[Congressional Record Volume 141, Number 177 (Thursday, November 9, 1995)]
[Senate]
[Pages S16921-S16922]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. HARKIN:
  S. 1407. A bill to amend the Food Security Act of 1985 and the 
Agricultural Act of 1949 to permit the harvesting of energy crops on 
conservation reserve land and conservation use acreage for the purpose 
of generating electric power and other energy products, and for other 
purposes; to the Committee on Agriculture, Nutrition, and Forestry.


                 THE ENERGY CROP PRODUCTION ACT OF 1995

 Mr. HARKIN. Mr. President, I introduce a bill which will 
provide a broad range of natural resource and energy related benefits 
to our country. This bill provides support for the development of 
processes which utilize renewable resources for generation of 
electricity and other energy products. It lessens our county's 
dependence on imported oil, supports development of new markets for 
farmers producing energy crops utilized in this process, and provides 
positive environmental benefits to the soil, water, and air components 
of our Nation's natural resources. This bill provides the Secretary of 
Agriculture authority to permit the production and harvesting of energy 
crops for the purpose of generating electricity and other energy 
products on land enrolled in the various acreage reduction programs as 
well as specifically designated demonstration project areas containing 
land enrolled in the Conservation Reserve Program.
  The future of utilizing renewable resources such as energy crops as a 
fuel for producing electric power and other energy products is bright. 
However, as in any emerging technology, support is often needed to 
develop its full potential. The 1992 Energy Policy Act authorized a 
Renewable Energy Production Program in support of this concept. The 
bill I am introducing today complements this effort by not only 
permitting the production of energy crops on land enrolled in various 
government programs, but also providing an cost-share incentive to 
establish these energy crops.
  One relatively new scientific finding is the benefit of energy crops 
with regard to carbon sequestration. Colorado State and Washington 
State Universities have developed protocols to assess the impact of 
land enrolled in the Conservation Reserve Program specifically on 
carbon sequestration. Their initial findings indicate that America's 
grazed land and Conservation Reserve Program lands offer an extremely 
important environmental benefit of extracting carbon from the air in an 
amount equivalent to America's forests. Encouraging the production of 
energy crops as I am suggesting in this bill will help sustain and 
expand this natural process enhancing air quality.
  With regard to land enrolled in the various acreage reduction 
programs, this legislation would: (1) authorize the Secretary to permit 
production and harvesting of energy crops in accordance with a 
conservation plan, and (2) provide a cost share component for the 
establishment of these crops.
  With regard to land enrolled in the Conservation Reserve Program, 
this bill would: (1) provide the Secretary of Agriculture authority to 
permit production and harvesting of energy crops in designated 
demonstration project areas not exceeding an aggregate of one million 
acres based on competitive joint industry/landowner proposals, (2) 
provide a cost share component for the establishment of energy crops, 
(3) provide for a process by which landowners could identify the level 
of reduction in their annual CRP rental payments in exchange for the 
opportunity to participate in this program, and (4) an opportunity for 
Conservation Reserve Program participants, utilizing these provisions, 
to extend their contracts.
  I am proud to be introducing this bill today and welcome other 
Senators to cosponsor this beneficial environmental and energy 
legislation.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1407

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Energy Crop Production Act 
     of 1995''.

     SEC. 2. FINDINGS.

       Congress finds that energy crops--
       (1) provide many of the soil and water conservation and 
     wildlife habitat benefits associated with cover already 
     planted on land enrolled in the conservation reserve program;
       (2) can be harvested using best management practices 
     without compromising the conservation benefits being achieved 
     by the conservation reserve program;
       (3) can maintain and enhance farm income while allowing 
     land to remain in the conservation reserve program at a 
     reduced cost to the Federal government;
       (4) can supply a significant proportion of the energy needs 
     of the United States using domestic resources that are 
     renewable, sustainable, and environmentally beneficial; and
       (5) can effectively trap carbon from the atmosphere and 
     provide air quality benefits.

     SEC. 3. HARVESTING OF ENERGY CROPS ON CONSERVATION RESERVE 
                   LAND.

       Section 1232 of the Food Security Act of 1985 (16 U.S.C. 
     3832) is amended by adding at the end the following:
       ``(f) Energy Crops.--
       ``(1) Definition of energy crop.--In this subsection, the 
     term `energy crop' means a herbaceous perennial grass, a 
     short rotation woody coppice species of tree, or other crop, 
     that may be used to generate electric power or other energy 
     product, as determined by the Secretary in consultation with 
     the State technical committee for a State established under 
     section 1261.
       ``(2) Harvesting of energy crops in designated 
     demonstration areas.--In not more than 10 demonstration 
     project areas not exceeding a total of 1,000,000 acres (based 
     on an evaluation by the Secretary of joint industry and 
     landowner proposals to designate areas as demonstration 
     project areas)), the Secretary shall permit an owner or 
     operator of land, located within a demonstration project 
     area, that is subject to a contract entered into under this 
     subtitle to harvest an energy crop on the land if the owner 
     or operator--
       ``(A) carries out appropriate conservation measures and 
     practices on the land;
       ``(B) harvests energy crops in accordance with this 
     subsection on not more than 75 percent of the land that is 
     subject to the contract, in accordance with a conservation 
     plan and in a manner and at times of the year that ensure 
     that soil, water, and wildlife habitat subject to the 
     conservation reserve program as a whole are not compromised;
       ``(C) if harvesting of energy crops on the land is 
     discontinued, maintains grasses or trees on the land for the 
     duration of the contract; and
       ``(D) submits a bid under paragraph (3) that is accepted by 
     the Secretary.
       ``(3) Bids.--To carry out this subsection, the Secretary 
     shall establish a bid system under which an owner or operator 
     of land that is subject to a contract entered into under this 
     subtitle may offer to reduce the rental payments that would 
     otherwise be payable under the contract in exchange for 
     permission to harvest an energy crop on the land.
       ``(4) Cost-Sharing.--The Secretary shall pay an owner or 
     operator of land described in paragraph (2) 50 percent of the 
     cost of converting land under the contract that is planted to 
     grasses not identified as an energy crop to the production of 
     an energy crop.
       ``(5) Duration.--The Secretary shall permit an owner or 
     operator described in paragraph (2)--
       ``(A) to extend a contract entered into under this subtitle 
     for not to exceed 5 years; and
       ``(B) on expiration of a contract entered into under this 
     subtitle, obtain a priority, at an appropriate rental rate, 
     for reenrollment of the land subject to the contract.''.

     SEC. 4. HARVESTING OF ENERGY CROPS ON CONSERVATION USE 
                   ACREAGE.

       Section 503 of the Agricultural Act of 1949 (7 U.S.C. 1463) 
     is amended--

[[Page S 16922]]

       (1) in subsection (c)--
       (A) in paragraph (7), by striking ``and'' at the end;
       (B) in paragraph (8), by striking the period at the end and 
     inserting ``; and''; and
       (C) by adding at the end the following:
       ``(9) any acreage on the farm that is planted to an energy 
     crop in accordance with subsection (i).''; and
       (2) by adding at the end the following:
       ``(i) Energy Crops.--
       ``(1) Definition of energy crop.--In this subsection, the 
     term `energy crop' means a herbaceous perennial grass, a 
     short rotation woody coppice species of tree, or other crop, 
     that may be used to generate electric power or other energy 
     product, as determined by the Secretary in consultation with 
     the State technical committee for a State established under 
     section 1261 of the Food Security Act of 1985 (16 U.S.C. 
     3861).
       ``(2) Planting of energy crops.--For purposes of this Act, 
     acreage on a farm that is planted to an energy crop shall be 
     considered devoted to conservation uses if the producers on 
     the farm carry out appropriate conservation measures and 
     practices on the acreage, in accordance with a conservation 
     plan that is approved by the Secretary.
       ``(3) Cost sharing.--The Secretary shall pay the producers 
     on a farm 50 percent of the cost of establishing an energy 
     crop if the producers agree to maintain the crop for at least 
     3 crop years.''.
      By Mr. HATCH:
  S. 1408. A bill to amend the Internal Revenue Code of 1986 to provide 
that the amount of an overpayment otherwise payable to any person shall 
be reduced by the amount of past-due, legally enforceable State tax 
obligations of such person; to the Committee on Finance.


                  STATE TAX REFUND OFFSET LEGISLATION

  Mr. HATCH. Mr. President, I rise to today to introduce legislation to 
enhance the tax administration cooperation between the Federal 
Government and the States. In particular, this bill would provide for 
more efficient cooperation between the U.S. Treasury and the various 
State tax agencies in the collection of unpaid taxes. Representative 
Andrew Jacobs has introduced similar legislation in the House as H.R 
757.
  Mr. President let me explain how the law currently stands on this 
issue, why the bill is needed, and what this bill do.
  Currently, the Federal Government maintains a program that allows for 
a Federal tax refund to be withheld from a taxpayer if he or she has a 
past due Federal debt. Debts that are eligible for offset under this 
program include prior year tax debts, child support, student loans, VA 
housing payments, and others. The refund is used to offset the past due 
debt. Many States have similar programs to apply State tax refunds 
against other States debts of a taxpayer.
  Under current law, the Internal Review Service [IRS] has the 
authority to levy or to seize State income tax refunds to satisfy 
Federal tax debts of taxpayers in the 41 States that have a broad-based 
individual income tax. Further, the IRS has the authority to enter into 
reciprocal agreements with State taxing authorities to more efficiently 
collect tax revenues. One are of cooperative agreement between the IRS 
and the States in the authority under current law to offset taxpayers' 
Federal tax debts with a State tax refund. In other words, pursuant to 
these agreements, if a taxpayer owes a tax liability to the Federal 
Government and, at the same time, is due a refund from the State taxing 
authority, that State can withhold the refund allow it to be offset 
against the past due Federal debt. Currently, there are 31 States and 
the District of Columbia that have voluntarily agreed to sign 
cooperative agreements to allow the IRS to satisfy Federal liabilities 
with State refunds. In 1993, the States offset about $61 million in 
debts on behalf of the IRS under these agreements.
  Curiously, there is no authority under current law that allows the 
IRS to enter into additional agreements that would provide for a 
program to offset State tax debts with Federal tax refunds. Yet, 
allowing such agreements would save both the Federal Government and the 
States millions of dollars in lost tax revenue each year.
  Mr. President, under this bill the Treasury would be granted the 
authority to enter into agreements with State tax agencies to offset 
State tax debts with Federal tax refunds. The effect of this 
legislation would be better tax compliance and the payment of 
delinquent tax debts. The bill provides that taxpayers who are due a 
Federal tax refund and also have a past due legally enforceable debt to 
a State taxing authority would have 60 days notice to satisfy the past 
due State debt before the IRS is authorized to release the Federal 
refund to satisfy the State tax debt.
  Mr. President, I am aware that there have been no formal hearings in 
the Senate on this issue. I also understand that the chairman of the 
Committee on Finance may have some technical concerns with the 
administration of this legislation. This is understandable. Technical 
agreements between the Federal Government and the various States can be 
complex. I am open to comments and suggestions on the implementation of 
this new authority. I look forward to working with the Senate Finance 
Committee on this issue. However, I want to get a bill introduced in 
the Senate to begin the formal discussions on how we can best satisfy 
the problems that arise when a taxpayer is due a Federal tax refund 
while at the same time owing a State taxing authority delinquent taxes.
  I want to inform my colleagues that I am aware that the opportunity 
may arise for States to offset so-called source taxes under the 
provisions of this bill. I am supportive of legislation to eliminate 
source taxes. It is not my intention to allow the proposed refund 
offset program to be used for the purposes of collecting these source 
taxes. To my understanding, the State of California has conceded on 
this issue and is also a strong supporter of this bill. If the source 
tax language is dropped from the budget reconciliation bill not pending 
before the Congress, then I am willing to modify the bill to prevent 
States from this offset program for the collection of sources taxes.
  Mr. President, we are entering a more advanced era of computer 
technology. We should help facilitate the most efficient methods of 
collecting and administering Federal and State tax revenues. Allowing 
the Treasury to enter into reciprocal agreements with State moves us 
closer to this goal. The Nation's Governors have asked for this and I 
think we should help them in this area. The Federation of Tax 
Administrators estimates that this program would allow the States to 
recover between $150 and $200 million in tax debts. in addition, the 
Joint Committee has scored H.R. 757 to raise $8 million in additional 
tax revenues over 5 years.

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