[Congressional Record Volume 143, Number 137 (Monday, October 6, 1997)]
[Senate]
[Pages S10441-S10442]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                       CLARIFICATION LEGISLATION

                                 ______
                                 

         SMITH OF NEW HAMPSHIRE (AND GREGG) AMENDMENT NO. 1300

  (Ordered referred to the Committee on Governmental Affairs.)
  Mr. SMITH of New Hampshire (for himself and Mr. Gregg) submitted an 
amendment intended to be proposed by them to the bill (H.R. 1953) to 
clarify State authority to tax compensation paid to certain employees; 
as follows:

       On page 2, strike lines 1 through 20, and insert the 
     following:

     SECTION 1. LIMITATION ON STATE AUTHORITY TO TAX COMPENSATION 
                   PAID TO INDIVIDUALS PERFORMING SERVICES AT 
                   CERTAIN FEDERAL FACILITIES.

       (a) In General.--Chapter 4 of title 4, United States Code, 
     as amended by is amended by adding at the end the following:

     ``Sec. 115. Limitation on State authority to tax compensation 
       paid to individuals performing services at certain Federal 
       facilities

       ``Pay and compensation paid to an individual for personal 
     services at Fort Campbell, Kentucky, or the Portsmouth, New 
     Hampshire Naval Shipyard, shall be subject to taxation by the 
     State or any political subdivision thereof of which such 
     employee is a resident.''.
       (b) Conforming Amendment.--The table of sections for 
     chapter 4 of title 4, United States Code, is amended by 
     adding at the end the following:
``115. Limitation on State authority to tax compensation paid to 
              individuals performing services at certain Federal 
              facilities.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to pay and compensation paid after the date of 
     the enactment of this Act.

  Mr. SMITH of New Hampshire. Mr. President, on behalf of Senator Gregg 
and myself, I submit an amendment. Mr. President, this is a very simple 
and straightforward amendment which has been drafted to address a very 
unique situation concerning State tax liability for persons performing 
services at the Portsmouth, New Hampshire Naval Shipyard. This shipyard 
is a Federal facility located on a group of small islands in the inner 
Portsmouth Harbor and Piscataqua River, which forms the border between 
the States of New Hampshire and Maine.
  The amendment we are offering will make pay and compensation of 
Portsmouth Naval Shipyard employees subject only to the State taxation 
laws of the State in which the employees reside.
  On July 28, 1997, the House of Representatives passed H.R. 1953, a 
bill which likewise makes State taxing authority subject to an 
employee's State of residence with respect to three other Federal 
facilities located on State borders.
  Again, Mr. President, these are very unique situations where we have 
a serious issue of tax fairness of Federal employees at these 
particular Federal facilities on the border between States. It is 
appropriate for the Congress, in these instances, to use its power to 
clarify taxing authority especially where the States involved have been 
unable to work out an equitable tax reciprocity agreement on their own. 
Moreover, I would note that in this instance, there is disagreement 
between New Hampshire and Maine on whether the border location of the 
shipyard puts it geographically in New Hampshire or Maine. This is all 
the more reason for Congress to seek to help these Federal employees 
caught in the middle of a border dispute.
  As a Member of the Senate Committee on Governmental Affairs, I look 
forward to working with Chairman Thompson and my other colleagues on 
the committee in the next few weeks to schedule action on both the 
House bill and the amendment Senator Gregg and I are offering to it 
today.
  Finally, Mr. President, I would note that when H.R. 1953 passed the 
House a few weeks back, some of my colleagues there noted that it took 
nearly 10 years to correct the tax inequity for the Federal employees 
at the three Federal facilities on State borders referenced in

[[Page S10442]]

that bill. Let me say that I first took up the unfair tax situation 
faced by my New Hampshire constituents at the Portsmouth Naval Shipyard 
nearly 10 years ago, and introduced legislation in the years that 
followed which, unfortunately, never came to pass. However, my 
colleagues have told me a congressional hearing might be the best way 
to make our case. That is why I look forward to Senate consideration of 
this amendment in committee. When the facts are carefully reviewed, I 
think my colleagues will realize that my constituents have waited too 
long already for resolution of the unfair tax burden they face by 
virtue of their employment at this particular Federal facility. My 
amendment with Senator Gregg to H.R. 1953 gives the Congress another 
opportunity to address this situation, so it is my hope we can now 
rectify this situation without further delay.

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