[Congressional Record Volume 143, Number 83 (Monday, June 16, 1997)]
[Senate]
[Pages S5694-S5702]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS
By Mr. BREAUX (for himself, Mr. Mack and Mr. Kerrey):
S. 904. A bill to amend title XVIII of the Social Security Act to
provide Medicare beneficiaries with choices, and for other purposes; to
the Committee on Finance.
THE COMPREHENSIVE MEDICARE REFORM AND IMPROVEMENT ACT OF 1997
Mr. BREAUX. Mr. President, I rise for a moment or two to speak to a
bill which Senator Mack and I are introducing today on the entire
question of Medicare. So many people around the country have heard
Congress and elected officials for a long period of time talk about how
we need to reform the Medicare Program. The Medicare Program has been a
wonderful program since 1965. It has assured our senior citizens they
will have adequate health care in a period in their lives when health
care is vitally important.
We have all seen the studies and the reports which clearly point out
that unless Congress fundamentally reforms this program, it is not
going to be around for much longer. We clearly see a program that will
be bankrupt, which is running out of money, and that has to be a
tremendous concern not only to our Nation's seniors but also to their
children and their grandchildren and to society at large.
Unfortunately, every time Congress moves toward trying to reform
Medicare, we do not do it. We have taken the same approach year in and
year out with the thought of fixing Medicare with a Band-Aid type of
approach instead of addressing the fundamental defects in the program.
We have every year said we are going to fix it this year by reducing
the reimbursement fees that doctors and hospitals get for treating
Medicare patients.
I said the other day, and others have made this comment, that before
too long doctors and hospitals will refuse to take Medicare patients
because their reimbursement rate from the Government will be less than
it costs them to do business, that they will simply refuse to take
Medicare patients any longer.
That is already happening in my own family. My mother-in-law just a
week ago informed us that after being diagnosed with an ailment of
diabetes, in trying to go to a local physician in our State of
Louisiana, they promptly informed her they do not take Medicare
patients. I think that is something we all need to be very concerned
about. We cannot continue to try to fix Medicare with a proposal that
truly does not fix it.
What we introduce today is a proposal to make an option available to
Medicare recipients which is patterned on the Federal Employees Health
Benefit Plan that every Member of the Senate and every Member of the
House and all 9 million Federal employees have.
It is a program which is fundamentally different than Medicare
because, unlike Medicare, it is based on competition in the marketplace
as opposed to arbitrary price fixing of Medicare services, which is the
current system under Medicare based here in Washington.
There was an interesting story in the Washington Post this morning
which talked about how House and Senate committees are looking at
bringing about reform to Medicare and Medicaid and basing that reform
on the Federal health plan available to Members of Congress and other
Federal employees. Unfortunately, while the Medicare proposals which
are now pending in the House and the Senate will increase the range of
options available to seniors, they lack the most important feature of
the Federal Employees Health Benefit Plan. That is competition.
Medicare is the only program that fails to deliver health care based on
competition but does it based on arbitrary price fixing, which is no
longer working. The proposals currently in both the House and the
Senate plan would continue to base what we pay managed care programs on
what we spend on the so-called fee-for-service, currently available
under Medicare. And that is the
[[Page S5695]]
problem. There is not fundamental reform.
I think most committees are to be commended. Our Finance Committee
draft does recognize that there is a problem. But in trying to reduce
the costs of Medicare by $115 billion, almost all of those savings come
out of reducing payments to doctors and hospitals. I have said what the
problem is there. Doctors and hospitals will begin to refuse to take
Medicare patients. That, certainly, is not going to help anyone.
So what we are recommending, Senator Mack and I, by our approach, is
to introduce a test program over a 5-year period to try to
fundamentally reform Medicare; to set up demonstration projects around
the country to allow competitive bidding and negotiations to take part
in the delivery of Medicare services to seniors in this country. We had
an interesting report the other day in our Aging Committee that pointed
out we are overpaying managed care programs under Medicare by almost $2
billion a year more than it is costing them to treat the patients. That
is because it is not based on competition, but rather on an arbitrary,
bureaucratic program that is run out of a department here in
Washington. I don't fault the program managers and the bureaucrats.
That is how Congress set it up. But while it may have been a good idea
in 1965, in 1997 it is no longer working. It is totally out of step
with the way health care services need to be delivered in this country.
So what the Breaux-Mack proposal says is that we are going to take a
look at how the Federal employee plan works; we are going to do some
demonstration projects around the country; we are going to take those
results, and Congress will act on those results. We will not just let
the study sit on a shelf somewhere in a library and not have anything
happen with it, but rather we will have the Congress actually take
those recommendations and act on those recommendations.
We are convinced that with this new approach, Medicare beneficiaries
will get more services. We start off with a basic standardized plan
that in addition to what is now available to Medicare patients, also
includes prescription drugs, which is incredibly important. We also
guarantee this basic package will be available to all of the people we
are proposing. But the fundamental difference is they will have more
information about the plans, so the plans will be able to be compared
for people to see which plan is the best. So we will create a situation
where Medicare beneficiaries will have more services offered to them,
more choices of which plan they would like to consider, more benefits
under those plans, and we think we can clearly do it for less money
than is being spent on the program right now.
One of the features of our program is that it sets up an office of
competition, much like the private plans that are available now to
Federal employees. We think that an office of competition will be able
to call for people to actually come in and submit proposals. Then,
after they look at these proposals and make sure they meet the
standardized package of benefits, they will begin to negotiate with
these people who are offering these plans to our seniors in the United
States.
Competition is a wonderful thing. For the right to treat 38 million
Medicare recipients, people will compete. They will say, ``Our plan is
better than their plan. Our plan offers more than their plan. Our plan
can do it at a better price.'' There will be a competitive world set up
that is not now available to Medicare recipients.
That is the fundamental problem, I think, that the House and Senate
bills, and respective Finance and Ways and Means Committee bills, do
not address. It still says we are going to continue to fix prices out
of Washington for Medicare recipients. I think that every think tank we
have talked to--and Senator Mack and I have met with liberal think
tanks and conservative think tanks, and people who have spent a
lifetime studying this problem. Generally, they all have come to the
same conclusion--that greater competition in the marketplace will allow
health providers to offer more services to senior citizens and do it at
a better price.
So we are going to introduce today legislation that does establish a
Medicare reform package or proposals which we think represent
fundamental reform in the system. We are not saying that all seniors
have to move into this program immediately. No, we are saying we ought
to have a demonstration project in 10 cities around the country and in
rural areas around America, to see how it would work, do this test
marketing for about a 5-year period, until we can get a great deal of
information about what is happening out there when you try to reform
this system, then take that information and bring it back to the
Congress and have Congress act on that recommendation. We think that is
something that makes a great deal of sense.
I think it is a balanced way to proceed. We are not rushing into it.
We are not telling seniors they have to do something overnight, but
merely giving them the choice during this period of time. I think that
is what seniors really want. They want the choice. They want more
information. They want a better benefit package. And all of us want,
bottom line, to see that this program is going to be around for when we
move into it, when our children move into it, when the baby-boomer
generation we hear so much talk about is ready to participate in the
program.
We clearly cannot continue down the same path that we have continued
on for so many years, since 1965. We think the Breaux-Mack proposal is
a realistic alternative. It merits bipartisan support, and we hope both
committees ultimately will bring to the floor a type of program based
on what myself and Senator Mack will be introducing in the Congress
today.
______
By Mr. McCAIN (for himself and Mr. Hollings):
S. 905. A bill to establish a national physical fitness and sports
foundation to carry out activities to support and supplement the
mission of the President's Council on Physical Fitness and Sports, and
for other purposes; to the Committee on Commerce, Science, and
Transportation.
the sports foundation establishment act
Mr. McCAIN. Mr. President, I am pleased to introduce, along with
Senator Hollings, the National Physical Fitness and Sports Foundation
Establishment Act. This bill would create a charitable, not-for-profit
foundation to raise funds from the private sector to support the
activities of the President's Council on Physical Fitness.
The President's Council presently relies on Federal appropriations to
support its activities. In each of the last 2 fiscal years, the
President's Council has received appropriations of approximately $1
million. Future appropriations for the Mr. President's Council are at
risk as we strive to balance the Federal budget.
The foundation created by this bill would raise private funds to
sustain the President's Council on Physical Fitness. To facilitate
fundraising, the foundation is permitted to offer the use of the seal
of the President's Council for promotional purposes in exchange for
sponsorship funds. The bill does not authorize the expenditure of
Federal funds.
The primary goal of the President's Council is to foster programs
that encourage people of all ages to participate regularly in sports
and physical activities. The President's Council focuses on grassroots,
community-based programs. Perhaps the Council's most well known
activity is the President's Challenge Physical Fitness Awards Program
which is administered by teachers and youth programs across the
country.
We should act to preserve the President's Council. Its activities are
particularly important because our Nation's children are becoming
increasingly less physically fit even as we learn that physical fitness
in one's youth is important to living a healthy life during adulthood.
______
By Mr. D'AMATO (for himself, Mr. Moynihan, Mr. Chafee, Mr.
Breaux, Mr. Hatch, and Mr. Graham):
S. 906. A bill to amend the Internal Revenue Code of 1986 to extend
the economic activity credit for Puerto Rico, and for other purposes;
to the Committee on Finance.
THE PUERTO RICO ECONOMIC ACTIVITY CREDIT IMPROVEMENT ACT OF 1997
Mr. D'AMATO. Mr. President, I rise today to join Senator Chafee,
Senator
[[Page S5696]]
Moynihan, Senator Breaux, Senator Hatch, and Senator Bob Graham in
introducing legislation that will induce investment and create
employment in Puerto Rico. Puerto Ricans have been U.S. citizens since
1917. Since World War I an estimated 200,000 Puerto Ricans have served
in the U.S. Armed Forces. Yet, the Puerto Rican unemployment rate is
more than twice the national average, its annual per capita income is
less than half the national average, and well over 50 percent of its
population live below the poverty line. We as a Congress must take
action to bring Puerto Rico's economy up to the levels that we expect
for all Americans.
Under current law, section 30A of the Internal Revenue Code provides
a targeted wage credit to companies during business in Puerto Rico
based upon the compensation paid to their employees. It does not allow
new business starts and the credit terminates in 2006. As a result,
existing companies have little incentive to make new investments or
replace depreciating plant and equipment. Job losses will occur as
existing plants are shut down and these activities may be transferred
to foreign locations. Net job growth can only occur if new firms start
up and if expanding firms replace job losses. Manufacturing accounts
for more than 40 percent of Puerto Ricos gross domestic product.
This legislation expands section 30A to provide an employer tax
credit for employees located in Puerto Rico that will also cover new
businesses. This credit is based upon the compensation to their
employees. The credit will only remain until economic conditions
improve within Puerto Rico including an unemployment rate not to exceed
150 percent of the U.S. average, per capita income is at least 66
percent of the national average, and that the poverty level does not
exceed 30 percent. The economic conditions for the tax incentives to
end are modest but achieve significant economic progress for the people
of Puerto Rico.
This legislation serves U.S. fiscal interests. Without spurring job
creation in Puerto Rico, the United States will be paying unemployment
and welfare benefits to people that have a strong work ethic and
impressive job skills. Puerto Rico has a labor force of 1.3 million
people. Of this total approximately 190,000 are available for
employment. We must do everything possible to help facilitate
employment for these people.
Even though Puerto Rico is located 1,600 miles southeast of New York
City, the people of New York have a direct interest in the Puerto Rican
economy. Puerto Rican subsidiaries of mainland companies purchase
approximately $195 million per year worth of supplies and services from
New York. Corporations headquartered in New York State that have
invested in Puerto Rico employ over 39,000 persons in New York. If
corporations are drawn to other regions where there are tax incentives,
New York State will not only lose jobs but also significant amounts of
income from goods and services.
Mr. President, this legislation is a powerful economic development
initative that is vital to Puerto Rico because of the many hurdles the
people face in their struggle for development. The island faces much
higher transportation costs than most States; an infrastructure which
still needs billions in investment to bring it up to acceptable
standards and it is faced with competition within the Caribbean and
other locations which pay wages a fraction of Puerto Rico's.
Mr. President, I urge my colleagues on both sides of the aisle to
join us in cosponsoring this important legislation.
Mr. President, I ask unanimous consent that the complete text of the
bill be placed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 906
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; AMENDMENT OF 1986 CODE.
(a) Short Title.--This Act may be cited as the ``Puerto
Rico Economic Activity Credit Improvement Act of 1997''.
(b) Amendment of 1986 Code.--Except as otherwise expressly
provided, whenever in this Act an amendment or repeal is
expressed in terms of an amendment to, or repeal of, a
section or other provision, the reference shall be considered
to be made to a section or other provision of the Internal
Revenue Code of 1986.
SEC. 2. MODIFICATIONS OF PUERTO RICO ECONOMIC ACTIVITY
CREDIT.
(a) Corporations Eligible To Claim Credit.--Section
30A(a)(2) (defining qualified domestic corporation) is
amended to read as follows:
``(2) Qualified domestic corporation.--For purposes of
paragraph (1)--
``(A) In general.--A domestic corporation shall be treated
as a qualified domestic corporation for a taxable year if it
is actively conducting within Puerto Rico during the taxable
year--
``(i) a line of business with respect to which the domestic
corporation is an existing credit claimant under section
936(j)(9), or
``(ii) an eligible line of business not described in clause
(i).
``(B) Limitation to lines of business.--A domestic
corporation shall be treated as a qualified domestic
corporation under subparagraph (A) only with respect to the
lines of business described in subparagraph (A) which it is
actively conducting in Puerto Rico during the taxable year.
``(C) Exception for corporations electing reduced credit.--
A domestic corporation shall not be treated as a qualified
corporation if such corporation (or any predecessor) had an
election in effect under section 936(a)(4)(B)(iii) for any
taxable year beginning after December 31, 1996.''
(b) Application on Separate Line of Business Basis;
Eligible Line of Business.--Section 30A is amended by
redesignating subsection (g) as subsection (h) and by
inserting after subsection (f) the following new subsection:
``(g) Application on Line of Business Basis; Eligible Lines
of Business.--For purposes of this section--
``(1) Application to separate line of business.--
``(A) In general.--In determining the amount of the credit
under subsection (a), this section shall be applied
separately with respect to each substantial line of business
of the qualified domestic corporation.
``(B) Exceptions for existing credit claimant.--This
paragraph shall not apply to a substantial line of business
with respect to which the qualified domestic corporation is
an existing credit claimant under section 936(j)(9).
``(C) Allocation.--The Secretary shall prescribe rules
necessary to carry out the purposes of this paragraph,
including rules--
``(i) for the allocation of items of income, gain,
deduction, and loss for purposes of determining taxable
income under subsection (a), and
``(ii) for the allocation of wages, fringe benefit
expenses, and depreciation allowances for purposes of
applying the limitations under subsection (d).
``(2) Eligible line of business.--The term `eligible line
of business' means a substantial line of business in any of
the following trades or businesses:
``(A) Manufacturing.
``(B) Agriculture.
``(C) Forestry.
``(D) Fishing.
``(3) Substantial line of business.--For purposes of this
subsection, the determination of whether a line of business
is a substantial line of business shall be determined by
reference to 2-digit codes under the North American Industry
Classification System (62 Fed. Reg. 17288 et seq., formerly
known as `SIC codes').''
(c) Repeal of Base Period Cap.--
(1) In general.--Section 30A(a)(1) (relating to allowance
of credit) is amended by striking the last sentence.
(2) Conforming amendment.--Section 30A(e)(1) is amended by
inserting ``but not including subsection (j)(3)(A)(ii)
thereof'' after ``thereunder''.
(d) Application of Credit.--Section 30A(h) (relating to
applicability of section), as redesignated by subsection (b),
is amended to read as follows:
``(h) Application of Section.--
``(1) In general.--This section shall apply to taxable
years beginning after December 31, 1995, and before the
termination date.
``(2) Termination date.--For purposes of paragraph (1)--
``(A) In general.--The termination date is the first day of
the 4th calendar year following the close of the first period
for which a certification is issued by the Secretary under
subparagraph (B).
``(B) Certification.--
``(i) In general.--The Secretary shall issue a
certification under this subparagraph for the first 3-
consecutive calendar year period beginning after December 31,
1997, for which the Secretary determines that Puerto Rico has
met the requirements of clause (ii) for each calendar year
within the period.
``(ii) Requirements.--The requirements of this clause are
met with respect to Puerto Rico for any calendar year if--
``(I) the average monthly rate of unemployment in Puerto
Rico does not exceed 150 percent of the average monthly rate
of unemployment for the United States for such year,
``(II) the per capita income of Puerto Rico is at least 66
percent of the per capita income of the United States, and
``(III) the poverty level within Puerto Rico does not
exceed 30 percent.''
(e) Conforming Amendments.--
(1) Section 30A(b) is amended by striking ``within a
possession'' each place it appears and inserting ``within
Puerto Rico''.
(2) Section 30A(d) is amended by striking ``possession''
each place it appears.
[[Page S5697]]
(3) Section 30A(f) is amended to read as follows:
``(f) Definitions.--For purposes of this section--
``(1) Qualified income taxes.--The qualified income taxes
for any taxable year allocable to nonsheltered income shall
be determined in the same manner as under section 936(i)(3).
``(2) Qualified wages.--The qualified wages for any taxable
year shall be determined in the same manner as under section
936(i)(1).
``(3) Other terms.--Any term used in this section which is
also used in section 936 shall have the same meaning given
such term by section 936.''
(f) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
1997.
SEC. 3. COMPARABLE TREATMENT FOR OTHER ECONOMIC ACTIVITY
CREDIT.
(a) Corporations Eligible To Claim Credit.--Section
936(j)(2)(A) (relating to economic activity credit) is
amended to read as follows:
``(A) Economic activity credit.--
``(i) In general.--In the case of a domestic corporation
which, during the taxable year, is actively conducting within
a possession other than Puerto Rico--
``(I) a line of business with respect to which the domestic
corporation is an existing credit claimant under paragraph
(9), or
``(II) an eligible line of business not described in
subclause (I),
the credit determined under subsection (a)(1)(A) shall be
allowed for taxable years beginning after December 31, 1995,
and before January 1, 2002.
``(ii) Limitation to lines of business.--Clause (i) shall
only apply with respect to the lines of business described in
clause (i) which the domestic corporation is actively
conducting in a possession other than Puerto Rico during the
taxable year.
``(iii) Exception for corporations electing reduced
credit.--Clause (i) shall not apply to a domestic corporation
if such corporation (or any predecessor) had an election in
effect under subsection (a)(4)(B)(iii) for any taxable year
beginning after December 31, 1996.''
(b) Application on Separate Line of Business Basis;
Eligible Line of Business.--
(1) In general.--Section 936(j) is amended by adding at the
end the following new paragraph:
``(11) Application on line of business basis; eligible
lines of business.--For purposes of this section--
``(A) Application to separate line of business.--
``(i) In general.--In determining the amount of the credit
under subsection (a)(1)(A) for a corporation to which
paragraph (2)(A) applies, this section shall be applied
separately with respect to each substantial line of business
of the corporation.
``(ii) Exceptions for existing credit claimant.--This
paragraph shall not apply to a line of business with respect
to which the qualified domestic corporation is an existing
credit claimant under paragraph (9).
``(iii) Allocation.--The Secretary shall prescribe rules
necessary to carry out the purposes of this subparagraph,
including rules--
``(I) for the allocation of items of income, gain,
deduction, and loss for purposes of determining taxable
income under subsection (a)(1)(A), and
``(II) for the allocation of wages, fringe benefit
expenses, and depreciation allowances for purposes of
applying the limitations under subsection (a)(4)(A).
``(B) Eligible line of business.--For purposes of this
subsection, the term `eligible line of business' means a
substantial line of business in any of the following trades
or businesses:
``(i) Manufacturing.
``(ii) Agriculture.
``(iii) Forestry.
``(iv) Fishing.''
(2) New lines of business.--Section 936(j)(9)(B) is amended
to read as follows:
``(B) New lines of business.--A corporation shall not be
treated as an existing credit claimant with respect to any
substantial new line of business which is added after October
13, 1995, unless such addition is pursuant to an acquisition
described in subparagraph (A)(ii).''
(3) Separate lines of business.--Section 936(j), as amended
by paragraph (1), is amended by adding at the end the
following new paragraph:
``(12) Substantial line of business.--For purposes of this
subsection (other than paragraph (9)(B) thereof), the
determination of whether a line of business is a substantial
line of business shall be determined by reference to 2-digit
codes under the North American Industry Classification System
(62 Fed. Reg. 17288 et seq., formerly known as `SIC
codes').''
(c) Repeal of Base Period Cap for Economic Activity
Credit.--
(1) In general.--Section 936(j)(3) is amended to read as
follows:
``(3) Additional restricted reduced credit.--
``(A) In general.--In the case of an existing credit
claimant to which paragraph (2)(B) applies, the credit
determined under subsection (a)(1)(A) shall be allowed for
any taxable year beginning after December 31, 1997, and
before January 1, 2006, except that the aggregate amount of
taxable income taken into account under subsection (a)(1)(A)
for such taxable year shall not exceed the adjusted base
period income of such claimant.
``(B) Coordination with subsection (a)(4)(b).--The amount
of income described in subsection (a)(1)(A) which is taken
into account in applying subsection (a)(4)(B) shall be such
income as reduced under this paragraph.''
(2) Conforming amendment.--Section 936(j)(2)(A), as amended
by subsection (a), is amended by striking ``2002'' and
inserting ``2006''.
(d) Application of Credit.--
(1) In general.--Section 936(j)(2)(A), as amended by this
section, is amended by striking ``January 1, 2006'' and
inserting ``the termination date''.
(2) Special rules for applicable possessions.--Section
936(j)(8)(A) is amended to read as follows:
``(A) In general.--In the case of an applicable
possession--
``(i) this section (other than the preceding paragraphs of
this subsection) shall not apply for taxable years beginning
after December 31, 1995, and before January 1, 2006, with
respect to any substantial line of business actively
conducted in such possession by a domestic corporation which
is an existing credit claimant with respect to such line of
business, and
``(ii) this section (including this subsection) shall
apply--
``(I) with respect to any substantial line of business not
described in clause (i) for taxable years beginning after
December 31, 1997, and before the termination date, and
``(II) with respect to any substantial line of business
described in clause (i) for taxable years beginning after
December 31, 2006, and before the termination date.''
(3) Termination date.--Section 936(j), as amended by
subsection (b), is amended by adding at the end the following
new paragraph.
``(13) Termination date.--For purposes of this subsection--
``(A) In general.--The termination date for any possession
other than Puerto Rico is the first day of the 4th calendar
year following the close of the first period for which a
certification is issued by the Secretary under subparagraph
(B).
``(B) Certification.--
``(i) In general.--The Secretary shall issue a
certification for a possession under this subparagraph for
the first 3-consecutive calendar year period beginning after
December 31, 1997, for which the Secretary determines that
the possession has met the requirements of clause (ii) for
each calendar year within the period.
``(ii) Requirements.--The requirements of this clause are
met with respect to a possession for any calendar year if--
``(I) the average monthly rate of unemployment in the
possession does not exceed 150 percent of the average monthly
rate of unemployment for the United States for such year,
``(II) the per capita income of the possession is at least
66 percent of the per capita income of the United States, and
``(III) the poverty level within the possession does not
exceed 30 percent.''
(e) Effective Dates.--
(1) In general.--The amendments made by this section shall
apply to taxable years beginning after December 31, 1997.
(2) New lines of business.--The amendment made by
subsection (b)(2) shall apply to taxable years beginning
after December 31, 1995.
Mr. MOYNIHAN. Mr. President, today I am joining Senator D'Amato,
along with Senators Chafee, Breaux, Hatch and Graham, in introducing
bipartisan legislation to improve the existing tax credit for providing
employment in Puerto Rico.
Economic conditions in Puerto Rico are cause for serious concern.
Over half of the population lives below the poverty line. Puerto Rico's
average annual per capita income of approximately $7,500 is less than
one-third the national average. Its average unemployment rate is well
over twice the national average of 4.8 percent for May 1997.
In recent years, Congress has twice imposed significant tax increases
on companies doing business in Puerto Rico, first in 1993 and again in
1996. While it is unclear to what extent those tax changes will result
in employer relocation or lost jobs, they undoubtedly have increased
the vulnerability of the economy of Puerto Rico. Exacerbating this
economic uncertainty, the tax changes are being phased in at the same
time that Puerto Rico faces increased economic competition from low-
wage Caribbean countries and from Mexico.
This legislation would respond to these serious problems by building
on the temporary wage credit that is currently provided in the Internal
Revenue Code. Employers generally would be eligible for a tax credit
equal to 60 percent of wages and fringe benefit expenses for employees
located in Puerto Rico. New as well as existing employers would be
rewarded for providing local jobs. The credit would remain in effect
until the attainment of specific
[[Page S5698]]
economic goals in Puerto Rico, which would trigger an automatic
phaseout of the credit.
I believe this investment in the long-term economic health and well-
being of Puerto Rico is imperative. It is our obligation to the people
of Puerto Rico, who are U.S. citizens but not represented in the
Senate, to take note and address the very serious plight of their
economy.
Mr. GRAHAM. Mr. President, I would like to join with my distinguished
colleague, Senator Moynihan, the ranking member of the Finance
Committee, along with both Republicans and Democrats on the Finance
Committee to seek a restoration of job creation and economic growth
incentives for U.S. businesses in Puerto Rico.
Last year's tax legislation eliminated the longstanding incentive
that applied in Puerto Rico: section 936. Efforts were made to replace
section 936 with a new wage credit provision in section 30A, but even
that provision is scheduled to expire. The legislation enacted did not
provide for any tax benefits for new companies locating in Puerto Rico
or existing companies expanding their operation on the island. The
legislation we introduce today will make permanent wage credit benefits
of section 30A to companies seeking to locate or expand their
activities in Puerto Rico.
Puerto Rico's economy is directly related to the economies of Florida
and many other States. Most of the materials and many services used by
manufacturing facilities in Puerto Rico are supplied from the States.
Puerto Rico is also the center of economic activity for the entire
strategic Caribbean region. Any downturn in the economy of Puerto Rico
would have serious negative implications for the States that do
significant business with the island as well as for the Caribbean Basin
as a whole.
The bill we introduce today would tie tax benefits directly to wages
paid and investment made in Puerto Rico. It is targeted, efficient, and
has the broad bipartisan support of the public and private sectors in
Puerto Rico. It is a provision that we should act on now. We should not
await a significant downturn in the Puerto Rico economy before taking
action. It is clearly desirable and necessary to act this year if we
are to increase economic conditions in Puerto Rico to levels consistent
with those we should expect for all American citizens.
______
By Mr. D'AMATO (for himself and Mr. Baucus):
S. 907. A bill to amend the Revenue Act of 1987 to provide a
permanent extension of the transition rule for certain publicly traded
partnerships; to the Committee on Finance.
TAX CODE LEGISLATION
Mr. D'AMATO. Mr. President, I rise today to join Senator Baucus in
introducing legislation that will amend the Tax Code to provide a
permanent extension of a grandfather provision contained in the Omnibus
Budget Reconciliation Act of 1987. This 10 year grandfather provision
was provided for publicly traded partnerships [PTP's] that were in
existence as of December 17, 1987. A PTP is a partnership whose
interests are traded on established securities exchanges or are readily
tradable in secondary markets.
Included in the Omnibus Budget Reconciliation Act of 1987 is section
7704 of the Internal Revenue Code. The section provides that PTP's will
generally be taxed as corporations; income or loss does not pass
through to the partners. Section 7704 does not apply, however, to PTP's
where 90 percent or more of their income is qualifying income, such as
from interest, dividends, real estate, timber, oil, and gas. This
exception applies regardless when the PTP was formed. Other PTP's in
existence when section 7704 was enacted were grandfathered, but only
for 10 years, through 1997. Our legislation would extend the
grandfather provision permanently.
The purpose of section 7704 according to the committee reports was
intended to stop the long term erosion of the corporate tax base. There
was a concern that much of corporate America would convert to PTP's
resulting in a decline of corporate tax revenues.
This purpose has been achieved because of the prospective application
of that section. There were approximately 120 PTP's in existence in
1987 and because of the legislation the number of PTP's did not
snowball. Permanently grandfathering PTP's would not defeat the purpose
of the 1987 legislation since the grandfather applies only to those
PTP's that were in existence at the time of the 1987 legislation.
Fairness to the owners of the PTP's that were grandfathered during
the Omnibus Budget Reconciliation Act of 1987 is an important issue.
The conversion from a corporation to a PTP was a costly and time-
consuming process. The companies that converted to PTP form relied on
the expectation that they would be able to operate as partnerships as
long as they wanted. The conversion process involved consultation with
investment bankers, appraisals, planning by corporate finance,
securities and tax lawyers, multiple filings with the Securities and
Exchange Commission and State securities agencies, proxy statements and
shareholder votes, et cetera. This process would not have been started
or completed had there been any reasonable prospect that a change in
the tax law would have applied retroactively or after a limited period
of time. Failure to pass this legislation will be punishing PTPs that
played by the rules.
If the grandfather is not made permanent many of these same costs
will be incurred once again. Grandfathered PTP's will be forced to
convert to corporate form by January 1998. To do so will require
lengthy planning, and the same investment banking advice, appraisals
and attorney fees. The need for extensive, advance planning makes it
essential that the matter be resolved this year. These PTP's relied on
the law in effect before passage of the 1987 act and it is unreasonable
and unfair to now force these PTP's to undergo this expensive, time
consuming process to convert to corporate form. No public purpose will
be served by such forced conversions.
The loss of the grandfather will hurt PTP investors and employees of
the companies. The value of PTP units will decline if the grandfather
is not permanently implemented. Most of these investors are average,
middle-class taxpayers who have invested in PTP units oftentimes
through an individual retirement account, because of the desire for a
safe, liquid investment. As PTP units decline in value, a company's
ability to expand will be negatively affected and the employees will
suffer.
We do not achieve any tax policy goal by honoring the 10-year
grandfather. That goal was fully achieved by making section 7704 apply
prospectively. Instead, all we would accomplish by not making the
grandfather provision permanent would be harm to these PTP's and their
investors. The PTP's operate in all 50 States affecting many of our
districts and include a wide variety of industries, from motels and
restaurants to chemicals and financial advising. The most recent count
indicates that there are well over 300,000 individual investors.
Mr. President, I urge my colleagues on both sides of the aisle to
join me and Senator Baucus in cosponsoring this important legislation.
Mr. President, I ask unanimous consent that the complete text of the
bill be placed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 907
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. PERMANENT EXTENSION OF TRANSITION RULE FOR CERTAIN
PUBLICLY TRADED PARTNERSHIPS.
(a) In General.--Paragraph (1) of section 10211(c) of the
Revenue Act of 1987 (Public Law 100-203) is amended to read
as follows:
``(1) In general.--The amendments made by this section
shall apply to taxable years beginning after December 31,
1987, except that such amendments shall not apply to any
existing partnership.''
(b) Effective Date.--The amendment made by this section
shall take effect as if included in the provisions of section
10211 of the Revenue Act of 1987.
Mr. BAUCUS. Mr. President, I am pleased to join with my colleague,
Senator D'Amato, in introducing this legislation, which would
permanently extend the 10-year grandfather for publicly traded
partnerships [PTP's].
PTP's were first created in the early 1980's for the purpose of
combining the traditional limited partnership form with the ability to
have the partnership units freely traded on established securities or
secondary markets. When Congress enacted the Omnibus Budget
Reconciliation Act of 1987, it included a
[[Page S5699]]
provision which reversed existing law at the time by requiring that
PTP's would generally be treated as corporations for income tax
purposes. The act completely exempted certain types of PTP's from the
law, primarily those whose income is derived from resources such as
timber, oil and gas, minerals, and real estate. PTP's which did not
meet the criteria were given a 10-year transition period, after which
they would no longer be exempted from the new requirements. This
transition period, the grandfather, expires at the end of 1997. Our
bill would extend it permanently.
Mr. President, there is no public or tax policy reason for treating
the grandfathered PTP's differently than those completely exempted from
the law. All of the PTP's relied upon the law that was in effect when
they were created. They are all similarly structured and deserve the
same right to preserve their partnership status, regardless of the line
of business in which they operate. There are only 27 of them remaining,
and they are involved in a wide variety of industries, from motels and
restaurants to chemicals, financial advising and macadamia nuts. They
went through a costly and time-consuming process in order to convert
from a corporation to a PTP in the first place, and will incur many of
the same costs if they are now required to convert back to corporate
form when the grandfather expires in January.
More importantly, I am concerned about the effect that the loss of
the grandfather will have on PTP investors. It is a virtual certainty
that the value of PTP units will be adversely affected if the
grandfather expires, reducing the value of the investor's holdings.
Most of these investors are average, middle-class taxpayers, many of
them elderly, who invested in PTP units because of their high yield.
They are scattered throughout the country, and at last count numbered
over 300,000. Many made this investment before the 1987 act was passed.
There is no tax policy goal that will be achieved by allowing the
grandfather to expire. That goal was fully achieved by making the law
apply prospectively. All we accomplish is inflicting harm on these
PTP's and their investors, without their having done anything illegal
or improper when they were created. With this action, all remaining
PTP's would be treated uniformly under the law. If the legislation is
incorporated into this year's reconciliation bill, it will be as a
revenue-neutral measure.
______
By Mr. SMITH of Oregon (for himself and Mr. Wyden):
S. 908. A bill to authorize the Secretary of the Interior to
participate in a water conservation project with the Tumalo Irrigation
District, OR; to the Committee on Energy and Natural Resources.
THE TUMALO IRRIGATION DISTRICT WATER CONSERVATION PROJECT AUTHORIZATION
ACT
Mr. SMITH of Oregon. Mr. President, I am today introducing
legislation to authorize financial assistance to the Tumalo Irrigation
District for the construction of water system improvements for the
purposes of efficient utilization of water and to increase water for
in-stream flows in Tumalo Creek and the Deschutes River basin.
The district will conserve approximately 40,000 acre feet of water
per year upon completion of the project. This conservation will allow
the diversions from the Deschutes River and Tumalo Creek to be reduced
by about 32,000 acre-feet. This increased in-stream waterflow will
improve water quality, fisheries, increase opportunities for
recreation, and enhance fire protection with the possible installation
of hydrants.
This legislation also has the added benefit of local funding with 50
percent coming from the district, State, and community. This project
will be completed in phases with the recommended total appropriation at
$15,000,000.
I am proud of the district's work to improve in-stream flows. This is
a positive solution to the inefficient and environmentally unsound
system now in place. Oregon has long demonstrated its ability to
identify innovative and progressive solutions, and I believe that this
legislation will allow the Tumalo Irrigation District to proudly
continue that tradition.
Mr. President, I ask unanimous consent that a copy of the bill be
inserted in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 908
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress Assembled, That this
Act may be cited as the ``Tumalo Irrigation District Water
Conservation Project Authorization Act''.
Sec. 2. At the request of the Tumalo Irrigation District,
Oregon, the Secretary of the Interior may participate in the
design, planning, and construction of a comprehensive water
conservation project by the District. The federal share of
the costs of such project may not exceed 50 percent.
Sec. 3. There are authorized to be appropriated to the
Secretary of the Interior, plus or minus such amounts as may
be justified by reason of ordinary fluctuations of applicable
cost indexes, not to exceed $15,000,000 for the federal share
of costs related to the project.
______
By Mr. McCAIN (for himself, Mr. Kerrey, and Mr. Hollings):
S. 909. A bill to encourage and facilitate the creation of secure
public networks for communication, commerce, education, medicine, and
government; to the Committee on Commerce, Science, and Transportation.
Secure Public Networks Act
Mr. KERREY. Mr. President, earlier, I sent to the desk a bill that I
introduced on behalf of myself, Senator McCain of Arizona, Senator John
Kerry of Massachusetts, and Senator Fritz Hollings of South Carolina.
The bill is called the Secure Public Networks Act of 1997, and it
establishes as a priority that we are going to try with our law to
develop a mechanism whereby, in collaboration with the private sector,
the U.S. Government can work to secure these public networks upon which
our commerce depends, our Government operations depend, and
increasingly our national security depends.
Secure public networks are essential to the protection of personal
privacy and the promotion of commerce on the Internet and other
communications networks. Without trust in the system, the Internet will
never reach its full potential as a new form of communications in
commerce.
I believe there is an urgent need to enact legislation this year
which can promote the creation and use of new networks, provide the
security American citizens require in their communications and balance
America's compelling interest in commerce and public safety.
Congress has been gridlocked for more than a year in the debate about
the Nation's export policy for encryption products. Our Nation's policy
on encryption is only a single piece of the puzzle, however. We need to
ensure that the whole system of our public communications networks
provides the security required.
There are three large interests, as I see it, at stake in this entire
debate. One of the reasons there is an urgency to develop new
legislation and enact new legislation that the President will be able
to sign this year is that unless these networks are secure, we risk all
three.
The first is in the area of commerce. The increasing amount of
business that is being done on the network and the failure to be able
to establish security on an international basis risks the full
development potential of commercial networks.
The second is in the area of Government operations itself. Not only
are there concerns in the private sector but on the Government side,
from the Internal Revenue Service even to the operations of schools,
that we need to have a secure public network. Obviously, if we are
going to develop fully the electronic filing system--and for
colleagues' reference, less than 1 percent error rate occurs in
electronic filing, where nearly a 25-percent filing rate occurs in
paper filing, there is a potential for saving money.
In addition to that, there is an increasing amount of education that
is occurring on the network, once again offering a tremendous amount of
savings for individuals who look for ways to leverage intellectual
property and increase the efficiency of education. You need look no
further than what is going on now in the area of education on the
network, but it needs to be secure.
[[Page S5700]]
In the area of law enforcement, again, there is an offensive and
defensive capability, and I am addressing at this instance the
defensive capability, our ability to be able to communicate, for
national security reasons, and our ability to be able to communicate
for law enforcement reasons and know those communications are secure is
the first order of business of the Secure Public Networks Act of 1997.
Our commercial interests, Mr. President, lie in maintaining American
companies' leading position as producers of software and in the
promotion of commerce on-line on the Internet. I do not believe we can
fully achieve either of these objectives if the current law remains
unchanged.
Second, the American people should be able to have secure access to
their Government, as I indicated before, not just with the IRS, but
also a whole range of other services, including the Government job of
educating our people. There is a tremendous requirement in every single
operation of Government for the consumer of those services to know that
their communication is secure, that there is no manipulation of the
data, no transference of that data.
And as I said, again, thirdly, there is a public safety interest in
meeting the needs of law enforcement and national defense. Here a
secure public network can provide both defensive and offensive
security.
Mr. President, the greatest threat to our citizens' privacy is very
often described by some advocates of change as being the Government.
They are afraid of the Government interfering with their privacy. But I
urge my colleagues to consider what the marketplace sees out there,
which is that increasingly it is the private-sector interests that are
the greatest threat to the privacy of citizens.
For example, the FBI reported last month that a hacker collected
100,000 credit card numbers from an Internet provider and then
attempted to sell these numbers for cash. This is a private-sector
individual out there, obviously very skilled. These hackers and
crackers are skilled way beyond my capacity to understand what they are
doing, except to know that they have the ability to come in and steal
information that has great value, to manipulate that data and do not
just a little bit of mischief but put our commercial and our national
security interests at risk.
There was a story in the New York Times last week, Mr. President,
that detailed the trauma and the horror faced in 1994 by a Texas woman
who received a letter full of threatening sexual comments from an
inmate in a Texas prison. She asked the question, ``How did this inmate
get access to the information?'' and was surprised to discover that her
personal life had become available as a result of a private-sector
company's use of Texas inmates to do input into their data bases.
There was another example in this same article about a 1993 employee
at a car dealership in New Jersey using their company's access to
credit information to open false accounts in their customers' names and
charging up thousands of dollars of merchandise with the fraudulent
cards.
Another example, in 1995, a convicted child rapist, working in a
Boston hospital, used a former fellow employee's password to access
information on the hospital's patients. He found the phone numbers of
young patients in the area, and then made obscene phone calls to girls
as young as 8 years old.
There are many other examples that one could give. The point that I
am trying to make, Mr. President, is, as this debate unfolds, one of
the things you will hear immediately is that this legislation is an
attempt by Government to gain access over the privacy of individuals.
That is simply not true. There is protection after protection after
protection in this legislation guarding against that.
This is an attempt to tighten up the security so that we know that a
private individual, as I indicated here earlier with three or four
examples, does not have the opportunity to either come in and intercept
your communication or go into your data base and retrieve information
that they will use against you or manipulate a data base so as to
engage in fraudulent transactions that could cost not only the
companies but could cost the individual substantial amounts of money.
To provide privacy protection and help prevent abuse of public
networks, the Secure Public Networks Act makes it illegal for a person
to use encryption to commit a crime; to exceed lawful authority in
decrypting data or communications; to break the encryption code of
another for the purpose of violating privacy, security, and property
rights; to steal intellectual property on a public communications
network; and to misuse key recovery information.
This act fully protects and strengthens the privacy rights of the
individual without damaging the interest of public safety. Law
enforcement will be granted access to key recovery information only if
they have authority based on existing statute, rule or law. Audits will
be performed by the Department of Justice which will ensure this
process is not circumvented or abused, and I would expect these audits
to be available to the appropriate congressional oversight committees.
Both the Government and the private sector need to work together to
create the infrastructure and technology that will give the users total
confidence in the security of commercial transactions and personal
communications. As the largest purchaser of computer software and
hardware, the Federal Government can create important incentives to
help the market fulfill this need.
The idea here, Mr. President, is to say that the Federal law can
provide incentives for market-based solutions. It will be for the most
part the market that solves these problems and determines what kind of
technology will be used in the solution of these problems. The Secure
Public Networks Act of 1997, however, provides a framework and some
standardization to make certain that we expedite that happening.
This act also sets up a voluntary registration system for public key
certificate authorities and key recovery agents which help build
confidence in the secure public network. Since the Internet is
international and online commerce will be worldwide, the United States
alone cannot develop a secure public network on the scale necessary to
address this technology. Our legislation therefore, Mr. President,
calls on the President to continue consultations and negotiations with
foreign countries to ensure secure public networks are built on a
global scale.
The Secure Public Networks Act creates an advisory panel with
industry representatives to assist the Government in adapting policies
to meet changing technology and changing commercial situations. This
panel will also advise the Secretary of Commerce on the commercial
situation American companies face overseas and recommend changes in
U.S. policy to assist industry.
The act also calls for additional Federal research to facilitate the
creation of secure public networks and the cooperation and coordination
of departments and agencies on both Federal and State levels to ensure
the development of secure public networks.
Mr. President, I believe the Secure Public Networks Act of 1997 will
move our Nation closer to secure computer and telecommunications
networks and help resolve the debate on encryption as well. The
alternative to the rule of law in this dynamic area is chaos and
anarchy, a condition which will prevent Internet-type networks from
reaching their full potential and which will hurt the interests of
industry, the interests of the public, and the interests of law
enforcement and national security. Congress' duty to make laws to
strengthen these networks is clear. I suggest we set a public goal of
getting a bill to the President by October 1. I believe if we set a
goal of this kind and stick to it, we will enable not only the market
to develop, but it will enable us to provide the security needed for us
to be able to move Government operations into the new paradigm of
network activity.
______
By Mr. FRIST:
S. 910. A bill to authorize appropriations for carrying out the
Earthquake Hazard Reduction Act of 1977 for fiscal years 1998 and 1999,
and for other purposes; to the Committee on Commerce, Science, and
Transportation.
[[Page S5701]]
the 1998-99 reauthorization of the earthquake hazard reduction act of
1997
Mr. FRIST. Mr. President, I rise today to offer the 1998-99
Reauthorization of the Earthquake Hazard Reduction Act of 1977. This
piece of legislation reauthorizes the agencies that are working to
reduce earthquake hazards throughout the Nation. These four agencies:
The Federal Emergency Management Agency [FEMA], which serves as the
lead agency, the U.S. Geological Survey [USGS], National Science
Foundation [NSF], and National Institute of Standards and Technology
[NIST], each play a critical role in this important mission.
This bill continues the funding for agency activities including
research, hazard assessment, and public education, and moves these
activities forward. It also builds upon the national seismic network,
improving its capability, and forming the basis for a real-time seismic
hazard warning system. A real-time warning system has the potential for
saving lives by alerting people outside the immediate area of an
impending seismic shock. Advance warning can be critical in preventing
injury in many sectors of modern life, such as high-speed trail
transportation.
This reauthorization has an important provision which underscores our
commitment to education. This bill would let NSF create and disseminate
Earth science educational materials in a way that permits easy access
by educators and the general public. Acknowledging that FEMA and NSF
have both done an outstanding job in creating educational material, we
are looking for continued cooperation of all the agencies, one of the
hallmarks of the National Earthquake Hazard Reduction Program [NEHRP].
Mr. President, I believe that the passage of this legislation will
continue of the good work that these four agencies have been
undertaking--work that saves property, but most importantly, saves
American lives.
I ask unanimous consent that the full text of this legislation be
printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 910
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. AUTHORIZATION OF APPROPRIATIONS.
Section 12 of the Earthquake Hazards Reduction Act of 1977
(42 U.S.C. 7706) is amended--
(1) in subsection (a)(7)--
(A) by striking ``and'' after ``1995,''; and
(B) by inserting before the period at the end the
following: ``, $19,228,000 for the fiscal year ending
September 30, 1998, and $19,804,000 for the fiscal year
ending September 30, 1999'';
(2) in subsection (b)--
(A) by striking ``and'' after ``September 30, 1995;''; and
(B) by inserting before the period at the end the
following: ``; $51,142,000 for the fiscal year ending
September 30, 1998; and $52,676,000 for the fiscal year
ending September 30, 1999'';
(3) in subsection (c)--
(A) by striking ``and'' at the end of paragraph (1); and
(B) by inserting before the period at the end the
following: ``, (3) $18,450,000 for engineering research and
$11,920,000 for geosciences research for the fiscal year
ending September 30, 1998, and (4) $19,000,000 for
engineering research and $12,280,000 for geosciences research
for the fiscal year ending September 30, 1999''; and
(4) in the last sentence of subsection (d)--
(A) by striking ``and'' after ``September 30, 1995,''; and
(B) by inserting before the period at the end the
following: ``, $2,000,000 for the fiscal year ending
September 30, 1998, and $2,060,000 for the fiscal year ending
September 30, 1999''.
SEC. 2. REAL-TIME SEISMIC HAZARD WARNING SYSTEM DEVELOPMENT
AND PHASED DEPLOYMENT.
(a) Automatic Seismic Warning System Development and Phased
Deployment.--
(1) Definitions.--In this section:
(A) Director.--The term ``Director'' means the Director of
the United States Geological Survey.
(B) High-risk activity.--The term ``high-risk activity''
means an activity that may be adversely affected by a
moderate to severe seismic event (as determined by the
Director). The term includes high-speed rail transportation.
(C) Real-time seismic warning system.--The term ``real-time
seismic warning system'' means a system that issues warnings
in real-time from a network of seismic sensors to a set of
analysis processors, directly to receivers related to high-
risk activities.
(2) In general.--The Director shall conduct a program to
develop and deploy a real-time seismic warning system. The
Director may use funds made available to the Director
pursuant to this section to provide for a joint program with
an entity that the Director determines to be appropriate to
develop and deploy a real-time seismic warning system. The
Director may enter into such agreements or contracts as may
be necessary to carry out the program.
(3) Upgrade of seismic sensors.--In carrying out a program
under paragraph (2), in order to increase the accuracy and
speed of seismic event analysis to provide for timely warning
signals, the Director shall provide for the upgrading of the
network of seismic sensors in existence at the time of the
establishment of the program to increase the capability of
the sensors--
(A) to measure accurately large magnitude seismic events
(as determined by the Director); and
(B) to acquire additional parametric data.
(4) Development of communications and computation
infrastructure.--In carrying out a program under paragraph
(2), the Director shall develop a communications and
computation infrastructure that is necessary--
(A) to process the data obtained from the upgraded seismic
sensor network referred to in paragraph (3); and
(B) to provide for, and carry out, such communications
engineering and development as is necessary to facilitate--
(i) the timely flow of data within a real-time seismic
hazard warning system; and
(ii) the issuance of warnings to receivers related to high-
risk activities.
(5) Procurement of computer hardware and computer
software.--In carrying out a program under paragraph (2), the
Director shall procure such computer hardware and computer
software as may be necessary to carry out the program.
(6) Reports on progress.--
(A) In general.--Not later than 120 days after the date of
enactment of this Act, the Director shall prepare and submit
to Congress a report that contains a plan for implementing a
real-time seismic hazard warning system.
(B) Additional reports.--Not later than 1 year after the
date on which the Director submits the report under
subparagraph (A), and annually thereafter, the Director shall
prepare and submit to Congress a report that summarizes the
progress of the Director in implementing the plan referred to
in subparagraph (A).
(7) Authorization of appropriations.--In addition to the
amounts made available to the Director under section 12(b) of
the Earthquake Hazards Reduction Act of 1977 (42 U.S.C.
7706(b)), there are authorized to be appropriated to the
Department of the Interior, to be used by the Director to
carry out this section, $10,000,000 for each of fiscal years
1998 and 1999.
(b) Earth Science Teaching Materials.--
(1) Definitions.--In this subsection:
(A) Local educational agency.--The term ``local educational
agency'' has the meaning given that term in section 14101 of
the Elementary and Secondary Education Act of 1965 (20 U.S.C.
8801).
(B) School.--The term ``school'' means a nonprofit
institutional day or residential school that provides
education for any of the grades kindergarten through grade
12.
(2) Teaching materials.--In a manner consistent with the
requirement under section 5(b)(4)(B) of the Earthquake
Hazards Reduction Act of 1977 (42 U.S.C. 7704(b)(4)(B)) and
subject to a merit based competitive process, the Director of
the National Science Foundation may use funds made available
to the Director under section 12(c) of such Act (42 U.S.C.
7706(c)) to develop, and make available to schools and local
educational agencies for use by schools, at a minimal cost,
earth science teaching materials that are designed to meet
the needs of elementary and secondary school teachers and
students.
(c) Improved Seismic Hazard Assessment.--
(1) In general.--As soon as practicable after the date of
enactment of this Act, the Director shall conduct a project
to improve the seismic hazard assessment of the seismic zone
in East Tennessee that is described in paragraph (2).
(2) East tennessee seismic zone.--The seismic zone
described in this paragraph is the seismic zone located in
East Tennessee, that underlies the Oak Ridge National
Laboratory in Oak Ridge, Tennessee and the Watts Bar nuclear
plant that is operated by the Tennessee Valley Authority.
(3) Reports.--
(A) In general.--Not later than 1 year after the date of
enactment of this Act, and annually during the period of the
assessment, the Director shall prepare, and submit to
Congress a report on the findings of the assessment.
(B) Final report.--Not later than 60 days after the date of
termination of the assessment conducted under this
subsection, the Director shall prepare and submit to Congress
a report concerning the findings of the assessment.
(4) Authorization of appropriations.--In addition to the
amounts made available to the Director under section 12(b) of
the Earthquake Hazards Reduction Act of 1977 (42 U.S.C.
7706(b)), there are authorized to be appropriated to the
Department of the Interior, to be used by the Director to
carry out this section--
(A) $700,000 for fiscal year 1998; and
(B) $1,000,000 for fiscal year 1999.
[[Page S5702]]
______
By Mr. TORRICELLI:
S. 911. A bill to amend the Internal Revenue Code of 1986 to allow a
credit against income tax to individuals who are active participants in
neighborhood crime watch organizations which actively involve the
community in the reduction of local crime; to the Committee on Finance.
taking back our neighborhoods crime fighting act
Mr. TORRICELLI. Mr. President, I rise today to introduce the Taking
Back Our Neighborhoods Crime Fighting Act. This bill has already been
introduced in the House by Representative Bob Filner, and I thank him
for his efforts in crafting this innovative and exciting approach to
neighborhood crime fighting.
Mr. President, this is a very simple bill. Our legislation would
provide a $50 tax credit to any American who actively participates in a
Neighborhood Watch or other local crime fighting program. These local,
citizen-run initiatives have proven extremely effective in reducing
crime and restoring confidence in the safety of our local communities.
Neighborhood Watch programs empower residents and bring neighbors
together, creating a renewed sense of community, and common purpose.
Working hand in hand with law enforcement, these groups are a vital
part of the community policing which has been so successful in
dramatically reducing crime over the last few years. It is no wonder
that this tax credit proposal has received support from hundreds of
public officials, including dozens of big city mayors, local sheriffs,
police chiefs, and district attorneys.
Mr. President, by providing this tax credit, we focus attention on
the benefits of these local programs, and we reward those who already
participate with a small token of appreciation. But more importantly,
we also provide one more incentive to those who may have been reluctant
to join a local group, or perhaps just didn't take the time to look
into it. We hope that this additional incentive will create the final
push needed to encourage everyone in our communities to join in the
effort to stop crime and take back our streets.
Even if people intend to go just a couple of times in order to
qualify for the tax credit, I am certain that many of them will become
active and lifelong participants once they are exposed to what
Neighborhood Watch is all about.
Mr. President, just a few months ago I traveled to a Newark townhouse
and paid a visit to a courageous woman named Donna Cherry. Tired of the
violence and the gunshots plaguing her neighborhood, Donna Cherry took
matters into her own hands and formed a neighborhood watch organization
to protect her community. Starting within her own townhouse complex,
she and the group soon set their sights on surrounding areas. Members
of the group patrol the streets, log and report suspicious activity,
and plan youth conferences to educate local children about cooperation
and making the right choices. By their actions--indeed simply by their
visible presence on the streets of their community--these people
undoubtedly deter crime.
When I visited that neighborhood in March, I assured the group that
the Federal Government would always stand behind efforts within
communities to cooperate in the fight against crime--valiant efforts to
save communities should not fail for lack of resources. We already
provide indirect Federal funding for many of these groups, but funding
is useless without the people to use it efficiently. Our bill will
provide one more tool for community leaders like Donna Cherry to
recruit new members and clean up our communities.
Mr. President, I urge my colleagues to join me in supporting this
economical and exciting bill to encourage local crime fighting. Every
step we take towards encouraging citizen action is a step toward the
reduction of crime in our communities. 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. 911
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 ``Taking Back Our
Neighborhoods Crime Fighting Act''.
SEC. 2. CREDIT FOR INDIVIDUALS WHO ARE ACTIVE PARTICIPANTS IN
NEIGHBORHOOD CRIME WATCH ORGANIZATIONS WHICH
ACTIVELY INVOLVE THE COMMUNITY IN THE REDUCTION
OF LOCAL CRIME.
(a) In General.--Subpart A of part IV of subchapter A of
chapter 1 of the Internal Revenue Code of 1986 (relating to
nonrefundable personal credits) is amended by inserting after
section 23 the following new section:
``SEC. 24. ACTIVE PARTICIPANTS IN NEIGHBORHOOD CRIME WATCH
ORGANIZATIONS WHICH ACTIVELY INVOLVE THE
COMMUNITY IN THE REDUCTION OF LOCAL CRIME.
``(a) General Rule.--In the case of an individual who is an
active participant during the taxable year in a neighborhood
crime watch organization which actively involves the
community in the reduction of local crime, there shall be
allowed as a credit against the tax imposed by this chapter
for such taxable year the amount of $50.
``(b) Active Participant.--For purposes of subsection (a),
the term `active participant' means any individual who
attends during the taxable year at least 2 meetings of an
organization referred to in subsection (a) at which
instruction is given by a local law enforcement officer on
how individuals may best and lawfully--
``(1) protect themselves and their community against crime,
and
``(2) assist local law enforcement officials in preventing
crime.''
(b) Clerical Amendment.--The table of sections for such
subpart A is amended by inserting after the item relating to
section 23 the following new item:
``Sec. 24 Active participants in neighborhood crime watch organizations
which actively involve the community in the reduction of
local crime.''
(c) Effective Date.--The amendments made by this section shall apply
to taxable years beginning after the date of the enactment of this Act.
______
By Mr. BOND:
S. 912. A bill to provide for certain military retirees and
dependents a special medicare part B enrollment period during which the
late enrollment penalty is waived and a special medigap open period
during which no underwriting is permitted; to the Committee on Finance.
medicare part b legislation
Mr. BOND. Mr. President, I rise today to introduce a measure that
would provide for certain military retirees a special Medicare part B
enrollment period during which the late enrollment penalty is waived.
Major changes in the Department of Defense's [DOD] health care
delivery system, including the introduction of a managed care program
called TRICARE and the closing or downsizing of many military medical
facilities, have hindered access to health care services for older
military retirees, or those aged 65 and over. It is important to note
that the TRICARE Program was designed for active duty and CHAMPUS
eligible beneficiaries and the overall intent is for those aged 65 and
older to receive their health care through the Medicare Program.
Many of our country's military retirees moved close to bases in order
to receive care from these facilities. Due to the fact that they had
medical services available on base, before the implementation of
TRICARE and base closures, many of these retirees did not sign up for
medicare part B. Once their access was restricted, many elected to
choose part B after the enrollment period expired and were therefore
slapped with a penalty for signing up late. Others chose not to sign up
at all because they were unable to afford the late enrollment penalty.
Thus, waiving the part B penalty for those retirees who dedicated
their lives to serving our country is a matter of justice. There was no
way that military retirees could have anticipated the changes that have
occurred within the DOD's health care delivery system.
Further, these changes were completely out of their control.
Mr. President, the Senate must act now. This measure rectifies the
unfairness inherent in the Medicare part B penalty on certain military
retirees and honors our Nation's commitment to those individuals who
selflessly served our country through many years of military service. I
look forward to the Senate's consideration of this proposal.
____________________