[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.
____________________