JOURNAL OF THE

574

T56.14 APRIL 5

‘‘(2) any other interest in a trust which the

individual is treated as holding under the

rules of section 679(e) (determined by treating such section as applying to foreign and

domestic trusts), and

‘‘(3) any other interest in property specified by the Secretary as necessary or appropriate to carry out the purposes of this section.

‘‘(d) EXCEPTIONS.—The following property

shall not be treated as sold for purposes of

this section:

‘‘(1) UNITED STATES REAL PROPERTY INTERESTS.—Any United States real property interest (as defined in section 897(c)(1)), other

than stock of a United States real property

holding corporation which does not, on the

date the individual relinquishes his citizenship or ceases to be subject to tax as a resident, meet the requirements of section

897(c)(2).

‘‘(2) INTEREST IN CERTAIN RETIREMENT

PLANS.—

‘‘(A) IN GENERAL.—Any interest in a qualified retirement plan (as defined in section

4974(d)), other than any interest attributable

to contributions which are in excess of any

limitation or which violate any condition for

tax-favored treatment.

‘‘(B) FOREIGN PENSION PLANS.—

‘‘(i) IN GENERAL.—Under regulations prescribed by the Secretary, interests in foreign

pension plans or similar retirement arrangements or programs.

‘‘(ii) LIMITATION.—The value of property

which is treated as not sold by reason of this

subparagraph shall not exceed $500,000.

‘‘(e) DEFINITIONS.—For purposes of this

section—

‘‘(1) RELINQUISHMENT OF CITIZENSHIP.—A

citizen shall be treated as relinquishing his

United States citizenship on the date the

United States Department of State issues to

the individual a certificate of loss of nationality or on the date a court of the United

States cancels a naturalized citizen’s certificate of naturalization.

‘‘(2) LONG-TERM RESIDENT.—

‘‘(A) IN GENERAL.—The term ‘long-term

resident’ means any individual (other than a

citizen of the United States) who is a lawful

permanent resident of the United States and,

as a result of such status, has been subject to

tax as a resident in at least 10 taxable years

during the period of 15 taxable years ending

with the taxable year during which the sale

under subsection (a) is treated as occurring.

‘‘(B) SPECIAL RULE.—For purposes of subparagraph (A), there shall not be taken into

account—

‘‘(i) any taxable year during which any

prior sale is treated under subsection (a) as

occurring, or

‘‘(ii) any taxable year prior to the taxable

year referred to in clause (i).

‘‘(f) TERMINATION OF DEFERRALS, ETC.—On

the date any property held by an individual

is treated as sold under subsection (a)—

‘‘(1) any period deferring recognition of income or gain shall terminate, and

‘‘(2) any extension of time for payment of

tax shall cease to apply and the unpaid portion of such tax shall be due and payable.

‘‘(g) ELECTION BY EXPATRIATING RESIDENTS.—Solely for purposes of determining

gain under subsection (a)—

‘‘(1) IN GENERAL.—At the election of a resident not a citizen of the United States,

property—

‘‘(A) which was held by such resident on

the date the individual first became a resident of the United States during the period

of long-term residency to which the treatment under subsection (a) relates, and

‘‘(B) which is treated as sold under subsection (a),

shall be treated as having a basis on such

date of not less than the fair market value of

such property on such date.

‘‘(2) ELECTION.—Such an election shall

apply to all property described in paragraph

(1), and, once made, shall be irrevocable.

‘‘(h) DEFERRAL OF TAX ON CLOSELY HELD

BUSINESS INTERESTS.—The District Director

may enter into an agreement with any individual which permits such individual to

defer payment for not more than 5 years of

any tax imposed by subsection (a) by reason

of holding any interest in a closely held business (as defined in section 6166(b)) other than

a United States real property interest described in subsection (d)(1).

‘‘(i) REGULATIONS.—The Secretary shall

prescribe such regulations as may be necessary or appropriate to carry out the purposes of this section.

‘‘(j) CROSS REFERENCE.—

‘‘For termination of United States citizenship

for tax purposes, see section

7701(a)(47).’’

(b) DEFINITION OF TERMINATION OF UNITED

STATES CITIZENSHIP.—Section 7701(a) of such

Code is amended by adding at the end the

following new paragraph:

‘‘(47) TERMINATION OF UNITED STATES CITIZENSHIP.—An individual shall not cease to be

treated as a United States citizen before the

date on which the individual’s citizenship is

treated as relinquished under section

877A(e)(1).’’

(c) CONFORMING AMENDMENTS.—

(1) Section 877 of such Code is amended by

adding at the end of the following new subsection:

‘‘(f) TERMINATION.—This section shall not

apply to any individual who is subject to the

provisions of section 877A.’’

(2) Paragraph (10) of section 7701(b) of such

Code is amended by adding at the end the

following new sentence: ‘‘This paragraph

shall not apply to any individual who is subject to the provisions of section 877A.’’

(d) CLERICAL AMENDMENT.—The table of

sections for subpart A of part II of subchapter N of chapter 1 of such Code is

amended by inserting after the item relating

to section 877 the following new item:

‘‘Sec. 877A. Tax responsibilities of expatriation.’’

(e) EFFECTIVE DATE.—The amendments

made by this section shall apply to—

(1) United States citizens who relinquish

(within the meaning of section 877A(e)(1) of

the Internal Revenue Code of 1986, as added

by this section) United States citizenship on

or after October 1, 1996, and

(2) Long-term residents (as defined in such

section) who cease to be subject to tax as

residents of the United States on or after

such date.

At the end of the bill insert the following

new title:

TITLE VII—HOUSE BUDGET COMMITTEE

TO REPORT NEW DISCRETIONARY

SPENDING LIMITS

SEC. 701. HOUSE BUDGET COMMITTEE TO REPORT NEW DISCRETIONARY SPENDING LIMITS.

Not later than 20 days after the date of the

enactment of this Act, the Committee on the

Budget of the House of Representatives shall

report legislation which provides general discretionary spending limits as follows:

(1) With respect to fiscal year 1996:

$514,998,000,000 in new budget authority and

$547,245,000,000 in outlays.

(2) With respect to fiscal year 1997:

$521,281,000,000 in new budget authority and

$542,111,000,000 in outlays.

(3) With respect to fiscal year 1998:

$528,024,000,000 in new budget authority and

$544,594,000,000 in outlays.

(4) With respect to fiscal year 1999:

$527,051,000,000 in new budget authority and

$543,130,000,000 in outlays.

(5) With respect to fiscal year 2000:

$525,091,000,000 in new budget authority and

$541,082,000,000 in outlays.

Make necessary conforming changes in

title and section designations and in the tables of contents.

By unanimous consent, the previous

question was ordered on the motion to

recommit with instructions.

The question being put, viva voce,

Will the House recommit said bill

with instructions?

The SPEAKER pro tempore, Mr.

DREIER, announced that the nays had

it.

Mr. GEPHARDT demanded a recorded vote on agreeing to said motion,

which demand was supported by onefifth of a quorum, so a recorded vote

was ordered.

The vote was taken by electronic device.

It was decided in the Yeas ....... 168 ! negative ....................... Nays ...... 265

T56.14 [Roll No. 293]

AYES—168

Abercrombie

Ackerman

Andrews

Baldacci

Barcia

Barrett (WI)

Beilenson

Bentsen

Berman

Bevill

Bishop

Bonior

Borski

Boucher

Browder

Brown (FL)

Brown (OH)

Bryant (TX)

Chapman

Clay

Clayton

Clement

Clyburn

Coleman

Collins (IL)

Collins (MI)

Condit

Conyers

Costello

Cramer

Danner

de la Garza

DeLauro

Dellums

Deutsch

Dicks

Dingell

Dixon

Doggett

Doyle

Durbin

Edwards

Engel

Eshoo

Evans

Farr

Fattah

Fazio

Fields (LA)

Filner

Flake

Foglietta

Ford

Frank (MA)

Frost

Furse

Ganske

Gejdenson

Gephardt

Gonzalez

Gordon

Green

Gutierrez

Harman

Hastings (FL)

Hayes

Hefner

Hilliard

Hinchey

Holden

Jackson-Lee

Jacobs

Jefferson

Johnson (SD)

Johnson, E. B.

Johnston

Kennedy (MA)

Kennedy (RI)

Kennelly

Kildee

LaFalce

Lantos

Levin

Lewis (GA)

Lincoln

Lofgren

Lowey

Luther

Maloney

Manton

Markey

Martinez

Mascara

Matsui

McCarthy

McDermott

McHale

McKinney

Meehan

Meek

Menendez

Mfume

Miller (CA)

Mineta

Minge

Mink

Moakley

Moran

Nadler

Neal

Oberstar

Obey

Olver

Ortiz

Owens

Pallone

Pastor

Payne (NJ)

Pelosi

Peterson (MN)

Pomeroy

Poshard

Rahall

Rangel

Reed

Richardson

Rivers

Rose

Roybal-Allard

Rush

Sabo

Sanders

Sawyer

Schroeder

Schumer

Scott

Serrano

Skelton

Slaughter

Spratt

Stokes

Studds

Stupak

Tanner

Taylor (MS)

Tejeda

Thompson

Thornton

Thurman

Torres

Torricelli

Towns

Traficant

Tucker

Velazquez

Vento

Visclosky

Volkmer

Ward

Waters

Watt (NC)

Waxman

Williams

Wise

Woolsey

Wyden

Wynn

Yates

NOES—265

Allard

Archer

Armey

Bachus

Baesler

Baker (CA)

Baker (LA)

Ballenger

Barr

Barrett (NE)

Bartlett

Barton

Bass

Bateman

Becerra

Bereuter

Bilbray

Bilirakis

Bliley

Blute

Boehlert

Boehner

Bonilla

Bono

Brewster

Brown (CA)

Brownback

Bryant (TN)

Bunn

Bunning

Burr

Burton

Buyer
HOUSE OF REPRESENTATIVES

575

1995 T56.15

Callahan

Calvert

Camp

Canady

Cardin

Castle

Chabot

Chambliss

Chenoweth

Christensen

Chrysler

Clinger

Coble

Coburn

Collins (GA)

Combest

Cooley

Cox

Coyne

Crane

Crapo

Cremeans

Cubin

Cunningham

Davis

Deal

DeFazio

DeLay

Diaz-Balart

Dickey

Dooley

Doolittle

Dornan

Dreier

Duncan

Dunn

Ehlers

Ehrlich

Emerson

English

Ensign

Everett

Ewing

Fawell

Fields (TX)

Flanagan

Foley

Forbes

Fowler

Fox

Franks (CT)

Franks (NJ)

Frelinghuysen

Frisa

Funderburk

Gallegly

Gekas

Geren

Gibbons

Gilchrest

Gillmor

Gilman

Goodlatte

Goodling

Goss

Graham

Greenwood

Gunderson

Gutknecht

Hall (OH)

Hall (TX)

Hamilton

Hancock

Hansen

Hastert

Hastings (WA)

Hayworth

Hefley

Heineman

Herger

Hilleary

Hobson

Hoekstra

Hoke

Horn

Hostettler

Houghton

Hoyer

Hunter

Hutchinson

Hyde

Inglis

Istook

Johnson (CT)

Johnson, Sam

Jones

Kanjorski

Kaptur

Kasich

Kelly

Kim

King

Kingston

Kleczka

Klink

Klug

Knollenberg

Kolbe

LaHood

Largent

Latham

LaTourette

Laughlin

Lazio

Leach

Lewis (CA)

Lewis (KY)

Lightfoot

Linder

Lipinski

Livingston

LoBiondo

Longley

Lucas

Manzullo

Martini

McCollum

McCrery

McDade

McHugh

McInnis

McIntosh

McKeon

McNulty

Metcalf

Meyers

Mica

Miller (FL)

Molinari

Mollohan

Montgomery

Moorhead

Morella

Murtha

Myers

Myrick

Nethercutt

Neumann

Ney

Norwood

Nussle

Orton

Oxley

Packard

Parker

Paxon

Payne (VA)

Peterson (FL)

Petri

Pickett

Pombo

Porter

Portman

Pryce

Quillen

Quinn

Radanovich

Ramstad

Regula

Riggs

Roberts

Roemer

Rogers

Rohrabacher

Ros-Lehtinen

Roth

Roukema

Royce

Salmon

Sanford

Saxton

Scarborough

Schaefer

Schiff

Seastrand

Sensenbrenner

Shadegg

Shaw

Shays

Shuster

Sisisky

Skaggs

Skeen

Smith (MI)

Smith (NJ)

Smith (TX)

Smith (WA)

Solomon

Souder

Spence

Stark

Stearns

Stenholm

Stockman

Stump

Talent

Tate

Tauzin

Taylor (NC)

Thomas

Thornberry

Tiahrt

Torkildsen

Upton

Vucanovich

Waldholtz

Walker

Walsh

Wamp

Watts (OK)

Weldon (FL)

Weldon (PA)

Weller

White

Whitfield

Wicker

Wilson

Wolf

Young (AK)

Young (FL)

Zeliff

Zimmer

NOT VOTING—1

Reynolds

So the motion to recommit with instructions was not agreed to.

T56.15 POINT OF ORDER

Mr. MORAN, having previously cited

clause 5(c) of rule XXI in a parliamentary inquiry as being appliable to the

bill, made a point of order, and said:

‘‘Mr. Speaker, I made a parliamentary inquiry, but I would state a point

of order that any vote on this bill

should require a three-fifths vote. If it

does not require that, then I would appeal the ruling of the Chair.’’.

Mr. ARCHER was recognized to

speak to the point of order, and said:

‘‘Mr. Speaker, I would be pleased to

try to help the Chair to support his ruling.

‘‘First, as a result of the enactment

of the 50 percent exclusion applicable

generally, taxpayers, other than those

described in the following two paragraphs, would have a tax rate lower

than 28 percent. Thus, the 28 percent

maximum rate of section 1(h) of current law would not cause a reduction in

tax liability as compared with that

under current law; that is, as relates to

current law liability, the provision

would be inoperative.

‘‘No. 2, the 50 percent exclusion

would not apply to collectibles. Under

H.R. 1215, for this group of taxpayers

the maximum rate of 28 percent is retained in H.R. 1215.

‘‘No. 3, a question has been raised as

to the potential application of the 28

percent maximum rate under current

law for taxpayers currently qualifying

for the special rules of existing section

of the law, 1202. In light of the fact that

this provision would be repealed by

1215, the maximum rate of 28 percent

would have no further application.

Moreover, it should be noted that the

special rules in section 1202 are an exclusion provision rather than a rate

provision.

‘‘Further, it should be noted that

concerns as to whether repeal of current law, section 1202, in conjunction

with the repeal of current law, section

1(h), constitutes a rate increase, are focused on the effective rate impact

rather than the occurrence of any income tax rate increase.

‘‘The House rule in question is not

intended to apply to effective rate

changes.’’.

Mr. MORAN was recognized to speak

further to the point of order, and said:

‘‘Mr. Speaker, I would like to underscore the last comment that was made

by the distinguished chairman of the

Committee on Ways and Means that

the House rule in question is not intended to apply to effective tax rate

changes. There was never any reference

to effective rate changes. In fact, it

was any income tax rate increase. I

read the debate again that occurred on

the first day of this session. We are

now making a distinction between effective rate changes apparently and

statutory rate changes, although both

apply here. I do have a letter from the

Treasury Department explaining that

this is a tax rate increase.

‘‘How it occurred, Mr. Speaker, is in

the 1993 Omnibus Budget Reconciliation Act we did pass a capital gains

tax rate reduction. What it said is that

when people invest in small capitalized

firms for five years, their capital gains

tax is reduced by 50 percent. What this

bill did was to strike the capital gains

rate of 28 percent, raise it to 39.6 percent, and then apply the 50 percent

preference for capital gains investment. What that means is that the effective capital gains rate is 19.8 percent

if this bill were to pass, whereas today

there are investors getting a 14 percent

tax rate on capital gains investments.

‘‘Now, this is not an obscure provision. It is a $725 million capital gains

provision that was passed in the 1993

Budget Reconciliation Act. What we

have done is for some investors who

have invested hundreds of millions of

dollars in small capitalized firms, is increased their tax rate from 14 percent

to 19.8 percent. That is an increase in

the income tax rate. It is both a statutory increase, in that we remove the 28

percent level and put in 39.6 percent. It

is also an effective rate increase because it changes from 14 percent to 19.8

percent. That is what the letter from

both the Treasury Department and the

Small Business Administration underscores, that in fact investors would be

paying a higher capital gains rate.’’.

Mr. CARDIN was recognized to speak

to the point of order, and said:

‘‘Mr. Speaker, I do.

‘‘Mr. Speaker, this is a very important ruling. It is the first one that the

Chair has had to make on the new rule

XXI that requires an extraordinary

vote on a tax rate increase. The language, as I understand it, is when the

Federal tax rate increase applies we

need a three-fifths vote.

‘‘If I understand the potential ruling

of the Chair, if the Chair rules that

this bill does not raise a rate and

therefore does not need an extraordinary vote, what the Chair is saying is

that legislation which subjects a larger

percentage of a taxpayer’s income to

an existing tax rate would not be a tax

rate increase under the provisions of

rule XXI. That would mean that we

could effectively raise tax rates in this

country by just subjecting a larger

amount of a person’s income to the tax

rate, thereby accomplishing the effect

of a tax rate increase under the potential ruling of the Chair without raising

the rate.

‘‘I just really want to point that out

to the Chair before he makes his ruling, because effectively if he rules

against the gentleman from Virginia

[Mr. MORAN] rule XXI is meaningless.’’.

Mr. SKAGGS was recognized to speak

to the point of order, and said:

‘‘Mr. Speaker, one further point I

think needs to be made on this.

‘‘During the debate on opening day,

it was touted that this rules change

was remedial in nature. It was to be

viewed expansively as remedying a propensity of the House that needed to be

curtailed. A narrow reading such as is

advocated by the chairman of the Committee on Ways and Means a few minutes ago flies in the face of all of the

advocacy, the legislative history, if

you will, of this rules change, which is

the only basis that the House has and

that the Chair has for informing a ruling.

‘‘To take a provision that was intended to be remedial, and therefore

viewed expansively, and interpret it

narrowly belies the absurdity of the

rules change to begin with.’’.