TUESDAY, SEPTEMBER 19, 1972. U.S. TAX COURT SALARIES AND EXPENSES AND CONSTRUCTION WITNESSES W. M. DRENNEN, CHIEF JUDGE L. H. IRWIN, JUDGE WILLIAM F. HUFFMAN, EXECUTIVE DIRECTOR O. A. KEETER, BUDGET AND ACCOUNTING OFFICER Mr. STEED. The committee will be in order. The committee is in session this afternoon to consider supplemental items requested by the U.S. Tax Court. The budget for the fiscal year 1973 was $3,954,000, which was the full budget estimate sought by the Tax Court. The supplemental estimate under "Salaries and expenses" is for $353,000. The supplemental estimatee for construction for a new Tax Court Building, is $1,916,000. A total of $19,162,000 has been appropriated in prior years for this project. It is my understanding that this supplemental item is needed for work on the building, which I believe is now under construction. us. We are pleased to have the Chief Judge William M. Drennen, with If you would like to identify your associates for the record, we will be happy to hear you. Judge DRENNEN. Thank you, Mr. Chairman and members of the committee. I have with me Judge Leo Irwin of the court; Mr. Huffman, executive director of the court; and Mr. Keeter, the fiscal officer of the court. GENERAL STATEMENT I am pleased to have this opportunity to appear before this committee and to present for your consideration the court's supplemental budget requests for the fiscal year 1973 in the amount of $2,269,000. This total amount is comprised of $353,000 for salaries and expenses and $1,916,000 which is necessary for the completion of the court's building project. The request for the salaries and expenses portion of the supplemental request is to provide for salaries and staffs of two retired judges, recalled to perform further judicial duties as provided by section 7447 of the Internal Revenue Code of 1954, two administrative cler(1169) 84-311 O 72 - 74 ical employees to handle the processing of case records and procurement of space for the conduct of trial sessions throughout the United States, increased costs of stenographic reporting services, professional contract services for drafting the court's new rules of practice and for the interior design and specifications for equipment, furniture, furnishing and accessories in the new court building. I might state that all of these matters have come up since we submitted our original budget request. For the construction portion of this request the additional funds will provide for the Plaza Bridge over Interstate 95 between the court building and Second Street NW., driveways to and from basement parking garage and delivery areas, sidewalks and landscaping around the building and certain necessary change orders in the original building plans. Mr. Chairman, may I once again express my appreciation for the support and understanding this committee has always given the court and its problems. I will now be happy to answer any questions which you or the other members of this committee may have concerning this supplemental request now before you. Mr. STEED. Thank you, Judge. Knowing all the difficulties you had to go through before you got a site and plans pinned down and a contract let and construction started on the new building, I can understand that this was not what you originally hoped it would be, and you had to make some adjustments to move into this particular site and it required some revisions. TOTAL PROJECT COST You are bringing us an item of $1,916,000 to be added to the amount already made available for this purpose and the accoutrements connected thereto. Are you sure that this is all the money you will need? Judge DRENNEN. Mr. Chairman, I can say that you probably recognize the amount we are requesting, the $1,916,000, is the maximum 10percent overage that we are allowed over the amount authorized by the Public Works Committees. We certainly hope that this will do the job. We cannot be certain because we cannot control the escalation of prices and other matters which might come up. We hope we have taken into consideration every contingency that we might run into. We can not be certain of that. Mr. STEED. It is getting to be a sore spot with the Congress that agencies keep coming back. Some of the criticism is not fair because it does not reflect the reasons that were beyond the control of those doing the asking. Some of it is because I think the whole system of GSA in letting contracts has invited this sort of thing instead of cutting it off. We have the feeling now from reports GSA has given us that under a new approach to it we are getting some very fine turnkey-type bids which are substantially below the estimates. This is the way private industry constructs buildings, and I think it is about time the Government began to do likewise. Then that leaves you free of some of this type of thing. I hope you do not have any problems with it. We are anxious to have the building finalized. It is long overdue. Judge DRENNEN. We certainly appreciate the help you have given us on this, and we hope you will bear with us. We hope we have all that we need in it at this time. NEW POSITIONS Mr. STEED. How many new people are you thinking about? Judge DRENNEN. We are really not increasing our staff too much except for the retired judges who are recalled, and their staffs. Two judges have retired since we put in our original request. Their staffs consist of one law clerk and one secretary each. Then two additional people are needed, one in the Executive Director's office and one in the Clerk's office. One is to handle the space requirements of the court. We are having a difficult time trying to line up courtrooms for our use throughout the country. It has gotten to the point that we almost have to have somebody full time just to take care of that. The other one is a file clerk who is required to take care of the additional filing because of the increase in caseload that we are getting. Mr. STEED. I can well understand that this so-called booking agent type of function is getting to be not only a big problem but a very important one for the court. Judge DRENNEN. Yes. Mr. STEED. I can understand why you wish to have a better approach to that problem than you have, because you can lose valuable time otherwise. Judge DRENNEN. Yes, sir. We make our requests of other courts for courtroom space, and we find that sometimes we get it in advance and then, at the last minute, we are turned down, or sometimes they will say, "We can't tell just yet this far in advance. We will let you know later." Yet we have to send out our notices with the place and time for holding our court sessions 3 months in advance. So, it takes somebody to stay right on top of that all the time. CEREMONIAL COURTROOM Mr. STEED. At some place along the line, I heard or saw some criticism about the Tax Court not needing a building in Washington, not needing a ceremonial courtroom, and so forth. When this new building is available, do you contemplate situations coming up where maybe trials will be shifted back to the Washington scene that otherwise might have been held in the field because of the necessity to get on with them and there is no other way to do it? Would this be a spinoff from the fact that you will have a building which would give you that extra working room? Judge DRENNEN. Yes; I think that might well be one of the results. In the first place, of course, the law under which we operate requires that we be based in Washington, D.C. So far as the article which appeared in the newspaper about a large third courtroom or ceremonial courtroom, as it was described, yes, I do think in the past we have had occasions when large cases are started out in the field, in cases such as the excess profits tax cases, valuation cases, and matters of that sort, which then have been brought back into Washington for completion of the trial, where they have a number of witnesses and it is more convenient for all of the parties to do that. We of course have been operating with two courtrooms. Those courtrooms are in use a great amount of the time, not only by the Tax Court, but by other agencies. Mr. ROBISON. Are they called "ceremonial courtrooms?" Judge DRENNEN. No, they are not. We do not call this new one a ceremonial courtroom. Mr. ROBISON. I was confused in my own mind precisely why it was considered a ceremonial courtroom as compared to any others. Judge DRENNEN. I do not know where the name came from. I think possibly the architect may have put it on the drawings or something. So far as we are concerned, this is simply a third courtroom which is a little bit larger than the other two courtrooms, and will have a bench which will permit all 16 judges to sit on the bench at the same time. That we do not have in either of the courtrooms at present, and it will not be true in the other two courtrooms of the new building. We think certainly we will need a third courtroom. We now have the small claims procedure and we have appointed five commissioners who are handling these cases. That will bring about more need for courtrooms. Our tax caseload is increasing considerably. Just what the future will involve, I do not know. We are looking to the future. We never had a building of our own before, and we expect this building to last at least throughout the lifetimes of all of us. We are trying to anticipate what our needs will be in the future. Mr. ROBISON. Was not one of the items of criticism, Judge Drennen, that the 16 judges of the court, at least in the past, had never met or convened together as a court, and therefore you did not need a large courtroom that would have seats for all 16 judges? Judge DRENNEN. This was one of the criticisms in the article in the newspaper that I read. Mr. ROBISON. Could you address yourself fora moment to that? That is not entirely true. When the Board of Tax Appeals, the forerunner of the Tax Court, started out, they often sat in panels of three to possibly five. We have not been doing that in recent years because we could not afford the time of three judges to sit on one case. There have been suggestions made for some years now, and I think with some merit, that there may be a need for a Tax Court of Appeals which would involve the entire court sitting together to hear appeals, as the Court of Claims does now since they have made their commissioners really the trial level judges. That is another factor that we have taken into consideration in building a little bit larger courtroom. Let me point out that this article in the newspaper described the courtroom as being a ceremonial courtroom which would be used very occasionally, would contain 25,000 square feet and would cost $3 million. We have designed this courtroom and put it into our plans just as a third courtroom, slightly larger, and in doing so we thought it would be best to anticipate possible needs of the future by having a place for 16 judges on the bench. The actual space will be about 2,420 square feet instead of 25,000 square feet as the newspaper article called for. I haven't the slightest idea where they got the $3 million cost. That would be one-fourth of the cost of the entire building. I would guess this courtroom might run somewhere between $140,000 to $170,000. That is just a guess. Mr. STEED. I was assuming that some of the reason why more joint action in Washington had been omitted had something to do with the inadequate space available to do it, and once the capability was made available, it could lead to an expansion of the type of litigation that would be conducted here in the National Capital. Judge DRENNEN. Yes; it certainly could. And there is no reason under our statute that we could not sit en banc to hear trials, if necessary, important appeals or arguments, or we could sit in panels of three to five or whatever number, or we could sit individually. Mr. STEED. AS I understand, you are saying that since it is no substantial additional cost, and since this will probably be the only building for Tax Court purposes in the foreseeable future, it would be bad judgment and ill-conceived for those in charge not to make provision of this sort so any contingency in the future, whether needed immediately or not, could be dealt with at the time it was needed. Judge DRENNEN. You are exactly right. This is what we had in mind when we provided a slightly larger courtroom. We think we will need three courtrooms, and they will all be used for the same purposes, except on some occasions the larger one might be used for different purposes. FURNITURE Mr. STEED. What fiscal year will you have your request for the furniture in? Judge DRENNEN. That will be in the fiscal year 1974 request. Mr. STEED. Does this give you enough leadtime to acquire what you need on the best terms? Judge DRENNEN. I believe so. Our building committee has been consulting with seven different interior designers or decorators, or whatever you may call them. Of course, we have an item in this year's budget to pay a fee or to enter into a contract with one of them. We expect to do that soon, and we expect them immediately to get to work on it and start laying out what we will need. Mr. ROBISON. În relation to that, an item in the supplemental budget caught my eye: For professional services-interior design and specifications for equipment, furnishings, furniture and accessories for new Tax Court Building, $175,000. This appears to involve work along these lines for the whole building, including the courtrooms. Judge DRENNEN. Yes. Mr. ROBISON. Is this customary? I frankly do not know. I will have to ask the chairman or the clerk. An agency goes out and hires services apart from the GSA services in this regard? Judge DRENNEN. We have checked with GSA. They are one of the ones we have consulted. They charge a fee, too. Mr. ROBISON. They charge a fee, also? Mr. STEED. In the case of the Rayburn Building, when I was in charge of that budget, knowing that at a time certain we would need a certain number of desks, chairs, and what have you, they took bids from all kinds of manufacturers, dealing directly with the manufacturers. If my memory serves me correctly, by giving the manufacturer up to 2 years' leadtime to fill an order of that magnitude, we got a price concession that amounted to a savings of somewhere around $2 |