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[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[S. 2028 Introduced in Senate (IS)]

103d CONGRESS
  2d Session
                                S. 2028

     To amend the Internal Revenue Code of 1986 to improve revenue 
 collection and to provide that a taxpayer conscientiously opposed to 
participation in war may elect to have such taxpayer's income, estate, 
  or gift tax payments spent for nonmilitary purposes, to create the 
  United States Peace Tax Fund to receive such tax payments, and for 
                            other purposes.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

               April 19 (legislative day, April 11), 1994

  Mr. Hatfield (for himself and Mr. Harkin) introduced the following 
  bill; which was read twice and referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL

 
     To amend the Internal Revenue Code of 1986 to improve revenue 
 collection and to provide that a taxpayer conscientiously opposed to 
participation in war may elect to have such taxpayer's income, estate, 
  or gift tax payments spent for nonmilitary purposes, to create the 
  United States Peace Tax Fund to receive such tax payments, and for 
                            other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SEC. 2. FINDINGS AND POLICY.

    (a) Findings.--The Congress finds that for a significant minority 
of Americans, sincere conscientious objection to participation in war 
in any form means that such Americans cannot in conscience pay the 
portion of their taxes that would support military expenditures.
    (b) Policy.--It is the policy of the Congress--
            (1) to improve revenue collections and to allow 
        conscientious objectors to pay their full tax liability without 
        violating their moral, ethical, or religious beliefs;
            (2) to reduce the present administrative and judicial 
        burden created by conscientious objectors who violate tax laws 
        rather than violate their consciences;
            (3) to recognize conscientious objector status with regard 
        to the payment of taxes for military purposes; and
            (4) to provide a mechanism for congressional appropriations 
        of such funds for nonmilitary purposes.

SEC. 3. UNITED STATES PEACE TAX FUND.

    (a) Creation of Trust Fund.--There is hereby established within the 
Treasury of the United States a special trust fund to be known as the 
``United States Peace Tax Fund'' (hereinafter referred to as the 
``Fund''). The Fund shall consist of such amounts as may be transferred 
to the Fund as provided in this section.
    (b) Transfer to Fund of Amounts Equivalent to Certain Taxes.--
            (1) In general.--There are hereby transferred to the Fund 
        amounts equivalent to the sum of the amounts designated during 
        the fiscal year by individuals under sections 2210, 2506, and 
        6099 of the Internal Revenue Code of 1986 for payment into the 
        Fund. Such amounts shall be deposited into the Fund and shall 
        be available only for the purposes provided in this Act.
            (2) Method of transfer.--The amounts transferred by 
        paragraph (1) shall be transferred at least monthly from the 
        general fund of the Treasury to the Fund on the basis of 
        estimates by the Secretary of the Treasury of the amounts, 
        referred to in paragraph (1), received in the Treasury. Proper 
        adjustments shall be made in the amounts subsequently 
        transferred to the extent that prior estimates were in excess 
        of or less than the amounts required to be transferred.
            (3) Report.--It shall be the duty of the Secretary of the 
        Treasury to report to the Committee on Appropriations of the 
        House of Representatives and the Senate each year on the total 
        amount transferred into the Fund during the preceding fiscal 
        year. Such report shall be printed in the Congressional Record 
        upon receipt by the committees.

SEC. 4. INCOME TAX PAYMENTS TO UNITED STATES PEACE TAX FUND.

    (a) In General.--Subchapter A of chapter 61 of the Internal Revenue 
Code of 1986 (relating to information and records) is amended by adding 
at the end thereof the following new part:

 ``PART IX--DESIGNATION OF INCOME TAX PAYMENTS FOR TRANSFER TO UNITED 
                         STATES PEACE TAX FUND

                              ``Sec. 6099. Designation by individuals.

``SEC. 6099. DESIGNATION BY INDIVIDUALS.

    ``(a) In General.--Every eligible individual (other than a 
nonresident alien) whose income tax liability for any taxable year is 
$1 or more may designate that such individual's income tax payment for 
such year shall be paid into the United States Peace Tax Fund 
established by section 3 of the United States peace Tax Fund Act.
    ``(b) Definitions.--As used in this section:
            ``(1) Eligible individual.--
                    ``(A) In general.--The term `eligible individual' 
                means an individual who by reason of religious training 
                and belief is conscientiously opposed to participation 
                in war in any form, and who--
                            ``(i) has been exempted or discharged from 
                        combatant service and training in the Armed 
                        Forces of the United States as a conscientious 
                        objector under section 6(j) of the Military 
                        Selective Service Act (50 U.S.C. App. 456(j)), 
                        or corresponding law, or
                            ``(ii) certified in a statement in a 
                        questionnaire return made under section 6039F 
                        that such individual is conscientiously opposed 
                        to participation in war in any form within the 
                        meaning of section 6(j) of such Act.
                    ``(B) Verification.--
                            ``(i) Questionnaire return receipt.--Any 
                        taxpayer who makes a designation under 
                        subsection (a) shall attach the questionnaire 
                        return receipt provided under section 6039F(b) 
                        to such taxpayer's return of tax.
                            ``(ii) Additional information may be 
                        required.--The Secretary may require any 
                        taxpayer who makes a designation under 
                        subsection (a) to provide such additional 
                        information as may be necessary to verify such 
                        taxpayer's status as an eligible individual.
                    ``(C) Denial of designation.--If the Secretary 
                determines that a taxpayer who makes the designation 
                provided for by subsection (a) is not an eligible 
                individual and is not entitled to make such 
                designation, then the Secretary, upon written notice to 
                the taxpayer stating the reasons for denial, may deny 
                the designation. The taxpayer may challenge the 
                Secretary's ruling by bringing an action in the United 
                States Tax Court or in the United States district court 
                for the district of such taxpayer's residence, for a 
                declaratory judgment as to whether the taxpayer is an 
                eligible individual and entitled to make such a 
                designation.
            ``(2) Income tax liability.--The term `income tax 
        liability' means the amount of the tax imposed by chapter 1 on 
        a taxpayer for any taxable year (as shown on such taxpayer's 
        tax return) reduced by the sum of--
                    ``(A) the credits (as shown in such return) 
                allowable under part IV of subchapter A of chapter 1 
                (other than subpart C thereof), and
                    ``(B) the amount designated under section 6096.
            ``(3) Income tax payment.--The term `income tax payment' 
        means the amount of taxes imposed by chapter 1 and paid by or 
        withheld from a taxpayer for any taxable year not in excess of 
        such taxpayer's income tax liability.
    ``(c) Manner and Time of Designation.--A designation under 
subsection (a) may be made with respect to any taxable year either--
            ``(1) at the time of filing the return of the tax imposed 
        by chapter 1 for such taxable year, or
            ``(2) at any other time (after the time of filing the 
        return of the tax imposed by chapter 1 for such taxable year) 
        specified in regulations prescribed by the Secretary.
Such designation shall be made in such manner as the Secretary 
prescribes by regulations except that, if such designation is made at 
the time of filing the return of the tax imposed by chapter 1 for such 
taxable year, such designation shall be made on the page bearing the 
taxpayer's signature.
    ``(d) Special Rule in the Case of Joint Return.--In the case of an 
eligible individual filing a joint return, upon the consent of such 
individual's spouse, the joint income tax payment may be designated 
pursuant to subsection (a).
    ``(e) Explanation of United States Peace Tax Fund Purposes.--Each 
publication of general instructions accompanying an income tax return 
or a questionnaire return described in section 6039F shall include--
            ``(1) an explanation of the purpose of the United States 
        Peace Tax Fund,
            ``(2) the criteria for determining whether an individual 
        meets the requirements of section 6(j) of the Military 
        Selective Service Act (50 U.S.C. App. 456(j)), and
            ``(3) an explanation of the process for making the 
        designation provided by this section.''.
    (b) Clerical Amendments.--The table of parts of subchapter A of 
chapter 61 of the Internal Revenue Code of 1986 is amended by adding at 
the end thereof the following:
                              ``Part IX. Designation of income tax 
                                        payments for transfer to United 
                                        States Peace Tax Fund.''.
    (c) Designation Information.--
            (1) Subpart A of part III of subchapter A of chapter 61 of 
        the Internal Revenue Code of 1986 (relating to information and 
        returns) is amended by adding at the end thereof the following 
        new section:

``SEC. 6039F. UNITED STATES PEACE TAX FUND DESIGNATION INFORMATION.

    ``(a) Questionnaire Return.--Every taxpayer who makes a designation 
provided by section 6099(a) for any taxable year shall make a 
questionnaire return during such year for the purpose of determining 
whether the taxpayer is an eligible individual (within the meaning of 
section 6099(b)(1). The questionnaire return shall request the taxpayer 
to certify such taxpayer's beliefs about participation in war, the 
source or genesis of such beliefs, and how the beliefs affect the 
taxpayer's life.
    ``(b) Questionnaire Return Receipt.--Upon receipt of the 
questionnaire return, the Secretary shall issue a receipt to the 
taxpayer indicating timely filing of such return.''.
            (2) The table of sections for such subpart is amended by 
        adding at the end thereof the following new item:

                              ``Sec. 6039F. United States Peace Tax 
                                        Fund designation 
                                        information.''.
    (d) Effective Date.--The amendments made by this section shall 
apply with respect to--
            (1) taxable years beginning after December 31, 1993, and
            (2) any taxable year ending before January 1, 1994, for 
        which the time for filing a claim for refund or credit of an 
        overpayment of tax has not expired on the date of the enactment 
        of this Act.
    (e) Rules Applicable to Returns of Tax for Taxable Years Ending 
Before January 1, 1994.--
            (1) Penalties for failure to pay tax.--Any civil or 
        criminal penalty imposed on an individual for failing or 
        refusing to pay all or a part of the tax imposed by chapter 1 
        of the Internal Revenue Code of 1986 shall be vacated and set 
        aside if the person upon whom the penalty was imposed--
                    (A) pays the tax due (with interest), and
                    (B) establishes to the satisfaction of the 
                Secretary of the Treasury that the failure or refusal 
                to pay was based upon such person's conscientious 
                objection to participation in war in any form within 
                the meaning of section 6099(b)(1)(A) of such Code 
                (defining eligible individual).
            (2) Disposition of amounts collected.--There are hereby 
        transferred to the Fund amounts equivalent to the sum of the 
        amounts paid into the Treasury by persons under the provisions 
        of paragraph (1). Such amounts shall be deposited into the Fund 
        and shall be available only for the purposes provided in this 
        Act.

SEC. 5. ESTATE TAX PAYMENTS TO UNITED STATES PEACE TAX FUND.

    (a) In General. Subchapter C of chapter 11 of the Internal Revenue 
Code of 1986 is amended by adding at the end thereof the following new 
section:

``SEC. 2210. DESIGNATION OF ESTATE TAX PAYMENTS FOR TRANSFER TO UNITED 
              STATES PEACE TAX FUND.

    ``An eligible individual (within the meaning of section 6099(b)(1)) 
may elect that the tax imposed by section 2001 on the taxable estate of 
such individual shall be transferred when paid to the United States 
Peace Tax Fund established under section 3 of the United States Peace 
Tax Fund Act. The election may be made by the executor or administrator 
of the estate under written authority of the decedent. Such election 
shall be made in such manner as the Secretary shall by regulations 
prescribe.''.
    (b) Clerical Amendment.--The table of sections for subchapter C of 
chapter 11 of the Internal Revenue Code of 1986 is amended by adding at 
the end thereof the following:

                              ``Sec. 2210. Designation of estate tax 
                                        payments for transfer to United 
                                        States Peace Tax Fund.''.
    (c) Effective Date.--The amendments made by this section shall 
apply with respect to the estates of decedents dying after December 31, 
1993.

SEC. 6. GIFT TAX PAYMENTS TO UNITED STATES PEACE TAX FUND.

    (a) In General.--Subchapter a of chapter 12 of the Internal Revenue 
Code of 1986 is amended by adding at the end thereof the following new 
section:

``SEC. 2506. DESIGNATION OF GIFT TAX PAYMENTS FOR TRANSFER TO UNITED 
              STATES PEACE TAX FUND.

    ``An eligible individual (within the meaning of section 6099(b)(1)) 
may elect that the tax imposed by section 2501 shall be transferred 
when paid to the United States Peace Tax Fund established under section 
3 of the United States Peace Tax Fund Act. The election shall be made 
in such manner as the Secretary shall by regulations prescribe.''.
    (b) Clerical Amendment.--The table of contents for subchapter A of 
chapter 12 of the Internal Revenue Code of 1986 is amended by adding at 
the end thereof the following:

                              ``Sec. 2506. Designation of gift tax 
                                        payments for transfer to United 
                                        States Peace Tax Fund.''.
    (c) Effective Date.--The amendments made by this section shall 
apply with respect to gifts made after December 31, 1993.

SEC. 7. AUTHORIZATION OF APPROPRIATIONS.

    (a) Certification By Comptroller General.--As soon after the close 
of each fiscal year as may be practicable, the Comptroller General 
shall determine and certify to the Congress and to the President the 
percentage of actual appropriations made for a military purpose with 
respect to such fiscal year. The certification shall be published in 
the Congressional Record upon receipt by the Congress.
    (b) Authorization of Appropriations.--There is hereby authorized to 
be appropriated each year a certain portion of the Fund for obligation 
and expenditure in accordance with the provisions of this Act. Such 
portion is equal to an amount which is the sum of--
            (1) the product of--
                    (A) all funds transferred to the Fund in each 
                fiscal year, times
                    (B) the percentage determined under subsection (a) 
                for such fiscal year, plus
            (2) all funds in the Fund previously authorized to be 
        appropriated under this subsection but not yet appropriated 
        pursuant to this Act.
Funds remaining in the Fund shall accrue interest according to the 
prevailing rate in long-term Government bonds.
    (c) Surplus Covered into General Fund.--The remaining portion of 
the Fund after the application of subsection (b) is hereby covered into 
the general fund of the Treasury of the United States. No part of the 
funds transferred to the general fund under this subsection shall be 
appropriated for any expenditures, or otherwise obligated, for a 
military purpose.

SEC. 8. ELIGIBLE APPROPRIATIONS.

    (a) Payments.--Funds appropriated pursuant to the authorization 
under section 7(b) shall be available, as provided in the appropriation 
Acts, to make grants, loans, or other arrangements for eligible 
activities described in subsection (c).
    (b) Eligible Activities.--The following activities are eligible to 
receive funds under subsection (a):
            (1) Special Supplemental Food Program for Woman, Infants 
        and Children (WIC).
            (2) Head Start.
            (3) United States Institute of Peace.
            (4) Peace Corps.
    (c) Displacement of Other Funds.--It is the intent of this Act that 
the Fund shall not operate to release funds for military expenditures 
which, were it not for the existence of the Fund, would otherwise have 
been appropriated for nonmilitary expenditures.

SEC. 9. DEFINITIONS.

    For the purposes of this Act:
            (1) The term ``military purpose'' means any activity or 
        program conducted, administered, or sponsored by an agency of 
        the Government which affects an augmentation of military 
        forces, defensive and offensive intelligence activities, or 
        enhances the capability of any person or nation to wage war.
            (2) The term ``actual appropriations made for a military 
        purpose'' includes, but is not limited to, amounts appropriated 
        by the United States in connection with--
                    (A) the Department of Defense;
                    (B) the Central Intelligence Agency;
                    (C) the National Security Council;
                    (D) the Selective Service System;
                    (E) activities of the Department of Energy that 
                have a military purpose;
                    (F) activities of the National Aeronautics and 
                Space Administration that have a military purpose;
                    (G) foreign military aid; and
                    (H) the training, supplying, or maintaining of 
                military personnel, or the manufacture, construction, 
                maintenance, or development of military weapons, 
                installations, or strategies.
            (3) The term ``agency'' means each authority of the 
        Government of the United States, whether or not it is within or 
        subject to review by another agency, but does not include--
                    (A) the Congress; or
                    (B) the courts of the United States.
            (4) The term ``person'' includes an individual, 
        partnership, corporation, association, or public or private 
        organization other than an agency.

SEC. 10. SEPARABILITY.

    If any section, subsection, or other provision of this Act, or the 
application thereof to any person or circumstance is held invalid, the 
remainder of this Act and the application of such section, subsection, 
or other provision to other persons or circumstances shall not be 
affected thereby.

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