[House Report 108-810]
[From the U.S. Government Publishing Office]




                                                 Union Calendar No. 495
108th Congress 
 2d Session             HOUSE OF REPRESENTATIVES             Report No.
                                                                108-810
_______________________________________________________________________

                     REPORT ON THE LEGISLATIVE AND

                          OVERSIGHT ACTIVITIES

                                 of the

                      COMMITTEE ON WAYS AND MEANS

                               During the

                             108TH CONGRESS




January 3, 2005.--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               SANDER M. LEVIN, Michigan
WALLY HERGER, California             BENJAMIN L. CARDIN, Maryland
JIM McCRERY, Louisiana               JIM McDERMOTT, Washington
DAVE CAMP, Michigan                  GERALD D. KLECZKA, Wisconsin
JIM RAMSTAD, Minnesota               JOHN LEWIS, Georgia
JIM NUSSLE, Iowa                     RICHARD E. NEAL, Massachusetts
SAM JOHNSON, Texas                   MICHAEL R. McNULTY, New York
JENNIFER DUNN, Washington             WILLIAM J. JEFFERSON, Louisiana
MAC COLLINS, Georgia                 JOHN S. TANNER, Tennessee
ROB PORTMAN, Ohio                    XAVIER BECERRA, California
PHIL ENGLISH, Pennsylvania           LLOYD DOGGETT, Texas
J. D. HAYWORTH, Arizona              EARL POMEROY, North Dakota
JERRY WELLER, Illinois               MAX SANDLIN, Texas
KENNY C. HULSHOF, Missouri           STEPHANIE TUBBS JONES, Ohio
SCOTT McINNIS, Colorado
RON LEWIS, Kentucky
MARK FOLEY, Florida
KEVIN BRADY, Texas
PAUL RYAN, Wisconsin
ERIC CANTOR, Virginia













                         LETTER OF TRANSMITTAL

                              ----------                              

                     U.S. House of Representatives,
                               Committee on Ways and Means,
                                   Washington, DC, January 3, 2005.
Hon. Jeff Trandahl,
Office of the Clerk,
House of Representatives, 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 108th Congress.
            Sincerely,
                                             Bill Thomas, Chairman.












                            C O N T E N T S

                              ----------                              
                                                                   Page
Transmittal Letter...............................................   III
Foreword.........................................................   VII
 I. Legislative Activity Review.......................................1
        A. Legislative Review of Tax, Trust Fund, and Pension 
            Issues...............................................     1
        B. Legislative Review of Trade Issues....................    38
        C. Legislative Review of Health Issues...................    64
        D. Legislative Review of Social Security Issues..........    68
        E. Legislative Review of Human Resources Issues..........    71
        F. Legislative Review of Debt Issues.....................    78
II. Oversight Activity Review........................................78
        A. Oversight Agenda......................................    78
        B. Actions taken and recommendations made with respect to 
            oversight plan.......................................    87
        C. Additional oversight activities, and any 
            recommendations or actions taken.....................   118
Appendix I. Jurisdiction of the Committee on Ways and Means......   121
Appendix II. Historical Note.....................................   140
Appendix III. Statistical Review of the Activities of the 
  Committee on Ways and Means....................................   146
Appendix IV. Chairmen of the Committee on Ways and Means and 
  Membership of the Committee from the 1st through the 108th 
  Congresses.....................................................   150







                                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 108th 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 108th 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) 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 108th 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 108th 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 108th Congress is as follows:

                         Subcommittee on Trade

    PHILIP M. CRANE, Illinois, 
             Chairman

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

                       Subcommittee on Oversight

 AMO HOUGHTON, New York, Chairman

EARL POMEROY, North Dakota           ROB PORTMAN, Ohio
GERALD D. KLECZKA, Wisconsin         JERRY WELLER, Illinois
MICHAEL R. McNULTY, New York         SCOTT McINNIS, Colorado
JOHN S. TANNER, Tennessee            MARK FOLEY, Florida
MAX SANDLIN, Texas                   SAM JOHNSON, Texas
                                     PAUL RYAN, Wisconsin
                                     ERIC CANTOR, Virginia

                         Subcommittee on Health

  NANCY L. JOHNSON, Connecticut, 
             Chairman

FORTNEY PETE STARK, California       JIM McCRERY, Louisiana
GERALD D. KLECZKA, Wisconsin         PHILIP M. CRANE, Illinois
JOHN LEWIS, Georgia                  SAM JOHNSON, Texas
JIM McDERMOTT, Washington            DAVE CAMP, Michigan
LLOYD DOGGETT, Texas                 JIM RAMSTAD, Minnesota
                                     PHIL ENGLISH, Pennsylvania
                                     JENNIFER DUNN, Washington

                    Subcommittee on Social Security

   E. CLAY SHAW, Jr., Florida, 
             Chairman

ROBERT T. MATSUI, California         SAM JOHNSON, Texas
BENJAMIN L. CARDIN, Maryland         MAC COLLINS, Georgia
EARL POMEROY, North Dakota           J.D. HAYWORTH, Arizona
XAVIER BECERRA, California           KENNY C. HULSHOF, Missouri
STEPHANIE TUBBS JONES, Ohio          RON LEWIS, Georgia
                                     KEVIN BRADY, Texas
                                     PAUL RYAN, Wisconsin

                    Subcommittee on Human Resources

WALLY HERGER, California, Chairman

BENJAMIN L. CARDIN, Maryland         NANCY L. JOHNSON, Connecticut
FORTNEY PETE STARK, California       SCOTT McINNIS, Colorado
SANDER M. LEVIN, Michigan            JIM McCRERY, Louisiana
JIM McDERMOTT, Washington            DAVE CAMP, Michigan
CHARLES B. RANGEL, New York          PHIL ENGLISH, Pennsylvania
                                     RON LEWIS, Georgia
                                     ERIC CANTOR, Virginia

                Subcommittee on Select Revenue Measures

 JIM McCRERY, Louisiana, Chairman

MICHAEL R. McNULTY, New York         J.D. HAYWORTH, Arizona
WILLIAM J. JEFFERSON, Louisiana      JERRY WELLER, Illinois
MAX SANDLIN, Texas                   RON LEWIS, Georgia
LLOYD DOGGETT, Texas                 MARK FOLEY, Florida
STEPHANIE TUBBS JONES, Ohio          KEVIN BRADY, Texas
                                     PAUL RYAN, Wisconsin
                                     MAC COLLINS, Georgia

    The Committee on Ways and Means submits its report on its 
legislative and oversight activities for the 108th Congress 
pursuant to the above stated provisions of the Rules of the 
House. Section I of the report describes the Committee's 
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 Committee's 
oversight activities. It includes a copy of the Committee's 
Oversight Agenda, adopted in open session on January 29, 2003, 
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--108th Congresses.












                                                 Union Calendar No. 495
108th Congress                                               Report No.
                        HOUSE OF REPRESENTATIVES
 2d Session                                                     108-810

======================================================================
 
REPORT ON THE LEGISLATIVE AND OVERSIGHT ACTIVITIES OF THE COMMITTEE ON 
         WAYS AND MEANS DURING THE ONE HUNDRED EIGHTH CONGRESS

                                _______
                                

                 January 3, 2005.--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 108TH CONGRESS

a. Jobs and Growth Tax Relief Reconciliation Act of 2003 (P.L. 108-27)

    On February 4 and 5, 2003, the Committee held hearings to 
discuss the President's fiscal 2004 budget proposals, including 
the President's economic growth proposals. On February 27, 
2003, Chairman Thomas introduced H.R. 2, the ``Jobs and Growth 
Reconciliation Tax Act of 2003,'' which contained the 
President's economic growth proposals. On the same day, Senator 
Nickles introduced an identical bill, S. 2 in the Senate.
    On March 4, 5, 6, and 11, 2003, the Ways and Means 
Committee held hearings to discuss H.R. 2 and the economic 
growth proposals contained in the President's Fiscal Year 2004 
budget. The Committee ordered favorably reported H.R. 2, as 
amended, on May 6, 2003. The bill, as amended, passed the House 
on May 9, 2003, by a vote of 222-203, and passed the Senate 
with an amendment on May 15, 2003, by a vote of 51-49. The 
conference report on H.R. 2 passed the House by a vote of 231-
200 vote, and it passed the Senate on May 23, 2003, by a vote 
of 51-50. The bill was signed into law by the President on May 
28, 2003 (P.L. 108-27).
    The President made the following economic: to accelerate 
the child credit increase to $1,000, provide marriage penalty 
relief by accelerating the 15-percent individual income tax 
bracket expansion and standard deduction expansion for married 
persons filing joint returns to twice that of single persons 
filing individually, accelerate the 10-percent individual tax 
rate bracket expansion, accelerate the implementation of the 
15-percent, 25-percent, 33-percent, and 35-percent regular tax 
rates, provide individual alternative minimum tax relief, 
increase the amount that small businesses can deduct under 
Internal Revenue Code (Code) section 179 from $25,000 to 
$75,000, and eliminate the double taxation of corporate 
earnings by eliminating the tax on certain dividends paid to 
individuals.
    The House-passed bill contained temporary accelerations of 
the President's individual income tax proposals, increased the 
amount that small businesses can deduct under Code section 179 
from $25,000 to $100,000 on a temporary basis, replaced the 
President's dividends proposal with a reduction of the 
individual dividend and capital gains tax rates to 15 percent 
(5 percent for the lowest two individual income tax brackets), 
added an increase and extension of the 30-percent bonus 
depreciation to 50 percent, and added a provision to extend the 
carryback of net operation losses from 2 to 5 years.
    The Senate-passed bill contained phased-in and temporary 
accelerations of the President's individual income tax 
proposals, the President's Code section 179 expensing proposal, 
a phased-in version of the President's dividend proposal that 
expired after three years, and over 80 miscellaneous provisions 
and revenue raisers.
    The bill signed by the President largely adopted the House 
passed bill and is summarized as follows:
    Title I of the Conference Agreement on H.R. 2 increases the 
amount of the child credit from $600 to $1,000 for 2003 and 
2004. For 2003, the increased amount of the child credit ($400) 
was delivered in rebate checks that were mailed to eligible 
taxpayers during the 2003 calendar year to the greatest extent 
possible. For 2003 and 2004, the bill provides marriage penalty 
relief by increasing the standard deduction for married 
taxpayers filing jointly to twice that of an individual filing 
a single return and by increasing the size of the 15-percent 
regular income tax bracket for married taxpayers filing joint 
returns to twice that of single taxpayers. The bill accelerates 
scheduled individual income tax rate reductions for 2003 and 
2004 by expanding the 10-percent regular income tax bracket for 
individuals from $6,000 to $7,000 and for married persons from 
$12,000 to $14,000. The bill also accelerates, to 2003, the 
implementation of the reduced 15-percent, 25-percent, 33-
percent and 35-percent regular tax rates. Finally, for 2003 and 
2004, the bill increases the alternative minimum tax exemption 
amount for married taxpayers filing jointly to $58,000, and for 
single taxpayers to $40,250.
    Title II of the bill provides growth incentives for 
businesses. The bill extends the additional 30-percent first 
year depreciation deduction provided by the ``Job Creation and 
Workers Assistance Act of 2002'' for one year, through December 
31, 2004. The additional 30-percent first year depreciation was 
increased to 50 percent for property acquired after May 5, 
2003, and before January 1, 2005. Additionally, for 2003, 2004, 
and 2005, the bill increases from $25,000 to $100,000 the 
maximum dollar amount that may be deducted under Code section 
179. The bill also doubles the eligible capital expenditures 
amount from $200,000 to $400,000. Both the maximum deduction 
amount and the capital expenditure threshold are indexed for 
inflation.
    Title III of the bill, for taxable years after 2002 and 
before 2009, reduces the 10-percent and 20-percent tax rates on 
capital gains to 5 and 15 percent, respectively. The 5-percent 
rate is reduced to zero in 2008. For taxable years after 2002 
and before 2009, dividends received by individuals are taxed at 
the new capital gains rates of 5 (zero in 2008) and 15 percent. 
The lower capital gains and dividend tax rates apply to both 
regular tax and alternative minimum tax (AMT).
    Title IV of the Act provides relief to the states by 
establishing a temporary fund to provide $10 billion divided 
among the states to be used for essential government services, 
and $10 billion for Medicaid.
    Title V of the Act provides that 25 percent of the 
estimated corporate tax payments that were due on September 15, 
2003, are not required to be paid before October 1, 2003.

b. Surface Transportation Extension Act of 2003 (P.L. 108-88)

    Representative Don Young introduced H.R. 3087, the 
``Surface Transportation Extension Act of 2003,'' on September 
16, 2003. On September 24, 2003, the House passed the bill, as 
amended, under suspension of the rules. On September 26, 2003, 
the Senate passed H.R. 3087, without amendment, by unanimous 
consent. The President signed the bill into law on September 
30, 2003 (P.L. 108-88).
    The bill included an extension of highway, highway safety, 
motor carrier safety, transit, and other programs funded out of 
the Highway Trust Fund pending enactment of a law reauthorizing 
the Transportation Equity Act for the 21st Century (TEA-21). 
Although it is a transportation bill, there are two tax-related 
provisions in the bill. The bill extends funding for projects 
to curb highway-use tax evasion until March 1, 2004. The bill 
also extends authorization of the use of the Highway Trust 
Fund, the Mass Transit Account (a separate account in the 
Highway Trust Fund), and the Aquatic Resources Trust Fund for 
obligations under TEA-21 before March 1, 2004.

c. Military Family Tax Relief Act of 2003 (P.L. 108-121)

    Chairman Thomas introduced H.R. 878, the ``Armed Forces Tax 
Fairness Act of 2003,'' on February 25, 2003. The bill was 
favorably reported by the Committee, by voice vote on February 
27, 2003. On March 18, 2003, Chairman Thomas introduced H.R. 
1307, which included provisions similar to those found in H.R. 
878. The bill passed the House under suspension of the rules on 
March 20, 2003. On April 8, 2003, Chairman Thomas introduced 
H.R. 1664, which included many provisions from H.R. 878 and 
H.R. 1307. H.R. 1664 passed the House under suspension of the 
rules by voice vote on April 9, 2003. Representative Renzi 
introduced H.R. 3365 on October 21, 2003. H.R. 3365 contained 
many of the provisions from H.R. 878 and H.R. 1664. H.R. 3365 
was passed by the House under suspension of the rules by a vote 
of 413-0. The Senate passed the bill by unanimous consent on 
November 3, 2003. The President signed the bill into law on 
November 11, 2003 (P.L. 108-121).
    H.R. 3365, the ``Military Family Tax Relief Act of 2003,'' 
provides tax benefits for military personnel and their 
families. Under present law, individual taxpayers may exclude 
up to $250,000 ($500,000 in the case of joint return filers) of 
the capital gain on the sale or exchange of a principal 
residence. The taxpayer must have owned and used the residence 
as a principal residence for at least two of the five years 
ending on the sale or exchange. The bill allows taxpayers in 
the uniformed services or the Foreign Service of the United 
States to expand the five-year ownership test period to ten 
years.
    The bill increases the amount of certain death gratuity 
payments under Title 10 of the United States Code to $12,000, 
and it provides for an exclusion from gross income for such 
death gratuity payments up to $12,000. Another exemption from 
gross income is provided for amounts received from the 
Department of Defense Homeowners Assistance Program. The bill 
expands combat zone filing rules for contingency payments and 
modifies membership requirements for the tax exemption of 
certain veterans' organizations. The bill clarifies that 
members of the uniformed services may exclude from gross 
income, as a qualified military benefit, dependent-care 
assistance provided under a dependent-care assistance program.
    Under present law, the earnings portion of a distribution 
from an education savings account or a qualified tuition 
program that is includable in income is generally subject to an 
additional 10 percent tax. Under the bill, this additional tax 
does not apply to distributions made as a result of the 
attendance of the beneficiary at the United States Military 
Academy, the United States Naval Academy, the United States 
Coast Guard Academy, the United States Air Force Academy, or 
the United States Merchant Marine Academy.
    H.R. 3365 suspends the tax-exempt status of an organization 
that is exempt under Code section 501(a) for any period in 
which the organization is designated or identified by U.S. 
Federal authorities as a terrorist organization or supporter of 
terrorism. The bill also allows a deduction from gross income 
for overnight travel expenses of National Guard and Military 
Reserve members. The bill extends income tax relief, the 
exclusion of death benefits and estate tax relief to astronauts 
who lose their lives on a space mission. Finally, the bill 
extends customs user fees through March 1, 2005.

d. Medicare Prescription Drug, Improvement, and Modernization Act of 
        2003 (P.L. 108-173)

    H.R. 1, the ``Medicare Prescription Drug, Improvement, and 
Modernization Act of 2003'' was signed by the President on 
December 8, 2003 (P.L. 108-173). The bill focused on the 
Medicare program. However Title XII of the bill did contain a 
few tax provisions to provide health savings incentives. (H.R. 
1 is discussed in further detail below in Section C: 
Legislative Review of Health Issues.)
    Title XII of H.R. 1 provides for the creation of Health 
Savings Accounts. Health Savings Accounts allow individual 
taxpayers to set up accounts, similar to individual retirement 
arrangements, from which medical expenses on behalf of the 
taxpayer and their spouse and dependents may be paid. The bill 
also adds special subsidy payments to the list of income 
sources that are excluded from income. Finally, the bill 
provides an exception to information reporting requirements for 
flexible spending arrangements and health reimbursement 
arrangements that are treated as employer-provided coverage.

e. Vision 100--Century of Aviation Reauthorization Act (P.L. 108-176)

    Representative Don Young introduced H.R. 2115, the ``Vision 
100--Century of Aviation Reauthorization Act,'' on May 15, 
2003. The bill passed the House by vote of 418-8 on June 11, 
2003. The version passed by the House included an extension of 
expenditure authority from the Airport and Airway Trust Fund. 
The Senate passed H.R. 2115 with an amendment by a vote of 94-
0. The conference report to accompany H.R. 2115 passed the 
House on October 30, 2003, by vote of 211-207, and it passed 
the Senate by unanimous consent on November 21, 2003. The 
President signed the bill into law on December 12, 2003 (P.L. 
108-176).
    Title IX of H.R. 2115 extended expenditure authority from 
the Airport and Airway Trust Fund from October 1, 2003, to 
October 1, 2007. With respect to the airline ticket tax, which 
is indexed for inflation, the bill clarifies that for amounts 
paid for transportation before the beginning of the year in 
which the transportation is to occur, the rate of tax is the 
rate in effect for the calendar year in which the amount is 
paid.

f. Social Security Protection Act of 2003 (P.L 108-203)

    H.R. 743, the ``Social Security Protection Act of 2003,'' 
was introduced by Representative Clay Shaw on February 12, 
2003. A motion to suspend the rules and pass the bill failed on 
March 5, 2003. H.R. 743, as amended, was reported favorably out 
of the Committee on March 13, 2003. The bill passed the House 
on April 2, 2003, and it passed the Senate on December 9, 2003. 
The bill was signed into law by the President on March 2, 2004 
(P.L. 108-203).
    H.R. 743 clarifies that self-employment income of an 
individual shall be exempt from Federal Insurance Contribution 
Act (FICA) and Self-employment Contributions Act (SECA) to the 
extent that such self-employment income is subject exclusively 
to the laws applicable to the social security system of a 
foreign county in cases covered by an agreement with such 
country. The only other tax-related provisions of the bill make 
technical corrections to outdated references in the Code. This 
bill is described in greater detail in the Social Security 
section of this report.

g. Surface Transportation Extension Act of 2004 (P.L. 108-202)

    Representative Don Young introduced H.R. 3850, the 
``Surface Transportation Extension Act of 2004,'' on February 
26, 2004. The same day, the House passed the bill without 
objection. The Senate passed H.R. 3850 without amendment by 
unanimous consent the next day. The President signed the bill 
into law on February 29, 2004 (P.L. 108-202).
    The bill provides an extension of highway, highway safety, 
motor carrier safety, transit, and other programs funded out of 
the Highway Trust Fund pending enactment of a law reauthorizing 
the Transportation Equity Act for the 21st Century (TEA-21). 
There are two tax-related provisions in the bill. The bill 
extends funding for expenditures to curb highway use tax 
evasion until May 1, 2004. The bill also extends authorization 
of the use of the Highway Trust Fund, the Mass Transit Account, 
and the Aquatic Resources Trust Fund for obligations under TEA-
21 before May 1, 2004.

h. Pension Funding Equity Act of 2004 (P.L. 108-218)

    Representative John Boehner introduced H.R. 3108, the 
``Pension Funding Equity Act of 2003,'' on September 17, 2003. 
The bill included provisions similar to those contained in (1) 
H.R. 1776, which was approved by the Committee on July 18, 
2003, and (2) H.R. 3521, which passed the House on November 20, 
2003. H.R. 3108 passed the House on October 8, 2003. The 
conference report was agreed to by the House on April 2, 2004, 
and by the Senate on April 8, 2004. The bill was signed by the 
President on April 10, 2004 (P.L. 108-218).
    The bill amends the Internal Revenue Code and the Employee 
Retirement Income Security Act of 1974 (ERISA) to temporarily 
replace the 30-year Treasury rate with a more accurate interest 
rate based on conservatively invested long-term corporate 
bonds. The temporary replacement of the 30-year Treasury rate 
is put in place for two years to give Congress time to find a 
permanent replacement in the context of comprehensive funding 
reform.
    Under prior law, employers were required to use the 
interest rate on 30-year Treasury securities to calculate their 
current liability for pension funding and deduction purposes 
and in determining variable premium payments to the Pension 
Benefit Guaranty Corporation (PBGC). The rate on these 
securities had fallen dramatically after they were discontinued 
in 2001. Use of the artificially low rates made pension plans 
appear underfunded, requiring companies to make inflated 
pension contributions and PBGC premium payments.
    The bill also requires multi-employer plans to provide 
annual funding notices to participants, union representatives, 
and the PBGC informing them of the plan's financial status, the 
rules governing insolvent plans, and a description of the 
benefits guaranteed by the PBGC and the limits on such 
guarantees.
    In addition, the bill provides funding relief for single- 
and multi-employer pension plans. The bill allows alternative 
deficit reduction contributions for airlines, steel companies, 
and a certain 501(c)(5) pension plan. It provides a 2-year 
extension of transitional funding rules for an interstate bus 
company. It allows certain multi-employer pension plans to 
defer for up to two years a portion (up to 80 percent) of 
certain charges that would otherwise be made to the funding 
standard account in order to amortize net operating losses for 
2002.
    In addition, H.R. 3108 permanently repealed Code section 
809 relating to the taxation of mutual life insurance 
companies. It extended for five years the ability to transfer 
excess pension assets from a defined benefit pension plan to 
retiree health accounts. It modified the definition of 
insurance company for property and casualty insurance company 
rules. Finally, it modified the requirements for a property and 
casualty insurance company to be eligible for tax-exempt status 
under Code section 501(c)(15).

i. Surface Transportation Extension Act of 2004, Part II (P.L. 108-224)

    On April 27, 2004, Representative Thomas Petri introduced 
H.R. 4219, the ``Surface Transportation Extension Act of 2004, 
Part II.'' The next day, the House passed the bill on a motion 
to suspend the rules by a vote of 410-0. The Senate passed H.R. 
4219, without amendment, by unanimous consent on April 29, 
2004. The President signed the bill into law on April 30, 2004 
(P.L. 108-224).
    The bill provides an extension of highway, highway safety, 
motor carrier safety, transit, and other programs funded out of 
the Highway Trust Fund pending enactment of a law reauthorizing 
the Transportation Equity Act of the 21st Century (TEA-21). 
There are two tax related provisions in the bill. The bill 
extends funding for expenditures to curb highway use tax 
evasion until July 1, 2004. The bill also extends authorization 
of the use of the Highway Trust Fund, the Mass Transit Account, 
and the Aquatic Resources Trust Fund for obligations under TEA-
21 before July 1, 2004.

j. Surface Transportation Extension Act of 2004, Part III (P.L. 108-
        263)

    On June 22, 2004, Representative Don Young introduced H.R. 
4635, the ``Surface Transportation Extension Act of 2004, Part 
III.'' The next day, the House passed the bill under suspension 
of the rules by a vote of 418-0, and the Senate passed it, 
without amendment, by unanimous consent. The President signed 
the bill into law on June 30, 2004 (P.L. 108-263).
    The bill provides an extension of highway, highway safety, 
motor carrier safety, transit, and other programs funded out of 
the Highway Trust Fund pending enactment of a law reauthorizing 
the Transportation Equity Act of the 21st Century (TEA-21). 
There are two tax-related provisions in the bill. The bill 
extends funding for expenditures to curb highway use tax 
evasion until August 1, 2004. The bill also extends 
authorization of the use of the Highway Trust Fund, the Mass 
Transit Account, and the Aquatic Resources Trust Fund for 
obligations under TEA-21 before August 1, 2004.

k. Surface Transportation Extension Act of 2004, Part IV (P.L. 108-280)

    On July 22, 2004, Representative Don Young introduced H.R. 
4916, the ``Surface Transportation Extension Act of 2004, Part 
IV.'' The same day, the House passed the bill, without 
objection, and the Senate passed it, without amendment, by 
unanimous consent. The President signed the bill into law on 
July 30, 2004 (P.L. 108-280).
    The bill provides an extension of highway, highway safety, 
motor carrier safety, transit, and other programs funded out of 
the Highway Trust Fund pending enactment of a law reauthorizing 
the Transportation Equity Act of the 21st Century (TEA-21). 
There are two tax-related provisions in the bill. The bill 
extends funding for expenditures to curb highway use tax 
evasion until October 1, 2004. Also, the bill extends 
authorization of the use of the Highway Trust Fund, the Mass 
Transit Account, and the Aquatic Resources Trust Fund for 
obligations under TEA-21 before October 1, 2004.

l. Surface Transportation Extension Acts of 2004, Part V (P.L. 108-310)

    On September 29, 2004, Representative Don Young introduced 
H.R. 5183, the ``Surface Transportation Extension Acts of 2004, 
Part V.'' The next day, the House passed the bill by a vote of 
409-8, and the Senate passed H.R. 5183, without amendment, by 
unanimous consent. The President signed the bill into law on 
September 30, 2004 (P.L. 108-310).
    The bill provides an extension of highway, highway safety, 
motor carrier safety, transit, and other programs funded out of 
the Highway Trust Fund pending enactment of a law reauthorizing 
the Transportation Equity Act of the 21st Century (TEA-21). 
There are two tax-related provisions in the bill. The bill 
extends funding for expenditures to curb highway use tax 
evasion until June 1, 2005. The bill also extends authorization 
of the use of the Highway Trust Fund, the Mass Transit Account, 
and the Aquatic Resources Trust Fund for obligations under TEA-
21 before June 1, 2005.

m. Working Families Tax Relief Act of 2004 (P.L. 108-311)

    On March 18, 2003, Chairman Thomas introduced H.R. 1308, 
the ``Working Families Tax Relief Act of 2004,'' and the next 
day the bill passed the House by voice vote on a motion to 
suspend the rules. The Senate passed the bill, as amended, on 
June 5, 2003, by voice vote. In the House, 20 motions to 
instruct conferees were offered. One was passed, 18 failed, and 
1 was vitiated when the conference report was filed. The 
conference report was passed by the House on September 23, 
2004, by a vote of 339-65 and by the Senate by a vote of 92-3. 
The bill was signed into law by the President on October 4, 
2004 (P.L. 108-311).
    The conference agreement for H.R. 1308, the ``Working 
Families Tax Relief Act of 2004,'' included provisions similar 
to those contained in H.R. 4359, the ``Child Credit 
Preservation and Expansions Act of 2004,'' introduced by 
Representative Porter; H.R. 4275, a bill that would permanently 
extend the 10-percent individual income tax bracket introduced 
by Representative Sessions; and H.R. 4227, the ``Middle-Class 
Alternative Minimum Tax Relief Act of 2004,'' introduced by 
Representative Simmons. The House passed all of these bills in 
May 2004.
    The conference agreement contained titles addressing the 
extension of family tax provisions, the uniform definition of a 
child, extensions of certain expiring provisions, and tax 
technical corrections.
    The family tax provisions title of the bill increases the 
child credit to $1,000 for taxable years 2005 through 2009. In 
doing so, H.R. 1308 ensures that the child credit stays at the 
$1,000 level through 2010. The bill increases the basic 
standard deduction for married couples filing a joint return to 
an amount twice that for single filers effective for taxable 
years 2005 through 2008. As such, the standard deduction for 
married couples will remain twice that of single taxpayers 
through 2010. The bill increases the size of the 15-percent tax 
bracket for married couples filing a joint return to twice the 
size of the 15-percent bracket for single taxpayers for taxable 
years 2005 through 2007. As such, the 15-percent bracket for 
married couples will remain twice the size of that for single 
taxpayers through 2010. The bill also expands the size of the 
10-percent bracket through tax year 2010. The child credit is 
refundable by an amount equal to a given percentage of earned 
income in excess of $10,750 (as indexed). The child credit 
refundability percentage was 10 percent and was scheduled to 
increase to 15 percent in 2005. The bill accelerates this 
increase of the percentage to 15 percent for tax year 2004 
instead of 2005. In addition, taxpayers may elect to include 
all of their combat pay, which is otherwise excluded from 
income and not subject to tax, in the calculation of earned 
income for purposes of the refundability portion of the child 
credit.
    Title II of the conference version of H.R. 1308 contains a 
provision to establish a more uniform definition of a child 
that was included in the Senate-passed version of H.R. 1308. 
The provision addresses the various definitions of a child and 
other dependents for purposes of determining eligibility for 
the dependency exemption, the child credit, the earned income 
credit, the dependent care credit, and the head of household 
filing status. The separate criteria for determining 
eligibility included the relationship the child or dependent 
bears to the taxpayer, whether the child or dependent lives 
with the taxpayer, whether the child or dependent provides for 
their own support, and the age of the child. A child or 
dependent that qualified the taxpayerto claim one benefit did 
not necessarily allow the same child or dependent to be claimed by the 
taxpayer for another benefit. H.R. 1308 mitigates this situation.
    As a result of H.R. 1308, in general the taxpayer may claim 
a qualified child if the child satisfies four tests: (1) the 
child lives in the same residence with the taxpayer for at 
least one-half of the taxable year; (2) the child has a 
specified relationship with the taxpayer (e.g. son, daughter, 
grandchild, etc.); (3) the child does not provide over one-half 
of their own support; and (4) the child has not attained a 
certain age.
    The age test still varies with each benefit. In general, a 
child must not have attained the age of 19 by the end of the 
taxable year (or 24 in the case of a full-time student). For 
purposes of the child credit, the child must not have attained 
the age of 17, and for the dependent care credit, the child 
must be under the age of 13. No age limit applies to children 
who are totally and permanently disabled (except in the case of 
the child credit). The support test does not apply in the case 
of the earned income credit. A legally adopted child or a child 
who has been legally placed with the taxpayer by an authorized 
placement agency for adoption by the taxpayer satisfies the 
relationship test.
    Title II of H.R. 1308 specifies that a dependent may be a 
qualifying child as defined above, or a qualifying relative. In 
general, as long as a taxpayer provides over one-half of the 
support for the relative, and the relative does not have gross 
income in excess of the dependency exemption amount, the 
taxpayer may be eligible to claim the relative as a dependent. 
An individual may not be treated as a dependent of any taxpayer 
if such individual has filed a joint return with the 
individual's spouse for the taxable year. A dependent must be 
an individual who is a U.S. citizen or national, or a resident 
of the United States, Canada or Mexico. This rule does not 
apply to adopted children as long as the adopted child lives in 
the same residence with the taxpayer as a member of the 
taxpayer's household, and the taxpayer is a citizen or a 
national of the United States.
    Title III of the bill extends many expired and expiring 
provisions. Similar extensions were included in H.R. 3521, 
which previously passed the House under suspension of the rules 
by voice vote, and in the House-passed version of H.R. 4520 
(discussed below). H.R. 1308 generally extends the following 
provisions through December 31, 2005, without modification: the 
credit for increasing research activities; parity in the 
application of certain limits to mental health benefits; the 
work opportunity tax credit; the welfare-to-work credit; the 
credit to holders of qualified zone academy bonds; the cover 
over of the excise tax on distilled spirits to Puerto Rico and 
the Virgin Islands; the enhanced deduction for qualified 
computer donations; the exclusion of certain expenses of 
elementary and secondary school teachers from gross income; 
authority to issue New York Liberty Zone bonds (extended 
through December 31, 2009); tax incentives for investment in 
the District of Columbia; expensing of environmental 
remediation costs in connection with the abatement or control 
of hazardous substances at qualified sites; authority for any 
State to participate in a combined Federal and State employment 
tax reporting program; the allowance for nonrefundable personal 
credits to be applied against the alternative minimum tax; the 
credit for electricity produced from certain renewable 
resources; the suspension of the 100-percent net income 
limitation on percentage depletion in the case of oil and gas 
from marginal wells; the Indian employment credit; accelerated 
depreciation for business property on Indian reservations; the 
disclosure of return information related to carrying out 
income-contingent repayment of student loans; the credit for 
qualified electric vehicles; the deduction for qualified clean-
fuel vehicle property; disclosure authority relating to 
terrorist activities; the availability of Archer medical 
savings accounts; and the joint review of the strategic plans 
and budget for the IRS.
    Finally, Title IV of H.R. 1308 contained a number of 
technical corrections to prior tax legislation.

n. Ronald W. Reagan National Defense Authorization Act for Fiscal Year 
        2005 (P.L. 108-375)

    Representative Hunter introduced H.R. 4200, the ``Ronald W. 
Reagan National Defense Authorization Act for Fiscal Year 
2005,'' on April 22, 2004, to authorize appropriations for 
military activities, military construction, defense activities, 
and for other purposed. The Committee on Armed Services 
favorably reported an amended version of the bill on May 13, 
2004. H.R. 4200 passed the House on May 20, 2004. The Senate 
passed its defense authorization bill, S. 2400, on June 23, 
2004, and the conference agreement was passed on October 9, 
2004. H.R. 4200 was signed by the President on October 28, 2004 
(P.L. 108-375).
    The bill, as passed by the House, contained a provision 
granting the Department of Defense authority to accept 
donations of frequent flier miles to facilitate rest and 
recuperation travel of deployed members and their families. The 
Senate included a similar provision in S. 2400. This provision, 
creating the ``Operation Hero Miles'' program, would clarify 
that any such donation would not be treated as income to the 
recipient, and would not be treated as a deductible 
contribution by the donor. The conference version of H.R. 4200 
included an amended version of ``Operation Hero Miles.'' In 
this final version, the bill did clarify that any such donation 
would not be included in the gross income of the recipient, but 
the bill remained silent on the deductibility of the donation 
for the donee.

o. American Jobs Creation Act of 2004 (P.L. 108-357)

    On October 22, 2004, the President signed the ``American 
Jobs Creation Act of 2004'' into law (P.L. 108-357). The law 
removes up to $4 billion of annual trade sanctions against U.S. 
exports to the European Union, reduces taxes on U.S. 
manufacturing income, modernizes and makes competitive the U.S. 
taxation of global income, provides various tax reductions for 
small businesses and other job creators, provides a Federal tax 
deduction for State and local sales taxes, repeals the tobacco 
quota program, and shuts down individual and corporate tax 
abuses. The history of the legislation is summarized below.
            I. Hearings (107th Congress)
    On February 27, 2002, the Ways and Means Committee held a 
hearing to examine the January 14, 2002, decision of 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.
            II. The American Competitiveness and Corporate 
                    Accountability Act of 2002 (H.R. 5095, 107th 
                    Congress)
    On July 11, 2002, Chairman Thomas introduced H.R. 5095, the 
``American Competitiveness and Corporate Accountability Act of 
2002.'' The bill would have repealed the ETI regime and 
prevented the imposition of sanctions against U.S. exports to 
the European Union, improved and simplified the U.S. 
international tax system, increased the competitiveness of U.S. 
companies, and shut down individual and corporate tax abuses.
            III. The American Jobs Creation Act of 2003 (H.R. 2896)
    On July 25, 2003, Chairman Thomas introduced H.R. 2896, the 
``American Jobs Creation Act of 2003.'' On October 28, 2003, 
the bill, as amended, was ordered favorably reported by the 
Committee by a vote of 24-15. The bill, as amended, would have 
repealed the extraterritorial income tax regime and would have 
provided manufacturing and international tax relief to ensure 
the competitiveness of U.S. businesses and their workers.
    In particular, the bill, as amended, would have reduced the 
corporate tax rate on U.S. manufacturing and production income 
from 35 percent to 32 percent, cut to 32 percent the top 
corporate tax rate for all corporations with less than $20 
million of annual taxable income, extended the Code section 179 
small business expensing relief contained in the ``Jobs and 
Growth Tax Relief Reconciliation Act of 2003'' (P.L. 108-27) 
for an additional two years, reduced the depreciable lives of 
leasehold and restaurant improvements from 39 years to 15 
years, provided significant corporate alternative minimum tax 
(AMT) relief, including removing the provision that limits the 
use of net operating losses and foreign tax credits against AMT 
and increasing the size of small businesses exempt from 
corporate AMT from $7.5 million to $20 million of gross 
receipts, and reformed and simplified the tax treatment of 
subchapter S corporations.
    The bill also would have simplified and made competitive 
the U.S. international tax rules that currently place U.S. 
companies and their workers at a substantial competitive 
disadvantage when attempting to compete in global markets. In 
particular, the bill would have reformed the interest 
allocation rules, reduced the number of foreign tax credit 
baskets from nine to two, reformed the overall domestic loss 
rules, treated the European Union as one country for purposes 
of the foreign base company sales and services rules, provided 
look-through treatment for payments between controlled foreign 
corporations, repealed the anti-deferral foreign shipping 
income rules, and reformed and simplified various other 
uncompetitive international tax provisions.
    Finally, the bill would have adopted the President's tax 
shelter proposals that require increased disclosure of 
potentially abusive transactions and imposed increased 
penalties for those that enter into abusive transactions, 
tightened the individual and corporate expatriation rules 
(including tightening the rules that provide an advantage to 
foreign companies operating in the United States through the 
excessive use of deductible debt payments to their foreign 
parents), protected employee benefits by tightening the 
deferred compensation rules, shut down various tax avoidance 
schemes, and extended customs user fees.
            IV. The American Jobs Creation Act of 2004 (H.R. 4520)
    On June 4, 2004, Chairman Thomas introduced H.R. 4520, the 
``American Jobs Creation Act of 2004.'' On June 14, 2004, the 
bill, as amended, was ordered favorably reported by the 
Committee by a vote of 27-9. The bill passed the House on June 
17, 2004, by a vote of 251-178. The Senate passed the bill, as 
amended, by voice vote on July 15, 2004. The conference report 
passed the House on October 7, 2004, by a vote of 280-141 and 
passed the Senate on October 11, 2004, by a vote of 69-17. The 
bill was signed into law by the President on October 22, 2004 
(P.L. 108-357).

a. The House bill

    The House bill contained seven titles which are summarized 
below:
            Title I. Repeal ETI and cut corporate tax rates on domestic 
                    manufacturing and small businesses.
    This section: (1) repealed ETI with a two year phase-out 
ending on December 31, 2006, and grandfathered binding 
contracts entered into prior to and in existence on January 14, 
2002; (2) reduced the top corporate tax rate from 35 percent to 
32 percent on broadly-defined U.S. manufacturing activity that 
includes property manufactured, produced, grown, or extracted 
in the United States, software, architectural and engineering 
services, movie production, and construction; and (3) reduced 
the top corporate rate on all businesses with less than $20 
million of taxable income to 32 percent.
            Title II. Other incentives for manufacturers, small 
                    businesses and farmers.
    This section: (1) extended for two years (through 2007) the 
enhanced Code section 179 expensing so that small businesses 
can immediately expense up to $100,000 (indexed for inflation) 
of new capital investments; (2) reduced the depreciable lives 
of restaurant and leasehold improvements from 39 years to 15 
years; (3) provided 11 reforms and simplifications to the 
taxation of S corporations; (4) reduced the negative impact of 
the corporate AMT by repealing the 90-percent limitation on the 
use of foreign tax credits against AMT, removing more small-
sized and medium-sized business from the corporate AMT by 
increasing the AMT exemption from $7.5 million of gross 
receipts to $20 million of gross receipts, and providing that 
farmers that use the income-averaging method are not improperly 
subject to the AMT; (5) clarified that incentive stock options 
and employee stock purchase plans are excluded from wages; (6) 
provided that companies can, for a one-year period, bring back 
to the United States foreign earnings at a reduced 5.25-percent 
tax rate; and (7) included 16 additional provisions to cut tax 
liabilities and provide incentives to small businesses.
            Title III. Tax reform and simplification for U.S. 
                    businesses.
    This section included 16 provisions to simplify and make 
competitive the tax rules that apply to U.S. businesses 
operating in global markets. In particular, the bill reformed 
the interest allocation rules, reduced the number of foreign 
tax credit baskets from nine to two, reformed the overall 
domestic loss rules, provided look-through treatment for 
payments between controlled foreign corporations, repealed the 
anti-deferral foreign shipping income rules, and reformed and 
simplified various other uncompetitive international tax 
provisions.
            Title IV. Extension of expiring provisions.
    This section extends, generally, 22 expired tax provisions 
including, the research and development tax credit, the work 
opportunity and welfare-to-work tax credits, and the allowance 
of nonrefundable personal credits against the regular and 
alternative minimum tax liability.
            Title V. Deduction for State and local sales taxes.
    This section contains a temporary two-year provision that 
allows taxpayers an election to deduct State and local sales 
taxes against their Federal income tax instead of taking a 
deduction for State and local income taxes.
            Title VI. Revenue provisions.
    This section contains numerous revenue raising provisions 
that crack down on individual and corporate tax abuses or, 
otherwise, raise revenue. Some of the major provisions include: 
(1) provisions to stop corporate and individual expatriation; 
(2) provisions to stop individual and corporate tax shelters by 
requiring increased disclosure of certain transactions and by 
increasing penalties for entering into or not reporting certain 
potentially abusive transactions; (3) provisions to shut down 
tax abuses outlined in the Joint Committee on Taxation Report 
of Investigation of Enron Corporation and Related Entities 
Regarding Federal Tax and Compensation Issues, and Policy 
Recommendations; (4) provisions to shut down abusive leasing 
transactions involving tax-exempt entities; (5) provisions to 
cut down on fuel tax evasion; (6) provisions to clarify the tax 
treatment of non-qualified deferred compensation plans; and (7) 
various other provisions, including the extension of IRS and 
Customs user fees, provisions to shut down charitable 
contribution abuses, and a provision to allow for the private 
collection of Federal tax debts.
            Title VII. Market reform for tobacco growers.
    This section would terminate the tobacco quota program and 
provide a buyout for active tobacco producers and quota 
holders.
            Title VIII. Trade provisions.
    This section temporarily would suspend the duty on ceiling 
fans and nuclear steam generators.

b. Conference Report for the American Jobs Creation Act of 2004 (H.R. 
        4520)

    As outlined below, the Conference Report produced a revenue 
neutral bill that largely adopted the House bill with some 
modifications.
            Title I. Repeal ETI and cut corporate tax rates on domestic 
                    manufacturing.
    The Conference report: (1) adopts the House provision that 
repeals ETI with a two year phase-out ending on December 31, 
2006, and grandfathers binding contracts entered into prior to 
and in existence on September 18, 2003, and (2) adopts the 
House's broad definition of U.S. manufacturing and adopts the 
Senate's structure of delivering roughly a three-percent tax 
rate cut through the mechanism of a phased-in nine-percent 
deduction on manufacturing income that applies to C 
corporations, S corporations, cooperatives, sole 
proprietorships, partnerships, estates and trusts, and limited 
liability companies. The Senate provision that limits the 
deduction to no more than 50 percent of W-2 wages also was 
adopted. Finally, a provision was adopted to ensure that 
businesses received the full benefit of the manufacturing 
deduction by providing that the manufacturing deduction was not 
recaptured by the AMT.
            Title II. Other incentives for manufacturers, small 
                    businesses and farmers.
    The Conference report adopts most of the House incentive 
provisions, such as, (1) extending for two years (through 2007) 
the enhanced Code section 179 expensing so that small business 
can immediately expense up to $100,000 (indexed for inflation) 
of new capital investments; (2) reducing the depreciable period 
for restaurant and leasehold improvements from 39 years to 15 
years for property placed in service after October 22, 2004, 
and before January 1, 2006; (3) including ten provisions that 
simplify the tax treatment of S corporations and make it easier 
for businesses to qualify as S corporations; (4) reducing the 
negative impact of the AMT by repealing the 90 percent 
limitation on the use of foreign tax credits against AMT and 
providing that farmers and fisherman that use the income-
averaging method are not improperly subject to the AMT; (5) 
clarifying that incentive stock options and employee stock 
purchase plans are excluded from wages; and (6) adopting a 
slightly modified version of the House repatriation provision 
that permits companies, for a one-year period, to bring back to 
the United States foreign earnings at a reduced 5.25-percent 
tax rate.
    The Conference Report also includes numerous additional 
provisions contained in the House and/or Senate bills to cut 
taxes and provide incentives to small businesses, energy 
producers, and agriculture. Some of the provisions include: 
phasing out the 4.3-cent fuel excise tax on railroads and 
barges; reforming the movie income forecast accounting method 
for films and allowing taxpayers to immediately deduct up to 
$15 million of costs incurred for domestic film and television 
production (up to $20 million if the expenses are incurred in 
certain distressed areas); providing a 50-percent tax credit 
for railroad track maintenance (through 2007); suspending 
(through 2008) the special occupational tax; allowing taxpayers 
to pay tax on their international shipping income on a tonnage 
basis; extending ethanol subsidies (the Volumetric Ethanol 
Excise Tax Credit (VEETC)) through 2010; creating new biodiesel 
tax subsidies through 2006; increasing the reinvestment period 
for livestock sold as a result of drought from two years to 
four years; providing capital gains treatment on the outright 
sale of timber by a landowner; allowing distributions from 
publicly-traded partnerships to be treated as qualified income 
for mutual funds; providing a tax credit of up to $3 per barrel 
to maintain marginal well oil production when prices are low; 
increasing the number of small manufacturers eligible for 
Industrial Development Bond financing; changing the tax 
treatment of arrows to ensure that overseas arrow manufacturers 
cannot evade the arrow excise tax; reducing the excise tax on 
tackle boxes from 10 percent to 3 percent; allowing a tax 
deduction (up to $10,000) for expenses related to Native 
American subsistence whaling; permitting small business 
refiners to expense up to 75 percent of the costs paid to 
comply with the Environmental Protection Agency's sulfur 
regulations; modifying the tax treatment of naval shipbuilding 
contracts; authorizing the issuance of $2 billion of tax-exempt 
facility bonds to finance the construction of certain green 
buildings and sustainable design projects; expanding the Code 
section 45 electricity production credit to include open-loop 
biomass, geothermal and solar energy, small irrigation power, 
landfill gas, trash combustion, and refined coal production; 
allowing a deduction for attorney's fees and court costs 
incurred in connection with an unlawful discrimination claim; 
providing seven-year depreciation for racetrack facilities, 
suspending Code section 815 for two years; allowing seven-year 
depreciation for certain Alaskan natural gas pipelines and 
extending the enhanced oil recovery credit to Alaskan gas 
treatment plants; modifying the minimum cost requirements for 
transfers of excess pension assets to retiree health accounts; 
and including primary and secondary medical strategies for 
individuals with sickle cell disease as medical assistance 
under Medicaid.
            Title III. Tax reform and simplification for U.S. 
                    businesses.
    The Conference Report adopts 13 of the 14 identical 
international tax reform and competitiveness provisions 
contained in both the House and Senate bills, including 
reforming the interest allocation rules, reforming the overall 
domestic loss rules, and providing look-through treatment for 
the sale of partnership interests. The Conference Report does 
not adopt the provision contained in both the House and Senate 
bills that would have provided look-through treatment for 
payments between related controlled foreign corporations.
    The Conference Report adopts the House provisions to reduce 
the number of foreign tax credit baskets from nine to two and 
the provision to repeal the subpart F shipping rules. The 
Conference Report adopts the Senate provisions to modify the 
treatment of certain real estate investment trust (REIT) 
distributions attributable to gain from sales of exchanges of 
U.S. real property interests, exclude from gross income of 
nonresident aliens winnings from wagers on certain horse and 
dog races, and reduce the U.S. withholding tax on Puerto Rican 
corporations. The Conference Report also adopts a slightly 
modified Senate provision to increase the foreign tax credit 
carryforward from 5 to 10 years and reduce the foreign tax 
credit carryback from 2 years to 1 year.
            Title IV. Extension of expiring provisions.
    The Conference Report did not include the extension of 
expiring provisions as the expiring provisions were extended in 
the Working Families Tax Relief Act of 2004 (P.L. 108-311).
            Title V. Deduction for State and local sales taxes.
    The Conference Report adopts the House provision to allow 
taxpayers to elect to deduct State and local sales taxes in 
lieu of State income taxes for 2004 and 2005.
            Title VI. Revenue provisions.
    The Conference Report adopts the House revenue raiser 
provisions including, (1) provisions to stop corporate and 
individual expatriation; (2) provisions to stop individual and 
corporate tax shelters by requiring increased disclosure of 
certain transactions and by increasing penalties for entering 
into or not reporting certain potentially abusive transactions; 
(3) provisions to shut down tax abuses outlined in the Joint 
Committee on Taxation Report on Investigation of Enron 
Corporation and Related Entities Regarding Federal Tax and 
Compensation Issues, and Policy Recommendations; (4) provisions 
to shut down abusive leasing transactions involving tax-exempt 
entities; (5) provisions to cut down on fuel tax evasion; (6) 
provisions to shut down abusive non-qualified deferred 
compensation plans; and (7) various other provisions including, 
extension of IRS and Customs user fees, provisions to shut down 
charitable contribution abuses, and a provision to allow for 
the private collection of Federal tax debts.
    The Conference Report also included several additional 
revenue-raising provisions from the Senate bill including: (1) 
conforming the class lives for utility grading costs; (2) 
modifications to recognize cancellation-of-indebtedness income 
realized on the satisfaction of debt with a partnership 
interest; (3) recapture of overall foreign losses on sale of a 
controlled foreign corporation; and (4) modified provisions to 
stop tax abuses in the U.S. possessions, limit employer 
deductions for certain entertainment expenses, and limit 
deductions on leases of tax-exempt property with a fixed price 
purchase option.
    The Conference Report does not contain: (1) a provision to 
codify the economic substance doctrine; (2) retroactive 
application of the tax-exempt leasing and corporate inversion 
provisions; and (3) provisions to modify the deductibility of 
fines and penalties.
            Title VII. Market reform for tobacco growers.
    The Conference Report repeals the government-run tobacco 
quota program. The program is not replaced with any kind of 
price support program or production licensing system. Tobacco 
farmers and quota holders will receive transitional assistance 
payments over 10 years. The payments are fully financed with a 
quarterly assessment on tobacco importers and manufacturers of 
tobacco products. The cost of the program is capped at $10.14 
billion.
            Title VIII. Trade provisions.
    The Conference Report contains the House provisions to 
temporarily suspend the duty on ceiling fans and nuclear steam 
generators.

p. Miscellaneous Trade and Technical Corrections Act (P.L. 108-429)

    Representative Philip Crane introduced H.R. 1047, the 
``Miscellaneous Trade and Technical Corrections Act of 2003,'' 
on March 4, 2003. The bill passed the House under suspension of 
the rules on March 5, 2003. The conference report for the bill 
passed the House on October 8, 2004, and passed by the Senate 
on November 19, 2004. The President signed the bill on December 
3, 2004 (P.L. 108-429).
    The bill includes tax technical corrections relating to (1) 
safeguarding taxpayer return information when such information 
is released to any agency, office, body, commission or person, 
and (2) the tax treatment of cellar wines.

q. YMCA Retirement Fund (P.L. 108-476)

    On November 16, 2004, Representative English introduced 
H.R. 5365, to treat certain arrangements maintained by the 
Young Men's Christian Association (YMCA) Retirement Fund as 
church plans. The bill passed the House, by voice vote, under 
suspension of the rules on November 19, 2004. The Senate passed 
H.R. 5365 by unanimous consent on December 7, 2004. The bill 
was signed into law by the President on December 21, 2004 (P.L. 
108-476).
    The YMCA Retirement Fund has operated as a church plan 
throughout its 80 year history. This type of plan must meet 
certain rules under the Internal Revenue Code to retain its 
tax-qualified status. H.R. 5364 would ensure that the 
retirement plans maintained by the YMCA Retirement Fund would 
continue to be treated as church plans.

r. Modification to the Taxation of Arrow Components (P.L. 108-493)

    On November 19, 2004, Representative Paul Ryan introduced 
H.R. 5394, a bill to amend the Internal Revenue Code of 1986 to 
modify the taxation of arrow components. The House passed the 
bill, by voice vote, on December 6, 2004, and the Senate passed 
the bill by unanimous consent on December 8, 2004. The bill was 
signed into law by the President on December 23, 2004 (P.L. 
108-493).
    The reforms contained in H.R. 3652 that were enacted as 
part of H.R. 4520 would have an unintended consequence on many 
small archery retailers, forcing these small businesses to 
engage in a great deal of record keeping in order to collect a 
relatively small amount of tax. In order to lift the burden 
from these small businesses while preventing domestic arrow 
companies from being uncompetitive, H.R. 5394 would further 
amend the law to place the tax on finished arrows and shafts 
rather than other components. H.R. 5394 would impose a flat tax 
of 39 cents on the sale by the manufacturer, producer, or 
importer of any arrow shaft, whether sold separately or as part 
of an assembled arrow.

                        2. TAX RELIEF PROPOSALS

a. Armed Forces Tax Fairness Act of 2003

    H.R. 878, the ``Armed Forces Tax Fairness Act of 2003,'' 
was introduced by Chairman Thomas on February 25, 2003. The 
bill would provide tax relief to families of the armed forces, 
including the exclusion of gain from the sale of a principal 
residence and would restore the tax-exempt status of death 
gratuity payments to members of the uniformed services, and for 
other purposes. The bill, as amended, was favorably reported by 
the Committee on February 27, 2003. No further action was taken 
in the House. Related provisions were included in H.R. 1307, 
H.R. 1664. Related provisions were also included in H.R. 1308 
as introduced; however, these were removed in conference (as 
discussed above).
    On March 18, 2003, Chairman Thomas introduced H.R. 1307, 
the Armed Forces Tax Fairness Act of 2003. This bill was 
substantially the same as H.R. 878, except for provisions 
allowing an above-the-line deduction for National Guard and 
military reserve members for certain travel expenses and the 
inclusion of tax relief for astronauts who lose their lives on 
space missions. H.R. 1307 was passed by the House on March 20, 
2003, under suspension of the rules by a vote of 422-0. It 
passed the Senate, as amended, on March 27, 2003, but no 
further action was taken.
    H.R. 1664, the ``Armed Forces Tax Fairness Act of 2003,'' 
was introduced by Chairman Thomas on April 8, 2003. It was 
similar to H.R. 1307. It passed the House under suspension of 
the rules, by voice vote, on April 9, 2004. It was referred to 
the Senate Committee on Finance where no further action was 
taken.

b. Guardsmen and Reservists Financial Relief Act of 2003

    Representative Beauprez introduced H.R. 1779, the 
``Guardsmen and Reservists Financial Relief Act of 2003,'' on 
April 11, 2003. On April 21, 2004, the bill passed the House 
under suspension of the rules by vote of a 415-0. On October 
11, 2004, the bill was discharged from the Senate Finance 
Committee by unanimous consent and was passed by the Senate, as 
amended, by unanimous consent. No further action was taken on 
the bill.
    As passed by the House, the bill would allow for penalty-
free withdrawals from retirement plans of individuals called to 
active duty before September 12, 2005.

c. Charitable Giving and Tax-Exempt Organizations

    On May 7, 2003, Representative Blunt introduced H.R. 7, the 
``Charitable Giving Act of 2003,'' which would provide 
charitable giving incentives and address issues relating to 
tax-exempt organizations. The Committee ordered favorably 
reported, as amended, by voice vote on September 9, 2003. The 
House passed the bill on September 17, 2003, by a vote of 408-
3. On February 27, 2003, Senator Charles Grassley introduced 
and reported S. 476, the ``CARE Act of 2003,'' to the Senate. 
S. 476 also addressed charitable giving and tax-exempt 
organizations. On April 9, 2003, this bill passed the Senate by 
a vote of 95-5. H.R. 7 and S. 476 were not considered by a 
conference committee.
    In summary, H.R. 7 as introduced would provide larger 
allowances for the deductibility of charitable donations for 
individuals and corporations. Title I would allow taxpayers 
that do not itemize their deductions to deduct charitable 
contributions exceeding $250 ($500 in the case of a joint 
return) but not exceeding $500 ($1,000 in the case of a joint 
return). It would permit tax-free distributions from individual 
retirement plans for charitable purposes. Corporations would 
benefit from a phase-in of an increase in the percentage 
limitation on corporate charitable deductions, from 10 to 20 
percent by 2012, of the taxpayer's taxable income. The bill 
would extend to any taxpayer engaged in a trade or business, 
whether or not a C corporation, the ability to claim an 
enhanced deduction for donations of food inventory. For private 
foundations, the bill would reduce from 2 to 1 percent the 
maximum excise tax on their net investment income thus 
replacing two present law excise tax rates with one rate.
    Under present law, private non-operating foundations are 
required to pay out a minimum amount each year as qualifying 
distributions. A qualifying distribution is an amount paid to 
accomplish one or more of the organization's exempt purposes, 
including administrative expenses. The introduced bill would 
have disqualified administration expenses as a qualifying 
distribution for an exempt purpose. It also would increase the 
self-dealing excise tax on such foundations from 5 to 25 
percent and modify provisions concerning the excise tax for the 
failure of such foundations to distribute income.
    The introduced bill would revise rules concerning unrelated 
business taxable income of charitable remainder trusts and 
impose an excise tax equal to the amount of any unrelated 
business taxable income. The excise tax would be in lieu of 
removing the income tax exemption of a charitable remainder 
trust for any taxable year in which the trust has any unrelated 
business taxable income.
    Title I of H.R. 7 as introduced would also modify the self-
constructed property rule that applies to certain charitable 
contributions of scientific property used for research. The 
bill would allow the reduction of a shareholder's basis in the 
stock of an S corporation as a result of the donation of such 
stock to charity to equal the shareholder's pro rata share of 
the basis of the contributed property.
    Title II of the introduced bill addresses tax reform and 
improvements relating to charitable organizations and programs. 
The bill would suspend the tax-exempt status of an organization 
that is exempt from tax for any period during which the 
organization is designated or identified by U.S. Federal 
authorities as a terrorist organization or supporter of 
terrorism. The bill would clarify the definition of church tax 
inquiry and extend declaratory judgment procedures to tax-
exempt organizations not defined in Code section 501(c)(3). It 
would exclude from income certain landowner incentive program 
payments and simplify the lobbying expenditure limitation. The 
bill would modify rules concerning interest, rent, annuity, or 
royalty payments made by a controlled entity to a tax-exempt 
organization such that any payment made in excess of an arm's-
length standard must be recognized as unrelated business income 
by the controlling organization. The bill also would simplify 
the lobbying expenditure limitation by eliminating the separate 
limitation for grass-roots lobbying expenditures. Electing 
charities remain subject to the overall limitation on lobbying 
expenditures, which does not change, but electing charities are 
not required to limit grass-roots expenditures as a percentage 
of overall lobbying.
    Under present law, a private foundation (and its related 
private foundations) is not treated as having excess business 
holdings if it owns no more than 2 percent of the voting stock 
and no more than 2 percent of the value of all outstanding 
shares of all classes of stock in that corporation. The 
introduced bill would permit holdings of up to 5 percent of the 
vote or value of a corporation's outstanding stock where the 
corporation is publicly traded and publicly controlled.
    Title III of the introduced bill would create a fund to 
support and replicate promising social service programs as part 
of the Social Security Act. The bill would also extend the 
Individual Development Account program through Fiscal Year 
2008, and it would add maternity group homes to the list of 
shelters eligible for Transitional Living Project grants.
    H.R. 7, as passed by the House, included most provisions 
from the introduced version of the bill. Two provisions from 
the introduced bill that were not included in the House-passed 
bill were the removal of administration expenses from the list 
of qualifying distributions to accomplish a foundation's exempt 
purpose and the proposed change in the permitted holdings of 
private foundations where the corporation is publicly traded 
and publicly controlled.
    The House-passed version would also provide larger 
allowances for the deductibility of charitable donations for 
individuals and corporations. Title I would allow taxpayers 
that do not itemize their deductions to deduct charitable 
contributions exceeding $250 ($500 in the case of a joint 
return) but not exceeding $500 ($1,000 in the case of a joint 
return). It would permit tax-free distributions from individual 
retirement plans for qualified charitable distributions. 
Corporations would benefit from a phase-in of an increase in 
the percentage limitation on corporate charitable deductions, 
from 10 to 20 percent, of the taxpayer's taxable income. The 
bill would extend to any taxpayer engaged in a trade or 
business, whether or not a C corporation, the ability to claim 
an enhanced deduction for donations of food inventory. For 
private foundations, the bill would reduce from 2 to 1 percent 
the maximum excise tax on their net investment income while 
replacing two present law excise tax rates with one rate. It 
also would increase the self-dealing excise tax on such 
foundations from 5 to 25 percent and modify provisions 
concerning the excise tax for the failure of such foundations 
to distribute income.
    The bill would revise rules concerning unrelated business 
taxable income of charitable remainder trusts and impose an 
excise tax equal to the amount of any unrelated business 
taxable income. The excise tax would be in lieu of removing the 
income tax exemption of a charitable remainder trust for any 
taxable year in which the trust has any unrelated business 
taxable income.
    H.R. 7 would modify the self-constructed property rule that 
applies to certain charitable contributions of scientific 
property used for research. The bill would allow the reduction 
of a shareholder's basis in the stock of an S corporation as a 
result of the donation of such stock to charity to equal the 
shareholder's pro rata share of the basis of the contributed 
property.
    The bill, as passed by the House, would permit charitable 
organizations to make collegiate housing and infrastructure 
grants and exempt from unrelated business income tax the income 
of a charitable organization certain games of chance, as long 
as the net proceeds are used for the organization's charitable 
purpose. The bill would also exempt qualified blood collection 
organizations from paying certain excise taxes. The bill also 
would extend from 4 years to 11 years the nonrecognition 
replacement period for the gain on sales of property by social 
clubs organized under Code section 501(c)(7). The bill also 
would grant a limited exception for certainbonds from Federal 
guarantee prohibitions if the proceeds are used are used to finance 
continuing care facilities.
    Title II of the bill addresses tax reform and improvements 
relating to tax-exempt organizations and programs. The bill 
would suspend the tax-exempt status of an organization that is 
exempt from tax for any period during which the organization is 
designated or identified by U.S. Federal authorities as a 
terrorist organization or supporter of terrorism. The bill 
would clarify the definition of church tax inquiry and extend 
declaratory judgment procedures to tax-exempt organizations not 
defined in Code section 501(c)(3). It would exclude from income 
certain landowner incentive program payments and simplify the 
lobbying expenditure limitation. The bill would modify rules 
concerning interest, rent, annuity, or royalty payments made by 
a controlled entity to a tax-exempt organization such that any 
payment made in excess of an arm's-length standard must be 
recognized as unrelated business income by the controlling 
organization. The bill would also simplify the lobbying 
expenditure limitation by eliminating the separate limitation 
for grass-roots lobbying expenditures. Electing charities 
remain subject to the overall limitation on lobbying 
expenditures, which does not change, but electing charities are 
not required to limit grass-roots expenditures as a percentage 
of overall lobbying. The bill would also expand private 
activities eligible for financing with tax-exempt private 
activity bonds to include qualified forest conservation bonds 
that are an obligation of the state of Washington or any 
political subdivision thereof. Income derived from the 
harvesting of timber on land purchased with such bonds by a 
qualified organization would be exempt from Federal tax.
    Title III of the bill would create a fund to support and 
replicate promising social service programs as part of the 
Social Security Act. The bill would also extend the Individual 
Development Account program through Fiscal Year 2008 and it 
would add maternity group homes to the list of shelters 
eligible for Transitional Living Project grants. Finally, it 
maintains the 10-percent limit for transfers from the Social 
Services block grant.

d. Energy Tax Incentives

    On April 1, 2003, Representative McCrery introduced H.R. 
1531, the ``Energy Tax Policy Act of 2003.'' The Committee 
favorably reported the bill, as amended, by a vote of 24-12 on 
April 3, 2003. H.R. 1531 would provide tax incentives to 
encourage energy conservation, energy reliability, and energy 
production.
    The provisions of H.R. 1531 were incorporated into H.R. 6, 
the ``Energy Policy Act of 2003,'' a broad-based energy bill 
introduced by Representative Tauzin on April 7, 2003. The bill 
passed the House on April 11, 2003, and passed the Senate with 
amendment on July 31, 2003. A conference report was agreed to 
in the House on November 18, 2003, by a vote of 246-180. The 
conference report was considered in the Senate, but cloture on 
the conference report was not invoked. On June 15, 2004, the 
House subsequently passed the text of H.R. 6 as reintroduced by 
Representative Barton in H.R. 4503. The bill was approved on 
final passage by a vote of 244-178 after the House rejected a 
motion to recommit the bill with instructions, by a vote of 
192-230. H.R 4503 was received by the Senate on June 17, 2004. 
No further action was taken on the bill.
    H.R. 1531, as passed by the House, contained four sections: 
conservation, reliability, production, and corporate 
inversions.
    The conservation portion of the bill would provide a 
personal tax credit for the purchase of qualified photovoltaic 
property and qualified solar water heating property equal to 15 
percent of qualified investment up to a maximum credit of 
$2,000 for solar water heating property and $2,000 for rooftop 
photovoltaic property. It would extend the placed-in-service 
date for the Code section 45 production tax credit for wind and 
closed-loop biomass facilities placed in service after December 
31, 1993 (December 31, 1992, in the case of closed-loop biomass 
facilities) and before January 1, 2007. However, it would not 
extend the present law credit for poultry waste. The bill added 
three new types of qualifying facilities: open-loop biomass, 
landfill gas facilities (electricity created by burning methane 
gas derived from the biodegradation of municipal solid waste), 
and electricity produced by burning municipal solid waste. It 
would provide a nonrefundable 10-percent credit for the 
purchase of fuel cell power plants for businesses and 
individuals, not to exceed $1,000 per half-kilowatt of 
capacity. The bill would provided a 20-percent non-refundable 
credit, up to $2,000 per dwelling, for the purchase of 
qualified energy efficiency improvements to residences 
including: (1) insulation materials, (2) exterior windows 
(including skylights) and doors, and (3) metal roofs with 
appropriate pigmented coating to reduce the heat loss or gain. 
It would provide a credit to an eligible contractor (up to 
$2,000 per dwelling) equal to the aggregate adjusted basis of 
all energy property installed in a qualified new energy-
efficient home during construction, provided the home is at 
least 30 percent more efficient than a reference model. It 
would provide a 10-percent credit for the purchase of combined 
heat and power property (CHP), defined as one which (1) 
generates electricity and useful thermal energy in a single, 
integrated system, and (2) produces at least 20 percent of its 
total useful energy in the form of thermal energy and at least 
20 percent in the form of electrical or mechanical power (or a 
combination thereof). Nonbusiness energy credits would be 
allowed against both regular tax and the alternative minimum 
tax (AMT). The 4.3-cents-per-gallon General Fund excise tax 
rates on diesel fuel used in trains and fuel used in barges 
operating on the designated inland waterways system would be 
repealed. The bill would reduce the Federal excise tax rate on 
water-diesel emulsions from 24.3 cents per gallon to 19.66 
cents per gallon so as to not tax the water content of the 
emulsions. It would also repeal the phased-down reduction in 
the electric vehicle credit for 2004, 2005, and 2006. The bill 
would also repeal the phased-down reduction in the allowable 
clean-fuel vehicle deduction for 2004, 2005, and 2006, and it 
would add new tax credits for fuel cell and advanced lean burn 
vehicles.
    The reliability portion of the bill would allow a 7-year 
cost recovery period for natural gas gathering lines, a 15-year 
cost recovery period for natural gas distribution pipelines, 
and a 15-year cost recovery period for electricity transmission 
lines. The bill would permit small business refiners to expense 
up to 75 percent of the costs incurred in complying with the 
Highway Diesel Fuel Sulfur Control Requirements issued by the 
Environmental Protection Agency (EPA) in 2001. Small refiners 
would be allowed to claim a 5-cents credit for each gallon of 
low-sulfur diesel fuel produced. The small refiner exception to 
oil depletion deduction would be increased to an average daily 
refinery run of 75,000 barrels. The bill would provide tax 
relief for utilities selling transmission assets in response to 
Federal Energy Regulatory Commission (FERC) Order 2000. The 
limitation permitting only rate-regulated utilities to deduct 
contributions to nuclear decommissioning funds would be 
repealed. The present law provision which does not allow 
deductions for pre-1984 decommissioning costs would also be 
repealed. The bill would exclude income received by a rural 
electric cooperative from any ``open access transaction'' or 
from any ``nuclear decommissioning transaction'' in determining 
whether a rural electric cooperative satisfies the 85-percent 
test (IRC section 501(c)(12)) for tax exemption. The bill would 
allow income received by a rural electric cooperative from a 
``load loss transaction'' to be treated as income collected 
from members for the purpose of meeting the 85-percent test. It 
would clarify recently issued U.S. Department of the Treasury 
regulations on the use of tax-exempt bonds by municipal gas 
agencies to secure a long-term prepaid supply of natural gas. 
The bill would create a safe harbor for prepayments equal to a 
community's recent average annual consumption, establish a 
procedure allowing gas agencies to seek a higher safe harbor 
amount from the Treasury Department when significant population 
growth and/or gas consumption is not reflected in historic 
averages, and allow coal companies that are part of a 
controlled group to prefund their coal premium liabilities.
    The production portion of the bill would create a $3-per-
barrel credit for crude oil and a credit of $0.50 per 1,000 
cubic feet of natural gas from marginal wells. The bill would 
suspend for taxable years beginning after December 31, 2003, 
and before January 1, 2007, the present law provision which 
limits percentage depletion deductions to no more than 65 
percent of the taxpayer's overall taxable income. It would 
extend through January 1, 2007, the present law provision which 
permits taxpayers to take deductions in excess of 100 percent 
of the net income from a single marginal well. It would allow 
delay rental payments incurred in connection with the 
development of oil or gas within the United States to be 
amortized over two years. Geological and geophysical costs 
incurred in connection with oil and gas exploration in the 
United States would be expensed over two years. Taxpayers would 
be able to claim a credit for the production of nonconventional 
fuels produced at wells placed in service after the date of 
enactment and before January 1, 2007. The bill would allow 
landfill gas sold to a third party from facilities placed in 
service after June 30, 1998, and before January 1, 2007, to be 
eligible for the credit for five years from the date of 
enactment or the date the facility is placed in service 
(whichever is later). The bill would make the minimum tax 
limitation inapplicable to the new business energy credits 
added by the bill. Intangible drilling costs (IDC) would be 
removed as an AMT preference item for taxable years beginning 
after December 31, 2003, and beginning before January 1, 2007. 
The bill would provide a 15-percent tax credit for certain 
tertiary recovery methods used on oil and gas property within 
the United States. The bill would also allow the Code section 
43 enhanced oil recovery credit to be taken against AMT in 
taxable years beginning in 2003, 2004, and 2005.
    The corporate inversion provision imposed a two-year 
moratorium on corporate inversions where the corporation has 
done little more than change its corporate residence for tax 
purposes. A corporate inversion is disregarded for U.S. tax 
purposes when 80 percent or more of the shareholders of the new 
foreign corporation were shareholders in the U.S. corporation. 
(After the inversion, the new foreign corporation would be 
taxed as a U.S. corporation.) The provision would apply to 
inversions that occur between March 4, 2003, and December 31, 
2004.
    The tax title to the conference report of H.R. 6, as passed 
by the House, contained three sections: conservation, 
reliability, and production.
    The conservation portion of the bill would allow a 15-
percent tax credit (up to $2,000) for residential solar hot 
water heaters, photovoltaics, and wind property. It would 
extend the tax credit for producing electricity (currently 1.8 
cents per kilowatt/hour indexed for inflation for a 10-year 
production period) from wind and closed-loop biomass (including 
closed-loop biomass co-fired with coal). It would add new 
qualifying sources, including open-loop biomass, landfill gas, 
``trash to steam,'' geothermal, solar, small irrigation 
facilities, and animal waste nutrients and set the credit at 
1.2 cents per kilowatt/hour indexed for inflation for a five-
year production period. The bill would set the solar and 
geothermal facilities credit at 1.8 cents per kilowatt/hour for 
five years. The bill would reduce the credit, up to 50 percent, 
if the facility receives tax-exempt financing or government 
grants, except co-fired biomass. Taxpayers would be allowed to 
choose between Code section 45 production tax credits or Code 
section 48 investment tax credits, with respect to geothermal 
and solar facilities. The bill would add a credit of 1.8 cents 
per kilowatt/hour for nuclear reactors approved by the Nuclear 
Regulatory Commission (NRC) capped at 6,000 MW. It would allow 
a 20-percent credit for residential and business fuel cells 
capped at $500 per one-half kilowatt of capacity. The bill 
would provide tax credits for fuel savings (as compared to 
baseline vehicles) for the purchase of certain fuel-efficient 
passenger cars and trucks, including fuel cell vehicles, hybrid 
vehicles, alternative fuel vehicles, and advanced lean burn 
vehicles. The bill would define hybrid cars and light trucks as 
vehicles that meet a 4-percent maximum available power (MAP) 
threshold. Tax credits for medium and heavy duty hybrid trucks 
would be allowed. The bill would clarify that the lessor/owner 
gets the credits and the lessor cannot be a tax-exempt entity. 
The amount that taxpayers may expense for certain refueling 
infrastructure would be increased, including new hydrogen 
infrastructure. The bill would allow a business credit for the 
manufacturing of highly efficient appliances. It would provide 
a 20-percent credit, up to $2,000, for the purchase of energy-
efficient building envelope components meeting 2000 IECC 
standards as supplemented on the date of enactment, including 
insulation, windows, and roofing systems and allow a tax credit 
to the builders of new energy-efficient homes. The bill would 
add a deduction, up to $1.50 per square foot, for upgrades to 
new or existing business property which reduce lighting, 
heating, cooling, or hot water costs by 50 percent compared to 
a baseline standard. It would allow a three-year cost recovery 
period for electricity ``smart meters'' and allow a 10-percent 
tax credit for the business purchase of certain systems that 
use both mechanical and heat power. Taxpayers would not have 
the benefits from the new credits in the bill recaptured by the 
AMT. Excise taxes on diesel-water emulsions that are calculated 
by taxing mixture based on the British Thermal Unit (BTU) value 
of the fuel would be reduced. The bill would expand the small-
producer ethanol credit and create a new excise tax credit for 
ethanol (which is 52 cents/gallon dropping to 51 cents/gallon 
under current law). The bill would extend Code section 40 
ethanol credit through 2010 and create a biodiesel excise tax 
credit at one dollar per gallon for soybeans and 50 cents per 
gallon for other feedstocks, effective through the end of 2005. 
The bill would defer the 2.5-cents-per-gallon transfer and 
repeal of ethanol excise tax exemption to highway legislation. 
It would also repeal the 4.3-cent excise tax on diesel fuel 
used by rail and barge.
    The reliability portion of the bill would allow a seven-
year cost recovery period for natural gas gathering lines and a 
provision ensuring that the tax benefits are not recaptured by 
the AMT. The bill would allow a 15-year cost recovery period 
for natural gas distribution lines and a 15-year cost recovery 
period for new electric transmission lines (defined as 69 
kilovolts or greater by the FERC). Small refiners would be able 
to expense 75 percent of the costs of making upgrades to 
produce low-sulfur fuel and a production credit of five cents 
per gallon up to 25 percent of the capital costs of those 
upgrades. The definition of a small refiner would be redefined 
from one who runs no more than 50,000 barrels on any given day 
to one with67,500 barrels or less of average daily production 
for a taxable year. The bill would allow taxpayers who sell their 
transmission assets as advocated by FERC Order 2000 to pay the 
resulting tax ratably over 8 years, but only if the taxpayer reinvests 
the proceeds in other utility property. It would repeal the present law 
``cost of service requirement'' allowing utilities to deduct pre-1984 
contributions to a qualified fund (upon transfer of the fund the seller 
takes the deductions, not the purchaser) and would allow utilities to 
deduct contributions made after the estimated useful life of the plant. 
The bill also would clarify that tax-exempt entities can transfer a 
qualified fund to taxable entities. The bill would allow cooperatives 
to exclude certain income derived from ``open access'' transactions 
(such as wheeling income from opening transmission or distribution 
facilities) from the 85-percent test and allow income from certain 
``loss load'' transactions to be treated as income from members for 
purpose of meeting the 85-percent test. It would clarify that excluded 
income also includes income from open access distribution services, but 
only with respect to electric energy furnished to end users served by 
distribution facilities other than those owned by the cooperative. A 
safe harbor would be set for prepaid gas contracts equal to historical 
usage and the bill would clarify that Code section 141(d) does not 
apply to such contracts. The bill would add a 17.5-percent investment 
tax credit for construction of advanced clean coal power plants. Five-
year depreciation for Integrated Gasification Combined Cycle coal 
plants would be allowed. Five-year cost recovery period for post-1975 
coal plants installing pollution control equipment and three-year cost 
recovery period for pre-1976 coal plants installing pollution control 
equipment would be allowed. The bill would also allow a 15-percent 
investment tax credit for clean coal and add a seven-year cost recovery 
period for natural gas transmission lines 42 inches or more in 
diameter, including the proposed Alaska natural gas pipeline.
    The production portion of the bill would add a $3-per-
barrel credit for production of crude oil or natural gas from 
marginal wells, with the credit phasing out as the price of oil 
or gas rises from $15 to $18 per barrel. The 65-percent overall 
income limitation and the 100-percent net income limitation for 
small oil and gas producers would be suspended through the end 
of 2004. The bill would allow delay rental payments to be 
amortized over two years, beginning on the date of enactment. 
Geological and Geophysical (G&G) expenses would be amortized 
over two years, beginning on the date of enactment as a result 
of the bill. The bill would extend the Code section 29 credit 
for certain existing facilities for 4 years at $3 per barrel or 
barrel equivalent and allow a $3-per-barrel credit for 4 years 
for new facilities placed in service after the date of 
enactment and before January 1, 2007. It would provide for a $3 
per barrel credit for 5 years for landfill gas facilities 
placed in service after June 30, 1998, and before January 1, 
2007 (facilities subject to New Source Performance Standards 
receive a credit of $2 per barrel). A $3-per-barrel equivalent 
credit would be provided for all coke facilities for 4 years 
(for existing plants from the date of enactment and for new 
facilities from the date placed in service), with facilities 
placed in service after December 31, 1992, and before July 1, 
1998 continuing to receive the present law credit amount. The 
bill would allow a $3-per-barrel equivalent credit for lignite 
facilities for four years capped at 200,000 cubic feet (35 
barrels) produced per day for all projects eligible. Code 
section 29 would be added to the list of credits treated as a 
general business credit. Coalmine methane, refined coal, 
including coal using the Fischer-Tropsch method and compression 
of animal carcasses through thermal depolymerization would be 
new qualifying fuels for tax incentives from production of non-
conventional sources. Taxpayers would be able to take business 
credits against the AMT as well as against the regular tax. The 
AMT preference for intangible drilling costs (IDCs) for 
independent producers would be repealed. Taxpayers would be 
able to claim the enhanced oil and recovery (EOR) credit 
against the AMT. The bill would expand the EOR credit to 
include natural gas processing facilities that re-inject CO2 
for tertiary recovery, with the credit only applying to new 
facilities capable of processing one trillion British thermal 
units of natural gas per day.
    Other provisions in the bill included accelerated 
depreciation for energy projects on Indian lands, allowing 
mutual funds to treat income from publicly traded partnerships 
as qualifying income, reducing taxes on cooperatives passing 
patronage dividends through to patrons, tax-exempt financing 
for certain energy-efficient developments on former 
``Brownfields'' (Green bonds), a 2-year suspension of duties on 
imported ceiling fans, and a suspension of duties on nuclear 
vessel heads and steam generators.
    The conference report on H.R. 1308, the ``Working Families 
Tax Relief Act of 2004,'' which is discussed in greater detail 
above, extended several energy-related tax laws through 2005. 
The extended provisions included the Code section 45 production 
tax credit for electricity produced using wind, closed-loop 
biomass and poultry waste, the suspension of the 100-percent of 
taxable income limitation on percentage depletion from marginal 
wells, the tax credit for electric vehicles and the deduction 
for clean fuel vehicles. The conference report was approved on 
September 23, 2004, in the House by a vote of 339-65 and in the 
Senate on the same day by a vote of 92-3. H.R. 1308 was signed 
by the President on October 4, 2004 (P.L. 108-311).
    Some provisions similar to those contained in the House 
bill (H.R. 1531) or the conference agreement to H.R. 6 (which 
was not enacted) were enacted as part of H.R. 4520, the 
``American Jobs Creation Act,'' discussed above. These 
provisions include the repeal of the 4.3-cents-per-gallon 
General Fund excise tax rates on railroad diesel fuel and fuel 
used in barges operating on the designated inland waterways 
system, allowing rural electric cooperatives to participate in 
open access transactions, an expansion of the Code section 45 
production tax credit to open-loop biomass and municipal solid 
waste, the ``green bonds'' proposal, allowing Code sections 40 
and 45 credits to offset AMT liability, Alaskan natural gas 
incentives, the reduction in taxes on cooperatives passing 
patronage dividends through to patrons, treating income from 
publicly traded partnerships as qualifying income for mutual 
funds, the suspension of customs duties on ceiling fans and 
nuclear vessel heads, and a provision to discourage corporate 
inversions. H.R. 4520 was signed into law by the President on 
October 22, 2004 (P.L. 108-357).

e. Taxpayer Protection and IRS Accountability

    Representative Portman introduced H.R. 1528, the ``Taxpayer 
Protection and IRS Accountability Act of 2003,'' on April 1, 
2003. On April 3, 2003, the Committee ordered favorably 
reported, H.R. 1528, as amended, by voice vote. The bill passed 
the House by a vote of 252-170 on June 19, 2003. A companion 
bill was passed by the Senate, but the House and Senate 
versions of the bill were not considered by a conference 
committee.
    The bill, as passed by the House, contained provisions 
regarding tax administration, penalties and interest, the Tax 
Court, confidentiality and disclosure.
    The tax administration provisions include a provision that 
would extend the due date for filing and paying individual 
income taxes to April 30, provided that the taxpayer files an 
electronic return and pays the balance of the liability by the 
due date. Most taxpayers that choose to file electronically 
would have to use an intermediary and would be unable to file 
directly with the IRS. The bill also would require the 
Commissioner of the IRS to issue guidelines for determining 
appropriate disciplinary action, including termination, for 
employees that violate certain rules. The bill would increase 
the authorization for low-income taxpayer clinics and permit 
the National Taxpayer Advocate to appoint a counsel that would 
report directly to the National Taxpayer Advocate. The bill 
also would instruct the IRS to revise their published 
instructions and require the Treasury to conduct a study of the 
practices of the IRS concerning their application of liens and 
levies. There are provisions that would direct the Treasury 
Inspector General for Tax Administration to report allegations 
of serious IRS employee misconduct with a summary of complaints 
by category, and to publish annually statistics on awards of 
costs and certain fees in administrative and court proceedings. 
The bill also would require the Treasury Inspector General for 
Tax Administration to report annually to the Congress on the 
abatement of penalties and the reasons for such abatements, and 
to issue a report evaluating better means of communicating with 
taxpayers such as electronic mail or fax. The statutory 
requirement that the Joint Committee on Taxation conduct annual 
reviews of the IRS would be extended through 2009. The bill 
would allow State-based health insurance to meet the definition 
of qualified health insurance for purposes of the tax credit 
available to individuals receiving a trade adjustment 
allowance. The bill also would require motor fuels tax refunds 
to be paid by electronic funds transfer if elected by the 
recipient. A recontribution of amounts attributable to an 
improper levy on an individual retirement account (IRA) would 
be treated as a rollover under the bill. The declaratory 
judgment procedures available to charities would be extended to 
other tax-exempt organizations. The bill would allow the IRS to 
recognize a joint venture whose only members are husband and 
wife filing a joint return to be treated as a sole 
proprietorship instead of as a partnership.
    The penalty and interest provisions of the bill would 
change the rules relating to the penalty provisions related to 
the individual's estimated payments, including raising the 
penalty threshold from $1,000 in liability to $1,600. Interest 
payments resulting from unreasonable IRS errors or delays would 
be abated and interest netting would be expanded for individual 
taxpayers. The bill would exclude from gross income interest 
paid to individuals on overpayments of Federal income tax. The 
taxpayer would earn interest on amounts deposited with the IRS 
for the purpose of suspending interest on potential 
underpayments. The bill would expand the penalty provisions 
related to the submission of frivolous tax returns, including 
increasing the amount of the IRS-imposed penalty from $500 to 
$5,000. Waivers of certain penalties for unintentional minor 
errors would be granted for individuals with a history of tax 
compliance.
    H.R. 1528 would modify the jurisdiction of the United 
States Tax Court. In certain cases where the Tax Court does not 
have jurisdiction over the underlying tax liability, appeals of 
collection due process determinations are brought in the 
district court of the United States. The bill would provide 
that all such cases would be brought to the Tax Court.
    H.R. 1528 includes provisions relating to the 
confidentiality and disclosure of taxpayer returns. Former 
spouses would no longer be required to make a written request 
for disclosure of collection activities with respect to a joint 
return and would permit such disclosures pursuant to an oral 
request. The bill clarifies that the IRS may not inspect the 
return of a taxpayer's representative solely on the basis of 
such representative's relationship to the taxpayer. Disclosures 
of tax return information for judicial or administrative tax 
proceedings would be limited to the portions of the return 
information that directly relate to the resolution of an issue 
in such proceedings.
    The bill would prohibit taxpayer identification numbers to 
be disclosed on publicly available summaries of accepted 
offers-in-compromise. The bill also would require Federal, 
State and local governments to conduct on-site safeguard 
reviews of contractors and other agents receiving Federal tax 
return information. Standards relating to requests for tax 
return disclosures and consent to tax return disclosures would 
be raised. Unauthorized disclosures and consents would be 
punishable by criminal penalty. The IRS would be required to 
notify a taxpayer if the taxpayer's return or return 
information was willfully disclosed or inspected without 
authorization. Such unauthorized disclosures and inspections 
would be reported annually by the IRS to the Joint Committee on 
Taxation. The bill would extend present law permitting 
disclosure of tax return information to law enforcement 
officials to include circumstances involving imminent danger of 
death or physical injury to an individual. The bill also would 
allow the IRS to use additional means of contacting taxpayers, 
including the internet, regarding undelivered refunds. 
Information eligible for disclosure by the IRS to State 
officials related to Code section 501(c) organizations would be 
expanded. The bill would provide that the Office of the 
Taxpayer Advocate would be permitted to withhold confidential 
communications between itself and taxpayers from the IRS and 
the Department of Justice.
    The conference agreement for H.R. 4520, the ``American Jobs 
Creation Act of 2004,'' included the provision from H.R. 1528 
that would allow taxpayers to earn interest on amounts 
deposited with the IRS for the purpose of suspending interest 
on potential underpayments. As noted above, H.R. 4520 was 
signed by the President on October 22, 2004 (P.L. 108-357).

f. Employee Benefits Proposals

    On May 5, 2004, Representative McCrery introduced H.R. 
4279, the ``Help Efficient, Accessible, Low-cost, Timely 
Healthcare (HEALTH) Act of 2004.'' On May 12, 2004, the House 
approved the bill by a vote of 273-152. No further action was 
taken in the Senate. As passed by the House, the bill would 
allow up to $500 of unused funds remaining in a health Flexible 
Spending Account (FSA) to be (1) carried forward in the FSA for 
use during the next year, or (2) contributed to a Health 
Savings Account (HSA). Under current law, unused funds in an 
FSA at the end of the year are forfeited to the employer. This 
incentive to quickly spend unused funds before the end of the 
year leads to excess health care consumption. The ability to 
roll funds over into the next year would encourage more 
employees to participate in FSAs without fear of losing money 
at the end of the year and would reduce end-of-the-year excess 
spending and overuse of health care services. The Senate did 
not act on the bill.
    On May 17, 2004, Representative Cantor introduced H.R. 
4372, the ``Working Families Assistance Act of 2004,'' which 
incorporated an FSA rollover provision similar to H.R. 4279. On 
June 22, 2004, the House approved the bill by a voice vote 
under suspension of the rules. No further action was taken on 
the legislation. As passed by the House, the bill would allow 
up to $500 of unused dependent care funds in a dependent care 
Flexible Spending Account (FSA) to be carried forward in the 
FSA for use during the next year. Under current law, unused 
funds in an FSA at the end of the year are forfeited to the 
employer. This incentive to quickly spend unusedfunds before 
the end of the year leads to excess dependent care consumption. The 
ability to roll funds over into the next year would encourage more 
people to participate in FSAs without fear of losing money at the end 
of the year and would reduce end-of-the-year excess spending and 
overuse of dependent care services. The Senate did not act on the bill.

g. Expiring Provisions

    H.R. 3521, the ``Tax Relief Extension Act of 2003,'' 
included several extensions of expiring provisions which were 
later included in the House-passed version of H.R. 4520 and 
enacted by the ``Working Families Tax Relief Act of 2004'' 
(P.L. 108-311). H.R. 3521 was introduced by Chairman Thomas on 
November 19, 2003, and it was passed the following day by the 
House under suspension of the rules by voice vote. The Senate 
took no action on the bill.
    The bill, as passed by the House, would extend, without 
modification, the following present-law provisions by one year, 
generally through December 31, 2004: parity in the application 
of certain limits to mental health benefits; the work 
opportunity credit; the welfare-to-work credit; the credit to 
holders of qualified zone academy bonds; the cover over of the 
excise tax on distilled spirits to Puerto Rico and the Virgin 
Islands; the enhanced deduction for qualified computer 
donations; the exclusion of certain expenses of elementary and 
secondary school teachers from gross income; expensing of 
environmental remediation costs in connection with the 
abatement or control of hazardous substances at a qualified 
contaminated site; disclosure authority relating to terrorist 
activities; the availability of Archer medical savings 
accounts; authority to issue New York Liberty Zone bonds; tax 
incentives for investment in the District of Columbia; 
authority for any State to participate in a combined Federal 
and State employment tax reporting program; and the allowance 
for nonrefundable personal credits to be applied against the 
alternative minimum tax.
    As discussed above, each of these provisions was enacted 
into law by H.R. 1308, the ``Working Families Tax Relief Act of 
2004'' (P.L. 108-311), each with a two-year extension through 
December 31, 2005 (through December 31, 2009, in the case of 
the authority to issue New York Liberty Zone bonds), without 
modification of the underlying provision.
    H.R. 3521 also extended for one year the special rules 
under Code section 809 for life insurance companies and the 
five-year carryback rule for certain net operating losses.

h. The Death Tax Repeal Permanency Act of 2003

    On June 12, 2003, Representative Dunn introduced H.R. 8, 
the ``Death Tax Repeal Permanency Act of 2003.'' On June 18, 
2003, the House approved the bill by a vote of 264-163. As 
passed by the House, the bill would repeal the sunset of 
Section V of the Economic Growth and Tax Relief Reconciliation 
Act of 2001, relating to estate, gift, and generation-skipping 
transfer taxes. The Senate took no action on the bill.

i. Highway Trust Fund and Excise Taxes

            Transportation Equity Act: A Legacy for Users
    Representative Don Young introduced H.R. 3550, ``the 
Transportation Equity Act: A Legacy for Users Act,'' on 
November 20, 2003. The House passed the bill by a vote of 357-
65 on April 2, 2004. The Senate substantially amended H.R. 3550 
and passed the bill by unanimous consent. The bill went to the 
conference committee but was not reported out of that 
committee.
    The bill would, among other things, authorize funds for 
highways, highway safety programs, and transit programs. 
Although primarily a transportation bill, the bill contains a 
number of tax provisions. Title I of the bill contains a 
provision that would extend funding for expenditures made for 
projects to reduce highway use tax evasion before October 1, 
2009. Title IX of the bill contains a number of tax provisions. 
Many of these provisions (in identical or similar form) were 
enacted into law as part of H.R. 4520, the ``American Jobs 
Creation Act of 2004'' (P.L. 108-357). The provisions that were 
enacted as part of H.R. 4520 follow in the next four 
paragraphs.
    The bill would repeal the reduced tax rate on sales of 
gasoline for blending with alcohol as well as the reduced tax 
rate on sales of alcohol fuel. The bill would provide an excise 
tax credit, in place of the reduced tax rate on gasoline, for 
certain blenders of alcohol fuel mixtures. The bill would 
provide that all alcohol fuels excise tax credits and payments 
are paid from the General Fund. The bill would provide outlay 
payments to producers of alcohol fuel mixtures, and would also 
transfer the full amount of alcohol fuel excise taxes to the 
Highway Trust Fund.
    The bill includes a number of provisions designed to 
prevent fuel fraud. The bill would tax jet fuel at the terminal 
rack, would require fuel to be dyed mechanically instead of 
manually, and would expand the authority of the IRS to inspect 
records at sites where fuel is produced or stored. In addition, 
the bill would require pipeline or vessel operators to register 
with the Secretary of the Treasury in order for their bulk 
transfers of taxable fuel to a terminal to be exempt from tax. 
The bill also would require pipeline or vessel operators to 
display such registration or be subject to a penalty. The bill 
also would provide for penalties for failure to register and 
failure to comply with the requirement to report certain 
information concerning the movement of fuel to the IRS.
    The bill also would conform the procedure for obtaining 
refunds on sales of gasoline to tax-exempt users to the 
procedure used for diesel fuel and kerosene--the registered 
ultimate vendor claims the refund. The bill would permit two 
registered parties to switch position holder status with 
respect to fuel within a registered terminal if certain 
conditions are met. The bill would dedicate amounts from 
certain penalties related to fuel to the Highway Trust Fund. 
The bill would make certain modifications to the heavy vehicle 
use tax, including eliminating the reduced rate of tax for 
Canadian and Mexican vehicles.
    The bill would extend enhanced Code section 179 expensing 
so that small businesses can immediately expense up to $100,000 
of new investments through 2007. The bill would provide 
alternative minimum tax relief by repealing the 90-percent 
limitation on the use of foreign tax credits against the 
alternative minimum tax, and by allowing the tax benefits 
generated by farmer income averaging to be used in computing 
the alternative minimum tax.
    A discussion of the provisions of the bill that were not 
enacted in H.R. 4520 follows. The bill would extend Highway 
Trust Fund and Aquatic Resources Trust Fund excise taxes 
through September 30, 2011, and would extend the expenditure 
authority for these funds through September 30, 2009. The bill 
would transfer the full amount of motorboat fuel taxes and 
certain small engine fuel taxes to the Aquatic Resources Trust 
Fund. The bill would permit collection of fuel excise taxes 
against the bond posted by the importer with the Customs 
Service if any other person that is not registered with the 
Secretary of the Treasury is liable for such tax and the tax is 
not paid on time. The bill would limit ultimate vendor refund 
claims for diesel fuel or kerosene used for farming to 250 
gallons per farmer per claim period. The bill would phase out 
the 90-percent limitation on the use of net operating loss 
deductions against the alternative minimum tax. The bill would 
expand the exemption from the alternative minimum tax for 
corporations with average annual gross receipts for the prior 
three years of not more than $20 million.
            Surface Transportation Extension Act of 2004
    Representative Don Young introduced H.R. 3783, the 
``Surface Transportation Extension Act of 2004,'' on February 
10, 2004. The House passed the bill the following day by a vote 
of 421-0. The bill was sent to the Senate, which took no action 
on the bill. Provisions similar to those in H.R. 3783 (with 
different dates) were enacted in H.R. 3850, also named the 
``Surface Transportation Extension Act of 2004'' (P.L. 108-
202). H.R. 3783 would provide an extension of highway, highway 
safety, motor carrier safety, transit, and other programs 
funded out of the Highway Trust Fund pending enactment of a law 
reauthorizing the Transportation Equity Act for the 21st 
Century (TEA-21). There are a couple of tax-related provisions 
in the bill. The bill would extend funding for expenditures 
made on projects to curb highway use tax evasion before July 1, 
2004. The bill would extend authorization of the use of the 
Highway Trust Fund, the Mass Transit Account, and the Aquatic 
Resources Trust Fund for obligations under TEA-21 before July 
1, 2004.

j. Expansion of Renewal Communities

    On April 22, 2004, Representative Ernest Istook introduced 
H.R. 4193, a bill to amend the Internal Revenue Code of 1986 to 
allow for the expansion of areas designated as renewal 
communities based on 2000 census data and to treat certain 
census tracts with low populations as low-income communities 
for purposes of the new markets tax credit. The bill passed the 
House under suspension of the rules by voice vote on May 17, 
2004. A modified version H.R. 4193 was included in H.R. 4520, 
the ``American Jobs Creation Act of 2004'' (P.L. 108-357).
    Renewal communities include census tracts that have: (1) a 
poverty rate of at least 20 percent, (2) if in an urban area, 
at least 70 percent of households below 80 percent of the 
median household income within the local jurisdiction, (3) an 
unemployment rate of at least 1.5 times the national 
unemployment rate, and (4) pervasive poverty, unemployment, and 
general distress. Population and poverty rates are based on 
1990 census data.
    H.R. 4520, as discussed above, authorizes the Secretary of 
Housing and Urban Development to expand a designated renewal 
community based on 2000 census data to include certain 
contiguous census tracts that have increased poverty rates 
using in the 2000 data as compared to 1990, meets certain 
population and poverty rate requirements, or is an area of 
general distress.

k. Simple Tax for Seniors Act

    Representative Max Burns introduced H.R. 4109, the ``Simple 
Tax for Seniors Act,'' on April 1, 2004. The bill passed the 
House under suspension of the rules by a vote of 418-0 on June 
2, 2004. The Senate did not act on the bill.
    H.R. 4109, as passed by the House, would require the IRS to 
offer a simplified tax form for individuals age 65 and older. 
The form would be designated ``Form 1040S'' and would be 
similar to Form 1040EZ. The IRS would be instructed to make the 
form available regardless of the individual's receipt of Social 
Security benefits or any distributions from retirement plans, 
their receipt of interest and dividends, the amount of their 
capital gains and losses, and their taxable income.

l. Tax Simplification for Americans Act of 2004

    On July 15, 2004, H.R. 4841, the ``Tax Simplification for 
Americans Act of 2004'' was introduced by Representative Max 
Burns. The bill, as amended, passed the House under suspension 
of the rules by voice vote on July 21, 2004. The Senate did not 
act on the bill.
    The bill, as passed by the House, would change the name of 
the Head of Household filing status to Single Head of 
Household. It would also direct the IRS to expand access to the 
Form 1040EZ and Form 1040 by allowing taxpayers with up to 
$100,000 in taxable income to use these forms. It would also 
permit taxpayers with more than $1,500 in interest income to 
use Form 1040EZ. Finally, the bill would eliminate a series of 
outdated or ``deadwood'' provisions from the Code. The 
provision from the introduced bill that would treat an 
individual as having attained an age on the date of the 
anniversary of such individual's birth which corresponds to 
such age was dropped prior to floor action.

m. Tax Simplification for America's Job Creators Act of 2004

    Representative Phil Crane introduced H.R. 4840, the ``Tax 
Simplification for America's Job Creators Act of 2004,'' on 
July 15, 2004. The bill passed the House under suspension of 
the rules by a vote of 424-0 on July 21, 2004. The Senate did 
not act on the bill.
    The bill would extend for two years (through 2007) the 
enhanced Code section 179 small business expensing tax relief 
included in the ``Jobs and Growth Tax Relief Reconciliation Act 
of 2003.'' As a result, the amount small businesses can expense 
(immediately deduct) will remain at $100,000 instead of 
dropping to $25,000. The amount that can be expensed and the 
phase-out threshold will continue to be indexed for inflation. 
The bill would also enable many small corporations to continue 
using the less complex cash method of accounting by indexing 
forinflation the threshold for using the cash method of 
accounting, which is currently set at $5 million gross receipts. The 
bill would also eliminate a series of outdated or ``deadwood'' 
provisions from the Code.

n. Adoption Tax Relief Guarantee Act

    On March 4, 2003, Representative DeMint introduced H.R. 
1057, the ``Adoption Tax Relief Guarantee Act.'' The bill 
passed the House under suspension of the rules on September 23, 
2004, by a vote of 414-0. The Senate did not act on the bill.
    The bill would repeal the sunset of the ``Economic Growth 
and Tax Relief Reconciliation Act of 2001'' with respect to the 
expansion of the adoption credit. Under the bill, the adoption 
credit would remain at $10,000 (as indexed) after the December 
31, 2010 sunset. The bill also would retain the $150,000 higher 
income cap for a taxpayer to be eligible to claim the credit 
after the sunset.

o. Bows and Arrows Archery Revenue Reform and Opportunity for Workers 
        Act

    On December 8, 2003, Representative Paul Ryan introduced 
H.R. 3652, the ``Archery Revenue Reform and Opportunity for 
Workers Act''. The Committee on Ways and Means was discharged 
and the bill passed without objection on December 8, 2003. H.R. 
3652 was sent to the Senate and was referred to the Finance 
Committee, which did not report the bill. H.R. 3652, as passed 
by the House (with a modified effective date), was enacted into 
law as part of H.R. 4520, the ``American Jobs Creation Act of 
2004'' (P.L. 108-357). The bill would impose an excise tax of 
12 percent on the sale of arrows, defined as shafts with 
components attached. The bill would impose an excise tax of 11 
percent on the sale of certain broadhead arrow points, instead 
of the 12.4 percent tax that applies to other arrow components.

                          3. OTHER TAX MATTERS

a. House Resolutions Expressing the Sense of the House

    The House passed resolutions on tax related matters during 
the 108th Congress.
    On April 8, 2003, Representative Jack Kingston introduced 
H. Con. Res. 141, a concurrent resolution expressing the sense 
of the Congress that the Internal Revenue Code should be 
fundamentally reformed to be fairer, simpler, and less costly 
and to encourage economic growth, individual liberty, and 
investment in American jobs. The House agreed to the resolution 
under suspension of the rules on April 10, 2003.
    On July 7, 2004, Representative Phil English introduced H. 
Res. 705, a resolution urging the President to resolve the 
disparate treatment of direct and indirect taxes presently 
provided by the World Trade Organization. The House agreed to 
the resolution under suspension of the rules on July 14, 2004.

b. Foreign Operations, Export Financing and Related Appropriations Act, 
        2005

    The conference report to H.R. 4818, the ``Foreign 
Operations, Export Financing, and Related Appropriations Act, 
2005,'' passed the House and the Senate on November 20, 2004. 
This appropriations bill included a provision to allow agents, 
designated by the Chairmen of the House or Senate Committees on 
Appropriations, access to IRS facilities and any tax returns or 
return information. This provision was removed from the bill 
before the bill was sent to the President.

c. Budget Hearings

    On Tuesday February 4, 2003, the full Committee held a 
hearing on the President's Fiscal Year 2004 budget with the 
Honorable John Snow, Secretary, U.S. Department of the 
Treasury. The focus of the hearing was to discuss the details 
of the President's budget proposals that are within the 
Committee's jurisdiction.
    On Wednesday February 5, 2003, the full Committee held a 
hearing on the President's Fiscal Year 2004 budget with the 
Honorable Mitch Daniels, Director, Office of Management and 
Budget. The focus of the hearing was for the Director to 
discuss the details of the President's proposals that are 
within the Committee's jurisdiction.
    On Thursday February 6, 2003, the full Committee held a 
hearing on the President's Fiscal Year 2004 budget with the 
Honorable Tommy G. Thompson, Secretary, U.S. Department of 
Health and Human Services. The focus of the hearing was to 
review the President's Fiscal Year 2004 budget proposals for 
Health and Human Services.
    On Wednesday March 12, 2003, the full Committee held a 
hearing on the President's Fiscal Year 2004 budget with the 
Honorable Elaine L. Chao, Secretary, U.S. Department of Labor. 
The focus of the hearing was the Department of Labor proposals 
in the President's Fiscal Year 2004 budget that are within the 
Committee's jurisdiction.
    On Tuesday February 3, 2004, the full Committee held a 
hearing on the President's Fiscal Year 2005 budget with the 
Honorable John Snow, Secretary, U.S. Department of the 
Treasury. The focus of the hearing was to discuss the details 
of the President's budget proposals that are within the 
Committee's jurisdiction.
    On Tuesday February 10, 2004, the full Committee held a 
hearing on the President's Fiscal Year 2005 budget with the 
Honorable Tommy G. Thompson, Secretary, U.S. Department of 
Health and Human Services. The focus of the hearing was to 
review the President's Fiscal Year 2005 budget proposals for 
the U.S. Department of Health and Human Services.
    On Wednesday February 11, 2004, the full Committee held a 
hearing on the President's Fiscal Year 2005 budget with the 
Honorable Pamela F. Olson, Assistant Secretary for Tax Policy, 
U.S. Department of the Treasury; accompanied by Gregory F. 
Jenner, Deputy Assistant Secretary for Tax Policy. The Treasury 
official discussed the details of the tax proposals in the 
President's budget.
    On Wednesday February 11, 2004, the full Committee held a 
hearing on the President's Fiscal Year 2005 budget with the 
Honorable Joshua B. Bolten, Director, Office of Management and 
Budget. The Director discussed the details of the tax proposals 
in the President's budget.
    On Thursday March 4, 2004, the full Committee held a 
hearing on the President's Fiscal Year 2005 budget with the 
Honorable Elaine L. Chao, Secretary, U.S. Department of Labor. 
The focus of the hearing was on Department of Labor proposals 
in the President's Fiscal Year 2005 budget within the 
Committee's jurisdiction.

d. President's Economic Growth Proposals

    On March 4, 5, 6, and 11, 2003, the full Committee held 
hearings on the President's economic growth proposals. The 
witnesses for the March 4, 2003, hearing were the Honorable 
John W. Snow, Secretary, U.S. Department of the Treasury; 
accompanied by the Honorable Pamela F. Olson, Assistant 
Secretary for Tax Policy, and the Honorable Richard H. Clarida, 
Assistant Secretary for Economic Policy.
    The witnesses for the March 5, 2003, and March 6, 2003, 
hearing were experts from the business and academic sectors. 
The witnesses for the March 11, 2003, hearing were Members of 
Congress.

e. Pension Plan Funding Hearing

    On Wednesday, April 30, 2003, the Subcommittee on Select 
Revenue Measures held a hearing on pension plan funding. The 
hearing focused on funding rules related to defined benefit 
pension plans and evaluated proposals for replacing the 30-year 
Treasury rate that is used in pension plan calculations.

f. Hearing on S Corporation Reforms

    On Thursday, June 19, 2003, the Subcommittee on Select 
Revenue Measures held a hearing on S Corporations. The focus of 
the hearing was to explore the manner in which we regulate S 
corporations and the approaches to reform that would allow S 
corporations greater flexibility to access capitol markets.

g. Hearing on Pension Security and Defined Benefit Plans

    On Tuesday, July 15, 2003, the Subcommittee on Select 
Revenue Measures held a joint hearing with the Subcommittee on 
Employer-Employee Relations of the Committee on Education and 
the Workforce. The focus of the hearing was to examine the 
Administration's proposal to replace the 30-year Treasury rate 
with a yield curve discount rate and to implement other pension 
funding reforms.

h. Hearing on Free Electric Filing and the National Taxpayer Advocate 
        Annual Report

    On Thursday, February 13, 2003, the Subcommittee on 
Oversight held a hearing on free electronic filing and the 
National Taxpayer Advocate Annual Report. The hearing focused 
on the IRS Free Filing initiative, electronic tax 
administration, and the National Taxpayer Advocate's Annual 
Report.

i. Hearing on the Use of Private Collection Agencies to Improve IRS 
        Debt Collection

    On Tuesday, May 13, 2003, the Subcommittee on Oversight 
held a hearing on the use of private collection agencies to 
improve IRS Debt Collection. The hearing focused on the 
Administration's proposal to use private collection agencies to 
support the IRS's collection efforts.

j. Hearing on IRS Efforts to Modernize its Computer Systems

    On Thursday, February 12, 2004, the Subcommittee on 
Oversight held a hearing on IRS efforts to modernize its 
computer systems. The hearing focused on the IRS's efforts to 
modernize its computer systems and independent reviews ordered 
by IRS Commissioner Mark Everson to assess the IRS's Business 
Systems Modernization program.

k. Tax Simplification Hearing

    On Tuesday, June 15, 2004, the Subcommittee on Oversight 
held a hearing on tax simplification. Proposals to simplify the 
tax laws that were discussed included: the Houghton 
simplification package which includes bills that would repeal 
the Alternative Minimum Tax, H.R. 4135, the ``Taxation of Minor 
Children Simplification Act,'' H.R. 4136, the ``Education Tax 
Credit Simplification Act,'' H.R. 4137, the ``Small Business 
Tax Modernization Act,'' H.R. 4138, the ``Personal Holding 
Company Tax Repeal Act,'' and H.R. 4139, the ``State Business 
Law Tax Conformity Act.''

l. First in a Series of Hearings on Tax Exemption: Pricing Practices of 
        Hospitals

    On Tuesday, June 22, 2004, the Subcommittee on Oversight 
held a hearing on pricing practices of hospitals. The focus of 
the hearing examined the lack of transparency in the current 
hospital pricing system. Consumers, including the uninsured, do 
not have access to such information on the costs of medical 
treatment across hospitals.

m. Hearing on the IRS Enforcement of the Reporting of Tip Income

    On Thursday, July 15, 2004, the Subcommittee on Oversight 
held a hearing to review the IRS enforcement of the reporting 
of tip income. The hearing focused on IRS enforcement of tip 
reporting, the progress of the Tip Reporting Determination 
Agreement (TRDA), Tip Reporting Alternative Commitment (TRAC), 
and Employer-designed Tip Reporting Alternative Commitment 
(EmTRAC) agreements, proposed legislation addressing the 
restaurant and salon industries, and solutions to increase 
compliance from employers and employees in the service 
industries.

n. Hearing on Select Tax Issues

    On Thursday, September 23, 2004, the Subcommittee on Select 
Revenue Measures held a hearing on select tax issues. The 
hearing allowed Members of the House who do not sit on the 
committee on Ways and Means to testify on discrete tax 
legislation in which they are interested.

                 B. Legislative Review of Trade Issues


       1. BILLS CONSIDERED UNDER TRADE PROMOTION AUTHORITY (TPA)

a. Legislation

            i. United States-Chile Free Trade Agreement Implementation 
                    Act
    On July 10, 2003, the Committee informally approved draft 
legislation to implement the United States-Chile Free Trade 
Agreement, by voice vote, without amendment. The Committee 
conducted this informal markup in order to provide advice to 
the Administration on the implementing bill and Statement of 
Administrative Action. On July 15, 2003, Majority Leader DeLay 
introduced (by request) H.R. 2738, the ``United States-Chile 
Free Trade Agreement Implementation Act.'' On July 17, 2003, 
the Committee held a formal mark-up session to consider H.R. 
2738. The Committee approved the bill and favorably reported 
H.R. 2738, without amendment, by a recorded vote of 33-5. On 
July 24, 2003, the House passed the bill by a recorded vote of 
276-152. On July 31, 2003, the Senate passed H.R. 2738, without 
amendment, by a recorded vote of 65-32. The President signed 
the bill into law on August 3, 2003 (P.L. 108-77).
            ii. United States-Singapore Free Trade Implementation Act
    On July 10, 2003, the Committee informally approved draft 
legislation to implement the United States-Singapore Free Trade 
Agreement, by voice vote, without amendment. The Committee 
conducted this informal markup in order to provide advice to 
the Administration on the implementing bill and Statement of 
Administrative Action. On July 15, 2003, Majority Leader DeLay 
introduced (by request) H.R. 2739, the ``United States-
Singapore Free Trade Agreement Implementation Act.'' On July 
17, 2003, the Committee held a formal mark-up session to 
consider H.R. 2739. The Committee approved the bill and 
favorably reported H.R. 2739, without amendment, by a recorded 
vote of 32-5. On July 24, 2003, the House passed the bill by a 
recorded vote of 272-155. On July 31, 2003, the Senate passed 
H.R. 2739, without amendment, by a recorded vote of 66-32. The 
President signed the bill into law on August 3, 2003 (P.L. 108-
78).
            iii. United States-Australia Free Trade Implementation Act
    On June 23, 2004, the Committee informally approved draft 
legislation to implement the United States-Australia Free Trade 
Agreement, by voice vote, without amendment. The Committee 
conducted this informal markup in order to provide advice to 
the Administration on the implementing bill and Statement of 
Administrative Action. On July 6, 2004, Majority Leader DeLay 
introduced (by request) H.R. 4759, the ``United States-
Australia Free Trade Agreement Implementation Act.'' On July 8, 
2004, the Committee held a formal mark-up session to consider 
H.R. 4759. The Committee approved the bill and favorably 
reported H.R. 4759, by voice vote, without amendment. On July 
14, 2004, the House passed the bill by a recorded vote of 314-
109, 1 Present. On July 15, 2004, the Senate passed H.R. 4759, 
without amendment, by a recorded vote of 80-16. The President 
signed the bill into law on August 3, 2004 (P.L. 108-286).
            iv. United States-Morocco Free Trade Implementation Act
    On July 14, 2004, the Committee informally approved draft 
legislation to implement the United States-Morocco Free Trade 
Agreement, by a roll call vote of 23-1, with one Member voting 
present, without amendment. The Committee conducted this 
informal markup in order to provide advice to the 
Administration on the implementing bill and Statement of 
Administrative Action. On July 15, 2004, Majority Leader DeLay 
introduced (by request) H.R. 4842, the ``United States-Morocco 
Free Trade Agreement Implementation Act.'' On July 20, 2004, 
the Committee held a formal mark-up session to consider H.R. 
4842. The Committee approved the bill and favorably reported 
H.R. 4842, without amendment, by a recorded vote of 26-0. On 
July 22, 2004, the House passed the bill by a recorded vote of 
323-99. On July 22, 2004, the Senate passed H.R. 4842, without 
amendment, by unanimous consent. The President signed the bill 
into law on August 17, 2004 (P.L. 108-302).

b. Hearings

    i. On June 10, 2003, the Subcommittee held a hearing on 
implementation of the United States bilateral free trade 
agreements with Chile and Singapore. The Chile and Singapore 
Free Trade Agreements (FTAs) were the first trade agreements 
considered by the Congress under the procedures outlined in 
TPA. Witnesses at the hearing included Deputy United States 
Trade Representative Peter Allgeier and representatives from 
the business community, labor unions, and non-governmental 
organizations. The hearing focused on Congressional 
consideration of the Chile and Singapore FTAs and the benefits 
that both agreements bring to American businesses, farmers, 
workers, and the U.S. economy.
    ii. On June 16, 2004, the Committee held a hearing on 
implementation of the United States bilateral free trade 
agreement with Australia. The agreement was signed on May 18, 
2004, by Ambassador Zoellick and Australian Trade Minister Mark 
Vaile. Witnesses at the hearing included Deputy United States 
Trade Representative Josette Sheeran Shiner and Chief 
Agricultural Negotiator in the Office of the United States 
Trade Representative, Allen Johnson, as well as representatives 
from the business community. The hearing focused on 
Congressional consideration of the United States-Australia FTA 
and the benefits that the agreement brings to American 
businesses, farmers, workers, consumers, and the U.S. economy.
    iii. On July 7, 2004, the Committee held a hearing on 
implementation of the United States bilateral free trade 
agreement with Morocco. The United States-Morocco FTA was the 
fourth trade agreement considered by the Congress under the 
procedures outlined in TPA. Witnesses at the hearing included 
Deputy United States Trade Representative Peter Allgeier and 
representatives from the business community and non-
governmental organizations. The hearing focused on 
Congressional consideration of the United States-Morocco FTA 
and the benefits that the agreement brings to American 
businesses, farmers, workers, and the U.S. economy.

c. Reports

    In June 2003, the Committee received from the International 
Trade Commission (ITC) the report entitled ``U.S.-Chile Free 
Trade Agreement: Potential Economywide and Selected Sectoral 
Effects'' (Investigation No. TA-2104-5 (Publication 3605; June 
2003)). The ITC found that the FTA's most important benefits 
address non-tariff barriers and thus are not easily quantified 
or observed. The ITC predicted that the reduction of both 
tariffs and non-tariff barriers under the FTA could result in 
increased U.S. exports of construction and mining machinery, 
motor vehicles, and telecommunications equipment, and increased 
U.S. imports of avocados, prepared and preserved fruit, and 
methanol.
    In June 2003, the Committee received from the ITC the 
report entitled ``U.S.-Singapore Free Trade Agreement: 
Potential Economy Wide and Selected Sectoral Effects'' 
(Investigation No. TA-2104-6 (Publication 3603; June 2003)). 
The ITC found that the FTA's most important benefits address 
non-tariff barriers and, thus, are not easily quantified or 
observed.
    In August 2003, the Committee received from the ITC the 
report entitled ``The Impact of Trade Agreements: Effect of the 
Tokyo Round, U.S.-Israel FTA, U.S.-Canada FTA, NAFTA, and the 
Uruguay Round on the U.S. Economy'' (Investigation No. TA-2111-
1 (Publication 3621; August 2003)). This report was required by 
section 2111 of the Trade Act of 2002.
    In May 2004, the Committee received from the ITC the report 
entitled ``U.S.-Australia Free Trade Agreement: Potential 
Economywide and Selected Sectoral Effects'' (Investigation No. 
TA-2104-11 (Publication 3697; May 2004)). The ITC found that 
the FTA's quantifiable benefits are related to the immediate 
reciprocal tariff elimination on a large number of agricultural 
and manufacturing goods and on virtually all manufactured 
goods. The ITC also observed that the FTA includes specific 
obligations in areas such as intellectual property, services, 
investment, and telecommunications, which may cause U.S. 
companies to be more likely to use Australia as their base for 
expanded Asian operations. The ITC predicted that the FTA would 
increase the overall U.S. welfare in the range of $434.8 
million to $639.4 million; exports are estimated to increase by 
$1.5 billion and imports would increase by $1.2 billion, with a 
minimal impact on employment and output.
    In June 2004, the Committee received from the ITC the 
report entitled ``U.S.-Morocco Free Trade Agreement: Potential 
Economywide and Selected Sectoral Effects'' (Investigation No. 
TA 2104-14 (Publication 3704)). The ITC found the quantifiable 
benefits of the U.S.-Morocco FTA are related to the immediate 
reciprocal tariff elimination, including the immediate 
elimination of duties on more than 90 percent of the value of 
current bilateral trade in consumer and industrial products. In 
addition, the ITC found it likely that the competitiveness of 
U.S. manufacturers and farmers will increase in the Moroccan 
market especially in comparison to suppliers from the European 
Union--with which Morocco already has a reciprocal trade 
agreement. Furthermore, the ITC estimated U.S. exports to 
Morocco are likely to increase by $740.0 million, and U.S. 
imports from Morocco are likely to increase by $198.6 million 
after full implementation of the FTA, with a minimal impact on 
U.S. employment and output.
    In August 2004, the Committee received from the ITC the 
report entitled ``U.S.-Central America-Dominican Republic Free 
Trade Agreement: Potential Economywide and Selected Sectoral 
Effects'' (Investigation No. TA 2104-13 (Publication 3717)).
    In October 2004, the Committee received from the ITC the 
report entitled ``U.S. Bahrain Free Trade Agreement: Potential 
Economywide and Selected Sectoral Effects'' (Investigation No. 
TA-2104-15 (Publication 3726)).

                   2. WORLD TRADE ORGANIZATION (WTO)

a. Cancun Codel (September 10-13, 2003)

    On September 10-13, 2003, Chairman Thomas led a bipartisan 
delegation of Members of Congress to Cancun to monitor the 
WTO's Cancun Ministerial Conference, consult with U.S. trade 
officials during the negotiations, and discuss trade issues 
with foreign delegates and WTO officials. Members met with 
delegations from Australia, New Zealand, the European Union, 
Ecuador, Africa, and Brazil. An important objective of the 
meetings was to highlight the importance that Members of 
Congress place on trade and especially on the need for trade 
liberalization in the agricultural sector.

b. Geneva Staffdel (February 17-21, 2003)

    On February 17-21, 2003, a bipartisan delegation of staff 
from the Committee on Ways and Means and the Senate Committee 
on Finance participated in an oversight trip to the WTO 
headquarters in Geneva, Switzerland. The delegation met with 
foreign representatives to the WTO from various countries 
including China, Chile, Australia, Lesotho, Mexico, New 
Zealand, India, and Singapore, and with various WTO officials. 
The staff delegation discussed matters related to the September 
WTO Ministerial scheduled for Cancun and the trade positions of 
various countries in the negotiations in the Doha Round.

c. Reports

    On July 30, 2003, the Committee received from the General 
Accounting Office (GAO) \1\ the report entitled ``World Trade 
Organization: Standard of Review and Impact of Trade Remedy 
Rulings'' (GAO-03-824). The GAO report found that the WTO 
generally rejected members' decisions to impose trade remedies 
in the 25 trade remedy disputes resolved from 1995 through 
2002. Overall, the GAO found that WTO rulings resulted in few 
changes to members' laws, regulations, and practices but had a 
relatively greater impact on those of the United States. U.S. 
agencies stated that WTO rulings have not yet significantly 
impaired their ability to impose trade remedies. Of the legal 
experts the GAO consulted, a majority concluded that the WTO 
has properly applied standards of review and correctly ruled on 
major trade remedy issues. However, a significant minority 
strongly disagreed with these conclusions. Nonetheless, the 
experts almost unanimously agreed that the WTO was not treating 
the United States any differently than other members.
---------------------------------------------------------------------------
    \1\ Effective July 7, 2004, the GAO's legal name became the 
Government Accountability Office, in accordance to the ``GAO Human 
Capital Reform Act of 2004,'' P.L. 108-271, 118 Stat. 811 (2004).
---------------------------------------------------------------------------
    Section 2105 of the Trade Act of 2002 required the 
Secretary of Commerce, in consultation with the Secretary of 
State, the Secretary of the Treasury, the Attorney General, and 
the United States Trade Representative, to transmit to the 
Congress a report setting forth the strategy of the executive 
branch to address concerns of the Congress regarding whether 
dispute settlement panels and the Appellate Body of the WTO 
have added to obligations, or diminished rights, of the United 
States, as described in section 2101(b)(3) of the Act. This 
report was submitted to the Congress on December 30, 2002. The 
report found that the WTO dispute settlement system has worked 
to the benefit of the United States, providing a means to 
enforce U.S. rights and contributing to greater compliance by 
WTO Members. The system has generally handled disputes 
expeditiously and with professionalism. At the same time, 
however, certain aspects of the dispute settlement system have 
raised concerns, including those identified by the Congress in 
connection with decisions involving U.S. trade remedies and 
safeguards.
    In January 2004, the Committee received from the GAO the 
report entitled ``World Trade Organization: Cancun Ministerial 
Fails to Move Global Trade Negotiations Forward; Next Steps 
Uncertain'' (GAO-04-250). Consistent with the views of most 
observers of the Ministerial, the GAO reported on the sharp 
divisions among the participants on many issues, particularly 
on agriculture. The GAO noted factors leading to the impasse at 
Cancun such as (1) the complexity of the agenda, (2) demands by 
some participants to add new, divisive issues such as 
investment, trade facilitation, government procurement, and 
competition, (3) inadequate willingness of some participants to 
cut agricultural subsidies, and (4) demands for special and 
differential treatment by broad groups of countries. The GAO 
informally reported to the Committee on the significant 
progress made in the negotiations during early 2004 that 
produced a framework agreement for further negotiations in 
August 2004. The GAO continues to monitor negotiations for the 
Committee and will produce an interim status report in May 
2005.

                    3. BILATERAL AND REGIONAL ISSUES

a. Africa (See discussion ahead in Free Trade Agreements section)

            i. H.R. 4103, the ``AGOA Acceleration Act of 2004''
    On April 1, 2004, Chairman Thomas introduced H.R. 4103, the 
``AGOA Acceleration Act of 2004,'' together with 
Representatives Crane, Rangel, Houghton, Dunn, Weller, K. 
Brady, McDermott, Neal, Jefferson, Royce, and Payne. The bill 
extends the existing AGOA program until 2015, extends third-
country fabric benefits for lesser developed countries until 
2007 with a phase-down in year three, and encourages the 
President to support African development in transportation, 
energy, agriculture, and telecommunications infrastructure. The 
bill also improves the rules of origin for AGOA beneficiaries 
by permitting use of certain third-country components and 
increasing the de minimis threshold from seven percent to ten 
percent. The Committee favorably reported H.R. 4103 to the 
House on May 5, 2004.
    Chairman Hyde wrote to Chairman Thomas on May 19, 2004, 
regarding a provision within the jurisdiction of the Committee 
on International Relations that would provide certain 
assistance to certain African nations; Chairman Hyde stated 
that his committee would forgo any action on the bill to 
expedite the bill's consideration by the House. Chairman Thomas 
responded by acknowledging the jurisdictional claim stated by 
Chairman Hyde. The House passed the bill, as amended, on June 
14, 2004, by voice vote. The Senate passed the bill without 
amendment by unanimous consent on June 24, 2004, and the 
President signed the bill into law on July 13, 2004 (P.L. 108-
274).
            ii. Hearings
    On April 29, 2004, the Subcommittee on Trade held a hearing 
on trade with sub-Saharan Africa and H.R. 4103, the ``AGOA 
Acceleration Act of 2004.'' Representatives from several 
African nations testified as witnesses at the hearing in 
support of H.R. 4103. Other witnesses included representatives 
from businesses and other non-government organizations involved 
in trade with Africa. The hearing explored the impact of the 
AGOA law on trade and development in Africa, past 
administrative problems with implementing the law, and ideas to 
encourage infrastructure improvements and to generally 
accelerate the goals of the program. In addition, the hearing 
explored provisions of H.R. 4103, the AGOA Acceleration Act.
            iii. Africa Codel (January 12-23, 2003)
    On January 12-23, 2003, Chairman Thomas led a bipartisan 
delegation of Members of Congress to an international forum 
established in the Africa Growth and Opportunity Act (AGOA) 
which was signed into law in 2000 (P.L. 106-200). The 
delegation visited Namibia, South Africa, Madagascar, and 
Mauritius and toured several new firms established as a result 
of the trade benefits created by AGOA. The delegation 
participated in several speaking and discussion events at the 
AGOA forum in Mauritius. In January 2003, the Committee filed 
its ``Report on Trade Mission to Sub-Saharan Africa'' (WMCP: 
108-2).
            iv. Reports
    As required by title I of the Trade and Development Act of 
2000, the President submitted to the Committee on Ways and 
Means his annual report on U.S. Trade and Investment Policy 
Toward sub-Saharan Africa on May 2, 2003. The report gives an 
economic and trade overview of sub-Saharan African countries 
and identifies efforts by the U.S. Government to provide trade 
capacity building and technical assistance to these countries. 
The report also provides an analysis of the impact of the AGOA 
legislation on each of the sub-Saharan countries.

b. Free Trade Area of the Americas

            i. GAO reports
    On April 11, 2003, the Committee received from the GAO the 
report entitled ``Free Trade Area of the Americas: Negotiations 
Progress, but Successful Ministerial Hinges on Intensified U.S. 
Preparations'' (GAO-03-560). The GAO found that USTR, which is 
responsible for co-chairing the Free Trade Area of the Americas 
(FTAA) negotiations and hosting the November 2003 ministerial 
meeting, faces challenges to its readiness to assume these 
responsibilities. The GAO also concluded that during the final 
negotiating phase, achieving improved market access for the 34 
nations is paramount, but it may be difficult for countries to 
make ambitious offers to lower tariffs and other trade 
barriers. Another challenge involves how to deal with 
agriculture subsidies, which is being negotiated at the WTO.
    On May 13, 2003, the Committee received from the GAO the 
report entitled ``Free Trade Area of the Americas: United 
States Faces Challenges as Co-Chair of Final Negotiating Phase 
and Host of November 2003 Ministerial'' (GAO-03-700T). The GAO 
found that the United States faces several challenges as co-
chair of the final phase of FTAA negotiations. First, USTR, 
which was responsible for co-chairing the negotiations and 
hosting the November 2003 ministerial, had not added 
appreciably to its staff despite the sharply increased 
workload. Second, the goals of the final phase--such as 
achieving improved market access for the 34 nations--are 
ambitious and require serious, substantive trade-offs. Finally, 
the negotiations are proceeding on the same timeline as several 
other complex trade negotiations involving the United States.
            ii. Miami Staffdel
    On November 18-21, 2003, a bipartisan delegation of staff 
from the House Committees on Ways and Means and Agriculture and 
the Senate Committee on Finance traveled to Miami to monitor 
and consult with U.S. trade officials during the 8th 
Ministerial meetings for the Free Trade Area of the Americas 
negotiations and to discuss trade issues with foreign 
delegates. Staff met with delegations from Brazil, Colombia, 
Peru, and Panama. An important objective of the meetings was to 
highlight the importance that Members of Congress place on a 
comprehensive and ambitious FTAA.

c. Free Trade Agreements

            i. Completed Agreements

Chile

    Negotiations for the U.S.-Chile Free Trade Agreement were 
concluded in December 2002. As noted above, the President 
signed the implementing legislation into law on August 3, 2003 
(P.L. 108-77).

Singapore

    Negotiations for the U.S.-Singapore Free Trade Agreement 
were concluded in January 2003. As noted above, the President 
signed the implementing legislation into law on August 3, 2003 
(P.L. 108-78).

Australia

    Negotiations for the U.S.-Australia Free Trade Agreement 
were concluded in February 2004. As noted above, the President 
signed the implementing legislation into law on August 3, 2004 
(P.L. 108-286).

Morocco

    Negotiations for the U.S.-Morocco Free Trade Agreement were 
concluded in March 2004. As noted above, the President signed 
the implementing legislation into law on August 17, 2004 (P.L. 
108-302).

Central America Free Trade Agreement

    On October 1, 2002, Ambassador Zoellick notified the 
Congress 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). On December 17, 2003, USTR 
announced completion of an agreement with El Salvador, 
Guatemala, Honduras, and Nicaragua. On January 25, 2004, USTR 
announced completion of negotiations to include Costa Rica in 
the Central America Free Trade Agreement (CAFTA). On May 28, 
2004, the agreement was signed.

Dominican Republic

    On August 4, 2003, Ambassador Zoellick notified the 
Congress of his intention to initiate free trade agreement 
negotiations with the Dominican Republic and to integrate the 
agreement with the Dominican Republic into the agreement the 
United States is negotiating with Central America. USTR planned 
to present the Congress one free trade agreement covering both 
the Dominican Republic and Central America. On March 15, 2003, 
USTR announced completion of negotiations to integrate the 
Dominican Republic into the CAFTA. On May 28, 2004, the CAFTA 
was signed by Costa Rica, El Salvador, Guatemala, Honduras, 
Nicaragua, and the United States. On August 5, 2004, an 
agreement integrating the Dominican Republic into the CAFTA was 
signed by Costa Rica, El Salvador, Guatemala, Honduras, 
Nicaragua, the Dominican Republic, and the United States. In 
October 2004, the Dominican Republic passed legislation that 
imposed a 25 percent tax on beverages made with high fructose 
corn syrup. On November 16, 2004, Ambassador Zoellick notified 
the House Ways and Means Committee that he was taking steps to 
take Congressional action on the CAFTA without the Dominican 
Republic, if necessary, including preparing a text that 
excludes the Dominican Republic and requesting that the 
International Trade Commission assess the likely economic 
impact of the CAFTA.

Bahrain

    In 2001, the United States and Bahrain signed a Bilateral 
Investment Treaty that provides assurances to investors of both 
countries that their property rights will be respected. In 
2002, the United States and Bahrain began working to promote 
closer economic ties through a bilateral Trade and Investment 
Framework Agreement (TIFA). On August 4, 2003, Ambassador 
Zoellick notified the Congress of his intention to initiate 
free trade agreement negotiations with Bahrain. This agreement 
is designed to advance economic reforms and openness in the 
Middle East and make progress towards a Middle East Free Trade 
Area, building on an existing free trade agreement with Jordan 
and negotiations underway for a free trade agreement with 
Morocco. Negotiations were launched on January 26, 2004, and 
concluded on May 27, 2004. The agreement was signed on 
September 14, 2004.
    On July 22, 2004, the National Commission on Terrorist 
Attacks Upon the United States (the ``9-11 Commission''), an 
independent, bipartisan commission created by legislation, 
released its report. The Commission mentioned the free trade 
agreement with Bahrain as a potential part of a comprehensive 
strategy to counter terrorism, stating:
    The U.S. government has announced the goal of working 
toward a Middle East Free Trade Area, or MEFTA, by 2013. The 
United States has been seeking comprehensive free trade 
agreements (FTAs) with the Middle Eastern nations most firmly 
on the path to reform. The U.S.-Israeli FTA was enacted in 
1985, and Congress implemented an FTA with Jordan in 2001. Both 
agreements have expanded trade and investment, thereby 
supporting domestic economic reform. In 2004, new FTAs were 
signed with Morocco and Bahrain, and are awaiting congressional 
approval. These models are drawing the interest of their 
neighbors. Muslim countries can become full participants in the 
rules-based global trading system, as the United States 
considers lowering its trade barriers with the poorest Arab 
nations. Recommendation: A comprehensive U.S. strategy to 
counter terrorism should include economic policies that 
encourage development, more open societies, and opportunities 
for people to improve the lives of their families and to 
enhance prospects for their children's future.
            ii. Ongoing Negotiations

Southern African Customs Union

    Pursuant to Sense of Congress language in the Africa Growth 
and Opportunities Act of 2000, Ambassador Zoellick notified 
Congress on November 4, 2002, of the Administration's intent to 
enter into free trade agreement negotiations with the SACU 
countries (South Africa, Lesotho, Swaziland, Botswana, and 
Namibia). Negotiations between the United States and the SACU 
countries were launched on June 2, 2003 in Pretoria, South 
Africa.

Andean Countries (Bolivia, Colombia, Ecuador, and Peru)

    On November 18, 2003, Ambassador Zoellick formally notified 
Congress, on behalf of President Bush, of the Administration's 
intent to initiate negotiations for a free trade agreement with 
Bolivia, Colombia, Ecuador, and Peru. FTA negotiations began in 
May 2004 with Colombia, Ecuador, and Peru. Bolivia is an 
observer in the negotiations.

Panama

    On November 18, 2003, Ambassador Zoellick formally notified 
the Congress, on behalf of President Bush, of the 
Administration's intent to initiate free trade agreement 
negotiations with Panama. Negotiations were launched on April 
26, 2004, and could conclude in early 2005.

Thailand

    On February 12, 2004, Ambassador Zoellick formally notified 
Congress of the Administration's intent to negotiate an FTA 
with Thailand. The first round of negotiations was held in June 
2004.

Oman

    The United States signed a Trade and Investment Framework 
Agreement (TIFA) with Oman on July 7, 2004. On November 15, 
2004, following a visit by a bipartisan delegation of Members 
of Congress led by Chairman Thomas to Oman (see discussion 
below), Ambassador Zoellick formally notified the Congress of 
the Administration's intention to initiate free trade agreement 
negotiations with Oman. A free trade agreement with Oman is 
part of the goal announced by the President to form a Middle 
East Free Trade Area by 2013. Negotiations are expected to 
begin in February or March of 2005.

United Arab Emirates (UAE)

    The United States signed a Trade and Investment Framework 
Agreement (TIFA) with the UAE on March 15, 2004. On November 
15, 2004, Ambassador Zoellick formally notified the Congress of 
the Administration's intention to initiate free trade agreement 
negotiations with the UAE. A free trade agreement with the UAE 
is part of the goal announced by the President to form a Middle 
East Free Trade Area by 2013. Negotiations are expected to 
begin in February or March of 2005.
            iii. Codel to North Africa and the Middle East (November 4-
                    12, 2004)
    On November 4-12, 2004, Chairman Thomas led a bipartisan 
delegation of Committee Members to Tunisia, Jordan, Oman, and 
Egypt. The focus of the delegation's trip included trade, 
investment, and security issues in the region. The delegation 
held meetings with government officials and members of the 
business community and toured facilities that had received 
assistance from USAID and facilities relying on Free Trade 
Agreement or Qualified Industrial Zone benefits. In December 
2004, the Committee filed its ``Report on Trade Mission to 
Tunisia, Jordan, Oman, and Egypt.''

a. China

            i. Resolution
    On October 28, 2003, Representative Phil English introduced 
H. Res. 414, a bill to encourage the People's Republic of China 
to fulfill its commitments under international trade 
agreements, support the United States manufacturing sector, and 
establish monetary and financial market reforms. The 
resolution, which was referred to the Committee, urged Chinese 
leaders to modernize China's financial system, establish a more 
flexible exchange rate, and comply with China's trade agreement 
obligations. On October 29, 2003, the House suspended the 
rules, and the bill was passed by a recorded vote of 411-1.
    On March 24, 2004, Representative Diane Watson introduced 
H. Res. 576, a bill to encourage the People's Republic of China 
to improve the protection of intellectual property rights. The 
bill contained provisions in the jurisdiction of the Committee. 
The resolution was amended to omit these provisions, and H. 
Res. 576, as amended, passed the House on July 14, 2004, by a 
recorded vote of 416-3.
            ii. Hearing
    On October 30 and October 31, 2003, the Committee held a 
two-day hearing on United States-China economic relations and 
China's role in the economy. During the hearing, the Committee 
received testimony from witnesses from the Administration, the 
International Trade Commission, the GAO, the Congressional 
Budget Office, and private sector interests. The hearing 
focused on (1) implementation of China's WTO accession 
commitments; (2) trade relations between the United States and 
China; (3) China's currency management; and (4) the 
relationship between trade with China and the U.S. economy.
            iii. GAO activities
    On March 31, 2003, the Committee received from the GAO a 
report entitled ``World Trade Organization: First-Year U.S. 
Efforts to Monitor China's Compliance'' (GAO-03-461), as 
requested by Chairman Thomas. GAO reported that the U.S. Trade 
Representative and the U.S. Departments of Agriculture, 
Commerce, and State made various changes to monitor China's 
efforts to comply with its WTO obligations. These agencies 
reorganized or established intra-agency teams to coordinate 
oversight of China's compliance, increased staff in China-
related units, and identified these changes in performance and 
strategic plans. GAO identified the challenges of monitoring 
China's complex and technical new obligations and the limited 
results of the WTO's initial trade policy review of China.
    On June 13, 2003, the Committee received from the GAO a 
report entitled ``GAO's Electronic Database of China's World 
Trade Organization Commitments'' (GAO-03-797R), as requested by 
Chairman Thomas. GAO reported on the public release of its new 
electronic database with search capabilities on over 700 
individual commitments made by China in its WTO Accession 
Agreement.
    On October 30, 2003, the Committee received from the GAO a 
report entitled ``World Trade Organization: Ensuring China's 
Compliance Requires a Sustained and Multifaceted Approach'' 
(GAO-04-172T), as requested by Chairman Thomas. GAO reported on 
the compliance challenges associated with the scope and 
complexity of China's WTO commitments and the efforts to date 
of key players involved in ensuring China's compliance with its 
WTO obligations including the executive branch, Congress, the 
private sector, and the WTO and its members.
    On October 2004, the Committee received from the GAO a 
report entitled ``U.S.-China Trade: Opportunities to Improve 
U.S. Government Efforts to Ensure China's Compliance with World 
Trade Organization Commitments'' (GAO-05-53), as requested by 
Chairman Thomas. The GAO reported on the Administration's use 
of high-level bilateral engagement to address trade disputes, 
its effective interagency coordination on policy, the need for 
agencies' improvement in training personnel engaged in 
compliance activities, and the need for improvements in 
agencies' tracking results.
    The State Department responded to these recommendations by 
the GAO in a letter to Chairman Thomas on December 7, 2004. The 
State Department will implement new performance goals and 
reporting guidelines, and the next State Department Mission 
Performance Plan will reflect these new guidelines. In 
addition, the State Department acknowledges the need to improve 
monitoring of China's WTO commitments through improved staff 
management.
    In March 2004, the Committee received from the GAO a report 
entitled ``World Trade Organization: U.S. Companies' Views on 
China's Implementation of Its Commitments'' (GAO-04-508), as 
requested by Chairman Thomas. The GAO surveyed U.S. companies 
that had a presence in China and summarized the findings. The 
GAO found that two-thirds of U.S. companies had a positive view 
of China's implementation of its commitments while about 30 
percent of companies saw little or no impact. About two percent 
had a negative reaction to China's implementation. The key 
areas of China's actions that are of importance to U.S. 
companies are: (1) standards, certifications, registration, and 
testing requirements; (2) customs procedures and inspection 
practices; (3) intellectual property rights protections; (4) 
lowering tariffs, fees, and charges as required by China's WTO 
Accession Agreement; and (5) consistent application of laws, 
regulations, and practices.

b. Armenia

    On February 4, 2003, Representatives Joe Knollenberg and 
Frank Pallone, Jr., co-Chairmen of the Congressional Caucus on 
Armenian Issues, introduced H.R. 528, a bill to authorize the 
extension of nondiscriminatory treatment (permanent normal 
trade relations, or PNTR) to the products of Armenia. On March 
5, 2003, Trade Subcommittee Chairman Crane requested written 
public comments for the record from all parties interested in 
the extension of PNTR treatment to products from Armenia. On 
November 19, 2003, Chairman Thomas introduced H.R. 3521, the 
``Tax Relief Extension Act of 2003,'' a bill to extend certain 
expiring provisions. The bill contained a provision granting 
PNTR treatment to products from Armenia. The House passed H.R. 
3521 on November 20, 2003, by voice vote, and the bill was 
received by the Senate and referred to the Senate Committee on 
Finance. A provision granting PNTR to products from Armenia was 
included in the conference report for H.R. 1047, the 
``Miscellaneous Trade and Technical Corrections Act of 2004,'' 
which was signed by the President on December 3, 2004 (P.L. 
108-429). See below for further discussion of P.L. 108-429.

c. Moldova

    On March 5, 2003, Trade Subcommittee Chairman Crane 
requested written public comments for the record from all 
parties interested in the extension of permanent normal trade 
relations (PNTR) treatment to products from Moldova. No further 
action was taken.

d. Laos

    Laos did not receive Normal Trade Relations (NTR) status 
because it is included in the Harmonized Tariff Schedule (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. On March 5, 2003, Trade Subcommittee Chairman 
Crane requested written public comments for the record from all 
parties interested in the extension of permanent normal trade 
relations (PNTR) treatment to products from Laos. A provision 
granting NTR to products from Laos was included in the 
conference report for H.R. 1047, the ``Miscellaneous Trade and 
Technical Corrections Act of2004,'' which was signed by the 
President on December 3, 2004 (P.L. 108-429). See below for further 
discussion of P.L. 108-429.

e. Burma (Myanmar)

    On June 4, 2003, Representative Lantos introduced H.R. 
2330, the ``Burmese Freedom and Democracy Act of 2003,'' to 
sanction the ruling Burmese military junta, strengthen Burma's 
democratic forces, and support and recognize the National 
League of Democracy as the legitimate representative of the 
Burmese people. On July 8, 2003, Chairman Thomas sent a letter 
to International Relations Committee Chairman Hyde asserting 
the jurisdiction of the Committee on Ways and Means over 
certain of these provisions and agreeing to forego 
consideration of the bill because provisions sought by the 
Committee had been included in the Manager's Amendment to the 
bill. On July 15, 2003, H.R. 2330 was approved under a 
suspension of the rules by a recorded vote of 418-2, with 1 
present vote. On July 16, 2003, the bill passed the Senate, 
without amendment, by a recorded vote of 94-1. The President 
signed H.R. 2330 into law on July 28, 2003 (P.L. 108-61).
    Among other things, the legislation prohibits the 
importation into the United States of any article that is a 
product of Burma (Myanmar) until the President determines and 
certifies to Congress that Burma has met certain conditions, 
including that: (1) the State Peace and Development Council 
(SPDC) has made substantial and measurable progress to end 
violations of internationally recognized human rights; (2) the 
SPDC has made measurable and substantial progress toward 
implementing a democratic government; and (3) Burma has not 
been designated as a country that has failed demonstrably to 
make substantial efforts to adhere to its obligations under 
international counter-narcotics agreements and to take other 
effective counter narcotics measures. The law authorizes the 
President to waive such requirements if it is in the U.S. 
national interest. The import restrictions expire one year 
after enactment unless renewed by Congress with a joint 
resolution meeting certain requirements.
    On June 3, 2004, Representatives Lantos and Thomas 
introduced H.J. Res. 97 to approve the renewal for one year of 
import restrictions contained in P.L. 108-61. On June 14, 2004, 
H.J. Res. 97 was approved by the House under a suspension of 
the rules by a recorded vote of 372-2. On June 24, 2004, the 
bill passed the Senate without amendment by a recorded vote of 
96-1. The President signed H.J. Res. 97 into law on July 7, 
2004 (P.L. 108-272). The import restrictions contained in P.L. 
108-61 expire completely after three years.

f. Micronesia

    On July 8, 2003, Representative Leach introduced H.J. Res. 
63, the ``Compact of Free Association Amendments Act of 2003.'' 
This measure, which was the authorizing and implementing 
language for the partially renegotiated Compacts of Association 
between the United States and the Federated States of 
Micronesia and the Republic of the Marshall Islands, contained 
provisions within the jurisdiction of the Committee on Ways and 
Means. On September 24, 2003, Chairman Thomas and International 
Relations Committee Chairman Hyde exchanged letters 
acknowledging the jurisdiction of the Committee on Ways and 
Means over these provisions and agreeing to forego the 
Committee on Ways and Means' consideration of the bill. On 
October 28, 2003, H.J. Res. 63 was approved under suspension of 
the rules by voice vote. The Senate approved H.J. Res. 63, with 
amendments, on November 6, 2003. On November 20, 2003, the 
House approved the Senate amendments under suspension of the 
rules by a recorded vote of 417-2. The President signed the 
measure into law on December 17, 2003 (P.L. 108-188).

g. Haiti

            i. Legislation
    Haiti is currently eligible for trade preferences under the 
Caribbean Basin Economic Recovery Act (P.L. 98-67, P.L. 106-
200, and P.L. 107-210). Several bills were introduced in the 
House and Senate in the 108th Congress to grant additional 
trade preferences to Haiti, including H.R. 1031, the ``Haiti 
Economic Recovery Opportunity Act of 2003,'' H.R. 4889, the 
``Haiti Economic Recovery Opportunity Act of 2004,'' S. 489, 
the ``Haiti Economic Recovery Opportunity Act of 2003,'' and S. 
2261, the ``Haiti Economic Recovery Opportunity Act of 2004.'' 
On July 16, 2004, the Senate passed by unanimous consent S. 
2261. No further formal action was taken.
            ii. Hearing
    On September 22, 2004, the Subcommittee held a hearing on 
possible expansions of trade preferences for Haiti. Witnesses 
at the hearing included Senators DeWine and Graham, as well as 
representatives from the retail, textile and apparel, and auto 
parts sectors and a labor union. The hearing focused on whether 
to provide additional trade preferences for Haiti and the 
impact on trade and development in Haiti and on the United 
States and regional textile and apparel industries.

                                4. STEEL

    Section 201 of the Trade Act of 1974 allows the President 
to take action, including import relief, to assist a domestic 
industry seriously injured by imports to make a positive 
adjustment to import competition. On March 5, 2002, the 
President announced safeguard measures on ten categories of 
steel imports and imposed tariffs ranging from 8 to 30 percent. 
Slab imports were subject to a Tariff Rate Quota. The President 
excluded from the remedy imports from free trade agreement 
partners (Canada, Mexico, Jordan, and Israel) and certain 
developing countries that ship less than 3 percent of total 
imports for each product category. The safeguard measures took 
effect on March 20, 2002, and were to be phased down over three 
years and one day. On December 4, 2003, pursuant to section 
204(b) of the Trade Act of 1974, the President determined that 
the effectiveness of the safeguard action had been impaired by 
changed economic circumstances, and he repealed the tariffs.

a. Hearing on the Impact of the Steel Safeguard Action

    On March 26, 2003, the Subcommittee on Trade held a hearing 
on the impact of the section 201 safeguard actions on certain 
steel products. The hearing focused on changes in employment, 
wages, profitability, sales, productivity, and capital 
investment of steel consuming industries as a result of the 
safeguard action, whether the safeguard remedies affected steel 
prices and availability in the United States, and the effects 
of the safeguard on the domestic steel industry and the 
industry's efforts to restructure. Witnesses included 
representatives from small and large steel consuming 
businesses, U.S. steel producers, economic and financial 
analysts knowledgeable on the steel industry, and unions.

b. U.S. International Trade Commission Reports on the Steel Safeguard 
        Action

    When a section 201 safeguard action is taken, section 204 
of the Trade Act of 1974 requires the U.S. International Trade 
Commission (ITC) to monitor developments with respect to the 
domestic industry, including the progress and specific efforts 
made by workers and firms in the domestic industry to make a 
positive adjustment to import competition. Because the 
safeguard remedy on steel was scheduled to be in effect for 
three years and one day, the ITC was required to conduct a mid-
term review, hold a hearing, and include in the review: (1) a 
report on the monitoring mentioned above; and (2) its judgment 
as to the probable economic effect on the industry concerned of 
any reduction, modification, or termination of the action 
taken.
    In order to provide a comprehensive assessment of the 
impact of the steel safeguard measures on the U.S. economy, on 
March 18, 2003, Chairman Thomas requested the ITC to institute 
an investigation under section 332 of the Tariff Act of 1930 as 
to the current competitive conditions facing the steel 
consuming industries in the United States with respect to the 
tariffs imposed by the President on March 5, 2002, and to 
foreign competitors not subject to such measures. As requested 
by Chairman Thomas, the ITC submitted the results of this 
review, along with the ITC's section 204 report, to the 
President and Congress in a single document in September 2003 
(Steel: Monitoring Developments in the Domestic Industry 
(Investigation No. TA-204-9) and Steel-Consuming Industries: 
Competitive Conditions with Respect to Steel Safeguard Measures 
(Investigation No. 332-452) (Publication 3632; September 
2003)).

                    5. CONGRESSIONAL OVERSIGHT GROUP

a. Trade Act of 2002

    Section 2017 of the Trade Act of 2002 (P.L. 107-210) 
establishes the Congressional Oversight Group (COG), to be co-
chaired by the Chairmen of the Ways and Means and Finance 
Committees 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 each Congress. The purpose of the 
COG is to provide the President and the United States Trade 
Representative 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.

b. Operation of the COG

    On January 7, 2003, Chairman Thomas convened an 
organizational meeting of the COG. The next meeting of the COG 
was hosted by the Senate and held on April 11, 2003, to provide 
Members with a general update on the Chile and Singapore 
negotiations. On July 24, 2003, Chairman Thomas convened a sub-
group of the House COG to discuss the prospect for free trade 
negotiations with Bahrain, as well as the possible addition of 
the Dominican Republic to the Central American Free Trade 
Agreement once those negotiations are concluded. Chairman 
Thomas invited the House COG subgroup to a meeting hosted by 
the Senate on November 6, 2003, to discuss possible free trade 
agreements with certain Andean nations and Thailand and to 
brief Members before the Miami ministerial meeting of the Free 
Trade Area of the Americas (FTAA). Chairman Thomas invited the 
House COG subgroup to a meeting hosted by the Committee on May 
6, 2004, to consult with Ambassador Zoellick on three free 
trade agreements (Australia, Morocco, and the Central American 
countries plus the Dominican Republic). The last meeting of the 
COG in the 108th Congress occurred on September 8, 2004, and 
was hosted by the Senate. The purpose of that meeting was to 
consult with Ambassador Zoellick on the outcome of the WTO 
Geneva meeting and on Middle East trade policy.

                   6. MISCELLANEOUS TRADE LEGISLATION

Miscellaneous Trade and Technical Corrections Act of 2004

    On March 4, 2003, Trade Subcommittee Chairman Crane 
introduced H.R. 1047, the ``Miscellaneous Trade and Technical 
Corrections Act of 2003,'' a bill to amend the Harmonized 
Tariff Schedule of the United States to modify temporarily 
certain rates of duty, to make other technical amendments to 
the trade laws, and for other purposes. The bill was based in 
large part on H.R. 5385 from the 107th Congress, which had been 
passed by the House on October 7, 2002, but was not considered 
by the Senate. One notable difference between the bills was 
that H.R. 1047 did not include provisions related to 
establishment of a Qualified Industrial Zone for Turkey.
    H.R. 1047 contained two parts. The first part included 
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. 1047 related mostly to products (largely 
chemical) for which there is no U.S. domestic manufacturer. 
Other duty suspension articles included rubber riding boots and 
high performance loud speakers.
    The second part of H.R. 1047 contains provisions relating 
to: (1) changes to the duty drawback statutes; (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, Afghanistan, and Morocco); and 
(4) other technical amendments to the Trade Act of 2002.
    On April 5, 2003, the House suspended the rules, and the 
bill was passed by a recorded vote of 415-11. On March 21, 
2003, the Senate read the bill a second time and placed it on 
the Senate Legislative Calendar under general orders. The 
Senate took no further action during the first session. The 
House then largely incorporated the bill into H.R. 3521, the 
``Tax Relief Extension Act of 2003,'' which Chairman Thomas 
introduced on November 19, 2003. The bill included the 
provisions in H.R. 1047 in addition to other provisions, such 
as PNTR for Armenia. The House passed H.R. 3521 on November 20, 
2003, by voice vote, and the bill was received by the Senate 
and referred to the Senate Committee on Finance. The Senate did 
not act on H.R. 3521 during the 108th Congress.
    The Senate subsequently passed H.R. 1047, with an 
amendment, on March 4, 2004, and a House-Senate conference was 
held on October 8, 2004. The conference report renamed the bill 
the ``Miscellaneous Trade and Technical Corrections Act of 
2004'' and included most of the provisions in the House and 
Senate versions of H.R. 1047. In addition, the report included 
provisions to give NTR to Laos, to give PNTR to Armenia, to 
repeal the Antidumping Act of 1916, and to extend certain AGOA 
textile benefits to Mauritius for one year. The House agreed to 
the conference report by unanimous consent on October 8, 2004, 
and the Senate agreed by unanimous consent on November 19, 
2004, after adopting a motion for cloture on the report by a 
recorded vote of 88 to 5. The President signed H.R. 1047 on 
December 3, 2004 (P.L. 108-429).

  7. WTO DISPUTE SETTLEMENT MATTERS IN WHICH THE COMMITTEE TOOK ACTION

a. Foreign Sales Corporation

    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 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 July 25, 2003, Chairman Thomas introduced H.R. 2896, the 
American Jobs Creation Act of 2003, to put the United States in 
compliance with its WTO obligations and to address 
competitiveness and corporate accountability issues. On October 
28, 2003, the Committee ordered the legislation favorably 
reported by a recorded vote of 24-15, but Congress took no 
further action on the bill.
    On December 8, 2003, the EU member states approved 
legislation allowing the European Commission to impose 
retaliatory tariffs on U.S. exports starting on March 1, 2004. 
The European Union began applying retaliatory tariffs of five 
percent on a wide range of U.S. exports to the EU and 
incrementally increased the rate on a monthly basis. Chairman 
Thomas subsequently introduced a second version of the bill, 
H.R. 4520, that was signed into law on October 22, 2004 (P.L. 
108-357), after moving through a House and Senate conference. A 
fuller discussion of this legislation is located in the tax 
section of this report.
    Although the EU announced that it would suspend the 
retaliatory tariffs effective January 1, 2005, as a result of 
the U.S. repeal of FSC, the EU formally requested consultations 
on November 10, 2003, with the United States over the 
transitional features of the repeal, which the EU claims to be 
inconsistent with U.S. trade obligations under the WTO. 
Consultations will be held in early 2005.

b. The Antidumping Act of 1916

    In response to a decision of the WTO Appellate Body on 
August 28, 2000, that found the Antidumping Act of 1916 to be 
inconsistent with WTO obligations, Chairman Sensenbrenner of 
the House Judiciary Committee, together with Chairman Thomas, 
introduced H.R. 1073 on March 4, 2003, to repeal the 
Antidumping Act of 1916. No action was taken on the bill during 
the 108th Congress. However, the text of the bill was included 
in the conference report to H.R. 1047, the ``Miscellaneous 
Trade and Technical Corrections Act of 2004,'' which was signed 
into law by the President on December 3, 2004 (P.L. 108-429).

                     8. TRADE AGENCY AUTHORIZATION

    The Committee on Ways and Means has adopted a two-year 
authorization process to provide U.S. Customs and Border 
Protection (CBP), U.S. Immigration and Customs Enforcement 
(ICE), the Office of the United States Trade Representative 
(USTR), and the International Trade Commission (ITC) with 
guidance as they plan their budgets and to provide Committee 
guidance in the appropriations process. Funding for the former 
U.S. Customs Service, USTR, and the ITC was authorized through 
FY 2004 in the Trade Act of 2002 (P.L. 107-210).
    On November 25, 2002, the President signed into law 
legislation (P.L. 107-296) creating a new Department of 
Homeland Security (DHS). This law transferred the U.S. Customs 
Service to the Department of Homeland Security under the 
authority of the Under Secretary for Border and Transportation 
Security. Authority for customs revenue functions is retained 
by the Secretary of the Treasury, administered by the 
Commissioner of U.S. Customs and Border Protection under the 
terms of an executive delegation of authority order.
    On March 1, 2003, the former U.S. Customs Service was 
divided into two new agencies within DHS. Customs inspectors, 
canine enforcement officers, and import specialists were merged 
with immigration inspectors, border patrol agents, and 
agriculture inspectors to create CBP. Customs investigators and 
personnel in the air and marine operations were merged with 
immigration investigators, Federal air marshals, and members of 
the Federal protective service to create ICE.

a. Hearing

    On June 17, 2004, the Subcommittee on Trade held a public 
hearing on Customs budget authorizations and other customs 
issues. The hearing focused on issues surrounding the transfer 
of the former U.S. Customs Service to the Department of 
Homeland Security, customs modernization, customs user fees, 
and cost accounting systems. Witnesses included the Honorable 
Robert Bonner, Commissioner, U.S. Customs and Border 
Protection; the Honorable Michael Garcia, Assistant Secretary 
for U.S. Immigration and Customs Enforcement; and 
representatives of the business community and labor unions. On 
June 22, 2004, Trade Subcommittee Chairman Crane sent a letter 
to Commissioner Bonner submitting questions for response and 
inclusion in the Subcommittee record, requesting responses by 
July 6, 2004. On September 13, 2004, the Subcommittee received 
responses.

b. Authorization legislation

    On May 20, 2004, Trade Subcommittee Chairman Crane 
introduced H.R. 4418, the ``Customs Border Security Act of 
2004,'' a bill to authorize appropriations for fiscal years 
2005 and 2006 for CBP, ICE, USTR, and ITC. On June 24, 2004, 
the Subcommittee held a formal mark up session and ordered 
favorably reported to the full Committee H.R. 4418, the 
``Customs Border Security and Trade Agencies Authorization Act 
of 2004,'' as amended, by voice vote. On July 8, 2004, the 
Committee held a formal mark up session on H.R. 4418, as 
amended by the Subcommittee. Chairman Thomas offered an 
amendment in the nature of a substitute, which was agreed to by 
voice vote. The Committee then ordered favorably reported H.R. 
4418, as amended, by a recorded vote of 33-0. On July 14, 2004, 
the legislation passed the House by a recorded vote of 341-85. 
On July 15, the bill was received in the Senate and referred to 
the Committee on Finance. The Senate took no further action.

c. Report

    On January 23, 2004, as required by the Trade Act of 2002, 
the Committee received from the GAO a report entitled ``U.S. 
Customs and Border Protection Faces Challenges in Addressing 
Illegal Textile Transshipment'' (GAO-04-345). GAO reported on 
CBP's system for preventing the use of false country-of-origin 
information for imported goods to evade U.S. textile quotas and 
customs duties.

                     9. MISCELLANEOUS TRADE ISSUES

i. Customs User Fees

    On October 21, 2003, Congressman Rick Renzi introduced H.R. 
3365, the ``Military Family Tax Relief Act,'' which contained 
no trade provisions. On October 29, 2003, the House suspended 
the rules and passed the bill by a recorded vote of 413-2. On 
November 3, 2003, the Senate passed H.R. 3365 with an amendment 
that provided for an 11-month extension of Customs user fees. 
On November 5, 2003, the House concurred in the Senate 
amendment by unanimous consent. The President signed the bill 
into law on November 11, 2003 (P.L. 108-121).
    On September 10, 2004, the Senate accepted an amendment to 
H.R. 4567, the Homeland Security Appropriations bill for 2005 
to extend Customs User fees for less than one year in order to 
raise $700 million in additional revenue. Chairman Thomas wrote 
Appropriations Committee Chairman Young on September 29, 2004, 
in opposition to the provision, noting that it constituted a 
revenue measure originating in the Senate contrary to the 
Origination Clause of the Constitution. Chairman Thomas asked 
that the provision be removed during the conference on the 
bill. The provision was subsequently removed during conference.
    H.R. 4520, ``the American Jobs Creation Act of 2004,'' 
included a provision to extend all Customs user fees until 
September 30, 2014. The provision also clarified that user fees 
should be reasonably related to the cost of the customs service 
provided to importers. The provision also commissioned a study 
by the Department of Homeland Security to analyze all fees 
charged to importers and to recommend changes. As described 
above, H.R. 4520 was signed into law by the President on 
October 22, 2004 (P.L. 108-357). A fuller discussion of this 
legislation is located in the tax section of this report.

ii. Conflict 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. Member 
interest in these proposals remained high in the 108th Congress 
owing to recent completion of international negotiations.
    On April 3, 2003, Congressman Amo Houghton introduced H.R. 
1584, the ``Clean Diamond Trade Act,'' to implement U.S. 
obligations pursuant to the Interlaken Declaration on the 
Kimberley Process Certification Scheme for Rough Diamonds of 
November 5, 2002. The Declaration addresses the problem of the 
use of diamonds from mines controlled by African rebel forces 
to trade for arms in order to fuel civil war in Africa. On 
April 8, 2003, the House passed the bill by a recorded vote of 
419-2. On April 10, 2003, the Senate passed H.R. 1584, with 
amendment, by unanimous consent. On April 11, 2003, the House 
agreed to the Senate amendment by unanimous consent. The 
President signed the bill into law on April 25, 2003 (P.L 108-
19). The law restricts the import and export of diamonds from 
countries with inadequate controls against the trade in 
conflict diamonds.
    On August 25, 2004, the Committee received a report on the 
performance of the United States Kimberley Process Authority 
(USKPA) from the State Department. The report described and 
reviewed the practices, standards, and procedures of the USKPA. 
The Committee continues to monitor implementation of the 
Kimberly Process.

iii. Other Select ITC Reports Received by the Committee

    In August 2003, the Committee received from the ITC the 
report entitled ``The Year in Trade 2002: Operation of the 
Trade Agreements Program'' (Publication 3630).
    In September 2003, the Committee received from the ITC the 
report entitled ``The Impact of the Andean Trade Preference Act 
(Ninth Report 2002)'' (Investigation 332-352 (Publication 
3637)).
    In September 2003, the Committee received from the ITC the 
report entitled ``The Impact of the Caribbean Basin Economic 
Recovery Act (Sixteenth Report 2001-2002)'' (Investigation 332-
227 (Publication 3636)).
    In December 2003, the Committee received from the ITC the 
report entitled ``U.S. Trade and Investment with Sub-Saharan 
Africa: Fourth Annual Report'' (Publication 3650).
    In July of 2004, the Committee received from the ITC the 
report entitled ``The Year in Trade 2003: Operation of the 
Trade Agreements Program'' (Publication 3700).
    In September 2004, the Committee received from the ITC the 
report entitled ``The Impact of the Andean Trade Preference Act 
(Tenth Report 2003)'' (Investigation 332-352 (Publication 
3725)).

iv. Medicare Legislation

    On June 25, 2003, Speaker Hastert introduced H.R. 1, the 
``Medicare Prescription Drug and Modernization Act of 2003,'' 
an act to amend title XVIII of the Social Security Act to 
provide for a voluntary prescription drug benefit under the 
Medicare program and for other purposes.
    On November 22, 2003, the House agreed to the conference 
report by a recorded vote of 220-215. On November 25, 2003, the 
Senate agreed to the conference report by a recorded vote of 
54-44. The President signed the bill into law on December 8, 
2003 (P.L. 108-173).
    Section 1123 of P.L. 108-173 provides for a study and 
report on issues related to trade in pharmaceuticals. The 
conference report further specifies that the nine-month study 
and report shall examine the drug pricing practices of 
countries that are members of the Organization for Economic 
Cooperation and Development and whether those practices utilize 
non tariff barriers with respect to trade in pharmaceuticals. 
The study is to include an analysis of the use of price 
controls, reference pricing, and other actions that affect the 
market access of United States pharmaceutical products. The 
study was transmitted to Congress on December 21, 2004.

v. Trade Provisions in Energy Legislation

    On April 7, 2003, Energy and Commerce Committee Chairman 
Tauzin introduced H.R. 6, the ``Energy Policy Act of 2003,'' a 
bill to enhance energy conservation and research and 
development, provide for security and diversity in the energy 
supply for the American people, and for other purposes. On 
April 11, 2003, the House passed H.R. 6 by a recorded vote of 
247-175.
    On July 31, 2003, Senator Frist offered Senate Amendment 
1537 in the nature of a substitute, which contained language 
similar to that proposed by the Senate to H.R. 6 of the 107th 
Congress. Senate Amendment 1537 added a provision 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. Senate 
Amendment 1537 also included section 2504, providing 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 accepted 
Senate Amendment 1537 by unanimous consent on July 31, 2003. 
The Senate passed H.R. 6 as amended by a yea-nay vote of 84-14 
on July 31, 2003.
    In conference, the Senate receded from its position on both 
the Iraqi oil ban and the provision on the sale of fuel at 
duty-free sales enterprises. Conferees agreed to extend a 
current temporary duty suspension for nuclear steam generators 
until December 31, 2008. Conferees further agreed to 
temporarily suspend the duties on nuclear vessel heads for 
column 1 countries until December 31, 2007. Conferees also 
provided for the temporary duty suspension for certain ceiling 
fans until 2007. The House passed the conference report to H.R. 
6 on November 18, 2003, by a recorded vote of 246-180. However, 
the Senate cloture motion on the bill failed by recorded vote 
of 57-40 on November 21, 2003, thus terminating Senate action 
in the 108th Congress. No further activity occurred on H.R. 6 
during the 108th Congress, but the trade provisions were later 
incorporated into H.R. 4520, the ``American Jobs Creation Act 
of 2004.''

vi. Marlin

    On July 25, 2003, Representative Saxton introduced H.Con. 
Res. 268, 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 highly migratory species, including marlin, adopted by 
the International Commission for the Conservation of Atlantic 
Tunas and that are threatening the continued viability of 
United States commercial and recreational fisheries. The bill 
contained provisions within the jurisdiction of the Committee 
on Ways and Means. On October 27, 2003, Chairman Thomas and 
Committee on Resources Chairman Pombo exchanged letters 
acknowledging the jurisdiction of the Committee on Ways and 
Means and agreeing to forgo the Committee on Ways and Means' 
consideration of the bill because the Committee on Resources 
had made changes to relevant provisions ensuring that new 
sanctions were not authorized. On October 28, 2003, the 
legislation was favorably reported by the Committee on 
Resources and passed the House by voice vote. On October 29, 
2003, the bill was received in the Senate and referred to the 
Committee on Commerce, Science, and Transportation for further 
consideration. No further action was taken in the Senate.

vii. Trade Agreement Provisions on Entry of Foreign Nationals into the 
        United States

    On September 5, 2003, Senator Gregg introduced S. 1585, 
making appropriations for the Departments of Commerce, Justice, 
and State, the Judiciary, and related agencies for the fiscal 
year ending September 30, 2004. The bill contained provisions 
within the jurisdiction of the Committee on Ways and Means. 
Specifically, Section 214 (the ``Feinstein'' amendment) would 
have proscribed relevant executive agencies from expending 
funds to discuss or enter into trade agreements if those 
agreements contained provisions pertaining to the entry of 
foreign nationals into the United States. On October 28, 2003, 
Chairman Thomas sent a letter to Committee on Appropriations 
Chairman Young and Subcommittee on Commerce, Justice, States, 
Judiciary and Related Agencies Chairman Wolf expressing 
opposition to including this provision in this or any related 
appropriations legislation. This Commerce, State, Justice 
appropriations bill was eventually incorporated into the 
Consolidated Appropriations Act for FY2004 (H.R. 2673). A 
conference report on the omnibus bill was filed on November 25, 
2003 and did not include the ``Feinstein amendment.'' The House 
passed the conference report for H.R. 2673 on December 8, 2003, 
by a recorded vote of 242-176. On January 22, 2004, the Senate 
passed the conference report for H.R. 2673 by a recorded vote 
of 65-28. The President signed the bill into law on January 23, 
2004 (P.L. 108-199).

viii. The Continued Dumping and Subsidy Offset Act

            a. Legislation
    The Continued Dumping and Subsidy Offset Act (CDSOA) was 
enacted into law in October 2000 and requires the annual 
disbursement of antidumping and countervailing duties to 
qualified petitioners and interested parties in the underlying 
trade remedy proceedings (P.L. 106-387). On January 16, 2003, 
the WTO's Appellate Body issued a final adverse ruling against 
the CDSOA, finding that it is inconsistent with United States 
obligations to the WTO. On November 28, 2004, the WTO 
authorized approximately $143 million in retaliation against 
the United States for FY2003 CDSOA disbursements. Under the 
methodology set by the WTO to determine the appropriate amount 
of retaliation, the level may change annually and is set at 72 
percent of CDSOA disbursements for the previous year. FY2004 
CDSOA disbursements of $285 million were issued to recipients 
on November 30, 2004.
    On September 5, 2003, the Senate Appropriations Committee 
reported S. 1585, making appropriations for the Departments of 
Commerce, Justice, and State, the Judiciary, and related 
agencies for the fiscal year ending September 30, 2004. The 
bill included a provision requiring negotiations to be 
conducted within the WTO to recognize the right of members to 
distribute monies collected from antidumping and countervailing 
duties. This Commerce, State, Justice appropriations bill was 
eventually incorporated into the Consolidated Appropriations 
Act for FY2004 (H.R. 2673). A conference report on the omnibus 
bill was filed on November 25, 2003 and included the provision 
on the Continued Dumping and Subsidy Offset Act. The House 
passed the conference report for H.R. 2673 on December 8, 2003, 
by a recorded vote of 242-176. On January 22, 2004, the Senate 
passed the conference report for H.R. 2673 by a recorded vote 
of 65-28. The President signed the bill into law on January 23, 
2004 (P.L. 108-199). This provision was also included in the 
conference report to H.R. 4814, the Consolidated Appropriations 
Act for FY 2005. The House passed the conference report for 
H.R. 4818 on November 20, 2004, by a recorded vote of 344-51, 
with one Member voting present. The Senate passed the 
conference report for H.R. 4818 on November 20, 2004, by a 
recorded vote of 65-30. On March 10, 2004, Representatives 
Ramstad and Crane introduced H.R. 3933 to repeal the CDSOA. No 
further action was taken.
            b. Reports
    On March 2, 2004, the Committee received from the 
Congressional Budget Office (CBO) an economic analysis of the 
Continued Dumping and Subsidy Offset Act of 2000, as requested 
by Chairman Thomas. In the analysis, CBO reported that the law 
subsidizes the output of some firms at the expense of others, 
leading to inefficient use of capital, labor, and other 
resources of the economy. CBO further concluded that the law 
discourages settlement of antidumping and countervailing duty 
cases by U.S. firms and will lead to increased expenditure of 
economic resources on administration, legal representation of 
parties, and various other costs associated with the operation 
of the antidumping and countervailing duty laws. CBO also noted 
that the WTO Appellate Body has ruled that the CDSOA violates 
the WTO agreement, leaving the United States vulnerable to 
retaliation against its exports. CBO estimated that 
distributions under CDSOA will total $3.85 billion from 2005 
through 2014.
    On April 30, 2004, Trade Subcommittee Chairman Crane 
requested the GAO to carry out a comprehensive review of the 
CDSOA and its impact on recipient industries, including an 
analysis of how CDSOA funds have been used by recipient 
companies. The GAO's report is expected to be issued in 2005.

ix. Transportation, Treasury, and Independent Agencies Appropriations 
        Act, 2004

    On July 30, 2003, Representative Istook introduced H.R. 
2989, making appropriations for the Departments of 
Transportation and Treasury for the fiscal year ending 
September 30, 2004. The bill contained provisions within the 
jurisdiction of the Committee on Ways and Means. Specifically, 
section 631 would have waived section 302(a)(1) of the Trade 
Agreements Act of 1979, which prohibits the United States 
government from acquiring information technology products from 
countries that are not parties to reciprocal international 
government procurement agreements. On August 3, 2003, Chairman 
Thomas sent a letter to Committee on Rules Chairman Dreier 
requesting that the rule for consideration of H.R. 2989 not 
include a waiver of Rule XXI of the Rules of the House with 
respect to the two portions of section 631 of the legislation 
within the jurisdiction of the Committee on Ways and Means. On 
September 3, 2003 H. Res. 351, providing for the consideration 
of H.R. 2989, was introduced and reported favorably by the 
Committee on Rules. H. Res. 351 did not include a waiver of 
Rule XXI with respect to the provisions within the jurisdiction 
of the Committee on Ways and Means. H. Res. 351 passed the 
House by a recorded vote of 235-178. On September 4, 2003 when 
H.R. 2989 was considered by the House, a point of order was 
raised against the provisions and the Chair sustained the point 
of order, thus stripping the provisions from the bill.

x. Express Delivery--ITC Study

    On June 30, 2003, Chairman Thomas requested that the ITC 
institute a Section 332 study on the international competitive 
conditions facing express delivery services. The study was 
issued by the ITC in April 2004. The ITC study examined the 
composition of the global industry, the impact of government 
monopolies, and other trade impediments facing express delivery 
firms. The ITC concluded that U.S. firms face anticompetitive 
monopoly practices by foreign governments such as foreign 
postal firms' use of profits derived from monopoly-protected 
services to support non-protected services that compete against 
U.S. service firms.

xi. Overview and Compilation of U.S. Trade Statutes 2003

    On July 8, 2003, Chairman Thomas announced the publication 
of the Committee's Trade ``Blue Book,'' the 2003 edition of the 
``Overview and Compilation of U.S. Trade Statutes'' (WMCP: 108-
5). The Blue Book contains a description and history of trade 
laws as well as the text of the statutes themselves. This 
edition also includes current updates to trade laws due to the 
significant legislation accomplished by the Committee during 
the 107th Congress, such as Trade Promotion Authority, Trade 
Adjustment Assistance, Generalized System of Preferences, 
Customs Reauthorization, and the Andean Trade Preference Act.

xii. Sudan

    On September 9, 2004, Senate Lugar introduced S. 2781, the 
Comprehensive Peace in Sudan Act. On September 23, 2004, S. 
2781 passed the Senate by unanimous consent. The bill contained 
provisions within the jurisdiction of the Committee on Ways and 
Means. On November 18, 2004, Chairman Thomas and International 
Relations Committee Chairman Hyde exchanged letters 
acknowledging the jurisdiction of the Committee on Ways and 
Means and agreeing to forgo the Committee on Ways and Means' 
consideration of the bill because the Committee on 
International Relations had made changes to relevant provisions 
ensuring that the law regarding sanctions was not authorized. 
On November 19, 2004, the legislation, as amended, passed the 
House by voice vote.

xiii. Brown Tree Snakes

    On November 11, 2003, Representative Bordallo introduced 
H.R. 3479, to provide for the control and eradication of the 
brown tree snake on the island of Guam and to prevent the 
introduction of the brown tree snake to other areas of the 
United States. The bill containedprovisions within the 
jurisdiction of the Committee on Ways and Means. The Committee on 
Resources made changes to relevant provisions to take them out of the 
jurisdiction of the Committee on Ways and Means. On September 28, 2004, 
the legislation passed the House by voice vote. On October 10, 2004, 
the bill passed the Senate by unanimous consent. On October 30, 2004, 
the President signed the bill into law (P.L. 108-384).

xiv. Overtime for U.S. Customs and Border Protection Employees

    On June 15, 2004, Representative Rogers introduced H.R. 
4567, making appropriations for the Department of Homeland 
Security for fiscal year 2005. The bill contained provisions 
within the jurisdiction of the Committee on Ways and Means. On 
June 15, 2004, Chairman Thomas and Subcommittee on Homeland 
Security Chairman Rogers exchanged letters acknowledging the 
jurisdiction of the Committee on Ways and Means and agreeing to 
forgo the Committee on Ways and Means' consideration of the 
bill. On October 18, 2004, the legislation passed the House by 
a recorded vote of 400-5. On September 14, 2004, the bill 
passed the Senate with an amendment by a vote of 93-0. On 
October 9, 2004, the conference report to H.R. 4567 passed the 
House by a recorded vote of 368-0. On October 11, 2004, the 
conference report passed the Senate by voice vote. It was 
signed into law by the President on October 18, 2004 (P.L. 108-
334).

xv. Specialty Crops Competitiveness Act

    On October 2, 2003, Congressman Ose introduced H.R. 3242, 
the ``Specialty Crops Competitiveness Act of 2004,'' which 
contained a provision authorizing a position within the U.S. 
Trade Representative's office dedicated to handling specialty 
crops. Chairman Thomas wrote to Chairman Goodlatte of the 
Committee on Agriculture on October 4, 2004, stating that the 
Committee on Ways and Means would forgo action on the bill 
because the provision was removed from the bill. H.R. 3242, as 
amended, passed the House on October 7, 2004, and no further 
action occurred on the bill during the 108th Congress.

xvi. Jurisdiction of the Committee on Ways and Means

    On November 19, 2004, Chairman Thomas wrote Chairman Dreier 
of the Committee on Rules to make recommendations for changes 
to House Rules in the 109th Congress. Chairman Thomas proposed 
to modify the jurisdiction of the Committee on Ways and Means 
as stated in House Rule X from ``(1) Customs, collections 
districts, * * *'' to ``(1) Customs revenue functions, 
collection districts, * * *.'' This change would conform the 
Committee's jurisdiction to the revenue authority defined in 
the Homeland Security Act of 2002. No action on this proposal 
occurred during the 108th Congress.

                 C. Legislative Review of Health Issues


  1. MEDICARE REGULATORY AND CONTRACTING REFORM ACT OF 2003 (H.R. 810)

    The Subcommittee on Health held a hearing on February 13, 
2003, on the regulatory burden on Medicare's providers and 
beneficiaries. On the same day, Subcommittee Chairman Johnson 
and Ranking Member Stark introduced H.R. 810, the ``Medicare 
Regulatory and Contracting Reform Act of 2003.'' The bill 
streamlines the regulatory bureaucracy to create a more 
collaborative working relationship with providers. It creates 
time frames for issuance of new regulations, prohibits 
retroactive application of the issuance of new regulations, 
improves beneficiary and provider education, improves appeals, 
reform recovery of overpayments, and improves new technology 
integration. In addition, the bill reforms Medicare's 
contracting system by consolidating contracting functions for 
Part A and Part B, requiring competition and providing for more 
flexibility among contractors.
    The Health Subcommittee approved H.R. 810, as amended, by a 
voice vote on March 20, 2003. This was followed by full 
Committee approval by a vote of 19-13 on April 2, 2003. The 
Committee on Energy and Commerce reported the bill on April 29, 
2003. Provisions of H.R. 810 were included in H.R. 1 (P.L. 108-
173), the ``Medicare Prescription Drug, Improvement and 
Modernization Act of 2003.''

          2. PATIENT SAFETY IMPROVEMENT ACT OF 2003 (H.R. 877)

    Chairman Johnson and Ranking Member Stark introduced the 
Patient Safety Improvement Act on February 25, 2003. The 
legislation would promote voluntary and confidential reporting 
of errors to newly created Patient Safety Organizations (PSOs) 
certified by the U.S. Department of Health and Human Services 
(HHS). The PSOs would analyze reported mistakes, provide 
feedback designed to prevent future accidents to providers, and 
forward non-identifiable information to HHS, which would be the 
focal point of Administration policy on patient safety. The HHS 
would administer a new medical errors database of non-
identifiable information that researchers would use to identify 
national trends and encourage best practices to prevent errors 
and improve health quality.
    The Secretary of HHS would publish, within 24 months, 
voluntary standards of computer interoperability to promote 
integration of health information systems in hospitals and 
other facilities. The bill would establish a new technology 
advisory board to provide expert advice to the Secretary of HHS 
in creating these standards. Because clinical and 
administrative efficiencies would accrue by facilitating 
communication between computer systems, this provision would be 
expected to save significant resources across all medical 
providers, including in the Medicare program.
    The bill would make clear that no State law mandating 
reporting would be preempted or affected by the legislation. 
The Secretary of HHS would provide technical assistance to the 
States in maintaining or implementing State-reporting systems.
    The Full Committee reported the bill by voice vote on 
February 27, 2003. The legislation was subsequently referred to 
the Committee on Energy and Commerce which reported a similar 
bill solely in their jurisdiction (H.R. 663) that was passed by 
the House on March 12 by a vote of 418-6. No conference 
committee was convened prior to the end of the 108th Congress.

3. MEDICARE PRESCRIPTION DRUG, IMPROVEMENT AND MODERNIZATION ACT (H.R. 
                             1, H.R. 2473)

    In 2003, the Committee on Ways and Means and its Health 
Subcommittee continued its series of hearings on the state of 
the Medicare program and how it needs to be modernized, holding 
seven hearings in 2003. These hearings included an extensive 
review of many aspects of the Medicare program. Specifically, 
the hearings addressed Medicare's solvency and overall 
sustainability (February 5, 2003), the Bush Administration's 
priorities on Medicare (February 6, 2003), the regulatory 
burden on providers and beneficiaries (February 13, 2003), the 
Medicare Payment Advisory Commission's (MedPAC) report on 
Medicare provider payment policies (March 6, 2003), the need to 
integrate a prescription drug benefit into Medicare (April 9, 
2003), modernizing beneficiary cost-sharing and reforming 
Medigap (May 1, 2003), and the need to eliminate waste, fraud 
and abuse in the Medicare program (July 17, 2003). These 
hearings provided the foundation for the comprehensive Medicare 
Prescription Drug, Improvement and Modernization Act (H.R. 2473 
and H.R. 1).
    H.R. 2473 was introduced June 16, 2003, and was reported 
out of the Committee on Ways and Means June 17, 2003, by a vote 
of 25-15. On June 27, the House passed H.R. 1, which included 
provisions of H.R. 2473, by a vote of 216-215. In addition, 
H.R. 2596, the Health Savings and Affordability Act of 2003, 
was included as part of H.R. 1 through a self-executing rule. 
The Senate passed similar legislation on June 27, 2003, by a 
vote of 76-21. The bills were conferenced, reported favorably, 
and the House passed the Conference Report on November 22, 
2003, by a vote of 220-215. The Senate also passed the 
Conference Report by a vote of 54-44 on November 25, 2003, and 
the legislation was signed into law December, 8, 2003 (P.L. 
108-173).
    The Medicare Prescription Drug, Improvement and 
Modernization Act establishes new voluntary prescription drug 
coverage under a new Part D of Title XVIII of the Social 
Security Act. Effective January 1, 2006, beneficiaries can 
purchase prescription drug coverage under a number of options 
under a new Part D of Medicare. Beneficiaries will be able to 
purchase either ``standard coverage'' or alternative coverage 
with actuarially equivalent benefits. In 2006, ``standard 
coverage'' will have a $250 deductible, 25 percent coinsurance 
for costs between $251 and $2,250, and catastrophic coverage 
after out-of-pocket expenses of $3,600. Once the beneficiary 
reaches the catastrophic limit, the program will pay all costs 
except for nominal cost-sharing. Low-income subsidies will be 
provided for persons with incomes below 150 percent of poverty. 
Low-income individuals (below 135 percent of poverty) will have 
no gap in coverage, pay no premium, and have $1 to $2 
copayments for generics and $3 to $5 copayments for preferred 
drugs. Seniors with incomes between 135 percent and 150 percent 
of poverty will pay reduced premiums, a $50 deductible and 15 
percent coinsurance below the catastrophic limit. Coverage will 
be provided through competing prescription drug plans or 
integrated Medicare Advantage plans, which cover all Medicare 
benefits, including prescription drugs. The program will rely 
on private plans to provide coverage and to bear some of the 
financial risk for drug costs; Federal subsidies will be 
provided to encourage participation. Plans will determine 
premiums through a bid process and will compete based on 
premiums, quality, and negotiated prices. On average, federal 
subsidies will cover approximately 75 percent of premium costs.
    Plans have incentives and flexibility to aggressively 
negotiate with pharmaceutical manufacturers, pharmacies, and 
others in the distribution chain to lower prescription drug 
costs.
    In order to encourage employers and others to retain and 
enhance retiree health coverage, the law provides $87 billion 
over ten years in tax-free subsidies to employer and union 
plans that offer at least the actuarial value of the Medicare 
benefit.
    Prior to the new benefit being implemented, a temporary 
program is established to provide prescription drug discount 
cards to eligible Medicare beneficiaries. This program provides 
access to prescription drug discounts through card sponsors to 
persons who voluntarily enroll in the program. Each card 
sponsor provides each enrollee with access to negotiated 
prices. The program also provides $600 per year (in 2004 and 
2005) in transitional assistance funds for certain low-income 
persons enrolled in the discount card. The Health Subcommittee 
held a hearing on the implementation of the drug discount card 
program on April 1, 2004.
    The law provides a number of quality improvements and 
beneficiary protections, including electronic prescribing, 
formulary appeals, the ability to visit any pharmacy, and 
medication therapy management programs. The Health Subcommittee 
held hearing on the use of health information technology and 
electronic prescribing on June 17, and July 22, 2004, 
respectively.
    The law also provided for the establishment of a pilot 
program to test various approaches to the management of chronic 
conditions among Medicare beneficiaries. The Health 
Subcommittee held a hearing on the implementation of the 
Chronic Care Improvement Program (CCIP) on May 11, 2004.
    The new Medicare law permits seniors who already have 
prescription drug coverage through privately purchased Medigap 
coverage to keep that coverage if they do not want to enroll in 
the new Medicare drug benefit. However, maintaining Medigap 
coverage and delaying enrollment in Part D will likely result 
in a premium penalty as Medigap coverage is not as generous as 
Part D coverage. It also instructs the National Association of 
Insurance Companies (NAIC) to create two high deductible 
Medigap plans.
    The law increases payments to Medicare+Choice plans by 
paying plans at least the fee-for-service rate and tying 
payment updates to fee-for-service growth. The program is 
renamed Medicare Advantage. In 2006, Medicare Advantage will 
initiate a competitive approach to encourage beneficiaries to 
select more efficient plans. When plans bid below a benchmark 
in their area, savings will be split between the beneficiary 
(75 percent) and taxpayers (25 percent). The law includes 
incentives for private preferred provider organizations (PPOs) 
to operate regionally, beginning in 2006. In 2010, a pilot 
program will be established to test a weighted average bidding 
formula where traditional Medicare will compete directly with 
private plans. Seniors will be protected from possible premium 
volatility with a 5 percent cap on premium variation.
    The law blocks the significant payment cuts to physicians 
and provides 2 years of modest payment increases. It increases 
payments to rural and suburban hospitals by equalizing the 
standardized amount, increasing Medicare disproportionate share 
(DSH) funding for small hospitals, improving the critical 
access hospital program, and increasing payments to areas with 
low wage costs. In addition, the law provides temporary 
increases to indirect medical education payments while 
retaining the freeze on hospitals with extraordinarily high 
direct graduate medical education. Dialysis facilities receive 
a payment increase in 2005. Payments to laboratories are frozen 
for five years and the caps on outpatient therapy benefits are 
lifted for two years. Durable medical equipment providers are 
subject to a freeze followed by a competitive bidding program.
    The average wholesale pricing system for currently covered 
Medicare prescription drugs is fundamentally reformed to end 
abuses in the current system that had been highlighted in 
numerous GAO and HHS Office of the Inspector General reports 
and in Congressional hearings. While overpayments for drugs are 
reduced, payments for drug administration are substantially 
increased.
    In order to keep seniors healthy, the law adds other new 
benefits for Medicare beneficiaries including an initial 
preventive physical examination for new beneficiaries, coverage 
of diabetes screening tests for individuals at high risk and 
coverage of cardiovascular screening blood tests once every 2 
years.
    When Medicare was enacted, the Part B premium paid for 
nearly 50 percent of a senior's costs. Today, the senior's 
premium covers only 25 percent of those costs for Part B 
services. The law decreases subsidies to Part B premiums for 
seniors with incomes above $80,000. In addition, the Part B 
deductible is indexed to growth in Medicare's costs. When 
Medicare was enacted, this deductible comprised 45 percent of 
costs; today it reflects just 3 percent of those costs. Every 
year it was not adjusted, taxpayer obligations increased.
    The entire regulatory reform bill, H.R. 810, as modified in 
conference was included in the legislation to streamline the 
regulatory process and modernize Medicare's contracting 
functions.

    4. THE HEALTH SAVINGS AND AFFORDABILITY ACT OF 2003 (H.R. 2596)

    H.R. 2596, the Health Savings and Affordability Act of 
2003, was reported from the full committee on June 19, 2003, by 
a vote of 23 to 16. The legislation was included as part of 
H.R. 1 through a self-executing rule, and was signed into law 
on December 8, 2003 (P.L. 108-173).
    The Subcommittee worked with the Department of Treasury to 
ensure that technical guidance issued by the Department was 
consistent with legislative intent.
    The law creates health savings accounts (HSAs) which 
provide for tax-favored savings for health care expenses in 
conjunction with a high deductible health policy. In general, 
an HSA is a tax-exempt trust or custodial account created 
exclusively to pay for the qualified medical expenses of the 
account holder and his or her spouse and dependents. The 
minimum deductible is $1,000 for a self policy and $2,000 for a 
family policy. Contributions to an HSA are deductible if made 
by an eligible individual and are excludable from gross income 
and wages for employment tax purposes if made by the employer 
of an eligible individual. Family members may also make 
nondeductible contributions to an HSA on behalf of an eligible 
individual. Distributions from an HSA for qualified medical 
expenses are not includible in gross income. Tax-free 
distributions are allowed for health care needs not covered by 
the insurance policy, and can also be made for continuation 
coverage required by Federal law (i.e., COBRA), health 
insurance for the unemployed, and long-term care. Distributions 
that are not for qualified medical expenses are subject to 
taxation and to an additional 10 percent tax. The additional 10 
percent tax does not apply after the individual attains age 65, 
dies or becomes disabled.
    The individual owns the account. The savings follow the 
individual from job to job and into retirement. Catch-up 
contributions during peak saving years allow individuals to 
develop equity to pay for retiree health needs. Once fully 
phased in, catch-up contributions allow a married couple to 
save an additional $2,000 annually if both spouses are at least 
55.

            D. Legislative Review of Social Security Issues


               1. SOCIAL SECURITY PROTECTION ACT OF 2003

    On February 12, 2003, Subcommittee Chairman Shaw introduced 
H.R. 743, the ``Social Security Protection Act of 2003.'' The 
bill was referred to the Committee on Ways and Means. On March 
5, 2003, the bill, as amended, was considered by the House 
under suspension of the rules. The bill did not receive the 
needed two-thirds votes of approval, and failed by a vote of 
249-180. On March 24, the Committee on Ways and Means favorably 
reported the bill, as amended, by a vote of 35-2. On April 2, 
2003, the House passed the bill, as amended, by a vote of 396-
28. In the Senate, H.R. 743 was referred to the Senate 
Committee on Finance, which favorably reported the bill with an 
amendment in the nature of a substitute on October 29, 2003. On 
December 9, 2003, the Senate considered and passed the 
Committee substitute, as amended, by unanimous consent. On 
February 11, 2004, H.R. 743, as passed by the Senate, was 
considered by the House, and passed by a vote of 402-19. 
President Bush signed the bill into law on March 2, 2004 (P.L. 
108-203).
    H.R. 743 protects vulnerable Social Security recipients 
from representative payees who misuse benefits by: enhancing 
oversight of representative payees; disqualifying fugitive 
felons or persons convicted and imprisoned more than a year 
from serving as representative payees; creating a new civil 
monetary penalty for representative payees who misuse funds; 
requiring representative payees who misuse funds to forfeit 
their fees; holding representative payees liable for repayment 
of misused funds through the overpayment recovery process; 
authorizing the re-issuance of benefits misused by certain 
representative payees; and requiring representative payees who 
are delinquent in filing annual accounting reports to collect 
the individual's benefits in person at a local Social Security 
office.
    H.R. 743 protects the Social Security program by: 
withholding Social Security benefits from those who flee 
prosecution, or custody or confinement after conviction of a 
felony, or who violate probation or parole; imposing a civil 
monetary penalty against persons who withhold material facts in 
order to obtain or increase benefits; requiring individuals who 
provide Social Security Administration (SSA)-related services 
for a fee to explain that the SSA may provide services free of 
charge; increasing overpayment collection by authorizing 
recovery across Old-Age, Survivors, and Disability Insurance 
and Supplemental Security Income (SSI) program lines; 
preventing overpayments by requiring the SSA to issue a receipt 
when a person receiving disability benefits reports work or 
changes in earnings; imposing fines on persons who intimidate, 
impede, or threaten a person carrying out the administration or 
duties of the Social Security Act (P.L. 74-271); and allowing 
Federal courts to order a person who breaks the law relating to 
Social Security to make restitution to the individual, the 
trust funds, or the general fund as appropriate.
    The legislation improves Social Security and SSI 
applicants' access to representation by extending withholding 
of attorney fee payments to SSI claims for 5 years, coinciding 
with a 5-year nationwide demonstration project to extend fee 
withholding to qualified non-attorney representatives for the 
first time. To ensure enough attorneys and representatives 
remain available to help applicants, the 6.3 percent assessment 
on an attorney's approved fee is capped at $75 (adjusted 
annually for inflation) in both Social Security and SSI claims.
    H.R. 743 enhances opportunities for individuals with 
disabilities to return to work by improving the effectiveness 
of programs established under the Ticket to Work and Work 
Incentives Improvement Act of 1999 (P.L. 106-170), including 
clarifying that the Work Opportunity Tax Credit is available to 
employers who hire a disabled beneficiary referred from an 
employment network (not just the State rehabilitation agency); 
and extending certain demonstration projects, as well as 
benefits planning and advocacy programs. The legislation also 
enables individuals receiving disability benefits based on a 
parent's earnings due to a childhood disability to work without 
fear of losing the ability to restart those benefits if they 
must later stop working.
    The legislation improves and simplifies the SSI program by: 
enabling children of military parents stationed overseas to 
receive benefits if the child is born or becomes disabled while 
outside the United States; improving benefits for children and 
spouses of military personnel by eliminating disparities in how 
cash and non-cash military compensation is treated; 
establishing uniform treatment of interest and dividend income 
and time frames for exclusion of assets in determining 
eligibility and benefit amount; simplifying program 
administration; and amending rules for students receiving SSI 
to encourage work.
    Finally, the legislation corrects, clarifies, and modifies 
various technical aspects of the law, including closing a 
loophole in the law that exempted State and local workers who 
do not pay Social Security taxes from the Government Pension 
Offset, improving public education on Social Security 
provisions affecting benefits for government workers not 
subject to Social Security taxes, adding Kentucky and Louisiana 
to the list of states allowed to have a divided retirement 
system, and technical changes to the Railroad Retirement and 
Survivors' Improvement Act of 2001 (P.L. 107-90).

2. SOCIAL SECURITY NUMBER PRIVACY AND IDENTITY THEFT PREVENTION ACT OF 
                                  2003

    On July 25, 2003, Subcommittee Chairman Shaw introduced 
H.R. 2971, the ``Social Security Number Privacy and Identity 
Theft Prevention Act of 2003.'' The bill was referred to the 
Committee on Ways and Means, Financial Services, Energy and 
Commerce, and Judiciary. The bill, as amended, was ordered 
reported by the Committee on Ways and Means on July 21, 2004, 
by a vote of 33-0. Other Committees of jurisdiction did not act 
on the bill.
    However, sections 104 and 201-205 from the bill were 
included in H.R. 10, the ``9-11 Recommendations Implementation 
Act.'' These sections of the bill removed SSNs from drivers' 
licenses and motor vehicle registrations and improved the 
integrity of the process for issuing SSNs and SSN cards. They 
were included in H.R. 10 to address the 9-11 Commission's 
recommendation in its Final Report of the National Commission 
on Terrorist Attacks on the United States to set standards for 
the issuance of sources of identification. H.R. 10 was passed 
by the House on October 8, 2004, by a vote of 282-134. The 
Senate passed S. 2845, the ``National Intelligence Reform Act 
of 2004,'' on October 6, 2004, by a vote of 96-2. The House 
substituted the language from H.R. 10 for the language in S. 
2845, and passed S. 2845, as amended, on October 16, 2004, 
pursuant to H. Res. 827. The conference report on S. 2845 was 
agreed to by the House on December 7, 2004, by a vote of 336-75 
and by the Senate on December 8, 2004, by a vote of 89-2. The 
President signed the bill into law on December 10, 2004 (P.L. 
108-458).
    Sections 7213 and 7214 of the Conference Report on S. 2845 
included sections 104 and 202 from H.R. 2971, which removed 
SSNs from drivers' licenses and motor vehicle registrations and 
improved the process of issuing SSNs to newborns. In addition, 
section 7213 of the Conference Report contained language 
similar to sections 201 and 204 from H.R. 2971, which required 
the SSA to independently verify birth records with the issuing 
agency and to limit issuance of replacement SSN cards. Section 
7213 of the Conference Report also contained other provisions 
to prevent fraud and misuse with respect to SSNs: requiring the 
SSA to establish minimum standards for verification of 
documents submitted to obtain an original or replacement SSN 
card; requiring the SSA to add death and fraud indicators to 
SSN verification services provided to employers, State drivers' 
license agencies, and others; and requiring the Commissioner of 
Social Security, in consultation with the Secretary of Homeland 
Security, to form an interagency task force to establish 
requirements for further improving the security of SSN cards 
and numbers. Finally, sections 7211 and 7212 of the Conference 
Report prohibited Federal agencies (including the SSA) from 
accepting for official purposes birth certificates and drivers' 
licenses not meeting certain minimum standards.
    H.R. 2971 would have prevented the sale, purchase, and 
display to the general public of SSNs in the public and private 
sectors (with certain exceptions for law enforcement, national 
security, and other limited situations). The legislation would 
have permitted the United States Attorney General to authorize 
the sale, purchase, or display to the general public of SSNs in 
limited circumstances, after considering the costs and benefits 
to the public, government, and businesses, and providing for 
restrictions to prevent fraud, crime, deception, identity 
theft, and risk of harm. The bill would have prevented 
businesses from demanding an individual's SSN as a condition of 
providing a product or service, unless the SSN is required 
under Federal law. Also, the bill would have afforded the SSN 
the same privacy protection as information in a full consumer 
report under the Fair Credit Reporting Act (15 U.S.C. 1681 et. 
seq.).
    In addition, the legislation would have tightened controls 
on the issuance of SSNs, including independent verification of 
birth records, improvements in the process of issuing SSNs to 
newborns, and restricting issuance of replacement SSN cards. 
The bill also would have strengthened enforcement by creating 
new criminal and civil penalties for violations of the law 
relating to the sale, purchase, display to the general public, 
and misuse of SSNs, and would have enhanced prison sentences 
for SSN misuse associated with repeat offenders, drug 
trafficking, violent crimes, and terrorism. In addition, H.R. 
2971 would have created new criminal and civil penalties for 
SSA employees who fraudulently sell or transfer SSNs or SSN 
cards.

            E. Legislative Review of Human Resources Issues


                           1. WELFARE REFORM

a. Reauthorization of the Temporary Assistance for Needy Families 
        Program

    H.R. 4, the ``Personal Responsibility, Work, and Family 
Promotion Act of 2003,'' would extend and modify the Temporary 
Assistance for Needy Families (TANF) and related programs 
including child care, child support, and child protection. The 
TANF program, first authorized by the Personal Responsibility 
and Work Opportunity Reconciliation Act of 1996 (P.L. 104-193), 
provides cash assistance to 2 million low-income families 
through a program of temporary cashbenefits, work supports, and 
other assistance. The 1996 welfare reform law authorized the TANF 
program through September 30, 2002. After being extended twice in the 
107th Congress, six short-term TANF extension bills were passed in the 
108th Congress. The most recent extension runs through March 31, 2005. 
See the section on Extensions of the Temporary Assistance for Needy 
Families Program below for more detailed information.
    Titles I and II of H.R. 4 would extend the authorization of 
the TANF block grant through fiscal year 2008, with block grant 
funding for States and territories maintained at the current 
level of $16.6 billion per year, and would increase funding for 
the Child Care and Development Block Grant. Title I also would 
amend the purposes of TANF, including by adding an overarching 
purpose of improving child well-being. The legislation would 
focus additional funding specifically on promoting healthy 
marriage, including by replacing the current $100 million bonus 
fund rewarding States with 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 State matching requirement). The bill also would 
provide 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 would be reserved for improving Native American child 
protection programs. The legislation would authorize a new $20 
million per year fatherhood program designed to promote closer 
involvement between fathers and their families. The legislation 
would convert high performance bonus funds into a new $100 
million per year bonus fund to reward employment achievement.
    H.R. 4 would increase mandatory funds for the Child Care 
and Development Block Grant under the Committee on Ways and 
Means' jurisdiction from $2.717 billion in 2003 to $2.917 
billion for each of fiscal years 2004 through 2008, for a total 
increase of $1 billion over the 5-year period. The legislation 
would increase from 30 percent to 50 percent the share of TANF 
funds that States may transfer to the Child Care and 
Development Block Grant and Social Services Block Grant; of 
this, States could transfer no more than 10 percent of TANF 
funds to the Social Services Block Grant in each of fiscal 
years 2004 through 2008. Separately, the legislation would 
increase the authorization for discretionary funding under the 
Child Care and Development Block Grant by a total of up to $3 
billion through 2008.
    H.R. 4 would specify universal engagement and self-
sufficiency plan requirements for all families receiving cash 
assistance. It would eliminate the option for individuals to 
receive benefits for up to 2 years without participating in 
work or other activities and specify certain conditions under 
which States must provide for a full check sanction for 
families receiving TANF. Further, H.R. 4 gradually would 
increase the overall State work participation rate requirement 
to 70 percent by fiscal year 2008 and would raise the total 
number of required hours in certain activities. The legislation 
would eliminate the separate and higher State work 
participation rate requirement that currently applies to two-
parent families, and would update 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. 4 would amend the child support program 
to provide matching Federal funds to States that pass through a 
limited amount of child support to families receiving cash 
welfare benefits, allow States to distribute all child support 
collected to former welfare families, and impose a $25 annual 
user fee on certain child support cases. In addition, the 
legislation would require a report on undistributed child 
support payments, reduce the amount of past-due child support 
that would trigger passport denial, specify 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, 
expand the Federal administrative offset program for certain 
past-due child support, allow for limited withholding of 
veterans' disability benefits for child support purposes, and 
revise technical funding formulas related to technical 
assistance. A provision in H.R. 4 that would have provided 
access to the child support program's National Directory of New 
Hires to improve the administration of State unemployment 
benefit programs was included in H.R. 3463, which became P.L. 
108-295. (See Child Support Enforcement section below for 
additional information on this provision.)
    Title IV of H.R. 4 would extend and expand waiver authority 
for Federal child protection programs administered under Title 
IV-E of the Social Security Act.
    Title V of H.R. 4 would amend Title XVI of the Social 
Security Act to require review of a specified share of State 
agency disability benefit eligibility determinations before 
making benefit payments under the Supplemental Security Income 
program.
    Title VI of H.R. 4 would authorize a demonstration grant 
program to allow States flexibility to coordinate multiple 
Federal programs that provide assistance to low-income 
families.
    Titles VII and VIII would reauthorize the abstinence 
education and transitional medical assistance programs through 
fiscal year 2008.
    H.R. 4 was introduced by Representative Pryce on February 
4, 2003, with Subcommittee Chairman Herger and full Committee 
Chairman Thomas as original cosponsors. The legislation was 
passed in the House on February 13, 2003, by a vote of 230-192. 
On October 3, 2003, the Senate Committee on Finance reported 
the bill to the Senate with an amendment in the nature of a 
substitute. H.R. 4 was considered in the Senate on March 31, 
and April 1, 2004; a motion to invoke cloture on the bill and 
proceed to final passage of the legislation failed to receive 
sufficient support. No further action on H.R. 4 was taken in 
the 108th Congress.

b. Extensions of the Temporary Assistance for Needy Families Program

    H.J. Res. 2, a Joint Resolution making consolidated 
appropriations for the fiscal year ending September 30, 2003, 
included a section extending TANF block grants for States, 
supplemental grants, mandatory child care, child protection 
waiver authority, transitional medical assistance, and 
abstinence education, at corresponding fiscal year 2002 levels, 
through June 30, 2003. The resolution was introduced on January 
7, 2003, and passed the House by voice vote on January 8, 2003. 
After passing, as amended, in the Senate on January 23, 2003, 
both the House and Senate passed a conference report on the 
bill on February 13, 2003. The bill became P.L. 108-7 on 
February 20, 2003.
    H.R. 2350, the ``Welfare Reform Extension Act of 2003,'' 
extended TANF and related programs through the remainder of 
fiscal year 2003. The bill was introduced by Subcommittee 
Chairman Herger on June 5, 2003, and passed under suspension in 
the House on June 11, 2003, by a vote of 406-6. The Senate 
agreed to the resolution under unanimous consent on June 27, 
2003, and the bill was signed by the President on June 30, 2003 
(P.L. 108-40).
    Title I of H.R. 3146 extended through March 31, 2004, TANF 
and related programs. H.R. 3146 was introduced on September 23, 
2003, by full Committee Chairman Thomas and was passed by the 
House under suspension by voice vote on September 24, 2003. On 
September 30, 2003, the Senate passed the legislation with an 
amendment by unanimous consent and the House agreed to the 
Senate amendment under a unanimous consent agreement. The bill 
became P.L. 108-89.
    S. 2231, the ``Welfare Reform Extension Act of 2004,'' 
extended TANF and related programs, this time through June 30, 
2004. The bill was introduced by Senate Finance Committee 
Chairman Grassley on March 25, 2004, and passed the Senate by 
unanimous consent that same day. The House agreed to the bill 
under suspension by voice vote on March 30, 2004, after which 
it was signed by the President on March 31, 2004 (P.L. 108-
210).
    H.R. 4589, the ``TANF and Related Programs Continuation Act 
of 2004,'' introduced by Subcommittee Chairman Herger on June 
16, 2004, extended TANF and related programs through September 
30, 2004. Under suspension and by voice vote, the measure 
passed the House on June 22, 2004. The Senate passed the bill 
under unanimous consent on June 23, 2004, and the President 
signed the legislation on June 30, 2004 (P.L. 108-262).
    H.R. 5149, the ``Welfare Reform Extension Act, Part VIII,'' 
was introduced on September 24, 2004, by Subcommittee Chairman 
Herger to extend TANF and related programs through March 31, 
2005. The House considered the measure on September 29, 2004, 
and it passed by a vote of 416-0 on September 30, 2004. The 
Senate passed H.R. 5149 by unanimous consent and the President 
signed the legislation on September 30, 2004 (P.L. 108-308).

                             2. CHILD CARE

    H.R. 4 would have increased mandatory funds for the Child 
Care and Development Block Grant under the Committee on Ways 
and Means' jurisdiction from $2.717 billion in 2003 to $2.917 
billion for each of fiscal years 2004 through 2008, for a total 
increase of $1 billion over the 5-year period. Additional 
information about H.R. 4 and child care is provided in the 
review of TANF reauthorization above.

                      3. CHILD SUPPORT ENFORCEMENT

    Title III of H.R. 4, the ``Personal Responsibility, Work, 
and Family Promotion Act of 2003,'' would amend the child 
support program to provide matching Federal funds to States 
that pass through a limited amount of child support to families 
receiving cash welfare benefits, allow States to distribute all 
child support collected to former welfare families, and impose 
a $25 annual user fee on certain child support cases, among 
other changes. Additional information regarding H.R. 4 is 
provided in the review of TANF reauthorization above.
    A provision amending the Social Security Act allowing for 
limited information sharing between the child support program's 
National Directory of New Hires and certain housing assistance 
programs in order to determine the employment and income of 
housing program participants was included in H.R. 2673, a 
consolidated appropriations bill for fiscal year 2004. The bill 
was introduced July 9, 2003, passed in the House by a vote of 
347-64 on July 14, 2003, and passed, as amended, in the Senate 
on November 6, 2003, by a vote of 93 to 1. After a conference 
report passed the House on December 8, 2003, by a vote of 242-
176, and the Senate on January 22, 2004, by a vote of 65-28, 
the President signed the bill into law on January 23, 2004 
(P.L. 108-199).
    Section 3 of H.R. 3463 provided access to the child support 
program's National Directory of New Hires for administration of 
State unemployment programs. H.R. 3463, ``the SUTA Dumping 
Prevention Act,'' became P.L. 108-295 on August 9, 2004. See 
the Unemployment Compensation section below for more detail on 
H.R. 3463.
    The child support program's National Directory of New Hires 
was further amended by a provision in the final omnibus 
appropriations bill for fiscal year 2005, H.R. 4818. The 
provision allows the Secretary of the Treasury to use 
information in the New Hire database to help in the Federal 
debt collection process. H. Con. Res. 528 directed the Clerk of 
the House of Representatives to make corrections to H.R. 4818 
and include the National Directory of New Hires provision which 
amends Title IV of the Social Security Act. H. Res. 866, a 
resolution that passed in the House on November 20, 2004, by a 
vote of 233-158, included language providing for the adoption 
of H. Con. Res. 528. H. Con. Res. 528 passed in the Senate, 
with an amendment, by unanimous consent that same day. The 
House passed the amended version of H. Con. Res. 528 on the 
suspension calendar by a vote of 381-0 on December 7, 2004, and 
President Bush signed the corrected version of H.R. 4818 into 
law on December 8, 2004 (P.L. 108-477).

                    4. SUPPLEMENTAL SECURITY INCOME

    Title V of H.R. 4 would amend Title XVI of the Social 
Security Act to require review of a specified share of State 
agency disability benefit eligibility determinations before 
making benefit payments under the Supplemental Security Income 
program. See the TANF reauthorization section above for more 
detailed information on H.R. 4.
    H.R. 743, the ``Social Security Protection Act of 2003,'' 
amended the Social Security Act to enhance program protections 
for disabled Social Security and Supplemental Security Income 
recipients. The legislation protected recipients from misuse of 
benefits by their representative payees, prevented fraudulent 
use of Social Security programs, improved the attorney fee 
payment system to help individuals with disabilities gain 
access to representation, encouraged more individuals with 
disabilities to return to work, and clarified Social Security 
law. After House and Senate passage, H.R. 743 was signed into 
law by the President on March 2, 2004 (P.L. 108-203). For 
further discussion of H.R. 743, see the Subcommittee on Social 
Security section above.
    A provision prescribing penalties for knowingly 
transferring, possessing, or using, without lawful authority, a 
means of identification of another person during and in 
relation to specified felony convictions, including violations 
related to the Supplemental Security Income program law, was 
included in H.R. 1731, the ``Identity Theft Penalty Enhancement 
Act.'' Introduced on April 10, 2003, the bill passed in the 
House by a voice vote under suspension of the rules on June 23, 
2004, and passed in the Senate on June 25, 2004, by unanimous 
consent. The President signed the legislation into law on July 
15, 2004 (P.L. 108-275).

             5. CHILD PROTECTION, FOSTER CARE, AND ADOPTION

    H.R. 3182, the ``Adoption Promotion Act of 2003,'' 
reauthorized the Adoption Incentives program under part E of 
Title IV of the Social Security Act. This legislation 
reauthorized the program at $43 million per year for fiscal 
years 2004 through 2008 while retaining the current incentive 
awards provided to States to promote adoption and updating the 
incentive award calculation process. Adoption of older children 
is encouraged by an additional incentive award to States of 
$4,000 per child age 9 or older adopted above prior year 
levels. H.R. 3182 also reauthorized the original $10 million 
authorization of appropriations for technical assistance for 
fiscal years 2004 through 2006; requested a report from HHS 
highlighting State efforts to promote adoption for children; 
and gave HHS authority to impose small financial penalties on 
States that do not submit timely and complete foster care and 
adoption data.
    A Subcommittee hearing on April 8, 2003, reviewed the 
implementation of the 1997 Adoption and Safe Families Act (P.L. 
105-89) and examined the Adoption Incentives program prior to 
its reauthorization. Representatives from HHS, the GAO, and the 
National Conference of State Legislatures, as well as program 
administrators and policy experts presented testimony at the 
hearing.
    H.R. 3182 was introduced by Representative Camp, a member 
of the Subcommittee on Human Resources, on September 25, 2003. 
The House agreed to the legislation on October 8, 2003, under 
suspension of the rules by voice vote. The Senate passed the 
bill on November 14, 2003, by unanimous consent. On December 2, 
2003, the bill was signed by the President and became P.L. 108-
145.
    H.R. 4504, the ``Safe and Timely Interstate Placement of 
Foster Children Act of 2004,'' was introduced by Majority 
Leader DeLay and Subcommittee Chairman Herger on June 3, 2004. 
H.R. 4504, as amended, passed the House on October 5, 2004, 
under suspension of the rules by voice vote.
    Following eight Subcommittee hearings on child protection 
issues, H.R. 4856, the ``Child Safety, Adoption, and Family 
Enhancement (Child SAFE) Act of 2004,'' was introduced by 
Subcommittee Chairman Herger on July 19, 2004. No further 
action was taken on H.R. 4856 in the 108th Congress.

                      6. UNEMPLOYMENT COMPENSATION

a. Temporary Extended Unemployment Compensation

    S. 23, legislation to amend the Temporary Extended 
Unemployment Compensation (TEUC) Act of 2002 which was Title II 
of the Job Creation and Worker Assistance Act of 2002 (Public 
Law 107-147), extended eligibility for TEUC benefits through 
June 1, 2003, with a phase out continuing the availability of 
benefits through August 30, 2003. The legislation passed the 
Senate by voice vote on January 7, 2003, and passed in the 
House by a vote of 416-4 on January 8, 2003. The President 
signed the legislation on January 8, 2003 (P.L. 108-1).
    H.R. 1559, the ``Emergency Wartime Supplemental 
Appropriations Act, 2003'' signed into law on April 16, 2003 
(P.L. 108-11), further amended the TEUC Act of 2002 (P.L. 107-
147) to provide additional temporary extended unemployment 
compensation benefits to certain eligible displaced airline 
industry related workers through December 2004.
    H.R. 2185, the ``Unemployment Compensation Amendments of 
2003,'' extended eligibility for TEUC benefits through December 
31, 2003, with a phase-out continuing the availability of 
benefits through March 31, 2004. H.R. 2185 was introduced by 
Representative Dunn, a member of the full Committee, on May 21, 
2003, and passed in the House by recorded vote of 409-19 on May 
22, 2003. The Senate agreed to the bill, without amendment, by 
unanimous consent on May 23, 2003, and the President signed the 
legislation on May 28, 2003 (P.L. 108-26).

b. SUTA Dumping Prevention Act

    On June 19, 2003, the Subcommittees on Human Resources and 
Oversight held a joint hearing on SUTA (State Unemployment Tax 
Act) dumping. The Subcommittees heard testimony from the U.S. 
Department of Labor, the GAO, program administrators, and 
employers on the issue of SUTA dumping and possible solutions 
to the problem. Subcommittee Chairman Herger, along with 
Ranking Member Cardin and other Committee Members, introduced 
H.R. 3463, the ``SUTA Dumping Prevention Act of 2003,'' on 
November 6, 2003. The House passed H.R. 3463, as amended, by 
voice vote on July 14, 2004, under suspension of the rules. The 
measure passed the Senate, without amendment, by unanimous 
consent on July 22, 2004, and was signed by the President on 
August 9, 2004 (P.L. 108-295).

        7. CHARITABLE CHOICE AND INDIVIDUAL DEVELOPMENT ACCOUNTS

    H.R. 7, the ``Charitable Giving Act of 2003,'' included a 
provision that would extend the authorization of the Individual 
Development Account (IDA) demonstration program for 5 years 
through fiscal year 2008. The bill also would make several 
technical changes to ease program administration, such as 
encouraging ``financial literacy activities,'' expanding 
certain income criteria for determining eligibility, and 
providing more flexibility in spending IDA funds for 
educational and other expenses. Other sections of H.R. 7 would 
create a new $150 million compassion capital grant fund to 
support and replicate promising social service programs, and 
restore the 10 percent annual limit on State transfers from the 
Federal Temporary Assistance for Needy Families program to the 
Social Services Block Grant program.
    H.R. 7 was introduced by Representative Blunt on May 7, 
2003. The bill was reported, as amended, by the Committee on 
Ways and Means on September 16, 2003, by voice vote and the 
Committee on Education and the Workforce discharged the bill on 
September 16, 2003. The House passed the legislation on 
September 17, 2003, by a vote of 408-13.
    Provisions related to H.R. 7 were passed in the Senate as 
part of S. 1786, which was introduced on October 28, 2003, by 
Senator Lamar Alexander. On February 12, 2004, S. 1786 passed 
the Senate, with an amendment, by unanimous consent.
    No further action was taken on either H.R. 7 or S. 1786 in 
the 108th Congress.

                    8. TEMPORARY STATE FISCAL RELIEF

    H.R. 2, introduced as the ``Jobs and Growth Tax Act of 
2003,'' on February 27, 2003, was reported, as amended, from 
the Committee on May 8, 2003, by a vote of 24-15. The 
legislation passed the House on May 9, 2003, by a vote of 222-
203. On May 15, 2003, the Senate amended the bill to include 
items such as temporary State aid and passed it by a vote of 
51-49. Section 401 of the bill amended the Social Security Act 
to provide temporary funding for State fiscal relief in fiscal 
years 2003 and 2004. State and local governments received a 
total of $10 billion in flexible funding assistance, along with 
an estimated $10 billion in enhanced Medicaid funding during 
fiscal years 2003 and 2004. The House and Senate agreed to the 
conference report on H.R. 2 on May 23, 2003, by votes of 231-
200 and 51-50, respectively. The President signed the 
legislation on May 28, 2003 (P.L. 108-27).

                  F. Legislative Review of Debt Issues

    On March 21, 2003, the House approved H. Con. Res. 95 
setting forth the Congressional budget for the United States 
Government for fiscal year 2004, revising the budget for fiscal 
year 2003, and setting forth appropriate budgetary levels for 
each fiscal year 2005 through 2013. The House agreed to the 
Conference Report on H. Con. Res. 95 on April 11, 2003. As a 
result of the adoption of H. Con. Res. 95 by the House and the 
Senate, H.J. Res. 51, a bill to amend Title 31 of the U.S. Code 
to increase the public debt limit, was deemed to pass the House 
pursuant to House Rule XXVII.
    On May 23, 2003, H.J. Res. 51 passed the Senate and the 
President signed the bill into law on May 27, 2003 (P.L. 108-
24). The bill increased the public debt limit from $6.4 
trillion to $7.4 trillion.
    On November 16, 2004, Senator Bill Frist introduced S. 
2986, a bill to amend title 31 of the U.S. Code to increase the 
public debt limit. The bill passed the Senate on November 17, 
2004. The House passed the bill on November 18, 2004, and the 
President signed the bill into law on November 19, 2004 (P.L. 
108-414). The bill increased the public debt limit from $7.4 
trillion to $8.2 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,
                             U.S. House of Representatives,
                                  Washington, DC, January 29, 2003.
Hon. Tom Davis,
Chairman, Committee on Government Reform, 2157 Rayburn House Office 
        Building, Washington, DC.
Hon. Robert W. Ney,
Chairman, Committee on House Administration, 1309 Longworth House 
        Office Building, Washington, DC.
    Dear Chairman Davis 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 108th 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. Tax Reform. The full Committee will hold hearings to 
examine proposals by President Bush to reform Federal taxation.
    3. Medicare Reform. The full Committee will hold hearings 
to examine proposals by President Bush to reform Medicare.

                       SUBCOMMITTEE ON OVERSIGHT

    1. Tax Simplification. In cooperation and coordination with 
the full Committee and the Subcommittee on Select Revenue 
Measures, the Subcommittee will continue its efforts from the 
105th, 106th, and 107th Congresses to examine areas of 
complexity in Federal tax law. Following the recommendations of 
the Joint Committee on Taxation, Chairman Houghton and other 
Members have introduced legislation that would fundamentally 
reform and simplify the Internal Revenue Code. The Treasury 
Department and a variety of groups interested in tax 
administration also have proposed tax simplification measures.
    2. IRS Budget and Filing Season. The Subcommittee will hold 
hearings in both 2003 and 2004 to review the Administration's 
budget request and the tax filing season. The Subcommittee will 
review how the IRS is improving customer service, modernizing 
its computer systems, managing the IRS restructuring, and 
carrying out its tax examination and collection functions.
    3. National Taxpayer Advocate and Free Filing. The 
Subcommittee will hold a hearing to evaluate the legislative 
recommendations of the National Taxpayer Advocate and the 
leading problems faced by taxpayers, as described in the 
Taxpayer Advocate's Annual Report. In addition, the 
Subcommittee will hear testimony from IRS officials concerning 
the IRS Free Filing initiative. Free Filing, a partnership with 
private sector firms, is a model for future business-IRS 
cooperation.
    4. The Appropriate Role of Tax-Preferred Organizations. The 
Subcommittee has received reports of tax-preferred 
organizations that may be operating beyond the scope of their 
charitable status. Tax-exempt groups are required by law to 
engage primarily in activities that meet their charitable or 
stated purpose, and the IRS is charged with reviewing the 
activities of tax-preferred groups. The Oversight Subcommittee 
will review the current law, adequacy of IRS oversight and 
reporting requirements, and suggestions for improvement.
    5. Reporting Requirements of Tax-Exempt Groups. During the 
106th and 107th Congresses, legislation was enacted (P.L. 106-
230, P.L. 107-276) to ensure that Internal Revenue Code Section 
527 political organizations are accountable to the public 
through disclosure requirements, including a database of 
contributions and expenditures that is accessible and 
searchable on the Internet. The Subcommittee will review the 
reporting done by other tax-exempt groups, both to the Internal 
Revenue Service and other agencies, to determine the need for 
similar reporting to ensure appropriate oversight and 
disclosure.
    6. Tax Incentives for Low-Income Individuals and Distressed 
Communities. The Subcommittee will continue its efforts from 
the 107th Congress to review the benefits of and make 
recommendations for improvement to various tax incentives that 
help Americans with minimal or no jobs skills to move into the 
work force and encourage economic development in areas of need, 
including the Work Opportunity Tax Credit, Welfare-to-Work Tax 
Credit, New Markets Tax Credit, and Renewal Communities 
program.
    7. IRS Computer Modernization. The Subcommittee will 
continue to monitor the progress of the IRS in modernizing its 
computer systems. Assuring a successful conclusion to this 
multi-billion dollar upgrade will be the major focus of the 
ongoing review. Success of the business systems modernization 
project is critical to the IRS' ability to provide enhanced 
service to taxpayers.
    8. Improving IRS Administration of Tax Laws. The 
Subcommittee will review proposals to improve the quality and 
efficiency of IRS tax administration, including proposals to 
improve IRS debt collection procedures and enhance Earned 
Income Credit (EIC) compliance. The Subcommittee will review 
the proposed IRS National Research Program as well as the 
overall IRS audit and compliance rates, including a review of 
the appropriate audit rates across income levels and possible 
tax avoidance schemes.
    9. Taxpayer Rights. The Subcommittee will continue to 
monitor the implementation of taxpayer rights provisions in the 
landmark IRS Reform and Restructuring Act (RRA '98) and 
evaluate new proposals to enhance taxpayer rights.
    10. IRS Tax Data Sharing for Government Statistical 
Purposes. The ``Confidential Information Protection and 
Statistical Efficiency Act of 2002,'' Title V of the ``E-
Government Act of 2002'' (P.L.107-347), allows for sharing of 
non-tax business data among certain statistical agencies. In 
order to further improve the quality and quantity of available 
statistical data for government decision makers, the 
Subcommittee will examine whether the Internal Revenue Code 
should be amended to allow Internal Revenue Service tax data to 
be shared with other agencies for statistical purposes.
    11. IRS Individual Taxpayer Identification Numbers. Reports 
have indicated that illegal aliens and third parties are using 
Internal Revenue Service's Individual Tax Identification 
Numbers (ITIN) for non-tax purposes, such as obtaining drivers' 
licenses and opening bank accounts. The Subcommittee will 
review the IRS ITIN program, as well as its efforts to identify 
the fraudulent use of Social Security numbers on tax documents.
    12. Department of the Treasury's Bureau of Tax and Trade. 
``The Homeland Security Act of 2002'' (P.L. 107-296) 
transferred the law enforcement functions of the Treasury 
Department's Bureau of Alcohol, Tobacco, and Firearms (BATF) to 
the Department of Justice. However, the revenue administration 
and revenue enforcement functions of BATF were retained at 
Treasury as the Bureau of Tax and Trade. The Subcommittee will 
review the status of this transition, as well as any new issues 
facing the Bureau of Tax and Trade.
    13. Oversight of Drug Interdiction Efforts. The Oversight 
Subcommittee will hold a hearing to review activities 
undertaken by the Departments of Treasury and Homeland Security 
to address federal drug interdiction efforts using laws 
relating to cash transaction reporting, money laundering, 
foreign tax havens, and national security laws administered by 
the IRS, U.S. Customs Service, and other entities.
    14. 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 Administration an opportunity to 
describe its trade policy since the passage of Trade Promotion 
Authority and respond to Member questions.
    2. Preparations for the 2003 World Trade Organization 
Ministerial. The Subcommittee will hold hearings on United 
States preparations for the 2003 WTO Ministerial in Cancun, 
Mexico (September 2003) and progress in the ongoing 
negotiations on the Doha Development Agenda, particularly with 
respect to agriculture, services, industrial tariffs, and 
development issues.
    3. Bilateral Free Trade Agreements with Singapore and 
Chile. The Subcommittee will continue its oversight of the 
negotiations for bilateral free trade agreements with Singapore 
and with Chile. Now that these negotiations have concluded, the 
Subcommittee will continue to consult with the Administration 
and will hold hearings to on the agreements and will consider 
implementing legislation under TPA processes.
    4. Free Trade Area of the Americas. In preparation for the 
Miami Ministerial meeting scheduled for late 2003, the 
Subcommittee will hold a hearing on the status of negotiations 
to establish a Free Trade Area of the Americas, with a focus on 
market access offers and the role of the United States and 
Brazil as co-chairs of the process until the conclusion of 
negotiations in 2005.
    5. Negotiation of Bilateral Free Trade Agreements. The 
Subcommittee will continue its oversight and hold hearings to 
assess the status of negotiations for free trade agreements 
with countries for which the Administration has notified 
Congress of its intent to negotiate: Morocco; the members of 
the Central American Economic Integration System (Costa Rica, 
El Salvador, Guatemala, Honduras, and Nicaragua); the South 
African Customs Union (Botswana, Lesotho, Namibia, South Africa 
and Swaziland); and Australia. In addition, the Subcommittee 
will explore whether other countries may be appropriate 
candidates for free trade agreements. Finally, the Subcommittee 
will consider the impact of free trade agreements on 
multilateral negotiations.
    6. Relationship between Trade and National Security. On 
several occasions during the 107th Congress, the Administration 
asked the Committee to consider certain trade benefits for 
national security reasons. The Committee intends to continue 
its examination of such issues, including an assessment of the 
national security benefits and the impact on affected U.S. 
industries and workers.
    7. Miscellaneous Duty Suspensions and Technical Corrections 
to U.S. Trade Laws. The House passed legislation in the 107th 
Congress to temporarily suspend duties on a wide range of 
noncontroversial products and to make technical corrections to 
U.S. trade laws. The Senate, however, did not act on this 
legislation. The Subcommittee intends to reconsider this 
legislation and perhaps consider an additional bill later in 
the new Congress.
    8. U.S. Trade Remedy Laws. The Subcommittee will continue 
to review the application of U.S. antidumping, countervailing 
duty, and safeguard laws including the impact of these remedies 
on the injured domestic industries as well as the effect of 
trade remedies on downstream users of products subject to these 
actions. The Subcommittee will hold a hearing on the impact of 
the tariffs imposed by the President on March 20, 2001, as a 
result of a section 201 investigation on certain steel 
products, which is scheduled for a mid-term review in September 
2003. At the hearing, the Committee will seek testimony on the 
impact of the tariffs on steel producers, users, and the U.S. 
economy; the progress of dispute settlement proceedings in the 
World Trade Organization (WTO); and whether the action should 
be reduced, modified, or terminated. The Subcommittee will 
continue to monitor the status of World Trade Organization 
negotiations, consultations, panel proceedings, and decisions 
concerning U.S. trade remedy laws and their application, and 
will work with the Administration to assure compliance with 
U.S. WTO obligations.
    9. Authorizations for the U.S. Customs Service, the Office 
of the United States Trade Representative (USTR), and the U.S. 
International Trade Commission (ITC). The Subcommittee will 
hold hearings on authorizations for the trade agencies for FY 
2004 and 2005 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). In particular, the 
Subcommittee will examine the scope of the authorization for 
Customs given its incorporation into the new Department of 
Homeland Security and will conduct oversight of that 
reorganization and its impact on the collection of revenue and 
trade facilitation.
    In addition, the Subcommittee will follow up on Customs' 
efforts to streamline the entry process and implement the entry 
Revision Project. Also, in light of a GAO study requested by 
Chairman Crane, which found that the Office of Regulations and 
Rulings at the U.S. Customs Service did not issue rulings in a 
timely manner, the Subcommittee will continue its oversight to 
ensure that Customs is making the changes needed to address 
this concern.
    10. 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 also consider reauthorization of the 
fees, which expire on September 30, 2003. 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 appropriate. 
Significant issues to consider will be the entire nature of 
fees for customs operations within a much larger non-trade 
organization of the Department of Homeland Security. The 
Subcommittee will examine a study on user fees undertaken by 
the General Accounting Office and will consider whether Customs 
is implementing requirements of the Trade Act of 2002 to 
provide cost accounting of customs services for which fees are 
collected.
    11. Trade Adjustment Assistance (TAA). The Subcommittee 
will continue its oversight of the general TAA programs for 
workers and firms in light of the substantial revisions made by 
the Trade Act of 2002.
    12. Trade Relations with China. The Subcommittee will 
continue to monitor China's compliance with its WTO obligations 
and will examine the adequacy of U.S. technical assistance 
programs to promote the rule of law in China.
    13. Permanent Normal Trade Relations with Russia and Other 
Jackson-Vanik Countries. The Subcommittee will hold hearings 
and consider legislation on the application of and potential 
graduation from Jackson-Vanik for these countries, particularly 
Russia, at the appropriate time. The Subcommittee will continue 
to monitor the progress of these countries in negotiating their 
accession to the WTO.
    14. Trade and Development Act of 2000. The Subcommittee 
will hold a hearing or request public comment on the Trade and 
Development Act of 2000 (Africa/Caribbean Basin Initiative), 
the enhancement to these programs contained in the Trade Act of 
2002, and the Andean Trade Preferences Act to ensure that the 
legislation is being implemented in a manner consistent with 
Congressional intent. The Committee will also consider whether 
any changes, enhancements, or extensions to these programs are 
appropriate.
    15. Conflict diamonds. During the 107th Congress, the House 
passed legislation prepared and approved by the Committee to 
address trade in so-called ``conflict diamonds'' and 
implementation of the international Kimberly Process 
negotiations. The Senate, however, did not consider the 
legislation. The Committee intends to consider such legislation 
again in light of the additional progress made in the Kimberly 
Process.
    16. Jackson-Vanik Waiver and Extension of Normal Trade 
Relations to the Socialist Republic of Vietnam. The 
Subcommittee's annual review of Vietnam's Jackson- Vanik waiver 
will begin in June with a Presidential determination of that 
country's status for the upcoming year. The effect of the 
President's waiver is to grant conditional normal trade 
relations (NTR) status to products from Vietnam and 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.
    17. Normal Trade Relations with the Lao People's Democratic 
Republic. The Subcommittee will continue its oversight of 
bilateral relations between the United States and Laos. Laos 
does not currently receive normal trade relations (NTR) status 
because it is included in the Harmonized Tariff Schedule (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. 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, but that agreement has not yet entered into force. 
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).
    18. 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 
particular whether any 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.
    19. Rules of Origin and Country of Origin Marking. The 
Subcommittee will continue to review and consult with the 
Administration and the trade community on the status of 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; and review the 
implementation labeling requirements by United States and its 
trading partners with respect to meat, fresh produce, and 
genetically modified products.
    20. 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.
    21. Asia Pacific Economic Cooperation 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.

                         SUBCOMMITTEE ON HEALTH

    1. Regulatory and Contracting Reform. The Subcommittee will 
hold a hearing to evaluate the management of the Centers for 
Medicare and Medicaid Services (CMS) oversight over the 
Medicare program and to explore changes that could be made to 
improve its efficiency and its interactions with beneficiaries 
and the providers that serve them.
    2. MedPAC Report and Recommendations. The Subcommittee will 
hold a hearing on the Medicare Payment Advisory Commission's 
(MedPAC) 2003 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's Cost-sharing and Supplemental Coverage. The 
Subcommittee will hold a hearing to explore Medicare's cost-
sharing structure and the adequacy and supplemental Medigap 
coverage which fills in gaps in coverage.
    4. Prescription Drug Coverage. The Subcommittee will hold a 
hearing on the need for an out-patient prescription drug 
benefit. The hearing will examine benefit design 
considerations.
    5. Health Care Quality. The Subcommittee will hold a 
hearing to examine health care quality issues. In particular 
the Subcommittee will examine ideas to reduce medical errors. 
The Committee will also examine new ways to deliver care, such 
as disease management programs.
    6. Medicare Waste, Fraud and Abuse. The Subcommittee will 
examine enforcement of laws to combat waste, fraud and abuse in 
the Medicare program and what steps might be taken to improve 
their application.
    7. Medically Uninsured. The Subcommittee will hold a 
hearing on options to reduce the number of individuals and 
families without health insurance. That hearing will include an 
examination of tax credits.
    8. Graduate Medical Education. The Subcommittee will 
examine how Medicare pays teaching hospitals to train and 
educate physicians and explore options for reform.
    9. Medicare Modernization. Examine proposals to make 
Medicare more efficient and responsive.
    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 continue working 
to reauthorize the Temporary Assistance for Needy Families 
(TANF) and related programs created and amended under the 1996 
welfare reform law. The Subcommittee also will conduct 
oversight hearings on TANF and related programs. Issues of 
particular interest to the Subcommittee are the impact of 
welfare reform on children and families and the use of welfare 
funds to strengthen families and promote healthy marriage, as 
well as efforts to support increased work by welfare 
recipients, further reduce poverty, and improve child well-
being.
    2. Child Care. Child care funding has increased 
substantially since enactment of the 1996 welfare reform law. 
The Subcommittee will examine State use of mandatory and 
matching grant portions of the Child Care and Development Block 
Grant, as well as other funding sources used to support child 
care needs, including the TANF and Social Service Block Grants.
    3. Child Support Enforcement. Child support payments have 
become increasingly important to low-income families as they 
leave and stay off welfare and begin moving up the economic 
ladder. The Subcommittee will hold hearings to review changes 
to the program made in 1996 and subsequent reform laws, as well 
as proposals for further system improvement.
    4. Supplemental Security Income (SSI). For the past several 
years the SSI program has been on the General Accounting 
Office's list of programs at high risk of waste, fraud, and 
abuse. The Subcommittee will review various proposals to reduce 
this risk and improve the program. The Subcommittee also will 
continue oversight of changes made to the SSI program in the 
1996 welfare reform law and subsequent laws.
    5. Child Protection. In preparation for reauthorization of 
the Adoption Incentive Payments program, which provides bonuses 
to States for increasing the number of adoptions of children 
from foster care over the previous year's level, oversight 
hearings will review both the program and improvement 
proposals. In addition, the Subcommittee will conduct oversight 
hearings on the broader operation of the Nation's child welfare 
system, including under the Safe and Stable Families program 
and other program changes made through the Adoption and Safe 
Families Act of 1997.
    6. Unemployment Compensation. The Subcommittee will conduct 
hearings on the Nation's unemployment compensation system. 
Several issues, including improving the program to better 
promote work and savings, reducing extended unemployment and 
assessing the benefits, costs and consequences of providing 
extended benefits, improving program integrity, and increasing 
State flexibility in designing and administering benefits and 
assisting in returns to work, will be examined in these 
hearings.

                    SUBCOMMITTEE ON SOCIAL SECURITY

    1. Social Security's financial challenges. The Subcommittee 
will hold hearings to examine various issues affecting the well 
being of individual recipients, the financial challenges facing 
Social Security programs, and options to address those 
challenges. In addition, the Subcommittee will examine work 
incentives and tax burdens for seniors, impacts of global 
aging, and Social Security coverage issues.
    2. Use of the Social Security Number (SSN). The 
Subcommittee will continue its examination of the use of the 
SSN as an identifier and the degree to which such use 
contributes to identity theft and Social Security program 
fraud. The integrity of the SSN enumeration process and the 
crediting of workers' wages will also be examined. The 
Subcommittee will also review legislative options to enhance 
SSN privacy in both the public and private sectors.
    3. Disability program improvements and oversight. The 
Subcommittee will continue to examine service delivery provided 
by the Social Security Disability Insurance program, including 
the Social Security Administration's (SSA's) implementation of 
the Ticket to Work and Work Incentives Improvement Act as well 
as SSA's disability program management and efforts to improve 
workload processing at both the initial application and appeals 
levels. The Subcommittee will continue to review the degree to 
which Social Security disability programs address the 
challenges faced today by those whose disabilities prevent them 
from working.
    4. Stewardship of the Social Security programs. The 
Subcommittee will conduct oversight hearings to examine the 
management of the Social Security programs, assess their 
potential vulnerability to fraud, and to explore legislative 
remedies.
    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.
    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.
            Best regards,
                                             Bill Thomas, Chairman.

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


Full Committee

    1. Rules, Regulations, Statutes and Court Decisions.
    Actions taken: On an ongoing basis, the Committee reviewed 
specific problems within the Committee's jurisdiction, of 
Federal rules, regulations, statutes and court decisions that 
impose a severe financial burden on individuals. The Committee 
held a hearing on July 17, 2003, to investigate waste, fraud, 
and abuse of taxpayer monies within the Social Security and 
Medicare programs. The Committee has also taken legislative 
action on a number of measures to modernize these Federal 
Government programs to ensure that they provide the best 
service to taxpayers. The findings of the Committee were 
submitted to the Committee on the Budget in accordance with the 
H. Con. Res. 95, the Concurrent Resolution of the Budget for 
Fiscal Year 2004.
    In addition, the Committee continued its work with the 
Joint Committee on Taxation (JCT) to review and improve 
methodologies for estimating the impact of tax policy changes 
on tax receipts and the overall economy. As a result of a 
change in the House Rules in the 108th Congress, the JCT 
provided a detailed analysis of the macroeconomic impact of the 
Jobs and Growth Tax Relief Reconciliation Act of 2003 (P.L. 
108-27) in the Committee Report (Report No. 108-94).
    2. Tax Reform.
    Actions taken: The Committee held hearings on various tax 
reforms suggested in the President's FY 2004 and FY 2005 
budgets during the 108th Congress. Hearings to receive 
testimony from Administration officials and private sector 
witnesses on the FY 2004 budget were held in February and March 
of 2003, while hearings to receive testimony from 
Administration witnesses on the FY 2005 budget were held in 
February 2004. As a result of information received during these 
hearings, tax legislation reflecting proposals for individual 
and business reforms were included in a series of bills during 
the 108th Congress. Proposals for individual and family tax 
relief were included in both the Jobs and Growth Tax Relief 
Reconciliation Act of 2003 (P.L. 108-27) and in the Working 
Families Tax Relief Act of 2004 (P. L. 108-311). In addition, 
other tax relief proposals developed by the Committee on the 
basis of budget proposals were enacted as part of the American 
Jobs Creation Act of 2004 (P.L. 108-357) or included in other 
proposals considered by the House of Representatives, including 
the conference report on energy legislation (H.R. 6) and H.R. 
7, the ``CARE Act.''
    3. Medicare Reform.
    Actions taken: The full Committee held hearings on 
prescription drugs and reform in Medicare on February 10, 2003, 
when it heard testimony on the President's FY 2004 Budget with 
the U.S. Department of Health and Human Services, and on April 
9, 2003, when it heard testimony on expanding prescription drug 
coverage under Medicare. Testimony taken at these hearings 
helped form the basis of legislation considered by the 
Committee.
    H.R. 2473, the ``Medicare Prescription Drug and 
Modernization Act,'' was introduced June 16, 2003, and was 
reported out of the Committee on Ways and Means on June 17, 
2003, by a vote of 25-15. On June 27, 2003, the House passed 
H.R. 1, the ``Medicare Prescription Drug, Improvement, and 
Modernization Act,'' (MMA) which included provisions of H.R. 
2473, by a vote of 216-215. The Senate passed similar 
legislation on June 27, 2003, by a vote of 76-21. The bills 
were conferenced, reported favorably, and the House passed the 
Conference Report on November 22, 2003, by a vote of 220-215. 
The Senate also passed the Conference Report by a vote of 54-44 
on November 25, 2003, and the legislation was signed into law 
December 8, 2003 (P.L. 108-173).
    The law reforms the Medicare program by adding a new 
prescription drug benefit; instituting reforms that will reduce 
the prices of prescription drugs; reforming the Medicare 
Advantage program by increasing competition among plans and 
introducing a new regional preferred provider organization 
(PPO) option; instituting cost containment measures to ensure 
the long-term solvency of the program; reducing fraud and abuse 
in the program, including reforms to the Medicare Secondary 
Payer system, payments for drugs covered under Part B of the 
program and payments for durable medical equipment, thereby 
ensuring adequate reimbursement for services while reducing 
beneficiary cost sharing; instituting a new chronic care 
improvement program to better manage the care of beneficiaries 
with multiple chronic diseases; requiring hospitals to report 
on quality measures; reforming Medicare supplementary 
insurance; and providing for reform of the administrative and 
contracting functions of the program.

Subcommittee on Oversight

            A. Subcommittee Hearings for 108th Congress
    1. National Taxpayer Advocate Report and Free Filing.
    Actions taken: The Subcommittee held a hearing on February 
13, 2003, on Free Electronic Filing and the National Taxpayer 
Advocate's 2002 Annual Report. The hearing evaluated the 
legislative recommendations of the National Taxpayer Advocate 
and the leading problems faced by taxpayers, as described in 
the Annual Report. In addition, the Subcommittee heard 
testimony from Internal Revenue Service (IRS) officials 
concerning the IRS Free Filing initiative. Free Filing, a 
partnership with private sector consortium of electronic tax 
preparers is designed to allow up to 60 percent of taxpayers to 
file online for free.
    2. Private Collection Agencies.
    Actions taken: The Subcommittee held a hearing on May 13, 
2003, on the Administration's proposal to use private 
collection agencies (PCAs) to support the IRS debt collection 
efforts. Each year, the IRS collects over $2 trillion in tax 
revenue from all sources. A small percentage of this amount is 
assessed, but not collected. Over the past decade, the total 
inventory of unpaid tax assessments has more than doubled from 
$130 billion in 1992 to over $280 billion in March of 2003. The 
IRS estimates that about $78 billion is collectible. The IRS 
issued a Request for Information that appeared in the Federal 
Register in January of 2002, on how PCAs could assist the IRS 
with its collection efforts, while preserving important 
taxpayer protections in existing law. Using this information, 
the Administration developed a proposal that appeared in the 
fiscal year 2004 budget request for the IRS. Chairman Houghton 
introduced legislation, H.R. 1169, which would implement the 
Administration's proposal. Later, a modified version of the 
proposal was enacted into law as part of H.R. 4520, the 
``American Jobs Creation Act'' (P.L. 108-357).
    3. IRS Fiscal Year 2004 Budget/2002-2003 Tax Return Filing 
Season.
    Actions taken: The Subcommittee held a hearing on April 8, 
2003, to evaluate the President's 2004 Budget proposal for the 
IRS and the 2003 filing season. The hearing reviewed the IRS 
reorganization, the modernization of IRS computer systems, and 
the re-alignment of the IRS's mission towards customer service. 
A major aspect of the hearing was the Free Filing Initiative 
that was proposed as part of President Bush's FY 2003 budget. 
The IRS total budget request for FY 2004 was $10.4 billion. The 
IRS Oversight Board has requested a slightly higher budget for 
the IRS. In the end, Congress approved $10.26 billion in IRS 
funding.
    4. Review of the Non-Profit Credit Counseling 
Organizations.
    Actions taken: The Subcommittee held a hearing on November 
20, 2003, on the status of the non-profit credit counseling 
industry. The hearing explored the potential abuse by tax-
exempt credit counseling organizations. In recent years, some 
consumer credit counseling organizations have moved away from 
providing counseling and educational services. Instead, these 
groups have focused on enrolling consumers in Debt Management 
Plans (DMPs), for which they receive fees. Credit counseling 
groups have become more aggressive in marketing DMPs to 
individuals, through telemarketing, Internet solicitations, and 
television commercials. At the hearing, the Subcommittee heard 
from the IRS and the Federal Trade Commission (FTC) about the 
consumer alert they issued on October 14, 2003, to remind 
consumers to be careful when seeking assistance from tax-exempt 
credit counseling organizations. The IRS indicated that it has 
increased its enforcement efforts, including the number of 
examinations, and is giving more scrutiny to credit counseling 
applications before granting tax-exempt status.
    On November 21, 2003, Oversight Subcommittee Chairman 
Houghton wrote to the IRS and FTC to request that they report 
back to Subcommittee in six months with the results of their 
increased compliance efforts. The FTC reported back to the 
Subcommittee that they increased efforts to protect consumers 
from credit counseling abuses through litigation and education. 
The FTC continued a lawsuit against AmeriDebt, one of the 
country's largest credit counseling organizations, its former 
service provider, and its owner. The FTC filed an emergency 
petition to intervene in a nationwide class action suit against 
AmeriDebt aimed at compensating AmeriDebt victims.
    The IRS reported back to the Subcommittee that the first 
proposed revocation of the tax-exempt status of a credit 
counseling organization had taken place and that more are 
expected to follow. IRS audit resources have been refocused and 
more than 50 tax-exempt credit counseling organizations have 
been identified for examination. The examinations will include 
some of the largest credit counseling firms and more than 50 
percent of the total revenue filed by credit counseling 
organizations will be under active examination. To better track 
and monitor these organizations, the IRS has revised the annual 
reporting Form 990 and added questions to the tax-exempt 
application Form 1023 to more easily evaluate credit counseling 
organizations.
    5. IRS Computer Modernization.
    Actions taken: Subcommittee held a hearing on November 4, 
2003, to evaluate the IRS efforts to modernize its computer 
systems and hear the outcome of recent independent reviews of 
the IRS Business Systems Modernization (BSM) program requested 
by IRS Commissioner Mark Everson. Following the hearing the IRS 
scaled back the scope of the BSM program and made management 
changes to increase the success of continuing projects. During 
2004, the IRS rolled out the first release of the Customer 
Account DATA Engine (CADE).
    6. Unemployment Fraud and Abuse.
    Actions taken: On June 19, 2003, the Subcommittee on 
Oversight, and the Subcommittee on Human Resources held a joint 
hearing to review the problem of State Unemployment Tax Act 
(SUTA) dumping or ``SUTA dumping.'' SUTA dumping has been used 
to undermine the Nation's unemployment compensation (UC) 
system. Companies engage in SUTA dumping by establishing shell 
companies to evade accountability for laid off employees. SUTA 
dumping results in lost contributions to State UC funds. Unless 
each employer pays its fair share, States can be shortchanged 
millions of dollars in tax payments and tax rates may increase 
for all employers. SUTA dumping undermines a fundamental 
premise of UC system since its inception in the 1930s, that 
employer taxes should be experience rated. On November 6, 2003, 
Human Resources Subcommittee Chairman Herger introduced H.R. 
3463 the ``SUTA Dumping Prevention Act of 2003'' to help stop 
abusive SUTA dumping practices. On July 14, 2004, the House 
passed the bill, and the Senate passed the bill with an 
amendment on July 27, 2004. The bill was signed by the 
President on August 9, 2004. (P.L. 108-295).
    7. Implementation of the IRS Restructuring and Reform.
    Actions taken: The Internal Revenue Service Restructuring 
and Reform Act of 1998 required the Chairman of the Joint 
Committee on Taxation to convene a joint review of the 
strategic plans and budget of the IRS each year until 2003. On 
May 20, 2003, the Subcommittee helped to convene the Joint 
Review that was convened in the Committee's hearing room. The 
Joint Review focused on the long-term objectives and strategic 
plans of the IRS, the steps the IRS has taken and will take to 
achieve those objectives and plans, and the extent to which the 
Administration's budget supports those objectives and plans. 
The Joint Review was extended for one year by the Families Tax 
Relief Act (P.L. 108-311).
    8. Social Security Number and Individual Taxpayer 
Identification Number Mismatches and Misuse.
    Actions taken: On March 10, 2004, the Oversight 
Subcommittee and Social Security Subcommittee held a hearing to 
review taxpayer identification numbers used for Federal tax 
purposes: Social Security numbers (SSNs) assigned by the SSA, 
and Individual Taxpayer Identification Numbers (ITINs) issued 
by the IRS. Neither number was originally created to serve as a 
form of identification but they have been used for that purpose 
by both governmentagencies and the private sector. As a result, 
many have called the SSN a de facto national identifier. Likewise, use 
of ITINs as an identifier for those who cannot legally obtain a SSN has 
rapidly increased during its short period of existence. To date, the 
IRS has issued more than 7.3 million ITINs.
    The Subcommittees will continue to review how ITINs are 
being used for non-tax purposes. This includes exploring the 
vulnerabilities of the ITIN as a breeder document for identity 
fraud and terrorism. Reports have indicated that illegal aliens 
and third parties are using ITIN for non-tax purposes, such as 
obtaining drivers' licenses and opening bank accounts. The 
Subcommittee will review the IRS ITIN program, as well as its 
efforts to identify the fraudulent use of SSNs on tax 
documents.
    9. 2004 Tax Return Filing Season and the IRS Budget for 
Fiscal Year 2005.
    Actions taken: The Subcommittee held a hearing on March 30, 
2003, to review the 2004 tax return filing season and the IRS 
budget for fiscal year 2005. American taxpayers filed more than 
130 million returns between the filing season dates, January 
1st to April 15th, including more than 50 million e-filed 
returns.
    The Administration's budget requested $10.67 billion to 
fund the IRS for fiscal year 2005. Congress and the President 
ultimately approved $10.2 billion in the Omnibus Appropriations 
Bill (P.L. 108-447). This level of funding will support over 
100,000 employees who will collect an estimated $1.7 trillion 
in taxes (net of funds), according to Administration estimates.
    10. Tax Simplification.
    Actions taken: The Subcommittee held a hearing on June 15, 
2004, to review legislative proposals to simplify the Internal 
Revenue Code (IRC). On April 2, 2004, Chairman Houghton 
introduced a package of ten simplification bills to relieve the 
burden on individual and small business taxpayers in a revenue 
neutral manner. Committee Member, Representative Rob Portman 
(R-OH) earlier introduced a comprehensive tax simplification 
bill in the 107th Congress, the ``Tax Simplification Act of 
2002'' (H.R. 5166).
    The Houghton simplification package includes bills that 
would repeal the Alternative Minimum Tax (AMT), reducing the 
number of AMT taxpayers by 114 million, and saving 
approximately 463 million hours of tax return preparation time; 
establish a uniform definition of a child that is based on 
residence, relationship, and age; and change the term ``Head of 
Household'' filing status, a term that is less likely to cause 
a mistake in choosing a filing status. Other Houghton proposals 
that would simplify the tax laws include: the ``Taxation of 
Minor Children Simplification Act'' (H.R. 4135), the 
``Education Tax Credit Simplification Act'' (H.R. 4136), the 
``Small Business Tax Modernization Act'' (H.R. 4137), the 
``Personal Holding Company Tax Repeal Act'' (H.R. 4138), and 
the ``State Business Law Tax Conformity Act'' (H.R. 4139). With 
the exception of AMT repeal, all of the foregoing proposals are 
low-cost or revenue-neutral. Chairman Houghton also introduced 
a House resolution to require all future tax bills to contain a 
simplification title.
    11. First Hearing in a Series on Tax Exemption: Pricing 
Practices of Hospitals.
    Actions taken: The Subcommittee held a hearing on June 22, 
2004, to review the pricing practices of tax-exempt hospitals. 
Although hospitals represented a small proportion (1.9 percent) 
of total reporting charitable 501(c)(3)s, in 2001, they 
constituted 41 percent ($337 billion) of total expenditures. 
Due to the lack of transparency, the uninsured are liable for 
charges which are inflated. This pricing policy combined with 
the subsidy from their tax-exempt status raises questions. To 
increase revenue from private payers and Medicare, hospitals 
argue that the higher pricing is needed to cover the costs of 
indigent medical care. But taxpayers subsidize the $22 billion 
in costs of the indigent through $23 billion a year in special 
Medicare Part A payments and other government subsidies.
    12. IRS Enforcement of the Reporting of Tip Income.
    Actions taken: The Subcommittee held a hearing on June 15, 
2004, to review IRS tip income reporting programs. Over the 
last decade there has been significant growth in the service 
industry. In 1994, tip wages reported to the IRS totaled $8.52 
billion, and in 2003, this number grew to just over $18 
billion. Despite the increase in reported income, the IRS 
estimates that unreported tip income may exceed $9 billion 
annually. The IRS first addressed the issue of compliance with 
its creation of the Tip Reporting Determination/Education 
Program (TRD/EP) in 1993. The TRD/EP was designed to educate 
employers and employees in the service industry about tip 
reporting laws in order to increase compliance. The 
Subcommittee evaluated the effectiveness of the programs and 
will continue to work with IRS in order to increase efficiency.
    Legislation was introduced in the 108th Congress to address 
some of the problems surrounding audits and the IRS aggregate 
estimation method Representative Herger introduced the ``Tip 
Tax Fairness Act of 2003'' (H.R. 2034), which would require an 
accurate evaluation of unreported tips by the IRS. In addition, 
the bill would bar the IRS from conducting employer-only 
aggregate assessments for the purpose of determining Federal 
Insurance Contribution Act (FICA) taxes on underreported tip 
income. Representative Nancy L. Johnson introduced H.R. 2133, 
the ``Cosmetology Tax Fairness and Compliance Act of 2003,'' 
which would extend to the cosmetology industry the income tax 
credit for Social Security taxes paid on employee cash tips 
that meet Federal minimum wage requirements.

Subcommittee on Trade

    1. Bush Administration Trade Policy.
    Actions taken: On February 26, 2003, the Committee held a 
hearing on President Bush's trade agenda for 2003. The sole 
witness was United States Trade Representative Robert Zoellick. 
The hearing examined current trade issues such as: (1) 
implementation, under Trade Promotion Authority (TPA) 
procedures, of the Chile and Singapore free trade agreements 
(FTAs); (2) other free trade agreements, including those 
notified by the President (Morocco, the Central American 
countries, Australia, and the Southern African Customs Union) 
and the Free Trade Area of the Americas; (3) prospects for 
trade expansion in agriculture, industrial goods, and services 
through multilateral negotiations in the World Trade 
Organization (WTO); (4) compliance with WTO dispute settlement 
decisions; (5) status of Russia and other former Soviet 
Republics under the Jackson-Vanik amendment; (6) other 
bilateral trade issues; and (7) legislation to implement U.S. 
obligations in the Kimberley Process (concerning rough 
diamonds) in a WTO-consistent manner.
    On March 11, 2004, the Committee held a hearing on 
President Bush's trade agenda for 2004. The sole witness was 
United States Trade Representative Robert Zoellick. The hearing 
examined current trade issues, including: (1) the recently 
concluded FTAs with Australia, the Central American countries, 
and Morocco; (2) other free trade agreements currently being 
negotiated or which have been notified by the President; (3) 
prospect for trade expansion in agriculture, industrial goods, 
and services through multilateral negotiations in the WTO; (4) 
compliance with WTO dispute settlement decisions; (5) potential 
extension and enhancement of AGOA; and (6) other trade issues.
    Throughout the duration of the 108th Congress, USTR and the 
Committee consulted on trade policy issues.
    2. Preparations for the 2003 World Trade Organization 
Ministerial.
    Actions taken: On September 10-13, 2003, Chairman Thomas 
led a bipartisan delegation of Members of Congress to Cancun to 
monitor the WTO's Cancun Ministerial Conference, consult with 
U.S. trade officials during the negotiations, and discuss trade 
issues with foreign delegates and WTO officials. Members met 
with delegations from Australia, New Zealand, the European 
Union, Ecuador, Africa, and Brazil. An important objective of 
the meetings was to highlight the importance that Members of 
Congress place on trade and especially on the need for trade 
liberalization in the agricultural sector.
    On February 17-21, 2003, a bipartisan delegation of staff 
from the Committee on Ways and Means and the Senate Committee 
on Finance participated in an oversight trip to the WTO 
headquarters in Geneva, Switzerland. The delegation met with 
foreign representatives to the WTO from various countries 
including China, Chile, Australia, Lesotho, Mexico, New 
Zealand, India, and Singapore, and with various WTO officials. 
The staff delegation discussed matters related to the September 
WTO Ministerial scheduled for Cancun and the trade positions of 
various countries in the negotiations in the Doha Round.
    On April 22, 2003, the Committee requested that the GAO 
study the WTO negotiations. On July 30, 2003, the Committee 
received from GAO the report entitled ``World Trade 
Organization: Standard of Review and Impact of Trade Remedy 
Rulings'' (GAO-03-824).
    In January 2004, the GAO issued a report entitled ``World 
Trade Organization: Cancun Ministerial Fails to Move Global 
Trade Negotiations Forward; Next Steps Uncertain (GAO-04-250). 
The report highlighted the many factors leading to the impasse 
at Cancun in September 2003. Following up on this report, GAO 
continued to monitor negotiations at the WTO and brief the 
Committee on the progress in reaching a framework for future 
negotiations. GAO will provide an interim status report in May 
2005.
    Concurrent with the final work by WTO members on a 
framework agreement for future WTO negotiations, Chairman 
Thomas wrote Ambassador Zoellick on July 26, 2004, urging that 
the United States oppose efforts to single out and reach an 
early agreement to reduce cotton supports. Ambassador Zoellick 
replied on September 7, 2004, confirming that cotton supports 
would be negotiated in the WTO only as part of a broader 
discussion to reduce all domestic supports of agricultural 
products.
    Throughout the 108th Congress, USTR consulted frequently 
with the Committee and the Congressional Oversight Group (COG) 
about the negotiations and U.S. positions.
    3. Bilateral Free Trade Agreements with Singapore and 
Chile.
    Actions taken: As part of its oversight of bilateral trade 
agreement negotiations, USTR consulted frequently with the 
Committee on the conduct of the Chile and Singapore 
negotiations and the U.S. negotiating position. On June 10, 
2003, the Committee held a hearing on the implementation of the 
United States bilateral free trade agreements with Chile and 
Singapore. On July 10, 2003, the Committee informally approved 
draft legislation to implement the Chile and Singapore 
agreements, by voice vote, without amendment. The Committee 
conducted this informal markup in order to provide advice to 
the Administration on the implementing bills and Statements of 
Administrative Action. On July 17, 2003, the Committee formally 
approved H.R. 2738 and H.R. 2739, legislation to implement 
these agreements, under the procedures of the Bipartisan Trade 
Promotion Authority Act of 2002. On July 24, 2003, the House 
passed both bills, and the Senate followed suit on July 31. The 
President signed the bills into law on August 3, 2003 (P.L. 
108-77 and 108-78).
    4. Free Trade Area of the Americas.
    Actions taken: USTR consulted frequently with the Committee 
and the COG about the negotiations and the U.S. position. In 
addition, on November 18-21, 2003, a bipartisan delegation of 
staff from the House Committees on Ways and Means and 
Agriculture and the Senate Committee on Finance traveled to 
Miami to monitor and consult with U.S. trade officials during 
the 8th Ministerial meetings for the Free Trade Area of the 
Americas negotiations and to discuss trade issues with foreign 
delegates. Staff met with delegations from Brazil, Colombia, 
Peru, and Panama. An important objective of the meetings was to 
highlight the importance that Members of Congress place on a 
comprehensive and ambitious FTAA.
    On March 17, 2003, the Committee requested that GAO review 
the status of the FTAA negotiations. On April 11, 2003, the 
Committee received from GAO the report entitled ``Free Trade 
Area of the Americas: Negotiations Progress, but Successful 
Ministerial Hinges on Intensified U.S. Preparations'' (GAO-03-
560). On May 13, 2003, the Committee received testimony from 
the GAO entitled ``Free Trade Area of the Americas: United 
States Faces Challenges as Co-Chair of Final Negotiating Phase 
and Host of November 2003 Ministerial'' (GAO-03-700T). The GAO 
continues to monitor the status of FTAA negotiations, and a new 
GAO report on the FTAA is expected in January 2005.
    5. Negotiation of Bilateral Free Trade Agreements.
    Actions taken: On November 13, 2002, U.S. Trade 
Representative Robert Zoellick formally notified Congress of 
the President's intent to launch negotiations with Australia 
for afree trade agreement. Negotiations began in March 2003 and 
concluded in February 2004. The Committee consulted heavily with USTR 
throughout the negotiations on the status of the talks and on the U.S. 
negotiating position. On November 4, 2003, Chairman Thomas and Senate 
Finance Committee Chairman Grassley sent a joint letter to President 
Bush expressing their concern regarding the Administration's plans to 
exclude investment agreements from access to investor-state arbitration 
in the FTA. Both Chairmen emphasized their support for including strong 
investor protections in all FTAs, including access to investor-state 
arbitration. On January 28, 2004, Chairman Thomas sent a letter to 
President Bush iterating his expectation that all FTAs put before the 
Congress for consideration should be comprehensive and liberalize 
completely all sectors and products. Chairman Thomas noted that 
exclusions in FTAs could jeopardize the United States' ability to 
conclude and implement agreements because allowing an exception for one 
industry creates enormous pressure to do the same for other industries. 
The United States-Australia FTA was signed on May 18, 2004. On June 16, 
2004, the Committee held a hearing on implementation of the FTA. On 
June 23, 2004, the Committee informally approved draft legislation to 
implement the FTA, by voice vote, without amendment. The Committee 
conducted this informal markup in order to provide advice to the 
Administration on the implementing bill and Statement of Administrative 
Action. On July 6, 2004, Majority Leader DeLay introduced (by request) 
H.R. 4759, the ``United States-Australia Free Trade Agreement 
Implementation Act.'' On July 8, 2004, the Committee held a formal 
mark-up session to consider H.R. 4759. The Committee approved the bill 
and favorably reported H.R. 4759, by voice vote, without amendment. On 
July 14, 2004, the House passed the bill by a recorded vote of 314-109, 
1 present. On July 15, 2004, the Senate passed H.R. 4759 without 
amendment by a recorded vote of 80-16. The President signed the bill 
into law on August 3, 2004 (P.L. 108-286).
    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). On December 17, 2003, USTR 
announced completion of an agreement with El Salvador, 
Guatemala, Honduras, and Nicaragua. During the negotiations, 
USTR consulted frequently with the Committee and the COG about 
the negotiations and the U.S. position. On January 25, 2004, 
USTR announced completion of an agreement with Costa Rica. On 
May 28, 2004, the agreement was signed.
    On August 4, 2003, Ambassador Zoellick notified Congress of 
his intention to initiate free trade agreement negotiations 
with the Dominican Republic and to integrate the agreement with 
the Dominican Republic into the agreement the United States is 
negotiating with Central America. USTR planned to present the 
Congress one free trade agreement covering both the Dominican 
Republic and Central America. The negotiations began in January 
2004. The USTR consulted frequently with the Committee and the 
COG about the negotiations and the U.S. position. On March 15, 
2004, USTR announced completion of negotiations to integrate 
the Dominican Republic into the CAFTA. On August 5, 2004, an 
agreement integrating the Dominican Republic into the CAFTA was 
signed by the five Central American nations of Costa Rica, El 
Salvador, Guatemala, Honduras, and Nicaragua, the Dominican 
Republic, and the United States. In October 2004, the Dominican 
Republic passed legislation that imposed a 25 percent tax on 
beverages made with high fructose corn syrup. On November 16, 
2004, Ambassador Zoellick notified the Senate Finance Committee 
and the House Ways and Means Committee that he was taking steps 
to take Congressional action on the CAFTA without the Dominican 
Republic, if necessary, including preparing a text that 
excludes the Dominican Republic and requesting that the 
International Trade Commission assess the likely economic 
impact of the CAFTA.
    On October 1, 2002, Ambassador Zoellick notified the 
Congress of his intention to initiate free trade agreement 
negotiations with Morocco. These negotiations began in January 
2003, and were concluded in March, 2004. USTR consulted 
frequently with the Committee and the COG about the 
negotiations and the U.S. position.
    On July 7, 2004, the Committee held a hearing on 
implementation of the United States bilateral free trade 
agreement with Morocco. The Morocco FTA was the fourth trade 
agreement considered by the Congress under the procedures 
outlined in TPA. Witnesses at the hearing included Deputy 
United States Trade Representative Peter Allgeier and 
representatives from the business community and non-
governmental organizations. The hearing focused on 
Congressional consideration of the Morocco FTA and the benefits 
that the agreement brings to American businesses, farmers, 
workers, and the U.S. economy.
    On July 14, 2004, the Committee informally approved draft 
legislation to implement the United States-Morocco Free Trade 
Agreement, by a roll call vote of 23-1, with one Member voting 
present, without amendment. The Committee conducted this 
informal markup in order to provide advice to the 
Administration on the implementing bill and Statement of 
Administrative Action. On July 15, 2004, Majority Leader DeLay 
introduced (by request) H.R. 4842, the ``United States-Morocco 
Free Trade Agreement Implementation Act.'' On July 20, 2004, 
the Committee held a formal mark-up session to consider H.R. 
4842. The Committee approved the bill and favorably reported 
H.R. 4842, without amendment, by a recorded vote of 26-0. On 
July 22, 2004, the House passed the bill by a recorded vote of 
323-99. On July 22, 2004, the Senate passed H.R. 4842, without 
amendment, by unanimous consent. The President signed the bill 
into law on August 17, 2004 (P.L. 108-302).
    Pursuant to Sense of Congress language in the Africa Growth 
and Opportunities Act of 2000, Ambassador Zoellick notified 
Congress on November 4, 2002, of his intent to enter into free 
trade agreement negotiations with the Southern African Customs 
Union (SACU) countries (South Africa, Lesotho, Swaziland, 
Botswana, and Namibia). Negotiations between the United States 
and the SACU countries were launched on June 2, 2003, in 
Pretoria, South Africa. USTR consulted frequently with the 
Committee and the COG about the negotiations and the U.S. 
position.
    On November 18, 2003, U.S. Trade Representative Robert 
Zoellick formally notified Congress of the President's intent 
to initiate negotiations for a free trade agreement with 
Bolivia, Colombia, Ecuador, and Peru. FTA negotiations began in 
May 2004 with Colombia, Ecuador, and Peru. USTR has consulted 
and continues to consult frequently with the Committee and the 
COG on the status of the negotiations and on the U.S. 
negotiating position. Bolivia is an observer in the FTA 
negotiations, and USTR continues to consult with the Committee 
on Bolivia's readiness to commence FTA negotiations with the 
United States.
    On February 12, 2004, Ambassador Zoellick formally notified 
Congress of the President's intent to negotiate an FTA with 
Thailand. The first round of negotiations was held in June 
2004. USTR has consulted and continues to consult frequently 
with the Committee and the COG on the status of the 
negotiations and on the U.S. negotiating position.
    On August 4, 2003, Ambassador Zoellick notified Congress of 
his intention to initiate free trade agreement negotiations 
with Bahrain. USTR consulted frequently with the Committee and 
the COG about the negotiations and the U.S. position. 
Negotiations were launched on January 26, 2004 and concluded on 
May 27, 2004. The agreement was signed on September 14, 2004.
    On July 22, 2004, the National Commission on Terrorist 
Attacks Upon the United States (the ``9-11 Commission''), an 
independent, bipartisan commission created by legislation 
released its report. The Commission mentioned the free trade 
agreement with Bahrain as a potential part of a comprehensive 
strategy to counter terrorism, stating:

          The U.S. government has announced the goal of working 
        toward a Middle East Free Trade Area, or MEFTA, by 
        2013. The United States has been seeking comprehensive 
        free trade agreements (FTAs) with the Middle Eastern 
        nations most firmly on the path to reform. The U.S.-
        Israeli FTA was enacted in 1985, and Congress 
        implemented an FTA with Jordan in 2001. Both agreements 
        have expanded trade and investment, thereby supporting 
        domestic economic reform. In 2004, new FTAs were signed 
        with Morocco and Bahrain, and are awaiting 
        congressional approval. These models are drawing the 
        interest of their neighbors. Muslim countries can 
        become full participants in the rules-based global 
        trading system, as the United States considers lowering 
        its trade barriers with the poorest Arab nations. 
        Recommendation: A comprehensive U.S. strategy to 
        counter terrorism should include economic policies that 
        encourage development, more open societies, and 
        opportunities for people to improve the lives of their 
        families and to enhance prospects for their children's 
        future. (``The 9/11 Commission Report''--pg. 378)

    On November 18, 2003, Ambassador Zoellick notified the 
Congress of his intention to initiate free trade agreement 
negotiations with Panama. USTR consulted frequently with the 
Committee about the negotiations and the U.S. position. 
Negotiations were launched on April 26, 2004.
    On November 15, 2004, following a visit by a bipartisan 
delegation of Members of Congress led by Chairman Thomas to 
Oman (see discussion below) and prior subsequent consultations 
with USTR, Ambassador Zoellick formally notified Congress of 
his intention to initiate free trade agreement negotiations 
with Oman. A free trade agreement with Oman is part of the goal 
announced by the President to form a Middle East Free Trade 
Area by 2013.
    On November 15, 2004, Ambassador Zoellick formally notified 
Congress of his intention to initiate free trade agreement 
negotiations with the United Arab Emirates. Negotiations are 
expected to begin in February or March of 2005. USTR consulted 
periodically with the Committee about the negotiations and the 
U.S. position. A free trade agreement with the United Arab 
Emirates is part of the goal announced by the President to form 
a Middle East Free Trade Area by 2013.
    On November 4-12, 2004, Chairman Thomas led a bipartisan 
delegation of Members of Congress to Tunisia, Jordan, Oman, and 
Egypt. The focus of the delegation's trip included trade, 
investment, and security issues in the region. The delegation 
held meetings with government officials and members of the 
business community and toured facilities that had received 
assistance from USAID and facilities receiving free trade 
agreement or Qualified Industrial Zone benefits. In December 
2004 the Committee filed its ``Report on Trade Mission to 
Tunisia, Jordan, Oman, and Egypt.''
    On September 20, 1991, the United States and Sri Lanka 
signed a Bilateral Investment Treaty that provides assurances 
to investors of both countries that their property rights will 
be respected. On July 25, 2002, the United States and Sri Lanka 
signed a Trade and Investment Framework Agreement (TIFA) 
designed to promote closer economic ties. On November 6, 2003, 
Ambassador Zoellick discussed the possibility of moving forward 
with a free trade agreement with Sri Lanka with the COG.
    6. Relationship between Trade and National Security.
    Actions taken: On several occasions during the 107th 
Congress, the Administration asked the Committee to consider 
certain trade benefits for national security reasons. The 
Committee intends to continue its examination of such issues, 
including an assessment of the national security benefits and 
the impact on affected U.S. industries and workers.
    On November 25, 2002, the President signed into law 
legislation (P.L. 107-296) creating a new Department of 
Homeland Security (DHS). This law transferred the U.S. Customs 
Service to the Department of Homeland Security under the 
authority of the Under Secretary for Border and Transportation 
Security. Authority for customs revenue functions is retained 
by the Secretary of the Treasury, administered by the 
Commissioner of U.S. Customs and Border Protection (CBP) under 
the terms of an executive delegation of authority order.
    On March 1, 2003, the former U.S. Customs Service was 
divided into two new agencies within DHS. Customs inspectors, 
canine enforcement officers, and import specialists were merged 
with immigration inspectors, border patrol agents, and 
agriculture inspectors to create CBP. Customs investigators and 
personnel in the air and marine operations were merged with 
immigration investigators, Federal air marshals, and members of 
the Federal protective service to create the U.S. Immigration 
and Customs Enforcement (ICE).
    On June 17, 2004, the Subcommittee on Trade held a public 
hearing on Customs budget authorizations and other customs 
issues. The hearing focused on issues surrounding the transfer 
of the former U.S. Customs Service to the Department of 
Homeland Security, customs modernization, customs user fees and 
cost accounting systems. Witnesses included the Honorable 
Robert Bonner, Commissioner, U.S. Customs and Border 
Protection; the Honorable Michael Garcia, Assistant Secretary 
for U.S. Immigration and Customs Enforcement; and 
representatives of the business community and labor unions. On 
June 22, 2004, Trade Subcommittee Chairman Crane sent a letter 
to Commissioner Bonner submitting questions for response and 
inclusion in the Subcommittee record, requesting responses by 
July 6, 2004. On September 13, 2004, the Subcommittee received 
responses.
    On July 22, 2004, the National Commission on Terrorist 
Attacks Upon the United States (``9-11 Commission''), an 
independent, bipartisan commission created by legislation 
released its report. The Commission discussed the Middle East 
Free Trade Area, or MEFTA, as a potential part of a 
comprehensive strategy to counter terrorism, stating:

          The U.S. government has announced the goal of working 
        toward a Middle East Free Trade Area, or MEFTA, by 
        2013. The United States has been seeking comprehensive 
        free trade agreements (FTAs) with the Middle Eastern 
        nations most firmly on the path to reform. The U.S.-
        Israeli FTA was enacted in 1985, and Congress 
        implemented an FTA with Jordan in 2001. Both agreements 
        have expanded trade and investment, thereby supporting 
        domestic economic reform. In 2004, new FTAs were signed 
        with Morocco and Bahrain, and are awaiting 
        congressional approval. These models are drawing the 
        interest of their neighbors. Muslim countries can 
        become full participants in the rules-based global 
        trading system, as the United States considers lowering 
        its trade barriers with the poorest Arab nations. 
        Recommendation: A comprehensive U.S. strategy to 
        counter terrorism should include economic policies that 
        encourage development, more open societies, and 
        opportunities for people to improve the lives of their 
        families and to enhance prospects for their children's 
        future. (``The 9/11 Commission Report''--pg. 378)

    The Committee has discussed with USTR the progress towards 
developing the Middle East Free Trade Area, including bilateral 
trade negotiations with Morocco, Bahrain, Oman, and the United 
Arab Emirates (see discussion above).
    7. Miscellaneous Duty Suspensions and Technical Corrections 
to U.S. Trade Laws.
    Actions taken: On March 4, 2003, as part of its oversight 
of the trade laws, Trade Subcommittee Chairman Crane introduced 
H.R. 1047, the ``Miscellaneous Trade and Technical Corrections 
Act of 2003,'' a bill to amend the Harmonized Tariff Schedule 
of the United States to modify temporarily certain rates of 
duty, to make other technical amendments to the trade laws, and 
for other purposes. The bill was based in large part on H.R. 
5385 from the 107th Congress, which had been passed by the 
House on October 7, 2002, but was not considered by the Senate.
    On April 5, 2003, the House suspended the rules, and the 
bill was passed by a recorded vote of 415-11. On March 21, 
2003, the Senate read the bill a second time and placed it on 
the Senate Legislative Calendar under general orders. The 
Senate took no further action during the first session. The 
House then largely incorporated the bill into H.R. 3521, the 
``Tax Relief Extension Act of 2003,'' introduced by Chairman 
Thomas on November 19, 2003. The bill included the provisions 
from H.R. 1047 in addition to other provisions, such as 
permanent normal trade Relations (PNTR) for Armenia. The House 
passed H.R. 3521 on November 20, 2003, by voice vote, and the 
bill was received by the Senate and referred to the Senate 
Committee on Finance. The Senate did not act on this bill 
during the 108th Congress.
    The Senate subsequently passed H.R. 1047 with an amendment 
on March 4, 2004, and a House-Senate conference was held on 
October 8, 2004. The conference report renamed the bill the 
``Miscellaneous Trade and Technical Corrections Act of 2004'' 
and included most of the provisions in the House and Senate 
versions of H.R. 1047. The House agreed to the conference 
report by unanimous consent on October 8, 2004, and the Senate 
agreed by unanimous consent on November 19, 2004, after 
adopting a motion for cloture on the report by a recorded vote 
of 88-5. The President signed H.R. 1047 on December 3, 2004 
(P.L. 108-429).
    8. U.S. Trade Remedy Laws.
    Actions taken: Section 201 of the Trade Act of 1974 allows 
the President to take action, including import relief, to 
assist a domestic industry seriously injured by imports to make 
a positive adjustment to import competition. On March 5, 2002, 
the President announced safeguard measures on ten categories of 
steel imports and imposed tariffs ranging from 8 to 30 percent. 
On December 4, 2003, pursuant to section 204(b) of the Trade 
Act of 1974, the President determined that the effectiveness of 
the safeguard action had been impaired by changed economic 
circumstances, and he repealed the tariffs.
    On March 26, 2003, the Subcommittee on Trade held a hearing 
on the impact of the section 201 safeguard actions on certain 
steel products. The hearing focused on changes in employment, 
wages, profitability, sales, productivity, and capital 
investment of steel consuming industries as a result of the 
safeguard action, whether the safeguard remedies affected steel 
prices and availability in the United States, and the effects 
of the safeguard on the domestic steel industry and the 
industry's efforts to restructure. Witnesses included 
representatives from small and large steel consuming 
businesses, U.S. steel producers, economic and financial 
analysts knowledgeable on the steel industry, and unions.
    In order to provide a comprehensive assessment of the 
impact of the steel safeguard measures on the U.S. economy, 
Chairman Thomas requested the International Trade Commission 
(ITC) on March 18, 2003, to institute an investigation under 
section 332 of the Tariff Act of 1930 as to the current 
competitive conditions facing the steel consuming industries in 
the United States with respect to the tariffs imposed by the 
President on March 5, 2002, and to foreign competitors not 
subject to such measures. As requested by Chairman Thomas, the 
ITC submitted the results of this review, along with the ITC's 
section 204 report, to the President and Congress in a single 
document in September 2003 (Steel: Monitoring Developments in 
the Domestic Industry (Investigation No. TA-204-9) and Steel-
Consuming Industries: Competitive Conditions with Respect to 
Steel Safeguard Measures (Investigation No. 332-452) 
(Publication 3632; September 2003)).
    9. Authorizations for the U.S. Customs Service, the Office 
of the United States Trade Representative (USTR), and the U.S. 
International Trade Commission (ITC).
    Actions taken: The Committee on Ways and Means has adopted 
a two-year authorization process to provide U.S. Customs and 
Border Protection, U.S. Immigration and Customs Enforcement, 
the Office of the United States Trade Representative, and the 
International Trade Commission with guidance as they plan their 
budgets and to provide Committee guidance in the appropriations 
process. Funding for the former U.S. Customs Service, USTR, and 
the ITC was authorized through FY 2004 in the Trade Act of 2002 
(P.L. 107-210).
    On November 25, 2002, the President signed into law 
legislation (P.L. 107-296) creating a new Department of 
Homeland Security. This law transferred the U.S. Customs 
Service to the Department of Homeland Security under the 
authority of the Under Secretary for Border and Transportation 
Security. Authority for customs revenue functions is retained 
by the Secretary of the Treasury, administered by the 
Commissioner of U.S. Customs and Border Protection under the 
terms of an executive delegation of authority order.
    On March 1, 2003, the former U.S. Customs Service was 
divided into two new agencies within DHS. Customs inspectors, 
canine enforcement officers, and import specialists were merged 
with immigration inspectors, border patrol agents, and 
agriculture inspectors to create CBP. Customs investigators and 
personnel in the air and marine operations were merged with 
immigration investigators, Federal air marshals, and members of 
the Federal protective service to create ICE.
            a. Hearing
    On June 17, 2004, the Subcommittee on Trade held a public 
hearing on Customs budget authorizations and other customs 
issues. The hearing focused on issues surrounding the transfer 
of the former U.S. Customs Service to the Department of 
Homeland Security, customs modernization, customs user fees and 
cost accounting systems. Witnesses included the Honorable 
Robert Bonner, Commissioner, U.S. Customs and Border 
Protection, the Honorable Michael Garcia, Assistant Secretary 
for U.S. Immigration and Customs Enforcement, and 
representatives of the business community and labor unions. On 
June 22, 2004, Trade Subcommittee Chairman Crane sent a letter 
to Commissioner Bonner submitting questions for response and 
inclusion in the Subcommittee record, requesting responses by 
July 6, 2004. On September 13, 2004, the Subcommittee received 
responses.
            b. Authorization legislation
    On May 20, 2004, Trade Subcommittee Chairman Crane 
introduced H.R. 4418, the ``Customs Border Security Act of 
2004,'' a bill to authorize appropriations for fiscal years 
2005 and 2006 for CBP, ICE, USTR and ITC. On June 24, 2004, the 
Subcommittee on Trade held a formal mark up session and ordered 
favorably reported to the full committee H.R. 4418, the 
``Customs Border Security and Trade A-encies Authorization Act 
of 2004,'' as amended, by voice vote. On July 8, 2004, the 
Committee on Ways and Means held a formal mark-up session on 
H.R. 4418, as amended by the Subcommittee. Chairman Thomas 
offered an amendment in the nature of a substitute, which was 
agreed to by voice vote. The Committee then ordered favorably 
reported H.R. 4418, as amended, by a roll call vote of 33 ayes 
to 0 nays. On July 14, 2004, the legislation passed the House 
by a recorded vote of 341--85. On July 15, the bill was 
received in the Senate and referred to the Committee on 
Finance. The Senate took no further action.
            c. Report
    On January 23, 2004, as required by the Trade Act of 2002, 
the Committee received from the GAO a report entitled ``U.S. 
Customs and Border Protection Faces Challenges in Addressing 
Illegal Textile Transshipment'' (GAO-04-345). GAO reported on 
CBP's system for preventing the use of false country-of-origin 
information for imported goods to evade U.S. textile quotas and 
customs duties.
    10. User Fees.
    Actions taken: On October 21, 2003, Representative Renzi 
introduced H.R. 3365, the ``Military Family Tax Relief Act,'' 
which contained no trade provisions. On October 29, 2003, the 
House suspended the rules and passed the bill by a recorded 
vote of 413-2. On November 3, 2003, the Senate passed H.R. 3365 
with an amendment that provided for an 11-month extension of 
Customs user fees. On November 5, 2003, the House concurred in 
the Senate amendment by unanimous consent. The President signed 
the bill into law on November 11, 2003 (P.L. 108-121).
    H.R. 4520, the ``American Jobs Creation Act of 2004,'' 
included a provision to extend all Customs user fees until 
September 30, 2014. The provision also clarified that user fees 
should be reasonably related to the cost of the customs service 
provided to importers. The Committee continues to examine the 
issue of setting the appropriate level for user fees and how 
the fees are used. In order for the Committee to continue to 
conduct proper oversight of the use of user fees, the provision 
also commissioned a study by the DHS to analyze all fees 
charged to importers and to recommend changes. H.R. 4520 was 
signed into law by the President on October 22, 2004 (P.L. 108-
357).
    11. Trade Adjustment Assistance (TAA).
    Actions taken: The Committee has continued its oversight of 
the general TAA programs for workers and firms in light of the 
substantial revisions made by the Trade Act of 2002 through 
discussions with the Administration and interested parties.
    12. Trade Relations with China.
    Actions taken: On October 28, 2003, Representative Phil 
English introduced H. Res. 414, a bill to encourage the 
People's Republic of China to fulfill its commitments under 
international trade agreements, support the United States 
manufacturing sector, and establish monetary and financial 
market reforms. The resolution urged Chinese leaders to 
modernize China's financial system, establish a more flexible 
exchange rate, and comply with China's trade agreement 
obligations. On October 29, 2003, the House suspended the 
rules, and the bill was passed by a recorded vote of 411-1.
    On October 30 and October 31, 2003, the Committee held a 
two-day hearing on United States-China economic relations and 
China's role in the economy. During the hearing, the Committee 
received testimony from witnesses from the Administration, ITC, 
GAO, CBO, and private sector interests. The hearing focused on 
(1) implementation of China's WTO accession commitments; (2) 
trade relations between the United States and China; (3) 
China's currency management; and (4) the relationship between 
trade with China and the U.S. economy.
    Chairman Thomas and Members of the Committee met with 
Chinese Vice-Premier Wu Yi on April 22, 2004, to discuss 
concerns about China's enforcement of intellectual property 
rights, currency policy, China's discriminatory tax on foreign 
semiconductors, and other current trade issues. USTR and the 
Committee also consulted concerning meetings between Chinese 
and U.S. officials as a part of the U.S.-China Joint Commission 
on Commerce and Trade andnew efforts to combat intellectual 
property right offenses, efforts for eventual liberalizing of China's 
currency peg to the dollar, and the elimination of the tax on foreign 
semiconductors.
    In December 2004, the Committee received a report by the 
U.S. Trade Representative's Office, as required under section 
421 of the ``U.S.-China Relations Act of 2000'' (P.L. 106-286), 
entitled ``2004 Report to Congress on China's WTO Compliance.'' 
The report acknowledges China's significant efforts to reform 
its economy and comply with the requirements of the WTO, but 
areas of concern remain. The report highlighted U.S. concerns 
including the need for improved protection of intellectual 
property rights, the ability of foreign firms to trade and 
distribute services directly within China without use of a 
Chinese intermediary, removal of non-tariff barriers for 
agricultural imports, and improved transparency in business 
regulation.
    13. Permanent Normal Trade Relations with Russia and Other 
Jackson-Vanik Countries.
    Actions taken: Armenia: Armenia's trade status was subject 
to the Jackson-Vanik provisions in Title IV of the Trade Act of 
1974. On February 4, 2003, Representatives Knollenberg and 
Pallone, co-Chairmen of the Congressional Caucus on Armenian 
Issues, introduced H.R. 528, a bill to authorize the extension 
of nondiscriminatory treatment (permanent normal trade 
relations, or PNTR) to the products of Armenia. Armenia became 
a member of the World Trade Organization on February 5, 2003. 
On March 5, 2003, Trade Subcommittee Chairman Crane requested 
written public comments for the record from all parties 
interested in the extension of PNTR treatment to products from 
Armenia. On November 19, 2003, Chairman Thomas introduced H.R. 
3521, the ``Tax Relief Extension Act of 2003,'' a bill to 
extend certain expiring provisions. The bill contained a 
provision granting PNTR treatment to products from Armenia. The 
House passed H.R. 3521 on November 20, 2003, by voice vote, and 
the bill was received by the Senate and referred to the Senate 
Committee on Finance. The Senate took no further action on that 
bill. A provision granting PNTR to products from Armenia was 
included in the conference report for H.R. 1047, the 
``Miscellaneous Trade and Technical Corrections Act of 2004,'' 
which was signed by the President on December 3, 2004 (P.L. 
108-429, see below for further discussion).
    Moldova: Moldova's trade status remains subject to the 
Jackson-Vanik provisions in Title IV of the Trade Act of 1974. 
Moldova became a member of the World Trade Organization on July 
26, 2001. On March 5, 2003, Chairman Crane requested written 
public comments for the record from all parties interested in 
the extension of PNTR treatment to products from Moldova. No 
further action was taken.
    Russia: Russia's trade status remains subject to the 
Jackson-Vanik provisions in Title IV of the Trade Act of 1974. 
A Working Party on Russia's WTO accession was established in 
June 1993. Throughout 2003 and 2004, Russia has held intensive 
bilateral market access negotiations on goods and services with 
WTO members, and Russia and the European Union concluded a 
market access accession agreement in May 2004. U.S. and Russian 
negotiators have met several times to discuss market access. 
USTR consults regularly with the Committee on the status of 
those negotiations.
    14. Trade and Development Act of 2000.
    Actions taken: The Committee met with a number of African 
leaders during the WTO's Cancun Ministerial and in Washington 
to discuss the operation of the Africa Growth and Opportunities 
Act (AGOA), a component of the Trade and Development Act of 
2000. These leaders told the Committee that the legislation has 
led to substantial investment in African countries, improved 
the standard of living for thousands of Africans, and aided in 
general development of many poor African regions. However, many 
of these officials requested an extension of the program 
benefits and various enhancements to the program, while others 
expressed concern over extension of eligibility for the use of 
third-country fabric because it would discourage regional 
fabric production. Due to the success of the program and strong 
Committee Member interest, the Subcommittee held a hearing on 
implementation of the Africa Growth and Opportunities Act to 
consider the development of new AGOA legislation and on how the 
program relates to the elimination of worldwide textile and 
apparel quotas in 2005, free trade negotiations with AGOA 
countries of the Southern African Customs Union, and the impact 
of African trade preferences on other U.S. trading partners 
especially in the Caribbean Basin.
    During the timeframe between January 12-23, 2003, Chairman 
Thomas led a bipartisan delegation of Members of Congress to an 
international forum established in the Africa Growth and 
Opportunity Act (AGOA) which was signed into law in 2000 (P.L. 
106-200). The delegation visited Namibia, South Africa, 
Madagascar, and Mauritius and toured several new firms 
established as a result of the trade benefits created by AGOA. 
The delegation participated in several speaking and discussion 
events at the AGOA forum in Mauritius. In January 2003, the 
Committee filed its ``Report on Trade Mission to Sub-Saharan 
Africa'' (WMCP: 108-2).
    The Committee conducted a hearing on April 20, 2004, which 
raised many issues related to extending and enhancing the 
program. Several African countries and the private sector 
raised the provision allowing lesser developed countries to use 
fabric from third-countries in the production of apparel 
receiving market access benefits when exported to the United 
States. This provision was due to expire at the end of 2004, 
and the private sector and many Committee Members supported 
extending the date for several more years to allow AGOA 
beneficiaries additional time to attract and develop yarn and 
fabric manufacturing that will supply the infant apparel 
industry in these countries. Lastly, many Committee Members and 
hearing witnesses complained of implementation setbacks such as 
unexpected interpretations by U.S. Customs officials that 
restricted use of the various AGOA benefit provisions. For 
these reasons, Committee Members remained strongly supportive 
of correcting and enhancing provisions to allow for broad and 
liberal use of the programs to give African countries access to 
the United States market.
    On April 1, 2004, Chairman Bill Thomas, together with 
Representatives Crane, Rangel, Houghton, Dunn, Weller, K. 
Brady, McDermott, Neal, Jefferson, Royce, and Payne, introduced 
H.R. 4103, the ``AGOA Acceleration Act of 2004.'' The Committee 
favorably reported H.R. 4103 to the House on May 5, 2004. The 
House passed the bill, as amended, on June 14, 2004, by voice 
vote. The Senate passed the bill without amendment by unanimous 
consent on June 24, 2004, and the President signed the bill 
into law on July 13, 2004 (P.L. 108-274). The law extends the 
existing AGOA program until 2015, extended third-country fabric 
benefits for lesser developed countries until 2007 with a 
phase-down in year three, and encourages the President to 
support African development in transportation, energy, 
agriculture, and telecommunications infrastructure. The bill 
also improves the rules of origin for AGOA beneficiaries by 
permitting use of certain third-country components and 
increasing the de minimis threshold from seven percent to ten 
percent.
    15. Conflict diamonds.
    Actions taken: On April 3, 2003, Representative Houghton 
introduced H.R. 1584, the ``Clean Diamond Trade Act,'' to 
implement U.S. obligations pursuant to the Interlaken 
Declaration on the Kimberley Process Certification Scheme for 
Rough Diamonds of November 5, 2002. The Declaration addresses 
the problem of the use of diamonds from mines controlled by 
African rebel forces to trade for arms in order to fuel civil 
war in Africa. On April 8, 2003, the House passed the bill by a 
recorded vote of 419-2. On April 10, 2003, the Senate passed 
H.R. 1584, with amendment, by unanimous consent. On April 11, 
2003, the House agreed to the Senate amendment by unanimous 
consent. The President signed the bill into law on April 25, 
2003 (P.L. 108-19).
    On August 25, 2004, the Committee received a report on the 
performance of the United States Kimberley Process Authority 
(USKPA) from the State Department. The report described and 
reviewed the practices, standards and procedures of the USKPA. 
The Committee continues to monitor implementation of the 
Kimberly Process.
    16. Jackson-Vanik Waiver and Extension of Normal Trade 
Relations to the Socialist Republic of Vietnam.
    Actions taken: Vietnam's trade status remains subject to 
the Jackson-Vanik provisions in Title IV of the Trade Act of 
1974. An annual review of Vietnam's Jackson-Vanik waiver occurs 
with a Presidential determination of that country's status for 
the upcoming year. The effect of the President's waiver is to 
grant conditional normal trade relations (NTR) status to 
products from Vietnam and to make U.S. exporters eligible for 
certain export credit guarantees in doing business with 
Vietnam. On May 29, 2003, 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. 108-
80). On July 9, 2003, Representative Rohrabacher introduced 
H.J. Res. 64 to disapprove the extension of NTR to Vietnam. No 
further action was taken on the resolution, and Vietnam's NTR 
status continued for another year. On June 3, 2004, 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. 108-191). A resolution of disapproval was not 
introduced with respect to the President's 2004 Jackson-Vanik 
determination for Vietnam, and Vietnam's NTR status continued 
for another year.
    17. Normal Trade Relations with the Lao People's Democratic 
Republic.
    Actions taken: Laos did not receive Normal Trade Relations 
(NTR) status because it was included in the Harmonized Tariff 
Schedule (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. On March 5, 2003, Trade Subcommittee 
Chairman Crane requested written public comments for the record 
from all parties interested in the extension of normal trade 
relations (NTR) treatment to products from Laos. On March 11, 
2004, Trade Subcommittee Chairman Crane and Representative 
McCollum introduced H.R. 3943 to extend nondiscriminatory 
treatment (normal trade relations treatment) to the products of 
Laos. A provision granting NTR to products from Laos was 
included in the conference report for H.R. 1047, the 
``Miscellaneous Trade and Technical Corrections Act of 2004,'' 
which was signed by the President on December 3, 2004 (P.L. 
108-429). (See below for further discussion of P.L. 108-429).
    18. 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, the 
Subcommittee will continue its oversight on the use and 
effectiveness of U.S. unilateral trade sanctions, in particular 
whether any 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.
    The Committee used this analytical framework in its work on 
legislation regarding Burma (Myanmar). On June 4, 2003, 
Representative Lantos introduced H.R. 2330, the Burmese Freedom 
and Democracy Act of 2003, to sanction the ruling Burmese 
military junta, strengthen Burma's democratic forces, and 
support and recognize the National League of Democracy as the 
legitimate representative of the Burmese people. On July 8, 
2003, Chairman Thomas sent a letter to Committee on 
International Relations Chairman Hyde asserting the 
jurisdiction of the Committee on Ways and Means over these 
provisions and agreeing to forego consideration of the bill 
because provisions sought by the Committee had been included in 
the Manager's Amendment to the bill. On July 15, 2003, H.R. 
2330 was approved under a suspension of the rules by a recorded 
vote of 418-2, with 1 present vote. On July 16, 2003, the bill 
passed the Senate, without amendment, by a recorded vote of 94-
1. The President signed H.R. 2330 into law on July 28, 2003 
(P.L. 108-61).
    The import restrictions contained in P.L. 108-61 expire one 
year after enactment unless renewed by Congress with a joint 
resolution meeting certain requirements, and import 
restrictions expire completely after three years. On June 3, 
2004, Representatives Lantos and Thomas introduced H.J. Res. 97 
to approve the renewal for one year of import restrictions 
contained in P.L. 108-61. On June 14, 2004, H.J. Res. 97 was 
approved by the House under a suspension of the rules by a 
recorded vote of 372-2. On June 24, 2004, the bill passed the 
Senate without amendment by a yea-nay vote of 96-1. The 
President signed H.J. Res. 97 into law on July 7, 2004 (P.L. 
108-272).
    19. Rules of Origin and Country of Origin Marking.
    Actions taken: The Subcommittee continued to review and 
consult with the Administration and the trade community on the 
status of rules of origin negotiations underway in the World 
Customs Organization; reviewed whether U.S. law and U.S. 
Customs enforcement efforts are effective in preventing 
unlawful transshipment; and reviewed the implementation 
labeling requirements by United States and its trading partners 
with respect to meat, fresh produce, and genetically modified 
products.
    20. Trade Relations with Japan.
    Actions taken: On June 3, 2003, Chairman Thomas, along with 
Representative Rangel and Senators Grassley and Baucus, sent a 
letter to President Bush stressing the value of United States-
Japan trade and asking that the President continue to press the 
Japanese Prime Minister Koizumi to accelerate de-regulation, 
enforce its current commitments under trade agreements, and 
continue to open its markets to U.S. goods, services, and farm 
products. On July 17, 2003, U.S. Trade Representative Zoellick 
sent a letter to Chairman Thomas underscoring the importance of 
U.S.-Japan relations and stating that the Administration will 
remain committed to improving our economic and trade relations 
with Japan.
    In response to a question from Chairman Thomas at a 
Congressional Oversight Group meeting, relating to Japan and 
other countries, Ambassador Zoellick wrote to Chairman Thomas 
on October 27, 2004, and acknowledged the need for USTR to make 
further efforts in order to remove non-science based 
phytosanitary barriers around the world that impede U.S. 
exports of agricultural products. Ambassador Zoellick stated 
his intention to dedicate more staffing resources to the issue 
and to formalize efforts with other agencies, especially USDA, 
so as to improve the responsiveness of the U.S. Government in 
resolving such foreign barriers.
    Numerous issues have been raised by Members and the private 
sector about impediments to free trade in Japan including the 
anticompetitive practices of its postal firm, sanitary and 
phytosanitary barriers to agricultural products, and unfair 
price determination for medical devices for the Japanese 
healthcare system. The Committee continues to raise these 
issues with Japanese officials and with U.S. Government 
officials.
    21. Asia Pacific Economic Cooperation Forum.
    Actions taken: During the 108th Congress, the United States 
concluded and Congress approved free trade agreements with APEC 
members Chile, Singapore, and Australia. In addition, 
negotiations for FTAs are underway with Thailand and Peru (see 
other sections of this report for more information). The 
Administration and the Committee have consulted regularly on 
the status of all these separate negotiations and on U.S. 
negotiating positions. The Committee has also monitored the 
proliferation of FTAs among APEC members to which the United 
States is not a party, including agreements between Chile and 
Korea, Japan and Mexico, Australia and Thailand, and China and 
ASEAN countries, as well as several ongoing negotiations. The 
Committee continued to review the status of those talks as well 
as other U.S. trade policy objectives in Asia that relate to 
APEC members.

Subcommittee on Health

    1. Regulatory and Contracting Reform.
    Actions taken: The Subcommittee held a hearing on Medicare 
regulatory and contracting reform on February 13, 2003. 
Testimony taken at the hearing helped form the basis of 
legislation considered by the Committee and included in H.R. 1, 
the ``Medicare Prescription Drug, Improvement, and 
Modernization Act of 2003.'' (P.L. 108-173)
    2. Medicare Payment and Advisory Commission (MedPAC) Report 
and Recommendations.
    Actions taken: The Subcommittee heard MedPAC's testimony on 
its recommendations at the following hearings: Medicare payment 
policies on March 6, 2003; Medicare cost-sharing and Medigap 
coverage on May 1, 2003. Testimony taken at these hearings 
helped form the basis of legislation considered by the 
Committee and included in H.R. 1, the ``Medicare Prescription 
Drug, Improvement, and Modernization Act of 2003.'' (P.L. 108-
173)
    Prior to the hearing, on March 5, 2003, the Chairman of the 
Committee requested that the Office of the Management Budget 
provide the Administration's position on each major MedPAC 
recommendation to Congress.
    3. Medicare's Cost-sharing and Supplemental Coverage.
    Actions taken: The Subcommittee held a hearing on cost-
sharing and Medigap coverage on May 1, 2003. Testimony taken at 
the hearing helped form the basis of legislation considered by 
the Committee and included in H.R. 1, the ``Medicare 
Prescription Drug, Improvement, and Modernization Act of 
2003.'' (P.L. 108-173)
    4. Prescription Drug Coverage.
    Actions taken: The full Committee held hearings on 
prescription drugs in Medicare on February 6, 2003, when it 
heard testimony on the President's FY 2004 Budget with the U.S. 
Department of Health and Human Services, and on April 9, 2003, 
when it heard testimony on expanding prescription drug coverage 
under Medicare. Testimony taken at these hearings helped form 
the basis of legislation considered by the Committee.
    H.R. 2473, the ``Medicare Prescription Drug and 
Modernization Act,'' was introduced June 16, 2003, and was 
reported out of the Committee on Ways and Means on June 17, 
2003, by a vote of 25-15. On June 27, 2003, the House passed 
H.R. 1, the ``Medicare Prescription Drug, Improvement, and 
Modernization Act,'' (MMA) which included provisions of H.R. 
2473, by a vote of 216-215. The Senate passed similar 
legislation on June 27, 2003, by a vote of 76-21. The bills 
were conferenced, and the House passed the Conference Report on 
November 22, 2003, by a vote of 220 to 215. The Senate also 
passed the Conference Report by a vote of 54-44 on November 25, 
2003, and the legislation was signed into law December 8, 2003 
(P.L. 108-173).
    The Health Subcommittee held hearings on the implementation 
of the MMA drug benefit, including a hearing on the 
prescription drug discount card on April 1, 2004, and 
electronic prescribing on July 22, 2004.
    5. Health Care Quality.
    Actions taken: The full Committee held a hearing on disease 
prevention initiatives in the President's FY 2004 Budget with 
the U.S. Department of Health and Human Services on February 6, 
2003, and the Subcommittee held a hearing on eliminating 
barriers to chronic care management in Medicare on February 25, 
2003. Testimony taken at these hearings helped form the basis 
of legislation considered by the Committee and included in H.R. 
1, the ``Medicare Prescription Drug, Improvement, and 
Modernization Act of 2003.'' (P.L. 108-173)
    The Subcommittee held a hearing on new frontiers in quality 
initiatives on March 18, 2004. The hearing focused on what is 
known about the current state of health care quality, recent 
changes to the Medicare program, and lessons that can be 
learned from experiences in the commercial market. The 
Subcommittee also held a hearing on increasing the use of 
information technology in health care to improve quality on 
June 17, 2004.
    6. Medicare Waste, Fraud and Abuse.
    Actions taken: On July 17, 2003, the full Committee held a 
hearing on waste, fraud and abuse that included an examination 
of Administration activities and problems related to pricing 
for currently covered prescription drugs, reimbursement for 
durable medical equipment and the Medicare Secondary Payer 
program. In addition, the Committee heard testimony on the 
False Claims Act and its importance in reducing fraud and abuse 
in Federal programs.
    In accordance with H. Con. Res. 95, the Concurrent 
Resolution on the Budget for Fiscal Year 2004, the Committee 
submitted findings from this hearing to the Committee on the 
Budget on September 9, 2003.
    The Committee exercised its oversight on the Medicare 
program by sending a letter to the Administrator of the Centers 
for Medicare and Medicaid Services on February 28, 2004, on the 
significant overpayments for Medicare outlier cases. Chairman 
Thomas urged the Administrator to expeditiously move to fix the 
problem as soon as possible. In addition, the Committee worked 
closely with the Office of the Inspector General in requesting 
information on graduate medical education for dental residents. 
Chairman Thomas subsequently wrote to the agency for a copy of 
the early alert which served as a basis for actions included in 
H.R. 1, the ``Medicare Prescription Drug Improvement and 
Modernization Act of 2003'' (P.L. 108-173).
    7. Medically Uninsured.
    Actions taken: The Committee Chairman asked the CBO to 
prepare a report detailing the diversity of the uninsured 
population in terms of their economic and family circumstances, 
their access to various types of insurance and the length of 
time they are without coverage. The report was issued in May 
2003. The Subcommittee held a hearing on the uninsured on March 
9, 2004. The hearing focused on issues concerning Americans who 
lack access to affordable health insurance. Testimony taken at 
the hearing helped form a more clear understanding of the 
causes and consequences of lack of health insurance, tax and 
regulatory policies that affect access to health insurance, and 
consequences faced by some of the uninsured who are 
hospitalized. This hearing also laid out a foundation for 
potential future hearings to better understand the problems of 
the uninsured.
    8. Graduate Medical Education.
    Actions taken: The Subcommittee heard MedPAC's testimony on 
its recommendations on Medicare payment policies, including 
payment for graduate medical education, on March 6, 2003. 
Testimony taken at this hearing helped form the basis of 
legislation considered by the Committee and included in H.R. 1, 
the ``Medicare Prescription Drug, Improvement, and 
Modernization Act of 2003.'' (P.L. 108-173)
    9. Medicare Modernization.
    Actions taken: The full Committee held a hearing on the 
President's FY 2004 Budget with HHS on February 6, 2003. 
Testimony on the President's proposals for strengthening and 
improving Medicare helped form the basis of legislation 
considered by the Committee and included in H.R. 1, the 
``Medicare Prescription Drug, Improvement, and Modernization 
Act of 2003.'' (P.L. 108-173)
    The Committee continued its oversight of the Medicare 
skilled nursing benefit. The Committee Chairman Thomas and the 
Subcommittee Chairman Johnson wrote to the Administrator of the 
Centers for Medicare & Medicaid Services (CMS) asking that it 
adjust the market basket update to reflect actual data. The use 
of projected data has resulted in lower payments than if actual 
data were used. The Subcommittee Chairman Johnson and 
Representative Camp wrote to the Administrator of CMS to 
release a report on end-stage renal disease. The subsequently 
released report served as a basis for the provisions in H.R. 1, 
the ``Medicare Prescription Drug, Improvement, and 
Modernization Act of 2003.'' (P.L. 108-173)
    The Committee requested a number of reports from the GAO in 
preparation for H.R. 1. On February 4, 2003, the Subcommittee 
Chairman Johnson asked the GAO to examine commuting patterns as 
an option for use in the geographic reclassification of 
hospitals for assignment in the hospital wage index. On March 
3, 2003, Chairman Thomas and Subcommittee Chairman Johnson 
asked for an examination of the costs of medical liability for 
the Medicare program such as defensive medicine. On April 1, 
2004, the Committee Chairman and Subcommittee Chairman Johnson, 
wrote to the Administrator of the CMS requesting additional 
changes to the physician payment formula for Medicare providers 
reimbursed under the physician fee schedule.
    The Chronic Care Improvement Program (CCIP), passed as part 
of the MMA, will establish several pilot programs to test 
approaches for managing the care of beneficiaries with multiple 
chronic conditions. The Subcommittee heard testimony on the 
implementation of the CCIP on May 11, 2004.

Subcommittee on Human Resources

    1. Welfare Reform.
    Actions taken: U.S. Department of Health and Human Services 
(HHS) Secretary Tommy Thompson testified before the full 
Committee on February 6, 2003, regarding the President's fiscal 
year 2004 budget proposals for HHS. During his testimony HHS 
Secretary Thompsondiscussed the Temporary Assistance for Needy 
Families (TANF) program and the Administration's proposals for 
reauthorization.
    On February 10, 2004, the full Committee conducted a 
hearing on the Administration's fiscal year 2005 budget for 
HHS. At that hearing HHS Secretary Thompson discussed the TANF 
reauthorization issues as well as marriage and healthy family 
initiatives proposed by the Administration.
    GAO completed a report for the Subcommittee in September 
2003, on the status of State TANF block grant balances and 
transfers to other programs such as the Child Care Development 
Block Grant and Social Services Block Grant programs as well as 
the extent to which these balances reflect reserves available 
for future use.
    In June 2004, GAO released a report on improper payment 
reviews for child care subsidies and TANF programs. The report 
was requested by Subcommittee Chairman Herger and Senate 
Finance Committee Chairman Charles Grassley.
    At the request of Subcommittee Chairman Herger, GAO studied 
TANF and Supplemental Security Income employment requirements 
and services for low-income individuals with disabilities. A 
report on that study was released in September 2004.
    Building on an extensive series of TANF related hearings in 
the 107th Congress, H.R. 4 was introduced on February 4, 2003, 
to reauthorize TANF and related programs. This legislation, the 
``Personal Responsibility, Work, and Family Promotion Act of 
2003,'' passed the House on February 13, 2003, by a vote of 
230-192. The bill was reported by the Senate Finance Committee 
on October 3, 2003. H.R. 4 was discussed in the Senate in March 
and April 2004 without a final vote being taken on the Senate 
legislation.
    To continue the operation of TANF and related programs, 
several short-term extensions were passed, including H.R. 5149 
(P.L. 108-308) which extended TANF and related programs through 
March 31, 2005. Additional information on TANF is provided in 
the Legislative Review of Human Resources Issues section of 
this report.
    2. Child Care.
    Actions taken: In testimony before the Full Committee on 
February 6, 2003, HHS Secretary Thompson discussed the 
importance of child care and the President's commitment to a 
high level of child care funding.
    GAO completed a child care related report for the 
Subcommittee in September 2003. This report included a review 
of the transfer of TANF funds to other areas such as the Child 
Care Development Block Grant and Social Services Block Grant 
programs.
    In June 2004, GAO released a report on improper payments 
for child care and TANF benefits, which was requested by 
Subcommittee Chairman Herger and Senate Finance Committee 
Chairman Charles Grassley.
    Provisions in H.R. 4, the Personal Responsibility, Work, 
and Family Promotion Act of 2003, increased mandatory and 
discretionary funds for the Child Care and Development Block 
Grant and the share of TANF funds that States may transfer to 
the Child Care and Development Block Grant and Social Services 
Block Grant. More detailed information on H.R. 4 is provided in 
the Legislative Review of Human Resources Issues section of 
this report.
    3. Child Support Enforcement.
    Actions taken: In testimony on the Administration's fiscal 
year 2004 HHS budget before the full Committee on February 6, 
2003, HHS Secretary Thompson reported on improvements in the 
amount of collections made by the child support program, the 
effectiveness of the program in collecting support for each 
Federal dollar invested, and continued support for program 
improvement proposals included in welfare reauthorization 
legislation.
    On February 10, 2004, the full Committee conducted a 
hearing on the Administration's fiscal year 2005 budget for 
HHS. HHS Secretary Thompson reviewed the status of the child 
support program and outlined improvement proposals.
    H.R. 4, the ``Personal Responsibility, Work, and Family 
Promotion Act of 2003,'' included provisions designed to 
improve the performance of the Nation's child support 
enforcement program. H.R. 4 passed in the House, was reported 
from the Senate Finance Committee, and was considered in the 
full Senate. Additional information regarding H.R. 4 is 
available in the Legislative Review of Human Resources Issues 
section of this report.
    The child support enforcement program's National Directory 
of New Hires that is authorized in the Social Security Act was 
amended in P.L. 108-199 and P.L. 108-295 to allow limited 
information sharing with government housing and unemployment 
benefit programs to improve program administration and better 
prevent fraud and abuse. More information about these two laws 
is available in the Legislative Review of Human Resources 
Issues section of this report.
    4. Supplemental Security Income (SSI).
    Actions taken: The Subcommittee heard from the Commissioner 
of the Social Security Administration at a hearing on April 29, 
2004, on the operation of the Supplemental Security Income 
(SSI) program, including on anti-fraud provisions in law and 
policy and further measures to improve program performance and 
better prevent fraud and abuse.
    On May 20, 2004, the Subcommittee held a hearing on the 
operation of the SSI program, hearing from witnesses on 
improvements the program has made and suggestions to further 
improve the SSI program. Witnesses included representatives 
from offices with oversight of Social Security programs, 
workers, and advocates.
    A joint hearing by the Subcommittees on Human Resources and 
Social Security was held on September 30, 2004. This hearing 
focused on the Social Security Administration's disability 
determination process. Witnesses included a Member of Congress, 
the Commissioner of Social Security, disability program staff, 
employee organizations, and advocates.
    In a July 2003 release, GAO reported that the Social 
Security Administration could enhance its ability to detect 
residency violations by recipients of SSI. Subcommittee 
Chairman Herger requested this report.
    Also at the request of Subcommittee Chairman Herger, GAO 
issued a report in September 2004 reviewing TANF and SSI 
program work requirements and services supporting work among 
low-income individuals with disabilities.
    H.R. 743, the ``Social Security Protection Act of 2003,'' 
was introduced on February 12, 2003, and included provisions 
amending the SSI program to enhance program protections and 
reduce waste. On April 2, 2003, the House agreed to the bill by 
a recorded vote of 396-28. On December 9, 2003, the Senate 
passed the bill, as amended, by unanimous consent. On February 
11, 2004, the House agreed to the Senate amendment, and the 
President signed the legislation into law on March 2, 2004 
(P.L. 108-203). Additional information regarding H.R. 743 is 
provided in the Legislative Review of Human Resources Issues 
section of this report.
    5. Child Protection.
    Actions taken: On April 8, 2003, the Subcommittee held a 
hearing on the Adoption and Safe Families Act of 1997 and the 
Adoption Incentives program created under that Act. Witnesses, 
including an Administration official, State and local program 
administrators, and policy experts, reviewed the implementation 
of the Adoption and Safe Families Act as well as proposals for 
improving the Adoption Incentives program.
    At a Subcommittee hearing on June 11, 2003, testimony was 
heard on the Bush Administration's Foster Care Flexible Funding 
Proposal included in the fiscal year 2004 budget proposal. 
Witnesses included representatives from the Administration, 
State and local program administrators, and the National Indian 
Child Welfare Association.
    The Subcommittee held a hearing on November 6, 2003, 
regarding an apparent failure to protect child safety in New 
Jersey. The hearing examined a specific case in which four boys 
adopted from the child protection system were apparently 
starved by their adoptive parents. The hearing focused on how 
their abuse escaped the attention of child protection workers, 
and what Federal and State officials can do to prevent the 
recurrence of such abuse. Witnesses included Members of 
Congress, State and local program administrators, policy 
experts, and a community representative.
    On November 19, 2003, the Subcommittee held a hearing on 
improved monitoring of vulnerable children in foster care and 
adoptive settings. Witnesses included Members of Congress, 
State and local program administrators, policy experts, and 
researchers. Testimony focused on what data the States collect 
to monitor children in foster care and for whom adoption 
subsidies are paid, how the data is used, and what additional 
data or applications might better ensure the safety, 
permanency, and well-being of children in foster care and or 
who have been adopted.
    The Subcommittee examined Federal and State oversight of 
child protection programs at a hearing on January 28, 2004. The 
focus of the hearing was what Federal, State, and local 
officials can and should do to ensure the safety, permanency, 
and well-being of children. Witnesses included an 
Administration official, State program administrators, GAO, 
researchers, and individuals involved in the child protection 
system.
    On May 13, 2004, the Subcommittee held a hearing to examine 
State efforts to comply with Federal Child and Family Services 
Review requirements related to safety, permanency, and child 
and family well-being. Witnesses included Federal and State 
officials experienced in the reviews.
    The Subcommittee held a hearing on June 17, 2004, to review 
a child protection case in which twin infants died in 
Baltimore, Maryland, and the implications of this case for 
efforts to improve the child protection system. Witnesses 
included representatives from the State of Maryland, the city 
of Baltimore, and an academic with social work experience.
    On July 13, 2004, the Subcommittee held a hearing to 
examine recent proposals to reform child protection financing, 
move children more quickly into safe, permanent homes, and 
expedite placements across State lines. The Subcommittee heard 
from State officials and representatives of organizations 
interested in child protection issues.
    In September 2003, GAO released a report requested by 
Subcommittee Chairman Herger related to State use of funds 
authorized under Title IV-B of the Social Security Act for 
services to help families address problems that lead to child 
abuse and neglect and to prevent unnecessary separation of 
children from their families.
    H.R. 3182, the ``Adoption Promotion Act of 2003,'' was 
introduced on September 25, 2003, to reauthorize the Adoption 
Incentives program through fiscal year 2008 and to create a new 
incentive payment to promote adoption of children age 9 and 
older. The bill passed the House on October 8, 2003, by voice 
vote. The Senate passed the bill by unanimous consent on 
November 14, 2003, and on December 2, 2003, the President 
signed the legislation (P.L. 108-145).
    H.R. 4504, a bill to expedite the safe placement of foster 
and adoptive children into homes across State lines, passed in 
the House on October 5, 2004, by a voice vote. The bill, the 
``Safe and Timely Interstate Placement of Foster Children Act 
of 2004,'' was introduced by Majority Leader DeLay and 
cosponsored by Subcommittee Chairman Herger, among others.
    H.R. 4856, the ``Child Safety, Adoption, and Family 
Enhancement (Child SAFE) Act of 2004,'' was introduced by 
Subcommittee Chairman Herger on July 19, 2004. This bill would 
fundamentally change the financing of the child protection 
system to focus on outcomes rather than process as well as add 
resources and flexibility to ensure children are protected and 
that more families stay together.
    6. Unemployment Compensation.
    Actions taken: On March 20, 2003, the Subcommittee held a 
hearing to review State use of the $8 billion in surplus 
Federal unemployment funds distributed in March 2002 under P.L. 
107-147. Witnesses included a representative of the U.S. 
Department of Labor, GAO, State employment security program 
directors, and a policy expert.
    A hearing on the nation's unemployment compensation system 
to review unemployment benefits and recipients' returns to work 
was held on April 10, 2003. Witnesses included policy experts 
and researchers who testified on the effect of unemployment 
compensation benefits on prompt returns to work. Testimony also 
was heard on features of unemployment compensation and related 
programs, including profiling and work search requirements.
    A joint hearing of the Subcommittees on Human Resources and 
Oversight was held on June 19, 2003, to examine unemployment 
fraud and abuse. The U.S. Department of Labor, a State program 
administrator, an employer, and GAO testified on concerns about 
State Unemployment Tax Act (SUTA) dumping. GAO testimony 
discussed a survey of tax consultants and States conducted at 
the request of Subcommittee Chairman Herger and Oversight 
Subcommittee Chairman Houghton.
    H.R. 3463, the ``SUTA Dumping Prevention Act of 2003,'' was 
introduced by Subcommittee Chairmen Herger and Houghton, as 
well as Ranking Members Cardin and Pomeroy, among others, on 
November 6, 2003. This legislation was signed into law on 
August 9, 2004 (P.L. 108-295). Additional information about 
H.R. 3463 is provided in the Legislative Review of Human 
Resources Issues section of this report.

Subcommittee on Social Security

    1. Hearings to examine Social Security's financial 
challenges.
    Actions taken: The Subcommittee held a field hearing at 
Florida Atlantic University in Boca Raton, Florida on January 
26, 2004, to examine Social Security's role in providing income 
security, program financing, factors causing Social Security's 
financial challenges, the consequences of inaction, choices 
policymakers face, and issues for the Subcommittee to consider 
as they move forward. The Subcommittee heard testimony from the 
Deputy Commissioner of Social Security, as well as a professor 
at the university and witnesses representing seniors and young 
Americans. Witnesses discussed the importance of Social 
Security to seniors; options for strengthening the program's 
finances, including tax increases, benefit cuts, and voluntary 
personal accounts; and the potential impact of these options on 
individuals of all ages.
    2. Hearings to examine the use of SSNs.
    Actions taken: The Subcommittee held a hearing on July 10, 
2003, to examine the widespread use and misuse of the SSN in 
the public and private sectors, as well as the integrity of the 
SSA's SSN issuance and wage crediting process. The Subcommittee 
heard testimony from the Inspector General of the SSA, the GAO, 
local law enforcement, and experts in privacy issues. Witnesses 
discussed how widespread utilization and public exposure of 
SSNs have made them an invaluable tool for identity thieves, as 
well as the trauma identity theft creates in victims' lives. 
The witnesses provided feedback and support regarding 
provisions in H.R. 2036, the ``Social Security Number Privacy 
and Identity Theft Prevention Act of 2001,'' introduced by 
Subcommittee Chairman Shaw in the 107th Congress, as well as 
legislation introduced by other Members of Congress. In 
response to information gathered at this hearing, Subcommittee 
Chairman Shaw introduced H.R. 2971, the ``Social Security 
Number Privacy and Identity Theft Prevention Act of 2003,'' on 
July 25, 2003. This legislation would have restricted the sale, 
purchase, and display to the general public 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 SSN.
    The Subcommittee on Social Security and the Subcommittee on 
Oversight held a joint hearing on March 10, 2004, to examine 
the respective responsibilities of the SSA, IRS, and DHS in 
ensuring accurate earnings reporting and tax payments, as well 
as the degree to which policies and procedures are coordinated 
among agencies to prevent misuse of SSNs and ITINs. The 
Subcommittees heard testimony from the Deputy Commissioner of 
Social Security, the Commissioner of the IRS, GAO, the Acting 
Inspector General for Tax Administration of the U.S. Department 
of the Treasury, the Assistant Inspector General for 
Investigations of the SSA, and the National Taxpayer Advocate 
of the IRS. Witnesses discussed recent improvements in the 
documentation and procedural requirements for issuance of SSNs 
and ITINs, recommendations for improvements in tax compliance 
and reporting of wages to the SSA and IRS, and the potential 
impact of those recommendations on individuals and the 
agencies.
    The Subcommittee on Social Security held a hearing on June 
15, 2004, to examine how criminals use SSNs to commit identity 
theft, the impact of identity theft on victims, and to receive 
feedback regarding H.R. 2971. The Subcommittee heard testimony 
from the Director of the Bureau of Consumer Protection for the 
Federal Trade Commission, the Acting Inspector General of the 
SSA, GAO, and the Assistant Chief Inspector for Investigations 
and Security of the United States Postal Inspection Service, as 
well as witnesses representing consumers and the public and 
private sectors. Witnesses discussed the pivotal role SSNs play 
in identity theft, the need to improve the process of issuing 
SSNs, and the need to protect SSN privacy. Witnesses also 
provided information on how the bill's provisions would protect 
individuals from identity theft, as well as its impact on 
United States courts, public record administrators, and 
businesses.
    3. Hearings to examine disability program improvements.
    Actions taken: On September 25, 2003, the Subcommittee held 
a hearing on the SSA's management of the Office of Hearings and 
Appeals. Witnesses included the Commissioner of Social 
Security, the SSA Inspector General, and representatives from 
the Social Security Advisory Board, the Consortium of Citizens 
with Disabilities, and Agency employee organizations. At the 
hearing, the Commissioner introduced her long-term approach for 
improving the disability determination process. Once 
implemented, the Commissioner expects that processing times 
will be reduced by at least 25 percent, accuracy and 
consistency in decisions will increase, and barriers will be 
removed for individuals with disabilities who wish to return to 
work. At this hearing the Subcommittee also reviewed lapses in 
the SSA's management of the Milwaukee and Chicago Offices of 
Hearings and Appeals.
    On March 18, 2004, the Subcommittee held a hearing to 
review the SSA's management of the Ticket to Work program, 
including early results, issues of concern, and needed 
improvements. Witnesses, including representatives from the 
SSA, program participants, employment networks, and members of 
the Ticket to Work and Work Incentives Advisory Panel, reviewed 
the implementation of the program to date and discussed changes 
needed to increase participation in the program.
    On September 30, 2004, the Subcommittee held a joint 
hearing with the Subcommittee on Human Resources on the 
Commissioner of Social Security's proposal to improve the 
disability process. Testimony was heard from a Member of 
Congress, the Commissioner of Social Security, the Chairman of 
the Social Security Advisory Board, and other stakeholders in 
the process. At the hearing, the Commissioner updated the 
Subcommittees on the preparations she is taking to implement 
the reforms and the possible changes to her original proposal. 
Other witnesses reviewed various aspects of the Commissioner's 
proposal and suggested modifications to the plan.
    4. Hearings to examine the stewardship of the Social 
Security programs.
    Action taken: The Subcommittee held a hearing on February 
27, 2003, on H.R. 743, the ``Social Security Protection Act of 
2003,'' which was introduced by Subcommittee Chairman Shaw on 
February 12, 2003. The Subcommittee heard testimony from the 
SSA Inspector General, GAO, lawyers, claimant representatives, 
and advocates of individuals with disabilities, explaining the 
need for quick action and how the bill would give the SSA the 
tools it needs to prevent misuse of benefits by representative 
payees, prevent program fraud and abuse, help individuals with 
disabilities gain access to representation, and aid individuals 
with disabilities who want to return to work.
    5. Hearings to examine service delivery.
    Actions taken: On July 24, 2003, the Subcommittee held a 
hearing on the SSA's Service Delivery Budget Plan, a 5-year 
plan submitted to the Office of Management and Budget with the 
Agency's fiscal year 2004 budget request. Testimony was heard 
from the Commissioner of Social Security, representatives from 
the GAO (whose testimony was based on a number of reports 
requested from the Subcommittee), and the Consortium for 
Citizens with Disabilities. Subcommittee Members heard how the 
Agency is working to reduce delays and backlogs in the 
disability program by redeploying staff to key positions, and 
by converting from a paper to an electronic disability folder.
    On February 26, 2004, the Subcommittee held a second 
hearing on the SSA's Service Delivery Budget Plan. At this 
hearing the Commissioner of Social Security reviewed the 
President's budget request for fiscal year 2005. The 
President's budget request would enable the Agency to keep up 
with growing core workloads, implement Ticket-to-Work programs, 
and combat SSN misuse. In addition, with the funds provided for 
fiscal year 2005, the Agency plans to implement the Medicare 
Modernization Act (P.L. 108-173), improve the disability 
determination process, and improve payment accuracy.
    In addition, Subcommittee Chairman Shaw has received the 
following studies from the GAO: Electronic Disability Claims 
Processing--SSA Needs to Address Risks Associated with IT's 
Accelerated Systems Development Strategy; Social Security 
Disability--Reviews of Beneficiaries' Disability Status Require 
Continued Attention to Achieve Timeliness and Cost 
Effectiveness; Social Security Administration--More Effort 
Needed to Assess Consistency of Disability Decisions, Strategic 
Workforce Planning Needed to Address Human Capital Challenges 
Facing the Disability Determination Services, Disclosure Policy 
for Law Enforcement Allows Information Sharing but SSA Needs to 
Ensure Consistent Application, Actions Taken to Strengthen 
Procedures for Issuing Social Security Numbers to Noncitizens 
but Some Weaknesses Remain; Social Security Numbers--Improved 
SSN Verification and Exchange of States' Driver Records Would 
Enhance Verification, Private Sector Entities Routinely Obtain 
and Use SSNs and Laws Limit the Disclosure of This Information, 
Governments Could Do More to Reduce Display in Public Records 
and Identity Cards; Social Security--Proposed Totalization 
Agreement with Mexico Presents Unique Challenges.
    In addition, Chairman Shaw has requested the following 
studies from GAO: the SSA's management of the earnings suspense 
file; lessons learned from other countries' public pension 
reforms; what citizens understand about their Social Security 
and pension benefits; uses and protection of SSNs during third 
party contracting; activities of internet information 
resellers; and Social Security's management of totalization 
agreements.

 C. Additional Oversight Activities and any Recommendation or Actions 
                                 Taken


    1. ADDITIONAL OVERSIGHT ACTIVITIES OF THE OVERSIGHT SUBCOMMITTEE

    a. Taxpayer Rights.
    Actions taken: On March 12, 2003, the Subcommittee 
requested written comments on the legislative proposals to 
protect taxpayer rights, including proposals contained in the 
National Taxpayer Advocate's 2001 and 2002 Annual Report to 
Congress, reports by the U.S. Treasury Department and JCT 
mandated by the IRS Restructuring and Reform Act of 1998 (RRA 
'98) (P.L. 105-206), and the President's fiscal year 2004 
budget proposal. Congress passed the first ``Taxpayer Bill of 
Rights'' in 1988. It expanded taxpayer protections in the 
``Taxpayer Bill of Rights 2'' in 1996 and, in that legislation, 
established the National Commission on Restructuring the IRS. 
The Restructuring Commission's June 1997 report contained 
recommendations that were the basis for RRA '98. The RRA '98 
contained many more taxpayer rights guarantees; it directed the 
IRS to place a greater emphasis on serving the public and 
meeting taxpayers' needs. The Subcommittee received letters of 
support from the American Institute of Certified Public 
Accountants, the Council for Electronic Revenue Communication 
Advancement, the National Association of Enrolled Agents, the 
National Payroll Reporting Consortium and the National Society 
of Accountants.
    b. Department of the Treasury Inspector General 
Consolidation Act of 2003.
    Actions taken: On November 21, 2003, Representative Portman 
introduced the ``Department of the Treasury Inspector General 
Consolidation Act of 2003'' (H.R. 3625). On November 24, 2003, 
the Subcommittee requested written comments on this bill, which 
willconsolidate the two existing Inspector General offices at 
the Department of the U.S. Treasury--the Office of Inspector General of 
the Treasury (OIG) and the Office of the Treasury Inspector General for 
Tax Administration (TIGTA)--into a new office called the Office of the 
Treasury Inspector General (TIG). In order to maximize efficiencies and 
effectiveness, and to eliminate duplication, the President, in his 
fiscal year 2004 budget, recommended that OIG and TIGTA be merged into 
a new single entity, which would have the same powers and authorities 
as its predecessors have under current law.
    c. Student Aid Streamlined Disclosure Act of 2003.
    Actions taken: On November 25, 2003, the Subcommittee 
requested written comments on H.R. 3613, the ``Student Aid 
Streamlined Disclosure Act of 2003,'' introduced by 
Representative Sam Johnson (R-TX). The bill seeks to improve 
the process of verifying income information provided by student 
aid applicants and to better protect taxpayer privacy. It would 
implement the Bush Administration's proposal to allow matching 
of IRS data, and it was drafted with the help of the 
Subcommittee in consultation with three Federal agencies. Under 
the bill students and their parents or guardians will no longer 
be required to provide copies of Form 1040 or blanket waivers 
of tax confidentiality in order to obtain a student loan or 
grant.
    d. GAO Review of EITC Compliance.
    Actions taken: The Subcommittee requested that the U.S. 
Government Accountability Office conduct a study of the Earned 
Income Tax Credit (EITC) pre-certification initiative and 
overall EITC compliance. This request was made to reduce the 
number of inaccurate EITC claims, and to evaluate how the 
credit is administered in order to reduce overclaim rates while 
minimizing taxpayer burden. The GAO report will examine the IRS 
plans for the 2004 filing season based on the experience of the 
pre-certification program and the status of the EITC re-
certification program, including the number and types of 
taxpayers contacted. The report will also review the current 
process for evaluating EITC eligibility, the current EITC error 
rate and whether recent statutory changes have had an impact on 
the error rate or on the rate of overpayments and compliance.
    e. Reporting Requirements of Tax-Exempt Groups.
    Actions taken: The Subcommittee continued and expanded its 
review from the 107th Congress on the current law, the 
appropriate role of and tax benefits for tax-exempt 
organizations, the adequacy of IRS oversight and reporting 
requirements, and suggestions for improvement. Tax-exempt 
organizations play an important role in the United States and 
their presence and influence continue to grow. There are over 
1.4 million tax-exempt organizations that belong to one of more 
than 30 categories described in the IRC. For tax year 1999, 
those Section 501(c)(3) organizations required to file with the 
IRS had $1.5 trillion in assets and $807 billion in annual 
revenues. The Statistics of Income Division of the IRS 
estimates that the revenue from all tax-exempt organizations 
accounts for twelve percent of the gross domestic product. In 
particular, the Subcommittee explored the adequacy of tax-
exempt reporting requirements during its November 20, 2003, 
hearing on non-profit credit counseling organizations and June 
22, 2004, and hearing on pricing practices of tax-exempt 
hospitals.
    f. Oversight of Drug Interdiction Efforts.
    Actions taken: On October 5, 2004, the Subcommittee staff 
met with agents from the Drug Enforcement Agency (DEA) to 
discuss the activities undertaken by the U.S. Department of the 
Treasury and the U.S. Department of Homeland Security to 
address Federal drug interdiction efforts using laws relating 
to cash transaction reporting, money laundering, foreign tax 
havens, and national security laws administered by the IRS, U.S 
Customs Service and other entities. The DEA has 3,896 agents 
nationwide (10% of those are assigned overseas), with a 
presence in 80 countries. The DEA has successfully partnered 
with other countries in pursuing narcotics trafficking. It is 
estimated that annual drug trafficking revenues generate 
roughly $65 billion a year. DEA indicated that with the 
creation of the Department of Homeland Security there has been 
some difficulty between the various agencies involved in 
coordinating efforts. However, Federal agencies such as Bureau 
of Immigration and Customs Enforcement (ICE), Internal Revenue 
Service, Drug Enforcement Administration, FBI are continuing to 
work together to coordinate efforts and share information.
    g. Annual briefing from the IRS Oversight Board and the 
National Taxpayer Advocate.
    Actions taken: On October 6, 2004, Chairman Houghton and 
Members of the Oversight Subcommittee met with Ray Wagner, the 
Chairman of the IRS Oversight Board and Nina Olson, the 
National Taxpayer Advocate (NTA). The Oversight Board annual 
report was discussed along with the solutions to the annual tax 
gap (the difference between what taxpayers are supposed to pay 
and what the IRS actually collects). The tax gap is estimated 
to be $311 billion. The NTA discussed plans to increase their 
focus on protecting taxpayer rights. To that end, the Taxpayer 
Advocate plans to review new IRS policies through the framework 
of a new Taxpayer Rights Impact Statement. In addition, the NTA 
will seek to review IRS training programs and seek to broaden 
public awareness of the mission of the Taxpayer Advocate and 
its ability to assist taxpayers.
    h. Commemorative Coin Legislation.
    Actions taken: On April 28, 2004, Financial Services 
Committee reported three revenue-raising commemorative coin 
bills for which Ways and Means was granted sequential referral. 
House Rule XXI, clause 5(a) clearly states the exclusive 
jurisdiction of the Committee on Ways and Means over any 
measure carrying a revenue or tax. The three commemorative coin 
bills were John Marshall Commemorative Coin Act (P.L. 108-290), 
the Marine Corps Commemorative Coin (P.L. 108-291) and the 
Jamestown Commemorative Coin Act (P.L. 108-289).
    Each bill contained surcharges, a revenue raising 
provision, for specific programs or projects. In 1996, the 
Commemorative Coin Reform Act (CCRA) (P.L. 104-208) changed the 
issuance of commemorative coins by establishing limitations on 
the number of commemorative coin issues in a given year, not to 
exceed more than two, and established mintage limits. This was 
done in order to keep the numismatic market from becoming 
saturated. During the Committee on Ways and Means mark-up of 
the three bills, Chairman Thomas introduced an amendment that 
enforced the limitations set forth in the CCRA on the number of 
commemorative coins that can be issued in a given year.
    i. Tax Incentives for Low-Income Individuals and Distressed 
Communities.
    Actions taken: The Subcommittee continued Oversight on the 
Bush Administration's ``opportunity zones,'' where businesses 
receive tax and regulatory relief for communities that have 
lost jobs. In the 1980s, the enterprise zones were created in 
an effort to reduce inner-city taxes and bureaucracy. In 2000, 
community renewal legislation was enacted as part of an omnibus 
appropriations bill, the Consolidated Appropriations Act of 
2001, which authorized nine empowerment zones and 40 renewal 
communities. The Ways and Means Committee brought H.R. 4193 to 
the floor on May, 17, 2004, which passed under suspension by 
voice vote. The legislation expands existing renewal 
communities and updates the New Markets Tax Credit.

 2. ADDITIONAL OVERSIGHT ACTIVITIES OF THE SOCIAL SECURITY SUBCOMMITTEE

    In addition to the hearings detailed above, the 
Subcommittee on Social Security held a hearing on May 1, 2003, 
to examine why two provisions-the Government Pension Offset 
(GPO) and the Windfall Elimination Provision (WEP)--that reduce 
Social Security benefits for workers with government pensions 
from Federal, State, or local government jobs not subject to 
Social Security taxes--were enacted, how they affect 
beneficiaries, and options for their modification or repeal. 
The Subcommittee also examined how modifications to current law 
would affect beneficiaries, the budget, and the solvency of the 
Social Security Trust Funds. The Subcommittee heard testimony 
from Members of Congress; the SSA; GAO; and organizations 
representing teachers, Federal Government employees, State and 
local employees, and police officers. As a result of this 
hearing, Chairman Shaw, Representative Brady, and 
Representative Sam Johnson of the Subcommittee, as well as 
Representatives McKeon, Berman, and Michaud, introduced H.R. 
4391, the ``Public Servant Retirement Protection Act,'' on May 
19, 2004, which would repeal the WEP and replace it with an 
individualized benefit calculation.
    The Subcommittee held a hearing on July 20, 2004 on H.R. 
4391. The Subcommittee heard testimony from the Deputy 
Commissioner for Disability and Income Security Programs of the 
SSA, as well as organizations representing teachers and police 
officers. The Subcommittee heard testimony on Social Security 
provisions affecting public employees, including the WEP, how 
the bill could be administered by the SSA, and the effect of 
the bill's provisions on the Social Security benefits of public 
employees.

      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, of the 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 108th 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) Bonded debt of the United States, subject 
                to the last sentence of clause 4(f).
          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.
                  (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 $8.18 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 21 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 108th Congress can be outlined as 
follows:
          (a) Old-age, survivors, and disability insurance 
        (Title II)--At present, there are approximately 156 
        million workers in employment covered by the program, 
        and for calendar year 2003, $479 billion in benefits 
        were paid to 47 million individuals.
          (b) Medicare (Title XVIII)--Provides hospital 
        insurance benefits to 34.9 million persons over the age 
        of 65 and to 6.4 million disabled persons. Voluntary 
        supplementary medical insurance is provided to 33.4 
        million aged persons and 5.6 million disabled persons. 
        Total program outlays under these programs were $281 
        billion in 2003.
          (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 2003, 
        6.9 million individuals received Federal SSI benefits 
        on a monthly basis. Of these 6.9 million persons, 
        approximately 1.2 million received benefits on the 
        basis of age, and 5.6 million on the basis of blindness 
        or disability. Federal expenditures for cash SSI 
        payments in 2003 totaled $35.6 billion, while State 
        expenditures for federally administered SSI supplements 
        totaled $4.9 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. TANF also includes incentive funds for States 
        that achieve overall program goals and additional 
        incentive funds for States that are successful in 
        reducing non-marital births. In most cases, Federal 
        TANF benefits for individuals are limited to 5 years 
        and individuals must work to maintain their 
        eligibility. In March 2004, about 2 million families 
        and 4.8 million individuals received benefits from the 
        TANF program.
          (e) Child support enforcement (part D of Title IV)--
        In fiscal year 2003 Federal administrative expenditures 
        totaled $5.2 billion for the child support enforcement 
        program. Child support collections for that year 
        totaled $21.2 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 2003, 
        Federal expenditures for child welfare services totaled 
        $694 million. Federal expenditures for foster care and 
        adoption assistance were approximately $6.2 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. Between July 1, 2003, and 
        June 30, 2004, an estimated $36.1 billion was paid in 
        unemployment compensation, with approximately 8.6 
        million workers receiving unemployment compensation 
        payments.
          (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. In fiscal year 2004, $1.7 
        billion was appropriated. 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 (NAFTA) 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 General System of Preferences and 
        the Caribbean Basin Initiative;
          (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); and
          (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 non-revenue 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 108TH 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)]
------------------------------------------------------------------------
H. Res., sponsor, and date of  Description of Senate action (and related
        House passage                    House action, if any)
------------------------------------------------------------------------
107th Congress:
    H. Res. 240, Mr. Thomas,   On September 13, 2001, the Senate passed
     September 20, 2001.        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,    On October 17, 2000, the Senate passed S.
     October 24, 2000.          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,   On November 3, 1999, the Senate passed S.
     November 18, 1999.         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,   On February 24, 1999, the Senate passed
     November 18, 1999.         S. 4, the Soldiers', Sailors', Airmen,
                                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,  On May 20, 1999, the Senate passed S.
     July 16, 1999.             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,    On October 8, 1998, the Senate passed S.
     October 15, 1998.          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,   On April 15, 1997, the Senate passed S.
     March 5, 1998.             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,    On June 30, 1996, the Senate passed H.R.
     September 28, 1996.        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,   On September 25, 1996, the Senate passed
     September 27, 1996.        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,     On January 26, 1996, the Senate passed S.
     April 16, 1996.            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,    On February 1, 1996, the Senate passed S.
     March 21, 1996.            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,  On October 3, 1994, the Senate passed S.
     October 7, 1994.           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,  On July 20, 1994, the Senate passed H.R.
     August 12, 1994.           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 (FDA) 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 benefited 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,  On May 25, 1994, the Senate passed S.
     July 21, 1994.             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,  On May 29, 1994, the Senate passed S.
     July 21, 1994.             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,   On June 22, 1994, the Senate passed H.R.
     July 14, 1994.             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.           On August 1, 1991, the Senate passed S.
     Rostenkowski, February     884 amended, the Driftnet Moratorium
     25, 1992..                 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.           On February 20, 1991, the Senate passed
     Rostenkowski, October      S. 320, to reauthorize the Export
     31, 1991.                  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,    On July 11, 1991, the Senate passed S.
     October 22, 1991.          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 VII 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,   On August 4, 1989, the Senate passed S.
     Nov. 9, 1989.              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.           On Apr. 19, 1989, the Senate passed S.
     Rostenkowski, June 15,     774, the Financial Institution Reform,
     1989.                      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.           On Mar. 30, 1987, the Senate passed S.
     Rostenkowski, July 30,     829, legislation which would authorize
     1987.                      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.           On 0ct. 6, 1987, the Senate passed S.
     Rostenkowski, June 16,     1748, legislation which would prohibit
     1988 (see also H.R.        the importation into the United States
     3391).                     of all products from Iran. (The House
                                passed H.R. 3391, which included similar
                                provisions, on 0ct. 6, 1987.)
    H. Res. 479, Mr.           On May 13, 1987, the Senate passed S.
     Rostenkowski, June 21,     727, legislation which would clarify
     1988 (see also H.R. 2792   Indian treaties and Executive orders
     and H.R. 4333).            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.           On Sept. 9, 1988, the Senate passed S.
     Rostenkowski, Sept. 23,    2662, the Textile and Apparel Trade Act
     1988 (see also H.R.        of 1988. This legislation would impose
     1154).                     global import quotas on textiles and
                                footwear products.
    H. Res. 552, Mr.           On Sept. 9, 1988, the Senate passed S.
     Rostenkowski, Sept. 28,    2763, the Genocide Act of 1988. This
     1988.                      legislation contained a ban on the
                                importation of all oil and oil products
                                from Iraq.
    H. Res. 603, Mr.           On Mar. 30, 1988, the Senate passed S.
     Rostenkowski, Oct. 21,     2097, the Uranium Mill Tailings Remedial
     1988.                      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.           On Aug. 8, 1988, the Senate passed H.R.
     Rostenkowski, Oct. 21,     1315, legislation which would authorize
     1988.                      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.           On Sept. 26, 1985, the Senate passed S.
     Rostenkowski, Oct. 1,      1712, legislation which would extend the
     1985.                      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.           The Senate passed S. 638, legislation to
     Rostenkowski, Sept. 25,    provide for the sale of Conrail to the
     1986.                      Norfolk Southern Railroad. The
                                legislation contained numerous
                                provisions relating to the tax treatment
                                of the sale of Conrail.
98th Congress:
    H. Res. 195, Mr.           On Apr. 21, 1983, the Senate passed S.
     Rostenkowski, June 17,     144, a bill to insure the continued
     1983.                      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 the exercise 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 have been sustained:

         G. Points of Order--House Rule XXI Chronological List


September 14, 2004

            H.R. 5025, Transportation, Treasury, and Independent 
                    Agencies Appropriations Act, 2005
    A point of order was raised against section 644 of the 
bill, which would have amended section 6402 of the Internal 
Revenue Code of 1986 by adding a new subsection that allows for 
the offset of federal tax refunds to collect delinquent state 
unemployment compensation overpayments. The chair ruled that 
the provision was in violation of Rule XXI, clause 2. The point 
of order was sustained, and the provision was stricken from the 
bill. [108-2, H7176]

September 14, 2004

            H.R. 5025, Transportation, Treasury, and Independent 
                    Agencies Appropriations Act, 2005
    A point of order was raised against section 643 of the 
bill, which would have amended section 453(j) of the Social 
Security Act to allow access to data in the National Directory 
of New Hires for use in collecting delinquent non-tax federal 
debt. The chair ruled that the provision was in violation of 
Rule XXI, clause 2. The point of order was sustained, and the 
provision was stricken from the bill. [108-2, H7176]

September 14, 2004

            H.R. 5025, Transportation, Treasury, and Independent 
                    Agencies Appropriations Act, 2005
    A point of order was raised against section 642 of the 
bill, which would have amended Title 31 of the U.S. Code to 
allow the Federal Government to collect debts that are more 
than 10 years old by withholding federal tax refunds or 
garnishing Social Security benefits. The chair ruled that the 
provision was in violation of Rule XXI, clause 2. The point of 
order was sustained, and the provision was stricken from the 
bill. [108-2, H7176]

September 9, 2004

            H.R. 5006, Departments of Labor, Health and Human Services, 
                    and Education, and Related Agencies Appropriations 
                    Act, 2005
    A point of order was raised against an amendment offered by 
Representative Brown (OH), which would have stopped the 
increase of Part B Medicare premiums, effectively leaving them 
at their current dollar amount. The chair ruled that the 
provision would provide new budget authority in excess of the 
suballocation provided by the Appropriations Committee, and 
therefore violated section 302(f) of the Congressional Budget 
Act of 1974. The point of order was sustained, and the 
amendment was not in order. [108-2, H6945]

September 8, 2004

            H.R. 5006, Departments of Labor, Health and Human Services, 
                    and Education, and Related Agencies Appropriations 
                    Act, 2005
    A point of order was raised against section 219(b) of the 
bill, which created a Medicare claims processing fee for 
duplicative or incorrect claims for Medicare Part A or B 
services. The chair ruled that the provision was in violation 
of Rule XXI. The point of order was conceded, sustained, and 
the provision was stricken from the bill. [108-2, H6836]

June 18, 2004

            H.R. 4567, Department of Homeland Security Appropriations 
                    Act, 2005
    A point of order was raised against an amendment offered by 
Representative Sherman, which would have limited the funds made 
available in this Act for processing the importation of any 
article which is the product of Iran. The chair ruled that the 
provision was in violation of clause 5(a) of Rule XXI. The 
point of order was sustained, and the amendment was not in 
order. [108-2, p. H4551]

July 10, 2003

            H.R. 2660, Departments of Labor, Health and Human Services, 
                    and Education, and Related Agencies Appropriations 
                    Act, 2004
    A point of order was raised against section 217(B) of the 
bill, which created a Medicare Claims Processing fee. An 
October 1, 2003, requirement assured a policy for providers to 
submit all Medicare claims electronically. Since most 
electronic billing systems eliminate inaccurate and duplicate 
claims, and because current law provided the proper small 
business exemption, the user fee was unnecessary. The chair 
ruled that the provision was in violation of Rule XXI, clause 
2(b). The point of order was conceded, sustained, and the 
provision was stricken from the bill. [108-1, p. H6560]

July 10, 2003

            H.R. 2660 Departments of Labor, Health and Human Services, 
                    and Education, and Related Agencies Appropriations 
                    Act, 2004
    A point of order was raised against an amendment offered by 
Representative Obey, which would have provided a 1-percentage 
add-on to the Federal assistance to every State for their 
Medicaid programs. This would have been paid for through a 
reduction in the size of the tax cut for persons who make more 
than $1 million a year. 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 conceded and 
sustained. [108-1, p. H6547]

July 23, 2003

            H.R. 2799, Departments of Commerce, Justice, and State, the 
                    Judiciary, and Related Agencies Appropriations, Act 
                    2004
    A point of order was raised against an amendment offered by 
Representative Levin, which would forbid expenditure of funds 
that would be used to negotiate free trade agreements that did 
not contain certain listed provisions, which imposed new duties 
that were not required by law and made the appropriations 
contingent upon the performance of said duties and on 
successful trade negotiations with other countries. The chair 
ruled that the provision was in violation of Rule XXI, clause 
2. The point of order was sustained. [108-1, p. H7337-7339]

September 4, 2003

            H.R. 2989, Transportation, Treasury, and Independent 
                    Agencies Appropriations Act, 2004
    A point of order was raised against portions of section 631 
of the bill, which would have amended the Trade Agreements Act 
of 1979. The provision exempted limitations on procurement. The 
chair ruled that the provision was in violation of Rule XXI, 
clause 2(b). The point of order was conceded, sustained and the 
language was stricken from the bill. [108-1, p. H7913]

September 4, 2003

            H.R. 2989, Transportation, Treasury, and Independent 
                    Agencies Appropriations Act, 2004
    A point of order was raised against the contents of Section 
164 of the bill, which amended the Buy America requirements for 
transit capital purchases of steel, iron, manufactured goods, 
and rolling stock. The chair ruled that these provisions were 
in violation of Rule XXI. The point of order was conceded, 
sustained, and the section was stricken from the bill. [108-1, 
p. H7912-7913]

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. [104-1, 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. H4531]

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. 
[H102-1, 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. OnNovember 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 108th 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 Virginia
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 108th Congress on December 7, 2004, 
there had been referred to the Committee a total of 1,541 
bills, representing 22.2 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 108TH CONGRESSES
----------------------------------------------------------------------------------------------------------------
                                                                       Referred to Committee
                                               Introduced in House       on Ways and Means         Percentage
----------------------------------------------------------------------------------------------------------------
90th Congress..............................                   24,227                    3,806               15.7
91st Congress..............................                   23,575                    3,442               14.6
92nd Congress..............................                   20,458                    3,157               15.4
93rd Congress..............................                   21,096                    3,370                 16
94th Congress..............................                   19,371                    3,747               19.3
95th Congress..............................                   17,800                    3,922                 22
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
102nd Congress.............................                    7,771                    1,972               25.4
103rd 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
108th Congress.............................                    6,953                    1,541               22.2
----------------------------------------------------------------------------------------------------------------

                           B. Public Hearings

    In the course of the 108th Congress, the full Committee on 
Ways and Means held public hearings on a total of 23 days, 
including 13 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 2004 and 2005 
budget proposals, health and welfare issues, and President 
Bush's trade agenda. The full Committee also reviewed programs 
under the Committee's jurisdiction for waste, fraud, and abuse 
and focused on such issues as legislation to expand coverage of 
prescription drugs in Medicare, and the implementation of free 
trade agreements with Chile, Singapore, Australia and Morocco.
    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 
108th Congress.

  TABLE 2.--PUBLIC HEARINGS CONDUCTED BY THE FULL COMMITTEE ON WAYS AND
                                  MEANS
------------------------------------------------------------------------
                                                       Number of
               Subject and Date               --------------------------
                                                  Days       Witnesses
------------------------------------------------------------------------
2003:
    President's Fiscal Year 2004 Budget with           1               1
     an Official of the U.S. Department of
     the Treasury, February 4................
    President's Fiscal Year 2004 Budget with           1               1
     Office of Management and Budget Director
     Daniels, February 5.....................
    President's Fiscal Year 2004 Budget with           1               1
     U.S. Department of Health and Human
     Services, February 6....................
    President Bush's Trade Agenda, February            1               1
     26......................................
    President's Economic Growth Proposals,             4              17
     March 4, 5, 6, and 11...................
    President's Fiscal Year 2004 Budget for            1               1
     the U.S. Department of Labor, March 12..
    Expanding Coverage of Prescription Drugs           1               5
     in Medicare, April 9....................
    Waste, Fraud, and Abuse, July 17.........          1               7
    United States-China Economic Relations             2              16
     and China's Role in the Global Economy,
     October 30 and 31.......................
                                              --------------------------
        Total for 2003.......................         13              50
                                              ==========================
2004:
    President's Fiscal Year 2005 Budget with           1               1
     U.S. Department of the Treasury
     Secretary John Snow, February 3.........
    President's Fiscal Year 2005 Budget for            1               1
     the U.S. Department of Health and Human
     Services, February 10...................
    President's Fiscal Year 2005 Budget with           1               1
     OMB Director Bolten, February 11........
    President's Fiscal Year 2005 Budget with           1               1
     an Official of the U.S. Department of
     the Treasury, February 11...............
    President's Fiscal Year 2005 Budget for            1               1
     the U.S. Department of Labor, March 4...
    President Bush's Trade Agenda, March 11..          1               1
    Board of Trustees 2004 Annual Reports,             2               6
     March 24 and April 1....................
    Implementation of the United States-               1               7
     Australia Free Trade Agreement, June 16.
    Implementation of the United States-               1               6
     Morocco Free Trade Agreement, July 7....
                                              --------------------------
        Total for 2004.......................         10              25
                                              ==========================
        Total for both sessions..............         23              75
------------------------------------------------------------------------

    The six Subcommittees of the Committee on Ways and Means 
were also very active in conducting public hearings during the 
108th 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


2003:
    Impact of the Section 201 Safeguard                1              27
     Action on Certain Steel Products, March
     26......................................
    Implementation of U.S. Bilateral Free              1              13
     Trade Agreements with Chile and
     Singapore, June 10......................
2004:
    Trade with sub-Saharan Africa and H.R.             1              11
     4103, the ``AGOA Acceleration Act of
     2004,'' April 29........................
    Customs Budget Authorizations and Other            1               8
     Customs Issues, June 17.................
    Trade Preferences for Haiti, September 22          1               7
                                              --------------------------
        Total................................          5              66
                                              ==========================
          SUBCOMMITTEE ON OVERSIGHT

2003:
    Free Electronic Filing and National                1               4
     Taxpayer Advocate Annual Report,
     February 13.............................
    2003 Tax Return Filing Season and the IRS          1               7
     Budget for Fiscal Year 2004, April 8....
    Use of Private Collection Agencies to              1               9
     Improve IRS Debt Collection, May 13.....
    Unemployment Fraud and Abuse, June 19....          1               4
    Non-Profit Credit Counseling                       1               7
     Organizations, November 20..............
2004:
    IRS Efforts to Modernize its Computer              1               5
     Systems, February 12....................
    Social Security Number and Individual              1               6
     Taxpayer Identification Number
     Mismatches and Misuse, March 10.........
    2004 Tax Return Filing Season and the IRS          1               8
     Budget for Fiscal Year 2005, March 30...
    Tax Simplification, June 15..............          1               8
    First Hearing in a Series on Tax                   1               9
     Exemption: Pricing Practices of
     Hospitals, June 22......................
    Review the IRS Enforcement of the                  1               6
     Reporting of Tip Income, July 15........
                                              --------------------------
        Total................................         11              73
                                              ==========================
            SUBCOMMITTEE ON HEALTH


2003:
    Medicare Regulatory and Contracting                1               9
     Reform, February 13.....................
    Eliminating Barriers to Chronic Care               1               5
     Management in Medicare, February 25.....
    MedPAC Report on Medicare Payment                  1               7
     Policies, March 6.......................
    Medicare Cost-Sharing and Medigap, May 1.          1               4
2004:
    Uninsured, March 9.......................          1               5
    New Frontiers in Quality Initiatives,              1               7
     March 18................................
    Medicare Drug Discount Card, April 1.....          1               5
    Medicare Chronic Care Improvement                  1               5
     Program, May 11.........................
    Health Care Information Technology, June           1               6
     17......................................
    Electronic Prescribing, July 22..........          1               4
                                              --------------------------
        Total................................         10              57
                                              ==========================
       SUBCOMMITTEE ON SOCIAL SECURITY


2003:
    H.R. 743, the ``Social Security                    1               6
     Protection Act of 2003,'' February 27...
    Social Security Provisions Affecting               1              12
     Public Employees, May 1.................
    Use and Misuse of Social Security                  1               5
     Numbers, July 10........................
    Social Security Administration Service             1               4
     Delivery Budget Plan, July 24...........
    Social Security Administration's                   1               8
     Management of the Office of Hearings and
     Appeals, September 25...................
2004:
    Field Hearing on Social Security's                 1               5
     Future, January 26......................
    Social Security Service Delivery Plan,             1               1
     February 26.............................
    Social Security Administration's                   1              11
     Management of the Ticket to Work
     Program, March 18.......................
    Enhancing Social Security Number Privacy,          1              11
     June 15.................................
    H.R. 4391, the ``Public Servant                    1               5
     Retirement Protection Act,'' July 20....
    Commissioner of Social Security's                  1              12
     Proposal to Improve the Disability
     Process, September 30...................
                                              --------------------------
        Total................................         11              80
                                              ==========================
       SUBCOMMITTEE ON HUMAN RESOURCES


2003:
    Review State Use of Federal Unemployment           1               6
     Funds, March 20.........................
    Implementation of the Adoption and Safe            1               8
     Families Act of 1997, April 8...........
    Unemployment Benefits and ``Returns to             1               4
     Work,'' April 10........................
    Bush Administration Foster Care Flexible           1               5
     Funding Proposal, June 11...............
    Examine Recent Failure to Protect Child            1               9
     Safety, November 6......................
    Improved Monitoring of Vulnerable                  1               7
     Children, November 19...................
2004:
    Review Federal and State Oversight of              1              18
     Child Welfare Programs, January 28......
    Supplemental Security Income Program,              1               1
     April 29................................
    State Efforts to Comply with Federal               1               4
     Child Welfare Reviews, May 13...........
    Supplemental Security Income Program, May          1               5
     20......................................
    Failure to Protect Child Safety, June 17.          1               4
    Examine Child Welfare Reform Proposals,            1               4
     July 13.................................
                                              --------------------------
        Total................................         12              75
                                              ==========================
   SUBCOMMITTEE ON SELECT REVENUE MEASURES


2003:
    Hearing on Challenges Facing Pension Plan          1               5
     Funding, April 30.......................
    Hearing on S Corporation Reforms, June 19          1               6
    Examining Pension Security and Defined             1               6
     Benefit Plans: The Bush Administration's
     Proposal to Replace the 30-Year Treasury
     Rate, July 15...........................
2004:
    Select Tax Issues, September 23..........          1              16
                                              --------------------------
        Total................................          4              33
------------------------------------------------------------------------

    As the foregoing statistics indicate, during the 108th 
Congress the full Committee and its six Subcommittees held 
public hearings aggregating a grand total of 76 days, during 
which time 459 witnesses testified. There was one field 
hearing, held by the Subcommittee on Social Security in Boca 
Raton, Florida.
    In addition, written comments were printed after having 
been requested and received by the Subcommittee on Oversight on 
taxpayer rights, H.R. 3625, the ``Department of the Treasury 
Inspector General Consolidation Act of 2003, and Legislation to 
Streamline the Student Aid Approval Process; the Subcommittee 
on Trade on the Extension of Permanent Normal Trade Relations 
Status to Armenia, Moldova, and Laos; and the full Committee on 
H.R. 3654, the ``Technical Corrections Act of 2003.''

                           C. Markup Sessions

    With respect to markup or business sessions during the 
108th Congress, the full Committee and its six Subcommittees 
were also very actively engaged. The full Committee held such 
sessions on 24 working days, usually both morning and afternoon 
sessions, and the Subcommittees an aggregate of 9 working days, 
making a grand total of 33 working days of markup or business 
sessions for the full Committee and its Subcommittees during 
the 108th Congress.

D. Number and Final Status of Bills Reported From the Committee on Ways 
                    and Means in the 108th Congress

    During the 108th Congress, the Committee reported to the 
House a total of 25 bills; 24 favorably and 1 adversely. There 
were 75 bills containing provisions within the purview of the 
Committee that were passed by the House; 41 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 108th 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            1801 to 1805, 1827
                                                                Republican.
Joseph Clay.........................  Pennsylvania...........  Jeffersonian            1805 to 1807
                                                                Republican.
George W. Campbell..................  Tennessee..............  Jeffersonian            1807 to 1809
                                                                Republican.
John W. Eppes.......................  Virginia...............  Jeffersonian            1809 to 1811
                                                                Republican.
Ezekiel Bacon.......................  Massachusetts..........  Jeffersonian            1811 to 1812
                                                                Republican.
Langdon Cheves......................  South Carolina.........  Jeffersonian            1812 to 1813
                                                                Republican.
John W. Eppes.......................  Virginia...............  Jeffersonian            1813 to 1815
                                                                Republican.
William Lowndes.....................  South Carolina.........  Jeffersonian            1815 to 1818
                                                                Republican.
Samuel Smith........................  Maryland...............  Jeffersonian            1818 to 1822
                                                                Republican.
Louis McLane........................  Delaware...............  Jeffersonian            1822 to 1827
                                                                Republican.
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............  2001-
----------------------------------------------------------------------------------------------------------------

           B. Table Showing Past Membership of the Committee


1. MEMBERS OF THE COMMITTEE ON WAYS AND MEANS FROM THE 1ST THROUGH THE 
                        108TH 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...........................                   97-108
    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..............................                  106-108
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
    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................................                  104-108
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............................                   94-108
    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................................                   104\1\
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
    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.........................             103, 104-\2\
    Amo Houghton...............................                  103-108
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-
    Stephanie Tubbs Jones......................                     108-
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..............................                   104\3\
    Lloyd Doggett..............................                     104-
    Kevin Brady................................                     107-
    Max Sandlin................................                      108
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
    Eric Cantor................................                     108-
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..............................                  104-108
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..........................                  103-108
    Paul Ryan..................................                    107-
------------------------------------------------------------------------
\1\ Appointed January 25, 1996.
\2\ Appointed January 25, 1996.
\3\ Appointed July 10, 1995.

                2. Committee Membership, 108th Congress
                      Committee on Ways and Means
                      one hundred eighth congress

 BILL THOMAS, California, Chairman

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

                                  
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