In compliance with paragraph 7(b) of Rule XXVI of the Standing Rules of the Senate, the following statements are made concerning the roll call votes in the Committee's consideration of H.R. 2676 on March 31, 1998.

Motion to report the bill

The bill (H.R. 2676) was ordered favorably reported, as amended by the Chairman's amendment in the nature of a substitute, by a roll call vote of 12 yeas and 0 nays (20-0, including proxy votes). The vote, with a quorum present, was as follows:

Yeas.--Senators Roth, Chafee (proxy), Grassley, Hatch (proxy), D'Amato (proxy), Murkowski (proxy), Nickles, Gramm (proxy), Lott (proxy), Jeffords (proxy), Mack, Moynihan, Baucus, Rockefeller, Breaux, Conrad (proxy), Graham, Moseley-Braun, Bryan, and Kerrey.

Nays.--None.

Votes on other amendments

(1) An amendment by Senator Grassley to add a representative of the organization that represents a substantial number of IRS employees to the IRS Oversight board was approved by a roll call vote of 12 yeas and 8 nays. The vote was as follows:

Yeas.--Senators Grassley, D'Amato, Jeffords, Moynihan, Baucus, Rockefeller (proxy), Breaux, Conrad, Graham, Moseley-Braun, Bryan, and Kerrey.

Nays.--Senators Roth, Chafee, Hatch (proxy), Murkowski, Nickles, Gramm, Lott, and Mack.

(2) An amendment by Senator Moynihan to include the Secretary of the Treasury on the IRS Oversight Board was approved by a roll call vote of 12 yeas and 8 nays. The vote was as follows:

Yeas.--Senators Chafee, D'Amato, Jeffords, Moynihan, Baucus, Rockefeller (proxy), Breaux, Conrad, Graham, Moseley-Braun, Bryan, and Kerrey.

Nays.--Senators Roth, Grassley, Hatch (proxy), Murkowski, Nickles, Gramm, Lott, and Mack.

(3) An amendment by Senator D'Amato to guarantee coverage of inpatient hospital care for breast cancer was defeated by a roll call vote of 8 yeas and 10 nays. (The Chairman ruled this amendment non-germane.) The vote was as follows:

Yeas.--Senators Grassley, D'Amato, Murkowski, Moynihan, Breaux, Moseley-Braun, Bryan, and Kerrey.

Nays.--Senators Roth, Chafee, Nickles, Gramm, Lott, Jeffords, Mack, Baucus, Conrad, and Graham.

(4) An amendment by Senator Kerrey to substitute the language of the House-passed bill for the Chairman's Mark was defeated by a roll call vote of 8 yeas and 12 nays. The vote was as follows:

Yeas.--Senators Moynihan, Baucus, Rockefeller (proxy), Breaux, Conrad, Moseley Braun, Bryan, and Kerrey.

Nays.--Senators Roth, Chafee (proxy), Grassley, Hatch, D'Amato (proxy), Murkowski, Nickles, Gramm, Lott (proxy), Jeffords (proxy), Mack, and Graham.

(5) An amendment by Senator Grassley to authorize State tax agencies to participate in the Federal program of refund offsets was approved by a roll call vote of 14 yeas and 6 nays. The vote was as follows:

Yeas.--Senators Chafee (proxy), Grassley, Hatch, D'Amato (proxy), Jeffords (proxy), Moynihan, Baucus, Rockefeller (proxy), Breaux, Conrad, Graham, Moseley-Braun, Bryan, and Kerrey.

Nays.--Senators Roth, Murkowski, Nickles, Gramm, Lott (proxy), and Mack.

(6) An amendment by Senator Conrad to strike the burden of proof provision of the Chairman's Mark was defeated by a roll call vote of 5 yeas and 15 nays. The vote was as follows:

Yeas.--Senators Moynihan, Baucus, Rockefeller (proxy), Conrad, and Graham.

Nays.--Senators Roth, Chafee (proxy), Grassley, Hatch, D'Amato (proxy), Murkowski (proxy), Nickles, Gramm, Lott (proxy), Jeffords (proxy), Mack, Breaux, Moseley-Braun, Bryan, and Kerrey.

(7) An amendment by Senators Graham and Moynihan to implement a tobacco tax increase of 5 cents per pack of cigarettes and accelerate a 15-cents-per-pack increase, and also to reduce the period for collecting taxes from 10 to 6 years, increase the refund claim period from 3 to 6 years, and to extend such periods to all taxes was defeated on a roll call vote of 8 yeas and 12 nays. The vote was as follows:

Yeas.--Senators Moynihan, Baucus, Rockefeller, Conrad (proxy), Graham, Moseley Braun, Bryan, and Kerrey.

Nays.--Senators Roth, Chafee (proxy), Grassley, Hatch (proxy), D'Amato (proxy), Murkowski (proxy), Nickles, Gramm (proxy), Lott (proxy), Jeffords (proxy), Mack, and Breaux.

(8) An amendment by Senator Rockefeller to modify the privilege of practitioner-client confidentiality provision in the Chairman's Mark was defeated by a roll call vote of 3 yeas and 17 nays. The vote was as follows:

Yeas.--Senators Moynihan, Baucus, and Rockefeller.

Nays.--Senators Roth, Chafee (proxy), Grassley, Hatch (proxy), D'Amato (proxy), Murkowski (proxy), Nickles, Gramm (proxy), Lott (proxy), Jeffords (proxy), Mack, Breaux, Conrad (proxy), Graham, Moseley-Braun, Bryan, and Kerrey.

V. Regulatory Impact and other Matters

A. Regulatory Impact

Pursuant to paragraph 11(b) of Rule XXVI of the Standing Rules of the Senate, the Committee makes the following statement concerning the regulatory impact that might be incurred in carrying out the provisions of the Bill as reported.

Impact on individuals and businesses

The bill as reported makes numerous changes designed to improve the management of the IRS, encourage electronic filing, protect taxpayer rights, improve Congressional oversight of the IRS, and provide necessary technical corrections to recent tax legislation.

Title I of the Bill provides for restructuring of the IRS to improve management accountability and to improve taxpayer service.

Title II encourages electronic filing of tax and information returns, and requires a Treasury study of the feasibility of a return-free system for individuals.

Title III provides for additional protection of taxpayer rights, including relief for innocent spouses, and revises certain interest and penalty provisions. Title III also requires studies of the administration of penalties and interest and confidentiality of tax return information.

Title IV requires annual IRS reports to the Congressional tax committees on the sources of complexity in the Federal tax laws, and for the Joint Committee on Taxation to provide a "Tax Complexity Analysis" on tax legislation that has widespread applicability to individuals or small businesses.

Title V provides revenue offsets to the cost of the other provisions of the Bill: (1) revises the deduction for vacation and severance pay (overruling Schmidt Baking); (2) modifies the foreign tax credit carryover rules; (3) clarifies and expands the mathematical error procedures; (4) freezes the grandfathered status of stapled REITs; (5) makes certain trade receivables ineligible for mark to-market treatment; and (6) adds vaccines against rotavirus gastroenteritis to the list of taxable vaccines.

Title VI makes necessary technical corrections to the Taxpayer Relief Act of 1997 and certain other recent tax legislation.

Impact on personal privacy and paperwork

The provisions of the Bill should not have any adverse impact on personal privacy. The bill modifies Code section 6103 to allow the tax committees to obtain information from IRS employees regarding IRS employee and taxpayer abuse.

B. Unfunded Mandates Statement

This information is provided in accordance with section 423 of the Unfunded Mandates Reform Act of 1995 (P.L. 104-4).

The Committee has reviewed the provisions of the Bill as reported. in accordance with the requirements of Public Law 104-4, the Committee has determined that the following provisions of the bill contain Federal private sector mandates.

• Repeal of Schmidt Baking with respect to the employer deduction for vacation and severance pay (bill Sec. 5001);

• Modification of the foreign tax credit carryover rules (bill Sec. 5002);

• Freezing of grandfathered status of stapled REITs (bill Sec. 5004);

• Certain trade receivables made ineligible for mark-to-market treatment (bill Sec. 5005); and

• Adding vaccines against rotavirus gastroenteritis to the list of taxable vaccines (bill Sec. 5006).

As indicated in the revenue table (III.A., above), these provisions are estimated to increase tax revenues by $6,449 million in fiscal years 1998-2002 and $9,330 million in fiscal years 1998 2007, which are no greater than the aggregate estimated amounts that the private sector will be required to pay in order to comply with the Federal private sector mandates under the bill.

These provisions will not impose a Federal intergovernmental mandate on State, local, or tribal governments.

VI. Changes in Existing Law Made by the Bill, as Reported

in the opinion of the Committee, in order to expedite the business of the Senate, it is necessary to dispense with the requirements of the Senate of paragraph 12 of Rule XXVI of the Standing Rules of the Senate (relating to the showing of changes in existing law made by the bill as reported by the Committee).