I 

108TH CONGRESS 

1ST SESSION H. R. 2902

To establish the Corporate Subsidy Reform Commission to review inequitable 

Federal subsidies and make recommendations for termination, modification, or retention of such subsidies, and to state the sense of the Congress 

that the Congress should promptly consider legislation that would make 

the changes in law necessary to implement the recommendations. 

IN THE HOUSE OF REPRESENTATIVES 

JULY 25, 2003

Mr. SMITH of Washington (for himself, Mr. SHAYS, Mr. CASE, Mr. TIERNEY, 

Mr. CARTER, Mr. DUNCAN, and Mr. EMANUEL) introduced the following 

bill; which was referred to the Committee on Government Reform, and 

in addition to the Committee on Ways and Means, for a period to be subsequently determined by the Speaker, in each case for consideration of 

such provisions as fall within the jurisdiction of the committee concerned 

A BILL

To establish the Corporate Subsidy Reform Commission to 

review inequitable Federal subsidies and make recommendations for termination, modification, or retention 

of such subsidies, and to state the sense of the Congress 

that the Congress should promptly consider legislation 

that would make the changes in law necessary to implement the recommendations.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,
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1 SECTION 1. SHORT TITLE. 

2 This Act may be cited as the ‘‘Corporate Subsidy Re3 form Commission Act of 2003’’. 

4 SEC. 2. FINDINGS. 

5 The Congress finds that—

6 (1) Federal subsidies, including tax advantages, 

7 which may have been enacted with a valid purpose 

8 for specific industries or industry segments can—

9 (A) fall subject to abuse, causing unantici10 pated and unjustified windfalls to some indus11 tries and industry segments; or 

12 (B) become obsolete, anticompetitive, or no 

13 longer in the public interest, making such sub14 sidies unnecessary or undesired; 

15 (2) it is unfair to force the United States tax16 payer to support unnecessary subsidies, including 

17 tax advantages, that do not provide a substantial 

18 public benefit or serve the public interest; 

19 (3) the Congress has been unable to evaluate 

20 methodically those Federal subsidies that are unfair 

21 and unnecessary and require reform or elimination; 

22 and 

23 (4) a Commission to advise the Congress is es24 sential to a comprehensive review of such unfair cor25 porate subsidies and to the reform or elimination of 

26 such subsidies. 
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1 SEC. 3. PURPOSE. 

2 The purpose of this Act is to establish a fair and de3 liberative process that will result in the timely identifica4 tion, review, and reform or elimination of unnecessary and 

5 inequitable subsidies, including tax advantages, provided 

6 by the Federal Government to entities or industries en7 gaged in profit-making enterprises. 

8 SEC. 4. DEFINITION. 

9 For purposes of this Act, the term ‘‘inequitable Fed10 eral subsidy’’—

11 (1) except as provided in paragraph (2), means 

12 a payment, benefit, service, or tax advantage that—

13 (A) is provided by the Federal Government 

14 to any corporation, partnership, joint venture, 

15 association, or business trust other than—

16 (i) a nonprofit organization described 

17 under section 501(c)(3) of the Internal 

18 Revenue Code of 1986 that is exempt from 

19 taxation under section 501(a) of the Inter20 nal Revenue Code of 1986; or 

21 (ii) a State or local government or In22 dian Tribe; and 

23 (B) provides an unfair competitive advan24 tage or financial windfall; and 

25 (2) does not include a payment, benefit, service, 

26 or tax advantage that—
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1 (A) is awarded for the purposes of re2 search and development in the broad public in3 terest on the basis of a peer reviewed or other 

4 open, competitive, merit-based procedure; and 

5 (B) primarily benefits public health, safety, 

6 homeland security, the environment, or edu7 cation. 

8 SEC. 5. THE COMMISSION. 

9 (a) ESTABLISHMENT.—There is established an inde10 pendent commission to be known as the ‘‘Corporate Sub11 sidy Reform Commission’’ (hereafter in this Act referred 

12 to as the ‘‘Commission’’). 

13 (b) DUTIES.—The Commission shall—

14 (1) examine the programs and laws of the Fed15 eral Government and identify such programs and 

16 laws that provide inequitable Federal subsidies; 

17 (2) review inequitable Federal subsidies; and 

18 (3) submit the report required under section 

19 6(c) to the Congress, making recommendations re20 garding the termination, modification, or retention 

21 of inequitable Federal subsidies. 

22 (c) LIMITATIONS.—

23 (1) CREATION OF NEW PROGRAMS OR TAXES.—

24 This Act is not intended to result in the creation of 

25 new programs or taxes. The Commission established
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1 in this section shall limit its activities to reviewing 

2 existing programs or laws with the goal of ensuring 

3 fairness and equity in the operation and application 

4 thereof. 

5 (2) ELIMINATION OF AGENCIES AND DEPART6 MENTS.—The Commission—

7 (A) shall limit its recommendations to the 

8 termination or reform of payments, benefits, 

9 services, or tax advantages; and 

10 (B) shall not recommend the termination 

11 of any Federal agency or department. 

12 (d) ADVISORY COMMITTEE.—The Commission shall 

13 be considered an advisory committee within the meaning 

14 of that term in the Federal Advisory Committee Act (5 

15 U.S.C. App.). 

16 (e) APPOINTMENT.—

17 (1) MEMBERS.—The members of the Commis18 sion—

19 (A) shall be appointed for the life of the 

20 Commission; and 

21 (B) shall be composed of 8 members, of 

22 whom—

23 (i) 2 shall be appointed by the Speak24 er of the House of Representatives; 
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1 (ii) 2 shall be appointed by the minor2 ity leader of the House of Representatives; 

3 (iii) 2 shall be appointed by the ma4 jority leader of the Senate, one of whom 

5 shall be designated by the majority leader 

6 to serve as a co-chair; and 

7 (iv) 2 shall be appointed by the minor8 ity leader of the Senate, one of whom shall 

9 be designated by the minority leader to 

10 serve as a co-chair. 

11 (2) CONSULTATION REQUIRED.—The Speaker 

12 of the House of Representatives, the minority leader 

13 of the House of Representatives, the majority leader 

14 of the Senate, and the minority leader of the Senate 

15 shall consult among themselves prior to the appoint16 ment of the members of the Commission in order to 

17 achieve, to the maximum extent possible, fair and 

18 equitable representation of various points of view 

19 with respect to the matters to be studied by the 

20 Commission under subsection (b). 

21 (3) BACKGROUND.—The members shall rep22 resent a broad array of expertise covering, to the ex23 tent practical, all subject matter, programs, and 

24 laws the Commission is likely to review. 

25 (f) MEETINGS.—
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1 (1) INITIAL MEETING.—No later than April 1, 

2 2004, the Commission shall conduct its first meet3 ing. 

4 (2) OPEN MEETINGS.—Each meeting of the 

5 Commission shall be open to the public, except that 

6 in cases in which classified information, trade se7 crets, or personnel matters are discussed, the co8 chairs may close the meeting. All proceedings, infor9 mation, and deliberations of the Commission shall be 

10 available, upon request, to the Chairman and rank11 ing minority member of the relevant Committee of 

12 the Congress having jurisdiction to report legislation 

13 regarding the subject matter thereof. 

14 (g) VACANCIES.—A vacancy on the Commission shall 

15 be filled in the same manner as the original appointment. 

16 (h) PAY AND TRAVEL EXPENSES.—

17 (1) PAY.—Notwithstanding section 7 of the 

18 Federal Advisory Committee Act (5 App. U.S.C.), 

19 each member of the Commission, other than the co20 chairs, shall be paid at a rate equal to the daily 

21 equivalent of the minimum annual rate of basic pay 

22 for level IV of the Executive Schedule under section 

23 5315 of title 5, United States Code, for each day 

24 (including travel time) during which the member is 
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1 engaged in the actual performance of duties vested 

2 in the Commission. 

3 (2) CHAIRMEN.—Notwithstanding section 7 of 

4 the Federal Advisory Committee Act (5 App. 

5 U.S.C.), the co-chairs shall be paid for each day re6 ferred to in paragraph (1) at a rate equal to the 

7 daily payment of the minimum annual rate of basic 

8 pay payable for level III of the Executive Schedule 

9 under section 5314 of title 5, United States Code. 

10 (3) TRAVEL EXPENSES.—Members of the Com11 mission shall receive travel expenses, including per 

12 diem in lieu of subsistence, in accordance with sec13 tion 5702 and 5703 of title 5, United States Code. 

14 (i) DIRECTOR OF STAFF.—

15 (1) QUALIFICATIONS.—The co-chairs shall ap16 point as Director an individual who has not, during 

17 the 12 months preceding the date of such appoint18 ment, served in any of the entities or industries that 

19 the Commission intends to review. 

20 (2) PAY.—Notwithstanding section 7 of the 

21 Federal Advisory Committee Act (5 App. U.S.C.), 

22 the Director shall be paid at the rate of basic pay 

23 payable for level IV of the Executive Schedule under 

24 section 5315 of title 5, United States Code.
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1 (3) REPORTS.—The Director shall submit peri2 odic reports on administrative and personnel matters 

3 to the co-chairs of the Commission and the Chair4 man and ranking minority member of the Committee 

5 on Governmental Affairs of the Senate and the Com6 mittee on Government Reform of the House of Rep7 resentatives. 

8 (j) STAFF.—

9 (1) ADDITIONAL PERSONNEL.—Subject to para10 graphs (2) and (4), the Director, with the approval 

11 of the Commission, may appoint and fix the pay of 

12 additional personnel. 

13 (2) APPOINTMENTS.—The Director may make 

14 such appointments without regard to the provisions 

15 of title 5, United States Code, governing appoint16 ments in the competitive service, and any personnel 

17 so appointed may be paid without regard to the pro18 visions of chapter 51 and subchapter III of chapter 

19 53 of that title relating to classification and General 

20 Schedule pay rates. 

21 (3) LEGAL STAFF.—The Director shall appoint 

22 under paragraph (2) such professional legal staff as 

23 are necessary for the performance of the functions 

24 of the Commission. 
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1 (4) DETAILEES.—Upon the request of the Di2 rector, the head of any Federal department or agen3 cy may detail any of the personnel of that depart4 ment or agency to the Commission to assist the 

5 Commission in accordance with an agreement en6 tered into with the Commission. 

7 (5) RESTRICTIONS ON PERSONNEL AND

8 DETAILEES.—The following restrictions shall apply 

9 to personnel and detailees of the Commission: 

10 (A) PERSONNEL.—No more than one-third 

11 of the personnel detailed to the Commission 

12 may be on detail from Federal agencies that 

13 deal directly or indirectly with the Federal sub14 sidies the Commission intends to review. 

15 (B) ANALYSTS.—No more than one-fifth of 

16 the professional analysts of the Commission 

17 may be persons detailed from a Federal agency 

18 that deals directly or indirectly with the Federal 

19 subsidies the Commission intends to review. 

20 (C) LEAD ANALYST.—No person detailed 

21 from a Federal agency to the Commission may 

22 be assigned as the lead professional analyst 

23 with respect to an entity or industry the Com24 mission intends to review if the person has been 

25 involved in regulatory or policy-making deci-
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1 sions affecting any such entity or industry in 

2 the 12 months preceding such assignment. 

3 (D) DETAILEE.—A person may not be de4 tailed from a Federal agency to the Commission 

5 if, within 12 months before the detail is to 

6 begin, that person participated personally and 

7 substantially in any matter within that par8 ticular agency concerning the preparation of 

9 recommendations under this Act. 

10 (E) FEDERAL OFFICER OR EMPLOYEE.—

11 No officer or employee of a Federal agency 

12 may—

13 (i) prepare any report concerning the 

14 effectiveness, fitness, or efficiency of the 

15 performance on the staff of the Commis16 sion of any person detailed from a Federal 

17 agency to that staff; 

18 (ii) review the preparation of such re19 port; or 

20 (iii) approve or disapprove such a re21 port. 

22 (F) LIMITATION ON STAFF SIZE.—(i) Sub23 ject to clause (ii), there may not be more than 

24 25 persons (including any detailees) on the 

25 staff at any time. 
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1 (ii) The Commission may increase the 

2 member of its personnel in excess of the limita3 tion under clause (i), 15 days after submitting 

4 notification of such increase to the Committee 

5 on Governmental Affairs of the Senate and the 

6 Committee on Government Reform of the 

7 House of Representatives. 

8 (G) LIMITATION ON FEDERAL OFFICER.—

9 No member of a Federal agency and no em10 ployee of a Federal agency may serve as a 

11 member of the Commission or as a paid mem12 ber of its staff. 

13 (6) ASSISTANCE.—

14 (A) IN GENERAL.—The Comptroller Gen15 eral of the United States may provide assist16 ance, including the detailing of employees, to 

17 the Commission in accordance with an agree18 ment entered into with the Commission. 

19 (B) CONSULTATION.—The Commission 

20 and the Comptroller General of the United 

21 States shall consult with the Committee on 

22 Governmental Affairs of the Senate and the 

23 Committee on Government Reform of the 

24 House of Representatives on the agreement re-
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1 ferred to under subparagraph (A) before enter2 ing into such agreement. 

3 (k) OTHER AUTHORITY.—

4 (1) EXPERTS AND CONSULTANTS.—The Com5 mission may procure by contract, to the extent funds 

6 are available, the temporary or intermittent services 

7 of experts or consultants pursuant to section 3109 

8 of title 5, United States Code. 

9 (2) LEASING.—The Commission may lease 

10 space and acquire personal property to the extent 

11 that funds are available. 

12 (l) FUNDING.—

13 (1) COMMISSION.—There are authorized to be 

14 appropriated to the Commission such funds as are 

15 necessary to carry out its duties under this Act. 

16 (2) COMPTROLLER GENERAL.—There are au17 thorized to be appropriated to the Comptroller Gen18 eral of the United States such funds as are nec19 essary to carry out the Comptroller General’s duties 

20 under subsection (k)(5) and section 6(b)(5). 

21 (m) TERMINATION.—The Commission shall termi22 nate on January 1, 2006. 

23 SEC. 6. PROCEDURE FOR MAKING RECOMMENDATIONS TO 

24 TERMINATE CORPORATE SUBSIDIES. 

25 (a) AGENCY PLAN.—
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1 (1) IN GENERAL.—The head of each Federal 

2 department or agency shall include in the documents 

3 submitted in support of the budget of the agency for 

4 fiscal year 2005 a list identifying all programs and 

5 laws administered by that department or agency 

6 that the head of the department or agency deter7 mines provide inequitable Federal subsidies.

8 (2) CONTENTS.—Such list shall include—

9 (A) a detailed description of each program 

10 or law in question; 

11 (B) a statement identifying and detailing 

12 the extent to which each payment, benefit, serv13 ice, or tax advantage under such program or 

14 law is an inequitable Federal subsidy; 

15 (C) a statement summarizing the legisla16 tive history and purpose of such payment, ben17 efit, service, or tax advantage, and the laws or 

18 policies directly or indirectly giving rise to the 

19 need for such programs or law; and 

20 (D) a recommendation to the Commission 

21 regarding the termination, modification, or re22 tention of each inequitable Federal subsidy 

23 identified in the list.

24 (b) REVIEW BY THE COMMISSION.—
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1 (1) IN GENERAL.—At any time after the sub2 mission of the budget documents to the Congress, 

3 the Commission shall conduct public hearings on the 

4 termination, modification, or retention of inequitable 

5 Federal subsidies, including the recommendations in6 cluded in the lists required under subsection (a). 

7 (2) TESTIMONY UNDER OATH.—All testimony 

8 before the Commission at a public hearing conducted 

9 under this paragraph shall be presented under oath. 

10 (c) REPORT AND RECOMMENDATIONS OF COMMIS11 SION.—

12 (1) REPORT TO CONGRESS.—

13 (A) REQUIREMENT.—No later than March 

14 31, 2005, the Commission shall submit a report 

15 to the Congress containing the Commission’s 

16 findings and recommendations for termination, 

17 modification, or retention of each of the inequi18 table Federal subsidies reviewed by the Com19 mission. 

20 (B) CONTENTS.—Such findings and rec21 ommendations shall specify—

22 (i) all actions, circumstances, and con23 siderations relating to or bearing upon the 

24 recommendations; and 
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1 (ii) to the maximum extent prac2 ticable, the estimated effect of the rec3 ommendations upon the policies, laws, and

4 programs directly or indirectly affected by 

5 the recommendations. 

6 (C) SUPERMAJORITY REQUIREMENT.—The 

7 Commission may not include a recommendation 

8 in the report unless inclusion of the rec9 ommendation is approved by at least 6 mem10 bers of the Commission. 

11 (2) INFORMATION AND JUSTIFICATIONS.—The 

12 Commission shall include in its report information 

13 specifying—

14 (A) the reasons and justifications for the 

15 recommendations of the Commission; 

16 (B) to the maximum extent practicable, 

17 the estimated fiscal, economic, and budgetary 

18 impact of accepting its recommendations; 

19 (C) the amount of the projected savings re20 sulting from each it its recommendations; 

21 (D) all actions, circumstances, and consid22 erations relating to or bearing upon the rec23 ommendations and to the maximum extent 

24 practicable, the estimated effect of the rec25 ommendations upon the policies, laws and pro-
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1 grams directly or indirectly affected by the rec2 ommendations; and 

3 (E) the specific changes in Federal stat4 utes necessary to implement the recommenda5 tions, including citation of the relevant provi6 sions of existing law.

7 (3) SUBMISSION TO CONGRESS.—The report 

8 submitted to the Congress under this subsection 

9 shall be submitted to the Senate and the House of 

10 Representatives on the same day, and shall be deliv11 ered to the Secretary of the Senate if the Senate is 

12 not in session, and to the Clerk of the House of the 

13 Representatives if the House is not in session. 

14 (4) FEDERAL REGISTER.—The report sub15 mitted under this subsection shall be printed in the 

16 first issue of the Federal Register after such submis17 sion. 

18 (5) CHANGES IN AGENCY OR DEPARTMENT

19 RECOMMENDATIONS.—

20 (A) IN GENERAL.—Subject to the deadline 

21 in paragraph (1) and to subparagraphs (B) and 

22 (C) of this paragraph, in making its rec23 ommendations, the Commission may make 

24 changes in any of the recommendations made 

25 by a department or agency if the Commission 
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1 determines that such department or agency, in 

2 treating any matter as an inequitable Federal 

3 subsidy, deviated substantially from the provi4 sions of section 4. 

5 (B) LIMITATION.—The Commission may 

6 make a change in the recommendations made 

7 by a department or agency, only if the Commis8 sion—

9 (i) makes the determination required 

10 under subparagraph (B); and 

11 (ii) conducts a public hearing on the 

12 Commission’s proposed changes. 

13 (C) APPLICATION OF LIMITATION.—Sub14 paragraph (B) shall apply only to a change by 

15 the Commission in a department or agency rec16 ommendation that would—

17 (i) add or delete a payment, benefit, 

18 service, or tax advantage to or from, re19 spectively, the list recommended for termi20 nation; 

21 (ii) add or delete a payment, benefit, 

22 service, or tax advantage to or from, re23 spectively, the list recommended for modi24 fication; or 
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1 (iii) increase or decrease the extent of 

2 a recommendation to modify a payment, 

3 benefit, service, or tax advantage included 

4 in a department’s or agency’s rec5 ommendation. 

6 (D) JUSTIFICATION.—The Commission 

7 shall explain and justify in the report submitted 

8 to the Congress under this subsection any rec9 ommendation made by the Commission that is 

10 different from a recommendation made by an 

11 agency under subsection (a). 

12 (6) PROVISION OF INFORMATION TO MEMBERS

13 OF CONGRESS.—After March 31, 2005, the Commis14 sion shall, upon request, promptly provide to any 

15 Member of Congress the information used by the 

16 Commission in making its recommendations.

17 (7) COMPTROLLER GENERAL.—The Comp18 troller General of the United States shall—

19 (A) assist the Commission, to the extent 

20 requested, in the Commission’s review and anal21 ysis of the lists, statements, and recommenda22 tions made by departments and agencies under 

23 subsection (a); and 

24 (B) no later than 60 days after April 1, 

25 2004, or the public release of the President’s 
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1 budget documents in 2004, whichever is earlier, 

2 submit to the Congress and to the Commission 

3 a report containing a detailed analysis of the 

4 list, statements, and recommendations of each 

5 department or agency. 

6 SEC. 7. CONGRESSIONAL ACTION ON COMMISSION REC7 OMMENDATIONS. 

8 It is the sense of the Congress that, following submis9 sion of the report of the Corporate Subsidy Reform Com10 mission under section 6, the House of Representatives and 

11 the Senate should promptly consider legislation that would 

12 enact changes in Federal statutes necessary to implement 

13 the recommendations of the Commission.

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