[Congressional Record Volume 142, Number 40 (Thursday, March 21, 1996)]
[House]
[Pages H2640-H2652]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




             CONFERENCE REPORT ON S. 4, LINE ITEM VETO ACT

  Mr. CLINGER submitted the following conference report and statement 
on the Senate bill (S. 4) to grant the power to the President to reduce 
budget authority:

                  Conference Report (H. Rept. 104-491)

       The committee of conference on the disagreeing votes of the 
     two Houses on the amendments of the House to the bill (S. 4), 
     to grant the power to the President to reduce budget 
     authority, having met, after full and free conference, have 
     agreed to recommend and do recommend to their respective 
     Houses as follows:
       That the Senate recede from its disagreement to the 
     amendment of the House to the text of the bill and agree to 
     the same with an amendment as follows:
       In lieu of the matter proposed to be inserted by the House 
     amendment, insert the following:

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Line Item Veto Act''.

     SEC. 2. LINE ITEM VETO AUTHORITY.

       (a) In General.--Title X of the Congressional Budget and 
     Impoundment Control Act of 1974 (2 U.S.C. 681 et seq.) is 
     amended by adding at the end the following new part:

                        ``Part C--Line Item Veto


                       ``line item veto authority

       ``Sec. 1021. (a) In General.--Notwithstanding the 
     provisions of parts A and B, and subject to the provisions of 
     this part, the President may, with respect to any bill or 
     joint resolution that has been signed into law pursuant to 
     Article I, section 7, of the Constitution of the United 
     States, cancel in whole--
       ``(1) any dollar amount of discretionary budget authority;
       ``(2) any item of new direct spending; or
       ``(3) any limited tax benefit;
     if the President--
       ``(A) determines that such cancellation will--
       ``(i) reduce the Federal budget deficit;
       ``(ii) not impair any essential Government functions; and
       ``(iii) not harm the national interest; and
       ``(B) notifies the Congress of such cancellation by 
     transmitting a special message, in accordance with section 
     1022, within five calendar days (excluding Sundays) after the 
     enactment of the law providing the dollar amount of 
     discretionary budget authority, item of new direct spending, 
     or limited tax benefit that was canceled.
       ``(b) Identification of Cancellations.--In identifying 
     dollar amounts of discretionary budget authority, items of 
     new direct spending, and limited tax benefits for 
     cancellation, the President shall--
       ``(1) consider the legislative history, construction, and 
     purposes of the law which contains such dollar amounts, 
     items, or benefits;
       ``(2) consider any specific sources of information 
     referenced in such law or, in the absence of specific sources 
     of information, the best available information; and
       ``(3) use the definitions contained in section 1026 in 
     applying this part to the specific provisions of such law.
       ``(c) Exception for Disapproval Bills.--The authority 
     granted by subsection (a) shall not apply to any dollar 
     amount of discretionary budget authority, item of new direct 
     spending, or limited tax benefit contained in any law that is 
     a disapproval bill as defined in section 1026.


                           ``special messages

       ``Sec. 1022. (a) In General.--For each law from which a 
     cancellation has been made under this part, the President 
     shall transmit a single special message to the Congress.
       ``(b) Contents.--
       ``(1) The special message shall specify--
       ``(A) the dollar amount of discretionary budget authority, 
     item of new direct spending, or limited tax benefit which has 
     been canceled, and provide a corresponding reference number 
     for each cancellation;
       ``(B) the determinations required under section 1021(a), 
     together with any supporting material;
       ``(C) the reasons for the cancellation;
       ``(D) to the maximum extent practicable, the estimated 
     fiscal, economic, and budgetary effect of the cancellation;
       ``(E) all facts, circumstances and considerations relating 
     to or bearing upon the cancellation, and to the maximum 
     extent practicable, the estimated effect of the cancellation 
     upon the objects, purposes and programs for which the 
     canceled authority was provided; and
       ``(F) include the adjustments that will be made pursuant to 
     section 1024 to the discretionary spending limits under 
     section 601 and an evaluation of the effects of those 
     adjustments upon the sequestration procedures of section 251 
     of the Balanced Budget and Emergency Deficit Control Act of 
     1985.
       ``(2) In the case of a cancellation of any dollar amount of 
     discretionary budget authority or item of new direct 
     spending, the special message shall also include, if 
     applicable-
       ``(A) any account, department, or establishment of the 
     Government for which such budget authority was to have been 
     available for obligation and the specific project or 
     governmental functions involved;
       ``(B) the specific States and congressional districts, if 
     any, affected by the cancellation; and
       ``(C) the total number of cancellations imposed during the 
     current session of Congress on States and congressional 
     districts identified in subparagraph (B).
       ``(c) Transmission of Special Messages to House and 
     Senate.--
       ``(1) The President shall transmit to the Congress each 
     special message under this part within five calendar days 
     (excluding Sundays) after enactment of the law to which the 
     cancellation applies. Each special message shall be 
     transmitted to the House of Representatives and the Senate on 
     the same calendar day. Such special message shall be 
     delivered to the Clerk of the House of Representatives if the 
     House is not in session, and to the Secretary of the Senate 
     if the Senate is not in session.
       ``(2) Any special message transmitted under this part shall 
     be printed in the first issue of the Federal Register 
     published after such transmittal.


              ``cancellation effective unless disapproved

       ``Sec. 1023. (a) In General.--The cancellation of any 
     dollar amount of discretionary budget authority, item of new 
     direct spending, or limited tax benefit shall take effect 
     upon receipt in

[[Page H2641]]

     the House of Representatives and the Senate of the special 
     message notifying the Congress of the cancellation. If a 
     disapproval bill for such special message is enacted into 
     law, then all cancellations disapproved in that law shall be 
     null and void and any such dollar amount of discretionary 
     budget authority, item of new direct spending, or limited tax 
     benefit shall be effective as of the original date provided 
     in the law to which the cancellation applied.
       ``(b) Commensurate Reductions in Discretionary Budget 
     Authority.--Upon the cancellation of a dollar amount of 
     discretionary budget authority under subsection (a), the 
     total appropriation for each relevant account of which that 
     dollar amount is a part shall be simultaneously reduced by 
     the dollar amount of that cancellation.


                          ``deficit reduction

       ``Sec. 1024. (a) In General.--
       ``(1) Discretionary budget authority.--OMB shall, for each 
     dollar amount of discretionary budget authority and for each 
     item of new direct spending canceled from an appropriation 
     law under section 1021(a)--
       ``(A) reflect the reduction that results from such 
     cancellation in the estimates required by section 251(a)(7) 
     of the Balanced Budget and Emergency Deficit Control Act of 
     1985 in accordance with that Act, including an estimate of 
     the reduction of the budget authority and the reduction in 
     outlays flowing from such reduction of budget authority for 
     each outyear; and
       ``(B) include a reduction to the discretionary spending 
     limits for budget authority and outlays in accordance with 
     the Balanced Budget and Emergency Deficit Control Act of 1985 
     for each applicable fiscal year set forth in section 
     601(a)(2) by amounts equal to the amounts for each fiscal 
     year estimated pursuant to subparagraph (A).
       ``(2) Direct spending and limited tax benefits.--(A) OMB 
     shall, for each item of new direct spending or limited tax 
     benefit canceled from a law under section 1021(a), estimate 
     the deficit decrease caused by the cancellation of such item 
     or benefit in that law and include such estimate as a 
     separate entry in the report prepared pursuant to section 
     252(d) of the Balanced Budget and Emergency Deficit Control 
     Act of 1985.
       ``(B) OMB shall not include any change in the deficit 
     resulting from a cancellation of any item of new direct 
     spending or limited tax benefit, or the enactment of a 
     disapproval bill for any such cancellation, under this part 
     in the estimates and reports required by sections 252(b) and 
     254 of the Balanced Budget and Emergency Deficit Control Act 
     of 1985.
       ``(b) Adjustments to Spending Limits.--After ten calendar 
     days (excluding Sundays) after the expiration of the time 
     period in section 1025(b)(1) for expedited congressional 
     consideration of a disapproval bill for a special message 
     containing a cancellation of discretionary budget authority, 
     OMB shall make the reduction included in subsection (a)(1)(B) 
     as part of the next sequester report required by section 254 
     of the Balanced Budget and Emergency Deficit Control Act of 
     1985.
       ``(c) Exception.--Subsection (b) shall not apply to a 
     cancellation if a disapproval bill or other law that 
     disapproves that cancellation is enacted into law prior to 10 
     calendar days (excluding Sundays) after the expiration of the 
     time period set forth in section 1025(b)(1).
       ``(d) Congressional Budget Office Estimates.--As soon as 
     practicable after the President makes a cancellation from a 
     law under section 1021(a), the Director of the Congressional 
     Budget Office shall provide the Committees on the Budget of 
     the House of Representatives and the Senate with an estimate 
     of the reduction of the budget authority and the reduction in 
     outlays flowing from such reduction of budget authority for 
     each outyear.


      ``expedited congressional consideration of disapproval bills

       ``Sec. 1025. (a) Receipt and Referral of Special Message.--
     Each special message transmitted under this part shall be 
     referred to the Committee on the Budget and the appropriate 
     committee or committees of the Senate and the Committee on 
     the Budget and the appropriate committee or committees of the 
     House of Representatives. Each such message shall be printed 
     as a document of the House of Representatives.
       ``(b) Time Period for Expedited Procedures.--
       ``(1) There shall be a congressional review period of 30 
     calendar days of session, beginning on the first calendar day 
     of session after the date on which the special message is 
     received in the House of Representatives and the Senate, 
     during which the procedures contained in this section shall 
     apply to both Houses of Congress.
       ``(2) In the House of Representatives the procedures set 
     forth in this section shall not apply after the end of the 
     period described in paragraph (1).
       ``(3) If Congress adjourns at the end of a Congress prior 
     to the expiration of the period described in paragraph (1) 
     and a disapproval bill was then pending in either House of 
     Congress or a committee thereof (including a conference 
     committee of the two Houses of Congress), or was pending 
     before the President, a disapproval bill for the same special 
     message may be introduced within the first five calendar days 
     of session of the next Congress and shall be treated as a 
     disapproval bill under this part, and the time period 
     described in paragraph (1) shall commence on the day of 
     introduction of that disapproval bill.
       ``(c) Introduction of Disapproval Bills.--(1) In order for 
     a disapproval bill to be considered under the procedures set 
     forth in this section, the bill must meet the definition of a 
     disapproval bill and must be introduced no later than the 
     fifth calendar day of session following the beginning of the 
     period described in subsection (b)(1).
       ``(2) In the case of a disapproval bill introduced in the 
     House of Representatives, such bill shall include in the 
     first blank space referred to in section 1026(6)(C) a list of 
     the reference numbers for all cancellations made by the 
     President in the special message to which such disapproval 
     bill relates.
       ``(d) Consideration in the House of Representatives.--(1) 
     Any committee of the House of Representatives to which a 
     disapproval bill is referred shall report it without 
     amendment, and with or without recommendation, not later than 
     the seventh calendar day of session after the date of its 
     introduction. If any committee fails to report the bill 
     within that period, it is in order to move that the House 
     discharge the committee from further consideration of the 
     bill, except that such a motion may not be made after the 
     committee has reported a disapproval bill with respect to the 
     same special message. A motion to discharge may be made only 
     by a Member favoring the bill (but only at a time or place 
     designated by the Speaker in the legislative schedule of the 
     day after the calendar day on which the Member offering the 
     motion announces to the House his intention to do so and the 
     form of the motion). The motion is highly privileged. Debate 
     thereon shall be limited to not more than one hour, the time 
     to be divided in the House equally between a proponent and an 
     opponent. The previous question shall be considered as 
     ordered on the motion to its adoption without intervening 
     motion. A motion to reconsider the vote by which the motion 
     is agreed to or disagreed to shall not be in order.
       ``(2) After a disapproval bill is reported or a committee 
     has been discharged from further consideration, it is in 
     order to move that the House resolve into the Committee of 
     the Whole House on the State of the Union for consideration 
     of the bill. If reported and the report has been available 
     for at least one calendar day, all points of order against 
     the bill and against consideration of the bill are waived. If 
     discharged, all points of order against the bill and against 
     consideration of the bill are waived. The motion is highly 
     privileged. A motion to reconsider the vote by which the 
     motion is agreed to or disagreed to shall not be in order. 
     During consideration of the bill in the Committee of the 
     Whole, the first reading of the bill shall be dispensed with. 
     General debate shall proceed, shall be confined to the bill, 
     and shall not exceed one hour equally divided and controlled 
     by a proponent and an opponent of the bill. The bill shall be 
     considered as read for amendment under the five-minute rule. 
     Only one motion to rise shall be in order, except if offered 
     by the manager. No amendment to the bill is in order, except 
     any Member if supported by 49 other Members (a quorum being 
     present) may offer an amendment striking the reference number 
     or numbers of a cancellation or cancellations from the bill. 
     Consideration of the bill for amendment shall not exceed one 
     hour excluding time for recorded votes and quorum calls. No 
     amendment shall be subject to further amendment, except pro 
     forma amendments for the purposes of debate only. At the 
     conclusion of the consideration of the bill for amendment, 
     the Committee shall rise and report the bill to the House 
     with such amendments as may have been adopted. The previous 
     question shall be considered as ordered on the bill and 
     amendments thereto to final passage without intervening 
     motion. A motion to reconsider the vote on passage of the 
     bill shall not be in order.
       ``(3) Appeals from decisions of the Chair regarding 
     application of the rules of the House of Representatives to 
     the procedure relating to a disapproval bill shall be decided 
     without debate.
       ``(4) It shall not be in order to consider under this 
     subsection more than one disapproval bill for the same 
     special message except for consideration of a similar Senate 
     bill (unless the House has already rejected a disapproval 
     bill for the same special message) or more than one motion to 
     discharge described in paragraph (1) with respect to a 
     disapproval bill for that special message.
       ``(e) Consideration in the Senate.--
       ``(1) Referral and reporting.--Any disapproval bill 
     introduced in the Senate shall be referred to the appropriate 
     committee or committees. A committee to which a disapproval 
     bill has been referred shall report the bill not later than 
     the seventh day of session following the date of introduction 
     of that bill. If any committee fails to report the bill 
     within that period, that committee shall be automatically 
     discharged from further consideration of the bill and the 
     bill shall be placed on the Calendar.
       ``(2) Disapproval bill from house.--When the Senate 
     receives from the House of Representatives a disapproval 
     bill, such bill shall not be referred to committee and shall 
     be placed on the Calendar.
       ``(3) Consideration of single disapproval bill.--After the 
     Senate has proceeded to the consideration of a disapproval 
     bill for a special message, then no other disapproval bill 
     originating in that same House relating to that same message 
     shall be subject to the procedures set forth in this 
     subsection.
       ``(4) Amendments.--
       ``(A) Amendments in order.--The only amendments in order to 
     a disapproval bill are--
       ``(i) an amendment that strikes the reference number of a 
     cancellation from the disapproval bill; and
       ``(ii) an amendment that only inserts the reference number 
     of a cancellation included in the special message to which 
     the disapproval bill relates that is not already contained in 
     such bill.
       ``(B) Waiver or appeal.--An affirmative vote of three-
     fifths of the Senators, duly chosen and sworn, shall be 
     required in the Senate--
       ``(i) to waive or suspend this paragraph; or
       ``(ii) to sustain an appeal of the ruling of the Chair on a 
     point of order raised under this paragraph.

[[Page H2642]]

       ``(5) Motion nondebatable.--A motion to proceed to 
     consideration of a disapproval bill under this subsection 
     shall not be debatable. It shall not be in order to move to 
     reconsider the vote by which the motion to proceed was 
     adopted or rejected, although subsequent motions to proceed 
     may be made under this paragraph.
       ``(6) Limit on consideration.-- (A) After no more than 10 
     hours of consideration of a disapproval bill, the Senate 
     shall proceed, without intervening action or debate (except 
     as permitted under paragraph (9)), to vote on the final 
     disposition thereof to the exclusion of all amendments not 
     then pending and to the exclusion of all motions, except a 
     motion to reconsider or to table.
       ``(B) A single motion to extend the time for consideration 
     under subparagraph (A) for no more than an additional five 
     hours is in order prior to the expiration of such time and 
     shall be decided without debate.
       ``(C) The time for debate on the disapproval bill shall be 
     equally divided between the Majority Leader and the Minority 
     Leader or their designees.
       ``(7) Debate on amendments.--Debate on any amendment to a 
     disapproval bill shall be limited to one hour, equally 
     divided and controlled by the Senator proposing the amendment 
     and the majority manager, unless the majority manager is in 
     favor of the amendment, in which case the minority manager 
     shall be in control of the time in opposition.
       ``(8) No motion to recommit.--A motion to recommit a 
     disapproval bill shall not be in order.
       ``(9) Disposition of senate disapproval bill.--If the 
     Senate has read for the third time a disapproval bill that 
     originated in the Senate, then it shall be in order at any 
     time thereafter to move to proceed to the consideration of a 
     disapproval bill for the same special message received from 
     the House of Representatives and placed on the Calendar 
     pursuant to paragraph (2), strike all after the enacting 
     clause, substitute the text of the Senate disapproval bill, 
     agree to the Senate amendment, and vote on final disposition 
     of the House disapproval bill, all without any intervening 
     action or debate.
       ``(10) Consideration of house message.--Consideration in 
     the Senate of all motions, amendments, or appeals necessary 
     to dispose of a message from the House of Representatives on 
     a disapproval bill shall be limited to not more than four 
     hours. Debate on each motion or amendment shall be limited to 
     30 minutes. Debate on any appeal or point of order that is 
     submitted in connection with the disposition of the House 
     message shall be limited to 20 minutes. Any time for debate 
     shall be equally divided and controlled by the proponent and 
     the majority manager, unless the majority manager is a 
     proponent of the motion, amendment, appeal, or point of 
     order, in which case the minority manager shall be in control 
     of the time in opposition.
       ``(f) Consideration in Conference--
       ``(1) Convening of conference.--In the case of disagreement 
     between the two Houses of Congress with respect to a 
     disapproval bill passed by both Houses, conferees should be 
     promptly appointed and a conference promptly convened, if 
     necessary.
       ``(2) House consideration.--(A) Notwithstanding any other 
     rule of the House of Representatives, it shall be in order to 
     consider the report of a committee of conference relating to 
     a disapproval bill provided such report has been available 
     for one calendar day (excluding Saturdays, Sundays, or legal 
     holidays, unless the House is in session on such a day) and 
     the accompanying statement shall have been filed in the 
     House.
       ``(B) Debate in the House of Representatives on the 
     conference report and any amendments in disagreement on any 
     disapproval bill shall each be limited to not more than one 
     hour equally divided and controlled by a proponent and an 
     opponent. A motion to further limit debate 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.
       ``(3) Senate consideration.--Consideration in the Senate of 
     the conference report and any amendments in disagreement on a 
     disapproval bill shall be limited to not more than four hours 
     equally divided and controlled by the Majority Leader and the 
     Minority Leader or their designees. A motion to recommit the 
     conference report is not in order.
       ``(4) Limits on scope.--(A) When a disagreement to an 
     amendment in the nature of a substitute has been referred to 
     a conference, the conferees shall report those cancellations 
     that were included in both the bill and the amendment, and 
     may report a cancellation included in either the bill or the 
     amendment, but shall not include any other matter.
       ``(B) When a disagreement on an amendment or amendments of 
     one House to the disapproval bill of the other House has been 
     referred to a committee of conference, the conferees shall 
     report those cancellations upon which both Houses agree and 
     may report any or all of those cancellations upon which there 
     is disagreement, but shall not include any other matter.


                             ``definitions

       ``Sec. 1026. As used in this part:
       ``(1) Appropriation law.--The term `appropriation law' 
     means an Act referred to in section 105 of title 1, United 
     States Code, including any general or special appropriation 
     Act, or any Act making supplemental, deficiency, or 
     continuing appropriations, that has been signed into law 
     pursuant to Article I, section 7, of the Constitution of the 
     United States.
       ``(2) Calendar day.--The term `calendar day' means a 
     standard 24-hour period beginning at midnight.
       ``(3) Calendar days of session.--The term `calendar days of 
     session' shall mean only those days on which both Houses of 
     Congress are in session.
       ``(4) Cancel.--The term `cancel' or `cancellation' means--
       ``(A) with respect to any dollar amount of discretionary 
     budget authority, to rescind;
       ``(B) with respect to any item of new direct spending--
       ``(i) that is budget authority provided by law (other than 
     an appropriation law), to prevent such budget authority from 
     having legal force or effect;
       ``(ii) that is entitlement authority, to prevent the 
     specific legal obligation of the United States from having 
     legal force or effect; or
       ``(iii) through the food stamp program, to prevent the 
     specific provision of law that results in an increase in 
     budget authority or outlays for that program from having 
     legal force or effect; and
       ``(C) with respect to a limited tax benefit, to prevent the 
     specific provision of law that provides such benefit from 
     having legal force or effect.
       ``(5) Direct spending.--The term `direct spending' means--
       ``(A) budget authority provided by law (other than an 
     appropriation law);
       ``(B) entitlement authority; and
       ``(C) the food stamp program.
       ``(6) Disapproval bill.--The term `disapproval bill' means 
     a bill or joint resolution which only disapproves one or more 
     cancellations of dollar amounts of discretionary budget 
     authority, items of new direct spending, or limited tax 
     benefits in a special message transmitted by the President 
     under this part and--
       ``(A) the title of which is as follows: `A bill 
     disapproving the cancellations transmitted by the President 
     on ________', the blank space being filled in with the date 
     of transmission of the relevant special message and the 
     public law number to which the message relates;
       ``(B) which does not have a preamble; and
       ``(C) which provides only the following after the enacting 
     clause: `That Congress disapproves of cancellations 
     ________', the blank space being filled in with a list by 
     reference number of one or more cancellations contained in 
     the President's special message, `as transmitted by the 
     President in a special message on ________', the blank space 
     being filled in with the appropriate date, `regarding 
     ________.', the blank space being filled in with the public 
     law number to which the special message relates.
       ``(7) Dollar amount of discretionary budget authority.--(A) 
     Except as provided in subparagraph (B), the term `dollar 
     amount of discretionary budget authority' means the entire 
     dollar amount of budget authority--
       ``(i) specified in an appropriation law, or the entire 
     dollar amount of budget authority required to be allocated by 
     a specific proviso in an appropriation law for which a 
     specific dollar figure was not included;
       ``(ii) represented separately in any table, chart, or 
     explanatory text included in the statement of managers or the 
     governing committee report accompanying such law;
       ``(iii) required to be allocated for a specific program, 
     project, or activity in a law (other than an appropriation 
     law) that mandates the expenditure of budget authority from 
     accounts, programs, projects, or activities for which budget 
     authority is provided in an appropriation law;
       ``(iv) represented by the product of the estimated 
     procurement cost and the total quantity of items specified in 
     an appropriation law or included in the statement of managers 
     or the governing committee report accompanying such law; and
       ``(v) represented by the product of the estimated 
     procurement cost and the total quantity of items required to 
     be provided in a law (other than an appropriation law) that 
     mandates the expenditure of budget authority from accounts, 
     programs, projects, or activities for which budget authority 
     is provided in an appropriation law.
       ``(B) The term `dollar amount of discretionary budget 
     authority' does not include--
       ``(i) direct spending;
       ``(ii) budget authority in an appropriation law which funds 
     direct spending provided for in other law;
       ``(iii) any existing budget authority rescinded or canceled 
     in an appropriation law; or
       ``(iv) any restriction, condition, or limitation in an 
     appropriation law or the accompanying statement of managers 
     or committee reports on the expenditure of budget authority 
     for an account, program, project, or activity, or on 
     activities involving such expenditure.
       ``(8) Item of new direct spending.--The term `item of new 
     direct spending' means any specific provision of law that is 
     estimated to result in an increase in budget authority or 
     outlays for direct spending relative to the most recent 
     levels calculated pursuant to section 257 of the Balanced 
     Budget and Emergency Deficit Control Act of 1985.
       ``(9) Limited tax benefit.--(A) The term `limited tax 
     benefit' means--
       ``(i) any revenue-losing provision which provides a Federal 
     tax deduction, credit, exclusion, or preference to 100 or 
     fewer beneficiaries under the Internal Revenue Code of 1986 
     in any fiscal year for which the provision is in effect; and
       ``(ii) any Federal tax provision which provides temporary 
     or permanent transitional relief for 10 or fewer 
     beneficiaries in any fiscal year from a change to the 
     Internal Revenue Code of 1986.
       ``(B) A provision shall not be treated as described in 
     subparagraph (A)(i) if the effect of that provision is that--
       ``(i) all persons in the same industry or engaged in the 
     same type of activity receive the same treatment;
       ``(ii) all persons owning the same type of property, or 
     issuing the same type of investment, receive the same 
     treatment; or

[[Page H2643]]

       ``(iii) any difference in the treatment of persons is based 
     solely on--
       ``(I) in the case of businesses and associations, the size 
     or form of the business or association involved;
       ``(II) in the case of individuals, general demographic 
     conditions, such as income, marital status, number of 
     dependents, or tax return filing status;
       ``(III) the amount involved; or
       ``(IV) a generally-available election under the Internal 
     Revenue Code of 1986.
       ``(C) A provision shall not be treated as described in 
     subparagraph (A)(ii) if--
       ``(i) it provides for the retention of prior law with 
     respect to all binding contracts or other legally enforceable 
     obligations in existence on a date contemporaneous with 
     congressional action specifying such date; or
       ``(ii) it is a technical correction to previously enacted 
     legislation that is estimated to have no revenue effect.
       ``(D) For purposes of subparagraph (A)--
       ``(i) all businesses and associations which are related 
     within the meaning of sections 707(b) and 1563(a) of the 
     Internal Revenue Code of 1986 shall be treated as a single 
     beneficiary;
       ``(ii) all qualified plans of an employer shall be treated 
     as a single beneficiary;
       ``(iii) all holders of the same bond issue shall be treated 
     as a single beneficiary; and
       ``(iv) if a corporation, partnership, association, trust or 
     estate is the beneficiary of a provision, the shareholders of 
     the corporation, the partners of the partnership, the members 
     of the association, or the beneficiaries of the trust or 
     estate shall not also be treated as beneficiaries of such 
     provision.
       ``(E) For purposes of this paragraph, the term `revenue-
     losing provision' means any provision which results in a 
     reduction in Federal tax revenues for any one of the two 
     following periods--
       ``(i) the first fiscal year for which the provision is 
     effective; or
       ``(ii) the period of the 5 fiscal years beginning with the 
     first fiscal year for which the provision is effective.
       ``(F) The terms used in this paragraph shall have the same 
     meaning as those terms have generally in the Internal Revenue 
     Code of 1986, unless otherwise expressly provided.
       ``(10) OMB.--The term `OMB' means the Director of the 
     Office of Management and Budget.


                ``identification of limited tax benefits

       ``Sec. 1027. (a) Statement by Joint Tax Committee.--The 
     Joint Committee on Taxation shall review any revenue or 
     reconciliation bill or joint resolution which includes any 
     amendment to the Internal Revenue Code of 1986 that is being 
     prepared for filing by a committee of conference of the two 
     Houses, and shall identify whether such bill or joint 
     resolution contains any limited tax benefits. The Joint 
     Committee on Taxation shall provide to the committee of 
     conference a statement identifying any such limited tax 
     benefits or declaring that the bill or joint resolution does 
     not contain any limited tax benefits. Any such statement 
     shall be made available to any Member of Congress by the 
     Joint Committee on Taxation immediately upon request.
       ``(b) Statement Included in Legislation.--(1) 
     Notwithstanding any other rule of the House of 
     Representatives or any rule or precedent of the Senate, any 
     revenue or reconciliation bill or joint resolution which 
     includes any amendment to the Internal Revenue Code of 1986 
     reported by a committee of conference of the two Houses may 
     include, as a separate section of such bill or joint 
     resolution, the information contained in the statement of the 
     Joint Committee on Taxation, but only in the manner set forth 
     in paragraph (2).
       ``(2) The separate section permitted under paragraph (1) 
     shall read as follows: `Section 1021(a)(3) of the 
     Congressional Budget and Impoundment Control Act of 1974 
     shall ________ apply to ____________.', with the blank spaces 
     being filled in with--
       ``(A) in any case in which the Joint Committee on Taxation 
     identifies limited tax benefits in the statement required 
     under subsection (a), the word `only' in the first blank 
     space and a list of all of the specific provisions of the 
     bill or joint resolution identified by the Joint Committee on 
     Taxation in such statement in the second blank space; or
       ``(B) in any case in which the Joint Committee on Taxation 
     declares that there are no limited tax benefits in the 
     statement required under subsection (a), the word `not' in 
     the first blank space and the phrase `any provision of this 
     Act' in the second blank space.
       ``(c) President's Authority.--If any revenue or 
     reconciliation bill or joint resolution is signed into law 
     pursuant to Article I, section 7, of the Constitution of the 
     United States--
       ``(1) with a separate section described in subsection 
     (b)(2), then the President may use the authority granted in 
     section 1021(a)(3) only to cancel any limited tax benefit in 
     that law, if any, identified in such separate section; or
       ``(2) without a separate section described in subsection 
     (b)(2), then the President may use the authority granted in 
     section 1021(a)(3) to cancel any limited tax benefit in that 
     law that meets the definition in section 1026.
       ``(d) Congressional Identifications of Limited Tax 
     Benefits.--There shall be no judicial review of the 
     congressional identification under subsections (a) and (b) of 
     a limited tax benefit in a conference report.''.

     SEC. 3. JUDICIAL REVIEW.

       (a) Expedited Review.--
       (1) Any Member of Congress or any individual adversely 
     affected by part C of title X of the Congressional Budget and 
     Impoundment Control Act of 1974 may bring an action, in the 
     United States District Court for the District of Columbia, 
     for declaratory judgment and injunctive relief on the ground 
     that any provision of this part violates the Constitution.
       (2) A copy of any complaint in an action brought under 
     paragraph (1) shall be promptly delivered to the Secretary of 
     the Senate and the Clerk of the House of Representatives, and 
     each House of Congress shall have the right to intervene in 
     such action.
       (3) Nothing in this section or in any other law shall 
     infringe upon the right of the House of Representatives to 
     intervene in an action brought under paragraph (1) without 
     the necessity of adopting a resolution to authorize such 
     intervention.
       (b) Appeal to Supreme Court.--Notwithstanding any other 
     provision of law, any order of the United States District 
     Court for the District of Columbia which is issued pursuant 
     to an action brought under paragraph (1) of subsection (a) 
     shall be reviewable by appeal directly to the Supreme Court 
     of the United States. Any such appeal shall be taken by a 
     notice of appeal filed within 10 calendar days after such 
     order is entered; and the jurisdictional statement shall be 
     filed within 30 calendar days after such order is entered. No 
     stay of an order issued pursuant to an action brought under 
     paragraph (1) of subsection (a) shall be issued by a single 
     Justice of the Supreme Court.
       (c) Expedited Consideration.--It shall be the duty of the 
     District Court for the District of Columbia and the Supreme 
     Court of the United States to advance on the docket and to 
     expedite to the greatest possible extent the disposition of 
     any matter brought under subsection (a).

     SEC. 4. CONFORMING AMENDMENTS.

       (a) Short Titles.--Section 1(a) of the Congressional Budget 
     and Impoundment Control Act of 1974 is amended by--
       (1) striking ``and'' before ``title X'' and inserting a 
     period;
       (2) inserting ``Parts A and B of'' before ``title X''; and
       (3) inserting at the end the following new sentence: ``Part 
     C of title X may be cited as the `Line Item Veto Act of 
     1996'.''.
       (b) Table of Contents.--The table of contents set forth in 
     section 1(b) of the Congressional Budget and Impoundment 
     Control Act of 1974 is amended by adding at the end the 
     following:

                        ``Part C--Line Item Veto

``Sec. 1021. Line item veto authority.
``Sec. 1022. Special messages.
``Sec. 1023. Cancellation effective unless disapproved.
``Sec. 1024. Deficit reduction.
``Sec. 1025. Expedited congressional consideration of disapproval 
              bills.
``Sec. 1026. Definitions.
``Sec. 1027. Identification of limited tax benefits.''.

       (c) Exercise of Rulemaking Powers.--Section 904(a) of the 
     Congressional Budget Act of 1974 is amended by striking ``and 
     1017'' and inserting ``, 1017, 1025, and 1027''.

     SEC. 5. EFFECTIVE DATES.

       This Act and the amendments made by it shall take effect 
     and apply to measures enacted on the earlier of--
       (1) the day after the enactment into law, pursuant to 
     Article I, section 7, of the Constitution of the United 
     States, of an Act entitled ``An Act to provide for a seven-
     year plan for deficit reduction and achieve a balanced 
     Federal budget.''; or
       (2) January 1, 1997;

     and shall have no force or effect on or after January 1, 
     2005.
       And the House agree to the same.
       That the Senate recede from its disagreement to the 
     amendment of the House to the title of the bill and agree to 
     the same with an amendment as follows:
       In lieu of the matter proposed to be inserted by the House 
     amendment to the title of the bill, insert the following: 
     ``An Act to give the President line item veto authority with 
     respect to appropriations, new direct spending, and limited 
     tax benefits.''.
       And the House agree to the same.

     Bill Clinger,
     Gerald Solomon,
     Jim Bunning,
     Porter Goss,
     Peter Blute,
                                Managers on the Part of the House.

     Ted Stevens,
     Bill Roth,
     Fred Thompson,
     Thad Cochran,
     John McCain,
     Pete V. Domenici,
     Chuck Grassley,
     Don Nickles,
     Phil Gramm,
     Dan Coats,
     Jim Exon,
                               Managers on the Part of the Senate.

       JOINT EXPLANATORY STATEMENT OF THE COMMITTEE OF CONFERENCE

       The managers on the part of the House and the Senate at the 
     conference on the disagreeing votes of the two Houses on the 
     amendments of the House to the bill (S. 4) to grant the power 
     to the President to reduce budget authority, submit the 
     following joint statement to the House and Senate in 
     explanation of the effect of the action agreed upon by the 
     managers and recommended in the accompanying conference 
     report:
       The House amendment to the text of the bill struck all of 
     the Senate bill after the enacting clause and inserted a 
     substitute text.
       The Senate recedes from its disagreement to the amendment 
     of the House with an amendment that is a substitute for the 
     Senate bill and the House amendment. The differences between 
     the Senate bill, the House amendment, and the substitute 
     agreed to in

[[Page H2644]]

     conference are noted below, except for clerical corrections, 
     conforming changes made necessary by agreements reached by 
     the conferees, and minor drafting and clerical changes.


                background and need for the legislation

       The American people consistently cite run-away federal 
     spending and a rising national debt as among the top issues 
     of national concern. Over the past fifteen years alone, the 
     national debt of the United States has quintupled. From 1789 
     through 1981, our total national debt amounted to $1 
     trillion. Yet today, just fifteen years later, that debt 
     exceeds $5 trillion, and without significant reforms an 
     additional $1 trillion will be added over the next four 
     years. This astonishing growth in federal debt has fueled 
     public support for measures to ensure greater fiscal 
     accountability in Washington. This legislation, along with 
     other measures to balance the federal budget considered in 
     the 104th Congress, moves to meet that demand by enhancing 
     the President's ability to eliminate wasteful federal 
     spending and to cancel special tax breaks.
       No one would contend that a line item veto on its own will 
     be enough to restrain spending and bring the federal budget 
     into balance. However, a January 1992 GAO report indicates 
     that this type of fiscal discipline could have a significant 
     impact upon federal spending, concluding that if Presidents 
     had applied this authority to all matters objected to in 
     Statements of Administration Policy on spending bills in the 
     fiscal years 1984 through 1989, spending could have been 
     reduced by a six-year total of about $70 billion.
       The conference report on S.4, the Line Item Veto Act, 
     delegates limited authority to the President to cancel new 
     spending and limited tax benefits. This authority is in 
     addition to the President's existing authority under the 
     Impoundment Control Act of 1974 (title X of the Congressional 
     Budget Act). The Impoundment Control Act permits the 
     President to submit proposed rescissions of discretionary 
     budget authority to Congress, but prohibits those rescissions 
     from taking effect without congressional approval. In 
     addition to applying solely to appropriation laws, the 
     statutory provisions of the Impoundment Control Act have 
     proven too restrictive. While Congress has initiated and 
     passed rescissions on its own, Congress has agreed to only 
     $23.7 billion of $74 billion in rescissions proposed by 
     Presidents (both Democrat and Republican) since enactment of 
     title X in 1974.


                                purpose

       The purpose of the conference report is to promote savings 
     by placing the onus on Congress to overturn the President's 
     cancellations of spending and limited tax benefits. In 
     addition, recognizing that discretionary spending represents 
     only about one-third of the entire federal budget, the 
     conference report expands the President's current rescission 
     authority to include both new direct spending and limited tax 
     benefits.
       Under the conference report, the President may cancel any 
     dollar amount of discretionary budget authority in an 
     appropriation law or its accompanying reports, or may cancel 
     any item of new direct spending or limited tax benefit from 
     an authorization or revenue act. After notifying Congress of 
     his cancellations in a special message, the Congress is given 
     a specified period for expedited review of the President's 
     proposal.
       If Congress fails to enact disapproving legislation within 
     the period for expedited consideration, the savings are set 
     aside for deficit reduction through a lockbox mechanism.


                       summary of the senate bill

       The Senate bill was introduced by Senator Dole on 
     Wednesday, January 4, 1995. On March 20, 1995, the Senate 
     began consideration. During consideration in the Senate, 
     Senator Dole (for himself, and Senators McCain, Coats and 
     Domenici) offered an amendment in the form of a substitute.
       The Senate bill gives the President line item veto 
     authority by dis-aggregating certain types of bills under a 
     procedure known as ``separate enrollment.'' Separate 
     enrollment requires that the enrolling clerks of the House 
     and Senate separately enroll each item of spending in an 
     appropriation bill and each item of new direct spending or 
     any targeted tax benefit contained in an authorizing bill. 
     Each of these individual bills is presented to the President. 
     The President may exercise his Article I power to veto any 
     one, or all, of the individual bills. The Congress may 
     exercise its Constitutional prerogative to override the 
     President's veto(es).
       According to the Senate bill, the House and Senate 
     Appropriations Committees report appropriation measures 
     following current procedure except that any appropriation 
     bill reported by the Committee must contain the same level of 
     detail as is provided in the Committee report that 
     accompanies the bill. This requirement ensures that 
     appropriation bills do not contain large dollar lump sums 
     with the details directing how the money should be expended 
     noted only in the committee report.
       An authorization bill that contains an item of new direct 
     spending or a targeted tax benefit that is brought to the 
     floor must contain such provision in a separate section and 
     must identify the item of new direct spending or the targeted 
     tax benefit in the report that accompanies the bill.
       Any appropriation or authorization bill that fails to 
     comply with the above requirements is subject to a point of 
     order that may only be waived by a three-fifths vote of the 
     House or Senate.
       Upon passage of an appropriation or authorization bill, the 
     enrolling clerk of the originating House is required to 
     enroll each item contained in the legislation separately. 
     After all the items are enrolled as separate bills, both the 
     House and Senate vote on all the bills en bloc prior to their 
     submittal to the President.
       The provisions of the bill become effective on the date of 
     enactment and sunset in five years.
       As defined in the bill, an item in an appropriation bill 
     is:
       (1) any numbered section;
       (2) any unnumbered paragraph; or
       (3) any allocation or suballocation contained in a numbered 
     section or an unnumbered paragraph made to conform to the 
     level of detail in the accompanying report.
       The following items are not required to be separately 
     enrolled:
       (1) provisions that do not appropriate funds;
       (2) provisions that do not direct the expenditures of funds 
     for a specific project; and
       (3) provisions that create an express or implied obligation 
     to expend funds and
       (a) rescind budget authority;
       (b) limit, condition or otherwise restrict the expenditure 
     of budget authority; or
       (c) place a condition on the expenditure of budget 
     authority by explicitly prohibiting the use of the funds.
       By not separately enrolling the items just noted, language 
     that places restrictions or conditions on the expenditure of 
     funds, also known as fencing language, may not be separately 
     vetoed apart from some dollar amount.
       An item in an authorization bill is (1) any numbered 
     section, or (2) any unnumbered paragraph that provides new 
     direct spending or a new targeted tax benefit.
       A targeted tax benefit is any provision that (1) the Joint 
     Committee on Taxation estimates would lose revenue in the 
     first fiscal year and over the five fiscal years covered by 
     the budget resolution, and (2) provides more favorable 
     treatment to a taxpayer or a targeted group of taxpayers when 
     compared to a similarly situation taxpayer or group of 
     taxpayers.
       The Senate bill contains a ``lockbox'' provision, a 
     prohibition on emergency spending bills containing non-
     emergency spending items, and a sunset of all tax provisions 
     at least every 10 years.
       Finally, the Senate bill contains provisions allowing a 
     Member of Congress to challenge the constitutionality of the 
     bill under expedited procedures and a severability clause 
     stating that if any one provision of the Act is found to be 
     unconstitutional, the remainder of the Act will be held 
     harmless.


                     summary of the house amendment

       The House amendment is based on the ``enhanced rescission'' 
     format. It authorizes the President to rescind all or part of 
     any discretionary budget authority or veto any targeted tax 
     benefit if the President determines that such rescission; (1) 
     will help reduce the federal budget deficit; (2) will not 
     impair any essential government functions; and (3) will not 
     harm the national interest.
       The amendment requires the President to notify the Congress 
     of such a rescission or veto by special message within 10 
     days (excluding Sundays) after enactment of an appropriation 
     Act providing such budget authority or a revenue or 
     reconciliation Act containing a targeted tax benefit.
       The amendment allows the President in each special message 
     to propose to reduce the appropriate discretionary spending 
     limit by an amount that does not exceed the total amount of 
     discretionary budget authority rescinded by that message. It 
     also requires the President to submit a separate special 
     message for each appropriation Act and for each revenue or 
     reconciliation Act. The President may only transmit one 
     special message for each Act.
       The House amendment makes such a rescission effective 
     unless the Congress enacts a disapproval bill. Any budget 
     authority rescinded is no longer available for obligation and 
     a tax benefit is not effective unless the Congress passes a 
     disapproval bill within 20 days, and assuming a veto, 
     overrides that veto within 5 days.
       The House amendment provides special procedures for 
     consideration of a rescission disapproval bill in each House.
       Upon receipt of the President's special message, if a 
     disapproval bill is introduced, it is referred to the 
     appropriate committee. The specific form of a disapproval 
     bill is noted in the House amendment, and such disapproval 
     bill must be introduced within 3 days in order to qualify for 
     the special procedures in the House. The Senate committee is 
     not required to report the bill and there is no provision 
     mandating discharge.
       The House committee to which the bill is referred shall 
     report it without amendment, and with or without 
     recommendation, no later than the eighth calendar day of 
     session after the date of its introduction. If the Committee 
     fails to report the bill, it is in order to move that the 
     House discharge the bill from committee.
       After a bill is discharged from Committee, it is in order 
     to move that the House move to consideration of the bill. All 
     points of order against the bill and its consideration are 
     waived and the motion is highly privileged. Motions to 
     reconsider the vote by which the motion is agreed to or 
     disagreed to are not in order.
       Consideration of the bill is limited to two hours equally 
     divided between proponents and opponents of the bill. 
     Amendments to

[[Page H2645]]

     the bill are not in order, except that a Member may make a 
     motion to strike the disapproval of any rescission(s) of 
     budget authority if such a motion is supported by at least 49 
     other Members. Motions to reconsider the vote on the 
     disapproval bill are not in order. It is only in order in the 
     House to consider one disapproval bill with respect to any 
     specific Presidential rescission message.
       If a rescission disapproval bill is considered by the 
     Senate, debate is limited to 10 hours to be divided equally 
     and controlled by the Majority and Minority leaders. Debate 
     on any motions or appeals in connection with the bill are 
     limited to one hour each, divided equally. Motions to further 
     limit debate are not debatable. A motion to recommit is not 
     in order unless such motion is to recommit the bill with 
     instructions that it be reported back within one day.
       Further, the House amendment mandates that it is not in 
     order in the Senate to consider any rescission disapproval 
     bill relating to any matter other than the items noted in the 
     President's special message. Amendments to a rescission 
     disapproval bill are not in order. The provisions noted in 
     this paragraph may only be waived by an affirmative vote of 
     three-fifths of the Senate.
       The House amendment provides for annual General Accounting 
     Office (GAO) reports on Presidential use of the line item 
     veto authority. It also specifically prohibits the President 
     from using the authority under the Act to change prohibitions 
     or limitations (fencing language) in an appropriation Act.
       The bill generally defines a targeted tax benefit as a 
     provision in a revenue or reconciliation Act that provides a 
     tax deduction, credit, exclusion, preference, or concession 
     to 100 or fewer beneficiaries.
       Finally, the bill provides a process for expedited judicial 
     review of provisions of this Act.


                          conference agreement

     Section 1. Short title
       This bill, when enacted, may be cited as the ``Line Item 
     Veto Act.''
     Sec. 2. Line item veto authority
       Section 2 of the conference report amends title X of the 
     Congressional Budget and Impoundment Control Act of 1974 to 
     add a new part C comprising sections 1021 through 1027.
       In general, part C grants the President the authority to 
     cancel in whole any dollar amount of discretionary budget 
     authority provided in an appropriation law or any item of new 
     direct spending or limited tax benefit contained in any law. 
     Congress has the authority to delegate to the President the 
     ability to cancel specific budgetary obligations in any 
     particular law in order to reduce the federal budget deficit.
       The conferees note that while the conference report 
     delegates new powers to the President, these powers are 
     narrowly defined and provided within specific limits. The 
     conference report includes specific definitions, carefully 
     delineates the President's cancellation authority, and 
     provides specific limits on this cancellation authority. The 
     delegation of this cancellation authority is not separable 
     from the President's duties to comply with these 
     restrictions. To the extent the President broadly applies 
     this new cancellation authority or reaches beyond these 
     limits to expand the application of this new authority, the 
     President will be reaching beyond the delegation of these 
     authorities. Given the significance of this delegation, the 
     conference report includes a sunset of this authority.
     Sec. 1021. Line item veto authority
       Section 1021(a) permits the President to cancel in whole 
     any dollar amount of discretionary budget authority, item of 
     new direct spending, or limited tax benefit contained in any 
     bill or joint resolution that has been signed into law 
     pursuant to Article I, section 7, of the Constitution of the 
     United States. The cancellation may be made only if the 
     President determines such cancellation will reduce the 
     federal budget deficit and will not impair any essential 
     government function or harm the national interest. In 
     addition the President must make any cancellations within 
     five days of the date of enactment of the law from which the 
     cancellations are made, and must notify the Congress by 
     transmittal of a special message within that time.
       The conferees specifically include the requirement that a 
     bill or joint resolution must have been signed into law in 
     order to clarify that the cancellation authority only becomes 
     effective after the President has exercised the 
     constitutional authority to enact legislation in its 
     entirety. This requirement ensures that the President 
     affirmatively demonstrates support for the underlying 
     legislation from which specific cancellations are then 
     permitted.
       The term ``cancel'' was specifically chosen, and is 
     carefully defined in section 1026. The conferees intend that 
     the President may use the cancellation authority to 
     surgically terminate federal budget obligations. The 
     cancellation authority is specifically limited to any entire 
     dollar amount of discretionary budget authority, item of new 
     direct spending, or limited tax benefit. The cancellation 
     authority does not permit the President to rewrite the 
     underlying law, nor to change any provision of that law. The 
     President may only terminate the obligation of the Federal 
     Government to spend certain sums of money through a specific 
     appropriation or mandatory payment, or the obligation to 
     forego the collection of revenue otherwise due to the Federal 
     Government in the absence of a limited tax benefit.
       Likewise, the terms ``dollar amount of discretionary budget 
     authority,'' ``item of new direct spending,'' and ``limited 
     tax benefit'' have been carefully defined in order to make 
     clear that the President may only cancel the entire dollar 
     amount, the specific legal obligation to pay, or the specific 
     tax benefit. ``Fencing language'' may not be canceled by the 
     President under this authority. This means that the President 
     cannot use this authority to modify or alter any aspect of 
     the underlying law, including any restriction, limitation or 
     condition on the expenditure of budget authority, or any 
     other requirement of the law.
       The conferees intend that, even once the federal obligation 
     to expend a dollar amount or provide a benefit is canceled, 
     all other operative provisions of the underlying law will 
     remain in effect. If the President desires a broader result, 
     then the President must either ask Congress to modify the law 
     or exercise the President's constitutional power to veto the 
     legislation in its entirety.
       The lockbox provision of the conference report has also 
     been included to maintain a system of checks and balances in 
     the President's use of the cancellation authority. Any credit 
     for money not spent, or for revenue foregone, is dedicated to 
     deficit reduction through the operation of the lockbox 
     mechanism. This ensures that the President does not simply 
     cancel a particular dollar amount of discretionary budget 
     authority, item of new direct spending, or limited tax 
     benefit in order to increase spending in other areas.
       Section 1021(b) requires the President to consider 
     legislative history and information referenced in law in 
     identifying cancellations. It also requires that the 
     President use the definitions in section 1026, and provides 
     that the President use any sources specified in the law or 
     the best available information.
       Section 1021(c) states that the President's cancellation 
     authority shall not apply to a disapproval bill, as defined 
     in section 1026. The provision is intended to prevent an 
     endless loop of cancellations.
     Sec. 1022. Special messages
       Section 1022 provides that, if the President cancels 
     provisions within a law, a special message must be submitted 
     to Congress. A separate special message must be submitted for 
     each law from which a cancellation is made.
       Similar to the requirements in section 1012 of the 
     Impoundment Control Act of 1974, the conference report 
     requires that the President's special message include 
     relevant supporting material about each cancellation and its 
     budgetary impact. The conferees intend this requirement to 
     ensure that the Congress and the public receive sufficient 
     information with which to judge the President's action.
       Specifically, the President's special message must include:
       (1) the dollar amount of discretionary budget authority, 
     items of new direct spending or limited tax benefits which 
     have been canceled;
       (2) corresponding reference numbers of each cancellation;
       (3) the determinations required under section 1021 and any 
     supporting material;
       (4) the reasons for each cancellation;
       (5) the estimated fiscal, economic and budgetary effect of 
     each cancellation (to the maximum extent practicable);
       (6) all facts, circumstances and considerations relating to 
     each cancellation;
       (7) the estimated effect of each cancellation upon the 
     objects, purposes and programs for which the canceled 
     authority was provided (to the maximum extent practicable); 
     and
       (8) the adjustments that will be made pursuant to section 
     1024 (``Deficit Reduction'') to the discretionary spending 
     limits under section 601 of the Budget Act and an evaluation 
     of the effects of those adjustments upon sequestration 
     procedures.
       The President's special message must specify any account, 
     department or establishment of the government and any 
     specific project or governmental functions impacted by each 
     cancellation.
       The conference report requires that, if applicable, the 
     special message include the specific states and congressional 
     districts impacted and the total number of cancellations 
     imposed during the current session of Congress on those 
     states and congressional districts. This is to ensure that 
     the Congress has information to determine if there is a 
     disproportionate impact on a particular state or 
     congressional district.
       The President's special message must be transmitted to the 
     House of Representatives and to the Senate within five 
     calendar days (excluding Sundays) of enactment (by the 
     President's signature) of the law to which any cancellations 
     apply. It is the intention of the conferees that the 
     President's cancellations be made as soon as possible after 
     the enactment of the law. The maximum time of five calendar 
     days is provided to ensure that all supporting material 
     required for inclusion in the special message can be provided 
     by the Administration. It is the view of the conferees that 
     additional time (beyond five calendar days) would 
     unnecessarily prolong the process.
       The special message must be transmitted to both Houses of 
     Congress on the same day, and must be received by the Clerk 
     of the House and to the Secretary of the Senate if either 
     House is not in session on that day.
       Any special message must be printed in the first issue of 
     the Federal Register published after the transmittal.

[[Page H2646]]

     Sec. 1023. Cancellation effective unless disapproved
       Upon receipt of the President's special message in both the 
     House of Representatives and the Senate, each dollar amount 
     of discretionary budget authority, item of new direct 
     spending, or limited tax benefit identified in the special 
     message is immediately canceled. The cancellation of a dollar 
     amount of discretionary budget authority automatically 
     rescinds the funds. With respect to an item of new direct 
     spending or a limited tax benefit, the cancellation renders 
     the provision void, such that the obligation of the United 
     States has no legal force or effect.
       The cancellation of a dollar amount of discretionary budget 
     authority, an item of new direct spending, or a limited tax 
     benefit is nullified only if a disapproval bill is enacted 
     into law. The conferees intend that, if a disapproval bill is 
     enacted, the President shall expend the funds or implement a 
     provision as originally directed by Congress. The effective 
     date for any cancellation disapproved in a disapproval bill 
     is the original date provided in the law to which the 
     cancellation applied.
       Section 1023(b) provides that, when a dollar amount of 
     discretionary budget authority canceled by the President is 
     part of a larger sum in an appropriation law, such 
     cancellation will result in the commensurate reduction of 
     each relevant appropriation account by that dollar amount. 
     These reductions are a necessary conforming change to ensure 
     that all sums required to be spent by the appropriation law 
     accurately reflect the cancellation contained in the 
     President's message. This is a technical mechanism to 
     maintain mathematical consistency and does not grant the 
     President any additional authority.
       To illustrate the mechanism for commensurate reductions in 
     discretionary budget authority the conferees provide the 
     following example:
       The FY '96 Agriculture Appropriations Act (Public Law 104-
     37) appropriates a total of $421,929,000 for agricultural 
     research and education, of which $49,846,000 is made 
     available for special grants for agriculture research. The 
     conference report accompanying this law contains a table that 
     allocates the $49,846,000 total into lesser dollar amounts 
     all of which correspond to individual research programs. This 
     table includes, for example, a $3,758,000 allocation for: 
     ``Wood Utilization Research (OR, MS, NC, MN, ME, MI)''.
       Assuming the President exercised the authority to cancel 
     this $3,758,000, this dollar amount would be automatically 
     subtractedfrom the $421,929,000 total and from the 
     $49,846,000 earmark. If the $3,758,000 was included in any 
     other larger dollar amount in the appropriation law, then all 
     such other dollar amounts would likewise be simultaneously 
     reduced by $3,758,000.
     Sec. 1024. Deficit reduction
       Section 1024 establishes a deficit reduction, or 
     ``lockbox'', procedure for the cancellations of discretionary 
     budget authority, new direct spending, or limited tax 
     benefits. The conference report's lockbox procedures are 
     incorporated into existing procedures governing discretionary 
     spending limits and pay-as-you-go requirements under the 
     Balanced Budget and Emergency Deficit Control Act.
       The conference report requires the Office of Management and 
     Budget (OMB) to estimate the discretionay budget authority 
     and outlay savings that result from cancellations from an 
     appropriation law and include those calculations as part of 
     the estimate OMB must submit to Congress under section 251 of 
     the Balanced Budget and Emergency Deficit Control Act. The 
     conference report also requires OMB to calculate a reduction 
     to the spending caps that is equal to the budget authority 
     reduction and related outlay savings that result from a 
     cancellation.
       After the expiration of the time period for congressional 
     consideration of a disapproval bill plus 10 days, OMB is 
     required to adjust the spending caps downward by the amount 
     of budget authority and outlay savings in its next sequester 
     report.
       In the case of the cancellation of direct spending or 
     limited tax benefits, OMB is required to estimate the deficit 
     decrease as a separate entry in its pay-as-you-go report to 
     Congress. In order to ensure that the savings from the 
     cancellation of new direct spending or limited tax benefits 
     are devoted to deficit reduction and are not available to 
     offset a deficit increase in another law, the conference 
     report provides that the savings from these cancellations 
     shall not be included in the pay-as-you-go balances under the 
     Balanced Budget and Emergency Deficit Control Act. Similarly, 
     if a disapproval bill is enacted that overturns the 
     cancellation of an item of direct spending or a limited tax 
     benefit, OMB will not score this legislation as increasing 
     the deficit under pay as you go.
       Section 1024 also requires the Congressional Budget Office 
     (CBO) to submit its estimate of the savings resulting from a 
     cancellation to the Budget Committees of House and Senate. 
     This is consistent with existing provisions in the Balanced 
     Budget and Emergency Deficit Control Act which require CBO 
     estimates and require OMB to make comparisons of its 
     estimates with those made by CBO. The conferees expect CBO 
     and the Budget Committees to carefully monitor OMB's 
     estimates of cancellations.
       The conferees intend that any savings from a cancellation 
     be dedicated to deficit reduction and not used as an offset 
     for future spending. The conference report is silent on 
     congressional enforcement mechanisms because existing scoring 
     conventions will have the effect of dedicating any savings 
     from these cancellations to deficit reduction. Under existing 
     congressional scoring conventions, CBO and the Budget 
     Committees only score the budgetary impacts that directly 
     result from legislation. The cancellation of an item will 
     represent an administrative action and will not be scored as 
     savings. Therefore, the savings from a cancellation will not 
     be available as an offset for congressional scoring purposes. 
     During the period for consideration of a disapproval bill CBO 
     should not score the cost associated with a disapproval of a 
     cancellation.
       If there is an effort to include in legislation a 
     cancellation already made by the President and claim the 
     savings from such a cancellation as an offset for a provision 
     that increases the deficit, the conferees expect the Budget 
     Committees to ensure these savings are not used as an offset.
     Sec. 1025. Expedited congressional consideration of 
         disapproval bills
       Section 1025 adopts the House provision with modifications 
     providing for expedited procedures to consider disapproval 
     bills. The conferees clearly intend this language to stand 
     separate and apart from the language currently found in part 
     B of title X of the Budget Act with regard to consideration 
     of proposed rescissions, reservations, and deferrals of 
     budget authority. The language of the conference report is 
     directed solely at Congress' ability to respond to the 
     cancellation authority of the Executive and is in no way 
     intended to impact on or be defined by existing title X 
     procedures.
       The conference report provides Congress with 30 calendar 
     days of session to consider a disapproval bill under 
     expedited procedures. A ``calendar day of session'' is 
     defined as only those days during which both Houses of 
     Congress are in session. It is assumed Congress would want to 
     act quickly on any disapproval bills. This time period is 
     available to provide Congress with flexibility to schedule 
     consideration of a disapproval bill during a busy legislative 
     session.
       During this time period, a disapproval bill may qualify for 
     the expedited procedures in each House. However, upon the 
     expiration of this period, a disapproval bill may no longer 
     qualify for these expedited procedures in the House of 
     Representatives. In the Senate, a disapproval bill which 
     began consideration under these expedited procedures may 
     continue within such procedures notwithstanding the 
     expiration of the time period.
       Upon final Congressional adjournment, if a disapproval bill 
     relating to a special message was pending before either House 
     of Congress or any committee thereof or was pending before 
     the President (i.e. a pocket veto), and the time period has 
     not expired, a new disapproval bill with respect to the same 
     message may be introduced within the first five calendar days 
     of session of the next Congress. This disapproval bill 
     qualifies for the expedited procedures outlined above and the 
     period for Congressional consideration begins anew.
       A special Presidential message relating to a law could 
     include a number of cancellations. In establishing expedited 
     procedures for the consideration of a disapproval bill, the 
     conference report seeks to find a balance between providing a 
     procedure to guarantee that Congress can quickly disapprove 
     the President's cancellations while giving Congress the 
     flexibility to pick and choose among the cancellations to 
     include in the disapproval bill. In both Houses of Congress, 
     quick action is encouraged in that only one bill may 
     ultimately be acted upon for each special message using these 
     expedited procedures.
       It should be noted that the expedited procedures provide 
     strict time limitations at all stages of floor consideration 
     of a disapproval bill. The conferees intend to provide both 
     Houses of Congress with the means to expeditiously reach a 
     resolution and to foreclose any and all delaying tactics 
     (including, but clearly not limited to: extraneous 
     amendments, repeated quorum calls, motions to recommit, or 
     motions to instruct conferees). The conferees believe these 
     expedited procedures provide ample time for Congress to 
     consider the President's cancellations and work its will upon 
     them.
       Section 1025(a) provides for the receipt and referral of 
     the special message in both Houses of Congress. Upon the 
     cancellation of a dollar amount of discretionary budget 
     authority, an item of direct spending or a limited tax 
     benefit under section 1021(a), the President must transmit to 
     Congress a special message outlining the cancellation as 
     required by section 1022.
       When Congress receives this special message it shall be 
     referred to the Budget Committees and the appropriate 
     committee or committees in each House. For example, the 
     message pertaining to the cancellation of a dollar amount of 
     discretionary budget authority from an appropriation law 
     would be referred to the Committee on Appropriations of each 
     House. A special message pertaining to the cancellation of an 
     item of direct spending would be referred to the authorizing 
     committee or committees of each House from which the original 
     authorization law derived. Any special message relating to 
     more than one committee's jurisdiction, i.e. a cancellation 
     message from a large omnibus law such as a reconciliation 
     law, shall be referred to the appropriate committees in each

[[Page H2647]]

     House. Each special message shall be printed as a document of 
     the House of Representatives.

               Procedures in the House of Representatives

       In order for a disapproval bill to qualify for the 
     expedited procedures in the House of Representatives as 
     outlined in section 1025(b), it must meet two requirements. 
     First, a disapproval bill must meet the definition of a 
     disapproval bill as set forth in section 1026. Second, the 
     disapproval bill must be introduced no later than the fifth 
     calendar day of session following the receipt of the 
     President's special message. Any disapproval bill introduced 
     after the fifth calendar day of session is subject to the 
     regular rules of the House of Representatives regarding 
     consideration of a bill.
       Any disapproval bill introduced in the House of 
     Representatives must disapprove all of the cancellations in 
     the special message to which the disapproval bill relates. 
     Each such disapproval bill must include in the first blank 
     space referred to in section 1026(6)(C) a list of the 
     reference numbers for all of the cancellations made by the 
     President in that special message.
       Any disapproval bill introduced pursuant to 1025(c) shall 
     be referred to the appropriate committee or committees. It is 
     not the intention of the conferees that a disapproval bill 
     pursuant to a special message regarding a reconciliation law 
     be referred to the Budget Committee. Any committee or 
     committees of the House of Representatives to which such a 
     disapproval bill has been referred shall report it without 
     amendment, and with or without recommendation, not later than 
     the seventh calendar day of session after the date of its 
     introduction.
       If any committee fails to report the disapproval bill 
     within that period, it shall be in order for any Member of 
     the House to move that the House discharge that committee 
     from further consideration of the bill. However, such a 
     motion is not in order after the committee has reported a 
     disapproval bill with respect to the same special message. 
     This motion shall only be made by a Member favoring the bill 
     and shall be made one day after the calendar day on which the 
     Member offering the motion has announced to the House that 
     Member's intention to make such a motion and the form of that 
     motion. Furthermore, this motion to discharge shall only be 
     made at a time or place designated by the Speaker in the 
     legislative schedule of the day after the calendar day on 
     which the Member gives the House proper notice.
       This motion to discharge shall be highly privileged. Debate 
     on the motion shall be limited to not more than one hour and 
     shall be equally divided between a proponent and an opponent. 
     After completion of debate, the previous question shall be 
     considered as ordered on the motion to its adoption without 
     intervening motion. A motion to reconsider the vote by which 
     the motion was agreed to or not agreed to shall not be in 
     order. It shall not be in order to consider more than one 
     such motion to discharge a disapproval bill pertaining to a 
     particular special message.
       After a disapproval bill has been reported or a committee 
     has been discharged from further consideration, it shall be 
     in order to move that the House resolve into the Committee of 
     the Whole House on the State of the Union for consideration 
     of the disapproval bill. If the bill has been reported, the 
     report on the bill must be available for at least one 
     calendar day prior to consideration of the bill. All points 
     of order against the bill and its consideration, except a 
     point of order pertaining to a one-day layover requirement, 
     shall be waived. If the bill has been discharged, all points 
     of order against the bill and its consideration shall be 
     waived. The motion that the House resolve into the Committee 
     of the Whole shall be highly privileged. A motion to 
     reconsider the vote by which the motion is agreed to or 
     disagreed to shall not be in order.
       During consideration of the bill in the Committee of the 
     Whole, the first reading of the bill shall be dispensed with. 
     General debate on the disapproval bill shall be confined to 
     the bill and shall not exceed one hour equally divided 
     between and controlled by a proponent and an opponent of the 
     bill. After completion of the one hour of general debate, the 
     bill shall be considered as read for amendment under the five 
     minute rule. Only one motion that the Committee rise shall be 
     in order unless that motion is offered by the manager of the 
     bill.
       No amendment shall be in order, except that any Member, if 
     supported by forty-nine other Members (a quorum being 
     present), may offer an amendment striking the reference 
     number or reference numbers of a cancellation or 
     cancellations from the disapproval bill. This process allows 
     Members the opportunity to narrow the focus of the 
     disapproval bill, striking references to cancellations they 
     do not wish to disapprove, while retaining in the disapproval 
     bill references to cancellations they wish to overturn. A 
     vote in favor of the disapproval bill is a vote to spend the 
     money the President sought to cancel. A vote against the 
     disapproval bill is a vote to agree with the President to 
     cancel the spending.
       No amendment shall be subject to further amendment, except 
     pro forma amendments for the purposes of debate only. 
     Consideration of the bill for amendment shall not exceed one 
     hour excluding time for recorded votes and quorum calls. At 
     the conclusion of consideration of the bill for amendment, 
     the Committee shall rise and report the bill to the House 
     with such amendments as may have been adopted. The previous 
     question shall be considered as ordered on the bill and 
     amendments thereto to final passage without any intervening 
     motion. A motion to reconsider the vote on passage of the 
     bill shall not be in order.
       All appeals of decisions of the Chair relating to the 
     application of the rules of the House of Representatives to 
     this procedure for consideration of the disapproval bill 
     shall be decided without debate.
       It shall be in order to consider only one disapproval bill 
     pertaining to each special message under these expedited 
     messages except for consideration of a similar Senate bill. 
     However, if the House has already rejected a disapproval bill 
     with respect to the same special message as that to which the 
     Senate bill refers, it shall not be in order to consider that 
     bill.
       In the event of disagreement between the two Houses a 
     conference should be promptly convened. It shall be in order 
     to consider a conference report in the House of 
     Representatives provided such report has been available to 
     the House for one calendar day (excluding Saturdays, Sundays 
     or legal holidays, unless the House is in session on such a 
     day) and the accompanying statement has been filed in the 
     House.
       Debate in the House of Representatives on the conference 
     report and any amendments in disagreement on any disapproval 
     bill shall each be limited to not more than one hour equally 
     divided and controlled by a proponent and an opponent. A 
     motion to further limit debate shall not be debatable. A 
     motion to recommit the conference report shall not be in 
     order and it shall not be in order to reconsider the vote by 
     which the conference report is agreed to or disagreed to.

                        Procedures in the Senate

       Any member of the Senate may introduce a disapproval bill 
     containing any combination of cancellations included in the 
     President's special message. The disapproval bill shall be 
     referred to the appropriate committee or committees. If 
     necessary, referral to multiple committees is permissible to 
     accommodate disapproval bills which relate to cancellations 
     from omnibus bills (i.e. reconciliation bills). A committee 
     shall report the bill with or without amendment within seven 
     days during which the Senate is in session or be discharged. 
     A disapproval bill received from the House of Representatives 
     shall not be referred but shall be automatically placed on 
     the Calendar. It is the intent of the conferees that only one 
     disapproval bill for each special Presidential message be 
     considered under the expedited procedures. This however, is 
     not meant to limit the Senate's ability to choose between a 
     Senate-originated and a House-originated disapproval bill, it 
     is intended that there be only one legislative vehicle.
       A motion to proceed to the consideration of a disapproval 
     bill is not debatable. Section 1025(e)(6) provides a ten hour 
     overall limitation for the floor consideration of a 
     disapproval bill. Except as provided in section 1025(e)(9) 
     (which addresses disposition of a Senate disapproval bill), 
     this limit on consideration is intended to cover all floor 
     action with regard to a disapproval bill. This section is 
     specifically meant to preclude the offering of amendments or 
     the making of dilatory motions after the expiration of the 10 
     hours. Consideration of a message from the House of 
     Representatives with respect to a disapproval bill is limited 
     to four hours, as is consideration of a conference report and 
     any amendments reported in disagreement. Again the intent of 
     the conferees is to preclude the offering of amendments or 
     motions after the expiration of time so as to facilitate the 
     adoption of any conference report or the disposition of any 
     message from the House. In limiting the time for 
     consideration the conferees do not intend to allow the 
     process to be halted by the delay in the making of necessary 
     and appropriate motions. Therefore motions to concur, 
     disagree or disagree and request a new conference may be made 
     at the expiration of time.
       Amendments to a disapproval bill, whether offered in 
     committee or from the floor of the Senate, are strictly 
     limited to those amendments which either strike or add a 
     cancellation that is included in the President's special 
     message. The conferees note that these expedited procedures 
     are reserved solely for disapproval bills which overturn one 
     or more cancellations contained in a President's special 
     message. No other matter may be included in such bills. To 
     enforce this restriction in the Senate, a point of order 
     (which may be waived by a three-fifths vote) would lie 
     against any amendment that does anything other than strike or 
     add a cancellation within the scope of the special message. 
     To the extent that extraneous items are added to disapproval 
     bills, and the Senate has not waived the point of order 
     against such an item, the conferees intend that such 
     legislation would no longer qualify for the expedited 
     procedures.
       The conference report also provides that any conferees on a 
     disapproval bill must include any cancellations upon which 
     the two Houses have agreed and may include any or all 
     cancellations upon which the two Houses have disagreed, but 
     may not include any cancellations not committed to the 
     conference.
     Sec. 1026. Definitions
       (1) Appropriation Law. As used in this Act, the term 
     ``appropriation law'' includes any Act which provides 
     general, special, supplemental, deficiency, or continuing 
     appropriations of federal funds, which has been presented to 
     the President in accordance with

[[Page H2648]]

     Article I, section 7 of the Constitution of the United 
     States, and which has been affirmatively signed into law by 
     the President.
       (2) Calendar Day. The term ``calendar day'' means a 
     standard 24-hour period beginning at midnight.
       (3) Calendar Day of Session. The term ``calendar day of 
     session'' means only those days on which both Houses of 
     Congress are in session. This definition excludes periods of 
     recess and adjournment by either House.
       (4) Cancel. In the case of discretionary budget authority, 
     the term ``cancel'' means to rescind an entire dollar amount. 
     The term rescind is clearly understood through long 
     experience between the Executive and Legislative branches 
     with respect to appropriated funds. The conferees do not 
     intend that any new interpretation be applied to the term 
     rescind, but rather intend to narrow the scope of 
     cancellation authority as compared with the authority 
     provided under section 1012 of the Budget Act.
       For items of new direct spending, three definitions are 
     provided to specifically tailor the cancellation authority to 
     the type of direct spending involved. In the case of direct 
     spending that is budget authority provided by law other than 
     an appropriation law, the term cancel means to prevent that 
     budget authority from having legal force or effect. For 
     example, in the case of budget authority that provides 
     authority to contract for a particular project, the effect of 
     a cancellation by the President would be to foreclose the 
     ability of the Federal Government to enter into an agreement 
     to pay the amount of money provided in the law. The 
     cancellation affects only the money that would otherwise be 
     spent, and may not be used to alter or terminate any 
     condition contained in the law.
       For entitlement authority, the term cancel means that the 
     President may prevent the specific provision that results in 
     the deficit-increasing obligation of the Federal Government 
     from having legal force or effect. The cancellation affects 
     only the legal obligation to pay a benefit, and does not 
     change or affect any other aspect of the law.
       With respect to direct spending that is conducted through 
     the food stamp program, the term cancel means that the 
     President may prevent the specific provision of law that 
     results in an increase in expenditures from having legal 
     force or effect. Again, the authority is narrowly defined, 
     and is limited only to eliminating the increase in food stamp 
     obligations that would otherwise occur. No other aspect of 
     the law could be altered, terminated or otherwise affected.
       Finally, with respect to limited tax benefits, the term 
     cancel means to prevent the specific provision of law that 
     provides the benefit from having legal force or effect. 
     Again, the authority granted the President is very narrow--
     only to collect the tax that would otherwise not be collected 
     or to deny the credit that would otherwise be provided. The 
     President may not change, alter, or modify any other aspect 
     of the law.
       (5) Direct Spending. The term ``direct spending'' is an 
     existing term that is defined in section 250(8) of the 
     Balanced Budget and Emergency Deficit Control Act of 1985. 
     The conference report makes technical modifications to the 
     definition to make it appropriate for use in part C of title 
     X, but the conferees intend the term ``direct spending'' to 
     have the same meaning as it does under the Balanced Budget 
     and Emergency Deficit Control Act.
       (6) Disapproval Bill. For the purposes of the conference 
     report, the term ``disapproval bill'' is defined as a bill or 
     a joint resolution which only disapproves one or more 
     cancellations of dollar amounts of discretionary budget 
     authority, items of new direct spending or limited tax 
     benefits in a special message transmitted by the President 
     under section 1022.
       The disapproval bill is defined to include a list by 
     reference number of one or more of the cancellations in the 
     President's special message, allowing the opportunity for 
     amendments relating to specific cancellations. The structure 
     of the disapproval bill is carefully defined and proscribed 
     to ensure that only a list of reference numbers identifying 
     cancellations from a particular special message, and nothing, 
     more are included in a bill that is eligible for the 
     expedited procedures that are provided under section 1025. 
     Since it is the intent of the conferees to ensure that the 
     expedited procedures are reserved for bills that only 
     disapprove any or all of the President's cancellations, the 
     definition is designed to ensure that matters beyond the 
     scope of the President's special message are not permitted to 
     be added to a disapproval bill. However, the conferees 
     recognize the legitimate interest members may have in 
     limiting the focus of a disapproval bill to include only a 
     subset of the cancellations in a President's special message.
       Specifically, a disapproval bill referencing the 
     President's cancellations has the following title: ``A bill 
     disapproving the cancellations transmitted by the President 
     on ________,'' with the blank space being filled with the 
     date of transmission of the relevant special message and the 
     number of the relevant public law.
       The disapproval bill does not have a preamble and provides 
     only the following: ``That Congress disapproves of 
     cancellations ________, as transmitted by the President in a 
     special message on ________, regarding ________.'' The first 
     blank space is to be filled in with a list by reference 
     number of one or more of the cancellations contained in the 
     President's special message. The second blank space is to be 
     filled in with the date of transmission of the President's 
     special message. The third blank space is to be filled in 
     with the number of the public law in which the special 
     message relates.
       (7) Dollar Amount of Discretionary Budget Authority. The 
     term ``dollar amount of discretionary budget authority'' is 
     carefully defined in section 1026(7) in order to ensure that 
     the President's authority to cancel discretionary spending in 
     appropriation laws is clearly delineated. The conference 
     report delegates the authority to the President to cancel in 
     whole any dollar amount specified in an appropriation law.
       In addition, to increase the President's discretion, the 
     conference report allows the President to cancel a dollar 
     amount of budget authority provided in an appropriation law 
     by specific amounts identified by the Congress in the 
     statement of managers, the governing committee report, or 
     other law. By limiting the delegation of authority, the 
     conferees intend to preclude arguments between the Executive 
     and Legislative Branches and to ensure that the delegation is 
     not overbroad or vague. As is described in further detail 
     below, the conferees have sought to provide the President the 
     ability to rescind entire dollar amounts, even if not 
     specified as a dollar amount in the law itself, so long as 
     the dollar amount can be clearly identified and is in an 
     indivisible whole with which Congress has previously agreed.
       The conferees note that the definition specifically 
     excludes certain types of budget authority that are addressed 
     by other provisions in part C of title X, as well as any 
     restriction, condition, or limitation that Congress places on 
     the expenditure of budget authority or activities involving 
     such expenditure. The exclusion of restrictions, conditions, 
     or limitations is included to make clear that the President 
     may not use the authority delegated in section 1021(a) to 
     cancel anything other than a specific dollar amount of budget 
     authority.
       The cancellation authority cannot be used to change, alter, 
     modify, or terminate any policy included by Congress, other 
     than by rescinding a dollar amount. Obviously, if the 
     Congress has included a restriction in the law that prohibits 
     the expenditure of budget authority for any activity, there 
     is no dollar amount to be rescinded by the President, nor 
     would any money be saved for use in reducing the federal 
     budget deficit, which is a requirement for the use of the 
     authority provided under section 1021(a).
       As described in subparagraph (A)(i), the President may 
     cancel the entire dollar amount of budget authority specified 
     in an appropriation law. The term ``entire'' means just that; 
     the President may rescind, or ``line out'' the dollar amount 
     of budget authority specified in the law, so that the dollar 
     amount provided in the law becomes zero after the 
     cancellation. For example, in Public Law 104-37, the 
     Agriculture Appropriations Act for Fiscal Year 1996, 
     $49,486,000 was provided in the law for special grants for 
     agriculture research. Using the authority granted under 
     section 1021(a)(1), as defined under section 1026(7)(A)(i), 
     the President could cancel only the entire $49,486,000.
       Further, again under subparagraph (A)(i), if the 
     appropriation law does not include a specific dollar amount, 
     but does include a specific proviso that requires the 
     allocation of a specific dollar amount, then the President 
     may rescind the entire dollar amount that is required by the 
     proviso. A fictitious example of what the conferees intend in 
     this case follows:

       An appropriation law includes a provision that states ``for 
     the operation and maintenance of the Army, $1,400,000,000, 
     provided Fort Fictitious is maintained at Fiscal Year 1995 
     levels,''. In this instance, the President could ascertain 
     what the operation of Fort Fictitious cost in FY 1995, and 
     could rescind that entire amount from the $1.4 billion 
     provided for Army O&M. The conferees note that the President 
     would have to take the entire dollar amount required to 
     operate Fort Fictitious in FY 1995, and could not simply take 
     part of that amount. It is intended to be an all or nothing 
     decision.

       As a further specific illustration, the conferees note that 
     the General Construction Account in Public Law 104-46, the 
     Energy and Water Development Appropriations Act, 1996, 
     states:

       ``$804,573,000 to remain available until expended, of which 
     such sums as necessary pursuant to Public Law 99-662 shall be 
     derived from the Inland Waterways Trust Fund, for one-half of 
     the costs of construction and rehabilitation of inland 
     waterways projects, including rehabilitation costs for the 
     Lock and Dam 25, Mississippi River, Illinois and Missouri * * 
     *''

       In this example, the President could cancel the entire 
     $804,573,000 or could cancel an amount equal to the entire 
     dollar amount that would be required to fund the 
     rehabilitation costs of the Lock and Dam 25 project, noting 
     in his message all information as required by section 1022.
       In subparagraph (A)(ii) the President is given the 
     authority to rescind the entire dollar amount represented 
     separately in any table, chart, or explanatory text included 
     in the statement of managers or the governing committee 
     report that accompanies an appropriation law. The term 
     ``governing committee report'' is included to address the 
     fact that the current practice in preparing the

[[Page H2649]]

     statement of managers for a conference report on an 
     appropriation law is to simply address changes that were made 
     in the statutory language and the accompanying committee 
     reports, thus leaving intact and incorporation by reference 
     tables, charts, and explanatory text in one of the two 
     committee reports that were not modified by the conference.
       An example of the authority described in subparagraph 
     (A)(ii) is found in the Conference Report accompanying the FY 
     1996 Military Construction Appropriations Act (Public Law 
     104-32). The statement of managers accompanying the 
     conference report contains a chart denoting allocations of 
     dollars to various installations and projects. On page 38 
     there is an allocation of $10,400,000 for a physical fitness 
     center at the Bremerton Puget Sound Naval Shipyard. Except 
     for this chart there is no other reference to the physical 
     fitness center in either the statute or narrative explanation 
     in the Conference Report. Under the authority provided by the 
     definition in subparagraph (A)(ii), the President could 
     cancel the entire $10,400,000 provided for the physical 
     fitness center, but could not cancel only a part of that 
     amount.
       The inclusion of subparagraph (A)(ii) is not intended to 
     give increased legal weight or authority to documents that 
     accompany the law that is enacted. Rather, as an exercise of 
     its authority to specify the terms of the delegation to the 
     President, Congress is choosing to use those documents as a 
     means of allowing the President increased discretion to 
     reduce dollar amounts of discretionary budget authority 
     provided in an appropriation law. In order to ensure that the 
     delegated authority is clear, the conferees have limited that 
     authority to dollar amounts identified by Congress in the 
     appropriation law, the accompanying statement of managers, 
     the governing committee report or other law. Since Congress 
     often provides detailed identification of dollar amounts in 
     the accompanying documents, they represent an agreed upon set 
     of dollar amounts that the President may rescind in their 
     entirety.
       Subparagraph (A)(iii) has been included by the conferees to 
     address a specific circumstance where neither the 
     appropriation law nor the accompanying statement of managers 
     or committee reports include any itemization of a dollar 
     amount provided in that appropriation law. However, another 
     law mandates that some portion of the dollar amount provided 
     in the appropriation law be allocated to a specific program, 
     project, or activity that can be quantified as a specific 
     dollar amount. In this case, the President could rescind the 
     entire dollar amount required to be allocated by the other 
     law, since that dollar amount has been identified by Congress 
     as a specific dollar amount that must be spent. As is the 
     case with the earlier provisions, the President could not 
     rescind part of the dollar amount mandated by the other law. 
     It is an all or nothing decision. Likewise, the President 
     could not use the cancellation authority to change, alter, or 
     modify in any way the other law.
       An example of the authority provided in subparagraph 
     (A)(iii) is found in section 132 of Public Law 104-106, the 
     National Defense Authorization Act for Fiscal Year 1996. 
     Section 132 states that ``Of the amounts appropriated for 
     Fiscal Year 1996 in the National Defense Sealift Fund, 
     $50,000,000 shall be available only for the Director of the 
     Advanced Research Projects Agency for advanced submarine 
     technology activities.'' In this example the President could 
     ``look through'' the appropriation law to the authorization 
     law that mandates that $50 million is available only for 
     advanced submarine technology activities, and could cancel 
     the entire $50 million.
       However, had the appropriation law contained a provision 
     that contradicted or otherwise made the mandate in the 
     authorization law ineffective with respect to the allocation 
     of the National Sealift Fund, then the President would not be 
     able to use the amount in the authorization law as the basis 
     for the cancellation of a dollar amount of discretionary 
     budget authority. As with appropriation laws, the President 
     cannot use the authority in subparagraph (A)(iii) to change, 
     alter, or modify any provision of the authorization law.
       Subparagraphs (A)(iv) and (A)(v) are variations on the 
     authority granted in clauses (i) through (iii), and are 
     intended to address the circumstance where Congress does not 
     specify in the appropriation law, the accompanying documents, 
     or other law a specific dollar amount, choosing instead to 
     require the purchase of a particular quantity of goods. 
     Subparagraphs (A)(iv) and (A)(v) allow the President to 
     rescind the entire dollar amount of discretionary budget 
     authority represented by the quantity specified in the law or 
     documents. To determine the specific dollar amount, the 
     President is required to multiply the estimated procurement 
     cost by the total quantity of items specified in the law of 
     documents. The President may then rescind the entire dollar 
     amount represented by the product of those two figures. The 
     conferees expect that the President will use the best 
     available information, as represented by the President's 
     budget submission or binding contract documents, to estimate 
     the procurement cost.
       The conferees have included the following examples in order 
     to more clearly explain the definition of dollar amount of 
     discretionary budget authority as defined by section 1026(7). 
     These examples are used solely for illustrative purposes and 
     the conferees are in no way commenting on the merit of any of 
     these programs. The conferees do not intend for these 
     examples to represent all instances where cancellation 
     authority may be used.
       The FY 1996 Agriculture Appropriations Act (Public Law 104-
     37) appropriates $49,846,000 in special grants for 
     agriculture research. The Conference Report accompanying this 
     law contains a table that allocates the $49,846,000 total 
     into lesser dollar amounts all of which correspond to 
     individual research programs. This table, for example, 
     contains a $3,758,000 allocation for ``Wood Utilization 
     Research (OR, MS, MN, ME, MI)''.
       Using the definition in section 1026(7)(A)(i) and (ii), the 
     President could cancel either the entire $49,846,000 
     specified in the statute or the entire $3,758,000 described 
     in the chart in the Conference Report. However, because the 
     Congress did not break down the allocations for each state 
     associated with this project the President would not have the 
     authority to take a portion of the $3,758,000 allocated to 
     wood utilization research.
       The conferees intend that cancellation authority only 
     applies to whole items. If an item (or project) occurs in 
     more than one state, and the law or a report that accompanies 
     an appropriation law lists an item (project) and then lists a 
     series of states, it is the entire item that must be 
     canceled.
       In the example listed above, ``Wood Utilization Research'' 
     appears in the report as: ``Wood Utilization Research (OR, 
     MS, NC, MN, ME, MI).''
       The conferees believe it is important to note that this 
     line in the report must be canceled in its entirety. The 
     President's cancellation authority is strictly limited. The 
     President has no authority in this example to cancel wood 
     utilization research for Michigan only.
       To further illustrate this example, the conferees submit 
     the following example that corresponds to a chart contained 
     in the same conference report: ``Aflatoxin (IL), 133,000; 
     Human Nutrition (AR), 425,000; Human Nutrition (IA), 473,000; 
     Wool Research (TX, MT, WY) 212,000.''
       In this case, the President may cancel aflatoxin (IL), 
     Human Nutrition (AR), Human Nutrition (IA), and/or Wool 
     Research (TX, MT, WY). Although there are two human nutrition 
     research projects listed in two different states, because of 
     the manner in which they are listed, each project may be 
     separately canceled. Again, the President may only cancel the 
     entire wool research program and may not cancel only wool 
     research in Texas.
       Section 1026(7)(B) describes what is not included in the 
     definition of ``dollar amount of discretionary budget 
     authority.'' Subparagraphs (B)(i) and (B)(ii) exclude items 
     of new direct spending, for which cancellation authority is 
     provided under other sections of part C of title X. 
     Subparagraph (B)(iii) excludes from the definition any budget 
     authority canceled or rescinded in an appropriation law in 
     order to ensure that those cancellations or rescissions 
     cannot be undone by the President using the cancellation 
     authority.
       As described earlier, subparagraph (B)(iv) excludes from 
     the definition any restriction, condition, or limitation in 
     an appropriation law or the accompanying statement of 
     managers or governing committee report on the expenditure of 
     budget authority or on activities involving such expenditure. 
     The following two examples illustrate the conferees' intent 
     that the President cannot use the cancellation authority to 
     alter the Congressional policies included in these 
     restrictions, conditions, or limitations.
       The Labor, Health and Human Services and Education and 
     Related Agencies Appropriations Act, H.R. 1217, as amended by 
     the Senate Appropriations Committee contained the following 
     section:

       ``Sec. 103. No amount of funds appropriated in this Act for 
     fiscal year 1996 may be used to implement, administer, or 
     enforce any executive order, or other rule or order, that 
     prohibits Federal contracts with, or requires that debarment 
     of, or imposes other sanction on, a contractor on the basis 
     that such contractor or organizational unit thereof has 
     permanently replaced lawfully striking workers.''

       The President's cancellation authority only applies to 
     entire dollar amounts. The above example of ``fencing 
     language'' is a limitation and contains no dollar amount. 
     Therefore, the President has no authority to alter or cancel 
     this statement of Congressional policy.
       If a limitation or condition on spending--``fencing 
     language''--is not written as a separate numbered or 
     unnumbered paragraph, but instead is written as a proviso to 
     an appropriated amount, the President still has no power to 
     cancel the proviso.
       The Energy and Water Development Appropriations Act, 1996, 
     (Public Law 104-46), Title II, Department of the Interior, 
     General Administrative Expenses, states:

       ``For necessary expenses of general administration and 
     related functions in the office of the Commissioner, the 
     Denver office, and offices in the five regions of the Bureau 
     of Reclamation, $48,150,000, of which $1,400,000 shall remain 
     available until expended, the total amount to be derived from 
     the reclamation fund and to be nonreimbursable pursuant to 
     the Act of April 19, 1945 (43 U.S.C. 377); Provided, that no 
     part of any other appropriation in this Act shall be 
     available for activities or functions budgeted for the 
     current fiscal year as general administrative expenses.


[[Page H2650]]


       Using this example, the President may cancel $48,150,000 or 
     the $1,400,000 noted, but may not cancel or alter in any way 
     the proviso restricting the use of other appropriated funds 
     contained in this Act.
       The conference report also allows the President to cancel 
     the entire amount of budget authority required to be 
     allocated by a specific proviso in an appropriation law for 
     which a specific dollar figure was not included. The 
     conferees recognize that from time to time, budget authority 
     may be mandated to be spent on a specific program or project 
     without a specific dollar amount being listed. However, in 
     order to comply with the proviso, the President would have to 
     expend appropriated funds.
       (8) Item of New Direct Spending. The term ``item of new 
     direct spending'' means a provision of law that results in an 
     increase in budget authority or outlays relative to the 
     baseline set forth pursuant to section 257 of the Balanced 
     Budget and Emergency Deficit Control Act of 1985.
       Under the Balanced Budget and Emergency Deficit Control Act 
     of 1985, a reauthorization or an extension of a major 
     entitlement program would not result in an increase in direct 
     spending. As a consequence, such legislation would not 
     constitute an item of new direct spending pursuant to the 
     conference report. This does not mean that legislation must 
     result in a net increase in spending in order to be subject 
     to this cancellation authority. A provision of a future law 
     that increases direct spending would be subject to the 
     President's cancellation authority whether or not it is 
     offset by another provision that reduces direct spending or 
     increases revenues in the same law.
       Unlike an appropriation law, which specifically designates 
     a dollar amount for a specific program, direct spending can 
     arise from a number of interactions among provisions in a new 
     law, other provisions in that same new law, and underlying 
     law. The conference report provides the President with the 
     authority to cancel the legal obligation provided by the new 
     law that results in new direct spending. The cancellation 
     authority is limited to the specific provisions in the new 
     law signed by the President that result in the legal 
     obligation to expend funds and does not extend to other 
     previously enacted laws.
       The following are examples of direct spending increases 
     that have been enacted. These examples are given to 
     illustrate how cancellation authority could apply to similar 
     items of new direct spending if included in a law to which 
     part C of title X would apply. These examples are used solely 
     for illustrative purposes and the conferees are in no way 
     commenting on the merit of any of these programs. The 
     conferees do not intend for these examples to represent all 
     instances where cancellation authority may be used.
       The 1995 Balanced Budget Act included provisions that 
     increased direct spending, but this Act was vetoed in its 
     entirety by the President using his Constitutional authority 
     and thus no provisions of that Act would be subject to the 
     cancellation authority under part C. In the Omnibus Budget 
     Reconciliation Act of 1993, the Congress enacted provisions 
     that led to a net reduction in direct spending of $78.8 
     billion over five years. While this law led to a net 
     reduction in direct spending, it included several provisions 
     that increased direct spending. More specifically, the 
     following are selected examples of provisions that increased 
     direct spending that illustrate how the President's 
     cancellation authority could be applied:

       Section 13982 increased Forest Service payments and section 
     13983 increased Bureau of Land Management (BLM) payments to 
     counties affected by the Northern Spotted Owl. These 
     provisions were estimated to increase direct spending by $43 
     million in fiscal year 1994 and $215 million over the period 
     of fiscal years, 1994-1998. The President could cancel the 
     entire amount of the legal obligation created by section 
     13982 for the Forest Service to make payments or the entire 
     amount of the legal obligation in section 13983 for BLM to 
     make payments.
       Sections 13811 through 13813 dealt with Customs overtime 
     pay, additional benefits, and user fees. Section 13812(c) 
     provided cash awards for foreign language proficiency to 
     Customs Officers that was estimated to increase direct 
     spending by $2 million in fiscal year 1994 and $10 million 
     over the period of fiscal years 1994-98. The President could 
     cancel that legal obligation for the entire amount of funding 
     provided for cash awards to Customs Officers. However, the 
     President could not reach to provisions that reduced direct 
     spending, such as the extension of Customs fees and overtime 
     reform or other provisions that did not directly deal with an 
     increase in direct spending.
       Sections 13901 through 13971 of the law made a number of 
     changes to the food stamp program that were estimated to lead 
     to a net increase indirect spending of $56 million in fiscal 
     year 1994 and $2.7 billion over the period of fiscal years 
     1994-1998. More specifically, section 13923 increased direct 
     spending by raising the asset test and indexed this asset 
     test for inflation for determining eligibility for food 
     stamps. The President would have the authority to cancel the 
     entire specific legal obligation so that the increase in the 
     asset test would have no legal force or effect. In addition, 
     the President could cancel the entire legal obligation to 
     make the inflation adjustment so that this asset test would 
     not be indexed for inflation. However, the President's 
     cancellation authority would not apply to provisions that did 
     not affect direct spending or reduced direct spending, such 
     as section 13951 that expedited claim collections and 
     adjustments to error rate calculations.

       (9) Limited Tax Benefit. In general, a ``limited tax 
     benefit'' is any provision under the Internal Revenue Code 
     that is either (1) a revenue-losing provision that provides a 
     Federal tax deduction, credit, exclusion, or preference to 
     100 or fewer beneficiaries (unless the effect of the 
     provision is that all similarly situated persons receive the 
     same treatment); or (2) a provision that provides 
     transitional relief to 10 or fewer beneficiaries.
       The number of beneficiaries affected by a provision is 
     determined by considering each fiscal year in which the 
     provision will be in effect; if the number of beneficiaries 
     falls below the requisite threshold for any one of those 
     fiscal years, the provision could be identified as a limited 
     tax benefit. For purposes of determining the number of 
     beneficiaries, certain individuals and businesses would be 
     aggregated: all businesses and associations which are related 
     (within the meaning of Internal Revenue Code sections 707(b) 
     and 1563(a)) would be treated as one beneficiary; all 
     qualified plans of a single employer would be treated as one 
     beneficiary; all holders of the same bond issue would be 
     treated as one beneficiary. However, individual shareholders 
     of a corporation, partners of a partnership, members of an 
     association, or beneficiaries of a trust would not be counted 
     as separate beneficiaries simply because a benefit is 
     provided to the respective corporation, partnership, 
     association, or trust.
       Revenue-losing Provisions that Affect 100 or Fewer 
     Beneficiaries. A provision is defined as ``revenue-losing'' 
     if it results in a reduction in federal tax revenues for any 
     one of the following two periods: (1) the first fiscal year 
     for which the provision is effective; or (2) the period of 
     the five fiscal years beginning with the first fiscal year 
     for which the provisions is effective.
       A revenue losing provision that affects 100 or fewer 
     beneficiaries is not a limited tax benefit if one of the 
     exceptions is met. First, if a provision has the effect of 
     providing all persons in the same industry or engaged in the 
     same activity with the same treatment, the item is not a 
     limited tax benefit even if there are 100 or fewer persons in 
     the affected industry. For example, a provision that sets 
     forth the depreciation treatment for equipment that is used 
     only by automobile manufacturers will not be treated as a 
     limited tax benefit solely because there are fewer than 100 
     automakers located in the United States.
       Similarly, a provision that provides the same treatment for 
     all persons who engage in research and development 
     activities, or all persons who adopt children, or all persons 
     who engage in drug testing, would not be treated as a limited 
     tax benefit simply because 100 or fewer persons are expected 
     to engage in that activity in any of the fiscal years in 
     which the provision is effective. In such circumstances, the 
     benefit is provided as an incentive to anyone who chooses to 
     engage in the activity rather than to a closed group of 
     specific taxpayers.
       A second exception applies to provisions that have the 
     effect of extending all persons owning the same type of 
     property, or issuing the same type of investment instrument, 
     the same treatment. For example, a provision that sets forth 
     the depreciation treatment for a highly-specialized type of 
     computer equipment that is owned by fewer than 100 taxpayers 
     (who are not necessarily in the same industry) would not be 
     treated as a limited tax benefit as long as any person who 
     purchases such equipment is entitled to the same treatment. 
     Similarly, a provision that affects the deductibility of 
     interest with respect to certain types of debt instruments 
     would not be a limited tax benefit, as long as any person who 
     issued that type of debt instrument receives the same 
     treatment.
       The conference report further clarifies that a provision is 
     not a limited tax benefit if the only reason the provision 
     affects different persons differently is because of (1) the 
     size or form of the business or association involved (e.g., a 
     provision that gives preferential treatment to small 
     businesses); (2) general demographic conditions affecting 
     individuals, such as their income level, marital status, 
     number of dependents, or tax return filing status; (3) the 
     amount involved (e.g., a cap based on the dollar amount of a 
     taxpayer's investment or the number of units produced by a 
     taxpayer); or (4) a generally-available election provided 
     under the Internal Revenue Code (e.g., if taxpayers who 
     engage in a certain activity are given a choice between two 
     alternative treatments, and fewer than 100 taxpayers are 
     expected to choose one of the alternatives).

                            Transition Rules

       Any Federal tax provision that provides temporary or 
     permanent transitional relief to 10 or fewer beneficiaries in 
     any fiscal year would be a limited tax benefit except to the 
     extent that the provision provides for the retention of prior 
     law for all binding contracts (or other legally enforceable 
     obligations) in existence on a date contemporaneous with 
     Congressional action specifying such a date. For example, a 
     provision in a chairman's mark which retains current law with 
     respect to binding contracts in existence on the date the 
     mark is released would not be a limited tax benefit. In 
     addition, a technical correction to previously enacted law 
     (if it is scored as having no revenue effect) would not be a 
     limited tax benefit for this purpose.

[[Page H2651]]

       This provision covering transition rules is intended to 
     address the type of special rules used extensively in prior 
     tax legislation. For example, in the Tax Reform Act of 1986 
     (the ``1986 Act''), which included a number of revenue 
     raising tax provisions, various specifically identified 
     taxpayers were provided special rules that exempted them from 
     treatment under the general revenue raising provisions. One 
     provision in the 1986 Act changed the rules for how 
     multinational corporations could allocate interest expenses 
     for foreign tax credit purposes. The provision included a 
     favorable rule for banks, and also included a special 
     exception allowing ``certain'' non-banks to use the favorable 
     bank rule. The special exception applied to any corporation 
     if ``(A) such corporation is a Delaware corporation 
     incorporated on August 20, 1959, and (B) such corporation was 
     primarily engaged in the financing of dealer inventory or 
     consumer purchases on May 29, 1985, and at all times 
     thereafter before the close of the taxable year.'' Public Law 
     99-514, 100 Stat. 2548, sec. 1215(c)(5). If 10 or fewer 
     taxpayers were expected to benefit from the special 
     exception, this provision would constitute a limited tax 
     benefit under the conference agreement definition, and would 
     be subject to the President's cancellation authority.
       The conferees submit the following two examples for what 
     may or may not be a limited tax benefit. All examples are 
     used solely for illustrative purposes and the conferees are 
     in no way commenting on their merit. Furthermore, the 
     conferees do not intend for these examples to represent all 
     instances where cancellation authority may be used.
       The Omnibus Reconciliation Act of 1993 included a provision 
     that created an income tax credit for entities that make 
     qualified cash contributions to one of 20 ``community 
     development corporations'' to be selected by the Secretary of 
     Housing and Urban Development using certain selection 
     criteria.
       Under the conference report, the Joint Committee on 
     Taxation (JCT) would estimate how many contributions would be 
     designated as eligible for the credit, based on the 
     information available to the Committee at the time the 
     legislation was being considered. If the JCT determined more 
     than 100 contributors would benefit from the credit, then the 
     provision could not be canceled. If fewer than 100 
     contributors were estimated to benefit from the provision, 
     then the provision could be canceled.
       If the conference report did not include the information 
     from JCT in the required form, then the President would have 
     the authority to make the determination.
       H.R. 831 (enacted in the 104th Congress) included a 
     provision to restore a prior-deduction for 25 percent of the 
     amount paid for health insurance for self-employed 
     individuals and the individuals' spouses. The 25 percent 
     deduction had expired after December 31, 1993. H.R. 831 
     restored the 25-percent deduction for 1994 and increased the 
     deduction to 30 percent for taxable years beginning after 
     1994.
       Under the conference report, this provision would not be a 
     limited tax benefit because it applies to all self-employed 
     individuals who purchase their own health insurance, and thus 
     this provision would benefit more than 100 individuals.
       (10) OMB. The term ``OMB'' means the Director of the Office 
     of Management and Budget.
     Sec. 1027. Identification of limited tax benefits
       The conferees intend to limit the authority delegated to 
     the President by Congress under section 1021 with respect to 
     the application of that authority to limited tax benefits. A 
     limited tax benefit is a carefully delineated provision under 
     the definition in section 1026(9). This section ensures the 
     proper application of this definition, and hence the 
     President's cancellation authority, to any tax provision. The 
     conference report provides the conferees on any revenue or 
     reconciliation measure with the opportunity to identify for 
     the President what may constitute a limited tax benefit, 
     under the procedures in this section, in each revenue or 
     reconciliation law.
       The conference report states that the JCT shall examine any 
     revenue or reconciliation bill or joint resolution (that 
     amends the Internal Revenue Code) prior to its filing by a 
     committee of conference in order to determine whether or not 
     that bill or joint resolution contains any limited tax 
     benefits under the definition in section 1026(9). The 
     statement from the JCT shall state that the bill either 
     contains no limited tax benefits or contains limited tax 
     benefits.
       In the case of a revenue or reconciliation bill or joint 
     resolution containing one or more limited tax benefits the 
     statement shall list each of those provisions. In the case of 
     a revenue or reconciliation bill or joint resolution 
     containing no limited tax benefits, the statement shall state 
     that determination. This statement shall be submitted to the 
     conference committee on such a bill or joint resolution and 
     shall be made available by the JCT to any Member of Congress 
     upon request.
       If the conference report includes the information from the 
     JCT and that information identifies provisions in the 
     conference report which quality as limited tax benefits under 
     the definition in section 1026(9), then the President may 
     cancel those, and only those, items as identified. On the 
     other hand, if such a conference report contains a statement 
     from the JCT stating that there are no provisions in the 
     conference report qualifying under the definition in section 
     1026(9) as a limited tax benefit, then the President may not 
     exercise the cancellation authority under section 1021(a)(3) 
     because Congress has provided that no tax provisions are 
     eligible for cancellation under this authority.
       The conference report specifies how the information 
     provided by JCT may be included in the bill. At the end of 
     the bill, the permitted separate section should read as 
     follows: ``Section 1021(a) of the Congressional Budget and 
     Impoundment Control Act of 1974 shall ________ apply to 
     ________'', with the blank spaces being filled in with the 
     appropriate information. In the case in which the JCT 
     identifies limited tax benefits in a conference report, the 
     word ``only'' would appear in the first blank and a list of 
     all of the provisions of the bill or joint resolution 
     identified by the JCT in that Committee's statement shall 
     appear in the second blank. In the case in which the JCT 
     declares that there are no limited tax benefits in the 
     conference report, the word ``not'' would appear in the first 
     blank and the phrase ``any provision of this Act'' would 
     appear in the second blank.
       The conferees intend that the decision to include the 
     information provided by JCT in the bill or joint resolution 
     that amends the Internal Revenue Code shall be left to the 
     discretion of the appropriate conferees. With respect to any 
     potential violations or any rules relating to the scope of a 
     conference, the conferees intend that the inclusion of such 
     an identification shall not constitute a violation of any 
     rules of the House of Representatives or the Senate, 
     respectively.
       In the event the legislation amending the Internal Revenue 
     Code is signed into law that does not contain the information 
     provided by JCT, any identification of what constitutes a 
     limited tax benefit under the definition in section 1026(9) 
     may be made by the President. If any provision qualifies as a 
     limited tax benefit (within the confines of the definition of 
     such a benefit in section 1026(9)) and the President 
     identifies such a benefit, the President may exercise the 
     cancellation authority under section 1021(a)(3).
     Section 3. Judicial review
       Any Member of Congress or other adversely affected 
     individual is given standing to seek declaratory judgement 
     and injunctive relief on the ground that any provision of 
     this law violates the Constitution. Suit must be brought in 
     the United States District Court for the District of 
     Columbia. A copy of any complaint brought under this Act must 
     be promptly filed with the Secretary of the Senate and Clerk 
     of the House, and each House reserves the right to intervene 
     in any action according to its own internal rules.
       Appeals from the District Court must be filed within 10 
     calendar days after an order is entered and may be taken 
     directly to the Supreme Court of the United States. A period 
     of 30 calendar days is provided for filing a jurisdictional 
     statement with the Supreme Court, and the conference report 
     prohibits any single Justice from issuing a stay of the 
     District Court's order. Both the District Court and the 
     Supreme Court are directed to advance on the docket and 
     expedite to the greatest extent possible any action brought 
     with regard to the constitutionality of this law.
     Section 4. Conforming amendments
       Section 4 makes three conforming amendments. First, this 
     section amends the short title of the Congressional Budget 
     and Impoundment Control Act of 1974 to clarify that the short 
     title of Impoundment Control Act shall refer to parts A and B 
     of title X. The amendment further specifies that part C of 
     title X shall be cited as the Line Item Veto Act of 1996.
       Second, section 4 makes a conforming amendment to the table 
     of contents in the Congressional Budget and Impoundment 
     Control Act to include a listing of the contents of part C, 
     referencing sections 1021 through 1027.
       Third, section 4 amends section 940(a) of the Congressional 
     Budget Act of 1974 to clarify that the provisions of sections 
     1025 and 1027, relating to Congressional consideration of a 
     disapproval bill and identification of limited tax benefits, 
     in an exercise of the rulemaking powers of the House of 
     Representatives and the Senate. As a result, sections 1025 
     and 1027 are considered part of the rules of each House, 
     respectively, and it supersedes other rules only to the 
     extent that it is inconsistent with those rules. This is also 
     a recognition of the constitutional right of both Houses to 
     change these rules at any time, in any manner and to the same 
     extent as in the case of any other rule of each House.
     Section 5. Effective dates
       Section 5 provides an effective date of the earlier of (1) 
     the day after the enactment of an Act entitled ``An Act to 
     provide for a seven-year plan for deficit reduction and 
     achieve a balanced Federal budget.''; or (2) January 1, 1997. 
     It provides that this part shall sunset January 1, 2005.
     Bill Clinger,
     Gerald Solomon,
     Jim Bunning,
     Porter Goss,
     Peter Blute,
                                Managers on the Part of the House.

     Ted Stevens,
     Bill Roth,
     Fred Thompson,
     Thad Cochran,
     John McCain,
     Pete V. Domenici,

[[Page H2652]]

     Chuck Grassley,
     Don Nickles,
     Phil Gramm,
     Dan Coats,
     Jim Exon,
     Managers on the Part of the Senate.

                          ____________________