[Senate Hearing 108-]
[From the U.S. Government Publishing Office]



 
         LEGISLATIVE BRANCH APPROPRIATIONS FOR FISCAL YEAR 2006

                              ----------                              

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.

    MATERIAL SUBMITTED BY AGENCIES NOT APPEARING FOR FORMAL HEARINGS

    [Clerk's Note.--The following agencies of the Subcommittee 
on the Legislative Branch did not appear before the 
subcommittee this year. Chairman Allard requested these 
agencies to submit testimony in support of their fiscal year 
2006 budget request. Those statements submitted by the chairman 
follow:]

                      JOINT COMMITTEE ON TAXATION

           Prepared Statement of William M. Thomas, Chairman

    Mr. Chairman and members of the Subcommittee, it is my honor to 
submit the written testimony of the Joint Committee on Taxation 
(``Joint Committee'') with respect to the fiscal year 2006 
appropriation request for the Joint Committee.
    Mr. Chairman, the request of the Joint Committee represents the 
minimum amount necessary to fund the operations of the Joint Committee 
during fiscal year 2006. The following summarizes the main components 
of the Joint Committee's request.
  --The Joint Committee is requesting an increase of $330,000 for 
        fiscal year 2006 to cover cost-of-living adjustments and a 1-
        percent meritorious increase in personnel compensation 
        expenses.
  --The Joint Committee is requesting an increase of $3,000 for fiscal 
        year 2006 to cover increased utilization of the MetroChek 
        program of transit benefits.
  --The Joint Committee is requesting an increase of $67,464 for fiscal 
        year 2006 for equipment purchases. This amount represents the 
        amount rescinded from the Joint Committee fiscal year 2005 
        appropriation request.
  --The Joint Committee is requesting an increase in nonpersonnel 
        expenses of $15,000 for fiscal year 2006 to cover cost-of-
        living adjustments.
    The following discussion provides (1) detailed information on the 
Joint Committee appropriation request for fiscal year 2006, (2) a 
review of Joint Committee operations during calendar year 2004, and (3) 
a description of the anticipated workload of the Joint Committee during 
calendar year 2005.

           SUMMARY OF FISCAL YEAR 2006 APPROPRIATION REQUEST

    The following table summarizes the Joint Committee's appropriation 
request for fiscal year 2006 relative to the fiscal year 2005 
appropriation.

------------------------------------------------------------------------
                                            Fiscal year     Fiscal year
                                               2005            2006
------------------------------------------------------------------------
Personnel Costs:
    Personnel compensation..............      $7,653,000      $7,983,000
    Transit benefits....................          20,000          23,000
Nonpersonnel Funding:
    Travel..............................          12,000          12,000
    Rent, communications, and utilities.          35,000          36,000
    Printing............................           6,000           6,000
    Other services......................         125,000         127,000
    Supplies and materials..............         185,000         189,000
    Equipment...........................         329,536         405,000
                                         -------------------------------
      Total fiscal year 2005               \1\ 8,365,536  ..............
       appropriation....................
      Total fiscal year 2006 request....       8,781,000  ..............
------------------------------------------------------------------------
\1\ After reduction for rescission amount of $67,464.

           DETAILS OF FISCAL YEAR 2006 APPROPRIATION REQUEST

Personnel expenses
            Details of appropriation request
    The Joint Committee's appropriation for fiscal year 2006 relative 
to fiscal year 2005 requests $333,000 for increased personnel costs 
which includes personnel compensation and transit benefits. This 
increase is attributable to the following amounts, which have been 
calculated pursuant to information supplied by the House Office of 
Finance:
    Fiscal year 2005 cost-of-living adjustment annualized.--The Joint 
Committee requests $72,000 to fund 3 months of the 3.7 percent cost-of-
living adjustment for calendar year 2005.\1\
---------------------------------------------------------------------------
    \1\ The $72,000 amount reflects an increase of $5,000 over the 
amount included in the original JCT budget request of November 15, 2004 
and supporting schedules. The increase reflects an updated COLA for 
calendar year 2005 which affects the first quarter of the fiscal year 
2006 request (i.e., Oct. 1, 2005-Dec. 31, 2005). This COLA postdated 
the original JCT budget submission and was unilaterally added to the 
original JCT budget request by the House Finance Office.
---------------------------------------------------------------------------
    Fiscal year 2006 cost-of-living adjustment annualized.--The Joint 
Committee requests $179,000 to fund 9 months of the projected 3.1 
percent cost-of-living adjustment for calendar year 2006.
    Meritorious increases.--The Joint Committee requests $79,000 for 1-
percent meritorious increases for fiscal year 2006.
    Transit benefits.--The Joint Committee requests $3,000 for 
additional Metro benefits.
            Need for adequate funding for personnel expenses
    The funding of adequate amounts for personnel costs is critical to 
the continued ability of the Joint Committee to attract and retain 
qualified professional staff.
    Joint Committee professional staff include tax lawyers, certified 
public accountants, Ph.D. economists, and highly trained computer 
specialists. In order to provide the highly technical services required 
by Joint Committee lawyers and certified public accountants, the Joint 
Committee generally requires such professionals to have a minimum of 3-
4 years of private practice or comparable experience. It is becoming 
increasingly difficult to attract such individuals to public service 
and retain them for significant periods given the disparity between 
private sector salaries and the salaries the Joint Committee can pay.
    A similar problem arises with Joint Committee staff economists. The 
Joint Committee typically hires economists who are just completing 
their Ph.D. programs. It generally takes an entry-level economist 2-3 
years of training to become proficient in the unique skills required to 
prepare revenue estimates for proposed tax legislation. Once this 
training period is complete, these economists have highly marketable 
skills and the private sector firms that attempt to duplicate the work 
of the Joint Committee offer significant salary increases to attract 
Joint Committee economists.
    At this time, the Joint Committee is actively recruiting to fill 
open staff positions that have resulted from staff attrition during the 
last Congress. However, unless adequate amounts are funded for 
personnel expenses for fiscal year 2006, the Joint Committee will not 
be able to fill all of its open positions. Failure to fill open 
positions may result in a reduced level of service to the Congress.

Nonpersonnel expenses
            In general
    The Joint Committee is requesting $15,000 to cover cost-of-living 
adjustments in nonpersonnel expenses for fiscal year 2006. In addition, 
the Joint Committee is requesting an additional $67,464 for equipment 
for fiscal year 2006. The additional money for equipment, which 
represents the amount rescinded from the fiscal year 2005 request, is 
requested for the combination of ongoing computer upgrades and the 
additional cost of equipment to provide for necessary alternative 
computing capabilities.
            Travel
    The Joint Committee requests $12,000 for travel during fiscal year 
2006. This amount will be used to pay travel expenses of Joint 
Committee consultants and Joint Committee staff attending educational 
conferences.
            Rent, communications, and utilities
    The Joint Committee requests $36,000 for fiscal year 2006 to cover 
anticipated expenses for communications and utilities.
            Printing
    The Joint Committee requests $6,000 to cover anticipated printing 
expenses for fiscal year 2006.
            Other services
    The Joint Committee requests $127,000 for other services for fiscal 
year 2006. The Joint Committee utilizes consultants and other service 
providers to perform functions that the Joint Committee staff does not 
have the time or expertise to perform. Most of these services relate to 
the revenue estimating work of the Joint Committee, including the 
preparation of macroeconomic analysis. As the graph in Attachment C to 
this statement demonstrates, the number of revenue estimating requests 
received by the Joint Committee continues to increase. The needs of the 
Members for immediate responses to requests for revenue estimates and 
the substantial volume of requests that the Joint Committee staff 
receives each year places limitations on the ability of the Joint 
Committee staff to perform certain work, such as the manipulation of 
new data sets, that improves the quality of Joint Committee revenue 
estimates. The Joint Committee staff has found that it is more cost 
efficient to contract some of this work to outside consultants.
            Supplies and materials
    The Joint Committee requests $189,000 for supplies and materials 
for fiscal year 2006. The largest expense in this category is a 
projected $150,000 for subscriptions and publications to keep up with 
current developments in tax law.
            Equipment
    The Joint Committee requests $405,000 for equipment for fiscal year 
2006. The Joint Committee staff anticipates expending approximately 
$230,000 for replacement of servers and for storage upgrades for the 
Joint Committee's computing needs, which include large-scale economic 
modeling, macroeconomic modeling and simulation, case tracking, 
statistical analysis, and general functions such as word processing, 
spreadsheets and graphing. In addition, Xerox maintenance and usage 
costs are projected to be approximately $50,000, and hardware and 
software maintenance are estimated to be $125,000.

 REVIEW OF JOINT COMMITTEE ON TAXATION OPERATIONS DURING CALENDAR YEAR 
                                  2004

In general
    Attachments A through E provide a summary of the activity of the 
Joint Committee staff for calendar year 2004. The attachments include 
the following information:
    Attachment A--information relating to the legislative tax reports 
(Committee and Conference Reports) drafted by Joint Committee staff for 
the revenue-related legislation considered by the House Committee on 
Ways and Means and/or the Senate Committee on Finance and public laws 
involving the Joint Committee staff during 2004.
    Attachment B--a listing of all documents published by the Joint 
Committee staff during 2004.
    Attachment C--a graph showing the number of requests received by 
the Joint Committee from revenue estimates and other assistance during 
the period 1986 through 2004.
    Attachment D--a table providing information on revenue estimate 
requests and Joint Committee staff responses to various categories of 
requesting Members for 2004.
    (5) Attachment E--information relating to the Joint Committee 
staff's statutorily mandated duty to review large income tax refunds.

Tax legislative reports
    The Joint Committee staff assisted in the preparation of 10 
Committee and Conference reports relating to tax legislation considered 
by the Congress in 2004 and provided assistance on two income tax 
treaty Committee reports. A complete listing of these reports is 
included at Attachment A. In addition the Joint Committee staff worked 
on 17 bills signed into law during 2004.

Joint Committee staff publications
    In addition to its work on committee and conference reports, the 
Joint Committee staff published 74 documents during 2004, including 
pamphlets and other documents prepared for committee hearings and 
markups and conference action (see Attachment B). All Joint Committee 
staff publications are accessible from the Joint Committee's web page 
(http://www.house.gov/jct).

Revenue estimates and related analysis
    Attachments C and D show data relating to the Joint Committee 
staff's revenue estimating activity. Attachment C shows the number of 
revenue estimate requests received by the Joint Committee staff each 
year from 1986 through 2004.
    Attachment D also shows information on revenue estimate requests 
and Joint Committee staff responses to various categories of Members 
requesting revenue estimates for 2004. The Joint Committee staff is 
cognizant of its responsibility to provide service to all Members who 
request it and attempts to be as responsive to non-tax-writing 
Committee Members as it is to the tax-writing Committee Members.
    The Joint Committee staff has been developing a capacity to analyze 
the effects of major tax legislation on the economy. Several 
macroeconomic simulation models are used in this analysis, including 
the staff's Macroeconomic Equilibrium Growth model, and commercially 
available econometric and overlapping generation models requiring 
outside contracts. In addition, the staff is working on an in-house 
neoclassical growth model that can incorporate people's expectations 
about future policy to provide additional perspective on proposals 
involving phase-ins, phase-outs, and sunsets of tax policy. 
Developmental work is being done in connection with anticipated 
analyses of tax reform and social security reform.

JCT staff studies, investigations, and refund review
            Refund review
    An ongoing, statutorily mandated function of the Joint Committee is 
the review of IRS refunds or credits of income tax, estate and gift 
tax, or any tax on public charities, foundations, pension plans, or 
real estate investment trusts in excess of $2 million. The Joint 
Committee staff reviews and reports on such refund cases and makes 
comments or recommendations with respect to the proposed refund case to 
the IRS. Attachment E contains information concerning the Joint 
Committee staff refund review work. During fiscal year 2004, the Joint 
Committee refund staff reviewed 1,163 cases involving $22.97 billion in 
proposed refunds and 64 large deficiency cases. The Joint Committee 
staff raised concerns in 56 refund cases. Errors identified by the 
Joint Committee staff produced a net reduction in refunds of $61 
million in fiscal year 2004. The average annual reduction in refunds 
for the last 10 years is $38.8 million.

 ANTICIPATED WORKLOAD OF THE JOINT COMMITTEE ON TAXATION FOR CALENDAR 
                               YEAR 2005

    During 2005, the Joint Committee expects an increase in workload 
over 2004. The Joint Committee staff will provide support to the 
Congress and the tax-writing committees as broad-based and other tax 
relief proposals, including President Bush's fiscal year 2006 budget 
proposals, are considered by the Congress. The Joint Committee staff is 
preparing for legislative action as a result of the President's 
Commission on broad based tax reform as well as the President's 
initiative to reform the Social Security system. In addition, the Joint 
Committee is preparing for Congressional consideration of legislation 
to extend various expiring tax provisions and to reform the laws 
relating to employer-provided retirement plans. As part of the 
legislative process, the Joint Committee staff will (1) develop 
legislative proposals, (2) assist in the drafting of such proposals, 
(3) provide revenue estimates for numerous legislative options and 
amendments, (4) prepare markup documents and committee reports, and (5) 
provide additional economic analysis to the Members.
    In addition to this anticipated legislative activity, the Joint 
Committee staff will continue to satisfy its responsibilities under the 
IRS Restructuring and Reform Act of 1998. Thus, the Joint Committee 
staff will prepare a complexity analysis for inclusion in Committee and 
Conference reports for all revenue legislation. In addition, the Joint 
Committee staff has also organized the joint review in 2005 relating to 
the operations of the Internal Revenue Service and prepared materials 
for the use of the Congress in connection with that review.
    The Joint Committee will continue to satisfy its statutory 
responsibility to review large refund cases submitted to it by the IRS.
    The Joint Committee staff expects to assist the Senate Committee on 
Foreign Relations with respect to its work to review proposed tax 
treaties.
    The Joint Committee staff anticipates that requests from Members 
for revenue estimates for proposed legislation will increase in 2005, 
relative to 2004. In addition, the Joint Committee staff will continue 
to work to develop a macroeconomic model that will provide information 
on the possible effects on the economy of major tax legislation.

                                SUMMARY

    Mr. Chairman, the Joint Committee has a reputation for providing 
timely, high quality service to the Congress with respect to proposed 
revenue legislation. However, the highly technical nature of the Joint 
Committee's work makes it imperative that the Joint Committee be able 
to hire and retain qualified tax professionals. If the Joint 
Committee's appropriation request is not approved, the Joint Committee 
will not have adequate resources to fill all of its open staff 
positions.
    I respectfully request that the Subcommittee approve the 
appropriation request of the Joint Committee on Taxation for fiscal 
year 2006. This request is the minimum amount necessary to fund the 
operations of the Joint Committee during fiscal year 2006. If the 
requested funding is not provided, difficult decisions will be required 
concerning what staff activities can and should be funded.

  Attachment A.--Committee and Conference Reports on Which the Joint 
   Committee on Taxation Staff Provided Assistance, and Public Laws 
            Involving the Joint Committee Staff During 2004

House Committee on Ways and Means
    108-444--Highway Reauthorization Tax Act of 2004, March 23, 2004
    108-548--American Jobs Creation Act of 2004, June 16, 2004
    108-472--The Jamestown 400th Anniversary Commemorative Coin Act of 
2003, July 6, 2004
    108-473--John Marshall Commemorative Coin Act, July 6, 2004
    108-474--Marine Corps 230th Anniversary Commemorative Coin Act, 
July 6, 2004

Senate Committee on Finance
    108-257--Tax Administration Good Government Act, May 4, 2004
    108-266--National Employee Savings and Trust Equity Guarantee Act, 
May 14, 2004

Conference Committee Reports
    108-457--Pension Funding Equity Act of 2004, April 1, 2004
    108-696--Working Families Tax Relief Act of 2004, September 23, 
2004
    108-755--American Jobs Creation Act of 2004, October 7, 2004
Senate Committee on Foreign Relations
    108-9--Tax Convention with the Government of Japan
    108-11--Tax Convention and Protocol with the Government of Sri 
Lanka

Public Laws Involving Joint Committee on Taxation
    108-202--Surface Transportation Extension Act of 2004, February 29, 
2004
    108-203--Social Security Protection Act of 2004, March 2, 2004
    108-218--Pension Funding Equity Act of 2004, April 10, 2004
    108-224--Surface Transportation Extension Act of 2004, Part II, 
April 30, 2004
    108-263--Surface Transportation Extension Act of 2004, Part III, 
June 30, 2004
    108-280--Surface Transportation Extension Act of 2004, Part IV, 
July 30, 2004
    108-289--Jamestown 400th Anniversary Commemorative Coin Act of 
2004, August 6, 2004
    108-290--John Marshall Commemorative Coin Act, August 6, 2004
    108-291--Marine Corps 230th Anniversary Commemorative Coin Act, 
August 6, 2004
    108-310--Surface Transportation Extension Act of 2004, Part V, 
September 30, 2004
    108-311--Working Families Tax Relief Act of 2004, October 4, 2004
    108-357--American Jobs Creation Act of 2004, October 22, 2004
    108-375--Ronald W. Reagan Defense Authorization Act for Fiscal Year 
2005, October 28, 2004
    108-429--Miscellaneous Trade and Technical Corrections Act, 
December 3, 2004
    108-447--Consolidated Appropriations Act, 2005, December 8, 2004
    108-476--YMCA Retirement Fund, December 21, 2004
    108-493--Modification to the Taxation of Arrow Components, December 
23, 2004

               Attachment B.--Joint Committee on Taxation

                            JCS-04 DOCUMENTS

    JCS-1-04--Explanation Of Proposed Income Tax Treaty Between The 
United States And Japan Scheduled for a Hearing Before the Committee on 
Foreign Relations United States Senate on February 25, 2004. February 
19, 2004
    JCS-2-04--Explanation Of Proposed Income Tax Treaty Between The 
United States And The Democratic Socialist Republic Of Sri Lanka 
Scheduled for a Hearing Before the Committee on Foreign Relations 
United States Senate on February 25, 2004. February 19, 2004
    JCS-3-04--Description Of Revenue Provisions Contained In The 
President's Fiscal Year 2005 Budget Proposal. February 2004

                            JCX-04 DOCUMENTS

    JCX-1-04--List Of Expired And Expiring Federal Tax Provisions. 
January 21, 2004
    JCX-2-04--Description Of The Chairman's Mark Of The ``Tax 
Administration Good Government Act Of 2004'' Scheduled for Markup by 
the Senate Committee on Finance on February 2, 2004. January 29, 2004
    JCX-3-04--Estimated Revenue Effects Of The Chairman's Mark Of The 
``Tax Administration Good Government Act Of 2004,'' Scheduled For 
Markup By The Committee On Finance On February 2, 2004. January 29, 
2004
    JCX-4-04--Description Of Chairman's Modification To The ``National 
Employee Savings And Trust Equity Guarantee Act Of 2003'' As Marked Up 
September 17, 2003, As Scheduled For Markup By The Senate Committee On 
Finance On February 2, 2004. January 29, 2004
    JCX-5-04--Description Of The ``Highway Reauthorization And Excise 
Tax Simplification Act Of 2004'' Scheduled for Markup by the Senate 
Committee on Finance on February 2, 2004. January 29, 2004
    JCX-6-04--Estimated Revenue Effects Of The ``Highway 
Reauthorization And Excise Tax Simplification Act Of 2004,'' Scheduled 
For Markup By The Committee On Finance On February 2, 2004. January 30, 
2004
    JCX-7-04--Estimated Revenue Effects Of Tax And Pension Provisions 
Of H.R. 3108, The ``Pension Stability Act,'' As Passed By The Senate On 
January 28, 2004. January 30, 2004
    JCX-8-04--Description Of Additional Chairman's Modifications To The 
``National Employee Savings And Trust Equity Guarantee Act Of 2003'' As 
Marked Up September 17, 2003, Scheduled For Markup By The Senate 
Committee On Finance On February 2, 2004. February 2, 2004
    JCX-9-04--Estimated Budget Effects Of The ``National Employee 
Savings And Trust Equity Guarantee Act,'' As Ordered Reported By The 
Committee On Finance On September 17, 2003, And As Proposed To Be 
Modified On February 2, 2004. February 2, 2004
    JCX-10-04--Modification Of The Chairman's Mark On The ``Highway 
Reauthorization And Excise Tax Simplification Act Of 2004'' Scheduled 
for Markup by the Senate Committee on Finance on February 2, 2004. 
February 2, 2004
    JCX-11-04--Estimated Revenue Effects Of The Chairman's 
Modifications To The ``Highway Reauthorization And Excise Tax 
Simplification Act Of 2004,'' Scheduled For Markup By The Committee On 
Finance On February 2, 2004. February 2, 2004
    JCX-12-04--Technical Explanation Of The Tax And Pension Provisions 
Of H.R. 3108, The ``Pension Stability Act,'' As Passed By The Senate On 
January 28, 2004. February 9, 2004
    JCX-13-04--Testimony Of The Staff Of The Joint Committee On 
Taxation Before The Senate Committee On Foreign Relations Hearing On 
The Proposed Tax Treaties With Japan And Sri Lanka. February 23, 2004
    JCX-14-04--Estimated Budget Effects Of Revenue Provisions Contained 
In The President's Fiscal Year 2005 Budget Proposal. February 27, 2004
    JCX-15-04--Updated Estimated Budget Effects Of S. 1637, The 
``Jumpstart Our Business Strength (`JOBS') Act,'' As Reported By The 
Committee On Finance. March 3, 2004
    JCX-16-04--Present Law And Background Relating To Individual 
Taxpayer Identification Numbers (``ITNS'') Scheduled for a Joint 
Hearing Before the Subcommittee on Oversight and the Subcommittee on 
Social Security of the House Committee on Ways and Means on March 10, 
2004. March 5, 2004
    JCX-17-04--Comparison Of The Tax And Pension Provisions Of H.R. 
3108, As Passed By The House And The Senate. March 5, 2004
    JCX-18-04--Comparison Of The Estimated Revenue Effects Of The Tax 
And Pension Provisions Of H.R. 3108, The ``Pension Funding Equity Act 
Of 2003,'' As Passed By The House Of Representatives And H.R. 3108, The 
``Pension Stability Act,'' As Passed By The Senate. March 5, 2004
    JCX-19-04--Estimated Revenue Effects Of Certain Tax Provisions 
Contained In S. 1072, The ``Safe, Accountable, Flexible, And Efficient 
Transportation Equity Act Of 2004,'' As Passed By The Senate. March 12, 
2004
    JCX-20-04--Description Of ``The Highway Reauthorization Tax Act Of 
2004'' Scheduled for Markup by the House Committee on Ways and Means on 
March 17, 2004. March 15, 2004
    JCX-21-04--Estimated Revenue Effects Of H.R. 3971, The ``Highway 
Reauthorization Tax Act Of 2004,'' Scheduled For Markup By The 
Committee On Ways And Means On March 17, 2004. March 17, 2004
    JCX-22-04--Estimated Trust Fund And General Fund Effects Of Certain 
Tax Provisions Contained In H.R. 3971, The ``Highway Reauthorization 
Tax Act Of 2004,'' Scheduled For Markup By The Committee On Ways And 
Means On March 17, 2004. March 17, 2004
    JCX-23-04--Description Of Chairman's Amendment In The Nature Of A 
Substitute To H.R. 3971 The ``Highway Reauthorization Tax Act Of 
2004''. March 17, 2004
    JCX-24-04--Estimated Revenue Effects Of The Chairman's Amendment In 
The Nature Of A Substitute To H.R. 3971, The ``Highway Reauthorization 
Tax Act Of 2004,'' Scheduled For Markup By The Committee On Ways And 
Means On March 17, 2004. March 17, 2004
    JCX-25-04--Estimated Trust Fund And General Fund Effects Of Certain 
Tax Provisions Contained In The Chairman's Amendment In The Nature Of A 
Substitute To H.R. 3971, The ``Highway Reauthorization Tax Act Of 
2004,'' Scheduled For Markup By The Committee On Ways And Means On 
March 17, 2004. March 17, 2004
    JCX-26-04--Estimated Trust Fund And General Fund Effects Of Certain 
Provisions In The ``Highway Reauthorization And Excise Tax 
Simplification Act Of 2004,'' As Passed By The Senate. March 26, 2004
    JCX-27-04--Estimated Revenue Effects Of Title IX Of H.R. 3550, The 
``Highway Reauthorization Tax Act Of 2004,'' Scheduled For 
Consideration On The House Floor. April 1, 2004
    JCX-28-04--Estimated Revenue Effects Of The Tax And Pension 
Provisions Contained In The Conference Agreement For H.R. 3108, The 
``Pension Funding Equity Act Of 2004''. April 2, 2004
    JCX-29-04--Revised Disclosure Report For Public Inspection Pursuant 
To Internal Revenue Code Section 6103(p)(3)(C) For Calendar Year 2002. 
April 6, 2004
    JCX-30-04--Disclosure Report For Public Inspection Pursuant To 
Internal Revenue Code Section 6103(p)(3)(C) For Calendar Year 2003. 
April 6, 2004
    JCX-31-04--Estimated Revenue Effects Of H.R. 4181, Scheduled For 
Consideration On The House Floor. April 28, 2004
    JCX-32-04--Estimated Revenue Effects Of H.R. 4227, For 
Consideration By The House Committee On Rules. May 5, 2004
    JCX-33-04--Estimated Revenue Effects Of The Revenue Provisions 
Contained In H.R. 4279, As Passed By The House Of Representatives. May 
14, 2004
    JCX-34-04--Estimated Revenue Effects Of H.R. 4275, As Passed By The 
House Of Representatives. May 14, 2004
    JCX-35-04--Estimated Budget Effects Of H.R. 1528, The ``Tax 
Administration Good Government Act,'' As Passed By The Senate On May 
19, 2004. May 20, 2004
    JCX-36-04--Estimated Revenue Effects Of S. 1637, The ``Jumpstart 
Our Business Strength (`JOBS') Act,'' As Passed By The Senate. May 20, 
2004
    JCX-37-04--Estimated Revenue Effects Of H.R. 4359, The ``Child 
Credit Preservation And Expansion Act Of 2004,'' As Passed By The House 
Of Representatives. May 21, 2004
    JCX-38-04--Estimated Revenue Effects Of H.R. 4520, The ``American 
Jobs Creation Act Of 2004,'' Scheduled For Markup By The Committee On 
Ways And Means On June 10, 2004. June 8, 2004
    JCX-39-04--Comparison Of The Estimated Revenue Effects Of The Tax 
Provisions Contained In H.R. 3550, The ``Transportation Equity Act: A 
Legacy For Users,'' As Passed By The House Of Representatives, And H.R. 
3550, The ``Safe, Accountable, Flexible, And Efficient Transportation 
Equity Act Of 2004,'' As Amended By The Senate. June 9, 2004
    JCX-40-04--Comparison Of The Estimated Trust Fund And General Fund 
Effects Of Certain Tax Provisions Contained In H.R. 3550, The 
``Transportation Equity Act: A Legacy For Users,'' As Passed By The 
House Of Representatives, And H.R. 3550, The ``Safe, Accountable, 
Flexible, And Efficient Transportation Equity Act Of 2004,'' As Amended 
By The Senate. June 9, 2004
    JCX-41-04--Description Of H.R. 4520, The ``American Jobs Creation 
Act Of 2004'' Scheduled for Markup by the House Committee on Ways and 
Means on June 14, 2004. June 10, 2004
    JCX-42-04--Description Of The Chairman's Amendment In The Nature Of 
A Substitute To The Provisions Of H.R. 4520, The ``American Jobs 
Creation Act Of 2004''. June 10, 2004
    JCX-43-04--Estimated Revenue Effects Of The Chairman's Amendment In 
The Nature Of A Substitute To H.R. 4520, The ``American Jobs Creation 
Act Of 2004,'' Scheduled For Markup By The Committee On Ways & Means On 
June 14, 2004. June 10, 2004
    JCX-44-04--Description Of Present Law Relating To Charitable And 
Other Exempt Organizations And Statistical Information Regarding Growth 
And Oversight Of The Tax-Exempt Sector Scheduled for a Public Hearing 
Before the Senate Committee on Finance on June 22, 2004. June 22, 2004
    JCX-45-04--Estimated Revenue Effects Of H.R. 4520, The ``American 
Jobs Creation Act Of 2004,'' As Passed By The House Of Representatives. 
June 22, 2004
    JCX-46-04--Description Of The Chairman's Amendment To H.R. 1914, 
The ``Jamestown 400th Anniversary Commemorative Coin Act Of 2003,'' 
H.R. 2768, The ``John Marshall Commemorative Coin Act,'' And H.R. 3277, 
The ``Marine Corps 230th Anniversary Commemorative Coin Act''. June 22, 
2004
    JCX-47-04--Comparison Of The Tax Provisions Contained In H.R. 3550, 
The ``Transportation Equity Act: A Legacy For Users,'' As Passed By The 
House Of Representatives, And H.R. 3550, The ``Safe, Accountable, 
Flexible, And Efficient Transportation Equity Act Of 2004,'' As Amended 
By The Senate. June 25, 2004
    JCX-48-04--Present Law And Background Relating To The Tax Treatment 
Of Tip Income. July 13, 2004
    JCX-49-04--Description Of H.R. 982, A Bill ``To Clarify The Tax 
Treatment Of Bonds And Other Obligations Issued By The Government Of 
American Samoa''. July 16, 2004
    JCX-50-04--Estimated Revenue Effects Of H.R. 4841, The ``Tax 
Simplification For Americans Act Of 2004,'' As Amended, And Scheduled 
For Consideration By The House Of Representatives. July 21, 2004
    JCX-51-04--Estimated Revenue Effects Of H.R. 4840, The ``Tax 
Simplification For America's Job Creators Act Of 2004,'' Scheduled For 
Consideration By The House Of Representatives. July 21, 2004
    JCX-52-04--Present Law And Analysis Relating To Tax Benefits For 
Higher Education Scheduled for a Public Hearing Before the Senate 
Committee on Finance on July 22, 2004. July 21, 2004
    JCX-53-04--Comparison Of The Estimated Budget Effects Of H.R. 4520, 
The ``American Jobs Creation Act Of 2004,'' As Passed By The House Of 
Representatives, And H.R. 4520, The ``Jumpstart Our Business Strength 
(`JOBS') Act, As Amended By The Senate. July 23, 2004
    JCX-54-04--Explanation Of Proposed Protocol To The Income Tax 
Treaty Between The United States And The Netherlands Scheduled for a 
Hearing Before the Committee on Foreign Relations United States Senate 
on September 24, 2004. September 16, 2004
    JCX-55-04--Explanation Of Proposed Protocol To The Income Tax 
Treaty Between The United States And Barbados Scheduled for a Hearing 
Before the Committee on Foreign Relations United States Senate on 
September 24, 2004. September 16, 2004
    JCX-56-04--Present Law And Background Relating To Tax-Exempt 
Financing Of Indian Tribal Prisons Scheduled for a Public Hearing 
Before the Senate Committee on Finance on September 21, 2004. September 
20, 2004
    JCX-57-04--Comparison Of Provisions Contained In H.R. 1308, The 
``All-American Tax Relief Act Of 2003,'' As Passed By The House Of 
Representatives On June 12, 2003, And H.R. 1308, The ``Relief For 
Working Families Tax Act Of 2003,'' As Passed By The Senate On June 5, 
2003. September 21, 2004
    JCX-58-04--Testimony Of The Staff Of The Joint Committee On 
Taxation Before The Senate Committee On Foreign Relations Hearing On 
The Proposed Tax Protocols With Barbados And The Netherlands. September 
22, 2004
    JCX-59-04--Estimated Revenue Effects Of H.R. 1057, The ``Adoption 
Tax Relief Guarantee Act,'' Scheduled For Consideration By The House Of 
Representatives. September 22, 2004
    JCX-60-04--Estimated Revenue Effects Of The Conference Agreement 
For H.R. 1308, The ``Working Families Tax Relief Act Of 2004''. 
September 23, 2004
    JCX-61-04--Comparison Of Certain Provisions Of H.R. 4520 As Passed 
By The House Of Representatives And As Amended By The Senate: 
Provisions Relating To The Repeal Of The Exclusion For Extraterritorial 
Income, Domestic Production, And The Corporate Income Tax Rates 
Applicable To Small Corporations. September 29, 2004
    JCX-62-04--Comparison Of Certain Provisions Of H.R. 4520 As Passed 
By The House Of Representatives And As Amended By The Senate: Job 
Creation Tax Incentives For Manufacturing, Small Business, And Farming. 
September 29, 2004
    JCX-63-04--Comparison Of Certain Provisions Of H.R. 4520 As Passed 
By The House Of Representatives And As Amended By The Senate: 
Provisions Relating To International Tax Reform And Simplification For 
United States Businesses. September 29, 2004
    JCX-64-04--Comparison Of Certain Provisions Of H.R. 4520 As Passed 
By The House Of Representatives And As Amended By The Senate: Revenue 
Provisions. September 29, 2004
    JCX-65-04--Comparison Of Certain Provisions Of H.R. 4520 As Passed 
By The House Of Representatives And As Amended By The Senate: Alcohol 
Fuels And Fuel Fraud Provisions. September 29, 2004
    JCX-66-04--Comparison Of Certain Provisions Of H.R. 4520 As Passed 
By The House Of Representatives And As Amended By The Senate: Expiring 
Provisions. September 29, 2004
    JCX-67-04--Budget Impact Of The Proposed Protocols To The Income 
Tax Treaties Between The United States And The Netherlands And Between 
The United States And Barbados. September 30, 2004
    JCX-68-04R--Estimated Budget Effects Of The Chairman's Mark 
Relating To H.R. 4520, The ``American Jobs Creation Act Of 2004,'' 
Scheduled For Consideration By The House And Senate Conferees 
Continuing On October 5, 2004. October 5, 2004
    JCX-69-04--Estimated Budget Effects Of The Conference Agreement For 
H.R. 4520, The ``American Jobs Creation Act Of 2004''. October 7, 2004
    JCX-70-04--Description Of The Tax Technical Corrections Act Of 
2004. November 19, 2004
    JCX-71-04--List Of Expiring Federal Tax Provisions 2004-2014. 
December 23, 2004

  ATTACHMENT C.--JOINT COMMITTEE ON TAXATION REVENUE ESTIMATE REQUESTS
------------------------------------------------------------------------
                                                                 No. of
                        Calendar year                           requests
------------------------------------------------------------------------
1986.........................................................        474
1987.........................................................        420
1988.........................................................        900
1989.........................................................      1,290
1990.........................................................      1,286
1991.........................................................      1,461
1992.........................................................      2,350
1993.........................................................      2,380
1994.........................................................      1,259
1995.........................................................      2,278
1996.........................................................      1,792
1997.........................................................      2,079
1998.........................................................      2,729
1999.........................................................      4,150
2000.........................................................      2,807
2001.........................................................      4,491
2002.........................................................      3,583
2003.........................................................      4,839
2004.........................................................      3,580
------------------------------------------------------------------------


  ATTACHMENT D.--REQUEST DATA RELATING TO THE 2ND SESSION OF THE 108TH
                              CONGRESS \1\
                          [Calendar Year 2004]
------------------------------------------------------------------------
                               Requests   Requests   Requests   Percent
         Requestors            Received   Pending     Closed     Closed
------------------------------------------------------------------------
Ways and Means Committee:
    Republicans.............        842         66        776       92.2
    Democrats...............        188         19        169       89.9
Senate Finance Committee:
    Republicans.............        933         91        842       90.2
    Democrats...............      1,162         97      1,065       91.7
Non-Ways and Means
 Committee:
    Republicans.............         71          7         64       90.1
    Democrats/Independent...         78         10         68       87.2
Non-Senate Finance
 Committee:
    Republicans.............         81         10         71       87.7
    Democrats...............        131         10        121       92.4
Others......................         94          9         85       90.4
                             -------------------------------------------
      Total.................      3,580        319      3,261       91.1
------------------------------------------------------------------------
\1\ Totals include both revenue and non-revenue requests.

                       Attachment E.--Memorandum
                                                  December 8, 2004.
TO: Chief of Staff, Joint Committee on Taxation
FROM: Senior Refund Counsel
SUBJECT: Refund Section--Operations Report October 1, 2003 through 
September 30, 2004

    This is a report on the more significant developments in this 
Office during this period.
                                summary
    Volume--Refund Cases.--1,163 reports were received during this 
period. The total dollar amount of refunds was $22,977,809,443.

----------------------------------------------------------------------------------------------------------------
                          Reports Received                             2000     2001     2002     2003     2004
----------------------------------------------------------------------------------------------------------------
Examination Division...............................................      550      406      487      555    1,058
Appeals Division...................................................       99       76       95       82       92
Department of Justice..............................................       10       14        4        7        9
Chief Counsel......................................................        5        6        2        5        4
                                                                    --------------------------------------------
      Total........................................................      664      502      588      649    1,163
                                                                    ============================================
Concerns \1\.......................................................       49       51       41       39       56
----------------------------------------------------------------------------------------------------------------
\1\ Includes 0 post review deficiency cases for 2000, 4 for 2001, 0 for 2002, 1 for 2003 and 2 for 2004.

    Post Review.--The Service reports 64 large deficiency cases to us 
on an annual basis.
    Other Action.--We made recommendations that the Service publish 
guidance in certain areas we also made five legislative 
recommendations.
    Exhibits and Appendices provide detailed information on most of the 
foregoing.
    Errors identified by us in fiscal year 2004 and prior years, and 
settled in fiscal year 2004 produced a net reduction in refunds or an 
increase in deficiencies of $61 million. The average annual reduction 
for the last ten years is $38.8 million. Such corrections also reduced 
NOLs by $9.8 million; reduced credits by $133,000 reduced AMT NOLs by 
$103.2 million and decreased basis and amortization by $31 million.
    We hope that we are satisfactorily accomplishing our assigned 
portion of the Committee's mission and meeting your expectations. We 
look forward to a productive, challenging year.

  Appendix A.--Proposals for Statutory, Ruling, Manual and Regulatory 
                                Changes
    Raised the possibility of legislation to amend section 305(c) to 
reference section 1272(d). (NB)
    Suggested the IRS review procedures for reporting section 835(d) 
credits to Joint Committee in view of recent failure to timely report 
credit. (RG)
    Raised for future reference the issue of longer carryback periods 
from certain years, and the problem that arises when taxpayers file for 
a change in period to obtain more than one tax year ending in the 
relevant year. (NB)
    Raised the issue of the characterization issue of licenses in the 
section 367/351 contexts. (NB)
    Raised the fact that section 172(h) has never been amended to 
conform to the 5-year periods contained in 172(b)(1)(H). (RG)
    Amend section 1033 to clarify that merger termination fees do not 
qualify. (NB & RG)
    Suggested the IRS review two compensation rulings. (CS & NF)

                EXHIBIT I.--REPORTS TO JC AS REQUIRED BY IRS CODE SECTION 6405--FISCAL YEAR 2004
----------------------------------------------------------------------------------------------------------------
                                          No. of                  Cumulative
                Month                     Cases      Cumulative    Monthly     Dollar Receipts     Cumulative
                                         Received      Total       Average                       Dollar Receipts
----------------------------------------------------------------------------------------------------------------
October..............................           73           73           73    $2,004,276,357    $2,004,276,357
November.............................           43          116           58       488,511,179     2,492,787,536
December.............................           52          168           56     1,290,914,965     3,783,702,501
January..............................           65          233           58     1,010,727,485     4,794,429,986
February.............................          119          352           70     4,214,438,769     9,008,868,755
March................................          109          461           77     1,114,379,529    10,123,248,284
April................................          109          570           81     1,395,622,914    11,518,871,198
May..................................          168          738           92     5,487,895,592    17,006,766,790
June.................................          105          843           94     1,278,596,373    18,285,363,163
July.................................          109          952           95     2,007,877,685    20,293,240,848
August...............................          121        1,073           98     1,696,776,685    21,990,017,533
September............................           90        1,163           97       987,791,779    22,977,809,312
----------------------------------------------------------------------------------------------------------------


          EXHIBIT II.--JOINT COMMITTEE CASES RECEIVED BY TYPES OF TAXPAYER AND SOURCE--FISCAL YEAR 2004
----------------------------------------------------------------------------------------------------------------
                                            Amount    Percent                                  Amount    Percent
----------------------------------------------------------------------------------------------------------------
            TYPES OF TAXPAYERS                                        SOURCE OF REPORTS
Individuals..............................        40       3.4   Compliance..................     1,058      91.0
Estates..................................         5        .4   Appeals.....................        92       7.9
Trusts...................................         4        .3   Justice.....................         9        .8
Corporations.............................     1,114      95.9   Tax Court...................         4        .3
                                          ---------------------                              -------------------
      Total..............................     1,163     100.0         Total.................     1,163     100.0
----------------------------------------------------------------------------------------------------------------


  EXHIBIT III.--JOINT COMMITTEE MONTHLY RECEIPTS--REFUND REPORTS FROM COMPLIANCE AND APPEALS--FISCAL YEAR 2004
----------------------------------------------------------------------------------------------------------------
                      Month                         Compliance      Cumulative        Appeals       Cumulative
----------------------------------------------------------------------------------------------------------------
October.........................................              69              69               3               3
November........................................              39             108               4               7
December........................................              48             156               3              10
January.........................................              57             213               8              18
February........................................             105             318              11              29
March...........................................             102             420               5              34
April...........................................             105             525               4              38
May.............................................             153             678              13              51
June............................................              91             769              13              64
July............................................              98             867              10              74
August..........................................             109             976              10              84
September.......................................              82           1,058               8              92
----------------------------------------------------------------------------------------------------------------


  EXHIBIT IV.--JOINT COMMITTEE ON TAXATION CONCERNS ON REFUND REPORTS--
                            FISCAL YEAR 2004
------------------------------------------------------------------------
                                             Number of     Percentage of
                                             Concerns     Total Concerns
                                              Issued          Issued
------------------------------------------------------------------------
Compliance..............................              48              85
Appeals.................................               7              13
Tax Court...............................               1               2
                                         -------------------------------
      Total.............................              56             100
------------------------------------------------------------------------


                         TOTAL REPORTS RECEIVED
------------------------------------------------------------------------
                                                                No.
------------------------------------------------------------------------
CMP.....................................................           1,058
AP......................................................              92
TC......................................................               4
J.......................................................               9
                                                         ---------------
      Total.............................................           1,163
------------------------------------------------------------------------

                                 ______
                                 
                        JOINT ECONOMIC COMMITTEE

               Prepared Statement of Jim Saxton, Chairman

    Mr. Chairman and members of the Committee, it is a pleasure to 
express my strong support for the fiscal year 2006 budget request of 
the Joint Economic Committee (JEC).
    This budget request will support the JEC's focus on quality 
research and economic analysis needed by Congress and the public. The 
Committee's research and activities are substantive and credible, and 
have been cited in the Financial Times, Wall Street Journal, Forbes, 
Time, Washington Post, New York Times, Institutional Investor, and many 
other publications.
    As you know, the Committee's research covers a broad array of issue 
areas including both domestic and international economic policies. In 
addition, the Committee closely monitors and analyzes current economic, 
financial, and employment conditions. The Committee has several ongoing 
research programs including fiscal and monetary policy, tax policy, 
insurance reform, and reform of the International Monetary Fund (IMF) 
and the World Bank.
    One of our research programs, for example, focuses on recent 
Federal Reserve monetary policy. A series of JEC research papers and 
hearings continues to explore the specific features of the most 
successful monetary policy in U.S. history. Our research in this area 
indicates that the Federal Reserve has essentially been conducting 
informal inflation targeting for a number of years.
    Since this monetary policy has proved so effective and beneficial 
to the economy, it is important to provide Congress with an explanation 
of inflation targeting and how it works. Inflation targets are usually 
ranges setting permissible changes in some broad price index. For 
example, one might choose to set a formal inflation target of 1 to 3 
percent in such an index. Monetary policy is then geared to achieve 
this inflation target over a designated timeframe.
    A number of JEC research papers also have documented that many 
other nations have successfully implemented inflation targeting, with 
very positive effects. I continue to believe that it would be 
beneficial for the United States to set more formal inflation targets 
and to institutionalize this approach to monetary policy.
    In the area of taxation, a number of JEC studies have analyzed 
various tax provisions in light of their impact on capital formation. 
These studies examine how various features of the income tax can 
undermine incentives for saving and investment. Other JEC related 
research reviews U.S. tax policy and compares it to the tax policies of 
other nations. Another research project demonstrates the deficiencies 
in commonly used tax distribution tables.
    An additional research program involves reform of the International 
Monetary Fund (IMF) and the World Bank. Some of this JEC research has 
resulted in legislation changing IMF lending policies, producing 
taxpayer savings of many millions of dollars. More recent JEC research 
has exposed hundreds of millions in hidden taxpayer subsidies that 
could result from new IMF proposals currently under consideration.
    In recent weeks, the JEC has expanded its international research 
program to include a review of allegations concerning accounting 
irregularities at the World Bank. The Committee has verified that 
accounting errors of tens of millions of dollars did in fact occur and 
were not effectively addressed by World Bank management in a timely 
manner. While many of these accounting problems occurred several years 
ago, some of the problems are much more recent. We will continue to 
explore these World Bank accounting issues in coming months.
    Insurance reform is another ongoing research program of the 
Committee. A number of Committee studies examine policy issues related 
to terrorism insurance, medical liability reform, and tort reform.
    In closing, I would like to emphasize that the quality and 
productivity of Committee research products will continue in the 109th 
Congress as we execute an aggressive research agenda. I would also like 
to thank the Members of this Committee as well as other Members of 
Congress for their support of the work of the Joint Economic Committee.

                       NONDEPARTMENTAL WITNESSES

    [Clerk's note.--The subcommittee was unable to hold 
hearings on nondepartmental witnesses. The statements of those 
submitting written testimony are as follows:]

  Prepared Statement of the Association of Research Libraries and the 
              Council on Library and Information Resources

    This statement is submitted on behalf of the Association of 
Research Libraries (ARL) and the Council on Library and 
Information Resources (CLIR) in support of the fiscal year 2006 
budget request of $627,802,000 for the Library of Congress 
(LC).
    The funding request for fiscal year 2006 will allow the 
Library to fund ongoing operational activities while at the 
same time, support a number of key activities of interest to 
the library community and the Nation. Importantly, several of 
these initiatives focus on enhancing preservation of and access 
to the Library's collections. These projects include the 
National Audio-Visual Conservation Center (NAVCC), the National 
Digital Information Infrastructure and Preservation Program 
(NDIIPP), digitization and deacidification initiatives.
    The National Audio-Visual Conservation Center (NAVCC) in 
Culpeper, Virginia will serve as the central storage and 
conservation facility for the Library's audiovisual collections 
and will also be home to specialized preservation laboratories 
for audiovisual media. This project was put on a five-year plan 
three years ago and progress is moving according to schedule. 
The fiscal year 2006 funding request for this project is $16.17 
million. This facility will provide sufficient capacities and 
capabilities for the Library to store, preserve and provide 
access to its collections of moving images and recorded sound 
for well over the next 25 years. ARL and CLIR support the 
Library's fiscal year 2006 request of $16.17 million for 
collections relocation, digital preservation activities, and 
more relating to the NAVCC.
    To preserve our past, libraries have established 
collaborative programs to protect millions of books and other 
materials, much of which is becoming unreadable due to the 
acidic paper on which they are printed. This is a national 
crisis and our response must be sustained over many years. ARL 
and CLIR thank the Congress for your continuing support of the 
Library's deacidification and related preservation efforts. We 
support the request for $3.375 million to preserve an 
additional 4.5 million items.
    The library community supports many preservation 
initiatives. ARL recently released a paper, ``Recognizing 
Digitization as a Preservation Reformatting Method,'' (http://
www.arl.org/preserv/digit_final.html) that supports 
digitization as a viable preservation reformatting strategy. 
CLIR and the Coalition for Networked Information (CNI) endorsed 
this paper and approach. This paper is but a first step in 
building community support and facilitating the development of 
policies, standards, guidelines, and best practices. It is 
recognized that there are many methods available to preserve 
paper-based materials with digitization becoming more widely 
accepted by many communities.
    ARL and CLIR support the mission of the National Digital 
Information Infrastructure and Preservation Program (NDIIPP) to 
develop a national strategy to collect, archive, catalog, and 
preserve the rapidly increasing amount of digital content for 
current and future generations, especially materials that are 
created only in digital formats. Libraries throughout the 
United States are investing in comparable initiatives, thus 
cooperation among institutions will be fundamental to the 
success of these endeavors. ARL and CLIR support the request to 
extend by five years, the securing of commitments by other 
organizations and entities to partner in the NDIIPP. In 2004, 
the Library awarded more than $13.9 million to eight U.S. 
institutions to collect and preserve digital materials under 
the NDIIPP.
    The Library created the National Film Preservation 
Foundation (NFPF) in 1996 to preserve American films, such as 
documentaries, silent-era films, avant-garde works, ethnic 
films, newsreels, home movies and independent works. In 
addition to protecting films from disintegration, NFPF 
organizes, obtains funding, and manages collaborative projects 
that enable film archives to work together on national 
preservation initiatives. These are important activities and 
merit Congress' full support. Indeed, ARL supported legislation 
before Congress to reauthorize these important activities.
    Funding to assist the Library in its long-term preservation 
and access initiatives is critical to ensuring that the 
American public benefits from our Nation's cultural resources 
as well as from the Library's global resources. We look forward 
to working with members of the Subcommittee on Legislative 
Branch and very much appreciate the Subcommittee's continued 
support for the Library of Congress and its programs.
                                ------                                


  Prepared Statement of the Association of Research Libraries and the 
              Council on Library and Information Resources

    On behalf of the Association of Research Libraries (ARL) 
and the Council on Library and Information Resources (CLIR), we 
write in support of the fiscal year 2006 appropriations request 
for the U.S. Government Printing Office (GPO). We request your 
support for GPO's fiscal year 2006 budget request of 
$131,120,000 and in particular the request of $33,837,000 for 
the Salaries and Expenses (S&E) Appropriation of the 
Superintendent of Documents. This appropriation supports the 
Federal Depository Library Program (FDLP), the cataloging and 
indexing of government publications, the distribution of 
government publications to the International Exchange Program 
and more. We commend GPO for investing in technologies and 
systems to support enhanced access to electronic government 
information and in programs to ensure the authenticity and 
preservation of this information.
    The FDLP is a long-standing partnership between the Federal 
Government, the library community and the public. The FDLP 
provides the American public with access to a wide array of 
Federal information. GPO Access provides the public with access 
to information in an increasingly electronic environment. In 
addition to Congress, the White House, approximately 130 
Federal departments and agencies, and the courts rely on GPO's 
services to create and disseminate government information 
through the World Wide Web.
    The GPO and the participating Federal Depository Libraries 
(FDLs) are undergoing an exciting transformation. This 
transformation is a result of the new capabilities and 
opportunities that are possible with the adoption of digital 
technologies and the explosive growth of the Internet. 
Researchers, students and members of the public can engage in 
sophisticated searching and manipulation of information and 
data including ready access to data, image files and more. 
Increasingly, the data and information available is both 
current and historical as many libraries and others digitize 
special collections that are rich in the cultural and political 
history of our Nation.
    As noted by the Pew Internet and American Life Project, 
``the Internet has reached into, and in some cases, reshaped 
just about every realm of modern life.'' This shift to the 
adoption and use of electronic information resources reflects 
the interests and activities of the public. According to a 
recent Nielsen/NR survey (March 2005), there are 200,933,147 
Internet users in the United States or 67.8 percent of the 
population. This represents an increase in usage of the 
Internet of 104.9 percent between 2000-2005. These statistics 
demonstrate how the American public is now engaging in online 
activities--education, e-commerce, politics and a wide range of 
other activities. The findings of the Electronic Publishing 
Initiative (EPIC) at Columbia University are illustrative of 
this change. EPIC found that electronic resources have become 
the most used tool for information gathering by students. In 
particular, undergraduate students rely upon the World Wide Web 
and graduate students are more dependent upon library 
electronic services. The GPO Strategic Vision for the 21st 
Century clearly recognizes how the American public depends upon 
E-services and how they use information.
    Research libraries, indeed all libraries, are experiencing 
an explosive growth in the acquisition and use of electronic 
resources. As a result, there is a dramatic rise in digital 
services in libraries and in teaching, learning and research 
applications. The acceleration to electronic services is due in 
large part to the new opportunities to provide access to 
information more effectively. Data collected by ARL members 
over the past decade indicate that the portion of the library 
materials budget that is spent on electronic resources is 
growing rapidly. The percentage of the average library budget 
that is spent on electronic materials has increased more than 
eightfold, from an estimated 3.6 percent in 1992-93 to 25 
percent in 2002-03.
    Since the early 1990's, the library community has actively 
advocated for the inclusion of electronic government 
information in the FDLP. Congress, with guidance from this 
Committee, has supported this move to an increasingly 
electronic FDLP. This direction recognized the enhanced 
capabilities that electronic services provide to users of 
government information.
    Most recently, the move to electronic delivery of 
information in the FDLP has increased at a fast pace. By 
October-November 2004, 95 percent of the titles in the FDLP 
were available electronically (even if tangible forms were also 
available) and only 5 percent had no electronic counterpart.
    The shift to a predominantly electronic FDLP signals a 
change in nature of the Program. The FDLP is moving from a 
collection-based program to a service-based program and from 
print-based to electronic. The focus of the program is on 
expertise and access to the information resources, not on the 
physical collection. In addition, the future of the FDLP will 
be in building shared collections where resources are managed 
and interoperated. These may also include print collections 
that are digitized. It is expected that different models of 
shared repositories are likely to emerge and diversity is 
desirable and encouraged.
    Participating libraries make significant local 
contributions to ensure effective public access to government 
information. For example, as a participating regional federal 
depository library (since 1879), the University of Colorado-
Boulder Library spends approximately $675,000 for staff, 
material purchases, equipment and a variety of projects that 
enhance public access to government information. In addition, 
the Colorado State University selects approximately 60 percent 
of materials available via the FDLP and spends $200,000 on 
staff. The average yearly cost for 6 academic FDL's in Illinois 
is $348,107 and all select over 78 percent of the government 
information available via the program.
    One hundred and eight ARL members are federal depository 
libraries located in congressional districts throughout the 
United States. Of the 108 participating ARL libraries, 22 are 
regional depositories that collect and maintain all information 
available via the FDLP. As of the fall of 2003, the average 
annual investment in the program by ARL selective FDLs was 
$352,680 and was $386,251 for ARL regional FDLs. Moreover, a 
recent survey of ARL FDLs and non-ARL regional libraries 
reports a jump in the reliance upon no-fee government E-
resources as well as an increase in the licensing of commercial 
E-resources. Finally, 99 percent of ARL selective FDLs report 
links to electronic government information in their online 
catalogs and 100 percent of all regional FDLs link to 
government E-resources. Clearly, many participating FDLs have 
embraced the use of electronic products and services.
    The GPO fiscal year 2006 funding request, including that 
for Salaries and Expenses, includes key initiatives that focus 
on ensuring that GPO is well positioned to provide needed 
information services in the evolving networked environment. GPO 
is investing in new strategic initiatives that define its and 
the FDLP's future. For example, GPO is supporting the 
development of authentication services, preservation planning 
and implementation, improvements to GPO Access, web harvesting, 
and reallocation of resources to manage the electronic 
collection. The Salaries and Expenses request of $33,837,000 
supports several critically important programs such as the 
FDLP, the Cataloging and Indexing Program, and the 
International Exchange Program. This amount includes necessary 
increases to support the continued operation of the FDLP, and 
the increased demands upon GPO Access. In particular, we 
strongly support the request of $1 million in support of 
digitization of government information. We urge you to approve 
the full Salaries and Expenses appropriations request for 
fiscal year 2006.
    ARL recently released a paper, ``Recognizing Digitization 
as a Preservation Reformatting Method,'' (http://www.arl.org/
preserv/digit_final.html) that supports digitization as a 
viable preservation reformatting strategy. CLIR and the 
Coalition for Networked Information (CNI) endorsed this paper 
and approach. This paper is but a first step in building 
community support and facilitating the development of policies, 
standards, guidelines, and best practices. It is recognized 
that there are many methods available to preserve paper-based 
materials with digitization becoming more widely accepted by 
many communities.
    In closing Mr. Chairman, we very much appreciate your and 
the Subcommittee's support of GPO and the FDLP over the course 
of many years. The continuing investment in systems and 
services to provide the public with effective access to 
government information will ensure that valuable electronic 
government information will be available and preserved for 
future generations. We respectfully ask for your continued 
support by approving the Government Printing Office's fiscal 
year 2006 appropriations request in its entirety. We also ask 
that this statement be included as part of the hearing record.
    Thank you very much for your consideration of this request.
