II

106TH CONGRESS

2D SESSION S. 2450

To terminate the Internal Revenue Code of 1986.

IN THE SENATE OF THE UNITED STATES

APRIL 13, 2000

Mr. HUTCHINSON (for himself and Mr. BROWNBACK) introduced the following

bill; which was read twice and referred to the Committee on Finance

A BILL

To terminate the Internal Revenue Code of 1986.

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

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Date Certain Tax Code

5 Replacement Act’’.

6 SEC. 2. PURPOSE.

7 The purpose of this Act is to set a date certain for

8 replacing the Internal Revenue Code of 1986 with a simple

9 and fair alternative.
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1 SEC. 3. TERMINATION OF INTERNAL REVENUE CODE OF

2 1986.

3 (a) IN GENERAL.—No tax shall be imposed by the

4 Internal Revenue Code of 1986—

5 (1) for any taxable year beginning after Decem6 ber 31, 2004; and

7 (2) in the case of any tax not imposed on the

8 basis of a taxable year, on any taxable event or for

9 any period after December 31, 2004.

10 (b) EXCEPTION.—Subsection (a) shall not apply to

11 taxes imposed by—

12 (1) chapter 2 of such Code (relating to tax on

13 self-employment income);

14 (2) chapter 21 of such Code (relating to Fed15 eral Insurance Contributions Act); and

16 (3) chapter 22 of such Code (relating to Rail17 road Retirement Tax Act).

18 SEC. 4. NATIONAL COMMISSION ON TAX REFORM AND SIM19 PLIFICATION.

20 (a) FINDINGS.—The Congress finds the following:

21 (1) The Internal Revenue Code of 1986 is over22 ly complex, imposes significant burdens on individ23 uals and businesses and the economy, is extremely

24 difficult for the Internal Revenue Service to admin25 ister, and is in need of fundamental reform and sim26 plification.
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1 (2) Many of the problems encountered by tax2 payers in dealing with the Internal Revenue Service

3 could be eliminated or alleviated by fundamental re4 form and simplification.

5 (3) The Federal Government’s present fiscal

6 outlook for continuing and sustained budget sur7 pluses provides a unique opportunity for the Con8 gress to consider measures for fundamental reform

9 and simplification of the tax laws.

10 (4) Recent efforts to simplify or reform the tax

11 laws have not been successful due in part to the dif12 ficulty of developing broad-based, nonpartisan sup13 port for proposals to make such changes.

14 (5) Many of the problems with the Internal

15 Revenue Service stem from the overly complex tax

16 code the agency is asked to administer.

17 (b) ESTABLISHMENT.—

18 (1) IN GENERAL.—To carry out the purposes of

19 this section, there is established within the legislative

20 branch a National Commission on Tax Reform and

21 Simplification (in this section referred to as the

22 ‘‘Commission’’).

23 (2) COMPOSITION.—The Commission shall be

24 composed of 15 members, as follows:
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1 (A) Three members appointed by the

2 President, two from the executive branch of the

3 Government and one from private life.

4 (B) Four members appointed by the ma5 jority leader of the Senate, one from Members

6 of the Senate and three from private life.

7 (C) Two members appointed by the minor8 ity leader of the Senate, one from Members of

9 the Senate and one from private life.

10 (D) Four members appointed by the

11 Speaker of the House of Representatives, one

12 from Members of the House and three from pri13 vate life.

14 (E) Two members appointed by the minor15 ity leader of the House of Representatives, one

16 from Members of the House and one from pri17 vate life.

18 (3) CHAIR.—The Commission shall elect a

19 Chair (or two Co-Chairs) from among its members.

20 (4) MEETINGS, QUORUMS, VACANCIES.—After

21 its initial meeting, the Commission shall meet upon

22 the call of the Chair (Co-Chairs, if elected) or a ma23 jority of its members. Nine members of the Commis24 sion shall constitute a quorum. Any vacancy in the

25 Commission shall not affect its powers, but shall be
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1 filled in the same manner in which the original ap2 pointment was made. Any meeting of the Commis3 sion or any subcommittee thereof may be held in ex4 ecutive session to the extent that the Chair (Co5 Chairs, if elected) or a majority of the members of

6 the Commission or subcommittee determine appro7 priate.

8 (5) CONTINUATION OF MEMBERSHIP.—If—

9 (A) any individual who appointed a mem10 ber to the Commission by virtue of holding a

11 position described in paragraph (2) ceases to

12 hold such position before the report of the Com13 mission is submitted under subsection (g), or

14 (B) a member was appointed to the Com15 mission as a Member of Congress and the mem16 ber ceases to be a Member of Congress, or was

17 appointed to the Commission because the mem18 ber was not an officer or employee of any gov19 ernment and later becomes an officer or em20 ployee of a government, that member may con21 tinue as a member for not longer than the 30-

22 day period beginning on the date that such in23 dividual ceases to hold such position or such

24 member ceases to be a Member of Congress or
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1 becomes such an officer or employee, as the

2 case may be.

3 (6) APPOINTMENT; INITIAL MEETING.—

4 (A) APPOINTMENT.—It is the sense of the

5 Congress that members of the Commission

6 should be appointed not more than 60 days

7 after the date of the enactment of this Act.

8 (B) INITIAL MEETING.—If, after 60 days

9 from the date of the enactment of this Act,

10 eight or more members of the Commission have

11 been appointed, members who have been ap12 pointed may meet and select the Chair (or Co13 Chairs) who thereafter shall have the authority

14 to begin the operations of the Commission, in15 cluding the hiring of staff.

16 (c) FUNCTIONS OF THE COMMISSION.—

17 (1) IN GENERAL.—The functions of the Com18 mission shall be—

19 (A) to conduct, for a period of not to ex20 ceed 18 months from the date of its first meet21 ing, the review described in paragraph (2), and

22 (B) to submit to the Congress a report of

23 the results of such review, including rec24 ommendations for fundamental reform and sim-
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1 plification of the Internal Revenue Code of

2 1986, as described in subsection (g).

3 (2) REVIEW.—The Commission shall review—

4 (A) the present structure and provisions of

5 the Internal Revenue Code of 1986, especially

6 with respect to—

7 (i) its impact on the economy (includ8 ing the impact on savings, capital forma9 tion and capital investment);

10 (ii) its impact on families and the

11 workforce (including issues relating to dis12 tribution of tax burden);

13 (iii) the compliance cost to taxpayers;

14 and

15 (iv) the ability of the Internal Rev16 enue Service to administer such provisions;

17 (B) whether tax systems imposed under

18 the laws of other countries could provide more

19 efficient and fair methods of funding the rev20 enue requirements of the government;

21 (C) whether the income tax should be re22 placed with a tax imposed in a different manner

23 or on a different base; and
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1 (D) whether the Internal Revenue Code of

2 1986 can be simplified, absent wholesale re3 structuring or replacement thereof.

4 (d) POWERS OF THE COMMISSION.—

5 (1) IN GENERAL.—The Commission or, on the

6 authorization of the Commission, any subcommittee

7 or member thereof, may, for the purpose of carrying

8 out the provisions of this section, hold such hearings

9 and sit and act at such times and places, take such

10 testimony, receive such evidence, and administer

11 such oaths, as the Commission or such designated

12 subcommittee or designated member may deem ad13 visable.

14 (2) CONTRACTING.—The Commission may, to

15 such extent and in such amounts as are provided in

16 appropriation Acts, enter into contracts to enable

17 the Commission to discharge its duties under this

18 section.

19 (3) ASSISTANCE FROM FEDERAL AGENCIES AND

20 OFFICES.—

21 (A) INFORMATION.—The Commission is

22 authorized to secure directly from any executive

23 department, bureau, agency, board, commission,

24 office, independent establishment, or instrumen25 tality of the Government, as well as from any
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1 committee or other office of the legislative

2 branch, such information, suggestions, esti3 mates, and statistics as it requires for the pur4 poses of its review and report. Each such de5 partment, bureau, agency, board, commission,

6 office, establishment, instrumentality, or com7 mittee shall, to the extent not prohibited by

8 law, furnish such information, suggestions, esti9 mates, and statistics directly to the Commis10 sion, upon request made by the Chair (Co11 Chairs, if elected).

12 (B) TREASURY DEPARTMENT.—The Sec13 retary of the Treasury is authorized on a non14 reimbursable basis to provide the Commission

15 with administrative services, funds, facilities,

16 staff, and other support services for the per17 formance of the Commission’s functions.

18 (C) GENERAL SERVICES ADMINISTRA19 TION.—The Administrator of General Services

20 shall provide to the Commission on a non21 reimbursable basis such administrative support

22 services as the Commission may request.

23 (D) JOINT COMMITTEE ON TAXATION.—

24 The staff of the Joint Committee on Taxation

25 is authorized on a nonreimbursable basis to
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1 provide the Commission with such legal, eco2 nomic, or policy analysis, including revenue esti3 mates, as the Commission may request.

4 (E) OTHER ASSISTANCE.—In addition to

5 the assistance set forth in subparagraphs (A),

6 (B), (C) and (D), departments and agencies of

7 the United States are authorized to provide to

8 the Commission such services, funds, facilities,

9 staff, and other support services as they may

10 deem advisable and as may be authorized by

11 law.

12 (5) POSTAL SERVICES.—The Commission may

13 use the United States mails in the same manner and

14 under the same conditions as departments and agen15 cies of the United States.

16 (6) GIFTS.—The Commission may accept, use,

17 and dispose of gifts or donations of services or prop18 erty in carrying out its duties under this section.

19 (e) STAFF OF THE COMMISSION.—

20 (1) IN GENERAL.—The Chair (Co-Chairs, if

21 elected), in accordance with rules agreed upon by the

22 Commission, may appoint and fix the compensation

23 of a staff director and such other personnel as may

24 be necessary to enable the Commission to carry out

25 its functions without regard to the provisions of title
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1 5, United States Code, governing appointments in

2 the competitive service, and without regard to the

3 provisions of chapter 51 and subchapter III or chap4 ter 53 of such title relating to classification and

5 General Schedule pay rates, except that no rate of

6 pay fixed under this subsection may exceed the

7 equivalent of that payable to a person occupying a

8 position at level V of the Executive Schedule under

9 section 5316 of title 5, United States Code. Any

10 Federal Government employee may be detailed to

11 the Commission without reimbursement from the

12 Commission, and such detailee shall retain the

13 rights, status, and privileges of his or her regular

14 employment without interruption.

15 (2) CONSULTANT SERVICES.—The Commission

16 is authorized to procure the services of experts and

17 consultants in accordance with section 3109 of title

18 5, United States Code, but at rates not to exceed the

19 daily rate paid a person occupying a position at level

20 IV of the Executive Schedule under section 5315 of

21 title 5, United States Code.

22 (f) COMPENSATION AND TRAVEL EXPENSES.—

23 (1) COMPENSATION.—

24 (A) IN GENERAL.—Except as provided in

25 subparagraph (B), each member of the Com-
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1 mission may be compensated at not to exceed

2 the daily equivalent of the annual rate of basic

3 pay in effect for a position at level IV of the

4 Executive Schedule under section 5315 of title

5 5, United States Code, for each day during

6 which that member is engaged in the actual

7 performance of the duties of the Commission.

8 (B) EXCEPTION.—Members of the Com9 mission who are officers or employees of the

10 United States or Members of Congress shall re11 ceive no additional pay on account of their serv12 ice on the Commission.

13 (2) TRAVEL EXPENSES.—While away from

14 their homes or regular places of business in the per15 formance of services for the Commission, members

16 of the Commission shall be allowed travel expenses,

17 including per diem in lieu of subsistence, in the

18 same manner as persons employed intermittently in

19 the Government service are allowed expenses under

20 section 5703 (b) of title 5, United States Code.

21 (g) REPORT OF THE COMMISSION; TERMINATION.—

22 (1) REPORT.—Not later than 18 months after

23 the date of the first meeting of the Commission, the

24 Commission shall submit a report to the Committee

25 on Ways and Means of the House of Representatives
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1 and the Committee on Finance of the Senate. The

2 report of the Commission shall describe the results

3 of its review (as described in subsection (c)(2)), shall

4 make such recommendations for fundamental reform

5 and simplification of the Internal Revenue Code of

6 1986 as the Commission considers appropriate, and

7 shall describe the expected impact of such rec8 ommendations on the economy and progressivity and

9 general administrability of the tax laws.

10 (2) TERMINATION.—

11 (A) IN GENERAL.—The Commission, and

12 all the authorities of this section, shall termi13 nate on the date which is 90 days after the date

14 on which the report is required to be submitted

15 under paragraph (1).

16 (B) CONCLUDING ACTIVITIES.—The Com17 mission may use the 90-day period referred to

18 in subparagraph (A) for the purposes of con19 cluding its activities, including providing testi20 mony to committees of Congress concerning its

21 report and disseminating that report.

22 (h) AUTHORIZATION OF APPROPRIATIONS.—There is

23 authorized to be appropriated such sums as may be nec24 essary for the activities of the Commission. Until such

25 time as funds are specifically appropriated for such activi-
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1 ties, $2,000,000 shall be available from fiscal year 2001

2 funds appropriated to the Treasury Department, ‘‘Depart3 mental Offices’’ account, for the activities of the Commis4 sion, to remain available until expended.

5 SEC. 5. TIMING OF IMPLEMENTATION.

6 In order to ensure an easy transition and effective

7 implementation, the Congress hereby declares that any

8 new Federal tax system should be approved by Congress

9 in its final form no later than July 4, 2004. If a new Fed10 eral tax system is not so approved by July 4, 2004, then

11 Congress shall be required to vote to reauthorize the Inter12 nal Revenue Code of 1986.

Æ