Amo Houghton

Mr. HOUGHTON

Mr. HOUGHTON. Mr. Chairman, before I begin, I just want to thank a couple of people who have spent an enormous amount of time on this, Francesca Tedesco and also Kathy Rafferty. I want to thank the gentleman from Georgia (Mr. Norwood). What the gentleman from Georgia (Mr. Norwood) has done is very, very significant. I say this because I come from the world of business. You can have a patient, you can have a patient's rights, but if you do not have the funding for that patient, it does not do any good. What the gentleman from Georgia (Mr. Norwood) has done is bridge the gap and made it possible for those people, not only in large and small businesses, and small businesses, as you know, comprise 75 percent of the employment in this country, it enables them now to buy into a program which they feel they can afford, without having the sword of liability, unending liability, hanging over their head. I think a lot of people are going to be thanking the gentleman from Georgia (Mr. Norwood) for bridging this gap, because it would not have happened without him.

Mr. HOUGHTON

Mr. HOUGHTON. Mr. Speaker, today I am introducing a bill to solve a problem that has been facing a number of companies during the past year who grant stock options to their employees. Many companies use stock options as an incentive to attract and motivate employees. Companies give their workers the right to purchase company stock, at a small discount from the listed price, through Employee Stock Purchase Plans and Incentive Stock Options. Employee stock ownership motivates workers and can create a positive relationship between management and workers, where both reap rewards for successful company performance. For nearly 30 years the Internal Revenue Service (IRS) has taken the position that the income from these stock options is not subject to employment taxes. However, recent audits and rulings on specific companies have raised the troubling prospect that the IRS now believes that employment taxes should be withheld from the paychecks of individuals who exercise stock options under these plans. Employee Stock Purchase Plans and Incentive Stock Options were created by Congress to provide tools to build strong companies and encourage greater employee ownership of company stock. It was not the intent of Congress to dilute these incentives by requiring employment tax withholding when the stock is purchased. While I am pleased that the IRS currently has in place a moratorium so that no employment taxes will be assessed on stock options, I believe Congress needs to clarify existing law to prevent any future attempts to change past policy on stock options. The current moratorium extends until January 1, 2003, and unless Congress adopts the proposed legislation, companies and workers will face uncertainty as to whether options are subject to withholding taxes. The legislation I am introducing would clarify that the difference between the exercise price and the fair market value of stock offered by the Incentive Stock Option or Employee Stock Purchase Plan is excluded from employment taxes. In addition, wage withholding is not required on disqualifying dispositions of Incentive Stock Option stock or on the fifteen percent discount offered to employees by Employee Stock Purchase Plans. I urge my colleagues to join me in cosponsoring this legislation.

Mr. HOUGHTON

Mr. HOUGHTON. Mr. Speaker, there are many parts of this bill. The part I would like to concentrate on is something which the gentleman from Ohio (Mr. Hall) and I have been working on for a long time. The basis is this: there are 31 million Americans, according to a Department of Agriculture report, who go to bed hungry every night; and 12 million of those are children. One of the things this bill does is to encourage and gives a tax incentive to restaurants and hotels and people like that who have excess food, throw it away, to give it to these organizations, to help these people that are hungry. That is all it is. It is a very simple part of this bill. I think it is needed, and I think it is the right area.

Mr. HOUGHTON

Mr. HOUGHTON. Mr. Speaker, I am pleased to join my friend, Mr. Oberstar, and 123 of our colleagues, in introducing the bipartisan ``High-Speed Rail Investment Act of 2001.'' We believe this bill is critical to getting high-speed rail projects started across the country and liberating our Nation's highways and airways from increasingly serious congestion. This legislation, a companion to S. 250 in the other body, is designed to put into place a federal program to support States in the development of high-speed rail. The House passed a similar bill in the 106th Congress. Congestion on our highways and in our skies is at a crisis point. The cost to our nation in terms of lost productivity and wasted fuel could be as high as $ 100 billion a year. This will only get worse as road and air travel continue to increase. We cannot resolve this problem simply by building new roads and new airports, the costs are enormous and in many places we simply do not have the space. Our rail system has fallen far below the standards of systems in most other developed industrial countries. We have scarce fiscal and land resources and we must make more efficient use of our existing infrastructure. The rail lines are there already. Our bill would build on the current rail infrastructure. The bill would authorize Amtrak to issue $12 billion in bonds over the next 10 years for high-speed rail projects in up to 12 regional corridors identified by the Department of Transportation. The bond proceeds could be invested in high-speed rail rights-of-way, rolling stock and other capital improvements. Bonds could also be issued by Amtrak on behalf of any other qualified intercity passenger rail carrier with the approval of the Secretary of Transportation. The bondholders would receive federal tax credits in lieu of interest payments and the credits would be included in taxable income. States would provide at least a 20 percent match which would be deposited in a trust account to redeem the bonds, but Amtrak would remain ultimately responsible for repaying the principal. The state match would help ensure that only high priority projects are funded. The bill provides that not more than $1.2 billion in bonds could be issued in each fiscal year from 2002 to 2011. Also, not more than $3 billion could be designated for qualified projects on the northeast rail corridor between Washington, DC and Boston, Massachusetts. In addition, not more than $3 billion could be designated for any individual state for qualified projects. We believe this proposed legislation is forward looking, cost- effective, and absolutely necessary if we are to ensure that our nation's transportation system can handle the expected growth in travel without being overwhelmed by congestion and gridlock. We encourage our colleagues to join us in cosponsoring this legislation.

Mr. HOUGHTON

Mr. HOUGHTON. Mr. Speaker, I first want to thank the gentleman from Arizona (Mr. Stump), who has been a real leader in this effort; and I appreciate what he has done. I just want to say a couple of things. I cannot get into the architectural or the engineering problems here. I remember in 1939, I am old enough to remember that, that they had the same arguments as far as the Jefferson Memorial. It would be ruining the tidal basin and everything like that. I do not believe that for a minute, and it has not proved to be so. I enlisted in the United States Marine Corps in May of 1944. I was proud of that. There are an awful lot of us who are still around, a dwindling number, who want to see something. We have the Vietnam Memorial, we have the Korean Memorial, but we do not a World War II memorial. Frankly, there are hundreds of thousands of people who believe this and who have contributed: fraternal organizations, foundations, corporations. I have a VFW post, number 524, in my little town of Corning, which is about 12,500 people, which has raised more money than any other small VFW post in the whole country. They really believe in this. There are people out there, not intellectualizing about this, but who have a piece of their skin in this issue. They want to have something done. I would like to have something done, and I would like to have something done before I die.

Mr. HOUGHTON

Mr. HOUGHTON. Mr. Speaker, I am pleased to join my colleague from New York, Mr. Rangel, together with a number of other colleagues, in introducing our bill to fix a current problem in the Internal Revenue Code regarding use of American Legion Post facilities by members and their families. That is, who qualifies as a ``member'' versus a guest, for purposes of unrelated business income and the exempt status of the Legion Posts. We do not believe Congress intended or contemplated that use of the facilities by families of the member would result in unrelated business income, or worse yet, the possibility of losing the Post's tax exemption under Section 501(c)(19). By Congressional charter, only veterans who served during specifically designated wars may become ``members'' of the American Legion. Section 501(c)(19) requires only that 75% of the members be current or former members of the Armed Forces, and substantially all the other members are cadets, spouses, widows or widowers of past or present members. The IRS says substantially all is 90 percent. The Legion has many programs, such as the Sons of the American Legion (SAL), as well as programs involving youth and family support groups. All are designed to further the purposes for which the exemption was granted. The Post is a family gathering place for many social and patriotic activities. As a result, many family members of numerous generations attend these events. Some relatives are specifically treated as members, others are not. Also questions arise as to the status of the members in the SAL, as well as relatives not specifically covered in regulations, i.e. great grandparents, great grandchildren, etc., and whether they are perhaps ``associate or social members, and if they count for the 90% test. The answers could determine the extent of unrelated business taxable income as well as exempt status. This is not an issue regarding true guests, i.e. unrelated individuals who are, and must be, accompanied by a member. Nor is any substantive change contemplated regarding the sale of life and health insurance to members as provided in Section 512(a)(4). That section would be amended to conform the definition to Congressional charter members and their dependents. Our bill would eliminate these potential issues by providing that the definition of ``member'' for purposes of the exemption status and unrelated business income would be expanded to include ``ancestors or lineal descendants of the member'' (i.e. past or present member of the Armed Services meeting the Congressional charter definition). We believe this change is not only fair, but recognizes the original intent of Congress, and the fact that more distant relatives of the member will come into existence over time. We hope our colleagues will join us in cosponsoring this legislation. Thank you.

Mr. HOUGHTON

Mr. HOUGHTON. Mr. Speaker, today, I am pleased to join my colleagues from Ohio, Tony Hall, in introducing the ``Good Samaritan Tax Act'', a bill that has been introduced in the two previous Congresses. The purpose is to help meet the demand for food for the needy. The economic boom of recent years has not eliminated the need to feed the hungry. In fact, as more and more citizens are removed from the welfare rolls many turn to food banks for help. A recent U.S. Department of Agriculture report indicated that in 1999, 10 percent of American households, comprising 31 million individuals (including 12 million children), suffer from hunger. According to a recent Conference of Mayors report, demand for emergency food has increased, and over 13 percent of this demand goes unmet. The bill would increase the incentives for restaurants, farms and other businesses in the food industry to donate food to food banks, homeless shelters and other charitable organizations. The Internal Revenue Code actually discourages contributions because of the uncertainty regarding the tax treatment of donations of food as compared to donations of other inventory. The bill has been designed to correct that deficiency. We believe this bill would remove the uncertainty and provide the necessary incentive for businesses to increase their food donations. This would be accomplished by adding a provision to Section 170(e) of the Code that would indicate that the fair market value of donated food is determined, (1) without regard to internal policies, lack of market, or similar circumstances, whether the food cannot or will not be sold, and, (2) if applicable, by taking into account the price at which similar products are sold by the taxpayer at the time of contribution. These have been points of controversy with the Internal Revenue Service, causing uncertainty as well as disincentives to incur the administrative and other costs necessary for the proper handling and preservation of food being donated. In addition, Section 170(e) would be amended to include businesses in addition to C corporations, as the current law provides. We hope our colleagues will join us in cosponsoring this legislation.

Mr. HOUGHTON

Mr. HOUGHTON. Mr. Speaker, I am pleased to join my colleague from New York, Mr. Rangel, together with a bipartisan group of our colleagues, in introducing a bill which would eliminate a fundamental unfairness in the application of the U.S. tax law to taxpayers that have income from foreign sources. The bill would repeal the present-law limitation on the use of foreign tax credits under the alternative minimum tax that has the effect of subjecting taxpayers to double taxation on foreign income. This bill is identical to the one introduced in the 106th Congress, except for advancing the effective date by a year. A U. S. citizen or domestic corporation that earns income from sources outside the United States generally is subject to tax by a foreign government on that income. The taxpayer is also subject to U.S. tax on that same income, even though it is earned outside the United States. Thus, the same income is subject to tax both in the country in which it is earned and in the United States. However, the U. S. allows taxpayers to treat the foreign taxes paid on their foreign source income as an offset against the U.S. tax with respect to that same income. The basic principle of this foreign tax credit is simple: to provide relief from double taxation. When it comes to the alternative minimum tax (AMT), this basic principle of providing relief from double taxation falls by the wayside. The AMT was enacted to ensure that individuals and businesses that qualify for various ``preferences'' in the tax rules nevertheless are subject to a minimum level of taxation. However, the foreign tax credit provisions of the AMT operate to ensure double taxation. Under these AMT rules, the allowable foreign tax credit is limited to 90 percent of the taxpayer's alternative minimum tax liability. Because of this limitation, income that is subject to foreign tax is subject also to the U.S. AMT. The result is double (and even triple) taxation of income that is used to support U.S. jobs, research and experimentation and other activities. There is no rational basis for denying relief from double taxation to that class of taxpayers that are subject to the AMT. Accordingly, the bill being introduced will eliminate the 90 percent limitation on foreign tax credits for AMT purposes. With the elimination of this limitation, relief from double taxation will be provided to taxpayers that are subject to the AMT in the same manner as it is provided to those taxpayers that are subject to the regular tax. Concern regarding the unfairness of the AMT limitation on the use of the foreign tax credits is not new. Indeed, the House in 1995 passed a provision repealing the 90 percent limitation as part of a complete package of AMT reforms. Overall reform of the AMT, for individuals and businesses, remains a high priority. This bill to eliminate the 90 percent limitation on foreign tax credits for AMT purposes represents an important step in that direction. We urge our colleagues to join us in cosponsoring this legislation.

Mr. HOUGHTON

Mr. HOUGHTON. Mr. Speaker, I am pleased to join with several of my colleagues in introducing our bill, which would address an inequity caused by a change in the Internal Revenue Code in 1997. The proposed change would simply adjust an oversight and bring fairness and equality to the Code by recognizing the unique circumstances of the members of the Foreign Service, the Uniformed Services and U.S. business persons who are working abroad. The bill is the same as the one introduced in the 106th Congress, except that the applicability to business persons provision has been added. The bill is retroactive to May 1997, when the change occurred. The Code was changed in 1997 to provide a benefit to taxpayers who sell their principal residence--a change more generally beneficial than the prior law. Where the prior law provided for rollovers of capital gains and a one-time exclusion, the new law requires that the owner(s) occupy the principal residence for at least two years of the previous five years from the date of sale to qualify for the full exclusion. However, members of the Foreign Service and the Uniformed Services, as well as certain business persons posted abroad by their U.S. employers, may not be able to take advantage of the generous change enacted in 1997. The problem arises from the fact that we post our Foreign Service abroad for years at a time, and we move the military from post to post in the U.S. and abroad. The same problem can arise for business persons who are moved abroad for longer and more frequent periods than in the past. With the globalization that is occurring, and affecting most economies, it is essential that our multinational companies compete on a worldwide basis. Globalization is certainly a major factor in our economy. In 2000, exports and imports for the U.S. totaled about $2 trillion--over 20% of our economy. The problem arises because it is difficult for these individuals to fit into the mold we created in the 1997 law change. This result occurs because their posting abroad and at home is controlled by others. The bill would alleviate this problem for Foreign Service and Uniformed Services members by suspending the five year period for ownership and principal use for any periods during which the taxpayer was under official orders to serve at a duty station away from his or her home. This change would retain the 5 year look-back and the 2 year principal residence rules, but would address the unfairness issue applicable to members of the Foreign Service and Uniformed Services. The bill would also address the issue for business persons by suspending for up to five years, the five year principal residence test for an individual relocated abroad by his or her employer. The proposed correction of this problem is not new. In fact, the Taxpayer Refund and Relief Act of 1999, H.R. 2488, which was passed by both the House and the Senate included provisions to correct the problem for all three groups. Unfortunately, the bill was vetoed for reasons unrelated to this proposal. Recently, we in the House have been focusing on tax bills that benefit and directly affect the American people--and this bill does just that. We urge our colleagues to join in cosponsoring this legislation.

Mr. HOUGHTON

Mr. HOUGHTON. Mr. Speaker, I am pleased to join my colleague from Maryland, Mr. Cardin, together with a bipartisan group of our colleagues, in introducing the ``Artists' Contribution to American Heritage Act of 2001''. The bill would alleviate an unfairness in the tax law as it applies to charitable donations of property by the taxpayer/creator and significantly enhance the ability of museums and public libraries to acquire important original works by artists, writers and composers, and ensure the preservation of these works for future generations. The proposed legislation is the same as we introduced in the 106th Congress, except for advancing the effective date by a year. Since 1969, the law has provided that the creator of the artistic property is only allowed a charitable deduction equal to the cost of the materials that went into the property. For example, an established artist who donates a painting to the local museum is allowed a deduction for the cost of the canvas, brushes and paint, etc. used to produce the painting. Of course, these amounts are de minimus. There is no real tax incentive to contribute such works of art for the public to enjoy. In fact, the tax law works in the other direction. It makes more financial sense to the creator to sell his or her work. If a collector or art buff buys a painting that appreciates over time, because the artist becomes well-established or was a known and collected artist when the painting was purchased, the collector is allowed a deduction for fair market value when the painting is contributed to the local museum. This is the fairness issue. There has not always been such disparate tax treatment. Before 1969, the artists/taxpayers received the same treatment--the deduction was based on fair market value. The law was changed, primarily because of the perception that some taxpayers were taking advantage of the law through less than accurate valuations of their charitable gifts. After the change in 1969, gifts of donor generated art work (paintings, manuscripts, compositions, artistic and historically significant correspondence and papers) to qualifying charitable organizations and governmental entities dropped significantly. Creators were more likely to sell their works than to contribute them. Tom Downey, a former colleague of ours, introduced similar legislation in 1985. In his floor statement he noted that Igor Stravkinsky had planned to donate his papers to the Music Division of the Library of Congress the month the 1969 tax change was signed into law. Instead, the papers were sold to a private foundation in Switzerland. Now, 16 years later the situation has not improved. It is time to change our law to encourage rather than discourage such contributions. There have been significant changes in the valuation process since 1969. All taxpayers making charitable contributions of art work (other than donor generated art work) are required to: (a) provide and/or retain relevant information as to the value of the gift, (b) provide appraisals by qualified appraisers or, in some cases, (c) subject them to review by the IRS's Art Advisory Panel, depending on the dollar amount of the contribution. These changes would apply to creator- donated property under our proposal. In addition to the valuation safeguards already in the law, our proposal would add additional protections to prevent abuse. These include the following: (a) limiting the value of the deduction to the amount of income the creator received from similar property and/or similar activities, (b) providing that the deduction can only be claimed in the year of contribution, i.e. the carry over rules do not apply, (c) limiting the deduction to property created at least 18 months before the contribution, (d) limiting the deduction to gifts related to the purpose of the institution which receives it, and (e) excluding contributions of property (letters, memos, etc.) created by taxpayers in their role as employees or officers of an organization. The benefit to the nation when artists are encouraged to contribute their work during their lifetime cannot be overemphasized. It allows the public, historians, scholars and others to learn from the artist his/her aesthetic aims for the work; how it was intended to be displayed, performed or interpreted; and what influences affected the artist. Our proposal represents an important step in providing some tax incentive, with needed safeguards, for the creators and moves toward putting them on the same footing as collectors who contribute similar property. Most importantly, it could make the difference in a decision by the creator/donator to contribute some of their created art works to a museum or public library, rather than sell them in the marketplace. That way important works are preserved in the public domain and we all benefit. We urge our colleagues to join us in cosponsoring this legislation.

Mr. HOUGHTON

Mr. HOUGHTON. Mr. Speaker, no bill is perfect; and we always have ways of trying to change legislation. I hate to be an ``aginner,'' and I do not mean to be a nitpicker, but every so often something just does not feel right, so I tend to vote not only against H.R. 8, but also against the Democratic substitute; and what I would like to do is explain why. I think the eradication of the estate tax is wrong. I am sort of the camp of mend it, do not end it. And by ending it, what we do is we bring down upon ourselves, I think, a lot of unseen conveniences. Let me give you an example. What are the incentives to giving to churches? What are the incentives of giving to educational institutions? What are the incentives of our total giving that is so intertwined with the concept of our taxation system the way we have it now? Also when you buy a life insurance policy, you are looking for certainty; you are looking for predictability. The changes in that could be really horrendous. Also, I really feel that it is not within the spirit of the Founding Fathers to develop sort of a leisure class, people with little incentive to work because you pass money down from one generation to the other to another, absolutely whole cloth. While H.R. 8 is overkill, I feel a Democratic substitute is not right because it does not take into account the reduction in rates. If we are really going to help the small farmers or the small businessmen or the people who are working, we have to reduce those rates. So I reluctantly oppose both bills.

Mr. HOUGHTON

Mr. HOUGHTON. Mr. Speaker, Today I am joined by my colleague from New York, Mr. Rangel, in introducing our bill, ``The Work Opportunity Improvement Act of 2001.'' The bill would permanently extend the Work Opportunity Tax Credit (WOTC) and the Welfare-to-Work Credit (W-t-W) and make one other change discussed below. Both programs are currently due to expire on December 31, 2001. As we reintroduce the bill to permanently extend the programs, I want to note how please I was to receive a report dated March 13, 2001 from the General Accounting Office which concluded that there is little evidence, if any, that employers are ``churning'' employees to take advantage of multiple credits. This report puts aside the churning charge that has surfaced in the past, and reflects favorably on the integrity of the programs. Because there have been a number of improvements in the programs over the past few years, they are being well received in providing employment, with training, for our disadvantaged. During the past five years, WOTC and W-t-W have been an integral part in helping over a million and a half low-skilled individuals dependent on public assistance, enter into the work force. That does not mean there can't be further improvements to the programs. We will continue to review the programs for improvements that will benefit all the parties involved. Such training can be costly and the credits provide an incentive to employers to hire the disadvantaged and provide the needed training while offsetting costs associated with the latter effort. Of course, many believe the programs would be even more successful if they could be extended indefinitely. We hear from both employers and state job services, which administer the programs, that the continued uncertainty surrounding short-term extensions impedes expanded participation and improvements in program administration. If the programs were made permanent, employers, both large and small, would be induced to expand their recruitment efforts and encourage the states to improve the administration of the programs. Such a change would benefit everyone. The other provision in the bill would expand the food stamp category by increasing the age limit from 24 to 50 years of age. The current ceiling of 24 limits the availability of individuals in this targeted category. There are many individuals, over the age of 24, who could be gainfully employed if the age limit was expanded. Currently, the programs do an excellent job of helping women on welfare enter into the workforce. Over 80% of the hires in the programs are women. However, men from welfare households face a greater barrier to hire because they are no longer eligible for welfare once they turn 18. However, they can qualify if they are a member of a household receiving food stamps. But again, the age limit on the food stamp category is 24. We believe increasing that age limit to 50 will provide employers an incentive to hire such individuals and provide them with a sense of personal responsibility and self-esteem in assuming their responsibility as parents and members of society. We use our colleagues to join us in cosponsoring this important legislation to extend and improve the two programs.

Mr. HOUGHTON

Mr. HOUGHTON. Mr. Speaker, it is always an honor to be with the gentleman from Georgia (Mr. Lewis) whether we are on the House floor or in Selma or any place. I had a wonderful experience with the gentleman from Georgia; Ambassador Sheila Sisulu; and Douglas Tanner, who is the president of the Faith and Politics organization in my part of the country, upstate New York; and it was fascinating talking about the gentleman's reminisces and experiences in Alabama, and also comparing those to Ambassador Sisulu's experiences in South Africa. It was absolutely great. I have a couple of comments I would like to make and then also, Mr. Speaker, of my friend, the gentleman from Georgia (Mr. Lewis), I would like to ask a question at the end of this. Let me make a comment or two if I could. We had an extraordinary experience in Alabama. I had children and grandchildren, and it was a family affair because I wanted them to have the same sense that I did the first time I was down there of the enormity of this. We celebrate Washington's birthday and Lincoln's birthday and Labor Day, but this is something that we should put a fine point on because it did something to break us over a tidewater in this country which many of us did not feel at the time because we were not there. I was down there with the gentleman from Georgia (Mr. Lewis), and he is all dressed up as he is today and he is handsome and he has a nice suit on and he speaks well and he is a very dignified individual. And yet I think back to that time 36, 37 years ago when the gentleman was on the pavement having been beaten and bloodied and representing all of the aspirations that we have for fairness and decency in our society, and we were not there. We wanted to be there, but we were not there; but the gentleman from Georgia was there. I am a member of the World War II generation, and we are dying pretty rapidly. And someone said at the end of 2008 we will all be gone, but not so of the people of the gentleman from Georgia's generation and the people who fought those battles in Selma, Birmingham, and Montgomery. You cannot listen, as you have heard me say so many times to this lovely lady, Betty Fikes, singing without understanding something about our country that one does not sense unless you sing the Star Spangled Banner or America the Beautiful. This is an extraordinary experience, and this is the lady who was singing at the time of the marching and the beatings and the death and the tragedy down there. These people are all alive. And so to be able to go down there and experience that, be with them, knowing that they are alive and still giving their message, their testament, is always an extraordinary experience. Mr. Speaker, I would like to ask a question, if I could. Those of us who have seen the gentleman from Georgia (Mr. Lewis) in action and were with Betty Fikes and with Bernard Lafayette and with so many others, look back and see something which was an enormous change in our whole philosophy. But as we know now, it was only one moment in time, it was only one incident and it did not cure our sense of discrimination in this country, it only opened it up. So the question I ask of the gentleman from Georgia, what do we do next? What are those things that we must continue to do not only to honor this legacy but to fulfill our pioneering spirit and try to make this a better place.

Mr. HOUGHTON. Mr. Speaker, I would advise the gentleman from Georgia that I will yield to somebody on the gentleman's side, and then I know that the gentlewoman from Missouri (Mrs. Emerson) wants to say something.

Mr. HOUGHTON

Mr. HOUGHTON. Mr. Speaker, I am pleased to join my colleague from Massachusetts, Mr. Neal, in introducing our bill, ``The Housing Bond and Credit Modernization and Fairness Act.'' Our joining together in introducing this bill today is indicative of the broad bipartisan support Housing Bonds and the Low Income Housing Tax Credit (Housing Credit) programs enjoy. The Congress has an unusual opportunity, without creating any new program, to create new housing opportunity for tens of thousands of low- and moderate-income families every year. All it will take is enactment of minor legislative changes to eliminate obsolete provisions in the two principal Federal programs that finance the production of affordable housing: Housing Bonds, or single family Mortgage Revenue Bonds (MRBs), as they are commonly known, and the Housing Credit. This bill builds on important legislation Representative Neal and I introduced and supported in the last two Congresses to increase the Housing Bond authority by nearly 50 percent to make up for the effects of inflation. In the 106th Congress this piece of legislation, as well as the Housing Credit legislation, had the phenomenal support of 375- plus House cosponsors from both parties, from all regions of the country, and from rural and urban districts. Finally, in late 2000, legislation applicable to both the Housing Bonds and Housing Credit was enacted into law. The Housing Bond and Credit Modernization and Fairness Act does three things. First, the bill would repeal the Ten-Year Rule, a provision added to the MRB program in 1988 that prevents States from using homeowner payments on such mortgages to make new mortgages to additional qualified purchasers. States estimate that, between 1998 and 2002, the Rule will mean the loss of over $8.5 billion in mortgage authority, denying tens of thousands of qualified lower income homebuyers each year the ability to obtain affordable MRB-financed mortgages. Second, the bill would replace the present unworkable limit on the price of the homes these mortgages can finance with a simple limit that works. No reliable comprehensive data exists in all areas of the country to determine average area home prices. The current price limits were issued in 1994 based on 1993 data. They are obsolete and well below current home price levels in most parts of the country. Many qualified buyers simply cannot find homes that are priced below the outdated limits. The answer is to modify the present limit, set in Washington, with a simple formula limiting the purchase price to three and a half times the qualifying income under the program. We would like to acknowledge the leadership and support of our colleague Representative Bereuter, who introduced last year and reintroduced in this Congress this element of our legislation as a freestanding bill. Finally, the bill makes Housing Credit apartment production viable in rural areas by allowing statewide median incomes as the basis for the income limits in that program. This change would apply the same methodology in determining qualifying income levels that is used in the MRB Program. HUD data shows that current income limits inhibit Housing Credit development in at least 1,700 of the 2,364 non-metropolitan counties across the country. It is noteworthy that the changes proposed by The Housing Bond and Credit Modernization and Fairness Act were endorsed by the bipartisan National Governors Association at its recently concluded meeting. The governors know how important the Housing Bond and Housing Credit programs are in giving states the ability to meet the housing needs of low- and moderate-income families. The governors know that we need to do more to ensure that the important increase in authority that over 375 House Members cosponsored last year really can reach as many qualified people as possible. Even after the passage of last year's legislation, over 100,000 qualified lower income homebuyers are not able to get an affordable MRB funded mortgage and over 70 percent of non-metropolitan counties across the country will be inhibited in full use of the Housing Credit program. For those of you that cosponsored those bills last year, and those of my colleagues who are new to the Congress, we hope you will join our bipartisan effort to see that these important provisions are enacted as part of tax legislation this year.

Mr. HOUGHTON

Mr. HOUGHTON. Mr. Speaker, I wish this were a little more evenly balanced in terms of a bipartisan approach, but evidently we are dealing with things which have been triggered by the White House, and we have to follow that route. Look, there are certain things about the Republican bill that I do not particularly like. It is a very uncertain future. Who knows what is going to happen in 10 years? Also, there are some things in terms of child credits and in terms of a whole variety of things such as alternative minimum taxes that maybe should be considered, but there are certain things we do know. We know we are dealing with a huge surplus, a gargantuan surplus; and irrespective of what happens here in terms of the economy, we have a lot of area to play with. And it seems to me that what we want to do is to stretch and give as much as possible back to the people, where this money came from. I used to be in business, and if one said to the stockholders and the employers in the business, look, we have been losing money for 30 years, which is exactly what the Federal Government has done, and now we are beginning to make a little bit, and what we want to do is to thank you for holding with us and we want to give you a dividend increase, we want to give you a salary increase; we are going to pay back our debts, but we are not going to pay them back all at once without taking care of you, we are going to do it in a balanced way. It seems to me that this is the whole premise of the Republican budget, and I support it.

Mr. HOUGHTON

Mr. HOUGHTON. Mr. Speaker, I am pleased to join my colleague from Massachusetts, Mr. Neal, together with a number of our colleagues in introducing our bill, ``The Life Insurance Tax Simplification Act of 2001.'' The bill repeals two sections of the Internal Revenue Code which no longer serve valid tax policy goals. Except for the effective date, the bill is identical to the one we introduced in the 106th Congress Congress has taken a major step forward in rewriting the regulatory structure of the financial services industry in the United States. This realignment is already having a positive impact on the way life insurance companies serve their customers, conduct their operations and merge their businesses to achieve greater market efficiencies. Unfortunately, the tax code contains several provisions which no longer represent valid tax policy goals, and in fact are carry-overs from the old tax and regulatory regimes that separated the life insurance industry from the rest of the financial world and differentiated between the stock and mutual segments of the life insurance industry. Today, the lines of competition are not between the stock and mutual segments of the life insurance industry. Rather, life insurers must compete in an aggressive, fast moving global financial services marketplace contrary to the premises underlying these old, outmoded tax rules. In 1984 Congress enacted Section 809, which imposed an additional tax on mutual life insurers to guarantee that stock life insurers would not be competitively disadvantaged by what was then thought to be the dominant segment of the industry. Section 809 operates by taxing some of the dividends that mutual life insurers pay to their policyholders. When Section 809 was enacted, mutual life insurers held more than half the assets of U.S. life insurance companies. It is estimated that within a few years, life insurers operating as mutual companies are expected to constitute less than ten percent of the industry. The tax is based on a bizarre formula under which the tax of each mutual life insurer increases if the earnings of its large stock company competitors rise--even when a mutual company's earnings fall. The provision has been criticized by the Treasury Department and others as fundamentally flawed in concept. The original rationale behind the enactment of Section 809 no longer exists. Accordingly, the bill would repeal Section 809. Section 815 was added to the Code as part of the 1959 changes to the life insurance companies tax structure. Before 1959, life insurance companies were taxed only on their investment income. Underwriting (premium) income was not taxed, and underwriting expenses were not deductible. The change provided that all life insurance companies paid tax on investment income not set aside for policyholders and on one- half of their underwriting income. The other half of underwriting income for stock companies was not taxed unless it was distributed to shareholders (so-called ``policyholders surplus account or PSA''). The 1959 tax structure sought to tax the proper amount of income of stock and mutual companies alike and the PSA mechanism helped implement that goal. In 1984, Congress rewrote the rules again. Both stock and mutual companies were subjected to tax on all their investment and underwriting income. In this context, dividend deductions for mutuals were limited under Section 809, and the tax exclusion for a portion of stock company's underwriting income was discontinued. Congress made a decision not to tax the amount excluded between 1959 and 1984. Rather the amounts are only taxed if one of the specific events described in the current Section 815 occurs (principally dissolution of the company). The bill would repeal the obsolete Section 815 provision. Since 1984, the Federal government has collected relative small amounts of revenue with respect to PSAs as companies avoid the specific events which trigger PSAs taxation. There is not a ``fund'', ``reserve,'' ``provision'' or ``allocation'' on a life insurance company's books to pay PSA taxes because, under generally accepted accounting principles, neither the government nor taxpayers have ever believed that significant amounts of tax would be triggered. Nevertheless, the continued existence of the PSAs does result in a burden on the companies in today's changing financial services world--a burden based on bookkeeping entries made from sixteen to forty-one years ago to comply with Congress' then vision of how segments of the life insurance industry should be taxed. In addition, the prior Administration made proposals to require that PSA balances be taxed, even though no triggering event has taken place--thus creating additional uncertainty. The repeal of these two provisions, Sections 809 and 815, would provide certainty, less complexity, and remove two provisions from the Internal Revenue Code, which no longer serve a valid tax policy goal in the life insurance tax structure of the Internal Revenue Code. We urge our colleagues to join us in cosponsoring this legislation.

Mr. HOUGHTON

Mr. HOUGHTON. I yield to the gentleman from Florida. MR. YOUNG of Florida. Mr. Speaker, the issues are serious, and the issues are dealing with numbers that are very high in one area to some members, very low with another group of Members, also with the President, but some of the issues as I mentioned are not even related to appropriations. The gentleman will recall we had the argument over the ergonomics issue, and then we had quite an argument over the question of granting blanket amnesty to those who are here in the United States illegally. Those are two big issues that are not appropriations issues, but are being considered using the appropriations bill as a vehicle for their enactment. So things like that are causing us problems. Can we get together? I do not see why we cannot get together. What needs to happen is everybody needs to realize that no one is going to get their way exactly the way they wanted it. I am chairman of the Committee on Appropriations, but I cannot get my way all the time, and chairmen of our subcommittees cannot get their way all the time, but what we all have to recognize is there has to be a consensus. We are almost evenly divided in this House and in the other body, so it is time to recognize each side has to give a little. If you want to get something, you have to give something, and that is what it is going to take to conclude our business.

Mr. HOUGHTON. Mr. Speaker, I have not been in negotiations in the White House. I am not a Member of the Republican leadership, but I am a concerned citizen, and I also am a Member of a bipartisan group which met with the gentleman from Indiana (Mr. Roemer) yesterday and Members from both sides to try to find a way to bring our two parties together. We have gone over and over the issues. We have gone over and over the dollar amounts. We have had things on the table and off the table and back on the table, and it just seems to me that we do a job in the amount of time we allow ourselves to do it in, and we are about at that point. Mr. Speaker, I would like to ask the gentleman from Florida (Mr. Young), chairman of the Committee on Appropriations, because I think he has done an extraordinary job, are the issues such that we can, within a reasonable period of time, I say 24, 48 hours, solve these things and vote on them?

Mr. HOUGHTON. Mr. Speaker, I thank the gentleman for his comments.

Mr. HOUGHTON

Mr. HOUGHTON. Mr. Speaker, today I congratulate Nick Rowe, a star soccer player from the 31st. On September 12 of this year, Nick, the varsity goalkeeper for the Moravia High School Soccer team, broke a 21-year-old national record for accumulating 1,130 saves. The previous record of 936 saves was set by Brian Siebrasse of Malta, Illinois in 1979--three years before Nick was even born. Nick was featured in the September 25th edition of Sports Illustrated, and on ESPN in celebration of his record-breaking performance. So, Mr. Speaker, I just wanted to join Nick's family, friends, and teammates in congratulating him on this outstanding achievement. We all wish him well on his future endeavors.

Mr. HOUGHTON

Mr. HOUGHTON. Mr. Speaker, I will never forget Sid Yates--ever. He loved the story of the Adams family. I could recite passages from the Adams Chronicles. He represented the finest this country has to offer. Politics is not just serving. It's serving well and with high integrity. That was Sid Yates. P.S.--He was lots of fun to be with!

Mr. HOUGHTON

Mr. HOUGHTON. Mr. Speaker, there are several of us that have remarks about Bill Archer, and I will begin. I hope Bill and Sharon Archer are watching this program, because I do not believe anybody has said so many nice words to him to his face. We always say things behind people's backs, and it is easier to say things in public many times than it is in private. I think we all have felt these things, but it is many times embarrassing to say them on a one- to-one basis. So, Bill, if you are listening, I do not want you to inhale all this stuff, but we really do believe it and want to express our appreciation and what you mean to us. It is always hard to say good-bye to somebody, particularly somebody for whom you have such respect. I am not a tax lawyer. I am far from it. And one of the great courses I have ever taken, when I came to this place, was from Bill Archer in terms of tax law. I do not consider myself a great tax expert now, but whatever I have learned, I have learned from Bill Archer in a very solid and sort of relaxed way trying to explain the intricacies. One of the things which I, as a sort of historian, have been interested in is his background, talking about institutional memory. Here is a fellow who was here when Wilbur Mills was here. Here was a fellow who was here when Russell Long was here. Those great titans of finance in our government gave him, obviously, a bedrock and an understanding of what the whole place was about in the thrust of the Committee on Ways and Means. I think all of us here who are on the Committee on Ways and Means are very humble about this. It is an extraordinarily important committee. One hundred percent of the revenues and 60 percent of the cost of the government goes through this committee. When one is involved in these sessions with Bill, one understands not only the functional parts but also the historic parts. He has always led that way, so tremendously. The gentleman from Florida (Mr. Shaw) was talking about welfare reform and was rather casual about it, I thought. Frankly, I think one of the most extraordinary pieces of legislation, I will say one of the top five pieces of legislation that I have seen since I have been here, is the welfare reform. That was Bill Archer and the gentleman from Florida (Mr. Shaw). The gentleman from Florida is very sort of modest about this whole thing. I think another thing is their concept, which never went anyplace, and it is too bad because it is a great concept, and it may someday, is the concept of the Social Security System. They had a plan to fix it, and there would be an element of pain but not as much if we did nothing at all. He was always on the forefront of things like that. One of the great things I think about Bill Archer is that he was never arrogant. Here was a man who had been in the minority for a long time and all of a sudden he was thrust in the position of chairman of the Committee on Ways and Means. Under those circumstances, after having been dying for years of not being able to be heard then suddenly being in the chairmanship, the way he conducted meetings, the way he was polite, the way he was respectful of people's opinions, both the people on the committee and also those people who were testifying, is really an example in statesmanship. There is something about this man that I think is important, particularly in the stressful days that we are going through. He never carried too heavy a pack. In other words, he always could sort of sense the humor and the perspective and the importance of this place and, as a result, was a great example to all of us. I can remember taking a trip, all of us have taken trips with Bill Archer, and on those congressional delegation trips many times we see a person in full flower, particularly when he was with his beloved wife, Sharon. Wonderful human beings. The type of people that, although I do not live in Texas, I would like to say, gee, I am so proud to have that person represent me. That was the type of person he was. Mr. Speaker, I yield now to the gentleman from Arizona (Mr. Hayworth).

Mr. HOUGHTON. Mr. Speaker, I yield to the gentleman from Ohio (Mr. Nussle).

Mr. HOUGHTON. Mr. Speaker, I yield to the gentleman from Pennsylvania (Mr. English).