E 944 CONGRESSIONAL RECORD — Extensions of Remarks May 3, 1995

Turks carried out their massacre without outside attention or interference. The genocide

began on April 24, 1915, with a sweep of Armenian leaders. It did not end until 1923 when

the entire Armenian population of 2 million had

been killed or deported.

It is estimated that 1.5 million Armenians

died at the hands of the Ottoman Turks—half

of the world’s Armenian population at the time.

By 1923 the Turks had successfully erased

nearly all remnants of the Armenian culture

which had existed in their homeland for 3,000

years.

As we look back on this tragedy today, we

see the memory of the victims insulted by

those who say the genocide did not happen.

A well-funded propaganda campaign forces

the Armenian community to prove and reprove the facts of the genocide. This is itself

a tragedy for a people who would rather devote their energy to commemorating the past

and building the future.

I stand here today to say the genocide did

happen. Nobody can erase the painful memories of the Armenian community. Nobody can

deny the photos and historical references. Nobody can deny that few Armenians live where

millions lived over 80 years ago.

It is our responsibility and our duty to keep

the memories of the genocide alive. A world

that forgets these tragedies is a world that will

see them repeated again and again. The story

of this and other genocides must be known by

all.

We must also honor the victims who perished so brutally. We cannot right the terrible

injustice inflicted upon the Armenian community and we can never heal the wounds. But

by properly commemorating this tragedy, Armenians will at least know the world has not

forgotten the misery of those years. Only then

will Armenians begin to receive the justice

they deserve.

DIVIDENDS RECEIVED DEDUCTION

HON. BILL ARCHER OF TEXAS

HON. SAM GIBBONS OF FLORIDA

IN THE HOUSE OF REPRESENTATIVES

ports suggest that corporate taxpayers may be

Mr. ARCHER. Mr. Speaker, recent news reWednesday, May 3, 1995

fattempting to dispose of stock of other corporations through stock redemption transactions that are the economic equivalent of

sales. The transactions are structured so that

the redeemed corporate shareholder apparently expects to take the position that the

transaction qualifies for the corporate dividends received deduction and therefore substantially avoids the payment of full tax on the

gain that would apply to a sales transaction.

For example, it has been reported that Seagram Co. intends to take the position that the

corporate dividends received deduction will

eliminate tax on significant distributions received from DuPont Co. in a redemption of almost all the DuPont stock held by Seagram,

coupled with the issuance of certain rights to

reacquire DuPont stock.—See, for example

Landro and Shapiro, Hollywood Shuffle, Wall

Street Journal pp. A1 and A11, April 7, 1995;

Sloan, For Seagram and DuPont, a Tax Deal

that No One Wants to Brandy About, Washington Post p.D3, April 11, 1995; Sheppard,

Can Seagram Bail Out of DuPont without Capital Gain Tax, Tax Notes Today, 95 TNT 75–

4, April 10, 1995.—Moreover, it is reported

that investment bankers and other advisors

are actively marketing this potential transaction. We would like to express our appreciation to Congressman STEPHEN HORN for his efforts in bringing this issue to our attention.

Today we introduce legislation intended to

curtail the use of such transactions immediately. We believe the approach adopted in

the bill is the correct approach, given the incentives under present law for corporations to

structure transactions in an attempt to obtain

the benefits of the dividends received deduction. We welcome comments on the bill and

recognize that additional or alternative legislative changes may also be appropriate. However, it is anticipated that any legislative

change that is enacted would apply to transactions after May 3, 1995.

No inference is intended that any transaction of the type described in the proposed

legislation would in fact produce the results

apparently sought by the taxpayers under

present law. The bill does not address and

does not modify present law regarding whether a transaction would otherwise be eligible for

the dividends received deduction, nor is it intended to restrict the IRS or Treasury Department from issuing guidance regarding these or

other issues.

The bill is directed at corporate shareholders because it is believed that the existence of

the dividends received deduction under

present law creates incentives for corporate

taxpayers to report transactions selectively as

dividends or sales. No inference is intended

that any transaction characterized as a sale

under the bill necessarily would be so characterized if the shareholder were an individual.

DESCRIPTION OF THE BILL

Under the bill, except as provided in regulations, any non pro rata redemption or partial

liquidation distribution to a corporate shareholder that is otherwise eligible for the dividends received deduction under section 243,

244, or 245 of the code would be treated as

a sale of the stock redeemed. The bill applies

to dividends to 80-percent shareholders that

would qualify for the 100-percent dividends received deduction as well as to other transactions qualifying for a lesser dividends received deduction. It is not intended to apply to

dividends that are eliminated between members of affiliated groups filing consolidated returns. However, it is expected that the Treasury Department will consider whether any

changes to the consolidated return regulations

would be necessary to prevent avoidance of

the purposes of the bill.

The bill would replace the present law provision (sec. 1059(e)(1)) that requires a corporate shareholder to reduce basis—but not

recognize immediate gain—in the case of certain non pro rata redemptions or partial liquidation distributions.

It is intended that the bill apply to all non

pro rata redemptions except to the extent provided by regulations.

The bill retains the existing Treasury Department regulatory authority, contained in section

1059(g) of present law, to issue regulations,

including regulations that provide for the application of the provision in the case of stock

dividends, stock splits, reorganizations, and

other similar transactions and in the case of

stock held by pass through entities. Thus, the

Treasury Department can issue regulations to

carry out the purposes or prevent the avoidance of the bill.

It is expected that recapitalizations or other

transactions that could accomplish results

similar to any non pro rata redemption or partial liquidation will also be subject to the provisions of the bill as appropriate.

It is also expected that redemptions of

shares held by a partnership will be subject to

the provision to the extent there are corporate

partners.

There are concerns that taxpayers might

seek to structure transactions to take advantage of sale treatment and inappropriately recognize losses. It is expected that the Treasury

Department will by regulations address these

and other concerns, including by denying

losses in appropriate cases or providing rules

for the allocation of basis.

It is anticipated that the private tax bar and

other tax experts will provide input concerning

the proposed legislation before its enactment.

It is hoped that this process will identify any

problems with the proposed legislation and potential improvements. Comment is encouraged

in particular with respect to the loss disallowance provision, including whether the loss disallowance should be mandatory. Comment is

also encouraged as to whether additional transition should be provided for existing rights to

redeem contained in the terms of outstanding

stock or otherwise.

EFFECTIVE DATE

The bill would be effective for redemptions

occurring after May 3, 1995, unless pursuant

to the terms of a written binding contract in effect on May 3, 1995 or pursuant to the terms

of a tender offer outstanding on May 3, 1995.

No inference is intended regarding the tax

treatment of any transaction within the scope

of the bill. For example, no inference is intended that any transaction within the scope of

the bill would otherwise be treated as a sale

or exchange under the provisions of present

law. At the same time, no inference is intended that any distribution to an individual

shareholder that would be within the scope of

the bill if made to a corporation should be

treated as a sale or exchange to that individual because of the existence of the bill.

BROADCAST OWNERSHIP BILL

fHON. CLIFF STEARNS OF FLORIDA

IN THE HOUSE OF REPRESENTATIVES

Wednesday, May 3, 1995

Mr. STEARNS. Mr. Speaker, today, I am

proud to introduce a bipartisan bill to reduce

the restrictions on ownership of broadcasting

stations and other media of mass communication. Congressman RALPH HALL from Texas,

along with a number of my esteemed Republican colleagues support this bill which repeals

antiquated rules and regulations and brings

broadcasting up to date with technology. The

bill states that the FCC is not to prescribe or

enforce any regulations concerning cross ownership. The only rules that the FCC can make

address national caps and local ownership

combinations. The video marketplace has undergone significant changes. Today, most

Americans have access not only to many
May 3, 1995 CONGRESSIONAL RECORD — Extensions of Remarks E 945

over-the-air broadcast channels, but also subscribe to cable, or own a home satellite receiver. With telephone company entry into the

video marketplace, American consumers will

have additional options from which to choose

their programming. Despite all these advances

in technology broadcasting should remain a

vital component in the information age. Broadcast television occupies a unique position in

the world of telecommunications. Broadcasting

is not only the only technology available to

100 percent of American households, the content it provides is free. The only cost is for a

receiver.

The bill does the following: First, states that

the FCC shall not prescribe or enforce rules

limiting crossownership of mediums of mass

communications; second, increases the aggregate national audience reach from 25 to 35

percent upon enactment. One year later allows the cap to increase to 50 percent. The

bill contains a built-in safeguard; within 2

years of enactment of the bill, the FCC is to

commission a study to ensure competition in

the marketplace; third, the bill allows certain

station ownership combinations in a market:

UHF/UHF; UHF/VHF and if the Commission

determines that it will not harm competition

and will not harm the preservation of a diversity of voices in the local market, VHF/VHF

combinations; fourth, the bill also repeals all

radio ownership restrictions.

I might add that this bill will be presented as

an amendment to the communications act of

1995, which has the full support of Chairman

BLILEY and Chairman FIELDS and as previously

mentioned, it is bipartisan.

STEVENS, HONOR ROLL TEACHER

CONGRATULATING CHERYL

f

HON. KEN BENTSEN OF TEXAS

IN THE HOUSE OF REPRESENTATIVES

Wednesday, May 3, 1995

Mr. BENTSEN. Mr. Speaker, I rise today to

congratulate Cheryl D. Stevens, of Roberts Elementary School in Houston. TX. Ms. Stevens

has been named by the Association of

Science-Technology Centers to its 1995 Honor

Roll of Teachers.

The Children’s Museum of Houston, which

nominated Ms. Stevens for the honor roll, recognized her remarkable dedication to the

world of science and teaching, Ms. Stevens

excels in both at Roberts Elementary, where

she teaches science to kindergarten through

fifth graders. She and her students are participants in Science-by-Mail, a pen pal program

designed to match fourth through ninth graders with scientists around the country. Over

20,000 kids and 20,000 teachers are involved

in Science-by-Mail. In addition to Science-byMail’s regular pen pal program, Ms. Stevens

and her classes have participated in a special

Science-by-Mail teleconference, Teltrain XI, a

video town meeting televised around the country for scientists and students.

Ms. Stevens is also active in the Annual

Meet Your Scientist Day, which will take place

this year on Saturday, May 6, 1995. Over 300

school children will meet with scientists to

learn more about the world of science and

technology. This year, Ms. Stevens will be

honored for her recognition as one of ASTC’s

honor roll teachers for 1995.

Ms. Stevens is a member of the Magic

School Bus Advisory Committee, sponsored

by the National Science Foundation and the

Children’s Museum of Houston. She also

works actively on the Science and Technology

Committee and the Building Blocks for a

Healthy Classroom Conference at the museum.

Only 43 teachers were named to the 10th

annual ASTC’s honor roll. Each teacher has

gone beyond the normal requirements of their

school curriculum by using the resources of

their local science center to inspire, educate,

and stimulate students’ interest in science and

technology. I salute Ms. Stevens on her accomplishments and especially for her commitment to teaching. She is an outstanding role

model for Houston’s teachers and students.

Her placement on ASTC’s Honor Roll of

Teachers is well-deserved.

OPENING OF THE SPECIAL EXHIBIT ‘‘DEFENDING RELIGIOUS

fLIBERTY’’

HON. CHRISTOPHER H. SMITH OF NEW JERSEY

IN THE HOUSE OF REPRESENTATIVES

Wednesday, May 3, 1995

Mr. SMITH of New Jersey. Mr. Speaker,

thank you for this opportunity to speak out for

religious freedom.

The worldwide religion known as the Baha’i

Faith is one of the most peace-loving groups

in the world—and yet one of the most consistently persecuted.

The Baha’i Faith began in Persia in the

1840’s, and spread rapidly through the Mideast, where Islam has historically been dominant. Though the Baha’i Faith now has adherents all around the world, including all 50

States of the United States, its historic links to

the Mideast have helped bring it repeatedly

into conflict with Islam.

Islam, like most other world religions, teaches certain truths that its adherents take to be

absolute. Baha’is take a different approach,

seeing all religions as successive revelations,

each with a partial truth.

These questions are faced, one way or another, by all men and women of conscience.

And it is inevitable that many of us will come

out differently on these questions. In decent

societies—in free societies—we respect each

other’s freedom of conscience. If we seek to

persuade one another, we do it in friendship,

and with respect.

But in some parts of the world, force is still

used to settle religious issues. In Iran, with its

extremist regime, the fact that the Baha’is

question Islam’s claim to represent God’s full

and final revelation makes them a target of

unceasing persecution. The fact that the

Baha’i Faith arose on territory in which Islam

has been dominant for some 1,400 years, and

among ethnic groups with a long Islamic heritage, seems to be an unbearable irritant to the

Iranian regime. They view the Baha’is as

worse than mere adherents of another religion—which, in their eyes, is quite bad

enough. They view them as something worse:

as heretics, as conscious destroyers of Islam.

For those of us who have met Baha’i believers—even those of us who come from a religious perspective quite different from theirs—

the notion that they would be destroyers of

anything is simply absurd.

Yet Baha’is in Iran have no legal rights, despite being the largest religious minority in that

country. More than 200 Iranian Baha’is, including women and teenage girls, have been executed for their faith since 1979. Thousands

have faced torture and imprisonment for refusing to convert to Islam. Tens of thousands

have lost their jobs, and been forced to repay

past salaries or pensions. All Baha’i students

were expelled from Iranian universities by

1982.

President Clinton has placed Iran’s treatment of its Baha’i minority on a par with ethnic

cleansing in the former Yugoslavia. Given the

professed intention of the Iranian regime to

block the progress and development of the

Baha’i Faith. I would have to agree with the

President on this.

I salute my colleagues for sponsoring this

exhibition on the persecution of the Baha’i

Faith community. I hope it will inspire all who

see it to stand up for religious freedom.

A SALUTE TO SMALL BUSINESS

Thank you very much.

fWEEK

HON. KWEISI MFUME

OF MARYLAND

IN THE HOUSE OF REPRESENTATIVES

Wednesday, May 3, 1995

Mr. MFUME. Mr. Speaker, I rise today to remind my colleagues, as well as the American

public, that the week beginning April 30 is National Small Business Week, and I would like

to take this opportunity to discuss small and

minority-owned businesses and the role they

play in our economy.

Not all Americans realize how important

small businesses are to our national economy.

Although the definition of a small business is

sometimes varied, the fact of the matter is that

firms with less than 100 employees account

for more than 98 percent of the Nation’s enterprises. Furthermore, between September 1991

and September 1992, jobs in small business

dominated industries increased by 177,700

which helped to offset the 400,000 job decrease in industries dominated by large businesses.

While nonminority men still own the lion’s

share of small businesses and still represent

the largest number of sales, minority- and

women-owned businesses are increasing in

size and number. Minority-owned businesses

have increased from approximately 380,000 in

1969 to 1.5 million today. Despite this increase, however, minorities are still not fairly

represented in small business ownership;

while minorities comprise nearly 20 percent of

the total U.S. population, they own less than

9 pecent of American businesses.

In addition to playing an important role in

the national economy, minority- and womenowned businesses also tend to play important

roles in their communities. In many poor,

urban communities, minority-owned businesses are often the only commercial establishments available. Furthermore, as was demonstrated in a recent Department of labor

study, minority- and women-owned businesses

are more likely to hire minorities and women

than are businesses owned by nonminority

men. In short, minority- and women-owned