Text: H.R.6345 — 111th Congress (2009-2010)All Bill Information (Except Text)

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Introduced in House (09/29/2010)


111th CONGRESS
2d Session
H. R. 6345

To amend the Internal Revenue Code of 1986 to adjust personal exemptions for high cost-of-living areas.


IN THE HOUSE OF REPRESENTATIVES
September 29, 2010

Mr. Israel (for himself and Mr. Andrews) introduced the following bill; which was referred to the Committee on Ways and Means


A BILL

To amend the Internal Revenue Code of 1986 to adjust personal exemptions for high cost-of-living areas.

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

SECTION 1. Short title.

This Act may be cited as the “The Personal Exemption Fairness Act of 2010”.

SEC. 2. Regional cost-of-living adjustments in personal exemptions.

(a) In general.—Subsection (d) of section 151 of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:

“(5) AREA COST-OF-LIVING ADJUSTMENT.—

“(A) IN GENERAL.—Each of the dollar amounts otherwise in effect under paragraphs (1) and (3)(C) for any taxable year beginning after 2010 shall be multiplied by the applicable multiplier for the taxable year which applies to the statistical area in which the taxpayer’s primary place of abode during the taxable year is located.

“(B) APPLICABLE MULTIPLIERS.—For purposes of this paragraph—

“(i) IN GENERAL.—Not later than December 15 of each calendar year, the Secretary shall prescribe an applicable multiplier for each statistical area of the United States which shall apply to taxable years beginning during the succeeding calendar year.

“(ii) DETERMINATION OF MULTIPLIERS.—

“(I) In the case of a statistical area where the cost-of-living differential for the calendar year does not exceed 125 percent, the applicable multiplier is 1.

“(II) In the case of a statistical area not described in subclause (I), the applicable multiplier is the cost-of-living differential for the calendar year.

“(iii) COST OF LIVING DIFFERENTIAL.—The cost-of-living differential for any statistical area for any calendar year is the percentage determined by dividing—

“(I) the cost-of-living for such area for the preceding calendar year, by

“(II) the average cost-of-living for the United States for the preceding calendar year.

“(iv) COST-OF-LIVING FOR AREA.—

“(I) IN GENERAL.—For each calendar year beginning after 2009, the Secretary of Labor shall determine and publish a cost-of-living index for each statistical area.

“(II) METHODOLOGY.—The cost-of-living index determined under subclause (I) for any statistical area for any calendar year shall be based on average market prices for the area for the 12-month period ending on August 31 of such calendar year. The market prices taken into account under the preceding sentence shall be selected and used under the same methodology as is used by the Secretary of Labor in developing the Consumer Price Index for All Urban Consumers.

“(v) STATISTICAL AREA.—For purposes of this subsection the term ‘statistical area’ means—

“(I) any metropolitan statistical area as defined by the Secretary of Commerce, and

“(II) the portion of any State not within a metropolitan statistical area as so defined.”.

(b) Effective date.—

(1) IN GENERAL.—The amendments made by this section shall apply to taxable years beginning after December 31, 2010.

(2) TRANSITION RULE.—Notwithstanding section 151(d)(5)(B) of the Internal Revenue Code (as added by this section), the date for prescribing applicable multipliers for taxable years beginning in calendar year 2011 shall be the date 1 year after the date of the enactment of this Act.