S.1920 - Omnibus Budget Reconciliation Act of 1987100th Congress (1987-1988)
|Sponsor:||Sen. Chiles, Lawton [D-FL] (Introduced 12/04/1987)|
|Committees:||Senate - Budget|
|Latest Action:||Senate - 12/11/1987 Returned to the Calendar. Calendar No. 460. (All Actions)|
|Roll Call Votes:||There have been 7 roll call votes|
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Summary: S.1920 — 100th Congress (1987-1988)All Information (Except Text)
Introduced in Senate (12/04/1987)
Omnibus Budget Reconciliation Act of 1987 - Title I: Commerce - Amends the Communications Act of 1934 to require the Federal Communications Commission, prior to the transfer of a construction permit or broadcast station license, to assess and collect from the transferor a charge of two percent of the selling price or of the fair market value, whichever is greater. Increases the charge to three percent if the transfer has violated the Fairness Doctrine.
Increases such charge to four percent (five percent if the transfer has violated the Fairness Doctrine) if the Commission finds that the transfer has not operated the station for more than three years, unless: (1) the application involves only an FM translator station or FM booster station; (2) the application involves a pro forma assignment or transfer of control; (3) the transferor has made an affirmative factual showing that because of materially changed circumstances subsequent to the acquisition of the license or permit, a change in ownership will serve the public interest; or (4) the disposal of the permit or license was authorized in accordance with regulations concerning minority ownership of broadcast stations.
Prohibits the Commission from waiving or deferring such charge.
Provides that moneys received from such charge shall be deposited in the general fund of the Treasury until September 30, 1989, and thereafter in the Public Broadcasting Trust Fund to be established by the Secretary of the Treasury. Provides that such Fund shall be used solely: (1) by the Secretary of Commerce for the planning and construction of public telecommunications facilities; and (2) for the Public Broadcasting Fund to provide financial support for public broadcasting.
Requires the Commission, in establishing the fair market value of a construction permit or license that is disposed of, to include the price of the permit or license and all items of value disposed of, without regard to whether the disposition of such items occurs between the same persons or in the same transaction.
Authorizes appropriations of a specified amount for FY 1989, and of a specified percentage of the Public Broadcasting Trust Fund for fiscal years after FY 1989, for the planning and construction of public telecommunications facilities. Limits to a specified portion of the Public Broadcasting Trust Fund the appropriations authorized for the Public Broadcasting Fund for fiscal years after FY 1990.
Requires broadcast licensees to provide reasonable opportunity for the discussion of conflicting views on issues of public importance, consistent with the Commission's rules in effect on January 1, 1987.
Requires the Secretary of the department in which the Coast Guard is located to establish a system for the collection of $50,000,000 in FY 1988 through 1990 in payments by users of the Coast Guard's services, except for emergency search and rescue. Requires that such a system include payments from: (1) the sale of Support of Services Stamps which entitle the holder to specified services without charge; and (2) fees collected from users of such specified services who have not purchased a Support of Services Stamp. Requires the Secretary to consider collecting payments for non-emergency search and rescue and to ensure that such a collection system minimizes the adverse economic effects upon commercial towing services and other segments of the maritime industry. Directs the Secretary to report to the Congress by December 1, 1987, on the establishment of such a system and by December 1, 1988, on the implementation of such a system.
Title II: Committee on Energy and Natural Resources - Subtitle A: Nuclear Waste - Nuclear Waste Policy Act Amendments Act of 1987 - Amends the Nuclear Waste Policy Act of 1982 to add a new "Title IV: Program Redirection". Directs the Secretary of Energy to select by January 1, 1989, as the preferred site for the first repository, one of the sites previously selected for characterization as a candidate site. Sets forth the criteria for such site consideration. Prohibits the Secretary from initiating exploratory shaft facility construction until such preferred site has been selected. Makes the State in which the preferred site is located eligible to enter into a benefits agreement with the Secretary. Subjects the Secretary's site selection decision to an expedited judicial review process. Grants the Temporary Emergency Court of Appeals exclusive jurisdiction over such decision. Prescribes procedural guidelines for such decision, including an environmental evaluation.
Requires an economic impact report to Congress within one year after site selection.
Annuls and revokes the Secretary's previous proposal to locate a monitored retrievable storage facility on the Clinch River (Oak Ridge, Tennessee). Prescribes a deadline by which the Secretary must survey and evaluate three potentially suitable sites in at least two States for such a facility. Sets forth: (1) the factors to be considered at each site; and (2) notification requirements and local approval procedures.
Authorizes the Secretary to make grants to any State, Indian tribe, or local government to support an assessment of the feasibility of siting a monitored retrievable storage facility.
Requires the Secretary to construct and operate such a facility, once selection is effective, as part of an integrated nuclear waste management system.
Directs the Secretary to conduct a feasibility study regarding additional monitored retrievable storage facilities which shall: (1) examine the desirability of co-locating a monitored retrievable storage facility site for spent nuclear fuel from civilian nuclear activities with a site at which substantial volumes of high-level radioactive waste from atomic energy defense activities are located; and (2) include the development of a management plan for such high-level radioactive waste in a system with additional monitored retrievable storage facilities capable of storing both high-level radioactive and spent nuclear fuel. Requires the Secretary to report to the Congress by April 1, 1989, on the study results.
Sets a time frame within which the Secretary must study and evaluate the use of dry cask storage technology at civilian nuclear power reactor sites for the temporary storage of spent nuclear fuel until a permanent geologic repository is operative for such purpose. Prescribes the contents of such study and directs the Secretary to report on it to the Congress by October 1, 1988.
Requires a report to the Congress by April 1, 1989, on the benefits of storing for at least 50 years spent nuclear fuel compared to the current system design allowing such fuel to age for ten years before emplacement in a repository.
Prescribes guidelines under which the Secretary may enter into benefits agreements with eligible States or Indian tribes on whose property a repository or monitored retrievable storage facility is sited.
Mandates that a review panel be established under such benefits agreements to: (1) advise the Secretary regarding proposed repositories or monitored retrievable storage facilities and related issues; (2) evaluate performance; (3) recommend corrective actions; and (4) participate in data planning and review. Exempts such panel from the requirements of the Federal Advisory Committee Act.
Prohibits the Secretary from conducting site-specific activities regarding a second repository while benefits agreements are in effect (unless the Congress specifically appropriates funds for such activities). Requires the Secretary to report to the President and the Congress by January 1, 2007, on the need for a second repository. Cites conditions under which the Secretary may terminate a benefits agreement. Declares that the Secretary's benefits termination decisions shall be available to the Congress and the public and are not subject to judicial review.
Requires the Secretary to offer any affected State, Indian tribe, or local government an opportunity to designate a representative to conduct on-site oversight activities at a monitored retrievable storage facility.
Authorizes appropriations for FY 1988 through 1990.
Requires the Secretary, within 60 days after enactment of this Act, to seek to enter into a contract with the National Academy of Sciences for a study regarding the major facets of reprocessing spent nuclear fuel. Requires the Secretary to submit the Academy's report to the Congress by September 30, 1989.
Directs the Secretary to report to the Congress on subseabed disposal of spent nuclear fuel and high-level radioactive waste. Prescribes the contents of such report.
Prohibits the transportation of spent nuclear fuel or high-level radioactive waste by or for the Secretary unless in packages that have been certified for such purpose by the Nuclear Regulatory Commission. Directs the Secretary to: (1) abide by the Commission's regulations regarding advance notification of State and local governments prior to transportation of spent nuclear fuel or high-level radioactive waste; and (2) provide States with technical assistance and funds for training public safety officials through whose jurisdiction the Secretary plans to transport radioactive materials.
Requires the Commission to: (1) require actual tests on a sample full-scale package (in addition to any simulated tests, scale model test, or engineered analysis) as part of its package design certification process for spent nuclear fuel or radioactive waste transportation; and (2) conduct a survey of the radioactive waste transportation packages used by other nations and report the survey results to the Congress by January 1, 1989.
Mandates that the repository site approval procedure include a statement by the Secretary (after consultation with the Secretary of Defense) that repository construction and operation will not seriously jeopardize or interfere with national defense activities.
Grants any State which borders on a State in which a candidate repository site is located, and lies contiguous to a major river, waterway, or underground aquifer adjacent to or underneath a site, the same right to participate in site selection, review, and approval as the State in which the repository is proposed to be located.
Requires the Secretary, when siting Federal research projects, to give special consideration to proposals from States where a repository is located.
Subtitle B: Federal Onshore Competitive and Gas Leasing Act of 1987 - Federal Onshore Competitive Oil and Gas Leasing Act of 1987 - Amends Federal law regarding competitive leasing of oil and gas for onshore Federal lands to increase from 640 acres to 2,560 acres the units of land open to competitive leasing.
Provides for lease sales to be: (1) conducted by oral bidding; and (2) held at least every two months in each State (or more frequently at the Secretary's discretion). Requires the Secretary of the Interior to: (1) establish by regulation a national minimum acceptable price for all leases which is at least $10 per acre, and (2) accept the highest bid which is at least $10 or greater per acre without evaluation of the value of the lands proposed for lease. Requires that all bids for less than the minimum acceptable price be rejected.
Makes lands available for leasing for a three-year period if the highest bid received for such lands was less than the minimum acceptable price.
Describes circumstances under which certain lands may be leased without competitive bidding.
Conditions the issuance of leases upon payment of a minimum rental of $1 per acre for each year of the lease. Authorizes the Secretary to suspend a lease and its term by adding the suspended period thereto if a lessee, due to specified circumstances beyond his control, is denied access for exploration, drilling or production purposes.
Authorizes the Secretary to disapprove partial assignments of less than 640 acres outside of Alaska, or of less than 2,560 acres within Alaska.
Directs the Secretary to promptly process requests for assignment of sublease approvals and to grant such approvals (where appropriate) within 60 days of receipt.
Subjects a lease to cancellation by the Secretary of the Interior after 30 days' notice for noncompliance with the lease terms unless: (1) the leasehold contains a well capable of production of oil or gas in paying quantities; or (2) the lease is committed to an approved cooperative or unit plan or communitization agreement which contains a well capable of production of unitized substances in paying quantities.
Exempts from the environmental impact assessment requirements of the National Environmental Policy Act of 1969 actions taken by the Secretary to develop regulations and procedures for a competitive oil and gas leasing program (including lease sales).
Amends the Alaska National Interest Lands Conservation Act to make leasing in Alaska consistent with that in the lower 48 States. Repeals provisions regarding: (1) determination of favorable petroleum geological provinces; and (2) suspension of noncompetitive leasing.
Establishes an interim period during which certain pending lease applications will be processed as they would have been prior to the date of enactment of this Act.
Prohibits noncompetitive lease applications for specified lands from being processed until such lands are posted for competitive bidding in accordance with this Act.
Provides for the leasing of certain lands without competitive bidding to the first qualified applicant if such lands were similarly available for such noncompetitive leasing prior to the date of enactment of this Act. Terminates the lease-issuing authority under this Act 24 months after the date of issuance of final implementing regulations.
Directs the Secretary to issue final regulations within 60 days after the date of enactment of this Act. States that such regulations do not require certain accompanying environmental impact analyses (including environmental impact analyses).
Requires the Secretary of the Interior to hold at least one competitive lease sale for tracts which but for this Act would have been posted for the filing of simultaneous oil and gas lease applications. Permits the inclusion in such sale of certain tracts which had over-the-counter noncompetitive oil and gas lease offers.
Imposes civil penalties upon persons who willfully and knowingly misrepresent the value of lands and leases under this Act. Grants to the States concurrent civil and criminal jurisdiction for violations of this Act.
Requires the Secretary to submit an annual report to the Congress regarding the implementation of this Act, including specified data.
Subtitle C: Park System Admission Fees - Land and Water Conservation Fund Act Amendments of 1987 - Amends the Land and Water Conservation Fund Act of 1965 to increase from $10 to $25 the charge for the annual admission permit (the Golden Eagle Passport) into any entrance fee area of the National Park System.
Authorizes the Secretary of the Interior to make available an annual admission permit for a reasonable fee for a specific unit or units of the National Park System.
Sets fee limits for single-visit permits.
Prohibits charging fees at any National Park unit located in an urbanized area.
Directs the Secretary to report to specified congressional committees a list of units and their proposed admission fees.
Prohibits admission fees for persons 16 years of age or less or for organized educational groups.
Prohibits charges at: (1) the Statue of Liberty National Monument, New York; (2) the U.S.S. Arizona Memorial, Hawaii; and (3) Independence National Historical Park, Pennsylvania.
Requires a "Fee-Free Day" at each unit where a fee is charged.
Sets admission fee limitations for Glacier, Yellowstone, and Grand Teton National Parks.
Makes admission fees available to the collecting agency for resource protection, research, interpretation, and maintenance at outdoor recreation facilities managed by that agency.
Allocates 15 percent of the funds collected by the National Park Service to Park units based upon need: 35 percent for operating expenses, and 50 percent based on user and admission fees.
Permits the use of such funds for resource protection, research, and interpretation, and in the case of funds from user fees, for maintenance.
Authorizes volunteers or others to sell permits and collect fees if adequately trained and bonded.
Permits the charge of a transportation fee in lieu of an entrance fee at parks with transportation systems. Provides for the distribution of such funds, with the park itself retaining 50 percent outright.
Directs the Secretary to study the feasibility of adjusting entrance fees to encourage alternative transportation usage and visitation at off-peak times. Requires the study to include a pilot program at Yosemite National Park. Directs the Secretary to report to specified congressional committees within three years on such study.
Extends the Land and Water Conservation Fund through FY 2015.
Subtitle D: Tongass Timber Supply Fund - Amends the Alaska National Interest Lands Conservation Act to repeal the ongoing appropriations for timber utilization in the Tongass National Forest, Alaska. Authorizes appropriations to maintain a specified level of timber supply.
Title III: Committee on Environment and Public Works - Authorizes the Administrator of the Environmental Protection Agency to assess user fees for certain activities administered by the Agency under statutory mandate.
Amends the Nuclear Waste Policy Act of 1982 to direct the Secretary of Energy to develop and make available to the public plans for the conduct of surface-based testing at specified candidate sites recommended for site characterization. Outlines the contents of such plans. Prohibits the Secretary from initiating exploratory shaft facility construction at any candidate site until a preferred candidate site is selected according to statutory guidelines.
Directs the Secretary to: (1) publish for public comment (within 180 days after the date of enactment of this Act) a description of the decision methodology to be used in selecting a preferred candidate site; (2) make available to certain affected bodies (including affected States and Indian tribes) the technical information the Secretary intends to consider in evaluating site suitability for repository development; (3) select a preferred candidate site for the first repository by January 1, 1991, based in part upon the information gained from the surface-based testing; (4) submit to the Congress (and make available to the public) a comprehensive statement of the basis for the Secretary's site selection decision; (5) immediately notify interested States, Indian tribes and the Congress if the preferred candidate site is determined to be unsuitable; and (6) select a new preferred candidate site within six months after such determination.
Sets guidelines for judicial review of the Secretary's site selection decision. Grants the Temporary Emergency Court of Appeals exclusive jurisdiction over such decision. Prescribes procedural guidelines for such decision and for an environmental evaluation.
Directs the Secretary to enter into a contract with the National Academy of Sciences for the purpose of establishing an Oversight Board under Academy auspices to evaluate the scientific and technical adequacy of the Department of Energy's surface-based testing plans, preferred candidate site selection program, and site characterization program. Sets forth the Board's duties, including a quarterly status report on its activities. Declares that the National Environmental Policy Act is applicable to site characterization activities under this Act. Specifies exceptions to environmental impact statement requirements. Requires the Secretary to have in effect a fully qualified quality assurance program governing the data to be collected during in situ characterization of any site before proceeding to sink shafts at any candidate site.
Prohibits the Secretary from conducting site-qualified activities with respect to a second repository unless the Congress has specifically authorized and appropriated funds for such activities. Directs the Secretary to: (1) report to the President and the Congress by January 1, 2010, on the need for a second repository; and (2) suspend all expenditures related to evaluating crystalline rock suitability as a potential repository host medium.
Sets forth criteria for licenses issued by the Nuclear Regulatory Commission (NRC) for monitored retrievable storage facilities (MRS) dealing with spent nuclear fuel or high-level radioactive waste.
Authorizes appropriations for FY 1988 through 1990. Directs the NRC to assess its licensees annual charges on a fiscal year basis for FY 1988 through 1990. Prescribes a maximum amount for such charges and mandates that they be reasonably related to NRC regulatory services and costs.
Amends the Consolidated Omnibus Budget Reconciliation Act of 1985 to repeal the NRC's mandate to: (1) assess annual charges from its licensees; and (2) submit to certain congressional committees a feasibility report regarding such annual charges.
Amends the Nuclear Waste Policy Act to set forth the amount of the nuclear waste fee adjustment for FY 1988 through 1990.
Title IV: Committee on Finance - Subtitle A: Health, Social Services, and Income Security - Part A: Provisions with Major Budgetary Impact - Subpart I: Provisions Affecting Medicare Part A - Amends title XVIII (Medicare) of the Social Security Act to set the applicable percentage increase in hospital prospective payment rates at one percent for hospitals paid at the urban rate and 4.2 percent for hospitals paid at the rural rate for FY 1988, at the market basket percentage increase minus two percentage points for FY 1989, and at the market basket percentage increase minus 1.6 percentage points for FY 1990.
Requires the Secretary to issue, within 120 days of this Act's enactment, clear and explicit implementing instructions which set forth the manner in which a sole community hospital may apply for a Medicare payment adjustment when its patient volume declines by more than five percent due to circumstances beyond its control. Amends the Medicare program to make the payment adjustment applicable to sole community hospitals experiencing such a decline in patient volume in a cost reporting period prior to October 1, 1990 (extended from October 1, 1988.) Allows a sole community hospital to qualify for such an adjustment without regard to the formula by which its Medicare payments are determined.
Amends part A (General Provisions) of title XI of the Social Security Act to require that whenever the Secretary of Health and Human Services proposes a regulation or promulgates a final version of a regulation under titles XVIII (Medicare), XIX (Medicaid), or part B (Peer Review) of title XI of the Act which will have a substantial impact on small rural hospitals, the Secretary make a regulatory impact analysis available to the public.
Requires the Secretary to: (1) develop a data base of the operating costs of inpatient hospital services for a representative sample of hospitals for use in determining appropriate adjustments to the Medicare prospective payment system and analyzing legislative, regulatory, and budgetary changes; and (2) report to the Congress on such data base by October 1, 1988. Directs the Secretary to develop and place into effect a data base of the operating costs of inpatient hospital services for all Medicare hospitals by June 1, 1989.
Directs the Prospective Payment Assessment Commission to evaluate a specified study conducted by the Secretary into the feasibility and impact of eliminating or phasing out separate urban and rural prospective payment rates and report its conclusions and recommendations to the Congress by March 1, 1988.
Amends the Medicare program to require the Secretary to regularly update the index representing the proportion of hospital costs attributable to wages on the basis of a survey of the wage-related costs of Medicare hospitals.
Treats certain hospitals which are located in a rural county which is adjacent to one or more urban areas as being urban hospitals for Medicare payment purposes.
Revises the method of calculating the wage index for the purpose of adjusting payments after December 1986, to a hospital which has been allowed to continue permitting billing by related organizations.
Includes psychologists' services furnished to hospital inpatients as covered inpatient hospital services.
Requires Medicare hospitals to place every patient covered under the Medicare program under a physician's care, rather than requiring that every patient be under such care.
Directs the Prospective Payment Assessment Commission to conduct a study and report to the Congress by April 1, 1988, regarding possible modifications to the prospective payment system that will provide more adequate and appropriate payments for high cost (outlier) burn cases. Covers 90 percent of the costs by which burn cases exceed the point at which a case is designated as an outlier case.
Changes the cost-effectiveness performance period under the hospital demonstration project reimbursement system.
Prohibits the Secretary from altering the method for making Medicare payments to hospitals for the unrecovered costs associated with unpaid deductible or coinsurance amounts for inpatient hospital services.
Directs the Secretary to include in the annual report to the Congress on the Medicare program a comparison between outlier payments to urban hospitals and outlier payments to rural hospitals.
Classifies rural hospitals which have 272 or more beds as rural referral centers. (Currently, a rural hospital having 500 or more beds is designated a rural referral center.)
Directs the Secretary to establish a grant program to assist small rural hospitals and their communities to plan and implement projects modifying the type and extent of services such hospitals provide in order to adjust for changes in the need for such services. Prohibits a grant to a hospital from exceeding a two-year term. Sets forth reporting requirements. Authorizes appropriations for FY 1989 and 1990.
Amends the Omnibus Budget Reconciliation Act of 1986 to delay, from November 21, 1987, to December 31, 1988, the effective date of requirements relating to hospital standards for organ transplants and standards for organ procurement agencies.
Amends the Medicare program to alter the formula for determining the amount to be paid to hospitals for their indirect costs of medical education. Directs the Secretary to enter into agreements with four hospitals to conduct three-year demonstration projects whereby such hospitals provide to rural hospitals, for one to three months of training, physicians who have completed one year of residency training.
Sets the amount by which a hospital's Medicare prospective payments shall be reduced to account for its capital-related costs at ten percent of prospective payments for cost reporting periods occurring after November 20, 1987, and before the close of FY 1990. Postpones until FY 1990, the Secretary's authority to include capital-related costs in the prospective payment system. Prohibits the Secretary from changing the definition of "capital-related costs" or changing the methodology for paying hospitals for such costs prior to FY 1990.
Prohibits Medicare periodic interim payments to a hospital serving a disproportionate share of low-income patients on or after July 1, 1990, unless such hospital demonstrates that the discontinuance of such payments would pose an immediate threat to the hospital's ability to operate. Defers periodic interim payments which would otherwise be made to disproportionate share hospitals during at least the last 21 days of FY 1989, until FY 1990. Extends, through FY 1990, the adjustment of Medicare payments made to hospitals which serve a disproportionate share of low-income patients.
Subparts II: Provisions Affecting Medicare Parts A and B - Amends parts A (Hospital Insurance) and B (Supplementary Medical Insurance) of the Social Security Act to require that no Medicare claims be processed within ten days in FY 1988, 11 days in FY 1989, and 12 days in FY 1990. Subjects claims received from comprehensive outpatient rehabilitation facilities or rehabilitation agencies to prompt payment standards.
Requires the Secretary to publish in the Federal Register, by September 1 before each fiscal year, the data, standards, and methodology to be used to establish budgets for fiscal intermediaries and carriers for that fiscal year. Amends the Tax Equity and Fiscal Responsibility Act of 1982 to increase appropriations in FY 1988 for use by fiscal intermediaries and carriers in carrying out provider cost audits and medical necessity reviews. Extends such appropriations through FY 1990, but at a lesser amount. Amends the Medicare program to prohibit the Secretary from assessing the performance of an intermediary or carrier by the sole consideration of the ratio of amounts saved by claim denials to amounts expended on provider review by the intermediary or carrier.
Includes government entities within the requirement that large group health plans function as the primary payer for items and services covered under such plans and the Medicare program. Makes primary payer requirements applicable to end-stage renal disease payments.
Subpart III: Provisions Affecting Medicare Part B - Amends part B of the Medicare program to increase the medical economic index by the full amount of the percentage increase for primary physicians' services and by one percent for other physicians' services in 1988.
Provides incentive payments to physicians who furnish services on an assignment-related basis in a rural area designated as a health manpower shortage area under the Public Health Service Act.
Prohibits the Secretary from setting the customary charge for a new physician's services at more than 80 percent of the prevailing charge for a service.
Reduces the prevailing charge for cataract extraction with intraocular lens implant, intraocular lens insertion, coronary artery bypass surgery, total hip replacement, suprapubic prostatectomy, transurethral resection of the prostate, diagnostic dilation and curettage, and carpal tunnel release. Limits nonparticipating physicians' actual charges for such procedures if such reductions in prevailing charges result in reductions in the reasonable charges for such procedures.
Makes certain changes in the calculation of maximum allowable actual charges for physicians who did not have actual charges for a procedure in the calendar quarter beginning on April 1, 1984, and in the application of such charges to a group practice.
Makes the imposition of civil penalties for the improper use of assistants at cataract surgery inapplicable to surgery performed prior to March 1, 1987. Permits a peer review organization (PRO) and the appropriate carrier to approve the use of an assistant at cataract surgery if the use of an assistant is necessary to perform a surgical technique of established economic benefit that eliminates the need for an anesthesiologist or nurse anesthetist.
Requires the Secretary to establish a separate utilization screen (used by carriers to check for possible overutilization of services) for physician visits to patients in rehabilitation hospitals and units.
Directs the Secretary to enter into an agreement with any physician who, by reason of a breach of a contract entered into by such physician pursuant to the National Health Service Corps Scholarship Program, owes a past-due obligation to the United States under which deductions are to be made from amounts otherwise payable to the physician under the Medicare and Medicaid (title XIX of the Act) programs until the past-due obligation has been repaid. Sets forth a procedure for collecting such amounts from providers and health maintenance organizations with whom such physicians are employed.
Directs the Secretary to report the results of a study by January 1, 1989, of the variations in conversion factors used by Medicare carriers in determining the prevailing charge for anesthesia services.
Changes the date, from March 1 to May 1 of each year, by which the Physician Payment Review Commission must make recommendations to the Congress regarding adjustments to physician payment rates and the methodology for determining such rates.
Sets a limit, determined pursuant to a specified formula, on the aggregate Medicare payment which may be made in a cost reporting period for the cost of outpatient hospital radiology services.
Extends for one year, through 1989, current part B premium provisions.
Increases part B coverage of outpatient mental health services, but excludes from such coverage brief office visits for the sole purpose of prescribing or monitoring prescription drugs used in treating mental disorders. Provides part B coverage of partial hospitalization services furnished incident to physicians' services to outpatients.
Prohibits regulations providing for payment of a return on equity capital from including provision for specific recognition of any return on equity capital with respect to hospital outpatient departments.
Updates the maximum rate of payment per visit for independent rural health clinics.
Includes certified nurse-midwife services within covered part B services. Includes the services of clinical psychologists in the definition of covered rural health clinic services if such services would be covered if furnished by a physician or as incident to a physician's services. Provides part B coverage of psychologists' services furnished at community mental health centers pursuant to a fee schedule to be established by the Secretary. Provides part B coverage for therapeutic shoes furnished to individuals with severe diabetic foot disease.
Requires that durable medical equipment furnished by a Medicare provider, other than inexpensive equipment or equipment deemed eligible for long-term rental, be purchased on a lump sum or lease-purchase basis. Allows the lump sum purchase of such equipment only where the expected duration of the medical need for such equipment warrants the assumption that a lump sum purchase would be less costly than a lease-purchase. Covers 80 percent of the reasonable charge for durable medical equipment bought on a lump sum basis.
Provides coverage for the services of physician assistants in all settings. Sets the allowable charges for such services in different settings.
Maintains the current formula for reimbursing hospitals which specialize in eye and ear surgical procedures beyond FY 1988 in the case of hospitals which receive over 50 percent of their revenues from eye and ear outpatient procedures. Directs the Secretary to report to the Congress within one year of this Act's enactment on modifying the amount of payments made to hospitals that specialize in specific surgical procedures.
Subpart IV: Provisions Affecting PROs - Directs the Secretary to report to the Congress, within one year of this Act's enactment, on improved procedures for imposing sanctions against Medicare (title XVIII of the Social Security Act) providers which furnish items or services which are not medically necessary or do not meet professionally recognized health care standards.
Amends part B (Peer Review) of title XI of the Social Security Act to require peer review organizations (PROs) to give providers whose services are denied Medicare coverage an opportunity for discussion and review of the determination before patients and organizations responsible for paying claims are notified of such determination.
Amends the Medicare program to require that the Secretary's budget separately state the amount of budget authority for inpatient hospital services and the amount of budget authority for the PRO program. (Currently, PRO costs are included as costs incurred by hospitals in providing inpatient hospital services.)
Amends part B of title XI of such Act to require the Secretary to publish in the Federal Register: (1) any new policy or procedure affecting PRO performance of contract obligations within 45 days prior to the effective date of such policy or procedure; and (2) the general criteria and standards used in evaluating PRO performance of contract obligations. Directs the Secretary to: (1) regularly furnish each PRO with a report that documents its performance in relation to other PROs; and (2) negotiate necessary contractual modifications with PROs before requiring them to perform additional functions. Provides that the Secretary's contracts with a PRO shall be for an initial three-year term and be renewable on a triennial basis thereafter.
Requires the Secretary to give preference to contract with PROs which have their primary place of business in the State in which review will be conducted when choosing from among proposed contracts for peer review.
Requires a PRO to perform 50 percent of its review activities each year on the sites where items on services are provided, including on-site review of each hospital in its area. Includes within PRO review the determination as to whether individuals enrolled with a health maintenance organization (HMO) have adequate access to services provided by or through such HMO. Requires a PRO to: (1) apprise HMO enrollees regarding the peer review system and the method of contacting the PRO; (2) conduct several educational sessions each year at hospitals to acquaint providers and hospital personnel with the criteria the PRO uses in making its determinations; (3) make arrangements for the initial review of psychiatric and physical rehabilitation services to be made by a physician who is trained in psychiatry or physical rehabilitation; and (4) consider, in developing norms of care, the special problems associated with delivering care in remote rural areas, the availability of service alternatives to inpatient hospitalization and social factors affecting the safety and efficacy of service delivery.
Authorizes the Secretary to establish demonstration projects examining the feasibility of requiring instruction and oversight of rural physicians, in lieu of imposing sanctions, through the use of video communication between rural and teaching hospitals.
Permits providers to represent Medicare beneficiaries during appeals of PRO determinations, but prohibits providers from imposing any financial liability on such beneficiaries in connection with such representation. Protects Medicare beneficiaries from liability for services which PROs determine are not covered under the Medicare program. Requires a hospital to notify a patient of its request that a PRO review its determination that such patient no longer requires inpatient hospital care if the attending physician disagrees with the hospital's determination.
Subpart V: Provisions Affecting Medicaid - Amends the Medicare and Medicaid programs to impose a common set of requirements on Medicare skilled nursing facilities and Medicaid intermediate care facilities (nursing facilities). Includes within such set requirements that nursing facilities: (1) maintain clinical records on all residents and assess, upon the resident's admission and periodically thereafter, the resident's mental, physical, and psychosocial needs, utilizing a minimum data set to be established by the Secretary of Health and Human Services; (2) not admit any new resident, after 1988, who is mentally ill or retarded unless the State mental health authority deems such individual to require nursing facility services and decides whether the individual requires active treatment for mental illness or retardation; (3) provide 24-hour nursing services, employ at least one full-time registered professional nurse (both staffing requirements are currently imposed on skilled nursing facilities), and employ at least one full-time social worker; (4) provide care without requiring certain assurances regarding the source of payment for such services or discriminating against individuals who are eligible for Medicare or Medicaid; (5) protect specified resident rights and notify residents regarding such rights; (6) transfer or discharge a resident without the resident's consent only when such action is essential to the resident's welfare, the health or safety of others would otherwise be endangered, or the resident fails to pay allowable charges, and only after complying with specified procedures; (7) provide the Secretary, the States, service providers, and resident relatives with specified access and visitation rights; (8) maintain a quality assessment and assurance program which is attuned to the comments and complaints of nursing facility staff and residents; (9) require each of their nursing aides to successfully complete a training and testing program that entails competency-based testing before the assumption of direct resident care and at least 100 hours of initial training; and (10) protect a resident's personal funds. Requires, in addition, that Medicare skilled nursing facilities create or revise a written plan of care for each of their residents after making an assessment of their mental, physical, and psychosocial needs.
Requires that, in addition to the preadmission review of mentally ill or retarded individuals, State mental health authorities conduct an annual review of mentally ill or retarded residents to determine whether such residents require nursing facility services and whether they require active treatment for mental illness or retardation. Directs that such preadmission and annual reviews be conducted in accordance with criteria to be developed by the Secretary by October 1, 1988. Sets forth required nursing facility responses to determinations as to whether such residents need nursing facility services and need, or do not need, active treatment for mental illness or retardation. Gives long-term residents who do not require nursing facility services, but who require active treatment, the choice of remaining in the facility or receiving covered services in an alternative setting. Requires nursing facilities to provide for the active treatment of residents in need of treatment for mental illness or retardation regardless of their continued need for nursing facility services or their discharge from such facility. Requires States to have an appeals process in effect by 1989 for mentally ill or retarded individuals adversely affected by a preadmission or annual review.
Directs the Secretary to establish a program providing grants to Medicare skilled nursing facilities for facility projects that enhance the quality of care or life of facility residents. Sets forth reporting requirements. Authorizes appropriations for such program for FY 1988 through 1990.
Provides for Federal inspection and certification of Medicaid intermediate care facilities. (Currently States survey and certify such facilities.)
Requires that intermediate care and skilled nursing survey results be posted in a place accessible to patients.
Amends part A (General Provisions) of title XI of such Act to authorize the Secretary to make provider performance reports available to the public after giving the provider 30 days (currently, 60 days) to review and comment on such reports, but removes time restrictions on the release of such information to ombudsmen.
Amends the Medicare program to make the Secretary responsible for certifying State nursing facilities and States responsible for certifying other nursing facilities. Bases such certification on surveys to be conducted by a multidisciplinary team of professionals upon any change in the ownership of the nursing facility and, on an unannounced basis, at nine- to 15-month intervals. Subjects nursing facilities with poor compliance records to extended surveys. Directs the Secretary to develop and test a protocol for conducting surveys.
Requires States to: (1) provide for the investigation of complaints against nursing facilities; (2) use specialized survey teams to survey and carry out enforcement action against chronically substandard nursing facilities; and (3) provide survey teams with specified training in survey and certification techniques. Requires that State long-term care ombudsmen be notified of any adverse action to be taken against a nursing facility.
Directs the Secretary to establish criteria and procedures for evaluating a nursing facility's plans for the correction of its violation of Medicare and Medicaid nursing facility standards.
Requires the Secretary to: (1) conduct surveys of no fewer than five percent of the nursing facilities surveyed by each State in a year to test the adequacy of each State's surveys; and (2) prescribe standards for measuring the performance of State survey and certification programs and sanctions against States failing to meet such standards.
Requires that survey results and nursing facility cost report information be made available to the public.
Directs the Secretary and the States to develop: (1) a range of intermediate sanctions to apply to nursing facilities whose violation of nursing facility standards does not immediately jeopardize the health and safety of their residents; and (2) specific criteria as to when and how intermediate sanctions are to be applied, with incrementally more severe fines being imposed for repeated or uncorrected deficiencies. Requires the Secretary to review, at least once every three months, the effectiveness of intermediate sanctions imposed by States. Authorizes the Secretary and the States to appoint a receiver to establish and oversee the implementation of a plan to bring nursing facilities into compliance with Medicare and Medicaid requirements when they chronically fail to satisfy such requirements or their deficiencies immediately jeopardize residents' health and safety.
Directs the Secretary to compile and periodically update a list of items and services covered under each State Medicaid plan and make such list available to Medicaid beneficiaries and providers.
Amends part A (General Provisions) of title IX of such Act to require the Director of the Office of Technology Assessment to establish a National Commission on Long-Term Care composed of members having expertise in the provision and financing of long-term care. Requires the Commission to advise the Congress regarding: (1) methods of ensuring the quality of care in long-term care facilities and home-care programs; (2) the costs, appropriate staffing, and reimbursement of such facilities and programs; and (3) the access of Medicare and Medicaid beneficiaries to such facilities and programs. Requires the Commission to investigate compliance with Federal Medicaid requirements in States which have low reimbursement rates for nursing home care and have a moratorium on nursing. Sets forth reporting requirements. Authorizes appropriations for such Commission.
Amends the Medicaid program to set forth rules regarding the attribution of income and resources to institutionalized and community spouses. Provides that for the initial determination of an institutionalized spouse's Medicaid eligibility all the resources held by either the institutionalized or community spouse shall be considered available to the institutionalized spouse, except for an amount which equals: (1) the community spouse resource allowance determined without subtracting from such allowance resources otherwise available to the community spouse; or (2) the amount a court orders to be retained by the community spouse if such amount exceeds the resource allowance. Sets forth the formula for determining the community spouse resource allowance which provides the community spouse with at least $12,000 annually, with annual adjustments to such formula reflecting changes in the cost-of-living. Excludes from the determination of the institutionalized spouse's eligibility support which the community spouse owes to the institutionalized spouse, if the latter assigns his or her support rights to the State.
Provides that after the initial eligibility determination: (1) no resources of the community spouse will be considered available to the institutionalized spouse; and (2) the income of the institutionalized spouse will not be considered to include a personal need allowance set at no less than the benefits available to an institutionalized individual under title XVI (Supplemental Security Income) of such Act and a community spouse monthly income allowance determined pursuant to a specified formula. Gives the institutionalized and the community spouse the right to a hearing to establish that the community spouse monthly income allowance or resource allowance is not adequate to support the community spouse without financial duress so that an adequate amount of support will be substituted for the allowance. Prohibits such income allowance from being less than court-ordered support payments.
Delays the Medicaid eligibility of institutionalized individuals who disposed of their resources at less than fair market value within 24 months prior to applying for Medicaid benefits. Sets forth situations in which a delay shall not be applied.
Allows States to: (1) extend Medicaid coverage to pregnant women and infants under age one whose family income exceeds current income eligibility standards, but does not exceed 185 percent of the Federal poverty level; and (2) impose a Medicaid premium on such coverage which does not exceed five percent of the amount by which a family's income exceeds the Federal poverty level.
Authorizes States to accelerate the coverage of poor children under age five. (Currently, coverage would not be extended to all poor children under age five until FY 1991.) Allows States to extend Medicaid coverage to poor children under age eight.
Directs the Office of Technology Assessment to conduct a study and report to the Congress by August 1, 1988, regarding children with special health care needs and the medical expenses incurred in meeting such needs.
Amends part A (General Provisions) of title XI of such Act to increase the maximum amount of annual Medicaid payments which may be made to Puerto Rico, the Virgin Islands, Guam, the Northern Mariana Islands and American Samoa. Authorizes the Secretary to waive or modify Medicaid requirements with respect to the Northern Mariana Islands.
Amends the Medicaid program to authorize the Secretary to conduct an independent medical review of patient care in mental, skilled nursing, or intermediate care facilities and assess the appropriateness of the State's determination regarding such care. Requires a State's program of medical review of patient care to provide for the development of a corrective action plan for each deficient facility and describe the steps the State will take to ensure that such plan is implemented expeditiously. Sets forth requirements regarding the comprehensiveness of State on-site review of the care provided to Medicaid beneficiaries in mental, skilled nursing, or intermediate care care facilities.
Requires that covered family planning services be available to health maintenance organization enrollees.
Authorizes certain States to provide Medicaid coverage of individuals who receive only an optional State supplementary payment based on need.
Subpart VI: Social Services and Income Security - Amends title XX (Block Grants to States for Social Services) of such Act to increase funding for such grants in FY 1988. Amends part A (General Provisions) of title XI to include American Samoa in the Social Services Block Grant program and the Child Welfare Services program under part B (Child Welfare Services) of title IV.
Amends part E (Foster Care and Adoption Assistance) of title IV of such Act to extend, through 1989: (1) the conditional ceiling on Federal financial participation in foster care; and (2) the provision which permits a State to use, under the Child Welfare Services program, funds made available to it under the conditional ceiling that are not needed under part E. Amends the Adoption Assistance and Child Welfare Act of 1980 to extend indefinitely the provision permitting Federal financial participation in foster care for certain children voluntarily placed in such care. Provides that where a child for whom foster care payments are being made resides in the same foster home or child care institution as his or her son or daughter the payments made for such child shall include the cost of certain items provided to or on behalf of the child's son or daughter.
Amends title XVI (Supplemental Security Income) (SSI) of such Act to increase SSI benefits payable to residents of medical facilities. Requires States making supplementary payments to residents of medical facilities who are receiving SSI benefits to increase and then maintain them at the increased level.
Authorizes the Secretary to make an emergency cash advance to presumptively eligible individuals who are initially applying for SSI benefits up to the amount which would be payable for the first month to an eligible individual with no other income.
Directs the Secretary, where necessary to avoid undue hardship, to suspend the penalties applied when individuals become SSI eligible by disposing of their resources at less than fair market value.
Excludes payments under part A (Aid to Families with Dependent Children) (AFDC) of title IV of such Act from SSI income eligibility determinations. Excludes from SSI resource eligibility determinations real property which, for specified reasons, cannot be sold.
Provides that SSI benefits shall not be reduced to the extent that amounts set aside for burial and related expenses are used for other purposes if the amount used for other purposes would not cause the individual to exceed SSI resource limits.
Amends the Deficit Reduction Act of 1984 to permanently disregard in-kind assistance provided by nonprofit organizations to SSI or AFDC recipients in determining the need or eligibility of such recipients.
Amends the SSI program to exclude death benefits from an individual's income for SSI eligibility purposes to the extent such benefits do not exceed amounts such individual expended on the deceased person's last illness and burial.
Continues the provision of full SSI benefits to individuals whose institutionalization is likely to exceed three months during a continuous period of institutionalization and who need to continue to maintain and provide for the expenses of the home or living arrangement to which he or she may return after institutionalization.
Amends the Employment Opportunities for Disabled Americans Act to authorize States to treat a husband and wife living in the same medical facility, whether or not they share a room, as though they were an SSI eligible individual and his or her eligible spouse rather than two eligible individuals.
Amends the SSI program to prohibit individuals who are in a public emergency shelter for the homeless for more than six months in any nine-month period from being eligible for SSI payments. (Currently, SSI eligibility terminates when an individual has been in such shelter for more than three months in a 12-month period.)
Entitles individuals who are applying for or receiving SSI benefits on the basis of blindness to elect to receive supplementary notice by telephone, initial notice by certified mail, or notice by some alternative procedure, of any determination made or other action taken with respect to such individual's SSI rights. Directs the Secretary to study the desirability and feasibility of extending such notices to other individuals who may lack the ability to read.
Treats individuals who are ineligible for SSI benefits by reason of their receipt of widow's or widower's insurance benefits under the OASDI program as SSI recipients for purposes of the Medicaid program.
Extends until July 1, 1988, the deadline for disabled widows or widowers who become ineligible for SSI benefits by reason of the increase in OASDI benefits caused by the Social Security Amendments of 1983 to apply for Medicaid coverage.
Part B: Other Provisions - Subpart I: Medicare Provisions - Amends the Medicare program to require appropriate State or local agencies to maintain: (1) toll-free hotlines to collect, maintain, and continually update information on Medicare home health agencies located in the State or locality and receive complaints and answer questions regarding such agencies; and (2) units with enforcement authority and access to consumer medical records and survey reports to investigate such complaints.
Sets forth publication requirements regarding the establishment of standards, and the interpretation and alteration of policy affecting Medicare coverage of extended care, home health care, and durable medical equipment benefits. Directs the Secretary to: (1) ensure that Medicare payment practices are consistent among Medicare carriers and fiscal intermediaries, and clearly understood by providers and beneficiaries; and (2) make the changes in automated data collection and retrieval needed to enhance the accessibility of information which accurately reflects the provision of Medicare extended and home health care benefits.
Requires a Medicare home health agency to: (1) protect and promote the rights of each individual under its care; (2) furnish the State licensing entity with the name and social security number of any individual hired by the agency as well as information as to whether such individual has been convicted of a felony; (3) inform the State licensing entity of changes in agency ownership or control; (4) furnish items and services through licensed health professionals or persons who have completed or are enrolled in a training program which meets minimum standards established by the Secretary by July 1988; and (5) include the patient's plan of care within its clinical records.
Requires an appropriate State or local agency to conduct a standard survey every nine to fifteen months and upon a change in the ownership of, or significant number of complaints against, a home health agency, of the quality of patient care provided by such agencies. Subjects home health agencies which perform poorly on such surveys to an extended survey. Directs the Secretary to evaluate the assessment process, report to the Congress on the results of such evaluation, and make appropriate modifications to such process by 1992.
Requires the Secretary to develop and implement criteria and procedures for evaluating plans of correction submitted by home health agencies found out of compliance with Medicare participation requirements. Authorizes the Secretary to impose intermediate sanctions on agencies whose failure to correct deficiencies pursuant to approved plans of correction does not immediately jeopardize the health and safety of health care beneficiaries.
Requires Medicare fiscal intermediaries which have denied a claim for home health or extended care services to: (1) furnish the provider and the individual with respect to whom the claim was made with a written explanation of the denial; (2) provide individuals seeking a reconsideration of a denial based on the lack of medical need with a physician's review of such denial; and (3) promptly notify such individual and provider of the disposition of such reconsideration. Sets time limits on processing reconsiderations of claim denials for home health, extended care, and durable medical equipment services.
Prohibits the Secretary from implementing a program of prior authorization for Medicare home health and extended care services prior to six months after the Congress receives a required report (due by February 1, 1989) on a demonstration project concerning prior and concurrent authorization for such services.
Sets forth fiscal intermediary consultation requirements.
Directs the Secretary to: (1) conduct a study of and demonstration to test alternative methods of paying home health agencies on a prospective basis for Medicare services; and (2) submit legislative proposals to Congress by July 1, 1990, based on the results of such study. Requires the Secretary to conduct a study and report to the Congress by June 1, 1988, regarding the appropriateness of adjusting home health agency cost limits to take into account differences in the costs of urban and rural home health agencies.
Directs the Secretary to develop and distribute to Medicare providers and fiscal intermediaries, for subsequent distribution to Medicare home health and extended care beneficiaries, a standard form describing: (1) Medicare coverage of home health and extended care services; and (2) a beneficiary's rights in, and the procedure for, appealing coverage denials.
Amends title VII (Administration) of the Social Security Act to establish an Office of Rural Health Policy in the Department of Health and Human Services to: (1) advise the Secretary regarding the effects of changes in the Medicare and Medicaid programs on rural health care; (2) oversee compliance with provisions requiring regulatory impact analyses and rural health care demonstration projects; (3) establish and maintain a clearinghouse for collecting and disseminating information on rural health care; (4) coordinate rural health care activities within the Department of Health and Human Services; and (5) provide the Department with information regarding the rural health care activities of other Federal departments and agencies. Sets aside ten percent of amounts expended by the Secretary to be used on certain experiments and demonstration projects relating exclusively or substantially to rural health issues.
Amends the Medicare program to set forth technical amendments related to certified registered nurse anesthetists.
Directs the Secretary to enter into an agreement with no fewer than four eligible organizations for the provision of community nursing and ambulatory care on a prepaid, capitated basis for three years. Lists the services and supplies which comprise community nursing and ambulatory care. Defines an "eligible organization" as a public or private entity which: (1) primarily engages in the provision of community nursing and ambulatory care; (2) provides such care through or under the supervision of a registered nurse; (3) maintains clinical records on all patients; (4) maintains procedures for referring cases to or consulting with other health care providers; and (5) provides community nursing and ambulatory care in an area which the Secretary designates as a health manpower shortage area.
Requires the Secretary to annually publish a per capita rate of payment for each class of enrollees equal to 95 percent of the adjusted average per capita cost for such class. Directs the Secretary to make monthly prepayments to such organizations in accordance with such rates. Authorizes retroactive payment adjustments to account for differences between the actual number of enrollees and the number of enrollees estimated for the purpose of determining the advance payment. Prohibits enrollee charges from exceeding charges for which they would be liable in the absence of their enrollment.
Authorizes eligible organizations to provide enrollees with optional additional care. Requires the provision of additional care where the average of the per capita rates of payment to an organization exceeds the adjusted community rate for community nursing and ambulatory care, unless the organization elects to have such payments reduced or withheld.
Makes certain Medicare provisions which are applicable to health maintenance organizations and competitive medical plans applicable to organizations providing care pursuant to this Act.
Amends the Omnibus Budget Reconciliation Act of 1986 to extend, for two years, the waiver provided to a Connecticut hospice on limits placed on the provision of inpatient care in Medicare hospices.
Amends the Medicare program to make a technical correction relating to the certification of podiatric teaching programs.
Provides that there shall be no requirement that comprehensive outpatient rehabilitation facilities provide physical, occupational, or speech therapy at any fixed location so long as such services are delivered pursuant to a rehabilitation plan and payments are not otherwise made for the item or services under the Medicare program.
Directs the Secretary and the Comptroller General to conduct a study and report to the Congress within six months of this Act's enactment on holding telephonic hearings on an individuals entitlement to Medicare benefits.
Extends the prohibition on any demonstration projects relating to competitive bidding as a method of purchasing Medicare laboratory services for two years, until January 1, 1990.
Amends title II (Old Age, Survivors, and Disability Insurance) (OASDI) of such Act to provide that when individuals become entitled to OASDI disability benefits by reason of a disability which previously entitled them to such benefits, both periods of entitlement shall count toward the two-year period of OASDI disability benefit entitlement required for Medicare eligibility despite an intervening period of gainful employment.
Amends the Medicare program to impose civil monetary penalties and intermediate sanctions on HMOs which: (1) fail substantially to provide medically necessary items and services if the failure adversely affects the enrollee; (2) charge an individual a greater premium that is permitted; (3) act to expel or refuse to re-enroll an individual for medical reasons; (4) engage in any practice that denies or discourages enrollment by individuals whose medical condition or history indicates a need for substantial future medical services; (5) misrepresent or falsify information or; (6) fails to make prompt claim payments.
Amends the Omnibus Budget Reconciliation Act of 1986 to provide a temporary waiver of the Medicare requirement that HMOs must have an enrolled population of which not more than 50 percent are Medicare or Medicaid beneficiaries to HMOs which had a pre-existing waiver of such requirement and received specified grants in FY 1987.
Amends the Deficit Reduction Act of 1984 to extend, through FY 1992, waivers for demonstration of social HMOs which provide integrated health and social services on a prepaid capitated basis.
Authorizes the Secretary to conduct demonstration projects to test alternative payment methodologies pertaining to Medicare capitation payments.
Repeals a provision of the Medicare program allowing direct Medicare payment of hospital and skilled nursing facility charges for which HMOs are liable. Authorizes the Secretary, at the request of an HMO, to establish the annual rates for each year in advance of entering into a multi-year contract with an HMO.
Subpart II: Medicaid Provisions - Amends the Medicaid program to require a State, under a home or community-based waiver, to cover home or community-based services provided pursuant to a written plan of care to individuals age 65 or older with respect to whom there has been a determination that but for the provision of such services the individuals would require the level of care provided in a skilled nursing or intermediate care facility, the cost of which could be reimbursed under the Medicaid program. Provides that such a waiver shall be for an initial three-year term and, upon a State's request, for additional five-year terms. Sets funding limitations. Prohibits the Secretary from placing a limit on the number of individuals receiving home or community-based services under a waiver granted prior to March 12, 1985. Prohibits model home or community-based services waivers from limiting by an amount less than 200 the number of individuals in the State who may receive services under such waivers.
Authorizes the New Jersey Medicaid agency to establish a program providing health care on a prepaid basis through a separate entity (including a subdivision of the State Medicaid agency) responsible for the operation of such program in accordance with HMO requirements.
Sets the Federal Medicaid matching rate for quality review of HMO services by a private accreditation body at 75 percent.
Provides Medicaid coverage of medical and surgical services furnished by a dentist to the extent State law permits the provision of such services by both physicians and dentists.
Authorizes New York, upon the Secretary's approval to conduct a three-year demonstration project testing its Prenatal/Maternity/Newborn Care Pilot Program as an alternative to existing Federal programs.
Waives restrictions imposed on inpatient care for Medicaid hospice patients in the case of individuals afflicted with acquired immunodeficiency syndrome (AIDS).
Prohibits the Secretary from reducing Medicaid payments to States having high erroneous payment rates for calendar quarters beginning before July 1, 1988.
Subpart III: Social Services and Income Security - Amends part A (General Provisions) of title XI of the Social Security Act to establish a National Commission on Children, which is to serve as a forum on behalf of children and report to the Congress and the President by September 30, 1988, in the context of the purpose of appropriated provisions of the Social Security Act and other Federal laws, regarding questions relating to: (1) the health of children; (2) social and support services for children and their parents; (3) education; and (4) poverty among children.
Amends part B (Child Welfare Service) of title IV of such Act to authorize appropriations for FY 1988, 1989, and 1990 so that the Secretary may make grants to public or private entities for the development of alternative care arrangements for infants who do not require hospitalization but would otherwise remain in inappropriate hospital settings.
Directs the Secretary and the Comptroller General to conduct a survey regarding: (1) the number of infants and children with AIDS who have been placed in foster care; (2) the problems encountered by social service agencies in placing such infants and children in foster care; and (3) the potential increase in the number of infants and children with AIDS who will require foster care. Requires the Secretary to report to the Congress, within one year of this Act's enactment, regarding such survey and means of improving the care provided to such infants and children.
Authorizes the Secretary to approve, as alternatives to the AFDC program, five-year demonstration projects testing: (1) New York State's Child Support Supplement Program; and (2) Washington State's Family Independence Program.
Amends part D (Child Support and Establishment of Paternity) of title IV of such Act to eliminate the Child Support Revolving Fund in the Treasury.
Authorizes the Secretary to make grants to up to ten States so that each may create an SSI Outreach and Eligibility Team Project to test the feasibility of developing and using special procedures to: (1) ensure that all homeless individuals in shelters understand their right to benefits under the SSI program and other Social Security programs; (2) assist such individuals in applying for benefits under such programs; and (3) ensure that all such individuals receive the benefits to which they are entitled. Requires the Secretary to report to the Congress at least annually regarding such outreach activities. Authorizes appropriations for such grant program.
Amends the SSI program to reimburse States for the provision of interim assistance to individuals whose SSI benefits have been terminated or suspended, if such individuals are subsequently found to have been eligible for such benefits.
Directs the Secretary of Labor to enter into an agreement with three States to conduct demonstration programs which provide individuals who would otherwise likely receive unemployment compensation for the maximum number of weeks that such compensation is available in a State during the year with an allowance assisting in such individuals' self-employment. Prohibits the total amount paid to an individual in a benefit year from exceeding amounts that could be paid to such individual for regular or extended unemployment compensation. Sets forth reporting requirements.
Amends the Omnibus Reconciliation Act of 1980 to modify the effective date for State compliance with certain requirements regarding extended benefits under the Unemployment Insurance Program.
Subtitle B: Revenue Provisions - Revenue Amendments of 1987 - Part I: Revenue Raising Provisions - Subpart A: Accounting Provisions - Amends Internal Revenue Code (IRC) accounting rules applicable to long-term contracts to require that taxable income from such contracts be determined under the percentage of completion method.
Amends accounting provisions of the IRC to repeal the deduction for additions to an employer reserve for accrual of vacation pay.
Amends IRC accounting provisions to: (1) repeal provisions under which a taxpayer's allocable installment indebtedness is allocated on a pro rata basis to certain installment obligations; (2) eliminate the installment method for dispositions of property by dealers, except with regard to certain farm property, timeshares, and residential lots; (3) require the payment of interest on tax deferrals on nondealer installment obligations that exceed $5,000,000; and (4) treat the net proceeds of indebtedness secured by an installment obligation as payment of such obligation.
Denies a depreciation deduction for amounts paid or incurred to acquire customer base, market share, or similar intangible items.
Subpart B: Estimated Tax Provisions - Delays for one year, from 1987 until 1988, implementation of the increase from 80 percent to 90 percent in the current year liability test for estimated tax payments by individuals.
Prohibits an addition to any tax imposed on underpayments of estimated tax installments by corporations due on or before June 15, 1987, under certain circumstances (thus permitting corporations to use their 1986 tax in determining certain estimated tax installment amounts).
Amends the IRC to allow employers to elect to have revised withholding certificates put into effect more promptly than is required under current law.
Amends IRC provisions dealing with estimated income tax payments by corporations.
Establishes the amount of the penalty for underpayment of estimated tax at the amount of the underpayment for the period of underpayment, plus interest on such amount. Revises the schedule for the payment of estimated tax installments. Specifies that the amount of the required annual estimated tax payment shall be the lesser of: (1) 90 percent of the current tax shown on the taxpayer's return (corporations having a taxable income of at least $1,000,000 for any taxable year during a specified period must use this option); or (2) 100 percent of the preceding year's tax liability. Permits lower estimated tax payments if the taxpayer can show that the installment payments or adjusted seasonal installments made over the year were adequate for each quarter based on annualized income and adjusted seasonal installment concepts described in this Act.
Exempts from an estimated tax penalty any taxpayer whose tax liability is less than $500.
Requires an addition to income tax when an adjustment of overpayment of estimated income tax by a corporation, made before the 15th day of the third month following the close of the taxable year, is found to be excessive.
Repeals provisions of the IRC dealing with installment payments of estimated income tax by corporations.
Subpart C: Corporate Provisions - Amends IRC provisions relating to the computation and payment of tax by members of an affiliated group filing a consolidated tax return.
Sets a fixed 34 percent tax rate with respect to the taxable income of personal service corporations. (Such corporations are currently subject to graduated corporate rates.)
Repeals provisions prescribing nonrecognition of gain or loss for property distributed to a parent corporation (80 percent distributee) in connection with the complete liquidation of a subsidiary. Amends the IRC to provide for similar nonrecognition treatment in such instances, but includes provisions describing cases in which the distributions are to be treated as taxable dividends. Revises provisions relating to the basis of property received in liquidations. Directs the Secretary to prescribe regulations to: (1) carry out the purposes of amendments included in this Act and in the Tax Reform Act of 1986 with respect to the recognition of gain and loss on distributions of property in liquidation; and (2) provide that in the case of the complete liquidation of a subsidiary, a liquidating corporation that is not a member of a consolidated group may elect not to recognize gain in the same manner as a member of a consolidated group.
Amends IRC provisions relating the treatment of certain intragroup transactions in connection with the redemption of stock.
Increases the percentage of income that a regulated investment company must distribute in connection with the excise tax on undistributed income.
Subpart D: Partnership Provision - Amends the IRC to provide for separate treatment of publicly traded partnerships with respect to accounting rules applied to limitations of passive activity losses and credits.
Directs the Secretary of the Treasury to study and report to specified congressional committees by January 1, 1989, on administrative and compliance issues related to the tax treatment of publicly traded partnerships and other large partnerships.
Subpart E: Foreign Provision - Provides for the treatment of certain interest income of Netherlands Antilles controlled foreign corporations.
Subpart F: Pensions Provision - Amends the IRC and the Employee Retirement Income Security Act of 1974 to revise the definition of "full funding limitation" in connection with an employer's deductible contributions to a qualified defined benefit plan.
Subpart G: Estate and Gift Taxes - Extends permanently the 1987 estate and gift tax rates, the highest of which is 55 percent (applied to transfers over $3,000,000).
Subpart H: Excise Taxes - Extends through December 31, 1990, the three percent excise tax on telephone service. (The tax is currently due to expire as of 1988.)
Amends IRC provisions relating to the collection of the special fuels taxes on diesel fuel, special motor fuels, and certain nongasoline fuels used in aviation and in other vehicles.
Subpart I: Employment Taxes - Amends the Social Security Act to eliminate the limit on wages or self-employment income subject to the hospital insurance tax.
Amends the Railroad Retirment Tax Act to increase the tier 2 railroad retirement tax rate: (1) for employees from 4.25 percent to 4.9 percent; and (2) for employers from 14.75 percent to 16.1 percent.
Establishes the Commission on Railroad Retirement Reform to conduct a comprehensive study of the issues relating to the long-term financing, structure, and objectives of the railroad retirement system. Requires that the resulting report, including detailed findings, conclusions, and recommendations, be submitted to the President and to the Congress no later than October 1, 1989. Terminates the Commission 60 days after submission of its report.
Amends the Railroad Retirement Solvency Act of 1983 with respect to certain transfers to the Railroad Retirement Account to: (1) extend the applicability of the provision to benefits received through FY 1990 (currently FY 1988); and (2) delete a limitation on the aggregate transferable amount in connection with such transfers.
Amends the Federal Unemployment Tax Act to revise Federal unemployment tax rate provisions, applying the 6.2 percent rate in calendar years 1988 through 1990, and the 6.0 percent rate in 1991 and thereafter.
Amends the Social Security Act to: (1) provide for 1988 through 1990 transfers of funds from the Employment Security Administration Account to the Federal Unemployment Account and the Extended Unemployment Compensation Account; and (2) revise the limitation on the amounts permissible in these transferee accounts.
Subpart J: User Fees - Directs the Secretary of the Treasury to establish a program requiring user fee payments in connection with requests to the Internal Revenue Service for ruling letters, opinion letters, determination letters, and similar actions. Sets forth criteria to govern such fees.
Imposes an occupational tax of $1,000 per year on proprietors of: (1) distilled spirits plants; (2) bonded wine cellars; (3) bonded wine warehouses; and (4) taxpaid wine bottling houses. Reduces the rate to $500 per year for certain small proprietors.
Increases existing occupational taxes as follows: (1) for brewers, from $110 per year to $1,000 per year for each brewery, with a reduced rate of $500 per year for certain small proprietors; (2) for wholesale dealers in liquors, from $255 per year to $500 per year; (3) for wholesale dealers in beer, from $123 per year to $500 per year; (4) for retail dealers in liquors, from $54 per year to $250 per year; and (5) for retail dealers in beer, from $24 per year to $250 per year. Repeals the occupational tax on limited retail dealers of liquors, wine, or beer.
Replaces variable rates used with regard to nonbeverage domestic drawback claimants with a single rate of $500 per year.
Denies the validity of a permit for certain tax-free industrial uses of distilled spirits unless the holder pays a special tax of $250 with respect to the relevant site.
Imposes an occupational tax of $1,000 per year for each relevant premises on persons engaged in business as manufacturers of tobacco products, cigarette papers, and tubes, and on export warehouse proprietors. Applies a reduced rate of $500 per year for certain smal proprietors. Fixes criminal penalties for willful failure to pay the tax.
Increases the occupational tax on importers and manufacturers of firearms from $500 per year to $1,000 per year and on dealers from $250 per year to $500 per year. Applies a reduced rate for small importers and manufacturers.
Amends the Consolidated Omnibus Budget Reconciliation Act of 1985 with respect to: (1) the disposition of customs user fees; (2) the merchandise processing fee; (3) the fee imposed on the foreign content of certain articles returned to the United States after having been exported for processing abroad; (4) a prohibition of charges, other than authorized customs fees, in connection with the provision of customs services at foreign trade zones and bonded warehouses; and (5) the extension of customs user fees through FY 1990. (Current law prohibits the charging of fees after September 30, 1989.)
Subpart K: Debt Collection - Amends the Deficit Reduction Act of 1984 to extend through 1990 provisions under which overpayments of Federal taxes may be used to offset non-tax debts owed to Federal agencies. (Currently, such offsets are permitted with respect to refunds payable before 1988.)
Expresses the intent of the Congress that, to the extent practicable, the amendments made by the Deficit Reduction Act of 1984 with respect to the collection of non-tax debts owed to Federal agencies shall extend to all Federal agencies. Directs the Secretary of the Treasury to issue regulations to carry out the purposes of this paragraph.
Directs the Comptroller General to study the operation and effectiveness of these provisions and to report findings to specified congressional committees no later than April 1, 1989.
Subpart L: Limitation on Bonds - Amends Federal law to repeal the limitation on the amount of Government bonds issued to and held by the public with interest rates exceeding 4.25 percent per year.
Subpart M: Pension Funding Requirements - Chapter 1: Modifications of Minimum Funding Standard - Amends the IRC and the Employee Retirement Income Security Act of 1974 (ERISA) to increase the amount charged to the funding standard account in the case of single employer defined benefit plans having more than 100 participants and an unfunded current liability for any plan year. Sets forth the formula for determining the amount of this increase.
Amends ERISA provisions relating to unpredictable contingent event benefits.
States that, with respect to plan years 1988 and thereafter, certain regulations that permit, for pension plan funding purposes, asset valuations based on a range of other than market value shall have no force and effect.
Amends the IRC and ERISA to: (1) revise provisions governing the period during which employer contributions to pension plans may be made after the close of a plan year; (2) require quarterly estimated payments; and (3) set an interest rate to be applied in the event of contribution underpayments.
Amends the IRC to increase from five percent to ten percent the rate of the initial tax on the amount of the accumulated funding deficiency when an employer fails to meet minimum pension plan funding standards.
Amends ERISA to require an employer who fails to meet minimum funding standards to notify plan participants and beneficiaries under the plan of such failure.
Amends ERISA to impose a lien upon all property and property rights of any person who fails to meet minimum funding standards and of any other person belonging to the same controlled group as that person. Requires the offending person to notify the corporation of such failure.
Amends the IRC to provide for joint and several liability with respect to liability for taxes on the failure to meet minimum funding standards in cases when the employer is a member of a controlled group.
Amends the IRC and ERISA with respect to waivers in connection with payments required to meet minimum funding standards, including provisions relating to interest on payments of waived contributions. Prohibits waivers for any plan year for which the plan in question has an unfunded current liability.
Makes other funding changes in both the IRC and ERISA, including revisions of amortization periods applicable to the funding standard account.
States that the maximum amount of the income tax deduction for employer contributions to defined benefit plans having more than 100 participants shall not be less than the unfunded current liability.
Chapter 2: Treatment of Plan Terminations - Amends the Employee Retirement Income Security Act of 1974 (ERISA) to provide that standard termination procedures are available only when plan assets are sufficient to meet termination liability.
Revises provisions for distress terminations. Provides that bankruptcy proceedings are not a separate basis for distress termination. Requires that all members (not only a substantial number of members) of a controlled group satisfy the distress termination criteria. Authorizes the Pension Benefit Guaranty Corporation (PBGC) to make arrangements with contributing spouses and members of their controlled groups who may become (as well as those who are) liable for specified termination liability payments.
Bases employer liability to participants upon the total outstanding amount of termination liability.
Bases employer liability to the PBGC on the total amount of the unfunded guaranteed benefits, as of the termination date, of all plan participants and beneficiaries, together with specified interest.
Imposes a lien where there is significant unfunded current liability of a single employer defined benefit plan. Imposes such lien in favor of the plan when the funded current liability percentage of the plan is less than 70 percent and the unfunded current liability of the plan is greater than $25,000,000. Imposes such lien upon the property and rights to property of the contributing sponsor and each member of the controlled group. Sets forth requirements for the amount and period of such lien and for its enforcement.
Chapter 3: Increases in Premium Rates - Increases PBGC premium rates for employers maintaining single employer defined benefit plans under ERISA plan termination insurance provisions. Increases the flat-rate pre-participant premium to $14. Charges an additional exposure-related premium. Bases a formula for determining such exposure-related premium on an amount equal to $6 for every $1,000 of unfunded current liability, divided by the number of plan participants. Limits the aggregate increase in the per-participant premium by reason of the exposure-related premium to $70, but raises the amount of such cap on the basis of increases in the contribution and benefit base. Lowers the amount of such cap on the basis of certain previous contributions. Exempts plans with no more than 100 participants from such exposure-related premium. Provides for adjustments of such premium for plans with no more than 150 participants.
Makes the contributing sponsor (as well as the plan administrator) of a single employer plan liable for premium payments. Makes each member of a controlled group liable for any premiums required to be paid by such contributing sponsor.
Establishes a separate revolving fund to which the amount of both the flat-rate premium increases and the exposure-related premiums shall be credited. Allows transfers of such amounts to other funds, but prohibits their use to pay PBGC administrative expenses or benefits under any plan terminated before January 1, 1988, unless no other PBGC assets are available for such purpose.
Part II: Technical Corrections - Technical Corrections Act of 1987 - Subpart A: Technical Corrections to Tax Reform Act of 1986 - Amends the IRC to make a technical adjustment to an assessment rule applicable when the owner of a large amount of cash is not identified.
Revises the rate of the accumulated earnings tax on corporations from a variable rate based on income below and in excess of $100,000 to a flat 28 percent of accumulated taxable income.
Makes a technical amendment relating to the exemption of certain individuals from the requirement to file an income tax return.
Amends IRC and Social Security Act provisions relating to nonresident aliens temporarily in the United States for the purpose of studying at vocational or other recognized nonacademic institutions.
Amends the IRC to delete provisions describing the treatment of Social Security benefits for purposes of defining earned income.
Amends IRC provisions relating to the two percent floor on miscellaneous itemized deductions to: (1) add provisions concerning the coordination of such limitation with the limitation on the tax deduction for trade and business expenses; and (2) revise the determination of adjusted gross income of estates and trusts with respect to such limitation.
Limits the tax deduction of expenses in connection with portions of dwelling units allocated to business uses.
Amends provisions governing the computation of the earnings and profits of certain foreign corporations for purposes of determining the effect of depreciation on such earnings and profits.
Amends the IRC with regard to the application of the accelerated cost recovery system (ACRS) in cases of: (1) certain property placed in service in churning transactions; (2) certain transfers; and (3) certain property subject to U.S. tax and used by a foreign person or entity.
Permits greater taxpayer discretion in using the 150 percent declining balance method of depreciation for ACRS purposes and specifies the applicable recovery period to be used in such cases.
Terminates special rules for the tax treatment of sound recordings for property placed in service after 1985.
Makes other technical amendments and corrections relating to provisions: (1) modifying the ACRS; and (2) limiting expensing of depreciable assets.
Revises Tax Reform Act (TRA) provisions specifying the effective dates of various provisions of new law.
Makes technical amendments and corrections to a number of transitional rules provided in the TRA with respect to urban renovation projects. Makes technical amendments and corrections to the Tax Reform Acts of both 1986 and 1984 concerning property treated under prior tax acts.
Adds a number of projects to those covered under special transitional rules. Amends the TRA concerning the applicability of modifications of the ACRS to a number of specific properties.
Makes technical amendments and corrections to IRC and TRA provisions relating to transition property with respect to the former regular investment tax credit. Adds: (1) an exception to the application of certain adjustment rules relating to such credit; and (2) a number of properties to be considered as transition property. Revises ordering rules governing determinations as to whether certain business related credits are used in a taxable year or as a carryback or carryforward.
Makes technical amendments to TRA provisions relating to the effective 15-year carryback of existing carryforwards of steel companies. Establishes rule criteria to apply to overpayments under this section.
Amends the IRC special rule governing a pass-through of the income tax research credit.
Amends the IRC to disallow use of any depreciation deduction with respect to: (1) any trademark or trade name expenditure; or (2) any railroad grading or tunnel bore.
Makes technical amendments and corrections to TRA provisions relating to the modification of the investment tax credit for certain rehabilitation expenditures.
Makes technical amendments to the IRC with respect to the low-income housing credit, including: (1) amendments of special rules for nontaxable transfers; (2) the addition of an exception to rules governing basis reduction for certain residential rental units; (3) the exclusion from the eligible basis of a building of amounts deducted for depreciation; (4) the addition of provisions applicable to rent-restricted units in cases when Federal rental assistance is reduced as a tenant's income increases; (5) provisions relating to limitations on the aggregate credit allowable with respect to projects located in a State; and (6) a prohibition of any carryback of the low-income housing credit before 1987.
Corrects a reference in the Merchant Marine Act, 1936.
Makes technical amendments and corrections to IRC and TRA provisions relating to capital gains. Revises: (1) the description of taxable income from foreign sources for capital gains purposes; (2) the definition of a "capital gains rate differential" and its applicability to the calculation of the bad debt reserves of certain financial institutions; and (3) provisions dealing with incentive stock options.
Makes technical amendments to the TRA and the IRC to: (1) revise and limit the tax exclusion for the discharge of qualified farm indebtedness; and (2) provide for its coordination with other tax exclusions.
Amends provisions relating to gain from the disposition of interests in oil, gas, geothermal, and other mineral properties.
Makes technical amendments and corrections to the IRC and the TRA with respect to tax shelter and interest limitations, including provisions relating to: (1) interests in passive activities; (2) methods of accounting; (3) the definition of a "qualified investor" for purposes of the transitional rule for interests in low-income housing projects; (4) the phase-in of the limitation on investment interest; and (5) determinations of indebtedness for purposes of the personal interest disallowance, including provisions related to qualified residence interest.
Makes technical amendments and corrections to TRA and IRC corporate tax provisions. Revises the percentage to be used in computing the deduction for dividends received from certain foreign sales corporations. Includes amendments relating to: (1) the reduction of corporate shareholders' basis in stock by the nontaxed portion of extraordinary dividends; (2) the limitation on net operating loss carryforwards and certain built-in losses following a change in corporate ownership, including provisions relating to built-in gains and gains attributable to stock acquisitions (section 338 gains), rules relating to constructive stock ownership, and treatment of foreign corporations; and (3) recognition of gain and loss on distributions of property in corporate liquidations.
Restructures IRC provisions dealing with transfers of partnership and trust interests by corporations.
Makes technical amendments relating to: (1) transfers of property from the United States to foreign corporations; (2) sales or exchanges of stock in certain foreign corporations; and (3) the treatment of C corporations that elect subchapter S status.
Adds to the IRC provisions dealing with special allocation rules for certain partnership transactions.
Makes technical amendments and corrections concerning: (1) the definition of "related persons" with respect to the installment method of accounting; (2) the treatment of amortizable bond premium as interest; (3) certain entities not to be treated as corporations, including a special rule for persons holding income interests; (4) the excise tax on undistributed income of regulated investment companies, including qualification rules and the addition of provisions requiring the reduction of capital gain net income by the amount of a company's net ordinary loss for a given calendar year; (5) the treatment of business development companies; and (6) the treatment of shield funds as separate corporations, including a special rule for abnormal redemptions.
Makes technical amendments to TRA and IRC provisions with respect to real estate investment trusts, including: (1) provisions specifying asset and income requirements; (2) certain definitions; (3) distribution requirements; and (4) the excise tax on undistributed income of such trusts.
Makes technical amendments to IRC provisions dealing with the taxation of real estate mortgage investment conduits (REMICs). Amends the IRC to impose a 34 percent tax on each REMIC's net income from foreclosure property. Reduces the amount of taxable income of a REMIC by the amount of such tax.
Imposes a tax on contributions to a REMIC after the startup day in an amount equal to the amount of the contribution. Lists exceptions to such tax.
Makes corrections to TRA and IRC rules for accruing the original discount on regular interests and similar debt instruments.
Amends the TRA to direct the Secretary of the Treasury (Secretary) to: (1) study the operation of REMIC amendments and their competitive impact on savings and loan and similar institutions; and (2) report the results to specified congressional committees by January 1, 1990.
Makes technical amendments and corrections to IRC provisions with respect to the alternative minimum tax, including provisions relating to: (1) the treatment of taxes on dividends from Puerto Rico and U.S. possession corporations; (2) adjustments applicable to individuals and to corporations; (3) tax preference items; and (4) the denial of certain losses and the determination of the amount of such losses.
Disallows the deduction for personal exemptions in calculations to determine the taxable income of a noncorporate taxpayer for minimum tax purposes.
Adds to the TRA provisions to reduce the amount of minimum taxable income for qualified taxpayers by the amount of the agreement vessel depreciation adjustment.
Amends accounting provisions of the TRA and the IRC. Directs the Secretary to prescribe regulations as necessary to prevent the use of related parties, pass-through entities, or intermediaries to evade certain limitations on the use of the cash method of accounting. Includes technical amendments of provisions relating to: (1) the special rule for the spudding of oil or gas wells; (2) capitalization and inclusion in inventory costs of certain expenses; (3) accounting method modifications for long-term contracts, including the addition of provisions permitting the Secretary to prescribe a simplified procedure for allocation of costs in certain cases; (4) the taxable years of certain entities, such as partnerships and common trust funds; (5) allocation of installment indebtedness, including provisions dealing with dispositions of personal property under revolving credit plans and installment obligations arising out of certain stock or securities sales; (6) disallowance of the use of the installment method of accounting for certain obligations; and (7) income attributable to utility services.
Makes technical amendments and corrections to TRA and IRC provisions concerning financial institutions. Includes amendments with respect to: (1) the credit for investment in certain depreciable property in cases when the mutual savings bank or other financial institution is a lessee; (2) interest incurred to carry tax-exempt bonds, including the addition of properties subject to transitional rules and of provisions relating to small issuers, refunding obligations, and composite issues; and (3) the treatment of losses on deposits or accounts in insolvent financial institutions, including provisions allowing an institution whose deposits are not insured under Federal law to elect to treat losses on account of its bankruptcy or insolvency as ordinary losses.
Makes technical amendments to the TRA and IRC with respect to insurance products and companies. Includes amendments relating to: (1) phase-in provisions for insurance companies whose income is now taxable but was not previously subject to taxation; (2) the treatment of certain dividends and tax-exempt interest; (3) the discounting of unpaid losses and certain unpaid expenses; and (4) the alternative tax for certain small companies. Amends provisions of the Tax Reform Act of 1984 that permit a mutual life insurance company to elect to treat individual noncancellable accident and health policies as cancellable.
Delays the effective date for diversification requirements with respect to accounts for certain variable contracts that provide for the payment of an immediate annuity.
Makes a technical amendment in the Social Security Act concerning simplified employment pensions (SEPs).
Amends IRC and TRA provisions dealing with limitation and nondiscrimination requirements applicable to pensions and deferred compensation plans. Includes amendments relating to: (1) the treatment of married individuals filing separate returns and living apart for purposes of the limitation on the deduction for qualified retirement contributions; (2) nondeductible contributions to individual retirement plans, including the institution of a $50 penalty for failure to report designated nondeductible contributions; (3) distributions on deferrals in excess of the $7,000 limitation on the exclusion from gross income; (4) adjustments to limitations on contributions and benefits under qualified plans; (5) modifications of provisions governing tax-deferred compensation plans of State and local government and of tax-exempt organizations, including a new criterion for plan eligibility; (6) special rules for SEPs, including a technical amendment to the Social Security Act and a new provision prohibiting employee election of a salary reduction arrangement in cases when the SEP does not meet the requirements necessary to ensure the distribution of excess contributions; (7) the application of nondiscrimination rules to integrated plans; (8) minimum employee coverage requirements for qualified plans, including new provisions to address employers having only highly compensated employees; (9) minimum vesting requirements, including technical amendments of the Employee Retirement Income Security Act of 1974; (10) certain definitions; (11) cash or deferred arrangements, including new provisions to govern distributions upon the termination of a plan or the disposition of either a corporation's assets or its interest in a subsidiary; and (12) nondiscrimination requirements for employer matching contributions, employee contributions, and tax-sheltered annuities.
Amends TRA and IRC provisions dealing with the treatment of distributions and various other aspects of pensions and deferred compensation plans. Includes technical amendments and corrections with respect to: (1) the taxation of distributions; (2) the uniform additional tax on early distributions from qualified retirement plans, including the repeal of provisions triggering additional tax when an employee receives certain distributions before reaching age 59 1/2; (3) revision of the class of taxpayers permitted to elect to treat certain lump-sum distributions received in 1987 as if they were received in 1986; (4) the tax on nondeductible contributions to qualified employer plans; (5) the excise tax on the reversion of qualified plan assets to an employer; (6) the excise tax on excess distributions from qualified retirement plans, including an addition to the rules for computing excess retirement accumulation; and (7) the tax treatment of the Federal Thrift Savings Fund. Makes technical amendments to the Retirement Equity Act of 1984 and to the Employee Retirement Income Security Act of 1974.
Makes technical amendments and corrections to TRA and IRC provisions relating to employee benefits and employee stock ownership plans (ESOPs). Includes amendments with respect to: (1) the loss of the tax-exempt status of any organization that is part of a plan failing to meet certain requirements; (2) cafeteria plans; (3) technical amendments of the Social Security Act; (4) the definition of the terms "wages" and "compensation" for certain purposes; (5) the imposition of an excise tax on funded welfare benefits funds that include discriminatory employee benefit plans; and (6) the deductibility of the health insurance costs of self-employed individuals.
Amends the IRC to revise provisions relating to the estate tax deduction for proceeds received from a sale of employer securities to an employee stock ownership plan (ESOP) or worker-owned cooperative. Makes such a deduction available only if: (1) the decedent directly owned the securities immediately before death; and (2) after the sale, the securities are either allocated to participants or held for future allocation in connection with certain exempt loans or transfers of assets.
Prohibits, except in a bona fide business transaction, the treatment of employer securities as allocated or held for future allocation insofar as they are so categorized in substitution of other employer securities so designated.
Applies the deduction to any sales of qualified employer securities (current law applies only to sales made by the executor of the estate).
Prohibits the amount of the deduction from exceeding: (1) the amount that would lead to a reduction in estate tax liability (before credits) equal of $750,000; or (2) 50 percent of the taxable estate.
Disallows proceeds from being taken into account when: (1) they exceed the net sale amount of dispositions of employer securities by the plan during the year preceding the sale in question; (2) they are attributable to transferred assets (except for assets held by the ESOP on February 26, 1987); (3) the sale takes place after the estate tax return filing deadline; or (4) the decedent received the securities under certain specified conditions.
Applies the deduction to employer securities that are: (1) issued by a domestic corporation having no stock outstanding that is readily tradable on an established securities market; (2) includable in the gross estate of the decedent; and (3) would have been includable if the decedent had died within a specified time period.
Revises the requirements governing the contents of the written statement to be submitted by the executor of the decedent's estate in order to qualify for the deduction.
Imposes an excise tax on ESOP dispositions of employer securities for which an estate tax deduction was allowed. Sets forth the amount of tax applicable to relevant taxable events as follows: (1) 30 percent of the amount realized from any disposition of employer securities by an ESOP or eligible worker-owned cooperative within three years of the group's acquisition of qualified employer securities; (2) 30 percent of the amount realized from a disposition (not within three years after acquisition) that occurs before allocation of such securities to participants' accounts in cases when the proceeds are not allocated; or (3) 30 percent of the repayment amount in cases of a payment by an ESOP of any part of a loan used to acquire employer securities from transferred assets.
Sets out the ordering rules to govern dispositions of employer securities for purposes of this excise tax and another specified excise tax relating to ESOPs.
Makes the excise tax inapplicable to: (1) dispositions to employees, in certain cases; (2) exchanges associated with the liquidation of a corporation into a cooperative or with other reorganizational purposes; and (3) sales effected to meet IRC diversification requirements relating to pension trusts.
Places liability for the excise tax on the employer maintaining the ESOP or the eligible worker-owned cooperative.
Amends TRA and IRC provisions relating to: (1) loans used to acquire employer securities, including provisions relating to the period of applicability of the exclusion of interest on such loans; and (2) qualification requirements for ESOPs.
Makes technical amendments and corrections to foreign tax provisions of the TRA and the IRC. Includes amendments relating to: (1) limitations on the foreign tax credit, including a definition of "financial services income" for purposes of such limitations; (2) source rules for personal property sales, including the addition of a special rule for certain stock sales by residents of Puerto Rico; (3) the treatment of gain from the sale of stock of a foreign corporation when the gain would ordinarily be sourced in the United States but, pursuant to a treaty obligation of the United States, the taxpayer chooses to treat the gain as foreign source income; (4) rules for allocating interest, and so forth to foreign source income, including revisions to phase-in rules; (5) the taxation of income earned through foreign corporations, including special rules for certain captive insurance companies and for determining the earnings and profits of a controlled foreign corporation for purposes of computing amounts to be included in the gross income of U.S. shareholders; (6) deductions for dividends received from certain foreign corporations; (7) transitional rules with regard to U.S. possession source income; (8) the disposition of investment in U.S. real property; (9) certain passive foreign investment companies, including the interest charge on tax deferrals, the treatment of qualified electing funds, and a special rule for the treatment of certain foreign corporations owning at least 25 percent stock in a domestic corporation; (10) the branch profits tax on foreign corporations; (11) the treatment of deferred payments and appreciation arising out of business conducted by foreign corporations or by nonresident aliens within the United States; (12) withholding tax on amounts paid by partnerships to foreign partners; (13) income of foreign governments, including the addition of limitations on the exclusion from gross income of such income; (14) the treatment of losses of separate business units of dual residence corporations; (15) foreign currency transactions, including provisions for determining foreign taxes and the earnings and profits of foreign corporations; (16) tax treatment of the Virgin Islands (V.I.), including provisions for the coordination of U.S. and V.I. income taxes; and (17) the addition of provisions relating to the coordination of U.S. treaty obligations, amendments made by the TRA, and technical corrections effected by this Act; (18) taxation of domestic international sales corporation (DISC) income to tax-exempt shareholders; and (19) treatment of shared foreign sales corporations.
Makes technical amendments and corrections to TRA and IRC provisions with respect to tax-exempt bonds. Includes amendments relating to: (1) various types of State and local bonds, including qualified small issue bonds, qualified student loan bonds, qualified mortgage bonds, and qualified 501(c)(3) bonds; (2) requirements applicable to certain private bonds, such as issues of scholarship funding bonds and volunteer fire department bonds; (3) arbitrage bonds, including refunding bond provisions dealing with governmental unit issuing $5,000,000 or less of bonds; (4) transitional rules relating to refundings and to the volume cap; (5) termination of the mortgage bond policy statement requirement; (6) provisions relating to certain established State programs, including a technical amendment of the Mortgage Subsidy Bond Tax Act of 1980; and (7) transitional rules for specific facilities.
Makes technical amendments and corrections to IRC and TRA provisions dealing with the income taxation of trusts and estates, including provisions relating to: (1) reversionary interests; (2) the taxable year of trusts; (3) exceptions for charitable trusts, and private foundations and certain trusts and estates from the penalty tax for failure to pay estimated income tax.
Makes technical amendments and corrections of the IRC and TRA relating to the unearned income of minor children, including new provisions addressing the alternative minimum tax.
Makes technical amendments and corrections to IRC and TRA provisions with respect to the generation-skipping transfer tax, including provisions concerning: (1) a deduction from such tax for certain transfers for public, charitable, and religious uses; (2) special rules for determining the inclusion ratio for certain inter vivos transfers; (3) disregard of certain support obligations arising under State law when determining a person's interest in a trust; (4) the treatment of certain partial terminations of trusts and of nonreportable gifts to trusts; and (5) special rules governing certain transfers to grandchildren.
Makes technical amendments and corrections to compliance and tax administration sections of the TRA and the IRC, including amendments relating to: (1) the penalty for tax underpayment due to negligence and fraud; and (2) reporting requirements applicable to real estate transactions, including provisions excluding certain farm managers from the definition of "broker" and prohibiting a real estate reporting person from separately charging a customer for making certain required filings. Creates an exception from information reporting requirements for certain classified and confidential contracts between a Federal executive agency and another person.
Makes technical amendments with respect to certain tax-exempt organizations subject to corporate estimated tax rules.
Broadens the scope of veterans' service-connected disability payments exempt from levy for tax collection purposes.
Declares that certain salary recommendations submitted by the President for special trial judges shall not be effective to the extent such salaries are not equal to 90 percent of the rate for Tax Court judges and are not paid in the same installments as Tax Court judges' salaries.
Makes technical amendments and corrections to TRA and IRC provisions with respect to retirement pay for U.S. Tax Court judges.
Amends the IRC to include the refundable earned income credit in deficiency assessments.
Makes technical amendments and corrections to TRA and IRC provisions with respect to the tax-exempt status of certain title holding corporations or trusts (an exception initiated by the TRA).
Makes other technical amendments and corrections to TRA and IRC provisions, such as amendments relating to the excise tax on gasoline and its companion floor stocks tax.
Makes technical amendments and corrections to the IRC and to the Tax Reform Acts of both 1984 and 1986 relating to: (1) tax-exempt entity leasing provisions as applicable to tax-exempt controlled entities; (2) the nonrecognition of gain or loss with respect to certain transfers in connection with corporate reorganizations and the treatment of distributions in such cases; (3) the deductibility of excess golden parachute payments; (4) accounting changes with respect to designated settlement funds; (5) the exclusion from gross investment income of dividends from certain subsidiaries of life insurance companies; and (6) special rules for stripped bonds of tax-exempt organizations.
Repeals provisions added to the Tariff Act of 1930 by the Tax Reform Act of 1986 with respect to compensation of ocean freight forwarders.
Makes technical amendments related to the Medicare program and to pension plans, including technical amendments to the Employee Retirement Income Security Act of 1974 and the Public Health Service Act. Adds to the IRC new provisions concerning elections under qualified pension arrangements with respect to spousal benefits.
Subpart B: Amendments Related to Tax Provisions in Other Legislation - Makes technical amendments and corrections to IRC provisions relating to: (1) directions to the Secretary to provide regulatory guidance to govern circumstances when a refund of the excise tax on certain chemicals shall be made directly to an exporter; (2) substances subject to the excise tax on imported chemicals; (3) the addition of an exemption of regulated investment companies and real estate investment trusts from the environmental tax; (4) the tax on certain fuels to fund the Leaking Underground Storage Tank Trust Fund; (5) taxation of qualified methanol and ethanol fuel; (6) the excise tax exemption for gasoline used in aviation and for the Leaking Underground Storage Tank Trust Fund tax as applied to gasoline used in aviation and in trains; (7) the floor stocks tax on gasoline; (8) the ordering of amendments made by the Superfund Revenue Act of 1986 and by the Harbor Maintenance Revenue Act of 1986 of provisions related to the excise tax on fuel used in commercial transportation on inland waterways; and (9) exemption from the port use excise tax for cargo transported between Alaska, Hawaii, and any U.S. possession for ultimate use or consumption at the relevant destination.
Amends the Harbor Maintenance Revenue Act of 1986 to delay from November 17, 1987, to April 1, 1988, the due date for the Secretary of the Treasury's study of cargo diversion.
Makes technical amendments to the Omnibus Budget Reconciliation Act of 1986 with respect to tax-exempt mutual or cooperative telephone or electric companies, as well as pension plans under the IRC and the Employee Retirement Income Security Act of 1974.
Part III: Miscellaneous Provisions - Subpart A: Individual - Amends the IRC to provide that the prohibition against indirect income tax deductions through pass-through entities shall not apply to any regulated investment company whose shares are: (1) continuously offered pursuant to a public offering; (2) regularly traded on an established securities market; or (3) held by or for at least 500 persons at all times during the taxable year.
Permits a parent to claim the unearned income of a child on the parent's income tax return when the child's income consists solely of unearned income of more than $500 but less than $5,000. Exempts such unearned income from the imposition of gift tax.
Provides that amounts paid for qualified home improvements to mitigate radon gas exposure shall be treated as deductible medical care expenses for income tax purposes.
Makes retroactive to taxable years 1979 through 1985 a specified change made in the income tax treatment of foster care payments in the context of their exclusion from income.
Permits an 80 percent income tax deduction of contributions to or for an institution of higher education, even if the taxpayer receives, as a result of paying such an amount, the right to seating or the right to purchase seating in the institution's athletic stadium.
Extends to ambassadors and foreign service officers special rules with respect to the rollover of gain on the sale of a principal residence.
Subpart B: Depreciation - Amends the IRC with respect to the income tax depreciation deduction as applied to citrus trees.
Amends an IRC rule for computing the income tax credit for investments in long-term hydroelectric projects delayed by natural disasters.
Subpart C: Corporations - Amends IRC and TRA provisions relating to: (1) net operation losses of certain financial institutions following ownership change in title 11 cases; (2) recognition of gain or loss on distributions by cooperative housing associations in the context of a complete liquidation; and (3) ownership changes in corporate reorganizations resulting from certain bankruptcy proceedings.
Subpart D: Tax Administration - Chapter 1: Disclosure of Return Information - Amends the IRC to permit, under certain circumstances, the disclosure of income tax returns and return information to officials of municipalities with a population of more than 1,500,000. (Present law allows such disclosure only to municipalities with a population in excess of 2,000,000.)
Chapter 2: Taxpayer Rights - Omnibus Taxpayer Bill of Rights - Requires the Secretary of the Treasury (Secretary) to prepare a statement setting forth in nontechnical terms: (1) the rights and obligations of a taxpayer and of the Internal Revenue Service (IRS) during a tax audit; (2) the procedures by which a taxpayer may appeal adverse decisions, prosecute refund claims, and file complaints; and (3) the procedures that the IRS may use in enforcing revenue laws. Directs the Secretary to transmit drafts of such statement to specified congressional committees and to distribute the final statement to all taxpayers the Secretary contacts with respect to the determination or collection of any tax (other than the provisions of tax forms).
Requires the IRS, upon taxpayer request, to permit any taxpayer, at his or her own expense, to record any interview regarding the determination or collection of any tax. Authorizes the IRS interviewer to record such interview if the taxpayer has been given prior notice and is provided, upon request and payment of reproduction costs, with a transcript of the recording. Requires the interviewer to explain to the taxpayer the audit process, including the taxpayer's rights with respect to the process.
Directs the Secretary, within one year of this Act's enactment, to issue regulations with respect to the time and place of certain taxpayer interviews and examinations of taxpayer records.
Authorizes the Secretary to abate any portion of any penalty or interest imposed on any deficiency attributable to erroneous advice in writing given to a taxpayer by an IRS officer or employee in response to such taxpayer's specific inquiry.
Authorizes the IRS Ombudsman, upon application filed by a taxpayer, to issue a Taxpayer Assistance Order if, in the determination of the Ombudsman: (1) the taxpayer is suffering or is about to suffer from an unusual or irreparable loss as a result of the manner in which the internal revenue laws are being administered by the Secretary; and (2) the Secretary has failed to carry out any of his or her duties or has violated any provision of law. Allows the terms of a Taxpayer Assistance Order to require the Secretary to release property of the taxpayer levied upon or to cease or refrain from certain actions.
Directs the Secretary, within 90 days of this Act's enactment, to issue regulations with respect to Taxpayer Assistance Orders, including provisions to assure full, fair, and impartial due process for affected taxpayers.
Amends the Inspector General Act of 1978 and other Federal law to establish within the Department of the Treasury an Office of Inspector General. Transfers to such Office the existing audit and investigation units of the Department. Sets forth criteria with respect to: (1) the authority of the Inspector General to conduct an investigation; and (2) the authority of the Secretary in cases of audits or investigations requiring access to information of a sensitive or confidential nature. Allows the Secretary to prohibit investigations under specified circumstances. Restricts disclosure by the Inspector General of tax returns and return information.
Prohibits records of tax enforcement results from being used to evaluate certain IRS personnel or to impose or suggest production quotas. Requires district directors to certify compliance with this mandate on a monthly basis.
Requires the Secretary to certify that a rule proposed by the IRS is substantially the only alternative that meets the mandate of the relevant statute in order for the rule to be considered an interpretative rule (and thereby not subject to analyses under the Regulatory Flexibility Act).
Amends the Regulatory Flexibility Act to require regulatory flexibility analyses to include consideration of both the direct and indirect beneficial and negative effects of a proposed or final rule.
Amends the Internal Revenue Code to direct the Secretary, with limited exceptions, to send a preliminary letter of deficiency to a taxpayer prior to the mailing of a deficiency notice. Specifies required contents for tax due notices and deficiency notices, including the basis of the deficiency and a breakdown of the total amount into tax, interest, and penalty.
Directs the Secretary, within 90 days of this Act's enactment, to issue regulations requiring all IRS personnel to explain and support their position in assessing any additions to tax or penalties. Requires the Comptroller General to study IRS procedures with respect to such assessments and to present findings to specified congressional committees.
Authorizes the Secretary to enter into a binding agreement with a taxpayer under which the taxpayer may pay tax liability in installments if the Secretary determines that such an agreement will facilitate collection of the liability. Permits the Secretary, after proper notice and a hearing, to modify or annul the agreement upon the finding that the financial condition of the affected taxpayer has significantly changed Permits the Secretary to modity or annul an agreement if the taxpayer fails to pay any installment or any other tax liability when due.
Extends from ten to 30 days the period between the required notice to a person who neglects or refuses to pay tax liability and a levy on such person's salary, wages, or other property. Specifies information that must be incorporated in such notice, including possible alternative actions and the appropriate appeals procedures. Adds to the circumstances triggering termination of such a levy: (1) an agreement between the taxpayer and the Secretary for payment of the liability; and (2) the Secretary's determination that the taxpayer's financial condition precludes enforceability of the liability.
Revises the list of property exempt from levy to: (1) increase the exempt amount permitted for certain personal effects, the property of a business, and wages; and (2) provide an express exemption, except under limited circumstances specified in this Act, for the taxpayer's principal residence, a motor vehicle used by the taxpayer as the primary means of transportation to work, and any tangible personal property essential to the operation of the taxpayer's business in cases when a levy would prevent the taxpayer from carrrying on such business.
Prohibits a levy on any property when levy and sales expenses would exceed either the liability for which the levy is made or the fair market value of the levied property. Permits the Secretary to demand surrender of bank accounts only after 21 days in escrow have passed since service of the notice of levy on the accounts. Sets forth situations in which the Secretary must release a levy. Applies to jeopardy levies the administrative and judicial review procedures currently applicable to jeopardy assessments.
Permits a taxpayer to bring a civil action against the United States in the Tax Court for judicial review of jeopardy levies and assessments. (Under current law an action for judicial review of jeopardy assessments may be filed only in district court.) Increases the time during which a taxpayer may petition for such review. Describes the jurisdictional requirements to be applied to such actions.
Allows an administrative appeal of tax liens.
Grants to the Tax Court exclusive jurisdiction to enjoin premature assessments if the taxpayer has filed a timely petition for review. Provides for review of such injunctive orders by the U.S. Court of Appeals.
Grants to the Tax Court jurisdiction to enforce payment by the Secretary of refunds of overpayment and interest to taxpayers. Places on the Secretary the burden of proof of justifying any failure to refund, credit, or offset relevant amounts with respect to a taxpayer. Entitles a prevailing taxpayer to: (1) an interest rate of 120 percent of the overpayment rate with respect to refunds; and (2) reasonable litigation costs.
Grants to the Tax Court jurisdiction to: (1) review jeopardy assessment sales of assets; and (2) redetermine interest under certain circumstances when a taxpayer claims an overpayment of the interest.
Vests in the Tax Court original jurisdiction over any civil action against the Secretary for the recovery of any tax, additions to tax, and penalties with respect to income, estate, gift, and certain excise taxes.
Authorizes an award of reasonable litigation costs to the prevailing party in proceedings by taxpayers before the Internal Revenue Service.
Permits a taxpayer to bring a civil action in district court for actual damages resulting from the failure of any Federal officer or employee to release a tax lien on the taxpayer's property.
Permits a civil cause of action in district court for damages resulting from the careless, reckless, or intentional disregard of internal revenue laws by any Federal officer or employee. Denies damage awards in cases of contributory negligence.
Authorizes a damage award, to a $10,000 maximum, to the United States in cases of frivolous or groundless claims by a taxpayer.
Amends the Internal Revenue Code to prescribe criminal penalties for: (1) any investigation or surveillance authorized or conducted by an officer or employee of the United States in connection with Federal tax laws that inquires into the beliefs, associations, or activities of any individual or organization; or (2) the maintenance of any records containing information derived from such an investigation.
Establishes in the Internal Revenue Service the Office for Taxpayers Services, under the supervision of an Assistant Commissioner of the Internal Revenue. Directs this Assistant Commissioner to: (1) be responsible for telephone, walk-in, and educational services, and for the design and production of tax and information forms; and (2) prepare annually for presentation to specified congressional committees a joint report (with the Taxpayer Ombudsman for the IRS) on the quality of taxpayer services.
Subpart E: Tax-Exempt Organizations - Deems certain grants made by a private foundation to have a charitable purpose.
Amends the Tax Reform Act of 1984 with regard to a certain operating foundation.
Amends the Tax Reform Act of 1969 with regard to the business holdings of certain private foundations.
Subpart F: Excise Taxes and Fees - Amends the IRC to provide that the harbor maintenance tax shall not be imposed in cases involving the transportation of passengers on trips: (1) originating on the U.S. mainland and ending in Hawaii, Alaska, or a U.S. possession; or (2) originating in Hawaii, Alaska, or a U.S. possession and ending on the U.S. mainland.
Exempts from the harbor maintenance tax charitable and relief cargo exported for use or consumption outside the United States by a tax-exempt nonprofit organization.
Revises the definition of "first retail sale" in connection with the truck excise tax.
Repeals the windfall profit tax on domestic crude oil.
Amends the Consolidated Omnibus Budget Reconciliation Act of 1985 to prohibit the charging of a customs services fee with respect to certain transfers of goods wholly produced in certain facilities located on the U.S. border.
Subpart G: Tax Exempt Bonds - Amends IRC mortgage revenue bond provisions to create a special rule in connection with income requirements for high housing cost areas.
Directs the Secretary of the Treasury to amend certain regulations relating to mortgage bond purchase price requirements.
Declares that certain arbitrage regulations shall be prospective in effect and shall not be issued as temporary regulations. Amends the IRC to provide that rebate to the United States shall not be required on bona fide debt service funds of governmental issues.
Subpart H: Low-Income Housing Credit - Amends the IRC with respect to the low-income housing income tax credit, including amendments that: (1) modify waiver authority in connection with time requirements applied to federally-assisted or federally-insured buildings; (2) permit the use of State median gross income for determining qualified low-income housing project status; (3) modify the period for determining the adjusted basis for existing buildings; (4) permit corporate ownership of partnerships; (5) create an exception to the transfer of ownership rule with respect to certain partnerships; and (6) add a special rule relating to the eligible basis for certain single-family housing.
Subpart I: Pension provisions - Amends IRC pension provisions to: (1) specify the required beginning date for governmental plans; and (2) create a special rule with respect to the limitation of benefits under State and local government defined benefit plans.
Amends the IRC to treat air cargo transportation as a fringe benefit for income tax purposes, thus excluding the value of such service from gross income, when such transportation qualifies as a no-additional-cost service.
Permits a plan maintained by a rural telephone cooperative to be treated as a qualified cash or deferred arrangement (401(k) plan) for income tax purposes.
Exempts: (1) certain Federal plan distributions from the ten percent additional tax on early distributions from qualified retirement plans; and (2) certain deferred compensation from accounting provisions relating to the year in which amounts are included in gross income.
Amends the IRC to include as "collectibles" coins issued under the law of any State, thus requiring their acquisition by an individual retirement account to be treated as a distribution for certain income tax purposes.
Subpart J: Foreign - Amends the IRC source rules for personal property sales to create a special rule for certain financial institutions.
Increases from 50 percent to 67 percent the amount of research and development expenditures that a company must allocate to income from sources within the United States. Establishes a special rule for the qualified research and experimental expenditures required by governmental entities.
Requires companies to report on a consolidated basis with respect to the expenditures associated with this source rule.
Amends IRC transfer pricing rules with respect to mineral income of foreign sales corporations.
Amends the IRC definition of "qualified cooperative" for purposes of taxation of foreign sales corporations to include seafood products. (Current law includes only agricultural and horticultural products.)
Subpart K: Minimum Tax - Amends the IRC with respect to the alternative minimum tax to: (1) revise provisions relating to adjustments based on adjusted current earnings with respect to annuity contracts and timeshares; and (2) allow rural telephone and electric cooperatives to exclude allocations in the nature of patronage dividends when determining net book income.
Subpart L: Insurance - Amends the IRC to state that charitable gift annuities (those owned by an individual who made a tax-deductible charitable contribution to the annuities issuer) are not commercial-type insurance for purposes of determining the tax-exempt status of an organization. Directs the Secretary of the Treasury to revise the table used to determine the amount of a charitable contribution to reflect interest rates and recent mortality experience.
Amends the IRC to treat as life insurance policies certain self-funded death benefit plans maintained by churches for their employees, thus excluding the benefits provided through such plans from gross income for income tax purposes.
Subpart M: Accounting Provisions - Amends the IRC to add provisions to govern the establishment by funeral homes of funeral trusts to receive contributions to pay the funeral costs of individuals. Imposes on such trusts, in lieu of the usual income tax on estates and trusts, a 15 percent annual tax on the taxable income of the trust. Sets forth guidelines with respect to such trusts and the income they generate, including a tax exclusion of amounts accruing to an eligible beneficiary.
Amends the IRC to permit production credit associations and banks for cooperatives an income tax deduction for any reasonable addition to a reserve for bad debts.
Amends the IRC to add provisions relating to the discharge of qualified farm indebtedness of solvent farmers in connection with toxic waste programs.
Provides that certain short-term loans made in the ordinary course of business of certain taxpayer banks or other financial institutions shall not be subject to requirements governing: (1) the current inclusion in gross income of the discounts on such obligations; and (2) the deferral of the deduction for net direct interest expenses allocable to the accrued discount on such obligations.
Provides that, for income tax purposes, grants received from Federal entities shall not be included in the gross income of SEMATECH.
Amends the IRC to: (1) revise the definition of "timber" as applied to evergreen trees with respect to gain or loss attributable to sales and exchanges of timber; (2) disallow the use of the look-back method of computing interest with respect to certain long-term contracts subject to the percentage of completion method of accounting.
Amends the TRA to add a special rule governing the allocation of indebtedness as payment of installment obligations in the case of certain fiscal year taxpayers.
Amends IRC accounting provisions with respect to inventory cost capitalization rules applied to free lance authors and photographers.
Permits a partnership, S corporation, or personal service corporation, unless it is part of a tiered structure, to elect to have a taxable year other than the required one, but generally only if the deferral period of the taxable year elected is three months or less. (Current law requires partnerships, S corporations, and personal service corporations, in most cases, to conform their taxable years to the calendar years used by their owners.)
Subjects the principals of a partnership or S corporation electing to change taxable years to additional estimated tax requirements to offset any tax deferral resulting from such election. Imposes deduction limitations on a personal service corporation that changes taxable years.
Provides that an election with respect to taxable year shall be made by the partnership, S corporation, or personal service corporation and shall be binding on all partners and shareholders.
Sets forth the formula for determining the additional tax requirement when a taxpayer: (1) is a partner or shareholder in at least one such entity during any applicable election years of the entity that end within the taxpayer's taxable year; and (2) has an aggregate deferred tax exceeding $200 with respect to the entity. Describes payment procedures.
Requires the inclusion of specified information on returns filed by partnerships and S corporations that elect to use a non-required taxable year.
Limits the tax deduction permitted to a personal service corporation for amounts paid or incurred with respect to employee-owners when such a corporation: (1) elects to have a taxable year other than the required one; and (2) fails to meet certain minimum distribution requirements regarding non-dividend amounts paid to owners.
Amends the IRC with respect to accounting methods applicable to certain nonrecourse financing on property acquired by a taxpayer from a savings and loan association.
Subpart N: Coordination with Congressional Budget Act of 1974 - Provides that any provision of this Act shall be null and void to the extent it violates specified budget limitations.
Title V: Civil Service and Governmental Affairs Generally - Provides for a three percent pay increase for Federal employees for FY 1988. Requires the President to provide for a pay adjustment for FY 1989 and 1990 for Federal employees as appropriate to reduce outlays by specified amounts. Makes the FY 1988 pay increase for Federal employees inapplicable to Members of Congress.
Cash Management Improvement Act of 1987 - Authorizes the Secretary of the Treasury to collect a charge from each executive agency that does not comply with regulations regarding the timely disbursement of Federal funds through cash, checks, electronic funds transfer, or any other means prescribed by the Secretary. Requires the deposit of such charges in the Cash Management Improvements Fund.
Requires States and Federal agencies to minimize the time elapsing between transfer of funds from the Treasury and the issuance or redemption of checks, warrants, or payments by other means.
Directs the Secretary to issue regulations requiring a State to pay interest on funds from the time of deposit until disbursement. Requires the Government to pay interest to a State that disburses its own funds under a Federal program. Requires the budget submitted by the President to include a statement of such interest payments.
Requires States that receive refunds of grant funds to return such refunds to the executive agency administering the grant program or apply such funds to reduce the amount of funds owed to the State under the grant program. Requires States to account for grant money made available to them as U.S. Government grant money in the accounts of the State.
Provides for periodic audits of the implementation of this Act.
Directs the Secretary to study and make recommendations concerning standards for the establishment of lockbox systems for executive agencies. Defines such a system as the use of locked post office boxes for the receipt of payments. Sets forth a schedule for the implementation of such a system.
Requires a Federal agency or instrumentality which does not receive an appropriation for its deposit into the Employees' Compensation Fund to make such deposit from other funds appropriated to such agency.
Title VI: Labor and Human Resources - Retirement Security Promotion Act of 1987 - Amends the Employee Retirement Income Security Act of 1974 (ERISA) and the Internal Revenue Code (IRC) to add a definition of minimum benefit security level. Sets forth a special rule for such level for plans providing qualified event-contingent benefits. Adds a definition of benefit liabilities for use in determining such level.
Permits asset withdrawals by employers from ongoing single-employer plans which provide for such withdrawals if immediately after the withdrawal: (1) the current value of the assets in the plan is at least the minimum benefit security level; and (2) the current value of the assets in each other single-employer plan maintained by the employer's controlled group is at least the minimum benefit security level. Sets forth special rules for recently amended plans and for mergers, consolidations, and transfers of plan assets. Establishes the right of affected parties to advance notice of plan amendments permitting asset withdrawal. Makes such asset withdrawal provisions apply to multiemployer plans only to the extent provided in regulations prescribed by the Secretary of the Treasury in consultation with the Secretary of Labor. Sets forth a notice requirement for plan asset withdrawal. Exempts permitted asset withdrawals from prohibited transaction rules. Provides that a trust forming a part of a defined benefit plan shall not be treated as failing to constitute a qualified trust solely by reason of permitted withdrawal of plan assets by the employer. Imposes an excise tax on plan asset withdrawals that exceed a specified permissible amount.
Sets forth limitations on employer reversions upon plan termination. Sets forth procedures for distribution of plan assets remaining after satisfaction of all specified liabilities. Requires that the remaining assets of the plan which are attributable to employee contributions be equitably distributed to the participants who made such contributions or to their beneficiaries. Set forth a formula for determining the portion of assets attributable to employee contributions. Requires that, after the distribution of assets attributable to employee contributions, a certain amount of the remaining assets be distributed to participants and beneficiaries in proportion to certain accrued benefits. Allows, after such distributions, the remaining assets to be distributed to the employer if: (1) this does not contravene any law; (2) the plan so provides; and (3) the employer and controlled group members have not terminated a plan with insufficient assets. Sets forth a special rule for recently amended plans. Provides for further distribution to participants and beneficiaries in the absence of a distribution to the employer. Provides for revisions of distributions to prevent certain prohibited discriminations or violations.
Requires a three-year amortization of underfunding of a single-employer plan of a controlled group upon a distribution to an employer from a terminated plan or upon certain transactions involving plan assets. Provides that such requirement shall not apply to multiemployer plans, except as may be prescribed by the Secretary of the Treasury.
Provides for tax-free transfers between certain single-employer plans in the same controlled group. Provides that any amount transferred directly between defined benefits plans (neither of which is a multiemployer plan) maintained by the same employers in the same controlled group, shall not be treated as an employer reversion or includible in gross income.
Revises the rules governing the availability of minimum funding waivers. Requires applications for such waivers to be submitted two and one-half months after the close of the year. Allows such waivers only for substantiated temporary business hardships and requires that such hardship also exist at the controlled group level. Reduces from five to three the number of annual waivers that may be granted with respect to any plan within a 15-year period. Revises provisions for repayment of waived contributions. Revises interest rates for variances from minimum funding standards and for extensions of amortization periods. Adjusts the amortization period for waived funding deficiencies. Requires that notice of application for funding waivers be given to each affected party. Requires such notice to include a description of the extent to which the plan is funded for guaranteed benefits and the benefit liabilities.
Imposes liability for the excise tax on failure to meet minimum funding standards on the members of the employer's controlled group, in addition to the employer.
Increases liabilities arising upon plan termination. Defines "benefit liabilities" to mean all benefits to any person under a terminated plan as of the termination date (including benefits which are not protected under specified provisions). Replaces the term "benefit commitments" with the term "benefit liabilities." Increases from 75 to 100 percent of unfunded guaranteed benefits the amount of liability for distress terminations to the PBGC in excess of 30 percent of the net worth. Makes the liability to the section 4049 trust consist of the total outstanding amount of benefit liabilities under the plan.
Revises provisions relating to the section 4049 trust. Accelerates distributions from such trust by eliminating the requirement that payments to and distributions from such trust be tied to liability payment years.
Increases the single-employer plan benefit guaranty premium to $20 per participant per plan year. Makes the contributing sponsor and each member of its controlled group jointly and severally liable to the PBGC for such single-employer plan premiums, except in plan years in which plan assets exceed the sum of the minimum benefit security level and the premiums due for such plan.
Revises the interest rate on accumulated contributions under IRC requirements for crediting interest on mandatory employee contributions to a defined benefit pension plan. Replaces the five percent interest rate with one equal to 120 percent of the applicable Federal mid-term rate.
Increases minimum funding standards under IRC provisions, for any plan (other than a multiemployer plan) for any plan year if the actuarial value of plan assets is less than 100 percent of the plan's benefit liabilities. Charges to the funding standard account of such a plan the sum of the plan's normal cost for the plan year plus the unfunded benefit liabilities contribution for such year, if such sum exceeds a specified charge, reduced by credits. Sets forth formulas for determining such unfunded benefits liabilities contribution. Revises periods for amortizing certain experience gains and losses. Requires the net experience gain and loss of certain plans to be computed separately and amortized under specified provisions.
Reduces the period during which employer contributions may be made to plans after the close of the year. Requires employers to make installment payments of the estimated required contribution to a plan. Imposes an excise tax on underpayments of such required installments.
Directs the Secretary of Labor to conduct a study of the economic impact of event-contingent pension benefits on private pension plans. Directs the Secretary to report to specified congressional committees by February 1, 1988, on such study, together with legislative recommendations for protection of private pension plans providing event-contingent benefits.
Title VII: Committee on Veterans' Affairs - Amends Federal veterans' benefits provisions to reduce the maximum and minimum percentages (from 75 percent, and 60 percent respectively, to 60 percent, and 40 percent, respectively) of the number of purchases by the Administrator of Veterans Affairs of defaulted loans guaranteed by the Administrator for the financing, purchase, or construction of manufactured homes that may be financed by a loan made by the Administrator. Reduces from 80 to 70 percent the maximum percentage that the Administrator may apply in any fiscal year if necessary to maintain the effective functioning of the veterans' housing loan guaranty program. Terminates such limitations on September 30, 1990.
States that the above changes achieve savings through changes in program requirements for purposes of the Balanced Budget and Emergency Deficit Control Reaffirmation Act of 1987.
Title VIII: Agriculture - Agricultural Reconciliation Act of 1987 - Subtitle A: Agricultural Price Support Programs - Amends the Agricultural Act of 1949 to authorize an alternative feed grain acreage reduction requirement for 1988 through 1990 oat producers.
Provides 1988 through 1990 advance deficiency payments for: (1) wheat and feed grains at between 40 percent and 50 percent of the projected payment rate; and (2) rice and upland cotton at between 30 percent and 50 percent of the projected payment rate.
Provides advance emergency compensation payments for the 1987 through 1990 wheat crops .
Sets forth a sliding 1988 wheat acreage limitation program of between 20 percent and 35 percent based on estimated wheat stocks.
Sets forth similar existing-crop based acreage limitations for the 1988 through 1990 feed grain crops.
Sets minimum 1988 through 1990 producer payments for wheat and feed grain storage at $.0285 per bushel.
Revises 1988 milk price support levels to provide for $.20 and $.25 reductions if estimated purchases will exceed 5,000,000,000 pounds on January 1, and July 1, 1988, respectively.
Amends the Dairy Production Stabilization Act of 1983 to increase the 1988 milk marketing order assessment fee by $.05 per hundredweight. Provides an assessment credit for producers participating in qualified dairy promotion or nutrition education programs.
Amends the Agricultural Act of 1949 to limit 1988 through 1990 transportation loan rate adjustments to not more than the national percentage change plus or minus one percent.
Directs the Secretary of Agriculture to make established price payments to producers of the 1988 through 1990 wheat, feed grain, rice, and upland cotton crops if farm program yields are reduced by more than five percent of 1985 levels.
Subtitle B: Prepayment of Loans - Amends the Rural Electrification Act of 1936 to permit Rural Electrification Administration borrowers to prepay Federal Financing Bank loans without penalties if: (1) private capital is used to replace such loans; and (2) any savings will be used to avoid future rate increases, passed on to customers, or used to improve the borrower's financial strength.
Authorizes a one-time prepayment processing fee.
Permits an electrification loan borrower to invest its own funds, or make loans or guarantees, of up to 15 percent of its total utility plant.
Establishes a program to encourage Rural Electrification Administration borrowers to make deposits into cushion of credit accounts within the Rural Electrification and Telephone Revolving Fund. Sets forth program provisions.
States that the Rural Telephone Bank shall apply its most current cost of money rate at the time of each loan commitment advance. Permits loan prepayment without penalty through September 30, 1988.
Subtitle C: Miscellaneous - Amends the Plant Variety Protection Act regarding plant variety protection fees to: (1) establish late payment penalties; (2) permit investment of funds; (3) authorize judicial action for nonpayment; and (4) authorize appropriations.
Amends Federal law to provide annual appropriations, beginning with FY 1988, to reimburse Commodity Credit Corporation net realized losses.
Amends the Federal Meat Inspection Act to revise labeling requirements for meat and meat food products containing specified amounts of imitation cheese.
Expresses the sense of the Congress that the Administrator of the Environmental Protection Agency should use Clean Air Act authority to require greater use of ethanol as motor fuel.