Balanced Budget Act of 1997 (P.L. 105-33) (Title XI--National Capital Revitalization and Self-Government Improvement Act of 1997)
Balanced Budget Act of 1997 (P.L. 105-33) (Title XI--National Capital Revitalization and Self-Government Improvement Act of 1997)
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H.R. 2015, Enrolled Bill
H.R.2015
One Hundred Fifth Congress
of the
United States of America
AT THE FIRST SESSION
Begun and held at the City of Washington on Tuesday,
the seventh day of January, one thousand nine hundred and ninety-seven
An Act
To provide for reconciliation pursuant to subsections (b)(1) and (c) of section 105 of the concurrent resolution on the budget for fiscal year 1998.
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 'Balanced Budget Act of 1997'.
SEC. 2. TABLE OF TITLES.
This Act is organized into titles as follows:
Title I--Food Stamp Provisions
Title II--Housing and Related Provisions
Title III--Communications and Spectrum Allocation Provisions
Title IV--Medicare, Medicaid, and Children's Health Provisions
Title V--Welfare and Related Provisions
Title VI--Education and Related Provisions
Title VII--Civil Service Retirement and Related Provisions
Title VIII--Veterans and Related Provisions
Title IX--Asset Sales, User Fees, and Miscellaneous Provisions
Title X--Budget Enforcement and Process Provisions
Title XI--District of Columbia Revitalization
* * * * * * *
TITLE IV--MEDICARE, MEDICAID, AND CHILDREN'S HEALTH PROVISIONS
SEC. 4000. AMENDMENTS TO SOCIAL SECURITY ACT AND REFERENCES TO OBRA; TABLE OF CONTENTS OF TITLE.
(a) AMENDMENTS TO SOCIAL SECURITY ACT.--Except as otherwise specifically provided, whenever in this title an amendment 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 that section or other provision of the Social Security Act.
(b) REFERENCES TO OBRA.--In this title, the terms 'OBRA-1986', 'OBRA-1987', 'OBRA-1989', 'OBRA-1990', and 'OBRA-1993' refer to the Omnibus Budget Reconciliation Act of 1986 (Public Law 99-509), the Omnibus Budget Reconciliation Act of 1987 (Public Law 100-203), the Omnibus Budget Reconciliation Act of 1989 (Public Law 101-239), the Omnibus Budget Reconciliation Act of 1990 (Public Law 101-508), and the Omnibus Budget Reconciliation Act of 1993 (Public Law 103-66), respectively.
(c) TABLE OF CONTENTS OF TITLE.--The table of contents of this title is as follows:
Chapter 1--Medicare+Choice Program
* * * * * * *
Sec. 4006. Medicare+Choice MSA.
* * * * * * *
SUBCHAPTER B--SOCIAL HEALTH MAINTENANCE ORGANIZATIONS
* * * * * * *
SUBCHAPTER D--OTHER PROJECTS
* * * * * * *
Sec. 4017. Orderly transition of municipal health service demonstration projects.
Chapter 5--Tax Treatment of Hospitals Participating in Provider-Sponsored Organizations
* * * * * * *
Chapter 5--Other Payment Provisions
Sec. 4452. Permanent extension of hemophilia pass-through payment.
* * * * * * *
Chapter 3--Provisions Relating to Medicare Secondary Payer
* * * * * * ** * * * * * *
Chapter 6--Administration and Miscellaneous
Sec. 4758. Extension of moratorium.
Sec. 4803. Effective date; transition.
Subtitle A--Medicare+Choice Program
CHAPTER 1--MEDICARE+CHOICE PROGRAM
* * * * * * *
Subchapter B--Special Rules for Medicare+Choice Medical Savings Accounts
SEC. 4006. MEDICARE+CHOICE MSA.
(a) IN GENERAL.--Part III of subchapter B of chapter 1 of the Internal Revenue Code of 1986 (relating to amounts specifically excluded from gross income) is amended by redesignating section 138 as section 139 and by inserting after section 137 the following new section:
'SEC. 138. MEDICARE+CHOICE MSA.
'(a) EXCLUSION.--Gross income shall not include any payment to the Medicare+Choice MSA of an individual by the Secretary of Health and Human Services under part C of title XVIII of the Social Security Act.
'(b) MEDICARE+CHOICE MSA.--For purposes of this section, the term 'Medicare+Choice MSA' means a medical savings account (as defined in section 220(d))--
'(1) which is designated as a Medicare+Choice MSA,
'(2) with respect to which no contribution may be made other than--
'(A) a contribution made by the Secretary of Health and Human Services pursuant to part C of title XVIII of the Social Security Act, or
'(B) a trustee-to-trustee transfer described in subsection (c)(4),
'(3) the governing instrument of which provides that trustee-to-trustee transfers described in subsection (c)(4) may be made to and from such account, and
'(4) which is established in connection with an MSA plan described in section 1859(b)(3) of the Social Security Act.
'(c) SPECIAL RULES FOR DISTRIBUTIONS.--
'(1) DISTRIBUTIONS FOR QUALIFIED MEDICAL EXPENSES.--In applying section 220 to a Medicare+Choice MSA--
'(A) qualified medical expenses shall not include amounts paid for medical care for any individual other than the account holder, and
'(B) section 220(d)(2)(C) shall not apply.
'(2) PENALTY FOR DISTRIBUTIONS FROM MEDICARE+CHOICE MSA NOT USED FOR QUALIFIED MEDICAL EXPENSES IF MINIMUM BALANCE NOT MAINTAINED.--
'(A) IN GENERAL.--The tax imposed by this chapter for any taxable year in which there is a payment or distribution from a Medicare+Choice MSA which is not used exclusively to pay the qualified medical expenses of the account holder shall be increased by 50 percent of the excess (if any) of--
'(i) the amount of such payment or distribution, over
'(ii) the excess (if any) of--
'(I) the fair market value of the assets in such MSA as of the close of the calendar year preceding the calendar year in which the taxable year begins, over
'(II) an amount equal to 60 percent of the deductible under the Medicare+Choice MSA plan covering the account holder as of January 1 of the calendar year in which the taxable year begins.
'(B) EXCEPTIONS.--Subparagraph (A) shall not apply if the payment or distribution is made on or after the date the account holder--
'(i) becomes disabled within the meaning of section 72(m)(7), or
'(ii) dies.
'(C) SPECIAL RULES.--For purposes of subparagraph (A)--
'(i) all Medicare+Choice MSAs of the account holder shall be treated as 1 account,
'(ii) all payments and distributions not used exclusively to pay the qualified medical expenses of the account holder during any taxable year shall be treated as 1 distribution, and
'(iii) any distribution of property shall be taken into account at its fair market value on the date of the distribution.
'(4) TRUSTEE-TO-TRUSTEE TRANSFERS.--Section 220(f)(2) and paragraph (2) of this subsection shall not apply to any trustee-to-trustee transfer from a Medicare+Choice MSA of an account holder to another Medicare+Choice MSA of such account holder.
'(d) SPECIAL RULES FOR TREATMENT OF ACCOUNT AFTER DEATH OF ACCOUNT HOLDER.--In applying section 220(f)(8)(A) to an account which was a Medicare+Choice MSA of a decedent, the rules of section 220(f) shall apply in lieu of the rules of subsection (c) of this section with respect to the spouse as the account holder of such Medicare+Choice MSA.
'(e) REPORTS.--In the case of a Medicare+Choice MSA, the report under section 220(h)--
'(1) shall include the fair market value of the assets in such Medicare+Choice MSA as of the close of each calendar year, and
'(2) shall be furnished to the account holder--
'(A) not later than January 31 of the calendar year following the calendar year to which such reports relate, and
'(B) in such manner as the Secretary prescribes in such regulations.
(b) TECHNICAL AMENDMENTS.--
(1) The last sentence of section 4973(d) of such Code is amended by inserting 'or section 138(c)(3)' after 'section 220(f)(3)'.
(2) Subsection (b) of section 220 of such Code is amended by adding at the end the following new paragraph:
'(7) MEDICARE ELIGIBLE INDIVIDUALS.--The limitation under this subsection for any month with respect to an individual shall be zero for the first month such individual is entitled to benefits under title XVIII of the Social Security Act and for each month thereafter.'.
(3) The table of sections for part III of subchapter B of chapter 1 of such Code is amended by striking the last item and inserting the following:
'Sec. 139. Cross references to other Acts.'.
(c) EFFECTIVE DATE.--The amendments made by this section shall apply to taxable years beginning after December 31, 1998.
SEC. 4014. SOCIAL HEALTH MAINTENANCE ORGANIZATIONS (SHMOS).
(a) EXTENSION OF DEMONSTRATION PROJECT AUTHORITIES.--Section 4018(b) of the Omnibus Budget Reconciliation Act of 1987 is amended--
(1) in paragraph (1), by striking '1997' and inserting '2000', and
(2) in paragraph (4), by striking '1998' and inserting '2001'.
(b) EXPANSION OF CAP.--Section 13567(c) of the Omnibus Budget Reconciliation Act of 1993 is amended by striking '12,000' and inserting '36,000'.
(c) REPORT ON INTEGRATION AND TRANSITION.--
(1) IN GENERAL.--The Secretary of Health and Human Services shall submit to Congress, by not later than January 1, 1999, a plan for the integration of health plans offered by social health maintenance organizations (including SHMO I and SHMO II sites developed under section 2355 of the Deficit Reduction Act of 1984 and under the amendment made by section 4207(b)(3)(B)(i) of OBRA-1990, respectively) and similar plans as an option under the Medicare+Choice program under part C of title XVIII of the Social Security Act.
(2) PROVISION FOR TRANSITION.--Such plan shall include a transition for social health maintenance organizations operating under demonstration project authority under such section.
(3) PAYMENT POLICY.--The report shall also include recommendations on appropriate payment levels for plans offered by such organizations, including an analysis of the application of risk adjustment factors appropriate to the population served by such organizations.
SEC. 4017. ORDERLY TRANSITION OF MUNICIPAL HEALTH SERVICE DEMONSTRATION PROJECTS.
Section 9215 of the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended by section 6135 of OBRA-1989 and section 13557 of OBRA-1993, is further amended--
(2) by adding at the end the following:
'Subject to subsection (c), the Secretary may further extend such demonstration projects through December 31, 2000, but only with respect to individuals who received at least one service during the period beginning on January 1, 1996, and ending on the date of the enactment of the Balanced Budget Act of 1997.
'(b) The Secretary shall work with each such demonstration project to develop a plan, to be submitted to the Committee on Ways and Means and the Committee on Commerce of the House of Representatives and the Committee on Finance of the Senate by March 31, 1998, for the orderly transition of demonstration projects and the project participants to a non-demonstration project health care delivery system, such as through integration with a private or public health plan, including a medicaid managed care or Medicare+Choice plan.
'(c) A demonstration project under subsection (a) which does not develop and submit a transition plan under subsection (b) by March 31, 1998, or, if later, 6 months after the date of the enactment of the Balanced Budget Act of 1997, shall be discontinued as of December 31, 1998. The Secretary shall provide appropriate technical assistance to assist in the transition so that disruption of medical services to project participants may be minimized.'.
CHAPTER 5--TAX TREATMENT OF HOSPITALS PARTICIPATING IN PROVIDER-SPONSORED ORGANIZATIONS
SEC. 4041. TAX TREATMENT OF HOSPITALS WHICH PARTICIPATE IN PROVIDER-SPONSORED ORGANIZATIONS.
(a) IN GENERAL.--Section 501 of the Internal Revenue Code of 1986 (relating to exemption from tax on corporations, certain trusts, etc.) is amended by redesignating subsection (o) as subsection (p) and by inserting after subsection (n) the following new subsection:
'(o) TREATMENT OF HOSPITALS PARTICIPATING IN PROVIDER-SPONSORED ORGANIZATIONS.--An organization shall not fail to be treated as organized and operated exclusively for a charitable purpose for purposes of subsection (c)(3) solely because a hospital which is owned and operated by such organization participates in a provider-sponsored organization (as defined in section 1853(e) of the Social Security Act), whether or not the provider-sponsored organization is exempt from tax. For purposes of subsection (c)(3), any person with a material financial interest in such a provider-sponsored organization shall be treated as a private shareholder or individual with respect to the hospital.'
(b) EFFECTIVE DATE.--The amendment made by subsection (a) shall take effect on the date of the enactment of this Act.
Subtitle E--Provisions Relating to Part A Only
* * * * * * *
CHAPTER 5--OTHER PAYMENT PROVISIONS
* * * * * * *
SEC. 4452. PERMANENT EXTENSION OF HEMOPHILIA PASS-THROUGH PAYMENT.
Section 6011(d) of OBRA-1989 (as amended by section 13505 of OBRA-1993) is amended by striking 'and shall expire September 30, 1994.' and inserting 'and on or before September 30, 1994, and on or after October 1, 1997.'.
* * * * * * *
Subtitle G--Provisions Relating to Parts A and B
* * * * * * *
CHAPTER 3--PROVISIONS RELATING TO MEDICARE SECONDARY PAYER
SEC. 4631. PERMANENT EXTENSION AND REVISION OF CERTAIN SECONDARY PAYER PROVISIONS.
(a) APPLICATION TO DISABLED INDIVIDUALS IN LARGE GROUP HEALTH PLANS.--
(1) IN GENERAL.--Section 1862(b)(1)(B) (42 U.S.C. 1395y(b)(1)(B)) is amended--
(A) in clause (i), by striking 'clause (iv)' and inserting 'clause (iii)';
(B) by striking clause (iii); and
(C) by redesignating clause (iv) as clause (iii).
(2) CONFORMING AMENDMENTS.--Paragraphs (1) through (3) of section 1837(i) (42 U.S.C. 1395p(i)) and the second sentence of section 1839(b) (42 U.S.C. 1395r(b)) are each amended by striking '1862(b)(1)(B)(iv)' each place it appears and inserting '1862(b)(1)(B)(iii)'.
(b) INDIVIDUALS WITH END STAGE RENAL DISEASE.--Section 1862(b)(1)(C) (42 U.S.C. 1395y(b)(1)(C)) is amended--
(1) in the last sentence by striking 'October 1, 1998' and inserting 'the date of enactment of the Balanced Budget Act of 1997'; and
(2) by adding at the end the following:
'Effective for items and services furnished on or after the date of enactment of the Balanced Budget Act of 1997, (with respect to periods beginning on or after the date that is 18 months prior to such date), clauses (i) and (ii) shall be applied by substituting '30-month' for '12-month' each place it appears.'.
(1) SOCIAL SECURITY ACT.--Section 1862(b)(5)(C) (42 U.S.C. 1395y(b)(5)(C)) is amended by striking clause (iii).
(2) INTERNAL REVENUE CODE.--Section 6103(l)(12) of the Internal Revenue Code of 1986 is amended by striking subparagraph (F).
Subtitle H--Medicaid
* * * * * * *
CHAPTER 6--ADMINISTRATION AND MISCELLANEOUS
* * * * * * *
SEC. 4758. EXTENSION OF MORATORIUM.
Section 6408(a)(3) of the Omnibus Budget Reconciliation Act of 1989, as amended by section 13642 of the Omnibus Budget Reconciliation Act of 1993, is amended by striking 'December 31, 1995' and inserting 'December 31, 2002'.
SEC. 4803. EFFECTIVE DATE; TRANSITION.
(a) TIMELY ISSUANCE OF REGULATIONS; EFFECTIVE DATE.--The Secretary of Health and Human Services shall promulgate regulations to carry out this subtitle in a timely manner. Such regulations shall be designed so that entities may establish and operate PACE programs under sections 1894 and 1934 of the Social Security Act (as added by sections 4801 and 4802 of this subtitle) for periods beginning not later than 1 year after the date of the enactment of this Act.
(b) EXPANSION AND TRANSITION FOR PACE DEMONSTRATION PROJECT WAIVERS.--
(1) EXPANSION IN CURRENT NUMBER AND EXTENSION OF DEMONSTRATION PROJECTS.--Section 9412(b) of the Omnibus Budget Reconciliation Act of 1986, as amended by section 4118(g) of the Omnibus Budget Reconciliation Act of 1987, is amended--
(A) in paragraph (1), by inserting before the period at the end the following:
', except that the Secretary shall grant waivers of such requirements to up to the applicable numerical limitation specified in sections 1894(e)(1)(B) and 1934(e)(1)(B) of the Social Security Act'; and
(B) in paragraph (2)--
(i) in subparagraph (A), by striking ', including permitting the organization to assume progressively (over the initial 3-year period of the waiver) the full financial risk'; and
(ii) in subparagraph (C), by adding at the end the following:
'In granting further extensions, an organization shall not be required to provide for reporting of information which is only required because of the demonstration nature of the project.'.
(2) ELIMINATION OF REPLICATION REQUIREMENT.--Section 9412(b)(2)(B) of such Act, as so amended, shall not apply to waivers granted under such section after the date of the enactment of this Act.
(3) TIMELY CONSIDERATION OF APPLICATIONS.--In considering an application for waivers under such section before the effective date of the repeals under subsection (d), subject to the numerical limitation under the amendment made by paragraph (1), the application shall be deemed approved unless the Secretary of Health and Human Services, within 90 days after the date of its submission to the Secretary, either denies such request in writing or informs the applicant in writing with respect to any additional information which is needed in order to make a final determination with respect to the application. After the date the Secretary receives such additional information, the application shall be deemed approved unless the Secretary, within 90 days of such date, denies such request.
(c) PRIORITY AND SPECIAL CONSIDERATION IN APPLICATION.--During the 3-year period beginning on the date of the enactment of this Act:
(1) PROVIDER STATUS.--The Secretary of Health and Human Services shall give priority in processing applications of entities to qualify as PACE programs under section 1894 or 1934 of the Social Security Act--
(A) first, to entities that are operating a PACE demonstration waiver program (as defined in sections 1894(a)(7) and 1934(a)(7) of such Act); and
(B) then to entities that have applied to operate such a program as of May 1, 1997.
(2) NEW WAIVERS.--The Secretary shall give priority, in the awarding of additional waivers under section 9412(b) of the Omnibus Budget Reconciliation Act of 1986--
(A) to any entities that have applied for such waivers under such section as of May 1, 1997; and
(B) to any entity that, as of May 1, 1997, has formally contracted with a State to provide services for which payment is made on a capitated basis with an understanding that the entity was seeking to become a PACE provider.
(3) SPECIAL CONSIDERATION.--The Secretary shall give special consideration, in the processing of applications described in paragraph (1) and the awarding of waivers described in paragraph (2), to an entity which as of May 1, 1997, through formal activities (such as entering into contracts for feasibility studies) has indicated a specific intent to become a PACE provider.
(d) REPEAL OF CURRENT PACE DEMONSTRATION PROJECT WAIVER AUTHORITY.--
(1) IN GENERAL.--Subject to paragraph (2), the following provisions of law are repealed:
(A) Section 603(c) of the Social Security Amendments of 1983 (Public Law 98-21).
(B) Section 9220 of the Consolidated Omnibus Budget Reconciliation Act of 1985 (Public Law 99-272).
(C) Section 9412(b) of the Omnibus Budget Reconciliation Act of 1986 (Public Law 99-509).
(2) DELAY IN APPLICATION TO CURRENT WAIVERS.--
(A) IN GENERAL.--Subject to subparagraph (B), in the case of waivers granted with respect to a PACE program before the initial effective date of regulations described in subsection (a), the repeals made by paragraph (1) shall not apply until the end of a transition period (of up to 24 months) that begins on the initial effective date of such regulations, and that allows sufficient time for an orderly transition from demonstration project authority to general authority provided under the amendments made by this subtitle.
(B) STATE OPTION TO SEEK EXTENSION OF CURRENT PERIOD.--A State may elect to maintain the PACE programs which (as of the date of the enactment of this Act) were operating in the State under the authority described in paragraph (1) until a date (specified by the State) that is not later than 3 years after the initial effective date of regulations described in subsection (a). If a State makes such an election, the repeals made by paragraph (1) shall not apply to the programs until the date so specified, but only so long as such programs continue to operate under the same terms and conditions as apply to such programs as of the date of the enactment of this Act, and subparagraph (A) shall not apply to such programs.
SEC. 5000. TABLE OF CONTENTS; REFERENCES.
(a) TABLE OF CONTENTS.--The table of contents of this title is as follows:
Sec. 5000. Table of contents; references.
Sec. 5405. Exemption of service performed by election workers from the Federal unemployment tax.
Sec. 5406. Treatment of certain services performed by inmates.
SEC. 5405. EXEMPTION OF SERVICE PERFORMED BY ELECTION WORKERS FROM THE FEDERAL UNEMPLOYMENT TAX.
(a) IN GENERAL.--Paragraph (3) of section 3309(b) of the Internal Revenue Code of 1986 (relating to exemption for certain services) is amended--
(1) by striking 'or' at the end of subparagraph (D),
(2) by adding 'or' at the end of subparagraph (E), and
(3) by inserting after subparagraph (E) the following new subparagraph:
'(F) as an election official or election worker if the amount of remuneration received by the individual during the calendar year for services as an election official or election worker is less than $1,000;'.
SEC. 5406. TREATMENT OF CERTAIN SERVICES PERFORMED BY INMATES.
(a) IN GENERAL.--Subsection (c) of section 3306 of the Internal Revenue Code of 1986 (defining employment) is amended--
(1) by striking 'or' at the end of paragraph (19),
(2) by striking the period at the end of paragraph (20) and inserting '; or', and
(3) by adding at the end the following new paragraph:
'(21) service performed by a person committed to a penal institution.'.
(b) EFFECTIVE DATE.--The amendments made by this section shall apply with respect to service performed after January 1, 1994.
SEC. 5407. EXEMPTION OF SERVICE PERFORMED FOR AN ELEMENTARY OR SECONDARY SCHOOL OPERATED PRIMARILY FOR RELIGIOUS PURPOSES FROM THE FEDERAL UNEMPLOYMENT TAX.
(a) IN GENERAL.--Paragraph (1) of section 3309(b) of the Internal Revenue Code of 1986 (relating to exemption for certain services) is amended--
(1) by striking 'or' at the end of subparagraph (A), and
(2) by inserting before the semicolon at the end the following: ', or (C) an elementary or secondary school which is operated primarily for religious purposes, which is described in section 501(c)(3), and which is exempt from tax under section 501(a)'.
(b) EFFECTIVE DATE.--The amendments made by this section shall apply with respect to service performed after the date of the enactment of this Act.
SEC. 9000. TABLE OF CONTENTS.
The table of contents for this title is as follows:
SEC. 9302. INCREASE IN EXCISE TAXES ON TOBACCO PRODUCTS.
(a) CIGARETTES.--Subsection (b) of section 5701 of the Internal Revenue Code of 1986 is amended--
(1) by striking '$12 per thousand ($10 per thousand on cigarettes removed during 1991 or 1992)' in paragraph (1) and inserting '$19.50 per thousand ($17 per thousand on cigarettes removed during 2000 or 2001)', and
(2) by striking '$25.20 per thousand ($21 per thousand on cigarettes removed during 1991 or 1992)' in paragraph (2) and inserting '$40.95 per thousand ($35.70 per thousand on cigarettes removed during 2000 or 2001)'.
(b) CIGARS.--Subsection (a) of section 5701 of such Code is amended--
(1) by striking '$1.125 cents per thousand (93.75 cents per thousand on cigars removed during 1991 or 1992)' in paragraph (1) and inserting '$1.828 cents per thousand ($1.594 cents per thousand on cigars removed during 2000 or 2001)', and
(2) by striking 'equal to' and all that follows in paragraph (2) and inserting 'equal to 20.719 percent (18.063 percent on cigars removed during 2000 or 2001) of the price for which sold but not more than $48.75 per thousand ($42.50 per thousand on cigars removed during 2000 or 2001).'.
(c) CIGARETTE PAPERS.--Subsection (c) of section 5701 of such Code is amended by striking '0.75 cent (0.625 cent on cigarette papers removed during 1991 or 1992)' and inserting '1.22 cents (1.06 cents on cigarette papers removed during 2000 or 2001)'.
(d) CIGARETTE TUBES.--Subsection (d) of section 5701 of such Code is amended by striking '1.5 cents (1.25 cents on cigarette tubes removed during 1991 or 1992)' and inserting '2.44 cents (2.13 cents on cigarette tubes removed during 2000 or 2001)'.
(e) SMOKELESS TOBACCO.--Subsection (e) of section 5701 of such Code is amended--
(1) by striking '36 cents (30 cents on snuff removed during 1991 or 1992)' in paragraph (1) and inserting '58.5 cents (51 cents on snuff removed during 2000 or 2001)', and
(2) by striking '12 cents (10 cents on chewing tobacco removed during 1991 or 1992)' in paragraph (2) and inserting '19.5 cents (17 cents on chewing tobacco removed during 2000 or 2001)'.
(f) PIPE TOBACCO.--Subsection (f) of section 5701 of such Code is amended by striking '67.5 cents (56.25 cents on pipe tobacco removed during 1991 or 1992)' and inserting '$1.0969 cents (95.67 cents on pipe tobacco removed during 2000 or 2001)'.
(g) IMPOSITION OF EXCISE TAX ON MANUFACTURE OR IMPORTATION OF ROLL-YOUR-OWN TOBACCO.--
(1) IN GENERAL.--Section 5701 of such Code (relating to rate of tax) is amended by redesignating subsection (g) as subsection (h) and by inserting after subsection (f) the following new subsection:
'(g) ROLL-YOUR-OWN TOBACCO.--On roll-your-own tobacco, manufactured in or imported into the United States, there shall be imposed a tax of $1.0969 cents (95.67 cents on roll-your-own tobacco removed during 2000 or 2001) per pound (and a proportionate tax at the like rate on all fractional parts of a pound).'.
(2) ROLL-YOUR-OWN TOBACCO.--Section 5702 of such Code (relating to definitions) is amended by adding at the end the following new subsection:
'(p) ROLL-YOUR-OWN TOBACCO.--The term 'roll-your-own tobacco' means any tobacco which, because of its appearance, type, packaging, or labeling, is suitable for use and likely to be offered to, or purchased by, consumers as tobacco for making cigarettes.'.
(3) TECHNICAL AMENDMENTS.--
(A) Subsection (c) of section 5702 of such Code is amended by striking 'and pipe tobacco' and inserting 'pipe tobacco, and roll-your-own tobacco'.
(B) Subsection (d) of section 5702 of such Code is amended--
(i) in the material preceding paragraph (1), by striking 'or pipe tobacco' and inserting 'pipe tobacco, or roll-your-own tobacco', and
(ii) by striking paragraph (1) and inserting the following new paragraph:
(C) The chapter heading for chapter 52 of such Code is amended to read as follows:
(h) MODIFICATIONS OF CERTAIN TOBACCO TAX PROVISIONS.--
(1) EXEMPTION FOR EXPORTED TOBACCO PRODUCTS AND CIGARETTE PAPERS AND TUBES TO APPLY ONLY TO ARTICLES MARKED FOR EXPORT.--
(A) Subsection (b) of section 5704 of such Code is amended by adding at the end the following new sentence:
'(1) every person who sells, relands, or receives within the jurisdiction of the United States any tobacco products or cigarette papers or tubes which have been labeled or shipped for exportation under this chapter,
'(2) every person who sells or receives such relanded tobacco products or cigarette papers or tubes, and
'(3) every person who aids or abets in such selling, relanding, or receiving,
shall, in addition to the tax and any other penalty provided in this title, be liable for a penalty equal to the greater of $1,000 or 5 times the amount of the tax imposed by this chapter. All tobacco products and cigarette papers and tubes relanded within the jurisdiction of the United States, and all vessels, vehicles, and aircraft used in such relanding or in removing such products, papers, and tubes from the place where relanded, shall be forfeited to the United States.'.
(D) Subsection (d) of section 5761 of such Code, as redesignated by subparagraph (B), is amended by striking 'The penalty imposed by subsection (b)' and inserting 'The penalties imposed by subsections (b) and (c)'.
(E)(i) Subpart F of chapter 52 of such Code is amended by adding at the end the following new section:
'(a) IN GENERAL.--Tobacco products and cigarette papers and tubes previously exported from the United States may be imported or brought into the United States only as provided in section 5704(d). For purposes of this section, section 5704(d), section 5761, and such other provisions as the Secretary may specify by regulations, references to exportation shall be treated as including a reference to shipment to the Commonwealth of Puerto Rico.
'(b) CROSS REFERENCE.--
'For penalty for the sale of tobacco products and cigarette papers and tubes in the United States which are labeled for export, see section 5761(c).'.
(ii) The table of sections for subpart F of chapter 52 of such Code is amended by adding at the end the following new item:
'Sec. 5754. Restriction on importation of previously exported tobacco products.'.
(A) Sections 5712, 5713(a), 5721, 5722, 5762(a)(1), and 5763 (b) and (c) of such Code are each amended by inserting 'or importer' after 'manufacturer'.
(B) The heading of subsection (b) of section 5763 of such Code is amended by inserting 'QUALIFIED IMPORTERS,' after 'MANUFACTURERS,'.
(C) The heading for subchapter B of chapter 52 of such Code is amended by inserting 'and Importers' after 'Manufacturers'.
(D) The item relating to subchapter B in the table of subchapters for chapter 52 of such Code is amended by inserting 'and importers' after 'manufacturers'.
(3) BOOKS OF 25 OR FEWER CIGARETTE PAPERS SUBJECT TO TAX.--Subsection (c) of section 5701 of such Code is amended by striking 'On each book or set of cigarette papers containing more than 25 papers,' and inserting 'On cigarette papers,'.
(4) STORAGE OF TOBACCO PRODUCTS.--Subsection (k) of section 5702 of such Code is amended by inserting 'under section 5704' after 'internal revenue bond'.
(5) AUTHORITY TO PRESCRIBE MINIMUM MANUFACTURING ACTIVITY REQUIREMENTS.--Section 5712 of such Code is amended by striking 'or' at the end of paragraph (1), by redesignating paragraph (2) as paragraph (3), and by inserting after paragraph (1) the following new paragraph:
'(2) the activity proposed to be carried out at such premises does not meet such minimum capacity or activity requirements as the Secretary may prescribe, or'.
(i) EFFECTIVE DATE.--
(1) IN GENERAL.--The amendments made by this section shall apply to articles removed (as defined in section 5702(k) of the Internal Revenue Code of 1986, as amended by this section) after December 31, 1999.
(2) TRANSITIONAL RULE.--Any person who--
(A) on the date of the enactment of this Act is engaged in business as a manufacturer of roll-your-own tobacco or as an importer of tobacco products or cigarette papers and tubes, and
(B) before January 1, 2000, submits an application under subchapter B of chapter 52 of such Code to engage in such business,
may, notwithstanding such subchapter B, continue to engage in such business pending final action on such application. Pending such final action, all provisions of such chapter 52 shall apply to such applicant in the same manner and to the same extent as if such applicant were a holder of a permit under such chapter 52 to engage in such business.
(j) FLOOR STOCKS TAXES.--
(1) IMPOSITION OF TAX.--On tobacco products and cigarette papers and tubes manufactured in or imported into the United States which are removed before any tax increase date, and held on such date for sale by any person, there is hereby imposed a tax in an amount equal to the excess of--
(A) the tax which would be imposed under section 5701 of the Internal Revenue Code of 1986 on the article if the article had been removed on such date, over
(B) the prior tax (if any) imposed under section 5701 of such Code on such article.
(2) AUTHORITY TO EXEMPT CIGARETTES HELD IN VENDING MACHINES.--To the extent provided in regulations prescribed by the Secretary, no tax shall be imposed by paragraph (1) on cigarettes held for retail sale on any tax increase date, by any person in any vending machine. If the Secretary provides such a benefit with respect to any person, the Secretary may reduce the $500 amount in paragraph (3) with respect to such person.
(3) CREDIT AGAINST TAX.--Each person shall be allowed as a credit against the taxes imposed by paragraph (1) an amount equal to $500. Such credit shall not exceed the amount of taxes imposed by paragraph (1) on any tax increase date, for which such person is liable.
(4) LIABILITY FOR TAX AND METHOD OF PAYMENT.--
(A) LIABILITY FOR TAX.--A person holding cigarettes on any tax increase date, to which any tax imposed by paragraph (1) applies shall be liable for such tax.
(B) METHOD OF PAYMENT.--The tax imposed by paragraph (1) shall be paid in such manner as the Secretary shall prescribe by regulations.
(C) TIME FOR PAYMENT.--The tax imposed by paragraph (1) shall be paid on or before April 1 following any tax increase date.
(5) ARTICLES IN FOREIGN TRADE ZONES.--Notwithstanding the Act of June 18, 1934 (48 Stat. 998, 19 U.S.C. 81a) and any other provision of law, any article which is located in a foreign trade zone on any tax increase date, shall be subject to the tax imposed by paragraph (1) if--
(A) internal revenue taxes have been determined, or customs duties liquidated, with respect to such article before such date pursuant to a request made under the 1st proviso of section 3(a) of such Act, or
(B) such article is held on such date under the supervision of a customs officer pursuant to the 2d proviso of such section 3(a).
(6) DEFINITIONS.--For purposes of this subsection--
(A) IN GENERAL.--Terms used in this subsection which are also used in section 5702 of the Internal Revenue Code of 1986 shall have the respective meanings such terms have in such section, as amended by this Act.
(B) TAX INCREASE DATE.--The term 'tax increase date' means January 1, 2000, and January 1, 2002.
(C) SECRETARY.--The term 'Secretary' means the Secretary of the Treasury or the Secretary's delegate.
(7) CONTROLLED GROUPS.--Rules similar to the rules of section 5061(e)(3) of such Code shall apply for purposes of this subsection.
(8) OTHER LAWS APPLICABLE.--All provisions of law, including penalties, applicable with respect to the taxes imposed by section 5701 of such Code shall, insofar as applicable and not inconsistent with the provisions of this subsection, apply to the floor stocks taxes imposed by paragraph (1), to the same extent as if such taxes were imposed by such section 5701. The Secretary may treat any person who bore the ultimate burden of the tax imposed by paragraph (1) as the person to whom a credit or refund under such provisions may be allowed or made.
SECTION 11000. SHORT TITLE; TABLE OF CONTENTS.
(a) SHORT TITLE.--This title may be cited as the 'National Capital Revitalization and Self-Government Improvement Act of 1997'.
(b) TABLE OF CONTENTS.--The table of contents of this title is as follows:
Sec. 11000. Short title; table of contents.
* * * * * * *
Chapter 3--Determinations And Review of Eligibility and Payments; Information Sharing
Sec. 11024. Federal information sharing for verification of benefit determinations.
Sec. 11034. Treatment of Trust Fund under certain laws.
Subtitle A--District of Columbia Retirement Funds
* * * * * * *
CHAPTER 3--DETERMINATIONS AND REVIEW OF ELIGIBILITY AND PAYMENTS; INFORMATION SHARING
* * * * * * *
SEC. 11024. FEDERAL INFORMATION SHARING FOR VERIFICATION OF BENEFIT DETERMINATIONS.
(a) IN GENERAL.--Except with respect to taxpayer returns and return information subject to section 6103 of the Internal Revenue Code of 1986, the Secretary may--
(1) secure directly from any department or agency of the United States information necessary to enable the Secretary to verify or confirm benefit determinations under this subtitle; and
(2) by regulation authorize the Trustee to review such information for purposes of administering this subtitle and the contract.
(b) AMENDMENTS TO INTERNAL REVENUE CODE.--The Internal Revenue Code of 1986 is amended as follows:
(1) In section 6103(l), as amended by section 1206(a) of the Taxpayer Bill of Rights 2, by adding at the end the following new paragraph:
'(16) DISCLOSURE OF RETURN INFORMATION FOR PURPOSES OF ADMINISTERING THE DISTRICT OF COLUMBIA RETIREMENT PROTECTION ACT OF 1997.--
'(A) IN GENERAL.--Upon written request available return information (including such information disclosed to the Social Security Administration under paragraph (1) or (5) of this subsection), relating to the amount of wage income (as defined in section 3121(a) or 3401(a)), the name, address, and identifying number assigned under section 6109, of payors of wage income, taxpayer identity (as defined in subsection 6103(b)(6)), and the occupational status reflected on any return filed by, or with respect to, any individual with respect to whom eligibility for, or the correct amount of, benefits under the District of Columbia Retirement Protection Act of 1997, is sought to be determined, shall be disclosed by the Commissioner of Social Security, or to the extent not available from the Social Security Administration, by the Secretary, to any duly authorized officer or employee of the Department of the Treasury, or a Trustee or any designated officer or employee of a Trustee (as defined in the District of Columbia Retirement Protection Act of 1997), or any actuary engaged by a Trustee under the terms of the District of Columbia Retirement Protection Act of 1997, whose official duties require such disclosure, solely for the purpose of, and to the extent necessary in, determining an individual's eligibility for, or the correct amount of, benefits under the District of Columbia Retirement Protection Act of 1997.
'(B) DISCLOSURE FOR USE IN JUDICIAL OR ADMINISTRATIVE PROCEEDINGS.--Return information disclosed to any person under this paragraph may be disclosed in a judicial or administrative proceeding relating to the determination of an individual's eligibility for, or the correct amount of, benefits under the District of Columbia Retirement Protection Act of 1997.'.
(2) In section 6103(a)(3), by striking '(6) or (12)' and inserting '(6), (12), or (16)';
(3) In section 6103(i)(7)(B)(i), by inserting after '(other than an agency referred to in subparagraph (A))' and before the word 'for' the words 'or by a Trustee as defined in the District of Columbia Retirement Protection Act of 1997,'.
(4) In section 6103(p)(3)(A), by striking 'or (15)' and inserting '(15), or (16)'.
(5) In section 6103(p)(4) in the matter preceding subparagraph (A), by striking 'or (12)' and inserting '(12), or (16), or any other person described in subsection (l)(16)'.
(6) In section 6103(p)(4)(F)(i), by striking 'or (9),' and inserting '(9), or (16), or any other person described in subsection (l)(16)'.
(7) In section 6103(p)(4)(F) in the matter following clause (iii)--
(A) by inserting after 'any such agency, body or commission' and before the words 'for the General Accounting Office' the words ', including an agency or any other person described in subsection (l)(16),';
(B) by striking 'to such agency, body, or commission' and inserting 'to such agency, body, or commission, including an agency or any other person described in subsection (l)(16),';
(C) by striking 'or (12)(B)' and inserting ', (12)(B), or (16)';
(D) by inserting after the words 'any agent,' and before the words 'this paragraph shall' the words 'or any person including an agent described in subsection (l)(16),';
(E) by inserting after the words 'such agent' and before '(except that' the words 'or other person'; and
(F) by inserting after the words 'an agent,' and before the words 'any report' the words 'or any person including an agent described in subsection (l)(16),'.
(8) In section 7213(a)(2), by striking 'or (15),' and inserting '(15), or (16)'.
(c) CONFIDENTIALITY.--The Secretary may issue regulations governing the confidentiality of the information obtained pursuant to subsection (a) and the provisions of law amended by subsection (b).
SEC. 11034. TREATMENT OF TRUST FUND UNDER CERTAIN LAWS.
(a) INTERNAL REVENUE CODE.--For purposes of the Internal Revenue Code of 1986--
(1) the Trust Fund shall be treated as a trust described in section 401(a) of the Code which is exempt from taxation under section 501(a) of the Code;
(2) any transfer to or distribution from the Trust Fund shall be treated in the same manner as a transfer to or distribution from a trust described in section 401(a) of the Code; and
(3) the benefits provided by the Trust Fund shall be treated as benefits provided under a governmental plan maintained by the District of Columbia.
(b) ERISA.--For purposes of the Employee Retirement Income Security Act of 1974, the benefits provided by the Trust Fund shall be treated as benefits provided under a governmental plan maintained by the District of Columbia.
(c) APPLICATION OF CERTAIN FUTURE AMENDMENTS TO INTERNAL REVENUE CODE.--To the extent that any provision of subpart A of part I of subchapter D of chapter 1 of the Internal Revenue Code of 1986 (26 U.S.C. 401 et seq.) is amended after the date of the enactment of this Act, such provision as amended shall apply to the Trust Fund only to the extent the Secretary determines that application of the provision as amended is consistent with the administration of this subtitle.
- Jurisdictions
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