[Congressional Record Volume 158, Number 107 (Tuesday, July 17, 2012)]
[Senate]
[Pages S5086-S5089]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. KOHL (for himself, Mr. Coons, and Mr. Whitehouse):
  S. 3389. A bill to modify chapter 90 of title 18, United States Code, 
to provide Federal jurisdiction for theft of trade secrets; to the 
Committee on the Judiciary.
  Mr. KOHL. Mr. President, I rise today to introduce the Protecting 
American Trade Secrets and Innovation Act of 2012. This legislation 
will help American companies protect their valuable trade secrets by 
giving them the additional option of seeking redress in Federal courts 
when they are victims of economic espionage or trade secret theft. 
Stolen trade secrets cost American companies billions of dollars each 
year and threaten their ability to innovate and compete globally. Our 
bill ensures that companies have the most effective and efficient ways 
to combat trade secret theft and recoup their losses, helping them to 
maintain their global competitive edge.
  Today, as much as 80 percent of companies' assets are intangible, the 
majority of them in the form of trade secrets. This includes everything 
from financial, business, scientific, technical, economic, or 
engineering information, to formulas, designs, prototypes, processes, 
procedures, and codes. Trade secrets are often the lifeblood of a 
business. If they are stolen and wind up in the hands of competitors, 
it can wipe out years of research and development and cost millions of 
dollars in losses. The chief executive of GM recently said that he 
worries about trade secret theft ``every day.'' This comes as no 
surprise considering the loss to Ford Motor Company in 2006 when an 
employee stole 4,000 documents which he took to China and used for the 
benefit of his new employer Beijing Automotive Company, a competitor to 
Ford. The damage to Ford was estimated to be between $50 million and 
$100 million.
  In 1996, Congress enacted the Economic Espionage Act, which made 
economic espionage and trade secret theft a Federal crime. Nearly 15 
years later, trade secret theft and economic espionage continue to pose 
a threat to U.S. companies, yet there is no Federal civil remedy for 
victims. To complement the criminal enforcement of economic espionage 
and State trade secret laws, the Protecting American Trade Secrets and 
Innovation Act would provide another avenue for companies to protect 
their trade secrets. The bill enables victims of trade secret theft to 
seek injunctive relief, putting an immediate halt to trade secret 
misappropriation, and compensation for their losses in Federal court. 
It will help fill a gap in Federal intellectual property law by 
providing legal protections for non-patentable, non-copyrightable 
innovations, on the condition that the owner of the innovation has 
taken reasonable measures to keep the innovation a secret.
  Today, companies that fall victim to economic espionage and trade 
secret theft often can only bring civil actions in State court, under a 
patchwork of State laws, to stop the harm or seek compensation for 
losses. While State courts may be a suitable venue in some cases, major 
trade secret cases will often require tools available more readily in 
Federal court, such as nationwide service of process for subpoenas, 
discovery and witness depositions. In addition, for trade secret 
holders operating nationwide, a single Federal statute can be more 
efficient than navigating 50 different State laws. Finally, our bill 
permits judges to issue seizure orders to prevent defendants from 
destroying evidence. In sum, our bill demonstrates a Federal commitment 
to trade secret protection by expanding the legal options for victims 
of economic espionage and trade secret theft.
  This legislation will not inundate Federal courts with minor trade 
secret cases because it includes limits so that only the most serious 
cases requiring Federal courts will be permitted. These limitations 
require the victim of trade secret theft to certify that the dispute 
requires either a substantial need for nationwide service of process or 
the misappropriation of trade secrets from the U.S. to another country. 
Finally, it is important to emphasize that our legislation is not 
intended to replace State trade secret laws, but to complement them to 
ensure that victims of economic espionage and trade secret 
misappropriation can get the most prompt, effective and efficient 
justice.
  We cannot take lightly the threat of trade secrets theft to American 
businesses, American jobs, and American innovation. This legislation is 
another simple and straightforward step we can take to help companies 
defend themselves against trade secret theft. It demonstrates our 
commitment at the Federal level to protect all forms of a business's 
intellectual property and their innovative spirit.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                S. 3389

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Protecting American Trade 
     Secrets and Innovation Act of 2012''.

     SEC. 2. FEDERAL JURISDICTION FOR THEFT OF TRADE SECRETS.

       (a) In General.--Section 1836 of title 18, United States 
     Code, is amended to read as follows:

     ``Sec. 1836. Civil proceedings

       ``(a) Private Civil Actions.--
       ``(1) In general.--A person may bring a civil action under 
     this subsection if the person is aggrieved by--
       ``(A) a violation of section 1831(a) or 1832(a); or

[[Page S5087]]

       ``(B) a misappropriation of a trade secret that is related 
     to or included in a product that is produced for or placed in 
     interstate or foreign commerce.
       ``(2) Pleadings.--A complaint filed in a civil action 
     brought under this subsection shall--
       ``(A) describe with specificity the reasonable measures 
     taken to protect the secrecy of the alleged trade secrets in 
     dispute; and
       ``(B) include a sworn representation by the party asserting 
     the claim that the dispute involves either substantial need 
     for nationwide service of process or misappropriation of 
     trade secrets from the United States to another country.
       ``(3) Civil ex parte seizure order.--
       ``(A) In general.--In a civil action brought under this 
     subsection, the court may, upon ex parte application and if 
     the court finds by clear and convincing evidence that issuing 
     the order is necessary to prevent irreparable harm, issue an 
     order providing for--
       ``(i) the seizure of any property (including computers) 
     used or intended to be used, in any manner or part, to commit 
     or facilitate the commission of the violation alleged in the 
     civil action; and
       ``(ii) the preservation of evidence in the civil action.
       ``(B) Scope of orders.--An order issued under subparagraph 
     (A) shall--
       ``(i) authorize the retention of the seized property for a 
     reasonably limited period, not to exceed 72 hours under the 
     initial order, which may be extended by the court after 
     notice to the affected party and an opportunity to be heard;
       ``(ii) require that any copies of seized property made by 
     the requesting party be made at the expense of the requesting 
     party;
       ``(iii) require the requesting party to return the seized 
     property to the party from which the property were seized at 
     the end of the period authorized under clause (i), including 
     any extension; and
       ``(iv) include an appropriate protective order with respect 
     to discovery and use of any property that has been seized, 
     which shall provide for appropriate procedures to ensure that 
     confidential, private, proprietary, or privileged information 
     contained in the seized property is not improperly disclosed 
     or used.
       ``(C) Seizures.--A party injured by a seizure under an 
     order under this paragraph--
       ``(i) may bring a civil action against the applicant for 
     the order; and
       ``(ii) shall be entitled to recover appropriate relief, 
     including--

       ``(I) damages for lost profits, cost of materials, and loss 
     of good will;
       ``(II) if the seizure was sought in bad faith, punitive 
     damages; and
       ``(III) unless the court finds extenuating circumstances, 
     to recover a reasonable attorney's fee.

       ``(4) Remedies.--In a civil action brought under this 
     subsection, a court may--
       ``(A) issue--
       ``(i) an order for appropriate injunctive relief against 
     any violation described in paragraph (1), including the 
     actual or threatened misappropriation of trade secrets;
       ``(ii) if determined appropriate by the court, an order 
     requiring affirmative actions to be taken to protect a trade 
     secret; and
       ``(iii) if the court determines that it would be 
     unreasonable to prohibit use of a trade secret, an order 
     requiring payment of a reasonable royalty for any use of the 
     trade secret;
       ``(B) award--
       ``(i) damages for actual loss caused by the 
     misappropriation of a trade secret; and
       ``(ii) damages for any unjust enrichment caused by the 
     misappropriation of the trade secret that is not addressed in 
     computing damages for actual loss;
       ``(C) if the trade secret described in paragraph (1)(B) is 
     willfully or maliciously misappropriated, award exemplary 
     damages in an amount not more than the amount of the damages 
     awarded under subparagraph (B); and
       ``(D) if a claim of misappropriation is made in bad faith, 
     a motion to terminate an injunction is made or opposed in bad 
     faith, or a trade secret is willfully and maliciously 
     misappropriated, award reasonable attorney's fees to the 
     prevailing party.
       ``(b) Jurisdiction.--The district courts of the United 
     States shall have original jurisdiction of civil actions 
     brought under this section.
       ``(c) Period of Limitations.--A civil action under this 
     section may not be commenced later than 3 years after the 
     date on which the misappropriation is discovered or by the 
     exercise of reasonable diligence should have been discovered. 
     For purposes of this subsection, a continuing 
     misappropriation constitutes a single claim of 
     misappropriation.''.
       (b) Definitions.--Section 1839 of title 18, United States 
     Code, is amended--
       (1) in paragraph (3), by striking ``and'' at the end;
       (2) in paragraph (4), by striking the period at the end and 
     inserting a semicolon; and
       (3) by adding at the end the following:
       ``(5) the term `misappropriation' means--
       ``(A) acquisition of a trade secret of another by a person 
     who knows or has reason to know that the trade secret was 
     acquired by improper means; or
       ``(B) disclosure or use of a trade secret of another 
     without express or implied consent by a person who--
       ``(i) used improper means to acquire knowledge of the trade 
     secret;
       ``(ii) at the time of disclosure or use, knew or had reason 
     to know that the knowledge of the trade secret was--

       ``(I) derived from or through a person who had used 
     improper means to acquire the trade secret;
       ``(II) acquired under circumstances giving rise to a duty 
     to maintain the secrecy of the trade secret or limit the use 
     of the trade secret; or
       ``(III) derived from or through a person who owed a duty to 
     the person seeking relief to maintain the secrecy of the 
     trade secret or limit the use of the trade secret; or

       ``(iii) before a material change of the position of the 
     person, knew or had reason to know that--

       ``(I) the trade secret was a trade secret; and
       ``(II) knowledge of the trade secret had been acquired by 
     accident or mistake; and

       ``(6) the term `improper means'--
       ``(A) includes theft, bribery, misrepresentation, breach or 
     inducement of a breach of a duty to maintain secrecy, or 
     espionage through electronic or other means; and
       ``(B) does not include reverse engineering or independent 
     derivation.''.
       (c) Technical and Conforming Amendment.--The table of 
     sections for chapter 90 of title 18, United States Code, is 
     amended by striking the item relating to section 1836 and 
     inserting the following:

``1836. Civil proceedings.''.

       (d) Rule of Construction.--Nothing in the amendments made 
     by this section shall be construed to modify the rule of 
     construction under section 1838 of title 18, United States 
     Code, or to preempt any other provision of law.
                                 ______
                                 
      By Mr. REID:
  S. 3393. A bill to amend the Internal Revenue Code of 1986 to provide 
tax relief to middle-class families; read the first time.
  Mr. REID. Mr. President, I ask unanimous consent that the text of the 
bill be printed in the Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record as follows:

                                S. 3393

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE; ETC.

       (a) Short Title.--This Act may be cited as the ``Middle 
     Class Tax Cut Act''.
       (b) Amendment of 1986 Code.--Except as otherwise expressly 
     provided, whenever in this Act 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) Table of Contents.--The table of contents of this Act 
     is as follows:

Sec. 1. Short title; etc.

               TITLE I--TEMPORARY EXTENSION OF TAX RELIEF

Sec. 101. Temporary extension of 2001 tax relief.
Sec. 102. Temporary extension of 2003 tax relief.
Sec. 103. Temporary extension of 2010 tax relief.
Sec. 104. Temporary extension of election to expense certain 
              depreciable business assets.

                      TITLE II--ESTATE TAX RELIEF

Sec. 201. Modifications to estate, gift, and generation-skipping 
              transfer taxes.

               TITLE III--ALTERNATIVE MINIMUM TAX RELIEF

Sec. 301. Temporary extension of increased alternative minimum tax 
              exemption amount.
Sec. 302. Temporary extension of alternative minimum tax relief for 
              nonrefundable personal credits.

                      TITLE IV--BUDGETARY EFFECTS

Sec. 401. Budgetary effects.

               TITLE I--TEMPORARY EXTENSION OF TAX RELIEF

     SEC. 101. TEMPORARY EXTENSION OF 2001 TAX RELIEF.

       (a) Temporary Extension.--
       (1) In general.--Section 901 of the Economic Growth and Tax 
     Relief Reconciliation Act of 2001 is amended by striking 
     ``December 31, 2012'' both places it appears and inserting 
     ``December 31, 2013''.
       (2) Effective date.--The amendment made by this subsection 
     shall take effect as if included in the enactment of the 
     Economic Growth and Tax Relief Reconciliation Act of 2001.
       (b) Application to Certain High-income Taxpayers.--
       (1) Income tax rates.--
       (A) Treatment of 25- and 28- percent rate brackets.--
     Paragraph (2) of section 1(i) is amended to read as follows:
       ``(2) 25- and 28- percent rate brackets.--The tables under 
     subsections (a), (b), (c), (d), and (e) shall be applied--
       ``(A) by substituting `25%' for `28%' each place it appears 
     (before the application of subparagraph (B)), and
       ``(B) by substituting `28%' for `31%' each place it 
     appears.''.
       (B) 33-percent rate bracket.--Subsection (i) of section 1 
     is amended by redesignating paragraph (3) as paragraph (4) 
     and by inserting after paragraph (2) the following new 
     paragraph:

[[Page S5088]]

       ``(3) 33-percent rate bracket.--
       ``(A) In general.--In the case of taxable years beginning 
     after December 31, 2012--
       ``(i) the rate of tax under subsections (a), (b), (c), and 
     (d) on a taxpayer's taxable income in the fourth rate bracket 
     shall be 33 percent to the extent such income does not exceed 
     an amount equal to the excess of--

       ``(I) the applicable amount, over
       ``(II) the dollar amount at which such bracket begins, and

       ``(ii) the 36 percent rate of tax under such subsections 
     shall apply only to the taxpayer's taxable income in such 
     bracket in excess of the amount to which clause (i) applies.
       ``(B) Applicable amount.--For purposes of this paragraph, 
     the term `applicable amount' means the excess of--
       ``(i) the applicable threshold, over
       ``(ii) the sum of the following amounts in effect for the 
     taxable year:

       ``(I) the basic standard deduction (within the meaning of 
     section 63(c)(2)), and
       ``(II) the exemption amount (within the meaning of section 
     151(d)(1) (or, in the case of subsection (a), 2 such 
     exemption amounts).

       ``(C) Applicable threshold.--For purposes of this 
     paragraph, the term `applicable threshold' means--
       ``(i) $250,000 in the case of subsection (a),
       ``(ii) $225,000 in the case of subsection (b),
       ``(iii) $200,000 in the case of subsections (c), and
       ``(iv) \1/2\ the amount applicable under clause (i) (after 
     adjustment, if any, under subparagraph (E)) in the case of 
     subsection (d).
       ``(D) Fourth rate bracket.--For purposes of this paragraph, 
     the term `fourth rate bracket' means the bracket which would 
     (determined without regard to this paragraph) be the 36-
     percent rate bracket.
       ``(E) Inflation adjustment.--For purposes of this 
     paragraph, with respect to taxable years beginning in 
     calendar years after 2012, each of the dollar amounts under 
     clauses (i), (ii), and (iii) of subparagraph (C) shall be 
     adjusted in the same manner as under paragraph (1)(C), except 
     that subsection (f)(3)(B) shall be applied by substituting 
     `2008' for `1992'.''.
       (2) Phaseout of personal exemptions and itemized 
     deductions.--
       (A) Overall limitation on itemized deductions.--Section 68 
     is amended--
       (i) by striking ``the applicable amount'' the first place 
     it appears in subsection (a) and inserting ``the applicable 
     threshold in effect under section 1(i)(3)'',
       (ii) by striking ``the applicable amount'' in subsection 
     (a)(1) and inserting ``such applicable threshold'',
       (iii) by striking subsection (b) and redesignating 
     subsections (c), (d), and (e) as subsections (b), (c), and 
     (d), respectively, and
       (iv) by striking subsections (f) and (g).
       (B) Phaseout of deductions for personal exemptions.--
       (i) In general.--Paragraph (3) of section 151(d) is 
     amended--

       (I) by striking ``the threshold amount'' in subparagraphs 
     (A) and (B) and inserting ``the applicable threshold in 
     effect under section 1(i)(3)'',
       (II) by striking subparagraph (C) and redesignating 
     subparagraph (D) as subparagraph (C), and
       (III) by striking subparagraphs (E) and (F).

       (ii) Conforming amendments.--Paragraph (4) of section 
     151(d) is amended--

       (I) by striking subparagraph (B),
       (II) by redesignating clauses (i) and (ii) of subparagraph 
     (A) as subparagraphs (A) and (B), respectively, and by 
     indenting such subparagraphs (as so redesignated) 
     accordingly, and
       (III) by striking all that precedes ``in a calendar year 
     after 1989,'' and inserting the following:

       ``(4) Inflation adjustment.--In the case of any taxable 
     year beginning''.
       (c) Effective Date.--Except as otherwise provided, the 
     amendments made by this section shall apply to taxable years 
     beginning after December 31, 2012.
       (d) Application of EGTRRA Sunset.--Each amendment made by 
     subsection (b) shall be subject to title IX of the Economic 
     Growth and Tax Relief Reconciliation Act of 2001 to the same 
     extent and in the same manner as if such amendment was 
     included in title I of such Act.

     SEC. 102. TEMPORARY EXTENSION OF 2003 TAX RELIEF.

       (a) Extension.--
       (1) In general.--Section 303 of the Jobs and Growth Tax 
     Relief Reconciliation Act of 2003 is amended by striking 
     ``December 31, 2012'' and inserting ``December 31, 2013''.
       (2) Effective date.--The amendment made by this subsection 
     shall take effect as if included in the enactment of the Jobs 
     and Growth Tax Relief Reconciliation Act of 2003.
       (b) 20-percent Capital Gains Rate for Certain High Income 
     Individuals.--
       (1) In general.--Paragraph (1) of section 1(h) is amended 
     by striking subparagraph (C), by redesignating subparagraphs 
     (D) and (E) as subparagraphs (E) and (F) and by inserting 
     after subparagraph (B) the following new subparagraphs:
       ``(C) 15 percent of the lesser of--
       ``(i) so much of the adjusted net capital gain (or, if 
     less, taxable income) as exceeds the amount on which a tax is 
     determined under subparagraph (B), or
       ``(ii) the excess (if any) of--

       ``(I) the amount of taxable income which would (without 
     regard to this paragraph) be taxed at a rate below 36 
     percent, over
       ``(II) the sum of the amounts on which a tax is determined 
     under subparagraphs (A) and (B),

       ``(D) 20 percent of the adjusted net capital gain (or, if 
     less, taxable income) in excess of the sum of the amounts on 
     which tax is determined under subparagraphs (B) and (C),''.
       (2) Minimum tax.--Paragraph (3) of section 55(b) is amended 
     by striking subparagraph (C), by redesignating subparagraph 
     (D) as subparagraph (E), and by inserting after subparagraph 
     (B) the following new subparagraphs:
       ``(C) 15 percent of the lesser of--
       ``(i) so much of the adjusted net capital gain (or, if 
     less, taxable excess) as exceeds the amount on which tax is 
     determined under subparagraph (B), or
       ``(ii) the excess described in section 1(h)(1)(C)(ii), plus
       ``(D) 20 percent of the adjusted net capital gain (or, if 
     less, taxable excess) in excess of the sum of the amounts on 
     which tax is determined under subparagraphs (B) and (C), 
     plus''.
       (c) Conforming Amendments.--
       (1) The following provisions are each amended by striking 
     ``15 percent'' and inserting ``20 percent'':
       (A) Section 531.
       (B) Section 541.
       (C) Section 1445(e)(1).
       (D) The second sentence of section 7518(g)(6)(A).
       (E) Section 53511(f)(2) of title 46, United States Code.
       (2) Sections 1(h)(1)(B) and 55(b)(3)(B) are each amended by 
     striking ``5 percent (0 percent in the case of taxable years 
     beginning after 2007)'' and inserting ``0 percent''.
       (3) Section 1445(e)(6) is amended by striking ``15 percent 
     (20 percent in the case of taxable years beginning after 
     December 31, 2010)'' and inserting ``20 percent''.
       (d) Effective Dates.--
       (1) In general.--Except as otherwise provided, the 
     amendments made by subsections (b) and (c) shall apply to 
     taxable years beginning after December 31, 2012.
       (2) Withholding.--The amendments made by paragraphs (1)(C) 
     and (3) of subsection (c) shall apply to amounts paid on or 
     after January 1, 2013.
       (e) Application of JGTRRA Sunset.--Each amendment made by 
     subsections (b) and (c) shall be subject to section 303 of 
     the Jobs and Growth Tax Relief Reconciliation Act of 2003 to 
     the same extent and in the same manner as if such amendment 
     was included in title III of such Act.

     SEC. 103. TEMPORARY EXTENSION OF 2010 TAX RELIEF.

       (a) American Opportunity Tax Credit.--
       (1) In general.--Section 25A(i) is amended by striking ``or 
     2012'' and inserting ``2012, or 2013''.
       (2) Treatment of possessions.--Section 1004(c)(1) of 
     division B of the American Recovery and Reinvestment Tax Act 
     of 2009 is amended by striking ``and 2012'' each place it 
     appears and inserting ``2012, and 2013''.
       (b) Child Tax Credit.--Section 24(d)(4) is amended--
       (1) by striking ``and 2012'' in the heading and inserting 
     ``2012, and 2013'', and
       (2) by striking ``or 2012'' and inserting ``2012, or 
     2013''.
       (c) Earned Income Tax Credit.--Section 32(b)(3) is 
     amended--
       (1) by striking ``and 2012'' in the heading and inserting 
     ``2012, and 2013'', and
       (2) by striking ``or 2012'' and inserting ``2012, or 
     2013''.
       (d) Temporary Extension of Rule Disregarding Refunds in the 
     Administration of Federal Programs and Federally Assisted 
     Programs.--Subsection (b) of section 6409 is amended by 
     striking ``December 31, 2012'' and inserting ``December 31, 
     2013''.
       (e) Effective Dates.--
       (1) In general.--Except as provided in paragraph (2), the 
     amendments made by this section shall apply to taxable years 
     beginning after December 31, 2012.
       (2) Rule disregarding refunds in the administration of 
     certain programs.--The amendment made by subsection (d) shall 
     apply to amounts received after December 31, 2012.

     SEC. 104. TEMPORARY EXTENSION OF ELECTION TO EXPENSE CERTAIN 
                   DEPRECIABLE BUSINESS ASSETS.

       (a) In General.--
       (1) Dollar limitation.--Section 179(b)(1) is amended--
       (A) by striking ``and'' at the end of subparagraph (C),
       (B) by redesignating subparagraph (D) as subparagraph (E),
       (C) by inserting after subparagraph (C) the following new 
     subparagraph:
       ``(D) $250,000 in the case of taxable years beginning in 
     2013, and'', and
       (D) in subparagraph (E), as so redesignated, by striking 
     ``2012'' and inserting ``2013''.
       (2) Reduction in limitation.--Section 179(b)(2) is 
     amended--
       (A) by striking ``and'' at the end of subparagraph (C),
       (B) by redesignating subparagraph (D) as subparagraph (E),
       (C) by inserting after subparagraph (C) the following new 
     subparagraph:
       ``(D) $800,000 in the case of taxable years beginning in 
     2013, and'', and
       (D) in subparagraph (E), as so redesignated, by striking 
     ``2012'' and inserting ``2013''.
       (b) Computer Software.--Section 179(d)(1)(A)(ii) is amended 
     by striking ``2013'' and inserting ``2014''.

[[Page S5089]]

       (c) Election.--Section 179(c)(2) is amended by striking 
     ``2013'' and inserting ``2014''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2012.

                      TITLE II--ESTATE TAX RELIEF

     SEC. 201. MODIFICATIONS TO ESTATE, GIFT, AND GENERATION-
                   SKIPPING TRANSFER TAXES.

       (a) Modifications to Estate Tax.--
       (1) Exclusion amount.--Paragraph (3) of section 2010(c) is 
     amended to read as follows:
       ``(3) Basic exclusion amount.--For purposes of this 
     section, the basic exclusion amount is $3,500,000.''.
       (2) Maximum estate tax rate.--The table in subsection (c) 
     of section 2001 is amended by striking ``Over $500,000'' and 
     all that follows and inserting the following:

$155,800, plus 37 percent of the excess of such amount over $500,000...
$248,300, plus 39 percent of the excess of such amount over $750,000...
$345,800, plus 41 percent of the excess of such amount over $1,000,000.
$448,300, plus 43 percent of the excess of such amount over $1,250,000.
$555,800, plus 45 percent of the excess of such amount over ...........
  $1,500,000.''.

       (b) Modifications of Estate and Gift Taxes to Reflect 
     Differences in Credit Resulting From Different Tax Rates and 
     Exclusion Amounts.--
       (1) Changing tax rates.--Notwithstanding section 304 of the 
     Tax Relief, Unemployment Insurance Reauthorization, and Job 
     Creation Act of 2010, section 901 of the Economic Growth and 
     Tax Relief Reconciliation Act of 2001 shall not apply to the 
     amendments made by section 302(d) of the Tax Relief, 
     Unemployment Insurance Reauthorization, and Job Creation Act 
     of 2010.
       (2) Decreasing exclusions.--
       (A) Estate tax adjustment.--Section 2001 is amended by 
     adding at the end the following new subsection:
       ``(h) Adjustment to Reflect Changes in Exclusion Amount.--
       ``(1) In general.--If, with respect to any gift to which 
     subsection (b)(2) applies, the applicable exclusion amount in 
     effect at the time of the decedent's death is less than such 
     amount in effect at the time such gift is made by the 
     decedent, the amount of tax computed under subsection (b) 
     shall be reduced by the amount of tax which would have been 
     payable under chapter 12 at the time of the gift if the 
     applicable exclusion amount in effect at such time had been 
     the applicable exclusion amount in effect at the time of the 
     decedent's death and the modifications described in 
     subsection (g) had been applicable at the time of such gifts.
       ``(2) Limitation.--The aggregate amount of gifts made in 
     any calendar year to which the reduction under paragraph (1) 
     applies shall not exceed the excess of--
       ``(A) the applicable exclusion amount in effect for such 
     calendar year, over
       ``(B) the applicable exclusion amount in effect at the time 
     of the decedent's death.
       ``(3) Applicable exclusion amount.--The term `applicable 
     exclusion amount' means, with respect to any period, the 
     amount determined under section 2010(c) for such period, 
     except that in the case of any period for which such amount 
     includes the deceased spousal unused exclusion amount (as 
     defined in section 2010(c)(4)), such term shall mean the 
     basic exclusion amount (as defined under section 2010(c)(3), 
     as in effect for such period).''.
       (B) Gift tax adjustment.--Section 2502 is amended by adding 
     at the end the following new subsection:
       ``(d) Adjustment to Reflect Changes in Exclusion Amount.--
       ``(1) In general.--If the taxpayer made a taxable gift in 
     an applicable preceding calendar period, the amount of tax 
     computed under subsection (a) shall be reduced by the amount 
     of tax which would have been payable under chapter 12 for 
     such applicable preceding calendar period if the applicable 
     exclusion amount in effect for such preceding calendar period 
     had been the applicable exclusion amount in effect for the 
     calendar year for which the tax is being computed and the 
     modifications described in subsection (g) had been applicable 
     for such preceding calendar period.
       ``(2) Limitation.--The aggregate amount of gifts made in 
     any applicable preceding calendar period to which the 
     reduction under paragraph (1) applies shall not exceed the 
     excess of--
       ``(A) the applicable exclusion amount for such preceding 
     calendar period, over
       ``(B) the applicable exclusion amount for the calendar year 
     for which the tax is being computed.
       ``(3) Applicable preceding calendar year period.--The term 
     `applicable preceding calendar year period' means any 
     preceding calendar year period in which the applicable 
     exclusion amount exceeded the applicable exclusion amount for 
     the calendar year for which the tax is being computed.
       ``(4) Applicable exclusion amount.--The term `applicable 
     exclusion amount' means, with respect to any period, the 
     amount determined under section 2010(c) for such period, 
     except that in the case of any period for which such amount 
     includes the deceased spousal unused exclusion amount (as 
     defined in section 2010(c)(4)), such term shall mean the 
     basic exclusion amount (as defined under section 2010(c)(3), 
     as in effect for such period).''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to estates of decedents dying, and generation-
     skipping transfers and gifts made, after December 31, 2012.
       (d) Application of EGTRRA Sunset.--Section 901 of the 
     Economic Growth and Tax Relief Reconciliation Act shall apply 
     to the amendments made by subsection (a).

               TITLE III--ALTERNATIVE MINIMUM TAX RELIEF

     SEC. 301. TEMPORARY EXTENSION OF INCREASED ALTERNATIVE 
                   MINIMUM TAX EXEMPTION AMOUNT.

       (a) In General.--Paragraph (1) of section 55(d) is 
     amended--
       (1) by striking ``$72,450'' and all that follows through 
     ``2011'' in subparagraph (A) and inserting ``$78,750 in the 
     case of taxable years beginning in 2012'', and
       (2) by striking ``$47,450'' and all that follows through 
     ``2011'' in subparagraph (B) and inserting ``$50,600 in the 
     case of taxable years beginning in 2012''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2011.

     SEC. 302. TEMPORARY EXTENSION OF ALTERNATIVE MINIMUM TAX 
                   RELIEF FOR NONREFUNDABLE PERSONAL CREDITS.

       (a) In General.--Paragraph (2) of section 26(a) is 
     amended--
       (1) by striking ``or 2011'' and inserting ``2011, or 
     2012'', and
       (2) by striking ``2011'' in the heading thereof and 
     inserting ``2012''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2011.

                      TITLE IV--BUDGETARY EFFECTS

     SEC. 401. BUDGETARY EFFECTS.

       (a) PAYGO Scorecard.--The budgetary effects of this Act 
     shall not be entered on either PAYGO scorecard maintained 
     pursuant to section 4(d) of the Statutory Pay-As-You-Go Act 
     of 2010.
       (b) Senate PAYGO Scorecard.--The budgetary effects of this 
     Act shall not be entered on any PAYGO scorecard maintained 
     for purposes of section 201 of S. Con Res. 21 (110th 
     Congress).

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