I
113th CONGRESS
1st Session
H. R. 699
IN THE HOUSE OF REPRESENTATIVES
February 14, 2013
Mr. Van Hollen (for himself, Mr. Hoyer, Mr. George Miller of California, Ms. DeLauro, Mr. Pocan, Ms. Castor of Florida, Mr. Moran, Mr. Kildee, Mr. Huffman, and Mr. Holt) introduced the following bill; which was referred to the Committee on Ways and Means, and in addition to the Committees on the Budget and Agriculture, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned
A BILL
To amend the Balanced Budget and Emergency Deficit Control Act of 1985 to repeal and replace the fiscal year 2013 sequestration.
Short title
This Act may be cited as the
Stop the Sequester Job Loss Now
Act
.
Table of contents
Sec. 1. Short title.
Sec. 2. Table of contents.
Title I—BUDGET PROCESS AMENDMENTS TO REPLACE FISCAL YEAR 2013 SEQUESTRATION
Sec. 101. Repeal and replace the 2013 sequester.
Sec. 102. Protecting veterans programs from sequester.
Title II—AGRICULTURAL SAVINGS
Sec. 201. One-year extension of agricultural commodity programs, except direct payment programs.
Title III—OIL AND GAS SUBSIDIES
Sec. 301. Limitation on section 199 deduction attributable to oil, natural gas, or primary products thereof.
Sec. 302. Prohibition on using last-in, first-out accounting for major integrated oil companies.
Sec. 303. Modifications of foreign tax credit rules applicable to major integrated oil companies which are dual capacity taxpayers.
Title IV—THE BUFFETT RULE
Sec. 401. Fair share tax on high-income taxpayers.
Title V—SENSE OF THE HOUSE
Sec. 501. Sense of the House on the need for a fair, balanced and bipartisan approach to long-term deficit reduction.
BUDGET PROCESS AMENDMENTS TO REPLACE FISCAL YEAR 2013 SEQUESTRATION
Repeal the 2013 sequester and delay the 2014 sequester
Calculation of total deficit reduction and allocation to functions
Subparagraph (E) of section 251A(3) is amended to read as follows:
For fiscal year 2014, reducing the amount calculated under subparagraphs (A) through (D) by $27,500,000,000.
.
Paragraph (4) of section 251A of the
Balanced Budget and Emergency Deficit Control Act of 1985 (2 U.S.C. 901a) is
amended by striking On March 1, 2013, for fiscal year 2013, and in its
sequestration preview report for fiscal years 2014 through 2021
and
inserting On January 2, 2014, for fiscal year 2014, and in its
sequestration preview report for fiscal years 2015 through 2021
.
Defense and nondefense function reductions
Paragraphs (5) and (6) of section
251A of the Balanced Budget and Emergency Deficit Control Act of 1985 are
amended by striking 2013
and inserting 2014
each
place it appears.
Implementing discretionary reductions
Section 251A(7)(A) of
the Balanced Budget and Emergency Deficit Control Act of 1985 is amended by
striking 2013.—On January 2, 2013, for fiscal year
2013
and inserting 2014.—On January 2, 2014, for fiscal year
2014
.
Section 251A(7)(B) of such Act is
amended by striking 2014
and inserting 2015
each
place it appears.
Savings
The savings set forth by the enactment of title II shall achieve the savings that would otherwise have occurred as a result of the sequestration under section 251A of the Balanced Budget and Emergency Deficit Control Act of 1985.
Protecting veterans programs from sequester
Section 256(e)(2)(E) of the Balanced Budget and Emergency Deficit Control Act of 1985 is repealed.
AGRICULTURAL SAVINGS
One-year extension of agricultural commodity programs, except direct payment programs
Extension
Except as provided in subsection (b) and notwithstanding any other provision of law, the authorities provided by each provision of title I of the Food, Conservation, and Energy Act of 2008 (Public Law 110–246; 122 Stat. 1651) and each amendment made by that title (and for mandatory programs at such funding levels), as in effect on September 30, 2013, shall continue, and the Secretary of Agriculture shall carry out the authorities, until September 30, 2014.
Termination of direct payment programs
Covered commodities
The extension provided by subsection (a) shall not apply with respect to the direct payment program under section 1103 of the Food, Conservation, and Energy Act of 2008 (7 U.S.C. 8713).
Peanuts
The extension provided by subsection (a) shall not apply with respect to the direct payment program under section 1303 of the Food, Conservation, and Energy Act of 2008 (7 U.S.C. 7953).
Effective date
This section shall take effect on the earlier of—
the date of the enactment of this Act; and
September 30, 2013.
OIL AND GAS SUBSIDIES
Limitation on section 199 deduction attributable to oil, natural gas, or primary products thereof
Denial of deduction
Paragraph (4) of section 199(c) of the Internal Revenue Code of 1986 is amended by adding at the end the following new subparagraph:
Special rule for certain oil and gas income
In the case of any taxpayer who is a
major integrated oil company (as defined in section 167(h)(5)(B)) for the
taxable year, the term domestic production gross receipts
shall
not include gross receipts from the production, transportation, or distribution
of oil, natural gas, or any primary product (within the meaning of subsection
(d)(9))
thereof.
.
Effective date
The amendment made by this section shall apply to taxable years ending after December 31, 2013.
Prohibition on using last-in, first-out accounting for major integrated oil companies
In general
Section 472 of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsection:
Major integrated oil companies
Notwithstanding any other provision of this section, a major integrated oil company (as defined in section 167(h)(5)(B)) may not use the method provided in subsection (b) in inventorying of any goods.
.
Effective date and special rule
In general
The amendment made by subsection (a) shall apply to taxable years ending after December 31, 2013.
Change in method of accounting
In the case of any taxpayer required by the amendment made by this section to change its method of accounting for its first taxable year ending after December 31, 2013—
such change shall be treated as initiated by the taxpayer,
such change shall be treated as made with the consent of the Secretary of the Treasury, and
the net amount of the adjustments required to be taken into account by the taxpayer under section 481 of the Internal Revenue Code of 1986 shall be taken into account ratably over a period (not greater than 8 taxable years) beginning with such first taxable year.
Modifications of foreign tax credit rules applicable to major integrated oil companies which are dual capacity taxpayers
In general
Section 901 of the Internal Revenue Code of 1986 is amended by redesignating subsection (n) as subsection (o) and by inserting after subsection (m) the following new subsection:
Special rules relating to major integrated oil companies which are dual capacity taxpayers
General rule
Notwithstanding any other provision of this chapter, any amount paid or accrued by a dual capacity taxpayer which is a major integrated oil company (as defined in section 167(h)(5)(B)) to a foreign country or possession of the United States for any period shall not be considered a tax—
if, for such period, the foreign country or possession does not impose a generally applicable income tax, or
to the extent such amount exceeds the amount (determined in accordance with regulations) which—
is paid by such dual capacity taxpayer pursuant to the generally applicable income tax imposed by the country or possession, or
would be paid if the generally applicable income tax imposed by the country or possession were applicable to such dual capacity taxpayer.
Dual capacity taxpayer
For purposes of this subsection, the term dual
capacity taxpayer
means, with respect to any foreign country or
possession of the United States, a person who—
is subject to a levy of such country or possession, and
receives (or will receive) directly or indirectly a specific economic benefit (as determined in accordance with regulations) from such country or possession.
Generally applicable income tax
For purposes of this subsection—
In general
The term generally applicable income tax
means an income tax (or a series of income taxes) which is generally imposed
under the laws of a foreign country or possession on income derived from the
conduct of a trade or business within such country or possession.
Exceptions
Such term shall not include a tax unless it has substantial application, by its terms and in practice, to—
persons who are not dual capacity taxpayers, and
persons who are citizens or residents of the foreign country or possession.
.
Effective date
In general
The amendments made by this section shall apply to taxes paid or accrued in taxable years beginning after the date of the enactment of this Act.
Contrary treaty obligations upheld
The amendments made by this section shall not apply to the extent contrary to any treaty obligation of the United States.
THE BUFFETT RULE
Fair share tax on high-income taxpayers
In general
Subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by adding at the end the following new part:
FAIR SHARE TAX ON HIGH-INCOME TAXPAYERS
Fair share tax
General rule
Phase-in of tax
In the case of any high-income taxpayer, there is hereby imposed for a taxable year (in addition to any other tax imposed by this subtitle) a tax equal to the product of—
the amount determined under paragraph (2), and
a fraction (not to exceed 1)—
the numerator of which is the excess of—
the taxpayer’s adjusted gross income, over
the dollar amount in effect under subsection (c)(1), and
the denominator of which is the dollar amount in effect under subsection (c)(1).
Amount of tax
The amount of tax determined under this paragraph is an amount equal to the excess (if any) of—
the tentative fair share tax for the taxable year, over
the excess of—
the sum of—
the regular tax liability (as defined in section 26(b)) for the taxable year,
the tax imposed by section 55 for the taxable year, plus
the payroll tax for the taxable year, over
the credits allowable under part IV of subchapter A (other than sections 27(a), 31, and 34).
Tentative fair share tax
For purposes of this section—
In general
The tentative fair share tax for the taxable year is 30 percent of the excess of—
the adjusted gross income of the taxpayer, over
the modified charitable contribution deduction for the taxable year.
Modified charitable contribution deduction
For purposes of paragraph (1)—
In general
The modified charitable contribution deduction for any taxable year is an amount equal to the amount which bears the same ratio to the deduction allowable under section 170 (section 642(c) in the case of a trust or estate) for such taxable year as—
the amount of itemized deductions allowable under the regular tax (as defined in section 55) for such taxable year, determined after the application of section 68, bears to
such amount, determined before the application of section 68.
Taxpayer must itemize
In the case of any individual who does not elect to itemize deductions for the taxable year, the modified charitable contribution deduction shall be zero.
High-Income taxpayer
For purposes of this section—
In general
The term high-income taxpayer
means, with
respect to any taxable year, any taxpayer (other than a corporation) with an
adjusted gross income for such taxable year in excess of $1,000,000 (50 percent
of such amount in the case of a married individual who files a separate
return).
Inflation adjustment
In general
In the case of a taxable year beginning after 2014, the $1,000,000 amount under paragraph (1) shall be increased by an amount equal to—
such dollar amount, multiplied by
the
cost-of-living adjustment determined under section 1(f)(3) for the calendar
year in which the taxable year begins, determined by substituting
calendar year 2013
for calendar year 1992
in
subparagraph (B) thereof.
Rounding
If any amount as adjusted under subparagraph (A) is not a multiple of $10,000, such amount shall be rounded to the next lowest multiple of $10,000.
Payroll tax
For purposes of this section, the payroll tax for any taxable year is an amount equal to the excess of—
the taxes imposed on the taxpayer under sections 1401, 1411, 3101, 3201, and 3211(a) (to the extent such taxes are attributable to the rate of tax in effect under section 3101) with respect to such taxable year or wages or compensation received during the taxable year, over
the deduction allowable under section 164(f) for such taxable year.
Special rule for estates and trusts
For purposes of this section, in the case of an estate or trust, adjusted gross income shall be computed in the manner described in section 67(e).
Not treated as tax imposed by this chapter for certain purposes
The tax imposed under this section shall not be treated as tax imposed by this chapter for purposes of determining the amount of any credit under this chapter (other than the credit allowed under section 27(a)) or for purposes of section 55.
.
Conforming amendment
Section 26(b)(2) of such Code is amended by redesignating subparagraphs (C) through (X) as subparagraphs (D) through (Y), respectively, and by inserting after subparagraph (B) the following new subparagraph:
section 59B (relating to fair share tax),
.
Clerical amendment
The table of parts for subchapter A of chapter 1 of such Code is amended by adding at the end the following new item:
Part VII—Fair Share Tax on High-Income Taxpayers
.
Effective date
The amendments made by this section shall apply to taxable years beginning after December 31, 2013.
SENSE OF THE HOUSE
Sense of the House on the need for a fair, balanced and bipartisan approach to long-term deficit reduction
The House finds that—
every bipartisan commission has recommended—and the majority of Americans agree—that we should take a balanced, bipartisan approach to reducing the deficit that addresses both revenue and spending; and
sequestration is a meat-ax approach to deficit reduction that imposes deep and mindless cuts, regardless of their impact on vital services and investments.
It is the sense of the House that the Congress should replace the entire 10-year sequester established by the Budget Control Act of 2011 with a balanced approach that would increase revenues without increasing the tax burden on middle-income Americans, and decrease long-term spending while maintaining the Medicare guarantee, protecting Social Security and a strong social safety net, and making strategic investments in education, science, research, and critical infrastructure necessary to compete in the global economy.