Wally Herger

Mr. HERGER

Mr. HERGER. Mr. Speaker, I urge support of H. Con. Res. 228, as amended, and yield back the balance of my time.

Mr. HERGER. Mr. Speaker, I yield 4 minutes to the gentlewoman from Florida (Ms. Ros-Lehtinen).

Mr. HERGER. Mr. Speaker, I yield 3 minutes to the gentlewoman from Illinois (Mrs. Biggert).

Mr. HERGER. Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, I rise today in support of H. Con. Res. 228, as amended, offered by the gentlewoman from Texas (Ms. Jackson-Lee). The resolution expresses Congress' gratitude for the efforts of numerous Federal, State and local agencies in moving quickly to provide services and support to children and families affected by the tragedies of September 11. It urges continued swift assistance. Since the events of September 11, this Congress has worked with great speed to respond to the Nation's emergency needs. We provided $40 billion in emergency funding to respond to the tragedies and shore up our national security. The House passed important legislation to stimulate the economy and support the unemployment and health care needs of dislocated workers. Sweeping new airline measures passed each body which should become law shortly. Defense and other appropriation measures were amended to account for our new national security and other needs. At the same time, workers on the front lines of our social services agencies, especially in the New York City and Northern Virginia areas, respond quickly to deliver services and support. I would like to take a moment to report on the activities of the U.S. Department of Health and Human Services agency and the State and City of New York in responding to the needs of children and families affected by the attack on our country. HHS began responding to the attack the very day it happened providing disaster medical assistance teams, medical supplies, and mental health assistance to the affected areas. Within days HHS released emergency funds for child care, temporary food and shelter, emergency meals, child welfare services and health care. In total, HHS provided more than $126 million for these essential services. HHS also used its emergency powers to cut through red tape to speed aid to the needs of children and families affected. Similarly, the City and State of New York have reacted with speed and compassion to transform routine service programs into disaster response teams. What we have seen and salute today is the quick responses by so many local service providers to the needs of our fellow citizens, and especially families with children who lost one or even both parents in the September attacks. These responses reinforced to terrorists and the world what we already knew, that we can shake America but we cannot break America. We will respond and we will rebound even stronger than before. Perhaps the most striking examples of America coming together to respond to this tragedy have been the numerous occasions of neighbors helping neighbors and public and private agencies working together with government and charitable funds to support needy families. Charitable donations have come from people across the economic spectrum, from the wealthiest Americans to the sixth and seventh and eighth grade classes of Oakland, California who sold red, white and blue hair ribbons to raise $500; or for the K through 7 youngsters of Wyandatt Grammar School in Oroville, California in my district who sold pumpkins and raised $831 for the fund. This resolution applauds the efforts that have already been made to support families in need and calls on continued appropriate Federal, State and local support for these children and families affected by the tragic events of September 11. I urge its adoption. Mr. Speaker, I reserve the balance of my time.

Mr. HERGER. Mr. Speaker, I move to suspend the rules and agree to the concurrent resolution (H. Con. Res. 228) expressing the sense of the Congress that the children who lost one or both parents or a guardian in the September 11, 2001, World Trade Center and Pentagon tragedies (including the aircraft crash in Somerset County, Pennsylvania) should be provided with all necessary assistance, services, and benefits and urging the heads of Federal agencies responsible for providing such assistance, services and benefits to give the highest possible priority to providing such assistance, services and benefits to those children, as amended.

Mr. HERGER

Mr. HERGER. Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, it is with great pleasure that I bring to the floor today H.R. 2873, the Promoting Safe and Stable Families Amendments of 2001. This legislation reauthorizes and increases by a total of $1 billion over 5 years Federal support for a broad range of services to support fragile families and prevent abuse and neglect of our Nation's children. This legislation was first proposed by President Bush, and I am pleased that the version before us today authorizes the full amount of new funding the President sought. As we work to reauthorize the promoting safe and stable families program, I have had the great fortune of meeting courageous people who share their love and their homes by adopting children with special needs. I learned stories of personal triumph from young people thriving after a lifetime of bouncing from home to home in the foster care system. I also learned of many of our colleagues here in the Congress who have opened their homes to foster and adopted children, and how their lives are better because of it. In these times of national uncertainty, I am pleased to report that recent legislation changes, designed to better support abused and neglected children, are working. For example, since the signing of the Adoption and Safe Families Act of 1997, more than 133,000 children have been adopted from foster care. That is a 56 percent increase over the previous 3-year period. Mr. Speaker, I include for the Record a recent Washington Post article describing how adoptions in Maryland and Virginia increased by 84 percent over the last 5 years.

Mr. HERGER. Mr. Speaker, I urge support for H.R. 2873, as amended. Mr. Speaker, I have no further requests for time, and I yield back the balance of my time.

Mr. HERGER. Mr. Speaker, I yield 3 minutes to the distinguished gentleman from Pennsylvania (Mr. English), a member of the subcommittee.

Mr. HERGER. Mr. Speaker, I would like to mention that we have authorized an increase for $1 billion over 5 years. The appropriators have already appropriated an additional $70 million dollars for this year; that is an increase that is larger than the last 4 years put together. So I do believe we are putting the dollars forward to ensure that these very important programs are funded. Mr. Speaker, I yield 3 minutes to the gentlewoman from Pennsylvania, Ms. Hart.

Mr. HERGER. Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 2873) to extend and amend the program entitled Promoting Safe and Stable Families under title IV-B, subpart 2 of the Social Security Act, and to provide new authority to support programs for mentoring children of incarcerated parents; to amend the Foster Care Independent Living program under title IV-E of that act to provide for educational and training vouchers for youths aging out of foster care, and for other purposes, as amended.

Mr. HERGER

Mr. HERGER. Mr. Speaker, H.R. 3090, the economic stimulus package, includes significant new funds to support unemployed workers and their families between jobs. This legislation provides $9 billion in surplus Federal unemployment funds to every State. States can use this new money for regular or extended unemployment benefits and services to get workers back on the job. These funds alone would allow States to pay unemployment benefits to an estimated 2 to 3 million workers. Mr. Speaker, this legislation also creates a new $3 billion block grant to States to provide health care coverage for unemployed workers and their families. Together, this legislation provides $12 billion in immediate help for unemployed workers as well as the flexibility for States to target that assistance to those who need it most. Mr. Speaker, this funding and flexibility is a much better approach than the Democrat substitute. The Democrat substitute mandates new benefits and benefit programs even in States where unemployment rates have not risen. Mr. Speaker, that is not targeted, it is too expensive, and it will result in permanent increases in unemployment spending and taxes. Higher taxes is the last thing we need under the current circumstances, but that is exactly what the Democrat substitute offers for the long run. Mr. Speaker, I urge Members to support H.R. 3090 and oppose the Democrat substitute.

Mr. HERGER

Mr. HERGER. Mr. Speaker, on rollcall No. 298 I was unavoidably detained. Had I been present, I would have voted ``yea''.

Mr. HERGER

Mr. HERGER. Mr. Chairman, this is a critically important amendment on an issue that has national implications. The bankrupting of family farmers and rural communities in the Klamath Basin of northern California and southern Oregon under a Federal regulatory decision is being discussed across the country. It is being written about nationally in publications such as The New York Times, The Washington Post and The Washington Times. It has been covered on the national Fox News Network. That is because it sets a tragic precedent which must be addressed before more communities are lost. Again, I appreciate the hard work that the gentleman from Virginia and the members of the committee have put into this bill. This amendment is not in any way to take away from that good work. But an entire community of 70,000 people could go bankrupt. A way of life is at stake. And the Federal regulatory agency, the National Marine Fisheries Service, that is in part responsible for that decision is funded in this bill to the tune of approximately $540 million. Through the issuance of severely flawed biological opinions, NMFS, along with the U.S. Fish and Wildlife Service, have taken the water rights of these communities for a public use. The fifth amendment to the U.S. Constitution not just authorizes but requires just compensation. And the Justice Department, as the final arbiter of such claims against the Federal Government, would be amply suited, I believe, to determine and make payment on the underlying takings that have occurred.

Mr. HERGER. Mr. Chairman, I offer an amendment.

Mr. HERGER. Mr. Chairman, I yield myself such time as I may consume. Mr. Chairman, I appreciate the hard work that the gentleman from Virginia (Mr. Wolf) and the members of the Committee on Appropriations have put into this bill. Mr. Chairman, I offer this important amendment today on an issue that is receiving national attention. Approximately 1,500 family farmers and scores of agriculture-dependent businesses and families along the northern California and southern Oregon border have had their livelihood stripped from them by the Federal Government. A community of 70,000 could go bankrupt. On April 6 of this year, the Bureau of Reclamation announced that there will be no water, zero water for farming this year because, in the opinion of a select group of biologists and based on what many feel is flawed science, every drop of water was needed for the preservation of two species of fish. Based only on a best guess about these species and what is needed to sustain them, the National Marine Fishery Service and the U.S. Fish and Wildlife Service have deprived these communities of the use of their water rights and their land. Mr. Chairman, this is the poster child for the injustices that are occurring under the current implementation of the Endangered Species Act. Under this well-intentioned law, communities throughout the West are going broke, and in some cases human lives are being placed in jeopardy. Mr. Chairman, this need not happen. As a country that put a man on the moon three decades ago, I am convinced we can both protect fish and provide economic stability for our rural communities. Regrettably, under the current implementation of the ESA, it is an either/or proposition. My amendment explicitly recognizes that the Endangered Species Act also continues to come into direct conflict with fundamental U.S. constitutional rights and protections. It seeks simply to ensure that the government satisfies its mandate under the Fifth Amendment of the Constitution to provide just compensation for the taking of private property for a public use. We have a responsibility to uphold constitutional protections when they are compromised by the implementation of Federal laws. It is also a first step toward rectifying the financial harm that the government has caused in this area. As the agency partly responsible for this decision, NMFS, which is funded at more than $540 million in this bill, will be forced under my amendment to cover the cost of compensation. That is simple accountability. No amount of money can fully rectify the harm that has been done to these communities. A way of life is at risk. Ultimately, the Endangered Species Act must be updated and balance must be restored if we are to preserve this way of life and prevent future injustices here and in other parts of the country. But as we speak, a select few individuals are bearing severe economic and social burdens. Fundamental principles of fairness and justice demand that they be compensated. These are public burdens which should rightfully be borne by the public as a whole. Moreover, Federal agencies that are responsible for harming Americans through their regulatory actions will be held accountable. Perhaps if we force them to share some of the pain, they will stop to consider the real consequences of reckless actions. That is also why I have introduced H.R. 2389. It recognizes that what has happened in the Klamath Basin is a government-caused disaster. As such, it requires the Federal Government to pay for the economic losses that have been sustained. I ask for the support and consideration of my colleagues on this bill. I also ask my colleagues to realize what is currently happening under the Endangered Species Act and join me in demanding that it be modernized because, Mr. Chairman, Americans are being needlessly hurt. Mr. Chairman, I yield back the balance of my time.

Mr. HERGER. Yes, I do, Mr. Chairman.

Mr. HERGER. Mr. Chairman, again, I understand that the gentleman has concerns that this bill is not a perfect fit, but I wish to underscore that this was caused at least in part by the National Marine Fisheries Service. It is a government-caused disaster. Mr. Chairman, fairness and justice demand that the Federal Government be accountable for the harm that it has caused. Perhaps this amendment is precedent-setting, but the bankrupting of entire farming communities at the stroke of a biologist's pen, to say the least, is a much more tragic precedent for the rural communities of this Nation. I urge that the Chair rule that this amendment is in order and allow for its debate and full consideration.

Mr. HERGER

Mr. HERGER. Mr. Speaker, principles of fairness and justice demand that the Government not force some people to bear burdens, which should rightfully be borne by the public as a whole. However, that is precisely what is happening in the Klamath Basin in northern California and southern Oregon because of the Endangered Species Act (ESA), and today I rise, joined by my Oregon colleague, Congressman Greg Walden, to introduce legislation to address that. The ESA has strayed far from its original mission. It was never intended to sacrifice human health and safety and economic well-being. Yet, the fact remains that under the guise of species protection, constitutionally-protected property fights are being trampled, local economies are being destroyed, families are being forced into bankruptcy and, in many cases, human health and safety are being jeopardized. There is little consideration given to the human species under the ESA. Once a species is ``listed,'' its needs must come first--before the rights and livelihoods of American people. As it is currently being implemented, the ESA requires species protections at any and all costs. Regrettably, rural Western communities are disproportionately bearing the burdens and costs associated with species protection, burdens which should rightfully be borne by the American public as a whole. The zero- water decision that was recently handed down in the Klamath Basin is the ``poster child'' for precisely these kinds of injustices. Farmers in this rural area were told on April 6, 2001 that there would be no Klamath Project water for agriculture this year, because, in the opinion of a few government biologists, it was needed to protect two species of fish that may or may not be endangered. The decision does not come without significant social and economic impacts. The Klamath Project supports approximately 1,500 hundred small family farmers and ranching operations and scores of related businesses. This agricultural area generates in excess of $250 million in economic activity annually. The annual value of crops produced is estimated at more than $110 million. All of this human activity has come to a grinding halt because of an ESA mandated decision that is based only on speculation and guesswork. Preliminary estimates place total economic damage in the neighborhood of $220 million. Regrettably, all of the costs and economic hardships associated with this decision will be borne solely by the people who live and work in the Klamath Basin, many of them veterans of World War II who were promised a permanent supply of water and land, and their sons and daughters. It is important to note that this is not simply a Klamath Basin problem. Nor is it a new problem, or one that is specific to the agriculture industry in general, or to federal project irrigators in particular. Small businesses throughout the Sierra Nevada mountains in California face potentially debilitating economic losses because of forest management restrictions associated with extremely dubious concerns about the status of the California Spotted Owl. Water users throughout California have faced extreme hardship as the government has exercised These requirements and restrictions are, simply, an unfunded federal mandate. The federal government should not force some to bear the costs, but should bear the burden itself, or, if it cannot pay or is not willing to pay, then it should avoid the action altogether. Or, it must find some middle ground. That is simple accountability. For these reasons, Mr. Speaker, I rise today to introduce legislation--the ``Klamath Basin Government-Caused Disaster Compensation Act.'' It requires the Secretary of the Interior to fully compensate the individuals of the Basin who have been economically harmed as a result of the restrictions that have been placed on the operations of the Klamath Project. Such Payments would come from within the Department of Interior's budget. This legislation sends a resounding message to Washington that if the federal government is going to force this kind of social and economic harm on rural American through its laws, it will be held accountable. And if it rebukes those costs as unacceptable, then it will face the question of whether this kind of species protection--recklessly imposing requirements that may or may not benefit species, but that will certainly carry significant costs to real people--is a goal all Americans truly want, and if so, whether they're willing and prepared to share the impacts. Ultimately, the ESA itself must be modernized if we are to ensure that people and communities come first. However, real people have been significantly harmed as the direct result of the federal government's actions in the Klamath Basin, and while the long-term social and other hidden impacts from this decision can never be fully mended, fairness and justice demand that the federal government step in to rectify the economic harm that it has caused.

Mr. HERGER

Mr. HERGER. Mr. Speaker, we have an energy crisis. Eight years of Clinton-Gore no-growth energy and Federal environmental policies have left us facing frequent shortages. In my home State of California, the population has grown by 4 million people over 10 years. The economy has doubled in half that time. Sadly, the radical environmentalists have prevented the construction of new power plants. The equation is simple: more people and no power plants equal blackouts. Rather than place blame, President Bush has proposed a responsible solution that seeks to address our dire situation, increase supply while offering incentives to reduce demand. While California is already the most energy efficient State in the country, the President's comprehensive policy will promote new power plant construction. It is not necessarily political, but it recognizes that there are no quick fixes to the years of policies that forced us deep into the dark.

Mr. HERGER

Mr. HERGER. Mr. Speaker, today I rise to introduce the Cooperative Dividend Equity Act. This legislation will help to end an unfair tax on cooperatives and their members. As those of us from agricultural and rural areas can attest, cooperatives play a vital role in many Americans' lives. Whether it be farmers pooling their resources in order to survive in the global marketplace, consumers maximizing their buying power through volume purchasing, or healthcare facilities providing community-based services--cooperatives facilitate people working together for a common good. One of the greatest challenges facing cooperatives today is access to capital. In order to raise much needed capital and avoid further debt, many cooperatives are considering issuing preferred stock. However, under the current tax laws, stock dividends paid to stockholders are taxed three times: 1) when they are earned by the cooperative; 2) when received by the stockholder; and 3) at the corporate level when earnings are distributed. Three levels of tax on the earnings of a cooperative! Here is how it works. Members of cooperatives are taxed on income generated by the cooperative. The cooperative itself, however, is not taxed so long as any ``patronage income'' is distributed to its members. Cooperatives frequently earn at least some non-member, or ``nonpatronage,'' income. Much like a corporation, a cooperative must pay taxes on such non- patronage income, just as the stockholder (whether a member or non- member) must also pay tax on that income when it is distributed as a dividend. Unlike a corporation, however, cooperatives must then pay what amounts to a third tax due to the operation of an obscure IRS rule. The ``dividend allocation rule'' imposes a third level of taxation on the cooperative by reducing the amount of patronage dividends paid to cooperative members. Cooperatives, such as a typical farming cooperative, may deduct dividends paid to patrons from taxable income. IRS regulations, however, provide that net earnings eligible for the patronage dividend deduction are reduced by dividends paid on capital stock. This requirement has been interpreted to mean that even dividends paid out of nonpatronage earnings will be ``allocated'' to a cooperative's patronage and nonpatronage earnings in proportion to the relative amount of patronage/nonpatronage business done by the cooperative. This ``allocation'' significantly reduces the amount of net earnings from the patronage operation that may be claimed as a deduction, thus increasing the cooperative's level of taxation. Put more simply, the ``dividend allocation rule'' allocates income already taxed against what would have otherwise been a deduction. As a result, cooperatives pay more taxes on income used to pay a dividend on stock than would a non-cooperative corporation. It is time to end the triple taxation on cooperative income and give farmers, consumers, hospitals, and other coop members the flexibility they deserve in structuring their affairs. It is time to eliminate the dividend allocation rule and pass the Cooperative Dividend Equity Act of 2001.

Mr. HERGER

Mr. HERGER. Mr. Speaker, today I am introducing legislation that will foster adequate electric generation and reliability. Excessive electricity price volatility, concerns about power shortages, and harmful consequences for the regional economy in the West are all related to inadequate generation and transmission capacity in and around my home state of California. Moreover, the energy crisis in California and neighboring states has demonstrated the importance of developing generation facilities to ensure that electricity supplies are widely available at reasonable prices. But capacity shortages are not just an issue in California, and addressing this tax code problem is critical to helping avoid similar problems from developing in other regions of the country. To encourage new investments in generation, my bill would reduce depreciable lives of generation systems from their current cost recovery period of 15 or 20 years to 7 years. The current electric industry depreciable lives are longer than those of any manufacturing segment. America's booming technology-reliant economy of the 1990s spurred a demand for more electricity. However, that increase in demand was not met by building new generation. In the 1970s and 1980s, America had power surpluses. As a result, state regulators, trying to keep consumer rates down, often disallowed the costs of some excess capacity and did not allow utilities to recover in rates all of their costs for building power plants. In many cases, utilities were required by their regulatory commissions to buy power from other supplies rather than build their own plants. That, and the advent of competition, engendered a cautious attitude toward investment costs that might not be recoverable. The result was a construction lag, while demand for power increased by about 2 percent per year. Nevertheless, between 1978 and 1992, America's utilities had reserve margins that averaged between 25 percent and 30 percent to meet emergency demand situations. Since 1992, the reserve margin has dropped significantly--to less than 15 percent nationwide. Meanwhile, the Energy Information Administration (EIA), in its Annual Energy Outlook 2001, raised its own projections of electricity demand for the next 20 years because of projected increases in economic growth and the growth in electricity use for a variety of residential and commercial applications. To meet demand growth, EIA projects that 1,310 new plants--with a total of 393 gigawatts of capacity--will need to be built by 2020. The 393 gigawatts represents nearly a 47% increase over current installed capacity, or the ability to serve approximately 60 million additional customers. The current tax law profoundly impacts a generator's bottom line, making it difficult to compete, and discourages the formation of much needed capital investment. The price spikes and major power outages in recent years, most notably in California, have brought this issue home to millions of people. By way of example, no significant new generation has been built in my state of California in more than a decade, despite higher than-expected growth in the demand for power. Nationwide, the structure of the electric industry is rapidly changing from vertically-integrated, regulated monopolies to unbundled and fully competitive generation services--independent transmission companies and local distribution companies. Currently, 24 states and the District of Columbia, encompassing some 62% of the Nation's population, have either passed electric industry restructuring legislation or enacted regulatory orders to implement unbundling and competitive customer choice. In addition, the Federal Energy Regulatory Commission (FERC) is promoting wholesale competition and the formation of regional transmission organizations. Because of the introduction of competition, previously applicable rules regarding the cost recovery of capital simply do not apply any longer. Mr. Speaker, I urge my colleagues to cosponsor this urgently needed legislation.

Mr. HERGER

Mr. HERGER. Mr. Speaker, a government-caused disaster is bankrupting an entire farming community in the Klamath Basin of Northern California. Families are being told simply that there is zero water for farming this year. It is an unspeakable tragedy and an appalling example of the power of the Endangered Species Act. This is a poster child for the need to reform this misguided law and for all that is wrong, unjust and unbalanced with extreme environmental policies. It is a heartbreaking example of how people, families and, indeed, entire communities, can be sacrificed at the stroke of a biologist's pen, and based on nothing more than incomplete data, speculation and guesswork. There is little consideration given to the human species under the Endangered Species Act. Once an animal or fish species is listed, its needs must come first, before the rights and livelihoods of the American people. This is not reasonable, it is not balanced, it is not prudent. Farmers should be irrigating right now, but the normally bustling towns of the Klamath Basin in Northern California and Southern Oregon are quiet. Without water for the crops that drive this economy, farmers cannot work in their fields; the fertilizer companies, the maintenance shops, all agricultural-related businesses are closing. Delivery trucks and processing plants sit idle. Unemployment will rise. More than 12 years ago the government decided that a species of fish was in decline and had to be protected under the Endangered Species Act, despite the fact that nobody really knows how many fish there are, how many there have been historically, and how many there should be. But because the ESA requires protection at any cost and all costs, the water has been shut off completely and there will be no farming this year. The Federal Government has reneged on its promise and has left these farmers wondering how this could happen. But, Mr. Speaker, this need not happen. Three decades ago this country put men on the moon. With technology and know-how, the impossible became possible, and I know that we can do this in the Klamath Basin and throughout the country. Protecting the environment and maintaining our local economies need not be mutually exclusive. In fact, we have studies that tell us, as surprising as this may seem, that more water does not necessarily equal more fish. The issue is one of water quality, and we can do some things to improve that for the fish without simply taking water from our farmers. But the extreme environmentalists want this to be an either/or proposition. Many of us have been working for years to fundamentally change the ESA, knowing that it allows for just this kind of tragic result. We have simply asked for reasonableness, for common sense, for balance between the needs of people and the needs of fish. We have seen lives lost because of the Endangered Species Act, preventing us from fixing levees. We have seen the rights of property owners trampled. Now we are seeing people lose all they have or worked for. The loss of life, the loss of livelihoods, the trouncing of fundamental rights to freedom and the pursuit of the American dream, all of this is occurring under the extremes of the Endangered Species Act. I would venture to guess that this is not what the American people truly want, and that this is not what Congress envisioned when it crafted this legislation more than 30 years ago. I am committed to making sure the entire Nation knows that this is happening, and to working with this Congress and with the administration in making sure that it does not happen ever again. We need a fundamental change in this law so that we can prevent our local economies and the environment from being pitted against one another. If we put a man on the moon, I know that we can do this.

Mr. HERGER

Mr. HERGER. Mr. Speaker, today I am introducing a bill to allow mutual funds to invest without restriction in publicly traded partnerships, or PTPs. PTPs, which are also known as MLPs, are limited partnerships which are traded on public securities exchanges in shares known as ``units.'' Because interests in PTPs are liquid and can be bought in small increments, they can be and often are bought by small investors. Many of those investing in PTPs are older individuals, who buy them for the reliable income stream they receive from quarterly PTP distributions. Unfortunately, the tax code currently deters mutual funds representing many small investors from investing in PTPs. As safe, liquid securities which generally provide a steady income stream, PTPs could be an excellent investment for mutual funds. However, the tax code requires that mutual funds get 90 percent of their income from specific sources in order to retain their special tax treatment. Distributions from a partnership do not qualify, nor do most types of partnership income which flow through to the fund. The only way a mutual fund can invest in a PTP is to be certain that the income it receives from that investment and other nonqualifying sources will never exceed 10 percent of its total income. Faced with the burden of keeping track of percentages and the drastic consequences of going over the limit, most mutual fund managers turn to other investments. It makes no sense for publicly traded partnerships to be excluded from the list of qualifying income sources for mutual funds. While traditional partnership interests--the only kind that existed when these rules were written--were illiquid and not always well regulated, PTPs are traded on public exchanges and must file the same information with the Securities and Exchange Commission as publicly traded corporations. Mutual funds are an increasingly important part of the capital markets, and the inability to attract them as investors is hindering PTPs in their ability to raise the capital they need to grow and provide new jobs. Many PTPs are in energy-related businesses, the very sector whose growth we wish to encourage right now. Moreover, mutual funds and their investors are being denied an opportunity to earn money through PTP investments. The legislation I am introducing would rectify this situation by simply adding income received by or allocated to a mutual fund by a PTP to the list of income sources that a mutual fund may use to meet the 90 percent test. This provision has been sponsored by Bill Thomas, now chairman of the Ways and Means Committee, in the last two Congresses and was approved by Congress as a whole in 1999 as part of the Taxpayer Refund and Relief Act, later vetoed by the President. I am happy to take up the cause in the 107th Congress, and hope that my colleagues will join me in supporting this legislation.

Mr. HERGER

Mr. HERGER. Mr. Speaker, I thank the gentlewoman for yielding time to me. Mr. Speaker, Americans are taxed all their lives: when they get a job; when they are married; and yes, even when they die. Today we are considering legislation to end the destructive death tax once and for all. The death tax is wrong and it is bad policy. First, the death tax is double taxation. Every dollar invested in a family farm and small business or a household has already been taxed or will be taxed in the future. Secondly, the death tax has its hardest impact on middle-income Americans, not the super wealthy, but individuals and families who have invested their life's savings into small businesses and are often asset-rich but cash-poor. For this reason, the death tax is the leading cause of dissolution of most small businesses. One-third of small business owners today will have to sell or liquidate their small business to pay the estate tax. Half of those who do liquidate will have to eliminate 30 or more jobs. Is it any wonder that 70 percent of all businesses never make it past the first generation and 87 percent do not make it to the third? Finally, the death tax collects only a small percentage of Federal revenues. The death tax actually comprises just 1\1/2\ percent of total Federal revenues. With as much as $2.5 trillion in non-Social Security surpluses being projected over the next 10 years, surely Washington can afford to return a penny on the dollar of the surplus to the American taxpayers who created it. Mr. Speaker, it is time to do the right thing. It is time to end the unfair and destructive death tax.

Mr. HERGER

Mr. HERGER. Mr. Speaker, when a couple stands at the altar and says ``I do,'' they are not agreeing to higher taxes. Yet, 25 million Americans couples currently pay higher taxes simply because they are married. Let us be clear, it is just plain wrong to place a tax penalty on marriage. The legislation before us today will provide real relief to American couples, 47,000 of which are in my district in northern California. When combined with the across-the-board rate cuts already approved by this House, this legislation will mean up to $560 for the average family of four this year. These are dollars which families can use to pay off credit card debts or cope with high energy costs, especially important in my home State of California. I urge all my colleagues to support this much-needed legislation.