[House Report 107-801]
[From the U.S. Government Publishing Office]



107th Congress 
 2d Session             HOUSE OF REPRESENTATIVES                 Report
                                                                107-801
_______________________________________________________________________
                                                 Union Calendar No. 502


           REPORT ON THE LEGISLATIVE AND OVERSIGHT ACTIVITIES

                                 OF THE

                      COMMITTEE ON WAYS AND MEANS

                               DURING THE

                             107TH CONGRESS

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


January 2, 2003.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed








                      COMMITTEE ON WAYS AND MEANS

                   BILL THOMAS, California, Chairman
PHILIP M. CRANE, Illinois            CHARLES B. RANGEL, New York
E. CLAY SHAW, Jr., Florida           FORTNEY PETE STARK, California
NANCY L. JOHNSON, Connecticut        ROBERT T. MATSUI, California
AMO HOUGHTON, New York               WILLIAM J. COYNE, Pennsylvania
WALLY HERGER, California             SANDER M. LEVIN, Michigan
JIM McCRERY, Louisiana               BENJAMIN L. CARDIN, Maryland
DAVE CAMP, Michigan                  JIM McDERMOTT, Washington
JIM RAMSTAD, Minnesota               GERALD D. KLECZKA, Wisconsin
JIM NUSSLE, Iowa                     JOHN LEWIS, Georgia
SAM JOHNSON, Texas                   RICHARD E. NEAL, Massachusetts
JENNIFER DUNN, Washington            MICHAEL R. McNULTY, New York
MAC COLLINS, Georgia                 WILLIAM J. JEFFERSON, Louisiana
ROB PORTMAN, Ohio                    JOHN S. TANNER, Tennessee
PHIL ENGLISH, Pennsylvania           XAVIER BECERRA, California
WES WATKINS, Oklahoma                KAREN L. THURMAN, Florida
J.D. HAYWORTH, Arizona               LLOYD DOGGETT, Texas
JERRY WELLER, Illinois               EARL POMEROY, North Dakota
KENNY C. HULSHOF, Missouri
SCOTT McINNIS, Colorado
RON LEWIS, Kentucky
MARK FOLEY, Florida
KEVIN BRADY, Texas
PAUL RYAN, Wisconsin









                         LETTER OF TRANSMITTAL

                              ----------                              

                          House of Representatives,
                               Committee on Ways and Means,
                                   Washington, DC, January 2, 2003.
Hon. Jeff Trandahl,
Office of the Clerk, House of Representatives,
The Capitol, Washington, DC.
    Dear Mr. Trandahl: I am herewith transmitting, pursuant to 
House Rule XI, clause 1(d), the report of the Committee on Ways 
and Means on its legislative and oversight activities during 
the 107th Congress.
            Best regards,
                                             Bill Thomas, Chairman.









                            C O N T E N T S

                              ----------                              
                                                                   Page
Transmittal Letter...............................................   III
Forward..........................................................   VII
 I. Legislative Activity Review.......................................1
        A. Legislative Review of Tax, Trust Fund, and Pension 
            Issues...............................................     1
        B. Legislative Review of Trade Issues....................    22
        C. Legislative Review of Health Issues...................    51
        D. Legislative Review of Social Security Issues..........    55
        E. Legislative Review of Human Resources Issues..........    59
        F. Legislative Review of Debt Issues.....................    68
II. Oversight Activity Review........................................68
        A. Oversight Agenda......................................    68
        B. Actions taken and recommendations made with respect to 
            oversight plan.......................................    77
        C. Additional oversight activities, and any 
            recommendations or actions taken.....................   102
Appendix I. Jurisdiction of the Committee on Ways and Means......
 07
Appendix II. Historical Note.....................................
 23
Appendix III. Statistical Review of the Activities of the 
  Committee on Ways and Means....................................
 29
Appendix IV. Chairmen of the Committee on Ways and Means and 
  Membership of the Committee from the 1st through the 107th 
  Congresses.....................................................
 33








                                FOREWORD

    Clause 1(d) of Rule XI of the Rules of the House, regarding 
the rules of procedure for committees, contains a requirement 
that each committee prepare a report at the conclusion of each 
Congress summarizing its activities. The 104th Congress added 
subsections on legislative and oversight activities, including 
a summary comparison of oversight plans and eventual 
recommendations and actions. The full text of the Rule, as 
recodified in the 107th Congress, follows:

    (d)(1) Each committee shall submit to the House not later 
than January 2 of each odd-numbered year a report on the 
activities of that committee under this rule and rule X during 
the Congress ending at noon on January 3 of such year.
    (2) Such report shall include separate sections summarizing 
the legislative and oversight activities of that committee 
during that Congress.
    (3) The oversight section of such report shall include a 
summary of the oversight plans submitted by the committee under 
clause 2(d) of rule X, a summary of the actions taken and 
recommendations made with respect to each such plan, a summary 
of any additional oversight activities undertaken by that 
committee, and any recommendations made or actions taken 
thereon.
    (4) After an adjournment sine die of the last regular 
session of a Congress, the chairman of a committee may file an 
activities report under subparagraph (1) with the Clerk at any 
time and without approval of the committee, provided that--
          (A) a copy of the report has been available to each 
        member of the committee for at least seven calendar 
        days; and
          (B) the report includes any supplemental, minority, 
        or additional view submitted by a member of the 
        committee.

    The jurisdiction of the Committee on Ways and Means during 
the 107th Congress is provided in Rule X, clause 1(s), as 
follows:

    (s) Committee on Ways and Means.
          (1) Customs, collection districts, and ports of entry 
        and delivery.
          (2) Reciprocal trade agreements.
          (3) Revenue measures generally.
          (4) Revenue measures relating to the insular 
        possessions.
          (5) The bonded debt of the United States, subject to 
        the last sentence of clause 4(f).
          (6) Deposit of public monies.
          (7) Transportation of dutiable goods.
          (8) Tax exempt foundations and charitable trusts.
          (9) National social security (except health care and 
        facilities programs that are supported from general 
        revenues as opposed to payroll deductions and except 
        work incentive programs).

    The general oversight responsibilities of committees are 
set forth in clause 2 of Rule X. The 104th Congress also added 
the requirement in clause 2 of Rule X that each standing 
committee submit its oversight plans for each Congress. The 
text of the Rule, as recodified in the 107th Congress, in 
pertinent part, follows:

    2. (a) The various standing committees shall have general 
oversight responsibilities as provided in paragraph (b) in 
order to assist the House in--
          (1) its analysis, appraisal, and evaluation of--
                  (A) the application, administration, 
                execution, and effectiveness of Federal laws; 
                and
                  (B) conditions and circumstances that may 
                indicate the necessity or desirability of 
                enacting new or additional legislation; and
          (2) its formulation, consideration, and enactment of 
        changes in Federal laws, and of such additional 
        legislation as may be necessary or appropriate.
    (b)(1) In order to determine whether laws and programs 
addressing subjects within the jurisdiction of a committee are 
being implemented and carried out in accordance with the intent 
of Congress and whether they should be continued, curtailed, or 
eliminated, each standing committee (other than the Committee 
on Appropriations) shall review and study on a continuing 
basis--
          (A) the application, administration, execution, and 
        effectiveness of laws and programs addressing subjects 
        within its jurisdiction;
          (B) the organization and operation of the Federal 
        agencies and entities having responsibilities for the 
        administration and execution of laws and programs 
        addressing subjects within its jurisdiction;
          (C) any conditions or circumstances that may indicate 
        the necessity or desirability of enacting new or 
        additional legislation addressing subjects within its 
        jurisdiction (whether or not a bill or resolution has 
        been introduced with respect thereto); and
          (D) future research and forecasting on subjects 
        within its jurisdiction.
    (2) Each committee to which subparagraph (1) applies having 
more than 20 members shall establish an oversight subcommittee, 
or require its subcommittees to conduct oversight in their 
respective jurisdictions, to assist in carrying out its 
responsibilities under this clause. The establishment of an 
oversight subcommittee does not limit the responsibility of a 
subcommittee with legislative jurisdiction in carrying out its 
oversight responsibilities.
    (c) Each standing committee shall review and study on a 
continuing basis the impact or probable impact of tax policies 
affecting subjects within its jurisdiction as described in 
clauses 1 and 3.
    (d)(1) Not later than February 15 of the first session of a 
Congress, each standing committee shall, in a meeting that is 
open to the public and with a quorum present, adopt its 
oversight plans for that Congress. Such plan shall be submitted 
simultaneously to the Committee on Government Reform and to the 
Committee on House Administration. In developing its plan each 
committee shall, to the maximum extent feasible--
          (A) consult with other committees that have 
        jurisdiction over the same or related laws, programs, 
        or agencies within its jurisdiction with the objective 
        of ensuring maximum coordination and cooperation among 
        committees when conducting reviews of such laws, 
        programs, or agencies and include in its plan an 
        explanation of steps that have been or will be taken to 
        ensure such coordination and cooperation;
          (B) review specific problems with Federal rules, 
        regulations, statutes, and court decisions that are 
        ambiguous, arbitrary, or nonsensical, or that impose 
        severe financial burdens on individuals;
          (C) give priority consideration to including in its 
        plan the review of those laws, programs, or agencies 
        operating under permanent budget authority or permanent 
        statutory authority; and
          (D) have a view toward ensuring that all significant 
        laws, programs, or agencies within its jurisdiction are 
        subject to review every 10 years.

    To carry out its work during the 107th Congress, the 
Committee on Ways and Means had six standing Subcommittees, as 
follows:
          Subcommittee on Trade;
          Subcommittee on Oversight;
          Subcommittee on Health;
          Subcommittee on Social Security;
          Subcommittee on Human Resources; and
          Subcommittee on Select Revenue Measures.
    The membership of the six Subcommittees of the Committee on 
Ways and Means in the 107th Congress is as follows:

                         Subcommittee on Trade

                  PHILIP M. CRANE, Illinois, Chairman
E. CLAY SHAW, Jr., Florida           SANDER M. LEVIN, Michigan
AMO HOUGHTON, New York               CHARLES B. RANGEL, New York
DAVE CAMP, Michigan                  RICHARD E. NEAL, Massachusetts
JIM RAMSTAD, Minnesota               WILLIAM J. JEFFERSON, Louisiana
JENNIFER DUNN, Washington            XAVIER BECERRA, California
WALLY HERGER, California             JOHN S. TANNER, Tennessee
PHIL ENGLISH, Pennsylvania
JIM NUSSLE, Iowa






                       Subcommittee on Oversight

                    AMO HOUGHTON, New York, Chairman
ROB PORTMAN, Ohio                    WILLIAM J. COYNE, Pennsylvania
JERRY WELLER, Illinois               MICHAEL R. McNULTY, New York
KENNY C. HULSHOF, Missouri           JOHN LEWIS, Georgia
SCOTT McINNIS, Colorado              KAREN L. THURMAN, Florida
MARK FOLEY, Florida                  EARL POMEROY, North Dakota
SAM JOHNSON, Texas
JENNIFER DUNN, Washington

                         Subcommittee on Health

                NANCY L. JOHNSON, Connecticut, Chairman
JIM McCRERY, Louisiana               FORTNEY PETE STARK, California
PHILIP M. CRANE, Illinois            GERALD D. KLECZKA, Wisconsin
SAM JOHNSON, Texas                   JOHN LEWIS, Georgia
DAVE CAMP, Michigan                  JIM McDERMOTT, Washington
JIM RAMSTAD, Minnesota               KAREN L. THURMAN, Florida
PHIL ENGLISH, Pennsylvania
JENNIFER DUNN, Washington









                    Subcommittee on Social Security

                  E. CLAY SHAW, Jr., Florida, Chairman
SAM JOHNSON, Texas                   ROBERT T. MATSUI, California
MAC COLLINS, Georgia                 LLOYD DOGGETT, Texas
J.D. HAYWORTH, Arizona               BENJAMIN L. CARDIN, Maryland
KENNY C. HULSHOF, Missouri           EARL POMEROY, North Dakota
RON LEWIS, Georgia                   XAVIER BECERRA, California
KEVIN BRADY, Texas
PAUL RYAN, Wisconsin

                    Subcommittee on Human Resources

                   WALLY HERGER, California, Chairman
NANCY L. JOHNSON, Connecticut        BENJAMIN L. CARDIN, Maryland
WES WATKINS, Oklahoma                FORTNEY PETE STARK, California
SCOTT McINNIS, Colorado              SANDER M. LEVIN, Michigan
JIM McCRERY, Louisiana               JIM McDERMOTT, Washington
DAVE CAMP, Michigan                  LLOYD DOGGETT, Texas
PHIL ENGLISH, Pennsylvania
RON LEWIS, Georgia

                Subcommittee on Select Revenue Measures

                    JIM McCRERY, Louisiana, Chairman
J.D. HAYWORTH, Arizona               MICHAEL R. McNULTY, New York
JERRY WELLER, Illinois               RICHARD E. NEAL, Massachusetts
RON LEWIS, Georgia                   WILLIAM J. JEFFERSON, Louisiana
MARK FOLEY, Florida                  JOHN S. TANNER, Tennessee
KEVIN BRADY, Texas
PAUL RYAN, Wisconsin











    The Committee on Ways and Means submits its report on its 
legislative and oversight activities for the 107th Congress 
pursuant to the above stated provisions of the Rules of the 
House. Section I of the report describes the Committees' 
legislative activities, divided into six sections as follows: 
Legislative Review of Tax, Trust Fund, and Pension Issues; 
Legislative Review of Trade Issues; Legislative Review of 
Health Issues; Legislative Review of Social Security Issues; 
Legislative Review of Human Resources Issues; and Legislative 
Review of Debt Issues.
    Section II of the report describes the Committees' 
oversight activities. It includes a copy of the Committee's 
Oversight Agenda, adopted in open session on February 7, 2001, 
along with a description of actions taken and recommendations 
made with respect to the oversight plan. The report then 
discusses additional Committee oversight activities, and any 
recommendations or actions taken as a result. Finally, the 
report includes four appendices with Committee information. 
Appendix I is an expanded discussion of the Jurisdiction of the 
Committee on Ways and Means along with a revised listing and 
explanation of blue slip resolutions and points of order under 
House Rule XXI 5(a). Appendix II is a brief Historical Note on 
the origins of the Committee; Appendix III is a Statistical 
Review of the Activities of the Committee on Ways and Means; 
and Appendix IV is a listing of the Chairmen and Membership of 
the Committee from the 1st-107th Congresses.






                                                 Union Calendar No. 502
107th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 2d Session                                                     107-801

======================================================================
 
REPORT ON THE LEGISLATIVE AND OVERSIGHT ACTIVITIES OF THE COMMITTEE ON 
                WAYS AND MEANS DURING THE 107TH CONGRESS

                                _______
                                

January 2, 2003.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

    Mr. Thomas, from the Committee on Ways and Means, submitted the 
                               following





                              R E P O R T

                     I. Legislative Activity Review


      A. Legislative Review of Tax, Trust Fund, and Pension Issues


          1. BILLS ENACTED INTO LAW DURING THE 107TH CONGRESS

a. Fallen Hero Survivor Benefit Fairness Act

    On May 3, 2001, Representative Ramstad introduced H.R. 
1727, the ``Fallen Hero Survivor Benefit Fairness Act of 
2001.'' On May 9, 2001, the Committee approved the bill, with 
an amendment, by voice vote. The amended bill passed the House 
under suspension of the rules on May 15, 2001, and passed the 
Senate by unanimous consent on May 22, 2001. The President 
signed the bill into law on June 5, 2001 (P.L. 107-15). The 
provisions of the bill were also included in H.R. 1836 (see 
I.A.1b), but were subsequently dropped from the bill after H.R. 
1727 was enacted into law.
    H.R. 1727 amended a provision in the Taxpayer Relief Act of 
1997 (P.L. 105-34) regarding certain annuities paid to 
survivors of public safety officers who are killed in the line 
of duty. The Taxpayer Relief Act of 1997 provides that such 
annuities are excludible from income if the officer died after 
December 31, 1996. H.R. 1727 provides that survivor annuities 
are excludible from income regardless of when the officer died. 
The exclusion applies prospectively to annuities received after 
December 31, 2001.

b. Economic Growth and Tax Relief Reconciliation Act

    On February 5 and 6, 2001, the Committee held hearings to 
discuss the President's fiscal year 2002 budget proposals. On 
February 13 and March 21, 2001, the Committee held hearings to 
discuss the tax relief proposals contained in the President's 
fiscal year 2002 budget.
    On May 15, 2001, Chairman Thomas introduced H.R. 1836, the 
``Economic Growth and Tax Relief Reconciliation Act of 2001.'' 
The bill passed the House on May 16, 2001, and passed the 
Senate, with an amendment, on May 23, 2001. The conference 
report on H.R. 1836 passed the House and Senate on May 26, 
2001, and was signed into law by the President on June 7, 2001 
(P.L. 107-16).
    H.R. 1836 included provisions similar to those contained in 
H.R. 3, the ``Economic Growth and Tax Relief Act,'' H.R. 6, the 
``Marriage Penalty and Family Tax Relief Act,'' H.R. 8, the 
``Death Tax Elimination Act,'' H.R. 10, the ``Comprehensive 
Retirement Security and Pension Reform Act'' as passed by the 
House of Representatives, and H.R. 622, the ``Hope for Children 
Act.'' The Committee and the House approved all of these bills.
    In summary, Title I of the Act established a 10-percent 
individual income tax bracket and gradually reduced the 28-, 
31-, 
36-, and 39.6-percent income tax rates to 25 percent, 28 
percent, 33 percent, and 35 percent, respectively. The benefits 
of the new 10-percent tax bracket for 2001 were delivered in 
the form of rebate checks that were mailed to eligible 
taxpayers during the 2001 calendar year to the greatest extent 
possible. Title I of the Act also phased out the limitation on 
itemized deductions and the personal exemption phase out.
    Title II of the Act provided several tax benefits for 
families with children. The child tax credit was gradually 
doubled to $1,000 per child, and a portion of the credit was 
made refundable. The adoption credit and the exclusion for 
employer-provided adoption assistance were expanded and made 
permanent. The dependent care credit was expanded, and an 
employer-provided childcare credit of up to $150,000 per year 
was established to offset the cost of building childcare 
facilities or providing qualified childcare resources and 
referrals.
    Title III of the Act provided marriage tax penalty relief 
by gradually increasing the standard deduction for married 
taxpayers filing jointly so that the deduction will be twice 
that of an individual filing a single return. The 15-percent 
income tax bracket for joint tax filers was gradually increased 
so that it will be twice the width of the bracket for an 
individual filing a single return. The earned income credit for 
joint tax filers was increased and several simplifications to 
the earned income credit were adopted.
    Title IV of the Act contained several education tax 
incentives. Coverdell education savings accounts were expanded 
to cover qualified elementary and secondary education expenses, 
and the annual contribution limit was increased from $500 to 
$2,000, among other enhancements. Qualified tuition programs 
were expanded in several ways. Most notably, the Act provided 
that distributions are excludible from income if used for 
qualified higher education expenses. Certain private 
institutions of higher education were permitted to establish 
qualified tuition programs (but not savings programs). The 
exclusion for employer provided educational assistance was 
expanded to include graduate courses and permanently extended. 
The 60-month limit on the student loan interest deduction was 
eliminated, and the income limitations for the deduction were 
increased. The Act provided that certain amounts received under 
the National Public Health Service Corps ScholarshipProgram and 
the F. Edward Hebert Armed Forces Health Professions Scholarship and 
Financial Assistance Program were excludible from income. The Act also 
enhanced the rules relating to tax-exempt bond financing for public 
schools. Finally, the Act established a temporary above-the-line 
deduction for qualified higher education tuition and related expenses.
    Title V of the Act repealed the estate and generation-
skipping transfer taxes effective January 1, 2010, and repealed 
the provisions relating to the basis of property acquired from 
a decedent (so that such property takes a carryover basis 
instead of a step up in basis). Several modifications to the 
estate and generation-skipping taxes were made prior to the 
effective date of the repeal. The State death tax credit was 
repealed beginning January 1, 2005, and replaced with a 
deduction for such taxes. Several other changes to the estate, 
generation-skipping, and gift taxes were also adopted.
    Title VI provided several modifications to individual 
retirement accounts (IRAs), qualified retirement plans and 
annuities, and eligible plans of State and local governments, 
and tax-exempt organizations (457 plans). Among these changes, 
the Act gradually increased the annual contribution limit for 
IRAs to $5,000. The annual contribution limits for qualified 
plans and 457 plans was gradually increased to $15,000. 
Additional catch-up contributions for individuals age 50 and 
older were established. Several provisions aimed at expanding 
pension coverage were adopted, including an increase in the 
annual benefit and contribution limits and modifications to the 
top-heavy rules. The Act also provided an individual income tax 
credit of up to $2,000 for qualified retirement savings 
contributions and included several provisions aimed at 
mitigating pension plan start-up costs for small employers. 
Several provisions to enhance portability were enacted, and 
faster vesting of certain employer matching contributions was 
required.
    To comply with the Congressional Budget Act, most of the 
provisions of the Act are scheduled to expire (or ``sunset'') 
after December 31, 2010.

c. Naming ``Coverdell Education Savings Accounts''

    On July 18, 2001, Senator Lott introduced S. 1190, a bill 
to amend the Internal Revenue Code of 1986 to rename 
``education individual retirement accounts'' as ``Coverdell 
education savings accounts.'' The bill passed the Senate by 
unanimous consent on the same day. The Committee discharged the 
bill on July 23, 2001, and the House passed the bill by 
unanimous consent on the same day. The President signed the 
bill into law on July 26, 2001 (P.L. 107-22).

d. Railroad Retirement and Survivors' Improvement Act

    On March 14, 2001, Representative Portman introduced H.R. 
10, the ``Comprehensive Retirement Security and Pension Reform 
Act of 2001.'' The Committee approved the bill, with an 
amendment, on April 25, 2001. The House passed the bill, with 
an amendment, on May 2, 2001. The provisions of H.R. 10 were 
included in H.R. 1836, the ``Economic Growth and Tax Relief 
Reconciliation Act of 2001,'' which was signed into law by the 
President on June 7, 2001 (P.L. 107-16) (see I.A.1b).
    H.R. 1140, the ``Railroad Retirement and Survivors'' 
Improvement Act of 2001,'' was introduced on March 21, 2001, by 
Representative Young. The bill was discharged by the Committee 
on Ways and Means on July 12, 2001. The bill passed the House 
under suspension of the rules on July 31, 2001.
    On December 5, 2001, Senate Amendment 2170 incorporated the 
provisions of H.R. 1140 as substitute text for H.R. 10. H.R. 
10, as amended, passed the Senate on the same day. The House 
approved the Senate amendment on December 11, 2001, and the 
President signed the bill into law on December 21, 2001 (P.L. 
107-90).
    In summary, H.R. 10 increased benefits paid to railroad 
retirees and their beneficiaries, reduced the payroll taxes 
used to finance benefits, and revised the financing of the 
railroad retirement system.
    The Act made several changes to railroad retirement 
annuities received by retired employees and surviving spouses.
    The Act established a Railroad Retirement Trust Fund and a 
National Railroad Retirement Investment Trust to manage and 
invest the assets of the Railroad Retirement system. The Act 
provided that amounts needed to pay tier 1 and tier 2 annuities 
would be transferred to an independent disbursing agent outside 
of the U.S. Department of the Treasury. The disbursing agent 
would provide annuity checks to beneficiaries.
    The Act repealed the supplemental annuity tax that was used 
to finance supplemental annuities for long-time rail employees. 
In addition, tier 2 tax rates were reduced for railroad 
employers and employees. The Act established an automatic 
adjustment mechanism to adjust tier II tax rates based on the 
financial status of the system. Under this mechanism, the 
Railroad Retirement Board is required to calculate the ratio of 
assets to benefits each year to determine tier 2 tax rates.

e. Airline Financial Stabilization

    On September 21, 2001, Representative Young introduced H.R. 
2926, the ``Air Transportation Safety and System Stabilization 
Act.'' The bill was discharged by the Committee and passed by 
the House on September 21, 2001. The Senate passed S. 1450, a 
companion bill to H.R. 2926 on the same day. Unanimous consent 
agreements in the Senateprovided for the House bill to be 
passed in the Senate if it was identical to the Senate bill. The 
President signed the bill into law on September 22, 2001 (P.L. 107-42).
    In summary, the Act provided financial assistance to the 
airline industry to help reduce the economic impact caused by 
the September 11, 2001, terrorist attacks. The tax title of the 
Act extended the deadline for an air carrier to make certain 
airline-related excise tax deposits. In addition to the tax 
title, the Act provided direct payments and loan guarantees to 
air carriers affected by the air stoppage occurring after 
September 10, 2001, authorized assistance for aviation 
insurance and reimbursed air carriers for any increase in the 
costs of insurance since September 11, 2001. The Act also 
created a Victims Compensation Fund to compensate the families 
of victims who were injured or killed as a result of the 
terrorist attacks. Finally, the Act affirmed the President's 
decision to spend $3 billion on airline safety.

f. Victims of Terrorism Tax Relief Act

    On September 13, 2001, Chairman Thomas introduced H.R. 
2884, the ``Victims of Terrorism Tax Relief Act of 2001.'' The 
Committee discharged the bill, and the House approved the bill 
by unanimous consent on the same day. On November 16, 2001, the 
Senate approved H.R. 2884, with an amendment, by unanimous 
consent. On December 13, 2001, the House agreed to the Senate 
amendment with an amendment. On December 20, 2001, the Senate 
approved the House amendment with further amendment. The House 
approved the Senate amendment by unanimous consent on the same 
day. The President signed the bill into law on December 21, 
2001 (P.L. 107-134).
    The provisions of H.R. 2884 were also included in H.R. 
3529, the ``Economic Recovery and Worker Assistance Act of 
2001,'' as passed by the House on December 20, 2001 (see 
I.A.1h).
    In summary, the Act provided tax relief to individuals who 
died as a result of the terrorist attacks against the United 
States on April 19, 1995 (Oklahoma City bombing) or September 
11, 2001 (World Trade Center and Pentagon), or who died as a 
result of the anthrax attacks occurring on or after September 
11, 2001, and before January 1, 2002. The Act waived the income 
tax liability of such victims for the year of death and the 
year prior to death (and established a minimum benefit of 
$10,000 for each victim). In addition, lower estate tax rates 
were established for such victims. Similar tax benefits already 
applied under prior law for members of the Armed Forces who 
died while serving in a combat zone. The Act provided an 
exclusion from income for certain death benefits paid by an 
employer and provided that payments from charitable 
organizations are to be treated as exempt payments that are 
excludible from income.
    The Act also provided general tax relief provisions for 
victims of terrorist and military actions, Presidentially-
declared disasters, and certain other disasters. The Act 
clarified that disaster relief payments are excludible from 
income.
    The Act protected victims who sell structured settlements 
for a lump sum by imposing a 40-percent excise tax on such 
transactions unless the transaction is approved by a court as 
being in the victim's best interest.
    The exemption amount for disability trusts was increased to 
$3,000, thus reducing the taxation of these trusts.
    The Act also allowed the Internal Revenue Service (IRS) to 
share tax return and taxpayer information with Federal law 
enforcement agencies investigating terrorist attacks. The new 
disclosure rules will expire after 3 years.

g. Simplified Administration and Reporting Requirements for Educational 
        Institutions

    On November 27, 2001, Representative Manzullo introduced 
H.R. 3346, a bill to amend the Internal Revenue Code (IRC) of 
1986 to simplify the reporting requirements relating to higher 
education tuition and related expenses. On December 4, 2001, 
the House approved the bill under suspension of the rules. On 
December 20, 2001, the Senate approved the bill by unanimous 
consent. The President signed the bill into law on January 16, 
2002 (P.L. 107-131).
    The Taxpayer Relief Act of 1997 (P.L. 105-34) established 
reporting requirements under IRC section 6050S to help the IRS 
administer the Hope and Lifetime Learning tax credits and the 
interest deduction for student loans. In summary, H.R. 3346 
simplified the reporting requirements under section 6050S by 
allowing educational institutions the option of reporting 
``amounts billed'' for tuition and related expenses instead of 
``payments received.'' The bill also eliminated the requirement 
that educational institutions report the name, Taxpayer 
Identification Number, and address of any person that can claim 
the student as a dependent. This information was not needed to 
administer the tuition tax credits or the interest deduction 
for student loans.

h. The Job Creation and Worker Assistance Act

    On October 11, 2001, Chairman Thomas introduced H.R. 3090, 
the ``Economic Security and Recovery Act of 2001.'' The 
Committee approved the bill, with an amendment, on October 12, 
2001. The House passed the bill on October 24, 2001. The Senate 
Committee on Finance approved the bill, with an amendment, on 
November 8, 2001. The bill passed the Senate by voice vote on 
February 14, 2002. On March 7, 2002, the House approved the 
Senate amendment with a substitute amendment. The Senate agreed 
to the House amendment on March 8, 2002, and the President 
signed the bill into law on March 9, 2002(P.L. 107-147).
    On February 14, 2001, Representative DeMint introduced H.R. 
622, the ``Hope for Children Act,'' a bill to expand and 
permanently extend the adoption tax credit and the exclusion 
for employer-provided adoption assistance. Provisions similar 
to those contained in H.R. 622 were included in H.R. 1836, the 
``Economic Growth and Tax Relief Reconciliation Act of 2001,'' 
which was signed into law on June 6, 2001 (P.L. 107-16) (see 
I.A.1b). The Senate passed H.R. 622 with an amendment in the 
nature of a substitute on February 6, 2002. The Senate 
substitute contained economic recovery and worker assistance 
provisions similar to some of the provisions contained in H.R. 
3090. On February 14, 2002, the House passed the Senate 
substitute with amendment. The Senate did not act on the House 
amendment. However, similar provisions relating to economic 
recovery, extension of expiring provisions, tax benefits for 
the revitalization of New York City, miscellaneous provisions 
and technical corrections, and assistance for displaced workers 
were contained in H.R. 3090 as signed into law.
    On December 19, 2001, Chairman Thomas introduced H.R. 3529, 
the ``Economic Recovery and Worker Assistance Act of 2001.'' 
The House passed the bill on December 20, 2001. The Senate did 
not act on H.R. 3529. However, similar provisions relating to 
economic recovery, extension of expiring provisions, tax 
benefits for the revitalization of New York City, miscellaneous 
provisions and technical corrections, and assistance for 
displaced workers were contained in H.R. 3090 as signed into 
law. Similar provisions relating to tax relief for victims of 
terrorism (contained in Title V of the bill) were included in 
H.R. 2884 as signed into law (P.L. 107-134) (see I.A.1f).
    In summary, H.R. 3090 included two provisions aimed at 
stimulating the economy. The first provision generally provided 
an additional first year 30-percent depreciation allowance for 
certain property that was acquired between September 10, 2001, 
and September 11, 2004. The second provision extended the net 
operating loss carryback period from 2 to 5 years for 
businesses with net operating losses in taxable years ending in 
2001 or 2002. This provision also repealed the depreciation 
preference under the alternative minimum tax and the 90-percent 
limitations on use of foreign tax credits and net operating 
losses.
    The Act also provided unemployment assistance for displaced 
workers.
    H.R. 3090 also provided tax benefits to assist with the 
revitalization of New York City after the terrorist attacks 
that occurred on September 11, 2001. These benefits included a 
wage credit for certain individuals employed in New York City, 
additional tax-exempt bond financing authority and advance 
refunding authority, 5-year recovery period for certain 
leasehold improvements, and additional expensing under IRC 
section 179.
    The Act also provided several miscellaneous tax provisions 
including an exclusion for foster care payments made by 
qualified placement agencies (see summary of H.R. 586 under 
section I.A.3a), an expansion of the interest rate range that 
may be used to calculate current liability for defined benefit 
pension plans under the minimum funding requirements, and a 
temporary above-the-line deduction for certain out-of-pocket 
expenses incurred by school teachers.
    Finally, the Act provided a 2-year extension of tax 
provisions expiring in 2001 and included several technical and 
clerical corrections to previously enacted laws.

i. Andean Trade Promotion and Drug Eradication Act

    On February 13, 2002, the Committee held a hearing on the 
President's proposal to reduce the number of uninsured through 
the use of health care tax credits.
    On October 3, 2001, Representative Crane introduced H.R. 
3009, the ``Andean Trade Promotion and Drug Eradication Act.'' 
On October 5, 2001, the Committee approved the amended bill by 
voice vote. The bill passed the House by voice vote on November 
16, 2001. The Senate Committee on Finance approved the bill, 
with an amendment, on November 29, 2001. The Senate passed the 
bill, with amendment, on May 23, 2002. The conference report on 
H.R. 3009 was agreed to in the House on July 27, 2002, and in 
the Senate on August 1, 2002. President Bush signed the bill 
into law on August 6, 2002 (P.L. 107-210).
    As enacted, H.R. 3009 incorporated provisions from H.R. 
3005, H.R. 3008, H.R. 3010, and H.R. 3129. In summary, the Act 
included trade adjustment assistance (TAA) provisions, trade 
promotion authority (fast-track procedures), Andean trade 
preferences, and other trade provisions.
    The Act included a refundable tax credit for 65 percent of 
the expenses incurred by eligible individuals who purchase 
qualified health insurance covering the taxpayer and qualifying 
family members. The credit is available only with respect to 
amounts paid by the taxpayer. An eligible individual is an: (1) 
eligible TAA recipient, (2) eligible alternative TAA recipient, 
or (3) eligible Pension Benefit Guaranty Corporation recipient. 
An otherwise eligible taxpayer is not eligible for the credit 
if he or she has other specified coverage. Qualifying family 
members are the taxpayer's spouse and any dependent of the 
taxpayer with respect to whom the taxpayer is entitled to claim 
a dependency exemption. The credit may be used to purchase 
COBRA continuation coverage, State-based continuation coverage, 
coverage offered through State high risk pools, a series of 
State-based options, coverage under a group health plan that is 
available through the employment of the eligible individual's 
spouse, and individual market coverage if the eligible 
individual was covered under individual health insurance during 
the entire 30-day period that ends on the date the individual 
became separated from the employment connected to the 
individual'squalification for the credit.

j. Clergy Housing Allowance Clarification Act

    On April 10, 2002, Representative Ramstad introduced H.R. 
4156, the ``Clergy Housing Allowance Clarification Act of 
2002.'' The House passed the bill under suspension of the rules 
on April 16, 2002. On May 2, 2002, the Senate Committee on 
Finance discharged the bill by unanimous consent, and the 
Senate passed the bill by unanimous consent on the same day. 
President Bush signed the bill into law on May 20, 2002 (P.L. 
107-181).
    Section 107 of IRC allows a minister of the gospel to 
exclude from gross income (1) the rental value of a home 
furnished as part of his or her compensation or (2) the rental 
allowance paid as part of his or her compensation, to the 
extent used to pay rent or provide a home. H.R. 4156 codified 
the IRS' long-standing position (Rev. Rul. 71-280, 1971-2 
C.B.92) that the clergy housing allowance exclusion is limited 
to the fair market value of the home provided plus the cost of 
utilities.

k. Rules Regarding State and Local Committees of Candidates and of 
        Political Parties

    On October 10, 2002, Representative Brady introduced H.R. 
5596, a bill to amend section 527 of the IRC of 1986 to 
eliminate notification and return requirements for State and 
local party committees and candidate committees and avoid 
duplicate reporting by certain State and local political 
committees of information required to be reported and made 
publicly available under State law, and for other purposes. On 
October 16, 2002, the Committee discharged the bill. The House 
passed the bill by unanimous consent on October 16, 2002, and 
the Senate passed the bill by unanimous consent on October 17, 
2002. The President signed the bill into law on November 2, 
2002 (P.L. 107-276).
    In summary, H.R. 5596 exempted State and local committees 
of candidates and of political parties from specified 
notification requirements and required an annual income tax 
return from political organizations only with respect to 
political organization taxable income. The bill required the 
filing of an annual information return by a political 
organization with gross receipts of $25,000 or more or with 
gross receipts of $100,000 or more in the case of a qualified 
State or local political organization, except for certain 
organizations that are specifically exempted by the statute. 
The bill made additional amendments to the rules of IRC section 
527 regarding: (1) unsegregated funds, (2) penalty assessment 
and collection procedures, (3) electronic filing, (4) public 
availability of notices and reports, and (5) timing of notice 
of material change.

l. Homeland Security Act

    On June 24, 2002, Representative Armey introduced H.R. 
5005, the ``Homeland Security Act of 2002.'' The Committee 
approved the bill, with an amendment, on July 10, 2002. The 
Committee discharged the bill on July 12, 2002. The House 
approved the bill, with amendment, on July 26, 2002. The Senate 
passed the bill, with amendment, on November 19, 2002. The 
House agreed to the Senate amendment by unanimous consent on 
November 22, 2002. The President signed the bill into law on 
November 25, 2002 (P.L. 107-296).
    In summary, the Act established a U.S. Department of 
Homeland Security to consolidate the government's law 
enforcement functions. Among the provisions of the Act, the law 
enforcement functions previously carried out by the Bureau of 
Alcohol, Tobacco, and Firearms (BATF) were transferred from the 
U.S. Department of the Treasury to the U.S. Department of 
Justice (where other traditional law enforcement agencies, such 
as the Federal Bureau of Investigation and the Drug Enforcement 
Agency, currently reside.) The BATF revenue administration and 
revenue enforcement functions will remain at the U.S. 
Department of the Treasury.

m. Terrorism Risk Protection Act

    On November 1, 2001, Representative Oxely introduced H.R. 
3210, the ``Terrorism Risk Protection Act.'' The Committee 
marked up the revenue provisions of the bill on November 16, 
2001, and approved an amendment in the nature of a substitute 
on the same day. The House approved the amended bill on 
November 29, 2001. The Senate approved H.R. 3210 with an 
amendment in the nature of a substitute on July 25, 2002, by 
unanimous consent. The substitute language reflected the 
provisions of S. 2600, introduced by Senator Dodd. The 
conference report on H.R. 3210 passed the House by voice vote 
on November 14, 2002, and passed the Senate on November 19, 
2002. The President signed the bill into law on November 26, 
2002 (P.L. 107-297).
    In summary, H.R. 3210, as introduced in the House, provided 
for temporary Federal Government cost-sharing for commercial 
insurers of up to $100 billion for 90 percent of the amount of 
insured losses resulting from acts of terrorism in the event of 
a ``triggering determination.'' The financial assistance was to 
be repaid through assessments and surcharges. The introduced 
bill also included a revenue provision that allowed property 
and casualty insurers an additional deduction for increases to 
a ``terrorism commercial business reserve.'' This reserve 
referred to amounts set aside in a segregated account to pay or 
to reinsure future unaccrued claims arising from declared 
terrorism losses or to pay certain other claims.
    The bill, as approved by the Committee deleted the revenue 
provision in the underlying bill and required the Secretary of 
the Treasury to conduct a study of issues relating to 
permitting property and casualty insurance companies to 
establish deductible reserves against losses for future acts of 
terrorism. The Secretary would be required to report to 
Congress no later than 4 months after date of enactment.

n. Holocaust Restitution Tax Fairness Act

    On May 22, 2002, Representative Shaw introduced H.R. 4823, 
the ``Holocaust Restitution Tax Fairness Act of 2002.'' On June 
4, 2002, the bill passed the House under suspension of the 
rules. On November 20, 2002, the bill passed the Senate by 
unanimous consent. The President signed the bill into law on 
December 17, 2002 (P.L. 107-358).
    The Act permanently extended section 803 of the Economic 
Growth and Tax Relief Reconciliation Act of 2001 (P.L. 107-16) 
(see I.A.1b). Section 803 provides an exclusion from income for 
specified restitution payments received by persons (or heirs) 
persecuted by Nazi Germany, its allied or controlled countries, 
or any other Axis regime because of race, religion, physical or 
mental disability, or sexual orientation. The provision was 
scheduled to expire after December 31, 2010 because of the 
general sunset provision in Title IX of the Economic Growth and 
Tax Relief Reconciliation Act of 2001.

                        2. TAX RELIEF PROPOSALS

a. Community Solutions Act

    On March 29, 2001, Representative Watts introduced H.R. 7, 
the ``Community Solutions Act of 2001.'' On June 13, 2001, the 
Subcommittee on Human Resources and the Subcommittee on Select 
Revenue Measures held a joint hearing to examine the provisions 
of H.R. 7. The Committee approved the bill, with an amendment, 
on July 11, 2001, and the House approved the bill on July 19, 
2001.
    On July 16, 2001, the Senate Committee on Finance favorably 
reported H.R. 7 with an amendment in the nature of a 
substitute. The Senate did not consider the bill.
    In summary, H.R. 7 as passed by the House provided several 
tax incentives to encourage individuals and businesses to 
increase charitable contributions. The bill allowed taxpayers 
who do not itemize deductions to deduct charitable 
contributions paid in cash. The maximum deduction would 
increase from $25 ($50 for joint returns) in 2002 to $100 ($200 
for joint returns) by 2010. The bill also provided an exclusion 
from gross income for otherwise taxable withdrawals from 
traditional or Roth IRAs that are made for charitable 
provisions. The percentage limitation on corporate charitable 
contributions was increased from 10 percent to 15 percent of 
modified taxable income (phased in over 9 years). The bill also 
clarified the valuation rules applicable to donations of food 
inventory and provided that all businesses (not just C 
corporations) are eligible for an enhanced deduction for such 
donations.
    H.R. 7 as passed by the House modified the excise tax on 
the net investment income of private foundations by replacing 
the two rates of tax under present law with a single tax rate 
of 1 percent. In addition, the bill imposed a 100-percent 
excise tax on the unrelated business taxable income of a 
charitable remainder trust, instead of removing the income tax 
exemption of such a trust for any year in which the trust has 
any unrelated business taxable income.
    H.R. 7 modified the self-constructed property rule that 
applies to certain charitable contributions of scientific 
property used for research and computer technology and 
equipment. The bill also allowed shareholders in an S 
corporation to increase their basis in their S corporation 
shares to permit them to take a full charitable deduction for 
charitable contributions by the S corporation.
    The bill also increased the authorization for the Assets 
for Independence Act matched savings program, which supports 
the creation and funding of Individual Development Accounts for 
low-income working families. The bill made several other 
modifications to the program.

b. Retirement Security Advice Act

    On June 21, 2001, Representative Boehner introduced H.R. 
2269, the ``Retirement Security Advice Act of 2001.'' The 
Committee approved the bill, with an amendment, on November 7, 
2001, and the House approved the bill on November 15, 2001. The 
Senate did not act on the bill.
    The provisions of the bill were also included in H.R. 3762, 
the ``Pension Security Act of 2002,'' which passed the House on 
April 11, 2002 (see I.A.2g).
    In summary, the bill provided an exemption from the 
prohibited transaction rules of the IRC and the Employee 
Retirement Income Security Act that would allow qualified 
service providers to offer investment advice to plan sponsors, 
plan participants, and beneficiaries of defined contribution 
plans as long as certain disclosures were made. The exemption 
would be available only to ``fiduciary advisors.'' A fiduciary 
advisor was defined as a registered investment advisor, bank, 
insurance company, or registered broker dealer. An affiliate, 
employee, agent, or registered representative of these 
regulated institutions also qualified as a fiduciary advisor.
    Employers who chose to provide their workers with access to 
an investment advisor were liable for the prudent selection of 
an investment advisor and the periodic review of that advisor. 
In addition to the qualification and disclosure rules, the bill 
required that: (1) any investment decisions must be made by the 
worker, not the advisor, (2) any compensation received by the 
advisor must be reasonable and the terms of any transaction 
must be at least as favorable as an arm's length transaction, 
and (3) the advisor must maintain records of compliance for at 
least 6 years.

c. Increasing Limit on the Deduction of Net Capital Losses

    On April 26, 2001, Representative Lofgren introduced H.R. 
1619, a bill to amend the IRC of 1986 to increase the 
limitation on capital losses applicable to individuals. The 
Committee approved the bill, with an amendment, on October 8, 
2002. The bill was not considered by the House or the Senate.
    In summary, the amended bill increased the annual capital 
loss limit for individuals from $3,000 to $8,250 and provided 
for an annual inflation adjustment for tax years beginning 
after December 31, 2001.

d. Energy Tax Incentives

    On March 5, 2001, the Subcommittee on Oversight held a 
field hearing on energy supply and prices. On May 3, June 12, 
and June 13, 2001, the Subcommittee on Select Revenue Measures 
held hearings on the effects of Federal tax laws on the 
production, supply, and conservation of energy.
    On July 17, 2001, Representative McCrery introduced H.R. 
2511, the ``Energy Tax Policy Act of 2001.'' The Committee 
approved the bill, with an amendment, on July 18, 2001. H.R. 
2511 amended the IRC of 1986 to provide tax incentives to 
encourage energy conservation, energy reliability, and energy 
production.
    The provisions of H.R. 2511 were incorporated into H.R. 4, 
the ``Securing America's Future Energy Act,'' a broad-based 
energy bill introduced by Representative Tauzin on July 27, 
2001. The bill passed the House on August 2, 2001, and passed 
the Senate, with amendment, by unanimous consent on April 25, 
2002. A conference report had not been agreed to prior to the 
adjournment of the 107th Congress.
    In summary, the tax title of H.R. 4, as passed by the 
House, contained three sections: conservation, reliability, and 
production.
    The conservation portion of the bill: allowed a 15-percent 
credit, up to $2,000, for individuals who purchase qualified 
photovoltaic or solar water heating property; extended and 
expanded the section 45 credit for electricity produced from 
certain renewable resources (wind, closed- and open-loop 
biomass, and landfill gas) for 5 years; allowed a 10-percent 
credit for individuals and businesses, up to $1,000 per 
kilowatt of capacity, for the purchase of qualified fuel cell 
power plants; allowed a credit to individuals and businesses 
who purchase qualified fuel cell motor vehicles, hybrid motor 
vehicles, alternative fuel motor vehicles, and advanced clean 
burn vehicles, and extended and expanded the existing tax 
credit for electric vehicles; allowed a business credit for the 
manufacture of certain high-efficiency appliances; allowed a 
20-percent credit, up to $2,000, to individuals who make 
qualified energy efficiency improvements for their existing 
homes and a credit to eligible contractors, up to $2,000 for 
each new home they construct that is 30 percent more efficient 
than a national model home; allowed a deduction, up to $2.25 
per square foot, for energy-efficient commercial building 
property expenditures that reduce the total energy and power 
costs by at least 50 percent; allowed a $30 deduction for the 
installation of qualified energy management devices and a 3-
year cost recovery period for such devices; allowed a 10-
percent credit for the purchase of combined heat and power 
property; held taxpayers harmless from the alternative minimum 
tax for new credits in the bill; repealed the 4.3-cents-per-
gallon General Fund excise tax on rail and barge fuels; 
provided a reduced tax rate for diesel/water emulsion fuel; and 
allowed a 10-percent investment credit and a production credit 
for investments in qualified clean coal technologies.
    The reliability portion of the bill: clarified that natural 
gas gathering lines are 7-year property for depreciation 
purposes; treated natural gas distribution lines as 10-year 
property for depreciation purposes; treated petroleum refining 
property as 7-year property for depreciation purposes; allowed 
small refiners 75 percent expensing of capital costs incurred 
and a credit for production in complying with the Environmental 
Protection Agency (EPA) low-sulfur diesel regulations; defined 
small refiners for purposes of percentage depletion as refiners 
whose refining operations do not run more than 75,000 barrels 
of production on a daily average; modified current law to allow 
municipal utilities, investor-owned utilities, and rural 
electric co-operatives to compete in a deregulated electric 
market; repealed the diesel fuel and kerosene-dyeing mandate; 
and exempted certain prepayments for natural gas for tax-exempt 
bond arbitrage rules.
    The production portion of the bill: created a $3 per barrel 
credit on the first three barrels of daily production from such 
wells and a corresponding 50-cents per thousand cubic feet 
(Mcf) on the first 18 Mcf of natural gas from a marginal well, 
with the credit phasing out when oil prices exceed $15 per 
barrel or natural gas prices exceed $1.67 per Mcf; suspended 
the 65 percent of taxable income limitation on percentage 
depletion through December 31, 2006, and extended suspension of 
the 100 percent of net income limit with respect to marginal 
production through December 31, 2006; allowed delay rental 
payments and geological and geophysical expenditures to be 
deducted; created a 5-year carry-back of oil and gas net 
operating losses for oil and gas producers; extended and 
modified the credit for producing fuel from non-conventional 
sources through December 31, 2006; allowed certain business 
energy credits against the alternative minimum tax; repealed 
alternative minimum tax preference for intangible drilling 
costs; and extended accelerated depreciation and wage credit 
benefits for energy-related business on Indian lands through 
December 31, 2006.

e. Expansion of Renewal Communities

    On October 11, 2001, Representative LaFalce introduced H.R. 
3100, a bill to amend the IRC of 1986 to allow for the 
expansion of areas designated as renewal communities basedon 
2000 census data. The Committee discharged the bill on October 7, 2002, 
and the House approved the bill by unanimous consent on the same day. 
The Senate did not act on the bill.
    In summary, the bill allowed the U.S. Department of Housing 
and Urban Development to expand an existing Renewal Community 
to include additional census tracts that now qualify under the 
2000 census data if such an expansion is requested by the 
Renewal Community's nominating entity. (Under present law, 
census tracts qualify based on 1990 Census data.) The 
additional census tracts cannot cause the total Renewal 
Community to exceed the original population limitation 
(200,000). The additional census tracts would be required to 
meet the present law requirement that at least 20 percent of 
the population be at or below the poverty rate.

f. Employee Retirement Savings Bill of Rights

    On February 4, 2002, Representative Portman introduced H.R. 
3669, the ``Employee Retirement Savings Bill of Rights.'' The 
Committee approved H.R. 3669, with an amendment, on March 14, 
2002. The bill was approved by voice vote.
    On February 14, 2002, Representative Boehner introduced 
H.R. 3762, the ``Pension Security Act of 2002.'' The Committee 
on Education and the Workforce approved H.R. 3762, with an 
amendment, on March 20, 2002. The provisions of H.R. 3762 were 
similar to those contained in H.R. 3669.
    On February 26, 2002, the Committee held a hearing on 
retirement security and defined contribution pension plans. The 
hearing examined the rules and regulations that currently 
govern private defined contribution pension plans, including 
rules regarding diversification of plan assets, restrictions 
placed on plan assets, standards for investment education and 
advice, and notice and reporting requirements. On March 5, 
2002, the Subcommittee on Oversight held a hearing to examine 
employer and employee views on retirement security.
    On April 11, 2001, the House passed H.R. 3762, with an 
amendment. The amendment passed by the House reflected a 
combination of the provisions in H.R. 3669 (as passed by the 
Committee) and H.R. 3762 (as passed by the Committee on 
Education and the Workforce). The Senate did not act on H.R. 
3762.
    In summary, H.R. 3762 (as passed by the House) required 
employers to provide plan participants with quarterly pension 
benefit statements (in the case of defined contribution plans). 
The requirement did not apply to plans that are not covered by 
the Employee Retirement Income Security Act (ERISA). In 
addition, the bill required employers to provide participants 
with investment education notices. Different requirements 
applied to plans not covered by ERISA.
    In addition, H.R. 3762 established new diversification 
requirements. The bill prohibited employers from requiring 
employees to invest their own pension contributions in company 
stock. Employer contributions could be invested in company 
stock, but employees must have the right to sell the stock 
after 3 years of service with the employer or after holding the 
stock in the account for 3 years. A 5-year transition rule 
applied for company stock already in the account when the new 
requirements take effect. The new diversification rules did not 
apply to plans that hold no publicly-traded securities or to 
certain types of Employee Stock Ownership Plans.
    The bill allowed employees to purchase retirement planning 
services (including professional investment advice) from an 
outside adviser using pre-tax dollars that are automatically 
deducted from their paychecks. In addition, the provisions of 
H.R. 2269 were included in the bill (see I.A.2b).
    H.R. 3762 also included several provisions contained in 
H.R. 10, the ``Comprehensive Retirement Security and Pension 
Reform Act of 2001.'' Although most of the provisions of H.R. 
10 were enacted in P.L. 107-16 (see I.A.1b), some provisions 
were not included in the final law because of procedural rules 
in the Senate that allow a point of order to be raised against 
certain measures in reconciliation bills.
    H.R. 3762 also included provisions relating to minimum 
funding requirements and variable rate premiums assessed by the 
Pension Benefit Guaranty Corporation. Finally, H.R. 3762 
clarified that the exercise of incentive stock options and 
stock purchased pursuant to an Employee Stock Purchase Plan 
does not give rise to wage income that is subject to payroll 
taxes or income tax withholding.

g. Taxpayer Protection and IRS Accountability Act

    On March 19, 2002, Representative Houghton introduced H.R. 
3991, the ``Taxpayer Protection and IRS Accountability Act.'' 
The Committee approved the bill, with an amendment, on March 
20, 2002. The bill was considered in the House under suspension 
of the rules on April 10, 2002, but failed to receive the 
necessary two-thirds vote required for passage.
    Most of the provisions of H.R. 3991 (except those related 
to section 527 of the IRC) were included in H.R. 586 (see 
I.A.3a). H.R. 586 passed the House on April 18, 2002, but was 
not considered by the Senate. Some of these provisions were 
subsequently included in H.R. 5728 (see I.A.2m). H.R. 5728 
passed the House by unanimous consent on November 14, 2002, but 
was not considered by the Senate.
    In summary, H.R. 3991 included many provisions previously 
passed by the House in the 106th Congress as part of H.R. 4163, 
the ``Taxpayer Bill of Rights 2000.'' The bill addednew 
provisions to further assist and protect taxpayers and to improve the 
accountability of the IRS. The bill included an exclusion from gross 
income for interest that is paid by the IRS to individual taxpayers on 
overpayments of Federal income tax. The Secretary was given authority 
to address situations where taxpayers inappropriately took advantage of 
the exclusion. Furthermore, H.R. 3991 allowed taxpayers to limit their 
exposure to underpayment interest through the use of a qualified 
reserve account. Amounts deposited in a qualified reserve account could 
either be withdrawn with interest or used to offset an underpayment of 
tax.
    H.R. 3991 also allowed taxpayers to enter into installment 
agreements that do not fully satisfy their tax obligations. The 
IRS was required to re-evaluate the taxpayer's ability to pay 
at least once every 2 years during the running of the 10-year 
statute of limitations on collections. Taxpayers gained further 
protections under the bill through provisions that made 
unauthorized browsing of taxpayer records one of the ``10 
deadly sins'' and granted the IRS Commissioner authority to 
specify penalties up to and including termination for improper 
activities by IRS employees.
    The legislation also increased the total authorization of 
grant funding for low-income taxpayer clinics (from $6 million 
to $15 million) over 3 years. It also included a provision to 
correct the double-reporting problem that State and local 
campaign and political committees experienced in the wake of 
P.L. 106-230, the law that mandated contribution and 
expenditure reporting to the IRS for all organizations 
receiving tax-preferred status under IRC section 527.

h. Encouraging Work and Supporting Marriage Act

    On May 1, 2002, Representative Houghton introduced H.R. 
4626, the ``Encouraging Work and Supporting Marriage Act of 
2002.'' The Committee approved the bill, with an amendment, by 
voice vote on May 2, 2002. The House passed the bill under 
suspension of the rules on May 21, 2002. The Senate did not act 
on the bill.
    In summary, H.R. 4626 accelerated the scheduled increase in 
the standard deduction for married couples filing a joint tax 
return. The scheduled increase was enacted in P.L. 107-16. (See 
I.A.1b.)
    In addition, the bill modified the work opportunity credit 
by: (1) repealing the family income test applicable to 
``qualified ex-felons'' under present law, (2) increasing the 
maximum age for eligibility of food stamp recipients from 25 to 
30 years, and (3) redefining the term ``vocational 
rehabilitation referral'' to reflect changes made in the 
``Ticket to Work and Work Incentives Improvement Act of 1999'' 
(P.L. 106-170).
    Finally, the bill simplified the administration of the work 
opportunity and welfare-to-work credits by merging the two 
credits and conforming their rules.

i. Improving Access to Long-Term Care Act

    On June 17, 2002, Representative Hayworth introduced H.R. 
4946, the ``Improving Access to Long-Term Care Act of 2002.'' 
The Committee approved the bill, with an amendment, on June 19, 
2002. The House approved the bill under suspension of the rules 
on July 25, 2002. The Senate did not act on the bill.
    In summary, H.R. 4946 provided an above-the-line deduction 
for a percentage of qualified long-term care insurance 
premiums. The deductible percentage of qualified long-term care 
insurance premiums was phased-in over 10 years from 25 percent 
to 50 percent. The deduction was available for individuals with 
adjusted gross income between $20,000 and $40,000 (twice this 
amount for married couples filed jointly).
    In addition, the bill provided an additional personal 
exemption to home caregivers of family members. The additional 
personal exemption was phased-in from $500 in 2003 to the full 
exemption amount in 2012 for each qualified family member with 
long-term care needs. (Under present law, the personal 
exemption amount for 2002 is $3,000.)
    Finally, the bill provided additional consumer protections 
for long-term care insurance policies, expanded human clinical 
trial expenses qualifying for the ``orphan drug'' tax credit, 
added the vaccine against Hepatitis A to the list of taxable 
vaccines, and modified Medicare+Choice medical savings accounts 
(MSAs) by permitting individuals who have a Medicare+Choice MSA 
to also have an Archer MSA and allowing employers to make 
contributions to an Archer MSA on behalf of a Medicare eligible 
individual.

j. Tax Relief for Members of the Military

    On July 8, 2002, Representative Houghton introduced H.R. 
5063, the ``Armed Forces Tax Fairness Act of 2002.'' The 
Committee did not consider the bill. The House approved the 
bill under suspension of the rules on July 9, 2002.
    The Senate Committee on Finance approved H.R. 5063, with an 
amendment, on September 12, 2002. The Senate passed H.R. 5063, 
with an amendment, by unanimous consent on October 3, 2002.
    On October 7, 2002, Chairman Thomas introduced H.R. 5557, 
the ``Armed Forces Tax Fairness Act of 2002.'' H.R. 5557 
included the provisions of H.R. 5063 as passed by the House 
(with some modifications). It also included several provisions 
contained in the Senate-passed version of H.R. 5063. H.R. 5557 
passed the House under suspension of the rules on October 9, 
2002. The Senate passed H.R. 5557, with an amendment, by 
unanimousconsent on November 14, 2002. The House did not act on 
the Senate amendment prior to adjourning.
    In summary, H.R. 5557 (as passed by the House) allowed 
members of the uniformed services or Foreign Services to 
suspend (for up to 5 years) the 5-year period used to determine 
the exclusion of gain from the sale of such residence if the 
taxpayer is serving on qualified official extended duty in 
government quarters or at least 150 miles from their principal 
residence.
    The bill also restored the tax-exempt status of the $6,000 
death gratuity payment paid to survivors of members of the 
Armed Services (only $3,000 is excludible under present law). 
The bill also provided an exclusion from gross income for 
amounts received under the U.S. Department of Defense 
Homeowners Assistance Program. In addition, the bill clarified 
that benefits provided under certain dependent care assistance 
programs are excludible from gross income.
    H.R. 5557 also extended certain rules concerning the 
postponement of certain acts under the IRC (such as filing, tax 
payments, etc.) to contingency operations. Such rules presently 
apply only to taxpayers serving in a combat zone. The bill also 
permitted ancestors and lineal descendants of past or present 
members of the Armed Forces to be taken into account in 
determining whether a veterans' organization qualifies for tax-
exempt status.
    The Senate amendment added several provisions to the House-
passed version of H.R. 5557. First, the Senate amendment 
provided an above-the-line deduction of up to $1,500 for 
unreimbursed overnight travel, meals, and lodging expenses 
incurred by National Guard and Reserve members who must travel 
100 miles away from home and stay overnight as part of their 
official duties. Second, the amendment clarified that 
appointments to a military academy are treated as scholarships 
for purposes of payments to and distributions from Coverdell 
Education Savings Accounts and Qualified Tuition Programs. 
Third, it suspended the tax-exempt status of designated 
terrorist organizations and prohibited taxpayers from deducting 
contributions made to such organizations. This provision is 
similar to language in H.R. 5603, which passed the House by 
unanimous consent on October 16, 2002. Fourth, the amendment 
extended IRS user fees through September 30, 2012. Finally, it 
authorized the IRS to enter into partial payment installment 
agreements with taxpayers.

k. Back to School Act

    On July 23, 2002, Representative Schaffer introduced H.R. 
5193, the ``Back to School Tax Relief Act of 2002.'' The 
Committee approved the bill, with an amendment, on September 5, 
2002. The bill was not considered by the House or the Senate.
    In summary, the bill provided an above-the-line deduction 
for up to $3,000 of qualified elementary and secondary 
education expenses each year. The deduction was limited to 
taxpayers whose adjusted gross income is $20,000 or less 
($40,000 in the case of married couples filing jointly). The 
deduction expired after tax year 2005.

l. Retirement Savings and Security Act

    On October 7, 2002, Chairman Thomas introduced H.R. 5558, 
the ``Retirement Savings and Security Act of 2002.'' The 
Committee approved the bill, with an amendment, on October 8, 
2001. The bill included provisions similar to some of the 
provisions contained in H.R. 5553, the ``Protecting America's 
Savings Act of 2002,'' introduced by Representative Portman on 
October 3, 2002. H.R. 5558 was not considered by the House or 
the Senate.
    In summary, H.R. 5558 accelerated the scheduled increases 
in the annual contribution limits for IRAs, qualified pension 
plans, SIMPLE plans, and eligible plans of a State or local 
government or tax-exempt organization (457 plans). The bill 
also accelerated the scheduled increases in catch-up 
contribution limits applicable to these plans. These scheduled 
increases were enacted in the ``Economic Growth and Tax Relief 
Reconciliation Act of 2001'' (P.L. 107-16) (see I.A1b).
    H.R. 5558 also gradually increased the age at which 
mandatory distributions must be made from IRAs and qualified 
pension plans from age 70\1/2\ to age 75.

m. Tax Administration Act

    On November 14, 2002, Chairman Thomas introduced H.R. 5728, 
the ``Tax Administration Act of 2002.'' The Committee 
discharged the bill on November 15, 2002, and the House passed 
the bill by unanimous consent on the same day. The Senate did 
not act on the bill.
    In summary, H.R. 5728 contained 30 provisions to reform the 
penalty and interest provisions of the IRC, improve 
administrative efficiency, further safeguard taxpayer 
confidentiality, and enhance the fairness of the tax collection 
process. These provisions were included in Title II of H.R. 
586, which provided for the permanency of the Economic Growth 
and Tax Relief Reconciliation Act of 2001 (P.L. 107-16) (see 
I.A.3a).

                          3. OTHER TAX MATTERS

a. Permanency of Provisions in Economic Growth and Tax Relief 
        Reconciliation Act of 2001 (P.L. 107-16)

    On June 7, 2001, the Economic Growth and Tax Relief 
Reconciliation Act of 2001 was signed into law (P.L. 107-16) 
(see I.A.1b). The provisions of the new law are scheduled 
toexpire (or ``sunset'') after December 31, 2010, because of a 
procedural rule that permits Senators to raise a point of order against 
extraneous provisions in a reconciliation bill. Under this rule, 
provisions with a revenue effect outside the 10-year revenue-estimating 
period are, by definition, extraneous. The sunset provision was 
included in the bill to prevent a point of order.
            Making the Provisions of P.L. 107-16 Permanent
    On February 13, 2001, Representative Lewis introduced H.R. 
586, the ``Fairness for Foster Care Families Act of 2001.'' As 
introduced, the bill provided that the income exclusion for 
State or local government foster care payments also applied to 
payments made by any qualifying placement agency. The bill also 
expanded the definition of a qualified foster individual to 
include a foster care individual placed by any qualified 
placement agency (thus eliminating the restriction of State or 
local government agency or a tax-exempt agency placement 
applicable to individuals under the age of 19). On May 9, 2001, 
the Committee approved the bill, with an amendment. The bill 
passed the House under suspension of the rules on May 15, 2001, 
and passed the Senate, with an amendment, by unanimous consent 
on February 6, 2002. The provisions of H.R. 586 were included 
in H.R. 3090, the ``Job Creation and Worker Assistance Act of 
2002'' (P.L. 107-147), which was signed into law on March 9, 
2002 (see I.A.1h).
    On April 17, 2002, the Committee on Rules reported H. Res. 
390 to the House. The resolution provided for the consideration 
of the Senate amendment to H.R. 586 with an amendment. The 
amendment substituted the language in the Senate-passed version 
of H.R. 586 with a provision to repeal the sunset provision of 
P.L. 107-16. Thus, the amendment would have permanently 
extended all of the provisions in P.L. 107-16 to which the 
sunset applied. In addition, the amendment would have 
permanently extended the increase in the exemption amount in 
the alternative minimum tax applicable to individuals, which is 
scheduled to expire after December 31, 2005. Finally, the 
amendment included most of the provisions of H.R. 3991, the 
``Taxpayer Protection and IRS Accountability Act of 2002'' (see 
I.A.2g). The House passed the amendment on April 18, 2002.
            Making Certain Provisions of P.L. 107-16 Permanent
    On June 12, 2001, Representative Weldon introduced H.R. 
2143, the ``Permanent Death Tax Repeal Act of 2001.'' The bill 
repealed the sunset provision in the Economic Growth and Tax 
Relief Reconciliation Act of 2001 as it applied to the estate 
and gift tax provisions of that Act. The bill passed the House 
on June 6, 2002. The Senate did not act on the bill.
    On March 20, 2002, Representative Weller introduced H.R. 
4019, a bill to provide that the marriage penalty relief 
provisions of the Economic Growth and Tax Relief Reconciliation 
Act of 2001 shall be permanent. The bill passed the House on 
June 13, 2002. The Senate did not act on the bill.
    On May 22, 2002, Representative Camp introduced H.R. 4800, 
a bill to repeal the sunset provision in the Economic Growth 
and Tax Relief Reconciliation Act of 2001 with respect to the 
expansion of the adoption credit and adoption assistance 
programs. The bill passed the House under suspension of the 
rules on June 4, 2002. The Senate did not act on the bill.
    On May 22, 2002, Representative Shaw introduced H.R. 4823, 
the ``Holocaust Restitution Tax Fairness Act of 2002.'' The 
bill was signed into law on December 17, 2002 (see I.A.1n).
    On June 13, 2002, Representative Portman introduced H.R. 
4931, the ``Retirement Savings Security Act of 2002.'' The bill 
repealed the sunset provision in the Economic Growth and Tax 
Relief Reconciliation Act of 2001 as it applied to the pension 
reform provisions of that Act. The bill passed the House on 
June 21, 2002. The Senate did not act on the bill.
    On July 24, 2002, Representative Hulshof introduced H.R. 
5203, the ``Education Savings and School Excellence Permanence 
Act of 2002.'' The bill repealed the sunset provision in the 
Economic Growth and Tax Relief Reconciliation Act of 2001 as it 
applied to the Coverdell Education Savings Account and 
Qualified Tuition Program provisions of that Act. In addition, 
the bill clarified that distributions from a Coverdell 
Education Savings Account could be used to pay qualified home 
school expenses. The bill also clarified that appointments to a 
military academy are treated as scholarships for purposes of 
payments to and distributions from Coverdell Education Savings 
Accounts and Qualified Tuition Programs (this provision was 
also included in H.R. 5557, the ``Armed Forces Tax Fairness Act 
of 2002,'' as passed by the Senate on November 14, 2002 (see 
I.A.2j)). The bill failed to pass the House under suspension of 
the rules on September 4, 2002 because it did not receive the 
two-thirds vote necessary for passage.

b. Water Quality Financing Act

    On March 12, 2002, Representative Duncan introduced H.R. 
3930, the ``Water Quality Financing Act of 2002.'' The bill 
included several provisions that would increase spending on 
water and sewage facilities. In addition, the bill contained 
two revenue provisions that amended the rules relating to 
private activity bonds. First, the bill provided that private 
activity bonds used to finance water and sewage facilities 
would be exempt from the State volume caps that limit the 
amount of private activity bonds that may be issued annually. 
Second, the bill liberalized the arbitrage restrictions to 
exclude any amounts derived from a Federal grant or related 
State contribution made in connection with certain revolving 
loan funds.
    The Committee approved the bill, with an amendment, on 
April 17, 2002. The amendmentapproved by the Committee deleted 
the two revenue provisions from the underlying bill. H.R. 3930 was not 
considered by the House or the Senate.

c. War Bonds Act

    On September 17, 2001, Representative Sweeney introduced 
H.R. 2899, the ``Freedom Bonds Act of 2001.'' The bill 
authorized the Secretary of the Treasury to designate ``Freedom 
Bonds'' in response to the acts of terrorism perpetrated 
against the United States on September 11, 2001. Proceeds from 
the sale of the bonds could be used to help finance the war 
against terrorism.
    The House passed H.R. 2899 by voice vote on October 23, 
2001. The Senate did not act on the bill. However, the U.S. 
Department of the Treasury announced its intention to re-
designate existing savings bonds as ``Patriot Bonds.'' The 
redesignation of an existing series of savings bonds does not 
require legislative action.

d. House Resolutions

    The House passed several House Resolutions expressing the 
sense of the House that Congress should complete action on 
various legislation so that it may be signed into law.
    On September 17, 2002, Representative Jim Nussle introduced 
H. Res. 524, expressing the sense of the House that Congress 
should complete action on the H.R. 2143, ``Permanent Death Tax 
Repeal Act of 2002'' (see I.A.3a), which would make permanent 
the estate and gift tax provisions of the Economic Growth and 
Tax Relief Reconciliation Act of 2001 (P.L. 107-16). The House 
agreed to the resolution on September 19, 2002.
    On September 19, 2002, Representative Pickering introduced 
H. Res. 540, expressing the sense of the House that Congress 
should complete action on H.R. 3762, the ``Pension Security Act 
of 2002'' (see I.A.2f). H.R. 3762 provided several pension 
protections for workers who participate in employer-sponsored 
pension plans. The House agreed to the resolution on September 
25, 2002.
    On September 24, 2002, Representative Weller introduced H. 
Res. 543, expressing the sense of the House that Congress 
should complete action on H.R. 4019, making marriage tax relief 
permanent (see I.A.3a). The House agreed to the resolution on 
October 2, 2002.
    On September 24, 2002, Representative Sullivan introduced 
H. Res. 544, expressing the sense of the House on permanency of 
pension reform provisions included in the Economic Growth and 
Tax Relief Reconciliation Act of 2001 (P.L. 107-16) (see 
I.A.3a). The House agreed to the resolution on September 25, 
2002.

      4. OTHER HEARINGS ON TAX, TRUST FUND, AND PENSION PROPOSALS

a. Tax Code Simplification

    On July 17, 2001, the Subcommittees on Oversight and Select 
Revenue Measures held a hearing on tax code simplification. The 
hearing focused on the nature and cost of complexity in the tax 
code and the options for simplification. The Subcommittees 
examined proposals by the National Taxpayer Advocate and the 
Joint Committee on Taxation (JCT).

b. Extraterritorial Income Regime

    On February 27, 2002, the Committee held a hearing to 
examine the decision by the World Trade Organization (WTO) that 
the Extraterritorial Income (ETI) regime is a prohibited export 
subsidy. Subsequently, the Subcommittee on Select Revenue 
Measures held hearings on April 10, May 9, and June 13, 2002 to 
examine possible legislative solutions to bring the tax code 
into compliance with the WTO's decision. The Subcommittee 
examined: (1) whether adjustments could be made to the existing 
ETI regime to bring it into compliance, (2) whether fundamental 
reform of the current corporate tax system is a viable 
alternative to the ETI regime, and (3) proposals to modify the 
tax code to promote the competitiveness of U.S. companies while 
meeting international obligations under the WTO.
    On July 11, 2002, Chairman Thomas introduced H.R. 5095, the 
``American Competitiveness and Corporate Accountability Act of 
2002.'' The bill would repeal the ETI regime, improve and 
simplify the U.S. international tax system, increase the 
competitiveness of U.S. companies, and require increased 
corporate accountability.

c. Land Use, Conservation, and Preservation

    On April 30, 2002, the Subcommittee on Select Revenue 
Measures held a hearing on the effect of Federal tax laws on 
land use, conservation, and preservation. The focus of the 
hearing was to examine proposals to expand the tax incentives 
available to individuals and groups seeking to preserve open 
spaces and promote conservation.

d. Modeling the Economic Effect of Changes in Tax Policy

    On May 7, 2002, the Subcommittee on Oversight held a 
hearing to review the economic models and assumptions that are 
used in current revenue estimating processes and to explore 
ways to improve overall forecasting and analysis regarding 
legislation before the Committee on Ways and Means and 
Congress.

e. Tax Incentives for Renewal Communities

    On May 21, 2002, the Subcommittee on Oversight held a 
hearing to examine ways in which Renewal Communities plan to 
use available tax incentives to attract business investment to 
their communities and to highlight potentially useful models 
from Empowerment Zone activities.

f. Inversions

    On June 6, 2002, the Committee held a hearing to examine 
the mechanics of inversion transactions and examine policy 
options that will deter inversions and enhance U.S. 
international competition. Subsequently, the Subcommittee on 
Select Revenue Measures held a hearing on June 25, 2002, to 
examine further options to deter inversions and increase the 
competitiveness of U.S. businesses in the global marketplace.
    On July 11, 2002, Chairman Thomas introduced H.R. 5095, the 
``American Competitiveness and Corporate Accountability Act of 
2002.'' Among other provisions, the bill would deter future 
inversion transactions.

g. Retirement Security and Defined Benefit Plans

    On June 20, 2002, the Subcommittee on Oversight held a 
hearing to examine the role of defined benefit plans in 
retirement security, the rules and regulations governing 
defined benefit pension plans, the advantages and disadvantages 
of offering and participating in such plans, and 
recommendations for improving coverage in defined benefit 
pension plans.

                 B. Legislative Review of Trade Issues


                      1. TRADE PROMOTION AUTHORITY

a. Trade Act of 2002

    On August 6, 2002, the President signed into law H.R. 3009, 
the Trade Act of 2002 (P.L. 107-210), which included the 
Bipartisan Trade Promotion Authority Act of 2002, the Trade 
Adjustment Assistance Reform Act of 2002, the Andean Trade 
Promotion and Drug Eradication Act, the Customs Border Security 
Act of 2002, and a number of miscellaneous provisions. Each of 
these bills included in the Trade Act arose from separate 
legislation (provisions from H.R. 3005, H.R. 3008, H.R. 3009, 
and H.R. 3010), and the history and the content of these bills 
are discussed throughout this report.

b. Trade Promotion Authority

            i. Legislation
    On October 3, 2001, Chairman Thomas, on behalf of himself 
and Representatives Crane, Dreier, Jefferson, Tanner, and 
Dooley, introduced H.R. 3005, the Bipartisan Trade Promotion 
Authority Act of 2001. On October 5 and October 9, the 
Committee met to consider the legislation. At that time, 
Chairman Thomas offered an amendment in the nature of a 
substitute, which was agreed to by voice vote. Representative 
Rangel offered an amendment in the nature of a substitute, 
which was defeated by a recorded vote of 12 yeas, 26 nays, and 
1 present. On October 9, the Committee on Ways and Means 
favorably reported the bill, as amended, by a recorded vote of 
26 yeas to 13 nays (H. Rept. 107-249).
    On December 6, 2001, the House passed H.R. 3005, as 
amended, by a recorded vote of 215 to 214. The House defeated a 
motion to recommit with instructions offered by Representative 
Rangel by a vote of 162 to 267.
    On December 12, 2001, the Senate Committee on Finance 
reported out its version of H.R. 3005, which included 
amendments to the House-passed version of Trade Promotion 
Authority (TPA) (S. Rept. 107-139). On May 23, 2002, the Senate 
agreed to an amendment to include its version of Trade 
Promotion Authority, the Andean Trade Promotion and Drug 
Eradication Act, TAA, the Generalized System of Preferences 
(GSP), and other miscellaneous provisions as a substitute 
amendment to the House-passed H.R. 3009, the Andean Trade 
Promotion and Drug Eradication Act, by a vote of 66 to 30.
    On June 26, 2002, the House, pursuant to H. Res. 450, 
agreed to the Senate amendment with an amendment to include the 
House versions of Trade Promotion Authority, the Andean Trade 
Promotion and Drug Eradication Act, TAA, and the GSP, by a vote 
of 216 to 215. A conference committee to reconcile the House 
and Senate versions of H.R. 3009 was then formed, chaired by 
Chairman Thomas.
    On July 27, 2002, the House passed the conference report to 
H.R. 3009 by a recorded vote of 215 to 212. On August 1, the 
Senate passed the conference report by a vote of 64 to 34. On 
August 6, 2002, the President signed the bill into law (P.L. 
107-210).
    As enacted, the Bipartisan Trade Promotion Authority Act of 
2002 grants Trade Promotion Authority to the President through 
July 1, 2005, with an extension through July 1, 2007, subject 
to disapproval. This authority provides that once the President 
formally submits to Congress legislation to implement a trade 
agreement, Congress must consider the legislation within 
certain deadlines and without amendment. In return, the 
Congress provides the Administration with detailed guidance on 
its objectives for such negotiations and improves consultations 
between the Administration and Congress, before, during, and 
after negotiations of a trade agreement. In addition, the bill 
establishes a new Congressional Oversight Group (COG) (see 
below) to provide an opportunity for consultation with the 
Administration by all committees with jurisdiction over laws 
that might be affected by a trade agreement.
    The legislation contains principal negotiating objectives 
relating to agriculture, goods, services, investment, 
intellectual property, transparency, anti-corruption, and 
electronic commerce. The objectives also direct the President 
to preserve the ability of the United States to enforce 
rigorously its trade laws, avoid agreements that lessen the 
effectiveness of unfair trade disciplines, and address and 
remedy market distortions that lead to dumping and 
subsidization. With regard to labor and environment, the 
legislation directs the President to ensure that parties to 
trade agreements do not fail to effectively enforce their labor 
or environmental laws through a sustained course of action or 
inaction in a manner affecting trade. With respect to 
enforcement, the legislation directs the President to seek 
enforcement mechanisms in trade agreements that will result in: 
the effective and timely resolution of disputes; the provision 
of trade-liberalizing compensation; the imposition of 
appropriate penalties to the situation with the aim of not 
adversely affecting interests not party to the dispute while 
maintaining the effectiveness of the enforcement mechanism; and 
treating all U.S. principal negotiating objectives equally with 
respect to ability to use dispute settlement, availability of 
equivalent procedures, and availability of equivalent remedies. 
The legislation also contains a number of other important 
priorities for the President in conducting negotiations, such 
as capacity building and reports.
    The legislation provides that TPA would not apply to an 
agreement if both Houses separately agree to a procedural 
disapproval resolution within any 60-day period stating that 
the Administration has failed to consult with Congress. In 
addition, the legislation requires the President to provide a 
180-day advance report on any proposals advanced in trade 
negotiations that could require amendments to trade remedy 
laws, and any Member may introduce a privileged non-binding 
resolution which identifies whether the proposals referred to 
in the President's report are consistent with the trade remedy 
negotiating objectives. If such a resolution is reported by the 
Committee, then a disapproval resolution for failure to consult 
is not in order, and vice versa. Finally, the statute does not 
include the so-called ``Dayton-Craig Amendment,'' included in 
the Senate version of the bill, which would have prohibited the 
use of TPA procedures for any changes to U.S. trade remedy 
laws.
            ii. Hearing on President Bush's Trade Agenda for 2001
    On March 7, 2001, the Committee held a hearing on President 
Bush's trade agenda for 2001. This hearing addressed the 
content and strategy of trade negotiations in which the United 
States is participating, including negotiations to establish 
the Free Trade Area of the Americas (FTAA) and on the World 
Trade Organization (WTO) ``built-in agenda'' on services and 
agriculture. The Committee also reviewed the status of 
preparations to launch a new round of multilateral negotiations 
in the WTO and progress in negotiations to establish trade 
agreements with Singapore, Chile, and other nations in the 
Pacific Rim region. Finally, the Committee analyzed the 
relationship of these negotiations to trade negotiating 
authority and whether the United States was disadvantaged by 
not having the authority in place.
            iii. Hearing on President Bush's Trade Agenda for 2002
    Following passage of H.R. 3005, legislation to grant the 
President Trade Promotion Authority, the Committee held a 
hearing on February 7, 2002, to address President Bush's trade 
agenda for 2002 and the content and strategy of these trade 
negotiations. At this hearing, the Committee also examined: (1) 
the success of the WTO Ministerial Meeting which launched the 
Doha Development Agenda, a new round of multilateral trade 
negotiations; and (2) progress in negotiations with Chile and 
Singapore, in light of House passage of H.R. 3005.
            iv. Field Hearing on Benefits of Trade to the Medical 
                    Technology and Agriculture Sectors
    The Subcommittee held a field hearing on the benefits of 
trade to the medical technology and agriculture sectors in 
Bloomington, Minnesota, on May 14, 2001. The goals of this 
field hearing were to promote awareness of trade issues 
affecting the medical technology and agriculture industries and 
to examine the importance of international markets for both of 
these industries. Witnesses, including Minnesota Governor 
Ventura, focused on significant trade issues such as 
challenging foreign-imposed non-tariff barriers on U.S. medical 
technology and agriculture products, the negotiations in the 
WTO on services and agriculture, China's entry into the WTO, 
and the long-standing trade dispute with the European Union 
(EU) over genetically modified organisms.
            v. Hearing on Free Trade Deals and Whether the United 
                    States Is Losing Ground
    On March 29, 2001, the Trade Subcommittee held a hearing on 
the increasing number of bilateral and regional trade 
agreements to which the United States is not a party and the 
implications for the United States. This hearing focused on how 
these new trade agreements disadvantage U.S. business, workers, 
and families and assessed opportunities for the United States 
to move forward with new negotiations.

c. Congressional Oversight Group

            i. Trade Act of 2002
    Section 2017 of the Trade Act of 2002 (P.L. 107-210) 
establishes the COG, to be co-chaired by the Chairmen of the 
House Committee on Ways and Means and the Senate Committee on 
Finance and to be comprised of the Chairman and Ranking Member 
of those Committees of the House and Senate which would have 
jurisdiction over provisions of law affected by trade agreement 
negotiations during this Congress. The purpose of the COG is to 
provide the President and the United States Trade 
Representative (USTR) with adviceregarding the formulation of 
specific objectives, negotiating strategies and positions, the 
development of trade agreements, and compliance and enforcement of 
negotiated commitments under trade agreements.
            ii. Operation of the COG
    In mid-September 2002, Chairman Thomas invited the Chairmen 
and Ranking Members of the following Committees of the House to 
participate in the COG: Committees on Ways and Means (total of 
five Members); Agriculture, Energy and Commerce, Financial 
Services, Judiciary, Rules, International Relations, Government 
Reform and Oversight, and Resources. In addition, he invited 
the Chairmen and Ranking Members of the Committees on Education 
and the Workforce and Small Business to participate in the 
organizational meeting of the COG. The first meeting of the COG 
was held on September 19, 2002. In addition, Chairman Thomas 
convened a sub-group of the House COG on September 26, 2002, to 
discuss specific issues relating to the Chile and Singapore 
free trade agreement negotiations.

                      2. MULTILATERAL TRADE ISSUES

a. Foreign Sales Corporations

    On January 14, 2002, the WTO Appellate Panel issued its 
report finding the United States Extraterritorial Income 
Exclusion Act (ETI) rules to be a prohibited export subsidy, 
marking the fourth and final time in 2\1/2\ years that the 
United States has lost this issue, twice in the Foreign Sales 
Corporation (FSC) case and twice in the ETI case. On August 30, 
2002, a WTO Arbitration Panel authorized the EU to apply trade 
sanctions in the amount of $4 billion against U.S. exports to 
the EU.
    On February 27, 2002, the Committee held a hearing on the 
WTO decision in order to (1) outline the history of the FSC-ETI 
dispute, (2) analyze the January 14, 2002, WTO Appellate Panel 
Decision, and (3) discuss the potential trade ramifications of 
the decision. Officials from the U.S. Department of the 
Treasury and the USTR, as well as representatives from the 
business community, testified at the hearing.
    On July 11, 2002, Chairman Thomas introduced H.R. 5095, the 
American Competitiveness and Corporate Accountability Act of 
2002, in order to put the United States in compliance with its 
WTO obligations and to address competitiveness and corporate 
accountability issues. A fuller discussion of this legislation 
and other hearings of the Committee is located in the tax 
section of this report.

b. Administration Notification of WTO Negotiations

    On November 4, 2002, the Committee received a letter from 
Ambassador Zoellick notifying Congress that the United States 
is engaged in negotiations to strengthen and extend as well as 
establish new trade agreements under the auspices of the World 
Trade Organization.

c. U.S. General Accounting Office (GAO) Report on Doha Round

    On September 4, 2002, the Committee received a GAO report, 
requested by Chairman Thomas, Subcommittee Chairman Crane, and 
Senator Grassley, on the preparations for and the outcome of 
the Doha Ministerial Meeting, held in November 2001, which 
succeeded in launching a new round of multilateral trade 
negotiations. In this report, GAO analyzed the factors that 
contributed to the meeting's successful outcome and evaluated 
the most significant challenges to the WTO in the overall 
negotiations.

d. H. Con. Res. 262

    On November 7, 2001, the House passed H. Con. Res. 262 by a 
vote of 410 to 4, expressing the sense of Congress on trade 
remedies in negotiations in the WTO. The bill was sponsored by 
Representatives English, Berry, Brown (OH), Callahan, Dingell, 
Doyle, Ehrlich, Evans, Gekas, Houghton, Jones (OH), Myrick, 
Ney, Quinn, Shimkus, Spratt, Stupak, and Visclosky. The 
resolution urged the President during the WTO Ministerial in 
Doha, Qatar, and any subsequent rounds of WTO negotiations to: 
avoid an agreement which lessens the effectiveness of domestic 
and international disciplines on unfair trade, especially 
dumping and subsidies; and ensure that U.S. exports are not 
subject to the abusive use of trade laws, including antidumping 
and countervailing duty laws, by other countries. No further 
action was taken.

                 3. BILATERAL AND REGIONAL TRADE ISSUES

a. Andean Countries

    On March 7, 2001, May 8, 2001, and February 7, 2002, the 
Committee held hearings on whether to extend and expand trade 
benefits for Colombia, Peru, Ecuador, and Bolivia under the 
Andean Trade Preference Act, which expired on December 4, 2001. 
On October 3, 2001, Subcommittee Chairman Crane introduced H.R. 
3009 to extend and enhance trade benefits available under the 
Andean Trade Preferences Act (ATPA) as a way to create viable 
alternatives to illicit drug production, thereby enhancing 
political security in the Andean region and the hemisphere. 
Specifically, the bill expands benefits for apparel made of 
U.S. fabric, Andean apparel made of regional fabric subject to 
a cap, and certain tuna. On October 5, 2001, the Committee on 
Ways and Means approved H.R. 3009, as amended, by voice vote 
(H. Rept. 107-290). The House approved H.R. 3009 on November 
16, 2001, by voice vote.
    On December 14, 2001, the Senate Committee on Finance 
reported H.R. 3009, as amended (S. Rept. 107-126). The 
amendments adopted by the Senate Committee on Finance differed 
from trade provisions in H.R. 3009, as approved by the House, 
by requiring that imports of apparel products from the Andean 
region qualifying for duty free and quota free entry be made of 
U.S. yarn and fabric. In addition, the Senate Committee on 
Finance bill provided trade benefits for a small allowance of 
knit apparel made from U.S. yarn. On May 23, 2002, the Senate 
passed H.R. 3009, as amended. On June 26, 2002, the House 
concurred with the Senate amendment with an amendment pursuant 
to H. Res. 450, which contained the Andean language already 
passed by the House. The conference report was passed by the 
House on July 26, 2002, and by the Senate August 1, 2002. The 
bill was signed into law on August 6, 2002 (P.L. 107-210).
    On January 31, 2001, the Committee received the Third 
Report to Congress on the Operation of the Andean Trade 
Preference Act, prepared by USTR pursuant to P.L. 102-182.

b. U.S.-Jordan Free Trade Agreement Implementation Act

    The United States-Jordan Free Trade Agreement (FTA), signed 
on October 24, 2000, was the first FTA with an Arab nation and 
was the culmination of many years of increasing U.S.-Jordanian 
economic integration. The FTA strengthens U.S.-Jordanian 
bilateral relations, expresses the United States' appreciation 
for Jordan's role in the Middle East peace process and in 
cooperating in international counter-terrorism activities, 
promotes economic growth in the Middle East, improves the 
region's stability and security, and helps Jordan's efforts to 
promote economic reform and liberalization. It also signals to 
Jordan's neighbors in the Middle East the benefits to 
maintaining peace and instituting open economic regimes.
    President Clinton transmitted the agreement to Congress on 
January 6, 2001 (H. Doc. 107-15). The Jordanian parliament 
ratified the agreement in May 2001. On April 4, 2001, His 
Majesty King Abdullah II of Jordan met with the Committee on 
Ways and Means to discuss implementation of the FTA.
    On July 23, 2001, USTR Robert Zoellick and Jordanian 
Ambassador Marwan Muasher exchanged formal and official letters 
which discussed the implementation of the agreement's dispute 
settlement procedures. In the letters, both countries stated 
their intention not to apply the agreement's dispute settlement 
enforcement procedures in a manner that results in blocking 
trade. The letters also stated that bilateral consultations and 
other procedures (i.e., alternative mechanisms) would be 
appropriate measures that will help secure compliance without 
recourse to traditional trade sanctions.
    On July 24, 2001, H.R. 2603, the United States-Jordan Free 
Trade Area Implementation Act of 2001, was introduced by 
Chairman Thomas and was referred to the Committee on Ways and 
Means and to the Committee on the Judiciary. The Committee on 
Ways and Means marked up H.R. 2603 and on July 31, 2001, 
favorably reported it with an amendment in the nature of a 
substitute by voice vote. The Committee on the Judiciary was 
discharged from H.R. 2603 on July 31, 2001, following an 
exchange of letters between Chairman Thomas and Judiciary 
Chairman Sensenbrenner acknowledging the Judiciary Committee's 
jurisdiction over certain provisions in H.R. 2603 and agreeing 
to forego Judiciary Committee consideration of the bill.
    On July 31, 2001, the House passed H.R. 2603 under 
suspension by voice vote. On September 24, 2001, the Senate 
Committee on Finance was discharged from consideration of H.R. 
2603 by unanimous consent, and the Senate approved the bill by 
voice vote. On September 28, 2001, H.R. 2603 was signed into 
law by the President (P.L. 107-043).

c. Caribbean Basin

    H.R. 3009, the Andean Trade Promotion and Drug Eradication 
Act, which was approved by the Committee on October 5, 2001, by 
voice vote, contained several provisions relating to trade with 
Caribbean Basin countries as described below:
    1. Knit-to-shape amendment: Draft regulations issued by 
Customs to implement P.L. 106-200 stipulate that knit-to-shape 
garments, because technically they do not go through the fabric 
stage, are not eligible for trade benefits under the Act. 
Sections 3106 and 3107 of H.R. 3009 amended P.L. 106-200 to 
clarify that preferential treatment is provided to knit-to-
shape apparel articles assembled in beneficiary countries.
    2. Hybrid cutting amendment: Draft regulations issued by 
Customs to implement P.L. 106-200 deny preferential access to 
garments that are cut both in the United States and beneficiary 
countries, on the rationale that the legislation does not 
specifically list this variation in processing (the so-called 
``hybrid cutting problem''). Section 3107 of H.R. 3009 adds new 
rules in the Caribbean Basin Trade Partnership Act (CBTPA) to 
provide preferential treatment for apparel articles that are 
cut both in the United States and beneficiary countries.
    3. Increases in caps: P.L. 106-200 extended duty-free 
benefits to knit apparel made in CBI countries from regional 
fabric made with U.S. yarn and to knit-to-shape apparel (except 
socks), up to a cap of 250,000,000 square meter equivalents 
(SMEs), with a growth rate of 16 percent per year for first 3 
years. Section 3106 of H.R. 3009 raises this cap to the 
following amounts: 250,000,000 SMEs for the 1-year period 
beginning October 1, 2001; 500,000,000 SMEs for the 1-year 
period beginning on October 1, 2002; 850,000,000 SMEs for the 
1-year period beginning on October 1, 2003; 970,000,000 SMEs in 
each succeeding 1-year period through September 30, 2008. P.L. 
106-200 extends benefits for an additional category of CBI 
regional knit apparel products (T-shirts) up to a cap of 4.2 
million dozen,growing 16 percent per year for the first 3 
years. Section 3106 of H.R. 3009 raises this cap to the following 
amounts: 4,872,000 dozen during the 1-year period beginning October 1, 
2001; 9,000,000 dozen for the 1-year period beginning on October 1, 
2002; 10,000,00 dozen for the 1-year period beginning on October 1, 
2003; 12,000,000 dozen in each succeeding 1-year period through 
September 30, 2008.
    The House approved H.R. 3009, including these provisions 
relating to trade with Caribbean countries (although the caps 
were slightly different) on November 16, 2001, by voice vote. 
On December 14, 2001, the Senate Committee on Finance reported 
H.R. 3009, as amended (S. Rept. 107-126). The amendments 
adopted by the Senate Committee on Finance did not include any 
provisions relating to trade with Caribbean Basin countries. On 
May 23, 2002, the Senate passed H.R. 3009, as amended. On June 
26, 2002, the House concurred with the Senate amendment with an 
amendment pursuant to H. Res. 450, which included the 
provisions related to trade with Caribbean Basin countries 
described above. In addition, H. Res. 450 incorporated one 
provision relating to trade with Caribbean Basin countries that 
was not included in H.R. 3009 when it passed the House. The new 
provision is a requirement that apparel made of U.S. knit or 
woven fabric assembled in CBTPA country qualifies for benefits 
only if the U.S. knit or woven fabric is dyed and finished in 
the United States.
    The conference agreement to H.R. 3009 contains increases in 
the quotas nearly identical to the levels approved by the House 
as well as the dyeing and finishing change, the knit-to-shape 
rule, and the hybrid cutting rule. On July 26, 2002, the House 
agreed to the conference report, and on August 1, 2002, the 
Senate agreed to the conference report. The bill was signed 
into law on August 6, 2002 (P.L. 107-210).
    The conference report on the Supplemental Appropriations 
Bill for the fiscal year ending September 30, 2002, H.R. 4775, 
which passed the House on July 23, 2002, by a vote of (397 to 
32), includes a provision within the jurisdiction of the 
Committee on Ways and Means. Section 3001 of the conference 
report creates a new requirement that apparel made of U.S. knit 
or woven fabric assembled in CBTPA country qualifies for 
benefits only if the U.S. knit or woven fabric is dyed and 
finished in the United States. H.R. 4775 was signed into law on 
August 2, 2002.
    On October 1, 2002, Ambassador Zoellick notified the 
Committee of his intention to initiate free trade agreement 
negotiations with the five member countries of the Central 
American Economic Integration System (Costa Rica, El Salvador, 
Guatemala, Honduras, and Nicaragua).
    In September 2001, the Committee received a report prepared 
by the U.S. International Trade Commission (ITC) on the impact 
of Caribbean Basin Economic Recovery Act on U.S. industries and 
consumers.
    On February 19, 2002, a bipartisan staff delegation from 
the Committee on Ways and Means conducted an oversight trip to 
Montgomery and Alexander City, Alabama to observe yarn 
spinning, knitting, dyeing and finishing, and manufacturing of 
cut apparel parts for ``southbound shipping'' to Mexico and 
Central America. Representatives from these manufacturing 
operations explained that U.S. firms are made stronger against 
Asian competition by the ability to take advantage of trade 
preferences under the CBTPA.
    Between February 20-22, 2002, the delegation then traveled 
to Guatemala City, Guatemala, and Tegucigalpa, Honduras, to 
discuss bilateral and regional trade issues with government and 
private sector officials. The issues discussed in Guatemala and 
Honduras included: (1) The possible negotiation of a free trade 
agreement between the United States and Central American 
countries, (2) implementation of the CBTPA, (3) the potential 
effects of a possible amendment to the CBTPA to require that 
U.S. fabric qualifying for benefits under the Act be dyed and 
finished in the United States, (4) the status of legislation to 
grant the President Trade Promotion Authority, and (5) status 
of negotiations to establish the FTAA.

d. Africa

    P.L. 107-210 contains several provisions relating to trade 
with African countries described below:
    1. Knit-to-shape amendment: Draft regulations issued by 
Customs to implement P.L. 106-200 stipulate that knit-to-shape 
garments, because technically they do not go through the fabric 
stage, are not eligible for trade benefits under the Act. 
Sections 3106 and 3107 of H.R. 3009 amend P.L. 106-200 to 
clarify that preferential treatment is provided to knit-to-
shape apparel articles assembled in beneficiary countries.
    2. Hybrid cutting amendment: Draft regulations issued by 
Customs to implement P.L. 106-200 deny preferential access to 
garments that are cut both in the United States and beneficiary 
countries, on the rationale that the legislation does not 
specifically list this variation in processing (the so-called 
``hybrid cutting problem''). Sections 3107 of H.R. 3009 adds 
new rules to the African Growth and Opportunity Act (AGOA) to 
provide preferential treatment for apparel articles that are 
cut both in the United States and beneficiary countries.
    3. Merino wool amendment: AGOA was supposed to provide 
duty-free, quota-free treatment to sweaters knit in African 
beneficiary countries from fine merino wool yarn, regardless of 
where the yarn was formed. However, due to a drafting problem, 
the wrong diameter was included, making it impossible to use 
the provision. Section 3107 of the House bill corrects the yarn 
diameter in the AGOA legislation so that sweaters knit to shape 
from merino wool of a specific diameter are eligible.
    4. Botswana and Namibia: Botswana and Namibia exceed the 
income eligibility for the least developed countries, set at 
$1,500 in AGOA, and therefore these countries were not eligible 
to use third country fabric for the transition period under the 
AGOA regional fabric country cap. Section 3105 of H.R. 3009 
allows Namibia and Botswana to use third country fabric for the 
transition period under the AGOA regional fabric country cap.
    5. Eligibility and increase in caps: Section 112(b)(3) of 
the AGOA provides preferential treatment for apparel made in 
beneficiary sub-Saharan African countries from ``regional'' 
fabric (i.e., fabric formed in one or more beneficiary 
countries) from yarn originating either in the United States or 
one or more such countries. Section 112(b)(3)(B) establishes a 
special rule for lesser developed beneficiary sub-Saharan 
African countries which provides preferential treatment, 
through September 30, 2004, for apparel wholly assembled in one 
or more such countries regardless of the origin of the fabric 
used to make the articles. Section 112(b)(3)(A) establishes a 
quantitative limit or ``cap'' on the amount of apparel that may 
be imported under section 112(b)(3) or section 112(b)(3)(B). 
This ``cap'' is 1.5 percent of the aggregate square meter 
equivalents of all apparel articles imported into the United 
States for the year that began October 1, 2000, and increases 
in equal increments to 3.5 percent for the year beginning 
October 1, 2007. Section 3107 clarifies that apparel wholly 
assembled in one or more beneficiary sub-Saharan African 
countries from components knit-to-shape in one or more such 
countries from U.S. or regional yarn is eligible for 
preferential treatment under section 112(b)(3) of AGOA. 
Similarly, section 3015 clarifies that apparel knit-to-shape 
and wholly assembled in one or more lesser developed 
beneficiary sub-Saharan African countries is eligible for 
preferential treatment, regardless of the origin of the yarn 
used to make such articles. The legislation increases the 
``cap'' by changing the applicable percentages from 1.5 percent 
to 3 percent in the year that began October 1, 2000, and from 
3.5 percent to 7 percent in the year beginning October 1, 2007.
    The Committee approved H.R. 3009, which included the 
provisions described above relating to trade with Africa, on 
October 5, 2001, by voice vote, and the House approved the bill 
on November 16, 2001, by voice vote. On December 14, 2001, the 
Senate Committee on Finance reported H.R. 3009, as amended (S. 
Rept. 107-126). The amendments adopted by the Senate Committee 
on Finance did not include any provisions relating to trade 
with African countries. On May 23, 2002, the Senate passed H.R. 
3009, as amended. On June 26, 2002, the House concurred with 
the Senate amendment with an amendment pursuant to H. Res. 450, 
which included the House-passed provisions related to trade 
with African countries. The conferees retained the House 
provisions but amended the cap increase to limit it to apparel 
products made with regional or U.S. fabric and yarn (meaning no 
increase in amounts of apparel made of third country fabric 
beyond current law). On July 26, 2002, the House agreed to the 
conference report, and on August 1, 2002, the Senate agreed to 
the conference report. The bill was signed into law on August 
6, 2002 (P.L. 107-210).
    In December 2000 and 2001, the Committee received annual 
reports by the ITC on U.S. Trade and Investment with sub-
Saharan Africa that are required in P.L. 106-200.
    In May 2000 and 2001, the Committee received annual reports 
by the President prepared by USTR on U.S. Trade and Investment 
Policy Toward sub-Saharan Africa and Implementation of the 
Africa Growth and Opportunity Act.
    On November 4, 2002, the Committee received a letter from 
Ambassador Zoellick notifying Congress that the President 
intends to initiate negotiations for a free trade agreement 
with the five member countries of the Southern African Customs 
Union (Botswana, Lesotho, Namibia, South Africa, and 
Swaziland).

e. Iran and Libya Sanctions Act Renewal

    The Iran and Libya Sanctions Act (ILSA) (P.L. 104-172), 
approved August 5, 1996, mandates sanctions against foreign 
investment in the petroleum sectors of Iran and Libya, as well 
as exports of weapons, oil equipment, and aviation equipment to 
Libya in violation of United Nations Resolutions 748 and 883. 
This law expired on August 5, 2001.
    In general, ILSA requires the President to impose at least 
two out of a menu of six sanctions on foreign companies that 
make an investment of $20 million in 1 year in Iran's energy 
sector, or $40 million in 1 year in Libya's energy sector. 
There are two grounds on which the President may waive 
sanctions. First, under section 4(c) of P.L. 104-172, the 
President may waive sanctions for investment in Iran for firms 
of countries that join a multilateral sanctions regime, 
including economic sanctions, against Iran. Second, under 
Section 9(c) of the law, the President may waive sanctions on 
the grounds that doing so is important to the U.S. national 
interest. This waiver applies to Iran and Libya.
    On June 20, 2001, H.R. 1954, the ``ILSA Extension Act of 
2001,'' was ordered reported by the Committee on International 
Relations (H. Rept. 107-107 Part I) and sequentially referred 
to the Committee on Ways and Means. The Committee on Ways and 
Means reported the bill, as amended, on July 12, 2001 (H. Rept. 
107-107 Part II). As reported by the Committee on Ways and 
Means, H.R. 1954 extended the Act for 5 years and established a 
review mechanism to allow Congress to consider termination of 
the Act after: (1) receiving a Presidential report on the 
effectiveness of the sanctions, and (2) assessing the impact of 
sanctions on other foreign policy and national security 
interests of the United States. The House passed H.R. 1954 
under suspension on July 26, 2001, by a vote of 409 to 6 (with 
1 present). H.R. 1954 passed the Senate without amendment by 
unanimous consent on July 21, 2001, and was signed into law on 
August 3, 2001 (P.L. 107-24).

f. China

    On June 1, 2001, the President announced his intention to 
waive for another year the freedom of emigration requirements 
in Title IV of the Trade Act of 1974 with respect to the 
People's Republic of China, thereby granting normal trade 
relations (NTR) treatment to China between July 1, 2001 and 
June 30, 2002 (H. Doc. 107-79). Although Congress had passed in 
the 106th Congress legislation to grant permanent normal trade 
relations to China, that legislation did not take effect until 
the President certified the terms of China's accession. On June 
5, 2001, Representative Rohrabacher introduced H.J. Res. 50, a 
joint resolution to disapprove the extension of the waiver 
authority contained in section 402(c) of the Trade Act of 1974 
with respect to the People's Republic of China, recommended by 
the President on June 1, 2001. On July 10, 2001, the Trade 
Subcommittee held a hearing on overall United States trade 
relations with the People's Republic of China and the status of 
China's negotiations to join the WTO, and to consider the 
extension of NTR status for China for an additional year. On 
July 12, 2001, the Committee reported H.J. Res 50 adversely, 
without amendment (H. Rept. 107-145). On July 19, 2001, the 
House defeated H.J. Res. 50 by a vote of 169 to 259. The effect 
of this resolution would have been to withdraw NTR benefits 
from Chinese products.
    On November 13, 2001, the House received a message from the 
President certifying that the terms and conditions for 
accession of China to the WTO are at least equivalent to those 
agreed to in the November 15, 1999, bilateral agreement between 
the United States and China. On December 27, 2001, the 
President granted permanent nondiscriminatory treatment (normal 
trade relations treatment) pursuant to P.L. 106-286. The 
Committee on Ways and Means continues to monitor the progress 
China is making in implementing the obligations it assumed when 
it joined the WTO on December 11, 2001.
    A bipartisan delegation of the Committee on Ways and Means 
staff and the Senate Committee on Finance staff participated in 
an oversight trip to China with Undersecretary of Commerce 
Grant Aldonas from April 1-7, 2002. The delegation visited 
Beijing and Shanghai to investigate compliance issues and to 
highlight the importance that Congress and the Administration 
place on China's full implementation of its trade obligations 
resulting from China's accession to the WTO on December 11, 
2001.
    During the 107th Congress, the Committee on Ways and Means 
received two studies on China from the GAO. On October 3, 2002, 
the Committee received a report requested by Chairman Thomas 
and Representative Rangel entitled ``World Trade Organization: 
Analysis of China's Commitments to Other Members.'' On 
September 23, 2002, the Committee received a report, also 
requested by these Members, entitled ``World Trade 
Organization: Selected U.S. Company Views about China's 
Membership.'' The GAO's work for the Committee in assessing 
China's compliance with its WTO obligations is ongoing.

g. Vietnam

            i. H.J. Res. 51
    Vietnam's trade status is subject to the ``Jackson-Vanik'' 
provisions in Title IV of the Trade Act of 1974. This provision 
of law governs the extension of NTR, including NTR tariff 
treatment, and access to U.S. Government credits, or credit or 
investment guarantees, to nonmarket economy countries 
ineligible for NTR treatment as of the enactment of the Act. A 
country subject to the provision may gain eligibility for U.S. 
trade financing programs by complying with the freedom of 
emigration provisions under the Act or by receiving a 
Presidential waiver of such requirements. The extension of NTR 
tariff treatment also requires the conclusion and approval by 
Congress of a bilateral trade agreement with the United States 
providing for reciprocal nondiscriminatory treatment.
    The President first determined in 1998 that a Jackson-Vanik 
waiver for Vietnam would substantially promote the freedom of 
emigration objectives under the Trade Act of 1974. The 
President has renewed Vietnam's waiver every year since 1998, 
most recently on June 3, 2002 (H. Doc. 107-221).
    The U.S.-Vietnam bilateral trade agreement (BTA) was signed 
by USTR Charlene Barshefsky and Vietnam's Trade Minister Vu 
Khoan on July 13, 2000. On June 8, 2001, President Bush 
transmitted the agreement to Congress for its approval. The BTA 
is the most comprehensive trade agreement ever negotiated with 
a non-market economy country. It covers most major trade issues 
and is aimed at bringing about over time significant reforms in 
Vietnam's trade and economic policies. Overall, the BTA commits 
Vietnam to open its goods and services markets, implement 
significant economic reforms, expand rule of law, and broaden 
economic freedom.
    On June 12, 2001, identical bills were introduced in the 
House and Senate (by request) to grant normal trade relations 
status to Vietnam (subject to annual waivers) by approving the 
BTA. H.J. Res. 51 was introduced in the House by 
Representatives Armey, Gephardt, and Crane; S.J. Res. 16 was 
introduced in the Senate by Senators Daschle and Lott.
    On July 27, 2001, the Senate Committee on Finance reported 
favorably S.J. Res. 16 without amendment by a voice vote with a 
quorum present (S. Rept. 107-49). On September 5, 2001, the 
Committee on Ways and Means reported favorably H.J. Res. 51 
without amendment by voice vote (H. Rept. 107-198). On 
September 6, 2001, the House approved H.J. Res. 51 without 
amendment by voice vote. On October 3, 2001, the Senate 
approved H.J. Res. 51 without amendment by a vote of 88 to 12. 
On October 16, 2001, the President signed H.J. Res. 51 (P.L. 
107-052). On December 10, 2001, USTR Robert Zoellick and 
Vietnamese Deputy Prime Minister Nguyen Tan Dungon formally 
exchanged letters allowing the BTA to enter into force and NTR 
for Vietnam to become effective, subject to annual waivers.
            ii. H.J. Res. 55
    Under the Trade Act of 1974, in order for Vietnam to 
continue to be eligible for NTR status and U.S. Government 
credits, or credit or investment guarantees, the President is 
required to submit to Congress a recommendation to extend 
Vietnam's waiver from the freedom of emigration requirements 
for a 12-month period no later than 30 days prior to the 
previous waiver's expiration. This waiver authority continues 
in effect unless disapproved by Congress within 60 calendar 
days after the expiration of the previous waiver (i.e., 
September 1). Disapproval would take the form of a joint 
resolution disapproving of the President's waiver 
determination. The President renewed Vietnam's waiver on June 
1, 2001 (H. Doc. 107-82).
    H.J. Res. 55 was introduced on June 21, 2001, by 
Representative Rohrabacher to disapprove the President's 
extension of Vietnam's waiver. On July 23, 2001, the Committee 
on Ways and Means reported adversely H.J. Res. 55 without 
amendment by voice vote (H. Rept. 107-154). On July 24, 2002, 
H.J. Res. 55 failed in the House by a vote of 91 to 324 (with 1 
present vote), thus leaving NTR status in place for an 
additional year.
            iii. H.J. Res. 101
    On June 3, 2002, the President renewed Vietnam's waiver 
from the Jackson-Vanik freedom of emigration requirements in 
Title IV of the Trade Act of 1974 (H. Doc. 107-221). H.J. Res. 
101 was introduced on June 25, 2002, by Representative 
Rohrabacher to disapprove the President's extension of 
Vietnam's waiver. On July 18, 2002, the Committee's 
Subcommittee on Trade held a hearing on the President's waiver 
for Vietnam. Witnesses at the hearing included Ralph Ives, 
Assistant USTR for Asia and the Pacific; Chris LaFleur, Acting 
Assistant Secretary of State for East Asian and Pacific Affairs 
Bureau; and representatives from the business and agriculture 
communities and nongovermental organizations. On July 22, 2002, 
the Committee on Ways and Means reported adversely H.J. Res. 
101 without amendment by voice vote (H. Rept. 107-602). On July 
23, 2002, H.J. Res. 101 failed in the House by a vote of 91 to 
338, thus leaving NTR status in place for an additional year.

h. Chile

    On March 7, 2001, the Committee held a hearing on President 
Bush's trade agenda for 2001. During that hearing, the 
Committee reviewed progress in negotiations to establish a free 
trade agreement with Chile. Following House passage of H.R. 
3005, legislation to grant the President Trade Promotion 
Authority, the Committee held a hearing on February 7, 2002, on 
President Bush's trade agenda for 2002, which addressed 
progress in negotiations with Chile.
    On August 22, 2002, the Committee received a letter from 
Ambassador Zoellick indicating his intention to conclude a free 
trade agreement negotiations with Chile.

i. Singapore

    On March 7, 2001, the Committee held a hearing on President 
Bush's trade agenda for 2001. During that hearing, the 
Committee reviewed progress in negotiations to establish a free 
trade agreement with Singapore. Following House passage of H.R. 
3005, legislation to grant the President Trade Promotion 
Authority, the Committee held a hearing on February 7, 2002, on 
President Bush's trade agenda for 2002, which addressed 
progress in negotiations with Singapore.
    On August 22, 2002, the Committee received a letter from 
Ambassador Zoellick indicating his intention to conclude a free 
trade agreement negotiations with Singapore.
    In 2001, U.S.-Singapore trade reached $32.7 billion, making 
Singapore the United States' 8th largest trading partner. The 
United States and Singapore began negotiations to establish a 
free trade agreement in December 2000. There is no firm 
deadline for concluding the negotiations, although both sides 
have indicated a preference to conclude them by the end of 
2002. The U.S.-Singapore FTA would be the first U.S. FTA with 
an Asian country, and negotiators are working to draft a 
``world-class'' agreement that will serve as a strong basis for 
future negotiations in the region, particularly services.

j. Morocco

    The United States and Morocco have been working closely 
together since 1995 to promote closer economic ties and strong 
investment climates under a bilateral Trade and Investment 
Framework Agreement (TIFA). On August 22, 2002, USTR Zoellick 
wrote a letter to the Congressional leadership and the 
Committee outlining the reasons that it is in the United 
States' interest to pursue a free trade agreement with Morocco. 
On October 1, 2002, Ambassador Zoellick formally notified 
Congress of the President's intention to negotiate an FTA with 
Morocco, noting that such an agreement would deepen the ongoing 
trade dialogue in the Middle East, reinforce important American 
values in the region, and build upon the free trade agreements 
already completed with Israel and Jordan.
    Ambassador Zoellick noted that in addition to tariff 
elimination, an FTA with Morocco would include commitments to 
increase access to the Moroccan services sector. In addition to 
the telecommunications and tourism sectors, there are likely 
opportunities for U.S. firms in the energy, transport, 
financial services, and insurance sectors. The FTA would 
support Morocco's commitment to transparency, openness, and the 
rule of law, and would include increased protection for 
intellectual property and specific provisions to encourage the 
development of e-commerce.

k. Free Trade Agreement of the Americas

    On March 29, 2001, the Trade Subcommittee held a hearing on 
the increasing number of bilateral and regional trade 
agreements to which the United States is not a party, 
particularly in its own hemisphere, and the implications for 
the United States. This hearing focused on how these new trade 
agreements disadvantage U.S. business, workers, and families 
and assessed opportunities for the United States to move 
forward with new negotiations.
    Between April 20-22, 2001, a staff member from the 
Committee on Ways and Means accompanied a Congressional 
delegation from the Committee on Agriculture led by 
Representative Combest that attended the FTAA Summit in Quebec, 
Canada.
    On May 8, 2001, the Trade Subcommittee held a hearing on 
the outcome of the Summit of the Americas held in Quebec City, 
Canada, and the prospects and timing for achieving the FTAA.
    Also, on May 8, 2001, the Committee received a report from 
the GAO, requested by Trade Subcommittee Chairman Crane 
entitled ``Free Trade Area of the Americas: April 2001 Meetings 
Set Stage for Hard Bargaining to Begin.''
    On July 20, 2001, the Committee received a report from the 
GAO, requested by Trade Subcommittee Chairman Crane, entitled 
``North American Free Trade Agreement: U.S. Experience with 
Environment, Labor, and Investment Dispute Settlement Cases.''

l. Turkey

    In 1996, Congress established the Qualifying Industrial 
Zone (QIZ) initiative under the U.S.-Israel Free Trade 
Agreement to support the peace process in the Middle East by 
encouraging Israeli-Jordan and Israeli-Egypt economic 
integration. On June 24, 2002, H.R. 5002 was introduced by 
Trade Subcommittee Chairman Crane along with Representatives 
Wexler, Armey, Lantos, and Sessions. The bill would expand the 
QIZ program to allow Israel-Turkey QIZs to help Turkey attract 
foreign direct investment, diversify its exports away from 
dependence on textiles, boost trade, and increase employment 
opportunities. Products manufactured in a QIZ that meet the 
necessary criteria would enjoy duty-free access to the United 
States. During the markup of the Miscellaneous Trade and 
Technical Corrections Act of 2002 (H.R. 5385) by the Committee 
on Ways and Means, Chairman Thomas included the text of H.R. 
5002 in his amendment in the nature of a substitute. The 
Committee then approved the legislation as amended, on 
September 18, 2002, by voice vote. The House approved H.R. 5385 
on October 7, 2002, under suspension by voice vote. The Senate 
took no action on H.R. 5002 or H.R. 5385.

m. Yugoslavia

    Yugoslavia's NTR status was withdrawn by Congress in 1992 
(P.L. 102-420) because Serbia and Montenegro were not complying 
with the provisions of the Final Act of the Conference on 
Security and Cooperation in Europe (also known as the 
``Helsinki Final Act''). On April 17, 2002, Representative 
Sessions introduced H.R. 4478 to give the President the 
authority to proclaim NTR status to Yugoslavia (Serbia and 
Montenegro) notwithstanding the 1992 law. The text of H.R. 4478 
was included in the Miscellaneous Trade and Technical 
Corrections Act of 2002 (H.R. 5385), which was introduced on 
September 17, 2002, by Representative Crane. During the markup 
of H.R. 5385 by the Committee on Ways and Means, an amendment 
introduced by Representative Levin (at the request of 
Representative Cardin) was accepted which requires the 
President to first certify, before he may grant NTR status to 
Yugoslavia, that the Federal Republic of Yugoslavia is (1) 
cooperating with the International War Crimes Tribunal and (2) 
complying with the Dayton Peace Accords. The Committee then 
approved the legislation, as amended, on September 18, 2002, by 
voice vote. Before the House considered H.R. 5383 on the Floor, 
Representative Cardin asked that the amendment adopted in the 
markup be withdrawn. The House approved H.R. 5385 with the 
original text of H.R. 4478 on October 7, 2002 under suspension 
by voice vote. The Senate took no action on H.R. 4478 or H.R. 
5383.

n. Russia

    Russia's trade status remains subject to the Jackson-Vanik 
provisions in Title IV of the Trade Act of 1974. Russia was 
first extended NTR in 1992 under a waiver from the Jackson-
Vanik emigration requirements. Since 1994, the President has 
found Russia to be in full compliance with the emigration 
criteria; however, the country's trade status remains 
conditioned upon annual compliance determinations by the 
President. The compliance determinations are vulnerable to a 
resolution of disapproval by Congress. There has not been an 
annual vote in Congress on Russia's trade status because no 
Member of Congress has introduced a disapproval resolution.
    On December 20, 2001, Chairman Thomas, along with 
Subcommittee Chairman Crane and Representative Dreier, 
introduced H.R. 3553 to provide for the extension of permanent 
NTR treatment to the products of the Russian Federation. The 
Subcommittee on Trade held a hearing on April 11, 2002, to 
explore whether to graduate Russia from the Jackson-Vanik 
provisions and extend PNTR, and to assess U.S.-Russian trade 
relations. Witnesses at the hearing included Representatives 
Lantos and Cox, Deputy USTR Peter F. Allgeier, Under Secretary 
of State for Economic, Business, and Agricultural Affairs Alan 
P. Larson, and representatives from the business and 
agriculture communities and non-governmental organizations. No 
further action was taken.

o. Israel

    The House approved H.R. 3009, the Andean Trade Promotion 
and Drug Eradication Act, on November 16, 2001, by voice vote 
and did not include any provision relating to Israel. On 
December 14, 2001, the Senate Committee on Finance reported 
H.R. 3009, as amended (S. Rept. 107-126). The amendments 
adopted by the Senate Committee on Finance included a provision 
that provided that articles eligible for preferential treatment 
under the Andean Trade Promotion and Drug Eradication Act would 
not be ineligible for duty-free treatment because they contain 
certain nylon filament yarn from a country that had a FTA in 
force prior to January 1, 1995. On May 23, 2002, the Senate 
passed H.R. 3009, as amended.
    On June 26, 2002, the House concurred with the Senate 
amendment with an amendment, pursuant to H. Res. 450, which 
included no provision relating specifically to trade with 
Israel. The conference agreement to H.R. 3009 included the 
Senate provision. In addition, at the insistence of the House, 
the conference agreement included a requirement that USTR 
should review implementation of the United States-Israel FTA 
and submit a report to Congress on whether Israel is 
implementing its market access commitments to the United States 
under the FTA and under any other trade agreements this country 
has with the United States. On July 26, 2002, the Israeli 
Ambassador to the United States wrote to Chairman Thomas to 
express the view of his government that Israel is in compliance 
with the agreement. On July 26, 2002, the House agreed to the 
conference report, and on August 1, 2002, the Senate agreed to 
the conference report. The bill was signed into law on August 
6, 2002 (P.L. 107-210).

p. Taiwan

    On January 17, 2002, the Senate Committee on Finance 
formally requested the ITC to conduct an assessment of the 
economic effects of the establishment of a free trade agreement 
between the United States and Taiwan. As part of that request, 
the Senate Committee on Finance asked the ITC to provide 
information on Taiwan's economy, the current economic 
relationship between the United States and Taiwan, an analysis 
of the barriers to trade between the United States and Taiwan, 
the estimated economic effects of eliminating all quantifiable 
trade barriers (with special attention to agricultural goods), 
and a qualitative assessment of the economic effects of 
removing non-quantifiable trade barriers. On June 10, 2002, 
several Members of the Committee on Ways and Means 
(Representatives Dunn, Rangel, Crane, Levin, Shaw, McDermott, 
Ramstad, McNulty, Herger, Houghton, English, Hayworth, Foley, 
and Brady) wrote a letter to ITC Chairman Steve Koplan 
expressing their support for the economic impact study. The ITC 
issued its report in October 2002.

q. Australia and New Zealand

    On November 13, 2002, the Committee received a letter from 
Ambassador Zoellick notifying Congress that the President 
intends to initiate negotiations for a free trade agreement 
with Australia and soliciting the view of the Committee on 
including New Zealand as part of that agreement.

4. OPERATIONS OF THE U.S. CUSTOMS SERVICE, THE U.S. INTERNATIONAL TRADE 
      COMMISSION, AND THE OFFICE OF THE U.S. TRADE REPRESENTATIVE

a. Customs Border Security Act of 2002

    The Trade Subcommittee held a hearing on July 17, 2001, on 
budget authorizations for the U.S. Customs Service, the Office 
of the USTR, and the ITC. Representatives of these agencies, 
the GAO, the National Treasury Employees Union, and invited 
private sector witnesses testified at the hearing.
    At the hearing, the Subcommittee examined Customs 
automation issues--the Automated Commercial System (ACS), the 
Automated Commercial Environment (ACE), and the International 
Trade Data System (ITDS). In addition, the Subcommittee 
received testimony on Customs' premium and overtime pay laws 
and practice, as well as Customs' backlog of prospective 
rulings.
    On October 16, 2001, Subcommittee Chairman Crane introduced 
H.R. 3129, authorizing appropriations for fiscal years 2002 and 
2003 for the Customs Service for non-commercial and commercial 
operations and air and marine interdiction programs, as well as 
authorizations for the Office of the USTR and the ITC. With 
respect to the Customs authorization for commercial operations, 
the legislation included funding for ACE ($308 million for 
fiscal years 2002 and 2003). In addition, H.R. 3129 included 
authorization for the prevention of online child pornography, 
the purchase of specific inspection equipment, the addition of 
Customs Service officers at the United States-Canada border, 
the establishment and implementation of a cost accounting 
system at the Customs Service, implementation of a new means of 
calculation of fees for customs inspections at express courier 
facilities, the National Customs Automation Program, 
reestablishment of customs operations in New York City, for 
textile transshipment enforcement operations, and 
implementation of the Africa Growth and Opportunity Act. H.R. 
3129 also included provisions amending overtime and premium pay 
for Customs officers, providing immunity to Customs officers 
from lawsuits arising from personal searches at the border, and 
authorizing authority to Customs to search outbound mail. H.R. 
3129 was referred to the Committee on Ways and Means.
    The Committee on Ways and Means marked up and favorably 
reported H.R. 3129 as amended on October 16, 2001, by voice 
vote. The Committee filed H. Rept. 107-320 on December 5, 2001. 
On December 6, 2001, an amended version of H.R. 3129 that 
omitted the provision on overtime and premium pay for Customs 
officers failed to pass the House under suspension of the rules 
(requiring a two-thirds vote) by a vote of 256 to 168. OnMay 
22, 2002, the House passed a substantially similar version of H.R. 
3129, as amended, by a vote of 327 to 101.
    On December 4, 2001, the Senate Committee on Finance 
favorably reported S. 1209, the Trade Adjustment Assistance for 
Workers, Farmers, Communities, and Firms Act of 2001, that 
incorporated via amendment substantial portions of H.R. 3129 as 
it had been favorably reported by the House Committee on Ways 
and Means. The Senate Committee on Finance amendment to S. 1209 
omitted the provisions of H.R. 3129 on overtime and premium pay 
for Customs officers and immunity for Customs inspectors. The 
Committee filed S. Rept. 107-134 on February 4, 2002. The 
Senate passed these incorporated provisions of H.R. 3129 as 
part of the Senate amendment to H.R. 3009 by a vote of 66 to 30 
on May 23, 2002.
    No further action was taken on H.R. 3129 in the 107th 
Congress, but the provisions of H.R. 3129 as amended and passed 
by the House were substantially incorporated into H.R. 3009, 
which was enacted on August 6, 2002 (P.L. 107-210). In the 
final enacted version, the budget authorization dates were 
changed from fiscal years 2002-2003 to fiscal years 2003-2004, 
and the authorization amounts were changed accordingly. Other 
significant revisions of the Customs Border Security Act of 
2002 that were enacted as part of the Trade Act of 2002 are 
discussed below:
            1. Immunity for Customs Officers Acting in Good Faith
    Customs Service officials provided information to the 
Committee about the risk to inspectors of personal lawsuits. 
According to these officials, some Customs inspectors have been 
sued unfairly in their personal capacity by people who 
underwent personal searches at the border. H.R. 3129 as 
introduced and passed by the House, and later included in H.R. 
3009, included a provision to provide immunity for U.S. 
officials from lawsuits stemming from personal searches of 
people entering the country so long as the officers conduct the 
searches in good faith. To be covered by this immunity 
provision, inspectors must follow Customs Service inspection 
rules including the rule against profiling using race, 
religion, or ethnic background. The Senate amendment to H.R. 
3009 as passed by the Senate omitted this provision. The Senate 
receded to the House in the conference for the Trade Act of 
2002, and the conferees added a clarification in section 341 of 
the conference report that the means to effectuate such 
searches must be reasonable.
            2. Outbound Mail Border Search Authority
    Customs Service officials provided information to the 
Committee about the inability of Customs to inspect mail 
traveling out of the country. Although Customs searched all 
inbound mail, and although it searched outbound mail sent via 
private carriers, outbound mail carried by the U.S. Postal 
Service was not subject to search. Customs officials stated 
that illegal inbound smuggling is often accompanied by an 
outbound transaction. For example, illegal drugs may enter the 
United States, and the money collected for the drugs may then 
be mailed back to the smuggler.
    H.R. 3129 as introduced and passed by the House, and later 
included in H.R. 3009, authorizes officials of the Customs 
Service to search mail traveling out of the country. H.R. 3009, 
as amended by the Senate, included this provision with an 
exception for mail weighing 16 ounces or less that required 
Customs to obtain a search warrant before searching. H.R. 3009 
as enacted includes the Senate text in section 344.
            3. Requests Submitted to the GAO
    The GAO prepared a report for the Committee that confirmed 
complaints from the business community about the unreasonably 
lengthy delays in obtaining prospective rulings from the 
Customs Service. H.R. 3129, as introduced and passed by the 
House and later included in H.R. 3009, directed the GAO to 
monitor and provide an update on the progress of Customs in 
substantially decreasing the time it takes to issue prospective 
rulings. This provision was subsequently enacted as section 335 
of H.R. 3009.
    The Committee received information about alleged textile 
goods entering the country that have been transshipped, meaning 
that an importer had entered the goods with an incorrect 
declaration for the purpose of obtaining entry or a lower duty. 
H.R. 3129, as introduced and passed by the House and later 
included in H.R. 3009, directed the GAO to conduct an audit of 
the systems at the Customs Service to monitor and enforce 
textile transshipment. This provision was subsequently enacted 
as section 345 of H.R. 3009.
    Customs Service officials provided information to the 
Committee about the inadequacy of the existing accounting 
system used by Customs. Customs cannot accurately track the 
cost of providing services to fee payers nor account for its 
budget expenditures on a commercial versus non-commercial 
basis. One consequence of having inadequate data is that 
importer user fees may not reflect the level of services 
provided for by the fee. H.R. 3129, as introduced and passed by 
the House and later included in H.R. 3009, directed the GAO to 
prepare a confidential report to determine whether current user 
fees are appropriately set at a level commensurate with the 
service provided for the fee. This provision was subsequently 
enacted as section 336 of H.R. 3009.
            4. Mandatory Advanced Electronic Information for Cargo
    Customs Service officials provided information to the 
Committee about the commercial and non-commercial need for 
additional cargo and passenger information. H.R. 3129, as 
introduced and passed by the House and later included in H.R. 
3009, directed the Secretary of the Treasury to promulgate 
regulations pertaining to the electronic transmission to 
theCustoms Service of cargo information relevant to aviation, maritime, 
and surface transportation safety and security prior to a cargo 
carrier's arrival in the United States. The Senate amendment to H.R. 
3009 included a similar provision that applied to out-bound cargo as 
well. Conferees agreed to a modified provision that deleted specific 
requirements on private carriers and shippers and set general 
parameters for Treasury's regulations. This provision was subsequently 
enacted as section 343 of H.R. 3009.

b. Port Security: Maritime Transportation Antiterrorism Act of 2002

    On May 22, 2002, by a vote of 327 to 101, the House passed 
H.R. 3129, as amended, that included section 343 addressing 
mandatory advanced electronic information for cargo discussed 
above. On December 20, 2001, the Senate passed S. 1214, which 
included a similar provision that was more detailed and applied 
to outbound cargo and passenger information as well. S. 1214 
was held at the Speaker's desk until June 4, 2002.
    On June 4, 2002, Chairman Thomas wrote a letter to Speaker 
Hastert on the matter of H.R. 3983, the Maritime Transportation 
Antiterrorism Act of 2002, acknowledging that the Committee had 
modified H.R. 3129 to assure that agencies beyond Customs would 
have access to the information collected by Customs pursuant to 
the Act. The letter demurred on the action of the Committee 
Transportation and Infrastructure to incorporate an identical 
Customs provision in H.R. 3983. H.R. 3983 was passed under 
suspension of the rules by the House with this provision on 
June 4, 2002, by voice vote. On June 4, 2002, the House agreed 
to go to conference on H.R. 3983 and S. 1214, and the Speaker 
named Chairman Thomas, Subcommittee Chairman Crane, and Ranking 
Member Rangel as conferees on this provision. Because final 
Senate and House agreement to a provision was included in 
enactment of H.R. 3009 that was signed by the President on 
August 2, 2002, and because the conference report on H.R. 3983 
contained no tax or user fee, the conference report contained 
only technical amendments within the Committee's jurisdiction. 
The conference report was later enacted.

c. H.R. 3525, the Enhanced Border Security and Visa Entry Reform Act of 
        2002

    On April 23, 2002, Chairman Thomas wrote a letter to 
Chairman Sensenbrenner of the Committee on the Judiciary 
concerning section 102 of H.R. 3525, the ``Enhanced Border 
Security and Visa Entry Reform Act of 2001,'' which passed the 
Senate as amended on April 18, 2002. Included in the Senate 
amendment to H.R. 3525 was section 102, which authorized 
increases in funding to improve facilities for the border 
patrol, Immigration and Naturalization Service, and U.S. 
Customs Service in light of the increased border security 
issues related to the terrorist attack of September 11, 2001. 
The letter stated that this provision of the Senate amendment 
fell within the Committee's jurisdiction but that the Committee 
would seek no action on the legislation in order to expedite it 
for Floor consideration. The final version of H.R. 3525 
included this provision intact, and the bill was signed into 
law on May 14, 2002 (P.L. 107-173).

d. Creation of the U.S. Department of Homeland Security: Homeland 
        Security Act of 2002

    On June 18, 2002, President Bush proposed to transfer all 
of the authority and assets of the Customs Service, as well as 
many other Federal agencies, to a new U.S. Department of 
Homeland Security. Specifically, Customs would be placed under 
an Under Secretariat for Border and Transportation Security 
along with the Immigration and Naturalization Service, the 
Animal and Plant Health Inspection Service, the Coast Guard, 
and the Transportation Security Administration. On June 24, 
2002, Chairman Armey of the House Select Committee on Homeland 
Security introduced H.R. 5005, ``The Homeland Security Act of 
2002.'' The bill was referred to the Committees of jurisdiction 
for each section of the bill, including the Committee on Ways 
and Means.
    On June 19, 2002, Chairman Thomas announced that the 
Committee would hold a hearing on the President's proposal to 
create a U.S. Department of Homeland Security including the 
transfer of all assets and authority of the U.S. Customs 
Service to the new Department. The full Committee held the 
hearing on June 26, 2002. Testifying at the hearing were the 
Honorable Jimmy Gurule, Undersecretary for the Office of 
Enforcement, U.S. Department of the Treasury, and several 
members of the trade as well as the president of the National 
Treasury Employees Union.
    Chairman Thomas and the Committee on Ways and Means ordered 
favorably reported recommendations for legislative changes to 
H.R. 5005, the ``Homeland Security Act of 2002,'' with 
amendment, by voice vote, after adopting the Chairman's 
amendment by a vote of 34 to 3. The legislative language 
adopted by the Committee was recommended to the House Select 
Committee on Homeland Security for incorporation into a final 
bill consolidating relevant House committee recommendations.
    The overarching goal of the Committee was to give the new 
Department the tools it needs to protect U.S. borders while at 
the same time to ensure that revenue continues to be collected 
and that goods keep moving across the border with little delay. 
The bipartisan amendment that formed the Chairman's mark would: 
(1) transfer the Customs Service in its entirety to the U.S. 
Department of Homeland Security Division for Border and 
Transportation Security; (2) identify revenue-related offices 
and functions within Customs (about 25 percent of the agency) 
and prohibit reorganization or decrease in their funding or 
staff or reductions to Title V pay and benefits levels; (3) 
require that adequate staffing of customs revenue services be 
maintained, and require notice to Congress of actions that 
would reduce such service; (4) maintain the Commissioner of 
Customs as Senate-confirmed; (5) transfer all authority 
exercised by Customs to Homeland Security with the exception of 
revenue collecting authority, which would remain at the U.S. 
Department of the Treasury,which may delegate this authority to 
Homeland Security; (6) specify that a portion of the Customs 
Merchandise Processing Fee must go to build the new Customs computer.
    Four amendments were offered to the Chairman's substitute. 
The first amendment, offered by Representative Cardin, would 
have designated the existing Customs Service as a ``distinct 
entity'' within the Homeland Security Department. This 
amendment failed by voice vote. The second amendment, offered 
by Representative Becerra, would have expanded the dedicated 
use provision for the merchandise processing fee (MPF) in the 
Chairman's substitute to require use of MPF receipts (in excess 
of the $350 million dedicated for ACE development) for 
commercial operations. This amendment failed by a roll call 
vote of 12 yeas to 24 nays. The third amendment, offered by 
Representative McDermott, would have preserved existing and 
future Customs' employees pay, performance standards, etc., as 
provided under Title 19 and Title 5. This amendment failed by a 
voice vote. Representative Doggett offered an amendment to 
prohibit the Customs Service from entering into contracts with 
companies that have reincorporated overseas in order to avoid 
U.S. taxation. This amendment was agreed to without objection.
    On July 23, 2002, the House Select Committee on Homeland 
Security reported H.R. 5005 with the Committee on Ways and 
Means language intact. On July 31, 2002, H.R. 5005 passed the 
House by a vote of 295 to 132. No further action was taken on 
this bill in the 107th Congress.
    On November 13, 2002, the House Select Committee on 
Homeland Security reported H.R. 5710 as a substitute to H.R. 
5005. Minor changes were incorporated in the Customs section 
from the language reported in H.R. 5005. The House passed the 
bill by a vote of 299 to 121 on November 13, 2002. The Senate 
passed the House bill with some technical amendments on 
November 19. The House agreed to the technical amendments on 
November 22, and the bill was signed into law on November 25, 
2002.

e. H. Res. 385 (Concerning the Destruction of the Customs Services 
        Offices at the World Trade Center)

    On April 10, 2002, Representative Istook introduced H. Res. 
385, a resolution to honor the men and women of the U.S. 
Customs Service who had offices at the World Trade Center, for 
their hard work, commitment, and compassion during the 
terrorist attacks on the World Trade Center on September 11, 
2001. The resolution was referred to the Committee on Ways and 
Means. The resolution passed under suspension of the rules by 
voice vote on April 23, 2002.

f. Customs User Fees

            i. Patients' Bill of Rights
    Customs user fees under Title 19, section 58c will expire 
in September 2003. As a source of revenue, user fees are 
sometimes attached to unrelated legislation as a means to ``pay 
for'' the spending created by that legislation. For example, 
section 502 of Senator McCain's bill, S. 1052, the Patients 
Protection Act (also known as the Patients' Bill of Rights), 
would extend Customs user fees until 2011. S. 1052 passed the 
Senate as amended on June 29, 2001, with the provision 
remaining intact although renumbered to section 602. No further 
action was taken on S. 1052 during the 107th Congress.
            ii. Reports Required Under the Trade Act of 2002
    Section 334 of the Trade Act of 2002 requires the 
implementation of a cost accounting system for the U.S. Customs 
Service and a quarterly report from Customs on its progress. 
Once implemented, Customs will be able to accurately identify 
the cost of performing certain services or activities that 
currently have fees associated with them.

                  5. GENERALIZED SYSTEM OF PREFERENCES

    On October 3, 2001, Trade Subcommittee Chairman Crane 
introduced H.R. 3010, a bill to amend the Trade Act of 1974 to 
extend the GSP until December 31, 2002. On October 5, 2001, the 
Committee ordered H.R. 3010 favorably reported, without 
amendment, by voice vote. On June 26, 2002, the House concurred 
with the Senate amendment to H.R. 3009 with an amendment 
pursuant to H. Res. 450, by a vote of 216 to 215 with one 
Member voting ``present.'' This resolution incorporated H.R. 
3010 into H.R. 3009, the Trade Act of 2002. On July 26, 2002, 
the House agreed to the conference report, and on August 1, 
2002, the Senate agreed to the conference report. The 
conference report extends GSP benefits through December 31, 
2006. The bill was signed into law on August 6, 2002 (P.L. 107-
210).

                     6. TRADE ADJUSTMENT ASSISTANCE

    H.R. 3008 was introduced by Representative Nancy Johnson 
and referred to the Committee on Ways and Means. On October 15, 
2001, the Committee favorably reported H.R. 3008 to reauthorize 
until 2004 the TAA programs for workers and firms and the North 
American Free Trade Agreement-related (NAFTA) TAA program, all 
of which were scheduled to expire on September 30, 2001. The 
Committee filed H. Rept. 107-244 on October 16, 2001. The House 
passed H.R. 3008, as amended, by a vote of 420 to 3 with one 
Member voting ``present,'' on December 6, 2001. H.R. 3008, as 
amended, included provisions to shorten the period for 
Administration review of petitions, increase benefits for 
additional time, and authorize a new temporary program to 
address workers laid off from the national economic impacts of 
the terrorist attack of September 11, 2001. No further action 
was taken on H.R. 3008 during the 107th Congress, but the text 
of H.R. 3008 was partially incorporated into the conference 
report to H.R. 3009 as amended and passed by the House on June 
26, 2002, and signed into law on August 6, 2002 (P.L. 107-210).
    On December 4, 2001, the Senate Committee on Finance 
favorably reported S. 1209 with a substitute amendment. The 
Senate Committee on Finance filed S. Rept. 107-134 on February 
4, 2002. S. 1209 was a significant rewrite of existing TAA law 
that included provisions to: consolidate the TAA and NAFTA-TAA 
programs; shorten the period for Administration review of TAA 
petitions; extend TAA to secondary workers, workers in firms 
that shift production abroad, and workers in taconite mining 
firms; allow Congress to initiate TAA investigations; increase 
notice to potential beneficiaries; increase benefits for 
additional time; increase time allowed for breaks in training; 
raise the training expenditure cap; increase personal 
allowances; provide wage insurance for older workers; create a 
self-employment pilot program; expand authorization for TAA for 
firms; create a new TAA for communities, farmers, and 
fishermen; create a new healthcare benefit for TAA workers; and 
extend Customs user fees through 2010. No further action was 
taken on S. 1209 during the 107th Congress, but the provisions 
of S. 1209 were incorporated into the Senate amendment to H.R. 
3009 that passed on May 23, 2002, by a vote of 66 to 30.
    The conference report to H.R. 3009 makes significant 
changes to the House and Senate passed versions of TAA but 
retains existing law as the basis for the amendments instead of 
adopting the method of rewriting the statute followed by the 
Senate in S. 1209. Conferees agreed to consolidate the TAA and 
NAFTA-TAA programs, decrease the review period for petitions, 
extend TAA to downstream secondary workers, increase notice to 
potential beneficiaries, increase benefits for additional time, 
increase time allowed for breaks in training, raise the 
training expenditure cap to $220 million, increase personal 
allowances, create an alternative TAA program for older 
workers, increase funding to TAA for firms, create a new TAA 
program for farmers subject to limitations related to income 
and eligibility for other farm program payments, and provide a 
healthcare tax credit to TAA workers and recipients of benefits 
from the Pension Benefit Guaranty Corporation. H.R. 3009 was 
signed into law on August 6, 2002 (P.L. 107-210).

                     7. MISCELLANEOUS TRADE ISSUES

a. Miscellaneous Trade and Technical Corrections Act

    On March 8, 2002, Subcommittee Chairman Crane requested 
written comments from parties interested in miscellaneous trade 
proposals, technical corrections to the trade laws, and 
temporary suspensions on certain imports. These technical 
corrections related to the ongoing process of identifying 
changes to improve the efficiency of the trade laws.
    On September 17, 2002, Subcommittee Chairman Crane 
introduced H.R. 5385, the ``Miscellaneous Trade and Technical 
Corrections Act of 2002.'' This legislation included provisions 
which were non-controversial based on public comments received, 
Administration comments, and revenue analysis by the 
Congressional Budget Office (CBO). H.R. 5385 was referred to 
the Committee on Ways and Means.
    H.R. 5385 contains two parts. The first part includes 
legislation relating to: (1) temporary duty suspensions, (2) 
review of protests against Customs Service decisions, and (3) 
miscellaneous provisions. The duty suspension provisions of the 
first part of H.R. 5385 relate mostly to products (largely 
chemical) for which there is no U.S. domestic manufacturer. 
Other duty suspension articles include rubber riding boots and 
high performance loud speakers.
    The review of protests against Customs Service decisions 
included provision for articles including tramway cars, a 
replica of the Liberty Bell, and certain 13-inch televisions. 
These provisions were found to be adjustments to duty payments 
made on articles that were past administrative remedy.
    The second part of H.R. 5385 contains provisions relating 
to: (1) the establishment of a Turkey QIZ (see discussion in 
Turkey section of this report), (2) ship repair record-keeping 
elimination (the bill reverses Customs regulations written in 
April 2001 and eliminates onerous record-keeping requirements 
for repairs made by regular crew on American ships while on the 
high seas, without change to current law requiring duties for 
foreign ship repairs), (3) GSP benefits for certain hand-made 
rugs (the primary beneficiary is Pakistan; other countries that 
would benefit from the bill include Turkey, Nepal, Egypt, and 
Morocco), and (4) other technical amendments to the Trade Act 
of 2002.
    On September 18, 2002, the Committee on Ways and Means 
amended and marked up H.R. 5385 and ordered it favorably 
reported by voice vote. The Committee amendment included a 
change relating to the Turkey QIZ. In addition, the Committee 
allowed for revision of the bill to correct for score and 
content. On October 7, 2002, the bill was agreed to by the 
House under suspension of the rules by voice vote.
    The Senate received the bill on October 8, 2002. The Senate 
took no action on the legislation.

b. Farm Security and Rural Investment Act of 2002

    On September 17, 2001, Chairman Thomas wrote to 
Representative Combest, Chairman of the Committee on 
Agriculture, to assert jurisdiction over two provisions of H.R. 
2646, the Agriculture Act of 2002. The provisions were section 
127, which would change the level of import quotas on cotton 
permitted under U.S. law, and section 146, which would require 
importers of dairy products to pay assessments applied to 
domestic dairy producers to offset the costs of dairy sales 
promotion programs. The Committee on Ways and Means did not 
seek action on these proposals. On September 18, 2001, 
Representative Combest sent a letter to Chairman Thomas, 
agreeing as to the Committee's jurisdictional prerogatives. On 
August 2, 2001, H.R. 2646 passed the House by a recorded vote 
of 291 to 120.
    On February 13, 2002, the Senate passed its version of H.R. 
2646. Chairman Thomas, Ranking Member Rangel, and 
Representative Herger were named House conferees for the 
provisions within the jurisdiction of the Committee, 
specifically the raw cotton quotas, the dairy marketing fee 
assessment on imports, the reallocation of the sugar quota, and 
certain provisions of the Animal Health Protection Act and the 
Bear Protection Act.
    The House passed the conference report on May 2, 2002, 
containing provisions within the Committee's jurisdictions as 
modified to the Committee's satisfaction. The Senate passed the 
conference report on May 8, 2002, and it was signed into law on 
May 13, 2002 (P.L. 107-171).

c. Steel--H.J. Res. 84

    On June 22, 2001, USTR Robert Zoellick requested the ITC to 
initiate a safeguard investigation under section 201 of the 
Trade Act of 1974 concerning the effect of steel imports on the 
U.S. steel industry. The request covered four broad categories 
of steel products: certain carbon and alloy flat products, 
certain carbon and alloy long products, certain carbon and 
alloy pipe and tube, and certain stainless steel and alloy tool 
steel products.
    For purposes of its investigation, the ITC divided steel 
imports into 33 product categories. On October 22, 2001, the 
ITC made an affirmative determination of injury for 12 of these 
product categories, finding that the products were being 
imported into the United States in such increased quantities 
that they are a substantial cause of serious injury or threat 
of serious injury to the U.S. industry. In addition, the ITC 
was evenly divided in its determinations for 4 product 
categories and made negative determinations for 17 product 
categories. In cases where the ITC was evenly divided, both 
determinations were forwarded to the President, who may 
consider either determination as the ITC's determination 
(section 330(d)(1) of the Tariff Act of 1930). The imported 
products covered by the ITC's affirmative and evenly divided 
determinations accounted in the year 2000 for 27 million tons 
of steel, valued at $10.7 billion (74 percent of the imports 
under investigation).
    On December 7, 2001, the ITC announced the recommendations 
and views on the remedies regarding steel. According to section 
202(e)(6) of the Trade Act of 1974, only Commissioners who made 
affirmative injury determinations for a product are eligible to 
recommend remedies for that product. On December 19, 2001, the 
ITC transmitted to the President its remedy recommendations.
    Section 203 provides that the President, not the ITC, makes 
the final decision whether to provide relief to the U.S. 
industry and the type and amount of relief. On March 5, 2002, 
President Bush announced trade remedies for all products on 
which the ITC affirmatively determined or had an evenly divided 
determination that imports had caused substantial injury except 
two specialty categories (tool steel and stainless steel 
flanges and fittings). The President's remedies were imposed as 
of March 20, 2002, and are effective for 3 years and 1 day. 
Since that time, the President has issued a number of 
exclusions.
    On March 7, 2002, Representative Jefferson introduced H.J. 
Res. 84 to disapprove the action taken by the President. The 
effect of the resolution would be to enact instead the remedy 
recommendations of the ITC transmitted to the President on 
December 19, 2001. The resolution was referred to the Committee 
on Ways and Means. On May 7, 2002, the Committee on Ways and 
Means reported adversely H.J. Res. 84 without amendment by 
voice vote (H. Rept. 107-437). On May 8, 2002, the House 
approved H. Res. 414, which laid H.J. Res. 84 on the table, by 
a vote of 386 to 30 (with 1 present vote), leaving the 
President's order in place. No further action was taken.

d. Diamonds

    There were a number of legislative proposals in Congress 
during the 107th Congress seeking to address the trade in 
conflict diamonds. Such diamonds generally come from mines 
controlled by rebel forces and are traded for arms to fuel 
civil war in Africa. Some of the proposals included banning 
diamonds imported from specified countries and requiring a 
certification of where the imported diamond was mined.
    The Senate passed H.R. 2500, an act making appropriations 
for the U.S. Departments of Commerce, Justice, and State, the 
Judiciary, and related agencies, which at section 404 would 
create an explicit ban on the importation of diamonds from 
certain countries. As an import ban provision, section 404 was 
a revenue measure that contravened the Origination Clause of 
the Constitution (Article I, Section 7, Clause 1). On September 
20, 2001, Chairman Thomas introduced H. Res. 240 to return H.R. 
2500 to the Senate because the bill violated the Origination 
Clause. H. Res. 240 passed the House by voice vote, and H.R. 
2500 was returned to the Senate. The Senate voted on September 
21, 2001, to strike section 404 from the bill.
    On October 10, 2001, the Trade Subcommittee held a hearing 
on the importation of conflict diamonds. This hearing was an 
effort to obtain viewpoints from the Administration, the 
industry, non-governmental organizations, and other interested 
parties for possible solutions to the issues relating to the 
trade in conflict diamonds. This hearing was a follow-up to one 
held by the Subcommittee on September 12, 2000.
    On August 2, 2001, Representative Houghton introduced H.R. 
2722, the Clean Diamonds Trade Act, to restrict the importation 
of diamonds from countries with inadequate controls against the 
trade of conflict diamonds. H.R. 2722 was referred to the 
Committee on Ways and Means. Based upon information gathered at 
the hearing, Chairman Thomas brought H.R. 2722, as amended, to 
the Floor under suspension of the rules on November 28, 
2001.H.R. 2722 as amended would provide the President of the United 
States with the authority to evaluate control measures used by 
countries to prevent the trade of conflict diamonds. The President 
would also have the authority to ban diamond imports that were found to 
be from countries with inadequate control measures. H.R. 2722 passed 
the House by a vote of 408 to 6. The Senate took no action on this 
legislation.

e. Energy Bill

    Section 2 of the Securing America's Future Energy Act of 
2001 (H.R. 4) contains a sense of Congress that the United 
States should reduce its dependence on Iraqi energy sources 
from 700,000 barrels per day to 250,000 barrels per day by 
January 1, 2012. The House passed H.R. 4 on August 2, 2001 by a 
vote of 240 to 189. In considering H.R. 4, the Senate stripped 
the House text and substituted the text of S. 517, as amended. 
On April 18, 2002, Senator Murkowski offered Senate Amendment 
3159 adding Title XXVI to prohibit direct or indirect import of 
Iraqi-origin oil 30 days after enactment of the Act. The ban 
would remain in effect until the President certifies to 
Congress that: (1) Iraq is in compliance with United Nations 
Security Council resolutions on destruction of weapons of mass 
destruction and the food-for-oil program, and Iraq stops 
compensating families of Palestinian suicide bombers, or (2) 
resuming imports of oil from Iraq would not be inconsistent 
with the national security and foreign policy interests of the 
United States. The Senate amendment also included a sense of 
the Senate that the President should ensure that humanitarian 
needs of Iraqi people are not affected by this Act and 
encourage humanitarian assistance to Iraq. The Senate accepted 
Senate amendment 3159 by a vote of 88 to 10.
    On April 25, 2002, the Senate agreed by unanimous consent 
to Senate amendment 3082 by Senator Reid as an amendment to S. 
517, which was incorporated as an amendment to H.R. 4, the 
Energy Policy Act of 2002. The provision provided that any 
gasoline or diesel fuel sold at a duty-free sales enterprise 
would be considered to be entered for consumption into the 
customs territory of the United States.
    The Senate passed its version of H.R. 4 by a vote of 88 to 
11. No further action was taken by either body in the 107th 
Congress.

f. Miscellaneous Provisions Included in the Trade Act of 2002

            i. Duty on Certain Steam or Other Vapor Generating Boilers 
                    Used in Nuclear Facilities
    On May 4, 2001, the Committee requested comments on a 
proposal to temporarily suspend the duty on certain steam or 
other vapor generating boilers used in nuclear facilities (H.R. 
1067). The Committee received comments from supporters and 
opponents to the provision.
    The Senate amendment to the Senate version of H.R. 3009, 
the Trade Act of 2002, included a provision to provide duty-
free treatment for such nuclear steam generators through 2006. 
H.R. 3009 as passed by the House did not include any similar 
provision. The House receded to the Senate on this provision in 
conference, and the bill was signed into law by the President 
on August 6, 2002 (P.L. 107-210).
            ii. Wool Provisions
    H.R. 3009, the Trade Act of 2002, as passed by the House 
did not include a provision related to wool. The Senate 
amendment to H.R. 3009 as passed by the Senate included a 
provision to extend a duty reduction on fabrics of wool to 2005 
and increase the quantity of wool fabrics that may be imported. 
The House receded to the Senate on this provision in 
conference, and the bill was signed into law by the President 
on August 6, 2002 (P.L. 107-210).
            iii. Fund for WTO Dispute Settlements
    Section 5201 of the Trade Act of 2002 (P.L. 107-210) 
establishes in the U.S. Department of the Treasury a $50 
million fund for the payment of the settlement of any dispute 
pursuant to proceedings under the WTO. This provision was 
included in the House's amendment, pursuant to H. Res. 450, to 
the Senate amendment to H.R. 3009, which passed the House by a 
vote of 216 to 215 on June 26, 2002.
            iv. Sugar Tariff-Rate Quota Circumvention
    H.R. 3009, the Trade Act of 2002, as passed by the House 
did not include a provision related to sugar tariff-rate quota 
circumvention. The Senate amendment to H.R. 3009 as passed by 
the Senate included a provision requiring the implementation of 
anti-circumvention measures on certain sugar and sugar-related 
imports identified by the Secretary of Agriculture. Conferees 
agreed to clarify the existing provision of the Harmonized 
Tariff Schedule (HTS) of the United States and establish a 
monitoring program to identify potential circumvention of 
tariff-rate quotas on sugar. This provision was included in the 
conference report, and the bill was signed into law by the 
President on August 6, 2002 (P.L. 107-210).

g. Export Administration Act

    On November 16, 2001, the Committee on Ways and Means 
received joint and sequential referral, until December 7, 2001, 
of H.R. 2581, the ``Omnibus Export Administration Act,'' as 
reported by the House International Relations Committee (H. 
Rept. 107-297 Part 1). The referral period was extended several 
times. On October 25, 2002, the Committee on Ways and Means 
sent a letter to Speaker Hastert waiving jurisdiction on H.R. 
2581 in order toexpedite Floor consideration as requested by 
President Bush. The bill included two significant provisions within the 
jurisdiction of the Committee, which would essentially recodify import 
sanctions for trade in violation of the Missile Technology Control 
Regime (MTCR) and for proliferation of chemical and biological weapons. 
No further action was taken on this bill.

h. Section 332 Study by the ITC on Tool and Die Industry

    On December 21, 2001, Chairman Thomas wrote a letter to ITC 
Chairman Koplan requesting a study of the domestic tool and die 
manufacturing industry under section 332(g) of the Tariff Act 
of 1930. More specifically, the Committee requested that the 
ITC institute a fact-finding investigation of the current 
competitive conditions facing producers in the U.S. tool, die, 
and industrial mold, or tooling industries, including a profile 
of the U.S. industry, trends in production, consumption, and 
trade, a global market overview, and a comparison of the 
strengths and weaknesses of U.S. and foreign producers. In 
October 2002, the ITC submitted a report to the Committee, 
providing an overview and analysis of the industry (ITC 
Investigation 332-435).

i. Atlantic Marlin

    On June 26, 2002, Representative Gilchrest introduced H. 
Con. Res. 427 expressing the sense of the Congress regarding 
the imposition of sanctions on nations that are undermining the 
effectiveness of conservation and management measures for 
Atlantic marlin adopted by the International Commission for the 
Conservation of Atlantic Tunas and that are threatening the 
continued viability of U.S. commercial and recreational 
fisheries. The bill contained provisions within the 
jurisdiction of the Committee on Ways and Means. On October 8, 
2002, Chairman Thomas and Committee on Resources Chairman 
Hansen exchanged letters acknowledging the Committee on Ways 
and Means' jurisdiction over these provisions and agreeing to 
forego the Committee on Ways and Means' consideration of the 
bill. No further action was taken.

                 C. Legislative Review of Health Issues


 1. MEDICARE REGULATORY AND CONTRACTING REFORM ACT OF 2001 (H.R. 2768/
                               H.R. 3391)

    The Subcommittee on Health held a hearing on March 14, 
2001, on the regulatory burden on Medicare's providers and 
beneficiaries.
    On August 2, Subcommittee Chairman Johnson and Ranking 
Member Stark introduced the Medicare Regulatory and Contracting 
Reform Act (H.R. 2768). The bill would streamline the 
regulatory bureaucracy to create a more collaborative working 
relationship with providers. It would create time frames for 
issuance of new regulations, prohibit retroactive application 
of the issuance of new regulations, improve provider education, 
improve provider appeals, reform recovery of overpayments, 
improve new technology integration, and delay by 1 year the 
Medicare+Choice adjusted community rate (ACR) filing deadline 
and implementation of the beneficiary lock-in. In addition, the 
bill would reform Medicare's contracting system by 
consolidating contracting functions for Part A and Part B, 
requiring competition among contractors, and providing for more 
flexibility for contractors.
    After a legislative hearing on H.R. 2768 on September 25, 
2001, the Health Subcommittee approved H.R. 2768 by a voice 
vote October 4, 2001. This was followed by full Committee 
approval by voice vote October 11, 2001. After conferring with 
the Committee on Energy and Commerce, a revised version was 
introduced (H.R. 3391) and passed the House 408 to 0 on 
December 4, 2001.
    The Senate failed to act on the measure. However, the 
Bioterrorism Preparedness and Response Act of 2002 Act (H.R. 
3448), which passed the House 418 to 2 on June 12, 2002, (P.L. 
107-188), incorporated the Medicare+Choice provisions from H.R. 
3391 but applied them for 3 years. The Medicare Modernization 
and Prescription Drug Act (H.R. 4954), which passed the House 
on June 27, 2002, incorporated all other regulatory and 
contracting reform provisions from H.R. 3391. The Senate failed 
to act on that measure as well.

             2. PATIENT PROTECTION ACT OF 2001 (H.R. 2563)

    The Health Subcommittee held a hearing on patient 
protections in managed care on April 24, 2001.
    The Subcommittee Majority in conjunction with the Committee 
on Education and Workforce and the Committee on Energy and 
Commerce drafted the Patient Bill of Rights (H.R. 2315), which 
held health plans accountable for medical decisions, and was 
endorsed by the White House. That bill became the basis for a 
Floor amendment to the Bipartisan Patient Protection Act (H.R. 
2563). In addition, Chairman Thomas offered a Floor amendment 
to expand the Archer Medical Savings Account program and make 
it permanent, which passed 236 to 194. H.R. 2563, as amended, 
passed the House 226 to 203 on August 2, 2001. The Senate 
passed a different version of the bill on June 29, 2001, but a 
Conference Committee was never called to address differences 
between the two bills.

      3. ADMINISTRATIVE SIMPLIFICATION COMPLIANCE ACT (H.R. 3323)

    The administrative simplification provisions of the Health 
Insurance Portability and Accountability Act (HIPAA) of 1996 
will improve administrative efficiencies in the health care 
market, but many covered entities stated that they would have 
difficulty coming into compliance with HIPAA regulations by the 
October 16, 2002, deadline.
    The Administrative Simplification Compliance Act (H.R. 
3323) passed the House December 4, 2001, 410 to 0. It was later 
adopted by the Senate by unanimous consent and became law (P.L. 
107-105).
    H.R. 3323 permits a 1-year extension of the deadline for 
compliance with the HIPAA required transaction standards. 
Entities that submit a compliance plan with the Secretary 
demonstrating how they will come into compliance with the 
standard within the next year are permitted a 1-year extension. 
It also requires the U.S. Department of Health and Human 
Services (HHS) to issue model compliance plans. Medicare 
providers must submit electronic Medicare claims to Centers for 
Medicare and Medicaid Services (CMS) as a condition of payment, 
with exceptions for small providers.

    4. MEDICARE MODERNIZATION AND PRESCRIPTION DRUG ACT (H.R. 4954)

    The Committee on Ways and Means and its Health Subcommittee 
held a series of 16 hearings on the state of the Medicare 
program and how it needs to be modernized. These hearings 
included an extensive review of many aspects of the Medicare 
program. Specifically, the hearings addressed the regulatory 
burden on providers and beneficiaries (March 15 , 2001, and 
September 25, 2001), Medicare's solvency and overall 
sustainability (March 20, 2001), the need to integrate a 
prescription drug benefit into Medicare (March 27, 2001, and 
April 17, 2002), the state of the Medicare+Choice program (May 
1, 2001, and December 4, 2001), modernizing beneficiary cost-
sharing and reforming Medigap (May 9, 2001, and March 14, 
2002), strengthening rural health care (June 12, 2002), 
stabilizing payments to physicians (February 28, 2002), 
promoting disease management (April 16, 2002), and the Bush 
Administration priorities on Medicare (March 14, 2001, July 19, 
2001, and February 6, 2002). These hearings provided the 
foundation for the comprehensive Medicare Modernization and 
Prescription Drug Act (H.R. 4954).
    H.R. 4954 was introduced June 19, 2002, and was reported 
out of the Committee on Ways and Means June 20, 2002, 22 to 16. 
On June 28, the House passed H.R. 4954, 221 to 208. The Senate 
failed to pass any Medicare bill.
    The Medicare Modernization and Prescription Drug Act (H.R. 
4954) would provide a voluntary, comprehensive prescription 
drug benefit in Medicare delivered through competing private 
health plans, costing about $323 billion over 10 years. The 
plans would have the incentive and flexibility to aggressively 
negotiate with pharmaceutical manufacturers, pharmacies, and 
others in the distribution chain. The CBO estimated that a 
provision which exempts Medicare prices from the ``Medicaid 
best price'' would encourage greater discounting from the 
pharmaceutical industry to save $18 billion in lower prices.
    These plans would either provide a standard benefit or 
actuarially equivalent benefit approved by Medicare within 
certain parameters. The standard benefit would cover 80 percent 
of the first $750 after a $250 deductible, 50 percent of 
expenses between $1,000 and $2,000 and all drug costs once an 
individual had spent $3,700 out-of-pocket. These stop loss 
attachment points would rise with prescription drug cost 
inflation. Subject to an asset test, low-income individuals 
with incomes up to 175 percent of poverty would be fully 
subsidized up to the initial benefit limit of $2,000 and for 
the catastrophic benefit for their premiums and cost sharing 
(except nominal copays). All other Medicare beneficiaries 
receive a 67 percent premium subsidy. The CBO estimates 
beneficiaries would pay an average premium of about $33 per 
month in 2005, although premiums could vary between plans. 
Beneficiaries could access the drug benefit in one of three 
ways: (1) by enrolling in newly created prescription drug 
plans, (2) by enrolling in a Medicare+Choice plan that offers a 
prescription drug benefit, or (3) if eligible, by enrolling in 
qualified retiree coverage (where employers could access 
subsidies).
    Medicare would be made primary and states' Medicaid and 
pharmacy assistance program's obligations would be phased out 
over 10 years. Beneficiaries could apply for the low-income 
subsidy at Social Security offices. The bill also created 
authority for the Administration to provide a prescription drug 
discount card and a temporary low-income assistance program.
    The bill provides a number of quality improvements and 
beneficiary protections, including electronic prescribing, 
formulary appeals, the ability to visit any pharmacy for a 
higher fee, and medication therapy management programs. The 
bill also added other new benefits for Medicare beneficiaries 
including an initial preventative physical examination, 
coverage of cholesterol, and blood lipid screening once every 2 
years.
    The bill allocated about $27 billion to improve and 
modernize payments to Medicare's providers. The bill would 
stabilize the Medicare+Choice program and in 2005 initiate a 
competitive approach to encourage beneficiaries to select more 
efficient plans and save money for the Medicare program. The 
bill would block the significant payment cuts to physicians and 
provide 3 years of payment increases. The bill significantly 
strengthens rural hospitals by equalizing the ``standardized 
amount,'' increasing rural DSH funding, improving the critical 
access hospital program, and providing temporary bonus payments 
to areas with negative margins. In addition, the bill provides 
an increase in payments to all hospitals through increasing the 
inpatient update and temporarily increases indirect medical 
education payments while retaining the freeze on direct 
graduate medical education. One of the temporary bonus payments 
for skilled nursing facilities would be extended for 3 years, 
costing about $2 billion. The 15 percent home health care 
payment adjustment, which results in a 7-percent reduction in 
payments, would be repealed, but home health agencies would 
receive lower updates and a smaller outlier pool. Dialysis 
facilities would receive a payment update in 2004. Durable 
medical equipment providers would be subject to a competitive 
bidding program, saving about $7.7 billion over 10 years.
    A newly created Medicare Benefits Administrator would be 
created to oversee the new prescription drug benefit and the 
Medicare+Choice program. The entire regulatory reform bill (HR 
3391) was included in the legislation to streamline the 
regulatory process and modernize Medicare's contracting 
functions.

                              5. TRADE ACT

    On April 4, 2001, the Health Subcommittee held a hearing on 
reducing the number of uninsured and received testimony on 
health tax credits. On February 13, 2002, the full Committee 
held a hearing about using tax credits to decrease the number 
of uninsured.
    On October 3, 2001, Chairman Thomas introduced the 
Bipartisan Trade Promotion Authority Act, which the Committee 
ordered reported on October 9, 2001, by a vote of 26 to 13. The 
House passed the bill on December 6, 2001, 215 to 214. On June 
26, 2002, the House passed H. Res. 450, which provided for 
consideration of the Senate amendment to H.R. 3009, the Andean 
Trade Promotion and Drug Eradication Act. H. Res. 450 allowed 
for consideration of an amendment that folded in provisions of 
H.R. 3005, as well as a health tax credit, disagreed to the 
Senate amendment, and called for a conference between the two 
chambers. The House passed the conference report to the Trade 
Act (H.R. 3009, P.L. 107-210), 215 to 212 on July 27, 2002.
    The law includes an advanceable, refundable tax credit for 
displaced workers similar to the provision passed by the House. 
The bill incorporated some of the ideas explored in the 
hearings and included provisions similar to those included in 
two prior economic stimulus bills (H.R. 3529 and H.R. 622) for 
unemployed individuals eligible for unemployment insurance. 
H.R. 3009 provides a 65-percent tax credit for qualified TAA 
eligible individuals for COBRA coverage and various options 
arranged by the States, including high-risk pools, insurance 
policies, and State employee plans. Individuals with 3 months 
of prior coverage would receive guarantee issue and pre-
existing condition protections. The bill provides new funding 
for state high risk pools to offer coverage to uninsurable 
individuals.

                           6. MEDICAL ERRORS

    On March 7, 2002, the Health Subcommittee held a hearing on 
improving health care quality and reducing medical errors. On 
June 9, 2002, Subcommittee Chairman Johnson introduced the 
Patient Safety Improvement Act (H.R. 4899). After the 
Subcommittee held a hearing on the legislation September 10, 
2002, the bill was revised and approved by the Health 
Subcommittee on a voice vote September 12. The bill was further 
revised and approved by the full Committee September 18, 2002, 
33 to 4. The Committee on Energy and Commerce approved a 
similar bill modeled on H.R. 4889 as amended, but the 
Committees were unable to resolve jurisdictional concerns prior 
to the conclusion of the 107th Congress.
    H.R. 4889 would allow providers to report medical errors to 
newly established patient safety organizations and provide 
legal protections for such reported information, while 
maintaining access to original source materials currently 
available. These organizations and HHS would work with 
providers to help them learn from their mistakes. The bill 
would also develop voluntary standards for the interoperability 
of health medical technology.

            D. Legislative Review of Social Security Issues


          1. SOCIAL SECURITY AND MEDICARE LOCK-BOX ACT OF 2001

    On February 8, 2001, Representative Wally Herger introduced 
H.R. 2, the ``Social Security and Medicare Lock-box Act of 
2001.'' The bill was jointly referred to the Committee on the 
Budget and the Committee on Rules.
    On February 13, 2001, the bill was considered by the House 
under suspension of the rules and passed, as amended, by a vote 
of 407 to 2. In the Senate, H.R. 2, which was referred to the 
Senate Committee on Finance and discharged from the Committee, 
was jointly referred to the Budget and Governmental Affairs 
Committees where no action was taken.
    The bill would have helped ensure Social Security and 
Medicare annual surpluses would be used to reduce publicly-held 
debt by amending the Congressional Budget Act of 1974 to 
provide a point of order against consideration of any: (1) 
budget resolution that sets forth a surplus for any fiscal year 
that is less than the projected surplus of the Medicare 
Hospital Insurance (HI) Trust Fund for such year; or (2) 
legislation that would cause a reduction in the portion of 
projected budget surpluses attributable to projected Social 
Security and Medicare HI Trust Fund surpluses. H.R. 2 would 
have also required any Federal budget submitted by the 
President that recommended an on-budget surplus for any fiscal 
year that is less than the projected surplus of the Medicare HI 
Trust Fund for such year to include a proposal for Social 
Security or Medicare reform legislation. The Act would have 
become inapplicable upon the enactment of Social Security and 
Medicare reform legislation.

             2. ECONOMIC GROWTH AND TAX RELIEF ACT OF 2001

    On February 28, 2001, Chairman Thomas introduced H.R. 3, 
the ``Economic Growth and Tax Relief Act of 2001.'' The bill, 
as amended, was ordered reported by the Committee on March 1, 
2001, by a vote of 23 to 15 (H. Rept. 107-7).
    On March 8, 2001, H.R. 3 passed the House by a vote of 230 
to 198. The bill included a provision to protect the Social 
Security and Medicare Trust Funds from any loss of revenue they 
receive from the taxation of Social Security benefits that 
would result from a reduction in tax rates and other tax 
provisions. Amounts transferred to the trust funds were to be 
determined as if the tax law had not been enacted. Although 
some provisions of H.R. 3were included in H.R. 1836, the 
``Economic Growth and Tax Relief Reconciliation Act of 2001,'' which 
became P.L. 107-16 on June 7, 2001, the provision protecting the Social 
Security and Medicare Trust Funds from any related revenue loss was not 
included in the version passed by the Senate or among the enacted 
provisions.

     3. RAILROAD RETIREMENT AND SURVIVORS' IMPROVEMENT ACT OF 2001

    On March 21, 2001, Representative Don Young introduced H.R. 
1140, the ``Railroad Retirement and Survivors' Improvement Act 
of 2001.'' On May 16, 2001, the Committee on Transportation and 
Infrastructure ordered the bill, as amended, to be reported (H. 
Rept. 107-82 Part 1). The bill was referred to the Committee on 
Ways and Means and was discharged from the Committee on July 
12, 2001. (In the previous session of Congress, the Committee 
had favorably reported similar legislation, H.R. 4844; H. Rept. 
106-777 Part 2.) H.R. 1140 was considered by the House under 
suspension of the rules and passed, as amended, on July 31, 
2001, by a vote of 384 to 33.
    The bill was referred to the Senate Committee on Finance 
but was never reported out of Committee. On December 5, 2001, 
the Senate substituted the text of H.R. 10, formerly the 
``Comprehensive Retirement Security and Pension Reform Act of 
2001,'' with the text of H.R. 1140 and passed H.R. 10, as 
amended, by a vote of 90 to 9.
    On December 11, 2001, the House agreed by a vote of 369 to 
33 to suspend the rules and agree to the Senate amendment, 
sending the bill onto the President, who signed it into law on 
December 21, 2001 (P.L. 107-90).
    H.R. 10 made several changes to the tax and benefit 
structure of the Railroad Retirement program and expanded the 
program's investment authority. The bill made four changes to 
Railroad Retirement benefits. First, widow(er)s' benefits were 
increased from 50 percent to 100 percent of the deceased 
worker's Tier 2 annuity. Second, vesting requirements for Tier 
1 and Tier 2 annuities were reduced from 10 years to 5 years of 
service after 1995. Third, the normal retirement age was 
reduced from 62 to 60 for workers with 30 years of service in 
the rail industry, thus restoring the retirement age to its 
pre-1983 level. Fourth, the maximum benefit, which applied to 
Tier 2 annuities, was repealed.
    H.R. 10 established a National Railroad Retirement 
Investment Trust outside of the U.S. Department of the Treasury 
to invest railroad retirement funds in non-governmental assets, 
such as equities and debt, as well as in governmental 
securities. An independent Board of Trustees was appointed to 
administer the Trust. A private disbursing agent would 
consolidate all funds needed to pay current benefits and issue 
a single monthly benefit check to each beneficiary.
    The supplemental annuity tax paid by railroad employers was 
eliminated, and supplemental annuity benefits would be paid 
from the National Railroad Retirement Investment Trust. In 
addition, the Tier 2 payroll tax rate levied on employers would 
be gradually reduced from 16.1 percent to 14.2 percent in 2003. 
The Tier 2 tax rate paid by employees would remain 4.9 percent 
through 2003. Thereafter, the tax rate for both employers and 
employees would be set each calendar year pursuant to a 
statutory formula based on a ratio of the balances and benefit 
obligations of the National Railroad Retirement Investment 
Trust. Depending on the ratio, Tier 2 tax rates for employers 
will range between 8.2 and 22.1 percent; Tier 2 tax rates for 
employees will range between 0 and 4.9 percent.

           4. KEEPING THE SOCIAL SECURITY PROMISE INITIATIVE

    On December 6, 2001, Subcommittee Chairman Shaw introduced 
H. Con. Res. 282, the ``Keeping the Social Security Promise 
Initiative.'' The bill was considered by the House under 
suspension of the rules on December 12, 2001, and passed by a 
vote of 415 to 5. The Senate took no action.
    H. Con. Res. 282 expressed the sense of the Congress that 
the ``President's Commission to Strengthen Social Security'' 
should present options to protect the program without lowering 
benefits or increasing taxes. It also stated that the President 
and the Congress should join to develop legislation to 
strengthen Social Security as soon as possible, and that such 
legislation should recognize the unique needs of women and 
minorities, as well as guarantee current law promised benefits 
and cost-of-living adjustments without increasing taxes.

     5. SOCIAL SECURITY BENEFIT ENHANCEMENTS FOR WOMEN ACT OF 2002

    On March 20, 2002, Subcommittee Chairman Shaw introduced 
H.R. 4069, the ``Social Security Benefit Enhancements for Women 
Act of 2002.'' On May 14, 2002, the bill, as amended, was 
considered by the House under suspension of the rules and 
passed by a vote of 418 to 0. The Senate took no action.
    H.R. 4069 would have eliminated the requirement that 
widow(er)s seeking disability benefits must have become 
disabled within 7 years of the worker's death or the date of 
last entitlement to benefits as a mother, father, or disabled 
widow(er). In cases of divorce, a divorce must be final for at 
least 2 years before an ex-spouse may collect benefits on a 
worker's record. The bill would have eliminated this 2-year 
waiting period in cases where the worker remarries someone 
other than the ex-spouse during the 2 years following the 
divorce. Lastly, H.R. 4069 would have increased the applicable 
limit on certain widow(er)s' benefits in cases where the 
deceased worker started collecting Social Security retirement 
benefits and died before reaching the full retirement age.
    In addition, the bill contained three offsetting tax 
provisions that would have amended the Internal Revenue Code. 
First, H.R. 4069 would have allowed individual taxpayers to 
exclude from gross income any interest payments received from 
the government on tax overpayments. Second, the bill would have 
allowed taxpayers to deposit cash with the Treasury to cover 
any future tax underpayment. Interest charges would not accrue 
on the portion of the tax underpayment covered by the advance 
cash deposit. Finally, the bill would have authorized the 
Secretary of the Treasury to enter into installment agreements 
for the partial payment of tax liabilities (rather than full 
payment) if the Secretary determines that such agreement would 
facilitate collection of the tax liability.

           6. SOCIAL SECURITY PROGRAM PROTECTION ACT OF 2002

    On March 20, 2002, Subcommittee Chairman Shaw introduced 
H.R. 4070, the ``Social Security Program Protection Act of 
2002.'' On April 25, 2002, the Subcommittee favorably reported 
the legislation, as amended, to the full Committee. On June 26, 
2002, the House considered the bill under suspension of the 
rules and passed the legislation as amended by a vote of 425 to 
0.
    The bill was referred to the Senate on June 27, 2002. On 
November 18, 2002, the Senate passed the legislation, as 
amended, by unanimous consent. No further action was taken on 
the bill.
    H.R. 4070 would have protected vulnerable recipients from 
misuse of benefits by their representative payees by: 
authorizing the reissuance of certain misused benefits; 
requiring enhanced oversight of representative payees; 
disqualifying fugitive felons or persons convicted and 
imprisoned more than a year from serving as representative 
payees; requiring representative payees who misuse funds to 
forfeit their fees; providing for the recovery of misused 
benefits from the representative payee through the overpayment 
recovery process; requiring representative payees who are 
delinquent in filing annual accounting reports to collect the 
individual's benefits in person at a local office; and 
extending civil monetary penalties to representative payees who 
misuse benefits.
    In addition, H.R. 4070 would have provided further 
protections for the Social Security program by withholding 
Social Security benefits from those fleeing prosecution, or 
custody or confinement after conviction of a felony. The 
legislation would have also required individuals who provide 
Social Security Administration-related services for a fee to 
explain in their solicitation that such services may be 
provided by SSA free of charge. The bill would have made 
improvements to the attorney fee payment system to ensure 
adequate access to legal representation for claimants who may 
need assistance in the disability claims process.
    Miscellaneous and technical amendments were also included, 
a number of which were aimed at improving the effectiveness of 
programs established in the Ticket to Work and Work Incentives 
Improvement Act of 1999. For example, the bill would have 
ensured that employers who hire individuals with disabilities 
through referral by an employment network under the Ticket to 
Work and Self-Sufficiency program would qualify for the Work 
Opportunity Tax Credit. Lastly, the legislation would have 
corrected, clarified, and modified various technical aspects of 
Social Security law, including adding Kentucky to those States 
that may divide their retirement systems to obtain Social 
Security coverage, under State agreement, for those State and 
local employees who want such coverage.

                    7. HELP AMERICA VOTE ACT OF 2002

    On November 14, 2001, Representative Ney introduced H.R. 
3295, the ``Help America Vote Act of 2001.'' The House approved 
H.R. 3295 on December 12, 2001, by a vote of 362 to 63. The 
bill, as passed, did not include provisions addressing the use 
of Social Security numbers (SSNs) for voter registration. 
Similarly, the Senate version of the bill, S. 565, did not 
include any SSN provisions when it was introduced.
    However, the Senate amended S. 565 on the Senate Floor, and 
added provisions amending the Social Security Act that would 
allow States to require an individual to furnish his or her SSN 
to confirm identity, and would require the Commissioner of 
Social Security to match a State's computerized listing of 
registered voters with the names and SSNs in the Commissioner's 
database. The Senate passed S. 565, as amended, on April 11, 
2002, by unanimous consent. Representatives Thomas, Rangel, and 
Shaw were named as conferees.
    On October 10, 2002, the House agreed to the conference 
report (H. Rept. 107-730) by a vote of 357 to 48. On October 
16, 2002, the Senate, by a vote of 92 to 2 agreed to the 
conference report. On October 29, 2002, the President signed 
the bill into law (P.L. 107-252). The bill required individuals 
registering to vote to provide a driver's license number or, if 
the individual does not have a driver's license, the last four 
digits of his or her Social Security number. A State election 
official then must match the data in the statewide voter 
registration database with the information in the State's motor 
vehicle database. The State's motor vehicle authority must 
enter into an agreement with the Commissioner of Social 
Security to verify information (name, date of birth, SSN, 
whether deceased) and include safeguards in the agreement to 
ensure confidentiality and procedures to permit the State motor 
vehicle authority to use the applicable information for 
maintaining its records. Also, the Commissioner was required to 
develop methods to verify the accuracy of information, 
including applications for which the last 4 digits of the SSN 
are provided in lieu of a driver's license number. In addition, 
with the Election Assistance Commission, the Commissioner was 
required to study and report to Congress on the feasibility and 
advisability of using SSNs or other information compiled by the 
agency to establish voter registration or other election law 
eligibility or identification requirements, the impact ofsuch 
use on national security issues, and whether adequate safeguards or 
waiver procedures exist to protect the privacy of the individual voter.

            E. Legislative Review of Human Resources Issues


              1. CHILD WELFARE, FOSTER CARE, AND ADOPTION

    H.R. 2873, Promoting Safe and Stable Families Amendments of 
2001, reauthorized, amended, and expanded the Promoting Safe 
and Stable Families program, which provides grants to States 
and Indian Tribes for family support, family preservation, 
time-limited family reunification, and adoption promotion and 
support services. The legislation reauthorized the program for 
5 years, adding a new $200 million authorization on top of the 
$305 million in mandatory funding the program received in 
fiscal year 2001, for a total authorization of $505 million per 
fiscal year 2002 through 2006. The legislation added new 
program findings and purposes, as well as new authority for the 
Secretary of HHS to re-allot program funds not used by one or 
more States among other States. Finally, the legislation added 
new provisions concerning research and technical assistance, 
for example requiring the Secretary of HHS to give priority to 
research and evaluation of promising program models, including 
models designed to address parental substance abuse.
    H.R. 2873 also created a new matching grant program to 
support mentoring networks for the children of prisoners. The 
program authorized $67 million for competitive grants for each 
of fiscal years 2002 and 2003, and such sums as may be 
necessary for fiscal years 2004 through 2006. Finally, H.R. 
2873 created a new program of education and training vouchers 
for youths aging out of foster care. For each fiscal year 2002 
through 2006, $60 million is authorized for this purpose. The 
bill allowed States to fund education vouchers in amounts up to 
$5,000 per year under the Chafee Foster Care Independence 
Program for youths up to age 23 (at State option) for the cost 
of attendance at postsecondary education and training 
institutions.
    A Human Resources Subcommittee hearing on the Promoting 
Safe and Stable Families program was held on May 10, 2001. The 
focus of the hearing was to explore how States used Promoting 
Safe and Stable Families program funds, to learn which programs 
have been effective, and to consider issues for further review 
and action during the reauthorization process. Testimony at the 
hearing was presented by program administrators, researchers, 
and other experts on child welfare issues.
    H.R. 2873 was introduced September 10, 2001, by 
Subcommittee Chairman Herger and Ranking Member Cardin of the 
Subcommittee on Human Resources. Considered by the Subcommittee 
on September 25, 2001, the bill was ordered favorably reported 
to the full Committee, as amended, by voice vote. The Committee 
on Ways and Means considered the Subcommittee reported bill on 
October 31, 2001, and ordered it favorably reported, as 
amended, by voice vote. The House approved H.R. 2873, as 
amended, by voice vote on November 13, 2001. The legislation 
passed the Senate without amendment by unanimous consent on 
December 13, 2001. The bill was signed by the President on 
January 17, 2002 (P.L. 107-133).

                           2. WELFARE REFORM

a. Extension of the Contingency Fund Under the Temporary Assistance for 
        Needy Families Program

    The Personal Responsibility and Work Opportunity 
Reconciliation Act (P.L. 104-193), often referred to as the 
1996 welfare reform law, authorized a new Temporary Assistance 
for Needy Families (TANF) contingency fund providing a total of 
up to $2 billion in added Federal assistance for certain needy 
States. This fund originally was authorized through fiscal year 
2001.
    H.R. 3090 as enacted, the Job Creation and Worker 
Assistance Act of 2002, included a section providing a 1-year 
extension of the contingency fund through fiscal year 2002. The 
contingency fund provides capped matching grant funds to 
eligible States meeting certain criteria of need based on 
unemployment and food stamp participation. H.R. 3090 was 
amended and passed in the House on March 7, 2002, was passed in 
the Senate on March 8, 2002, and was signed into law by 
President Bush on March 9, 2002 (P.L. 107-147). Further 
information regarding H.R. 3090 may be found in the review of 
unemployment compensation issues below. The contingency fund 
also was extended through the first two quarters of fiscal year 
2003 as part of the temporary extension of TANF and related 
programs described below.

b. Extension of Supplemental Grants for States With Population 
        Increases

    The 1996 welfare reform law also created a program of 
supplemental grants within the TANF program, authorizing a 
total of $800 million in payments to eligible States in fiscal 
years 1998 through 2001. H.R. 3090 as enacted, the Job Creation 
and Worker Assistance Act of 2002, included a provision 
reauthorizing the supplemental grants program for fiscal year 
2002. These grants provide additional funds to States meeting 
certain criteria such as high-population growth. The provision 
in H.R. 3090 appropriated funds for supplemental grants in 
fiscal year 2002 at the same level as in fiscal year 2001, that 
is, a total of $319 million in the 17 eligible States. H.R. 
3090 was amended and passed in the House on March 7, 2002, was 
passed in the Senate on March 8, 2002, and was signed into law 
by President Bush on March 9, 2002 (P.L. 107-147). Further 
information regarding H.R. 3090 may be found in the review of 
unemployment compensation issues below. Supplemental grants 
also were extended through the first two quarters of fiscal 
year 2003 as part of the temporary extension of TANF and 
related programs described below.

c. Reauthorization of the Temporary Assistance for Needy Families 
        Program

    The Personal Responsibility, Work, and Family Promotion Act 
of 2002, H.R. 4737, extended and made improvements to TANF and 
related programs. The TANF program, first authorized by the 
Personal Responsibility and Work Opportunity Reconciliation Act 
of 1996 (P.L. 104-193), currently provides cash assistance to 2 
million low-income families through a program of temporary cash 
benefits, work supports, and other assistance. The 1996 welfare 
reform law authorized the TANF program through September 30, 
2002.
    Titles I and II of H.R. 4737 extended the authorization of 
the TANF block grant through fiscal year 2007, with block grant 
funding for States and territories maintained at the current 
level of $16.6 billion per year, and increased funding for the 
Child Care and Development Block Grant. Title I also amended 
the purposes of TANF, including by adding an overarching 
purpose of improving child well-being. The legislation also 
focused additional funding specifically on promoting healthy 
marriage, including by replacing the current $100 million bonus 
fund rewarding decreases in out-of-wedlock birth ratios with an 
annual $200 million program of healthy marriage promotion 
grants (composed of $100 million in Federal funds with an equal 
matching requirement). The bill also provided for the creation 
of a $102 million fund for research, demonstrations and 
technical assistance, to be used primarily for promoting 
healthy marriage programs; $2 million of this fund is reserved 
for improving child welfare among American Indian families. 
Thus, the legislation reserved a total of $300 million per year 
for activities and programs promoting the formation and 
maintenance of healthy marriages. The legislation also 
authorized a new $20 million per year fatherhood program. The 
legislation converted high performance bonus funds into a new 
$100 million per year bonus fund to reward employment 
achievement.
    H.R. 4737 increased mandatory funds for the Child Care and 
Development Block Grant under the Committee on Ways and Means' 
jurisdiction from $2.717 billion in 2002 to $2.917 billion for 
each of fiscal years 2003 through 2007, for a total increase of 
$1 billion over the 5-year period. The legislation increased 
from 30 percent to 50 percent the share of TANF funds that 
States may transfer to the Child Care and Development and 
Social Services Block Grants, including permitting States to 
transfer up to 10 percent of TANF funds to the Social Services 
Block Grant in each of fiscal years 2003 through 2007.
    H.R. 4737 specified universal engagement and self-
sufficiency plan requirements for all families receiving cash 
assistance. It eliminated the option for individuals to receive 
benefits for up to 2 years without participating in work or 
other activities and specified certain conditions under which 
States must provide for a full check sanction. Further, H.R. 
4737 gradually increased the overall State work participation 
rate requirement to 70 percent by fiscal year 2007 and raised 
the total number of required hours in certain activities. The 
legislation eliminated the separate and higher State work 
participation rate requirement that currently applies to two-
parent families, and updated the credit for net caseload 
reduction used in calculating the effective work rate that 
States must achieve to satisfy Federal standards.
    Title III of H.R. 4737 made changes to the Internal Revenue 
Code to improve taxpayer protections. The bill allowed 
taxpayers to exclude interest paid on overpayments from gross 
income, limit underpayment interest through the use of a 
qualified reserve account, and enter into partial payment 
installment agreements.
    Title IV of H.R. 4737 amended the child support program to 
provide matching Federal funds to States passing through a 
limited amount of child support to families receiving cash 
welfare benefits, allowed States to distribute all child 
support collected to former welfare families, and imposed a $25 
annual user fee on certain child support cases. In addition, 
the legislation required a report on undistributed child 
support payments, provided access to the National Directory of 
New Hires for administration of State unemployment programs, 
reduced the amount of past-due child support that would trigger 
passport denial, specified that the Federal income tax refund 
offset program could be used for collection of past-due child 
support when a child is no longer a minor, expanded the Federal 
administrative offset program for certain past-due child 
support, allowed for limited withholding of veterans' 
disability benefits for child support purposes, and revised 
technical funding formulas related to technical assistance.
    Title V of H.R. 4737 extended and expanded waiver authority 
for Federal child welfare programs administered under Title IV-
E of the Social Security Act. The authority for HHS to approve 
demonstration projects of Title IV-E Foster Care and Adoption 
Assistance programs expired on September 30, 2002. H.R. 4737 
extended this authority through fiscal year 2007, eliminated 
the cap on the number of waivers that can be approved, and 
clarified that States may operate more than one waiver at a 
time and that States may replicate successful projects 
initiated by other States.
    Title VI of H.R. 4737 amended Title XVI of the Social 
Security Act to require review of a specified share of State 
agency disability benefit eligibility determinations before 
benefit payments under the Supplemental Security Income program 
may begin.
    Title VII of H.R. 4737 authorized States to apply for State 
Flex demonstrations to coordinate multiple Federal programs 
that provide assistance to low-income families. For example, a 
State could apply to align administrative rules for operating 
TANF, workforce development, and housing programs to better 
serve families transitioning from welfare to work.
    Titles VIII and IX of H.R. 4737 extended the authorization 
of Transitional Medical Assistance and Abstinence Education 
programs under the jurisdiction of the Committee on Energy and 
Commerce.
    A series of Subcommittee hearings in preparation for 
reauthorization of the 1996 welfare reform law included a March 
15, 2001, hearing to review research on the effects of the 1996 
welfare reform law, an April 3, 2001, hearing on programs that 
promote work, an April 26, 2001, hearing to examine ``rainy 
day'' and other special funding issues under the TANF program, 
and a May 22, 2001, hearing to review how States have used TANF 
funds to promote marriage and family formation and what 
additional approaches or programmatic changes may hold promise 
to better promote marriage and family formation and discourage 
illegitimacy.
    A number of additional hearings leading up to introduction 
of reauthorization legislation were held, including a July 11, 
2001, hearing on human resources proposals contained in the 
President's fiscal year 2002 budget proposal, a November 15, 
2001, hearing on teen pregnancy prevention efforts since 
enactment of the welfare reform law in 1996 and recommendations 
for further improvements to prevent and reduce the incidence of 
teen pregnancy, a March 7, 2002, hearing on implementation of 
welfare work requirements and time limits, a field hearing on 
April 2, 2002, to review welfare reform outcomes in Michigan, 
and an April 11, 2002, open hearing on welfare reform 
reauthorization proposals.
    Legislation to reauthorize the Temporary Assistance for 
Needy Families program was introduced by Subcommittee Chairman 
Herger on April 9, 2002, as the Personal Responsibility, Work, 
and Family Promotion Act of 2002 (H.R. 4090). Considered by the 
Subcommittee on Human Resources on April 18, 2002, the bill was 
ordered favorably reported to the full Committee, as amended, 
by a 6 to 4 vote. The full Committee considered the 
Subcommittee-reported bill on May 2, 2002, and ordered it 
favorably reported, as amended, by a 23 to 16 vote. H.R. 4090 
was discharged by the Committee on Education and the Workforce 
on May 14, 2002. The Committee on Energy and Commerce on April 
24, 2002, discharged legislation, H.R. 4122, addressing 
transitional medical assistance and abstinence education 
programs. This legislation was consolidated with H.R. 4090 as 
approved by the Committee on Ways and Means as H.R. 4737, the 
Personal Responsibility, Work, and Family Promotion Act of 
2002, which was introduced on May 15, 2002. On May 16, 2002, 
the House approved H.R. 4737 by a recorded vote of 229 to 197. 
The legislation was considered by the Senate Committee on 
Finance in a markup session on June 26, 2002. On July 25, 2002, 
the Senate Committee on Finance ordered favorably reported a 
substitute version of H.R. 4737, as amended, to the full 
Senate. The Senate failed to consider the Finance-reported 
legislation, and no further action was taken on H.R. 4737 
during the remainder of the 107th Congress.

d. Temporary Extension of Authorization for the Temporary Assistance 
        for Needy Families and Related Programs

    The 1996 welfare reform law authorized TANF and several 
related programs through the end of fiscal year 2002. In order 
to avoid a disruption of these programs in the absence of 
agreement on broad reauthorization legislation, section 114 of 
H.J. Res. 111, a Joint Resolution making continuing 
appropriations for the fiscal year 2003 and for other purposes, 
extended the authorization and funding for TANF, child care, 
transitional medical assistance, and abstinence education 
programs through December 31, 2002. H.J. Res. 111 was 
introduced September 25, 2002, was passed in the House and 
Senate on September 26, 2002, and became law on September 30, 
2002 (P.L. 107-229).
    H.J. Res. 124, a Joint Resolution making further continuing 
appropriations for the fiscal year 2003, amended P.L. 107-229 
to provide in January 2003 an additional quarter of program 
funding, maintaining TANF and related programs in current form 
through March 31, 2003. H.J. Res. 124 was introduced on 
November 12, 2002, passed in the House on November 13, 2002, 
passed in the Senate on November 19, 2002, and became law on 
November 23, 2002 (P.L. 107-294).
    As amended and passed in the House on November 14, 2002, 
H.R. 5063 included a technical and clarifying amendment 
regarding the extension of TANF and related programs in H.J. 
Res. 124. No further action was taken on H.R. 5063 before the 
107th Congress adjourned.

                      3. UNEMPLOYMENT COMPENSATION

a. Temporary Extended Unemployment Compensation Act

    During the 107th Congress, the Committee on Ways and Means 
led efforts in the House of Representatives to provide extended 
unemployment benefits to workers affected by the recession that 
began in March 2001 and by the September 11, 2001, terrorist 
attacks. As described below, the House of Representatives 
passed a series of bills in the wake of the September 11 
attacks providing for economic stimulus and added supports for 
unemployed workers. This process culminated in the signing on 
March 9, 2002, of P.L. 107-147, legislation providing workers 
nationwide with up to 13 additional weeks of extended 
unemployment benefits, and up to 26 additional weeks in certain 
high unemployment States. This legislation also provided all 
States with a share of $8 billion in excess Federal 
unemployment funds to be used to support unemployed workers and 
assist in their return to work.
    Committee on Ways and Means Chairman Bill Thomas introduced 
H.R. 3090, the Economic Security and Recovery Act of 2001, on 
October 11, 2001. Title III of thislegislation transferred $9 
billion in excess Federal unemployment trust funds to the States and 
increased the Social Services Block Grant program by $3 billion in 
fiscal year 2002 to assist the States in providing health care coverage 
for unemployed workers and their families. On October 12, 2001, the 
Committee on Ways and Means ordered H.R. 3090 as amended favorably 
reported by a vote of 23 to 14. This legislation was reported to the 
House on October 17, 2001. H.R. 3090 as amended passed in the House on 
October 24, 2001, by a vote of 216 to 214. On November 9, 2001, H.R. 
3090 was placed on the Senate Legislative Calendar after being ordered 
favorably reported as amended from the Senate Committee on Finance. 
H.R. 3090 as amended by the Senate Committee on Finance was entitled 
the Economic Recovery and Assistance for American Workers Act of 2001, 
and included temporary enhanced unemployment benefits provisions. These 
provisions provided federally funded extended unemployment benefits, 
expanded benefit eligibility, and mandated increased benefit payments.
    On December 19, 2001, Chairman Thomas introduced H.R. 3529, 
the Economic Security and Worker Assistance Act of 2001. Title 
VII of this bill, entitled the Temporary Extended Unemployment 
Act of 2001, provided for a temporary program of up to 13 weeks 
of federally funded extended unemployment compensation benefits 
to individuals who exhausted their regular State unemployment 
benefits. In addition, the legislation provided for 
distribution to the States of $9 billion in excess Federal 
unemployment trust funds. On December 20, 2001, the House 
approved H.R. 3529 by a vote of 224 to 193.
    Originally introduced as the Hope for Children Act on 
February 14, 2001, H.R. 622 amended the Internal Revenue Code 
to expand the adoption credit, and was passed in the House on 
May 17, 2001, by a vote of 420 to 0. The Senate amended and 
passed H.R. 622 as the Temporary Extended Unemployment 
Compensation Act of 2002 on February 6, 2002, to extend 
unemployment benefits for 13 weeks nationwide. On February 14, 
2002, by a vote of 225 to 199, the House passed H.R. 622, as 
amended, titled the Economic Security and Worker Assistance Act 
of 2002. Title VI of this legislation, the Temporary Extended 
Unemployment Compensation Act of 2002, extended unemployment 
benefits nationwide for up to 13 weeks and provided up to an 
additional 13 weeks of extended unemployment benefits in States 
experiencing high rates of unemployment through December 2002. 
The legislation also would have transferred $8 billion in 
surplus Federal unemployment funds to the States. Title VII of 
this legislation established a displaced worker health 
insurance credit. No further action was taken on H.R. 622 in 
the 107th Congress.
    On February 14, 2002, the Senate approved H.R. 3090, as 
amended, renamed the Temporary Extended Unemployment 
Compensation Act of 2002. The bill extended federally funded 
unemployment benefits for 13 weeks nationwide. Finally, H.R. 
3090, as amended and renamed the Job Creation and Worker 
Assistance Act of 2002, passed in the House on March 7, 2002, 
by a vote of 417 to 3. The Senate passed the amended H.R. 3090 
on March 8, 2002, and the legislation was signed into law by 
President Bush on March 9, 2002 (P.L. 107-147).
    Title II of H.R. 3090 provided for up to 13 weeks of 
federally funded extended unemployment benefits under the 
Temporary Extended Unemployment Compensation (TEUC) Act of 
2002. The TEUC benefits were made available in every State 
through December 2002 to individuals exhausting their rights to 
up to 26 weeks of State unemployment benefits. In addition, in 
certain high unemployment States (i.e., those with an insured 
unemployment rate of 4 percent or higher, among other criteria 
for accessing benefits under the permanent law Federal-State 
Extended Benefits program) up to an additional 13 weeks of 
temporary extended benefits were made available. Finally, the 
unemployment provisions of this legislation provided for the 
immediate transfer of $8 billion in surplus Federal 
unemployment funds to the States.
    As the 107th Congress drew to a close, the House and Senate 
approved separate bills to extend part or all of the TEUC 
program created in P.L. 107-147. On November 14, 2002, the 
House approved by voice vote an amended version of the Senate-
passed amendment to H.R. 5063, originally titled the Armed 
Forces Tax Fairness Act of 2002, which included a section 
continuing for up to 5 weeks the extended unemployment benefits 
of those receiving benefits as of the program's original 
expiration on December 28, 2002. This legislation also provided 
for the continued availability of additional weeks of special 
extended unemployment benefits in certain high unemployment 
States. Also, on November 14, 2002, the Senate amended H.R. 
3529, the Economic Security and Worker Assistance Act, which 
provided for a continuation of the TEUC program created in P.L. 
107-147 and passed it by unanimous consent. No further action 
was taken on either H.R. 5063 or H.R. 3529 during the remainder 
of the 107th Congress.

        4. CHARITABLE CHOICE AND INDIVIDUAL DEVELOPMENT ACCOUNTS

    The Charitable Choice Act of 2001 was included as Title II 
of H.R. 7, the Community Solutions Act of 2001, as passed in 
the House on July 19, 2001, by a vote of 233 to 198. This 
legislation established guidelines for religious organizations 
or their affiliates to receive Federal funds for the provision 
of social services. Any governmental organization that 
contracts with a religious organization to provide social 
services was required to guarantee that eligible individuals 
who object to a specific service provider on religious grounds 
be directed to a different provider of comparable services.
    Title III of H.R. 7 amended the Assets for Independence Act 
to increase the authorization for a matched savings program, 
which supports the creation and funding of Individual 
Development Accounts or IDAs for low-income working families. 
Funding for the program was increased from $25 million annually 
to $50 million annually beginning in fiscal year 2002, with 
funds authorized through fiscal year 2008. Other program 
changes included allowing additional federally-insured credit 
unions to serve as eligible grant applicants tooperate IDA 
projects, replacing the current lifetime limit on individual and 
household receipt of Federal matching grants with an annual limit of up 
to $500 in Federal matching grants per individual, and making certain 
other technical and conforming changes. On July 11, 2001, H.R. 7 was 
amended and approved by the Committee on Ways and Means by a vote of 23 
to 16. The House approved H.R. 7 as further amended by a vote of 233 to 
198 on July 19, 2001. The bill was referred to the Senate Committee on 
Finance, where it was considered, amended, and reported to the full 
Senate on July 16, 2002. No further action was taken on H.R. 7 during 
the remainder of the 107th Congress.
    On June 14, 2001, the Subcommittee on Human Resources held 
a joint hearing with the Subcommittee on Select Revenue 
Measures to review H.R. 7, the Community Solutions Act of 2001. 
Witnesses included Members of Congress, policy specialists, 
faith-based program representatives, State program 
administrators, religious organizations, and organized labor.

                            5. CHILD SUPPORT

    Title IV of H.R. 4737, the Personal Responsibility, Work, 
and Family Promotion Act of 2002, amended the child support 
program to provide matching Federal funds to States passing 
through a limited amount of child support to families receiving 
cash welfare benefits, allowed States to distribute all child 
support collected to former welfare families, and imposed a $25 
annual user fee on certain child support cases. In addition, 
the legislation required a report on undistributed child 
support payments, provided access to the National Directory of 
New Hires for administration of State unemployment programs, 
reduced the amount of past-due child support triggering 
passport denial, allowed the Federal income tax refund offset 
program to be used for collection of past-due child support 
when the child is no longer a minor, expanded the Federal 
administrative offset program for certain past-due child 
support, allowed limited withholding of veterans' disability 
benefits for child support purposes, and revised funding 
formulas related to technical assistance. Additional 
information regarding H.R. 4737 is provided in the review of 
welfare reform issues above.

                    6. SUPPLEMENTAL SECURITY INCOME

a. Disability Decision Review

    Title VI of H.R. 4737, the Personal Responsibility, Work, 
and Family Promotion Act of 2002, amended the Social Security 
Act to require the SSA to review an increasing share of 
Supplemental Security Income program disability decisions made 
by State agencies before any benefits are paid. Additional 
information regarding H.R. 4737 is provided in the review of 
welfare reform issues above.

b. Social Security Protection

    Title I of H.R. 4070, the Social Security Protection Act of 
2002, included provisions improving and strengthening the 
representative payee system for Supplemental Security Income 
program recipients. H.R. 4070 as passed in the House also 
extended the attorney fee system now used in the Old Age, 
Survivors, and Disability Insurance program to the Supplemental 
Security Income program. H.R. 4070 as amended passed in the 
House on June 26, 2002, by a vote of 425 to 0 and passed the 
Senate as amended on November 18, 2002. As passed in the 
Senate, H.R. 4070 maintained the representative payee 
provisions and did not contain the attorney fee provisions 
related to the Supplemental Security Income program. No further 
action was taken on H.R. 4070 in the 107th Congress.

                    7. SOCIAL SERVICES BLOCK GRANTS

    Section 107(d) of Title I of H.R. 4737, the Personal 
Responsibility, Work, and Family Promotion Act of 2002, as 
passed in the House on May 16, 2002, increased to 10 percent 
the limit on transfers from State TANF grants to carry out 
State programs pursuant to Title XX of the Social Security Act 
(Block Grants to States for Social Services). This would 
restore for fiscal year 2003 and each succeeding fiscal year 
the original limit on TANF transfers established in the 1996 
welfare reform law (P.L. 104-193). Additional information 
regarding H.R. 4737 is provided in the review of welfare reform 
issues above.

                             8. CHILD CARE

    Title II of HR 4737, the Personal Responsibility, Work, and 
Family Promotion Act of 2002, as passed in the House on May 16, 
2002, increased funding for the mandatory portion of the Child 
Care and Development Block Grant from $2.717 billion in fiscal 
year 2002 per year to $2.917 billion in each of fiscal years 
2003 through 2007. Additional information regarding H.R. 4737 
is provided in the review of welfare reform issues above.

                  F. Legislative Review of Debt Issues

    On June 24, 2002, Senator Tom Daschle introduced S. 2578, a 
bill to amend Title 31 of the U.S. Code to increase the public 
debt limit. The bill passed the Senate on June 11, 2002. The 
House of Representatives passed the bill on June 27, 2002, and 
the President signed the bill into law on June 28, 2002 (P.L. 
107-199). The bill increased the public debt limit from $5.95 
trillion to $6.4 trillion. The bill does not violate the 
origination clause of the Constitution of the United States 
because increasing the debt limit is not a revenue measure.

                          II. Oversight Review


                          A. Oversight Agenda

                       Committee on Ways and Means,
                                  House of Representatives,
                                  Washington, DC, February 7, 2001.
Hon. Dan Burton,
Chairman, Committee on Government Reform, Rayburn House Office 
        Building, Washington, DC.
Hon. Robert W. Ney,
Chairman, Committee on House Administration, Longworth House Office 
        Building, Washington, DC.
    Dear Chairman Burton and Chairman Ney: In accordance with 
the requirements of Clause 2 of Rule X of the rules of the 
House of Representatives, the following is a list of oversight 
hearings and other oversight-related activities which the 
Committee on Ways and Means and its Subcommittees plan to 
conduct during the 107th Congress.

                             FULL COMMITTEE

    1. Rules, Regulations, Statutes and Court Decisions. On an 
ongoing basis, the Committee and its Subcommittees will review 
specific problems within the Committee's jurisdiction with 
Federal rules, regulations, statutes and court decisions that 
are ambiguous, arbitrary, or nonsensical, or impose a severe 
financial burden on individuals.
    2. President Bush's Proposed Tax Relief Measures. The full 
Committee will hold hearings to consider the proposals in 
President Bush's tax relief plan.
    3. Tax Simplification. The full Committee will hold 
hearings to examine proposals to simplify existing tax laws.

                       SUBCOMMITTEE ON OVERSIGHT

    1. Taxpayer Advocate Report. The Subcommittee will hold a 
hearing to examine the annual report of the Internal Revenue 
Service (IRS) Taxpayer Advocate to the tax-writing committees. 
In this report, which was mandated by the Taxpayer Bill of 
Rights 2 (TBOR2), the Taxpayer Advocate identified initiatives 
undertaken to improve taxpayer services and IRS responsiveness 
and provided recommendations from the Problem Resolution 
Officers in IRS District Offices as to how to resolve problems 
which taxpayers experience in their dealings with the IRS.
    2. Most Serious Management Problems. The Subcommittee will 
hold hearings to receive testimony from the GAO and the 
Inspectors General regarding high-risk programs (i.e., programs 
vulnerable to waste, fraud, or abuse) within the Committee's 
jurisdiction. The information obtained at this hearing about 
high risk-programs will lay the groundwork for additional 
oversight activities in the 107th Congress.
    3. IRS Budget, Filing Season. The Subcommittee will hold a 
hearing in March or April in both 2001 and 2002 to review the 
Administration's request for the IRS fiscal year 2002 and 
fiscal year 2003 budgets respectively and the current tax 
return filing season. Among other things, the Subcommittee will 
review how the IRS is improving customer service, how it is 
implementing recent changes in the tax law, and how it is 
progressing in its effort to modernize its computer system to 
handle the growing workload.
    4. Tax Law Complexity and the Compliance Burden. In 
cooperation and coordination with the full Committee and 
Subcommittee on Select Revenue Measures, the Subcommittee 
continued its efforts from the 105th and 106th Congresses to 
examine areas of complexity in Federal tax law. Section 4022(a) 
of the IRS Restructuring and Reform Act of 1998 (RRA) directed 
the Commissioner to conduct a yearly analysis of the sources of 
complexity in the administration of Federal tax laws. The 
Commissioner's report must include any recommendation for 
reducing complexity in the Federal tax laws and for repealing 
or modifying any provision, which adds undue complexity. The 
same section requires the JCT to report at least once each 
Congress on the ``overall state of the Federal tax system, 
together with recommendations with respect to possible 
simplification proposals and other matters relating to the 
administration of the Federal tax system.''
    5. Tax Laws and the New Economy. On September 26 and 28, 
2000, the Subcommittee held hearings on whether Federal tax 
laws are keeping pace with the ``new economy.'' A major focus 
was the comprehensive study of recovery periods and 
depreciation methods which the Tax and Trade Relief Extension 
Act of 1998 directed the Treasury Secretary to conduct. In 
cooperation and coordination with the full Committee and 
Subcommittee on Select Revenue Measures, the Subcommittee will 
follow up on its work in this area.
    6. Stock Option Plans. In cooperation and coordination with 
the full Committee and Subcommittee on Select Revenue Measures, 
the Subcommittee will continue its efforts, begun in the 106th 
Congress, to determine whether current tax rules are limiting 
the ability of businesses to offer stock options to a broad 
base of employees.
    7. Tax Scams. The IRS and news reports have described 
promoters who incorrectly are advising business owners that the 
16th Amendment was fraudulently adopted or that no tax laws 
require them to withhold taxes from employee paychecks. The 
Subcommittee will investigate the efforts by the IRS to address 
this situation.
    8. International Tax System. In cooperation and 
coordination with the full Committee and Subcommittee on Select 
Revenue Measures, the Subcommittee will continue its efforts 
from the 106th Congress to review impediments to the 
competitiveness of U.S. companies in the current international 
tax regime, including electronic commerce, in order to promote 
efficient growth for U.S. goods and services in the global 
economy.
    9. IRS Systems Modernization. The Subcommittee will 
continue its efforts to monitor the progress of the IRS in 
modernizing its computer systems. Protecting the security of 
taxpayer information will be a major focus of this ongoing 
review. Over the next decade the IRS will spend tens of 
billions of dollars to update its systems. Success of this 
effort is critical to the IRS' ability to provide efficient 
service to taxpayers.
    10. Taxpayer Rights. The 105th Congress passed the landmark 
RRA, which contains numerous taxpayer safeguards, as part of 
its Taxpayer Bill of Rights 3 title. The RRA also includes 
significant IRS organizational changes. The Subcommittee will 
review the ongoing implementation of the new law regarding 
various aspects of improved service for law-abiding taxpayers 
as well as compliance issues related to tax law violators. For 
example, the Subcommittee could examine the IRS progress 
regarding the RRA provisions dealing with offers in compromise 
and innocent spouses.
    11. Taxpayer Privacy. On April 11, 2000, the House passed 
H.R. 4163, the Taxpayer Bill of Rights 2000. The measure 
includes a number of provisions to strengthen taxpayer privacy. 
However, the Senate did not take up the measure. Pursuant to 
the RRA, the U.S. Department of the Treasury and the JCT have 
completed studies on the confidentiality of taxpayer 
information. The Subcommittee will continue to examine the need 
to strengthen taxpayer privacy protection.
    12. Customs Oversight. In cooperation with the Trade 
Subcommittee, the Subcommittee will review the operations of 
the Customs Service, including efforts to upgrade computer 
systems, interdict illegal drugs at the border, and comply with 
the Customs Modernization Act. The Subcommittee also should 
review the ability of the Customs Service to detect outbound 
shipments of illegal drugs and cash in light of the refusal of 
the U.S. Postal Service to permit the Customs Service to 
examine outbound mail.
    13. Administration of Medicare. The Subcommittee will work 
with the Health Subcommittee to coordinate oversight of the 
Health Care Financing Administration.
    14. Social Security Administration. The Subcommittee will 
work with the Social Security Subcommittee to coordinate 
oversight of the SSA.
    15. Field Investigations and Hearings. The Subcommittee 
will conduct such field investigations and hearings as 
Committee staffing and budget resources permit, and as are 
necessary for purposes of evaluating the effectiveness of and 
compliance with the programs and laws under the jurisdiction of 
the Committee on Ways and Means.

                         SUBCOMMITTEE ON TRADE

    1. Bush Administration Trade Policy. The Subcommittee will 
hold a hearing to give the new Administration an opportunity to 
describe its trade policy and respond to Member questions.
    2. Andean Trade Preference Act. The Subcommittee will hold 
a hearing on the question of extending and expanding the Andean 
Trade Preference Act, which has proven a valuable weapon in the 
war against drugs by creating economic incentives to encourage 
Colombia, Bolivia, Ecuador, and Peru to move out of the 
production and shipment of illegal drugs and into legitimate 
products. Authorization for this program expires on December 4, 
2001. The Committee will consider legislation to extend and 
expand trade benefits to additional product categories.
    3. Extension of Fast Track Authority. The Subcommittee will 
hold hearings and work with the new Administration, the 
business community, and other interested groups to construct an 
effective procedure for implementing trade agreements into U.S. 
law with the goal of strengthening the hand of the United 
States at the negotiating table and maximizing Congressional 
oversight and input with respect to trade negotiations.
    4. Free Trade Area of the Americas. In preparation for the 
Quebec Summit meeting scheduled for April 20, 2001, the 
Subcommittee will hold a hearing on the status of negotiations 
to establish a Free Trade Area of the Americas.
    5. Jackson-Vanik Waiver and Extension of Normal Trade 
Relations to the Socialist Republic of Vietnam. The 
Subcommittee will hold a hearing in the spring on the U.S.-
Vietnam Bilateral Trade Agreement, which was concluded on July 
13, 2000, and consider approval of the agreement. Congressional 
approval would make Vietnam eligible for normal trade 
relations, subject to annual renewal under the Jackson-Vanik 
amendment. Approval procedures are covered by permanent fast 
track provisions in the Trade Act of 1974, which are triggered 
by the transmittal of the agreement to Congress by the 
President. The Subcommittee's annual review of Vietnam's 
Jackson-Vanik waiver will begin in June with a Presidential 
determination of what that country's status should be for the 
upcoming year. Until the U.S.-Vietnam Bilateral Trade Agreement 
is transmitted and approved by Congress, the effect of the 
waiver is to make U.S. exporters eligible for certain export 
credit guarantees in doing business with Vietnam. If a 
resolution of disapproval is introduced with respect to the 
President's Jackson-Vanik determination for Vietnam, the 
Subcommittee plans to hold a hearing and consider the issue.
    6. Trade Agreement with Jordan. The Subcommittee will hold 
a hearing in the spring on the U.S.-Jordan Free Trade 
Agreement, which was concluded on October 24, 2000, and will 
consider legislation to implement it. The agreement is not 
covered by fast track authority or implementing procedures.
    7. Preparations for the 2001 World Trade Organization 
Ministerial. The Subcommittee will hold hearings on United 
States preparations for the 2001 WTO Ministerial in Qatar, 
progress in the ongoing WTO negotiations on services and 
agriculture, and progress on the launch of a new round of trade 
negotiations in the WTO.
    8. Negotiation of Other Free Trade Agreements. The 
Subcommittee will hold a hearing on H.R. 1942, a bill 
introduced by Chairman Crane in the 106th Congress, to 
encourage the negotiation of free trade agreements between the 
United States and countries in the Pacific Rim region, such as 
New Zealand, Australia, Singapore and Chile. Testimony will 
also be taken on the status of negotiations to establish 
separate free trade agreements with Singapore and Chile that 
were initiated by the President in December of 2000. In 
addition, the Subcommittee will explore whether other countries 
may be appropriate candidates for free trade agreements.
    9. Trade Relations with Europe. The Subcommittee will 
review the failure of Europe to implement WTO panel 
determinations that trade restrictions on bananas and beef 
hormones are inconsistent with Europe's trade obligations under 
the WTO by contrast with U.S. full implementation of the FSC 
decision.
    10. Trade and Development Act of 2000. The Subcommittee 
will hold a hearing or request public comment on the Trade and 
Development Act of 2000 to ensure that the legislation (Africa/
Caribbean Basin Initiative) is being implemented in a manner 
that works for the companies and the countries that are trying 
to participate.
    11. U.S. Trade Remedy Laws. The Subcommittee will continue 
to review the application of U.S. antidumping and 
countervailing duty laws as well as the effect of antidumping 
orders on downstream users of products subject to these orders. 
The Subcommittee will continue to monitor the status of World 
Trade Organization consultations, panel proceedings, and 
decisions concerning U.S. trade remedy laws or their 
application, and will work with the Administration to determine 
if any changes in U.S. law or policy are appropriate.
    12. Authorizations for U.S. Customs, the Office of the 
USTR, and the ITC. The Subcommittee will hold hearings on 
authorizations for the trade agencies for fiscal years 2002 and 
2003 and work towards passage of authorization legislation. The 
Subcommittee will review funding for the Customs Automated 
Commercial Environment (ACE), the Customs Cyber-smuggling 
Center, drug enforcement efforts, and the International Trade 
Data System (ITDS). The Subcommittee will also examine the 
compensation package for Customs officers to determine whether 
it is adequate and appropriate and will consider measures to 
reform premium and overtime pay for Customs officers. The 
Subcommittee will continue to review Customs drug interdiction 
efforts to analyze their effectiveness as well as their impact 
on business facilitation. In addition, the Subcommittee will 
review annually the portions of the President's budget for 
other agencies that have functions within Ways and Means 
oversight jurisdiction, such as the Commerce Department, State 
Department (payments to international organizations), etc.
    13. Trade Relations with China. The Subcommittee will 
continue to examine China's progress in acceding to the WTO and 
will monitor China's compliance with its WTO obligations.
    14. Miscellaneous Reforms of U.S. Customs Laws and 
Practices. The Subcommittee will likely hold oversight hearings 
on Customs procedures to streamline the entry process and 
facilitate the movement of goods. The Subcommittee will follow 
up on the Customs study required by H.R. 4868 (106th Congress) 
concerning streamlining and expediting the entry process and 
will continue to work with Customs on the Entry Revision 
Project. In addition, in light of a GAO study requested by 
Chairman Crane which found that the Office of Regulations and 
Rulings at the Customs Service did not issue rulings timely, 
the Subcommittee will continue its oversight to ensure that 
Customs is making the changes needed to address this concern. 
Finally, the Subcommittee will review GAO's conclusions 
regarding Customs self-inspection program and take any needed 
action.
    15. Sanctions Reform. In response to the dramatic growth in 
the imposition of unilateral economic sanctions and their 
impact on U.S. trade and competitiveness in international 
markets, the Subcommittee will continue its oversight on the 
use and effectiveness of U.S. unilateral trade sanctions. In 
addition, the Subcommittee will work for passage of the 
``Enhancement of Trade, Security, and Human Rights Through 
Sanctions Reform Act'' to establish a procedural framework for 
the consideration of future U.S. unilateral sanctions. Among 
other things, this framework would require that Congress and 
the President consider a number of factors before imposing 
future unilateral trade sanctions, including the likelihood 
that a proposed sanction will achieve its intended objectives 
and whether the achievement of those objectives outweigh any 
likely costs to United States foreign policy, national 
security, economic, and humanitarian interests. In addition, 
the legislation would ensure that the public has an opportunity 
to comment on proposed unilateral trade sanctions before they 
are imposed.
    16. U.S. Policy Toward Cuba. The Subcommittee will consider 
and review the findings of an ITC study requested by the 
Committee pursuant to section 332 of the Tariff Act of 1930 on 
the economic impact of U.S. sanctions with respect to Cuba. The 
ITC's report is due in February 2001 and will include an 
overview of U.S. sanctions with respect to Cuba, adescription 
of the Cuban economy and trade regime, and an analysis of the 
historical impact of U.S. sanctions on both the U.S. and Cuban 
economies.
    17. Trade Relations with Japan. The Subcommittee will 
continue its oversight of U.S.-Japan trade relations, focusing 
on the necessity for Japan to implement broad structural 
reforms, including deregulation of its economy, reform of its 
banking system, improved transparency, and the opening of its 
distribution system to eliminate exclusionary business 
practices.
    18. Permanent Normal Trade Relations with Jackson-Vanik 
Countries that Join the WTO. At present, many countries whose 
trade status is subject to the Jackson-Vanik amendment to Title 
IV of the Trade Act of 1974 are in the process of joining the 
WTO. The Subcommittee will continue to monitor the progress of 
these countries in negotiating accession to the WTO and will 
consider country-specific legislation authorizing the President 
to determine that the Jackson-Vanik amendment should no longer 
apply as a country becomes a WTO member. Currently, the 
Subcommittee is aware that Armenia and Moldova may join the WTO 
in the near future.
    19. Trade Adjustment Assistance. The Subcommittee will 
continue its oversight and consider reauthorization of the 
general TAA programs for workers and firms, as well as the 
NAFTA-related TAA programs. All of the TAA programs will expire 
on September 30, 2001.
    20. Generalized System of Preferences. The Subcommittee 
will continue its oversight of and consider the reauthorization 
of the GSP which expires on September 30, 2001.
    21. Asia Pacific Economic Cooperation (APEC) Forum. The 
Subcommittee will continue to review the status of U.S. trade 
policy objectives in Asia, particularly in the Asia Pacific 
Economic Cooperation Forum negotiations.
    22. User Fees. The Subcommittee will continue its oversight 
of Customs user fees, including the amount of the fees and 
their relationship to the actual cost for providing services. 
The Subcommittee will examine issues surrounding the 
Consolidated Omnibus Reconciliation Act of 1985 (COBRA) 
account, especially whether the account contains sufficient 
resources to fund inspectional services and whether revised fee 
collections are needed.
    23. Rules of Origin and Country of Origin Marking. The 
Subcommittee will review and continue to consult with the 
Administration and the trade community on the status of the 
rules of origin negotiations underway in the World Customs 
Organization; update rules of origin and country of origin 
marking to implement those negotiations so they reflect current 
business production, sales, and distribution practices; review 
whether U.S. law and U.S. Customs enforcement efforts are 
effective in preventing unlawful transshipment; review labeling 
requirements of U.S. trading partners with respect to meat, 
fresh produce, forged hand tools, and genetically modified 
products.
    24. Normal Trade Relations with the Lao People's Democratic 
Republic. In 1997, the United States and the Lao People's 
Democratic Republic concluded a bilateral commercial agreement 
which calls for a reciprocal extension of normal trade 
relations. In the 107th Congress, the Subcommittee will 
continue its oversight of bilateral relations between the 
United States and Laos.
    25. Drug Interdiction. The Subcommittee will hold a hearing 
to review U.S. Customs Service activities (and other Federal 
efforts) to interdict illegal drugs.

                         SUBCOMMITTEE ON HEALTH

    1. Management of the Health Care Financing Administration. 
The Subcommittee will hold a hearing to evaluate the management 
of the Health Care Financing Administration (HCFA) and to 
explore changes that could be made to improve its organization 
and efficiency.
    2. MedPAC Report and Recommendations. The Subcommittee will 
hold a hearing on the Medicare Payment Advisory Commission's 
(MedPAC) 2001 recommendations to Congress regarding Medicare 
payment policies. Every year, MedPAC's panel of health care 
experts makes recommendations to Congress and its Committees 
with jurisdiction over the program.
    3. Medicare+Choice Program. The Subcommittee will hold a 
hearing to examine the structure and operation of the 
Medicare+Choice program with particular focus on ways to 
stabilize and expand access to the program and to examine the 
efficiency of the funding structure of the program.
    4. Progress in the Development of Prospective Payment 
Systems. The Subcommittee will hold a hearing to assess the 
progress and monitor the operation of the various prospective 
payment systems (PPS) in the Medicare program, including the 
payment systems for home health, hospital outpatient, hospital 
inpatient rehabilitation and other services furnished to 
Medicare beneficiaries.
    5. Health Care Quality. The Subcommittee will hold a 
hearing to examine health care quality issues, including 
changes in the health care market place that affect consumers 
and small providers.
    6. Administrative Simplification under the Health Insurance 
Portability and Accountability Act (HIPAA) of 1996. The 
Subcommittee will hold a hearing on the implementation of 
administrative simplification requirements of HIPAA and their 
potential effect on providers.
    7. Medicare Waste, Fraud and Abuse. The Subcommittee will 
hold a hearing on the enforcement of laws to combat waste, 
fraud and abuse in the Medicare program and what steps might be 
taken to improve their application. In addition, the hearing 
will examine whether steps can be taken to improve the 
application of these laws so that providers, and small 
providers in particular, are not unnecessarily hampered.
    8. Medically Uninsured. The Subcommittee will examine 
options to reduce the number of individuals and families 
without health insurance.
    9. Benefits. The subcommittee will examine the adequacy of 
the current benefit package and review whether changes are 
needed in areas such as out-patient prescription drugs, mental 
health care, breast cancer, chronic care and the ESRD program.
    10. Other Issues. Further hearings will be scheduled as 
time permits to examine certain additional aspects of Medicare 
program management.

                    SUBCOMMITTEE ON HUMAN RESOURCES

    1. Welfare Reform. The Subcommittee will conduct a series 
of hearings to prepare for reauthorization of the welfare 
reform law. Issues of particular interest to the Subcommittee 
are the impact of welfare reform on children and families, and 
the use of welfare funds to promote family formation including 
pro-marriage initiatives, abstinence education, and fatherhood. 
The Subcommittee also will examine the use of sanctions, 
mandatory work programs, and time limits to achieve self-
sufficiency.
    2. Child Care. Under welfare reform total Federal funding 
to States for childcare was increased by about $4 billion over 
6 years. The Subcommittee will examine whether States are 
experiencing problems with the availability, cost, or quality 
of child care, focusing especially on whether States are using 
all the Federal funds available to them for child care.
    3. Child Support Enforcement. Given the dramatic decline in 
the welfare caseload, the financing and distribution of child 
support orders has become an important issue in the States. The 
Subcommittee will examine proposals to simplify and improve the 
collection and distribution of child support payments to 
families both on and off public assistance. In addition, the 
Subcommittee will hold hearings to examine how child support 
programs are financed, with special attention to the decline in 
the welfare caseload.
    4. Supplemental Security Income (SSI). For the past several 
years the SSI program has been on the GAO list of programs at 
high risk of waste, fraud, and abuse. The Subcommittee will 
conduct a hearing on various proposals to reduce this risk.
    5. Child Protection. The GAO has determined that there 
exists a lack of accountability in state use of foster care 
funds. The Subcommittee will hold hearings to examine 
accountability in the foster care system, focusing especially 
on outcomes of the newly established Federal review system and 
the implementation of the 1997 Adoption and Safe Families Act. 
In addition, the Subcommittee will examine various proposals to 
provide more flexibility in the financing of the child 
protection system. Finally, the Subcommittee will consider the 
reauthorization of the Safe and Stable Families program which 
provides grants to states for family preservation, community-
based family support, time-limited family reunification, and 
adoption promotion and support services.
    6. Unemployment Compensation. The Subcommittee will conduct 
hearings on the nation's unemployment compensation system. 
Several issues, including comprehensive reform proposals that 
would increase State flexibility in designing and administering 
the unemployment compensation program, will be examined in 
these hearings.

                    SUBCOMMITTEE ON SOCIAL SECURITY

    1. Social Security Trust Fund solvency issues. The 
Subcommittee will hold a series of hearings to examine various 
issues affecting the well-being of individual recipients and 
the long-term solvency of the Social Security Trust Funds. In 
addition the Subcommittee will examine work incentives to delay 
retirement, senior tax burdens, impacts of the global aging 
crisis, and Social Security coverage issues.
    2. Use of the Social Security Number (SSN). The 
Subcommittee will continue their examination of the use of the 
Social Security number (SSN) as an identifier and the degree to 
which such use contributes to identity theft and Social 
Security program fraud. Legislative options to restrict the use 
of SSNs in both the public and private sectors will also be 
reviewed.
    3. Disability program reform and oversight. The 
Subcommittee will hold a series of hearings on the Social 
Security Disability Insurance (DI) program, including: the 
SSA's implementation of the Ticket to Work and Work Incentives 
Improvement Act; oversight of SSA's disability program 
management, including efforts to improve workload processing at 
both the initial application and appeals levels; and a 
comprehensive review of the challenges facing individuals with 
disabilities today and the degree to which Social Security 
disability programs address those challenges.
    4. Stewardship of the Social Security programs. The 
Subcommittee will conduct oversight hearings to examine the 
management of the Social Security programs, to assess their 
potential vulnerability to fraud, and to explore legislative 
remedies, including provisions to protect beneficiaries whose 
benefits are managed by representative payees.
    5. Service delivery. The Subcommittee will continue its 
ongoing oversight of SSA's service delivery as the agency 
prepares to address the service needs of aging baby boomers 
while facing the loss of one half of its workforce due to 
retirement. The Subcommittee will address the agency's 
management of information technology, efforts to modernize 
service delivery to meet the changing expectations of today's 
customers, plans to recruit and retain new workers, and 
initiatives to educate the public on Social Security programs 
and the challenges they face.

                SUBCOMMITTEE ON SELECT REVENUE MEASURES

    As directed by the Chairman of the full Committee, the 
Subcommittee on Select Revenue Measures will conduct hearings 
and develop legislation on a variety of tax issues. In some 
cases, the Subcommittee's work will build upon the findings of 
the Oversight Subcommittee.
    This list is not intended to be exclusive. The Committee 
anticipates that additional oversight activities will be 
scheduled as issues arise and/or as time permits.
            Sincerely,
                                             Bill Thomas, Chairman.

  B. Actions Taken and Recommendations Made With Respect to Oversight 
                                  Plan


Full Committee

    1. Economic Growth and Tax Relief Reconciliation Act.
    Actions taken: On February 5 and 6, 2001, the Committee 
held hearings to discuss the President's fiscal year 2002 
budget proposals. On February 13 and March 21, 2001, the 
Committee held hearings to discuss the tax relief proposals 
contained in the President's fiscal year 2002 budget.
    On May 15, 2001, Chairman Thomas introduced H.R. 1836, the 
``Economic Growth and Tax Relief Reconciliation Act of 2001.'' 
The bill included many of the President's tax relief proposals, 
including the creation of a new 10-percent bracket, reduction 
of the individual income tax rates, an increase in the child 
tax credit, marriage tax penalty relief, an expansion of 
Coverdell Education Savings Accounts, and a phase out of the 
estate tax.
    The bill passed the House on May 16, 2001, and passed the 
Senate, with an amendment, on May 23, 2001. The conference 
report on H.R. 1836 passed the House and Senate on May 26, 2001 
and was signed into law by the President on June 7, 2001 (P.L. 
107-16).
    2. Tax Code Simplification.
    Actions taken: On July 17, 2001, the Subcommittees on 
Oversight and Select Revenue Measures held a hearing on tax 
code simplification. The hearing focused on the nature and cost 
of complexity in the tax code and the options for 
simplification. The Subcommittees examined proposals by the 
National Taxpayer Advocate and the JCT.
    3. Hearings to examine Social Security Trust Fund issues.
    Actions taken: The Committee held a joint hearing with the 
Senate Committee on Finance on the Social Security and Medicare 
Trustee's 2001 Annual Report on March 20, 2001. The Managing 
Trustee, Secretary of the U.S. Department of the Treasury Paul 
O'Neill, testified that while the short-term financial status 
of both Social Security and Medicare improved somewhat over the 
previous year's report, long-term analysis indicated that both 
the HI and Old Age, Survivors, and Disability Insurance (OASDI) 
programs' tax income was estimated to fall short of 
expenditures beginning in 2016, that the HI trust fund would be 
exhausted by 2029, and that the OASDI trust funds would be 
depleted by 2038. He stated both programs should be 
strengthened at the earliest opportunity.

Subcommittee on Oversight

            A. Subcommittee Hearings for 107th Congress
    1. Taxpayer Advocate Report.
    Actions taken: The Subcommittee held hearings on July 12, 
2001, and February 28, 2002, to examine the annual reports of 
the Internal Revenue Service (IRS) Taxpayer Advocate. In these 
reports, mandated by the Taxpayer Bill of Rights 2, the 
Taxpayer Advocate identified initiatives undertaken to improve 
taxpayer services and IRS responsiveness and provided 
recommendations about how to resolve problems that taxpayers 
experience in their dealings with the IRS.
    2. Tax Code Compliance Burden.
    Actions taken: The Subcommittee, in conjunction with the 
Subcommittee on Select Revenue Measures, held a hearing on July 
17, 2001, to focus on the nature and cost of complexity in the 
tax code and the options for tax simplification. The hearing 
reviewed various recommendations by the JCT for simplification 
of the tax code, as presented in its study released in April 
2001, entitled, ``Study of the Overall State of the Federal Tax 
System and Recommendations for Simplification'' (JCS-3-01). The 
report makes suggestions concerning many areas of the tax code, 
including individual and corporate alternative minimum tax, 
earned income credit, individual capital gains, the definition 
of a qualifyingchild, phase-outs, individual retirement 
accounts (IRAs), foreign tax credits, pass-through entities, tax-exempt 
entities, excise taxes, and taxation of Social Security benefits. The 
Subcommittee also heard testimony from representatives of the National 
Taxpayers Union, the Taxpayers Foundation, Urban Institute, and the 
Brookings Institution regarding ideas for simplification, and the 
effects of the JCT's recommendations for simplification.
    3. IRS Fiscal Year 2003 Budget/2001 and 2002 Tax Return 
Filing Seasons.
    Actions taken: The Subcommittee held a hearing on the 2001 
Tax Filing Return Season on April 3, 2001, to review the 
progress in customer service offered by the IRS in the 2001 tax 
filing season, including progress in the customer 
communications system, electronic filing, and systems 
modernization. The Subcommittee held a hearing on April 9, 
2002, to review developments in the 2002 tax-filing season, 
including progress in the customer communications system, 
electronic filing, and systems modernization. In addition, the 
Subcommittee reviewed the proposed budget for the IRS for 
fiscal year 2003.
    4. Pension Policy.
    Actions taken: The Subcommittee held two hearings on 
pension policy issues. The first hearing, held on March 5, 
2002, was on employee and employer views on defined 
contribution pension plans. The hearing focused on possible 
improvements that could be made to employer-sponsored defined 
contribution retirement plans, to increase employee confidence, 
and maintain employer support of such plans. The second 
hearing, held on June 20, 2002, focused on issues related to 
retirement security and defined benefit pension plans. The 
Subcommittee examined the role of defined benefit pension plans 
in retirement security, including advantages, disadvantages, 
and reasons for trends in the decrease of the number of such 
plans. The Subcommittee also examined the role of ``cash-
balance'' pension plans as a hybrid alternative to traditional 
defined benefit pension plans, as well as the rules and 
practical effects of converting a traditional defined benefit 
into a cash balance plan.
    5. Implementation of IRS Restructuring and Reform.
    Actions taken: The IRS Restructuring and Reform Act of 1998 
established the IRS Oversight Board, which was charged with 
producing independent reviews of the IRS and its budgetary 
needs, and mandated bicameral, annual reviews of the IRS. The 
Subcommittee reviewed the first IRS Oversight Board annual 
report and heard testimony from the Oversight Board's Chairman, 
Larry Levitan, on February 28, 2002. The Subcommittee assisted 
with the annual IRS Joint Congressional Reviews on May 8, 2001, 
and May 14, 2002. These annual reviews are comprised of Members 
of both the House and Senate from six Congressional committees 
including, the House Committees on Ways and Means, 
Appropriations, Government Reform, and the Senate Committees on 
Finance, Appropriations, and Government Affairs. The Joint 
Reviews are organized to review progress of the IRS in 
implementing the Restructuring and Reform Act of 1998, as well 
as review the strategic plans and budget of the IRS for the 
upcoming fiscal year.
    6. Penalty and Interest Reform.
    Actions taken: The latest comprehensive revision of the 
overall penalty structure in the Internal Revenue Code was 
enacted as part of the Omnibus Reconciliation Act of 1989. The 
IRS Restructuring and Reform Act of 1998 required the JCT and 
the U.S. Department of the Treasury to conduct separate 
studies, reviewing the interest and penalty provisions of the 
Code and making recommendations for administrative and 
legislative changes. On March 19, 2001, the Subcommittee 
requested written comments on taxpayer rights, including 
penalty and interest reform and taxpayer privacy. The 
Subcommittee reviewed the studies and assessed the 
recommendations, and incorporated selected portions of these 
into section I of H.R. 3991, the Taxpayer Protection and IRS 
Accountability Act of 2002. On April 9, 2002, the full 
Committee held a markup on H.R. 3991, in which the bill with 
amendment was favorably reported. The House failed to pass H.R. 
3991 with changes on April 10, 2002. The provisions in H.R. 
3991 later passed the House twice as part of H.R. 586, the Tax 
Relief Guarantee bill, on April 18, 2002, and as part of H.R. 
5728, the Tax Administration Reform Act of 2002, on November 
14, 2002. Certain provisions were also included in House-passed 
bills, H.R. 4757, Our Lady of Peace Act, on October 15, 2002, 
and H.R. 4069, the Social Security Benefit Enhancements for 
Women Act of 2002, on May 14, 2002.
    7. Taxpayer Information Privacy.
    Actions taken: The Internal Revenue Code prohibits 
disclosure of tax returns and taxpayer information, except as 
specifically authorized by the Code. These provisions have been 
amended in a piecemeal fashion since a major revision in 1976. 
The IRS Restructuring and Reform Act of 1998 mandated that the 
U.S. Department of the Treasury and the JCT each conduct a 
study on this issue. The JCT released its Study Of Present-Law 
Taxpayer Confidentiality And Disclosure Provisions As Required 
By Section 3802 Of The Internal Revenue Service Restructuring 
And Reform Act Of 1998 on January 28, 2000, and the U.S. 
Department of the Treasury released its report, Scope and Use 
of Taxpayer Confidentiality and Disclosure Provisions on 
October 2, 2000. The Subcommittee reviewed these studies, and 
incorporated a subset of the recommendations in section IV of 
H.R. 3991, the Taxpayer Protection and IRS Accountability Act 
fo 2002.
    8. Field Investigations and Hearings.
    Actions taken: The Subcommittee conducted a field hearing 
on March 5, 2001, in Mayville, New York, to examine on the 
impact of Federal tax laws on the cost and supply ofenergy. The 
hearing focused on (1) the adequacy of current tax incentives for 
production and conservation, (2) the causes of current shortages and 
high prices, and (3) the impact of shortages and high prices on 
individual consumers and business.

Subcommittee on Trade

    1. Bush Administration Trade Policy.
    Actions taken: On March 7, 2001, the Committee held 
hearings on President Bush's trade agenda for 2001. This 
hearing addressed the content and strategy of trade 
negotiations in which the United States is participating, 
including negotiations to establish the FTAA and negotiations 
on the WTO ``built-in agenda'' on services and agriculture. The 
Committee also reviewed the status of preparations to launch a 
new round of multilateral negotiations in the WTO and progress 
in negotiations to establish trade agreements with Singapore, 
Chile, and other nations in the Pacific Rim region. Finally, 
the Committee analyzed the relationship of these negotiations 
to trade negotiating authority and whether the United States 
was disadvantaged by not having the authority in place.
    Following House passage of H.R. 3005, legislation to grant 
the President Trade Promotion Authority, the Committee held a 
hearing on February 7, 2002, to address President Bush's trade 
agenda for 2002 and the content and strategy of these trade 
negotiations. At this hearing, the Committee also examined: (1) 
the success of the WTO Ministerial Meeting which launched the 
Doha Development Agenda, a new round of multilateral trade 
negotiations, and (2) progress in negotiations with Chile and 
Singapore, in light of House passage of H.R. 3005.
    On March 29, 2001, the Trade Subcommittee held a hearing on 
the increasing number of bilateral and regional trade 
agreements to which the United States is not a party and the 
implications for the United States. This hearing focused on how 
these new trade agreements disadvantage U.S. business, workers, 
and families and assessed opportunities for the United States 
to move forward with new negotiations.
    2. Andean Trade Preference Act.
    Actions taken: On March 7, 2001, May 8, 2001, and February 
7, 2002, the Committee held hearings on whether to extend and 
expand trade benefits for Colombia, Peru, Ecuador, and Bolivia 
under the Andean Trade Preference Act, which expired on 
December 4, 2001. On October 3, 2001, Subcommittee Chairman 
Crane introduced H.R. 3009 to extend and enhance trade benefits 
available under the ATPA as a way to create viable alternatives 
to illicit drug production, thereby enhancing political 
security in the Andean region and the hemisphere. On October 5, 
2001, the Committee on Ways and Means approved H.R. 3009, as 
amended, by voice vote. The House approved H.R. 3009 on 
November 16, 2001, by voice vote.
    On December 14, 2001, the Senate Committee on Finance 
reported H.R. 3009, as amended (S. Rept. 107-126). On May 23, 
2002, the Senate passed H.R. 3009, as amended. On June 26, 
2002, the House concurred with the Senate amendment with an 
amendment pursuant to H. Res. 450, which contained the more 
expansive Andean language already passed by the House. The 
conference report was passed by the House on July 26, 2002, and 
by the Senate on August 1, 2002. H.R. 3009 was signed into law 
on August 6, 2002 (P.L. 107-210).
    On January 31, 2001, the Committee received the Third 
Report to Congress on the Operation of the Andean Trade 
Preference Act, prepared by USTR pursuant to P.L. 102-182.
    3. Extension of Trade Promotion Authority (formerly 
referred to as ``Fast Track'').
    Actions taken: The Committee held hearings on March 7 and 
March 29, 2001, and February 7, 2002 (described above) to 
address the need for fast-track or trade promotion authority. 
On October 3, 2001, Chairman Thomas, on behalf of himself and 
Representatives Crane, Dreier, Jefferson, Tanner, and Dooley, 
introduced H.R. 3005, the Bipartisan Trade Promotion Authority 
Act of 2001. The House passed H.R. 3005 on December 6, 2001.
    On December 12, 2001, the Senate Committee on Finance 
reported out its version of H.R. 3005, which included 
amendments to the House-passed version of Trade Promotion 
Authority (S. Rept. 107-139). On May 23, 2002, the Senate 
agreed to an amendment to include its version of Trade 
Promotion Authority and several other major trade provisions as 
a substitute amendment to the House-passed H.R. 3009, the 
Andean Trade Promotion and Drug Eradication Act, by a vote of 
66 to 30. On June 26, 2002, the House concurred with the Senate 
amendment with an amendment pursuant to H. Res. 450, which 
contained the TPA legislation.
    The conference report on H.R. 3009, which contained TPA, 
passed the House on July 27, 2002, and the Senate on August 1, 
2002. On August 6, 2002, the President signed the bill into law 
(P.L. 107-210).
    As enacted, the Bipartisan Trade Promotion Authority Act of 
2002 grants TPA to the President through July 1, 2005, with an 
extension through July 1, 2007, subject to disapproval. This 
authority provides that once the President formally submits to 
Congress legislation to implement a trade agreement, Congress 
must consider the legislation within certain deadlines and 
without amendment. In return, the Congress provides 
theAdministration with detailed guidance on its objectives for such 
negotiations and improves consultations between the Administration and 
Congress, before, during, and after negotiations of a trade agreement.
    4. Free Trade Area of the Americas.
    Actions taken: On March 29, 2001, the Trade Subcommittee 
held a hearing on the increasing number of bilateral and 
regional trade agreements to which the United States is not a 
party, particularly in its own hemisphere, and the implications 
for the United States. This hearing focused on how these new 
trade agreements disadvantage U.S. business, workers, and 
families and assessed opportunities for the United States to 
move forward with new negotiations.
    Between April 20-22, 2001, a staff member from the 
Committee accompanied a Congressional Delegation from the 
Committee on Agriculture led by Representative Combest that 
attended the FTAA Summit in Quebec, Canada.
    On May 8, 2001, the Trade Subcommittee held a hearing on 
the outcome of the Summit of the Americas held in Quebec City, 
Canada, and the prospects and timing for achieving the FTAA.
    Also, on May 8, 2001, the Committee received a report 
requested by Trade Subcommittee Chairman Crane entitled ``Free 
Trade Area of the Americas: April 2001 Meetings Set Stage for 
Hard Bargaining to Begin.''.
    On July 20, 2001, the Committee received a report, 
requested by Trade Subcommittee Chairman Crane, entitled 
``North American Free Trade Agreement: U.S. Experience with 
Environment, Labor, and Investment Dispute Settlement Cases.''.
    Following House passage of H.R. 3005, legislation to grant 
the President Trade Promotion Authority on February 7, 2002, 
the Committee held a hearing on President Bush's trade agenda 
for 2002, and considered prospects for successfully concluding 
the FTAA negotiations.
    5. Jackson-Vanik Waiver and Extension of Normal Trade 
Relations to the Socialist Republic of Vietnam.
    Actions taken: On June 8, 2001, President Bush transmitted 
the U.S.-Vietnam BTA to Congress for its approval. 
Congressional approval of the BTA makes Vietnam eligible for 
normal trade relations, subject to annual renewal under the 
Jackson-Vanik provisions in Title IV of the Trade Act of 1974. 
Approval procedures are covered by permanent fast track 
provisions in the Trade Act of 1974, which are triggered by the 
transmittal of the agreement to Congress by the President.
    On June 12, 2001, identical bills were introduced in the 
House and Senate (by request) to grant normal trade relations 
status to Vietnam by approving the BTA. H.J. Res. 51 was 
introduced in the House by Representatives Armey, Gephardt, and 
Crane. On September 5, 2001, the Committee on Ways and Means 
reported favorably H.J. Res. 51 without amendment by voice 
vote. On September 6, 2001, the House approved H.J. Res. 51 
without amendment by voice vote. On October 3, 2001, the Senate 
approved H.J. Res. 51 without amendment by a vote of 88 to 12. 
On October 16, 2001, the President signed H.J. Res. 51 (P.L. 
107-052).
    Under the Trade Act of 1974, in order for Vietnam to be 
eligible for NTR status and access to U.S. Government credits, 
or credit or investment guarantees, the President is required 
to submit to Congress a recommendation to extend Vietnam's 
waiver from the freedom of emigration requirements for a 12-
month period no later than 30 days prior to the previous 
waiver's expiration. The President renewed Vietnam's waiver on 
June 1, 2001 (H. Doc. 107-82). A resolution disapproving the 
President's determination was reported unfavorably by the 
Committee and was defeated by the House by a vote of 91 to 324 
(with 1 present vote).
    On June 3, 2002, the President renewed Vietnam's waiver 
from the Jackson-Vanik freedom of emigration requirements in 
Title IV of the Trade Act of 1974 (H. Doc. 107-221). A 
resolution disapproving the President's determination was 
reported unfavorably by the Committee and was defeated by the 
House by a vote of 91 to 338.
    6. Trade Agreement with Jordan.
    Actions taken: President Clinton transmitted the United 
States-Jordan Free Trade Agreement to the Congress for approval 
on January 6, 2001 (H. Doc. 107-15). On April 4, 2001, His 
Majesty King Abdullah II of Jordan met with the Committee on 
Ways and Means to discuss implementation of the FTA. On July 
24, 2001, H.R. 2603, the United States-Jordan Free Trade Area 
Implementation Act of 2001, was introduced by Chairman Thomas. 
The Committee on Ways and Means marked up H.R. 2603 and on July 
31, 2001, favorably reported it with an amendment in the nature 
of a substitute by voice vote. On July 31, 2001, the House 
passed H.R. 2603 under suspension by voice vote. On September 
24, 2001, the Senate Committee on Finance was discharged from 
consideration of H.R. 2603 by unanimous consent, and the Senate 
approved the bill by voice vote. On September 28, 2001, H.R. 
2603 was signed by the President (P.L. 107-043).
    7. Preparations for the 2001 World Trade Organization 
Ministerial.
    Actions taken: On September 4, 2002, the Committee received 
a GAO report, requested by Chairman Thomas, Subcommittee 
Chairman Crane, and Senator Grassley, on the preparations for 
and the outcome of the Doha Ministerial Meeting, held in 
November 2001, which succeeded in launching a new round of 
multilateral trade negotiations. In this report, GAO analyzed 
the factors that contributed to the meeting's successful 
outcome and evaluated the most significant challenges to the 
WTO in the overall negotiations.
    Following passage of H.R. 3005, legislation to grant the 
President Trade Promotion Authority on February 7, 2002, the 
Committee held a hearing on President Bush's trade agenda for 
2002. At this hearing, the Committee examined the success of 
the WTO Ministerial Meeting which launched the Doha Development 
Agenda, a new round of multilateral trade negotiations.
    On June 8, 2001, the Trade Subcommittee received a report, 
requested by Trade Subcommittee Chairman Phil Crane entitled 
``International Trade: Comparison of U.S. and European Union 
Preference Programs.''
    On November 4, 2002, the Committee received a letter from 
Ambassador Zoellick notifying Congress that the United States 
is engaged in negotiations to strengthen and extend as well as 
establish new trade agreements under the auspices of the WTO.
    As part of Trade Act of 2002, Congress approved the 
establishment of a small fund to pay small settlement in WTO 
cases.
    8. Negotiation of Other Free Trade Agreements.
    Actions taken: On March 7, 2001, the Committee held a 
hearing on President Bush's trade agenda for 2001. This hearing 
addressed the content and strategy of trade negotiations in 
which the United States is participating, including 
negotiations to establish trade agreements with Singapore, 
Chile, and other nations in the Pacific Rim region. Finally, 
the Committee analyzed the relationship of these negotiations 
to trade negotiating authority and whether the United States 
was disadvantaged by not having the authority in place.
    Following House passage of H.R. 3005, legislation to grant 
the President Trade Promotion Authority on February 7, 2002, 
the Committee held a hearing on President Bush's trade agenda 
for 2002, which addressed the content and strategy of 
negotiations with Chile and Singapore, in light of House 
passage of H.R. 3005.
    On March 29, 2001, the Trade Subcommittee held a hearing on 
the increasing number of bilateral and regional trade 
agreements to which the United States is not a party and the 
implications for the United States. This hearing focused on how 
these new trade agreements disadvantage U.S. business, workers, 
and families and assessed opportunities for the United States 
to move forward with new negotiations, such as with countries 
in the Pacific Rim.
    On August 22, 2002, the Committee received a letter from 
Ambassador Zoellick indicating his intention to conclude a free 
trade agreement negotiations with Chile.
    On August 22, 2002, the Committee received a letter from 
Ambassador Zoellick indicating his intention to conclude a free 
trade agreement negotiations with Singapore.
    On October 1, 2002, Ambassador Zoellick notified the 
Committee his intention to initiate free trade agreement 
negotiations with the five member countries of the Central 
American Economic Integration System (Costa Rica, El Salvador, 
Guatemala, Honduras, and Nicaragua).
    On November 4, 2002, the Committee received a letter from 
Ambassador Zoellick notifying Congress that the President 
intends to initiate negotiations for a free trade agreement 
with the five member countries of the Southern African Customs 
Union (Botswana, Lesotho, Namibia, South Africa, and 
Swaziland).
    On November 13, 2002, the Committee received a letter from 
Ambassador Zoellick notifying Congress that the President 
intends to initiate negotiations for a free trade agreement 
with Australia and soliciting the view of the Committee on 
including New Zealand as part of that agreement.
    On January 17, 2002, the Senate Committee on Finance 
formally requested the ITC to conduct an assessment of the 
economic effects of the establishment of a free trade agreement 
between the United States and Taiwan. On June 10, 2002, several 
Members of the Committee on Ways and Means (Representatives 
Dunn, Rangel, Crane, Levin, Shaw, McDermott, Ramstad, McNulty, 
Herger, Houghton, English, Hayworth, Foley, and Brady) wrote a 
letter to ITC Chairman Steve Koplan expressing their support 
for the economic impact study. The ITC issued its report in 
October 2002.
    9. Trade Relations with Europe.
    Actions taken: On June 8, 2001, the Trade Subcommittee 
received a report requested by Trade Subcommittee Chairman Phil 
Crane entitled ``International Trade: Comparison of U.S. and 
European Union Preference Programs.''
    On January 14, 2002, the WTO Appellate Panel issued its 
report finding the United States' ETI rules to be a prohibited 
export subsidy. On August 30, 2002, a WTO Arbitration Panel 
authorized the EU to apply trade sanctions in the amount of $4 
billion against U.S. exports to the EU. On February 27, 2002, 
the Committee held a hearing on the WTO decision inorder to (1) 
outline the history of the FSC-ETI dispute, (2) analyze the January 14, 
2002, WTO Appellate Panel Decision, and (3) discuss the potential trade 
ramifications of the decision. Officials from the U.S. Department of 
the Treasury and the USTR, as well as representatives from the business 
community, testified at the hearing.
    On July 11, 2002, Chairman Thomas introduced H.R. 5095, the 
American Competitiveness and Corporate Accountability Act of 
2002, in order to put the United States in compliance with its 
WTO obligations and to address competitiveness and corporate 
accountability issues. A fuller discussion of this legislation 
and other hearings of the Committee is located in the tax 
section of this report.
    10. Trade and Development Act of 2000.
    Actions taken: H.R. 3009, the Andean Trade Promotion and 
Drug Eradication Act, which was signed into law by the 
President on August 6, 2002, contains several provisions to 
expand the Trade and Development Act of 2002. Specifically, the 
legislation clarifies that preferential treatment is provided 
to knit-to-shape apparel articles assembled in beneficiary 
countries in CBI and Africa and provides preferential treatment 
for apparel articles that are cut both in the United States and 
beneficiary CBI or African countries. In addition, the 
legislation increases the caps for knit apparel made in CBI 
countries from regional fabric made with U.S. yarn, T-shirts, 
and knit-to-shape apparel (except socks).
    With respect to Africa, the legislation corrects the yarn 
diameter in the AGOA legislation so that sweaters knit to shape 
from merino wool of a specific diameter are eligible and allows 
Namibia and Botswana to use third country fabric for the 
transition period under the AGOA regional fabric country cap. 
The bill also clarifies that apparel wholly assembled in one or 
more beneficiary sub-Saharan African countries from components 
knit-to-shape in one or more such countries from U.S. or 
regional yarn is eligible for preferential treatment, clarifies 
that apparel knit-to-shape and wholly assembled in one or more 
lesser developed beneficiary sub-Saharan African countries is 
eligible for preferential treatment regardless of the origin of 
the yarn used to make such articles, and increases the amount 
of articles eligible for benefits.
    The conference report was based on the House version of 
H.R. 3009, which was approved by the Committee on October 5, 
2001, by voice vote. The House approved H.R. 3009, on November 
16, 2001, by voice vote. On December 14, 2001, the Senate 
Committee on Finance reported H.R. 3009, as amended (S. Rept. 
107-126). The amendments adopted by the Senate Committee on 
Finance did not include any provisions relating to trade with 
Caribbean Basin or African countries. On May 23, 2002, the 
Senate passed H.R. 3009, as amended. On June 26, 2002, the 
House concurred with the Senate amendment with an amendment 
pursuant to H. Res. 450, which included the House provisions 
related to trade with Caribbean Basin and African countries 
described above. In addition, H. Res. 450 incorporated one 
provision relating to trade with Caribbean Basin countries that 
was not included in H.R. 3009 when it passed the House. The new 
provision is a requirement that apparel made of U.S. knit or 
woven fabric assembled in a CBTPA country qualifies for 
benefits only if the U.S. knit or woven fabric is dyed and 
finished in the United States. On July 26, 2002, the House 
agreed to the conference report, and on August 1, 2002, the 
Senate agreed to the conference report. The bill was signed 
into law on August 6, 2002 (P.L. 107-210).
    On October 1, 2002, Ambassador Zoellick notified the 
Committee of his intention to initiate free trade agreement 
negotiations with the five member countries of the Central 
American Economic Integration System (Costa Rica, El Salvador, 
Guatemala, Honduras, and Nicaragua).
    11. U.S. Trade Remedy Laws.
    Actions taken: The Subcommittee continued to review the 
application of U.S. antidumping and countervailing duty laws as 
well as the effect of antidumping orders on downstream users of 
products subject to these orders. The Subcommittee continued to 
monitor the status of WTO consultations, panel proceedings, and 
decisions concerning U.S. trade remedy laws or their 
application, and worked with the Administration to determine if 
any changes in U.S. law or policy are appropriate. The 
Subcommittee held several consultations with USTR and the U.S. 
Department of Commerce on the states of implementation of panel 
decisions as well as ongoing negotiations in the WTO and the 
Organization for Economic Cooperation and Development. In June 
2001, the CBO issued a report requested by the Subcommittee 
titled ``Antidumping Action in the United States and Around the 
World: An Update.'' The report updates a June 1998 analysis 
examining international data on antidumping activity to 
determine trends, compare U.S. activity with that of other 
countries, and study claims made by various participants in the 
debate over U.S. policy.
    On November 7, 2001, the House passed H. Con. Res. 262 by a 
vote of 410 to 4, expressing the sense of Congress on trade 
remedies negotiations in the WTO. The resolution urged the 
President during the WTO Ministerial in Doha, Qatar and any 
subsequent rounds of WTO negotiations to (1) avoid an agreement 
which lessens the effectiveness of domestic and international 
disciplines on unfair trade, especially dumping and subsidies, 
and (2) ensure that U.S. exports are not subject to the abusive 
use of trade laws, including antidumping and countervailing 
duty laws, by other countries.
    12. Authorizations for U.S. Customs, the Office of the 
USTR, and the ITC.
    Actions taken: Subcommittee Chairman Crane held a hearing 
on July 17, 2001, on budget authorizations for the U.S. Customs 
Service, the Office of the USTR, and the ITC. TheSubcommittee 
received information on the activities of these agencies and projected 
work loads and examined their budget submissions, inspector general 
reports, strategic plans, and performance plans. On October 16, 2001, 
Subcommittee Chairman Crane introduced H.R. 3129, authorizing 
appropriations for fiscal years 2002 and 2003, and it was enacted as 
part of the Trade Act of 2002 (P.L. 107-210) as signed into law by the 
President on August 6, 2002. The Act reflected the need for more 
resources by USTR in conducting international trade negotiations and 
the need for more and special resources for Customs to carry out its 
enhanced anti-terrorism missions in addition to facilitating trade and 
interdicting illegal drug smuggling. The Committee also considered 
border security issues in the context of the Maritime Transportation 
Anti-terrorism Act of 2002 and the Enhanced Border Security and Visa 
Entry Reform Act of 2002, which were both enacted in the 107th 
Congress.
    In addition, on June 26, 2002, the Committee held a hearing 
on the President's proposal to create a U.S. Department of 
Homeland Security including the transfer of all assets and 
authority of the U.S. Customs Service to the new Department. 
The Committee collected extensive information on the structure 
and functions of Customs and favorably reported a legislative 
proposal to transfer Customs in its entirety to the new 
Department while maintaining legal authority with the Secretary 
of the Treasury and mandating the continuation of customs 
revenue functions and specific offices. That proposal was 
adopted by the House on November 13, 2002, as part of H.R. 5005 
(H. Rept. 107-609). On November 13, 2002, the House Select 
Committee on Homeland Security reported H.R. 5710 as a 
substitute to H.R. 5005, with minor changes in the Customs 
section, and the House passed the bill on November 13, 2002. 
Following Senate passage on November 19, the President signed 
the bill into law on November 25, 2002.
    13. Trade Relations with China.
    Actions taken: The Committee examined the President's 
annual determination to continue China's NTR status for the 
period between July 1, 2001, and June 30, 2002 (H. Doc. 107-
79). A resolution disapproving the President's determination, 
H.J. Res. 50, was introduced on June 5, 2001. On July 10, 2001, 
the Trade Subcommittee held a hearing on overall U.S. trade 
relations with the People's Republic of China and the status of 
China's negotiations to join the WTO, and to consider the 
extension of NTR status for China for an additional year. On 
July 12, 2001, the Committee reported H.J. Res. 50 adversely, 
without amendment. On July 19, 2001, the House defeated H.J. 
Res. 50 by a vote of 169 to 259. The effect of this resolution 
would have been to withdraw NTR benefits from Chinese products.
    On November 13, 2001, the House received a message from the 
President certifying the terms and conditions for accession of 
China to the WTO are at least equivalent to those agreed to in 
the November 15, 1999, bilateral agreement between the United 
States and China. On December 27, 2001, the President granted 
permanent nondiscriminatory treatment (normal trade relations 
treatment) pursuant to P.L. 106-286. The Committee on Ways and 
Means continues to monitor the progress China is making in 
implementing the obligations it assumed when it joined the WTO 
on December 11, 2001.
    During the 107th Congress, the Committee on Ways and Means 
received two studies on China from the GAO. On October 3, 2002, 
the Committee received a report requested by Chairman Thomas 
and Representative Rangel entitled ``World Trade Organization: 
Analysis of China's Commitments to Other Members.'' On 
September 23, 2002, the Committee received a report, also 
requested by these Members, entitled ``World Trade 
Organization: Selected U.S. Company Views about China's 
Membership.''
    A bipartisan delegation of the Committee on Ways and Means 
staff and the Senate Committee on Finance staff participated in 
an oversight trip to China with Undersecretary of Commerce 
Grant Aldonas from April 1-7, 2002. The delegation visited 
Beijing and Shanghai to investigate compliance issues and to 
highlight the importance that Congress and the Administration 
place on China's full implementation of its trade obligations 
resulting from China's accession to the WTO on December 11, 
2001.
    14. Miscellaneous Reforms of U.S. Customs Laws and 
Practices.
    Actions taken: The Trade Act of 2002 included several 
reforms to Customs laws and practices. Customs was directed to 
implement a year-long regulatory process for the ultimate goal 
of requiring advanced electronic information on cargo. Also, 
the methodology for collection of Customs user fees for 
enhanced inspectional services for express air couriers was 
changed from a direct reimbursement method to a per mail item 
method. Customs legal authority to collect duties was modified 
to accommodate automation improvements in the near future. The 
Trade Act also authorized the search of outbound mail and 
provided immunity to inspectors performing personal searches at 
the border subject to civil rights protections.
    On March 8, 2002, Subcommittee Chairman Crane requested 
written comments from parties interested in miscellaneous trade 
proposals, technical corrections to the trade laws, and 
temporary suspensions on certain imports. On September 17, 
2002, Subcommittee Chairman Crane introduced H.R. 5385, the 
``Miscellaneous Trade and Technical Corrections Act of 2002.'' 
The bill passed the House on October 7, 2002, and included 
provisions to suspend duties on various products, expand trade 
benefits to GSP recipients targeted at Pakistan, extend trade 
benefits to Turkey, and amend Customs ship repair record-
keeping requirements. The Senate took no action on the bill.
    15. Sanctions Reform.
    Actions taken: In response to the dramatic growth in the 
imposition of unilateral economic sanctions and their impact on 
U.S. trade and competitiveness in international markets, 
theSubcommittee continued its oversight on the use and effectiveness of 
U.S. unilateral trade sanctions. In particular, the Subcommittee 
analyzed existing and proposed unilateral trade sanctions against 
terrorist states in the wake of the terrorist attacks on September 11, 
2001. In this context, the Subcommittee focused on the importance of 
examining whether unilateral economic sanctions are effective in 
achieving U.S. policy goals.
    16. U.S. Policy Toward Cuba.
    Actions taken: In February 2001, the ITC issued a study 
requested by the Committee pursuant to section 332 of the 
Tariff Act of 1930 on the economic impact of U.S. sanctions 
with respect to Cuba. The Subcommittee considered and reviewed 
the findings of the ITC report, which included an overview of 
U.S. sanctions with respect to Cuba, a description of the Cuban 
economy and trade regime, and an analysis of the historical 
impact of U.S. sanctions on both the U.S. and Cuban economies.
    17. Trade Relations with Japan.
    Actions taken: On March 7, 2001, the Committee held 
hearings on President Bush's trade agenda for 2001, which 
included consideration of U.S.-Japan trade issues. This hearing 
addressed the content and strategy of trade negotiations on the 
WTO ``built-in agenda'' relating to services and agriculture. 
The Committee also reviewed the status of preparations to 
launch a new round of multilateral negotiations in the WTO. The 
Committee analyzed the relationship of these negotiations to 
trade negotiating authority and whether the United States was 
disadvantaged in achieving its trade objectives with countries 
such as Japan by not having the authority in place. Following 
passage of H.R. 3005, legislation to grant the President Trade 
Promotion Authority, the Committee held a hearing on February 
7, 2002, to address President Bush's trade agenda for 2002. At 
the hearing, the Committee examined the success of the WTO 
Ministerial Meeting which launched the Doha Development Agenda, 
a new round of multilateral trade negotiations which will 
address important issues on the U.S.-Japan trade agenda such as 
agriculture and market access for industrial products and 
forest products. Committee staff also held several 
consultations sessions with USTR officials responsible for 
implementing the Regulatory Reform and Competition Policy 
Initiative, which was launched by the two governments on June 
30, 2001.
    18. Permanent Normal Trade Relations with Jackson-Vanik 
Countries that Join the WTO.
    Actions taken: At present, several countries whose trade 
status is subject to the Jackson-Vanik provisions in Title IV 
of the Trade Act of 1974 are in the process of joining the WTO. 
The Subcommittee continued to monitor the progress of these 
countries in negotiating their accession to the WTO. Moldova 
joined the WTO on July 26, 2001. Armenia is expected to join 
the WTO in the near future. No legislative action has been 
taken with regard to Jackson-Vanik provisions for either 
country. Russia is currently negotiating its accession to the 
WTO. On December 20, 2001, Chairman Thomas, along with 
Representatives Crane and Dreier, introduced H.R. 3553 to 
provide for the extension of permanent NTR treatment to the 
products of the Russian Federation. The Subcommittee on Trade 
held a hearing on April 11, 2002, to explore whether to 
graduate Russia from the Jackson-Vanik provisions and extend 
PNTR, and to assess U.S.-Russian trade relations.
    19. Trade Adjustment Assistance.
    Actions taken: The Subcommittee evaluated several reports 
from the GAO on the TAA programs; several of the 
recommendations from GAO were eventually adopted with enactment 
of the Trade Act of 2002. The Trade Act made significant 
changes to the existing TAA programs such as consolidating the 
TAA and NAFTA-TAA programs, extending TAA to downstream 
secondary workers, raising the training expenditure cap to $220 
million, increasing personal allowances, creating an 
alternative TAA program for older workers, creating a new TAA 
program for farmers, and providing a healthcare tax credit to 
TAA workers and participants in the Pension Benefit Guaranty 
Corporation.
    20. Generalized System of Preferences.
    Actions taken: On October 3, 2001, Trade Subcommittee 
Chairman Crane introduced H.R. 3010, a bill to amend the Trade 
Act of 1974 to extend the GSP until December 31, 2002. On 
October 5, 2001, the Committee ordered H.R. 3010 favorably 
reported. On June 26, 2002, the House concurred with the Senate 
amendment with an amendment to H.R. 3009 pursuant to H. Res. 
450, which incorporated H.R. 3010 into H.R. 3009, the Trade Act 
of 2002. The conference report was passed by the House on July 
26, 2002, and by the Senate on August 1, 2002. The conference 
report extends GSP benefits through December 31, 2006. The bill 
was signed into law on August 6, 2002 (P.L. 107-210).
    21. Asia Pacific Economic Cooperation Forum.
    Actions taken: Committee staff continued consultations with 
USTR to monitor developments in APEC, including results of the 
APEC Ministerial meeting held in Puerto Vallarta, Mexico, on 
May 30, 2002.
    22. User Fees.
    Actions taken: The Subcommittee has continued to oversee 
the collection of user fees by Customs to evaluate whether fee 
levels are appropriately set. The lack of quality cost data 
from Customs has made it difficult for the Subcommittee to 
properly oversee fees. Accordingly, the Trade Act of 2002 
include a provision mandating that Customs implement a cost 
accounting system and directing the GAO to evaluate fees to 
determine whether importers are receiving an appropriate level 
of service in return.
    23. Rules of Origin and Country of Origin Marking.
    Actions taken: The Subcommittee has continued to review and 
consult with the Administration and the trade community on the 
status of the rules of origin negotiations underway in the 
World Customs Organization (WCO). In addition, the Subcommittee 
continues to review whether U.S. law and Customs enforcement 
efforts are effective in preventing unlawful transhipment. The 
Subcommittee is also reviewing labeling requirements of U.S. 
trading partners with respect to meat, fresh produce, forged 
hand tools, forged tool and dies, and genetically modified 
products.
    24. Normal Trade Relations with the Lao People's Democratic 
Republic.
    Actions taken: The Subcommittee continued its oversight of 
bilateral relations between the United States and Laos and 
heard from several parties interested in Lao NTR. Laos does not 
currently receive NTR status because it is included in the HTS 
of the United States in General Note 3(b) on the list of 
countries whose products are subject to column 2 (non-NTR) 
tariff rates. The only action required to grant permanent NTR 
status to Laos is for Congress to enact legislation amending 
the HTS to strike Laos permanently from General Note 3(b). In 
1997, the United States and the Lao People's Democratic 
Republic concluded a bilateral commercial agreement which calls 
for a reciprocal extension of normal trade relations. That 
agreement has not yet entered into force. At a hearing on May 
8, 2001, the Committee heard testimony from USTR Zoellick 
stating that the United States should grant NTR for Laos.
    25. Drug Interdiction.
    Actions taken: The Subcommittee continued to monitor the 
actions of the U.S. Customs Service in enforcing the laws 
against illegal drug smuggling. The Subcommittee reviewed this 
topic as part of its oversight hearing on Customs on July 17, 
2001. The Trade Act of 2002, signed into law on August 6, 2002, 
included an authorization for the air and marine interdiction 
functions of Customs in addition to equipment used for 
inspectional purposes. The Trade Act also enhances Customs' 
ability to interdict illegal drug smuggling by providing it 
with new legal authority to collect cargo information and 
perform border searches.
    Subcommittee on Health--Comparison of oversight plan 
developed in January 2001 to actual activities of the 
Subcommittee during the 107th Congress.
    1. Management of the Centers for Medicare and Medicaid 
Services.
    Actions taken: The full Committee held hearings on the Bush 
Administration's health and welfare priorities on March 14, 
2001, and on the President's fiscal year 2003 budget on 
February 6, 2002. The Subcommittee held a hearing on the 
Medicare Regulatory and Contracting Reform Act on September 25, 
2001. Testimony taken at these hearings helped form the basis 
of legislation considered by the Committee which was included 
in H.R. 2768/H.R. 3391, the ``Medicare Regulatory and 
Contracting Reform Act.'' Almost all regulatory and contracting 
reform provisions from H.R. 3391 were incorporated into H.R. 
4954, the ``Medicare Modernization and Prescription Drug Act.''
    The Committee has continued its oversight and review of the 
HHS regulations and practices to ensure that HHS is not 
creating an unnecessary burden to health care beneficiaries and 
providers. On May 14, 2001, the Subcommittee Chair and Ranking 
Member wrote to the Secretary with a list of administrative 
changes to reduce regulatory burden and make Medicare more 
responsive to beneficiaries and the providers that serve them. 
The HHS responded by implementing many of these 
recommendations.
    The Committee has also exercised its oversight on the 
Secretary's implementation of the Benefit Improvement and 
Protection Act provisions. On February 12, 2002, the Committee 
and Subcommittee Chairmen along with the Ranking Members wrote 
to the Secretary asking that the Department expeditiously move 
to implement the coverage and appeals reforms required by the 
Benefit Improvement and Protection Act. On September 27, 2002, 
the Committee and Subcommittee Chairmen along with the Ranking 
Members wrote to the Secretary about how the proposed 
regulation on Medicare National Coverage Determinations 
contravenes Congressional intent.
    The Subcommittee requested and received a report related to 
CMS from the GAO on the performance of the claims review 
process.
    2. Medicare Payment Advisory Commission (MedPAC) Report and 
Recommendations.
    Actions taken: The Subcommittee heard MedPAC's testimony on 
its recommendations at the following hearings: rural health 
care in Medicare on June 12, 2001; physician payment reform 
February 28, 2002; and wage index issues on July 23, 2002. 
Testimony taken at these hearings helped form the basis of 
legislation considered by the Committee which was included in 
H.R. 4954, the ``Medicare Modernization and Prescription Drug 
Act.''
    On January 14, 2002, the Subcommittee Chairman wrote to the 
Chairman of MedPAC asking for recommendations on how to 
restructure the physician payment system to ensure greater 
predictability and stability in the physician payment updates. 
Additionally, a number of informal requests were made and 
information was provided on teaching hospitals, Medicare 
margins of various providers, technology integration, and 
geographic payment issues.
    3. Medicare+Choice Program.
    Actions taken: On Medicare+Choice lessons for reform on May 
1, 2001, and on the status of the Medicare+Choice program on 
December 4, 2001, the Subcommittee held hearings on the 
Medicare+Choice program. Testimony taken at these hearings 
helped form the basis of legislation considered by the 
Committee that was included in H.R. 4954, the ``Medicare 
Modernization and Prescription Drug Act.'' The Medicare+Choice 
provisions were included in H.R. 3391, the ``Medicare 
Regulatory and Contracting Reform Act.'' The Medicare+Choice 
provisions from H.R. 3391 were incorporated into H.R. 3448, the 
``Public Health Security and Bioterrorism Preparedness and 
Response Act of 2002'' (P.L. 107-188), but were applied for 3 
years.
    On May 24, 2001, the Subcommittee Chairman wrote to the CMS 
to ask them to move the due date for plan submission of the 
adjusted community rate. The Subcommittee requested and 
received a report from GAO on selected program requirements and 
other entities standards for health maintenance organizations 
(HMOs).
    4. Progress in the Development of Prospective Payment 
Systems.
    Actions taken: The Subcommittee held a hearing on physician 
payments on February 28, 2002, and on Medicare's geographic 
cost adjustors on July 23, 2002. Testimony taken at these 
hearings helped form the basis of legislation considered by the 
Committee which was included in H.R. 4954, the ``Medicare 
Modernization and Prescription Drug Act.''
    The Subcommittee continued its oversight and review of 
Medicare payment regulations. On February 8, 2002, the 
Committee and Subcommittee Chairmen wrote to the Secretary, and 
Director of the Office of Management and Budget asking whether 
and how Congress should address the provider payment problems 
identified by MedPAC. Moreover, the letter asked whether any of 
the money set aside in the budget for prescription drugs should 
be used for providers.
    The Subcommittee wrote to the Administration a number of 
times on implementation issues surrounding the new hospital 
outpatient prospective payment system. On July 27, 2001, the 
Committee and Subcommittee Chairmen along with the Subcommittee 
Ranking Member wrote to the Administration proposing changes to 
the payment for drugs, biologicals, and devices under the 
Medicare outpatient payment system. The CMS responded by 
adopting many of the recommendations in the letter, including 
folding 75 percent of technology costs into the base. On 
December 12, 2001, the Committee and Subcommittee Chairmen and 
Ranking Members along with the Committee on Commerce and 
Subcommittee Chairmen and Ranking Members and the Senate 
Committee on Finance Chairman and Ranking Member wrote to the 
Secretary asking to delay implementation of the 2002 outpatient 
hospital rates because of technical problems in the rates. The 
CMS responded and deferred the system for one quarter. On May 
10, 2002, the Committee and Subcommittee Chairmen along with 
the Committee on Commerce and Subcommittee Chairmen requested 
further corrections to the hospital outpatient rates for 2002. 
On October 21, 2002, the Committee and Subcommittee Chairmen 
along with the Committee on Commerce and Subcommittee Chairmen 
and the Senate Committee on Finance Ranking Member wrote to the 
Administrator asking for improvements in 2003 rates 
specifically to improve the accuracy of the rates and to 
ameliorate any redistributions in payments from 2002 to 2003.
    On other payment issues, the Subcommittee Chairman wrote to 
the Administrator on the following issues: changes to the 
proposed fee schedule for ambulance services on April 8, 2002, 
and on the proposed design of the implementation of the Benefit 
Improvement and Protection Act provisions on inpatient 
technology on August 14, 2001. Finally, the Committee and 
Subcommittee Chairmen wrote to the Administrator of CMS on 
actions that the agency could take to fix the sustainable 
growth rate for physician payment on March 21, 2002.
    5. Health Care Quality.
    Actions taken: The Subcommittee held a hearing on health 
quality and medical errors on March 7, 2002, and on legislation 
to reduce medical errors on September 10, 2002. Testimony taken 
at these hearings helped form the basis of legislation 
considered by the Committee that was included in H.R. 4889, the 
``Patient Safety and Improvement Act of 2002.''
    The Subcommittee requested and received a report from GAO 
on the current supply of nurses.
    6. Administrative Simplification under the Health Insurance 
Portability and Accountability Act (HIPAA) of 1996.
    Actions taken: Testimony from previous hearings helped form 
the basis of legislation that was included in H.R. 3323, the 
``Administrative Simplification Compliance Act'' (P.L. 107-
105).
    The Subcommittee continued its oversight of the regulations 
related to HIPAA. On May 9, 2001, the Committee and 
Subcommittee Chairmen sent a letter to the President on the 
final rule on patient confidentiality. The Committee expressed 
its concern with the patient consent requirements, the 
standards for minimum necessary use and disclosure of 
information, coverage of oral communications, and advisory 
opinions for conflicting State standards. On December 10, 2001, 
the Committee Chairman wrote to the Secretary about the 
confidentiality of individually identifiable health information 
in regards to supplementalinsurance policies. On February 26, 
2002, the Committee and Subcommittee Chairmen wrote to the OMB and the 
Secretary on the proposed changes to the medical records 
confidentiality rule. On April 19, 2002, the Committee Chairman wrote 
to the Secretary about HIPAA's portability requirements. On April 26, 
2002, the Committee Chairman and Subcommittee Chairmen commended the 
Secretary for accepting its suggestions on a number of HIPAA changes 
such as elimination of the mandatory consent requirements. The 
Committee expressed additional concerns regarding the confidentiality 
of medical records on patient consent, minimum necessary, the 
definition of identifiable data for medical research, and the business 
associate contract requirements.
    The Subcommittee requested and received a report from GAO 
on the issues around the HIPAA standardization of the coding 
sets used for payment and diagnosis of illness.
    7. Medicare Waste, Fraud and Abuse.
    Actions taken: Testimony from previous hearings helped form 
the basis of legislation considered by the Committee that was 
included in H.R. 4954, the ``Medicare Modernization and 
Prescription Drug Act.'' The provision on a demonstration for 
recovery auditors permits the Secretary to hire these entities, 
identify under and overpayments, and provide incentives to 
collect overpayments.
    On October 3, 2002, the Subcommittee held a hearing on 
Medicare payment for currently covered drugs. Medicare does not 
cover most outpatient prescription drugs. However, it does 
cover certain categories of outpatient prescription drugs, 
including drugs used in dialysis, organ transplantation, cancer 
treatment, and certain drugs used with durable medical 
equipment, such as infusion pumps and nebulizers. According to 
GAO, about 450 outpatient drugs are covered under these 
categories.
    The Balanced Budget Act of 1997 (P.L. 105-33) specified 
that Medicare payment for covered outpatient prescription drugs 
would equal 95 percent of the average wholesale price (AWP) for 
the drug. The AWPs, however, are not defined by law or 
regulation. The AWPs are reported by drug manufacturers to 
organizations that publish the data in compendia. Medicare 
carriers use the published data in calculating payment for 
Medicare covered drugs, but AWPs are not grounded in any real 
market transaction, and do not reflect the actual price paid by 
purchasers. The AWP for a product is often far greater than the 
acquisition cost paid by suppliers and physicians, resulting in 
taxpayer and beneficiary overpayments estimated at more than $1 
billion annually. In addition, AWPs do not reflect the 
discounts, rebates, or ``charge backs'' that manufacturers and 
wholesalers customarily offer to providers. Therefore, AWPs 
represent neither average prices nor prices charged by 
wholesalers.
    The hearing examined the current Medicare overpayments. 
Potential solutions discussed included H.R. 5167, the 
``Medicare Market Acquisition Drug Price Act,'' introduced by 
Subcommittee Ranking Member Pete Stark, and proposed changes to 
the statute to introduce competitive bidding for Part B covered 
drugs.
    As part of its oversight responsibilities, the Committee 
Chairman and Ranking Members wrote to GAO asking to be kept 
apprised of the recent inquiry into personnel and other changes 
affecting the Office of the Inspector General.
    8. Medically Uninsured.
    Actions taken: The full Committee held a hearing on health 
care tax credits to decrease the number of uninsured on 
February 13, 2002, and the Subcommittee held a hearing on the 
Nation's uninsured on April 4, 2001. Testimony taken at these 
hearings helped form the basis of legislation considered by the 
Committee that was included in H.R. 3009 (P.L. 107-210), the 
``Trade Act of 2002.''
    On October 21, 2002, the Committee Chairman wrote to the 
Secretary of Labor to clarify Congressional intent related to 
the health tax credit for workers adversely affected by Trade.
    9. Benefits.
    Actions taken: The full Committee held hearings on the 
Social Security and Medicare Trustees 2001 Annual Reports 
(joint hearing with the Senate Committee on Finance) on March 
20, 2001, on Medicare solvency on March 20, 2001, on the 
Administration's Principles to strengthen and modernize 
Medicare on July 19, 2001, and on integrating prescription 
drugs into Medicare on April 17, 2002. The Subcommittee held 
hearings on Medicare reform on February 28, 2001, on laying the 
groundwork for a Rx drug benefit on March 27, 2001, on 
strengthening Medicare: modernizing beneficiary cost sharing on 
May 9, 2001, on Medicare supplemental insurance on March 14, 
2002, and on Medicare payments for currently covered 
prescription drugs on October 3, 2002. Testimony taken at these 
hearings helped form the basis of legislation considered by the 
Committee that was included in H.R. 4954, the ``Medicare 
Modernization and Prescription Drug Act.''
    10. Managed Care Reform.
    Actions taken: The Subcommittee held a hearing on patient 
protections and managed care reform on April 24, 2001. 
Testimony taken at that hearing helped form the basis of H.R. 
2563, the ``Patient Protection Act,'' which passed the House on 
August 2, 2001.
    Subcommittee on Human Resources--Comparison of oversight 
plan developed in February 2001 to actual activities of the 
Subcommittee during the 107th Congress:
    1. Temporary Assistance for Needy Families/Welfare Reform.
    Actions taken: To prepare for reauthorization of the 1996 
welfare reform law which implemented the TANF program, the 
Subcommittee held a series of hearings. At a March 15, 2001, 
Subcommittee hearing to review research on the effects of the 
Personal Responsibility and Work Opportunity Reconciliation Act 
of 1996, witnesses from the GAO, the Congressional Research 
Service, and research organizations testified. An April 3, 
2001, hearing focused on efforts to require work in exchange 
for benefits, and the effects of current programs promoting 
work. The hearing included testimony from program 
administrators, the Congressional Research Service, scholars, 
and program participants. On April 26, 2001, a hearing with 
witnesses from the GAO, program administrators, and scholars 
was held to examine ``rainy day'' and other special funding 
issues under the TANF program. A May 22, 2001, hearing on 
welfare and marriage issues reviewed how States have used TANF 
funds to promote marriage and family formation and additional 
approaches or programmatic changes that may hold promise for 
better promoting healthy marriages and discouraging 
illegitimacy. Witnesses included State legislators, State 
program administrators, non-profit organizations, and research 
experts.
    During a July 11, 2001, hearing on Subcommittee-related 
proposals in the Administration's fiscal year 2002 budget, 
testimony was received from a representative of HHS. Teen 
pregnancy prevention efforts since enactment of the 1996 
welfare reform law and recommendations for further program 
improvements to prevent and reduce teen pregnancy were the 
focus of a November 15, 2001, Subcommittee hearing. The HHS, 
teen pregnancy prevention and abstinence education 
organizations, and researchers testified.
    On March 7, 2002, the Subcommittee heard testimony from the 
GAO, State and local program administrators, program 
participants, and policy experts on issues related to the 
implementation of welfare work requirements and time limits. At 
a field hearing in University Center, Michigan, on April 2, 
2002, to review welfare reform outcomes in Michigan, witnesses 
included the Governor of Michigan, former recipients, 
employers, and caseworkers who have been instrumental in the 
success of the State's program in terms of reducing poverty, 
ending dependence, and promoting work.
    An April 11, 2002, hearing on welfare reform 
reauthorization proposals provided an opportunity for public 
witnesses to present their views to the Subcommittee. The 
Subcommittee received testimony from 44 individuals, including 
Members of Congress, the Secretary of HHS, representatives of 
the nation's governors, State legislators, and State welfare 
directors, local program operators, policy specialists, 
advocacy organizations, former welfare recipients, and non-
profit organizations.
    Legislation to reauthorize TANF was introduced by 
Subcommittee Chairman Herger on April 9, 2002, as the Personal 
Responsibility, Work, and Family Promotion Act of 2002 (H.R. 
4090). At a Subcommittee on Human Resources markup on April 18, 
2002, H.R. 4090 was reported to the full Committee, from which 
it was reported to the House on May 14, 2002. On May 16, 2002, 
the House approved H.R. 4737, the Personal Responsibility, 
Work, and Family Promotion Act of 2002. H.R. 4737 included the 
text of H.R. 4090 as reported by the Committee on Ways and 
Means. The legislation was considered by the Senate Committee 
on Finance on July 25, 2002 and reported to the full Senate. No 
further action was taken on H.R. 4737 during the remainder of 
the 107th Congress.
    H.J. Res. 111 (P.L. 107-229), legislation making continuing 
appropriations for the fiscal year 2003, extended authorization 
for TANF and related welfare programs through December 31, 
2002. H.J. Res. 124 (P.L. 107-294), making further continuing 
appropriations, maintained TANF and related programs in current 
form through March 31, 2003.
    2. Child Care.
    Actions taken: The Subcommittee received testimony on 
issues concerning the availability and supply of child care for 
families on or leaving TANF, and State spending on child care 
programs. The testimony included witnesses from Congressional 
and other research organizations at the March 15, 2001, hearing 
on the effects of the 1996 welfare reform law. Testimony was 
also received on this topic at the April 26, 2001, hearing on 
``Rainy Day'' and other special TANF funding issues, and the 
March 7, 2002, hearing on implementation of welfare reform work 
requirements and time limits. A number of witnesses at the 
April 11, 2002, hearing on welfare reform reauthorization 
proposals provided the Subcommittee recommendations on child 
care funding and related issues.
    Title II of H.R. 4737, the Personal Responsibility, Work, 
and Family Promotion Act of 2002, which passed in the House on 
May 16, 2002, increased mandatory child care funding by $1 
billion over 5 years. Other provisions in H.R. 4090 as approved 
by the Committee on Ways and Means and H.R. 4737 as approved by 
the House provided States added flexibility in using welfare 
funds for child care needs.
    3. Child Support Enforcement.
    Actions taken: On June 28, 2001, the Subcommittee held a 
hearing on the child support program and fatherhood proposals. 
Witnesses, including Members of Congress, State program 
administrators, policy experts, advocates, and program 
participants, reviewed the program as well as proposals for 
improving child support collection and distribution and options 
for fatherhood programs.
    Title IV of H.R. 4737, the Personal Responsibility, Work, 
and Family Promotion Act of 2002, which passed in the House on 
May 16, 2002, made improvements to the child supportprogram. 
Section 119 of that legislation included the Promotion and Support of 
Responsible Fatherhood and Healthy Marriage Act of 2002.
    4. Supplemental Security Income.
    Actions taken: At a July 25, 2002, hearing on fraud and 
abuse in the Supplemental Security Income (SSI) Program, the 
Subcommittee heard from representatives of the SSA, the SSA's 
Office of Inspector General, the Social Security Advisory 
Board, and disability advocates.
    Title VI of H.R. 4737, the Personal Responsibility, Work, 
and Family Promotion Act of 2002, which passed in the House on 
May 16, 2002, and Title I of H.R. 4070, the Social Security 
Protection Act of 2002, which passed in the House on June 26, 
2002, amended the Social Security Act to improve the SSI 
program. No further action was taken on H.R. 4737 or H.R. 4070 
during the remainder of the 107th Congress.
    5. Child Protection.
    Actions taken: The Subcommittee held a hearing on May 10, 
2001, on the Promoting Safe and Stable Families Program to 
explore how States have used Promoting Safe and Stable Families 
program funds, to learn which programs are more effective, and 
to review program reauthorization issues. Witnesses included 
State and local program administrators, policy experts, and 
program participants.
    At a Subcommittee on Human Resources markup on September 
25, 2001, H.R. 2873, the Promoting Safe and Stable Families 
Amendments of 2001, was amended and reported to the full 
Committee. The full Committee considered and reported the 
Subcommittee-reported bill, as amended, on October 31, 2001. 
The House approved H.R. 2873 by voice vote on November 13, 
2001, and the legislation passed the Senate by unanimous 
consent on December 13, 2001. H.R. 2873 was signed by the 
President on January 17, 2002 (P.L. 107-133).
    6. Unemployment Compensation.
    Actions taken: On March 5, 2002, the Subcommittee held a 
hearing on the unemployment compensation system and on 
proposals in the Administration's fiscal year 2003 budget to 
reform the administrative financing of the Nation's 
Unemployment Compensation and Employment Security programs. 
Testimony was heard from the U.S. Department of Labor, State 
program administrators, small and large employers, and 
organized labor. A June 11, 2002, unemployment compensation 
program hearing focused on waste, fraud, and abuse with regard 
to unemployment compensation benefits and a review of measures 
that would better ensure program integrity. At this hearing, 
witnesses included representatives from the U.S. Department of 
Labor and the GAO, the Inspector General of the U.S. Department 
of Labor, State program administrators, researchers, and 
private sector technical specialists.
    The Committee acted on a number of initiatives to stimulate 
the economy and provide additional assistance to unemployed 
workers: H.R. 3090, first introduced as the Economic Security 
and Recovery Act of 2001, passed in the House on October 24, 
2001. Title IV of this version of H.R. 3090 provided States 
with additional resources to address increased unemployment. In 
addition, Title V increased Social Services Block Grant funding 
to provide health care assistance for the unemployed. H.R. 
3529, the Economic Security and Worker Assistance Act of 2001, 
which was introduced by Chairman Thomas on December 19, 2001, 
and was approved by the House on December 20, 2001, contained a 
version of the Temporary Extended Unemployment Compensation Act 
of 2002 that was later amended (P.L. 107-147). H.R. 622, the 
Economic Security and Worker Assistance Act of 2002, which 
passed in the House on February 14, 2002, included as Title VI 
the Temporary Extended Unemployment Compensation Act of 2002 
(P.L. 107-147.) Finally, Title II of H.R. 3090, as amended and 
renamed the Job Creation and Worker Assistance Act of 2002, 
which passed in the House on March 7, 2002 (P.L. 107-147), 
included the final version of the Temporary Extended 
Unemployment Compensation Act of 2002. This legislation also 
included provisions from H.R. 3841, the Displaced Worker 
Assistance Act of 2002, which Chairman Thomas introduced on 
March 5, 2002.
    H.R. 5063, the Armed Forces Tax Fairness Act of 2002, was 
amended and passed in the House November 14, 2002, to extend 
certain provisions of the temporary extended unemployment 
program begun under P.L. 107-147 until February 1, 2003. No 
further action was taken on H.R. 5063 during the remainder of 
the 107th Congress.
    Subcommittee on Social Security--Comparison of oversight 
plan developed in January 2001 to actual activities of the 
Subcommittee during the 107th Congress:
    1. Hearings to examine Social Security Trust Fund issues.
    Actions taken: On June 18, 2001, the Subcommittee held a 
field hearing in Columbia, Missouri, to discuss Americans' 
views on the future of Social Security. An expert with the 
American Academy of Actuaries presented information on Social 
Security's financial challenges and options for strengthening 
the program. Members of the public in attendance took a quiz on 
the Social Security program, debated in groups, and presented 
their thoughts on strengthening Social Security's finances.
    On July 31, 2001, the Subcommittee held a hearing on the 
experiences of other countries that utilized personal accounts 
in their public pension reforms. Experts on the pension systems 
of the United Kingdom, Australia, Sweden, Chile, and the United 
States presented testimony.
    On February 28, 2002, and March 6, 2002, the Subcommittee 
held a 2-day hearing on Social Security improvements for women, 
seniors, and working Americans. On the first day of the 
hearing, the Subcommittee heard testimony from the Commissioner 
of Social Security, Social Security experts, and 
representatives of organizations that promote issues of 
importance to women and seniors. Witnesses offered 
recommendations for changes to the law that would address 
inequities in the Social Security program and help lift retired 
women out of poverty. On the second day of the hearing, the 
Subcommittee heard testimony from Members of the House of 
Representatives. Witnesses discussed Social Security's 
importance to seniors, particularly women and minorities, and 
the need to assure seniors and near retirees that their 
benefits are secure while addressing Social Security's long-
term financial challenges.
    2. Hearings to examine use of the Social Security number.
    Actions taken: On May 22, 2001, the Subcommittee held a 
hearing on protecting the privacy of SSNs and preventing their 
misuse. The Subcommittee heard testimony from the SSA's 
Inspector General, local government officials and law 
enforcement, experts in privacy issues, representatives from 
industries that would be affected if SSN use were limited, and 
victims of identity theft. Witnesses discussed the growing use 
and misuse of the SSN in the public and private sectors, 
proposals for combating SSN misuse and protecting privacy, and 
the impact of such proposals on businesses, government, and 
consumers.
    In response to information gathered at this hearing and 
previous hearings in the 106th Congress, Subcommittee Chairman 
Shaw introduced H.R. 2036, the ``Social Security Number Privacy 
and Identity Theft Prevention Act of 2001.'' The bill would 
have restricted the sale, purchase, and display of SSNs, 
limited dissemination of SSNs by credit reporting agencies, and 
made it more difficult for businesses to deny services if a 
customer refused to provide his or her Social Security number. 
Neither the House nor the Senate acted on the bill.
    On November 8, 2001, the Subcommittee held a joint hearing 
with the Committee on Financial Services, Subcommittee on 
Oversight and Investigations, on prevention of identity theft 
by terrorists and criminals. Testimony was heard from the U.S. 
Department of Commerce, the SSA, the SSA's Inspector General, 
and GAO, who presented their findings, as requested by the 
Subcommittees, regarding the process for gathering death 
information and reporting it to financial institutions. 
Testimony was also heard from representatives of industries 
that rely heavily on SSN use, privacy experts, and a State law 
enforcement official. Witnesses discussed proposals for 
improving the accuracy and distribution of the Death Master 
File, which is maintained and distributed by the SSA and 
contains the SSNs and other identifying information of deceased 
individuals.
    On April 29, 2002, the Subcommittee held a field hearing in 
Lake Worth, Florida, on protecting the privacy of Social 
Security numbers and preventing their misuse. Testimony was 
heard from the GAO, who discussed (1) the extent and nature of 
government agencies' use of SSNs as they administer programs to 
provide benefits and services and the actions government 
agencies take to safeguard these SSNs from improper disclosure; 
and (2) the extent and nature of governments' use of SSNs when 
they are contained in public records and the options available 
to better safeguard SSNs traditionally found in these public 
records, as requested by Subcommittee Chairman Shaw. Testimony 
was also heard from Florida law enforcement officials, the 
SSA's Office of the Inspector General, and victims of identity 
theft. Witnesses discussed the financial and emotional costs of 
identity theft; the challenges law enforcement agencies face as 
they pursue identity thieves; the use of SSNs by government 
agencies at the Federal, State, and local levels; and proposals 
aimed at combating SSN misuse and protecting privacy.
    On September 19, 2002, the Subcommittee held a joint 
hearing with the Committee on Judiciary, Subcommittee on 
Immigration, Border Security, and Claims, on preserving the 
integrity of SSNs and preventing their misuse by terrorists and 
identity thieves. Testimony was heard from the Deputy 
Commissioner of Social Security, Federal law enforcement 
agencies, a privacy expert, and a small-business owner. 
Witnesses discussed the role SSNs play in identity theft and 
Federal agency coordination and cooperation, including data 
sharing, to verify identification documents and to detect and 
prevent fraud. Witnesses also discussed the need to improve the 
integrity of the SSA's enumeration and wage crediting process 
and recommended legislative proposals aimed at combating SSN 
misuse and protecting privacy.
    3. Hearings to examine Social Security disability programs.
    Actions taken: On February 28, 2001, the Subcommittee held 
a hearing to assess the SSA's proposed regulation to implement 
the Ticket to Work and Self-Sufficiency program. Witnesses 
included two members of the Ticket to Work and Work Incentives 
Advisory Panel, consumer advocates, and program experts, who 
provided their perspectives on the SSAs proposed regulations.
    On June 28, 2001, the Subcommittee began a hearing series 
on the challenges and opportunities facing Social Security's 
disability programs. Witnesses included the Chairman of the 
Social Security Advisory Board and representatives from the 
SSA's employee organizations involved in the disability 
determination process. Recommendations focused on ways to 
decrease processing times at all levels of disability claims 
adjudication.
    The second hearing in the series was a two-part hearing 
held on June 11 and June 20, 2002, examining the disability 
determination and appeals process. During part one of the 
hearing, the Subcommittee heard from the GAO (whose testimony 
was based on work requested by the Subcommittee), the Social 
Security Advisory Board, a disability researcher,and agency 
employee organizations. Part two focused on the appeals process. The 
Subcommittee heard testimony from disability advocates, representatives 
from the National Organization of Social Security Claimants' 
Representatives, the American Bar Association and the Federal Bar 
Association, professors of law, and employee organizations from the 
SSA. During both parts of the hearing, witnesses provided their 
perspectives regarding the reasons for delays, complexities, and 
inconsistencies, and offered recommendations for change.
    The third hearing in the series, held on July 11, 2002, 
examined how the Agency determines disability as defined in the 
statute and the degree to which the definition of disability in 
law addresses the needs of today's workers, beneficiaries, and 
the intent of the Social Security Disability Insurance and 
Supplemental Security Income programs. Testimony was heard from 
the SSA, the Ticket to Work and Work Incentives Advisory Panel, 
the GAO, a disability advocate, disability researchers, 
disability experts and a professor of law.
    The fourth hearing in the series was held on September 26, 
2002, during which the Subcommittee examined progress in 
implementing the Ticket to Work and Work Incentives Improvement 
Act, including preliminary results, issues of concern, and 
needed improvements. Testimony was heard from the SSA, the 
Ticket to Work and Work Incentives Advisory Panel, disability 
advocates and researchers, the Program Manager--Maximus, 
representatives from State Vocational Rehabilitation agencies, 
employment networks and a ticket holder.
    4. Hearings to examine the SSA's stewardship of Social 
Security programs.
    Actions taken: On May 10, 2001, the Subcommittee held a 
hearing to examine the SSA's efforts to prevent payment of 
benefits to those individuals who are ineligible to receive 
them and to prevent misuse of benefits by representative 
payees. Testimony was heard from the SSA, the SSA's Office of 
the Inspector General, a disability advocate, an organizational 
representative payee, and law enforcement officials.
    5. Hearings to examine the SSA's service delivery.
    Actions taken: On May 17, 2001, the Subcommittee held a 
hearing on the SSA's processing of attorney fees. The hearing 
focused on the GAO's study and findings from their report, the 
adequacy of attorney fee processing, and recommendations for 
change to the attorney fee process. Testimony was heard from 
the SSA, the GAO, the National Organization of Social Security 
Claimants' Representatives, and the Consortium for Citizens 
with Disabilities. In response to information gathered at this 
hearing and previous hearings in the 106th Congress, 
Subcommittee Chairman Shaw introduced H.R. 3332, the ``Attorney 
Fee Payment System Improvement Act of 2001,'' which would have 
increased the maximum allowable cap on attorney fees to $5,200, 
extended withholding of attorney fee payments to SSI claims, 
and capped the 6.3 percent assessment on an attorney's approved 
fee at $100 in both Social Security and SSI claims. Modified 
provisions from this bill were incorporated into H.R. 4070, the 
``Social Security Program Protection Act,'' which passed the 
House, as amended, on June 26, 2002, under suspension of the 
rules by a vote of 425 to 0. The bill was referred to the 
Senate on June 27, 2002. On November 18, 2002, the Senate 
passed the legislation, as amended, by unanimous consent. No 
further action was taken on the bill.
    On November 1, 2001, the Subcommittee held a hearing on how 
the SSA served the victims and families of the September 11 
terrorist attacks, how their operations were impacted, and how 
the Agency assisted with Federal investigations of the attacks. 
Testimony was heard from Representative Sue Kelly, the Acting 
Commissioner of Social Security, Social Security Regional 
Commissioners from New York and Pennsylvania, and the Inspector 
General. Subcommittee Members heard how the Agency was able to 
quickly and effectively support the victims and their families 
during this crisis and how the Office of the Inspector General 
assisted in the investigation of the identities of terrorists.
    On May 2, 2002, the Subcommittee held a hearing on the 
challenges facing the new Commissioner of Social Security. 
Testimony was heard from the Commissioner of Social Security, 
the Inspector General, and representatives from the GAO (whose 
testimony was based on a number of reports requested by the 
Subcommittee), Social Security Advisory Board, AARP, Consortium 
for Citizens with Disabilities, and the National Committee to 
Preserve Social Security and Medicare.
    In addition, Subcommittee Chairman Shaw has requested or 
has received the following studies from the GAO: SSN use in the 
private sector and how SSN use benefits or harms the public; 
the extent to which SSNs of deceased individuals are being used 
fraudulently; the efficacy of continuing disability reviews and 
implications for the Ticket-to-Work program; uses of the SSN 
authorized or mandated under current Federal law and extent to 
which the public's access to public records containing SSNs 
facilitates identity fraud and theft; the SSA's verification of 
SSNs for government agencies; the SSA's files on earnings that 
cannot be matched to a worker (earnings suspense file); the 
SSA's policies on disclosure to law enforcement agencies; the 
SSA's current and future human capital needs and recruitment 
efforts; the SSA's enumeration procedures; and the extent to 
which individuals are transferring to other jobs to avoid the 
Government Pension Offset.

 C. Additional Oversight Activities and Any Recommendation or Actions 
                                 Taken


      1. ADDITIONAL OVERSIGHT ACTIVITIES OF THE TRADE SUBCOMMITTEE

    In addition to the oversight activities detailed above with 
respect to the Committee'soversight plan, the Committee 
convened the Congressional Oversight Group established under the Trade 
Act of 2002 (P.L. 107-210), co-chaired by the Chairmen of the Committee 
on Ways and Means and Senate Committee on Finance. The COG is comprised 
of the Chairman and Ranking Member of those Committees of the House and 
Senate which would have jurisdiction over provisions of law affected by 
trade agreement negotiations during this Congress. The purpose of the 
COG is to provide the President and the USTR with advice regarding the 
formulation of specific objectives, negotiating strategies and 
positions, the development of trade agreements, and compliance and 
enforcement of negotiated commitments under trade agreements.
    The Committee continued its oversight over U.S. 
international tax law, particularly in light of the WTO 
Appellate Body's report finding that the United States' ETI 
rules are a prohibited export subsidy. The Committee's 
activities on this issue are discussed in the Europe section of 
this report.
    The Committee continued its oversight of the QIZ initiative 
under the U.S.-Israel Free Trade Agreement to support the peace 
process in the Middle East by encouraging economic integration 
with Israel. The Committee included in the Miscellaneous Trade 
and Technical Corrections Act of 2002 (H.R. 5385) legislation 
to expand the QIZ program to allow Israel-Turkey QIZs to help 
Turkey attract foreign direct investment, diversify its exports 
away from dependence on textiles, boost trade, and increase 
employment opportunities. The bill was approved by the 
Committee on September 18, 2002, and by the House approved on 
October 7, 2002. The Senate took no action on the legislation.
    The Committee conducted oversight over the NTR status of 
Yugoslavia (Serbia and Montenegro), which was withdrawn by 
Congress in 1992 because Serbia and Montenegro were not 
complying with the provisions of the Final Act of the 
Conference on Security and Cooperation in Europe. The Committee 
included in the Miscellaneous Trade and Technical Corrections 
Act of 2002 (H.R. 5385) legislation to give the President the 
authority to proclaim NTR status to Yugoslavia notwithstanding 
the 1992 law. This legislation was approved by the Committee on 
September 18, 2002, and by the House on October 7, 2002. 
However, the Senate took no action on this legislation.
    In the aftermath of September 11, the Committee expanded 
its oversight of the Customs Service to include consideration 
of a new U.S. Department of Homeland Security. On June 26, 
2002, the Committee held a hearing on the President's proposal 
to create a U.S. Department of Homeland Security including the 
transfer of all assets and authority of the U.S. Customs 
Service to the new Department and on H.R. 5005, ``The Homeland 
Security Act of 2002.'' On the basis of this hearing, the 
Committee ordered favorably reported recommendations for 
legislative changes to H.R. 5005, the ``Homeland Security Act 
of 2002,'' with amendment, and this language was incorporated 
into a final bill passed by the House on July 31, 2002. No 
further action was taken on this bill in the 107th Congress. On 
November 13, 2002, the House Select Committee on Homeland 
Security reported H.R. 5710 as a substitute to H.R. 5005, with 
minor changes in the Customs section, and the House passed the 
bill on November 13, 2002. Following Senate passage on November 
19, the President signed the bill into law on November 25, 
2002.
    On March 8, 2002, Subcommittee Chairman Crane requested 
written comments from parties interested in miscellaneous trade 
proposals, technical corrections to the trade laws, and 
temporary suspensions on certain imports. Based on this public 
comment, the Committee reported out H.R. 5385, the 
``Miscellaneous Trade and Technical Corrections Act of 2002.'' 
On October 7, 2002, the bill was agreed to by the House under 
suspension of the rules by voice vote. The Senate took no 
action on the legislation.
    The Committee also considered provisions of the Agriculture 
Act of 2002 within its jurisdiction, concerning raw cotton 
import quotas, the dairy marketing fee assessment on imports, 
the reallocation of the sugar quota, and certain provisions of 
the Animal Health Protection Act and the Bear Protection Act. 
The House passed the conference report to this legislation on 
May 2, 2002, containing provisions within the Committee's 
jurisdiction as modified to the Committee's satisfaction. The 
Senate passed the conference report on May 8, 2002, and it was 
signed into law on May 13, 2002 (P.L. 107-171).
    The Committee continued its oversight over trade in 
conflict diamonds, which are diamonds that generally come from 
mines controlled by rebel forces and are traded for arms to 
fuel civil war in Africa. The Trade Subcommittee held a hearing 
on October 10, 2001, on the importation of conflict diamonds in 
order to obtain viewpoints from the Administration, the 
industry, non-governmental organizations, and other interested 
parties for possible solutions. On August 2, 2001, 
Representative Houghton introduced H.R. 2722, the Clean 
Diamonds Trade Act, to restrict the importation of diamonds 
from countries with inadequate controls against the trade of 
conflict diamonds. Based upon information gathered at the 
hearing, Chairman Thomas brought H.R. 2722, as amended, to the 
Floor under suspension of the rules on November 28, 2001. H.R. 
2722 as amended would provide the President with the authority 
to evaluate control measures used by countries to prevent the 
trade of conflict diamonds. The President would also have the 
authority to ban diamond imports that were found to be from 
countries with inadequate control measures. H.R. 2722 passed 
the House by a vote of 408 to 6. The Senate took no action on 
this legislation.
    The Committee continued its oversight of the U.S.-Israel 
Free Trade Agreement, particularly concerning agriculture, and 
obtained a letter from the Israeli Government concerning its 
compliance with agriculture obligations.
    Finally, the Committee requested and received a study of 
the domestic tool and die manufacturing industry under section 
332(g) of the Tariff Act of 1930.

    2. ADDITIONAL OVERSIGHT ACTIVITIES OF THE OVERSIGHT SUBCOMMITTEE

    1. Renewal Communities.
    Actions taken: The Subcommittee held a hearing on Renewal 
Communities on May 21, 2002. Renewal Communities were created 
in December 2000 (P.L. 106-554), as part of the ``Community 
Renewal Tax Relief Act of 2000,'' which was later incorporated 
into the ``Consolidated Appropriations Act, 2001.'' This 
legislation allows the U.S. Department of Housing and Urban 
Development to select up to 40 Renewal Communities, 12 of which 
must be rural, that are nominated by States and local 
governments. The designated communities are eligible for a 
variety of tax incentives available between 2002 and 2009. The 
hearing focused on how the newly designated Renewal Communities 
planned to use available incentives to attract business 
investment to their communities. On October 7, 2002, the House 
passed additional Renewal Community legislation, H.R. 3100. 
This bill allows for the expansion of areas designated as 
Renewal Communities based on 2000 census data.
    2. Unrelated Business Income Tax.
    Actions taken: On June 24, 2002, the Subcommittee requested 
written comments on H.R. 2237, a bill to amend the Internal 
Revenue Code of 1986 to provide that the conducting of certain 
games of chance shall not be treated as an unrelated trade or 
business. The Internal Revenue Code requires tax-exempt 
organizations to pay tax at corporate rates on income derived 
from an unrelated trade or business. In general, an unrelated 
trade or business is any trade or business that is not 
substantially related to the tax-exempt purpose that is the 
basis for the exemption from Federal income tax. Activities in 
which substantially all of the work is performed by volunteers 
are not, however, considered to be unrelated trade or business.
    3. Charitable Organizations' Response to the Recent Terror 
Attacks.
    Actions taken: The Subcommittee held a hearing on November 
8, 2001, to review the response of charitable organizations to 
the terrorist attacks on September 11, 2001. The hearing 
focused on the charitable solicitations, funds raised and 
distributed to those in need, and the organizations' short- and 
long-term plans for the future. The IRS discussed its role in 
the oversight of charities, relevant tax law requirements, and 
the expedited approval process of September 11 charities. 
Throughout the remainder of the 107th Congress, the 
Subcommittee received briefings from charitable organizations 
on their activities.
    4. Internal Revenue Code Section 511(c)(3) Requirements for 
Religious Organizations.
    Actions taken: The Subcommittee held a hearing on May 14, 
2002, to review whether churches receiving tax-exempt status 
under section 501(c)(3) of the Code, should be allowed to 
retain that preferred status, including the deductibility of 
contributions, while engaging in political activity. The 
hearing focused on two bills, H.R. 2931, the Bright Line Act of 
2001, and H.R. 2357, the Houses of Worship Political Speech 
Protection Act. The House failed to pass H.R. 2357 on October 
2, 2002.
    5. Deceptive Mailing Concerning Tax Refunds.
    Actions taken: The Subcommittee held a hearing on July 19, 
2001, to raise consumer awareness about a deceptive mailing 
being sent to individuals that was designed to look like an IRS 
mailing. The Economic Growth and Tax Relief Reconciliation Act 
of 2001 (P.L. 107-16) directed the U.S. Department of the 
Treasury to send checks to most taxpayers beginning in the 
summer of 2001 as an advance payment to reflect the new 10-
percent tax bracket. However, there were reports of 
unscrupulous entities hoping to take advantage of taxpayers who 
wanted further details about their eligibility for the advance 
tax payment. Taxpayers in at least 5 States received postcards 
designated as ``2001 Form 16-B,'' resembling an official IRS 
tax form, and bearing the designation, ``Revenue Resource 
Center,'' a ``Non-Partisan Bureaucratic Agency.'' The postcard 
offered to send information on the amount of the recipient's 
tax refund check in exchange for $14.95. The postcard, which 
could be easily confused with official IRS correspondence 
because of its use of certain terms, typeface, and a quotation, 
attributed to President Bush, that requested money ``in order 
to identify the amount of the tax credit you are scheduled to 
receive.'' The IRS and Postal Inspection Service outlined steps 
they were taking to stop this fraud and publicize legitimate 
information about the advance tax payment. Individuals were 
later arrested and convicted for participating in the scheme.
    6. Modeling Economic Effects of Changes in Tax Policy.
    Actions taken: The Subcommittee held a hearing on May 7, 
2002, to review the economic models and assumptions that are 
used for the current tax revenue estimating process, and 
explore ways to improve overall forecasting and analysis 
regarding legislation before the Committee on Ways and Means 
and Congress. At the hearing, Lindy Paull, the Chief of Staff 
of the JCT, discussed the recent efforts of JCT economists to 
estimate the macroeconomic feedback efforts of major tax 
proposals. The JCT described its plan to create a Blue Ribbon 
Panel of economists to evaluate dynamic scoring, and, 
currently, is finalizing a report that summarizes the work of 
the Panel.
    7. Low-Income Taxpayer Clinics.
    Actions taken: On July 12, 2001, the Subcommittee held a 
hearing on the Annual Report of the National Taxpayer Advocate 
and Low-Income Taxpayer Clinics. The hearing focused on the 
funding and functioning of the low-income taxpayer clinic 
program, specifically the need for additional funding for this 
program. The IRS Restructuring andReform Act of 1998 
established a program to grant up to $6 million to low-income taxpayer 
clinics for the purpose of helping low-income taxpayers to resolve tax 
disputes. This program arose from a proposal developed in 1997 by the 
National Commission on Restructuring the IRS. A low-income clinic can 
be granted up to $100,000 per year, and the funds must be matched by 
private money. The Taxpayer Relief and IRS Accountability Act of 2002 
(H.R. 3991) contained a provision for increasing the total amount of 
funds for low-income taxpayer clinic grants from $6 million to $15 
million in 3 years. H.R. 586, which included this provision of H.R. 
3991, passed the House on April 18, 2002. In addition, the provision 
for low-income taxpayer clinic grants increase was included in H.R. 
5728, the Tax Administration Reform Act of 2002, which passed the House 
on November 15, 2002.

 3. ADDITIONAL OVERSIGHT ACTIVITIES OF THE HUMAN RESOURCES SUBCOMMITTEE

    In addition to the Subcommittee's oversight activities on 
welfare reform and other legislative issues described above, on 
June 14, 2001, the Subcommittee conducted a joint hearing with 
the Subcommittee on Select Revenue Measures to review H.R. 7, 
the Community Solutions Act of 2001. Subcommittee Members were 
particularly interested in testimony related to ``charitable 
choice,'' a term that refers to changes made under welfare 
reform and subsequent laws designed to permit more involvement 
by churches, synagogues, mosques, and others in the faith-based 
community in the delivery of social services to needy families. 
Witnesses included Members of Congress, policy specialists, 
representatives from faith-based programs, program operators, 
State program administrators, religious organizations, and 
organized labor.
    On July 11, 2001, H.R. 7 was amended and approved by the 
Committee on Ways and Means. The House approved H.R. 7 by a 
vote of 223 to 198 on July 19, 2001. The bill was referred to 
the Senate Committee on Finance, where it was considered and 
amended on June 13 and June 18, 2002. The measure was reported 
to the full Senate for action on July 16, 2002. No further 
action was taken on H.R. 7 during the remainder of the 107th 
Congress.

     4. ADDITIONAL OVERSIGHT ACTIVITIES OF THE HEALTH SUBCOMMITTEE

    In addition to the activities detailed above, the 
Subcommittee on Health continued its investigations into 
several matters of importance to the Medicare program. Among 
these was a hearing on promoting disease management in 
Medicare, held on April 16, 2002. Testimony taken at these 
hearings helped form the basis of legislation considered by the 
Committee which was included in H.R. 4954, the ``Medicare 
Modernization and Prescription Drug Act.''

 5. ADDITIONAL OVERSIGHT ACTIVITIES OF THE SOCIAL SECURITY SUBCOMMITTEE

    In addition to the hearings detailed above, the 
Subcommittee on Social Security held a hearing on July 26, 
2001, on misleading mailings targeted to seniors. Testimony was 
heard from the Inspector General, a representative of the 
Arkansas Office of the Attorney General, and a fraud victim. 
Subpoenaed witnesses included current and former employees or 
associates of The Retired Enlisted Association (TREA) Senior 
Citizens League, an independent affiliate of (TREA). Testimony 
included the experiences of victims and related investigation 
findings.

      Appendix I. Jurisdiction of the Committee on Ways and Means


                          A. U.S. Constitution

    Article I, section 7, of the Constitution of the United 
States provides as follows:
    All Bills for raising Revenue shall originate in the House 
of Representatives; but the Senate may propose or concur with 
Amendments as on other Bills.
    In addition, Article I, Section 8, Constitution of the 
United States provides the following:

        The Congress shall have Power To lay and collect Taxes, 
        Duties, Imposts and Excises, to pay the Debts and * * * 
        To borrow Money on the credit of the United States.

       B. Rule X, Clause 1, Rules of the House of Representatives

    Rule X, clause 1(s), of the Rules of the House of 
Representatives, in effect during the 107th Congress, provides 
for the jurisdiction of the Committee on Ways and Means, as 
follows:

    (s) Committee on Ways and Means.
          (1) Customs, collection districts, and ports of entry 
        and delivery.
          (2) Reciprocal trade agreements.
          (3) Revenue measures generally.
          (4) Revenue measures relating to insular possessions.
          (5) The bonded debt of the United States, subject to 
        the last sentence of clause 4(f). [The last sentence of 
        clause 4(f) requires the Committee on Ways and Means to 
        include in its annual report to the Committee on the 
        Budget a specific recommendation, made after holding 
        public hearings, as to the appropriate level of the 
        public debt that should be set forth in the concurrent 
        resolution on the budget and serve as the basis for an 
        increase or decrease in the statutory limit on such 
        debt.]
          (6) Deposit of public monies.
          (7) Transportation of dutiable goods.
          (8) Tax exempt foundations and charitable trusts.
          (9) National Social Security (except health care and 
        facilities programs that are supported from general 
        revenues as opposed to payroll deductions and except 
        work incentive programs).

            C. Brief Description of Committee's Jurisdiction

    The foregoing recitation of the provisions of House Rule X, 
clause 1, paragraph (s), does not convey the comprehensive 
nature of the jurisdiction of the Committee on Ways and Means. 
The following summary provides a more complete description:
    (1) Federal revenue measures generally.--The Committee on 
Ways and Means has the responsibility for raising the revenue 
required to finance the Federal Government. This includes 
individual and corporate income taxes, excise taxes, estate 
taxes, gift taxes, and other miscellaneous taxes.
    (2) The bonded debt of the United States.--The Committee on 
Ways and Means has jurisdiction over the authority of the 
Federal Government to borrow money. Title 31 of Chapter 31 of 
the U.S. Code authorizes the Secretary of the Treasury to 
conduct any necessary public borrowing subject to a maximum 
limit on the amount of borrowing outstanding at any one time. 
This statutory limit on the amount of public debt (``the debt 
ceiling'') currently is $6.4 trillion. The Committee's 
jurisdiction also includes conditions under which the U.S. 
Department of the Treasury manages the Federal debt, such as 
restrictions on the conditions under which certain debt 
instruments are sold.
    (3) National Social Security programs.--The Committee on 
Ways and Means has jurisdiction over most of the programs 
authorized by the Social Security Act, which includes not only 
those programs that are normally referred to colloquially as 
``Social Security'' but also social insurance programs and a 
whole series of grant-in-aid programs to State governments for 
a variety of purposes. The Social Security Act, as amended, 
contains 20 titles (a few of which have either expired or have 
been repealed). The principal programs established by the 
Social Security Act and under the jurisdiction of the Committee 
on Ways and Means in the 107th Congress can be outlined as 
follows:
          (a) Old-age, survivors, and disability insurance 
        (Title II)--At present, there are approximately 153 
        million workers in employment covered by the program, 
        and for calendar year 2001, $432 billion in benefits 
        were paid to 46 million individuals.
          (b) Medicare (Title XVIII)--Provides hospital 
        insurance benefits to 34 million persons over the age 
        of 65 and to 5.7 million disabled persons. Voluntary 
        supplementary medical insurance is provided to 32.7 
        million aged persons and 5.0 million disabled persons. 
        Total program outlays under these programs were $240.9 
        billion in 2001.
          (c) Supplemental security income (SSI) (Title XVI)--
        The SSI program was inaugurated in January 1974 under 
        the provisions of P.L. 92-603, as amended. It replaced 
        the former Federal-State programs for the needy aged, 
        blind, and disabled. On average in calendar year 2001, 
        6.4 million individuals received Federal SSI benefits 
        on a monthly basis. Of these 6.4 million persons, 
        approximately 1.2 million received benefits on the 
        basis of age, and 5.2 million on the basis of blindness 
        or disability. Federal expenditures for cash SSI 
        payments in 2001 totaled $30.5 billion, while State 
        expenditures for federally administered SSI supplements 
        totaled $3.5 billion.
          (d) Temporary Assistance for Needy Families (TANF) 
        (part A of Title IV)--The TANF program is a block grant 
        of about $16.5 billion dollars awarded to States to 
        provide income assistance to poor families, to end 
        dependency on welfare benefits, to prevent nonmarital 
        births, and to encourage marriage, among other 
        purposes. The TANF also includes incentive funds for 
        States that achieve overall program goals and 
        additional incentive funds for States that are 
        successful in reducing nonmarital births. In most 
        cases, Federal TANF benefits for individuals are 
        limited to 5 years and individuals must work to 
        maintain their eligibility. In June 2002, about 2 
        million families and 5 million individuals received 
        benefits from the TANF program.
          (e) Child support enforcement (part D of Title IV)--
        In fiscal year 2001 Federal administrative expenditures 
        totaled $3.5 billion for the child support enforcement 
        program. Child support collections for that year 
        totaled $18.9 billion.
          (f) Child welfare, foster care, and adoption 
        assistance (parts B and E of Title IV)--Titles IV B and 
        E provide funds to States for child welfare services 
        for abused and neglected children; foster care for 
        children who meet Aid to Families with Dependent 
        Children eligibility criteria; and adoption assistance 
        for children with special needs. In fiscal year 2002, 
        Federal expenditures for child welfare services totaled 
        $667 million. Federal expenditures for foster care and 
        adoption assistance were approximately $6.6 billion.
          (g) Unemployment compensation programs (Titles III, 
        IX, and XII)--These titles authorize the Federal-State 
        unemployment compensation program and the permanent 
        extended benefits program. In the first three quarters 
        of fiscal year 2002, an estimated $31.5 billion was 
        paid in unemployment compensation benefits, with 
        approximately 8.1 million workers receiving 
        unemployment benefits.
          (h) Social services (Title XX)--Title XX authorizes 
        the Federal Government to reimburse the States for 
        money spent to provide persons with various services. 
        Generally, the specific services provided are 
        determined by each State. The statutory ceiling on 
        Federal matching funds available to the States for 
        fiscal year 2002 was $2.4 billion and $1.7 billion was 
        appropriated for fiscal year 2002. These funds are 
        allocated on the basis of population.
    (4) Trade and tariff legislation.--The Committee on Ways 
and Means has responsibility over legislation relating to 
tariffs, import trade, and trade negotiations. In the early 
days of the Republic, tariff and customs receipts were major 
sources of revenue for the Federal Government. As the Committee 
with jurisdiction over revenue-raising measures, the Committee 
on Ways and Means thus evolved as the primary Committee 
responsible for international trade policy.
    The Constitution vests the power to levy tariffs and to 
regulate international commerce specifically in the Congress as 
one of its enumerated powers. Any authority to regulate imports 
or to negotiate trade agreements must therefore be delegated to 
the executive branch through legislative action. Statutes 
including the Reciprocal Trade Agreements Acts beginning in 
1934, Trade Expansion Act of 1962, Trade Act of 1974, Trade 
Agreements Act of 1979, Trade and Tariff Act of 1984, Omnibus 
Trade and Competitiveness Act of 1988, North American Free 
Trade Agreement Implementation Act, Uruguay Round Agreements 
Act, and Trade Act of 2002 provide the basis for U.S. 
bargaining with other countries to achieve the mutual reduction 
of tariff and nontariff trade barriers under reciprocal trade 
agreements.
    The Committee's jurisdiction includes the following 
authorities and programs:
          (a) The tariff schedules and all tariff preference 
        programs, such as the GSP and the CBI;
          (b) Laws dealing with unfair trade practices, 
        including the antidumping law, countervailing duty law, 
        section 301, and section 337;
          (c) Other laws dealing with import trade, including 
        section 201 (escape clause), section 232 national 
        security controls, section 22 agricultural 
        restrictions, international commodity agreements, 
        textile restrictions under section 204, and any other 
        restrictions or sanctions affecting imports;
          (d) General and specific trade negotiating authority, 
        as well as implementing authority for trade agreements 
        and the grant of normal-trade-relations (NTR) status;
          (e) General and NAFTA-related TAA programs for 
        workers, and TAA for firms;
          (f) Customs administration and enforcement, including 
        rules of origin and country-of origin marking, customs 
        classification, customs valuation, customs user fees, 
        and U.S. participation in the World Customs 
        Organization (WCO);
          (g) Authorization of the budget for the ITC, the U.S. 
        Customs Service, and the Office of the U.S. Trade 
        Representative (USTR).

   D. Revenue Originating Prerogative of the House of Representatives

    The Constitutional Convention debated adopting the British 
model in which the House of Lords could not amend revenue 
legislation sent to it from the House of Commons. Eventually, 
however, the Convention proposed and the States later ratified 
the Constitution providing that ``All bills for raising revenue 
shall originate in the House of Representatives, but the Senate 
may propose or concur with amendments as on other bills.'' 
(Article 1, Section 7, clause 1.)
    In order to pass constitutional scrutiny under this 
``origination clause,'' a tax bill must be passed first by the 
House of Representatives. After the House has completed action 
on a bill and approved it by a majority vote, the bill is 
transmitted to the Senate for formal action. The Senate may 
have already reviewed issues raised by the bill before its 
transmission. For example, the Senate Committee on Finance 
frequently holds hearings on tax legislative proposals before 
the legislation embodying those proposals is transmitted from 
the House of Representatives. On occasion, the Senate will 
consider a revenue bill in the form of a Senate or ``S.'' bill, 
and then await passage of a revenue ``H.R.'' bill from the 
House. The Senate then will add or substitute provisions of the 
``S.'' bill as an amendment to the ``H.R.'' bill and send the 
``H.R.'' bill back to the House of Representatives for its 
concurrence or for conference on the differing provisions.

   E. The House's Exercise of Its Constitutional Prerogative: ``Blue-
                               Slipping''

    When a Senate bill or amendment to a House bill infringes 
on the constitutional prerogative of the House to originate 
revenue measures, that infringement may be raised in the House 
as a matter of privilege. That privilege has also been asserted 
on a Senate amendment to a House amendment to a Senate bill 
(see 96th Congress, 1st Session, November 8, 1979, 
Congressional Record p. H10425).
    Note that the House in its sole discretion may determine 
that legislation passed by the Senate infringes on its 
prerogative to originate revenue legislation. In the absence of 
such determination by the House, the Federal courts are 
occasionally asked to rule a certain revenue measure to be 
unconstitutional as not having originated in the House (see 
U.S. v. Munoz-Flores, 495 U.S. 385 (1990).
    Senate bills or amendments to nonrevenue bills infringe on 
the House's prerogative even if they do not raise or reduce 
revenue. Such infringements are referred to as ``revenue 
affecting.'' Thus, any import ban which could result in lost 
customs tariffs must originate in the House (100th Congress, 
1st Session, July 30, 1987 100th Congress, 2d Session, June 16, 
1988, Congressional Record p. H4356).
    Offending bills and amendments are returned to the Senate 
through the passage in the House of a House Resolution which 
states that the Senate provision: ``in the opinion of the 
House, contravenes the first clause of the seventh section of 
the first article of the Constitution of the United States and 
is an infringement of the privilege of the House and that such 
bill be respectfully returned to the Senate with a message 
communicating this resolution'' (e.g., 100th Congress, 1st 
Session, July 30, 1987, Congressional Record p. H6808) This 
practice is referred to as ``blue slipping'' because the 
resolution returning the offending bill to the Senate is 
printed on blue paper.
    In other cases, the Committee of the Whole House has passed 
a similar or identical House bill in lieu of a Senate bill or 
amendment (e.g., 91st Congress, 2d Congress, May 11, 1970, 
Congressional Record pp. H14951-14960). The Committee on Ways 
and Means has also reported bills to the House which were 
approved and sent to the Senate in lieu of Senate bills (e.g., 
93d Congress, 1st Session, November 6, 1973, Congressional 
Record pp. 36006-36008). In other cases, the Senate has 
substituted a House bill or delayed action on its own 
legislation to await a proper revenue affecting bill or 
amendment from the House (see 95th Congress, 2d Session, 
September 22, 1978, Congressional Record p. H30960; January 22, 
1980, Congressional Record p. S107).
    Any Member may offer a resolution seeking to invoke Article 
I, Section 7. However, the determination that a bill violates 
the Origination Clause has been traditionally made by Members 
of the Committee on Ways and Means, and the resolution has been 
offered by the Chairman or another Member of the Committee on 
Ways and Means. Because Article I, Section 7 involves the 
privileges of the House, a blue-slip resolution offered by the 
Chairman or other Members of the Committee on Ways and Means 
has been typically adopted by voice vote on the House Floor. 
There have been instances where the House has agreed to not 
deal directly with the issue by tabling a resolution.\1,\ \2\
---------------------------------------------------------------------------
    \1\ In cases where the Chairman of the Committee on Ways and Means 
did not believe that the bill in question violated the Origination 
Clause or the objection had been dealt with in another manner, 
resolutions offered by other Members of the House have been tabled. 
[See adoption of motion by Representative Rostenkowski to table H. Res. 
571, 97-2, p. 22127.]
    \2\ This was an instance where the Chairman of the Committee on 
Ways and Means raised a question of the privilege of the House pursuant 
to Article I, Section 7, of the U.S. Constitution on H.R. 4516, 
Legislative Branch Appropriations. The motion was laid on the table.

       BLUE SLIP RESOLUTIONS--98TH CONGRESS THROUGH 107TH CONGRESS
                           CHRONOLOGICAL LIST
[Resolutions passed by the House returning to the Senate bills passed in
  violation of the origination clause of the United States Constitution
                   (Clause 1, Section 7 of Article 1)]
------------------------------------------------------------------------
                                           Description of Senate action
  H. Res., sponsor, and date of House     (and related House action, if
                passage                                any)
------------------------------------------------------------------------
107th Congress:
    H. Res. 240, Mr. Thomas, September   On September 13, 2001, the
     20, 2001.                            Senate passed H.R. 2500,
                                          ``Making appropriations for
                                          the U.S. Departments of
                                          Commerce, Justice, and State,
                                          the Judiciary, and related
                                          agencies for the fiscal year
                                          ending September 30, 2002, and
                                          for other purposes'' with an
                                          amendment. Contained in this
                                          legislation was a provision
                                          banning the importation of
                                          diamonds not certified as
                                          originating outside conflict
                                          zones. The proposed change in
                                          the import laws constituted a
                                          revenue measure in the
                                          constitutional sense, because
                                          it would have had a direct
                                          impact on customs revenues.
106th Congress:
    H. Res. 645, Mr. Crane, October 24,  On October 17, 2000, the Senate
     2000.                                passed S. 1109, the Bear
                                          Protection Act of 1999. This
                                          legislation would have
                                          conserved global bear
                                          populations by prohibiting the
                                          importation, exportation, and
                                          interstate trade of bear
                                          viscera and items, products,
                                          or substances containing, or
                                          labeled or advertised as
                                          containing, bear viscera. The
                                          proposed change in the import
                                          laws constituted a revenue
                                          measure in the constitutional
                                          sense, because it would have
                                          had a direct impact on customs
                                          revenues.
    H. Res. 394, Mr. Weller, November    On November 3, 1999, the Senate
     18, 1999.                            passed S. 1232, Federal
                                          Erroneous Retirement Coverage
                                          Corrections Act. This
                                          legislation would have
                                          provided that no Federal
                                          retirement plan involved in
                                          the corrections under the bill
                                          would fail to be treated as a
                                          tax-qualified retirement plan
                                          by reason of the correction,
                                          and that any fund transfers or
                                          government contributions
                                          resulting from the corrections
                                          would have no impact on the
                                          tax liability of individuals.
                                          These changes constituted a
                                          revenue measure in the
                                          constitutional sense because
                                          they would have had a direct
                                          impact on Federal revenues.
    H. Res. 393, Mr. Weller, November    On February 24, 1999, the
     18, 1999.                            Senate passed S. 4, the
                                          Soldiers', Sailors', Airmen's,
                                          and Marines' Bill of Rights
                                          Act of 1999. The legislation
                                          would have allowed members of
                                          the Armed Forces to
                                          participate in the Federal
                                          Thrift Savings Program and to
                                          avoid the tax consequences
                                          that would otherwise have
                                          resulted from certain
                                          contributions in excess of the
                                          limitations imposed in the
                                          Internal Revenue Code. This
                                          proposed exemption therefore
                                          constituted a revenue measure
                                          in the constitutional sense
                                          because it would have had a
                                          direct impact on Federal
                                          revenues.
    H. Res. 249, Mr. Portman, July 16,   On May 20, 1999, the Senate
     1999.                                passed S. 254, the Violent and
                                          Repeat Juvenile Offender
                                          Accountability and
                                          Rehabilitation Act of 1999.
                                          The legislation would have had
                                          the effect of banning the
                                          import of large capacity
                                          ammunition feeding devices.
                                          The proposed change in the
                                          import laws constituted a
                                          revenue measure in the
                                          constitutional sense, because
                                          it would have had a direct
                                          impact on customs revenues.
105th Congress:
    H. Res. 601, Mr. Crane, October 15,  On October 8, 1998, the Senate
     1998.                                passed S. 361, the Tiger and
                                          Rhinoceros Conservation Act of
                                          1998. This legislation would
                                          have had the effect of
                                          creating a new basis and
                                          mechanism for applying import
                                          restrictions for products
                                          intended for human consumption
                                          or application containing (or
                                          labeled as containing) any
                                          substance derived from tigers
                                          or rhinoceroses. The proposed
                                          change in the import laws
                                          constituted a revenue measure
                                          in the constitutional sense,
                                          because it would have had a
                                          direct impact on customs
                                          revenues.
    H. Res. 379, Mr. Ensign, March 5,    On April 15, 1997, the Senate
     1998.                                passed S. 104, the Nuclear
                                          Waste Policy Act of 1997. This
                                          legislation would have
                                          repealed a revenue provision
                                          and replaced it with a user
                                          fee. The revenue provision in
                                          question was a fee of 1 mill
                                          per kilowatt hour of
                                          electricity generated by
                                          nuclear power imposed by the
                                          Nuclear Waste Policy Act of
                                          1982. The proposed user fee in
                                          the legislation would have
                                          been limited to the amount
                                          appropriated for nuclear waste
                                          disposal. The original fee was
                                          uncapped, and, in fact,
                                          because the fees collected
                                          exceeded the associated costs,
                                          it was being used as revenue
                                          to finance the Federal
                                          government generally. Its
                                          proposed repeal therefore
                                          constituted a revenue measure
                                          in the constitutional sense
                                          because it would have had a
                                          direct impact on Federal
                                          revenues.
104th Congress:
    H. Res. 554, Mr. Crane, September    On June 30, 1996, the Senate
     28, 1996.                            passed H.R. 400, the Anaktuvuk
                                          Pass Land Exchange and
                                          Wilderness Redesignation Act
                                          of 1995, with an amendment.
                                          Section 204(a) of the Senate
                                          amendment would have
                                          overridden existing tax law by
                                          expanding the definition of
                                          actions not subject to
                                          Federal, State, or local
                                          taxation under the Alaska
                                          Native Claims Settlement Act.
                                          These changes constituted a
                                          revenue measure in the
                                          constitutional sense because
                                          they would have had a direct
                                          impact on Federal revenues.
    H. Res. 545, Mr. Archer, September   On September 25, 1996, the
     27, 1996.                            Senate passed S. 1311, the
                                          National Physical Fitness and
                                          Sports Foundation
                                          Establishment Act. Section 2
                                          of the bill would have waived
                                          the application of certain
                                          rules governing recognition of
                                          tax-exempt status for the
                                          foundation established under
                                          this legislation. This
                                          exemption constituted a
                                          revenue measure in the
                                          constitutional sense because
                                          it would have had a direct
                                          impact on Federal revenues.
    H. Res. 402, Mr. Shaw, April 16,     On January 26, 1996, the Senate
     1996.                                passed S. 1463, to amend the
                                          Trade Act of 1974. The bill
                                          would have changed the
                                          authority and procedure for
                                          investigations by the ITC for
                                          certain domestic agricultural
                                          products. Such investigations
                                          are a predicate necessary for
                                          achieving access to desired
                                          trade remedies that the
                                          President may order, such as
                                          tariff adjustments, tariff-
                                          rate quotas, quantitative
                                          restrictions, or negotiation
                                          of trade agreements to limit
                                          imports. By creating a new
                                          basis and mechanism for import
                                          restrictions under authority
                                          granted to the President, the
                                          bill constituted a revenue
                                          measure in the constitutional
                                          sense because it would have
                                          had a direct impact on customs
                                          revenues.
    H. Res. 387, Mr. Crane, March 21,    On February 1, 1996, the Senate
     1996.                                passed S. 1518, repealing the
                                          Tea Importation Act of 1897.
                                          Under existing law in 1996, it
                                          was unlawful to import
                                          substandard tea, except as
                                          provided in the HTS. Changing
                                          import restrictions
                                          constituted a revenue measure
                                          in the constitutional sense
                                          because it would have had a
                                          direct impact on customs
                                          revenues.
103d Congress:
    H. Res. 577, Mr. Gibbons, October    On October 3, 1994, the Senate
     7, 1994.                             passed S. 1216, the Crow
                                          Boundary Settlement Act of
                                          1994. The bill would have
                                          overridden existing tax law by
                                          exempting certain payments and
                                          benefits from taxation. These
                                          exemptions constituted a
                                          revenue measure in the
                                          constitutional sense because
                                          they would have had a direct
                                          impact on Federal revenues.
    H. Res. 518, Mr. Gibbons, August     On July 20, 1994, the Senate
     12, 1994.                            passed H.R. 4554, the
                                          Agriculture and Rural
                                          Development Appropriation for
                                          fiscal year 1995, with
                                          amendments. Senate amendment
                                          83 would have provided
                                          authority for the Food and
                                          Drug Administration to collect
                                          fees to cover the costs of
                                          regulation of products under
                                          their jurisdiction. However,
                                          these fees were not limited to
                                          covering the cost of specified
                                          regulatory activities, and
                                          would have been charged to a
                                          broad cross-section of the
                                          public (rather than been
                                          limited to those who would
                                          have benefitted from the
                                          regulatory activities) to fund
                                          the cost of the FDA's
                                          activities generally. These
                                          fees constituted a revenue
                                          measure in the constitutional
                                          sense because they were not
                                          based on a direct relationship
                                          between their level and the
                                          cost of the particular
                                          government activity for which
                                          they would have been assessed,
                                          and would have had a direct
                                          impact on Federal revenues.
    H. Res. 487, Mr. Gibbons, July 21,   On May 25, 1994, the Senate
     1994.                                passed S. 1030, the Veterans
                                          Health Programs Improvement
                                          Act of 1994. A provision in
                                          the bill would have exempted
                                          from taxation certain payments
                                          made on behalf of participants
                                          in the Education Debt
                                          Reduction Program. This
                                          provision constituted a
                                          revenue measure in the
                                          constitutional sense because
                                          it would have had a direct
                                          impact on Federal revenues.
    H. Res. 486, Mr. Gibbons, July 21,   On May 29, 1994, the Senate
     1994.                                passed S. 729, to amend the
                                          Toxic Substances Control Act.
                                          Title I of the bill included
                                          several provisions to prohibit
                                          the importation of specific
                                          categories of products which
                                          contained more than specified
                                          quantities of lead. By
                                          establishing these import
                                          restrictions, the bill
                                          constituted a revenue measure
                                          in the constitutional sense
                                          because it would have had a
                                          direct impact on customs
                                          revenues.
    H. Res. 479, Mr. Rangel, July 14,    On June 22, 1994, the Senate
     1994.                                passed H.R. 4539, the
                                          Treasury, Postal Service, and
                                          General Government
                                          Appropriation for fiscal year
                                          1995, with amendments. Senate
                                          amendment 104 would have
                                          prohibited the Treasury from
                                          using appropriations to
                                          enforce the Internal Revenue
                                          Code requirement for the use
                                          of undyed diesel fuel in
                                          recreational motorboats. This
                                          prohibition therefore
                                          constituted a revenue measure
                                          in the constitutional sense
                                          because it would have had a
                                          direct impact on Federal
                                          revenues.
102d Congress:
    H. Res. 373, Mr. Rostenkowski,       On August 1, 1991, the Senate
     February 25, 1992.                   passed S. 884 amended, the
                                          Driftnet Moratorium
                                          Enforcement Act of 1991; This
                                          legislation would require the
                                          President to impose economic
                                          sanctions against countries
                                          that fail to eliminate large-
                                          scale driftnet fishing.
                                          Foremost among the sanction
                                          provisions are those which
                                          impose a ban on certain
                                          imports into the United States
                                          from countries which continue
                                          to engage in driftnet fishing
                                          on the high seas after a
                                          certain date. These changes in
                                          our tariff laws constitute a
                                          revenue measure in the
                                          constitutional sense, because
                                          they would have a direct
                                          effect on customs revenues.
    H. Res. 267, Mr. Rostenkowski,       On February 20, 1991, the
     October 31, 1991.                    Senate passed S. 320, to
                                          reauthorize the Export
                                          Administration Act of 1979.
                                          This legislation contains
                                          several provisions which
                                          impose, or authorize the
                                          imposition of, a ban on
                                          imports into the United
                                          States. Among the provisions
                                          containing import sanctions
                                          are those relating to certain
                                          practices by Iraq, the
                                          proliferation and use of
                                          chemical and biological
                                          weapons, and the transfer of
                                          missile technology. These
                                          changes in our tariff laws
                                          constitute a revenue measure
                                          in the constitutional sense,
                                          because they would have a
                                          direct effect on customs
                                          revenues.
    H. Res. 251, Mr. Russo, October 22,  On July 11, 1991, the Senate
     1991.                                passed S. 1241, the Violent
                                          Crime Act of 1991. This
                                          legislation contains several
                                          amendments to the Internal
                                          Revenue Code. Section 812(f)
                                          provides that the police corps
                                          scholarships established under
                                          the bill would not be included
                                          in gross income for tax
                                          purposes. In addition,
                                          sections 1228, 1231, and 1232
                                          each make amendments to the
                                          Tax Code with respect to
                                          violations of certain firearms
                                          provisions. Finally, Title Vll
                                          amends section 922 of Title
                                          VIII of the U.S. Code, making
                                          it illegal to transfer, import
                                          or possess assault weapons.
                                          These changes in our tariff
                                          and tax laws constitute
                                          revenue measures in the
                                          constitutional sense, because
                                          they would have an immediate
                                          impact on revenues anticipated
                                          by U.S. Customs and the
                                          Internal Revenue Services.
101st Congress:
    H. Res. 287, Mr. Cardin, November    On August 4, 1989, the Senate
     9, 1989.                             passed S. 686, the Oil
                                          Pollution Liability and
                                          Compensation Act of 1989. This
                                          legislation contained a
                                          provision which would have
                                          allowed a credit against the
                                          oil spill liability tax for
                                          amounts transferred from the
                                          Trans-Alaska Pipeline Trust
                                          Fund to the Oil Spill
                                          Liability Trust Fund.
    H. Res. 177, Mr. Rostenkowski, June  On Apr. 19, 1989, the Senate
     15, 1989.                            passed S. 774, the Financial
                                          Institution Reform, Recovery
                                          and Enforcement Act of 1989.
                                          This legislation would create
                                          two corporations to administer
                                          the financial assistance under
                                          the bill: the Resolution Trust
                                          Corporation and the Resolution
                                          Financing Corporation. S. 774
                                          would have conferred tax-
                                          exempt status to these two
                                          corporations. Without these
                                          two tax provisions, these two
                                          corporations would be taxable
                                          entities under the Federal
                                          income tax.
100th Congress:
    H. Res. 235, Mr. Rostenkowski, July  On Mar. 30, 1987, the Senate
     30, 1987.                            passed S. 829, legislation
                                          which would authorize
                                          appropriations for the ITC,
                                          the U.S. Customs Service, and
                                          the Office of the U.S. Trade
                                          Representative for fiscal year
                                          1988, and for other purposes.
                                          In addition, the bill
                                          contained a provision relating
                                          to imports from the Soviet
                                          Union which amends provisions
                                          of the Tariff Act of 1930.
    H. Res. 474, Mr. Rostenkowski, June  On 0ct. 6, 1987, the Senate
     16, 1988 (see also H.R. 3391).       passed S. 1748, legislation
                                          which would prohibit the
                                          importation into the United
                                          States of all products from
                                          Iran. (The House passed H.R.
                                          3391, which included similar
                                          provisions, on 0ct. 6, 1987.)
    H. Res. 479, Mr. Rostenkowski, June  On May 13, 1987, the Senate
     21, 1988 (see also H.R. 2792 and     passed S. 727, legislation
     H.R. 4333).                          which would clarify Indian
                                          treaties and Executive orders
                                          with respect to fishing
                                          rights. This legislation dealt
                                          with the tax treatment of
                                          income derived from the
                                          exercise of Indian treaty
                                          fishing rights. (The House
                                          passed H.R. 2792, which
                                          included similar provisions,
                                          on June 20, 1988, under
                                          suspension of the rules and
                                          was enacted into law as part
                                          of P.L. 100-647, H.R. 4333.)
    H. Res. 544, Mr. Rostenkowski,       On Sept. 9, 1988, the Senate
     September 23, 1988 (see also H.R.    passed S. 2662, the Textile
     1154).                               and Apparel Trade Act of 1988.
                                          This legislation would impose
                                          global import quotas on
                                          textiles and footwear
                                          products.
    H. Res. 552, Mr. Rostenkowski,       On Sept. 9, 1988, the Senate
     September 28, 1988.                  passed S. 2763, the Genocide
                                          Act of 1988. This legislation
                                          contained a ban on the
                                          importation of all oil and oil
                                          products from Iraq.
    H. Res. 603, Mr. Rostenkowski,       On Mar. 30, 1988, the Senate
     October 21, 1988.                    passed S. 2097, the Uranium
                                          Mill Tailings Remedial Action
                                          Amendments of 1987. This
                                          legislation would establish a
                                          Federal fund to assist in the
                                          financing of reclamation and
                                          other remedial action at
                                          currently active uranium and
                                          thorium processing sites and
                                          would increase the demand for
                                          domestic uranium. The fund
                                          would be financed in part by
                                          what are called ``mandatory
                                          fees'' which are equal to $22
                                          per kilogram for uranium
                                          contained in fuel assemblies
                                          initially loaded into civilian
                                          nuclear power reactors during
                                          calendar years 1989-1993. In
                                          addition, S. 2097 would impose
                                          charges on domestic utilities
                                          that use foreign-source
                                          uranium in new fuel assemblies
                                          loaded in their nuclear
                                          reactors.
    H. Res. 604, Mr. Rostenkowski,       On Aug. 8, 1988, the Senate
     October 21, 1988.                    passed H.R. 1315, legislation
                                          which would authorize
                                          appropriations for the Nuclear
                                          Regulatory Commission for
                                          fiscal years 1988 and 1989.
                                          Title IV of the legislation
                                          would, among other things,
                                          establish a Federal fund to
                                          assist in the financing of
                                          reclamation and other remedial
                                          action at currently active
                                          uranium and thorium processing
                                          sites and would assist the
                                          domestic uranium industry by
                                          increasing the demand for
                                          domestic uranium. The fund
                                          would be financed in part by
                                          what are called ``mandatory
                                          fees'' equal to $72 per
                                          kilogram of uranium contained
                                          in fuel assemblies initially
                                          loaded into civilian nuclear
                                          power reactors on or after
                                          Jan. 1, 1988. These fees would
                                          be paid by licensees of
                                          civilian nuclear power
                                          reactors and would be in place
                                          until $1 billion had been
                                          raised.
99th Congress:
    H. Res. 283, Mr. Rostenkowski,       On Sept. 26, 1985, the Senate
     October 1, 1985.                     passed S. 1712, legislation
                                          which would extend the 16-
                                          cents-per-pack cigarette
                                          excise tax rate for 45 days,
                                          through Nov. 14, 1985. (The
                                          House passed H.R. 3452, which
                                          included a similar extension,
                                          on Sept. 30, 1985.)
    H. Res. 562, Mr. Rostenkowski,       The Senate passed S. 638,
     September 25, 1986.                  legislation to provide for the
                                          sale of Conrail to the Norfolk
                                          Southern Railroad. The
                                          legislation contained numerous
                                          provisions relating to the tax
                                          treatment of the sale of
                                          Conrail.
98th Congress:
    H. Res. 195, Mr. Rostenkowski, June  On Apr. 21, 1983, the Senate
     17, 1983.                            passed S. 144, a bill to
                                          insure the continued expansion
                                          of international market
                                          opportunities in trade, trade
                                          in services and investment for
                                          the United States, and for
                                          other purposes.
------------------------------------------------------------------------

  F. Prerogative Under the Rules of the House Over ``Revenue Measures 
                              Generally''

    In the House of Representatives, tax legislation is 
initiated by the Committee on Ways and Means. The Committee's 
exclusive prerogative to report revenue measures generally'' is 
provided by Rule X(1)(s) of the Rules of the House of 
Representatives. The jurisdiction of the Committee on Ways and 
Means under Rule X(1)(s) is protected through theexercise of 
Rule XXI(5)(a) which states:

          A bill or joint resolution carrying a tax or tariff 
        measure may not be reported by a committee not having 
        jurisdiction to report tax or tariff measures, and an 
        amendment in the House or proposed by the Senate 
        carrying a tax or tariff measure shall not be in order 
        during the consideration of a bill or joint resolution 
        reported by a committee not having that jurisdiction. A 
        point of order against a tax or tariff measure in such 
        a bill, joint resolution, or amendment thereto may be 
        raised at any time during pendency of that measure for 
        amendment.

    Based on the precedents of the House, especially those 
involving Rule XXI(5)(a), the following statements can be made 
concerning points of order made under the rule.
    1. Timeliness.--The point of order can be raised at any 
point during consideration of the bill. However, that section 
of the bill in which the ``tax or tariff'' provision lies must 
either have been previously read or currently open for 
amendment. A point of order may not be raised after the 
Committee of the Whole has risen and reported the bill to the 
House. A point of order against an amendment must be made prior 
to its adoption.
    2. Effect.--If a point of order is sustained, the effect is 
that the provision in the bill or amendment is automatically 
deleted.
    3. Substance over form.--A provision need not involve an 
amendment to the Internal Revenue Code or the Harmonized Tariff 
Schedule in order to be determined to be a ``tax or tariff'' 
provision.
    4. Revenue decreases and increases.--A provision need not 
raise revenue in order to be found to be a ``tax or tariff 
measure.'' Provisions which would have the effect of decreasing 
revenues are also covered by the rule. Similarly, provisions 
which could have a revenue effect have been determined to be 
covered by the rule.
    The following is a detailed listing of each of the 
occasions on which points of order relating to the rule have 
been sustained:

      G. Points of Order--House Rule XXI, Clause 5, Paragraph (A) 
                           Chronological List


September 8, 1999

            H.R. 2684, U.S. Departments of Veterans Affairs and Housing 
                    and Urban Development Appropriations For 2000
    A point of order was raised against an amendment offered by 
Representative Edwards, which would have offset an increase in 
funding for veterans' health care by postponing the 
implementation of a capital gains tax cut. The chair ruled that 
the amendment constituted legislation in violation of Rule XXI, 
clause 2(c), and, in addition, constituted a tax measure in 
violation of Rule XXI, clause 5(a). The point of order was 
sustained, and the amendment ruled not in order. [106-1, p. 
H7923]

September 3, 1997

            H.R. 2159, Foreign Operations Appropriations for Fiscal 
                    Year 1998
    A point of order was raised against section 539 of the 
bill, which would have restricted the President's ability to 
issue an executive order lifting import sanctions against 
Yugoslavia (Serbia). The Chair ruled that since current law 
allowed the President to waive the application of certain 
sanctions, including import prohibitions which affect tariff 
collections, the provision in question was a tariff measure 
within the meaning of Rule XXI, clause 5(b). The point of order 
was sustained, and the provision stricken from the bill. [105-
1, p. H 6731]

July 17, 1996

            H.R. 3756, Treasury, Postal Service, and General Government 
                    Appropriations Act of 1997
    A point of order was raised against an amendment which 
prohibited the use of funds by the United States Customs 
Service to take any action that allowed certain imports into 
the United States from the People's Republic of China. The 
point of order was sustained. [104-2, p. H 7708]

May 9, 1995

            H.R. 1361, Coast Guard Authorization
    A point of order was raised against an amendment which 
increased certain fees for large foreign-flag cruise ships. The 
Chair ruled that by increasing the fees charged by the Coast 
Guard for inspecting large foreign-flag cruise ships by an 
unspecified amount in order to offset a decrease in fees for 
other vessels, the amendment attenuated the relationship 
between the amount of the fee and the cost of the particular 
government activity for which it was assessed. Therefore the 
increased fee qualified as a tax or tariff within the meaning 
of Rule XXI, clause 5(b). The point of order was sustained, and 
the amendment ruled out of order. [1-4-1, p. H 4593]

June 15, 1994

            H.R. 4539, Treasury, Postal Service, and General Government 
                    Appropriation for Fiscal Year 1995
    A point of order was raised against section 527 of the 
bill, which would have amended the HTS to create a new tariff 
classification. The new classification would have changed the 
rate of duty on the import of certain fabrics intended for use 
in the manufacture of hot air balloons, thus having direct 
impact on customs revenues. The point of order was conceded and 
sustained, and the provision was stricken from the bill. [103-
2, p. H 4531]

September 16, 1992

            H.R. 5231, The National Competitiveness Act of 1992
    A point of order was raised against an amendment offered by 
Representative Walker. The bill was reported solely from the 
Committee on Science and Technology and amended the Internal 
Revenue Code to provide, inter alia, changes in the tax 
treatment of capital gains.
    The Chair sustained the point of order without elaboration. 
[H102, p. H8621]

October 23, 1990

            H.R. 5021, Department of Commerce, Justice and State, the 
                    Judiciary and Related Agencies Appropriations Act, 
                    1991
    A point of order was raised against amendment 139 which 
increased the rate of fees paid to the Securities and Exchange 
Commission at the time of filing a registration statement. The 
Chair ruled that since the amendment provided that the 
increased level of fees would be deposited in the Treasury, the 
fee involved was in reality a tax and the revenues were to be 
used to defray general governmental costs. The point of order 
was conceded and sustained. [101-2, p. H 11412]

July 13, 1990

            H.R. 5241, Treasury, Postal Service and General Government 
                    Appropriations Act of 1991
    A point of order was raised against section 528 which 
prohibited that ``no funds appropriated'' would be used to 
impose or assess any tax under section 4181 of the Internal 
Revenue Code relating to the excise tax on the manufacture of 
firearms. The point of order was conceded and sustained. [101-
2, p. H 4692]

July 13, 1990

            H.R. 5241, Treasury, Postal Service and General Government 
                    Appropriations Act of 1991
    A point of order was raised against section 524 which 
prohibited the Internal Revenue Service from enforcing rules 
governing the antidiscrimination rules of the exclusion for 
employer provided health-care plans (section 89 of the Internal 
Revenue Code). The point of order was conceded and sustained. 
[101-2, p. H 4692]

October 5, 1989

            H.R. 3299, Omnibus Budget Reconciliation Act of 1989
    A point of order was raised against section 3201 which 
imposed fees on the filing of certain forms required to be 
filed annually in connection with maintaining pension and 
benefit plans. The point of order was sustained with the Chair 
ruling that the revenue raised funded ``general government 
activity.'' [101-1, p. H 6662]

October 4, 1989

            H.R. 3299, Omnibus Budget Reconciliation Act of 1989
    A point of order was raised against section 3156 which 
imposed a ``Termination Fee.'' Under the provision of the bill, 
an employer who terminated a pension plan in a standard 
termination was required to pay a $200-per-participant fee to 
the Pension Benefit Guaranty Corporation (PBGC), the Federal 
insurance agency established to insure defined benefit pension 
plans against insolvency. The point of order was conceded and 
sustained. [101-1, p. H 6621]

October 4, 1989

            H.R. 3299, Omnibus Budget Reconciliation Act of 1989
    A point of order was raised against section 3131(b) which 
exempted multi-employer pension plans from the full funding 
limits of the Internal Revenue Code, section 412(c)(7). This 
provision directly amended the Internal Revenue Code to allow 
the deductibility of contributions to a multi-employer pension 
plan in excess of the full funding limit. The point of order 
was conceded and sustained. [101-1, p. H 6622]

October 4, 1989

            H.R. 3299, Omnibus Budget Reconciliation Act of 1989
    A point of order was raised against section 7002 which 
imposed an annual fee of $1 per acre on the holder of Outer 
Continental Shelf leases. This fee has been designated to 
offset the costs of ocean related environmental research, 
assessment, and protection programs. The point of order was 
sustained with the Chair stating that ``a provision raising 
revenue to finance general government functions improperly 
characterized as a tax within the jurisdiction of Clause 5(b) 
of Rule XXI. [101-1, p. H 6610]

October 4,1989

            H.R. 3299, Omnibus Budget Reconciliation Act of 1989
    A point of order was raised against section 7002 which 
imposed a fee of $20 per passenger on vessels engaged in U.S. 
cruise trade or which offer off-shore gambling. The proceeds of 
this fee were to be deposited in both the Harbor Maintenance 
Trust Fund and the Treasury's general fund. The point of order 
was conceded and sustained. [101-1, p. H 6620]

September 30, 1988

            H.R. 4637, Conference Agreement to accompany the Foreign 
                    Operations, Export Financing and Related Programs 
                    Appropriations Act of 1989
    A point of order was raised against the motion to concur in 
the Senate amendment No. 176 which provided that S. 2848 
(Sanctions Against Iraqi Chemical Weapons Use Act), be added to 
the bill. The point of order was conceded and sustained. [100-
2, p. H 9236]

June 25, 1987

            H.R. 3545, Budget Reconciliation Act of 1987
    A point of order was raised against the section of the bill 
providing that ``all earnings and distributions'' from the 
Enjebi Community Trust Fund, ``shall not be subject to any form 
of Federal, State, or local taxation.'' The point of order was 
conceded and sustained. [100-1, p. H 5539-40]

August 1, 1986

            H.R. 5294, Appropriations, Treasury, Postal Service and 
                    General Government Appropriations, 1987
    A point of order was raised against section 103 which 
denied funds to the Internal Revenue Service to impose vesting 
requirements for qualified pension funds more stringent than 4/
40. As a result, legally collectible taxes on employer 
contributions to such plans would be indefinitely deferred. The 
point of order was conceded and sustained. [99-2, p. H 5311]

August 1, 1986

            H.R. 5294, Appropriations, Treasury, Postal Service and 
                    General Government Appropriations, 1987
    A point of order was raised against section 3 which 
prohibited the use of funds to implement regulations issued by 
the Department of the Treasury to implement section 274(d) of 
the Internal Revenue Code relating to the duty imposed on 
taxpayers to substantiate deductibility of certain expenses 
relating to travel, gifts, and entertainment.
    The Chair sustained the point of order stating that a 
limitation otherwise in order under Clause 2(c), of House Rule 
XXI which ``effectively and inherently either preclude[s] the 
IRS from collecting revenues otherwise due to be [owed] under 
provision of the Internal Revenue Code or require[s] the 
collection of revenue not legally due and owing constitutes a 
tax provision within the meaning of Rule XXI, Clause 5(b).''
    The Chair also noted that when the point of order was 
raised that under the rule the point of order against the 
provision could be raised at any point during the consideration 
of the bill. [99-2, p. H 5310]

October 24, 1986

            H.R. 3500, Budget Reconciliation Act of 1985
    A point of order was raised against section 3113. The 
provision in the reconciliation bill reported from the Budget 
Committee contained a recommendation from the Committee on 
Education and Labor to exclude certain interest on obligations 
to Student Loan Marketing Association from Application of 
Internal Revenue Code (IRC), section 265 which denies a 
deduction for certain expenses and interest relating to the 
production of tax-exempt income. The point of order was 
sustained. [99-1, p. H 5310]

October 24, 1985

            H.R. 3500, Budget Reconciliation Act of 1985
    A point of order was raised against section 6701 which had 
been reported from the Committee on the Budget containing a 
recommendation of the Committee on Merchant Marine and 
Fisheries. Section 6701 expanded tax benefits available to ship 
owners through the ``capital construction fund'' (section 7518 
of the Internal Revenue Code), by permitting repatriation of 
foreign-source income to avoid U.S. taxes and expanding the 
definition of vessels eligible to establish such tax-exempt 
funds. [99-1, p. H 9189]

July 26, 1985

            H.R. 3036, Appropriations, Treasury, Postal Service, and 
                    General Government Appropriation, 1986
    A point of order was raised against section 106 which 
prohibited the use of funds to implement or enforce regulations 
imposing or collecting a tax on the interest deferral from 
entrance or accommodation fees paid by elderly residents of 
continuing care facilities (section 7872 of the Internal 
Revenue Code). The Chair sustained the point of order against 
the provision as a tax provision within the meaning of House 
Rule XXI, Clause 5(b). [99-1, p. H 6418]

July 11, 1985

            H.R. 1555, International Security and Development Act of 
                    1985
    A point of order was raised against section 1208 which 
denied trade benefits to Afghanistan, provided for the denial 
of most favored nation status to Afghanistan and denied trade 
credits to Afghanistan. The point of order was conceded and 
sustained. [99-1, p. H 5489]

June 4, 1985

            H.R. 1460, Anti-Apartheid Act of 1985
    A point of order was raised against an amendment to 
prohibit the entry of South African Krugerrands or gold coins 
into the customs territory of the United States unless uniform 
5 percent fee were paid. The point of order was sustained on 
the grounds that the fee was equivalent to a tariff uniform 
charge imposed at ports of entry with proceeds deposited in the 
Treasury. [99-1, p. H 3762]

September 12, 1984

            H.R. 5798, conference report to accompany the 
                    Appropriations, Treasury, Postal Service, Executive 
                    Office of the President and certain independent 
                    agencies Appropriation, 1985
    A point of order was raised against a Senate amendment, No. 
92 which amended the existing customs law under the Tariff Act 
of 1930 with respect to seizures and forfeitures of property by 
the Customs Service. The point of order was conceded and 
sustained. [98-2, p. H 9407]

September 12, 1984

            H.R. 5798, conference report to accompany the 
                    Appropriations, Treasury, Postal Service, Executive 
                    Office of the President and certain independent 
                    agencies Appropriation, 1985
    A point of order was raised against a Senate amendment, No. 
26 which amended the tariff schedule of the United States 
(TSUS) to provide duty-free importation of a telescope for the 
University of Arizona. The point of order was conceded and 
sustained. [98-2, p. H 9396]

September 12, 1984

            H.R. 5798, conference report to accompany the 
                    Appropriations, Treasury, Postal Service, Executive 
                    Office of the President and certain independent 
                    agencies Appropriation, 1985
    A point of order was raised against a Senate amendment, No. 
24 which provided that ``none of the funds appropriated by this 
act or any other act'' shall be used to impose of assess the 
manufacturer's excise tax on sporting goods. The point of order 
specifically stated that the term ``tax'' and ``tariff'' under 
House Rule XXI, Clause 5(b), included provisions such as these 
contained in the amendment which would result less revenue 
spent than under the operation of existing law. The point of 
order was conceded and sustained. [98-2, p. H 9395-9396]

October 27, 1983

            H.R. 4139, conference report to accompany the 
                    Appropriations Treasury, Postal Service, Executive 
                    Office of the President and certain independent 
                    agencies Appropriation, 1984
    The Chair sustained a point of order against section 511 
which would have prohibited the Customs Service from enforcing 
a provision of law permitting agricultural products to enter 
the United States duty-free under the CBI. The Chair ruled that 
the effect of the provision was to cause duties on certain 
imports to be imposed where none is required and to require 
collections of revenue contrary to existing tariff laws and 
that, as a result, section 511 was a tariff provision rather 
than a limitation of appropriated funds. [98-1, p. H 8717]

September 21, 1983

            H.R. 1036, Community Renewal Employment Act
    The Chair sustained a point of order against a motion to 
recommit a bill to a committee without jurisdiction over 
revenue measures (the Committee on Education and Labor), and to 
report the bill back to the House with tax provisions relating 
to ``enterprise zones.'' The motion was ruled to violate House 
Rule XVI, Clause 7, and House Rule XXI Clause 5(b). [98-1, p. H 
7244]

        H. Restrictions on ``Federal Income Tax Rate Increases''

    House Rule XXI, clause 5(b) and (c) prohibit retroactive 
Federal income tax rate increases and require a supermajority 
[3/5] vote for any bill containing a prospective Federal income 
tax rate increase. The wording of the rule and its legislative 
history make it clear that the rule applies only to increases 
in specific statutory rates in the Internal Revenue Code and 
not to provisions merely because they raise revenue or 
otherwise modify the income tax base.

                     Appendix II. Historical Note 

    The Committee on Ways and Means was first established as an 
ad hoc committee in the first session of the First Congress, on 
July 24, 1789. Representative Fitzsimons, from Pennsylvania, in 
commenting on the report of a select committee concerning 
appropriations and revenues, pointed out the desirability of 
having a committee to review the expenditure needs of the 
Government and the resources available, as follows:
    The finances of America have frequently been mentioned in 
this House as being very inadequate to the demands. I have 
never been of a different opinion, and do believe that the 
funds of this country, if properly drawn into operation, will 
be equal to every claim. The estimate of supplies necessary for 
the current year appears very great from a report on your 
table, and which report has found its way into the public 
newspapers. I said, on a former occasion, and I repeat it now, 
notwithstanding what is set forth in the estimate, that a 
revenue of $3 million in specie, will enable us to provide 
every supply necessary to support the Government, and pay the 
interest and installments on the foreign and domestic debt. If 
we wish to have more particular information on these points, we 
ought to appoint a Committee on Ways and Means, to whom, among 
other things, the estimate of supplies may be referred, and 
this ought to be done speedily, if we mean to do it this 
session.
    After discussion, the motion was agreed to and a committee 
consisting of one Member from each State (North Carolina and 
Rhode Island had not yet ratified the Constitution) was 
appointed as follows: Messrs. Fitzsimons (Pennsylvania), Vining 
(Delaware), Livermore (New Hampshire), Cadwalader (New Jersey), 
Laurance (New York), Wadsworth (Connecticut), Jackson 
(Georgia), Gerry (Massachusetts), Smith (Maryland), Smith 
(South Carolina), and Madison (Virginia).
    While there does not appear to be any direct relationship, 
it is interesting to note that the appointment of this ad hoc 
committee came within a few weeks after the House, in Committee 
of the Whole, had spent a good part of the months of April, 
May, and June in wrestling with the details involved in writing 
bills ``for laying a duty on goods, wares, and merchandises 
imported into the United States'' and for imposing duties on 
tonnage. Tariffs, of course, became a prime revenue source for 
the new government.
    However, the results of this ad hoc committee are not 
clear. It existed for a period of only 8 weeks, being dissolved 
on September 17, 1789, with the following order:
    That the Committee on Ways and Means be discharged from 
further proceeding on the business referred to them, and that 
it be referred to the Secretary of the Treasury to report 
thereon.
    It has also been suggested by one student that the 
Committee was dissolved because Alexander Hamilton had become 
Secretary of the newly created U.S. Department of the Treasury, 
and thus it was presumed that the U.S. Department of the 
Treasury could provide the necessary machinery for developing 
information which would be needed. During the next 6 years 
there was no Committee on Ways and Means or any other standing 
committee for the examination of estimates. Rather, ad hoc 
committees were appointed to draw up particular pieces of 
legislation on the basis of decisions made in the Committee of 
the Whole House. On November 13, 1794, a rule was adopted 
providing that:

          All proceedings touching appropriations of money 
        shall be first moved and discussed in a Committee on 
        the Whole House.

    In the next Congress historians have suggested that the 
House was determined to curtail Secretary Hamilton's influence 
by first setting up a Committee on Ways and Means and requiring 
that Committee to submit a report on appropriations and revenue 
measures before consideration in the Committee of the Whole 
House. It was also said that this Committee on Ways and Means 
was put on a more or less standing basis since such a committee 
appeared at some point in every Congress until it was made a 
permanent committee.
    In the first session of the 7th Congress, Tuesday, December 
8, 1801, a resolution was adopted as follows:

          Resolved, That a standing Committee on Ways and Means 
        be appointed, whose duty it shall be to take into 
        consideration all such reports of the Treasury 
        Department, and all such propositions, relative to the 
        revenue as may be referred to them by the House; to 
        inquire into the state of the public debt, of the 
        revenue, and of the expenditures; and to report, from 
        time to time, their opinion thereon.

    The following Members were appointed: Messrs. Randolph 
(Virginia), Griswold (Connecticut), Smith (Vermont), Bayard 
(Delaware), Smilie (Pennsylvania), Read (Massachusetts), 
Nicholson (Maryland), Van Rensselaer (New York), Dickson 
(Tennessee).
    On Thursday, January 7, 1802, the House agreed to standing 
rules which, among other things, provided for standing 
committees, including the Committee on Ways and Means. The 
relevant part of the rules in this respect read as follows:
    A Committee on Ways and Means, to consist of seven Members;

           *       *       *       *       *       *       *

    It shall be the duty of the said Committee on Ways and 
Means to take into consideration all such reports of the U.S. 
Department of the Treasury, and all such propositions relative 
to the revenue, as may be referred to them by the House; to 
inquire into the state of the public debt, of the revenue, and 
of the expenditures, and to report, from time to time, their 
opinion thereon; to examine into the state of the several 
public departments, and particularly into the laws making 
appropriations of moneys, and to report whether the moneys have 
been disbursed conformably with such laws; and also to report, 
from time to time, such provisions and arrangements, as may be 
necessary to add to the economy of the departments, and the 
accountability of their officers.
    It has been said that the jurisdiction of the Committee was 
so broad in the early 19th century that one historian described 
it as follows:

          It seemed like an Atlas bearing upon its shoulders 
        all the business of the House.

    The jurisdiction of the Committee remained essentially the 
same until 1865 when the control over appropriations was 
transferred to a newly created Committee on Appropriations and 
another part of its jurisdiction was given to a newly created 
Committee on Banking and Currency. This action followed rather 
extended discussion in the House, too lengthy to review here.
    During the course of that discussion, however, the 
following observations are of some historical interest. 
Representative Cox, who was handling the motion to divide the 
Committee, gave a very picturesque discussion of the many 
varied and heavy duties which had fallen on the Committee over 
the years. He observed:

          And yet, sir, powerful as the Committee is 
        constituted, even their powers of endurance, physical 
        and mental, are not adequate to the great duty which 
        has been imposed by the emergencies of this historic 
        time. It is an old adage, that ``whoso wanteth rest 
        will also want of might''; and even an Olympian would 
        faint and flag if the burden of Atlas is not relieved 
        by the broad shoulders of Hercules.

    He continued:

          I might give here a detailed statement of the amount 
        of business thrown upon that Committee since the 
        commencement of the war. But I prefer to append it to 
        my remarks. Whereas before the war we scarcely expended 
        more than $70 million a year, now, during the five 
        sessions of the last two Congresses, there has been an 
        average appropriation of at least $800 million per 
        session. The statement which I hold in my hand shows 
        that during the first and extra session of the 37th 
        Congress there came appropriation bills from the 
        Committee on Ways and Means amounting to 
        $226,691,457.99. I say nothing now of the loan and 
        other fiscal bills emanating from that Committee. * * * 
        During the present session I suppose it would be a fair 
        estimate to take the appropriations of the last session 
        of the 37th Congress, say $900 million.
          These are appropriation bills alone. They are 
        stupendous, and but poorly symbolize the immense labors 
        which the internal revenue, tariff, and loan bills 
        imposed on the Committee. * * * And this business of 
        appropriations is perhaps not one-half of the labor of 
        the Committee. There are various and important matters 
        upon which they act, but upon which they never report. 
        Their duties comprehend all the varied interests of the 
        United States; every element and branch of industry, 
        and every dollar or dime of value. They are connected 
        with taxation, tariffs, banking, loan bills, and ramify 
        to every fiber of the body-politic. All the springs of 
        wealth and labor are more or less influenced by the 
        action of this Committee. Their responsibility is 
        immense, and their control almost imperial over the 
        necessities, comforts, homes, hopes, and destinies of 
        the people. All the values of the United States, which 
        in the census of 1860 (page 194) amount to nearly $17 
        billion, or, to be exact, $16,159,616,068, are affected 
        by the action of that Committee, even before their 
        action is approved by the House. Those values fluctuate 
        whenever the head of the Committee on Ways and Means 
        rises in his place and proposes a measure. The price of 
        every article we use trembles when he proposes a gold 
        bill or a loan bill, or any bill to tax directly or 
        indirectly. * * *
          * * * the interests connected with these economical 
        questions are of all questions those most momentous for 
        the future. Parties, statesmanship, union, stability, 
        all depend upon the manner in which these questions are 
        dealt with.

    Representative Morrill (who was subsequently appointed 
chairman of the Committee on Ways and Means in the succeeding 
Congress, and who still later became chairman of the Senate 
Committee on Finance after he became a Senator) observed as 
follows:

          I am entirely indifferent as to the disposition which 
        shall be made of this subject by the House. So far as I 
        am myself concerned, I have never sought any position 
        upon any committee from the present or any other 
        Speaker of the House, and probably never shall. I have 
        no disposition to press myself hereafter for any 
        position. In relation to the proposed division of the 
        Committee on Ways and Means, the only doubt that I have 
        is the one expressed by my colleague on that Committee, 
        Representative Stevens, in regard to the separation of 
        the questions of revenue from those relating to 
        appropriations. In ordinary times of peace I should 
        deem it almost indispensable and entirely within their 
        power that this Committee should have the control of 
        both subjects, in order that they might make both ends 
        meet, that is, to provide a sufficient revenue for the 
        expenditures. That reason applies now with greater 
        force; but it may be that the Committee is overworked. 
        It is true that for the last 3 or 4 years the labors of 
        the Committee on Ways and Means have been incessant, 
        they have labored not only days but nights; not only 
        weekends but Sundays. If gentlemen suppose that the 
        Committee have permitted some appropriations to be 
        reported which should not have been permitted they 
        little understand how much has been resisted.

    The influence the Committee came not only from the nature 
of its jurisdiction but also because for many years the 
chairman of the Committee was also ad hoc majority Floor leader 
of the House.
    When the revolt against Speaker Cannon took place, and the 
Speaker's powers to appoint the Members of committees were 
curtailed, the Majority Members on the Committee on Ways and 
Means became the Committee on Committees. Subsequently, this 
power was disbursed to the respective party caucuses, beginning 
in the 94th Congress.
    Throughout its history, many famous Americans have served 
on the Committee on Ways and Means. The long and distinguished 
list includes 8 Presidents of the United States, 8 Vice 
Presidents, 4 Justices of the Supreme Court, 34 Cabinet 
members, and quite interestingly, 21 Speakers of the House of 
Representatives. This latter figure represents nearly one-half 
of the 51 Speakers who have served since 1789 through the end 
of the 107th Congress. See the alphabetical list which follows 
for names.

  Major positions held by former members of the Committee on Ways and 
                                 Means

President of the United States:
        George H. W. Bush, Texas
        Millard Fillmore, New York
        James A. Garfield, Ohio
        Andrew Jackson, Tennessee
        James Madison, Virginia
        William McKinley, Jr., Ohio
        James K. Polk, Tennessee
        John Tyler, Virginia
Vice President of the United States:
        John C. Breckinridge, Kentucky
        George H. W. Bush, Texas
        Charles Curtis, Kansas
        Millard Fillmore, New York
        John N. Garner, Texas
        Elbridge Gerry, Massachusetts
        Richard M. Johnson, Kentucky
        John Tyler, Virginia
Justice of the Supreme Court:
        Philip P. Barbour, Virginia
        Joseph McKenna, California
        John McKinley, Alabama
        Fred M. Vinson, Kentucky (Chief Justice)
Speaker of the House of Representatives:
        Nathaniel P. Banks, Massachusetts
        Philip P. Barbour, Virginia
        James G. Blaine, Maine
        John G. Carlisle, Kentucky
        Langdon Cheves, South Carolina
        James B. (Champ) Clark, Missouri
        Howell Cobb, Georgia
        Charles F. Crisp, Georgia
        John N. Garner, Texas
        John W. Jones, Virginia
        Michael C. Kerr, Indiana
        Nicholas Longworth, Ohio
        John W. McCormack, Massachusetts
        James K. Polk, Tennessee
        Henry T. Rainey, Illinois
        Samuel J. Randall, Pennsylvania
        Thomas B. Reed, Maine
        Theodore Sedgwick, Massachusetts
        Andrew Stevenson, Virginia
        John W. Taylor, New York
        Robert C. Winthrop, Massachusetts
Cabinet Member:
        Secretary of State:
                James G. Blaine, Maine
                William J. Bryan, Nebraska
                Cordell Hull, Tennessee \3\
---------------------------------------------------------------------------
    \3\ Recipient of Nobel Peace Prize in 1945.
---------------------------------------------------------------------------
                Louis McLean, Delaware
                John Sherman, Ohio
        Secretary of the Treasury:
                George W. Campbell, Tennessee
                John G. Carlisle, Kentucky
                Howell Cobb, Georgia
                Thomas Corwin, Ohio
                Charles Foster, Ohio
                Albert Gallatin, Pennsylvania
                Samuel D. Ingham, Pennsylvania
                Louis McLean, Delaware
                Ogden L. Mills, New York
                John Sherman, Ohio
                Philip F. Thomas, Maryland
                Fred M. Vinson, Kentucky
        Attorney General:
                James P. McGranery, Pennsylvania
                Joseph McKenna, California
                A. Mitchell Palmer, Pennsylvania
                Caesar A. Rodney, Delaware
        Postmaster General:
                Samuel D. Hubbard, Connecticut
                Cave Johnson, Tennessee
                Horace Maynard, Tennessee
                William L. Wilson, West Virgina
        Secretary of the Navy:
                Thomas W. Gilder, Virginia
                Hilary A. Herbert, Alabama
                Victor H. Metcalf, California
                Claude A. Swanson, Virginia
        Secretary of the Interior:
                Rogers C. B. Morton, Maryland
                Jacob Thompson, Mississippi
        Secretary of Commerce and Labor:
                Victor H. Metcalf, California
        Secretary of Commerce:
                Rogers C. B. Morton, Maryland
        Secretary of Agriculture:
                Clinton P. Anderson, New Mexico

Appendix III. Statistical Review of the Activities of the Committee on 
                             Ways and Means


      A. Number of Bills and Resolutions Referred to the Committee

    As of the close of the 107th Congress on November 22, 2002, 
there had been referred to the Committee a total of 1,941 
bills, representing 27.6 percent of all the public bills 
introduced in the House of Representatives.
    The following table gives a more complete statistical 
review since 1967.

       TABLE 1.--NUMBER OF BILLS AND RESOLUTIONS REFERRED TO THE COMMITTEE, 90TH THROUGH 107TH CONGRESSES
----------------------------------------------------------------------------------------------------------------
                                                                              Referred to
                                                         Introduced in     Committee on Ways      Percentage
                                                             House             and Means
----------------------------------------------------------------------------------------------------------------
90th Congress.......................................              24,227               3,806                15.7
91st Congress.......................................              23,575               3,442                14.6
92d Congress........................................              20,458               3,157                15.4
93d Congress........................................              21,096               3,370                16.0
94th Congress.......................................              19,371               3,747                19.3
95th Congress.......................................              17,800               3,922                22.0
96th Congress.......................................              10,196               2,337                22.9
97th Congress.......................................               9,909               2,377                26.4
98th Congress.......................................               8,104               1,904                23.5
99th Congress.......................................               7,522               1,568                20.8
100th Congress......................................               7,043               1,419                22.1
101st Congress......................................               7,640               1,737                22.7
102d Congress.......................................               7,771               1,972                25.4
103d Congress.......................................               6,645               1,496                22.5
104th Congress......................................               5,329               1,071                20.1
105th Congress......................................               5,976               1,509                25.2
106th Congress......................................               6,942               1,762                25.3
107th Congress......................................               7,029               1,941                27.6
----------------------------------------------------------------------------------------------------------------

                           B. Public Hearings

    In the course of the 107th Congress, the full Committee on 
Ways and Means held public hearings on a total of 17 days, 
including 7 days in the first session and 10 days in the second 
session. Many of these hearings dealt with major subjects 
including the President's fiscal year 2001 and 2002 budget 
proposals, health and welfare issues, and the creation of the 
U.S. Department of Homeland Security. The full Committee also 
focused on such issues as legislation on welfare reform, 
patient safety improvement, bipartisan trade promotion 
authority, and TAA promotions.
    The following table specifies the statistical data on the 
number of days and witnesses published on each of the subjects 
covered by public hearings in the full Committee during the 
107th Congress.

  TABLE 2.--PUBLIC HEARINGS CONDUCTED BY THE FULL COMMITTEE ON WAYS AND
                                  MEANS
------------------------------------------------------------------------
                                                         Number of
                Subject and Date                 -----------------------
                                                     Days      Witnesses
------------------------------------------------------------------------
2001:
    President's Tax Relief Proposals, Feb. 13...           1           4
    President Bush's Trade Agenda, Mar. 7.......           1           1
    Bush Administration's Health and Welfare               1           1
     Priorities, Mar. 14........................
    Social Security and Medicare Trustees' 2001            1           1
     Annual Reports (held jointly with the
     Senate Committee on Finance), Mar. 20......
    Medicare Solvency, Mar. 20..................           1           2
    President's Tax Relief Proposals, Mar. 21...           1          13
    Administration's Principles to Strengthen              1           1
     and Modernize Medicare, July 19............
                                                 -----------------------
      Total for 2001............................           7          23
                                                 =======================
2002:
    President's Fiscal Year 2003 Budget with               1           1
     Treasury Secretary O'Neill, Feb. 5.........
    President's 2003 Budget Proposals Featuring            1           1
     HHS Secretary Thompson, Feb. 6.............
    President's 2003 Budget Proposals Featuring            1           1
     OMB Director Daniels, Feb. 6...............
    President Bush's Trade Agenda for 2002, Feb.           1           1
     7..........................................
    Health Care Tax Credits to Decrease the                1           6
     Number of Uninsured, Feb. 13...............
    Retirement Security and Defined Contribution           1           5
     Plans, Feb. 26.............................
    WTO's Extraterritorial Income Decision, Feb.           1           5
     27.........................................
    HHS Secretary Thompson on the President's              1           1
     Plan to Building on the Successes of
     Welfare Reform, Mar. 12....................
    Integrating Prescription Drugs Into                    1           7
     Medicare, Apr. 17..........................
    Corporate Inversions, June 6................           1           1
    Creation of Homeland Security Department,              1           5
     June 26....................................
                                                 -----------------------
      Total for 2002............................          10          34
                                                 =======================
      Total for both sessions...................          17          57
------------------------------------------------------------------------

    The six Subcommittees of the Committee on Ways and Means 
were also very active in conducting public hearings during the 
107th Congress. The following table specifies in detail the 
number of days and witnesses published by each of the 
Subcommittees.

     TABLE 3.--PUBLIC HEARINGS CONDUCTED BY THE SUBCOMMITTEES OF THE
                       COMMITTEE ON WAYS AND MEANS
------------------------------------------------------------------------
                                                         Number of
                Subject and Date                 -----------------------
                                                     Days      Witnesses
------------------------------------------------------------------------
              SUBCOMMITTEE ON TRADE
 2001:
    Free Trade Deals: Is the United States                 1          10
     Losing Ground As Its Trading Partners Move
     Ahead, Mar. 29.............................
    Outcome of the Summit of the Americas and              1          15
     Prospects for Free Trade in the Hemisphere,
     May 8......................................
    Benefits of Trade to the Medical Technology            1          12
     and Agriculture Sectors, May 14............
    Renewal of Normal Trade Relations with                 1          10
     China, July 10.............................
    Trade Agency Budget Authorizations and Other           1          12
     Customs Issues, July 17....................
    ``Conflict Diamonds,'' Oct. 10..............           1           9
2002:
    To Explore Permanent Normal Trade Relations            1           9
     for Russia, Apr. 11........................
    President's Waiver for Vietnam from the                1           6
     Jackson-Vanik Freedom of Emigration
     Requirements, July 18......................
                                                 -----------------------
      Total.....................................           8          83
                                                 =======================
            SUBCOMMITTEE ON OVERSIGHT
 2001:
    Energy Supply and Prices, Mar. 5............           1           8
    2001 Tax Return Filing Season, Apr. 3.......           1           6
    Taxpayer Advocate Report and Low-Income                1           7
     Taxpayer Clinics, July 12..................
    First in Series on Tax Code Simplification,            1           5
     July 17 (held jointly with the Subcommittee
     on Select Revenue Measures)................
    Deceptive Mailing Concerning Tax Refunds,              1           2
     July 19....................................
    Response by Charitable Organizations to the            1           8
     Recent Terrorist Attacks, Nov. 8...........
2002:
    IRS National Taxpayer Advocate Annual Report           1           2
     and IRS Oversight Board Annual Report, Feb.
     28.........................................
    Employee and Employer Views on Retirement              1          10
     Security, Mar. 5...........................
    2002 Tax Return Filing Season and the IRS              1           8
     Budget for Fiscal Year 2003, Apr. 9........
    Modeling the Economic Effect of Changes in             1           2
     Tax Policy, May 7..........................
    Review of Internal Revenue Code Section                1           8
     501(c)(3) Requirements for Religious
     Organizations, May 14......................
    Tax Incentives for Renewal Communities, May            1           9
     21.........................................
    Retirement Security and Defined Benefit                1           9
     Pension Plans, June 20.....................
                                                 -----------------------
      Total.....................................          13          84
                                                 =======================
             SUBCOMMITTEE ON HEALTH
 2001:
    Medicare Reform, Feb. 28....................           1           5
    Second in Series on Medicare Reform:                   1           8
     Bringing Regulatory Relief to Beneficiaries
     and Providers, Mar. 15.....................
    Third in Series on Medicare Reform: Laying             1           7
     the Groundwork for a Rx Drug Benefit, Mar.
     27.........................................
    Nation's Uninsured, Apr. 4..................           1           6
    Patient Protections in Managed Care, Apr. 24           1           5
    Fourth in Series on Medicare Reform:                   1           7
     Medicare+Choice: Lessons for Reform, May 1.
    Fifth in Series on Medicare Reform:                    1           4
     Strengthening Medicare: Modernizing
     Beneficiary Cost Sharing, May 9............
    Rural Health Care in Medicare, June 12......           1           4
    H.R. 2768, the ``Medicare Regulatory and               1           5
     Contracting Reform Act of 2001,'' Sept. 25.
    Status of the Medicare+Choice Program, Dec.            1           4
     4..........................................
2002:
    Physician Payments, Feb. 28.................           1           6
    Health Quality and Medical Errors, Mar. 7...           1           5
    Medicare Supplemental Insurance, Mar. 14....           1           4
    Promoting Disease Management in Medicare,              1           3
     Apr. 16....................................
    Medicare's Geographic Cost Adjustors, July             1          18
     23.........................................
    Legislation to Reduce Medical Errors, Sept.            1           6
     10.........................................
    Medicare Payments for Currently Covered                1           6
     Prescription Drugs, Oct. 3.................
                                                 -----------------------
      Total.....................................          17         106
                                                 =======================
         SUBCOMMITTEE ON SOCIAL SECURITY
 2001:
    Social Security Administration's Proposal to           1           6
     Implement Return to Work Legislation, Feb.
     28.........................................
    Ensuring the Integrity of Social Security              1           6
     Programs, May 10...........................
    Social Security's Processing of Attorney               1           5
     Fees, May 17...............................
    Protecting Privacy and Preventing Misuse of            1          14
     Social Security Numbers, May 22............
    Listen to Americans' Views on the Future of            1         N/A
     Social Security, June 18...................
    First in Series on Social Security Programs'           1           8
     Challenges and Opportunities, June 28......
    Misleading Mailings Targeted to Seniors,               1           7
     July 26....................................
    Social Security and Pension Reform: Lessons            1           7
     from Other Countries, July 31..............
    Social Security Administration's Response to           1           2
     the September 11 Terrorist Attacks, Nov. 1.
    Preventing Identity Theft by Terrorist and             1          10
     Criminals (held jointly with the
     Subcommittee on Oversight and
     Investigations, Committee on Financial
     Services), Nov. 8..........................
2002:
    Social Security Improvements for Women,                2          24
     Seniors, and Working Americans, Feb. 28,
     Mar. 6.....................................
    Protecting the Privacy of Social Security              1           9
     Numbers and Preventing Identity Theft, Apr.
     29.........................................
    Challenges Facing the New Commissioner of              1           7
     Social Security, May 2.....................
    Second in Series on Social Security                    2          15
     Disability Programs' Challenges and
     Opportunities, June 11, 20.................
    Third in Series on Social Security                     1           9
     Disability Programs' Challenges and
     Opportunities, July 11.....................
    Preserving the Integrity of Social Security            1           7
     Numbers and Preventing Their Misuse by
     Terrorists and Identity Thieves (held
     jointly with the Subcommittee on
     Immigration, Border Security and Claims,
     Committee on the Judiciary), Sept. 19......
    Fourth in a Series on Social Security                  1          11
     Disability Programs' Challenges and
     Opportunities, Sept. 26....................
                                                 -----------------------
      Total.....................................          19         147
                                                 =======================
         SUBCOMMITTEE ON HUMAN RESOURCES
 2001:
    Welfare Reform, Mar. 15.....................           1           4
    Second in Series on Welfare Reform: Work               1          10
     Requirements on the TANF Cash Welfare
     Program, Apr. 3............................
    ``Rainy Day'' and Other Special TANF Funds,            1           4
     Apr. 26....................................
    Promoting Safe and Stable Families Program,            1           7
     May 10.....................................
    Welfare and Marriage Issues, May 22.........           1          10
    H.R. 7, the ``Community Solutions Act of               1          20
     2001'' (held jointly with Subcommittee on
     Select Revenue Measures), June 14..........
    Child Support and Fatherhood Proposals, June           1           8
     28.........................................
    Bush Administration Budget Proposals, July             1           1
     11.........................................
    Teen Pregnancy Prevention, Nov. 15..........           1           7
2002:
    President's Unemployment Administrative                1           5
     Financing Reform Initiative, Mar. 5........
    Implementation of Welfare Reform Work                  1           8
     Requirements and Time Limits, Mar. 7.......
    Welfare Reform Success, Apr. 2..............           1           7
    Welfare Reform Reauthorization Proposals,              1          49
     Apr. 11....................................
    Unemployment Fraud and Abuse, June 11.......           1           6
    Fraud and Abuse in the Supplemental Security           1           5
     Income Program, July 25....................
                                                 -----------------------
      Total.....................................          15         151
                                                 =======================
     SUBCOMMITTEE ON SELECT REVENUE MEASURES
 2001:
    First in Series on the Effect of Federal Tax           1           6
     Laws on the Production, Supply, and
     Conservation of Energy, May 3..............
    Second in Series on the Effect of Federal              1          20
     Tax Laws on the Production, Supply, and
     Conservation of Energy, June 12............
    Third in Series on the Effect of Federal Tax           1          12
     Laws on the Production, Supply, and
     Conservation of Energy, June 13............
2002:
    First in a Series on the Extraterritorial              1           6
     Income Regime, Apr. 10.....................
    Tax Incentives for Land Use, Conservation,             1          14
     and Preservation, Apr. 30..................
    Second in a Series on Extraterritorial                 1           7
     Income Regime, May 9.......................
    Third in a Series on Extraterritorial Income           1           9
     Regime, June 13............................
    Corporate Inversions, June 25...............           1           6
                                                 -----------------------
      Total.....................................           8          80
------------------------------------------------------------------------

    As the foregoing statistics indicate, during the 107th 
Congress the full Committee and its six Subcommittees held 
public hearings aggregating a grand total of 97 days, during 
which time 708 witnesses testified. There were five field 
hearings, two held by the Subcommittee on Social Security in 
Columbia, Missouri, and Lake Worth, Florida; one each held by 
the Subcommittees on Human Resources, Oversight, and Trade in 
University Center, Michigan; Mayville, New York; and 
Bloomington, Minnesota.
    In addition, written comments were printed after having 
been requested and received by the full Committee on 
temporarily suspending the duty on certain steam or other vapor 
generating boilers used in nuclear facilities; the Subcommittee 
on Oversight on taxpayer rights, and H.R. 2237, expanding the 
exemption from unrelated trade or business income for 
conducting certain games of chance; and the Subcommittee on 
Trade technical corrections to U.S. Trade Laws and 
Miscellaneous Duty Suspension Bills.

                           C. Markup Sessions

    With respect to markup or business sessions during the 
107th Congress, the full Committee and its six Subcommittees 
were also very actively engaged. The full Committee held such 
sessions on 30 working days, usually both morning and afternoon 
sessions, and the Subcommittees an aggregate of 5 working days, 
making a grand total of 35 working days of markup or business 
sessions for the full Committee and its Subcommittees during 
the 107th Congress.

D. Number and Final Status of Bills Reported From the Committee on Ways 
                    and Means in the 107th Congress

    During the 107th Congress, the Committee reported to the 
House a total of 36 bills, 32 favorably and 4 adversely. There 
were 73 bills containing provisions within the purview of the 
Committee that were passed by the House; 20 were enacted into 
law. This is not indicative of the total number of bills 
considered by the Committee. When the Committee meets on major 
tax, tariff, Social Security, health, unemployment 
compensation, or human resources matters, it often considers a 
broad subject rather than individual, specific bills. In 
consideration of a broad matter, the Committee makes every 
attempt to review all pending pertinent bills encompassed 
within that subject. As many as several hundred bills, for 
instance, may translate into a broad subject that is then 
reported by the Committee. Therefore, it is typically the 
practice of the Committee to report bills on a major subject 
rather than on several minor subjects.

Appendix IV. Chairmen of the Committee on Ways and Means and Membership 
       of the Committee From the 1st Through the 107th Congresses


    A. Chairmen of the Committee on Ways and Means, 1789 to Present


----------------------------------------------------------------------------------------------------------------
                 Name                           State                    Party               Term of Service
----------------------------------------------------------------------------------------------------------------
Thomas Fitzsimons....................  Pennsylvania...........  Federalist.............  1789.
William L. Smith.....................  South Carolina.........  Federalist.............  1794 to 1797.
Robert G. Harper.....................  South Carolina.........  Federalist.............  1797 to 1800.
Roger Griswold.......................  Connecticut............  Federalist.............  1800 to 1801.
John Randolph........................  Virginia...............  Jeffersonian Republican  1801 to 1805, 1827.
Joseph Clay..........................  Pennsylvania...........  Jeffersonian Republican  1805 to 1807.
George W. Campbell...................  Tennessee..............  Jeffersonian Republican  1807 to 1809.
John W. Eppes........................  Virginia...............  Jeffersonian Republican  1809 to 1811.
Ezekiel Bacon........................  Massachusetts..........  Jeffersonian Republican  1811 to 1812.
Langdon Cheves.......................  South Carolina.........  Jeffersonian Republican  1812 to 1813.
John W. Eppes........................  Virginia...............  Jeffersonian Republican  1813 to 1815.
William Lowndes......................  South Carolina.........  Jeffersonian Republican  1815 to 1818.
Samuel Smith.........................  Maryland...............  Jeffersonian Republican  1818 to 1822.
Louis McLane.........................  Delaware...............  Jeffersonian Republican  1822 to 1827.
George McDuffie......................  South Carolina.........  Democrat...............  1827 to 1832.
Gulian C. Verplanck..................  New York...............  Democrat...............  1832 to 1833.
James K. Polk........................  Tennessee..............  Democrat...............  1833 to 1835.
C. C. Cambreleng.....................  New York...............  Democrat...............  1835 to 1839.
John W. Jones........................  Virginia...............  Democrat...............  1839 to 1841.
Millard Fillmore.....................  New York...............  Whig...................  1841 to 1843.
James Iver McKay.....................  North Carolina.........  Democrat...............  1843 to 1847.
Samuel F. Vinton.....................  Ohio...................  Whig...................  1847 to 1849.
Thomas H. Bayly......................  Virginia...............  Democrat...............  1849 to 1851.
George S. Houston....................  Alabama................  Democrat...............  1851 to 1855.
Lewis D. Campbell....................  Ohio...................  Republican.............  1855 to 1857.
J. Glancy Jones......................  Pennsylvania...........  Democrat...............  1857 to 1858.
John S. Phelps.......................  Missouri...............  Democrat...............  1858 to 1859.
John Sherman.........................  Ohio...................  Republican.............  1859 to 1861.
Thaddeus Stevens.....................  Pennsylvania...........  Republican.............  1861 to 1865.
Justin S. Morrill....................  Vermont................  Republican.............  1865 to 1867.
Robert C. Schenck....................  Ohio...................  Republican.............  1867 to 1871.
Samuel D. Hooper.....................  Massachusetts..........  Republican.............  1871.
Henry L. Dawes.......................  Massachusetts..........  Republican.............  1871 to 1875.
William R. Morrison..................  Illinois...............  Democrat...............  1875 to 1877.
Fernando Wood........................  New York...............  Democrat...............  1877 to 1881.
John R. Tucker.......................  Virginia...............  Democrat...............  1881.
William D. Kelley....................  Pennsylvania...........  Republican.............  1881 to 1883.
William R. Morrison..................  Illinois...............  Democrat...............  1883 to 1887.
Roger Q. Mills.......................  Texas..................  Democrat...............  1887 to 1889.
William McKinley, Jr.................  Ohio...................  Republican.............  1889 to 1891.
William M. Springer..................  Illinois...............  Democrat...............  1891 to 1893.
William L. Wilson....................  West Virginia..........  Democrat...............  1893 to 1895.
Nelson Dingley, Jr...................  Maine..................  Republican.............  1895 to 1899.
Sereno E. Payne......................  New York...............  Republican.............  1899 to 1911.
Oscar W. Underwood...................  Alabama................  Democrat...............  1911 to 1915.
Claude Kitchin.......................  North Carolina.........  Democrat...............  1915 to 1919.
Joseph W. Fordney....................  Michigan...............  Republican.............  1919 to 1923.
William R. Green.....................  Iowa...................  Republican.............  1923 to 1928.
Willis C. Hawley.....................  Oregon.................  Republican.............  1929 to 1931.
James W. Collier.....................  Mississippi............  Democrat...............  1931 to 1933.
Robert L. Doughton...................  North Carolina.........  Democrat...............  1933 to 1947, 1949 to
                                                                                          1953.
Harold Knutson.......................  Minnesota..............  Republican.............  1947 to 1949.
Daniel A. Reed.......................  New York...............  Republican.............  1953 to 1955.
Jere Cooper..........................  Tennessee..............  Democrat...............  1955 to 1957.
Wilbur D. Mills......................  Arkansas...............  Democrat...............  1957 to 1975.
Al Ullman............................  Oregon.................  Democrat...............  1975 to 1981.
Dan Rostenkowski.....................  Illinois...............  Democrat...............  1981 to 1994.
Bill Archer..........................  Texas..................  Republican.............  1995 to 2001.
William M. Thomas....................  California.............  Republican.............  2000-
----------------------------------------------------------------------------------------------------------------

           B. Tables Showing Past Membership of the Committee


1. MEMBERS OF THE COMMITTEE ON WAYS AND MEANS FROM THE 1ST THROUGH THE 
                        107TH CONGRESS, BY STATE

------------------------------------------------------------------------
                        Member                            Congress(es)
------------------------------------------------------------------------
Alabama:
    John McKinley....................................                 23
    David Hubbard....................................                 26
    Dixon H. Lewis...................................              27-28
    George S. Houston................................       29-30, 32-33
    James F. Dowdell.................................                 35
    Hilary A. Herbert................................                 48
    Joseph Wheeler...................................              53-55
    Oscar W. Underwood...............................          56, 59-63
    Ronnie G. Flippo.................................             98-101
Arizona:
    J.D. Hayworth....................................               105-
Arkansas:
    James K. Jones...................................                 48
    Clifton R. Breckinridge..........................          49-51, 53
    William A. Oldfield..............................              64-70
    Heartsill Ragon..................................              70-73
    William J. Driver................................                 72
    Claude A. Fuller.................................              73-75
    Wilbur D. Mills..................................              77-94
    Jim Guy Tucker, Jr...............................                 95
    Beryl Anthony, Jr................................             97-102
California:
    Joseph McKenna...................................              51-52
    Victor H. Metcalf................................              57-58
    James C. Needham.................................              58-62
    William E. Evans.................................                 73
    Frank H. Buck....................................              74-77
    Bertrand W. Gearhart.............................              76-80
    Cecil R. King....................................       78-79, 81-90
    James B. Utt.....................................          83, 86-91
    James C. Corman..................................              90-96
    Jerry L. Pettis..................................              91-94
    William M. Ketchum...............................              94-95
    Fortney Pete Stark...............................                94-
    John H. Rousselot................................              95-97
    Robert T. Matsui.................................                97-
    William M. Thomas................................                98-
    Wally Herger.....................................               103-
    Xavier Becerra...................................               105-
Colorado:
    Robert W. Bonynge................................                 60
    Charles B. Timberlake............................              66-72
    John A. Carroll..................................                 81
    Donald G. Brotzman...............................              92-93
    George H. ``Hank'' Brown.........................            100-101
    Scott McInnis....................................               106-
Connecticut:
    Jeremiah Wadsworth...............................                  1
    Uriah Tracy......................................                  3
    James Hillhouse..................................                  4
    Nathaniel Smith..................................                4-5
    Joshua Coit......................................                  5
    Roger Griswold...................................                5-8
    John Davenport...................................                  8
    Jonathan O. Moseley..............................          9, 14, 16
    Benjamin Tallmadge...............................              10-11
    Timothy Pitkin...................................          12-13, 15
    Ralph I. Ingersoll...............................              21-22
    Samuel D. Hubbard................................                 30
    James Phelps.....................................              45-46
    Charles A. Russell...............................              54-57
    Ebenezer J. Hill.................................       58-62, 64-65
    John Q. Tilson...................................              66-68
    Antoni N. Sadlak.................................              83-85
    William R. Cotter................................              94-97
    Barbara B. Kennelly..............................             98-105
    Nancy L. Johnson.................................               101-
Delaware:
    John Vining......................................                  1
    Henry Latimer....................................                  3
    John Patten......................................                  4
    James A. Bayard, Sr..............................               5, 7
    Caesar A. Rodney.................................                  8
    Louis McLane.....................................              16-19
Florida:
    A. S. Herlong, Jr................................              84-90
    Sam M. Gibbons...................................             91-104
    L. A. (Skip) Bafalis.............................              94-97
    E. Clay Shaw, Jr.................................               100-
    Karen L. Thurman.................................            105-107
    Mark Foley.......................................               104-
Georgia:
    James Jackson....................................                  1
    Abraham Baldwin..................................                3-5
    Benjamin Taliaferro..............................                  6
    John Milledge....................................                  7
    David Meriwether.................................                8-9
    William W. Bibb..................................              12-13
    Joel Abbott......................................                 15
    Joel Crawford....................................              15-16
    Wiley Thompson...................................              17-18
    George R. Gilmer.................................                 20
    Richard H. Wilde.................................              22-23
    George W. Owens..................................              24-25
    Charles E. Haynes................................                 25
    Mark A. Cooper...................................                 26
    Absalom H. Chappell..............................                 28
    Seaborn Jones....................................                 29
    Robert Toombs....................................              30-31
    Alexander H. Stephens............................          30-31, 33
    Marshall J. Wellborn.............................                 31
    Howell Cobb......................................                 34
    Martin J. Crawford...............................              35-36
    Benjamin H. Hill.................................                 44
    Henry R. Harris..................................             45, 49
    William H. Felton................................                 46
    Emory Speer......................................                 47
    James H. Blount..................................                 48
    Henry G. Turner..................................              50-54
    Charles F. Crisp.................................                 54
    James M. Griggs..................................              60-61
    William G. Brantley..............................              61-62
    Charles R. Crisp.................................              64-72
    Albert S. Camp...................................              78-83
    Phillip M. Landrum...............................              89-94
    Ed Jenkins.......................................             95-102
    Wyche Fowler, Jr.................................              96-99
    John Lewis.......................................               103-
    Mac Collins......................................               104-
Hawaii:
    Cecil (Cec) Heftel...............................              96-99
Illinois:
    Daniel P. Cook...................................                 19
    John A. McClernand...............................                 37
    John Wentworth...................................                 39
    John A. Logan....................................                 40
    Samuel S. Marshall...............................                 41
    Horatio C. Burchard..............................              42-45
    William R. Morrison..............................          44, 46-49
    William M. Springer..............................                 52
    Albert J. Hopkins................................              52-57
    Henry S. Boutell.................................              58-61
    Henry T. Rainey..................................       62-66, 68-72
    John A. Sterling.................................                 65
    Ira C. Copley....................................              66-67
    Carl R. Chindblom................................              68-72
    Chester C. Thompson..............................              74-75
    Raymond S. McKeough..............................              76-77
    Charles S. Dewey.................................                 78
    Thomas J. O'Brien................................          79, 81-88
    Noah M. Mason....................................              80-87
    Harold R. Collier................................              88-93
    Dan Rostenkowski.................................             88-103
    Abner J. Mikva...................................              94-96
    Philip M. Crane..................................                94-
    Marty Russo......................................             96-102
    Mel Reynolds.....................................                103
    Jerry Weller.....................................               105-
Indiana:
    David Wallace....................................                 27
    Cyrus L. Dunham..................................                 32
    William E. Niblack...............................             40, 43
    Godlove S. Orth..................................                 41
    Michael C. Kerr..................................                 42
    Thomas M. Browne.................................              48-50
    William D. Bynum.................................             50, 53
    Benjamin F. Shively..............................                 52
    George W. Steele.................................              54-57
    James E. Watson..................................              58-60
    Edgar D. Crumpacker..............................              60-61
    Lincoln Dixon....................................              62-65
    Harry C. Canfield................................              71-72
    John W. Boehne, Jr...............................              73-77
    Robert A. Grant..................................                 80
    Andy Jacobs, Jr..................................             94-104
Iowa:
    John A. Kasson...................................      38, 43, 47-48
    William B. Allison...............................              39-41
    John H. Gear.....................................             51, 53
    Jonathan P. Dolliver.............................              54-56
    William R. Green.................................              63-70
    C. William Ramseyer..............................              70-71
    Otha D. Wearin...................................                 75
    Lloyd Thurston...................................                 75
    Thomas E. Martin.................................              80-83
    Fred Grandy......................................            102-103
    Jim Nussle.......................................               104-
Kansas:
    Dudley C. Haskell................................                 47
    Chester I. Long..................................              56-57
    Charles Curtis...................................              58-59
    William A. Calderhead............................              60-61
    Victor Murdock...................................                 63
    Guy T. Helvering.................................              64-65
    Frank Carlson....................................              76-79
    Martha E. Keys...................................              94-95
Kentucky:
    Alexander D. Orr.................................                  3
    Christopher Greenup..............................                  4
    Thomas T. Davis..................................                  5
    John Boyle.......................................                  8
    Richard M. Johnson...............................              11-12
    Thomas Montgomery................................                 13
    David Trimble....................................              15-16
    Nathan Gaither...................................                 22
    John Pope........................................                 25
    Thomas F. Marshall...............................                 27
    Garrett Davis....................................                 28
    Charles S. Morehead..............................              30-31
    John C. Breckinridge.............................                 33
    Robert Mallory...................................                 38
    James B. Beck....................................              42-43
    Henry Watterson..................................                 44
    John G. Carlisle.................................          46-47, 51
    Joseph C.S. Blackburn............................                 48
    William C.P. Breckinridge........................              49-50
    Alexander B. Montgomery..........................              52-53
    Walter Evans.....................................              54-55
    Ollie M. James...................................                 62
    Augustus O. Stanley..............................                 63
    Frederick M. Vinson..............................              72-75
    Noble J. Gregory.................................              78-85
    John C. Watts....................................              86-92
    Jim Bunning......................................            102-105
    Ron Lewis........................................               104-
Louisiana:
    Thomas B. Robertson..............................                 14
    William L. Brent.................................              19-20
    Walter H. Overton................................                 21
    Lionel A. Sheldon................................                 43
    Randall L. Gibson................................              45-46
    Charles J. Boatner...............................                 54
    Samuel M. Robertson..............................              55-59
    Robert F. Broussard..............................                 61
    Whitmell P. Martin...............................              65-70
    Paul H. Maloney..................................          76, 78-79
    Thomas Hale Boggs, Sr............................              81-91
    Joe D. Waggonner, Jr.............................              92-95
    W. Henson Moore, III.............................              96-99
    William J. Jefferson.............................          103, 105-
    Jim McCrery......................................               103-
    Jimmy Hayes......................................            \1\ 104
    William J. Jefferson.............................               105-
Maine:
    Peleg Sprague....................................              19-20
    Francis O.J. Smith...............................                 24
    George Evans.....................................                 26
    Israel Washburn, Jr..............................                 36
    James G. Blaine..................................                 44
    William P. Frye..................................                 46
    Thomas B. Reed...................................       48-50, 52-53
    Nelson Dingley, Jr...............................          51, 54-55
    Daniel J. McGillicuddy...........................                 64
Maryland:
    William Smith....................................                  1
    Gabriel Christie.................................                  3
    William Vans Murray..............................                  4
    William Hindman..................................                4-5
    William Craik....................................                  5
    Joseph H. Nicholson..............................                6-9
    Nicholas R. Moore................................                  8
    Roger Nelson.....................................                  9
    John Montgomery..................................              10-11
    Alexander McKim..................................                 13
    Stevenson Archer.................................                 13
    Samuel Smith.....................................              14-17
    Isaac McKim......................................          18, 23-25
    Henry W. Davis...................................              34-36
    Phillip F. Thomas................................                 44
    David J. Lewis...................................              72-75
    Rogers C.B. Morton...............................              91-92
    Benjamin L. Cardin...............................               101-
Massachusetts:
    Elbridge Gerry...................................                  1
    Fisher Ames......................................                  3
    Theodore Sedgwick................................                  4
    Theophilus Bradbury..............................                  4
    Harrison Gray Otis...............................                5-6
    Samuel Sewall....................................                  5
    Isaac Parker.....................................                  5
    Bailey Bartlett..................................                  6
    Nathan Read......................................                  7
    Seth Hastings....................................                  8
    Josiah Quincy....................................                  9
    Ezekiel Bacon....................................              11-12
    Ebenezer Seaver..................................                 11
    \1\ Appointed January 25, 1996...................
    Henry Shaw.......................................                 16
    Henry W. Dwight..................................              19-21
    Benjamin Gorham..................................                 23
    Abbott Lawrence..................................             24, 26
    Richard Fletcher.................................                 25
    George N. Briggs.................................                 25
    Leverett Saltonstall.............................                 26
    Robert C. Winthrop...............................                 29
    Charles Hudson...................................                 30
    George Ashmun....................................                 31
    William Appleton.................................          32-33, 37
    Alexander De Witt................................                 34
    Nathaniel P. Banks...............................             35, 45
    Samuel Hooper....................................              37-41
    Henry L. Dawes...................................              42-43
    Chester W. Chapin................................                 44
    William A. Russell...............................              47-48
    Moses T. Stevens.................................              52-53
    Samuel W. McCall.................................              56-62
    Andrew J. Peters.................................              62-63
    Augustus P. Gardner..............................              63-65
    John J. Mitchell.................................                 63
    Allen T. Treadway................................              65-78
    Peter F. Tague...................................              67-68
    John W. McCormack................................              72-76
    Arthur D. Healey.................................                 77
    Charles L. Gifford...............................              79-80
    Angier L. Goodwin................................          80, 82-83
    James A. Burke...................................              87-95
    James M. Shannon.................................              96-98
    Brian J. Donnelly................................             99-102
    Richard E. Neal..................................               103-
Michigan:
    William A. Howard................................              34-36
    Austin Blair.....................................                 41
    Henry Waldron....................................                 43
    Omar D. Conger...................................                 46
    Jay A. Hubbell...................................                 47
    William C. Maybury...............................                 49
    Julius C. Burrows................................              50-53
    Justin R. Whiting................................              52-53
    William A. Smith.................................                 59
    Joseph W. Fordney................................              60-67
    James C. McLaughlin..............................              68-72
    Roy O. Woodruff..................................              73-82
    John D. Dingell..................................              74-84
    Victor A. Knox...................................          83, 86-88
    Thaddeus M. Machrowicz...........................              84-87
    Martha W. Griffiths..............................              87-93
    Charles E. Chamberlain...........................              91-93
    Richard F. Vander Veen...........................              93-94
    Guy Vander Jagt..................................             94-102
    William M. Brodhead..............................              95-97
    Sander M. Levin..................................               100-
    Dave Camp........................................               103-
Minnesota:
    Mark H. Dunnell..................................              46-47
    James A. Tawney..................................              54-58
    James T. McCleary................................                 59
    Winfield S. Hammond..............................              62-63
    Sydney Anderson..................................                 63
    Harold Knutson...................................              73-80
    Eugene J. McCarthy...............................              84-85
    Joseph E. Karth..................................              92-94
    Bill Frenzel.....................................             94-101
    Jim Ramstad......................................               104-
Mississippi:
    Jacob Thompson...................................                 31
    John Sharp Williams..............................              58-59
    James W. Collier.................................              63-72
    Aaron Lane Ford..................................                 77
Missouri:
    James S. Green...................................                 31
    John S. Phelps...................................              32-37
    Henry T. Blow....................................                 38
    John Hogan.......................................                 39
    Gustavus A. Finkelburg...........................                 42
    John C. Tarsney..................................              53-54
    Seth W. Cobb.....................................                 54
    Champ Clark......................................              58-61
    Dorsey W. Shackleford............................              62-63
    Clement C. Dickinson.............................  63-66, 68-70, 72-
                                                                      73
    Charles L. Faust.................................              69-70
    Richard M. Duncan................................              74-77
    Thomas B. Curtis.................................              83-90
    Frank M. Karsten.................................              84-90
    Richard A. Gephardt..............................             95-101
    Mel Hancock......................................            103-104
    Kenny Hulshof....................................               105-
Montana:
    Lee W. Metcalf...................................                 86
    James F. Battin..................................              89-91
Nebraska:
    William J. Bryan.................................              52-53
    Charles H. Sloan.................................              63-65
    Ashton C. Shallenberger..........................                 73
    Carl T. Curtis...................................              79-83
    Hal Daub.........................................             99-100
    Peter Hoagland...................................                103
    Jon Christensen..................................            104-105
Nevada:
    Francis G. Newlands..............................              56-57
    John Ensign......................................            104-105
New Hampshire:
    Samuel Livermore.................................                  1
    Nicholas Gilman..................................                3-4
    Abiel Foster.....................................                  5
    Nathaniel A. Haven...............................                 11
    Henry Hubbard....................................                 23
    Charles G. Atherton..............................              25-27
    Moses Norris, Jr.................................              28-29
    Harry Hibbard....................................              31-33
    Judd A. Gregg....................................             99-100
New Jersey:
    Lambert Cadwalader...............................                  1
    Elias Boudinot...................................                  3
    Isaac Smith......................................                  4
    Thomas Sinnickson................................                  5
    James H. Imlay...................................                  6
    William Coxe, Jr.................................                 13
    John L.N. Stratton...............................                 37
    William Hughes...................................                 62
    Isaac Bacharach..................................              66-74
    Donald H. McLean.................................              76-78
    Robert W. Kean...................................              78-85
    Henry Helstoski..................................                 94
    Frank J. Guarini.................................             96-102
    Dick Zimmer......................................                104
New Mexico:
    Clinton P. Anderson..............................                 79
New York:
    John Laurance....................................                  1
    John Watts.......................................                  3
    Ezekiel Gilbert..................................                  4
    James Cochran....................................                  5
    Hezekiah L. Hosmer...............................                  5
    Jonas Platt......................................                  6
    Killian K. Van Rensselaer........................                  7
    Joshua Sands.....................................                  8
    Erastus Root.....................................                 11
    John W. Taylor...................................                 13
    Jonathan Fisk....................................                 13
    Thomas J. Oakley.................................                 13
    James W. Wilkin..................................                 14
    James Tallmadge, Jr..............................                 15
    Albert H. Tracy..................................                 16
    Nathaniel Pitcher................................                 17
    Churchill C. Cambreleng..........................       17-18, 23-25
    Dudley Marvin....................................                 19
    Gulian C. Verplanck..............................              20-22
    Aaron Vanderpoel.................................                 26
    Millard Filmore..................................                 27
    Daniel D. Barnard................................                 28
    David L. Seymour.................................                 28
    George O. Rathbun................................                 28
    Orville Hungerford...............................                 29
    Henry Nicoll.....................................                 30
    James Brooks.....................................   31-32, 39-40, 42
    William Duer.....................................                 31
    Solomon G. Haven.................................                 33
    Russell Sage.....................................                 34
    John Kelly.......................................                 35
    William B. MacLay................................                 35
    Elbridge G. Spaulding............................              36-37
    Erastus Corning..................................                 37
    Reuben E. Fenton.................................                 38
    De Witt C. Littlejohn............................                 38
    Henry G. Stebbins................................                 38
    John V.L. Pruyn..................................                 38
    Roscoe Conkling..................................                 39
    Charles H. Winfield..............................                 39
    John A. Griswold.................................                 40
    Dennis McCarthy..................................                 41
    Ellis H. Roberts.................................              42-43
    Fernando Wood....................................              43-46
    Abram S. Hewitt..................................              48-49
    Frank Hiscock....................................              48-49
    Sereno E. Payne..................................              51-63
    Roswell P. Flower................................                 51
    William B. Cochran...............................       52-53, 58-60
    George B. McClellan..............................              55-58
    John W. Dwight...................................                 61
    Francis B. Harrison..............................              61-63
    Michael F. Conry.................................                 64
    George W. Fairchild..............................              64-65
    John F. Carew....................................              65-71
    Luther W. Mott...................................              66-67
    Alanson B. Houghton..............................                 67
    Ogden L. Mills...................................              67-69
    Frank Crowther...................................              68-77
    Thaddeus C. Sweet................................                 70
    Frederick M. Davenport...........................              70-71
    Thomas H. Cullen.................................              71-78
    Christopher D. Sullivan..........................              72-76
    Daniel A. Reed...................................              73-86
    Walter A. Lynch..................................              78-81
    Eugene J. Keogh..................................              82-89
    Albert H. Bosch..................................                 86
    Steven B. Derounian..............................              87-88
    Barber B. Conable, Jr............................              90-98
    Jacob H. Gilbert.................................              90-91
    Hugh L. Carey....................................              91-93
    Otis G. Pike.....................................              93-95
    Charles B. Rangel................................                94-
    Thomas J. Downey.................................             96-102
    Raymond J. McGrath...............................             99-102
    Michael R. McNulty...............................      \2\ 103, 104-
    Amo Houghton.....................................               103-
North Carolina:
    William B. Grove.................................                  3
    Thomas Blount....................................                4-5
    Robert Williams..................................                  5
    David Stone......................................                  6
    James Holland....................................                  7
    Willis Alston....................................          10-11, 13
    William Gaston...................................              13-14
    Abraham Rencher..................................             25, 27
    Henry W. Conner..................................                 26
    James I. McKay...................................              28-30
    Edward Stanly....................................                 32
    William M. Robbins...............................                 45
    Edward W. Pou....................................              60-61
    Claude Kitchin...................................              62-67
    Robert L. Doughton...............................              69-82
    James G. Martin..................................              94-98
North Dakota:
    Martin N. Johnson................................              54-55
    George M. Young..................................              66-68
    Byron L. Dorgan..................................             98-102
    Earl Pomeroy.....................................               107-
Ohio:
    William Creighton, Jr............................                 13
    Thomas R. Ross...................................                 16
    Thomas Corwin....................................              23-24
    Thomas L. Hamer..................................                 25
    Taylor Webster...................................                 25
    Samson Mason.....................................              26-27
    John B. Weller...................................                 28
    Samuel F. Vinton.................................              29-31
    Lewis D. Campbell................................              34-35
    John Sherman.....................................                 36
    Valentine B. Horton..............................                 37
    George H. Pendleton..............................                 38
    James A. Garfield................................          39, 44-46
    Robert C. Schenck................................              40-41
    Charles Foster...................................                 43
    Milton Sayler....................................                 45
    William McKinley, Jr.............................       46-47, 49-51
    Frank H. Hurd....................................                 48
    Charles H. Grosvenor.............................              53-59
    Nicholas Longworth...............................       60-62, 64-67
    Timothy T. Ansberry..............................              62-63
    Alfred G. Allen..................................                 64
    George White.....................................                 65
    Charles C. Kearns................................              68-71
    Charles F. West..................................                 73
    Thomas A. Jenkins................................              73-85
    Arthur P. Lamneck................................              74-75
    Stephen M. Young.................................                 81
    Jackson E. Betts.................................              86-92
    Donald D. Clancy.................................              93-94
    Charles A. Vanik.................................              89-96
    Bill Gradison....................................             95-103
    Don J. Pease.....................................             97-102
    Rob Portman......................................               104-
Oklahoma:
    Thomas A. Chandler...............................                 67
    James V. McClintic...............................                 73
    Wesley E. Disney.................................              74-78
    James R. Jones...................................              94-99
    Bill K. Brewster.................................                103
    Wes Watkins......................................            105-107
Oregon:
    William R. Ellis.................................                 61
    Willis C. Hawley.................................              65-72
    Albert C. Ullman.................................              87-96
    Mike Kopetski....................................                103
Pennsylvania:
    Thomas Fitzsimons................................               1, 3
    Albert Gallatin..................................                4-6
    Henry Woods......................................                  6
    John Smilie......................................         6-7, 10-12
    Joseph Clay......................................                8-9
    John Rea.........................................                 11
    Jonathan Roberts.................................              12-13
    Samuel D. Ingham.................................          13-14, 18
    John Sergeant....................................             15, 25
    John Tod.........................................                 17
    John Gilmore.....................................              21-22
    Horace Binney....................................                 23
    Richard Biddle...................................                 26
    Joseph R. Ingersoll..............................          24, 27-29
    James Pollock....................................                 30
    Moses Hampton....................................                 31
    J. Glancy Jones..................................             32, 35
    John Robbins.....................................                 33
    James H. Campbell................................                 34
    Henry M. Phillips................................                 35
    Thaddeus Stevens.................................              36-38
    James K. Moorhead................................              39-40
    William D. Kelley................................              41-50
    Russell Errett...................................                 47
    Samuel J. Randall................................                 47
    William L. Scott.................................                 50
    Thomas M. Bayne..................................                 51
    John Dalzell.....................................              52-62
    A. Mitchell Palmer...............................              62-63
    J. Hampton Moore.................................              63-66
    John J. Casey....................................             64, 68
    Henry W. Watson..................................              66-73
    Harris J. Bixler.................................                 69
    Harry A. Estep...................................              70-72
    Thomas C. Cochran................................                 73
    Joshua T. Brooks.................................                 74
    Patrick J. Boland................................              76-77
    Benjamin Jarrett.................................              76-77
    James P. McGranery...............................              77-78
    Herman P. Eberharter.............................              78-85
    Richard M. Simpson...............................              78-86
    William J. Green, Jr.............................              86-88
    John A. Lafore, Jr...............................                 86
    Walter M. Mumma..................................              86-87
    George M. Rhodes.................................              88-90
    Herman T. Schneebeli.............................              87-94
    William J. Green, III............................              90-94
    Raymond F. Lederer...............................              95-96
    Dick Schulze.....................................             95-102
    Donald A. Bailey.................................                 97
    William J. Coyne.................................             99-107
    Rick Santorum....................................                103
    Philip S. English................................               104-
Rhode Island:
    Benjamin Bourne..................................                3-4
    Francis Malbone..................................                  4
    Elisha R. Potter.................................                  4
    Christopher G. Champlin..........................                  5
    John Brown.......................................                  6
    Joseph Stanton, Jr...............................                  8
    Daniel L.D. Granger..............................              59-60
    George F. O'Shaunessy............................                 65
    Richard S. Aldrich...............................              69-72
    Aime J. Forand...................................              78-86
South Carolina:
    William L. Smith.................................                3-5
    Robert Goodloe Harper............................                5-6
    Abraham Nott.....................................                  6
    David R. Williams................................                  9
    Langdon Cheves...................................                 12
    Theodore Gourdin.................................                 13
    William Lowndes..................................              13-15
    John Taylor......................................                 14
    Thomas R. Mitchell...............................                 17
    George McDuffie..................................              18-22
    R. Barnwell Rhett................................              25-26
    Francis W. Pickens...............................                 27
    John L. McLaurin.................................              54-55
    Ken Holland......................................              95-97
    Carroll A. Campbell, Jr..........................              98-99
Tennessee:
    Andrew Jackson...................................                  4
    William C.C. Claiborne...........................                  5
    William Dickson..................................               7, 9
    George W. Campbell...............................                 10
    Bennett H. Henderson.............................                 14
    Francis Jones....................................              16-17
    James K. Polk....................................              22-23
    Cave Johnson.....................................                 24
    George W. Jones..................................              31-34
    Horace Maynard...................................          37, 40-42
    Benton McMillan..................................              49-55
    James D. Richardson..............................              55-57
    Cordell Hull.....................................       62-66, 68-71
    Edward E. Eslick.................................                 72
    Jere Cooper......................................              72-85
    Howard H. Baker..................................              83-88
    James B. Frazier, Jr.............................              85-87
    Ross Bass........................................                 88
    Richard H. Fulton................................              89-94
    John J. Duncan...................................             92-100
    Harold E. Ford...................................             94-104
    Don Sundquist....................................            101-103
    John S. Tanner...................................               105-
Texas:
    John Hancock.....................................                 44
    Roger Q. Mills...................................          46, 48-51
    Joseph W. Bailey.................................                 55
    Samuel B. Cooper.................................              56-58
    Choice B. Randell................................              60-62
    John N. Garner...................................              63-71
    Morgan G. Sanders................................              72-75
    Milton H. West...................................              76-80
    Jesse M. Combs...................................              81-82
    Frank N. Ikard...................................              84-87
    Bruce Alger......................................              86-88
    Clark W. Thompson................................              87-89
    George H. W. Bush................................              90-91
    Omar T. Burleson.................................              90-95
    Bill Archer......................................             93-106
    J.J. Pickle......................................             94-103
    Kent R. Hance....................................              97-98
    Michael A. Andrews...............................             99-103
    Sam Johnson......................................               104-
    Greg Laughlin....................................            \3\ 104
    Lloyd Doggett....................................               104-
    Kevin Brady......................................               107-
Utah:
    Walter K. Granger................................                 82
Vermont:
    Daniel Buck......................................                  4
    Israel Smith.....................................            3, 4, 7
    Lewis R. Morris..................................                  5
    James Fisk.......................................             10, 12
    Horace Everett...................................                 25
    Justin S. Morrill................................              35-39
Virginia:
    James Madison....................................            1, 3, 4
    William B. Giles.................................                  5
    Richard Brent....................................                  5
    Walter Jones.....................................                  5
    Leven Powell.....................................                  6
    John Nicholas....................................                  6
    John Randolph....................................            7-9, 20
    James M. Garnett.................................                  9
    John W. Eppes....................................          10-11, 13
    William A. Burwell...............................          12, 14-16
    James Pleasants..................................              12-13
    John Tyler.......................................                 16
    Andrew Stevenson.................................              17-19
    Alexander Smyth..................................              20-21
    Philip P. Barbour................................                 21
    Mark Alexander...................................              21-22
    George Loyall....................................              23-24
    John W. Jones....................................              25-27
    John M. Botts....................................                 27
    Thomas W. Gilmer.................................                 27
    Thomas H. Bayly..................................             28, 31
    George C. Dromgoole..............................              28-29
    James McDowell...................................                 30
    John Letcher.....................................              34-35
    John S. Millson..................................                 36
    John R. Tucker...................................              44-47
    Claude A. Swanson................................              55-58
    A. Willis Robertson..............................              75-79
    Burr P. Harrison.................................          82, 84-87
    W. Pat Jennings..................................              88-89
    Joel T. Broyhill.................................              88-93
    Joseph L. Fisher.................................              94-96
    L.F. Payne.......................................            103-104
Washington:
    Francis W. Cushman...............................                 61
    Lindley H. Hadley................................              66-72
    Samuel B. Hill...................................              71-74
    Knute Hill.......................................                 77
    Otis H. Holmes...................................              80-85
    Rodney D. Chandler...............................            100-102
    Jim McDermott....................................               102-
    Jennifer Dunn....................................               104-
West Virginia:
    William L. Wilson................................          50, 52-53
    Joseph H. Gaines.................................              60-61
    George M. Bowers.................................              66-67
    Hubert S. Ellis..................................                 80
Wisconsin:
    Charles Billinghurst.............................                 34
    Robert M. La Follette............................                 51
    Joseph W. Babcock................................              57-59
    James A. Frear...................................       66-68, 71-73
    Thaddeus F.B. Wasielewski........................              78-79
    John W. Byrnes...................................              80-92
    William A. Steiger...............................              94-95
    Jim Moody........................................            100-102
    Gerald D. Kleczka................................               103-
    Paul Ryan........................................              107-
------------------------------------------------------------------------
\1\ Appointed January 25, 1996.
\2\ Appointed January 25, 1996.
\3\ Appointed July 10, 1995.








                2. COMMITTEE MEMBERSHIP, 107TH CONGRESS

                      Committee on Ways and Means
                      one hundred seventh congress

                   BILL THOMAS, California, Chairman
PHILIP M. CRANE, Illinois            CHARLES B. RANGEL, New York
E. CLAY SHAW, Jr., Florida           FORTNEY PETE STARK, California
NANCY L. JOHNSON, Connecticut        ROBERT T. MATSUI, California
AMO HOUGHTON, New York               WILLIAM J. COYNE, Pennsylvania
WALLY HERGER, California             SANDER M. LEVIN, Michigan
JIM McCRERY, Louisiana               BENJAMIN L. CARDIN, Maryland
DAVE CAMP, Michigan                  JIM McDERMOTT, Washington
JIM RAMSTAD, Minnesota               GERALD D. KLECZKA, Wisconsin
JIM NUSSLE, Iowa                     JOHN LEWIS, Georgia
SAM JOHNSON, Texas                   RICHARD E. NEAL, Massachusetts
JENNIFER DUNN, Washington            MICHAEL R. McNULTY, New York
MAC COLLINS, Georgia                 WILLIAM J. JEFFERSON, Louisiana
ROB PORTMAN, Ohio                    JOHN S. TANNER, Tennessee
PHIL ENGLISH, Pennsylvania           XAVIER BECERRA, California
WES WATKINS, Oklahoma                KAREN L. THURMAN, Florida
J.D. HAYWORTH, Arizona               LLOYD DOGGETT, Texas
JERRY WELLER, Illinois               EARL POMEROY, North Dakota
KENNY C. HULSHOF, Missouri
SCOTT McINNIS, Colorado
RON LEWIS, Kentucky
MARK FOLEY, Florida
KEVIN BRADY, Texas
PAUL RYAN, Wisconsin

                                
