On Thursday, August 2, 2012, the House is scheduled to consider H.R. 6169, the Pathway to Job Creation through a Simpler, Fairer Tax Code Act of 2012, under a rule. The bill was introduced on July 24, 2012, by Rep. David Dreier (R-CA) and referred to the Rules Committee. The rule for consideration of the bill (H. Res. 747) provides one hour of debate on the bill equally divided and controlled by the chair and ranking minority member of the Committee on Rules and two hours of debate equally divided and controlled by the chair and ranking minority member of the Committee on Ways and Means. In addition, the rule provides for one amendment in the nature of a substitute offered by the Ranking Member of the Rules Committee, which is summarized below and is debatable for 20 minutes.

H.R. 6169 would provide an expedited pathway to pro-growth tax reform in 2013. H.R. 6169, the Pathway to Job Creation through a Simpler, Fairer Tax Code Act of 2012, would require the House and Senate to consider tax reform legislation according to an expedited timeline. Under the bill, expedited procedures would be applied to tax reform bill containing principles included in the last two House-passed budgets: (1) consolidation of the current individual income tax brackets into not more than two brackets and a top rate of not more than 25 percent; (2) reduction in the corporate tax rate to not more than 25 percent; (3) repeal of the Alternative Minimum Tax; (4) broadening of the tax base to maintain revenue between 18 and 19 percent of the economy; and (5) change from a ‘‘worldwide’’ to a ‘‘territorial’’ system of taxation.

Expedited Consideration of a Measure Providing for Comprehensive Tax Reform: H.R. 6169 would provide procedures for expedited congressional consideration of legislation which contains comprehensive tax reform. Under H.R. 6169, a tax reform measure would receive accelerated consideration if it were introduced by the Chairman of the Ways and Means Committee by April 30, 2013, and if the Joint Committee on Taxation (JCT) verifies that the measure contained each of the following proposals:

1. The bill must consolidate the current six tax brackets into no more than two tax brackets of 10 and no more than 25 percent.
2. The bill must reduce the corporate tax rate to no more than 25 percent.
3. The bill must repeal the Alternative Minimum Tax (AMT).
4. The bill must broaden the tax base to maintain revenue between 18 and 19 percent of the economy (GDP).
5. The bill must change from a “worldwide” system of taxation to a “territorial” system of taxation.

Any tax reform legislation meeting these qualifications would be subject to expedited procedures for consideration as follows:

Expedited Consideration in the House of Representatives:

• Any committee to which the bill is referred must report the bill within 20 calendar days. If a committee fails to report the legislation within the 20 day period, the bill would be automatically discharged.

• If the House has not proceeded with consideration of the tax reform legislation within 15 days of its discharge from committee, the Majority Leader, or any Member after two additional legislative days, may offer a motion to proceed on the tax reform legislation. The motion to proceed would require a majority vote to consider the bill.

• If the motion to proceed with consideration is adopted, floor debate on the tax reform bill would be limited to 4 hours equally divided and controlled by the Chair and Ranking Minority Member of the Committee on Ways and Means. The bill would be subject to amendment under the five-minute rule and be subject to one motion to recommit.

Expedited Consideration in the Senate:

• When the Senate receives a certified tax reform bill that contains the specified proposals, the bill would be referred to the Senate Finance Committee. The Finance Committee would be required to report the bill within 15 calendar days. If the committee fails to report the legislation within the 15 day period, the bill would be automatically discharged and placed on the calendar.

• After the Senate Committee on Finance reports the tax reform bill or the bill is discharged, the Majority Leader or any Member of the Senate (after two additional legislative days) would be able to offer a motion to proceed to the bill. The motion to proceed would not be debatable and cloture would not be required before a vote on the motion to proceed. 

• During consideration of the bill, no motion to recommit would be in order and debate on amendments would be limited to 2 hours on each amendment. All amendments to the bill would have to be relevant to the bill and cloture would not be required before votes on individual amendments. 

• One vote on cloture may still be required prior to a vote on final passage of the underlying bill. However, under the expedited procedures there would be only one 60-vote threshold rather that multiple thresholds. Any vote on cloture would occur after the Senate has debated the bill and amendments.

Conference Committees: H.R. 6169 would provide expedited procedures for the House and Senate to appoint conferees and go to conference on tax reform legislation that has been approved by both the House and Senate. The procedures would bar filibusters in the Senate from delaying the process of appointing conferees and agreeing to go to conference.

According to CBO, enacting H.R. 6169 by itself would have no significant impact on the federal budget. CBO states that any changes to tax laws considered under the procedures specified by H.R. 6169 would depend on future Congressional actions.

The following timeline, provided by the Ways and Means Committee Staff, outlines key dates from tax reform legislation under H.R. 6169.

Pathway to Job Creation through a Simpler,

Fairer Tax Code Act of 2012 (H.R. 6169)

Key Dates Under H.R. 6169

April 30, 2013--------------Tax reform legislation must be introduced by the chair of the Committee on Ways and Means which includes the following title:  “A bill to provide for comprehensive tax reform.”  The chair of the Joint Committee on Taxation must notify the House and the Senate that the bill as introduced contains the following proposals, which reflect the principles for tax reform outlined in H.R. 6169 and included in the last two House-passed budgets: (1) Consolidation of the current individual income tax brackets into not more than two brackets and a top rate of not more than 25 percent; (2) Reduction in the corporate tax rate to not more than 25 percent; (3) Repeal of the Alternative Minimum Tax; (4) Broadening of the tax base to maintain revenue between 18 and 19 percent of the economy; and (5) Change from a ‘‘worldwide’’ to a ‘‘territorial’’ system of taxation. 

May 20, 2013--------------Committee onWays and Means must report out the tax reform legislation or it is discharged.

Early June 2013---------Rules Committee must report out a rule for consideration of the tax reform legislation.  Otherwise, the Majority Leader, or any Member after two additional legislative days, may offer a motion to proceed on the tax reform legislation.   Floor debate is limited to 4 hours equally divided and controlled by the Chair and Ranking Minority Member of the Committee on Ways and Means.  The bill is subject to amendment under the five-minute rule.  One motion to recommit is in order.

Early/mid-June 2013---Senate receives the bill and refers it to the Senate Committee on Finance.

June/early-July 2013---Senate Committee on Finance must report the bill within 15 calendar days or it is discharged.

End of July 2013---------After the Senate Committee on Finance reports the tax reform bill or the bill is discharged, the Majority Leader, or any Member after two additional legislative days, can offer a motion to proceed to the bill.  The motion is not debatable, cloture is not required before a vote on the motion to proceed.  Debate on amendments is limited to 2 hours on each amendment, cloture is not required before votes on individual amendments.  Cloture on the underlying bill, however, may still be required prior to a vote on passage.  So, there is one 60-vote threshold instead of multiple thresholds and it comes after the Senate has debated the bill and amendments.

August 2013-----------The bill also contains procedures to facilitate a conference committee on the tax reform bill and the appointment of conferees.

Amendment No. 1—Louise Slaughter (D-NY): This amendment in the nature of a substitute would enumerate the Democrats’ vision for tax reform, which calls for tax increases on Americans to be spent on new Washington programs and failed “stimulus.” The substitute, however, does not include a procedure for consideration of the Democrats’ tax plan, nor does it spell out specific tax rates.  The amendment includes findings which state that Congress should pass tax legislation that:

• “Identifies revenue sources that, in conjunction with targeted spending reductions, will provide the long-term means to reduce the national debt significantly and make investments in national priorities such as infrastructure, education, research, and defense that are critical to future American competitiveness and job growth;

• “Adopts a rate structure that distributes the tax burden in a more progressive manner;

• “Discourages tax avoidance, including tax avoidance accomplished using entities or accounts in tax haven jurisdictions;

• “Preserves and improves those provisions of the Internal Revenue Code of 1986 that support middle class home ownership, education, retirement savings, and healthcare;

• “Repeals the alternative minimum tax (commonly known as the AMT);

• “Retains and improves refundable tax credits that encourage work and education while lifting millions of Americans out of poverty;

• “Eliminates tax breaks for businesses that move jobs and profits overseas in combination with a reduction in tax rates for American manufacturers, which are vital to innovation and job growth; and

• “Preserves and improves incentives for small business investment and growth.”