[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4154 Engrossed in House (EH)]
111th CONGRESS
1st Session
H. R. 4154
_______________________________________________________________________
AN ACT
To amend the Internal Revenue Code of 1986 to repeal the new carryover
basis rules in order to prevent tax increases and the imposition of
compliance burdens on many more estates than would benefit from repeal,
to retain the estate tax with a $3,500,000 exemption, to reinstitute
and update the Pay-As-You-Go requirement of budget neutrality on new
tax and mandatory spending legislation, enforced by the threat of
annual, automatic sequestration, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
DIVISION A--PERMANENT ESTATE TAX RELIEF FOR FAMILIES, FARMERS, AND
SMALL BUSINESSES ACT OF 2009
SECTION 1. SHORT TITLE; TABEL OF CONTENTS.
(a) Short Title.--This division may be cited as the ``Permanent
Estate Tax Relief for Families, Farmers, and Small Businesses Act of
2009''.
(b) Table of Contents.--The table of contents for this Act is as
follows:
DIVISION A--PERMANENT ESTATE TAX RELIEF FOR FAMILIES, FARMERS, AND
SMALL BUSINESSES ACT OF 2009
Sec. 1. Short title; tabel of contents.
Sec. 2. Retention of estate tax; repeal of carryover basis.
Sec. 3. Modifications to estate and gift taxes.
DIVISION B--STATUTORY PAY-AS-YOU-GO ACT OF 2009
Sec. 101. Short Title.
Sec. 102. Purpose.
Sec. 103. Definitions.
Sec. 104. PAYGO estimates and PAYGO scorecards.
Sec. 105. Annual report and sequestration order.
Sec. 106. Calculating a sequestration.
Sec. 107. Current policy adjustment to the CBO estimates.
Sec. 108. Application of BBEDCA.
Sec. 109. Technical corrections.
Sec. 110. Conforming amendments.
Sec. 111. Exempt programs and activities.
SEC. 2. RETENTION OF ESTATE TAX; REPEAL OF CARRYOVER BASIS.
(a) In General.--Subtitles A and E of title V of the Economic
Growth and Tax Relief Reconciliation Act of 2001, and the amendments
made by such subtitles, are hereby repealed; and the Internal Revenue
Code of 1986 shall be applied as if such subtitles, and amendments, had
never been enacted.
(b) Sunset Not To Apply.--Section 901 of the Economic Growth and
Tax Relief Reconciliation Act of 2001 shall not apply to title V of
such Act.
(c) Conforming Amendments.--
(1) Sections 511(d) and 521(b)(2) of the Economic Growth
and Tax Relief Reconciliation Act of 2001, and the amendments
made by such sections, are hereby repealed; and the Internal
Revenue Code of 1986 shall be applied as if such sections, and
amendments, had never been enacted.
(2) Subsection (c) of section 2511 of the Internal Revenue
Code of 1986 is hereby repealed.
SEC. 3. MODIFICATIONS TO ESTATE AND GIFT TAXES.
(a) $3,500,000 Applicable Exclusion Amount.--Subsection (c) of
section 2010 of the Internal Revenue Code of 1986 (relating to
applicable credit amount) is amended by striking all that follows ``the
applicable exclusion amount'' and inserting ``. For purposes of the
preceding sentence, the applicable exclusion amount is $3,500,000.''.
(b) Freeze Maximum Estate and Gift Tax Rates at 45 Percent.--
Subsection (c) of section 2001 of such Code is amended--
(1) by striking paragraph (2);
(2) by striking so much of paragraph (1) as precedes the
table contained therein; and
(3) by striking the last 2 items in the table and inserting
the following new item:
``Over $1,500,000............................ $555,800, plus 45 percent of the excess of such amount over
$1,500,000.''.
(c) Effective Date.--The amendments made by this section shall
apply to estates of decedents dying, and gifts made, after December 31,
2009.
DIVISION B--STATUTORY PAY-AS-YOU-GO ACT OF 2009
SEC. 101. SHORT TITLE.
This division may be cited as the ``Statutory Pay-As-You-Go Act of
2009''.
SEC. 102. PURPOSE.
The purpose of this division is to reestablish a statutory
procedure to enforce a rule of budget neutrality on new revenue and
direct spending legislation.
SEC. 103. DEFINITIONS.
As used in this division--
(1) The term ``BBEDCA'' means the Balanced Budget and
Emergency Deficit Control Act of 1985.
(2) The definitions set forth in section 3 of the
Congressional Budget and Impoundment Control Act of 1974 and in
section 250 of BBEDCA shall apply to this division, except to
the extent that they are specifically modified as follows:
(A) The term ``outyear'' means a fiscal year that
occurs one or more years after the budget year.
(B) In section 250(c)(8)(C), the reference to the
food stamp program shall be deemed to be a reference to
the Supplemental Nutrition Assistance Program.
(3) The term ``AMT'' means the Alternative Minimum Tax for
individuals under sections 55-59 of the Internal Revenue Code
of 1986, the term ``EGTRRA'' means the Economic Growth and Tax
Relief Reconciliation Act of 2001 (Public Law 107-16), and the
term ``JGTRRA'' means the Jobs and Growth Tax Relief and
Reconciliation Act of 2003 (Public Law 108-27).
(4)(A) The term ``budgetary effects'' means the amounts by
which PAYGO legislation changes direct spending or revenues
relative to the baseline and shall be determined on the basis
of estimates included by reference in the PAYGO Act or prepared
under section 104(d)(3), as applicable. Budgetary effects that
increase direct spending or decrease revenues are termed
``costs'' and budgetary effects that increase revenues or
decrease direct spending are termed ``savings''.
(B) For purposes of these definitions, off-budget effects
shall be counted as budgetary effects unless such changes flow
directly from amendments to title II of the Social Security Act
and related provisions of the Internal Revenue Code of 1986 and
debt service effects shall not be counted as budgetary effects.
(C) Solely for purposes of recording entries on a PAYGO
scorecard, provisions in appropriations Acts are also
considered to be budgetary effects for purposes of this
division if such provisions make outyear modifications to
substantive law, except that provisions for which the outlay
effects net to zero over a period consisting of the current
year, the budget year, and the 4 subsequent years shall not be
considered budgetary effects. For purposes of this paragraph,
the term, ``modifications to substantive law'' refers to
changes to or restrictions on entitlement law or other
mandatory spending contained in appropriations Acts,
notwithstanding section 250(c)(8) of BBEDCA. Provisions in
appropriations Acts that are neither outyear modifications to
substantive law nor changes in revenues have no budgetary
effects for purposes of this division.
(D) If a provision is designated as an emergency
requirement under this division and is also designated as an
emergency requirement under the applicable rules of the House
of Representatives, CBO shall not include the cost of such a
provision in its estimate of the PAYGO legislation's budgetary
effects.
(5) The term ``debit'' refers to the net total amount, when
positive, by which costs recorded on the PAYGO scorecards for a
fiscal year exceed savings recorded on those scorecards for
that year.
(6) The term ``entitlement law'' refers to a section of law
which provides entitlement authority.
(7) The term ``PAYGO legislation'' or a ``PAYGO Act''
refers to a bill or joint resolution that affects direct
spending or revenue relative to the baseline. The budgetary
effects of changes in revenues and outyear modifications to
substantive law included in appropriation Acts as defined in
paragraph (4) shall be treated as if they were contained in
PAYGO legislation.
(8) The term ``timing shift'' refers to a delay of the date
on which direct spending would otherwise occur from the ninth
outyear to the tenth outyear or an acceleration of the date on
which revenues would otherwise occur from the tenth outyear to
the ninth outyear.
SEC. 104. PAYGO ESTIMATES AND PAYGO SCORECARDS.
(a) Paygo Estimates.--(1) A PAYGO Act shall include by reference an
estimate of its budgetary effects as determined under section 308(a)(3)
of the Congressional Budget Act of 1974, if timely submitted for
printing in the Congressional Record by the chairs of the Committees on
the Budget of the House of Representatives and the Senate, as
applicable, before the vote on the PAYGO legislation. The Clerk of the
House or the Secretary of the Senate, as applicable, shall also
incorporate by reference such estimate printed in the relevant portion
of the Congressional Record under section 308(a)(3) of the
Congressional Budget Act of 1974 into the enrollment of a PAYGO Act.
Budgetary effects that are not so included shall be determined under
section 104(d)(3).
(2)(A) Section 308(a) of the Congressional Budget Act of 1974 is
amended by adding at the end the following new paragraph:
``(3) CBO paygo estimates.--Before a vote in either House
on a PAYGO Act that, if determined in the affirmative, would
clear such Act for enrollment, the chairs of the Committees on
the Budget of the House and Senate, as applicable, shall
request from the Director of the Congressional Budget Office an
estimate of the budgetary effects of such Act under the
Statutory Pay-As-You-Go Act of 2009. If such an estimate is
timely provided, the chairs of the Committees on the Budget of
the House of Representatives and the Senate shall post such
estimate on their respective committee websites and cause it to
be printed in the Congressional Record under the heading `PAYGO
ESTIMATE'. For purposes of this section, the Director of the
Congressional Budget Office shall not count timing shifts in
his estimates of the budgetary effects of PAYGO legislation (as
defined in section 103 of the Statutory Pay-As-You-Go Act of
2009).''.
(B) The side heading of section 308(a) of the Congressional Budget
Act of 1974 is amended by striking ``Reports on''.
(b) Section 308 of the Congressional Budget Act of 1974 is amended
by adding at the end the following new subsection:
``(d) Scorekeeping Guidelines.--The Director of the Congressional
Budget Office shall provide estimates under this section in accordance
with the scorekeeping guidelines determined under section 252(d)(5) of
the Balanced Budget and Emergency Deficit Control Act of 1985. Upon
agreement, the chairs of the Committees on the Budget of the House of
Representatives and the Senate shall submit updates to such guidelines
for printing in the Congressional Record.''.
(c) Current Policy Adjustments for Certain Legislation.--For
purposes of calculating budgetary effects under this division, CBO
shall adjust its estimates as described below for any provision of
legislation designated as meeting the criteria in subsection (b), (c),
or (d) of section 107 and which the chairman of the Committee on the
Budget of the House of Representatives or the Senate, as applicable,
designates as meeting those criteria. A single piece of legislation may
contain provisions designated as meeting criteria in more than one of
the subsections listed above. For appropriately designated provisions,
CBO shall exclude from its estimates for purposes of this division any
costs of a provision to the extent that those costs, when combined with
all other excluded costs of any other previously designated provisions
of enacted legislation under the same subsection of section 107, do not
exceed the maximum applicable current policy adjustment defined under
the applicable subsection of section 107 for the applicable 10-year
period, using the most recent baseline estimates supplied by the
Congressional Budget Office consistent with section 257 of the Balanced
Budget and Emergency Deficit Control Act of 1985 used in considering a
concurrent resolution on the budget; or, after the beginning of a new
calendar year and before consideration of a concurrent resolution on
the budget, using the most recent baseline estimates supplied by the
Congressional Budget Office consistent with section 257 of the Balanced
Budget and Emergency Deficit Control Act of 1985. CBO estimates of
legislation containing a current policy designation under this
subsection shall include a separate presentation of costs excluded from
the calculation of budgetary effects for the legislation, as well as an
updated total of all excluded costs of provisions within the same
subsection of section 107.
(d) OMB Paygo Scorecards.--
(1) In general.--OMB shall maintain and make publicly
available a continuously updated document containing two PAYGO
scorecards displaying the budgetary effects of PAYGO
legislation as determined under section 308 of the
Congressional Budget Act of 1974, applying the look-back
requirement in subsection (e) and the averaging requirement in
subsection (f), and a separate addendum displaying the
estimates of the costs of provisions designated in statute as
emergency requirements.
(2) Estimates in legislation.--Except as provided in
paragraph (3), in making the calculations for the PAYGO
scorecards, OMB shall use the budgetary effects included by
reference in the applicable legislation.
(3) OMB estimates.--If legislation does not contain the
estimate of budgetary effects under paragraph (2), then OMB
shall score the budgetary effects of that legislation upon its
enactment, based on the approaches to scorekeeping set forth in
this division.
(4) 5-year scorecard.--The first scorecard shall display
the budgetary effects of PAYGO legislation in each year over
the 5-year period beginning in the budget year.
(5) 10-year scorecard.--The second scorecard shall display
the budgetary effects of PAYGO legislation in each year over
the 10-year period beginning in the budget year.
(e) Look-back to Capture Current-year Effects.--For purposes of
this section, OMB shall treat the budgetary effects of PAYGO
legislation enacted during a session of Congress that occur during the
current year as though they occurred in the budget year.
(f) Averaging Used to Measure Compliance Over 5-year and 10-year
Periods.--OMB shall cumulate the budgetary effects of a PAYGO Act over
the budget year (which includes any look-back effects under subsection
(e)) and--
(1) for purposes of the 5-year scorecard referred to in
subsection (d)(4), the four subsequent outyears, divide that
cumulative total by five, and enter the quotient in the budget-
year column and in each subsequent column of the 5-year PAYGO
scorecard; and
(2) for purposes of the 10-year scorecard referred to in
subsection (d)(5), the nine subsequent outyears, divide that
cumulative total by ten, and enter the quotient in the budget-
year column and in each subsequent column of the 10-year PAYGO
scorecard.
SEC. 105. ANNUAL REPORT AND SEQUESTRATION ORDER.
(a) Annual Report.--Not later than 14 days (excluding weekends and
holidays) after Congress adjourns to end a session, OMB shall make
publicly available and cause to be printed in the Federal Register an
annual PAYGO report. The report shall include an up-to-date document
containing the PAYGO scorecards, a description of any current policy
adjustments made under section 104(c), information about emergency
legislation (if any) designated under section 103(4)(D), information
about any sequestration if required by subsection (b), and other data
and explanations that enhance public understanding of this division and
actions taken under it.
(b) Sequestration Order.--If the annual report issued at the end of
a session of Congress under subsection (a) shows a debit on either
PAYGO scorecard for the budget year, OMB shall prepare and the
President shall issue and include in that report a sequestration order
that, upon issuance, shall reduce budgetary resources of direct
spending programs by enough to offset that debit as prescribed in
section 106. If there is a debit on both scorecards, the order shall
fully offset the larger of the two debits. OMB shall include that order
in the annual report and transmit it to the House of Representatives
and the Senate. If the President issues a sequestration order, the
annual report shall contain, for each budget account to be sequestered,
estimates of the baseline level of budgetary resources subject to
sequestration, the amount of budgetary resources to be sequestered, and
the outlay reductions that will occur in the budget year and the
subsequent fiscal year because of that sequestration.
SEC. 106. CALCULATING A SEQUESTRATION.
(a) Reducing Nonexempt Budgetary Resources by a Uniform
Percentage.--OMB shall calculate the uniform percentage by which the
budgetary resources of nonexempt direct spending programs are to be
sequestered such that the outlay savings resulting from that
sequestration, as calculated under subsection (b), shall offset the
budget-year debit, if any on the applicable PAYGO scorecard. If the
uniform percentage calculated under the prior sentence exceeds 4
percent, the Medicare programs described in section 256(d) of BBEDCA
shall be reduced by 4 percent and the uniform percentage by which the
budgetary resources of all other nonexempt direct spending programs are
to be sequestered shall be increased, as necessary, so that the
sequestration of Medicare and of all other nonexempt direct spending
programs together produce the required outlay savings.
(b) Outlay Savings.--In determining the amount by which a
sequestration offsets a budget-year debit, OMB shall count--
(1) the amount by which the sequestration in a crop year of
crop support payments, pursuant to section 256(j) of BBEDCA,
reduces outlays in the budget year and the subsequent fiscal
year;
(2) the amount by which the sequestration of Medicare
payments in the 12-month period following the sequestration
order, pursuant to section 256(d) of BBEDCA, reduces outlays in
the budget year and the subsequent fiscal year; and
(3) the amount by which the sequestration in the budget
year of the budgetary resources of other nonexempt mandatory
programs reduces outlays in the budget year and in the
subsequent fiscal year.
SEC. 107. CURRENT POLICY ADJUSTMENT TO THE CBO ESTIMATES.
(a) Purpose.--The purpose of this section is to provide for
adjustments of estimates of budgetary effects of PAYGO legislation for
legislation affecting four areas of the budget--
(1) payments made under section 1848 of the Social Security
Act (titled Payment for Physicians' Services);
(2) the Estate and Gift Tax under subtitle B of the
Internal Revenue Code of 1986;
(3) the AMT; and
(4) provisions of EGTRRA or JGTRRA that amended the
Internal Revenue Code of 1986 (or provisions in later statutes
further amending the amendments made by EGTRRA or JGTRRA),
other than--
(A) the provisions of those two Acts that were made
permanent by the Pension Protection Act of 2006 (Public
Law 109-280);
(B) amendments to the estate and gift tax referred
to in paragraph (2);
(C) the AMT referred to in paragraph (3);
(D) the 35 percent bracket and that portion of the
33 percent bracket that applies to taxable income
greater than $200,000 for an individual and $250,000
for a couple; and
(E) provisions in those two Acts relating to taxes
rates on capital gains and dividends.
(b) Medicare Payments to Physicians.--
(1) Criteria.--Legislation that includes provisions
amending or superseding the system of payments under section
1848 of the Social Security Act shall trigger the current
policy adjustment required by this division.
(2) Adjustment.--The amount of the maximum current policy
adjustment shall be the difference between--
(A) estimated net outlays attributable to the
payments made to physicians under that section of the
Social Security Act (as scheduled on July 15, 2009, to
be in effect); and
(B) what those net outlays would have been if the
nominal payment rates and related parameters in effect
for 2009 had been in effect thereafter without change.
(c) Estate and Gift Tax.--
(1) Criteria.--Legislation that includes provisions
amending the Estate and Gift Tax under subtitle B of the
Internal Revenue Code of 1986 shall trigger the current policy
adjustment required by this division.
(2) Adjustment.--The amount of the maximum current policy
adjustment shall be the difference between--
(A) total revenues projected to be collected under
the Internal Revenue Code of 1986 (as scheduled on July
15, 2009, to be in effect); and
(B) what those revenue collections would have been
if, on the date of enactment of the legislation meeting
the criteria in paragraph (1), estate and gift tax law
had instead been amended so that the tax rates, nominal
exemption amounts, and related parameters in effect for
tax year 2009 had remained in effect thereafter without
change.
(d) Permanent Extension of Middle-Class Tax Cuts and AMT Relief.--
(1) Criteria.--Legislation that includes provisions
extending middle-class tax cuts or AMT relief shall trigger the
current policy adjustment required by this division if those
provisions extend one or more of the following provisions--
(A) AMT relief for calendar year 2010 and
subsequent years in such a manner that the number of
AMT taxpayers is not estimated to exceed the number of
AMT taxpayers in tax year 2008 in any year through the
tenth year after enactment;
(B) the 10 percent bracket as in effect for tax
year 2010, as provided for under section 101(a) of the
Economic Growth and Tax Relief Reconciliation Act of
2001 and any later amendments through July 15, 2009;
(C) the child tax credit as in effect for tax year
2010, as provided for under section 201 of the Economic
Growth and Tax Relief Reconciliation Act and any later
amendments through July 15, 2009;
(D) tax benefits for married couples as in effect
for tax year 2010, as provided for under title III of
the Economic Growth and Tax Relief Reconciliation Act
and any later amendments through July 15, 2009;
(E) the adoption credit as in effect in tax year
2010, as provided for under section 202 of the Economic
Growth and Tax Relief Reconciliation Act of 2001 and
any later amendments through July 15, 2009;
(F) the dependent care credit as in effect in tax
year 2010, as provided for under section 204 of the
Economic Growth and Tax Relief Reconciliation Act of
2001 and any later amendments through July 15, 2009;
(G) the employer-provided child care credit as in
effect in tax year 2010, as provided for under section
205 of the Economic Growth and Tax Relief
Reconciliation Act of 2001 and any later amendments
through July 15, 2009;
(H) the education tax benefits as in effect in tax
year 2010, as provided for under title IV of the
Economic Growth and Tax Relief Reconciliation Act of
2001 and any later amendments through July 15, 2009;
(I) the 25 and 28 percent brackets as in effect for
tax year 2010, as provided for under section 101(a) of
the Economic Growth and Tax Relief Reconciliation Act
of 2001 and any later amendments through July 15, 2009;
and
(J) the 33 percent brackets as in effect for tax
year 2010, as provided for under section 101(a) of the
Economic Growth and Tax Relief Reconciliation Act of
2001 and any later amendment affecting taxpayers with
taxable income of $200,000 or less for individuals and
$250,000 or less for couples in calendar year 2010 and
increased in each subsequent year by an amount equal to
the cost of living adjustment determined under section
1(f)(3) of the Internal Revenue Code of 1986 for the
calendar year in which the taxable year begins,
determined by substituting ``calendar year 2008'' for
``calendar year 1992'' in subparagraph (B) thereof.
(2) Adjustment.--The amount of the maximum current policy
adjustment shall be the difference between what total revenues
would have been under the Internal Revenue Code of 1986 (as
scheduled on July 15, 2009, to be in effect) and what revenues
would be if legislation--
(A) permanently extending the AMT exemption and
brackets in effect in tax year 2009 but increased in
tax year 2010 and each subsequent tax year as indicated
under subsection (d)(2)(B), along with any additional
amount necessary to prevent the number of taxpayers who
must pay AMT from increasing; and
(B) permanently extending the provisions identified
in paragraph (1),
were enacted on the same day as the legislation referred to in
paragraph (1).
SEC. 108. APPLICATION OF BBEDCA.
For purposes of this division--
(1) notwithstanding section 275 of BBEDCA, the provisions
of sections 255, 256, 257, and 274 of BBEDCA, as amended by
this division, shall apply to the provisions of this division;
(2) references in sections 255, 256, 257, and 274 to ``this
part'' or ``this title'' shall be interpreted as applying to
this division;
(3) references in sections 255, 256, 257, and 274 of BBEDCA
to ``section 254'' shall be interpreted as referencing section
105 of this division;
(4) the reference in section 256(b) of BBEDCA to ``section
252 or 253'' shall be interpreted as referencing section 105 of
this division;
(5) the reference in section 256(d)(1) of BBEDCA to
``section 252 or 253'' shall be interpreted as referencing
section 106 of this division;
(6) the reference in section 256(d)(4) of BBEDCA to
``section 252 or 253'' shall be interpreted as referencing
section 105 of this division;
(7) section 256(k) of BBEDCA shall apply to a
sequestration, if any, under this division; and
(8) references in section 257(e) of BBEDCA to ``section
251, 252, or 253'' shall be interpreted as referencing section
104 of this division.
SEC. 109. TECHNICAL CORRECTIONS.
(a) Section 250(c)(18) of BBEDCA is amended by striking ``the
expenses the Federal deposit insurance agencies'' and inserting ``the
expenses of the Federal deposit insurance agencies''.
(b) Section 256(k)(1) of BBEDCA is amended by striking ``in
paragraph (5)'' and inserting ``in paragraph (6)''.
SEC. 110. CONFORMING AMENDMENTS.
(a) Section 256(a) of BBEDCA is repealed.
(b) Section 256(b) of BBEDCA is amended by striking ``origination
fees under sections 438(c)(2) and 455(c) of that Act shall each be
increased by 0.50 percentage point.'' and inserting in lieu thereof
``origination fees under sections 438(c)(2) and (6) and 455(c) and loan
processing and issuance fees under section 428(f)(1)(A)(ii) of that Act
shall each be increased by the uniform percentage specified in that
sequestration order, and, for student loans originated during the
period of the sequestration, special allowance payments under section
438(b) of that Act accruing during the period of the sequestration
shall be reduced by the uniform percentage specified in that
sequestration order.''.
(c) Section 256(c) of BBEDCA is repealed.
(d) Section 256(d) of BBEDCA is amended--
(1) by redesignating paragraphs (2), (3), and (4) as
paragraphs (3), (5), and (6);
(2) by amending paragraph (1) to read as follows:
``(1) Calculation of reduction in payment amounts.--To
achieve the total percentage reduction in those programs
required by section 252 or 253, subject to paragraph (2), and
notwithstanding section 710 of the Social Security Act, OMB
shall determine, and the applicable Presidential order under
section 254 shall implement, the percentage reduction that
shall apply, with respect to the health insurance programs
under title XVIII of the Social Security Act--
``(A) in the case of parts A and B of such title,
to individual payments for services furnished during
the one-year period beginning on the first day of the
first month beginning after the date the order is
issued (or, if later, the date specified in paragraph
(4)); and
``(B) in the case of parts C and D, to monthly
payments under contracts under such parts for the same
one-year period;
such that the reduction made in payments under that order shall
achieve the required total percentage reduction in those
payments for that period.'';
(3) by inserting after paragraph (1) the following:
``(2) Uniform reduction rate; maximum permissible
reduction.--Reductions in payments for programs and activities
under such title XVIII pursuant to a sequestration order under
section 254 shall be at a uniform rate, which shall not exceed
4 percent, across all such programs and activities subject to
such order.'';
(4) by inserting after paragraph (3), as redesignated, the
following:
``(4) Timing of subsequent sequestration order.--A
sequestration order required by section 252 or 253 with respect
to programs under such title XVIII shall not take effect until
the first month beginning after the end of the effective period
of any prior sequestration order with respect to such programs,
as determined in accordance with paragraph (1).'';
(5) in paragraph (6), as redesignated, to read as follows:
``(6) Sequestration disregarded in computing payment
amounts.--The Secretary of Health and Human Services shall not
take into account any reductions in payment amounts which have
been or may be effected under this part, for purposes of
computing any adjustments to payment rates under such title
XVIII, specifically including--
``(A) the part C growth percentage under section
1853(c)(6);
``(B) the part D annual growth rate under section
1860D-2(b)(6); and
``(C) application of risk corridors to part D
payment rates under section 1860D-15(e).''; and
(6) by adding after paragraph (6), as redesignated, the
following:
``(7) Exemptions from sequestration.--In addition to the
programs and activities specified in section 255, the following
shall be exempt from sequestration under this part:
``(A) Part d low-income subsidies.--Premium and
cost-sharing subsidies under section 1860D-14 of the
Social Security Act.
``(B) Part d catastrophic subsidy.--Payments under
section 1860D-15(b) and (e)(2)(B) of the Social
Security Act.
``(C) Qualified individual (qi) premiums.--Payments
to States for coverage of Medicare cost-sharing for
certain low-income Medicare beneficiaries under section
1933 of the Social Security Act.''.
SEC. 111. EXEMPT PROGRAMS AND ACTIVITIES.
(a) Designations.--Section 255 of BBEDCA is amended by
redesignating subsection (i) as (j) and striking ``1998'' and inserting
in lieu thereof ``2010''.
(b) Social Security, Veterans Programs, Net Interest, and Tax
Credits.--Subsections (a) through (d) of section 255 of BBEDCA are
amended to read as follows:
``(a) Social Security Benefits and Tier I Railroad Retirement
Benefits.--Benefits payable under the old-age, survivors, and
disability insurance program established under title II of the Social
Security Act (42 U.S.C. 401 et seq.), and benefits payable under
section 231b(a), 231b(f)(2), 231c(a), and 231c(f) of title 45, United
States Code, shall be exempt from reduction under any order issued
under this part.
``(b) Veterans Programs.--The following program shall be exempt
from reduction under any order issued under this part--
``All programs administered by the Department of Veterans
Affairs.
``Special Benefits for Certain World War II Veterans (28-
0401-0-1-701).
``(c) Net Interest.--No reduction of payments for net interest (all
of major functional category 900) shall be made under any order issued
under this part.
``(d) Refundable Income Tax Credits.--Payments to individuals made
pursuant to provisions of the Internal Revenue Code of 1986
establishing refundable tax credits shall be exempt from reduction
under any order issued under this part.''.
(c) Other Programs and Activities, Low-income Programs, and
Economic Recovery Programs.--Subsections (g) and (h) of section 255 of
BBEDCA are amended to read as follows:
``(g) Other Programs and Activities.--
``(1)(A) The following budget accounts and activities shall
be exempt from reduction under any order issued under this
part:
``Activities resulting from private donations,
bequests, or voluntary contributions to the Government.
``Activities financed by voluntary payments to the
Government for goods or services to be provided for
such payments.
``Administration of Territories, Northern Mariana
Islands Covenant grants (14-0412-0-1-808).
``Advances to the Unemployment Trust Fund and Other
Funds (16-0327-0-1-600).
``Black Lung Disability Trust Fund Refinancing (16-
0329-0-1-601).
``Bonneville Power Administration Fund and
borrowing authority established pursuant to section 13
of Public Law 93-454 (1974), as amended (89-4045-0-3-
271).
``Claims, Judgments, and Relief Acts (20-1895-0-1-
808).
``Compact of Free Association (14-0415-0-1-808).
``Compensation of the President (11-0209-01-1-802).
``Comptroller of the Currency, Assessment Funds
(20-8413-0-8-373).
``Continuing Fund, Southeastern Power
Administration (89-5653-0-2-271).
``Continuing Fund, Southwestern Power
Administration (89-5649-0-2-271).
``Dual Benefits Payments Account (60-0111-0-1-601).
``Emergency Fund, Western Area Power Administration
(89-5069-0-2-271).
``Exchange Stabilization Fund (20-4444-0-3-155).
``Federal Deposit Insurance Corporation, Deposit
Insurance Fund (51-4596-4-4-373).
``Federal Deposit Insurance Corporation, FSLIC
Resolution Fund (51-4065-0-3-373).
``Federal Deposit Insurance Corporation,
Noninterest Bearing Transaction Account Guarantee (51-
4458-0-3-373).
``Federal Deposit Insurance Corporation, Senior
Unsecured Debt Guarantee (51-4457-0-3-373).
``Federal Housing Finance Agency, Administrative
Expenses (95-5532-0-2-371).
``Federal Payment to the District of Columbia
Judicial Retirement and Survivors Annuity Fund (20-
1713-0-1-752).
``Federal Payment to the District of Columbia
Pension Fund (20-1714-0-1-601).
``Federal Payments to the Railroad Retirement
Accounts (60-0113-0-1-601).
``Federal Reserve Bank Reimbursement Fund (20-1884-
0-1-803).
``Financial Agent Services (20-1802-0-1-803).
``Foreign Military Sales Trust Fund (11-8242-0-7-
155).
``Hazardous Waste Management, Conservation Reserve
Program (12-4336-0-3-999).
``Host Nation Support Fund for Relocation (97-8337-
0-7-051).
``Internal Revenue Collections for Puerto Rico (20-
5737-0-2-806).
``Intragovernmental funds, including those from
which the outlays are derived primarily from resources
paid in from other government accounts, except to the
extent such funds are augmented by direct
appropriations for the fiscal year during which an
order is in effect.
``Medical Facilities Guarantee and Loan Fund (75-
9931-0-3-551).
``National Credit Union Administration, Central
Liquidity Facility (25-4470-0-3-373).
``National Credit Union Administration, Corporate
Credit Union Share Guarantee Program (25-4476-0-3-376).
``National Credit Union Administration, Credit
Union Homeowners Affordability Relief Program (25-4473-
0-3-371).
``National Credit Union Administration, Credit
Union Share Insurance Fund (25-4468-0-3-373).
``National Credit Union Administration, Credit
Union System Investment Program (25-4474-0-3-376).
``National Credit Union Administration, Operating
fund (25-4056-0-3-373).
``National Credit Union Administration, Share
Insurance Fund Corporate Debt Guarantee Program (25-
4469-0-3-376).
``National Credit Union Administration, U.S.
Central Federal Credit Union Capital Program (25-4475-
0-3-376).
``Office of Thrift Supervision (20-4108-0-3-373).
``Panama Canal Commission Compensation Fund (16-
5155-0-2-602).
``Payment of Vietnam and USS Pueblo prisoner-of-war
claims within the Salaries and Expenses, Foreign Claims
Settlement account (15-0100-0-1-153).
``Payment to Civil Service Retirement and
Disability Fund (24-0200-0-1-805).
``Payment to Department of Defense Medicare-
Eligible Retiree Health Care Fund (97-0850-0-1-054).
``Payment to Judiciary Trust Funds (10-0941-0-1-
752).
``Payment to Military Retirement Fund (97-0040-0-1-
054).
``Payment to the Foreign Service Retirement and
Disability Fund (19-0540-0-1-153).
``Payments to Copyright Owners (03-5175-0-2-376).
``Payments to Health Care Trust Funds (75-0580-0-1-
571).
``Payment to Radiation Exposure Compensation Trust
Fund (15-0333-0-1-054).
``Payments to Social Security Trust Funds (28-0404-
0-1-651).
``Payments to the United States Territories, Fiscal
Assistance (14-0418-0-1-806).
``Payments to trust funds from excise taxes or
other receipts properly creditable to such trust funds.
``Payments to widows and heirs of deceased Members
of Congress (00-0215-0-1-801).
``Postal Service Fund (18-4020-0-3-372).
``Radiation Exposure Compensation Trust Fund (15-
8116-0-1-054).
``Reimbursement to Federal Reserve Banks (20-0562-
0-1-803).
``Salaries of Article III judges.
``Soldiers and Airmen's Home, payment of claims
(84-8930-0-7-705).
``Tennessee Valley Authority Fund, except nonpower
programs and activities (64-4110-0-3-999).
``Tribal and Indian trust accounts within the
Department of the Interior which fund prior legal
obligations of the Government or which are established
pursuant to Acts of Congress regarding Federal
management of tribal real property or other fiduciary
responsibilities, including but not limited to Tribal
Special Fund (14-5265-0-2-452), Tribal Trust Fund (14-
8030-0-7-452), White Earth Settlement (14-2204-0-1-
452), and Indian Water Rights and Habitat Acquisition
(14-5505-0-2-303).
``United Mine Workers of America 1992 Benefit Plan
(95-8260-0-7-551).
``United Mine Workers of America 1993 Benefit Plan
(95-8535-0-7-551).
``United Mine Workers of America Combined Benefit
Fund (95-8295-0-7-551).
``United States Enrichment Corporation Fund (95-
4054-0-3-271).
``Universal Service Fund (27-5183-0-2-376).
``Vaccine Injury Compensation (75-0320-0-1-551).
``Vaccine Injury Compensation Program Trust Fund
(20-8175-0-7-551).
``(B) The following Federal retirement and disability
accounts and activities shall be exempt from reduction under
any order issued under this part:
``Black Lung Disability Trust Fund (20-8144-0-7-
601).
``Central Intelligence Agency Retirement and
Disability System Fund (56-3400-0-1-054).
``Civil Service Retirement and Disability Fund (24-
8135-0-7-602).
``Comptrollers general retirement system (05-0107-
0-1-801).
``Contributions to U.S. Park Police annuity
benefits, Other Permanent Appropriations (14-9924-0-2-
303).
``Court of Appeals for Veterans Claims Retirement
Fund (95-8290-0-7-705).
``Department of Defense Medicare-Eligible Retiree
Health Care Fund (97-5472-0-2-551).
``District of Columbia Federal Pension Fund (20-
5511-0-2-601).
``District of Columbia Judicial Retirement and
Survivors Annuity Fund (20-8212-0-7-602).
``Energy Employees Occupational Illness
Compensation Fund (16-1523-0-1-053).
``Foreign National Employees Separation Pay (97-
8165-0-7-051).
``Foreign Service National Defined Contributions
Retirement Fund (19-5497-0-2-602).
``Foreign Service National Separation Liability
Trust Fund (19-8340-0-7-602).
``Foreign Service Retirement and Disability
Fund(19-8186-0-7-602).
``Government Payment for Annuitants, Employees
Health Benefits (24-0206-0-1-551).
``Government Payment for Annuitants, Employee Life
Insurance (24-0500-0-1-602).
``Judicial Officers' Retirement Fund (10-8122-0-7-
602).
``Judicial Survivors' Annuities Fund (10-8110-0-7-
602).
``Military Retirement Fund (97-8097-0-7-602).
``National Railroad Retirement Investment Trust
(60-8118-0-7-601).
``National Oceanic and Atmospheric Administration
retirement (13-1450-0-1-306).
``Pensions for former Presidents (47-0105-0-1-802).
``Postal Service Retiree Health Benefits Fund (24-
5391-0-2-551).
``Public Safety Officer Benefits (15-0403-0-1-754).
``Rail Industry Pension Fund (60-8011-0-7-601).
``Retired Pay, Coast Guard (70-0602-0-1-403).
``Retirement Pay and Medical Benefits for
Commissioned Officers, Public Health Service (75-0379-
0-1-551).
``Special Benefits for Disabled Coal Miners (16-
0169-0-1-601).
``Special Benefits, Federal Employees' Compensation
Act (16-1521-0-1-600).
``Special Workers Compensation Expenses (16-9971-0-
7-601).
``Tax Court Judges Survivors Annuity Fund (23-8115-
0-7-602).
``United States Court of Federal Claims Judges'
Retirement Fund (10-8124-0-7-602).
``United States Secret Service, DC Annuity (70-
0400-0-1-751).
``Voluntary Separation Incentive Fund (97-8335-0-7-
051).
``(2) Prior legal obligations of the Government in the
following budget accounts and activities shall be exempt from
any order issued under this part:
``Biomass Energy Development (20-0114-0-1-271).
``Check Forgery Insurance Fund (20-4109-0-3-803).
``Credit liquidating accounts.
``Credit reestimates.
``Employees Life Insurance Fund (24-8424-0-8-602).
``Federal Aviation Insurance Revolving Fund (69-
4120-0-3-402).
``Federal Crop Insurance Corporation Fund (12-4085-
0-3-351).
``Federal Emergency Management Agency, National
Flood Insurance Fund (58-4236-0-3-453).
``Federal Home Loan Mortgage Corporation (Freddie
Mac).
``Federal National Mortgage Corporation (Fannie
Mae).
``Geothermal resources development fund (89-0206-0-
1-271).
``Low-Rent Public Housing--Loans and Other Expenses
(86-4098-0-3-604).
``Maritime Administration, War Risk Insurance
Revolving Fund (69-4302-0-3-403).
``Natural Resource Damage Assessment Fund (14-1618-
0-1-302).
``Overseas Private Investment Corporation,
Noncredit Account (71-4184-0-3-151).
``Pension Benefit Guaranty Corporation Fund (16-
4204-0-3-601).
``San Joaquin Restoration Fund (14-5537-0-2-301).
``Servicemembers' Group Life Insurance Fund (36-
4009-0-3-701).
``Terrorism Insurance Program (20-0123-0-1-376).
``(h) Low-income Programs.--The following programs shall be exempt
from reduction under any order issued under this part:
``Academic Competitiveness/Smart Grant Program (91-0205-0-
1-502).
``Child Care Entitlement to States (75-1550-0-1-609).
``Child Enrollment Contingency Fund (75-5551-0-2-551).
``Child Nutrition Programs (with the exception of special
milk programs) (12-3539-0-1-605).
``Children's Health Insurance Fund (75-0515-0-1-551).
``Commodity Supplemental Food Program (12-3507-0-1-605).
``Contingency Fund (75-1522-0-1-609).
``Family Support Programs (75-1501-0-1-609).
``Federal Pell Grants under section 401 Title IV of the
Higher Education Act.
``Grants to States for Medicaid (75-0512-0-1-551).
``Payments for Foster Care and Permanency (75-1545-0-1-
609).
``Supplemental Nutrition Assistance Program (12-3505-0-1-
605).
``Supplemental Security Income Program (28-0406-0-1-609).
``Temporary Assistance for Needy Families (75-1552-0-1-
609).''.
(d) Economic Recovery Programs.--Section 255 of BBEDCA is amended
by adding the following after subsection (h):
``(i) Economic Recovery Programs.--The following programs shall be
exempt from reduction under any order issued under this part:
``All programs enacted in, or increases in programs
provided by, the American Recovery and Reinvestment Act of
2009.
``Exchange Stabilization Fund-Money Market Mutual Fund
Guaranty Facility (20-4274-0-3-376).
``Financial Stabilization Reserve (20-0131-4-1-376).
``GSE Mortgage-Backed Securities Purchase Program Account
(20-0126-0-1-371).
``GSE Preferred Stock Purchase Agreements (20-0125-0-1-
371).
``Office of Financial Stability (20-0128-0-1-376).
``Special Inspector General for the Troubled Asset Relief
Program (20-0133-0-1-376).
``Troubled Asset Relief Program Account (20-0132-0-1-376).
``Troubled Asset Relief Program Equity Purchase Program
(20-0134-0-1-376).
``Troubled Asset Relief Program, Home Affordable
Modification Program (20-0136-0-1-604).''.
Passed the House of Representatives December 3, 2009.
Attest:
Clerk.
111th CONGRESS
1st Session
H. R. 4154
_______________________________________________________________________
AN ACT
To amend the Internal Revenue Code of 1986 to repeal the new carryover
basis rules in order to prevent tax increases and the imposition of
compliance burdens on many more estates than would benefit from repeal,
to retain the estate tax with a $3,500,000 exemption, to reinstitute
and update the Pay-As-You-Go requirement of budget neutrality on new
tax and mandatory spending legislation, enforced by the threat of
annual, automatic sequestration, and for other purposes.