E 1056 CONGRESSIONAL RECORD — Extensions of Remarks May 17, 1995

110%, then divided by 4 to obtain a quarterly

estimated payment amount.

The second method allows the entity to

calculate estimated tax based on the current

year income. Estimated current year income

is multiplied by the same 34% or 39.6% statutory tax rate and divided into four quarterly

estimated payments.

The third method uses similar calculations

to calculate its payments based upon

annualized current year quarterly income,

similar to the rules presently applicable to

individuals or C corporations.

The payments of tax are due on the 15th

day of the 3rd, 5th, 8th, and 12th months of

the taxable year of the entity.

In addition, the entity makes a one-time

payment with its fiscal year election that

applies to the short period created (if any) by

moving from a calendar year to a fiscal year.

This payment is at the same statutory rate

and is based on short period income.

The election terminates if the owners of

more than half the entity’s equity consent to

such revocation, or when the entity itself

terminates. (‘‘Inadvertent terminations’’ of

an S corporation however, will not terminate

the election.) Subsequent re-elections may

not be made by that same entity for 5 tax

years unless the entity obtains consent from

the Internal Revenue Service. Rules will also

be provided under regulations for successor

entities.

A penalty for underpayment will be due

from the entity if it does not make the required level of estimated tax payments. The

penalty is based on the amount of

underpayment and continues until appropriate payment is made or until the April

15th that the owners report their share of entity income. At that point, the owners become liable for the tax and any existing

underpayment penalties that may be imposed. An exception to the entity level penalty is provided which parallels the analogous exception for individual taxpayers (casualty, unusual circumstances, etc.)

EFFECT ON OWNER

The quarterly estimated payments made

by the entity are ‘‘passed through’’ to the

owners of the entity as a credit on their individual tax returns. Since the entity is making these payments on behalf of the owners,

they may reduce their quarterly estimated

payments for their shares of the entity level

payment. When they receive an annual information report from the entity (Schedule K–

1), it will list their share of fiscal year income as well as their annual share of the

credit. The amount of the credit allocated to

each owner is based upon his or her share of

the entity income (no special allocations of

the credit are allowed). The credit is reported on an owner’s individual income tax

return as if it were estimated taxes paid by

the owner.

In making their own quarterly estimated

payments, the owners may rely on amounts

reported by the entity as paid, even if errors

occur or payments are not made, so that

penalties accrue only at the entity level. If

payments are overpaid or underpaid compared with those reported to the owners,

such amounts are treated as any other tax

due or overpaid under Subtitle A of the Internal Revenue Code.

TIERED STRUCTURES

No election may be made by an entity that

is part of a tiered structure under this proposal. Additionally, if an entity becomes

part of a tiered structure the election is terminated. The tiered structure rules do not

apply, however, if all of the owners are partnerships and S corporations that elect the

same fiscal year.

ALTERNATIVE TAX YEARS

Nothing in this provision will affect an entity’s right to a fiscal year that exists under

current law; for example, under the natural

business year tests. The provision also allows for retention of fiscal years by any entities that currently use a fiscal year under

Rev. Proc. 87–32.

OLD SECTION 444

The new provision would preclude any new

elections under the old section 444. However,

existing 444 elections would be allowed to

continue if the entity so desired. Alternatively, an entity with an existing section

444 election, may elect instead under this

new provision thereby entitling it to a refund of its current 444 required payments, or

a credit of such required payments toward

its new estimated tax payment requirements.

DE MINIMIS AND REASONABLE CAUSE EXCEPTION

The provision provides for an exception to

payment of any entity level tax if such tax

would be below $5,000. The provision also provides for the relief of section 7519 penalties if

reasonable cause can be shown.

THE RIGHT ROAD

fHON. RON PACKARD

OF CALIFORNIA

IN THE HOUSE OF REPRESENTATIVES

Wednesday, May 17, 1995

Mr. PACKARD. Mr. Speaker, today we

begin an historic journey. For the first time in

a generation, we will lay out a road map toward a balanced budget. Americans understand this is a trip we all must take. If we fail

in this mission, frankly, this country is through.

I mean we are headed the way of Mexico into

economic collapse.

The Nation is currently $5 trillion in debt spiraling toward a debt of $8 trillion by 2010. We

spend almost half of our budget on interest

alone—half. Soon we will spend more on the

interest on the debt than anything else—including entitlements and defense combined.

The American dream is starting to evolve into

the American nightmare.

For a nation that prides itself on leaving a

better country for our children, we are instead

leaving a legacy of fiscal and moral bankruptcy. Some of you may know that I have a

relatively large family—seven children and, as

of a couple of weeks ago, 31 grandchildren.

Since I began my service in Congress, I

have always measured everything I do by one

standard—what legacy am I leaving to them

and to our Nation’s children and grandchildren?

Washington’s lack of discipline is crushing

our opportunity and leaving our children with a

devastating debt. We cannot continue down

this destructive path.

In fact, my new grandchild, born just a couple of weeks ago, will pay nearly $200,000

over her lifetime. I cannot leave this legacy to

her, and I am sure most Americans do not

want to leave this legacy to their children and

grandchildren. People outside Washington

know this and have asked us to lead them

down a new road—toward a balanced budget.

I say, let’s get going.

GREAT LAKES INITIATIVE

STATEMENT

HON. DAVID E. BONIOR OF MICHIGAN

IN THE HOUSE OF REPRESENTATIVES

Wednesday, May 17, 1995

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

express my strong concern over any attempts

to further weaken the Great Lakes Initiative. I

understand there are those who would still like

to make States’ participation voluntary. That

would completely undermine one of the key

initiatives that has been taken to improve

water quality in the Great Lakes region. I

would strongly oppose those efforts.

The Transportation and Infrastructure Committee worked out a compromise on this issue.

Like every compromise, it doesn’t make everybody happy. I believe it is still too ambiguous.

It’s an open invitation to lawsuits. And will ultimately weaken the GLI. But it is a true compromise.

Further efforts to weaken the GLI would go

too far. It would turn the clock back. For those

of us who live in the region, the Great Lakes

have a profound effect on who we are as a

people and how we live our lives.

The Great Lakes provide our drinking water,

they provide our largest recreational resource,

they are tremendously important to our economy, and they shape our quality of life. They

are our Yellowstone, our Grand Canyon, our

Everglades. The Great Lakes ought to be protected like the national treasure they are. Unfortunately, a handful of polluter interests

seem to have a burning desire to weaken the

landmark Great Lakes Initiative, which will provide uniform water quality standards for all of

the Great Lakes States. For that reason alone,

I would oppose the current clean water bill.

Beyond the GLI, however, events in Lake

St. Clair taught many of us in Michigan how

important our environment is for our quality of

life and for our economy. In Michigan, clean

water is jobs. Without clean water, we lose

thousands of jobs in our State.

Sport fishing in that lake alone is estimated

at $140 million annually. Nonfishing boaters

and beachgoers spend more than $1 billion

each year on boats, accessories, marina slips,

gas, restaurants and other items. Last year’s

ban on swimming cost the most popular beach

in the Detroit area $500,000. This wasn’t just

a quality of life problem—our economic benefits of the lake were destroyed last year.

During most of the summer, profits at local

marinas were down. Many local businesses

were devastated. In just 2 months time, losses

to local businesses ran into the millions of dollars. Our biggest concern is that it could happen again. In fact, with this type of legislation

here before us today, it could happen anywhere and everywhere.

In this bill, written by lobbyists for some of

this country’s most notorious polluters, we say

to Americans—we don’t care about the water

you drink, we don’t care about the pollution of

your beaches, and we don’t care about one of

the most important recreational and economic

resources you have.

That’s not common sense. We must protect

our water—not polluter interests. We should

be strengthening our standards—not weakening them. We should be debating ways to

emulate model regulatory programs like the

GLI—not gutting them.
May 17, 1995 CONGRESSIONAL RECORD — Extensions of Remarks E 1057

The GLI is a shining example of current regulatory approaches. It gives maximum flexibility to the States. In 1986, the Governors of all

eight Great Lakes States entered into discussions with the EPA. They literally sat at the

table and drafted model regulations to raise

our water quality standards. On March 13 of

this year, the EPA accepted the Governors’

suggestions and issued a final rule on the

Great Lakes Initiative.

Any efforts to undo all of this hard work

would be inconsistent with the long-term bipartisan effort to provide uniform water quality

standards among Great Lakes States. It will

say that those 9 years of negotiating and careful thought are merely voluntary guidelines.

Under the GLI, a specific numeric criteria

has been set to protect aquatic life, wildlife,

and human health in our region. The GLI sets

limits on PCB’s, dioxin, DDT, benzene, and

chlordane just to name a few. It offers guidance yes, but guidance is useless unless it is

implemented.

People in my State remember, and are suffering even today from PCB’s. Mothers who

ate a lot of fish from the lakes during pregnancy are seeing their infants developing at a

slower rate than others. Higher rates of cancer

have occurred in communities whose drinking

water comes from the Great Lakes. Preliminary research indicates that PCB’s and other

pollutants may be linked with breast cancer in

women. People want their water to be protected from toxins and pollutants.

All the GLI is trying to do is to ensure that

every State in the region has the same water

quality standards. It simply levels the playing

field for all eight States. We don’t want one

state undercutting another and driving our

standards to lower and lower levels. If we

make it voluntary, we undercut the whole purpose of the GLI. We will start the downward

spiral of pollution and toxic contamination of

our lakes all over again. For those of us near

Lake St. Clair, last summer we got a reminder

of what that could be like. We don’t want to go

back.

We are talking about 95 percent of this Nation’s fresh water. We are talking about lakes

that provide 23 million people with their drinking water. We are talking about a multibillion

dollar economic resource. We are talking

about a national treasure.

The American people thought we reached a

consensus—that we should protect our water.

We have made progress. In the Great Lakes

region, the GLI was an important part of that

progress. Let’s not turn back the clock. Let’s

move forward to make our water cleaner and

safer. I urge my colleagues to support clean

water and to support the GLI.

NAMING PS 165 THE EDITH

BERGTRAUM SCHOOL

f

HON. GARY L. ACKERMAN OF NEW YORK

IN THE HOUSE OF REPRESENTATIVES

Wednesday, May 17, 1995

Mr. ACKERMAN. Mr. Speaker, I rise today

to join with my constituents in the Fifth Congressional District of New York and with the

many friends of the Bergtraum family as they

gather on May 19 to honor the memory of the

renowned educator Edith K. Bergtraum, and to

name Public School 165 in her memory.

Edith was both a personal friend and a dedicated member of the community. Her level of

involvement and dedication created a yardstick by which all such activity can be measured.

A long-time activist in the Kew Gardens Hills

and Flushing communities, Edith was a product of the New York City school system as

well as a graduate of Hunter College of the

City University of New York. Her sense of

community brought her beyond the boundaries

of her neighborhood; she quickly assumed

leadership roles in the Kew Gardens Hills

Jewish Center, the Queens County Democratic Committee, and the Mayor’s Commission on the Status of Women.

Yet it was in the field of education that Edith

had her most significant impact. She began

her educational career when PS 165 opened

and her son entered the first grade in a school

that had 3,000 children but only 1,000 seats.

With the support of her husband, Murry

Bergtraum (a most powerful advocate for the

schools children of New York City who would

later become president of the City’s Board of

Education), Edith quickly and effectively joined

the ongoing fight for the rights and education

of children.

When Murry became the first president of

the PS 165 Parents-Teachers Association,

Edith assumed a seat on the executive board.

Their joint efforts to alleviate the overcrowding

in the school were successful, as three more

elementary schools—PS 200, 201, and 219—

were constructed nearby. When her children

moved onto Junior High School 218 and Forest Hills High School, Edith followed, enriching

these schools with the same dynamism that

she brought to PS 165.

As her involvement grew, so did recognition

of her capabilities. In 1974, Edith was elected

to Community School Board 25, a position she

held for 19 years. During this period, she was

elected president of the local school board.

She also somehow found the time to serve on

citywide educational committees on special

education, personnel and budget. In 1993, she

was named the Queens borough representative on the search committee to select a new

schools chancellor.

Mr. Speaker, as the people of Community

School District 25 and those throughout New

York City gather on May 19 to honor Edith K.

Bergtraum, it is my hope that we will continue

to be inspired and dedicated to the education

of our children by following the most unique

example she has set.

I call on all my colleagues in the House of

Representatives to join me now in expressing

our thanks and congratulations for Edith’s

good works to her family: her son, Howard

Bergtraum, and daughter-in-law, Susan

Bergtraum, and their children, Matthew, Jordan, and Andrea Bergtraum; Edith’s daughter

Judy Bergtraum; and Edith’s daughter Marcia

Bergtraum-Williams, and son-in-law, Dan Williams, and their children, Harel and Marc Williams; Edith’s brother and sister-in-law, Stanley and Bernice Bergtraum; and Edith’s sister

and brother-in-law, Nat and Janice Sommer.

With the dedication of the Edith Bergtraum

School, we ensure that the people of New

York will long remember a dynamic educator,

a compassionate humanitarian, and a special

friend.

ELIMINATE THE MARRIAGE PENALTY FOR THE EXCLUSION OF

GAIN ON THE SALE OF A PRINCIPAL RESIDENCE BY AN INDIVIDUAL OVER 55

HON. RICHARD E. NEAL OF MASSACHUSETTS

IN THE HOUSE OF REPRESENTATIVES

Wednesday, May 17, 1995

Mr. NEAL of Massachusetts. Mr. Speaker,

today, I introduced legislation to correct an inequity in on our current tax system. Under current law, an individual over the age of 55 is allowed a one-time exclusion of capital gain on

the sale of a principal residence. This onetime exclusion invokes a marriage penalty.

This legislation would eliminate the marriage

penalty for the one-time exclusion of gain on

the sale of a principal residence.

For example, two individuals over the age of

55 who decide to marry and sell their homes

would only receive an exclusion of $125,000.

Whereas, if they did not marry and sold their

homes they each would be able to receive an

exclusion for $125,000. This legislation addresses this problem. The legislation eliminates the marriage penalty by disregarding

elections made before the date of marriage or

elections made on homes sold after the date

of marriage, but purchased before the marriage.

Fairness is an important element of tax policy. The current policy on the one-time exclusion assists individuals who are approaching

retirement and it is a valuable exclusion. Our

Tax Code should be fair and not discriminate

against basic values such as marriage. The

decision to marry should not be based on financial reasons.

I urge you to correct this inequity and support this legislation.

5715 YEARS OF EXPERIENCE IN

fONE ROOM

HON. FORTNEY PETE STARK OF CALIFORNIA

IN THE HOUSE OF REPRESENTATIVES

Wednesday, May 17, 1995

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

share with my colleagues news of a special

gathering that will take place on Thursday,

May 18, in Castro Valley, CA. Over 50 senior

citizens, each over 100 years old, will join together at Eden Medical Center for the sixth

annual 100+ celebration. As best I can calculate it, 5715 years of experience and memories will be shared by 56 people at this unique

gathering.

Every one of us has looked to an elder, perhaps a grandparent or great-grandparent, at

different times during our lives for the wise

counsel that only experience can provide.

Their wit and wisdom speak of lessons

learned; their knowing smiles are a reflection

on decades of experience. I know my own

mother, who is just 86 years old, has taught

this incorrigible son an encyclopedia of lessons!

While I cannot be there on Thursday, I want

to join Eden Hospital in honoring our local

centenarians. The most senior of these senior

citizens are 106, including Vera Sherman and

Anna Simons. There are also five 105 year-