[Congressional Record Volume 148, Number 147 (Thursday, November 14, 2002)]
[House]
[Pages H8794-H8801]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                 ARMED FORCES TAX FAIRNESS ACT OF 2002

  Mr. THOMAS. Mr. Speaker, pursuant to House Resolution 609, I call up 
the bill (H.R. 5063) to amend the Internal Revenue Code of 1986 to 
provide a special rule for members of the uniformed services in 
determining the exclusion of gain from the sale of a principal 
residence and to restore the tax exempt status of death gratuity 
payments to members of the uniformed services and ask for its immediate 
consideration.
  The Clerk read the title of the bill.


                      Motion Offered by Mr. Thomas

  Mr. THOMAS. Mr. Speaker, I offer a motion.
  The SPEAKER pro tempore (Mr. Simpson). The Clerk will designate the 
motion.
  The text of the motion is as follows:

       A motion offered by Mr. Thomas that the House concur in 
     each of the Senate amendments with the respective amendment 
     printed in House Report 107-784, as follows:
       Senate amendments:
       Strike out all after the enacting clause and insert:

     SECTION 1. SHORT TITLE; ETC.

       (a) Short Title.--This Act may be cited as the ``Armed 
     Forces Tax Fairness Act of 2002''.
       (b) Amendment of 1986 Code.--Except as otherwise expressly 
     provided, whenever in this Act an amendment or repeal is 
     expressed in terms of an amendment to, or repeal of, a 
     section or other provision, the reference shall be considered 
     to be made to a section or other provision of the Internal 
     Revenue Code of 1986.
       (c) Table of Contents.--The table of contents for this Act 
     is as follows:

Sec. 1. Short title; etc.

          TITLE I--IMPROVING TAX EQUITY FOR MILITARY PERSONNEL

Sec. 101. Exclusion from gross income of certain death gratuity 
              payments.
Sec. 102. Exclusion of gain from sale of a principal residence by a 
              member of the uniformed services or the Foreign Service.
Sec. 103. Exclusion for amounts received under Department of Defense 
              Homeowners Assistance Program.
Sec. 104. Expansion of combat zone filing rules to contingency 
              operations.
Sec. 105. Above-the-line deduction for overnight travel expenses of 
              National Guard and Reserve members.
Sec. 106. Modification of membership requirement for exemption from tax 
              for certain veterans' organizations.
Sec. 107. Clarification of treatment of certain dependent care 
              assistance programs.

                       TITLE II--OTHER PROVISIONS

Sec. 201. Revision of tax rules on expatriation.
Sec. 202. Extension of IRS user fees.
Sec. 203. Partial payment of tax liability in installment agreements.

          TITLE I--IMPROVING TAX EQUITY FOR MILITARY PERSONNEL

     SEC. 101. EXCLUSION FROM GROSS INCOME OF CERTAIN DEATH 
                   GRATUITY PAYMENTS.

       (a) In General.--Subsection (b)(3) of section 134 (relating 
     to certain military benefits) is amended by adding at the end 
     the following new subparagraph:
       ``(C) Exception for death gratuity adjustments made by 
     law.--Subparagraph (A) shall not apply to any adjustment to 
     the amount of death gratuity payable under chapter 75 of 
     title 10, United States Code, which is pursuant to a 
     provision of law enacted after September 9, 1986.''.
       (b) Conforming Amendment.--Subparagraph (A) of section 
     134(b)(3) is amended by striking ``subparagraph (B)'' and 
     inserting ``subparagraphs (B) and (C)''.
       (c) Effective Date.--The amendments made by this section 
     shall apply with respect to deaths occurring after September 
     10, 2001.

     SEC. 102. EXCLUSION OF GAIN FROM SALE OF A PRINCIPAL 
                   RESIDENCE BY A MEMBER OF THE UNIFORMED SERVICES 
                   OR THE FOREIGN SERVICE.

       (a) In General.--Subsection (d) of section 121 (relating to 
     exclusion of gain from sale of principal residence) is 
     amended by adding at the end the following new paragraph:
       ``(9) Members of uniformed services and foreign service.--
       ``(A) In general.--At the election of an individual with 
     respect to a property, the running of the 5-year period 
     described in subsection (a) with respect to such property 
     shall be suspended during any period that such individual or 
     such individual's spouse is serving on qualified official 
     extended duty as a member of the uniformed services or of the 
     Foreign Service of the United States.
       ``(B) Maximum period of suspension.--The 5-year period 
     described in subsection (a) shall not be extended more than 
     10 years by reason of subparagraph (A).
       ``(C) Qualified official extended duty.--For purposes of 
     this paragraph--
       ``(i) In general.--The term `qualified official extended 
     duty' means any extended duty while serving at a duty station 
     which is at least 50 miles from such property or while 
     residing under Government orders in Government quarters.
       ``(ii) Uniformed services.--The term `uniformed services' 
     has the meaning given such term by section 101(a)(5) of title 
     10, United States Code, as in effect on the date of the 
     enactment of this paragraph.
       ``(iii) Foreign service of the united states.--The term 
     `member of the Foreign Service of the United States' has the 
     meaning given the term `member of the Service' by paragraph 
     (1), (2), (3), (4), or (5) of section 103 of the Foreign 
     Service Act of 1980.
       ``(iv) Extended duty.--The term `extended duty' means any 
     period of duty pursuant to a call or order to such duty for a 
     period in excess of 90 days or for an indefinite period.
       ``(D) Special rules relating to election.--
       ``(i) Election limited to 1 property at a time.--An 
     election under subparagraph (A) with respect to any property 
     may not be made if such an election is in effect with respect 
     to any other property.
       ``(ii) Revocation of election.--An election under 
     subparagraph (A) may be revoked at any time.''.
       (b) Effective Date; Special Rule.--
       (1) Effective date.--The amendment made by this section 
     shall take effect as if included in the amendments made by 
     section 312 of the Taxpayer Relief Act of 1997.
       (2) Waiver of limitations.--If refund or credit of any 
     overpayment of tax resulting from the amendment made by this 
     section is prevented at any time before the close of the 1-
     year period beginning on the date of the enactment of this 
     Act by the operation of any law or rule of law (including res 
     judicata), such refund or credit may nevertheless be made or 
     allowed if claim therefor is filed before the close of such 
     period.

     SEC. 103. EXCLUSION FOR AMOUNTS RECEIVED UNDER DEPARTMENT OF 
                   DEFENSE HOMEOWNERS ASSISTANCE PROGRAM.

       (a) In General.--Section 132(a) (relating to the exclusion 
     from gross income of certain fringe benefits) is amended by 
     striking ``or'' at the end of paragraph (6), by striking the 
     period at the end of paragraph (7) and inserting ``, or'' and 
     by adding at the end the following new paragraph:
       ``(8) qualified military base realignment and closure 
     fringe.''.
       (b) Qualified Military Base Realignment and Closure 
     Fringe.--Section 132 is amended by redesignating subsection 
     (n) as subsection (o) and by inserting after subsection (m) 
     the following new subsection:
       ``(n) Qualified Military Base Realignment and Closure 
     Fringe.--For purposes of this section, the term `qualified 
     military base realignment and closure fringe' means 1 or more 
     payments under the authority of section 1013 of the 
     Demonstration Cities and Metropolitan Development Act of 1966 
     (42 U.S.C. 3374) to offset the adverse effects on housing 
     values as a result of a military base realignment or 
     closure.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to payments made after the date of the enactment 
     of this Act.

     SEC. 104. EXPANSION OF COMBAT ZONE FILING RULES TO 
                   CONTINGENCY OPERATIONS.

       (a) In General.--Section 7508(a) (relating to time for 
     performing certain acts postponed by reason of service in 
     combat zone) is amended--
       (1) by inserting ``or when deployed outside the United 
     States away from the individual's permanent duty station 
     while participating in an operation designated by the 
     Secretary of Defense as a contingency operation (as defined 
     in section 101(a)(13) of title 10, United States Code) or 
     which became such a contingency operation by operation of 
     law'' after ``section 112'',
       (2) by inserting in the first sentence ``or at any time 
     during the period of such contingency operation'' after ``for 
     purposes of such section'',
       (3) by inserting ``or operation'' after ``such an area'', 
     and

[[Page H8795]]

       (4) by inserting ``or operation'' after ``such area''.
       (b) Conforming Amendments.--
       (1) Section 7508(d) is amended by inserting ``or 
     contingency operation'' after ``area''.
       (2) The heading for section 7508 is amended by inserting 
     ``OR CONTINGENCY OPERATION'' after ``COMBAT ZONE''.
       (3) The item relating to section 7508 in the table of 
     sections for chapter 77 is amended by inserting ``or 
     contingency operation'' after ``combat zone''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to any period for performing an act which has not 
     expired before the date of the enactment of this Act.

     SEC. 105. ABOVE-THE-LINE DEDUCTION FOR OVERNIGHT TRAVEL 
                   EXPENSES OF NATIONAL GUARD AND RESERVE MEMBERS.

       (a) Deduction Allowed.--Section 162 (relating to certain 
     trade or business expenses) is amended by redesignating 
     subsection (p) as subsection (q) and inserting after 
     subsection (o) the following new subsection:
       ``(p) Treatment of Expenses of Members of Reserve Component 
     of Armed Forces of the United States.--For purposes of 
     subsection (a)(2), in the case of an individual who performs 
     services as a member of a reserve component of the Armed 
     Forces of the United States at any time during the taxable 
     year, such individual shall be deemed to be away from home in 
     the pursuit of a trade or business for any period during 
     which such individual is away from home in connection with 
     such service.''.
       (b) Deduction Allowed Whether or Not Taxpayer Elects To 
     Itemize.--Section 62(a)(2) (relating to certain trade and 
     business deductions of employees) is amended by adding at the 
     end the following new subparagraph:
       ``(E) Certain expenses of members of reserve components of 
     the armed forces of the united states.--The deductions 
     allowed by section 162 which consist of expenses, in amounts 
     not in excess of the rates for travel expenses (including per 
     diem in lieu of subsistence) authorized for employees of 
     agencies under subchapter I of chapter 57 of title 5, United 
     States Code, paid or incurred by the taxpayer in connection 
     with the performance of services by such taxpayer as a member 
     of a reserve component of the Armed Forces of the United 
     States.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to amounts paid or incurred in taxable years 
     beginning after December 31, 2001.

     SEC. 106. MODIFICATION OF MEMBERSHIP REQUIREMENT FOR 
                   EXEMPTION FROM TAX FOR CERTAIN VETERANS' 
                   ORGANIZATIONS.

       (a) In General.--Subparagraph (B) of section 501(c)(19) 
     (relating to list of exempt organizations) is amended by 
     striking ``or widowers'' and inserting ``, widowers, or 
     ancestors or lineal descendants''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after the date of the 
     enactment of this Act.

     SEC. 107. CLARIFICATION OF THE TREATMENT OF CERTAIN DEPENDENT 
                   CARE ASSISTANCE PROGRAMS.

       (a) In General.--Section 134(b) (defining qualified 
     military benefit) is amended by adding at the end the 
     following new paragraph:
       ``(4) Clarification of certain benefits.--For purposes of 
     paragraph (1), such term includes any dependent care 
     assistance program for any individual described in paragraph 
     (1)(A).''.
       (b) Conforming Amendments.--
       (1) Section 134(b)(3)(A) is amended by inserting ``and 
     paragraph (4)'' after ``subparagraph (B)''.
       (2) Section 3121(a)(18) is amended by striking ``or 129'' 
     and inserting ``, 129, or 134(b)(4)''.
       (3) Section 3306(b)(13) is amended by striking ``or 129'' 
     and inserting ``, 129, or 134(b)(4)''.
       (4) Section 3401(a)(18) is amended by striking ``or 129'' 
     and inserting ``, 129, or 134(b)(4)''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2001.
       (d) No Inference.--No inference may be drawn from the 
     amendments made by this section with respect to the tax 
     treatment of any amounts under the program described in 
     section 134(b)(4) of the Internal Revenue Code of 1986 (as 
     added by this section) for any taxable year beginning before 
     January 1, 2002.

                       TITLE II--OTHER PROVISIONS

     SEC. 201. REVISION OF TAX RULES ON EXPATRIATION.

       (a) In General.--Subpart A of part II of subchapter N of 
     chapter 1 is amended by inserting after section 877 the 
     following new section:

     ``SEC. 877A. TAX RESPONSIBILITIES OF EXPATRIATION.

       ``(a) General Rules.--For purposes of this subtitle--
       ``(1) Mark to market.--Except as provided in subsections 
     (d) and (f), all property of a covered expatriate to whom 
     this section applies shall be treated as sold on the day 
     before the expatriation date for its fair market value.
       ``(2) Recognition of gain or loss.--In the case of any sale 
     under paragraph (1)--
       ``(A) notwithstanding any other provision of this title, 
     any gain arising from such sale shall be taken into account 
     for the taxable year of the sale, and
       ``(B) any loss arising from such sale shall be taken into 
     account for the taxable year of the sale to the extent 
     otherwise provided by this title, except that section 1091 
     shall not apply to any such loss.

     Proper adjustment shall be made in the amount of any gain or 
     loss subsequently realized for gain or loss taken into 
     account under the preceding sentence.
       ``(3) Exclusion for certain gain.--
       ``(A) In general.--The amount which, but for this 
     paragraph, would be includible in the gross income of any 
     individual by reason of this section shall be reduced (but 
     not below zero) by $600,000. For purposes of this paragraph, 
     allocable expatriation gain taken into account under 
     subsection (f)(2) shall be treated in the same manner as an 
     amount required to be includible in gross income.
       ``(B) Cost-of-living adjustment.--
       ``(i) In general.--In the case of an expatriation date 
     occurring in any calendar year after 2002, the $600,000 
     amount under subparagraph (A) shall be increased by an amount 
     equal to--

       ``(I) such dollar amount, multiplied by
       ``(II) the cost-of-living adjustment determined under 
     section 1(f)(3) for such calendar year, determined by 
     substituting `calendar year 2001' for `calendar year 1992' in 
     subparagraph (B) thereof.

       ``(ii) Rounding rules.--If any amount after adjustment 
     under clause (i) is not a multiple of $1,000, such amount 
     shall be rounded to the next lower multiple of $1,000.
       ``(4) Election to continue to be taxed as united states 
     citizen.--
       ``(A) In general.--If a covered expatriate elects the 
     application of this paragraph--
       ``(i) this section (other than this paragraph and 
     subsection (i)) shall not apply to the expatriate, but
       ``(ii) in the case of property to which this section would 
     apply but for such election, the expatriate shall be subject 
     to tax under this title in the same manner as if the 
     individual were a United States citizen.
       ``(B) Requirements.--Subparagraph (A) shall not apply to an 
     individual unless the individual--
       ``(i) provides security for payment of tax in such form and 
     manner, and in such amount, as the Secretary may require,
       ``(ii) consents to the waiver of any right of the 
     individual under any treaty of the United States which would 
     preclude assessment or collection of any tax which may be 
     imposed by reason of this paragraph, and
       ``(iii) complies with such other requirements as the 
     Secretary may prescribe.
       ``(C) Election.--An election under subparagraph (A) shall 
     apply to all property to which this section would apply but 
     for the election and, once made, shall be irrevocable. Such 
     election shall also apply to property the basis of which is 
     determined in whole or in part by reference to the property 
     with respect to which the election was made.
       ``(b) Election To Defer Tax.--
       ``(1) In general.--If the taxpayer elects the application 
     of this subsection with respect to any property treated as 
     sold by reason of subsection (a), the payment of the 
     additional tax attributable to such property shall be 
     postponed until the due date of the return for the taxable 
     year in which such property is disposed of (or, in the case 
     of property disposed of in a transaction in which gain is not 
     recognized in whole or in part, until such other date as the 
     Secretary may prescribe).
       ``(2) Determination of tax with respect to property.--For 
     purposes of paragraph (1), the additional tax attributable to 
     any property is an amount which bears the same ratio to the 
     additional tax imposed by this chapter for the taxable year 
     solely by reason of subsection (a) as the gain taken into 
     account under subsection (a) with respect to such property 
     bears to the total gain taken into account under subsection 
     (a) with respect to all property to which subsection (a) 
     applies.
       ``(3) Termination of postponement.--No tax may be postponed 
     under this subsection later than the due date for the return 
     of tax imposed by this chapter for the taxable year which 
     includes the date of death of the expatriate (or, if earlier, 
     the time that the security provided with respect to the 
     property fails to meet the requirements of paragraph (4), 
     unless the taxpayer corrects such failure within the time 
     specified by the Secretary).
       ``(4) Security.--
       ``(A) In general.--No election may be made under paragraph 
     (1) with respect to any property unless adequate security is 
     provided to the Secretary with respect to such property.
       ``(B) Adequate security.--For purposes of subparagraph (A), 
     security with respect to any property shall be treated as 
     adequate security if--
       ``(i) it is a bond in an amount equal to the deferred tax 
     amount under paragraph (2) for the property, or
       ``(ii) the taxpayer otherwise establishes to the 
     satisfaction of the Secretary that the security is adequate.
       ``(5) Waiver of certain rights.--No election may be made 
     under paragraph (1) unless the taxpayer consents to the 
     waiver of any right under any treaty of the United States 
     which would preclude assessment or collection of any tax 
     imposed by reason of this section.
       ``(6) Elections.--An election under paragraph (1) shall 
     only apply to property described in the election and, once 
     made, is irrevocable. An election may be made under paragraph 
     (1) with respect to an interest in a trust with respect to 
     which gain is required to be recognized under subsection 
     (f)(1).
       ``(7) Interest.--For purposes of section 6601--
       ``(A) the last date for the payment of tax shall be 
     determined without regard to the election under this 
     subsection, and
       ``(B) section 6621(a)(2) shall be applied by substituting 
     `5 percentage points' for `3 percentage points' in 
     subparagraph (B) thereof.
       ``(c) Covered Expatriate.--For purposes of this section--
       ``(1) In general.--Except as provided in paragraph (2), the 
     term `covered expatriate' means an expatriate.

[[Page H8796]]

       ``(2) Exceptions.--An individual shall not be treated as a 
     covered expatriate if--
       ``(A) the individual--
       ``(i) became at birth a citizen of the United States and a 
     citizen of another country and, as of the expatriation date, 
     continues to be a citizen of, and is taxed as a resident of, 
     such other country, and
       ``(ii) has not been a resident of the United States (as 
     defined in section 7701(b)(1)(A)(ii)) during the 5 taxable 
     years ending with the taxable year during which the 
     expatriation date occurs, or
       ``(B)(i) the individual's relinquishment of United States 
     citizenship occurs before such individual attains age 18\1/
     2\, and
       ``(ii) the individual has been a resident of the United 
     States (as so defined) for not more than 5 taxable years 
     before the date of relinquishment.
       ``(d) Exempt Property; Special Rules for Pension Plans.--
       ``(1) Exempt property.--This section shall not apply to the 
     following:
       ``(A) United states real property interests.--Any United 
     States real property interest (as defined in section 
     897(c)(1)), other than stock of a United States real property 
     holding corporation which does not, on the day before the 
     expatriation date, meet the requirements of section 
     897(c)(2).
       ``(B) Specified property.--Any property or interest in 
     property not described in subparagraph (A) which the 
     Secretary specifies in regulations.
       ``(2) Special rules for certain retirement plans.--
       ``(A) In general.--If a covered expatriate holds on the day 
     before the expatriation date any interest in a retirement 
     plan to which this paragraph applies--
       ``(i) such interest shall not be treated as sold for 
     purposes of subsection (a)(1), but
       ``(ii) an amount equal to the present value of the 
     expatriate's nonforfeitable accrued benefit shall be treated 
     as having been received by such individual on such date as a 
     distribution under the plan.
       ``(B) Treatment of subsequent distributions.--In the case 
     of any distribution on or after the expatriation date to or 
     on behalf of the covered expatriate from a plan from which 
     the expatriate was treated as receiving a distribution under 
     subparagraph (A), the amount otherwise includible in gross 
     income by reason of the subsequent distribution shall be 
     reduced by the excess of the amount includible in gross 
     income under subparagraph (A) over any portion of such amount 
     to which this subparagraph previously applied.
       ``(C) Treatment of subsequent distributions by plan.--For 
     purposes of this title, a retirement plan to which this 
     paragraph applies, and any person acting on the plan's 
     behalf, shall treat any subsequent distribution described in 
     subparagraph (B) in the same manner as such distribution 
     would be treated without regard to this paragraph.
       ``(D) Applicable plans.--This paragraph shall apply to--
       ``(i) any qualified retirement plan (as defined in section 
     4974(c)),
       ``(ii) an eligible deferred compensation plan (as defined 
     in section 457(b)) of an eligible employer described in 
     section 457(e)(1)(A), and
       ``(iii) to the extent provided in regulations, any foreign 
     pension plan or similar retirement arrangements or programs.
       ``(e) Definitions.--For purposes of this section--
       ``(1) Expatriate.--The term `expatriate' means--
       ``(A) any United States citizen who relinquishes 
     citizenship, and
       ``(B) any long-term resident of the United States who--
       ``(i) ceases to be a lawful permanent resident of the 
     United States (within the meaning of section 7701(b)(6)), or
       ``(ii) commences to be treated as a resident of a foreign 
     country under the provisions of a tax treaty between the 
     United States and the foreign country and who does not waive 
     the benefits of such treaty applicable to residents of the 
     foreign country.
       ``(2) Expatriation date.--The term `expatriation date' 
     means--
       ``(A) the date an individual relinquishes United States 
     citizenship, or
       ``(B) in the case of a long-term resident of the United 
     States, the date of the event described in clause (i) or (ii) 
     of paragraph (1)(B).
       ``(3) Relinquishment of citizenship.--A citizen shall be 
     treated as relinquishing United States citizenship on the 
     earliest of--
       ``(A) the date the individual renounces such individual's 
     United States nationality before a diplomatic or consular 
     officer of the United States pursuant to paragraph (5) of 
     section 349(a) of the Immigration and Nationality Act (8 
     U.S.C. 1481(a)(5)),
       ``(B) the date the individual furnishes to the United 
     States Department of State a signed statement of voluntary 
     relinquishment of United States nationality confirming the 
     performance of an act of expatriation specified in paragraph 
     (1), (2), (3), or (4) of section 349(a) of the Immigration 
     and Nationality Act (8 U.S.C. 1481(a)(1)-(4)),
       ``(C) the date the United States Department of State issues 
     to the individual a certificate of loss of nationality, or
       ``(D) the date a court of the United States cancels a 
     naturalized citizen's certificate of naturalization.

     Subparagraph (A) or (B) shall not apply to any individual 
     unless the renunciation or voluntary relinquishment is 
     subsequently approved by the issuance to the individual of a 
     certificate of loss of nationality by the United States 
     Department of State.
       ``(4) Long-term resident.--The term `long-term resident' 
     has the meaning given to such term by section 877(e)(2).
       ``(f) Special Rules Applicable to Beneficiaries' Interests 
     in Trust.--
       ``(1) In general.--Except as provided in paragraph (2), if 
     an individual is determined under paragraph (3) to hold an 
     interest in a trust on the day before the expatriation date--
       ``(A) the individual shall not be treated as having sold 
     such interest,
       ``(B) such interest shall be treated as a separate share in 
     the trust, and
       ``(C)(i) such separate share shall be treated as a separate 
     trust consisting of the assets allocable to such share,
       ``(ii) the separate trust shall be treated as having sold 
     its assets on the day before the expatriation date for their 
     fair market value and as having distributed all of its assets 
     to the individual as of such time, and
       ``(iii) the individual shall be treated as having 
     recontributed the assets to the separate trust.
     Subsection (a)(2) shall apply to any income, gain, or loss of 
     the individual arising from a distribution described in 
     subparagraph (C)(ii). In determining the amount of such 
     distribution, proper adjustments shall be made for 
     liabilities of the trust allocable to an individual's share 
     in the trust.
       ``(2) Special rules for interests in qualified trusts.--
       ``(A) In general.--If the trust interest described in 
     paragraph (1) is an interest in a qualified trust--
       ``(i) paragraph (1) and subsection (a) shall not apply, and
       ``(ii) in addition to any other tax imposed by this title, 
     there is hereby imposed on each distribution with respect to 
     such interest a tax in the amount determined under 
     subparagraph (B).
       ``(B) Amount of tax.--The amount of tax under subparagraph 
     (A)(ii) shall be equal to the lesser of--
       ``(i) the highest rate of tax imposed by section 1(e) for 
     the taxable year which includes the day before the 
     expatriation date, multiplied by the amount of the 
     distribution, or
       ``(ii) the balance in the deferred tax account immediately 
     before the distribution determined without regard to any 
     increases under subparagraph (C)(ii) after the 30th day 
     preceding the distribution.
       ``(C) Deferred tax account.--For purposes of subparagraph 
     (B)(ii)--
       ``(i) Opening balance.--The opening balance in a deferred 
     tax account with respect to any trust interest is an amount 
     equal to the tax which would have been imposed on the 
     allocable expatriation gain with respect to the trust 
     interest if such gain had been included in gross income under 
     subsection (a).
       ``(ii) Increase for interest.--The balance in the deferred 
     tax account shall be increased by the amount of interest 
     determined (on the balance in the account at the time the 
     interest accrues), for periods after the 90th day after the 
     expatriation date, by using the rates and method applicable 
     under section 6621 for underpayments of tax for such periods, 
     except that section 6621(a)(2) shall be applied by 
     substituting `5 percentage points' for `3 percentage points' 
     in subparagraph (B) thereof.
       ``(iii) Decrease for taxes previously paid.--The balance in 
     the tax deferred account shall be reduced--

       ``(I) by the amount of taxes imposed by subparagraph (A) on 
     any distribution to the person holding the trust interest, 
     and
       ``(II) in the case of a person holding a nonvested 
     interest, to the extent provided in regulations, by the 
     amount of taxes imposed by subparagraph (A) on distributions 
     from the trust with respect to nonvested interests not held 
     by such person.

       ``(D) Allocable expatriation gain.--For purposes of this 
     paragraph, the allocable expatriation gain with respect to 
     any beneficiary's interest in a trust is the amount of gain 
     which would be allocable to such beneficiary's vested and 
     nonvested interests in the trust if the beneficiary held 
     directly all assets allocable to such interests.
       ``(E) Tax deducted and withheld.--
       ``(i) In general.--The tax imposed by subparagraph (A)(ii) 
     shall be deducted and withheld by the trustees from the 
     distribution to which it relates.
       ``(ii) Exception where failure to waive treaty rights.--If 
     an amount may not be deducted and withheld under clause (i) 
     by reason of the distributee failing to waive any treaty 
     right with respect to such distribution--

       ``(I) the tax imposed by subparagraph (A)(ii) shall be 
     imposed on the trust and each trustee shall be personally 
     liable for the amount of such tax, and
       ``(II) any other beneficiary of the trust shall be entitled 
     to recover from the distributee the amount of such tax 
     imposed on the other beneficiary.

       ``(F) Disposition.--If a trust ceases to be a qualified 
     trust at any time, a covered expatriate disposes of an 
     interest in a qualified trust, or a covered expatriate 
     holding an interest in a qualified trust dies, then, in lieu 
     of the tax imposed by subparagraph (A)(ii), there is hereby 
     imposed a tax equal to the lesser of--
       ``(i) the tax determined under paragraph (1) as if the day 
     before the expatriation date were the date of such cessation, 
     disposition, or death, whichever is applicable, or
       ``(ii) the balance in the tax deferred account immediately 
     before such date.

     Such tax shall be imposed on the trust and each trustee shall 
     be personally liable for the amount of such tax and any other 
     beneficiary of the trust shall be entitled to recover from 
     the covered expatriate or the estate the amount of such tax 
     imposed on the other beneficiary.
       ``(G) Definitions and special rules.--For purposes of this 
     paragraph--

[[Page H8797]]

       ``(i) Qualified trust.--The term `qualified trust' means a 
     trust which is described in section 7701(a)(30)(E).
       ``(ii) Vested interest.--The term `vested interest' means 
     any interest which, as of the day before the expatriation 
     date, is vested in the beneficiary.
       ``(iii) Nonvested interest.--The term `nonvested interest' 
     means, with respect to any beneficiary, any interest in a 
     trust which is not a vested interest. Such interest shall be 
     determined by assuming the maximum exercise of discretion in 
     favor of the beneficiary and the occurrence of all 
     contingencies in favor of the beneficiary.
       ``(iv) Adjustments.--The Secretary may provide for such 
     adjustments to the bases of assets in a trust or a deferred 
     tax account, and the timing of such adjustments, in order to 
     ensure that gain is taxed only once.
       ``(v) Coordination with retirement plan rules.--This 
     subsection shall not apply to an interest in a trust which is 
     part of a retirement plan to which subsection (d)(2) applies.
       ``(3) Determination of beneficiaries' interest in trust.--
       ``(A) Determinations under paragraph (1).--For purposes of 
     paragraph (1), a beneficiary's interest in a trust shall be 
     based upon all relevant facts and circumstances, including 
     the terms of the trust instrument and any letter of wishes or 
     similar document, historical patterns of trust distributions, 
     and the existence of and functions performed by a trust 
     protector or any similar adviser.
       ``(B) Other determinations.--For purposes of this section--
       ``(i) Constructive ownership.--If a beneficiary of a trust 
     is a corporation, partnership, trust, or estate, the 
     shareholders, partners, or beneficiaries shall be deemed to 
     be the trust beneficiaries for purposes of this section.
       ``(ii) Taxpayer return position.--A taxpayer shall clearly 
     indicate on its income tax return--

       ``(I) the methodology used to determine that taxpayer's 
     trust interest under this section, and
       ``(II) if the taxpayer knows (or has reason to know) that 
     any other beneficiary of such trust is using a different 
     methodology to determine such beneficiary's trust interest 
     under this section.

       ``(g) Termination of Deferrals, Etc.--In the case of any 
     covered expatriate, notwithstanding any other provision of 
     this title--
       ``(1) any period during which recognition of income or gain 
     is deferred shall terminate on the day before the 
     expatriation date, and
       ``(2) any extension of time for payment of tax shall cease 
     to apply on the day before the expatriation date and the 
     unpaid portion of such tax shall be due and payable at the 
     time and in the manner prescribed by the Secretary.
       ``(h) Imposition of Tentative Tax.--
       ``(1) In general.--If an individual is required to include 
     any amount in gross income under subsection (a) for any 
     taxable year, there is hereby imposed, immediately before the 
     expatriation date, a tax in an amount equal to the amount of 
     tax which would be imposed if the taxable year were a short 
     taxable year ending on the expatriation date.
       ``(2) Due date.--The due date for any tax imposed by 
     paragraph (1) shall be the 90th day after the expatriation 
     date.
       ``(3) Treatment of tax.--Any tax paid under paragraph (1) 
     shall be treated as a payment of the tax imposed by this 
     chapter for the taxable year to which subsection (a) applies.
       ``(4) Deferral of tax.--The provisions of subsection (b) 
     shall apply to the tax imposed by this subsection to the 
     extent attributable to gain includible in gross income by 
     reason of this section.
       ``(i) Special Liens for Deferred Tax Amounts.--
       ``(1) Imposition of lien.--
       ``(A) In general.--If a covered expatriate makes an 
     election under subsection (a)(4) or (b) which results in the 
     deferral of any tax imposed by reason of subsection (a), the 
     deferred amount (including any interest, additional amount, 
     addition to tax, assessable penalty, and costs attributable 
     to the deferred amount) shall be a lien in favor of the 
     United States on all property of the expatriate located in 
     the United States (without regard to whether this section 
     applies to the property).
       ``(B) Deferred amount.--For purposes of this subsection, 
     the deferred amount is the amount of the increase in the 
     covered expatriate's income tax which, but for the election 
     under subsection (a)(4) or (b), would have occurred by reason 
     of this section for the taxable year including the 
     expatriation date.
       ``(2) Period of lien.--The lien imposed by this subsection 
     shall arise on the expatriation date and continue until--
       ``(A) the liability for tax by reason of this section is 
     satisfied or has become unenforceable by reason of lapse of 
     time, or
       ``(B) it is established to the satisfaction of the 
     Secretary that no further tax liability may arise by reason 
     of this section.
       ``(3) Certain rules apply.--The rules set forth in 
     paragraphs (1), (3), and (4) of section 6324A(d) shall apply 
     with respect to the lien imposed by this subsection as if it 
     were a lien imposed by section 6324A.
       ``(j) Regulations.--The Secretary shall prescribe such 
     regulations as may be necessary or appropriate to carry out 
     the purposes of this section.''.
       (b) Inclusion in Income of Gifts and Bequests Received by 
     United States Citizens and Residents From Expatriates.--
     Section 102 (relating to gifts, etc. not included in gross 
     income) is amended by adding at the end the following new 
     subsection:
       ``(d) Gifts and Inheritances From Covered Expatriates.--
       ``(1) In general.--Subsection (a) shall not exclude from 
     gross income the value of any property acquired by gift, 
     bequest, devise, or inheritance from a covered expatriate 
     after the expatriation date. For purposes of this subsection, 
     any term used in this subsection which is also used in 
     section 877A shall have the same meaning as when used in 
     section 877A.
       ``(2) Exceptions for transfers otherwise subject to estate 
     or gift tax.--Paragraph (1) shall not apply to any property 
     if either--
       ``(A) the gift, bequest, devise, or inheritance is--
       ``(i) shown on a timely filed return of tax imposed by 
     chapter 12 as a taxable gift by the covered expatriate, or
       ``(ii) included in the gross estate of the covered 
     expatriate for purposes of chapter 11 and shown on a timely 
     filed return of tax imposed by chapter 11 of the estate of 
     the covered expatriate, or
       ``(B) no such return was timely filed but no such return 
     would have been required to be filed even if the covered 
     expatriate were a citizen or long-term resident of the United 
     States.''.
       (c) Definition of Termination of United States 
     Citizenship.--Section 7701(a) is amended by adding at the end 
     the following new paragraph:
       ``(48) Termination of united states citizenship.--
       ``(A) In general.--An individual shall not cease to be 
     treated as a United States citizen before the date on which 
     the individual's citizenship is treated as relinquished under 
     section 877A(e)(3).
       ``(B) Dual citizens.--Under regulations prescribed by the 
     Secretary, subparagraph (A) shall not apply to an individual 
     who became at birth a citizen of the United States and a 
     citizen of another country.''.
       (d) Ineligibility for Visa or Admission To United States.--
       (1) In general.--Section 212(a)(10)(E) of the Immigration 
     and Nationality Act (8 U.S.C. 1182(a)(10)(E)) is amended to 
     read as follows:
       ``(E) Former citizens not in compliance with expatriation 
     revenue provisions.--Any alien who is a former citizen of the 
     United States who relinquishes United States citizenship 
     (within the meaning of section 877A(e)(3) of the Internal 
     Revenue Code of 1986) and who is not in compliance with 
     section 877A of such Code (relating to expatriation).''.
       (2) Availability of information.--
       (A) In general.--Section 6103(l) (relating to disclosure of 
     returns and return information for purposes other than tax 
     administration) is amended by adding at the end the following 
     new paragraph:
       ``(18) Disclosure to deny visa or admission to certain 
     expatriates.--Upon written request of the Attorney General or 
     the Attorney General's delegate, the Secretary shall disclose 
     whether an individual is in compliance with section 877A (and 
     if not in compliance, any items of noncompliance) to officers 
     and employees of the Federal agency responsible for 
     administering section 212(a)(10)(E) of the Immigration and 
     Nationality Act solely for the purpose of, and to the extent 
     necessary in, administering such section 212(a)(10)(E).''.
       (B) Safeguards.--Section 6103(p)(4) (relating to 
     safeguards) is amended by striking ``or (17)'' each place it 
     appears and inserting ``(17), or (18)''.
       (3) Effective date.--The amendments made by this subsection 
     shall apply to individuals who relinquish United States 
     citizenship on or after the date of the enactment of this 
     Act.
       (e) Conforming Amendments.--
       (1) Section 877 is amended by adding at the end the 
     following new subsection:
       ``(g) Application.--This section shall not apply to an 
     expatriate (as defined in section 877A(e)) whose expatriation 
     date (as so defined) occurs on or after September 12, 
     2002.''.
       (2) Section 2107 is amended by adding at the end the 
     following new subsection:
       ``(f) Application.--This section shall not apply to any 
     expatriate subject to section 877A.''.
       (3) Section 2501(a)(3) is amended by adding at the end the 
     following new subparagraph:
       ``(F) Application.--This paragraph shall not apply to any 
     expatriate subject to section 877A.''.
       (4)(A) Paragraph (1) of section 6039G(d) is amended by 
     inserting ``or 877A'' after ``section 877''.
       (B) The second sentence of section 6039G(e) is amended by 
     inserting ``or who relinquishes United States citizenship 
     (within the meaning of section 877A(e)(3))'' after 
     ``877(a))''.
       (C) Section 6039G(f) is amended by inserting ``or 
     877A(e)(2)(B)'' after ``877(e)(1)''.
       (f) Clerical Amendment.--The table of sections for subpart 
     A of part II of subchapter N of chapter 1 is amended by 
     inserting after the item relating to section 877 the 
     following new item:

``Sec. 877A. Tax responsibilities of expatriation.''.

       (g) Effective Date.--
       (1) In general.--Except as provided in this subsection, the 
     amendments made by this section shall apply to expatriates 
     (within the meaning of section 877A(e) of the Internal 
     Revenue Code of 1986, as added by this section) whose 
     expatriation date (as so defined) occurs on or after 
     September 12, 2002.
       (2) Gifts and bequests.--Section 102(d) of the Internal 
     Revenue Code of 1986 (as added by subsection (b)) shall apply 
     to gifts and bequests received on or after September 12, 
     2002, from an individual or the estate of an individual whose 
     expatriation date (as so defined) occurs after such date.
       (3) Due date for tentative tax.--The due date under section 
     877A(h)(2) of the Internal Revenue Code of 1986, as added by 
     this section, shall in no event occur before the 90th day 
     after the date of the enactment of this Act.

[[Page H8798]]

     SEC. 202. EXTENSION OF INTERNAL REVENUE SERVICE USER FEES.

       (a) In General.--Chapter 77 (relating to miscellaneous 
     provisions) is amended by adding at the end the following new 
     section:

     ``SEC. 7527. INTERNAL REVENUE SERVICE USER FEES.

       ``(a) General Rule.--The Secretary shall establish a 
     program requiring the payment of user fees for--
       ``(1) requests to the Internal Revenue Service for ruling 
     letters, opinion letters, and determination letters, and
       ``(2) other similar requests.
       ``(b) Program Criteria.--
       ``(1) In general.--The fees charged under the program 
     required by subsection (a)--
       ``(A) shall vary according to categories (or subcategories) 
     established by the Secretary,
       ``(B) shall be determined after taking into account the 
     average time for (and difficulty of) complying with requests 
     in each category (and subcategory), and
       ``(C) shall be payable in advance.
       ``(2) Exemptions, etc.--
       ``(A) In general.--The Secretary shall provide for such 
     exemptions (and reduced fees) under such program as the 
     Secretary determines to be appropriate.
       ``(B) Exemption for certain requests regarding pension 
     plans.--The Secretary shall not require payment of user fees 
     under such program for requests for determination letters 
     with respect to the qualified status of a pension benefit 
     plan maintained solely by 1 or more eligible employers or any 
     trust which is part of the plan. The preceding sentence shall 
     not apply to any request--
       ``(i) made after the later of--

       ``(I) the fifth plan year the pension benefit plan is in 
     existence, or
       ``(II) the end of any remedial amendment period with 
     respect to the plan beginning within the first 5 plan years, 
     or

       ``(ii) made by the sponsor of any prototype or similar plan 
     which the sponsor intends to market to participating 
     employers.
       ``(C) Definitions and special rules.--For purposes of 
     subparagraph (B)--
       ``(i) Pension benefit plan.--The term `pension benefit 
     plan' means a pension, profit-sharing, stock bonus, annuity, 
     or employee stock ownership plan.
       ``(ii) Eligible employer.--The term `eligible employer' 
     means an eligible employer (as defined in section 
     408(p)(2)(C)(i)(I)) which has at least 1 employee who is not 
     a highly compensated employee (as defined in section 414(q)) 
     and is participating in the plan. The determination of 
     whether an employer is an eligible employer under 
     subparagraph (B) shall be made as of the date of the request 
     described in such subparagraph.
       ``(iii) Determination of average fees charged.--For 
     purposes of any determination of average fees charged, any 
     request to which subparagraph (B) applies shall not be taken 
     into account.
       ``(3) Average fee requirement.--The average fee charged 
     under the program required by subsection (a) shall not be 
     less than the amount determined under the following table:

                                                                Average
``Category                                                          Fee
  Employee plan ruling and opinion............................$250 ....

  Exempt organization ruling..................................$350 ....

  Employee plan determination.................................$300 ....

  Exempt organization determination...........................$275 ....

  Chief counsel ruling........................................$200.....

       ``(c) Termination.--No fee shall be imposed under this 
     section with respect to requests made after September 30, 
     2012.''.
       (b) Conforming Amendments.--
       (1) The table of sections for chapter 77 is amended by 
     adding at the end the following new item:

``Sec. 7527. Internal Revenue Service user fees.''.

       (2) Section 10511 of the Revenue Act of 1987 is repealed.
       (3) Section 620 of the Economic Growth and Tax Relief 
     Reconciliation Act of 2001 is repealed.
       (c) Limitations.--Notwithstanding any other provision of 
     law, any fees collected pursuant to section 7527 of the 
     Internal Revenue Code of 1986, as added by subsection (a), 
     shall not be expended by the Internal Revenue Service unless 
     provided by an appropriations Act.
       (d) Effective Date.--The amendments made by this section 
     shall apply to requests made after the date of the enactment 
     of this Act.

     SEC. 203. PARTIAL PAYMENT OF TAX LIABILITY IN INSTALLMENT 
                   AGREEMENTS.

       (a) In General.--
       (1) Section 6159(a) (relating to authorization of 
     agreements) is amended--
       (A) by striking ``satisfy liability for payment of'' and 
     inserting ``make payment on'', and
       (B) by inserting ``full or partial'' after ``facilitate''.
       (2) Section 6159(c) (relating to Secretary required to 
     enter into installment agreements in certain cases) is 
     amended in the matter preceding paragraph (1) by inserting 
     ``full'' before ``payment''.
       (b) Requirement To Review Partial Payment Agreements Every 
     Two Years.--Section 6159 is amended by redesignating 
     subsections (d) and (e) as subsections (e) and (f), 
     respectively, and inserting after subsection (c) the 
     following new subsection:
       ``(d) Secretary Required To Review Installment Agreements 
     for Partial Collection Every Two Years.--In the case of an 
     agreement entered into by the Secretary under subsection (a) 
     for partial collection of a tax liability, the Secretary 
     shall review the agreement at least once every 2 years.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to agreements entered into on or after the date 
     of the enactment of this Act.
       Amend the title so as to read: ``An Act to amend the 
     Internal Revenue Code of 1986 to improve tax equity for 
     military personnel, and for other purposes.''.

  Amendment printed in House Report 107-784:

       Strike all after the enacting clause and insert the 
     following:
       Section 1. Section 114 of Public Law 107-229 is amended by 
     striking ``the date specified in section 107(c) of this joint 
     resolution'' and inserting ``March 31, 2003''.
       Sec. 2. (a) In General.--The Temporary Extended 
     Unemployment Compensation Act of 2002 (26 U.S.C. 3304 note) 
     is amended by adding at the end the following:

     ``SEC. 210. EXTENSION OF PROGRAM IN HIGH UNEMPLOYMENT STATES.

       ``(a) In General.--Notwithstanding section 208(2), an 
     agreement entered into under this title shall apply to weeks 
     of unemployment beginning after December 28, 2002, and ending 
     before February 2, 2003, but only as provided in this section 
     and section 211.
       ``(b) New Account.--If, at any time during the period 
     described in subsection (a), an individual's State is in an 
     extended benefit period (as determined under section 
     203(c)(2)), and such individual meets the requirements of 
     section 202(b)-(c), such State shall establish an account 
     under this section for such individual (to be available 
     beginning with the individual's first week of unemployment 
     within such period as to which both of those conditions are 
     met) in an amount equal to the amount determined in 
     accordance with section 203(b).
       ``(c) Eligibility for Payments.--In the case of an 
     individual for whom an account is established under 
     subsection (b)--
       ``(1) temporary extended unemployment compensation shall be 
     payable for any week of unemployment described in subsection 
     (a) for which such individual would qualify if the criteria 
     in effect for the week ending on December 28, 2002, were 
     applied (and section 202(d)(3) were disregarded); and
       ``(2) any temporary extended unemployment compensation 
     payable to an individual under this section shall be payable 
     only out of the account established for such individual under 
     subsection (b).
       ``(d) Ineligible Individuals.--Notwithstanding any other 
     provision of this section, no account under subsection (b) 
     shall be established for the benefit of an individual for 
     whom an account was established under section 203, if--
       ``(1) such account was at any time augmented in the manner 
     described in section 203(c); and
       ``(2) such account (as so augmented)--
       ``(A) was exhausted before December 29, 2002; or
       ``(B) remains available, for weeks beginning on or after 
     December 29, 2002, by virtue of section 211.

     ``SEC. 211. PHASE-OUT PROVISIONS.

       ``(a) In General.--In the case of an individual who is 
     receiving temporary extended unemployment compensation for a 
     week of unemployment ending on December 28, 2002, the 
     provisions of this title and of any agreement then in effect 
     shall be applied in a manner such that any amounts remaining 
     in an account established for such individual under section 
     203 as of that date shall continue to remain available to the 
     same extent and in the same manner as if section 208(2) had 
     been amended by striking `January 1' and inserting `February 
     2'.
       ``(b) Coordination Provision.--After any amounts (in an 
     account established under section 203) remaining available 
     for the benefit of an individual by virtue of subsection (a) 
     are exhausted, section 210 shall apply to such individual in 
     accordance with its terms.
       ``(c) Rule of Construction.--Nothing in this title shall be 
     considered to permit or require the payment of any amount, 
     out of an account established under section 203 or 210, for 
     any week of unemployment ending after February 1, 2003.''.
       (b) Clerical Amendment.--The table of contents of Public 
     Law 107-147 is amended by inserting after the item relating 
     to section 209 the following:

``210. Extension of program in high unemployment States.
``211. Phase-out provisions.''.

       Sec. 3. Section 1848(i)(1)(C) of the Social Security Act 
     (42 U.S.C. 1395w-4(i)(1)(C)) is amended to read as follows:
       ``(C) the determination of conversion factors under 
     subsection (d), including without limitation a prospective 
     redetermination of the sustainable growth rates for any or 
     all previous fiscal years,''.
       Amend the title so as to read as follows: ``An Act to make 
     technical amendments to the Social Security Act and related 
     Acts.''.

  The SPEAKER pro tempore. Pursuant to House Resolution 609, the 
gentleman from California (Mr. Thomas) and the gentleman from 
California (Mr. Stark) each will control 30 minutes.
  Mr. THOMAS. Mr. Speaker, I ask unanimous consent that the time 
allotted be 30 minutes in its entirety, divided equally between myself 
and the gentleman from California (Mr. Stark).
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from California?
  There was no objection.
  The SPEAKER pro tempore. The gentleman from California (Mr. Thomas)

[[Page H8799]]

and the gentleman from California (Mr. Stark) each will control 15 
minutes.
  The Chair recognizes the gentleman from California (Mr. Thomas).
  Mr. THOMAS. Mr. Speaker, I yield myself such time as I may consume. I 
want to thank the gentleman from California for the courtesy so that we 
can expeditiously examine this very modest bill. As we discussed under 
the rule earlier, there are three provisions in the bill: one, to 
correct a flaw dealing with the continuation of TANF, or welfare; 
secondly, to make sure that the unemployment program, in a modest way, 
continues until the House reconvenes in the 108th Congress; and the 
third is to provide the administration with some legal protection if 
they decide to make some decisions which would allow some adjustments 
in the Medicare program.
  Mr. Speaker, I reserve the balance of my time.
  Mr. STARK. Mr. Speaker, I yield myself such time as I may consume.
  (Mr. STARK asked and was given permission to revise and extend his 
remarks.)
  Mr. STARK. Mr. Speaker, I suspect that many people will vote for this 
bill, but it cannot go unnoticed that the bill does not do nearly 
enough. It is a day late and a dollar short. It does not really improve 
Medicare and deal with many of the providers. It merely gives the 
administration, hopefully, the right to correct a glitch in the way 
physicians are reimbursed. There is some great discussion going on that 
they may already have that. The fight seems to be that correcting the 
physician glitch will cost 43 billion bucks and the question is, Do we 
get billed again for that or does the administration? And does it fit, 
or increase the deficit or does it not? So there is no guarantee that 
your physician friends will get their problem corrected. There is some 
guarantee that the hospitals, nursing homes, rural hospitals, teaching 
hospitals and the uninsured will absolutely get nothing.
  As to the welfare reform bill, there may be a lot of blame as to why 
we have not reauthorized it; but in any event, since 1996, the day it 
was passed, the funding for welfare reform, or welfare payments in this 
country has dropped by 11 percent. We are not doing anything to 
increase it and that is tragic. Welfare reform is more than a benefit 
check. It is child care and job training; it is education, the very 
foundations of self-sufficiency.
  It is too bad now, particularly that we do not worry about PAYGO 
anymore, that we cannot at least deal with the millions of poor 
families even a tenth as well as we deal with the very rich in the tax 
cuts that we have given them. Fourteen million families eligible for 
child care assistance do not receive it and millions of Americans out 
of work are struggling. We are not doing an adequate job in 
unemployment, where this bill really falls down. I will turn soon to my 
colleague from Maryland, the ranking member of the Subcommittee on 
Human Resources, to explain that to you. We have spent trillions of 
dollars in tax cuts for the rich and we are tonight going to talk about 
a mere billion dollars to extend unemployment benefits for only a small 
portion of the Americans who are struggling. Again, it is not fair and 
it is not adequate.
  There was a time when we in Congress could hold up our heads high and 
say that we took care of all Americans who were unable to fend for 
themselves. We are not even doing that. I think that it is tragic that 
here we are in the last hours of this Congress and we are attending to 
something that I do not think any bill at this time could correct all 
the problems. It is kind of a sad commentary that we have come this far 
and left so many people impoverished and unaided by a government that 
has given so much to the wealthy.
  Mr. Speaker, I reserve the balance of my time.
  Mr. THOMAS. Mr. Speaker it is my pleasure to yield 1 minute to the 
gentleman from California (Mr. Herger), the chairman of the 
Subcommittee on Human Resources of the Committee on Ways and Means.
  Mr. HERGER. Mr. Speaker, I rise in support of H.R. 5063, as amended. 
This bill would temporarily extend unemployment benefits for an 
additional 5 weeks. It also will extend the funding and rules for the 
Nation's welfare reform program through March 31, 2003, allowing us 
additional time to reauthorize the historic 1996 law.
  Mr. Speaker, we must keep the pressure on to reauthorize welfare 
reform for 5 years as quickly as possible. This will be our goal in the 
next Congress, and we look forward to working with both Republicans and 
Democrats to get this job done.
  I urge my colleagues to support this bill.
  Mr. STARK. Mr. Speaker, I am pleased to yield 3 minutes to the 
distinguished gentleman from Maryland (Mr. Cardin), the ranking member 
of the Subcommittee on Human Resources.
  Mr. CARDIN. Mr. Speaker, let me thank the gentleman from California 
for yielding me this time. As the chairman of the Committee on Ways and 
Means has said, this is a modest bill that moves forward in three areas 
in a very modest way. It is the last train out of the station, and I 
would urge my colleagues to support the bill.
  Mr. Speaker, it does deal, as the chairman of the Subcommittee on 
Human Resources said, with a 3-month extension of TANF. That is better 
than what was in the continuing resolution. It guarantees that our 
States will receive at least their first quarter payments. That is 
important. But I know we are all disappointed that we were unable in 
this Congress to reauthorize the program for 5 years. Certainly we 
wanted to reauthorize it for more than 3 months.
  Secondly, the gentleman from California (Mr. Stark) has already 
commented on the Medicare provisions. We hope that the provisions here 
will help the physician reimbursement system. But we are all 
disappointed that we were unable to complete the structure changes for 
skilled nursing facilities, rehabilitation therapists, hospitals, home 
health. There were provisions in here that were noncontroversial for 
our military. None of that was able to get accomplished in this 
Congress, and I think we are all very disappointed that we were unable 
to do that.
  But, Mr. Speaker, I want to talk about the third area, unemployment 
insurance. Yes, there is a modest improvement in the underlying 
legislation, but I think we should be very disappointed that we have 
done nothing at all to help the 1.8 million Americans who will have 
exhausted their unemployment insurance benefits before we will have an 
opportunity to revisit this program again next year. That is 
particularly disappointing when you recognize the fact that in every 
prior recession, in a bipartisan way, we have extended Federal 
unemployment insurance benefits as a safety net to those who are hurt 
through the recession through no fault of their own.
  We have $25 billion in the Federal unemployment trust account. The 
money is there. The number of people suffering from long-term 
unemployment has doubled over the last year. We know that if we provide 
assistance that money will get back into the economy quickly and help 
us in the recovery. That is why in every prior recession, we have been 
very clear in providing additional help through the Federal 
unemployment insurance system. Yet in this recession we have failed. I 
think that is extremely disappointing, and I would hope that we could 
have done better.
  Mr. THOMAS. Mr. Speaker, it is my pleasure to yield 2 minutes to the 
gentleman from Pennsylvania (Mr. English), a member of the Committee on 
Ways and Means.
  Mr. ENGLISH. Mr. Speaker, more than 800,000 unemployed workers 
throughout the U.S. and over 35,000 in Pennsylvania alone are faced 
with the grim reality that their unemployment benefits will end just 3 
days after Christmas. With the economy in such bad straits and so many 
working families suffering, we cannot stand by and let the Grinch steal 
Christmas from the unemployed whose holidays are already constrained by 
an extended period of unemployment. This cutoff is hanging like a sword 
of Damocles, like a Grinch, over these families; and we need to act 
today.
  This bill removes the December 28 cutoff on benefits. It allows more 
than 800,000 unemployed workers nationwide who will already be 
receiving extended benefits to temporarily continue receiving benefits 
when the current program expires. This bill extends federally funded 
benefits by up to 5 weeks

[[Page H8800]]

per individual. This bill continues through January 2003 the current 
availability of additional weeks of federally funded extended benefits 
in certain high-unemployment States. As a longtime supporter of this 
issue, I feel it critical that we move now to provide extended 
unemployment benefits to these families.
  I urge my colleagues to join me in standing up to the Grinch and 
making sure that America's unemployed continue to receive benefits 
after Christmas.
  Mr. STARK. Mr. Speaker, I yield 2 minutes to the gentleman from 
Michigan (Mr. Levin), who understands that while the opposition is 
willing to spend over a trillion dollars in tax cuts to the wealthy, 
they are unwilling to make good on their earlier promise to spend a 
thousandth of that amount to insure nursing home patients.
  (Mr. LEVIN asked and was given permission to revise and extend his 
remarks.)

                              {time}  2045

  Mr. LEVIN. Mr. Speaker, first on unemployment comp, the gentleman 
from Pennsylvania (Mr. English), about 35,000 will be benefitted, at 
the most, 5 weeks. More than twice that will face Christmas having 
exhausted their benefits and get no help through extended benefits 
because of the failure of this Congress to act more than twice. So this 
is not really a modest program. It is really a flawed program and an 
inferior one because 800,000 will get several weeks. Over 1,800,000 who 
will exhausted their benefits will get zero, and it will be simply 
because of the accident of when they exhausted their benefits. If they 
exhausted them earlier or later, they come up with zero, and that is 
not the way this country should respond to the needs of people who are 
unemployed through no fault of their own.
  Let me just finish by saying something about this approach in terms 
of physicians. We needed to do something, but what you are doing is 
essentially more appearance than it is reality in terms of the cost. 
You do not come forth here with a proposal that addresses this 
directly, which will cost $20 to $60 billion over 10 years. You do not 
want CBO to score it. So you come forth and give carte blanche to the 
administration to do what they say they cannot do anyway, and because 
it would be done administratively it would not be scored, but it will 
come out of the budget and will add $20 to $80 billion in the deficit 
over 10 years, and it will not address the other needs of other 
providers. That really is one modest approach. It is a flawed and 
inferior approach. It forces us perhaps to vote yes, but realizing the 
terrible, terrible shortcomings of this approach.
  Mr. THOMAS. Mr. Speaker, I yield 1 minute to the gentlewoman from 
Washington (Ms. Dunn), a member of the Committee on Ways and Means.
  (Ms. DUNN asked and was given permission to revise and extend her 
remarks.)
  Ms. DUNN. Mr. Speaker, as we all know, the extended unemployment 
benefits we passed last year are due to expire on December 28. Without 
an extension thousands of dislocated workers will lose the unemployment 
benefits they need to make ends meet as they search for a job. The 
problem is extenuated in areas like Washington State, where 
unemployment rates continue to be high and jobs are very tough to find.
  Extending the Federal unemployment benefits for an additional 5 weeks 
will help about 45,400 dislocated workers living in Washington State 
alone. It is the least that we in Congress can do before adjourning for 
the year to ensure that every family has a happy holiday season. This 
bill is a targeted approach to help individuals who need it the most. 
It is a step toward providing temporary assistance at a time when our 
country is getting back on the track to recovery.
  I urge my colleagues to vote for this important bill, and I hope that 
the other body will adopt this bill before leaving for the year.
  Mr. STARK. Mr. Speaker, I yield 3 minutes to the gentleman from 
Washington (Mr. McDermott).
  Mr. McDERMOTT. Mr. Speaker, this is a really interesting bill because 
it really kind of lays it out cold-bloodedly. The President, or the 
White House, has had 2 million jobs lost since they came into office, 
and they do not care. When the White House announced their special 
interests for this session, they said we want homeland security, we 
want Federal judges and we want terrorism insurance. Not one single 
word about the economy.
  I come from a State where there is 7 percent unemployment. The 
Northwest is the highest in the country. And anybody who exhausts their 
benefits before January 1 gets nothing. Oh, excuse me. They get 5 weeks 
after the first of the year. That is all they get is 5 weeks. As the 
gentleman from Maryland (Mr. Cardin) has already said, we have $25 
billion sitting in a fund to deal with this, and you come out here with 
a 5-week plan. I mean Merry Christmas, folks. Are you going to send 
turkeys around at Thanksgiving also as part of this program? Why can 
you not ever admit that you fouled up the economy and the people you 
have put out of work you are unwilling to take care of when you have 
the money sitting there? It is sitting there. I cannot understand how 
you are going to go home to people and say, well, we are sorry, we will 
be back in on January 7 and we will pass something real quick; so do 
not worry, do not worry, do not worry. I mean you are saying at 
Christmas time to people you are not going to take care of them.
  Our unemployment in this country, we have gone up 25 percent in long-
term unemployment in the last 6 months, and there is no question 
between now and February an estimated 1.8 million people are going to 
lose their unemployment insurance, and you are not doing anything for 
them, just a little tiny Band-Aid. And it is pretty clear where your 
priorities are. You are willing in the last bill to take off all the 
financial controls to spend on defense, to go $100 billion, $200 
billion into debt in Iraq, but you will not give anything but 5 weeks 
of unemployment to the people who have lost their jobs in this mess you 
have created.
  I think that we will be back in January, we will all vote for this. 
We know it is inadequate, but that is what you are offering them, and 
we are not going to say no. We are not fools. But the fact is you are 
going to come back in here in January and you are going to hear the 
same speech from me because I am going to say to you why are you only 
taking it 3 months or you will go 6 months? You will not recognize what 
you have created here, and you have long-term unemployment that is 
going up in this country and you just cannot seem to face it. So we 
will vote on this inadequate piece.
  Mr. THOMAS. Mr. Speaker, I yield myself such time as I may consume.
  I appreciate the gentleman's argument that we are giving someone 5 
weeks. That is like saying we picked up a hitchhiker on the West Coast 
and drove him within three blocks of the Statue of Liberty and he is 
complaining because we did not drop him right at the door. As a matter 
of fact, we did not wait until he finished his business and then took 
him back to California. Because the facts are, and the gentleman is 
from Washington State so let us use Washington State, there are people 
in Washington State who have received more than 1 year of unemployment 
benefits. They have received 26 weeks, an additional 26 weeks, and the 
5 weeks the gentleman from Washington (Mr. McDermott) was talking about 
was part of, on top of all of those months, an additional 13 weeks 
which was a 50/50 match between the State and the Federal Government. 
And of course States have their own programs in which they can continue 
to extend it.
  So for the gentleman to take the time to create the impression that 
all we are doing is 5 weeks is to say that at the very least that is 5 
weeks on top of 26 weeks, on top of 26 weeks, on top of an additional 
7. So when you really look at it in terms of the way in which the 
benefits have been provided, a short way of saying it is there are 
people who have received unemployment benefits for better than a year.
  Mr. Speaker, I reserve the balance of my time.
  Mr. STARK. Mr. Speaker, I yield myself such time as I may consume.
  I guess that the distinguished chairman of the Committee on Ways and 
Means and the gentlewoman from Washington State (Ms. Dunn), the 
previous speaker, said it all. It is the least we can do, and it is a 
modest bill. We could do better. We should do better.

[[Page H8801]]

We have never had a modest tax cut coming from the other side of the 
aisle. It is only modest when we try to help the least fortunate among 
us. So while one never looks a gift horse in the mouth, I am sure that 
the few people it does help will be happy. I intend to support the 
bill. I only wish that we could have had the leadership to do better 
for more people in this country.
  Mr. KUCINICH. Mr. Speaker, last month's New York Times predicted that 
if there is to be an economic recovery in our future, it will be a 
``jobless recovery.'' I would submit that for the 8.2 million Americans 
who are unemployed, an economic recovery that does not provide more 
jobs is no recovery at all. And of course, as consumer confidence 
plunged to a nine year low in October, any economic recovery--with or 
without more job openings--seems strongly in doubt.
  For this reason, H.R. 5063's plan to extend the Temporary Emergency 
Unemployment Compensation (TEUC) program, which is presently scheduled 
to expire on December 28, 2002, is woefully inadequate and provides an 
extremely limited amount of additional unemployment relief.
  According to the Center on Budget and Policy Priorities, between now 
and February 2, 2003, 1.8 million jobless workers in need of assistance 
would fail to receive it under this plan. Only three states, Arkansas, 
Oregon, and Washington, are eligible for the five-week extension of the 
TEUC program authorized by this bill.
  And when one considers that the number of long-term unemployed who 
are looking for work after 27 weeks almost doubled over the last year, 
that the Economic Policy Institute has reported there are 2.7 
unemployed workers for every job opening, and that the Congressional 
Budget Office expects the unemployment rate to remain near 6 percent 
until the second half of 2003, it is clear to me that American workers 
deserve a better and more comprehensive unemployment plan.
  In fact, the bill's proposal represents an enormous missed 
opportunity. The failure to provide additional weeks of benefits to 
those who have already exhausted their federal benefits is a missed 
opportunity to provide a dose of immediate, well-targeted economic 
stimulus.
  In addition, the federal unemployment trust funds will have an 
estimated surplus of $24 billion at the end of this year. And yet, the 
Republican proposal is estimated to cost less than $1 billion, leaving 
$23 billion unused, helping no one. This approach seems inconsistent 
with the basic purpose of the trust funds: to build large resources 
when work is plentiful in order to provide relief to unemployed workers 
when they need it most. I think that time is now.
  It is unfortunate that no alternative to the proposal contained in 
H.R. 5063 was allowed by the majority's rule. An effective alternative 
proposal would have recognized that American workers from the heart of 
this nation, and that Federal unemployment insurance was intended for 
those workers during tough times like toady. An effective alternative 
proposal would have also recognized that the number of unemployed 
Americans is as high today as it was when the original and 
comprehensive Federal extended benefits program was enacted in March. 
This time, workers may receive much less.
  In a so-called ``jobless recovery'', millions of Americans will 
remain jobless. Under today's so-called unemployment plan, 1.8 million 
Americans will also be without unemployment compensation. We can do 
better for American workers.
  Ms. JACKSON-LEE of Texas. Mr. Speaker, I will be voting for this 
bill, reluctantly. I feel it is a feeble attempt to run away from the 
challenges that face us, and to shirk our responsibilities to the 
American people. But because it is the only legislation the Majority is 
giving us the opportunity to vote on, and because it will get a modicum 
of temporary help to some struggling people, I'll support it.
  Everyday, I receive a deluge of letters and calls from my 
constitutents--doctors, hospitals, patient-advocacy groups, and nursing 
homes--letting me know that they are in trouble. Jobless rates are up. 
The October 1 Medicare Cliff passed us by, and we did almost nothing to 
mitigate the damages. Doctor reimbursements have been slashed, we are 
short of nurses and have lost funds to bring in new ones. Our long-term 
care facilities are on the brink of financial ruin. If we do not 
provide appropriate funds for vital services, these services could be 
lost. Reimbursement rates are so low in some sectors that medical 
facilities lose money by treating patients, so Medicare patients may 
soon be denied care in some areas. People will suffer.
  I understand that emergencies do happen. Sometimes, we need to bend 
and maneuver the rules of the House to get issues handled 
expeditiously. But, we have seen these problems on the horizon for 
months. We all knew it. I, with, many like-minded colleagues have been 
pushing hard for real change--bold steps to take care of the challenges 
that face our constituents and our health care system. But good bills 
have been languishing here in the House. There was always an excuse for 
inaction. We have run out of excuses though.
  I and my Democratic colleagues have consistently supported a package 
with provisions that would improve reimbursements to doctors and 
hospitals serving Medicare patients, would eliminate the 15 percent 
reduction in home health payments, would strengthen Medicare+Choice 
programs, and would help rural providers. But, unfortunately, these 
provisions were defeated.
  Instead, the Majority has gutted an excellent bill from the other 
body that would have helped our men and women serving in the military 
receive fair tax relief, and would have stopped the horrible practice 
of some wealthy individuals who renounce their U.S. citizenship in 
order to avoid their responsibilities to pay taxes. In a time of war, 
what kind of a signal are we sending to our people in uniform, by 
sacrificing their needs, in order to play politics, and benefit the 
worst tax-evaders?
  What we have before us today is a mockery of what good legislation 
can be. It is a band-aid approach to bypass surgery. It is a token for 
few, but an insult to the many health care providers who are struggling 
to meet the needs of our nation's sick. If it gets past the Senate, it 
will provide a brief extension for welfare recipients in programs such 
as Temporary Assistance for Needy Families (TANF), and child 
assistance, It extends, for a short time, unemployment benefits for 
people who are now receiving benefits and who live in a few selected 
states. Those in other states, and those 1 million workers whose 
benefits have expired, but who are still struggling in our flailing 
economy to find work, receive no help.
  I will vote for this bill, because it is better than nothing. But, I 
feel the Republican leadership has squandered an opportunity to do 
good. They should have brought us this bill as it passed the other 
body, so we could show our support to the people in our military. They 
should have worked with the Senate to get real relief to the 
unemployed, which would have provided a stimulus to our economy, rather 
than giving a free pass to tax dodgers overseas. They should have 
worked with Democrats to ensure adequate reimbursements to our health 
providers, so that services will be there for the people on Medicare.
  Instead, we have a bill that will go nowhere once it leaves the 
House. I hope we will do more for the American people in the 108th 
Congress.
  Mr. DINGELL. Mr. Speaker, I support the provision in this bill that 
extends the welfare program and the related Temporary Medical 
Assistance (TMA) program through the end of March. TMA allows families 
leaving welfare for work to keep their Medicaid insurance coverage. My 
only question is why my Republican colleagues would extend such an 
important program for one quarter when it would make much more sense to 
extend it for one year, two years, or more.
  Similarly, I support the effort in this bill to prevent payment cuts 
to physicians in Medicare. However, I regret that the bill does not 
accomplish nearly enough.
  We do need to help physicians under Medicare, but we also need to 
help other providers. Hospitals, home health agencies, and nursing 
homes are in a similar situation. I hear from my constituents on these 
issues nearly every day. We cannot turn a blind eye to their problems 
because, like physicians, their role in caring for Medicare 
beneficiaries is critical.
  This bill also neglects to provide States with any Medicaid fiscal 
relief, which is urgently needed to prevent hundreds of thousands of 
working Americans from losing their health insurance coverage. States 
are already cutting back on coverage--and as a result, pregnant women 
and children, senior citizens in nursing homes, working disabled, and 
women with breast or cervical cancer all across the country may soon 
find themselves without health insurance.
  Ultimately, I will support this bill, because doing something is 
better than doing nothing. Yet it seems callous for the House 
Republican Leadership to let Congress leave without addressing these 
critical issues. We should be preventing millions of Americans from 
losing their health insurance and protecting the Medicare program for 
America's seniors.
  Mr. STARK. Mr. Speaker, I yield back the balance of my time.
  Mr. THOMAS. Mr. Speaker, I yield back the balance of my time.
  The SPEAKER pro tempore (Mr. Simpson). All time for debate has 
expired.
  Pursuant to House Resolution 609, the previous question is ordered.
  The question is on the motion offered by the gentleman from 
California (Mr. Thomas).
  The motion was agreed to.
  A motion to reconsider was laid on the table.




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