,,ii  #aagth ,,congress  #b;d ,session  
,s4 #djfj  ,,in ,,the ,,senate ,,of     
,,the ,,united ,,states  ,april #g1     
#bjbb,mr4 ,reed 7for himself1 ,mr4      
,whitehouse1 ,mrs4 ,feinstein1 and ,mr4 
,merkley7 introduced the following bill2
 which was read twice and referred to   
the ,committee on ,finance  ,a ,,bill   
,to amend the ,internal ,revenue ,code  
of #aihf to provide for inflation       
rebates1 and for other purposes4  #a4   
,short title ,this ,act may be cited as 
the ,food and ,fuel ,family ,savings    
,act4  #b4 ,inflation rebates to        
individuals  7a7 ,in general ,subchapter
 ,b of chapter #fe of the ,internal     
,revenue ,code of #aihf is amended by   
inserting after section #fdbh;,b the    
following new section3  #fdbh;,c4       
,inflation rebates to individuals  7a7  
,in general ,in the case of an eligible 
individual1 there shall be allowed as a 
credit against the tax imposed by       
subtitle ,a for the first taxable year  
beginning in #bjbb an amount equal to   

the inflation rebate amount determined  
for such taxable year4  7b7 ,inflation  
rebate amount ,for purposes of this     
section1 the term inflation rebate      
amount means1 with respect to any       
taxpayer for any taxable year1 the sum  
of-- 7#a7 #fjj 7#a1bjj in the case of a 
joint return71 plus  7#b7 #fjj          
multiplied by the number of dependents  
of the taxpayer for such taxable year4  
7c7 ,eligible individual ,for purposes  
of this section1 the term eligible      
individual means any individual other   
than-- 7#a7 any nonresident alien       
individual1  7#b7 any individual who is 
a dependent of another taxpayer for a   
taxable year beginning in the calendar  
year in which the individual's taxable  
year begins1 and  7#c7 an estate or     
trust4  7d7 ,limitation based on        
adjusted gross income  7#a7 ,in general 
,the amount of the credit allowed by    
subsection 7a7 7determined without      
regard to this subsection and subsection
 7f77 shall be reduced 7but not below   

zero7 by the amount which bears the same
 ratio to such credit 7as so determined7
 as-- 7,a7 the excess of-- 7i7 the      
taxpayer's adjusted gross income for    
such taxable year1 over  7ii7 #dj1jjj1  
bears to  7,b7 #e1jjj4  7#b7 ,special   
rules  7,a7 ,joint return or surviving  
spouse ,in the case of a joint return or
 a surviving spouse 7as defined in      
section #b7;a771 paragraph 7#a7 shall be
 applied by substituting #hj1jjj for    
#dj1jjj and #aj1jjj for #e1jjj4  7,b7   
,head of household ,in the case of a    
head of household 7as defined in section
 #b7;b771 paragraph 7#a7 shall be       
applied by substituting #fj1jjj for     
#dj1jjj and #g1ejj for #e1jjj4  7e7     
,definitions and special rules  7#a7    
,dependent defined ,for purposes of this
 section1 the term dependent has the    
meaning given such term by section #aeb4
  7#b7 ,identification number           
requirement  7,a7 ,in general ,in the   
case of a return other than a joint     
return1 the #fjj amount in subsection   

7b77#a7 shall be treated as being zero  
unless the taxpayer includes the valid  
identification number of the taxpayer on
 the return of tax for the taxable year4
  7,b7 ,joint returns ,in the case of a 
joint return1 the #a1bjj amount in      
subsection 7b77#a7 shall be treated as  
being-- 7i7 #fjj if the valid           
identification number of only #a spouse 
is included on the return of tax for the
 taxable year1 and  7ii7 zero if the    
valid identification number of neither  
spouse is so included4  7,c7 ,dependents
 ,a dependent shall not be taken into   
account under subsection 7b77#b7 unless 
the valid identification number of such 
dependent is included on the return of  
tax for the taxable year4  7,d7 ,valid  
identification number  7i7 ,in general  
,for purposes of this paragraph1 the    
term valid identification number means a
 social security number issued to an    
individual by the ,social ,security     
,administration on or before the due    
date for filing the return for the      

taxable year4  7ii7 ,adoption taxpayer  
identification number ,for purposes of  
subparagraph 7,c71 in the case of a     
dependent who is adopted or placed for  
adoption1 the term valid identification 
number shall include the adoption       
taxpayer identification number of such  
dependent4  7,e7 ,special rule for      
members of the ,armed ,forces           
,subparagraph 7,b7 shall not apply in   
the case where at least #a spouse was a 
member of the ,armed ,forces of the     
,united ,states at any time during the  
taxable year and the valid              
identification number of at least #a    
spouse is included on the return of tax 
for the taxable year4  7,f7             
,coordination with certain advance      
payments ,in the case of any payment    
determined pursuant to subsection       
7g77#f71 a valid identification number  
shall be treated for purposes of this   
paragraph as included on the taxpayer's 
return of tax if such valid             
identification number is available to   

the ,secretary as described in such     
subsection4  7,g7 ,mathematical or      
clerical error authority ,any omission  
of a correct valid identification number
 required under this paragraph shall be 
treated as a mathematical or clerical   
error for purposes of applying section  
#fbac7;g77#b7 to such omission4  7#c7   
,credit treated as refundable ,the      
credit allowed by subsection 7a7 shall  
be treated as allowed by subpart ,c of  
part ,,iv of subchapter ,a of chapter   
#a4  7f7 ,coordination with advance     
refunds of credit  7#a7 ,reduction of   
refundable credit ,the amount of the    
credit which would 7but for this        
paragraph7 be allowable under subsection
 7a7 shall be reduced 7but not below    
zero7 by the aggregate refunds and      
credits made or allowed to the taxpayer 
7or1 except as otherwise provided by the
 ,secretary1 any dependent of the       
taxpayer7 under subsection 7g74 ,any    
failure to so reduce the credit shall be
 treated as arising out of a            

mathematical or clerical error and      
assessed according to section           
#fbac7;b77#a74  7#b7 ,joint returns     
,except as otherwise provided by the    
,secretary1 in the case of a refund or  
credit made or allowed under subsection 
7g7 with respect to a joint return1 half
 of such refund or credit shall be      
treated as having been made or allowed  
to each individual filing such return4  
7#c7 ,coordination with possessions of  
the ,united ,states ,for purposes of    
this subsection1 payments made under    
subsection 7g7 include payments made by 
any jurisdiction other than the ,united 
,states under section #fdbh;,c7g7 of the
 income tax law of such jurisdiction1   
and payments made by possessions to     
which section #b7;b77#b7 of the ,food   
and ,fuel ,family ,savings ,act pursuant
 to a plan described in such section4   
,in carrying out this section1 the      
,secretary shall coordinate with each   
possession of the ,united ,states to    
prevent any application of this         

paragraph that is inconsistent with the 
purposes of this subsection4  7g7       
,advance refunds and credits  7#a7 ,in  
general ,subject to paragraphs 7#e7 and 
7#f71 each individual who was an        
eligible individual for such            
individual's first taxable year         
beginning in #bjbj shall be treated as  
having made a payment against the tax   
imposed by chapter #a for such taxable  
year in an amount equal to the advance  
refund amount for such taxable year4    
7#b7 ,advance refund amount  7,a7 ,in   
general ,for purposes of paragraph 7#a71
 the advance refund amount is the amount
 that would have been allowed as a      
credit under this section for such      
taxable year if this section 7other than
 subsection 7f7 and this subsection7 had
 applied to such taxable year4  7,b7    
,treatment of deceased individuals ,for 
purposes of determining the advance     
refund amount with respect to such      
taxable year-- 7i7 any individual who   
was deceased before ,january #a1 #bjbb1 

shall be treated for purposes of        
applying subsection 7e77#b7 in the same 
manner as if the valid identification   
number of such person was not included  
on the return of tax for such taxable   
year 7except that subparagraph 7,e7     
thereof shall not apply71  7ii7         
notwithstanding clause 7i71 in the case 
of a joint return with respect to which 
only #a spouse is deceased before       
,january #a1 #bjbb1 such deceased spouse
 was a member of the ,armed ,forces of  
the ,united ,states at any time during  
the taxable year1 and the valid         
identification number of such deceased  
spouse is included on the return of tax 
for the taxable year1 the valid         
identification number of #a 7and only   
#a7 spouse shall be treated as included 
on the return of tax for the taxable    
year for purposes of applying subsection
 7e77#b77;,b7 with respect to such joint
 return1 and  7iii7 no amount shall be  
determined under subsection 7e77#b7 with
 respect to any dependent of the        

taxpayer if the taxpayer 7both spouses  
in the case of a joint return7 was      
deceased before ,january #a1 #bjbb4     
7#c7 ,timing and manner of payments     
7,a7 ,timing  7i7 ,in general ,the      
,secretary shall1 subject to the        
provisions of this title1 refund or     
credit any overpayment attributable to  
this section as rapidly as possible4    
7ii7 ,deadline ,no refund or credit     
shall be made or allowed under this     
subsection after ,december #ca1 #bjbb4  
7,b7 ,manner  7i7 ,in general           
,notwithstanding any other provision of 
law 7including section #iac of the      
,electronic ,fund ,transfer ,act 7#ae   
,u4,s4,c4 #afick771 the ,secretary shall
 disburse refunds payable under this    
subsection by means of a                
,treasury-sponsored account 7as defined 
in section #bjh4b of title #ca1 ,code of
 ,federal ,regulations7 which is limited
 to uses at grocery stores and for      
gasoline4  7ii7 ,application to         
possessions ,in the case of a possession

 described in section #b7;b77#a7 of the 
,food and ,fuel ,family ,savings ,act1  
refunds payable under this subsection   
shall be disbursed in a manner          
determined by the ,secretary1 in        
consultation with the chief executive   
officer of such possession1 to be best  
suited to meet the purposes of this     
section and1 to the extent possible1    
subject to the same limitations         
applicable to refunds made under clause 
7i74  7#d7 ,no interest ,no interest    
shall be allowed on any overpayment     
attributable to this subsection4  7#e7  
,application to individuals who have    
filed a return of tax for #bjba  7,a7   
,application to #bjba returns filed at  
time of initial determination ,if1 at   
the time of any determination made      
pursuant to paragraph 7#c71 the         
individual referred to in paragraph 7#a7
 has filed a return of tax for the      
individual's first taxable year         
beginning in #bjba1 paragraph 7#a7 shall
 be applied with respect to such        

individual by substituting #bjba for    
#bjbj4  7,b7 ,additional payment  7i7   
,in general ,in the case of any         
individual who files1 before the        
additional payment determination date1 a
 return of tax for such individual's    
first taxable year beginning in #bjba1  
the ,secretary shall make a payment 7in 
addition to any payment made under      
paragraph 7#a77 to such individual equal
 to the excess 7if any7 of-- 7,i7 the   
amount which would be determined under  
paragraph 7#a7 7after the application of
 subparagraph 7,a77 by applying         
paragraph 7#a7 as of the additional     
payment determination date1 over  7,,ii7
 the amount of any payment made with    
respect to such individual under        
paragraph 7#a74  7ii7 ,additional       
payment determination date ,the term    
additional payment determination date   
means the earlier of-- 7,i7 the date    
which is #ij days after the #bjba       
calendar year filing deadline1 or       
7,,ii7 ,september #a1 #bjbb4  7iii7     

#bjba calendar year filing deadline ,the
 term #bjba calendar year filing        
deadline means the date specified in    
section #fjgb7;a7 with respect to       
returns for calendar year #bjba4  7#f7  
,application to certain individuals who 
have not filed a return of tax for #bjbj
 or #bjba at time of determination ,in  
the case of any individual who1 at the  
time of any determination made pursuant 
to paragraph 7#c71 has filed a tax      
return for neither the year described in
 paragraph 7#a7 nor for the year        
described in paragraph 7#e77;,a71 the   
,secretary shall1 consistent with rules 
similar to the rules of section         
#fdbh;,a7f77#e71 apply paragraph 7#a7 on
 the basis of information available to  
the ,secretary and shall1 on the basis  
of such information1 determine the      
advance refund amount with respect to   
such individual without regard to       
subsection 7d7 unless the ,secretary has
 reason to know that such amount would  
otherwise be reduced by reason of such  

subsection4  7#g7 ,special rule related 
to time of filing return ,solely for    
purposes of this subsection1 a return of
 tax shall not be treated as filed until
 such return has been processed by the  
,internal ,revenue ,service4  7h7       
,regulations ,the ,secretary shall      
prescribe such regulations or other     
guidance as may be necessary or         
appropriate to carry out the purposes of
 this section1 including-- 7#a7         
regulations or other guidance providing 
taxpayers the opportunity to provide the
 ,secretary information sufficient to   
allow the ,secretary to make payments to
 such taxpayers under subsection 7g7    
7including the determination of the     
amount of such payment7 if such         
information is not otherwise available  
to the ,secretary1 and  7#b7 regulations
 or other guidance to ensure to the     
maximum extent administratively         
practicable that1 in determining the    
amount of any credit under subsection   
7a7 and any credit or refund under      

subsection 7g71 an individual is not    
taken into account more than once1      
including by different taxpayers and    
including by reason of a change in joint
 return status or dependent status      
between the taxable year for which an   
advance refund amount is determined and 
the taxable year for which a credit     
under subsection 7a7 is determined4  7i7
 ,outreach ,the ,secretary shall carry  
out a robust and comprehensive outreach 
program to ensure that all taxpayers    
described in subsection 7h77#a7 learn of
 their eligibility for the advance      
refunds and credits under subsection    
7g72 are advised of the opportunity to  
receive such advance refunds and credits
 as provided under subsection 7h77#a72  
and are provided assistance in applying 
for such advance refunds and credits4  4
  7b7 ,treatment of certain possessions 
7#a7 ,payments to possessions with      
mirror code tax systems ,the ,secretary 
of the ,treasury shall pay to each      
possession of the ,united ,states which 

has a mirror code tax system amounts    
equal to the loss 7if any7 to that      
possession by reason of the amendments  
made by this section4 ,such amounts     
shall be determined by the ,secretary of
 the ,treasury based on information     
provided by the government of the       
respective possession4  7#b7 ,payments  
to other possessions ,the ,secretary of 
the ,treasury shall pay to each         
possession of the ,united ,states which 
does not have a mirror code tax system  
amounts estimated by the ,secretary of  
the ,treasury as being equal to the     
aggregate benefits 7if any7 that would  
have been provided to residents of such 
possession by reason of the amendments  
made by this section if a mirror code   
tax system had been in effect in such   
possession4 ,the preceding sentence     
shall not apply unless the respective   
possession has a plan1 which has been   
approved by the ,secretary of the       
,treasury1 under which such possession  
will promptly distribute such payments  

to its residents4  7#c7 ,inclusion of   
administrative expenses ,the ,secretary 
of the ,treasury shall pay to each      
possession of the ,united ,states to    
which the ,secretary makes a payment    
under paragraph 7#a7 or 7#b7 an amount  
equal to the lesser of-- 7,a7 the       
increase 7if any7 of the administrative 
expenses of such possession-- 7i7 in the
 case of a possession described in      
paragraph 7#a71 by reason of the        
amendments made by this section1 and    
7ii7 in the case of a possession        
described in paragraph 7#b71 by reason  
of carrying out the plan described in   
such paragraph1 or  7,b7 #ejj1jjj       
7#aj1jjj1jjj in the case of ,puerto     
,rico74  ,the amount described in       
subparagraph 7,a7 shall be determined by
 the ,secretary of the ,treasury based  
on information provided by the          
government of the respective possession4
  7#d7 ,coordination with credit allowed
 against united states income taxes ,no 
credit shall be allowed against ,united 

,states income taxes under section      
#fdbh;,c of the ,internal ,revenue ,code
 of #aihf 7as added by this section71   
nor shall any credit or refund be made  
or allowed under subsection 7g7 of such 
section1 to any person-- 7,a7 to whom a 
credit is allowed against taxes imposed 
by the possession by reason of the      
amendments made by this section1 or     
7,b7 who is eligible for a payment under
 a plan described in paragraph 7#b74    
7#e7 ,mirror code tax system ,for       
purposes of this subsection1 the term   
mirror code tax system means1 with      
respect to any possession of the ,united
 ,states1 the income tax system of such 
possession if the income tax liability  
of the residents of such possession     
under such system is determined by      
reference to the income tax laws of the 
,united ,states as if such possession   
were the ,united ,states4  7#f7         
,treatment of payments ,for purposes of 
section #acbd of title #ca1 ,united     
,states ,code1 the payments under this  

subsection shall be treated in the same 
manner as a refund due from a credit    
provision referred to in subsection     
7b77#b7 of such section4  7c7           
,administrative provisions  7#a7        
,definition of deficiency ,section      
#fbaa7;b77#d77;,a7 of the ,internal     
,revenue ,code of #aihf is amended by   
inserting #fdbh;,c1 after #fdbh;,b14    
7#b7 ,exception from reduction or offset
 ,any refund payable by reason of       
section #fdbh;,c7g7 of the ,internal    
,revenue ,code of #aihf 7as added by    
this section71 or any such refund       
payable by reason of subsection 7b7 of  
this section1 shall not be-- 7,a7       
subject to reduction or offset pursuant 
to subsection 7c71 7d71 7e71 or 7f7 of  
section #fdjb of the ,internal ,revenue 
,code of #aihf or any similar authority 
permitting offset1 or  7,b7 reduced or  
offset by other assessed ,federal taxes 
that would otherwise be subject to levy 
or collection4  7#c7 ,conforming        
amendments  7,a7 ,paragraph 7#b7 of     

section #acbd7;b7 of title #ca1 ,united 
,states ,code1 is amended by inserting  
#fdbh;,c1 after #fdbh;,b14  7,b7 ,the   
table of sections for subchapter ,b of  
chapter #fe of the ,internal ,revenue   
,code of #aihf is amended by inserting  
after the item relating to section      
#fdbh;,b the following new item3  ,sec4 
#fdbh;,c4 ,inflation rebates to         
individuals4  4  7d7 ,other provisions  
7#a7 ,exception from reduction or offset
  7,a7 ,in general ,the right of any    
person to any applicable payment under  
this section shall not be transferable  
or assignable1 at law or in equity1 and 
no applicable payment shall be subject  
to1 execution1 levy1 attachment1        
garnishment1 or other legal process1 or 
the operation of any bankruptcy or      
insolvency law4  7,b7 ,applicable       
payment ,for purposes of this           
subsection1 the term applicable         
paymentmeans-- 7i7 any advance refund   
amount paid pursuant to section         
#fdbh;,c7g7 of ,internal ,revenue ,code 

of #aihf 7as added by this section71    
7ii7 any payment made by a possession of
 the ,united ,states with a mirror code 
tax system 7as defined in subsection 7b7
 of this section7 pursuant to such      
subsection which corresponds to a       
payment described in clause 7i71 and    
7iii7 any payment made by a possession  
of the ,united ,states without a mirror 
code tax system 7as so defined7 pursuant
 to subsection 7b7 of this section4     
7#b7 ,agency information sharing and    
assistance  7,a7 ,in general ,the       
,commissioner of ,social ,security1 the 
,railroad ,retirement ,board1 and the   
,secretary of ,veterans ,affairs shall  
each provide the ,secretary of the      
,treasury 7or the ,secretary's delegate7
 such information and assistance as the 
,secretary of the ,treasury 7or the     
,secretary's delegate7 may require for  
purposes of-- 7i7 making payments under 
section #fdbh;,c7g7 of the ,internal    
,revenue ,code of #aihf to individuals  
described in section                    

#fdbh;,a7f77#e77;,a7 thereof1 or  7ii7  
providing administrative assistance to a
 possession of the ,united ,states to   
allow such possession to promptly       
distribute payments under subsection 7b7
 to its residents4  7,b7 ,exchange of   
information with possessions ,any       
information provided to the ,secretary  
of the ,treasury 7or the ,secretary's   
delegate7 pursuant to subparagraph may  
be exchanged with a possession of the   
,united ,states in accordance with the  
applicable tax coordination agreement   
for information exchange and            
administrative assistance that the      
,internal ,revenue ,service has agreed  
to with such possession4  7e7           
,appropriations  7#a7 ,in general       
,immediately upon the enactment of this 
,act1 in addition to amounts otherwise  
available1 there are appropriated for   
fiscal year #bjbb1 out of any money in  
the ,treasury not otherwise             
appropriated3 7,a7 #a1dfd1ejj1jjj to    
remain available until ,september #cj1  

#bjbd for necessary expenses for the    
,internal ,revenue ,service for the     
administration of the advance payments1 
the provision of taxpayer assistance1   
and the furtherance of integrated1      
modernized1 and secure ,internal        
,revenue ,service systems1 of which up  
to #bj1jjj1jjj is available for premium 
pay for services related to the         
development of information technology as
 determined by the ,commissioner of the 
,internal ,revenue occurring between    
,january #a1 #bjbb and ,december #ca1   
#bjbc1 and all of which shall supplement
 and not supplant any other             
appropriations that may be available for
 this purpose4  7,b7 #g1jjj1jjj to      
remain available without fiscal year    
limitation1 for necessary expenses for  
the ,bureau of the ,fiscal ,service to  
carry out this section 7and the         
amendments made by this section71 which 
shall supplement and not supplant any   
other appropriations that may be        
available for this purpose1 and  7,c7   

#h1jjj1jjj to remain available until    
,september #cj1 #bjbd1 for the ,treasury
 ,inspector ,general for ,tax           
,administration for the purposes of     
overseeing activities related to the    
administration of this section 7and the 
amendments made by this section71 which 
shall supplement and not supplant any   
other appropriations that may be        
available for this purpose4  7#b7       
,social security administration ,for an 
additional amount for ,social ,security 
,administration-- ,limitation on        
,administrative ,expenses1 #ch1jjj1jjj1 
to remain available until ,september    
#cj1 #bjbc4  7#c7 ,railroad retirement  
board ,for an additional amount for     
8,railroad ,retirement                  
,board--,limitation on ,administration01
 #h1cjj1 to remain available until      
,september #cj1 #bjbc4  #c4 ,surcharge  
on high income individuals1 estates1 and
 trusts  7a7 ,in general ,part ,i of    
subchapter ,a of chapter #a of the      
,internal ,revenue ,code of #aihf is    

amended by inserting after section #a   
the following new section3  #a;,a4      
,surcharge on high income individuals1  
estates1 and trusts  7a7 ,general rule  
,in the case of a taxpayer other than a 
corporation1 there is hereby imposed 7in
 addition to any other tax imposed by   
this subtitle7 a tax equal to the sum   
of-- 7#a7 #e percent of so much of the  
modified adjusted gross income of the   
taxpayer as exceeds-- 7,a7 #aj1jjj1jjj1 
in the case of any taxpayer not         
described in subparagraph 7,b7 or 7,c71 
7,b7 #e1jjj1jjj1 in the case of a       
married individual filing a separate    
return1 and  7,c7 #bjj1jjj1 in the case 
of an estate or trust1 plus  7#b7 #c    
percent of so much of the modified      
adjusted gross income of the taxpayer as
 exceeds-- 7,a7 #be1jjj1jjj1 in the case
 of any taxpayer not described in       
subparagraph 7,b7 or 7,c71  7,b7        
#ab1ejj1jjj1 in the case of a married   
individual filing a separate return1 and
  7,c7 #ejj1jjj1 in the case of an      

estate or trust4  7b7 ,modified adjusted
 gross income ,for purposes of this     
section1 the term modified adjusted     
gross income means adjusted gross income
 reduced by any deduction 7not taken    
into account in determining adjusted    
gross income7 allowed for investment    
interest 7as defined in section         
#afc7;d77 or business interest 7as      
defined in section #afc7;j774 ,in the   
case of an estate or trust1 adjusted    
gross income shall be determined as     
provided in section #fg7;e71 and reduced
 by the amount allowed as a deduction   
under section #fdb7;c74  7c7 ,special   
rules  7#a7 ,nonresident aliens and     
foreign trusts ,in the case of a        
nonresident alien individual 7other than
 an individual described in section     
#hgf7;a7 or #hgg7;a77 or a foreign      
trust1 only amounts taken into account  
in connection with the tax imposed under
 section #hga7;b7 shall be taken into   
account under this section4  7#b7       
,citizens and residents living abroad   

and certain bona fide residents of      
possessions ,each dollar amount which is
 applicable to any taxpayer under       
subsection 7a7 shall be decreased 7but  
not below zero7 by the excess 7if any7  
of-- 7,a7 the sum of-- 7i7 amounts      
excluded from the taxpayer's gross      
income under section #iaa1  7ii7 amounts
 excluded from the taxpayer's gross     
income under section #ica1 and  7iii7   
amounts excluded from the taxpayer's    
gross income under section #icc1 over   
7,b7 the sum of-- 7i7 amounts of any    
deductions or exclusions disallowed     
under section #iaa7;d77#f7 with respect 
to the amounts described in subparagraph
 7,a77i71  7ii7 amounts of any          
deductions or exclusions disallowed     
under section #ica7;b7 with respect to  
the amounts described in subparagraph   
7,a77ii71 and  7iii7 amounts of any     
deductions or exclusions disallowed     
under section #icc with respect to the  
amounts described in subparagraph       
7,a77iii74  7#c7 ,certain trusts        

,subsection 7a7 shall not apply to--    
7,a7 a trust all the unexpired interests
 in which are devoted to one or more of 
the purposes described in section       
#agj7;c77#b77;,b71  7,b7 an electing    
settlement trust 7as defined in section 
#fdf7;h771 or  7,c7 a cemetery perpetual
 care fund described in section         
#fdb7;i74  7#d7 ,not treated as tax     
imposed by this chapter for certain     
purposes ,the tax imposed under this    
section shall not be treated as tax     
imposed by this chapter for purposes of 
determining the amount of any credit    
under this chapter 7other than sections 
#bg and #ija74  7#e7 ,electing small    
business trusts ,for purposes of the    
determination of adjusted gross income1 
section #fda7;c77#a77;,a7 shall not     
apply and all portions of any electing  
small business trust shall be treated as
 a single trust4  7d7 ,regulations ,the 
,secretary shall issue such regulations 
or other guidance as may be necessary or
 appropriate to carry out the purposes  

of this section1 including regulations  
or other guidance to prevent the        
avoidance of the purposes of this       
section4  4  7b7 ,coordination with     
certain provisions  7#a7 ,interest on   
certain deferred tax liability ,section 
#dec;,a7c7 of the ,internal ,revenue    
,code of #aihf is amended by            
redesignating paragraph 7#f7 as         
paragraph 7#g7 and by inserting after   
paragraph 7#e7 the following new        
paragraph3  7#f7 ,surcharge on high     
income individuals taken into account in
 determining maximum rate of tax ,for   
purposes of paragraph 7#c77;,b71 the    
maximum rate of tax in effect under     
section #a shall be treated as being    
equal to the sum of such rate and the   
rates in effect under paragraphs 7#a7   
and 7#b7 of section #a;,a7a74  4  7#b7  
,alien residents of ,puerto ,rico1      
,guam1 ,american ,samoa1 or the         
,northern ,mariana ,islands ,section    
#hgf7;a7 of such ,code is amended by    
striking section #a and inserting       

sections #a and #a;,a4  7#c7            
,expatriation to avoid tax ,section     
#hgg7;b7 of such ,code is amended by    
inserting and section #a;,a after       
section #a or #ee4  7#d7 ,limitation on 
foreign tax credit ,section             
#ijd7;b77#c77;,e7 of such ,code is      
amended-- 7,a7 in clause 7i77,i71 by    
inserting increased by the sum of the   
rates set forth in paragraphs 7#a7 and  
7#b7 of section #a;,a7a7 after          
7whichever applies71  7,b7 in clause    
7i77,,ii7 by inserting increased by the 
sum of the rates set forth in paragraphs
 7#a7 and 7#b7 of section #a;,a7a7 after
 section #a7;h71 and  7,c7 in clause    
7ii71 by striking referred to in and    
inserting determined under4  7#e7       
,election by individuals to be subject  
to tax at corporate rates ,section      
#ifb7;a77#a7 of such ,code is amended by
 inserting 1 #a;,a1 after sections #a4  
7#f7 ,interest on certain tax deferral  
,section #abia7;c77#b7 of such ,code is 
amended by adding at the end the        

following3 ,for purposes of the         
preceding sentence1 the highest rate of 
tax in effect under section #a shall be 
treated as being equal to the sum of    
such rate and the rates in effect under 
paragraphs 7#a7 and 7#b7 of section     
#a;,a7a744  7#g7 ,averaging of farm     
income ,section #acja7;a7 of such ,code 
is amended by striking section #a both  
places it appears and inserting sections
 #a and #a;,a4  7#h7 ,title #aa cases   
,section #acih7;c77#b7 of such ,code is 
amended by inserting and tax shall be   
imposed under section #a;,a by treating 
the estate as a married individual      
filing a separate return before the     
period at the end4  7#i7 ,withholding of
 tax on foreign partners' share of      
effectively connected income ,section   
#addf7;b77#b7 of such ,code is amended  
by adding at the end the following flush
 sentence3 ,for purposes of subparagraph
 7,a71 the highest rate of tax in effect
 under section #a shall be treated as   
being equal to the sum of such rate and 

the rates in effect under paragraphs    
7#a7 and 7#b7 of section #a;,a7a74 4    
7#aj7 ,relief from joint and several    
liability on joint return ,section      
#fjae7;d77#b77;,b7 of such ,code is     
amended by inserting 1 #a;,a1 after     
section #a4  7#aa7 ,partnership         
adjustments  7,a7 ,section #fbbe7;b77#a7
 of such ,code is amended by adding at  
the end the following flush sentence3   
,for purposes of subparagraph 7,b71 the 
highest rate of tax in effect under     
section #a shall be treated as being    
equal to the sum of such rate and the   
rates in effect under paragraphs 7#a7   
and 7#b7 of section #a;,a7a74 4  7,b7   
,section #fbbe7;c77#d77;,a7 of such     
,code is amended-- 7i7 by striking      
subsection 7b77#a77;,a7 and inserting   
subsection 7b77#a77;,b71 and  7ii7 by   
striking or at the end of clause 7i71 by
 adding or at the end of clause 7ii71   
and by inserting after clause 7ii7 the  
following new clause3  7iii7 is not an  
individual subject to one or both of the

 rates of tax in effect under paragraphs
 7#a7 and 7#b7 of section #a;,a7a71  4  
7#ab7 ,required payments for entities   
electing not to have required taxable   
year ,section #geai7;b7 of such ,code is
 amended by inserting and increased by  
the sum of the rates in effect under    
paragraphs 7#a7 and 7#b7 of section     
#a;,a7a7 before the period at the end4  
7c7 ,clerical amendment ,the table of   
sections for part ,i of subchapter ,a of
 chapter #a of such ,code is amended by 
inserting after the item relating to    
section #a the following new item3      
,sec4 #a;,a4 ,surcharge on high income  
individuals4  4  7d7 ,effective date    
,the amendments made by this section    
shall apply to taxable years beginning  
after ,december #ca1 #bjba4  #d4        
,modification of corporate tax rate  7a7
 ,in general ,section #aa7;b7 of the    
,internal ,revenue ,code of #aihf is    
amended to read as follows3  7b7 ,amount
 of tax  7#a7 ,in general ,the amount of
 the tax imposed by subsection 7a7 shall

 be the sum of-- 7,a7 #ah percent of so 
much of the taxable income as does not  
exceed #djj1jjj1  7,b7 #ba percent of so
 much of the taxable income as exceeds  
#djj1jjj but does not exceed #e1jjj1jjj1
 and  7,c7 #bf4e percent of so much of  
the taxable income as exceeds           
#e1jjj1jjj4  ,in the case of a          
corporation which has taxable income in 
excess of #aj1jjj1jjj for any taxable   
year1 the amount of tax determined under
 the preceding sentence for such taxable
 year shall be increased by the lesser  
of 7i7 #c percent of such excess1 or    
7ii7 #bhg1jjj4  7#b7 ,certain personal  
service corporation not eligible for    
graduated rates ,notwithstanding        
paragraph 7#a71 the amount of the tax   
imposed by subsection 7a7 on the taxable
 income of a qualified personal service 
corporation 7as defined in section      
#ddh7;d77#b77 shall be equal to #bf4e   
percent of the taxable income4  4  7b7  
,conforming amendments  7#a7 ,section   
#aefa of the ,internal ,revenue ,code of

 #aihf is amended to read as follows3   
#aefa4 ,limitation on certain multiple  
tax benefits in the case of certain     
controlled corporations  7a7 ,in general
 ,the component members of a controlled 
group of corporations on a ,december #ca
 shall1 for their taxable years which   
include such ,december #ca1 be limited  
for purposes of this subtitle to-- 7#a7 
amounts in each taxable income bracket  
in the subparagraphs of section         
#aa7;b77#a7 which do not aggregate more 
than the maximum amount in each such    
bracket to which a corporation which is 
not a component member of a controlled  
group is entitled1 and  7#b7 one        
#bej1jjj 7#aej1jjj if any component     
member is a corporation described in    
section #ece7;c77#b77;,b77 amount for   
purposes of computing the accumulated   
earnings credit under section           
#ece7;c77#b7 and 7#c74  ,the amounts    
specified in paragraph 7#a7 shall be    
divided equally among the component     
members of such group on such ,december 

#ca unless all of such component members
 consent 7at such time and in such      
manner as the ,secretary shall by       
regulations prescribe7 to an            
apportionment plan providing for an     
unequal allocation of such amounts4 ,the
 amounts specified in paragraph 7#b7    
shall be divided equally among the      
component members of such group on such 
,december #ca unless the ,secretary     
prescribes regulations permitting an    
unequal allocation of such amounts4     
,notwithstanding paragraph 7#a71 in     
applying the last sentence of section   
#aa7;b77#a7 to such component members1  
the taxable income of all such component
 members shall be taken into account and
 any increase in tax under such last    
sentence shall be divided among such    
component members in the same manner as 
amounts under paragraph 7#a74  7b7      
,certain short taxable years ,if a      
corporation has a short taxable year    
which does not include a ,december #ca  
and is a component member of a          

controlled group of corporations with   
respect to such taxable year1 then for  
purposes of this subtitle-- 7#a7 the    
amount in each taxable income bracket in
 the tax table in section #aa7;b7 of    
such corporation for such taxable year1 
and  7#b7 the amount to be used in      
computing the accumulated earnings      
credit under section #ece7;c77#b7 and   
7#c7 of such corporation for such       
taxable year1  shall be the amount      
specified in subsection 7a77#a7 or 7#b71
 as the case may be1 divided by the     
number of corporations which are        
component members of such group on the  
last day of such taxable year4 ,for     
purposes of the preceding sentence1     
section #aefc7;b7 shall be applied as if
 such last day were substituted for     
,december #ca4  4  7#b7 ,the table of   
sections for part ,,ii of subchapter ,b 
of chapter #f of such ,code is amended  
by striking the item relating to section
 #aefa and inserting the following3     
,sec4 #aefa4 ,limitation on certain     

multiple tax benefits in the case of    
certain controlled corporations4  4  7c7
 ,effective date ,the amendments made by
 this section shall apply to taxable    
years beginning after ,december #ca1    
#bjba4  7d7 ,normalization requirements 
7#a7 ,in general ,a normalization method
 of accounting shall not be treated as  
being used with respect to any public   
utility property for purposes of section
 #afg or #afh of the ,internal ,revenue 
,code of #aihf if the taxpayer1 in      
computing its cost of service for       
ratemaking purposes and reflecting      
operating results in its regulated books
 of account1 reduces the tax reserve    
deficit less rapidly or to a lesser     
extent than such reserve would be       
reduced under the average rate          
assumption method4  7#b7 ,alternative   
,method for ,certain ,taxpayers ,if1 as 
of the first day of the taxable year    
that includes the date of enactment of  
this ,act-- 7,a7 the taxpayer was       
required by a regulatory agency to      

compute depreciation for public utility 
property on the basis of an average life
 or composite rate method1 and  7,b7 the
 taxpayer's books and underlying records
 did not contain the vintage account    
data necessary to apply the average rate
 assumption method1  the taxpayer will  
be treated as using a normalization     
method of accounting if1 with respect to
 such jurisdiction1 the taxpayer uses   
the alternative method for public       
utility property that is subject to the 
regulatory authority of that            
jurisdiction4  7#c7 ,definitions ,for   
purposes of this subsection-- 7,a7 ,tax 
reserve deficit ,the term tax reserve   
deficit means the excess of-- 7i7 the   
amount which would be the balance in the
 reserve for deferred taxes 7as         
described in section                    
#afh7;i77#i77;,a77ii7 of the ,internal  
,revenue ,code of #aihf1 or section     
#afg7l77#c77;,g77ii7 or                 
#afh7c77c77;,b77ii7 of such ,code as in 
effect on the day before the date of the

 enactment of the ,tax ,reform ,act of  
#aihf7 if the amount of such reserve    
were determined by assuming that the    
corporate rate increases provided in the
 amendments made by this section were in
 effect for all prior periods1 over     
7ii7 the balance in such reserve as of  
the day before such corporate rate      
increases take effect4  7,b7 ,average   
rate assumption method ,the average rate
 assumption method is the method under  
which the tax reserve deficit is reduced
 over the remaining lives of the        
property as used in its regulated books 
of account which gave rise to the       
reserve for deferred taxes4 ,under such 
method1 if timing differences for the   
property reverse1 the amount of the     
adjustment to the reserve for the       
deferred taxes is calculated by         
multiplying-- 7i7 the ratio of the      
aggregate deferred taxes for the        
property to the aggregate timing        
differences for the property as of the  
beginning of the period in question1 by 

7ii7 the amount of the timing           
differences which reverse during such   
period4  7,c7 ,alternative method ,the  
alternative method is the method in     
which the taxpayer-- 7i7 computes the   
tax reserve deficit on all public       
utility property included in the plant  
account on the basis of the weighted    
average life or composite rate used to  
compute depreciation for regulatory     
purposes1 and  7ii7 reduces the tax     
reserve deficit ratably over the        
remaining regulatory life of the        
property4  7#d7 ,treatment of           
normalization violation ,if1 for any    
taxable year ending after the date of   
the enactment of this ,act1 the taxpayer
 does not use a normalization method of 
accounting for the corporate rate       
increases provided in the amendments    
made by this section 1 such taxpayer    
shall not be treated as using a         
normalization method of accounting for  
purposes of subsections 7f77#b7 and     
7i77#i77;,c7 of section #afh of the     

,internal ,revenue ,code of #aihf4  7#e7
 ,regulations ,the ,secretary of the    
,treasury1 or the ,secretary's designee1
 shall issue such regulations or other  
guidance as may be necessary or         
appropriate to carry out the purposes of
 this subsection1 including regulations 
or other guidance to provide appropriate
 coordination between this subsection1  
section #acjja7;d7 of ,public ,law      
#aae-ig1 and section #bjc7;e7 of the    
,tax ,reform ,act of #aihf4