[Congressional Record Volume 146, Number 81 (Friday, June 23, 2000)]
[Senate]
[Pages S5735-S5737]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. LEAHY (for himself, Mr. Bennett, and Mr. Lieberman):
  S. 2781. A bill to amend the Internal Revenue Code of 1986 to provide 
that a deduction equal to fair market values shall be allowed for 
charitable contributions of literary, musical, artistic, or scholarly 
compositions created by the donor; to the Committee on Finance.


                     artist-museum partnership act

  Mr. LEAHY. Mr. President, I rise today to introduce legislation, the 
``Artist-Museum Partnership Act,'' which would encourage the donation 
of original works by artists, writers and composers to museums and 
other public institutions, thus ensuring the preservation of these 
works for future generations. This bill would achieve this by restoring 
tax equity for artists. Artists who donate their self-created works, 
like art collectors who donate identical pieces, would be allowed to 
take a tax deduction equal to the fair market value of the work.
  Under current law, art collectors who donate works to qualified 
charitable institutions may take a tax deduction equal to the fair 
market value of the work. This serves as a powerful and effective 
incentive for collectors to donate works to public museums, galleries, 
libraries, colleges and other institutions rather than keep them hidden 
from the public eye. Unfortunately, artists who create those same works 
may not take such a deduction. Instead, artists may only deduct the 
material cost of the work which is, in most cases, a nominal amount. 
This is simply unfair to artists in Vermont, and artists across the 
nation, who want to donate their works for posterity.
  Prior to 1969, artists and collectors alike were able to take a 
deduction equivalent to the fair market value of a work, but Congress 
changed the law with respect to artists in the Tax Reform Act of 1969. 
Since then, fewer and fewer artists have donated their works to museums 
and cultural institutions. The sharp decline in donations to the 
Library of Congress clearly illustrates this point. Until 1969, the 
Library of Congress received 15 to 20 large gifts of manuscripts from 
authors each year. In the four years following the elimination of the 
deduction, the library received only one gift. Instead, many of these 
works have been sold to private collectors, and are no longer available 
to the general public.
  For example, prior to the enactment of the 1969 law, Igor Stravinsky 
planned to donate his papers to the Music Division of the Library of 
Congress. But after the law passed, his papers were sold instead to a 
private foundation in Switzerland. We can no longer afford this massive 
loss to our cultural heritage. This loss was an unintended consequence 
of the tax bill that should now be corrected.
  Over thirty years ago, Congress changed the law for artists in 
response to the perception that some taxpayers were taking advantage of 
the law by inflating the market value of self-created works. Since that 
time, however, the government has cut down significantly on the abuse 
of fair market value determinations. Under this legislation, artists 
who donate their own paintings, manuscripts, compositions, or scholarly 
compositions, would be subject to the same new rules that all taxpayer/
collectors who donate such works must now follow. This includes 
providing relevant information as to the value of the gift, providing 
appraisals by qualified appraisers, and, in some cases, subjecting them 
to review by the Internal Revenue Service's Art Advisory Panel.
  In addition, donated works must be accepted by museums and libraries, 
which often have strict criteria in place for works they intend to 
display. The institution must also certify that it intends to put the 
work to a use that is related to the institution's tax exempt status. 
For example, a painting contributed to an educational institution must 
be used by that organization for educational purposes. It could not be 
sold by the institution for profit. Similarly, a work could not be 
donated to a hospital or other charitable institution, that did not 
intend to use the work in a manner related to the function constituting 
the donee's exemption under section 501 of the tax code. Finally, the 
fair market value of the work could only be deducted from the portion 
of the artist's income that has come from the sale of similar works, or 
related activities.
  In addition to restoring tax equity for artists and collectors, this 
bill would also correct another disparity in the tax treatment of self-
created works--the difference between how the same work is treated 
before and after

[[Page S5736]]

an artist's death. While artists may only deduct the material costs of 
donations made during their lifetime, donations of those same works 
after death are deductible from estate taxes at the fair market value 
of the work. In addition, when an artist dies, works that are part of 
his or her estate are taxed on the fair market value.
  The time has come for us to correct an unintended consequence of the 
1969 bill and encourage rather than discourage the donations of art 
works by their creators. The public benefit to the nation, when artists 
are encouraged to contribute their works during their lifetimes, cannot 
be overemphasized. It allows historians, scholars, and the public to 
learn directly from the artist about his or her work. From artists 
themselves, we can learn how a work was intended to be displayed or 
interpreted and what influences affected the artist.
  In Vermont, we were lucky enough to have Sabra Field, a well known 
artist who has been creating wood block prints for the past 40 years, 
donate over 500 of her own original prints to Middlebury College, at 
their behest. With those prints, Middlebury will establish the Sabra 
Field Collection so that students of the college as well as Vermonters 
and visitors to our state will be able to view her original works on 
display. We Vermonters owe her our thanks for her incredible 
generosity. Under current law, Ms. Field, whose prints have sold for up 
to $4,000 on the market, was unable to deduct the fair market value of 
the donated works from her taxes, as a collector of those same works 
would have been able to. In that instance, the public's gain was Ms. 
Field's loss. This legislation would create a win-win situation for 
all.
  The Senate recently recognized the importance of the arts in our 
children's education when it passed a resolution designating March 2000 
as ``Arts Education Month.'' The Artist-Museum Partnership Act could 
make a critical difference in an artist's decision to donate his or her 
work, rather than sell it to a private party, where it may become lost 
to the public forever. I cannot think of a better way to enhance arts 
education than to encourage the donation of art works by living 
artists, a few of whom we are lucky enough to have in Vermont, to 
public institutions across the nation.
  I want to thank my colleagues Mr. Bennett and Mr. Lieberman for 
cosponsoring this bipartisan legislation. Mr. President, I would also 
like to submit to the record a letter from the Association of Art 
Museum Directors, in support of this bill.
  There being no objection, the letter was ordered to be printed in the 
Record, as follows:
                                                Association of Art


                                             Museum Directors,

                                     Washington, DC, May 25, 2000.
     Hon. Patrick Leahy,
     U.S. Senate, Washington, DC.
     Hon. Robert Bennett,
     U.S. Senate, Washington, DC.
       Dear Senators Leahy and Bennett. On behalf of the 
     Association of Art Museum Directors (AAMD), I thank you for 
     introducing legislation that would allow artists, composers 
     and writers to take a deduction of the fair-market value of a 
     contribution of their own work to a charitable institution.
       As a result of changes to the tax code in 1969, visual 
     artists, writers and composers can no longer take a deduction 
     based on the fair-market value of a contribution of their own 
     work to a charitable organization. The artists' deduction is 
     limited to the cost of materials in preparing a work--in the 
     case of a visual artist, canvas and paint. However, a 
     collector, making an identical donation, may take the fair 
     market value of the work. Also, once the artist dies, his or 
     her spouse may contribute the work and use the fair-market 
     value as the basis of the donation.
       As a result, contributions to museums and libraries by 
     living artists and writers have all but disappeared in the 
     last 30 years, depriving the public of access to its cultural 
     heritage, since many of the pieces are sold abroad or into 
     private collections and never seen again. If instead the 
     works were contributed to a charitable institution, the 
     artists could, while still alive, provide interpretations and 
     insights that would be of enormous benefit to the public in 
     understanding 20th century art.
       Artists like Chuck Close and Sam Gilliam who have achieved 
     a considerable degree of success, would be more willing to 
     share their work with the public through donations to major 
     institutions. However, the benefits of the proposed 
     legislation would not be limited to major artists and 
     institutions.
       Many smaller museums would benefit from contributions by 
     local artists in the community who could be important in 
     documenting geographic, ethnic, religious or regional 
     examples of art.
       The AAMD, which was founded in 1916 and represents 170 art 
     museums nationwide, fully supports the enactment of this 
     legislation.
           Sincerely,
                                          Millicent Hall Gaudieri,
                                               Executive Director.
                                 ______
                                 
      By Mr. WARNER (for himself and Mr. Byrd):
  S. 2782. A bill to establish a commission to examine the efficacy of 
the organization of the National Nuclear Security Administration and 
the appropriate organization to manage the nuclear weapons programs of 
the United States; to the Committee on Armed Services.


                national commission on nuclear security

  Mr. WARNER. Mr. President, this legislation on behalf of myself and 
Senator Byrd, believe would establish a commission to examine the 
Department of Energy; National Security programs, which I believe will 
help restore the trust of the American people in the nuclear weapons 
programs of the United States.
  Mr. President, 2 weeks ago, the Nation learned that two identical 
computer hard drives, containing highly classified nuclear weapons 
information, were missing at the Los Alamos National Laboratory. These 
computer discs are used by the Department of Energy's Nuclear Emergency 
Search Team (known as NEST) to respond to incidents of nuclear 
terrorism or other nuclear incidents.
  The Committee on Armed Services held a hearing, in both open and 
closed session, earlier this week to hear from the Secretary of Energy 
on this matter. I must tell my colleagues that I was not satisfied with 
all the answers provided by the Secretary during that hearing.
  Sadly, this most recent incident is just one more potentially 
catastrophic security failure in a series of security failures at our 
important nuclear weapons labs. I need not remind my colleagues that it 
was just one year ago this week that Congress was in the midst of an 
intensive investigation into allegations of Chinese espionage at these 
very same Department of Energy labs.
  Under the Rules of the Senate, the Committee on Armed Services is 
responsible for ``the national security aspects of nuclear energy,'' 
which includes the DOE nuclear weapons labs. We take this 
responsibility very seriously.
  That is why, today, I and Senator Byrd are sending to the desk a bill 
to establish a congressional commission--with commissioners to be 
appointed solely by the leadership of the Congress--to examine the 
efficacy of the current structure of DOE and to make recommendations to 
the Congress on whether the Department of Energy's national security 
programs--particularly nuclear weapons programs--should remain as a 
semiautonomous agency within the Department of Energy, or be moved to 
the Department of Defense, or possibly be established as an independent 
agency, as was the case with the Atomic Energy Commission.
  Let me be clear, this commission will not re-examine or make 
recommendations regarding the internal structure of the NNSA, which was 
thoroughly reviewed and debated during the National Defense 
Authorization Conference last year. Nor will it hinder the new NNSA 
Administrator's efforts to fully establish his new agency. I am 
confident that, under General John Gordon's leadership, the internal 
structure of the NNSA will be sound. To the contrary, the existence of 
the commission will act as a safeguard against those who would seek to 
impede General Gordon in carrying out his statutory missions.
  There is no higher calling--of any Member of this body or any 
President--than to protect this great Nation from the threats from 
nuclear weapons.
  It is my intent to require this commission to report back to Congress 
in May of next year, to capture both the current and the forthcoming 
Administrations' views on where these programs should reside.
  Mr. President, I ask unanimous consent that the bill be printed in 
the Record.

[[Page S5737]]

  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 2782

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

     SECTION 1. NATIONAL COMMISSION ON NUCLEAR SECURITY.

       (a) Establishment.--There is hereby established a 
     commission to be known as the ``National Commission on 
     Nuclear Security'' (in this section referred to as the 
     ``Commission'').
       (b) Organizational Matters.--(1)(A) Subject to subparagraph 
     (B), the Commission shall be composed of 14 members appointed 
     from among individuals in the public and private sectors who 
     have recognized experience in matters related to nuclear 
     weapons and materials, safeguards and security, 
     counterintelligence, and organizational management, as 
     follows:
       (i) Three shall be appointed by the Majority Leader of the 
     Senate.
       (ii) Two shall be appointed by the Minority Leader of the 
     Senate.
       (iii) Three shall be appointed by the Speaker of the House 
     of Representatives.
       (iv) Two shall be appointed by the Minority Leader of the 
     House of Representatives.
       (v) One shall be appointed by the Chairman of the Committee 
     on Armed Services of the Senate.
       (vi) One shall be appointed by the ranking member of the 
     Committee on Armed Services of the Senate.
       (vii) One shall be appointed by the Chairman of the 
     Committee on Armed Services of the House of Representatives.
       (viii) One shall be appointed by the ranking member of the 
     Committee on Armed Services of the House of Representatives.
       (B) The members of the Commission may not include a sitting 
     Member of Congress or any officer of the United States who 
     serves at the discretion of the President.
       (C) Members of the Commission shall be appointed not later 
     than 60 days after the date of the enactment of this Act.
       (2) Any vacancies in the Commission shall be filled in the 
     same manner as the original appointment, and shall not affect 
     the powers of the Commission.
       (3)(A) Subject to subparagraph (B), the chairman of the 
     Commission shall be designated by the Majority Leader of the 
     Senate, in consultation with the Speaker of the House of 
     Representatives, from among the members of the Commission 
     appointed under paragraph (1)(A).
       (B) The chairman of the Commission may not be designated 
     under subparagraph (A) until seven members of the Commission 
     have been appointed under paragraph (1).
       (4) The Commission may commence its activities under this 
     section upon the designation of the chairman of the 
     Commission under paragraph (3).
       (5) The members of the Commission shall establish 
     procedures for the activities of the Commission, including 
     procedures for calling meetings, requirements for quorums, 
     and the manner of taking votes.
       (c) Duties.--The Commission shall review the efficacy of 
     the organization of the National Nuclear Security 
     Administration, and the appropriate organization and 
     management of the nuclear weapons programs of the United 
     States, under the current Presidential Administration and 
     under the Presidential Administration commencing in 2001, 
     including--
       (1) whether the requirements and objectives of the National 
     Nuclear Security Administration Act are being fully 
     implemented by the Secretary of Energy and Administrator of 
     the National Nuclear Security Administration;
       (2) the feasibility and advisability of various means of 
     improving the security and counterintelligence posture of the 
     programs of the National Nuclear Security Administration;
       (3) the feasibility and advisability of various 
     modifications of existing management and operating contracts 
     for the laboratories under the jurisdiction of the National 
     Nuclear Security Administration; and
       (4) whether the national security functions of the 
     Department of Energy, including the National Nuclear Security 
     Administration, should--
       (A) be transferred to the Department of Defense;
       (B) be established as a semiautonomous agency within the 
     Department of Defense;
       (C) be established as an independent agency; or
       (D) remain as a semiautonomous agency within the Department 
     of Energy (as provided for under the provisions of the 
     National Nuclear Security Administration Act (title XXXII of 
     Public Law 106-65)).
       (d) Report.--(1) Not later than May 1, 2001, the Commission 
     shall submit to Congress and to the Secretary of Defense and 
     the Secretary of Energy a report containing the findings and 
     recommendations of the Commission as a result of the review 
     under subsection (c).
       (2) The report shall include any comments pertinent to the 
     review by an individual serving as the Secretary of Defense, 
     and an individual serving as the Secretary of Energy, during 
     the duration of the review that any such individual considers 
     appropriate for the report.
       (3) The report may include recommendations for legislation 
     and administrative action.
       (e) Personnel Matters.--(1)(A) Each member of the 
     Commission who is not an officer or employee of the Federal 
     Government shall be compensated at a rate equal to the daily 
     equivalent of the annual rate of basic pay prescribed for 
     level IV of the Executive Schedule under section 5316 of 
     title 5, United States Code, for each day (including 
     traveltime) during which such member is engaged in the 
     performance of the duties of the Commission.
       (B) All members of the Commission who are officers or 
     employees of the United States shall serve without 
     compensation in addition to that received for their services 
     as officers or employees of the United States.
       (2) The members of the Commission shall be allowed travel 
     expenses, including per diem in lieu of subsistence, at rates 
     authorized for employees of agencies under subchapter I of 
     chapter 57 of title 5, United States Code, while away from 
     their homes or regular places of business in the performance 
     of services for the Commission.
       (3) Any officer or employee of the United States may be 
     detailed to the Commission without reimbursement, and such 
     detail shall be without interruption or loss of civil service 
     status or privilege.
       (f) Inapplicability of FACA.--The provisions of the Federal 
     Advisory Committee Act (5 U.S.C. App.) shall not apply to the 
     activities of the Commission.
       (g) Termination.--The Commission shall terminate not later 
     than 90 days after the date on which the Commission submits 
     its report under subsection (d).
       (h) Funding.--Of the amounts authorized to be appropriated 
     by sections 3101 and 3103, not more than $975,000 shall be 
     available for the activities of the Commission under this 
     section. Amounts available to the Commission under this 
     section shall remain available until expended.

                          ____________________