I 
108TH CONGRESS 
2D SESSION 
H. R. 3762
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 3, 2004
Mr. SMITH of Washington (for himself, Mr. SHAYS, Mr. CASE, Mr. TIERNEY, 
Mr. CARTER, Mr. DUNCAN, Mr. EMANUEL, Mr. BEAUPREZ, Mr. 
HEFLEY, and Mr. KIND) introduced the following bill; which was referred 
to the Committee on Government Reform, and in addition to the Com-
mittee 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 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,
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 an inde-
pendent commission to be known as the ‘‘Corporate Sub-
sidy Reform Commission’’ (hereafter 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 such programs and 
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 or laws with the goal of ensuring 
fairness and equity in the operation and application 
thereof.
(2) ELIMINATION OF AGENCIES AND DEPART-
MENTS.—The Commission—
(A) shall limit its recommendations to the 
termination or reform of payments, benefits, 
services, or tax advantages; and 
(B) shall not recommend the termination 
of any Federal agency or department. 
(d) ADVISORY COMMITTEE.—The Commission shall 
be considered an advisory committee within the meaning 
of that term in the Federal Advisory Committee Act (5 
U.S.C. App.). 
(e) APPOINTMENT.—
(1) MEMBERS.—The members of the Commis-
sion—
(A) shall be appointed for the life of the 
Commission; and 
(B) shall be composed of 8 members, of 
whom—
(i) 2 shall be appointed by the Speak-
er of the House of Representatives; 
(ii) 2 shall be appointed by the minor-
ity leader of the House of Representatives; 
(iii) 2 shall be appointed by the ma-
jority leader of the Senate, one of whom
shall be designated by the majority leader 
to serve as a co-chair; and 
(iv) 2 shall be appointed by the minor-
ity leader of the Senate, one of whom shall 
be designated 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 among themselves prior to the appoint-
ment of the members of the Commission 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. 
(f) MEETINGS.—
(1) INITIAL MEETING.—No later than April 1, 
2004, 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. 
(g) VACANCIES.—A vacancy on the Commission shall 
be filled in the same manner as the original appointment. 
(h) PAY AND TRAVEL EXPENSES.—
(1) PAY.—Notwithstanding section 7 of the 
Federal Advisory Committee Act (5 App. U.S.C.), 
each member of the Commission, other than the co-
chairs, shall be paid at a rate equal to the daily 
equivalent of the minimum annual 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) CHAIRMEN.—Notwithstanding section 7 of 
the Federal Advisory Committee Act (5 App.
U.S.C.), the co-chairs shall be paid for each day re-
ferred to in paragraph (1) at a rate equal to the 
daily payment of the minimum annual rate of basic 
pay payable 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-
tion 5702 and 5703 of title 5, United States Code. 
(i) 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 
the Commission intends to review. 
(2) PAY.—Notwithstanding section 7 of the 
Federal Advisory Committee Act (5 App. U.S.C.), 
the Director shall be paid at the rate of basic pay 
payable for level IV of the Executive 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 Chair-
man 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. 
(j) 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 Federal sub-
sidies 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 Federal 
subsidies the Commission intends to review. 
(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 the Com-
mission intends to review if the person has been 
involved in regulatory or policy-making deci-
sions 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 
member 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) LIMITATION ON FEDERAL OFFICER.—
No member of a Federal agency and no em-
ployee of a Federal agency may serve as a 
member of the Commission or as a paid mem-
ber of its staff. 
(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. 
(k) OTHER AUTHORITY.—
(1) EXPERTS AND CONSULTANTS.—The Com-
mission may procure by contract, to the extent funds 
are available, the temporary or intermittent services
of experts or consultants pursuant to section 3109 
of title 5, United States Code. 
(2) LEASING.—The Commission may lease 
space and acquire personal property to the extent 
that funds are available. 
(l) FUNDING.—There is authorized to be appro-
priated to the Commission $4,000,000 to carry out its du-
ties under this Act. 
(m) TERMINATION.—The Commission shall termi-
nate on January 1, 2006. 
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 2005 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, 2005, 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 of 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 printed in the 
first issue of the Federal Register after such submis-
sion. 
(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 (B); 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, 2005, 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 of the United States 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, 
2004, or the public release of the President’s 
budget documents in 2004, whichever is earlier, 
submit to the Congress and to the Commission 
a report containing a detailed analysis of the 
list, statements, and recommendations of each 
department 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