[Congressional Record (Bound Edition), Volume 145 (1999), Part 21]
[House]
[Page 30734]
[From the U.S. Government Publishing Office, www.gpo.gov]



   PRIVILEGES OF THE HOUSE--RETURNING TO THE SENATE S. 1232, FEDERAL 
             ERRONEOUS RETIREMENT COVERAGE CORRECTIONS ACT

  Mr. WELLER. Mr. Speaker, I rise to a question of privileges of the 
House, and I offer a privileged resolution (H. Res. 394) and ask for 
its immediate consideration.
  The Clerk read the resolution, as follows:

                              H. Res. 394

       Resolved, That the bill of the Senate (S. 1232) entitled 
     the ``Federal Erroneous Retirement Coverage Corrections 
     Act'', in the opinion of this House, contravenes the first 
     clause of the seventh section of the first article of the 
     Constitution of the United States and is an infringement of 
     the privileges of this House and that such bill be 
     respectfully returned to the Senate with a message 
     communicating this resolution.

  The SPEAKER pro tempore. In the opinion of the Chair, the resolution 
constitutes a question of the privileges of the House under rule IX.
  The gentleman from Illinois (Mr. Weller) is recognized for 30 
minutes.
  Mr. WELLER. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, this resolution is necessary to return to the Senate the 
bill S. 1232 which contravenes the constitutional requirement that 
revenue measures shall originate in the House of Representatives. 
Section 401 of the bill provides that no Federal retirement plan 
involved in the corrections under the bill shall fail to be treated as 
a tax-qualified retirement plan by reason of the correction.

                              {time}  1915

  The bill also provides that no amount shall be includable in the 
income of any individual for Federal tax purposes because of fund 
transfers or government contributions made pursuant to the bill.
  Accordingly, section 401 is revenue affecting in a constitutional 
sense and the bill therefore violates the origination requirement.
  There are numerous precedents for the action I am requesting. I want 
to emphasize this action speaks solely to the constitutional 
prerogative of the House and not to the merits of the Senate bill.
  The proposed action today is procedural in nature and is necessary to 
preserve the prerogatives of the House to originate revenue measures. 
It makes clear to the Senate that the appropriate procedure for dealing 
with revenue measures is for the House to act first on a revenue bill, 
for the Senate to accept it or amend it as it sees fit.
  This resolution is necessary to return to the Senate the bill S. 
1232, which contravenes the constitutional requirement that revenue 
measures shall originate in the House of Representatives. The bill 
provides that no Federal retirement plan involved in the corrections 
under the bill shall fail to be treated as a tax-qualified retirement 
plan by reason of the correction. The bill also provides that no 
amounts shall be includible in the income of any individual for Federal 
tax purposes because of fund transfers or government contributions made 
pursuant to the bill. Therefore, the bill violates the origination 
requirement.
  Section 401 of the bill provides generally that no government 
retirement plan shall fail to be treated as a tax-qualified plan under 
the Internal Revenue Code for any failure to follow plan terms, or any 
actions taken under the bill to correct errors in misclassification of 
Federal employees into the wrong Federal retirement system. In general, 
Federal retirement plans are subject to the same rules that apply to 
tax-qualified retirement plans maintained by private sector employers. 
For example, tax-qualified retirement plans are afforded special tax 
treatment under the Code. These advantages include the fact that plan 
participants pay no current income tax on amounts contributed on their 
behalf, and the fact that earnings of the plan are tax-exempt.
  Because of Section 401 of the bill, Federal retirement plans and 
participants in those plans would retain these advantages even if 
actions are taken pursuant to the bill that would otherwise jeopardize 
this favorable tax treatment.
  The Federal retirement plans are also subject to the rules applicable 
to tax-qualified plans that limit the amount of contributions and 
benefits that may be provided to a participant under a tax-qualified 
plan. For example, section 415 of the Code limits that amount of annual 
contributions that may be made to a defined contribution plan, and the 
amount of annual benefits that are payable from a defined benefit plan. 
If amounts are contributed or benefits are paid that exceed these 
limits, plan participants could be subject to unfavorable tax 
consequences. Section 401 of the bill would permit the Federal 
government to make-up contributions on behalf of an employee without 
violating applicable limits on contributions and benefits for the year 
in which the make-up contribution was made.
  Section 401 also provides that no amounts shall be includible in the 
taxable income of participants in Federal retirement plans because of 
fund transfers or government contributions made pursuant to the bill. 
Without this provision, amounts transferred from fund to fund or 
otherwise contributed by the government could be subject to income tax 
under the Internal Revenue Code.
  Accordingly, Section 401 is revenue-affecting in a constitutional 
sense.
  There are numerous precedents for the action I am requesting. For 
example, on July 21, 1994, the House returned to the Senate S. 1030, 
containing a provision exempting certain veteran payments from 
taxation. On October 7, 1994, the House returned to the Senate S. 1216, 
containing provisions exempting certain settlement income from 
taxation.
  I want to emphasize that this action speaks solely to the 
constitutional prerogative of the House and not to the merits of the 
Senate bill. The proposed action today is procedural in nature and is 
necessary to preserve the prerogatives of the House to originate 
revenue measures. It makes clear to the Senate that the appropriate 
procedure for dealing with revenue measures is for the House to act 
first on a revenue bill and for the Senate to accept it or amend it as 
it sees fit.
  Mr. Speaker, I yield back the balance of my time.
  The SPEAKER pro tempore (Mr. Pease). Without objection, the previous 
question is ordered on the resolution.
  There was no objection.
  The SPEAKER pro tempore. The question is on the resolution.
  The resolution was agreed to.
  A motion to reconsider was laid on the table.

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