[Congressional Record Volume 144, Number 85 (Thursday, June 25, 1998)]
[House]
[Pages H5352-H5368]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




CONFERENCE REPORT ON H.R. 2676, INTERNAL REVENUE SERVICE RESTRUCTURING 
                         AND REFORM ACT OF 1998

  Mr. ARCHER. Mr. Speaker, pursuant to House Resolution 490, I call up 
the conference report on the bill (H.R. 2676) to amend the Internal 
Revenue Code of 1986 to restructure and reform the Internal Revenue 
Service, and for other purposes, and ask for its immediate 
consideration in the House.

[[Page H5353]]

  The Clerk read the title of the bill.
  The SPEAKER pro tempore (Mr. Pease). Pursuant to House Resolution 
490, the conference report is considered read.
  (For conference report and statement, see proceedings of the House of 
Wednesday, June 24, 1998, at page H5100.)
  The SPEAKER pro tempore. The gentleman from Texas (Mr. Archer) and 
the gentleman from New York (Mr. Rangel) each will control 30 minutes.
  The Chair recognizes the gentleman from Texas (Mr. Archer).


                             General Leave

  Mr. ARCHER. Mr. Speaker, I ask unanimous consent that all Members 
have 5 legislative days in which to revise and extend their remarks and 
include extraneous material on the conference report on H.R. 2676.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Texas?
  There was no objection.

                              {time}  1545

  Mr. ARCHER. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, today is a great day for the American taxpayer. As 
families gather together next week to celebrate the Fourth of July, a 
day that recognizes the independence of all Americans, they can be 
proud to know that this Congress has secured for them greater 
independence from the excesses of the IRS than have ever been granted 
since 1952.
  The plan we vote on today gives David the taxpayer an arsenal of 
powerful slingshots to use against Goliath the IRS. Reform of the IRS 
has been long overdue and I am delighted that Congress is passing 
legislation that puts the legitimate rights of the taxpayer first. Our 
plan shifts the burden of proof off the taxpayer and onto the IRS. No 
longer will taxpayers have to prove in court their innocence but, 
rather, the IRS will have to prove liability. It gives taxpayers 74 new 
rights and protections, including protections for innocent spouses, 
usually women, and it creates an independent oversight board to get the 
IRS under control.
  Plus, we reduce the complexity that 16 million Americans endured when 
they filled out their difficult Schedule D IRS capital gains tax forms. 
By changing the holding period from 18 months to 12 months, we bring 
greater simplicity to the lives of taxpayers.
  Mr. Speaker, as important as this bill is to more than 100 million 
Americans who dutifully fill out their tax forms every year, this bill 
is also about our values and our priorities. It is about right and it 
is about wrong. It is about putting the taxpayer first and the IRS 
second. It has been the other way around for entirely too long.
  What we do today is very much in the spirit of July 4. Today we 
enhance the power of the individual and we reduce the power of an 
abusive arm of the government that intrudes into the individual lives 
of each of us. By dissolving the bonds which allowed the IRS to seize 
homes and freeze bank accounts, we serve taxpayers whose life, liberty 
and pursuit of happiness had been infringed. We remind a free Nation 
that earnings belong to those who make them, not to a government with 
the power to take them.
  This bill strikes the right balance between granting taxpayers the 
freedom to pay their taxes without abuse while providing the tools 
necessary to fund the government. I am very proud of this Congress for 
today's action. We are indeed leading the Nation in the right 
direction.
  I am proud to belong to a Republican Congress that has balanced the 
budget, cut taxes, fixed welfare and now we have protected taxpayers 
from IRS abuses. I am also proud to be a part of a Republican Congress 
that has proved that it can work on a bipartisan basis across the aisle 
to bring this wonderful bill to the American people. If there was ever 
a done-something Congress, this is it.
  Mr. Speaker, I reserve the balance of my time.
  Mr. RANGEL. Mr. Speaker, I yield myself such time as I may consume. 
Let me thank the gentleman from Texas (Mr. Archer), my chairman, for 
allowing me to be a part of his Republican Congress, and to laud him 
for bringing about this Republican surplus, and also the Republicans 
for bringing about this great economic boom which we enjoy. God knows 
what we would have done without you, but I hope next year we will find 
out.
  I do have to agree on this bill that the chairman of the committee as 
well as the Senate have shown an extreme bipartisan effort to bring 
about changes that were needed in the Internal Revenue Service. I 
really enjoyed working with the chairman and the Senate, because we got 
away from the rhetoric of pulling out the code by the roots, beating up 
on the dedicated public servants, and started working with the 
commission which the gentleman from Pennsylvania (Mr. Coyne) of the 
Committee on Ways and Means and the gentleman from Ohio (Mr. Portman) 
had worked on, working with the administration and the other body to 
see what we could do to bring about change, and through hard work and 
mutual respect, we were able to do it. Not only do we bring in 
professionals to provide oversight, have additional management 
flexibility, but we expanded electronic tax filing and worked with the 
administration to make certain that the oversight board had 
representation not only from the private sector but from the employees.
  Taxpayers' rights were protected. Innocent spouse relief was given. 
And even though there are some provisions in the bill that have 
absolutely nothing to do with reform, these were the perks and 
privileges of the majority and we thought that the President should 
support the entire bill, as do most of the people that really believe 
that the taxpayer has been and should be entitled to more protection.
  We will have a motion to recommit perhaps that could perfect the bill 
and make it all that it could be, but I would publicly like to thank 
the chairman of the full Committee on Ways and Means as well as the 
leadership in the other body for coming up with a bill that would 
improve the protections for taxpayers and at the same time be a piece 
of legislation that can be supported by the administration and should 
make Members of this House and this body proud.
  Mr. Speaker, I reserve the balance of my time.
  Mr. ARCHER. Mr. Speaker, I yield 5\1/2\ minutes to the gentleman from 
Ohio (Mr. Portman), a gentleman to whom all of us owe an enormous debt 
of gratitude, because he was the cochairman of the restructuring 
commission that spent 1 year evaluating the IRS and bringing to us a 
recommendation which is basically intact as a result of our efforts.
  Mr. PORTMAN. Mr. Speaker, I thank the gentleman for yielding me this 
time, for those kind words and for all his leadership on this 
legislation.
  It was exactly one year ago today that the National Commission on 
Restructuring the Internal Revenue Service announced its 
recommendations after a year-long audit of the IRS. That commission has 
been referred to by the gentleman from New York and by the chairman. It 
was cochaired by Senator Bob Kerrey of Nebraska and myself. What we did 
was to recommend the first comprehensive changes to the IRS since 1952. 
When we released our report, again a year ago today, to fundamentally 
reform the IRS, change the way it does business and protect taxpayers, 
I cannot say that everybody in Washington was hoping that it would end 
up here on the floor. In fact there were many who probably hoped it 
would gather dust on a shelf, including some in the Clinton 
administration. At that time there was opposition from the Treasury 
Department over the degree to which we were reforming the IRS.
  The next step in that process was legislation. The gentleman from 
Maryland (Mr. Cardin) and I introduced House legislation, and Senators 
Kerrey and Grassley introduced legislation in the Senate that was based 
on those recommendations. And then it was the chairman who prioritized 
it, put the Committee on Ways and Means at the front of this effort, 
and moved the legislation so expeditiously. Again this was before the 
legislation was as widely acclaimed as it will be today, I think, as we 
have listened to Members speak on the floor.
  Mr. Speaker, Americans are grateful for the leadership the gentleman 
from Texas showed and that the committee showed on a bipartisan basis. 
This is the agency that directly impacts the lives of more Americans 
than any

[[Page H5354]]

other agency of government. Of course we owe it to the taxpayers to 
pass this bill today, and I am very confident that we will.
  But let me say something else. I think that once we have finished our 
voting today and we are done congratulating ourselves over this very 
good legislation this afternoon, we then have to turn our focus to the 
real work. We owe it to the taxpayers to ensure that the provisions in 
this legislation are actually implemented, and we owe it to them 
because we have to ensure that we do have a fundamental cultural change 
at the IRS.
  Members have heard about some of the bill's key provisions from the 
gentleman from Texas and the gentleman from New York. Let me just say 
it is a very comprehensive approach. It contains a wide range of 
reforms. When you take those reforms as a whole, it will transform the 
IRS from an antiquated sort of an enforcement mentality to a modern, 
more taxpayer service-oriented organization. It will refocus the 
mission of the IRS to provide respectful and efficient service to the 
taxpayer.
  It does so in a number of different ways. One is by creating this new 
oversight board that the gentleman from New York mentioned. This is 
unprecedented in government. We will have nine members of the board, 
mostly from the private sector, who will bring needed expertise and 
customer service, information technology, and how to transform a large 
service organization. They will be there to ensure that the IRS will be 
more accountable to the taxpayer and be more accountable over a long 
period of time.
  It does so by leveling the playing field between the taxpayers and 
the IRS. It has over 50 new taxpayer rights. These include shifting the 
burden of proof from the taxpayer to the IRS in court cases, providing 
long overdue relief for innocent spouses, most of whom are women who 
are unfairly targeted today by the IRS; it creates new due process 
rights for taxpayers, and even creates the right to be compensated for 
overzealous IRS actions.
  Very importantly, the legislation also reforms the IRS management 
structure to increase accountability and performance. It gives the IRS 
Commissioner new personnel flexibilities to drive change through the 
agency, such as the ability to bring in experts from the private sector 
at a high level in the IRS, the ability to reward IRS employees for 
taxpayer service, and fire employees who provide inferior service. It 
also increases the accountability of IRS employees and managers in the 
collection area to stop the tactics of intimidation.
  Finally, and significantly, let me just emphasize that the bill will 
increase congressional accountability for the IRS. That is a major 
victory for those of us in this body, in the House, who believe that it 
is not enough just to point the finger at the other end of Pennsylvania 
Avenue, that in fact much of the blame resides right here in the 
Capitol. As a result of our work, there are three significant 
congressional accountability provisions.
  First, we streamline congressional oversight, requiring the seven 
committees to come together and coordinate their activities, including 
one mandated meeting a year to review the IRS budget, review the IRS 
strategic plan, and send a clear and consistent message from Capitol 
Hill to the IRS.
  Second, we get the IRS at the table as the committees are working on 
tax legislation to ensure that on a more consistent basis we get 
expertise from the field to be sure that tax law changes are going to 
actually work to help the taxpayer and can work within the IRS system, 
what new forms or schedules will be required, how is that going to 
affect the IRS, how is that going to affect individuals.
  Finally, and perhaps most significantly, it requires Congress to 
conduct a new taxpayer complexity analysis of every new piece of tax 
legislation that reaches the House or Senate floor. It will work kind 
of like the budget scoring process. We will now be forced to ``score'' 
tax legislation to see what its complexity is for the taxpayer and for 
the IRS. And in the House we put teeth in that with a point of order to 
make sure that it actually happens. This will force us to consider the 
implications of what might otherwise be great sounding tax legislation.
  Again, for the first time ever now we will have incentives in place 
that actually encourage us to simplify rather than all the incentives 
that are out there right now for more complexity. Anybody who looked at 
this year's Schedule D for capital gains knows what we are talking 
about.
  There are a lot of other provisions in this bill. We do not have time 
to mention them all. Suffice it to say the overall package will ensure 
that the IRS will now work for the taxpayer rather than the other way 
around.
  Let me close with one final point, if I might. On a bipartisan basis 
within a short period of time, this Congress for the first time in 46 
years fundamentally restructured the second biggest agency in 
government to make it far more responsive to taxpayers. That is in 
large measure because of the leadership of this Congress. Newt Gingrich 
took personal interest in this, talked to the Commission, supported it, 
expedited it. It is also, of course, the result of the hard work and 
dedication of the Restructuring Commission, its staff; the Committees 
on Ways and Means and Finance. Barbara Pate of my own staff put many 
hours into this project. I think the process worked, though, because we 
took partisanship out and brought expertise in. It just might be a 
model for other challenging issues we face. I again commend the 
chairman for his work.
  Mr. Speaker, I would like to take a moment to thank the staff of the 
National Commission on Restructuring the Internet Revenue Service for 
important work on this legislation. We would not have the strong reform 
legislation before us today without the hard work and patience of these 
individuals. They staffed dozens of public hearings, 3 town-hall 
meetings around the country and hundreds of hours of closed-door 
sessions with Restructuring Commission members. They also interviewed 
hundreds of present and former IRS officials, representatives of key 
stakeholder groups, and average taxpayers. The product of their work is 
the Commission's final report, ``A Vision for a New IRS,'' which served 
as the foundation of the legislation we have before us today. Congress, 
and the taxpaying public, thank them for their fine efforts.
  The Commission staff members were: Jeffery Trinca, Chief of Staff; 
Anita Horn, Deputy Chief of Staff; Douglas Shulman, Senior Policy 
Advisor and Chief of Staff from June to September of 1997; Charles 
Lacijan, Senior Policy Advisor; Dean Zerbe, Senior Policy Advisor; 
Armando Gomez, Chief Counsel; George Guttman, Counsel; Lisa McHenry, 
Director of Communications and Research; James Dennis, Counsel; John 
Jungers, Research Assistant; Andrew Siracuse, Research Assistant; 
Damien McAndrews, Research Assistant; Margie Knowles, Office Manager; 
and Janise Haman, Secretary.
  Mr. RANGEL. Mr. Speaker, I yield 3 minutes to the gentleman from 
Maryland (Mr. Cardin) who worked very hard in making this reform 
possible.
  Mr. CARDIN. Mr. Speaker, I thank the gentleman from New York (Mr. 
Rangel) for yielding me this time. I rise in support of the conference 
report on H.R. 2676.
  Mr. Speaker, more than a year ago the gentleman from Ohio (Mr. 
Portman) came over to meet with me about the work that he was doing as 
chairman of the National Commission on Restructuring the Internal 
Revenue Service. It led to the introduction of H.R. 2292. The gentleman 
from Ohio impressed upon me his commitment to restructure the IRS and 
have legislation on this floor in a bipartisan manner.
  Mr. Speaker, I want to congratulate and compliment the gentleman from 
Ohio for his professionalism and the way that he acted in such a 
bipartisan manner. As a result, I agree with the gentleman from Texas 
(Mr. Archer) as to why we have such an outstanding bill before us. The 
gentleman from Ohio deserves the thanks of all of us. To the gentleman 
from Texas and the Committee on Ways and Means, I want to congratulate 
them for the work that our committee did. It was outstanding in 
considering this legislation and moving it forward. To the gentleman 
from New York (Mr. Rangel), the ranking member, for his advice and 
leadership during this process, I also want to extend congratulations.

                              {time}  1600

  Senior officials of the Clinton administration were extremely helpful 
to us, including Secretary Rubin who has already provided strong 
leadership in reforming the Internal Revenue Service.

[[Page H5355]]

  And finally, Mr. Speaker, I think we should all thank the hardworking 
Federal employees at the IRS who have been critical to this reform 
effort. Yes, we have heard stories of abusive behavior by a handful of 
rogue IRS agents, but we all understand that the vast majority of the 
rank and file IRS workers do a very difficult job and they deserve our 
thanks.
  This conference report includes some very strong new provisions on 
taxpayers' rights and taxpayer protection provisions, and I am pleased 
that we have improved the innocent spouse provisions, unfair imposition 
on tax liability. We shift the burden of proof in certain court-
litigated cases back to the IRS, where it should be, and we provide 
relief for penalties and interest for many taxpayers who deserve that 
help.
  But the success of IRS reform will not be the passage of this bill, 
but the implementation of the bill. We have set the stage where we can 
really improve the structure of our tax-collecting agency. Commissioner 
Rossotti has already started to make some of these changes but he 
needed this bill which establishes the oversight board that will work 
with Commissioner Rossotti to carry out these badly needed reforms.
  As the gentleman from Ohio (Mr. Portman) pointed out, it is not only 
the oversight board, but it is also providing for Congress to take a 
more responsible oversight attitude on looking at the IRS and to pass 
bills that make sense from tax simplification so the IRS can do its 
job.
  Mr. Speaker, today we pass the IRS reform bill. I am very pleased 
that we have been able to do it. But that should not be the end of our 
interests in the Tax Code. We all have responsibility to make the Tax 
Code more simple, more efficient and more fair. I hope that the 
leadership of this House will move forward with tax reform as it 
relates to the Tax Code itself. I look forward to the enactment of this 
bill and working with the other Members on reforming our Tax Code.
  Mr. ARCHER. Mr. Speaker, I yield 2 minutes to the gentleman from 
Pennsylvania (Mr. English) a respected member of the Committee on Ways 
and Means.
  Mr. ENGLISH of Pennsylvania. Mr. Speaker, I thank the gentleman from 
Texas (Mr. Archer) for yielding this time to me.
  Today the House completes an ambitious project it only undertook last 
year, the first comprehensive overhaul of the Internal Revenue Service 
since Harry Truman served in the White House.
  I rise in strong support of the conference report on the IRS 
Restructuring and Reform Act. It will protect taxpayers by increasing 
oversight of the agency, hold employees of the IRS accountable for 
their actions and create a new arsenal of taxpayer protections. These 
reforms go a long way toward restoring the basic rights of all 
Americans who deal with the IRS.
  My colleague, the gentleman from Ohio (Mr. Portman) who more than any 
other Member of this Chamber is responsible for this package has 
detailed some of its provisions. The major ones: The burden of proof is 
shifted; an independent board is created to oversee IRS policies; an 
innocent spouse provision is added; and new incentives are created to 
encourage the filing electronically of tax returns which will save 
millions of dollars for the taxpayers.
  I also want to note there is an important unrelated truth-in-labeling 
provision included in this conference report, an important trade 
provision that will substitute the term ``normal trade relations'' in 
place of the currently used and much misunderstood ``most-favored-
nation'' status with regard to trade. This will go far to improve the 
accuracy and tenor of our debates on trade issues.
  Mr. Speaker, this is long-awaited, bipartisan legislation that should 
be swiftly acted on by both the House and Senate and hopefully receive 
the President's signature. I rise in strong support of this 
legislation.
  Mr. RANGEL. Mr. Speaker, I yield 2\1/2\ minutes to the gentlewoman 
from Florida (Mrs. Thurman).
  Mrs. THURMAN. Mr. Speaker, I thank the conference members because I 
think they have done a relatively good job. As my colleagues know, 
quite frankly I wish this would have passed earlier in the year where 
people would have had an opportunity to have these changes available to 
them today, and I am going to support the conference report because it 
does include IRS reform and IRS responsibility and because I like the 
taxpayer protection provisions.
  Earlier this year I attended a hearing with Senator Bob Graham at 
which Florida taxpayers talked about their experiences with the IRS. I 
heard from women who had no idea of their spouse's tax irregularities 
but who were being penalized by the IRS. I also heard about penalties 
imposed for small underpayments that continued even after offers were 
made to the IRS. Such administrative inflexibility contributes to the 
distrust of IRS and our tax system. Fortunately the conference report 
makes changes that will help these taxpayers.
  Mr. Speaker, the innocent spouse relief is long overdue. The 
suspension of interest and penalty is a small step in the right 
direction.
  In addition, this legislation will make the IRS more efficient by 
improving oversight and imposing responsibility on employees for 
improper actions. The IRS must treat the American people with respect, 
and this bill will ensure that IRS employees understand that fact.
  But as occurs too often here, politics got the benefit of policy for 
6 months. Good legislation was delayed. Now we have a bill very similar 
to what the House approved in November with a few twists. We have a new 
provision which includes tax relief to employers who provide meals to 
more than half of their employees on employers' premises. I wish I had 
known about that provision before the conference completed its work. I 
have no problem with helping workers who have to eat where they work. 
Perhaps this provision will also benefit some hospitality workers in 
Florida.
  But let me tell my colleagues about a letter that I received from the 
wife of a trucker in my district. He was on the road nearly 300 days 
last year. The law allows him to deduct only 50 percent of the cost of 
his on-road meals. His wife wants truckers to deduct 100 percent of 
their on-road meals. That makes sense to me, and I think the committee 
should consider the needs of these struggling taxpayers, too.
  But despite the politics that delayed the policy, I think the 
legislation helps American taxpayers, and I urge the House to approve 
it.
  Mr. ARCHER. Mr. Speaker, I yield 2 minutes to the gentleman from 
Arizona (Mr. Hayworth), a respected member of the Committee on Ways and 
Means.
  Mr. HAYWORTH. Mr. Speaker, I thank the gentleman from Texas (Mr. 
Archer) for yielding this time to me, and, Mr. Speaker, I come to the 
well in strong support of this conference report and the work performed 
by both Chambers on this hill.
  Mr. Speaker, there are many provisions that have been outlined, but 
in addition to the provisions, we can put faces and names on those 
families directly affected, sadly, by what must be termed as IRS abuse.
  I think of a man from Arizona, Bob Breauxcamp, and the story of his 
granddad who inadvertently sent a tax payment of $7,000 to the IRS when 
he only owed $700, how he was aged and infirmed, and upon his death 
then the IRS sought estate taxes from his daughter, Bob's mom, and she 
discovered the overpayment; how the IRS said, no, that money will not 
go back to his estate and how that overpayment, through an oversight in 
law and, yes, I dare say, abuse by the IRS was never returned to the 
Breauxcamp family.
  Mr. Speaker, today with passage of this conference report, we provide 
for a wide array of reforms. But to the aged and the infirm, to those 
who have been taken advantage of in this process, we become their 
advocates. That is another key provision we should support.
  As mentioned earlier, the innocent spouse provision is vitally 
important and most fundamental to our notion of fairness in this 
country, the basic premise of American jurisprudence which says that 
the accused is entitled to the presumption of innocence. What was 
deprived in Tax Court is restored henceforth with passage of this 
legislation. The burden of proof will rest on the government instead of 
the taxpayer.

[[Page H5356]]

  I urge passage of the conference report.
  Mr. RANGEL. Mr. Speaker, I yield 3 minutes to the gentleman from 
Massachusetts (Mr. Neal) a member of the Committee on Ways and Means.
  Mr. NEAL of Massachusetts. Mr. Speaker, I rise in support of this 
conference agreement on the Internal Revenue Restructuring and Reform 
Act of 1998.
  There is no question that this legislation will provide better 
oversight, greater continuity of leadership and improved access to 
expert advice from the private sector, and additional management 
flexibility. There has long been agreement of the need for fundamental 
reform of the IRS, and I commend the work done by the National 
Commission on Restructuring. I supported the majority of 
recommendations made by the National Commission, and I am pleased that 
further improvements have been made to this initial legislation 
introduced by the gentleman from Ohio (Mr. Portman) and the gentleman 
from Maryland (Mr. Cardin). Mr. Portman and Mr. Cardin did work 
diligently to modify the original bill to reflect the concerns of many 
of us on the Committee on Ways and Means.
  Mr. Speaker, I believe that the Constitution requires that the IRS 
commissioner be appointed, hired and, if necessary, fired by the 
President. The legislation before us today keeps the President 
ultimately responsible for the actions of the IRS and the decisions of 
its commissioner, while the Department of Treasury would still have a 
role in the oversight and management of IRS.
  A key component of the bill is a section referred to as Taxpayer 
Rights III. These provisions will provide new protections and 
assistance to millions of taxpayers.
  During passage of the bill I was specifically concerned about two 
additional provisions. First I was concerned about the authority given 
to the newly-created IRS Oversight Board. This board has the authority 
to review and approve strategic plans at the IRS and review and approve 
the commissioner's plans for major reorganization.
  The bill was not clear on what happens to our tax administration 
system under these new authorities if a consensus is not reached among 
board members or the IRS commissioner and Treasury Secretary in 
disagreement with views of private sector individuals. I am pleased 
that the conference has addressed this issue.
  Second, I am concerned about the provision in the shift of the burden 
of proof which should not be treated lightly. The conference agreement 
shifts the burden of proof to the Secretary of Treasury in any court 
proceeding with respect to a factual issue if the taxpayer enters 
credible evidence with respect to the factual issue relevant to 
ascertaining the taxpayer's liability for income estate and gift taxes.
  Under current law, a taxpayer is generally required to maintain 
records substantiating the calculation of his or her income tax 
liability. In civil matters, the burden is placed on the taxpayer 
because the taxpayer controls the facts and the record.
  Now this shift in the burden of proof could have unintended 
consequences, and we should acknowledge that today. It could result in 
the IRS conducting more intrusive examinations and the IRS issuing more 
subpoenas and summonses to third parties in search of evidence, and I 
am concerned that this provision would induce taxpayers not to keep 
records. But I am pleased that the conference agreement requires a 
taxpayer to keep records in order to be eligible for this provision.
  Our tax system is voluntary, and we have an overall compliance rate 
of 85 percent. The individual compliance rate is 97 percent, and we 
should never lose sight of those respective achievements.
  Mr. ARCHER. Mr. Speaker, I yield 5 minutes to the gentlewoman from 
Connecticut (Mrs. Johnson) the chairman of the Subcommittee on 
Oversight of the Committee on Ways and Means, who has also done a 
tremendous amount of work in building this package.
  Mrs. JOHNSON of Connecticut. Mr. Speaker, first I want to 
congratulate the gentleman from Texas (Mr. Archer) the chairman of the 
Committee on Ways and Means for not only his long investment and 
commitment to this bill, but the depth of knowledge that he has of it, 
and of the issues addressed in it and of his leadership as a conferee 
negotiating a bill that will be good for the taxpayers and a credit to 
this Congress.

                              {time}  1615

  Today is a great day for taxpayers. With enactment of the IRS 
Restructuring Reform Act, we are going to fundamentally change the 
culture of the IRS, and not a moment too soon.
  Earlier this year, I asked my constituents to evaluate the 
performance of the IRS in a survey of taxpayers in the 6th 
Congressional District. Fifty-four percent of the respondents gave the 
agency a D or an F. That is unacceptable. It is appalling. It is unfair 
to taxpayers, to the honest, hard-working people of America who support 
their government. But it is equally unfair to the conscientious men and 
women who work for the IRS, that the unchecked, irresponsible actions 
of a few have undermined public confidence in their work.
  We need stronger management, stronger congressional oversight and 
stronger taxpayer rights. The measure before us today provides all 
three. The IRS oversight board created by this bill will bring private 
sector knowledge into the management of the IRS, so the IRS can begin 
the 21st century as a state-of-the-art, customer-oriented service 
organization. Infusing private sector know-how into the technology 
development and the management of the IRS will create a model for 
revitalizing our government agencies.
  But reform of the IRS requires reform of the congressional oversight 
process. At the moment, no fewer than six committees, not to mention 
their subcommittees, on both sides of the Capitol, tug the IRS in 
different and often conflicting directions. This bill takes an 
important first step toward streamlining Congressional oversight. It 
provides for annual joint hearings by Republicans and Democrats from 
the House and Senate tax-writing, appropriations and government 
oversight committees. The hearings will focus on the IRS strategic 
plan, budget and performance. If we expect the IRS to change its ways, 
we in Congress must do no less.
  The measure builds on the protections provided in the Taxpayer Bill 
of Rights II developed by the Committee on Ways and Means Subcommittee 
on Oversight and enacted by the last Congress.
  I am especially pleased that the taxpayer rights provisions will 
strengthen the protections for innocent spouses. Of all the horror 
stories that have surfaced in recent years, none have been more 
heartbreaking than those involving innocent spouses, taxpayers who in 
many cases have been left to rear their children as single parents, 
only to find their former spouses have saddled them with crushing tax 
debt.
  Many of these horror stories have been going on for years without the 
IRS helping the spouses who are seeking relief from mounting tax 
liabilities, interest and penalties. I have seen dozens of letters from 
innocent spouses who find themselves in this kind of jam.
  In March of 1995, the Committee on Ways and Means Subcommittee on 
Oversight held a hearing to explore the development of the Taxpayer 
Bill of Rights II. In particular, we were interested in finding out 
whether the current joint and several liability rules were equitable 
and whether innocent spouse rules were adequate. The long and the short 
of it is, we required the Treasury Department and the General 
Accounting Office to study those rules, report back to us concretely, 
and using that information, this conference has taken the final step to 
provide significant broad-based, fair, honest, innocent spouse 
provisions to relieve the circumstances of these disadvantaged, 
unfortunate, hard-working taxpayers.
  But innocent spouse relief is not the only one of the more than 50 
taxpayer rights we will enact in this legislation. The bill will shift 
the burden of proof to the IRS in court proceedings, as you have heard; 
prohibit the IRS from seizing a taxpayer's home without a court order, 
no less protection should be offered; expand the authority of the 
taxpayer advocate to assist taxpayers, and that is, after all, their 
job; strengthen due process rights for taxpayers in collection 
activities; suspend interest and

[[Page H5357]]

certain penalties when the IRS does not provide appropriate notice to a 
taxpayer within 18 months after a return is filed; and extend the 
client-attorney privilege to accountants and other tax practitioners.
  Mr. Speaker, Mark Twain once said that everyone complains about the 
weather, but no one does anything about it. Perhaps the same could be 
said of the IRS. The complaints are legion. Today we are doing 
something about it.
  Mr. RANGEL. Mr. Speaker, I yield 3 minutes to the gentleman from 
Missouri (Mr. Gephardt), our minority leader, who made certain that 
partisanship did not enter into the debate in restructuring the IRS, 
and one who insists on equity in the Tax Code.
  Mr. GEPHARDT. Mr. Speaker, I thank the gentleman for yielding me 
time.
  Mr. Speaker, I rise in support of this conference report. I believe 
that what has been done to reform the IRS is important. It is supported 
by the President, supported by Members on both sides of the aisle, and 
I intend to vote for it.
  However, there was a provision that was slipped into the conference 
which, frankly, is irrelevant to the substance of this bill. What was 
slipped into the conference was to change the holding period on certain 
capital gains from 18 months to 12 months. It seems that some in the 
majority in this House cannot resist any opportunity to try to put 
another tax break in tax legislation to help the wealthiest of the 
wealthy.
  Here is a chart which shows who gets the benefit of changing the time 
that you have to hold certain capital gains to receive the capital 
gains benefit from 18 to 12 months.
  Bob Dole, a former Senator, had a bill a number of years ago that 
would change capital gains to make them all time-sensitive. That 
probably makes sense. When the bill was passed to change the capital 
gains rate last year, we began to move in that direction by having an 
18-month waiting period.
  Now, the first chance that is obtained, we are going back to a 12-
month holding period. The Speaker of the House announced yesterday he 
wants to take the capital gains rate from 20 to 15 percent. I suppose 
the ultimate goal is what the gentleman from Texas (Mr. Armey), the 
majority leader, has said over and over again, and that is to have a 
capital gains rate of absolutely zero. Absolutely zero.
  Now, while this is going on and while we are tucking in provisions 
that help the wealthiest of the wealthy, let us look at what is 
happening in the Committee on Appropriations of our House of 
Representatives. A proposal to cut out low-income energy assistance, a 
cut of $1 billion that helps over four million low-income households 
pay their winter heating bill; a proposal to eliminate the summer jobs 
program that helps 530,000 disadvantaged young people; cut school-to-
work by $100 million; cut $250 million from the President's request for 
training and job opportunities for poor young people; cut Title I by 
$437 million, that would eliminate reading and math help for 520,000 
disadvantaged children; cut $140 million for mentoring and tutoring. 
The list is too long. I do not have time to go through all the cuts.

  We are right back to where we started from three years ago: tax cuts 
for the wealthy, paid for by cuts on the poor and the middle class. 
That is the program of the Republican Party. They are right back at it. 
We are right back where we started from. There is plenty of time for 
tax cuts for the wealthy; there is no time for the middle class, there 
is no time for the poor.
  I urge Members to vote for the motion to be offered by the gentleman 
from Washington (Mr. McDermott) to recommit that will take out this 
ill-considered, wrongful tax cut for the wealthiest of the wealthy. We 
can do that this afternoon.
  Mr. ARCHER. Mr. Speaker, I yield 2 minutes to the gentleman from 
Georgia (Mr. Collins), another respected member of the Committee on 
Ways and Means.
  (Mr. COLLINS asked and was given permission to revise and extend his 
remarks.)
  Mr. COLLINS. Mr. Speaker, I thank the chairman for yielding me time.
  Mr. Speaker, as one small representative, I rise in support of this 
conference report. This legislation will provide many new protections 
to ensure that IRS abuse ends.
  Mr. Speaker, no citizen should fear their government nor any agency 
of their government. Unfortunately, today, many citizens fear the IRS.
  Mr. Speaker, I rise today on behalf of the residents of the Third 
District of Georgia who are tired of being threatened and harassed by 
IRS agents. Throughout the hearing process on this legislation we heard 
example after example of how certain IRS employees believe they have 
the authority to threaten, harass and intimidate individuals involved 
in tax disputes. Mr. Chairman, this is wrong and it must be stopped.
  Not every IRS employee is unscrupulous. There are indeed many who 
work with constituents to fairly resolve tax disputes. However, even in 
Georgia there are agents who routinely abuse and intimidate citizens.
  Mr. Speaker, any member of this chamber could use all of the debate 
time just citing cases where citizens have been harassed by agents.
  In my District, there was a retired couple making monthly payments on 
a tax debt that had arisen because the government had failed to 
withhold the proper amount of taxes from the husband's government 
retirement check. After working out a pay plan with the IRS, the 
gentlemen actually overpayed each month in order to pay the debt 
quickly.
  Unfortunately, he died before doing so and the IRS wasted no time 
coming after his wife. To compound problems, the IRS had failed to 
properly credit the payments he had made against his tax debt. So, his 
wife was faced with an inflated tax bill, compounded by interest and 
penalties the IRS incorrectly added to the total.
  The IRS demanded full payment of three thousand dollars which she 
could not afford. This poor woman was hounded by an individual agent 
who literally told her she was spending too much money on groceries and 
other basic necessities and should instead send those monies to the 
IRS. Eventually, she was forced to move out of her home and leave the 
state to live with a relative. There she re-filed her taxes and found 
an IRS office willing to fairly resolve her case. She settled the case 
by paying four hundred and fifteen dollars, rather than the three 
thousand she was told she owed by the Georgia agent.
  While her case was eventually resolved, the unnecessarily long 
process, and the abusive approach by the IRS completely changed her 
life forever.
  Mr. Speaker, this legislation will provide many new protections to 
ensure that these abuses end. No citizen should fear their government--
or any agency of their government such as the IRS.
  Mr. RANGEL. Mr. Speaker, I yield 2 minutes to the gentleman from 
North Carolina (Mr. Etheridge).
  Mr. ETHERIDGE. Mr. Speaker, I rise today in support of this bill to 
reform the Internal Revenue Service. I want to thank my friend, the 
gentleman from New York (Mr. Rangel) for yielding this time, and also 
the gentleman from Texas (Chairman Archer).
  Mr. Speaker, it is a great day for America and a great day for North 
Carolina taxpayers and working families. We are eliminating the cruel 
and unusual punishment that has been inflicted upon too many law-
abiding citizens and businesses. Americans will finally have the 
comprehensive reform of the IRS that they deserve.
  Working families and small businesses in North Carolina and across 
this country face enough challenges in their lives without the added 
burden, as we have heard, of some of the IRS agents; not all, but some. 
If a criminal has a right to the presumption of innocence in our 
courts, the American taxpayer should at least have that same right when 
they are dealing with the IRS and their government.
  I am glad this Congress has given the highest priority to reforming 
the IRS. That is why in April I coauthored a bipartisan letter with 
Democratic freshmen members of this class of Congress in urging 
Congress to pass IRS reform this year.
  Today this Congress takes a strong bipartisan step forward for 
working families by enacting the first comprehensive reform of the IRS 
since 1952. I am pleased to support this bill to reform the IRS, which 
will make our government fairer and more efficient for the hard 
working, God-fearing citizens of North Carolina and America.
  Mr. Speaker, I do hope we will vote for the motion to recommit, to 
take out the portions of this bill that should not be in it, so it 
truly will be fair to Americans.
  Mr. ARCHER. Mr. Speaker, I yield 2 minutes to the gentleman from New 
York (Mr. Fossella).

[[Page H5358]]

  Mr. FOSSELLA. Mr. Speaker, I thank the distinguished gentleman for 
yielding me time.
  Mr. Speaker, from time to time we come across what I guess you could 
call a no-brainer. It took about 46 years for our good friend, the 
gentleman from Ohio (Mr. Portman) to identify what we are here today to 
accomplish, and that is to implement a no-brainer.
  I think the people of this country owe a great deal of gratitude to 
the chairman of the Committee on Ways and Means, in addition to the 
gentleman from Ohio (Mr. Portman). This is a great day for the people 
of Brooklyn and Staten Island, indeed, across America, the taxpayers 
who fear the IRS so much. It is about time that we put in place 
mechanisms whereby the IRS is responsible and they respect the average 
taxpayer.
  Why is it that almost half of the Americans fear more going to the 
IRS or receiving an audit from the IRS than going to get a root canal 
from a dentist, respect for dentists of this country notwithstanding? 
That is the reality. It is amazing that it took so many years for the 
conventional common sense and wisdom of this country to find its way 
here to Washington.
  But, thankfully, I guess today we see the result of people working 
together, with the lead of the majority here, working together to do 
what is right for the people of this country, to do what is right for 
the people of Staten Island and Brooklyn. No longer will they have to 
fear the local IRS agent. The benefit of doubt, the presumption of 
innocence, shifts to where it belongs. The country that was founded on 
liberty and justice somehow, when it came to the IRS, got lost.
  What wonderful news. Today you can rejoice, the IRS is finally 
reformed. But, never forget, that is the arm that does the bidding of 
the body. That body is the Tax Code that is just simply out of control. 
Now that we have reformed the IRS, let us continue the real and serious 
work of reforming our Tax Code to create true and economic growth and 
wealth in this country once and for all.
  Mr. RANGEL. Mr. Speaker, I yield 2 minutes to the distinguished 
gentleman from Ohio (Mr. Traficant), a true crusader for taxpayers' 
rights.
  Mr. ARCHER. Mr. Speaker, I yield 1\1/2\ minutes to the gentleman from 
Ohio.
  The SPEAKER pro tempore (Mr. Pease). The gentleman from Ohio (Mr. 
Traficant) is recognized for 3\1/2\ minutes.
  Mr. TRAFICANT. Mr. Speaker, I thank the gentlemen for yielding me 
this time.
  Mr. ARCHER. Mr. Speaker, will the gentleman yield?
  Mr. TRAFICANT. I yield to the gentleman from Texas.
  Mr. ARCHER. Mr. Speaker, Members of this Congress should know that 
the gentleman from Ohio (Mr. Traficant) led the fight for shifting the 
burden of proof, and it was because of the gentleman that I put it in 
the bill in the Committee on Ways and Means. It was not in the 
Restructuring Commission's recommendations. The gentleman further led 
the fight to assure that homeowners would not be thrown out of their 
home without a court order.

                              {time}  1630

  I put that in the bill as a result of his importuning, because he was 
right. He deserves a lot of credit for those two provisions in this 
bill.
  Mr. TRAFICANT. Mr. Speaker, I want to thank the chairman, for it is a 
great day for all of America and a happy day for me, and in one way a 
sad day, that in over 12 years I could not get this done through my own 
party. I could not even get a hearing.
  I want to thank the chairman, the gentleman from Texas (Chairman 
Archer), and I think he told it like it is. I think without the 
gentleman from Texas (Chairman Archer), we would not be changing the 
burden of proof in the tax case today, and I don't think we would have 
these added protections for homeowners. I want to thank the gentleman.
  I want to thank the gentleman from New York (Mr. Charlie Rangel). If 
he were chairman we would have had a hearing, and I would have had a 
better shot. I would just like to say this, the IRS for years has 
prided themselves on the fact, and they have literally been quoted as 
saying, that fear is important, and without fear we will not have 
compliance.
  I think my friend, the gentleman from Georgia (Mr. Mac Collins) told 
it the way it was and the way it is. Fear is a term associated more 
with totalitarian forms of government, Mr. Speaker, not democracies. 
Alex Council committed suicide, and Attorney Bruce Barron committed 
suicide, out of despair and fear.
  Today I think we provide an opportunity where Americans do not have 
to fear their government, and as the gentleman from Georgia (Mr. 
Collins) so eloquently stated, no American should fear our government. 
It is our government. I want to thank the gentleman from Texas 
(Chairman Archer) for putting those two provisions in the bill.
  Let me say one last thing. The taxpayers still must comply and still 
must have records, but the day where they can have that old Bogart 
program, to put them under the gun because they have the burden of 
proof, is over. No taxpayer can prove a negative. No taxpayer should 
have to prove a negative.
  I am proud to support this bill. I want to thank the gentleman from 
Texas (Chairman Archer) for all his help.
  Mr. ARCHER. Mr. Speaker, I yield 2\1/2\ minutes to the gentleman from 
California (Mr. Dreier), a respected member of the Committee on Rules.
  Mr. DREIER. Mr. Speaker, I thank my very good friend for yielding 
time to me.
  If he had not yielded me the full time, I would have called on my 
equally dear friend, the gentleman from New York (Mr. Rangel), and I am 
sure he would have gladly given me a minute.
  Mr. Speaker, I rise in strong support of this conference report, and 
to congratulate all those who have been involved in this issue, and to 
say that I am particularly pleased about a number of items that really 
transcend the issue of IRS reform.
  For starters, I believe that one of the most unfortunate aspects of 
the 1997 tax bill was this ridiculous, preposterous, bureaucratic 18-
month holding period. The Schedule D provisions provided my 
constituents and all Americans who dealt with the issue of capital 
gains a great burden.
  So for us to make the change which the conference did in this bill 
is, I think, a very important and beneficial one. I congratulate the 
committee for having taken that action.
  Mr. Speaker, I would like to take just a moment, if I might, to 
engage the chairman in a colloquy on one issue that has, I understand 
from the report that he has given me, not been discussed so far on 
this. That happens to be what I believe to be one of the most brilliant 
truth-in-advertising changes that has been made, that being the shift 
from this so-called most-favored-nation trading status, and it 
specifically relates to the People's Republic of China, as the debate 
around this place goes.
  We all know that there are only five countries on the face of the 
Earth that do not enjoy what is now called most-favored-nation trading 
status with the United States. We are changing the arrangement with the 
People's Republic of China as we proceed with this debate to correctly 
call it what it is, normal trade relations.
  When we were debating the rule on this conference report earlier 
today, one issue came to the forefront which one of our colleagues said 
was snuck in at the last minute, and that no one knew about it.
  Mr. Speaker, I would just like the chairman to, if possible, explain 
as to whether or not this was snuck in and how it worked out.
  Mr. ARCHER. Mr. Speaker, will the gentleman yield?
  Mr. DREIER. I yield to the gentleman from Texas.
  Mr. ARCHER. Mr. Speaker, I think it is important, number one, that we 
have terminology that fits the facts, as the gentleman has said. What 
has been called MFN or most-favored-nation actually merely means normal 
trading relations.
  Toward the end of the conference both the gentleman from New York 
(Mr. Rangel) and I and Senator Roth and Senator Moynihan, on a 
bipartisan basis, agreed that it would be appropriate to do this, and 
to do it in this bill so it could get done and get in place. It changes 
no substance in the law.

[[Page H5359]]

  Mr. DREIER. I would ask the gentleman, Mr. Speaker, is it not true 
that this has been discussed widely for a number of years? Many people 
around here have been saying we must change this name so people can 
understand exactly what it is.
  Mr. ARCHER. Exactly.
  Mr. DREIER. I thank the chairman for his explanation.
  Mr. RANGEL. Mr. Speaker, I yield 2 minutes to the distinguished 
gentleman from Maryland (Mr. Hoyer).
  Mr. HOYER. Mr. Speaker, I thank the gentleman for yielding me the 
time.
  Mr. Speaker, I rise, I would tell the gentleman from Texas (Mr. 
Archer), with the intention to support this bill when the roll is 
called. I was one of those who did not support this bill as it went to 
the Senate. I was very concerned about what the final product would be. 
I want to congratulate both the chairman and the ranking member for 
improving this bill as it came back. I think that is a good thing.
  I want to rise, however, to say that this bill is a continuation of 
IRS reform, and to congratulate Secretary Rubin, Deputy Secretary of 
the Treasury Summers, and Carl Rossotti who, like all of us, have seen 
the need to bring both management reform and procedural reform and 
taxpayer sensitivity to the IRS.
  Secretary Rubin is the first Secretary of Treasury with whom I have 
served since 1981 who has paid attention to the management issues at 
IRS. He formed, in 1997, a management board. He also made the 
determination to bring on a professional manager, Charles Rossotti, the 
founder and chairman of American Management Systems, and brought on as 
commissioner for a term. That change was a critically important change.
  It is well and good that we amend the law so that we put forth a 
system that will reform the IRS management and the IRS dealing with 
taxpayers. But what is critically important is that we have on board 
personnel committed to that objective.
  Secretary Rubin and this administration have done that. I think this 
legislation, in concert with the reforms that are ongoing and have been 
affected by the Clinton administration and Secretary Rubin, will make a 
very substantial, positive impact on the taxpayers of America. For that 
reason, I intend to support this legislation.
  Mr. ARCHER. Mr. Speaker, I yield 1 minute to the gentleman from 
Florida (Mr. Shaw), a respected member of the Committee on Ways and 
Means.
  Mr. SHAW. I thank the chairman for yielding time to me, Mr. Speaker. 
I would like to thank the gentleman from Texas (Chairman Archer), the 
gentleman from Ohio (Mr. Portman), and the gentleman from New York (Mr. 
Rangel), all that had anything to do with forming this much-needed 
legislation in the Committee on Ways and Means in the House of 
Representatives, in which I am proud to serve, which was very 
aggressive in bringing about this legislation.
  This legislation really was born here in the House and moved forward. 
The Senate had some very good hearings and then we, of course, went to 
conference. Now we have come up with a really fair, much fairer, 
process in dealing with the Internal Revenue Service.
  I think so many people did not realize that prior to this 
legislation, any conference they had with their certified public 
accountant was not at all privileged, and that their accountant could 
be subpoenaed to testify against them in a court of law. Now we have 
just about given the same privilege that an attorney has, an attorney-
client privilege, to an accountant-client privilege. I think that is 
tremendously important. The doublet is something we cherish here in 
America.
  Mr. RANGEL. Mr. Speaker, I yield 2 minutes to the gentleman from 
Texas (Mr. Bentsen).
  (Mr. BENTSEN asked and was given permission to revise and extend his 
remarks).
  Mr. BENTSEN. Mr. Speaker, I thank the gentleman from New York for 
yielding time to me.
  Mr. Speaker, I rise today in strong support of H.R. 2676, the 
conference agreement to reform the Internal Revenue Service and better 
protect the rights of taxpayers. I am proud to have been able to 
cosponsor the original legislation.
  Americans recognize that paying taxes is a civic duty, but our tax 
laws and tax collectors must be fair so Americans will feel good about 
paying their taxes and not bullied. Besides voting, this is the only 
time most Americans deal directly with the Federal Government. We 
should make the experience as painless as possible.
  This legislation goes a long way towards changing the organizational 
culture of the IRS to make it more customer-friendly. It compels the 
IRS, through a system of penalties and incentives and new checks and 
balances, to do a better job in going about its mission of collecting 
taxes. Better management and better technology will improve the IRS's 
ability to serve its customer, the American taxpayer.
  The hearings held by the Senate Finance Committee illuminated the 
spectrum of abuses by IRS tax collectors, and made this legislation 
imperative. The abuses highlighted last year are simply unacceptable. 
No reason exists for any American citizen to be trapped in a 19th 
century Kafkaesque novel when paying their taxes. No taxpayer should be 
subject to haphazard rules or the whims of government agents.
  The most important and significant accomplishment in this legislation 
is shifting the burden of proof from the taxpayer on to the IRS. The 
burden of proof is shifted from the taxpayer to the IRS in disputes in 
civil tax court proceedings. Under current law, the taxpayer, not the 
government, is required to prove innocence in Federal tax cases. This 
new law would require the government to prove guilt.
  The bill creates an independent 9-member board to oversee the IRS and 
develop strategy for the agency. Further, the IRS commissioners will be 
able to recruit private sector management experience through an 
adjustment in the pay scale. The burden of proof will be shifted to 
protect innocent spouses who have no knowledge that their former spouse 
had underpaid taxes.
  Additionally, it expands the taxpayer bill of rights, which will 
include the right to sue the IRS for damages of up to $100,000, make 
more cases eligible for resolution in a tax version of small claims 
court, and provide clinics for low-income taxpayers.
  Mr. Speaker, there are many good people at the IRS, but this bill 
makes them accountable to those for whom they work, the taxpayers.
  Mr. ARCHER. Mr. Speaker, I yield 2 minutes to the gentleman from 
Nevada (Mr. Ensign), again, a respected member of the Committee on Ways 
and Means.
  (Mr. ENSIGN asked and was given permission to revise and extend his 
remarks.)
  Mr. ENSIGN. Mr. Speaker, first of all, I want to thank the 
distinguished chairman of our committee who has brought forth this 
wonderful bill, and of course on the House side, in a bipartisan 
fashion, especially, the gentleman from Maryland (Mr. Cardin) and the 
gentleman from Ohio (Mr. Portman), who brought this bill to our 
committee. At first it was a little contentious, but I think, working 
together, we have brought a super bill to the House of Representatives 
floor.
  I do want to make one point, however. This bill only goes so far. 
Until we completely change the Tax Code, as the ranking Democrat last 
year, Sam Gibbons, said, that until we completely change the Tax Code, 
the IRS can never be completely fixed. But at least this bill goes a 
long way in doing that.
  I want to thank the chairman and I want to thank the ranking member 
for a provision that was put in the bill that especially affects my 
State. I especially want to thank the Speaker of the House and Trent 
Lott, for making sure that this provision was in the House.
  The IRS last year targeted the workers of my State. I represent the 
State that has the highest number per capita of audits in the country. 
Something that would have made them, our workers, even more subject to 
audits was something called the meals tax provision that the IRS 
targeted the workers in the State of Nevada for.
  They wanted to start taxing the meals of people who could not leave 
their place of employment, and because of the work of the people that I 
have talked about, and many of the workers from our State who did a big 
letter-

[[Page H5360]]

writing campaign, the workers' meals tax is now going to be dead. We 
are not going to allow, because of this bill, the workers in our State 
and States across the country to have their meals taxed. I think it is 
a great day for the workers in my State, as well as those other States 
that this bill affects.
  The other point that I would like to make, across the country, and we 
hear this in town hall meetings, that is that the IRS is the only place 
where you are guilty until proven innocent. This is now not the case 
under this bill. You are now innocent until proven guilty.
  So this is truly a day I think for both parties to celebrate, both 
parties to take credit, and I am here to just thank the chairman and 
the rest of the people who have worked on this bill.
  Mr. RANGEL. Mr. Speaker, I yield 2 minutes to the gentlewoman from 
Texas (Ms. Jackson-Lee).
  Ms. JACKSON-LEE of Texas. Mr. Speaker, I thank the gentleman from New 
York for yielding time to me, and I thank the gentleman for his work, 
and certainly the chairman, my colleague, the gentleman from Texas (Mr. 
Bill Archer).
  Mr. Speaker, I believe that we are on the right track. We need an 
Internal Revenue Service that reflects American values and respects 
American taxpayers. It was not too long ago that I held a hearing on 
the Internal Revenue Service in my district. The gentleman from New 
York (Mr. Rangel) and the attendees were dramatically articulating some 
of the enormous concerns that this legislation addressed.
  An oversight entity is of crucial importance. Houston, although I 
will not call it the poster child of Internal Revenue Service abuses, 
it certainly highlighted, when employees wanted to do the right thing, 
the kind of intimidation that occurred.

                              {time}  1645

  The witnesses who came before my hearing highlighted some of the 
extreme activities of the Internal Revenue Service. This is not to 
denounce all of the employees, many of whom work diligently every day 
to assist those taxpayers and who themselves want to do the right 
thing.
  But when we have a physician who is practicing his trade or his 
profession in his office, and we have the Internal Revenue Service 
exploding into that office as he is taking care of a patient, 
immediately asking him to remove himself, lock his doors and get out, 
when the physician is attempting to explain what he has already done; 
when we have others of my physicians who have sat down and said that 
they are prepared to work out their problem, and someone says, ``I do 
not care what you are prepared to work out, we are closing you down''; 
clearly, I would say that it is now overdue for us to be able to make 
sure that this is truly a country of the free and the brave.
  We are brave to do this and to recognize that the citizens' voices 
must be heard. I hope my colleagues will join me in making sure that 
the IRS respects American values and respects our taxpayers.
  Mr. Speaker, I rise to the floor of the House today in support of 
reforming the Internal Revenue Service to make it more efficient, 
accountable, modern and taxpayer friendly. Let me echo the words of our 
President who said, ``We need an IRS that reflects American values and 
respects American taxpayers.''
  The stories of coercion, corruption and scare tactics of IRS agents 
that I have heard from my constituents were more than enough for me to 
endorse IRS reform.
  Therefore, I can endorse the opening up of the government for civil 
liability for taxpayer abuse. This conference report will extend the 
liability of the government for IRS abuse caused by those who may 
negligently disregard our tax laws. This is a safeguard that I know 
taxpayers are demanding and one that I strongly support.
  The establishment of an independent oversight board by the President 
is another provision that I support. There is no doubt that such 
oversight of the administrative functions of the IRS is necessary after 
the disclosure of the atrocities that I heard from the citizens in 
Houston. There were, in fact, cases of possible suicide over the 
tactics that were used and it is time to end such abuses. The oversight 
board will have the responsibility to review and advise the Secretary 
of the Treasury about customer service measures that will make sense. 
Hopefully, the Board will insure that better service to our 
constituents. The conference report contains numerous management 
initiatives, ranging from electronic filing to strengthening the Office 
of Taxpayer Advocate, that backers say will eventually mean better 
service for all taxpayers--faster refunds, easier filing, quicker 
response to questions and problems.
  Such oversight is necessary if we are to make the IRS more efficient.
  Shifting the burden of proof to the IRS is another practical measure 
that makes good sense. In every other proceeding where the government 
is moving against a citizen in a court of law, the government bears the 
burden of proving the facts. It is high time that the IRS come in line 
with this time-honored tradition of the government bearing the burden 
of proof in questions of fact.
  This burden of proof will be enforced after the taxpayer has fully 
cooperated with the IRS with respect to the factual issue. A taxpayer 
would be required to provide access to the information, witnesses and 
documents within the control of the taxpayer. This makes the proceeding 
more in line with every other court proceeding and makes it fair.
  This conference report would also correct meaningful measures that 
will insure taxpayer fairness in IRS audits and collection activities. 
The common law privilege of attorney-client privilege for those tax 
advisors authorized to practice before the IRS will not be afforded as 
it should be. It would also end the use and abuse of summons by the IRS 
in looking for documents. Under this bill the IRS would be required to 
make reasonable inquiries and could not issue a summons until it has 
used other reasonable methods to ascertain where the information it is 
seeking may be.
  The conference report also provides for making more information 
available to the taxpayers. It requires the IRS to print and make 
available to taxpayers explanations that make sense and clarify a 
variety of complicated matters. Married taxpayers will be alerted to 
liabilities that they would be jointly liable for even though only one 
spouse earned the income.
  A spouse who may be innocent for the mistakes of another spouse in 
preparing a tax return will also now be afforded relief from tax 
liability, interest and penalties. Now a spouse who has nothing to do 
with the preparation of the return is fully liable for the mistakes. 
This is wrong and would be corrected by this bill.
  I am also pleased Mr. Speaker, that the conference report requires 
the IRS at least to notify the taxpayer within 18 months of a possible 
liability, so it could be paid and the interest and penalty clock 
stopped. If the agency does not provide this notification, penalties 
and interest on the unpaid tax are suspended. Currently, the agency is 
so slow that taxpayers may have big penalty and interest bills before 
they ever learn that they have underpaid their taxes.
  I will also support the conference report accompanying the bill 
because due process provisions are included. In this bill, the agency 
will only be allowed to seize business property only as a last resort, 
and a personal residence cannot be seized without court approval.
  Again, Mr. Speaker, it is high time that we have the IRS reform that 
the American people have been calling for. I support this bill and urge 
my colleagues to vote for it.
  Mr. ARCHER. Mr. Speaker, I yield 1 minute to the gentleman from 
Illinois (Mr. Weller), a member of the Committee on Ways and Means.
  (Mr. WELLER asked and was given permission to revise and extend his 
remarks.)
  Mr. WELLER. Mr. Speaker, let me first begin my brief comments just 
saluting the gentleman from Texas (Mr. Archer), chairman of the 
Committee on Ways and Means, for his leadership and his tenaciousness 
in bringing this issue to a head and succeeding. And also I wish to 
thank the gentleman from New York (Mr. Rangel), the ranking member, for 
his bipartisan cooperation.
  This legislation is a big victory for the taxpayer. Clearly, 
reforming the IRS, holding the IRS accountable to those who work hard, 
live by the rules and pay the bills, is a big victory.
  One other big victory that is a key part of this bill was one of 
those issues that was a quiet issue and became more and more important. 
I found over the last 3\1/2\ years that I have represented the South 
Side of Chicago and the South Suburbs that I have had a half a dozen 
constituents contact me every year, usually divorced single moms 
struggling to raise the kids, and there were cases where a deadbeat dad 
was a deadbeat taxpayer and the IRS could not find him.
  Mr. Speaker, whose door did the IRS show up at to collect the taxes? 
That of the poor, struggling working, single, divorced mom with the 
kids whose husband was not paying the child support.
  This is a big victory for taxpayers.
  Mr. RANGEL. Mr. Speaker, I yield 30 seconds to the distinguished 
gentleman

[[Page H5361]]

from Ohio (Mr. Kasich), chairman of the Committee on the Budget.
  Mr. KASICH. Mr. Speaker, I just want to take 30 seconds to compliment 
the gentleman from New York (Mr. Rangel) and the gentleman from Texas 
(Mr. Archer), chairman of the Committee on Ways and Means.
  But Mr. Speaker, I want to pay a special tribute to the gentleman 
from Ohio (Mr. Portman), my great friend, who the chairman appointed to 
the task force to get this ball rolling. He has done a great job and 
has been relentless.
  The gentleman is my great friend and I am thrilled this is happening 
today, and I know this is something that his whole family and country 
is proud of.
  Mr. RANGEL. Mr. Speaker, I yield 2 minutes to the gentleman from 
Mississippi (Mr. Taylor).
  Mr. TAYLOR of Mississippi. Mr. Speaker, I have got to admit that 
portions of this bill leave me somewhat perplexed, while I agree with 
most of it.
  Mr. Speaker, this is the same body that in the past 2 weeks has 
passed six different pieces of legislation expressing our grave concern 
as to what the Chinese intentions are towards our Nation. We have a 
special committee that is looking into whether or not they bribed 
American officials in order to get hold of American missile technology. 
The same body that says we will no longer transfer missile technology.
  But in the most blatant hurt and wrong that is being done to the 
American people, a $50 billion trade imbalance with the People's 
Republic of China, where they get $50 billion more of our money each 
year, where they charge our companies 30 to 40 percent to have access 
to their markets but we only charge them 2 percent, if we charge them 
anything, to have access to our markets, that used to be called Most 
Favored Nation status.
  Now, because the American people have caught on to that and a 
majority of Members of Congress can no longer vote for Most Favored 
Nation status, because the American people have caught on to this scam, 
the new scam is we are going to change the name of it. It is now going 
to be called ``normal trading relations.''
  Mr. Speaker, I would really hope someone would come to this floor and 
tell me what is ``normal'' about a $50 billion trade imbalance? What is 
normal about giving that same money to people we know are using it for 
weapons modernization? Because if that is normal, we do not deserve to 
be here.
  If my colleagues are trying to hide that from the American people, it 
is not going to take them very long to figure out what is going on.
  Mr. RANGEL. Mr. Speaker, I yield the balance of my time to the 
distinguished gentleman from Washington (Mr. McDermott), a member of 
the Committee on Ways and Means.
  The SPEAKER pro tempore (Mr. Pease). The gentleman from Washington 
(Mr. McDermott) is recognized for 3\1/2\ minutes.
  Mr. McDERMOTT. Mr. Speaker, I support the bulk of what is in the 
Internal Revenue Service restructuring proposal that is before us, but 
I cannot support this legislation in its present form because of the 
Republican majority's insistence on including a major tax break for the 
well-to-do in a bill that is supposed to restructure the IRS. The 
Republican decision to reduce the capital gains holding period from 18 
months to 12 months for the well-to-do in this legislation is a gross 
illustration of the Republican party's priorities.
  Given the likelihood that the House and Senate will not agree on 
anything else tax-related this year, and the fact that there is still 
no budget resolution in sight, it is probable that this is the last tax 
legislation that will pass the Congress and be signed into law. Even if 
the two Houses are to agree on tax legislation before November, there 
is no way they can pay for their extremist schemes without threatening 
Social Security by dipping into the budget surplus, a legislative 
action the President has said that he will veto. If we add that veto 
threat to the fact we have no budget, we are not going to see more tax 
legislation.
  So what are the Republicans' tax priorities? Elimination of the 
marriage tax penalty? That was in the Contract on America, but we are 
going to leave that by the side of the road again. An increase in child 
tax credit? No. An extension of the research and development tax 
credit? No. All the Republicans want to do when they have the chance is 
to guarantee a tax cut for America's wealthiest investors.
  Mr. Speaker, I disagree with this new-found philosophy that what is 
good for Goldman, Sachs is good for the country. While the Republicans 
are cutting taxes for the top 1 percent of this country, people 
averaging more than $600,000 a year, they are gutting important 
opportunities for America's youth in the Committee on Appropriations.
  So here we have the Republican agenda out in the open again for 
everyone to see. While they bow to the desires of America's elite, they 
are eliminating funding for summer youth and school-to-work employment 
programs. While they are boosting the personal profits for America's 
CEOs, they are eliminating the low-income Home Energy Assistance 
Program which makes sure that America's poor do not freeze to death in 
the winter.
  Mr. Speaker, I do not know where the rest of my colleagues will be 
next winter or next summer, but I hope they will be some place where 
they are enjoying themselves, because if they take away heating 
assistance for the poor and people die in the winter, if they take away 
summer jobs for students and work opportunities and we have 
disturbances and crime, they will be responsible, because all they 
wanted to do when they had a chance to make a difference was simply to 
give a tax break to the barons of Wall Street.
  This is bad tax legislation. It is the only piece. And we have had 
all of this talk about the fact that we are going to remove the 
marriage tax penalty. There will be no opportunity to do that because 
they cannot put together a budget resolution. If they cannot do that, 
we cannot have a reconciliation bill. They will have no way to get at 
any of the surplus. They will have to raise the taxes on tobacco or 
somewhere else to get the money to take away the tax penalty on 
marriage.
  Mr. Speaker, I think this shows where the priorities for the 
Republicans are.
  I support much of what is in the Internal Revenue Service (IRS) 
restructuring proposal now before Congress. The majority of issues 
which I raised in Committee and on the House Floor regarding the 
workability of this bill were fixed, thanks to the hard work of the 
conferees who improved upon both House and Senate versions. However, I 
cannot support this legislation in its present form because of the 
Republican majority's insistence on including a major tax break for the 
well-to-do in a bill that is supposed to restructure the IRS.
  The Republican Conferees last-minute addition to the IRS reform 
legislation that will reduce the capital gains holding period from 18 
to 12 months will not reduce the complexity or the size of taxpayer 
headaches caused by last year's tax legislation. It will not even 
reduce the size of the taxpayers' capital gains Schedule D tax form by 
even 1 line. The change simply reduces taxes in a way that 
disproportionately benefits high-income taxpayers.


                              tax inequity

  The Republican's decision to sneak this tax cut for the well-to-do 
into legislation to reform the IRS is gross illustration of the 
Republican party's priorities. Given the likelihood that the House and 
Senate will not agree on anything else tax-related this year and the 
fact that there still is no Budget Resolution in sight, it's probable 
that this is the last tax legislation that will pass Congress and be 
signed into law by the President.
  Even if the two Houses are to agree on tax legislation before 
November, there is no way they can pay for their extremist schemes 
without either threatening Social Security by dipping into the budget 
surplus legislative action that the President has vowed to veto. Add 
the veto reality into the tax equation and it makes it even more 
probable that this is the last tax bill to be signed into law this 
year.
  And what do the Republicans demand as their top tax priority?
  Elimination of the marriage tax penalty? No.
  An increase in the child tax credit? No.
  An extension of the Research and Development credit? No.
  All the Republicans want to do when they have the chance is to 
guarantee a tax cut for America's wealthiest investors.
  Well, Mr. Speaker, I disagree with this new-found philosophy that 
what's good for the partners of Goldmann-Sachs is good for the country. 
While the Republicans are cutting taxes for the top 1% of America's 
investors--folks averaging $600,000 a year or more--they are gutting 
important opportunities for America's youths in the Appropriations 
Committee.

[[Page H5362]]

  Just this week, the Republicans reported Appropriations legislation, 
that one member described as nothing less than ``taking from the hides 
of the weakest and most vulnerable in our society.''
  So, here's the Republican agenda, out in the open for everyone to 
see. While they are bowing to the desires of America's wealthy elite, 
they are eliminating funding for summer youth and school-to-work 
employment programs.
  While they are boosting the personal profits for America's CEOs, they 
are eliminating the low-income home energy assistance program which 
makes sure that America's poor do not freeze to death in the winter.
  Now, I don't know where the rest of you will be next winter or next 
summer, but I hope, for your sake, that you are safely hobnobbing at 
your benefactor's off-shore vacation estates. Because if you take away 
heating assistance for the poor, and people die; and if you take away 
summer jobs for students, and there are civil disturbance and crime--
you will be responsible because all you wanted to do when you had a 
chance to make a difference was simply to give a tax break to the 
barons of Wall Street.


                             tax simplicity

  The 1997 Taxpayer Relief Act created a confusing array of capital 
gains tax rates and added 35 new lines to taxpayers Schedule D tax 
form. There are potentially five different rates that can apply to the 
capital gains of an individual: 10 percent, 15 percent, 20 percent, 25 
percent, and 28 percent. The 1997 Act also created two additional tax 
rate categories, one that will take effect for the 2001 taxable year 
and another that will take effect for the 2006 taxable year. The 
schedule required to implement that new policy will add significant 
additional complexity, and make the 1997 schedule look simple. In 
addition, increasingly large numbers of taxpayers will have to fill out 
the complex schedule twice, once for the regular tax and once for the 
minimum tax.
  Even with the Republican Conferee's change, the current capital gains 
tax schedules and underlying rules for taxation of capital gains remain 
unnecessarily complex, and will continue to impose on taxpayers (with 
more than four sales) the burden of spending, on average, 5 hours and 
20 minutes preparing the schedules (two hours more than in 1994). For a 
party that says it wants to terminate the tax code, you'd think they 
could start by reducing taxpayer forms by a least 1 line.
  The worst aspect of current law is that its complexity falls hardest 
on low- and moderate income taxpayers who invest through mutual funds 
and real estate investment trust. Led by Representative Bill Coyne (D-
PA), Ways and Means Democrats have a proposal (H.R. 3623) that would 
dramatically simplify the capital gains rules.
  Coyne's legislation, modified to be revenue neutral, would substitute 
a simple 38 percent exclusion for the confusing array of capital gain 
tax rates mandated by last year's Act. Such an exclusion has been 
scored by the House Joint Committee on Taxation as essentially revenue 
neutral--unlike the Republican plan to drain the Federal Treasury by an 
additional $2 billion.
  Like the Republican proposal, H.R. 3623 repeals the 18 month holding 
period requirement. It also goes a step further and would permit 
depreciation recapture gains on real estate so taxpayers can receive 
the full benefit of the capital gains tax reduction.
  Most importantly, H.R. 3623 simplifies the computation of capital 
gains taxes for all individual taxpayers by replacing the entire 
complex 35-line schedule with a single line that would require 
taxpayers to include 62 percent of their net long-term capital gains on 
the appropriate line of the tax return.
  Coyne's bill also would provide modest capital gains tax reductions 
for more than 97 percent of individual taxpayers. It potentially could 
impose modest tax increases on the approximately one and a half million 
wealthiest individuals in the country. This is not a bad price for its 
extraordinary simplicity, but may be the reason for some would-be tax 
code terminators opposition.
  The following chart illustrates the impact of the proposed 
simplification legislation:

----------------------------------------------------------------------------------------------------------------
                                                           Rate under current law                   Rate under
                                           ------------------------------------------------------    H.R. 2623
                                            Assets held more                                     ---------------
   Rate bracket (number of taxpayers in      than 18 months      Real estate     Assets held at     All capital
                 bracket)                        and net        depreciation     least 12 months    assets held
                                             collectibles or   recapture gain   but less than 18   more than 12
                                             recapture gain                          months           months.
----------------------------------------------------------------------------------------------------------------
15 percent (61.6 million).................               10                15                15         9.3
28 percent (24.0 milion)..................               20                25                28        17.3
31 percent (2.3 million)..................               20                25                28        19.2
36 percent (1.0 million)..................               20                25                28        22.3
39.6 percent (0.5 million)................               20                25                28        24.5
----------------------------------------------------------------------------------------------------------------

  The IRS restructuring bill to which the Republican provision is 
attached would mandate that, for tax legislation considered by the 
Committee on Ways and Means after January 1, 1998, a ``Tax Complexity 
Analysis'' must be provided by the Joint Committee on Taxation. Had the 
law required a complexity analysis of last year's capital gains 
provisions, the Taxpayer Relief Act would have failed.
  Before we close the book on IRS restructuring, let's do everyone a 
favor by taking a step toward tax code simplication. Inclusion of 
Coyne's legislation would do just that.
  I am committed to working to improve accountability within the IRS 
and to simplify the tax code to ensure that both taxpayers and tax 
administrators alike can fulfill their responsibilities with greater 
efficiency and ease.
  Unfortunately, this legislation contradicts my strong belief that our 
tax code should be equitable and our tax priorities should be 
progressive. I am unable to support this legislation because of the 
Republican majority's abuse of these important principles.


Distribution of the Tax Benefits From Shortening the Holding Period for 
             20% Capital Gains From 18 Months to 12 Months


                                                                Percent
Less than $10,000...................................................0.0
$10-20,000..........................................................0.1
$20-30,000..........................................................0.3
$30-40,000..........................................................0.5
$40-50,000..........................................................1.0
$50-75,000..........................................................3.8
$75-100,000.........................................................4.1
$100-200,000.......................................................14.3
$200,000 or more...................................................76.1
                                                               ________
                                                               
      All.........................................................100.0
Note: figures are at 1999 levels.
Source: Citizens for Tax Justice, June 24, 1998.


                         Parliamentary Inquiry

  Mr. TAYLOR of Mississippi. Mr. Speaker, I have a parliamentary 
inquiry.
  The SPEAKER pro tempore. The gentleman will state it.
  Mr. TAYLOR of Mississippi. Mr. Speaker, one of the provisions of this 
bill is the changing of the term ``Most Favored Nation status'' with 
regard to China and changing it to ``normal trade relations.'' That 
legislation never passed this House. To the best of my knowledge, it 
never passed the United States Senate.
  My parliamentary inquiry is, can something that has been passed and 
voted on in neither body be included in this conference report?
  The SPEAKER pro tempore. Even if the gentleman were raising a timely 
point of order, all points of order against this matter were waived by 
House Resolution 490.
  Mr. TAYLOR of Mississippi. Mr. Speaker, would the Speaker like to 
explain to this Member how the highest legislative body this world has 
ever known can waive its own rules?
  The SPEAKER pro tempore. The gentleman's question is not a 
parliamentary inquiry.
  Mr. ARCHER. Mr. Speaker, I yield such time as he may consume to the 
gentleman from Louisiana (Mr. McCrery).
  (Mr. McCRERY asked and was given permission to revise and extend his 
remarks.)
  Mr. McCRERY. Mr. Speaker, I rise in support of the IRS reform bill 
and in support of the capital gains simplification measure in the bill.
  Mr. RILEY. Mr. Speaker, the devastating storms that swept through 
Alabama and Georgia on April 8, 1998, left hundreds, if not thousands, 
of people's lives in shambles.
  In a time of tragedy when people are trying to pick up the pieces of 
their lives and rebuild, the last thing they should be faced with is 
filing their federal income tax returns.
  The IRS did give these taxpayers an extension, but, by law, it must 
charge them interest on any unpaid taxes from the original due date 
(April 15, 1998) until the tax is paid.
  Mr. Speaker, charging disaster victims interest on their unpaid taxes 
after the IRS granted

[[Page H5363]]

them an extension is irresponsible. That is why I introduced the 
Disaster Victims Tax Fairness Act. This bill would waive interest 
assessments against these families.
  I would like to commend the Chairman of the Ways and Means Committee 
for including this important provision in the IRS Restructuring 
conference report.
  It is the right thing to do, Mr. Speaker.
  These families need all the help they can get and passage of this 
bill shows that we in Congress understand that.
  Mr. CRANE. Mr. Speaker, I rise in strong support of H.R. 2676, the 
Internal Revenue Service Restructuring and Reform Act Conference 
Report.
  Number hearings during this Congress have opened up the IRS to public 
scrutiny. These hearings provided further proof that the IRS is out of 
control--something too many Americans already knew.
  Several witnesses testified only under the condition of anonymity for 
fear of retribution by rogue IRS agents. Among other abuses, we found 
that IRS employee performance was measured by the amount of money 
squeezed out of American taxpayers. This is hardly what we expect of 
the government of the world's leading democracy.
  The Republican-led Congress had enough of the countless stories from 
our constituents who have been mistreated in their dealings with the 
IRS and we felt it was high time to rein-in the agency.
  H.R. 2676 most importantly shifts the burden of proof to the IRS in 
disputes with taxpayers over an alleged tax liability. After this bill 
is enacted into law, no longer will Americans be guilty until they 
prove themselves innocent before the IRS.
  To maintain close scrutiny of the IRS' work, the bill establishes an 
oversight board comprised mostly of private-sector citizens. The board 
will also have input into the President's selection of the IRS 
commissioner.
  Other benefits taxpayers will enjoy from the enactment of this 
legislation include: relief for innocent spouses; elimination of 
penalties and interest on outstanding taxes in certain circumstances; 
and the ability to collect damages caused by rogue IRS employees.
  In addition, I would like to commend the Chairman of our Ways and 
Means Committee, Bill Archer, for two provisions he added in 
conference. First, I appreciate the addition of the language of my 
bill, H.R. 2316, to the conference report. This will correct a misnomer 
in U.S. trade law. The term ``most-favored-nation'' has been quite 
misleading because it has implied that we were extending benefits 
greater than the normal benefits we extend to our trading partners. The 
language in the conference report will change the terminology from 
``most-favored-nation'' to ``normal trade relations'' or ``NTR.'' 
Rather than misleading the American people, we should call this trade 
treatment what it really is--merely ``normal.'' My Ways and Means Trade 
Subcommittee recently marked up H.R. 2316, and the issue has been 
debated in Congress for years.
  Second, the sorely-needed correction to the Administration provision 
from last year's Taxpayer Relief Act concerning the holding period for 
capital gains. I agree with the Chairman that the correct holding 
period ought to be 12, not 18, months for taxpayer to enjoy the lower 
capital gains tax rates.
  Mr. Speaker, I urge my colleagues to support this conference report 
and hope that the President will sign it into law.
  Mr. BLUMENAUER. Mr. Speaker I voted for the initial IRS reform bill, 
and there are many elements of the bill before us today that I continue 
to support. I am concerned, however, with several new elements which 
were introduced into the bill by the majority.
  I am concerned that if we are going to reduce the burden on 
taxpayers, lower-income working families should be included. After all, 
the taxes these families pay have a much bigger impact on the quality 
of their lives. This would have been easy to achieve with an increase 
in the EITC, or even better, with an across the board reduction in 
social security taxes which would benefit every working American.
  Unfortunately, those with higher incomes have been singled out for 
tax reductions in H.R. 2676. Since it is our struggling working 
families who have the roughest time making ends meet, I hope the next 
time we vote on tax relief we won't leave them out.
  Mr. WOLF. Mr. Speaker, I rise today to express deep concern about one 
provision in an otherwise good bill--a provision changing Most-Favored-
Nation trading status to Normal Trade Relations. This provision was not 
part of H.R. 2676 when it was passed overwhelmingly by the House with 
my support last November. It was not part of the bill passed 
overwhelmingly by the Senate last month. It was snuck into the 
conference report at the last minute. How disappointing.
  What's the big deal about changing the name of Most-Favored-Nation 
trade status? MFN has come to symbolize something much more than just 
nondiscriminatory tariffs. MFN was the rallying cry for many groups and 
other human rights champions who fought for freedom on behalf of those 
trapped behind the Iron Curtain during the dark days of communism. MFN 
has come to symbolize a struggle for freedom of emigration, freedom of 
religion and human rights.
  MFN was the term the Romanian people knew when the United States 
finally took away nondiscriminatory trade status from Nicolae 
Ceasusescu--a dictator who was terrorizing his own people, bulldozing 
churches, turning Bibles into toilet paper, torturing political 
dissidents, and using those who desired to emigrate as bargaining chips 
with the West. When we took away MFN, the Romanian people heard about 
it on Radio Free Europe.
  MFN symbolized more than normal trading relations when the United 
States suspended Poland's MFN status after it invoked martial law in 
1983. To the Polish people, suspending MFN was a clear statement that 
the American people stood with Lech Walesa, the Solidarity movement and 
all those struggling to throw off the chains of communism.
  MFN means more than tariffs to the people of Tibet and China, who 
desire, but do not have, freedom and basic human rights. To them, 
awarding MFN to the Chinese dictators without conditions--as the United 
States has done since President Clinton de-linked trade from human 
rights in 1994--carries the message that the United States government 
cares more about trade than it does about human rights.
  MFN is more than just a name and that's why many want to change it. 
Those who support this name change know that the American people are 
increasingly concerned about extending Most-Favored-Nation status to a 
country like China which persecutes people of the Christian, Buddhist 
and Muslim faiths.
  They know the American people are increasingly concerned about giving 
Most-Favored-Nation status to a country that locks up Catholic bishops 
and priests--some for a decade at a time--for conducting Mass or 
pledging allegiance to Pope John Paul II.
  A country that imprisons Protestant pastors and laypeople for holding 
Bible studies, house church meetings or distributing Bibles.
  A country that allows forced abortion and sterilizations of women as 
a way to enforce a brutal population policy.
  A country which has plundered Tibet, imprisoned and tortured hundreds 
of Tibetan Buddhist monks and nuns, demolished 4,000-5,000 monasteries, 
and is destroying the culture of the Tibetan people.
  Some who favor this name change--believe it will be easier to 
convince the American people that our trading relationship with China 
is normal. But what's normal about a trading relationship which has 
allowed China to amass a $50 billion trade surplus with the United 
States but still restricts most American goods from entering its 
market.
  There's nothing normal about trade relations with China and the 
American people will not be fooled.
  MFN is a symbol of a time when the United States was willing to put 
principle before profit in our relations with foreign governments. 
Changing the name today ends that era.
  I plan to vote for H.R. 2676 because it increases taxpayer rights 
when dealing with the IRS and requires the IRS to be more accountable 
to the Congress and the American taxpayer.
  However, I am deeply saddened and concerned that an otherwise good 
bill has been tainted by this bad provision.
  Mr. OWENS. Mr. Speaker, I rise to challenge the conventional wisdom 
on taxes and to, thereby, give my tacit support for the conference 
report to H.R. 2676, the ``IRS Reform and Restructuring Act.'' When 
H.R. 2676 was initially considered in the House last November, I voted 
for it enthusiastically because it appeared to be a long-overdue form 
of taxpayer advocacy to protect our citizens. However, the bill that we 
consider today has remarkably moved from transforming the 
administration and oversight of the Internal Revenue Service (IRS) for 
the benefit of the average American taxpayer; today's version of H.R. 
2676 includes provisions (not passed by either the House or Senate) 
which represent an arrogant, back-door effort to reduce taxes for the 
wealthiest Americans. H.R. 2676 not only reforms and restructures the 
IRS, but it reforms and restructures tax policy on capital gains, 
estates, and Roth Individual Retirement Accounts (IRAs). Instead of 
determining new ways to circumvent taxes on the ``unearned'' income of 
the rich, it is time that America's revenue and tax policy stop 
penalizing the ``earned'' income of our working families.
  It is an undisputable fact that working people are paying the cost of 
government--practically all of it. Our tax system is set up to pilfer 
the recipients of ``earned'' income--wages, salaries, and retirement 
pay--and protect the recipients of ``unearned'' income--interest, 
dividends, rents, and capital gains. Taxes on ``earned'' income produce 
85% of all personal income taxes, with only 15% brought in by taxes on 
``unearned'' income. Moreover, taxes on ``earned'' income--income and 
Social Security taxes--bring in over 70% of all Federal

[[Page H5364]]

tax revenue, compared to only 9% for ``unearned'' income. For every 
dollar of tax revenue produced by ``earned'' income, ``unearned'' 
income brings in only 13 cents.
  H.R. 2676 would exacerbate this scenario by adding another unfair 
layer of protection for ``unearned'' income. H.R. 2676 would shorten 
the length of time (from 18 months to 12 months) that an asset has to 
be held in order to yield a lower capital gains tax rate (from 28% to 
20%). It should be noted that unlike ``unearned'' income, every single 
penny of ``earned'' income goes on the tax return and is fully taxed. 
(The only exception is the income ``earned'' by low-income people who 
either make only a few thousand dollars a year or who are eligible to 
receive the Earned Income Tax Credit.) Yet, H.R. 2676 contributes to 
the list of humongous loopholes, exceptions, and special provisions for 
``unearned'' income, especially capital gains. This new protection for 
capital gains will cost the U.S. Treasury $300 million per year 
(beginning in the year 2000). Over a 10-year period, this provision in 
H.R. 2676 will cost more than $2 billion--all to the benefit of the top 
5% of the income scale--individuals who make six figures a year.
  H.R. 2676 contains other provisions that would further underscore the 
regressive make-up of our tax policy. The legislation does not correct 
an error in the 1997 Balanced Budget Act that decreased taxes on 
estates with values as large as $17 million. This tax break would 
benefit the heirs of a few hundred people each year--the richest 0.01% 
of Americans. In addition, H.R. 2676 would allow wealthy senior 
citizens to cut their future taxes by expanding their eligibility for a 
newer, more financially generous IRA--the ``Roth IRA''--after 2004. 
This provision would cost the U.S. Treasury approximately $1 billion 
per year after 2004.

  It is unfortunate that Republicans have misused this opportunity to 
pass a good IRS reform bill and, instead, have authorized new tax 
breaks for the rich. Already the tax code is rife with flagrant 
examples of corporate welfare; and H.R. 2676 does nothing to alleviate 
existing burdens on working families. Corporations used to shoulder 39% 
of the tax burden while families shouldered 27%. Today corporations 
only contribute 11% while families contribute 44%. The bank accounts of 
American families should not be drained to compensate for the 
untouchable coffers of corporate America. Instead, corporations must be 
forced to pay their fair share, as well as wealthy individuals.
  I challenge my colleagues to step up to the plate, propose fair 
reform of the IRS, and achieve taxpayer justice by directing the IRS to 
enforce current laws. Specifically, the bill represents Congress 
closing its eyes to a continual corporate abuse scheme: corporations 
are purchasing large quantities of their own stock, which is 
categorically prohibited by Sections 531-537 of the Internal Revenue 
Code. Despite the law, hundreds of big-name corporations have been 
avoiding paying out dividends--and thus avoiding paying taxes on those 
dividends--by accumulating more than $275 billion in stock buy-backs. 
It must be reiterated that it is unlawful for corporate business 
managers to let profits pile up in the corporation, rather than to 
distribute them as taxable dividends. If current law were enforced 
today, an estimated $70 billion in penalties would be collected by the 
Federal government. And as evidenced by my personal investigation of 
this matter, the IRS is fully aware of these violations, but appears to 
be too timid to tackle the big corporations who are committing the 
offenses.
  The original version of H.R. 2676 was commendable. The Taxpayer Bill 
of Rights III, the new 9-member oversight board, the Low-Income 
Taxpayer Clinics, the national Office of Taxpayer Advocate with its 
local advocacy offices, and the goal of an 80% electronic filing rate 
by the year 2007--these represent a movement in the right direction 
towards the reform and restructure of the nation's tax collecting 
agency. What about ensuring that working families take home more 
dollars so that they will not have to struggle to pay their own bills? 
The addition of special tax breaks for the rich during the conference 
committee meetings is an affront to economic justice for all of 
America's taxpayers. We can do a better job, and this bill could do 
more to correct the imbalance in our tax structure.
  Mr. GEPHARDT. Mr. Speaker, I would like to express my deep concern 
about the inclusion in this legislation of an unrelated provision that, 
while seemingly innocuous and noticed by few, will neutralize a 
principle that has been at the heart of our nation's trade policy for 
decades.
  Section 5003 of H.R. 2676 will change the term ``most-favored-nation-
treatment'' to ``normal trade relations'' in all relevant U.S. 
statutes. This change in terminology undermines the foundations of a 
trade policy that has been used to advance U.S. interests for many 
years. This policy has in part consisted of ensuring that the most 
favorable terms of trade are accorded to nations with which the United 
States share similar concepts and practices regarding international 
commerce. In the past, nations we have deemed to be unworthy of this 
status include communist regimes and regimes that engaged in 
particularly oppressive acts against their citizens, such as Poland's 
martial-law government in 1982.
  It is unfortunate that over the past several years, our government 
has refrained from using MFN status as a tool to advance U.S. interests 
broadly or, at a minimum, obtain important commitments from our trading 
partners. I am particularly disappointed that we have not effectively 
conditioned or cut off MFN status for China in the aftermath of the 
1989 Tiananmen Square massacre. Our government's recent pattern of 
behavior in this regard, however, is no reason to now strip this tool 
of the nomenclature that conveys the purpose for which it was 
originally intended. And given the context in which this change of 
terminology has been proposed this year--that is, in connection with 
once again renewing MFN status for China--I am convinced that it is an 
attempt to semantically extinguish the values that should be at the 
core of our policy toward China and all other nations.
  Earlier this week, I conveyed these concerns to the Chairman of the 
Ways and Means Subcommittee on Trade, as that subcommittee prepared to 
consider this proposal as a stand-alone legislative measure. I believe 
that a legislative change of this significance should be debated 
separately from the IRS legislation to which it has been attached. But 
again, I fear that the manner in which this serious issue has been 
presented to the House is a maneuver to neutralize its importance to 
our trade policy and the values that should underlie it. I submit for 
the Record a copy of my letter to the Chairman of the Ways and Means 
Subcommittee on Trade.

         Congress of the United States, House of Representatives, 
           Office of the Democratic Leader, Washington, DC, June 
           23, 1998.
     Hon. Phillip M. Crane,
     Chairman, Subcommittee on Trade, Longworth House Office 
         Building, Washington, DC
       Dear Mr. Chairman: It is my understanding that today the 
     Trade Subcommittee will be marking up a bill to change the 
     terminology of ``most favored nation'' (MFN) to ``normal 
     trade relations'' (NTR). I remain concerned that changing 
     this widely accepted trade designation would be misleading 
     and ill advised. Why would we want to overturn years of U.S. 
     commercial law, primarily to send a gesture that we desire 
     ``normal trade relations'' with China?
       The fact is that China is not a normal trading nation. It 
     is not even a market economy; it is a communist centralized 
     economy. While we grant China MFN on a yearly basis, we 
     receive little in reciprocal trade benefits from China. The 
     ever ballooning trade deficit with China, up more than 175% 
     since 1992, proves that Chinese markets remain closed to U.S. 
     goods and services. This year, the U.S. is projected to have 
     a $60 billion trade deficit with China.
       Unacceptable Chinese behavior on a whole host of important 
     issues like human rights, proliferation, religious freedom, 
     Tibet, organ sales, forced abortion, trade and labor rights 
     should preclude any preferential trade designation from the 
     U.S. We need to use our leverage in the trade relationship 
     and in other areas to press for changes in these unacceptable 
     Chinese practices. However, if this measure passes, we would 
     be unilaterally placating China.
       Make no mistake. It is a preferential trading status that 
     countries like China receive when the President makes a 
     special request for a waiver from Jackson Vanik. When the 
     U.S. grants MFN, nonmarket nations gain benefits from the 
     U.S. that are often unilateral in nature. For example, China 
     was granted $1 billion in annual tariff concessions when the 
     WTO Uruguay Round went into effect, because it receives the 
     MFN designation.
       Let us continue to debate MFN on the merits. Rather than 
     attempting to confuse the U.S. public and our allies with 
     this new and inaccurate NTR designation, it would be better 
     to acknowledge that problems remain across the array of 
     political, economic and security issues in our bilateral 
     relationship with China.
       Real engagement means communicating honestly with China 
     about the problems and the positive aspects of our bilateral 
     relationship. To say that the U.S. has ``normal trade 
     relations'' with China is disingenuous and suggests that 
     China's current behavior is acceptable to the U.S. I continue 
     to believe that China can and must do better to earn the 
     ``most favored nation'' designation from the U.S. Let's not 
     change the terms of the debate just to get China off the 
     hook.
       Thank you for this opportunity to express my views.
           Sincerely,
                                              Richard A. Gephardt.

  Mr. POSHARD. Mr. Speaker, I rise today in support of this landmark 
legislation, which provides for long-overdue reform and restructuring 
of the Internal Revenue Service. I am pleased that my colleagues have 
been able to address this important issue in a largely bipartisan 
manner, and I believe that the finished product will go far in giving 
American taxpayers the rights and protections they deserve.

[[Page H5365]]

  First, this bill includes many provisions that will insure the IRS 
and its employees are held accountable for their actions. It creates a 
nine-member board to oversee IRS administration, management, execution 
and application of internal revenue laws and provides for discipline of 
IRS employees for misconduct or violations of IRS rules or taxpayer 
rights.
  Secondly, this measure codifies and strengthens the rights of 
taxpayers in many significant ways. The IRS, rather than the taxpayer, 
will now bear the burden of proof in most tax disputes. Moreover, 
taxpayers will be allowed to sue the government for civil damages 
caused by the negligent disregard of tax laws by IRS employees. I am 
also pleased to note that it will be more difficult for an individual 
to be held responsible for mistakes made on a tax return by his or her 
spouse.
  At long last, the American taxpayer can look forward to being treated 
with respect and common sense by an agency which will finally be 
subject to meaningful standards of responsibility and accountability. I 
urge my colleagues to support passage of the conference report before 
us, so that our constituents might finally be able to reap the benefits 
of desperately-needed reform.
  Mr. COYNE. Mr. Speaker, I rise in support of the Internal Revenue 
Service Restructuring and Reform Act of 1998, which will expand 
significantly our system of taxpayer protections as well as equip the 
Internal Revenue Service (IRS) for the challenges of the 21st century. 
It has been over forty years since the Congress considered major 
reforms to the IRS, with the last being the 1952 reorganization. This 
legislation provides for a sweeping overhaul of the nation's tax agency 
and in doing so, creates the necessary foundation for the IRS to 
transform itself into the efficient and service-oriented agency 
demanded by the taxpayers. In adopting this bill, we should also not 
lose sight of the many hardworking and dedicated IRS employees, whose 
ability to serve taxpayers better will now be enhanced.
  The Congress and the Administration have worked for nearly two years 
in developing this legislation. This achievement arises from the year 
of intensive work by the National Commission on Restructuring the 
Internal Revenue Service, of which I was privileged to be a member. 
Among its many activities, the Commission held 12 public hearings, 
three field hearings and visited six IRS Service centers. We also 
interviewed more than 500 hundred individuals, including both current 
and former IRS employees and managers, congressional committee members 
and staff, executive branch officials, academics and public sector 
advisors. Above all, we sought to determine what were the most common 
problems that average taxpayers experienced with the IRS.
  In turn, it was the responsibility of the Congress and the Clinton 
Administration to translate into legislation the many constructive 
ideas generated by the Commission. In this respect, I want to thank the 
Administration, and in particular Treasury Secretary Rubin, 
Commissioner Rossotti, and their respective staffs, for their major 
contribution to the development of this legislation. Since the first 
IRS restructuring bill was introduced last summer, the Treasury 
Department and the IRS have worked closely with the House and Senate 
tax-writers to insure that the bill will be effective from a tax 
administration and tax policy standpoint. In doing so, they refined and 
improved upon many of the proposals. Equally as important, we could not 
have completed this legislation without the House and Senate tax-
writing Committees, and my fellow conferees, working together in a 
consistently bipartisan fashion.
  The conference report achieves the major objectives that were 
established by the Commission, by streamlining IRS governance and 
management, improving taxpayer protections and rights, expanding 
electronic tax filing and enhancing Congressional oversight of the IRS.
  Concerning IRS governance and management, the legislation creates a 
new IRS Oversight Board composed of six private-life members, the 
Treasury Secretary, the IRS Commissioner and an individual representing 
IRS employees. The IRS Commissioner is given new authority for managing 
the IRS, including personnel flexibilities to reorganize the agency and 
to hire experts at expanded pay-grades. The bill also increases the 
direct accountability of IRS employees to the Commissioner. To improve 
Departmental oversight of the IRS, the bill creates a new Treasury 
Inspector General for Tax Administration.

  Consistent with prior Taxpayer Bill of Rights measures, the 
Conference Report greatly expands taxpayer rights and protections. The 
bill provides ``innocent spouse'' relief to taxpayers based on a more 
generous, current-law system of equitable relief, and to divorced, 
legally-separated and married taxpayers living apart for more than one 
year, based on a system of proportionate liability. This relief applies 
to all cases that are still open before the IRS. The legislation also 
shifts the burden of proof in tax court proceedings to the IRS as long 
as the taxpayer introduces credible evidence, complies with record 
keeping rules and cooperates with reasonable IRS information requests.
  The legislation also modifies several interest and penalty rules, 
including the suspension of interest, and some penalties, when the IRS 
does not notify the taxpayer within 18 months of a return filing due 
date. This time requirement is reduced to 12 months in the year 2004. 
The bill also grants increased due process protections in IRS 
collection actions, including notification and appeals in liens, levies 
and seizures, and also requires court approval prior to the seizure of 
a principal residence. Among its other protections, the conference 
report expands the authority of the IRS Taxpayer Advocate, liberalizes 
the awarding of attorney fees in tax cases, authorizes low-income 
taxpayer clinics and expands rules for providing installment agreements 
and offers-in-compromises.
  Vital to a 21st century IRS, the conference report expands electronic 
tax return filing systems by eliminating certain related paper 
submissions, authorizing signature alternatives and providing 
electronic filing goals and incentives. These measures, along with a 
modernized IRS computer system, should result in better service for all 
taxpayers, including faster refunds, easier filing and a more 
responsive system for answering taxpayer inquiries.
  Lastly, to increase Congressional oversight of the IRS, the bill 
provides for five annual joint House-Senate hearings on the agency, and 
requires a complexity analysis to be included in each tax bill reported 
out of the tax-writing committees.
  While the Conference Agreement is fully paid for over 10 years, I am 
concerned about several revenue provisions which are used to fund this 
legislation. Most notably, the revisions to the Roth IRA will lose 
substantial revenue starting in the year 2008, just when the baby boom 
generation will place additional burdens on Social Security and 
Medicare. I also object to the replacement of the current 18-month 
long-term capital gain holding period with a 12-month holding period. 
This provision will cost $2 billion over 10 years, provide no real 
simplification, and may increase incentives for stock speculation that 
the current holding period was intended to prevent. On numerous 
occasions, I objected to some Republican's insistence that the IRS 
employee representative not be granted conflict-of-interest waivers 
that are necessary to ensure the full participation of this Board 
member. However, as agreed to by the conferees, I am now confident that 
the President will have the authority to provide appropriate waivers 
when submitting the nomination to the Senate.
  Mr. Speaker, the IRS Restructuring and Reform Act of 1998 adopts 
proposals that respond to the most common problems that taxpayers face 
with the IRS. However, I remain concerned that some of the provisions 
may be very difficult for the IRS to administer. While this bill offers 
many constructive measures, we will need to monitor closely how these 
provisions are implemented by the IRS and assist this agency by 
simplifying the tax code wherever possible.
  All of this considered, I believe that this is a good bill, and I 
urge my colleagues to support its passage.
  Mr. SHUSTER. Mr. Speaker, I rise in support of H.R. 2676, the 
conference report on the Internal Revenue Service Revenue and 
Restructuring Act. I commend Chairman Archer, ranking Member Rangel, 
Senator Roth and Senator Moynihan in crafting this important 
legislation.
  In particular, I would like to address Title IX of that Act which 
includes the text of H.R. 3978, the TEA 21 Restoration Act, with only 
slight modification. The TEA 21 Restoration Act restores inadvertent 
errors and provisions that had been agreed to by the Conferees but 
mistakenly not included in the conference report on the recently-
enacted Transportation Equity Act for the 21st Century--TEA 21.
  H.R. 3978 is consensus legislation--it had been worked out in 
cooperation with the majority and minority in both this body and with 
the Senate. H.R. 3978 passed the House by unanimous consent on June 3, 
1998. It was hoped that the legislation would quickly pass the Senate 
and be signed by the President at the same time that he signed the TEA 
21 law on June 9, 1998. Unfortunately, H.R. 3978 was unable to pass the 
Senate because of a provision unrelated to the transportation 
provisions of TEA 21, but instead one that addressed corrections to 
programs under the jurisdiction of the Committee on Veterans' Affairs.
  I am pleased that the Congress is addressing the important items 
contained in the TEA 21 Restoration Act. I want to thank Chairman 
Archer, Speaker Gingrich, Majority Leader Armey, and Senators Lott and 
Roth for agreeing to include H.R. 3978 in this legislation. I am 
particularly grateful because while the transportation portions of H.R. 
3978 did not have any effect on the federal deficit, one provision 
relating to veterans' affairs did have a modest impact and it still was 
included.

[[Page H5366]]

  I am including a summary of the provisions contained in Title IX.

 House/Senate Joint Summary of Technical Corrections to Transportation 
                    Equity Act for the 21st Century

       This legislation: (1) restores provisions agreed to by the 
     conferees; (2) makes technical corrections to provisions 
     included in H.R. 2400; and (3) eliminates duplicative program 
     authorizations.
       This legislation does not change the formula allocations 
     contained in the Conference Report to the Transportation 
     Equity Act for the 21st Century.
       The following is a section by section description of 
     provisions included in the TEA-21 Restoration Act:


                        section 9001 short title

            section 9002 authorization and program subtitle

       Adjusts funding levels for high priority projects to 
     conform with list in the conference report and to correct 
     other errors.
       Adjusts funding levels for Highway Use Tax Evasion projects 
     to allow for implementation of the Excise Fuel Tracking 
     System.
       Corrects the obligation limitation levels for mathematical 
     consistency and conforms obligation limitation treatment to 
     current practice for research programs.
       Makes other conforming and technical changes such as 
     renumbering sections and correcting cross reference.


        section 9003 restorations to general provisions subtitle

       Restores the National Historic Covered Bridge Preservation 
     program.
       Restores the Substitute Project for the Barney Circle 
     Freeway, Washington, DC.
       Restores Fiscal, Administrative and Other Amendments 
     included in both House and Senate bills.
       Removes section 1211(j) regarding winter home heating oil 
     delivery.
       Makes technical corrections to section 1211, Amendments to 
     Prior Surface Transportation laws and section 1212, 
     Miscellaneous Provisions.
       Clarifies program funding categories for Puerto Rico and 
     continues current law penalties for Puerto Rico for non-
     compliance with the federal minimum drinking age 
     requirements.
       Clarifies that contract authority is authorized for 
     provisions contained in section 1215, Designated 
     Transportation Enhancement Activities.
       Modifies Sec. 1217(j) to allow for effective implementation 
     of this subsection.
       Modifies Magnetic Levitation Deployment Program to clarify 
     eligibility of low-speed magnetic levitation technologies.
       Corrects reference to Special Olympics.


   Section 9004 restorations to program streamlining and flexibility 
                                subtitle

       Restores Discretionary Grant Selection Criteria provisions.
       Conforms Environmental Streamlining provisions to include 
     mass transit projects.


              Section 9005 restorations to safety subtitle

       Restores the Open Container Law safety program.
       Conforms the Minimum Penalties for Repeat Offenders for 
     Driving while Intoxicated program.


            Section 9006 elimination of duplicate provisions

       Eliminated duplicate provisions for San Mateo County, 
     California, the Value Pricing Pilot Program, and National 
     Defense Highways Outside the United States
       Restores the Minnesota Transportation History Network 
     provision.


                      Section 9007 highway finance

       Updates the Transportation Infrastructure Finance and 
     Innovation Act program to begin in 1999 rather than in 1998.
       Conforms the credit levels in the Transportation 
     Infrastructure Finance and Innovation program to agreed upon 
     distribution levels of budget authority.


       Section 9008 high priority projects technical corrections

       Makes technical corrections, description changes and 
     previously agreed upon additions to high priority projects.


          Section 9009 federal transit administration programs

       Makes corrections to transit planning provisions to conform 
     to provisions in title 23.
       Clarifies eligibility of clean diesel under clean fuels 
     program.
       Makes technical corrections to section 5309 and clarifies 
     the Secretary's full funding grant agreement authority.
       Funds University Transportation Centers authorized under 
     title 5.
       Restores requirement that transit grantees accept non-
     disputed audits of other government agencies when awarding 
     contracts.
       Makes corrections to the authorizations for planning, 
     University Transportation Centers, the National Transit 
     Institute and the additional amounts for new starts.
       Makes technical corrections, description changes, and 
     previously agreed upon additions to new starts projects.
       Makes technical corrections to the access to jobs and 
     reverse commute programs.
       Corrects funding level for the Rural Transportation 
     Accessibility Incentive Program and makes other technical 
     corrections.
       Makes technical corrections to study on transit in national 
     parks.
       Makes corrections to obligation limitation levels.


         section 9010 motor carrier safety technical correction

       Conforms section references for the Motor Carrier Safety 
     program.


              section 9011 restorations to research title

       Adjusts authorization levels for university transportation 
     centers to conform with modifications made in the Transit 
     title in section 9.
       Restores eligibility of Intelligent Transportation System 
     activities for innovative financing.
       Corrects drafting errors to 5116 (e) and (f).
       Makes technical and conforming changes to university 
     research provisions.
       Corrects references to the Director of the Bureau of 
     Transportation Statistics.
       Corrects drafting errors to Fundamental Properties of 
     Asphalts and Modified Asphalts research program.


             section 9012 automobile safety and information

       Corrects reference to the National Highway Traffic Safety 
     Administration.
       Makes conforming changes to provisions in Subtitle D of 
     Title VII.


  section 9013 technical corrections regarding subtitle a of title vii

       Makes corrections to offsetting adjustments for 
     discretionary spending limits.
       Makes other technical and conforming changes to Title VIII.


             section 9014 corrections to veterans subtitle

       The TEA-21 Restoration Act corrects drafting errors to Sec. 
     8201.
       The provision included in the Conference Report on TEA-21 
     to use the Veterans smoking-related disability benefits for 
     transportation was drafted incorrectly and had the unintended 
     consequence of identifying smoking as an act of ``willful 
     misconduct'' by veterans. The provision in the TEA-21 
     Restoration Act corrects any reference to smoking as an act 
     of ``willful misconduct'' by veterans.
       This provision also clarifies that veterans who have filed 
     claims for smoking-related benefits are grandfathered.
       The provision also makes clear that those active-duty 
     service personnel who contract a smoking-related illness 
     while in service continue to qualify for disability 
     compensation.
       Another correction in this bill relates to ensuring that 
     survivors and their dependents will receive a 20% increase in 
     education assistance benefits.


         section 9015 technical corrections regarding title ix

       Makes technical corrections to the Revenue title.


                      section 9016 effective date

       Provides for the effective date of this act to conform with 
     the effective date of TEA-21.

  Mr. CAMP. Mr. Speaker, I rise in strong support of H.R. 2676, the 
Internal Revenue Service Restructuring and Reform Act of 1997. Today we 
have a Republican-led fundamental, comprehensive reform of the IRS. 
This will help protect taxpayers by increasing oversight, holding IRS 
employees accountable and insuring taxpayers are treated with fairness.
  First, the burden of proof shifts to the IRS in court proceedings--
now, finally, you're innocent until proven guilty. Second, innocent 
spouses will not be held responsible for taxes due--the income-earning 
spouse will pay. Third, interest and penalty relief is provided in 
certain cases, where the IRS fails to give the proper notice to 
taxpayers. Fourth, we prohibit the IRS from seizing a taxpayer's home 
without a court order. And finally, we permit the taxpayer to collect 
up to $100,000 in civil damages resulting from IRS negligence.
  These are only a few of the changes in the first IRS reform since 
1952. And this bill is only the first step--but it's a big one, and 
it's a necessary one. Mr. Speaker, H.R. 2676 represents a critical step 
in returning government to the people we represent. I urge support for 
this important legislation.
  Mr. PACKARD. Mr. Speaker, I rise today in support of H.R. 2676, the 
Internal Revenue Service Restructuring and Reform Act. The IRS is in 
desperate need of repair. This out of control agency has not been 
reformed since 1952 and H.R. 2676 is the first step in the overhauling 
process.
  Our tax system is in need of comprehensive reform. H.R. 2676 is 
another step in the process to save taxpayers from the burden of the 
IRS giant. The IRS Restructuring and Reform Act will protect taxpayers 
by increasing oversight, holding employees accountable for their 
actions, and creating a level playing field for taxpayer rights.
  Mr. Speaker, I am sure we could all share ``IRS horror stories'' that 
our constituents have been through. It is time we act on those stories 
and reform the system. This bill will shift the burden of proof from 
the taxpayer to the IRS. Too many families pay money they do not owe, 
and too many times the weakest taxpayers are unfairly targeted by the 
IRS.
  Mr. Speaker, for too long, the IRS has been accountable to no one. It 
is time we make them accountable to those they serve--the American 
taxpayer. I urge my colleagues to support H.R. 2676.
  Mrs. FOWLER. Mr. Speaker, for many citizens, the IRS stands for 
precisely what is

[[Page H5367]]

wrong with our federal bureaucracy. Over the last few months, we've 
heard horror stories from our constituents about experiences they have 
had with the IRS. This is an agency that has had the ability to 
completely tear down a person's life, change their entire financial 
outlook and wreak irrevocable damage, sometimes with no further 
provocation than a computer glitch or a record-keeping problem.
  I know that there are many hardworking, conscientious, and caring 
individuals who work for the Internal Revenue Service, but the current 
system is simply not working the way it should. Where else but in the 
massive bureaucracy of the IRS is a person guilty, until proven 
innocent.
  This legislation will make long-overdue and necessary changes to the 
IRS, shifting the burden of proof to the agency in tax liability 
disputes, providing crucial relief to innocent spouses who have become 
unsuspecting victims of the IRS, and establishing an independent 
oversight board.
  This bipartisan bill will also take several important steps to lower 
the tax burden on individuals who are trying to plan for retirement, 
save for their children's college tuition, or buy a home by reducing 
the capital gains tax rate.
  Federal Reserve Board Chairman Alan Greenspan once said himself that, 
(quote) ``the capital gains tax is the poorest way to raise revenue.'' 
He went on to say that it is ``counterproductive to long-term economic 
growth which affects all American society.'' Indeed, since Republicans 
paved the way for the capital gains reduction in the Taxpayer Relief 
Act of last year, our economy has boomed and now the Congress is 
fortunate to be debating how to use billions of dollars expected in 
surplus revenues.
  Mr. Speaker, I support the capital gains reduction and the overall 
legislation and urge my colleagues to do the same. It is a common sense 
way to restore power to our citizens and bring about changes that will 
make the IRS more efficient, accountable, effective, and taxpayer-
friendly.
  Mr. SMITH of New Jersey. Mr. Speaker, I intend to vote in favor of 
the conference report, because we need a more taxpayer-friendly IRS. 
But I cannot cast my vote without stating my strong objection to the 
provision that changes the name of ``Most Favored Nation'' status (MFN) 
in an attempt to sugar-cost the practice of giving trade concessions to 
thugs and murderers.
  It is hard to know what is worse about this provision: its deplorable 
substance, or the sneaky and underhanded way in which it has been 
adopted. This provision was inserted in the dark of night, just a few 
hours before the Rules Committee met on this bill. It was known to be 
controversial on both sides of the aisle, but opponents were given no 
warning--not a day, not an hour, not a minute's warning--that it might 
be inserted into a bill we all strongly support. And it has nothing at 
all to do with IRS reform. It is irrelevant, non-germane, out-of-scope, 
and contrary to the rules of the House.
  On the merits, the ``normal trade relations'' provision substitutes 
an ideological slogan for a technically accurate term that is hundreds 
of years old and is universally accepted in international law and 
practice. When we sign an MFN agreement with a foreign nation, we do 
not and will not agree to give that nation something called ``normal 
trade relations.'' That term is meaningless in international law. What 
we do in these agreements, and will continue to do even after this 
provision is adopted, is agree to give that nation the same treatment 
as we give the nation that is ``most favored'' under our laws and 
treaties. So the name change is an international embarrassment--done 
for the sole purpose of making it politically more palatable to give 
MFN to China, or in the future maybe to other totalitarian dictatorship 
such as Viet Nam or North Korea.
  Mr. Speaker, maybe we can change the politics of this issue by 
changing its name, but we can't change the facts. A government that 
murders and tortures people for their political and religious beliefs, 
that forces women to undergo abortion and sterilization, that executes 
prisoners in order to sell their body parts, that steals jobs from 
American workers by producing goods in forced labor camps, is not a 
``normal'' government--and thank God for that. Unfortunately, what this 
provision says is that doing business with such a government should be 
``business as usual.''
  Mr. Speaker, if we had a fair and open debate on this provision, I 
would move that instead of changing the name of MFN to ``normal trade 
relations,'' we call it something more accurate, like ``dollars for 
dictators.''
  Again, Mr. Speaker, I will vote for the conference report because I 
strongly support IRS reform. The legislation shifts the burden of proof 
from the taxpayer to the government. It creates an independent civilian 
review board to oversee the IRS. It requires IRS to be less arbitrary 
and to provide more due process before it seizes taxpayers' property. 
And it reduces the capital gains tax. These are all important victories 
for the American taxpayer. It's just too bad that we are also handing a 
victory to Beijing and Hanoi and to their partners and cheerleaders 
here in the United States.
  Mr. ARCHER. Mr. Speaker, I yield back the balance of my time.
  The SPEAKER pro tempore. Without objection, the previous question is 
ordered on the conference report.
  There was no objection.


              Motion to Recommit Offered by Mr. Mc Dermott

  Mr. McDERMOTT. Mr. Speaker, I offer a motion to recommit.
  The SPEAKER pro tempore. Is the gentleman opposed to the conference 
report?
  Mr. McDERMOTT. Yes, I am, Mr. Speaker.
  The SPEAKER pro tempore. The Clerk will report the motion to 
recommit.
  The Clerk read as follows:

       Mr. McDermott moves to recommit the conference report on 
     the bill H.R. 2676 to the committee of conference with 
     instructions to the managers on the part of the House to 
     disagree to section 5001 (relating to lower capital gains 
     rates to apply to property held more than 1 year) in the 
     conference substitute recommended by the committee of 
     conference.

  The SPEAKER pro tempore. Without objection, the previous question is 
ordered on the motion to recommit.
  There was no objection.
  The SPEAKER pro tempore. The question is on the motion to recommit.
  The question was taken; and the Speaker pro tempore announced that 
the noes appeared to have it.
  Mr. McDERMOTT. Mr. Speaker, I object to the vote on the ground that a 
quorum is not present and make the point of order that a quorum is not 
present.
  The SPEAKER pro tempore. Evidently a quorum is not present.
  The Sergeant at Arms will notify absent Members.
  The SPEAKER pro tempore. The Chair will reduce to a minimum of 5 
minutes the period of time within which a vote by electronic device, if 
ordered, will be taken on the question of agreeing to the conference 
report.
  The vote was taken by electronic device, and there were--yeas 116 
nays 292, not voting 26, as follows:

                             [Roll No. 273]

                               YEAS--116

     Abercrombie
     Allen
     Andrews
     Baldacci
     Barrett (WI)
     Becerra
     Blagojevich
     Blumenauer
     Bonior
     Borski
     Brady (PA)
     Brown (FL)
     Brown (OH)
     Cardin
     Carson
     Clyburn
     Conyers
     Costello
     Coyne
     Cummings
     Davis (IL)
     DeFazio
     DeGette
     Delahunt
     DeLauro
     Dicks
     Doggett
     Dooley
     Edwards
     Engel
     Etheridge
     Evans
     Fattah
     Fazio
     Filner
     Ford
     Frank (MA)
     Furse
     Gejdenson
     Gephardt
     Gutierrez
     Hastings (FL)
     Hefner
     Hilliard
     Hinchey
     Hoyer
     Jackson (IL)
     Jackson-Lee (TX)
     Jefferson
     Johnson, E. B.
     Kanjorski
     Kaptur
     Kennedy (RI)
     Kildee
     Kilpatrick
     Kind (WI)
     Klink
     Kucinich
     LaFalce
     Lantos
     Lee
     Levin
     Lipinski
     Luther
     Manton
     Matsui
     McDermott
     McGovern
     McHale
     Meek (FL)
     Meeks (NY)
     Menendez
     Millender-McDonald
     Miller (CA)
     Minge
     Mink
     Nadler
     Oberstar
     Obey
     Olver
     Ortiz
     Owens
     Pallone
     Payne
     Pelosi
     Peterson (MN)
     Poshard
     Price (NC)
     Rahall
     Rangel
     Rivers
     Rodriguez
     Roybal-Allard
     Rush
     Sabo
     Sanders
     Sawyer
     Scott
     Skaggs
     Smith, Adam
     Snyder
     Spratt
     Stark
     Stenholm
     Stokes
     Strickland
     Stupak
     Thompson
     Tierney
     Towns
     Vento
     Visclosky
     Waters
     Waxman
     Wise
     Yates

                               NAYS--292

     Ackerman
     Aderholt
     Archer
     Armey
     Bachus
     Baesler
     Baker
     Ballenger
     Barcia
     Barr
     Barrett (NE)
     Bartlett
     Barton
     Bass
     Bateman
     Bentsen
     Bereuter
     Berry
     Bilbray
     Bilirakis
     Bishop
     Bliley
     Blunt
     Boehlert
     Boehner
     Bonilla
     Bono
     Boswell
     Boucher
     Boyd
     Brown (CA)
     Bryant
     Bunning
     Burr
     Burton
     Buyer
     Callahan
     Calvert
     Camp
     Campbell
     Canady
     Cannon
     Capps
     Castle
     Chabot
     Chambliss
     Chenoweth
     Christensen
     Clayton
     Clement
     Coble
     Coburn
     Collins
     Combest
     Condit
     Cook
     Cooksey
     Cramer
     Crane
     Crapo
     Cubin
     Cunningham
     Danner
     Davis (FL)
     Davis (VA)
     Deal
     DeLay
     Deutsch
     Diaz-Balart
     Dickey
     Doolittle
     Doyle
     Dreier
     Duncan
     Dunn
     Ehlers
     Ehrlich
     Emerson
     English
     Ensign
     Eshoo
     Everett
     Ewing
     Farr
     Fawell
     Foley
     Forbes
     Fossella
     Fowler
     Fox
     Franks (NJ)
     Frelinghuysen
     Frost

[[Page H5368]]


     Gallegly
     Ganske
     Gekas
     Gibbons
     Gilchrest
     Gillmor
     Gilman
     Goode
     Goodlatte
     Goodling
     Gordon
     Goss
     Graham
     Granger
     Green
     Greenwood
     Gutknecht
     Hall (OH)
     Hall (TX)
     Hansen
     Harman
     Hastert
     Hastings (WA)
     Hayworth
     Hefley
     Herger
     Hill
     Hilleary
     Hobson
     Hoekstra
     Holden
     Hooley
     Horn
     Hostettler
     Houghton
     Hunter
     Hyde
     Inglis
     Istook
     Jenkins
     John
     Johnson (CT)
     Johnson (WI)
     Johnson, Sam
     Jones
     Kasich
     Kelly
     Kennedy (MA)
     Kennelly
     Kim
     King (NY)
     Kingston
     Kleczka
     Knollenberg
     Kolbe
     LaHood
     Largent
     Latham
     LaTourette
     Lazio
     Leach
     Lewis (KY)
     Linder
     Livingston
     LoBiondo
     Lofgren
     Lowey
     Lucas
     Maloney (CT)
     Maloney (NY)
     Manzullo
     Martinez
     Mascara
     McCarthy (MO)
     McCarthy (NY)
     McCollum
     McCrery
     McHugh
     McInnis
     McIntosh
     McIntyre
     McKeon
     McKinney
     McNulty
     Metcalf
     Mica
     Miller (FL)
     Mollohan
     Moran (KS)
     Moran (VA)
     Morella
     Murtha
     Myrick
     Nethercutt
     Neumann
     Ney
     Northup
     Norwood
     Nussle
     Oxley
     Pappas
     Parker
     Pascrell
     Pastor
     Paul
     Paxon
     Pease
     Peterson (PA)
     Petri
     Pickering
     Pickett
     Pitts
     Pombo
     Pomeroy
     Porter
     Portman
     Pryce (OH)
     Quinn
     Radanovich
     Ramstad
     Redmond
     Regula
     Riggs
     Riley
     Roemer
     Rogan
     Rogers
     Rohrabacher
     Ros-Lehtinen
     Rothman
     Roukema
     Royce
     Ryun
     Salmon
     Sanchez
     Sandlin
     Sanford
     Saxton
     Scarborough
     Schaefer, Dan
     Schaffer, Bob
     Schumer
     Sensenbrenner
     Sessions
     Shadegg
     Shaw
     Shays
     Sherman
     Shimkus
     Shuster
     Sisisky
     Skeen
     Skelton
     Slaughter
     Smith (MI)
     Smith (NJ)
     Smith (OR)
     Smith (TX)
     Smith, Linda
     Snowbarger
     Solomon
     Spence
     Stabenow
     Stearns
     Stump
     Sununu
     Talent
     Tanner
     Tauscher
     Tauzin
     Taylor (MS)
     Taylor (NC)
     Thomas
     Thornberry
     Thune
     Thurman
     Tiahrt
     Torres
     Traficant
     Upton
     Walsh
     Wamp
     Watkins
     Watt (NC)
     Watts (OK)
     Weldon (FL)
     Weldon (PA)
     Weller
     Wexler
     Weygand
     White
     Whitfield
     Wicker
     Wilson
     Wolf
     Woolsey
     Wynn
     Young (AK)
     Young (FL)

                             NOT VOTING--26

     Berman
     Brady (TX)
     Clay
     Cox
     Dingell
     Dixon
     Gonzalez
     Hamilton
     Hinojosa
     Hulshof
     Hutchinson
     Klug
     Lampson
     Lewis (CA)
     Lewis (GA)
     Markey
     McDade
     Meehan
     Moakley
     Neal
     Packard
     Reyes
     Serrano
     Souder
     Turner
     Velazquez

                              {time}  1720

  Messrs. WYNN, MOLLOHAN, FAWELL, BERRY, TAYLOR of Mississippi, FROST, 
NUSSLE, KENNEDY of Massachusetts, McNULTY, ACKERMAN, GREEN, HOLDEN, 
McINTYRE, DAVIS of Florida, BROWN of California, WEYGAND, and Mrs. 
LOWEY, Mrs. CLAYTON, and Ms. McKINNEY changed their vote from ``yea'' 
to ``nay.''
  Ms. PELOSI, Mr. FAZIO of California, and Mr. STOKES changed their 
vote from ``nay'' to ``yea.''
  So the motion to recommit was rejected.
  The result of the vote was announced as above recorded.


                          Personal Explanation

  Mr. PACKARD. Mr. Speaker, I was unavoidably detained on June 25, 1998 
for rollcall vote 273. Had I been present, I would have voted ``nay.''
  The SPEAKER pro tempore (Mr. Pease). The question is on the 
conference report.
  The question was taken; and the Speaker pro tempore announced that 
the ayes appeared to have it.


                             Recorded Vote

  Mr. ARCHER. Mr. Speaker, I demand a recorded vote.
  A recorded vote was ordered.
  The SPEAKER pro tempore. This will be a 5-minute vote.
  The vote was taken by electronic device, and there were--ayes 402, 
noes 8, not voting 25, as follows:

                             [Roll No 274]

                               AYES--402

     Abercrombie
     Ackerman
     Aderholt
     Allen
     Andrews
     Archer
     Armey
     Bachus
     Baesler
     Baker
     Baldacci
     Ballenger
     Barcia
     Barr
     Barrett (NE)
     Barrett (WI)
     Bartlett
     Barton
     Bass
     Bateman
     Becerra
     Bentsen
     Bereuter
     Berry
     Bilbray
     Bilirakis
     Bishop
     Blagojevich
     Bliley
     Blumenauer
     Blunt
     Boehlert
     Boehner
     Bonilla
     Bonior
     Bono
     Borski
     Boswell
     Boucher
     Boyd
     Brady (PA)
     Brown (CA)
     Brown (FL)
     Brown (OH)
     Bryant
     Bunning
     Burr
     Burton
     Buyer
     Callahan
     Calvert
     Camp
     Campbell
     Canady
     Cannon
     Capps
     Cardin
     Carson
     Castle
     Chabot
     Chambliss
     Chenoweth
     Christensen
     Clayton
     Clement
     Clyburn
     Coble
     Coburn
     Collins
     Combest
     Condit
     Conyers
     Cook
     Cooksey
     Costello
     Cox
     Coyne
     Cramer
     Crane
     Crapo
     Cubin
     Cummings
     Cunningham
     Danner
     Davis (FL)
     Davis (IL)
     Davis (VA)
     Deal
     DeFazio
     DeGette
     Delahunt
     DeLauro
     DeLay
     Deutsch
     Diaz-Balart
     Dickey
     Dicks
     Doggett
     Dooley
     Doolittle
     Doyle
     Dreier
     Duncan
     Dunn
     Edwards
     Ehlers
     Ehrlich
     Emerson
     Engel
     English
     Ensign
     Eshoo
     Etheridge
     Evans
     Everett
     Ewing
     Farr
     Fawell
     Filner
     Foley
     Forbes
     Ford
     Fossella
     Fowler
     Fox
     Franks (NJ)
     Frelinghuysen
     Frost
     Furse
     Gallegly
     Ganske
     Gejdenson
     Gekas
     Gephardt
     Gibbons
     Gilchrest
     Gillmor
     Gilman
     Gingrich
     Goode
     Goodlatte
     Goodling
     Gordon
     Goss
     Graham
     Granger
     Green
     Greenwood
     Gutierrez
     Gutknecht
     Hall (OH)
     Hall (TX)
     Hansen
     Harman
     Hastert
     Hastings (FL)
     Hastings (WA)
     Hayworth
     Hefley
     Hefner
     Herger
     Hill
     Hilleary
     Hilliard
     Hinchey
     Hobson
     Hoekstra
     Holden
     Hooley
     Horn
     Hostettler
     Houghton
     Hoyer
     Hunter
     Hyde
     Inglis
     Istook
     Jackson (IL)
     Jackson-Lee (TX)
     Jefferson
     Jenkins
     John
     Johnson (CT)
     Johnson (WI)
     Johnson, E. B.
     Johnson, Sam
     Jones
     Kanjorski
     Kaptur
     Kasich
     Kelly
     Kennedy (MA)
     Kennedy (RI)
     Kennelly
     Kildee
     Kilpatrick
     Kim
     Kind (WI)
     King (NY)
     Kingston
     Kleczka
     Klink
     Knollenberg
     Kolbe
     Kucinich
     LaFalce
     LaHood
     Lantos
     Largent
     Latham
     LaTourette
     Lazio
     Leach
     Lee
     Levin
     Lewis (CA)
     Lewis (KY)
     Linder
     Lipinski
     Livingston
     LoBiondo
     Lofgren
     Lowey
     Lucas
     Luther
     Maloney (CT)
     Maloney (NY)
     Manton
     Manzullo
     Mascara
     McCarthy (MO)
     McCarthy (NY)
     McCollum
     McCrery
     McGovern
     McHale
     McHugh
     McInnis
     McIntosh
     McIntyre
     McKeon
     McKinney
     McNulty
     Meek (FL)
     Meeks (NY)
     Menendez
     Metcalf
     Mica
     Millender-McDonald
     Miller (CA)
     Miller (FL)
     Minge
     Mink
     Mollohan
     Moran (KS)
     Moran (VA)
     Morella
     Murtha
     Myrick
     Nadler
     Nethercutt
     Neumann
     Ney
     Northup
     Norwood
     Nussle
     Oberstar
     Obey
     Olver
     Ortiz
     Owens
     Oxley
     Pallone
     Pappas
     Parker
     Pascrell
     Pastor
     Paul
     Paxon
     Payne
     Pease
     Pelosi
     Peterson (MN)
     Peterson (PA)
     Petri
     Pickering
     Pickett
     Pitts
     Pombo
     Pomeroy
     Porter
     Portman
     Poshard
     Price (NC)
     Pryce (OH)
     Quinn
     Radanovich
     Rahall
     Ramstad
     Rangel
     Redmond
     Regula
     Riggs
     Riley
     Rivers
     Rodriguez
     Roemer
     Rogan
     Rogers
     Rohrabacher
     Ros-Lehtinen
     Rothman
     Roukema
     Roybal-Allard
     Royce
     Rush
     Ryun
     Salmon
     Sanchez
     Sanders
     Sandlin
     Sanford
     Sawyer
     Saxton
     Scarborough
     Schaefer, Dan
     Schaffer, Bob
     Schumer
     Scott
     Sensenbrenner
     Sessions
     Shadegg
     Shaw
     Shays
     Sherman
     Shimkus
     Shuster
     Sisisky
     Skaggs
     Skeen
     Skelton
     Slaughter
     Smith (MI)
     Smith (NJ)
     Smith (OR)
     Smith (TX)
     Smith, Adam
     Snowbarger
     Snyder
     Solomon
     Spence
     Spratt
     Stabenow
     Stark
     Stearns
     Stenholm
     Stokes
     Strickland
     Stump
     Stupak
     Sununu
     Talent
     Tanner
     Tauscher
     Tauzin
     Taylor (MS)
     Taylor (NC)
     Thomas
     Thompson
     Thornberry
     Thune
     Thurman
     Tiahrt
     Tierney
     Torres
     Towns
     Traficant
     Upton
     Vento
     Visclosky
     Walsh
     Wamp
     Waters
     Watkins
     Watt (NC)
     Watts (OK)
     Waxman
     Weldon (FL)
     Weldon (PA)
     Weller
     Wexler
     Weygand
     White
     Whitfield
     Wicker
     Wilson
     Wise
     Wolf
     Woolsey
     Wynn
     Young (AK)
     Young (FL)

                                NOES--8

     Fazio
     Frank (MA)
     Martinez
     Matsui
     McDermott
     Sabo
     Smith, Linda
     Yates

                             NOT VOTING--25

     Berman
     Brady (TX)
     Clay
     Dingell
     Dixon
     Fattah
     Gonzalez
     Hamilton
     Hinojosa
     Hulshof
     Hutchinson
     Klug
     Lampson
     Lewis (GA)
     Markey
     McDade
     Meehan
     Moakley
     Neal
     Packard
     Reyes
     Serrano
     Souder
     Turner
     Velazquez

                              {time}  1733

  So the conference report was agreed to.
  The result of the vote was announced as above recorded.
  A motion to reconsider was laid on the table.

                          ____________________