Amo Houghton

Mr. HOUGHTON

Mr. HOUGHTON. Mr. Speaker, I am pleased to join my colleague from California, Mr. Becerra, together with my colleagues, Mr. Boehlert from New York and Mr. Coyne from Pennsylvania, in introducing a bill intended to clarify the tax treatment of certain environmental escrow accounts. The provisions in the bill would encourage prompt and efficient settlements with the Environmental Protection Agency (``EPA'') for the clean-up of hazardous waste sites. Currently, there is some uncertainty in the tax treatment of certain ``settlement funds'' which are, in effect, controlled by the EPA, in their role of resolving claims under the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (``CERCLA''). This uncertainty may prevent taxpayers from entering into prompt settlements with the EPA for the cleanup of Superfund hazardous waste sites and reduce the ultimate amount of funds available for cleanup of such sites. Under our bill, if certain conditions are met, the EPA (U.S. government) will be considered the beneficial owner of funds set aside in an environmental settlement fund account. These conditions include the fund being: (1) established pursuant to a consent decree; (2) created for the receipt of settlement payments for the sole purpose of resolving claims under CERCLA; (3) controlled (in terms of expenditures of contributions and earnings thereon) by the government or an agency or instrumentality thereof; and (4) upon termination, disbursed to the government or an agency or instrumentality thereof (e.g., the EPA). If such conditions are met, the EPA will be considered the beneficial owner of the escrow account for tax purposes and the account will not be considered a grantor trust for purposes of Sections 468B, and 671- 677 of the Internal Revenue Code. These escrow accounts, which are established under court consent decrees, are a necessary tool to enable the EPA to carry out its responsibilities and resolve or satisfy claims under CERCLA. Under these types of consent decrees, the EPA should be considered the owner of such funds for Federal tax purposes. Due to the uncertainty as to the proper Federal income tax treatment of such government-controlled funds, taxpayers may be hesitant to promptly resolve their claims under CERCLA by contributing to the settlement funds. One of the underlying purposes of CERCLA is to ensure prompt and efficient cleanup of Superfund hazardous waste sites. This goal is being frustrated by the existing uncertainty in the tax laws. The bill resolves these uncertainties and expedites the cleanup of Superfund hazardous waste sites by treating these escrow accounts as being beneficially owned by the U.S. government and not subject to tax. We urge our colleagues to join us in cosponsoring this legislation.

Mr. HOUGHTON

Mr. HOUGHTON. Mr. Speaker, I am pleased to be joined by my colleagues, Mr. Neal and Mr. English, in introducing the ``Industrial Development Bond Promotion Act of 2002.'' While retaining the dollar limit on the tax-exempt issue itself, the bill broadens the pool of manufacturers who may be eligible to take advantage of the benefits of qualified small issue bonds. Qualified small issue bonds play an important role in creating and sustaining a vibrant manufacturing sector in rural communities. Today, however, the so-called ``$10 million limit'' impedes many growing manufacturers from taking advantage of the benefits of qualified small issue bonds. This rule states that the aggregate face amount of the issue, together with the aggregate amount of certain related capital expenditures during a six-year period beginning three years before the date of issue and ending three years after that date, must not exceed $10 million. This $10 million limit was imposed in 1978. It does not consider changes in the economy, inflation, or the increased costs associated with the construction of manufacturing facilities. Even in small rural communities like those in the district, industrial development authorities have projects that routinely exceed this $10 million limit and are therefore ineligible for this type of financing. The Industrial Development Bond Promotion Act of 2002 would permit capital expenditures of $30 million to be disregarded in determining the aggregate face amount of certain qualified small issue bonds. Given today's global economy and proof that U.S. manufacturers are not adverse to building and manufacturing offshore, it is most important that the calculation of the limit be changed. Across the country, manufacturing jobs are declining. The manufacturing sector's share of all U.S. jobs slipped from 17 percent ten years ago to 13 percent today. Small issue bonds are a valuable tool to local economic development authorities and go a long way toward creating and maintaining investment in manufacturing facilities in communities throughout our country. We encourage our colleagues to join us in cosponsoring this legislation.

Mr. HOUGHTON

Mr. HOUGHTON. Mr. Speaker, there are many features of this bill. I would like to talk about one, which happens to do with New York City; and New York City, of course, was the focal point of the bombing. Many people were killed. Buildings were destroyed. This is a particular feature of this bill which I believe in very strongly, and I would like to feel my other New York associates would feel this way too. I am not going to go through the details of this bill, because they are quite technical in terms of expensing and tax-exempt private bonds and things like that. But the end result, and I will make this very brief, is that it is going to help the smaller businesses and the people who have lived and shopped and started and thrived in lower New York to come back, and that is the critical thing. Mr. Speaker, 20 million square feet of office space was lost, and we have to somehow bring that back. I know that other States say, well, why is this special for New York? New York was the focal point of the bombing, and there was no point in avoiding that. We must help this city. I think this is a good bill, it is a good feature, and I hope other people will support it.

Mr. HOUGHTON

Mr. HOUGHTON. Mr. Speaker, I thank the gentleman for yielding time to me, and I thank the gentleman from California (Mr. Thomas) and the gentleman from New York (Mr. Rangel) for their work. Mr. Speaker, I am honored to stand here with several of my New York colleagues in introducing a bill which really is going to provide much needed tax incentives for businesses to rebuild in lower Manhattan after all the massive destruction caused by the terrorist attacks of September 11. None of us will ever forget the terrible losses of that day, the loss of life, and the most tragic being the heartache to so many families. The World Trade Center was destroyed, other buildings were damaged or collapsed, and of course the price tag is horrendous, here. This bill includes really five provisions. I know it may be a little tedious, but I want to go through them, because I think it is important. First of all, it is to authorize New York State to issue up to $15 billion in tax-exempt private activity bonds over the next 3 years to help renovate and rebuild commercial property, residential property, and also private utility infrastructure; Second, it allows taxpayers to claim an additional 30 percent first- year depreciation deduction for property located in the liberty zone, including buildings and building improvements; Third, it provides a 5-year life for depreciating certain leasehold improvements; Fourth, next to the last, is to increase by $35,000 to $59,000 the amount that can be expensed by small businesses under section 179; Lastly, it increases the replacement period for 2 to 5 years for property that was involuntarily converted in lower Manhattan so taxpayers would not have to recognize the gain. Mr. Speaker, I know these are detailed and sometimes technical issues, but it is very important, and this bill can be the new lifeblood, the new hope, the expectancy of a rebuilt New York. Therefore, I want to thank the gentleman from California (Chairman Thomas), the gentleman from New York (Mr. Rangel), and my colleagues for being able to work on this bill. Obviously, I urge everyone to support the bill.

Mr. HOUGHTON

Mr. HOUGHTON. Madam Speaker, I thank the gentleman for yielding time to me. Madam Speaker, I would like to talk very briefly on Senate Concurrent Resolution 58, which really supports the tenth annual meeting of the Asia Pacific Parliamentary Forum. Madam Speaker, this is a forum, I think it is important to know, that was organized by parliamentarians in the Pacific Rim, including about 27 different nations. The reason we are part of it is because of California, Oregon, Washington, Alaska, and Hawaii. It was started by former Prime Minister Nakasone of Japan, and also Senator William Roth, who worked very, very closely together; and it is loosely modeled on the APEC forum. The forum is hosted in a different country every year, and we have been to Australia and Chile and Japan and Canada and many other nations. This is the first year that this forum will be held in the United States, and we are hoping that this resolution will pass in order to authenticate that. It starts on January 6 and it goes through January 9. We will meet in Honolulu. Senator Akaka, who is the Senate co-chair, had introduced this resolution in the Senate earlier. It is really going to be hosted by the East-West Center which is headed by a group out in Honolulu. Dr. Charles Morrison has a great program, and he has worked very hard, and we are going to be discussing issues, I think, that are important for all of us: terrorism, the economy, the environmental issues, defense cooperation, cultural ties and things like that. Also, we are delighted that the Speaker, the gentleman from Illinois (Mr. Hastert), will speak at the forum's opening ceremony. We have had participation from many distinguished people, including the gentleman from Nebraska (Mr. Bereuter), and we hope to have others out there. Essentially this bill, Madam Speaker, expresses support for this meeting, our hosting of the meeting and commends the East-West Center for their hosting and also hopes that other people will join us in the process.

Mr. HOUGHTON

Mr. HOUGHTON. Mr. Speaker, trade is a tricky business. What we are trying to do is go beyond the bounds of the United States and move into other areas, and this is very, very important. We are going to be talking about this later, because there are people who want our goods and services, but in the process, it is an uneven balancing act and people either in government or in business management can make decisions as far as going abroad. Yet at the same time there are people down in the system who are doing their best to be able to work diligently, loyally, who have no control over that. Sometimes the squeeze comes because of the imbalance in this process and they need protection, and this is what the bill is all about. I think it makes a great deal of sense. I think the conditions are fine. Maybe we will be able to enrich it later on, but it is a good start, and I heartily endorse the TAA bill H.R. 3008.

Mr. HOUGHTON

Mr. HOUGHTON. Mr. Speaker, I am honored to stand with several of my New York colleagues in introducing a bill, which will provide much- needed tax incentives for businesses to rebuild in lower Manhattan-- this all after the massive destruction caused by the terrorist attack on September 11, 2001. None of us will forget the terrible losses of that day--loss of life and the most tragic being the heartache to so many families. The World Trade Center towers were destroyed. Other buildings were damaged or collapsed. The price tag to rebuild is staggering. But rebuilding the infrastructure and economy must start. This package is only part of the solution, but it is an important first step. As New York Governor George Pataki said today, ``The $6.1 billion package will offer incentives for businesses to generate jobs, spur innovation and investment in the Liberty Zone, helping us renew, restore and rebuild lower Manhattan''. The bill includes five provisions which would: (1) authorize New York State to issue up to $15 billion in tax-exempt private activity bonds over the next 3 years to help renovate and rebuild commercial property, residential rental property and private utility infrastructure, (2) allow taxpayers to claim an additional 30 percent, first-year depreciation deduction for property located in the Liberty Zone, including buildings and building improvements, (3) provide a 5-year life for depreciating certain leasehold improvements, (4) increase by $35,000 to $59,000 the amount that can be expensed by small businesses under section 179, and (5) increase the replacement period from 2 to 5 years for property that was involuntarily converted in lower Manhattan so that taxpayers would not have to recognize gain. I want to thank Chairman Thomas and my colleagues for their help in working through this package. I urge your support.

Mr. HOUGHTON

Mr. HOUGHTON. Mr. Speaker, as we stand here today, the political rule of the Taliban is over. They have been defeated in the north. They have fled from Kabul. They are heading for the hills. Winston Churchill noted more than 60 years ago as Britain withstood the ravages of the German bombing attacks, this is not the beginning of the end but rather, ``the end of the beginning.'' We too, are at the end of the beginning of our worldwide effort to combat terrorism. It is a job that we must lead, but it is a job that we cannot do alone. In the earliest moments after September 11th it seemed that just a few nations would stand with us publicly and actively. One of those nations was our longtime friend and ally, Turkey. Turkey is no stranger to terrorism. For more than 10 years it waged a fight against internal terrorists who murdered its diplomats and killed its citizens. Over the space of that decade, more than 30,000 Turks lost their lives. Yet, Turkey never hesitated in its support to us. Within days, Turkish airspace, infrastructure and military organization was pledged in aid to the United States. Turkey went farther. On November 1st, Turkey became the third nation, after the United States and Britain, to commit ground forces in Afghanistan. It dedicated a 90-person special operations group to the ground effort. This gesture is more than symbolic. It is real. These troops have engaged in short and long term reconnaissance missions. They have served as guides for other allied forces. They provide military assistance to humanitarian relief efforts. They work to protect citizens from harm. Turkey's knowledge of Afghanistan and its longstanding links to anti-Taliban forces make this small unit an important cog in our coalition machine. Moreover, Turkey's commitment sends a larger signal to the Muslim world. As a democracy, indeed as the only secular democracy in the Muslim world, Turkey sends a signal that Islam and democracy are not incompatible. It is an important one for the millions of Muslims worldwide who wonder whether this effort is a disguised attack on their religion. Mr. Speaker, as important as Turkey's decision was to send troops to Afghanistan, it should not surprise anyone. Turkey has been with us for 50 years in peace and in conflict. They stand with us today, and for that we should be grateful.

Mr. HOUGHTON

Mr. HOUGHTON. Mr. Speaker, I yield 2\1/2\ minutes to the gentleman from Illinois (Mr. Crane).

Mr. HOUGHTON. Mr. Speaker, I yield myself the remainder of my time. Mr. Speaker, the gentleman from Ohio (Mr. Hall), the gentleman from California (Mr. Matsui), and the gentleman from Virginia (Mr. Wolf) have said everything. It is a good bill, it is a timely bill, and it is a needed bill. I wholeheartedly support this.

Mr. HOUGHTON. Mr. Speaker, I yield 5 minutes to the gentleman from Virginia (Mr. Wolf). (Mr. WOLF asked and was given permission to revise and extend his remarks.)

Mr. HOUGHTON. Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, I want to also thank various individuals. Obviously, I thank the gentleman from California (Mr. Matsui). I would like to thank the gentleman from New York (Mr. Rangel) on the other side. I would like to thank particularly the gentleman from Virginia (Mr. Wolf) on this side. I think the gentleman from Virginia (Mr. Wolf) and the gentleman from Ohio (Mr. Hall) are an absolutely lethal one-two punch. They are terrific, and they have done an absolutely fabulous job in this. Let me talk a little bit about this bill. I may be redundant, but I would like to express my own feelings. This is a bill which was drafted by a variety of us, and the USTR and the State Department also agrees with it. It authorizes the President, as has been said earlier, to ban all rough diamonds from any country that has not made an effort to control the trade in conflict, or, as we call them, blood diamonds. This bill, H.R. 2722, gives the administration the authority to ban the import of these diamonds. This would go a long way to help end the international traffic of blood diamonds which are responsible for really three things: first of all, strong rebel activity in Africa, primarily Sierra Leone, Angola, and the Congo; secondly, horrendous human rights atrocities in these countries; and third, also, funding of terrorists and other illegal activities, such as the al-Qaeda terror network. The bill gives plenty of flexibility to the administration to use diplomatic avenues to address the problem before outright banning all diamonds from the country. It also protects the legitimate diamond trade, ensuring that countries such as South Africa and Botswana, Belgium, and Israel are not adversely affected. The bill also defers to the so-called Kimberley process, which is a process that is working on the implementation of the system of standards and controls which are currently developed in these multilateral negotiations. It does not adopt a system or otherwise undermine any of those negotiations that are going on. Most importantly, in the Committee on Ways and Means the bill remains consistent with the international trade obligations. There are so many people to thank, and a lot of them have already been thanked. Others will be thanked later on. This is a good bill. We hope that it is passed today and accepted by the Senate so the President can sign it before the end of the year. Mr. Speaker, I reserve the balance of my time.

Mr. HOUGHTON. Mr. Speaker, I yield 2 minutes to the gentleman from California (Mr. Royce).

Mr. HOUGHTON. Mr. Speaker, I yield 4 minutes to the gentleman from Michigan (Mr. Ehlers). (Mr. EHLERS asked and was given permission to revise and extend his remarks.)

Mr. HOUGHTON

Mr. HOUGHTON. Mr. Speaker, I thank the gentleman for yielding me time. Mr. Speaker, there are many features of this bill. You can argue about any one of them. There is too much money, it is the wrong target, it favors one group over another, it is not sufficient short-term impact. But when I try to sort this all out, the basic conclusion is this bill is going to stimulate, and that is what we want. In other words, we want to put money into the hands of individuals and of job creators, to invest and to save and to spend. Right now, as we try to catch our balance as a country, one of the features of the bill is a thing called a temporary extension of net operating loss carry-back. That is quite a mouthful, but let me try to tell you what it means and how it works. It means that a company, when it makes money in the past and loses money now, can claim a cash credit for the money lost, really deducting it from the previous profits. In other words, it can still get a refund soon for the money it lost, and the present law says you can go back 2 years; but many times that pool is not large enough, so this law suggests that it goes back 5 years. This means a lot. There was a story of a company this morning that lost $8.8 billion in the first quarter. It has made money in the past. It has fallen off the cliff. This will be a tremendous help in order to keep some of the people employed. So if you file in March, on the 15th of March, for the previous recorded profits or losses for the year 2001, and then you file a carry-back form by May 1, or 45 days later, you will get a cash check from the IRS. That means a great deal. The cost to the Government the first year is $4.7 billion. The cost over a 5-year period is $3.7 billion. Now, I am not wise enough to know what is exactly right and what is the right proportion, but I do know that this moves us in the right direction; and, therefore, I support it.

Mr. HOUGHTON

Mr. HOUGHTON. Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 2899) to authorize the Secretary of the Treasury to issue War Bonds in support of recovery and response efforts relating to the September 11, 2001 hijackings and attacks on the Pentagon and the World Trade Center, and for other purposes, as amended.

Mr. HOUGHTON. Mr. Speaker, I reserve the balance of my time.

Mr. HOUGHTON. Mr. Speaker, I yield 5 minutes to the gentleman from New York (Mr. Sweeney), who is the original conceiver of this legislation.

Mr. HOUGHTON. Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, I am going to echo many of the sentiments and the feelings that other people have expressed today, but I would like to do this in this particular context of the bill. As we all know, last month we suffered a terrible blow and lives were lost and buildings were destroyed and families were maimed and businesses and structures were destroyed; but the American spirit, as always, stood firm in the face of adversity, and there was an outpouring of support for recovery and rebuilding. Police and firefighters and rescue workers and volunteers of every kind worked around the clock to respond to this attack. The American people have shown a commitment to these efforts by donating to charities in record numbers, over $300 million to both the Red Cross and the United Way, for example; and blood banks, as we all know, have been overwhelmed with donations, some 500,000 in 2 weeks after the attacks. School children across the country are involved in raising money for the attack victims and the children of Afghanistan. This particular legislation allows another way for individuals to support our relief efforts. The Treasury Department is authorized to designate new savings bonds as freedom bonds in response to the acts of terrorism of September 11. These freedom bonds will provide a method for people across the country to lend their support to our country by purchasing savings bonds. I congratulate my colleague, the gentleman from New York (Mr. Sweeney), for introducing this legislation. Mr. Speaker, I reserve the balance of my time.

Mr. HOUGHTON. Mr. Speaker, I yield myself such time as I may consume. I congratulated the gentleman from New York (Mr. Sweeney) in my statement, but I also want to thank the gentleman from New York (Mr. LaFalce), and I am sorry for that omission. Mr. Speaker, I yield 3 minutes to the gentleman from Illinois (Mr. Kirk).

Mr. HOUGHTON. Mr. Speaker, I reserve the balance of my time.

Mr. HOUGHTON. Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, I have to admit I was against this legislation originally because the whole concept of victory bonds in World War II was to take money out of the economy so it would not be chasing consumer products which were no longer in existence because the production had moved towards defense. But then in thinking through what is happening here, everybody wants to be a part. Everybody wants to be a part of our effort, whether they give money to the Red Cross or whether they give blood in a blood bank. I think this is a worthy cause and something which Americans can identify with, and I think it is the right thing to do. Mr. Speaker, I thank the gentleman from Maryland (Mr. Cardin) very much for his participation here; and I thank the originators of this bill.

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

Mr. HOUGHTON

Mr. HOUGHTON. Mr. Speaker, tonight we talk patriotism, and we should. And we talk sacrifice, and we should. And we talk courage. We talk all those things about humanity and we should. But I do think it is important for the American people to realize that this is going to be a very arduous, difficult, nasty, drawn-out struggle. One of the great characteristics and many times it is unsung, but it is there, is perseverance. Just keeping on going. It is so important that we as a public and citizens understand that, because this is not going to be something which brave words will conquer. It is only our perseverance.

Mr. HOUGHTON

Mr. HOUGHTON. Mr. Speaker, I thank the gentleman from California (Mr. Thomas) for his chairmanship here and the gentleman from New York (Mr. McNulty). I really appreciate the leadership of the gentleman from California. Many times we do not realize how important leadership is until there is a crisis and certainly the gentleman from California has come up and hit the mark so well. I am going to defer to my colleagues who have explained the specific tax provision of this bill. We all have our own individual stories, particularly those of us who live in New York. I think God reached down and grabbed my son by the hand. He was not in his 60th floor office in number 1 tower in the World Trade Center when the bomb went off. But virtually all of his associates up there were killed, and so we really identify and understand and sympathize with the people in those families that had this terrible disaster. So the important point here is that the victims of terrorism are the victims of an undeclared war, and that is, pure and simple, what it is. This bill simply recognizes that reality. The IRS and Treasury are waiving interest and penalty provisions for the families affected by Tuesday's outrage, and there is so much more that needs to be done, but this is an important step.