[House Report 109-736]
[From the U.S. Government Publishing Office]




                                                 Union Calendar No. 438


109th Congress 
 2d Session             HOUSE OF REPRESENTATIVES                 Report
                                                                109-736
_______________________________________________________________________


                     REPORT ON THE LEGISLATIVE AND

                          OVERSIGHT ACTIVITIES

                                 of the

                      COMMITTEE ON WAYS AND MEANS

                               during the

                             109TH CONGRESS




 December 22, 2006.--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
E. CLAY SHAW, Jr., Florida           CHARLES B. RANGEL, New York
NANCY L. JOHNSON, Connecticut        FORTNEY PETE STARK, California
WALLY HERGER, California             SANDER M. LEVIN, Michigan
JIM McCRERY, Louisiana               BENJAMIN L. CARDIN, Maryland
DAVE CAMP, Michigan                  JIM McDERMOTT, Washington
JIM RAMSTAD, Minnesota               JOHN LEWIS, Georgia
JIM NUSSLE, Iowa                     RICHARD E. NEAL, Massachusetts
SAM JOHNSON, Texas                   MICHAEL R. McNULTY, New York
PHIL ENGLISH, Pennsylvania           JOHN S. TANNER, Tennessee
J.D. HAYWORTH, Arizona               XAVIER BECERRA, California
JERRY WELLER, Illinois               LLOYD DOGGETT, Texas
KENNY C. HULSHOF, Missouri           EARL POMEROY, North Dakota
RON LEWIS, Kentucky                  STEPHANIE TUBBS JONES, Ohio
KEVIN BRADY, Texas                   MIKE THOMPSON, California
PAUL RYAN, Wisconsin                 JOHN B. LARSON, Connecticut
ERIC CANTOR, Virginia                RAHM EMANUEL, Illinois
JOHN LINDER, Georgia
BOB BEAUPREZ, Colorado
MELISSA HART, Pennsylvania
CHRIS CHOCOLA, Indiana
DEVIN NUNES, California
















                         LETTER OF TRANSMITTAL

                              ----------                              

                     U.S. House of Representatives,
                               Committee on Ways and Means,
                                 Washington, DC, December 22, 2006.
Hon. Karen Haas,
Office of the Clerk,
House of Representatives, Washington, DC.
    Dear Ms. Haas: 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 109th 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....................    29
        C. Legislative Review of Health Issues...................    52
        D. Legislative Review of Social Security Issues..........    57
        E. Legislative Review of Human Resources Issues..........    60
        F. Legislative Review of Debt Issues.....................    68
II. Oversight Activity Review........................................68
        A. Oversight Agenda......................................    68
        B. Actions taken and recommendations made with respect to 
            oversight plan.......................................    75
        C. Additional oversight activities, and any 
            recommendations or actions taken.....................   106
Appendix I. Jurisdiction of the Committee on Ways and Means......   109
Appendix II. Historical Note.....................................   130
Appendix III. Statistical Review of the Activities of the 
  Committee on Ways and Means....................................   136
Appendix IV. Chairmen of the Committee on Ways and Means and 
  Membership of the Committee from the 1st through the 109th 
  Congresses.....................................................   140
                                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 109th 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 109th 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 109th 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 109th 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 109th Congress is as follows:

                         Subcommittee on Trade

                  E. CLAY SHAW, Jr., Florida, Chairman
WALLY HERGER, California             BENJAMIN L. CARDIN, Maryland
PHIL ENGLISH, Pennsylvania           SANDER M. LEVIN, Michigan
JIM NUSSLE, Iowa                     WILLIAM J. JEFFERSON, Louisiana 
ROB PORTMAN, Ohio \2\                    \1\
JERRY WELLER, Illinois               JOHN S. TANNER, Tennessee
RON LEWIS, Kentucky                  JOHN B. LARSON, Connecticut
MARK FOLEY, Florida \3\              JIM McDERMOTT, Washington
KEVIN BRADY, Texas
THOMAS M. REYNOLDS, New York \4\

                       Subcommittee on Oversight

                    JIM RAMSTAD, Minnesota, Chairman
ERIC CANTOR, Virginia                JOHN LEWIS, Georgia
BOB BEAUPREZ, Colorado               EARL POMEROY, North Dakota
THOMAS M. REYNOLDS, New York \5\     MICHAEL R. McNULTY, New York
JOHN LINDER, Georgia                 JOHN S. TANNER, Tennessee
E. CLAY SHAW, Jr., Florida           CHARLES B. RANGEL, New York
SAM JOHNSON, Texas
ROB PORTMAN, Ohio \6\
DEVIN NUNES, California \7\
J.D. HAYWORTH, Arizona \8\

                         Subcommittee on Health

                NANCY L. JOHNSON, Connecticut, Chairman
JIM McCRERY, Louisiana               FORTNEY PETE STARK, California
SAM JOHNSON, Texas                   JOHN LEWIS, Georgia
DAVE CAMP, Michigan                  LLOYD DOGGETT, Texas
JIM RAMSTAD, Minnesota               MIKE THOMPSON, California
PHIL ENGLISH, Pennsylvania           RAHM EMANUEL, Illinois
J.D. HAYWORTH, Arizona
KENNY C. HULSHOF, Missouri

                    Subcommittee on Social Security

                    JIM McCRERY, Louisiana, Chairman
E. CLAY SHAW, Jr., Florida           SANDER M. LEVIN, Michigan
SAM JOHNSON, Texas                   EARL POMEROY, North Dakota
J.D. HAYWORTH, Arizona               XAVIER BECERRA, California
KENNY C. HULSHOF, Missouri           STEPHANIE TUBBS JONES, Ohio
RON LEWIS, Georgia                   RICHARD E. NEAL, Massachusetts
KEVIN BRADY, Texas
PAUL RYAN, Wisconsin

                    Subcommittee on Human Resources

                   WALLY HERGER, California, Chairman
NANCY L. JOHNSON, Connecticut        JIM McDERMOTT, Washington
BOB BEAUPREZ, Colorado               BENJAMIN L. CARDIN, Maryland
MELISSA A. HART, Pennsylvania        FORTNEY PETE STARK, California
CHRIS CHOCOLA, Indiana \9\           XAVIER BECERRA, California
JIM McCRERY, Louisiana               RAHM EMANUEL, Illinois
DAVE CAMP, Michigan
PHIL ENGLISH, Pennsylvania
DEVIN NUNES, California \10\

                Subcommittee on Select Revenue Measures

                     DAVE CAMP, Michigan, Chairman
JERRY WELLER, Illinois               MICHAEL R. McNULTY, New York
MARK FOLEY, Florida \11\             LLOYD DOGGETT, Texas
THOMAS M. REYNOLDS, New York         STEPHANIE TUBBS JONES, Ohio
ERIC CANTOR, Virginia                MIKE THOMPSON, California
JOHN LINDER, Georgia                 JOHN B. LARSON, Connecticut
MELISSA A. HART, Pennsylvania
CHRIS CHOCOLA, Indiana

----------
\1\ Pursuant to H. Res. 872, removed June 16, 2006.
\2\ Resigned April 29, 2005.
\3\ Resigned September 29, 2006.
\4\ Assigned to Subcommittee May 12, 2005.
\5\ Reassigned May 12, 2005.
\6\ Resigned April 29, 2005.
\7\ Assigned to Subcommittee May 12, 2005.
\8\ Assigned to Subcommittee May 12, 2005.
\9\ Reassigned May 12, 2005.
\10\ Assigned to Subcommittee May 12, 2005.
\11\ Resigned September 29, 2006.

    The Committee on Ways and Means submits its report on its 
legislative and oversight activities for the 109th 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 February 2, 2005, 
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-109th Congresses.






                                                 Union Calendar No. 438


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

                                _______
                                

               December 22, 2006.--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 109TH CONGRESS

a. Tsunami Relief (P.L. 109-1)

    On January 6, 2005, Chairman Thomas and Ranking Member 
Charles Rangel cosponsored H.R. 241 to accelerate the income 
tax benefits for charitable cash contributions for the relief 
of victims of the December 26, 2004 Indian Ocean tsunami. H.R. 
241 passed both the House and the Senate by unanimous consent 
on January 6, 2005. The President signed the bill into law on 
January 7, 2005 (P.L. 109-1).
    H.R. 241 allowed taxpayers to deduct on their 2004 tax 
return donations made in January 2005 for the relief of victims 
affected by the December 26, 2004 Indian Ocean tsunami.

b. Leaking Underground Storage Tank Trust Fund (P.L. 109-6)

    On March 14, 2005, Chairman Thomas introduced H.R. 1270 
which proposed to extend the leaking underground storage tank 
trust fund financing rate. The trust fund is financed with an 
excise tax of 0.1 cent per gallon that is imposed on the sale 
of gasoline, diesel, and other motor fuels. This tax was set to 
expire on March 31, 2005. The bill proposed to extend the trust 
fund's financing through September 30, 2005. The bill passed 
the House on March 16, 2005 under suspension of the rules by a 
vote of 431-1. The bill passed the Senate without amendment, by 
Unanimous Consent, on March 17, 2005, and was signed by the 
President on March 31, 2005 (P.L. 109-6).

c. FEMA Disaster Mitigation (P.L. 109-7)

    On March 7, 2005, Representative Mark Foley and 
Representative Bobby Jindal introduced H.R. 1134, which would 
prevent the Internal Revenue Service from taxing Americans who 
receive Federal Emergency Management Agency (FEMA) grants to 
take preventative measures against natural disasters. H.R. 1134 
passed the House of Representatives by a voice vote on March 
14, 2005. The Senate passed the bill, amended, by U.C. on April 
13, 2005, and the House agreed to the Senate amendment by U.C. 
on April 14, 2005. The President signed the bill into law on 
April 15, 2005 (P.L. 109-7).
    H.R. 1134 implemented the President's budget proposal for 
mitigation grants. In general, the bill removed the tax on any 
payments made to or for the benefit of the owner of any 
property for hazard mitigation, giving taxpayers the assurance 
that they could accept assistance without higher taxes.
    Taxpayers that receive disaster mitigation grants to 
improve their property are not permitted to increase the basis 
of their property due to the improvements made through the 
grants.

d. Surface Transportation Extension Act of 2005 (P.L. 109-14)

    Representative Don Young introduced H.R. 2566, the 
``Surface Transportation Extension Act of 2005,'' on May 24, 
2005 to extend transportation-related programs funded by the 
Highway Trust Fund. The next day, the House passed the bill 
under suspension of the rules by voice vote. On May 26, 2005, 
the Senate passed the bill without amendment by unanimous 
consent. The President signed the bill into law on May 31, 2004 
(P.L. 109-14).
    The bill provided an extension of highway, highway safety, 
motor carrier safety, transit, and other programs funded by the 
Highway Trust Fund pending enactment of a law reauthorizing the 
Transportation Equity Act for the 21st Century (TEA-21). The 
tax-related provisions in the bill extended 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, 2005 and extended the imposition of tax on 
the use of certain heavy vehicles through September 30, 2006.

e. Surface Transportation Extension Act of 2005, Part II (P.L. 109-20)

    Representative Don Young introduced H.R. 3104, the 
``Surface Transportation Extension Act of 2005, Part II'' on 
June 29, 2005 to extend certain transportation-related programs 
funded out of the Highway Trust Fund. The next day, the House 
passed the bill by U.C. and the Senate passed the bill without 
amendment by unanimous consent. The President signed the bill 
into law on July 1, 2005 (P.L. 109-20).
    The bill extended 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). The 
tax-related provisions in the bill extended 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 20, 2005.

f. Surface Transportation Extension Act of 2005, Part III (P.L. 109-35)

    Representative Don Young introduced H.R. 3332, the 
``Surface Transportation Extension Act of 2005, Part III,'' on 
July 19, 2005 to extend certain transportation-related programs 
funded out of the Highway Trust Fund. The House passed the bill 
on July 19, 2005 by unanimous consent, as did the Senate later 
that day. The President signed the bill into law on July 20, 
2005 (P.L. 109-35). The tax-related provisions extended 
authorization of the use of certain trust funds, as in Part II 
until July 21, 2005.

g. Surface Transportation Extension Act of 2005, Part IV (P.L. 109-37)

    Representative Don Young introduced H.R. 3377, the 
``Surface Transportation Extension Act of 2005, Part IV,'' on 
July 21, 2005 to extend certain transportation-related programs 
funded by the Highway Trust Fund. The House passed the bill 
that day by unanimous consent, as did the Senate later that 
day. The President signed the bill into law on July 22, 2005 
(P.L. 109-37). The tax-related provisions extended 
authorization of the use of certain trust funds, as in Parts II 
and III until July 27, 2005.

h. Surface Transportation Extension Act of 2005, Part V (P.L. 109-40)

    Representative Don Young introduced H.R. 3453, the 
``Surface Transportation Extension Act of 2005, Part V'' on 
July 27, 2005 to extend certain transportation-related programs 
funded by the Highway Trust Fund. That day, the House and 
Senate both passed the bill by unanimous consent. The President 
signed the bill into law on July 28, 2005 (P.L. 109-40). The 
tax-related provisions extended authorization of the use of 
certain trust funds, as in Parts II, III and IV until July 30, 
2005.

i. Surface Transportation Extension Act of 2005, Part VI (P.L. 109-42)

    Representative Don Young introduced H.R. 3512, the 
``Surface Transportation Extension Act of 2005, Part VI,'' on 
July 28, 2005 to extend certain transportation-related programs 
funded by the Highway Trust Fund. The next day, the House and 
Senate passed the bill by unanimous consent. The President 
signed the bill into law on July 30, 2005 (P.L. 109-42). The 
tax-related provisions extended authorization of the use of 
certain trust funds, as in Parts II, III and IV until August 
15, 2005.

j. Energy Policy Act of 2005 (P.L. 109-58)

    On April 12, 2005, Chairman Thomas introduced H.R. 1541, 
the ``Enhanced Energy Infrastructure and Technology Tax Act of 
2005.'' The full Committee held a markup of the bill on April 
13, 2005, ordered the bill favorably reported, as amended, by a 
vote of 26-11 (H. Rept. 109-45). The reported bill, H.R. 1541, 
was subsequently merged into H.R. 6, the ``Energy Policy Act of 
2005.'' H.R. 6 passed the House on April 21, 2005 by a vote of 
249-183. The Senate passed the bill, as amended, on June 28, 
2005, by a vote of 85-12. The two chambers agreed to go to 
conference, and a Conference Agreement was reached on July 27, 
2005 (H. Rept. 109-190). The House passed the Conference 
Agreement of the bill on July 28, 2005 by a vote of 275-156. 
The Senate approved the Conference Agreement the following day 
by a vote of 74-26 and it was signed by the President on August 
8, 2005.
    The House-passed bill contained tax incentives to advance 
energy policy in a number of areas. These included energy 
infrastructure initiatives, miscellaneous energy tax incentives 
and alternative minimum tax relief provisions.
    With respect to energy infrastructure initiatives, the 
House bill contained a number of tax incentives to encourage 
greater investment in needed energy infrastructure. For 
example, the bill provided for a reduced recovery period (15 
years) for assets used in the distribution of natural gas. 
Similarly, the bill also reduced the recovery period for assets 
used in the transmission of electricity from 20 to 15 years. 
Other infrastructure incentives included a reform of nuclear 
decommissioning rules and revised amortization of pollution 
control devices.
    With respect to miscellaneous energy tax incentive, the 
House bill included energy efficiency incentives such as a 
credit for installation of residential solar equipment, a 
credit for energy improvements to existing homes and advance 
lean burn vehicle tax credits.
    With respect to alternative minimum tax relief, the bill 
included several provisions to reduce the effect of the 
alternative minimum tax, including relief for taxpayers 
claiming energy-related tax credits.
    The Senate-passed bill, S. 10, contained fewer provisions 
related to energy infrastructure but did include numerous 
incentives for energy efficiency and for renewable energy. Most 
notably, the Senate passed bill included a provision expanding 
and extending for three years the Section 45 production tax 
credit for producing electricity from renewable energy sources 
(including wind, biomass, geothermal and others).
    The Conference Agreement as agreed to by the House and 
Senate and as signed into law by the President adopted many 
House provisions. Title XIII contains the agreed to tax 
provisions which are summarized as follows:
    Subtitle A of Title XIII of the Conference Agreement 
provides a number of incentives for investment in energy 
infrastructure and largely follows the House bill with certain 
exceptions. The Conference Agreement includes a new production 
tax credit for producing electricity from advanced nuclear 
power facilities. The Agreement also provides for a 2-year 
extension of the Section 45 renewable energy production tax 
credit (through December 31, 2007). This provision also 
modifies Section 45 to equalize the duration of the credit to 
10 years for all qualifying sources of renewable energy.
    Subtitle B of Title XIII of the Conference Agreement 
contains various provisions related to domestic fossil fuel 
security. These tax incentives include 50% expensing for 
qualifying expansions made to refinery facilities, a 
clarification to the recovery period for gas gathering 
pipelines, and a new business tax credit for producing fuel 
from coke or coke gas.
    Subtitle C of Title XIII of the Conference Agreement 
provides several energy efficiency and energy conservation tax 
incentives. These incentives include a 30% tax credit for 
installation of solar energy equipment businesses and in 
residences. The subtitle also includes a tax incentive for 
owners of energy efficient commercial buildings and for energy 
efficient new homes. The Conference Agreement also adopts, with 
modifications, the House provision which provides a tax credit 
for energy efficient improvements to existing homes.
    Subtitle D of Title XIII of the Conference Agreement 
contains several motor vehicle and fuels incentives. These 
incentives include an alternative motor vehicle credit which 
offers a tax credit to the purchaser of a hybrid or lean burn 
diesel vehicle. Other incentives are offered for installation 
of alternative refueling property and for producing biodiesel. 
A new credit was also created for renewable diesel. The 
renewable diesel credit is available for producing a fuel from 
biomass via a process involving thermal depolymizeration.
    Subtitle E of Title XIII of the Conference Agreement 
included other additional tax incentives including an enhanced 
research and development credit for energy research, a National 
Academy of Sciences study and report and a recycling study.
    The Conference Agreement, Subtitle F of Title XIII, 
contains several revenue raising provisions. These include a 
reinstatement of the Oil Spill Liability Trust Fund tax. The 
tax applies on April 1, 2007, or later, if the Secretary of the 
Treasury estimates that, as of the close of that quarter, the 
unobligated balance in the Oil Spill Liability Trust fund will 
be less that $2 billion. Also, the Leaking Underground Storage 
Tank Trust (LUST) Fund tax was extended through September 30, 
2011. The provision also clarifies that dyed fuel is subject to 
the LUST tax and without refund. Finally, there are provisions 
that modify the recapture rules for amortizable Section 197 
intangibles and that clarify the tire excise tax.

k. Safe, Accountable, Flexible, and Efficient Transportation Equity Act 
        of 2005 (P.L. 109-59)

    On March 1, 2005, Chairman Thomas introduced H.R. 996, the 
``Highway Reauthorization Tax Act of 2005.'' The bill was 
ordered favorably reported, as amended, out of the Committee on 
March 3, 2005 by voice vote (H. Rept. 109-13). The bill's 
provisions were incorporated into H.R. 3, the ``Transportation 
Equity Act: A Legacy for Users.'' H.R. 3 passed the House on 
March 10, 2005 by a vote of 417-9. The Senate passed H.R. 3, as 
amended, by a vote of 89-11. The Conference Report for the 
renamed bill, the ``Safe, Accountable, Flexible, and Efficient 
Transportation Equity Act of 2005,'' was filed on July 28, 2005 
(H. Rept. 109-203), and passed the House and the Senate the 
next day by votes of 412-8 and 91-4, respectively.
    In general, the revenue provisions of the ``Transportation 
Equity Act: A Legacy for Users'' as passed by the House would 
have extended the Highway Trust Fund expenditure authority and 
related expiring excise taxes.
    The excise taxes are imposed to finance the Federal Highway 
Trust Fund program. These taxes are highway motor fuels taxes 
(on gasoline, diesel fuel, kerosene, and special motor fuels), 
a retail sales tax on heavy highway vehicles, a manufacturers' 
excise tax on heavy vehicle tires, and an annual use tax on 
heavy vehicles.
    The excise tax rates on highway motor fuels are 18.3 cents 
per gallon for gasoline, 24.3 cents per gallon for diesel fuel 
and kerosene, and 18.3 cents per gallon for special motor 
fuels. With the exception of 4.3 cents per gallon of these 
Highway Trust Fund fuels tax rates, all of these taxes were 
scheduled to expire after September 30, 2005. The bill proposed 
to extend these taxes through September 30, 2011.
    The Highway Trust Fund also receives revenues from a 12-
percent excise tax imposed on the first retail sale of heavy 
highway vehicles, tractors, and trailers (generally, trucks 
having a gross vehicle weight in excess of 33,000 pounds and 
trailers having such a weight in excess of 26,000 pounds); an 
excise tax imposed at graduated rates on highway tires weighing 
more than 40 pounds; and an annual use tax imposed on highway 
vehicles having a taxable gross weight of 55,000 pounds or 
more. The maximum rate for this tax is $550 per year, imposed 
on vehicles having a taxable gross weight over 75,000 pounds. 
These taxes were scheduled to expire on September 30, 2005. The 
bill proposed to extend these taxes through September 30, 2011.
    Under present law, most of the highway motor fuels excise 
tax revenues and the non-fuel excise tax revenues discussed 
above are dedicated to the Highway Trust Fund. Expenditures 
from this Fund were authorized (subject to appropriations) 
through May 30, 2005. The bill proposed to extend the Highway 
Trust Fund expenditure authority through September 30, 2009.
    A separate Mass Transit Account exists within the Highway 
Trust Fund. Expenditures from the Account were authorized 
(subject to appropriations) through May 30, 2005. The bill 
proposed to extend the Account expenditure authority through 
September 30, 2009.
    The bill proposed to extend a special enforcement 
provision, the ``Basso rule,'' which prevents expenditure of 
Highway Trust Fund monies for purposes not authorized by the 
Internal Revenue Code. If such unapproved expenditures occur, 
no further excise tax receipts would be transferred to the 
Highway Trust Fund. Rather, the tax receipts will be retained 
in the General Fund.
    The Aquatic Resources Trust Fund (consisting of the Sport 
Fish Restoration Account and the Boat Safety Account) is funded 
by a portion of the receipts from the excise tax imposed on 
motorboat fuel taxes and small-engine fuel taxes. Most of these 
funds are first deposited into the Highway Trust Fund before 
being transferred to the Aquatic Resource Trust Fund. However, 
a portion of these funds are retained by the General Fund. 
Transfers from the Highway Trust Fund to the Aquatic Resources 
Trust Fund were authorized through September 30, 2005. 
Expenditures from the Boat Safety Account were authorized 
(subject to appropriations) through May 30, 2005. The bill 
proposed to authorize Highway Trust Fund transfers to the 
Aquatic Resources Trust Fund through September 30, 2009, extend 
the Boat Safety Account expenditure authority through September 
30, 2009, and eliminate the General Fund retention of motorboat 
fuel taxes and small-engine fuel taxes for taxes imposed after 
September 30, 2005.
    Two highway-related technical corrections were also 
included in the House-passed bill. Two provisions enacted in 
the American Jobs Creation Act of 2004 (P.L. 108-357) related 
to highway funding required technical correction. One 
correction was a conforming amendment to the Volumetric Ethanol 
Excise Tax Credit provision. The other correction clarified 
that the rate for jet fuel used in noncommercial aviation is 
4.3 cents per gallon and that users of aviation fuel in 
commercial aviation must register with the IRS in order for the 
4.3-cents-per-gallon rate to apply.
    The Conference Agreement included many of the provisions 
included in the House-passed bill and added several others, 
most of which were incorporated from the Senate-passed 
transportation bill. The revenue provisions of the Conference 
Agreement extended expenditure authority from the Highway Trust 
Fund and Aquatic Resources Trust Fund through September 30, 
2009. The related expiring excise taxes that finance the trust 
fund were extended through September 30, 2011. The Conference 
Agreement also required that unfunded highway authorizations 
exceed projected net Highway Trust Fund tax receipts for the 
48-month period beginning at the close of each fiscal year.
    The Conference Agreement also modified the gas guzzler tax 
(IRC Section 4064). This provision exempts limousines over 
6,000 pounds unloaded gross vehicle weight from the gas guzzler 
tax. It specifies that tractors weighing 19,500 pounds gross 
vehicle weight or less with a gross combined weight of 33,000 
pounds or less are exempt from the 12-percent excise tax on 
heavy highway vehicles. The Conference Agreement expanded the 
ethanol excise tax credit to include other alternative fuels 
that displace conventional petroleum products. Alternative 
fuels now include natural gas, liquid petroleum gas, P Series 
fuels, diesel from coal, and liquid hydrocarbons derived from 
biomass. The Conference Agreement also increased the tax on 
alternative fuels to the same level of taxes applied to 
gasoline and diesel. Alternative fuels are entitled to a tax 
credit equal to 50 cents per gallon.
    The Conference Agreement eliminated the Boat Safety Account 
and transforms the Sport Fish Restoration Account into the 
Sport Fish Restoration and Boating Trust Fund. It repealed the 
harbor maintenance tax on exports and caps the 10-percent 
excise tax on fishing rods at $10.
    The Agreement repealed the requirement that crop-dusters 
receive consent from farmers to apply for refunds and clarifies 
that travel to and from a farm is exempt use. This provision 
also extends the exemption of helicopters used in timber 
operations from the ticket and flight segment taxes to fixed-
wing aircraft. The Conference Agreement expanded the definition 
of a rural airport to include airports not connected by paved 
roads to another airport and having fewer than 100,000 
passengers on flights of at least 100 miles per year. The 
Conference Agreement also exempts from ticket taxes, 
transportation by a seaplane, with respect to any segment 
consisting of a takeoff from, and a landing on, water, but only 
if the places at which such takeoff and landing occur do not 
receive financial assistance from the Airport and Airways Trust 
Fund. For purposes of the fuel taxes, transportation by 
seaplane is treated as noncommercial aviation. Sightseeing 
flights were also exempted from the airline ticket tax.
    The Conference Agreement repealed the special occupational 
taxes relating to alcoholic beverages. It provided an income 
tax credit for distilled spirits wholesalers and for distilled 
spirits in control of State bailment warehouses for costs of 
carrying federal excise tax on bottled distilled spirits in 
inventory. The Conference Agreement allowed small distillers, 
brewers and winemakers to file excise taxes quarterly instead 
of every other week. Also, the excise tax on firearms was 
repealed for persons who manufacture, produce, and import less 
than 50 firearms, pistols, and revolvers during a calendar 
year.
    Several studies were commissioned by the Conference 
Agreement to examine ways to improve and reform collections of 
excise taxes. Also included is the establishment of a 
bipartisan Motor Fuel Tax Enforcement Advisory Commission to 
review fuel tax collections and to submit recommendations for 
improving enforcement of fuel tax collections and the 
establishment of a National Surface Transportation 
Infrastructure Financing Commission to report on the 
sufficiency of Highway Trust Fund revenues and alternative 
approaches for generating trust fund revenues. The Conference 
Agreement also directed the IRS to report on new technologies 
that can be used to reduce diesel fuel tax evasion, including 
the use of chemical markers and to conduct a study regarding 
the amount of fuel used by trucks to operate equipment that is 
not related to the transportation function of the vehicle. The 
latter study will propose options for exempting this fuel from 
tax, if administratively feasible.
    The Conference Agreement provided $15 billion of tax-exempt 
bond financing authority to finance highway projects and rail-
truck transfer facilities. The Conference Agreement also 
allowed the North Carolina Railroad Company to convert from a 
real estate investment trust to a state-owned tax exempt entity 
without incurring tax on built-in gains.
    The Conference Agreement extended the provision that 
prevents expenditure of Highway Trust Fund monies for purposes 
not authorized by the Internal Revenue Code. It also added a 
similar provision to address the LUST Trust Fund. If 
unauthorized expenditures from the LUST Trust Fund occur, no 
further excise tax receipts would be transferred to the LUST 
Trust Fund.
    The Conference Agreement included seven provisions to 
combat fuel fraud and increase Highway Trust Fund receipts. It 
taxed all removals of kerosene (other than directly into an 
aircraft) at 24.4 cents per gallon. If kerosene that is taxed 
at 24.4 cents is used for aviation, then a refund is available 
to reduce the tax to the applicable aviation fuel rate. The 
Secretary of Treasury will transfer from the Highway Trust Fund 
to the Airport and Airway Trust Fund amounts based on the 
aviation use of kerosene. Under the Conference Agreement, 
farmers must buy clear fuel and apply for refunds of tax paid 
on fuel used for farming. Farmers may continue to buy dyed 
exempt fuel. The Conference Agreement required credit card 
companies to register with the IRS and be the party responsible 
for claiming refunds if a qualified exempt entity used a credit 
card to purchase the fuel. Reregistration is required in the 
event of a change of ownership of a registered blender, 
pipeline operator, position holder, refiner, terminal operator 
and vessel operator. If the ownership changes, the new owners 
will require a new registration (except in case of publicly 
traded corporation). A $10,000 penalty will be imposed on those 
who fail to apply for a new registration. The Department of 
Homeland Security and the Department of Treasury are to 
transmit information pertaining to taxable fuels destined for 
importation into the United States to the IRS. The Conference 
Agreement required ships and barges to register for tax-exempt 
bulk transfers of fuel. It also imposed a $10,000 penalty for 
anyone who knowingly sells diesel which does not comply with 
Environmental Protection Agency low-sulfur diesel regulations.
    The two highway-related technical corrections from the 
House-passed bill are included in the Conference Agreement. A 
third technical correction was added to provide a conforming 
cross-reference with the ``Transportation and Equity Act for 
the 21st Century'' (P.L. 105-178).

l. Katrina Emergency Tax Relief Act of 2005 (P.L. 109-73)

    On September 14, 2005, Representative Jim McCrery 
introduced H.R. 3768, the ``Katrina Emergency Tax Relief Act of 
2005,'' to aid in the relief and recovery efforts pursuant to 
Hurricane Katrina. The next day, the House passed the bill 
under suspension of the rules by a voice vote. The Senate 
agreed to the bill with amendment later in the day. On 
September 21, 2005, the bill passed the House, as amended by 
the Senate, pursuant to House Resolution 454, by a vote of 422-
0. The Senate subsequently agreed to the House amendment to the 
Senate amendment by unanimous consent. The President signed the 
legislation on September 23, 2005 (P.L. 109-73).
    The Act included special rules for using retirement funds 
for relief relating to Hurricane Katrina, employment relief, 
charitable giving incentives, and other provisions to assist 
taxpayers affected by Hurricane Katrina. In general, those 
affected by the hurricane were defined by those located in the 
portion of the Hurricane Katrina disaster area determined by 
the President before September 14, 2005, under the Robert T. 
Stafford Disaster Relief and Emergency Assistance Act (P.L. 93-
288) by reason of Hurricane Katrina. Some provisions applied 
only to the ``core disaster area'' which is defined as that 
portion of the Hurricane disaster area determined by the 
President to warrant individual or individual and public 
assistance. The Hurricane Katrina disaster area includes areas 
within southern Louisiana, southern Mississippi, and the 
southwestern portion of Alabama.
    Title I of the ``Katrina Emergency Tax Relief Act of 2005'' 
provided for special rules for the use of retirement funds for 
relief related to Hurricane Katrina. In general, distributions 
from Individual Retirement Accounts and pensions are subject to 
a 10-percent penalty if they are made before a certain age. The 
penalty is intended to discourage individuals from withdrawing 
funds that are needed for retirement. To ease the financial 
burden faced by many families in the disaster area, the 
proposal allowed eligible individuals to withdraw a maximum of 
$100,000 from their IRAs and pensions without paying the 10-
percent penalty. Individuals eligible for the waiver may pay 
income tax on the distribution over three years. Income tax is 
not due if the distribution is repaid to the account within 
three years. The proposal also increased the limit on loans 
from pension plans from $50,000 to $100,000. To qualify for 
these provisions, an individual's principal place of abode on 
August 28, 2005 must have been located in the Hurricane Katrina 
disaster area and the individual must have sustained an 
economic loss by reason of such hurricane. Title I also allowed 
for the recontributions of withdrawals for home purchases 
cancelled due to Hurricane Katrina.
    Title II provided for employment related relief. Employers 
are allowed to claim the Work Opportunity Tax Credit (WOTC) if 
they hire individuals from certain target groups who are 
considered to face barriers to employment. The credit generally 
equals 40 percent of the first $6,000 of wages paid to the 
employee in the first year (i.e., the maximum credit is 
$2,400). The bill temporarily creates a new target group under 
the WOTC, called Hurricane Katrina employees. The credit was 
available to small employers (i.e., an average of 200 or fewer 
employees in the taxable year) whose business was inoperable as 
a result of damage sustained by Hurricane Katrina.
    In general, Title III changed certain rules regarding 
donations for charitable purposes. Individuals could deduct 
charitable donations up to 50 percent of their adjusted gross 
income. Deductions for charitable donations are further limited 
by the phase-out of itemized deductions. Under the bill, cash 
donations to charities were exempt from the 50-percent income 
limitation and the phase-out of itemized deductions if made 
before January 2006. Donations to supporting organizations and 
donor-advised funds did not qualify for this exclusion. 
Corporations may deduct charitable donations to charities up to 
10 percent of their taxable income. The bill waives the 10-
percent income limitation for cash donations related to 
Hurricane Katrina relief efforts if the donations are made 
before January 2006. The bill sets the mileage reimbursement 
rate for charitable work at 70 percent of the standard business 
mileage rate (48.5 cents per mile) through December 31, 2006. 
If the individual is a volunteer and is reimbursed for the use 
of the personal vehicle, the proposal ensures that the 
individual does not have to pay income tax on the 
reimbursement. This provision is effective through December 31, 
2006. C-corporations could deduct the cost of food inventory 
donations. The value of the deduction is equal to the lesser of 
two times the basis or basis plus one-half of the added-value. 
The proposal extends the current-law deduction for food 
donations to S-corporations, partnerships and sole proprietors 
through December 31, 2005. The bill also allows a special 
charitable deduction through the end of the 2005 calendar year 
for donations of educational books to public schools. Title III 
created a special tax deduction for individuals who provide 
rent-free housing to dislocated persons for at least 60 days. 
The deduction is $500 for each dislocated person housed in the 
individual's principal residence (up to a maximum of $2,000). 
The deduction can be claimed in either 2005 or 2006, but cannot 
be claimed in both years with respect to the same person.
    Title IV included additional tax relief provisions. The 
bill ensured that individuals affected by the hurricane are not 
taxed on personal debt forgiven related to the hurricane, if 
the debt was discharged before January 1, 2007. Also, the bill 
waived the 10-percent and $100 floors on the deduction for 
personal casualty losses attributable to Hurricane Katrina. The 
bill extended the January 3, 2006 deadline the IRS set as a 
result of Hurricane Katrina for filing tax returns and making 
tax payments until February 28, 2006. The bill waived the 
first-time homebuyer requirement for mortgage revenue bonds so 
that individuals whose homes were rendered uninhabitable by 
Hurricane Katrina can qualify for these low-interest rate 
mortgages through 2007. In addition, the proposal provides that 
up to $150,000 of the loan proceeds may be used to repair 
damaged homes. Insurance proceeds are not taxable if they are 
invested in replacement property within two years (with respect 
to damaged business property) or four years (with respect to 
damaged principal residences in Presidentially-declared 
disaster areas). The bill increased the reinvestment period to 
5 years as long as property in the disaster area was 
involuntarily converted as a result of Hurricane Katrina and 
the replacement property is located within the disaster area. 
The bill allows individuals the option of using their 2004 
income to calculate the child credit and the Earned Income Tax 
Credit on their 2005 tax returns. This special rule applies to 
individuals who were displaced from their principal residence 
by reason of Hurricane Katrina. Finally, the bill grants the 
Secretary of the Treasury authority to ensure that taxpayers do 
not lose tax benefits or experience a change in filing status 
in 2005 and 2006 due to temporary relocations by reason of 
Hurricane Katrina.

m. Sportfishing and Recreational Boating Safety Act of 2005 (P.L. 109-
        74)

    On September 6, 2005, Representative Don Young introduced 
H.R. 3649, the ``Sportfishing and Recreational Boating Safety 
Act of 2005.'' The bill extended authorization for recreational 
boating and boat safety expenditures, as well as enlarging 
authorized funding for the Coast Guard. The bill passed the 
House under suspension of the rules on September 13, 2005 by a 
vote of 401-1. On September 15, 2005, it passed the Senate by 
unanimous consent, with an amendment providing for technical 
corrections to other legislation. The House passed the bill as 
amended by the Senate on September 20, 2005. H.R. 3649 became 
Public Law 109-74 when it was signed by the President on 
September 29, 2005.

n. Gulf Opportunity Zone Act of 2005 (P.L. 109-135)

    The Gulf Opportunity Zone Act of 2005. (H.R. 4440) was 
introduced by Representative Jim McCrery (R-LA) on December 6, 
2005, passed the House by a vote of 414-4 on December 7, 2005, 
passed the Senate in amended form on December 15, 2005, and was 
subsequently passed by the House as amended by the Senate by 
unanimous consent on December 16, 2005, and signed by the 
President on December 22, 2005 (P.L. 109-135).
    As introduced and passed by the House, the bill expanded 
tax relief for regions affected by Hurricane Katrina and 
provided additional relief and incentives to rebuild for 
regions affected by Hurricanes Rita and Wilma as well as 
Hurricane Katrina. For areas within the Gulf Opportunity (GO) 
Zone affected by Hurricane Katrina, the bill provided 
additional tax exempt bond financing allocations of $2,500 per 
capita, allowed additional advance refunding of certain exempt 
bonds, authorized federal tax credit bonds and federally-
guaranteed bonds to aid local governments facing financing 
difficulty because of tax base losses, provided special low 
income housing credit allocations, and made available bonus 
depreciation and expanded small business expensing limits for 
capital investment. The bill also allowed expensing of 
brownfields remediation (including petroleum contamination), 
site demolition and clean up costs. The bill expanded the 
rehabilitation tax credit, doubled the limit on reforestation 
cost expensing, allowed a special net operating loss (NOL) 
carry back for small timber growers and provided special NOL 
treatment for public utility casualty losses and carry back 
rules for deductions related to GO Zone property. The bill 
clarified the treatment of traveling expenses incurred away 
from home and would have designated certain public debt as 
``Gulf Coast Recovery Bonds.''
    For taxpayers in areas affected by Hurricanes Rita and 
Wilma, the bill provided relief similar to what had earlier 
been extended for the relief of Katrina victims. Included were 
pension and retirement savings modifications providing greater 
access to withdrawals, employee retention tax incentives, 
suspension of income limits on charitable giving with regard to 
contributions for hurricane relief and suspension of casualty 
loss thresholds. Also included were administration relief 
provisions for filing and special procedures for claiming the 
Earned Income and refundable Child Credits.
    The Senate amendment to H.R. 4440 modified a number of the 
House bill's provisions, including eligibility standards 
related to low income housing credits and employee retention 
incentives. It also included an expanded New Markets Tax 
Credit, education tax incentives, a temporary exclusion for 
employer-provided housing in the GO Zone and a 30-percent 
employer credit for such housing. It extended a series of 
expiring tax provisions related to disclosure of return 
information and undercover operations. The amendment extending 
the law allowing combat pay to be included in income for the 
purposes of calculating the Earned Income Credit and modified 
the rules regarding suspension of interest and penalties when 
the IRS fails to contact the taxpayer. Many of the Senate 
modifications were preceded by related hurricane relief 
proposals included in S. 2020 as considered by the Senate 
earlier in the year.
    The final version of H.R. 4440 allowed a tax credit for 
investment in ``Gulf tax credit bonds.'' For this purpose, a 
``Gulf tax credit bond'' is defined as any bond: (1) that is 
issued by Alabama, Louisiana, or Mississippi after December 31, 
2005, and before January 1, 2007; (2) 95 percent of the 
proceeds of which are used to refinance existing bonds or make 
loans to localities for such refinancing; and (3) the maturity 
of which does not exceed 2 years. The bill requires States 
issuing ``Gulf tax credit bonds'' to pledge matching amounts 
equal to the face amount of such bonds. The bill limits the 
amount of eligible ``Gulf tax credit bonds'' to $200 billion 
for Louisiana, $100 billion for Mississippi, and $50 billion 
for Alabama.
    H.R. 4440 as enacted also included technical corrections on 
tax legislation originally included in H.R. 3376.

o. Tax Increase Prevention and Reconciliation Act of 2005 (P.L. 109-
        222)

    Chairman Thomas introduced H.R. 4297 on November 10, 2005 
to provide for reconciliation pursuant to the concurrent 
resolution on the budget for fiscal year 2006. The bill was 
ordered favorably reported by the Committee as amended as the 
``Tax Relief Extension Reconciliation Act of 2005'' by a 24-15 
vote on November 15, 2005 (H. Rept. 109-304). On December 8, 
2005, the bill passed the House on a 234-197 vote.
    Related legislation was introduced by Senator Grassley on 
November 16, 2005 as S. 2020. S. 2020 passed the Senate on 
November 18, 2005 by a vote of 64-33. The Conference Report on 
H.R. 4297 (H. Rept. 109-455) was filed on May 9, 2006, was 
agreed to by the House on May 10, 2006 by a recorded vote of 
244-185, and was agreed to by the Senate on May 11, 2006 by a 
recorded vote of 54-44. It was signed by the President on May 
17, 2006 (P.L. No. 109-222).
    Title I of the bill as passed by the Committee and the 
House of Representatives would have extended certain expiring 
provisions through 2006 without modification. These provisions 
were the deduction for State and local sales taxes; the 
deduction for qualified tuition and related expenses; parity in 
the application of certain limits to mental health benefits; 
availability of Archer medical savings accounts; the welfare-
to-work credit; authority to issue qualified zone academy 
bonds; the enhanced deduction for qualified computer donations; 
the exclusion of certain expenses of elementary and secondary 
school teachers from gross income; tax incentives for 
investment in the District of Columbia; the allowance for 
nonrefundable personal credits to be applied against the 
alternative minimum tax; fifteen-year depreciation for 
leasehold and restaurant improvements; 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; and, accelerated depreciation for business 
property on Indian reservations. The bill would have also 
extended the possessions tax credit for American Samoa. The 
bill would have also extended the Work Opportunity Tax Credit 
through 2006 and expand eligible hires by increasing the age 
limit for food stamp recipients from 25 to 35. The credit for 
increasing research activities would have also been extended 
through 2006 as well. In addition to this extension, the 
provision would have enhanced the credit by increasing the 
value of the alternative incremental credit and by adding a new 
alternative simplified credit.
    Title II of the bill would have extended certain provisions 
for 2 years. The saver's tax credit for eligible low-income 
individuals who make contributions to an IRA or qualified 
pension plan would have been extended through 2008. Through 
2009, small businesses would be allowed to expense up to 
$100,000 of investments in depreciable assets. The deduction 
phases out dollar-for-dollar to the extent the business's 
annual investments exceed $400,000. Under the bill, taxpayers 
would be allowed to expense the costs incurred in cleaning up 
certain contaminated sites (brownfields) through 2009 including 
sites contaminated by petroleum products. The active financing 
exception from the immediate taxation on foreign subsidiaries 
of U.S. companies under Subpart F would be extended for 2 
years. In addition to extending the active financing exception, 
the provision also provided a 3-year exception from Subpart F 
for certain cross-border payments of dividends, interest, 
rents, and royalties that are funded with active income that 
has not been repatriated. The bill would have extended for 2 
years the preferential tax rates for long-term capital gains 
and dividends which will other expire after 2008.
    Title III of included temporary simplifications of present 
law. It would have simplified the application of the active 
trade or business test to certain corporate distributions. 
Also, it would have treated environment cleanup settlement 
funds as governmentally owned (i.e., not subject to tax) if 
certain standards and requirements are met to encourage more 
companies to establish settlement funds devoted to 
environmental cleanup. It would have provided capital gains 
treatment for self-created musical works when these works are 
sold by the artist. It would have codified and extended the 
present IRS exemption of the Permanent University Fund from the 
tax-exempt bond arbitrage rules. The bill would have reduced 
the eligible weight threshold to elect tonnage taxation from 
10,000 to 6,000 deadweight tons. Finally, the bill would have 
expanded eligibility for the qualified veterans' mortgage bond 
programs that certain States use to finance affordable 
mortgages for veterans by repealing the requirement that 
veterans must have served before 1977.
    As enacted, Title I of the Conference Agreement on H.R. 
4297 includes: (1) a 2-year extension of enhanced Section 179 
expensing for small business (through 2009), (ii) a 2-year 
extension of reduced rates on capital gains and dividends 
(through 2010); (3) a 2-year extension of the Subpart F active 
financing exception (through 2008); and (4) enactment of the 
Subpart F controlled foreign corporation ``look-through'' rule 
for 5 years (through 2008).
    Title II contains additional provisions that apply through 
December 31, 2010. The provisions are: (1) clarification of 
taxation of certain settlement funds; (2) modification of the 
active business definition under Section 355; (3) modification 
of certain States' authority to issue veterans' mortgage bonds; 
(4) capital gains treatment of certain self-created musical 
works; (5) modification of special arbitrage rule for certain 
funds; (6) amortization of expenses incurred in creating or 
acquiring music or music copyrights; (7) modification of 
effective date of disregard of certain capital expenditures for 
purposes of qualified small issue bonds; and (8) modification 
of treatment of loans to qualified continuing care facilities.
    Title III contains alternative minimum tax relief 
provisions, including: (1) an increase in the alternative 
minimum tax exemption levels for 2006 to $62,550 for joint 
filers and $42,500 for single filers; and (2) the allowance of 
nonrefundable personal credits against regular and alternative 
minimum tax liability.
    Title IV changes the timing of certain corporate estimated 
tax installment payments.
    Title V contains revenue offset provisions, including: (1) 
application of earnings stripping rules to partners which are 
corporations; (2) reporting of interest on tax-exempt bonds; 
(3) 5-year amortization of geological and geophysical 
expenditures for certain major integrated oil companies; (4) 
application of Foreign Investment Real Property Tax Act 
(FIRPTA) to regulated investment companies; (5) treatment of 
distributions attributable to FIRPTA gains; (6) prevention of 
avoidance of tax on investments of foreign persons in U.S. real 
property through wash sale transactions; (7) denying 
application of Section 355 to distributions involving 
disqualified investment companies; (8) limits on loan and 
redemption requirements on pooled financing requirements; (9) 
requiring partial payments with submission of offers-in-
compromise; (10) an increase in the age of minor children whose 
unearned income is taxed as if parent's income; (11) imposition 
of withholding on certain payments made by government entities; 
(12) relaxation of 2006 limits on conversion to Roth IRAs; (13) 
repeal of Foreign Sales Corporation/Extra-Territorial Income 
(FSC/ETI) binding contract relief; (14) limiting wages 
attributable to domestic production taken into account in 
determining deduction for domestic production; (15) 
modification of exclusion for citizens living abroad; and (16) 
an excise tax on involvement of accommodation parties in tax 
shelter transactions.

p. Heroes Earned Retirement Opportunities Act (P.L. 109-227)

    On April 6, 2005, Representative Virginia Foxx introduced 
H.R. 1499. Under the bill, combat pay which is otherwise 
excluded from gross income could be used to determine the 
eligibility of contributions to retirement savings plans. H.R. 
1499 passed the House on May 23, 2005 by voice vote under 
suspension of the rules. On November 15, 2005, the bill was 
discharged by the Senate Finance Committee by unanimous consent 
and it passed the Senate with amendment to the effective date 
of the bill later that day. The House passed the bill as 
amended by the Senate with a further amendment (regarding 
certain contributions) on May 9, 2006. The Senate passed the 
bill as amended by the House on May 18, 2006, and the President 
signed the bill into law on May 29, 2006 (P.L. 109-227).

q. Pension Protection Act of 2006 (P.L. 109-280)

    Majority Leader John Boehner (for himself, Chairman Bill 
Thomas, Chairman Howard P. ``Buck'' McKeon, Representative John 
Kline, and Representative Dave Camp) introduced H.R. 4 on July 
28, 2006. The House passed the bill the same day by a vote of 
279-131. H.R. 4 went on to pass the Senate on August 3, 2006 by 
a vote of 93-5. The President signed H.R. 4 into law on August 
17, 2006 (P.L. 109-280). H.R. 4 reforms the single-employer and 
multiemployer pension funding rules, makes permanent certain 
retirement and saving incentives, and includes a number of new 
incentives for retirement savings.
    H.R. 4 was preceded in the House by action on H.R. 2830, 
the ``Pension Security and Transparency Act of 2005''. H.R 2830 
was introduced by Chairman Boehner of the House Committee on 
Education and the Workforce, Chairman Thomas and others on June 
9, 2005 and referred to the Committee on Education and the 
Workforce and the Committee on Ways and Means. Education and 
the Workforce ordered the bill reported with amendments on June 
30, 2005. Subsequently, Ways and Means marked up H.R. 2830 and 
ordered the bill reported as amended on November 9, 2005 by a 
recorded vote of 23-17. The Committees' bills were combined in 
a single text considered by the House under a rule and the 
revised bill was passed by the House on December 15, 2005 by a 
vote of 294-132. The House appointed conferees on H.R. 2830 and 
the Senate amendment to the bill on March 8, 2006. The 
conferees did not come to an agreement, but many aspects of the 
House and Senate bills were modified and included in H.R. 4.
    Like H.R. 4, H.R. 2830 included changes in funding 
requirements for single and multi-employer plans. In general, 
the bill would have required single employer defined benefit 
plans to fund up to 100 percent of their pension liabilities 
under revised measurement standards and established new funding 
shortfall amortization rules. Multiemployer plans would also 
have been required to amortize shortfalls over a fifteen year 
period and would be subject to funding new improvement 
requirements based on the pensions' being endangered (between 
65 and 80 percent funded) or critical (less than 65 percent 
funded). The bill also would have increased the maximum tax-
deductible fund limit for multiemployer plans from 100 percent 
to 140 percent of current liability to encourage additional 
employer contributions during profitable years.
    H.R. 2830 also would have clarified current law on hybrid 
pension plans by creating a uniform age discrimination standard 
for all defined benefit plans, improved notice and disclosure 
requirements for single and multiemployer plans, given 
employers the option of providing employees with access to 
professional investment advice and clarified the standards 
under which annuities can be offered. The bill would have 
allowed health plans to recover benefits paid out once the 
participant is reimbursed by a third party for the same 
expenses and allowed sponsors of certain 401(k) plans to modify 
investment options when a pension plan changes administrators 
or replaces existing investment options.
    As reported by the Committee on Ways and Means, H.R. 2830 
also included provisions to make pension and retirement savings 
provisions from the ``Economic Growth and Tax Relief 
Reconciliation Act of 2001'' (P.L. 107-16) permanent. Among 
other changes, it also would have made the Saver's Credit 
permanent and included proposals to enhance pension 
participation through automatic enrollment procedures. The bill 
as reported would have allowed combat pay to be counted when 
determining amounts which could be contributed to IRAs, 
permitted members of the National Guard and Reserves called to 
active duty to take distributions from retirement plans and 
accounts without paying the 10 percent early withdrawal penalty 
and eliminated the 10 percent penalty for participants in 
Deferred Retirement Option Plans (DROP plans). The bill would 
have allowed direct deposit of tax refunds into IRAs.
    As reported by the Committee on Ways and Means, H.R. 2830 
also included health care affordability provisions. It would 
have allowed creation of insurance products combining annuities 
and long-term care coverage and tax free distributions from 
government retirement plans for public safety officers for the 
purchase of health and long-term care coverage. Also included 
in H.R. 2830 was a provision permitting Flexible Spending 
Account (FSA) participants to roll over up to $500 per year in 
their FSA or to transfer that amount to a Health Savings 
Account (HSA).
    As enacted, H.R. 4 included pension reform provisions based 
on H.R. 2830 and Senate pension reform bill provisions.
    Title I reforms the funding rules for single-employer 
defined benefit pension plans. The bill provides a permanent 
interest rate based on a ``modified yield curve'' to measure 
current pension liabilities. Interest rates for measuring 
liabilities and asset values may be smoothed over 24 months. 
Employers are required to make contributions to meet a 100 
percent funding target (phased-in for certain plans that are 
well funded). Any funding shortfall must be amortized over 
seven years. The bill reforms the use of credit balances.
    Sponsors of certain plans that are ``at-risk'' must make 
accelerated contributions. A plan is deemed to be ``at-risk'' 
if, for the preceding plan year, (1) the plan's assets are less 
than 70 percent of its liabilities calculated using ``at-risk'' 
assumptions, and (2) the plan's assets are less than 80 percent 
of its liabilities calculated using non-at-risk assumptions. 
Plans that are ``at-risk'' must assume that during the next 10 
years participants will retire at the earliest date available 
under the plan and will elect the most expensive benefit 
available under the plan. Plans with fewer than 500 
participants are exempt from the ``at-risk'' rules.
    Title II of H.R. 4 reforms the funding rules for 
multiemployer defined benefit pension plans. The bill modifies 
the amortization periods applicable to multiemployer plans so 
the amortization period for most charges is 15 years. The bill 
requires the adoption of a funding improvement plan for 
multiemployer pension plans that are in ``endangered status'' 
and a rehabilitation plan for multiemployer plans that are in 
``critical status.'' The maximum deductible amount is increased 
to 140 percent of current liability. Benefit increases are 
prohibited if the increase causes the plan to fall below 65 
percent funded status.
    Title III extends for 2 years (2006 and 2007) the long-term 
corporate bond rate established under the Pension Funding 
Equity Act of 2004 (P.L. 108-218) as a temporary replacement 
for the 30-year Treasury rate in calculating pension funding 
and premium payments to the Pension Benefit Guaranty 
Corporation (PBGC). The bill changes the interest rate 
assumptions used in calculating and applying benefit 
limitations to lump sum distributions.
    Title IV modifies the calculation liability for purposes of 
the PBGC variable rate premium to reflect the changes to the 
general funding rules under the bill. The bill eliminates the 
full funding exception to the variable rate premium and makes 
permanent the termination premium enacted in the Deficit 
Reduction Act of 2005 (P.L. 109-171). In addition, Title IV 
establishes special funding rules for certain plans maintained 
by commercial airlines, limits the PBGC guarantee of certain 
shutdown benefits, authorizes the PBGC to pay interest on 
premium overpayment refunds, and makes the position of PBGC 
Director a Presidential appointment subject to Senate 
confirmation by both the Finance Committee and the Health, 
Education, Labor, and Pensions Committee.
    Title V requires both single and multiemployer defined 
benefit pension plans to include more detailed and specific 
information on their form 5500 filings. The bill also requires 
disclosure of termination information to plan participants, 
notice of freedom to divest employer securities, periodic 
pension benefit statements and notice to participants or 
beneficiaries of blackout periods.
    Title VI provides a prohibited transaction exemptions under 
Employee Retirement Income Security Act (ERISA) (P.L. 93-406) 
and the Code for the provision of certain investment advice. 
The bill provides prohibited transaction exemptions under ERISA 
and the Code for certain block trades. The bill provides a 
prohibited transaction exemption under ERISA and the Code for 
certain transactions that are corrected within 14 days of the 
date the disqualified person discovers, or reasonably should 
have discovered, the transaction was a prohibited transaction.
    Title VII clarifies the legal uncertainty associated with 
hybrid pension plans and provides that defined benefit plans 
are not age discriminatory if, as of any date, a participant's 
accrued benefit under the terms of the plan is equal to the 
accrued benefit of any similarly situated younger participant.
    Title VIII includes a number of tax incentives to enhance 
retirement savings, including: making permanent the pension and 
retirement saving provisions (including the saver's credit) in 
``The Economic Growth and Tax Relief Extension Act of 2001''; 
requiring the IRS to establish procedures for depositing tax 
refunds directly into an IRA; creating a safe harbor to 
encourage employers to offer automatic enrollment in employer-
sponsored defined contribution pension plans; and eliminating 
the aggregate limit on the use of excess funds from black lung 
trusts to be used to fund retiree health for coal miners. The 
bill included the modified long-term care annuity and public 
safety officers' distribution rules, but not the FSA rollover 
rule.
    H.R. 4 also includes several provisions related to Judges 
of the U.S. Tax Court. The bill includes provisions that 
provide cost-of-living adjustments to annuities paid to 
survivors of Tax Court judges and authorizes the Tax Court to 
pay the increased cost of life insurance for Tax Court judges. 
The bill also allows Tax Court judges to participate in the 
U.S. Government Thrift Savings Plan. The bill consolidates 
judicial review of collection due process activity in the Tax 
Court and clarifies that the Tax Court may authorize its 
special trial judges to enter decisions in employment tax cases 
that are subject to certain small case proceedings. The bill 
confirms that the Tax Court may apply equitable recoupment 
principles to the same extent as District Courts and the Court 
of Federal Claims. The bill also clarifies, in keeping with 
current Tax Court procedure, that the Tax Court is authorized 
to impose a $60 filing fee for all cases commenced by petition 
and expands the use of fees to provide services to pro se 
taxpayers.
    Title XII includes provisions related to exempt 
organizations by providing incentives for charitable giving and 
reforms for certain exempt organizations. These incentives and 
reforms had been previously passed by the Senate. In general, 
the charitable giving incentives are effective for 2 years 
through 2007, and the reforms are enacted on a permanent basis.
    The charitable giving incentives include a provision that 
provides an exclusion from gross income for certain 
distributions of up to $100,000 from a traditional individual 
retirement account (IRA) or a Roth IRA, which would otherwise 
be included in income. To qualify, the charitable distribution 
must be made to a tax-exempt organization to which deductible 
contributions can be made. Donations to supporting 
organizations and donor-advised funds do not qualify for this 
exclusion. For donations of food inventory, the bill extends to 
all trades and businesses an enhanced deduction equal to the 
lesser of (i) the taxpayer's basis plus one-half of the 
difference between fair market value and basis, and (ii) twice 
the taxpayer's basis in the contributed inventory. 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 provision extends the 
current-law provision that adds public schools to the list of 
eligible donees for the enhanced deduction for contributions of 
qualified book inventory by C corporations. H.R. 4 provides 
that payments received or accrued by certain exempt parent 
organizations from taxable controlled subsidiaries will not be 
treated as unrelated business taxable income. Exempt 
organizations are required to report these amounts received 
from controlled organizations. The bill raises the charitable 
deduction limit from 30 percent of adjusted gross income to 50 
percent of adjusted gross income for qualified conservation 
contributions. This charitable deduction limit is raised to 100 
percent of adjusted gross income for eligible farmers and 
ranchers. The bill would also exempt qualified blood collection 
organizations from paying certain excise taxes.
    The reforms related to tax-exempt organizations in H.R. 4 
require charitable organizations to report to the Secretary of 
the Treasury certain acquisitions of interests in certain 
insurance contracts for 2 years beginning on the date of 
enactment. The bill doubles the amount of excise taxes 
applicable to certain activities by charities, social welfare 
organizations, private foundations and exempt organization 
managers. The bill allows a charitable deduction with respect 
to easements concerning buildings located in a registered 
historic district. However, the easement must provide that no 
portion of the exterior of the building may be changed or 
altered in a manner inconsistent with the historical character 
of the exterior. This provision also clarifies that the 
charitable deduction is reduced if a rehabilitation tax credit 
has been claimed with respect to the donated property. The bill 
limits the basis for donated taxidermy property to the cost of 
preparing, stuffing and mounting an animal. The value of the 
deduction would be equal to the lesser of basis or fair market 
value. The bill requires the recovery of the tax benefit 
derived from the contribution of property with respect to which 
a fair market value deduction was claimed if the property is 
not used for an exempt purpose of the donee organization. The 
bill specifies that no deduction is allowed for charitable 
contributions of clothing and household items if such items are 
not in good used condition or better. In addition, the 
Secretary may deny a deduction for any item with minimal 
monetary value.
    The bill further requires that in the case of a charitable 
contribution of money, regardless of the amount, the donor must 
maintain a cancelled check, bank record or receipt from the 
donee organization showing the name of the donee organization, 
the date of the contribution, and the amount of the 
contribution. The bill also requires that charities receiving a 
fractional interest in an item of tangible personal property 
must take complete ownership of the item within 10 years or the 
death of the donor, whichever is first. In addition, the donee 
must have (i) taken possession of the item at least once during 
the 10-year period as long as the donor remains alive, and (ii) 
used the item for the organization's exempt purpose. The bill 
lowers the thresholds for imposing accuracy-related penalties 
on a taxpayer who claims a deduction for donated property for 
which a qualified appraisal is required. The provision also 
applies for purposes of estate tax appraisals and provides 
definitions of a qualified appraiser and qualified appraisals. 
The bill imposes certain requirements on tax-exempt 
organizations that offer credit counseling services, subject to 
a four-year transition rule to limit the allowable amount of 
debt management plan (DMP) income to 50 percent of revenues. 
This provision also imposes restrictions on organizations 
offering credit counseling services with respect to loans, 
fees, and solicitation of contributions from consumers 
receiving counseling. The bill amends the definition of gross 
investment income to include capital gains, notional principal 
contracts, annuities, and other substantially similar 
investment income.
    The bill clarifies the definition of a convention or 
association of churches and requires certain exempt 
organizations to file an annual notice with the IRS containing 
basic contact and financial information. The bill provides that 
upon written request by an appropriate state official, the 
Secretary may disclose information regarding organizations for 
which the IRS has denied or revoked tax-exempt status, certain 
other actions the IRS may have taken, and returns filed by tax-
exempt organizations. It also extends the present-law public 
disclosure requirements applicable to Form 990 to the unrelated 
business income tax returns of Section 501(c)(3) organizations.
    Under the bill, the Secretary will undertake a study on the 
organization and operation of donor-advised funds and of 
supporting organizations under the bill. The study will include 
an examination of requirements for determining if such 
organizations are operating in a manner consistent with the 
purposes or functions constituting the basis for their tax-
exempt status.
    Finally, H.R. 4 applies an excess benefits transaction tax 
on any grant, loan, compensation or other similar payments from 
a donor-advised fund to a person that with respect to such fund 
is a donor, donor adviser, or a related person, and from a 
supporting organization to a substantial contributor or a 
related person. This provision imposes excess business holdings 
rules on donor advised funds and Type III supporting 
organizations. Transition rules apply to the present holdings 
of donor-advised funds and supporting organizations. Supporting 
organizations that are functionally integrated with their 
charity would not be subject to any excess business holdings.

r. Tax Relief and Health Care Act of 2006 (H.R. 6111) \1\
---------------------------------------------------------------------------

    \1\ At the time of printing, the Public Law number for H.R. 6111 
was not available.
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    H.R. 6111, originally introduced by Congresswoman Ellen 
Tauscher (D-CA), was passed with an amendment by the House 
under suspension of the rules on December 5, 2006. The original 
bill gave the Tax Court jurisdiction over cases involving 
innocent spouse relief. The Senate passed the bill by unanimous 
consent with an amendment to the effective date and returned 
the bill to the House on December 7, 2006. On December 8, 2006, 
the House passed H.R. 6111 with an amendment by a vote of 367 
to 45 after defeating an amendment sponsored by Representative 
Ed Markey to the Senate amendment by a vote of 205-207. The 
Senate followed suit, passing the bill by a vote of 67-21 on 
December 9, 2006.
    As amended by the House on December 8, 2006 and passed by 
the Senate, H.R. 6111 included the House-passed legislation on 
Tax Court jurisdiction and a number of provisions previously 
passed by the House in H.R. 5970. Generally, the bill extended 
provisions of law such as the research and experimentation 
credit, the tuition deduction, deduction for sales taxes and 
the above the line deduction for teachers' out of pocket 
expenses for a period of two years beginning after 2005 as was 
done in H.R. 5970. The amended bill also included provisions 
making a number of Tax Increase Prevention and Reconciliation 
Act of 2005 (P.L. 109-222) provisions permanent as well as 
deductions for private mortgage insurance premiums, adjustments 
to the tonnage tax for Great Lakes shipping and other 
provisions which had been included in H.R. 5970. It included 
abandoned mine fund reforms from H.R. 5970 intended to address 
retiree health care needs.
    H.R. 6111 included several items not included in H.R. 5970. 
These provisions included adjustments in Medicare payments to 
physicians, extension of the Section 45 energy tax credits and 
certain other incentive programs originally enacted in the 
Energy Policy Act of 2005 (P.L. 109-58), 50 percent bonus 
depreciation for investment in cellulosic ethanol facilities, 
modification of tax credits for gasification of sub-bituminous 
coal, wilderness legislation pertaining to White Pine County, 
Nevada, authorizing exploration of certain areas of the Outer 
Continental Shelf by including the text of S. 3711 as passed by 
the Senate (with one technical amendment) and included the 
provisions of H.R. 6134, the Health Opportunity Empowerment Act 
of 2006 as ordered reported by the Committee on Ways and Means 
by a vote of 24-14 on September 27, 2006. The Health 
Opportunity Empowerment Act provisions modified contribution 
limits for HSAs, allow taxpayers to have an HSA though still 
technically eligible for FSAs benefits, revised the date for 
calculating cost of living adjustments, allow employers to make 
larger contributions to HSAs on behalf of lower-income workers 
and permitted rollovers of funds from Health Reimbursement 
Accounts, FSAs and IRAs. The bill included several trade-
related provisions, including modifications of the exemption 
from tariffs for cigarettes brought in for personal use, cotton 
shirt and trust fund tariff provisions and legislation to 
implement the U.S.-European Union accord on wine labeling.

s. Fallen Firefighters Assistance Tax Clarification Act of 2006 (H.R. 
        6429)

    Rep. Mary Bono introduced H.R. 6429 on December 8, 2006. 
The bill treats payments by charitable organizations to the 
families of those firefighters who died as result of the 
October 2006 Esperanza Incident fire in southern California as 
exempt payments. It passed the House by Unanimous Consent and 
passed the Senate without amendment by Unanimous Consent on 
December 9, 2006. The bill was signed by the President on 
December 21, 2006.\2\
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    \2\ At the time of printing, the Public Law number for H.R. 6429 
was not available.
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t. Leaking Underground Storage Tank Trust Fund (H.R. 6131)

    On September 21, 2006, Representative Chris Chocola 
introduced H.R. 6131, to permit certain expenditures from the 
Leaking Underground Storage Tank Trust. The bill passed the 
House under suspension of the rules by voice vote on September 
26, 2006. The bill passed the Senate without amendment by 
unanimous consent on December 8, 2006 and was signed by the 
President on December 20, 2006.\3\ The text of H.R. 6131 was 
also included in H.R. 6111 as enacted.
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    \3\ At the time of printing, the Public Law number for H.R. 6131 
was not available.
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                   2. TAX RELIEF AND OTHER PROPOSALS

a. Death Tax Repeal Permanency Act (H.R. 8)

    Representative Kenny Hulshof introduced H.R. 8 on February 
17, 2005. H.R. 8 would extend permanently the repeal of the 
estate tax. The bill passed the House on April 13, 2005 by a 
272-162 vote. The bill has not been considered by the Senate.

b. Rail Infrastructure Development and Expansion Act for the 21st 
        Century (RIDE 21) (H.R. 1631)

    H.R. 1631 was introduced by Chairman Don Young of the 
Committee on Transportation and Infrastructure on April 14, 
2005 and reported by that Committee on November 18, 2005. The 
bill was also referred to the Committee on Ways and Means, 
which reported the bill by voice vote as amended and without 
recommendation on February 3, 2006. The House has not 
considered the bill.
    During consideration of the bill on February 1, 2006, the 
Committee on Ways and Means struck provisions of the bill as 
introduced which authorized issuance of $12 billion in tax-
exempt bonds and another $12 billion in federal tax credit 
bonds for the purpose of financing high-speed rail 
infrastructure. The Committee struck these provisions, which 
were within its jurisdiction, in order to consider proposals to 
expand use of tax-preferred state and local financing in a more 
comprehensive manner. The Subcommittee on Select Revenue 
Measures subsequently held a hearing to examine tax-preferred 
bond policies on March 16, 2006.

c. Pension Security and Transparency Act of 2005 (H.R. 2830)

    The Committee acted to improve the security of pensions and 
retirement savings in 2005 by reporting provisions to enhance 
single and multi-employer defined benefit plan financing and 
through other measures. The Committee considered these matters 
during consideration of H.R. 2830, the ``Pension Security and 
Transparency Act of 2005.'' H.R. 2830 was introduced by 
Chairman John Boehner of the House Committee on Education and 
the Workforce, the Committee on Ways and Means Chairman Thomas 
and others on June 9, 2005 and referred to the Committee on 
Education and the Workforce and the Committee on Ways and 
Means. Education and the Workforce ordered the bill reported 
with amendments on June 30, 2005. Subsequently, Ways and Means 
marked up H.R. 2830 and ordered the bill reported as amended on 
November 9, 2005 by a record vote of 23-17. The Committees' 
bills were combined in a single text considered by the House 
under a rule and was passed by the House on December 15, 2005 
by a vote of 294-132. The House appointed conferees on H.R. 
2830 and the Senate amendment to the bill on March 8, 2006.
    Elements of H.R. 2830 as modified under agreement with 
Senate conferees were included in H.R. 4, the ``Pension 
Protection Act of 2006.'' For further information on H.R. 4 
(P.L. 109-280), see subsection q. Pension Protection Act of 
2006 (P.L. 109-280) in Bills Enacted into Law during the 109th 
Congress.

d. Tax Technical Corrections Act of 2005 (H.R. 3376)

    H.R. 3376, the ``Tax Technical Corrections Act of 2005,'' 
was introduced by Chairman Thomas on July 21, 2005. The 
Committee on Ways and Means issued a request for written 
comments from the public on August 31, 2005 (WMCP 109-8). 
Companion legislation was introduced by the Senate on the same 
day by Senator Grassley and Senator Baucus as S. 1447. Similar 
legislation was introduced in the 108th Congress as H.R. 5395 
and S. 3019.
    The bill makes technical and clerical corrections to the 
Internal Revenue Code, including corrections to provisions 
enacted by: (1) the American Jobs Creation Act of 2004; (2) the 
Working Families Tax Relief Act of 2004; (3) the Jobs and 
Growth Tax Relief Reconciliation Act of 2003; (4) the Victims 
of Terrorism Tax Relief Act of 2001; (5) the Transportation 
Equity Act for the 21st Century; and (6) the Taxpayer Relief 
Act of 1997.
    Provisions contained in H.R. 3376 were included in H.R. 
4440, the Gulf Opportunity Zone Act of 2005. H.R. 4440 was 
introduced by Rep. Jim McCrery (R-LA) on December 6, 2005, 
passed the House by a vote of 414-4 on December 7, 2005, passed 
the Senate with an amendment by unanimous consent on December 
16, 2005 and subsequently by the House as amended by the 
Senate, and signed by the President on December 22, 2005 as 
P.L. 109-135.

e. Stealth Tax Relief Act of 2005 (H.R. 4096)

    On October 20, 2005, Rep. Reynolds introduced H.R. 4096, 
the ``Stealth Tax Relief Act of 2005.'' Under the bill, the 
2005 alternative minimum tax exemption amount of $40,250 
($58,000 for joint returns) would be extended through 2006 and 
adjusted for inflation. The bill passed the House on December 
7, 2005 by a vote of 414-4 under suspension of the rules. The 
Senate did not act on H.R. 4096. The exemption amount was 
subsequently extended and increased in the Tax Increase 
Prevention and Reconciliation Act (P.L. 109-222).

f. Gulf Opportunity Zone Public Finance Relief Act of 2005 (H.R. 4337)

    H.R. 4337, the Gulf Opportunity Zone Public Finance Relief 
Act of 2005, was introduced by Representative Jefferson on 
November 16, 2005. The House passed the bill the same day by 
unanimous consent. Provisions were included later in H.R. 4440 
(P.L. 109-135).
    The bill would allow a tax credit for investment in ``Gulf 
tax credit bonds.'' For this purpose, a ``Gulf tax credit 
bond'' is defined as any bond: (1) that is issued by Alabama, 
Louisiana, or Mississippi after December 31, 2005, and before 
January 1, 2007; (2) 95 percent of the proceeds of which are 
used to refinance existing bonds or make loans to localities 
for such refinancing; and (3) the maturity of which does not 
exceed two years. The bill requires states issuing ``Gulf tax 
credit bonds'' to pledge matching amounts equal to the face 
amount of such bonds. The bill limits the amount of eligible 
``Gulf tax credit bonds'' to $200 billion for Louisiana, $100 
billion for Mississippi, and $50 billion for Alabama.
    The bill also allows for one additional advance refunding 
of outstanding bond obligations of Alabama, Louisiana, or 
Mississippi until December 31, 2010. The amount of bonds 
eligible for an advance refunding are limited to $4.5 billion 
for Louisiana, $2.25 billion for Mississippi, and $1.125 
billion for Alabama. The bill also provides for federal 
guarantees of up to $3 billion of the bonds issued by Alabama, 
Louisiana, or Mississippi before January 1, 2008, for the 
purpose of restoring lost revenue and funding infrastructure in 
areas affected by Hurricane Katrina. The bill limits such 
guarantee to 50 percent of bond principal. The ``Gulf tax 
credit bond'' and advance refunding provisions of H.R. 4337 
were included in H.R. 4440.

g. Tax Revision Act of 2005 (H.R. 4388)

    On November 18, 2005, Chairman Thomas introduced H.R. 4388, 
the ``Tax Revision Act of 2005'' to extend several tax 
provisions scheduled to expire at the end of 2005. Under 
suspension of the rules, the bill passed the House on December 
7, 2005 by a vote of 423-0. The Senate did not consider the 
bill.
    H.R. 4388 would extend several provisions for 1 year 
through 2006. These provisions are a special rule which allows 
military personnel the option of including their combat pay in 
the Earned Income Tax Credit calculation, the transfer to 
Puerto Rico and the Virgin Islands of $13.25 per-proof gallon 
of rum imported into the United States, and the authority for 
the IRS to use income recovered by undercover operations to pay 
additional expenses incurred by such operations. It also 
extends for one year (through 2006) the authority for the IRS 
to disclose certain tax information with certain other Federal 
and State authorities. This disclosure authority is limited to 
activities to the investigation of terrorist activities, to 
facilitate the repayment of student loans, and to facilitate 
combined employment tax reporting. H.R. 4388 also allows U.S. 
businesses operating in Puerto Rico to claim the domestic 
manufacturing deduction in 2006. This bill generally included 
many items which could not be included in budget 
reconciliation.

h. Permanent Estate Tax Relief Act of 2006 (H.R. 5638)

    Chairman Thomas introduced H.R. 5638 on June 19, 2006. The 
bill was considered by the House on June 22, 2006 and passed by 
a vote of 269-156.
    As introduced and passed by the House, H.R. 5638 provided 
for permanent relief from the estate and gift tax by reunifying 
the estate and gift tax for decedents dying or gifts made after 
December 31, 2009, providing a $5 million per decedent 
exemption amount, setting the tax rate at the long term capital 
gains rate for the first $25 million in cumulative taxable 
transfers and at twice the long term gains rate for amounts 
valued above $25 million. The exemption amounts would become 
portable: to the extent one spouse was unable to use the full 
$5 million exemption, the surviving spouse would be able to use 
the excess. The provisions also permanently repealed carryover 
basis, the credit for state death taxes, repealed qualified 
family owned business trusts and denied a deduction for state 
death taxes paid.
    H.R. 5638 also included a deduction for qualified timber 
gains. The deduction equaled the lesser of 60% of such gains or 
net capital gains and could be taken against both the regular 
tax and the alternative minimum tax.

i. Estate Tax and Extension of Tax Relief Act of 2006 (H.R. 5970)

    H.R. 5970, the ``Estate Tax and Extension of Tax Relief Act 
of 2006,'' was introduced by Chairman Thomas on July 28, 2006 
and passed by the House on July 29, 2006 by a vote of 230-180. 
The Senate was unable to proceed on the measure as a motion to 
invoke cloture failed on August 3, 2006 by a vote of 56 to 42.
    As introduced and passed by the House, H.R. 5970 provided 
permanent estate and gift relief similar to that contained in 
H.R. 5638. The bill reunified the estate and gift tax for 
decedents dying or gifts made after December 31, 2009, provided 
a $5 million per decedent exemption amount (increasing the 
exemption amount from $3.75 million to $5 million between 2010 
and 2015), setting the rate at the long term capital gains rate 
for the first $25 million in cumulative taxable transfers. 
Transfers in excess of $25 million would be subject to tax at 
rates of 40 percent in 2010, 38 percent in 2011, 36 percent in 
2012, 34% in 2013, 32 percent in 2014 and 30% in and after 
2015. The $25 million threshold be indexed against inflation 
beginning in 2016. The exemption amount for each spouse would 
become portable: to the extent one spouse was unable to use the 
full $5 million exemption, the surviving spouse would be able 
to use the excess. The provisions also permanently repealed 
carryover basis, the credit for state death taxes, repealed 
qualified family owned business trusts and denied a deduction 
for state death taxes paid.
    H.R. 5970 also included extensions of a number of tax 
provisions which had expired at the end of 2005 or which faced 
expiration in the near future. Among the provisions extended 
were a modified research and experimentation tax credit, 
reforms of the Work Opportunity Tax Credit and Welfare to Work 
Credit, the deduction for state sales taxes, investment and 
hiring incentives for activities on Indian reservations, the 
New Markets Tax Credit, the deduction for qualified tuition 
expenses, extension of Qualified Zone Academy Bonds, expensing 
of the cost of cleaning up ``brownfields'', 15-year 
depreciation for leasehold and restaurant improvements 
(extended to new restaurants), the cover over of $13.25 per 
proof gallon of rum excise taxes to Puerto Rico and the Virgin 
Islands, charitable contributions of computers (enhanced to 
cover self-constructed property), mental health parity and 
suspension of the 100 percent of net income limit on percentage 
depletion on marginal oil and gas wells. Most of these 
provisions had expired at the end of 2005 and would have been 
extended for 2 years under the bill.
    H.R. 5970 also included a 2-year economic development 
credit for American Samoa, revisions in tax incentives for 
rebuilding the New York Liberty Zone, an extension of bonus 
depreciation for businesses in the Gulf Opportunity Zone and 
extensions of certain IRS disclosure and undercover authority. 
As well, the bill provided a tax credit intended to relieve 
taxpayers facing AMT liability as a result of receiving 
incentive stock options, partial expensing for mine safety 
equipment and a tax credit for mine rescue team training, 
extended the manufacturing deduction under section 199 to 
Puerto Rico for 2 years, a 60 percent deduction for timber 
gains, a 1-year deduction for Private Mortgage Insurance 
premiums, federal tax credits for holders of Rural Renaissance 
Bonds, temporary restoration of the deduction for spousal 
travel and a series of other small provisions. The bill would 
also have made a number of temporary provisions included in the 
Tax Increase Prevention and Reconciliation Act of 2005 
permanent. Finally, the bill included reform of the Combined 
Benefit Fund (established by the Coal Industry Retiree Health 
Benefit Act of 1992), to permit certain operators to prepay 
their liability and provisions to increase the federal minimum 
wage.

j. Health Opportunity Patient Empowerment Act of 2006 (H.R. 6134)

    H.R. 6134, as introduced by Representative Eric Cantor and 
Representative Paul Ryan on September 21, 2006, was ordered 
reported by the Committee on Ways and Means as amended on 
September 29, 2006 by a vote of 24-14. The text of H.R. 6134 
was included in an amendment to the Tax Relief and Health Care 
Act (H.R. 6111) \4\ on December 8, 2006.
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    \4\ At the time of printing, the Public Law number for H.R. 6111 
was not available.
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    As introduced, H.R. 6134 included a number of modifications 
to HSAs. These modifications included setting the limit for HSA 
contributions at the statutory amount, allowing mid-year HSA 
enrollees to make the full annual contribution, accelerating 
announcement of indexed amounts for various HSA limits 
effective after in 2008, allowing employers to make higher 
contributions for non-highly compensated employees and 
permitting tax free rollover of funds from HRAs, health FSAs 
and IRAs. As modified by the Committee, the reported bill 
accelerated announcement of indexed amounts to take effect 
after 2007 and allowed taxpayers to make contributions to an 
HSA notwithstanding certain residual coverage under a FSA.

k. Hatian and African Trade (H.R. 6142)

    H.R. 6142 was introduced by Chairman Thomas on September 
21, 2005. The bill included the African Investment Incentive 
Act to provide investment incentives for U.S. companies in 
Africa and to extend modified third-country fabric benefits. 
Included in H.R. 6142 is a provision to provide a tax credit 
for new wages paid and capital investments in eligible African 
countries. The credit is available to U.S. corporations that 
invest in eligible African countries directly (through 
``branch'' operations) and indirectly (through controlled 
foreign corporations and partnerships). The credit is equal to 
60 percent of additional wages and fringe benefits and an 
amount (15 percent-65 percent) of depreciation on new 
investments in tangible property (other than vessels, aircraft 
and related containers). The credit can be carried forward for 
10 years. The credit (as well as any carryforward) expires for 
taxable years beginning after December 31, 2015.

l. Tax Technical Corrections Act of 2006 (H.R. 6264)

    H.R. 6264, the ``Tax Technical Corrections Act of 2006,'' 
was introduced by Chairman Thomas on September 29, 2006. On 
that same day, The Committee on Ways and means issued a public 
request for comments. Companion legislation was introduced by 
the Senate on the same day by Senator Grassley and Senator Max 
Baucus as S. 4026.
    The bill makes technical and clerical corrections to the 
Internal Revenue Code, including corrections to provisions 
enacted by: (1) the Tax Increase Prevention and Reconciliation 
Act of 2005; (2) the Energy Policy Act of 2005; (3) the 
American Jobs Creation Act of 2004; and (4) other tax 
legislation.

                          3. OTHER TAX MATTERS

a. Budget Hearings

    On February 8, 2005, the full Committee held a hearing to 
receive testimony from Secretary of the Treasury John Snow 
concerning programs within the President's FY 2006 budget 
within the jurisdiction of the Committee.
    On February 9, 2005, the full Committee received testimony 
from Joshua Bolten, Director of the Office of Management and 
Budget, concerning programs within the President's FY 2006 
budget within the jurisdiction of the Committee.
    On February 17, 2005, the full Committee held a hearing to 
receive testimony from Secretary of Health and Human Services 
Michael O. Leavitt concerning programs within the President's 
FY 2006 budget within the jurisdiction of the Committee.
    On March 16, 2005, the full Committee held a hearing to 
receive testimony from Secretary of Labor Elaine Chao regarding 
programs within the President's FY 2006 budget within the 
jurisdiction of the Committee.
    On February 8, 2005, the full Committee held a hearing to 
receive testimony from Secretary of Health and Human Services 
Michael O. Leavitt concerning programs within the President's 
FY 2007 budget within the jurisdiction of the Committee.
    On February 8, 2006, the full Committee received testimony 
from Joshua Bolten, Director of the Office of Management and 
Budget, concerning programs within the President's FY 2007 
budget within the jurisdiction of the Committee.
    On February 15, 2006, the full Committee held a hearing to 
receive testimony from Secretary of the Treasury John Snow 
concerning programs within the President's FY 2007 budget 
within the jurisdiction of the Committee.

b. Tax Reform Hearings (Full Committee)

    On June 8, 2005, the Committee received testimony on 
economic policy issues for consideration in reforming federal 
taxation from (i) Alan J. Auerbach, Professor of Economics and 
Law, University of California at Berkeley; (ii) William Beach, 
Director of the Center for Data Analysis, The Heritage 
Foundation; (iii) Leonard E. Burman, Co-Director of Tax Policy 
Center and Senior Fellow, Urban Institute; (iv) R. Glenn 
Hubbard, Dean, Columbia University Graduate School of Business; 
(v) and Joel B. Slemrod, Professor of Economics, University of 
Michigan.

c. Hearings Held During the 109th Congress by the Subcommittee on 
        Select Revenue Measures

            i. President's Proposal for Single-Employer Pension Funding 
                    Reform
    On March 8, 2005, the Subcommittee received testimony from 
representatives of the Departments of Labor and Treasury, the 
Pension Benefit Guarantee Corporation and representatives of 
the private sector concerning the need for pension funding 
reform and possible impacts of the funding reform proposals 
including in President Bush's FY 2007 budget submission.
            ii. Tax Credits for Electricity Production from Renewable 
                    Sources.
    The Subcommittee received testimony from the Department of 
Energy and private sector representatives on the economics and 
effects of incentives for the production of energy from 
renewable sources, including wind, solar, geothermal, and 
biomass, on May 24, 2005.
            iii. Funding rules for Multiemployer Defined Benefit Plans 
                    in H.R. 2830, the Pension Protection Act of 2005
    On June 28, 2005, the Subcommittee received testimony on 
the potential effects and proposed modifications of 
multiemployer pension funding rules included in H.R. 2830 to 
improve the solvency of such plans.
            iv. Proposals for Comprehensive Tax Reform.
    On July 28, 2005, the Subcommittee received testimony from 
Members of Congress concerning their proposals for 
restructuring federal taxes.
            v. Hearing on Miscellaneous Tax Proposals Offered by 
                    Members of the House of Representatives.
    The Subcommittee on November 16, 2005 received testimony on 
reform proposals from Members of the Congress.
            vi. Use of Tax-Preferred Bond Financing.
    On March 16, 2006, the Subcommittee received testimony from 
Members of Congress, the Department of Treasury, the 
Congressional Budget Office, a representative of state and 
local government and from the private sector concerning the 
economy value of tax-exempt financing and suggestions for 
reform.
            vii. Corporate Tax Reform.
    On May 9, 2006, the Subcommittee examined issues involved 
in possible corporate tax reforms including rate reduction, 
base broadening and whether tax accounting should conform to 
book accounting methods.
            viii. Impact of International Tax Reform on U.S. 
                    Competitiveness.
    The Subcommittee received testimony on June 22, 2006 
concerning trends in international taxation affecting U.S. 
businesses overseas and suggestions for reform.
            ix. Issues Relating To The Patenting Of Tax Advice.
    On July 13, 2006, the Subcommittee held a hearing to 
explore the effect on the federal tax system of issuing patents 
for tax compliance strategies.
            x. Hearing on Miscellaneous Tax Proposals Offered by 
                    Members of the House of Representatives.
    The Subcommittee on September 26, 2006 received testimony 
on reform proposals from Members of Congress.

                 B. Legislative Review of Trade Issues


       1. BILLS CONSIDERED UNDER TRADE PROMOTION AUTHORITY (TPA)

a. Legislation

            i. United States-Dominican Republic-Central America Free 
                    Trade Implementation Act
    On June 15, 2005, the Committee informally approved with 
amendment draft legislation to implement the Dominican 
Republic-Central America-United States Free Trade Agreement 
(DR-CAFTA), by a roll call vote of 25-16. The Committee 
conducted this informal markup to provide advice to the 
Administration on the implementing bill and Statement of 
Administrative Action. On June 23, 2005, Majority Leader DeLay 
introduced (by request) H.R. 3045, the ``Dominican Republic-
Central America-United States Free Trade Agreement 
Implementation Act,'' to be considered under TPA. On June 30, 
2005, the Committee held a formal markup session to consider 
H.R. 3045. The Committee approved the bill and favorably 
reported H.R. 3045 by a roll call vote of 25-16. Under TPA, 
amendments are not permitted to the bill once it has been 
introduced. On July 28, 2005, the House passed the bill by a 
recorded vote of 217-215. On June 30, 2005, before the House 
took action on H.R. 3045, the Senate passed S. 1307 by a 
recorded vote of 54-45. On July 28, 2005, the Senate passed 
H.R. 3045, without amendment, by a recorded vote of 55-45. The 
President signed the bill into law on August 2, 2005 (P.L. 109-
53).
    In 2006, Congress took up technical amendments to DR-CAFTA. 
On July 28, 2006, the House passed H.R. 4, the Pension 
Protection Act of 2006, which included a provision to extend 
narrow proclamation authority to the President to implement 
changes to certain apparel rules of origin with respect to 
countries that have entered into letters of understanding 
concerning pocketing material with the United States and, 
subject to certain Congressional notification and layover 
limitations, with respect to countries that will do so in the 
future. H.R. 4 passed the House by a recorded vote of 279-131. 
On August 3, 2006, the Senate passed H.R. 4, without amendment, 
by a recorded vote of 93-5. The President signed the bill into 
law on August 17, 2006 (P.L. 109-280).
            ii. United States-Bahrain Free Trade Implementation Act
    On November 3, 2005, the Committee informally approved 
draft legislation to implement the United States-Bahrain Free 
Trade Agreement, by a roll call vote of 23-0, with 15 Members 
voting present, without amendment. The Committee conducted this 
informal markup to provide advice to the Administration on the 
implementing bill and Statement of Administrative Action. On 
November 16, 2005, Acting Majority Leader Blunt introduced (by 
request) H.R. 4340, the ``United States-Bahrain Free Trade 
Agreement Implementation Act,'' to be considered under TPA. On 
November 18, 2005, the Committee held a formal mark-up session 
to consider H.R. 4340. The Committee approved the bill and 
favorably reported H.R. 4340 by voice vote. Under TPA, 
amendments are not permitted to the bill once it has been 
introduced. On December 7, 2005, the House passed the bill by a 
recorded vote of 327-95. On December 13, 2005, the Senate 
passed H.R. 4340 by unanimous consent. The President signed the 
bill into law on January 11, 2006 (P.L. 109-169).
            iii. United States-Oman Free Trade Implementation Act
    On May 10, 2006, the Committee informally approved draft 
legislation to implement the United States-Oman Free Trade 
Agreement, by a roll call vote of 23-11, with 3 Members voting 
present, without amendment. The Committee conducted this 
informal markup to provide advice to the Administration on the 
implementing bill and Statement of Administrative Action. On 
June 26, 2006, Majority Leader Boehner introduced (by request) 
H.R. 5684, the ``United States-Oman Free Trade Agreement 
Implementation Act,'' to be considered under TPA. On June 29, 
2006, the Committee held a formal markup session to consider 
H.R. 5684. The Committee approved the bill and favorably 
reported H.R. 5684 by a roll call vote of 23-15. Under TPA, 
amendments are not permitted. On June 29, 2006, before the 
House took action on H.R. 5684, the Senate passed S. 3569 by a 
recorded vote of 60-34. On July 20, 2006, the House passed the 
bill by a recorded vote of 221-205. On September 19, 2006, the 
Senate passed H.R. 5684 by a recorded vote of 62-32. The 
President signed the bill into law on September 26, 2006 (P.L. 
109-283).
            iv. United States-Peru Trade Promotion Agreement 
                    Implementation Act
    On July 20, 2006, the Committee informally approved draft 
legislation to implement the United States-Peru Trade Promotion 
Agreement, by a roll call vote of 23-13, without amendment. The 
Committee conducted this informal markup to provide advice to 
the Administration on the implementing bill and Statement of 
Administrative Action. No further action was taken in the 109th 
Congress.

b. Hearings

            i. DR-CAFTA
    On April 21, 2005, the Committee held a hearing on 
implementation of the U.S. bilateral free trade agreement with 
El Salvador, Guatemala, Honduras, Nicaragua, Costa Rica, and 
the Dominican Republic (DR-CAFTA). The agreement was signed on 
May 28, 2004, by U.S. Trade Representative Robert Zoellick and 
Ministers of El Salvador, Guatemala, Honduras, Nicaragua, and 
Costa Rica. Witnesses at the hearing included Deputy U.S. Trade 
Representative Peter Allgeier and representatives from the 
business community, labor unions, and non-governmental 
organizations. The hearing focused on Congressional 
consideration of the DR-CAFTA and the benefits that the 
agreement would bring to American businesses, farmers, workers, 
and the U.S. economy.
            ii. Bahrain
    On September 29, 2005, the Committee held a hearing on 
implementation of the U.S. bilateral free trade agreement with 
Bahrain. The agreement was signed on September 14, 2004, by 
U.S. Trade Representative Zoellick and Bahrain Minister of 
Finance and National Economy Abdulla Hassan Saif. Witnesses at 
the hearing included Assistant U.S. Trade Representative Shaun 
Donnelly, as well as representatives from the private sector. 
The hearing focused on Congressional consideration of the 
United States-Bahrain FTA and the benefits that the agreement 
would bring to American businesses, farmers, workers, 
consumers, and the U.S. economy.
            iii. Oman
    On April 5, 2006, the Committee held a hearing on 
implementation of the U.S. bilateral free trade agreement with 
Oman. The agreement was signed on January 19, 2006, by U.S. 
Trade Representative Rob Portman and Omani Minister of Commerce 
and Industry Maqbool bin Ali Sultan. Witnesses at the hearing 
included Deputy U.S. Trade Representative Susan Schwab, as well 
as representatives from the private sector. The hearing focused 
on Congressional consideration of the United States-Oman FTA 
and the benefits that the agreement would bring to American 
businesses, farmers, workers, consumers, and the U.S. economy, 
as well as the U.S. strategic relationship in the region.
            iv. Peru
    On July 12, 2006, the Committee held a hearing on 
implementation of the United States bilateral free trade 
agreement with Peru. The agreement was signed on April 12, 
2006, by U.S. Trade Representative Portman and Peruvian 
Minister of Foreign Trade and Tourism Alfredo Ferrero Diez 
Canseco. Witnesses at the hearing included Assistant United 
States Trade Representative for the Americas, Everett 
Eissenstat, as well as representatives from the private sector 
and non-governmental organizations. The hearing focused on 
Congressional consideration of the United States-Peru Trade 
Promotion Agreement and the benefits that the agreement would 
bring to American businesses, farmers, workers, consumers, and 
the U.S. economy, as well as to U.S. trade relations with our 
neighbors in the hemisphere.

c. Reports

    In August 2004, the Committee received from the 
International Trade Commission (ITC) the report entitled 
``U.S.-Central America-Dominican Republic Free Trade Agreement: 
Potential Economy-wide 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 
Economy-wide and Selected Sectoral Effects'' (Investigation No. 
TA-2104-15 (Publication 3726)).
    In April 2005, the Committee received from the ITC the 
report entitled ``U.S.-Morocco Free Trade Agreement: Effect of 
Modifications to the U.S.-Morocco Free Trade Agreement'' 
(Investigation No. Morocco FTA 103-11 (Publication 3774, April 
2005)).
    In February 2006, the Committee received from the ITC the 
report entitled ``U.S.-Oman Free Trade Agreement: Potential 
Economy-wide and Selected Sectoral Effects'' (Investigation No. 
TA-2104-19 (Publication 3837)).
    In June 2006, the Committee received from the ITC the 
report entitled ``U.S.-Peru Trade Promotion Agreement: 
Potential Economy-wide and Selected Sectoral Effects'' 
(Investigation No. TA-2104-20 (Publication 3855)).

                   2. WORLD TRADE ORGANIZATION (WTO)

a. Legislation

    On March 2, 2005, Congressman Sanders introduced H.J. Res. 
27, a resolution to withdraw Congressional approval of the 
agreement establishing the WTO. Under the Uruguay Round 
Agreements Act (P.L. 103-465), the resolution is privileged and 
subject to specialized procedures. The resolution is not 
amendable and must be considered on the floor within 45 days of 
introduction. The resolution was referred to the Committee on 
Ways and Means, which adversely reported the resolution on May 
26, 2005, by voice vote. On June 9, 2005, the House considered 
the resolution and failed to pass it, by a recorded vote of 86-
338 with 1 member voting present. No further action was taken 
on the resolution in the 109th Congress.

b. Hearings

    On May 17, 2005, the Subcommittee on Trade held a hearing 
to review future prospects for U.S. participation in the WTO. 
Witnesses at the hearing included Deputy U.S. Trade 
Representative Peter Allgeier and representatives from the 
business community, labor unions, and the agriculture sector. 
The hearing focused on overall results of U.S. membership in 
the WTO and General Agreement on Tariffs and Trade (GATT); 
whether future participation of the United States in the WTO 
and the multilateral trading system can be expected to benefit 
Americans; and prospects for increased economic opportunities 
for U.S. farmers, workers, and consumers in the Doha Round.

c. Hong Kong Staff Delegation (December 14-18, 2005)

    On December 14-18, 2005, a bipartisan delegation of staff 
from the Committee on Ways and Means and the Senate Committee 
on Finance attended the WTO's Ministerial Conference in Hong 
Kong, consulted with U.S. trade officials during the 
negotiations, and discussed trade issues with foreign delegates 
and WTO officials. Staff met with foreign delegations, U.S. 
business representatives, and WTO Secretariat staff. 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.

d. Reports

    In May 2005, the Committee received from the Government 
Accountability Office (GAO), the report entitled ``World Trade 
Organization: Global Trade Talks Back on Track, but 
Considerable Work Needed to Fulfill Ambitious Objectives'' 
(GAO-05-538). As a follow up to its 2004 report on the problems 
with the WTO Cancun Ministerial, the GAO reported on the 
breakthrough made in July 2005 to create a framework for 
further negotiations. The GAO also noted the uneven progress 
made in the various trade negotiating groups given the focus on 
agriculture by many key countries. The report also described 
the continuing difficulties for future progress such as the 
complexity of the agenda and competing goals between developed 
and developing countries. The GAO also highlighted the timing 
constraints for the negotiations because of the expiration of 
trade negotiating authority for the President in July 2007. The 
GAO continues to monitor negotiations for the Committee.
    In August 2005, the Committee received from the 
Congressional Budget Office the paper entitled ``Policies That 
Distort World Agricultural Trade: Prevalence and Magnitude.'' 
The paper reviewed the effects of trade distorting policies 
including hindrances to market access, various forms of 
domestic subsidy programs, and export subsidization.
    In December 2005, the Committee received from the 
Congressional Budget Office the paper entitled ``The Effects of 
Liberalizing World Agricultural Trade: A Survey.'' The paper 
reviewed the economic literature on the total cost of policies 
that distort agricultural trade, the potential impact of the 
Doha Round on eliminating distortions, and the distribution of 
benefits among key agriculture producing countries.
    In April 2006, the Committee received from the GAO the 
report entitled ``World Trade Organization: Limited Progress at 
Hong Kong Ministerial Clouds Prospects for Doha Agreement'' 
(GAO-06-596).

                    3. BILATERAL AND REGIONAL ISSUES

a. Free Trade Agreements

            i. Completed Agreements

Dominican Republic-Central America Free Trade Agreement

    Negotiations for the U.S.-Dominican Republican-Central 
America Free Trade Agreement were completed in May 2004. As 
noted above, the President signed the implementing legislation 
into law on August 2, 2005 (P.L. 109-53).

Bahrain

    Negotiations for the U.S.-Bahrain Free Trade Agreement were 
completed in May 2004. As noted above, the President signed the 
implementing legislation into law on January 11, 2006 (P.L. 
109-169).

Oman

    Negotiations for the U.S.-Oman Free Trade Agreement were 
completed in October 2005. As noted above, the President signed 
the bill into law on September 26, 2006 (P.L. 109-283).

Peru

    On November 18, 2003, U.S. Trade Representative Zoellick 
formally notified Congress of the Administration's intent to 
initiate negotiations for a free trade agreement with Colombia, 
Ecuador, and Peru. Negotiations began in May 2004 with 
Colombia, Ecuador, and Peru. Bolivia was an observer in the 
negotiations. On December 7, 2005, the United States and Peru 
concluded FTA negotiations. On January 6, 2006, President Bush 
officially notified Congress of his intent to sign the U.S.-
Peru Trade Promotion Agreement. The agreement was signed on 
April 12, 2006. See above for discussion of legislative 
activity related to the U.S.-Peru Trade Promotion Agreement.

Colombia

    As noted above, on November 18, 2003, U.S. Trade 
Representative Zoellick formally notified Congress of the 
Administration's intent to initiate negotiations for a free 
trade agreement with Colombia, Ecuador, and Peru. Negotiations 
began in May 2004 with Colombia, Ecuador, and Peru. On February 
27, 2006, the United States and Colombia concluded FTA 
negotiations. On August 24, 2006, President Bush officially 
notified Congress of his intent to sign the U.S.-Colombia Trade 
Promotion Agreement. The agreement was signed on November 22, 
2006.
            ii. Ongoing Negotiations

Southern African Customs Union (SACU)

    Pursuant to Sense of Congress language in the Africa Growth 
and Opportunities Act of 2000 (P.L. 106-200), on November 4, 
2002, U.S. Trade Representative Zoellick formally notified 
Congress of the Administration's intent to initiate 
negotiations for a 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 and were suspended in 2006 due to lack of progress.

Korea

    On February 2, 2006, U.S. Trade Representative Portman 
formally notified Congress of the Administration's intent to 
initiate negotiations for a free trade agreement with the 
Republic of Korea. Negotiations began in June 2006.

Malaysia

    On March 8, 2006, U.S. Trade Representative Portman 
formally notified Congress of the Administration's intent to 
initiate negotiations for a free trade agreement with Malaysia. 
Negotiations were launched in June 2006.

Ecuador

    As noted above, on November 18, 2003, the U.S. Trade 
Representative Zoellick formally notified Congress of the 
Administration's intent to initiate negotiations for a free 
trade agreement with Colombia, Ecuador, and Peru. Negotiations 
began in May 2004 with Colombia, Ecuador, and Peru. See 
discussion above concerning the conclusion of negotiations with 
Peru and Colombia. The United States and Ecuador suspended 
negotiations in May 2006.

Panama

    On November 18, 2003, U.S. Trade Representative Zoellick 
formally notified Congress of the Administration's intent to 
initiate negotiations for a free trade agreement with Panama. 
Negotiations were launched on April 26, 2004.

Thailand

    On February 12, 2004, U.S. Trade Representative Zoellick 
formally notified Congress of the Administration's intent to 
initiate negotiations for a free trade agreement with Thailand. 
Negotiations began in June 2004, and the sixth round was held 
in January 2006. However, FTA talks were suspended after a 
political crisis enveloped Thailand in April 2006. In September 
2006, a military coup ousted the sitting government. The United 
States has stated that the FTA talks will not resume until 
Thailand has a democratically elected government with authority 
to resume the negotiations.

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, U.S. Trade Representative Zoellick formally notified 
Congress of the Administration's intent to initiate 
negotiations for a free trade agreement 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. 
The first round of negotiations was held on March 8, 2005. 
There have been four full fledged negotiating rounds and three 
formal rounds on investment, with the last round in August 
2006.
            iii. Codel to Colombia, Ecuador, and Peru (July 3-9, 2005)
    On July 3-9, 2005, Chairman Thomas led a bipartisan 
delegation of Committee Members to Colombia, Ecuador, and Peru. 
The purpose of the delegation's trip was to focus on the 
ongoing negotiations for a free trade agreement with these 
countries and to discuss investment and security issues in the 
region. The delegation in particular emphasized that current 
unilateral trade preferences under the Andean Trade Promotion 
and Drug Eradication (ATPDEA) are set to expire in December 
2006, and the only way that the Andean countries can replicate 
their access to the U.S. market after these benefits expire is 
through a comprehensive free trade agreement providing 
reciprocal market access. In September 2005, the Committee 
filed its ``Report on Trade Mission to Colombia, Ecuador, and 
Peru.'' (WMCP 109-6)

b. China

            i. Legislation
    On July 14, 2005, Congressman Phil English introduced H.R. 
3283, the ``Trade Rights Enforcement Act.'' The bill would 
authorize funding for enforcement offices within USTR, require 
reports on China's currency exchange reforms, authorize the 
application of U.S. countervailing duty law to exports from 
nonmarket economies such as China, and establish a system of 
comprehensive monitoring of Chinese compliance with its trade 
obligations. The bill was referred to the Committee and placed 
on the House Suspension Calendar on July 26, 2005. The bill 
failed to pass with the requisite two-thirds majority with a 
vote of 240-186. The bill subsequently passed the House under a 
rule on July 27, 2005, by a recorded vote of 255-168. No 
further action was taken on this legislation in the 109th 
Congress.
            ii. Hearing
    On April 14, 2005, the Committee held a hearing on U.S.-
China economic relations and China's role in the world economy. 
During the hearing, the Committee received testimony from 
Members of Congress, the Administration, 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 and ITC activities
    On January 25, 2005, the Ranking Members of the Committee 
received from the GAO the report entitled ``U.S.-China Trade: 
Summary of 2003 World Trade Organization Transitional Review 
Mechanism for China'' (GAO-05-209R U.S.-China Trade).
    On April 14, 2005, the Committee received from the GAO a 
report entitled ``U.S.-China Trade: Opportunities to Improve 
U.S. Government Efforts to Ensure Open and Fair Markets'' (GAO-
05-544T).
    In June 2005, the Committee received from the GAO a report 
entitled ``U.S.-China Trade: Commerce Faces Practical and Legal 
Challenges in Applying Countervailing Duties'' (GAO-05-474).
    On December 9, 2005, the Committee received from the GAO 
the report entitled ``China Trade: U.S. Exports, Investment, 
Affiliate Sales Rising, but Export Share Falling'' (GAO-06-
162).
    On September 21, 2006, Chairman Bill Thomas requested a 
three-part study pursuant to section 332 of the Trade Act of 
1930 on China trade and investment, which will be due in parts 
through the middle of 2008.

c. Burma

    On July 28, 2003, the President signed into law the 
``Burmese Freedom and Democracy Act of 2003'' (P.L. 108-61), 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. 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 would expire one 
year after enactment unless renewed by Congress with a joint 
resolution meeting certain requirements, and the authority to 
renew these sanctions annually was initially set to expire in 
2006. Congress has annually renewed the import restrictions.
    On May 26, 2005, Congressman Lantos introduced H.J. Res. 52 
to extend the import sanctions for one year. On June 21, 2005, 
H.J. Res. 52 was approved by the House under suspension of the 
rules by a recorded vote of 423-2. On July 19, 2005, the bill 
passed the Senate without amendment by a recorded vote of 97-1. 
The President signed H.J. Res. 52 into law on July 27, 2005 
(P.L. 109-39).
    The most recent renewal was contained in H.J. Res. 86, 
introduced by Congressman Lantos on May 19, 2006. H.J. Res. 86 
extends the import ban for another year and gives Congress the 
option to annually extend the import ban for two additional 
years if Burma does not make progress in its human rights 
record and if Congress determines that continued import 
sanctions are the most appropriate policy to induce change by 
the Government of Burma. On July 11, 2006, H.J. Res. 86 was 
approved by the House under suspension of the rules by a voice 
vote. On July 26, 2006, the bill passed the Senate without 
amendment by a voice vote. The President signed H.J. Res. 86 
into law on August 1, 2006 (P.L. 109-251).

d. Preferences Legislation

    On September 21, 2006, Chairman Thomas introduced H.R. 
6142, the Trade Preferences Act. The bill would (1) extend the 
Generalized System of Preferences (GSP) for two years subject 
to new limitations on waivers of competitive need limits, (2) 
extend and enhance apparel and textile benefits under the 
African Growth and Opportunity Act including a two-year 
extension of benefits for apparel using third country fabric 
and a subsequent value-added rule of origin, and (3) create a 
new preference program for Haiti for apparel and automotive 
wire harnesses in addition to benefits for which Haiti is 
currently eligible under the Caribbean Basin Economic Recovery 
Act (P.L. 98-67, P.L. 106-200, and P.L. 107-210). No further 
action was taken on the bill in the 109th Congress, but an 
altered version of this legislation was subsequently included 
in H.R. 6406.
    Chairman Thomas introduced H.R. 6406 on December 7, 2006, 
which included several trade preference provisions to: (1) 
extend the GSP program for two years subject to a discretionary 
limitation on waivers of competitive need limits for products 
that constitute 150 percent of the competitive need limit or 75 
percent of U.S. imports of that product; (2) extend the third 
country fabric benefit under AGOA until 2012, with a full 3.5 
percent cap, and allowance of duty-free treatment for lesser 
developed countries for certain textiles of wholly made African 
fabric; (3) extend the trade preferences for Andean countries 
(Peru, Colombia, Ecuador, and Bolivia) for 6 months, followed 
by an additional 6-month extension for each country only if the 
United States and that country each complete their legislative 
process to approve a trade promotion agreement; and (4) create 
additional trade preferences for certain apparel and automotive 
wire harnesses produced in Haiti meeting a new rule of origin. 
H.R. 6406 passed the House under a rule on December 8, 2006, by 
a recorded vote of 212-184. Under the rule accompanying H.R. 
6111, ``A bill to amend the Internal Revenue Code of 1986 to 
provide that the Tax Court may review claims for equitable 
innocent spouse relief and to suspend the running on the period 
of limitations while such claims are pending,'' H.R. 6406 was 
merged into H.R. 6111, which then passed the Senate on December 
9, 2006, by a recorded vote of 79-9. The bill was signed into 
law on December 20, 2006.\5\
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    \5\ At the time of printing, the Public Law number for H.R. 6111 
was not available.
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e. Japan

            i. Legislation
    On July 14, 2005, Congressman Phil English introduced H.R. 
3283, the Trade Rights Enforcement Act, which is described 
above under legislation related to China. Among other things, 
the bill urged the President to address Japan's currency 
interventions and various trade barriers through additional 
funding to USTR enforcement offices. The bill passed the House 
on July 27, 2005, by a recorded vote of 255-168. No further 
action was taken on this legislation in the 109th Congress.
            ii. Hearing
    On September 28, 2005, the Committee held a hearing on 
U.S.-Japan economic and trade relations. During the hearing, 
the Committee received testimony from Members of Congress, the 
Administration, and private sector interests. The hearing 
focused on (1) Japan's economic problems, their causes, and 
impact on the U.S. and world economy; (2) Japan's barriers to 
agriculture imports such as the ban on U.S. beef, 
discriminatory government actions against U.S. products, and 
general non-tariff barriers; (3) Japan's role in the current 
WTO negotiations; and (4) the recent economic and regulatory 
reform attempts in Japan, including legislation to privatize 
major components of Kampo, the Japanese postal entity. 
Subsequently, in December 2005, Japanese authorities lifted the 
ban on beef imports from the United States for cattle under 20 
months but then suspended imports in January 2006. Trade 
resumed for such beef on July 27, 2006.
            iii. Reports
    On March 7, 2006, Chairman Thomas requested a study 
pursuant to section 332 of the Trade Act of 1930 regarding the 
market conditions and government regulation affecting U.S.-made 
medical devices sold in Japan. The report is still pending.

f. Russia

    On July 28, 2005, Congressman Issa introduced H. Con. Res. 
230 due to concerns about rampant piracy and a lack of 
effective intellectual property rights (IPR) protections in 
Russia. H. Con. Res. 230 expresses the sense of Congress that 
(1) the Russian Federation should provide effective protection 
of IPR or it risks losing its eligibility to participate in the 
GSP program, and (2) as part of its effort to accede to the 
WTO, the Russian Federation must ensure that intellectual 
property is securely protected in law and in practice. On 
November 16, 2005, the House approved H. Con. Res. 230, by a 
vote of 421-2. On December 22, 2005, the Senate approved H. 
Con. Res. 230 by unanimous consent.
    Russia's trade status is subject to the ``Jackson-Vanik'' 
provisions. The President first declared Russia to be in full 
compliance with the Jackson-Vanik requirements in 1994, and 
such Presidential certification has been annually renewed. 
Russia is in the process of acceding to the WTO. If the United 
States and Russia are to enjoy a full-fledged trade 
relationship once Russia joins the WTO, Congress must pass 
legislation to end the annual Jackson-Vanik review and grant 
permanent normal trade relations (PNTR). No bills were 
introduced in the 109th Congress to grant PNTR to Russia. On 
May 11, 2006, Chairman Thomas, Ranking Member Rangel, Senate 
Finance Committee Chairman Grassley, and Ranking Member Baucus 
sent a letter to President Bush expressing concern that Russia 
has not demonstrated its willingness, ability, and commitment 
to abide by WTO rules, particularly on enforcement of IPR and 
the application of SPS measures. The letter stated that until 
Russia addresses these critical issues in a meaningful way, the 
signatories would not support granting PNTR to Russia. The 
United States and Russia made significant progress in 
addressing the concerns raised in the letter, and on November 
10, 2006, both countries announced a bilateral agreement in 
principle for Russia's accession to the WTO. The bilateral 
agreement was signed on November 19, 2006.

g. Ukraine

    Ukraine's trade status was subject to the ``Jackson-Vanik'' 
provisions in Title IV of the Trade Act of 1974 (P.L. 93-618). 
This provision of law governs the extension of normal trade 
relations (NTR), including NTR tariff treatment, and access to 
U.S. Government credits, or credit or investment guarantees, to 
nonmarket economy countries ineligible for NTR treatment as of 
the enactment of the Act. The President first declared Ukraine 
to be in full compliance with the Jackson-Vanik requirements in 
1997, and such Presidential certification has been annually 
renewed.
    Ukraine is in the process of acceding to the WTO. So as to 
allow the United States and Ukraine to enjoy a full-fledged 
trade relationship once Ukraine joins the WTO, Congress passed 
legislation to end the annual Jackson-Vanik review and grant 
PNTR. On November 18, 2005, the Senate passed S. 632 to grant 
PNTR to Ukraine by unanimous consent. On March 6, 2006, 
Chairman Thomas and U.S. Trade Representative Rob Portman 
exchanged letters confirming that the Administration will 
ensure that Ukraine will comply fully with all of the 
commitments that it will assume as a WTO member before the 
United States will join the consensus necessary for Ukraine to 
join the body. On March 8, 2006, the House approved H.R. 1053 
to grant PNTR to Ukraine, by a vote of 417-2, with three 
Members voting present. On March 9, 2006, the Senate approved 
H.R. 1053 by unanimous consent. The bill was signed by the 
President and became law on March 23, 2006 (P.L. 109-205).

h. Vietnam

    Vietnam's trade status is subject to the ``Jackson-Vanik'' 
provisions in Title IV of the Trade Act of 1974. This provision 
of law governs the extension of NTR, including NTR tariff 
treatment, and access to U.S. Government credits, or credit or 
investment guarantees, to nonmarket economy countries 
ineligible for NTR treatment as of the enactment of the Act. A 
country subject to the provision may gain conditional NTR, and 
eligibility for U.S. trade financing programs, by complying 
with the freedom of emigration provisions under the Act or by 
receiving a waiver of such requirements by the President. 
Vietnam has received Presidential waivers of Jackson-Vanik 
provisions since 1998, most recently on June 5, 2006. Congress 
has not voted on a Jackson-Vanik disapproval resolution since 
2002 because no Member has introduced one in time. In 2002, 
Vietnam's disapproval resolution was defeated by a vote of 91-
328.
    Vietnam is in the process of acceding to the WTO and is 
scheduled to do so in January 2007. If the United States and 
Vietnam are to enjoy a full-fledged trade relationship once 
Vietnam joins the WTO, the annual Jackson-Vanik review must be 
ended and replaced with PNTR. Legislation to grant PNTR to 
Vietnam was introduced in the House (H.R. 5602) and Senate (S. 
3495) on June 13, 2006. The bill was referred to the Committee 
on Ways and Means and placed on the House Suspension Calendar 
on November 13, 2006 with an amendment to establish a mechanism 
for the Administration to determine whether Vietnam grants any 
prohibited subsidies to its textile and apparel industry after 
its accession to the WTO. The bill failed to pass with the 
requisite two-thirds majority, by a vote of 228-161. The 
provision (with the amendment) was subsequently included in 
H.R. 6406, which passed the House on December 8, 2006, by a 
recorded vote of 212-184 and, as described above, was 
subsequently merged into H.R. 6111, which passed the Senate on 
December 9, 2006, by a recorded vote of 79-9.

                    4. 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 composed of the Chairman and Ranking 
Member of those Committees of the House and Senate that 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 U.S. 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 February 2, 2005, Chairman Thomas convened an 
organizational meeting of the COG. Chairman Thomas invited the 
House COG subgroup to a meeting hosted by the Senate on 
September 8, 2005, to consult with U.S. Trade Representative 
Portman regarding ongoing trade negotiations and the upcoming 
WTO Hong Kong Ministerial. Among many other issues, U.S. Trade 
Representative Portman identified four potential candidates for 
free trade agreements with the United States: Malaysia, 
Switzerland, Egypt, and Korea. U.S. Trade Representative 
Portman also consulted about the Multi-Chip Integrated Circuits 
(MCP) agreement, which was signed later in September. Chairman 
Thomas invited the House COG subgroup to a meeting hosted by 
the House on September 27, 2006, to consult with U.S. Trade 
Representative Schwab regarding ongoing trade negotiations.

      5. MISCELLANEOUS TRADE AND TECHNICAL CORRECTIONS ACT OF 2006

    On March 11, 2005, Subcommittee on Trade Chairman Shaw 
requested that Members introduce bills for inclusion in a 
miscellaneous trade bill package. On July 25, 2005 and August 
5, 2005, Chairman Shaw requested written comments from parties 
interested in these miscellaneous trade proposals, technical 
corrections to the trade laws, and temporary suspensions on 
certain imports. On March 14, 2006, Chairman Shaw introduced 
H.R. 4944, the Miscellaneous Trade and Technical Corrections 
Act of 2006, which was referred to the Committee on Ways and 
Means. The bill included 570 duty suspensions on various 
products, several reliquidations of prior import entries due to 
government error, and miscellaneous trade provisions and 
technical corrections. The duty suspension provisions related 
mostly to products (largely chemicals) for which there are no 
U.S. domestic manufacturers. On March 15, 2006, the House 
passed H.R. 4944 under suspension of the rules, by a recorded 
vote of 412-2. H.R. 4944 was subsequently referred to the 
Senate Committee on Finance. No further action occurred on H.R. 
4944 during the 109th Congress.
    Approximately half of the provisions from H.R. 4944 (all 
provisions that had companion legislation already introduced in 
the Senate) were included in H.R. 4, the Pension Protection Act 
of 2006. Also included in H.R. 4 were provisions to suspend 
duties on ceiling fans, nuclear steam generators, and certain 
television components. In addition, the bill contained: a 
provision to extend the wool trust fund and associated wool 
fabric duty suspension, enacted most recently in the 
Miscellaneous Trade and Technical Corrections Act of 2004, for 
an additional two years; a provision to clarify an existing 
duty exemption for certain vessel repairs performed by a ship's 
regular crew; and a provision to suspend for three years the 
ability of importers of subject merchandise from new shippers 
to post a bond in lieu of a cash deposit during the pendency of 
a review of an antidumping or countervailing duty order. On 
July 28, 2006, the House passed H.R. 4 by a recorded vote of 
279-131. On August 3, 2006, the Senate passed H.R. 4, without 
amendment, by a recorded vote of 93-5. The President signed the 
bill into law on August 17, 2006 (P.L. 109-280).
    The remaining provisions of H.R. 4944 were subsequently 
included in H.R. 6406 along with 232 Senate-only duty 
suspensions on various products. H.R. 6406 passed the House on 
December 8, 2006, by a recorded vote of 212-184 and, as 
described above, was subsequently merged into H.R. 6111, which 
passed the Senate on December 9, 2006, by a recorded vote of 
79-9.

            6. TRADE AGENCY AUTHORIZATION AND APPROPRIATION

    The Committee on Ways and Means, working with the Committee 
on Homeland Security, included several trade and customs 
revenue provisions and established a 1 year authorization for 
U.S. Customs and Border Protection (CBP) as part of H.R. 1817, 
the ``Department of Homeland Security Authorization Act for 
Fiscal Year 2006,'' to provide CBP with guidance as it plans 
its budgets and to provide Committee guidance in the 
appropriations process. The bill was reported out of the 
Committee on Homeland Security on May 3, 2005, and the 
Committee on Ways and Means received a joint, sequential 
referral for a period not ending later than May 13, 2005. 
Through an exchange of letters on May 12, 2005, the two 
committees agreed to include in the Manager's Amendment various 
changes requested by the Committee on Ways and Means concerning 
trade and customs matters. In addition, the Committees agreed 
to include customs provisions that were previously passed out 
of the House of Representatives in the 108th Congress as part 
of H.R. 4418, the ``Customs and Border Security Act of 2004,'' 
particularly sections 102 (providing for the establishment of a 
cost accounting system), 104 (requiring a report on the One 
Face at the Border Initiative), 124 (authorizing Customs to 
provide certain services to Charter aircraft carriers), and 125 
(stating the sense of the Congress regarding textile 
enforcement provisions in certain trade preference programs). 
H.R. 1817 was passed in the House by recorded vote 424-4 on May 
18, 2005. No further action was taken on this bill in the 109th 
Congress.

a. Authorization legislation

    On November 14, 2005, Congressman Peter King introduced 
H.R. 4312, the ``Border Security and Terrorism Prevention Act 
of 2005,'' which contained several provisions dealing with 
authorizations and border security issues that impact the flow 
of trade and imports and customs revenue, matters under the 
jurisdiction of the Committee on Ways and Means. The Committee 
on Ways and Means and the Homeland Security reached agreement 
to certain modifications to H.R. 4312 to preserve the 
jurisdiction of the Committee on Ways and Means and to protect 
trade and customs revenue interests. This agreement was 
memorialized in an exchange of letters on December 6, 2005. The 
trade-related provisions agreed to between these Committees for 
inclusion in H.R. 4312 were later incorporated in H.R. 4437, 
the ``Border Protection, Antiterrorism and Illegal Immigration 
Control Act of 2005,'' which had been introduced by Congressman 
F. James Sensenbrenner on December 6, 2005 and reported out of 
the Committee on the Judiciary on December 13, 2005. The bill 
was referred jointly and sequentially to the Committee on Ways 
and Means on December 13, 2005 for a period not ending later 
than December 14, 2005. The Committee on Ways and Means 
discharged the bill on December 14, 2005. H.R. 4437 was passed 
in the House by a recorded vote 239-182 on December 16, 2005.
    On March 14, 2006, Congressman Dan Lungren introduced H.R. 
4954, the Security and Accountability For Every (SAFE) Port 
Act. On May 3, 2006, Chairman Thomas and Committee on Homeland 
Security Chairman Peter King exchanged letters acknowledging 
the jurisdiction of the Committee on Ways and Means and its 
agreement to forgo consideration of the bill. On May 4, 2006, 
the legislation passed the House by a recorded vote of 421-2. 
On September 14, 2006, the bill passed the Senate with an 
amendment by a vote of 98-0. On September 30, 2006, the 
conference report to H.R. 4954 passed the House by a recorded 
vote of 409-2. On September 30, 2006, the Senate agreed to the 
conference report by unanimous consent. It was signed into law 
by the President on October 13, 2006 (P.L. 109-347).
    On December 7, 2006, Chairman Thomas introduced H.R. 6406, 
which included a provision to extend the current 15-day period 
to 30 days for changes to the Harmonized Tariff Schedule to be 
finalized after publication in a Presidential proclamation to 
afford the private sector sufficient time to incorporate all of 
the changes in their computer systems and avoid costly, time-
consuming errors to entries. H.R. 6406 passed the House 
pursuant to a rule on December 8, 2006, by a recorded vote of 
212-184. Under the rule accompanying H.R. 6111, H.R. 6406 was 
merged into H.R. 6111, which then passed the Senate on December 
9, 2006, by a recorded vote of 79-9. The bill was signed in to 
law on December 20, 2006.\6\
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    \6\ At the time of printing, the Public Law number for H.R. 6111 
was not available.
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b. Appropriation Legislation

            i. Department of Homeland Security Appropriations Act of 
                    2006
    On May 13, 2005, Congressman Rogers introduced H.R. 2360, 
making appropriations for the Department of Homeland Security. 
The bill passed the House on May 17, 2005, by a vote of 424-1. 
The Senate subsequently took up and amended H.R. 2360 with two 
provisions within the jurisdiction of the Committee on Ways and 
Means. Specifically, the Senate accepted amendment 1166, which 
would have designated the MidAmerica St. Louis Airport in 
Illinois as a port of entry, and amendment 1172, which would 
have designated the National County International Airport in 
Wyoming as a user-fee airport under the U.S. customs laws. The 
Senate passed H.R. 3058 with these provisions on July 13, 2005, 
by a recorded vote of 96-1. On September 13, 2005, Chairman 
Thomas sent a letter to Appropriations Committee Chairman Lewis 
objecting to inclusion of these two provisions in the 
conference report for H.R. 3058. The provisions were dropped in 
conference.
            ii. Overtime for U.S. Customs and Border Protection 
                    Employees
    On May 13, 2005, Congressman Rogers introduced H.R. 2360, 
making appropriations for the Department of Homeland Security 
for fiscal year 2006. The bill contained provisions within the 
jurisdiction of the Committee on Ways and Means that would have 
limited the amount of overtime pay that could be provided to 
Bureau of Customs and Border Protection employees. On May 16 
and 17, 2005, Chairman Thomas and Subcommittee on Homeland 
Security Chairman Rogers exchanged letters acknowledging the 
jurisdiction of the Committee on Ways and Means and its 
agreement to forgo consideration of the bill. On May 17, 2005, 
the legislation passed the House by a recorded vote of 424-1. 
On July 14, 2005, the bill passed the Senate with an amendment 
by a vote of 96-1. On October 6, 2005, the conference report to 
H.R. 2360 passed the House by a recorded vote of 347-70. On 
October 7, 2005, the conference report passed the Senate by 
voice vote. It was signed into law by the President on October 
18, 2005 (P.L. 109-90).

c. Hearing

    On July 25, 2006, the Subcommittee held a hearing to review 
budget authorizations for FY2007 and FY2008 for U.S. Customs 
and Border Protection (CBP) and U.S. Immigration and Customs 
Enforcement (ICE). In addition, the hearing addressed other 
Customs issues, including: the creation of CBP and ICE and the 
integration of the former U.S. Customs Service into the U.S. 
Department of Homeland Security, the Customs Trade Partnership 
Against Terrorism (C-TPAT) program, Customs automation and 
modernization efforts and the mechanisms needed to fund them, 
and general Customs oversight issues. Witnesses at the hearing 
included CBP Commissioner W. Ralph Basham, ICE Assistant 
Secretary Julie Myers, and representatives from the business 
community, customs brokers and labor unions.

d. Report

    On March 8, 2006, Chairman Thomas requested the GAO to 
carry out a review of the CBP's continuous entry bond policy, 
identifying the effects of the policy on U.S. importers and 
trade flows and examining how this policy relates to other 
policies and practices for collecting antidumping and 
countervailing duties. On October 19, 2006, the Committee 
received from the GAO the report entitled ``Customs'' Revised 
Bonding Policy Reduces Risk of Uncollected Duties, but Concerns 
about Uneven Implementation and Effects Remain'' (GAO-07-50). 
The report was released to the public on November 15, 2006. The 
GAO found that the revised policy significantly increased bond 
amounts for some importers and that CBP did not fully account 
for the increased cost to importers, particularly as a result 
of increased collateral requirements. The GAO recommended that 
the Commissioner of CBP conduct a formal review of the lessons 
learned from implementing the revised policy on shrimp imports 
and to develop clear and consistent guidance for implementing 
the policy as well as the basis upon which CPB will reduce 
importers' bond requirement.

            7. THE CONTINUED DUMPING AND SUBSIDY OFFSET ACT

a. Legislation

    The Continued Dumping and Subsidy Offset Act (CDSOA) was 
enacted into law in October 2000 (P.L. 106-387) and requires 
the annual disbursement of antidumping and countervailing 
duties to qualified petitioners and interested parties in the 
underlying trade remedy proceedings. On January 16, 2003, the 
WTO's Appellate Body issued a final adverse ruling against the 
CDSOA, finding that it is inconsistent with U.S. obligations to 
the WTO. On November 28, 2004, the WTO authorized approximately 
$134 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. Canada, Mexico, the 
European Union, and Japan imposed retaliatory tariffs against a 
variety of U.S. exports.
    On March 3, 2005, Congressman Ramstad and Chairman Shaw 
introduced H.R. 1121 to repeal the CDSOA. On July 25, 2005, 
Chairman Shaw requested written comments from parties 
interested in miscellaneous trade proposals, including H.R. 
1121. Over 150 comments were received on H.R. 1121, and 
comments were nearly equally divided with a slight majority 
supporting CDSOA repeal.
    On October 26, 2005, the Ways and Means Committee approved 
``Entitlement Reconciliation Recommendations for Fiscal Year 
2006,'' as amended, by a vote of 22-17. The recommendations 
included a provision to repeal the CDSOA effective upon 
enactment. On November 18, 2005, the House approved H.R. 4241, 
the ``Deficit Reduction Act of 2005,'' by a 217-215 vote. The 
House-passed bill included immediate CDSOA repeal. On November 
3, 2005, the Senate passed S. 1932, the ``Deficit Reduction 
Omnibus Reconciliation Act of 2005,'' by a vote of 52-47. The 
Senate-passed bill did not include CDSOA repeal. On December 
15, 2005, the Senate passed a nonbinding motion offered by 
Senator DeWine instructing Senate conferees to insist that any 
conference report not include CDSOA repeal, by a vote of 71-20. 
The conference report for the Deficit Reduction Act of 2005 was 
filed on December 19, 2005 and contained a provision to repeal 
the CDSOA immediately upon enactment but allowing the continued 
disbursements of duties on goods entered before October 1, 
2007. On December 19, 2005, the House approved the conference 
report by a vote of 212-206. On December 21, 2005, the Senate 
approved the conference report with an amendment to provisions 
unrelated to CDSOA repeal, by a vote of 51-50. On February 1, 
2006, the House approved the bill as amended by the Senate by a 
vote of 216-214. President Bush signed the bill into law on 
February 8, 2006 (P.L. 109-171).
    FY2006 CDSOA disbursements of nearly $380 million were 
issued to recipients on November 27, 2006.

b. Reports

    On April 30, 2004, Trade Subcommittee Chairman Crane, along 
with Congressmen Ramstad, Boehner, and Biggert, requested the 
U.S. Government Accountability Office (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. In January 2005, Subcommittee on 
Trade Chairman E. Clay Shaw renewed the request for the CDSOA 
review.
    On September 26, 2005, the Committee received from the GAO 
the report entitled ``International Trade: Issues and Effects 
of Implementing the Continued Dumping and Subsidy Offset Act'' 
(GAO-05-979). The GAO found that since the inception of CDSOA 
(FY2001), five companies (three of which are related) received 
46% of the over $1 billion in payments. GAO also reported that 
two-thirds of all payments went to three industries: bearings, 
candles, and steel. The GAO concluded that the CDSOA does not 
provide a ``trade remedy'' in the traditional sense because it 
is not available to all companies; many domestic producers 
impacted by dumped or subsidized imports are ineligible to 
receive funds because they did not formally and publicly 
support the petition that resulted in the duties.

                     8. MISCELLANEOUS TRADE ISSUES

a. Conflict Diamonds

    The Clean Diamonds Act of 2003 (P.L. 108-19) was initiated 
in the Committee in 2003. The Act restricts the import and 
export of diamonds from countries with inadequate controls 
against the trade in conflict diamonds. In accordance with 
Section 5(c) of the Act, the State Department issued to the 
Committee on July 14, 2005 a report on the performance of the 
U.S. Kimberley Process Authority (USKPA). The report described 
and reviewed the practices, standards, and procedures of the 
USKPA. The Committee continues to monitor implementation of the 
Kimberly Process.
    In September 2006, the Committee received from the GAO the 
report entitled ``Conflict Diamonds: Agency Actions Needed to 
Enhance Implementation of the Clean Diamond Trade Act'' (GAO-
06-978).

b. Other Select ITC Reports Received by the Committee

    In May 2005, the Committee received from the ITC the report 
entitled ``Certain Yarns and Fabrics: Effect of Modification of 
U.S. Singapore FTA Rules of Origin for Goods of Singapore'' 
(Investigation No. Singapore FTA 103-10 (Publication 3783, May 
2005)).
    In May 2005, the Committee received from the ITC the report 
entitled ``Advice Concerning Possible Modifications to the U.S. 
Generalized System of Preferences'' (Investigation No. 332-466 
(Publication 3772, May 2005)).
    In May 2005, the Committee received from the ITC the report 
entitled ``Advice Concerning Possible Modifications to the U.S. 
Generalized System of Preferences, 2004 Special Review'' 
(Investigation No. 332-467 (Publication 3773, May 2005)).
    In June 2005, the Committee received from the ITC the 
report entitled ``The Impact of Trade Agreements Implemented 
Under Trade Promotion Authority'' (Investigation No. TA 2103-1 
(Publication 3780, June 2005)).
    In June 2005, the Committee received from the ITC the 
report entitled ``Export Opportunities and Barriers in African 
Growth and Opportunity Act--Eligible Countries'' (Investigation 
No. 332-464 (Publication 3785, June 2005)).
    In July 2005, the Committee received from the ITC the 
report entitled ``U.S. Trade Shifts in Selected Industries and 
Recent Trends in U.S. Services Trade'' (Investigation No. 332-
345 (Publication 3789, July 2005)).
    In July 2005, the Committee received from the ITC the 
report entitled ``Year in Trade 2004: Operation of the Trade 
Agreements Program'' (Investigation No. 163-1 (Publication 
3779, July 2005)).
    In September 2005, the Committee received from the ITC the 
report entitled ``Probable Effect of Certain Modifications to 
the North American Free Trade Agreement Rules of Origin'' 
(Investigation No. NAFTA 103-12 (Publication 3802, September 
2005)).
    In September 2005, the Committee received from the ITC the 
report entitled ``Biannual Report of the Impact of the 
Caribbean Basin Economic Recovery Act on U.S. Industries and 
Customers'' (Investigation No. 332-227 (Publication 3804, 
September 2005)).
    In September 2005, the Committee received from the ITC the 
report entitled ``Andean Trade Preference Act: Effect on the 
U.S. Economy and on Andean Drug Crop Eradication and Crop 
Substitution'' (Investigation No. 332-352 (Publication 3803, 
September 2005)).
    In July 2006, the Committee received from the ITC the 
report entitled ``Conditions of Competition for Certain Oranges 
and Lemons in the U.S. Fresh Market'' (Investigation No. 332-
469 (Publication 3863, July 2006)).
    In August 2006, the Committee received from the ITC the 
report entitled ``Year in Trade 2005: Operation of the Trade 
Agreements Program'' (Investigation No. 163-1 (Publication 
3875, August 2006)).
    In August 2006, the Committee received from the ITC the 
report entitled ``Probable Effect of Certain Modifications to 
the North American Free Trade Agreement Rules of Origin'' 
(Investigation No. NAFTA 103-14 (Publication 3881, August 
2006)).
    In September 2006, the Committee received from the ITC the 
report entitled ``Andean Trade Preference Act: Effect on the 
U.S. Economy and on Andean Drug Crop Eradication and Crop 
Substitution'' (Investigation No. 332-352 (Publication 3888, 
September 2006)).
    In December 2006, the Committee received from the ITC the 
report entitled ``U.S.-Colombia Trade Promotion Agreement: 
Potential Economy-wide and Selected Sectoral Effects'' 
(Investigation No. TA-2104-23 (Publication 3896)).

c. Science, State, Justice, Commerce, and Related Agencies 
        Appropriations Act, 2006 (H.R. 2862)

    On June 10, 2005, Congressman Wolf introduced H.R. 2862, 
making appropriations for the Departments of State, Justice, 
and Commerce and other agencies for the fiscal year ending 
September 30, 2006. The bill was reported out of the House 
Committee on Appropriations on June 10, 2005. Congressman 
Tancredo offered a floor amendment to the bill that sought to 
prohibit the use of appropriated funds for negotiations that 
would impact U.S. immigration by the agencies covered under the 
bill, such as bilateral and multilateral trade negotiations by 
USTR. The Committee on Ways and Means issued talking points 
opposing this amendment, arguing that it was not needed as the 
Administration had already agreed not to negotiate any 
immigration provisions in these agreements and that it could 
disrupt sensitive negotiations at the WTO. In addition, 
Chairman Thomas, Chairman Shaw, and several other Members of 
the Committee on Ways and Means spoke against this amendment 
when it was considered on the floor on June 16, 2005. The 
amendment was defeated by a recorded vote of 204 to 222. The 
House passed H.R. 2862 on June 16, 2005, by a vote of 418-7.
    The Senate subsequently took up and passed the bill on 
September 15, 2005, with an amendment, by a vote of 91-4. The 
Senate-passed version of the bill contained two new provisions 
within the trade jurisdiction of the Committee on Ways and 
Means. The first provision instructed the U.S. Trade 
Representative to conduct negotiations within the WTO to 
recognize the right of members to distribute monies collected 
from antidumping and countervailing duties. On November 3, 
2005, Chairman Thomas sent a letter to Committee on 
Appropriations Chairman Lewis objecting to the provisions and 
asking for its removal in conference. The Committee later 
acquiesced, and the conference report retained the provision.
    The second Senate-passed provision was an amendment offered 
by Senator Grassley, which specified that no funds made 
available by the Act may be used in a manner that is 
inconsistent with the principle negotiating objective of the 
United States with respect to trade remedy laws to: preserve 
the ability of the United States to enforce vigorously its 
trade laws, avoid agreements that lessen the effectiveness of 
domestic and international disciplines on unfair trade, and 
address and remedy market distortions that lead to dumping and 
subsidization, including overcapacity, cartelization, and 
market-access barriers. The conference report did not retain 
this provision.
    The House passed the conference report on November 9, 2005, 
by a vote of 397-19, and the Senate passed the report on 
November 16, 2005, by a vote of 94-5. The President signed the 
bill into law on November 22, 2005 (P.L. 109-108).

d. Resolution on Antidumping and Countervailing Duty Negotiations in 
        Tax Reconciliation

    On November 17, 2005, the Senate passed by voice vote 
amendment SA 2655 proposed by Senator Craig to the tax 
reconciliation bill (S. 2020). The amendment contained a 
nonbinding resolution recommending severe limitations on 
antidumping and countervailing negotiations in the WTO. 
Specifically, the resolution specified that the United States 
should not be a signatory to any agreement that adopts any 
proposal to lessen the effectiveness of domestic and 
international disciplines on unfair trade or safeguard 
provisions, including proposals that: mandate a sunset of duty 
orders, require that trade remedy duties reflect less than the 
full margin of dumping or subsidization, allow higher de 
minimis levels of unfair trade, make cumulation of the effects 
of imports from multiple countries more difficult, outlaw the 
practice of ``zeroing'' in antidumping investigations, or 
mandate the weighing of causes or other provisions making it 
more difficult to prove injury in unfair trade cases. The 
resolution also provided that the United States should ensure 
that any new agreement relating to antidumping, countervailing 
duty, or safeguard provisions ``fully rectifies and corrects'' 
WTO dispute settlement decisions that have ``unjustifiably and 
negatively impacted, or threaten to negatively impact,'' U.S. 
law or practice. On November 18, 2005, the Senate approved S. 
2020 as amended by a vote of 64-33. On November 18, 2005, 
Congressman English introduced H. Res. 577, the text of which 
is identical to the Senate-passed amendment. No further action 
was taken on H. Res. 577. On December 8, 2005, the House 
approved H.R. 4297, the Tax Relief Extension Reconciliation Act 
of 2005, by a vote of 234-197. The House-passed tax 
reconciliation bill did not contain a provision related to 
antidumping and countervailing duty negotiations in the WTO. 
The conference report did not retain the Senate amendment.

e. Overview and Compilation of U.S. Trade Statutes 2005

    On July 26, 2005, Chairman Thomas announced the publication 
of the Committee's Trade ``Blue Book,'' the 2005 edition of the 
``Overview and Compilation of U.S. Trade Statutes'' (WMCP: 109-
4). The Blue Book contains a description and history of U.S. 
trade laws in Part I as well as the text of the statutes 
themselves in Part II, with updates to trade laws due to the 
significant legislation accomplished by the Committee during 
the 108th Congress.

f. Departments of Transportation, Treasury, and Housing and Urban 
        Development, the Judiciary, District of Columbia, and 
        Independent Agencies Appropriations Act of 2006

    On June 24, 2005, Congressman Knollenberg introduced H.R. 
3058, making appropriations for the Departments of 
Transportation, Treasury, and other departments and agencies. 
The bill contained a provision within the trade jurisdiction of 
the Committee on Ways and Means. Specifically, section 218 
would have required the Secretary of the Treasury to report to 
Congress on the definition of current manipulation. On June 27, 
2005, Chairman Thomas sent a letter to Rules Committee Chairman 
Dreier requesting that the rule for consideration of H.R. 3058 
not include a waiver of Rule XXI of the Rules of the House with 
respect to section 218. On June 27, 2005, H. Res. 342, 
providing for the consideration of H.R. 3058, was introduced 
and reported favorably by the Committee on Rules. H. Res. 342 
did not include a waiver of Rule XXI with respect to the 
provision within the jurisdiction of the Committee on Ways and 
Means. H. Res. 342 passed the House on June 28, 2005, by a vote 
of 219-193. On June 29, 2005, Chairman Thomas then raised a 
point of order against the provision, and the Chair sustained 
the point of order, thus stripping the provision from the bill. 
A modified version of section 218 was later included as section 
6 in H.R. 3283 (see discussion above). The House passed H.R. 
3058 on June 30, 2005, by a recorded vote of 405-18. The Senate 
subsequently took up and amended H.R. 3058 and included a 
provision similar to House section 218 in its version. The 
Senate version of H.R. 3058 passed the Senate on October 20, 
2005, by a vote of 93-1. On November 9, 2005, Chairman Thomas 
sent a letter to Committee on Appropriations Chairman Lewis 
objecting to inclusion of the provision in the conference 
report. The Senate provision related to currency manipulation 
was subsequently dropped in conference.

g. Departments of Labor, Health and Human Services, and Education, and 
        Related Agencies Appropriations Act of 2006

    On June 21, 2005, Congressman Regula introduced H.R. 3010, 
making appropriations for the Department of Labor and other 
departments and agencies. The bill passed the House on June 24, 
2005, by a recorded vote of 250-151. The Senate subsequently 
took up and amended H.R. 3010 and included a provision within 
the jurisdiction of the Committee on Ways and Means. 
Specifically, the Senate included section 520, which would have 
established the MidAmerica St. Louis Airport in Illinois as a 
port of entry. The Senate passed H.R. 3010 with this provision 
on October 27, 2005, by a recorded vote of 94-3. On November 
14, 2005, Chairman Thomas sent a letter to Appropriations 
Committee Chairman Lewis objecting to the inclusion of the 
provision in the conference report for H.R. 3010. The provision 
was dropped in conference.

h. China Prison Labor

    On November 9, 2005, Congressman Wolf introduced H. Con. 
Res. 294, calling on the international community to condemn the 
Chinese system of forced labor prison camps. The resolution 
included a provision related to implementation of trade laws to 
prohibit importation of products made in Chinese forced labor 
camps, which was within the jurisdiction of the Committee on 
Ways and Means. On December 13, 2005, Chairman Thomas and 
International Relations Committee Chairman Hyde exchanged 
letters acknowledging the jurisdiction of the Committee on Ways 
and Means and its agreement to forgo consideration of the bill. 
On December 16, 2005, H. Con. Res. 294 passed the House by a 
vote of 413-1 and was received in the Senate on the same day. 
No further action was taken in the Senate.

i. East Asia Security Act of 2005

    On June 29, 2005, International Relations Committee 
Chairman Hyde introduced H.R. 3100, the East Asia Security Act 
of 2005. The bill contained a provision in the jurisdiction of 
the Committee on Ways and Means. Specifically, section 7 of the 
bill would have suspended the President's ability to license an 
exemption or expedited procedures for licensing the temporary 
importation of defense articles. On July 13, 2005, Chairman 
Thomas and Chairman Hyde exchanged letters acknowledging the 
jurisdiction of the Committee on Ways and Means and its 
agreement to forgo consideration of the bill. On July 14, 2005, 
the House took up and failed to pass H.R. 3100 under suspension 
of the rules by the requisite two-thirds majority with a 
recorded vote of 215-203. No further action was taken on the 
bill in the House.

j. Iran and Libya Sanctions Act (ILSA)

    On January 6, 2005, Congresswoman Ileana Ros-Lehtinen 
introduced H.R. 282, the Iran Freedom Support Act, which 
included provisions related to import sanctions. On April 6, 
2006, Chairman Thomas and Committee on International Relations 
Chairman Henry Hyde exchanged letters acknowledging the 
jurisdiction of the Committee on Ways and Means and its 
agreement to forgo consideration of the bill. On April 26, 
2006, the legislation passed the House by a recorded vote of 
397-21. On July 25, 2006, Congresswoman Ros-Lehtinen introduced 
H.R. 5877, a bill to amend the Iran and Libya Sanctions Act of 
1996 (104-172), which included provisions that would extend the 
sanctions, including import sanctions, until September 2006. On 
July 26, 2006, Chairman Thomas and Chairman Hyde exchanged 
letters acknowledging the jurisdiction of the Committee on Ways 
and Means and its agreement to forgo consideration of the bill. 
On July 26, 2006, the legislation passed the House under 
suspension of the rules by voice vote. On July 31, 2006, the 
bill passed the Senate without amendment by unanimous consent. 
It was signed into law by the President on August 4, 2006 (P.L. 
109-267). On September 27, 2006, Congresswoman Ros-Lehtinen 
introduced H.R. 6198, the Iran Freedom Support Act, which 
included provisions that would extend and modify import 
sanctions. On September 27, 2006, Chairman Thomas and Chairman 
Hyde exchanged letters acknowledging the jurisdiction of the 
Committee on Ways and Means and its agreement to forgo 
consideration of the bill because several amendments supported 
by the Committee would be included in the bill. On September 
28, 2006, the legislation passed the House under suspension of 
the rules. On September 30, 2006, the bill passed the Senate 
without amendment by unanimous consent. It was signed into law 
by the President on September 30, 2006 (P.L. 109-293).

k. Marine Mammal Protection Acts Amendments of 2006 and Polar Bears

    On October 18, 2005, Committee on Resources Chairman 
Richard Pombo introduced H.R. 4075, which contained provisions 
addressing import restrictions related to Polar Bears and 
marine mammals. On July 13, 2006, Chairman Thomas and Chairman 
Pombo exchanged letters acknowledging the jurisdiction of the 
Committee on Ways and Means and its agreement to forgo 
consideration of the bill. On July 17, 2006, the legislation 
passed the House under suspension of the rules by voice vote. 
On December 6, 2006, the bill passed the Senate with an 
amendment by unanimous consent.

l. Saudi Resolution and Israel Resolution

    On March 29, 2006, Subcommittee on Trade Chairman E. Clay 
Shaw introduced H. Con. Res. 370, expressing the sense of the 
Congress that Saudi Arabia should fully live up to its WTO 
commitments and end all aspects of any boycott on Israel. On 
April 5, 2006, the legislation passed the House under 
suspension of the rules by voice vote. No further action was 
taken.

m. Stevens-Inouye International Fisheries Monitoring and Compliance 
        Legacy Act of 2006

    On July 27, 2006, Committee on Resources Chairman Richard 
Pombo introduced H.R. 5946, the Stevens-Inouye International 
Fisheries Monitoring and Compliance Legacy Act of 2006, which 
would amend the Magnuson-Stevens Fishery Conservation and 
Management Act to authorize activities to promote improved 
monitoring and compliance for high seas fisheries or fisheries 
governed by international fishery management agreements. The 
bill also included provisions related to trade sanctions. On 
September 20, 2006, Chairman Thomas and Chairman Pombo 
exchanged letters acknowledging the jurisdiction of the 
Committee on Ways and Means and its agreement to forgo 
consideration of the bill. On September 27, 2006, the 
legislation passed the House under suspension of the rules by 
voice vote. On December 7, 2006, the bill passed the Senate 
with an amendment by unanimous consent.

n. Postal Accountability and Enhancement Act of 2006

    On December 7, 2006, Committee on Government Reform 
Chairman Tom Davis introduced H.R. 6407, the Postal 
Accountability and Enhancement Act of 2006, which contained 
provisions addressing customs issues related to postal 
services. On December 7, 2006, Chairman Thomas and Chairman 
Davis exchanged letters acknowledging the jurisdiction of the 
Committee on Ways and Means and its agreement to forgo 
consideration of the bill. On December 8, 2006, the legislation 
passed the House under suspension of the rules by voice vote. 
On December 9, 2006, the bill passed the Senate without 
amendment by unanimous consent. It was signed into law by the 
President on December 20, 2006.\7\
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    \7\ At the time of printing, the Public Law number for H.R. 6407 
was not available.
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o. Jurisdiction of the Committee on Ways and Means

    On January 4, 2005, the House adopted the Rules for the 
109th Congress, H. Res. 5, which modified the jurisdiction of 
the Committee on Ways and Means as stated in House Rule X from 
``(1) Customs, collections districts, . . .'' to ``(1) Customs 
revenue, collection districts, . . .'' This change conforms the 
Committee's jurisdiction to the revenue authority defined in 
the Homeland Security Act of 2002.

                 C. Legislative Review of Health Issues


          1. BILLS ENACTED INTO LAW DURING THE 109TH CONGRESS

a. Deficit Reduction Act of 2005 (P.L. 109-171)

    On February 1, 2006, the House of Representatives approved 
the Conference Report for S. 1932, the Deficit Reduction Act of 
2005 (DRA), to reduce spending in a number of federal programs 
falling under the jurisdiction of the Committee on Ways and 
Means, including Medicare. The House originally passed the 
Conference Report on December 19, 2005. The Senate made 
technical changes before passing it on December 21, 2005. The 
House reconsidered and passed the conference report on February 
1, 2006, by a vote of 216-214. The President signed the bill 
into law on February 8, 2006 (P.L. 109-171).
    Title V of the DRA, Subtitles A-D, contains Medicare-
related provisions that result in net savings to the Medicare 
program of approximately $6 billion during fiscal years 2006-
2010. Specifically, Medicare savings are achieve d by requiring 
more affluent seniors to contribute a higher percentage of care 
costs under Medicare Part B, reducing waste by paying only for 
necessary repairs and maintenance for durable medical 
equipment, freezing home health payment rates for 2006, 
clarifying the computation of disproportionate share inpatient 
hospital payments, and implementing payment reforms for imaging 
and ambulatory surgical centers.
    Other Medicare-related provisions of the DRA expand 
requirements for hospital quality reporting, include an 
additional year in the transition period for the 75 percent 
rule for inpatient rehabilitation facilities under Part A, 
provide an update to payment rates for physician services to 
prevent payment cuts, and provide a 1.6 percent update to end-
stage renal disease facilities. Also, the DRA developed a 
strategic plan for physician investment in specialty hospitals, 
established a post-acute care demonstration program to study 
outcomes following hospitalizations, and provided more focused 
post-acute treatment and payments.
    In addition, H.R. 3971 reduced bad debt payments to skilled 
nursing facilities for non-dually eligible Medicare 
beneficiaries from 100 percent to 70 percent; tied home health 
payments to quality reporting in 2007 and required MedPAC to 
submit a report on value-based purchasing for home health 
services no later than June 1, 2007; increased the phase-out of 
risk adjustment budget neutrality in determining payments to 
Medicare Advantage plans and established a PACE Provider Grant 
program.
    Finally, the DRA prevents physician payment cuts in 2006 by 
providing a freeze in payment rates for physician services.

b. Qualified Individuals, Transitional Medical Assistance (TMA), and 
        Abstinence Programs Extension and Hurricane Katrina 
        Unemployment Relief Act of 2005 (Public Law No: 109-91)

    H.R. 3917 was introduced on October 6, 2006, by Rep. Nathan 
Deal, passed the House under suspension of the rules by voice 
vote on October 6, 2005, and passed the Senate October 7, 2005. 
It was signed into law on October 20, 2005 (P.L. 109-91). H.R. 
3971 extended the Transitional Medical Assistance (TMA) 
program, which continues Medicaid for families leaving Welfare 
for work, through December 31, 2006; the QI-1 program, through 
which State Medicaid programs help low-income seniors pay 
Medicare Part B premiums, through September 30, 2007 and 
extends the Abstinence Education program through December 31, 
2005.
    H.R. 3971 also provided $500 million in federal 
unemployment funds to disaster States to help them pay regular 
unemployment benefits ($400 million to Louisiana, $85 million 
to Mississippi, and $15 million to Alabama). Funds were divided 
among states according to their share of expected increased 
unemployment benefit payments attributable to Hurricane 
Katrina. It also provided all states the flexibility to use 
current Federal unemployment administrative funds to assist 
Katrina victims in need of unemployment benefits.
    In order to offset these new costs, H.R. 3971 prohibited 
Medicare (in 2007 and beyond) and Medicaid (in 2006 and beyond) 
coverage of Food and Drug Administration approved drugs to 
treat erectile dysfunction.

c. Tax Relief and Health Care Act of 2006 (H.R. 6111)

    On December 8, 2006, the House of Representatives agreed 
with amendments to the Senate amendment by a vote of 367-45. On 
December 9, 2006, the Senate agreed to the House amendments and 
passed H.R. 6111, and the bill was signed into law by the 
President on December 20, 2006 .\8\ Division B of H.R. 6111, 
the Tax Relief and Health Care Act of 2006 (TRHCA) (Engrossed 
Amendment as agreed to by the House of Representatives) 
contains Medicare and other related health provisions. 
Specifically, the Medicare-related provisions of TRHCA improve 
Medicare quality and provider payments, protect Medicare 
beneficiaries, and improve Medicare program integrity efforts.
---------------------------------------------------------------------------
    \8\ At the time of printing, the Public Law number for H.R. 6111 
was not available.
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    Titles I to III of Division B of the TRHCA contain 
Medicare-related provisions that improve the functioning of the 
Medicare program, and are likely to result in a net savings to 
the Medicare program over 5 years. Specifically, the act 
provides a freeze in physician payment rates, and 1.5 percent 
in bonus payments for quality measure reporting, which will 
ensure both continued beneficiary access to care and improve 
the quality of care. Further, a 1 year 1.6 percent update is 
provided to dialysis facilities, and expiring provisions 
related to rural health care are extended. Voluntary reporting 
of quality measures by hospital outpatient departments and 
ambulatory surgical centers will begin in 2009, and care 
management of anemia patients will be improved through better 
reporting of anemia indicators. Also, a post-payment review 
process will be instituted under the competitive acquisition 
program.
    Other Medicare-related provisions of the TRHCA protect 
beneficiaries through a 1 year extension in the therapy 
exceptions process, vaccine administration under the new 
Medicare prescription drug-benefit program, an Office of 
Inspector General study of medical events that should never 
occur, and a medical home demonstration program.
    In addition, the TRHCA maintains and improves Medicare 
program integrity through the expansion of the recovery auditor 
program to all States by 2010, which identifies and returns 
overpayments to Medicare. Although application of a budget rule 
by the Congressional Budget Office (CBO) suggests that this 
provision will result in increased costs to the Medicare 
program, the CBO also recognized that the recovery audit 
contractor provision will likely result in a net reduction in 
Medicare spending, and the Committee estimates that the 
provision should save approximately $8 billion over 5 years. 
Also, the TRHCA provides funding updates for a 4 year period 
using the consumer price index for the Health Care Fraud and 
Abuse Control Account.

                        2. HEALTH CARE PROPOSALS

a. Health Opportunity Patient Empowerment Act of 2006 (H.R. 6134)

    Representatives Eric Cantor (R-VA) and Paul Ryan (R-WI) 
introduced H.R. 6134 on September 21, 2006. The bill was 
ordered favorably reported by the Committee on Ways and Means, 
as amended, on September 29, 2006 by a vote of 24-14. The House 
did not consider the bill.
    The bill amends the Internal Revenue Code of 1986 to expand 
health insurance coverage through the use of high deductible 
health plans in conjunction with health savings accounts (HSAs) 
and to further encourage their use. Specifically, H.R. 6134 (1) 
allows employees to fund HSAs with Flexible Spending Account 
(FSA) and Health Reimbursement Arrangement (HRA) Funds; (2) 
repeals the annual deduction limit on HSA contributions; (3) 
requires the Secretary to announce contribution and deductible 
adjustments by June 1 of each year; (4) expands contribution 
limits for part-year coverage; (5) allows additional employer 
contributions for non-highly compensated employees; and (6) 
permits a onetime transfer from individual retirement accounts 
to HSAs.

b. Health Information Technology Promotion Act of 2006 (H.R. 4157)

    H.R. 4157 was introduced on October 27, 2005 by 
Representative Nancy Johnson, and was ordered favorably 
reported by both the Ways and Means Committee and the Energy 
and Commerce Committee on July 26, 2006. It was passed on the 
House floor on July 27, 2006 by recorded vote of 270-148. H.R. 
4157 would promote a better health information system by 
providing for the coordination, planning and interoperability 
of health information technology, the updating of transaction 
standards and codes and the promotion of health information 
technology to better coordinate health care.

                        3. OTHER HEALTH MATTERS

a. Full Committee Hearings

            i. Health Savings Accounts
    On June 28, 2006, the full Committee on Ways and Means held 
a hearing on Health Savings Accounts.
            ii. Implementation of the Medicare Drug Benefit
    On June 14, 2006, the full Committee on Ways and Means held 
a hearing to receive testimony concerning the implementation of 
the Medicare prescription drug benefit, beneficiary enrollment 
and lessons learned since the initial enrollment deadline of 
May 15.

b. Subcommittee Hearings

            i. Emergency Care
    On July 27, 2006, the Subcommittee held a hearing to 
receive testimony from emergency care professionals and others 
concerning emergency care.
            ii. Price Transparency
    On July 18, 2006, the Subcommittee held a hearing to 
receive testimony from health care professionals and academics 
concerning price transparency.
            iii. Medicare Reimbursement of Physician-Administered Drugs
    On July 13, 2006, the Subcommittee held a hearing to 
receive testimony from the Centers for Medicare and Medicaid 
Services, U.S. Department of Health and Human Services, the 
Medicare Payment Advisory Commission, the U.S. Government 
Accountability Office, and other health professionals 
concerning Medicare reimbursements of physician-administered 
drugs.
            iv. Continuation on Implementation of the Medicare Drug 
                    Benefit
    On May 4, 2006, the Subcommittee held a hearing to receive 
testimony from the Honorable Henry Waxman and health care 
professionals concerning implementation of the Medicare drug 
benefit.
            v. Implementation of the Medicare Drug Benefit
    On May 3, 2006, the Subcommittee held a hearing to receive 
testimony from the Centers for Medicare and Medicaid Services 
and health care professionals concerning implementation of the 
Medicare drug benefit.
            vi. Health Care Information Technology
    On April 6, 2006, the Subcommittee held a hearing to 
receive testimony from the U.S. Department of Health and Human 
Services and others concerning the development and use of 
health care information technology.
            vii. Long-Term Acute Care Hospitals
    On March 15, 2006, the Subcommittee held a hearing to 
receive testimony from the Centers for Medicare and Medicaid 
Services, the Medicare Payment Advisory Commission, and health 
care professionals concerning Medicare payment and coverage 
policies for long-term acute care hospitals.
            viii. MedPAC's March Report on Medicare Payment Policies
    On March 1, 2006, the Subcommittee held a hearing to 
receive testimony from the Medicare Payment Advisory Commission 
and [health care professionals] concerning Medicare payment 
policies.
            ix. Competition in the FEHB Program
    On December 2, 2005, the Subcommittee held a field hearing 
in Milwaukee, Wisconsin to receive testimony from the U.S. 
Government Accountability Office, and health care professionals 
and others concerning the Federal Employees Health Benefits 
Program.
            x. Gainsharing
    On October 7, 2005, the Subcommittee held a hearing to 
receive testimony from the U.S. Department of Health and Human 
Services and health care professionals concerning gainsharing 
between hospitals and physicians.
            xi. Medicare Value-Based Purchasing for Physicians Act
    On September 29, 2005, the Subcommittee held a legislative 
hearing to receive testimony from the Centers for Medicare and 
Medicaid Services and health care professionals concerning the 
Medicare Value-Based Purchasing for Physicians Act.
            xii. Health Care Information Technology
    On July 27, 2005, the Subcommittee held a hearing to 
receive testimony from the U.S. Department of Health and Human 
Services and health care professionals concerning health care 
information technology, and the approach being taken by the 
Administration to speed the adoption of health IT and areas 
where congressional involvement can further these efforts.
            xiii. Value-Based Purchasing for Physicians Under Medicare
    On July 21, 2005, the Subcommittee held a hearing to 
receive testimony from the U.S. Department of Health and Human 
Services and health care professionals concerning value-based 
purchasing for physicians under Medicare. The hearing focused 
on developments since the last Subcommittee hearing in March on 
physician payments and value-based purchasing.
            xiv. Post-Acute Care
    On June 16, 2005, the Subcommittee held a hearing to 
receive testimony from the Centers for Medicare and Medicaid 
Services, the Medicare Payment Advisory Commission, U.S. 
Government Accountability Office, and health care professionals 
concerning post-acute care. The hearing focused on current 
financing for post-acute care services in Medicare; the 
services available across the various post-acute settings; the 
patient assessment instruments used in each settings and the 
commonalities between them; and prospects and suggestions for 
moving ahead with a common patient assessment tool and more 
rational payment system based on beneficiary need rather than 
institutional setting.
            xv. Long Term Care
    On April 19, 2005, the Subcommittee held a hearing to 
receive testimony from the Congressional Budget Office and 
health care professionals concerning long term care. The 
hearing focused on current financing for long term care 
services; the range of services available in the continuum of 
care from home- and community-based services to nursing home 
care; private long term care insurance options, including the 
Long Term Care Partnership programs; and the challenges ahead 
in financing needed services for an aging population.
            xvi. Managing the Use of Imaging Services
    On March 17, 2005, the Subcommittee held a hearing to 
receive testimony from the Medicare Payment Advisory Commission 
and health care professionals concerning managing the use of 
imaging services. The hearing focused on on MedPAC's 
recommendations for managing the use of imaging services, 
especially the need to require physicians to meet quality 
standards as a condition of payment.
            xvii. Measuring Physician Quality and Efficiency of Care 
                    for Medicare Beneficiaries
    On March 15, 2005, the Subcommittee held a hearing to 
receive testimony from the Centers for Medicare and Medicaid 
Services and health care professionals concerning measuring 
physician quality and efficiency of care for Medicare. The 
hearing focused on identifying the steps being taken by CMS and 
others to measure quality and efficiency of physician care.
            xviii. Physician-Owned Specialty Hospitals
    On March 08, 2005, the Subcommittee held a hearing to 
receive testimony from the Medicare Payment Advisory 
Commission, the Centers for Medicare and Medicaid Services, and 
health care professionals concerning physician-owned specialty 
hospitals.
            xix. Medicare Payments to Physicians
    On February 10, 2005, the Subcommittee held a hearing to 
receive testimony from the U.S. Government Accountability 
Office, the Medicare Payment Advisory Commission, and health 
care professionals concerning Medicare payments to physicians.

            D. Legislative Review of Social Security Issues


  1. H. RES.170 REGARDING CLAIMS MADE BY THE PRESIDENT ON THE SOCIAL 
                             SECURITY TRUST

    On March 17, 2005, Rep. Dennis Kucinich introduced H. Res. 
170, which was referred to the House Committee on Ways and 
Means the same day. On April 25, 2005, the Committee considered 
the resolution during a markup session and ordered it to be 
reported adversely by a vote of 22-1. The measure was reported 
adversely on April 27, 2005 (H. Rept. 109-58). The resolution 
was placed on the House Calendar, Calendar No. 29. The 
resolution requested the President to transmit to the House of 
Representatives information in his possession providing 
specific evidence for the following statement he made on 
February 16, 2005, at a meeting in Portsmouth, New Hampshire: 
``And by the way, there is not a Social Security trust.'' The 
Committee found that when the 11 words were read in the context 
of the President's remarks, it was clear that the President was 
discussing the pay-as-you-go nature of the Social Security 
program and the difference between a government and private-
sector trust.

           2. GROWING REAL OWNERSHIP FOR WORKERS ACT OF 2005

    On July 14, 2005, Subcommittee on Social Security Chairman 
McCrery introduced H.R. 3304, the ``Growing Real Ownership for 
Workers (GROW) Act of 2005.'' The bill was referred to the 
Committee on Ways and Means, Subcommittee on Social Security on 
July 20, 2005. The Committee did not act on the bill.
    H.R. 3304 would have established ``GROW'' accounts for all 
workers under the age of 55 at the beginning of 2005, unless 
they chose not to have an account. An independent board would 
have been appointed to manage and administer GROW accounts. 
Each year, after any ``surplus'' Social Security taxes (Social 
Security tax revenues in excess of the amount needed to pay 
benefits and administrative costs) were credited to the Social 
Security Trust Funds, the Secretary of the Treasury would have 
distributed an amount equal to the surplus to the independent 
board, which would then deposit the worker's share of the 
surplus in his or her GROW account. The worker's share of the 
surplus would have equaled a specified percentage of the 
worker's earnings subject to the payroll tax. The percentage 
would have been determined each year based on the relationship 
between the amount of the surplus (if any) and the collective 
amount of wages and self employment income subject to Social 
Security taxes for workers participating in GROW accounts.
    The GROW account deposits would have been automatically 
invested in a fund of marketable U.S. Treasury securities. At 
the beginning of 2009, the independent board would have 
submitted a plan to Congress to offer workers other investment 
options. The board's plan would have gone into effect 
automatically, unless Congress disapproved it.
    Upon retirement, GROW account owners would have received a 
benefit from their accounts and a benefit from the Social 
Security Trust Funds. The benefit from the account would have 
equaled the monthly, inflation-adjusted lifetime payment that 
could be provided from the account at retirement had it been 
invested in the Treasury securities fund. In the case of 
married individuals, this calculation would have also included 
a monthly payment to the surviving spouse. The rest of the 
individual's benefit would have been paid from the Social 
Security Trust Funds. Retirees would have been required to take 
enough of the account balance in the form of lifetime payments 
to ensure combined payments from the account and the trust 
funds equal at least 100 percent of the poverty level. Any 
remaining account balance could have been withdrawn as the 
retiree chose.
    No withdrawals would have been permitted from the account 
prior to the time the individual started collecting Social 
Security retirement benefits. Upon the death of an account 
owner, the assets would have been transferred to the account of 
an eligible spouse and used to pay widow(er)'s Social Security 
benefits. In the absence of a spouse, the account would have 
been transferred to the worker's other heirs.
    The Social Security actuaries evaluated H.R. 3304 and 
determined that it would have extended the solvency of the 
Social Security Trust Funds by two years (from 2041 to 2043) 
under the intermediate assumptions of the 2005 Social Security 
Trustees Report.

 3. BORDER PROTECTION, ANTITERRORISM, AND ILLEGAL IMMIGRATION CONTROL 
                              ACT OF 2005

    On December 6, 2005, Chairman Sensenbrenner of the 
Committee on the Judiciary introduced H.R. 4437, the ``Border 
Protection, Antiterrorism, and Illegal Immigration Control Act 
of 2005.'' The bill was referred on the same day to the 
Committee on the Judiciary, in addition to the Committee on 
Homeland Security. On December 13, 2005, the bill was referred 
jointly and sequentially to the Committee on Ways and Means and 
the Committee on Education and the Workforce until December 14, 
2005, at which time the committees were discharged from 
consideration. The House approved the bill on December 16, 2005 
by a vote of 239-182. The Senate did not take up the bill, but 
instead passed its own bill, S. 2611, the ``Comprehensive 
Immigration Reform Act of 2006;'' however, the Senate did not 
send its bill to the House.
    H.R. 4437 would have enhanced physical security at the U.S. 
borders and interior enforcement of immigration laws. The 
Committee on Ways and Means shared jurisdiction with the 
Committee on the Judiciary on a measure to create a mandatory 
employment eligibility verification system that would have been 
operated by the Secretary of Homeland Security in collaboration 
with the Commissioner of Social Security. This system would 
have replaced the current verification system, the ``Basic 
Pilot'' program, which employers may use voluntarily. This bill 
would have required employers to verify all new hires beginning 
2 years after enactment and all existing employees not 
previously verified no later than 6 years after enactment.

         4. SOCIAL SECURITY TRUST FUNDS RESTORATION ACT OF 2006

    On December 6, 2006, Senator Charles Grassley introduced S. 
4091, the ``Social Security Trust Funds Restoration Act of 
2006,'' along with co-sponsor Senator Baucus. The bill passed 
the Senate without amendment by unanimous consent on December 
7, 2006 and was received by the House the same day. On December 
9, 2006, Chairman Thomas asked for unanimous consent that the 
Committee on Ways and Means be discharged from further 
consideration of the Senate bill and that it be immediately 
considered in the House. The House passed the legislation 
without objection .\9\
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    \9\ At the time of printing, the President had not signed S. 4091 
into law.
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    S. 4091 corrects bookkeeping errors associated with the 
Social Security Administration's voluntary program to withhold 
income taxes from Social Security benefit payments. The 
Commissioner of Social Security and the Fiscal Assistant 
Secretary of the Department of the Treasury sent a joint 
letter, along with draft legislative language, to the House and 
Senate explaining that the amount of taxes withheld from 
beneficiaries was accurate, but that the Social Security 
Administration made substantial overpayments to the Internal 
Revenue Service for tax years 1999-2005. The Internal Revenue 
Service reimbursed the Social Security Trust Funds for the 
overpayments plus interest for years 2002-2005, but could not 
reimburse the trust funds for years 1999-2001 without the 
authority provided in the legislation due to the 3 year statute 
of limitation on refund claims.

            E. Legislative Review of Human Resources Issues


               1. TEMPORARY ASSISTANCE FOR NEEDY FAMILIES

a. Reauthorization of the Temporary Assistance for Needy Families 
        Program

    H.R. 240, the ``Personal Responsibility, Work, and Family 
Promotion Act of 2005,'' was introduced on January 4, 2005 by 
Representative Deborah Pryce (R-OH), with Subcommittee on Human 
Resources Chairman Herger and full Committee Chairman Thomas as 
original cosponsors. H.R. 240 would have extended and made 
improvements to Temporary Assistance for Needy Families (TANF) 
and related programs including child care, child support 
enforcement, and child protection, and reflected an updated 
version of legislation approved by the House of Representatives 
during the 107th (H.R. 4737) and 108th (H.R. 4) Congresses. The 
TANF program, first authorized by the Personal Responsibility 
and Work Opportunity Reconciliation Act of 1996 (P.L. 104-193, 
often called the 1996 welfare reform law), provides assistance 
to about 2 million low-income families through a program of 
temporary cash benefits, work supports, and other assistance. 
The 1996 welfare reform law authorized the TANF program through 
September 30, 2002. In the absence of agreement on a long-term 
reauthorization bill, the 107th, 108th and 109th Congresses 
approved a total of twelve short-term extensions of TANF and 
related programs (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. 240 would have extended the 
authorization of the TANF block grant through FY2010 at its 
current level of $16.6 billion per year, and would have 
increased funding for the Child Care and Development Block 
Grant (for further detail, see section on Child Care, below). 
Title I also would have amended the purposes of TANF to focus 
additional efforts on improving child well-being, and would 
have focused additional funding specifically on promoting 
healthy marriage and responsible fatherhood. The legislation 
would have specified universal engagement and self-sufficiency 
plan requirements for all families receiving cash assistance. 
H.R. 240 would have gradually increased the overall State work 
participation rate requirement to 70 percent by FY2010 and 
raised the total number of required hours in certain 
activities, so that more adults on welfare would have been 
expected to engage in a total of 40 hours per week of work (24 
hours) and other productive activities (16 hours) in exchange 
for their welfare benefit checks. The legislation also would 
have eliminated the separate and higher State work 
participation rate requirement applicable to two-parent 
families, and updated the credit for net caseload reduction 
used in calculating the effective work rate that States must 
achieve to satisfy Federal requirements. Title III of H.R. 240 
would have amended the child support enforcement program, as 
described in further detail under the Child Support Enforcement 
section below. Title IV would have extended and expanded waiver 
authority for Federal child protection programs administered 
under Title IV-E of the Social Security Act. Title V would have 
required review of an increased number of disability 
determinations before making benefit payments under the 
Supplemental Security Income program. Title VI would have 
authorized demonstration projects to allow States additional 
flexibility to coordinate multiple Federal programs that 
provide assistance to low-income families. Titles VII and VIII 
would have reauthorized the abstinence education and 
transitional medical assistance programs through FY2010.
    At a February 10, 2005 Subcommittee hearing, witnesses 
testified about welfare reauthorization proposals and related 
programs. Witnesses included a representative from the U.S. 
Department of Health and Human Services (HHS), program 
administrators, and policy experts. During a February 17, 2005 
full Committee hearing on the President's FY2006 budget 
proposals, HHS Secretary Leavitt discussed the TANF program and 
reauthorization proposals.
    H.R. 240 was considered in the Subcommittee on Human 
Resources on March 15, 2005 and was reported favorably to the 
full Committee with amendment. Provisions from H.R. 240 were 
included in the Committee on Ways and Means' recommendations to 
the Committee on the Budget for inclusion in budget 
reconciliation legislation. The recommendations were reported 
out of the full Committee as amended by a recorded vote of 22 
to 17 on October 26, 2005. The recommendations were included in 
Title VIII of H.R. 4241, the Deficit Reduction Act of 2005. On 
November 18, 2005, the House amended S. 1932, the Deficit 
Reduction Act of 2005, with the text of H.R. 4241 and passed 
the bill on a vote of 217 to 215. The conference report for S. 
1932 was adopted in the House by a vote of 212 to 206 on 
December 19, 2005. On December 21, 2005, the Senate voted 51 to 
50 to approve an amended version of the conference report and 
sent S. 1932 back to the House for final action. On February 1, 
2006 the House passed the amended conference report on S. 1932 
by a vote of 216 to 214. The bill was signed into law on 
February 8, 2006 (P.L. 109-171).
    The Deficit Reduction Act of 2005 extended the 
authorization of the TANF block grant through FY2010, with 
block grant funding for States and territories maintained at 
the current level of $16.6 billion per year; TANF supplemental 
grant funding was continued at current law levels through 
FY2008. The Act also provided for a total of $1 billion in 
additional funding for mandatory child care, through FY2010. 
The Deficit Reduction Act of 2005 also updated the caseload 
reduction credit, effective October 1, 2006, to provide States 
with credit towards their work participation requirements based 
on caseload declines that have occurred since FY2005. The law 
also provided $150 million in each of fiscal years 2006 through 
2010 to the Secretary of Health and Human Services (HHS) for 
making healthy marriage promotion, responsible fatherhood, and 
related grants.

b. Extensions of the Temporary Assistance for Needy Families Program

    H.R. 1160, the Welfare Reform Extension Act of 2005, 
reauthorized the TANF program through June 30, 2005. The 
legislation was introduced on March 8, 2005, was passed by the 
House on a voice vote on March 14, 2005, was agreed to by 
unanimous consent by the Senate without amendment on March 15, 
2005, and was signed into law by the President on March 25, 
2005 (P.L. 109-4).
    A second TANF extension, H.R. 3021, the TANF Extension Act 
of 2005, was introduced on June 22, 2005 to extend the program 
through September 30, 2005. The House passed the extension by a 
voice vote on June 29, 2005, the Senate agreed without 
amendment by unanimous consent on June 30, 2005, and the 
President signed H.R. 3021 into law on July 1, 2005 (P.L. 109-
19).
    H.R. 3672, the TANF Emergency Response and Recovery Act of 
2005 (P.L. 109-68) included an extension of the TANF program 
through December 31, 2005. (Information about additional 
provisions in H.R. 3672 is provided in the Emergency 
Legislation in Response to Hurricane Katrina section below.)
    H.R. 4635, the TANF and Child Care Continuation Act of 
2005, was introduced on December 18, 2005. This legislation 
extended TANF and related programs through March 31, 2006. The 
House passed the bill by voice vote on December 19, 2005. H.R. 
4635 passed the Senate by unanimous consent on December 22, 
2005, and the President signed the bill into law on December 
30, 2005 (P.L. 109-161).

c. Emergency Legislation in Response to Hurricane Katrina

    The TANF Emergency Response and Recovery Act of 2005, H.R. 
3672, was introduced on September 7, 2005 to provide additional 
TANF and related assistance to families affected by Hurricane 
Katrina. The legislation provided additional resources and 
flexibility to serve low-income families affected by the 
hurricane and who remained in Louisiana, Mississippi and 
Alabama, as well as those who fled from hurricane-affected 
areas to other States. The bill was passed in the House by 
voice vote on September 8, 2005, was passed in the Senate by 
unanimous consent on September 15, 2005, and was signed into 
law by the President on September 21, 2005 (P.L. 109-68).
    On October 6, 2005 the Social Services Emergency Relief and 
Recovery Act of 2005, H.R. 3971, was introduced and passed by 
voice vote in the House. To help recovery after hurricanes 
affecting the Gulf States, Title II of the bill directed the 
Secretary of Labor to transfer from the Federal unemployment 
account: (1) $15 million to the account of Alabama in the 
Unemployment Trust Fund; (2) $400 million to the account of 
Louisiana in the Unemployment Trust Fund; and (3) $85 million 
to the account of Mississippi in the Unemployment Trust Fund. 
It also authorized any State to assist in the administration of 
unemployment benefit claims on behalf of any other State, if a 
major disaster was declared in another State. The bill, as 
amended, passed the Senate by unanimous consent on October 7, 
2005 and was signed by the President on October 20, 2005 (P.L. 
109-91).
    On December 19, 2005, the House passed the conference 
report on H.R. 2863, the Department of Defense Appropriations 
Act of 2006, by a vote of 308 to 106 with two Members voting 
present. Section 302 of the conference report included a 
provision to provide the U.S. Secretary of HHS with authority 
to waive certain requirements under the Child Care and 
Development Block Grant for States affected by Hurricane 
Katrina or States serving significant numbers of individuals 
adversely affected by a Gulf hurricane disaster. The conference 
report passed the Senate on December 21, 2005 by a vote of 93 
to 0 and was signed into law by the President on December 30, 
2005 (P.L. 109-148).

d. Tenth Anniversary of the 1996 Welfare Reforms

    H. Con. Res. 438, a resolution expressing the sense of the 
Congress that ``continuation of the welfare reforms provided 
for in the Personal Responsibility and Work Opportunity 
Reconciliation Act of 1996 should remain a priority'' was 
introduced by Representative E. Clay Shaw (R-FL) on June 27, 
2006 and was passed by the House by a voice vote on July 18, 
2006. The resolution expressed the sense of the Congress that 
increasing success in moving families from welfare to work, as 
well as in promoting healthy marriage and other means of 
improving child well-being, as promoted by the welfare reforms 
in the 1996 welfare reform law, are very important Government 
interests and should remain priorities in the years ahead for 
Federal and State agencies responsible for assisting needy 
families and others at risk of poverty and dependence on 
government benefits.

                             2. CHILD CARE

    H.R. 240, the ``Personal Responsibility, Work, and Family 
Promotion Act of 2005,'' 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 2005 to $2.917 billion for each of fiscal years 2006 through 
2010, for a total increase of $1 billion over the 5-year 
period.
    H.R. 4241, the ``Deficit Reduction Act of 2005,'' which 
included legislation to reauthorize TANF and related programs, 
would have increased mandatory funds for the Child Care and 
Development Block Grant by a total of $500 million over a 5-
year period and would have increased the share of TANF funds 
that States may transfer to the Child Care and Development 
Block Grant and Social Services Block Grant.
    On February 1, 2006, the House passed the amended 
conference report on S. 1932, the Deficit Reduction Act of 
2005, and the bill was signed into law on February 8, 2006 
(P.L. 109-171). P.L. 109-171 increased mandatory funds for the 
Child Care and Development Block Grant under the Committee on 
Ways and Means' jurisdiction from $2.717 billion in 2005 to 
$2.917 billion for each of fiscal years 2006 through 2010, for 
a total increase of $1 billion over the 5-year period.

                      3. CHILD SUPPORT ENFORCEMENT

    Title III of H.R. 240, the ``Personal Responsibility, Work, 
and Family Promotion Act of 2005,'' would have amended the 
child support enforcement program to (1) provide matching 
Federal funds to States that pass through a limited amount of 
child support to families receiving cash welfare benefits, (2) 
allow States to distribute all child support collected to 
former welfare families, and (3) impose a $25 annual user fee 
on certain child support cases, among other changes.
    Title VIII of H.R. 4241, the ``Deficit Reduction Act of 
2005,'' included a number of child support provisions, such as 
providing matching Federal funds to States that pass through a 
limited amount of child support to families receiving cash 
welfare benefits, allowing States to distribute all child 
support collected to former welfare families, and imposing a 
$25 annual user fee on certain child support cases. In 
addition, Title VIII would have reduced the rate of Federal 
reimbursement for State child support administrative expenses 
from 66 percent to 50 percent by 2010 in order to make the rate 
consistent with other major benefit programs.
    On February 1, 2006, the House passed the amended 
conference report on S. 1932 and the bill was signed into law 
on February 8, 2006 (P.L. 109-171). The bill included 
provisions 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 included provisions to prevent States 
from receiving Federal matching reimbursement for spending 
Federal child support incentive payments and to reduce the 
reimbursement rate for paternity establishment costs from 90 
percent to 66 percent.

                    4. SUPPLEMENTAL SECURITY INCOME

    Title V of H.R. 240 would have amended Title XVI of the 
Social Security Act to require review of a specified share of 
State agency disability determinations before making benefit 
payments under the Supplemental Security Income (SSI) program. 
Title VIII of H.R. 4241, the ``Deficit Reduction Act of 2005,'' 
which was introduced on November 7, 2005, included this SSI 
disability determination review provision from H.R. 240. It 
also included a provision to improve program consistency in the 
distribution of lump sum SSI benefit payments. The provision 
lowered the threshold for requiring lump sum payment of past-
due benefit payments from the equivalent of 12 months of 
maximum benefit payments to the equivalent of 3 months of such 
payments. A subsequent version of this legislation (S. 1932) 
was signed into law on February 8, 2006 (P.L. 109-171), which 
included both SSI provisions, contributing to improved program 
integrity.
    H.R. 804, a bill ``To exclude from consideration as income 
certain payments under the national flood insurance program,'' 
amended the National Flood Insurance Act of 1968 to declare 
that assistance provided under a program for flood mitigation 
activities with respect to a property shall not be considered 
income or a resource of the owner of the property when 
determining eligibility for or benefit levels under any income 
assistance or resource-tested program (that is, including SSI) 
that is funded in whole or in part by a Federal agency or by 
appropriated Federal funds. The bill passed the House by voice 
vote on July 12, 2005, was passed by the Senate without 
amendment on September 8, 2005, and was signed by the President 
on September 20, 2005 (P.L. 109-64). The Committee did not act 
on the bill, although portions of the bill fell within the 
Committee's jurisdiction due to its affecting eligibility for 
and benefit levels under certain programs under the Committee's 
jurisdiction, including SSI.
    H.R. 1815, the National Defense Authorization Act for 
FY2006, passed the House on April 25, 2005 by a vote of 390 to 
39. The bill was amended and passed in the Senate by unanimous 
consent on November 15, 2005. As passed in the Senate, H.R. 
1815 included an SSI provision affecting certain military 
families that include an individual being called to active 
duty. The provision would allow individuals in families that 
include an adult called to active duty status up to 24 months 
to regain to SSI eligibility without requiring another 
disability application. The conference report on H.R. 1815 
included the SSI provision and was passed in the House on 
December 19, 2005 by a vote of 374 to 41. The Senate agreed to 
the conference report by voice vote on December 21, 2005 and 
the President signed the bill on January 6, 2006 (P.L. 109-
163).

             5. CHILD PROTECTION, FOSTER CARE, AND ADOPTION

    Title IV of H.R. 240 would have extended and expanded 
waiver authority for Federal child protection programs 
administered under Title IV-E of the Social Security Act. Title 
VIII of H.R. 4241 would have extended and expanded waiver 
authority for Federal child protection programs administered 
under Title IV-E of the Social Security Act. Title VIII of H.R. 
4241 also included a provision that would have clarified the 
intent of Congress by restating longstanding eligibility 
requirements for Federal foster care and adoption assistance; 
in addition, the title included a provision that would have 
clarified the circumstances under which States may claim 
Federal administrative funds for certain children in or at risk 
of being placed in foster care. On February 1, 2006, the House 
passed the amended conference report on S. 1932 and the 
President signed the bill into law on February 8, 2006 (P.L. 
109-171). Section 7401 of P.L. 109-171 provided $20 million in 
each of fiscal years 2006 through 2010 for grants to each 
State's highest court to improve data collection and training 
related to child abuse and neglect cases. Section 7402 
increased the mandatory funding available for the Title IV-B-2 
Promoting Safe and Stable Families Program from $305 million in 
FY2005 to $345 million in FY2006. A provision to clarify the 
circumstances under which States may claim Federal 
administrative funds for certain children in or at risk of 
being placed in foster care was included in Section 7403. 
Section 7404 clarified the intent of Congress and restated 
longstanding eligibility requirements for Federal foster care 
and adoption assistance and included a provision to clarify the 
circumstances under which States may claim Federal 
administrative funds for certain children in or at risk of 
being placed in foster care.
    On September 14, 2005 H.R. 3132, the ``Children's Safety 
Act of 2005,'' passed the House by a vote of 371-52. Title V of 
the legislation would have required background checks and 
checks of national crime information databases and State child 
abuse registries before approval of foster or adoptive 
placements. Provisions in the legislation also would have 
eliminated the ability of any additional States to opt-out of 
Federal background check requirements restricting Federal 
support for the placement of children with foster or adoptive 
parents with serious criminal histories (while allowing those 
States that currently opt-out of these requirements to continue 
to do so until October 1, 2008). The Committee did not act on 
the bill, portions of which affect foster care and adoption 
programs under the Committee's jurisdiction. On July 25, 2006 
the House passed by voice vote the Senate-amended version of 
H.R. 4472, the Adam Walsh Child Protection and Safety Act of 
2006 and the bill was signed into law on July 27, 2006 (P.L. 
109-248). Title V of this act included provisions previously 
passed as part of H.R. 3132.
    S. 1894, the Fair Access Foster Care Act of 2005, which 
amended Part E of Title IV of the Social Security Act to 
provide for the making of foster care maintenance payments to 
private for-profit agencies, was passed in the House by a vote 
of 408 to 1 on November 9, 2005 and was signed into law by the 
President on November 22, 2005 (P.L. 109-113).
    On May 24, 2006 the House passed by voice vote H.R. 5403, 
the Safe and Timely Interstate Placement of Foster Children Act 
of 2006. H.R. 5403 was passed in the Senate by unanimous 
consent on June 23, 2006 and was signed into law by the 
President on July 3, 2006 (P.L. 109-239). The bill amended the 
Social Security Act to require that States establish a 60 day 
Federal deadline for completing interstate home studies but 
provides that through September 30, 2008, States can have up to 
a total of 75 days if, for example, they document circumstances 
beyond their control that prevented the home study from being 
completed within 60 days. The law also authorized incentive 
payments of $1,500 for each interstate home study that a State 
completes within 30 days and encourages identification and 
consideration of in-State and out-of-State placement options as 
part of currently required permanency planning activities for 
children who will not be reunified with their parents. The bill 
required courts to notify any foster parents, pre-adoptive 
parents, and relative caregivers of a child in foster care of 
any court proceeding to be held concerning the child, 
strengthened the right of these individuals to be heard at 
permanency planning proceedings and required States to give 
children aging out of foster care a free copy of their health 
and education record.
    H. Res. 959, a resolution recognizing and supporting the 
success of the Adoption and Safe Families Act of 1997 (P.L. 
105-89) in increasing adoption and encouraging adoption 
throughout the year, was introduced by Representative Dave Camp 
on July 27, 2006. The House passed H. Res. 959 by voice vote 
under Suspension of the Rules on September 19, 2006.
    On May 23, 2006 the Subcommittee held a hearing to review 
specific proposals to improve child protection services, 
including options for extending programs under the 
Subcommittee's jurisdiction such as the Promoting Safe and 
Stable Families (PSSF) and Child Welfare Services (CWS) 
programs. Following this hearing, on June 20, 2006, Chairman 
Wally Herger introduced H.R. 5640, the ``Child and Family 
Services Improvement Act of 2006,'' which was cosponsored by 
Human Resources Subcommittee Ranking Member Jim McDermott and 
several other Committee Members. H.R. 5640 was considered and 
amended and then reported favorably by voice vote from the 
Committee on June 29, 2006. On July 25, 2006, the House amended 
S. 3525, the ``Improving Outcomes for Children Affected by Meth 
Act of 2006,'' with the text of H.R. 5640 and passed the bill 
by voice vote. The Senate concurred to the House amendments 
with an amendment to S. 3525 on September 20, 2006. The Senate-
approved version of S. 3525, as amended, was adopted in the 
House by a voice vote on September 26, 2006 and the bill was 
signed into law on September 28, 2006 (P.L. 109-288). P.L. 109-
288 made several improvements to the nation's child protection 
system. The law included provisions to: (1) reauthorize the 
PSSF program through FY 2011 while authorizing $345 million per 
year in mandatory funds and $200 million per year in 
discretionary funds; (2) target resources to ensure children in 
foster care are visited by caseworkers on at least a monthly 
basis and to assist regional partnerships in combating the 
effects of parental substance abuse, particularly 
methamphetamine abuse, on the child protection system; (3) 
improve the Child Welfare Services program; (4) reauthorize the 
Court Improvement Program through FY2011; (5) reauthorize and 
improve the Mentoring Children of Prisoners Program through 
FY2011; and (6) appropriate for FY2006 the additional $40 
million in mandatory funding provided under the P.L. 109-171 
for the PSSF program.
    On December 8, 2006, the House passed H.R. 6111, the Tax 
Relief and Health Care Act of 2006, by a vote of 367 to 45. 
Provisions in Title IV of the legislation require that each 
State plan for foster care and adoption assistance describe 
procedures the State has in effect for verifying the 
citizenship or immigration status of any foster child in State 
custody. The Senate passed H.R. 6111 on December 9, 2006 and 
the bill was signed into law on December 20, 2006.\10\
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    \10\ At the time of printing, the Public Law number for H.R. 6111 
was not available.
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                      6. UNEMPLOYMENT COMPENSATION

    See the Emergency Legislation in Response to Hurricane 
Katrina section above regarding action on unemployment 
compensation provisions included in H.R. 3971, the Social 
Services Emergency Relief and Recovery Act of 2005 (P.L. 109-
91).

                            7. REPATRIATION

    On July 26, 2006 the House passed by unanimous consent the 
Senate-amended version of H.R. 5865, the Returned Americans 
Protection Act of 2006. The President signed H.R. 5865 on July 
27, 2006 (P.L. 109-250). The law amended Title XI of the Social 
Security Act to temporarily (through the end of FY2006) lift 
the $1 million annual cap on the ``Assistance for U.S. Citizens 
Returned from Foreign Countries'' repatriation program to help 
meet the need for temporary assistance of U.S. citizens 
returning to the U.S. due to violence in Lebanon. The cost of 
this increase was offset by allowing States to use the child 
support program's National Directory of New Hires to verify 
Food Stamp participants' employment and wage information. The 
Secretary of HHS assured Ways and Means Chairman Thomas in 
writing that the HHS Inspector General will report to Congress 
by March 1, 2007 on how program funds were spent to assist 
those repatriating from Lebanon, including by providing a 
breakdown of administrative costs versus direct assistance such 
as travel and lodging expenses. This additional information 
will help Congress fulfill its responsibility to ensure the 
proper use of taxpayer funds.

                  F. Legislative Review Of Debt Issues

    On April 28th, 2005, the House and Senate agreed to the 
conference report on H. Con. Res. 95, the Concurrent Resolution 
on the Budget for Fiscal Year 2006, which included in it 
instructions to the Committee on Ways and Means to increase the 
statutory debt limit from $8.184 trillion to $8.965 trillion. 
The conference report (H. Rept. 109-62) was agreed to by the 
House by a vote of 214-211, and by the Senate by a vote of 52-
47. As a result of the adoption of the FY2006 budget, H.J. Res. 
47, a bill to increase the statutory limit on the public debt, 
was deemed passed in the House pursuant to House Rule XXVII. 
H.J. Res. 47, which increased the debt limit by $781 billion to 
$8.965 trillion, was passed by the Senate on March 16, 2006 
without amendment by a Yea-Nay vote of 52-48, and was signed 
into law by the President on March 20, 2006 (P.L. 109-182).

                          II. Oversight Review


                          A. Oversight Agenda

                       Committee On Ways And Means,
                             U.S. House Of Representatives,
                                  Washington, DC, February 2, 2005.
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 109th Congress.

                             FULL COMMITTEE

    1. Tax Reform. The full Committee intends to hold hearings 
to examine proposals to reform Federal taxation.
    2. Fiscal Year 2006 and 2007 Budget Initiatives Regarding 
Taxes. The full Committee intends to hold hearings to receive 
information regarding tax legislation proposed in the 
President's 2006 and 2007 budgets.
    3. Strengthening Social Security. The full Committee 
intends to hold hearings to examine various issues affecting 
the well-being of individual recipients, the financial 
challenges facing Social Security, and options to address those 
challenges.

                       SUBCOMMITTEE ON OVERSIGHT

    1. Internal Revenue Service Budget and Filing Season. The 
Subcommittee intends to hold hearings in both 2005 and 2006 to 
review the Administration's budget request for the Internal 
Revenue Service (IRS) and the annual tax filing season. In 
particular, the Subcommittee will review how the IRS is 
balancing enforcement efforts with taxpayer service and 
modernizing its computer systems.
    2. Improving IRS Administration of Tax Laws. The 
Subcommittee will review proposals to improve the quality, 
efficiency, and fairness of IRS tax administration, including 
recently enacted legislation to improve IRS debt collection 
procedures. The Subcommittee will monitor new regulations or 
policies proposed or implemented by the IRS and to hold 
hearings or investigations as appropriate.
    3. Pension Benefit Guaranty Corporation. The Subcommittee 
will examine developments facing defined benefit pension plans, 
and the current and future liability facing the Pension Benefit 
Guaranty Corporation (PBGC) that covers the pensions of 
approximately 44 million workers.
    4. Review of Tax Exempt Organizations. The Subcommittee 
will continue to review tax exempt organizations and intends to 
hold hearings in coordination with the full Committee and other 
Subcommittees on the appropriate role of tax exempt 
organizations. The Subcommittee will review current law, the 
adequacy of IRS oversight and reporting requirements, and 
consider recommendations for reform. The Subcommittee will also 
explore the role of Internal Revenue Code (IRC) Section 527 
organizations have played in political campaigns.
    5. Underground Economy. The Subcommittee will review 
information concerning the underground economy, its size, 
growth trends, and implications for tax policy.
    6. Income Tax Compliance. The Subcommittee will continue to 
monitor IRS efforts to assure compliance with individual and 
corporate tax laws, including its efforts to improve compliance 
in the Earned Income Tax Credit (EITC) program and in other 
areas of tax law compliance. The IRS conducted a pilot 
initiative in 2004 to test new enforcement techniques, and the 
Subcommittee plans to review the results of these efforts and 
any new IRS initiatives. In addition, the Subcommittee will 
monitor pertinent reports by IRS, Treasury, JCT, and the GAO on 
the tax gap or other compliance matters as such reports become 
available.
    7. Taxpayer Rights. The Subcommittee will continue to 
monitor the implementation of taxpayer rights provisions in the 
IRS Reform and Restructuring Act (RRA 98) (P.L. 105-206) and 
subsequent taxpayer rights legislation and will evaluate new 
proposals to enhance taxpayer rights.
    8. Taxpayer Privacy. The Subcommittee will examine 
compliance with taxpayer privacy issues under IRC Section 6103.
    9. Oversight of Drug Interdiction Efforts. The Oversight 
Subcommittee will review the extent of federal drug 
interdiction activities under the current tax and trade laws 
administered by the IRS and in coordination with the U.S. 
Customs Service.
    10. 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 
intends to hold a hearing to give the Administration an 
opportunity to describe its trade policy for 2005 and respond 
to Member questions. The Subcommittee intends to work with the 
Administration under the terms of the Trade Act of 2002 (P.L. 
107-210), given the expiration of Trade Promotion Authority 
(TPA) in 2005 unless the Administration requests renewal until 
2007.
    2. World Trade Organization. The Subcommittee intends to 
hold hearings on United States preparations for the December 
2005 WTO Ministerial in Hong Kong and progress in the ongoing 
negotiations on the Doha Development Agenda, particularly with 
respect to agriculture, services, industrial tariffs, and 
development issues. The Subcommittee intends to continue its 
oversight over U.S. participation in the WTO in keeping with 
section 125 of the Uruguay Round Agreements Act (P.L. 103-465).
    3. Bilateral Free Trade Agreements with Central America and 
Bahrain. The Subcommittee will continue its oversight of the 
negotiations for bilateral free trade agreements with Central 
America (Costa Rica, El Salvador, Guatemala, Honduras, 
Nicaragua, and the Dominican Republic) and Bahrain. Now that 
these negotiations have concluded, the Subcommittee will 
continue to consult with the Administration and at the 
appropriate time will hold hearings on the agreements and 
consider implementing legislation under TPA processes.
    4. Bilateral and Regional Free Trade Agreements Under 
Negotiation. The Subcommittee will continue its oversight and 
assess the status of negotiations for bilateral free trade 
agreements with countries for which the Administration has 
notified Congress of its intent to negotiate: Panama; the 
Andean countries (Colombia, Ecuador, Peru, and Bolivia); the 
Southern African Common Market (Botswana, Lesotho, Namibia, 
South Africa and Swaziland); Thailand; the United Arab 
Emirates; Oman; and the Free Trade Area of the Americas. When 
these negotiations are concluded, the Subcommittee expects to 
hold hearings on the agreements and will consider implementing 
legislation under TPA processes. In addition, the Subcommittee 
will explore whether other countries may be appropriate 
candidates for free trade agreements and will examine the 
effect on U.S. interests of free trade agreements or lesser 
bilateral agreements concluded by U.S. trading partners.
    5. Bilateral Free Trade Agreements Entered into Force. The 
Subcommittee will continue its oversight to assess the status 
of agreements that have already been concluded and for which 
Congress has passed implementing legislation under TPA (Chile, 
Singapore, Australia, and Morocco).
    6. Miscellaneous Duty Suspensions and Technical Corrections 
to U.S. Trade Laws. The Subcommittee intends to consider 
legislation to temporarily suspend duties on noncontroversial 
products.
    7. U.S. Trade Remedy Laws. The Subcommittee will continue 
to review the application of U.S. antidumping, countervailing 
duty, general safeguard, product-specific safeguard, and 
textile 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 continue to monitor the status 
of WTO 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.
    8. Authorizations for the Department of Homeland Security, 
the Office of the United States Trade Representative and the 
U.S. International Trade Commission. The Subcommittee intends 
to hold hearings on authorizations for the trade agencies for 
FY 2006 and 2007 and work towards passage of authorization 
legislation. The Subcommittee will review funding for the 
customs revenue functions of the Department including, but not 
limited to, Customs Automated Commercial Environment (CACE), 
textile transshipment 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 U.S. Department of Homeland Security and will continue 
to conduct oversight of that reorganization and its impact on 
the collection of revenue and trade facilitation.
    9. User Fees. The Subcommittee will continue its oversight 
of Customs user fees, including the amount of the fees and 
their relationship to the actual cost for providing services. 
The Subcommittee will examine issues surrounding the 
Consolidated Omnibus Reconciliation Act of 1985 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 U.S. Department of 
Homeland Security. The Subcommittee will consider whether 
Customs is implementing requirements of the Trade Act of 2002 
and the American Jobs Creation Act of 2004 (P.L. 108-357) 
related to user fees.
    10. Trade Adjustment Assistance. 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 (P.L. 107-210).
    11. Trade Relations with China. The Subcommittee will 
continue to monitor China's compliance with its WTO obligations 
and its role in the global marketplace. The Subcommittee will 
also continue to examine China's macroeconomic policies and 
will consult with the Administration to address issues that 
arrive.
    12. Normal Trade Relations with Jackson-Vanik Countries. 
The Subcommittee will continue its oversight over the 
application of Jackson-Vanik provisions for countries subject 
to this statute. The Subcommittee will also continue its 
oversight over Presidential grants of Jackson-Vanik waivers and 
determinations in compliance with Jackson-Vanik requirements. 
In addition, the Subcommittee will continue to consult with the 
Administration concerning the progress of these countries in 
negotiating their accession to the WTO.
    13. Trade Preference Legislation. The Subcommittee will 
continue its oversight over the Trade and Development Act of 
2000 (P.L. 106-606) (Africa/Caribbean Basin Initiative), the 
enhancement to these programs contained in the Trade Act of 
2002, the Andean Trade Preferences Act, and the AGOA 
Acceleration Act to ensure that the legislation is being 
implemented in a manner consistent with Congressional intent. 
The Subcommittee will continue its efforts, begun in the 108th 
Congress, to extend preferential benefits to Haiti. In 
addition, the Subcommittee will also examine whether preference 
programs should be extended to other countries.
    14. Textiles and Apparel. The Subcommittee will continue 
its oversight as to: the value of trade preference programs and 
their effect on U.S. industries; impact of the elimination of 
textile quotas in January 2005 on U.S. industries, countries 
receiving trade preferences, and other countries; effectiveness 
of efforts to halt illegal transshipment; and the use of 
textile safeguards (particularly with respect to transparency 
and application of statutory standards).
    15. Sanctions Reform. In response to the dramatic growth in 
the imposition of unilateral economic sanctions and their 
impact on U.S. trade and competitiveness in international 
markets, the Subcommittee will continue its oversight on the 
use and effectiveness of U.S. unilateral trade sanctions, in 
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.
    16. Burma. In keeping with the provisions of the Burmese 
Freedom and Democracy Act of 2003 (P.L. 108-61), the 
Subcommittee will examine on a yearly basis whether import 
sanctions against Burma (Myanmar) should be continued.
    17. 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.
    18. 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.
    19. 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. Medicare Program Oversight. The Subcommittee intends to 
hold a hearing to evaluate the management of the Medicare 
program by the Centers for Medicare and Medicaid Services 
(CMS). The Subcommittee will explore changes that could be made 
to improve CMS's efficiency and its interactions with 
beneficiaries and the providers who serve them. The 
Subcommittee will examine CMS's progress on implementing the 
changes required by the Medicare Modernization Act (MMA) (P.L. 
108-173).
    2. Medicare Payments for Physician Services. The 
Subcommittee intends to hold hearings to examine Medicare 
reimbursement for physician services, including problems 
associated with the Sustainable Growth Rate formula and will 
explore alternative payment structures. In addition, the 
Subcommittee will examine creating incentives to promote 
physician performance and efficiency and will look at issues 
surrounding physician resource use. Geographic variations in 
payments to physicians will also be scrutinized. Finally, the 
Subcommittee will continue its oversight of payment adequacy 
for oncology related services, drugs, and biologics, including 
the changes made by the MMA.
    3. Medicare Payment for Hospital Services. The Subcommittee 
intends to examine pricing transparency for hospital services. 
In addition, the Subcommittee will conduct oversight of the 
current reimbursement structure under Medicare, including 
potential hearings on operation of the wage index and 
differences between specialty and community based institutions. 
The Subcommittee intends to hold a hearing on paying for 
performance and physician resource use in the hospital setting. 
The Subcommittee intends to hold a hearing on financial 
reporting for hospitals, including instruments to better 
reflect costs and to promote the timeliness of data reporting.
    4. Medicare Payments for Post-Acute Care. The Subcommittee 
intends to hold a hearing on payments to post-acute care 
providers in the Medicare program to determine whether the 
payment structures create incentives to inappropriately shift 
site of care to more lucrative settings. In addition, the 
Subcommittee will study proposals that provide financial 
security to individuals for long term care costs outside of the 
traditional Medicare structure.
    5. Retiree Health Coverage and Interaction with Medicare. 
The MMA required the U.S. Government Accountability Office 
(GAO) to conduct initial and final reports on the trends in 
retiree health coverage, new options available to employers to 
subsidize coverage included in the MMA and what impact, if any, 
these subsidies had on retiree coverage. The Subcommittee will 
examine implementation of the MMA subsidies as they relate to 
retiree health coverage.
    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. The Subcommittee will also examine the issue 
of Medicare program solvency.
    7. Medically Uninsured. The Subcommittee intends to hold a 
hearing on options to reduce the number of individuals and 
families without health insurance. The hearing will include an 
examination of tax credits, reinsurance of risk and purchasing 
pools, among other solutions.
    8. New Technologies in the Medicare Program. The 
Subcommittee intends to hold a hearing on CMS policies that 
foster or hinder the adoption of new technologies in the 
Medicare program, including coverage and reimbursement policies 
and national and local coverage determinations.
    9. Other Medicare Payments. The Subcommittee intends to 
hold a hearing on the appropriateness of payments to other 
Medicare providers, including home health agencies, skilled 
nursing facilities, end stage renal disease providers, durable 
medical equipment suppliers and others. Such an examination 
will include proposals to make Medicare more efficient and 
responsive.
    10. Health Savings Accounts. The Subcommittee intends to 
hold hearings and conduct other oversight activities on Health 
Savings Accounts.
    11. Medicare Advantage Program. The Subcommittee intends to 
hold hearings and conduct other oversight activities on the 
Medicare Advantage program. The Subcommittee intends to examine 
payment and structural changes to Medicare Advantage plans 
enacted as a result of the MMA.
    12. Other Issues. Further hearings will be scheduled as 
time permits to examine certain additional aspects of Medicare 
program management. Matters to be considered may include health 
care information technology, health care quality issues, 
Medigap reform, medical liability reform, especially as it 
affects the Medicare program and patient safety issues.

                    SUBCOMMITTEE ON HUMAN RESOURCES

    1. Welfare Reform. Reauthorizing the Temporary Assistance 
for Needy Families (TANF) and related programs to amend and 
improve the 1996 welfare reform law continues to be a priority 
for the Subcommittee. Issues of particular interest to the 
Subcommittee include how TANF block grant funds and other HHS 
efforts to communicate with the public are used to develop 
strong families and encourage healthy marriage and how welfare 
reform policies can be strengthened to better promote increased 
work, reduced poverty, enhanced program integrity, and improved 
child well-being.
    2. Child Support and Fatherhood. The Subcommittee intends 
to hold hearings on the nation's Federal-State child support 
system, review the results of program changes made in 1996 and 
1998 law, and consider proposals for further improvements. The 
Subcommittee also will review proposals to encourage 
responsible fatherhood and closer involvement between fathers, 
children and families, both as a result of child support and 
other program policies.
    3. Supplemental Security Income. The Supplemental Security 
Income (SSI) program provides over $30 billion in benefit 
payments to 7 million disabled needy individuals each year. The 
Subcommittee will review proposals to reduce fraud and abuse in 
the program, and examine options for improving program outcomes 
such as enhancing the ability of individuals to return to work.
    4. Child Protection. The Subcommittee held a number of 
child protection oversight hearings during the 108th Congress, 
examining the purposes and outcomes of current child protection 
programs. The Subcommittee will review program improvement 
proposals for child protection programs broadly, as well as 
involving distinct issues such as the handling of interstate 
placements. The Subcommittee also will review the operation of 
the Promoting Safe and Stable Families program in anticipation 
of the expected reauthorization of this program prior to the 
end of fiscal year 2006.
    5. Unemployment Compensation. The Subcommittee intends to 
hold hearings on the Nation's unemployment compensation system. 
Issues of interest include a more detailed understanding of the 
characteristics of unemployment benefit recipients over time, 
and improving the program to better promote work, savings, and 
program integrity. The Subcommittee also will review 
reemployment services provided to unemployment benefit 
recipients, and consider whether better return-to-work outcomes 
can be achieved through reforms.

                    SUBCOMMITTEE ON SOCIAL SECURITY

    1. Strengthening Social Security. The Subcommittee intends 
to hold hearings to examine the degree to which Social Security 
programs are meeting the needs of today's and tomorrow's 
beneficiaries, along with the financial challenges facing the 
program and proposals to strengthen Social Security.
    2. Use of the Social Security Number. The Subcommittee will 
continue their examination of the integrity of Social Security 
numbers (SSNs) and Social Security cards as identifiers, 
including their role in identity theft and other fraud.
    3. Disability Program Reform and Oversight. The 
Subcommittee intends to hold hearings on the Social Security 
Disability Insurance (DI) program, including: the Social 
Security Administration's (SSA's) implementation of the Ticket 
to Work and Work Incentives Improvement Act (P.L. 160-170); 
oversight of SSA's disability program management, including 
efforts to improve workload processing at both the initial 
application and appeals levels.
    4. Stewardship of the Social Security Programs. The 
Subcommittee intends to hold oversight hearings to examine the 
management of the Social Security programs, including 
international agreements, to assess their potential 
vulnerability to waste, fraud, and abuse, and to explore 
necessary legislative remedies.
    5. Service Delivery. The Subcommittee intends to hold 
oversight hearings to examine SSA's service delivery to the 
public, including efforts to modernize service delivery to meet 
the changing expectations of today's customers, and SSA's 
efforts to communicate with the public about the financing 
challenges facing Social Security and possible changes to the 
program.

                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.
            Sincerely,
                                             Bill Thomas, Chairman.

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


Full Committee

    1. Fiscal Year (FY) 2006 and 2007 Budget Initiatives 
Regarding Taxes and Tax Reform.
    Actions taken: The Committee held hearings on various tax 
reforms suggested in the President's FY 2006 and FY 2007 
budgets during the 109th Congress. Hearings to receive 
testimony from Administration officials and private sector 
witnesses on the FY 2006 budget were held in February and March 
of 2005, while hearings to receive testimony from 
Administration witnesses on the FY 2007 budget were held in 
February 2006.
    In addition, on June 8, 2005, the Committee received 
testimony on economic policy issues for consideration in 
reforming federal taxation from (i) Alan J. Auerbach, Professor 
of Economics and Law, University of California at Berkeley; 
(ii) William Beach, Director of the Center for Data Analysis, 
The Heritage Foundation; (iii) Leonard E. Burman, Co-Director 
of Tax Policy Center and Senior Fellow, Urban Institute; (iv) 
R. Glenn Hubbard, Dean, Columbia University Graduate School of 
Business; (v) and Joel B. Slemrod, Professor of Economics, 
University of Michigan.
    On November 1, 2005, the President's Advisory Panel on 
Federal Tax Reform released its report, entitled, ``Simple, 
Fair, and Pro-Growth: Proposals to Fix America's Tax System.'' 
In response, the Subcommittee on Select Revenue Measures held a 
series of hearings to hear testimony dealing with various 
aspects of Tax Reform. On July 28, 2005, the Subcommittee 
received testimony from Members of Congress concerning their 
proposals for restructuring federal taxes. On November 16, 
2005, the Subcommittee received testimony on reform proposals 
from Members of the Congress. On May 9, 2006, the Subcommittee 
examined issues involved in possible corporate tax reforms 
including rate reduction, base broadening and whether tax 
accounting should conform to book accounting methods. On June 
22, 2006, the Subcommittee received testimony concerning trends 
in international taxation affecting U.S. businesses overseas 
and suggestions for reform. On September 26, 2006, the 
Subcommittee received testimony on reform proposals from 
Members of Congress.
    2. Strengthening Social Security.
    Actions taken: The Committee held a total of three hearings 
on protecting and strengthening Social Security.
    The Committee held a hearing on March 9, 2005 on the future 
of Social Security. Testimony was heard from the United States 
Comptroller General and the two Public Trustees of the Social 
Security Trust Funds. Witnesses discussed the impending 
insolvency of the Social Security Trust Funds and the fact that 
the program's financial challenges are being driven in large 
part by the aging of baby boomers, longer life expectancy, and 
families having fewer children. The witnesses generally agreed 
that the sooner the program's financial challenges are 
addressed, the better it would be for workers, beneficiaries, 
and the Federal budget.
    On May 12, 2005 the Committee held a hearing on various 
alternatives to strengthen Social Security. Testimony was heard 
from policy experts on Social Security benefits and financing. 
Witnesses discussed various alternatives for increasing Social 
Security taxes, slowing the growth of benefits, and advance-
funding future Social Security benefits by providing workers 
the opportunity to own personal accounts. Each of these options 
would have different effects on workers and beneficiaries, as 
well as the national economy and the Federal budget. The 
witnesses generally agreed on the importance of strengthening 
Social Security's finances and the important role the program 
plays in helping to prevent poverty in retirement, as well as 
the need to preserve benefits for vulnerable groups such as 
individuals with disabilities, low-wage workers, and surviving 
spouses and children. Many of the witnesses also cited the 
advantages of establishing personal accounts as part of Social 
Security, including the potential to improve retirement 
incomes, strengthen program finances, and increase national 
saving.
    The Committee held a hearing on May 19, 2005 on the 
retirement and policy challenges and opportunities of our aging 
society. Testimony was heard from the Director of the 
Congressional Budget Office (CBO), the Chairman of the Social 
Security Advisory Board, and policy experts. The CBO Director 
provided an overview of America's changing demographics and 
discussed rapidly growing expenditures for seniors' health care 
(especially Medicare and Medicaid) and Social Security, and the 
associated economic and budgetary challenges. The Social 
Security Advisory Board Chairman discussed findings from the 
Board's report Retirement Security: the Unfolding of a 
Predictable Surprise. The policy expert witnesses provided 
information on the demographic forces influencing Social 
Security's financial challenges, the extent to which retirees 
depend on Social Security, the need to strengthen personal 
saving, and various options for strengthening retirement income 
security.

Subcommittee on Oversight

            A. Subcommittee Hearings for 109th Congress
    1. 2005 Tax Return Filing Season and the IRS Budget for 
Fiscal Year 2006.
    Actions taken: On April 14, 2005, the Subcommittee held its 
annual hearing examining the tax return filing season. The 
Subcommittee heard testimony from the Commissioner of the IRS, 
the Chairman of the IRS Oversight Board, the Government 
Accountability Office (GAO), and several representatives of the 
tax practitioner community. Much of the testimony presented to 
the Subcommittee focused on the IRS's efforts to increase 
enforcement and maintain customer service in an era of 
budgetary pressures. Taxpayers filed more than 120 million 
returns, including more than 65 million electronically filed 
returns. The Administration's budget requested $10.7 billion to 
fund the IRS for fiscal year 2006. Congress and the President 
approved $10.6 billion in the Transportation, Treasury, Housing 
and Urban Development, the Judiciary, the District of Columbia, 
and Independent Agencies Appropriations Act of 2006 (P.L. 109-
115).
    2. Overview of the Tax-Exempt Sector.
    Actions taken: The Committee on Ways and Means held a 
hearing providing a broad overview of the tax-exempt sector on 
April 20, 2005. This hearing was a first step in the 
Committee's detailed review of the tax-exempt sector. At this 
hearing, the Committee heard testimony from the Joint Committee 
on Taxation, the Government Accountability Office and several 
experts on exempt organizations. The hearing showed that the 
exempt sector has steadily grown over time without adequate 
direction from Congress, and that, in some cases, the original 
justifications for some exemptions may no longer exist. This 
hearing provided Members of the Committee with background on 
the size and scoe of the exempt sector, as well as an overview 
of some current issues.
    3. IRS Strategic Plans and Fiscal Year 2006 Budget.
    Actions taken: On May 19, 2005, the Subcommittee 
coordinated the annual Joint Congressional Review of the IRS, a 
hearing required by the IRS Restructuring and Reform Act of 
1998. Participants from six House and Senate Committees were 
invited to participate in this hearing, which allowed Members 
from the House Committees on Ways and Means, Appropriations, 
Government Reform and the Senate Committees on Finance, 
Appropriations, Homeland Security and Government Affairs to 
focus on oversight of the IRS, its strategic plans, and the 
fiscal year 2006 budget.
    4. The Tax-Exempt Hospital Sector.
    Actions taken: The full Committee held a hearing on May 26, 
2005, focusing on the basis for the tax exemption granted to 
non-profit hospitals. Health-related organizations account for 
60 percent of charitable organizations when measured by 
revenue, and the tax exemption for hospitals is worth billions 
of dollars each year. Accordingly, the hearing examined whether 
there is an adequate justification for the tax-exempt status of 
hospitals. At the hearing, the Committee heard testimony 
explaining that the standard for hospitals' exemption has 
steadily weakened to the point that there is little difference 
between non-profit hospitals and for-profit hospitals. In 
addition, the Internal Revenue Service regulations that 
establish requirements for non-profit hospitals to maintain 
their tax-exempt status are no longer meaningful. At the 
request of the Committee, the Congressional Budget Office (CBO) 
wrote and released two reports. One report showed while many 
non-profit hospitals are providing charity care to the 
communities that support them, some provide very little and 
often the non-profits are providing charity care at the same 
rate as tax-paying hospitals. The second report showed the 
federal subsidy through tax-exempt bonds lowers the cost of 
capital for non-profit hospitals and creates an incentive for 
them to use this subsidy instead of spending their own 
investment assets on capital projects. On December 8, 2006, 
Chairman Thomas introduced H.R. 6420, the ``Tax Exempt Hospital 
Responsibility Act of 2006'' which would provide a minimum 
statutory standard for a hospital to qualify as tax exempt, in 
addition to the other present law requirements for tax 
exemption. Tax exempt hospitals would be required to provide 
medical care or service for free or at discounted rates to low 
income uninsured patients.
    5. Review of the Tax Deduction for Facade Easements.
    Actions taken: On June 23, 2005, the Subcommittee held a 
hearing about the growing practice of donating easements on the 
facade of historic structures. An investigation by the 
Committee indicated that over the last four years, this 
practice had grown dramatically in certain areas, and that it 
was being abused by taxpayers and tax-exempt organizations. 
Certain exempt organizations urged taxpayers to overvalue their 
easement donations, which allowed them to receive a substantial 
tax deduction yet cede very little of value to the exempt 
organization. The Subcommittee reviewed the practices of the 
most prominent tax-exempt organization handling easement 
donations, the National Architectural Trust (NAT). The hearing 
showed that NAT was actively involved in promoting 
overvaluation of facade easement donations, and that the 
founders of NAT profited handsomely from the activities, making 
$1.9 million over the past three years. To address some of the 
abuses, the IRS has modified tax forms and is conducting 
audits. The Pension Protection Act of 2006 (P.L. 109-280), 
placed restrictions on the easement deduction for historic 
structures. Under the new law, the easement must prohibit the 
entire exterior of the building from being changed or altered 
in a manner inconsistent with the historical character of the 
exterior. This provision also clarifies that the charitable 
deduction is reduced if a rehabilitation tax credit has been 
claimed with respect to the property.
    6. Examine Tax Fraud Committed by Prison Inmates.
    Actions taken: On June 29, 2005, the Subcommittee held a 
hearing on tax fraud committed by prison inmates. The 
Subcommittee had completed an investigation of this growing 
problem, learning that the Internal Revenue Service (IRS) 
detects over 18,000 cases of tax return fraud by prison inmates 
each year, yet the actual number of cases of fraud could be 
much higher. Even though the IRS detects over 18,000 cases of 
fraud each year, it only stops fraudulent refunds from being 
issued in about 70 percent of the cases. Moreover, the IRS can 
never inform prison authorities when inmates have committed 
fraud, due to taxpayer confidentiality laws. As a result of the 
hearing, the IRS has announced that it will be introducing new 
procedures to try to stop more cases of inmate fraud. In 
addition, Chairman Ramstad introduced legislation to allow the 
IRS to share information with state and federal correctional 
authorities to allow them to take appropriate action against 
inmates who commit tax fraud.
    7. Fraud in Income Tax Preparation.
    Actions taken: On July 20, 2005, the Subcommittee held a 
hearing to examine evidence of negligent and fraudulent return 
preparation practices by tax professionals and the statutory 
and regulatory structure applicable to Federal tax practice. 
The Subcommittee learned that tax return preparers play an 
important role--with more than 1.2 million paid preparers 
preparing more than 70 million returns each year. However, 
there is little oversight of paid preparers, no comprehensive 
registration of return preparers, and no requirement that paid 
preparers meet any threshold for competency requirements. The 
Subcommittee also considered whether there are ways to improve 
the oversight and education of paid return preparers without 
creating a cumbersome bureaucracy.
    8. Review of Credit Union Tax Exemption.
    Actions taken: On November 3, 2005, the Committee held a 
hearing examining the tax exemption granted to credit unions. 
The purpose of this hearing was to review the justification for 
the exemption, and to see what credit unions do to earn their 
tax-exempt status. Testimony and discussion at the hearing 
indicated that many questions exist about the purpose of the 
tax exemption. Credit unions are not required to serve low-
income populations, despite this being one of the reasons for 
exemption, and many have steadily expanded their fields of 
membership over time. Moreover, certain Members and witnesses 
questioned whether there is adequate transparency in credit 
unions' operations. Many credit unions do not file Form 990s 
with the Internal Revenue Service, and therefore there is 
little information about key aspects of credit union 
operations. The Committee also examined the role of the 
National Credit Union Administration (NCUA), the government 
regulator of credit unions, and whether the agency is 
independent from the industry it regulates. Testimony indicated 
that the NCUA does not collect any data about who credit unions 
serve and could benefit from being more active in other areas 
of regulation than safety and soundness.
    9. Review the Response by Charities to Hurricane Katrina.
    Actions taken: On December 13, 2005, the Subcommittee held 
a hearing reviewing the response by charitable organizations to 
Hurricane Katrina. Due to the scope of the disaster, a 
multitude of charities helped provide food, shelter, clothing, 
and financial assistance to storm victims. The hearing examined 
several issues, including the coordination of relief among 
charities, whether charitable contributions were used 
effectively, and the availability of relief services to rural 
areas, minorities, and disabled individuals. The American Red 
Cross received much of the attention, because of its status as 
the charity that most Americans turn to during crises and 
because it is tasked under the federal government's National 
Response Plan to provide food, shelter, first aid, and 
counseling to disaster victims. Certain Members questioned 
whether it was prudent to place such great responsibility in 
the hands of one nongovernmental organization. The morning of 
the hearing, the Red Cross announced the resignation of its 
president, Marsha Evans.
    10. Social Security Number High Risk Issues and Employer 
Wage Reporting.
    Actions taken: On February 16, 2006, the Subcommittees on 
Social Security and Oversight held a joint hearing on employer 
wage reporting as part of the Social Security Subcommittee's 
hearing series on Social Security Number high risk issues. 
Testimony was provided by the Internal Revenue Service, Social 
Security Administration (SSA) and the Department of Homeland 
Security (DHS). Testimony at the hearing showed that DHS 
worksite enforcement has decreased in recent years, IRS 
enforcement of accurate wage reporting is not a priority, and 
there are still significant shortcomings in the information 
sharing arrangements between DHS, SSA and IRS. DHS indicated 
that they would like to receive additional information from SSA 
or IRS, such as the egregious employers list, SSA no-match 
letters or Earnings Suspense File data. However, these records 
are subject to taxpayer privacy protections under the law. In 
addition, testimony indicated that DHS was not utilizing 
information provided by SSA through the non-work alien file.
    11. 2006 Tax Return Filing Season and the IRS Budget for 
Fiscal Year 2007.
    Actions taken: On April 6, 2006, the Subcommittee held its 
annual hearing on the tax return filing season. Witnesses 
included the Commissioner of the Internal Revenue Service, the 
Treasury Inspector General for Tax Administration, the IRS 
Oversight Board, the Government Accountability Office, the 
Executive Director of the Free File Alliance, and several tax 
practitioner representatives. Taxpayers filed more than 124 
million returns, including filing more than 70 million returns 
electronically. The Administration's budget requested $10.6 
billion to fund the IRS for fiscal year 2007. In addition to 
examining the 2006 tax return filing season and the IRS budget 
for fiscal year 2007, the hearing focused on whether a new 
agreement between the IRS and private industry to provide free, 
online tax return preparation and filing services was 
adequately serving taxpayers. The new agreement created a cap 
on the number of taxpayers who could qualify for free services, 
which contributed to a decline in their usage of over 20 
percent. At the hearing, the IRS Commissioner pledged to 
consider renegotiating the agreement with private industry.
    12. Charities and Employment Taxes: Are Charities in the 
Combined Federal Campaign Meeting their Employment Tax 
Responsibilities?
    Actions taken: On May 25, 2006, the Subcommittee held a 
hearing examining charities participating in the Combined 
Federal Campaign (CFC) and the Office of Personnel Management's 
(OPM) screening process for accepting charities into the 
campaign. The Government Accountability Office (GAO) conducted 
an investigation of the charities' tax debts and whether these 
charities also received Federal grants. According to GAO, 
approximately 1,300 charities participating in the CFC had tax 
debt totaling about $36 million. In addition, more than 170 of 
those charities also received Federal grants totaling $1.6 
billion. In order to demonstrate OPM's lax screening process 
for charities participating in the campaign, GAO also created a 
fake charity and applied for entry into three different local 
CFC campaigns for 2006. All three of GAO's applications were 
accepted by OPM and admitted into local campaigns. The GAO 
released its official report in July 2006. OPM is making 
improvements to the way it screens charities through 
regulations, the creation of a national list of participating 
organizations and limited verification of the tax-exempt status 
of all local and national participants.

Subcommittee on Trade

    1. Bush Administration Trade Policy.
    Actions taken: In December 2005, the Committee received 
from the Government Accountability Office (GAO) a report 
entitled ``International Trade: USTR Would Benefit from Greater 
Use of Strategic Human Capital Management Principles'' (GAO-06-
167).
    On February 15, 2006, the Committee held a hearing on 
President Bush's trade agenda for 2006. The sole witness was 
U.S. Trade Representative (USTR) Rob Portman. The hearing 
examined current trade issues, including: (1) the prospect for 
trade expansion in agriculture, industrial goods, and services 
through multilateral negotiations in the World Trade 
Organization (WTO); (2) the then recently concluded free trade 
agreements (FTAs) with Oman and Peru; (3) other FTAs being 
negotiated or have been notified by the President; (4) 
management of bilateral trade disputes and concerns; (5) 
ongoing negotiations with several countries seeking to accede 
to the WTO including Vietnam and Russia; (6) compliance with 
WTO dispute settlement decisions; and (7) other trade issues.
    2. World Trade Organization.
    Actions taken: On May 17, 2005, the Subcommittee held a 
hearing to review future prospects for U.S. participation in 
the WTO. The hearing focused on overall results of U.S. 
membership in the WTO and General Agreement on Tariffs and 
Trade (GATT); whether future participation of the United States 
in the WTO and the multilateral trading system can be expected 
to benefit Americans; and prospects for increased economic 
opportunities for U.S. farmers, workers, and consumers in the 
Doha Round.
    On December 14-18, 2005, a bipartisan delegation of staff 
from the Committee on Ways and Means and the Senate Committee 
on Finance attended the WTO's Ministerial Conference in Hong 
Kong, consulted with U.S. trade officials during the 
negotiations, and discussed trade issues with foreign delegates 
and WTO officials. Staff met with foreign delegations, U.S. 
business representatives, and WTO Secretariat staff. 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 March 2, 2005, Congressman Sanders introduced H.J. Res. 
27, a resolution to withdraw Congressional approval of the 
agreement establishing the WTO. Under the Uruguay Round 
Agreements Act (P.L. 103-465), the resolution is privileged and 
subject to specialized procedures. The resolution is not 
amendable and must be considered on the floor within 45 days of 
introduction. The resolution was referred to the Committee on 
Ways and Means, which adversely reported the resolution on May 
26, 2005, by voice vote. On June 9, 2005, the House considered 
the resolution and failed to pass it, by a recorded vote of 86-
338 and 1 present. No further action was taken on the 
resolution in the 109th Congress.
    In May 2005, the Committee received from the GAO the report 
entitled ``World Trade Organization: Global Trade Talks Back on 
Track, but Considerable Work Needed to Fulfill Ambitious 
Objectives'' (GAO-05-538). The GAO continues to monitor 
negotiations for the Committee.
    In August 2005, the Committee received from the 
Congressional Budget Office the paper entitled ``Policies That 
Distort World Agricultural Trade: Prevalence and Magnitude.''
    In December 2005, the Committee received from the 
Congressional Budget Office the paper entitled ``The Effects of 
Liberalizing World Agricultural Trade: A Survey.''
    Throughout the 109th Congress, USTR consulted frequently 
with the Committee and the Congressional Oversight Group (COG) 
about the negotiations and U.S. positions.
    3. Completed Bilateral Free Trade Agreements (Central 
America, Bahrain, Oman, Peru, Morocco, and Colombia)
    Actions taken: On April 21, 2005, the Committee held a 
hearing on implementation of the United States bilateral free 
trade agreement with El Salvador, Guatemala, Honduras, 
Nicaragua, Costa Rica, and the Dominican Republic. On June 15, 
2005, the Committee informally approved with amendment draft 
legislation to implement the Dominican Republic-Central 
America-United States Free Trade Agreement (DR-CAFTA), by a 
roll call vote of 25-16. The Committee conducted this informal 
markup to provide advice to the Administration on the 
implementing bill and Statement of Administrative Action. On 
June 30, 2005, the Committee held a formal markup session to 
consider H.R. 3045, the ``Dominican Republic-Central America-
United States Free Trade Agreement Implementation Act.'' The 
Committee approved the bill and favorably reported H.R. 3045 by 
a roll call vote of 25-16. Under Trade Promotion Authority 
(TPA), amendments are not permitted. On July 28, 2005, the 
House passed the bill by a recorded vote of 217-215. On June 
30, 2005, before the House took action on H.R. 3045, the Senate 
passed S. 1307 by a recorded vote of 54-45. On July 28, 2005, 
the Senate passed H.R. 3045, without amendment, by a recorded 
vote of 55-45. The President signed the bill into law on August 
2, 2005 (P.L. 109-53).
    In August 2004, the Committee received from the 
International Trade Commission (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)).
    On September 29, 2005, the Committee held a hearing on 
implementation of the United States bilateral free trade 
agreement with Bahrain. On November 3, 2005, the Committee 
informally approved draft legislation to implement the United 
States-Bahrain Free Trade Agreement, by a roll call vote of 23-
0, with 15 Members voting present, without amendment. The 
Committee conducted this informal markup to provide advice to 
the Administration on the implementing bill and Statement of 
Administrative Action. On November 18, 2005, the Committee held 
a formal mark-up session to consider H.R. 4340, the ``United 
States-Bahrain Free Trade Agreement Implementation Act.'' The 
Committee approved the bill and favorably reported H.R. 4340 by 
voice vote. Under TPA, amendments are not permitted. On 
December 7, 2005, the House passed the bill by a recorded vote 
of 327-95. On December 13, 2005, the Senate passed H.R. 4340 by 
unanimous consent. The President signed the bill into law on 
January 11, 2006 (P.L. 109-169).
    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)).
    On April 5, 2006, the Committee held a hearing on 
implementation of the United States bilateral free trade 
agreement with Oman. On May 10, 2006, the Committee informally 
approved draft legislation to implement the United States-Oman 
Free Trade Agreement, by a roll call vote of 23-11, with 3 
Members voting present, without amendment. The Committee 
conducted this informal markup to provide advice to the 
Administration on the implementing bill and Statement of 
Administrative Action. On June 26, 2006, Majority Leader 
Boehner introduced (by request) H.R. 5684, the ``United States-
Oman Free Trade Agreement Implementation Act,'' to be 
considered under Trade Promotion Authority. On June 29, 2006, 
the Committee held a formal mark-up session to consider H.R. 
5684. The Committee favorably reported H.R. 5684 by a roll call 
vote of 23-15. Under TPA, amendments are not permitted. On June 
29, 2006, before the House took action on H.R. 5684, the Senate 
passed S. 3569 by a recorded vote of 60-34. On July 20, 2006, 
the House passed the bill by a recorded vote of 221-205. On 
September 19, 2006, the Senate passed H.R. 5684 by a recorded 
vote of 62-32. The President signed the bill into law on 
September 26, 2006 (P.L. 109-283).
    In February 2006, the Committee received from the ITC the 
report entitled ``U.S.-Oman Free Trade Agreement: Potential 
Economy-wide and Selected Sectoral Effects'' (Investigation No. 
TA-2104-19 (Publication 3837)).
    On July 12, 2006, the Committee held a hearing on 
implementation of the United States bilateral free trade 
agreement with Peru. On July 20, 2006, the Committee informally 
approved draft legislation to implement the United States-Peru 
Trade Promotion Agreement, by a roll call vote of 23-13, 
without amendment. The Committee conducted this informal markup 
to provide advice to the Administration on the implementing 
bill and Statement of Administrative Action. No further action 
was taken in the 109th Congress.
    In June 2006, the Committee received from the ITC the 
report entitled ``U.S.-Peru Trade Promotion Agreement: 
Potential Economy-wide and Selected Sectoral Effects'' 
(Investigation No. TA-2104-20 (Publication 3855)).
    In December 2006, the Committee received from the ITC the 
report entitled ``U.S.-Colombia Trade Promotion Agreement: 
Potential Economy-wide and Selected Sectoral Effects'' 
(Investigation No. TA-2104-23 (Publication 3896)).
    In April 2005, the Committee received from the ITC the 
report entitled ``U.S.-Morocco Free Trade Agreement: Effect of 
Modifications to the U.S.-Morocco Free Trade Agreement'' 
(Investigation No. Morocco FTA 103-11 (Publication 3774, April 
2005)).
    4. Bilateral and Regional Free Trade Agreements Under 
Negotiation.
    Actions taken: Pursuant to Sense of Congress language in 
the Africa Growth and Opportunities Act of 2000 (P.L. 106-200), 
U.S. Trade Representative Zoellick notified Congress on 
November 4, 2002, of the Administration's 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 and were suspended in 2006 due 
to lack of progress.
    As noted above, on November 18, 2003, the U.S. Trade 
Representative Zoellick formally notified Congress of the 
Administration's intent to initiate negotiations for a free 
trade agreement with Colombia, Ecuador, and Peru. Negotiations 
began in May 2004 with Colombia, Ecuador, and Peru. Bolivia was 
an observer to those negotiations. See discussion above 
concerning the conclusion of FTA negotiations with Peru and 
Colombia. The United States and Ecuador suspended negotiations 
in May 2006.
    On July 3-9, 2005, Chairman Thomas led a bipartisan 
delegation of Committee Members to Colombia, Ecuador, and Peru. 
The purpose of the delegation's trip was to focus on the 
ongoing negotiations for a free trade agreement with the 
countries and to discuss investment and security issues in the 
region. The delegation in particular emphasized that current 
unilateral trade preferences under the Andean Trade Promotion 
and Drug Eradication Act (P.L. 107-210) (ATPDEA) are set to 
expire in December 2006, and the only way that the Andean 
countries can replicate their access to the U.S. market after 
these benefits expire is through a comprehensive free trade 
agreement providing reciprocal market access. In September 
2005, the Committee filed its ``Report on Trade Mission to 
Colombia, Ecuador, and Peru.''
    On November 18, 2003, U.S. Trade Representative Zoellick 
formally notified 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.
    On February 12, 2004, U.S. Trade Representative Zoellick 
formally notified Congress of the Administration's intent to 
negotiate an FTA with Thailand. Negotiations began in June 
2004, and the sixth round was held in January 2006. However, 
FTA talks were suspended after a political crisis enveloped 
Thailand in April 2006. In September 2006, a military coup 
ousted the sitting government. The United States has stated 
that the FTA talks will not resume until Thailand has a 
democratically elected government with authority to resume the 
negotiations.
    The United States signed a Trade and Investment Framework 
Agreement (TIFA) with the United Arab Emirates (UAE) on March 
15, 2004. On November 15, 2004, U.S. Trade Representative 
Zoellick formally notified 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. The first round of negotiations was held on 
March 8, 2005. There have been four full fledged negotiating 
rounds and three formal rounds on investment, with the last 
round in August 2006.
    On February 2, 2006, U.S. Trade Representative Portman 
formally notified Congress of the Administration's intent to 
initiate negotiations for a free trade agreement with the 
Republic of Korea. Negotiations began in June 2006 and are 
targeted to conclude by the end of 2006.
    On March 8, 2006, U.S. Trade Representative Portman 
formally notified Congress of the Administration's intent to 
initiate negotiations for a free trade agreement with Malaysia. 
Negotiations were launched in June 2006.
    On each of these negotiations, USTR consulted frequently 
with the Committee and with the Congressional Oversight Group 
(COG) throughout the 109th Congress about the negotiations and 
U.S. positions.
    5. Bilateral Free Trade Agreements Entered Into Force.
    Actions taken: Negotiations for the U.S.-Dominican 
Republican-Central America Free Trade Agreement were completed 
in May 2004. As noted above, the President signed the 
implementing legislation into law on August 2, 2005 (P.L. 109-
53).
    On July 18, 2005, Chairman Thomas responded to Congressmen 
Gingrey and Inglis's letter related to textile issues in DR-
CAFTA. As a result of the commitments on changing the rule of 
origin on pocketing, the Committee prepared technical 
amendments to DR-CAFTA. On July 28, 2006, the House passed H.R. 
4, the Pension Protection Act of 2006, which included a 
provision to extend narrow proclamation authority to the 
President to implement changes to certain apparel rules of 
origin with respect to countries that have entered into letters 
of understanding concerning pocketing material with the United 
States and, subject to certain Congressional notification and 
layover limitations, with respect to countries that will do so 
in the future. H.R. 4 passed by a recorded vote of 279-131. On 
August 3, 2006, the Senate passed H.R. 4, without amendment, by 
a recorded vote of 93-5. The President signed the bill into law 
on August 17, 2006 (P.L. 109-280).
    Negotiations for the U.S.-Bahrain Free Trade Agreement were 
completed in May 2004. As noted above, the President signed the 
implementing legislation into law on January 11, 2006 (P.L. 
109-169). The agreement entered into force on August 1, 2006.
    6. Miscellaneous Duty Spensions and Technical Corrections 
to U.S. Trade Laws.
    Actions taken: On March 11, 2005, Subcommittee on Trade 
Chairman Shaw requested that Members introduce bills for 
inclusion in a miscellaneous trade bill package. On July 25, 
2005 and August 5, 2005, Chairman Shaw requested written 
comments from parties interested in these miscellaneous trade 
proposals, technical corrections to the trade laws, and 
temporary suspensions on certain imports. On March 14, 2006, 
Chairman Shaw introduced H.R. 4944, the Miscellaneous Trade and 
Technical Corrections Act of 2006, which was referred to the 
Committee on Ways and Means. The bill included 570 duty 
suspensions on various products, several reliquidations of 
prior import entries due to government error, and miscellaneous 
trade provisions and technical corrections. The duty suspension 
provisions related mostly to products (largely chemicals) for 
which there are no U.S. domestic manufacturers. On March 15, 
2006, the House passed H.R. 4944 under suspension of the rules, 
by a recorded vote of 412-2. H.R. 4944 was subsequently 
referred to the Senate Committee on Finance.
    Approximately half of the provisions from H.R. 4944 (all 
provisions that had companion legislation already introduced in 
the Senate) were included in H.R. 4, the Pension Protection Act 
of 2006. On July 28, 2006, the House passed H.R. 4 by a 
recorded vote of 279-131. On August 3, 2006, the Senate passed 
H.R. 4, without amendment, by a recorded vote of 93-5. The 
President signed the bill into law on August 17, 2006 (P.L. 
109-280).
    The remaining provisions of H.R. 4944 were subsequently 
included in H.R. 6406 along with 232 Senate-only duty 
suspensions on various products. H.R. 6406 passed the House on 
December 8, 2006, by a recorded vote of 212-184. Under the rule 
accompanying H.R. 6111, ``A bill to amend the Internal Revenue 
Code of 1986 to provide that the Tax Court may review claims 
for equitable innocent spouse relief and to suspend the running 
on the period of limitations while such claims are pending,'' 
H.R. 6406 was merged into H.R. 6111, which then passed the 
Senate on December 9, 2006, by a recorded vote of 79-9.
    7. U.S. Trade Remedy Laws.
    Actions taken: The Continued Dumping and Subsidy Offset Act 
(CDSOA) was enacted into law in October 2000 (P.L. 106-387) and 
requires the annual disbursement of antidumping and 
countervailing duties to qualified petitioners and interested 
parties in the underlying trade remedy proceedings. On January 
16, 2003, the WTO's Appellate Body issued a final adverse 
ruling against the CDSOA, finding that it is inconsistent with 
U.S. obligations to the WTO. On November 28, 2004, the WTO 
authorized approximately $134 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. Canada, 
Mexico, the European Union, and Japan imposed retaliatory 
tariffs against a variety of U.S. exports.
    On April 30, 2004, Subcommittee on Trade Chairman Crane, 
along with Congressmen Ramstad, Boehner, and Biggert, 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. In 
January 2005, Trade Subcommittee Clay Shaw renewed the request 
for the CDSOA review.
    On March 3, 2005, Congressman Ramstad and Chairman Shaw 
introduced H.R. 1121 to repeal the CDSOA. On July 25, 2005, 
Chairman Shaw requested written comments from parties 
interested in miscellaneous trade proposals, including H.R. 
1121. Over 150 comments were received on H.R. 1121, and 
comments were nearly equally divided with a slight majority 
supporting CDSOA repeal.
    On September 26, 2005, the Committee received from the GAO 
the report entitled ``International Trade: Issues and Effects 
of Implementing the Continued Dumping and Subsidy Offset Act'' 
(GAO-05-979). The GAO found that since the inception of CDSOA 
(FY2001), five companies (three of which are related) received 
46% of the over $1 billion in payments. GAO also reported that 
two-thirds of all payments went to three industries: bearings, 
candles, and steel. The GAO concluded that the CDSOA does not 
provide a ``trade remedy'' in the traditional sense because it 
is not available to all companies; many domestic producers 
impacted by dumped or subsidized imports are ineligible to 
receive funds because they did not formally and publicly 
support the petition that resulted in the duties. The GAO 
report made several recommendations to CBP to improve the 
implementation of the CDSOA, such as systematic verification of 
CDSOA claims, providing additional guidance for preparing CDSOA 
claims, and standardized exchanges of electronic updates 
between CBP and the International Trade Commission on eligible 
claimants. The Committee and GAO conducted several follow up 
meetings with CBP to ensure that CBP implements the GAO 
recommendations in its report.
    On October 26, 2005, the Ways and Means Committee approved 
``Entitlement Reconciliation Recommendations for Fiscal Year 
2006,'' as amended, by a vote of 22-17. The recommendations 
included a provision to repeal the CDSOA effective upon 
enactment. On November 18, 2005, the House approved H.R. 4241, 
the ``Deficit Reduction Act of 2005,'' by a 217-215 vote. The 
House-passed bill included immediate CDSOA repeal. On November 
3, 2005, the Senate passed S. 1932, the ``Deficit Reduction 
Omnibus Reconciliation Act of 2005,'' by a vote of 52-47. The 
Senate-passed bill did not include CDSOA repeal. On December 
15, 2005, the Senate passed a nonbinding motion offered by 
Senator DeWine instructing Senate conferees to insist that any 
conference report not include CDSOA repeal, by a vote of 71-20. 
The conference report for the Deficit Reduction Act of 2005 was 
filed on December 19, 2005 and contained a provision to repeal 
the CDSOA immediately upon enactment but allowing the continued 
disbursements of duties on goods entered before October 1, 
2007. On December 19, 2005, the House approved the conference 
report by a vote of 212-206. On December 21, 2005, the Senate 
approved the conference report with an amendment to provisions 
unrelated to CDSOA repeal, by a vote of 51-50. On February 1, 
2006, the House approved the bill as amended by the Senate by a 
vote of 216-214. President Bush signed the bill into law on 
February 8, 2006 (P.L. 109-171).
    On November 17, 2005, the Senate passed by voice vote 
amendment SA 2655 proposed by Senator Craig to the tax 
reconciliation bill (S. 2020). The amendment contained a 
nonbinding resolution severely limiting outcomes on antidumping 
and countervailing negotiations in the World Trade 
Organization. On November 18, 2005, the Senate approved S. 2020 
as amended by a vote of 64-33. On November 18, 2005, 
Congressman English introduced H. Res. 577, the text of which 
was identical to the Senate-passed amendment. No further action 
was taken on H. Con. Res. 577. On December 8, 2005, the House 
approved H.R. 4297, the Tax Relief Extension Reconciliation Act 
of 2005, by a vote of 234-197. The House-passed tax 
reconciliation bill did not contain a provision related to 
antidumping and countervailing duty negotiations in the World 
Trade Organization. The conference report did not retain the 
Senate amendment.
    FY2006 CDSOA disbursements of nearly $380 million were 
issued to recipients on November 27, 2006.
    8. Authorizations for the Department of Homeland Security, 
the Office of the United States Trade Representative and the 
U.S. International Trade Commission.
    Actions taken: The Committee on Ways and Means, working 
with the Homeland Security Committee, included several trade 
and customs revenue provisions and established a one-year 
authorization for U.S. Customs and Border Protection (CBP) as 
part of H.R. 1817, the ``Department of Homeland Security 
Authorization Act for Fiscal Year 2006,'' to provide CBP with 
guidance as it plans its budgets and to provide Committee 
guidance in the appropriations process. The bill was reported 
out of the Homeland Security Committee on May 3, 2005, and the 
Committee on Ways and Means received a joint, sequential 
referral for a period not ending later than May 13, 2005. 
Through an exchange of letters on May 12, 2005, the two 
committees agreed to include in the Manager's Amendment various 
changes requested by the Committee on Ways and Means concerning 
trade and customs matters. In addition, the Committees agreed 
to include customs provisions that were previously passed out 
of the House of Representatives in the 108th Congress as part 
of HR 4418, the ``Customs and Border Security Act of 2004,'' 
particularly sections 102 (providing for the establishment of a 
cost accounting system), 104 (requiring a report on the One 
Face at the Border Initiative), 124 (authorizing Customs to 
provide certain services to Charter aircraft carriers), and 125 
(stating the sense of the Congress regarding textile 
enforcement provisions in certain trade preference programs). 
H.R. 1817 was passed in the House by recorded vote 424-4 on May 
18, 2005.
    On November 14, 2005, Congressman Peter King introduced 
H.R. 4312, the ``Border Security and Terrorism Prevention Act 
of 2005,'' which contained several provisions dealing with 
border security issues that impact the flow of trade and 
imports and customs revenue, matters under the jurisdiction of 
the Committee on Ways and Means. The Committee on Ways and 
Means and the Homeland Security reached agreement to certain 
modifications to H.R. 4312 to preserve the jurisdiction of the 
Committee on Ways and Means and to protect trade and customs 
revenue interests. This agreement was memorialized in an 
exchange of letters on December 6, 2005. The trade-related 
provisions agreed to between these Committees for inclusion in 
H.R. 4312 were later incorporated in H.R. 4437, the ``Border 
Protection, Antiterrorism and Illegal Immigration Control Act 
of 2005,'' which had been introduced by Congressman F. James 
Sensenbrenner on December 6, 2005 and reported out of the 
Committee on the Judiciary on December 13, 2005. The bill was 
referred jointly and sequentially to the Committee on Ways and 
Means on December 13, 2005 for a period not ending later than 
December 14, 2005. The Committee on Ways and Means discharged 
the bill on December 14, 2005. H.R. 4437 was passed in the 
House by recorded vote 239-182 on December 16, 2005.
    On March 14, 2006, Congressman Dan Lungren introduced H.R. 
4954, the Security and Accountability For Every (SAFE) Port 
Act. On May 3, 2006, Chairman Thomas and Committee on Homeland 
Security Chairman Peter King exchanged letters acknowledging 
the jurisdiction of the Committee on Ways and Means and its 
agreement to forgo consideration of the bill. On May 4, 2006, 
the legislation passed the House by a recorded vote of 421-2. 
On September 14, 2006, the bill passed the Senate with an 
amendment by a vote of 98-0. On September 30, 2006, the 
conference report to H.R. 4954 passed the House by a recorded 
vote of 409-2. On September 30, 2006, the Senate agreed to the 
conference report by unanimous consent. It was signed into law 
by the President on October 13, 2006 (P.L. 109-347).
    On July 25, 2006, the Subcommittee held a hearing to review 
budget authorizations for FY2007 and FY2008 for U.S. Customs 
and Border Protection (CBP) and U.S. Immigration and Customs 
Enforcement (ICE). In addition, the hearing addressed other 
Customs issues, including: the creation of CBP and ICE and the 
integration of the former U.S. Customs Service into the U.S. 
Department of Homeland Security, the Customs Trade Partnership 
Against Terrorism (C-TPAT) program, Customs automation and 
modernization efforts and the mechanisms needed to fund them, 
and general Customs oversight issues.
    On June 2005, the Committee received from the GAO a report 
entitled ``International Trade: Further Improvements Needed to 
Handle Growing Workload for Monitoring and Enforcing Trade 
Agreements'' (GAO-06-537).
    9. User Fees.
    Actions taken: The Committee continued to examine the issue 
of setting the appropriate level for user fees and how the fees 
are used. To enable the Committee to continue to conduct proper 
oversight of the use of user fee funds, the Committee has 
commissioned studies by the Department of Homeland Security.
    10. Trade Adjustment Assistnace (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.
    At the June 15, 2005 informal mark-up of DR-CAFTA, Chairman 
Thomas included a provision that would have required the 
President to prepare a report that would examine after one year 
whether the agreement has had a net negative effect on the 
services industry. The provision would have required the 
President to make recommendations as to how the TAA program 
should be amended if the DR-CAFTA led to negative effects on 
the services industry. This suggested provision was not 
included in the non-amendable legislation that the President 
sent to Congress for its consideration.
    11. Trade Relations With China.
    Actions taken: On April 14, 2005, the Committee held a 
hearing on United States-China economic relations and China's 
role in the world economy. 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.
    On July 14, 2005, Congressman Phil English introduced H.R. 
3283, the ``Trade Rights Enforcement Act.'' The bill would have 
authorized funding for enforcement offices within USTR, require 
reports on China's currency exchange reforms, authorized the 
application of U.S. countervailing duty law to exports from 
nonmarket economies such as China, and established a system of 
comprehensive monitoring of Chinese compliance with its trade 
obligations. The bill was referred to the Committee and placed 
on the House Suspension Calendar on July 26, 2005. The bill 
failed to pass with the requisite two-thirds majority, by a 
recorded vote of 240-186. The bill subsequently passed the 
House under a rule on July 27, 2005, by a recorded vote of 255-
168.
    Throughout 2005 and 2006, the Committee exercised oversight 
over the Administration's handling of trade relations with 
China and requested ongoing briefings by USTR officials. In 
particular, the Committee has been briefed on impending and 
ongoing WTO challenges against China.
    On January 25, 2005, the Ranking Members of the Committee 
received from the GAO the requested report entitled ``U.S.-
China Trade: Summary of 2003 World Trade Organization 
Transitional Review Mechanism for China'' (GAO-05-209R U.S.-
China Trade).
    In April 2005, the Committee received from the GAO a report 
entitled ``U.S.-China Trade: Textile Safeguard Procedures 
Should Be Improved'' (GAO-05-296).
    In April 2005, the Committee received from the GAO a report 
entitled ``International Trade: Treasury Assessments Have Not 
Found Currency Manipulation, but Concerns about Exchange Rates 
Continue'' (GAO-05-351).
    On April 14, 2005, the Committee received from the GAO a 
report entitled ``U.S.-China Trade: Opportunities to Improve 
U.S. Government Efforts to Ensure Open and Fair Markets'' (GAO-
05-544T).
    In June 2005, the Committee received from the GAO a report 
entitled ``U.S.-China Trade: Commerce Faces Practical and Legal 
Challenges in Applying Countervailing Duties'' (GAO-05-474).
    On September 2005, the Committee received from the GAO a 
report entitled ``U.S.-China Trade: The United States Has Not 
Restricted Imports under the China Safeguard'' (GAO-06-1056).
    On December 9, 2005, the Committee received from the GAO 
the report entitled ``China Trade: U.S. Exports, Investment, 
Affiliate Sales Rising, but Export Share Falling'' (GAO-06-
162).
    In January 2006, the Committee received from the GAO a 
report entitled ``U.S.-China Trade: Eliminating Nonmarket 
Economy Methodology Would Lower Antidumping Duties for Some 
Chinese Companies'' (GAO-06-231).
    In July 2006, the Committee received from the ITC the 
report entitled ``Conditions of Competition for Certain Oranges 
and Lemons in the U.S. Fresh Market'' (Investigation No. 332-
469 (Publication 3863, July 2006)). The report covered market 
information worldwide, but in particular, ITC collected and 
developed information about these products from China for the 
first time.
    On September 21, 2006, Chairman Bill Thomas requested a 
three-part study pursuant to section 332 of the Trade Act of 
1930 on China trade and investment, to be submitted in parts 
through the middle of 2008.
    12. Normal Trade Relations With Jackson-Vanik Countries.
    Actions taken: Ukraine's trade status was subject to the 
``Jackson-Vanik'' provisions in Title IV of the Trade Act of 
1974. This provision of law governs the extension of normal 
trade relations (NTR), including NTR tariff treatment, and 
access to U.S. Government credits, or credit or investment 
guarantees, to nonmarket economy countries ineligible for NTR 
treatment as of the enactment of the Act. The President first 
declared Ukraine to be in full compliance with the Jackson-
Vanik requirements in 1997, and such Presidential certification 
has been annually renewed.
    Ukraine is in the process of acceding to the World Trade 
Organization. So as to allow the United States and Ukraine to 
enjoy a full-fledged trade relationship once Ukraine joins the 
WTO, Congress passed legislation to end the annual Jackson-
Vanik review and grant permanent NTR (PNTR). On November 18, 
2005, the Senate passed S. 632 to grant PNTR to Ukraine by 
unanimous consent. On March 6, 2006, Chairman Thomas and U.S. 
Trade Representative Rob Portman exchanged letters confirming 
that the Administration will ensure that Ukraine will comply 
fully with all of the commitments that it will assume as a WTO 
member before the United States will join the consensus 
necessary for Ukraine to join the body. On March 8, 2006, the 
House approved H.R. 1053 to grant PNTR to Ukraine, by a vote of 
417-2, with three voting present. On March 9, 2006, the Senate 
approved H.R. 1053 by unanimous consent. The bill was signed by 
the President and became law on March 23, 2006 (P.L. 109-205).
    Russia's trade status is also subject to the ``Jackson-
Vanik'' provisions. The President first declared Russia to be 
in full compliance with the Jackson-Vanik requirements in 1994, 
and such Presidential certification has been annually renewed. 
Russia is in the process of acceding to the World Trade 
Organization. If the United States and Russia are to enjoy a 
full-fledged trade relationship once Russia joins the WTO, 
Congress must pass legislation to end the annual Jackson-Vanik 
review and grant permanent NTR (PNTR). No bills were introduced 
in the 109th Congress to grant PNTR to Russia. On May 11, 2006, 
Chairman Thomas, Ranking Member Rangel, Senate Finance 
Committee Chairman Grassley, and Ranking Member Baucus sent a 
letter to President Bush expressing concern that Russia has not 
demonstrated its willingness, ability, and commitment to abide 
by WTO rules, particularly on enforcement of intellectual 
property rights and the application of sanitary and 
phytosanitary measures. The letter stated that until Russia 
addresses these critical issues in a meaningful way, the 
signatories would not support granting PNTR to Russia. The 
United States and Russia made significant progress in 
addressing the concerns raised in the letter, and on November 
10, 2006, both countries announced a bilateral agreement in 
principle for Russia's accession to the WTO. The bilateral 
agreement was signed on November 19, 2006.
    On July 28, 2005, Congressman Issa introduced H. Con. Res. 
230 to address concerns about rampant piracy and a lack of 
effective intellectual property rights (IPR) protections in 
Russia. H. Con. Res. 230 expressed the sense of Congress that 
(1) the Russian Federation should provide effective protection 
of IPR or it risks losing its eligibility to participate in the 
Generalized System of Preferences (GSP) program, and (2) as 
part of its effort to accede to the World Trade Organization, 
the Russian Federation must ensure that intellectual property 
is securely protected in law and in practice. On November 16, 
2005, the House approved H. Con. Res. 230, by a vote of 421-2. 
On December 22, 2005, the Senate approved H. Con. Res. 230 by 
unanimous consent.
    Vietnam's trade status is also subject to the ``Jackson-
Vanik'' provisions. Vietnam has received Presidential waivers 
of Jackson-Vanik provisions since 1998, most recently on June 
5, 2006. Congress has not voted on a Jackson-Vanik disapproval 
resolution since 2002 because no Member has introduced one in 
time.
    Vietnam is in the process of acceding to the World Trade 
Organization. If the United States and Vietnam are to enjoy a 
full-fledged trade relationship once Vietnam joins the WTO, the 
annual Jackson-Vanik review must be ended and replaced with 
permanent NTR (PNTR). Legislation to grant PNTR to Vietnam was 
introduced in the House (H.R. 5602) and Senate (S. 3495) on 
June 13, 2006. The bill was referred to the Committee and 
placed on the House Suspension Calendar on November 13, 2006, 
with an amendment to establish a mechanism for the 
Administration to determine whether Vietnam grants any 
prohibited subsidies to its textile and apparel industry after 
its accession to the World Trade Organization (WTO). The bill 
failed to pass with the requisite two-thirds majority with a 
vote of 228-161. The provision (with the amendment) was 
subsequently included in H.R. 6406, which passed the House on 
December 8, 2006, by a recorded vote of 212-184 and, as 
described above, was subsequently merged into H.R. 6111, which 
passed the Senate on December 9, 2006, by a recorded vote of 
79-9.
    13. Trade Preference Legislation.
    Actions taken: The Subcommittee continued its oversight 
over the Trade and Development Act of 2000 (P.L. 106-606) 
(Africa/Caribbean Basin Initiative), the enhancement to these 
programs contained in the Trade Act of 2002, the Andean Trade 
Preferences Act, and the AGOA Acceleration Act to ensure that 
the legislation is being implemented in a manner consistent 
with Congressional intent. The Subcommittee also examined 
whether preference programs should be extended to other 
countries and continued its efforts, begun in the 108th 
Congress, to extend preferential benefits to Haiti.
    On September 21, 2006, Chairman Thomas introduced H.R. 
6142, the Trade Preferences Act. The bill would (1) extend the 
Generalized System of Preferences for two years subject to new 
limitation on waivers of competitive need limits, (2) extend 
and enhance apparel and textile benefits under the African 
Growth and Opportunity Act including a two-year extension of 
benefits for apparel using third country fabric and a 
subsequent value-added rule of origin, and (3) create a new 
preference program for Haiti. No further action was taken on 
the bill in the 109th Congress, but an altered version of this 
legislation was subsequently included in H.R. 6406.
    Chairman Thomas introduced H.R. 6406 on December 7, 2006, 
which included several trade preference provisions to: (1) 
extend the GSP program for two years subject to a discretionary 
limitation on waivers of competitive need limits for products 
that constitute 150 percent of the competitive need limit or 75 
percent of U.S. imports of that product; (2) extend the third 
country fabric benefit under AGOA until 2012, with a full 3.5 
percent cap, and allowance of duty free treatment for lesser 
developed countries for certain textiles of wholly made African 
fabric; (3) extend the trade preferences for Andean countries 
(Peru, Colombia, Ecuador, and Bolivia) for six-months, followed 
by an additional six month extension for each country only if 
the United States and that country each complete their 
legislative process to approve a trade promotion agreement; and 
(4) create additional trade preferences for certain apparel and 
automotive wire harnesses produced in Haiti. H.R. 6406 passed 
the House under a rule on December 8, 2006, by a recorded vote 
of 212-184 and, as described above, was subsequently merged 
into H.R. 6111, which passed the Senate on December 9, 2006, by 
a recorded vote of 79-9.
    Regarding African trade preferences, the Committee 
requested ongoing briefings by Administration officials on the 
operation of the AGOA. On June 6, 2006, the Committee hosted a 
meeting of over 60 African trade officials to discuss issues of 
importance to the operation of AGOA and the status of WTO 
negotiations.
    14. Textiles and Apparel.
    Actions taken: The Subcommittee continued its oversight as 
to: the value of trade preference programs and their effect on 
U.S. industries; impact of the elimination of textile quotas in 
January 2005 on U.S. industries, countries receiving trade 
preferences, and other countries; effectiveness of efforts to 
halt illegal transshipment; and the use of textile safeguards 
(particularly with respect to transparency and application of 
statutory standards).
    On October 24, 2006, Chairman Thomas requested the ITC to 
conduct a study under section 332 of the Tariff Act of 1930 on 
certain outerwear and luggage.
    15. Sanctions Reform.
    Actions taken: On September 27, 2006, Congresswoman Ileana 
Ros-Lehtinen introduced H.R. 6198, the Iran Freedom Support 
Act, which included provisions that would extend and modify 
import sanctions. On September 27, 2006, Chairman Thomas and 
Chairman Hyde exchanged letters acknowledging the jurisdiction 
of the Committee on Ways and Means and its agreement to forgo 
consideration of the bill because several amendments supported 
by the Committee would be included in the bill. On September 
28, 2006, the legislation passed the House under suspension of 
the rules. On September 30, 2006, the bill passed the Senate 
without amendment by unanimous consent. It was signed into law 
by the President on September 30, 2006 (P.L. 109-293).
    See Burma below.
    16. Burma.
    Actions taken: On July 28, 2003, the President signed into 
law the ``Burmese Freedom and Democracy Act of 2003'' (P.L. 
108-61) 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. 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 would 
expire one year after enactment unless renewed by Congress with 
a joint resolution meeting certain requirements, and the 
authority to renew these sanctions annually was initially set 
to expire in 2006. Congress has annually renewed the import 
restrictions.
    On May 26, 2005, Congressman Lantos introduced H. J. Res. 
52 to extend the import sanctions for 1 year. On June 21, 2005, 
H. J. Res. 52 was approved by the House under a suspension of 
the rules by a recorded vote of 423-2. On July 19, 2005, the 
bill passed the Senate without amendment by a recorded vote of 
97-1. The President signed H. J. Res. 52 into law on July 27, 
2005 (P.L. 109-39).
    The most recent renewal was contained in H. J. Res. 86, 
introduced by Congressman Lantos on May 19, 2006. H. J. Res. 86 
extends the import ban for another year and gives Congress the 
option to annually extend the import ban for 2 additional years 
if Burma does not make progress in its human rights record and 
if Congress determines that continued import sanctions are the 
most appropriate policy to induce change by the Government of 
Burma. On July 11, 2006, H. J. Res. 86 was approved by the 
House under a suspension of the rules by a voice vote. On July 
26, 2006, the bill passed the Senate without amendment by a 
voice vote. The President signed H. J. Res. 86 into law on 
August 1, 2006 (P.L. 109-251).
    17. 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; 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.
    The Committee reviewed proposed changes to the Harmonized 
Tariff Schedule (HTS), which is modified periodically and then 
submitted to the WTO. The proposed changes were submitted to 
the Committee on May 19, 2006, commencing a sixty-day 
(legislative) layover period.
    On December 7, 2006, Chairman Thomas introduced H.R. 6406, 
which included a provision to extend the current 15-day period 
to 30 days for changes to the Harmonized Tariff Schedule to be 
finalized after publication in a Presidential proclamation to 
afford the private sector sufficient time to incorporate all of 
the changes in their computer systems and avoid costly, time-
consuming errors to entries. H.R. 6406 passed the House under a 
rule on December 8, 2006, by a recorded vote of 212-184. Under 
the rule accompanying H.R. 6111, H.R. 6406 was merged into H.R. 
6111, which then passed the Senate on December 9, 2006, by a 
recorded vote of 79-9. The bill was signed in to law on 
December 20, 2006.\11\
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    \11\ At the time of printing, the Public Law number for H.R. 6111 
was not available.
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    As noted above, H.R. 6142 and H.R. 6406 both included a 
provision to grant additional trade preferences for certain 
apparel and automotive wire harnesses produced in Haiti meeting 
a new rule of origin.
    18. Trade Relations With Japan.
    Actions taken: On July 14, 2005, Congressman Phil English 
introduced H.R. 3283, the Trade Rights Enforcement Act, which 
is described above under legislation related to China. Among 
other things, the bill urged the President to address Japan's 
currency interventions and various trade barriers through 
additional funding to USTR enforcement offices. The bill passed 
the House on July 27, 2005, by a recorded vote of 255-168.
    On September 28, 2005, the Committee held a hearing on 
United States-Japan economic and trade relations. The hearing 
focused on (1) Japan's economic problems, their causes, and 
impact on the United States and world economy; (2) Japan's 
barriers to agriculture imports such as the ban on U.S. beef, 
discriminatory government actions against U.S. products, and 
general non-tariff barriers; (3) Japan's role in the current 
WTO negotiations; and (4) the recent economic and regulatory 
reform attempts in Japan, including legislation to privatize 
major components of Kampo, the Japanese postal entity. 
Subsequently, in December 2005, Japanese authorities lifted the 
ban on beef imports from the United States for cattle under 20 
months but then suspended imports in January 2006.
    On March 5, 2005, and again on May 23, 2005, Chairman 
Thomas wrote to Japanese Ambassador Kato urging an immediate 
resumption of trade in U.S. beef. The Committee continued to 
oversee this issue through the discussions between the 
Administration and the Government of Japan.
    On March 7, 2006, in response to interest by Committee 
Members on Japan's regulation of competition affecting U.S. 
sales and trade of medical devices and equipment in Japan, 
Chairman Thomas requested an ITC 332 investigation.
    19. Asia Pacific Economic Cooperation Forum.
    Actions taken: During the 109th Congress, the United States 
concluded a free trade agreement (FTA) with APEC member Peru, 
and began or continued FTA negotiations with APEC members 
Korea, Malaysia, and Thailand (see other sections of this 
report for more information). In addition, during the 109th 
Congress, the United States concluded separate bilateral 
agreements with Russia and Vietnam, also APEC members, for each 
country's accession to the WTO. The Administration and the 
Committee have consulted regularly on the status of all these 
separate negotiations and on U.S. negotiating positions. The 
Committee continued to monitor the status of ongoing talks as 
well as other U.S. trade policy objectives in Asia that relate 
to APEC members.

Subcommittee on Health

    1. Medicare Payment for Hospital Services.
    Actions taken: On July 16, 2006, the Subcommittee held a 
hearing to receive testimony on initiatives to develop greater 
price transparency in the health care sector and the impact and 
benefits of price transparency, including the potential for 
increased competition, lower costs, and lower spending growth. 
The Subcommittee received testimony from hospital and insurance 
industry representatives, and members of the academic 
community. On December 2, 2005, the Subcommittee held a field 
hearing on competition and health care price variations in the 
FEHB program, and received testimony from the Government 
Accountability Office (GAO), the hospital industry, and 
business and community leaders. The information will be useful 
in analyzing and developing future price transparency 
initiatives. On October 7, 2005, the Subcommittee held a 
hearing on gainsharing to explore implementation of system 
changes which include the creation of opportunities for skilled 
medical service professionals to work together to improve both 
health care quality and efficiency. Information gathered at the 
hearing was used to develop a gainsharing demonstration set 
forth in S. 1932, the Deficit Reduction Act (P.L. 109-171). On 
March 8, 2005, the Subcommittee held a hearing on physician-
owned specialty hospitals, and received testimony from the 
Medicare Payment Advisory Commission (MedPAC), CMS, and 
industry representatives, which information was critical in 
developing the strategic and implementing plan set forth in S. 
1932, the Deficit Reduction Act (P.L. 109-171).
    2. Medicare Waste Fraud and Abuse.
    Actions taken: The Subcommittee examined the results of the 
recovery audit contractor demonstration that was authorized by 
the Medicare Modernization Act of 2003, and reviewed the 
results of the demonstration as set forth in a public report 
issued by the Centers for Medicare and Medicaid Services on 
November 16, 2006, which identified hundreds of millions of 
dollars in Medicare overpayments. On the basis of results 
indicating substantial future savings to Medicare, the 
Committee expanded the scope and operation of the recovery 
audit contractor program in the H.R. 6111, the Tax Relief and 
Health Care Act of 2006.\12\
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    \12\ At the time of printing, the Public Law number for H.R. 6111 
was not available.
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    3. Health Savings Accounts.
    Actions taken: On June 28, 2006, the full Committee held a 
hearing on health savings accounts, and received testimony from 
Treasury representatives and from business and industry 
representatives regarding the operation of the accounts to date 
and the need for any changes and improvements. This hearing 
resulted in information that assisted in the full Committee 
markup on September 27, 2006 of H.R. 6134, the Health 
Opportunity Patient Empowerment Act of 2006, which contained 
provisions ultimately enacted into law in the H.R. 6111, the 
Tax Relief and Health Care Act of 2006.\13\
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    \13\ At the time of printing, the Public Law number for H.R. 6111 
was not available.
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    4. Medicare Program Oversight.
    Actions taken: On May 3, 2006, the Subcommittee held a 
hearing to receive testimony from the Centers for Medicare and 
Medicaid Services and health care professionals concerning 
implementation of the Medicare drug benefit. On May 4, 2006, at 
the request of the minority, the Subcommittee held a 
continuation of the hearing, and received testimony from the 
Honorable Henry Waxman and health care professionals who were 
concerned about the structure and design of the Medicare drug 
benefit. On June 14, 2006, the full Committee held a hearing to 
receive testimony concerning lessons learned during the 
implementation of the prescription drug program, the latest 
beneficiary enrollment figures, and the effect of the initial 
May 15th enrollment deadline.
    5. Medicare Payments for Post-Acute Care.
    Actions taken: On June 16, 2005, the Subcommittee held a 
hearing to receive testimony from the Centers for Medicare and 
Medicaid Services, the Medicare Payment Advisory Commission, 
U.S. Government Accountability Office, and health care 
professionals concerning post-acute care. The hearing focused 
on current financing for post-acute care services in Medicare; 
the services available across the various post-acute settings; 
the patient assessment instruments used in each settings and 
the commonalities between them; and prospects and suggestions 
for moving ahead with a common patient assessment tool and more 
rational payment system based on beneficiary need rather than 
institutional setting. This hearing provided information that 
was critical to the creation of the Post-Acute Care 
Demonstration Program in S. 1932, the Deficit Reduction Act 
(P.L. 109-171).
    6. Othere Medicare Payment.
    Actions taken: On April 19, 2005, the Subcommittee held a 
hearing to receive testimony from the Congressional Budget 
Office and health care professionals concerning long term care. 
The hearing focused on current financing for long term care 
services; the range of services available in the continuum of 
care from home- and community-based services to nursing home 
care; private long term care insurance options, including the 
Long Term Care Partnership programs; and the challenges ahead 
in financing needed services for an aging population.
    On March 15, 2006, the Subcommittee held a hearing to 
receive testimony from the Centers for Medicare and Medicaid 
Services, the Medicare Payment Advisory Commission, and health 
care professionals concerning Medicare payment and coverage 
policies for long-term acute care hospitals.
    On December 6, 2006, the full Committee on Ways and Means 
held a hearing on Patient Safety and Quality Issues in End 
Stage Renal Disease (ESRD) Treatment. This hearing identified 
potential safety concerns regarding the utilization of drugs 
used in ESRD settings. However, there is also a concern 
regarding appropriate reimbursement for ESRD facilities. The 
Tax Relief and Health Care Act of 2006 (H.R. 6111) provides a 
1.5 percent update to the composite rate for ESRD facilities in 
2007.
    7. Medicare Payments for Physician Services.
    Actions taken: On February 10, 2005, the Subcommittee held 
a hearing to receive testimony from the U.S. Government 
Accountability Office, the Medicare Payment Advisory 
Commission, and health care professionals concerning Medicare 
payments to physicians. On March 15, 2005, the Subcommittee 
held a hearing to receive testimony from the Centers for 
Medicare and Medicaid Services and health care professionals 
concerning measuring physician quality and efficiency of care 
for Medicare. The hearing focused on identifying the steps 
being taken by CMS and others to measure quality and efficiency 
of physician care. On July 21, 2005, the Subcommittee held a 
hearing to receive testimony from the U.S. Department of Health 
and Human Services and health care professionals concerning 
value-based purchasing for physicians under Medicare. The 
hearing focused on developments since the last Subcommittee 
hearing in March on physician payments and value-based 
purchasing. On September 29, 2005, the Subcommittee held a 
legislative hearing to receive testimony from the Centers for 
Medicare and Medicaid Services and health care professionals 
concerning the Medicare Value-Based Purchasing for Physicians 
Act. These hearings assisted in developing legislation that 
provides a bonus for the reporting of quality measures in 2007. 
The Tax Relief and Health Care Act of 2006 (H.R. 6111) also 
establishes a physician assistance and quality initiative fund 
to allow CMS to continue quality initiatives for physicians.
    8. New Technologies in the Medicare Program.
    Actions taken: On April 6, 2006, the Subcommittee held a 
hearing to receive testimony from the U.S. Department of Health 
and Human Services and others concerning the development and 
use of health care information technology. On July 27, 2005, 
the Subcommittee held a hearing to receive testimony from the 
U.S. Department of Health and Human Services and health care 
professionals concerning health care information technology, 
and the approach being taken by the Administration to speed the 
adoption of health IT and areas where congressional involvement 
can further these efforts. The information gathered from these 
hearings assisted in development and House passage of the 
Health Information Technology Promotion Act of 2006 (H.R. 
4157).
    9. Medically Uninsured.
    Actions taken: On July 27, 2006, the Subcommittee held a 
hearing to receive testimony from emergency care professionals 
and others concerning emergency care.

Subcommittee on Human Resources

    1. Welfare Reform.
    Actions taken: The Subcommittee held a hearing on February 
10, 2005 on welfare reform reauthorization proposals and 
related programs. Witnesses testified about the Temporary 
Assistance for Needy Families (TANF) program, including 
recommendations for further reforms to promote additional work 
by parents and self-sufficiency for families. In addition, the 
Subcommittee heard testimony about the need for States to help 
every family they serve achieve the greatest degree of self-
sufficiency and find effective ways to improve child well-being 
through programs aimed at promoting healthy marriages and 
encouraging responsible fatherhood. The Subcommittee received 
testimony about other programs under its jurisdiction, 
including Child Support Enforcement, Foster Care and Adoption 
Assistance, and Supplemental Security Income, from a wide 
variety of witnesses.
    U.S. Department of Health and Human Services (HHS) 
Secretary Michael Leavitt testified before the full Committee 
on February 17, 2005 regarding the President's fiscal year 2006 
budget proposals for HHS. During his testimony HHS Secretary 
Leavitt discussed the TANF program and the Administration's 
proposals for reauthorization.
    On July 14, 2005 the Subcommittee held a hearing on welfare 
and work data, highlighting additional resources States can 
access to determine whether adults on welfare are working and 
how to better target work supports to assist them. Using data 
from the National Directory of New Hires and welfare caseload 
information, HHS reported there are thousands more current and 
former welfare recipients working than States had reported. 
This new information offered important implications for the 
next stage of welfare reform, including that it is appropriate 
for Federal policy to expect and support more work among 
parents on welfare.
    On February 8, 2006 the full Committee held a hearing on 
the President's fiscal year 2007 budget proposal for HHS. HHS 
Secretary Leavitt testified about implementation of the welfare 
reform reauthorization provisions included in the ``Deficit 
Reduction Act of 2005'' (P.L. 109-171), among other matters.
    On July 19, 2006 the full Committee held a hearing to 
review outcomes of the 1996 welfare reforms. Witnesses included 
the former Speaker of the U.S. House of Representatives Newt 
Gingrich, former Wisconsin Governor and HHS Secretary Tommy 
Thompson, Sen. Rick Santorum (R-PA), and other welfare policy 
experts.
    A full Committee hearing on the Impacts of Border Security 
and Immigration on Ways and Means Programs was held on July 26, 
2006. A witness representing the HHS discussed immigrant use of 
TANF program benefits, including among ``child only'' 
households that may include an illegal alien parent.
    2. Child Support and Fatherhood.
    Actions taken: At the Subcommittee's February 10, 2005 
hearing on welfare reform proposals, child support and 
fatherhood provisions of the President's budget proposal and 
H.R. 240 were discussed.
    In a June 30, 2005 report (GAO-05-839R) to Subcommittee 
Chairman Wally Herger, the U.S. Government Accountability 
Office (GAO) provided background about administrative 
expenditures and Federal matching rates for selected programs 
including Child Support Enforcement, Foster Care, Adoption 
Assistance, Child Care, Medicaid, and Food Stamps. In a 
subsequent letter to Chairman Herger on September 9, 2005, GAO 
further explained that, in terms of child support program 
costs, ``the Federal government's share represented 88 percent 
of the net costs for the child support enforcement program for 
fiscal year 2004,'' among other data. Numerous Child Support 
Enforcement program reforms were included in the ``Deficit 
Reduction Act of 2005'' (P.L. 109-171), reflecting the 
Subcommittee's oversight activities and investigations of ways 
to improve the efficiency of program operation.
    3. Supplemental Security Income (SSI).
    Actions taken: On September 27, 2005 the Subcommittee held 
a joint hearing with the Subcommittee on Social Security on the 
Commissioner of Social Security's proposed improvements to the 
disability determination process. Witnesses included The 
Honorable Jo Anne B. Barnhart, Commissioner, Social Security 
Administration; State and local program administrators; policy 
experts; and members of the legal community. The Subcommittees 
heard testimony about the possible effects of the improvements 
in the disability determination process, including a possible 
reduction in processing time of at least 25 percent.
    The witness list for a full Committee hearing on the 
Impacts of Border Security and Immigration on Ways and Means 
Programs on July 26, 2006 included the Commissioner of the 
Social Security Administration. In testimony and follow-up 
questioning, the Commissioner discussed implications of 
immigration on the SSI program.
    The ``Deficit Reduction Act of 2005'' (P.L. 109-171) 
included two SSI program reforms, designed to improve the 
accuracy of disability determinations and benefit awards, among 
other program goals.
    4. Child Protection, Foster Care, and Adoption Assistance.
    Actions taken: The Subcommittee held a hearing on February 
10, 2005 on welfare reform reauthorization proposals and 
related programs. The Subcommittee received testimony about 
other programs under its jurisdiction, including Child 
Protection and Foster Care and Adoption Assistance, from a wide 
variety of witnesses.
    U.S. Department of Health and Human Services Secretary 
Michael Leavitt testified before the full Committee on February 
17, 2005 regarding the President's fiscal year 2006 budget 
proposals for HHS, including involving Child Protection, Foster 
Care, and Adoption Assistance programs.
    At a Subcommittee hearing on May 18, 2005 testimony was 
heard on protections for foster children enrolled in clinical 
drug trials. Witnesses included a representative from the 
Administration, State and local program administrators, and 
policy experts. Testimony described conditions under which 
participation of children in foster care is permitted, as well 
as allegations involving the inappropriate enrollment of foster 
children in such trials.
    On June 9, 2005 the Subcommittee held a hearing on foster 
care financing. Witnesses included a representative from the 
Administration, State and local program administrators, and 
policy experts. Testimony was heard on the funding structure 
for the title IV-E Federal Foster Care program, including key 
weaknesses in the program and how the President's proposal to 
establish a Child Welfare Program Option would address these 
weaknesses.
    On February 8, 2006 the full Committee held a hearing on 
the President's fiscal year 2007 budget proposal for HHS. The 
Secretary of HHS, Michael Leavitt testified about 
reauthorization of the Promoting Safe and Stable Families 
program, among other matters.
    On May 23, 2006 the Subcommittee held a hearing to review 
proposals to improve child protection services. Testimony was 
heard from representatives of numerous charitable and trade 
associations, including on specific proposals to extend and 
improve several child protection services programs under the 
Subcommittee's jurisdiction, including the Promoting Safe and 
Stable Families and Child Welfare Services programs.
    Many child protection program reforms resulting from these 
oversight hearings were included in the ``Deficit Reduction Act 
of 2005'' (P.L. 109-171) and the ``Child and Family Services 
Improvement Act of 2006'' (P.L. 109-288).
    5. Unemployment Compensation.
    Actions taken: On March 16, 2005 the full Committee held a 
hearing on the President's fiscal year 2006 budget for the U.S. 
Department of Labor.
    A hearing to review the implementation of the ``SUTA (State 
Unemployment Tax Act) Dumping Prevention Act of 2004'' (P.L. 
108-295) was held by the Subcommittee on June 14, 2005. The 
Subcommittee heard testimony on how the law prevented the 
abusive practice of SUTA dumping by certain employers, on how 
the law gave States additional tools to identify individuals 
who continued receiving unemployment benefits even after taking 
a new job, on the status of State implementation of these 
provisions, and on recommendations for further improvements.
    At a March 15, 2006 Subcommittee hearing, the U.S. 
Government Accountability Office testified on new research on 
characteristics of unemployment compensation recipients and 
actions States could take to better ensure unemployed 
individuals quickly return to work.
    On April 5, 2006 the Subcommittee held a hearing on the use 
of technology to improve public benefits programs. Testimony 
was submitted by State administrators, program and information 
specialists, and other experts. The hearing focused on methods 
of improving the provision of unemployment compensation and 
other benefits, including in the wake of hurricanes and other 
natural disasters.
    The Subcommittee held a May 24, 2006 hearing on the 
unemployment compensation aspects of the U.S. Department of 
Labor's fiscal year 2007 budget. Witnesses included a 
representative from the Administration, a State program 
administrator, and other interested parties. Testimony was 
heard on the funding structure of the unemployment compensation 
program, the behavioral effects of the programs, efforts to 
prevent fraud and abuse, and potential reforms to more quickly 
help unemployed individuals return to work.
    6. Repatriation.
    Actions taken: Concurrent with the House passage of H.R. 
5865, the ``Returned Americans Protection Act of 2006,'' which 
the President signed on July 27, 2006 (P.L. 109-250), Chairman 
Thomas received the assurance of HHS Secretary Leavitt that the 
HHS Inspector General will report to Congress by March 1, 2007 
on how repatriation program funds were spent to assist those 
repatriating to the U.S. from Lebanon in 2006. This report is 
to include a breakdown of administrative costs versus direct 
assistance such as travel and lodging expenses for those 
assisted. This additional information will help Congress 
fulfill its responsibility to ensure the proper use of taxpayer 
funds under this program.

Subcommittee on Social Security

    1. Hearings on Strengthening Social Security.
    Actions taken: The Subcommittee on Social Security held an 
eight-hearing series on protecting and strengthening Social 
Security.
    On May 17, 2005, the Subcommittee held the first hearing in 
the series, examining the evolution of the Social Security 
program to provide benefits for not only retired workers but 
also vulnerable populations, such as individuals with 
disabilities, homemakers, widows and widowers, and children. 
The Subcommittee heard testimony from the Commissioner of 
Social Security, the Government Accountability Office (GAO), 
and policy experts. Witnesses discussed the need to preserve 
benefits for vulnerable groups while updating the program to 
reflect changes in women's workforce participation, marriage 
and divorce trends, and other factors influencing the 
retirement income needs of American families.
    The Subcommittee held the second hearing in the series on 
May 24, 2005. The Subcommittee examined how the Social Security 
Trustees project the financial outlook for Social Security 
under current law. The Subcommittee heard testimony from the 
Chief Actuary of the Social Security Administration (SSA), who 
reviewed the program's estimated financial outlook, the basic 
assumptions the Trustees use to make their estimates, and some 
potential changes in benefit growth or tax revenue that could 
strengthen the program's finances. The Chief Actuary also 
stated that by acting as soon as possible, policy makers would 
have more options to consider, would be able to phase in 
changes more gradually, and could give affected individuals 
more advance notice.
    The Subcommittee held the third hearing in the series on 
May 26, 2005. This hearing provided Members of the House of 
Representatives an opportunity to testify on Social Security 
issues of importance to their constituents, including views and 
proposals on how to protect and strengthen the program. Twenty 
Members of the House of Representatives testified at the 
hearing.
    The Subcommittee held the fourth hearing in the series on 
June 9, 2005. The Subcommittee examined Social Security 
provisions affecting certain public employees, such as the 
Government Pension Offset (GPO) and the Windfall Elimination 
Provision (WEP), and exemption of certain public employees from 
Social Security coverage. Testimony was provided by 
representatives from the SSA, the GAO, and organizations 
representing public employees and employers affected by these 
provisions. The SSA and the GAO witnesses discussed the 
rationale for the GPO and WEP: to ensure public employees in 
jobs not covered under Social Security are treated similarly to 
workers who are covered under Social Security. Witnesses from 
organizations representing employees discussed the effects of 
these provisions on their members and recommended repealing or 
modifying the GPO and WEP. Some witnesses also testified that 
requiring Social Security coverage of all newly hired public 
employees could negatively affect public employee pension 
plans.
    The Subcommittee held the fifth hearing in the series on 
June 14, 2005. The Subcommittee examined the impact of the 
American population's increasing longevity on Social Security's 
finances and explored ways to encourage work at older ages. The 
Subcommittee heard testimony from policy experts who described 
the effects of growing life expectancies on the Social Security 
program and the economy and made various recommendations to 
modify the program so as to encourage labor force participation 
among seniors who are willing and able to work.
    The Subcommittee held the sixth hearing in the series on 
June 16, 2005. The Subcommittee examined international 
experiences with social security reform. The Subcommittee heard 
testimony from the GAO and policy experts. Witnesses described 
modifications in social security program benefits and financing 
undertaken in many other countries, including the introduction 
of personal accounts to advance-fund varying portions of 
benefits. Witnesses also discussed what the United States could 
learn from the experiences of other countries.
    The Subcommittee held the seventh hearing in the series on 
June 21, 2005. The Subcommittee examined the impact of economic 
trends on Social Security's financing and retirement security. 
The Subcommittee heard testimony from the Director of the CBO 
and policy experts. The CBO Director discussed the effects of 
four economic factors on Social Security's financial outlook: 
the growth of earnings, the interest rate used to compute the 
interest credited to the trust funds, employment, and 
inflation. The Director also discussed the economic benefits of 
increasing national saving, which potentially could be 
accomplished by adding personal accounts to Social Security. 
Policy expert witnesses discussed the effect of various 
economic and demographic trends on Social Security, as well as 
how reductions in benefit growth, increases in Social Security 
taxes, and advance-funding Social Security benefits through 
personal accounts would affect the economy and beneficiaries.
    The Subcommittee held the eighth and final hearing in the 
series on June 23, 2005. The Subcommittee examined options for 
designing a system of personal retirement accounts to ensure 
that the accounts are managed efficiently and accurately, with 
low administrative fees to preserve account balances. Options 
for paying out account balances at retirement were also 
examined. The Subcommittee heard testimony from representatives 
of the SSA and the GAO, along with policy experts. In general 
witnesses stated that centralized administration that takes 
advantage of economies of scale would keep administrative costs 
low. Witnesses also discussed options for converting personal 
account balances into a stream of lifetime income. Witnesses 
also explored options for distributing or dividing personal 
accounts at certain life events, such as death or divorce, and 
options for allocating account contributions during a couple's 
marriage.
    2. Hearings to Examine the use of the Social Security 
Number.
    Actions taken: The Subcommittee on Social Security held a 
five-hearing series on Social Security number (SSN) high-risk 
issues.
    The Subcommittee held the first hearing in the series on 
November 1, 2005. The Subcommittee examined the SSA's 
management of the SSN enumeration process, including the 
following: the history of SSNs, how they are assigned, how SSNs 
are used today within the agency and the Federal Government, 
issues related to changing the SSN card, Federal laws 
protecting SSNs, and agency efforts to limit SSN fraud and 
abuse. The Subcommittee heard testimony from those representing 
the SSA and the SSA Office of the Inspector General (OIG). The 
witnesses discussed challenges regarding the use of the SSN, 
and the need to balance quick assignment of numbers to 
individuals who qualify for them with prevention of SSN fraud 
and abuse.
    The Subcommittees on Social Security and Oversight jointly 
held the second hearing in the series on February 16, 2006. The 
Subcommittees examined how employers report wages to the SSA, 
the effects of incorrect wage reports on administration of the 
Social Security program and tax administration, and enforcement 
of hiring and wage-reporting responsibilities by the Department 
of Homeland Security (DHS) and the Internal Revenue Service 
(IRS). Witnesses from the IRS, the SSA, the DHS, the GAO, and 
the SSA OIG testified. Witnesses discussed the current process 
by which employers report earnings to the SSA, voluntary 
programs offered by the SSA and the DHS that employers may use 
to verify employees' SSNs and employment eligibility status, 
and enforcement of tax and immigration laws. Witnesses also 
discussed options to potentially detect work by unauthorized 
immigrants through data sharing.
    The Subcommittee held the third hearing in the series on 
March 2, 2006. The Subcommittee examined the SSA's management 
of the assignment of SSNs and the payment of benefits to 
foreign-born individuals. Witnesses from the SSA, the SSA OIG, 
and the GAO discussed how SSNs are assigned to foreign-born 
individuals; the role of SSNs in work authorization; current 
law regarding Social Security coverage and benefits of non-
citizens; the SSA's administration of totalization agreements; 
and proposals to improve the integrity of the enumeration 
process, improve stewardship of totalization agreements, and 
modify Social Security coverage and benefits for non-citizens.
    The Subcommittee held the fourth hearing in the series on 
March 16, 2006. The Subcommittee examined expanding uses of the 
SSN card and measures to prevent SSN card fraud. The 
Subcommittee also heard the testimony of witnesses from the 
SSA, the SSA OIG, and policy experts regarding the history of 
SSNs and SSN card use, the role of the SSN card in work 
authorization, measures to prevent SSN card fraud, and the 
potential effects of transforming the SSN card into an 
identification document.
    The Subcommittee held its fifth and final hearing in the 
series on March 30, 2006. The Subcommittee examined the role of 
SSNs in identity theft and options to enhance SSN privacy. The 
Subcommittee heard testimony by witnesses from the Federal 
Trade Commission, the GAO, public record administrators, 
private investigators, the financial services industry, and an 
identity theft victim. Witnesses discussed the role of SSNs in 
abetting identity theft, and the effects of proposals to 
prohibit or restrict the use, sale, purchase, or display of 
SSNs by individuals, businesses, or the government. Also, at 
the beginning of the hearing, two Members provided testimony 
regarding their proposal to add certain security features to 
SSN cards.
    3. Hearings to Examine Disability Program Reform and 
Oversight.
    Actions taken: On September 27, 2005, the Subcommittee on 
Social Security held a joint hearing with the Subcommittee on 
Human Resources on the Commissioner of Social Security's 
proposed improvements to the disability determination process. 
The Subcommittees examined Commissioner Barnhart's proposed 
regulations for the disability determination process and new 
return-to-work demonstration projects. Witnesses included the 
Commissioner of Social Security; the Chair of the Judicial 
Conference Committee, Federal-State Jurisdiction, 
Administrative Office of the U.S. Courts; the Co-Chair of the 
Social Security Task Force, Consortium for Citizens with 
Disabilities; and representatives from other interested 
organizations. Witnesses discussed the new approach proposed by 
the SSA, the objective of the changes made, and their potential 
effect on the Social Security disability claims process.
    On June 15, 2006, the Subcommittee held a hearing on Social 
Security's improved disability determination process. During 
this hearing the Subcommittee examined the SSA's final 
regulation, including how the Agency addressed public comments 
in developing its final rule and how implementation will 
proceed. Testimony was heard from the Commissioner of Social 
Security, along with representatives from the GAO, the Social 
Security Task Force of the Consortium for Citizens with 
Disabilities, the Federal Bar, the National Organization of 
Social Security Claimant's Representatives, and employee 
organizations.
    4. Hearings to Examine Stewardship of the Social Security 
Programs.
    Actions taken: The Subcommittee has continued its oversight 
of the stewardship of the Social Security programs through the 
five-hearing series on Social Security number (SSN) high-risk 
issues summarized above and through discussions with, and 
reports requested from, the SSA, the GAO, the SSA OIG, and 
interested parties.
    5. Hearings to Examine Service Delivery.
    Actions taken: On May 11, 2006, the Subcommittee held a 
hearing on Social Security service delivery challenges. The 
Subcommittee heard testimony about the current service delivery 
challenges facing the SSA and how the President's budget 
request will help address those challenges. The Commissioner of 
Social Security presented testimony on the delivery of 
traditional services, stewardship, staffing, new enumeration 
procedures, and the Medicare prescription drug program.
    In addition, Subcommittee Chairman McCrery has received the 
following studies/reports requested by the Subcommittee from 
the GAO: (1) Social Security Numbers--Internet Resellers 
Provide Few Full SSNs, but Congress Should Consider Enacting 
Standards for Truncating SSNs; (2) Social Security Numbers--
Stronger Protections Needed When Contractors Have Access to 
SSNs; (3) Social Security Reform--Other Countries' Experiences 
Provide Lessons for the United States; (4) Social Security 
Reform--Implications of Different Indexing Choices; (5) Social 
Security--Better Coordination Among Federal Agencies Could 
Reduce Unidentified Earnings Reports; (6) Immigration 
Enforcement: Benefits and Limitations To Using Earnings Data To 
Identify Unauthorized Work; (7) Social Security Statements--
Social Security Administration Should Better Evaluate Whether 
Workers Understand Their Statements; and (8) Social Security 
Administration--A More Formal Approach Could Enhance SSA's 
Ability To Develop and Manage Totalization Agreements.
    Also, Chairman McCrery has requested the following studies 
from the GAO that are ongoing: (1) the effect of options to 
modify the Social Security benefit formula on benefits payable 
under the disability insurance and survivor's insurance 
programs, and on the spouses and children of retired and 
disabled workers; (2) vocational rehabilitation outcomes for 
the SSA's disability beneficiaries; (3) the role of the 
judicial appeals process in Social Security claims 
adjudication; and (4) Social Security Administration's 
disability claims backlog.

 C. Additional Oversight Activities and any Recommendation or Actions 
                                 Taken


    1. ADDITIONAL OVERSIGHT ACTIVITIES OF THE OVERSIGHT SUBCOMMITTEE

a. Investigation of the tax-exempt treatment of intercollegiate 
        athletics revenue

    Actions taken: During 2006, Chairman Thomas initiated an 
inquiry into the tax-exempt treatment of intercollegiate 
athletics revenue. The Subcommittee interviewed numerous 
officials from the National Collegiate Athletic Association 
(NCAA), athletic conferences, football bowl organizations, and 
college sports reform groups. Chairman Thomas sent an eight-
page letter to the president of the NCAA requesting responses 
to questions relating to the educational purpose and financial 
condition of college sports. The letter raised numerous issues, 
including whether the NCAA was accomplishing its tax-exempt, 
educational mission; how massive expenditures on state-of-the-
art athletic facilities, coaches' salaries, and lavish travel 
arrangements furthered the educational mission of universities; 
and why the NCAA distributes over $100 million each year based 
on athletic rather than academic performance.

b. Failure of the electronic fraud detection system

    Actions taken: The Subcommittee investigated the failure of 
the IRS and its contractor, the Computer Sciences Corporation 
(CSC), to implement an updated electronic system to detect 
fraudulent tax returns in 2006. This failure cost taxpayers 
hundreds of millions of dollars and permitted criminals who 
intentionally filed false returns to defraud the Federal 
government. In addition, the IRS paid CSC $18.5 million for 
more than two years of work that never resulted in a functional 
product. In a letter to Treasury Secretary Henry Paulson, 
Chairman Thomas requested that the appropriate individuals be 
held accountable, future efforts to implement the Electronic 
Fraud Detection System be closely monitored, and that the IRS's 
dependence on CSC for modernizing IRS business systems be 
reexamined.

c. Review of credit union tax exemption

    Actions taken: In November 2006, the National Credit Union 
Administration (NCUA) released a report on the income 
characteristics of credit union membership and executive 
compensation. The NCUA report recommended expanding data 
collection efforts and enhancing transparency with respect to 
executive compensation.
    Chairman Thomas requested that the National Association of 
State Credit Union Supervisors (NASCUS) begin to collect data 
relating to executive compensation, membership, services, 
credit union service organizations and unrelated business 
income tax. NASCUS will report their findings to Congress in 
2007.
    The Government Accountability Office (GAO) released two 
reports--one on credit union transparency and the other on 
corporate governance and the objectivity of the NCUA on 
December 1, 2006, on behalf of Chairman Thomas. Analyzing data 
from the Federal Reserve's 2004 Survey of Consumer Finances, 
GAO found that banks were still serving a higher percentage of 
lower- and moderate-income households than credit unions. GAO 
also determined that compensation of credit union executives 
was not transparent. GAO recommended that the NCUA enhance 
transparency with respect to executive compensation and adopt 
practices employed by other financial regulators to enhance the 
independence and objectivity of the NCUA and maintain an arm's-
length relationship with the regulated industry.

d. Further review of the Red Cross and its disaster preparedness in 
        2006

    Actions taken: The Subcommittee requested the Government 
Accountability Office (GAO) to review the response by the Red 
Cross to Hurricane Katrina. The purpose of the review was to 
determine whether the Red Cross fulfilled its responsibility in 
the National Response Plan to coordinate federal mass care 
assistance. The GAO concluded that the Red Cross and the 
Federal Emergency Management Agency (FEMA) disagreed about 
their roles and responsibilities, which strained their working 
relationships and hampered their efforts to coordinate relief 
services for hurricane victims. The report recommended that the 
Red Cross and FEMA agree on operating procedures and improve 
the tracking of relief resources, and the report called for the 
Red Cross to implement certain staffing strategies. 
Furthermore, the Subcommittee interviewed the former Red Cross 
president, as well as the chairman of the board of directors, 
to identify the causes for certain failures in the Red Cross's 
response to Hurricane Katrina and to determine whether 
structural changes at the Red Cross were necessary.

e. Policies and procedures of the U.S. Tax Court

    Actions taken: In March 2005, the Supreme Court held that 
the U.S. Tax Court had been using invalid procedures to handle 
certain cases heard by Special Trial Judges, a group of junior 
judges at the Tax Court. The Supreme Court held that the Tax 
Court had been improperly requiring original opinions drafted 
by Special Trial Judges to be kept confidential. These original 
opinions had to be reviewed by Presidentially-appointed Tax 
Court judges before they could be adopted. In some cases, 
Presidentially-appointed judges made significant changes to the 
original opinion drafted by the Special Trial Judge, even 
though the appointed judge had never participated in the trial. 
The Supreme Court found that this procedure was improper (See 
Ballard et ux. v. Commissioner of Internal Revenue, 544 U.S. 40 
(2005)). The Supreme Court's decision led to questions about 
the way the Tax Court had handled almost 1,000 similar taxpayer 
cases. The Subcommittee reviewed the Tax Court's procedures to 
develop a better understanding of why the Tax Court was using 
these defective procedures, the scope of the problem, the 
effect on taxpayers, and potential solutions to address the 
problem.

f. GAO review of the feasibility of sharing new hires data with law 
        enforcement for child abduction cases

    Actions taken: The Subcommittees on Human Resources and 
Oversight requested that the Government Accountability Office 
(GAO) conduct a study to determine whether the National 
Directory of New Hires (NDNH) could be used to assist law 
enforcement agencies locate convicted sex offenders. The 
Government Accountability Office (GAO) recommends granting 
Health and Human Services (HHS) the ability to provide NDNH 
data to the Federal Bureau of Investigation (FBI) and directs 
HHS and the FBI to conduct a test match of data from the 
National Sex Offender Registry (NSOR) and NDNH. Conducting a 
test match will help to assess the costs, benefits and validity 
that come about from matching the two databases. The report 
also addressed privacy and security concerns with expanding 
access to this data.

g. Examination of donor-advised funds and supporting organizations

    Actions taken: The Committee on Ways and Means requested 
the Government Accountability Office (GAO) to examine the 
federal laws and regulations related to donor-advised funds and 
supporting organizations, compared to the laws and regulations 
for private foundations. The GAO was asked to identify areas 
where donor-advised funds and supporting organizations may not 
be complying with the law. The GAO was also requested to 
collect information on the financial and organizational 
characteristics of donor-advised funds and supporting 
organizations. The GAO found that some of these organizations 
were being used in abusive schemes to benefit donors or other 
related parties. Since donor-advised assets often range in the 
billions of dollars, compared to the assets of supporting 
organizations and private foundations which range in the 
hundreds of billions, this became a cause for concern. The IRS, 
however, often faces challenges gathering evidence or 
addressing activities that do not clearly benefit charities 
because some of these activities do not violate current law. 
The GAO recommended that the IRS collect additional data to 
determine the payout rate to charities; to track the 
relationships between organizations; and to monitor loans made 
to officers, donors, and others associated with the charity. 
The Pension Protection Act of 2006 (P.L. 109-280) included 
several reforms to improve the accountability of donor-advised 
funds and supporting organizations.

          2. ADDITIONAL OVERSIGHT ACTIVITIES OF THE COMMITTEE

    On July 26, 2006, the full Committee held a hearing on the 
impacts of border security and immigration on Ways and Means 
programs. The Committee heard testimony by witnesses from the 
Department of Homeland Security, the Department of Health and 
Human Services, the Internal Revenue Service, the Social 
Security Administration, and policy experts on the effect of 
immigration and border security-related proposals on the costs 
and administration of certain entitlement programs within the 
jurisdiction of the Committee on Ways and Means (including 
Social Security, Supplemental Security Income, Medicare, and 
Temporary Assistance for Needy Families), and the effect on tax 
revenues and compliance. Representatives Shaw, Lewis of 
Kentucky, and Chocola followed up on this hearing by hosting 
forums in their districts to explore these issues further on a 
local level. Information gathered during the Members' forums 
and the full Committee hearing was related by Chairman Thomas 
during his testimony before the Republican Policy Committee on 
September 12, 2006.

      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 109th Congress, provides 
for the jurisdiction of the Committee on Ways and Means, as 
follows:

          (s) Committee on Ways and Means.
                  (1) Customs revenue, 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 $8.965 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 109th Congress can be outlined as 
follows:
          (a) Old-age, survivors, and disability insurance 
        (Title II)--At present, there are approximately 162 
        million workers in employment covered by the program, 
        and for calendar year 2005, $521 billion in benefits 
        were paid to 48 million individuals.
          (b) Medicare (Title XVIII)--Provides hospital 
        insurance benefits to 35.2 million persons over the age 
        of 65 and to 6.7 million disabled persons. Voluntary 
        supplementary medical insurance is provided to 33.7 
        million aged persons and 6 million disabled persons. 
        Total program outlays under these programs were $330 
        billion in 2005.
          (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. In January 2006, 6.9 million 
        individuals received Federal SSI benefits on a monthly 
        basis. Of these 6.9 million persons, approximately 1.1 
        million received benefits on the basis of age, and 5.8 
        million on the basis of blindness or disability. 
        Federal expenditures for cash SSI payments in 2005 
        totaled $36 billion, while State expenditures for 
        federally administered SSI supplements totaled $5.1 
        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. In most cases, Federal TANF benefits for 
        individuals are limited to 5 years and individuals must 
        work to maintain their eligibility. In June 2006, about 
        1.8 million families and 4.1 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 2005, 
        Federal expenditures for child welfare services totaled 
        $702 million. Federal expenditures for foster care and 
        adoption assistance were approximately $6.7 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, 2005, and 
        June 30, 2006, an estimated $30.3 billion was paid in 
        unemployment compensation, with approximately 7.4 
        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 2005, $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);
          (g) Trade and customs revenue functions of the 
        Department of Homeland Security and the Department of 
        the Treasury.
          (h) Authorization of the budget for the International 
        Trade Commission (ITC), functions of the Department of 
        Homeland Security under the Committee's jurisdiction, 
        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 \1\ by tabling a resolution.\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 109TH 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.       On September 13, 2001, the Senate passed
         Thomas September 20,   H.R. 2500, ``Making appropriations for
         2001.                  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.       On October 17, 2000, the Senate passed S.
         Crane October 24,      1109, the Bear Protection Act of 1999.
         2000.                  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.       On November 3, 1999, the Senate passed S.
         Weller November 18,    1232, Federal Erroneous Retirement
         1999.                  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.       On February 24, 1999, the Senate passed
         Weller November 18,    S. 4, the Soldiers', Sailors', Airmen',
         1999.                  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.       On May 20, 1999, the Senate passed S.
         Portman July 16,       254, the Violent and Repeat Juvenile
         1999.                  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.       On October 8, 1998, the Senate passed S.
         Crane October 15,      361, the Tiger and Rhinoceros
         1998.                  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.       On April 15, 1997, the Senate passed S.
         Ensign 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.       On June 30, 1996, the Senate passed H.R.
         Crane September 28,    400, the Anaktuvuk Pass Land Exchange
         1996.                  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.       On September 25, 1996, the Senate passed
         Archer September 27,   S. 1311, the National Physical Fitness
         1996.                  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.       On February 1, 1996, the Senate passed S.
         Crane 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.       On October 3, 1994, the Senate passed S.
         Gibbons October 7,     1216, the Crow Boundary Settlement Act
         1994.                  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.       On July 20, 1994, the Senate passed H.R.
         Gibbons August 12,     4554, the Agriculture and Rural
         1994.                  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.       On May 25, 1994, the Senate passed S.
         Gibbons July 21,       1030, the Veterans Health Programs
         1994.                  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.       On May 29, 1994, the Senate passed S.
         Gibbons July 21,       729, to amend the Toxic Substances
         1994.                  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.       On June 22, 1994, the Senate passed H.R.
         Rangel 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           884 amended, the Driftnet Moratorium
         February 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.       On July 11, 1991, the Senate passed S.
         Russo October 22,      1241, the Violent Crime Act of 1991.
         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.       On August 4, 1989, the Senate passed S.
         Cardin 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      774, the Financial Institution Reform,
         15, 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      829, legislation which would authorize
         30, 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      1748, legislation which would prohibit
         16, 1988 (see also     the importation into the United States
         H.R. 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      727, legislation which would clarify
         21, 1988 (see also     Indian treaties and Executive orders
         H.R. 2792 and H.R.     with respect to fishing rights. This
         4333).                 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.     2662, the Textile and Apparel Trade Act
         23, 1988 (see also     of 1988. This legislation would impose
         H.R. 1154).            global import quotas on textiles and
                                footwear products.
        H. Res. 552, Mr.       On Sept. 9, 1988, the Senate passed S.
         Rostenkowski Sept.     2763, the Genocide Act of 1988. This
         28, 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.      2097, the Uranium Mill Tailings Remedial
         21, 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.      1315, legislation which would authorize
         21, 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.     provide for the sale of Conrail to the
         25, 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      144, a bill to insure the continued
         17, 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


June 14, 2006

            H.R. 5576, Transportation, Treasury, Housing and Urban 
                    Development, the Judiciary, and Related Agencies 
                    Appropriations Act, 2007
    A point of order was raised against an amendment offered by 
Representative Tiahrt, which would have limited funds to the 
IRS and prohibited its ability to provide and tax preparation 
software or online tools. Representative Tiahrt withdrew his 
amendment. [109-2, H3930]

June 13, 2006

            H.R. 5576, Transportation, Treasury, Housing and Urban 
                    Development, the Judiciary, and Related Agencies 
                    Appropriations Act, 2007
    A point of order was raised against Section 206 of the 
bill, which would have limited funds to the IRS and prohibited 
its ability to provide and tax preparation software or online 
tools. 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. [109-2, H3849-3850]

May 23, 2006

            H.R. 5384, Agriculture, Rural Development, Food and Drug 
                    Administration, and Related Agencies Appropriations 
                    Act, 2007
    A point of order was raised against an amendment offered by 
Representative DeLauro, which would have increased the bill's 
appropriation for waste and water grant programs by $689 
million and paid for this increase by reducing the size of the 
tax cut for those making over one million dollars. The chair 
ruled that the provision proposes to change existing law and 
constitutes legislation on an appropriations bill and, 
therefore, violates clause 2 of Rule XXI. The point of order 
was sustained, and the amendment was not in order. [109-2, 
H3063]

May 19, 2006

            H.R. 5385, Military Construction and Veterans Affairs and 
                    Related Agencies Appropriations Act, 2007
    Points of order were raised against three amendments 
offered by Representatives Edwards, Farr, and Obey, which would 
have raised taxes to offset program funding increases. The 
chair ruled that these provisions proposed to change existing 
law and constituted legislation on an appropriations bill and, 
therefore, violated clause 2 of Rule XXI. The points of order 
were sustained, and the amendments were not in order. [109-2, 
H2922-2931]

June 30, 2005

            H.R. 3058, Transportation, Treasury, Housing and Urban 
                    Development, the Judiciary, the District of 
                    Columbia, and Independent Agencies Appropriations 
                    Act, 2006
    A point of order was raised against an amendment offered by 
Representative Simmons, which would have limited the use of 
funds to enter into, implement, or provide oversight of 
contracts between the Secretary of the Treasury, or his 
designee, and private collection agencies. Representative 
Simmons withdrew his amendment. [109-1, H3640]

June 29, 2005

            H.R. 3058, Transportation, Treasury, Housing and Urban 
                    Development, the Judiciary, the District of 
                    Columbia, and Independent Agencies Appropriations 
                    Act, 2006
    A point of order was raised against section 218 of the 
bill, which would direct the Secretary of the Treasury to 
submit to the Committees on Appropriations a report defining 
currency manipulation and what actions would be construed as 
another nation manipulating its currency, and describing how 
statutory provisions addressing currency manipulation by 
America's trading partners contained in, and relating to, title 
22 U.S.C. 5304, 5305, and 286y can be better clarified 
administratively to provide for improved and more predictable 
evaluation. 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. [109-1, H5422]

June 14, 2005

            H.R. 2862, Science, State, Justice, Commerce, and Related 
                    Agencies Appropriations Act, 2006
    A point of order was raised against an amendment offered by 
Representative Obey, which would have increased funding for the 
EDA by $53 million and paid for this increase by reducing the 
size of the tax cut for those making over one million dollars. 
The chair ruled that the provision proposes to change existing 
law and constitutes legislation on an appropriations bill and, 
therefore, violates clause 2 of Rule XXI. The point of order 
was sustained, and the amendment was not in order. [109-1, 
H4437]

May 26, 2005

            H.R. 2528, Military Quality of Life and Veterans Affairs 
                    Appropriations Act, 2006
    A point of order was raised against an amendment offered by 
Representative Obey, which would have increased the bill's 
appropriation for veterans medical care by $2.6 billion and 
paid for this increase by reducing the size of the tax cut for 
those making over one million dollars. The chair ruled that the 
provision proposes to change existing law and constitutes 
legislation on an appropriations bill and, therefore, violates 
clause 2 of Rule XXI. The point of order was sustained, and the 
amendment was not in order. [109-1, H4106]

May 19, 2005

            H.R. 2361, Department of the Interior, Environment, and 
                    Related Agencies Appropriations Act, 2006
    A point of order was raised against an amendment offered by 
Representative Obey, which would have increased the bill's 
appropriation for the Clean Water State Revolving Fund by 
$500,000 and paid for this increase by reducing the size of the 
tax cut for those making over one million dollars. The chair 
ruled that the provision proposes to change existing law and 
constitutes legislation on an appropriations bill and, 
therefore, violates clause 2 of Rule XXI. The point of order 
was sustained, and the amendment was not in order. [109-1, 
H3640]

May 17, 2005

            H.R. 2360, Department of Homeland Security Appropriations 
                    Act, 2006
    A point of order was raised against an amendment offered by 
Representative Obey, which would have increased the bill's 
appropriation for Customs and Border Protection and paid for 
this increase by reducing the size of the tax cut for those 
making over one million dollars. The chair ruled that the 
provision proposes to change existing law and constitutes 
legislation on an appropriations bill and, therefore, violates 
clause 2 of Rule XXI. The point of order was sustained, and the 
amendment was not in order. [109-1, H3398]

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. H6731]

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. H7708]

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. H4593]

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. 
[102-2 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. H11412]

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. H4692]

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. H4692]

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. H6662]

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. H6621]

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. H6622]

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. H6610]

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. H6620]

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. H9236]

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. H5539-40]

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. H5311]

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. H5310]

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. H5310]

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. H9189]

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. H6418]

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. H5489]

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. H3762]

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. H9407]

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. H9396]

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. H9395-9396]

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. H8717]

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. 
H7244]

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

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

                      Appendix II. Historical Note

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

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

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

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

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

           *       *       *       *       *       *       *

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

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

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

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

    He continued:

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

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

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

    The influence the Committee came not only from the nature 
of its jurisdiction but also because for many years the 
chairman of the Committee was also ad hoc majority Floor leader 
of the House.
    When the revolt against Speaker Cannon took place, and the 
Speaker's powers to appoint the Members of committees were 
curtailed, the Majority Members on the Committee on Ways and 
Means became the Committee on Committees. Subsequently, this 
power was disbursed to the respective party caucuses, beginning 
in the 94th Congress.
    Throughout its history, many famous Americans have served 
on the Committee on Ways and Means. The long and distinguished 
list includes 8 Presidents of the United States, 8 Vice 
Presidents, 4 Justices of the Supreme Court, 34 Cabinet 
members, and quite interestingly, 21 Speakers of the House of 
Representatives. This latter figure represents nearly one-half 
of the 51 Speakers who have served since 1789 through the end 
of the 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 \14\
---------------------------------------------------------------------------
    \14\ 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 109th Congress on December 9, 2006, 
there had been referred to the Committee a total of 2,152 
bills, representing 26.4 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 109TH 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
109th Congress.............................                    8,152                    2,152               26.4
----------------------------------------------------------------------------------------------------------------

                           B. Public Hearings

    In the course of the 109th Congress, the full Committee on 
Ways and Means held public hearings on a total of 26 days, 
including 15 days in the first session and 11 days in the 
second session. Many of these hearings dealt with broad subject 
matter including the President's fiscal year 2005 and 2006 
budget proposals, health and Social Security issues, and 
President Bush's trade agenda. The full Committee reviewed 
programs under the Committee's jurisdiction for waste, fraud, 
and abuse, and focused on such issues as tax reform, and the 
implementation of free trade agreements with Bahrain, Oman, 
Peru, and the Dominican Republic.
    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 
109th Congress.

  TABLE 2. PUBLIC HEARINGS CONDUCTED BY THE FULL COMMITTEE ON WAYS AND
                                  MEANS
------------------------------------------------------------------------
                                                       Number of
               Subject and date               --------------------------
                                                  Days       Witnesses
------------------------------------------------------------------------
2005:
    President's Fiscal Year 2006 Budget with           1               1
     U.S. Department of the Treasury
     Secretary John Snow, February 8.........
    President's Fiscal Year 2006 Budget with           1               1
     OMB Director Bolten, February 9.........
    President's Fiscal Year 2006 Budget for            1               1
     the U.S. Department of Health and Human
     Services, February 17...................
    Future of Social Security, March 9.......          1               3
    President's Fiscal Year 2006 Budget for            1               1
     the U.S. Department of Labor, March 16..
    United States-China Economic Relations             1              11
     and China's Role in the World Economy,
     April 14................................
    Overview of the Tax-Exempt Sector, April           1               7
     20......................................
    Implementation of the Dominican Republic-          1              12
     Central America Free Trade Agreement (DR-
     CAFTA), April 21........................
    Alternatives to Strengthen Social                  1               8
     Security, May 12........................
    Retirement Policy Challenges and                   1               6
     Opportunities of our Aging Society, May
     19......................................
    Tax-Exempt Hospital Sector, May 26.......          1               9
    Tax Reform, June 8.......................          1               5
    United States-Japan Economic and Trade             1              10
     Relations, September 28.................
    Implementation of the United States-               1               8
     Bahrain Free Trade Agreement, September
     29......................................
    Review of Credit Union Tax Exemption,              1              12
     November 3..............................
                                              --------------------------
        Total for 2005.......................         15              95
                                              ==========================
2006:
    President's Fiscal Year 2007 Budget with           1               1
     OMB Director Joshua Bolten, February 8..
    President's Fiscal Year 2007 Budget for            1               1
     the U.S. Department of Health and Human
     Services, February 8....................
    President Bush's Trade Agenda, February            1               1
     15......................................
    President's Fiscal Year 2007 Budget with           1               1
     U.S. Department of the Treasury
     Secretary John Snow, February 15........
    Implementation of the United States-Oman           1               6
     Free Trade Agreement, April 5...........
    Implementation of the Medicare Drug                1               8
     Benefit, June 14........................
    Health Savings Accounts, June 28.........          1               7
    Implementation of the United States-Peru           1               8
     Trade Promotion Agreement, July 12......
    Hearing to Review Outcomes of 1996                 1               8
     Welfare Reforms, July 19................
    Impacts of Border Security and                     1               7
     Immigration on Ways and Means Programs,
     July 26.................................
    Patient Safety and Quality Issues in End           1               5
     Stage Renal Disease Treatment, December
     6.......................................
                                              --------------------------
        Total for 2006.......................         11              53
                                              ==========================
        Total for both sessions..............         26             148
------------------------------------------------------------------------

    The six Subcommittees of the Committee on Ways and Means 
were also very active in conducting public hearings during the 
109th 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

2005:
    Future of the World Trade Organization,            1               5
     March 17................................
2006:
    Customs Budget Authorizations and Other            1               8
     Issues, July 25.........................
                                              --------------------------
        Total................................          2              13
                                              ==========================
          SUBCOMMITTEE ON OVERSIGHT

2005:
    2005 Tax Return Filing Season and the IRS          1               8
     Budget for Fiscal Year 2006, April 14...
    Hearing to Review the Tax Deduction for            1               5
     Facade Easements, June 23...............
    Hearing to Examine Tax Fraud Committed by          1               8
     Prison Inmates, June 29.................
    Fraud in Income Tax Return Preparation,            1               8
     July 20.................................
    To Review the Response by Charities to             1               9
     Hurricane Katrina, December 13..........
2006:
    Second in Series on Social Security                1               5
     Number High-Risk Issues, February 16--
     Jointly with Subcommittee on Social
     Security................................
    2006 Tax Return Filing Season and the IRS          1               8
     Budget for Fiscal Year 2007, April 6....
    Charities and Employment Taxes: Are                1               3
     Charities in the Combined Federal
     Campaign Meeting their Employment Tax
     Responsibilities? May 5.................
                                              --------------------------
        Total................................          8              54
                                              ==========================
            SUBCOMMITTEE ON HEALTH

2005:
    Medicare Payments to Physicians, February          1               6
     10......................................
    Physician-Owned Specialty Hospitals,               1               7
     March 8.................................
    Measuring Physician Quality and                    1               4
     Efficiency of Care for Medicare
     Beneficiaries, March 15.................
    Managing the Use of Imaging Services,              1               5
     March 17................................
    Long Term Care, April 19.................          1               6
    Post-Acute Care, June 16.................          1               9
    Value-Based Purchasing for Physicians              1               4
     under Medicare, July 21.................
    Health Care Information Technology, July           1               6
     27......................................
    The Medicare Value-Based Purchasing for            1               5
     Physicians Act, September 29............
    Gainsharing, October 7...................          1               7
    Field Hearing on Competition in the FEHB           1               6
     Program, December 2.....................
2006:
    MedPAC's March Report on Medicare Payment          1               5
     Policies, March 1.......................
    Long-Term Acute Care Hospitals, March 15.          1               5
    Fourth in Series on Health Care                    1               7
     Information Technology, April 6.........
    Implementation of the Medicare Drug                2               7
     Benefit, May 3 and May 4................
    Medicare Reimbursement of Physician-               1               9
     Administered Drugs, July 13.............
    Price Transparency, July 18..............          1               5
    Emergency Care, July 27..................          1               5
                                              --------------------------
        Total................................         19             108
                                              ==========================
       SUBCOMMITTEE ON SOCIAL SECURITY

2005:
    First in a Series on Protecting and                1               8
     Strengthening Social Security, May 17...
    Second in a Series on Protecting and               1               7
     Strengthening Social Security, May 24...
    Third in a Series on Protecting and                1              20
     Strengthening Social Security, May 26...
    Fourth in a Series on Protecting and               1               8
     Strengthening Social Security, June 9...
    Fifth in a Series on Protecting and                1               6
     Strengthening Social Security, June 14..
    Sixth in a Series on Protecting and                1               8
     Strengthening Social Security, June 16..
    Seventh in a Series on Protecting and              1               8
     Strengthening Social Security, June 21..
    Eighth in a Series on Protecting and               1               8
     Strengthening Social Security, June 23..
    Commissioner of Social Security's                  1               7
     Proposed Improvements to the Disability
     Determination Process, September 27--
     Jointly with Subcommittee on Human
     Resources...............................
    First in Series on Social Security Number          1               2
     High-Risk Issues, November 11...........
2006:
    Second in Series on Social Security                1               5
     Number High-Risk Issues, February 16--
     Jointly with Subcommittee on Oversight..
    Third in Series on Social Security Number          1               3
     High-Risk Issues, March 2...............
    Fourth in Series on Social Security                1               6
     Number High-Risk Issues, March 16.......
    Fifth in Series on Social Security Number          1               9
     High-Risk Issues, March 30..............
    Social Security Service Delivery                   1               1
     Challenges, May 11......................
    Social Security's Improved Disability              1               8
     Determination Process, June 15..........
                                              --------------------------
        Total................................         16             114
                                              ==========================
       SUBCOMMITTEE ON HUMAN RESOURCES

2005:
    Welfare Reform Reauthorization Proposals,          1              12
     February 10.............................
    Protections for Foster Children Enrolled           1               6
     in Clinical Trials, May 18..............
    Federal Foster Care Financing, June 9....          1               4
    Implementation of the SUTA Dumping                 1               6
     Prevention Act of 2004, June 14.........
    Welfare and Work Data, July 14...........          1               1
    Commissioner of Social Security's                  1               7
     Proposed Improvements to the Disability
     Determination Process, September 27--
     Jointly with Subcommittee on Social
     Security................................
2006:
    Hearing Regarding New Research on                  1               1
     Unemployment Benefit Recipients, March
     15......................................
    The Use of Technology to Improve Public            1               5
     Benefit Programs, April 5...............
    Unemployment Compensation Aspects of U.S.          1               7
     Department of Labor Fiscal Year 2007
     Budget, May 4...........................
    Hearing to Review Proposals to Improve             1              13
     Child Protective Services, May 23.......
                                              --------------------------
        Total................................         10              62
                                              ==========================
   SUBCOMMITTEE ON SELECT REVENUE MEASURES

2005:
    The President's Proposal for Single-               1               6
     Employer Pension Funding Reform, March 8
    Tax Credits for Electricity Production             1               7
     from Renewable Sources, May 24..........
    Funding Rules for Multiemployer Defined            1               5
     Benefit Plans in H.R. 2830, the
     ``Pension Protection Act of 2005'', June
     28......................................
    Member Proposals for Tax Reform, July 28.          1               7
    Member Proposals on Tax Issues Introduced          1              20
     in the 109th Congress, November 16......
2006:
    The Use of Tax-Preferred Bond Financing,           1               7
     March 16................................
    Corporate Tax Reform, May 9..............          1               8
    The Impact of International Tax Reform on          1               6
     U.S. Competitiveness, June 22...........
    Issues Relating to the Patenting of Tax            1               5
     Advice, July 13.........................
    Member Proposals on Tax Issues Introduced          1              21
     in the 109th Congress, September 26.....
                                              --------------------------
        Total................................         10              92
------------------------------------------------------------------------

    As the foregoing statistics indicate, during the 109th 
Congress the full Committee and its six Subcommittees held 
public hearings aggregating a grand total of 89 days, during 
which time 579 witnesses testified. There was one field 
hearing, held by the Subcommittee on Health in Oak Creek, 
Wisconsin.
    In addition, written comments were printed after having 
been requested and received by the Full Committee on H.R. 3376, 
the ``Tax Technical Corrections Act of 2005'', and H.R. 6264, 
the ``Tax Technical Corrections Act of 2006''; and the 
Subcommittee on Trade on Technical Corrections to U.S. Trade 
Laws and Miscellaneous Duty Suspension Bills.

                           C. Markup Sessions

    With respect to markup or business sessions during the 
109th Congress, the full Committee and its six Subcommittees 
were also very actively engaged. The full Committee held such 
sessions on 21 working days, usually both morning and afternoon 
sessions, and the Subcommittees an aggregate of 8 working days, 
making a grand total of 29 working days of markup or business 
sessions for the full Committee and its Subcommittees during 
the 109th Congress.

D. Number and Final Status of Bills Reported From the Committee on Ways 
                    and Means in the 109th Congress

    During the 109th Congress, the Committee reported to the 
House a total of 13 bills; 10 favorably, 2 adversely, and 1 
without recommendation. There were 69 bills containing 
provisions within the purview of the Committee that were passed 
by the House; 44 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 109th 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 to 2007.
----------------------------------------------------------------------------------------------------------------

           B. Tables Showing Past Membership of the Committee


1. MEMBERS OF THE COMMITTEE ON WAYS AND MEANS FROM THE 1ST THROUGH THE 
                        109TH CONGRESS, BY STATE

[Beginning with the 104th Congress, Intra-Congress Committee Membership 
                         changes are footnoted]


------------------------------------------------------------------------
                     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..............................                  105-109
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 \4\
    William M. Thomas..........................                   98-109
    Wally Herger...............................                     103-
    Xavier Becerra.............................                     105-
    Mike Thompson..............................                     109-
    Devin Nunes................................                  109-\6\
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
    Bob Beauprez...............................                      109
Connecticut:
    Jeremiah Wadsworth.........................                        1
    Uriah Tracy................................                        3
    James Hillhouse............................                        4
    Nathaniel Smith............................                      4-5
    Joshua Coit................................                        5
    Roger Griswold.............................                      5-8
    John Davenport.............................                        8
    Jonathan O. Moseley........................                9, 14, 16
    Benjamin Tallmadge.........................                    10-11
    Timothy Pitkin.............................                12-13, 15
    Ralph I. Ingersoll.........................                    21-22
    Samuel D. Hubbard..........................                       30
    James Phelps...............................                    45-46
    Charles A. Russell.........................                    54-57
    Ebenezer J. Hill...........................             58-62, 64-65
    John Q. Tilson.............................                    66-68
    Antoni N. Sadlak...........................                    83-85
    William R. Cotter..........................                    94-97
    Barbara B. Kennelly........................                   98-105
    Nancy L. Johnson...........................                  101-109
    John B. Larson.............................                     109-
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...........................                  100-109
    Karen L. Thurman...........................                  105-107
    Mark Foley.................................              104-109 \8\
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................................                        4
    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
    John Linder................................                     109-
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-
    Rahm Emanuel...............................                     109-
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
    Chris Chocola..............................                      109
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.................................                  104-109
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..................................                     106-
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.......................         \7\ 103, 105-109
    Jim McCrery................................                     103-
    Jimmy Hayes................................                  \1\ 104
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.........................                  101-109
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.........................             \2\ 103, 104
    Amo Houghton...............................                  103-108
    Thomas M. Reynolds.........................                     109-
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................................              \5\ 104-109
    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-
    Melissa A. Hart............................                      109
Rhode Island:
    Benjamin Bourne............................                      3-4
    Francis Malbone............................                        4
    Elisha R. Potter...........................                        4
    Christopher G. Champlin....................                        5
    John Brown.................................                        6
    Joseph Stanton, Jr.........................                        8
    Daniel L. D. Granger.......................                    59-60
    George F. O'Shaunessy......................                       65
    Richard S. Aldrich.........................                    69-72
    Aime J. Forand.............................                    78-86
South Carolina:
    William L. Smith...........................                      3-5
    Robert Goodloe Harper......................                      5-6
    Abraham Nott...............................                        6
    David R. Williams..........................                        9
    Langdon Cheves.............................                       12
    Theodore Gourdin...........................                       13
    William Lowndes............................                    13-15
    John Taylor................................                       14
    Thomas R. Mitchell.........................                       17
    George McDuffie............................                    18-22
    R. Barnwell Rhett..........................                    25-26
    Francis W. Pickens.........................                       27
    John L. McLaurin...........................                    54-55
    Ken Holland................................                    95-97
    Carroll A. Campbell, Jr....................                    98-99
Tennessee:
    Andrew Jackson.............................                        4
    William C.C. Claiborne.....................                        5
    William Dickson............................                     7, 9
    George W. Campbell.........................                       10
    Bennett H. Henderson.......................                       14
    Francis Jones..............................                    16-17
    James K. Polk..............................                    22-23
    Cave Johnson...............................                       24
    George W. Jones............................                    31-34
    Horace Maynard.............................                37, 40-42
    Benton McMillan............................                    49-55
    James D. Richardson........................                    55-57
    Cordell Hull...............................             62-66, 68-71
    Edward E. Eslick...........................                       72
    Jere Cooper................................                    72-85
    Howard H. Baker............................                    83-88
    James B. Frazier, Jr.......................                    85-87
    Ross Bass..................................                       88
    Richard H. Fulton..........................                    89-94
    John J. Duncan.............................                   92-100
    Harold E. Ford.............................                   94-104
    Don Sundquist..............................                  101-103
    John S. Tanner.............................                     105-
Texas:
    John Hancock...............................                       44
    Roger Q. Mills.............................                46, 48-51
    Joseph W. Bailey...........................                       55
    Samuel B. Cooper...........................                    56-58
    Choice B. Randell..........................                    60-62
    John N. Garner.............................                    63-71
    Morgan G. Sanders..........................                    72-75
    Milton H. West.............................                    76-80
    Jesse M. Combs.............................                    81-82
    Frank N. Ikard.............................                    84-87
    Bruce Alger................................                    86-88
    Clark W. Thompson..........................                    87-89
    George H. W. Bush..........................                    90-91
    Omar T. Burleson...........................                    90-95
    Bill Archer................................                   93-106
    J.J. Pickle................................                   94-103
    Kent R. Hance..............................                    97-98
    Michael A. Andrews.........................                   99-103
    Sam Johnson................................                     104-
    Greg Laughlin..............................                  \3\ 104
    Lloyd Doggett..............................                     104-
    Kevin Brady................................                     107-
    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.
4. Reelected to the 109th Congress; died January 1, 2005.
5. Resigned April 29, 2005.
6. Appointed May 5, 2005.
7. Pursuant to H. Res. 872, removed June 16, 2006.
8. Resigned September 29, 2006.

                2. COMMITTEE MEMBERSHIP, 109TH CONGRESS

                      Committee on Ways and Means
                       one hundred ninth congress

                   BILL THOMAS, California, Chairman
E. CLAY SHAW, Jr., Florida           CHARLES B. RANGEL, New York
NANCY L. JOHNSON, Connecticut        FORTNEY PETE STARK, California
WALLY HERGER, California             SANDER M. LEVIN, Michigan
JIM McCRERY, Louisiana               BENJAMIN L. CARDIN, Maryland
DAVE CAMP, Michigan                  JIM McDERMOTT, Washington
JIM RAMSTAD, Minnesota               JOHN LEWIS, Georgia
JIM NUSSLE, Iowa                     RICHARD E. NEAL, Massachusetts
SAM JOHNSON, Texas                   MICHAEL R. McNULTY, New York
ROB PORTMAN, Ohio \1\                WILLIAM J. JEFFERSON, Louisiana 
PHIL ENGLISH, Pennsylvania               \2\
J.D. HAYWORTH, Arizona               JOHN S. TANNER, Tennessee
JERRY WELLER, Illinois               XAVIER BECERRA, California
KENNY C. HULSHOF, Missouri           LLOYD DOGGETT, Texas
RON LEWIS, Kentucky                  EARL POMEROY, North Dakota
MARK FOLEY, Florida \3\              STEPHANIE TUBBS JONES, Ohio
KEVIN BRADY, Texas                   MIKE THOMPSON, California
THOMAS M. REYNOLDS, New York         JOHN B. LARSON, Connecticut
PAUL RYAN, Wisconsin                 RAHM EMANUEL, Illinois
ERIC CANTOR, Virginia
JOHN LINDER, Georgia
BOB BEAUPREZ, Colorado
MELISSA A. HART, Pennsylvania
CHRIS CHOCOLA, Indiana
DEVIN NUNES, California \4\

----------
\1\ Resigned April 29, 2005.
\2\ Pursuant to H. Res. 872, removed June 16, 2006.
\3\ Resigned September 29, 2006.
\4\ Appointed May 5, 2005.

                                  
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