II
Calendar No. 18
113th CONGRESS
1st Session
S. 388
IN THE SENATE OF THE UNITED STATES
February 26, 2013
Mr. Reid (for Ms. Mikulski (for herself, Mrs. Murray, and Mr. Reid)) introduced the following bill; which was read twice and placed on the calendar pursuant to the order of February 14, 2013
A BILL
To appropriately limit sequestration, to eliminate tax loopholes, and for other purposes.
Short title
This Act may be cited as
the American Family Economic
Protection Act of 2013
.
Table of contents
The table of contents for this Act is as follows:
Sec. 1. Short title.
Sec. 2. Table of contents.
TITLE I—Budget provisions
Sec. 101. Adjustments to discretionary spending limits.
Sec. 102. Treatment of sequester.
Sec. 103. Budgetary effects.
TITLE II—Agricultural programs
Sec. 201. Extension of agricultural programs.
Sec. 202. Supplemental agricultural disaster assistance programs.
Sec. 203. Noninsured crop assistance program.
Sec. 204. Exemption of agriculture, nutrition, and forestry from BCA sequestration.
Sec. 205. Effective date.
TITLE III—Revenue provisions
Sec. 301. Reference.
Sec. 302. Fair share tax on high-income taxpayers.
Sec. 303. Denial of deduction for outsourcing expenses.
Sec. 304. Modifications to the tax on petroleum.
Budget provisions
Adjustments to discretionary spending limits
In general
Section 251(c) of the Balanced Budget and Emergency Deficit Control Act of 1985 (2 U.S.C. 901(c)) is amended by striking paragraphs (2) through (10) and inserting the following:
For fiscal year 2013—
for the security category, $684,000,000,000 in new budget authority; and
for the nonsecurity category, $359,000,000,000 in new budget authority;
for fiscal year 2014—
for the revised security category, $552,000,000,000 in new budget authority; and
for the revised nonsecurity category, $506,000,000,000 in new budget authority;
for fiscal year 2015—
for the revised security category, $563,040,000,000 in new budget authority; and
for the revised nonsecurity category, $520,000,000,000 in new budget authority;
for fiscal year 2016—
for the revised security category, $574,301,000,000 in new budget authority; and
for the revised nonsecurity category, $530,000,000,000 in new budget authority;
for fiscal year 2017—
for the revised security category, $586,361,000,000 in new budget authority; and
for the revised nonsecurity category, $541,000,000,000 in new budget authority;
for fiscal year 2018—
for the revised security category, $598,675,000,000 in new budget authority; and
for the revised nonsecurity category, $553,000,000,000 in new budget authority;
for fiscal year 2019—
for the revised security category, $611,846,000,000 in new budget authority; and
for the revised nonsecurity category, $566,000,000,000 in new budget authority;
for fiscal year 2020—
for the revised security category, $625,306,000,000 in new budget authority; and
for the revised nonsecurity category, $578,000,000,000 in new budget authority; and
for fiscal year 2021—
for the revised security category, $638,972,000,000 in new budget authority; and
for the revised nonsecurity category, $590,000,000,000 in new budget authority;
.
Technical and conforming amendments
Part C of title II of the Balanced Budget and Emergency Deficit Control Act of 1985 (2 U.S.C. 900 et seq.) is amended—
in section 250(c)(4) (2 U.S.C. 900(c)(4)), by adding at the end the following:
The term revised security category means discretionary appropriations in budget function 050.
The term revised nonsecurity category means discretionary appropriations other than in budget function 050.
; and
in section 251A (2 U.S.C. 901A)—
by striking the
matter preceding paragraph (1) and inserting the following: The
discretionary spending caps under section 251(c) shall be applied in accordance
with this section as follows:
;
by striking paragraphs (1) and (2);
by redesignating paragraphs (3) through (11) as paragraphs (1) through (9), respectively;
in paragraph (2),
as redesignated, by striking paragraph (3)
and inserting
paragraph (1)
;
in paragraph (3),
as redesignated, by striking paragraph (4)
each place it appears
and inserting paragraph (2)
;
in paragraph (4),
as redesignated, by striking paragraph (4)
each place it appears
and inserting paragraph (2)
;
in paragraph (5), as redesignated—
by
striking paragraph (5)
each place it appears and inserting
paragraph (3)
; and
by
striking paragraph (6)
each place it appears and inserting
paragraph (4)
;
in paragraph (6), as redesignated—
by
striking paragraph (4)
and inserting paragraph
(2)
; and
by
striking paragraphs (5) and (6)
and inserting paragraphs
(3) and (4)
;
in paragraph (7), as redesignated—
by
striking paragraph (8)
and inserting paragraph
(6)
; and
by
striking paragraph (6)
each place it appears and inserting
paragraph (4)
; and
in paragraph (9),
as redesignated, by striking paragraph (4)
and inserting
paragraph (2)
.
Treatment of sequester
Adjustment
Section 251A(1) of the Balanced Budget and Emergency Deficit Control Act of 1985 (2 U.S.C. 901a(1)), as redesignated by section 101 of this Act, is amended—
in subparagraph
(D), by striking and
at the end;
in subparagraph (E)—
by striking
$24,000,000,000
and inserting $109,333,000,000
;
and
by striking the
period at the end and inserting ; and
; and
by adding at the end the following:
for fiscal year 2014, reducing the amount calculated under subparagraphs (A) through (D) by $25,500,000,000.
.
Postponement of Budget Control Act sequester for calendar year 2013
Repeal
Section 901(e) of the American Taxpayer Relief Act of 2012 (Public Law 112–240) is repealed.
BBEDCA
Section 251A of the Balanced Budget and Emergency Deficit Control Act (2 U.S.C. 901a) is amended—
in paragraph (2),
as redesignated by section 101 of this Act, by striking On March 1,
2013, for fiscal year 2013, and in its sequestration preview report for fiscal
years 2014
and inserting On January 2, 2014, for fiscal year
2014, and in its sequestration preview report for fiscal years
2015
;
in paragraph (3),
as redesignated by section 101 of this Act, by striking 2013
and
inserting 2014
;
in paragraph (4),
as redesignated by section 101 of this Act, by striking 2013
and
inserting 2014
; and
in paragraph (5), as redesignated by section 101 of this Act—
in
subparagraph (A), by striking Fiscal year 2013.—On March 1, 2013, for fiscal
year 2013
and inserting Fiscal year 2014.—On January 2, 2014, for fiscal
year 2014
; and
in subparagraph (B)—
by striking
Fiscal years
2014–2021
and inserting Fiscal years 2015–2021
;
and
by striking
2014
each place it appears and inserting
2015
.
Budgetary effects
PAYGO scorecard
The budgetary effects of this Act shall not be entered on either PAYGO scorecard maintained pursuant to section 4(d) of the Statutory Pay-As-You-Go Act of 2010 (2 U.S.C. 933(d)).
Senate PAYGO scorecard
The budgetary effects of this Act shall not be entered on any PAYGO scorecard maintained for purposes of section 201 of S. Con. Res. 21 (110th Congress).
Agricultural programs
Extension of agricultural programs
Commodity programs
Section 701(b) of the American Taxpayer Relief Act of 2012 (Public Law 112–240; 126 Stat. 2362) is amended—
by striking
(1) In
general.—The terms
and inserting the following:
Covered and loan commodities
In general
Except as provided in subparagraph (B), the terms
; and
by adding at the end the following:
Payment acres
Notwithstanding any other provision of law, in the case of direct payments for the 2013 crop year, the payment acres in section 1001(11) and section 1301(5) of the Food, Conservation, and Energy Act of 2008 (7 U.S.C. 8702(11), 8751(5)) shall be 0 percent of the base acres for the covered commodities and peanuts on a farm on which direct payments are made.
.
Conservation programs
Conservation stewardship program
Notwithstanding section 726 of the Consolidated and Further Continuing Appropriations Act, 2012 (Public Law 112–55; 125 Stat. 584) and section 101(a)(1) of the Continuing Appropriations Resolution, 2013 (Public Law 112–175; 126 Stat. 1313), the acreage enrollment requirement in section 1238G(d)(1) of the Food Security Act of 1985 (16 U.S.C. 3838g(d)(1)) shall apply for fiscal year 2013.
Voluntary public access
Section 1240R(f)(1) of the Food Security Act of 1985 (16 U.S.C. 3839bb–5) is amended—
in the heading,
by striking Fiscal years
2009 through 2012
and inserting Mandatory funding
;
and
by inserting
, and $5,000,000 for fiscal year 2013
before the period at the
end.
Desert terminal lakes
Section 2507 of the Farm Security and Rural Investment Act of 2002 (43 U.S.C. 2211 note; Public Law 107–171) is amended by adding at the end the following:
Mandatory funding
Of the funds of the Commodity Credit Corporation, the Secretary of Agriculture shall use to carry out this section $35,000,000 for fiscal year 2013, to remain available until expended.
.
Supplemental nutrition assistance program
Employment and training program
Section 16(h)(1)(A) of the Food and Nutrition
Act of 2008 (7 U.S.C. 2025(h)(1)(A)) is amended by striking , except
that for fiscal year 2013, the amount shall be $79,000,000
.
Nutrition education
Section 28(d)(1) of the Food and Nutrition Act of 2008 (7 U.S.C. 2036a(d)(1)) is amended—
in subparagraph
(A), by adding and
after the semicolon at the end; and
by striking subparagraphs (B) through (F) and inserting the following:
for fiscal year 2012 and each subsequent fiscal year, the applicable amount during the preceding fiscal year, as adjusted to reflect any increases for the 12-month period ending the preceding June 30 in the Consumer Price Index for All Urban Consumers published by the Bureau of Labor Statistics of the Department of Labor.
.
Research programs
Organic agriculture research and extension initiative
Section 1672B(f) of the Food, Agriculture, Conservation, and Trade Act of 1990 (7 U.S.C. 5925b(f)) is amended—
in paragraph (1)—
in
the heading, by striking for fiscal years 2009 through 2012
;
and
in
subparagraph (B), by striking 2012
and inserting
2013
;
in paragraph (2)—
in
the heading, by striking for fiscal years 2009 through 2012
;
and
by
striking 2012
and inserting 2013
; and
by striking paragraph (3).
Specialty crop research initiative
Section 412(h) of the Agricultural Research, Extension, and Education Reform Act of 1998 (7 U.S.C. 7632(h)) is amended—
in paragraph (1)—
in
the heading, by striking for fiscal years 2008 through 2012
;
and
by
striking 2012
and inserting 2013
;
in paragraph (2)—
in
the heading, by striking for fiscal years 2008 through 2012
;
and
by
striking 2012
and inserting 2013
;
by striking paragraph (3); and
by redesignating paragraphs (4) and (5) as paragraphs (3) and (4), respectively.
Beginning farmer and rancher development program
Section 7405(h) of the Farm Security and Rural Investment Act of 2002 (7 U.S.C. 3319f(h)) is amended—
in paragraph (1)—
in
the heading, by striking for fiscal years 2009 through 2012
;
and
in
subparagraph (B), by striking 2012
and inserting
2013
;
in paragraph (2)—
in
the heading, by striking for fiscal years 2008 through 2012
;
and
by
striking 2012
and inserting 2013
; and
by striking paragraph (3).
Energy programs
Biobased markets program
Section 9002(h)(1)(B) of the Farm Security and
Rural Investment Act of 2002 (7 U.S.C. 8102(h)(1)(B)) is amended by striking
2012
and inserting 2013
.
Biorefinery assistance
Section 9003(h)(1) of the Farm Security and Rural Investment Act of 2002 (7 U.S.C. 8103(h)(1)) is amended—
in subparagraph
(A), by striking and
at the end;
in subparagraph
(B), by striking the period at the end and inserting ; and
;
and
by adding at the end the following:
$100,000,000 for fiscal year 2013.
.
Bioenergy program for advanced biofuels
Section 9005(g)(1) of the Farm Security and Rural Investment Act of 2002 (7 U.S.C. 8105(g)(1)) is amended—
in subparagraph
(C), by striking and
at the end;
in subparagraph
(D), by striking the period at the end and inserting ; and
;
and
by adding at the end the following:
$55,000,000 for fiscal year 2013.
.
Biodiesel fuel education program
Section 9006(d)(1) of the Farm Security and Rural Investment Act of 2002 (7 U.S.C. 8106(d)(1)) is amended—
in the heading,
by striking Fiscal years
2009 through 2012.—
and inserting
Mandatory
funding.—
; and
by striking
2012
and inserting 2013.
Rural Energy for America Program
Section 9007(g)(1) of the Farm Security and Rural Investment Act of 2002 (7 U.S.C. 8107(g)(1)) is amended—
in subparagraph
(C), by striking and
at the end;
in subparagraph
(D), by striking the period at the end and inserting ; and
;
and
by adding at the end the following:
$51,000,000 for fiscal year 2013.
.
Biomass research and development
Section 9008(h)(1) of the Farm Security and Rural Investment Act of 2002 (7 U.S.C. 8108(h)(1)) is amended—
in subparagraph
(C), by striking and
at the end;
in subparagraph
(D), by striking the period at the end and inserting ; and
;
and
by adding at the end the following:
$33,600,000 for fiscal year 2013.
.
Biomass crop assistance program
Section 9011(f)(1) of the Farm Security and Rural Investment Act of 2002 (7 U.S.C. 8111(f)) is amended—
in the heading,
by striking Fiscal years
2008 through 2012
and inserting Mandatory funding
;
and
by inserting
, and not more than $38,600,000 for fiscal year 2013
after
2012
.
Horticulture and organic agriculture programs
Farmers market promotion program
Section 6(e)(1) of the Farmer-to-Consumer Direct Marketing Act of 1976 (7 U.S.C. 3005(e)(1)) is amended—
in the heading,
by striking Fiscal years
2008 through 2012.—
and inserting
Mandatory
funding.—
; and
subparagraph (C),
by striking and 2012
and inserting through
2013
.
National Clean Plant Network
Section 10202(e)(1) of the Food, Conservation, and Energy Act of 2008 (7 U.S.C. 7761(e)(1)) is amended—
in the heading,
by striking Fiscal years
2009 through 2012.—
and inserting
Mandatory
funding.—
; and
by striking
2012
and inserting 2013
.
National organic certification cost-share program
Section 10606(d)(1) of the Farm Security and Rural Investment Act of 2002 (7 U.S.C. 6523(d)(1)) is amended by—
in the heading,
by striking for fiscal
years 2008 through 2012
; and
by inserting
, and $5,000,000 for fiscal year 2013
after
2012
.
Organic production and market data initiatives
Section 7407(d) of the Farm Security and Rural Investment Act of 2002 (7 U.S.C. 5925c(d)) is amended by striking paragraph (1) and inserting the following:
Mandatory funding
Of the funds of the Commodity Credit Corporation, the Secretary shall use to carry out this section, to remain available until expended—
$5,000,000 for each fiscal year through fiscal year 2012; and
$1,000,000 for fiscal year 2013.
.
Outreach and assistance for socially disadvantaged farmers and ranchers
Section 2501(a)(4)(A) of the Food, Agriculture, Conservation, and Trade Act of 1990 (7 U.S.C. 2279(a)(4)(A)) is amended—
in the heading,
by striking Fiscal years
2009 through 2012.—
and inserting
Mandatory
funding.—
;
in clause (i), by
striking and
at the end;
in clause (ii),
by striking the period at the end and inserting ; and
;
and
by adding at the end the following:
$15,000,000 for fiscal year 2013.
.
Rural development
Rural microentrepreneur assistance program
Section 379E(d) of the Consolidated Farm and Rural Development Act (7 U.S.C. 2008s(d)) is amended—
in paragraph
(1)(B), by striking fiscal year 2012
and inserting for
each of fiscal years 2012 and 2013
; and
in paragraph (2),
by striking 2012
and inserting 2013
.
Value-added agricultural product market development grants
Section 231(b)(7) of the Agricultural Risk Protection Act of 2000 (7 U.S.C. 1632a(b)(7)) is amended—
by striking subparagraph (A) and inserting the following:
Mandatory funding
Of the funds of the Commodity Credit Corporation, the Secretary shall make available to carry out this subsection, to remain available until expended—
on October 1, 2008, $15,000,000; and
on October 1, 2012, $3,000,000.
; and
in subparagraph
(B), by striking 2012
and inserting 2013
.
Supplemental agricultural disaster assistance programs
In general
Section 531 of the Federal Crop Insurance Act (7 U.S.C. 1531) is amended—
in subsection (b)—
in paragraph
(1)(A), by striking The Secretary shall use such sums as are necessary
from the Trust Fund
and inserting Of the funds of the Commodity
Credit Corporation, the Secretary shall use such sums as are necessary for
fiscal year 2012
;
in paragraph
(2)(A), in the matter preceding clause (i), by striking 60
percent
and inserting 52 percent
; and
in paragraph
(4)(A)(ii), by striking 15 percent
and inserting 100
percent
;
in subsection (c), by adding at the end the following:
Mandatory funding
Of the funds of the Commodity Credit Corporation, the Secretary shall use such sums as are necessary to carry out this subsection for each of fiscal years 2012 and 2013.
;
in subsection (d), by adding at the end the following:
Mandatory funding
Of the funds of the Commodity Credit Corporation, the Secretary shall use such sums as are necessary to carry out this subsection for each of fiscal years 2012 and 2013.
;
in subsection (e), by adding at the end the following:
Mandatory funding
Of the funds of the Commodity Credit Corporation, the Secretary shall use up to $5,000,000 to carry out this subsection for each of fiscal years 2012 and 2013.
;
in subsection (f), by adding at the end the following:
Mandatory funding
Of the funds of the Commodity Credit Corporation, the Secretary shall use such sums as are necessary to carry out this subsection for each of fiscal years 2012 and 2013.
; and
in subsection
(i), by striking September 30, 2011
and inserting
September 30, 2012
.
Effective date
The amendments made by subsection (a) take effect on October 1, 2011.
Noninsured crop assistance program
In general
Section 196 of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7333) is amended—
in subsection (a)—
by striking paragraph (1) and inserting the following:
In general
Coverages
In the case of an eligible crop described in paragraph (2), the Secretary of Agriculture shall operate a noninsured crop disaster assistance program to provide coverages based on individual yields (other than for value-loss crops) equivalent to—
catastrophic risk protection available under section 508(b) of the Federal Crop Insurance Act (7 U.S.C. 1508(b)); or
additional coverage available under subsections (c) and (h) of section 508 of that Act (7 U.S.C. 1508) that does not exceed 65 percent.
Administration
The Secretary shall carry out this section
through the Farm Service Agency (referred to in this section as the
Agency
).
; and
in paragraph (2)—
in subparagraph (A)—
in clause (i), by striking
and
after the semicolon at the end;
by redesignating clause (ii) as clause (iii); and
by inserting after clause (i) the following:
for which additional coverage under subsections (c) and (h) of section 508 of that Act (7 U.S.C. 1508) is not available; and
; and
in subparagraph (B)—
by inserting (except ferns)
after floricultural
;
by inserting (except ferns)
after ornamental nursery
; and
by striking (including ornamental
fish)
and inserting (including ornamental fish, but excluding
tropical fish)
;
in subsection (d), by striking The
Secretary
and inserting Subject to subsection (l), the
Secretary
;
in subsection (k)(1)—
in subparagraph (A), by striking
$250
and inserting $260
; and
in subparagraph (B)—
by striking $750
and
inserting $780
; and
by striking $1,875
and
inserting $1,950
; and
by adding at the end the following:
Payment equivalent to additional coverage
In general
The Secretary shall make available to a producer eligible for noninsured assistance under this section a payment equivalent to an indemnity for additional coverage under subsections (c) and (h) of section 508 of the Federal Crop Insurance Act (7 U.S.C. 1508) that does not exceed 65 percent, computed by multiplying—
the quantity that is less than 50 to 65 percent of the established yield for the crop, as determined by the Secretary, specified in increments of 5 percent;
100 percent of the average market price for the crop, as determined by the Secretary; and
a payment rate for the type of crop, as determined by the Secretary, that reflects—
in the case of a crop that is produced with a significant and variable harvesting expense, the decreasing cost incurred in the production cycle for the crop that is, as applicable—
harvested;
planted but not harvested; or
prevented from being planted because of drought, flood, or other natural disaster, as determined by the Secretary; or
in the case of a crop that is produced without a significant and variable harvesting expense, such rate as shall be determined by the Secretary.
Premium
To be eligible to receive a payment under this subsection, a producer shall pay—
the service fee required by subsection (k); and
a premium for the applicable crop year that is equal to—
the product obtained by multiplying—
the number of acres devoted to the eligible crop;
the yield, as determined by the Secretary under subsection (e);
the coverage level elected by the producer;
the average market price, as determined by the Secretary; and
5.25-percent premium fee.
Limited resource, beginning, and socially disadvantaged farmers
The additional coverage made available under this subsection shall be available to limited resource, beginning, and socially disadvantaged producers, as determined by the Secretary, in exchange for a premium that is 50 percent of the premium determined for a producer under paragraph (2).
Additional availability
In general
As soon as practicable, the Secretary shall make assistance available to producers of an otherwise eligible crop described in subsection (a)(2) that suffered losses—
to a 2012 annual fruit crop grown on a bush or tree; and
in a county covered by a declaration by the Secretary of a natural disaster for production losses due to a freeze or frost.
Assistance
The Secretary shall make assistance available under subparagraph (A) in an amount equivalent to assistance available under paragraph (1), less any fees not previously paid under paragraph (2).
.
Termination date
In general
Effective October 1, 2017, subsection (a) and the amendments made by subsection (a) (other than the amendments made by clauses (i)(I) and (ii) of subsection (a)(1)(B)) are repealed
Administration
Effective October 1, 2017, section 196 of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7333) shall be applied and administered as if subsection (a) and the amendments made by subsection (a) (other than the amendments made by clauses (i)(I) and (ii) of subsection (a)(1)(B)) had not been enacted.
Exemption of agriculture, nutrition, and forestry from BCA sequestration
Section 251A(6) of the Balanced Budget and Emergency Deficit Control Act of 1985 (2 U.S.C. 901a(6)), as redesignated by section 101 of this Act, is amended—
by striking On the date
and
inserting the following:
In general
On the date
;
in subparagraph (A), as so designated, in
the second sentence, by inserting subparagraph (B) of this paragraph
and
after the exemptions specified in
; and
by adding at the end the following:
Exemption of agriculture, nutrition, and forestry
The following shall be exempt from reduction under any order issued pursuant to this paragraph:
All programs, projects, and activities of the Commodity Credit Corporation.
All programs, projects, and activities of the Federal Crop Insurance Corporation.
All programs, projects, and activities carried out under section 32 of the Act of August 24, 1935 (7 U.S.C. 612c).
All other direct spending accounts of the Department of Agriculture.
.
Effective date
Except as otherwise provided in this title, this title and the amendments made by this title take effect on the date of enactment of, and as if included in, the American Taxpayer Relief Act of 2012 (Public Law 112–240; 126 Stat. 2313).
Revenue provisions
Reference
Except as otherwise expressly provided, whenever in this title an amendment or repeal is expressed in terms of an amendment to, or repeal of, a section or other provision, the reference shall be considered to be made to a section or other provision of the Internal Revenue Code of 1986.
Fair share tax on high-income taxpayers
In general
Subchapter A of chapter 1 is amended by adding at the end the following new part:
Fair share tax on high-income taxpayers
Sec. 59B. Fair share tax.
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 $4,000,000 ($2,000,000 in the case of a married individual who files a separate return).
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, determined without regard to any tax liability determined under this section,
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 2013, 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 2012
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 tax is attributable to the rate of tax in effect under section 3101) with respect to such taxable year or wages or compensation received during such 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.
.
Clerical amendment
The table of parts for subchapter A of chapter 1 is amended by adding at the end the following new item:
.
Effective date
The amendments made by this section shall apply to taxable years beginning after December 31, 2013.
Denial of deduction for outsourcing expenses
In general
Part IX of subchapter B of chapter 1 is amended by adding at the end the following new section:
Outsourcing expenses
In general
No deduction otherwise allowable under this chapter shall be allowed for any specified outsourcing expense.
Specified outsourcing expense
For purposes of this section—
In general
The term specified outsourcing expense
means—
any eligible expense paid or incurred by the taxpayer in connection with the elimination of any business unit of the taxpayer (or of any member of any expanded affiliated group in which the taxpayer is also a member) located within the United States, and
any eligible expense paid or incurred by the taxpayer in connection with the establishment of any business unit of the taxpayer (or of any member of any expanded affiliated group in which the taxpayer is also a member) located outside the United States,
Eligible expenses
The term eligible expenses
means—
any amount for which a deduction is allowed to the taxpayer under section 162, and
permit and license fees, lease brokerage fees, equipment installation costs, and, to the extent provided by the Secretary, other similar expenses.
Business unit
The term business unit
means—
any trade or business, and
any line of business, or functional unit, which is part of any trade or business.
Expanded affiliated group
The term
expanded affiliated group
means an affiliated group as defined
in section 1504(a), determined without regard to section 1504(b)(3) and by
substituting more than 50 percent
for at least 80
percent
each place it appears in section 1504(a). A partnership or any
other entity (other than a corporation) shall be treated as a member of an
expanded affiliated group if such entity is controlled (within the meaning of
section 954(d)(3)) by members of such group (including any entity treated as a
member of such group by reason of this paragraph).
Operating expenses not taken into account
Any amount paid or incurred in connection with the on-going operation of a business unit shall not be treated as an amount paid or incurred in connection with the establishment or elimination of such business unit.
Special rules
Application to deductions for depreciation and amortization
In the case of any portion of a specified outsourcing expense which is not deductible in the taxable year in which paid or incurred, such portion shall neither be chargeable to capital account nor amortizable.
Possessions treated as part of the United States
For purposes of this section, the term
United States
shall be treated as including each possession of
the United States (including the Commonwealth of Puerto Rico and the
Commonwealth of the Northern Mariana Islands).
Regulations
The Secretary shall prescribe such regulations or other guidance as may be necessary or appropriate to carry out the purposes of this section, including regulations which provide (or create a rebuttable presumption) that certain establishments of business units outside the United States will be treated as relocations (based on timing or such other factors as the Secretary may provide) of business units eliminated within the United States.
.
Limitation on subpart F income of controlled foreign corporations determined without regard to specified outsourcing expenses
Subsection (c) of section 952 is amended by adding at the end the following new paragraph:
Earnings and profits determined without regard to specified outsourcing expenses
For purposes of this subsection, earnings and profits of any controlled foreign corporation shall be determined without regard to any specified outsourcing expense (as defined in section 280I(b)).
.
Clerical amendment
The table of sections for part IX of subchapter B of chapter 1 is amended by adding at the end the following new item:
.
Effective date
The amendments made by this section shall apply to amounts paid or incurred after the date of the enactment of this Act.
Modifications to the tax on petroleum
Definition of crude oil
Paragraph (1) of section 4612(a) is amended to read as follows:
Crude oil
The term crude oil includes crude oil condensates, natural gasoline, any bitumen or bituminous mixture, and any oil derived from a bitumen or bituminous mixture.
.
Removing restrictions relating to oil wells and extraction methods
Paragraph (2) of section 4612(a) is amended
by striking from a well located
.
Clerical amendment
Subclause (I) of
section 4612(e)(2)(B)(ii) is amended by striking tranferred
and
inserting transferred
.
Effective date
The amendments made by subsections (a) and (b) shall apply to oil and petroleum products received or entered during calendar quarters beginning more than 60 days after the date of the enactment of this Act.
February 26, 2013
Read twice and placed on the calendar pursuant to the order of February 14, 2013