STATEMENT OF THE MANAGERS ON THE PART OF THE HOUSE

The managers on the part of the House at the conference on the disagreeing votes of the two Houses on the amendments of the Senate to the bill (H. R. 10216) making appropriations for the legislative branch of the Government for the fiscal year ending June 30, 1939, and for other purposes, submit the following statement in explanation of the effect of the action agreed upon and recommended in the accompanying conference report as to each of such amendments, namely:

SENATE

Amendments Nos. 1, 2, and 3, relating to the Office of the Secretary: Provides three clerks, at $2,640 each, as proposed by the Senate, instead of two clerks, at $2,640 each, as proposed by the House; appropriates $1,522.50 for a messenger from April 15, 1938, to June 30, 1939, as proposed by the Senate; and corrects the total of the appropriations for the Office of the Secretary.

Amendments Nos. 6, 7, 8, and 9, relating to the office of Sergeant at Arms and Doorkeeper: Provides for four attendants in charge of ladies' retiring rooms, as proposed by the Senate, instead of three, as proposed by the House; appropriates $2,400 for an assistant superintendent in the press gallery, as proposed by the Senate; eliminates one messenger to press correspondents at $2,160, as proposed by the Senate, and corrects the total of the appropriations made for this office.

Amendment No. 10: Strikes out, as proposed by the Senate, the proviso attached to the appropriation for the repair and equipment of Senate kitchens and restaurants, requiring the addition of a minimum of 10 percent to each order in excess of 10 cents served in such restaurants and 20 percent to orders served outside of such restaurants. Amendment No. 11: Appropriates $8,260, for operating and maintaining motor vehicles under the offices of the Secretary and the Sergeant at Arms, instead of $7,960, as proposed by the House, and $9,285, as proposed by the Senate.

Amendments Nos. 12, 13, and 14: Appropriates $350 for postage stamps for the office of the Secretary, as proposed by the Senate, instead of $250, as proposed by the House, and $150 for the same purpose for the office of the Sergeant at Arms, as proposed by the Senate, instead of $100, as proposed by the House; and corrects the total of funds to be expended for such purposes.

Amendments Nos. 15 and 16: Consolidates, as proposed by the Senate, the provisions of the House bill appropriating $5,000 for the purchase of furniture and $3,000 for materials for the repair of same.

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HOUSE OF REPRESENTATIVES

Amendments Nos. 17 and 18: Appropriates $3,300 for the clerk to the Committee on Claims, as proposed by the House, instead of $3,700, as proposed by the Senate, and corrects the total of the appropriation for committee employees in accordance with such action.

CAPITOL POLICE

Amendment No. 19: Restores the provision of the House permitting the detail of police from the House and Senate Office Buildings to work on the Capitol Grounds, amended so as to permit the detail of such police for police duty on such grounds.

ARCHITECT OF THE CAPITOL

Amendment No. 20: Appropriates $6,000, as proposed by the Senate, for subway transportation between the Capitol and Senate Office Building, instead of $2,000 for such purpose, as proposed by the House.

Amendment No. 21: Appropriates $1,560 for increasing the salaries of 26 custodial employees for the Senate Office Building from $1,080 to $1,140, as proposed by the Senate.

Amendment No. 22: Appropriates $5,000 for metal filing units for the Senate Office Building, as proposed by the Senate.

Amendment No. 23: Appropriates $375,240 for maintenance of the House Office Buildings, as proposed by the Senate, instead of $370,200, as proposed by the House.

Amendment No. 24: Perfects language relating to air-conditioning refrigeration, as proposed by the Senate.

BOTANIC GARDEN

Amendment No. 25: Authorizes the use of not to exceed $250 for traveling expenses of the Director and his assistants, as proposed by the Senate, instead of $100, as proposed by the House.

AMENDMENTS IN DISAGREEMENT

The committee of conference report in disagreement the following amendments of the Senate:

Amendments Nos. 4 and 5: Relating to an increase in the salary of an assistant clerk to the Senate Committee on Indian Affairs.

JOHN F. DOCKWEILER,
LOUIS C. RABAUT,
J. O. FERNANDEZ,

JOHN M. HOUSTON,

D. LANE POWERS,

Managers on the part of the House.

O

Mr. DOUGHTON, from the committee of conference, submitted the

following

CONFERENCE REPORT

[To accompany H. R. 9682]

The committee of conference on the disagreeing votes of the two Houses on the amendments of the Senate to the bill (H. R. 9682) to provide revenue, equalize taxation, and for other purposes, having met, after full and free conference, have agreed to recommend and do recommend to their respective Houses as follows:

That the House recede from its disagreement to the amendments of the Senate numbered 2, 3, 4, 12, 14, 16, 17, 25, 28, 29, 30, 31, 32, 35, 43, 45, 46, 50, 51, 53, 55, 65, 66, 70, 74, 75, 76, 77, 78, 80, 81, 82, 91, 95, 96, 97, 135, 136, 137, 138, 139, 140, 141, 142, 143, 144, 147, 156, 160, 161, 162, 163, 164, 165, 166, 170, 171, 173, 179, 180, 181, 183, 184, 185, 186, 188, 189, 190, 191, 192, 193, 194, 195, 196, 197, 198, 200, 212, 216, 217, 218, 219, 220, 221, 222, 223, 224, 225, 226, 227, 228, and 229, and agree to the same.

That the Senate recede from its amendments numbered 1, 5, 7, 8, 9, 11, 13, 18, 19, 23, 24, 26, 33, 34, 36, 37, 38, 39, 40, 41, 48, 49, 56, 57, 59, 61, 63, 67, 68, 71, 83, 84, 85, 86, 87, 89, 90, 92, 93, 94, 98, 99, 100, 101, 102, 103, 104, 106, 107, 108, 109, 110, 111, 113, 114, 116, 117, 118, 119, 120, 121, 122, 123, 124, 125, 126, 127, 128, 129, 130, 131, 132, 133, 134, 145, 146, 148, 149, 151, 153, 154, 155, 158, 159, 172, 174, 175, 176, 177, 178, 182, 187, 203, 204, 205, 209, 210, 213, 230, 237, and 239.

Amendment numbered 6:

That the House recede from its disagreement to the amendment of the Senate numbered 6, and agree to the same with an amendment, as follows:

In lieu of the matter proposed to be inserted by the Senate amendment insert the following:

SEC. 13. TAX ON CORPORATIONS IN GENERAL.

(a) ADJUSTED NET INCOME.-For the purposes of this title the term "adjusted net income" means the net income minus the credit provided

H. Repts., 75–3, vol. 2– -75

in section 26 (a), relating to interest on certain obligations of the United States and Government corporations.

(b) IMPOSITION OF TAX.-There shall be levied, collected, and paid for each taxable year upon the net income of every corporation the net income of which is more than $25,000 (except a corporation subject to the tax imposed by section 14, section 231 (a), Supplement G, or Supplement Q) a tax computed under subsection (c) of this section or a tax computed under subsection (d) of this section, whichever tax is the lesser. (c) GENERAL RULE.-The tax computed under this subsection shall be as follows:

(1) A tentative tax shall first be computed equal to 19 per centum of the adjusted net income.

(2) The tax shall be the tentative tax reduced by the sum of—
(A) 16% per centum of the credit for dividends received pro-
vided in section 26 (b); and

(B) 21⁄2 per centum of the dividends paid credit provided in section 27, but not to exceed 21⁄2 per centum of the adjusted net income.

(d) ALTERNATIVE TAX (CORPORATIONS WITH NET INCOME SLIGHTLY MORE THAN $25,000).—

(1) If no portion of the gross income consists of interest allowed as a credit by section 26 (a) (relating to interest on certain obligations of the United States and Government corporations), or of dividends of the class with respect to which credit is allowed by section 26 (b), then the tax computed under this subsection shall be equal to $3,525, plus 32 per centum of the amount of the net income in excess of $25,000. (2) If any portion of the gross income consists of such interest or dividends, then the tax computed under this subsection shall be as follows:

(A) The net income shall be divided into two divisions, the first division consisting of $25,000, and the second division consisting of the remainder of the net income.

(B) To the first division shall be allocated, until an aggregate of $25,000 has been so allocated: First, the portion of the gross income consisting of such interest; second, the portion of the gross income consisting of such dividends; and third, an amount equal to the excess, if any, of $25,000 over the amounts already allocated to the first division.

(C) To the second division shall be allocated, until there has been so allocated an aggregate equal to the excess of the net income over $25,000: First, the portion of the gross income consisting of such interest which is not already allocated to the first division; second, the portion of the gross income consisting of such dividends which is not already allocated to the first division; and third, an amount equal to the excess, if any, of the net income over the sum of $25,000 plus the amounts already allocated to the second division.

(D) The tax shall be equal to the sum of the following:

(i) A tax on the $25,000 allocated to the first division, computed under section 14 (c), on the basis of the allocation made to the first division and as if the amount so allocated constituted the entire net income of the corporation.

(ii) 12 per centum of the dividends received allocated as such to the second division.

(iii) 32 per centum of the remainder of the amount allocated to the second division, except interest allowed as a -redit under section 26 (a).

(e) CORPORATIONS IN BANKRUPTCY AND RECEIVERSHIP.-If a domestic corporation is for any portion of the taxable year in bankruptcy under the laws of the United States, or insolvent and in receivership in any court of the United States or of any State, Territory, or the District of Columbia, then, when the tax is computed under subsection (c), the tentative tax shall be reduced by 21⁄2 per centum of the adjusted net income, instead of by 21⁄2 per centum of the dividends paid credit.

(f) JOINT-STOCK LAND BANKS.-In case of a joint-stock land bank organized under the Federal Farm Loan Act, as amended, when the tax is computed under subsection (c), the tentative tax shall be reduced by 21⁄2 per centum of the adjusted net income, instead of by 21⁄2 per centum of the dividends paid credit.

(g) RENTAL HOUSING CORPORATIONS.-In the case of a corporation which at the close of the taxable year is regulated or restricted by the Federal Housing Administrator under section 207 (b) (2) of the National Housing Act, as amended, when the tax is computed under subsection (c), the tentative tax shall be reduced by 21⁄2 per centum of the adjusted net income, instead of by 21⁄2 per centum of the dividends paid credit; but only if such Administrator certifies to the Commissioner the fact that such regulation or restriction existed at the close of the taxable year. It shall be the duty of such Administrator promptly to make such certification to the Commissioner after the close of the taxable year of each corporation which is so regulated or restricted by him.

(h) EXEMPT CORPORATIONS.-For corporations exempt from taxation under this title, see section 101.

(i) TAX ON PERSON AL HOLDING COMPANIES.-For surtax on personal holding companies, see Title IA.

(j) IMPROPER ACCUMULATION OF SURPLUS. For surtax on corporations which accumulate surplus to avoid surtax on shareholders, see section 102.

SEC. 14. TAX ON SPECIAL CLASSES OF CORPORATIONS.

(a) SPECIAL CLASS NET INCOME.-For the purposes of this title the term "special class net income" means the adjusted net income minus the credit for dividends received provided in section 26 (b).

(b) There shall be levied, collected, and paid for each taxable year upon the special class net income of the following corporations (in lieu of the tax imposed by section 13) the tax hereinafter in this section specified

(c) CORPORATIONS WITH NET INCOMES OF NOT MORE THAN $25,000.-If the net income of the corporation is not more than $25,000, and if the corporation does not come within one of the classes specified in subsection (d), (e), (f), or (g) of this section, the tax shall be as follows:

Upon special class net incomes not in excess of $5,000, 12% per centum.

$625 upon special class net incomes of $5,000, and upon special class net incomes in excess of $5,000 and not in excess of $20,000, 14 per centum in addition of such excess.

$2,725 upon special class net incomes of $20,000, and upon special class net incomes in excess of $20,000, 16 per centum in addition of such excess.