Short title

This Act may be cited as the

Tax Reform Action Commission Act of 2005

Findings

The Congress finds the following: (1)The current Federal tax system is fundamentally defective, economically counter-productive, and its complexity leads to staggering costs for taxpayers. (2)Complexity and frequent change of the Internal Revenue Code of 1986 cause taxpayer and administrative confusion and uncertainty. The significant difficulty in understanding tax rules and regulations due to their lack of clarity and readability annually forces United States taxpayers to expend enormous sums of time and money on compliance and administration activities which represent a pure loss to the economy every year. (3)A major source of complexity is the use of the Federal tax system to advance social and economic policies. Targeted benefits in the form of preferential rates, exclusions, exemptions, deductions, credits, deferrals and adjustments are examples of factors that complicate the Internal Revenue Code of 1986. (4)Among the reasons that the Internal Revenue Code of 1986 is considered unfair is its dissimilar treatment of similarly situated taxpayers and because those who have the means to afford professional advice are more likely to receive optimal treatment and maximum benefits. (5)The tax laws of the United States are among the most burdensome and uncompetitive in the world and those laws make it difficult for domestically-owned United States companies to compete abroad and in the United States. A domestically-owned corporation is disadvantaged compared to a United States subsidiary of a foreign-owned corporation and international competitiveness is forcing many United States corporations to make a choice they do not want to make: go out of business, sell the business to a foreign competitor, or become a subsidiary of a foreign corporation. (6)The current tax system discourages saving and depresses the level of United States capital accumulation available for financing investment, which is critical to the growth potential of the economy, real income, and living standards. (7)Past efforts at partial reform of the Internal Revenue Code of 1986 have not succeeded in reducing its complexity, removing its distortions of economic incentives, or making it fairer. Those destructive problems and others stemming from the Internal Revenue Code of 1986 can and should be addressed through responsible fundamental tax reform. Despite the fact that a number of viable tax reform proposals have been offered, a lack of consensus has blocked progress toward the consideration and enactment of an existing or new plan. (8)Therefore, in order to proceed with responsible and needed tax reform, it is necessary to establish a Tax Reform Action Commission charged with developing a proposal to achieve tax reform that will benefit all Americans.

Objectives of reform

The Congress finds that it must act to reform the Internal Revenue Code of 1986 so that the United States has a tax system that is— (1)simple, transparent, and efficient; (2)fair and equitable to all Americans; and (3)neutral between different activities and between current consumption and future consumption.

Establishment of Commission

There is established in the legislative branch a Tax Reform Action Commission (in this Act referred to as the Commission).

Duties of the Commission

(a)

Recommendations for reform

Not later than 2 years after the date on which the Commission is established, the Commission shall make specific recommendations to Congress for reform of the internal revenue laws in a manner that incorporates the objectives of reform set forth in section 3. The recommendations of the Commission shall be based on its compilation and reconciliation of the recommendations of the task forces convened by the Commission pursuant to section 9 and shall provide for such appropriate interagency support and cooperation as may be necessary to attain such objectives. (b)

Legislative language

The recommendations required under subsection (a) shall include legislative language necessary for carrying out such recommendations. The Commission shall develop such legislative language after conducting such public hearings and consulting with such public or private entities as the Commission considers necessary and appropriate to make the recommendations required under subsection (a).

Composition of the Commission

(a)

Number and appointment

The Commission shall be composed of 15 members, as follows: (1)Three members appointed by the President, two from the executive branch of the Government and one from private life. (2)Four members appointed by the majority leader of the Senate, one from Members of the Senate and three from private life. (3)Two members appointed by the minority leader of the Senate, one from Members of the Senate and one from private life. (4)Four members appointed by the Speaker of the House of Representatives, one from Members of the House and three from private life. (5)Two members appointed by the minority leader of the House of Representatives, one from Members of the House and one from private life. (b)

Qualifications

The members of the Commission shall consist of individuals who are of recognized standing and distinction and who possess a demonstrated capacity to discharge the duties imposed on the Commission. (c)

Chair

The President shall designate a member of the Commission to serve as Chair of the Commission who shall chair the Commission, determine its duties, and supervise its staff. (d)

Terms of appointment

The members of the Commission shall be appointed not more than 30 days after the date of the enactment of this Act. The members of the Commission shall serve for the life of the Commission. (e)

Vacancies

A vacancy in the Commission shall not affect the power of the remaining members to execute the duties of the Commission but any such vacancy shall be filled in the same manner in which the original appointment was made.

Procedures

(a)

Meetings

The Commission shall meet at the call of its Chair or a quorum of its members. (b)

Quorum

A quorum shall consist of nine members of the Commission, except that a lesser number may conduct a hearing under subsection (c). (c)

Hearings and other activities

For the purpose of carrying out its duties, the Commission may hold such hearings and undertake such other activities as the Commission determines necessary to carry out its duties. (d)

Obtaining information

Upon request of the Commission, the Secretary of the Treasury and the head of any other department, agency, or instrumentality of the Federal Government shall furnish information deemed necessary by the Commission to enable it to carry out its duties.

Administration

(a)

Compensation

Except as provided in subsection (b), members of the Commission shall receive no additional pay, allowances, or benefits by reason of their service on the Commission. (b)

Travel expenses and per diem

Each member of the Commission who is not a present Member of the Congress and who is not otherwise an officer or employee of the Federal Government shall receive travel expenses and per diem in lieu of subsistence in accordance with sections 5702 and 5703 of title 5, United States Code. (c)

Staff and support services

(1)

Staff director

(A)

Appointment

The Chair in accordance with the rules agreed upon by the Commission shall appoint a staff director for the Commission. (B)

Compensation

The staff director shall be paid at a rate not to exceed the rate established for level V of the Executive Schedule under section 5315 of title 5, United States Code. (2)

Staff

The Chair in accordance with the rules agreed upon by the Commission shall appoint such additional personnel as the Commission determines to be necessary. (3)

Applicability of civil service laws

The staff director and other members of the staff of the Commission shall be appointed without regard to the provisions of title 5, United States Code, governing appointments in the competitive service, and shall be paid without regard to the provisions of chapter 51 and subchapter III of chapter 53 of such title relating to classification and General Schedule pay rates. (4)

Experts and consultants

With the approval of the Commission, the staff director may procure temporary and intermittent services under section 3109(b) of title 5, United States Code. (d)

Physical facilities

The Architect of the Capitol, in consultation with the appropriate entities in the legislative branch, shall locate and provide suitable office space for the operation of the Commission on a nonreimbursable basis. The facilities shall serve as the headquarters of the Commission and shall include all necessary equipment and incidentals required for the proper functioning of the Commission. (e)

Administrative support services and other assistance

(1)Upon the request of the Commission, the Architect of the Capitol, the Commissioner of Social Security, and the Administrator of General Services shall provide to the Commission on a nonreimbursable basis such administrative support services as the Commission may request. (2)In addition to the assistance set forth in paragraphs (1) and (2), departments and agencies of the United States may provide the Commission such services, funds, facilities, staff, and other support services as the Commission may deem advisable and as may be authorized by law. (f)

Use of mails

The Commission may use the United States mails in the same manner and under the same conditions as Federal agencies and shall, for purposes of the frank, be considered a commission of Congress as described in section 3215 of title 39, United States Code. (g)

Printing

For purposes of costs relating to printing and binding, including the cost of personnel detailed from the Government Printing Office, the Commission shall be deemed to be a committee of the Congress.

Task forces

(a)

In general

For purposes of making and compiling recommendations of the Commission for submission to the Congress pursuant to section 5, the Commission shall establish such task forces and designate such departments, agencies, and instrumentalities of the Federal Government as it determines necessary or appropriate to effectively obtain the expeditious attainment of the objectives specified in section 3. (b)

Agency cooperation

Each department, agency, and instrumentality designated by the Commission pursuant to subsection (a) in connection with one or more task forces specified in subsection (a) shall assign to the Commission representatives of such department, agency, or instrumentality for service on such task forces. The Commission, and each department, agency, and instrumentality designated for service on a task force under this section, shall provide such staff and administrative support services to the task force as may be necessary and appropriate, in accordance with procedures which shall be prescribed by the Commission. (c)

Duties of task forces

The Commission shall assign each task force a deadline for submitting its recommendations to the Commission and shall inform each House of the Congress of the convening of each task force and the deadline assigned to it. Each task force convened pursuant to subsection (a) shall, by such date as shall be specified by the Commission, provide the Commission with its recommendations for attaining the goals addressed by the task force, together with appropriate timetables for achieving such goals. (d)

Separate reports and termination

Upon submission by each task force of its recommendations to the Commission, the task force shall submit to each House of the Congress a copy of its recommendations to the Commission, and shall thereupon terminate.

10.

Congressional consideration of recommendations

(a)

Introduction of recommendations and committee consideration

(1)

Introduction

The legislative language transmitted pursuant to section 5(b) with the recommendations for reform of the Commission shall be in the form of a bill (in this title referred to as the reform bill). Such reform bill shall be introduced in the House of Representatives by the Speaker, and in the Senate, by the Majority Leader, on the first day of session ending after receipt of the language and such reform bill shall be referred to the appropriate committee of Congress under paragraph (2). If the reform bill is not introduced in accordance with the preceding sentence, the reform bill may be introduced in either House of Congress by any member thereof. (2)

Committee consideration

(A)

Referral

A reform bill introduced in the House of Representatives shall be referred to the Committee on Ways and Means of the House of Representatives. A reform bill introduced in the Senate shall be referred to the Committee on Finance of the Senate. (B)

Reporting

Not later than 30 days after the introduction of the reform bill, the committee of Congress to which the reform bill was referred shall report the bill or a committee amendment thereto. (C)

Discharge of committee

If the committee to which is referred a reform bill has not reported such reform bill (or an identical reform bill) at the end of 30 calendar days after its introduction or at the end of the first day after there has been reported to the House involved a reform bill, whichever is earlier, such committee shall be deemed to be discharged from further consideration of such reform bill and such reform bill shall be placed on the appropriate calendar of the House involved. (b)

Expedited procedure

(1)

Consideration

(A)

In general

Not later than 2 days after the date on which a committee has been discharged from consideration of a reform bill, the Speaker of the House of Representatives, or the Speaker’s designee, or the Majority Leader of the Senate, or the Leader’s designee, shall move to proceed to the consideration of the committee amendment to the reform bill, and if there is no such amendment, to the reform bill. It shall also be in order for any member of the House of Representatives or the Senate, respectively, to move to proceed to the consideration of the reform bill at any time after the conclusion of such 2-day period. (B)

Points of order waived

All points of order against the reform bill (and against consideration of the reform bill) are waived. (C)

Motion to proceed

A motion to proceed to the consideration of the reform bill is highly privileged in the House of Representatives and is privileged in the Senate and is not debatable. The motion is not subject to amendment, to a motion to postpone consideration of the reform bill, or to a motion to proceed to the consideration of other business. A motion to reconsider the vote by which the motion to proceed is agreed to or not agreed to shall not be in order. If the motion to proceed is agreed to, the House of Representatives or the Senate, as the case may be, shall immediately proceed to consideration of the reform bill without intervening motion, order, or other business, and the reform bill shall remain the unfinished business of the House of Representatives or the Senate, as the case may be, until disposed of. (D)

Limited debate

Debate on the reform bill and on all debatable motions and appeals in connection therewith shall be limited to not more than the lesser of 100 hours or 14 days, which shall be divided equally between those favoring and those opposing the reform bill. A motion further to limit debate on the reform bill is in order and not debatable. (E)

Amendments

(i)

Consideration in the House of Representatives

Subject to clause (iii), amendments to the reform bill during consideration in the House of Representatives shall be limited in accordance with a rule adopted by the Committee on Rules of the House of Representatives. (ii)

Consideration in the Senate

Subject to clause (iii), amendments to the reform bill during consideration in the Senate shall be limited to— (I)one first degree amendment per member or that member’s designee with 1 hour of debate equally divided; and (II)germane second degree amendments (without limit) with 30 minutes of debate equally divided. (iii)

Leadership amendments

The Speaker of the House of Representatives and the Minority Leader of the House of Representatives and the Majority Leader of the Senate and the Minority Leader of the Senate may each offer 1 first degree amendment (in addition to the amendments afforded such members under clause (i) or (ii)), with 4 hours of debate equally divided on each such amendment offered. No second degree amendments may be offered by the Speaker of the House of Representatives, the Minority Leader of the House of Representatives, the Majority Leader of the Senate, or the Minority Leader of the Senate in their leadership capacities. (F)

Vote on final passage

Immediately following the conclusion of the debate on the reform bill, and on all amendments offered to the reform bill, and all votes required on amendments offered to the reform bill, the vote on final passage of the reform bill shall occur. (G)

Other motions not in order

A motion to postpone consideration of the reform bill, a motion to proceed to the consideration of other business, or a motion to recommit the reform bill is not in order. A motion to reconsider the vote by which the reform bill is agreed to or not agreed to is not in order. (H)

Appeals

Appeals from the decisions of the Chair relating to the application of the rules of the House of Representatives or of the Senate, as the case may be, to the procedure relating to the reform bill shall be decided without debate. (2)

Consideration by other House

If, before the passage by one House of the reform bill that was introduced in such House, such House receives from the other House a reform bill as passed by such other House— (A)the reform bill of the other House shall be subject to the same rules as the rules under this section governing the reform bill introduced in the receiving House; and (B)the procedure in the House in receipt of the reform bill of the other House, with respect to the reform bill that was introduced in the House in receipt of the reform bill of the other House, shall be the same as if no reform bill had been received from the other House.

Upon passage of a reform bill by either House (or upon adoption of an amendment by either House to a reform bill received from the other House), it shall no longer be in order in the House passing such bill (or amendment) to consider any other reform bill under this section.

(3)

Consideration in conference

(A)

Convening of conference

(i)

In general

Immediately upon a final passage of the reform bill that results in a disagreement between the two Houses of Congress with respect to the bill, the conferees described in clause (ii) shall be appointed and a conference convened. (ii)

Conferees described

The conferees described in this clause are the following: (I)The Speaker of the House of Representatives. (II)The Minority Leader of the House of Representatives. (III)The Majority Leader of the Senate. (IV)The Minority Leader of the Senate. (V)Each member of the Committee on Ways and Means of the House of Representatives. (VI)Each member of the Committee on Finance of the Senate. (B)

Deadline for report

Not later than 14 days after the date on which conferees are appointed, the conferees shall file a report with the House of Representatives and the Senate resolving the differences between the Houses on the reform bill. (C)

Limitation on scope

A report filed under subparagraph (B) shall be limited to resolution of the differences between the Houses on the reform bill and shall not include any other matter. (D)

House consideration

(i)

In general

Notwithstanding any other rule of the House of Representatives, it shall be in order to immediately consider a report of a committee of conference on the reform bill filed in accordance with subparagraph (B). (ii)

Debate

Debate in the House of Representatives on the conference report shall be limited to the lesser of 50 hours or 7 days, equally divided and controlled by the Speaker of the House of Representatives and the Minority Leader of the House of Representatives or their designees. (iii)

Limitation on motions

A motion to further limit debate on the conference report is not debatable. A motion to recommit the conference report is not in order, and it is not in order to move to reconsider the vote by which the conference report is agreed to or disagreed to. (iv)

Vote on final passage

A vote on final passage of the conference report shall occur immediately at the conclusion or yielding back of all time for debate on the conference report. (E)

Senate consideration

(i)

In general

The motion to proceed to consideration in the Senate of the conference report shall not be debatable and the reading of such conference report shall be deemed to have been waived. (ii)

Debate

Consideration in the Senate of the conference report on a reform bill shall be limited to the lesser of 50 hours or 7 days, equally divided and controlled by the Majority Leader and the Minority Leader or their designees. (iii)

Limitation on motion to recommit

A motion to recommit the conference report is not in order. (4)

Rules of the Senate and House of Representatives

This subsection is enacted by Congress— (A)as an exercise of the rulemaking power of the Senate and House of Representatives, respectively, and is deemed to be part of the rules of each House, respectively, but applicable only with respect to the procedure to be followed in that House in the case of a bill, and it supersedes other rules only to the extent that it is inconsistent with such rules; and (B)with full recognition of the constitutional right of either House to change the rules (so far as they relate to the procedure of that House) at any time, in the same manner, and to the same extent as in the case of any other rule of that House.

11.

Termination

The Commission shall terminate 30 days after transmitting its recommendations pursuant to section 5.

12.

Authorization of appropriations

There are authorized to be appropriated such sums as may be necessary for the activities of the Commission. In order to provide funding before funds are otherwise specifically appropriated for such activities, of the amounts appropriated to the Department of the Treasury under the account Departmental Offices—Salaries and Expenses there is hereby transferred to the Commission $2,000,000 for such activities, which amount shall remain available until expended.