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 100 STAT. 1950

"(3) A provision reported by a committee shall not be considered extraneous under paragraph (1)(C) if (A) the provision is an integral part of a provision or title, which if introduced as a bill or resolution would be referred to such committee, and the provision sets forth the procedure to carry out or implement the substantive provisions that were reported and which fall within the jurisdiction of such committee; or (B) the provision states an exception to, or a special application of, the general provision or title of which it is a part and such general provision or title if introduced as a bill or resolution would be referred to such committee.". (b) Section 20001(c) of such Act is amended by striking out "January 2, 1987" and inserting in lieu thereof "January 2, 1988". (c) Senate Resolution 286 (99th Congress, 2d Session) is amended by striking "section 1201" each place it appears and inserting in lieu thereof "section 20001"

Ante, p. 390. '" •

" ^

20 USC 1063.

SEC. 7007. MODIFICATION OF TITLE III, PART B, HIGHER EDUCATION ACT ALLOCATION FORMULA.

Ante, p. 1296.

" ^ '' ' ^ " Ante, p. 1307. ,

PUBLIC LAW 99-509—OCT. 21, 1986

,.

Minorities.

Section 324 of the Higher Education Act (as amended by the Higher Education Amendments of 1986) is amended— (1) by redesignating subsections (d), (e), and (f) as subsections (e), (f), and (g), respectively; (2) by inserting after subsection (c) the following new subsec' tion: "(d) MINIMUM ALLOTMENT —U) Notwithstanding subsections (a), (b), and (c), the amount allotted to each part B institution under this section shall not be less than $350,000. "(2) If the amount appropriated pursuant to section 360(a)(2)(A) for any fiscal year is not sufficient to pay the minimum allotment required by paragraph (1) of this subsection to all part B institutions, the amount of such minimum allotments shall be ratably reduced. If additional sums become available for such fiscal year, such reduced allocation shall be increased on the same basis as they were reduced (until the amount allotted equals the minimum allotment required by paragraph (1))."; and (3) by striking out "subsection (a), (b), or (c)" in subsection (e) ,j (as redesignated by paragraph (1) of this subsection) and inserting in lieu thereof "subsection (a), (b), (c), or (d)"; and (4) by amending subsection (c) to read as follows: "(c) ALLOTMENT; GRADUATE AND PROFESSIONAL S T U D E N T B A S I S. —

From the amounts appropriated to carry out this part for any fiscal year, the Secretary shall allot to each part B institution a sum which bears the same ratio to one-fourth of that amount as the percentage of graduates per institution, who are admitted to and in attendance at a graduate or professional school in a degree program ".q 3 fr in disciplines in which Blacks are underrepresented, bears to the percentage of such graduates per institution for all part B institutions." SEC. 7008. USE OF URBAN RENEWAL LAND DISPOSITION PROCEEDS.

Massachusetts.

Notwithstanding any other provision of law or other requirement, the City of Boston in the State of Massachusetts is authorized to retain any land disposition proceeds from the financially closed-out Government Center Urban Renewal Project (NO MASS. R-35) not paid to the Department of Housing and Urban Development, and to use such proceeds in accordance with the requirements of the community development block grant program specified in title I of

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100 STAT. 1951

the Housing and Community Development Act of 1974. The City of 42 USC 530i. Boston shall retain such proceeds in a lump sum and shall be entitled to retain and use all past and future earnings from such proceeds, including any interest.

TITLE VIII—REVENUES, TRADE, AND RELATED PROGRAMS Subtitle A—Revenue Provisions PART I—INCREASES IN CERTAIN PENALTIES SEC. 8001. INCREASE IN PENALTY FOR UNDERPAYMENTS OF TAX DEPOSITS. (a) IN GENERAL.—Subsection (a) of section 6656 of the Internal Revenue Code of 1954 (relating to underpayment of deposits) is amended by striking out "5 percent" and inserting in lieu thereof "10 percent". (b) EFFECTIVE DATE.—The amendment made by subsection (a) shall apply to penalties assessed after the date of the enactment of this Act. SEC. 8002. INCREASE IN PENALTY FOR SUBSTANTIAL UNDERSTATEMENT OF LIABILITY. (a) IN GENERAL.—Subsection (a) of section 6661 of the Internal Revenue Code of 1954 (relating to substantial understatement of liability) is amended to read as follows: "(a) ADDITION TO TAX.—If there is a substantial understatement of income tax for any taxable year, there shall be added to the tax an amount equal to 25 percent of the amount of any underpayment attributable to such understatement." (b) EFFECTIVE DATE.—The amendment made by subsection (a) shall apply to penalties assessed after the date of the enactment of this Act. (c) REPEAL OF INCREASE IN PENALTY BY TAX REFORM ACT OF 1986.—Section 1504 of the Tax Reform Act of 1986 (relating to increase in penalty for substantial understatement of liability) is hereby repealed.

Post, p. 2095; 26 USC 6656. 26 USC 6656 "ote.

26 USC 6661.

26 USC 6661 note. 26use666i, 6661 note. ^^*' P ^^'*^

PART II—CERTAIN EXCISE TAX DEPOSITS ACCELERATED SEC. 8011. CERTAIN EXCISE TAX DEPOSITS ACCELERATED. (a) TOBACCO.—

'

(1) IN GENERAL.—Paragraph (2) of section 5703(b) of the Internal Revenue Code of 1954 (relating to method of payment of tax) is amended to read as follows: Post, p. 2095; "(2) TIME FOR PAYMENT OP TAXES.— 26 USC 5703. "(A) IN GENERAL.—Except as otherwise provided in this -•'•' paragraph, in the case of taxes on tobacco products and cigarette papers and tubes removed during any semimonthly period under bond for deferred payment of tax, the last day for payment of such taxes shall be the 14th day after the last day of such semimonthly period.

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license: Creative Commons - Attribution Share-Alike - https://creativecommons.org/licenses/by-sa/4.0/


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 100 STAT. 1952

PUBLIC LAW 99-509—OCT. 21, 1986

e; '^

"(B) IMPORTED ARTICLES.—In the case of tobacco products and cigarette papers and tubes which are imported into the United States— "(i) IN GENERAL.—The last day for payment of tax shall be the 14th day after the date on which the article is entered into the customs territory of the United States. "(ii) SPECIAL RULE FOR ENTRY FOR WAREHOUSING.—

Except as provided in clause (iv), in the case of an entry for warehousing, the last day for payment of tax shall not be later than the 14th day after the date on which the article is removed from the 1st such warehouse, "(iii) FOREIGN TRADE ZONES.—Except as provided in clause (iv) and in regulations prescribed by the Secretary, articles brought into a foreign trade zone shall, notwithstanding any other provision of law, be treated for purposes of this subsection as if such zone were a single customs warehouse. "(iv) EXCEPTION FOR ARTICLES DESTINED FOR EXPORT.—

'^

Clauses (ii) and (iii) shall not apply to any article which is shown to the satisfaction of the Secretary to be destined for export. "(C) TOBACCO PRODUCTS AND CIGARETTE PAPERS AND TUBES BROUGHT INTO THE UNITED STATES FROM PUERTO RICO.—In

the case of tobacco products and cigarette papers and tubes which are brought into the United States from Puerto Rico, the last day for payment of tax shall be the 14th day after the date on which the article is brought into the United States. "(D) SPECIAL RULE WHERE 14TH DAY FALLS ON SATURDAY,

SUNDAY, OR HOLIDAY.—Notwithstanding section 7503, if, but for this subparagraph, the due date under this paragraph would fall on a Saturday, Sunday, or a legal holiday (as ^ defined in section 7503), such due date shall be the immediately preceding day which is not a Saturday, Sunday, or such a holiday." (2) TECHNICAL AMENDMENT.—Subsection (c) of section 5704 of such Code (relating to tobacco products and cigarette papers and tubes released in bond from customs custody) is amended by striking out "to a manufacturer of tobacco products or cigarette papers and tubes or",

^

(b) DISTILLED SPIRITS, WINES, AND BEER.—

(1) IN GENERAL.—Subsection (d) of section 5061 of such Code (relating to method of collecting tax) is amended to read as follows: "(d) TIME FOR COLLECTING TAX ON DISTILLED SPIRITS, WINES, AND BEER.—

.

,n i < I

"(1) IN GENERAL.—Except as otherwise provided in this subsection, in the case of distilled spirits, wines, and beer to which this part applies (other than subsection (b) of this section) which are withdrawn under bond for deferred payment of tax, the last day for payment of such tax shall be the 14th day after the last day of the semimonthly period during which the withdrawal occurs. "(2) IMPORTED ARTICLES.—In the case of distilled spirits, wines, and beer which are imported into the United States (other than in bulk containers)—

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 :»<:*<!•»•:•'

PUBLIC LAW 99-509—OCT. 21, 1986

100 STAT. 1953

"(A) IN GENERAL.—The last day for payment of tax shall be the 14th day after the date on which the article is entered into the customs territory of the United States. "(B) SPECIAL RULE FOR ENTRY FOR WAREHOUSING.—Except

as provided in subparagraph (D), in the case of an entry for warehousing, the last day for payment of tax shall not be later than the 14th day after the date on which the article is removed from the 1st such warehouse. "(C)

FOREIGN TRADE ZONES.—Except as provided in

subparagraph (D) and in regulations prescribed by the Secretary, articles brought into a foreign trade zone shall, notwithstanding any other provision of law, be treated for purposes of this subsection as if such zone were a single customs warehouse. "(D) EXCEPTION FOR ARTICLES DESTINED FOR EXPORT.—Sub-

paragraphs (B) and (C) shall not apply to any article which is shown to the satisfaction of the Secretary to be destined for export. "(3) DISTILLED SPIRITS, WINES, AND BEER BROUGHT INTO THE UNITED STATES FROM PUERTO RICO.—In the case of distilled spir-

its, wines, and beer which are brought into the United States (other than in bulk containers) from Puerto Rico, the last day for payment of tax shall be the 14th day after the date on which the article is brought into the United States. "(4) SPECIAL RULE WHERE 14TH DAY FALLS ON SATURDAY,

SUNDAY, OR HOLIDAY.—Notwithstanding section 7503, if, but for this paragraph, the due date under this subsection for payment of tax would fall on a Saturday, Sunday, or a legal holiday (within the meaning of section 753), such due date shall be the immediately preceding day which is not a Saturday, Sunday, or such a holiday." (2) TECHNICAL AMENDMENT.—Paragraph (2) of section 5054(a) of such Code (relating to determination and collection of tax on beer) is amended by striking out all that follows "or," and inserting in lieu thereof "if entered for warehousing, at the time of removal from the 1st such warehouse". (c) EFFECTIVE DATES.—

26 USC 5061

(1) IN GENERAL.—Except as provided in paragraph (2), the "°t®amendments made by this section shall apply to removals during semimonthly periods ending on or after December 31, 1986. (2) IMPORTED ARTICLES, ETC.—Subparagraphs (B) and (C) of

section 5703(b)(2) of the Internal Revenue Code of 1954 (as added by this section), paragraphs (2) and (3) of section 5061(d) of such 26 USC 5703. Code (as amended by this section), and the amendments made by subsections (a)(2) and (b)(2) shall apply to articles imported, entered for warehousing, or brought into the United States or a foreign trade zone after December 15, 1986. (3) SPECIAL RULE FOR DISTILLED SPIRITS AND TOBACCO FOR SEMIMONTHLY PERIOD ENDING DECEMBER 15, 1986.—With respect to

remittances of— (A) taxes imposed on distilled spirits by section 5001 or 7652 of such Code, and (B) taxes imposed on tobacco products and cigarette papers and tubes by section 5701 or 7652 of such Code, for the semimonthly period ending December 15, 1986, the last day for payment of such remittances shall be January 14, 1987.

- ^

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Page:United States Statutes at Large Volume 100 Part 3.djvu/146

 100 STAT. 1954

PUBLIC LAW 99-509—OCT. 21, 1986 -

26 USC 5701.

(4) TREATMENT OF SMOKELESS TOBACCO IN INVENTORY ON J U N E

30, 1986.—The tax imposed by section 5701(e) of the Internal Revenue Code of 1954 shall not apply to any smokeless tobacco which— (A) on June 30, 1986, was in the inventory of the manu:. facturer or importer, and (B) on such date was in a form ready for sale.

PART III—TAX TREATMENT OF CONRAIL PUBLIC SALE 45 USC 1347.

SEC. 8021. TAX TREATMENT OF CONRAIL PUBLIC SALE. (a) TREATMENT AS NEW CORPORATION.—

pose, p. 2095.

26 USC 338.

Securities. .

(1) IN GENERAL.—For periods after the public sale, for purposes of the Internal Revenue Code of 1954, Conrail shall be treated as a new corporation which purchased all of its assets as of the beginning of the day after the date of the public sale for an amount equal to the deemed purchase price. (2) ALLOCATION AMONG ASSETS.—The deemed purchase price shall be allocated among the assets of Conrail in accordance with the temporary regulations prescribed under section 338 of the Internal Revenue Code of 1954 (as such regulations were in effect on the date of the enactment of this Act). The Secretary shall establish specific guidelines for carrying out the preceding sentence so that the basis of each asset will be clearly ascertainable. For purposes of applying the regulations referred to in the first sentence, accounts receivable and materials and supplies shall be treated as cash equivalents. (3) DEEMED PURCHASE PRICE.—For purposes of this subsection, the deemed purchase price is an amount equal to the gross amount received pursuant to the public sale, multiplied by a fraction— ..ynU i^: (A) the numerator of which is 100 percent, and (B) the denominator of which is the percentage (by value) of the stock of Conrail sold in the public sale. The amount determined under the preceding sentence shall be adjusted under regulations prescribed by the Secretary for liabilities of Conrail and other relevant items. (b)

S

';!'J

No

INCOME FROM CANCELLATION OF DEBT OR PREFERRED

STOCK.—No amount shall be included in the gross income of any person by reason of any cancellation of any obligation (or preferred stock) of Conrail in connection with the public sale. (c) DISALLOWANCE OF CERTAIN DEDUCTIONS.—No deduction shall be allowed to Conrail for any amount which is paid after the date of the public sale to employees of Conrail for services performed on or before the date of the public sale. (d) WAIVER OF CERTAIN EMPLOYEE STOCK OWNERSHIP PLAN PROVI-

26 USC 401, 501.

SIONS.—For purposes of determining whether the employee stock ownership plans of Conrail meet the qualifications of sections 401 and 501 of the Internal Revenue Code of 1954— (1) the limits of section 415 of such Code (relating to limitations on benefits and contributions under qualified plans) shall not apply with respect to interests in stock transferred pursuant to this Act or a law heretofore enacted, and

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100 STAT. 1955

(2) the 2-year waiting period for withdrawals shall not apply to withdrawals of amounts (or shares) in participants accounts in connection with the public sale, (e) DEFINITIONS.—For purposes of this section— (1) CoNRAiL.—The term "Conrail" means the Consolidated f Rail Corporation. Such term includes any corporation which was a subsidiary of Conrail immediately before the public sale. (2) PUBLIC SALE.—The term "public sale" means the sale of stock in Conrail pursuant to a public offering under the Conrail Privatization Act. If there is more than 1 public offering under Ante, p. 1892. such Act, such term means the sale pursuant to the initial public offering under such Act. (3) SECRETARY.—The term "Secretary" means the Secretary of the Treasury or his delegate.

PART IV—TAX ON PETROLEUM AND OIL SPILL LIABILITY TRUST FUND Subpart A—Tax Provisions if Superfund Amendments Not Enacted SEC. 8031. TAX ON PETROLEUM.

'

(a) IN GENERAL.—Subsections (a) and (b) of section 4611 of the Internal Revenue Code of 1954 (relating to environmental tax on petroleum) are each amended by striking out "of 0.79 cent a barrel" Ante, p. 1761; and inserting in lieu thereof "at the rate specified in subsection (c)". post, p. 1956. (b) INCREASE IN TAX.—Section 4611 of such Code is amended by redesignating subsections (c) and (d) as subsections (d) and (e), respectively, and by inserting after subsection (b) the following new subsection: "(c) RATE OF TAX.—

"(1) IN GENERAL.—The rate of the taxes imposed by this section is the sum of— "(A) the Hazardous Substance Superfund financing rate, ^ >' and 'i "(B) the Oil Spill Liability Trust Fund financing rate. "(2) RATES.—For purposes of paragraph (1)— "(A) the Hazardous Substance Superfund financing rate is 0.79 cent a barrel, and "(B) the Oil Spill Liability Trust Fund financing rate is 1.3 cents a barrel." (c) CREDIT AGAINST PORTION OF TAX ATTRIBUTABLE TO OIL SPILL

RATE.—Section 4612 of such Code (relating to definitions and special Ante, p. 1761. rules) is amended by redesignating subsection (c) as subsection (d) i and by inserting after subsection (b) the following new subsection: "(c) CREDIT AGAINST PORTION OF TAX ATTRIBUTABLE TO OIL SPILL

RATE.—There shall be allowed as a credit against so much of the tax imposed by section 4611 as is attributable to the Oil Spill Liability Trust Fund financing rate for any period an amount equal to the excess of— "(1) the sum o f -f' "(A) the aggregate amounts paid by the taxpayer before January 1, 1987, into the Deepwater Port Liability Trust Fund and the Offshore Oil Pollution Compensation Fund, and

U

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Page:United States Statutes at Large Volume 100 Part 3.djvu/148

 100 STAT. 1956

PUBLIC LAW 99-509—OCT. 21, 1986 "(B) the interest accrued on such amounts before such date, over "(2) the amount of such payments taken into account under this subsection for all prior periods." (d) CONFORMING AMENDMENTS.—

r,

(1) Subsection (e) of section 4611 of such Code (relating to application of taxes), as redesignated by subsection (b), is amended to read as follows: "(e) APPLICATION OF TAXES.— "(1) SUPERFUND RATE.—The Hazardous Substance Superfund

financing rate under subsection (c) shall not apply after September 30, 1985. "(2) O I L SPILL RATE.—

"(A) IN GENERAL.—Except as provided in subparagraph (C), the Oil Spill Liability Trust Fund financing rate under subsection (c) shall apply on and after the commencement date and before January 1, 1992. "(B) COMMENCEMENT DATE.—

"(i) IN GENERAL.—For purposes of this paragraph, the term 'commencement date'means the later of— "(I) February 1, 1987, or "(II) the 1st day of the 1st calendar month beginning more than 30 days after the date of the enactment of qualified authorizing legislation, "(ii) QUALIFIED AUTHORIZING LEGISLATION.—For purposes of clause (i), the term 'qualified authorizing legislation' means any law enacted before September 1, 1987, which is substantially identical to subtitle E of title VI, or subtitle D of title VIII, of H.R. 5300 of the 99th Congress as passed the House of Representatives. "(C) N o TAX I F AMOUNTS COLLECTED EXCEED $300,000,000.— "(i) ESTIMATES BY SECRETARY.—The Secretary as of

Post, p. 1958.

Ante, p. 1774.

the close of each calendar quarter (and at such other u times as the Secretary determines appropriate) shall make an estimate of the amount of taxes which will be >.,! collected under this section (to the extent attributable to the Oil Spill Liability Trust Fund financing rate) 3 during the period beginning on the commencement date and ending on December 31, 1991. "(ii) TERMINATION IF $300,000,000 CREDITED BEFORE JANUARY 1, 1992.—If the Secretary estimates under clause (i) that more than $300,000,000 will be credited to the Fund before January 1, 1992, the Oil Spill Liability Trust Fund financing rate shall not apply after the ., date on which (as estimated by the Secretary) $300,000,000 will be so credited to the Fund." (2) Subsection (c) of section 4661 of such Code (relating to termination of tax on certain chemicals) is amended to read as follows: "(c) TERMINATION.—The tax imposed by this section shall not apply after September 30, 1985." (3) Paragraph (1) of section 221(b) of the Hazardous Substance Response Revenue Act of 1980 (relating to transfers to Response Trust Fund) is amended by adding at the end thereof the following: "In the case of the tax imposed by section 4611, subparagraph (A) shall apply only to so much of such tax as is attributable to

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 PUBLIC LAW 99-509—OCT. 21, 1986

100 STAT. 1957

the Hazardous Substance Superfund financing rate under section 4611(c)."

^ ^

(e) EFFECTIVE DATE,—

(1) IN GENERAL.—Except as provided in paragraph (2), the amendments made by this section shall take effect on the commencement date (as defined in section 4611(e)(2) of the Internal Revenue Code of 1954, as added by this section).

Ante, p. 1956.

(2) COORDINATION WITH SUPERFUND REAUTHORIZATION.—The

amendments made by this section shall not take effect if the Superfund Amendments and Reauthorization Act of 1986 is enacted.

Ante, p. 1613.

Subpart B—Tax Provisions If Superfund Amendments Enacted SEC. 8032. INCREASE IN ENVIRONMENTAL TAX ON PETROLEUM.

(a) IN GENERAL.—Subsection (c) of section 4611 of the Internal Revenue Code of 1954 (relating to environmental tax on petroleum), as amended by the Superfund Amendments and Reauthorization Act of 1986, is amended to read as follows:

Ante, pp. 1761, ^^^^•

"(c) RATE OF TAX.—

"(1) IN GENERAL.—The rate of the taxes imposed by this section is the sum of— "(A) the Hazardous Substance Superfund financing rate, and "(B) the Oil Spill Liability Trust Fund financing rate. "(2) RATES.—For purposes of paragraph (1)— "(A) the Hazardous Substance Superfund financing rate is— "(i) except as provided in clause (ii), 8.2 cents a barrel, and "(ii) 11.7 cents a barrel in the case of the tax imposed by subsection (a)(2), and "(B) the Oil Spill Liability Trust Fund financing rate is 1.3 cents a barrel." (b) CREDIT AGAINST PORTION OF TAX ATTRIBUTABLE TO OIL SPILL

RATE.—Section 4612 of such Code (relating to definitions and special Ante, pp. 1761, rules), as so amended, is amended by redesignating subsection (d) as ^955. subsection (e) and by inserting after subsection (c) the following new subsection: "(d) CREDIT AGAINST PORTION OF TAX ATTRIBUTABLE TO OIL SPILL

RATE.—There shall be allowed as a credit against so much of the tax imposed by section 4611 as is attributable to the Oil Spill Liability Trust Fund financing rate for any period an amount equal to the excess of— "(1) the sum of— "(A) the aggregate amounts paid by the taxpayer before January 1, 1987, into the Deepwater Port Liability Trust Fund and the Offshore Oil Pollution Compensation Fund, and "(B) the interest accrued on such amounts before such date, over "(2) the amount of such payments taken into account under this subsection for all prior periods." (c) CONFORMING AMENDMENTS.—

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 100 STAT. 1958

PUBLIC LAW 99-509—OCT. 21, 1986

Ante, pp. 1761, ^^^^-

application of taxes), as so amended, is amended— (A) in the subsection heading by striking out "TAXES" and inserting in lieu thereof "HAZARDOUS SUBSTANCE '
 * (1) Subsection (e) of section 4611 of such Code (relating to

SuPERFUND F I N A N C I N G R A T E ",

(B) in paragraph (1) by striking out "the taxes imposed by this section" and inserting in lieu thereof "the Hazardous i Substance Superfund financing rate under this section", .J (C) in paragraphs (2) and (3)(A) after "this section" by inserting "(to the extent attributable to the Hazardous Substance Superfund financing rate)", and (D) in paragraph (3)(B) by striking out "no tax shall be imposed under this section" and inserting in lieu thereof "the Hazardous Substance Superfund financing rate under this section shall not apply". (2) Section 4611 of such Code, as so amended, is amended by adding at the end thereof the following new subsection:

'

"(f) APPLICATION OF OIL SPILL LIABILITY TRUST FUND FINANCING •••..'•

RATE.—

"(1) IN GENERAL.—Except as provided in paragraph (3), the Oil Spill Liability Trust Fund financing rate under subsection (c) shall apply on and after the commencement date and before January 1, 1992. "(2) COMMENCEMENT DATE.—

"(A) IN GENERAL.—For purposes of this subsection, the term 'commencement date' means the later of— "(i) February 1, 1987, or "(ii) the 1st day of the 1st calendar month beginning more than 30 days after the date of the enactment of qualified authorizing legislation. "(B) QUALIFIED AUTHORIZING LEGISLATION.—For purposes
 * i >,

te

of subparagraph (A), the term 'qualified authorizing legislation' means any law enacted before September 1, 1987, which is substantially identical to subtitle E of title VI, or subtitle D of title VIII, of H.R. 5300 of the 99th Congress as passed the House of Representatives. "(3) N o TAX IF AMOUNTS COLLECTED EXCEED $300,000,000.—

"(A) ESTIMATES BY SECRETARY.—The Secretary as of the

Ante, pp. 1761, 1956!

close of each calendar quarter (and at such other times as the Secretary determines appropriate) shall make an estimate of the amount of taxes which will be collected under this section (to the extent attributable to the Oil Spill "* Liability Trust Fund financing rate) during the period beginning on the commencement date and ending on December 31, 1991. "(B) TERMINATION IF $300,000,000 CREDITED BEFORE JANUARY 1, 1992.—If the Secretary estimates under subparagraph (A) that more than $300,000,000 will be credited to ^ the Fund before January 1, 1992, the Oil Spill Liability Trust Fund financing rate shall not apply after the date on which (as estimated by the Secretary) $300,000,000 will be so credited to the Fund." - -- (3) Sections 4661(c) and 4671(e) of such Code (relating to termination of environmental taxes) are each amended by striking out " n o tax is imposed under section 4611(a)" and inserting in lieu thereof " the Hazardous Substance Superfund financing r a t e under section 4611 does not apply".

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100 STAT. 1959

(4) Subsection (b) of section 9507 of such Code (relating to Infra; post, p. transfers to Superfund) is amended by adding at the end thereof i^^^. the following: "In the case of the tax imposed by section 4611, paragraph (1) shall apply only to so much of such tax as is attributable to the Hazardous Substance Superfund financing rate under section 4611(c)." Ante, pp. 1955, (d) EFFECTIVE DATE.—

O^^^G

(1) IN GENERAL.—Except as provided in paragraph (2), the notY amendments made by this section shall take effect on the rv ' commencement date (as defined in section 4611(0(2) of the Internal Revenue Code of 1954, as added by this section). Ante, p. 1958. (2) COORDINATION WITH SUPERFUND REAUTHORIZATION.—The

amendments made by this section shall take effect only if the Superfund Amendments and Reauthorization Act of 1986 is Ante, p. 1613. enacted.

^^

Subpart C—Oil Spill Liability Trust Fund

SEC. 8033. OIL SPILL LIABILITY TRUST FUND.

(a) IN GENERAL.—Subchapter A of chapter 98 of the Internal Revenue Code of 1954 (relating to establishment of trust funds) is amended by adding after section 9506 the following new section:

Post, p. 2095; 26 USC 9501.

"SEC. 9507. OIL SPILL LIABILITY TRUST FUND.

Post, p. 1962;

"(a) CREATION OF TRUST FUND.—There is established in the Treasury of the United States a trust fund to be known as the 'Oil Spill Liability Trust Fund', consisting of such amounts as may be appropriated or credited to such Trust Fund as provided in this section or section 9602(b). "01>) TRANSFERS TO TRUST FUND.—There are hereby appropriated to the Oil Spill Liability Trust Fund amounts equivalent to— "(1) taxes received in the Treasury under section 4611 (relating to environmental tax on petroleum) to the extent attributable to the Oil Spill Liability Trust Fund financing rate under section 4611(c), "(2) amounts recovered, collected, or received under subtitle A of the Comprehensive Oil Pollution Liability and Compensation Act, i: "(3) amounts remaining (on the 1st day the Oil Spill Liability Trust Fund financing rate under section 4611(c) applies) in the Deep Water Port Liability Fund established by section 18(0 of ^( the Deep Water Port Act of 1974, 33 USC 1517. "(4) amounts remaining (on such date) in the Offshore Oil 'K. Pollution Compensation Fund established under section 302 of b the Outer Continental Shelf Lands Act Amendments of 1978, 43 USC 1812. and •; "(5) amounts credited to such trust fund under section 311(s) of the Federal Water Pollution Control Act. 33 USC 1321. "(c) EXPENDITURES.— ,... "(1) GENERAL EXPENDITURE PURPOSES.—

\l

"(A) IN GENERAL.—Amounts in the Oil Spill Liability Trust Fund shall be available, as provided in appropriation Acts, only for purposes of making expenditures for— "(i) the payment of removal costs described in the Comprehensive Oil Pollution Liability and Compensation Act,

,..

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 100 STAT. 1960

PUBLIC LAW 99-509—OCT. 21, 1986

33 USC 1321.

1^ -

33 USC 1474

'*

Ante, pp. 1761, 1955.

"(ii) the payment of claims under the Comprehensive Oil Pollution Liability and Compensation Act for d a m a g e which is not otherwise compensated, "(iii) c a r r y i n g out subsections (c), (d), (i), and (1) of section 311 of the Federal W a t e r Pollution Control Act w i t h respect to any discharge of oil (as defined in such section), "(iv) c a r r y i n g o u t section 5 of the I n t e r v e n t i o n on the H i g h Seas Act r e l a t i n g to oil pollution or the substantial t h r e a t of oil pollution, "(v) the payment of all expenses of administration i n c u r r e d by the Federal Government under the Comprehensive Oil Pollution Liability and Compensation Act, and "(vi) the payment of contributions to the International F u n d under such Act. For purposes of t h i s subparagraph, references to the Comprehensive Oil Pollution Liability and Compensation Act shall be t r e a t e d a s references to qualified authorizing legislation (as defined in section 4611). "(B) SPECIAL RULES. — "(i) P A Y M E N T S TO GOVERNMENTS ONLY FOR REMOVAL COSTS A N D NATURAL RESOURCE DAMAGE ASSESSMENTS

.?•-, '•i

^,. .;'

AND CLAIMS.—Exccpt in the case of payments described i n subparagraph (A)(v), a m o u n t s shall b e available under subparagraph (A) for payments to any government only for— "(I) removal costs and n a t u r a l resource d a m a g e assessments and claims, and "(II) administrative expenses related to such costs, assessments, or claims, "(ii)

RESTRICTIONS

ON

CONTRIBUTIONS

TO

INTER-

NATIONAL FUND.—Under regulations prescribed by the Secretary, a m o u n t s shall be available under subparagraph (A) with respect to any contribution to the International F u n d only in proportion to the portion of such fund used for a purpose for which a m o u n t s may be paid from the Oil Spill Liability T r u s t F u n d. "(2) LIMITATIONS O N EXPENDITURES.—

"(A) $500,000,000 PER INCIDENT, ETC.—The maximum a m o u n t which may be paid from the Oil Spill Liability T r u s t F u n d w i t h respect to— "(i) any single incident shall not exceed $500,000,000, and "(ii) natural resource damage assessments and claims in connection with any single incident shall not exceed $250,000,000. "(B) $30,000,000 MINIMUM BALANCE.—Exccpt in the case of payments described in paragraph (l)(A)(i), a payment may be made from such Trust Fund only if the amount in such Trust Fund after such payment will not be less than $30,000,000. "(d) AUTHORITY To BORROW.—

Appropriation authorization.

"(1) IN GENERAL.—There are authorized to be appropriatea to the Oil Spill Liability Trust Fund, as repayable advances, such sums as may be necessary to carry out the purposes of such Trust Fund.

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100 STAT. 1961

"(2) LIMITATION ON AMOUNT OUTSTANDING.—The maximum

aggregate amount of repayable advances to the Oil Spill Liability Trust Fund which is outstanding at any one time shall not exceed $500,000,000. "(3) REPAYMENT OF ADVANCES.—

"(A) IN GENERAL.—Advances made to the Oil Spill Liability Trust Fund shall be repaid, and interest on such advances shall be paid, to the general fund of the Treasury when the Secretary determines that moneys are available for such purposes in such Fund. "(B) FINAL REPAYMENT.—No advance shall be made to the Oil Spill Liability Trust Fund after December 31, 1991, and all advances to such Fund shall be repaid on or before such date. "(C) RATE OF INTEREST.—Interest on advances made pursuant to this subsection shall be— "(i) at a rate determined by the Secretary of the Treasury (as of the close of the calendar month preceding the month in which the advance is made) to be equal to the current average market yield on outstanding marketable obligations of the United States with remaining periods to maturity comparable to the anticipated period during which the advance will be outstanding, and "(ii) compounded annually. "(e) LIABILITY OF THE UNITED STATES LIMITED TO AMOUNT IN TRUST FUND.— "(1) GENERAL RULE.—Any claim filed against the Oil Spill

Liability Trust Fund may be paid only out of such Trust Fund. "(2) COORDINATION WITH OTHER PROVISIONS.—Nothing in

the

Comprehensive Oil Pollution Liability and Compensation Act (or in any amendment made by such Act) shall authorize the payment by the United States Government of any amount with respect to any such claim out of any source other than the Oil Spill Liability Trust Fund. "(3) ORDER IN WHICH UNPAID CLAIMS ARE TO BE PAID.—If at

any

time the Oil Spill Liability Trust Fund has insufficient funds (or is unable by reason of subsection (c)(2)) to pay all of the claims out of such Trust Fund at such time, such claims shall, to the extent permitted under paragraph (1) and such subsection, be paid in full in the order in which they were finally determined." (b) CLERICAL AMENDMENT.—The table of sections for subchapter A of chapter 98 of such Code is amended by adding after the item relating to section 9506 the following new item: "Sec. 9507. Oil Spill Liability Trust Fund." (c) EFFECTIVE DATE.—

(1) IN GENERAL.—The amendments made by this section shall take effect on the commencement date (as defined in section 4611 of the Internal Revenue Code of 1954, as amended by this part).

v

26 USC 9509. Ante, pp. 1761, ^^^^•

(2) COORDINATION WITH SUPERFUND REAUTHORIZATION.—If the

Superfund Amendments and Reauthorization Act of 1986 is Ante, p. 1613. enacted— (A) subsection (a) of this section shall be applied by substituting "section 9508" for "section 9506",

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 100 STAT. 1962

PUBLIC LAW 99-509—OCT. 21, 1986

Ante, p. 1959.

,

V'

(B) section 9507 of the Internal Revenue Code of 1954, as added by this section, is hereby redesignated as section 9509 of such Code, and (C) in lieu of the amendment made by subsection (b), the table of sections for subchapter A of chapter 98 of such Code is amended by adding after the item relating to section 9508 the following new item: "Sec. 9509. Oil Spill Liability Trust Fund."

PART V—DENIAL OF CERTAIN TAX BENEFITS WITH RESPECT TO ACTIVITIES IN CERTAIN FOREIGN COUNTRIES SEC. 8041. DENIAL OF CERTAIN TAX BENEFITS WITH RESPECT TO ACTIVITIES IN CERTAIN FOREIGN COUNTRIES. (a) DENIAL OF FOREIGN TAX CREDIT.—Section 901 of the Internal

Post, p. 2095; 26 USC 901.

Revenue Code of 1954 (relating to taxes of foreign countries and of possessions of the United States), as amended by the Tax Reform Act of 1986, is amended by redesignating subsection (j) as subsection (k) and by inserting after subsection (i) the following new subsection: "0) DENIAL OF FOREIGN TAX CREDIT, ETC., WITH RESPECT TO CERTAIN FOREIGN COUNTRIES.—

"(1) IN GENERAL.—Notwithstanding any other provision of this part— "(A) no credit shall be allowed under subsection (a) for any income, war profits, or excess profits taxes paid or if'; accrued (or deemed paid under section 902 or 960) to any ' country if such taxes are with respect to income attributable to a period to which this subsection applies to such country, and "(B) subsections (a), (b), and (c) of section 904 and sections 902 and 960 shall be applied separately with respect to income attributable to such a period from sources within any country so identified. "(2) COUNTRIES TO WHICH SUBSECTION APPLIES.—

' * ' '-' •
 * '._•

22 USC 2751 note. ,,, Terrorism. Ante, p. 874.

,.

J,

,1^^ ,., '

"(A) IN GENERAL.—This subsection shall apply to any foreign country— "(i) the government of which the United States does '' not recognize, unless such government is otherwise eligible to purchase defense articles or services under the Arms Export Control Act, "(ii) with respect to which the United States has severed diplomatic relations, "(iii) with respect to which the United States has not severed diplomatic relations but does not conduct such relations, or ^ "(iv) which the Secretary of State has, pursuant to ^, section 6(j) of the Export Administration Act of 1979, as amended, designated as a foreign country which repeatedly provides support for acts of international • terrorisms. "(B) PERIOD FOR WHICH SUBSECTION APPLIES.—This subsec-

tion shall apply to any foreign country described in subparagraph (A) during the period— "(i) beginning on the later of—

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"(I) January 1, 1987, or "(II) 6 months after such country becomes a country described in subparagraph (A), and "(ii) ending on the date the Secretary of State certifies to the Secretary of the Treasury that such country is no longer described in subparagraph (A). '<. "(3) TAXES ALLOWED AS A DEDUCTION.—Section 275 shall not apply to any tax which is not allowable as a credit under subsection (a) by reason of this subsection. "(4) REGULATIONS.—The Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this subsection, including regulations which treat income paid through 1 or more entities as derived from a foreign country to which this subsection applies if such income was, without regard to such entities, derived from such country."

,. ^

(b) DENIAL OF DEFERRAL OF INCOME.— (1) GENERAL RULE.—Section 952(a) of such Code (defining

subpart F income) is amended— (A) by striking out "and" at the end of paragraph (3), by striking out the period at the end of paragraph (4) and . > inserting in lieu thereof ", and", and by inserting immediately after paragraph (4) the following new paragraph: "(5) the income of such corporation derived from any foreign country during any period during which section 9010*) applies to such foreign country.", and (B) by adding at the end thereof the following sentence: "For purposes of paragraph (5), the income described therein shall be reduced, under regulations prescribed by the Secretary, so as to take into account deductions (including taxes) properly allocable to such income." (2) INCOME DERIVED FROM FOREIGN COUNTRY.—Section 952 of

such Code (defining subpart F income), as amended by the Tax Reform Act of 1986, is amended by adding at the end thereof the Post, p. 2095. following new subsection: "(d) INCOME DERIVED FROM FOREIGN COUNTRY.—The Secretary Regulations. shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of subsection (a)(5), including regulations which treat income paid through 1 or more entities as derived from a foreign country to which section 901(j) applies if such income was, without regard to such entities, derived from such country." (c) EFFECTIVE DATE.—The amendments made by this section shall 26 USC 901 note. take effect on January 1, 1987.

PART VI—APPROPRIATIONS FOR IRS ENFORCEMENT SEC. 8051. APPROPRIATIONS FOR IRS ENFORCEMENT.

For purposes of reconciliation, in order to provide for an accurate estimate of revenue raised by increased appropriations for the Internal Revenue Service, the enacted appropriations measure providing funding for the Internal Revenue Service for the fiscal rear ending September 30, 1987, will include the following funding evels: for "Salaries and Expenses", $95,147,000; for "Processing Tax Returns", $1,332,902,000; for "Examinations and Appeals", $1,623,162,000; and for "Investigation, Collection, and Taxpayer

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.

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PUBLIC LAW 99-509—OCT. 21, 1986

Service", $1,196,581,000: Provided, That the allocation to the Senate Committee on Appropriations pursuant to section 302(a) of the Budget Act, as amended, under Senate Concurrent Resolution 120, the concurrent resolution on the budget for fiscal year 1987, is increased by $300,000,000 in both new budget authority and outlays.

PART VII—STUDY OF COMMUNICATION SERVICES NOT SUBJECT TO FEDERAL EXCISE TAX SEC. 8061. STUDY OF COMMUNICATION SERVICES NOT SUBJECT TO FEDERAL EXCISE TAX.

Post, p. 2095; 26 USC 4251.

(a) IN GENERAL.—The Secretary of the Treasury or his delegate shall conduct a study of communication services which are exempt from the tax imposed by section 4251 of the Internal Revenue Code of 1954 by reason of being a private communication service (as defined in section 4252(d) of such Code) or by reason of a specific exemption from such tax under section 4253 of such Code. Such study shall include an estimate of the reduction in tax revenues by reason of each such exemption, shall describe the types of persons which benefit from each such exemption, and a method under which such tax could be extended to private communication services (as so defined). In conducting such study, the Secretary of the Treasury or his delegate shall consult with the Secretary of Commerce and the Chairman of the Federal Communications Commission. (b) REPORT.—The report of the study under subsection (a) shall be submitted, not later than June 30, 1987, to the Committee on Ways and Means of the House of Representatives and the Committee on Finance of the Senate.

PART VIII—AMENDMENTS RELATED TO TAX REFORM ACT OF 1986 SEC. 8071. TREATMENT OF CERTAIN TRUCKS, ETC.

Post, p. 2095; 26 USC 168 note, Iowa.

Post, p. 2095; 26 USC 42. 26 USC 42 note. Post, p. 2095.

Subsection (a) of section 204 of the Tax Reform Act of 1986 (relating to additional transitional rules) is amended by adding at the end thereof the following new paragraph: "(40) CERTAIN TRUCKS, ETC.—The amendments made by section 201 shall not apply to trucks, tractor units, and trailers I which a privately held truck leasing company headquartered in Des Moines, Iowa, contracted to purchase in September 1985 but only to the extent the aggregate reduction in Federal tax liability by reason of the application of this paragraph does not exceed $8,500,000." SEC. 8072. APPLICATION OF AT-RISK RULES TO LOW-INCOME HOUSING CREDIT. (a) IN GENERAL.—Paragraph (1) of section 42(k) of the Internal Revenue Code of 1986 (relating to low-income housing credit), as added by the Tax Reform Act of 1986, is amended by striking out "subparagraph (D)(ivXD" and inserting in lieu thereof "subparagraphs (D)(iiXII) and (D)(ivXD". O> EFFECTIVE DATE.—The amendment made by subsection (a) t) shall take effect as if included in the amendment made by secti n 252(a) of the Tax Reform Act of 1986.

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SEC. 8073. TREATMENT OF CERTAIN RURAL HOUSING FOR PURPOSES OF TRANSITIONAL RULE FOR LOW-INCOME HOUSING. (a) IN GENERAL.—Subsection (d) of section 502 of the Tax Reform Act of 1986 (defining qualified investor) is amended by adding at the end thereof the following new paragraph: "(4) SPECIAL RULE FOR CERTAIN RURAL HOUSING.—In the case of any interest in a qualified low-income housing project which— "(A) is assisted under section 515 of the Housing Act of 1949 (relating to the Farmers' Home Administration Program), and "(B) is located in a town with a population of less than 10,000 and which is not part of a metropolitan statistical area, paragraph (1)(B) shall be applied by substituting '35 percent' for '50 percent' and subsection (b)(l) shall be applied by substituting '5th taxable year' for '6th taxable year'. The preceding sentence shall not apply to any interest unless, on December 31, 1986, at least one-half of the number of payments required with respect to such interest remain to be paid." (b) EFFECTIVE DATE.—The amendment made by subsection (a) shall take effect as if included in section 502 of the Tax Reform Act of 1986 on the date of its enactment.

26 USC 469 note. Post, p. 2095.

42 USC 1485.

26 USC 469 note,

PART IX—COORDINATION WITH OTHER PROVISIONS SEC. 808L COORDINATION WITH OTHER PROVISIONS. 26 USC 1 note. Nothing in any provision of this Act (other than this title) shall be Taxes, construed as— (1) imposing any tax (or exempting any person or property from any tax), (2) establishing any trust fund, or (3) authorizing amounts to be expended from any trust fund.

Subtitle B—Customs Revenues SEC. 8101. CUSTOMS USER FEES FOR THE PROCESSING OF MERCHANDISE ENTRIES. (a) AMOUNT OF FEE.—Subsection (a) of section 13031 of the Consolidated Omnibus Budget Reconciliation Act of 1985 (19 U.S.C. 58c(a)) is amended by adding at the end thereof the following new paragraphs: "(9) For the processing of any merchandise (other than an article that is— "(A) provided for in schedule 8 of the Tariff Schedules of the United States, 19 USC 1202 "(B) a product of an insular possession of the United note. States, or "(C) a product of any county listed in General Headnote 3(e)(vi) or (vii) of such Schedules) that is formally entered, or withdrawn from warehouse for consumption— "(i) after November 30, 1986, and "(ii) before October 1, 1987; a fee in an amount equal to 0.22 percent ad valorem. "(10) For the processing of any merchandise (other than an

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 100 STAT. 1966

Ante, p. 308.

19 USC 1401a. Federal Register, publication.

PUBLIC LAW 99-509—OCT. 21, 1986

article described in subparagraph (A), (B), or (C) of paragraph (9)) that is formally entered, or withdrawn from warehouse for consumption, during any fiscal year occurring after Septemir ber 30, 1987; a fee in an amount equal to the lesser of— "(A) 0.17 percent ad valorem, or "(B) an ad valorem rate which the Secretary of the Treasury estimates will provide a total amount of revenue during the fiscal year equal to— J' "(i) the total amount authorized to be appropriated - . ' for such fiscal year to the United States Customs Service for salaries and expenses incurred in conducting •" - commercial operations during such fiscal year, reduced by "(ii) the excess, if any, of— .. "(I) the total amount authorized to be approri.t.= priated for such salaries and expenses for such • ' fiscal year, over "(II) the total amount actually appropriated for >. such salaries and expenses for such fiscal year; except that if appropriations are not authorized for a fiscal year, i;i the fee imposed under this paragraph with respect to that year shall be in an amount equal to 0.17 percent ad valorem.". (\y) REDUCTION IN AMOUNT OF FEE.—Subsection (b) of section 13031 of the Consolidated Omnibus Budget Reconciliation Act of 1985 is amended by adding at the end thereof the following new paragraphs: "(8)(A) The fee charged under subsection (a)(9) or (10) with respect to the processing of merchandise shall— "(i) be paid by the importer of record of the merchandise; and "(ii) be based on the value of the merchandise as determined under section 402 of the Tariff Act of 1930. "(B)(i) By no later than the date that is 5 days after the date on which any funds are appropriated to the United States Customs Service for salaries or expenses incurred in conducting commercial operations, the Secretary of the Treasury shall determine the ad valorem rate of the fee charged under subsection (a)(10) and shall publish the determination in the Federal Register. Such ad valorem rate shall apply with respect to services provided for the processing of entries, and withdrawals from warehouse, for consumption made after the date that is 60 days after the date of such determination. "(ii) No determination is required under clause (i) with respect to an appropriation to the United States Customs Service if the funds appropriated are available for less than 60 days. "(9) The Secretary may reduce by an amount he considers equitable the fees charged under subsection (a) for the processing of merchandise entries at facilities at which users reimburse the United States Customs Service, pursuant to section 9701 of title 31, United States Code, or section 236 of the Trade and Tariff Act of 1984 (19 U.S.C. 58b), for the services that it provides at the facilities.". (c) PROVISION OF CUSTOMS SERVICES.—(1) Subsection (e) of section 13031fe) of the Consolidated Omnibus Budget Reconciliation Act of 1985 is amended by adding at the end thereof the following new paragraph: "(4) Notwithstanding any other provision of law, during any period when fees are authorized under subsection (a), no charges, other than such fees, may be collected for—

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c

"(A) any cargo inspection, clearance, or other customs service performed (regardless whether performed outside of normal business hours on an overtime basis); or e: "(B) any customs personnel provided; in connection with the arrival or departure of any commercial vessel, vehicle or aircraft, or its passengers, crew, and cargo, in the United States.". (2) Paragraph (2) of such subsection (e), as amended by section 1893 of the Tax Reform Act of 1986, is amended by striking out "Paragraph (1)" and inserting "This subsection".

. >s<.

(d) CUSTOMS USER FEE ACCOUNT.—Subsection (f) of section 13031 of

the Consolidated Omnibus Budget Reconciliation Act of 1985 (19 U.S.C. 58c(f)) is amended by adding at the end thereof the following new paragraphs: "(3) Except as provided in paragraph (2), all funds in the Customs User Fee Account shall only be available, to the extent provided for in appropriation Acts, for the salaries and expenses of the United States Customs Service incurred in conducting commercial operations. "(4) At the close of fiscal year 1988 and each even-numbered Reports, fiscal year occurring thereafter, the Secretary of the Treasury shall submit a report to the Committee on Ways and Means of the House of Representatives and the Committee on Finance of the Senate regarding how the fees imposed under subsection (a) should be adjusted in order that the balance of the Customs User Fee Account approximates a zero balance. Before making recommendations regarding any such adjustments, the Secretary of the Treasury shall provide adequate opportunity for public comment. The recommendations shall, as precisely as possible, propose fees which reflect the actual costs to the United States Government for the commercial services provided by the United States Customs Service.". (e) TERMINATION OF FEES.—Subsection (j) of section 13031 of the 19 USC 58c note. Consolidated Omnibus Budget Reconciliation Act of 1985 is -^"^^^ P- 310. amended— (1) by striking out "provided in paragraph (2)" in paragraph (1) and inserting in lieu thereof "otherwise provided in this subsection"; and (2) by adding at the end thereof the following new paragraph: "(3) Fees may not be charged under subsection (a) after September 30, 1989.". Paragraph (3) shall not apply to any authorization made by title IX of this Act. SEC. 8102. AUTHORIZATION OF APPROPRIATIONS FOR FISCAL YEAR 1987 FOR THE UNITED STATES CUSTOMS SERVICE.

Section 301 of the Customs Procedural Reform and Simplification Act of 1978 (19 U.S.C. 2075) is amended as follows: Ante, p. 305. (1) Subsection (a) is amended— (A) by inserting "(1)" after "(a)"; and o+ -ft. (B) by adding at the end thereof the following new paragraph: "(2) The authorization of the appropriations for the United States Customs Service for each fiscal year after fiscal year 1987 shall specify—

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 100 STAT. 1968

Appropriation authorization.

PUBLIC LAW 99-509—OCT. 21, 1986

"(A) the amount authorized for the fiscal year for the salaries and expenses of the Service in conducting commercial operations; and "(B) the amount authorized for the fiscal year for the salaries <;; and expenses of the Service for other than commercial operations."; and (2) Subsection (b) is amended to read as follows: "(b)(1) There are authorized to be appropriated to the Department of the Treasury not to exceed $1,001,180,000 for the salaries and expenses of the United States Customs Service for fiscal year 1987; of which— "(A) $749,131,000 is for salaries and expenses to maintain current operating levels, and includes such sums as may be necessary to complete the testing of the prototype of the automatic license plate reader program and to implement that 1 program; "(B) $80,999,000 is for the salaries and expenses of additional personnel to be used in carrying out drug enforcement activities; and "(C) $171,050,000 is for the operation and maintenance of the ' air interdiction program of the Service, of which— "(i) $93,500,000 is for additional aircraft, communications enhancements, and command, control, communications, and intelligence centers, and "(ii) $350,000 is for a feasibility and application study for a low-level radar detection system in collaboration with the Los Alamos National Laboratory. "(2) No part of any sum that is appropriated under the authority of paragraph (1) may be used to close any port of entry at which, during fiscal year 1986— "(A) not less than 2,500 merchandise entries (including informal entries) were made; and "(B) not less than $1,500,000 in customs revenues were assessed.".

Subtitle C—Public Debt Limit and Related Provisions 31 USC 3101

SEC. 8201. TEMPORARY INCREASE IN PUBLIC DEBT LIMIT.

During the period beginning on the date of the enactment of this Act and ending on May 15, 1987, the public debt limit set forth in subsection (b) of section 3101 of title 31, United States Code, shall be temporarily increased by $189,000,000,000. SEC. 8202. RESTORATION OF LOST INTEREST TO CERTAIN TRUST FUNDS.

(a) GENERAL RULE.—The Secretary of the Treasury shall pay, from amounts in the general fund of the Treasury not otherwise appropriated, to each qualified fund on the 1st normal interest payment date after the date of the enactment of this Act an amount equal to the interest payment shortfall for such fund. (b) QUALIFIED FUND.—For purposes of this section, the term "qualified fund" means any fund which is listed in Table III of the Monthly Statement of Public Debt issued by the Department of the Treasury for September 30, 1986, and which has an interest pay-

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100 STAT. 1969

ment shortfall. Such term shall not include the Department of Defense Military Retirement Fund. (c) INTEREST PAYMENT SHORTFALX..—For purposes of this section, the term "interest payment shortfall" means, with respect to any fund, the reduction in the interest which would have been earned by such fund during the period beginning with September 30, 1986, and ending with the date of the enactment of this Act as the result of noninvestments, redemptions, and disinvestments with respect to such fund which occurred during such period and which would not have occurred if H.J. Res. 668 (99th Congress, 2d Session), as passed by the House of Representatives on June 26, 1986, had been enacted into law on September 30, 1986. Such amount shall be reduced by any payment to such fund under any other provision of law in respect of such lost interest. SEC. 8203. RESTORATION OF DEPARTMENT OF DEFENSE MILITARY RETIREMENT FUND.

The Secretary of the Treasury shall immediately issue to the Department of Defense Military Retirement Fund obligations under chapter 31 of title 31, United States Code, which such Secretary, in 31 USC 3101 et consultation with the Secretary of Defense, determines would have seq. been issued to such fund on October 1, 1986, if H.J. Res. 668 (99th Congress, 2d session), as passed by the House of Representatives on June 26, 1986, had been enacted into law on September 30, 1986. Such obligations shall be market-based special obligations issued at prices, including accrued interest, prevailing for such obligations on October 1, 1986. Such obligations shall be issued as of October 1, 1986, and the fund shall earn interest on such obligations beginning on October 1, 1986. Such obligations shall be substituted for obligations which are held by such fund on the date of the enactment of this Act (and any uninvested balance on such date in such fund shall be reduced) in a manner which will ensure that, after such substitution (and reduction), the holdings of such fund will replicate to the maximum extent practicable the holdings which would have been held by such fund on such date if such H.J. Res. 668 had been enacted into law on September 30, 1986.

TITLE IX—INCOME SECURITY, MEDICARE, MEDICAID, AND MATERNAL AND CHILD HEALTH PROGRAMS Subtitle A—OASDI provisions Subtitle B—Provisions relating to public assistance Subtitle C—Older Americans pension benefits Subtitle D—Provisions relating to medicare Subtitle E—Medicaid and matemeil and child health Subtitle F—Provision relating to access to health care

Subtitle A—OASDI Provisions SEC. 9001. ELIMINATION OF 3-PERCENT TRIGGER FOR COST-OF-LIVING INCREASES. (a) EuMiNATiON OF TRIGGER.—Section 215(i)(l)(B) of the Social Security Act is amended by striking out "with respect to which the 42 USC 415. applicable increase percentage is 3 percent or more" and inserting

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 100 STAT. 1970

PUBLIC LAW 99-509—OCT. 21, 1986

in lieu thereof "with respect to which the applicable increase percentage is greater than zero". 42 USC 415.

42 USC 1305 ^ote.

,

(b) CONFORMING AMENDMENTS.— (1) IN CURRENT LAW.—Section

 * -..-.\\'c-

215(i) of such Act is further

amended— .,... (A)(i) by striking out clause (i) in paragraph (2)(C) and ^'; redesignating clauses (ii) and (iii) of such paragraph as clauses (i) and (ii), respectively; and (ii) by striking out "under clause (ii)" in clause (ii) of such

paragraph as so redesignated and inserting in lieu thereof "under clause (i)"; ' (B) by inserting "and by section 9001 of the Omnibus Budget Reconciliation Act of 1986" after "Social Security Amendments of 1983" in paragraph (4); and c| i (C) by striking out "because the wage increase percentage was less than 3 percent" in p a r g ^ a p h (5)(A)(i) and inserting .-;, in lieu thereof "because there was no wage increase percentage greater than zero". (2) I N APPLICABLE FORMER LAW.—Section 215(i) of such Act, as in effect in December 1978 and applied in certain cases under the provisions of such Act in effect after December 1978, is amended— (A) by striking out ", by not less than 3 per centum," in paragraph (I)(B); and x^,? (c)

(B) by striking out "(C)(i) W h e n e v e r " and all that follows down through "(ii) W h e n e v e r " i n paragraph (2)(C) and inserting in lieu thereof "(C) W h e n e v e r ". TECHNICAL

AMENDMENT

TO SMI PROGRAM.—Section

42 USC I395r.

1839(f)(2)(A) of such Act is amended to read as follows: "(A) the monthly premium amount determined under subsection (a)(2) for that January reduced by the amount (if any) by 42 USC 402, 423. which the monthly benefit under section 202 or 223 for that November, after the deduction of the premium (disregarding subsection (b)) for that individual for that December and after 42 USC 415. rounding under section 215(g), would exceed the monthly benefit under section 202 or 223 for that December, after the deduction of the monthly premium amount determined under subsection (a)(2) (disregarding subsection 0))) for that individual for that January and after rounding under section 215(g), or". 42 USC 415 note. (d) EFFECTIVE DATE.—(1) Except as provided in paragraphs (2) and (3), the amendments made by this section shall apply with respect to cost-of-living increases determined under section 215(i) of the Social Security Act (as currently in effect, and as in effect in December 1978 and applied in certain cases under the provisions of such Act in effect after December 1978) in 1986 and subsequent years. (2) The amendments made by paragraphs (I)(A) and (2)(B) of subsection (b) shall apply with respect to months after September 1986. (3) The amendment made by subsection (c) shall apply with respect to monthly premiums (under section 1839 of the Social Security Act) for months after December 1986. SEC. 9002. DEPOSITS OF SOCIAL SECURITY CONTRIBUTIONS BY STATE AND LOCAL GOVERNMENT EMPLOYERS.

26 USC 3126, ^^^^' „„«. post, p. 2095; 26 USC 3121 et seq.

(a) RETURNS AND PAYMENTS.—(1) Subchapter C of chapter 21 of the Internal Revenue Code of 1954 is amended by redesignating

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 PUBLIC LAW 99-509—OCT. 21, 1986

100 STAT. 1971

section 3126 as section 3127, and by inserting after section 3125 the following new section:

iiii qa ' t

"SEC. 3126. RETURN AND PAYMENT BY GOVERNMENTAL EMPLOYER.

Wages.

"If the employer is a State or political subdivision thereof, or an agency or instrumentality of any one or more of the foregoing, the return of the amount deducted and withheld upon any wages under section 3101 and the amount of the tax imposed by section 3111 may be made by any officer or employee of such State or political subdivision or such agency or instrumentality, as the case may be, having control of the payment of such wages, or appropriately designated for that purpose.". (2) The table of sections for subchapter C of chapter 21 of such Code is amended by striking out the last item and inserting in lieu thereof the following: "Sec. 3126. Return and payment by governmental employer. "Sec. 3127. Short title.".

'-'

' -

'

> % r'i

>•

(b) TREATMENT OF SERVICE UNDER SECTION 218 AGREEMENTS AS EMPLOYMENT PERFORMED BY EMPLOYEES.— (1) SERVICE TREATED AS EMPLOYMENT.—(A) Section 3121(b)(7) of

such Code is amended— (i) by striking out "; or" at the end of subparagraph (C) and inserting in lieu thereof a comma; (ii) by striking out the semicolon at the end of subpara> graph (D) and inserting in lieu thereof ", or "; and (iii) by adding after subparagraph (D) the following new subparagraph: "(E) service included under an agreement entered into pursuant to section 218 of the Social Security Act;". -t (B) Section 1402(b) of such Code is amended by striking out "under an agreement entered into pursuant to the provisions of section 218 of the Social Security Act (relating to coverage of State employees), or" in the flush sentence immediately following paragraph (2).

Infra.

(2) INDIVIDUAL PERFORMING SERVICES TREATED AS EMPLOYEE.—

(A) Section 3121(d) of such Code is amended by redesignating paragraph (3) as paragraph (4), and by inserting after paragraph (2) the following new paragraph: "(3) any individual who performs services that are included under an agreement entered into pursuant to section 218 of the Social Security Act; or". (B) Section 3306(i) of such Code is amended by striking out "subparagraphs (B) and (C) of paragraph (3)" and inserting in lieu thereof "paragraph (3) and subparagraphs (B) and (C) of paragraph (4)'.

'' i\ (c)

CONFORMING AMENDMENTS IN

SOCIAL SECURITY ACT.—(1)

.,'./' <!i

'..

42 USC 418.

Subsections (e), (h), (i), (j), (q), (r), (s), (t), and (w) of section 218 of the Social Security Act are repealed; and subsections (f), (g), (k), (1), (m), (n), (o), (p), and (u) of such section are redesignated as subsections (e), (f), (g), (h), (i), (j), (k), (1), and (m), respectively. (2)(A) Section 205(c)(l)(D)(i) of such Act is amended by inserting 42 USC 405. "(as in effect prior to December 31, 1986)" after "section 218(e). (B) Section 205(c)(5)(F)(iii) of such Act is amended— (i) by inserting "(as in effect prior to December 31, 1986)" after "section 218"; and > -/: ^(ii) by inserting "(as so in effect)" after "subsection (q) of such ' "" section".

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Page:United States Statutes at Large Volume 100 Part 3.djvu/164

 100 STAT. 1972 42 USC 418.

42 USC 424a. Wjiges.

42 USC 418 note.

26 USC 3101, 3111. 26 USC 3402.

PUBLIC LAW 99-509—OCT. 21, 1986

(C) Section 218(d)(6) of such Act is amended— (i) by striking out "subsection (f)" in subparagraph (A) and inserting in lieu thereof "subsection (e)"; and (ii) by striking out "subsection (f)(1)" in subparagraph (F) and inserting in Heu thereof "subsection (e)(1)". (D) Section 218(d)(8)(D) of such Act is amended by striking out "subsection (p)" and inserting in lieu thereof "subsection (1)". (E) Section 218(e)(1) of such Act (as redesignated by paragraph (1) of this subsection) is amended by striking out "Except as provided in subsection (e)(2), any agreement" and inserting in lieu thereof "Any agreement". (F) Section 224(a)(2)(B) of such Act is amended by striking out "section 218(k)" and inserting in lieu thereof "section 218(g)". (d) EFFECTIVE DATE.—The amendments made by this section are effective with respect to payments due with respect to wages paid after December 31, 1986, including wages paid after such date by a State (or political subdivision thereof) that modified its agreement pursuant to the provisions of section 218(e)(2) of the Social Security Act prior to the date of the enactment of this Act; except that in cases where, in accordance with the currently applicable schedule, deposits of taxes due under an agreement entered into pursuant to section 218 of the Social Security Act would be required within 3 days after the close of an eighth-monthly period, such 3-day requirement shall be changed to a 7-day requirement for wages paid prior to October 1, 1987, and to a 5-day requirement for wages paid after September 30, 1987, and prior to October 1, 1988. For wages paid prior to Octoljer 1, 1988, the deposit schedule for taxes imposed under sections 3101 and 3111 shall be determined separately from the deposit schedule for taxes withheld under section 3402 if the taxes imposed under sections 3101 and 3111 are due with respect to service included under an agreement entered into pursuant to section 218 of the Social Security Act.

Subtitle B—Provisions Relating to Public ^ Assistance SEC. 9101. TARGETING UNDER INCOME AND ELIGIBILITY VERIFICATION SYSTEM. State and local governments. 42 USC 1520b-7.

42 USC 1301 note. Ante, p. 219. State and local governments. 42 USC 603, 1396b.

Section 1137(a)(4)(C) of the Social Security Act is amended by inserting after "payments" the following: ", and no State shall be required to use such information to verify the eligibility of all recipients". SEC. 9102. ANNUAL CALCULATION OF FEDERAL PERCENTAGE FOR AFDC PURPOSES. Section 9528(c) of the Consolidated Omnibus Budget Reconciliation Act of 1985 (as added by section 9421(a) of this Act) is amended (effective as provided in section 9421(b))— (1) by striking out "payment to a State under section 1903" and inserting in lieu thereof "payments to States under sections 403 and 1903"; and (2) by inserting "with respect to either such section" after "shall not apply to a State".

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 PUBLIC LAW 99-509—OCT. 21, 1986

100 STAT. 1973

SEC. 9103. REQUIREMENT OF STATUTORILY PRESCRIBED PROCEDURES TO PROHIBIT RETROACTIVE MODIFICATION OF CHILD SUPPORT ARREARAGES.

(a) IN GENERAL.—Section 466(a) of the Social Security Act is amended by inserting immediately after paragraph (8) the following new paragraph: "(9) Procedures which require that any payment or installment of support under any child support order, whether ordered f processes required by paragraph (2), is (on and after the date it is due)— "(A) a judgment by operation of law, with the full force, effect, and attributes of a judgment of the State, including the ability to be enforced, "(B) entitled as a judgment to full faith and credit in such State and in any other State, and "(C) not subject to retroactive modification by such State or by any other State; except that such procedures may permit modification with respect to any period during which there is pending a petition for modification, but only from the date that notice of such petition ^ has been given, either directly or through the appropriate agent, to the obligee or (where the obligee is the petitioner) to the obligor.". (b) EFFECTIVE DATE.—(1) Except as provided in paragraph (2), the amendment made by subsection (a) shall become effective on the date of the enactment of this Act. (2) In the case of a State with respect to which the Secretary of Health and Human Services has determined that State legislation is required in order to conform the State plan approved under part D of title IV of the Social Security Act to the requirements imposed by the amendment made by subsection (a), the State plan shall not be regarded as failing to comply with the requirements of such part solely by reason of its failure to meet the requirements imposed by such amendment prior to the beginning of the fourth month beginning after the end of the first session of the State legislature which ends on or after the date of the enactment of this Act. For purposes of the preceding sentence, the term "session" means a regular, special, budget, or other session of a State legislature.
 * through the State judicial system or through the expedited

Subtitle C—Older Americans Pension Benefits SEC. 920L PROHIBITION AGAINST DISCRIMINATION ON THE BASIS OF AGE IN EMPLOYEE PENSION BENEFIT PLANS.

Section 4 of the Age Discrimination in Employment Act of 1967 (29 U.S.C 623) is amended by adding at the end the following new subsection: "(i)(1) Except as otherwise provided in this subsection, it shall be unlawful for an employer, an employment agency, a labor organization, or any combination thereof to establish or maintain an employee pension benefit plan which requires or permits— "(A) in the case of a defined benefit plan, the cessation of an employee's benefit accrual, or the reduction of the rate of an employee's benefit accrual, because of age, or

71-194 0 - 89 - 7: QL. 3 Part3

State and local governments. 42 USC 666.

42 USC 666 note. State and local governments. 42 USC 651.

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Page:United States Statutes at Large Volume 100 Part 3.djvu/166

 100 STAT. 1974

29 USC 1056. Post, p. 2095. 29 USC 1053. ,•;^

Regulations.

PUBLIC LAW 99-509—OCT. 21, 1986

"(B) in the case of a defined contribution plan, the cessation of allocations to an employee's account, or the reduction of the rate at which amounts are allocated to an employee's account, because of age. "(2) Nothing in this section shall be construed to prohibit an employer, employment agency, or labor organization from observing any provision of an employee pension benefit plan to the extent that such provision imposes (without regard to age) a limitation on the amount of benefits that the plan provides or a limitation on the number of years of service or years of participation which are taken into account for purposes of determining benefit accrual under the plan. "(3) In the case of any employee who, as of the end of any plan year under a defined benefit plan, has attained normal retirement age under such plan— "(A) if distribution of benefits under such plan with respect to £ such employee has commenced as of the end of such plan year, then any requirement of this subsection for continued accrual of benefits under such plan with respect to such employee during • such plan year shall be treated as satisfied to the extent of the actuarial equivalent of in-service distribution of benefits, and "(B) if distribution of benefits under such plan with respect to such employee has not commenced as of the end of such year in accordance with section 206(a)(3) of the Employee Retirement Income Security Act of 1974 and section 401(a)(14XC) of the Internal Revenue Code of 1986, and the payment of benefits under such plan with respect to such employee is not suspended during such plan year pursuant to section 203(a)(3)(B) of the, Employee Retirement Income Security Act of 1974 or section 411(a)(3)(B) of the Internal Revenue Code of 1986, then any requirement of this subsection for continued accrual of benefits under such plan with respect to such employee during such plan ' year shall be treated as satisfied to the extent of any adjustment in the benefit payable under the plan during such plan year attributable to the delay in the distribution of benefits after the attainment of normal retirement age. The provisions of this paragraph shall apply in accordance with regulations of the Secretary of the Treasury, Such regulations shall provide for the application of the preceding provisions of this paragraph to all employee pension benefit plans subject to this subsection and may provide for the application of such provisions, in the case of any such employee, with respect to any period of time within a plan year. "(4) Compliance with the requirements of this subsection with respect to an employee pension benefit plan shall constitute compliance with the requirements of this section relating to benefit accrual under such plan. "(5) Paragraph (1) shall not apply with respect to any employee who is a highly compensated employee (within the meaning of section 414(q) of the Internal Revenue Code of 1986) to the extent provided in regulations prescribed by the Secretary of the Treasury for purposes of precluding discrimination in favor of highly compensated employees within the meaning of subchapter D of chapter 1 of the Internal Revenue Code of 1986. "(6) A plan shall not be treated as failing to meet the requirements of paragraph (1) solely because the subsidized portion of any

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Page:United States Statutes at Large Volume 100 Part 3.djvu/167

 PUBLIC LAW 99-509—OCT. 21, 1986

100 STAT. 1975

early retirement benefit is disregarded in determining benefit accruals. "(7) Any regulations prescribed by the Secretary of the Treasury pursuant to clause (v) of section 411(b)(l)(H) of the Internal Revenue Code of 1986 and subparagraphs (C) and (D) of section 411(b)(2) of r such Code shall apply with respect to the requirements of this subsection in the same manner and to the same extent as such ?;:r •. T regulations apply with respect to the requirements of such sections 411(b)(l)(H)and411(b)(2). "(8) A plan shall not be treated as failing to meet the requirements of this section solely because such plan provides a normal retirement age described in section 3(24XB) of the Employee Retirement Income Security Act of 1974 and section 411(a)(8)(B) of the 29 USC 1002. Internal Revenue Code of 1986. Post, p. 2095. "(9) For purposes of this subsection— "(A) The terms 'employee pension benefit plan', 'defined benefit plan', 'defined contribution plan', and 'normal retirement age' have the meanings provided such terms in section 3 of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1002). "(B) The term 'compensation' has the meaning provided by ,. section 414(s) of the Internal Revenue Code of 1986.". SEC. 9202. BENEFIT ACCRUAL BEYOND NORMAL RETIREMENT AGE.

i

(a) ERISA AMENDMENTS.— (1) IN GENERAL.—Subsection (a) of section 204 of the Employee
 * Retirement Income Security Act of 1974 (29 U.S.C. 1054(a)) is

amended to read as follows: "(a) Each pension plan shall satisfy the requirements of subsection (b)(3), and— "(1) in the case of a defined benefit plan, shall satisfy the requirements of subsection (b)(D; and " "(2) in the case of a defined contribution plan, shall satisfy the requirements of subsection (b)(2).". ^, (2) DEFINED BENEFIT PLANS.—Section 204(b)(l) of such Act is amended by adding at the end thereof the following new subparagraph: "(H)(i) Notwithstanding the preceding subparagraphs, a defined benefit plan shall be treated as not satisfying the requirements of this paragraph if, under the plan, an employee's benefit accrual is ceased, or the rate of an employee's benefit accrual is reduced, because of the attainment of any age. "(ii) A plan shall not be treated as failing to meet the requirements of this subparagraph solely because the plan imposes (without regard to age) a limitation on the amount of benefits that the plan provides or a limitation on the number of years of service or years of participation which are taken into account for purposes of determining benefit accrual under the plan. "(iii) In the case of any employee who, as of the end of any plan year under a defined benefit plan, has attained normal retirement age under such plan— "(I) if distribution of benefits under such plan with respect to such employee has commenced as of the end of such plan year, ^. then any requirement of this subparagraph for continued ac^p crual of benefits under such plan with respect to such employee during such plan year shall be treated as satisfied to the extent

'

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J

,.

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Page:United States Statutes at Large Volume 100 Part 3.djvu/168

 100 STAT. 1976

29 USC 1056. 29 USC 1053.

'

Post, p. 2095.

Regulations.

29 USC 1054.

PUBLIC LAW 99-509—OCT. 21, 1986

of the actuarial equivalent of in-service distribution of benefits, and "(II) if distribution of benefits under such plan with respect to such employee has not commenced as of the end of such year in accordance with section 206(a)(3), and the payment of benefits under such plan with respect to such employee is not suspended during such plan year pursuant to section 203(a)(3)(B), then any requirement of this subparagraph for continued accrual of benefits under such plan with respect to such employee during such - plan year shall be treated as satisfied to the extent of any adjustment in the benefit payable under the plan during such plan year attributable to the delay in the distribution of benefits after the attainment of normal retirement age. The preceding provisions of this clause shall apply in accordance with regulations of the Secretary of the Treasury. Such regulations may provide for the application of the preceding provisions of this clause, in the case of any such employee, with respect to any period of time within a plan year. "(iv) Clause (i) shall not apply with respect to any employee who is a highly compensated employee (within the meaning of section 414(q) of the Internal Revenue Code of 1986) to the extent provided in regulations prescribed by the Secretary of the Treasury for purposes of precluding discrimination in favor of highly compensated employees within the meaning of subchapter D of chapter 1 of the Internal Revenue Code of 1986. "(v) A plan shall not be treated as failing to meet the requirements of clause (i) solely because the subsidized portion of any early retirement benefit is disregarded in determining benefit accruals. "(vi) Any regulations prescribed by the Secretary of the Treasury pursuant to clause (v) of section 411(b)(l)(H) of the Internal Revenue Code of 1986 shall apply with respect to the requirements of this subparagraph in the same manner and to the same extent as such regulations apply with respect to the requirements of such section 411(b)(1)(H).". (3) DEFINED CONTRIBUTION PLANS.—Section 204(b) of such Act is further amended— (A) by redesignating paragraphs (2) and (3) as paragraphs (3) and (4), respectively; and (B) by inserting after paragraph (1) the following new paragraph: "(2)(A) A defined contribution plan satisfies the requirements of this paragraph if, under the plan, allocations to the employee's account are not ceased, and the rate at which amounts are allocated to the employee's account is not reduced, because of the attainment of any age. "(B) Subparagraph (A) shall not apply with respect to any employee who is a highly compensated employee (within the meaning of section 414(q) of the Internal Revenue Code of 1986) to the extent provided in regulations prescribed by the Secretary of the Treasury for purposes of precluding discrimination in favor of highly compensated employees within the meaning of subchapter D of chapter 1 of the Internal Revenue Code of 1986. "(C) A plan shall not be treated as failing to meet the requirements of subparagraph (A) solely because the subsidized portion of any early retirement benefit is disregarded in determining benefit accrueds.

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 PUBLIC LAW 99-509—OCT. 21, 1986

100 STAT. 1977

"(D) Any regulations prescribed by the Secretary of the Treasury pursuant to subparagraphs (C) and (D) of section 411(b)(2) of the Internal Revenue Code of 1986 shall apply with respect to the requirements of this paragraph in the same manner and to the same extent as such regulations apply with respect to the requirements of such section 411(b)(2).".

Regulations,

(b) IRC AMENDMENTS.—

(1) DEFINED BENEFIT PLANS.—Section 411(b)(1) of the Internal

Revenue Code of 1986 (relating to accrued benefit requirements) is amended—

26 USC 411.

(A) by striking out "GENERAL RULES.—" and inserting in

lieu thereof "DEFINED BENEFIT PLANS.—"; AND (B) by adding at the end thereof the following new subparagraph:

J^**-

"(H) CONTINUED ACCRUAL BEYOND NORMAL RETIREMENT AGE.—

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 ''

'

• • ^'

"''*

•

"(i) IN GENERAL.—Notwithstanding the preceding subparagraphs, a defined benefit plan shall be treated as not satisfying the requirements of this paragraph if, under the plan, an employee's benefit accrual is ceased, or the rate of an employee's benefit accrual is reduced, because of the attainment of any age. "(ii) CERTAIN LIMITATIONS PERMITTED.—A plan shall not be treated as failing to meet the requirements of this subparagraph solely because the plan imposes (without regard to age) a limitation on the amount of benefits that the plan provides or a limitation on the number of years of service or years of participation which are taken into account for purposes of determining benefit accrual under the plan. "(iii) ADJUSTMENTS UNDER PLAN FOR DELAYED RETIREMENT TAKEN INTO ACCOUNT.—In the case of any employee who, as of the end of any plan year under a defined benefit plan, has attained normal retirement age under such plan— "(I) if distribution of benefits under such plan with respect to such employee has commenced as of the end of such plan year, then any requirement of this subparagraph for continued accrual of benefits under such plan with respect to such employee during such plan year shall be treated as satisfied to the extent of the actuarial equivalent of inservice distribution of benefits, and "(II) if distribution of benefits under such plan with respect to such employee has not commenced as of the end of such year in accordance with section 401(a)(14)(C), and the payment of benefits under such plan with respect to such employee is not suspended during such plan year pursuant to subsection (a)(3)(B), then any requirement of this subparagraph for continued accrual of benefits under such plan with respect to such employee during such plan year shall be treated as satisfied to the extent of any adjustment in the benefit payable under the plan during such plan year attributable to the delay in the distribution of

^^

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Page:United States Statutes at Large Volume 100 Part 3.djvu/170

 100 STAT. 1978

PUBLIC LAW 99-509—OCT. 21, 1986 '

.

••]'-

•••

benefits after the attainment of normal retirement '

'-

''^

age.

' ^ •

The preceding provisions of this clause shall apply in accordance with regulations of the Secretary. Such '• ' ' regulations may provide for the application of the preceding provisions of this clause, in the case of any such employee, with respect to any period of time • ^ •* within a plan year. = • '

"

' ''' Regulations.

Ante, p. 1977.

"(iv) DISREGARD OF SUBSIDIZED PORTION OF EARLY

RETIREMENT BENEFIT.—A plan shall not be treated as failing to meet the requirements of clause (i) solely because the subsidized portion of any early retirement benefit is disregarded in determining benefit accruals. "(v) COORDINATION WITH OTHER REQUIREMENTS.—The

Secretary shall provide by regulation for the coordination of the requirements of this subparagraph with the j:^ '/ ' requirements of subsection (a), sections 404, 410, and 415, and the provisions of this subchapter precluding discrimination in favor of highly compensated employees.". ~ (2) DEFINED CONTRIBUTION PLANS.—Section 411(b) of such Code is further amended— (A) by redesignating paragraphs (2) and (3) as paragraphs (3) and (4), respectively; and "(B) by inserting after paragraph (1) the following new paragraph: "(2) DEFINED CONTRIBUTION PLANS.—

.;;,-i. ', g,.^ , '..-

"(A) IN GENERAL.—A defined contribution plan satisfies the requirements of this paragraph if, under the plan, allocations to the employee's account are not ceased, and the rate at which amounts are allocated to the employee's account is not reduced, because of the attainment of any age. "(B) DISREGARD OF SUBSIDIZED PORTION OF EARLY RETIREMENT BENEFIT.—A plan shall not be treated as failing to

meet the requirements of subparagraph (A) solely because the subsidized portion of any early retirement benefit is disregarded in determining benefit accruals. Regulations.

?

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"(C) APPLICATION TO TARGET BENEFIT PLANS.—The SeC-

retary shall provide by regulation for the application of the requirements of this paragraph to target benefit plans. "(D) COORDINATION WITH OTHER REQUIREMENTS.—The Sec-

u-yj^ ill

retary may provide by regulation for the coordination of the requirements of this subparagraph with the requirements of subsection (a), sections 404, 410, and 415, and the provisions of this subchapter precluding discrimination in favor r •:«of highly compensated employees.". (3) CONFORMING AMENDMENT.—The first sentence of section 411(a) of such Code (relating to minimum vesting standards) is amended by striking out "paragraph (2) of subsection (b), and" and all that follows through the end thereof and inserting in lieu thereof "subsection (b)(3), and also satisfies, in the case of a defined benefit plan, the requirements of subsection (b)(1) and, & in the case of a defined contribution plan, the requirements of ^ii subsection (b)(2).".

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 PUBLIC LAW 99-509—OCT. 21, 1986

100 STAT. 1979

SEC. 9203. TREATMENT OF INDIVIDUALS HIRED AT AGES NEAR RETIREMENT AGE. (a) REPEAL OF PROVISIONS PERMITTING CERTAIN PLANS TO EXCLUDE OLDER EMPLOYEES FROM PLAN PARTICIPATION ON THE BASIS OF AGE.—

''

(1) ERISA AMENDMENT.—Section 202(a)(2) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1052(a)(2)) is amended by striking out "unless—" and all that follows and inserting in lieu thereof a period. (2) IRC AMENDMENT.—Section 410(a)(2) of the Internal Revenue Code of 1986 (relating to maximum age conditions) is amended by striking out "unless—" and all that follows and inserting in lieu thereof a period.

Post, p. 2095; 26 USC 410.

(b) DELAYED NORMAL RETIREMENT AGE FOR INDIVIDUALS COMMENCING PLAN PARTICIPATION WITHIN 5 YEARS OF ATTAINING NORMAL RETIREMENT AGE UNDER THE PLAN.—

(1) ERISA AMENDMENT.—Subparagraph (B) of section 3(24) of the Employee Retirement Income Security Act of 1974 (29 ^ U.S.C. 1002(24)(B)) is amended to read as follows: "(B) the latest of— "(i) the time a plan participant attains age 65, "(ii) in the case of a plan participant who commences participation in the plan within 5 years before attaining normal retirement age under the plan, the 5th anniversary [seiiJ-^ r of the time the plan participant commences participation in the plan, or J "(iii) in the case of a plan participant not described in clause (ii), the 10th anniversary of the time the plan participant commences participation in the plan.", (2) IRC AMENDMENT.—Subparagraph (B) of section 411(a)(8) of the Internal Revenue Code of 1986 (relating to normal retirement age) is amended to read as follows: 26 USC 411. "(B) the latest of— "(i) the time a plan participant attains age 65, "(ii) in the case of a plan participant who commences participation in the plan within 5 years before attaining normal retirement age under the plan, the 5th anniversary of the time the plan participant commences participation in the plan, or ':»!-* "(iii) in the case of a plan participant not described in clause (ii), the 10th anniversary of the time the plan participant commences participation in the plan.". SEC. 9204. EFFECTIVE DATE; REGULATIONS. 29 USC 623 note. (a) APPLICABILITY TO EMPLOYEES WITH SERVICE AFTER 1988.— ' (1) IN GENERAL.—The amendments made by sections 9201 and 9202 shall apply only with respect to plan years beginning on or after January 1, 1988, and only to employees who have 1 hour of service in any plan year to which such amendments apply. (2) SPECIAL RULE FOR COLLECTIVELY BARGAINED PLANS.—In the

•c

.3

case of a plan maintained pursuant to 1 or more collective bargaining agreements between employee representatives and 1 or more employers ratified before March 1, 1986, paragraph (1) shall be applied to benefits pursuant to, and individuals covered by, any such agreement by substituting for "January 1, 1988" the date of the commencement of the first plan year beginning on or after the earlier of—

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 100 STAT. 1980

PUBLIC LAW 99-509—OCT. 21, 1986

,

(A) the later of— (i) January 1, 1988, or i (ii) the date on which the last of such collective .bargaining agreements terminate (determined without regard to any extension thereof after February 28, 1986), or (B) January 1, 1990.

(b) APPLICABILITY OF AMENDMENTS RELATING TO NORMAL RETIREMENT AGE.—The amendments made by section 9203 shall apply only

with respect to plan years beginning on or after January 1, 1988, ^;,..- and only with respect to service performed on or after such date. / i?' (c) PLAN AMENDMENTS.—If any amendment made by this subtitle requires an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after January 1, 1989, if— (1) during the period after such amendment takes effect and before such first plan year, the plan is operated in accordance with the requirements of such amendment, and (2) such plan amendment applies retroactively to the period after such amendment takes effect and such first plan year. A pension plan shall not be treated as failing to provide definitely determinable benefits or contributions, or to be operated in accordance with the provisions of the plan, merely because it operates in accordance with this subsection. Regulations. (d) INTERAGENCY COORDINATION.—The regulations and rulings issued by the Secretary of Labor, the regulations and rulings issued by the Secretary of the Treasury, and the regulations and rulings issued by the Equal Employment Opportunity Commission pursuant to the amendments made by this subtitle shall each be consistent with the others. The Secretary of Labor, the Secretary of the Treasury, and the Equal Employment Opportunity Commission r- ijryi'^ ^ shall each consult with the others to the extent necessary to meet the requirements of the preceding sentence. (e) FINAL REGULATIONS.—The Secretary of Labor, the Secretary of the Treasury, and the Equal Employment Opportunity Commission shall each issue before February 1, 1988, such final regulations as may be necessary to carry out the amendments made by this subtitle.

Subtitle D—Provisions Relating to Medicare TABLE OF CONTENTS PART 1—PROVISIONS RELATING TO MEDICARE PART A ONLY

Sec. 9301. Changes in inpatient hospital deductible. Sec. 9302. Applicable percentage increase in payments for inpatient hospital services. Sec. 9303. Payments for hospital capital-related costs. Sec. 9304. Coverage of hospitals in Puerto Rico under a DRG prospective payment system. Sec. 9305. Improving quality of care with respect to part A services. Sec. 9306. Payments to large rural hospitals serving a disproportionate share of low-income patients. Sec. 9307. Technical amendments and miscellaneous provisions relating to part A. PART 2—PROVISIONS RELATING TO PARTS A AND B

Sec. 9311. Periodic interim payment system (PIP) for DRG hospitals and prompt payment for medicare providers. Sec. 9312. Health maintenance organizations and competitive medical plans.

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 PUBLIC LAW 99-509—OCT. 21, 1986 Sec. Sec. Sec. Sec. Sec. Sec.

100 STAT. 1981

9313. 9314. 9315. 9316. 9317. 9318.

Provisions relating to improvement of quality of care. Direct costs of graduate medical education. Payments for home health services. Establishment of patient outcome assessment research program. Improvements in civil monetary penalty and exclusion provisions. Hospital protocols for organ procurement and standards for organ procurement agencies. Sec. 9319. Medicare as secondary payer; coverage requirements for certain other payers. Sec. 9320. Payment for services of certified registered nurse anesthetists. Sec. 9321. Technical amendments and miscellaneous provisions relating to parts A andB. PART 3—PROVISIONS RELATING TO MEDICARE PART B

Sec. Sec. Sec. Sec. Sec.

9331. 9332. 9333. 9334. 9335.

Sec. Sec. Sec. Sec. Sec. Sec. Sec. Sec. Sec.

9336. 9337. 9338. 9339. 9340. 9341. 9342. 9343. 9344.

Payment for physicians' services. ,:,•>. Incentives for physician participation. ^• Limits on reasonable charges. Payment for cataract surgical procedures. Payment rates for renal services and improvements in administration of end stage renal disease networks and program. Vision care. Occupational therapy services. Services of a physician assistant. Payment for clinical diagnostic laboratory tests. Payment for parenteral and enteral nutrition supplies and equipment. Changing medicare appeal rights. Alzheimer's disease demonstration projects. Payments for ambulatory surgery. Technical amendments and miscellaneous provisions relating to part B.

PART 4—IMPROVED REVIEW OF QUAUTY BY PEER REVIEW ORGANIZATIONS

Sec. 9351. PRO review of hospital denial notices. Sec. 9352. PRO review of inpatient hospital services and early readmission cases. Sec. 9353. PRO review of quality of care.

PART l—PROVISIONS RELATING TO MEDICARE PART A ONLY SEC. 9301. CHANGES IN INPATIENT HOSPITAL DEDUCTIBLE.

(a) IN GENERAL.—Section 1813(b) of the Social Security Act (42 U.S.C. 1395e(b)) is amended to read as follows: "(b)(1) The inpatient hospital deductible for 1987 shall be $520. The inpatient hospital deductible for any succeeding year shall be an amount equal to the inpatient hospital deductible for the precede ing calendar year, changed by the applicable percentage increase (as defined in section 1886(b)(3)(B)) which is applied under section Ante, p. 153. 1886(d)(3)(A) for discharges in the fiscal year that begins on Octo- Post, p. 1983. ber 1 of such preceding calendar year, and adjusted to reflect changes in real case mix (determined on the basis of the most recent case mix data available). Any amount determined under the preceding sentence which is not a multiple of $4 shall be rounded to the nearest multiple of $4 (or, if it is midway between two multiples of $4, to the next higher multiple of $4). "(2) The Secretary shall promulgate the inpatient hospital deductible and all coinsurance amounts under this section between September 1 and September 15 of the year preceding the year to which they will apply. ' ' "(3) The inpatient hospital deductible for a year shall apply to— "(A) the deduction under the first sentence of subsection (a)(D '* for the year in which the first day of inpatient hospital services occurs in a spell of illness, and

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