[Senate Report 105-107]
[From the U.S. Government Publishing Office]



                                                       Calendar No. 209
105th Congress                                                   Report
                                 SENATE

 1st Session                                                    105-107
_______________________________________________________________________


 
            CORPORATE SUBSIDY REFORM COMMISSION ACT OF 1997

                               __________

                              R E P O R T

                                 of the

                   COMMITTEE ON GOVERNMENTAL AFFAIRS

                          UNITED STATES SENATE

                             together with

                            ADDITIONAL VIEWS

                              to accompany

                                 S. 207

 TO REVIEW, REFORM, AND TERMINATE UNNECESSARY AND INEQUITABLE FEDERAL 
                               SUBSIDIES





                October 9, 1997.--Ordered to be printed


                   COMMITTEE ON GOVERNMENTAL AFFAIRS

                   FRED THOMPSON, Tennessee, Chairman
SUSAN COLLINS, Maine                 JOHN GLENN, Ohio
SAM BROWNBACK, Kansas                CARL LEVIN, Michigan
PETE V. DOMENICI, New Mexico         JOSEPH I. LIEBERMAN, Connecticut
THAD COCHRAN, Mississippi            DANIEL K. AKAKA, Hawaii
DON NICKLES, Oklahoma                RICHARD J. DURBIN, Illinois
ARLEN SPECTER, Pennsylvania          ROBERT G. TORRICELLI, New Jersey
BOB SMITH, New Hampshire             MAX CLELAND, Georgia
ROBERT F. BENNETT, Utah
             Hannah S. Sistare, Staff Director and Counsel
                        Ellen B. Brown, Counsel
                 Leonard Weiss, Minority Staff Director
                    Michal Sue Prosser, Chief Clerk



                            C O N T E N T S

                              ----------                              
                                                                   Page
  I. Purpose..........................................................1
 II. Background.......................................................1
III. Legislative History..............................................2
 IV. Section-by-Section Analysis......................................9
  V. Regulatory Impact Statement.....................................13
 VI. CBO Cost Estimate...............................................14
VII. Administration Statement........................................15
VIII.Additional Views of Senator John Glenn..........................20

 IX. Changes to Existing Law.........................................21



                                                       Calendar No. 209
105th Congress                                                   Report
                                 SENATE

 1st Session                                                    105-107
_______________________________________________________________________


            CORPORATE SUBSIDY REFORM COMMISSION ACT OF 1997

                                _______
                                

                October 9, 1997.--Ordered to be printed

_______________________________________________________________________


Mr. Thompson, from the Committee on Governmental Affairs, submitted the 
                               following

                              R E P O R T

                             together with

                            ADDITIONAL VIEWS

                         [To accompany S. 207]

                               i. purpose

    The purpose of S. 207, the Corporate Subsidy Reform 
Commission Act of 1997, is to create a Commission to fairly and 
independently review corporate subsidies and make 
recommendations to the President and the Congress for the 
retention, reform or termination of such subsidies.

                             ii. background

    In the 104th Congress, considerable progress was made in 
reforming the way in which the Federal government operates: 
government spending was reduced by $53 billion, the welfare 
system was reformed, farm supports were restructured, 
telecommunications law was rewritten, the Federal procurement 
system was reformed, and major immigration reforms were 
adopted.
    As part of this reform process, a bipartisan group of 
Senators set out to examine and address provisions of 
unjustified Federal subsidies to profit making entities. This 
is commonly known as ``corporate welfare.'' This phenomenon has 
been studied extensively, by both governmental and non-
governmental research organizations, notably the Cato Institute 
and the Progressive Policy Institute. Reports from these and 
other organizations reveal that the Federal government spends 
roughly $60 billion a year on programs that provide spending 
subsidies to businesses and provides corporate tax expenditures 
of more than $65 billion.
    To address this issue in a comprehensive manner, this 
bipartisan group introduced S. 1376 which was referred to the 
Committee on Governmental Affairs. The Committee held hearings 
and reported S. 1376 to the Senate on August 27, 1996. That 
bill was reintroduced this Congress as S. 207, legislation to 
create an independent, bi-partisan commission designed to 
ensure that Federal subsidies will be considered anew on their 
merits. If a subsidy is warranted, it will withstand this 
scrutiny. A commission will provide for a comprehensive and 
fair review through a process designed to minimize political 
pressures.

                        iii. legislative history

    S. 207, the Corporate Subsidy Reform Commission Act of 
1997, was introduced on January 28, 1997 by Senator McCain (for 
himself and Senators Thompson, Kerry, Feingold, Kennedy, Coats, 
Glenn, Lieberman, and Brownback), and referred to the Committee 
on Governmental Affairs. Senators Abraham, Collins, Smith of 
New Hampshire, and Kohl became additional co-sponsors.

                                hearings

    On February 13, 1997, the Committee held a hearing on the 
bill. The following witnesses appeared to present testimony on 
S. 207: The Honorable John McCain, U.S. Senate, Arizona; the 
Honorable John F. Kerry, U.S. Senate, Massachusetts; the 
Honorable Russell D. Feingold, U.S. Senate, Wisconsin; Thomas 
Schatz, President, Citizens Against Government Waste; Grover 
Nordquist, President, Americans for Tax Reform; Courtney Cuff, 
Green Scissors Campaign Director, Friends of the Earth; and 
Dean Stansel, Fiscal Policy Analyst, Cato Institute.
    Senator McCain testified that since the nation's annual 
deficit and accumulated debt have force Congress to make 
changes to social welfare programs it is only fair to make the 
corporate sector share the burden of budget cuts. Senator 
McCain, in support of creating a Commission as necessary to the 
process of eliminating corporate subsidies, stated:

          The independent Commission and expedited 
        Congressional review process established by this 
        legislation will depoliticize the process and guarantee 
        that the pain is shared equally. In reality, this 
        Corporate Subsidy Reform Commission is probably the 
        only realistic means of achieving the meaningful reform 
        that the public and our dire fiscal circumstances 
        demand.

    Senator McCain emphasized that the goal of the Commission 
is not to increase revenues or create new taxes. Rather, the 
Commissionis designed to conduct a review and formulate 
recommendations to reform programs or policies that create distortions 
in the market, foster unfair relationships between corporate America 
and the government, and increase the pressures in the Federal budget.
    Senator Kerry testified that, while Congress has been 
reducing the deficit and putting pressure on discretionary 
spending, Congress has failed at any significant attempts to 
try to curb the growth of corporate welfare. He stated that S. 
207 gives ``everybody an opportunity to perform their 
responsibilities, but does so in a way that requires us to make 
the choice that are otherwise avoidable.''
    Senator Feingold emphasized that the issue of ``corporate 
welfare'' needs to be dealt with immediately because ``we 
cannot simply justify any kind of appropriation or spending 
going to any corporation * * * '' He expressed his belief that 
the Commission approach could have a real impact.
    Mr. Schatz of Citizens Against Government Waste testified 
that S. 207 provides the necessary authority and autonomy to 
eliminate unfair and wasteful subsidies that disrupt the free 
market and perpetuate higher taxes. However, he urged that the 
sponsors consider making the Commission's recommendations as a 
whole subject to a straight up or down vote without the 
opportunity for amendment by committees or on the floor.
    Mr. Nordquist of Americans for Tax Reform testified in 
support of eliminating all corporate welfare spending programs. 
However, he expressed concern about including in the discussion 
of corporate welfare spending a discussion of tax increases on 
the grounds that eliminating or reducing tax preferences should 
be done in the context of not raising taxes and in the context 
of overall tax reduction. He urged two commissions, one dealing 
with tax reform and one dealing with corporate welfare 
spending.
    Ms. Cuff of Friends of the Earth testified in support of 
the establishment of the Corporate Subsidy Reform Commission. 
She expressed the position of Friends of the Earth ``that the 
American people deserve . . . decisive and prompt action to 
reform welfare for wealthy corporations'' and the belief that 
``[t]ax loopholes, exemptions and credits can be corporate 
welfare.''
    Mr. Stansel of the Cato Institute expressed his belief 
that, ideally, a commission should be completely unnecessary--
that Congress and the President should take responsibility ``to 
get rid of these programs by themselves through the annual 
budget process.'' However, since that is not happening, he 
testified in support of the Commission. Also, he urged that the 
Commission focus only on spending programs, not on tax 
loopholes:

          The fight to end corporate welfare should not result 
        in higher taxes on business. Higher taxes on business 
        makes U.S. industry less competitive, not more 
        competitive. By definition, if you close a loophole 
        without reducing the rates, it is a tax hike and we 
        oppose it.

    At the hearing, Chairman Thompson expressed his strong 
support for the ``commission approach'' because the Commission 
can make an overall informed assessment of all programs, on 
both the spending and revenue sides, at one time. He noted:

          Over the years, we have created an intricate, 
        interwoven system of subsidies, taxes and exemptions * 
        * * Our experience last Congress demonstrated that 
        voting hit or miss on individual items is not going to 
        be successful * * * With the commission approach, we 
        will know that all programs have been examined, and 
        those which provide unjustified subsidies have been 
        exposed.

Chairman Thompson also expressed his view that enactment of 
this legislation will demonstrate that Congress and the 
Executive Branch ``are serious about addressing and correcting 
a system which the American public as a whole sees as 
benefiting the few with access and influence, rather than 
serving the general public good.''
    Senator Levin stated his belief that S. 207 is a much 
improved version of the bill that was first introduced last 
Congress and that he appreciated the sponsors incorporating a 
number of his and others' suggestions. He again expressed his 
concern from last Congress relative to floor consideration and 
the opportunity for debate.
    Senator Brownback emphasized the need to focus this hearing 
on provisions of the bill itself, not ``on corporate welfare 
per se, or what corporate welfare is or is not, or who is to 
blame for it.'' He also asked witnesses for suggestions on 
specific issues including whether taxes and spending issues 
should be on separate tracks and whether there are too many 
exceptions and loopholes in the bill in terms of what types of 
subsidies are off limits.
    In a statement submitted for the record, Senator Glenn 
expressed his belief that ``as a matter of equity, corporations 
and other entities that benefit from Federal tax and spending 
policies should * * * contribute toward restoring fiscal 
soundness in our government.''

                               discussion

    S. 207 as amended creates a nine-member Commission to 
recommend which Federal corporate subsidies, including 
taxadvantages, should be retained, reformed or terminated. Three of the 
members of the Commission are appointed by the President (one of which 
the President will appoint as Chairman); two are appointed by the 
Speaker of the House, one is appointed by the House Minority Leader, 
two are appointed by the Senate Majority Leader, and one is appointed 
by the Senate Minority Leader. The President and Members of Congress 
responsible for making the appointments shall consult with each other 
prior to making their appointments to ensure a broad and fair 
representation of views on the Commission. The process for 
establishment of the Commission shall terminate if the President does 
not submit three names to the Senate after the January 1997 
inauguration and prior to January 31, 1998.
    The head of each Federal agency is required to submit by 
April 1, 1998 or the date the budget documents are submitted to 
Congress in 1998, whichever is earlier, a list identifying all 
programs or tax laws that the head of the department or agency 
determines provide inequitable subsidies. The list must include 
a detailed description of the program or tax law in question, a 
statement detailing the extent to which the payment, benefit, 
service, or tax advantage meets the criteria of an 
``inequitable Federal subsidy'' as identified in section 4 of 
S. 207, a statement summarizing the legislative history and 
purpose for the subsidy as well as the laws related to the 
subsidy, and a recommendation regarding the subsidy identified.
    Subsidies benefiting several groups of entities are 
explicitly excluded by section 4(1) (A) and (B) from those 
Federal subsidies that may be reviewed by the Commission. The 
excluded subsidies are those that benefit non-profit 
organizations meeting the requirements of section 501(c)(3) and 
501(a) of the Internal Revenue Code, state governments, local 
governments, and Indian Tribes, including Alaskan natives.
    An inequitable Federal subsidy is defined as a payment, 
benefit, service or tax advantage that is provided by the 
Federal government to a corporation, partnership, joint 
venture, association, or business trust without a reasonable 
expectation that there would be a return or benefit to the 
public at least as large as the payment, benefit, service, or 
tax advantage. It is intended that in calculating the return 
and benefits to the public, the Commission consider both 
monetary and non-monetary benefits. In addition, the 
inequitable Federal subsidy must provide an unfair competitive 
advantage or financial windfall and may not include the 
following:
          (1) certain research and development awards;
          (2) items which primarily benefit the public health, 
        safety, the environment or education;
          (3) items necessary to comply with international 
        trade or treaty obligations;
          (4) items certified by the U.S. Trade Representative 
        as necessary; or
          (5) items for the procurement of property or services 
        by the Federal government.
    The definition of an ``inequitable Federal subsidy'' 
includes an exemption for certain research and development. It 
was agreed that research and development activities that met 
all four tests of section 4(4)(A) are exempt from the 
Commission's review. Section 4(4)(A) exempts research and 
development that:
          (i) ``is in the broad public interest on the basis of 
        a peer review or other open, competitive, merit-based 
        procedure.'' This recognizes that some research and 
        development activities may provide a large private 
        return, but only a small return to the public; and 
        these are not exempt from review by the Commission. 
        Further, this is intended to ensure that research and 
        development activities that received a direct funding 
        grant in a noncompetitive manner, either within an 
        agency's budgetary discretion or through a line-item 
        appropriation, are subject to review by the Commission.
          (ii) ``is for a purpose consistent with the mission 
        of the agency.'' This is to ensure that the research 
        and development activities are appropriate for the 
        agency in its role within the Federal government.
          (iii) ``supports competing technologies at levels 
        appropriate to their potential, as determined by an 
        appropriate priority setting process.'' This recognizes 
        that some technologies may receive support to the 
        detriment of technologies that compete with them 
        because of influence by powerful allies, or for reasons 
        that, while possibly once valid, are no longer valid. 
        This provision attempts to ensure that the technology 
        options selected by an agency went through a reasoned 
        priority selection.
          (iv) ``the private sector cannot reasonably be 
        expected to undertake without Federal support at a 
        level or in a time frame consistent with the payment, 
        benefit, service, or tax advantage's potential to 
        provide broad economic or other public benefit.'' This 
        provision recognizes that the private sector can and 
        should conduct research and development; however, there 
        are legitimate reasons for Federal subsidies to the 
        private sector as an incentive to achieve certain 
        public policy objectives. Federal funding may be 
        necessary to offset financial risks and market failures 
        in financing research and development, may be key in 
        speeding up certain research and development, or may 
        otherwise add to the activity by providing additional 
        resources. In an eraof intense global competition, such 
Federal support can play a crucial role in reaping the broad public 
rewards of research and development.
    The exclusion in section 4(4)(B) for subsides primarily 
benefiting ``public health, safety, the environment and 
education'' is intended to be interpreted broadly to exclude, 
for example, health care subsidies, worker safety programs, 
work-study education and job training programs, and similar 
Federal activities.
    The Committee also took special note of the Federal 
government's role in the area of international trade. In 
establishing the Commission's review of Federal subsidies, it 
is not the Committee's intent to unduly disadvantage U.S. 
business interests as they compete in the international 
marketplace. It is recognized that foreign governments 
frequently subsidize business interests in their own countries. 
Eliminating a particular program or subsidy might make sense in 
a purely domestic context, but such action could place U.S. 
company at a severe disadvantage when competing with a foreign 
company which has the benefit of a subsidy from its government. 
A U.S. government subsidy may have been instituted in order to 
offset a similar subsidy to foreign competitors by foreign 
governments, with the intent of leveling the playing field for 
U.S. industry. To eliminate such a subsidy not only affects the 
direct U.S. business interests in global competition, but also 
reduces the leverage of the U.S. government in trade 
negotiations. Having matched a foreign government subsidy, the 
U.S. government may call for negotiations to mutually end the 
practice.
    Section 4(4)(C) exempts from the definition of 
``inequitable Federal subsidy'' any payment, benefit, service 
of tax advantage that ``is necessary to comply with 
international trade or treaty obligations.'' This recognizes 
that the U.S. government has entered into a variety of 
international trade agreements and international treaties that 
are not subject to review by the Commission. The circumstances 
and rationale leading to any such agreement are not the concern 
of the Commission. If the U.S. is a party to an international 
trade agreement or an international treaty, that obligation 
must be met.
    Section 4(4)(D) provides an exemption from the definition 
of ``inequitable federal subsidy'' for any payment, benefit, 
service, or tax advantage that ``is certified by the United 
States Trade Representative as specifically intended and as 
substantially needed to protect the foreign trade interests of 
the United States.'' As part of its agency plan under section 
6(a)(3), the United States Trade Representative (USTR) 
specifically is required to survey all federally supported 
international trade programs for certification under 4(4)(D). 
This ensures that the USTR will report to the Commission not 
only on international trade programs under its direct 
jurisdiction but will play a role in reviewing trade-related 
programs throughout the Federal government.
    The USTR is responsible for directing all trade 
negotiations and formulating trade policy for the United 
States. Utilizing the expertise of that office to review all 
trade programs will ensure that U.S. trade interests are 
protected. A concern was expressed that in identifying 
subsidies in the international arena, a foreign country might 
be in a position to challenge U.S. trade policies within the 
World Trade Organization. The possibility was raised that 
Congress merely considering a subsidy for elimination could be 
cited by a foreign country as evidence that the ``payment, 
benefit, or tax advantage'' was not legitimate or justified. 
The USTR is the organization with the Executive Branch that 
will be sensitive to the potential for global trade challenges. 
The inclusion of USTR in reviewing and certifying a subsidy as 
``specifically intended and as substantially needed to protect 
the foreign trade interests of the United States'' adds needed 
flexibility to ensure that the important objective of the 
legislation does not have an unintended consequence of 
handicapping U.S. trade policy.
    The USTR will provide the Commission with a detailed 
statement of the reasons each program was or was not certified 
under the test of ``specifically intended and as substantially 
needed.'' This explanation will provide a better understanding 
of the rationale used by the USTR in reaching its determination 
on the merits of each program.
    The Commission is required to hold public hearings on the 
recommendations included in the lists provided by the head of 
each agency. All testimony presented before the Commission at a 
public hearing shall be given under oath. No later than 
November 30, 1998, the Commission shall submit a report to the 
President containing the Commission's findings and 
recommendations for termination, modification, or retention of 
each of the inequitable Federal subsidies. Once the report has 
been presented to the President, the Commission is required to 
provide to any Member of Congress, upon request, the 
information used by the Commission in making its 
recommendations.
    By December 31, 1998, the President must report to the 
Commission and to Congress on approval or disapproval of the 
Commission's recommendations. If the President approves all the 
recommendations, the President certifies such approval and 
submits the recommendations to the Congress. If the President 
disapproves of the recommendations, in whole or in part, the 
President must report to the Commission and the Congress the 
reasons for that disapproval. The Commission must then, no 
later than February 1, 1999, submit a revised list of 
recommendations to the President. If the President fails to 
certify to Congresshis approval of the entire package of 
recommendations by February 15, 1999, the process is terminated.
    If the President submits the Commission's recommendations 
to the Congress, procedures are established for congressional 
consideration. First, the Commission's recommendations are 
introduced as a bill or bills in both the Senate and the House 
and referred to and reported by the committees of jurisdiction. 
Any amendments to the bill or bills reflecting the Commission's 
recommendations must be confined to the definition of 
``inequitable Federal subsidy'' pursuant to section 4. This 
ensures that amendments extraneous to eliminating, modifying, 
or terminating subsidies are not included.
    Further, the Committees on Finance and Ways and Means are 
provided authority to make amendments, in any bill referred to 
such committees that contains revenue increases, to include 
reductions in revenues in the form of specific tax cuts in an 
amount up to the amount of the revenue increases. If such 
reductions in revenues is not made at that time, the amount of 
revenue reductions not made shall be credited to the PAYGO 
scorecard under Deficit Reduction. This ensures that provisions 
to close ``tax loopholes'' will be revenue neutral by providing 
ultimately offsetting tax cuts.
    The bills reported by all committees are referred to the 
Committee on Governmental Affairs of the Senate and the 
Committee on Government Reform and Oversight of the House. Each 
of these committees then consolidate all bills into a single 
bill (one bill in the Senate and one bill in the House) and 
reports such bill without amendment.
    Procedures are established for floor consideration in 
accordance with the rules of each House similar to those rules 
governing consideration of Budget Reconciliation. Floor 
amendments are constrained further by the requirement to meet 
the definition of ``inequitable Federal subsidy'' and by being 
limited to either striking provisions or restoring provisions 
recommended by the Commission which were deleted in committee. 
Although expedited procedures are established, these provisions 
ensure that votes would not be required on unfamiliar, complex 
or far-reaching proposals without the time normally available 
for analysis and debate.

                            Committee Action

    The Committee considered S. 207 at a business meeting held 
May 22, 1997. Without objection, two technical amendments were 
made (1) to clarify the intent of the research and development 
exception to the definition of ``inequitable Federal subsidy'' 
and to make a technical change to the title of the bill; and 
(2) to clarify that Native Alaskans are included in the 
definition of Indian Tribe consistent with other Federal laws.
    Senator Brownback offered an amendment to address his 
concern and concerns raised at the hearing regarding the 
consideration of ``taxes'' as corporate subsidies. While 
witnesses at the hearing suggested considering ``taxes'' 
separately from spending programs, Senator Brownback's 
amendment proposed revenue neutrality. This would be 
accomplished by providing the Finance Committee the ability, 
during its consideration of the Commission's recommendations, 
to include reductions in revenues in the form of tax cuts in an 
amount up to the amount of any revenue increases as a result of 
the elimination of inequitable Federal subsidies. His amendment 
further provided that any revenue reductions not made by the 
bill enacting the Commission's recommendations would be 
credited to the PAYGO scorecard under deficit reduction for tax 
cuts only. After a discussion regarding the appropriateness of 
the bill directing tax cuts outside the regular budget process, 
the amendment was adopted by a vote of 8 Yeas: Thompson, 
Collins, Brownback, Cochran, Nickles, Specter, Smith, and 
Lieberman to 7 Nays: Domenici (by proxy), Bennett, Glenn, 
Levin, Akaka, Durbin, and Cleland.
    Since Senator Levin continued to have concerns related to 
the bill's fast track procedures and the limited time for 
consideration by members either in committee or on the floor, 
he offered an amendment to constrain the types of amendments 
that members would be asked to consider in committee and on the 
floor. First, his amendment made clear that committee and floor 
amendments would be in order only if they addressed 
``inequitable Federal subsidies'' as defined by section 4 of S. 
207. Second, floor amendments would be limited further either 
to amendments to strike language from the bill or amendments to 
restore an original Commission recommendation which was deleted 
by a committee. However, concern was expressed by several 
members regarding the bill's fast track procedures, and the 
amendment was adopted by a vote of 10 Yeas: Collins, Brownback, 
Domenici (by proxy), Specter, Glenn, Levin, Lieberman, Akaka, 
Durbin, and Cleland to 5 Nays: Thompson, Cochran, Nickles, 
Smith, and Bennett.
    The Committee then voted to favorably report S. 207, as 
amended, by a vote of 9 Yeas: Senators Thompson, Collins, 
Brownback, Smith, Glenn, Levin, Lieberman, Durbin, and Cleland, 
to 5 Nays: Cochran, Nickles, Specter, Bennett, and Akaka.

                    IV. Section-By-Section Analysis

Section 1. Title

    This section states the short title of the bill.

Section 2. Findings

    This Section lists Congressional findings. These state that 
some circumstances, including abuse, obsolescence, and anti-
competitiveness, can render a corporate subsidy undesirable or 
unnecessary. The findings declare that such subsidies are 
unfair to taxpayers and that Congress and the President have 
been incapable of systematically identifying and evaluating 
corporate subsidies, thus a Commission is essential to a 
comprehensive review of the problem.

Section 3. Purpose

    This section enunciates the purpose of the Act. It 
emphasizes that fairness and deliberation are key 
characteristics of the procedure set up under the bill and that 
the corporate subsidies to be targeted are those that are 
unnecessary and inequitable.

Section 4. Definition

    This section defines the corporate subsidies that the 
Commission should review. This section only defines what is an 
``inequitable Federal subsidy'' because the intent of S. 207 is 
to invite recommendations for the retention, reform or 
termination of a subsidy; and forcing the characterization of a 
subsidy as ``unnecessary'' at the outset, could mistakenly 
suggest that termination is the preferred option under this 
Act.
    The definition of an ``inequitable Federal subsidy'' as a 
payment, benefit, service, or tax advantage provided by the 
Federal Government and meeting certain criteria is meant to 
provide guidance to the agencies as they prepare their lists 
and to the Commission as it reviews the lists provided to it by 
Federal agencies and departments and as it performs its duties 
under section 5(b).
    Under Section 4(1), the Federal subsidies to be reviewed 
and subject to reform or termination are those provided to a 
``corporation, partnership, joint venture, association, or 
business trust.'' Individuals were specifically excluded from 
this list.
    Section 4(1) (A) and (B) expressly excludes organizations 
that are taxed as nonprofits, state governments, local 
governments, and Indian Tribes, including Alaska Natives.
    Section 4(4) excludes certain categories from the review of 
the Commission, as discussed earlier in this report.

Section 5. The Commission

    This section describes the duties, scope and composition of 
the Commission. Section 5(a) establishes the ``Corporate 
Subsidy Reform Commission.'' Section 5(b) outlines its duties. 
The Commission's first duty is to examine the Federal 
Government's programs and tax laws and through this process to 
identify the programs and laws that provide ``inequitable 
Federal subsidies'' as defined in Section 4.
    Section 5(b) establishes the three duties of the 
Commission. The Commission must examine the programs and tax 
laws of the federal government and identify those that provide 
inequitable federal subsidies, as defined in Section 4 of this 
Act. The Commission must review these inequitable federal 
subsidies. Then, the Commission must submit a report with 
recommendations for the subsidies' retention, reform or 
termination that the Commission is required to submit to the 
President and Congress pursuant to section 6(b).
    Section 5(c) declares that this Act is not intended to 
result in the creation of new programs or taxes, but rather to 
provide a review of existing programs and tax laws in order 
that they may be fairly and equitably utilized. The Commission 
is not permitted to recommend the termination of Federal 
agencies or departments.
    Section 5(d) states that the Commission is to be one 
pursuant to the Federal Advisory Committee Act (5 U.S.C. App.).
    Section 5(e) outlines how the Commission members and staff 
will be appointed. The Commission shall have nine members. The 
President shall appoint three; the Speaker of the House of 
Representatives shall appoint two; the Minority Leader of the 
House of Representatives shall appoint one; the Senate Majority 
Leader shall appoint two and the Senate Minority Leader shall 
appoint one. Prior to the appointment of the Commissioners, the 
President, the Speaker, the Senate Majority Leader and the 
Minority Leaders of the House of Representatives and the Senate 
are required to consult on the possible candidates for 
appointment. This is required in order to seek equitable 
representation of the various points of view needed for a fair 
examination, review and report the Commission is required to 
make under Section 5(b). Section 5(e) also provides that the 
Chairman is appointed by the President, and the subsection 
establishes the expertise that the appointees as a group are 
required to possess.
    Section 5(f) provides that each Member of the Commission is 
to serve until the termination of the Commission.
    Section 5(g) states that the Commission must conduct its 
first meeting no later than April 1, 1998. Each meeting must be 
open to the public. The Chairman may close the meeting when 
classified information, trade secrets or personnel matters are 
discussed. All proceedings, information and deliberations of 
the Commission must be available to the relevant congressional 
Committees.
    Section 5(h) provides that a vacancy on the Commission is 
to be filled in the same manner as the original appointment.
    Section 5(i) describes the rate of pay and the travel 
expenses of each Commissioner and the Chairman.
    Section 5(j) states that the Chairman is to appoint a 
Director and that the Director cannot have served on any of the 
entities or industries that are likely to be subject to the 
Commission's review. The Director must submit periodic reports 
on administrative and personnel matters to the Chairman of the 
Commission and the Committee on Governmental Affairs in the 
Senate and the Committee on Government Reform and Oversight in 
the House of Representatives.
    Section 5(k) limits the number of personnel and analysts 
that may be detailed from federal agencies that deal directly 
and indirectly with the federal subsidies the Commission 
intends to review. This subsection also limits staff size to 
25, including detailees, unless the Commission first notifies 
the Committee on Governmental Affairs in the Senate and the 
Committee on Government Reform and Oversight in the House of 
Representatives. Also, the Comptroller General of the United 
States may provide assistance to the Commission after 
consultation with Congress.
    Section 5(l) permits the Commission to procure experts and 
consultants, and, to the extent funds are available, lease 
space and acquire personal property.
    Section 5(m) authorizes the appropriation of funds to the 
Commission as are necessary for the Commission to carry out its 
duties. This subsection also authorizes such funds as are 
necessary for the Comptroller General to carry out its duties 
outlined in the Act under section 5(k) and section 6(b).

Section 6. Procedure for making recommendations to terminate corporate 
        subsidies

    This section sets forth the actions required of Federal 
departments and agencies in preparing a list of inequitable 
Federal subsidies to be submitted to the Commission for review. 
It provides specific guidance for the contents of the list to 
include (1) a detailed description of each program or tax law 
in question; (2) a statement detailing the extent to which a 
payment, benefit, service, or tax advantage meets the 
definition of ``inequitable Federal subsidy''; (3) a statement 
summarizing the legislative history and purpose of such 
payment, benefit, service, or tax advantage and the laws or 
policies directly or indirectly giving rise to the need for the 
program or tax law; and (4) a recommendation to the Commission 
for its report to the President and the Congress.
    Section 6(a)(3) sets forth a special review requirement for 
the United States Trade Representative to review and certify 
all Federally supported international trade programs in all 
Federal agencies. The Trade Representative is required to 
provide a detailed statement of the reasons a program or 
benefit is or is not specifically intended and substantially 
needed to protect the foreign trade interests of the United 
States.
    Section 6(b) Review and Recommendations by the Commission 
establishes the process for review and reporting to the 
President and Congress.
    The Commission is required to conduct public hearings on 
the agency recommendations, and the Comptroller General must 
assist the Commission and also submit a report on the agency 
and department list to the Congress and the Commission. Changes 
that add, delete or modify a payment, benefit, service, tax 
advantage on the agency and department list must be reviewed at 
a public hearing and justified on the Commission report to the 
President. This section requires the Commission to report its 
findings in detail, discussing the effect of the 
recommendations on other policies and laws. The Commission must 
submit these recommendations to the President by November 30, 
1998, and to the Congress, upon request, any time after 
submission to the President.
    Section 6(c) covers the review of the Commission's 
recommendations by the President. No later than December 31, 
1998, the President must submit a report to the Commission 
containing the President's approval or disapproval of the 
recommendations. If the President approves all recommendations, 
he is to send certification of approval to Congress along with 
the Commission, which must submit a revised list to him by 
February 1, 1999. The President must approve and certify an 
entire package of recommendations by February 15, 1999 at the 
latest; otherwise the process established under the Act is 
terminated.

Section 7. Congressional consideration

    This section provides the procedures for congressional 
review of the Commission's recommendations if forwarded by the 
President.
    Section 7(a) requires that if the President submits 
recommendations, they must be accompanied by information 
including the rationale for the recommendations and the 
estimated fiscal, economic and budgetary impact of accepting 
them.
    Section 7(b) requires the President to submit the 
recommendations on the same day to the Senate and the House of 
Representatives. If either body is not in session, delivery is 
to the Secretary of the Senate or the Clerk of the House. The 
recommendations are to be printed in the Federal Register 
following submission.
    Section 7(c) establishes the procedure for introduction of 
the recommendations as legislation. Within 14 calendar days in 
session after the recommendations are received, the Senate 
Majority Leader, or his designee, and the House Speaker, or his 
designee, must introduce a bill or bills implementing the 
Commission's recommendations. More than one bill must be 
introduced if that is necessary to ensure that all 
recommendations will be reviewed by the authorizing committee 
responsible for their implementation.
    Section 7(d) provides for committee consideration of any 
legislation introduced. It gives each respective authorizing 
committee 120 calendar days to review, modify and report on the 
bill under its jurisdiction. Section 7(d) further provides that 
no amendment will be in order unless it is confined to 
terminating or reforming an inequitable Federal subsidy as 
defined in section 4. After this period, if no action has been 
taken by the authorizing committee to report the bill, the 
committee is discharged from further consideration. Further, 
section 7(d) provides authority to the Committees on Finance 
and Ways and Means to make amendments, in any bill referred to 
such committee that contains revenue increases, to include 
reductions in revenues in the form of tax cuts in an amount up 
to the amount of the revenue increases. If such reductions in 
revenues are not made at that time, the amount of revenue 
reductions not made is credited to the pay-as-you-go scorecard 
under section 252 of the Balanced Budget and Emergency Deficit 
Control Act of 1985 for tax cuts only.
    Section 7(e) provides for the Senate and Section 7(f) 
provides for the House procedures after the time period of the 
authorizing committees has concluded. Upon reporting or 
discharge, all bills must be referred to the Senate 
Governmental Affairs Committee or the House Committee on 
Government Reform and Oversight. These committees then have no 
more than 10 calendar days in session to consolidate all bills 
into one piece of legislation and to report that bill for 
consideration in their respective bodies.
    Section 7(e) details the procedures for Senate floor 
consideration. Debate in the Senate on the bill reported by the 
Governmental Affairs Committee and all debatable motions and 
appeals, is limited to no more than 30 hours, with a one hour 
limit on amendments and a one half hour limit on second degree 
amendments. The bill further sets a five-hour limit on debate 
in the Senate on the conference report. Other fast track 
restrictions limit floor action, including a requirement that 
all amendments are (1) confined to terminating or reforming an 
inequitable Federal subsidy as defined by section 4; and (2) 
germane to the bill reported by the Governmental Affairs 
Committee, with ``germane'' meaning only amendments to strike 
language or amendments to restore recommendations made by the 
Commission which were deleted in committee.
    Section 7(f) details the procedures for consideration in 
the full House of Representatives.
    Section 7(g) clarifies that the special procedures set 
forth in the legislation for the House of Representatives and 
the Senate are in compliance with the rules of each House, and 
are subject to the Constitutional power of either House to 
change its rules.

                     v. regulatory impact statement

    Paragraph 11(b)(1) of Rule XXVI of the Standing Rules of 
the Senate requires that each report accompanying a bill 
evaluate ``the regulatory impact which would be incurred in 
carrying out the bill.''
    The creation of the Corporate Subsidy Review, Reform and 
Termination Commission would not have a significant regulatory 
impact on the public, nor would it constitute an undue 
regulatory burden on any government agency. The legislation is 
submitted to create a Commission to review a list of Federal 
subsidies put together by the Federal agencies which administer 
them, make recommendations for their retention, reform or 
termination, and to report to the President and Congress with 
those recommendations. The legislation also provides procedures 
for the disposition of these recommendations by the President 
and Congress.

                         vi. cbo cost estimate

                                     U.S. Congress,
                               Congressional Budget Office,
                                     Washington, DC, June 16, 1997.
Hon. Fred Thompson,
Chairman, Committee on Governmental Affairs, U.S. Senate, Washington, 
        DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for S. 207, the Corporate 
Subsidy Reform Commission Act of 1997.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is John R. 
Righter.
            Sincerely,
                                         June E. O'Neill, Director.
    Enclosure.

S. 207--Corporate Subsidy Reform Commission Act of 1997

    S. 207 would create a nine-member commission to review and 
make recommendations on existing payments, benefits, services, 
or tax advantages provided by the federal government to 
businesses. The bill would exclude from review certain 
subsidies, including those that benefit or support certain 
forms of research and development, public health and safety, 
the environment, education, and foreign trade.
    Assuming appropriation of the necessary funds, CBO 
estimates that implementing S. 207 would cost federal agencies 
about $6 million over fiscal years 1998 and 1999. Enacting this 
legislation could lead to the reform or elimination of existing 
subsidies to businesses, and ultimately to significant savings 
to the federal government. However, because any change in 
existing subsidies would depend on future legislation, S. 207 
would have no direct budgetary impact aside from the agency 
operating costs mentioned above. The bill would not affect 
direct spending or receipts; therefore, pay-as-you-go 
procedures would not apply.
    S. 207 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act of 1995 
and would have no impact on the budgets of state, local, or 
tribal governments.
    The bill would require each agency to identify, in its 
budget justifications for fiscal year 1999, all programs or tax 
laws that the agency determines provide an inequitable subsidy. 
As part of that process, the bill would require the Office of 
the United States Trade Representative to review all foreign 
trade programs and to certify which programs are necessary to 
protect foreign trade programs and to certify which programs 
are necessary to protect foreign trade interests. By November 
30, 1998, the commission established by S. 207 would be 
required to submit its recommendations for reform or 
termination to the President, who would then have one month to 
accept or reject the commission's report. If the President 
rejects the report, the commission would have until February 1, 
1999, to submit a revised list of recommendations. If the 
President does not accept the revised list within 15 days, the 
review and reform process would terminate. If the President 
approves either the first list or a revised list of 
recommendations, the Congress would consider a bill or bills 
implementing those recommendations under procedures delineated 
in S. 207. The commission would terminate on September 1, 1999.
    Commissioners would be paid for time spent performing 
commission business, as well as for any travel expenses. S. 207 
would allow the commission to hire a staff director and up to 
24 additional staffers. The bill would authorize the 
appropriation of such sums as may be necessary for the 
commission. CBO estimates that implementing S. 207 would cost 
the federal government about $6 million over fiscal years 1998 
and 1999, assuming appropriation of the necessary amounts. Of 
that total, CBO estimates that the commission would cost about 
$5 million for 18 months of operation. In addition, we estimate 
that other federal agencies would incur about $0.5 million in 
costs in each of fiscal years 1998 and 1999 to comply with the 
bill's requirements. The estimated costs are based on the 
bill's provisions for pay and travel and on costs of other 
federal commissions.
    The CBO staff contact for this estimate is John R. Righter. 
This estimate was approved by Robert A. Sunshine, Deputy 
Assistant Director for Budget Analysis.

                     VII. administration statement

                 Executive Office of the President,
                           Office of Management and Budget,
                                 Washington, DC, February 27, 1997.
Hon. Fred Thompson,
Committee on Governmental Affairs,
U.S. Senate, Washington, DC.
    Dear Chairman Thompson: I appreciate your providing 
additional time to respond to the request for views on S. 207, 
a bill to establish a Corporate Subsidy Reform Commission. I am 
pleased to respond.
    The stated purpose of S. 207, as introduced by Sen. McCain, 
is ``to establish a fair and deliberative process that will 
result in the timely identification, review, and reform or 
elimination of unnecessary and inequitable subsidies, including 
tax advantages, provided by the Federal Government to entities 
or industries engaged in profitmaking enterprises.'' The 
legislation:
          establishes from Jan. '98 through Sep. '99 an 
        independent 9-member Corporate Subsidy Reform 
        Commission, with 3 commissioners appointed by the 
        President--one as Chairman--and 6 appointed by Congress 
        (4 appointed by the Majority and 2 by the Minority);
          authorizes the Commission to appoint 25 staff, with 
        up to one-third agency detailees and authorizes 
        appropriation of such funds as are necessary;
          defines ``inequitable Federal subsidy'' as a payment, 
        benefit, service, or tax advantage that is provided by 
        the Federal Government to any for-profit business, 
        which provides an unfair competitive advantage or 
        financial windfall without expectation of a public 
        benefit commensurate with the subsidy (there are 
        certain exceptions to this definition provided for R&D, 
        health and safety, education, trade interests, federal 
        procurement and treaty obligations);
          requires Federal departments and agencies to submit 
        to the Commission lists of ``inequitable Federal 
        subsidies'' in their jurisdiction, together with 
        recommendations regarding reforms or elimination of the 
        subsidies;
          permits the Commission to change the departmental 
        recommendations only when they ``deviate 
        substantially'' from the statutory definition of 
        inequitable Federal subsidy;
          requires the Commission to submit a report to the 
        President by Nov. 30, 1998 containing recommendations 
        for ``termination, modification, or retention of each 
        of the inequitable Federal subsidies reviewed by the 
        Commission'';
          requires the President, by December 31, 1998, to 
        submit the Commission's recommendations to Congress, if 
        the President approves all of the recommendations; or 
        to send the recommendations back to the Commission for 
        revision and subsequent transmittal to the Congress--
        but if the President does not approve the entire 
        package of recommendations or revisions, the process 
        terminates;
          if the President approves and submits the entire 
        package of Commission recommendations to the Congress, 
        the Congress would be required to consider the 
        recommendations on a legislative fast-track (i.e. 
        mandatory introduction and reporting of implementing 
        legislation, with debate and amendment limitations 
        during floor consideration--similar to Budget 
        Reconciliation).
    The Administration joins the sponsors of this legislation 
in strongly supporting the elimination of corporate subsidies 
and tax advantages which no longer serve a clear and compelling 
public interest. Addressing these issues is an important 
component of our efforts to balance the Federal budget by 2002, 
focus resources on growth-enhancing and other priority 
programs, and sustain the efficacy and fairness of our 
government.
    We believe the most effective and expeditious way to 
address the issue of corporate subsidies and unwarranted tax 
advantages is in the context of a normal budget and legislative 
process--in particular, this year's budget negotiations. The 
President's FY 1998 budget, transmitted to the Congress on 
February 6, 1997, includes provisions to reform or repeal 
unwarranted tax benefits that would save more than $34 billion 
over five years. I have provided, as an attachment to this 
letter, a summary of the provisions.
    We would be pleased to discuss these proposals with you in 
greater detail, as well as other approaches which might be 
helpful in achieving our common objectives. I have attached, 
for your information, a few preliminary technical comments on 
S. 207 prepared by OMB staff.
            Sincerely,
                                      Franklin D. Raines, Director.
    Attachment.

Summary of administration proposals related to unwarranted provisions

    The Administration's receipts proposals related to 
unwarranted benefits fall into five major groups, as discussed 
below: (1) reducing loopholes associated with financial 
instruments and modifying certain business tax provisions; (2) 
reducing tax preferences involving international trade; (3) 
extending and accelerating collection of certain taxes; (4) 
repealing certain special benefits for specific sectors 
(agriculture, oil and gas, and insurance companies); and (5) 
certain compliance-related provisions. The Administration's 
proposals, some of which are described below, would save more 
than $34 billion over five years.

1. Financial instrument and other corporate provisions: $15.5 billion 
        over 1998-2002

    Requiring use of average-cost basis for stocks and other 
securities (would eliminate specific identification of shares 
or use of first-in, first-out or last-in, first-out accounting 
when securities are substantially identical): $3 billion.
    Modifying loss carryback and carryforward rules (reducing 
carryback period on net operating losses, but increasing the 
carry-forward period): $2.9 billion.
    Reforming inventory accounting (would eliminate some 
accounting options that are currently available): $2.4 billion.
    Reducing and otherwise changing the dividends received 
deduction for corporations (corporations generally can deduct 
much of the dividends received from stock that they own; this 
would be reduced and, for certain preferred stock, eliminated): 
$2 billion.
    Requiring reasonable payment assumptions for interest 
accruals on certain debt instruments: $1.1 billion.
    Other provisions address techniques for manipulating debt 
and equity distinctions for tax advantage, address treatment of 
stock transfers in reorganizations and other transactions; 
require gain recognition for certain extraordinary dividends; 
and extend the disallowance of certain interest deductions when 
corporations purchase tax-exempt debt.

2. International tax provisions: $9 billion (or more, if certain items 
        classified elsewhere are included) over 1998-2002

    Replacing sales source rules (which currently allow 50 
percent of income to be attributed to the location where the 
title transfers--i.e., abroad) with activity based rules (i.e., 
rules that consider the actual location of the economic 
activity generating the income): $7.5 billion. Treasury 
estimated for a Congressionally mandated study that the 
provisions directly increased exports by less than $1 for each 
$1 of Federal revenue loss; moreover, Treasury noted that even 
this increase in exports would likely be offset by increased 
imports (Report to The Congress on The Sales Source Rules, 
January 13, 1993, p. 2).
    Reducing carrybacks of foreign tax credit and extending 
carryforward: $1.2 billion.

3. Extensions and related provisions: $7.2 billion over 1998-2002

    Most of this revenue is from extending the Federal 
Unemployment Tax Act (FUTA) surtax: $4.7 billion.
    Accelerating deposit of unemployment insurances taxes: $1.3 
billion.
    Extending the oil spill excise tax: $1.1 billion.

4. Repeal of Sector-specific benefits: $2.2 billion over 1998-2002

    Phasing out preferential tax deferral for certain larger 
farm corporations: $0.6 billion.
    Repealing percentage depletion for non-fuel minerals mined 
on Federal and formerly Federal lands (these minerals were 
initially provided under the 1872 mining act; firms would still 
be allowed to claim cost depletion, which is similar to 
depreciation claimed on most other investments): $0.5 billion.
    Limiting the extension of the tax credit for producing fuel 
from a nonconventional source (the credit date was recently 
extended by the Small Business Job Protection Act; the proposal 
would repeal most of this extension): $0.5 billion.

5. Compliance-related provisions: $0.5 billion over 1998-2002

    Provisions would tighten penalties for substantial 
understatement of taxes by large corporations require reporting 
of payments to corporations rendering services to Federal 
agencies; increase penalties for failure to file correct 
information returns; repeal the withholding exemption for 
winnings over $5,000 from bingo and keno; require registration 
of certain corporate tax shelters; and require tax reporting 
for payments to attorneys.

OMB Staff: Preliminary technical comments on S. 207

    The bill limits the President to making nominations within 
a one-month period. It is very rare to have: a time limit; and 
legal consequences (in this case, termination of the law) for 
failure of the President to submit nominations within the 
indicated period.
    Six of nine Commission members are appointed by Members of 
Congress, making the Commission essentially a legislative 
entity.
    The bill restricts executive branch details to the 
Commission without similarly restricting GAO detailees. GAO is 
authorized to assist the Commission. GAO and the Commission are 
to consult with certain committees prior to entering into an 
agreement to assist or provide detailees to the commission. 
Another provision requires GAO to report on the agency 
recommendations made to the Commission. These provisions 
collectively make the proposed Commission unusually close to 
GAO and the legislative branch.
    For staff on detail, there is a prohibition on evaluating 
the performance of these employees. This could result in having 
no basis for giving an annual performance rating to an employee 
that could disadvantage the employee in future RIFs where 
performance ratings partially determine retention standing.
    The President must accept or reject the Commission's 
recommendations in their entirety. Congress, however, does not 
have to do so.
    USTR is given sole authority, under the definition of 
``inequitable Federal subsidy,'' to certify that a provision is 
exempt from review because it is ``substantially needed to 
protect the foreign trade interests of the United States.'' 
There needs to be a discussion about whether it would be 
appropriate for such authority to reside solely at USTR, given 
the Commerce and Treasury Department's interests in trade 
matters.

              VIII. ADDITIONAL VIEWS OF SENATOR JOHN GLENN

    I support S. 207, the Corporate Subsidy Reform Commission 
Act, legislation of which I am proud to be an original 
cosponsor. Unfortunately, an objectionable amendment was added 
in markup which should be stripped out prior to Senate passage 
of the underlying bill.
    We are moving to a balanced budget. That movement will 
necessitate some level of reduction in social and entitlement 
spending, a reduction that will primarily impact middle and 
lower income Americans. However, as a matter of equity, they 
should not be the only ones bearing the brunt. Corporations and 
other entities that benefit from Federal tax and spending 
policies should also contribute toward restoring fiscal 
soundness in our government. That's only fair. Furthermore, 
many of these subsidies create distortions in the marketplace, 
resulting in unfair competition and higher prices for 
consumers. Those are two other good reasons for examining these 
practices.
    I know Senator McCain, the bill's lead sponsor, has tried 
to tackle some of these subsidies in the legislative process in 
the past, only to rebuffed by a phalanx of opposition. He has 
run into the adage of ``one man's pork is another man's bread 
and butter''--a phrase that I will admit to being on both sides 
of during my 23 years in the Senate. So I agree with him that 
the commission approach is about the only way to build up the 
analysis and support needed to eliminate or reform unfair 
corporate subsidies.
    Last year, we negotiated some useful changes to the bill. 
The commission's scope has been narrowed to focus on the more 
egregious subsidies; requirements have been added for economic 
analysis; and the expedited process for congressional 
consideration of the commission's recommendations has been 
lengthened and opened to amendment. Several improvements were 
added in markup that further improved the bill.
    But I would like to note my concern with the passage of the 
Brownback Amendment concerning the treatment of revenues. This 
amendment would automatically ``wall off'' any revenue gains 
from the elimination of unfair corporate subsidies to be used 
strictly for tax cuts. This is a deviation from normal budget 
procedures, where, through a considered process in the 
Congress, Federal revenues are allocated in an appropriate mix 
between appropriations, entitlements, tax cuts, and deficit 
reduction that must fit under overall budgetary caps. It should 
be noted that during the floor debate this year on budget 
reconciliation a similar amendment was offered and debated. 
That amendment directed that new revenue surpluses in excess of 
previously-made budget estimates only be spent on tax cuts. 
That amendment was rejected by the Senate; this one should be 
also.
                                                        John Glenn.

                      IX. CHANGES TO EXISTING LAW

    There are no modifications of existing law. The full text 
of the bill is new language as follows:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Corporate Subsidy Reform 
Commission Act of 1997''.

SEC. 2. FINDINGS.

  The Congress finds that--
          (1) Federal subsidies, including tax advantages, 
        which may have been enacted with a valid purpose for 
        specific industries or industry segments can--
                  (A) fall subject to abuse, causing 
                unanticipated and unjustified windfalls to some 
                industries and industry segments; or
                  (B) become obsolete, anticompetitive, or no 
                longer in the public interest, making such 
                subsidies unnecessary or undesired;
          (2) it is unfair to force the United States taxpayer 
        to support unnecessary subsidies, including tax 
        advantages, that do not provide a substantial public 
        benefit or serve the public interest;
          (3) the Congress and the President have been unable 
        to evaluate methodically those Federal subsidies that 
        are unfair and unnecessary and require reform or 
        elimination; and
          (4) a Commission to advise the President and Congress 
        is essential to a comprehensive review of such unfair 
        corporate subsidies and to the reform or elimination of 
        such subsidies.

SEC. 3. PURPOSE.

  The purpose of this Act is to establish a fair and 
deliberative process that will result in the timely 
identification, review, and reform or elimination of 
unnecessary and inequitable subsidies, including tax 
advantages, provided by the Federal Government to entities or 
industries engaged in profitmaking enterprises.

SEC. 4. DEFINITION.

  For purposes of this Act, the term ``inequitable Federal 
subsidy'' means a payment, benefit, service, or tax advantage 
that--
          (1) is provided by the Federal Government to any 
        corporation, partnership, joint venture, association, 
        or business trust, not to include--
                  (A) a nonprofit organization described under 
                section 501(c)(3) of the Internal Revenue Code 
                of 1986 that is exempt from taxation under 
                section 501(a) of the Internal Revenue Code of 
                1986; or
                  (B) a State or local government or Indian 
                Tribe or Alaska Native village or regional or 
                village corporation as defined in or 
                established pursuant to the Alaska Native 
                Claims Settlement Act (43 U.S.C. 1601 et seq.);
          (2) is provided without a reasonable expectation, 
        demonstrated with the use of reliable performance 
        criteria, that actions or activities undertaken or 
        performed in return for such payment, benefit, service, 
        or tax advantage would result in a return or benefit, 
        quantifiable or nonquantifiable, to the public at least 
        as great as the payment, benefit, service, or tax 
        advantage;
          (3) provides an unfair competitive advantage or 
        financial windfall; and
          (4) shall not include a payment, benefit, service, or 
        tax advantage that--
                  (A) is awarded for the purposes of research 
                and development that--
                          (i) is in the broad public interest 
                        on the basis of a peer reviewed or 
                        other open, competitive, merit-based 
                        procedure;
                          (ii) is for a purpose consistent with 
                        the mission of the agency;
                          (iii) supports competing technologies 
                        at levels appropriate to their 
                        potential, as determined by an 
                        appropriate priority setting process; 
                        and
                          (iv) the private sector cannot 
                        reasonably be expected to undertake 
                        without Federal support at a level or 
                        in a timeframe consistent with the 
                        payment, benefit, service, or tax 
                        advantage's potential to provide broad 
                        economic or other public benefit;
                  (B) primarily benefits public health, safety, 
                the environment, or education;
                  (C) is necessary to comply with international 
                trade or treaty obligations;
                  (D) is certified by the United States Trade 
                Representative as specifically intended and as 
                substantially needed to protect the foreign 
                trade interests of the United States; or
                  (E) is for the purpose of procurement of 
                property or services by the United States 
                Government.

SEC. 5. THE COMMISSION.

  (a) Establishment.--There is established an independent 
commission to be known as the ``Corporate Subsidy Reform 
Commission'' (hereafter in this Act, referred to as the 
``Commission'').
  (b) Duties.--The Commission shall--
          (1) examine the programs and tax laws of the Federal 
        Government and identify programs and tax laws that 
        provide inequitable Federal subsidies;
          (2) review inequitable Federal subsidies; and
          (3) submit the report required under section 6(b) to 
        the President and the Congress.
  (c) Limitations.--
          (1) Creation of new programs or taxes.--This Act is 
        not intended to result in the creation of new programs 
        or taxes, and the Commission established in this 
        section shall limit its activities to reviewing 
        existing programs or tax laws with the goal of ensuring 
        fairness and equity in the operation and application 
        thereof.
          (2) Elimination of agencies and departments.--The 
        Commission shall limit its recommendations to the 
        termination or reform of payments, benefits, services, 
        or tax advantages, rather than the termination of 
        Federal agencies or departments.
  (d) Advisory Committee.--The Commission shall be considered 
an advisory committee within the meaning of the Federal 
Advisory Committee Act (5 U.S.C. App.).
  (e) Appointment.--
          (1) Members.--The Commissioners shall be appointed 
        for the life of the Commission and shall be composed of 
        nine members of whom--
                  (A) three shall be appointed by the President 
                of the United States;
                  (B) two shall be appointed by the Speaker of 
                the House of Representatives;
                  (C) one shall be appointed by the minority 
                Leader of the House of Representatives;
                  (D) two shall be appointed by the majority 
                Leader of the Senate; and
                  (E) one shall be appointed by the minority 
                Leader of the Senate.
          (2) Consultation required.--The President, the 
        Speaker of the House of Representatives, the minority 
        leader of the House of Representatives, the majority 
        leader of the Senate, and the minority leader of the 
        Senate shall consult among themselves prior to the 
        appointment of the members of the Commission in order 
        to achieve, to the maximum extent possible, fair and 
        equitable representation of various points of view with 
        respect to the matters to be studied by the Commission 
        under subsection (b).
          (3) Appointments.--During the period of January 1, 
        1998 through January 31, 1998, the President shall 
        submit to the Senate the names of three individuals for 
        appointment to the Commission.
          (4) Failure to appoint.--If the President does not 
        submit to Congress the names of three individuals for 
        appointment to the Commission on or before the date 
        specified in paragraph (3), the process established 
        under this Act shall be terminated.
          (5) Chairman.--At the time the President nominates 
        individuals for appointment to the Commission the 
        President shall designate one such individual who shall 
        serve as Chairman of the Commission.
          (6) Background.--The members shall represent a broad 
        array of expertise covering, to theextent practical, 
all subject matter, programs, and tax laws the Commission is likely to 
review.
  (f) Terms.--Each member of the Commission including the 
Chairman shall serve until the termination of the Commission.
  (g) Meetings.--
          (1) Initial meeting.--No later than April 1, 1998, 
        the Commission shall conduct its first meeting.
          (2) Open meetings.--Each meeting of the Commission 
        shall be open to the public. In cases where classified 
        information, trade secrets, or personnel matters are 
        discussed, the Chairman may close the meeting. All 
        proceedings, information, and deliberations of the 
        Commission shall be available, upon request, to the 
        chairman and ranking member of the relevant committees 
        of Congress.
  (h) Vacancies.--A vacancy on the Commission shall be filled 
in the same manner as the original appointment.
  (i) Pay and Travel Expenses.--
          (1) Pay.--Notwithstanding section 7 of the Federal 
        Advisory Committee Act (5 U.S.C. App.), each 
        Commissioner, other than the Chairman, shall be paid at 
        a rate equal to the daily equivalent of the minimum 
        annual rate of basic pay for level IV of the Executive 
        Schedule under section 5315 of title 5, United States 
        Code, for each day (including travel time) during which 
        the member is engaged in the actual performance of 
        duties vested in the Commission.
          (2) Chairman.--Notwithstanding section 7 of the 
        Federal Advisory Committee Act (5 U.S.C. App.), the 
        Chairman shall be paid for each day referred to in 
        paragraph (1) at a rate equal to the daily payment of 
        the minimum annual rate of basic pay payable for level 
        III of the Executive Schedule under section 5314 of 
        title 5, United States Code.
          (3) Travel expenses.--Members shall receive travel 
        expenses, including per diem in lieu of subsistence, in 
        accordance with section 5702 and 5703 of title 5, 
        United States Code.
  (j) Director of Staff.--
          (1) Qualifications.--The Chairman shall appoint a 
        Director who has not served in any of the entities or 
        industries that the Commission intends to review during 
        the 12 months preceding the date of such appointment.
          (2) Pay.--Notwithstanding section 7 of the Federal 
        Advisory Committee Act (5 U.S.C. App.), the Director 
        shall be paid at the rate of basic pay payable for 
        level IV of the Executive Schedule under section 5315 
        of title 5, United States Code.
          (3) Reports.--On administrative and personnel 
        matters, the Director shall submit periodic reports to 
        the Chairman of the Commission and the chairman and 
        ranking member of the Committee on Governmental Affairs 
        of the Senate and the Committee on Government Reform 
        and Oversight of the House of the Representatives.
  (k) Staff.--
          (1) Additional personnel.--Subject to paragraphs (2) 
        and (4), the Director, with the approval of the 
        Commission, may appoint and fix the pay of additional 
        personnel.
          (2) Appointments.--The Director may make such 
        appointments without regard to the provisions of title 
        5, United States Code, governing appointments in the 
        competitive service, and any personnel so appointed may 
        be paid without regard to the provisions of chapter 51 
        and subchapter III of chapter 53 of that title relating 
        to classification and General Schedule pay rates.
          (3) Detailees.--Upon the request of the Director, the 
        head of any Federal department or agency may detail any 
        of the personnel of that department or agency to the 
        Commission to assist the Commission in accordance with 
        an agreement entered into with the Commission.
          (4) Restrictions on personnel and detailees.--The 
        following restrictions shall apply to personnel and 
        detailees of the Commission:
                  (A) Personnel.--No more than one-third of the 
                personnel detailed to the Commission may be on 
                detail from Federal agencies that deal directly 
                or indirectly with the Federal subsidies the 
                Commission intends to review.
                  (B) Analysts.--No more than one-fifth of the 
                professional analysts of the Commission may be 
                persons detailed from a Federal agency that 
                deals directly or indirectly with the Federal 
                subsidies the Commission intends to review.
                  (C) Lead analyst.--No person detailed from a 
                Federal agency to the Commission may be 
                assigned as the lead professional analyst with 
                respect to an entity or industry the Commission 
                intends to review if the person has been 
                involved in regulatory or policy-making 
                decisions affecting any such entity or industry 
                in the 12 months preceding such assignment.
                  (D) Detailee.--A person may not be detailed 
                from a Federal agency to the Commission if, 
                within 12 months before the detail is to begin, 
                that person participated personally and 
                substantially in any matter within that 
                particular agency concerning the preparation of 
                recommendations under this Act.
                  (E) Federal officer or employee.--No member 
                of a Federal agency, and no officer or employee 
                of a Federal agency, may--
                          (i) prepare any report concerning the 
                        effectiveness, fitness, or efficiency 
                        of the performance on the staff of the 
                        Commission of any person detailed from 
                        a Federal agency to that staff;
                          (ii) review the preparation of such 
                        report; or
                          (iii) approve or disapprove such a 
                        report.
                  (F) Limitation on staff size.--(i) Subject to 
                clause (ii), there may not be more than 25 
                persons (including any detailees) on the staff 
                at any time.
                  (ii) The Commission may increase personnel in 
                excess of the limitation under clause (i), 15 
                days after submitting notification of such 
                increase to the Committee on Governmental 
                Affairs of the Senate and the Committee on 
                Government Reform and Oversight of the House of 
                Representatives.
                  (G) Limitation on federal officer.--No member 
                of a Federal agency and no employee of a 
                Federal agency may serve as a Commissioner or 
                as a paid member of the staff.
          (5) Assistance.--
                  (A) In general.--The Comptroller General of 
                the United States may provide assistance, 
                including the detailing of employees, to the 
                Commission in accordance with an agreement 
                entered into with the Commission.
                  (B) Consultation.--The Commission and the 
                Comptroller General of the United States shall 
                consult with the Committee on Governmental 
                Affairs of the Senate and the Committee on 
                Government Reform and Oversight of the House of 
                Representatives on the agreement referred to 
                under subparagraph (A) before entering into 
                such agreement.
  (l) Other Authority.--
          (1) Experts and consultants.--The Commission may 
        procure by contract, to the extent funds are available, 
        the temporary or intermittent services of experts or 
        consultants pursuant to section 3109 of title 5, United 
        States Code.
          (2) Leasing.--The Commission may lease space and 
        acquire personal property to the extent that funds are 
        available.
  (m) Funding.--
          (1) Commission.--There are authorized to be 
        appropriated to the Commission such funds as are 
        necessary to carry out its duties under this Act.
          (2) Comptroller general.--There are authorized to be 
        appropriated to the Comptroller General of the United 
        States such funds as are necessary to carry out its 
        duties under subsection (k)(5) and section 6(b)(5).
  (n) Termination.--The Commission shall terminate on September 
1, 1999.

SEC. 6. PROCEDURE FOR MAKING RECOMMENDATIONS TO TERMINATE CORPORATE 
                    SUBSIDIES.

  (a) Agency Plan.--
          (1) In general.--No later than April 1, 1998, or the 
        date budget documents are submitted to Congress in 
        1998, whichever is earlier, in support of the budget of 
        each Federal department or agency, the head of each 
        department or agency shall include in such documents a 
        list identifying all programs or tax laws within that 
        department or agency that the head of the department or 
        agency determines provide inequitable Federal 
        subsidies.
          (2) Contents.--Such a list shall include--
                  (A) a detailed description of each program or 
                tax law in question;
                  (B) a statement detailing the extent to which 
                a payment, benefit, service, or tax advantage 
                meets the provisions of section 4;
                  (C) a statement summarizing the legislative 
                history and purpose of such payment, benefit, 
                service, or tax advantage, and the laws or 
                policies directly or indirectly giving rise to 
                the need for such programs or tax laws; and
                  (D) a recommendation to the Commission 
                regarding actions to be taken under section 
                5(b)(3).
          (3) International trade programs.--As part of its 
        agency plan submitted pursuant to this subsection, the 
        United States Trade Representative shall survey all 
        federally supported international trade programs in all 
        Federal agencies and shall certify to the Commission 
        which of those programs meet the requirements of 
        section 4(4)(D). The Trade Representative shall provide 
        the Commission a detailed statement of the reasons each 
        program was or was not so certified as part of its 
        agency plan.
  (b) Review and Recommendations by the Commission.--
          (1) Review and hearings.--At any time after the 
        submission of the budget documents to Congress, the 
        Commission shall conduct public hearings on the 
        recommendations included in the lists required under 
        subsection (a). All testimony before the Commission at 
        a public hearing conducted under this paragraph shall 
        be presented under oath.
          (2) Report of commission.--
                  (A) Report to president.--No later than 
                November 30, 1998, the Commission shall submit 
                a report to the President containing the 
                Commission's findings and recommendations for 
                termination, modification, or retention of each 
                of the inequitable Federal subsidies reviewed 
                by the Commission. Such findings and 
                recommendations shall specify--
                          (i) all actions, circumstances, and 
                        considerations relating to or bearing 
                        upon the recommendations; and
                          (ii) to the maximum extent 
                        practicable, the estimated effect of 
                        the recommendations upon the policies, 
                        laws and programs directly or 
                        indirectly affected by the 
                        recommendations.
                  (B) Changes in recommendations.--Subject to 
                the deadline in subparagraph (A), in making its 
                recommendations, the Commission may make 
                changes in any of the recommendations made by a 
                department or agency if the Commission 
                determines that such department or agency 
                deviated substantially from the provisions of 
                section 4.
                  (C) Changes.--In the case of a change in the 
                recommendations made by a department or agency, 
                the Commission may make the change only if the 
                Commission--
                          (i) makes the determination required 
                        under subparagraph (B); and
                          (ii) conducts a public hearing on the 
                        Commission's proposed changes.
                  (D) Application.--Subparagraph (C) shall 
                apply to a change by the Commission in a 
                department or agency recommendation that 
                would--
                          (i) add or delete a payment, benefit, 
                        service, or tax advantage to the list 
                        recommended for termination;
                          (ii) add or delete a payment, 
                        benefit, service, or tax advantage to 
                        the list recommended for modification; 
                        or
                          (iii) increase or decrease the extent 
                        of a recommendation to modify a 
                        payment, benefit, service, or tax 
                        advantage included in a department's or 
                        agency's recommendation.
          (3) Justification.--The Commission shall explain and 
        justify in the report submitted to the President under 
        paragraph (2) any recommendation made by the Commission 
        that is different from a recommendation made by an 
        agency under subsection (a).
          (4) Report to congress.--After November 30, 1998, or 
        after the date the Commission submits recommendations 
        to the President, the Commission shall, upon request, 
        promptly provide to any Member of Congress the 
        information used by the Commission in making its 
        recommendations.
          (5) Comptroller general.--The Comptroller General of 
        the United States shall--
                  (A) assist the Commission, to the extent 
                requested, in the Commission's review and 
                analysis of the list, statements, and 
                recommendations made by departments and 
                agencies under subsection (a); and
                  (B) no later than 60 days after April 1, 
                1998, or the public release of the President's 
                budget documents in 1998, whichever is earlier, 
                submit to the Congress and to the Commission a 
                report containing a detailed analysis of the 
                list, statements, and recommendations of each 
                department or agency.
  (c) Review by the President.--
          (1) In general.--No later than December 31, 1998, the 
        President shall submit a report to the Commission and 
        to the Congress containing the President's approval or 
        disapproval of the Commission's recommendations 
        submitted under subsection (b).
          (2) Approval.--If the President approves all the 
        recommendations of the Commission, the President shall 
        submit a copy of such recommendations to the Congress, 
        together with a certification of such approval.
          (3) Disapproval.--If the President disapproves the 
        recommendations of the Commission in whole or in part, 
        the President shall submit to the Commission and the 
        Congress the reasons for that disapproval. No later 
        than February 1, 1999, the Commission shall submit to 
        the President a revised list of recommendations.
          (4) Revision.--If the President approves all of the 
        revised recommendations of the Commission submitted to 
        the President under paragraph (3), the President shall 
        submit a copy of such revised recommendations to the 
        Congress, together with a certification of such 
        approval.
          (5) Approval of entire package.--The President may 
        only submit an approval certificate that pertains to 
        the entire package of recommendations submitted by the 
        Commission under subsection (b)(2) or paragraph (3) of 
        this subsection.
          (6) Failure to submit.--If the President does not 
        submit to the Congress an approval and certification 
        described in paragraph (2) or (4) byFebruary 15, 1999, 
the process established under this Act shall be terminated.

 SEC. 7. CONGRESSIONAL CONSIDERATION.

  (a) Submission of Recommendations of the President.--If the 
President submits the Commission recommendations to the 
Congress under section 6(c) (2) or (4), such recommendations 
shall be accompanied by information specifying--
          (1) the reasons and justifications for the 
        recommendations;
          (2) to the maximum extent practicable, the estimated 
        fiscal, economic, and budgetary impact of accepting the 
        recommendations;
          (3) the amount of the projected savings resulting 
        from each recommendation;
          (4) all actions, circumstances, and considerations 
        relating to or bearing upon the recommendations and to 
        the maximum extent practicable, the estimated effect of 
        the recommendations upon the policies, laws and 
        programs directly or indirectly affected by the 
        recommendations; and
          (5) the specific changes in Federal statute necessary 
        to implement the recommendations.
  (b) Submission of Recommendations to the Senate and House of 
Representatives.--
          (1) Submission to congress.--The recommendations 
        submitted by the President to the Congress under 
        subsection (a) shall be submitted to the Senate and the 
        House of Representatives on the same day, and shall be 
        delivered to the Secretary of the Senate if the Senate 
        is not in session, and to the Clerk of the House of the 
        Representatives if the House is not in session.
          (2) Federal register.--Any recommendations and 
        accompanying information submitted under subsection (a) 
        shall be printed in the first issue of the Federal 
        Register after such submission.
  (c) Introduction.--
          (1) Date of introduction.--The Majority Leader of the 
        Senate or his designee, and the Speaker of the House of 
        Representatives, or his designee, shall introduce a 
        bill (or bills as provided under paragraph (2)) that 
        implements the recommendations submitted by the 
        President under subsection (a), no later than the later 
        of 14 calendar days in session after the date on 
        which--
                  (A) the Senate or the House of 
                Representatives received the recommendations 
                submitted by the President under subsection 
                (a), if the Senate or the House of 
                Representatives (as applicable) is in session 
                on the date of such submission; or
                  (B) the Senate or the House of 
                Representatives is first in session after such 
                recommendations are submitted, if the Senate or 
                the House of Representatives (as applicable) is 
                not in session on the date of such submission.
          (2) Multiple bills.--The majority leader of the 
        Senate, or his designee, or the Speaker of the House of 
        Representatives, or his designee, shall introduce a 
        bill or separate bills ensuring that all such 
        recommendations will be implemented.
  (d) Committee Referral and Action.--
          (1) In general.--
                  (A) In general.--Any committee to which a 
                bill or bills introduced under subsection (c) 
                is referred shall report such bill no later 
                than 120 calendar days after the date of 
                referral. No amendment during committee 
                consideration of a bill or bills introduced 
                under subsection (c) shall be in order unless 
                that amendment is confined to terminating or 
                reforming an inequitable Federal subsidy as 
                defined in section 4 of this Act. Any such 
                reported bill shall be referred to the 
                Committee on Governmental Affairs of the Senate 
                or the Committee on Government Reform and 
                Oversight of the House of Representatives, as 
                applicable.
                  (B) Committees on finance and ways and 
                means.--
                          (i) In general.--Any bill referred to 
                        the Committee on Finance or the 
                        Committee on Ways and Means that 
                        contains revenue increases may be 
                        amended to include reductions in 
                        revenues in the form of tax cuts in an 
                        amount up to the amount of the revenue 
                        increases.
                          (ii) Scorecard.--If the bill referred 
                        to in clause (i) is enacted into law, 
                        any amount of revenue reductions not 
                        made by the bill as provided in clause 
                        (i) shall be credited to the pay-as-
                        you-go scorecard under section 252 of 
                        the Balanced Budget and Emergency 
                        Deficit Control Act of 1985 and may 
                        only be offset by legislation reducing 
                        revenues.
          (2) Discharge.--If a committee does not report a bill 
        within the 120-day period as provided under paragraph 
        (1), such bill shall be discharged from the committee 
        and referred to the Committeeon Governmental Affairs of 
the Senate or the Committee on Government Reform and Oversight of the 
House of Representatives, as applicable.
          (3) Report to floor; consolidation.--
                  (A) In general.--No later than the first day 
                the Senate or the House of Representatives (as 
                applicable) is in session following 10 calendar 
                days in session after the end of the 120-day 
                period described under paragraphs (1) and (2), 
                the Committee on Governmental Affairs of the 
                Senate and the Committee on Government Reform 
                and Oversight of the House of Representatives, 
                as applicable, shall--
                          (i) consolidate all bills referred 
                        under paragraphs (1) and (2) into a 
                        single bill (without substantive 
                        amendment) and report such bill to the 
                        Senate or the House of Representatives; 
                        or
                          (ii) if only 1 bill is referred under 
                        paragraph (1) or (2), report such bill 
                        (without amendment) to the Senate or 
                        House of Representatives.
                  (B) Legislative calendar.--The bill reported 
                under subparagraph (A) shall be placed on the 
                legislative calendar of the appropriate House.
  (e) Procedure in Senate After Report of Committee; Debate; 
Amendments.--
          (1) Debate on bill.--Debate in the Senate on a bill 
        reported by the Committee on Governmental Affairs under 
        subsection (d)(3), and all amendments thereto and 
        debatable motions and appeals in connection therewith, 
        shall be limited to not more than 30 hours. The time 
        shall be equally divided between, and controlled by, 
        the Majority Leader and Minority Leader or their 
        designees.
          (2) Debate on amendments.--Debate in the Senate on 
        any amendment to the bill shall be limited to 1 hour, 
        to be equally divided between, and controlled by, the 
        mover and the manager of the bill, and debate on any 
        amendment to an amendment, debatable motion, or appeal 
        shall be limited to 30 minutes, to be equally divided 
        between, and controlled by, the mover and the manager 
        of the bill, except that in the event the manager of 
        the bill is in favor of any such amendment, motion or 
        appeal, the time in opposition thereto shall be 
        controlled by the minority leader or his designee.
          (3) Limit of debate.--(A) A motion to further limit 
        debate is not debatable. A motion by the majority 
        leader or his designee to extend debate is not 
        debatable. A motion to recommit is not in order.
          (B) No amendment to the bill reported by the 
        Committee on Governmental Affairs under subsection 
        (d)(3) shall be in order unless--
                  (i) that amendment is confined to terminating 
                or reforming an inequitable Federal subsidy as 
                defined by section 4 of this Act;
                  (ii) that amendment is germane to the bill 
                reported by the Committee on Governmental 
                Affairs; and
                  (iii) for the purposes of such bill, 
                ``germane'' means only amendments which strike 
                language from such bill, or restore language in 
                the bill or bills introduced under subsection 
                (c).
          (4) Conference reports.--
                  (A) Motion to proceed.--A motion to proceed 
                to the consideration of the conferencereport on 
a bill subject to the procedures of this section and reported to the 
Senate may be made even though a previous motion to the same effect has 
been disagreed to.
                  (B) Time limitation.--The consideration in 
                the Senate of the conference report on the bill 
                and any amendments in disagreement thereto, 
                including all debatable motions and appeals in 
                connection therewith, shall be limited to 5 
                hours, to be equally divided between, and 
                controlled by, the majority leader and minority 
                leader or their designees. Debate on any 
                debatable motion, appeal related to the 
                conference report, or any amendment to an 
                amendment in disagreement, shall be limited to 
                30 minutes, to be equally divided between, and 
                controlled by, the mover and the manager of the 
                conference report (or a message between 
                Houses).
  (f) Procedure in House of Representatives After Report of the 
Committee; Debate.--
          (1) Motion to consider.--When the Committee on 
        Government Reform and Oversight of the House of 
        Representatives reports a bill under subsection (d)(3) 
        it is in order (at any time after the fifth day 
        (excluding Saturdays, Sundays, and legal holidays) 
        following the day on which any committee report filed 
        on a bill referred under subsection (d)(1) to the 
        Committee on Government Reform and Oversight has been 
        available to Members of the House) to move to proceed 
        to the consideration of the bill reported to the House 
        of Representatives. The motion is highly privileged and 
        is not debatable. An amendment to the motion is not in 
        order, and it is not in order to move to reconsider the 
        vote by which the motion is agreed to or disagreed to.
          (2) Debate.--General debate on the bill in the House 
        of Representatives shall be limited to not more than 10 
        hours, which shall be divided equally between the 
        majority and minority parties. A motion further to 
        limit debate is not debatable. A motion to postpone 
        debate is not in order, and it is not in order to move 
        to reconsider the vote by which the bill is agreed to 
        or disagreed to.
          (3) Terms of consideration.--Consideration of the 
        bill by the House of Representatives shall be in the 
        Committee of the Whole, and the bill shall be 
        considered for amendment under the 5-minute rule in 
        accordance with the applicable provisions of rule XXIII 
        of the Rules of the House of Representatives. After the 
        committee rises and reports the bill back to the House, 
        the previous question shall be considered as ordered on 
        the bill and any amendments thereto to final passage 
        without intervening motion.
          (4) Limit on debate.--Debate in the House of 
        Representatives on the conference report on a bill 
        subject to the procedures under this section and 
        reported to the House of Representatives shall be 
        limited to not more than 5 hours, which shall be 
        divided equally between the majority and minority 
        parties. A motion further to 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. A motion to postpone is not 
        in order.
          (5) Appeals.--Appeals from decisions of the Chair 
        relating to the application of the Rules of the House 
        of Representatives to the procedure relating to the 
        bill shall be decided without debate.
  (g) Rules of the Senate and House of Representatives.--This 
section is enacted by Congress--
          (1) as an exercise of the rulemaking power of the 
        Senate and the House of Representatives, respectively, 
        but applicable only with respect to the procedure to be 
        followed in that House in the case of a bill under this 
        section, and it supersedes other rules only to the 
        extent that it is inconsistent with such rules; and
          (2) with full recognition of the constitutional right 
        of either House to change the rules as far as relating 
        to the procedure of that House at any time, in the same 
        manner, and to the same extent as in the case of any 
        other rule of that House.

                                
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