[House Report 104-491]
[From the U.S. Government Publishing Office]



104th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES

 2d Session                                                     104-491
_______________________________________________________________________


 
                           LINE ITEM VETO ACT

                                _______


                 March 21, 1996.--Ordered to be printed

_______________________________________________________________________


 Mr. Clinger, from the committee of conference, submitted the following

                           CONFERENCE REPORT

                          [To accompany S. 4]

                  Conference Report (H. Rept. 104-491)

      The committee of conference on the disagreeing votes of 
the two Houses on the amendments of the House to the bill (S. 
4), to grant the power to the President to reduce budget 
authority, having met, after full and free conference, have 
agreed to recommend and do recommend to their respective Houses 
as follows:
      That the Senate recede from its disagreement to the 
amendment of the House to the text of the bill and agree to the 
same with an amendment as follows:
      In lieu of the matter proposed to be inserted by the 
House amendment, insert the following:

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Line Item Veto Act''.

SEC. 2. LINE ITEM VETO AUTHORITY.

    (a) In General.--Title X of the Congressional Budget and 
Impoundment Control Act of 1974 (2 U.S.C. 681 et seq.) is 
amended by adding at the end the following new part:

                        ``Part C--Line Item Veto


                       ``line item veto authority


    ``Sec. 1021. (a) In General.--Notwithstanding the 
provisions of parts A and B, and subject to the provisions of 
this part, the President may, with respect to any bill or joint 
resolution that has been signed into law pursuant to Article I, 
section 7, of the Constitution of the United States, cancel in 
whole--
            ``(1) any dollar amount of discretionary budget 
        authority;
            ``(2) any item of new direct spending; or
            ``(3) any limited tax benefit;
if the President--
            ``(A) determines that such cancellation will--
                    ``(i) reduce the Federal budget deficit;
                    ``(ii) not impair any essential Government 
                functions; and
                    ``(iii) not harm the national interest; and
            ``(B) notifies the Congress of such cancellation by 
        transmitting a special message, in accordance with 
        section 1022, within five calendar days (excluding 
        Sundays) after the enactment of the law providing the 
        dollar amount of discretionary budget authority, item 
        of new direct spending, or limited tax benefit that was 
        canceled.
    ``(b) Identification of Cancellations.--In identifying 
dollar amounts of discretionary budget authority, items of new 
direct spending, and limited tax benefits for cancellation, the 
President shall--
            ``(1) consider the legislative history, 
        construction, and purposes of the law which contains 
        such dollar amounts, items, or benefits;
            ``(2) consider any specific sources of information 
        referenced in such law or, in the absence of specific 
        sources of information, the best available information; 
        and
            ``(3) use the definitions contained in section 1026 
        in applying this part to the specific provisions of 
        such law.
    ``(c) Exception for Disapproval Bills.--The authority 
granted by subsection (a) shall not apply to any dollar amount 
of discretionary budget authority, item of new direct spending, 
or limited tax benefit contained in any law that is a 
disapproval bill as defined in section 1026.


                           ``special messages


    ``Sec. 1022. (a) In General.--For each law from which a 
cancellation has been made under this part, the President shall 
transmit a single special message to the Congress.
    ``(b) Contents.--
            ``(1) The special message shall specify--
                    ``(A) the dollar amount of discretionary 
                budget authority, item of new direct spending, 
                or limited tax benefit which has been canceled, 
                and provide a corresponding reference number 
                for each cancellation;
                    ``(B) the determinations required under 
                section 1021(a), together with any supporting 
                material;
                    ``(C) the reasons for the cancellation;
                    ``(D) to the maximum extent practicable, 
                the estimated fiscal, economic, and budgetary 
                effect of the cancellation;
                    ``(E) all facts, circumstances and 
                considerations relating to or bearing upon the 
                cancellation, and to the maximum extent 
                practicable, the estimated effect of the 
                cancellation upon the objects, purposes and 
                programs for which the canceled authority was 
                provided; and
                    ``(F) include the adjustments that will be 
                made pursuant to section 1024 to the 
                discretionary spending limits under section 601 
                and an evaluation of the effects of those 
                adjustments upon the sequestration procedures 
                of section 251 of the Balanced Budget and 
                Emergency Deficit Control Act of 1985.
            ``(2) In the case of a cancellation of any dollar 
        amount of discretionary budget authority or item of new 
        direct spending, the special message shall also 
        include, if applicable--
                    ``(A) any account, department, or 
                establishment of the Government for which such 
                budget authority was to have been available for 
                obligation and the specific project or 
                governmental functions involved;
                    ``(B) the specific States and congressional 
                districts, if any, affected by the 
                cancellation; and
                    ``(C) the total number of cancellations 
                imposed during the current session of Congress 
                on States and congressional districts 
                identified in subparagraph (B).
    ``(c) Transmission of Special Messages to House and 
Senate.--
            ``(1) The President shall transmit to the Congress 
        each special message under this part within five 
        calendar days (excluding Sundays) after enactment of 
        the law to which the cancellation applies. Each special 
        message shall be transmitted to the House of 
        Representatives and the Senate on the same calendar 
        day. Such special message shall be delivered to the 
        Clerk of the House of Representatives if the House is 
        not in session, and to the Secretary of the Senate if 
        the Senate is not in session.
            ``(2) Any special message transmitted under this 
        part shall be printed in the first issue of the Federal 
        Register published after such transmittal.


              ``cancellation effective unless disapproved


    ``Sec. 1023. (a) In General.--The cancellation of any 
dollar amount of discretionary budget authority, item of new 
direct spending, or limited tax benefit shall take effect upon 
receipt in the House of Representatives and the Senate of the 
special message notifying the Congress of the cancellation. If 
a disapproval bill for such special message is enacted into 
law, then all cancellations disapproved in that law shall be 
null and void and any such dollar amount of discretionary 
budget authority, item of new direct spending, or limited tax 
benefit shall be effective as of the original date provided in 
the law to which the cancellation applied.
    ``(b) Commensurate Reductions in Discretionary Budget 
Authority.--Upon the cancellation of a dollar amount of 
discretionary budget authority under subsection (a), the total 
appropriation for each relevant account of which that dollar 
amount is a part shall be simultaneously reduced by the dollar 
amount of that cancellation.


                          ``deficit reduction


    ``Sec. 1024. (a) In General.--
            ``(1) Discretionary budget authority.--OMB shall, 
        for each dollar amount of discretionary budget 
        authority and for each item of new direct spending 
        canceled from an appropriation law under section 
        1021(a)--
                    ``(A) reflect the reduction that results 
                from such cancellation in the estimates 
                required by section 251(a)(7) of the Balanced 
                Budget and Emergency Deficit Control Act of 
                1985 in accordance with that Act, including an 
                estimate of the reduction of the budget 
                authority and the reduction in outlays flowing 
                from such reduction of budget authority for 
                each outyear; and
                    ``(B) include a reduction to the 
                discretionary spending limits for budget 
                authority and outlays in accordance with the 
                Balanced Budget and Emergency Deficit Control 
                Act of 1985 for each applicable fiscal year set 
                forth in section 601(a)(2) by amounts equal to 
                the amounts for each fiscal year estimated 
                pursuant to subparagraph (A).
            ``(2) Direct spending and limited tax benefits.--
        (A) OMB shall, for each item of new direct spending or 
        limited tax benefit canceled from a law under section 
        1021(a), estimate the deficit decrease caused by the 
        cancellation of such item or benefit in that law and 
        include such estimate as a separate entry in the report 
        prepared pursuant to section 252(d) of the Balanced 
        Budget and Emergency Deficit Control Act of 1985.
            ``(B) OMB shall not include any change in the 
        deficit resulting from a cancellation of any item of 
        new direct spending or limited tax benefit, or the 
        enactment of a disapproval bill for any such 
        cancellation, under this part in the estimates and 
        reports required by sections 252(b) and 254 of the 
        Balanced Budget and Emergency Deficit Control Act of 
        1985.
    ``(b) Adjustments to Spending Limits.--After ten calendar 
days (excluding Sundays) after the expiration of the time 
period in section 1025(b)(1) for expedited congressional 
consideration of a disapproval bill for a special message 
containing a cancellation of discretionary budget authority, 
OMB shall make the reduction included in subsection (a)(1)(B) 
as part of the next sequester report required by section 254 of 
the Balanced Budget and Emergency Deficit Control Act of 1985.
    ``(c) Exception.--Subsection (b) shall not apply to a 
cancellation if a disapproval bill or other law that 
disapproves that cancellation is enacted into law prior to 10 
calendar days (excluding Sundays) after the expiration of the 
time period set forth in section 1025(b)(1).
    ``(d) Congressional Budget Office Estimates.--As soon as 
practicable after the President makes a cancellation from a law 
under section 1021(a), the Director of the Congressional Budget 
Office shall provide the Committees on the Budget of the House 
of Representatives and the Senate with an estimate of the 
reduction of the budget authority and the reduction in outlays 
flowing from such reduction of budget authority for each 
outyear.


      ``expedited congressional consideration of disapproval bills


    ``Sec. 1025. (a) Receipt and Referral of Special Message.--
Each special message transmitted under this part shall be 
referred to the Committee on the Budget and the appropriate 
committee or committees of the Senate and the Committee on the 
Budget and the appropriate committee or committees of the House 
of Representatives. Each such message shall be printed as a 
document of the House of Representatives.
    ``(b) Time Period for Expedited Procedures.--
            ``(1) There shall be a congressional review period 
        of 30 calendar days of session, beginning on the first 
        calendar day of session after the date on which the 
        special message is received in the House of 
        Representatives and the Senate, during which the 
        procedures contained in this section shall apply to 
        both Houses of Congress.
            ``(2) In the House of Representatives the 
        procedures set forth in this section shall not apply 
        after the end of the period described in paragraph (1).
            ``(3) If Congress adjourns at the end of a Congress 
        prior to the expiration of the period described in 
        paragraph (1) and a disapproval bill was then pending 
        in either House of Congress or a committee thereof 
        (including a conference committee of the two Houses of 
        Congress), or was pending before the President, a 
        disapproval bill for the same special message may be 
        introduced within the first five calendar days of 
        session of the next Congress and shall be treated as a 
        disapproval bill under this part, and the time period 
        described in paragraph (1) shall commence on the day of 
        introduction of that disapproval bill.
    ``(c) Introduction of Disapproval Bills.--(1) In order for 
a disapproval bill to be considered under the procedures set 
forth in this section, the bill must meet the definition of a 
disapproval bill and must be introduced no later than the fifth 
calendar day of session following the beginning of the period 
described in subsection (b)(1).
    ``(2) In the case of a disapproval bill introduced in the 
House of Representatives, such bill shall include in the first 
blank space referred to in section 1026(6)(C) a list of the 
reference numbers for all cancellations made by the President 
in the special message to which such disapproval bill relates.
    ``(d) Consideration in the House of Representatives.--(1) 
Any committee of the House of Representatives to which a 
disapproval bill is referred shall report it without amendment, 
and with or without recommendation, not later than the seventh 
calendar day of session after the date of its introduction. If 
any committee fails to report the bill within that period, it 
is in order to move that the House discharge the committee from 
further consideration of the bill, except that such a motion 
may not be made after the committee has reported a disapproval 
bill with respect to the same special message. A motion to 
discharge may be made only by a Member favoring the bill (but 
only at a time or place designated by the Speaker in the 
legislative schedule of the day after the calendar day on which 
the Member offering the motion announces to the House his 
intention to do so and the form of the motion). The motion is 
highly privileged. Debate thereon shall be limited to not more 
than one hour, the time to be divided in the House equally 
between a proponent and an opponent. The previous question 
shall be considered as ordered on the motion to its adoption 
without intervening motion. A motion to reconsider the vote by 
which the motion is agreed to or disagreed to shall not be in 
order.
    ``(2) After a disapproval bill is reported or a committee 
has been discharged from further consideration, it is in order 
to move that the House resolve into the Committee of the Whole 
House on the State of the Union for consideration of the bill. 
If reported and the report has been available for at least one 
calendar day, all points of order against the bill and against 
consideration of the bill are waived. If discharged, all points 
of order against the bill and against consideration of the bill 
are waived. The motion is highly privileged. A motion to 
reconsider the vote by which the motion is agreed to or 
disagreed to shall not be in order. During consideration of the 
bill in the Committee of the Whole, the first reading of the 
bill shall be dispensed with. General debate shall proceed, 
shall be confined to the bill, and shall not exceed one hour 
equally divided and controlled by a proponent and an opponent 
of the bill. The bill shall be considered as read for amendment 
under the five-minute rule. Only one motion to rise shall be in 
order, except if offered by the manager. No amendment to the 
bill is in order, except any Member if supported by 49 other 
Members (a quorum being present) may offer an amendment 
striking the reference number or numbers of a cancellation or 
cancellations from the bill. Consideration of the bill for 
amendment shall not exceed one hour excluding time for recorded 
votes and quorum calls. No amendment shall be subject to 
further amendment, except pro forma amendments for the purposes 
of debate only. At the conclusion of the consideration of the 
bill for amendment, the Committee shall rise and report the 
bill to the House with such amendments as may have been 
adopted. The previous question shall be considered as ordered 
on the bill and amendments thereto to final passage without 
intervening motion. A motion to reconsider the vote on passage 
of the bill shall not be in order.
    ``(3) Appeals from decisions of the Chair regarding 
application of the rules of the House of Representatives to the 
procedure relating to a disapproval bill shall be decided 
without debate.
    ``(4) It shall not be in order to consider under this 
subsection more than one disapproval bill for the same special 
message except for consideration of a similar Senate bill 
(unless the House has already rejected a disapproval bill for 
the same special message) or more than one motion to discharge 
described in paragraph (1) with respect to a disapproval bill 
for that special message.
    ``(e) Consideration in the Senate.--
            ``(1) Referral and reporting.--Any disapproval bill 
        introduced in the Senate shall be referred to the 
        appropriate committee or committees. A committee to 
        which a disapproval bill has been referred shall report 
        the bill not later than the seventh day of session 
        following the date of introduction of that bill. If any 
        committee fails to report the bill within that period, 
        that committee shall be automatically discharged from 
        further consideration of the bill and the bill shall be 
        placed on the Calendar.
            ``(2) Disapproval bill from house.--When the Senate 
        receives from the House of Representatives a 
        disapproval bill, such bill shall not be referred to 
        committee and shall be placed on the Calendar.
            ``(3) Consideration of single disapproval bill.--
        After the Senate has proceeded to the consideration of 
        a disapproval bill for a special message, then no other 
        disapproval bill originating in that same House 
        relating to that same message shall be subject to the 
        procedures set forth in this subsection.
            ``(4) Amendments.--
                    ``(A) Amendments in order.--The only 
                amendments in order to a disapproval bill are--
                            ``(i) an amendment that strikes the 
                        reference number of a cancellation from 
                        the disapproval bill; and
                            ``(ii) an amendment that only 
                        inserts the reference number of a 
                        cancellation included in the special 
                        message to which the disapproval bill 
                        relates that is not already contained 
                        in such bill.
                    ``(B) Waiver or appeal.--An affirmative 
                vote of three-fifths of the Senators, duly 
                chosen and sworn, shall be required in the 
                Senate--
                            ``(i) to waive or suspend this 
                        paragraph; or
                            ``(ii) to sustain an appeal of the 
                        ruling of the Chair on a point of order 
                        raised under this paragraph.
            ``(5) Motion nondebatable.--A motion to proceed to 
        consideration of a disapproval bill under this 
        subsection shall not be debatable. It shall not be in 
        order to move to reconsider the vote by which the 
        motion to proceed was adopted or rejected, although 
        subsequent motions to proceed may be made under this 
        paragraph.
            ``(6) Limit on consideration.-- (A) After no more 
        than 10 hours of consideration of a disapproval bill, 
        the Senate shall proceed, without intervening action or 
        debate (except as permitted under paragraph (9)), to 
        vote on the final disposition thereof to the exclusion 
        of all amendments not then pending and to the exclusion 
        of all motions, except a motion to reconsider or to 
        table.
            ``(B) A single motion to extend the time for 
        consideration under subparagraph (A) for no more than 
        an additional five hours is in order prior to the 
        expiration of such time and shall be decided without 
        debate.
            ``(C) The time for debate on the disapproval bill 
        shall be equally divided between the Majority Leader 
        and the Minority Leader or their designees.
            ``(7) Debate on amendments.--Debate on any 
        amendment to a disapproval bill shall be limited to one 
        hour, equally divided and controlled by the Senator 
        proposing the amendment and the majority manager, 
        unless the majority manager is in favor of the 
        amendment, in which case the minority manager shall be 
        in control of the time in opposition.
            ``(8) No motion to recommit.--A motion to recommit 
        a disapproval bill shall not be in order.
            ``(9) Disposition of senate disapproval bill.--If 
        the Senate has read for the third time a disapproval 
        bill that originated in the Senate, then it shall be in 
        order at any time thereafter to move to proceed to the 
        consideration of a disapproval bill for the same 
        special message received from the House of 
        Representatives and placed on the Calendar pursuant to 
        paragraph (2), strike all after the enacting clause, 
        substitute the text of the Senate disapproval bill, 
        agree to the Senate amendment, and vote on final 
        disposition of the House disapproval bill, all without 
        any intervening action or debate.
            ``(10) Consideration of house message.--
        Consideration in the Senate of all motions, amendments, 
        or appeals necessary to dispose of a message from the 
        House of Representatives on a disapproval bill shall be 
        limited to not more than four hours. Debate on each 
        motion or amendment shall be limited to 30 minutes. 
        Debate on any appeal or point of order that is 
        submitted in connection with the disposition of the 
        House message shall be limited to 20 minutes. Any time 
        for debate shall be equally divided and controlled by 
        the proponent and the majority manager, unless the 
        majority manager is a proponent of the motion, 
        amendment, appeal, or point of order, in which case the 
        minority manager shall be in control of the time in 
        opposition.
    ``(f) Consideration in Conference.--
            ``(1) Convening of conference.--In the case of 
        disagreement between the two Houses of Congress with 
        respect to a disapproval bill passed by both Houses, 
        conferees should be promptly appointed and a conference 
        promptly convened, if necessary.
            ``(2) House consideration.--(A) Notwithstanding any 
        other rule of the House of Representatives, it shall be 
        in order to consider the report of a committee of 
        conference relating to a disapproval bill provided such 
        report has been available for one calendar day 
        (excluding Saturdays, Sundays, or legal holidays, 
        unless the House is in session on such a day) and the 
        accompanying statement shall have been filed in the 
        House.
            ``(B) Debate in the House of Representatives on the 
        conference report and any amendments in disagreement on 
        any disapproval bill shall each be limited to not more 
        than one hour equally divided and controlled by a 
        proponent and an opponent. A motion to further limit 
        debate is not debatable. A motion to recommit the 
        conference report is not in order, and it is not in 
        order to move to reconsider the vote by which the 
        conference report is agreed to or disagreed to.
            ``(3) Senate consideration.--Consideration in the 
        Senate of the conference report and any amendments in 
        disagreement on a disapproval bill shall be limited to 
        not more than four hours equally divided and controlled 
        by the Majority Leader and the Minority Leader or their 
        designees. A motion to recommit the conference report 
        is not in order.
            ``(4) Limits on scope.--(A) When a disagreement to 
        an amendment in the nature of a substitute has been 
        referred to a conference, the conferees shall report 
        those cancellations that were included in both the bill 
        and the amendment, and may report a cancellation 
        included in either the bill or the amendment, but shall 
        not include any other matter.
            ``(B) When a disagreement on an amendment or 
        amendments of one House to the disapproval bill of the 
        other House has been referred to a committee of 
        conference, the conferees shall report those 
        cancellations upon which both Houses agree and may 
        report any or all of those cancellations upon which 
        there is disagreement, but shall not include any other 
        matter.


                             ``definitions


    ``Sec. 1026. As used in this part:
            ``(1) Appropriation law.--The term `appropriation 
        law' means an Act referred to in section 105 of title 
        1, United States Code, including any general or special 
        appropriation Act, or any Act making supplemental, 
        deficiency, or continuing appropriations, that has been 
        signed into law pursuant to Article I, section 7, of 
        the Constitution of the United States.
            ``(2) Calendar day.--The term `calendar day' means 
        a standard 24-hour period beginning at midnight.
            ``(3) Calendar days of session.--The term `calendar 
        days of session' shall mean only those days on which 
        both Houses of Congress are in session.
            ``(4) Cancel.--The term `cancel' or `cancellation' 
        means--
                    ``(A) with respect to any dollar amount of 
                discretionary budget authority, to rescind;
                    ``(B) with respect to any item of new 
                direct spending--
                            ``(i) that is budget authority 
                        provided by law (other than an 
                        appropriation law), to prevent such 
                        budget authority from having legal 
                        force or effect;
                            ``(ii) that is entitlement 
                        authority, to prevent the specific 
                        legal obligation of the United States 
                        from having legal force or effect; or
                            ``(iii) through the food stamp 
                        program, to prevent the specific 
                        provision of law that results in an 
                        increase in budget authority or outlays 
                        for that program from having legal 
                        force or effect; and
                    ``(C) with respect to a limited tax 
                benefit, to prevent the specific provision of 
                law that provides such benefit from having 
                legal force or effect.
            ``(5) Direct spending.--The term `direct spending' 
        means--
                    ``(A) budget authority provided by law 
                (other than an appropriation law);
                    ``(B) entitlement authority; and
                    ``(C) the food stamp program.
            ``(6) Disapproval bill.--The term `disapproval 
        bill' means a bill or joint resolution which only 
        disapproves one or more cancellations of dollar amounts 
        of discretionary budget authority, items of new direct 
        spending, or limited tax benefits in a special message 
        transmitted by the President under this part and--
                    ``(A) the title of which is as follows: `A 
                bill disapproving the cancellations transmitted 
                by the President on ________', the blank space 
                being filled in with the date of transmission 
                of the relevant special message and the public 
                law number to which the message relates;
                    ``(B) which does not have a preamble; and
                    ``(C) which provides only the following 
                after the enacting clause: `That Congress 
                disapproves of cancellations ________', the 
                blank space being filled in with a list by 
                reference number of one or more cancellations 
                contained in the President's special message, 
                `as transmitted by the President in a special 
                message on ________', the blank space being 
                filled in with the appropriate date, `regarding 
                ________.', the blank space being filled in 
                with the public law number to which the special 
                message relates.
            ``(7) Dollar amount of discretionary budget 
        authority.--(A) Except as provided in subparagraph (B), 
        the term `dollar amount of discretionary budget 
        authority' means the entire dollar amount of budget 
        authority--
                    ``(i) specified in an appropriation law, or 
                the entire dollar amount of budget authority 
                required to be allocated by a specific proviso 
                in an appropriation law for which a specific 
                dollar figure was not included;
                    ``(ii) represented separately in any table, 
                chart, or explanatory text included in the 
                statement of managers or the governing 
                committee report accompanying such law;
                    ``(iii) required to be allocated for a 
                specific program, project, or activity in a law 
                (other than an appropriation law) that mandates 
                the expenditure of budget authority from 
                accounts, programs, projects, or activities for 
                which budget authority is provided in an 
                appropriation law;
                    ``(iv) represented by the product of the 
                estimated procurement cost and the total 
                quantity of items specified in an appropriation 
                law or included in the statement of managers or 
                the governing committee report accompanying 
                such law; and
                    ``(v) represented by the product of the 
                estimated procurement cost and the total 
                quantity of items required to be provided in a 
                law (other than an appropriation law) that 
                mandates the expenditure of budget authority 
                from accounts, programs, projects, or 
                activities for which budget authority is 
                provided in an appropriation law.
            ``(B) The term `dollar amount of discretionary 
        budget authority' does not include--
                    ``(i) direct spending;
                    ``(ii) budget authority in an appropriation 
                law which funds direct spending provided for in 
                other law;
                    ``(iii) any existing budget authority 
                rescinded or canceled in an appropriation law; 
                or
                    ``(iv) any restriction, condition, or 
                limitation in an appropriation law or the 
                accompanying statement of managers or committee 
                reports on the expenditure of budget authority 
                for an account, program, project, or activity, 
                or on activities involving such expenditure.
            ``(8) Item of new direct spending.--The term `item 
        of new direct spending' means any specific provision of 
        law that is estimated to result in an increase in 
        budget authority or outlays for direct spending 
        relative to the most recent levels calculated pursuant 
        to section 257 of the Balanced Budget and Emergency 
        Deficit Control Act of 1985.
            ``(9) Limited tax benefit.--(A) The term `limited 
        tax benefit' means--
                    ``(i) any revenue-losing provision which 
                provides a Federal tax deduction, credit, 
                exclusion, or preference to 100 or fewer 
                beneficiaries under the Internal Revenue Code 
                of 1986 in any fiscal year for which the 
                provision is in effect; and
                    ``(ii) any Federal tax provision which 
                provides temporary or permanent transitional 
                relief for 10 or fewer beneficiaries in any 
                fiscal year from a change to the Internal 
                Revenue Code of 1986.
            ``(B) A provision shall not be treated as described 
        in subparagraph (A)(i) if the effect of that provision 
        is that--
                    ``(i) all persons in the same industry or 
                engaged in the same type of activity receive 
                the same treatment;
                    ``(ii) all persons owning the same type of 
                property, or issuing the same type of 
                investment, receive the same treatment; or
                    ``(iii) any difference in the treatment of 
                persons is based solely on--
                            ``(I) in the case of businesses and 
                        associations, the size or form of the 
                        business or association involved;
                            ``(II) in the case of individuals, 
                        general demographic conditions, such as 
                        income, marital status, number of 
                        dependents, or tax return filing 
                        status;
                            ``(III) the amount involved; or
                            ``(IV) a generally-available 
                        election under the Internal Revenue 
                        Code of 1986.
            ``(C) A provision shall not be treated as described 
        in subparagraph (A)(ii) if--
                    ``(i) it provides for the retention of 
                prior law with respect to all binding contracts 
                or other legally enforceable obligations in 
                existence on a date contemporaneous with 
                congressional action specifying such date; or
                    ``(ii) it is a technical correction to 
                previously enacted legislation that is 
                estimated to have no revenue effect.
            ``(D) For purposes of subparagraph (A)--
                    ``(i) all businesses and associations which 
                are related within the meaning of sections 
                707(b) and 1563(a) of the Internal Revenue Code 
                of 1986 shall be treated as a single 
                beneficiary;
                    ``(ii) all qualified plans of an employer 
                shall be treated as a single beneficiary;
                    ``(iii) all holders of the same bond issue 
                shall be treated as a single beneficiary; and
                    ``(iv) if a corporation, partnership, 
                association, trust or estate is the beneficiary 
                of a provision, the shareholders of the 
                corporation, the partners of the partnership, 
                the members of the association, or the 
                beneficiaries of the trust or estate shall not 
                also be treated as beneficiaries of such 
                provision.
            ``(E) For purposes of this paragraph, the term 
        `revenue-losing provision' means any provision which 
        results in a reduction in Federal tax revenues for any 
        one of the two following periods--
                    ``(i) the first fiscal year for which the 
                provision is effective; or
                    ``(ii) the period of the 5 fiscal years 
                beginning with the first fiscal year for which 
                the provision is effective.
            ``(F) The terms used in this paragraph shall have 
        the same meaning as those terms have generally in the 
        Internal Revenue Code of 1986, unless otherwise 
        expressly provided.
            ``(10) OMB.--The term `OMB' means the Director of 
        the Office of Management and Budget.


                ``identification of limited tax benefits


    ``Sec. 1027. (a) Statement by Joint Tax Committee.--The 
Joint Committee on Taxation shall review any revenue or 
reconciliation bill or joint resolution which includes any 
amendment to the Internal Revenue Code of 1986 that is being 
prepared for filing by a committee of conference of the two 
Houses, and shall identify whether such bill or joint 
resolution contains any limited tax benefits. The Joint 
Committee on Taxation shall provide to the committee of 
conference a statement identifying any such limited tax 
benefits or declaring that the bill or joint resolution does 
not contain any limited tax benefits. Any such statement shall 
be made available to any Member of Congress by the Joint 
Committee on Taxation immediately upon request.
    ``(b) Statement Included in Legislation.--(1) 
Notwithstanding any other rule of the House of Representatives 
or any rule or precedent of the Senate, any revenue or 
reconciliation bill or joint resolution which includes any 
amendment to the Internal Revenue Code of 1986 reported by a 
committee of conference of the two Houses may include, as a 
separate section of such bill or joint resolution, the 
information contained in the statement of the Joint Committee 
on Taxation, but only in the manner set forth in paragraph (2).
    ``(2) The separate section permitted under paragraph (1) 
shall read as follows: `Section 1021(a)(3) of the Congressional 
Budget and Impoundment Control Act of 1974 shall ________ apply 
to ____________.', with the blank spaces being filled in with--
            ``(A) in any case in which the Joint Committee on 
        Taxation identifies limited tax benefits in the 
        statement required under subsection (a), the word 
        `only' in the first blank space and a list of all of 
        the specific provisions of the bill or joint resolution 
        identified by the Joint Committee on Taxation in such 
        statement in the second blank space; or
            ``(B) in any case in which the Joint Committee on 
        Taxation declares that there are no limited tax 
        benefits in the statement required under subsection 
        (a), the word `not' in the first blank space and the 
        phrase `any provision of this Act' in the second blank 
        space.
    ``(c) President's Authority.--If any revenue or 
reconciliation bill or joint resolution is signed into law 
pursuant to Article I, section 7, of the Constitution of the 
United States--
            ``(1) with a separate section described in 
        subsection (b)(2), then the President may use the 
        authority granted in section 1021(a)(3) only to cancel 
        any limited tax benefit in that law, if any, identified 
        in such separate section; or
            ``(2) without a separate section described in 
        subsection (b)(2), then the President may use the 
        authority granted in section 1021(a)(3) to cancel any 
        limited tax benefit in that law that meets the 
        definition in section 1026.
    ``(d) Congressional Identifications of Limited Tax 
Benefits.--There shall be no judicial review of the 
congressional identification under subsections (a) and (b) of a 
limited tax benefit in a conference report.''.

SEC. 3. JUDICIAL REVIEW.

    (a) Expedited Review.--
            (1) Any Member of Congress or any individual 
        adversely affected by part C of title X of the 
        Congressional Budget and Impoundment Control Act of 
        1974 may bring an action, in the United States District 
        Court for the District of Columbia, for declaratory 
        judgment and injunctive relief on the ground that any 
        provision of this part violates the Constitution.
            (2) A copy of any complaint in an action brought 
        under paragraph (1) shall be promptly delivered to the 
        Secretary of the Senate and the Clerk of the House of 
        Representatives, and each House of Congress shall have 
        the right to intervene in such action.
            (3) Nothing in this section or in any other law 
        shall infringe upon the right of the House of 
        Representatives to intervene in an action brought under 
        paragraph (1) without the necessity of adopting a 
        resolution to authorize such intervention.
    (b) Appeal to Supreme Court.--Notwithstanding any other 
provision of law, any order of the United States District Court 
for the District of Columbia which is issued pursuant to an 
action brought under paragraph (1) of subsection (a) shall be 
reviewable by appeal directly to the Supreme Court of the 
United States. Any such appeal shall be taken by a notice of 
appeal filed within 10 calendar days after such order is 
entered; and the jurisdictional statement shall be filed within 
30 calendar days after such order is entered. No stay of an 
order issued pursuant to an action brought under paragraph (1) 
of subsection (a) shall be issued by a single Justice of the 
Supreme Court.
    (c) Expedited Consideration.--It shall be the duty of the 
District Court for the District of Columbia and the Supreme 
Court of the United States to advance on the docket and to 
expedite to the greatest possible extent the disposition of any 
matter brought under subsection (a).

SEC. 4. CONFORMING AMENDMENTS.

    (a) Short Titles.--Section 1(a) of the Congressional Budget 
and Impoundment Control Act of 1974 is amended by--
            (1) striking ``and'' before ``title X'' and 
        inserting a period;
            (2) inserting ``Parts A and B of'' before ``title 
        X''; and
            (3) inserting at the end the following new 
        sentence: ``Part C of title X may be cited as the `Line 
        Item Veto Act of 1996'.''.
    (b) Table of Contents.--The table of contents set forth in 
section 1(b) of the Congressional Budget and Impoundment 
Control Act of 1974 is amended by adding at the end the 
following:

                        ``Part C--Line Item Veto

``Sec. 1021. Line item veto authority.
``Sec. 1022. Special messages.
``Sec. 1023. Cancellation effective unless disapproved.
``Sec. 1024. Deficit reduction.
``Sec. 1025. Expedited congressional consideration of disapproval bills.
``Sec. 1026. Definitions.
``Sec. 1027. Identification of limited tax benefits.''.

    (c) Exercise of Rulemaking Powers.--Section 904(a) of the 
Congressional Budget Act of 1974 is amended by striking ``and 
1017'' and inserting ``, 1017, 1025, and 1027''.

SEC. 5. EFFECTIVE DATES.

    This Act and the amendments made by it shall take effect 
and apply to measures enacted on the earlier of--
            (1) the day after the enactment into law, pursuant 
        to Article I, section 7, of the Constitution of the 
        United States, of an Act entitled ``An Act to provide 
        for a seven-year plan for deficit reduction and achieve 
        a balanced Federal budget.''; or
            (2) January 1, 1997;

and shall have no force or effect on or after January 1, 2005.
      And the House agree to the same.
      That the Senate recede from its disagreement to the 
amendment of the House to the title of the bill and agree to 
the same with an amendment as follows:
      In lieu of the matter proposed to be inserted by the 
House amendment to the title of the bill, insert the following: 
``An Act to give the President line item veto authority with 
respect to appropriations, new direct spending, and limited tax 
benefits.''.
      And the House agree to the same.

                                   Bill Clinger,
                                   Gerald Solomon,
                                   Jim Bunning,
                                   Porter Goss,
                                   Peter Blute,
                                 Managers on the Part of the House.

                                   Ted Stevens,
                                   Bill Roth,
                                   Fred Thompson,
                                   Thad Cochran,
                                   John McCain,
                                   Pete V. Domenici,
                                   Chuck Grassley,
                                   Don Nickles,
                                   Phil Gramm,
                                   Dan Coats,
                                   Jim Exon,
                                Managers on the Part of the Senate.

       JOINT EXPLANATORY STATEMENT OF THE COMMITTEE OF CONFERENCE

      The managers on the part of the House and the Senate at 
the conference on the disagreeing votes of the two Houses on 
the amendments of the House to the bill (S. 4) to grant the 
power to the President to reduce budget authority, submit the 
following joint statement to the House and Senate in 
explanation of the effect of the action agreed upon by the 
managers and recommended in the accompanying conference report:
      The House amendment to the text of the bill struck all of 
the Senate bill after the enacting clause and inserted a 
substitute text.
      The Senate recedes from its disagreement to the amendment 
of the House with an amendment that is a substitute for the 
Senate bill and the House amendment. The differences between 
the Senate bill, the House amendment, and the substitute agreed 
to in conference are noted below, except for clerical 
corrections, conforming changes made necessary by agreements 
reached by the conferees, and minor drafting and clerical 
changes.

                background and need for the legislation

      The American people consistently cite run-away federal 
spending and a rising national debt as among the top issues of 
national concern. Over the past fifteen years alone, the 
national debt of the United States has quintupled. From 1789 
through 1981, our total national debt amounted to $1 trillion. 
Yet today, just fifteen years later, that debt exceeds $5 
trillion, and without significant reforms an additional $1 
trillion will be added over the next four years. This 
astonishing growth in federal debt has fueled public support 
for measures to ensure greater fiscal accountability in 
Washington. This legislation, along with other measures to 
balance the federal budget considered in the 104th Congress, 
moves to meet that demand by enhancing the President's ability 
to eliminate wasteful federal spending and to cancel special 
tax breaks.
      No one would contend that a line item veto on its own 
will be enough to restrain spending and bring the federal 
budget into balance. However, a January 1992 GAO report 
indicates that this type of fiscal discipline could have a 
significant impact upon federal spending, concluding that if 
Presidents had applied this authority to all matters objected 
to in Statements of Administration Policy on spending bills in 
the fiscal years 1984 through 1989, spending could have been 
reduced by a six-year total of about $70 billion.
      The conference report on S. 4, the Line Item Veto Act, 
delegates limited authority to the President to cancel new 
spending and limited tax benefits. This authority is in 
addition to the President's existing authority under the 
Impoundment Control Act of 1974 (title X of the Congressional 
Budget Act). The Impoundment Control Act permits the President 
to submit proposed rescissions of discretionary budget 
authority to Congress, but prohibits those rescissions from 
taking effect without congressional approval. In addition to 
applying solely to appropriation laws, the statutory provisions 
of the Impoundment Control Act have proven too restrictive. 
While Congress has initiated and passed rescissions on its own, 
Congress has agreed to only $23.7 billion of $74 billion in 
rescissions proposed by Presidents (both Democrat and 
Republican) since enactment of title X in 1974.

                                purpose

      The purpose of the conference report is to promote 
savings by placing the onus on Congress to overturn the 
President's cancellations of spending and limited tax benefits. 
In addition, recognizing that discretionary spending represents 
only about one-third of the entire federal budget, the 
conference report expands the President's current rescission 
authority to include both new direct spending and limited tax 
benefits.
      Under the conference report, the President may cancel any 
dollar amount of discretionary budget authority in an 
appropriation law or its accompanying reports, or may cancel 
any item of new direct spending or limited tax benefit from an 
authorization or revenue act. After notifying Congress of his 
cancellations in a special message, the Congress is given a 
specified period for expedited review of the President's 
proposal.
      If Congress fails to enact disapproving legislation 
within the period for expedited consideration, the savings are 
set aside for deficit reduction through a lockbox mechanism.

                       summary of the senate bill

      The Senate bill was introduced by Senator Dole on 
Wednesday, January 4, 1995. On March 20, 1995, the Senate began 
consideration. During consideration in the Senate, Senator Dole 
(for himself, and Senators McCain, Coats and Domenici) offered 
an amendment in the form of a substitute.
      The Senate bill gives the President line item veto 
authority by dis-aggregating certain types of bills under a 
procedure known as ``separate enrollment.'' Separate enrollment 
requires that the enrolling clerks of the House and Senate 
separately enroll each item of spending in an appropriation 
bill and each item of new direct spending or any targeted tax 
benefit contained in an authorizing bill. Each of these 
individual bills is presented to the President. The President 
may exercise his Article I power to veto any one, or all, of 
the individual bills. The Congress may exercise its 
Constitutional prerogative to override the President's 
veto(es).
      According to the Senate bill, the House and Senate 
Appropriations Committees report appropriation measures 
following current procedure except that any appropriation bill 
reported by the Committee must contain the same level of detail 
as is provided in the Committee report that accompanies the 
bill. This requirement ensures that appropriation bills do not 
contain large dollar lump sums with the details directing how 
the money should be expended noted only in the Committee 
report.
      An authorization bill that contains an item of new direct 
spending or a targeted tax benefit that is brought to the floor 
must contain such provision in a separate section and must 
identify the item of new direct spending or the targeted tax 
benefit in the report that accompanies the bill.
      Any appropriation or authorization bill that fails to 
comply with the above requirements is subject to a point of 
order that may only be waived by a three-fifths vote of the 
House or Senate.
      Upon passage of an appropriation or authorization bill, 
the enrolling clerk of the originating House is required to 
enroll each item contained in the legislation separately. After 
all the items are enrolled as separate bills, both the House 
and Senate vote on all the bills en bloc prior to their 
submittal to the President.
      The provisions of the bill become effective on the date 
of enactment and sunset in five years.
      As defined in the bill, an item in an appropriation bill 
is:
            (1) any numbered section;
            (2) any unnumbered paragraph; or
            (3) any allocation or suballocation contained in a 
        numbered section or an unnumbered paragraph made to 
        conform to the level of detail in the accompanying 
        report.
      The following items are not required to be separately 
enrolled:
            (1) provisions that do not appropriate funds;
            (2) provisions that do not direct the expenditures 
        of funds for a specific project; and
            (3) provisions that create an express or implied 
        obligation to expend funds and
                    (a) rescind budget authority;
                    (b) limit, condition or otherwise restrict 
                the expenditure of budget authority; or
                    (c) place a condition on the expenditure of 
                budget authority by explicitly prohibiting the 
                use of the funds.
      By not separately enrolling the items just noted, 
language that places restrictions or conditions on the 
expenditure of funds, also known as fencing language, may not 
be separately vetoed apart from some dollar amount.
      An item in an authorization bill is (1) any numbered 
section, or (2) any unnumbered paragraph that provides new 
direct spending or a new targeted tax benefit.
      A targeted tax benefit is any provision that (1) the 
Joint Committee on Taxation estimates would lose revenue in the 
first fiscal year and over the five fiscal years covered by the 
budget resolution, and (2) provides more favorable treatment to 
a taxpayer or a targeted group of taxpayers when compared to a 
similarly situation taxpayer or group of taxpayers.
      The Senate bill contains a ``lockbox'' provision, a 
prohibition on emergency spending bills containing non-
emergency spending items, and a sunset of all tax provisions at 
least every 10 years.
      Finally, the Senate bill contains provisions allowing a 
Member of Congress to challenge the constitutionality of the 
bill under expedited procedures and a severability clause 
stating that if any one provision of the Act is found to be 
unconstitutional, the remainder of the Act will be held 
harmless.

                     summary of the house amendment

      The House amendment is based on the ``enhanced 
rescission'' format. It authorizes the President to rescind all 
or part of any discretionary budget authority or veto any 
targeted tax benefit if the President determines that such 
rescission; (1) will help reduce the federal budget deficit; 
(2) will not impair any essential government functions; and (3) 
will not harm the national interest.
      The amendment requires the President to notify the 
Congress of such a rescission or veto by special message within 
10 days (excluding Sundays) after enactment of an appropriation 
Act providing such budget authority or a revenue or 
reconciliation Act containing a targeted tax benefit.
      The amendment allows the President in each special 
message to propose to reduce the appropriate discretionary 
spending limit by an amount that does not exceed the total 
amount of discretionary budget authority rescinded by that 
message. It also requires the President to submit a separate 
special message for each appropriation Act and for each revenue 
or reconciliation Act. The President may only transmit one 
special message for each Act.
      The House amendment makes such a rescission effective 
unless the Congress enacts a disapproval bill. Any budget 
authority rescinded is no longer available for obligation and a 
tax benefit is not effective unless the Congress passes a 
disapproval bill within 20 days, and assuming a veto, overrides 
that veto within 5 days.
      The House amendment provides special procedures for 
consideration of a rescission disapproval bill in each House.
      Upon receipt of the President's special message, if a 
disapproval bill is introduced, it is referred to the 
appropriate committee. The specific form of a disapproval bill 
is noted in the House amendment, and such disapproval bill must 
be introduced within 3 days in order to qualify for the special 
procedures in the House. The Senate committee is not required 
to report the bill and there is no provision mandating 
discharge.
      The House committee to which the bill is referred shall 
report it without amendment, and with or without 
recommendation, no later than the eighth calendar day of 
session after the date of its introduction. If the Committee 
fails to report the bill, it is in order to move that the House 
discharge the bill from committee.
      After a bill is discharged from Committee, it is in order 
to move that the House move to consideration of the bill. All 
points of order against the bill and its consideration are 
waived and the motion is highly privileged. Motions to 
reconsider the vote by which the motion is agreed to or 
disagreed to are not in order.
      Consideration of the bill is limited to two hours equally 
divided between proponents and opponents of the bill. 
Amendments to the bill are not in order, except that a Member 
may make a motion to strike the disapproval of any 
rescission(s) of budget authority if such a motion is supported 
by at least 49 other Members. Motions to reconsider the vote on 
the disapproval bill are not in order. It is only in order in 
the House to consider one disapproval bill with respect to any 
specific Presidential rescission message.
      If a rescission disapproval bill is considered by the 
Senate, debate is limited to 10 hours to be divided equally and 
controlled by the Majority and Minority leaders. Debate on any 
motions or appeals in connection with the bill are limited to 
one hour each, divided equally. Motions to further limit debate 
are not debatable. A motion to recommit is not in order unless 
such motion is to recommit the bill with instructions that it 
be reported back within one day.
      Further, the House amendment mandates that it is not in 
order in the Senate to consider any rescission disapproval bill 
relating to any matter other than the items noted in the 
President's special message. Amendments to a rescission 
disapproval bill are not in order. The provisions noted in this 
paragraph may only be waived by an affirmative vote of three-
fifths of the Senate.
      The House amendment provides for annual General 
Accounting Office (GAO) reports on Presidential use of the line 
item veto authority. It also specifically prohibits the 
President from using the authority under the Act to change 
prohibitions or limitations (fencing language) in an 
appropriation Act.
      The bill generally defines a targeted tax benefit as a 
provision in a revenue or reconciliation Act that provides a 
tax deduction, credit, exclusion, preference, or concession to 
100 or fewer beneficiaries.
      Finally, the bill provides a process for expedited 
judicial review of provisions of this Act.

                          conference agreement

Section 1. Short title
      This bill, when enacted, may be cited as the ``Line Item 
Veto Act.''
Sec. 2. Line item veto authority
      Section 2 of the conference report amends title X of the 
Congressional Budget and Impoundment Control Act of 1974 to add 
a new part C comprising sections 1021 through 1027.
      In general, part C grants the President the authority to 
cancel in whole any dollar amount of discretionary budget 
authority provided in an appropriation law or any item of new 
direct spending or limited tax benefit contained in any law. 
Congress has the authority to delegate to the President the 
ability to cancel specific budgetary obligations in any 
particular law in order to reduce the federal budget deficit.
      The conferees note that while the conference report 
delegates new powers to the President, these powers are 
narrowly defined and provided within specific limits. The 
conference report includes specific definitions, carefully 
delineates the President's cancellation authority, and provides 
specific limits on this cancellation authority. The delegation 
of this cancellation authority is not separable from the 
President's duties to comply with these restrictions. To the 
extent the President broadly applies this new cancellation 
authority or reaches beyond these limits to expand the 
application of this new authority, the President will be 
reaching beyond the delegation of these authorities. Given the 
significance of this delegation, the conference report includes 
a sunset of this authority.
Sec. 1021. Line item veto authority
      Section 1021(a) permits the President to cancel in whole 
any dollar amount of discretionary budget authority, item of 
new direct spending, or limited tax benefit contained in any 
bill or joint resolution that has been signed into law pursuant 
to Article I, section 7, of the Constitution of the United 
States. The cancellation may be made only if the President 
determines such cancellation will reduce the federal budget 
deficit and will not impair any essential government function 
or harm the national interest. In addition the President must 
make any cancellations within five days of the date of 
enactment of the law from which the cancellations are made, and 
must notify the Congress by transmittal of a special message 
within that time.
      The conferees specifically include the requirement that a 
bill or joint resolution must have been signed into law in 
order to clarify that the cancellation authority only becomes 
effective after the President has exercised the constitutional 
authority to enact legislation in its entirety. This 
requirement ensures that the President affirmatively 
demonstrates support for the underlying legislation from which 
specific cancellations are then permitted.
      The term ``cancel'' was specifically chosen, and is 
carefully defined in section 1026. The conferees intend that 
the President may use the cancellation authority to surgically 
terminate federal budget obligations. The cancellation 
authority is specifically limited to any entire dollar amount 
of discretionary budget authority, item of new direct spending, 
or limited tax benefit. The cancellation authority does not 
permit the President to rewrite the underlying law, nor to 
change any provision of that law. The President may only 
terminate the obligation of the Federal Government to spend 
certain sums of money through a specific appropriation or 
mandatory payment, or the obligation to forego the collection 
of revenue otherwise due to the Federal Government in the 
absence of a limited tax benefit.
      Likewise, the terms ``dollar amount of discretionary 
budget authority,'' ``item of new direct spending,'' and 
``limited tax benefit'' have been carefully defined in order to 
make clear that the President may only cancel the entire dollar 
amount, the specific legal obligation to pay, or the specific 
tax benefit. ``Fencing language'' may not be canceled by the 
President under this authority. This means that the President 
cannot use this authority to modify or alter any aspect of the 
underlying law, including any restriction, limitation or 
condition on the expenditure of budget authority, or any other 
requirement of the law.
      The conferees intend that, even once the federal 
obligation to expend a dollar amount or provide a benefit is 
canceled, all other operative provisions of the underlying law 
will remain in effect. If the President desires a broader 
result, then the President must either ask Congress to modify 
the law or exercise the President's constitutional power to 
veto the legislation in its entirety.
      The lockbox provision of the conference report has also 
been included to maintain a system of checks and balances in 
the President's use of the cancellation authority. Any credit 
for money not spent, or for revenue foregone, is dedicated to 
deficit reduction through the operation of the lockbox 
mechanism. This ensures that the President does not simply 
cancel a particular dollar amount of discretionary budget 
authority, item of new direct spending, or limited tax benefit 
in order to increase spending in other areas.
      Section 1021(b) requires the President to consider 
legislative history and information referenced in law in 
identifying cancellations. It also requires that the President 
use the definitions in section 1026, and provides that the 
President use any sources specified in the law or the best 
available information.
      Section 1021(c) states that the President's cancellation 
authority shall not apply to a disapproval bill, as defined in 
section 1026. The provision is intended to prevent an endless 
loop of cancellations.
Sec. 1022. Special messages
      Section 1022 provides that, if the President cancels 
provisions within a law, a special message must be submitted to 
Congress. A separate special message must be submitted for each 
law from which a cancellation is made.
      Similar to the requirements in section 1012 of the 
Impoundment Control Act of 1974, the conference report requires 
that the President's special message include relevant 
supporting material about each cancellation and its budgetary 
impact. The conferees intend this requirement to ensure that 
the Congress and the public receive sufficient information with 
which to judge the President's action.
      Specifically, the President's special message must 
include:
            (1) the dollar amount of discretionary budget 
        authority, items of new direct spending or limited tax 
        benefits which have been canceled;
            (2) corresponding reference numbers of each 
        cancellation;
            (3) the determinations required under section 1021 
        and any supporting material;
            (4) the reasons for each cancellation;
            (5) the estimated fiscal, economic and budgetary 
        effect of each cancellation (to the maximum extent 
        practicable);
            (6) all facts, circumstances and considerations 
        relating to each cancellation;
            (7) the estimated effect of each cancellation upon 
        the objects, purposes and programs for which the 
        canceled authority was provided (to the maximum extent 
        practicable); and
            (8) the adjustments that will be made pursuant to 
        section 1024 (``Deficit Reduction'') to the 
        discretionary spending limits under section 601 of the 
        Budget Act and an evaluation of the effects of those 
        adjustments upon sequestration procedures.
      The President's special message must specify any account, 
department or establishment of the government and any specific 
project or governmental functions impacted by each 
cancellation.
      The conference report requires that, if applicable, the 
special message include the specific states and congressional 
districts impacted and the total number of cancellations 
imposed during the current session of Congress on those states 
and congressional districts. This is to ensure that the 
Congress has information to determine if there is a 
disproportionate impact on a particular state or congressional 
district.
      The President's special message must be transmitted to 
the House of Representatives and to the Senate within five 
calendar days (excluding Sundays) of enactment (by the 
President's signature) of the law to which any cancellations 
apply. It is the intention of the conferees that the 
President's cancellations be made as soon as possible after the 
enactment of the law. The maximum time of five calendar days is 
provided to ensure that all supporting material required for 
inclusion in the special message can be provided by the 
Administration. It is the view of the conferees that additional 
time (beyond five calendar days) would unnecessarily prolong 
the process.
      The special message must be transmitted to both Houses of 
Congress on the same day, and must be received by the Clerk of 
the House and to the Secretary of the Senate if either House is 
not in session on that day.
      Any special message must be printed in the first issue of 
the Federal Register published after the transmittal.
Sec. 1023. Cancellation effective unless disapproved
      Upon receipt of the President's special message in both 
the House of Representatives and the Senate, each dollar amount 
of discretionary budget authority, item of new direct spending, 
or limited tax benefit identified in the special message is 
immediately canceled. The cancellation of a dollar amount of 
discretionary budget authority automatically rescinds the 
funds. With respect to an item of new direct spending or a 
limited tax benefit, the cancellation renders the provision 
void, such that the obligation of the United States has no 
legal force or effect.
      The cancellation of a dollar amount of discretionary 
budget authority, an item of new direct spending, or a limited 
tax benefit is nullified only if a disapproval bill is enacted 
into law. The conferees intend that, if a disapproval bill is 
enacted, the President shall expend the funds or implement a 
provision as originally directed by Congress. The effective 
date for any cancellation disapproved in a disapproval bill is 
the original date provided in the law to which the cancellation 
applied.
      Section 1023(b) provides that, when a dollar amount of 
discretionary budget authority canceled by the President is 
part of a larger sum in an appropriation law, such cancellation 
will result in the commensurate reduction of each relevant 
appropriation account by that dollar amount. These reductions 
are a necessary conforming change to ensure that all sums 
required to be spent by the appropriation law accurately 
reflect the cancellation contained in the President's message. 
This is a technical mechanism to maintain mathematical 
consistency and does not grant the President any additional 
authority.
      To illustrate the mechanism for commensurate reductions 
in discretionary budget authority the conferees provide the 
following example:

            The FY '96 Agriculture Appropriations Act (Public 
        Law 104-37) appropriates a total of $421,929,000 for 
        agricultural research and education, of which 
        $49,846,000 is made available for special grants for 
        agriculture research. The conference report 
        accompanying this law contains a table that allocates 
        the $49,846,000 total into lesser dollar amounts all of 
        which correspond to individual research programs. This 
        table includes, for example, a $3,758,000 allocation 
        for: ``Wood Utilization Research (OR, MS, NC, MN, ME, 
        MI)''.
            Assuming the President exercised the authority to 
        cancel this $3,758,000, this dollar amount would be 
        automatically subtracted from the $421,929,000 total 
        and from the $49,846,000 earmark. If the $3,758,000 was 
        included in any other larger dollar amount in the 
        appropriation law, then all such other dollar amounts 
        would likewise be simultaneously reduced by $3,758,000.
Sec. 1024. Deficit reduction
      Section 1024 establishes a deficit reduction, or 
``lockbox'', procedure for the cancellations of discretionary 
budget authority, new direct spending, or limited tax benefits. 
The conference report's lockbox procedures are incorporated 
into existing procedures governing discretionary spending 
limits and pay-as-you-go requirements under the Balanced Budget 
and Emergency Deficit Control Act.
      The conference report requires the Office of Management 
and Budget (OMB) to estimate the discretionay budget authority 
and outlay savings that result from cancellations from an 
appropriation law and include those calculations as part of the 
estimate OMB must submit to Congress under section 251 of the 
Balanced Budget and Emergency Deficit Control Act. The 
conference report also requires OMB to calculate a reduction to 
the spending caps that is equal to the budget authority 
reduction and related outlay savings that result from a 
cancellation.
      After the expiration of the time period for congressional 
consideration of a disapproval bill plus 10 days, OMB is 
required to adjust the spending caps downward by the amount of 
budget authority and outlay savings in its next sequester 
report.
      In the case of the cancellation of direct spending or 
limited tax benefits, OMB is required to estimate the deficit 
decrease as a separate entry in its pay-as-you-go report to 
Congress. In order to ensure that the savings from the 
cancellation of new direct spending or limited tax benefits are 
devoted to deficit reduction and are not available to offset a 
deficit increase in another law, the conference report provides 
that the savings from these cancellations shall not be included 
in the pay-as-you-go balances under the Balanced Budget and 
Emergency Deficit Control Act. Similarly, if a disapproval bill 
is enacted that overturns the cancellation of an item of direct 
spending or a limited tax benefit, OMB will not score this 
legislation as increasing the deficit under pay as you go.
      Section 1024 also requires the Congressional Budget 
Office (CBO) to submit its estimate of the savings resulting 
from a cancellation to the Budget Committees of House and 
Senate. This is consistent with existing provisions in the 
Balanced Budget and Emergency Deficit Control Act which require 
CBO estimates and require OMB to make comparisons of its 
estimates with those made by CBO. The conferees expect CBO and 
the Budget Committees to carefully monitor OMB's estimates of 
cancellations.
      The conferees intend that any savings from a cancellation 
be dedicated to deficit reduction and not used as an offset for 
future spending. The conference report is silent on 
congressional enforcement mechanisms because existing scoring 
conventions will have the effect of dedicating any savings from 
these cancellations to deficit reduction. Under existing 
congressional scoring conventions, CBO and the Budget 
Committees only score the budgetary impacts that directly 
result from legislation. The cancellation of an item will 
represent an administrative action and will not be scored as 
savings. Therefore, the savings from a cancellation will not be 
available as an offset for congressional scoring purposes. 
During the period for consideration of a disapproval bill CBO 
should not score the cost associated with a disapproval of a 
cancellation.
      If there is an effort to include in legislation a 
cancellation already made by the President and claim the 
savings from such a cancellation as an offset for a provision 
that increases the deficit, the conferees expect the Budget 
Committees to ensure these savings are not used as an offset.
Sec. 1025. Expedited congressional consideration of disapproval bills
      Section 1025 adopts the House provision with 
modifications providing for expedited procedures to consider 
disapproval bills. The conferees clearly intend this language 
to stand separate and apart from the language currently found 
in part B of title X of the Budget Act with regard to 
consideration of proposed rescissions, reservations, and 
deferrals of budget authority. The language of the conference 
report is directed solely at Congress' ability to respond to 
the cancellation authority of the Executive and is in no way 
intended to impact on or be defined by existing title X 
procedures.
      The conference report provides Congress with 30 calendar 
days of session to consider a disapproval bill under expedited 
procedures. A ``calendar day of session'' is defined as only 
those days during which both Houses of Congress are in session. 
It is assumed Congress would want to act quickly on any 
disapproval bills. This time period is available to provide 
Congress with flexibility to schedule consideration of a 
disapproval bill during a busy legislative session.
      During this time period, a disapproval bill may qualify 
for the expedited procedures in each House. However, upon the 
expiration of this period, a disapproval bill may no longer 
qualify for these expedited procedures in the House of 
Representatives. In the Senate, a disapproval bill which began 
consideration under these expedited procedures may continue 
within such procedures notwithstanding the expiration of the 
time period.
      Upon final Congressional adjournment, if a disapproval 
bill relating to a special message was pending before either 
House of Congress or any committee thereof or was pending 
before the President (i.e. a pocket veto), and the time period 
has not expired, a new disapproval bill with respect to the 
same message may be introduced within the first five calendar 
days of session of the next Congress. This disapproval bill 
qualifies for the expedited procedures outlined above and the 
period for Congressional consideration begins anew.
      A special Presidential message relating to a law could 
include a number of cancellations. In establishing expedited 
procedures for the consideration of a disapproval bill, the 
conference report seeks to find a balance between providing a 
procedure to guarantee that Congress can quickly disapprove the 
President's cancellations while giving Congress the flexibility 
to pick and choose among the cancellations to include in the 
disapproval bill. In both Houses of Congress, quick action is 
encouraged in that only one bill may ultimately be acted upon 
for each special message using these expedited procedures.
      It should be noted that the expedited procedures provide 
strict time limitations at all stages of floor consideration of 
a disapproval bill. The conferees intend to provide both Houses 
of Congress with the means to expeditiously reach a resolution 
and to foreclose any and all delaying tactics (including, but 
clearly not limited to: extraneous amendments, repeated quorum 
calls, motions to recommit, or motions to instruct conferees). 
The conferees believe these expedited procedures provide ample 
time for Congress to consider the President's cancellations and 
work its will upon them.
      Section 1025(a) provides for the receipt and referral of 
the special message in both Houses of Congress. Upon the 
cancellation of a dollar amount of discretionary budget 
authority, an item of direct spending or a limited tax benefit 
under section 1021(a), the President must transmit to Congress 
a special message outlining the cancellation as required by 
section 1022.
      When Congress receives this special message it shall be 
referred to the Budget Committees and the appropriate committee 
or committees in each House. For example, the message 
pertaining to the cancellation of a dollar amount of 
discretionary budget authority from an appropriation law would 
be referred to the Committee on Appropriations of each House. A 
special message pertaining to the cancellation of an item of 
direct spending would be referred to the authorizing committee 
or committees of each House from which the original 
authorization law derived. Any special message relating to more 
than one committee's jurisdiction, i.e. a cancellation message 
from a large omnibus law such as a reconciliation law, shall be 
referred to the appropriate committees in each House. Each 
special message shall be printed as a document of the House of 
Representatives.

               Procedures in the House of Representatives

      In order for a disapproval bill to qualify for the 
expedited procedures in the House of Representatives as 
outlined in section 1025(b), it must meet two requirements. 
First, a disapproval bill must meet the definition of a 
disapproval bill as set forth in section 1026. Second, the 
disapproval bill must be introduced no later than the fifth 
calendar day of session following the receipt of the 
President's special message. Any disapproval bill introduced 
after the fifth calendar day of session is subject to the 
regular rules of the House of Representatives regarding 
consideration of a bill.
      Any disapproval bill introduced in the House of 
Representatives must disapprove all of the cancellations in the 
special message to which the disapproval bill relates. Each 
such disapproval bill must include in the first blank space 
referred to in section 1026(6)(C) a list of the reference 
numbers for all of the cancellations made by the President in 
that special message.
      Any disapproval bill introduced pursuant to 1025(c) shall 
be referred to the appropriate committee or committees. It is 
not the intention of the conferees that a disapproval bill 
pursuant to a special message regarding a reconciliation law be 
referred to the Budget Committee. Any committee or committees 
of the House of Representatives to which such a disapproval 
bill has been referred shall report it without amendment, and 
with or without recommendation, not later than the seventh 
calendar day of session after the date of its introduction.
      If any committee fails to report the disapproval bill 
within that period, it shall be in order for any Member of the 
House to move that the House discharge that committee from 
further consideration of the bill. However, such a motion is 
not in order after the committee has reported a disapproval 
bill with respect to the same special message. This motion 
shall only be made by a Member favoring the bill and shall be 
made one day after the calendar day on which the Member 
offering the motion has announced to the House that Member's 
intention to make such a motion and the form of that motion. 
Furthermore, this motion to discharge shall only be made at a 
time or place designated by the Speaker in the legislative 
schedule of the day after the calendar day on which the Member 
gives the House proper notice.
      This motion to discharge shall be highly privileged. 
Debate on the motion shall be limited to not more than one hour 
and shall be equally divided between a proponent and an 
opponent. After completion of debate, the previous question 
shall be considered as ordered on the motion to its adoption 
without intervening motion. A motion to reconsider the vote by 
which the motion was agreed to or not agreed to shall not be in 
order. It shall not be in order to consider more than one such 
motion to discharge a disapproval bill pertaining to a 
particular special message.
      After a disapproval bill has been reported or a committee 
has been discharged from further consideration, it shall be in 
order to move that the House resolve into the Committee of the 
Whole House on the State of the Union for consideration of the 
disapproval bill. If the bill has been reported, the report on 
the bill must be available for at least one calendar day prior 
to consideration of the bill. All points of order against the 
bill and its consideration, except a point of order pertaining 
to a one-day layover requirement, shall be waived. If the bill 
has been discharged, all points of order against the bill and 
its consideration shall be waived. The motion that the House 
resolve into the Committee of the Whole shall be highly 
privileged. A motion to reconsider the vote by which the motion 
is agreed to or disagreed to shall not be in order.
      During consideration of the bill in the Committee of the 
Whole, the first reading of the bill shall be dispensed with. 
General debate on the disapproval bill shall be confined to the 
bill and shall not exceed one hour equally divided between and 
controlled by a proponent and an opponent of the bill. After 
completion of the one hour of general debate, the bill shall be 
considered as read for amendment under the five minute rule. 
Only one motion that the Committee rise shall be in order 
unless that motion is offered by the manager of the bill.
      No amendment shall be in order, except that any Member, 
if supported by forty-nine other Members (a quorum being 
present), may offer an amendment striking the reference number 
or reference numbers of a cancellation or cancellations from 
the disapproval bill. This process allows Members the 
opportunity to narrow the focus of the disapproval bill, 
striking references to cancellations they do not wish to 
disapprove, while retaining in the disapproval bill references 
to cancellations they wish to overturn. A vote in favor of the 
disapproval bill is a vote to spend the money the President 
sought to cancel. A vote against the disapproval bill is a vote 
to agree with the President to cancel the spending.
      No amendment shall be subject to further amendment, 
except pro forma amendments for the purposes of debate only. 
Consideration of the bill for amendment shall not exceed one 
hour excluding time for recorded votes and quorum calls. At the 
conclusion of consideration of the bill for amendment, the 
Committee shall rise and report the bill to the House with such 
amendments as may have been adopted. The previous question 
shall be considered as ordered on the bill and amendments 
thereto to final passage without any intervening motion. A 
motion to reconsider the vote on passage of the bill shall not 
be in order.
      All appeals of decisions of the Chair relating to the 
application of the rules of the House of Representatives to 
this procedure for consideration of the disapproval bill shall 
be decided without debate.
      It shall be in order to consider only one disapproval 
bill pertaining to each special message under these expedited 
messages except for consideration of a similar Senate bill. 
However, if the House has already rejected a disapproval bill 
with respect to the same special message as that to which the 
Senate bill refers, it shall not be in order to consider that 
bill.
      In the event of disagreement between the two Houses a 
conference should be promptly convened. It shall be in order to 
consider a conference report in the House of Representatives 
provided such report has been available to the House for one 
calendar day (excluding Saturdays, Sundays or legal holidays, 
unless the House is in session on such a day) and the 
accompanying statement has been filed in the House.
      Debate in the House of Representatives on the conference 
report and any amendments in disagreement on any disapproval 
bill shall each be limited to not more than one hour equally 
divided and controlled by a proponent and an opponent. A motion 
to further limit debate shall not be debatable. A motion to 
recommit the conference report shall not be in order and it 
shall not be in order to reconsider the vote by which the 
conference report is agreed to or disagreed to.

                        Procedures in the Senate

      Any member of the Senate may introduce a disapproval bill 
containing any combination of cancellations included in the 
President's special message. The disapproval bill shall be 
referred to the appropriate committee or committees. If 
necessary, referral to multiple committees is permissible to 
accommodate disapproval bills which relate to cancellations 
from omnibus bills (i.e. reconciliation bills). A committee 
shall report the bill with or without amendment within seven 
days during which the Senate is in session or be discharged. A 
disapproval bill received from the House of Representatives 
shall not be referred but shall be automatically placed on the 
Calendar. It is the intent of the conferees that only one 
disapproval bill for each special Presidential message be 
considered under the expedited procedures. This however, is not 
meant to limit the Senate's ability to choose between a Senate-
originated and a House-originated disapproval bill, it is 
intended that there be only one legislative vehicle.
      A motion to proceed to the consideration of a disapproval 
bill is not debatable. Section 1025(e)(6) provides a ten hour 
overall limitation for the floor consideration of a disapproval 
bill. Except as provided in section 1025(e)(9) (which addresses 
disposition of a Senate disapproval bill), this limit on 
consideration is intended to cover all floor action with regard 
to a disapproval bill. This section is specifically meant to 
preclude the offering of amendments or the making of dilatory 
motions after the expiration of the 10 hours. Consideration of 
a message from the House of Representatives with respect to a 
disapproval bill is limited to four hours, as is consideration 
of a conference report and any amendments reported in 
disagreement. Again the intent of the conferees is to preclude 
the offering of amendments or motions after the expiration of 
time so as to facilitate the adoption of any conference report 
or the disposition of any message from the House. In limiting 
the time for consideration the conferees do not intend to allow 
the process to be halted by the delay in the making of 
necessary and appropriate motions. Therefore motions to concur, 
disagree or disagree and request a new conference may be made 
at the expiration of time.
      Amendments to a disapproval bill, whether offered in 
committee or from the floor of the Senate, are strictly limited 
to those amendments which either strike or add a cancellation 
that is included in the President's special message. The 
conferees note that these expedited procedures are reserved 
solely for disapproval bills which overturn one or more 
cancellations contained in a President's special message. No 
other matter may be included in such bills. To enforce this 
restriction in the Senate, a point of order (which may be 
waived by a three-fifths vote) would lie against any amendment 
that does anything other than strike or add a cancellation 
within the scope of the special message. To the extent that 
extraneous items are added to disapproval bills, and the Senate 
has not waived the point of order against such an item, the 
conferees intend that such legislation would no longer qualify 
for the expedited procedures.
      The conference report also provides that any conferees on 
a disapproval bill must include any cancellations upon which 
the two Houses have agreed and may include any or all 
cancellations upon which the two Houses have disagreed, but may 
not include any cancellations not committed to the conference.
Sec. 1026. Definitions
      (1) Appropriation Law. As used in this Act, the term 
``appropriation law'' includes any Act which provides general, 
special, supplemental, deficiency, or continuing appropriations 
of federal funds, which has been presented to the President in 
accordance with Article I, section 7 of the Constitution of the 
United States, and which has been affirmatively signed into law 
by the President.
      (2) Calendar Day. The term ``calendar day'' means a 
standard 24-hour period beginning at midnight.
      (3) Calendar Day of Session. The term ``calendar day of 
session'' means only those days on which both Houses of 
Congress are in session. This definition excludes periods of 
recess and adjournment by either House.
      (4) Cancel. In the case of discretionary budget 
authority, the term ``cancel'' means to rescind an entire 
dollar amount. The term rescind is clearly understood through 
long experience between the Executive and Legislative branches 
with respect to appropriated funds. The conferees do not intend 
that any new interpretation be applied to the term rescind, but 
rather intend to narrow the scope of cancellation authority as 
compared with the authority provided under section 1012 of the 
Budget Act.
      For items of new direct spending, three definitions are 
provided to specifically tailor the cancellation authority to 
the type of direct spending involved. In the case of direct 
spending that is budget authority provided by law other than an 
appropriation law, the term cancel means to prevent that budget 
authority from having legal force or effect. For example, in 
the case of budget authority that provides authority to 
contract for a particular project, the effect of a cancellation 
by the President would be to foreclose the ability of the 
Federal Government to enter into an agreement to pay the amount 
of money provided in the law. The cancellation affects only the 
money that would otherwise be spent, and may not be used to 
alter or terminate any condition contained in the law.
      For entitlement authority, the term cancel means that the 
President may prevent the specific provision that results in 
the deficit-increasing obligation of the Federal Government 
from having legal force or effect. The cancellation affects 
only the legal obligation to pay a benefit, and does not change 
or affect any other aspect of the law.
      With respect to direct spending that is conducted through 
the food stamp program, the term cancel means that the 
President may prevent the specific provision of law that 
results in an increase in expenditures from having legal force 
or effect. Again, the authority is narrowly defined, and is 
limited only to eliminating the increase in food stamp 
obligations that would otherwise occur. No other aspect of the 
law could be altered, terminated or otherwise affected.
      Finally, with respect to limited tax benefits, the term 
cancel means to prevent the specific provision of law that 
provides the benefit from having legal force or effect. Again, 
the authority granted the President is very narrow--only to 
collect the tax that would otherwise not be collected or to 
deny the credit that would otherwise be provided. The President 
may not change, alter, or modify any other aspect of the law.
      (5) Direct Spending. The term ``direct spending'' is an 
existing term that is defined in section 250(8) of the Balanced 
Budget and Emergency Deficit Control Act of 1985. The 
conference report makes technical modifications to the 
definition to make it appropriate for use in part C of title X, 
but the conferees intend the term ``direct spending'' to have 
the same meaning as it does under the Balanced Budget and 
Emergency Deficit Control Act.
      (6) Disapproval Bill. For the purposes of the conference 
report, the term ``disapproval bill'' is defined as a bill or a 
joint resolution which only disapproves one or more 
cancellations of dollar amounts of discretionary budget 
authority, items of new direct spending or limited tax benefits 
in a special message transmitted by the President under section 
1022.
      The disapproval bill is defined to include a list by 
reference number of one or more of the cancellations in the 
President's special message, allowing the opportunity for 
amendments relating to specific cancellations. The structure of 
the disapproval bill is carefully defined and proscribed to 
ensure that only a list of reference numbers identifying 
cancellations from a particular special message, and nothing, 
more are included in a bill that is eligible for the expedited 
procedures that are provided under section 1025. Since it is 
the intent of the conferees to ensure that the expedited 
procedures are reserved for bills that only disapprove any or 
all of the President's cancellations, the definition is 
designed to ensure that matters beyond the scope of the 
President's special message are not permitted to be added to a 
disapproval bill. However, the conferees recognize the 
legitimate interest members may have in limiting the focus of a 
disapproval bill to include only a subset of the cancellations 
in a President's special message.
      Specifically, a disapproval bill referencing the 
President's cancellations has the following title: ``A bill 
disapproving the cancellations transmitted by the President on 
________,'' with the blank space being filled with the date of 
transmission of the relevant special message and the number of 
the relevant public law.
      The disapproval bill does not have a preamble and 
provides only the following: ``That Congress disapproves of 
cancellations ________, as transmitted by the President in a 
special message on ________, regarding ________.'' The first 
blank space is to be filled in with a list by reference number 
of one or more of the cancellations contained in the 
President's special message. The second blank space is to be 
filled in with the date of transmission of the President's 
special message. The third blank space is to be filled in with 
the number of the public law to which the special message 
relates.
      (7) Dollar Amount of Discretionary Budget Authority. The 
term ``dollar amount of discretionary budget authority'' is 
carefully defined in section 1026(7) in order to ensure that 
the President's authority to cancel discretionary spending in 
appropriation laws is clearly delineated. The conference report 
delegates the authority to the President to cancel in whole any 
dollar amount specified in an appropriation law.
      In addition, to increase the President's discretion, the 
conference report allows the President to cancel a dollar 
amount of budget authority provided in an appropriation law by 
specific amounts identified by the Congress in the statement of 
managers, the governing committee report, or other law. By 
limiting the delegation of authority, the conferees intend to 
preclude arguments between the Executive and Legislative 
Branches and to ensure that the delegation is not overbroad or 
vague. As is described in further detail below, the conferees 
have sought to provide the President the ability to rescind 
entire dollar amounts, even if not specified as a dollar amount 
in the law itself, so long as the dollar amount can be clearly 
identified and is in an indivisible whole with which Congress 
has previously agreed.
      The conferees note that the definition specifically 
excludes certain types of budget authority that are addressed 
by other provisions in part C of title X, as well as any 
restriction, condition, or limitation that Congress places on 
the expenditure of budget authority or activities involving 
such expenditure. The exclusion of restrictions, conditions, or 
limitations is included to make clear that the President may 
not use the authority delegated in section 1021(a) to cancel 
anything other than a specific dollar amount of budget 
authority.
      The cancellation authority cannot be used to change, 
alter, modify, or terminate any policy included by Congress, 
other than by rescinding a dollar amount. Obviously, if the 
Congress has included a restriction in the law that prohibits 
the expenditure of budget authority for any activity, there is 
no dollar amount to be rescinded by the President, nor would 
any money be saved for use in reducing the federal budget 
deficit, which is a requirement for the use of the authority 
provided under section 1021(a).
      As described in subparagraph (A)(i), the President may 
cancel the entire dollar amount of budget authority specified 
in an appropriation law. The term ``entire'' means just that; 
the President may rescind, or ``line out'' the dollar amount of 
budget authority specified in the law, so that the dollar 
amount provided in the law becomes zero after the cancellation. 
For example, in Public Law 104-37, the Agriculture 
Appropriations Act for Fiscal Year 1996, $49,486,000 was 
provided in the law for special grants for agriculture 
research. Using the authority granted under section 1021(a)(1), 
as defined under section 1026(7)(A)(i), the President could 
cancel only the entire $49,486,000.
      Further, again under subparagraph (A)(i), if the 
appropriation law does not include a specific dollar amount, 
but does include a specific proviso that requires the 
allocation of a specific dollar amount, then the President may 
rescind the entire dollar amount that is required by the 
proviso. A fictitious example of what the conferees intend in 
this case follows:

            An appropriation law includes a provision that 
        states ``for the operation and maintenance of the Army, 
        $1,400,000,000, provided Fort Fictitious is maintained 
        at Fiscal Year 1995 levels,''. In this instance, the 
        President could ascertain what the operation of Fort 
        Fictitious cost in FY 1995, and could rescind that 
        entire amount from the $1.4 billion provided for Army 
        O&M. The conferees note that the President would have 
        to take the entire dollar amount required to operate 
        Fort Fictitious in FY 1995, and could not simply take 
        part of that amount. It is intended to be an all or 
        nothing decision.

      As a further specific illustration, the conferees note 
that the General Construction Account in Public Law 104-46, the 
Energy and Water Development Appropriations Act, 1996, states:

            ``$804,573,000 to remain available until expended, 
        of which such sums as necessary pursuant to Public Law 
        99-662 shall be derived from the Inland Waterways Trust 
        Fund, for one-half of the costs of construction and 
        rehabilitation of inland waterways projects, including 
        rehabilitation costs for the Lock and Dam 25, 
        Mississippi River, Illinois and Missouri * * *''

      In this example, the President could cancel the entire 
$804,573,000 or could cancel an amount equal to the entire 
dollar amount that would be required to fund the rehabilitation 
costs of the Lock and Dam 25 project, noting in his message all 
information as required by section 1022.
      In subparagraph (A)(ii) the President is given the 
authority to rescind the entire dollar amount represented 
separately in any table, chart, or explanatory text included in 
the statement of managers or the governing committee report 
that accompanies an appropriation law. The term ``governing 
committee report'' is included to address the fact that the 
current practice in preparing the statement of managers for a 
conference report on an appropriation law is to simply address 
changes that were made in the statutory language and the 
accompanying committee reports, thus leaving intact and 
incorporating by reference tables, charts, and explanatory text 
in one of the two committee reports that were not modified by 
the conference.
      An example of the authority described in subparagraph 
(A)(ii) is found in the Conference Report accompanying the FY 
1996 Military Construction Appropriations Act (Public Law 104-
32). The statement of managers accompanying the conference 
report contains a chart denoting allocations of dollars to 
various installations and projects. On page 38 there is an 
allocation of $10,400,000 for a physical fitness center at the 
Bremerton Puget Sound Naval Shipyard. Except for this chart 
there is no other reference to the physical fitness center in 
either the statute or narrative explanation in the Conference 
Report. Under the authority provided by the definition in 
subparagraph (A)(ii), the President could cancel the entire 
$10,400,000 provided for the physical fitness center, but could 
not cancel only a part of that amount.
      The inclusion of subparagraph (A)(ii) is not intended to 
give increased legal weight or authority to documents that 
accompany the law that is enacted. Rather, as an exercise of 
its authority to specify the terms of the delegation to the 
President, Congress is choosing to use those documents as a 
means of allowing the President increased discretion to reduce 
dollar amounts of discretionary budget authority provided in an 
appropriation law. In order to ensure that the delegated 
authority is clear, the conferees have limited that authority 
to dollar amounts identified by Congress in the appropriation 
law, the accompanying statement of managers, the governing 
committee report or other law. Since Congress often provides 
detailed identification of dollar amounts in the accompanying 
documents, they represent an agreed upon set of dollar amounts 
that the President may rescind in their entirety.
      Subparagraph (A)(iii) has been included by the conferees 
to address a specific circumstance where neither the 
appropriation law nor the accompanying statement of managers or 
committee reports include any itemization of a dollar amount 
provided in that appropriation law. However, another law 
mandates that some portion of the dollar amount provided in the 
appropriation law be allocated to a specific program, project, 
or activity that can be quantified as a specific dollar amount. 
In this case, the President could rescind the entire dollar 
amount required to be allocated by the other law, since that 
dollar amount has been identified by Congress as a specific 
dollar amount that must be spent. As is the case with the 
earlier provisions, the President could not rescind part of the 
dollar amount mandated by the other law. It is an all or 
nothing decision. Likewise, the President could not use the 
cancellation authority to change, alter, or modify in any way 
the other law.
      An example of the authority provided in subparagraph 
(A)(iii) is found in section 132 of Public Law 104-106, the 
National Defense Authorization Act for Fiscal Year 1996. 
Section 132 states that ``Of the amounts appropriated for 
Fiscal Year 1996 in the National Defense Sealift Fund, 
$50,000,000 shall be available only for the Director of the 
Advanced Research Projects Agency for advanced submarine 
technology activities.'' In this example the President could 
``look through'' the appropriation law to the authorization law 
that mandates that $50 million is available only for advanced 
submarine technology activities, and could cancel the entire 
$50 million.
      However, had the appropriation law contained a provision 
that contradicted or otherwise made the mandate in the 
authorization law ineffective with respect to the allocation of 
the National Sealift Fund, then the President would not be able 
to use the amount in the authorization law as the basis for the 
cancellation of a dollar amount of discretionary budget 
authority. As with appropriation laws, the President cannot use 
the authority in subparagraph (A)(iii) to change, alter, or 
modify any provision of the authorization law.
      Subparagraphs (A)(iv) and (A)(v) are variations on the 
authority granted in clauses (i) through (iii), and are 
intended to address the circumstance where Congress does not 
specify in the appropriation law, the accompanying documents, 
or other law a specific dollar amount, choosing instead to 
require the purchase of a particular quantity of goods. 
Subparagraphs (A)(iv) and (A)(v) allow the President to rescind 
the entire dollar amount of discretionary budget authority 
represented by the quantity specified in the law or documents. 
To determine the specific dollar amount, the President is 
required to multiply the estimated procurement cost by the 
total quantity of items specified in the law or documents. The 
President may then rescind the entire dollar amount represented 
by the product of those two figures. The conferees expect that 
the President will use the best available information, as 
represented by the President's budget submission or binding 
contract documents, to estimate the procurement cost.
      The conferees have included the following examples in 
order to more clearly explain the definition of dollar amount 
of discretionary budget authority as defined by section 
1026(7). These examples are used solely for illustrative 
purposes and the conferees are in no way commenting on the 
merit of any of these programs. The conferees do not intend for 
these examples to represent all instances where cancellation 
authority may be used.
      The FY 1996 Agriculture Appropriations Act (Public Law 
104-37) appropriates $49,846,000 in special grants for 
agriculture research. The Conference Report accompanying this 
law contains a table that allocates the $49,846,000 total into 
lesser dollar amounts all of which correspond to individual 
research programs. This table, for example, contains a 
$3,758,000 allocation for ``Wood Utilization Research (OR, MS, 
MN, ME, MI)''.
      Using the definition in section 1026(7)(A) (i) and (ii), 
the President could cancel either the entire $49,846,000 
specified in the statute or the entire $3,758,000 described in 
the chart in the Conference Report. However, because the 
Congress did not break down the allocations for each state 
associated with this project the President would not have the 
authority to take a portion of the $3,758,000 allocated to wood 
utilization research.
      The conferees intend that cancellation authority only 
applies to whole items. If an item (or project) occurs in more 
than one state, and the law or a report that accompanies an 
appropriation law lists an item (project) and then lists a 
series of states, it is the entire item that must be canceled.
      In the example listed above, ``Wood Utilization 
Research'' appears in the report as: ``Wood Utilization 
Research (OR, MS, NC, MN, ME, MI).''
      The conferees believe it is important to note that this 
line in the report must be canceled in its entirety. The 
President's cancellation authority is strictly limited. The 
President has no authority in this example to cancel wood 
utilization research for Michigan only.
      To further illustrate this example, the conferees submit 
the following example that corresponds to a chart contained in 
the same conference report: ``Aflatoxin (IL), 133,000; Human 
Nutrition (AR), 425,000; Human Nutrition (IA), 473,000; Wool 
Research (TX, MT, WY) 212,000.''
      In this case, the President may cancel aflatoxin (IL), 
Human Nutrition (AR), Human Nutrition (IA), and/or Wool 
Research (TX, MT, WY). Although there are two human nutrition 
research projects listed in two different states, because of 
the manner in which they are listed, each project may be 
separately canceled. Again, the President may only cancel the 
entire wool research program and may not cancel only wool 
research in Texas.
      Section 1026(7)(B) describes what is not included in the 
definition of ``dollar amount of discretionary budget 
authority.'' Subparagraphs (B)(i) and (B)(ii) exclude items of 
new direct spending, for which cancellation authority is 
provided under other sections of part C of title X. 
Subparagraph (B)(iii) excludes from the definition any budget 
authority canceled or rescinded in an appropriation law in 
order to ensure that those cancellations or rescissions cannot 
be undone by the President using the cancellation authority.
      As described earlier, subparagraph (B)(iv) excludes from 
the definition any restriction, condition, or limitation in an 
appropriation law or the accompanying statement of managers or 
governing committee report on the expenditure of budget 
authority or on activities involving such expenditure. The 
following two examples illustrate the conferees' intent that 
the President cannot use the cancellation authority to alter 
the Congressional policies included in these restrictions, 
conditions, or limitations.
      The Labor, Health and Human Services and Education and 
Related Agencies Appropriations Act, H.R. 1217, as amended by 
the Senate Appropriations Committee contained the following 
section:

            ``Sec. 103. No amount of funds appropriated in this 
        Act for fiscal year 1996 may be used to implement, 
        administer, or enforce any executive order, or other 
        rule or order, that prohibits Federal contracts with, 
        or requires that debarment of, or imposes other 
        sanction on, a contractor on the basis that such 
        contractor or organizational unit thereof has 
        permanently replaced lawfully striking workers.''

      The President's cancellation authority only applies to 
entire dollar amounts. The above example of ``fencing 
language'' is a limitation and contains no dollar amount. 
Therefore, the President has no authority to alter or cancel 
this statement of Congressional policy.
      If a limitation or condition on spending--``fencing 
language''--is not written as a separate numbered or unnumbered 
paragraph, but instead is written as a proviso to an 
appropriated amount, the President still has no power to cancel 
the proviso.
      The Energy and Water Development Appropriations Act, 
1996, (Public Law 104-46), Title II, Department of the 
Interior, General Administrative Expenses, states:

            ``For necessary expenses of general administration 
        and related functions in the office of the 
        Commissioner, the Denver office, and offices in the 
        five regions of the Bureau of Reclamation, $48,150,000, 
        of which $1,400,000 shall remain available until 
        expended, the total amount to be derived from the 
        reclamation fund and to be nonreimbursable pursuant to 
        the Act of April 19, 1945 (43 U.S.C. 377); Provided, 
        that no part of any other appropriation in this Act 
        shall be available for activities or functions budgeted 
        for the current fiscal year as general administrative 
        expenses.

      Using this example, the President may cancel $48,150,000 
or the $1,400,000 noted, but may not cancel or alter in any way 
the proviso restricting the use of other appropriated funds 
contained in this Act.
      The conference report also allows the President to cancel 
the entire amount of budget authority required to be allocated 
by a specific proviso in an appropriation law for which a 
specific dollar figure was not included. The conferees 
recognize that from time to time, budget authority may be 
mandated to be spent on a specific program or project without a 
specific dollar amount being listed. However, in order to 
comply with the proviso, the President would have to expend 
appropriated funds.
      (8) Item of New Direct Spending. The term ``item of new 
direct spending'' means a provision of law that results in an 
increase in budget authority or outlays relative to the 
baseline set forth pursuant to section 257 of the Balanced 
Budget and Emergency Deficit Control Act of 1985.
      Under the Balanced Budget and Emergency Deficit Control 
Act of 1985, a reauthorization or an extension of a major 
entitlement program would not result in an increase in direct 
spending. As a consequence, such legislation would not 
constitute an item of new direct spending pursuant to the 
conference report. This does not mean that legislation must 
result in a net increase in spending in order to be subject to 
this cancellation authority. A provision of a future law that 
increases direct spending would be subject to the President's 
cancellation authority whether or not it is offset by another 
provision that reduces direct spending or increases revenues in 
the same law.
      Unlike an appropriation law, which specifically 
designates a dollar amount for a specific program, direct 
spending can arise from a number of interactions among 
provisions in a new law, other provisions in that same new law, 
and underlying law. The conference report provides the 
President with the authority to cancel the legal obligation 
provided by the new law that results in new direct spending. 
The cancellation authority is limited to the specific 
provisions in the new law signed by the President that result 
in the legal obligation to expend funds and does not extend to 
other previously enacted laws.
      The following are examples of direct spending increases 
that have been enacted. These examples are given to illustrate 
how cancellation authority could apply to similar items of new 
direct spending if included in a law to which part C of title X 
would apply. These examples are used solely for illustrative 
purposes and the conferees are in no way commenting on the 
merit of any of these programs. The conferees do not intend for 
these examples to represent all instances where cancellation 
authority may be used.
      The 1995 Balanced Budget Act included provisions that 
increased direct spending, but this Act was vetoed in its 
entirety by the President using his Constitutional authority 
and thus no provisions of that Act would be subject to the 
cancellation authority under part C. In the Omnibus Budget 
Reconciliation Act of 1993, the Congress enacted provisions 
that led to a net reduction in direct spending of $78.8 billion 
over five years. While this law led to a net reduction in 
direct spending, it included several provisions that increased 
direct spending. More specifically, the following are selected 
examples of provisions that increased direct spending that 
illustrate how the President's cancellation authority could be 
applied:

            Section 13982 increased Forest Service payments and 
        section 13983 increased Bureau of Land Management (BLM) 
        payments to counties affected by the Northern Spotted 
        Owl. These provisions were estimated to increase direct 
        spending by $43 million in fiscal year 1994 and $215 
        million over the period of fiscal years, 1994-1998. The 
        President could cancel the entire amount of the legal 
        obligation created by section 13982 for the Forest 
        Service to make payments or the entire amount of the 
        legal obligation in section 13983 for BLM to make 
        payments.
            Sections 13811 through 13813 dealt with Customs 
        overtime pay, additional benefits, and user fees. 
        Section 13812(c) provided cash awards for foreign 
        language proficiency to Customs Officers that was 
        estimated to increase direct spending by $2 million in 
        fiscal year 1994 and $10 million over the period of 
        fiscal years 1994-1998. The President could cancel that 
        legal obligation for the entire amount of funding 
        provided for cash awards to Customs Officers. However, 
        the President could not reach to provisions that 
        reduced direct spending, such as the extension of 
        Customs fees and overtime reform or other provisions 
        that did not directly deal with an increase in direct 
        spending.
            Sections 13901 through 13971 of that law made a 
        number of changes to the food stamp program that were 
        estimated to lead to a net increase in direct spending 
        of $56 million in fiscal year 1994 and $2.7 billion 
        over the period of fiscal years 1994-1998. More 
        specifically, section 13923 increased direct spending 
        by raising the asset test and indexed this asset test 
        for inflation for determining eligibility for food 
        stamps. The President would have the authority to 
        cancel the entire specific legal obligation so that the 
        increase in the asset test would have no legal force or 
        effect. In addition, the President could cancel the 
        entire legal obligation to make the inflation 
        adjustment so that this asset test would not be indexed 
        for inflation. However, the President's cancellation 
        authority would not apply to provisions that did not 
        affect direct spending or reduced direct spending, such 
        as section 13951 that expedited claim collections and 
        adjustments to error rate calculations.

      (9) Limited Tax Benefit. In general, a ``limited tax 
benefit'' is any provision under the Internal Revenue Code that 
is either (1) a revenue-losing provision that provides a 
Federal tax deduction, credit, exclusion, or preference to 100 
or fewer beneficiaries (unless the effect of the provision is 
that all similarly situated persons receive the same 
treatment); or (2) a provision that provides transitional 
relief to 10 or fewer beneficiaries.
      The number of beneficiaries affected by a provision is 
determined by considering each fiscal year in which the 
provision will be in effect; if the number of beneficiaries 
falls below the requisite threshold for any one of those fiscal 
years, the provision could be identified as a limited tax 
benefit. For purposes of determining the number of 
beneficiaries, certain individuals and businesses would be 
aggregated: all businesses and associations which are related 
(within the meaning of Internal Revenue Code sections 707(b) 
and 1563(a)) would be treated as one beneficiary; all qualified 
plans of a single employer would be treated as one beneficiary; 
all holders of the same bond issue would be treated as one 
beneficiary. However, individual shareholders of a corporation, 
partners of a partnership, members of an association, or 
beneficiaries of a trust would not be counted as separate 
beneficiaries simply because a benefit is provided to the 
respective corporation, partnership, association, or trust.
      Revenue-losing Provisions that Affect 100 or Fewer 
Beneficiaries. A provision is defined as ``revenue-losing'' if 
it results in a reduction in federal tax revenues for any one 
of the following two periods: (1) the first fiscal year for 
which the provision is effective; or (2) the period of the five 
fiscal years beginning with the first fiscal year for which the 
provisions is effective.
      A revenue losing provision that affects 100 or fewer 
beneficiaries is not a limited tax benefit if one of the 
exceptions is met. First, if a provision has the effect of 
providing all persons in the same industry or engaged in the 
same activity with the same treatment, the item is not a 
limited tax benefit even if there are 100 or fewer persons in 
the affected industry. For example, a provision that sets forth 
the depreciation treatment for equipment that is used only by 
automobile manufacturers will not be treated as a limited tax 
benefit solely because there are fewer than 100 automakers 
located in the United States.
      Similarly, a provision that provides the same treatment 
for all persons who engage in research and development 
activities, or all persons who adopt children, or all persons 
who engage in drug testing, would not be treated as a limited 
tax benefit simply because 100 or fewer persons are expected to 
engage in that activity in any of the fiscal years in which the 
provision is effective. In such circumstances, the benefit is 
provided as an incentive to anyone who chooses to engage in the 
activity rather than to a closed group of specific taxpayers.
      A second exception applies to provisions that have the 
effect of extending all persons owning the same type of 
property, or issuing the same type of investment instrument, 
the same treatment. For example, a provision that sets forth 
the depreciation treatment for a highly-specialized type of 
computer equipment that is owned by fewer than 100 taxpayers 
(who are not necessarily in the same industry) would not be 
treated as a limited tax benefit as long as any person who 
purchases such equipment is entitled to the same treatment. 
Similarly, a provision that affects the deductibility of 
interest with respect to certain types of debt instruments 
would not be a limited tax benefit, as long as any person who 
issued that type of debt instrument receives the same 
treatment.
      The conference report further clarifies that a provision 
is not a limited tax benefit if the only reason the provision 
affects different persons differently is because of (1) the 
size or form of the business or association involved (e.g., a 
provision that gives preferential treatment to small 
businesses); (2) general demographic conditions affecting 
individuals, such as their income level, marital status, number 
of dependents, or tax return filing status; (3) the amount 
involved (e.g., a cap based on the dollar amount of a 
taxpayer's investment or the number of units produced by a 
taxpayer); or (4) a generally-available election provided under 
the Internal Revenue Code (e.g., if taxpayers who engage in a 
certain activity are given a choice between two alternative 
treatments, and fewer than 100 taxpayers are expected to choose 
one of the alternatives).

                            Transition Rules

      Any Federal tax provision that provides temporary or 
permanent transitional relief to 10 or fewer beneficiaries in 
any fiscal year would be a limited tax benefit except to the 
extent that the provision provides for the retention of prior 
law for all binding contracts (or other legally enforceable 
obligations) in existence on a date contemporaneous with 
Congressional action specifying such a date. For example, a 
provision in a chairman's mark which retains current law with 
respect to binding contracts in existence on the date the mark 
is released would not be a limited tax benefit. In addition, a 
technical correction to previously enacted law (if it is scored 
as having no revenue effect) would not be a limited tax benefit 
for this purpose.
      This provision covering transition rules is intended to 
address the type of special rules used extensively in prior tax 
legislation. For example, in the Tax Reform Act of 1986 (the 
``1986 Act''), which included a number of revenue raising tax 
provisions, various specifically identified taxpayers were 
provided special rules that exempted them from treatment under 
the general revenue raising provisions. One provision in the 
1986 Act changed the rules for how multinational corporations 
could allocate interest expenses for foreign tax credit 
purposes. The provision included a favorable rule for banks, 
and also included a special exception allowing ``certain'' non-
banks to use the favorable bank rule. The special exception 
applied to any corporation if ``(A) such corporation is a 
Delaware corporation incorporated on August 20, 1959, and (B) 
such corporation was primarily engaged in the financing of 
dealer inventory or consumer purchases on May 29, 1985, and at 
all times thereafter before the close of the taxable year.'' 
Public Law 99-514, 100 Stat. 2548, sec. 1215(c)(5). If 10 or 
fewer taxpayers were expected to benefit from the special 
exception, this provision would constitute a limited tax 
benefit under the conference agreement definition, and would be 
subject to the President's cancellation authority.
      The conferees submit the following two examples for what 
may or may not be a limited tax benefit. All examples are used 
solely for illustrative purposes and the conferees are in no 
way commenting on their merit. Furthermore, the conferees do 
not intend for these examples to represent all instances where 
cancellation authority may be used.
      The Omnibus Reconciliation Act of 1993 included a 
provision that created an income tax credit for entities that 
make qualified cash contributions to one of 20 ``community 
development corporations'' to be selected by the Secretary of 
Housing and Urban Development using certain selection criteria.
      Under the conference report, the Joint Committee on 
Taxation (JCT) would estimate how many contributions would be 
designated as eligible for the credit, based on the information 
available to the Committee at the time the legislation was 
being considered. If the JCT determined more than 100 
contributors would benefit from the credit, then the provision 
could not be canceled. If fewer than 100 contributors were 
estimated to benefit from the provision, then the provision 
could be canceled.
      If the conference report did not include the information 
from JCT in the required form, then the President would have 
the authority to make the determination.
      H.R. 831 (enacted in the 104th Congress) included a 
provision to restore a prior-deduction for 25 percent of the 
amount paid for health insurance for self-employed individuals 
and the individuals' spouses. The 25 percent deduction had 
expired after December 31, 1993. H.R. 831 restored the 25-
percent deduction for 1994 and increased the deduction to 30 
percent for taxable years beginning after 1994.
      Under the conference report, this provision would not be 
a limited tax benefit because it applies to all self-employed 
individuals who purchase their own health insurance, and thus 
this provision would benefit more than 100 individuals.
      (10) OMB. The term ``OMB'' means the Director of the 
Office of Management and Budget.
Sec. 1027. Identification of limited tax benefits
      The conferees intend to limit the authority delegated to 
the President by Congress under section 1021 with respect to 
the application of that authority to limited tax benefits. A 
limited tax benefit is a carefully delineated provision under 
the definition in section 1026(9). This section ensures the 
proper application of this definition, and hence the 
President's cancellation authority, to any tax provision. The 
conference report provides the conferees on any revenue or 
reconciliation measure with the opportunity to identify for the 
President what may constitute a limited tax benefit, under the 
procedures in this section, in each revenue or reconciliation 
law.
      The conference report states that the JCT shall examine 
any revenue or reconciliation bill or joint resolution (that 
amends the Internal Revenue Code) prior to its filing by a 
committee of conference in order to determine whether or not 
that bill or joint resolution contains any limited tax benefits 
under the definition in section 1026(9). The statement from the 
JCT shall state that the bill either contains no limited tax 
benefits or contains limited tax benefits.
      In the case of a revenue or reconciliation bill or joint 
resolution containing one or more limited tax benefits the 
statement shall list each of those provisions. In the case of a 
revenue or reconciliation bill or joint resolution containing 
no limited tax benefits, the statement shall state that 
determination. This statement shall be submitted to the 
conference committee on such a bill or joint resolution and 
shall be made available by the JCT to any Member of Congress 
upon request.
      If the conference report includes the information from 
the JCT and that information identifies provisions in the 
conference report which quality as limited tax benefits under 
the definition in section 1026(9), then the President may 
cancel those, and only those, items as identified. On the other 
hand, if such a conference report contains a statement from the 
JCT stating that there are no provisions in the conference 
report qualifying under the definition in section 1026(9) as a 
limited tax benefit, then the President may not exercise the 
cancellation authority under section 1021(a)(3) because 
Congress has provided that no tax provisions are eligible for 
cancellation under this authority.
      The conference report specifies how the information 
provided by JCT may be included in the bill. At the end of the 
bill, the permitted separate section should read as follows: 
``Section 1021(a) of the Congressional Budget and Impoundment 
Control Act of 1974 shall ________ apply to ________'', with 
the blank spaces being filled in with the appropriate 
information. In the case in which the JCT identifies limited 
tax benefits in a conference report, the word ``only'' would 
appear in the first blank and a list of all of the provisions 
of the bill or joint resolution identified by the JCT in that 
Committee's statement shall appear in the second blank. In the 
case in which the JCT declares that there are no limited tax 
benefits in the conference report, the word ``not'' would 
appear in the first blank and the phrase ``any provision of 
this Act'' would appear in the second blank.
      The conferees intend that the decision to include the 
information provided by JCT in the bill or joint resolution 
that amends the Internal Revenue Code shall be left to the 
discretion of the appropriate conferees. With respect to any 
potential violations or any rules relating to the scope of a 
conference, the conferees intend that the inclusion of such an 
identification shall not constitute a violation of any rules of 
the House of Representatives or the Senate, respectively.
      In the event the legislation amending the Internal 
Revenue Code is signed into law that does not contain the 
information provided by JCT, any identification of what 
constitutes a limited tax benefit under the definition in 
section 1026(9) may be made by the President. If any provision 
qualifies as a limited tax benefit (within the confines of the 
definition of such a benefit in section 1026(9)) and the 
President identifies such a benefit, the President may exercise 
the cancellation authority under section 1021(a)(3).
Section 3. Judicial review
      Any Member of Congress or other adversely affected 
individual is given standing to seek declaratory judgement and 
injunctive relief on the ground that any provision of this law 
violates the Constitution. Suit must be brought in the United 
States District Court for the District of Columbia. A copy of 
any complaint brought under this Act must be promptly filed 
with the Secretary of the Senate and Clerk of the House, and 
each House reserves the right to intervene in any action 
according to its own internal rules.
      Appeals from the District Court must be filed within 10 
calendar days after an order is entered and may be taken 
directly to the Supreme Court of the United States. A period of 
30 calendar days is provided for filing a jurisdictional 
statement with the Supreme Court, and the conference report 
prohibits any single Justice from issuing a stay of the 
District Court's order. Both the District Court and the Supreme 
Court are directed to advance on the docket and expedite to the 
greatest extent possible any action brought with regard to the 
constitutionality of this law.
Section 4. Conforming amendments
      Section 4 makes three conforming amendments. First, this 
section amends the short title of the Congressional Budget and 
Impoundment Control Act of 1974 to clarify that the short title 
of Impoundment Control Act shall refer to parts A and B of 
title X. The amendment further specifies that part C of title X 
shall be cited as the Line Item Veto Act of 1996.
      Second, section 4 makes a conforming amendment to the 
table of contents in the Congressional Budget and Impoundment 
Control Act to include a listing of the contents of part C, 
referencing sections 1021 through 1027.
      Third, section 4 amends section 904(a) of the 
Congressional Budget Act of 1974 to clarify that the provisions 
of sections 1025 and 1027, relating to Congressional 
consideration of a disapproval bill and identification of 
limited tax benefits, in an exercise of the rulemaking powers 
of the House of Representatives and the Senate. As a result, 
sections 1025 and 1027 are considered part of the rules of each 
House, respectively, and it supersedes other rules only to the 
extent that it is inconsistent with those rules. This is also a 
recognition of the constitutional right of both Houses to 
change these rules at any time, in any manner and to the same 
extent as in the case of any other rule of each House.
Section 5. Effective dates
      Section 5 provides an effective date of the earlier of 
(1) the day after the enactment of an Act entitled ``An Act to 
provide for a seven-year plan for deficit reduction and achieve 
a balanced Federal budget.''; or (2) January 1, 1997. It 
provides that this part shall sunset January 1, 2005.
                                   Bill Clinger,
                                   Gerald Solomon,
                                   Jim Bunning,
                                   Porter Goss,
                                   Peter Blute,
                                 Managers on the Part of the House.

                                   Ted Stevens,
                                   Bill Roth,
                                   Fred Thompson,
                                   Thad Cochran,
                                   John McCain,
                                   Pete V. Domenici,
                                   Chuck Grassley,
                                   Don Nickles,
                                   Phil Gramm,
                                   Dan Coats,
                                   Jim Exon,
                                Managers on the Part of the Senate.


                                


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