I 
109TH CONGRESS 
1ST SESSION 
H. R. 974 
To establish the Corporate Subsidy Reform Commission to review inequitable 
Federal subsidies and make recommendations for termination, modifica-
tion, 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 
FEBRUARY 17, 2005 
Mr. SMITH of Washington (for himself, Mr. SHAYS, Mr. SHERMAN, Mr. 
ENGLISH of Pennsylvania, Mr. KIND, Mr. WOLF, Mr. EMANUEL, Mr. 
HEFLEY, and Mr. DAVIS of Florida) introduced the following bill; which 
was referred to the Committee on 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 provi-
sions as fall within the jurisdiction of the committee concerned 
A BILL 
To establish the Corporate Subsidy Reform Commission to 
review inequitable Federal subsidies and make rec-
ommendations 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 imple-
ment the recommendations. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Corporate Subsidy Re-
form Commission Act’’. 
SEC. 2. FINDINGS. 
The Congress finds that— 
(1) Federal subsidies, including tax advantages, 
which may have been enacted with a valid purpose 
for specific industries or industry segments can— 
(A) fall subject to abuse, causing unantici-
pated and unjustified windfalls to some indus-
tries and industry segments; or 
(B) become obsolete, anticompetitive, or no 
longer in the public interest, making such sub-
sidies unnecessary or undesired; 
(2) it is unfair to force the United States tax-
payer to support unnecessary subsidies, including 
tax advantages, that do not provide a substantial 
public benefit or serve the public interest; 
(3) the Congress has been unable to evaluate 
methodically those Federal subsidies that are unfair 
and unnecessary and require reform or elimination; 
and 
(4) a Commission to advise the Congress is es-
sential to a comprehensive review of such unfair cor-
porate subsidies and to the reform or elimination of 
such subsidies.
SEC. 3. PURPOSE. 
The purpose of this Act is to establish a fair and de-
liberative process that will result in the timely identifica-
tion, review, and reform or elimination of unnecessary and 
inequitable subsidies, including tax advantages, provided 
by the Federal Government to entities or industries en-
gaged in profit-making enterprises. 
SEC. 4. DEFINITION. 
For purposes of this Act, the term ‘‘inequitable Fed-
eral subsidy’’— 
(1) except as provided in paragraph (2), means 
a payment, benefit, service, or tax advantage that— 
(A) is provided by the Federal Government 
to any corporation, partnership, joint venture, 
association, or business trust other than— 
(i) a nonprofit organization described 
under section 501(c)(3) of the Internal 
Revenue Code of 1986 that is exempt from 
taxation under section 501(a) of the Inter-
nal Revenue Code of 1986; or 
(ii) a State or local government or In-
dian Tribe; and 
(B) provides an unfair competitive advan-
tage or financial windfall; and 
(2) does not include a payment, benefit, service, 
or tax advantage that is awarded for the purposes
of research and development in the broad public in-
terest on the basis of a peer reviewed or other open, 
competitive, merit-based procedure. 
SEC. 5. THE COMMISSION. 
(a) ESTABLISHMENT.—There is established in the 
legislative branch an independent commission to be known 
as the ‘‘Corporate Subsidy Reform Commission’’ (herein-
after in this Act referred to as the ‘‘Commission’’). 
(b) DUTIES.—The Commission shall— 
(1) examine the programs and laws of the Fed-
eral Government and identify any programs or laws 
that provide inequitable Federal subsidies; 
(2) review inequitable Federal subsidies; and 
(3) submit the report required under section 
6(c) to the Congress, making recommendations re-
garding the termination, modification, or retention 
of inequitable Federal subsidies. 
(c) LIMITATIONS.— 
(1) CREATION OF NEW PROGRAMS OR TAXES.— 
This Act is not intended to result in the creation of 
new programs or taxes. The Commission established 
in this section shall limit its activities to reviewing 
existing programs and laws with the goal of ensuring 
fairness and equity in the operation and application 
of such programs and laws.
(2) ELIMINATION OF AGENCIES AND DEPART-
MENTS.—The Commission— 
(A) shall limit its recommendations to the 
termination, modification, or retention of in-
equitable Federal subsidies; and 
(B) shall not recommend the termination 
of any Federal agency or department. 
(d) APPOINTMENT.— 
(1) MEMBERS.—The Commission shall be com-
posed of 8 members, of whom— 
(A) 2 shall be appointed by the Speaker of 
the House of Representatives; 
(B) 2 shall be appointed by the minority 
leader of the House of Representatives; 
(C) 2 shall be appointed by the majority 
leader of the Senate, one of whom shall be des-
ignated by the majority leader to serve as a co- 
chair; and 
(D) 2 shall be appointed by the minority 
leader of the Senate, one of whom shall be des-
ignated by the minority leader to serve as a co- 
chair. 
(2) CONSULTATION
REQUIRED.—The Speaker 
of the House of Representatives, the minority leader 
of the House of Representatives, the majority leader
of the Senate, and the minority leader of the Senate 
shall consult with one another before making any 
appointments under this subsection in order to 
achieve, to the maximum extent possible, fair and 
equitable representation of various points of view 
with respect to the matters to be studied by the 
Commission under subsection (b). 
(3) BACKGROUND.—The members shall rep-
resent a broad array of expertise covering, to the ex-
tent practical, all subject matter, programs, and 
laws the Commission is likely to review. 
(4) LIMITATION
ON
FEDERAL
OFFICER.—No 
officer or employee of a Federal agency may serve 
as a member of the Commission. 
(5) TERMS.—The members of the Commission 
shall be appointed for the life of the Commission. 
(e) MEETINGS.— 
(1) INITIAL MEETING.—No later than April 1, 
2006, the Commission shall conduct its first meet-
ing. 
(2) OPEN
MEETINGS.—Each meeting of the 
Commission shall be open to the public, except that 
in cases in which classified information, trade se-
crets, or personnel matters are discussed, the co- 
chairs may close the meeting. All proceedings, infor-
mation, and deliberations of the Commission shall be 
available, upon request, to the Chairman and rank-
ing minority member of the relevant Committee of 
the Congress having jurisdiction to report legislation 
regarding the subject matter thereof. 
(f) VACANCIES.—A vacancy on the Commission shall 
be filled in the same manner as the original appointment. 
(g) PAY AND TRAVEL EXPENSES.— 
(1) PAY.—Each member of the Commission, 
other than the co-chairs, shall be paid at a rate 
equal to the daily equivalent of the rate of basic pay 
for level IV of the Executive Schedule under section 
5315 of title 5, United States Code, for each day 
(including travel time) during which the member is 
engaged in the actual performance of duties vested 
in the Commission. 
(2) CO-CHAIRS.—The co-chairs shall be paid for 
each day referred to in paragraph (1) at a rate equal 
to the daily equivalent of the rate of basic pay for 
level III of the Executive Schedule under section 
5314 of title 5, United States Code. 
(3) TRAVEL EXPENSES.—Members of the Com-
mission shall receive travel expenses, including per 
diem in lieu of subsistence, in accordance with sec-
tions 5702 and 5703 of title 5, United States Code.
(h) DIRECTOR OF STAFF.— 
(1) QUALIFICATIONS.—The co-chairs shall ap-
point as Director an individual who has not, during 
the 12 months preceding the date of such appoint-
ment, served in any of the entities or industries that 
are or might be affected by any of the programs or 
laws the Commission intends to review. 
(2) PAY.—The Director shall be paid at the 
rate of basic pay payable for level IV of the Execu-
tive Schedule under section 5315 of title 5, United 
States Code. 
(3) REPORTS.—The Director shall submit peri-
odic reports on administrative and personnel matters 
to the co-chairs of the Commission and the chairman 
and ranking minority member of the Committee on 
Governmental Affairs of the Senate and the Com-
mittee on Government Reform of the House of Rep-
resentatives. 
(i) STAFF.— 
(1) ADDITIONAL PERSONNEL.—Subject to para-
graphs (2) and (4), the Director, with the approval 
of the Commission, may appoint and fix the pay of 
additional personnel. 
(2) APPOINTMENTS.—The Director may make 
such appointments without regard to the provisions
of title 5, United States Code, governing appoint-
ments in the competitive service, and any personnel 
so appointed may be paid without regard to the pro-
visions of chapter 51 and subchapter III of chapter 
53 of that title relating to classification and General 
Schedule pay rates. 
(3) LEGAL STAFF.—The Director shall appoint 
under paragraph (2) such professional legal staff as 
are necessary for the performance of the functions 
of the Commission. 
(4) DETAILEES.—Upon the request of the Di-
rector, the head of any Federal department or agen-
cy may detail any of the personnel of that depart-
ment or agency to the Commission to assist the 
Commission in accordance with an agreement en-
tered into with the Commission. 
(5) 
RESTRICTIONS
ON
PERSONNEL
AND 
DETAILEES.—The following restrictions shall apply 
to personnel and detailees of the Commission: 
(A) PERSONNEL.—No more than one-third 
of the personnel detailed to the Commission 
may be on detail from Federal agencies that 
deal directly or indirectly with the programs or 
laws the Commission intends to review.
(B) ANALYSTS.—No more than one-fifth of 
the professional analysts of the Commission 
may be persons detailed from a Federal agency 
that deals directly or indirectly with the pro-
grams or laws the Commission intends to re-
view. 
(C) LEAD ANALYST.—No person detailed 
from a Federal agency to the Commission may 
be assigned as the lead professional analyst 
with respect to an entity or industry that is or 
might be affected by the programs or laws the 
Commission intends to review if the person has 
been involved in regulatory or policy-making de-
cisions affecting any such entity or industry in 
the 12 months preceding such assignment. 
(D) DETAILEE.—A person may not be de-
tailed from a Federal agency to the Commission 
if, within 12 months before the detail is to 
begin, that person participated personally and 
substantially in any matter within that par-
ticular agency concerning the preparation of 
recommendations under this Act. 
(E) FEDERAL OFFICER OR EMPLOYEE.— 
No officer or employee of a Federal agency 
may—
(i) prepare any report concerning the 
effectiveness, fitness, or efficiency of the 
performance on the staff of the Commis-
sion of any person detailed from a Federal 
agency to that staff; 
(ii) review the preparation of such re-
port; or 
(iii) approve or disapprove such a re-
port. 
(F) LIMITATION ON STAFF SIZE.—(i) Sub-
ject to clause (ii), there may not be more than 
25 persons (including any detailees) on the 
staff at any time. 
(ii) The Commission may increase the 
number of its personnel in excess of the limita-
tion under clause (i), 15 days after submitting 
notification of such increase to the Committee 
on Governmental Affairs of the Senate and the 
Committee on Government Reform of the 
House of Representatives. 
(G) PROHIBITION
OF
COMPENSATION.— 
Members of the staff of the Commission who 
are full-time officers or employees of the United 
States may not receive additional pay, allow-
ances, or benefits by reason of their service for 
the Commission. 
(6) ASSISTANCE.— 
(A) IN GENERAL.—The Comptroller Gen-
eral of the United States may provide assist-
ance, including the detailing of employees, to 
the Commission in accordance with an agree-
ment entered into with the Commission. 
(B) 
CONSULTATION.—The 
Commission 
and the Comptroller General of the United 
States shall consult with the Committee on 
Governmental Affairs of the Senate and the 
Committee on Government Reform of the 
House of Representatives on the agreement re-
ferred to under subparagraph (A) before enter-
ing into such agreement. 
(j) OTHER AUTHORITY.— 
(1) EXPERTS AND CONSULTANTS.—The Com-
mission may procure by contract the temporary or 
intermittent services of experts or consultants pursu-
ant to section 3109 of title 5, United States Code. 
(2) LEASING.—The Commission may lease 
space and acquire personal property. 
(3) LIMITATION ON CONTRACT AUTHORITY.— 
The authority to enter into contracts under this sub-
section shall be available only to the extent or in the 
amounts provided in advance in appropriation Acts. 
(k) FUNDING.—There is authorized to be appro-
priated to the Commission $4,000,000 to carry out its du-
ties under this Act. 
(l) TERMINATION.—The Commission shall terminate 
on January 1, 2008. 
SEC. 6. PROCEDURE FOR MAKING RECOMMENDATIONS TO 
TERMINATE CORPORATE SUBSIDIES. 
(a) AGENCY PLAN.— 
(1) IN GENERAL.—The head of each Federal 
department or agency shall include in the documents 
submitted in support of the budget of the agency for 
fiscal year 2007 a list identifying all programs and 
laws administered by that department or agency 
that the head of the department or agency deter-
mines provide inequitable Federal subsidies. 
(2) CONTENTS.—Such list shall include— 
(A) a detailed description of each program 
or law in question; 
(B) a statement identifying and detailing 
the extent to which each payment, benefit, serv-
ice, or tax advantage under such program or 
law is an inequitable Federal subsidy;
(C) a statement summarizing the legisla-
tive history and purpose of such payment, ben-
efit, service, or tax advantage, and the laws or 
policies directly or indirectly giving rise to the 
need for such programs or law; and 
(D) a recommendation to the Commission 
regarding the termination, modification, or re-
tention of each inequitable Federal subsidy 
identified in the list. 
(b) REVIEW BY THE COMMISSION.— 
(1) IN GENERAL.—At any time after the sub-
mission of the budget documents to the Congress, 
the Commission shall conduct public hearings on the 
termination, modification, or retention of inequitable 
Federal subsidies, including the recommendations in-
cluded in the lists required under subsection (a). 
(2) TESTIMONY UNDER OATH.—All testimony 
before the Commission at a public hearing conducted 
under this paragraph shall be presented under oath. 
(c) REPORT AND RECOMMENDATIONS OF COMMIS-
SION.— 
(1) REPORT TO CONGRESS.— 
(A) REQUIREMENT.—No later than March 
31, 2007, the Commission shall submit a report 
to the Congress containing the Commission’s
findings and recommendations for termination, 
modification, or retention of each of the inequi-
table Federal subsidies reviewed by the Com-
mission. 
(B) CONTENTS.—Such findings and rec-
ommendations shall specify— 
(i) all actions, circumstances, and con-
siderations relating to or bearing upon the 
recommendations; and 
(ii) to the maximum extent prac-
ticable, the estimated effect of the rec-
ommendations upon the policies, laws, and 
programs directly or indirectly affected by 
the recommendations. 
(C) SUPERMAJORITY REQUIREMENT.—The 
Commission may not include a recommendation 
in the report unless inclusion of the rec-
ommendation is approved by at least 6 mem-
bers of the Commission. 
(2) INFORMATION AND JUSTIFICATIONS.—The 
Commission shall include in its report information 
specifying— 
(A) the reasons and justifications for the 
recommendations of the Commission;
(B) to the maximum extent practicable, 
the estimated fiscal, economic, and budgetary 
impact of accepting its recommendations; 
(C) the amount of the projected savings re-
sulting from each it its recommendations; 
(D) all actions, circumstances, and consid-
erations relating to or bearing upon the rec-
ommendations and to the maximum extent 
practicable, the estimated effect of the rec-
ommendations upon the policies, laws and pro-
grams directly or indirectly affected by the rec-
ommendations; and 
(E) the specific changes in Federal stat-
utes necessary to implement the recommenda-
tions, including citation of the relevant provi-
sions of existing law. 
(3) SUBMISSION
TO
CONGRESS.—The report 
submitted to the Congress under this subsection 
shall be submitted to the Senate and the House of 
Representatives on the same day, and shall be deliv-
ered to the Secretary of the Senate if the Senate is 
not in session, and to the Clerk of the House of the 
Representatives if the House is not in session. 
(4) FEDERAL
REGISTER.—The report sub-
mitted under this subsection shall be published in
the first issue of the Federal Register after such 
submission. 
(5) CHANGES
IN
AGENCY
OR
DEPARTMENT 
RECOMMENDATIONS.— 
(A) IN GENERAL.—Subject to the deadline 
in paragraph (1) and to subparagraphs (B) and 
(C) of this paragraph, in making its rec-
ommendations, the Commission may make 
changes in any of the recommendations made 
by a department or agency if the Commission 
determines that such department or agency, in 
treating any matter as an inequitable Federal 
subsidy, deviated substantially from the provi-
sions of section 4. 
(B) LIMITATION.—The Commission may 
make a change in the recommendations made 
by a department or agency, only if the Commis-
sion— 
(i) makes the determination required 
under subparagraph (A); and 
(ii) conducts a public hearing on the 
Commission’s proposed changes. 
(C) APPLICATION
OF
LIMITATION.—Sub-
paragraph (B) shall apply only to a change by
the Commission in a department or agency rec-
ommendation that would— 
(i) add or delete a payment, benefit, 
service, or tax advantage to or from, re-
spectively, the list recommended for termi-
nation; 
(ii) add or delete a payment, benefit, 
service, or tax advantage to or from, re-
spectively, the list recommended for modi-
fication; or 
(iii) increase or decrease the extent of 
a recommendation to modify a payment, 
benefit, service, or tax advantage included 
in 
a 
department’s 
or 
agency’s 
rec-
ommendation. 
(D) 
JUSTIFICATION.—The 
Commission 
shall explain and justify in the report submitted 
to the Congress under this subsection any rec-
ommendation made by the Commission that is 
different from a recommendation made by an 
agency under subsection (a). 
(6) PROVISION OF INFORMATION TO MEMBERS 
OF CONGRESS.—After March 31, 2007, the Commis-
sion shall, upon request, promptly provide to any
Member of Congress the information used by the 
Commission in making its recommendations. 
(7) 
COMPTROLLER
GENERAL.—The 
Comp-
troller General shall— 
(A) assist the Commission, to the extent 
requested, in the Commission’s review and anal-
ysis of the lists, statements, and recommenda-
tions made by departments and agencies under 
subsection (a); and 
(B) no later than 60 days after April 1, 
2006, or 60 days after the public release of the 
President’s budget documents for fiscal year 
2007, whichever is earlier, submit to the Con-
gress and to the Commission a report con-
taining a detailed analysis of the list, state-
ments, and recommendations of each depart-
ment or agency. 
SEC. 7. CONGRESSIONAL ACTION ON COMMISSION REC-
OMMENDATIONS. 
It is the sense of the Congress that, following submis-
sion of the report of the Corporate Subsidy Reform Com-
mission under section 6, the House of Representatives and 
the Senate should promptly consider legislation that would
enact changes in Federal statutes necessary to implement 
the recommendations of the Commission. 
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