I 

111TH CONGRESS 

2D SESSION H. R. 5406 

To establish the Corporate Subsidy Reform Commission to review and identify 

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 

MAY 26, 2010 

Mr. SMITH of Washington (for himself and Ms. SHEA-PORTER) introduced the 

following bill; which was referred to the Committee on Oversight and 

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 and identify 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’’. 

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 (26 U.S.C. 

19 501(c)(3)) that is exempt from taxation 

20 under section 501(a) of the Internal Rev21 enue Code of 1986 (26 U.S.C. 501(a)); or 

22 (ii) a State or local government or In23 dian Tribe; and 

24 (B) provides an unfair competitive advan25 tage or financial windfall; and 


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

2 or tax advantage that is awarded for the purposes 

3 of research and development in the broad public in4 terest on the basis of a peer reviewed or other open, 

5 competitive, merit-based procedure. 

6 SEC. 5. CORPORATE SUBSIDY REFORM COMMISSION. 

7 (a) ESTABLISHMENT.—There is established in the 

8 legislative branch an independent commission to be known 

9 as the ‘‘Corporate Subsidy Reform Commission’’ (herein10 after in this Act referred to as the ‘‘Commission’’). 

11 (b) DUTIES.—The Commission shall— 

12 (1) examine the programs and laws of the Fed13 eral Government and identify any programs or laws 

14 that provide inequitable Federal subsidies; 

15 (2) review inequitable Federal subsidies; and 

16 (3) submit the report required under section 

17 6(c) to the Congress, making recommendations re18 garding the termination, modification, or retention 

19 of inequitable Federal subsidies. 

20 (c) LIMITATIONS.— 

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

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

23 new programs or taxes. The Commission established 

24 in this section shall limit its activities to reviewing 

25 existing programs and laws with the goal of ensuring 


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1 fairness and equity in the operation and application 

2 of such programs and laws. 

3 (2) ELIMINATION OF AGENCIES AND DEPART4 MENTS.—The Commission— 

5 (A) shall limit its recommendations to the 

6 termination, modification, or retention of in7 equitable Federal subsidies; and 

8 (B) shall not recommend the termination 

9 of any Federal agency or department. 

10 (d) APPOINTMENT.— 

11 (1) MEMBERS.—The Commission shall be com12 posed of 8 members, of whom— 

13 (A) 2 shall be appointed by the Speaker of 

14 the House of Representatives; 

15 (B) 2 shall be appointed by the minority 

16 leader of the House of Representatives; 

17 (C) 2 shall be appointed by the majority 

18 leader of the Senate; and 

19 (D) 2 shall be appointed by the minority 

20 leader of the Senate. 

21 (2) CONSULTATION REQUIRED.—The Speaker 

22 of the House of Representatives, the minority leader 

23 of the House of Representatives, the majority leader 

24 of the Senate, and the minority leader of the Senate 


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1 shall consult among themselves prior to the appoint2 ment of the members of the Commission. 

3 (3) BACKGROUND.—The members shall rep4 resent a broad array of expertise and points of view 

5 with respect to the subject matter, programs, and 

6 laws the Commission is likely to review. 

7 (4) LIMITATION ON FEDERAL OFFICER.—No 

8 officer or employee of a Federal agency may serve 

9 as a member of the Commission. 

10 (5) TERMS.—The members of the Commission 

11 shall be appointed for the life of the Commission. 

12 (e) CO-CHAIRS.— 

13 (1) IN GENERAL.—The Commission shall be co14 chaired by 2 members, selected by the 8 members of 

15 the Commission. 

16 (2) HOUSE AND SENATE REPRESENTATION.— 

17 Of the members selected to be co-chairs— 

18 (A) one shall be a member appointed 

19 under subsection (d)(1)(A) or subsection 

20 (d)(1)(B); and 

21 (B) one shall be a member appointed 

22 under subsection (d)(1)(C) or subsection 

23 (d)(1)(D). 


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1 (3) POLITICAL AFFILIATION.—The two mem2 bers selected to be co-chairs may not be of the same 

3 political party. 

4 (f) MEETINGS.— 

5 (1) INITIAL MEETING.—No later than April 1, 

6 2011, the Commission shall conduct its first meet7 ing. 

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

9 Commission shall be open to the public, except that 

10 in cases in which classified information, trade se11 crets, or personnel matters are discussed, the co12 chairs may close the meeting. All proceedings, infor13 mation, and deliberations of the Commission shall be 

14 available, upon request, to the Speaker of the House 

15 of Representatives, the majority leader and minority 

16 leader of the House of Representatives, the majority 

17 leader and minority leader of the Senate, and the 

18 chairman and ranking minority member of the rel19 evant Committee of Congress having jurisdiction to 

20 report legislation regarding the subject matter there21 of. 

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

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

24 (h) PAY AND TRAVEL EXPENSES.— 


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1 (1) PAY.—Each member of the Commission, 

2 other than the co-chairs, shall be paid at a rate 

3 equal to the daily equivalent of the rate of basic pay 

4 for level IV of the Executive Schedule under section 

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

6 (including travel time) during which the member is 

7 engaged in the actual performance of duties vested 

8 in the Commission. 

9 (2) CO-CHAIRS.—The co-chairs shall be paid for 

10 each day referred to in paragraph (1) at a rate equal 

11 to the daily equivalent of the rate of basic pay for 

12 level III of the Executive Schedule under section 

13 5314 of title 5, United States Code. 

14 (3) TRAVEL EXPENSES.—Members of the Com15 mission shall receive travel expenses, including per 

16 diem in lieu of subsistence, in accordance with sec17 tions 5702 and 5703 of title 5, United States Code. 

18 (i) DIRECTOR OF STAFF.— 

19 (1) QUALIFICATIONS.—The co-chairs shall ap20 point as Director an individual who has not, during 

21 the 12 months preceding the date of such appoint22 ment, served in any of the entities or industries that 

23 are or might be affected by any of the programs or 

24 laws the Commission intends to review. 


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1 (2) PAY.—The Director shall be paid at the 

2 rate of basic pay payable for level IV of the Execu3 tive Schedule under section 5315 of title 5, United 

4 States Code. 

5 (3) REPORTS.—The Director shall submit peri6 odic reports on administrative and personnel matters 

7 to the co-chairs of the Commission and the chairman 

8 and ranking minority member of the Committee on 

9 Homeland Security and Governmental Affairs of the 

10 Senate and the Committee on Oversight and Govern11 ment Reform of the House of Representatives. 

12 (j) STAFF.— 

13 (1) ADDITIONAL PERSONNEL.—Subject to para14 graphs (2) and (5), the Director, with the approval 

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

16 additional personnel. 

17 (2) APPOINTMENTS.—The Director may make 

18 such appointments without regard to the provisions 

19 of title 5, United States Code, governing appoint20 ments in the competitive service, and any personnel 

21 so appointed may be paid without regard to the pro22 visions of chapter 51 and subchapter III of chapter 

23 53 of that title relating to classification and General 

24 Schedule pay rates. 


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

2 under paragraph (2) such professional legal staff as 

3 are necessary for the performance of the functions 

4 of the Commission. 

5 (4) DETAILEES.—Upon the request of the Di6 rector, the head of any Federal department or agen7 cy may detail any of the personnel of that depart8 ment or agency to the Commission to assist the 

9 Commission in accordance with an agreement en10 tered into with the Commission. 

11 (5) RESTRICTIONS ON PERSONNEL AND

12 DETAILEES.—The following restrictions shall apply 

13 to personnel and detailees of the Commission: 

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

15 of the personnel detailed to the Commission 

16 may be on detail from Federal agencies that 

17 deal directly or indirectly with the programs, 

18 laws, or subsidies the Commission intends to re19 view. 

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

21 the professional analysts of the Commission 

22 may be persons detailed from a Federal agency 

23 that deals directly or indirectly with the pro24 grams, laws, or subsidies the Commission in25 tends to review. 


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1 (C) LEAD ANALYST.—No person detailed 

2 from a Federal agency to the Commission may 

3 be assigned as the lead professional analyst 

4 with respect to an entity or industry that is or 

5 might be affected by the programs, laws, or 

6 subsidies the Commission intends to review if 

7 the person has been involved in regulatory or 

8 policy-making decisions affecting any such enti9 ty or industry in the 12 months preceding such 

10 assignment. 

11 (D) DETAILEE.—A person may not be de12 tailed from a Federal agency to the Commission 

13 if, within 12 months before the detail is to 

14 begin, that person participated personally and 

15 substantially in any matter within that par16 ticular agency concerning the preparation of 

17 recommendations under this Act. 

18 (E) LIMITATION ON STAFF SIZE.— 

19 (i) RESTRICTION ON NUMBER OF

20 STAFF.—Subject to clause (ii), there may 

21 not be more than 25 persons (including 

22 any detailees) on the staff at any time. 

23 (ii) NOTIFICATION OF INCREASE.— 

24 The Commission may increase the number 

25 of its personnel in excess of the limitation 


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1 under clause (i) 15 days after submitting 

2 notification of such increase to the Com3 mittee on Homeland Security and Govern4 mental Affairs of the Senate and the Com5 mittee on Oversight and Government Re6 form of the House of Representatives. 

7 (F) PROHIBITION OF COMPENSATION.— 

8 Members of the staff of the Commission who 

9 are full-time officers or employees of the United 

10 States may not receive additional pay, allow11 ances, or benefits by reason of their service for 

12 the Commission. 

13 (6) ASSISTANCE.— 

14 (A) IN GENERAL.—The Comptroller Gen15 eral of the United States shall 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 Homeland Security and Governmental Affairs 

23 of the Senate and the Committee on Oversight 

24 and Government Reform of the House of Rep25 resentatives on the agreement referred to under 


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1 subparagraph (A) before entering into such 

2 agreement. 

3 (k) OTHER AUTHORITY.— 

4 (1) EXPERTS AND CONSULTANTS.—The Com5 mission may procure by contract the temporary or 

6 intermittent services of experts or consultants pursu7 ant to section 3109 of title 5, United States Code. 

8 (2) LEASING.—The Commission may lease 

9 space and acquire personal property. 

10 (3) LIMITATION ON CONTRACT AUTHORITY.— 

11 The authority to enter into contracts under this sub12 section shall be available only to the extent or in the 

13 amounts provided in advance in appropriation Acts. 

14 (l) AUTHORIZATION OF APPROPRIATIONS.—There 

15 are authorized to be appropriated to the Commission such 

16 sums as are necessary to carry out its duties under this 

17 Act. 

18 (m) TERMINATION.—The Commission shall termi19 nate on January 1, 2013. 

20 SEC. 6. PROCEDURE FOR MAKING RECOMMENDATIONS TO 

21 TERMINATE INEQUITABLE FEDERAL SUB22 SIDIES. 

23 (a) AGENCY PLAN.— 

24 (1) IN GENERAL.—The head of each Federal 

25 department or agency shall include in the documents 


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1 submitted in support of the budget of the agency for 

2 fiscal year 2012 a list identifying all programs and 

3 laws administered by that department or agency 

4 that the head of the department or agency deter5 mines provide inequitable Federal subsidies. 

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

7 (A) a detailed description of each program 

8 or law in question; 

9 (B) a statement identifying and detailing 

10 the extent to which each payment, benefit, serv11 ice, or tax advantage under such program or 

12 law is an inequitable Federal subsidy; 

13 (C) a statement summarizing the legisla14 tive history and purpose of such payment, ben15 efit, service, or tax advantage, and the laws or 

16 policies directly or indirectly giving rise to the 

17 need for such programs or law; and 

18 (D) a recommendation to the Commission 

19 regarding the termination, modification, or re20 tention of each inequitable Federal subsidy 

21 identified in the list. 

22 (b) REVIEW BY THE COMMISSION.— 

23 (1) IN GENERAL.—At any time after the sub24 mission of the budget documents to the Congress, 

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1 garding, and review, the termination, modification, 

2 or retention of all inequitable Federal subsidies pro3 vided by each Federal department or agency, includ4 ing the recommendations included in the lists re5 quired under subsection (a). 

6 (2) TESTIMONY UNDER OATH.—All testimony 

7 before the Commission at a public hearing conducted 

8 under this paragraph shall be presented under oath. 

9 (c) REPORT AND RECOMMENDATIONS OF COMMIS10 SION.— 

11 (1) REPORT TO CONGRESS.— 

12 (A) REQUIREMENT.—No later than March 

13 31, 2012, the Commission shall submit a report 

14 to the Congress containing the Commission’s 

15 findings and recommendations for termination, 

16 modification, or retention of each of the inequi17 table Federal subsidies reviewed by the Com18 mission. 

19 (B) CONTENTS.—Such findings and rec20 ommendations shall specify— 

21 (i) all actions, circumstances, and con22 siderations relating to or bearing upon the 

23 recommendations; and 

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1 ommendations upon the policies, laws, and 

2 programs directly or indirectly affected by 

3 the recommendations. 

4 (C) SUPERMAJORITY REQUIREMENT.—The 

5 Commission may not include a recommendation 

6 in the report unless inclusion of the rec7 ommendation is approved by at least 6 mem8 bers of the Commission. 

9 (2) INFORMATION AND JUSTIFICATIONS.—The 

10 Commission shall include in its report information 

11 specifying— 

12 (A) the reasons and justifications for the 

13 recommendations of the Commission; 

14 (B) all actions, circumstances, and consid15 erations relating to or bearing upon the rec16 ommendations; 

17 (C) to the maximum extent practicable, the 

18 estimated economic impact of accepting its rec19 ommendations; 

20 (D) the amount of the projected savings 

21 and budgetary impact that would result from 

22 the acceptance of each of its recommendations; 

23 and 

24 (E) the specific changes in Federal stat25 utes necessary to implement the recommendaVerDate Mar 15 2010 23:38 May 27, 2010 Jkt 089200 PO 00000 Frm 00016 Fmt 6652 Sfmt 6201 E:\BILLS\H5406.IH H5406

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1 tions, including citation of the relevant provi2 sions of existing law. 

3 (3) SUBMISSION TO CONGRESS.—The report 

4 submitted to the Congress under this subsection 

5 shall be submitted to the Senate and the House of 

6 Representatives on the same day, and shall be deliv7 ered to the Secretary of the Senate if the Senate is 

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

9 Representatives if the House is not in session. 

10 (4) FEDERAL REGISTER.—The report sub11 mitted under this subsection shall be published in 

12 the first issue of the Federal Register after such 

13 submission. 

14 (5) CHANGES IN AGENCY OR DEPARTMENT

15 RECOMMENDATIONS.— 

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

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

18 (C) of this paragraph, in making its rec19 ommendations, the Commission may make 

20 changes in any of the recommendations made 

21 by a department or agency. 

22 (B) PUBLIC HEARING REQUIREMENT.— 

23 Subject to subparagraph (C), the Commission 

24 may make a change in the recommendations 

25 made by a department or agency only if the 


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1 Commission conducts a public hearing on the 

2 Commission’s proposed changes. 

3 (C) LIMITATION ON PUBLIC HEARING RE4 QUIREMENT.—Subparagraph (B) shall apply 

5 only to a change by the Commission in a de6 partment or agency recommendation that 

7 would— 

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

9 service, or tax advantage to or from, re10 spectively, the list recommended for termi11 nation; 

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

13 service, or tax advantage to or from, re14 spectively, the list recommended for modi15 fication; or 

16 (iii) increase or decrease the extent of 

17 a recommendation to modify a payment, 

18 benefit, service, or tax advantage included 

19 in a department’s or agency’s rec20 ommendation. 

21 (6) PROVISION OF INFORMATION TO MEMBERS

22 OF CONGRESS.—After March 31, 2012, the Commis23 sion shall, upon request, promptly provide to any 

24 Member of Congress the information used by the 

25 Commission in making its recommendations. 


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1 (7) COMPTROLLER GENERAL.—The Comp2 troller General shall— 

3 (A) assist the Commission, to the extent 

4 requested, in the Commission’s review and anal5 ysis of the lists, statements, and recommenda6 tions made by departments and agencies under 

7 subsection (a); and 

8 (B) no later than April 1, 2011, or 60 

9 days after the public release of the President’s 

10 budget documents for fiscal year 2012, which11 ever is earlier, submit to the Congress and to 

12 the Commission a report containing a detailed 

13 analysis of the list, statements, and rec14 ommendations of each department or agency. 

15 SEC. 7. CONGRESSIONAL ACTION ON COMMISSION REC16 OMMENDATIONS. 

17 It is the sense of the Congress that, following submis18 sion of the report of the Corporate Subsidy Reform Com19 mission under section 6, the House of Representatives and 

20 the Senate should promptly consider legislation that would 

21 enact changes in Federal statutes necessary to implement 

22 the recommendations of the Commission. 

Æ 


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