[Congressional Record (Bound Edition), Volume 149 (2003), Part 5]
[House]
[Pages 6543-6549]
[From the U.S. Government Publishing Office, www.gpo.gov]




           TAX RELIEF, SIMPLIFICATION, AND EQUITY ACT OF 2003

  Mr. THOMAS. Mr. Speaker, I move to suspend the rules and pass the 
bill (H.R. 1308) to amend the Internal Revenue Code of 1986 to end 
certain abusive tax practices, to provide tax relief and 
simplification, and for other purposes.
  The Clerk read as follows:

                               H.R. 1308

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE; REFERENCES; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Tax 
     Relief, Simplification, and Equity Act of 2003''.
       (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 of this Act 
     is as follows:

Sec. 1. Short title; references; table of contents.

                 TITLE I--ENDING ABUSIVE TAX PRACTICES

Sec. 101. Individual expatriation to avoid tax.
Sec. 102. Suspension of tax-exempt status of terrorist organizations.
Sec. 103. Expressing the sense of the Congress that tax reform is 
              needed to address the issue of corporate expatriation.

          TITLE II--RELIEF FOR FOREIGN SERVICE AND ASTRONAUTS

Sec. 201. Special rule for members of Foreign Service in determining 
              exclusion of gain from sale of principal residence.
Sec. 202. Tax relief and assistance for families of astronauts who lose 
              their lives on a space mission.

                      TITLE III--HEALTH PROVISIONS

Sec. 301. Vaccine tax to apply to hepatitis A vaccine.
Sec. 302. Expansion of human clinical trials qualifying for orphan drug 
              credit.

                TITLE IV--FOREST CONSERVATION ACTIVITIES

Sec. 401. Pilot project for forest conservation activities.

            TITLE V--RELIEF AND EQUITY FOR SMALL BUSINESSES

Sec. 501. Simplification of excise tax imposed on bows and arrows.
Sec. 502. Capital gain treatment under section 631(b) to apply to 
              outright sales by landowners.
Sec. 503. Repeal of excise tax on fishing tackle boxes.
Sec. 504. Treatment under at-risk rules of publicly traded nonrecourse 
              debt.

                      TITLE VI--EQUITY FOR FARMERS

Sec. 601. Special rules for livestock sold on account of weather-
              related conditions.
Sec. 602. Income averaging for farmers not to increase alternative 
              minimum tax.
Sec. 603. Payment of dividends on stock of cooperatives without 
              reducing patronage dividends.

                TITLE VII--PROTECTION OF SOCIAL SECURITY

Sec. 701. Protection of social security.

                 TITLE I--ENDING ABUSIVE TAX PRACTICES

     SEC. 101. INDIVIDUAL EXPATRIATION TO AVOID TAX.

       (a) Expatriation To Avoid Tax.--
       (1) In general.--Subsection (a) of section 877 (relating to 
     treatment of expatriates) is amended to read as follows:
       ``(a) Treatment of Expatriates.--
       ``(1) In general.--Every nonresident alien individual to 
     whom this section applies and who, within the 10-year period 
     immediately preceding the close of the taxable year, lost 
     United States citizenship shall be taxable for such taxable 
     year in the manner provided in subsection (b) if the tax 
     imposed pursuant to such subsection (after any reduction in 
     such tax under the last sentence of such subsection) exceeds 
     the tax which, without regard to this section, is imposed 
     pursuant to section 871.
       ``(2) Individuals subject to this section.--This section 
     shall apply to any individual if--
       ``(A) the average annual net income tax (as defined in 
     section 38(c)(1)) of such individual for the period of 5 
     taxable years ending before the date of the loss of United 
     States citizenship is greater than $122,000,
       ``(B) the net worth of the individual as of such date is 
     $2,000,000 or more, or
       ``(C) such individual fails to certify under penalty of 
     perjury that he has met the requirements of this title for 
     the 5 preceding taxable years or fails to submit such 
     evidence of such compliance as the Secretary may require.

     In the case of the loss of United States citizenship in any 
     calendar year after 2003, such $122,000 amount shall be 
     increased by an amount equal to such dollar amount multiplied 
     by the cost-of-living adjustment determined under section 
     1(f)(3) for such calendar year by substituting `2002' for 
     `1992' in subparagraph (B) thereof. Any increase under the 
     preceding sentence shall be rounded to the nearest multiple 
     of $1,000.''.
       (2) Revision of exceptions from alternative tax.--
     Subsection (c) of section 877 (relating to tax avoidance not 
     presumed in certain cases) is amended to read as follows:
       ``(c) Exceptions.--
       ``(1) In general.--Subparagraphs (A) and (B) of subsection 
     (a)(2) shall not apply to an individual described in 
     paragraph (2) or (3).
       ``(2) Dual citizens.--
       ``(A) In general.--An individual is described in this 
     paragraph if--
       ``(i) the individual became at birth a citizen of the 
     United States and a citizen of another country and continues 
     to be a citizen of such other country, and
       ``(ii) the individual has had no substantial contacts with 
     the United States.

[[Page 6544]]

       ``(B) Substantial contacts.--An individual shall be treated 
     as having no substantial contacts with the United States only 
     if the individual--
       ``(i) was never a resident of the United States (as defined 
     in section 7701(b)),
       ``(ii) has never held a United States passport, and
       ``(iii) was not present in the United States for more than 
     30 days during any calendar year which is 1 of the 10 
     calendar years preceding the individual's loss of United 
     States citizenship.
       ``(3) Certain minors.--An individual is described in this 
     paragraph if--
       ``(A) the individual became at birth a citizen of the 
     United States,
       ``(B) neither parent of such individual was a citizen of 
     the United States at the time of such birth,
       ``(C) the individual's loss of United States citizenship 
     occurs before such individual attains age 18\1/2\, and
       ``(D) the individual was not present in the United States 
     for more than 30 days during any calendar year which is 1 of 
     the 10 calendar years preceding the individual's loss of 
     United States citizenship.''.
       (3) Conforming amendment.--Section 2107(a) is amended to 
     read as follows:
       ``(a) Treatment of Expatriates.--A tax computed in 
     accordance with the table contained in section 2001 is hereby 
     imposed on the transfer of the taxable estate, determined as 
     provided in section 2106, of every decedent nonresident not a 
     citizen of the United States if the date of death occurs 
     during a taxable year with respect to which the decedent is 
     subject to tax under section 877(b).''.
       (b) Special Rules for Determining When an Individual is no 
     Longer a United States Citizen or Long-Term Resident.--
     Section 7701 (relating to definitions) is amended by 
     redesignating subsection (n) as subsection (o) and by 
     inserting after subsection (m) the following new subsection:
       ``(n) Special Rules for Determining When an Individual is 
     no Longer a United States Citizen or Long-Term Resident.--An 
     individual who would not (but for this subsection) be treated 
     as a citizen or resident of the United States shall continue 
     to be treated as a citizen or resident of the United States 
     until such individual--
       ``(1) gives notice of an expatriating act or termination of 
     residency (with the requisite intent to relinquish 
     citizenship or terminate residency) to the Secretary of State 
     or the Secretary of Homeland Security, and
       ``(2) provides a statement in accordance with section 
     6039G.''.
       (c) Physical Presence in the United States for More Than 30 
     Days.--Section 877 (relating to expatriation to avoid tax) is 
     amended by adding at the end the following new subsection:
       ``(g) Physical Presence.--This section shall not apply to 
     any individual for any taxable year during the 10-year period 
     referred to in subsection (a) in which such individual is 
     present in the United States for more than 30 days in the 
     calendar year ending in such taxable year, and such 
     individual shall be treated for purposes of this title as a 
     citizen or resident of the United States for such taxable 
     year.''.
       (d) Transfers Subject to Gift Tax.--Subsection (a) of 
     section 2501 (relating to taxable transfers) is amended by 
     adding at the end the following:
       ``(6) Transfers of certain stock.--
       ``(A) In general.--Paragraph (3) shall not apply to the 
     transfer of stock described in subparagraph (B) by any 
     individual to whom section 877(b) applies, and section 
     2511(a) shall be applied without regard to whether such stock 
     is property which is situated within the United States.
       ``(B) Valuation.--For purposes of subparagraph (A), the 
     value of stock shall be determined as provided in section 
     2103, except that--
       ``(i) if the donor owned (within the meaning of section 
     958(a)) at the time of such transfer 10 percent or more of 
     the total combined voting power of all classes of stock 
     entitled to vote of a foreign corporation, and
       ``(ii) if such donor owned (within the meaning of section 
     958(a)), or is considered to have owned (by applying the 
     ownership rules of section 958(b)), at the time of such 
     transfer, more than 50 percent of--

       ``(I) the total combined voting power of all classes of 
     stock entitled to vote of such corporation, or
       ``(II) the total value of the stock of such 
     corporation,then that proportion of the fair market value of 
     the stock of such foreign corporation owned (within the 
     meaning of section 958(a)) by such donor at the time of such 
     transfer, which the fair market value of any assets owned by 
     such foreign corporation and situated in the United States, 
     at the time of such transfer, bears to the total fair market 
     value of all assets owned by such foreign corporation at the 
     time of such transfer, shall be included in the value of such 
     property.

     For purposes of the preceding sentence, a donor shall be 
     treated as owning stock of a foreign corporation at the time 
     of such transfer if, at such time, by trust or otherwise, 
     within the meaning of sections 2035 to 2038, inclusive, he 
     owned such stock.''.
       (e) Enhanced Information Reporting From Individuals Losing 
     United States Citizenship.--
       (1) In general.--Subsection (a) of section 6039G is amended 
     to read as follows:
       ``(a) In General.--Notwithstanding any other provision of 
     law, any individual to whom section 877(b) applies for any 
     taxable year shall provide a statement for such taxable year 
     which includes the information described in subsection 
     (b).''.
       (2) Information to be provided.--Subsection (b) of section 
     6039G is amended to read as follows:
       ``(b) Information To Be Provided.--Information required 
     under subsection (a) shall include--
       ``(1) the taxpayer's TIN,
       ``(2) the mailing address of such individual's principal 
     foreign residence,
       ``(3) the foreign country, in which such individual is 
     residing,
       ``(4) the foreign country of which such individual is a 
     citizen,
       ``(5) information detailing the assets and liabilities of 
     such individual,
       ``(6) the number of days that the individual was present in 
     the United States during the taxable year, and
       ``(7) such other information as the Secretary may 
     prescribe.''.
       (3) Increase in penalty.--Subsection (d) of section 6039G 
     is amended to read as follows:
       ``(d) Penalty.--If--
       ``(1) an individual is required to file a statement under 
     subsection (a) for any taxable year, and
       ``(2) fails to file such a statement with the Secretary on 
     or before the date such statement is required to be filed or 
     fails to include all the information required to be shown on 
     the statement or includes incorrect information,

     such individual shall pay a penalty of $5,000 unless it is 
     shown that such failure is due to reasonable cause and not to 
     willful neglect.''.
       (4) Conforming amendment.--Section 6039G is amended by 
     striking subsections (c), (f), and (g) and by redesignating 
     subsections (d) and (e) as subsection (c) and (d), 
     respectively.
       (f) Effective Date.--The amendments made by this section 
     shall apply to individuals who expatriate after February 27, 
     2003.

     SEC. 102. SUSPENSION OF TAX-EXEMPT STATUS OF TERRORIST 
                   ORGANIZATIONS.

       (a) In General.--Section 501 (relating to exemption from 
     tax on corporations, certain trusts, etc.) is amended by 
     redesignating subsection (p) as subsection (q) and by 
     inserting after subsection (o) the following new subsection:
       ``(p) Suspension of Tax-Exempt Status of Terrorist 
     Organizations.--
       ``(1) In general.--The exemption from tax under subsection 
     (a) with respect to any organization described in paragraph 
     (2), and the eligibility of any organization described in 
     paragraph (2) to apply for recognition of exemption under 
     subsection (a), shall be suspended during the period 
     described in paragraph (3).
       ``(2) Terrorist organizations.--An organization is 
     described in this paragraph if such organization is 
     designated or otherwise individually identified--
       ``(A) under section 212(a)(3)(B)(vi)(II) or 219 of the 
     Immigration and Nationality Act as a terrorist organization 
     or foreign terrorist organization,
       ``(B) in or pursuant to an Executive order which is related 
     to terrorism and issued under the authority of the 
     International Emergency Economic Powers Act or section 5 of 
     the United Nations Participation Act of 1945 for the purpose 
     of imposing on such organization an economic or other 
     sanction, or
       ``(C) in or pursuant to an Executive order issued under the 
     authority of any Federal law if--
       ``(i) the organization is designated or otherwise 
     individually identified in or pursuant to such Executive 
     order as supporting or engaging in terrorist activity (as 
     defined in section 212(a)(3)(B) of the Immigration and 
     Nationality Act) or supporting terrorism (as defined in 
     section 140(d)(2) of the Foreign Relations Authorization Act, 
     Fiscal Years 1988 and 1989); and
       ``(ii) such Executive order refers to this subsection.
       ``(3) Period of suspension.--With respect to any 
     organization described in paragraph (2), the period of 
     suspension--
       ``(A) begins on the later of--
       ``(i) the date of the first publication of a designation or 
     identification described in paragraph (2) with respect to 
     such organization, or
       ``(ii) the date of the enactment of this subsection, and
       ``(B) ends on the first date that all designations and 
     identifications described in paragraph (2) with respect to 
     such organization are rescinded pursuant to the law or 
     Executive order under which such designation or 
     identification was made.
       ``(4) Denial of deduction.--No deduction shall be allowed 
     under section 170, 545(b)(2), 556(b)(2), 642(c), 2055, 
     2106(a)(2), or 2522 for any contribution to an organization 
     described in paragraph (2) during the period described in 
     paragraph (3).
       ``(5) Denial of administrative or judicial challenge of 
     suspension or denial of deduction.--Notwithstanding section 
     7428 or any other provision of law, no organization

[[Page 6545]]

     or other person may challenge a suspension under paragraph 
     (1), a designation or identification described in paragraph 
     (2), the period of suspension described in paragraph (3), or 
     a denial of a deduction under paragraph (4) in any 
     administrative or judicial proceeding relating to the Federal 
     tax liability of such organization or other person.
       ``(6) Erroneous designation.--
       ``(A) In general.--If--
       ``(i) the tax exemption of any organization described in 
     paragraph (2) is suspended under paragraph (1),
       ``(ii) each designation and identification described in 
     paragraph (2) which has been made with respect to such 
     organization is determined to be erroneous pursuant to the 
     law or Executive order under which such designation or 
     identification was made, and
       ``(iii) the erroneous designations and identifications 
     result in an overpayment of income tax for any taxable year 
     by such organization,

     credit or refund (with interest) with respect to such 
     overpayment shall be made.
       ``(B) Waiver of limitations.--If the credit or refund of 
     any overpayment of tax described in subparagraph (A)(iii) is 
     prevented at any time by the operation of any law or rule of 
     law (including res judicata), such credit or refund may 
     nevertheless be allowed or made if the claim therefor is 
     filed before the close of the 1-year period beginning on the 
     date of the last determination described in subparagraph 
     (A)(ii).
       ``(7) Notice of Suspensions.--If the tax exemption of any 
     organization is suspended under this subsection, the Internal 
     Revenue Service shall update the listings of tax-exempt 
     organizations and shall publish appropriate notice to 
     taxpayers of such suspension and of the fact that 
     contributions to such organization are not deductible during 
     the period of such suspension.''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to designations made before, on, or after the 
     date of the enactment of this Act.

     SEC. 103. EXPRESSING THE SENSE OF THE CONGRESS THAT TAX 
                   REFORM IS NEEDED TO ADDRESS THE ISSUE OF 
                   CORPORATE EXPATRIATION.

       (a) Findings.--The Congress finds that--
       (1) the tax laws of the United States are overly complex;
       (2) the tax laws of the United States are among the most 
     burdensome and uncompetitive in the world;
       (3) the tax laws of the United States make it difficult for 
     domestically-owned United States companies to compete abroad 
     and in the United States;
       (4) a domestically-owned corporation is disadvantaged 
     compared to a United States subsidiary of a foreign-owned 
     corporation; and
       (5) international competitiveness is forcing many United 
     States corporations to make a choice they do not want to 
     make-go out of business, sell the business to a foreign 
     competitor, or become a subsidiary of a foreign corporation 
     (i.e., engage in an inversion transaction).
       (b) Sense of Congress.--It is the sense of Congress that 
     passage of legislation to fix the underlying problems with 
     our tax laws is essential and should occur as soon as 
     possible, so United States corporations will not face the 
     current pressures to engage in inversion transactions.

          TITLE II--RELIEF FOR FOREIGN SERVICE AND ASTRONAUTS

     SEC. 201. SPECIAL RULE FOR MEMBERS OF FOREIGN SERVICE IN 
                   DETERMINING EXCLUSION OF GAIN FROM SALE OF 
                   PRINCIPAL RESIDENCE.

       (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:
       ``(10) Members of foreign service.--
       ``(A) In general.--At the election of an individual with 
     respect to a property, the running of the 5-year period 
     referred to in subsections (a) and (c)(1)(B) and paragraph 
     (7) of this subsection 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 Foreign Service.
       ``(B) Maximum period of suspension.--Such 5-year period 
     shall not be extended more than 5 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 150 miles from such property or while 
     residing under Government orders in Government quarters.
       ``(ii) Foreign service.--The term `member of the Foreign 
     Service' 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, as in effect on the 
     date of the enactment of this paragraph.
       ``(iii) Extended duty.--The term `extended duty' means any 
     period of active duty pursuant to a call or order to such 
     duty for a period in excess of 180 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. 202. TAX RELIEF AND ASSISTANCE FOR FAMILIES OF 
                   ASTRONAUTS WHO LOSE THEIR LIVES ON A SPACE 
                   MISSION.

       (a) Income Tax Relief.--
       (1) In general.--Subsection (d) of section 692 (relating to 
     income taxes of members of Armed Forces and victims of 
     certain terrorist attacks on death) is amended by adding at 
     the end the following new paragraph:
       ``(5) Relief with respect to astronauts.--The provisions of 
     this subsection shall apply to any astronaut whose death 
     occurs while on a space mission, except that paragraph (3)(B) 
     shall be applied by using the date of the death of the 
     astronaut rather than September 11, 2001.''.
       (2) Conforming amendments.--
       (A) Section 5(b)(1) is amended by inserting ``, 
     astronauts,'' after ``Forces''.
       (B) Section 6013(f)(2)(B) is amended by inserting ``, 
     astronauts,'' after ``Forces''.
       (3) Clerical amendments.--
       (A) The heading of section 692 is amended by inserting ``, 
     ASTRONAUTS,'' after ``FORCES''.
       (B) The item relating to section 692 in the table of 
     sections for part II of subchapter J of chapter 1 is amended 
     by inserting ``, astronauts,'' after ``Forces''.
       (4) Effective date.--The amendments made by this subsection 
     shall apply with respect to any astronaut whose death occurs 
     after December 31, 2002.
       (b) Death Benefit Relief.--
       (1) In general.--Subsection (i) of section 101 (relating to 
     certain death benefits) is amended by adding at the end the 
     following new paragraph:
       ``(4) Relief with respect to astronauts.--The provisions of 
     this subsection shall apply to any astronaut whose death 
     occurs while on a space mission.''.
       (2) Clerical amendment.--The heading for subsection (i) of 
     section 101 is amended by inserting ``or Astronauts'' after 
     ``Victims''.
       (3) Effective date.--The amendments made by this subsection 
     shall apply to amounts paid after December 31, 2002, with 
     respect to deaths occurring after such date.
       (c) Estate Tax Relief.--
       (1) In general.--Subsection (b) of section 2201 (defining 
     qualified decedent) is amended by striking ``and'' at the end 
     of paragraph (1)(B), by striking the period at the end of 
     paragraph (2) and inserting ``, and'', and by adding at the 
     end the following new paragraph:
       ``(3) any astronaut whose death occurs while on a space 
     mission.''.
       (2) Clerical amendments.--
       (A) The heading of section 2201 is amended by inserting ``, 
     DEATHS OF ASTRONAUTS,'' after ``FORCES''.
       (B) The item relating to section 2201 in the table of 
     sections for subchapter C of chapter 11 is amended by 
     inserting ``, deaths of astronauts,'' after ``Forces''.
       (3) Effective date.--The amendments made by this subsection 
     shall apply to estates of decedents dying after December 31, 
     2002.

                      TITLE III--HEALTH PROVISIONS

     SEC. 301. VACCINE TAX TO APPLY TO HEPATITIS A VACCINE.

       (a) In General.--Paragraph (1) of section 4132(a) (defining 
     taxable vaccine) is amended by redesignating subparagraphs 
     (I), (J), (K), and (L) as subparagraphs (J), (K), (L), and 
     (M), respectively, and by inserting after subparagraph (H) 
     the following new subparagraph:
       ``(I) Any vaccine against hepatitis A.''
       (b) Effective Date.--
       (1) Sales, etc.--The amendments made by subsection (a) 
     shall apply to sales and uses on or after the first day of 
     the first month which begins more than 4 weeks after the date 
     of the enactment of this Act.
       (2) Deliveries.--For purposes of paragraph (1) and section 
     4131 of the Internal Revenue Code of 1986, in the case of 
     sales on or before the effective date described in such 
     paragraph for which delivery is made after such date, the 
     delivery date shall be considered the sale date.

     SEC. 302. EXPANSION OF HUMAN CLINICAL TRIALS QUALIFYING FOR 
                   ORPHAN DRUG CREDIT.

       (a) In General.--Paragraph (2) of section 45C(b) (relating 
     to qualified clinical testing

[[Page 6546]]

     expenses) is amended by adding at the end the following new 
     subparagraph:
       ``(C) Treatment of certain expenses incurred before 
     designation.--For purposes of subparagraph (A)(ii)(I), if a 
     drug is designated under section 526 of the Federal Food, 
     Drug, and Cosmetic Act not later than the due date (including 
     extensions) for filing the return of tax under this subtitle 
     for the taxable year in which the application for such 
     designation of such drug was filed, such drug shall be 
     treated as having been designated on the date that such 
     application was filed. The preceding sentence shall not apply 
     with respect to any expense incurred after December 31, 
     2010.''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to expenses incurred after the date of the 
     enactment of this Act.

                TITLE IV--FOREST CONSERVATION ACTIVITIES

     SEC. 401. PILOT PROJECT FOR FOREST CONSERVATION ACTIVITIES.

       (a) Tax-Exempt Bond Financing.--
       (1) In General.--For purposes of the Internal Revenue Code 
     of 1986, any qualified forest conservation bond shall be 
     treated as an exempt facility bond under section 142 of such 
     Code.
       (2) Qualified forest conservation bond.--For purposes of 
     this section, the term ``qualified forest conservation bond'' 
     means any bond issued as part of an issue if--
       (A) 95 percent or more of the net proceeds (as defined in 
     section 150(a)(3) of such Code) of such issue are to be used 
     for qualified project costs,
       (B) such bond is an obligation of the State of Washington 
     or any political subdivision thereof and is issued for the 
     Evergreen Forest Trust, and
       (C) such bond is issued before October 1, 2004.
       (3) Limitation on aggregate amount issued.--The maximum 
     aggregate face amount of bonds which may be issued under this 
     section shall not exceed $250,000,000.
       (4) Qualified project costs.--For purposes of this 
     subsection, the term ``qualified project costs'' means the 
     sum of--
       (A) the cost of acquisition by the Evergreen Forest Trust 
     from an unrelated person of forests and forest land--
       (i) which are located in the State of Washington, and
       (ii) which at the time of acquisition or immediately 
     thereafter are subject to a conservation restriction 
     described in subsection (c)(2),
       (B) capitalized interest on the qualified forest 
     conservation bonds for the 3-year period beginning on the 
     date of issuance of such bonds, and
       (C) credit enhancement fees which constitute qualified 
     guarantee fees (within the meaning of section 148 of such 
     Code).
       (5) Special rules.--In applying the Internal Revenue Code 
     of 1986 to any qualified forest conservation bond, the 
     following modifications shall apply:
       (A) Section 146 of such Code (relating to volume cap) shall 
     not apply.
       (B) For purposes of section 147(b) of such Code (relating 
     to maturity may not exceed 120 percent of economic life), the 
     land and standing timber acquired with proceeds of qualified 
     forest conservation bonds shall have an economic life of 35 
     years.
       (C) Subsections (c) and (d) of section 147 of such Code 
     (relating to limitations on acquisition of land and existing 
     property) shall not apply.
       (D) Section 57(a)(5) of such Code (relating to tax-exempt 
     interest) shall not apply to interest on qualified forest 
     conservation bonds.
       (6) Treatment of current refunding bonds.--Paragraphs 
     (2)(C) and (3) shall not apply to any bond (or series of 
     bonds) issued to refund a qualified forest conservation bond 
     issued before October 1, 2004, if--
       (A) the average maturity date of the issue of which the 
     refunding bond is a part is not later than the average 
     maturity date of the bonds to be refunded by such issue,
       (B) the amount of the refunding bond does not exceed the 
     outstanding amount of the refunded bond, and
       (C) the net proceeds of the refunding bond are used to 
     redeem the refunded bond not later than 90 days after the 
     date of the issuance of the refunding bond.

     For purposes of subparagraph (A), average maturity shall be 
     determined in accordance with section 147(b)(2)(A) of such 
     Code.
       (7) Effective date.--This subsection shall apply to 
     obligations issued after the date of the enactment of this 
     Act.
       (b) Items From Qualified Harvesting Activities Not Subject 
     to Tax or Taken Into Account.--
       (1) In general.--Income, gains, deductions, losses, or 
     credits from a qualified harvesting activity conducted by the 
     Evergreen Forest Trust shall not be subject to tax or taken 
     into account under subtitle A of the Internal Revenue Code of 
     1986.
       (2) Qualified harvesting activity.--For purposes of 
     paragraph (1)--
       (A) In general.--The term ``qualified harvesting activity'' 
     means the sale, lease, or harvesting, of standing timber--
       (i) on land owned by the Evergreen Forest Trust which was 
     acquired with proceeds of qualified forest conservation 
     bonds, and
       (ii) pursuant to a qualified conservation plan adopted by 
     the Evergreen Forest Trust.
       (B) Exceptions.--
       (i) Cessation as qualified organization.--The term 
     ``qualified harvesting activity'' shall not include any sale, 
     lease, or harvesting during any period that the Evergreen 
     Forest Trust is not a qualified organization.
       (ii) Exceeding limits on harvesting.--The term ``qualified 
     harvesting activity'' shall not include any sale, lease, or 
     harvesting of standing timber on land acquired with proceeds 
     of qualified forest conservation bonds to the extent that--

       (I) the average annual area of timber harvested from such 
     land exceeds 2.5 percent of the total area of such land, or
       (II) the quantity of timber removed from such land exceeds 
     the quantity which can be removed from such land annually in 
     perpetuity on a sustained-yield basis with respect to such 
     land.

     The limitations under subclauses (I) and (II) shall not apply 
     to salvage or sanitation harvesting of timber stands which 
     are substantially damaged by fire, windthrow, or other 
     catastrophe, or which are in imminent danger from insect or 
     disease attack.
       (3) Termination.--This subsection shall not apply to any 
     qualified harvesting activity occurring after the date on 
     which there is no outstanding qualified forest conservation 
     bond or any such bond ceases to be a tax-exempt bond.
       (4) Partial recapture of benefits if harvesting limit 
     exceeded.--If, as of the date that this subsection ceases to 
     apply under paragraph (3), the average annual area of timber 
     harvested from the land exceeds the requirement of paragraph 
     (2)(B)(ii)(I), the tax imposed by chapter 1 of the Internal 
     Revenue Code of 1986 shall be increased, under rules 
     prescribed by the Secretary, by the sum of the tax benefit 
     attributable to such excess and interest at the underpayment 
     rate under section 6621 for the period of the underpayment.
       (c) Definitions.--For purposes of this section--
       (1) Qualified conservation plan.--The term ``qualified 
     conservation plan'' means a multiple land use program or plan 
     which--
       (A) is designed and administered primarily for the purposes 
     of protecting and enhancing wildlife and fish, timber, scenic 
     attributes, recreation, and soil and water quality of the 
     forest and forest land,
       (B) mandates that conservation of forest and forest land is 
     the single-most significant use of the forest and forest 
     land,
       (C) requires that timber harvesting be consistent with--
       (i) restoring and maintaining reference conditions for the 
     Westside Douglas Fir forest type,
       (ii) restoring and maintaining a representative sample of 
     young, mid, and late successional forest age classes,
       (iii) maintaining or restoring the resources' ecological 
     health for purposes of preventing damage from fire, insect, 
     or disease,
       (iv) maintaining or enhancing wildlife or fish habitat,
       (v) enhancing research opportunities in sustainable 
     renewable resource uses, or
       (vi) preserving or protecting open space.
       (2) Conservation restriction.--The conservation restriction 
     described in this paragraph is a restriction which--
       (A) is granted in perpetuity to an unrelated person which 
     is described in section 170(h)(3) of such Code and which, in 
     the case of a nongovernmental unit, is organized and operated 
     for conservation purposes,
       (B) meets the requirements of clause (ii) or (iii)(II) of 
     section 170(h)(4)(A) of such Code,
       (C) obligates the Evergreen Forest Trust to pay the costs 
     incurred by the holder of the conservation restriction in 
     monitoring compliance with such restriction, and
       (D) requires an increasing level of conservation benefits 
     to be provided whenever circumstances allow it.
       (3) Qualified organization.--The term ``qualified 
     organization'' means an organization--
       (A) which is a nonprofit organization organized and 
     operated exclusively for charitable, scientific, or 
     educational purposes including but not limited to acquiring, 
     protecting, restoring, managing, and developing forest lands 
     and other renewable resources for the long-term charitable, 
     educational, scientific, and public benefit of the State of 
     Washington,
       (B) more than half of the value of the property of which 
     consists of forests and forest land acquired with the 
     proceeds from qualified forest conservation bonds,
       (C) which periodically conducts educational programs 
     designed to inform the public of environmentally sensitive 
     forestry management and conservation techniques,
       (D) which has a board of directors that at all times is 
     comprised of 9 members--
       (i) at least 2 of whom represent the holders of the 
     conservation restriction described in paragraph (2), and
       (ii) at least 2 of whom are public officials,
       (E) of which not more than one-third of the members of the 
     board of directors is comprised of individuals who are or 
     were at any time within 5 years before the beginning of a

[[Page 6547]]

     term of membership on the board, an employee of, independent 
     contractor with respect to, officer of, director of, or held 
     a material financial interest in, a commercial forest 
     products enterprise with which the Evergreen Forest Trust has 
     a contractual or other financial arrangement,
       (F) the bylaws of which require at least two-thirds of the 
     members of the board of directors to vote affirmatively to 
     approve the qualified conservation program and any change 
     thereto, and
       (G) upon dissolution, is required to dedicate its assets 
     to--
       (i) an organization described in section 501(c)(3) of such 
     Code which is organized and operated for conservation 
     purposes, or
       (ii) a governmental unit described in section 170(c)(1) of 
     such Code.
       (4) Evergreen forest trust.--The term ``Evergreen Forest 
     Trust'' means a nonprofit corporation known as the Evergreen 
     Forest Trust which was incorporated on February 25, 2000, 
     under chapter 24.03 of the Revised Code of Washington and 
     which, on May 11, 2001, was recognized as an organization 
     described in section 501(c)(3) of the Internal Revenue Code 
     of 1986.
       (5) Unrelated person.--The term ``unrelated person'' means 
     a person who is not a related person.
       (6) Related person.--A person shall be treated as related 
     to another person if--
       (A) such person bears a relationship to such other person 
     described in section 267(b) (determined without regard to 
     paragraph (9) thereof), or 707(b)(1), of such Code, 
     determined by substituting ``25 percent'' for ``50 percent'' 
     each place it occurs therein, and
       (B) in the case such other person is a nonprofit 
     organization, if such person controls directly or indirectly 
     more than 25 percent of the governing body of such 
     organization.

            TITLE V--RELIEF AND EQUITY FOR SMALL BUSINESSES

     SEC. 501. SIMPLIFICATION OF EXCISE TAX IMPOSED ON BOWS AND 
                   ARROWS.

       (a) Bows.--Paragraph (1) of section 4161(b) (relating to 
     bows) is amended to read as follows:
       ``(1) Bows.--
       ``(A) In general.--There is hereby imposed on the sale by 
     the manufacturer, producer, or importer of any bow which has 
     a draw weight of 30 pounds or more, a tax equal to 11 percent 
     of the price for which so sold.
       ``(B) Archery equipment.--There is hereby imposed on the 
     sale by the manufacturer, producer, or importer--
       ``(i) of any part or accessory suitable for inclusion in or 
     attachment to a bow described in subparagraph (A), and
       ``(ii) of any quiver or broadhead suitable for use with an 
     arrow described in paragraph (3),

     a tax equal to 11 percent of the price for which so sold.''.
       (b) Arrows.--Subsection (b) of section 4161 (relating to 
     bows and arrows, etc.) is amended by redesignating paragraph 
     (3) as paragraph (4) and inserting after paragraph (2) the 
     following:
       ``(3) Arrows.--
       ``(A) In general.--There is hereby imposed on the sale by 
     the manufacturer, producer, or importer of any arrow, a tax 
     equal to 12 percent of the price for which so sold.
       ``(B) Exception.--The tax imposed by subparagraph (A) on an 
     arrow shall not apply if the arrow contains an arrow shaft 
     subject to the tax imposed by paragraph (2).
       ``(C) Arrow.--For purposes of this paragraph, the term 
     `arrow' means any shaft described in paragraph (2) to which 
     additional components are attached.''.
       (c) Conforming Amendment.--The heading of section 
     4161(b)(2) is amended by striking ``Arrows.--'' and inserting 
     ``Arrow components.--''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to articles sold by the manufacturer, producer, 
     or importer after the 90th day after the date of the 
     enactment of this Act.

     SEC. 502. CAPITAL GAIN TREATMENT UNDER SECTION 631(B) TO 
                   APPLY TO OUTRIGHT SALES BY LANDOWNERS.

       (a) In General.--The first sentence of section 631(b) 
     (relating to disposal of timber with a retained economic 
     interest) is amended by striking ``retains an economic 
     interest in such timber'' and inserting ``either retains an 
     economic interest in such timber or makes an outright sale of 
     such timber''.
       (b) Conforming Amendments.--
       (1) The third sentence of section 631(b) is amended by 
     striking ``The date of disposal'' and inserting ``In the case 
     of disposal of timber with a retained economic interest, the 
     date of disposal''.
       (2) The heading for section 631(b) is amended by striking 
     ``With a Retained Economic Interest''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to sales after the date of the enactment of this 
     Act.

     SEC. 503. REPEAL OF EXCISE TAX ON FISHING TACKLE BOXES.

       (a) Repeal.--Paragraph (6) of section 4162(a) (defining 
     sport fishing equipment) is amended by striking subparagraph 
     (C) and by redesignating subparagraphs (D) through (J) as 
     subparagraphs (C) through (I), respectively.
       (b) Effective Date.--The amendment made by this section 
     shall take effect 30 days after the date of the enactment of 
     this Act.

     SEC. 504. TREATMENT UNDER AT-RISK RULES OF PUBLICLY TRADED 
                   NONRECOURSE DEBT.

       (a) In General.--Subparagraph (A) of section 465(b)(6) 
     (relating to qualified nonrecourse financing treated as 
     amount at risk) is amended by striking ``share of'' and all 
     that follows and inserting ``share of--
       ``(i) any qualified nonrecourse financing which is secured 
     by real property used in such activity, and
       ``(ii) any other financing which--

       ``(I) would (but for subparagraph (B)(ii)) be qualified 
     nonrecourse financing,
       ``(II) is qualified publicly traded debt, and
       ``(III) is not borrowed by the taxpayer from a person 
     described in subclause (I), (II), or (III) of section 
     49(a)(1)(D)(iv).''.

       (b) Qualified Publicly Traded Debt.--Paragraph (6) of 
     section 465(b) is amended by adding at the end the following 
     new subparagraph:
       ``(F) Qualified publicly traded debt.--For purposes of 
     subparagraph (A), the term `qualified publicly traded debt' 
     means any debt instrument which is readily tradable on an 
     established securities market. Such term shall not include 
     any debt instrument which has a yield to maturity which 
     equals or exceeds the limitation in section 163(i)(1)(B).''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to debt instruments issued after the date of the 
     enactment of this Act.

                      TITLE VI--EQUITY FOR FARMERS

     SEC. 601. SPECIAL RULES FOR LIVESTOCK SOLD ON ACCOUNT OF 
                   WEATHER-RELATED CONDITIONS.

       (a) Rules for Replacement of Involuntarily Converted 
     Livestock.--Subsection (e) of section 1033 (relating to 
     involuntary conversions) is amended--
       (1) by striking ``Conditions.--For purposes'' and inserting 
     ``Conditions.--
       ``(1) In general.--For purposes'', and
       (2) by adding at the end the following new paragraph:
       ``(2) Extension of replacement period.--
       ``(A) In general.--In the case of drought, flood, or other 
     weather-related conditions described in paragraph (1) which 
     result in the area being designated as eligible for 
     assistance by the Federal Government, subsection (a)(2)(B) 
     shall be applied with respect to any converted property by 
     substituting `4 years' for `2 years'.
       ``(B) Further extension by secretary.--The Secretary may 
     extend on a regional basis the period for replacement under 
     this section (after the application of subparagraph (A)) for 
     such additional time as the Secretary determines appropriate 
     if the weather-related conditions which resulted in such 
     application continue for more than 3 years.''.
       (b) Income Inclusion Rules.--Subsection (e) of section 451 
     (relating to special rule for proceeds from livestock sold on 
     account of drought, flood, or other weather-related 
     conditions) is amended by adding at the end the following new 
     paragraph:
       ``(3) Special election rules.--If section 1033(e)(2) 
     applies to a sale or exchange of livestock described in 
     paragraph (1), the election under paragraph (1) shall be 
     deemed valid if made during the replacement period described 
     in such section.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to any taxable year with respect to which the due 
     date (without regard to extensions) for the return is after 
     December 31, 2002.

     SEC. 602. INCOME AVERAGING FOR FARMERS NOT TO INCREASE 
                   ALTERNATIVE MINIMUM TAX.

       (a) In General.--Subsection (c) of section 55 (defining 
     regular tax) is amended by redesignating paragraph (2) as 
     paragraph (3) and by inserting after paragraph (1) the 
     following new paragraph:
       ``(2) Coordination with income averaging for farmers.--
     Solely for purposes of this section, section 1301 (relating 
     to averaging of farm income) shall not apply in computing the 
     regular tax liability.''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to taxable years beginning after December 31, 
     2002.

     SEC. 603. PAYMENT OF DIVIDENDS ON STOCK OF COOPERATIVES 
                   WITHOUT REDUCING PATRONAGE DIVIDENDS.

       (a) In General.--Subsection (a) of section 1388 (relating 
     to patronage dividend defined) is amended by adding at the 
     end the following: ``For purposes of paragraph (3), net 
     earnings shall not be reduced by amounts paid during the year 
     as dividends on capital stock or other proprietary capital 
     interests of the organization to the extent that the articles 
     of incorporation or bylaws of such organization or other 
     contract with patrons provide that such dividends are in 
     addition to amounts otherwise payable to patrons which are 
     derived from business done with or for patrons during the 
     taxable year.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to distributions in taxable years beginning after 
     the date of the enactment of this Act.

                TITLE VII--PROTECTION OF SOCIAL SECURITY

     SEC. 701. PROTECTION OF SOCIAL SECURITY.

       The amounts transferred to any trust fund under title II of 
     the Social Security Act shall

[[Page 6548]]

     be determined as if this Act (other than title I, section 
     301, and this section) had not been enacted.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
California (Mr. Thomas) and the gentleman from New York (Mr. Rangel) 
each will control 20 minutes.
  The Chair recognizes the gentleman from California (Mr. Thomas).
  Mr. THOMAS. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, this is a modest bill that has come to the light of day 
by virtue of examining those issues, although modest in nature, that 
have passed the House or the Senate, or both, one or more times, but 
somehow have never made it to the President's desk for signature.
  Other measures in this bill are those measures that raise revenue in 
ways that those committees responsible for assisting us in determining 
ways to change the law indicate an appropriate change of the law.
  Lastly, there are items which were approved by the committee, 
notwithstanding the fact they do not raise revenue or they had been 
approved previously, which merited the committee's voice voting, that 
is, no recorded vote, and the bill itself passed by a voice vote. If 
there was a measure that appeared to elicit controversy, that is, it 
was a recorded vote in committee, then that measure is not included in 
this particular provision. For example, there was an amendment offered 
to extend some provisions of the military bill just passed to 
astronauts who die on space missions. Obviously, that was a voice vote, 
and it was unanimously agreed to.
  There is a modification on the orphan drug credit provision. This 
particular measure has passed the Committee on Ways and Means twice, it 
passed the House three times, and it passed the Senate, but, 
notwithstanding that stellar legislative career, it has never made it 
to the President's desk for his signature.
  There are other items in here which exemplify the fact that brought 
to our attention over time are provisions of the Tax Code which make 
absolutely no sense and should not remain in the Tax Code for 1 day 
longer than our ability to amend it, and, yet, notwithstanding that, 
remain on the books.
  The gentleman from Wisconsin brought us an example which I think is 
particularly egregious. It has to do with a very modest subject called 
bows and arrows. As you might guess, some arrows are produced 
domestically, and some are produced outside the United States. You 
would think that if someone was going to import the components to 
assemble an arrow, that is, use foreign parts and U.S. labor, that you 
would not tax the foreign parts so that they could come in, so the 
value added would be U.S. to produce that arrow.
  But, ironically, it is exactly the opposite. It is the completed 
arrow, with the foreign labor added, that comes in free of a tax, and 
the component parts are taxed, which would make it more expensive if 
you added U.S. labor. That is in direct competition to a U.S. arrow 
which carries the tax.
  Now, how in the world could the Tax Code get that far on its head? 
You do not want to pursue that questioning, you only want to change it 
immediately; not so, as some of the media has reported, that we give a 
tax break to domestic producers of arrows, but that we create a fair 
and equitable relationship between those arrows composed of foreign 
components assembled by foreign labor in competition with American 
arrows composed of American material. It seems to me that the only fair 
thing is to treat them equally. The Tax Code does not do that, in part 
or in whole. That is a typical example of one of the modest measures 
that are included in this provision.
  Mr. Speaker, I reserve the balance of my time.
  Mr. RANGEL. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I guess I rise in support of the bill. The reason I 
reluctantly say ``I guess'' is because the Republicans once again have 
shrewdly put us into a political box by bringing to the floor a 
provision that provides tax relief for the families of the Columbia 
Shuttle astronauts out of compassion for these families. There is no 
one in the country, no one in the House, that would not want to support 
this very, very sensitive provision. But, once again, the Republican 
leadership has to make things difficult.
  I am really amazed and surprised that as we ask for support for this 
bill, that we have to put tax provisions on this bill to provide relief 
for those people who make bows and arrows. It is totally unbelievable. 
If that is not enough, then we have to find out why would we repeal the 
tax on fishing tackle boxes and provide benefits for livestock sold on 
account of drought or other weather-related issues?
  Why, in God's name, can we not hold sacred just taking care of the 
families of the shuttle astronauts, and not clobber this bill with 
stuff that is just nothing more than provisions that people want to 
provide for their people back home? I have no problem with providing 
relief for pet projects back home. That is part of our responsibility. 
But why in the world would we put it on a bill like this?
  I will tell you why; so we do not have to debate these things on 
their merit. There is no one, in my opinion, prepared to explain why 
they voted against the families of Columbia Shuttle astronauts from 
receiving benefits.
  I may have missed something. Thank God they have taken out 
eliminating taxes on foreign bettors on horse racing. They have taken 
out repeal of consumer health protection.
  But if the Republicans have anything else to say about this bill, and 
I do hope that they do, please explain to this Member why on this bill 
they sought to attach unrelated tax benefits for fishing tackle boxes, 
for removing taxes on bows and arrows, and providing benefits for 
livestock sold on account of drought or other weather-related 
conditions.

                              {time}  1130

  It would seem to me that if this relief is important enough for the 
House of Representatives to consider, then out of respect, it should 
never, never, never have been put on the Suspension Calendar with the 
Columbian shuttle astronaut bill which puts the Members of the House in 
the position of having to support stuff that they never would be able 
to explain because they support the families of the shuttle victims.
  Well, I do hope to hear from the other side soon on these other 
issues.
  Mr. Speaker, I yield 3 minutes to the gentleman from Michigan (Mr. 
Levin), a senior member of the Committee on Ways and Means.
  Mr. LEVIN. Mr. Speaker, the gentleman from New York (Mr. Rangel) has 
explained his reluctant support because of the provision in here that 
needs to be in here. As I understand it, that positive provision was 
taken from the other bill and placed in this bill, so we are in a 
situation where, as to the clearly legitimate provision, we either vote 
``yes'' and pass this or vote ``no'' because of other provisions and, 
therefore, bring down what we should be doing.
  This is not the way to proceed in a deliberative body where there is 
also respect for the views of every Member of this institution and the 
ability of every Member here to be heard, to at least raise the issue 
of amendments.
  So I want to just say a few words about two of the provisions, one 
relating to individual inversions or those expatriates, people who 
leave the country to avoid taxes. There is a Senate approach and a 
House approach. The Senate approach is far superior. What it does 
essentially is it says to people who leave this country, individuals, 
we are going to tax you as you leave on all of your unrealized income. 
The House bill is much weaker. We should have had a chance to present 
these two alternatives on the floor of the House.
  Secondly, let me say a word about the sense of the Congress on the 
issue of corporate expatriation. The gentleman from Massachusetts (Mr. 
Neal) has had a bill here for months that addresses this issue. What 
this sense of the Congress provision does is essentially to, I think, 
paper it over and to paper it over incorrectly. Essentially what it 
says is, to those who engage in corporate expatriation, it is not your

[[Page 6549]]

fault, it is the fault of the Tax Code. And I do not think we should be 
giving that kind of, if not approval, a pass to those corporations that 
escape American taxes by moving a headquarters overseas while often 
continuing to have a major presence in the U.S.
  We can do much better on both individual and corporate inversions 
expatriations. But what has happened here is we have eliminated our 
chance to even consider this intelligently and deliberately by putting 
these provisions in a bill in a way that we cannot vote ``no.''
  So those of us who will vote ``yes,'' in many cases, vote with those 
limitations.
  Mr. THOMAS. Mr. Speaker, I reserve the balance of my time.
  Mr. RANGEL. Mr. Speaker, I yield myself such time as I may consume.
  I am disappointed that we do not have an explanation as to why the 
fishing tackle boxes and the removal of taxes of bows and arrows and 
benefits for livestock and an explanation of why those are on this 
bill, but I guess silence is probably the best explanation that we can 
possibly come up with, and that is they feel very awkward and 
embarrassed and ashamed that they would have to resort to a mechanism 
like this in putting this on the Columbia Shuttle victims' bill.
  That being what it is, I am not prepared to go home and explain why I 
voted for these bows and arrows and fishing boxes and livestock. It 
suffices to say that all of us in our hearts know that the same way the 
men and women have been heroes for all of us in the Armed Forces, we 
cannot do enough to pay tribute to the heroes that served the United 
States and the world by meeting the challenges of outer space, and that 
forever in our hearts we will remember the families of the Columbia 
Shuttle, and whatever we can ever do in the Congress or anywhere, for 
that matter, to ease their pain and to show our support, we want the 
families to know that even if sometimes it means swallowing hard, they 
can depend on us being there for them as they were there for us.
  Mr. Speaker, I yield back the balance of my time.
  Mr. THOMAS. Mr. Speaker, I yield myself such time as I may consume.
  This gentleman from California spent, I believe, 3 minutes explaining 
the bow and arrow provision and why it was included. It was an 
amendment that was presented to the committee. It is an unfairness in 
the Tax Code, and it passed by a voice vote, just as the astronaut 
provision was an amendment to this measure.
  Now, I know that in some situations you are damned if you do and 
damned if you do not. Had we selectively pulled amendments out and 
included them in the military bill, we would have been criticized, as 
we were before, that we were placing items on the military bill that, 
in fact, were not originally on the bill. That is why we are carrying a 
separate bill in dealing with all of those amendments that passed by 
voice vote.
  I did say in the opening statement one of the provisions, as compared 
to all of the other provisions that have passed the House, the Senate, 
and sometimes both multiple times, the livestock provision did not pass 
the House before. It is a response to a current problem and 
circumstance. When you lose livestock, you have an ability to deal with 
an involuntary conversion. The loss of livestock is over the drought.
  Now, it is unfortunate that weather does not follow a taxable 
calendar year. If that were the case and we have 2 years in which to 
deal with the involuntary compensation and replace the livestock, if 
that drought which killed the first cow is still present and will kill 
the second cow, it does not make a whole lot of sense to provide a time 
frame which encompasses an ongoing drought. So the gentleman from 
Colorado offered an amendment, accepted by voice vote, that says, let 
us extend that involuntary conversion to 4 years and not 2. Hopefully, 
the drought will be over in that 4-year period, and they will be able 
to get an involuntary conversion for a cow that, because there is no 
longer a drought, will be able to stay alive.
  It seems to me that these provisions are worthy and should move 
forward.
  Mr. BEREUTER. Mr. Speaker, this Member rises in support of H.R. 1308, 
the Tax Reform, Simplification and Equity Act, and in particular the 
provisions which will assist our nation's farmers and ranchers who are 
suffering from a devastating drought.
  Mr. Speaker, this Member is pleased that H.R. 1308 includes an 
important provision originally introduced by the distinguished 
gentleman from Colorado (Mr. McInnis) which is designed to assist 
farmers and ranchers suffering from the drought. This Member is a 
strong supporter and cosponsor of the Ranchers HELP Act, which is 
included in H.R. 1308. This provision would provide ``involuntary 
conversion'' tax relief for producers forced to sell livestock under 
certain circumstances, such as weather-related conditions. 
Specifically, the bill would allow producers four years (rather than 
the current two year limit) after a forced sale to reinvest in 
livestock without facing capital gains taxes. The Ranchers HELP 
legislation also would allow the Federal Government the flexibility to 
extend the amount of time a farmer or rancher can take to restore a 
herd in certain regions experiencing a drought which lasts more than 
three years.
  It is important for the Federal Government to take actions, where 
appropriate to help relieve the hardships caused by the severe drought 
affecting Nebraska and the Great Plains region. The provisions included 
in this bill are an important step in that direction.
  There are two other provisions that should help farmers. Under 
current law, farmers are allowed to average their income over three 
years for tax purposes since farm income often fluctuates from year to 
year. However, farmers who choose this option often fall into the 
Alternative Minimum Tax (AMT). The provision in H.R. 1308 ensures that 
farmers are not harmed by the AMT if they elect income averaging. In 
1999 and 2000, this provision was included in a tax relief bill passed 
by the House and the Senate that subsequently was vetoed by then-
President Clinton twice.
  Another provision will help cooperatives that now face up to three 
levels of tax penalties. This legislation includes a reduction of one 
of these levels by providing that patronage dividends of cooperatives 
will not be reduced by stock dividends to the extent the stock 
dividends are in addition to amounts otherwise payable.
  Mr. Speaker, this Member urges his colleagues to support H.R. 1308, 
the Tax Reform, Simplification and Equity Act.
  Ms. DUNN. Mr. Speaker, I rise today in support of H.R. 1308, the Tax 
Relief, Simplification, and Equity Act.
  Among other items, the bill contains an innovative solution to one of 
the most difficult challenges we face as policymakers--conserving our 
land while ensuring that it remains a source of economic activity.
  What has been lacking in the Pacific Northwest is cooperation and 
collaboration between environmentalists, the business community, and 
local government on how best to solve difficult environmental issues. 
Until now.
  Recently, numerous programs in Washington State have been developed 
that provide a road map for how everybody can come together to achieve 
environmental protection.
  In particular, numerous conservation groups have been working with 
large landowners in an attempt to purchase sensitive parcels of land 
and protect them from development. What they're lacking is access to 
capital.
  This bill will give them tax-exempt bond financing to preserve these 
lands. In exchange, the land must continue to be used as a productive 
resource and managed with the input of a diverse group of interests.
  In the interest of progress in land conservation, I urge my 
colleagues to support this bill.
  Mr. THOMAS. Mr. Speaker, I yield back the balance of my time.
  The SPEAKER pro tempore (Mr. Linder). The question is on the motion 
offered by the gentleman from California (Mr. Thomas) that the House 
suspend the rules and pass the bill, H.R. 1308.
  The question was taken; and (two-thirds having voted in favor 
thereof) the rules were suspended and the bill was passed.
  A motion to reconsider was laid on the table.

                          ____________________