Volume 82 · 252
Public Law 90–364
To increase revenues, to limit expenditures and new obligational authority, and for other purposes.
Approved June 28, 1968
Statutory text
AN ACT
To increase revenues, to limit expenditures and new obligational authority, 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. SHORT TITLE; TABLE OF CONTENTS.
Short Title.—
This Act may be cited as the “Revenue and Expenditure Control Act of 1968”.
Table of Contents.—
TITLE I— INTERNAL REVENUE CODE AMENDMENTS
SEC. 101. AMENDMENT OF EXISTING LAW.
Except as otherwise expressly provided, whenever in this title an amendment or repeal is expressed in terms of an amendment to, or repeal of, a section or other provision, the reference shall be considered to be made to a section or other provision of the Internal Revenue Code of 1954.
SEC. 102. IMPOSITION OF TAX SURCHARGE.
Imposition of Tax.—
Subchapter A of chapter 1 (relating
to determination of tax liability) is amended by inserting at the end thereof the following new part:
“PART V— TAX SURCHARGE
“SEC. 51. TAX SURCHARGE.
“(a) Imposition of Tax.—
“(1) Calendar teaks.—
“(A) Individuals (other than estates and trusts),—In addition to the other taxes imposed by this chapter, there is hereby imposed on the income of every individual (other than an estate or trust) whose taxable year is the calendar year a tax as follows:
If the adjusted tax is: The tax is— If the adjusted tax is: The tax is— If the adjusted tax is: The tax is— At least But less than At least But less than At least But less than 0 $143 0 $275 $282 $20 $527 $540 $40 $148 155 $1 282 288 21 540 553 41 155 162 2 288 298 22 553 567 42 162 168 3 298 313 23 567 580 43 168 176 4 313 327 24 580 593 44 175 182 5 327 340 26 593 607 45 182 188 6 340 353 26 607 620 46 188 195 7 353 367 27 620 633 47 195 202 8 367 380 28 633 647 48 202 208 9 380 303 29 647 660 49 208 215 10 393 407 30 660 673 50 215 222 11 407 420 31 673 687 51 222 228 12 420 433 32 687 700 52 228 235 13 433 447 33 700 713 53 235 242 14 447 460 34 713 727 54 242 248 15 460 473 35 727 734 55 248 255 16 473 487 36 734 and over, 7.5% of the adjusted tax 255 262 17 487 500 37 262 268 18 500 513 38 268 275 19 513 527 39
If the adjusted tax is: The tax is— If the adjusted tax is: The tax is— If the adjusted tax is: The tax is— At least But less than At least But less than At least But less than 0 $223 0 $350 $357 $20 $527 $540 $40 $223 230 $1 357 363 21 540 553 41 230 237 2 363 370 22 553 567 42 237 243 3 370 377 23 567 580 43 243 250 4 377 383 24 580 593 44 250 267 6 383 390 26 593 607 45 257 283 6 390 397 26 607 620 46 263 270 7 397 4M 27 620 633 47 270 277 8 403 410 28 633 647 48 277 283 9 410 417 29 647 660 49 283 290 10 417 423 30 660 673 50 290 297 11 423 430 31 673 687 51 297 303 12 430 437 32 687 700 52 303 310 13 437 447 33 700 713 53 310 317 14 447 460 34 713 727 54 317 323 15 460 473 35 727 734 55 323 330 16 473 487 36 734 and over, 7.5% of the adjusted tax 330 337 17 487 500 37 337 343 18 500 513 38 343 350 19 513 527 39
If the adjusted tax is: The tax is— If the adjusted tax is: The tax is— If the adjusted tax is: The tax is— At least But less than At least But less than At least But less than 0 $293 0 $420 $427 $20 $553 $560 $40 $293 300 $1 427 433 21 560 567 41 300 307 2 433 440 22 567 573 42 307 313 3 440 447 23 573 580 43 313 320 4 447 453 24 580 593 44 320 327 5 453 460 26 593 607 45 327 333 6 460 467 26 607 620 46 333 340 7 467 473 27 620 633 47 340 347 8 473 480 28 633 647 48 347 363 9 480 487 29 647 660 49 353 360 10 487 493 30 660 673 50 360 367 11 493 500 31 673 687 51 367 373 12 500 507 32 087 700 52 373 380 13 507 613 33 700 713 53 380 387 14 513 520 34 713 727 54 387 303 15 520 527 35 727 734 65 393 400 16 527 533 36 734 and over, 7.5% of the adjusted tax 400 407 17 533 540 37 407 413 18 540 547 38 413 420 19 547 553 39
If the adjusted tax is: The tax is— If the adjusted tax is: The tax is— If the adjusted tax is: The tax is— At least But less than At least But less than At least But less than 0 $150 0 $270 $280 $13 $510 $530 $26 $150 160 SI 280 290 14 630 550 27 160 170 2 290 310 15 550 570 28 170 180 3 310 330 16 570 590 29 180 190 4 330 350 17 690 610 30 190 200 5 350 370 18 610 630 31 200 210 6 370 390 19 630 650 32 210 220 7 390 410 20 650 670 33 220 230 8 410 430 21 670 690 34 230 240 9 430 450 22 690 710 35 240 250 10 460 470 23 710 730 36 250 260 11 470 490 24 730 and over, 5% of the adjusted tax 260 270 12 490 510 25
If the adjusted tax is: The tax is— If the adjusted tax is: The tax is— If the adjusted tax is: The tax is— At least But less than At least But less than At least But less than 0 $225 0 $345 $385 $13 $510 $530 $26 $225 235 $1 355 365 14 530 550 27 235 245 2 365 375 15 550 570 28 245 255 3 375 385 16 570 590 29 255 265 4 385 395 17 590 610 30 265 278 5 395 405 18 010 630 31 275 285 6 405 415 19 630 660 32 285 295 7 415 425 20 650 670 33 295 305 8 425 435 21 670 690 34 305 315 9 435 450 22 690 710 35 315 325 10 450 470 23 710 730 36 325 335 11 470 490 24 730 and over, 5% of the adjusted tax 335 345 12 490 510 25
If the adjusted tax is: The tax is— If the adjusted tax is: The tax is— If the adjusted tax is: The tax is— At least But less than At least But less than At least But less than 0 $295 0 $415 $425 $13 $545 $555 $26 $295 305 $1 425 435 14 555 565 27 305 315 2 435 445 15 565 575 28 315 325 3 445 455 18 575 590 29 325 335 4 455 465 17 590 610 30 335 345 5 465 475 IS 610 630 31 345 355 6 475 485 19 630 650 32 355 365 7 485 495 20 650 670 33 365 375 8 495 505 21 670 690 34 375 385 9 505 515 22 690 710 35 385 395 10 515 525 23 710 730 36 395 405 11 525 535 24 730 and over, 5% of the adjusted tax 405 415 12 535 545 25 “(B) Other persons.—
In addition to the other taxes imposed by this chapter, there is hereby imposed on the income of every corporation, and on the income of every estate and trust, whose taxable year is the calendar year, a tax equal to the percent of the adjusted tax (as defined in subsection (b)) for the taxable year specified in the following table:
Calendar year Percent Estates and trusts Corporations 1968 7.5 10.0 1969 5.0 5.0 “(2) Fiscal and short taxable years.—
“(A) In general.—
In addition to the other taxes imposed by this chapter and except as provided in subparagraph (B), in the case of taxable years ending on or after the effective date of the surcharge and beginning before July 1, 1969, there is hereby imposed on the income of every person whose taxable year is other than the calendar year, a tax equal to—
“(i) 10 percent of the adjusted tax for the taxable year, multiplied by
“(ii) a fraction, the numerator of which is the number of days in the taxable year occurring on and after the effective date of the surcharge and before July 1, 1969, and the denominator of which is the number of days in the entire taxable year.
“(B) Limitation.—
In the case of—
“(i) a husband and wife (or surviving spouse) who file
a joint return under section 6013 and whose adjusted tax for the taxable year is less than $580,
“(ii) an individual who is a head of a household to whom section 1(b) applies and whose adjusted tax for the taxable year is less than $440, and
“(iii) any other individual (other than an estate or trust) whose adjusted tax for the taxable year is less than $290,
the tax imposed by subparagraph (A) shall not be greater than an amount equal to twice the tax which would be imposed by subparagraph (A) if the tax were imposed on the amount by which the adjusted tax exceeds $290, $220, or $145, respectively.
“(C) Effective date defined.—
For purposes of subparagraph
“Effective date of the surcharge.”
(A), the term ‘effective date of the surcharge’ means—
“(i) January 1, 1968, in the case of a corporation, and
“(ii) April 1, 1968, in the case of any other taxpayer.
“(b) Adjusted Tax Defined.—
For purposes of this section, the
“Adjusted tax.”
term ‘adjusted tax’ means, with respect to any taxable year, the tax imposed by this chapter for such taxable year, determined without regard to—
“(1) the taxes imposed by this section, section 871(a), and section 881; and
80 Stat. 1547, 1555.
“(2) any increases in tax under section 47(a) (relating to certain dispositions, etc., of section 38 property) or section 614(c)(4)(C) (relating to increase in tax for deductions under section 615(a) prior to aggregation),
and reduced by an amount equal to the amount of any credit which would be allowable under section 37 (relating to retirement income)
if no tax were imposed by this section for such taxable year.
“(c) Estimated Tax.—
For purposes of applying the provisions of this title with respect to declarations, amended declarations, and payments of estimated tax the time prescribed for filing or payment of which is on or after—
“(1) in the case of an individual, September 15, 1968, or
“(2) in the case of a corporation, June 15, 1968,
sections 6654(d)(1) and 6655(d)(1) shall not apply with respect to
80 Stat. 62; 68A Stat. 825 Post, p. 264.
any taxable year for which a tax is imposed by this section.
“(d) Western Hemisphere Trade (Corporations and Dividends on Certain Preferred Stock.—
In computing, for a taxable year of a corporation, the fraction described in—
“(1) section 244(a)(2), relating to deduction with respect to
dividends received on the preferred stock of a public utility,
“(2) section 247(a)(2), relating to deduction with respect to certain dividends paid by a public utility, or
“(3) section 922(2), relating to special deduction for Western Hemisphere trade corporations,
the denominator shall, under regulations prescribed by the Secretary or his delegate, be increased to reflect the rate at which tax is imposed under subsection (a) for such taxable year.
“(e) Shareholders of Regulated Investment Companies.—
In computing the amount of tax deemed paid under section 852(b)(3)(D)(ii) and the adjustment to basis described in section 852(b)(3)(D)(iii),
the percentages set forth therein shall be adjusted under regulations prescribed by the Secretary or his delegate to reflect the rate at which tax is imposed under subsection (a).
“(f) Special Rule.—
For purposes of this title, to the extent the tax imposed by this section is attributable (under regulations prescribed by the Secretary or his delegate) to a tax imposed by another section of this chapter, such tax shall be deemed to be imposed by such other section.”
Technical Amendment.—
Section 963(b) (relating to receipt
of minimum distributions by domestic corporations) is amended—
by striking out the heading of paragraph (1) and inserting in lieu thereof the following:
“(1) Taxable years beginning in 1963 and taxable years entirely within the surcharge period.—
”, and
by striking out the heading of paragraph (3) and inserting in lieu thereof the following:
“(3) Taxable teaks beginning after 1964 (except taxable years which include any part of the surcharge period) .—
”, and
by adding after the table in paragraph (3) the following:
“In the case of a taxable year beginning before the surcharge period and ending within the surcharge period, or beginning within the surcharge period and ending after the surcharge period, the required minimum distribution shall be an amount equal to the sum of—
“(A) that portion of the minimum distribution which would be required if the provisions of paragraph (1) were applicable to the taxable year, which the number of days in such taxable year which are within the surcharge period bears to the total number of days in such taxable year, plus
“(B) that portion of the minimum distribution which would be required if the provisions of paragraph (3) were applicable to such taxable year, which the number of days in such taxable year which are not within the surcharge period bears to the total number of days in such taxable year.
“Surcharge period”
As used in this subsection, the term ‘surcharge period’ means the period beginning January 1, 1968, and ending June 30, 1969.”
Withholding on Wages.—
Percentage method of withholding.—
Subsection (a)
of section 3402 (relating to requirement of withholding) is amended—
by inserting before table 1 therein the following:
“(1) In the case of wages paid on or before the 15th day after the date of the enactment of the Revenue and Expenditure Control
Ante, p. 251.
Act of 1968 or after June 30, 1969:”; and
by adding at the end thereof the following:
“(2) In the case of wages paid after the 15th day after the date of the enactment of the Revenue and Expenditure Control Act of 1968 and before July 1, 1969:
“Table 1—
If the payroll period with respect to an employee is WEEKLY
“(a) Single Person—
Including Head of Household:
If the amount of wages is: The amount of income tax to be with-held shall be: Not over $4. 0. Over $4 but not over $13. 14% of excess over $4. Over $13 but not over $23. $1.26 plus 15% of excess over $13. Over $23 but not over $85. $2.76 plus 19% of excess over $23. Over $85 but not over $169 $14.54 plus 22% of excess over $85. Over $169 but not over $212. $33.02 plus 28% of excess over $169. Over $212. $45.06 plus 33% of excess over $212. “(b) Married Person:
If the amount of wages is: The amount of income tax to be with-held shall be: Not over $4. 0. Over $4 but not over $23. 14% of excess over $4. Over $23 but not over $58. $2.66 plus 15% of excess over $23. Over $58 but not over $169. $7.91 plus 19% of excess over $58. Over $169 but not over $340. $29.00 plus 22% of excess over $169. Over $340 but not over $423. $66.62 plus 28% of excess over $340. Over $423. $58.86 plus 33% of excess over $423. “Table 2—
If the payroll period with respect to an employee is BIWEEKLY
“(a) Single Person—
Including Head of Household:
If the amount of wages is: The amount of income tax to be with-held shall be: Not over $8. 0. Over $8 but not over $27. 14% of excess over $8. Over $27 but not over $46. $2.66 plus 15% of excess over $27. Over $46 but not over $169. $5.51 plus 19% of excess over $46. Over $169 but not over $338 $28.88 plus 22% of excess over $169. Over $338 but not over $423. $66.06 plus 28% of excess over $338. Over $423. $89.86 plus 33% of excess over $423. “(b) Married Person:
If the amount of wages is: The amount of income tax to be with-held shall be: Not over $8. 0. Over $8 but not over $46. 14% of excess over $8. Over $46 but not over $115. $5.32 plus 15% of excess over $46. Over $115 but not over $338. $15.67 plus 19% of excess over $115. Over $338 but not over $681. $58.04 plus 22% of excess over $338. Over $681 but not over $846. $133.50 plus 28% of excess over $681. Over $846. $179.70 plus 33% of excess over $846. “Table 3—
If the payroll period with respect to an employee is SEMIMONTHLY
“(a) Single Person—
Including Head of Household:
If the amount of wages is: The amount of income tax to be with-held shall be: Not over $8 0. Over $8 but not over $29. 14% of excess over $8. Over $29 but not over $50. $2.94 plus 15% of excess over $29. Over $50 but not over $183. $6.09 plus 19% of excess over $50. Over $183 but not over $367. $31.36 plus 22% of excess over $183. Over $367 but not over $458. $71.84 plus 28% of excess over $367. Over $458. $97.32 plus 33% of excess over $458. “(b) Married Person:
If the amount of wages is: The amount of income tax to be with-held shall be: Not over $8. 0. Over $8 but not over $50. 14% of excess over $8. Over $50 but not over $125. $5.88 plus 15% of excess over $50. Over $125 but not over $367. $17.13 plus 19% of excess over $125. Over $367 but not over $738. $63.11 plus 22% of excess over $367. Over $738 but not over $917. $144.73 plus 28% of excess over $738. Over $917. $194.85 plus 33% of excess over $917. “Table 4—
If the payroll period with respect to an employee is MONTHLY
“(a) Single Person—
Including Head of Household:
If the amount of wages is: The amount of income tax to be with-held shall be: Not over $17. 0. Over $17 but not over $58. 14% of excess over $17. Over $58 but not over $100. $5.74 plus 15% of excess over $58. Over $100 but not over $367. $12.04 plus 19% of excess over $100. Over $367 but not over $733. $62.77 plus 22% of excess over $367. Over $733 but not over $917. $143.29 plus 28% of excess over $733. Over $917. $194.81 plus 33% of excess over $917. “(b) Married Person:
If the amount of wages is: The amount of income tax to be with-held shall be: Not over $17. 0. Over $17 but not over $100. 14% of excess over $17. Over $100 but not over $250. $11.62 plus 15% of excess over $100. Over $250 but not over $733. $34.12 plus 19% of excess over $250. Over $733 but not over $1475. $123.89 plus 22% of excess over $733. Over $1475 but not over $1833. $289.13 plus 28% of excess over $1475. Over $1833. $389.37 plus 33% of excess over $1833. ‘Table 5.—
If the payroll period with respect to an employee is QUARTERLY
“(a) Single Person—
Including Head of Household:
If the amount of wages is: The amount of income tax to be with-held shall be: Not over $50. 0. Over $50 but not over $175. 14% of excess over $50. Over $175 but not over $300. $17.50 plus 15% of excess over $175. Over $300 but not over $1100. $36.25 plus 19% of excess over $300. Over $1100 but not over $2200. $188.25 plus 22% of excess over $1100. Over $2200 but not over $2750. $430.25 plus 28% of excess over $2200. Over $2750. $584.25 plus 33% of excess over $2750. “(b) Married Person:
If the amount of wages is: The amount of income tax to be with-held shall be: Not over $50. 0. Over $50 but not over $300. 14% of excess over $50. Over $300 but not over $750. $35.00 plus 15% of excess over $300. Over $750 but not over $2200. $102.50 plus 19% of excess over $750. Over $2200 but not over $4425. $378.00 plus 22% of excess over $2200. Over $4425 but not over $5500. $867.50 plus 28% of excess over $4425. Over $5500. $1168.50 plus 33% of excess over $5500. “Table 6—
If the payroll period with respect to an employee is SEMIANNUAL
“(a) Single Person—
Including Head of Household:
If the amount of wages is: The amount of income tax to be with-held shall be: Not over $100. 0. Over $100 but not over $350. 14% of excess over $100. Over $350 but not over $600. $35.00 plus 15% of excess over $350. Over $600 but not over $2200. $72.50 plus 19% of excess over $600. Over $2200 but not over $4400. $376.00 plus 22% of excess over $2200. Over $4400 but not over $5500. $860.50 plus 28% of excess over $4400. Over $5500. $1168.50 plus 33% of excess over $5500. “(b) Married Person:
If the amount of wages is: The amount of income tax to be with-held shall be: Not over $100. 0. Over $100 but not over $600. 14% of excess over $100. Over $600 but not over $1500. $70.00 plus 15% of excess over $600. Over $1500 but not over $4400. $205.00 plus 19% of excess over $1500. Over $4400 but not over $8850. $756.00 plus 22% of excess over $4400. Over $8850 but not over $11,000. $1735.00 plus 28% of excess over $8850. Over $11,000. $2337.00 plus 33% of excess over $11,000. “Table 7—If the payroll period with respect to an employee is ANNUAL
“(a) Single Person—
Including Head of Household:
If the amount of wages is: The amount of income tax to be with-held shall be: Not over $200. 0. Over $200 but not over $700. 14% of excess over $200. Over $700 but not over $1200. $70 plus 15% of excess over $700. Over $1200 but not over $4400. $145 plus 19% of excess over $1200. Over $4400 but not over $8800. $753 plus 22% of excess over $4400. Over $8850 but not over $11,000. $1,721 plus 28% of excess over $8800. Over $11,000. $2,337 plus 33% of excess over $11,000. “(b) Married Person:
If the amount of wages is: The amount of income tax to be with-held shall be: Not over $200. 0. Over $200 but not over $1200. 14% of excess over $200. Over $1200 but not over $3000. $140 plus 15% of excess over $1200. Over $3000 but not over $8800. $410 plus 19% of excess over $3000. Over $8800 but not over $17,700. $1,512 plus 22% of excess over $8800. Over $17,700 but not over $22,000 $3,407 plus 28% of excess over $17,700. Over $22,000. $4,647 plus 33% of excess over $22,000. “Table 8—It the payroll period with reaped to an employee is a DAILY payroll or a miscellaneous payroll period
“(a) Single Person—
Including Head of Household:
If the amount of wages is: The amount of income tax to be with-held shall be: Not over $0.50. 0. Over 0.05 but not over $1.90. 14% of excess over $0.50. Over $1.90 but not over $3.30. $0.20 plus 15% of excess over $1.90. Over $3.30 but not over $12.10. $0.41 plus 19% of excess over $3.30. Over $12.10 but not over $24.10. $2.08 plus 22% of excess over $12.10. Over $24.10 but not over $30.10. $4.72 plus 28% of excess over $24.10. Over $30.10. $6.40 plus 33% of excess over $30.10. “(b) Married Person:
If the amount of wages is: The amount of income tax to be with-held shall be: Not over $0.50 0. Over 0.05 but not over $3.30. 14% of excess over $0.50. Over $3.30 but not over $8.20. $0.39 plus 15% of excess over $3.30. Over $8.20 but not over $24.10. $1.13 plus 19% of excess over $8.20. Over $24.10 but not over $48.50. $4.15 plus 22% of excess over $24.10. Over $48.50 but not over $60.30. $9.52 plus 28% of excess over $48.50. Over $60.30. $12.82 plus 33% of excess over $60.30.
Wage bracket withholding.—
Subsection (c) of section 3402
(relating to wage bracket withholding) is amended by adding at the end thereof the following new paragraph:
“(6) In the case of wages paid after the 15th day after the date of the enactment of the Revenue and Expenditure Control Act of 1968, and before July 1, 1969, the amount deducted and withheld
Ante, p. 251.
under paragraph (1) shall be determined in accordance with tables prescribed by the Secretary or his delegate in lieu of the tables contained in paragraph (1). The tables so prescribed shall
be the same as the tables contained in paragraph (1), except that amounts and rates set forth as amounts and rates of tax to be deducted and withheld shall be computed on the basis of table 7 contained in subsection (a)(2).”
Ante, p. 258.
Clerical Amendment.—
The table of parts of subchapter A of chapter 1 is amended by adding at the end thereof the following:
Effective Date.—
Except as provided by section 104, the amendments
Post, p. 264.
made by this section (other than subsection (c)) shall apply—
Insofar as they relate to taxpayers other than corporations, to taxable years ending after March 31, 1968, and beginning before July 1, 1969.
Insofar as they relate to corporations, to taxable years ending after December 31, 1967, and beginning before July 1, 1969.
SEC. 103. PAYMENT OF ESTIMATED TAX BY CORPORATIONS.
Repeal of Requirement of Declaration.—
Section 6016 (relating to declarations of estimated income tax by corporations) and section 6074 (relating to time for filing declarations of estimated income tax by corporations) are repealed.
Installment Payments of Estimated Income Tax by Corporations.—
Section 6154 (relating to installment payments of estimated income tax by corporations) is amended to read as follows:
“SEC. 6154. INSTALLMENT PAYMENTS OF ESTIMATED INCOME TAX BY CORPORATIONS.
“(a) Corporations Required To Pay Estimated Income Tax.—
Every corporation subject to taxation under section 11 or 1201(a), or subchapter L of chapter 1 (relating to insurance companies), shall make payments of estimated tax (as defined in subsection (c)) during its taxable year as provided in subsection (b) if its estimated tax for such taxable year can reasonably be expected to be $40 or more.
“(b) Payment in Installments.—
Any corporation required under subsection (a) to make payments of estimated tax (as defined in subsection (c)) shall make such payments in installments as follows:
“If the requirements of subsection (a) are first met— The following estimated tax the 15th day of percentage of the sha11 be paid on the— 4th month 6th month 9th month 12th month Before the 1st day of the 4th month of the taxable year 25 25 25 25 After the 2st day of the 3d month and before the 1st day of the 6th month of the taxable year _ _ _ _ _ 33⅓ 33⅓ 33⅓ After the 1st day of the 5th month and before the 1st day of the 9th month of the taxable year _ _ _ _ _ _ _ _ _ _ 50 50 After the 1st day of the 8th month and before the 1st day of the 12th month of the taxable year _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ 100 “(c) Estimated Tax Defined.—
“(1) In general.—
For purposes of this title, in the case of a corporation the term ‘estimated tax’ means the excess of—
“(A) the amount which the corporation estimates as the amount of the income tax imposed by section 11 or 1201(a), or subchapter L of chapter 1, whichever is applicable, over
“(B) the sum of—
“(i) the amount which the corporation estimates as the sum of the credits against tax provided by part IV
of subchapter A of chapter 1,
“(ii) in the case of a taxable year beginning after December 31, 1967, and before January 1, 1977, the amount of the corporation’s temporary estimated tax exemption for such year, and
“(iii) in the case of a taxable year beginning after December 31, 1967, and before January 1, 1972, the amount of the corporation’s transitional exemption for such year.
“(2) Temporary estimated tax exemption.—
“(A) In general.—
For purposes of clause (ii) of paragraph (1)(B), the amount of a corporation’s temporary estimated tax exemption for a taxable year equals the applicable percentage (determined under subparagraph (B)) multiplied by the lesser of—
“(i) an amount equal to 22 percent of the amount which the corporation estimates as its surtax exemption (as defined in section 11(d)) for such year, or
“(ii) the excess determined under paragraph (1) without regard to clauses (ii) and (iii) of paragraph (1)(B).
“(B) Applicable percentage.—
For purposes of subparagraph (A) and section 6655(e)(2), the applicable percentage
Post, p, 262.
is—
“In the case of a taxable year beginning in— 1968, 1969, 1970, 1971, and 1972 100 percent 1973 80 percent 1974 60 percent 1975 40 percent 1976 20 percent “(3) Transitional exemption.—
“(A) In general.—
For purposes of clause (iii) of paragraph (1)(B), the amount of a corporation’s transitional exemption for a taxable year equals the exclusion percentage (determined under subparagraph (B)) multiplied by the lesser of—
“(i) $100,000, reduced by the amount of the corporation’s temporary estimated tax exemption for such year, or
“(ii) the excess determined under paragraph (1) without regard to clause (iii) of paragraph (1)(B).
“(B) Exclusion percentage.—
For purposes of subparagraph (A) and section 6655(e)(3), the exclusion percentage
Post, p. 262.
is—
“In the case of a taxable year beginning in— 1968 80 percent 1969 60 percent 1970 40 percent 1971 20 percent “(d) Recomputation of Estimated Tax.—
If, after paying any installment of estimated tax, the taxpayer makes a new estimate, the amount of each remaining installment (if any) shall be the amount which would have been payable if the new estimate had been made when the first estimate for the taxable year was made, increased or decreased (as the case may be) by the amount computed by dividing—
“(1) the difference between—
“(A) the amount of estimated tax required to be paid before the date on which the new estimate is made, and
“(B) the amount of estimated tax which would have been required to be paid before such date if the new estimate had been made when the first estimate was made, by
“(2) the number of installments remaining to be paid on or after the date on which the new estimate is made.
“(e) Application to Short Taxable Year.—
The application of this section to taxable years of less than 12 months shall lie in accordance with regulations prescribed by the Secretary or his delegate.
“(f) Installments Paid in Advance.—
At the election of the corporation, any installment of the estimated tax may be paid before the date prescribed for its payment.
“(g) Certain Foreign Corporations.—
For purposes of this section and section 6655, in the case of a foreign corporation subject to taxation under section 11 or 1201(a), or under subchapter L of chapter
1, the tax imposed by section 881 shall be treated as a tax imposed by section 11.”
Failure by Corporation To Pay Estimated Tax.—
Raising to percent requirement to 80 percent.—
Subsections (b) and (d)(3) of section 6655 (relating to underpayments of estimated tax) are amended by striking out “70 percent” each place it appears therein and inserting in lieu thereof “80 percent”.
Definition of tax.—
Subsection (e) of section 6655 (relating to definition of tax) is amended to read as follows:
“(e) Definition of Tax.—
“(1) In general.—
For purposes of subsections (b) and (d), the term ‘tax’ means the excess of—
“(A) the tax imposed by section 11 or 1201 (a), or subchapter L of chapter 1. whichever is applicable, over
“(B) the sum of—
“(i) the credits against tax provided by part IV of subchapter A of chapter 1,
“(ii) in the case of a taxable year beginning after December 31, 1967, and before January 1, 1977, the amount of the corporation’s temporary estimated tax exemption for such year, and
“(iii) in the case of a taxable year beginning after December 31, 1967, and before January 1, 1972, the amount of the corporation’s transitional exemption for such year.
“(2) Temporary estimated tax exemption.—
For purposes of clause (ii) of paragraph (1)(B), the amount of a corporation’s temporary estimated tax exemption for a taxable year equals the
Ante, p. 261.
applicable percentage (determined under section 6154(c)(2)(B)) multiplied by the lesser of—
“(A) an amount equal to 22 percent of the corporation’s surtax exemption (as defined in section 11(d)) for such year, or
“(B) the excess determined under paragraph (1) without regard to clauses (ii) and (iii) of paragraph (1)(B).
“(3) Transitional exemption.—
For purposes of clause (iii) of paragraph (1)(B), the amount of a corporation’s transitional exemption for a taxable year equals the exclusion percentage (determined under section 6154(c)(3)(B)) multiplied by the lesser of—
“(A) $100,000, reduced by the amount of the corporation’s temporary estimated tax exemption for such year, or
“(B) the excess determined under paragraph (1) without regard to clause (iii) of paragraph (1)(B).
“(4) Special rule for subsection (d)(1) and (2).—
In applying this subsection for purposes of subsection (d)(1) and (2), the applicable percentage and the exclusion percentage shall be the percentage for the taxable year for which the underpayment is being determined.”
Adjustment of Overpayment.—
Allowance of adjustment.—
Subchapter B of chapter 65 (relating to rules of special application) is amended by adding at the end thereof the following new section:
“SEC. 6425. ADJUSTMENT OF OVERPAYMENT OF ESTIMATED INCOME TAX BY CORPORATION.
“(a) Application for Adjustment.—
“(1) Time for filing.—
A corporation may, after the close of the taxable year and on or before the 15th day of the third month thereafter, and before the day on which it files a return for such taxable year, file an application for an adjustment of an overpay-ment by it of estimated income tax for such taxable year. An application under this subsection shall not constitute a claim for credit or refund.
“(2) Form of application, etc.—
An application under this subsection shall be verified in the manner prescribed by section 6065
in the case of a return of the taxpayer, and shall be filed in the manner and form required by regulations prescribed by the Secretary or his delegate. The application shall set forth—
“(A) the estimated income tax paid by the corporation during the taxable year,
“(B) the amount which, at the time of filing the application, the corporation estimates as its income tax liability for the taxable year,
“(C) the amount of the adjustment, and
“(D) such other information for purposes of carrying out the provisions of this section as may be required by such regulations.
“(b) Allowance of Adjustment.—
“(1) Limited examination of application.—
Within a period of +5 days from the date on which an application for an adjustment is filed under subsection (a), the Secretary or his delegate shall make, to the extent he deems practicable in such period, a limited examination of the application to discover omissions and errors therein, and shall determine the amount of the adjustment upon the basis of the application and the examination; except that the Secretary or his delegate may disallow, without further action, any application which he finds contains material omissions or errors which he deems cannot be corrected within such 45 days.
“(2) Adjustment credited or refunded.—
The Secretary or his delegate, within the 45-day period referred to tn paragraph (1), may credit the amount of the adjustment against any liability in respect of an internal revenue tax on the part of the corporation and shall refund the remainder to the corporation.
“(3) Limitation.—
No application under this section shall be allowed unless the amount of the adjustment equals or exceeds (A) 10 percent of the amount estimated by the corporation on its application as its income tax liability for the taxable year, and (B) $500.
“(4) Effect of adjustment.—
For purposes of this title (other than section 6655), any adjustment under this section shall be treated as a reduction, in the estimated income tax paid, made on the day the credit is allowed or the refund is paid.
“(c) Definitions.—
For purposes of this section and section 6655(g) (relating to excessive adjustment)—
Post,p. 264.
“Income tax liability.”
“(1) The term ‘income tax liability’ means the excess of—
“(A) the tax imposed by section 11 or 1201(a), or subchapter L of chapter 1, whichever is applicable, over
“(B) the credits against tax provided by part IV of subchapter A of chapter 1.
“(2) The amount of an adjustment under this section is equal to the excess of—
“(A) the estimated income tax paid by the corporation during the taxable year, over
“(B) the amount which, at the time of filing the application, the corporation estimates as its income tax liability for the taxable year.
“(d) Consolidated Returns.—
If the corporation seeking an adjustment under this section paid its estimated income tax on a consolidated basis or expects to make a consolidated return for the taxable year, this section shall apply only to such extent and subject to such conditions, limitations, and exceptions as the Secretary or his delegate may by regulations prescribe.”
Amendment of section 6655.—
Section 6655 is amended by adding at the end thereof the following new subsection:
“(g) Excessive Adjustment Under Section 6425.—
“(1) Addition to tax.—
If the amount of an adjustment under
Ante, p. 262.
section 6425 made before the 15th day of the third month following the close of the taxable year is excessive, there shall be added to the tax under chapter 1 for the taxable year an amount determined at the rate of 6 percent per annum upon the excessive amount from the date on which the credit is allowed or the refund is paid to such 15th day.
“(2) Excessive amount.—
For purposes of paragraph (1), the excessive amount is equal to the amount of the adjustment or (if smaller) the amount by which—
“(A) the income tax liability (as defined in section 6425
Ante, p. 263.
(c)) for the taxable year as shown on the return for the taxable year exceeds
“(B) the estimated income tax paid during the taxable year, reduced by the amount of the adjustment.”
Conforming Amendments.—
Section 6655(d)(1) is amended by striking out “reduced by $100,000”.
Section 243(b)(3)(C)(v) is amended to read as follows:
“(v) surtax exemption, and one amount under sections 6154
Ante, pp. 260, 262.
(c)(2) and (3) and sections 6655(e)(2) and (3), for purposes of estimated tax payment requirements under section 6154 and the addition to the tax under section 6655 for failure to pay estimated tax.”
Section 6020(b)(1) is amended by striking out “section 6015 or 6016)” and inserting in lieu thereof “section 6015)”.
Section 6651(c) is amended by striking out “or section 6016”.
Section 7203 is amended by striking out “section 6015 or section 6016),” and inserting in lieu thereof “section 6015),”.
Section 7701(a)(34)(B) is amended by striking out “section 6016(b)” and inserting in lieu thereof “section 6154(c)”,
The table of sections for subpart B of part II of subchapter A of chapter 61 is amended by striking out the item relating
Ante, p. 260.
to section 6016.
The table of sections for part V of subchapter A of chapter 61 is amended by striking out the item relating to section 6074.
The table of sections for subchapter B of chapter 65 is amended by adding at the end thereof the following:
Effective Date.—
Except as provided by section 104, the amendments made by this section shall apply with respect to taxable years beginning after December 31, 1967.
SEC. 104. SPECIAL RULES FOR APPLICATION OF SECTIONS 102 AND 103.
Payment of Estimated Tax for Taxable Years Beginning Before Date of Enactment.—
In determining whether any taxpayer is required to make a declaration or amended declaration of estimated tax, or to pay any amount or additional amount of estimated tax, by reason of the amendments made by sections 102 and 103—
such amendments shall apply (A) in the case of an individual, only if the taxable year ends on or after September 30, 1968, and (B) in the case of a corporation, only if the taxable year ends on or after June 30, 1968,
in applying sections 6015, 6073, and 6654 of the Internal Revenue Code of 1954, such amendments shall first be taken into
account as of September 1, 1968, and
in applying sections 6016, 6074, 6154, and 6655 of such Code, such amendments shall first be taken into account as of
Ante, pp. 260, 262. 264.
May 31, 1968.
In the case of any amount or additional amount of estimated tax payable, by reason of such amendments, by a corporation on or after June 15, 1968, and before the 15th day after the date of the enactment of this Act, the time prescribed for payment of such amount or additional amount shall not expire before such date (not earlier than the 15th day after the date of the enactment of this Act) as the Secretary of the Treasury or his delegate shall prescribe.
Payment of Tax Surcharge for Taxable Years Ending Before Date of Enactment.—
In the case of a taxable year ending before the date of the enactment of this Act, the time prescribed for payment of the tax imposed by section 51 of the Internal Revenue Code of 1954 shall not expire before September 15, 1968.
Ante, p. 252.
SEC. 105. CONTINUATION OF EXCISE TAXES ON COMMUNICATION SERVICES AND ON AUTOMOBILES.
Passenger Automobiles.—
In general.—
Subparagraph (A) of section 4961(a)(2)
(relating to tax on passenger automobiles, etc.) is amended to read as follows:
“(A) Articles enumerated in subparagraph (B) are taxable at
whichever of the following rates is applicable:
“If the article is sold— The tax rate is— Before January 1, 1970 7 percent During 1970 5 percent During 1971 3 percent During 1972 1 percent The tax imposed by this subsection shall not apply with respect to articles enumerated in subparagraph (B) which are sold by the manufacturer, producer, or importer after December 31, 1972.”
Conforming amendment.—
Sect ion 6412(a)(1) (relating
80 Stat. 66; Ante, p. 92.
to floor stocks refunds on passenger automobiles, etc.) is amended by striking out “May 1, 1968, or January 1, 1969,” and inserting in lieu thereof “January 1, 1970, January 1, 1971, January 1, 1972, or January 1, 1973,”.
Communications Services.—
Continuation of tax.—
Paragraph (2) of section 4251(a) (relating to tax on certain communications services) is amended to read as follows:
“(2) The rate of tax referred to in paragraph (1) is as follows:
“Amounts paid pursuant to bills first redered— Percent— Before January 1, 1970 10 During 1970 5 During 1971 3 During 1972 1.”
Conforming amendments.—
Subsection (b) of section4251 (relating to termination of tax) is amended by striking out “January 1, 1969” and inserting in lieu thereof “January 1, 1973”, and subsection (c) of section 4251 is amended to read as follows:
“(c) Special Rule.—
For purposes of subsections (a) and (b), in the case of communications services rendered before November 1 of a calendar year for which a bill has not been rendered before the close of such year, a bill shall be treated as having been first rendered on December 31 of such year.”
Repeal of subchafter b of chapter 33.—
Effective with respect to amounts paid pursuant to bills first rendered on or after
January 1, 1973, subchapter B of chapter 33 (relating to the tax on communications) is repealed. For purposes of the preceding sentence, in the case of communications services rendered before November 1, 1972, for which a bill has not been rendered before January 1, 1973, a bill shall be treated as having been first rendered on December 31, 1972. Effective January 1, 1973, the table of subchapters for chapter 33 is amended by striking out the item relating to such subchapter B.
Effective Date.—
The amendments made by this section shall take effect as of April 30, 1968.
SEC. 106. TIMELY MAILING OF DEPOSITS.
Timely Mailing Treated as Timely Deposit.—
Section 7502 (relating to timely mailing treated as timely filing and paying) is amended by adding at the end thereof the following new subsection:
“(e) Mailing of Deposits.—
“(1) Date of deposit.—
If any deposit required to be made (pursuant to regulations prescribed by the Secretary or his delegate
under section 6302 (c)) on or before a prescribed date is, after such date, delivered by the United States mail to the bank or trust company authorized to receive such deposit, such deposit shall be deemed received by such bank or trust company on the date the deposit was mailed.
“(2) Mailing requirements.—
Paragraph (1) shall apply only if the person required to make the deposit establishes that—
“(A) the date of mailing falls on or before the second day before the prescribed date for making the deposit (including any extension of time granted for making such deposit), and
“(B) the deposit was, on or before such second day, mailed in the United States in an envelope or other appropriate wrapper, postage prepaid, properly addressed to the bank or trust company authorized to receive such deposit.
In applying subsection (c) for purposes of this subsection, the
“Payment”
term ‘payment’ includes ‘deposit, and the reference to the post-mark date refers to the date of mailing.”
Effective Date.—
The amendment made by subsection (a) shall apply only as to mailing occurring after the date of the enactment of this Act.
SEC. 107. INDUSTRIAL DEVELOPMENT BONDS.
Amendment of Section 103.—
Section 103 (relating to interest on certain governmental obligations) is amended by relettering subsection (c) as subsection (d) and by inserting after subsection (b) the following new subsection:
“(c) Industrial Development Bonds.—
“(1) Subsection (a)(1) not to apply.—
Except as otherwise provided in this subsection, any industrial development bond shall be treated as an obligation not described in subsection (a)(1).
“(2) Industrial development bond.—
For purposes of this subsection, the term ‘industrial development bond’ means any obligation—
“(A) which is issued as part of an issue all or a major portion of the proceeds of which are to be used directly or indirectly in any trade or business carried on by any person who is not mi exempt person (within the meaning of paragraph (3)), and
“(B) the payment of the principal or interest on which (under the terms of such obligation or any underlying arrangement) is, in whole or in major part—
“(i) secured by any interest in property used or to be used in a trade or business or in payments in respect of such property, or
“(ii) to be derived from payments in respect of property, or borrowed money, used or to be used in a trade or business.
“(3) Exempt person.—
For purposes of paragraph (2)(A), the term ‘exempt person’ means—
“(A) a governmental unit, or
“(B) an organization described in section 501(c)(3) and
exempt from tax under section 501(a)(but only with respect to a trade or business carried on by such organization which is not an unrelated trade or business, determined by applying sect ion 513(a) to such organization).
“(4) Certain exempt activities.—
Paragraph (1) shall not apply 1° any obligation which is issued as part of an issue substantially all of the proceeds of which are to be used to provide—
“(A) residential real property for family units,
“(B) sports facilities,
“(C) convention or trade show facilities,
“(D) airports, docks, wharves, mass commuting facilities, parking facilities, or storage or training facilities directly related to any of the foregoing,
“(E) sewage or solid waste disposal facilities or facilities for the local furnishing of electric energy, gas, or water, or
“(F) air or water pollution control facilities.
“(5) Industrial parks.—
Paragraph (1) shall not apply to any obligation issued as part of an issue substantially all of the proceeds of which are to be used for the acquisition or development of land as the site for an industrial park. For purposes of the
“Development of land.”
preceding sentence, the term ‘development of land’ includes the provision of water, sewage, drainage, or similar facilities, or of transportation, power, or communication facilities, which are incidental to use of the site as an industrial park, but, except with respect to such facilities, does not include the provision of structures or buildings.
“(6) Exemption for certain small issues.—
“(A) In general.—
Paragraph (1) shall not apply to any obligation issued as part of an issue the aggregate authorized face amount of which is $1,000,000 or less and substantially all of the proceeds of which are to be used (i) for the acquisition, construction, reconstruction, or improvement, of land or property of a character subject to the allowance for depreciation, or (ii) to redeem part or all of a prior issue which was issued for purposes described in clause (i) or this clause.
“(B) Certain prior issues taken into account.—
If—
“(i) the proceeds of two or more issues of obligations (whether or not the issuer of each such issue is the same) are or will be used primarily with respect to facilities located in the same incorporated municipality or located in the same county (but not in any incorporated municipality),
“(ii) the principal user of such facilities is or will be the same person or two or more related persons, and
“(iii) but for this subparagraph, subparagraph (A) would apply to each such issue,
then, for purposes of subparagraph (A), in determining the aggregate face amount of any later issue there shall be taken into account the face amount, of obligations issued under all prior such issues and outstanding at the time of such later issue (not including as outstanding any obligation which is to be redeemed from the proceeds of the later issue).
“(C) Related persons.—
For purposes of this paragraph and paragraph (7), a person is a related person to another person if—
“(i) the relationship between such persons would result
in a disallowance of losses under section 267 or 707(b), or
“(ii) such persons are members of the same controlled
group of corporations (as defined in section 1563(a), except that ‘more than 50 percent’ shall be substituted for ‘at least 80 percent’ each place it appears therein).
“(7) Exception.—
Paragraphs (4), (5), and (6) shall not apply with respect to any obligation for any period during which it is held by a person who is a substantial user of the facilities or a related person.”
Effective Date.—
In general.—
Except as provided by paragraph (2), the amendment made by subsection (a) shall apply to taxable years ending after April 30, 1968, but only with respect to obligations issued after such date.
Transitional provisions.—
Section 103(c)(1) of the Internal Revenue Code of 1954, as amended by subsection (a), shall not. apply with respect to any obligation issued before January 1, 1969, if before May 1, 1968—
the issuance of the obligation (or the project in connection with which the proceeds of the obligations are to be used) was authorized or approved by the governing body of the governmental unit issuing the obligation or by the voters of such governmental unit;
in connection with the issuance of such obligation or with the use of the proceeds to be derived from the sale of such obligation or the property to be acquired or improved with such proceeds, a governmental unit has made a significant financial commitment;
any person (other than a governmental unit) who will use the proceeds to be derived from the sale of such obligation or the property to be acquired or improved with such proceeds has expended (or has entered into a binding contract to expend) for purposes which are related to the use of such proceeds or property, an amount equal to or in excess of 20 percent of such proceeds; or
in the case of an obligation issued in conjunction with a project where financial assistance will be provided by a governmental agency concerned with economic development, such agency has approved the project or an application for financial assistance is pending.
SEC. 108. ADVERTISING IN A POLITICAL CONVENTION PROGRAM.
Allowance of Deduction.—
Section 276 (relating to certain indirect contributions to political parties) is amended by redesignating subsection (c) as (d), and by inserting after subsection (b) the following new subsection:
“(c) Advertising in a Convention Program of a National Political Convention.—
Subsection (a) shall not apply to any amount paid or incurred for advertising in a convention program of a political party distributed in connection with a convention held for the purpose of nominating candidates for the offices of President and Vice President of the United States, if the proceeds from such program are used solely to defray the costs of conducting such convention (or a subsequent convention of such party held for such purpose) and the amount paid or incurred for such advertising is reasonable in light of the business the taxpayer may expect to receive—
“(1) directly as a result of such advertising, or
“(2) as a result of the convention being held in an area in which the taxpayer has a principal place of business.”
Effective Date.—
The amendments made by subsection (a) shall apply with respect to amounts paid or incurred on or after January 1, 1968.
SEC. 109. TAX-EXEMPT STATUS OF CERTAIN HOSPITAL SERVICE ORGANIZATIONS.
Exemption From Tax.—
Section 501 (relating to exemption
from tax on corporations, etc.) is amended by redesignating subsection (e) as subsection (f) and by inserting after subsection (d) the following new subsection:
“(e) Cooperative Hospital Service Organizations.—
For purposes of this title, an organization shall be treated as an organization organized and operated exclusively for charitable purposes, if—
“(1) such organzation is organized and operated solely—
“(A) to perform, on a centralized basis, one or more of the following services which, if performed on its own behalf by a hospital which is an organization described in subsection (c)(3) and exempt from taxation under subsection (a), would constitute activities in exercising or performing the purpose or function constituting the basis for its exemption: data processing, purchasing, warehousing, billing and collection, food, industrial engineering, laboratory, printing, communications, record center, and personnel (including selection, testing, training, and education of personnel) services; and
“(B) to perform such services solely for two or more hospitals each of which is—
“(i) an organization described in subsection (c)(3) which is exempt from taxation under subsection (a),
“(ii) a constituent part of an organization described in subsection (c)(3) which is exempt from taxation under subsection (a) and which, if organized and operated as a separate entity, would constitute an organization described in subsection (c)(3), or
“(iii) owned and operated by the United States, a State, the District of Columbia, or a possession of the United States, or a political subdivision or an agency or instrumentality of any of the foregoing;
“(2) such organization is organized and operated on a cooperative basis and allocates or pays, within 8½ months after the close of its taxable year, all net earnings to patrons on the basis of services performed for them; and
“(3) if such organization has capital stock, all of such stock outstanding is owned by its patrons.
For purposes of this title, any organization which, by reason of the preceding sentence, is an organization described in subsection (c)(3) and exempt from taxation under subsection (a), shall be treated as a
hospital mid as an organization referred to in section 503(b)(5).”
Effective Date.—
The amendments made by subsection (a) shall apply to taxable years ending after the date of the enactment of this Act.
SEC. 110. SUBMISSION OF PROPOSALS FOR TAX REFORM.
Not later than December 31, 1968, the President shall submit to the Congress proposals for a comprehensive reform of the Internal Revenue Code of 1951.
TITLE II— EXPENDITURE AND RELATED CONTROLS
SEC. 201. LIMITATION ON THE NUMBER OF CIVILIAN OFFICERS AND EMPLOYEES IN THE EXECUTIVE BRANCH.
Except as otherwise provided in this section.—
No person shall be appointed as a full-time civilian employee to a permanent position in the executive branch during any month when the number of such employees is greater than the number of such employees on June 30, 1966.
The number of temporary and part-time employees in any department or agency in the executive branch during any month shall not be greater than the number of such employees during the corresponding month of 1967.
During any period when appointments are otherwise prohibited under subsection (a)(1), the head of any department or agency may, except as otherwise provided in this subsection, appoint a number of persons as full-time civilian employees in permanent positions in such department or agency equal to 75 percent of the number of vacancies in such positions which have occurred during such period by reason of resignation, retirement, removal, or death.
For purposes of paragraph (1), all agencies which, on the first day of any period when appointments are otherwise prohibited under subsection (a)(1), have 50 or fewer full-time civilian employees in permanent positions shall be treated as one agency, and the Director of the Bureau of the Budget (hereinafter in this section referred to as the “Director”) shall determine the vacancies in each such agency which may be filled by reason of paragraph (1).
For purposes of paragraph (1), the Director may reassign vacancies from one department or agency to another department or agency when such reassignment Is, in the opinion of the Director, necessary or appropriate because of the creation of a new department or agency, because of a change in functions, or for the more efficient operation of the Government.
If a full-time civilian employee in a permanent position is transferred from one department or agency to another department or agency—
such transfer shall be taken into account under paragraph (1) as an appointment by the head of the department or agency to which he transfers, and
subsection (h)(1) shall not apply to an appointment to the vacancy in the department or agency from which he transferred and such vacancy shall not be taken into account under paragraph (1).
For purposes of subsection (a)(2), the Director may reassign authorized temporary and part-time employment from one department or agency to another department or agency when such reassignment is, in the opinion of the Director, necessary or appropriate because of the creation of a new department or agency, because of a change in functions, or for the more efficient operation of the Government.
For purposes of this section, there shall not be taken into
Exceptions.
account—
any position tilled by appointment by the President by and with the advice and consent of the Senate, other than for purposes of determining under subsection (a)(1) the number of full-time civilian employees in permanent positions in the executive branch at any time,
casual employees or employees serving without compensation, and
those employees (not exceeding 70,000 during any month) appointed under the President’s program to provide summer employment for economically or educationally disadvantaged persons between the ages of 16 and 22.
The Director shall maintain a continuous study of all appropriations and contract authorizations in relation to personnel employed and shall reserve from expenditure the savings in salaries and wages resulting from the operation of this section, and any savings in other categories of expense which he determines will result from such operation.
The departments and agencies in the executive branch shall submit to the Director such information as may be necessary to enable him to carry out his functions under this section.
The Director shall submit to the Senate and the House of Representatives
Report to Congress.
at the end of each calendar quarter, beginning with the quarter ending September 30, 1968, a, report on the operation of this section.
Nothing in this section shall supersede or modify the reemployment
Armed Forces.
Reemployment rights.
50 USC app. 459.
rights of any person under section 6 of the Military Selective Service Act of 1967 or any other provision of law conferring reemployment rights upon persons who have performed active duty in the Armed Forces.
The Director shall prescribe such regulations as he deems necessary or appropriate to carry out the provisions of this section.
This section (other than subsection (i)) shall take effect on the
Effective date.
first day of the first month which begins after the date of the enactment of this Act.
SEC. 202. REDUCTION OF $6 BILLION IN EXPENDITURES DURING FISCAL YEAR 1969.
Expenditures and net lending during the fiscal year ending June 30, 1969, under the Budget, of the United States Government (estimated on page 55 of House Document No. 225, Part 1,90th Congress, as totaling $186,062,000,000), shall not exceed $180,062,000,000, except
Exceptions.
by expenditures and net lending—
which the President may determine are necessary for special
Vietnam operations.
support of Vietnam operations in excess of the amounts estimated therefor in the Budget,
for interest in excess of the amounts estimated therefor in
Interest.
the Budget,
for veterans’ benefits and services in excess of the amounts estimated therefor in the Budget, and
for payments from trust funds established by the Social Security Act, as amended, in excess of the amounts estimated therefor in the Budget.
The President shall reserve from expenditure and net lending, from appropriations or other obligational authority heretofore or hereafter made available, such amounts as may be necessary to effectuate the provisions of subsection (a).
SEC. 203. REDUCTION OF 110 BILLION IN NEW OBLIGATIONAL AUTHORITY.
The total new obligational authority and loan authority for the fiscal year ending June 30, 1969, provided by law heretofore or hereafter enacted (estimated on page 55 of House Document No. 225, Part 1,90th Congress, as $201,723,000,000) shall not exceed $191,723,000,000,
Exceptions.
Vietnam operations.
except for new obligational authority and loan authority—
which the President may determine are necessary for special support of Vietnam operations in excess of the amounts estimated therefor in the Budget,
for interest in excess of the amounts estimated therefor in the Budget,
for veterans’ benefits and services in excess of the amounts estimated therefor in the Budget, and
for payments from trust funds established by the Social Security Act, as amended, in excess of the amounts estimated therefor in the Budget.
In the event that the total amount of new obligational authority and loan authority for the fiscal year ending June 30, 1969, exceeds the limitation prescribed by subsection (a), the President shall reserve from such obligational and loan authority such amounts as may be necessary to effectuate the provisions of subsection (a). The amounts so reserved (other than any amounts reserved from trust funds) are
Report to Congress.
hereby rescinded as of the close of June 30, 1969. The President, at the time of the submission of the Budget for the fiscal year ending June 30, 1970, shall make a report to the Congress identifying the amounts reserved pursuant to this paragraph.
SEC. 204. SPECIFIC RECOMMENDATIONS FOR S3 BILLION RESCISSION IN OLD OBLIGATIONAL AUTHORITY.
The President shall cause a special study and analysis to be made of unobligated balances of appropriations and other obligational and loan authority available for obligation or commitment during the fiscal year ending June 30, 1969, which will remain available for obligation
Report to Congress.
or commitment after June 30, 1969, and make a report thereon to the Congress. Such report shall be made at the time or the submission of the Budget for the fiscal year ending June 30, 1970, and shall include specific recommendations for legislation to rescind not less than $800,000,000 of such unobligated balances.
SEC. 205. APPLICATION OF CERTAIN FORMULAS.
In the administration of any program as to which—
the amount of expenditures or obligations is limited pursuant to section 202 or 203, and
the allocation, grant, apportionment, or other distribution of funds among recipients is required to be determined by application of a formula involving the amount appropriated or otherwise made available for distribution,
the amount available for expenditure or obligation (as determined by the President) shall be substituted for the amount appropriated or otherwise made available in the application of the formula.
TITLE III— SOCIAL SECURITY ACT AMENDMENTS
SEC. 301. LIMITATION ON NUMBER OF CHILDREN WITH RESPECT TO WHOM FEDERAL PAYMENTS MAY BE MADE UNDER PROGRAM OF AID TO FAMILIES WITH DEPENDENT CHILDREN.
Subsection (d) of section 403 of the Social Security Act is amended
(1) by inserting “(1)” immediately after “(d)”, (2) by inserting “(except the succeeding paragraphs of this subsection)” immediately after “Act”, (3) by striking out “June 30, 1968” and inserting in lieu thereof “June 30, 1969”, and (4) by adding at the end of such subsection the following new paragraphs:
“(2) In the case of any State which is determined by the Secretary to have effectuated, in compliance with or in reliance upon or in consideration of a judicial decision (as defined in paragraph (3)), a policy of providing aid to families with dependent children under its State plan approved under this part to or on lie ha If of individuals who, except for such policy, would not be eligible for such aid, the average monthly number of dependent children under the age of 18 who have been deprived of parental support or care by reason of the continued absence from the home of a parent with respect to whom payments under this section were made to the State for the calendar quarter beginning January 1, 1968, shall, for purposes of applying the provisions of paragraph (1), be increased by the average monthly number, in the calendar quarter beginning April 1, 1969, of children under the age of 18 who are deprived of parental support or care by reason of the continued absence from the home of a parent and who by reason of such policy began to receive such aid after March 1968 and received such aid during the calendar quarter beginning April 1, 1969.
“(3) As used in paragraph (2), the term ‘judicial decision’ means
“Judicial decision.”
any decision by a court of the United States of competent jurisdiction in any case or controversy in which there is decided the issue of the validity, under the United States Constitution, of any law, rule, regulation, or policy of a State under which aid to families with dependent children is denied to individuals otherwise eligible therefor because of failure to meet duration of residence requirements or because of the relationship between a male individual and the mother of the child or children with respect to whom such aid is sought.”
SEC. 302. AID TO FAMILIES WITH DEPENDENT CHILDREN IN CASE OF UNEMPLOYED FATHERS RECEIVING UNEMPLOYMENT COMPENSATION.
Section 407 (b)(2)(C) of the Social Security Act is amended to read
as follows:
“(C) for the denial of aid to families with dependent children to any child or relative specified in subsection (a)—
“(i) if, and for so long as, such child’s father is not currently registered with the public employment offices in the State, and
“(ii) with respect to any week for which such child’s father receives unemployment compensation under an unemployment compensation law of a State or of the United States.”
SEC. 303. FEDERAL PAYMENTS UNDER MEDICAL ASSISTANCE PROGRAM FOR CERTAIN SERVICES INCLUDIBLE UNDER SUPPLEMENTARY MEDICAL INSURANCE PROGRAM.
Section 1903(b)(2) of the Social Security Act. is amended by striking out “1967” and inserting in lieu thereof “1969”.
Section 222(d) of the Social Security Amendments of 1967 is amended by striking out “1967” and inserting in lieu thereof “1969”.
The amendments made by subsection (a) shall be effective with respect, to calendar quarters beginning after December 31, 1967.
Approved June 28, 1968, 4:02 p.m.