Amo Houghton

Mr. HOUGHTON

Mr. HOUGHTON. Mr. Speaker, today I am introducing a bill to provide for an income tax credit relating to the purchase of a gun safe. Experts agree that firearms should be stored unloaded and locked up, with ammunition stored separately. This bill, if enacted, would help protect our children and others due to accidents, suicides, and other acts, all connected with unguarded guns. The non-refundable credit would amount to 25 percent of the total costs of purchasing, shipping, and installing a gun safe in a taxpayer's residence. The maximum credit would be limited to 25 percent of the total costs up to $1,000, or a total credit of $250. Over 22 million children in the U.S. live in homes with at least one firearm. A study by the prestigious Rand Corporation found that fewer than 50 percent of American families with firearms stored their firearms safely--unloaded, locked and away from the ammunition. Storing firearms unloaded in a well constructed gun safe with a keyed combination or electronic lock is the most secure method for preventing unauthorized access by children, adolescents and criminals to firearms in a home. The FBI estimates there are more than 341,000 incidents of firearm theft from private citizens annually. Nearly one-third of these firearms will be used in the commission of another crime. Increasing the use of gun safes with keyed, combination or electronic locks would decrease the number of firearms stolen from homes and used by criminals to intimidate, harm and kill their victims. There is nothing mandatory about this legislation. The decision to purchase a gun safe remains a personal decision as does a person's decision to take advantage of the tax credit. The legislation is designed to encourage a voluntary act and does not in any way intrude into the American home. I ask your support for this legislation, which would help protect families, especially the children, from untimely deaths due to unguarded guns.

Mr. HOUGHTON

Mr. HOUGHTON. Mr. Speaker, I thank the gentleman from California (Mr. Thomas) for the time. I have got to approach this issue from the standpoint of somebody who was in business for 35 years. This is a bill whose time has come. International commerce is always a balancing act, a balancing act between expanding markets overseas and protecting our job base. We did not ask for this fight. Europe did, and a man called Pascal Lamy forced it. The concept in our tax situation, whether it was DSC or FSC or whatever, my colleagues want to call it, ETI, was to neutralize the differences in the tax system, the regional value-added tax versus our income tax, and it was accepted. We did a good job, and we flourished under this. Then there were grumbles, and then, all of a sudden, Europe came back and challenged our position. We should have challenged theirs, but we did not, but then we tried to make an accommodation with the World Trade Organization, not once, not twice, but three times. It did not work. So this is the only way it seems to me that we can accommodate the European community. It is a good bill. It is not perfect. It does not shift jobs abroad. It allows American companies to produce abroad as it allows people abroad to produce here in this country, but basically, it firms up our economy, and that means it firms up our job base. I think it is something we ought to encourage, we ought to support, and we ought to defeat the motion to instruct.

Mr. HOUGHTON

Mr. HOUGHTON. Mr. Speaker, I am not going to support this bill. I do not believe it is right. I think court-stripping is wrong. I do not think it is sound; and frankly, I do not think it is going to work. How are we going to resolve the issue between States? I used to be in business, and Congress could have passed a law in the 1950s when the civil rights issue was heating up that would have prohibited any challenges to the segregated businesses that existed all around me. There never would have been a civil rights law, never would have been a Brown v. Board of Education. I voted for the Defense of Marriage Act. It defines marriage for a Federal purpose as a legal union between one man and one woman, and that is good enough for me.

Mr. HOUGHTON

Mr. HOUGHTON. Mr. Speaker, I particularly want to thank the gentleman from Georgia (Mr. Burns) for this legislation. I really think it is important. We can argue whether it is enough or not. Simplification is an ongoing process. It is never over; it just goes on and on and on. And this is not perfect, but it is one element that I think is important and we ought to pass it. This bill contains an exception to the rule of tax simplification not being simple. It is one simple change that would benefit 19 million individual taxpayers. So let me try to explain. Over a million taxpayers call the IRS's toll free help line each year with questions about the filing status of dependents. One of the first questions they ask is, Does ``head of household'' mean what it means? What is the filing status and do I qualify? So certainly if you are married, the answer is no. But it is no wonder taxpayers are confused because if you are married, generally the filing is of a joint return. So here is an example of a phrase commonly misunderstood, meaning head of one's household. And that has been appropriate for years in the Tax Code. And it would be fine if the popular meaning of the phrase it was attached to had the same meaning, but sadly, they are different. In fact, taxpayers are so likely to be confused, as the gentleman from Ohio (Mr. Portman) said, 6 million choose this filing status in error each year. Now, I do not want to get into a word game, but changing the name ``head of household'' to ``single head of household'' is going to provide some clarification. The change will alert filers that the favorable rate structure is for single taxpayers or those considered single under the special rules for married taxpayers who are separated. It will also make clear to single and long-term separated taxpayers that they might qualify if they maintain a home for a dependent child or a retired parent. I am pleased to say that this builds on legislation that I introduced in April to rename the Head of Household filing status, the Filing Status Simplification Act. This proposal is strongly supported by the National Taxpayer Advocate who writes that the proposal inserting the word ``single'' before the ``head of household'' is going to clarify the law for many married taxpayers who do not really understand this term. I urge my colleagues to support this common-sense change that will help millions of taxpayers each year.

Mr. HOUGHTON

Mr. HOUGHTON. Mr. Speaker, I thank the gentleman from California (Mr. Herger) and the gentleman from Maryland (Mr. Cardin). I am delighted to be here, and I rise in strong support of this particular piece of legislation, the SUTA Dumping Prevention Act. SUTA is State Unemployment Tax Act. That is what it stands for. When I think of dumping, I usually think of the dumping of a product, but the concept here is really the dumping of cost. This is very important legislation because it provides the States with enforcement mechanisms they are going to need to prevent certain businesses who want to avoid paying their fair share of State unemployment taxes. Now, last year, in June, the Subcommittee on Oversight held a joint hearing with the Subcommittee on Human Resources, with the gentleman from California (Mr. Herger), and explored the dumping issue. We had a lot of expert witnesses, and they informed us about the fraud that is being conducted by a variety of unscrupulous business owners. So we learned that some employers have developed sophisticated schemes manipulating their corporate structure to avoid paying their fair amount of unemployment compensation taxes. This bill prevents that. The bill makes several improvements in current law. State unemployment benefit officials will be provided with access to national data in the National Directory of New Hires to ensure unemployment benefits are not erroneously paid to those who are already employed. The bill also is going to save taxpayer money, and that is important. According to the Congressional Budget Office, when the bill becomes law, the government is estimated to save over $500 million over a 10- year period. How does this happen? The savings are going to come from increased tax collections of businesses that have avoided paying the unemployment taxes to begin with. So these additional revenues are going to be added to State unemployment benefit accounts, leading to lower tax rates when balances rise. This means that the companies who are the good guys, who have paid their fair share of taxes, will see lower tax rates. That is, of course, obviously what we want. Finally, Mr. Speaker, this bill is bipartisan. We have worked closely with our friends on the other side of the aisle, particularly the gentleman from Maryland (Mr. Cardin), the gentleman from North Dakota (Mr. Pomeroy), the gentleman from Michigan (Mr. Levin), the gentleman from Washington (Mr. McDermott), and the gentleman from Texas (Mr. Sandlin). So I want to thank them for their efforts also in helping to bring this legislation to the floor. Congressional oversight is essential. It is being undermined. The bill fixes this by cutting out waste. I urge a ``yes'' vote on H.R. 3463.

Mr. HOUGHTON

Mr. HOUGHTON. Mr. Speaker, I rise today to recognize an exceptional officer of Marines, Captain Samuel G. Bryce. Captain Bryce will soon complete a highly successful two-year tour as the Marine Corps' Assistant Liaison Officer to the U.S. House of Representatives. It is truly a pleasure for me to recognize a few of his many outstanding achievements. Captain Bryce entered our Corps as a private in January 1994 after graduating with honors from James Madison University in Harrisonburg, Virginia. After graduating Recruit Training at Parris Island, he went on to serve as an infantryman with the Marine Corps Security Force Company in Rodman, Panama where he participated in Operation Safe Haven, a humanitarian mission in support of Cuban migrants. He followed this tour with service as a Non Commissioned Officer with the illustrious Fleet Antiterrorism Security Team Company in Norfolk, Virginia. As a squad leader with F.A.S.T., then Corporal Bryce participated in Operation Fairwinds in Haiti, providing convoy and site security for U.S. supported nation-building projects. Shortly after returning from Haiti, his team was dispatched to Bahrain to establish security at U.S. Naval facilities in response to the Khobar Towers bombing. During his final months with F.A.S.T. he was promoted to Sergeant and selected for the Enlisted Commissioning Program. In September of 1997 he attended Officer Candidate School. Upon graduation he was commissioned and then sent to the Basic Officer Course and the Infantry Officer Course. In November of 1998 he was assigned to the 1st Battalion, 5th Marine Regiment where he was given command of 3rd Platoon, Company C. In this capacity he deployed with his battalion as part of the 31st Marine Expeditionary Unit where he participated in Operation Stabilise in East Timor. Upon return he was assigned as commander of the 81 mm Mortar Platoon, which he led during a subsequent overseas tour with the 31st MEU. During his final year with the battalion, he served as the Executive Officer, and ultimately the Commanding Officer of Weapons Company. Completing this tour in March 2002, Captain Bryce was assigned as the Marine Corps' Assistant Liaison Officer to the U.S. House of Representatives. For the past two years he has expertly represented the Marine Corps on Capitol Hill and contributed enormously to the success of the Liaison Office's mission. His skills and diligent attention to duty enabled him to successfully lead five Staff Delegations to every major Marine Corps facility in the United States, assisting Congressional staff in learning how the Marine Corps fights, trains, and lives. The reputation he earned on these evolutions was such that he was also given the task of leading several Congressional Delegations overseas, including my own to Malaysia and the first into Haiti after the new President took power. The real strength or Captain Bryce's time on Capitol Hill was felt through his education and outreach activities. He organized monthly briefs for staff members to assist them in understanding the capabilities and program needs of the Corps, and was the driving force behind the Capitol Hill Running Club. Under his leadership the club grew to nearly 100 runners and has seen unprecedented success in preparing members for running the Marine Corps Marathon. As he leaves, there will be a large gap for the Marine Corps to fill on Capitol Hill. His initiative, leadership, and tireless efforts as the Assistant House Liaison Officer have had a lasting impact on improving the war fighting capabilities and the quality of life for Marines throughout the Marine Corps. Most importantly, he has epitomized all of those qualities that America has come to expect of her Marines--absolutely impeccable integrity, moral character and professionalism. As he reports to his next assignment as a student at the Expeditionary Warfare School in Quantico, Virginia I want wish him, his lovely wife Stacey, and their new son Griffin continuing success. Fair winds and following seas, Marine.

Mr. HOUGHTON

Mr. HOUGHTON. Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 4193) to amend the Internal Revenue Code of 1986 to allow for the expansion of areas designated as renewal communities based on 2000 census data and to treat certain census tracts with low populations as low-income communities for purposes of the new markets tax credit.

Mr. HOUGHTON. Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, I urge the House to pass H.R. 4193. This measure will allow communities benefiting from economic development tax incentives to use those incentives to the maximum extent they possibly can. The purpose of H.R. 4193 is to increase the flexibility communities have to use both the Renewal Communities and the New Markets Tax Credit tax incentives. The Community Renewal Tax Relief Act of 2000 authorized the Department of Housing and Urban Development to select, based on a highly competitive process, 40 distressed areas across the country as renewal communities. So, as renewal communities, these distressed areas are able to use tax incentives to promote economic development. These incentives include: One, a zero percent rate for capital gains from the sale of qualifying assets; two, a 15 percent wage credit to employers for the first $10,000 of qualified wages; three, a commercial revitalization deduction; four, an additional $35,000 in section 179 expensing for qualified property; and last, expansion of the Work Opportunity Tax Credit. Communities were initially selected based on the 1990 census data for population and poverty rates because this was the most current data available at the time. We now have up-to-date 2000 census data showing how the population has shifted and the population and poverty rates have moved. H.R. 4193 is going to allow a renewal community to include additional census tracts which have experienced rising poverty according to the 2000 and 2002 census. The bill also updates the New Markets Tax Credit by helping more distressed, low-population communities become eligible for the credit's benefit. Today, the profile of these communities makes its hard for them to meet poverty and income tests. Without this adjustment, low- population and economically distressed areas within an Empowerment Zone's boundaries will not get the help they need to develop further. The House has already acted by unanimous consent to update Renewal Communities with this new 2000 census data. So the addition of the New Markets Tax Credit provision improves the package and does not affect the Federal budget and has broad bipartisan support. So I urge my colleagues, Mr. Speaker, to support this legislation. Mr. Speaker, I reserve the balance of my time.

Mr. HOUGHTON. Mr. Speaker, I yield back the balance of my time.

Mr. HOUGHTON

Mr. HOUGHTON. Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days within which to revise and extend their remarks and include extraneous material on H.R. 4193, the bill just passed.

Mr. HOUGHTON

Mr. HOUGHTON. Mr. Speaker, today I am pleased to join my colleague from New York, Louise Slaughter, introducing the ``Wool Suit and Textile Trade Extension Act of 2004.'' This legislation extends and improves an existing program designed to equalize the trade treatment provided to domestic manufacturers of worsted wool suits. Over the last decade a provision in our trade laws has had a devastating impact on the tailored clothing industry in the United States--reducing employment by half. This provision effectively created a suit export industry overnight in Canada and Mexico. Effectively, finished suits were able to enter our market duty-free, while our domestic producers were forced to contend with a tariff of more than 30 percent on the fine fabrics used in their production. With a shrinking customer base the textile mills that once produced enormous amounts of worsted wool fabric reduced their fabric production. Competition for supply and prices paid to woolgrowers in turn were impacted negatively. Our proposal builds on action taken by Congress in 2000 and 2002 to address this situation. Under the existing legislation, domestic suit makers, textile producers, and the domestic sheep industry received a combination of tariff relief and incentives to stabilize employment and production in the United States. This program has been extremely successful, and stopped the precipitous decline in employment in the tailored suit industry. However, these provisions expire next year. Because the suit industry must design their lines months in advance, the expiration of this program will affect pricing and competitiveness much earlier than the close of 2005. Our proposal extends these provisions for an additional five years, and makes improvements in the program for all interested parties. We are pleased to note that our legislation has the strong support of the suit manufacturers, the garment workers' union--UNITE, the sheep association, and the textile industry. As the domestic tailored clothing industry and wool textile mills continue to face significant challenges maintaining employment and production as a result of an unleveled playing field, an extension of this program is timely and vital to the continued health of this important manufacturing sector. We hope our colleagues will join us in cosponsoring this legislation.

Mr. HOUGHTON

Mr. HOUGHTON. Mr. Speaker, I thank the gentleman for yielding me this time, and say to the gentleman from New York (Mr. Engel) that we have fought a good fight on many issues, and I am delighted to be associated with the gentleman on this. Mr. Speaker, I am not going to talk about the alternative minimum tax. People have described it, nobody wants it, we want to get rid it. The question is how. Do we do it the Democratic way or the Republican way. I happen to believe that H.R. 4227, the bill of the gentleman from Connecticut (Mr. Simmons), is the right approach. I guess the only thing I would hope is that we would not get tangled up in two things: One is we not get tangled up in the politics of this thing. This is a national interest. We could argue back and forth and criticize each other, but the point is people are going to get hurt and we have to stop that. The other thing, I hope we do not get tangled up in procedural issues. This is a procedural House, but the impact is not procedural on people on the outside. I want to thank the gentleman from Pennsylvania (Mr. English) and the gentleman from Connecticut (Mr. Simmons) for what they have done. The gentleman from Connecticut (Mr. Simmons) has really been the watchdog here for a lot of people who could get hurt, and they do not know they could get hurt. The fact that they have been watchful and sensitive to the human condition is very important. As Members have said, this is a stopgap measure. But without this, we cannot go to the next leg. The next leg is to get rid of a tax. It is an interesting concept because before 1986, people with large amounts of capital could give that capital away; and, therefore, under provisions of the tax law, would not have to pay any tax. It was not fair and it was not democratic, and that is why this thing came into effect. But there was no indexing, and that is why this is creeping up and involving enormous numbers of people. There are over 3 million people now, and there will be another 8 million involved. It is a very hurtful tax. I think it is a very good idea. If you want to vote the Democratic proposition, that is fine. I happen to believe what the gentleman from Connecticut (Mr. Simmons) has done is right on target. It is essential. It is straightforward, simple, and will benefit everybody. Therefore, I request that Members support the bill, H.R. 4227.

Mr. HOUGHTON

Mr. HOUGHTON. Mr. Speaker, today I am introducing a resolution to amend the rules of the House regarding legislative measures changing our tax laws. The proposed change would prevent the consideration of any tax measure unless it contained a title simplifying the Internal Revenue Code of 1986. We are at a state where, I believe, tax simplification should be a top priority of our legislative efforts. In a word, the Code is a mess. The current size amounts to an incredible 9,490 pages. The Code has become too complex. Over the years it has become a destination for provisions that may be admirable, but should belong elsewhere. The inclusion of these provisions in the Code puts an extra burden on the Internal Revenue Service--one that it may not be particularly adept at handling. Many tax provisions simply are mind-numbing in their detail and burdensome in their compliance requirements. It is not a simple task, for more than a few citizens do their own returns. The tax preparation service has ballooned. Many are either disinclined or unable to deal with the tax process. As you know, I'm not a tax lawyer. I'm merely an old glass man from Corning, New York. In talking to a member of the Ways and Means tax staff on April 15th several years ago, he told me he had just dropped his tax return in the mail, and was clearly sweating bullets. ``I just hope I got it right,'' he said. Strange. Here was a bright young tax lawyer--a government employee with what I would have guessed was a fairly straightforward tax return: deductions for mortgage interest, charitable contributions, and student loan interest. Even so, he was worried whether he had filled out his return correctly. My reaction at the time was: ``If he's nervous, what about the rest of us?'' Until we overhaul the system in a major way, whether that be a flat tax, VAT or some other approach, we should make it a priority to attack the present Code, reduce the complexity, and make it simpler for as many citizens as possible. In recent years, I have introduced several tax simplification proposals (the current bill is H.R. 22) covering a variety of areas. We are currently reviewing those proposals to refine them, and then will reintroduce some of the proposals as stand-alone bills to focus better on the specific issues. So, Mr. Speaker, in order to call attention to the simplification issue, the resolution I am introducing, as stated above, would require that tax legislation include a tax title in any tax measure for it to be considered by the House. The purpose is to focus attention on simplification each and every time we consider a tax measure, with the result that we accomplish some measure of simplification to the Internal Revenue Code. I urge your support of this measure. It cannot hurt. It may just help in ways we are unable now to contemplate.

Mr. HOUGHTON

Mr. HOUGHTON. Mr. Speaker, today I am introducing a package of nine separate proposals on tax simplification. Also, today I introduced a resolution of the House to require a simplification title in any tax measure under consideration. As we approach the deadline of April 15, taxpayers once again come face-to-face with the task of voluntarily--and I emphasize voluntarily--complying with filing their individual tax returns. If our system becomes too complex for the ordinary citizen, then noncompliance will no doubt accelerate. Many Members, and taxpayers, believe that Congress will overhaul the entire system. I'm all for overhauling the tax system, but it will be a long process. In the meantime, I believe the ongoing simplification of the tax system should be a top priority of Congress. This package of simplification bills highlights some of the areas of the Internal Revenue Code that cry out for change in order to reduce complexity and make our citizens' task of voluntarily complying with our tax laws a less daunting challenge. Some have a cost attached, such as the AMT repeal, while others are revenue neutral. The proposals are as follows: Alternative Minimum Tax Repeal Act of 2004. The repeal of AMT for individuals is at the top of about everybody's list of must-do tax legislation. However, the revenue lost is substantial. The bill would substantially slow the growth in the number of taxpayers subject to AMT over the next 10 years, by adjusting the AMT exemption, and finally repealing the provision effective after 2013. Child Definition Simplification Act of 2004. The proposal would address a challenging problem that faces taxpayers every year--the multiple definitions of a qualifying child for different tax purposes. The proposal would provide a uniform definition of a child based on residence, relationship and age of the child. Filing Status Simplification Act of 2004. The Head of Household filing status has long been a leading source of taxpayer confusion and mistakes during the filing season. To address this problem, the proposal would change ``Head of Household'' to ``Single Parent or Guardian'' filing status, a term that is less likely to cause a mistake in filing status. Home Mortgage Tax Simplification Act of 2004. Under the proposal, points paid on a home mortgaging refinancing would be fully deductible in the year in which the expense is incurred. The current law generally requires that the refinancing points be amortized over the stated life of the loan. Taxation of Minor Children Simplification Act of 2004. The proposal would eliminate the current restrictions on adding a minor child's income to the parent's return. A parent could freely elect to include the income of a child under 14 on his or her own tax return. This does not change the ability of the child to file a separate return, if that is preferable. Education Tax Credit Simplification Act of 2004. The proposal would merge the HOPE and Lifetime Learning Credits, which serve nearly identical purposes but have different rules. The proposal would provide a credit for one-half of the first $3,000 of post-secondary education expenses. The credit would apply on a per-child basis and would not be limited to the first two years of post-secondary education. Small Business Tax Modernization Act of 2004. The proposal would combine the benefits of Subchapter S (S corporations) and Subchapter K (Partnerships) of the Internal Revenue Code in a single, unified passthrough entity regime based on Subchapter K. There are presently two separate, fully-articulated passthrough entity regimes--an expensive and unnecessarily complicated system. The goal of the legislation is to establish a single passthrough entity regime that preserves the major benefits of Subchapters S and K. Personal Holding Company Tax Repeal Act of 2004. The proposal would repeal the Personal Holding Company tax, which is outdated and has been eclipsed by subsequent changes to the tax code. Small Business Law Tax Conformity Act of 2004. The proposal would make technical changes necessary to update the Internal Revenue Code to take into account changes that have occurred in state business law. The proposal would define earnings from selfemployment to exclude the portion of a partner's distributive share that is attributable to capital. If these simplification proposals--which affect millions of taxpayers--are enacted this year, filing tax returns next year will be simpler and less time consuming. I urge my colleagues to support these provisions.

Mr. HOUGHTON

Mr. HOUGHTON. Mr. Speaker, there are a lot of good things in this bill, a lot of things you can argue about. The two things that I think are important, one is the section 809, which we all know about. It is a conference report and permanently extends the suspension of section 809 on an antiquated tax on mutual life insurance companies. That is very important. But the most important thing for me is the temporary replacement of the 30-year Treasury bond. Now, people have talked about that. A lot of people are going to discuss this. But, having been in business, this is very, very important. They are out now. They are gone. There is nothing to base a pension plan formula on. Something has to take its place, and what we want to do is to try to have something which is timely and can be voted on by April 15 when many of these companies have to make their decision. So to protect the money that goes into the pension plans for employees, you must have a guideline. It is very important. It is very critical timewise. This is not an intellectual issue. This is not something we can have bandied about forever. People's very retirement depends on this. It is not so much the money, but it is the guideline. I hope very much we will support this.

Mr. HOUGHTON

Mr. HOUGHTON. Mr. Speaker, today I am introducing legislation that would tighten the tax rules for technology donations. The proposal would prevent the abusive transactions, but would allow the fair market value of legitimate gifts of technology to be deducted when the technology is transferred to universities, teaching hospitals, or nonprofit research institutions. My good friend and former House colleague, Pat Roberts, has introduced a companion bill in the Senate. Taxpayers are permitted to deduct the fair market value of patents and related technology that are donated to tax exempt charities. The benefit from the tax savings generated by patent and technology donations encourages the private owners of technology to transfer the patent to credentialed institutions that can develop it, creating new markets, improving people's lives, creating jobs, and strengthening the educational capabilities and innovative skills of our universities, teaching hospitals and research institutions. In recent years the Internal Revenue Service and the Treasury Department have identified serious problems that have allowed unscrupulous taxpayers to abuse the law. In some cases, technology of questionable value is donated to tax exempt entities that are either incapable or unwilling to develop it. Any ``value'' deducted in these cases is clearly exaggerated. In some cases, donor appraisals of otherwise valuable technology to a credentialed donee may have stated values that are inflated. The Treasury Department has proposed a solution to these problems that would effectively eliminate any current deduction for donors of technology. While I strongly support measures to clean up the current law and tighten the rules for deductible gifts of technology, I believe Treasury's proposal goes too far. My proposal would limit the incentive to very specific circumstances. Deductions would be limited to technology gifts in cases when all rights, title and interest in technology are transferred to either a university, teaching hospital, or non-profit research institute that is able to apply its credentialed expertise to the development of the technology. Under the proposal, the donor and donee of any cash included with a qualified gift must agree to limit its use to the development of the technology gift. The bill adds a number of measures to avoid abuse in this area. Qualified appraisals and qualified appraisers are required and defined. One or more appraisals (second appraisal if value is over $5 million) would be required without regard to any value limitation. The Secretary of the Treasury shall prescribe regulations or guidance regarding the qualified appraisals and qualified appraisers. In addition, other anti- abuse measures to prevent the bundling of patents or similar property and/or manipulation of the tax basis in order to increase the amount of the contribution are included. I encourage my colleagues to support this important measure.

Mr. HOUGHTON

Mr. HOUGHTON. Mr. Speaker, today I am joined by my colleague from New Jersey, Donald Payne, in introducing a bill to provide for tax-exempt financing for new United Nations facilities. This is a bipartisan effort by the two of us, as the current Congressional delegates to the United Nations. The bill is straightforward and, like a provision in effect before 1986, would allow the use of tax-exempt bonds for the building of new UN facilities, other than the UN Headquarters itself. As a result of the 1986 changes, the UN is now treated as if it were a for-profit company for purposes of tax-exempt bonds, much less favorably than charitable hospitals, universities or State or local governments. Most recognize that the United Nations Secretariat and Headquarters facilities are now more than 50 years old and greatly in need of renovation and reconfiguration to increase the efficiency of UN functions, improve security and life safety, and reduce overhead and administrative costs. Let me give you a few examples of the need for the renovation. Most of the building systems have passed their life expectancy: The plumbing was installed in 1952 and most of the electrical systems in the Secretariat building were installed in 1949. These are clearly outdated. The building contains asbestos and it does not have sprinklers, both of which create significant safety hazards. And, of course, the buildings were not built with today's terrorist threats in mind. These needs have been carefully and extensively studied not only by the UN but also by the United States General Accounting Office, which concluded that the UN's planning for renovation has been reasonable. In the President's budget released earlier this week, he proposed that the United States provide the United Nations with a 30-year, $1.2 billion loan to finance the renovation, another recognition of the importance of moving forward with the renovation. The work cannot commence without a series of preliminary steps. These include financing and constructing a new building for the UN in New York City that the UN General Assembly, UN Secretariat and other UN personnel at UN Headquarters would occupy while the needed renovation and reconfiguration of Headquarters space proceeds. Due to the extent of the needed work and existing asbestos conditions, the current Headquarters space must be vacated until the Headquarters renovation and reconfiguration are completed. New York City and State propose to provide the land for the new building without cost and to have a public benefit tax-exempt agency of the State arrange to finance, construct and operate the new building. The bonds that would be issued under this proposal would be secured by rent paid by the UN for its use of the new building until the bonds are paid, at which time the UN may become the owner of the land and new building. The UN will undertake the Headquarters renovation and reconfiguration independently, including payment of the cost for the work, without financing or other financial assistance from New York City or State. Following completion of the new building, which is estimated to cost approximately $475 million, the renovation and reconfiguration of the UN Headquarters facilities can begin. That work is expected to be completed in 2011 under the current schedule. When the work is completed, the new building will permit all UN Headquarters space and activities that are now scattered in different locations in New York City to be consolidated at that single location connected directly to the renovated and reconfigured Headquarters space. Expeditious work on the needed renovation and reconfiguration is very much in the interest of the UN and in our national interest. The work when completed will strengthen the effectiveness of the UN organization, address security and life safety requirements and improve efficiency, thereby significantly reducing ongoing costs. Moreover, the work will further cement the presence of the UN in the United States, which not only benefits the United States internationally but also provides substantial employment and business opportunities with tens of millions of dollars for Americans and for New York. We ask for your support of this important legislation.

Mr. HOUGHTON

Mr. HOUGHTON. Mr. Speaker, today I am introducing a bill to add Trade Adjustment Assistance Recipients as a targeted group for the Work Opportunity Tax Credit, thereby permitting employers to receive a tax credit when hiring these individuals. Most importantly, this bill would help address the loss of our manufacturing and other jobs to foreign competitors. The bill I'm introducing is a companion to a bill offered in the Senate by my good friend, Senator Olympia Snowe of Maine. The Work Opportunity Tax Credit (WOTC) program provides a credit of up to $2,400 based on wages paid in the first year to a new employee for employers that hire workers from one of the targeted groups (welfare recipients, ex-felons, high-risk youths, qualified food stamp recipients, etc.). The WOTC program has been a major factor in moving the unemployed from the welfare rolls into the workforce, serving as a vital component of the welfare reform legislation. The proposal in the bill is a very targeted approach. A Trade Adjustment Assistance (TAA) recipient is an individual who is unemployed and has been certified to receive benefits under the TAA program. TAA benefits include extended unemployment compensation and worker training. The latter program provides benefits to individuals who have been laid off by an employer who has been disadvantaged by foreign imports or has shifted production, and jobs, to a country that has a free trade agreement with the United States or is a beneficiary country under certain other trade agreements. Thus, the proposal deals directly with the loss of jobs to countries abroad. The TAA targeted group would be somewhat different than the other groups. The TAA group has been disadvantaged by foreign trade and competition. Even though the individuals may be skilled, they are unlikely to find jobs in their former industries because the jobs have moved offshore. Accordingly, the TAA recipient may need retraining. Qualifying as a WOTC/TAA recipient would help the person obtain a job, and the credit would contribute to the retraining costs incurred by the new employer. The TAA recipient hired by an employer would no longer receive TAA benefits, thus reducing the cost of that program. The proposal is not the complete answer to unemployment. Nevertheless, I believe it is a step in the right direction, because it targets those workers who have lost their jobs due to foreign trade and competition. I encourage my colleagues to cosponsor this proposed legislation.

Mr. HOUGHTON

Mr. HOUGHTON. Mr. Speaker, today Representatives Nancy Johnson (R- CT), Charles Rangel (D-NY) and Richard Neal (D-MA) are joining me in introducing legislation to correct a problem that is impairing the liquidity of the market for investments in Low-Income Housing Tax Credit (housing credit) properties. The housing credit has been a remarkably successful incentive for encouraging investment in residential rental housing for low-income families. Under Section 42 of the Internal Revenue Code, a tax credit is available for investment in affordable housing. The credit is claimed annually over a period of ten years. Qualified residential rental projects must be rented to lower- income households at controlled rents and satisfy a number of other requirements throughout a prescribed compliance period (generally, 15 years from the first taxable year the credit is claimed). Today, virtually all of the equity for housing credit investments comes from widely held corporations investing through housing credit funds. A significant number of corporate investors have transferred these fund interests in recent years, typically due to a change in their income tax status. An investor wishing to dispose of an interest in a Low-Income Housing Tax Credit (``housing credit'') property during its 15-year compliance period is subject to a recapture of housing credits previously claimed unless a bond or U.S. Treasury securities are posted to the Internal Revenue Service (IRS). The amount of the bond to be posted is based on the amount of housing credits claimed and the duration remaining in the compliance period. The purpose of the bond is to guarantee to the IRS that it can collect the appropriate recapture amount in the event that the property is no longer in compliance with the requirements of the housing credit program. At the time the housing credit program was enacted in 1986, the drafters of the statute were concerned that owners would claim the benefits of the tax credits and then avoid the continuing compliance requirements by transferring the credits to a straw party with minimal assets that the IRS could go after to collect recapture liability. This was a potential concern because housing credits are provided on an accelerated basis in the sense that they are claimed over a ten-year period, while the property must remain in compliance with the targeting rules over a minimum 15-year period. However, the experience with the housing credit over the past 15 years demonstrates that this concern is no longer valid. When the housing credit program was enacted, policymakers thought in terms of previous affordable housing tax incentives that supported an aggressive tax shelter market dominated by individual investors. As it turns out, virtually all (99% today) investment capital in the housing credit program is from publicly traded corporations that pose none of the risks of noncompliance that motivated enactment of the recapture bond rules. Ironically, sales of individual partnership interests in public partnerships with more than 35 investors are exempt from the recapture rules. There are also other provisions in Code section 42 that adequately address potential noncompliance. In 1989, Congress added the requirement that all state allocating agencies adopt ``extended use agreements'' to be recorded as restrictive covenants on housing credit properties, which require the property to remain in compliance. In addition, the state allocating agencies were given oversight responsibilities to ensure continued compliance through site inspections and property audits. The requirement to purchase recapture bonds forces investors to incur unnecessary costs and has produced a complex administrative burden on the IRS. Since bond filings are done building by building, and since single sales transactions frequently involve hundreds of properties, each with dozens of buildings, bond filings may involve thousands of separate filings. Worse yet, the few remaining surety companies writing this type of business operate in an inefficient market. Recapture surety bonds are priced in a fashion that does not measure the true risk of non-compliance, but rather relies solely on the credit rating of the company requesting the bond. This is a function of the fact that surety underwriters do not understand the housing credit program in general or the risk of noncompliance in particular. At the same time, the incidence of non-compliance with housing credit program rules is exceedingly rare. Meanwhile in the aftermath of the September 11th terrorist acts and the spate of corporate accounting scandals, the surety market is in turmoil. Recapture bond premiums, even for highly rated public companies, have more than tripled over the past two years. This has imposed dead weight costs on the housing credit program. By making it more difficult to transfer credit investments, the recapture bond rule impairs the liquidity of housing credit investments, reducing credit prices generally, and undermining the overall efficiency of the program. The IRS recently responded to a series of questions we posed about the recapture bond requirement. According to the IRS, since just 1997, recapture bonds covering approximately $1.8 billion of tax credits have been posted--but in the 17 years since the requirement was enacted, the Service has never made a claim on a recapture bond. That works out to bond premium payments of about $150 million, to ensure against an event that has never occurred. These costs are unnecessary and are imposing a real drag on the market for investments in housing credit properties. Our bill will solve this problem by repealing the recapture bond requirement effective for disposition of interests in LIHTC properties after the date of enactment. An owner of a building (or interest therein) (generally, a limited partnership) that has been the subject of a disposition and is still within the remaining 15-year compliance period with respect to such building would be required to submit a report to its former investors when a recapture event with respect to such building occurs. A copy of recapture event forms sent to investors would be required to be filed with the IRS in order to provide the Service with the information necessary to ensure that all recapture liabilities are timely paid. The general statute of limitations applicable to taxpayers would be modified so that investors who dispose of a building after the effective date of the legislation would remain liable for any potential recapture liability for a period extending through the compliance period for such building to provide the IRS with additional time to audit the partnership's return to ensure the building's continuing compliance with the credit's requirements. Taxpayers who disposed of a building (or interest therein) prior to the date of enactment would not be required to maintain existing recapture bonds (or other alternative security), but cancellation of existing bonds would trigger an extension of the statute of limitations provided for in the legislation. We encourage you to join us in cosponsoring this important legislation.

Mr. HOUGHTON

Mr. HOUGHTON. Mr. Speaker, in any situation where there is an argument at stake, there are two things that are important. First of all, it is to get the facts. Secondly, to face the fact, and I do not mean to oversimplify this, and a lot of people know much more of the details, but it seems to me two things come to the floor. One, Medicare needs an update, seniors need help with their drug costs, and I think this bill does both those things. I have since learned that virtually any piece of legislation that comes before this body can be argued and attacked and counterattacked to death, but who are the customers? Who are we trying to help and are they being helped? Are the seniors being helped? Yes, probably not enough, but we do not know yet. Are the hospitals being helped? Yes, but they certainly could be helped more, but this is a never ending process. Are the doctors being helped who are opting out of the Medicare program? Yes. Are the ambulance drivers being helped? Yes, and it is about time. Will the companies be helped who are thinking about whether to drop programs for their retirees? Absolutely. Will those purchasing drugs be helped? According to the arithmetic I read, there is absolutely no question about this. I would rate this bill a B+, and the reason I do this is I do not think there is any bill that can come before this body that can get an A, not with the attack and counterattack process we use. One of the great poets of this country, Ralph Waldo Emerson, used to say history is no more than a biography of a few stout individuals. It is the few stout individuals, Mr. Speaker, that we need tonight.

Mr. HOUGHTON

Mr. HOUGHTON. Mr. Speaker, today I am joined by my colleague from New York, Mr. Rangel, in introducing a bill to extend the period that the New York Liberty Zone bonds can be issued by New York State and New York City, and to make other changes that would enhance the tax provisions that were included in the original New York Liberty Zone Benefits legislation. The provisions were part of the Job Creation and Worker Assistance Act of 2002, enacted on March 9, 2002, in order to aid in the rebuilding of downtown New York City after the devastation caused by the September 11, 2001, terrorist attack. A loud thank you to the Congress for passing the original legislation. The benefits contained in the package were important and needed. The Liberty bonds have been an invaluable tool for those developments already assisted. They have been utilized, but not to the full extent, primarily due to the economic downturn that was underway and accelerated after the tragedy. While the market for new commercial real estate has been weak, it is estimated the bond allocation for residential projects will be exhausted by the end of next year. The changes requested include: (1) extend the Liberty bonds expiration date to December 31, 2009 from December 31, 2004 to reflect a more realistic time line for the recovery of the commercial real estate market in New York City, (2) increase the amount of the Liberty bonds that can be used for residential development projects from $1.6 billion to $3.0 billion to provide more flexibility to accommodate greater than expected demand for new housing in Lower Manhattan, (3) eliminate the 100,000 square foot minimum for non-public utility projects outside the Liberty Zone, which has greatly hindered the development of much needed smaller utility projects, and (4) a technical correction to Section 1400L(c), which would permit eligible entities to ``opt out'' of the mandatory provision stating that taxpayers must depreciate their Liberty Zone leasehold improvements over an accelerated five year term. The latter change would be retroactive and would be consistent with other similar accelerated depreciation laws, and allows taxpayers to depreciate property over the normal depreciation period. These changes are in the spirit of the original legislation. They merely reflect the different conditions, which exist now that did not exist in March of 2002. So in essence, we believe they are important to the recovery of New York City. They will help to ensure the full utilization of the tax benefits provided in the original Liberty Zone legislation. We urge our colleagues to support this important legislation.

Mr. HOUGHTON

Mr. HOUGHTON. Mr. Speaker, I thank the gentleman very much for those kind words. I will not take a lot of time because so much has been said, and much of it is felt even though the words have not been there, but it is clear when I stand up here, I am going to support this bill, and I encourage everyone else who knows anything about the issues here to support it. We started this bill back in July of last year, and it has finally come to the finish line after many trips back and forth between here and the Senate. What the bill does is, as I am sure as has already been spoken, provides a number of tax benefits for the active military, as well as the Reservists. Also, we made modest improvements to help the families of the members of the military who have given the supreme sacrifice. I am not going to go into the details, Mr. Speaker, of this bill. We have discussed these over the past year. We have discussed them ad infinitum. So those are really behind us, and furthermore, the most important thing is the bill is paid for. I was in Iraq several weeks ago, and it was an impressive time for a variety of reasons, not the least of which is the fact that I met people from not only my own district but from other districts, and with all the problem of the greed and the discussion about the economic system here, here these people are laying their lives on the line, they are getting underpaid, they are tired, they go out in this absolutely crushing heat. The only thing they asked of us when we were there was are you with us, are you supportive of us, and this is one small thing I can do to say, yes, we are.

Mr. HOUGHTON

Mr. HOUGHTON. Mr. Speaker, I thank the gentleman for yielding me time. Mr. Speaker, I want to encourage my fellow Members to support H.R. 7. There are lots of provisions in the bill which I think are good and I appreciate the comments by the former speaker in terms of what the Committee on Ways and Means has done; but there is a particular provision that would help many Americans who are literally struggling to stay alive. This provision would expand the current deductions to all businesses, not just C corporations, and I believe this expansion would substantially increase the donation of food to food banks and other organizations. It is that simple. What these groups do is to provide the obviously daily nourishment to homeless and others that are down on their luck and just cannot provide for all their needs themselves. The bill also includes the provisions of H.R. 807. This is something that I introduced with the gentleman from Georgia (Mr. Lewis) and previous to last year Tony Hall. As many know, Tony Hall is now in Rome doing a wonderful job for the United Nations agencies for food and agriculture. But this bill would open up the deduction for all businesses, as I mentioned earlier, not just the larger corporations, and allow those businesses a deduction for the fair-market value of the food at the time they donate it. This is a good provision. I urge everybody to support the bill.

Mr. HOUGHTON

Mr. HOUGHTON. Mr. Speaker, on Saturday evening, I had the honor of giving out several medals to WW II Veterans and their families--Nick Cavallaro, Leon Andrews, Frank Barber, and Charlie Giardina in Corning, NY. On the wall behind us was a battle scene and under it were the words: ``The United States is #1 because of its veterans.'' It was a haunting reminder of how much we owe to those who leave their families, their friends, and go off to defend the idea of freedom which, of course, is the reason for this country being what it is. There is not a family that has not been touched by some sort of wartime heroism. The flashbacks of those honored veterans of Crystal City Post 524--headed by Doug Herbert and Mike Asiello--still light up the world of those of us coming from WW II. But right now, boys and girls, men and women are fighting for us in Iraq and around the world. We are so proud of them. They embody the same spirit of those older men and women, some of whom went off to war over 60 years ago. God Bless them--God Bless those who risk everything for this special country of ours.

Mr. HOUGHTON

Mr. HOUGHTON. Mr. Chairman, I thank the gentleman for yielding me this time. Mr. Chairman, I would say to the gentleman from Vermont (Mr. Sanders), wherever he is, I am going to suggest a vote against his amendment. I have been around business many years, and I have been in and out of pension plans in many different corporations, and this is a dangerous amendment. I am not going to talk a long time on this thing; I just have to tell my colleagues how I feel. Also, I am on the Committee on Ways and Means, and I would like to feel that we would have an opportunity to understand this and look at it. There has been no notice on this thing whatsoever. But the bottom line is this: the Cooper ruling threatens to drive employers out of the pension system. Pension plans nationwide will be burdened with huge additional liabilities, leaving workers worse off. Is that what we want? As a result of the Cooper decision, we understand the voluntary pension system itself would be in danger. Is this the protection workers need? I do not think so. Frankly, I would urge people to vote against the Sanders amendment. It is not going to help the people I know, the people I have worked with, particularly the senior employees of various corporations who are so dependent upon our defined benefit plan.