PUBLIC LAW 98-21 SOCIAL SECURITY AMENDMENTS OF 1983 AN ACT TO BE ENACTED IN THE SENATE AND HOUSE OF REPRESENTATIVES OF THE UNITED STATES OF AMERICA

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• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85-00003R000200110002-2
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• Document Creation Date: December 21, 2016
• Document Release Date: October 29, 2008
• Sequence Number: 2
• Publication Date: April 20, 1983
• Content Type: OPEN SOURCE

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PUBLIC LAW 98-21-APR. 20, 1983 97 STAT. 65
Public Law 98-21
98th Congress
To assure the solvency of the Social Security Trust Funds, to reform the medicare
reimbursement of hospitals, to extend the Federal supplemental compensation
program, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. This Act, with the following table of contents, may be
cited as the "Social Security Amendments of 1983".
TABLE OF CONTENTS
Sec. 1. Short title.
TITLE I-PROVISIONS AFFECTING THE FINANCING OF THE SOCIAL
SECURITY SYSTEM
PART A-COVERAGE
Sec. 101. Coverage of newly hired Federal employees.
Sec. 102. Coverage of employees of nonprofit organizations.
Sec. 103. Duration of agreements for coverage of State and local employees.
PART B--COMPUTATION OF BENEFIT AMOUNTS
Sec. 111. Shift of cost-of-living adjustments to calendar year basis.
Sec. 112. Cost-of-living increases to be based on either wages or prices (whichever is
lower) when balance in OASDI trust funds falls below specified level.
Sec. 113. Elimination of windfall benefits for individuals receiving pensions from
noncovered employment.
Sec. 114. Increase in old-age insurance benefit amounts on account of delayed
retirement.
PART C-REVENUE PROVISIONS
Sec. 121. Taxation of social security and tier 1 railroad retirement benefits.
Sec. 122. Credit for the elderly and the permanently and totally disabled.
Sec. 123. Acceleration of increases in FICA taxes; 1984 employee tax credit.
Sec. 124. Taxes on self-employment income; credit against such taxes for years
before 1990; deduction of such taxes for years after 1989.
Sec. 125. Treatment of certain faculty practice plans.
Sec. 126. Allocations to disability insurance trust fund.
PART D-BENEFITS FOR CERTAIN SURVIVING, DIVORCED, AND DISABLED SPOUSES
Sec. 131. Benefits for surviving divorced spouses and disabled widows and widowers
who remarry.
Sec. 132. Entitlement to divorced spouse's benefits without regard to entitlement of
insured individual to benefits; exemption of divorced spouse's benefits
from deduction on account of work.
Sec. 133. Indexing of deferred surviving spouse's benefits to recent wage levels.
Sec. 134. Limitation on benefit reduction for early retirement in case of disabled
widows and widowers.
PART E-MECHANISMS TO ASSURE CONTINUED BENEFIT PAYMENTS IN UNEXPECTEDLY
ADVERSE CONDITIONS
Sec. 141. Normalized crediting of social security taxes to trust funds.
Sec. 142. Interfund borrowing extension.
Apr. 20, 1983
[H.R. 19001
Social Security
Amendments of
1983.
42 USC 1305
note.
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97 STAT. 66 PUBLIC LAW 98-21-APR. 20, 1983
Sec. 143. Recommendations by Board of Trustees to remedy inadequate balances in
the Social Security Trust Funds.
PART F-OTHER FINANCING AMENDMENTS
Sec. 151. Financing of noncontributory military wage credits.
Sec. 152. Accounting for certain unnegotiated checks for benefits under the social
security program.
Sec. 153. Float periods.
Sec. 154. Trust fund trustees' reports.
TITLE 11-ADDITIONAL PROVISIONS RELATING TO LONG-TERM FINANCING
OF THE SOCIAL SECURITY SYSTEM
Sec. 201. Increase in retirement age.
TITLE III-MISCELLANEOUS AND TECHNICAL PROVISIONS
PART A-ELIMINATION OF GENDER-BASED DISTINCTIONS
Sec. 301. Divorced husbands.
Sec. 302. Remarriage of surviving spouse before age of eligibility.
Sec. 303. Illegitimate children.
Sec. 304. Transitional insured status.
Sec. 305. Equalization of benefits under section 228.
Sec. 306. Father's insurance benefits.
Sec. 307. Effect of marriage on childhood disability benefits and on other depend-
ents' or survivors' benefits.
Sec. 308. Credit for certain military service.
Sec. 309. Conforming amendments.
Sec. 310. Effective date of part A.
PART B-COVERAGE
Sec. 321. Coverage of employees of foreign affiliates of American employers.
Sec. 322. Extension of coverage by international social security agreement.
Sec. 323. Treatment of certain service performed outside the United States.
Sec. 324. Amount received under certain deferred compensation and salary reduc-
tion arrangements treated as wages for FICA taxes.
Sec. 325. Effect of changes in names of State and local employee groups in Utah.
Sec. 326. Effective dates of international social security agreements.
Sec. 327. Codification of Rowan decision with respect to meals and lodging.
Sec. 328. Treatment of contributions under simplified employee pensions.
PART C-OTHER AMENDMENTS
Sec. 331. Technical and conforming amendments to maximum family benefit provi-
sions.
Sec. 332. Relaxation of insured status requirements for certain workers previously
entitled to a period of disability.
Sec. 333. Protection of benefits of illegitimate children of disabled beneficiaries.
Sec. 334. One-month retroactivity of widow's and widower's insurance benefits.
Sec. 335. Nonassignability of benefits.
Sec. 336. Use of death certificates to prevent erroneous benefit payments to de-
ceased individuals.
Sec. 337. Public pension offset.
Sec. 338. Study concerning the establishment of the Social Security Administration
as an independent agency.
Sec. 339. Limitation on payments to prisoners.
Sec. 340. Requirement of previous United States residency for alien dependents and
survivors living outside the United States.
Sec. 341. Addition of public members to Trust Fund Board of Trustees.
Sec. 342. Payment schedule by State and local governments.
Sec. 343. Earnings sharing implementation report.
Sec. 344. Veterans' Administration reorganization.
Sec. 345. Social security cards.
Sec. 346. Budgetary treatment of Trust Fund operations.
Sec. 347. Liberalization of earnings test.
TITLE IV-SUPPLEMENTAL SECURITY INCOME BENEFITS
Sec. 401. Increase in Federal SSI benefit standard.
Sec. 402. Adjustments in Federal SSI pass-through provisions.
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PUBLIC LAW 98-21-APR. 20, 1983 97 STAT. 67
Sec. 403. Ml eligibility for temporary residents of emergency shelters for the how
ess.
Sec. 404. Disregarding of emergency and other in-kind assistance provided by non-
prrootfiit organizations.
Sec. 405. Notification regarding SSI.
TITLE V-UNEMPLOYMENT COMPENSATION PROVISIONS
PAr A-FEngnAI. SUENTAL COMPENSATION
Sec. 501. Extension of program.
Sec. 502. Number of weeks for which compensation payable.
Sec. 503. Effective date.
Sec. 504. Training.
Sec. 505. Coordination with trade readjustment program.
PART B-PROVISIONS RELATING TO INTEREST AND CREDIT REDUCTIONS
Sec. 511. Deferral of interest.
Sec. 512. Cap on credit reduction.
Sec. 513. Average employer contribution rate.
Sec. 514. Date for payment of interest.
Sec. 515. Penalty for failure to pay interest.
PART C-MISCELLANEOUS PROVISIONS
Sec. 521. Treatment of employees providing services to educational institutions.
Sec. 522. Extended benefits for individuals who are hospitalized or on jury duty.
Sec. 523. Voluntary health insurance programs permitted.
Sec. 524. Treatment of certain organizations retroactively determined to be de-
scribed in section 501(cx3) of the Internal Revenue Code of 1954.
TITLE VI-PROSPECTIVE PAYMENTS FOR MEDICARE INPATIENT
HOSPITAL SERVICES
Sec. 601. Medicare payments for inpatient hospital services on the basis of prospec-
tive rates.
Sec. 602. Conforming amendments.
Sec. 603. Reports, experiments, and demonstration projects.
Sec. 604. Effective dates.
Sec. 605. Delay in provision relating to hospital-based skilled nursing facilities.
Sec. 606. Shift in medicare premiums to coincide with cost-of-living increase.
Sec. 607. Section 1122 amendments.
TITLE I-PROVISIONS AFFECTING THE FI-
NANCING OF THE SOCIAL SECURITY
SYSTEM
SEC. 101. (aXl) Section 210(a) of the Social Security Act is amended 42 Usc 410.
by striking out paragraphs (5) and (6) and inserting in lieu thereof
the following:
"(5) Service performed in the employ of the United States or
any instrumentality of the United States, if such service-
"(A) would be excluded from the term `employment' for
purposes of this title if the provisions of paragraphs (5) and
(6) of this subsection as in effect in January 1983 had
remained in effect, and
"(B) is performed by an individual who (i) has been
continuously in the employ of the United States or an
instrumentality thereof since December 31, 1983 (and for
this purpose an individual who returns to the performance
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97 STAT. 68 PUBLIC LAW 98-21-APR. 20, 1983
of such service after being separated therefrom following a
previous period of such service shall nevertheless be consid-
ered upon such return as having been continuously in the
employ of the United States or an instrumentality thereof,
regardless of whether the period of such separation began
before, on, or after December 31, 1983, if the period of such
separation does not exceed 365 consecutive days), or (ii) is
receiving an annuity from the Civil Service Retirement and
Disability Fund, or benefits (for service as an employee)
under another retirement system established by a law of
the United States for employees of the Federal Government
(other than for members of the uniformed services);
except that this paragraph shall not apply with respect to-
ii(i) service performed as the President or Vice President
of the United States,
"(ii) service performed-
"(I) in a position placed in the Executive Schedule
under sections 5312 through 5317 of title 5, United
States Code,
"(II) as a noncareer appointee in the Senior Execu-
tive Service or a noncareer member of the Senior For-
eign Service, or
"(III) in a position to which the individual is
appointed by the President (or his designee) or the Vice
President under section 105(a)(1), 106(a)(1), or 107 (a)(1)
or (b)(1) of title 3, United States Code, if the maximum
rate of basic pay for such position is at or above the
rate for level V of the Executive Schedule,
"(iii) service performed as the Chief Justice of the United
States, an Associate Justice of the Supreme Court, a judge
of a United States court of appeals, a judge of a United
States district court (including the district court of a terri-
tory), a judge of the United States Claims Court, a judge of
the United States Court of International Trade, a judge of
the United States Tax Court, a United States magistrate, or
a referee in bankruptcy or United States bankruptcy judge,
"(iv) service performed as a Member, Delegate, or Resi-
dent Commissioner of or to the Congress, or
"(v) any other service in the legislative branch of the
Federal Government if such service is performed by an
individual who, on December 31, 1983, is not subject to
5 Usc 8331. subchapter III of chapter 83 of title 5, United States Code;
"(6) Service performed in the employ of the United States or
any instrumentality of the United States if such service is
performed-
"(A) in a penal institution of the United States by an
inmate thereof;
"(B) by any individual as an employee included under
section 5351(2) of title 5, United States Code (relating to
certain interns, student nurses, and other student employ-
ees of hospitals of the Federal Government), other than as a
medical or dental intern or a medical or dental resident in
training; or
"(C) by any individual as an employee serving on a
temporary basis in case of fire, storm, earthquake, flood, or
other similar emergency;".
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PUBLIC LAW 98-21-APR. 20, 1983 97 STAT. 69
(2) Section 210(p) of such Act is amended by striking out "provi-
sions of-" and all that follows and inserting in lieu thereof "provi-
sions of subsection (aX5).".
(bXl) Section 3121(b) of the Internal Revenue Code of 1954 is
amended by striking out paragraphs (5) and (6) and inserting in lieu
thereof the following:
"(5) service performed in the employ of the United States or
any instrumentality of the United States, if such service-
"(A) would be excluded from the term `employment' for
purposes of this title if the provisions of paragraphs i5, and
(6) of this subsection as in effect in January 1983 had
remained in effect, and
"(B) is performed by an individual who (i) has been
continuously in the employ of the United States or an
instrumentality thereof since December 31, 1983 (and for
this purpose an individual who returns to the performance
of such service after being separated therefrom following a
previous period of such service shall nevertheless be consid-
ered upon such return as having been continuously in the
employ of the United States or an instrumentality thereof,
regardless of whether the period of such separation began
before, on, or after December 31, 1983, if the period of such
separation does not exceed 365 consecutive days), or (ii) is
receiving an annuity from the Civil Service Retirement and
Disability Fund, or benefits (for service as an employee)
under another retirement system established by law of the
United States for employees of the Federal Government
(other than for members of the uniformed services);
except that this paragraph shall not apply with respect to-.
"(i) service performed as the President or Vice President
of the United States,
"(ii) service performed-
"(I) in a position placed in the Executive Schedule
under sections 5312 through 5317 of title 5, United
States Code,
"(II) as a noncareer appointee in the Senior Execu
tive Service or a noncareer member of the Senior For
eign Service, or
"(III) in a position to which the individual is
appointed by the President (or his designee) or the Vice
President under section 105(aXl), 106(aXl), or 107 (aXi)
or (b)(1) of title 3, United States Code, if the maximum
rate of basic pay for such position is at or above the
rate for level V of the Executive Schedule,
"(iii) service performed as the Chief Justice of the United
States, an Associate Justice of the Supreme Court, a judge
of a United States court of appeals, a judge of a United
States district court (including the district court of a terri-
tory), a judge of the United States Claims Court, a judge of
the United States Court of International Trade, a judge of
the United States Tax Court, a United States magistrate, or
a referee in bankruptcy or United States bankruptcy judge,
"(iv) service performed as a Member, Delegate, or Resi-
dent Commissioner of or to the Congress, or
"(v) any other service in the legislative branch of the
Federal Government if such service is performed by an
96 Stat. 560.
42 USC 410.
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97 STAT. 70 PUBLIC LAW 98-21-APR. 20, 1983
individual who, on December 31, 1983, is not subject to
5 Use 8331. subchapter III of chapter 83 of title 5, United States Code;
"(6) service performed in the employ of the United States or
any instrumentality of the United States if such service is
performed-
"(A) in a penal institution of the United States by an
inmate thereof;
"(B) by any individual as an employee included under
section 5351(2) of title 5, United States Code (relating to
certain interns, student nurses, and other student employ-
ees of hospitals of the Federal Government), other than as a
medical or dental intern or a medical or dental resident in
training; or
"(C) by any individual as an employee serving on a
temporary basis in case of fire, storm, earthquake, flood, or
other similar emergency;".
96 Stat. 559. (2) Section 3121(uXl) of such Code is amended to read as follows:
26 USC 3121. "(1) IN GENERAL.-For purposes of the taxes imposed by sec-
tions 3101(b) and 3111(b), subsection (b) shall be applied without
regard to paragraph (5) thereof.".
42 USC 409. (c)(1) Section 209 of the Social Security Act is amended by adding
at the end thereof the following new paragraph:
"For purposes of this title, in the case of an individual performing
service under the provisions of section 294 of title 28, United States
Code (relating to assignment of retired justices and judges to active
duty), the term `wages' shall, subject to the provisions of subsection
(a) of this section, include any payment under section 371(b) of such
title 28 which is received during the period of such service.".
26 USC 3121. (2) Section 3121(i) of the Internal Revenue Code of 1954 (relating to
computation of wages in certain cases) is amended by adding at the
end thereof the following new paragraph:
"(5) SERVICE PERFORMED BY CERTAIN RETIRED JUSTICES AND
JUDGES.-For purposes of this chapter, in the case of an individ-
ual performing service under the provisions of section 294 of
title 28, United States Code (relating to assignment of retired
justices and judges to active duty), the term `wages' shall,
subject to the provisions of subsection (aXi) of this section,
include any payment under section 371(b) of such title 28 which
is received during the period of such service.".
Effective date. (d) The amendments made by this section shall be effective with
26 USC 3121 respect to remuneration paid after December 31, 1983.
note
Entitlements. (e) Nothing in this Act shall reduce the accrued entitlements to
42 USC 410 note. future benefits under the Federal Retirement System of current and
retired Federal employees and their families.
42 USC 410. SEC. 102. (a) Section 210(aX8) of the Social Security Act is
amended-
(1) by striking out "(A)" immediately after "(8)";
(2) by striking out "subparagraph" where it first appears and
inserting in lieu thereof "paragraph"; and
(3) by striking out subparagraph (B).
26 USC 3121. (b)(1) Section 3121(b)(8) of the Internal Revenue Code of 1954 is
amended-
(A) by striking out "(A)" immediately after "(8)";
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PUBLIC LAW 98-21-APR. 20, 1983
97 STAT. 71
(B) by striking out "subparagraph" where it first appears and
inserting in lieu thereof "paragraph"; and
(C) by striking out subparagraph (B).
(2) Section 3121(k) of such Code is repealed.
26 Usc 3121.
(3) Section 3121(r) of such Code is amended-
(A) by striking out "subsection (bX8XA)" and "section
210(a)(8XA)" in paragraph (3) and inserting in lieu thereof
"subsection (bX8) and "section 210(aX8)", respectively; and
(B) by striking out paragraph (4).
(c) The amendments made by the preceding provisions of this Effective date.
section shall be effective with respect to service performed after 26 use 3121
December 31, 1983 (but the provisions of sections 2 and 3 of Public note.
Law 94-563 and section 312(c) of Public Law 95-216 shall continue in 26 USC 3121
effect, to the extent applicable, as though such amendments had not note.
been made).
(d) The period for which a certificate is in effect under section 26 Usc 3121
3121(k) of the Internal Revenue Code of 1954 may not be terminated note.
under paragraph (1XD) or (2) thereof on or after March 31, 1983; but Supra.
no such certificate shall be effective with respect to any service to
which the amendments made by this section apply.
(e)(1) If any individual- 42 USC 414 note.
(A) on January 1, 1984, is age 55 or over, and is an employee
of an organization described in section 210(aX8XB) of the Social
Security Act (A) which does not have in effect (on that date) a 42 use 410.
waiver certificate under section 3121(k) of the Internal Revenue
Code of 1954 and (B) to the employees of which social security
coverage is extended on January 1, 1984, solely by reason of the
enactment of this section, and
(B) after December 31, 1983, acquires the number of quarters
of coverage (within the meaning of section 213 of the Social
Security Act) which is required for purposes of this subpara- 42 use 413.
graph under paragraph (2),
then such individual shall be deemed to be a fully insured individual
(as defined in section 214 of the Social Security Act) for all of the 42 USC 414.
purposes of title II of such Act.
(2) The number of quarters of coverage which is required for
purposes of subparagraph (B) of paragraph (1) shall be determined
as follows:
The number of quarters of
In the case of an individual who on coverage so required
January 1, 1984, is- shall be-
age 60 or over ................................................................................................... 6
age 59 or over but less than age 60 ............................................................. 8
age 58 or over but less than age 59 ............................................................. 12
age 57 or over but less than age 58 ............................................................. 16
age 55 or over but less than age 57 ............................................................. 20.
DURATION OF AGREEMENTS FOR COVERAGE OF STATE AND LOCAL
EMPLOYEES
SEC. 103. (a) Section 218(g) of the Social Security Act is amended to
read as follows:
"Duration of Agreement
"(g) No agreement under this section may be terminated, either in
its entirety or with respect to any coverage group, on or after the
date of the enactment of the Social Security Amendments of 1983.".
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97 STAT. 72 PUBLIC LAW 98-21-APR. 20, 1983
42 USC 418 note.
42 USC 418.
(b) The amendment made by subsection (a) shall apply to any
agreement in effect under section 218 of the Social Security Act on
the date of the enactment of this Act, without regard to whether a
notice of termination is in effect on such date, and to any agreement
or modification thereof which may become effective under such
section 218 after that date.
42 USC 402.
95 Stat. 1660.
SHIFT OF COST-OF-LIVING ADJUSTMENTS TO CALENDAR YEAR BASIS
SEC. 111. (aX1) Section 215(i)(2XAXii) of the Social Security Act is
amended by striking out "June" and inserting in lieu thereof
"December".
(2) Section 215(i)(2)(AXiii) of such Act is amended by striking out
"May" and inserting in lieu thereof "November".
(3) Section 215(iX2XB) of such Act is amended by striking out
"May" each place it appears and inserting in lieu thereof in each
instance "November".
(4) Section 203(f)(8XA) of such Act is amended by striking out
"June" and inserting in lieu thereof "December".
(5) Section 230(a) of such Act is amended by striking out "June"
and inserting in lieu thereof "December".
(6) Section 215(i)(2) of such Act as in effect in December 1978, and
as applied in certain cases under the provisions of such Act as in
effect after December 1978, is amended by striking out "June" in
subparagraph (A)(ii) and inserting in lieu thereof "December", and
by striking out "May" each place it appears in subparagraph (B) and
inserting in lieu thereof in each instance "November".
(7) Section 202(m) of such Act (as it applies in certain cases by
reason of section 2 of Public Law 97-123) is amended by striking out
"May" and inserting in lieu thereof "November".
(8) The amendments made by this subsection shall apply with
respect to cost-of-living increases determined under section 215(i) of
the Social Security Act for years after 1982.
(b)(1) Section 215(iX1XA) of the Social Security Act is amended by
striking out "March 31" and inserting in lieu thereof "September
30", and by striking out "1974" and inserting in lieu thereof "1982".
(2) Section 21501)(A) of such Act as in effect in December 1978,
and as applied in certain cases under the provisions of such Act as in
effect after December 1978, is amended by striking out "March 31"
and inserting in lieu thereof "September 30" and by striking out
"1974" and inserting in lieu thereof "1982".
(3) The amendments made by this subsection shall apply with
respect to cost-of-living increases determined under section 215(i) of
the Social Security Act for years after 1983.
(c) Section 215(iX4) of such Act is amended by inserting ", and as
amended by section 111 (a)(6) and (b)(2) of the Social Security
Amendments of 1983," after "as in effect in December 1978" the
first place it appears.
(d) Notwithstanding any provision to the contrary in section 215(i)
of the Social Security Act, the "base quarter" (as defined in para-
graph (1XAXi) of such section) in the calendar year 1983 shall be a
`cost-of-living computation quarter" within the meaning of para-
graph (1XB) of such section (and shall be deemed to have been
determined by the Secretary of Health and Human Services to be a
"cost-of-living computation quarter" under paragraph (2)(A) of such
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PUBLIC LAW 98-21-APR. 20, 1983 97 STAT. 73
section) for all of the purposes of such Act as amended by this
section and by other provisions of this Act, without regard to the
extent by which the Consumer Price Index has increased since the
last prior cost-of-living computation quarter which was established
under such paragraph (1XB).
(e) Section 403(b) of the Omnibus Reconciliation Act of 1982
(Public Law 97-253) is amended to read as follows:
"(b)(l) Except as provided in paragraph (2), the amendment made
by subsection (aXl) shall apply with respect to amounts payable for
periods beginning after May 31, 1983.
"(2) In the cases of individuals to whom pension is payable under
sections 521, 541, and 542 of title 38, United States Code, the
amendment made by subsection (aXl) shall take effect on the first
day after May 31, 1983, that an increase is made in maximum
annual rates of pension pursuant to section 3112 of title 38, United
States Code.".
COST-OF-LIVING INCREASES TO BE BASED ON EITHER WAGES OR PRICES
(WHICHEVER IS LOWER) WHEN BALANCE IN OASDI TRUST FUNDS
FALLS BELOW SPECIFIED LEVEL
SEC. 112. (a) Section 215(iX1) of the Social Security Act is
amended-
(1) by striking out "in which" in subparagraph (B) and all that
follows down through the first semicolon in such subparagraph
and inserting in lieu thereof "with respect to which the applica-
ble increase percentage is 3 percent or more;";
(2) by striking out "and" at the end of subparagraph (B);
(3) by redesignating subparagraph (C) as subparagraph (H);
and
(4) by inserting after subparagraph (B) the following new
subparagraphs:
"(C) the term 'applicable increase percentage' means-
"(i) with respect to a base quarter or cost-of-living compu-
tation quarter in any calendar year before 1984, or in any
calendar year after 1983 and before 1989 for which the
OASDI fund ratio is 15.0 percent or more, or in any calen-
dar year after 1988 for which the OASDI fund ratio is 20.0
percent or more, the CPI increase percentage; and
"(ii) with respect to a base quarter or cost-of-living compu-
tation quarter in any calendar year after 1983 and before
1989 for which the OASDI fund ratio is less than 15.0
percent, or in any calendar year after 1988 for which the
OASDI fund ratio is less than 20.0 percent, the CPI increase
percentage or the wage increase percentage, whichever
(with respect to that quarter) is the lower;
"(D) the term 'CPI increase percentage', with respect to a base
quarter or cost-of-living computation quarter in any calendar
year, means the percentage (rounded to the nearest one-tenth of
1 percent) by which the Consumer Price Index for that quarter
(as prepared by the Department of Labor) exceeds such index
for the most recent prior calendar quarter which was a base
quarter under subparagraph (AXii) or, if later, the most recent
cost-of-living computation quarter under subparagraph (B);
"(E) the term wage increase percentage, with respect to a
base quarter or cost-of-living computation quarter in any calen-
dar year, means the percentage (rounded to the nearest one-
96 Stat. 802.
38 USC 3023
note.
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97 STAT. 74 PUBLIC LAW 98-21-APR. 20, 1983
tenth of 1 percent) by which the SSA average wage index for the
year immediately preceding such calendar year exceeds such
index for the year immediately preceding the most recent prior
calendar year which included a base quarter under subpara-
graph (A)(ii) or, if later, which included a cost-of-living computa-
tion quarter;
"(F) the term `OASDI fund ratio', with respect to any calendar
year, means the ratio of-
"(i) the combined balance in the Federal Old-Age and
Survivors Insurance Trust Fund and the Federal Disability
Insurance Trust Fund as of the beginning of such year,
including the taxes transferred under section 201(a) on the
first day of such year and reduced by the outstanding
amount of any loan (including interest thereon) theretofore
made to either such Fund from the Federal Hospital Insur-
ance Trust Fund under section 201(1), to
"(ii) the total amount which (as estimated by the Secre-
tary) will be paid from the Federal Old-Age and Survivors
Insurance Trust Fund and the Federal Disability Insurance
Trust Fund during such calendar year for all purposes
authorized by section 201 (other than payments of interest
on, or repayments of, loans from the Federal Hospital
Insurance Trust Fund under section 201(1)), but excluding
any transfer payments between such trust funds and reduc-
ing the amount of any transfers to the Railroad Retirement
Account by the amount of any transfers into either such
trust fund from that Account;
"(G) the term `SSA average wage index', with respect to any
calendar year, means the average of the total wages reported to
the Secretary of the Treasury or his delegate as determined for
purposes of subsection (b)(3)(A)(ii); and".
(b) Section 215(i)(2)(A)(ii) of such Act is amended by striking out
"by the same percentage" and all that follows down through the
semicolon, in the sentence immediately following subdivision (III),
and inserting in lieu thereof "by the applicable increase percent-
age; .
(c) Section 215(i) of such Act is further amended by adding at the
end thereof the following new paragraph:
"(5)(A) If-
"(i) with respect to any calendar year the `applicable increase
percentage' was determined under clause (ii) of paragraph (1)(C)
rather than under clause (i) of such paragraph, and the increase
becoming effective under paragraph (2) in such year was accord-
ingly determined on the basis of the wage increase percentage
rather than the CPI increase percentage (or there was no such
increase becoming effective under paragraph (2) in that year
because the wage increase percentage was less than 3 percent),
and
"(ii) for any subsequent calendar year in which an increase
under paragraph (2) becomes effective the OASDI fund ratio is
greater than 32.0 percent,
then each of the amounts described in subdivisions (I), (II), and (III)
of paragraph (2)(AXii), as increased under paragraph (2) effective
with the month of December in such subsequent calendar year, shall
be further increased (effective with such month) by an additional
percentage, which shall be determined under subparagraph (B) and
shall apply as provided in subparagraph (C).
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"(B) The applicable additional percentage by which the amounts
described in subdivisions (I), (II), and (III) of paragraph (2XAXii) are
to be further increased under subparagraph (A) in the subsequent
calendar year involved shall be the amount derived by-
"(i) subtracting (I) the compounded percentage benefit
increases that were actually paid under paragraph (2) and this
paragraph from (II) the compounded percentage benefit
increases that would have been paid if all increases under
paragraph (2) had been made on the basis of the CPI increase
percentage,
"(ii) dividing the difference by the sum of the compounded
percentage in subdivision (I) and 100 percent, and
"(iii) multiplying such quotient by 100 and rounding to the
nearest one-tenth of 1 percent,
with the compounded increases referred to in subdivisions (I) and (II)
being measured-
"(iv) in the case of amounts described in subdivision (I) of
paragraph (2XAXii), over the period beginning with the calendar
year in which monthly benefits described in such subdivision
were first increased on the basis of the wage increase percent-
age and ending with such subsequent calendar year, and
"(v) in the case of amounts described in subdivisions (II) and
(III) of paragraph (2XAXii), over the period beginning with the
calendar year in which the individual whose primary insurance
amount is increased under such subdivision (II) initially became
eligible for an old-age or disability insurance benefit, or died
before becoming so eligible, and ending with such subsequent
calendar year;
except that if the Secretary determines in any case that the applica-
tion (in accordance with subparagraph (C)) of the additional per-
centage as computed under the preceding provisions of this
subparagraph would cause the OASDI fund ratio to fall below 32.0
percent in the calendar year immediately following such subsequent
year, he shall reduce such applicable additional percentage to the
extent necessary to ensure that the OASDI fund ratio will remain at
or above 32.0 percent through the end of such following year.
"(C) Any applicable additional percentage increase in an amount
described in subdivision (I), (II), or (III) of paragraph (2XAXii), made
under this paragraph in any calendar year, shall thereafter be
treated for all the purposes of this Act as a part of the increase made
in such amount under paragraph (2) for that year.".
(d)(1) Section 215(iX2XC) of such Act is amended by adding at the
end thereof the following new clause:
"(iii) The Secretary shall determine and promulgate the OASDI
fund ratio for the current calendar year and the SSA wage index for
the preceding calendar year before November 1 of the current
calendar year, based upon the most recent data then available, and
shall include a statement of such fund ratio and wage index (and of
the effect such ratio and the level of such index may have upon
benefit increases under this subsection) in any notification made
under clause (ii) and any determination published under subpara-
graph (D).".
(2) Section 21504) of such Act (as amended by section 111(c) of
this Act) is further amended by striking out "section 111 (aX6) and
(bX2)" and inserting in lieu thereof "sections 111(a)(6), 111MA and
112".
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97 STAT. 76
42 USC 415 note.
42 USC 401.
42 USC 415 note.
PUBLIC LAW 98-21-APR. 20, 1983
(e) The amendments made by the preceding provisions of this
section shall apply with respect to monthly benefits under title II of
the Social Security Act for months after December 1983.
(f) Notwithstanding anything to the contrary in section 215(i)(1)(F)
of the Social Security Act (as added by subsection (a)(4) of this
section), the combined balance in the Trust Funds which is to be
used in determining the "OASDI fund ratio" with respect to the
calendar year 1984 under such section shall be the estimated com-
bined balance in such Funds as of the close of that year (rather than
as of its beginning), including the taxes transferred under section
201(a) on the first day of the year following that year.
ELIMINATION OF WINDFALL BENEFITS FOR INDIVIDUALS RECEIVING
PENSIONS FROM NONCOVERED EMPLOYMENT
SEC. 113. (a) Section 215(a) of the Social Security Act is amended
by adding at the end thereof the following new paragraph:
"(7)(A) In the case of an individual whose primary insurance
amount would be computed under paragraph (1) of this subsection,
who-
"(i) attains age 62 after 1985 (except where he or she became
entitled to a disability insurance benefit before 1986 and
remained so entitled in any of the 12 months immediately
preceding his or her attainment of age 62), or
"(ii) would attain age 62 after 1985 and becomes eligible for a
disability insurance benefit after 1985,
and who first becomes eligible after 1985 for a monthly periodic
payment (including a payment determined under subparagraph (C),
but excluding a payment under the Railroad Retirement Act of 1974
or 1937) which is based in whole or in part upon his or her earnings
for service which did not constitute `employment' as defined in
section 210 for purposes of this title (hereafter in this paragraph and
in subsection (d)(5) referred to as `noncovered service), the primary
insurance amount of that individual during his or her concurrent
entitlement to such monthly periodic payment and to old-age or
disability insurance benefits shall be computed or recomputed under
subparagraph (B) with respect to the initial month in which the
individual becomes eligible for such benefits.
"(B)(i) If paragraph (1) of this subsection would apply to such an
individual (except for subparagraph (A) of this paragraph), there
shall first be computed an amount equal to the individual s primary
insurance amount under paragraph (1) of this subsection, except
that for purposes of such computation the percentage of the individ-
ual's average indexed monthly earnings established by subpara-
graph (A)(i) of paragraph (1) shall be the percent specified in clause
(ii). There shall then be computed (without regard to this paragraph)
a second amount, which shall be equal to the individual's primary
insurance amount under paragraph (1) of this subsection, except
that such second amount shall be reduced by an amount equal to
one-half of the portion of the monthly periodic payment which is
attributable to noncovered service performed after 1956 (with such
attribution being based on the proportionate number of years of
such noncovered service) and to which the individual is entitled (or
is deemed to be entitled) for the initial month of his or her eligibility
for old-age or disability insurance benefits. The individual's primary
insurance amount shall be the larger of the two amounts computed
under this subparagraph (before the application of subsection (i))
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and shall be deemed to be computed under paragraph (1) of this
subsection for the purpose of applying other provisions of this title.
"(ii) For purposes of clause (i), the percent specified in this clause
is-
"(I) 80.0 percent with respect to individuals who initially
become eligible for old-age or disability insurance benefits in
1986;
"(II) 70.0 percent with respect to individuals who so become
eligible in 1987;
"(III) 60.0 percent with respect to individuals who so become
eligible in 1988;
"(IV) 50.0 percent with respect to individuals who so become
eligible in 1989; and
"(V) 40.0 percent with respect to individuals who so become
eligible in 1990 or thereafter.
"(CXi) Any periodic payment which otherwise meets the require-
ments of subparagraph (A), but which is paid on other than a
monthly basis, shall be allocated on a basis equivalent to a monthly
payment (as determined by the Secretary), and such equivalent
monthly payment shall constitute a monthly periodic payment for
purposes of this paragraph.
"(ii) In the case of an individual who has elected to receive a
periodic payment that has been reduced so as to provide a survivors
benefit to any other individual, the payment shall be deemed to be
increased (for purposes of any computation under this paragraph or
subsection (d)(5)) by the amount of such reduction.
"(iii) If an individual to whom subparagraph (A) applies is eligible
for a periodic payment beginning with a month that is subsequent to
the month in which he or she becomes eligible for old-age or
disability insurance benefits, the amount of that payment (for pur-
poses of subparagraph (B)) shall be deemed to be the amount to
which he or she is, or is deemed to be, entitled (subject to clauses (i),
(ii), and (iv) of this subparagraph) in such subsequent month.
"(iv) For purposes of this paragraph, the term `periodic payment'
includes a payment payable in a lump sum if it is a commutation of,
or a substitute for, periodic payments.
"(D) This paragraph shall not apply in the case of an individual
who has 30 years or more of coverage (as defined in paragraph
(1XCXii)). In the case of an individual who has more than 25 years of
coverage but less than 30 years of coverage (as so defined), the
percent specified in the applicable subdivision of subparagraph
(BXii) shall (if such percent is smaller than the percent specified in
whichever of the following clauses applies) be deemed to be-
"(i) 80 percent, in the case of an individual who has 29 of such
years of coverage;
"(ii) 70 percent, in the case of an individual who has 28 of such
years;
"(iii) 60 percent, in the case of an individual who has 27 of
such years; and
"(iv) 50 percent, in the case of an individual who has 26 of
such years.
"(E) This paragraph shall not apply in the case of an individual
who on January 1, 1984-
"(i) is an employee performing service to which social security
coverage is extended on that date solely by reason of the
amendments made by section 101 of the Social Security Amend-
ments of 1983; or
"Periodic
payment."
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97 STAT. 78 PUBLIC LAW 98-21-APR. 20, 1983
"(ii) is an employee of a nonprofit organization which (on
December 31, 1983) did not have in effect a waiver certificate
under section 3121(k) of the Internal Revenue Code of 1954 and
to the employees of which social security coverage is extended
on that date solely by reason of the amendments made by
section 102 of that Act, unless social security coverage had
previously extended to service performed by such individual as
an employee of that organization under a waiver certificate
which was subsequently (prior to December 31, 1983) termi-
nated.".
(b) Section 215(d) of such Act is amended by adding at the end
thereof the following new paragraph:
"(5) In the case of an individual whose primary insurance amount
is not computed under paragraph (1) of subsection (a) by reason of
paragraph (4)(B)(ii) of that subsection, who-
"(A) attains age 62 after 1985 (except where he or she became
entitled to a disability insurance benefit before 1986, and
remained so entitled in any of the 12 months immediately
preceding his or her attainment of age 62), or
"(B) would attain age 62 after 1985 and becomes eligible for a
disability insurance benefit after 1985,
and who first becomes eligible after 1985 for a monthly periodic
payment (including a payment determined under subsection
(a)(7XC), but excluding a payment under the Railroad Retirement
Act of 1974 or 1937) which is based (in whole or in part) upon his or
her earnings in noncovered service, the primary insurance amount
of such individual during his or her concurrent entitlement to such
monthly periodic payment and to old-age or disability insurance
benefits shall be the primary insurance amount computed or recom-
puted under this subsection (without regard to this paragraph and
before the application of subsection (i)) reduced by an amount equal
to the smaller of-
"(i) one-half of the primary insurance amount (computed
without regard to this paragraph and before the application of
subsection (i)), or
"(ii) one-half of the portion of the monthly periodic payment
(or payment determined under subsection (a)(7XC)) which is
attributable to noncovered service performed after 1956 (with
such attribution being based on the proportionate number of
years of such noncovered service) and to which that individual
is entitled (or is deemed to be entitled) for the initial month of
his or her eligibility for old-age or disability insurance benefits.
This paragraph shall not apply in the case of any individual to
whom subsection (a)(7) would not apply by reason of subparagraph
(E) or the first sentence of subparagraph (D) thereof.".
(c) Section 215(f) of such Act is amended by adding at the end
thereof the following new paragraph:
"(9)(A) In the case of an individual who becomes entitled to a
periodic payment determined under subsection (a)(7XA) (including a
payment determined under subsection (a)(7)(C)) in a month subse-
quent to the first month in which he or she becomes entitled to an
old-age or disability insurance benefit, and whose primary insurance
amount has been computed without regard to either such subsection
or subsection (dX5), such individual's primary insurance amount
shall be recomputed (notwithstanding paragraph (4) of this subsec-
tion), in accordance with either such subsection or subsection (d)(5),
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as may be applicable, effective with the first month of his or her
concurrent entitlement to such benefit and such periodic payment.
"(B) If an individual's primary insurance amount has been com-
puted under subsection (aX7) or (dX5), and it becomes necessary to
recompute that primary insurance amount under this subsection-
"M so as to increase the monthly benefit amount payable with
respect to such primary insurance amount (except in the case of
the individual's death), such increase shall be determined as
though such primary insurance amount had initially been com-
puted without regard to subsection (aX7) or (dX5), or
"(ii) by reason of the individual's death, such primary insur-
ance amount shall be recomputed without regard to (and as
though it had never been computed with regard to) subsection
(aX7) or (dX5).".
(d) Sections 202(eX2) and 20203) of such Act are each amended by
striking out "section 215(0 (5) or (6)" wherever it appears and
inserting in lieu thereof "section 215(0)(5), 215(0)(6), or 215(fx9XB)".
INCREASE IN OLD-AGE INSURANCE BENEFIT AMOUNTS ON ACCOUNT OF
DELAYED RETIREMENT
SEC. 114. (a) Section 202(wX1XA) of the Social Security Act is
amended to read as follows:
"(A) the applicable percentage (as determined under para-
graph (6)) of such amount, multiplied by".
(b) Section 202(w) of such Act is further amended by adding at the
end thereof the following new paragraph:
"(6) For purposes of paragraph (1)(A), the `applicable percentage'
is-
"(A) 1/12 of 1 percent in the case of an individual who first
becomes eligible for an old-age insurance benefit in any calen-
dar year before 1979;
"(B) 1/4 of 1 percent in the case of an individual who first
becomes eligible for an old-age insurance benefit in any calen-
dar year after 1978 and before 1987;
"(C) in the case of an individual who first becomes eligible for
an old-age insurance benefit in a calendar year after 1986 and
before 2005, a percentage equal to the applicable percentage in
effect under this paragraph for persons who first became eligi-
ble for an old-age insurance benefit in the preceding calendar
year (as increased pursuant to this subparagraph), plus 1/24 of 1
percent if the calendar year in which that particular individual
first becomes eligible for such benefit is not evenly divisible by
2; and
"(D) % of 1 percent in the case of an individual who first
becomes eligible for an old-age insurance benefit in a calendar
year after 2004.".
(cX1) Paragraphs (2) (A) and (3) of section 202(w) of such Act are
each amended by striking out "age 72" and inserting in lieu thereof
"age 70".
(2) The amendments made by paragraph (1) shall apply with
respect to increment months in calendar years after 1983.
Effective date.
42 USC 402 note.
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97 STAT. 80 PUBLIC LAW 98-21-APR. 20, 1983
PART C-REVENUE PROVISIONS
SEC. 121. TAXATION OF SOCIAL SECURITY AND TIER 1 RAILROAD RETIRE-
MENT BENEFITS.
(a) GENERAL RuLE.-Part II of subchapter B of chapter 1 of the
Internal Revenue Code of 1954 (relating to amounts specifically
included in gross income) is amended by redesignating section 86 as
section 87 and by inserting after section 85 the following new
section:
26 USC 86. "SEC. 86. SOCIAL SECURITY AND TIER 1 RAILROAD RETIREMENT BENE-
FITS.
"(a) IN GENERAL.-Gross income for the taxable year of any
taxpayer described in subsection (b) includes social security benefits
in an amount equal to the lesser of-
"(1) one-half of the social security benefits received during the
taxable year, or
"(2) one-half of the excess described in subsection (b)(1).
"(b) TAXPAYERS TO WHOM SUBSECTION (a) APPLIES.-
"(1) IN GENERAL.-A taxpayer is described in this subsection
if-
"(A) the sum of-
"(i) the modified adjusted gross income of the taxpay-
er for the taxable year, plus
"(ii) one-half of the social security benefits received
during the taxable year, exceeds
"(B) the base amount.
"(2) MODIFIED ADJUSTED GROSS INCOME.-For purposes of this
subsection, the term `modified adjusted gross income' means
adusted gross income-
"(A) determined without regard to this section and sec-
26 USC 221, 911, tions 221, 911, 931, and 933, and
931, 933. "(B) increased by the amount of interest received or
accrued by the taxpayer during the taxable year which is
exempt from tax.
"(c) BASE AMOUNT.-For purposes of this section, the term `base
amount' means-
"(1) except as otherwise provided in this subsection, $25,000,
"(2) $32,000, in the case of a joint return, and
"(3) zero, in the case of a taxpayer who-
"(A) is married at the close of the taxable year (within the
26 USC 143. meaning of section 143) but does not file a joint return for
such year, and
"(B) does not live apart from his spouse at all times
during the taxable year.
"(d) SOCIAL SECURITY BENEFIT.-
"(1) IN GENERAL.-For purposes of this section, the term
`social security benefit' means any amount received by the
taxpayer by reason of entitlement to-
"(A) a monthly benefit under title II of the Social Secu-
42 USC 401. rity Act, or
"(B) a tier 1 railroad retirement benefit.
For purposes of the preceding sentence, the amount received by
any taxpayer shall be determined as if the Social Security Act
42 USC 403. did not contain section 203(i) thereof.
"(2) ADJUSTMENT FOR REPAYMENTS DURING YEAR.-
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"(A) IN GENERAL.-For purposes of this section, the
amount of social security benefits received during any tax-
able year shall be reduced by any repayment made by the
taxpayer during the taxable year of a social security benefit
previously received by the taxpayer (whether or not such
benefit was received during the taxable year).
"(B) DENIAL OF DEDUCTION.-If (but for this subpara-
graph) any portion of the repayments referred to in subpar-
agraph (A) would have been allowable as a deduction for
the taxable year under section 165, such portion shall be
allowable as a deduction only to the extent it exceeds the
social security benefits received by the taxpayer during the
taxable year (and not repaid during such taxable year).
"(3) WORKMEN'S COMPENSATION BENEFITS SUBSTITUTED FOR
SOCIAL SECURITY BENEFITS.-For purposes of this section, if, by
reason of section 224 of the Social Security Act (or by reason of
section 3(a)(1) of the Railroad Retirement Act of 1974), any
social security benefit is reduced by reason of the receipt of a
benefit under a workmen's compensation act, the term `social
security benefit' includes that portion of such benefit received
under the workmen's compensation act which equals such re-
duction.
"(4) TIER 1 RAILROAD RETIREMENT BENEFIT.-For purposes of
paragraph (1), the term `tier 1 railroad retirement benefit'
means a monthly benefit under section 3(a), 4(a), or 4(f) of the
Railroad Retirement Act of 1974.
"(e) LIMITATION ON AMOUNT INCLUDED WHERE TAXPAYER RECEIVES
LUMP-SUM PAYMENT.-
"(1) LIMITATION.-If-
"(A) any portion of a lump-sum payment of social security
benefits received during the taxable year is attributable to
prior taxable years, and
"(B) the taxpayer makes an election under this subsection
for the taxable year,
then the amount included in gross income under this section for
the taxable year by reason of the receipt of such portion shall
not exceed the sum of the increases in gross income under this
chapter for prior taxable years which would result solely from
taking into account such portion in the taxable years to which it
is attributable.
"(2) SPECIAL RULES.-
"(A) YEAR TO WHICH BENEFIT ATTRIBUTABLE.-For pur-
poses of this subsection, a social security benefit is attribut-
able to a taxable year if the generally applicable payment
date for such benefit occurred during such taxable year.
"(B) ELECTION.-An election under this subsection shall
be made at such time and in such manner as the Secretary
shall by regulations prescribe. Such election, once made,
may be revoked only with the consent of the Secretary.
"(f) TREATMENT AS PENSION OR ANNUITY FOR CERTAIN PURPOSES.-
For purposes of-
"(1) section 4302) (defining earned income),
"(2) section 21901) (defining compensation),
"(3) section 221(bX2) (defining earned income), and
"(4) section 911(bXl) (defining foreign earned income),
any social security benefit shall be treated as an amount received as
a pension or annuity.
42 USC 424a.
45 USC 231b.
45 USC 231b,
231c.
26 USC 43.
26 USC 219.
26 USC 221.
26 USC 911.
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(b) INFORMATION REPORTING.-Subpart B of part III of subchapter
A of chapter 61 of such Code (relating to information concerning
transactions with other persons) is amended by adding at the end
thereof the following new section:
26 USC 6050F. "SEC. 6050F. RETURNS RELATING TO SOCIAL SECURITY BENEFITS.
"(a) REQUIREMENT OF REPORTING.-The appropriate Federal offi-
cial shall make a return, according to the forms and regulations
prescribed by the Secretary, setting forth-
"(1) the-
"(A) aggregate amount of social security benefits paid
with respect to any individual during any calendar year,
"(B) aggregate amount of social security benefits repaid
by such individual during such calendar year, and
"(C) aggregate reductions under section 224 of the Social
42 USC 424a. Security Act (or under section 3(a)(1) of the Railroad Retire-
45 USC 231b. ment Act of 1974) in benefits which would otherwise have
been paid to such individual during the calendar year on
account of amounts received under a workmen's compensa-
tion act, and
"(2) the name and address of such individual.
"(b) STATEMENTS To BE FURNISHED To INDIVIDUALS WITH RESPECT
To WHOM INFORMATION Is FURNISHED.-Every person making a
return under subsection (a) shall furnish to each individual whose
name is set forth in such return a written statement showing-
"(1) the name of the agency making the payments, and
"(2) the aggregate amount of payments, of repayments, and of
reductions, with respect to the individual as shown on such
return.
The written statement required under the preceding sentence shall
be furnished to the individual on or before January 31 of the year
following the calendar year for which the return under subsection
(a) was made.
"(c) DEFINITIONS.-For purposes of this section-
"(1) APPROPRIATE FEDERAL OFFICIAL.-The term `appropriate
Federal official' means-
"(A) the Secretary of Health and Human Services in the
case of social security benefits described in section
86(d)(1)(A), and
"(B) the Railroad Retirement Board in the case of social
Ante, P. 80. security benefits described in section 86(dX1XB).
"(2) SOCIAL SECURITY BENEFIT.-The term `social security bene-
fit' has the meaning given to such term by section 86(d)(1)."
(c) TREATMENT OF NONRESIDENT ALIENS.-
(1) AMENDMENT OF SECTION 871 (a).-Subsection (a) of section
26 USC 871. 871 of such Code (relating to tax on income not connected with
United States business) is amended by adding at the end thereof
the following new paragraph:
"(3) TAXATION OF SOCIAL SECURITY BENEFITS.-For purposes of
this section and section 1441-
"(A) one-half of any social security benefit (as defined in
section 86(d)) shall be included in gross income, and
"(B) section 86 shall not apply."
26 USC 1441. (2) AMENDMENT OF SECTION 1441.-Section 1441 of such Code
(relating to withholding of tax on nonresident aliens) is
amended by adding at the end thereof the following new subsec-
tion:
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"(g) CROSS REFERENCE.-
"For provision treating one-half of social security benefits as subject to
withholding under this section, see section 871(a)(3)."
(3) DISCLOSURE OF INFORMATION TO SOCIAL SECURITY ADMINIS-
TRATION OR RAILROAD RETIREMENT BOARD.-
(A) IN GENERAL.-Subsection (h) of section 6103 of such 26 USC 6103.
Code (relating to disclosure to certain Federal officers and
employees for purposes of tax administration, etc.) is
amended by adding at the end thereof the following new
paragraph:
"(6) WITHHOLDING OF TAX FROM SOCIAL SECURITY BENEFITS.-
Upon written request of the payor agency, the Secretary may
disclose available return information from the master files of
the Internal Revenue Service with respect to the address and
status of an individual as a nonresident alien or as a citizen or
resident of the United States to the Social Security Administra
tion or the Railroad Retirement Board (whichever is appropri-
ate) for purposes of carrying out its responsibilities for
withholding tax under section 1441 from social security benefits 26 USC 1441.
(as defined in section 86(d))." Ante, p. 80.
(B) CONFORMING AMENDMENT.-Paragraph (4) of section
6103(p) of such Code (relating to safeguards) is amended by 26 USC 6103.
inserting "(h)(6)," after "(hx2)," in the material preceding
subparagraph (A) and in subparagraph (F)(ii), thereof.
(C) DISCLOSURE BY FINANCIAL INSTITUTIONS.-Section 1113
of the Right to Financial Privacy Act of 1978 (92 Stat. 3706;
12 U.S.C. 3413) is amended by adding at the end thereof the
following new subsection:
"(kXl) Nothing in this title shall apply to the disclosure by the Information
financial institution of the name and address of any customer to the disclosure.
Department of the Treasury, the Social Security Administration, or
the Railroad Retirement Board, where the disclosure of such infor-
mation is necessary to, and such information is used solely for the
purpose of, the proper administration of section 1441 of the Internal
Revenue Code of 1954, title II of the Social Security Act, or the 26 USC 1441; 42
Railroad Retirement Act of 1974. USC 401; 45 USC
"(2) Notwithstanding any other provision of law, any request 231t.
authorized by paragraph (1) (and the information contained therein)
may be used by the financial institution or its agents solely for the
purpose of providing the customer's name and address to the De-
partment of the Treasury, the Social Security Administration, or the
Railroad Retirement Board and shall be barred from redisclosure by
the financial institution or its agents."
(d) SOCIAL SECURITY BENEFITS TREATED AS UNITED STATES
SOURCED.-Subsection (a) of section 861 of such Code (relating to
26 USC 861.
income from sources within the United States) is amended by adding
at the end thereof the following new paragraph:
"(8) SOCIAL SECURITY BENEFITS.-Any social security benefit
(as defined in section 86(d))."
Ante, p. 80.
(e) TRANSFERS TO TRUST FUNDS.- 42 USC 401 note.
(1) IN GENERAL.-There are hereby appropriated to each
payor fund amounts equivalent to the aggregate increase in tax
liabilities under chapter 1 of the Internal Revenue Code of 1954 26 USC 1 et seq.
which is attributable to the application of sections 86 and Ante, p. 80.
871(aX3) of such Code (as added by this section) to payments
from such payor fund.
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97 STAT. 84 PUBLIC LAW 98-21-APR. 20, 1983
(2) TRANSFERS.-The amounts appropriated by paragraph (1)
to any payor fund shall be transferred from time to time (but
not less frequently than quarterly) from the general fund of the
Treasury on the basis of estimates made by the Secretary of the
Treasury of the amounts referred to in such paragraph. Any
such quarterly payment shall be made on the first day of such
quarter and shall take into account social security benefits
estimated to be received during such quarter. Proper adjust-
ments shall be made in the amounts subsequently transferred
to the extent prior estimates were in excess of or less than the
amounts required to be transferred.
(3) DEFINITIONS.-For purposes of this subsection-
(A) PAYOR FUND.-The term "payor fund" means any
trust fund or account from which payments of social secu-
rity benefits are made.
(B) SOCIAL SECURITY BENEFITS.-The term "social security
benefits" has the meaning given such term by section
Ante, p. 80. 86(d)(1) of the Internal Revenue Code of 1954.
(4) REPORTS.-The Secretary of the Treasury shall submit
annual reports to the Congress and to the Secretary of Health
and Human Services and the Railroad Retirement Board on-
(A) the transfers made under this subsection during the
year, and the methodology used in determining the amount
of such transfers and the funds or account to which made,
and
(B) the anticipated operation of this subsection during the
next 5 years.
(f) TECHNICAL AMENDMENTS.-
26 USC 85. (1) Subsection (a) of section 85 of such Code is amended by
striking out "this section," and inserting in lieu thereof "this
section, section 86,".
96 Stat. 2375. (2) Subparagraph (B) of section 128(c)(3) of such Code (as in
26 USC 128. effect for taxable years beginning after December 31, 1984) is
amended by striking out "85," and inserting in lieu thereof "85,
86,".
(3) The table of sections for part II of subchapter B of chapter
1 of such Code is amended by striking out the item relating to
section 86 and inserting in lieu thereof the following:
"Sec. 86. Social security and tier 1 railroad retirement benefits.
"Sec. 87. Alcohol fuel credit."
(4) The table of sections for subpart B of part III of subchapter
A of chapter 61 of such Code is amended by adding at the end
thereof the following new item:
"Sec. 6050F. Returns relating to social security benefits."
26 USC 86 note. (g) EFFECTIVE DATES.-
(1) IN GENERAL.-Except as provided in paragraph (2), the
amendments made by this section shall apply to benefits re-
ceived after December 31, 1983, in taxable years ending after
such date.
(2) TREATMENT OF CERTAIN LUMP-SUM PAYMENTS RECEIVED
AFTER DECEMBER 31, 1983.-The amendments made by this sec-
tion shall not apply to any portion of a lump-sum payment of
social security benefits (as defined in section 86(d) of the Inter-
Ante, p. 80. nal Revenue Code of 1954) received after December 31, 1983, if
the generally applicable payment date for such portion was
before January 1, 1984.
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PUBLIC LAW 98-21-APR. 20, 1983 97 STAT. 85
SEC. 122. CREDIT FOR THE ELDERLY AND THE PERMANENTLY AND
TOTALLY DISABLED.
(a) GENERAL RuLE.-Section 37 of the Internal Revenue Code of
1954 (relating to credit for the elderly) is amended to read as follows:
"SEC. 37. CREDIT FOR THE ELDERLY AND THE PERMANENTLY AND
TOTALLY DISABLED.
"(a) GENERAL RuLE.-In the case of a qualified individual, there
shall be allowed as a credit against the tax imposed by this chapter
for the taxable year an amount equal to 15 percent of such individ-
ual's section 37 amount for such taxable year.
"(b) QUALIFIED INDIVmuAL.-For purposes of this section, the term
`qualified individual' means any indivi -
(1) who has attained age 65 before the close of the taxable
year, or
"(2) who retired on disability before the close of the taxable
year bled who, when he retired, was permanently and totally
"(c) SECTION 37 AMOUNT.-Forpurposes of subsection (a)-
"(1) IN GENERAL.-An individual's section 37 amount for the
taxable year shall be the applicable initial amount determined
under paragraph (2), reduced as provided in paragraph (3) and
in subsection (d).
"(2) INITIAL AMOUNT-
"(A) IN GENERAL.-Except as provided in subparagraph
(B), the initial amount shall be-
"(i) $5,000 in the case of a single individual, or a joint
return where only one spouse is a qualified individual,
"(ii) $7,500 in the case of a joint return where both
spouses are qualified individuals, or
"(iii) $3,750 in the case of a married individual filing
a separate return.
"(B) LIMITATION IN CASE OF INDIVIDUALS WHO HAVE NOT
ATTAINED AGE 65.-
"(i) IN GENERAL.-In the case of a qualified individual
who has not attained age 65 before the close of the
taxable year, except as provided in clause (ii), the
initial amount shall not exceed the disability income
for the taxable year.
"(ii) SPECIAL RULES IN CASE OF JOINT RETURN -In the
case of a joint return where both spouses are qualified
individuals and at least one spouse has not attained age
65 before the close of the taxable year-
"(I) if both spouses have not attained age 65
before the close of the taxable year, the initial
amount shall not exceed the sum of such spouses'
disability income, or
"(II) If one spouse has attained age 65 before the
close of the taxable year, the initial amount shall
not exceed the sum of $5,000 plus the disability
income for the taxable year of the spouse who has
not attained age 65 before the close of the taxable
year.
"(iii) DISABILITY INCOME.-For purposes of this sub-
paragraph, the term `disability income' means the ag-
gregate amount includable in the gross income of the
individual for the taxable year under section 72 or
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97 STAT. 86 PUBLIC LAW 98-21-APR. 20, 1983
26 USC 105. 105(a) to the extent such amount constitutes wages (or
payments in lieu of wages) for the period during which
the individual is absent from work on account of per-
manent and total disability.
"(3) REDUCTION.-
"(A) IN GENERAL.-The reduction under this paragraph is
an amount equal to the sum of the amounts received by the
individual (or, in the case of a joint return, by either spouse)
as a pension or annuity or as a disability benefit-
"G) which is excluded from gross income and payable
under-
42 USC 401. "(I) title II of the Social Security Act,
45 USC 231t. "(II) the Railroad Retirement Act of 1974, or
"(III) a law administered by the Veterans' Ad-
ministration, or
"(ii) which is excluded from gross income under any
provision of law not contained in this title.
No reduction shall be made under clause (i)(III) for any
26 USC 104. amount described in section 104(a)(4).
"(B) TREATMENT OF CERTAIN WORKMEN'S COMPENSATION
BENEFITS.-For purposes of subparagraph (A), any amount
treated as a social security benefit under section 86(d)(3)
shall be treated as a disability benefit received under title II
of the Social Security Act.
"(d) LIMITATIONS.-
"(1) ADJUSTED GROSS INCOME LIMITATION.-If the adjusted
gross income of the taxpayer exceeds-
"(A) $7,500 in the case of a single individual,
"(B) $10,000 in the case of a joint return, or
"(C) $5,000 in the case of a married individual filing a
separate return,
the section 37 amount shall be reduced by one-half of the excess
of the adjusted gross income over $7,500, $10,000, or $5,000, as
the case may be.
"(2) LIMITATION BASED ON AMOUNT OF TAX.-The amount of
the credit allowed by this section for the taxable year shall not
exceed the amount of the tax imposed by this chapter for such
taxable year.
"(e) DEFINITIONS AND SPECIAL RULES.-For purposes of this sec-
tion-
"(1) MARRIED COUPLE MUST FILE JOINT RETURN.-Except in the
case of a husband and wife who live apart at all times during
the taxable year, if the taxpayer is married at the close of the
taxable year, the credit provided by this section shall be allowed
only if the taxpayer and his spouse file a joint return for the
taxable year.
"(2) MARITAL STATUS.-Marital status shall be determined
26 USC 143. under section 143.
"(3) PERMANENT AND TOTAL DISABILITY DEFINED.-An individ-
ual is permanently and totally disabled if he is unable to engage
in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be
expected to result in death or which has lasted or can be
expected to last for a continuous period of not less than 12
months. An individual shall not be considered to be perma-
nently and totally disabled unless he furnishes proof of the
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PUBLIC LAW 98-21-APR. 20, 1983 97 STAT. 87
existence thereof in such form and manner, and at such times,
as the Secretary may require.
"(f) NONRESIDENT ALIEN INELIGIBLE FOR CREDIT.-NO credit shall
be allowed under this section to any nonresident alien."
(b) REPEAL OF EXCLUSION FOR CERTAIN DISABILITY PAYMENTS.-
Subsection (d) of section 105 of such Code (relating to certain disabil-
ity payments) is hereby repealed.
(C) CONFORMING AMENDMENTS.-
(1) Sections 41(bX2), 44A(bX2), 46(aX4XB), 53(aX2), and 904(g) of
such Code are each amended by striking out "relating to credit
for the elderly" and inserting in lieu thereof "relating to credit
for the elderly and the permanently and totally disabled".
(2) Subsection (a) of section 85 of such Code is amended by
striking out ", section 105(d),".
(3) Subparagraph (B) of section 128(cX3) of such Code (as in
effect for taxable years beginning after December 31, 1984) is
amended by striking out "105(d),".
(4) Paragraph (3) of section 403(b) of such Code is amended by
striking out "sections 105(d) and 911" and inserting in lieu
thereof "section 911".
(5) Clause (i) of section 415(cX3XC) of such Code is amended by
striking out "section 105(dX4)" and inserting in lieu thereof
"section 37(eX3)".
(6) Paragraph (6) of section 7871(a) of such Code is amended by
striking out subparagraph (A), and by redesignating subpara-
graphs (B), (C), and (D) as subparagraphs (A), (B), and (C),
respectively.
(7) The table of sections for subpart A of part IV of subchapter
A of chapter 1 of such Code is amended by striking out the item
relating to section 37 and inserting in lieu thereof the following:
"Sec. 37. Credit for the elderly and the permanently and totally disabled."
(d) EFFECTIVE DATE.-
(1) IN GENERAL.-The amendments made by this section shall
apply to taxable years beginning after December 31, 1983.
(2) TRANSITIONAL RULE.-If an individual's annuity starting
date was deferred under section 105(dX6) of the Internal Reve-
nue Code of 1954 (as in effect on the day before the date of the
enactment of this section), such deferral shall end on the first
day of such individual's first taxable year beginning after De-
cember 31, 1983.
SEC. 123. ACCELERATION OF INCREASES IN FICA TAXES; 1984 EMPLOYEE
TAX CREDIT.
(a) ACCELERATION OF INCREASES IN FICA TAxFs.-
(1) TAX ON EMPLOYEES.-Subsection (a) of section 3101 of the
26 USC 41, 44A,
46, 53, 904.
96 Stat. 2375.
26 USC 128.
96 Stat. 532.
26 USC 415.
96 Stat. 2608.
26 USC 7871.
Internal Revenue Code of 1954 (relating to rate of tax on 26 USC 3101.
employees for old-age, survivors, and disability insurance) is
amended by striking out paragraphs (1) through (7) and insert-
ing in lieu thereof the following:
"In cases of wages The rate
received during: shall be:
1984, 1985, 1986, or 1987 ....................... 5.7 percent
1988 or 1989 ............................................ 6.06 percent
1990 or thereafter .................................. 6.2 percent."
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26 USC 3111. (2) EMPLOYER TAx.-Subsection (a) of section 3111 of such Code
is amended by striking out paragraphs (1) through (7) and
inserting in lieu thereof the following:
"In cases of wages The rate
paid during: shall be:
1984, 1985, 1986, or 1987 ....................... 5.7 percent
1988 or 1989 ............................................ 6.06 percent
1990 or thereafter .................................. 6.2 percent."
26 USC 3101 (3) EFFECTIVE DATE.-The amendments made by this subsec-
note. tion shall apply to remuneration paid after December 31, 1983.
(b) 1984 EMPLOYEE TAX CREDIT.-
(1) IN GENERAL.-Chapter 25 of such Code is amended by
adding at the end thereof the following new section:
26 USC 3510. "SEC. 3510. CREDIT FOR INCREASED SOCIAL SECURITY EMPLOYEE TAXES
AND RAILROAD RETIREMENT TIER I EMPLOYEE TAXES IM-
POSED DURING 1984.
"(a) GENERAL RULE.-There shall be allowed as a credit against
the tax imposed by section 3101(a) on wages received during 1984 an
amount equal to 3/1 o of 1 percent of the wages so received.
"(b) TIME CREDIT ALLOWED.-The credit under subsection (a) shall
be taken into account in determining the amount of the tax
deducted under section 3102(a).
"(c) WAGES.-For purposes of this section, the term `wages' has the
meaning given to such term by section 3121(a).
"(d) APPLICATION TO AGREEMENTS UNDER SECTION 218 OF THE
42 USC 418. SOCIAL SECURITY ACT.-For purposes of determining amounts equiv-
alent to the tax imposed by section 3101(a) with respect to remu-
neration which-
"(1) is covered by an agreement under section 218 of the
Social Security Act, and
"(2) is paid during 1984,
the credit allowed by subsection (a) shall be taken into account. A
similar rule shall also apply in the case of an agreement under
section 3121(1).
"(e) CREDIT AGAINST RAILROAD RETIREMENT EMPLOYEE AND EM-
PLOYEE REPRESENTATIVE TAXES.-
"(1) IN GENERAL.-There shall be allowed as a credit against
the taxes imposed by sections 3201(a) and 3211(a) on compensa-
tion paid during 1984 and subject to such taxes at rates deter-
mined by reference to section 3101 an amount equal to 3/i o of 1
percent of such compensation.
"(2) TIME CREDIT ALLOWED.-The credit under paragraph (1)
shall be taken into account in determining the amount of the
tax deducted under section 3202(a) (or the amount of the tax
under section 3211(a)).
"(3) COMPENSATION.-For purposes of this subsection, the
term `compensation' has the meaning given to such term by
section 3231(e).
"(f) COORDINATION WITH SECTION 6413(c).-For purposes of subsec-
tion (c) of section 6413, in determining the amount of the tax
imposed by section 3101 or 3201, any credit allowed by this section
shall be taken into account."
(2) CLERICAL AMENDMENT.-The table of sections for chapter
25 of such Code is amended by adding at the end thereof the
following new item:
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PUBLIC LAW 98-21-APR. 20, 1983 97 STAT. 89
"Sec. 3510. Credit for increased social security employee taxes and railroad
retirement tier 1 employee taxes imposed during 1984."
(3) EFFECTIVE DATE.-The amendments made by this subset- 26 USC 3510
tion shall apply to remuneration paid during 1984. note.
(4) DEPOSITS IN SOCIAL SECURITY TRUST FUNDS.-FOr purposes 42 USC 418 note.
of subsection (h) of section 218 of the Social Security Act (relat- 42 USC 418.
ing to deposits in social security trust funds of amounts received
under section 218 agreements), amounts allowed as a credit
pursuant to subsection (d) of section 3510 of the Internal Reve-
nue Code of 1954 (relating to credit for remuneration paid Ante. P. 88.
during 1984 which is covered under an agreement under section
218 of the Social Security Act) shall be treated as amounts
received under such an agreement.
(5) DEPOSITS IN RAILROAD RETIREMENT ACCOUNT.-For purposes 45 USC 231n
of subsection (a) of section 15 of the Railroad Retirement Act of nom.
1974, amounts allowed as a credit under subsection (e) of section 45 USC 231n.
3510 of the Internal Revenue Code of 1954 shall be treated as
amounts covered into the Treasury under subsection (a) of
section 3201 of such Code.
SEC. 124. TAXES ON SELF-EMPLOYMENT INCOME; CREDIT AGAINST SUCH
TAXES FOR YEARS BEFORE 1990; DEDUCTION OF SUCH TAXES
FOR YEARS AFTER 1989.
(a) INCREASE IN RATEs.-Subsections (a) and (b) of section 1401 of
the Internal Revenue Code of 1954 (relating to rates of tax on self- 26 USC 1401.
employment income) are amended to read as follows:
"(a) OLD-AGE, SURVIVORS, AND DISABILITY INSURANCE.-In addition
to other taxes, there shall be imposed for each taxable year, on the
self-employment income of every individual, a tax equal to the
following percent of the amount of the self-employment income for
such taxable year:
"In the case of a taxable year
Beginning after. And before: Percent:
December 31, 1983......... January 1, 1988 ................................................. 11.40
December 31, 1987......... January 1, 1990 ................................................. 12.12
December 31, 1989 ........................................................................................... 12.40
"(b) HOSPITAL INSURANCE.-In addition to the tax imposed by the
preceding subsection, there shall be imposed for each taxable year,
on the self-employment income of every individual, a tax equal to
the following percent of the amount of the self-employment income
for such taxable year:
"In the case of a taxable year
Beginning after. And before: Percent:
December 31, 1983......... January 1, 1985 ................................................. 2.60
December 31, 1984......... January 1, 1986 ................................................. 2.70
December 31, 1985 ........................................................................................... 2.90."
(b) CREDIT FOR YEARS BEFORE 1990 AGAINST SELF-EMPLOYMENT
TAxES.-Section 1401 of such Code is amended by redesignating
subsection (c) as subsection (d) and by inserting after subsection (b)
the following new subsection:
"(C) CREDIT AGAINST TAXES IMPOSED BY THIS SECTION.-
"(1) IN GENERAL.-In the case of a taxable year beginning
before 1990, there shall be allowed as a credit against the taxes
imposed by this section for any taxable year an amount equal to
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97 STAT. 90 PUBLIC LAW 98-21-APR. 20, 1983
the applicable percentage of the self-employment income of the
individual for such taxable year.
"(2) APPLICABLE PERCENTAGE.-For purposes of paragraph (1),
the applicable percentage shall be determined in accordance
with the following table:
"In the case of taxable The applicable
years beginning in:
.........................................................................percentag2e 7 s:
1984 ...............................
1985 .......................................................................................................................... 2.3
1986, 1987, 1988, or 1989 ...................................................................................... 2.0.,,
(c) ALLOWANCE OF DEDUCTION FOR YEARS AFTER 1989 FOR ONE-
HALF OF TAXES ON SELF-EMPLOYMENT INCOME.-
26 USC 164. (1) IN GENERAL.-Section 164 of such Code (relating to deduc-
tion for taxes) is amended by redesignating subsection (f) as
subsection (g) and by inserting after subsection (e) the following
new subsection:
"(f) DEDUCTION FOR ONE-HALF OF SELF-EMPLOYMENT TAXES.-
"(1) IN GENERAL.-In the case of an individual, in addition to
the taxes described in subsection (a), there shall be allowed as a
deduction for the taxable year an amount equal to one-half of
the taxes imposed by section 1401 for such taxable year.
"(2) DEDUCTION TREATED AS ATTRIBUTABLE TO TRADE OR BUSI-
NESS.-For purposes of this chapter, the deduction allowed by
paragraph (1) shall be treated as attributable to a trade or
business carried on by the taxpayer which does not consist of
the performance of services by the taxpayer as an employee."
(2) ALTERNATIVE DEDUCTION ALLOWED IN COMPUTING SELF-EM-
26 USC 1402. PLOYMENT TAXES.-Subsection (a) of section 1402 of such Code
(defining net earnings from self-employment) is amended by
striking out "and" at the end of paragraph (11), by redes-
ignating paragraph (12) as paragraph (13), and by inserting
after paragraph (11) the following new paragraph:
"(12) in lieu of the deduction provided by section 164(f) (relat-
ing to deduction for one-half of self-employment taxes), there
shall be allowed a deduction equal to the product of-
"(A) the taxpayer's net earnings from self-employment
for the taxable year (determined without regard to this
paragraph), and
"(B) one-half of the sum of the rates imposed by subsec-
tions (a) and (b) of section 1401 for such year; and".
(3) CONFORMING AMENDMENT TO SOCIAL SECURITY ACT.-Sub-
42 USC 411. section (a) of section 211 of the Social Security Act is amended
by striking out "and" at the end of paragraph (10), by redes-
ignating paragraph (11) as paragraph (12), and by inserting
after paragraph (10) the following new paragraph:
"(11) In lieu of the deduction provided by section 164(f) of the
Internal Revenue Code of 1954 (relating to deduction for one-
half of self-employment taxes), there shall be allowed a deduc-
tion equal to the product of-
"(A) the taxpayer's net earnings from self-employment
for the taxable year (determined without regard to this
paragraph), and
"(B) one-half of the sum of the rates imposed by subsec-
tions (a) and (b) of section 1401 of such Code for such year;
and".
Supra. (4) SECTION 164 (F) DEDUCTION TAKEN INTO ACCOUNT IN COM-
PUTING EARNED INCOME.-
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(A) Subparagraph (A) of section 401(cX2) of such Code
(defining earned income) is amended by striking out "and"
at the end of clause (iv), by striking out the period at the
end of clause (v) and inserting in lieu thereof ", and", and
by inserting after clause (v) the following new clause:
"(vi) with regard to the deduction allowed to the
taxpayer by section 164(0."
(B) Clause (ii) of section 43(cX2XA) of such Code is
amended by inserting before the period ", but such net
earnings shall be determined with regard to the deduction
allowed to the taxpayer by section 164(0".
(5) CONFORMING AMENDMENT.-Subsection (a) of section 275 of
such Code (relating to denial of deduction for certain taxes) is
amended by adding at the end thereof the following new sen-
tence:
"Paragraph (1) shall not apply to any taxes to the extent such taxes
are allowable as a deduction under section 164(0."
(d) EFFECTIVE DATES.-
(1) IN GENERAL.-Except as provided in paragraph (2), the
amendments made by this section shall apply to taxable years
beginning after December 31, 1983.
(2) SUBSECTION (c).-The amendments made by subsection (c)
shall apply to taxable years beginning after December 31, 1989.
SEC. 125. TREATMENT OF CERTAIN FACULTY PRACTICE PLANS.
(a) GENERAL RULE.-For purposes of subsection (s) of section 3121
of the Internal Revenue Code of 1954 (relating to concurrent employ-
ment by 2 or more employers)-
(1) the following entities shall be deemed to be related corpo-
rations:
(A) a State university which employs health professionals
as faculty members at a medical school, and
(B) a faculty practice plan described in section 501(cX3) of
such Code and exempt from tax under section 501(a) of such
Code-
(i) which employs faculty members of such medical
school, and
(ii) 30 percent or more of the employees of which are
concurrently employed by such medical school; and
(2) remuneration which is disbursed by such faculty practice
plan to a health professional employed by both such entities
shall be deemed to have been actually disbursed by such univer-
sity as a common paymaster and not to have been actually
disbursed by such faculty practice plan.
(b) EFFECTIVE DATE.-The provisions of subsection (a) shall apply
to remuneration paid after December 31, 1983.
SEC. 126. (a) Section 201(bXl) of the Social Security Act is amended
by striking out clauses (K) through (M) and inserting in lieu thereof
the following: "(K) 1.65 per centum of the wages (as so defined) paid
after December 31, 1981, and before January 1, 1983, and so
reported, (L) 1.25 per centum of the wages (as so defined) paid after
December 31, 1982, and before January 1, 1984, and so reported, (M)
1.00 per centum of the wages (as so defined) paid after December 31,
1983, and before January 1, 1988, and so reported, (N) 1.06 per
96 Stat. 513.
26 USC401.
Ante, p. 90.
26 USC 43.
26 USC 1401
note.
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centum of the wages (as so defined) paid after December 31, 1987,
and before January 1, 1990, and so reported, (0) 1.20 per centum of
the wages (as so defined) paid after December 31, 1989, and before
January 1, 2000, and so reported, and (P) 1.42 per centum of the
wages (as so defined) paid after December 31, 1999, and so
reported,".
42 Usc 401. (b) Section 201(b)(2) of such Act is amended by striking out clauses
(K) through (M) and inserting in lieu thereof the following: "(K)
1.2375 per centum of the amount of self-employment income (as so
defined) so reported for any taxable year beginning after December
31, 1981, and before January 1, 1983, (L) 0.9375 per centum of the
amount of self-employment income (as so defined) so reported for
any taxable year beginning after December 31, 1982, and before
January 1, 1984, (M) 1.00 per centum of the amount of self-employ-
ment income (as so defined) so reported for any taxable year begin-
ning after December 31, 1983, and before January 1, 1988, (N) 1.06
per centum of the self-employment income (as so defined) so
reported for any taxable year beginning after December 31, 1987,
and before January 1, 1990, (0) 1.20 per centum of the amount of
self-employment income (as so defined) so reported for any taxable
year beginning after December 31, 1989, and before January 1, 2000,
and (P) 1.42 per centum of the self-employment income (as so
defined) so reported for any taxable year beginning after December
31, 1999,".
PART D-BENEFITS FOR CERTAIN SURVIVING, DIVORCED, AND
DISABLED SPOUSES
BENEFITS FOR SURVIVING DIVORCED SPOUSES AND DISABLED WIDOWS
AND WIDOWERS WHO REMARRY
SEC. 131. (a)(1) Section 202(e)(3) of the Social Security Act is
repealed.
(2) Section 202(e)(4) of such Act is amended to read as follows:
"(4) For purposes of paragraph (1), if-
"(A) a widow or surviving divorced wife marries after attain-
ing age 60 (or after attaining age 50 if she was entitled before
such marriage occurred to benefits based on disability under
this subsection), or
"(B) a disabled widow or disabled surviving divorced wife
described in paragraph (1)(B)(ii) marries after attaining age 50,
such marriage shall be deemed not to have occurred.".
(3)(A) Section 202(e) of such Act is further amended by redes-
ignating paragraph (4) (as amended by paragraph (2) of this subsec-
tion), and paragraphs (5) through (8), as paragraphs (3) through (7),
respectively.
(B) Section 202(e)(1)(BXii) of such Act is amended by striking out
"(5)" and inserting in lieu thereof "(4)".
(C) Section 202(e)(1)(F) of such Act is amended by striking out "(6)"
in clause (i) and "(5)" in clause (ii) and inserting in lieu thereof "(5)"
and "(4)", respectively.
(D) Section 202(e)(2)(A) of such Act is amended by striking out
"(8)" and inserting in lieu thereof "(7)".
(E) The paragraph of section 202(e) of such Act redesignated as
paragraph (5) by subparagraph (A) of this paragraph is amended by
striking out "(5)" and inserting in lieu thereof "(4)".
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(F) The paragraph of such section 202(e) redesignated as para-
graph (7) by subparagraph (A) of this paragraph is amended by
striking out "(4)" and inserting in lieu thereof "(3)".
(G) Section 202(k) of such Act is amended by striking out "(eX4)"
each place it appears in paragraphs (2XB) and (3XB) and inserting in
lieu thereof "(eX3)".
(H) Section 226(eX1XA) of such Act is amended by striking out
"202(eX5)" and inserting in lieu thereof "202(eX4)".
(bXl) Section 202(0)(4) of such Act is repealed.
(2) Section 20205) of such Act is amended to read as follows:
"(5) For purposes of paragraph (1), if-
"(A) a widower marries after attaining age 60 (or after attain-
ing age 50 if he was entitled before such marriage occurred to
benefits based on disability under this subsection), or
"(B) a disabled widower described in paragraph (1XBXii) mar-
ries after attaining age 50,
such marriage shall be deemed not to have occurred.".
(3)(A) Section 202(0) of such Act is further amended by redes-
ignating paragraph (5) (as amended by paragraph (2) of this subsec-
tion), and paragraphs (6) through (8), as paragraphs (4) through (7),
respectively.
(B) Section 202(f(1XBXii) of such Act is amended by striking out
"(6)" and inserting in lieu thereof "(5)".
(C) Section 202(0)(1XF) of such Act is amended by striking out "(7)"
in clause (i) and "(6)" in clause (ii) and inserting in lieu thereof "(6)"
and "(5)", respectively.
(D) Section 202(f)(2XA) of such Act is amended by striking out "(5)"
and inserting in lieu thereof "(4)".
(E) The paragraph of section 202(0 of such Act redesignated as
paragraph (6) by subparagraph (A) of this paragraph is amended by
striking out "(6)" and inserting in lieu thereof "(5)".
(F) Section 202(k) of such Act is amended by striking out "(01(5)"
each place it appears in paragraphs (2XB) and (3XB) and inserting in
lieu thereof "(0)(4)".
(G) Section 226(eXl)(A) of such Act is amended by striking out
"202(0(6)" and inserting in lieu thereof "202(f)(5)".
(c)(1) Section 202(sX2) of such Act is amended by striking out
"Subsection ()(4), and so much of subsections (bX3), (dX5), (eX3),
(gX3), and (hX4)" and inserting in lieu thereof "So much of subsec-
tions (b)(3), (dX5), (gX3), and (hX4)".
(2) Section 202(sX3) of such Act is amended by striking out "(eX3),".
(dX1) The amendments made by this section shall be effective with
respect to monthly benefits payable under title II of the Social
Security Act for months after December 1983.
(2) In the case of an individual who was not entitled to a monthly
benefit of the type involved under title II of such Act for December
1983, no benefit shall be paid under such title by reason of such
amendments unless proper application for such benefit is made.
ENTITLEMENT TO DIVORCED SPOUSE'S BENEFITS WITHOUT REGARD TO
ENTITLEMENT OF INSURED INDIVIDUAL TO BENEFITS; EXEMPTION OF
DIVORCED SPOUSE'S BENEFITS FROM DEDUCTION ON ACCOUNT OF
WORK
SEC. 132. (a) Section 202(b) of the Social Security Act is amended
by adding at the end thereof the following new paragraph:
Effective date.
42 USC 402 note.
42 USC 401.
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"(5MA) Notwithstanding the preceding provisions of this subsec-
tion, except as provided in subparagraph (B), the divorced wife of an
individual who is not entitled to old-age or disability insurance
benefits, but who has attained age 62 and is a fully insured indi-
42 USC 414. vidual (as defined in section 214), if such divorced wife-
"(D meets the requirements of subparagraphs (A) through (D)
of paragraph (1), and
`(ii) has been divorced from such insured individual for not
less than 2 years,
shall be entitled to a wife's insurance benefit under this subsection
for each month, in such amount, and beginning and ending with
such months, as determined (under regulations of the Secretary) in
the manner otherwise provided for wife's insurance benefits under
this subsection, as if such insured individual had become entitled to
old-age insurance benefits on the date on which the divorced wife
first meets the criteria for entitlement set forth in clauses (i) and (ii).
"(B) A wife's insurance benefit provided under this paragraph
which has not otherwise terminated in accordance with subpara-
graph (E), (F), (H), or (J) of paragraph (1) shall terminate with the
month preceding the first month in which the insured individual is
no longer a fully insured individual.".
42 use 403. (b)(1)(A) Section 203(b) of such Act is amended-
(i) by inserting "(1)" after "(b)";
(ii) by striking out "(1) such individual's benefit" and "(2) if
such individual' and inserting in lieu thereof "(A) such individ-
ual's benefit" and "(B) if such individual", respectively;
(iii) by striking out "clauses (1) and (2)" and inserting in lieu
thereof "clauses (A) and (B)";
(iv) by striking out "(A) an individual" and "(B) if a deduc-
tion" and inserting in lieu thereof "(i) an individual" and "(ii) if
a deduction", respectively; and
(v) by adding at the end thereof the following new paragraph:
"(2) When any of the other persons referred to in paragraph (1)(B)
is entitled to monthly benefits as a divorced spouse under section
202 (b) or (c) for any month and such person has been so divorced for
not less than 2 years, the benefit to which he or she is entitled on
the basis of the wages and self-employment income of the individual
referred to in paragraph (1) for such month shall be determined
without regard to deductions under this subsection as a result of
excess earnings of such individual, and the benefits of all other
individuals who are entitled for such month to monthly benefits
under section 202 on the basis of the wages and self-employment
income of such individual referred to in paragraph (1) shall be
determined as if no such divorced spouse were entitled to benefits
for such month.".
(B)(i) Section 203(f)(1) of such Act is amended-
(I) in the first sentence, by insertinf "(excluding divorced
spouses referred to in subsection (bX2)) after "all other per-
sons" the first place it appears, and by striking out "all other
persons" the second place it appears and inserting in lieu
thereof "all such other persons"; and
(II) in the second sentence, by inserting "(excluding divorced
spouses referred to in subsection (b)(2))" after "other persons".
(ii) Section 203(0(7) of such Act is amended by inserting "(exclud-
ing divorced spouses referred to in subsection (b)(2))" after "all
persons".
(2) Section 203(dXl) of such Act is amended-
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(A) by inserting "(A)" after "(dX1)"; and
(B) by adding at the end thereof the following new subpara-
graph:
"(B) When any divorced spouse is entitled to monthly benefits
under section 202 (b) or (c) for any month and such divorced spouse
has been so divorced for not less than 2 years, the benefit to which
he or she is entitled for such month on the basis of the wages and
self-employment income of the individual entitled to old-age insur-
ance benefits referred to in subparagraph (A) shall be determined
without regard to deductions under this paragraph as a result of
excess earnings of such individual, and the benefits of all other
individuals who are entitled for such month to monthly benefits
under section 202 on the basis of the wages and self-employment
income of such individual referred to in subparagraph (A) shall be
determined as if no such divorced spouse were entitled to benefits
for such month.".
(c)(1) The amendments made by subsection (a) shall apply with
respect to monthly insurance benefits for months after December
1984, but only on the basis of applications filed on or after January
1, 1985.
(2) The amendments made by subsection (b) shall apply with
respect to monthly insurance benefits for months after December
1984.
INDEXING OF DEFERRED SURVIVING SPOUSE'S BENEFITS TO RECENT
WAGE LEVELS
SEC. 133. (aXi) Section 202(eX2) of the Social Security Act is
amended-
(A) by redesignating subparagraph (B) as subparagraph (D);
and
(B) by striking out "(2XA) Except" and all that follows down
through "If such deceased individual" and inserting in lieu
thereof the following:
"(2)(A) Except as provided in subsection (q), paragraph (8) of this
subsection, and subparagraph (D) of this paragraph, such widow's
insurance benefit for each month shall be equal to the primary
insurance amount (as determined for purposes of this subsection
after application of subparagraphs (B) and (C)) of such deceased
individual.
"(B)(i) For purposes of this subsection, in any case in which such
deceased individual dies before attaining age 62 and section 215(aXl)
(as in effect after December 1978) is applicable in determining such
individual's primary insurance amount-
"(I) such primary insurance amount shall be determined
under the formula set forth in section 215(aX1XB) (i) and (ii)
which is applicable to individuals who initially become eligible
for old-age insurance benefits in the second year after the year
specified in clause (ii),
"(II) the year specified in clause (ii) shall be substituted for
the second calendar year specified in section 215(bX3XAXiiXI),
and
"(III) such primary insurance amount shall be increased
under section 215(i) as if it were the primary insurance amount
referred to in section 215(iX2XAXiiXII), except that it shall be
increased only for years beginning after the first year after the
year specified in clause (ii).
Effective date.
42 USC 402 note.
Effective date.
42 USC 403 note.
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"(ii) The year specified in this clause is the earlier of-
"(I) the year in which the deceased individual attained age 60,
or would have attained age 60 had he lived to that age, or
"(II) the second year preceding the year in which the widow or
surviving divorced wife first meets the requirements of para-
graph (1)(B) or the second year preceding the year in which the
deceased individual died, whichever is later.
"(iii) This subparagraph shall apply with respect to any benefit
under this subsection only to the extent its application does not
result in a primary insurance amount for purposes of this subsection
which is less than the primary insurance amount otherwise deter-
mined for such deceased individual under section 215.
"(C) If such deceased individual.".
(2) Section 202(e) of such Act (as amended by paragraph (1) of this
subsection) is further amended-
(A) in paragraph (1)(D) and in the matter in paragraph (1)
following subparagraph (F)(ii), by inserting "(as determined
after application of subparagraphs (B) and (C) of paragraph (2))"
after "primary insurance amount"; and
(B) in paragraph (2)(D)(ii), by inserting "(as determined with-
out regard to subparagraph (C))" after "primary insurance
amount".
(b)(1) Section 202(f)(3) of such Act is amended-
(A) by redesignating subparagraph (B) as subparagraph (D);
and
(B) by striking out "(3XA) Except" and all that follows down
through "If such deceased individual" and inserting in lieu
thereof the following:
"(3)(A) Except as provided in subsection (q), paragraph (2) of this
subsection, and subparagraph (D) of this paragraph, such widower's
insurance benefit for each month shall be equal to the primary
insurance amount (as determined for purposes of this subsection
after application of subparagraphs (B) and (C)) of such deceased
individual.
"(B)(i) For purposes of this subsection, in any case in which such
deceased individual dies before attaining age 62 and section 215(a)(1)
(as in effect after December 1978) is applicable in determining such
individual's primary insurance amount-
"(I) such primary insurance amount shall be determined
under the formula set forth in section 215(a)(1XB) (i) and (ii)
which is applicable to individuals who initially become eligible
for old-age insurance benefits in the second year after the year
specified in clause (ii),
"(II) the year specified in clause (ii) shall be substituted for
the second calendar year specified in section 215(b)(3XAXii)(I),
and
"(III) such primary insurance amount shall be increased
under section 215(i) as if it were the primary insurance amount
referred to in section 215(i)(2)(A)(ii)(II), except that it shall be
increased only for years beginning after the first year after the
year specified in clause (ii).
"(ii) The year specified in this clause is the earlier of-
"(I) the year in which the deceased individual attained age 60,
or would have attained age 60 had she lived to that age, or
"(II) the second year preceding the year in which the widower
first meets the requirements of paragraph (1XB) or the second
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year preceding the year in which the deceased individual died,
whichever is later.
"(iii) This subparagraph shall apply with respect to any benefit
under this subsection only to the extent its application does not
result in a primary insurance amount for purposes of this subsection
which is less than the primary insurance amount otherwise deter-
mined for such deceased individual under section 215. 42 Usc 415.
"(C) If such deceased individual.".
(2) Section 202(f) of such Act (as amended by paragraph (1) of this 42 Usc 402.
subsection) is further amended-
(A) in paragraph (1XD) and in the matter in paragraph (1)
following subparagraph (FXii), by inserting "(as determined
after application of subparagraphs (B) and (C) of paragraph (3))"
after "primary insurance amount"; and
(B) in paragraph (3XD)(ii), by inserting "(as determined with-
out regard to subparagraph (C))" after "primary insurance
amount".
(c) The amendments made by this section shall apply with respect Effective date.
to monthly insurance benefits for months after December 1984 for 42 USC 402 note.
individuals who first meet all criteria for entitlement to benefits
under section 202 (e) or (0 of the Social Security Act (other than
making application for such benefits) after December 1984.
LIMITATION ON BENEFIT REDUCTION FOR EARLY RETIREMENT IN CASE
OF DISABLED WIDOWS AND WIDOWERS
SEC. 134. (a)(1) Section 202(qXl) of the Social Security Act is
amended by striking out the semicolon at the end of subparagraph
(B)(ii) and all that follows and inserting in lieu thereof a period.
(2XA) Section 202(qX6) of such Act is amended to read as follows:
"(6) For purposes of this subsection, the `reduction period' for an
individual's old-age, wife's, husband's, widow's, or widower's insur-
ance benefit is the period-
"(A) beginning-
"(i) in the case of an old-age or husband's insurance
benefit, with the first day of the first month for which such
individual is entitled to such benefit,
"(ii) in the case of a wife's insurance benefit, with the
first day of the first month for which a certificate described
in paragraph (5XAXi) is effective, or
"(iii) in the case of a widow's or widower's insurance
benefit, with the first day of the first month for which such
individual is entitled to such benefit or the first day of the
month in which such individual attains age 60, whichever is
the later, and
"(B) ending with the last day of the month before the month
in which such individual attains retirement age.".
(B) Section 202(qX3XG) of such Act is amended by striking out
"paragraph (6XA) (or, if such ~paragraph does not apply, the period
specified in paragraph (6XB)) and inserting in lieu thereof para-
graph (6) .
(C) Section 202(q) of such Act is further amended, in paragraphs
(1XBXi), (3XEXii), and (3)(FXiiXI), by striking out "paragraph (6XA)"
and inserting in lieu thereof "paragraph (6)
(3) Section 202(qX7) of such Act is amended by striking out the
matter preceding subparagraph (A) and inserting in lieu thereof the
following:
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"(7) For purposes of this subsection, the `adjusted reduction
period' for an individual's old-age, wife's, husband's, widow's, or
widower's insurance benefit is the reduction period prescribed in
paragraph (6) for such benefit, excluding-".
42 USC 402. (4) Section 202(q)(10) of such Act is amended-
(A) in that part of the second sentence preceding clause (A),
by striking out "or an additional adjusted reduction period";
(B) in clauses (B)(i) and (C)(i), by striking out ", plus the
number of months in the adjusted additional reduction period
multiplied by 43/24o of 1 percent";
(C) in clause (B)(ii), by striking out "plus the number of
months in the additional reduction period multiplied by 43/24o of
1 percent,"; and
(D) in clause (C)(ii), by striking out "plus the number of
months in the adjusted additional reduction period multiplied
by 43/24o of 1 percent.".
(b) Section 202(m)(2)(B) of such Act (as applicable after the enact-
95 Stat. 1660. ment of section 2 of Public Law 97-123) is amended by striking out
"subsection (q)(6)(A)(ii)" and inserting in lieu thereof "subsection
(q)(6)(B)".
Effective date. (c) The amendments made by this section shall apply with respect
42 USC 402 note. to benefits for months after December 1983.
PART E-MECHANISMS To ASSURE CONTINUED BENEFIT PAYMENTS IN
UNEXPECTEDLY ADVERSE CONDITIONS
NORMALIZED CREDITING OF SOCIAL SECURITY TAXES TO TRUST FUNDS
SEC. 141. (a)(1) The last sentence of section 201(a) of the Social
Security Act is amended-
(A) by striking out "from time to time" each place it appears
and inserting in lieu thereof "monthly on the first day of each
calendar month"; and
(B) by striking out "paid to or deposited into the Treasury"
and inserting in lieu thereof "to be paid to or deposited into the
Treasury during such month".
(2) Section 201(a) of such Act is further amended by adding at the
end thereof the following new sentence: "All amounts transferred to
either Trust Fund under the preceding sentence shall be invested by
the Managing Trustee in the same manner and to the same extent
as the other assets of such Trust Fund; and such Trust Fund shall
pay interest to the general fund on the amount so transferred on the
first day of any month at a rate (calculated on a daily basis, and
applied against the difference between the amount so transferred on
such first day and the amount which would have been transferred to
the Trust Fund up to that day under the procedures in effect on
January 1, 1983) equal to the rate earned by the investments of such
Fund in the same month under subsection (d).".
(b)(1) The last sentence of section 1817(a) of such Act is amended-
(A) by striking out "from time to time" and inserting in lieu
thereof "monthly on the first day of each calendar month"; and
(B) by striking out "paid to or deposited into the Treasury"
and inserting in lieu thereof "to be paid to or deposited into the
Treasury during such month".
(2) Section 1817(a) of such Act is further amended by adding at the
end thereof the following new sentence: "All amounts transferred to
the Trust Fund under the preceding sentence shall be invested by
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the Managing Trustee in the same manner and to the same extent
as the other assets of the Trust Fund; and the Trust Fund shall pay
interest to the general fund on the amount so transferred on the
first day of any month at a rate (calculated on a daily basis, and
applied against the difference between the amount so transferred on
such first day and the amount which would have been transferred to
the Trust Fund up to that day under the procedures in effect on
January 1, 1983) equal to the rate earned by the investments of the
Trust Fund in the same month under subsection (c).".
(c) The amendments made by this section shall become effective
on the first day of the month following the month in which this Act
is enacted.
SEC. 142. (a)(1) Section 201(1)(1) of the Social Security Act is
amended-
(A) by striking out "January 1983" and inserting in lieu
thereof "January 1988"; and
(B) by inserting after "or" the second place it appears ",
subject to paragraph (5),".
(2) (A) Section 201(1)(2) of such Act is amended-
(i) by striking out "from time to time" and inserting in lieu
thereof "on the last day of each month after such loan is made";
(ii) by striking out "interest" and inserting in lieu thereof
"the total interest accrued to such day"; and
(iii) by inserting before the period at the end thereof the
following: "(even if such an investment would earn interest at a
rate different than the rate earned by investments redeemed by
the lending fund in order to make the loan)".
(B) The amendment made by this paragraph shall apply with
respect to months beginning more than thirty days after the date of
enactment of this Act.
(3) Section 201(1)(3) of such Act is amended-
(A) by inserting "(A)" after the paragraph designation; and
(B) by adding at the end thereof the following new subpara-
graphs:
"(B)(i) If on the last day of any year after a loan has been made
under paragraph (1) by the Federal Hospital Insurance Trust Fund
to the Federal Old-Age and Survivors Trust Fund or the Federal
Disability Insurance Trust Fund, the Managing Trustee determines
that the OASDI trust fund ratio exceeds 15 percent, he shall trans-
fer from the borrowing Trust Fund to the Federal Hospital Insur-
ance Trust Fund an amount that-
"(I) together with any amounts transferred from another
borrowing Trust Fund under this paragraph for such year, will
reduce the OASDI trust fund ratio to 15 percent; and
"(II) does not exceed the outstanding balance of such loan.
"(ii) Amounts required to be transferred under clause (i) shall be
transferred on the last day of the first month of the year succeeding
the year in which the determination described in clause (i) is made.
"(iii) For purposes of this subparagraph, the term `OASDI trust
fund ratio' means, with respect to any calendar year, the ratio of-
"(I) the combined balance in the Federal Old-Age and Survi-
vors Insurance Trust Fund and the Federal Disability Insurance
Trust Fund, as of the last day of such calendar year, to
"(II) the amount estimated by the Secretary to be the total
amount to be paid from the Federal Old-Age and Survivors
Effective date.
42 USC 401 note.
Effective date.
42 USC 401 note.
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Insurance Trust Fund and the Federal Disability Insurance
Trust Fund during the calendar year following such calendar
year for all purposes authorized by section 201 (other than
payments of interest on, and repayments of, loans from the
Federal Hospital Insurance Trust Fund under paragraph (1),
but excluding any transfer payments between such trust funds
and reducing the amount of any transfer to the Railroad Retire-
ment Account by the amount of any transfers into either such
trust fund from that Account).
Repayment date. "(C)(i) The full amount of all loans made under paragraph (1)
(whether made before or after January 1, 1983) shall be repaid at
the earliest feasible date and in any event no later than Decem-
ber 31, 1989.
"(ii) For the period after December 31, 1987, and before January 1,
1990, the Managing Trustee shall transfer each month to the Fed-
eral Hospital Insurance Trust Fund from any Trust Fund with any
amount outstanding on a loan made from the Federal Hospital
Insurance Trust Fund under paragraph (1) an amount not less than
an amount equal to (I) the amount owed to the Federal Hospital
Insurance Trust Fund by such Trust Fund at the beginning of such
month (plus the interest accrued on the outstanding balance of such
loan during such month), divided by (II) the number of months
elapsing after the preceding month and before January 1990. The
Managing Trustee may, during this period, transfer larger amounts
than prescribed by the preceding sentence.".
42 Usc 401. (4) Section 201(1) of such Act is further amended by adding at the
end thereof the following new paragraph:
"(5)(A) No amounts may be borrowed from the Federal Hospital
Insurance Trust Fund under paragraph (1) during any month if the
Hospital Insurance Trust Fund ratio for such month is less than 10
percent.
"Hospital "(B) For purposes of this paragraph, the term `Hospital Insurance
Insurance Trust Trust Fund ratio' means, with respect to any month, the ratio of-
Fund ratio." "(i) the balance in the Federal Hospital Insurance Trust
Fund, reduced by the outstanding amount of any loan (including
interest thereon) theretofore made to such Trust Fund under
this subsection, as of the last day of the second month preceding
such month, to
"(ii) the amount obtained by multiplying by twelve the total
amount which (as estimated by the Secretary) will be paid from
the Federal Hospital Insurance Trust Fund during the month
for which such ratio is to be determined (other than payments
of interest on, or repayments of loans from another Trust Fund
under this subsection), and reducing the amount of any trans-
fers to the Railroad Retirement Account by the amount of any
transfer into the Hospital Insurance Trust Fund from that
Account.".
42 USC 1395i. (b)(1) Section 1817(jX1) of such Act is amended-
(A) by striking out "January 1983" and inserting in lieu
thereof "January 1988"; and
(B) by inserting ", subject to paragraph (5)," after "may".
(2XA) Section 1817(jX2) of such Act is amended-
(i) by striking out "from time to time" and inserting in lieu
thereof "on the last day of each month after such loan is made";
(ii) by striking out "interest" and inserting in lieu thereof
"the total interest accrued to such day"; and
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(iii) by inserting before the period at the end thereof the
following: "(even if such an investment would earn interest at a
rate different than the rate earned by investments redeemed by
the lending fund in order to make the loan)".
(B) The amendment made by this paragraph shall apply with Effective date.
respect to months beginning more than 30 days after the date of 42 USC 1395i
enactment of this Act. note.
(3) Section 1817(j)(3) of such Act is amended- 42 Usc 1395i.
(A) by inserting "(A)" after the paragraph designation; and
(B) by adding at the end thereof the following new subpara-
graphs:
"(B)(i) If on the last day of any year after a loan has been made
under paragraph (1) by the Federal Old-Age and Survivors Insur-
ance Trust Fund or the Federal Disability Insurance Trust Fund to
the Federal Hospital Insurance Trust Fund, the Managing Trustee
determines that the Hospital Insurance Trust Fund ratio exceeds 15
percent, he shall transfer from such Trust Fund to the lending trust
fund an amount that-
"(I) together with any amounts transferred to another lending
trust fund under this paragraph for such year, will reduce the
Hospital Insurance Trust Fund ratio to 15 percent; and
"(II) does not exceed the outstanding balance of such loan.
"(ii) Amounts required to be transferred under clause (i) shall be
transferred on the last day of the first month of the year succeeding
the year in which the determination described in clause (i) is made.
"(iii) For purposes of this subparagraph, the term `Hospital Insur- "Hospital
Trust Insurance ance Trust Fund ratio' means, with respect to any calendar year,
the ratio of- Fund ratio." "(I) the balance in the Federal Hospital Insurance Trust
Fund, as of the last day of such calendar year; to
"(II) the amount estimated by the Secretary to be the total
amount to be paid from the Federal Hospital Insurance Trust
Fund during the calendar year following such calendar year
(other than payments of interest on, and repayments of, loans
from the Federal Old-Age and Survivors Insurance Trust Fund
and the Federal Disability Insurance Trust Fund under para-
graph (1)), and reducing the amount of any transfer to the
Railroad Retirement Account by the amount of any transfers
into such Trust Fund from the Railroad Retirement Account.
"(C)(i) The full amount of all loans made under paragraph (1) Repayment date.
(whether made before or after January 1, 1983) shall be repaid at
the earliest feasible date and in any event no later than Decem-
ber 31, 1989.".
"(ii) For the period after December 31, 1987 and before January 1,
1990, the Managing Trustee shall transfer each month from the
Federal Hospital Insurance Trust Fund to any Trust Fund that is
owed any amount by the Federal Hospital Insurance Trust Fund on
a loan made under paragraph (1), an amount not less than an
amount equal to (I) the amount owed to such Trust Fund by the
Federal Hospital Insurance Trust Fund at the beginning of such
month (plus the interest accrued on the outstanding balance of such
loan during such month), divided by (II) the number of months
elapsing after the preceding month and before January 1990. The
Managing Trustee may, during this period, transfer larger amounts
than prescribed by the preceding sentence.".
(4) Section 1817(j) of such Act is further amended by adding at the
end thereof the following new paragraph:
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97 STAT. 102 PUBLIC LAW 98-21-APR. 20, 1983
"(5)(A) No amounts may be loaned by the Federal Old-Age and
Survivors Insurance Trust Fund or the Federal Disability Insurance
Trust Fund under paragraph (1) during any month if the OASDI
trust fund ratio for such month is less than 10 percent.
"OASDI trust "(B) For purposes of this paragraph, the term `OASDI trust fund
fund ratio." ratio' means, with respect to any month, the ratio of-
"(i) the combined balance in the Federal Old-Age and Survi-
vors Insurance Trust Fund and the Federal Disability Insurance
Trust Fund, reduced by the outstanding amount of any loan
(including interest thereon) theretofore made to either such
Trust Fund from the Federal Hospital Insurance Trust Fund
42 UsC 401. under section 201(1), as of the last day of the second month
preceding such month, to
"(ii) the amount obtained by multiplying by twelve the total
amount which (as estimated by the Secretary) will be paid from
the Federal Old-Age and Survivors Insurance Trust Fund and
the Federal Disability Insurance Trust Fund during the month
for which such ratio is to be determined for all purposes author-
ized by section 201 (other than payments of interest on, or
repayments of, loans from the Federal Hospital Insurance Trust
Fund under section 201(1)), but excluding any transfer payments
between such trust funds and reducing the amount of any
transfers to the Railroad Retirement Account by the amount of
any transfers into either such trust fund from that Account.".
RECOMMENDATIONS BY BOARD OF TRUSTEES TO REMEDY INADEQUATE
BALANCES IN THE SOCIAL SECURITY TRUST FUNDS
Report to
Congress.
42 USC 910.
26 USC 1401,
3101, 3111.
SEC. 143. Title VII of the Social Security Act is amended by
adding at the end thereof the following new section:
"RECOMMENDATIONS BY BOARD OF TRUSTEES TO REMEDY INADEQUATE
BALANCES IN THE SOCIAL SECURITY TRUST FUNDS
"SEC. 709. (a) If the Board of Trustees of the Federal Old-Age and
Survivors Insurance Trust Fund and the Federal Disability Insur-
ance Trust Fund, the Federal Hospital Insurance Trust Fund, or the
Federal Supplementary Medical Insurance Trust Fund determines
at any time that the balance ratio of any such Trust Fund for any
calendar year may become less than 20 percent, the Board shall
promptly submit to each House of the Congress a report setting
forth its recommendations for statutory adjustments affecting the
receipts and disbursements of such Trust Fund necessary to main-
tain the balance ratio of such Trust Fund at not less than 20
percent, with due regard to the economic conditions which created
such inadequacy in the balance ratio and the amount of time
necessary to alleviate such inadequacy in a prudent manner. The
report shall set forth specifically the extent to which benefits would
have to be reduced, taxes under section 1401, 3101, or 3111 of the
Internal Revenue Code of 1954 would have to be increased, or a
combination thereof, in order to obtain the objectives referred to in
the receding sentence.
"N For purposes of this section, the term `balance ratio' means,
with respect to any calendar year in connection with any Trust
Fund referred to in subsection (a), the ratio of-
"(1) the balance in such Trust Fund, reduced by the outstand-
ing amount of any loan (including interest thereon) theretofore
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PUBLIC LAW 98-21-APR. 20, 1983 97 STAT. 103
made to such Trust Fund under section 201(1) or 1817(j), as of
the beginning of such year, to
"(2) the total amount which (as estimated by the Secretary)
will be paid from such Trust Fund during such calendar year for
all purposes authorized by section 201, 1817, or 1841 (as appli-
cable), other than payments of interest on, or repayments of, loans
under section 201(1) or 1817(j), but excluding any transfer pay-
ments between such Trust Fund and any other Trust Fund
referred to in subsection (a) and reducing the amount of any
transfers to the Railroad Retirement Account by the amount of
any transfers into such Trust Fund from that Account.".
PART F-OTHER FINANCING AMENDMENTS
FINANCING OF NONCONTRIBUTORY MILITARY WAGE CREDITS
SEC. 151. (a) Section 217(g) of the Social Security Act is amended to
read as follows:
"Appropriation to Trust Funds
"(g)(1) Within thirty days after the date of the enactment of the
Social Security Amendments of 1983, the Secretary shall determine
the amount equal to the excess of-
"(A) the actuarial present value as of such date of enactment
of the past and future benefit payments from the Federal Old-
Age and Survivors Insurance Trust Fund, the Federal Disability
Insurance Trust Fund, and the Federal Hospital Insurance
Trust Fund under this title and title XVIII, together with
associated administrative costs, resulting from the operation of
this section (other than this subsection) and section 210 of this
Act as in effect before the enactment of the Social Security
Amendments of 1950, over
"(B) any amounts previously transferred from the general
fund of the Treasury to such Trust Funds pursuant to the
provisions of this subsection as in effect immediately before the
date of the enactment of the Social Security Amendments of
1983.
Such actuarial present value shall be based on the relevant actuar-
ial assumptions set forth in the report of the Board of Trustees of
each such Trust Fund for 1983 under sections 201(c) and 1817(b).
Within thirty days after the date of the enactment of the Social
Security Amendments of 1983, the Secretary of the Treasury shall
transfer the amount determined under this paragraph with respect
to each such Trust Fund to such Trust Fund from amounts in the
general fund of the Treasury not otherwise appropriated.
"(2) The Secretary shall revise the amount determined under
paragraph (1) with respect to each such Trust Fund in 1985 and each
fifth year thereafter, as determined appropriate by the Secretary
from data which becomes available to him after the date of the
determination under paragraph (1) on the basis of the amount of
benefits and administrative expenses actually paid from such Trust
Fund under this title or title XVIII and the relevant actuarial
assumptions set forth in the report of the Board of Trustees of such
Trust Fund for such year under section 201(c) or 1817(b). Within 30
days after any such revision, the Secretary of the Treasury, to the
extent provided in advance in appropriation Acts, shall transfer to
such Trust Fund, from amounts in the general fund of the Treasury
42 USC 401,
1395i.
42 USC 410.
42 USC 1305
note.
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97 STAT. 104 PUBLIC LAW 98-21-APR. 20, 1983
42 USC 401,
1395i.
26 USC 3121.
26 USC 3101,
3111.
Effective date.
42 USC 429 note.
not otherwise appropriated, or from such Trust Fund to the general
fund of the Treasury, such amounts as the Secretary of the Treasury
determines necessary to take into account such revision.".
(b)(1) Section 229(b) of such Act is amended to read as follows:
"(b) There are authorized to be appropriated to each of the Trust
Funds, consisting of the Federal Old-Age and Survivors Insurance
Trust Fund, the Federal Disability Insurance Trust Fund, and the
Federal Hospital Insurance Trust Fund, for transfer on July 1 of
each calendar year to such Trust Fund from amounts in the general
fund in the Treasury not otherwise appropriated, an amount equal
to the total of the additional amounts which would be appropriated
to such Trust Fund for the fiscal year ending September 30 of such
calendar year under section 201 or 1817 of this Act if the amounts of
the additional wages deemed to have been paid for such calendar
year by reason of subsection (a) constituted remuneration for em-
ployment (as defined in section 3121(b) of the Internal Revenue Code
of 1954) for purposes of the taxes imposed by sections 3101 and 3111
of the Internal Revenue Code of 1954. Amounts authorized to be
appropriated under this subsection for transfer on July 1 of each
calendar year shall be determined on the basis of estimates of the
Secretary of the wages deemed to be paid for such calendar year
under subsection (a); and proper adjustments shall be made in
amounts authorized to be appropriated for subsequent transfer to
the extent prior estimates were in excess of or were less than such
wages so deemed to be paid.".
(2) The amendment made by paragraph (1) shall be effective with
respect to wages deemed to have been paid for calendar years after
1983.
(3XA) Within thirty days after the date of the enactment of this
Act, the Secretary of Health and Human Services shall determine
the additional amounts which would have been appropriated to the
Federal Old-Age and Survivors Insurance Trust Fund, the Federal
Disability Insurance Trust Fund, and the Federal Hospital Insur-
ance Trust Fund under sections 201 and 1817 of the Social Security
Act if the additional wages deemed to have been paid under section
229(a) of the Social Security Act prior to 1984 had constituted
remuneration for employment (as defined in section 3121(b) of the
Internal Revenue Code of 1954) for purposes of the taxes imposed by
sections 3101 and 3111 of the Internal Revenue Code of 1954, and the
amount of interest which would have been earned on such amounts
if they had been so appropriated.
(B)(i) Within thirty days after the date of the enactment of this
Act, the Secretary of the Treasury shall transfer to each such Trust
Fund, from amounts in the general fund of the Treasury not other-
wise appropriated, an amount equal to the amount determined with
respect to such Trust Fund under subparagraph (A), less any
amount appropriated to such Trust Fund pursuant to the provisions
of section 229(b) of the Social Security Act prior to the date of the
determination made under subparagraph (A) with respect to wages
deemed to have been paid for calendar years prior to 1984.
(ii) The Secretary of Health and Human Services shall revise the
amount determined under clause (i) with respect to each such Trust
Fund within one year after the date of the transfer made to such
Trust Fund under clause (i), as determined appropriate by such
Secretary from data which becomes available to him after the date
of the transfer under clause (i). Within 30 days after any such
revision, the Secretary of the Treasury shall transfer to such Trust
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PUBLIC LAW 98-21-APR. 20, 1983 97 STAT. 105
Fund, from amounts in the general fund of the Treasury not other-
wise appropriated, or from such Trust Fund to the general fund of
the Treasury, such amounts as the Secretary of Health and Human
Services certifies as necessary to take into account such revision.
ACCOUNTING FOR CERTAIN UNNEGOTIATED CHECKS FOR BENEFITS
UNDER THE SOCIAL SECURITY PROGRAM
SEC. 152. (a) Section 201 of the Social Security Act is amended by
adding at the end thereof the following new subsection:
"(m)(1) The Secretary of the Treasury shall implement procedures
to permit the identification of each check issued for benefits under
this title that has not been presented for payment by the close of the
sixth month following the month of its issuance.
"(2) The Secretary of the Treasury shall, on a monthly basis,
credit each of the Trust Funds for the amount of all benefit checks
(including interest thereon) drawn on such Trust Fund more than 6
months previously but not presented for payment and not pre-
viously credited to such Trust Fund, to the extent provided in
advance in appropriation Acts.
"(3) If a benefit check is presented for payment to the Treasury
and the amount thereof has been previously credited pursuant to
paragraph (2) to one of the Trust Funds, the Secretary of the
Treasury shall nevertheless pay such check, if otherwise proper,
recharge such Trust Fund, and notify the Secretary of Health and
Human Services.
"(4) A benefit check bearing a current date may be issued to an
individual who did not negotiate the original benefit check and who
surrenders such check for cancellation if the Secretary of the Treas-
ury determines it is necessary to effect proper payment of benefits.".
(b) The amendment made by subsection (a) shall apply with
respect to all checks for benefits under title II of the Social Security
Act which are issued on or after the first day of the twenty-fourth
month following the month in which this Act is enacted.
(c)(1) The Secretary of the Treasury shall transfer from the general
fund of the Treasury to the Federal Old-Age and Survivors
Insurance Trust Fund and to the Federal Disability Insurance Trust
Fund, in the month following the month in which this Act is enacted
and in each of the succeeding 30 months, such sums as may be
necessary to reimburse such Trust Funds in the total amount of all
checks (including interest thereof) which he and the Secretary of
Health and Human Services jointly determine to be unnegotiated
benefit checks, to the extent provided in advance in appropriation
Acts. After any amounts authorized by this subsection have been
transferred to a Trust Fund with respect to any benefit check, the
provisions of paragraphs (3) and (4) of section 201(m) of the Social
Security Act (as added by subsection (a) of this section) shall be
applicable to such check.
(2) As used in paragraph (1), the term "unnegotiated benefit
checks" means checks for benefits under title II of the Social
Security Act which are issued prior to the twenty-fourth month
following the month in which this Act is enacted, which remain
unnegotiated after the sixth month following the date on which they
were issued, and with respect to which no transfers have previously
been made in accordance with the first sentence of such paragraph.
Effective date.
42 USC 401 note.
Transfers from
general
Treasury fund.
42 USC 401 note.
"Unnegotiated
benefit checks."
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97 STAT. 106 PUBLIC LAW 98-21-APR. 20, 1983
Study.
42 USC 401 note.
Consultation
with OMB
Director.
Reports to
President and
Congress.
SEC. 153. (a) The Secretary of Health and Human Services and the
Secretary of the Treasury shall jointly undertake, as soon as possi-
ble after the date of the enactment of this Act, a thorough study
with respect to the period of time (hereafter in this section referred
to as the "float period") between the issuance of checks from the
general fund of the Treasury in payment of monthly insurance
benefits under title II of the Social Security Act and the transfer to
the general fund from the Federal Old-Age and Survivors Insurance
Trust Fund or the Federal Disability Insurance Trust Fund, as
applicable, of the amounts necessary to compensate the general
fund for the issuance of such checks. Each such Secretary shall
consult the other regularly during the course of the study and shall,
as appropriate, provide the other with such information and assist-
ance as he may require.
(b) The study shall include-
(1) an investigation of the feasibility and desirability of main-
taining the float periods which are allowed as of the date of the
enactment of this section in the procedures governing the pay-
ment of monthly insurance benefits under title II of the Social
Security Act, and of the general feasibility and desirability of
making adjustments in such procedures with respect to float
periods; and
(2) a separate investigation of the feasibility and desirability
of providing, as a specific form of adjustment in such procedures
with respect to float periods, for the transfer each day to the
general fund of the Treasury from the Federal Old-Age and
Survivors Insurance Trust Fund and the Federal Disability
Insurance Trust Fund, as appropriate, of amounts equal to the
amounts of the checks referred to in subsection (a) which are
paid by the Federal Reserve Banks on such day.
(c) In conducting the study required by subsection (a), the Secre-
taries shall consult, as appropriate, the Director of the Office of
Management and Budget, and the Director shall provide the Secre-
taries with such information and assistance as they may require.
The Secretaries shall also solicit the views of other appropriate
officials and organizations.
(d)(1) Not later than six months after the date of the enactment of
this Act, the Secretaries shall submit to the President and the
Congress a report of the findings of the investigation required by
subsection (bXl), and the Secretary of the Treasury shall by regula-
tion make such adjustments in the procedures governing the pay-
ment of monthly insurance benefits under title II of the Social
Security Act with respect to float periods (other than adjustments in
the form described in subsection (bX2)) as may have been found in
such investigation to be necessary or appropriate.
(2) Not later than twelve months after the date of the enactment
of this Act, the Secretaries shall submit to the President and the
Congress a report of the findings of the separate investigation
required by subsection (bX2), together with their recommendations
with respect thereto; and, to the extent necessary or appropriate to
carry out such recommendations, the Secretary of the Treasury
shall by regulation make adjustments in the procedures with respect
to float periods in the form described in such subsection.
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PUBLIC LAW 98-21-APR. 20, 1983 97 STAT. 107
TRUST FUND TRUSTEES' REPORTS
SEC. 154. (a) The next to last sentence of section 201(c) of the Social
Security Act is amended by striking out "Such report shall also
include" and inserting in lieu thereof the following: "Such report
shall include an actuarial opinion by the Chief Actuary of the Social
Security Administration certifying that the techniques and method-
ologies used are generally accepted within the actuarial profession
and that the assumptions and cost estimates used are reasonable:
Provided, That the certification shall not refer to economic assump-
tions underlying the Trustee's report, and shall also include".
(b) Section 1817(b) of such Act is amended by inserting immedi-
ately before the last sentence the following new sentence: "Such
report shall also include an actuarial opinion by the Chief Actuarial
Officer of the Health Care Financing Administration certifying that
the techniques and methodologies used are generally accepted
within the actuarial profession and that the assumptions and cost
estimates used are reasonable: Provided, That the certification shall
not refer to economic assumptions underlying the Trustee's report.".
(c) Section 1841(b) of such Act is amended by inserting immedi-
ately before the last sentence the following new sentence: "Such
report shall also include an actuarial opinion by the Chief Actuarial
Officer of the Health Care Financing Administration certifying that
the techniques and methodologies used are generally accepted
within the actuarial profession and that the assumptions and cost
estimates used are reasonable: Provided, That the certification shall
not refer to economic assumptions underlying the Trustee's report.".
(d) Notwithstanding sections 201(cX2), 1817(b)(2), and 1841(bX2) of
the Social Security Act, the annual reports of the Boards of Trustees
of the Trust Funds which are required in the calendar year 1983
under those sections may be filed at any time not later than forty-
five days after the date of the enactment of this Act.
(e) The amendments made by this section shall take effect on the
date of the enactment of this Act.
TITLE II-ADDITIONAL PROVISIONS RELATING TO LONG-
TERM FINANCING OF THE SOCIAL SECURITY SYSTEM
SEC. 201. (a) Section 216 of the Social Security Act is amended by
adding at the end thereof the following new subsection:
"Retirement Age
"(1)(1) The term `retirement age' means-
"(A) with respect to an individual who attains early retire-
ment age (as defined in paragraph (2)) before January 1, 2000,
65 years of age;
"(B) with respect to an individual who attains early retire-
ment age after December 31, 1999, and before January 1, 2005,
65 years of age plus the number of months in the age increase
factor (as determined under paragraph (3)) for the calendar year
in which such individual attains early retirement age;
"(C) with respect to an individual who attains early retire-
ment age after December 31, 2004, and before January 1, 2017,
66 years of age;
Effective date.
42 USC 401 note.
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97 STAT. 108 PUBLIC LAW 98-21-APR. 20, 1983
"Early
retirement age."
Age increase
factor.
"(D) with respect to an individual who attains early retire-
ment age after December 31, 2016, and before January 1, 2022,
66 years of age plus the number of months in the age increase
factor (as determined under paragraph (3)) for the calendar year
in which such individual attains early retirement age; and
"(E) with respect to an individual who attains early retire-
ment age after December 31, 2021, 67 years of age.
"(2) The term `early retirement age' means age 62 in the case of
an old-age, wife's, or husband's insurance benefit, and age 60 in the
case of a widow's or widower's insurance benefit.
"(3) The age increase factor for any individual who attains early
retirement age in a calendar year within the period to which
subparagraph (B) or (D) of paragraph (1) applies shall be determined
as follows:
"(A) With respect to an individual who attains early retire-
ment age in the 5-year period consisting of the calendar years
2000 through 2004, the age increase factor shall be equal to two-
twelfths of the number of months in the period beginning with
January 2000 and ending with December of the year in which
the individual attains early retirement age.
"(B) With respect to an individual who attains early retire-
ment age in the 5-year period consisting of the calendar years
2017 through 2021, the age increase factor shall be equal to two-
twelfths of the number of months in the period beginning with
January 2017 and ending with December of the year in which
the individual attains early retirement age.".
(b)(1) Section 202(q)(9) of such Act is amended to read as follows:
"(9) The amount of the reduction for early retirement specified in
parargaph (1)-
"(A) for old-age insurance benefits, wife's insurance benefits,
and husband's insurance benefits, shall be the amount specified
in such paragraph for the first 36 months of the reduction
period (as defined in paragraph (6)) or adjusted reduction period
(as defined in paragraph (7)), and five-twelfths of 1 percent for
any additional months included in such periods; and
"(B) for widow's insurance benefits and widower's insurance
benefits, shall be periodically revised by the Secretary such
that-
"(i) the amount of the reduction at early retirement age
as defined in section 216(a) shall be 28.5 percent of the full
benefit; and
"(ii) the amount of the reduction for each month in the
reduction period (specified in paragraph (6)) or the adjusted
reduction period (specified in paragraph (7)) shall be estab-
lished by linear interpolation between 28.5 percent at the
month of attainment of early retirement age and 0 percent
at the month of attainment of retirement age.".
(2) Section 202(q)(1) of such Act is amended by striking out "If"
and inserting in lieu thereof "Subject to paragraph (9), if'.
(c) Title II of the Social Security Act is further amended-
(1) by striking out "age 65" or "age of 65", as the case may be,
each place it appears in the following sections and inserting in
lieu thereof in each instance "retirement age (as defined in
section 216(1))":
(A) subsections (a), (b), (c), (d), (e), (f), (q), (r), and (w) of
section 202;
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PUBLIC LAW 98-21-APR. 20, 1983
(B) subsections (c) (as amended by section 309(g) of this
Act) and (f) of section 203;
(C) subsection (f) of section 215;
(D) subsections (h) and (i) of section 216; and
(E) section 223(a); and
(2) by striking out "age sixty-five" in section 203(c) (as amended
by section 309(g) of this Act) and inserting in lieu thereof
"retirement age (as defined in section 216(1))"; and
(3) by striking out "age of sixty-five" in section 223(a) and
inserting in lieu thereof "retirement age (as defined in section
216(1))".
(d) The Secretary shall conduct a comprehensive study and analy-
sis of the implications of the changes made by this section in
retirement age in the case of those individuals (affected by such
changes) who, because they are engaged in physically demanding
employment or because they are unable to extend their working
careers for health reasons, may not benefit from improvements in
longevity. The Secretary shall submit to the Congress no later than
January 1, 1986, a full report on the study and analysis. Such report
shall include any recommendations for legislative changes, includ-
ing recommendations with respect to the provision of protection
against the risks associated with early retirement due to health
considerations, which the Secretary finds necessary or desirable as a
result of the findings contained in this study.
TITLE III-MISCELLANEOUS AND TECHNICAL PROVISIONS
SEC. 301. (a)(1) Section 202(cXl) of the Social Security Act is
amended, in the matter preceding subparagraph (A), by inserting
"and every divorced husband (as defined in section 216(d))" before
"of an individual" and by inserting "or such divorced husband"
after "if such husband".
(2) Section 202(c)(1) of such Act is further amended-
(A) by striking out "and" at the end of subparagraph (B);
(B) by redesignating subparagraph (C) as subparagraph (D),
and by inserting after subparagraph (B) the following new
subparagraph:
"(C) in the case of a divorced husband, is not married, and";
and
(C) by striking out the matter following subparagraph (D) (as
so redesignated) and inserting in lieu thereof the following:
"shall be entitled to a husband's insurance benefit for each month,
beginning with-
"(i) in the case of a husband or divorced husband (as so
defined) of an individual who is entitled to an old-age insurance
benefit, if such husband or divorced husband has attained age
65, the first month in which he meets the criteria specified in
subparagraphs (A), (B), (C), and (D), or
"(ii) in the case of a husband or divorced husband (as so
defined) of-
"(I) an individual entitled to old-age insurance benefits, if
such husband or divorced husband has not attained age 65,
or
42 USC 403.
42 USC 415.
42 USC 416.
42 USC 423.
42 USC 403.
Implications of
changes, study
and analysis.
42 USC 416 note.
Report to
Congress.
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"(II) an individual entitled to disability insurance bene-
fits,
the first month throughout which he is such a husband or
divorced husband and meets the criteria specified in subpara-
graphs (B), (C), and (D) (if in such month he meets the criterion
specified in subparagraph (A)),
whichever is earlier, and ending with the month preceding the
month to which any of the following occurs:
"(E) he dies,
"(F) such individual dies,
"(G) in the case of a husband, they are divorced and either (i)
he has not attained age 62, or (ii) he has attained age 62 but has
not been married to such individual for a period of 10 years
immediately before the divorce became effective,
"(H) in the case of a divorced husband, he marries a person
other than such individual,
"(I) he becomes entitled to an old-age or disability insurance
benefit based on a primary insurance amount which is equal to
or exceeds one-half of the primary insurance amount of such
individual, or
"(J) such individual is not entitled to disability insurance
benefits and is not entitled to old-age insurance benefits.".
(3) Section 202(c)(3) of such Act is amended by inserting "(or, in
the case of a divorced husband, his former wife)" before "for such
month".
(4) Section 202(c) of such Act is further amended by adding after
paragraph (3) the following new paragraph:
"(4) In the case of Any divorced husband who marries-
"(A) an individual entitled to benefits under subsection (b), (e),
(g), or (h) of this section, or
"(B) an individual who has attained the age of 18 and is
entitled to benefits under subsection (d), by reason of paragraph
(1)(B)(ii) thereof,
such divorced husband's entitlement to benefits under this subsec-
tion, notwithstanding the provisions of paragraph (1) (but subject to
subsection (s)), shall not be terminated by reason of such marriage.".
(5) Section 202(c) of such Act is further amended by adding after
paragraph (4) (as added by paragraph (4) of this subsection) the
following new paragraph:
"(5)(A) Notwithstanding the preceding provisions of this subsec-
tion, except as provided in subparagraph (B), the divorced husband
of an individual who is not entitled to old-age or disability insurance
benefits, but who has attained age 62 and is a fully insured indi-
vidual (as defined in section 214), if such divorced husband-
"(i) meets the requirements of subparagraphs (A) through (D)
of paragraph (1), and
"(ii) has been divorced from such insured individual for not
less than 2 years,
shall be entitled to a husband's insurance benefit under this subsec-
tion for each month, in such amount, and beginning and ending
with such months, as determined (under regulations of the Secre-
tary) in the manner otherwise provided for husband's insurance
benefits under this subsection, as if such insured individual had
become entitled to old-age insurance benefits on the date on which
the divorced husband first meets the criteria for entitlement set
forth in classes (i) and (ii).
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PUBLIC LAW 98-21-APR. 20, 1983 97 STAT. 111
"(B) A husband's insurance benefit provided under this paragraph
which has not otherwise terminated in accordance with subpara-
graph (E), (F), (H), or (I) of paragraph (1) shall terminate with the
month preceding the first month in which the insured individual is
no longer a fully insured individual.".
(6) Section 202(c)(2)(A) of such Act is amended by inserting "(or 42 Usc 402.
divorced husband)" after "payable to such husband".
(7) Section 202(b)(3)(A) of such Act is amended by striking out "(f)"
and inserting in lieu thereof "(c), (f),".
(8) Section 202(c)(1)(D) of such Act (as redesignated by paragraph
(2) of this subsection) is amended by striking out "his wife" and
inserting in lieu thereof "such individual".
(9) Section 202(d)(5)(A) of such Act is amended by inserting "(c),"
after "(b),".
(b)(1) Section 202(f)(1) of such Act is amended, in the matter
preceding subparagraph (A), by inserting "and every surviving
divorced husband (as defined in section 216(d))" before "of an
individual" and by inserting "or such surviving divorced husband"
after "if such widower".
(2) Section 202(f)(1) of such Act is further amended by striking out
"his deceased wife" in subparagraph (D) and in the matter following
subparagraph (F) and inserting in lieu thereof "such deceased indi-
vidual".
(3) Section 202(f)(3)(B)(ii)(II) of such Act (as amended by section Ante, p. 96.
133(b)(1)(B) of this Act) is amended by inserting "or surviving
divorced husband" after "widower".
(4) Paragraph (3)(D) of section 202(f) of such Act (as redesignated
by section 133(b)(1)(A) of this Act), and paragraphs (4), (5), and (6) of
such section (as redesignated by section 131(b)(3)(A) of this Act), are
each amended by inserting "or surviving divorced husband" after
"widower" wherever it appears.
(5) Paragraph (3MD) of section 202(f) of such Act (as redesignated
by section 133(b)(1)(A) of this Act) is further amended by striking out
"wife" wherever it appears and inserting in lieu thereof
"individual".
(6) Section 202(g)(3)(A) of such Act is amended by inserting "(c),"
before "(f),".
(7) Section 202(h)(4XA) of such Act is amended by inserting "(c),"
before "(e),".
(c)(1) Section 216(d) of such Act is amended by redesignating 42 Usc 416.
paragraph (4) as paragraph (6), and by inserting after paragraph (3)
the following new paragraphs:
"(4) The term `divorced husband' means a man divorced from an "Divorced
individual, but only if he had been married to such individual for a husband."
period of 10 years immediately before the date the divorce became
effective.
"(5) The term `surviving divorced husband' means a man divorced "Surviving
from an individual who has died, but only if he had been married to divorced
the individual for a period of 10 years immediately before the husband."
divorce became effective.".
(2) The heading of section 216(d) of such Act is amended to read as
follows:
"Divorced Spouses; Divorce".
(d)(1) Section 205(b) of such Act is amended by inserting "divorced
husband," after "husband,", and by inserting "surviving divorced
husband," after "widower,".
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97 STAT. 112 PUBLIC LAW 98-21-APR. 20, 1983
42 UsC 405. (2) Section 205(c)(1)(C) of such Act is amended by inserting "surviv-
ing divorced husband," after "wife,".
42 USC 402. SEC. 302. Section 202(f)(1)(A) of the Social Security Act is amended
by striking out "has not remarried" and inserting in lieu thereof "is
not married".
42 USC 416. SEC. 303. (a) Section 216(h)(3) of the Social Security Act is amended
by inserting "mother or" before "father" wherever it appears.
(b) Section 216(h)(3)(A)(ii) of such Act is amended by striking out
all that follows "time" and inserting in lieu thereof "such appli-
cant's application for benefits was filed;".
(c) Section 216(h)(3)(B)(ii) of such Act is amended by striking out
"such period of disability began" and inserting in lieu thereof "such
applicant's application for benefits was filed".
(d) Section 216(h)(3) of such Act is further amended-
(1) by striking out "his" wherever it appears and inserting in
lieu thereof "his or her"; and
(2) by striking out "he" in subparagraph (B) and inserting in
lieu thereof "he or she".
42 USC 427. SEC. 304. (a) Section 227(a) of the Social Security Act is amended-
(1) by striking out "wife" wherever it appears and inserting in
lieu thereof "spouse";
(2) by striking out "wife's" wherever it appears and inserting
in lieu thereof "spouse's";
(3) by striking out "she" wherever it appears and inserting in
lieu thereof "he or she";
(4) by striking out "his" and inserting in lieu thereof "the";
and
(5) by inserting "or section 202(c)" after "section 202(b)" wher-
ever it appears.
(b) Section 227(b) and section 227(c) of such Act are amended-
(1) by striking out "widow" wherever it appears and inserting
in lieu thereof "surviving spouse";
(2) by striking out "widow's" wherever it appears and insert-
ing in lieu thereof "surviving spouse's";
(3) by striking out "her" wherever it appears and inserting in
lieu thereof "the"; and
(4) by inserting "or section 202(f)" after "section 202(e)" wher-
ever it appears.
Definitions. (c) Section 216 of such Act is amended by inserting before subsec-
42 USC 416. tion (b) the following new subsection:
"Spouse; Surviving Spouse
"(a)(1) The term `spouse' means a wife as defined in subsection (b)
or a husband as defined in subsection (f).
"(2) The term `surviving spouse' means a widow as defined in
subsection (c) or a widower as defined in subsection (g).".
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PUBLIC LAW 98-21-APR. 20, 1983 97 STAT. 113
EQUALIZATION OF BENEFITS UNDER SECTION 228
SEC. 305. (a) Section 228(b) of the Social Security Act is amended-
(1) by striking out "(1) Except as provided in paragraph (2),
the" and inserting in lieu thereof "The"; and
(2) by striking out paragraph (2).
(b) Section 228(c)(2) of such Act is amended by striking out "(B) the
larger of" and all that follows and inserting in lieu thereof "(B) the
benefit amount as determined without regard to this subsection.".
(c) Section 228(c)(3) of such Act is amended to read as follows:
"(3) In the case of a husband or wife both of whom are entitled to
benefits under this section for any month, the benefit amount of
each spouse, after any reduction under paragraph (1), shall be
further reduced (but not below zero) by the excess (if any) of (A) the
total amount of any periodic benefits under governmental pension
systems for which the other spouse is eligible for such month, over
(B) the benefit amount of such other spouse as determined without
regard to this subsection.".
(d) Section 228 of such Act is further amended-
(1) by striking out "he" wherever it appears in subsections (a)
and (c)(1) and inserting in lieu thereof "he or she"; and
(2) by striking out "his" in subsection (c)(4)(C) and inserting in
lieu thereof "his or her".
(e) The Secretary shall increase the amounts specified in section
228 of the Social Security Act, as amended by this section, to take
into account any general benefit increases (as referred to in section
215(i)(3) of such Act), and any increases under section 215(i) of such
Act, which have occurred after June 1974 or may hereafter occur.
FATHER'S INSURANCE BENEFITS
SEC. 306. (a) Section 202(g) of the Social Security Act is amended-
(1) by striking out "widow" wherever it appears and inserting
in lieu thereof "surviving spouse";
(2) by striking out "widow's" wherever it appears and insert-
ing in lieu thereof "surviving spouse's";
(3) by striking out "wife's insurance benefits" and "he" in
paragraph (1)(D) and inserting in lieu thereof "a spouse's insur-
ance benefit" and "such individual", respectively;
(4) by striking out "her" wherever it appears and inserting in
lieu thereof "his or her";
(5) by striking out "she" wherever it appears and inserting in
lieu thereof "he or she";
(6) by striking out "mother" wherever it appears and insert-
ing in lieu thereof "parent";
(7) by inserting "or father's" after "mother's" wherever it
appears;
(8) by striking out "after August 1950"; and
(9) in paragraph (3MA) (as amended by section 301(b)(6) of this
Act)-
(A) by inserting "this subsection or" before "subsection
(a)"; and
(B) by striking out "(c)," and inserting in lieu thereof "(b),
(c), (e),,,
(b) The heading of section 202(g) of such Act is amended by
inserting "and Father's" after "Mother's".
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97 STAT. 114 PUBLIC LAW 98-21-APR. 20, 1983
"Surviving
divorced father."
"Surviving
divorced
parent."
(c) Section 216(d) of such Act (as amended by section 301(c)(1) of
this Act) is further amended by redesignating paragraph (6) as
paragraph (8) and by inserting after paragraph (5) the following new
paragraphs:
"(6) The term `surviving divorced father' means a man divorced
from an individual who has died, but only if (A) he is the father of
her son or daughter, (B) he legally adopted her son or daughter
while he was married to her and while such son or daughter was
under the age of 18, (C) she legally adopted his son or daughter while
he was married to her and while such son or daughter was under
the age of 18, or (D) he was married to her at the time both of them
legally adopted a child under the age of 18.
"(7) The term `surviving divorced parent' means a surviving
divorced mother as defined in paragraph (3) of this subsection or a
surviving divorced father as defined in paragraph (6).".
(d) Section 202(c)(1) of such Act (as amended by section 301(a) of
this Act) is further amended by inserting "(subject to subsection (s))"
before "be entitled to" in the matter following subparagraph (D) and
preceding subparagraph (E).
(e) Section 202(c)(1)(B) of such Act is amended by inserting after
"62" the following: "or (in the case of a husband) has in his care
(individually or jointly with such individual) at the time of filing
such application a child entitled to child's insurance benefits on the
basis of the wages and self-employment income of such individual".
(f) Section 202(c)(1) of such Act (as amended by section 301(a) of
this Act and the preceding provisions of this section) is further
amended by redesignating the new subparagraphs (I) and (J) as
subparagraphs (J) and (K), respectively, and by inserting after sub-
paragraph (H) the following new subparagraph:
"(I) in the case of a husband who has not attained age 62, no
child of such individual is entitled to a child's insurance bene-
fit,".
(g) Section 20201)(C) of such Act is amended by inserting "(i)"
after "(C)", by inserting "or" after "223,", and by adding at the end
thereof the following new clause:
"(ii) was entitled, on the basis of such wages and self-employ-
ment income, to father's insurance benefits for the month
preceding the month in which he attained age 65, and".
(h) Section 202(0(5) of such Act (as redesignated by section
131(b)(3)(A) of this Act) is amended by striking out "or" at the end of
subparagraph (A), by redesignating subparagraph (B) as subpara-
graph (C), and by inserting immediately after subparagraph (A) the
following new subparagraph:
"(B) the last month for which he was entitled to father's
insurance benefits on the basis of the wages and self-employ-
ment income of such individual, or".
(i) Section 203(O(1)(F) of such Act is amended by striking out
"section 202(b) (but only by reason of having a child in her care
within the meaning of paragraph (1)(B) of that subsection)" and
inserting in lieu thereof "section 202(b) or (c) (but only by reason of
having a child in his or her care within the meaning of paragraph
(1)(B) of subsection (b) or (c), as may be applicable)".
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EFFECT OF MARRIAGE ON CHILDHOOD DISABILITY BENEFITS AND ON
OTHER DEPENDENTS' OR SURVIVORS' BENEFITS
SEC. 307. (a) Subsections (b)(3), (d)(5), (g)(3), and (h)(4) of section 202
of the Social Security Act (as amended by the preceding provisions
of this Act) are each amended by striking out "; except that" and all
that follows and inserting in lieu thereof a period.
(b) The amendments made by subsection (a) shall apply with
respect to benefits under title II of the Social Security Act for
months after the month in which this Act is enacted, but only in
cases in which the "last month" referred to in the provision
amended is a month after the month in which this Act is enacted.
SEC. 308. Section 217(f) of the Social Security Act is amended-
(1) by striking out "widow" each place it appears and insert-
ing in lieu thereof "surviving spouse'; and
(2) by striking out "his" and "her" wherever they appear
(except in clause (A) of paragraph (1)) and inserting in lieu
thereof in each instance "his or her".
Effective date.
42 USC 402 note.
42 USC 401.
SEC. 309. (a) Section 202(bX3)(A) of the Social Security Act (as 42 USC 402.
amended by section 301(a)(6) of this Act) is further amended by
inserting "(g)," after "(f),".
(b) Section 202(qX3) of such Act is amended by inserting "or
surviving divorced husband" after "widower" in subparagraphs (E),
(F), and (G).
(c) Section 202(q)(5) of such Act is amended-
(1) by inserting "or husband's" after "wife's" wherever it
appears;
(2) by striking out "her" in subparagraph (AXi) and inserting
in lieu thereof "him or her";
(3) by striking out "her" the second place it appears in
subparagraph (AXii) and inserting in lieu thereof "the";
(4) by striking out "she" wherever it appears and inserting in
lieu thereof "he or she";
(5) by striking out "her" wherever it appears (except where
paragraphs (2) and (3) of this subsection apply) and inserting in
lieu thereof "his or her";
(6) by striking out "the woman" in subparagraph (BXii) and "a
woman" in subparagraph (C) and inserting in lieu thereof "the
individual" and "an individual", respectively; and
(7) in subparagraph (D)-
(A) by inserting "or widower's" after "widow's";
(B) by striking out "husband" wherever it appears and
inserting in lieu thereof "spouse";
(C) by striking out "husband's" wherever it appears and
inserting in lieu thereof "spouse's"; and
(D) by inserting "or father's" after "mother's".
(dXl) Section 202(gX6)(A) of such Act (as amended by section
134(aX2) of this Act) is further amended by striking out "or hus-
band's" in clause (i) and by inserting "or husband's' after "wife's"
in clause (ii).
(2) Section 202(qX7) of such Act is amended-
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Child's
insurance
benefit,
entitlement.
42 USC 422.
(A) in subparagraph (B), by inserting "or husband's" after
"wife's", by striking out "she" and inserting in lieu thereof
"such individual", and by inserting "his or" before "her", and
(B) in subparagraph (D), by inserting "or widower's" after
"widow's".
(e)(1) Section 202(s)(1) of such Act is amended by inserting "(c)(1),"
after "(b)(1),".
(2) Section 202(s)(2) of such Act (as amended by section 131(c)(1) of
this Act) is further amended by inserting "(c)(4)," after "(b)(3),".
(3) Section 202(s)(3) of such Act (as amended by section 131(c)(2) of
this Act) is further amended by striking out "So much" and all that
follows down through "the last sentence" and inserting in lieu
thereof "The last sentence".
(f) The third sentence of section 203(b)(1) of such Act (as amended
by section 132(b) of this Act) is further amended by inserting "or
father's" after "mother's".
(g) Section 203(c) of such Act is amended to read as follows:
"Deductions on Account of Noncovered Work Outside the United
States or Failure to Have Child in Care
"(c) Deductions, in such amounts and at such time or times as the
Secretary shall determine, shall be made from any payment or
payments under this title to which an individual is entitled, until
the total of such deductions equals such individual's benefits or
benefit under section 202 for any month-
"(1) in which such individual is under the age of seventy and
for more than forty-five hours of which such individual engaged
in noncovered remunerative activity outside the United States;
"(2) in which such individual, if a wife or husband under age
sixty-five entitled to a wife's or husband's insurance benefit, did
not have in his or her care (individually or jointly with his or
her spouse) a child of such spouse entitled to a child's insurance
benefit and such wife's or husband's insurance benefit for such
month was not reduced under the provisions of section 202(q);
"(3) in which such individual, if a widow or widower entitled
to a mother's or father's insurance benefit, did not have in his
or her care a child of his or her deceased spouse entitled to a
child's insurance benefit; or
"(4) in which such an individual, if a surviving divorced
mother or father entitled to a mother's or father's insurance
benefit, did not have in his or her care a child of his or her
deceased former spouse who (A) is his or her son, daughter, or
legally adopted child and (B) is entitled to a child's insurance
benefit on the basis of the wages and self-employment income of
such deceased former spouse.
For purposes of paragraphs (2), (3), and (4) of this subsection, a child
shall not be considered to be entitled to a child's insurance benefit
for any month in which paragraph (1) of section 202(s) applies or an
event specified in section 222(b) occurs with respect to such child.
Subject to paragraph (3) of such section 202(s), no deduction shall be
made under this subsection from any child's insurance benefit for
the month in which the child entitled to such benefit attained the
age of eighteen or any subsequent month; nor shall any deduction be
made under this subsection from any widow's insurance benefit for
any month in which the widow or surviving divorced wife is entitled
and has not attained age 65 (but only if she became so entitled prior
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to attaining age 60), or from any widower's insurance benefit for any
month in which the widower or surviving divorced husband is
entitled and has not attained age 65 (but only if he became so
entitled prior to attaining age 60).".
(h) Section 203(d) of such Act is amended by inserting "divorced
husband," after "husband," in paragraph (1)(A) (as amended by
section 132(b)(2) of this Act) and by inserting "or father's" after
"mother's" each place it appears in paragraph (2).
(i)(1) Section 205(b) of such Act (as amended by section 301(d)(1) of
this Act) is further amended by inserting 'surviving divorced
father," after "surviving divorced mother,".
(2) Section 205(c)(1)(C) of such Act (as amended by section 301(d)(2)
of this Act) is further amended by inserting "surviving divorced
father," after "surviving divorced mother,".
U) Section 216(f)(3)(A) of such Act is amended by inserting "(c),"
before "(f)".
(k) Section 216(g)(6)(A) of such Act is amended by inserting "(c),"
before "(f)".
(1) Section 222(b)(1) of such Act is amended by striking out "or
surviving divorced wife" and inserting in lieu thereof ", surviving
divorced wife, or surviving divorced husband".
(m) Section 222(b)(2) of such Act is amended by inserting "or
father's" after "mother's" wherever it appears.
(n) Section 222(b)(3) of such Act is amended by inserting "divorced
husband," after "husband,".
(o) Section 223(d)(2) of such Act is amended by striking out "or
widower" in subparagraphs (A) and (B) and inserting in lieu thereof
"widower, or surviving divorced husband".
(p) Section 225(a) of such Act is amended by inserting "or surviv-
ing divorced husband" after "widower".
(q)(1) Section 226(e)(3) of such Act is amended to read as follows:
"(3) For purposes of determining entitlement to hospital insurance
benefits under subsection (b), any disabled widow aged 50 or older
who is entitled to mother's insurance benefits (and who would have
been entitled to widow's insurance benefits by reason of disability if
she had filed for such widow's benefits), and any disabled widower
aged 50 or older who is entitled to father's insurance benefits (and
who would have been entitled to widower's insurance benefits by
reason of disability if he had filed for such widower's benefits), shall,
upon application for such hospital insurance benefits be deemed to
have filed for such widow's or widower's insurance benefits.".
(2) For purposes of determining entitlement to hospital insurance
benefits under section 226(eX3) of such Act, as amended by para-
graph (1), an individual becoming entitled to such hospital insurance
benefits as a result of the amendment made by such paragraph
shall, upon furnishing proof of his or her disability within twelve
months after the month in which this Act is enacted, under such
procedures as the Secretary of Health and Human Services may
prescribe, be deemed to have been entitled to the widow's or widow-
er's benefits referred to in such section 226(e)(3), as so amended, as of
the time such individual would have been entitled to such widow's
or widower's benefits if he or she had filed a timely application
therefor.
Hospital
insurance
benefits.
42 USC 426.
SEC. 310. (a) Except as otherwise specifically provided in this title, 42 USC 402 note.
the amendments made by this part apply only with respect to
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97 STAT. 118 PUBLIC LAW 98-21-APR. 20, 1983
monthly benefits payable under title II of the Social Security Act for
months after the month in which this Act is enacted.
(b) Nothing in any amendment made by this part shall be con-
strued as affecting the validity of any benefit which was paid, prior
to the effective date of such amendment, as a result of a judicial
determination.
COVERAGE OF EMPLOYEES OF FOREIGN AFFILIATES OF AMERICAN
EMPLOYERS
SEC. 321. (a)(1) So much of subsection (1) of section 3121 of the
26 USC 3121. Internal Revenue Code of 1954 (relating to agreements entered into
by domestic corporations with respect to foreign subsidiaries) as
precedes the second sentence of paragraph (1) thereof is amended to
read as follows:
"(1) AGREEMENTS ENTERED INTO BY AMERICAN EMPLOYERS WITH
RESPECT TO FOREIGN AFFILIATES.-
"(1) AGREEMENT WITH RESPECT TO CERTAIN EMPLOYEES OF FOR-
EIGN AFFILIATE.-The Secretary shall, at the American employ-
er's request, enter into an agreement (in such manner and form
as may be prescribed by the Secretary) with any American
employer (as defined in subsection (h)) who desires to have the
insurance system established by title II of the Social Security
42 USC 401. Act extended to service performed outside the United States in
the employ of any 1 or more of such employer's foreign affiliates
(as defined in paragraph (8)) by all employees who are citizens
or residents of the United States, except that the agreement
shall not apply to any service performed by, or remuneration
paid to, an employee if such service or remuneration would be
excluded from the term `employment' or `wages', as defined in
this section, had the service been performed in the United
States."
26 USC 3121. (2) Paragraph (8) of section 3121(1) of such Code (defining foreign
subsidiary) is amended to read as follows:
"(8) FOREIGN AFFILIATE DEFINED.-For purposes of this subsec-
42 U SC 410. tion and section 210(a) of the Social Security Act-
"(A) IN GENERAL.-A foreign affiliate of an American
employer is any foreign entity in which such American
employer has not less than a 10-percent interest.
"(B) DETERMINATION OF 10-PERCENT INTEREST.-For pur-
poses of subparagraph (A), an American employer has a 10-
percent interest in any entity if such employer has such an
interest directly (or through one or more entities)-
"(0 in the case of a corporation, in the voting stock
thereof, and
"(ii) in the case of any other entity, in the profits
thereof."
(b) The clause (B) of section 210(a) of the Social Security Act
(defining employment) which precedes paragraph (1) thereof (as
amended by section 323(aX2) of this Act) is further amended to read
as follows: "(B) outside the United States by a citizen or resident of
the United States as an employee (i) of an American employer (as
defined in subsection (e) of this section), or (ii) of a foreign affiliate
Supra. (as defined in section 3121(1)(8) of the Internal Revenue Code of 1954)
of an American employer during any period for which there is in
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effect an agreement, entered into pursuant to section 3121(1) of such
Code, with respect to such affiliate,". 26 USC 3121.
(c) Subsection (a) of section 406 of the Internal Revenue Code of
1954 (relating to treatment of certain employees of foreign subsidiar- 26 usC 406.
ies for pension, etc., purposes) is amended to read as follows:
"(a) TREATMENT AS EMPLOYEES OF AMERICAN EMPLOYER.-For pur-
poses of applying this part with respect to a pension, profit-sharing,
or stock bonus plan described in section 401(a), an annuity plan
described in section 403(a), or a bond purchase plan described in
section 405(a), of an American employer (as defined in section
3121(h)), an individual who is a citizen or resident of the United
States and who is an employee of a foreign affiliate (as defined in
section 3121(1)(8)) of such American employer shall be treated as an Ante, p. 118.
employee of such American employer, if-
"(1) such American employer has entered into an agreement
under section 3121(1) which applies to the foreign affiliate of
which such individual is an employee;
"(2) the plan of such American employer expressly provides
for contributions or benefits for individuals who are citizens or
residents of the United States and who are employees of its
foreign affiliates to which an agreement entered into by such
American employer under section 3121(1) applies; and
"(3) contributions under a funded plan of deferred compensa-
tion (whether or not a plan described in section 401(a), 403(a), or
405(a)) are not provided by any other person with respect to the
remuneration paid to such individual by the foreign affiliate."
(d) Paragraph (1) of section 407(a) of such Code (relating to certain 26 usC 407.
employees of domestic subsidiaries engaged in business outside the
United States) is amended-
(1) by striking out "citizen of the United States" and inserting
in lieu thereof "citizen or resident of the United States", and
(2) by striking out "citizens of the United States" and insert-
ing in lieu thereof "citizens or residents of the United States".
(e)(1) Those provisions of subsection (1) of section 3121 of such Code 26 usC 3121.
which are not amended by subsection (a) of this section are amended
in accordance with the following table:
Strike out (wherever it appears
in the text or heading): And insert:
domestic corporation ................. American employer
domestic corporations ................ American employers
subsidiary .................................... affiliate
subsidiaries .................................. affiliates
foreign corporation .................... foreign entity
foreign corporations ................... foreign entities
citizens ......................................... citizens or residents
the word "a" where it appears an
before "domestic".
(2XA) Section 406 of such Code (other than subsection (a) thereof)
is amended in accordance with the following table:
Strike out (wherever appearing
in the text): And insert:
domestic corporation ................. American employer
subsidiary .................................... affiliate
the word "a" where it appears an
before "domestic".
(B) Paragraph (3) of subsection (c) of such section 406 (as in effect
before the amendment made by subparagraph (A)) is amended by
striking out "another corporation controlled by such domestic corpo-
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97 STAT. 120 PUBLIC LAW 98-21-APR. 20, 1983
ration" and inserting in lieu thereof "another entity in which such
American employer has not less than a 10-percent interest (within
Ante, p. 118. the meaning of section 3121(1)(8)(B))".
26 use 406. (C)(i) So much of subsection (d) of such section 406 as precedes
paragraph (1) thereof is amended by striking out "another corpora-
tion' and inserting in lieu thereof "another taxpayer".
(ii) Paragraph (1) of subsection (d) of such section 406 is amended
by striking out "any other corporation" and inserting in lieu thereof
"any other taxpayer".
(D)(i) The heading of such section 406 is amended to read as
follows:
"SEC. 406. EMPLOYEES OF FOREIGN AFFILIATES COVERED BY SECTION
3121(1) AGREEMENTS.".
(ii) The table of sections for subpart A of part I of subchapter D of
chapter 1 of such Code is amended by striking out the item relating
to section 406 and inserting in lieu thereof the following:
"Sec. 406. Employees of foreign affiliates covered by section 3121(l) agree-
ments."
(3) Clause (A) of the second sentence of section 1402(b) of such
26 use 1402. Code (defining self-employment income) is amended by striking out
"employees of foreign subsidiaries of domestic corporations" and
inserting in lieu thereof "employees of foreign affiliates of American
employers".
26 use 6413. (4)(A) Subparagraph (C) of section 6413(c)(2) of such Code (relating
to special refunds of FICA taxes in the case of employees of certain
foreign corporations) is amended-
(i) by striking out "FOREIGN CORPORATIONS" in the heading
and inserting in lieu thereof "FOREIGN AFFILIATES", and
(ii) by striking out "domestic corporation" in the text and
inserting in lieu thereof "American employer".
(B) The heading of paragraph (2) of section 6413(c) of such Code is
amended by striking out "FOREIGN CORPORATIONS" and inserting in
lieu thereof "FOREIGN AFFILIATES".
Effective dates. (f)(1)(A) The amendments made by this section (other than subsec-
26 use 406 note. tion (d)) shall apply to agreements entered into after the date of the
enactment of this Act.
(B) At the election of any American employer, the amendments
made by this section (other than subsection (d)) shall also apply to
any agreement entered into on or before the date of the enactment
of this Act. Any such election shall be made at such time and in
such manner as the Secretary may by regulations prescribe.
(2)(A) The amendments made by subsection (d) shall apply to plans
established after the date of the enactment of this Act.
(B) At the election of any domestic parent corporation the amend-
ments made by subsection (d) shall also apply to any plan estab-
lished on or before the date of the enactment of this Act. Any such
election shall be made at such time and in such manner as the
Secretary may by regulations prescribe.
EXTENSION OF COVERAGE BY INTERNATIONAL SOCIAL SECURITY
AGREEMENT
SEC. 322. (a)(1) Section 210(a) of the Social Security Act (as amended
by sections 321(b) and 323(a)(2) of this Act) is further amended, in
the matter preceding paragraph (1)-
(A) by striking out "either" before "(A)", and
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(B) by inserting before "; except" the following: ", or (C) if it is
service, regardless of where or by whom performed, which is
designated as employment or recognized as equivalent to em-
ployment under an agreement entered into under section 233". 42 USC 433.
(2) Section 3121(b) of the Internal Revenue Code of 1954 is 26 use 3121.
amended, in the matter preceding paragraph (1)-
(A) by striking out "either" before "(A)", and
(B) by inserting before "; except" the following: ", or (C) if it is
service, regardless of where or by whom performed, which is
designated as employment or recognized as equivalent to
employment under an agreement entered into under section 233
of the Social Security Act". 42 USC 433.
(b)(1) Section 211(b) of the Social Security Act is amended by 42 usC 411.
inserting after "non-resident alien individual" the following: ",
except as provided by an agreement under section 233".
(2) The first sentence of section 1402(b) of the Internal Revenue
Code of 1954 is amended by inserting after "non-resident alien 26 Usc 1402.
individual" the following: ", except as provided by an agreement
under section 233 of the Social Security Act".
(c) The amendments made by this section shall be effective for Effective date.
taxable years beginning on or after the date of the enactment of this 26 usC 3121
Act. note.
TREATMENT OF CERTAIN SERVICE PERFORMED OUTSIDE THE UNITED
STATES
SEC. 323. (a)(1) Subsection (b) of section 3121 of the Internal
Revenue Code of 1954 (defining employment) is amended by striking
out "a citizen of the United States" in the matter preceding para-
graph (1) thereof and inserting in lieu thereof "a citizen or resident
of the United States".
(2) Subsection (a) of section 210 of the Social Security Act is
amended by striking out "a citizen of the United States" in the
matter preceding paragraph (1) thereof and inserting in lieu thereof
"a citizen or resident of the United States".
(b)(1) Paragraph (11) of section 1402(a) of the Internal Revenue
Code of 1954 (defining net earnings from self-employment) is
amended by striking out "in the case of an individual described in
section 911(d)(1)(B),".
(2)(A) Paragraph (10) of section 211(a) of the Social Security Act (as
amended by section 124(cX3) of this Act) is further amended to read
as follows:
"(10) The exclusion from gross income provided by section
911(aXl) of the Internal Revenue Code of 1954 shall not apply;".
(B) Effective with respect to taxable years beginning after Decem-
ber 31, 1981, and before January 1, 1984, paragraph (10) of section
211(a) of such Act is amended to read as follows:
"(10) In the case of an individual described in section
911(d)(1)(B) of the Internal Revenue Code of 1954, the exclusion
from gross income provided by section 911(a)(1) of such Code
shall not apply;".
(cXl) The amendments made by subsection (a) shall apply to
remuneration paid after December 31, 1983.
(2) Except as provided in subsection (bX2XB), the amendments
made by subsection (b) shall apply to taxable years beginning after
December 31, 1983.
26 USC 3121.
26 USC 410.
26 USC 1402.
Ante, p. 90.
26 USC 911.
Effective dates.
26 USC 3121
note.
26 USC 1402
note.
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97 STAT. 122 PUBLIC LAW 98-21-APR. 20, 1983
AMOUNTS RECEIVED UNDER CERTAIN DEFERRED COMPENSATION AND
SALARY REDUCTION ARRANGEMENTS TREATED AS WAGES FOR FICA
TAXES
SEC. 324. (a)(1) Section 3121 of the Internal Revenue Code of 1954
(relating to definitions) is amended by adding at the end thereof the
following new subsection:
"(v) TREATMENT OF CERTAIN DEFERRED COMPENSATION AND SALARY
REDUCTION ARRANGEMENTS.-
"(1) CERTAIN EMPLOYER CONTRIBUTIONS TREATED AS WAGES.-
Nothing in any paragraph of subsection (a) (other than para-
graph (1)) shall exclude from the term `wages'-
"(A) any employer contribution under a qualified cash or
deferred arrangement (as defined in section 401(k)) to the
extent not included in gross income by reason of section
402(aX8), or
"(B) any amount treated as an employer contribution
under section 414(h)(2).
"(2) TREATMENT OF CERTAIN NONQUALIFIED DEFERRED COMPEN-
SATION PLANS.-
"(A) IN GENERAL.-Any amount deferred under a non-
qualified deferred compensation plan shall be taken into
account for purposes of this chapter as of the later of-
"(i) when the services are performed, or
"(ii) when there is no substantial risk of forefeiture of
the rights to such amount.
"(B) TAXED ONLY ONCE.-Any amount taken into account
as wages by reason of subparagraph (A) (and the income
attributable thereto) shall not thereafter be treated as
wages for purposes of this chapter.
"(C) NONQUALIFIED DEFERRED COMPENSATION PLAN.-For
purposes of this paragraph, the term `nonqualified deferred
compensation plan' means any plan or other arrangement
for deferral of compensation other than a plan described in
subsection (a)(5).
"(3) EXEMPT GOVERNMENTAL DEFERRED COMPENSATION PLAN.-
For purposes of subsection (aX5), the term `exempt governmen-
tal deferred compensation plan' means any plan providing for
deferral of compensation established and maintained for its
employees by the United States, by a State or political subdivi-
sion thereof, or by an agency or instrumentality of any of the
foregoing. Such term shall not include-
"(A) any plan to which section 83, 402(b), 403(c), 457(a), or
457(e)(1) applies, and
"(B) any annuity contract described in section 403(b)."
(2) Paragraph (5) of section 3121(a) of such Code (defining wages) is
amended-
(A) by striking out "or" at the end of subparagraph (C),
(B) by striking out the semicolon at the end of subparagraph
(D) and inserting in lieu thereof a comma, and
(C) by adding at the end thereof the following new subpara-
graphs:
"(E) under or to an annuity contract described in section
403(b), other than a payment for the purchase of such
contract which is made by reason of a salary reduction
agreement (whether evidenced by a written instrument or
otherwise),
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"(F) under or to an exempt governmental deferred com-
pensation plan (as defined in subsection (03)), or
"(G) to supplement pension benefits under a plan or trust
described in any of the foregoing provisions of this para-
graph to take into account some portion or all of the
increase in the cost of living (as determined by the Secre-
tary of Labor) since retirement but only if such supplemen-
tal payments are under a plan which is treated as a welfare
plan under section 3(2XBXii) of the Employee Retirement
Income Security Act of 1974;". 29 USC 1002.
(3) Subsection (a) of section 3121 of such Code (defining wages) is 26 USC 3121.
amended-
(A) in paragraph (2), by striking out subparagraph (A) and
redesignating subparagraphs (B), (C), and (D) as subparagraphs
(A), (B), and (C), respectively,
(B) by striking out paragraphs (3) and (9),
(C) in paragraph (13XA)-
(i) by inserting "or" after "death,", and
(ii) by striking out "or (iii) retirement after attaining an
age specified in the plan referred to in subparagraph (B) or
in a pension plan of the employer,", and
(D) by striking out "subparagraph (B)" in the last sentence
thereof and inserting in lieu thereof "subparagraph (A)".
(b)(1) Section 3306 of the Internal Revenue Code of 1954 (relating 26 UsC 3306.
to definitions) is amended by adding at the end thereof the following
new subsection:
"(r) TREATMENT OF CERTAIN DEFERRED COMPENSATION AND SALARY
REDUCTION ARRANGEMENTS.-
"(1) CERTAIN EMPLOYER CONTRIBUTIONS TREATED AS WAGES.-
Nothing in any paragraph of subsection (b) (other than para-
graph (1)) shall exclude from the term 'wages'-
"(A) any employer contribution under a qualified cash or
deferred arrangement (as defined in section 401(k)) to the
extent not included in gross income by reason of section
402(aX8), or
"(B) any amount treated as an employer contribution
under section 414(hX2).
"(2) TREATMENT OF CERTAIN NONQUALIFIED DEFERRED COMPEN-
SATION PLANS.-
"(A) IN GENERAL.-Any amount deferred under a non-
qualified deferred compensation plan shall be taken into
account for purposes of this chapter as of the later of-
"(i) when the services are performed, or
"(ii) when there is no substantial risk of forfeiture of
the rights to such amount.
"(B) TAXED ONLY ONCE.-Any amount taken into account
as wages by reason of subparagraph (A) (and the income
attributable thereto) shall not thereafter be treated as
wages for purposes of this chapter.
(C) NONQUALIFIED DEFERRED COMPENSATION PLAN.-For
purposes of this paragraph, the term `nonqualified deferred
compensation plan' means any plan or other arrangement
for deferral of compensation other than a plan described in
subsection (bX5)."
(2) Paragraph (5) of section 3306(b) of such Code (defining wages) is
amended-
(A) by striking out "or" at the end of subparagraph (C),
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29 USC 1002.
26 USC 3306.
26 USC 3201 et
seq
26 USC 3306
note.
26 USC 3121
note.
(B) by striking out the semicolon at the end of subparagraph
(D) and inserting in lieu thereof a comma, and
(C) by adding at the end thereof the following new subpara-
graphs:
"(E) under or to an annuity contract described in section
403(b), other than a payment for the purchase of such contract
which is made by reason of a salary reduction agreement
(whether evidenced by a written instrument or otherwise),
"(F) under or to an exempt governmental deferred compensa-
tion plan (as defined in section 3121(v)(3)), or
"(G) to supplement pension benefits under a plan or trust
described in any of the foregoing provisions of this paragraph to
take into account some portion or all of the increase in the cost
of living (as determined by the Secretary of Labor) since retire-
ment but only if such supplemental payments are under a plan
which is treated as a welfare plan under section 3(2)(BXii) of the
Employee Retirement Income Security Act of 1974;".
(3) Subsection (b) of section 3306 of such Code (defining wages) is
amended-
(A) in paragraph (2), by striking out subparagraph (A) and
redesignating subparagraphs (B), (C), and (D) as subparagraphs
(A), (B), and (C), respectively,
(B) by striking out paragraphs (3) and (8), and
(C) in paragraph (10)(A)-
(i) by inserting "or" after "death,", and
(ii) by striking out "or (iii) retirement after attaining an
age specified in the plan referred to in subparagraph (B) or
in a pension plan of the employer,".
(4)(A) Subparagraph (A) of section 3306(bX2) of such Code, as
redesignated by paragraph (3)(A), is amended to read as follows:
"(A) sickness or accident disability (but, in the case of pay-
ments made to an employee or any of his dependents, this
subparagraph shall exclude from the term `wages' only pay-
ments which are received under a workman's compensation
law), or".
(B) Subsection (b) of section 3306 of such Code (defining wages) is
amended by adding at the end thereof the following new flush
sentence:
"Except as otherwise provided in regulations prescribed by the
Secretary, any third party which makes a payment included in
wages solely by reason of the parenthetical matter contained in
subparagraph (A) of paragraph (2) shall be treated for purposes of
this chapter and chapter 22 as the employer with respect to such
wages."
(C) Rules similar to the rules of subsections (d) and (e) of section 3
of the Act entitled "An Act to amend the Omnibus Reconciliation
Act of 1981 to restore minimum benefits under the Social Security
Act" (Public Law 97-123), approved December 29, 1981, shall apply
in the administration of section 3306(b)(2)(A) of such Code (as
amended by subparagraph (A)).
(cX1) Section 209 of the Social Security Act (as amended by section
101(cX1) of this Act) is further amended by adding at the end thereof
the following new paragraphs:
"Nothing in any of the foregoing provisions of this section (other
than subsection (a)) shall exclude from the term `wages'-
"(1) Any employer contribution under a qualified cash or
deferred arrangement (as defined in section 401(k) of the Inter-
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nal Revenue Code of 1954) to the extent not included in gross 26 Usc 401.
income by reason of section 402(aX8) of such Code, or
"(2) Any amount which is treated as an employer contribution
under section 414(hX2) of such Code.
"Any amount deferred under a nonqualified deferred compensa-
tion plan (within the meaning of section 3121(vX2XC) of the Internal
Revenue Code of 1954) shall be taken into account for purposes of A-ite, p. 122.
this title as of the later of when the services are performed, or when
there is no substantial risk of forfeiture of the rights to such
amount. Any amount taken into account as wages by reason of the
preceding sentence (and the income attributable thereto) shall not
thereafter be treated as wages for purposes of this title."
(2) Subsection (e) of section 209 of such Act is amended by adding 42 Usc 409.
before the semicolon at the end thereof the following: ", or (5) under
or to an annuity contract described in section 403(b) of the Internal
Revenue Code of 1954, other than a payment for the purchase of 26 use 403.
such contract which is made by reason of a salary reduction agree-
ment (whether evidenced by a written instrument or otherwise), or
(6) under or to an exempt governmental deferred compensation plan
(as defined in section 3121(vX3) of such Code), or (7) to supplement Ante, p. 122.
pension benefits under a plan or trust described in any of the
foregoing provisions of this subsection to take into account some
portion or all of the increase in the cost of living (as determined by
the Secretary of Labor) since retirement but only if such supplemen-
tal payments are under a plan which is treated as a welfare plan
under section 3(2XBXii) of the Employee Retirement Income Secu-
rity Act of 1974;". 29 USC 1002.
(3) Section 209 of such Act is amended- 42 USC 409.
(A) in subsection (b), by striking out paragraph (1) and redes-
ignating paragraphs (2), (3), and (4) as paragraphs (1), (2), and
(3), respectively,
(B) by striking out subsections (c) and (i), and
(C) in subsection (mXl)-
(i) by inserting "or" after "death,", and
(ii) by striking out "or (C) retirement after attaining an
age specified in the plan referred to in paragraph (2) or in a
pension plan of the employer,".
(4) Section 203(f)(5XC) of the Social Security Act is amended by 42 use 403.
adding at the end thereof the following new sentence: "The term
`wages' does not include-
"(D the amount of any payment made to, or on behalf of,
an employee or any of his dependents (including any
amount paid by an employer for insurance or annuities, or
into a fund, to provide for any such payment) on account of
retirement, or
"(ii) any payment or series of payments by an employer to
an employee or any of his dependents upon or after the
termination of the employee's employment relationship be-
cause of retirement after attaining an age specified in a
plan referred to in section 209(mX2) or in a pension plan of 42 use 409.
the employer."
(dXl) Except as otherwise provided in this subsection, the amend- Effective
ments made by this section shall apply to remuneration paid after dates.
December 31, 1983. 26 Usc 3121
(2) Except as otherwise provided in this subsection, the amend-
ments made by subsection (b) shall apply to remuneration paid after
December 31, 1984.
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97 STAT. 126 PUBLIC LAW 98-21-APR. 20, 1983
Employer contri- (3) The amendments made by this section shall not apply to
butions. employer contributions made during 1984 and attributable to serv-
ices performed during 1983 under a qualified cash or deferred
arrangement (as defined in section 401(k) of the Internal Revenue
26 USC 401. Code of 1954) if, under the terms of such arrangement as in effect on
March 24, 1983-
(A) the employee makes an election with respect to such
contribution before January 1, 1984, and
(B) the employer identifies the amount of such contribution
before January 1, 1984.
In the case of the amendments made by subsection (b), the preceding
sentence shall be applied by substituting "1985" for "1984" each
place it appears and by substituting "during 1984" for "during
1983".
(4) In the case of an agreement in existence on March 24, 1983,
between a nonqualified deferred compensation plan (as defined in
Ante, p. 122. section 3121(vX2)(C) of the Internal Revenue Code of 1954, as added
by this section) and an individual-
(A) the amendments made by this section (other than subsec-
tion (b)) shall apply with respect to services performed by such
individual after December 31, 1983, and
(B) the amendments made by subsection (b) shall apply with
respect to services performed by such individual after December
31, 1984.
The preceding sentence shall not apply in the case of a plan to
26 USC 457. which section 457(a) of such Code applies.
EFFECT OF CHANGES IN NAMES OF STATE AND LOCAL EMPLOYEE GROUPS
IN UTAH
42 USC 418. SEC. 325. (a) Section 218(o) of the Social Security Act is amended
by adding at the end thereof the following new sentence: "Coverage
provided for in this subsection shall not be affected by a subsequent
change in the name of a group.".
Effective (b) The amendment made by subsection (a) shall apply with
date. respect to name changes made before, on, or after the date of the
42 e, 418
enactment of this section.
note.
Effective
date.
42 USC 433 note.
SEC. 326. (a) Section 233(eX2) of the Social Security Act is amended
by striking out "during which each House of the Congress has been
in session on each of 90 days" and inserting in lieu thereof "during
which at least one House of the Congress has been in session on each
of 60 days".
(b) The amendment made by subsection (a) shall be effective on
the date of the enactment of this Act.
CODIFICATION OF ROWAN DECISION WITH RESPECT TO MEALS AND
LODGING
SEC. 327. (01) Subsection (a) of section 3121 of the Internal
Revenue Code of 1954 (defining wages) is amended by striking out
"or" at the end of paragraph (17), by striking out the period at the
end of paragraph (18) and inserting in lieu thereof "; or", and by
inserting after paragraph (18) the following new paragraph:
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"(19) the value of any meals or lodging furnished by or on
behalf of the employer if at the time of such furnishing it is
reasonable to believe that the employee will be able to exclude
such items from income under section 119.".
(2) Section 209 of the Social Security Act is amended by striking 42 Usc 409.
out "or" at the end of the subsection (p) which was added by Public
Law 95-472, by striking out the period at the end of subsection (q) 92 Stat. 1333.
and inserting in lieu thereof ` ; or", and by inserting after subsection
(q) the following new subsection:
"(r) The value of any meals or lodging furnished by or on behalf of
the employer if at the time of such furnishing it is reasonable to
believe that the employee will be able to exclude such items from
income under section 119 of the Internal Revenue Code of 1954.". 26 Usc 119.
(b)(1) Subsection (a) of section 3121 of such Code is amended by 26 USC 3121.
inserting after and below paragraph (19) (as added by subsection (a)
of this section) the following new sentence:
"Nothing in the regulations prescribed for purposes of chapter 24
(relating to income tax withholding) which provides an exclusion
from `wages' as used in such chapter shall be construed to require a
similar exclusion from `wages' in the regulations prescribed for
purposes of this chapter.".
(2) Section 209 of the Social Security Act is amended by inserting 42 UsC 409.
immediately after and below subsection (r) (as added by subsection
(a) of this section) the following new sentence:
"Nothing in the regulations prescribed for purposes of chapter 24 of
the Internal Revenue Code of 1954 (relating to income tax withhold- 26 USC 3401
ing) which provides an exclusion from `wages' as used in such et seq.
chapter shall be construed to require a similar exclusion from
`wages' in the regulations prescribed for purposes of this title.".
(c) Subsection (b) of section 3306 of the Internal Revenue Code of
1954 (defining wages) is amended- 26 Usc 3306.
(1) by striking out "or" at the end of paragraph (12),
(2) by striking out the period at the end of paragraph (13) and
inserting in lieu thereof ", or",
(3) by adding immediately after paragraph (13) the following
new paragraph:
"(14) the value of any meals or lodging furnished by or on
behalf of the employer if at the time of such furnishing it is
reasonable to believe that the employee will be able to exclude
such items from income under section 119.", and
(4) by adding at the end thereof the following new flush
sentence:
"Nothing in the regulations prescribed for purposes of chapter 24
(relating to income tax withholding) which provides an exclusion
from `wages' as used in such chapter shall be construed to require a
similar exclusion from `wages' in the regulations prescribed for
purposes of this chapter.".
(01) Except as provided in paragraph (2), the amendments made Effective
by subsections (a) and (b) shall apply to remuneration paid after dates.
December 31, 1983. 26 USC 3121
(2) The amendments made by subsection (c) shall apply to remu- note.
neration paid after December 31, 1984.
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97 STAT. 128 PUBLIC LAW 98-21-APR. 20, 1983
SEC. 328. (a) Subparagraph (D) of section 3121(a)(5) of the Internal
26 USC 3121. Revenue Code of 1954 (defining wages) is amended by striking out
"section 219" and inserting in lieu thereof "section 219(b)(2)".
42 USC 409. (b) Subsection (e) of section 209 of the Social Security Act, (as
amended by section 324(c)(2) of this Act) is further amended by
striking out the semicolon at the end thereof and inserting in lieu
thereof the following: ", or (8) under a simplified employee pension
26 USC 408. (as defined in section 408(k) of the Internal Revenue Code of 1954) if,
at the time of the payment, it is reasonable to believe that the
employee will be entitled to a deduction under section 219(b)(2) of
such Code for such payment;".
(c) Subparagraph (D) of section 3306(b)(5) of the Internal Revenue
26 USC 3306. Code of 1954 is amended by striking out "section 219" and inserting
in lieu thereof "section 219(bX2)".
Effective dates. (d)(1) Except as provided in paragraph (2), the amendments made
26 USC 3121 by this section shall apply to remuneration paid after December 31,
note. 1983.
(2) The amendments made by subsection (c) shall apply to remu-
neration paid after December 31, 1984.
TECHNICAL AND CONFORMING AMENDMENTS TO MAXIMUM
FAMILY BENEFIT PROVISIONS
42 USC 403. SEC. 331. (a)(1) Section 203(a)(3XA) of the Social Security Act is
amended by striking out clause (ii) and inserting in lieu thereof the
following:
"(ii) an amount (I) initially equal to the product of 1.75 and
the primary insurance amount that would be computed under
42 USC 415. section 215(aXl), for January of the year determined for pur-
poses of this clause under the following two sentences, with
respect to average indexed monthly earnings equal to one-
twelfth of the contribution and benefit base determined for that
42 USC 430. year under section 230, and (II) thereafter increased in accord-
ance with the provisions of section 215(iX2XA)(ii).
The year established for purposes of clause (ii) shall be 1983 or, if it
occurs later with respect to any individual, the year in which
occurred the month that the application of the reduction provisions
contained in this subparagraph began with respect to benefits pay-
able on the basis of the wages and self-employment income of the
insured individual. If for any month subsequent to the first month
for which clause (ii) applies (with respect to benefits payable on the
basis of the wages and self-employment income of the insured
individual) the reduction under this subparagraph ceases to apply,
then the year determined under the preceding sentence shall be
redetermined (for purposes of any subsequent application of this
subparagraph with respect to benefits payable on the basis of such
wages and self-employment income) as though this subparagraph
had not been previously applicable.".
(2) Section 203(aX7) of such Act is amended by striking out every-
thing that follows "shall be reduced to an amount equal to" and
inserting in lieu thereof "the amount determined in accordance with
the provisions of paragraph (3)(AXii) of this subsection, except that
for this purpose the references to subparagraph (A) in the last two
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PUBLIC LAW 98-21-APR. 20, 1983 97 STAT. 129
sentences of paragraph (3)(A) shall be deemed to be references to
paragraph (7).".
(b) Clause (i) in the last sentence of section 203(b)(1) of such Act (as
amended by section 132(b) of this Act) is further amended by strik-
ing out "penultimate sentence" and inserting in lieu thereof "first
sentence of paragraph (4)".
(c) The amendments made by subsection (a) shall be effective with
respect to payments made for months after December 1983.
RELAXATION OF INSURED STATUS REQUIREMENTS FOR CERTAIN
WORKERS PREVIOUSLY ENTITLED TO A PERIOD OF DISABILITY
SEC. 332. (a) Section 216(iX3) of the Social Security Act is
amended-
(1) by striking out the semicolon at the end of clause (ii) of
subparagraph (B) and inserting in lieu thereof ", or"; and
(2) by inserting after clause (ii) of such subparagraph the
following new clause:
"(iii) in the case of an individual (not otherwise insured under
clause (i)) who, by reason of clause (ii), had a prior period of
disability that began during a period before the quarter in
which he or she attained age 31, not less than one-half of the
quarters beginning after such individual attained age 21 and
ending with such quarter are quarters of coverage, or (if the
number of quarters in such period is less than 12) not less than
6 of the quarters in the 12-quarter period ending with such
quarter are quarters of coverage;".
(b) Section 223(cX1XB) of such Act is amended-
(1) by striking out the semicolon at the end of clause (ii) and
inserting in lieu thereof ", or"; and
(2) by inserting after clause (ii) the following new clause:
"(iii) in the case of an individual (not otherwise
insured under clause (i)) who, by reason of section
216(iX3XBXii), had a prior period of disability that
began during a period before the quarter in which he or
she attained age 31, not less than one-half of the quar-
ters beginning after such individual attained age 21
and ending with the quarter in which such month
occurs are quarters of coverage, or (if the number of
quarters in such period is less than 12) not less than 6
of the quarters in the 12-quarter period ending with
such quarter are quarters of coverage; .
(c) The amendments made by this section shall be effective with
respect to applications for disability insurance benefits under sec-
tion 223 of the Social Security Act, and for disability determinations
under section 216(i) of such Act, filed after the date of the enactment
of this Act, except that no monthly benefits under title II of the
Social Security Act shall be payable or increased by reason of the
amendments made by this section for months before the month
following the month of enactment of this Act.
PROTECTION OF BENEFITS OF ILLEGITIMATE CHILDREN OF DISABLED
BENEFICIARIES
SEC. 333. (a) The last sentence of section 216(h)(3) of the Social
Security Act is amended by striking out "subparagraph (AXi)" and
inserting in lieu thereof "subparagraphs (AXi) and (BXi)".
Effective date.
42 USC 403 note.
Effective date.
42 USC 416 note.
42 USC 423.
42 USC 416.
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97 STAT. 130 PUBLIC LAW 98-21-APR. 20, 1983
Effective date. (b) The amendment made by subsection (a) shall be effective on
ONE-MONTH RETROACTIVITY OF WIDOW'S AND WIDOWER'S INSURANCE
BENEFITS
42 Usc 402. SEC. 334. (a) Section 202(j)(4)(B) of the Social Security Act is
amended-
(1) by redesignating clauses (iii) and (iv) as clauses (iv) and (v),
respectively; and
(2) by adding after clause (ii) the following new clause:
"(iii) Subparagraph (A) does not apply to a benefit under subsec-
tion (e) or (f) for the month immediately preceding the month of
application, if the insured individual died in that preceding month.".
Effective date. (b) The amendments made by subsection (a) shall apply with
42 USC 402 note. respect to survivors whose applications for monthly benefits are
filed after the second month following the month in which this Act
is enacted.
42 USC 407. SEC. 335. (a) Section 207 of the Social Security Act is amended-
(1) by inserting "(a)" before "The right"; and
(2) by adding at the end thereof the following new subsection:
"(b) No other provision of law, enacted before, on, or after the date
of the enactment of this section, may be construed to limit, super-
sede, or otherwise modify the provisions of this section except to the
extent that it does so by express reference to this section.".
42 USC 659. (b)(1) Section 459(a) of such Act is amended by inserting "(includ-
ing section 207)" after "any other provision of law".
(2)(A) Section 86(a) of the Internal Revenue Code of 1954 (as added
Ante, p. 80. by section 121(a) of this Act) is amended by inserting "(notwith-
standing section 207 of the Social Security Act)" before "includes".
(B) Section 871(a)(3)(A) of such Code (as added by section 121(c)(1)
Ante, p. 82. of this Act) is amended by inserting "(notwithstanding section 207 of
the Social Security Act)" after "income".
Effective date. (c) The amendments made by subsection (a) shall apply only with
42 USC 407 note. respect to benefits payable or rights existing under the Social
Security Act on or after the date of the enactment of this Act.
USE OF DEATH CERTIFICATES TO PREVENT ERRONEOUS BENEFIT
PAYMENTS TO DECEASED INDIVIDUALS
SEC. 336. Section 205 of the Social Security Act is amended by
adding at the end thereof the following new subsection:
"USE OF DEATH CERTIFICATES TO CORRECT PROGRAM INFORMATION
"(rX1) The Secretary shall undertake to establish a program under
which-
"(A) States (or political subdivisions thereof) voluntarily con-
tract with the Secretary to furnish the Secretary periodically
with information (in a form established by the Secretary in
consultation with the States) concerning individuals with
respect to whom death certificates (or equivalent documents
maintained by the States or subdivisions) have been officially
filed with them; and
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PUBLIC LAW 98-21-APR. 20, 1983 97 STAT. 131
"(B) there will be (i) a comparison of such information on such
individuals with information on such individuals in the records
being used in the administration of this Act, (ii) validation of
the results of such comparisons, and (iii) corrections in such
records to accurately reflect the status of such individuals.
"(2) Each State (or political subdivision thereof) which furnishes
the Secretary with information on records of deaths in the State or
subdivision under this subsection may be paid by the Secretary from
amounts available for administration of this Act the reasonable
costs (established by the Secretary in consultations with the States)
for transcribing and transmitting such information to the Secretary.
"(3) In the case of individuals with respect to whom federally
funded benefits are provided by (or through) a Federal or State
agency other than under this Act, the Secretary shall to the extent
feasible provide such information through a cooperative arrange-
ment with such agency, for ensuring proper payment of those
benefits with respect to such individuals if-
"(A) under such arrangement the agency provides reimburse-
ment to the Secretary for the reasonable cost of carrying out
such arrangement, and
"(B) such arrangement does not conflict with the duties of the
Secretary under paragraph (1).
"(4) The Secretary may enter into similar agreements with States
to provide information for their use in programs wholly funded by
the States if the requirements of (rX3XA) and (rX3)(B) are met.
"(5) The Secretary may use or provide for the use of such records
as may be corrected under this section, subject to such safeguards as
the Secretary determines are necessary or appropriate to protect the
information from unauthorized use or disclosure, for statistical and
research activities conducted by Federal and State agencies.
"(6) Information furnished to the Secretary under this subsection
may not be used for any purpose other than the purpose described in
this subsection and is exempt from disclosure under section 552 of
title 5, United States Code, and from the requirements of section
552a of such title.
"(7) The Secretary shall include information on the status of the
program established under this section and impediments to the
effective implementation of the program in the 1984 report required
under section 704 of the Act.".
SEC. 337. (a) Subsections (bX4XA), (cX2XA), (f)(2XA), and (gX4XA) of
section 202 of the Social Security Act, and paragraph (7XA) of
section 202(e) of such Act (as redesignated by section 131(aX3XA) of
this Act), are each amended-
(1) by striking out "by an amount equal to the amount of any
monthly periodic benefit" and inserting in lieu thereof "by an
amount equal to two-thirds of the amount of any monthly
periodic benefit"; and
(2) by adding at the end thereof the following new sentence:
"The amount of the reduction in any benefit under this subpar-
agraph, if not a multiple of $0.10, shall be rounded to the next
higher multiple of $0.10.".
(b) The amendments made by subsection (a) of this section shall
apply only with respect to monthly insurance benefits payable
under title II of the Social Security Act to individuals who initially
Cooperative
arrangements
with State or
Federal
agencies.
Information
protection.
Information
disclosure,
exemption.
Effective date.
42 USC 402 note.
42 USC 401.
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97 STAT. 132 PUBLIC LAW 98-21--APR. 20, 1983
42 USC 402 and become eligible (as defined in section 334 of Public Law 95-216) for
note.. 426. monthly periodic benefits (within the meaning of the provisions
amended by subsection (a)) for months after June 1983.
STUDY CONCERNING THE ESTABLISHMENT OF THE SOCIAL SECURITY
ADMINISTRATION AS AN INDEPENDENT AGENCY
Joint Study SEC. 338. (a) There is hereby established, under the authority of
Panel on the the Committee on Ways and Means of the House of Representatives
Social Security
Administrationand the Committee on Finance of the Senate, a joint study panel to
.
42 USC 902 note. be known as the Joint Study Panel on the Social Security Adminis-
tration (hereafter in this section referred to as the "Panel"). The
duties of the Panel shall be to conduct the study provided for in
subsection (c).
Membership. (b)(1) The Panel shall be composed of 3 members, appointed jointly
by the chairmen of the Committee on Ways and Means of the House
of Representatives and the Committee on Finance of the Senate and
such chairmen shall jointly select one member of the Panel to serve
as chairman of the Panel. Members of the Panel shall be chosen, on
the basis of their integrity, impartiality, and good judgment, from
individuals who, as a result of their training, experience, and attain-
ments, are widely recognized by professionals in the fields of govern-
ment administration, social insurance, and labor relations as experts
in those fields.
Vacancies. (2) Vacancies in the membership of the Panel shall not affect the
power of the remaining members to perform the duties of the Panel
and shall be filled in the same manner in which the original
appointment was made.
Pay. (3) Each member of the Panel not otherwise in the employ of the
United States Government shall receive the daily equivalent of the
annual rate of basic pay payable for level V of the Executive
Schedule under section 5316 of title 5, United States Code, for each
day during which such member is actually engaged in the perform-
ance of the duties of the Panel. Each member of the Panel shall be
allowed travel expenses in the same manner as any individual
employed intermittently by the Federal Government is allowed
travel expenses under section 5703 of title 5, United States Code.
(4) By agreement between the chairmen of the Committee on
Ways and Means of the House of Representatives and the Commit-
tee on Finance of the Senate, such Committees shall provide the
Panel, on a reimbursible basis, office space, clerical personnel, and
such supplies and equipment as may be necessary for the Panel to
carry out its duties under this section. Subject to such limitations as
the chairmen of such Committees may jointly prescribe, the Panel
may appoint such additional personnel as the Panel considers neces-
sary and fix the compensation of such personnel as it considers
appropriate at an annual rate which does not exceed the rate of
basic pay then payable for GS-18 of the General Schedule under
section 5332 of title 5, United States Code, and may procure by
contract the temporary or intermittent services of clerical personnel
and experts or consultants, or organizations thereof.
Appropriation (5) There are hereby authorized to be appropriated to the Panel,
authorization. from amounts in the general fund of the Treasury not otherwise
appropriated, such sums as are necessary to carry out the purposes
of this section.
(c)(1) The Panel shall undertake, as soon as possible after the date
of the enactment of this Act, a thorough study with respect to the
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PUBLIC LAW 98-21-APR. 20, 1983 97 STAT. 133
implementation of removing the Social Security Administration
from the Department of Health and Human Services and establish-
ing it as an independent agency in the executive branch with its
own independent administrative structure, including the possibility
of such a structure headed by a board appointed by the President, by
and with the advice and consent of the Senate.
(2) The Panel in its study under paragraph (1) shall address,
analyze, and report specifically on the following matters:
(A) the manner in which the transition to an independent
agency would be conducted;
(B) the authorities which would have to be transferred or
amended in such a transition;
(C) the program or programs which would be included within
the jurisdiction of the new agency;
(D) the legal and 'other relationships of the Social Security
Administration with other organizations which would be
required as a result of establishing the Social Security Adminis-
tration as an independent agency; and
(E) any other details which may be necessary for the develop-
ment of appropriate legislation to establish the Social Security
Administration as an independent agency.
(d) The Panel shall submit to the Committee on Ways and Means
of the House of Representatives and the Committee on Finance of
the Senate, not later than April 1, 1984, a report of the findings of
the study conducted under subsection (c), together with any recom-
mendations the Panel considers appropriate. The Panel and all
authority granted in this section shall expire thirty days after the
date of the submission of its report under this section.
SEC. 339. (a) Section 202 of the Social Security Act is amended by
adding at the end thereof the following new subsection:
"(xX1) Notwithstanding any other provision of this title, no
monthly benefits shall be paid under this section or under section
223 to any individual for any month during which such individual is
confined in a jail, prison, or other penal institution or correctional
facility, pursuant to his conviction of an offense which constituted a
felony under applicable law, unless such individual is actively and
satisfactorily participating in a rehabilitation program which has
been specifically approved for such individual by a court of law and,
as determined by the Secretary, is expected to result in such individ-
ual being able to engage in substantial gainful activity upon release
and within a reasonable time.
"(2) Benefits which would be payable to any individual (other than
a confined individual to whom benefits are not payable by reason of
paragraph (1)) under this title on the basis of the wages and self-
employment income of such a confined individual but for the provi-
sions of paragraph (1), shall be payable as though such confined
individual were receiving such benefits under this section or section
223.
"(3) Notwithstanding the provisions of section 552a of title 5,
United States Code, or any other provision of Federal or State law,
any agency of the United States Government or of any State (or
political subdivision thereof) shall make available to the Secretary,
upon written request, the name and social security account number
of any individual who is confined in a jail, prison, or other penal
Matters to
be analyzed.
Report to
congressional
committees.
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institution or correctional facility under the jurisdiction of such
agency, pursuant to his conviction of an offense which constituted a
felony under applicable law, which the Secretary may require to
carry out the provisions of this subsection.".
42 USC 423. (b) Section 223 of such Act is amended by striking out sub-
section (f).
Effective date. (c) The amendments made by subsections (a) and (b) shall apply
42 UsC 402 note. with respect to monthly benefits payable for months beginning on or
after the date of enactment of this Act.
REQUIREMENT OF PREVIOUS UNITED STATES RESIDENCY FOR ALIEN
DEPENDENTS AND SURVIVORS LIVING OUTSIDE THE UNITED STATES
SEC. 340. (a) Section 202(t) of the Social Security Act is amended-
(1) in the heading, by adding after "United States" the follow-
ing: "; Residency Requirements for Dependents and Survivors";
and
(2) by adding at the end thereof the following new paragraph:
"(11)(A) Paragraph (2) and subparagraphs (A), (B), (C), and (E) of
paragraph (4) shall apply with respect to an individual's monthly
benefits under subsection (b), (c), (d), (e), (f), (g), or (h) only if such
individual meets the residency requirements of this paragraph with
respect to those benefits.
"(B) An individual entitled to benefits under subsection (b), (c), (e),
(f), or (g) meets the residency requirements of this paragraph with
respect to those benefits only if such individual has resided in the
United States, and while so residing bore a spousal relationship to
the person on whose wages and self-employment income such enti-
tlement is based, for a total period of not less than 5 years. For
purposes of this subparagraph, a period of time for which an individ-
ual bears a spousal relationship to another person consists of a
period throughout which the individual has been, with respect to
such other person, a wife, a husband, a widow, a widower, a divorced
wife, a divorced husband, a surviving divorced wife, a surviving
divorced husband, a surviving divorced mother, a surviving divorced
father, or (as applicable in the course of such period) any two or
more of the foregoing.
"(C) An individual entitled to benefits under subsection (d) meets
the residency requirements of this paragraph with respect to those
benefits only if-
"(i)(I) such individual has resided in the United States (as the
child of the person on whose wages and self-employment income
such entitlement is based) for a total period of not less than 5
years, or
"(II) the person on whose wages and self-employment income
such entitlement is based, and the individual's other parent
(within the meaning of subsection (hX3)), if any, have each
resided in the United States for a total period of not less than 5
years (or died while residing in the United States), and
"(ii) in the case of an individual entitled to such benefits as an
adopted child, such individual was adopted within the United
States by the person on whose wages and self-employment
income such entitlement is based, and has lived in the United
States with such person and received at least one-half of his or
her support from such person for a period (beginning before
such individual attained age 18) consisting of-
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"(I) the year immediately before the month in which such
person became eligible for old-age insurance benefits or
disability insurance benefits or died, whichever occurred
first, or
"(II) if such person had a period of disability which
continued until he or she became entitled to old-age insur-
ance benefits or disability insurance benefits or died, the
year immediately before the month in which such period of
disability began.
"(D) An individual entitled to benefits under subsection (h) meets
the residency requirements of this paragraph with respect to those
benefits only if such individual has resided in the United States, and
while so residing was a parent (within the meaning of subsection
(h)(3)) of the person on whose wages and self-employment income
such entitlement is based, for a total period of not less than 5 years.
"(E) This paragraph shall not apply with respect to any individual
who is a citizen or resident of a foreign country with which the
United States has an agreement in force concluded pursuant to
section 233, except to the extent provided by such agreement.". 42 UsC 433.
(b) Paragraphs (2) and (4) of section 202(t) of such Act are each 42 USC 402.
amended by striking out "Paragraph (1) shall not apply" and insert-
ing in lieu thereof "Subject to paragraph (11), paragraph (1) shall
not apply".
(c) The amendments made by this section shall apply with respect Effective date.
to any individual who initially becomes eligible for benefits under 42 USC 402 note.
section 202 or 223 after December 31, 1984.
ADDITION OF PUBLIC MEMBERS TO TRUST FUND BOARD OF TRUSTEES
SEC. 341. (a) Section 201(c) of the Social Security Act is amended-
(1) in the first sentence, by striking out "Secretary of Health,
Education, and Welfare, all ex officio" and inserting in lieu
thereof "Secretary of Health and Human Services, all ex officio,
and of two members of the public (both of whom may not be
from the same political party), who shall be nominated by the
President for a term of four years and subject to confirmation
by the Senate"; and
(2) by adding at the end thereof the following new sentence:
"A person serving on the Board of Trustees shall not be consid-
ered to be a fiduciary and shall not be personally liable for
actions taken in such capacity with respect to the Trust
Funds.".
(b) Section 1817(b) of such Act is amended-
(1) in the first sentence, by striking out "Secretary of Health,
Education, and Welfare, all ex officio" and inserting in lieu
thereof "Secretary of Health and Human Services, all ex officio,
and of two members of the public (both of whom may not be
from the same political party), who shall be nominated by the
President for a term of four years and subject to confirmation
by the Senate"; and
(2) by adding at the end thereof the following new sentence:
"A person serving on the Board of Trustees shall not be consid-
ered to be a fiduciary and shall not be personally liable for
actions taken in such capacity with respect to the Trust Fund.".
(c) Section 1841(b) of such Act is amended-
(1) in the first sentence, by striking out "Secretary of Health,
Education, and Welfare, all ex officio" and inserting in lieu
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thereof "Secretary of Health and Human Services, all ex officio,
and of two members of the public (both of whom may not be
from the same political party), who shall be nominated by the
President for a term of four years and subject to confirmation
by the Senate"; and
(2) by adding at the end thereof the following new sentence:
"A person serving on the Board of Trustees shall not be consid-
ered to be a fiduciary and shall not be personally liable for
actions taken in such capacity with respect to the Trust Fund.".
Effective date. (d) The amendments made by this section shall become effective
42 USC 401 note. on the date of enactment of this Act.
42 USC 418. SEC. 342. (a) Section 218(e)(1)(A) of the Social Security Act is
amended to read as follows:
"(A) that the State will pay to the Secretary of the Treasury-
"(i) on the last day of each calendar month, amounts
equivalent to the sum of the taxes which would be imposed
by sections 3101 and 3111 of the Internal Revenue Code of
26 USC 3101, 1954 with respect to the period which includes the first
3111. fifteen days of such calendar month if the services for
which wages were paid in such period to employees covered
by the agreement constituted employment as defined in
26 USC 3121. section 3121 of such Code, and
"(ii) on the fifteenth day of the calendar month following
such calendar month, amounts equivalent to the sum of the
taxes which would be imposed by sections 3101 and 3111 of
such Code with respect to the period beginning with the
sixteenth day of such calendar month and ending with the
last day of such calendar month if the services for which
wages were paid in such period to employees covered by the
agreement constituted employment as defined in section
3121 of such Code; and".
Effective date. (b) The amendments made by this section shall apply to calendar
42 USC 418 note. months beginning after December 31, 1983.
SEC. 343. (a) The Secretary of Health and Human Services (herein-
after in this section referred to as the "Secretary") shall develop, in
consultation with the Committee on Finance of the Senate and the
Committee on Ways and Means of the House of Representatives,
proposals for earnings sharing legislation as described in subsection
N. The Secretary shall report such proposals to such committees
not later than July 1, 1984. The report and proposals provided to
such committees shall-
(1) take into account, discuss, and analyze the impact of
earnings sharing on various categories of social security
beneficiaries and include recommendations for the implementa-
tion of earnings sharing which may be necessary to provide
adequate protection for particular classes of beneficiaries;
(2) include specific recommendations with respect to an appro-
priate and feasible time period or time periods for implementa-
tion of such proposals along with recommendations for any
transition provisions which may be necessary or appropriate;
and
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(3) provide cost-impact analyses on each proposal presented.
(b) For the purposes of subsection (a), the term "earnings sharing"
refers to proposals that the combined earnings of a husband and
wife during the period of their marriage shall be divided equally and
shared between them for social security benefit purposes.
(c) In preparing the report and proposals required in subsection
(a), the Secretary shall include consideration and analysis of the
earnings sharing proposals contained in (1) S. 3, 98th Congress, 1st
Session, (2) H.R. 1513, 97th Congress, 1st Session, and (3) the earn-
ings sharing option described in the report entitled "Social Security
and the Changing Roles of Men and Women", submitted to the
Congress pursuant to Public Law 95-216, the Social Security
Amendments of 1977. 42 Usc 1305
(d) In carrying out subsections (a), (b), and (c), the Secretary shall note.
consult with the Director of the Congressional Budget Office. Not
later than 30 days after the Secretary submits the report required in
subsection (a), the Director of the Congressional Budget Office shall
submit a report to the committees identified in such subsection on
the methodologies, recommendations, and analyses used in the Sec-
retary's report.
VETERANS' ADMINISTRATION REORGANIZATION
SEC. 344. The requirements of section 210(bX2XA) of title 38,
United States Code, shall not apply to the planned administrative
reorganization at the Veterans' Administration Los Angeles Data
Processing Center involving the transfer of 25 full-time equivalent
employees from the Office of Data Management and Technology to
the Department of Medicine and Surgery of the Veterans' Adminis-
tration.
SEC. 345. (a) Section 205(c)(2) of the Social Security Act is amended
by, adding at the end thereof the following new subparagraph:
(D) The Secretary shall issue a social security card to each
individual at the time of the issuance of a social security account
number to such individual. The social security card shall be made of
banknote paper, and (to the maximum extent practicable) shall be a
card which cannot be counterfeited.".
(b) The amendment made by this section shall apply with respect
to all new and replacement social security cards issued more than
193 days after the date of the enactment of this Act.
(c) Within 90 days after the date of the enactment of this Act the
Secretary of Health and Human Services shall report to the Con-
gress on his plans for implementing the amendment made by this
section.
BUDGETARY TREATMENT OF TRUST FUND OPERATIONS
SEC. 346. (aX1) Title VII of the Social Security Act (as amended by
section 143 of this Act) is further amended by adding at the end
thereof the following new section:
"BUDGETARY TREATMENT OF TRUST FUND OPERATIONS
"SEC. 710. The disbursements of the Federal Old-Age and Survi-
vors Insurance Trust Fund, the Federal Disability Insurance Trust
Effective date.
42 USC 405 note.
Report to
Congress.
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97 STAT. 138 PUBLIC LAW 98-21-APR. 20, 1983
Fund, the Federal Hospital Insurance Trust Fund, and the Federal
Supplementary Medical Insurance Trust Fund shall be treated as a
separate major functional category in the budget of the United
States Government as submitted by the President and in the con-
gressional budget, and the receipts of such Trust Funds, including
the taxes imposed under sections 1401, 3101, and 3111 of the Inter-
26 USC 1401, nal Revenue Code of 1954, shall be set forth separately in such
3101, 3111. budgets.".
Effective date. (2) The amendment made by paragraph (1) shall apply with
42 USC 911 note. respect to fiscal years beginning on or after October 1, 1984, and
ending on or before September 30, 1992, except that such amend-
ment shall apply with respect to the fiscal year beginning on
October 1, 1983, to the extent it relates to the congressional budget.
(b) Effective for fiscal years beginning on or after October 1, 1992,
Ante, p. 137. section 710 of such Act (as added by subsection (a) of this section) is
amended to read as follows:
Effective date.
42 USC 403 note.
"BUDGETARY TREATMENT OF TRUST FUND OPERATIONS
"SEC. 710. (a) The receipts and disbursements of the Federal Old-
Age and Survivors Insurance Trust Fund, the Federal Disability
Insurance Trust Fund, and the Federal Hospital Insurance Trust
Fund and the taxes imposed under sections 1401, 3101, and 3111 of
the Internal Revenue Code of 1954 shall not be included in the totals
of the budget of the United States Government as submitted by the
President or of the congressional budget and shall be exempt from
any general budget limitation imposed by statute on expenditures
and net lending (budget outlays) of the United States Government.
"(b) The disbursements of the Federal Supplementary. Medical
Insurance Trust Fund shall be treated as a separate major func-
tional category in the budget of the United States Government as
submitted by the President and in the congressional budget, and the
receipts of such Trust Fund shall be set forth separately in such
budgets.".
LIBERALIZATION OF EARNINGS TEST
SEC. 347. (a) Section 203(f)(3) of the Social Security Act is amended
by striking out "50 per centum of his earnings for such year in
excess of the product of the applicable exempt amount as deter-
mined under paragraph (8)" and inserting in lieu thereof the follow-
ing: "331/3 percent of his earnings for such year in excess of the
product of the applicable exempt amount as determined under
paragraph (8) in the case of an individual who has attained retire-
ment age (as defined in section 216(1)) before the close of such
taxable year, or 50 percent of his earnings for such year in excess of
such product in the case of any other individual".
(b) The amendment made by subsection (a) shall apply only with
respect to taxable years beginning after December 1989, and only in
the case of individuals who have attained retirement age (as defined
in section 216(1) of the Social Security Act).
TITLE IV-SUPPLEMENTAL SECURITY INCOME BENEFITS
INCREASE IN FEDERAL SSI BENEFIT STANDARD
SEC. 401. (a)(1) Section 1617 of the Social Security Act is amended
by adding at the end thereof the following new subsection:
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"(c) Effective July 1, 1983-
"(1) each of the dollar amounts in effect under subsections
(a)(1XA) and (b)(1) of section 1611, as previously increased under
this section, shall be increased by $240 (and the dollar amount
in effect under subsection (aX1XA) of section 211 of Public Law
93-66, as previously so increased, shall be increased by $120);
and
"(2) each of the dollar amounts in effect under subsections
(a)(2XA) and (bX2) of section 1611, as previously increased under
this section, shall be increased by $360.".
(2) Section 1617(b) of such Act is amended by striking out "this
section" and inserting in lieu thereof "subsection (a) of this section".
(b) Section 1617(aX2) of such Act is amended by inserting ", or, if
greater (in any case where the increase under title II was deter-
mined on the basis of the wage increase percentage rather than the
CPI increase percentage), the percentage by which benefit amounts
under title II would be increased for such month if the increase had
been determined on the basis of the CPI increase percentage," after
"are increased for such month".
ADJUSTMENTS IN FEDERAL SSI PASS-THROUGH PROVISIONS
SEC. 402. Section 1618 of the Social Security Act is amended by 96 Stat. 1917.
redesignating the subsection (c) which was added by Public Law 97- 42 USC 1382g.
377 as subsection (d), and by adding at the end thereof the following
new subsection:
"(e)(1) For any particular month after March 1983, a State which
is not treated as meeting the requirements imposed by paragraph (4)
of subsection (a) by reason of subsection (b) shall be treated as
meeting such requirements if and only if-
"(A) the combined level of its supplementary payments (to
recipients of the type involved) and the amounts payable (to or
on behalf of such recipients) under section 1611(b) of this Act
and section 211(aX1XA) of Public Law 93-66, for that particular
month,
is not less than-
"(B) the combined level of its supplementary payments (to
recipients of the type involved) and the amounts payable (to or
on behalf of such recipients) under section 1611(b) of this Act
and section 211(aX1)(A) of Public Law 93-66, for March 1983,
increased by the amount of all cost-of-living adjustments under
section 1617 (and any other benefit increases under this title)
which have occurred after March 1983 and before that particu-
lar month.
"(2) In determining the amount of any increase in the combined
level involved under paragraph (1XB) of this subsection, any portion
of such amount which would otherwise be attributable to the in-
crease under section 1617(c) shall be deemed instead to be equal to
the amount of the cost-of-living adjustment which would have oc-
curred in July 1983 (without regard to the 3-percent limitation
contained in section 215(iX1XB)) if section 111 of the Social Security 42 USC 415.
Amendments of 1983 had not been enacted.". Ante, p. 72.
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97 STAT. 140 PUBLIC LAW 98-21-APR. 20, 1983
SSI ELIGIBILITY FOR TEMPORARY RESIDENTS OF EMERGENCY SHELTERS
FOR THE HOMELESS
42 USC 1382. SEC. 403. (a) Section 1611(e)(1) of the Social Security Act is
amended-
(1) by striking out "subparagraph (B) and (C)" in subpara-
graph (A) and inserting in lieu thereof "subparagraphs (B), (C),
and (D)"; and
(2) by adding at the end thereof the following new subpara-
graph:
"(D) A person may be an eligible individual or eligible spouse for
purposes of this title with respect to any month throughout which
he is a resident of a public emergency shelter for the homeless (as
defined in regulations which shall be prescribed by the Secretary);
except that no person shall be an eligible individual or eligible
spouse by reason of this subparagraph more than three months in
any 12-month period.".
Effective date. (b) The amendments made by subsection (a) shall be effective with
42 USC 1382 respect to months after the month in which this Act is enacted.
note.
Effective date.
42 USC 602 note.
42 USC 1382
note.
42 USC 401.
42 USC 1381.
DISREGARDING OF EMERGENCY AND OTHER IN-KIND ASSISTANCE
PROVIDED BY NONPROFIT ORGANIZATIONS
SEC. 404. (a) Section 1612(b)(13) of the Social Security Act is
amended by striking out "any assistance received" and all that
follows down through "(B)" and inserting in lieu thereof the follow-
ing: "any support or maintenance assistance furnished to or on
behalf of such individual (and spouse if any) which (as determined
under regulations of the Secretary by such State agency as the chief
executive officer of the State may designate) is based on need for
such support or maintenance, including assistance received to assist
in meeting the costs of home energy (including both heating and
cooling), and which".
(b) Section 402(a)(36) of such Act is amended by striking out "shall
not include as income" and all that follows down through "(B)" and
inserting in lieu thereof the following: "shall not include as income
any support or maintenance assistance furnished to or on behalf of
the family which (as determined under regulations of the Secretary
by such State agency as the chief executive officer of the State may
designate) is based on need for such support and maintenance,
including assistance received to assist in meeting the costs of home
energy (including both heating and cooling), and which".
(c) The amendments made by this section shall be effective with
respect to months which begin after the month in which this Act is
enacted and end before October 1, 1984.
NOTIFICATION REGARDING SSI
SEC. 405. Prior to July 1, 1984, the Secretary of Health and
Human Services shall notify all elderly recipients of benefits under
title II of the Social Security Act who may be eligible for supplemen-
tal security income benefits under title XVI of such Act of the
availability of the supplemental security income program, and shall
encourage such recipients to contact the Social Security district
office. Such notification shall also be made to all recipients prior to
attainment of age 65, with the notification made with respect to
eligibility for supplementary medical insurance.
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TITLE V-UNEMPLOYMENT COMPENSATION PROVISIONS
PART A-FEDERAL SUPPLEMENTAL COMPENSATION
SEC. 501. (a) Paragraph (2) of section 602(f) of the Federal Supple-
mental Compensation Act of 1982 is amended by striking out
"March 31, 1983" and inserting in lieu thereof "September 30,
1983".
(b) Section 605(2) of such Act is amended by striking out "April 1,
1983" and inserting in lieu thereof "October 1, 1983".
NUMBER OF WEEKS FOR WHICH COMPENSATION PAYABLE
SEC. 502. (a) Subsection (e) of section 602 of the Federal Supple-
mental Compensation Act of 1982 is amended by redesignating
paragraph (3) as paragraph (4) and by striking out paragraph (2) and
inserting in lieu thereof the following new paragraphs:
"(2)(A) In the case of any account from which Federal supplemen-
tal compensation was first payable to an individual for a week
beginning after March 31, 1983, the amount established in such
account shall be equal to the lesser of-
ii(i) 55 per centum of the total amount of regular compensa-
tion (including dependents' allowances) payable to the individ-
ual with respect to the benefit year (as determined under the
State law) on the basis of which he most recently received
regular compensation, or
"(ii) the applicable limit determined under the following table
times his average weekly benefit amount for his benefit year:
"In the case of
The applicable
weeks during a:
limit is:
6-percent period ...............................................................................................
14
5-percent period ...............................................................................................
12
4-percent period ...............................................................................................
10
Low-unemployment period ............................................................................
8
"(B) In the case of any State whose applicable limit, as determined
under clause (ii) of subparagraph (A) for the first week beginning
after March 27, 1983, and after the date of the enactment of part A
of title V of the Social Security Amendments of 1983, would be more
than 4 weeks lower than the number of weeks applicable to such
State under this paragraph as in effect for the week beginning
March 27, 1983, the applicable limit for such State for that week and
any succeeding week shall not be lower than 4 less than the number
so applicable to such State for the week beginning March 27, 1983.
"(C) In the case of any account from which Federal supplemental
compensation was payable to an individual for a week beginning
before April 1, 1983, the amount established in such account shall be
equal to the lesser of the subparagraph (A) entitlement or the sum
of-
"(i) the subparagraph (A) entitlement reduced (but not below
zero) by the aggregate amount of Federal supplemental compen-
sation paid to such individual for weeks beginning before April
1, 1983, plus
"(ii) such individual's additional entitlement.
"(D) For purposes of subparagraph (C) and this subparagraph-
96 Stat. 702.
26 USC 3304
note.
96 Stat. 705.
26 USC 3304
note.
96 Stat. 702.
26 USC 3:304
note.
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Definitions. "(i) The term `subparagraph (A) entitlement' means the
amount which would have been established in the account if
subparagraph (A) had applied to such account.
"(ii) The term `additional entitlement' means the lesser of-
"(I) three-fourths of the subparagraph (A) entitlement, or
"(II) the applicable limit determined under the following
table times the individual's average weekly benefit amount
for his benefit year:
"In the case of The applicable
weeks during a: limit is:
6-percent period ............................................................................................... 10
5-percent period ............................................................................................... 8
4-percent period ............................................................................................... 8
Low-employment period ................................................................................. 6
"(E) Except as provided in subparagraph (C)(i), for purposes of
determining the amount of Federal supplemental compensation
payable for weeks beginning after March 31, 1983, from an account
described in subparagraph (C), no reduction in such account shall be
made by reason of any Federal supplemental compensation paid to
the individual for weeks beginning before April 1, 1983.
Definitions. "(3)(A) For purposes of this subsection, the terms `6-percent
period', `5-percent period', `4 percent period', and `low-unemploy-
ment period' mean, with respect to any State, the period which-
"(i) begins with the 3d week after the 1st week in which the
rate of insured unemployment in the State for the period
consisting of such week and the immediately preceding 12
weeks falls in the applicable range, and
"(ii) ends with the 3d week after the 1st week in which the
rate of insured unemployment for the period consisting of such
week and the immediately preceding 12 weeks does not fall
within the applicable range.
"(B) For purposes of subparagraph (A), the applicable range is as
follows:
"In the case of a: The applicable range is:
6-percent period ..................................... A rate equal to or exceeding 6 percent.
5-percent period ..................................... A rate equal to or exceeding 5 percent
but less than 6 percent.
4-percent period ..................................... A rate equal to or exceeding 4 percent
but less than 5 percent.
Low-employment period ....................... A rate less than 4 percent.
"(C) No 6-percent period, 5-percent period, or 4-percent period, as the
case maybe, shall last for a period of less than 4 weeks unless the State
enters a period with a higher percentage designation.
"(D) For purposes of this subsection-
Ai) The rate of insured unemployment for any period shall be
determined in the same manner as determined for purposes of
section 203 of the Federal-State Extended Unemployment Com-
26 USC 3304 pensation Act of 1970.
note. "(ii) The amount of an individual's average weekly benefit
amount shall be determined in the same manner as determined
26 Use 3304 for purposes of section 202(b)(1)(C) of such Act."
note. (b)(1) Section 602(f)(2) of such Act is amended by inserting before
96 Stat.
04 the period at the end thereof the following: "; except that in the case
26 Use 0
33
note. of any individual who received such compensation for the week
preceding the last week beginning after such date, such compensa-
tion shall be payable to such individual for weeks beginning after
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such date, but the total amount of such compensation payable for
such weeks shall be limited to 50 percent of the total amount which
would otherwise be payable for such weeks".
(2) Section 605(2) of such Act is amended by inserting before the
semicolon the following: "(except as otherwise provided in section
602(f)(2))".
(c) Paragraph (3) of section 602(d) of the Federal Supplemental
Compensation Act of 1982 is amended to read as follows:
"(3) the maximum amount of Federal supplemental compen-
sation payable to any individual for whom an account is estab-
lished under subsection (e) shall not exceed the lesser of (A) the
amount established in such account for such individual, or (B) in
the case of an individual filing a claim under the interstate
benefit payment plan for Federal supplemental compensation,
the amount which would have been established in such account
if the amount established in such account were determined by
reference to the applicable limit under subparagraph (A)(ii) or
(D)(ii) of subsection (eX2) applicable in the State in which the
individual is filing such interstate claim under the interstate
benefit payment plan for the week in which he is filing such
claim."
96 Stat. 705.
26 USC 3304
note.
96 Stat. 702.
26 USC 3304
note.
SEC. 503. (a) The amendments made by this part shall apply to
26 USC 3304
weeks beginning after March 31, 1983.
(b) In the case of any eligible individual-
note.
(1) to whom any Federal supplemental compensation was
payable for any week beginning before April 1, 1983, and
(2) who exhausted his rights to such compensation (by reason
of the payment of all the amount in his Federal supplemental
compensation account) before the first week beginning after
March 31, 1983,
such individual's eligibility for additional weeks of compensation by
reason of the amendments made by this part shall not be limited or
terminated by reason of any event, or failure to meet any require-
ment of law relating to eligibility for unemployment compensation,
occurring after the date of such exhaustion of rights and before
April 1, 1983 (and the period after such exhaustion and before
April 1, 1983, shall not be counted for purposes of determining the
expiration of the two years following the end of his benefit year for
purposes of section 602(b) of the Federal Supplemental Compensa-
tion Act of 1982).
(c) The Secretary of Labor shall, at the earliest practicable date
after the date of the enactment of this Act, propose to each State
with which he has in effect an agreement under section 602 of the
Federal Supplemental Compensation Act of 1982 a modification of
such agreement designed to provide for the payment of Federal
supplemental compensation under such Act in accordance with the
amendments made by this part. Notwithstanding any other provi-
sion of law, if any State fails or refuses, within the 3-week period
beginning on the date the Secretary of Labor proposed such a
modification to such State, to enter into such a modification of such
agreement, the Secretary of Labor shall terminate such agreement
effective with the end of the last week which ends on or before such
3-week period.
State
modifications.
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97 SSTAT. 144 PUBLIC LAW 98-21-APR. 20, 1983
96 Stat. 702.
26 USC 3304
note.
SEC. 504. Section 602 of the Federal Supplemental Compensation
Act of 1982 is amended by adding at the end thereof the following
new subsection:
"(g) The payment of Federal supplemental compensation shall not
be denied to any recipient (who submits documentation prescribed
by the Secretary) for any week because the recipient is in training or
attending an accredited educational institution on a substantially
full-time basis, or because of the application of State law to any such
recipient relating to the availability for work, the active search for
work, or the refusal to accept work on account of such training or
attendance, unless the State agency determines that such training
or attendance will not improve the opportunities for employment of
the recipient.".
96 Stat. 702.
26 USC 3304
note.
SEC. 505. Subsection (e) of section 602 of the Federal Supplemental
Compensation Act of 1982 is amended by adding at the end thereof
the following new paragraph:
"(5)(A) Except as provided in subparagraph (B), the maximum
amount of Federal supplemental compensation payable to an indi-
vidual shall not be reduced by reason of any trade readjustment
allowance to which the individual was entitled under the Trade Act
of 1974.
"(B) If an individual received any trade readjustment allowance
under the Trade Act of 1974 in respect of any benefit year, the
maximum amount of Federal supplemental compensation payable
under this subtitle in respect of such benefit year shall be reduced
(but not below zero) so that (to the extent possible by making such a
reduction) the aggregate amount of-
"(i) regular compensation,
"(ii) extended compensation,
"(iii) trade readjustment allowances, and
"(iv) Federal supplemental compensation,
payable in respect of such benefit year does not exceed the aggregate
amount which would have been so payable had the individual not
been entitled to any trade readjustment allowance."
PART B-PROVISIONS RELATING TO INTEREST AND CREDIT
REDUCTIONS
42 USC 1322. SEC. 511. (a) Section 1202(b) of the Social Security Act is amended
by adding at the end thereof the following new paragraphs:
"(8XA) With respect to interest due under this section on Septem-
ber 30 of 1983, 1984, or 1985 (other than interest previously deferred
under paragraph (3XC)), a State may pay 80 percent of such interest
in four annual installments of at least 20 percent beginning with the
year after the year in which it is otherwise due, if such State meets
the criteria of subparagraph (B). No interest shall accrue on such
deferred interest.
"(B) To meet the criteria of this subparagraph a State must-
"a) have taken no action since October 1, 1982, which would
reduce its net unemployment tax effort or the net solvency of its
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unemployment system (as determined for purposes of section
3302(f) of the Internal Revenue Code of 1954); and 26 USC 3302.
"(iiXl) have taken an action (as certified by the Secretary of
Labor) after March 31, 1982, which would have increased reve-
nue liabilities and decreased benefits under the State's unem-
ployment compensation system (hereinafter referred to as a
`solvency effort') by a combined total of the applicable percent-
age (as compared to such revenues and benefits as would have
been in effect without such State action) for the calendar year
for which the deferral is requested; or
"(II) have had, for taxable year 1982, an average unemploy-
ment tax rate which was equal to or greater than 2.0 percent of
the total of the wages (as determined without any limitation on
amount) attributable to such State subject to contribution under
the State unemployment compensation law with respect to such
taxable year.
In the case of the first year for which there is a deferral (over a 4-
year period) of the interest otherwise payable for such year, the
applicable percentage shall be 25 percent. In the case of the second
such year, the applicable percentage shall be 35 percent. In the case
of the third such year, the applicable percentage shall be 50 percent.
"(CXi) The base year is the first year for which deferral under this
provision is requested and subsequently granted. The Secretary of
Labor shall estimate the unemployment rate for the base year. To
determine whether a State meets the requirements of subparagraph
(BXiiXI), the Secretary of Labor shall determine the percentage by
which the benefits and taxes in the base year with the application of
the action referred to in subparagraph (BXiiXI) are lower or greater,
as the case may be, than such benefits? and taxes would have been
without the application of such action. In making this determina-
tion, the Secretary shall deem the application of the action referred
to in subparagraph (B)(iiXl) to have been effective for the base year
to the same extent as such action is effective for the year following
the year for which the deferral is sought. Once a deferral is ap-
proved under clause (iiXI) of subparagraph (B) a State must continue
to maintain its solvency effort. Failure to do so shall result in the
State being required to make immediate payment of all deferred
interest.
"(ii) Increases in the taxable wage base from $6,000 to $7,000 or
increases after 1984 in the maximum tax rate to 5.4 percent shall
not be counted for purposes of meeting the requirement of subpara-
graph (B).
"(D) In the case of a State which produces a solvency effort of 50
percent, 80 percent, and 90 percent rather than the 25 percent, 35
percent, and 50 percent required under subparagraph (B), the inter-
est shall be computed at an interest rate which is 1 percentage point
less than the otherwise applicable interest rate.
"(9) Any interest otherwise due from a State on September 30 of a
calendar year after 1982 may be deferred (and no interest shall
accrue on such deferred interest) for a grace period of not to exceed
9 months if, for the most recent 12-month period for which data are
available before the date such interest is otherwise due, the State
had an average total unemployment rate of 13.5 percent or greater."
(b) Section 1202(bX7) of such Act is amended by striking out ", and 42 USC 1322.
before January 1, 1988".
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97 STAT. 146 PUBLIC LAW 98-21-APR. 20, 1983
(c) Section 1202(b)(3)(C)(i) of the Social Security Act is amended by
striking the matter that follows clause (II) and inserting "No inter-
est shall accrue on such deferred interest."
Effective date.
26 USC 3302
note.
SEC. 512. (a)(1) Section 3302(f) of the Internal Revenue Code of
1954 is amended by adding at the end thereof the following new
paragraph:
"(8) PARTIAL LIMITATION.-
"(A) In the case of a State which would meet the require-
ments of this subsection for a taxable year prior to 1987 but
for its failure to meet one of the requirements contained in
subparagraph (C) or (D) of paragraph (2), the reduction
under subsection (c)(2) in credits otherwise applicable to
taxpayers in such State for such taxable year and each
subsequent year (in a period of consecutive years for each of
which a credit reduction is in effect for taxpayers in such
State) shall be reduced by 0.1 percentage point.
"(B) In the case of a State which does not meet the
requirements of paragraph (2) but meets the requirements
of subparagraphs (A) and (B) of paragraph (2) and which
also meets the requirements of section 1202(b)(8)(B) of the
Social Security Act with respect to such taxable year, the
reduction under subsection (c)(2) in credits otherwise appli-
cable to taxpayers in such State for such taxable year and
each subsequent year (in a period of consecutive years for
each of which a credit reduction is in effect for taxpayers in
such State) shall be further reduced by an additional 0.1
percentage point.
"(C) In no case shall the application of subparagraphs (A)
and (B) reduce the credit reduction otherwise applicable
under subsection (c)(2) below the limitation under para-
graph (1)."
(2) The amendment made by paragraph (1) shall apply with
respect to taxable year 1983 and taxable years thereafter.
(b) Section 3302(f)(1) of such Code is amended by striking out
"beginning before January 1, 1988,".
SEC. 513. (a) Section 3302(d)(4)(B) of the Internal Revenue Code of
1954 is amended to read as follows:
"(B)(i) for purposes of subparagraph (B) of subsection
(c)(2), the total of the wages (as determined without any
limitation on amount) attributable to such State subject to
contributions under this chapter with respect to such calen-
dar year, and
"(ii) for purposes of subparagraph (C) of subsection (c)(2),
the total of the remuneration subject to contributions under
the State unemployment compensation law with respect to
such calendar year."
(b) Section 3302(c)(2)(B)(i) of such Code is amended by striking out
"2.7" and inserting in lieu thereof "2.7 multiplied by a fraction, the
numerator of which is the wage base under this chapter and the
denominator of which is the estimated United States average
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PUBLIC LAW 98-21-APR. 20, 1983 97 STAT. 147
annual wage in covered employment for the calendar year in which
the determination is to be made".
(c) Section 3302(c)(2)(B) of such Code is amended by inserting after
"(if any)" the following: ", multiplied by a fraction, the numerator of
which is the State's average annual wage in covered employment for
the calendar year in which the determination is made and the
determination of which is the wage base under this chapter,".
(d) The amendments made by this section shall be effective for
taxable year 1983 and taxable years thereafter.
SEC. 514. Section 1202(b)(3)(A) of the Social Security Act is
amended by striking out "not later than" and inserting in lieu
thereof "prior to".
SEC. 515. (a) Section 303(c) of the Social Security Act is amended
by striking out "or" at the end of paragraph (1), striking out the
period at the end of paragraph (2) and inserting "; or", and adding at
the end thereof the following new paragraph:
"(3) that any interest required to be paid on advances under
title XII of this Act has not been paid by the date on which such
interest is required to be paid or has been paid directly or
indirectly (by an equivalent reduction in State unemployment
taxes or otherwise) by such State from amounts in such State's
unemployment fund, until such interest is properly paid.".
(b) Section 3304(a) of the Internal Revenue Code of 1954 (relating
to certification of State unemployment compensation laws) is
amended by redesignating paragraph (17) as paragraph (18) and by
inserting after paragraph (16) the following new paragraph:
"(17) any interest required to be paid on advances under title
XII of the Social Security Act shall be paid in a timely manner
and shall not be paid, directly or indirectly (by an equivalent
reduction in State unemployment taxes or otherwise) by such
State from amounts in such State's unemployment fund; and".
TREATMENT OF EMPLOYEES PROVIDING SERVICES TO EDUCATIONAL
INSTITUTIONS
SEC. 521. (a)(1) Section 3304(a)(6XA) of the Internal Revenue Code
of 1954 is amended by adding at the end thereof the following new
clause:
"(v) with respect to services to which section 3309(a)(1)
applies, if such services are provided to or on behalf of an
educational institution, compensation may be denied under the
same circumstances as described in clauses (i) through (iv),
and".
(2) Clauses (iiXI), (iii), and (iv) of such section are each amended by
striking out "may be denied" and inserting in lieu thereof "shall be
denied .
(bX1) Except as provided in paragraph (2), the amendments made
by this section shall apply in the case of compensation paid for
weeks beginning on or after April 1, 1984.
Effective date.
26 USC 3302
note.
Effective date.
26 USC 3304
note.
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97 STAT. 148 PUBLIC LAW 98-21-APR. 20, 1983
26 UK 3304
note.
Effective date.
26 USC 3304
note.
(2) In the case of a State with respect to which the Secretary of
Labor has determined that State legislation is required in order to
comply with the amendment made by this section, the amendment
made by this section shall apply in the case of compensation paid for
weeks which begin on or after April 1, 1984, and after the end of the
first session of the State legislature which begins after the date of
the enactment of this Act, or which began prior to the date of the
enactment of this Act and remained in session for at least twenty-
five calendar days after such date of enactment. For purposes of the
preceding sentence, the term "session" means a regular, special,
budget, or other session of a State legislature.
EXTENDED BENEFITS FOR INDIVDUALS WHO ARE HOSPITALIZED OR ON
JURY DUTY
SEC. 522. (a) Clause (ii) of paragraph (3)(A) of section 202(a) of the
Federal-State Extended Unemployment Compensation Act of 1970 is
amended to read as follows:
"(ii) during which he fails to actively engage in seeking work,
unless such individual is not actively engaged in seeking work
because such individual is, as determined in accordance with
State law-
"(I) before any court of the United States or any State
pursuant to a lawfully issued summons to appear for jury
duty (as such term may be defined by the Secretary of
Labor), or
"(II) hospitalized for treatment of an emergency or a life-
threatening condition (as such term may be defined by such
Secretary),
if such exemptions in clauses (I) and (II) apply to recipients of
regular benefits, and the State chooses to apply such exemp-
tions for recipients of extended benefits.".
(b) The amendment made by this section shall become effective on
the date of the enactment of this Act.
SEC. 523. (a) AMENDMENT OF INTERNAL REVENUE CODE OF 1954.-
Paragraph (4) of section 3304(a) of the Internal Revenue Code of 1954
(relating to requirements for approval of State unemployment com-
pensation laws) is amended by striking out "and" at the end of
subparagraph (A), by adding "and" at the end of subparagraph
(B), and by adding after subparagraph (B) the following new
subparagraph:
'(C) nothing in this paragraph shall be construed to
prohibit deducting an amount from unemployment compen-
sation otherwise payable to an individual and using the
amount so deducted to pay for health insurance if the
individual elected to have such deduction made and such
deduction was made under a program approved by the
Secretary of Labor;".
(b) AMENDMENT OF SOCIAL SECURITY ACT.-Paragraph (5) of
section 303(a) of the Social Security Act is amended by striking out
"; and" at the end thereof and inserting in lieu thereof "? Provided
further, That nothing in this paragraph shall be construed to prohib-
it deducting an amount from unemployment compensation other-
wise payable to an individual and using the amount so deducted to
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PUBLIC LAW 98-21-APR. 20, 1983 97 STAT. 149
pay for health insurance if the individual elected to have such
deduction made and such deduction was made under a program
approved by the Secretary of Labor; and".
(c) EFFECTIVE DATE.-The amendments made by this section shall
take effect on the date of the enactment of this Act.
TREATMENT OF CERTAIN ORGANIZATIONS RETROACTIVELY DETERMINED
TO BE DESCRIBED IN SECTION 501(C) (3) OF THE INTERNAL REVENUE
CODE OF 1954
SEC. 524. If-
(1) an organization did not make an election to make pay-
ments (in lieu of contributions) as provided in section 3309(aX2)
of the Internal Revenue Code of 1954 before April 1, 1972,
because such organization, as of such date, was treated as an
organization described in section 501(c)(4) of such Code,
(2) the Internal Revenue Service subsequently determined
that such organization was described in section 501(cX3) of such
Code, and
(3) such organization made such an election before the earlier
of-
(A) the date 18 months after such election was first
available to it under the State law, or
(B) January 1, 1984,
then section 3303(f) of such Code shall be applied with respect to
such organization as if it did not contain the requirement that the
election be made before April 1, 1972, and by substituting "Jan-
uary 1, 1982" for "January 1, 1969".
TITLE VI-PROSPECTIVE PAYMENTS FOR MEDICARE
INPATIENT HOSPITAL SERVICES
MEDICARE PAYMENTS FOR INPATIENT HOSPITAL SERVICES ON THE BASIS
OF PROSPECTIVE RATES
SEC. 601. (aX1) Subsection (aX1) of section 1886 of the Social
Security Act is amended by adding at the end the following new
subparagraph:
"(D) Subparagraph (A) shall not apply to cost reporting periods
beginning on or after October 1, 1983.'.
(2) Subsection (04) of such section is amended by adding at the
end the following new sentence: "Such term does not include costs of
approved educational activities, or, with respect to costs incurred in
cost reporting periods beginning prior to October 1, 1986, capital-
related costs, as defined by the Secretary.".
(3) It is the intent of Congress that, in considering the implemen-
tation of a system for including capital-related costs under a pro-
spectively determined payment rate for inpatient hospital services,
costs related to capital projects for which expenditures are obligated
on or after the effective date of the implementation of such a
system, may or may not be distinguished and treated differently
from costs of projects for which expenditures were obligated before
such date.
(b) Section 1886(b) of such Act is amended-
(1) by striking out "Notwithstanding sections 1814(b), but
subject to the provisions of sections" in paragraph (1) and
26 USC 3304
note.
26 USC 3303
note.
26 USC 3309.
96 Stat. 331.
42 USC 1395ww.
42 USC 1395ww
note.
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97 STAT. 150 PUBLIC LAW 98-21-APR. 20, 1983
inserting in lieu thereof "Notwithstanding section 1814(b) but
subject to the provisions of section";
(2) by inserting "(other than a subsection (d) hospital, as
defined in subsection (d)(1)(B))" in the matter before subpara-
graph (A) of paragraph (1) after "of a hospital";
(3) by inserting, in the matter in paragraph (1) following
subparagraph (B), "(other than on the basis of a DRG prospec-
tive payment rate determined under subsection (d))" after "pay-
able under this title";
(4) by repealing paragraph (2);
(5) by inserting "and subsection (d) and except as provided in
subsection (e)" in paragraph (3)(B) after "subparagraph (A)";
(6) by inserting "or fiscal year" after "cost reporting period"
each place it appears in paragraph (3)(B);
(7) by inserting "before the beginning of the period or year" in
paragraph (3)(B) after "estimated by the Secretary";
(8) by striking out "exceeds" in paragraph (3)(B) and inserting
in lieu thereof "will exceed"; and
(9) by repealing paragraph (6), effective with respect to cost
reporting periods beginning on or after October 1, 1982, and by
inserting after paragraph (5), effective with respect to cost
reporting periods beginning on or after October 1, 1983, the
following new paragraph (6):
"(6) In the case of any hospital which becomes subject to the taxes
26 USC 3111. under section 3111 of the Internal Revenue Code of 1954, with
respect to any or all of its employees, for part or all of a cost
reporting period, and was not subject to such taxes with respect to
any or all of its employees for all or part of the 12-month base cost
reporting period referred to in subsection (b)(3)(A)(i), the Secretary
shall provide for an adjustment by increasing the base period
amount described in such subsection for such hospital by an amount
equal to the amount of such taxes which would have been paid or
accrued by such hospital for such base period if such hospital had
been subject to such taxes for all of such base period with respect to
all its employees, minus the amount of any such taxes actually paid
or accrued for such base period.".
(c)(1) Subsection (c)(1) of such section is amended-
(A) by striking out "and" at the end of subparagraph (B),
(B) by striking out the period at the end of subparagraph (C)
and inserting in lieu thereof a semicolon, and
(C) by adding at the end the following:
"(D) the Secretary determines that the system will not pre-
42 USC 1395mm. clude an eligible organization (as defined in section 1876(b))
from negotiating directly with hospitals with respect to the
organization's rate of payment for inpatient hospital services;
and
"(E) the Secretary determines that the system requires hospi-
42 USC 1395cc. tals to meet the requirement of section 1866(a)(1)(G) and the
system provides for the exclusion of certain costs in accordance
42 USC 1395y. with section 1862(a)(14) (except for such waivers thereof as the
Secretary provides by regulation).
The Secretary cannot deny the application of a State under this
subsection on the ground that the State's hospital reimbursement
control system is based on a payment methodology other than on
the basis of a diagnosis-related group or on the ground that the
amount of payments made under this title under such system must
be less than the amount of payments which would otherwise have
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PUBLIC LAW 98-21-APR. 20, 1983 97 STAY 151
been made under this title not using such system. If the Secretary
determines that the conditions described in subparagraph (C) are
based on maintaining payment amounts at no more than a specified
percentage increase above the payment amounts in a base period,
the State has the option of applying such test (for inpatient hospital
services under part A) on an aggregate payment basis or on the
basis of the amount of payment per inpatient discharge or admis-
sion. If the Secretary determines that the conditions described in
subparagraph (C) are based on maintaining aggregate payment
amounts below a national average percentage increase in total
payments under part A for inpatient hospital services, the Secretary
cannot deny the application of a State under this subsection on the
ground that the State's rate of increase in such payments for such
services must be less than such national average rate of increase."
(2) Subsection (c)(3) of such section is amended-
(A) by striking out "requirement of paragraph (1XA)" and
inserting in lieu thereof `requirements of subparagraphs (A),
(D), and (E) of paragraph (1) and, if applicable, the requirements
of paragraph (5),", and
(B) by inserting "(or, if applicable, in paragraph (5))" in
subparagraph (B) after "paragraph (1)".
(3) Subsection (c) of such section is further amended by adding at
the end the following new paragraphs:
"(4) The Secretary shall approve the request of a State under
paragraph (1) with respect to a hospital reimbursement control
system if-
"(A) the requirements of subparagraphs (A), (B), (C), and (D) of
paragraph (1) have been met with respect to the system, and
"(B) with respect to that system a waiver of certain require-
ments of title XVIII of the Social Security Act has been
approved on or before (and which is in effect as of) the date of
the enactment of the Social Security Amendments of 1983,
pursuant to section 402(a) of the Social Security Amendments of
1967 or section 222(a) of the Social Security Amendments of
1972.
With respect to a State system described in this paragraph, the
Secretary shall judge the effectiveness of such system on the basis of
its rate of increase or inflation in inpatient hospital payments for
individuals under this title, as compared to the national rate of
increase or inflation for such payments, with the State retaining the
option to have the test applied on the basis of the aggregate pay-
ment or payments per inpatient admission or discharge during the
three cost reporting periods beginning on or after October 1, 1983,
after which such test, at the option of the Secretary, shall no longer
apply, and such State systems shall be treated in the same manner
as under other waivers.
"(5) The Secretary shall approve the request of a State under
paragraph (1) with respect to a hospital reimbursement control
system if-
"(A) the requirements of subparagraphs (A), (B), (C), (D), and
(E) of paragraph (1) have been met with respect to the system;
"(B) the Secretary determines that the system-
Ai) is operated directly by the State or by an entity
designated pursuant to State law,
"(ii) provides for payment of hospitals covered under the
system under a methodology (which sets forth exceptions
and adjustments, as well as any method for changes in the
42 USC 1395b-1
note.
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97 STAT. 152 PUBLIC LAW 98-21-APR. 20, 1983
96 Stat. 339.
42 USC 1395ww.
96 Stat. 331.
42 USC 1395ww.
methodology) by which rates or amounts to be paid for
hospital services during a specified period are established
under the system prior to the defined rate period, and
"(iii) hospitals covered under the system will make such
reports (in lieu of cost and other reports, identified by the
Secretary, otherwise required under this title) as the Secre-
tary may require in order to properly monitor assurances
provided under this subsection;
"(C) the State has provided the Secretary with satisfactory
assurances that operation of the system will not result in any
change in hospital admission practices which result in-
"(i) a significant reduction in the proportion of patients
(receiving hospital services covered under the system) who
have no third-party coverage and who are unable to pay for
hospital services,
"(ii) a significant reduction in the proportion of individ-
uals admitted to hospitals for inpatient hospital services for
which payment is (or is likely to be) less than the antici-
pated charges for or costs of such services,
"(iii) the refusal to admit patients who would be expected
to require unusually costly or prolonged treatment for rea-
sons other than those related to the appropriateness of the
care available at the hospital, or
"(iv) the refusal to provide emergency services to any
person who is in need of emergency services if the hospital
provides such services;
"(D) any change by the State in the system which has the
effect of materially reducing payments to hospitals can only
take effect upon 60 days notice to the Secretary and to the
hospitals the payment to which is likely to be materially
affected by the change; and
"(E) the State has provided the Secretary with satisfactory
assurances that in the development of the system the State has
consulted with local governmental officials concerning the
impact of the system on public hospitals.
The Secretary shall respond to requests of States under this para-
graph within 60 days of the date the request is submitted to the
Secretary.
"(6) If the Secretary determines that the assurances described in
paragraph (1)(C) have not been met with respect to any 36-month
period, the Secretary may reduce payments under this title to
hospitals under the system in an amount equal to the amount by
which the payment under this title under such system for such
period exceeded the amount of payments which would otherwise
have been made under this title not using such system.".
(d) Subsection (d) of such section, as added by section 110 of the
Tax Equity and Fiscal Responsibility Act of 1982, is amended-
(1) by striking out "section 1814(b)" in paragraph (2)(A) and
inserting in lieu thereof "subsection (b)", and
(2) by redesignating the subsection as subsection 0) and trans-
ferring and inserting such subsection at the end of section 1814
of the Social Security Act under the following heading:
"Elimination of Lesser-of-Cost-or-Charges Provision".
(e) Such section 1886 is further amended by adding at the end the
following new subsections:
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PUBLIC LAW 98-21-APR. 20, 1983 97 STAT. 153
"(dX1XA) Notwithstanding section 1814(b) but subject to the provi-
sions of section 1813, the amount of the payment with respect to the 42 use 1395f,
operating costs of inpatient hospital services (as defined in subsec- 1395e.
tion (aX4)) of a subsection (d) hospital (as defined in subparagraph
(B)) for inpatient hospital discharges in a cost reporting period or in
a fiscal year-
"(i) beginning on or after October 1, 1983, and before October
1, 1984, is equal to the sum of-
"(I) the target percentage (as defined in subparagraph (C))
of the hospital's target amount for the cost reporting period
(as defined in subsection (bX3XA), but determined without
the application of subsection (a)), and
"(II) the DRG percentage (as defined in subparagraph (C))
of the regional adjusted DRG prospective payment rate
determined under paragraph (2) for such discharges;
"(ii) beginning on or after October 1, 1984, and before October
1, 1986, is equal to the sum of-
"(I) the target percentage (as defined in subparagraph (C))
of the hospital's target amount for the cost reporting period
(as defined in subsection (bX3XA), but determined without
the application of subsection (a)), and
"(II) the DRG percentage (as defined in subparagraph (C))
of the applicable combined adjusted DRG prospective pay-
ment rate determined under subparagraph (D) for such
discharges; or
"(iii) beginning on or after October 1, 1986, is equal to the
national adjusted DRG prospective payment rate determined
under paragraph (3) for such discharges.
"(B) As used in this section, the term `subsection (d) hospital'
means a hospital located in one of the fifty States or the District of
Columbia other than-
"(i) a psychiatric hospital (as defined in section 1861(f)),
"(ii) a rehabilitation hospital (as defined by the Secretary),
"(iii) a hospital whose inpatients are predominantly individ-
uals under 18 years of age, or
"(iv) a hospital which has an average inpatient length of stay
(as determined by the Secretary) of greater than 25 days;
and, in accordance with regulations of the Secretary, does not
include a psychiatric or rehabilitation unit of the hospital which is a
distinct part of the hospital (as defined by the Secretary).
"(C) For purposes of this subsection, for cost reporting periods
beginning, or discharges occurring-
"(i) on or after October 1, 1983, and before October 1, 1984, the
`target percentage' is 75 percent and the `DRG percentage' is 25
percent;
"(ii) on or after October 1, 1984, and before October 1, 1985,
the `target percentage' is 50 percent and the `DRG percentage'
is 50 percent; and
"(iii) on or after October 1, 1985, and before October 1, 1986,
the `target percentage' is 25 percent and the `DRG percentage'
is 75 percent.
"(D) For purposes of subparagraph (AXiiXII), the 'applicable com-
bined adjusted DRG prospective payment rate' for cost reporting
periods beginning, or discharges occurring-
'10 on or after October 1, 1984, and before October 1, 1985, is a
combined rate consisting of 25 percent of the national adjusted
DRG prospective payment rate, and 75 percent of the regional
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97 STAT. 154 PUBLIC LAW 98-21-APR. 20, 1983
adjusted DRG prospective payment rate, determined under
paragraph (3) for such discharges; and
"(ii) on or after October 1, 1985, and before October 1, 1986, is
a combined rate consisting of 50 percent of the national adjusted
DRG prospective payment rate, and 50 percent of the regional
adjusted DRG prospective payment rate, determined under
paragraph (3) for such discharges.
"(2) The Secretary shall determine a national adjusted DRG pros-
pective payment rate, for each inpatient hospital discharge in fiscal
year 1984 involving inpatient hospital services of a subsection (d)
hospital in the United States, and shall determine a regional
adjusted DRG prospective payment rate for such discharges in each
region, for which payment may be made under part A of this title.
Each such rate shall be determined for hospitals located in urban or
rural areas within the United States or within each such region,
respectively, as follows:
"(A) DETERMINING ALLOWABLE INDIVIDUAL HOSPITAL COSTS FOR
BASE PERIOD.-The Secretary shall determine the allowable
operating costs per discharge of inpatient hospital services for
the hospital for the most recent cost reporting period for which
data are available.
"(B) UPDATING FOR FISCAL YEAR 1984.-The Secretary shall
update each amount determined under subparagraph (A) for
fiscal year 1984 by-
"(i) updating for fiscal year 1983 by the estimated average
rate of change of hospital costs industry-wide between the
cost reporting period used under such subparagraph and
fiscal year 1983 and the most recent case-mix data availa-
ble, and
"(ii) projecting for fiscal year 1984 by the applicable
percentage increase (as defined in subsection (b)(3)(B)) for
fiscal year 1984.
"(C) STANDARDIZING AMOUNTS.-The Secretary shall standard-
ize the amount updated under subparagraph (B) for each. hospi-
tal by-
"(i) excluding an estimate of indirect medical education
costs,
"(ii) adjusting for variations among hospitals by area in
the average hospital wage level, and
"(iii) adjusting for variations in case mix among hospitals.
"(D) COMPUTING URBAN AND RURAL AVERAGES.-The Secretary
shall compute an average of the standardized amounts deter-
mined under subparagraph (C) for the United States and for
each region-
"(i) for all subsection (d) hospitals located in an urban
area within the United States or that region, respectively,
and
"(ii) for all subsection (d) hospitals located in a rural area
within the United States or that region, respectively.
"Region." For purposes of this subsection, the term `region' means one of
the nine census divisions, comprising the fifty States and the
District of Columbia, established by the Bureau of the Census
"Urban area." for statistical and reporting purposes; the term `urban area'
means an area within a Standard Metropolitan Statistical Area
(as defined by the Office of Management and Budget) or within
such similar area as the Secretary has recognized under subsec-
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PUBLIC LAW 98-21-APR. 20, 1983 97 STAY 155
tion (a) by regulation; and the term `rural area' means any area "Rural area."
outside such an area or similar area.
"(E) REDUCING FOR VALUE OF OUTLIER PAYMENTS.-The Secre-
tary shall reduce each of the average standardized amounts
determined under subparagraph (D) by a proportion equal to
the proportion (estimated by the Secretary) of the amount of
payments under this subsection based on DRG prospective pay-
ment rates which are additional payments described in para-
graph (5XA) (relating to outlier payments).
"(F) MAINTAINING BUDGET NEUTRALITY.-The Secretary shall
adjust each of such average standardized amounts as may be
required under subsection (eX1XB) for that fiscal year.
(G) COMPUTING DRG-SPECIFIC RATES FOR URBAN AND RURAL
HOSPITALS IN THE UNITED STATES AND IN EACH REGION.-For each
discharge classified within a diagnosis-related group, the Secre-
tery shall establish a national DRG prospective payment rate
and shall establish a regional DRG prospective payment rate for
each region, each of which is equal-
'(i) for hospitals located in an urban area in the United
States or that region (respectively), to the product of-
"(I) the average standardized amount (computed
under subparagraph (D), reduced under subparagraph
(E), and adjusted under subparagraph (F)) for hospitals
located in an urban area in the United States or that
region, and
`(II) the weighting factor (determined under para-
graph (4XB)) for that diagnosis-related group; and
"(ii) for hospitals located in a rural area in the United
States or that region (respectively), to the product of-
"(I) the average standardized amount (computed
under subparagraph (D), reduced under subparagraph
(E), and adjusted under subparagraph (F)) for hospitals
located in a rural area in the United States or that
region, and
`(II) the weighting factor (determined under para-
graph (4XB)) for that diagnosis-related group.
"(H) ADJUSTING FOR DIFFERENT AREA WAGE LEVELS.-The Sec-
retary shall adjust the proportion, (as estimated by the Secre-
tary from time to time) of hospitals' costs which are attributable
to wages and wage-related costs, of the national and regional
DRG prospective payment rates computed under subparagraph
(G) for area differences in hospital wage levels by a factor
(established by the Secretary) reflecting the relative hospital
wage level in the geographic area of the hospital compared to
the national average hospital wage level.
"(3) The Secretary shall determine a national adjusted DRG pros-
pective payment rate, for each inpatient hospital discharge in a
fiscal year after fiscal year 1984 involving inpatient hospital services
of a subsection (d) hospital in the United States, and shall determine
a regional adjusted DRG prospective payment rate for such dis-
charges in each region for which payment may be made under part
A of this title. Each such rate shall be determined for hospitals
located in urban or rural areas within the United States and within
each such region, respectively, as follows:
"(A) UPDATING PREVIOUS STANDARDIZED AMOUNTS.-The Secre-
tary shall compute an average standardized amount for hospi-
tals located in an urban area and for hospitals located in a rural
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97 STAT. 156 PUBLIC LAW 98-21-APR. 20, 1983
area within the United States and for hospitals located in an
urban area and for hospitals located in a rural area within each
region, equal to the respective average standardized amount
computed for the previous fiscal year under paragraph (2)(D) or
under this subparagraph, increased for fiscal year 1985 by the
applicable percentage increase under subsection (bX3)(B), and
adjusted for subsequent fiscal years in accordance with the final
determination of the Secretary under subsection (eX4), and
adjusted to reflect the most recent case-mix data available.
'(B) REDUCING FOR VALUE OF OUTLIER PAYMENTS.-The Secre-
tary shall reduce each of the average standardized amounts
determined under subparagraph (A) by a proportion equal to
the proportion (estimated by the Secretary) of the amount of
payments under this subsection based on DRG prospective pay-
ment amounts which are additional payments described in
paragraph (5)(A) (relating to outlier payments).
"(C) MAINTAINING BUDGET NEUTRALITY.-The Secretary shall
adjust each of such average standardized amounts as may be
required under subsection (e)1XB) for that fiscal year.
"(D) COMPUTING DRG-SPECIFIC RATES FOR URBAN AND RURAL
HOSPITALS.-For each discharge classified within a diagnosis-
related group, the Secretary shall establish for the fiscal year a
national DRG prospective payment rate and shall establish a
regional DRG prospective payment rate for each region, each of
which is equal-
"G) for hospitals located in an urban area in the United
States or that region (respectively), to the product of-
"(I) the average standardized amount (computed
under subparagraph (A), reduced under subparagraph
(B), and adjusted under subparagraph (C), for the fiscal
year for hospitals located in an urban area in the
United States or that region, and
"(II) the weighting factor (determined under para-
graph (4)(B)) for that diagnosis-related group; and
"(ii) for hospitals located in a rural area in the United
States or that region (respectively), to the product of-
"(I) the average standardized amount (computed
under subparagraph (A), reduced under subparagraph
(B), and adjusted under subparagraph (C)) for the fiscal
year for hospitals located in a rural area in the United
States or that region, and
"(II) the weighting factor (determined under para-
graph (4)(B)) for that diagnosis-related group.
"(E) ADJUSTING FOR DIFFERENT AREA WAGE LEVELS.-The Sec-
retary shall adjust the proportion, (as estimated by the Secre-
tary from time to time) of hospitals' costs which are attributable
to wages and wage-related costs, of the DRG prospective pay-
ment rates computed under subparagraph (D) for area differ-
ences in hospital wage levels by a factor (established by the
Secretary) reflecting the relative hospital wage level in the
geographic area of the hospital compared to the national aver-
age hospital wage level.
"(4)(A) The Secretary shall establish a classification of inpatient
hospital discharges by diagnosis-related groups and a methodology
for classifying specific hospital discharges within these groups.
"(B) For each such diagnosis-related group the Secretary shall
assign an appropriate weighting factor which reflects the relative
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PUBLIC LAW 98-21-APR. 20, 1983 97 STAY 157
hospital resources used with respect to discharges classified within
that group compared to discharges classified within other groups.
"(C) The Secretary shall adjust the classifications and weighting
factors established under subparagraphs (A) and (B), for discharges
in fiscal year 1986 and at least every four fiscal years thereafter, to
reflect changes in treatment patterns, technology, and other factors
which may change the relative use of hospital resources.
"(D) The Commission (established under subsection (e)(2)) shall
consult with and make recommendations to the Secretary with
respect to the need for adjustments under subparagraph (C), based
upon its evaluation of scientific evidence with respect to new prac-
tices, including the use of new technologies and treatment modali-
ties. The Commission shall report to the Congress with respect to its Report to
evaluation of any adjustments made by the Secretary under subpar- Congress.
agraph (C).
"(5)(A)(i) The Secretary shall provide for an additional payment
for a subsection (d) hospital for any discharge in a diagnosis-related
group, the length of stay of which exceeds the mean length of stay
for discharges within that group by a fixed number of days, or
exceeds such mean length of stay by some fixed number of standard
deviations, whichever is the fewer number of days.
"(ii) For cases which are not included in clause (i), a subsection (d)
hospital may request additional payments in any case where
charges, adjusted to cost, exceed a fixed multiple of the applicable
DRG prospective payment rate, or exceed such other fixed dollar
amount, whichever is greater.
"(iii) The amount of such additional payment under clauses (i) and
(ii) shall be determined by the Secretary and shall approximate the
marginal cost of care beyond the cutoff point applicable under
clause (i) or (ii).
"(iv) The total amount of the additional payments made under
this subparagraph for discharges in a fiscal year may not be less
than 5 percent nor more than 6 percent of the total payments
projected or estimated to be made based on DRG prospective pay-
ment rates for discharges in that year.
"(B) The Secretary shall provide for an additional payment
amount for subsection (d) hospitals with indirect costs of medical
education, in an amount computed in the same manner as the
adjustment for such costs under regulations (in effect as of Janu-
ary 1, 1983) under subsection (a)(2), except that in the computation
under this subparagraph the Secretary shall use an educational
adjustment factor equal to twice the factor provided under such
regulations.
`(C)(i) The Secretary shall provide for such exceptions and adjust-
ments to the payment amounts established under this subsection as
the Secretary deems appropriate to take into account the special
needs of regional and national referral centers (including those
hospitals of 500 or more beds located in rural areas), and of public or
other hospitals that serve a significantly disproportionate number of
patients who have low income or are entitled to benefits under part
A of this title.
"(ii) With respect to a subsection (d) hospital which is a `sole
community hospital', payment under paragraph (1)(A) for any cost
reporting period or fiscal year beginning on or after October 1, 1984,
shall be determined under the formula provided in clause (i) of that
paragraph with the target and DRG percentages determined under
paragraph (1XCXi) (except that any reference to paragraph (2) shall
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97 STAT. 158 PUBLIC LAW 98-21-APR. 20, 1983
"Sole
community
hospital."
be deemed, for this purpose, a reference to paragraph (3)). In the
case of a sole community hospital that experiences, in a cost report-
ing period (beginning on or after October 1, 1983, and before October
1, 1986) compared to the previous cost reporting period, a decrease of
more than 5 percent in its total number of inpatient cases due to
circumstances beyond its control, the Secretary shall provide for
such adjustment to the payment amounts under this subsection as
may be necessary to fully compensate the hospital for the fixed costs
it incurs in the period in providing inpatient hospital services,
including the reasonable cost of maintaining necessary core staff
and services. For purposes of this subparagraph, the term `sole
community hospital' means a hospital that, by reason of factors such
as isolated location, weather conditions, travel conditions, or ab-
sence of other hospitals (as determined by the Secretary), is the sole
source of inpatient hospital services reasonably available to individ-
uals in a geographical area who are entitled to benefits under part
A.
"(iii) The Secretary shall provide by regulation for such other
exceptions and adjustments to such payment amounts under this
subsection as the Secretary deems appropriate (including exceptions
and adjustments that may be appropriate with respect to hospitals
involved extensively in treatment for and research on cancer).
"(iv) The Secretary may provide for such adjustments to the
payment amounts under this subsection as the Secretary deems
appropriate to take into account the unique circumstances of hospi-
tals located in Alaska and Hawaii.
"(D)(i) The Secretary shall estimate the amount of reimbursement
42 USC 1395y. made for services described in section 1862(aXl4) with respect to
which payment was made under part B in the base reporting periods
referred to in paragraph (2)(A) and with respect to which payment is
no longer being made.
"(ii) The Secretary shall provide for an adjustment to the payment
for subsection (d) hospitals in each fiscal year so as appropriately to
reflect the net amount described in clause (i).
Publication in "(6) The Secretary shall provide for publication in the Federal
Federal Register, on or before the September 1 before each fiscal year
Register. (beginning with fiscal year 1984), of a description of the methodology
and data used in computing the adjusted DRG prospective payment
rates under this subsection, including any adjustments required
under subsection (e)(1)(B).
"(7) There shall be no administrative or judicial review under
42 USC 1395oo. section 1878 or otherwise of-
"(A) the determination of the requirement, or the propor-
tional amount, of any adjustment effected pursuant to subsec-
tion (e)(1), and
"(B) the establishment of diagnosis-related groups, of the
methodology for the classification of discharges within such
groups, and of the appropriate weighting factors thereof under
paragraph (4).
"(e)(1)(A) For cost reporting periods of hospitals beginning in fiscal
year 1984 or fiscal year 1985, the Secretary shall provide for such
proportional adjustment in the applicable percentage increase (oth-
erwise applicable to the periods under subsection (b)(3)(B)) as may be
necessary to assure that-
"(D the aggregate payment amounts otherwise provided under
subsection (d)(1)(A)(i)(I) for that fiscal year for operating costs of
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PUBLIC LAW 98-21-APR. 20, 1983 97 STAT. 159
inpatient hospital services of hospitals (excluding payments
made under section 1866(a)(1)(F)),
are not greater or less than-
"(ii) the target percentage (as defined in subsection (dX1XC)) of
the payment amounts which would have been payable for such
services for those same hospitals for that fiscal year under this
section under the law as in effect before the date of the enact-
ment of the Social Security Amendments of 1983 (excluding
payments made under section 1866(a)(1XF));
except that the adjustment made under this subparagraph shall
apply only to subsection (d) hospitals and shall not apply for pur-
poses of making computations under subsection (d)(2)(B)(ii) or sub-
section (d)(3)(A).
"(B) For discharges occurring in fiscal year 1984 or fiscal year
1985, the Secretary shall provide under subsections (d)(2)(F) and
(d)(3)(C) for such equal proportional adjustment in each of the
average standardized amounts otherwise computed for that fiscal
year as may be necessary to assure that-
"(i) the aggregate payment amounts otherwise provided under
subsection (dX1)(A)(i)(II) and (dX5) for that fiscal year for operat-
ing costs of inpatient hospital services of hospitals (excluding
payments made under section 1866(a)(1XF)),
are not greater or less than-
"(ii) the DRG percentage (as defined in subsection (dX1XC)) of
the payment amounts which would have been payable for such
services for those same hospitals for that fiscal year under this
section under the law as in effect before the date of the enact-
ment of the Social Security Amendments of 1983 (excluding
payments made under section 1866(a)(1XF)).
"(2) The Director of the Congressional Office of Technology Assess-
ment (hereinafter in this subsection referred to as the `Director' and
the `Office', respectively) shall provide for appointment of a Prospec-
tive Payment Assessment Commission (hereinafter in this subsec-
tion referred to as the `Commission'), to be composed of independent
experts appointed by the Director. In addition to carrying out its
functions under subsection (d)(4XD), the Commission shall review
the applicable percentage increase factor described in subsection
(b)(3)(B) and make recommendations to the Secretary on the appro-
priate percentage change which should be effected for hospital
inpatient discharges under subsections (b) and (d) for fiscal years
beginning with fiscal year 1986. In making its recommendations, the
Commission shall take into account changes in the hospital market-
basket described in subsection (b)(3XB), hospital productivity, tech-
nological and scientific advances, the quality of health care provided
in hospitals (including the quality and skill level of professional
nursing required to maintain quality care), and long-term cost-
effectiveness in the provision of inpatient hospital services.
"(3) The Commission, not later than the April 1 before the begin-
ning of each fiscal year (beginning with fiscal year 1986), shall
report its recommendations to the Secretary on an appropriate
change factor which should be used (instead of the applicable per-
centage increase described in subsection (bX3)(B)) for inpatient hos-
pital services for discharges in that fiscal year.
"(4) Taking into consideration the recommendations of the Com-
mission, the Secretary shall determine for each fiscal year (begin-
ning with fiscal year 1986) the percentage change which will apply
for purposes of this section as the applicable percentage increase
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97 STAT. 160 PUBLIC LAW 98-21-APR. 20, 1983
Publication in
Federal
Register.
year.
"(B) The membership of the Commission shall provide expertise
and experience in the provision and financing of health care, includ-
ing physicians and registered professional nurses, employers, third
party payors, individuals skilled in the conduct and interpretation of
biomedical, health services, and health economics research, and
individuals having expertise in the research and development of
technological and scientific advances in health care. The Director
shall seek nominations from a wide range of groups, including-
"(i) national organizations representing physicians, including
medical specialty organizations and registered professional
nurses and other skilled health professionals;
"(ii) national organizations representing hospitals, including
teaching hospitals;
"(iii) national organizations representing manufacturers of
health care products; and
"(iv) national organizations representing the business commu-
nity, health benefit programs, labor, and the elderly.
"(C) Subject to such review as the Office deems necessary to
assure the efficient administration of the Commission, the Commis-
sion may-
"(i) employ and fix the compensation of such personnel (not to
exceed 25) as may be necessary to carry out its duties;
"(ii) seek such assistance and support as may be required in
the performance of its duties from appropriate Federal depart-
ments and agencies;
"(iii) enter into contracts or make other arrangements, as
may be necessary for the conduct of the work of the
Commission;
"(iv) make advance, progress, and other payments which
relate to the work of the Commission;
"(v) provide transportation and subsistence for persons serv-
ing without compensation; and
"(vi) prescribe such rules and regulations as it deems neces-
sary with respect to the internal organization and operation of
the Commission.
(otherwise described in subsection (b)(3)(B)) for discharges in that
fiscal year, and which will take into account amounts necessary for
the efficient and effective delivery of medically appropriate and
necessary care of high quality.
"(5) The Secretary shall cause to have published for public com-
ment in the Federal Register, not later than-
"(A) the June 1 before each fiscal year (beginning with fiscal
year 1986), the Secretary's proposed determination under para-
graph (4) for that fiscal year, and
"(B) the September 1 before such fiscal year after such consid-
eration of public comment on the proposal as is feasible in the
time available, the Secretary's final determination under such
paragraph for that year.
The Secretary shall include in the publication referred to in subpar-
agraph (A) for a fiscal year the report of the Commission's recom-
mendations submitted under paragraph (3) for that fiscal year.
"(6) (A) The Commission shall consist of 15 individuals. Members
of the Commission shall first be appointed no later than April 1,
1984, for a term of three years, except that the Director may provide
initially for such shorter terms as will insure that (on a continuing
basis) the terms of no more than seven members expire in any one
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PUBLIC LAW 98-21-APR. 20, 1983 97 STAT. 161
"(D) While serving on the business of the Commission (including
traveltime), a member of the Commission shall be entitled to com-
pensation at the per diem equivalent of the rate provided for level
IV of the Executive Schedule under section 5315 of title 5, United
States Code; and while so serving away from home and his regular
place of business, a member may be allowed travel expenses, as
authorized by the Chairman of the Commission.
"(E) In order to identify medically appropriate patterns of health
resources use in accordance with paragraph (2), the Commission
shall collect and assess information on medical and surgical proce-
dures and services, including information on regional variations of
medical practice and lengths of hospitalization and on other patient-
care data, giving special attention to treatment patterns for condi-
tions which appear to involve excessively costly or inappropriate
services not adding to the quality of care provided. In order to assess
the safety, efficacy, and cost-effectiveness of new and existing medi-
cal and surgical procedures, the Commission shall, in coordination
to the extent possible with the Secretary, collect and assess factual
information, giving special attention to the needs of updating exist-
ing diagnosis-related groups, establishing new diagnosis-related
groups, and making recommendations on relative weighting factors
for such groups to reflect appropriate differences in resource con-
sumption in delivering safe, efficacious, and cost-effective care. In
collecting and assessing information, the Commission shall-
"(D utilize existing information, both published and unpub-
lished, where possible, collected and assessed either by its own
staff or under other arrangements made in accordance with this
paragraph;
"(ii) carry out, or award grants or contracts for, original
research and experimentation, including clinical research,
where existing information is inadequate for the development of
useful and valid guidelines by the Commission; and
"(iii) adopt procedures allowing any interested party to
submit information with respect to medical and surgical proce-
dures and services (including new practices, such as the use of
new technologies and treatment modalities), which information
the Commission shall consider in making reports and recom-
mendations to the Secretary and Congress.
"(F) The Commission shall have access to such relevant informa-
tion and data as may be available from appropriate Federal agencies
and shall assure that its activities, especially the conduct of original
research and medical studies, are coordinated with the activities of
Federal agencies.
"(GXi) The Office shall report annually to the Congress on the
functioning and progress of the Commission and on the status of the
assessment of medical procedures and services by the Commission.
"(ii) The Office shall have unrestricted access to all deliberations,
records, and data of the Commission, immediately upon its request.
"(iii) In order to carry out its duties under this paragraph, the
Office is authorized to expend reasonable and neccessary funds as
mutually agreed upon by the Office and the Commission. The Office
shall be reimbursed for such funds by the Commission from the
appropriations made with respect to the Commission.
`(H) The Commission shall be subject to periodic audit by the
General Accounting Office.
"(IXi) There are authorized to be appropriated such sums as may
be necessary to carry out the provisions of this paragraph.
Report to
Congress.
Appropriation
authorization.
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97 STAT. 162 PUBLIC LAW 98-21-APR. 20, 1983
"(ii) Eighty-five percent of such appropriation shall be payable
from the Federal Hospital Insurance Trust Fund, and 15 percent of
such appropriation shall be payable from the Federal Supplemen-
tarry Medical Insurance Trust Fund.
"(f)(1) The Secretary shall maintain, for a period ending not
earlier than September 30, 1988, a system for the reporting of costs
of hospitals receiving payments computed under subsection (d).
"(2) If the Secretary determines, based upon information supplied
by a utilization and quality control peer review organization under
part B of title XI, that a hospital, in order to circumvent the
payment method established under subsection (b) or (d) of this
section, has taken an action that results in the admission of individ-
uals entitled to benefits under part A unnecessarily, unnecessary
multiple admissions of the same such individuals, or other inappro-
priate medical or other practices with respect to such individuals,
the Secretary may-
"(A) deny payment (in whole or in part) under part A with
respect to inpatient hospital services provided with respect to
such an unnecessary admission (or subsequent admission of the
same individual), or
"(B) require the hospital to take other corrective action neces-
sary to prevent or correct the inappropriate practice.
"(3) The provisions of paragraphs (2), (3), and (4) of section 1862(d)
shall apply to determinations under paragraph (2) of this subsection
in the same manner as they apply to determinations made under
section 1862(dXl).
"(gXl) If the Congress does not enact legislation, after the date of
the enactment of this subsection and before October 1, 1986, respect-
ing the payment under this title for capital-related costs for inpa-
tient hospital services, no payment may be made under this title for
capital-related costs of capital expenditures (as defined in section
1122(g) and except as provided in section 1122(j)) for inpatient
hospital services in a State, which expenditures are obligated after
September 30, 1986, unless the State has an agreement with the
Secretary under section 1122(b) and under the agreement the State
has recommended approval of the capital expenditures.
"(2) The Secretary shall provide that the amount which is allow-
able, with respect to reasonable costs of inpatient hospital services
for which payment may be made under this title, for a return on
equity capital for hospitals shall, for cost reporting periods begin-
ning on or after the date of the enactment of this subsection, be
equal to amounts otherwise allowable under regulations in effect on
March 1, 1983, except that the rate of return to be recognized shall
be equal to the average of the rates of interest, for each of the
months any part of which is included in the reporting period, on
obligations issued for purchase by the Federal Hospital Insurance
Trust Fund.".
(0 Section 1862(aXl) of the Social Security Act is amended-
(1) by striking out "(B) or (C)" and inserting in lieu thereof
"(B), (C), or MY%
(2) by striking out "and" at the end of subparagraph (B);
(3) by striking out the semicolon at the end of subparagraph
(C) and inserting in lieu thereof a comma and "and"; and
(4) by adding at the end thereof the following new
subparagraph:
"(D) in the case of clinical care items and services provided
with the concurrence of the Secretary and with respect to
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PUBLIC LAW 98-21-APR. 20, 1983 97 STAT. 163
research and experimentation conducted by, or under contract
with, the Prospective Payment Assessment Commission or the
Secretary, which are not reasonable and necessary to carry out
the purposes of section 1886(eX6);".
(g) In determining whether a hospital is in an urban or rural area
for purposes of section 1886(d) of the Social Security Act, the Secre-
tary of Health and Human Services shall classify any hospital
located in New England as being located in an urban area if such
hospital was classified as being located in an urban area under the
Standard Metropolitan Statistical Area system of classification in
effect in 1979.
SEC. 602. (a) Section 1153(bX2) of the Social Security Act is
amended by adding at the end the following new subparagraph:
"(C) The twelve-month period referred to in subparagraph (A)
shall be deemed to begin not later than October 1983.".
(b) Sections 1814(g) and 1835(e) of the Social Security Act are each
amended by inserting "(or would be if section 1886 did not apply)"
after "section 1861(vX1XD)".
(c) Section 1814(hX2) of such Act is amended by striking out "the
reasonable costs for such services" and inserting in lieu thereof "the
amount that would be payable for such services under subsection (b)
and section 1886".
(dXl) The matter in section 1861(vX1XGXi) of such Act following
subclause (III) is amended by striking out "on the basis of the
reasonable cost of" and inserting in lieu thereof "the amount other-
wise payable under part A with respect to".
(2) Section 1861(vX2XA) of such Act is amended by striking out "an
amount equal to the reasonable cost of and inserting in lieu thereof
"the amount that would be taken into account with respect to".
(3) Section 1861(vX2XB) of such Act is amended by striking out
"the equivalent of the reasonable cost of'.
(4) Section 1861(vX3) of such Act is amended by striking out "the
reasonable cost of such bed and board furnished in semiprivate
accommodations (determined pursuant to paragraph (1))" and
inserting in lieu thereof "the amount otherwise payable under
this title for such bed and board furnished in semiprivate
accommodations".
(e) Section 1862(a) of such Act is amended-
(1) by striking out "or" at the end of paragraph (12),
(2) by striking out the period at the end of paragraph (13) and
inserting in lieu thereof "; or", and
(3) by adding at the end the following new paragraph:
"(14) which are other than physicians' services (as defined in
regulations promulgated specifically for purposes of this para-
graph) and which are furnished to an individual who is an
inpatient of a hospital by an entity other than the hospital,
unless the services are furnished under arrangements (as de-
fined in section 1861(wXl)) with the entity made by the hospi-
tal.".
(0(1) Section 1866(aXl) of such Act is amended-
(A) by striking out "and" at the end of subparagraph (D),
(B) by striking out the period at the end of subparagraph (E),
and
(C) by adding at the end the following new subparagraphs:
96 Stat. 331.
42 USC 1395ww.
42 USC 1395ww
note.
42 USC 1395f,
1395n.
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97 STAT. 164 PUBLIC LAW 98-21-APR. 20, 1983
"(F) in the case of hospitals which provide inpatient hospital
services for which payment may be made under subsection (c) or
96 Stat. 331. (d) of section 1886, to maintain an agreement with a utilization
42 USC 1395ww. and quality control peer review organization (if there is such an
organization which has a contract with the Secretary under
42 USC 1320c. part B of title XI for the area in which the hospital is located)
under which the organization will perform functions under that
part with respect to the review of the validity of diagnostic
information provided by such hospital, the completeness, ade-
quacy, and quality of care provided, the appropriateness of
admissions and discharges, and the appropriateness of care
provided for which additional payments are sought under sec-
tion 1886(d)(5), with respect to inpatient hospital services for
42 USC 1301. which payment may be made under part A of this title (and for
purposes of payment under this title, the cost of such agreement
to the hospital shall be considered a cost incurred by such
hospital in providing inpatient services under part A, and (i)
shall be paid directly by the Secretary to such organization on
behalf of such hospital in accordance with a rate per review
established by the Secretary, (ii) shall be transferred from the
Federal Hospital Insurance Trust Fund, without regard to
amounts appropriated in advance in appropriation Acts, in the
same manner as transfers are made for payment for services
provided directly to beneficiaries, (iii) shall be not less than an
amount which reflects the rates per review established in fiscal
year 1982 for both direct and administrative costs (adjusted for
inflation), and (iv) shall not be less in the aggregate for a fiscal
year than the aggregate amount expended in fiscal year 1982
for direct and administrative costs (adjusted for inflation)) of
such reviews,
"(G) in the case of hospitals which provide inpatient hospital
services for which payment may be made under subsection (b) or
(d) of section 1886, not to charge any individual or any other
person for inpatient hospital services for which such individual
would be entitled to have payment made under part A but for a
denial or reduction of payments under section 1886(f)(2), and
"(H) in the case of hospitals which provide inpatient hospital
services for which payment may be made under this title, to
have all items and services (other than physicians' services as
defined in regulations for purposes of section 1862(a)(14)) (i) that
are furnished to an individual who is an inpatient of the
hospital, and (ii) for which the individual is entitled to have
payment made under this title, furnished by the hospital or
otherwise under arrangements (as defined in section 1861(w)(1))
made by the hospital.".
42 USC 1395cc. (2) The matter in section 1866(a)(2)(B)(ii) of such Act preceding
subclause (I) is amended by inserting "and except with respect to
inpatient hospital costs with respect to which amounts are payable
under section 1886(d)" after "(except with respect to emergency
services".
42 USC 1395mm. (g) Section 1876(g) of such Act is-amended by adding at the end the
following:
"(4) A risk-sharing contract under this subsection may, at the
option of an eligible organization, provide that the Secretary-
"(A) will reimburse hospitals either for payment amounts
determined in accordance with section 1886, or, if applicable, for
the reasonable cost (as determined under section 1861(v)), of
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PUBLIC LAW 98-21-APR. 20, 1983 97 STAT. 165
inpatient hospital services furnished to individuals enrolled
with such organization pursuant to subsection (d), and
"(B) will deduct the amount of such reimbursement for pay-
ment which would otherwise be made to such organization. '.
(h)(1) Section 1878(a) of such Act is amended- 42 Usc 1395oo.
(A) by inserting "and (except as provided in subsection (g)(2))
any hospital which receives payments in amounts computed
under subsection (b) or (d) of section 1886 and which has submit-
ted such reports within such time as the Secretary may require
in order to make payment under such section may obtain a
hearing with respect to such payment by the Board" after
"subsection (h)" in the matter before paragraph (1),
(B) by inserting "(i)" after "(A)" in paragraph (1)(A),
(C) by inserting "or" at the end of paragraph (1)(A) and by
adding after such paragraph the following new clause:
"(ii) is dissatisfied with a final determination of the Secre-
tary as to the amount of the payment under subsection (b)
or (d) of section 1886,", and
(D) by striking out "(1MA)" in paragraph (3) and inserting in
lieu thereof "(1XAXi), or with respect to appeals under para-
graph (1)(A)(ii), 180 days after notice of the Secretary's final
determination,".
(2)(A) The last sentence of section 1878(f)(1) of the Social Security
Act is amended by inserting "(or, in an action brought jointly by
several providers, the judicial district in which the greatest number
of such providers are located)" after "the judicial district in which
the provider is located".
(B) Section 1878(f)(1) of such Act is further amended by adding at
the end thereof the following new sentence: "Any appeal to the
Board or action for judicial review by providers which are under
common ownership or control must be brought by such providers as
a group with respect to any matter involving an issue common to
such providers.".
(3) Section 1878(g) of such Act is amended by inserting "(1)" after
"(g)" and by adding at the end the following new paragraph:
"(2) The determinations and other decisions described in section
1886(d)(7) shall not be reviewed by the Board or by any court
pursuant to an action brought under subsection (0 or otherwise."
(4) The third sentence of section 1878(h) of such Act is amended by
striking out "cost reimbursement" and inserting in lieu thereof
"payment of providers of services".
(i) The first sentence of section 1881(bX2)(A) of such Act is 42 USC 1395rr.
amended by inserting "or section 1886 (if applicable)" after "section
1861(v)".
(j) Section 1887(a)(1XB) of such Act is amended by inserting "or on 96 Stat. 337.
the bases described in section 1886" after "on a reasonable cost 42 USC 1395xx.
basis".
(k) The Secretary of Health and Human Services may, for any cost 42 USC 1395y
reporting period beginning prior to October 1, 1986, waive the note.
requirements of sections 1862(aX14) and 1866(aX1XH) of the Social
Security Act in the case of a hospital which has followed a practice, 42 USC 1395y,
since prior to October 1, 1982, of allowing direct billing under part B 1395cc.
of title XVIII of such Act for services (other than physicians serv- 42 Usc 1395.
ices) so extensively, that immediate compliance with those require-
ments would threaten the stability of patient care. Any such waiver
shall provide that such billing may continue to be made under part
B of such title but that the payments to such hospital under part A 42 USC 1395j.
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97 STAT. 166 PUBLIC LAW 98-21-APR. 20, 1983
42 USC 1395c,
1395j.
42 USC 1395ww
note.
96 Stat. 331.
42 USC 1395ww.
of such title shall be reduced by the amount of the billings for such
services under part B of such title. If such a waiver is granted, at the
end of the waiver period the Secretary may provide for such meth-
ods of payments under part A as is appropriate, given the organiza-
tional structure of the institution.
(1) Effective October 1, 1984, section 1866(a)(1) of the Social Secu-
rity Act, as amended by subsection (f)(1) of this section, is further
amended-
(1) by striking out "(if there is such an organization" in
subparagraph (F) and insert in lieu thereof "(with an organiza-
tion", and
(2) by adding at the end the following new sentence:
"In the case of a hospital which has an agreement in effect with an
organization described in subparagraph (F), which organization's
contract with the Secretary under part B of title XI is terminated on
or after October 1, 1984, the hospital shall not be determined to be
out of compliance with the requirement of such subparagraph
during the six month period beginning on the date of the termina-
tion of that contract.".
REPORTS, EXPERIMENTS, AND DEMONSTRATION PROJECTS
SEC. 603. (a)(1) The Secretary of Health and Human Services
(hereinafter in this title referred to as the "Secretary") shall study,
develop, and report to the Congress within 18 months after the date
of the enactment of this Act on the method and proposals for
legislation by which capital-related costs, such as return on net
equity, associated with inpatient hospital services can be included
within the prospective payment amounts computed under section
1886(d) of the Social Security Act.
(2)(A) The Secretary shall study and report annually to the Con-
gress at the end of each year (beginning with 1984 and ending with
1987) on the impact, of the payment methodology under section
1886(d) of the Social Security Act during the previous year, on
classes of hospitals, beneficiaries, and other payors for inpatient
hospital services, and other providers, and, in particular, on the
impact of computing DRG prospective payment rates by census
division, rather than exclusively on a national basis. Each such
report shall include such recommendations for such changes in
legislation as the Secretary deems appropriate.
(B) During fiscal year 1984, the Secretary shall begin the collec-
tion of data necessary to compute the amount of physician charges
attributable, by diagnosis-related groups, to physicians' services fur-
nished to inpatients of hospitals whose discharges are classified
within those groups. The Secretary shall include, in a report to
Congress in 1985, recommendations on the advisability and feasibil-
ity of providing for determining the amount of the payments for
physicians' services furnished to hospital inpatients based on the
DRG type classification of the discharges of those inpatients, and
legislative recommendations thereon.
(C) In the annual report to Congress under subparagraph (A) for
1985, the Secretary shall include the results of studies on-
(i) the feasibility and impact of eliminating or phasing out
separate urban and rural DRG prospective payment rates under
paragraph (3) of section 1886(d) of the Social Security Act;
(ii) whether and the method under which hospitals, not paid
based on amounts determined under such section, can be paid
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PUBLIC LAW 98-21-APR. 20, 1983 97 STAY 167
for inpatient hospital services on a prospective basis as under
such section;
(iii) the appropriateness of the factors used under paragraph
(5)(A) of such section to compensate hospitals for the additional
expenses of outlier cases, and the application of severity of
illness, intensity of care, or other modifications to the diagnosis-
related groups, and the advisability and feasibility of providing
for such modifications;
(iv) the feasibility and desirability of applying the payment
methodology under such section to payment by all payors for
inpatient hospital services; and
(v) the impact of such section on hospital admissions and the
feasibility of making a volume adjustment in the DRG prospec-
tive payment rates or requiring preadmission certification in
order to minimize the incentive to increase admissions.
Such report shall specifically include, with respect to the item
described in clause (iv), consideration of the extent of cost-shifting to
non-Federal payors and the impact of such cost-shifting on health
insurance costs and premiums borne by employers and employees.
(D) In the annual report to Congress under subparagraph (A) for
1986, the Secretary shall include the results of a study examining
the overall impact of State systems of hospital payment (either
approved under section 1886(c) of the Social Security Act or under a 96 Stat. 331.
waiver approved under section 402(a) of the Social Security Amend- 42 USC 1395ww.
ments of 1967 or section 222(a) of the Social Security Amendments of 42 USC 1395b-1.
1972), particularly assessing such systems' impact not only on the 42 USC 1395b-1
medicare program but also on the medicaid program, on payments note.
and premiums under private health insurance plans, and on tax
expenditures.
(3)(A) The Secretary shall complete a study and make legislative Study and
recommendations to the Congress with respect to an equitable recommendations.
method of reimbursing sole community hospitals which takes into
account their unique vulnerability to substantial variations in
occupancy.
(B) In addition, the Secretary shall examine ways to coordinate an
information transfer between parts A and B of title XVIII of the
Social Security Act, particularly with respect to those cases where a 42 USC 1395c,
denial of coverage is made under part A of such title and no 1395j.
adjustment is made in the reimbursement to the admitting physi-
cian or physicians.
(C) The Secretary shall also report on the appropriate treatment
of uncompensated care costs, and adjustments that might be appro-
priate for large teaching hospitals located in rural areas.
(D) The Secretary shall also report on the advisability of having
hospitals make available information on the cost of care to patients
financed by both public programs and private payors.
(E) The studies and reports described in this paragraph shall be
completed and submitted not later than April 1, 1985.
(4) The Secretary shall complete a study and make recommenda- Study and
tions to the Congress, before April 1, 1984, with respect to a method recommendations.
for including hospitals located outside of the fifty States and the
District of Columbia under a prospective payment system.
(b)(1) Except as provided in paragraph (2), the amendments made Effective date.
by this title shall not affect the authority of the Secretary to 42 USC 1395b-1
develop, carry out, or continue experiments and demonstration note.
projects.
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97 STAT. 168 PUBLIC LAW 98-21-APR. 20, 1983
(2) The Secretary shall provide that, upon the request of a State
which has a demonstration project, for payment of hospitals under
42 USC 1395. title XVIII of the Social Security Act approved under section 402(a)
42 Usc 1395b-1. of the Social Security Amendments of 1967 or section 222(a) of the
42 USC 1395b-1 Social Security Amendments of 1972, which (A) is in effect as of
note. March 1, 1983, and (B) was entered into after August 1982 (or upon
the request of another party to demonstration project agreement),
the terms of the demonstration agreement shall be modified so that
the demonstration project is not required to maintain the rate of
increase in medicare hospital costs in that State below the national
rate of increase in medicare hospital costs.
(c) The Secretary shall approve, with appropriate terms and condi-
tions as defined by the Secretary, within 30 days after the date of
enactment of this Act-
(1) the risk-sharing application of On Lok Senior Health
Services (according to terms and conditions as specified by the
Secretary), dated July 2, 1982, for waivers, pursuant to section
222 of the Social Security Amendments of 1972 and section
402(a) of the Social Security Amendments of 1967, of certain
requirements of title XVIII of the Social Security Act over a
period of 36 months in order to carry out a long-term care
demonstration project, and
(2) the application of the Department of Health Services,
State of California, dated November 1, 1982, pursuant to section
42 USC 1315. 1115 of the Social Security Act, for the waiver of certain
42 USC 1396. requirements of title XIX of such Act over a period of 36 months
in order to carry out a demonstration project for capitated
reimbursement for comprehensive long-term care services
involving On Lok Senior Health Services.
42 USC 1395b-1 (d) The Secretary shall conduct demonstrations with hospitals in
note. areas with critical shortages of skilled nursing facilities to study the
feasibility of providing alternative systems of care or methods of
payment.
42 USC 1395ww
note.
SEC. 604. (a)(1) Except as provided in section 602(1) and in para-
graph (2), the amendments made by the preceding provisions of this
title apply to items and services furnished by or under arrange-
ments with a hospital beginning with its first cost reporting period
that begins on or after October 1, 1983. A change in a hospital s cost
reporting period that has been made after November 1982 shall be
recognized for purposes of this section only if the Secretary finds
good cause for that change.
(2) Section 1866(a)(1)(F) of the Social Security Act (as added by
section 602(f)(1)(C) of this title), section 1862(a)(14) (as added by
section 602(e)(3) of this title) and sections 1886(a)(1) (G) and (H) of
such Act (as added by section 602(f)(1)(C) of this title) take effect on
October 1, 1983.
(b) The Secretary shall make an appropriate reduction in the
payment amount under section 1886(d) of the Social Security Act (as
amended by this title) for any discharge, if the admission has
occurred before a hospital's first cost reporting period that begins
after September 1983, to take into account amounts payable under
title XVIII of that Act (as in effect before the date of the enactment
of this Act) for items and services furnished before that period.
(c)(1) The Secretary shall cause to be published in the Federal
Register a notice of the interim final DRG prospective payment
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PUBLIC LAW 98-21-APR. 20, 1983 97 STAT. 169
rates established under subsection (d) of section 1886 of the Social
Security Act (as amended by this title) no later than September 1,
1983, and allow for a period of public comment thereon. Payment on
the basis of prospective rates shall become effective on October 1,
1983, without the necessity for consideration of comments received,
but the Secretary shall, by notice published in the Federal Register,
affirm or modify the amounts by December 31, 1983, after consider-
ing those comments.
(2) A modification under paragraph (1) that reduces a prospective
payment rate shall apply only to discharges occurring after 30 days
after the date the notice of the modification is published in the
Federal Register.
(3) Rules to implement subsection (d) of section 1886 of the Social
Security Act (as so amended) shall be established in accordance with
the procedure described in this subsection.
DELAY IN PROVISION RELATING TO HOSPITAL-BASED SKILLED NURSING
FACILITIES
SEC. 605. (a) Section 102(b) of the Tax Equity and Fiscal Responsi-
bility Act of 1982 is amended by striking out "October 1, 1982' and
inserting in lieu thereof "October 1, 1983'.
(b) The Secretary of Health and Human Services shall, prior to
December 31, 1983, complete a study and report to the Congress
with respect to (1) the effect which the implementation of section
102 of the Tax Equity and Fiscal Responsibility Act of 1982 would
have on hospital-based skilled nursing facilities, given the differ-
ences (if any) in the patient populations served by such facilities and
by community-based skilled nursing facilities and (2) the impact on
skilled nursing facilities of hospital prospective payment systems,
and recommendations concerning payment of skilled nursing
facilities.
SHIFT IN MEDICARE PREMIUMS TO COINCIDE WITH COST-OF-LIVING
INCREASE
SEC. 606. (aX1) Section 1839 of the Social Security Act is amended
by striking out subsections (a), (b), and (c) and inserting in lieu
thereof the following:
"(a)(1) The Secretary shall, during September of 1983 and of each
year thereafter, determine the monthly actuarial rate for enrollees
age 65 and over which shall be applicable for the succeeding calen-
dar year. Such actuarial rate shall be the amount the Secretary
estimates to be necessary so that the aggregate amount for such
calendar year with respect to those enrollees age 65 and older will
equal one-half of the total of the benefits and administrative costs
which he estimates will be payable from the Federal Supplementary
Medical Insurance Trust Fund for services performed and related
administrative costs incurred in such calendar year with respect to
such enrollees. In calculating the monthly actuarial rate, the Secre-
tary shall include an appropriate amount for a contingency margin.
"(2) The monthly premium of each individual enrolled under this
part for each month after December 1983 shall, except as provided
in subsections (b) and (e), be the amount determined under para-
graph (3).
"(3) The Secretary shall, during September of 1983 and of each
year thereafter, determine and promulgate the monthly premium
96 Stat. 336.
42 USC 1395x
note.
42 USC 1395x
note.
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97 STAT. 170 PUBLIC LAW 98-21-APR. 20, 1983
applicable for individuals enrolled under this part for the succeeding
calendar year. The monthly premium shall (except as otherwise
provided in subsection (e)) be equal to the smaller of-
"(A) the monthly actuarial rate for enrollees age 65 and over,
determined according to paragraph (1) of this subsection, for
that calendar year, or
"(B) the monthly premium rate most recently promulgated by
the Secretary under this paragraph, increased by a percentage
determined as follows: The Secretary shall ascertain the pri-
mary insurance amount computed under section 215(a)(1), based
upon average indexed monthly earnings of $900, that applied to
individuals who became eligible for and entitled to old-age
insurance benefits on November 1 of the year before the year of
the promulgation. He shall increase the monthly premium rate
by the same percentage by which that primary insurance
amount is increased when, by reason of the law in effect at the
time the promulgation is made, it is so computed to apply to
those individuals for the following November 1.
Whenever the Secretary promulgates the dollar amount which shall
be applicable as the monthly premium for any period, he shall, at
the time such promulgation is announced, issue a public statement
setting forth the actuarial assumptions and bases employed by him
in arriving at the amount of an adequate actuarial rate for enrollees
age 65 and older as provided in paragraph (1) and the derivation of
the dollar amounts specified in this paragraph.
"(4) The Secretary shall also, during September of 1983 and of
each year thereafter, determine the monthly actuarial rate for
disabled enrollees under age 65 which shall be applicable for the
succeeding calendar year. Such actuarial rate shall be the amount
the Secretary estimates to be necessary so that the aggregate
amount for such calendar year with respect to disabled enrollees
under age 65 which will equal one-half of the total of the benefits
and administrative costs which he estimates will be payable from
the Federal Supplementary Medical Insurance Trust Fund for serv-
ices performed and related administrative costs incurred in such
calendar year with respect to such enrollees. In calculating the
monthly actuarial rate under this paragraph, the Secretary shall
include an appropriate amount for a contingency margin.".
(2) Subsections (d), (e), (f), and (g) of section 1839 of such Act are
redesignated as subsections (b), (c), (d), and (e), respectively.
(3)(A) Section 1839(b) of such Act (as so redesignated) is amended
by striking out "subsection (b), (c), or (g)" and inserting in lieu
thereof "subsection (a) or (e)".
(B) Section 1839(d) of such Act (as so redesignated) is amended by
striking out "purposes of subsection (c)" and inserting in lieu thereof
"purposes of subsection (b)".
(C) Section 1839(e) of such Act (as so redesignated) is amended-
(i) by striking out "(c)", "(c)(1)", and "(c)(3)" and inserting in
lieu thereof "(a)", "(a)(1)", and "(a)(3)", respectively,
(ii) by striking out "June 1983" in paragraph (1) and inserting
in lieu thereof "December 1983", and
(iii) by striking out "July 1985" and inserting in lieu thereof
"January 1986" each place it appears.
(D) Section 1818(c) of such Act is amended by striking out "subsec-
tion (c) of section 1839" and inserting in lieu thereof "subsection (a)
of section 1839".
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(E) Section 1843(d)(1) of such Act is amended by striking out 42 USC 1395v.
"without any increase under subsection (c) thereof" and inserting in
lieu thereof "without any increase under subsection (b) thereof".
(F) Section 1844(aX1XAXi) of such Act is amended- 42 USC 1395w.
(i) by striking out "1839(01)" and inserting in lieu thereof
"1839(a)(1)"; and
(ii) by striking out "1839(c)(3) or 1839(g)" and inserting in lieu
thereof "1839(a)(3) or 1839(e)".
(G) Section 1844(a)(1XB)(i) of such Act is amended-
(i) by striking out "1839(cX4)" and inserting in lieu thereof
"1839(a)(4)"; and
(ii) by striking out "1839(cX3) or 1839(g)" and inserting in lieu
thereof "1839(a)(3) or 1839(e)".
(H) Section 1876(a)(5) of such Act is amended- 42 USC 1395mm.
(i) in subparagraph (AXii), by striking out "1839(c)(1)" and
inserting in lieu thereof "1839(aXl)"; and
(ii) in subparagraph (BXii), by striking out "1839(c)(4)" and
inserting in lieu thereof "1839(aX4)".
(b) Section 1818(d)(2) of such Act is amended- 42 USC 1395i-2.
(1) by striking out "during the last calendar quarter of each
year, beginning in 1973," in the first sentence and inserting in
lieu thereof "during the next to last calendar quarter of each
year";
(2) by striking out "the 12-month period commencing July 1 of
the next year" in the first sentence and inserting in lieu thereof
"the following calendar year"; and
(3) by striking out "for such next year" in the second sentence
and inserting in lieu thereof "for that following calendar year".
(c) The amendments made by this section shall apply to premiums Effective date.
for months beginning with January 1984, and for months after June 42 USC 1395r
1983 and before January 1984- note.
(1) the monthly premiums under part A and under part B of
title XVIII of the Social Security Act for individuals enrolled 42 USC 1395c,
under each respective part shall be the monthly premium under 1395j.
that part for the month of June 1983, and
(2) the amount of the Government contributions under section
1844(a)(1) of such Act shall be computed on the basis of the
actuarially adequate rate which would have been in effect
under part B of title XVIII of such Act for such months without
regard to the amendments made by this section, but using the
amount of the premium in effect for the month of June 1983.
SECTION 1122 AMENDMENTS
SEC. 607. (a) Section 1122(c) of the Social Security Act is amended
by striking out "the Federal Hospital Insurance Trust Fund" and
inserting "the general fund in the Treasury".
(bXl) Section 1122(g) of such Act is amended-
(A) by striking out "$100,000" the first place it appears and
inserting in lieu thereof "$600,000 (or such lesser amount as the
State may establish)", and
(B) by striking out "$100,000" the second place it appears and
inserting in lieu thereof "the dollar amount specified in clause
(1)".
(2) Section 1861(02) of such Act is amended by striking out
"$100,000" and inserting in lieu thereof "$600,000 (or such lesser
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97 STAT. 172 PUBLIC LAW 98-21-APR. 20, 1983
amount as may be established by the State under section 1122(g)(1)
in which the hospital is located)".
42 USC 132oa-1. (c) Section 1122 of such Act is amended by adding at the end
thereof the following:
"(j) A capital expenditure made by or on behalf of a health care
facility shall not be subject to review pursuant to this section if 75
percent of the patients who can reasonably be expected to use the
service with respect to which the capital expenditure is made will be
individuals enrolled in an eligible organization as defined in section
1876(b), and if the Secretary determines that such capital expendi-
ture is for services and facilities which are needed by such organiza-
tion in order to operate efficiently and economically and which are
not otherwise readily accessible to such organization because-
"(1) the facilities do not provide common services at the same
site (as usually provided by the organization),
"(2) the facilities are not available under a contract of reason-
able duration,
"(3) full and equal medical staff privileges in the facilities are
not available,
"(4) arrangements with such facilities are not administra-
tively feasible, or
"(5) the purchase of such services is more costly than if the
organization provided the services directly.".
42 Usc 1395x. (d) Section 1861(zX2) of such Act is amended by inserting "(A)"
after "(2)" and by adding at the end thereof the following new
subparagraph:
"(B) provides that such plan is submitted to the agency
designated under section 1122(b), or if no such agency is desig-
nated, to the appropriate health planning agency in the State
(but this subparagraph shall not apply in the case of a facility
exempt from review under section 1122 by reason of section
1122(j));".
Approved April 20, 1983.
LEGISLATIVE HISTORY-H.R. 1900 (S. 1):
HOUSE REPORTS: No. 98-25, Pt. 1 (Comm. on Ways and Means) and No. 98-47
(Comm. of Conference).
SENATE REPORT No. 98-23 accompanying S. 1 (Comm. on Finance).
CONGRESSIONAL RECORD, Vol. 129 (1983):
Mar. 9, considered and passed House.
Mar. 16-18, 21-23, considered and passed Senate, amended.
Mar. 24, House and Senate agreed to conference report.
WEEKLY COMPILATION OF PRESIDENTIAL DOCUMENTS, Vol. 19, No. 16 (1983):
Apr. 20, Presidential statement.
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