102d CONGRESS
2d Session
H. R. 5260
AMENDMENT
HR 5260 EAS
In the Senate of the United States,
June 19 (legislative day, June 16), 1992.
Resolved, That the bill from the House of Representatives (H.R. 5260)
entitled `An Act to extend the emergency unemployment compensation program,
to revise the trigger provisions contained in the extended unemployment
compensation program, and for other purposes', do pass with the following
AMENDMENT:
Strike out all after the enacting clause and insert:

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This Act may be cited as the `Unemployment Compensation Amendments of 1992'.

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(a) GENERAL RULE- Sections 102(f)(1) and 106(a)(2) of the Emergency
Unemployment Compensation Act of 1991 (Public Law 102-164, as amended)
are each amended by striking `July 4, 1992' and inserting `March 6, 1993'.
(b) WEEKS OF BENEFITS AVAILABLE DURING EXTENSION- Subparagraph (A) of
section 102(b)(2) of such Act is amended by striking clause (ii) and the
flush paragraph at the end thereof and inserting the following:
`(ii) REDUCTION FOR WEEKS IN 7-PERCENT PERIOD- In the case of weeks
beginning in a 7-percent period--
`(I) clause (i) of this subparagraph shall be applied by substituting `15'
for `33', and by substituting `10' for `26', and
`(II) subparagraph (A) of paragraph (1) shall be applied by substituting
`60 percent' for `130 percent'.
`(iii) REDUCTION FOR WEEKS IN 6.8-PERCENT PERIOD- In the case of weeks
beginning in a 6.8-percent period--
`(I) clause (ii) of this subparagraph shall not apply,
`(II) clause (i) of this subparagraph shall be applied by substituting
`13' for `33', and by substituting `7' for `26', and
`(III) subparagraph (A) of paragraph (1) shall be applied by substituting
`50 percent' for `130 percent'.
`(iv) 7-PERCENT PERIOD; 6.8-PERCENT PERIOD- For purposes of this
subparagraph--
`(I) A 7-percent period means a period which begins with the second week
after the first week for which the requirements of subclause (II) are met
and a 6.8 percent period means a period which begins with the second week
after the first week for which the requirements of subclause (III) are met.
`(II) The requirements of this subclause are met for any week if the average
rate of total unemployment (seasonally adjusted) for all States for the
period consisting of the most recent 2-calendar month period (for which
data are published before the close of such week) is at least 6.8 percent,
but less than 7 percent.
`(III) The requirements of this subclause are met for any week if the
average rate of total unemployment (seasonally adjusted) for all States for
the period consisting of the most recent 2-calendar month period (for which
data are published before the close of such week) is less than 6.8 percent.
In no event shall a 7-percent period occur after a 6.8-percent period occurs
and a 6.8-percent period, once begun, shall continue in effect for all weeks
for which benefits are provided under this Act.
`(v) LIMITATIONS ON REDUCTIONS- In the case of an individual who is receiving
emergency unemployment compensation for the week which immediately precedes
the first week for which a reduction applies under clause (ii) or (iii) of
this subparagraph, such reduction shall not apply to such individual for the
first week of such reduction or any week thereafter in a period of weeks for
each of which the individual meets the eligibility requirements of this Act.'
(c) MODIFICATION TO FINAL PHASE-OUT- Paragraph (2) of section 102(f)
of such Act is amended to read as follows:
`(2) TRANSITION- In the case of an individual who is receiving emergency
unemployment compensation for a week which includes March 6, 1993, emergency
unemployment compensation shall continue to be payable to such individual
for any week thereafter from the account from which he received compensation
for the week which includes such termination date. No compensation shall
be payable by reason of the preceding sentence for any week beginning
after June 19, 1993.'
(d) CONFORMING AMENDMENT-
(1) Subparagraph (B) of section 102(b)(2) of such Act is amended by striking
`subparagraph (A)(ii)' and inserting `clauses (ii) and (iii) of subparagraph
(A)'.
(2) Section 101(e) of such Act is amended--
(A) by striking `Notwithstanding' and inserting `(1) ELECTION BY STATES-
Notwithstanding',
(B) by adding at the end thereof the following new paragraph:
`(2) WEEKS OF BENEFITS DURING PHASE-OUT- Notwithstanding subsection (b)(1)(B)
or any other provision of law, if for any week beginning after March 6,
1993, an extended benefit period is triggered on with respect to a State,
individuals claiming benefits in such State for such week and any following
week shall be eligible to receive compensation under this Act or extended
compensation benefits under State law, whichever is greater.', and
(C) by striking the heading and inserting `ELECTION BY STATES; WEEKS OF
BENEFITS DURING PHASE-OUT'.
(e) EFFECTIVE DATE- The amendments made by this section apply to weeks of
unemployment beginning after March 6, 1993.

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TITLE I

-EXTENSION OF EMERGENCY UNEMPLOYMENT COMPENSATION PROGRAM

(a) INDIVIDUAL NOT INELIGIBLE BY REASON OF SUBSEQUENT ENTITLEMENT TO
REGULAR BENEFITS- Section 101 of the Emergency Unemployment Compensation
Act of 1991 (Public Law 102-164, as amended) is amended by adding at the
end thereof the following new subsection:
`(f) CERTAIN RIGHTS TO REGULAR COMPENSATION DISREGARDED- If an individual
exhausted his rights to regular compensation for any benefit year, such
individual's eligibility to receive emergency unemployment compensation
under this Act in respect of such benefit year shall be determined without
regard to any rights to regular compensation for a subsequent benefit year
if such individual does not file a claim for regular compensation for such
subsequent benefit year.'
(b) EFFECTIVE DATE- The amendments made by this section shall apply to
weeks of unemployment beginning after the date of the enactment of this Act.

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Section 104 of the Emergency Unemployment Compensation Act of 1991
(Public Law 102-164, as amended) is amended by adding at the end thereof
the following new subsection:
`(e) AUTHORIZATION OF APPROPRIATIONS FOR EXTENSION OF PROGRAM-
Notwithstanding any other provision of law, the Secretary of the Treasury
shall transfer from the general fund of the Treasury (from funds not
otherwise appropriated), to the extended unemployment compensation account
(as established by section 905 of the Social Security Act) such sums as
are necessary to make payments to States under this Act by reason of the
amendments made by sections 101 and 102 of the Unemployment Compensation
Amendments of 1992. Amounts appropriated pursuant to the preceding sentence
shall not be required to be repaid.'

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(a) EXTENSION OF PROGRAM-
(1) IN GENERAL- Sections 501(b)(1) and (2) of the Emergency Unemployment
Compensation Act of 1991 (Public Law 102-164, as amended) are each amended
by striking `July 4, 1992', and inserting `March 6, 1993'.
(2) CONFORMING AMENDMENTS- Section 501 of such Act is amended--
(A) in subsection (a), by striking `July 1992' and inserting `March
1993'; and
(B) in subsection (d)(2)--
(i) by striking the first sentence and inserting the following new sentence:
`Effective on and after the date on which a reduction in benefits is imposed
under section 102(b)(2)(A)(ii), subparagraphs (B) and (C) of paragraph
(1) of this subsection shall not apply and subparagraph (A) of paragraph
(1) shall be applied by substituting `50' for `130', and effective on
and after the date on which a reduction in benefits is imposed under
section 102(b)(2)(A)(iii), subparagraphs (B) and (C) of paragraph (1)
of this subsection shall not apply and subparagraph (A) of paragraph (1)
shall be applied by substituting `35' for `130'.'; and
(ii) by striking `ending June 13, 1992' and all that follows through
`apply' and inserting : `which precedes a period for which a reduction
under the preceding sentence takes effect, such reduction shall not apply'.
(b) TERMINATION OF BENEFITS- Section 501(b)(2) of the Emergency Unemployment
Compensation Act of 1991 (Public Law 102-164, as amended) is amended by
adding at the end the following: `In the case of an individual who is
receiving extended benefits by reason of this section on March 6, 1993,
such benefits shall not continue to be payable to such individual after
June 19, 1993.'

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(a) TRADE ADJUSTMENT ASSISTANCE- Paragraph (2) of section 231(a) of the
Trade Act of 1974 (19 U.S.C. 2291(a)(2)) is amended--
(1) by striking `or' at the end of subparagraph (B),
(2) by inserting `or' at the end of subparagraph (C),
(3) by inserting immediately after subparagraph (C) the following new
subparagraph:
`(D) is on call-up for purposes of active duty in a reserve status in the
Armed Forces of the United States, provided such active duty is `Federal
service' as defined in 5 U.S.C. 8521(a)(1),', and
(4) by striking `paragraph (A) or (C), or both,' and inserting `subparagraph
(A) or (C), or both (and not more than 26 weeks, in the case of weeks
described in subparagraph (B) or (D)),'.
(b) EFFECTIVE DATE- The amendments made by subsection (a) shall apply to
weeks beginning after August 1, 1990.

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Section 203(d) of the Federal-State Extended Unemployment Compensation Act
of 1970 is amended by adding at the end thereof the following new paragraph:
`(3)(A) Effective with respect to compensation for weeks of unemployment
beginning after March 6, 1993, the State may by law provide that for purposes
of beginning or ending any extended benefit period under this section--
`(i) there is a State `on' indicator for a week if--
`(I) the average rate of total unemployment in such State (seasonally
adjusted) for the period consisting of the most recent 3 months for which
data for all States are published before the close of such week equals or
exceeds 6.5 percent, and
`(II) the average rate of total unemployment in such State (seasonally
adjusted) for the 3-month period referred to in subclause (I) equals
or exceeds 110 percent of such average rate for either (or both) of the
corresponding 3-month periods ending in the 2 preceding calendar years; and
`(ii) there is a State `off' indicator for a week if either the requirements
of subclause (I) or subclause (II) of clause (i) are not satisfied.
Notwithstanding the provision of any State law described in this subparagraph,
any week for which there would otherwise be a State `on' indicator shall
continue to be such a week and shall not be determined to be a week for
which there is a State `off' indicator.
`(B) For purposes of this paragraph, determinations of the rate of total
unemployment in any State for any period (and of any seasonal adjustment)
shall be made by the Secretary.'

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TITLE II

-MODIFICATIONS TO EXTENDED BENEFITS PROGRAM

(a) WORK SEARCH RULES-
(1) Section 202(a)(3)(E) of the Federal-State Extended Unemployment
Compensation Act of 1970 is amended to read as follows:
`(E) For purposes of this paragraph, an individual shall be treated as
actively engaged in seeking work during any week if--
`(i)(I) the individual has engaged in a systematic and sustained effort
to obtain work during such week, and
`(II) the individual provides tangible evidence to the State agency that
the individual has engaged in such an effort during such week; or
`(ii) the individual resides (or worked) in an area for which a waiver
described in paragraph (7) is in effect for such week and the individual
meets the requirements of such work-search rules as the State may impose.'
(2) Section 202(a) of such Act is amended by adding at the end thereof
the following new paragraph:
`(7) Notwithstanding any other provision of law, the Governor of a State
may elect to waive the provisions of paragraph (3)(A)(ii) (relating to
the requirement to be actively engaged in seeking work) with respect
to any area of the State which the Governor determines to be an area of
high unemployment for any week. For purposes of the preceding sentence,
a waiver shall be made in accordance with regulations promulgated by the
Secretary, except that with respect to any period beginning after the date
of the enactment of this paragraph and before regulations take effect, such
waiver shall be made in accordance with temporary guidelines published by
the Secretary. The Secretary shall publish guidelines not later than July
4, 1992.'
(b) EARNINGS TEST- Paragraph (5) of section 202(a) of the Federal-State
Extended Unemployment Compensation Act of 1970 is amended by striking
`which one of the foregoing methods' and inserting `which one or more of
the foregoing methods'.
(c) EFFECTIVE DATE- Notwithstanding any other provision of law, the
amendments made by this section shall apply for purposes of extended
unemployment compensation and emergency unemployment compensation to weeks
of unemployment beginning on or after the date of the enactment of this Act.

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BENEFITS.
(a) INFORMATION ON UNEMPLOYMENT BENEFITS-
(1) GENERAL RULE- The State agency in each State shall provide to an
individual filing a claim for compensation under the State unemployment
compensation law a written explanation of the Federal and State income
taxation of unemployment benefits and of the requirements to make payments
of estimated Federal and State income taxes.
(2) STATE AGENCY- For purposes of this subsection, the term `State agency'
has the meaning given such term by section 3306(e) of the Internal Revenue
Code of 1986.
(b) EFFECTIVE DATE- The amendment made by subsection (a) shall take effect
on October 1, 1992.

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TITLE III

-PROVISIONS RELATING TO TAX INFORMATION

(a) GENERAL RULE- Section 302 of the Social Security Act (42 U.S.C. 502)
is amended by adding at the end thereof the following new subsection:
`(c) No portion of the cost of mailing a statement under section 6050B(b) of
the Internal Revenue Code of 1986 (relating to unemployment compensation)
shall be treated as not being a cost for the proper and efficient
administration of the State unemployment compensation law by reason of
including with such statement information about the earned income credit
provided by section 32 of the Internal Revenue Code of 1986. The preceding
sentence shall not apply if the inclusion of such information increases
the postage required to mail such statement.'
(b) EFFECTIVE DATE- The amendment made by subsection (a) shall take effect
on the date of the enactment of this Act.

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(a) AUTHORIZATION OF PROGRAMS-
(1) Paragraph (4) of section 3304(a) of the Internal Revenue Code of 1986
is amended by striking `and' at the end of subparagraph (C), by inserting
`and' at the end of subparagraph (D), and by adding at the end thereof
the following new subparagraph:
`(E) amounts may be withdrawn for the payment of short-time compensation
under a plan approved by the Secretary of Labor;'
(2) Subsection (f) of section 3306 of such Code is amended by striking
`and' at the end of paragraph (2), by striking the period at the end of
paragraph (3) and inserting `; and', and by adding at the end thereof the
following new paragraph:
`(4) amounts may be withdrawn for the payment of short-time compensation
under a plan approved by the Secretary of Labor.'
(3) Section 3306 of such Code is amended by adding at the end thereof the
following new subsection:
`(t) SHORT-TIME COMPENSATION- For purposes of this chapter, the term
`short-time compensation' means cash benefits payable to individuals under
a plan approved by the Secretary of Labor under which--
`(1) individuals whose workweeks have been reduced by at least 10 percent
are eligible for unemployment compensation;
`(2) the amount of unemployment compensation payable to any such individual
is a pro rata portion of the unemployment compensation which would be
payable to the individual if the individual were totally unemployed;
`(3) eligible employees are not required to meet the availability for work
or work search test requirements while collecting short-time  compensation
benefits, but are required to be available for their normal workweek; and
`(4) the employer plan is approved by the State agency and such plan
provides for a reduction in the number of hours worked by employees in
lieu of imposing temporary layoffs.'
(4) Section 303(a)(5) of the Social Security Act (42 U.S.C. 503(a)(5))
is amended by inserting before `; and' the following `: Provided further,
That amounts may be withdrawn for the payment of short-time compensation
as defined in section 3306(t) of the Internal Revenue Code of 1986'.
(b) EFFECTIVE DATE- The amendments made by this section shall take effect
on the date of the enactment of this Act.

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TITLE IV

-MODIFICATION TO REGULAR STATE UNEMPLOYMENT COMPENSATION PROGRAMS

Subparagraph (B) of section 3306(c)(1) of the Internal Revenue Code of
1986 is amended by striking `before January 1, 1993,'.

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Except as otherwise expressly provided, whenever in this title an amendment
or repeal is expressed in terms of an amendment to, or repeal of, a section
or other provision, the reference shall be considered to be made to a
section or other provision of the Internal Revenue Code of 1986.
Subtitle A--Alternative Taxable Years

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TITLE V

-REVENUE PROVISIONS

(a) LIMITATIONS ON TAXABLE YEARS WHICH MAY BE ELECTED- Subsection (b) of
section 444 (relating to limitations on taxable years which may be elected)
is amended to read as follows:
`(b) TAXABLE YEAR MUST BE SAME AS REPORTING PERIOD- If an entity has annual
reports or statements--
`(1) which ascertain income, profit, or  loss of the entity, and
`(2) which are--
`(A) provided to shareholders, partners, or other proprietors, or
`(B) used for credit purposes,
the entity may make an election under subsection (a) only if the taxable
year elected covers the same period as such reports or statements.'
(b) PERIOD OF ELECTION- Section 444(d)(2) (relating to period of election)
is amended to read as follows:
`(2) PERIOD OF ELECTION-
`(A) IN GENERAL- An election under subsection (a) shall remain in effect
until the partnership, S corporation, or personal service corporation
terminates the election and adopts the required taxable year.
`(B) CHANGE NOT TREATED AS TERMINATION- For purposes of subparagraph
(A), a change from a taxable year which is not a required taxable year to
another such taxable year shall not be treated as a termination.'
(c) EXCEPTION FOR TRUSTS- Section 444(d)(3) (relating to tiered structures)
is amended by adding at the end thereof the following new subparagraph:
`(C) EXCEPTION FOR CERTAIN STRUCTURES THAT INCLUDE TRUSTS- An entity shall
not be considered to be part of a tiered structure to which subparagraph
(A) applies solely because a trust owning an interest in such entity is
a trust all of the beneficiaries of which use a calendar year for their
taxable year.'
(d) REGULATIONS- Subsection (g) of section 444 (relating to regulations)
is amended to read as follows:
`(g) REGULATIONS- The Secretary shall prescribe such regulations as
may be necessary to carry out the provisions of this section, including
regulations--
`(1) to prevent the avoidance of the provisions of this section through
a change in entity or form of an entity,
`(2) to prevent the carryback to any preceding taxable year of a net
operating loss (or similar item) arising in any short taxable year created
pursuant to an election or termination of an election under this section, and
`(3) to provide for the termination of an election under subsection (a)
if an entity does not continue to meet the requirements of subsection (b).'

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TAXABLE YEAR.
(a) ADDITIONAL REQUIRED PAYMENT-
(1) IN GENERAL- Section 7519(b) (defining required payment) is amended to
read as follows:
`(b) REQUIRED PAYMENT- For purposes of this section--
`(1) IN GENERAL- The term `required payment' means, with respect to any
applicable election year of a partnership or S corporation, an amount
equal to the excess (if any) of--
`(A) the adjusted highest section 1 rate, multiplied by the net base year
income of the entity, over
`(B) the net required payment balance.
For purposes of paragraph (1)(A), the term `adjusted highest section 1 rate'
means the highest rate of tax in effect under section 1 as of the close of the
first required taxable year ending within such year, plus 2 percentage points.
`(2) ADDITIONAL PAYMENT FOR NEW APPLICABLE ELECTION YEARS-
`(A) IN GENERAL- In the case of a new applicable election year, the required
payment shall include, in addition to any amount determined under paragraph
(1), the amount determined under subparagraph (C).
`(B) NEW APPLICABLE ELECTION YEAR- For purposes of this section, the term
`new applicable election year' means any applicable election year--
`(i) with respect to which the preceding taxable year was not an applicable
election year, or
`(ii) which covers a different period than the preceding taxable year by
reason of a change described in section 444(d)(2)(B).
If any year described in the preceding sentence is a short taxable year which
does not include the last day of the required taxable year, the new applicable
election year shall be the taxable year following the short taxable year.
`(C) ADDITIONAL AMOUNT- For purposes of subparagraph (A), the amount
determined under this subparagraph shall be--
`(i) in the case of a year described in subparagraph (B)(i), 75 percent
of the required payment for the year, and
`(ii) in the case of a year described in subparagraph (B)(ii), 75 percent
of the excess (if any) of--
`(I) the required payment for the year, over
`(II) the required payment for the year which would have been computed if
the change described in subparagraph (B)(ii) had not occurred.
`(D) REQUIRED PAYMENT- For purposes of this paragraph, the term `required
payment' means the payment required by this section (determined without
regard to this paragraph).'
(2) DUE DATE- Paragraph (2) of section 7519(f) (defining due date) is
amended to read as follows:
`(2) DUE DATE-
`(A) IN GENERAL- Except as provided in subparagraph (B), the amount of
any required payment for any applicable election year shall be paid on or
before May 15 of the calendar year following the calendar year in which
the applicable election year begins.
`(B) SPECIAL RULE WHERE NEW APPLICABLE ELECTION YEAR ADOPTED- In the case
of a new applicable election year, the portion of any required payment
determined under subsection (b)(2) shall be paid on or before September
15 of the calendar year in which the applicable election year begins.'
(3) PENALTIES-
(A) IN GENERAL- Section 7519(f)(4) (relating to penalties) is amended by
adding at the end thereof the following new subparagraph:
`(D) FAILURE TO PAY ADDITIONAL AMOUNT- In the case of any failure by any
entity to pay on the date prescribed therefore the portion of any required
payment described in subsection (b)(2) for any applicable election year--
`(i) subparagraph (A) shall not apply, but
`(ii) the entity shall, for purposes of this title, be treated as having
terminated the election under section 444 for such year and changed to
the required taxable year.'
(B) CONFORMING AMENDMENT- Section 7519(f)(4)(A) is amended by striking
`In' and inserting `Except as provided in subparagraph (D), in'.
(4) REFUNDS- Section 7519(c)(2)(A) (relating to refund of payments) is
amended to read as follows:
`(A) an election under section 444 is not in effect for any year but was
in effect for the preceding year, or'.
(5) CONFORMING AMENDMENTS-
(A) Paragraph (1) of section 7519(c) is amended--
(i) by striking `subsection (b)(2)' and inserting `subsection (b)(1)(B)', and
(ii) by striking `subsection (b)(1)' and inserting `subsection (b)(1)(A)'.
(B) Subsection (d) of section 7519 is amended by striking paragraph (4)
and redesignating paragraph (5) as paragraph (4).
(b) Other Definitions and Special Rules-
(1) REFUND- Paragraph (3) of section 7519(c) (relating to date on which
refund payable) is amended in the matter preceding subparagraph (A) by
striking `on the later of' and inserting `by the later of'.
(2) DEFERRAL RATIO- The last sentence of paragraph (1) of section 7519(d)
is amended to read as follows: `Except as provided in regulations, the
term `deferral ratio' means the ratio which the number of months in the
deferral period of the applicable election year bears to the number of
months in the applicable election year.'
(3) NET INCOME- Paragraph (2) of section 7519(d) is amended by adding at
the end the following new subparagraph:
`(D) EXCESS APPLICABLE PAYMENTS FOR BASE YEAR- In the case of any new
applicable election year, the net income for the base year shall be
increased by the excess (if any) of--
`(i) the applicable payments taken into account in determining net income
for the base year, over
`(ii) 120 percent of the average amount of applicable payments made during
the first 3 taxable years preceding the base year.'
(4) DEFERRAL PERIOD- Paragraph (1) of section 7519(e) (defining deferral
period) is amended to read as follows:
`(1) DEFERRAL PERIOD- Except as provided in regulations, the term `deferral
period' means, with respect to any taxable year of the entity, the months
between--
`(A) the beginning of such year, and
`(B) the close of the first required taxable year (as defined in section
444(e)) ending within such year.'
(5) BASE YEAR-
(A) IN GENERAL- Paragraph (2)(A) of section 7519(e) (defining base year)
is amended to read as follows:
`(A) BASE YEAR- The term `base year' means, with respect to any applicable
election year, the first taxable year of 12 months (or 52-53 weeks) of
the partnership or S corporation preceding such applicable election year.'
(B) CONFORMING AMENDMENT- Paragraph (2) of subsection (g) of section 7519
is amended to read as follows:
`(2) there is no base year described in subsection (e)(2)(A) or
no preceding taxable year described in section 280H(c)(1)(A)(i).'
(c) INTEREST- Section 7519(f)(3) (relating to interest) is amended to read
as follows:
`(3) INTEREST- For purposes of determining interest, any payment required
by this section shall be treated as a tax, except that interest shall
be allowed with respect to any refund of a payment under this section
only for the period from the latest date specified in subsection (c)(3)
for such refund to the actual date of payment of such refund.'

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SERVICE CORPORATIONS.
(a) CARRYOVER OF NONDEDUCTIBLE AMOUNTS- Subsection (b) of section 280H
(relating to carryover of nondeductible amounts) is amended to read
as follows:
`(b) CARRYOVER OF NONDEDUCTIBLE AMOUNTS- Any amount not allowed as a
deduction for a taxable year pursuant to subsection (a) shall be allowed
as a deduction in the succeeding taxable year.'
(b) MINIMUM DISTRIBUTION REQUIREMENT- Paragraph (1) of section 280H(c)
is amended to read as follows:
`(1) IN GENERAL- A personal service corporation meets the minimum
distribution requirements of this subsection if the applicable amounts
paid during the deferral period of the taxable year equal or exceed the
lesser of--
`(A) 110 percent of the product of--
`(i) the applicable amounts paid during the first preceding taxable year
of 12 months (or 52-53 weeks), divided by 12, and
`(ii) the number of months in the deferral period of the taxable year, or
`(B) 110 percent of the amount equal to the applicable percentage of the
adjusted taxable income for the deferral period of the taxable year.'
(c) DISALLOWANCE OF NOL CARRYBACKS- Subsection (e) of section 280H (relating
to disallowance of net operating loss carrybacks) is amended by striking
`to (or from)' and inserting `from'.
(d) CONFORMING AMENDMENT- Subparagraph (A) of section 280H(f)(3) (relating
to deferral period) is amended by striking `section 444(b)(4)' and inserting
`section 7519(e)(1)'.

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The amendments made by this subtitle shall apply to taxable years beginning
after December 31, 1992.
Subtitle B--Pension Distributions

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TRANSFERS OF ELIGIBLE ROLLOVER DISTRIBUTIONS.
(a) OPTIONAL TRANSFERS-
(1) QUALIFIED PLANS- Subsection (a) of section 401 (relating to requirements
for qualification) is amended by inserting after paragraph (30) the
following new paragraph:
`(31) OPTIONAL DIRECT TRANSFER OF ELIGIBLE ROLLOVER DISTRIBUTIONS-
`(A) IN GENERAL- A trust shall not constitute a qualified trust under
this section unless the plan of which such trust is a part provides that
if the distributee of any eligible rollover distribution--
`(i) elects to have such distribution paid directly to an eligible retirement
plan, and
`(ii) specifies the eligible retirement plan to which such distribution
is to be paid (in such form and at such time as the plan administrator
may prescribe),
such distribution shall be made in the form of a direct trustee-to-trustee
transfer to the eligible retirement plan so specified.
`(B) LIMITATION- Subparagraph (A) shall apply only to the extent that the
eligible rollover distribution would be includible in gross income if not
transferred as provided in subparagraph (A) (determined without regard to
sections 402(c) and 403(a)(4)).
`(C) ELIGIBLE ROLLOVER DISTRIBUTION- For purposes of this paragraph, the
term `eligible rollover distribution' has the meaning given such term by
section 402(f)(2)(A).
`(D) ELIGIBLE RETIREMENT PLAN- For purposes of this paragraph, the term
`eligible retirement plan' has the meaning given such term by section
402(c)(8)(B), except that a qualified trust shall be considered an eligible
retirement plan only if it is a defined contribution plan, the terms of
which permit the acceptance of rollover distributions.'
(2) EMPLOYEE'S ANNUITIES- Paragraph (2) of section 404(a) (relating to
employee's annuities) is amended by striking `and (27)' and inserting
`(27), and (31)'.
(3) ANNUITIES PURCHASED BY CHARITIES AND PUBLIC SCHOOLS- Paragraph (10) of
section 403(b) (relating to distribution requirements) is amended by striking
`section 401(a)(9)' and inserting `sections 401(a)(9) and 401(a)(31)'.
(b) WITHHOLDING ON ELIGIBLE ROLLOVER DISTRIBUTIONS WHICH ARE NOT ROLLED OVER-
(1) IN GENERAL- Section 3405 (relating to special rules for pensions,
annuities, and certain other deferred income) is amended by redesignating
subsections (c), (d), and (e) as subsections (d), (e), and (f) and by
inserting after subsection (b) the following new subsection:
`(c) ELIGIBLE ROLLOVER DISTRIBUTIONS-
`(1) IN GENERAL- In the case of any designated distribution which is an
eligible rollover distribution--
`(A) subsections (a) and (b) shall not apply, and
`(B) the payor of such distribution shall withhold from such distribution
an amount equal to 20 percent of such distribution.
`(2) EXCEPTION- Paragraph (1)(B) shall not apply to any distribution if the
distributee elects under section 401(a)(31)(A) to have such distribution
paid directly to an eligible retirement plan.
`(3) ELIGIBLE ROLLOVER DISTRIBUTION- For purposes of this subsection,
the term `eligible rollover distribution' has the meaning given such term
by section 402(f)(2)(A) (or in the case of an annuity contract under
section 403(b), a distribution from such contract described in section
402(f)(2)(A)).'
(2) CONFORMING AMENDMENTS-
(A) Section 3405(a)(1) is amended by striking `subsection (d)(2)' and
inserting `subsection (e)(2)'.
(B) Section 3405(b)(1) is amended by striking `subsection (d)(3)' and
inserting `subsection (e)(3)'.
(C) Section 3405(d)(1) (as redesignated by paragraph (1)) is amended by
striking `subsection (d)(1)' and inserting `subsection (e)(1)'.
(D) Sections 3402(o)(6) and 6047(d)(1) are each amended by striking
`section 3405(d)(1)' and inserting `section 3405(e)(1)'.
(E) Section 6047(d)(1)(A) is amended by striking `section 3405(d)(1)'
and inserting `section 3405(d)(3)'.
(F) Section 6652(h) is amended by striking `section 3405(d)(10)(B)' and
inserting `section 3405(e)(10)(B)'.
(c) EXCLUSION FROM INCOME-
(1) QUALIFIED TRUSTS- Subsection (e) of section 402 (relating to taxability
of beneficiary of employees' trust), as amended by section 2, is amended
by adding at the end the following new paragraph:
`(6) DIRECT TRUSTEE-TO-TRUSTEE TRANSFERS- Any amount transferred in a direct
trustee-to-trustee transfer in accordance with section 401(a)(31) shall
not be includible in gross income for the taxable year of such transfer.'
(2) EMPLOYEE ANNUITIES- Subsection (a) of section 403 is amended by adding
at the end the following new paragraph:
`(5) DIRECT TRUSTEE-TO-TRUSTEE TRANSFER- Any amount transferred in a direct
trustee-to-trustee transfer in accordance with section 401(a)(31) shall
not be includible in gross income for the taxable year of such transfer.'
(3) ANNUITY CONTRACTS PURCHASED BY CHARITIES AND PUBLIC SCHOOLS- Section
403(b)(10) is amended by adding at the end the following new sentence: `Any
amount transferred in an direct trustee-to-trustee transfer in accordance
with section 401(a)(31) shall not be includible in gross income for the
taxable year of the transfer.'
(d) EFFECTIVE DATE- The amendments made by this section shall apply to
distributions after December 31, 1992.

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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, 1994, 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 such period.
Subtitle C--Other Provisions

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(a) GENERAL RULE- Subsection (d) of section 6655 (relating to amount of
required installments) is amended--
(1) by striking `90 percent' each place it appears in paragraph (1)(B)(i)
and inserting `91 percent',
(2) by striking `90 PERCENT' in the heading of paragraph (2) and inserting
`91 PERCENT', and
(3) by striking paragraph (3) and inserting the following new paragraph:
`(3) TEMPORARY INCREASE IN AMOUNT OF INSTALLMENT BASED ON CURRENT YEAR
TAX- In the case of any taxable year beginning after June 30, 1992, and
before 1997--
`(A) paragraph (1)(B)(i) and subsection (e)(3)(A)(i) shall be applied by
substituting `96 percent' for `91 percent' each place it appears, and
`(B) the table contained in subsection (e)(2)(B)(ii) shall be applied by
substituting `24', `48', `72', and `96' for `22.75', `45.50', `68.25',
and `91.00', respectively.
(b) CONFORMING AMENDMENTS-
(1) Clause (ii) of section 6655(e)(2)(B) is amended by striking the table
contained therein and inserting the following new table:
`In the case of the following
--The applicable
required installments:
--percentage is:
1st
22.75
2nd
45.50
3rd
68.25
4th
91.00.'
(2) Clause (i) of section 6655(e)(3)(A) is amended by striking `90 percent'
and inserting `91 percent'.
(c) EFFECTIVE DATE- The amendments made by this section shall apply to
taxable years beginning after June 30, 1992.

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(a) GENERAL RULE- Subpart D of part II of subchapter E of chapter 1
(relating to inventories) is amended by adding at the end thereof the
following new section:
`SEC. 475. MARK TO MARKET ACCOUNTING METHOD FOR DEALERS IN SECURITIES.
`(a) GENERAL RULE- Notwithstanding any other provision of this subpart,
the following rules shall apply to securities held by a dealer in securities:
`(1) Any security which is inventory in the hands of the dealer shall be
included in inventory at its fair market value.
`(2) In the case of any security which is not inventory in the hands of
the dealer and which is held at the close of any taxable year--
`(A) the dealer shall recognize gain or loss as if such security were sold
for its fair market value on the last business day of such taxable year, and
`(B) any gain or loss shall be taken into account for such taxable year.
Proper adjustment shall be made in the amount of any gain or loss subsequently
realized for gain or loss taken into account under the preceding sentence.
The Secretary may provide by regulations for the application of this paragraph
at times other than the times provided in this paragraph.
`(b) EXCEPTIONS-
`(1) IN GENERAL- Subsection (a) shall not apply to--
`(A) any security held for investment,
`(B) any security described in subsection (c)(2)(C) which is acquired
(including originated) by the taxpayer in the ordinary course of a trade
or business of the taxpayer and which is not held for sale,
`(C) any security acquired by a floor specialist (as defined in section
1236(d)(2)) in connection with the specialist's duties as a specialist on
an exchange, but only if the security is one in which the specialist is
registered with the exchange, and
`(D) any security which is a hedge with respect to--
`(i) a security to which subsection (a) does not apply, or
`(ii) a position, right to income,  or a liability which is not a security
in the hands of the taxpayer.
Except as provided in regulations, subparagraph (D) shall not apply to any
security held by a person in its capacity as a dealer in securities.
`(2) IDENTIFICATION REQUIRED- A security shall not be treated as described
in subparagraph (A), (B), (C), or (D) of paragraph (1), as the case may
be, unless such security is clearly identified in the dealer's records as
being described in such subparagraph before the close of the day on which
it was acquired, originated, or entered into (or such other time as the
Secretary may by regulations prescribe).
`(3) SECURITIES SUBSEQUENTLY NOT EXEMPT- If a security ceases to be
described in paragraph (1) at any time after it was identified as such
under paragraph (2), subsection (a) shall apply to any changes in value
of the security occurring after the cessation.
`(4) SPECIAL RULE FOR PROPERTY HELD FOR INVESTMENT- To the extent provided
in regulations, subparagraph (A) of paragraph (1) shall not apply to any
security described in subparagraph (D) or (E) of subsection (c)(2) which
is held by a dealer in such securities.
`(c) DEFINITIONS- For purposes of this section--
`(1) DEALER IN SECURITIES DEFINED- The term `dealer in securities' means
a taxpayer who--
`(A) regularly purchases securities from or sells securities to customers
in the ordinary course of a trade or business; or
`(B) regularly offers to enter into, assume, offset, assign or otherwise
terminate positions in securities with customers in the ordinary course
of a trade or business.
`(2) SECURITY DEFINED- The term `security' means any--
`(A) share of stock in a corporation;
`(B) partnership or beneficial ownership interest in a widely held or
publicly traded partnership or trust;
`(C) note, bond, debenture, or other evidence of indebtedness;
`(D) interest rate, currency, or equity notional principal contract;
`(E) evidence of an interest in, or a derivative financial instrument
in, any security described in subparagraph (A), (B), (C), or (D), or any
currency, including any option, forward contract, short position, and any
similar financial instrument in such a security or currency; and
`(F) position which--
`(i) is not a security described in subparagraph (A), (B), (C), (D), or (E),
`(ii) is a hedge with respect to such a security, and
`(iii) is clearly identified in the dealer's records as being described
in this subparagraph before the close of the day on which it was acquired
or entered into (or such other time as the Secretary may by regulations
prescribe).
Such term shall not include any contract to which section 1256(a) applies.
`(3) HEDGE- The term `hedge' means any position which reduces the dealer's
risk of interest rate or price changes or currency fluctuations, including
any position which is reasonably expected to become a hedge within 60 days
after the acquisition of the position.
`(d) SPECIAL RULES- For purposes of this section--
`(1) CERTAIN RULES NOT TO APPLY- The rules of sections 263(g) and 263A
shall not apply to securities to which subsection (a) applies.
`(2) IMPROPER IDENTIFICATION- If a taxpayer--
`(A) identifies any security under subsection (b)(2) as being described
in subsection (b)(1) and such security is not so described, or
`(B) fails under subsection (c)(2)(F)(iii) to identify any position which
is described in such subsection at the time such identification is required,
the provisions of subsection (a) shall apply to such security or position,
except that any loss under this section prior to the disposition of the
security or position shall be recognized only to the extent of gain previously
recognized under this section (and not previously taken into account under
this paragraph) with respect to such security or position.
`(e) REGULATORY AUTHORITY- The Secretary shall prescribe such regulations as
may be necessary or appropriate to carry out the purposes of this section,
including rules--
`(1) to prevent the use of year-end transfers, related parties, or other
arrangements to avoid the provisions of this section, and
`(2) to provide for the application of this section to any security which
is a hedge which cannot be identified with a specific security, position,
right to income, or liability.'
(b) CONFORMING AMENDMENTS-
(1) Paragraph (1) of section 988(d) is amended--
(A) by striking `section 1256' and inserting `section 475 or 1256', and
(B) by striking `1092 and 1256' and inserting `475, 1092, and 1256'.
(2) The table of sections for subpart D of part II of subchapter E of
chapter 1 is amended by adding at the end thereof the following new item:
`Sec. 475. Mark to market accounting method for dealers in securities.'
(c) EFFECTIVE DATE-
(1) IN GENERAL- The amendments made by this section shall apply to all
taxable years ending on or after December 31, 1992.
(2) CHANGE IN METHOD OF ACCOUNTING- In the case of any taxpayer required
by this section to change its method of accounting for any taxable year--
(A) such change shall be treated as initiated by the taxpayer,
(B) such change shall be treated as made with the consent of the Secretary,
and
(C) the net amount of the adjustments required to be taken into account by
the taxpayer under section 481 of the Internal Revenue Code of 1986 shall
be taken into account ratably over the 10-taxable year period beginning
with the first taxable year ending on or after December 31, 1992.
If the net amount determined under subparagraph (C) exceeds the net amount
which would have been determined under subparagraph (C) if the taxpayer had
been required by this section to change its method of accounting for its
last taxable year beginning before March 20, 1992, subparagraph (C) shall
be applied with respect to such excess by substituting `4-taxable year' for
`10-taxable year'.
(3) UNDERPAYMENT OF ESTIMATED TAX- In the case of any required installment
the due date for which occurs before the date of the enactment of this
Act, no addition to tax shall be made under section 6654 or 6655 of the
Internal Revenue Code of 1986 with respect to any underpayment to the
extent such underpayment was created or increased by any amendment made by,
or provision of, this section. All reductions in installments by reason of
the preceding sentence shall be recaptured by increasing the amount of the
1st required installment occurring on or after the date of the enactment
of this Act by the amount of such reductions.

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(a) GENERAL RULE- For purposes of chapter 1 of the Internal Revenue Code
of 1986--
(1) any FSLIC assistance with respect to any loss of principal, capital, or
similar amount upon the disposition of any asset shall be taken into account
as compensation for such loss for purposes of section 165 of such Code, and
(2) any FSLIC assistance with respect to any debt shall be taken into account
for purposes of section 166, 585, or 593 of such Code in determining whether
such debt is worthless (or the extent to which such debt is worthless)
and in determining the amount of any addition to a reserve for bad debts
arising from the worthlessness or partial worthlessness of such debts.
(b) FSLIC ASSISTANCE- For purposes of this section, the term `FSLIC
assistance' means any assistance (or right to assistance) with respect to a
domestic building and loan association (as defined in section 7701(a)(19)
of such Code without regard to subparagraph (C) thereof) under section
406(f) of the National Housing Act or section 21A of the Federal Home Loan
Bank Act (or under any similar provision of law).
(c) EFFECTIVE DATE-
(1) IN GENERAL- Except as otherwise provided in this subsection--
(A) The provisions of this section shall apply to taxable years ending
after March 4, 1991, but only with respect to FSLIC assistance not credited
before March 4, 1991.
(B) If any FSLIC assistance not credited before March 4, 1991, is with
respect to a loss sustained or charge-off in a taxable year ending before
March 4, 1991, for purposes of determining the amount of any net operating
loss carryover to a taxable year ending after on or after March 4, 1991,
the provisions of this section shall apply to such assistance for purposes
of determining the amount of the net operating loss for the taxable year
in which such loss was sustained or debt written off. Except as provided
in the preceding sentence, this section shall not apply to any FSLIC
assistance with respect to a loss sustained or charge-off in a taxable
year ending before March 4, 1991.
(2) EXCEPTIONS- The provisions of this section shall not apply to any
assistance to which the amendments made by section 1401(a)(3) of the
Financial Institution Reform, Recovery, and Enforcement Act of 1989 apply.
Attest:
Secretary.
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Unemployment Compensation Extension bill — HR. 5260

Other Sections

TITLE I

TITLE II

TITLE III

TITLE IV

TITLE V

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