Congress of the United States Honorable Charles H. Taylor U.S. House of Representatives Page 3 JOINT COMMITTEE ON TAXATION Washington, DC 20513-6453 Transit benefits.--A requested increase of $2,000 is included in the appropriation request to cover the projected costs of transit benefits provided to Joint Committee employees. FTES.--The fiscal year 2000 appropriation included 3.0 additional FTEs for the Joint Committee. The Joint Committee staff is in the process of hiring for these new positions at this time. The hiring process for Ph.D. economists is such that the Joint Committee staff interviews in January and February for economists who will generally be available in the summer or fall of the year. Thus, the Joint Committee expects that the hiring for these additional FTEs will be completed by the end of the fiscal year. No change in FTEs for fiscal year 2001 over fiscal year 2000 is requested. While no increase in FTEs is requested for fiscal year 2001, additional ongoing responsibilities have been assigned to the Joint Committee as a result of the IRS Reform Act. Under the IRS Reform Act, the Joint Committee is required to prepare a complexity analysis of all revenue provisions of widespread applicability to individuals and small businesses. In addition, the IRS Reform Act requires the Joint Committee to provide staffing and an annual report in connection with annual joint review of six Congressional committees on the operations of the Internal Revenue Service. The first of these reviews occurred in calendar year 1999 and a review will occur in each of calendar years 2000 through 2003. Under section 4002(a) of the IRS Restructuring and Reform Act of 1998 (the "IRS Reform Act"), subject to amounts being specifically appropriated for this purpose, the Joint Committee is required to report at least once each Congress to the Senate Committee on Finance and the House Committee on Ways and Means on the overall state of the Federal tax system, together with recommendations with respect to possible simplification proposals and other matters relating to the administration of the Federal tax system. The Senate appropriated $200,000 for this purpose in the Joint Committee's fiscal year 2000 appropriation, and this increase was accepted in the conference on the Legislative Branch appropriations. The Joint Committee staff has begun planning for this study and it is anticipated that a study of this magnitude will require significant time and staff resources. It is requested that the Subcommittee appropriate equivalent funds for this study for fiscal year 2001 to enable the Joint Committee staff to continue its work on this project. If this project proves to require even more time and Congress of the United States JOINT COMMITTEE ON TAXATION Washington, DC 20513–6433 Honorable Charles H. Taylor 2. Nonpersonnel Expenses In general.--The Joint Committee is requesting no increase in nonpersonnel expenses for fiscal year 2001. However, nonpersonnel expenses in certain categories have been reallocated to reflect more accurately the actual expenses that are anticipated in these categories. Rent, communications, and utilities.-The Joint Committee request proposes to reallocate $3,000 from this category to other categories for fiscal year 2001. The amount requested in this category for fiscal year 2001 is an accurate estimate of the actual expenses that the Joint Committee will incur. Printing.--The Joint Committee requests that $500 be reallocated to this category of expense from the category of rent, communications, and utilities for fiscal year 2001. The fiscal year 2000 appropriation had no amount allocated for printing, but actual Joint Committee expenses for fiscal year 1999 were $480. Similar expenses are anticipated for fiscal years 2000 and 2001. Other services.--The fiscal year 2000 appropriation for other services is $124,000. The fiscal year 1999 actual expenses attributable to this category was $124,117 and the Joint Committee anticipates some additional expenses in fiscal year 2001 in this category. Reallocating $2,500 to this category from the category of rent, communications, and utilities (for a total fiscal year 2001 request of $126,500) will reflect more accurately projected expenses for fiscal year 2001. This category represents a substantial portion of the Joint Committee's nonpersonnel expense. The Joint Committee utilizes consultants and other service providers to provide services that the Joint Committee staff does not have the time or expertise to otherwise perform. For example, the needs of the Members for immediate responses to requests for revenue estimates and the substantial volume of requests that the Joint Committee staff receives each year places limitations on the ability of the Joint Committee staff to perform certain work necessary for the preparation of revenue estimates. From time to time, the Joint Committee staff will contract with certain private sector organizations to do research that the Joint Committee staff could not otherwise perform because of the other responsibilities of the staff. During fiscal year 1999 and 2000, certain of the amounts allocated to consultant contracts Congress of the United States Honorable Charles H. Taylor U.S. House of Representatives Page 5 JOINT COMMITTEE ON TAXATION Washington, DC 20513–6433 hardware; this project is discussed more fully in the equipment category below. There may be some residual consultant services required in fiscal year 2001 in connection with this effort. Supplies and materials.--The Joint Committee is requesting no change in the amount appropriated for this category for fiscal year 2001. Actual expenses for fiscal year 1999 were $150,235 and the amount appropriated for fiscal year 2000 is $154,000. The fiscal year 2001 expenses are expected to be substantially equivalent to fiscal year 2000 expenses. Equipment.--No increase in this category is requested for fiscal year 2001 over fiscal year 2000. Anticipated expenses in this category include: $80,000 for hardware and software maintenance; $50,000 for Xerox maintenance and costs; $100,000 for the purchase of document scanners, CD-ROM writers, and storage for expansions of the Joint Committee's document tracking system; and $35,000 for software for document tracking and an electronic mail server. The purchase of equipment represents the single largest item of nonpersonnel expenses for the Joint Committee. The large volume of documents that the Joint Committee is required to produce in a very short time frame during the legislative process requires the use of sophisticated and technologically advanced computer and reproduction equipment. The Joint Committee staff upgrades computer software, hardware, and reproduction machines frequently to ensure that Members receive adequate service. During the consideration of the Taxpayer Relief Act of 1999, a number of Members complimented the Joint Committee staff on the speed with which the staff responded to the constantly changing provisions of the bill. The Joint Committee staff cannot provide this type of service to the Members unless it has the technology tools necessary for this type of sophisticated computer modeling. In 1994, the Joint Committee staff implemented a computerized data base to track Member requests. During fiscal year 1999, the Joint Committee staff began upgrades to this data base system that will transition the Joint Committee staff from a system for processing Member requests that is paper-based and time consuming to a paperless system that will allow the Joint Committee staff to process and monitor all Member requests electronically from the time a request is received until the final response is delivered to the requesting Member. This upgraded system is expected to improve substantially the efficiency of the Joint Committee staff in responding to Member requests. In addition, this upgraded database system will maintain a complete electronic record of each request received from a Member of Congress and will enable real time tracking of the status Congress of the United States JOINT COMMITTEE ON TAXATION Washington, DC 20513–6453 Honorable Charles H. Taylor expenses relating to implementation of this new document tracking system during fiscal year 2001. For example, the Joint Committee staff hopes to be able to convert existing files of Member requests and responses to this new system. This will be a longer term project that will require some expense in fiscal year 2001. C. Review of Joint Committee on Taxation Operations During Calendar Year 1999 As is demonstrated below, the Joint Committee staff faced a significantly greater workload in 1999 compared to 1998. The Joint Committee staff saw substantial increases in the number of revenue estimate requests received from Members during 1999. In addition, the Joint Committee staff devoted significant staff resources to its work on two studies mandated by the IRS Reform Act. Attachments A through E provide a summary of the activity of the Joint Committee staff for calendar year 1999. The attachments include the following information: Attachment A -- information relating to the legislative tax reports (Committee and - Attachment B a listing of all documents published by the Joint Committee staff during calendar year 1999; Attachment C a graph showing the number of Joint Committee requests received by the Joint Committee from Members of Congress for revenue estimates and other assistance during the period 1985 through 1999; Attachment D -- a table providing information on revenue estimate requests and Joint Attachment E -- information relating to the Joint Committee staff's statutorily mandated Congress of the United States JOINT COMMITTEE ON TAXATION Washington, DC 20513–6453 Honorable Charles H. Taylor Tax legislative reports The Joint Committee staff prepared 12 Committee and Conference reports relating to tax legislation considered by the Congress in 1999 and provided assistance on 5 trade Committee reports. The Joint Committee staff also prepares committee reports for the Senate Foreign Relations Committee relating to negotiated treaties and protocols for consideration by the Senate. During 1999, the Joint Committee assisted the Senate Foreign Relations Committee in its consideration of nine income tax treaties and protocols. A complete listing of these reports is included at Attachment A. Joint Committee staff publications In addition to its work on committee and conference reports, the Joint Committee staff published 99 documents during 1999, including pamphlets and other documents prepared for committee hearings and markups and conference action (see Attachment B). All Joint Committee staff publications are accessible from the Joint Committee's web page. Among the documents published by the Joint Committee staff in 1999 was a 629-page study of present-law penalty and interest provisions mandated by the IRS Reform Act. The Joint Committee staff was able to meet the statutorily imposed deadline of July 22, 1999, for transmitting this study to the Congress despite the tremendous demands on Joint Committee staff resources made in connection with the consideration at the same time of H.R. 2488 (the "Taxpayer Refund and Relief Act of 1999"). At the beginning of 1999, the Joint Committee staff published a document providing background information relating to the Joint Committee on Taxation. This document was recently updated for 2000. An updated version of this document is included as Attachment F. The Joint Committee staff plays an active role in formulating and presenting Congressional views on issues raised by the Administration's negotiation of tax treaties and other tax-related agreements. The Joint Committee staff prepares pamphlets for the Senate Foreign Relations Committee containing detailed descriptions of the provisions of negotiated tax treaties and protocols, including comparisons with the current U.S. model treaty, which reflects preferred U.S. treaty policy, and with other recent U.S. tax treaties. The pamphlets also contain detailed discussions of issues raised by the proposed agreements. During 1999, the Joint Committee staff prepared 8 documents for the Senate Committee on Foreign Relations in connection with |