succeeding fiscal year for such expenses, except that the total 
expenditures by the Secretary shall not exceed $1,045,000,000 in fiscal 
years 1994 through 1998.
    ``(b) Availability.--Funds made available under subsection (a) 
shall remain available until expended.
    ``(c) Budget Justification.--The Secretary shall include in the 
Department of Education's annual budget justification to Congress a 
detailed description of the specific activities for which the funds 
made available by this section have been used in the prior and current 
years (if applicable), the activities and costs planned for the budget 
year, and the projection of activities and costs for each remaining 
year for which administrative expenses under this section are made 
available.
    ``(d) Notification.--In the event the Secretary finds it necessary 
to use the authority provided to the Secretary under subsection (a) to 
draw funds for administrative expenses from a future year's funds, the 
Secretary shall immediately notify the Committees on Appropriations of 
the Senate and of the House of Representatives, and the Labor and Human 
Resources Committee of the Senate and the Education and Labor Committee 
of the House of Representatives, of such action and explain the reasons 
for such action.

``SEC. 460A. NATIONAL STUDENT LOAN REFORM COMMISSION.

    ``(a) Establishment.--There is hereby established a bipartisan 
commission to be known as the National Student Loan Reform Commission 
(hereafter in this section referred to as the `Commission').
    ``(b) Membership.--
            ``(1) In general.--The Commission shall be composed of 15 
        members appointed by the President with the advice and consent 
        of the Senate who are representative of a broad combination of 
        types of institutions of higher education, of whom at least 8 
        members shall be financial aid administrators.
            ``(2) Period of appointment; vacancies.--Members shall be 
        appointed for the life of the Commission. Any vacancy in the 
        Commission shall not affect its powers, but shall be filled in 
        the same manner as the original appointment.
            ``(3) Initial meeting.--Not later than 30 days after the 
        date on which all members of the Commission have been 
        appointed, the Commission shall hold its first meeting.
            ``(4) Meetings.--The Commission shall meet at the call of 
        the Chairman.
            ``(5) Quorum.--A majority of the members of the Commission 
        shall constitute a quorum, but a lesser number of members may 
        hold hearings.
            ``(6) Chairman and vice chairman.--The Commission shall 
        select a Chairman and Vice Chairman from among its members.
    ``(c) Duties.--The Commission shall--
            ``(1) advise the President and the Congress on the 
        operation of the Federal Direct Student Loan Program and the 
        Federal Family Education Loan Program;
            ``(2) evaluate and report to the Congress regarding such 
        programs on not less than an annual basis; and
            ``(3) not later than January 1, 1997, report to the 
        President and the Congress with final recommendations on the 
        advisability of replacing the Federal Family Education Loan 
        Program with direct lending.
    ``(d) Powers of the Commission.--
            ``(1) Hearings.--The Commission may hold such hearings, sit 
        and act at such times and places, take such testimony, and 
        receive such evidence as the Commission considers advisable to 
        carry out the purposes of this section.
            ``(2) Information from federal agencies.--The Commission 
        may secure directly from any Federal department or agency such 
        information as the Commission considers necessary to carry out 
        the provisions of this section. Upon request of the Chairman of 
        the Commission, the head of such department or agency shall 
        furnish such information to the Commission.
            ``(3) Postal services.--The Commission may use the United 
        States mails in the same manner and under the same conditions 
        as other departments and agencies of the Federal Government.
            ``(4) Gifts.--The Commission may accept, use, and dispose 
        of gifts or donations of services or property.
    ``(e) Commission Personnel Matters.--
            ``(1) Compensation of members.--Each member of the 
        Commission who is not an officer or employee of the Federal 
        Government shall be compensated at a rate equal to the daily 
        equivalent of the annual rate of basic pay prescribed for level 
        IV of the Executive Schedule under section 5315 of title 5, 
        United States Code, for each day (including travel time) during 
        which such member is engaged in the performance of the duties 
        of the Commission. All members of the Commission who are 
        officers or employees of the United States shall serve without 
        compensation in addition to that received for their services as 
        officers or employees of the United States.
            ``(2) Travel expenses.--The members of the Commission shall 
        be allowed travel expenses, including per diem in lieu of 
        subsistence, at rates authorized for employees of agencies 
        under subchapter I of chapter 57 of title 5, United States 
        Code, while away from their homes or regular places of business 
        in the performance of services for the Commission.
            ``(3) Staff.--
                    ``(A) In general.--The Chairman of the Commission 
                may, without regard to the civil service laws and 
                regulations, appoint and terminate an executive 
                director and such other additional personnel as may be 
                necessary to enable the Commission to perform its 
                duties. The employment of an executive director shall 
                be subject to confirmation by the Commission.
                    ``(B) Compensation.--The Chairman of the Commission 
                may fix the compensation of the executive director and 
                other personnel without regard to the provisions of 
                chapter 51 and subchapter III of chapter 53 of title 5, 
                United States Code, relating to classification of 
                positions and General Schedule pay rates, except that 
                the rate of pay for the executive director and other 
                personnel may not exceed the rate payable for level V 
                of the Executive Schedule under section 5316 of such 
                title.
            ``(4) Detail of government employees.--Any Federal 
        Government employee may be detailed to the Commission without 
        reimbursement, and such detail shall be without interruption or 
        loss of civil service status or privilege.
            ``(5) Procurement of temporary and intermittent services.--
        The Chairman of the Commission may procure temporary and 
        intermittent services under section 3109(b) of title 5, United 
        States Code, at rates for individuals which do not exceed the 
        daily equivalent of the annual rate of basic pay prescribed for 
        level V of the Executive Schedule under section 5316 of such 
        title.
            ``(6) Authority to contract.--Subject to the Federal 
        Property and Administrative Services Act of 1949, the 
        Commission is authorized to enter into contracts with Federal 
        and State agencies, private firms, institutions and individuals 
        for the conduct of activities necessary to the discharge of its 
        duties and responsibilities.
            ``(7) Source of administrative support.--Financial and 
        administrative support services (including those related to 
        budget and accounting, financial reporting, payroll, and 
        personnel) shall be provided to the Commission by the General 
        Services Administration (or other organization the Commission 
        determines appropriate) for which payment shall be made in 
        advance or by reimbursement, from funds of the Commission, in 
        such amounts as may be agreed by the Chairman of the Commission 
        and the Administrator of General Services (or head of another 
        organization the Commission determines appropriate).
    ``(f) Termination of the Commission.--The Commission shall 
terminate 18 months after the date on which the Commission submits its 
report under subsection (c)(3).
    ``(g) Funds for Expenses of the Commission.--In each fiscal year 
beginning with fiscal year 1994, there shall be available to the 
Secretary from funds not otherwise appropriated, funds to be obligated 
for the costs of activities assisted under this section, not to exceed 
$2,000,000 in each of the fiscal years 1994, 1995, 1996, 1997 and 
1998.''.

                    CHAPTER 2--STUDENT LOAN SAVINGS

SEC. 12021. SECRETARY'S EQUITABLE SHARE.

    Section 428(c)(6)(A)(ii) of the Act (20 U.S.C. 1078(c)(6)(A)(ii)) 
is amended by striking ``30 percent'' and inserting ``27 percent''.

SEC. 12022. INTEREST RATES.

    Section 427A of the Higher Education Act of 1965 (20 U.S.C. 1077a) 
is amended--
            (1) in subsection (c)(4), by adding at the end the 
        following new subparagraph:
                    ``(E) Notwithstanding subparagraphs (A) and (D) for 
                any loan made pursuant to section 428B for which the 
                first disbursement is made on or after July 1, 1994--
                            ``(i) subparagraph (B) shall be applied by 
                        substituting ``3.1'' for ``3.25''; and
                            ``(ii) the interest rate shall not exceed 9 
                        percent.'';
            (2) by redesignating subsections (f), (g) and (h) as 
        subsections (g), (h) and (j), respectively;
            (3) by adding after subsection (e) the following new 
        subsection:
    ``(f) Interest Rates for New Loans After July 1, 1994.--
            ``(1) In general.--Notwithstanding subsections (a), (b), 
        (d) and (e) of this section, with respect to any loan made, 
        insured, or guaranteed under this part (other than a loan made 
        pursuant to sections 428B and 428C) for which the first 
        disbursement is made on or after July 1, 1994, the applicable 
        rate of interest shall, during any 12-month period beginning on 
        July 1 and ending on June 30, be determined on the preceding 
        June 1 and be equal to--
                    ``(A) the bond equivalent rate of 91-day Treasury 
                bills auctioned at the final auction held prior to such 
                June 1; plus
                    ``(B) 3.10 percent,
        except that such rate shall not exceed 8.25 percent.
            ``(2) Consultation.--The Secretary shall determine the 
        applicable rate of interest under paragraph (1) after 
        consultation with the Secretary of the Treasury and shall 
        publish such rate in the Federal Register as soon as 
        practicable after the date of determination.''; and
            (4) by inserting after subsection (h) (as redesignated in 
        paragraph (2)) the following new subsection:
    ``(i) In-School and Grace Period Interest Rates.--
            ``(1) Applicable rate.--Notwithstanding any other provision 
        of this section, with respect to any loan for which the first 
        disbursement is made on or after October 1, 1993, the 
        applicable rate of interest for interest which accrues--
                    ``(A) prior to the beginning of the repayment 
                period of the loan; or
                    ``(B) during the period in which principal need not 
                be paid (whether or not such principal is in fact paid) 
                by reason of a provision described in section 
                428(b)(1)(M) or 427(a)(2)(C),
        shall not exceed the rate determined under paragraph (2).
            ``(2) Method of calculation.--For purposes of paragraph (1) 
        the rate determined under this paragraph shall, during any 12-
        month period beginning on July 1 and ending on June 30, be 
        determined on the preceding June 1 and be equal to--
                    ``(A) the bond equivalent rate of 91-day Treasury 
                bills auctioned at the final auction prior to such June 
                1; plus
                    ``(B) 2.5 percent,
        except that such rate shall not exceed 8.25 percent.''.

SEC. 12023. LENDER AND STUDENT LOAN FEES.

    Section 438 of the Act (20 U.S.C. 1087-1) is amended--
            (1) in the heading of subsection (c) by inserting ``From 
        Students'' after ``Origination Fees'';
            (2) in subsection (c)--
                    (A) in paragraph (2)--
                            (i) by striking ``428B,'';
                            (ii) by inserting ``, and part D'' after 
                        ``439(o)''; and
                            (iii) by striking ``5 percent'' and 
                        inserting ``3.0 percent'';
                    (B) in paragraph (6), by striking ``5 percent'' and 
                inserting ``3.0 percent'';
            (3) by redesignating subsections (d) and (e) as subsections 
        (e) and (f), respectively; and
            (4) by inserting after subsection (c) the following new 
        subsection:
    ``(d) Loan Fees From Lenders.--
            ``(1) Deduction from interest and special allowance 
        subsidies.--Notwithstanding subsection (b), the total amount of 
        interest and special allowance payable under section 
        428(a)(3)(A) and subsection (b) of this section, respectively, 
        to any holder shall be reduced by the Secretary by a loan fee 
        in an amount determined in accordance with paragraph (2) of 
        this subsection. If the total amount of interest and special 
        allowance payable under section 428(a)(3)(A) and subsection (b) 
        of this section, respectively, is less than the amount of such 
        loan fee, then the Secretary shall deduct such excess amount 
        from subsequent quarters' payments until the total amount has 
        been deducted.
            ``(2) Amount of loan fees.--With respect to any loan under 
        this part (other than loans made under sections 428B, 428C and 
        439(o)) for which a note or other written evidence of the loan 
        was sent or delivered to the borrower for signing on or after 
        October 1, 1993, the amount of the loan fee which shall be 
        deducted under paragraph (1) shall be equal to .50 percent of 
        the principal amount of the loan.
            ``(3) PLUS, consolidation, slma loans.--With respect to any 
        loans made under section 428B, 428C, and 439 on or after 
        October 1, 1993, each eligible lender under this part shall pay 
        to the Secretary a loan fee of .50 percent of the principal 
        amount of the loan.
            ``(4) Distribution of loan fees.--The Secretary shall 
        deposit all fees collected pursuant to paragraph (3) into the 
        insurance fund established in section 431.''.

SEC. 12024. OFFSET FEE.

    Subsection (h) of section 439 of the Act (20 U.S.C. 1087-2(h)) is 
amended by adding at the end the following new paragraph:
            ``(6) Offset fee.--(A) The Association shall pay to the 
        Secretary, on a monthly basis, an offset fee calculated on an 
        annual basis in an amount equal to 0.30 percent of the 
        principal amount of each loan made, insured or guaranteed under 
        this part which the Association holds on or after the date of 
        enactment of this paragraph.
            ``(B) The Secretary shall deposit all fees collected 
        pursuant to subparagraph (A) into the insurance fund 
        established in section 431.''.

SEC. 12025. ELIMINATION OF TAX EXEMPT FLOOR.

    Section 438(b)(2)(B) of the Act (20 U.S.C. 1087-1(b)(2)(B)) is 
amended by adding at the end the following new clause:
            ``(iv) Notwithstanding clauses (i) and (ii), the quarterly 
        rate of the special allowance for holders of loans which are 
        financed with funds obtained by the holder from the issuance of 
        obligations originally issued on or after October 1, 1993, the 
        income from which is excluded from gross income under the 
        Internal Revenue Code of 1986, shall be 85 percent of the 
        quarterly rate of the special allowance established under 
        subparagraph (A). Such rate shall also apply to holders of 
        loans which were made or purchased with funds obtained by the 
        holder from collections or default reimbursements on, or 
        interests or other income pertaining to, eligible loans made or 
        purchased with funds described in the preceding sentence of 
        this subparagraph or from income on the investment of such 
        funds.''.

SEC. 12026. REDUCTION IN INTEREST RATE FOR CONSOLIDATION LOANS; REBATE 
              FEE.

    (a) Amendment.--Section 428C of the Act (20 U.S.C. 1078-3) is 
amended--
            (1) in paragraph (1) of subsection (c)--
                    (A) in subparagraph (A), by striking ``or (C)'';
                    (B) by amending subparagraph (B) to read as 
                follows:
                    ``(B) A consolidation loan made on or after October 
                1, 1993, shall bear interest on the unpaid principal 
                balance of the loan, during any 12-month period 
                beginning on July 1 and ending on June 30, determined 
                on the preceding June 1, which interest shall be equal 
                to--
                            ``(i) the bond equivalent rate of 91-day 
                        Treasury bills auctioned at the final auction 
                        held prior to such June 1; plus
                            ``(ii) 3.10 percent,
                except that such rate shall not exceed 9 percent.''; 
                and
                    (C) by striking subparagraph (C); and
            (2) by adding at the end the following new subsection:
    ``(f) Interest Payment Rebate Fee.--
            ``(1) In general.--Each holder of a consolidation loan 
        under this section shall pay to the Secretary, on a monthly 
        basis and in such manner as the Secretary shall prescribe, a 
        rebate fee calculated on an annual basis equal to 0.70 percent 
        of the principal plus accrued unpaid interest on such loan.
            ``(2) Deposit.--The Secretary shall deposit all fees 
        collected pursuant to subsection (a) into the insurance fund 
        established in section 431.''.
    (b) Enforcement.--Subsection (d) of section 435 of the Act (20 
U.S.C. 1085(d)) is amended--
            (1) in the matter preceding subparagraph (A) of paragraph 
        (1), by striking ``(5)'' and inserting ``(6)''; and
            (2) by adding at the end the following new paragraph:
            ``(6) Rebate fee requirement.--To be an eligible lender 
        under this part, an eligible lender shall pay rebate fees in 
        accordance with section 428C(f).''.

SEC. 12027. INSURANCE PREMIUM.

    (a) Insurance Premium.--Section 428(b)(1)(H) of the Act (20 U.S.C. 
1078(b)(1)(H)) is amended by striking ``3 percent'' and inserting ``1 
percent''.
    (b) Reinsurance Fees.--Section 428(c) of the Act is amended--
            (1) by striking paragraph (9); and
            (2) by redesignating paragraph (10) as paragraph (9).
    (c) Effective Date.--The amendments made by this section shall be 
effective on July 1, 1994.

SEC. 12028. LOAN TRANSFER FEE.

    Section 428(b)(2) of the Act (20 U.S.C. 1078(b)(2)) is amended--
            (1) by striking ``and'' at the end of subparagraph (E);
            (2) by striking the period at the end of subparagraph (F) 
        and inserting ``; and''; and
            (3) by adding at the end thereof the following new 
        subparagraph:
                    ``(G) provide that, if a lender or holder, on or 
                after October 1, 1993, sells, transfers, or assigns a 
                loan under this part, then the transferee shall pay to 
                the Secretary a transfer fee in an amount equal to 0.25 
                percent the principal and accrued unpaid interest of 
                the loan, which transfer fee shall be deposited into 
                the insurance fund established in section 431, except 
                that the provisions of this subparagraph shall not 
                apply to any such sale, transfer or assignment by a 
                lender or holder to such lender's or holder's affiliate 
                or pursuant to--
                            ``(i) a merger or other consolidation 
                        transaction; or
                            ``(ii) a sale or other transfer of all or 
                        any substantial portion of such lender's or 
                        holder's business or student lending 
                        business.''.

SEC. 12029. RISK SHARING.

    (a) Guaranty Agency Reinsurance Percentage.--Section 428(c)(1) of 
the Act (20 U.S.C. 1078(c)(1)) is amended--
            (1) in subparagraph (A), by striking ``100 percent'' and 
        inserting ``98 percent'';
            (2) in subparagraph (B)(i), by striking ``90 percent'' and 
        inserting ``88 percent'';
            (3) in subparagraph (B)(ii), by striking ``80 percent'' and 
        inserting ``78 percent''; and
            (4) by adding at the end the following new subparagraphs:
                    ``(E) Notwithstanding any other provisions of this 
                section, in the case of a loan made pursuant to a 
                lender of last resort program, the Secretary shall 
                apply the provisions of--
                            ``(i) the fourth sentence of subparagraph 
                        (A) by substituting `100 percent' for `98 
                        percent';
                            ``(ii) subparagraph (B)(i) by substituting 
                        `100 percent' for `88 percent'; and
                            ``(iii) subparagraph (B)(ii) by 
                        substituting `100 percent' for `78 percent'.
                    ``(F) Notwithstanding any other provisions of this 
                section, in the case of an outstanding loan transferred 
                to a guaranty agency from another guaranty agency 
                pursuant to a plan approved by the Secretary in 
                response to the insolvency of the latter such guarantee 
                agency, the Secretary shall apply the provision of--
                            ``(i) the fourth sentence of subparagraph 
                        (A) by substituting `100 percent' for `98 
                        percent';
                            ``(ii) subparagraph (B)(i) by substituting 
                        `90 percent' for `88 percent'; and
                            ``(iii) subparagraph (B)(ii) by 
                        substituting `80 percent' for `78 percent'.''.
    (b) Risk Sharing by the Student Loan Marketing Association.--
Section 428(b)(1)(G) of the Act (20 U.S.C. 1078(b)(1)(G)) is amended by 
inserting before the semicolon at the end thereof the following: ``, 
except that for loans held by the Student Loan Marketing Association 
(other than loans made with advances to guaranty agencies pursuant to 
section 439(p)) such percentage shall be 95 percent''.
    (c) Effective Date.--The amendments made by this section shall 
apply to any loan made on or after October 1, 1993.

SEC. 12030. PLUS LOAN AMOUNTS AND DISBURSEMENTS.

    (a) Loan Amounts.--
            (1) Amendment.--Section 428B(b) of the Act (20 U.S.C. 1078-
        2(b)) is amended to read as follows:
    ``(b) Limitations on Amounts of Loans.--
            ``(1) Annual limit.--Subject to paragraph (2), the maximum 
        amount parents may borrow for one student in any academic year 
        or its equivalent (as defined by regulation of the Secretary) 
        is $10,000.
            ``(2) Limitation based on need.--Any loan under this 
        section may be counted as part of the expected family 
        contribution in the determination of need under this title, but 
        no loan may be made to any parent under this section for any 
        academic year in excess of (A) the student's estimated cost of 
        attendance, minus (B) other financial aid as certified by the 
        eligible institution under section 428(a)(2)(A). The annual 
        insurable limit on account of any student shall not be deemed 
        to be exceeded by a line of credit under which actual payments 
        to the borrower will not be made in any year in excess of the 
        annual limit.''.
            (2) Effective date.--The amendment made by paragraph (1) 
        shall be effective for loans made on or after July 1, 1994.
    (b) Multiple Disbursement Required.--
            (1) Amendment.--The matter preceding paragraph (1) of 
        section 428B(c) of the Act (20 U.S.C. 1078-2(c)) is amended by 
        inserting ``shall be disbursed in accordance with the 
        requirements of section 428G and'' after ``under this 
        section''.
            (2) Conforming amendments.--Section 428G(e) of the Act (20 
        U.S.C. 1078-7(e) is amended--
                    (A) by striking ``PLUS, Consolidation,'' and 
                inserting ``Consolidation''; and
                    (B) by striking ``section 428B or 428C'' and 
                inserting ``section 428C''.

                    CHAPTER 3--CONFORMING AMENDMENTS

Subchapter A--Conforming Amendments to the Higher Education Act of 1965

SEC. 12041. PRESERVING LOAN ACCESS.

    (a) Purpose.--It is the purpose of the amendments made by this 
section to provide the Secretary with flexible authority as needed to 
preserve access to student and parent loans under part B of title IV of 
the Act during the transition from the Federal Family Education Loan 
Program under such part to the Federal Direct Student Loan Program 
under part D of such title.
    (b) Advances to Guaranty Agencies for Lender-of-Last-Resort 
Services.--
            (1) Amendment.--Section 428(j) of the Act (20 U.S.C. 
        1078(j)) is amended by adding at the end the following new 
        paragraph:
    ``(4) Advances to guaranty agencies for lender-of-last-resort 
services during transition to direct lending.--(A) In order to ensure 
the availability of loan capital during the transition from the Federal 
Family Education Loan Program under this part to the Federal Direct 
Student Loan Program under part D of this title, the Secretary is 
authorized to provide a guaranty agency with additional advance funds 
in accordance with section 422(c)(7), with such restrictions on the use 
of such funds as are determined appropriate by the Secretary, in order 
to ensure that the guaranty agency will make loans as the lender-of-
last-resort. Such agency shall make such loans in accordance with this 
subsection and the requirements of the Secretary.
    ``(B) Notwithstanding any other provision in this part, a guaranty 
agency serving as a lender-of-last-resort under this paragraph shall be 
paid a fee, established by the Secretary, for making such loans in lieu 
of interest and special allowance subsidies, and shall be required to 
assign such loans to the Secretary on demand. Upon such assignment, the 
portion of the advance represented by the loans assigned shall be 
considered repaid by such guaranty agency.''.
            (2) Conforming amendment.--Section 422(c)(7) of the Act (20 
        U.S.C. 1072(c)(7)) is amended by striking all beginning with 
        ``to a guaranty agency'' through the period and inserting ``to 
        a guaranty agency--
            ``(A) in accordance with section 428(j), in order to ensure 
        that the guaranty agency shall make loans as the lender-of-
        last-resort during the transition from the Federal Family 
        Education Loan Program under this part to the Federal Direct 
        Student Loan Program under part D of this title; or
            ``(B) if the Secretary is seeking to terminate the guaranty 
        agency's agreement, or assuming the guaranty agency's 
        functions, in accordance with section 428(c)(10)(F)(v), in 
        order to assist the agency in meeting its immediate cash needs, 
        ensure the uninterrupted payment of claims, or ensure that the 
        guaranty agency shall make loans as described in subparagraph 
        (A);''.
    (c) Lender Referral Services.--Section 428(e) of the Act (20 U.S.C. 
1078(e)) is amended--
            (1) in paragraph (1)--
                    (A) by amending the paragraph heading to read as 
                follows: ``In general; agreements with guaranty 
                agencies.--'';
                    (B) by inserting the subparagraph designation 
                ``(A)'' immediately before ``The Secretary'';
                    (C) by striking ``in any State'' and inserting 
                ``with which the Secretary has an agreement under 
                subparagraph (B)''; and
                    (D) by adding at the end the following new 
                subparagraph:
                    ``(B)(i) The Secretary may enter into agreements 
                with guaranty agencies that meet standards established 
                by the Secretary to provide lender referral services in 
                geographic areas specified by the Secretary. Such 
                guaranty agencies shall be paid in accordance with 
                paragraph (3) for such services.
                    ``(ii) The Secretary shall publish in the Federal 
                Register whatever standards, criteria, and procedures, 
                consistent with the provisions of this part and part D 
                of this title, the Secretary determines are reasonable 
                and necessary to provide lender referral services under 
                this subsection and ensure loan access to student and 
                parent borrowers during the transition from the loan 
                programs under this part to the direct student loan 
                programs under part D of this title. Section 431 of the 
                General Education Provisions Act shall not apply to the 
                publication of such standards, criteria, and 
                procedures.'';
            (2) in paragraph (2)--
                    (A) in the matter preceding subparagraph (A), by 
                striking ``in a State'' and inserting ``with which the 
                Secretary has an agreement under paragraph (1)(B)'';
                    (B) by amending subparagraph (A) to read as 
                follows:
                    ``(A)(i) such student is either a resident of, or 
                is accepted for enrollment in, or is attending, an 
                eligible institution located in a geographic area for 
                which the Secretary (I) determines that loans are not 
                available to all eligible students, and (II) has 
                entered into an agreement with a guaranty agency under 
                paragraph (1)(B) to provide lender referral services; 
                and'';
            (3) in paragraph (3), by striking ``The'' and inserting 
        ``From funds available for costs of transition under section 
        460 of the Act, the''; and
            (4) by striking paragraph (5).
    (d) Student Loan Marketing Association.--Section 439(q) of the Act 
(20 U.S.C. 1087-2(q)) is amended--
            (1) in paragraph (1)(A)--
                    (A) in the first sentence, by striking ``the 
                Association or its designated agent may begin making 
                loans'' and inserting ``the Association or its 
                designated agent shall, not later than July 1, 1994, 
                begin making loans to such eligible borrowers''; and
                    (B) by striking the second sentence;
            (2) in paragraph (2)(A), by striking ``the Association or 
        its designated agent may'' and inserting ``the Association or 
        its designated agent shall, not later than July 1, 1994,''; and
            (3) in paragraph (3), by striking all beginning with 
        ``that--'' through the period at the end of subparagraph (B) 
        and inserting ``that the conditions that caused the 
        implementation of this subsection have ceased to exist.''.

SEC. 12042. GUARANTY AGENCY RESERVES.

    Section 422 of the Act (20 U.S.C. 1072) is amended by adding at the 
end the following new subsection:
    ``(g) Preservation of Guaranty Agency Reserves.--
            ``(1) Authority to recover funds.--Notwithstanding any 
        other provision of law, the reserve funds of the guaranty 
        agencies, and any assets purchased with such reserve funds, 
        regardless of who holds or controls the reserves or assets, 
        shall be considered to be the property of the United States to 
        be used in the operation of the program authorized by this part 
        or the program authorized by part D of this title. However, the 
        Secretary may not require the return of all reserve funds of a 
        guaranty agency to the Secretary unless the Secretary 
        determines that such return is in the best interest of the 
        operation of the program authorized by this part or the program 
        authorized by part D of this title, or to ensure the proper 
        maintenance of such agency's funds or assets or the orderly 
        termination of the guaranty agency's operations and the 
        liquidation of its assets. The reserves shall be maintained by 
        each guaranty agency to pay program expenses and contingent 
        liabilities, as authorized by the Secretary, except that the 
        Secretary may--
                    ``(A) direct a guaranty agency to return to the 
                Secretary a portion of its reserve fund which the 
                Secretary determines is unnecessary to pay the program 
                expenses and contingent liabilities of the guaranty 
                agency;
                    ``(B) direct the guaranty agency to require the 
                return, to the guaranty agency or to the Secretary, of 
                any reserve funds or assets held by, or under the 
                control of, any other entity, which the Secretary 
                determines are necessary to pay the program expenses 
                and contingent liabilities of the guaranty agency, or 
                which are required for the orderly termination of the 
                guaranty agency's operations and the liquidation of its 
                assets; and
                    ``(C) direct a guaranty agency, or such agency's 
                officers or directors, to cease any activities 
                involving expenditure, use or transfer of the guaranty 
                agency's reserve funds or assets which the Secretary 
                determines is a misapplication, misuse, or improper 
                expenditure of such funds or assets.
            ``(2) Termination provisions in contracts.--(A) To ensure 
        that the funds and assets of the guaranty agency are preserved, 
        any contract with respect to the administration of a guaranty 
        agency's reserve funds, or the administration of any assets 
        purchased or acquired with the reserve funds of the guaranty 
        agency, that is entered into or extended by the guaranty 
        agency, or any other party on behalf of or with the concurrence 
        of the guaranty agency, after the date of enactment of this 
        subsection shall provide that the contract is terminable by the 
        Secretary upon 30 days notice to the contracting parties if the 
        Secretary determines that such contract includes an 
        impermissible transfer of the reserve funds or assets, or is 
        otherwise inconsistent with the terms or purposes of this 
        section.
            ``(B) The Secretary may direct a guaranty agency to suspend 
        or cease activities under any contract entered into by or on 
        behalf of such agency after January 1, 1993, if the Secretary 
        determines that the misuse or improper expenditure of such 
        guaranty agency's funds or assets or such contract provides 
        unnecessary or improper benefits to such agency's officers or 
        directors.
            ``(3) Penalties.--Violation of any direction issued by the 
        Secretary under this subsection may be subject to the penalties 
        described in section 490 of this Act.''.

SEC. 12043. TERMS OF LOANS.

    (a) Amendment.--Section 428 of the Act (20 U.S.C. 1078) is 
amended--
            (1) in subsection (b)(1)(D), by striking ``be subject to'' 
        through the semicolon and inserting ``be subject to income 
        contingent repayment in accordance with subsection (m);''; and
            (2) in subsection (m)--
                    (A) by amending paragraph (1) to read as follows:
            ``(1) Authority of secretary to require.--The Secretary may 
        require any borrower who has defaulted on a loan made under 
        this part that is assigned to the Secretary under subsection 
        (c)(8) to repay that loan under an income contingent repayment 
        plan, the terms and conditions of which shall be established by 
        the Secretary and the same as, or similar to, an income 
        contingent repayment plan established for purposes of part D of 
        this title.''; and
                    (B) by striking paragraphs (2), (3), and (4) and 
                inserting the following new paragraph:
            ``(2) Loans for which income contingent repayment may be 
        required.--A loan made under this part may be required to be 
        repaid under this subsection if the note or other evidence of 
        the loan has been assigned to the Secretary pursuant to 
        subsection (c)(8).''.
    (b) Effective Date.--The amendments made by this section shall be 
effective for loans made in accordance with section 428 for periods of 
instruction beginning on or after July 1, 1993, or made on or after 
July 1, 1993, in the case of loans made in accordance with section 428B 
or 428C of the Act.

SEC. 12044. ASSIGNMENT OF LOANS.

    Section 428(c)(8) of the Act (20 U.S.C. 1078(c)(8)) is amended--
            (1) in the first sentence, by inserting the subparagraph 
        designation ``(A)'' before ``If the'';
            (2) by striking the second and third sentences; and
            (3) by adding at the end the following new subparagraph:
                    ``(B) An orderly transition from the Federal Family 
                Education Loan Program under this part to the Federal 
                Direct Student Loan Program under part D of this title 
                shall be deemed to be in the Federal fiscal interest, 
                and a guaranty agency shall promptly assign loans to 
                the Secretary under this paragraph upon the Secretary's 
                request.''.

SEC. 12045. TERMINATION OF GUARANTY AGENCY AGREEMENTS; ASSUMPTION OF 
              GUARANTY AGENCY FUNCTIONS BY THE SECRETARY.

    Section 428(c)(9) of the Act (as redesignated by section 
12027(b)(2)) (20 U.S.C. 1078(c)(10)) is amended--
            (1) in subparagraph (C), by inserting ``, as appropriate,'' 
        after ``the Secretary shall require'';
            (2) in subparagraph (D)--
                    (A) by inserting the clause designation ``(i)'' 
                before ``Each'';
                    (B) by striking ``Each'' and inserting ``If the 
                Secretary is not seeking to terminate the guaranty 
                agency's agreement under subparagraph (E), or assuming 
                the guaranty agency's functions under subparagraph (F), 
                a'';
                    (C) by adding at the end the following new clause:
                            ``(ii) If the Secretary is seeking to 
                        terminate the guaranty agency's agreement under 
                        subparagraph (E), or assuming the guaranty 
                        agency's functions under subparagraph (F), a 
                        management plan described in subparagraph (C) 
                        shall include the means by which the Secretary 
                        and the guaranty agency shall work together to 
                        ensure the orderly termination of the 
                        operations, and liquidation of the assets, of 
                        the guaranty agency.'';
            (3) in subparagraph (E)--
                    (A) in clause (ii), by striking ``or'' after the 
                semicolon;
                    (B) in clause (iii), by striking the period and 
                inserting a semicolon; and
                    (C) by adding at the end the following new clauses:
                            ``(iv) the Secretary determines that such 
                        action is necessary to protect the Federal 
                        fiscal interest;
                            ``(v) the Secretary determines that such 
                        action is necessary to ensure the continued 
                        availability of loans to student or parent 
                        borrowers; or
                            ``(vi) the Secretary determines that such 
                        action is necessary to ensure an orderly 
                        transition from the loan programs under this 
                        part to the direct student loan programs under 
                        part D of this title.'';
            (4) in subparagraph (F)--
                    (A) in the matter preceding clause (i), by striking 
                ``Except as provided in subparagraph (G), if'' and 
                inserting ``If'';
                    (B) by amending clause (v) to read as follows:
                            ``(v) provide the guaranty agency with 
                        additional advance funds in accordance with 
                        section 422(c)(7), with such restrictions on 
                        the use of such funds as is determined 
                        appropriate by the Secretary, in order to--
                                    ``(I) meet the immediate cash needs 
                                of the guaranty agency;
                                    ``(II) ensure the uninterrupted 
                                payment of claims; or
                                    ``(III) ensure that the guaranty 
                                agency will make loans as the lender-
                                of-last-resort, in accordance with 
                                subsection (j)(4);'';
                    (C) in clause (vi)--
                            (i) by striking ``and to avoid'' and 
                        inserting ``, to avoid'';
                            (ii) by striking the period and inserting a 
                        comma and ``and to ensure an orderly transition 
                        from the loan programs under this part to the 
                        direct student loan programs under part D of 
                        this title.''; and
                            (iii) by redesignating such clause as 
                        clause (vii); and
                    (D) by inserting after clause (v) the following new 
                clause:
                            ``(vi) use all funds and assets of the 
                        guaranty agency to assist in the activities 
                        undertaken in accordance with this subparagraph 
                        and take appropriate action to require the 
                        return, to the guaranty agency or the 
                        Secretary, of any funds or assets provided by 
                        the guaranty agency, under contract or 
                        otherwise, to any person or organization; or'';
            (5) by striking subparagraph (G);
            (6) by redesignating subparagraphs (H), (I), and (J) as 
        subparagraphs (I), (J), and (K), respectively;
            (7) by inserting after subparagraph (F) the following new 
        subparagraphs:
                    ``(G) Notwithstanding any other provision of law, 
                if the Secretary has terminated or is seeking to 
                terminate a guaranty agency's agreement under 
                subparagraph (E), or has assumed a guaranty agency's 
                functions under subparagraph (F)--
                            ``(i) such guaranty agency may not file for 
                        bankruptcy;
                            ``(ii) no State court may issue any order 
                        affecting the Secretary's actions with respect 
                        to such guaranty agency;
                            ``(iii) any contract with respect to the 
                        administration of a guaranty agency's reserve 
                        funds, or the administration of any assets 
                        purchased or acquired with the reserve funds of 
                        the guaranty agency, that is entered into or 
                        extended by the guaranty agency, or any other 
                        party on behalf of or with the concurrence of 
                        the guaranty agency, after the date of 
                        enactment of this subparagraph shall provide 
                        that the contract is terminable by the 
                        Secretary upon 30 days notice to the 
                        contracting parties if the Secretary determines 
                        that such contract includes an impermissible 
                        transfer of the reserve funds or assets, or is 
                        otherwise inconsistent with the terms or 
                        purposes of this section; and
                            ``(iv) no provision of State law shall 
                        apply to the actions of the Secretary in 
                        terminating the operations of a guaranty 
                        agency;
                    ``(H) Notwithstanding any other provision of law, 
                the Secretary's liability for any outstanding 
                liabilities of a guaranty agency (other than 
                outstanding student loan guarantees under this part), 
                the functions of which the Secretary has assumed, shall 
                not exceed the fair market value of the reserves of the 
                guaranty agency, minus any necessary liquidation or 
                other administrative costs.''; and
            (8) in subparagraph (K) (as redesignated by paragraph (5)), 
        by striking all beginning with ``system, together'' through the 
        period and inserting ``system and the progress of the 
        transition from the loan programs under this part to the direct 
        student loan programs under part D of this title.''.

SEC. 12046. CONSOLIDATION LOANS.

    (a) Amendment.--Section 428C of the Act (20 U.S.C. 1078-3) is 
amended--
            (1) in subsection (a)(3)(A), by striking all beginning with 
        ``(A)'' through the period at the end of clause (ii) and 
        inserting ``(A) For the purpose of this section, the term 
        `eligible borrower' means a borrower who, at the time of 
        application for a consolidation loan is in repayment status, or 
        in a grace period preceding repayment, or is a delinquent or 
        defaulted borrower who will reenter repayment through loan 
        consolidation.'';
            (2) in subsection (b)--
                    (A) in paragraph (1)--
                            (i) in subparagraph (A)(ii), by inserting 
                        ``with income-sensitive repayment terms'' after 
                        ``obtain a consolidation loan'';
                            (ii) by redesignating subparagraph (E) as 
                        subparagraph (F); and
                            (iii) by inserting after subparagraph (D) 
                        the following new subparagraph:
                    ``(E) that the lender shall offer an income-
                sensitive repayment schedule, established by the lender 
                in accordance with the regulations promulgated by the 
                Secretary, to the borrower of any consolidation loan 
                made by the lender on or after July 1, 1994; and'';
                    (B) in paragraph (4), by amending subparagraph (C) 
                to read as follows:
                    ``(C)(i) provides that periodic installments of 
                principal need not be paid, but interest shall accrue 
                and be paid in accordance with clause (ii), during any 
                period for which the borrower would be eligible for a 
                deferral under section 428(b)(1)(M), and that any such 
                period shall not be included in determining the 
                repayment schedule pursuant to subsection (c)(2) of 
                this section; and
                    ``(ii) provides that interest shall accrue and be 
                paid--
                            ``(I) by the Secretary, in the case of a 
                        consolidation loan that consolidated only 
                        Federal Stafford Loans for which the student 
                        borrower received an interest subsidy under 
                        section 428: or
                            ``(II) by the borrower, or capitalized, in 
                        the case of a consolidation loan other than a 
                        loan described in subclause (I);''; and
                    (C) by adding at the end the following new 
                paragraph:
            ``(5) Direct loans.--In the event that a borrower is unable 
        to obtain a consolidation loan from a lender with an agreement 
        under subsection (a)(1), the Secretary shall offer any such 
        borrower who applies for it, a direct consolidation loan to be 
        repaid pursuant to income contingent repayment under part D of 
        this title or pursuant to any other repayment provision under 
        this section, except that the Secretary shall not offer such 
        loans if, in the Secretary's judgment, the Department of 
        Education does not have the necessary origination and servicing 
        arrangements in place for such loans.''; and
            (3) in subsection (c)--
                    (A) in paragraph (2)--
                            (i) in subparagraph (A)--
                                    (I) in the matter preceding clause 
                                (i), by striking ``income sensitive 
                                repayment schedules. Such repayment 
                                terms'' and inserting ``income 
                                sensitive repayment schedules, 
                                established by the lender in accordance 
                                with the regulations of the Secretary. 
                                Except as required by such income 
                                sensitive repayment schedules, or by 
                                the terms of repayment pursuant to 
                                income contingent repayment offered by 
                                the Secretary under subsection (b)(5), 
                                such repayment terms'';
                                    (II) by redesignating clauses (i), 
                                (ii), (iii), (iv), and (v) as clauses 
                                (ii), (iii), (iv), (v), and (vi), 
                                respectively; and
                                    (III) by inserting before clause 
                                (ii) (as redesignated by subclause 
                                (II)) the following new clause:
                            ``(i) is less than $7,500, then such 
                        consolidation loan shall be repaid in not more 
                        than 10 years;'';
                            (ii) by striking subparagraph (B); and
                            (iii) by redesignating subparagraph (C) as 
                        subparagraph (B); and
                    (B) in paragraph (3)(A), by inserting ``except as 
                required by the terms of repayment pursuant to income 
                contingent repayment offered by the Secretary under 
                subsection (b)(5),'' before ``the lender''.
    (b) Effective Date.--The amendments made by this section shall be 
effective for loans made on or after July 1, 1994.

SEC. 12047. AUTHORITY TO USE OPTICALLY IMAGED DOCUMENTS.

    (a) General Authority.--Section 484A of the Act (20 U.S.C. 1091a) 
is amended--
            (1) in the section heading, by inserting ``; optically 
        imaged documents'' after ``limitations''; and
            (2) by adding at the end the following new subsection:
    ``(c) Optically Imaged Documents.--
            ``(1) Purpose.--It is the purpose of this subsection to--
                    ``(A) allow the Secretary to use optical imaging 
                technology to store and retrieve documents and records, 
                including promissory notes and repayment agreements, 
                required for the administration of the programs 
                authorized under part D of this title, or for the 
                administration of loans made under part B of this title 
                that have been assigned to the Secretary;
                    ``(B) permit the Secretary to destroy originals of 
                such documents and records, including promissory notes 
                and repayment agreements, after such documents and 
                records have been optically imaged, thereby achieving 
                significant savings in storage and retrieval costs; and
                    ``(C) ensure that the Secretary may introduce as 
                evidence in any proceeding with respect to the programs 
                or loans described in subparagraph (A) optically imaged 
                documents and records, including promissory notes and 
                repayment agreements.
            ``(2) Evidence.--Notwithstanding any other provision of 
        law, an optically imaged copy of any document or record, 
        including a promissory note or repayment agreement, may be 
        introduced as evidence in any proceeding with respect to the 
        programs or loans described in paragraph (1)(A) in any Federal 
        or State court, or other tribunal, and such optically imaged 
        copy shall be admissible in any court or tribunal of the United 
        States or any State as if such copy were the original document 
        or record and have the same force and effect as the original.
            ``(3) Construction.--(A) Nothing in this subsection shall 
        be interpreted to preclude the admissibility of a duplicate of 
        a document or record required for the administration of the 
        programs or loans described in paragraph (1)(A) made by a 
        technology other than optical imaging consistent with the 
        Federal Rules of Evidence and section 1732 of title 28, United 
        States Code, or applicable State law.
            ``(B) Nothing in this subsection shall be interpreted to 
        preclude the admissibility of an optically imaged copy of any 
        document or record in a proceeding outside the scope of this 
        subsection consistent with the Federal Rules of Evidence and 
        section 1732 of title 28 of the United States Code, or 
        applicable State law.''.
    (b) Optically Imaged Documents.--Section 432 of the Act (20 U.S.C. 
1082) is amended by adding at the end the following new subsection:
    ``(q) Optically Imaged Documents.--Records maintained in accordance 
with section 484A(c) may be used in any proceeding, as permitted by 
section 484A(c), with respect to a loan that was made under this part 
and has been assigned to the Secretary.''.
    (c) Conforming Amendment.--Section 487 of the Act (20 U.S.C. 1094) 
is amended by adding at the end the following new subsection:
    ``(f) Use of Optically Imaged Documents.--In any proceeding with 
respect to a program or activity under part D of this title, or with 
respect to a loan made under part B of this title that has been 
assigned to the Secretary, records maintained in accordance with 
section 484A may be used as provided in that section.''.

SEC. 12048. CONSOLIDATION OF PROGRAMS.

    (a) In General.--Section 428H of the Act (20 U.S.C. 1078-9) is 
amended--
            (1) in the matter preceding paragraph (1) of subsection 
        (b), by inserting ``(including graduate and professional 
        students as defined in regulations promulgated by the 
        Secretary)'' after ``484'';
            (2) in subsection (d), by inserting ``, except that--
            ``(1) the maximum annual amount of loans under this section 
        an independent student (or a student whose parents are unable 
        to borrow under the Federal Direct PLUS Loan Program) may 
        borrow in any academic year or its equivalent or in any period 
        of 7 consecutive months, whichever is longer, shall be as 
        follows:
                    ``(A) In the case of such a student attending an 
                eligible institution who has not completed such 
                student's first 2 years of undergraduate study, the 
                amount determined in accordance with section 428(b)(1), 
                plus--
                            ``(i) $4,000, if such student is enrolled 
                        in a program whose length is at least one 
                        academic year in length (as determined under 
                        section 481);
                            ``(ii) $2,500, if such student is enrolled 
                        in a program whose length is less than one 
                        academic year, but at least \2/3\ of such an 
                        academic year; and
                            ``(iii) $1,500, if such student is enrolled 
                        in a program whose length is less than \2/3\, 
                        but at least \1/3\, of such an academic year.
                    ``(B) In the case of such a student attending an 
                eligible institution who has completed the first 2 
                years of undergraduate study but who has not completed 
                the remainder of a program of undergraduate study, the 
                amount determined in accordance with section 428(b)(1), 
                plus--
                            ``(i) $5,000, if such student is enrolled 
                        in a program whose length is at least one 
                        academic year in length (as determined under 
                        section 481);
                            ``(ii) $3,325, if such student is enrolled 
                        in a program whose length is less than one 
                        academic year, but at least \2/3\ of such an 
                        academic year; and
                            ``(iii) $1,675, if such student is enrolled 
                        in a program whose length is less than \2/3\, 
                        but at least \1/3\, of such an academic year.
                    ``(C) In the case of such a student who is a 
                graduate or professional student attending an eligible 
                institution, the amount determined in accordance with 
                section 428(b)(1), plus $10,000; and
            ``(2) the maximum aggregate amount of such loans such 
        student may borrow shall be adjusted to reflect the increased 
        annual limits described in paragraph (1)'' before the period;
            (3) in subsection (e), by adding at the end the following 
        new paragraphs:
            ``(5) Amortization.--The amount of the periodic payment and 
        the repayment schedule for any loan made pursuant to this 
        section shall be established by assuming an interest rate equal 
        to the applicable rate of interest at the time the repayment of 
        the principal amount of the loan commences. At the option of 
        the lender, the note or other written evidence of the loan may 
        require that--
                    ``(A) the amount of the periodic payment will be 
                adjusted annually; or
                    ``(B) the period of repayment of principal will be 
                lengthened or shortened,
        in order to reflect adjustments in interest rates occurring as 
        a consequence of section 427A(c)(4).
            ``(6) Repayment period.--For purposes of calculating the 
        10-year repayment period under section 428(b)(1)(D), such 
        period shall commence at the time the first payment of 
        principal is due from the borrower.''; and
            (4) by adding at the end the following new subsection:
    ``(h) Refinancing.--
            ``(1) Refinancing to secure combined payment.--An eligible 
        lender may at any time consolidate loans held by such lender 
        which are made under this section to a borrower, including 
        loans which were made under sections 428A and 428B as such 
        sections were in effect prior to the date of enactment of the 
        Higher Education Amendments of 1986, under a single repayment 
        schedule which provides for a single principal payment and a 
        single payment of interest, and shall calculate the repayment 
        period for each included loan from the date of the commencement 
        of repayment of the most recent included loan. Unless the 
        consolidated loan is obtained by a borrower who is electing to 
        obtain variable interest under paragraph (2) or (3), such 
        consolidated loan shall bear interest at the weighted average 
        of the rates of all included loans rounded to the nearest whole 
        percent. The extension of any repayment period of an included 
        loan pursuant to this paragraph shall be reported (if required 
        by such loan) to the Secretary or guaranty agency insuring the 
        loan, as the case may be, but no additional insurance premiums 
        shall be payable with respect to any such extension. The 
        extension of the repayment period of any included loan shall 
        not require the formal extension of the promissory note 
        evidencing the included loan or the execution of a new 
        promissory note, but shall be treated as an administrative 
        forbearance of the repayment terms of the included loan.
            ``(2) Refinancing to secure variable interest rate.--An 
        eligible lender may reissue a loan which was made under this 
        section before July 1, 1987, or under sections 428A and 428B as 
        such sections were in effect prior to the date of enactment of 
        the Higher Education Amendments of 1986 in order to permit the 
        borrower to obtain the interest rate provided under section 
        427A(c)(4). A lender offering to reissue a loan or loans for 
        such purpose may charge a borrower an amount not to exceed $100 
        to cover the administrative costs of reissuing such loan or 
        loans, not more than one-half of which shall be paid to the 
        guarantor of the loan being reissued to recover costs of 
        reissuance. Reissuance of a loan under this paragraph shall not 
        affect any insurance applicable with respect to the loan, and 
        no additional insurance fee may be charged to the borrower with 
        respect to the loan.
            ``(3) Refinancing by discharge of previous loan.--A 
        borrower who has applied to an original lender for reissuance 
        of a loan under paragraph (2) and who is denied such reissuance 
        may obtain a loan from another lender for the purpose of 
        discharging the loan from such original lender. A loan made for 
        such purpose--
                    ``(A) shall bear interest at the applicable rate of 
                interest provided under section 427A(c)(4);
                    ``(B) shall not result in the extension of the 
                duration of the note (other than as permitted under 
                subsection (e)(5)(B));
                    ``(C) may be subject to an additional insurance fee 
                but shall not be subject to the administrative cost 
                charge permitted by paragraph (2) of this subsection; 
                and
                    ``(D) shall be applied to discharge the borrower 
                from any remaining obligation to the original lender 
                with respect to the original loan.
            ``(4) Certification in lieu of promissory note 
        presentation.--Each new lender may accept certification from 
        the original lender of the borrower's original loan in lieu of 
        presentation of the original promissory note.
            ``(5) Notification to borrowers of availability of 
        refinancing options.--Each holder of a loan made under this 
        section or under section 428B as in effect prior to the date of 
        enactment of this Act shall, not later than October 1, 1993, in 
        the case of loans made before the date of enactment of this 
        paragraph, notify the borrower of such loan--
                    ``(A) of the refinancing options for which the 
                borrower is eligible under this subsection;
                    ``(B) of those options which will be made available 
                by the holder and of the practical consequences of such 
                options in terms of interest rates and monthly and 
                total payments for a set of loan examples; and
                    ``(C) that, with respect to any option that the 
                holder will not make available, the holder will, to the 
                extent practicable, refer the borrower to an eligible 
                lender offering such option.''.
    (b) Repeal.--
            (1) Repealer.--Section 428A of the Act is repealed.
            (2) Effective date.--The amendment made by paragraph (1) 
        shall be effective on July 1, 1994.
    (c) Terms, Conditions and Benefits.--Notwithstanding the amendments 
made by this section, with respect to loans provided under sections 
428A and 428H of the Higher Education Act of 1965 (as such sections 
existed on the date preceding the date of enactment of this Act) the 
terms, conditions and benefits applicable to such loans under such 
sections shall continue to apply to such loans after the date of 
enactment of this Act.

SEC. 12049. ORIGINATION FEE; INSURANCE PREMIUM.

    Section 428H of the Act (20 U.S.C. 1078-8) is amended--
            (1) in subsection (f)--
                    (A) in the subsection heading, by striking 
                ``Insurance Premium'' and inserting ``Origination 
                Fee'';
                    (B) in the heading of paragraph (1), by striking 
                ``/insurance premium'';
                    (C) in paragraph (1)--
                            (i) by striking ``a combined origination 
                        fee and insurance premium in the amount of 6.5 
                        percent'' and inserting ``an origination fee in 
                        the amount of 3.0 percent''; and
                            (ii) by striking the second sentence;
                    (D) in paragraph (2), by striking ``combined fee 
                and premium'' and inserting ``origination fee'';
                    (E) in paragraph (3), by striking ``combined 
                origination fee and insurance premium'' and inserting 
                ``origination fee'';
                    (F) in paragraph (4)--
                            (i) in the heading, by striking ``insurance 
                        premium'' and inserting ``origination fee'';
                            (ii) by striking ``combined origination fee 
                        and insurance premiums'' and inserting 
                        ``origination fees''; and
                            (iii) by striking ``and premiums to pay'' 
                        and inserting ``to pay''; and
                    (G) in paragraph (5)--
                            (i) in the heading, by inserting 
                        ``origination fee and'' before ``insurance''; 
                        and
                            (ii) in the second sentence--
                                    (I) by striking ``6.5 percent 
                                insurance premium'' and inserting 
                                ``combined origination fee under this 
                                subsection and the insurance premium 
                                under subsection (h)''; and
                                    (II) by inserting ``origination fee 
                                and'' before ``insurance''; and
            (2) by adding at the end the following new subsection:
    ``(h) Insurance Premium.--Each State or nonprofit private 
institution or organization having an agreement with the Secretary 
under section 428(b)(1) may charge a borrower under this section an 
insurance premium equal to not more than 1 percent of the principal 
amount of the loan, if such premium will not be used for incentive 
payments to lenders.''

SEC. 12050. DISBURSEMENTS FOR FIRST YEAR STUDENTS.

    Section 428(G) of the Act (20 U.S.C. 1078-7) is amended--
            (1) in the heading for subsection (b), by striking ``and 
        Endorsement''; and
            (2) in subsection (b)--
                    (A) by striking paragraph (1);
                    (B) in paragraph (2)--
                            (i) by striking ``other than a student 
                        described in paragraph (1)''; and
                            (ii) by striking ``(2) Other students.--''.

                 Subchapter B--Amendments to Other Laws

SEC. 12055. DISCLOSURE OF TAX RETURN INFORMATION.

    (a) Returns and Return Information.--Section 6103(a)(3) of the 
Internal Revenue Code of 1986 (hereafter referred to in this part as 
``the Code'') is amended by striking ``(l)(12)'' and inserting 
``(l)(10), (12), or (13)''.
    (b) Income Contingent Repayment of Student Loans.--Section 6103(l) 
of the Code is amended--
            (1) in paragraph (10)(B), by striking ``officers and 
        employees of an agency receiving return information under 
        subparagraph (A) shall use such information'' and inserting 
        ``return information disclosed under subparagraph (A) may be 
        used by officers and employees of an agency, and by officers, 
        employees, and agents of the Department of Education,''; and
            (2) at the end, by adding a new paragraph to read as 
        follows:
            ``(13) Disclosure of return information to carry out income 
        contingent repayment of student loans.--
                    ``(A) In general.--The Secretary may, upon written 
                request from the Secretary of Education, disclose to 
                officers and employees of the Department of Education 
                return information with respect to a taxpayer who has 
                received a Federal loan under a student loan program 
                and whose loan repayment amounts are based in whole or 
                in part on the taxpayer's income. Such return 
                information shall be limited to--
                            ``(i) taxpayer identity information with 
                        respect to such taxpayer;
                            ``(ii) the filing status of such taxpayer; 
                        and
                            ``(iii) the adjusted gross income of such 
                        taxpayer (as defined in section 62).
                    ``(B) Restriction on use of disclosed 
                information.--Return information disclosed under 
                subparagraph (A) may be used by officers, employees, 
                and agents of the Department of Education only for the 
                purposes of, and to the extent necessary in, 
                establishing an appropriate income contingent repayment 
                level under a student loan program.
                    ``(C) Definitions.--For purposes of this paragraph, 
                the term `student loan program' means the program 
                authorized under part D of title IV of the Higher 
                Education Act of 1965 and includes loans under parts B 
                and E of title IV the Higher Education Act of 1965 that 
                are in default and have been assigned to the Department 
                of Education.''.
    (c) Disclosure of Taxpayer Identity Information.--Section 
6103(m)(4) of the Code is amended--
            (1) in the heading, by inserting ``owe an overpayment on 
        federal pell grants or'' immediately after ``individuals who'';
            (2) in subparagraph (A)--
                    (A) by redesignating clauses (i) and (ii) as 
                subclauses (I) and (II); and
                    (B) by striking ``of any taxpayer who has defaulted 
                on a loan--'' and inserting ``of any taxpayer--
                            ``(i) who owes an overpayment of a grant 
                        awarded to that taxpayer under subpart 1 of 
                        part A of title IV of the Higher Education Act 
                        of 1965, or
                            ``(ii) who has defaulted on a loan--'';
            (3) in subparagraph (B)--
                    (A) in clause (i), by striking ``under part B'' and 
                inserting ``under part B or D''; and
                    (B) in clause (ii), by striking ``under part E'' 
                and inserting ``under subpart 1 of part A, part D, or 
                part E'';
    (d) Procedure and Recordkeeping.--Section 6103(p) of the Code is 
amended--
            (1) in paragraph (3)(A), by striking ``(11), or (12), (m)'' 
        and inserting ``(11), (12), or (13), (m)'';
            (2) in paragraph (4)--
                    (A) in the matter preceding subparagraph (A), by 
                striking ``(10), or (11),'' and inserting ``(10), (11), 
                or (13),'';
                    (B) in subparagraph (F)(ii), by striking ``(11), or 
                (12),'' and inserting ``(11), (12), or (13),''; and
                    (C) in the flush left material after subparagraph 
                (F), by striking ``under subsection (l)(12)(B)'' and 
                inserting ``under paragraph (10), (12)(B), or (13) of 
                subsection (l)''.
    (e) Collection of Payments.--(1) Subchapter A of chapter 64 of the 
Code is amended by adding at the end the following new section:

``SEC. 6306. COLLECTION OF PAYMENTS ON FEDERAL DIRECT STUDENT LOANS.

    ``Upon a determination by the President under section 457(b) of the 
Higher Education Act of 1965 concerning the implementation of a plan 
for the repayment of Federal Direct Stafford Loans through wage 
withholding or other means by the Internal Revenue Service, the 
Secretary of the Treasury may enter into an agreement with the 
Secretary of Education to provide for the collection of payments on 
loans made pursuant to part D of title IV of such Act. The Secretary of 
the Treasury may assess and collect such payments as though they were 
additional income taxes due, and shall establish such procedures and 
conventions as are necessary under such agreement, including--
            ``(1) procedures for the resolution of disputes through the 
        Secretary of Education;
            ``(2) an alternate system of fees and penalties, which 
        system shall not include the seizure of real property by the 
        Internal Revenue Service, for the nonpayment of amounts due; 
        and
            ``(3) provisions related to withholding, payment of 
        estimated tax and allocation of payments.''.
    (2) The table of sections for subchapter A of chapter 64 of the 
Code is amended by adding at the end the following new item:

``Sec. 6306. Collection of payments on Federal direct Stafford 
                            loans.''.
    (f) Unauthorized Disclosure.--Section 7213(a)(2) of the Code is 
amended by striking ``(10) or (12)'' and inserting ``(10), (12), or 
(13),''.
    (g) Effective Date.--The amendments made by this section shall be 
effective during the period beginning on the date of enactment of this 
Act and ending on December 30, 1998.

                   CHAPTER 4--COST SHARING BY STATES

SEC. 12061. COST SHARING BY STATES.

    (a) Amendment.--Section 428 of the Higher Education Act of 1965 (20 
U.S.C. 1078) is amended by adding at the end the following new 
subsection:
    ``(n) State Share of Default Costs.--
            ``(1) In general.--In the case of any State in which there 
        are located any institutions of higher education with cohort 
        default rates that exceed 20 percent, such State shall pay to 
        the Secretary an amount equal to--
                    ``(A) the new loan volume attributable to all 
                institutions in the State for the current fiscal year; 
                multiplied by
                    ``(B) the percentage specified in paragraph (2); 
                multiplied by
                    ``(C) the quotient of--
                            ``(i) the sum of the amounts calculated 
                        under paragraph (3) for each such institution 
                        in the State; divided by
                            ``(ii) the total amount of loan volume 
                        attributable to current and former students of 
                        institutions located in that State entering 
                        repayment in the period used to calculate the 
                        cohort default rate.
            ``(2) Percentage.--For purposes of paragraph (1)(B), the 
        percentage used shall be--
                    ``(A) 12.5 percent for fiscal year 1995;
                    ``(B) 20 percent for fiscal year 1996; and
                    ``(C) 50 percent for fiscal year 1997 and 
                succeeding fiscal years.
            ``(3) Calculation.--For purposes of paragraph (1)(C)(i), 
        the amount shall be determined by calculating for each 
        institution the amount by which--
                    ``(A) the amount of the loans received for 
                attendance by such institution's current and former 
                students who (i) enter repayment during the fiscal year 
                used for the calculation of the cohort default rate, 
                and (ii) default before the end of the following fiscal 
                year; exceeds
                    ``(B) 20 percent of the loans received for 
                attendance by all the current and former students who 
                enter repayment during the fiscal year used for the 
                calculation of the cohort default rate.
            ``(4) Fee.--A State shall charge a fee to an institution of 
        higher education that participates in the program under this 
        part and is located in that State according to a fee structure, 
        approved by the Secretary, that is based on the institution's 
        cohort default rate and the State's risk of loss under this 
        subsection. Such fee structure shall include a process by which 
        an institution with a high cohort default rate is exempt from 
        any fees under this paragraph if such institution demonstrates 
        to the satisfaction of the State that exceptional mitigating 
        circumstances, as determined by the State and approved by the 
        Secretary, contributed to its cohort default rate.''.
    (b) Effective Date.--The amendment made by this section shall be 
effective on October 1, 1994.

                   CHAPTER 5--GENERAL EFFECTIVE DATE

SEC. 12071. GENERAL EFFECTIVE DATE.

    Except as otherwise provided in this subtitle, this subtitle and 
the amendments made by this subtitle shall be effective on October 1, 
1993.

            Subtitle B--Public Health Service Act Provisions

SEC. 12101. HEALTH COVERAGE CLEARINGHOUSE.

    (a) In General.--The Public Health Service Act is amended--
            (1) by redesignating title XXVII (42 U.S.C. 300cc et seq.) 
        as title XXVIII; and
            (2) by inserting after title XXVI the following new title:

              ``TITLE XXVII--HEALTH COVERAGE CLEARINGHOUSE

``SEC. 2701. ESTABLISHMENT OF CLEARINGHOUSE.

    ``(a) In General.--The Secretary shall establish and operate a 
Health Coverage Clearinghouse (in this title referred to as the 
`Clearinghouse') for the purpose of identifying, for beneficiaries 
under a covered health program (as defined in subsection (c)), third 
parties (which may include a covered health program) which may be 
liable for payment for health care items and services furnished to such 
beneficiaries under such program.
    ``(b) Director.--The Clearinghouse shall be headed by a Director 
(in this title referred to as the `Director') appointed by the 
Secretary.
    ``(c) Covered Health Program Defined.--As used in this title, the 
term `covered health program' means any of the following under which 
health care items or services are furnished to a beneficiary--
            ``(1) a migrant health center receiving assistance under 
        section 329;
            ``(2) a community health center receiving assistance under 
        section 330;
            ``(3) an entity receiving assistance under section 340;
            ``(4) an alcohol or drug treatment entity or mental health 
        entity receiving assistance under title V or title XIX;
            ``(5) a family planning project described in section 1001;
            ``(6) an entity receiving assistance under title XXVI;
            ``(7) a black lung clinic authorized under this Act;
            ``(8) a clinic that treats sexually transmitted diseases 
        and is authorized under section 318;
            ``(9) an entity receiving funds to provide primary health 
        services to residents of public housing under section 340A;
            ``(10) a non-Federal entity authorized under the Indian 
        Self-Determination Act;
            ``(11) a tuberculosis clinic receiving assistance under 
        section 317(j)(2) or 317(k)(2); or
            ``(12) any other Federally funded program that provides 
        payments for medical services provided to an individual which 
        are or may be covered under a private health insurance policy.
    ``(d) Other Definitions.--As used in this title:
            ``(1) Administrator.--The term `administrator' means, with 
        respect to a covered health program described in paragraphs (1) 
        through (12) of subsection (c), the individual responsible for 
        the overall administration of the program under which an entity 
        described in such paragraphs receives Federal funds.
            ``(2) Group health plan.--The term `group health plan' has 
        the same meaning given the term `employee welfare benefit plan' 
        in section 3(1) of the Employee Retirement Income Security Act 
        of 1974 (29 U.S.C. 1002(1)).
            ``(3) Qualified employer.--The term `qualified employer' 
        has the same meaning given the term `employer' in section 3(5) 
        of the Employee Retirement Income Security Act of 1974 (29 
        U.S.C. 1002(1)).

``SEC. 2702. PROVISION OF INFORMATION

    ``(a) Request for Information.--An administrator of a covered 
health program may request from the Director information concerning the 
employment and group health coverage of a program beneficiary, the 
beneficiary's spouse, and (if the beneficiary is a dependent child) the 
beneficiary's parents. The Director shall provide such information if 
the request--
            ``(1) is in such form and manner and at such a time as the 
        Director may require, and
            ``(2) specifies the name and tax identification number of 
        the beneficiary.
    ``(b) Data Matching Program.--
            ``(1) Request by director.--The Director shall, at such 
        intervals as the Director finds appropriate, transmit to the 
        Secretary of the Treasury the names and tax identification 
        numbers of beneficiaries with respect to whom a request has 
        been made pursuant to subsection (a), and request that such 
        Secretary disclose to the Secretary of Health and Human 
        Services the following information:
                    ``(A) Whether the beneficiary is married and, if 
                so, the name of the spouse and such spouse's tax 
                identification number.
                    ``(B) If the beneficiary is a dependent child, the 
                name of and tax identification numbers of the 
                beneficiary's parents.
            ``(2) Information from secretary.--The Secretary shall, 
        upon written request from the Director, disclose to the 
        Director, the following information:
                    ``(A) For each individual who is identified as 
                having received wages (as defined in section 3401(a) of 
                the Internal Revenue Code of 1986) from an employer in 
                a previous year--
                            ``(i) the name and taxpayer identification 
                        number of the individual; and
                            ``(ii) the name, address, and taxpayer 
                        identification number of the employer, and 
                        whether such employer is a qualified employer.
                    ``(B) For each individual who is identified as 
                married and whose spouse is identified as having 
                received wages (as defined in section 3401(a) of the 
                Internal Revenue Code of 1986) from an employer in a 
                previous year--
                            ``(i) the name and taxpayer identification 
                        number of the individual and of the 
                        individual's spouse; and
                            ``(ii) the name, address, and taxpayer 
                        identification number of the spouse's employer, 
                        and whether such employer is a qualified 
                        employer.
                    ``(C) For each individual who is identified as a 
                dependent child and whose parent is identified as 
                having received wages (as defined in section 3401(a) of 
                the Internal Revenue Code of 1986) from an employer in 
                a previous year--
                            ``(i) the name and taxpayer identification 
                        number of the individual and of the 
                        individual's parent; and
                            ``(ii) the name, address, and taxpayer 
                        identification number of the parent's employer, 
                        and whether such employer is a qualified 
                        employer.
            ``(3) Information from employers.--The Director shall--
                    ``(A) request, from the employer of each individual 
                (including each spouse) with respect to whom 
                information was received from the Secretary pursuant to 
                paragraph (2), information concerning coverage of such 
                individual (and of the individual's spouse and 
                dependent children) under the employer's group health 
                plan, specifically the period and nature of the 
                coverage, and the name, address, and identifying number 
                of the plan, and
                    ``(B) furnish the information received in response 
                to such request with respect to an individual (or such 
                individual's spouse or dependent children) to the 
                administrator requesting such information pursuant to 
                subsection (a).
        Under no circumstances shall the information requested pertain 
        in any way to the health status of the individual, spouse or 
        dependent children, to the cost of such coverage, or to the 
        beneficiary-specific limitations on such coverage.

``SEC. 2703. REQUIREMENT THAT EMPLOYERS FURNISH INFORMATION.

    ``(a) In General.--An employer shall furnish to the Director the 
information requested pursuant to section 2702(b)(3) within 90 days 
after receipt of such a request.
    ``(b) Civil Money Penalty for Failure to Cooperate.--
            ``(1) In general.--An employer (other than a Federal or 
        other governmental entity) who willfully or repeatedly fails to 
        provide timely and accurate response to a request for 
        information pursuant to section 2702(b)(3) shall be subject, in 
        addition to any other penalties that may be prescribed by law, 
        to a civil money penalty of not to exceed $500 for each 
        individual with respect to whom such a request is made.
            ``(2) Enforcement authority.--In cases of failure to 
        respond to the Director in accordance with subsection (a) to 
        inquiries relating to requests pursuant to section 2702, the 
        provisions of section 353(h)(3), regarding procedures for the 
        imposition of civil money penalties developed by the Secretary, 
        shall apply in the same manner as such provisions apply to 
        penalties or proceedings under section 353.

``SEC. 2704. DATA BANK.

    ``(a) Maintenance of Information.--The Clearinghouse shall maintain 
a data bank, containing information on individuals obtained pursuant to 
this title. Individual information in the data bank shall be retained 
for not less than one year after the date the information was obtained.
    ``(b) Disclosure of Information in Data Bank.--
            ``(1) In general.--The Director is authorized (subject to 
        paragraph (2)) to disclose any information in the data bank 
        established pursuant to subsection (a) with respect to an 
        individual (or an individual's spouse or parent)--
                    ``(A) to the Secretary, administrators, employers, 
                and insurers, to the extent necessary to assist such 
                administrators;
                    ``(B) to Federal and State law enforcement 
                officials responsible for enforcement of civil or 
                criminal laws, in connection with investigations or 
                administrative or judicial law enforcement proceedings 
                relating to a covered health program; and
                    ``(C) for research or statistical purposes.
            ``(2) Restrictions on disclosure.--Information in the data 
        bank may be disclosed under this subsection only for purposes 
        of, and to the extent necessary in, determining the extent to 
        which an individual is covered under any group health plan.
    ``(c) Use of Contractors.--The responsibilities of the 
Clearinghouse under this section may be carried out by contract.
    ``(d) Fees.--The Clearinghouse shall--
            ``(1) establish fees for services under this section 
        designed to cover the full costs to the Clearinghouse of 
        providing such services, and
            ``(2) require the payment of such fees to provide such 
        services.''.
    (b) Conforming Amendments.--
            (1) Sections 2701 through 2714 of the Public Health Service 
        Act (42 U.S.C. 300cc through 300cc-15) are redesignated as 
        sections 2801 through 2814, respectively.
            (2) Sections 465(f) and 497 of such Act (42 U.S.C. 286(f) 
        and 289(f)) are amended by striking out ``2701'' each place 
        that such appears and inserting in lieu thereof ``2801''.
    (c) ERISA Amendment.--Section 101 of the Employee Retirement Income 
Security Act of 1974 (29 U.S.C. 1021) is amended by adding at the end 
thereof the following new subsection:
    ``(g) Compliance With Health Coverage Clearinghouse Requirements.--
In addition to providing the information required under this section, 
the administrator of each employee benefit plan shall comply with the 
requirements of section 2703(a) of the Public Health Service Act. The 
enforcement provisions of this Act shall apply to an administrator that 
fails to comply with this subsection in the same manner as such 
provisions otherwise apply to such administrators under this 
section.''.
    (d) Effective Date.--The amendments made by subsections (a), (b), 
and (c) shall take effect on April 1, 1995.

SEC. 12102. PHYSICIAN OWNERSHIP STUDY.

    (a) Study.--The Secretary of Health and Human Services shall 
conduct a study concerning--
            (1) the desirability of establishing a Federal prohibition 
        on the referral of a patient by a health care provider to an 
        entity in which the provider has a financial interest or from 
        which the provider receives a financial benefit for such 
        referral; and
            (2) different options with respect to the scope of any 
        prohibition recommended under paragraph (1), including options 
        for the application of rules defining prohibited activities 
        that are similar to those implemented under title XVIII of the 
        Social Security Act, and for the methods of enforcing such a 
        prohibition.
    (b) Limitation.--The study conducted under subsection (a) shall be 
restricted to determining the desirability of establishing a 
prohibition of the type described in such subsection with respect to 
patients for whom the health care services involved are not provided or 
paid for under a Federal or State program.
    (c) Report.--Not later than 6 months after the date of enactment of 
this Act, the Secretary of Health and Human Services shall prepare and 
submit to the President and the appropriate committees of Congress a 
report concerning the resul