[Congressional Record Volume 147, Number 10 (Thursday, January 25, 2001)]
[Senate]
[Pages S568-S587]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. WELLSTONE (for himself, Mr. Harkin, Mr. Feingold, Mr. 
        Conrad, and Mr. Dorgan):
  S. 178. A bill to permanently reenact chapter 12 of title 11, United 
States Code, relating to family farmers; to the Committee on the 
Judiciary.
  Mr. WELLSTONE. Mr. President, I rise today along with Senators 
Harkin, Feingold, Conrad, and Dorgan to introduce legislation that 
would make permanent Chapter 12 of the U.S. Bankruptcy Code.
  Chapter 12, the Chapter of the Bankruptcy Code designated for 
farmers, provides critical protection for family farmers who find 
themselves in desperate economic circumstances. Ideally, the goal of 
federal farm policy should be to sustain the ability of family farmers 
to produce and sell a competitive product, to preserve healthy and 
viable rural communities and to keep family farmers out of bankruptcy. 
However, when farmers are forced to seek bankruptcy protection, Chapter 
12, because it is tailored specifically to farmers, often allows the 
farmer to keep his or her farm while reorganizing debt and making 
payments to creditors.
  Extension of Chapter 12 is made all the more urgent by the current 
state of the farm economy. Prices are now so low that many family 
farmers are lucky to stay in business as market prices are lower than 
their cost of production. The value of field crops is expected to have 
been more than 24 percent lower in 2000 than it was in 1996--42 percent 
lower for wheat, 39 percent lower for corn, and 26 percent lower for 
soybeans. But farmers' expenses are not falling by the same amount. In 
fact, they are not falling at all. Farmers cannot maintain cash flow if 
their selling prices are falling through the floor while their buying 
prices are shooting through the roof.
  Chapter 12 expired on June 30th of last year. Efforts last year to 
extend it or to make it permanent were held hostage to controversial 
bankruptcy ``reform'' legislation and, as a result, Congress adjourned 
in December without taking any action to reinstate this critical safety 
net. This legislation would make Chapter 12 a permanent part of the 
code, eliminating the need for future extensions. It is also 
retroactive to July 1, 2000.
  I hope that in the 107th Congress we can stop using farmers as pawns 
in the debate over bankruptcy reform. Permanent Chapter 12 is 
completely noncontroversial. We could pass this bill by unanimous 
consent tomorrow, and we should. I note that a nearly identical measure 
has been introduced in the House by Congressman Nick Smith. Given that 
the House last year passed two chapter 12 extensions which the Senate 
declined to act on, if the Senate this year took leadership on this 
issue and passed this bill, the House would swiftly follow. Farmers 
have been

[[Page S569]]

without this safety net long enough, and I urge my colleagues to take 
action by passing this measure.
                                 ______
                                 
      Mr. DORGAN:
  S. 179. A bill to amend the Internal Revenue Code of 1986 to phase in 
a full estate tax deduction for family-owned business interests and to 
increase the unified credit exemption; to the Committee on Finance.
  Mr. DORGAN. Mr. President, today I rise to introduce legislation to 
address an estate tax problem that many Americans want fixed without 
delay.
  Over the years, I have heard from farmers, bankers and other business 
people in North Dakota and elsewhere who say it is nearly impossible 
for them to pass along the family business to their children to operate 
because of the estate taxes they would pay. They say emphatically that 
a family should never be forced to sell off any portion of their 
business just to pay the estate tax. I think they're absolutely right!
  I believe that families who want to pass their business to other 
family members to own and operate should never have to worry about 
losing that business or farm to taxes. The sale of a portion of a 
family business to pay estate taxes does not happen very often, but it 
shouldn't happen at all. In fact, families ought to know that our 
federal tax laws will be supportive of their enterprises because of the 
importance of such businesses to this nation's economic well-being. And 
that's exactly what the bill I'm introducing would do.
  This legislation is nearly identical to a bill I authored in the last 
Congress. It increases the current estate tax exemption for family 
business assets to $10 million over the next five years, and then 
totally eliminates the tax for them starting in the year 2006. At that 
time, family-owned and operated businesses will be completely exempt 
from the tax.
  I have spoken often on the Senate floor about the importance of the 
family as an economic unit as well as a social unit. This nation was 
built upon an economy of family-based farms and businesses, and it is 
crucial that we strive to keep the family farms and businesses that we 
have, and to encourage new ones. I think that is why there's already 
wide agreement in the Senate that we should act to reform the estate 
tax to help ensure the continuity of family businesses.
  We ought to address this critical family business estate tax issue 
early in this Congress and save for later, if necessary, those other 
parts of the estate tax on which there is still significant 
disagreement. My bill offers a common sense approach for changing the 
estate tax to help family enterprises survive to the next generation.
  The legislation that I'm introducing today differs in two important 
ways from the bill, S. 3098, that I authored last year. First, I have 
added a provision to increase the general unified estate tax credit 
that is available to everyone from $675,000 to $4 million per couple by 
the year 2006. This will help families wishing to pass along to the 
children or grandchildren significant stock, proceeds from a life 
insurance policy or other assets they may have acquired over the years. 
Second, my bill makes the general credit and family-owned business 
exemption fully portable. This would help ensure that a surviving 
spouse will get the full benefit of any unused general credit or 
family-owned business exemption without having to have hired a 
sophisticated and costly tax advisor.
  Let me briefly clarify one point. Together, the provisions of my 
legislation would effectively abolish the estate tax for over 99 
percent of all taxpayers. But it does not exempt from estate taxes 
entirely the heirs of multi-billion dollar investment fortunes and the 
like, as the tax bill passed by the majority party last summer would 
have done.
  Many of us voted against that bill because we believed that complete 
estate tax repeal along with the other sizable tax cuts proposed at 
that time threatened to put us right back into federal budget deficits 
once again. That is certainly something I can not support.
  We also were concerned that repealing the estate tax completely would 
shift the burden of paying for the federal government even more onto 
the working men and women of this country. That is not fair. The gap 
between the very rich and everyone else has gotten wider in recent 
years, and repealing the estate tax in its entirety would only make it 
worse. I also think it is reasonable to ask those who have benefitted 
most from our democracy in the past to contribute to its security and 
well-being in the future.
  I know that there is disagreement on these and other points. But they 
do deserve an honest debate, and I expect that we will have such a 
debate later in this Congress. But as I have said previously, we should 
not hold family based farms and businesses hostage to that debate and 
we should move quickly on estate tax reforms where there is already 
strong bipartisan agreement.
                                 ______
                                 
      By Mr. FRIST (for himself, Mr. Feingold, Mr. Brownback, Mr. 
        Lieberman, Mr. DeWine, Mr. Santorum, Mr. Cleland, and Mr. 
        Sessions):
  S. 180. A bill to facilitate famine relief efforts and a 
comprehensive solution to the war in Sudan; to the Committee on Foreign 
Relations.
  Mr. FRIST. 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. 180

       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 ``Sudan Peace Act''.

     SEC. 2. FINDINGS.

       Congress makes the following findings:
       (1) The Government of Sudan has intensified its prosecution 
     of the war against areas outside of its control, which has 
     already cost more than 2,000,000 lives and has displaced more 
     than 4,000,000.
       (2) A viable, comprehensive, and internationally sponsored 
     peace process, protected from manipulation, presents the best 
     chance for a permanent resolution of the war, protection of 
     human rights, and a self-sustaining Sudan.
       (3) Continued strengthening and reform of humanitarian 
     relief operations in Sudan is an essential element in the 
     effort to bring an end to the war.
       (4) Continued leadership by the United States is critical.
       (5) Regardless of the future political status of the areas 
     of Sudan outside of the control of the Government of Sudan, 
     the absence of credible civil authority and institutions is a 
     major impediment to achieving self-sustenance by the Sudanese 
     people and to meaningful progress toward a viable peace 
     process.
       (6) Through manipulation of traditional rivalries among 
     peoples in areas outside their full control, the Government 
     of Sudan has effectively used divide and conquer techniques 
     to subjugate their population, and internationally sponsored 
     reconciliation efforts have played a critical role in 
     reducing the tactic's effectiveness and human suffering.
       (7) The Government of Sudan is utilizing and organizing 
     militias, Popular Defense Forces, and other irregular units 
     for raiding and slaving parties in areas outside of the 
     control of the Government of Sudan in an effort to severely 
     disrupt the ability of those populations to sustain 
     themselves. The tactic is in addition to the overt use of 
     bans on air transport relief flights in prosecuting the war 
     through selective starvation and to minimize the Government 
     of Sudan's accountability internationally.
       (8) The Government of Sudan has repeatedly stated that it 
     intends to use the expected proceeds from future oil sales to 
     increase the tempo and lethality of the war against the areas 
     outside its control.
       (9) Through its power to veto plans for air transport 
     flights under the United Nations relief operation, Operation 
     Lifeline Sudan (OLS), the Government of Sudan has been able 
     to manipulate the receipt of food aid by the Sudanese people 
     from the United States and other donor countries as a 
     devastating weapon of war in the ongoing effort by the 
     Government of Sudan to subdue areas of Sudan outside of the 
     Government's control.
       (10) The efforts of the United States and other donors in 
     delivering relief and assistance through means outside OLS 
     have played a critical role in addressing the deficiencies in 
     OLS and offset the Government of Sudan's manipulation of food 
     donations to advantage in the civil war in Sudan.
       (11) While the immediate needs of selected areas in Sudan 
     facing starvation have been addressed in the near term, the 
     population in areas of Sudan outside of the control of the 
     Government of Sudan are still in danger of extreme disruption 
     of their ability to sustain themselves.
       (12) The Nuba Mountains and many areas in Bahr al Ghazal, 
     Upper Nile, and Blue Nile regions have been excluded 
     completely from relief distribution by OLS, consequently 
     placing their populations at increased risk of famine.
       (13) At a cost which has sometimes exceeded $1,000,000 per 
     day, and with a primary focus on providing only for the 
     immediate food needs of the recipients, the current

[[Page S570]]

     international relief operations are neither sustainable nor 
     desirable in the long term.
       (14) The ability of populations to defend themselves 
     against attack in areas outside the Government of Sudan's 
     control has been severely compromised by the disengagement of 
     the front-line sponsor states, fostering the belief within 
     officials of the Government of Sudan that success on the 
     battlefield can be achieved.
       (15) The United States should use all means of pressure 
     available to facilitate a comprehensive solution to the war 
     in Sudan, including--
       (A) the multilateralization of economic and diplomatic 
     tools to compel the Government of Sudan to enter into a good 
     faith peace process;
       (B) the support or creation of viable democratic civil 
     authority and institutions in areas of Sudan outside 
     government control;
       (C) continued active support of people-to-people 
     reconciliation mechanisms and efforts in areas outside of 
     government control;
       (D) the strengthening of the mechanisms to provide 
     humanitarian relief to those areas; and
       (E) cooperation among the trading partners of the United 
     States and within multilateral institutions toward those 
     ends.

     SEC. 3. DEFINITIONS.

       In this Act:
       (1) Government of sudan.--The term ``Government of Sudan'' 
     means the National Islamic Front government in Khartoum, 
     Sudan.
       (2) OLS.--The term ``OLS'' means the United Nations relief 
     operation carried out by UNICEF, the World Food Program, and 
     participating relief organizations known as ``Operation 
     Lifeline Sudan''.

     SEC. 4. CONDEMNATION OF SLAVERY, OTHER HUMAN RIGHTS ABUSES, 
                   AND TACTICS OF THE GOVERNMENT OF SUDAN.

       Congress hereby--
       (1) condemns--
       (A) violations of human rights on all sides of the conflict 
     in Sudan;
       (B) the Government of Sudan's overall human rights record, 
     with regard to both the prosecution of the war and the denial 
     of basic human and political rights to all Sudanese;
       (C) the ongoing slave trade in Sudan and the role of the 
     Government of Sudan in abetting and tolerating the practice; 
     and
       (D) the Government of Sudan's use and organization of 
     ``murahalliin'' or ``mujahadeen'', Popular Defense Forces 
     (PDF), and regular Sudanese Army units into organized and 
     coordinated raiding and slaving parties in Bahr al Ghazal, 
     the Nuba Mountains, Upper Nile, and Blue Nile regions; and
       (2) recognizes that, along with selective bans on air 
     transport relief flights by the Government of Sudan, the use 
     of raiding and slaving parties is a tool for creating food 
     shortages and is used as a systematic means to destroy the 
     societies, culture, and economies of the Dinka, Nuer, and 
     Nuba peoples in a policy of low-intensity ethnic cleansing.

     SEC. 5. SUPPORT FOR AN INTERNATIONALLY SANCTIONED PEACE 
                   PROCESS.

       (a) Findings.--Congress hereby recognizes that--
       (1) a single viable, internationally and regionally 
     sanctioned peace process holds the greatest opportunity to 
     promote a negotiated, peaceful settlement to the war in 
     Sudan; and
       (2) resolution to the conflict in Sudan is best made 
     through a peace process based on the Declaration of 
     Principles reached in Nairobi, Kenya, on July 20, 1994.
       (b) United States Diplomatic Support.--The Secretary of 
     State is authorized to utilize the personnel of the 
     Department of State for the support of--
       (1) the ongoing negotiations between the Government of 
     Sudan and opposition forces;
       (2) any necessary peace settlement planning or 
     implementation; and
       (3) other United States diplomatic efforts supporting a 
     peace process in Sudan.

     SEC. 6. MULTILATERAL PRESSURE ON COMBATANTS.

       It is the sense of Congress that--
       (1) the United Nations should be used as a tool to 
     facilitating peace and recovery in Sudan; and
       (2) the President, acting through the United States 
     Permanent Representative to the United Nations, should seek 
     to--
       (A) revise the terms of Operation Lifeline Sudan to end the 
     veto power of the Government of Sudan over the plans by 
     Operation Lifeline Sudan for air transport of relief flights 
     and, by doing so, to end the manipulation of the delivery of 
     those relief supplies to the advantage of the Government of 
     Sudan on the battlefield;
       (B) investigate the practice of slavery in Sudan and 
     provide mechanisms for its elimination; and
       (C) sponsor a condemnation of the Government of Sudan each 
     time it subjects civilians to aerial bombardment.

     SEC. 7. REPORTING REQUIREMENT.

       Section 116 of the Foreign Assistance Act of 1961 (22 
     U.S.C. 2151n) is amended by adding at the end the following:
       ``(g) In addition to the requirements of subsections (d) 
     and (f), the report required by subsection (d) shall 
     include--
       ``(1) a description of the sources and current status of 
     Sudan's financing and construction of oil exploitation 
     infrastructure and pipelines, the effects on the inhabitants 
     of the oil fields regions of such financing and construction, 
     and the Government of Sudan's ability to finance the war in 
     Sudan;
       ``(2) a description of the extent to which that financing 
     was secured in the United States or with involvement of 
     United States citizens;
       ``(3) the best estimates of the extent of aerial 
     bombardment by the Government of Sudan forces in areas 
     outside its control, including targets, frequency, and best 
     estimates of damage; and
       ``(4) a description of the extent to which humanitarian 
     relief has been obstructed or manipulated by the Government 
     of Sudan or other forces for the purposes of the war in 
     Sudan.''.

     SEC. 8. CONTINUED USE OF NON-OLS ORGANIZATIONS FOR RELIEF 
                   EFFORTS.

       (a) Sense of Congress.--It is the sense of Congress that 
     the President should continue to increase the use of non-OLS 
     agencies in the distribution of relief supplies in southern 
     Sudan.
       (b) Report.--Not later than 90 days after the date of 
     enactment of this Act, the President shall submit a detailed 
     report to Congress describing the progress made toward 
     carrying out subsection (a).

     SEC. 9. CONTINGENCY PLAN FOR ANY BAN ON AIR TRANSPORT RELIEF 
                   FLIGHTS.

       (a) Plan.--The President shall develop a contingency plan 
     to provide, outside United Nations auspices if necessary, the 
     greatest possible amount of United States Government and 
     privately donated relief to all affected areas in Sudan, 
     including the Nuba Mountains, Upper Nile, and Blue Nile, in 
     the event the Government of Sudan imposes a total, partial, 
     or incremental ban on OLS air transport relief flights.
       (b) Reprogramming Authority.--Notwithstanding any other 
     provision of law, in carrying out the plan developed under 
     subsection (a), the President may reprogram up to 100 percent 
     of the funds available for support of OLS operations (but for 
     this subsection) for the purposes of the plan.
                                 ______
                                 
      By Mr. SHELBY:
  S. 181. A bill to amend the Internal Revenue Code of 1986 to phase 
out the taxation of Social Security benefits; to the Committee on 
Finance.
  Mr. SHELBY. Mr. President, I rise today to introduce the Older 
Americans Tax Fairness Act of 2001. My bill would completely eliminate 
the unjust taxation of Social Security benefits by the end of 2005. The 
premise of my legislation is simple: Social Security benefits were 
never intended to be taxed. At its inception and continuing on for the 
next fifty years, Social Security benefits were exempt from taxation. 
Budgetary shortfalls in 1984 and 1993, however, led to the taxation of 
these benefits. The economic situation of America is now such that the 
continued taxation of Social Security benefits is wasteful and 
unnecessary.
  Under the current law, beneficiaries of Social Security are taxed on 
as much as 85 percent of their benefits. Furthermore, under the latest 
changes made by the Clinton Administration, some older Americans find 
themselves in a situation where for every dollar they earn over a 
threshold amount, $1.85 is subject to tax. In addition to being 
fundamentally and logically unfair, I believe such taxation provides 
senior citizens with a strong disincentive to work. In other words, 
taxation of benefits creates a situation where many senior citizens 
decide to not work rather than to earn additional income which may 
trigger taxation of their Social Security benefits.
  Working senior citizens add a wealth of knowledge and experience to 
the workplace. As such, we must make sure that our American workforce 
is not deprived of these valuable assets. Our laws should encourage, 
not discourage, older Americans with a desire to work to continue 
contributing to our society. Unfortunately, that is not what is 
happening today.
  Despite disincentives to work, many older Americans are forced to do 
so to be able to pay for living expenses, healthcare, prescription 
drugs and other essentials. To these people, every penny counts in 
determining whether they are able to meet these costs. However, when we 
tax Social Security benefits, we make it virtually impossible for 
millions of older Americans to make ends meet. In effect, taxation of 
Social Security benefits forces many Americans to endure stressful 
situations in what should be a special time of their lives. Clearly, we 
cannot allow such an unjust situation to continue.
  The taxation of Social Security benefits impacts a wide segment of 
society, including a large portion of the middle class. For example, a 
person with $35,000 in income and $10,000 in benefits pays almost 
$1,000 more in taxes than he or she would, had the Clinton-Gore 
increase not been enacted. By repealing the 1993 Clinton-Gore increase, 
as well

[[Page S571]]

as the 1984 tax on Social Security benefits, my bill would give 
millions of Americans the financial freedom and security they deserve.
  Mr. President, every day my office receives letters and calls from 
older Americans throughout the country voicing their opinions on the 
taxation of Social Security benefits. Their message is clear--stop the 
unfair taxation of these benefits. I ask my colleagues to listen to 
their constituents and to do the right thing by joining me in support 
of this bill.
                                 ______
                                 
      By Ms. SNOWE (for herself and Mr. Kerry):
  S. 182. A bill to amend the Small Business Act with respect to the 
microloan program; to the Committee on Small Business.
  Ms. SNOWE. Mr. President, I rise today to reintroduce legislation I 
first offered during the 106th Congress during the Senate Small 
Business Committee's consideration of legislation to reauthorize the 
Small Business Administration.
  This legislation is very simple and straight forward. It is designed 
to enhance the SBA Microloan program, which provides small, short-term 
loans for purchase of machinery and equipment, furniture and fixtures, 
inventory, supplies, and working capital for small businesses. These 
loans are made through SBA-approved nonprofit groups or intermediaries, 
which also provide counseling and educational assistance to firms or 
individuals.
  Under the Microloan program, intermediaries operate both as lenders 
and as technical asistance providers. Through technical assistance, the 
intermediaries help the borrower to develop a business plan, to secure 
financing and to learn how to operate a business. I am very proud of 
the four Microloan intermediaries in my home state of Maine: Coastal 
Enterprises, Northern Maine Development Company, Eastern Maine 
Development Company, and Community Concepts. Mr. President, these 
organizations do great work in my state, and I am pleased to have this 
opportunity to recognize them.
  I have long been a supporter of the Microloan program, and I am proud 
to sponsor this legislation today, which is designed to enhance and 
expand the program. The purpose of the legislation I am introducing 
today is to support efforts to increase the reach of and the number of 
Microlenders by authorizing peer-to-peer mentoring where experienced 
lending intermediaries can share their knowledge and experience with 
other intermediaries or organizations looking to develop a mcirolending 
program.
  Currently, there are no resources to support such activities. Under 
this legislation, industry would develop a network of intermediaries 
with training experience and develop a system to match them with 
intermediaries seeking assistance. Under my bill, the program would 
authorize $1 million annually, and the funding would come out of 
already-authorized funding for Microloan technical assistance.
  I hope this legislation will be a constructive step in the ongoing 
effort to improve the successful Microloan program, and I urge my 
colleagues to join me in supporting this effort.
                                 ______
                                 
      By Ms. SNOWE:
  S. 183. A bill to enhance Department of Education efforts to 
facilitate the involvement of small business owners in State and local 
initiatives to improve education; to the committee on Finance.
  Ms. SNOWE. Mr. President, I rise to introduce legislation, the Small 
Business Employment and Education Act of 2001, which is designed to 
enhance federal efforts to facilitate the involvement of small business 
owners and entrepreneurs in state and local initiatives to improve the 
quality of education programs for our young people.
  In 1999, the Small Business Committee, of which I am a member, held a 
hearing chaired by Senator Bond, chairman of the committee, on the 
challenges facing the small business community as a result of the 
failure of many of our educational institutions to teach students the 
basic skills that are necessary to succeed in today's work environment. 
The committee heard testimony from a number of small businesses and 
organizations about this growing problem.
  And just how big is the problem? A 1999 American Management 
Association survey on workplace testing found that approximately 36 
percent of employees tested for basic skills were found to be deficient 
in these skills, and small businesses reported deficiency rates well 
above the national average. Sixty percent of AMA-member companies 
reported that the availability of skilled manpower was scarce, and 67 
percent believe that the shortages will continue.
  A 1999 NFIB report found that 18 percent of NFIB members report that 
finding qualified labor is the single most important problem facing 
their business today.
  Likewise, a 1999 poll of U.S. Chambers of Commerce found that 83 
percent reported the ability--or lack thereof--to find qualified 
workers was among their biggest concerns, and 53 percent said education 
is the single most pressing public policy issue to them.
  This information clearly illustrates that the business community, and 
small businesses in particular, have an important stake in the 
education of our youth. One of the most fundamental needs that any 
growing business faces is the need for employees with basic skills, and 
concerns have been expressed by the small business community that many 
students are not graduating with the basic skills in reading, writing, 
mathematics, and science--skills they need to succeed in today's 
workplace or become the entrepreneurs of tomorrow.
  The fact of the matter is, Mr. President, the growth of high-skilled 
jobs is outpacing growth in all other fields. We must not allow basic 
skills to slip away if we are to remain competitive in an increasingly 
aggressive and technology-based global market.
  Small business is the driving force behind our economy, and as we 
authorize the Elementary and Secondary Education Act, we must take into 
account the needs of businesses, and small businesses in particular. To 
that end, locally-driven initiatives are crucial. In order to create 
jobs, we must encourage small business expansion and foster small 
business entrepreneurship and, and I believe that education initiatives 
are key to this.
  Under the Small Business Employment and Education Enhancement Act, 
the Department of Education would disseminate information and 
facilitate the sharing of information designed to assist small 
businesses in working with school systems in an effort to improve our 
educational institutions. For example, the agency would 
publish guidance materials, best practices, checklists and other 
materials on the World Wide Web, in Department of Education 
publications and articles, letters, links to related World Wide Web 
sites, public service announcements, and through other means at the 
Department's disposal.

  The Department of Education would establish a centralized database of 
materials and act as a clearinghouse for information on initiatives 
that have proven successful.
  The Secretary of the Department of Education would also establish an 
Office of Small Business Education to promote efforts to address the 
needs of small businesses though education programs. This division 
would work to remove any existing impediments to partnerships between 
school systems and small businesses, and propose solutions to 
education-related problems facing small businesses.
  The goal of the bill I am introducing today is to facilitate 
partnerships between communities and businesses. I believe it should be 
easy for communities that are interested in designing business/school 
partnerships to get the information they need on how to do so. With 
access to the kinds of sources envisioned in this legislation, 
communities would be able to model a program after a proven approach.
  In addition, my bill authorizes technical assistance to be 
administered by the Office of Small Business Education to be used to 
provide guidance to small businesses, small business organizations, 
school systems, and communities working cooperatively to enhance the 
teaching of basic skills.
  The bill would also establish tax credits to encourage companies to 
provide work study, internship, or fellowship opportunities for 
students and teachers.
  Finally, the bill includes a provision directing the Department of 
Education

[[Page S572]]

to conduct a study and report to Congress on the challenges facing 
small businesses in obtaining workers with adequate skills; an 
assessment of the impact on small businesses of the skills shortage; 
the costs to small businesses associated with this shortage; and the 
recommendations of the Secretary on how to address these challenges.
  Mr. President, I hope this legislation will provide a foundation for 
cooperative initiatives between small businesses and school systems, 
and I look forward to working with the Small Business Committee, the 
Senate Health, Education, Labor, and Pensions Committee and others as 
we work to reauthorize the Elementary and Secondary Education Act.
                                 ______
                                 
      By Mr. DORGAN (for himself and Mr. Craig):
  S. 184. A bill to amend title 18, United States Code, to eliminate 
good time credits for prisoners serving a sentence for a crime of 
violence, and for other purposes; to the Committee on the Judiciary.
  S. 185. A bill to provide incentives to encourage stronger truth in 
sentencing of violent offenders, and for other purposes; to the 
Committee on the Judiciary.
  Mr. DORGAN. Mr. President, I offer legislation today that would 
strengthen our Trust in Sentencing guidelines and limit the ability of 
violent criminals to be released early due to ``good time'' credits.
  Let me tell you why we need these bills. If you commit murder in this 
country, on average, you are going to be sentenced to about 21 years in 
jail but that criminal will serve, on average, only 10 years behind 
bars.
  Most people will be startled to hear that. And why is this the case? 
Because people are let out early. Murderers go to prison, and they get 
``good time,'' time off for good behavior: If you want to get out 
early, just be good in prison, and we will put you back on the streets. 
A murderer can get credit for good behavior. That sounds like an 
oxymoron to me.
  And what happens when you are put back on the streets? You read the 
stories. These people commit crimes again. They rape or they rob or 
they kill. They molest children. They repeat their crimes.
  I am introducing legislation today, along with my friend Senator 
Craig of Idaho to address this problem. The point of it is very simple. 
I believe that in the criminal justice system we ought to have 
different standards for those who commit acts of violence. Everyone in 
this country who commits acts of violence ought to understand: You go 
to prison, and your address is going to be your jail cell until the end 
of your sentence.
  I do not mind early release for nonviolent offenders. If prison 
officials want to use ``good time'' as a management tool for nonviolent 
criminals, fine. But for violent offenders, we ought to have a society 
in which everyone understands: If you commit an act of violence, the 
prison cell is your address to the end of your sentence. No good time 
off for good behavior, no getting back to the streets early. You are 
going to be in prison to serve your term. My legislation says, this is 
an important standard for state and federal prisons.
  We know the current system isn't working. Too many violent offenders 
are sent back to America's streets. There is a way to stop that. My 
legislation will do so.
                                 ______
                                 
      By Mr. JOHNSON:
  S. 186. A bill to provide access and choice for use of generic drugs 
instead of nongeneric drugs under Federal health care programs, and for 
other purposes; to the Committee on Health, Education, Labor, and 
Pensions.
  Mr. JOHNSON. Mr. President, today, I am introducing legislation as 
one more step in my fight to combat rising prescription drug prices and 
reduce the cost of medication for consumers in this country. My 
legislation, called the Generic Pharmaceutical Access and Choice For 
Consumers Act of 2001, aims to reduce the cost of prescription 
medication to American taxpayers and the U.S. government by encouraging 
the use of Food and Drug Administration (FDA) approved, therapeutically 
equivalent generic prescription drugs within the federal health care 
programs, except if the non-generic form is either ordered by the 
prescribing physician or requested by the patient.
  The Generic Pharmaceutical Access and Choice For Consumers Act of 
2001 establishes a straightforward and cost-effective means of 
increasing consumers' access and choice to safe, affordable generic 
prescription drugs under federal health care programs which could 
result in savings of millions of dollars.
  The Federal Employee Health Benefits Program (FEHBP), which spends 
approximately $18.4 billion providing health insurance coverage to its' 
estimated nine million enrollees, including employees, retirees and 
their families, spends nearly twenty percent, $3.6 billion, of their 
insurance program costs on pharmaceutical benefits alone. This year 
brought little relief when the Office of Personnel Management (OPM) 
announced that FEHBP premium increases for the year 2001 were on 
average 10.5 percent, mostly attributable to the cost increase in 
prescription drug plans to fill prescriptions with FDA approved, 
therapeutically equivalent generic prescription drugs. In fact, the 
rising cost of prescription drugs accounts for about 40 percent of the 
total rise in premiums for this year alone.
  In 1997, about one-third of all prescriptions under the FEHBP were 
for generic drugs. The Office of Personnel Management (OPM), which 
administers the FEHBP, estimated that total costs for prescription 
drugs would drop by about fifteen percent if half of all prescriptions 
were for generic drugs.
  A 1998 study conducted by the Congressional Budget Office estimates 
that generic pharmaceutical substitution saves consumers nationwide 
approximately eight to ten billion dollars a year.
  Some FEHBP plans and other federal health care programs do to some 
extent encourage the use of generic prescription drugs but the practice 
is not mandatory or universally incorporated into all programs. The 
Generic Pharmaceutical Access and Choice For Consumers Act simply 
directs all federal health care programs that provide prescription drug 
plans to fill prescriptions with FDA approved, therapeutically 
equivalent generic prescription drugs, except if the non-generic form 
is either ordered by the prescribing physician or requested by the 
patient.
  I believe we can take greater steps to increase the utilization of 
high-quality, FDA approved generic drugs, which cost between twenty-
five and sixty percent less than brand-name drugs, resulting in an 
estimated average savings of fifteen to thirty dollars on each 
prescription filled. In fact, independent studies have even estimated 
that generics provide an average savings of $45.50 for each 
prescription drug sold.
  Generic pharmaceutical drugs are widely accepted by both consumers 
and the medical profession, as the market share held by generic drugs 
compared to brand-name prescription drugs has more than doubled during 
the last decade, from approximately nineteen to forty-three percent, 
according to the Congressional Budget Office. Yet, despite accounting 
for just over forty percent of the prescriptions drugs dispensed, 
generic drugs represent only 8 percent of the total dollar volume spent 
on drugs in this country. Studies have shown that consumers can save an 
additional $1.32 billion per year for every one percent increase in the 
use of generic drugs. That is why I strongly believe that generic 
pharmaceutical utilization can help both consumers and the government 
reduce the cost of prescription drugs.
  Since there exists no current coverage for outpatient prescription 
drugs under the Medicare program, a second component of my bill 
includes a sense-of-the-Senate that, to the extent feasible, a 
preference for the safe and cost-effective use of generic drugs be 
considered in conjunction with any legislation that adds a prescription 
drug benefit to the Medicare program. I strongly believe that the 
utilization of high-quality, safe generic pharmaceutical drugs in a 
Medicare prescription drug benefit would provide a built in cost 
control mechanism that would help ensure the economic feasibility and 
sustainability of any new benefit.
  And third, the bill I am introducing today works to prevent a tactic 
used by the brand drug industry to prevent generics from reaching the 
consumer by convincing state legislatures to pass unwarranted 
restrictions to the substitution of generic versions of brand name 
drugs. The campaign that some brand name drug companies lobby in

[[Page S573]]

some states is nothing more than an attempt by the brand name companies 
to protect their market share. The Generic Pharmaceutical Access and 
Choice For Consumers Act increases the level playing field for generic 
drugs by requiring the Food and Drug Administration (FDA), where 
appropriate, to determine that a generic pharmaceutical is the 
therapeutic equivalent of its' brand-name counterpart, and affording 
national uniformity to that determination.
  The legislation would also prevent a State from establishing or 
continuing any requirement that keeps generic pharmaceutical drugs off 
the market once FDA has determined that a generic drug is 
``therapeutically equivalent'' to a brand name drug. This provision 
will ensure that generic prescription drugs get to the market in a 
timely fashion and provide consumers with access and choice to low 
cost, high-quality alternatives.
  As the year continues, I hope that we will move forward in a 
constructive debate about providing relief from the escalating costs of 
prescription drugs. However, I believe that minimizing cost through 
full access to generic drugs must be part of any effort to address the 
prescription drug pricing issue. I introduced the Generic 
Pharmaceutical Access and Choice For Consumers Act of 2001 to lay the 
ground work early in these discussions and take some constructive steps 
in the right direction so that the American public can get the full 
benefit of safe, affordable generic prescription drugs and taxpayers 
are treated right at the same time.
  I ask unanimous consent that the full text of the legislation be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 186

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

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Generic 
     Pharmaceutical Access and Choice for Consumers Act of 2001''.
       (b) Table of Contents.--The table of contents of this Act 
     is as follows:

Sec. 1. Short title; table of contents.
Sec. 2. Findings and purposes.

              TITLE I--REQUIRING THE USE OF GENERIC DRUGS

Sec. 101. Requiring the use of generic drugs under the Public Health 
              Service Act.
Sec. 102. Application to Federal employees health benefits program.
Sec. 103. Application to medicare program.
Sec. 104. Application to medicaid program.
Sec. 105. Application to Indian Health Service.
Sec. 106. Application to veterans programs.
Sec. 107. Application to recipients of uniformed services health care.
Sec. 108. Application to Federal prisoners.

    TITLE II--THERAPEUTIC EQUIVALENCE REQUIREMENTS FOR GENERIC DRUGS

Sec. 201. Therapeutic equivalence of generic drugs.

         TITLE III--GENERIC PHARMACEUTICALS AND MEDICARE REFORM

Sec. 301. Sense of the Senate on requiring the use of generic 
              pharmaceuticals under the medicare program.

     SEC. 2. FINDINGS AND PURPOSES.

       (a) Findings.--Congress makes the following findings:
       (1) Generic pharmaceuticals are approved by the Food and 
     Drug Administration on the basis of scientific testing and 
     other information establishing that such pharmaceuticals are 
     therapeutically equivalent to brand-name pharmaceuticals, 
     ensuring consumers a safe, efficacious, and cost-effective 
     alternative to brand-name innovator pharmaceuticals.
       (2) The pharmaceutical market has become increasingly 
     competitive during the last decade because of the increasing 
     availability and accessibility of generic pharmaceuticals.
       (3) The Congressional Budget Office estimates that--
       (A) the substitution of generic pharmaceuticals for brand-
     name pharmaceuticals will save purchasers of pharmaceuticals 
     between $8,000,000,000 and $10,000,000,000 each year; and
       (B) quality generic pharmaceuticals cost between 25 percent 
     and 60 percent less than brand-name pharmaceuticals, 
     resulting in an estimated average savings of $15 to $30 on 
     each prescription filled.
       (4) Independent studies have estimated that generics 
     provide an average savings of $45.50 for each prescription 
     drug sold.
       (5) Generic pharmaceuticals are widely accepted by both 
     consumers and the medical profession, as the market share 
     held by generic pharmaceuticals compared to brand-name 
     pharmaceuticals has more than doubled during the last decade, 
     from approximately 19 percent to 43 percent, according to the 
     Congressional Budget Office.
       (6) Generic pharmaceuticals can save consumers an 
     additional $1,320,000,000 each year for each 1 percent 
     increase in the use of such pharmaceuticals.
       (7) Generic pharmaceutical use can help both consumers and 
     the Government reduce the cost of prescription drugs.
       (b) Purposes.--The purposes of this Act are--
       (1) to reduce the cost of prescription drugs to the United 
     States Government and to beneficiaries under Federal health 
     care programs while maintaining the quality of health care by 
     requiring the use of generic drugs rather than nongeneric 
     drugs, unless no therapeutically equivalent generic drug has 
     been approved under the Federal Food, Drug, and Cosmetic Act 
     (21 U.S.C. 301 et seq.) or the nongeneric drug is 
     specifically--
       (A) ordered by the prescribing provider; or
       (B) requested by the individual for whom the drug is 
     prescribed; and
       (2) to increase the utilization of generic pharmaceuticals 
     by requiring the Food and Drug Administration, where 
     appropriate, to determine that a generic pharmaceutical is 
     the therapeutic equivalent of its brand-name counterpart, and 
     by affording national uniformity to that determination.

              TITLE I--REQUIRING THE USE OF GENERIC DRUGS

     SEC. 101. REQUIRING THE USE OF GENERIC DRUGS UNDER THE PUBLIC 
                   HEALTH SERVICE ACT.

       (a) In General.--Part B of title II of the Public Health 
     Service Act (42 U.S.C. 238 et seq.) is amended by adding at 
     the end the following new section:

     ``SEC. 247. USE OF GENERIC DRUGS REQUIRED.

       ``(a) Requirement.--Each grant or contract entered into 
     under this Act that involves the provision of health care 
     items or services to individuals shall include provisions to 
     ensure that any prescription drug provided for under such 
     grant or contract is filled by providing the generic form of 
     the drug involved, unless no generic form of the drug has 
     been approved under the Federal Food, Drug, and Cosmetic Act 
     or the nongeneric form of the drug is specifically--
       ``(1) ordered by the prescribing provider; or
       ``(2) requested by the individual for whom the drug is 
     prescribed.
       ``(b) Definitions.--In this section:
       ``(1) Generic form of the drug.--The term `generic form of 
     the drug' means a drug that is the subject of an application 
     approved under subsection (b)(2) or (j) of section 505 of the 
     Federal Food, Drug, and Cosmetic Act (21 U.S.C. 355), for 
     which the Secretary has made a determination that the drug is 
     the therapeutic equivalent of a listed drug under section 
     505(o) of that Act (21 U.S.C. 355(o)).
       ``(2) Nongeneric form of the drug.--The term `nongeneric 
     form of the drug' means a drug that is the subject of an 
     application approved under--
       ``(A) section 505(b)(1) of the Federal Food, Drug, and 
     Cosmetic Act (21 U.S.C. 355(b)(1)); or
       ``(B) section 505(b)(2) of such Act and that has been 
     determined to be not therapeutically equivalent to any listed 
     drug.
       ``(3) Prescription drug.--The term `prescription drug' 
     means a drug that is subject to the provisions of section 
     503(b) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 
     353(b)).''.
       (b) Effective Date.--The amendment made by this section 
     shall apply with respect to any drug furnished on or after 
     the date of enactment of this Act.

     SEC. 102. APPLICATION TO FEDERAL EMPLOYEES HEALTH BENEFITS 
                   PROGRAM.

       (a) In General.--Section 8902 of title 5, United States 
     Code, is amended by adding at the end the following new 
     subsection:
       ``(p) If a contract under this chapter provides for the 
     provision of, the payment for, or the reimbursement of the 
     cost of any prescription drug (as defined in paragraph (3) of 
     section 247(b) of the Public Health Service Act), the carrier 
     shall provide, pay, or reimburse the cost of the generic form 
     of the drug (as defined in paragraph (1) of such section), 
     except that this subsection shall not apply if the nongeneric 
     form of the drug (as defined in paragraph (2) of such 
     section) is specifically--
       ``(1) ordered by the prescribing provider; or
       ``(2) requested by the individual for whom the drug is 
     prescribed.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to any prescription drug furnished during 
     contract years beginning on or after January 1, 2002.

     SEC. 103. APPLICATION TO MEDICARE PROGRAM.

       (a) In General.--Section 1861(t) of the Social Security Act 
     (42 U.S.C. 1395x(t)) is amended by adding at the end the 
     following new paragraph:
       ``(3) For purposes of paragraph (1), the term `drugs' means 
     the generic form of the drug (as defined in section 247(b)(1) 
     of the Public Health Service Act), unless no generic form of 
     the drug has been approved under the Federal Food, Drug, and 
     Cosmetic Act or the nongeneric form of such drug (as defined 
     in section 247(b)(2) of such Act) is specifically--
       ``(A) ordered by the health care provider; or
       ``(B) requested by the individual to whom the drug is 
     provided.''.
       (b) Effective Date.--
       (1) In general.--Except as provided in paragraph (2), the 
     amendment made by this section shall apply with respect to 
     any prescription drug furnished on or after the date of 
     enactment of this Act.

[[Page S574]]

       (2) Medicare+choice plans.--In the case of a 
     Medicare+Choice plan offered by a Medicare+Choice 
     organization under part C of title XVIII of the Social 
     Security Act (42 U.S.C. 1395w-21 et seq.), the amendment made 
     by this section shall apply to any prescription drug 
     furnished during contract years beginning on or after January 
     1, 2002.

     SEC. 104. APPLICATION TO MEDICAID PROGRAM.

       (a) In General.--Section 1902(a) of the Social Security Act 
     (42 U.S.C. 1396a(a)) is amended--
       (1) in paragraph (64), by striking ``and'' at the end;
       (2) in paragraph (65), by striking the period at the end 
     and inserting ``; and''; and
       (3) by adding the following new paragraph:
       ``(66) provide that the State shall, in conjunction with 
     the program established under section 1927(g), provide for 
     the use of a generic form of a drug (as defined in paragraph 
     (1) of section 247(b) of the Public Health Service Act), 
     unless no generic form of the drug has been approved under 
     the Federal Food, Drug, and Cosmetic Act or the nongeneric 
     form of the drug (as defined in paragraph (2) of such 
     section) is specifically--
       ``(A) ordered by the provider; or
       ``(B) requested by the individual to whom the drug is 
     provided.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply with respect to any prescription drug furnished 
     under State plans that are approved or renewed on or after 
     the date of enactment of this Act.

     SEC. 105. APPLICATION TO INDIAN HEALTH SERVICE.

       (a) In General.--Title II of the Indian Health Care 
     Improvement Act (25 U.S.C. 1621 et seq.) is amended by adding 
     at the end the following new section:

     ``SEC. 225. USE OF GENERIC DRUGS REQUIRED.

       ``In providing health care items or services under this 
     Act, the Indian Health Service shall ensure that any 
     prescription drug (as defined in paragraph (3) of section 
     247(b) of the Public Health Service Act) that is provided 
     under this Act is the generic form of the drug (as defined in 
     paragraph (1) of such section) involved, unless no generic 
     form of the drug has been approved under the Federal Food, 
     Drug, and Cosmetic Act or the nongeneric form of the drug (as 
     defined in paragraph (2) of such section) is specifically--
       ``(1) ordered by the prescribing provider; or
       ``(2) requested by the individual for whom the drug is 
     prescribed.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply with respect to any prescription drug furnished 
     on or after the date of enactment of this Act.

     SEC. 106. APPLICATION TO VETERANS PROGRAMS.

       (a) Use of Generic Drugs Required.--Subchapter III of 
     chapter 17 of title 38, United States Code, is amended by 
     inserting after section 1722A the following new section:

     ``Sec. 1722B. Use of generic drugs required

       ``When furnishing a prescription drug (as defined in 
     paragraph (3) of section 247(b) of the Public Health Service 
     Act) under this chapter, the Secretary shall furnish a 
     generic form of the drug (as defined in paragraph (1) of such 
     section), unless no generic form of the drug has been 
     approved under the Federal Food, Drug, and Cosmetic Act or 
     the nongeneric form of the drug (as defined in paragraph (2) 
     of such section) is specifically--
       ``(1) ordered by the prescribing provider; or
       ``(2) requested by the individual for whom the drug is 
     prescribed.''.
       (b) Clerical Amendment.--The table of sections at the 
     beginning of chapter 17 of such title is amended by inserting 
     after the item relating to section 1722A the following new 
     item:

``1722B. Use of generic drugs required.''.

       (c) Effective Date.--The amendments made by this section 
     shall apply with respect to any prescription drug furnished 
     on or after the date of enactment of this Act.

     SEC. 107. APPLICATION TO RECIPIENTS OF UNIFORMED SERVICES 
                   HEALTH CARE.

       (a) Use of Generic Drugs Required.--Chapter 55 of title 10, 
     United States Code, as amended by section 751(b) of the Floyd 
     D. Spence National Defense Authorization Act for Fiscal Year 
     2001 (as enacted into law by Public Law 106-398), is amended 
     by adding at the end the following new section:

     ``Sec. 1111. Use of generic drugs required

       ``The Secretary of Defense shall ensure that each health 
     care provider who furnishes a prescription drug (as defined 
     in paragraph (3) of section 247(b) of the Public Health 
     Service Act) furnishes the generic form of the drug (as 
     defined in paragraph (1) of such section), unless no generic 
     form of the drug has been approved under the Federal Food, 
     Drug, and Cosmetic Act or the nongeneric form of the drug (as 
     defined in paragraph (2) of such section) is specifically--
       ``(1) ordered by the prescribing provider; or
       ``(2) requested by the individual for whom the drug is 
     prescribed.''.
       (b) Clerical Amendment.--The table of sections at the 
     beginning of such chapter is amended by inserting after the 
     item relating to section 1109 the following new item:

``1111. Use of generic drugs required.''.

       (c) Effective Date.--The amendments made by this section 
     shall apply with respect to any drug furnished on or after 
     the date of enactment of this Act.

     SEC. 108. APPLICATION TO FEDERAL PRISONERS.

       (a) In General.--Section 4006(b) of title 18, United States 
     Code, is amended by adding at the end the following new 
     paragraph:
       ``(3) Use of generic drugs required.--The Attorney General 
     shall ensure that each health care provider who furnishes a 
     prescription drug (as defined in paragraph (3) of section 
     247(b) of the Public Health Service Act) to a prisoner 
     charged with or convicted of an offense against the United 
     States furnishes the generic form of the drug (as defined in 
     paragraph (1) of such section), unless no generic form of the 
     drug has been approved under the Federal Food, Drug, and 
     Cosmetic Act or the nongeneric form of the drug (as defined 
     in paragraph (2) of such section) is specifically--
       ``(A) ordered by the prescribing provider; or
       ``(B) requested by the prisoner for whom the drug is 
     prescribed.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply with respect to any prescription drug furnished 
     on or after the date of enactment of this Act.

    TITLE II--THERAPEUTIC EQUIVALENCE REQUIREMENTS FOR GENERIC DRUGS

     SEC. 201. THERAPEUTIC EQUIVALENCE OF GENERIC DRUGS.

       (a) In General.--Section 505 of the Federal Food, Drug, and 
     Cosmetic Act (21 U.S.C. 355) is amended--
       (1) by adding at the end the following new subsection:
       ``(o)(1) For each application filed under subsection (b)(2) 
     or subsection (j), the Secretary shall determine whether the 
     drug for which the application is filed is the therapeutic 
     equivalent of the drug for which the investigations have been 
     made under subsection (b)(1)(A) (in this subsection referred 
     to as the `reference drug') or the listed drug referred to in 
     subsection (j)(2)(A)(i). For applications approved after the 
     date of enactment of this subsection, the Secretary's 
     determination shall be made before the approval of the 
     application. For such applications approved before such date, 
     the most recent determination made by the Secretary shall be 
     confirmed.
       ``(2) For purposes of paragraph (1), a drug is the 
     therapeutic equivalent of a reference drug or a listed drug 
     if--
       ``(A) each active ingredient of the drug and either the 
     reference drug or the listed drug is the same;
       ``(B) the drug and either the reference drug or the listed 
     drug--
       ``(i) are of the same dosage form;
       ``(ii) have the same route of administration;
       ``(iii) are identical in strength or concentration; and
       ``(iv) are expected to have the same clinical effect and 
     safety profile when administered to patients under conditions 
     specified in the labeling; and
       ``(C) the drug does not present a known bioequivalence 
     problem, or if the drug presents such a problem, the drug is 
     shown to meet an appropriate bioequivalence standard.
       ``(3) With respect to a drug for which a therapeutic 
     equivalence determination has been made or confirmed under 
     this subsection, no State or political subdivision of a State 
     may establish or continue in effect with respect to 
     therapeutic equivalence of the drug to either a reference 
     drug or a listed drug, any requirement which is different 
     from, or in addition to, or is otherwise not identical with, 
     the Secretary's determination or confirmation under this 
     subsection.''; and
       (2) in subsection (j)(7)(A), by adding at the end the 
     following:
       ``(iv) The Secretary shall include in each revision of the 
     list under clause (ii) on or after the date of enactment of 
     this clause the official and proprietary name of each 
     reference drug or listed drug that is therapeutically 
     equivalent to a drug approved under subsection (b)(2) or 
     under this subsection during the preceding 30-day period, as 
     determined under subsection (o).''.
       (b) Effective Date.--The amendments made by this section 
     shall take effect on the date of enactment of this Act.

         TITLE III--GENERIC PHARMACEUTICALS AND MEDICARE REFORM

     SEC. 301. SENSE OF THE SENATE ON REQUIRING THE USE OF GENERIC 
                   PHARMACEUTICALS UNDER THE MEDICARE PROGRAM.

       It is the sense of the Senate that legislative language 
     requiring the safe and cost-effective use of generic 
     pharmaceuticals should be considered in conjunction with any 
     legislation that adds a comprehensive prescription drug 
     benefit to the medicare program under title XVIII of the 
     Social Security Act (42 U.S.C. 1395 et seq.).
                                 ______
                                 
      By Ms. SNOWE (for herself and Mr. Grassley):
  S. 187. A bill to establish the position of Assistant United States 
Trade Representative for Small Business, and for other purposes; to the 
Committee on the Budget and the Committee on Governmental Affairs, 
jointly, pursuant to the order of August 4, 1977, with instructions 
that if one committee reports, the other committee has thirty days to 
report or be discharged.
  Ms. SNOWE. Mr. President, I rise today to introduce legislation on 
behalf of our Nation's small business community. This legislation will 
benefit small businesses by requiring an

[[Page S575]]

estimate of the cost of each piece of congressional legislation on 
small businesses before Congress enacts the legislation, and also by 
creating an assistant U.S. Trade Representative for Small Business.
  Small business is the driving force behind our economy, and in order 
to create jobs--both in my home State of Maine and across the Nation-- 
we must encourage small business expansion.
  Nationwide, an estimated 13 to 16 million small businesses account 
for over 99 percent of all employers. They also employ over 50 percent 
of the workers. Small businesses account for virtually all of the new 
jobs being created. Maine, in particular, is a state with a historical 
record of self-reliance and small business enterprise. In Maine, of the 
roughly 36,660 employers, 97.6 percent are small businesses. Maine also 
boasts an estimated 71,000 self-employed persons. Surveys credit small 
businesses with all of the new jobs in Maine as well.
  I believe that small businesses are the most successful tool we have 
for job creation. They provide a substantial majority of the initial 
job opportunities in this country, and are the original--and finest--
job training program. Unfortunately, as much as small businesses help 
our own economy--and the Federal Government--by creating jobs and 
building economic growth, government often gets in the way. Instead of 
assisting small business, government too often frustrates small 
business efforts.
  Federal regulations create more than 1 billion hours of paperwork for 
small businesses each year, according to the Small Business 
Administration. Moreover, because of the size of some of the largest 
American corporations, U.S. commerce officials too often devote a 
disproportionate amount of time to the needs and jobs in corporate 
America rather than in small businesses.
  My legislation will address these two challenges facing small 
businesses, and I hope it will both encourage small business expansion 
and fuel further job creation.
  One, this legislation will require a cost analysis of legislative 
proposals before new requirements are imposed on small businesses. Too 
often, Congress approves well-intended legislation that shifts the 
costs of programs to small businesses. This proposal will help avert 
such unintended consequences.
  According to the U.S. Small Business Administration, small business 
owners spend at least 1 billion hours a year filling our government 
paperwork, at an annual cost that exceeds $100 billion. Before we place 
yet another obstacle in the path of small business job creation, we 
should understand the costs our proposals will impose on small 
businesses.
  This bill will require the Director of the Congressional Budget 
Office to prepare for each committee an analysis of the costs to small 
businesses that would be incurred in carrying out provisions contained 
in new legislation. This cost analysis will include an estimate of 
costs incurred in carrying out the bill or resolution for a 4-year 
period, as well as an estimate of the portion of these costs that would 
be borne by small businesses. This provision will allow us to fully 
consider the impact of our actions on small businesses--and through 
careful planning, we may succeed in mitigating unintended costs.
  Two, this legislation will direct the U.S. Trade Representative to 
establish a position of Assistant U.S. Trade Representative for Small 
Business. The Office of the U.S. Trade Representative is overburdened, 
and too often overlooks the needs of small business. This is a concern 
that I have heard time and again from those in the small business 
community. A new Assistant U.S. Trade Representative would promote 
exports by small businesses and work to remove foreign impediments to 
exports.
  Mr. President, I am convinced that this legislation will truly assist 
small businesses, resulting not only in additional entrepreneurial 
potential but also in good new jobs. I urge my colleagues to join me in 
supporting this legislation.
                                 ______
                                 
      By Ms. COLLINS (for herself and Mrs. Boxer):
  S. 188. A bill to amend the Internal Revenue Code of 1986 to modify 
the tax credit for electricity produced from certain renewable 
resources; to the Committee on Finance.
  Ms. COLLINS. Mr. President, I rise today to introduce the Biomass 
Energy Equity Act of 2001. I am pleased to be joined in this effort by 
Senator Boxer, my colleague from California. This legislation makes a 
commonsense change to the renewable energy production tax credit by 
expanding it to include additional types of biomass plants. I would 
like to take a few minutes now to discuss the need for this important 
bill and to describe what it would do.
  Simply put, biomass energy production uses combustion to turn wood 
and organic waste into energy in an environmentally sound process. 
Biomass takes a public liability, organic waste, and converts it into a 
public asset, energy.
  The renewable energy production tax credit enacted in 1992 provides 
incentives to the solid-fuel biomass and wind energy industry to 
develop economically viable and environmentally responsible renewable 
sources of electricity. In enacting that legislation, Congress 
recognized that biomass energy offers substantial environmental 
benefits, specifically a reduced dependence on oil and coal, a 
desirable alternative to open field burnings and the landfilling of 
organic material, and a net reduction of greenhouse gas emissions.
  Unfortunately, the 1992 legislation was drafted too narrowly to 
realize the full benefits of biomass energy production. The 1992 act 
narrowly defined an eligible biomass facility as including only so-
called closed-loop biomass plants. Closed-loop biomass is a 
hypothetical form of electricity generation where the fuel is planted, 
grown, and harvested specifically and solely for the fuel of the power 
plant. This definition rules out the significant environmental benefit 
of disposal of organic waste otherwise destined for a landfill or 
field-burning and, therefore, remains unused. Since the biomass tax 
credit was passed, no taxpayer, not one, has taken advantage of the tax 
benefit.
  Simply put, the closed-loop tax credit is not a sufficient incentive 
to develop a costly ``fuel plantation,'' which entails large-scale land 
purchases, property taxes, and growing material for the sole purpose of 
burning it. By demanding that newly grown material be used rather than 
organic waste, the closed-loop biomass definition flies in the face of 
the commonly accepted environmental principle that products should be 
put to as many ``highest value'' uses as possible.
  The legislation that I introduce today would expand the eligibility 
of the biomass tax credit to include conventional biomass plants. This 
legislation is designed to encourage a source of energy generation that 
offers substantial air quality, waste management, and greenhouse gas 
reduction benefits. The national biomass industry currently uses over 
22,000,000 tons of wood waste a year. The waste the biomass industry 
converts into energy otherwise would be disposed of in one of three 
ways: burned in an open field, which generates pollution instead of 
energy; landfilled, where it fills limited landfill space and 
biodegrades, emitting methane, carbon dioxide, and other greenhouse 
gases; or left in the woods or fields, increasing the risk and severity 
of forest fires.
  The air quality benefits of biomass energy are of particular 
importance. According to the Northeast States for Coordinated Air Use 
Management, an organization of all the Northeastern States' Air Quality 
Bureaus, biomass energy produces less nitrogen oxide than alternatives 
and generates virtually no sulfur dioxide, particulate matter, or 
mercury. Biomass energy production also results in a net reduction of 
greenhouse gases.

  In addition to their environmental benefits, biomass plants 
contribute to the economy of many rural towns throughout America. 
Because of their dependence on organic waste, biomass facilities are 
usually located in rural areas where they are often important engines 
of economic growth. For example, in the small town of Sherman, Maine, a 
biomass facility provides 56 percent of the property tax base. It also 
directly employs 24 individuals and indirectly provides work for 
hundreds of truck drivers, wood operators, mill workers and maintenance 
contractors.
  In another small town of Maine, Athens, a biomass facility provides a 
third

[[Page S576]]

of that small town's tax base and directly employs 20 people, while 
supporting a local wood operator who, in turn, employs 40 people.
  The point is, the economy in many of the small towns in Maine, in 
towns such as Livermore, Ashland, Greenville, Fort Fairfield, Stratton, 
and West Enfield benefit considerably from these biomass facilities. In 
total, there are over 100 biomass facilities in the United States, 
representing an investment in excess of $7 billion. These facilities 
contribute jobs, property taxes and a disposal point for waste 
products. In addition, rural biomass facilities provide ash for use by 
local farmers, reducing their purchases of lime. I understand there is 
regularly more demand for the ash produced by these biomass plants than 
there is supply.
  With biomass energy production, nothing is wasted. Biomass turns 
waste products--the byproducts of timber, paper or farming operations--
into needed energy, wasting nothing. Even the ash is returned to the 
earth to grow organic matter yielding both crops and waste to generate 
still more electricity.
  We in Congress often discuss ways to help rural America. This 
proposal offers an opportunity to do so in a manner that not only 
benefits the economy of small towns in rural America but also in a way 
that generates considerable environmental benefits.
  This measure makes both economic and environmental sense. I urge my 
colleagues to join Senator Boxer and me in supporting this important 
legislation and working for its passage.
                                 ______
                                 
      By Mr. BOND:
  S. 189. A bill to amend the Internal Revenue Code of 1986 to provide 
tax relief for small businesses, and for other purposes; to the 
Committee on Finance.
  Mr. BOND. Mr. President, I rise because I have just come from a very 
interesting and informative hearing in the Budget Committee. Federal 
Reserve Chairman Alan Greenspan came in today to talk about what he has 
seen as the tremendous productivity growth in this economy. The 
productivity growth essentially has come about because of the 
investment in information technology which has allowed our country to 
produce more in less time and to increase the output of the many 
sources of goods and services in this country. It has brought with it, 
as Chairman Greenspan noted, a significant increase in revenues to the 
Federal Government, which are allowing us to pay down even more rapidly 
than previously thought the debt now held by the public.
  Last year, Chairman Greenspan was adamant. He said the best thing we 
could do was to pay down the debt. He said, ``I have absolutely zero 
concern that we are going to pay the debt down too fast.'' Remarkably, 
today he has said that there is a real danger: We are potentially 
paying down the debt too quickly. He said if we get to the point where 
we have paid down the debt and the Federal Government is starting to 
accumulate private assets--in other words, having to put its surpluses 
into investments in the country--we could have a serious political 
problem. He therefore said that, in addition to continuing debt 
reduction, it is time to take ``surplus-lowering policy initiatives.''
  Now sometimes the Chairman doesn't speak in the clearest language, 
and we questioned him as to what he meant. He indicated that a 
reduction in taxes beginning now, prior to the time we get to the point 
where there is no debt held by the public, is a good idea. He said, 
from an economist's standpoint, the most effective way to generate 
growth in the economy is to reduce marginal rates.
  Well, this was very informative and useful testimony. I urge my 
colleagues to read it. He also warned that we are in serious trouble if 
we follow the path we have followed in this Congress and in the last 
several years of spending explosions, going above the budget and 
continuing to spend more. He said that spending too much can be a real 
danger. There is much less danger of cutting taxes too much because 
there are limits on how much taxes can be cut.
  Mr. President, I introduce the Small Business Works Act of 2001. This 
legislation is built on one inescapable fact--small business ``works'' 
in this country. The men and women who venture into small businesses 
take incredible risks. They work countless hours, often seven days a 
week, just to see their businesses break even. They risk their life 
savings and often capital put up by family and friends. And they forego 
valuable time with their families all for the promise of working for 
themselves and creating prosperous businesses in their communities.
  Our country also reaps the benefits of successful small enterprises. 
According to the Small Business Administration, small businesses 
represent more than 99 percent of all employers, employ 53 percent of 
the private work force, and create about 75 percent of the new jobs in 
this country. In addition, these small firms contribute 47 percent of 
all sales in this country, and they are responsible for 51 percent of 
the private gross domestic product. With these kinds of results, it is 
quite clear that small business works for America.
  Despite their success in recent years, one thing clearly does not 
work for small business--the Internal Revenue Code. Instead of 
collecting the lowest amount of taxes necessary in the least burdensome 
manner, the current tax law represents a morass of rules, regulations, 
forms, and, of course, penalties, with which the self-employed must 
contend. Just to put this into perspective, by some estimates, small 
business owners spend more than 5 percent of their revenues just to 
comply with the tax laws. In fact, a small business owner from Kansas 
City testified before the Senate Committee on Small Business that his 
business routinely spends more than 16 percent of the company's net 
income just to keep the records and file the appropriate tax forms. And 
that's even before he writes the tax check.
  These revenues are taken away from the business and spent on 
accountants, bookkeepers, and lawyers to sort out all the rules and 
filing requirements. In addition, small business owners must dedicate 
valuable time and energy on day-to-day recordkeeping and other 
compliance requirements, all of which keep them from doing what they do 
best--running their business.
  And then there are the taxes themselves. As the chairman of the 
Committee on Small Business, I have heard from small business owners in 
Missouri and across this country that they are more than willing to pay 
their fair share of taxes. What they object to, however, is paying high 
tax bills and vast amounts for professional tax assistance only to end 
up the victim of an unfair tax code.
  Mr. President, the legislation I introduce today continues my long-
standing commitment to helping small businesses obtain much needed tax 
relief and common-sense simplifications of our tax laws. For their 
unending contribution to the prosperity of this country, they deserve 
no less.
  The bill is designed to complement the broad-based tax stimulus 
package that President Bush has proposed. With an economy that appears 
to be slowing, small businesses are likely to be among the first 
affected. We need to ensure that they benefit from any tax stimulus we 
enact this year to secure their continued vitality in the future.
  The Small Business Works Act also draws from the priorities of the 
nation's small business organizations including the National Federation 
of Independent Business, the Small Business Legislative Council, and 
many others. While there are too many organizations to name them all 
individually, I am grateful for their ideas, their insights, and their 
support, without which this bill would not have been possible.
  This legislation also includes recommendations from the National 
Women's Small Business Summit, which I chaired in Kansas City, 
Missouri, last June. That summit brought together hundreds of women 
business owners who focused on specific areas of concern to their 
businesses, one of which was taxes. As the Summit's final report 
concludes, ``the Congress and the Executive Branch have a new mandate--
listen to what women small-business owners have said and answer their 
call to action.'' During the Summit, I listened carefully to the views 
and recommendations of the participants, and with this legislation I am 
taking steps to answer their needs.
  Lastly, this bill incorporates a number of the recommendations that 
the Internal Revenue Service (IRS) National Taxpayer Advocate set out 
in

[[Page S577]]

his Annual Report to Congress for 2001. The Taxpayer Advocate has 
become an invaluable resource for identifying problems facing small 
business taxpayers and offering legislative proposals to address them.
  Mr. President, the Small Business Works Act recognizes the incredible 
contribution that entrepreneurs, farmers and ranchers, and home-based 
business owners continually make to our economy despite the financial 
and paperwork headaches they face at every turn. To ease those burdens, 
the legislation provides tax relief for the self-employed and small 
firms, includes broad ranging tax simplifications for small 
enterprises, and accords small businesses greater protection as they 
strive to comply with our increasingly complex tax code.
  When it comes to paying taxes, small business really works for the 
government. According to recent IRS data, small business owners pay 
approximately 40 percent of the nearly $2 trillion that the Federal 
government collects each year. With the growing budget surpluses, small 
businesses, like American families, are clearly paying more than the 
government needs to carry out its programs and obligations. So when we 
talk about a tax cut, small enterprises cannot be left behind. The 
Small Business Works Act embraces that fact by reducing the tax burden 
on small firms in several ways.
  First, the bill includes the legislation that I introduced earlier 
this week to provide 100 percent deductibility of health insurance for 
the self-employed beginning this year. This was among the top 
priorities named by the National Women's Small Business Summit last 
summer, and it has been identified by the IRS National Taxpayer 
Advocate as a legislative recommendation for small business taxpayers.

  With the self-employed able to deduct only 60 percent of their 
health-insurance costs today, and only 70 percent next year, it comes 
as no surprise that 24.2 percent of the self-employed still do not have 
health insurance. In fact, 4.8 million Americans live in families 
headed by a self-employed individual and have no health insurance. A 
full deduction will make health insurance more affordable to the self-
employed and help them and their families get the health-insurance 
coverage that they need and deserve today--not years in the future.
  Full deductibility also levels the playing field for the self-
employed, who for too long have only had partial deductibility while 
their large corporate competitors have been able to deduct all of their 
insurance costs. Full deductibility against income taxes, however, is 
only part of the battle. My bill also corrects an additional 
peculiarity of the tax code, which prevents the self-employed from 
deducting their health-insurance premiums against their self-employment 
taxes. As the Taxpayer Advocate noted in his 2001 Report to Congress, 
``[a]lthough self- employed individuals can reduce their taxable income 
by the cost of their health insurance, they still must pay self-
employment taxes on this amount.'' In contrast, the Taxpayer Advocate 
continues, ``Wage earners who participate in pre-tax plans do not pay 
Social Security tax on their health insurance payments.'' My bill 
eliminates this narrow disparity in the law and allows the self-
employed to exclude their health-insurance premiums from their self-
employment tax.
  As a result, the self-employed will truly be on an equal footing with 
owners and employees of corporations whose health-insurance benefits 
are not subject to income or employment taxes. It is a simple matter of 
fairness.
  Second, the Small Business Works Act addresses the increasingly 
onerous consequences of the individual and corporate Alternative 
Minimum Tax (AMT). For the sole proprietors, partners, and S 
corporation shareholders, the individual AMT increases their tax 
liability by, among other things, reducing depreciation and depletion 
deductions, limiting net operating loss treatment, eliminating the 
deductibility of state and local taxes, and curtailing the expensing of 
research and experimentation costs. In addition, because of its 
complexity, this tax forces small business owners to waste precious 
funds on tax professionals to determine whether the AMT even applies. 
For these reasons, the bill includes the recommendation of the Taxpayer 
Advocate to repeal the individual AMT. This will be accomplished by 
eliminating 20 percent of the tax each year until it is completely 
repealed in 2006.
  For small corporations, the AMT story is much the same--high 
compliance costs and additional taxes draining away scarce capital from 
the business. In fact, the Committee on Small Business heard at a 
hearing in the last Congress that the corporate AMT resulted in a 
$95,000 tax bill for one small business in Kansas City, all because the 
company purchased life insurance on the father, who was the primary 
owner of the business, to prevent the estate tax from closing the 
company down. That type of nonsense must come to an end here and now.
  Accordingly, for small corporate taxpayers, the bill increases the 
current exemption from the corporate AMT. As a result, a small 
corporation will initially qualify for the exemption if its average 
gross receipts are $7.5 million or less (up from the current $5 
million) during its first three taxable years. Thereafter, a small 
corporation will continue to qualify for the AMT exemption for as long 
as its average gross receipts for the prior three-year period do not 
exceed $10 million (up from the current $7.5 million).
  Third, the Small Business Works Act, repeals the unemployment surtax. 
Since 1976, small businesses have had to bear the burden of a 0.2 
percent surtax on the unemployment taxes they pay for their employees. 
This surtax was enacted to repay loans from the Federal unemployment 
fund made during the 1974 recession. Those loans were fully repaid in 
1987, and yet the surtax continues to be extended, adding to the tax 
burden facing small employers. With the Federal surplus proving that 
small businesses are paying too much, this tax clearly should go.
  Fourth, the Small Business Works Act incorporates a central piece of 
President Bush's tax plan to help businesses dedicated to developing 
new products and technology; it permanently extends the research and 
experimentation tax credit. Over the years this credit has stimulated 
research and development in this country and has contributed to the 
leadership of American businesses in the technological revolution. 
Unfortunately, this credit has also had a checkered history of 
expiration and reauthorization, which is simply untenable for 
businesses trying to plan for long-term research programs. It is time 
to end the on-again/off-again nature of this credit and provide 
businesses the certainty of knowing it will be available for the 
future.
  Finally, the bill responds to the recommendation from the National 
Women's Small Business Summit to enhance the business-meals deduction. 
Unlike their large competitors, small enterprises often sell their 
products and services by word of mouth and close many business 
transactions on the road or in a local diner. In many ways the business 
breakfast with a potential customer is akin to formal advertising that 
larger businesses purchase in newspapers or on radio or television. 
While the newspaper ad is fully deductible, however, the business meal 
is only 50 percent deductible for the small business owner.
  In addition, individuals who are subject to the Federal hours-of-
service limitations of the Department of Transportation (such as truck 
drivers) are currently able to deduct 60 percent of their business 
meals and are on schedule to deduct up to 80 percent in coming years. 
As a result, small business owners have a significant lack of parity 
with individuals subject to hours-of-service limitations. Accordingly, 
the Small Business Works Act increases the limitation on the 
deductibility of business meals from the current 50 percent to 80 
percent beginning in 2001.
  As chairman of the Committee on Small Business, I spent considerable 
time in the last Congress examining the paperwork and filing burdens on 
small enterprises. According to research completed by the General 
Accounting Office at my request, there are more than 200 forms and 
schedules that a small business owner could have to file. That's a 
daunting universe of forms, which boils down to more than 8,000 lines, 
boxes, and data requirements. These forms are also accompanied by more 
than 700 pages of instructions--not including the countless pages of 
the tax code, regulations, rulings, and other IRS guidance.

[[Page S578]]

  Since entrepreneurs usually open their own businesses to work for 
themselves, not to waste valuable time and resources on government 
filing and recordkeeping requirements, the Small Business Works Act 
includes several provisions to simplify the tax code and let small 
business owners get on with their work.
  First, in continuation of my effort in the last Congress, the bill 
includes my Small Business Tax Accounting Simplification Act, with some 
improvements. This provision allows a small business to use the cash 
method of accounting, rather than the more onerous accrual method, if 
the business' average annual gross receipts are less than $5 million. 
This proposal has been strongly endorsed by small business 
associations, including the National Federation of Independent Business 
and the Associated Builders and Contractors, and most recently by the 
Taxpayer Advocate stressing the need for simplifying the tax accounting 
rules.
  More critically, the bill allows businesses that require merchandise 
in the performance of their services to use the cash method of 
accounting for all purposes. This provision responds to the pleas for 
help from small service providers, such as painters and contractors, 
who have recently become the focus of the IRS' attention, to the tune 
of thousands of dollars in taxes and penalties, not to mention 
accounting fees. And for what? A difference in timing, when the small 
business will ultimately pay the same amount of taxes? This change in 
the tax code is long overdue and will dramatically simplify the tax 
rules for countless small businesses.
  At the National Women's Small Business Summit last summer, the 
participants raised another area of complexity for America's 
entrepreneurs--depreciation. The Small Business Works Act addresses 
this issue, in large part, by increasing the amount of equipment that 
small firms can expense each year to $50,000 and thereby avoid the 
complex depreciation rules. This bill also adjusts the phase-out 
limitation on expensing to permit more small businesses to purchase 
basic equipment without losing the benefit of immediate expensing. This 
limitation has not been increased since 1986, and as a result it is 
sorely out of step with the cost of new technology, which has risen 
dramatically over the past decade.
  In addition, the bill responds to another recommendation of the 
Taxpayer Advocate by permitting computer software to be expensed. For 
computers and software purchased over the new $50,000 expensing limit, 
the bill modifies the present law to allow this technology to be 
depreciated over two years. Currently, computer equipment is generally 
depreciated over a five- year period and software is usually 
depreciated over three years. Any small business owner will tell you 
that a computer is largely obsolete well before three years of use, let 
alone five years. And computer software becomes outdated even faster. 
As a result, small business owners are left with thousands of dollars 
of depreciation on their books well after the equipment or software is 
obsolete. The bill makes the tax code in this area more consistent with 
the technological reality of the business world.
  The Small Business Works Act also amends the limitations on the 
amount of depreciation that business owners may claim for vehicles used 
for business purposes. Under current law, a business loses a portion of 
its depreciation deduction if the vehicle placed in service in 2000 
costs more than $14,400. Although these limitations have been subject 
to inflation adjustments, they have not kept pace with the actual cost 
of new cars and vans in most cases. For many small businesses, the use 
of a car or van is an essential asset for transporting personnel to 
sales and service appointments and for delivering their products. 
Accordingly, the bill adjusts the thresholds so that a business will 
not lose any of its depreciation deduction for vehicles costing less 
than $25,000, which will continue to be indexed for inflation.
  Mr. President, another source of complexity for many small business 
owners are the estimated tax rules and the differing thresholds 
depending on the owner's income level. In fact, this issue was the 
number three legislative recommendation of the Taxpayer Advocate this 
year. The Small Business Works Act restores the simple two-option rule 
to avoid the interest penalty for underpayment of estimated taxes, 
which has been repeatedly altered in recent years primarily to raise 
revenues. To end that headache for the self-employed, the bill allows 
an individual to satisfy the requirements of the code if his estimated 
taxes are equal to 90 percent of the current year's tax bill or 100% of 
last year's tax bill--a simple and straightforward rule so small 
business owners can stop wasting time on tax preparation and get back 
to work.
  The Small Business Works Act also addresses a complexity issue raised 
by the IRS National Taxpayer Advocate concerning small businesses 
jointly owned by a husband and wife. As noted by the Advocate in his 
2001 Report to Congress: ``A married couple operating a small business 
must comply with the complex partnership reporting requirements. Even 
though the married couple files a joint tax return, the law requires 
them to treat the business as a partnership rather than a sole 
proprietorship. . . . [the] IRS estimates it takes over 200 hours 
longer to complete a partnership return than a Sole Proprietorship 
Schedule C.'' In light of this situation, the bill amends the tax code 
to permit married couples who jointly own a small business to opt out 
of the partnership rules and file as a sole proprietorship.
  Mr. President, in the 105th Congress, we took bold steps to 
restructure the IRS and improve the quality of service that taxpayers 
receive. Since the IRS Restructuring and Reform Act was enacted in 
1998, the IRS made great strides to redirect the agency and balance its 
dual mission of collecting tax revenues and serving taxpayers in a fair 
and respectful manner.
  With the growing complexity of our tax code, however, opportunities 
abound for small businesses to make honest mistakes. The IRS 
Restructuring and Reform Act provided important protections for all 
taxpayers, but work remains to ensure that small businesses are treated 
justly under the tax laws. The Small Business Works Act addresses 
several issues that small businesses continue to report as major 
problems.
  A top concern is the excessive nature of penalties and interest 
imposed on taxpayers who make mistakes. Far too often, a minor tax bill 
grows into an unmanageable liability because of the interest on the tax 
owed, the penalties for negligence and late payment, and the interest 
on the penalties. Frequently, these penalties can prevent a small 
business owner from settling his account and getting back into good 
standing.

  Penalties were included in the tax code to encourage taxpayers to 
comply with our voluntary assessment system, and interest was intended 
to compensate the government for the lost use of tax dollars. But the 
multiplicity of penalties and hidden punishments disguised as interest 
on those penalties seriously undermines Americans' confidence that our 
system is fair.
  The Small Business Works Act stops the runaway freight train of 
excessive penalties and interest in two ways. First, the bill 
eliminates the failure-to-pay penalty, which is part of the multiple 
penalties often applied to the same error. Penalties should punish bad 
behavior, not honest errors that even well-intentioned people are bound 
to make now and then. Second, the bill stops the practice of charging 
interest on penalties. Instead, interest will only be applied to the 
taxes due, just like interest is charged on a credit card for unpaid 
balances. Both of these changes implement recommendations of the 
Taxpayer Advocate. Again, it's simply a matter of fairness.
  The bill also addresses the issue of electronic filing of tax 
returns. In the 1998 IRS Restructuring and Reform Act, we set a goal 
for the IRS to make electronic filing the most practical and preferred 
method of filing so that 80 percent of taxpayers would choose to file 
electronically by 2007. While I continue to support that goal, I am 
concerned that the temptation for ensuring that the goal is reached 
will lead to mandatory electronic filing. At a time when small firms 
are already faced with daunting government mandates just in completing 
their tax returns, the last thing they need is a new mandate for filing 
them. To prevent that

[[Page S579]]

result, my bill makes clear that expanded electronic filing of tax and 
information returns will be a voluntary option for small businesses, 
not another government mandate.
  The taxpayer protections included in the bill are intended to strike 
a balance for small business taxpayers. On the one hand, the bill eases 
the excessive punishment imposed for honest errors and reduces the 
burdens faced by taxpayers subject to an audit by the IRS. On the 
other, it preserves the agency's authority to enforce the tax laws and 
prevent individuals from cheating the tax system, which in the end 
increases the tax burden on all Americans.
  Mr. President, the legislation I introduce today is a commonsense 
package of tax relief, simplification, and protections for America's 
small businesses who work so hard. As we strive in the coming weeks to 
enact tax-relief legislation, I urge my colleagues to remember that 
small business works in America, the jobs they provide in our local 
communities are too important, and they simply cannot be left behind.
  I ask unanimous consent to have printed in the Record following the 
text of my statement a description of the bill's provisions, and 
letters I have received from small business organizations supporting 
the Small Business Works Act.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                    Self Business Works Act of 2001


                   title I--small business tax relief

     Self-Employed Health Insurance Deductibility
       The bill amends section 162(l)(1) of the Internal Revenue 
     Code to increase the deduction for health-insurance costs for 
     self-employed individuals to 100 percent beginning on January 
     1, 2001. Currently the self-employed can only deduct 60 
     percent of these costs. The deduction is not scheduled to 
     reach 100 percent until 2003, under the provisions signed 
     into law in October 1998. The bill is designed to place self-
     employed individuals on an equal footing with large 
     businesses, which can currently deduct 100 percent of the 
     health-insurance costs for all of their employees.
       In addition, the bill corrects a disparity under current 
     law that bars a self-employed individual from deducting any 
     of his or her health-insurance costs if the individual is 
     eligible to participate in another health-insurance plan. 
     This provision affects self-employed individuals who are 
     eligible for, but do not participate in, a health-insurance 
     plan offered through a second job or through a spouse's 
     employer. That insurance plan may not be adequate for the 
     self-employed business owner, and this provision prevents the 
     self-employed from deducting the costs of insurance policies 
     that do meet the specific needs of their families. In 
     addition, this provision provides a significant disincentive 
     for self-employed business owners to provide group health 
     insurance for their employees. The bill ends this disparity 
     by clarifying that a self-employed person loses the deduction 
     only if he or she actually participates in another health-
     insurance plan.
       The bill also levels the playing field by permitting self-
     employed individuals to deduct the cost of their health 
     insurance against their self-employment taxes. This change 
     will put the self-employed on an equal footing with owners 
     and employees of corporations whose health-insurance benefits 
     are not subject to employment taxes.
     Alternative Minimum Tax Relief
       The bill repeals the individual Alternative Minimum Tax 
     (AMT) by 2006. For individual taxpayers, the individual AMT 
     has become an increasingly burdensome tax. For the sole 
     proprietors, partners, and S corporation shareholders, the 
     individual AMT increases their tax liability by, among other 
     things, limiting depreciation and depletion deductions, net 
     operating loss treatment, the deductibility of state and 
     local taxes, and expensing of research and experimentation 
     costs. In addition, because of its complexity, this tax 
     forces small business owners to waste precious funds on tax 
     professionals to determine whether the AMT even applies.
       The bill addresses these issues by eliminating 20 percent 
     of the individual AMT each year until complete repeal is 
     achieved in 2006. During the phase-out period, the bill 
     extends the current exclusion of personal tax credits from 
     the AMT, and it coordinates the farm income-averaging rules 
     with the AMT to ensure that farmers and ranchers do not lose 
     the benefits of income averaging.
       For small corporate taxpayers, the bill increases the 
     current exemption from the corporate AMT, under section 55(e) 
     of the Internal Revenue Code. Under the bill, a small 
     corporation will initially qualify for the exemption if its 
     average gross receipts are $7.5 million or less (up from the 
     current $5 million) during its first three taxable years. 
     Thereafter, a small corporation will continue to qualify for 
     the AMT exemption for so long as its average gross receipts 
     for the prior three-year period do not exceed $10 million (up 
     from the current $7.5 million). The increased limits for the 
     small-corporation exemption from the corporate AMT will be 
     effective for taxable years beginning after December 31, 
     2000.
     Repeal of Federal Unemployment Surtax
       In 1976, a surtax of 0.2 percent was added to the Federal 
     Unemployment Tax to repay loans from the Federal unemployment 
     fund made during the 1974 recession. Those loans were fully 
     repaid in 1987. Accordingly, the bill repeals the 0.2 percent 
     surtax beginning in taxable year 2001.
     Extend Research and Experimentation Tax Credit Permanently
       The bill permanently extends the research and 
     experimentation (R&E) tax credit, which has been a valuable 
     resource for businesses developing new products. Under 
     current law, the R&E tax credit is set to expire on June 30, 
     2004.
     Increased Deduction for Business Meal Expenses
       The bill increases the limitation on the deductibility of 
     business meals from the current 50 percent to 80 percent 
     beginning in 2001. Unlike their large competitors, small 
     enterprises often sell their products and services by word of 
     mouth and close many business transactions on the road or in 
     a local diner. In addition, individuals who are subject to 
     the Federal hours-of-service limitations of the Department of 
     Transportation (such as truck drivers) are currently able to 
     deduct 60 percent of their business meals and are on schedule 
     to deduct up to 80 percent in coming years. Accordingly, the 
     bill corrects this significant lack of parity for small-
     business owners by putting them on par with individuals 
     subject to hours-of-service limitations and their large 
     competitors.


              title II--small business tax simplification

     Clarification of Cash Accounting Rules for Small Businesses
       The bill amends section 446 of the Internal Revenue Code to 
     provide a clear threshold for small businesses to use the 
     cash receipts and disbursements method of accounting, instead 
     of accrual accounting. To qualify, the business must have $5 
     million or less in average annual gross receipts based on the 
     preceding three years. Thus, even if the production, 
     purchase, or sale of merchandise is an income-producing 
     factor in the taxpayer's business, the taxpayer will not 
     be required to use an accrual method of accounting if the 
     taxpayer meets the average annual gross receipts test.
       In addition, the bill provides that a taxpayer meeting the 
     average annual gross receipts test is not required to account 
     for inventories under section 471. The taxpayer will be 
     required to treat such inventory in the same manner as 
     materials or supplies that are not incidental. Accordingly, 
     the taxpayer may deduct the expenses for such inventory that 
     are actually consumed and used in the operation of the 
     business during that particular taxable year.
       The bill indexes the $5 million average annual gross 
     receipts threshold for inflation. The cash-accounting safe 
     harbor will be effective for taxable years beginning after 
     December 31, 2000.
     Increase in Expense Treatment for Small Businesses
       The bill amends section 179 of the Internal Revenue Code to 
     increase the amount of equipment purchases that small 
     businesses may expense each year from the current $24,000 to 
     $50,000. This change will eliminate the burdensome 
     recordkeeping involved in depreciating such equipment and 
     free up capital for small businesses to grow and create jobs.
       The bill also increases the phase-out limitation for 
     equipment expensing from the current $200,000 to $400,000, 
     thereby expanding the type of equipment that can qualify for 
     expensing treatment. This limitation along with the annual 
     expensing amount will be indexed for inflation under the 
     bill.
       Following the recommendation of the National Taxpayer 
     Advocate, the bill also amends section 179 to permit 
     expensing in the year that the property is purchased or the 
     year that the property is placed in service, whichever is 
     earlier. This will eliminate the difficulty that many small 
     firms have encountered when investing in new equipment in one 
     tax year (e.g., 2000) that cannot be placed in service until 
     the following year (e.g., 2001). The bill also expands 
     section 179 to permit the expensing of computer software up 
     to the new $50,000 limit.
       The equipment-expensing provisions will be effective for 
     taxable years beginning after December 31, 2000.
     Modification of Depreciation Rules
       The bill modifies the outdated depreciation rules to permit 
     taxpayers to depreciate computer equipment and software over 
     a two-year period. Under present law, computer equipment is 
     generally depreciated over a five-year period and software is 
     usually depreciated over three years. With the rapid 
     advancements in technology, these depreciation periods are 
     sorely out of date and can result in small businesses having 
     to exhaust their depreciation deductions well after the 
     equipment or software is obsolete. The bill makes the tax 
     code in this area more consistent with the technological 
     reality of the business world.
       The bill also amends section 280F of the Internal Revenue 
     Code, which limits the amount of depreciation that a business 
     may claim with respect to a vehicle used for business 
     purposes. Under the current thresholds, a business loses a 
     portion of its depreciation deduction if the vehicle placed 
     in service in 2000 costs more than $14,400. Although these 
     limitations have been subject to inflation

[[Page S580]]

     adjustments, they have not kept pace with the actual cost of 
     new cars and vans in most cases. For many small businesses, 
     the use of a car or van is an essential asset for 
     transporting personnel to sales and service appointments and 
     for delivering their products. Accordingly, the bill adjusts 
     the thresholds so that a business will not lose any of its 
     depreciation deduction for automobiles costing less than 
     $25,000, which will continue to be indexed for inflation.
     Simplification of Estimated Tax Rules
       The bill simplifies the current rules for calculating the 
     level of estimated taxes necessary to avoid the interest 
     penalty for underpayment of estimated taxes. Currently, small 
     business owners can avoid the interest penalty if they pay 
     estimated taxes equal to at least 90 percent of their tax 
     liability for the current year. Alternatively, for taxable 
     year 2001, small business owners who earned more than 
     $150,000 in taxable year 2000 can avoid the interest penalty 
     if they pay estimated taxes equal to 112 percent of their 
     2000 tax liability. For taxable years 2002 and beyond, the 
     threshold will be 110 percent. In contrast, taxpayers earning 
     $150,000 or less, can avoid the penalty by paying estimated 
     taxes equal to 100 percent of their prior year's tax 
     liability.
       The bill simplifies the estimated-tax rules by providing a 
     consistent test for avoiding the interest penalty: taxpayers 
     must deposit estimated taxes equal to 90 percent of the 
     current year's or 100 percent of the prior year's tax 
     liability. This change will eliminate complex calculations 
     currently required of small business owners and ease strains 
     on the business' cashflow. These changes will be effective 
     for tax years beginning after the date of enactment.
     Exemption from Partnership Rules for Sole Proprietorships 
         Jointly Owned by Spouses
       The Internal Revenue Service (IRS) National Taxpayer 
     Advocate's Annual Report to Congress for 2001 identified a 
     problem facing married couples operating a small business. 
     Although these couples file a joint tax return, they are 
     currently required to comply with the onerous partnership 
     rules instead of being permitted to treat the business as a 
     sole proprietorship. According to IRS estimates, the 
     additional burden of the partnership rules can add more than 
     200 hours to the time required to prepare the business' tax 
     return than would be necessary if it were treated as a sole 
     proprietorship.
       The bill amends section 761 of the Internal Revenue Code to 
     permit married couples who file joint tax returns to opt out 
     of the partnership rules and treat their jointly owned 
     business as a sole proprietorship. It also amends the self-
     employment tax rules to allow such married couples to receive 
     Social Security credits on an individual basis, which they 
     currently receive when filing a partnership return.


             Title III--Small Business Taxpayer Protections

     Taxpayer's right to have an IRS examination take place at 
         another site
       The bill provides that the IRS must accept a taxpayer's 
     request that an audit be moved away from his or her home or 
     business premises if the off-site location (e.g., an 
     accountant's office) is accessible to the auditor and the 
     taxpayer's books and records are available at such a 
     location. This provision will enable the IRS to conduct an 
     audit but without the fear and disruption resulting from the 
     auditor being present in a family home and among a business' 
     employees and customers for days or weeks.
     Clarification that Electronic Filing is a Goal, not a Mandate
       The bill amends the IRS Restructuring and Reform Act of 
     1998 (Public Law 105-206) to clarify that the IRS should set 
     as a goal, but not a mandate, that paperless filing should be 
     the preferred and most convenient means of filing tax and 
     information returns in 80 percent of cases by the year 2007. 
     Concerns have been raised that in order to reach this goal, 
     the IRS may have to require certain taxpayers to file 
     electronically. The bill makes clear that electronic filing 
     should be a voluntary option for taxpayers, not a new 
     government mandate.
     Taxpayer's election with respect to recovery of costs and 
         certain fees
       Under the Internal Revenue Code, a taxpayer may recover 
     costs and fees, including attorney's fees, against the IRS if 
     he or she prevails and the IRS' litigation position was not 
     substantially justified. The Equal Access to Justice Act 
     (EAJA) permits a small business to recover such costs when an 
     unreasonable agency demand for fines or civil penalties is 
     not sustained in court or in an administrative proceeding. In 
     addition, a small business may also recover such costs and 
     fees under the EAJA when it is the prevailing party and the 
     agency enforcement action is not substantially justified. 
     Currently, the EAJA prohibits a taxpayer seeking to recover 
     costs and fees in an IRS enforcement action from doing so 
     under the EAJA if the fees and costs can be recovered under 
     the Internal Revenue Code.
       The bill permits taxpayers to elect whether to pursue 
     recovery of attorney's fees and expenses under the EAJA or 
     the Internal Revenue Code.
     Repeal of the failure-to-pay penalty
       The failure-to-pay penalty was originally enacted in the 
     1960s to compensate for the low rate of interest applied to 
     an individual's tax liability, and for the fact that such 
     interest was not compounded. Today, with interest compounded 
     daily and adjusted for changes in the interest rate, this 
     penalty is no longer needed and serves only as another 
     hidden, second penalty. In addition, this penalty is often 
     applied on top of accuracy-related penalties, resulting in 
     total punishment of as much as 45 percent in non-criminal 
     cases. To simplify the tax rules and reduce the multiplicity 
     of punishment on taxpayers, the bill repeals the failure-to-
     pay penalty.
     Limit Compounded Interest to Underlying Tax
       Under current law, when a taxpayer fails to pay the correct 
     amount of taxes, interest is applied and compounded not only 
     on the underlying tax liability, but also on any penalties 
     assessed. As a result, compound interest becomes an 
     additional penalty. In many cases the interest on penalties 
     can substantially increase the total amount of tax due and 
     jeopardize the small business taxpayer's ability to pay its 
     tax debt. In addition, calculating the interest on penalties 
     adds an additional layer of complexity and compliance costs 
     for small businesses. The bill alleviates this situation by 
     limiting the application of interest to only the underlying 
     tax assessment.
                                  ____

                                                    Small Business


                                          Legislative Council,

                                 Washington, DC, January 22, 2001.
     Hon. Kit Bond,
     Chairman, Committee on Small Business, U.S. Senate, 
         Washington, DC.
       Dear Mr. Chairman: First, let me take the opportunity on 
     behalf of SBLC, to thank you for your tireless efforts on 
     behalf of small business. I have no doubt that in future 
     Congresses we will be holding up your stewardship of the 
     Small Business Committee as the model for future chairs.
       My primary reason in writing is to offer our unqualified 
     support for your initiative to bring fairness and 
     simplification to the current tax system. As you know, 
     perhaps better than anyone in Congress, the current tax code 
     remains a minefield of problems for small business. Your 
     legislation is a comprehensive blueprint for how to sweep it 
     clean.
       While we endorse all of your initiatives, I do want to take 
     the opportunity to single out four items.
       We are absolutely convinced settling the issue of whether 
     small businesses can use cash accounting is not only a matter 
     of fairness, but that it will also significantly simplify 
     small business compliance. We have had a hard time 
     understanding why the IRS has been so intent on chasing the 
     opportunity to collect a few tax dollars just a little 
     sooner. Using cash accounting is not about tax avoidance. The 
     costs to small business productivity must surely outweigh the 
     time value of revenue to the government.
       SBLC was one of the original champions of the concept of 
     direct expensing. We wholeheartedly endorse your efforts to 
     ``modernize'' the concept. The amount needs to be increased. 
     The other important reason to address cost recovery is that 
     our depreciation system is no longer in sync with the pace of 
     technology obsolescence.
       One of the ticking time bombs of the tax code is the 
     personal Alternative Minimum Tax (AMT). We believe in the 
     near future it may do more harm to small business than any 
     other provision of the tax code. It swallows up any profits 
     that can be reinvested in the business.
       Finally, Section 280F of the tax code and regulations 
     thereunder, reflect a different time and different philosophy 
     with respect to business vehicles. It is time to move the 
     clock ahead two decades and simplify the process of dealing 
     with this provision.
       We look forward, as always, to working with you on behalf 
     of small business.
       As you know, the SBLC is a permanent, independent coalition 
     of 80 trade and professional associations that share a common 
     commitment to the future of small business. Our members 
     represent the interests of small businesses in such diverse 
     economic sectors as manufacturing, retailing, distribution, 
     professional and technical services, construction, 
     transportation, tourism and agriculture. Our policies are 
     developed through a consensus among our membership. 
     Individual associations may express their own views. For your 
     information, a list of our members is enclosed.
           Sincerely,
                                                  John S. Satagaj,
                                    President and General Counsel.

           Members of the Small Business Legislative Council

     ACIL
     Air Conditioning Contractors of America
     Alliance of Independent Store Owners and Professionals
     Alliance of Affordable Services
     American Association of Equine Practitioners
     American Bus Association
     American Consulting Engineers Council
     American Machine Tool Distributors Association
     American Moving and Storage Association
     American Nursery and Landscape Association
     American Road & Transportation Builders Association
     American Society of Interior Designers
     American Society of Travel Agents, Inc.
     American Subcontractors Association
     Associated Landscape Contractors of America
     Association of Small Business Development Centers

[[Page S581]]

     Association of Sales and Marketing Companies
     Automotive Recyclers Association
     Bowling Proprietors Association of America
     Building Service Contractors Association International
     Business Advertising Council
     CBA
     Council of Fleet Specialists
     Council of Growing Companies
     Cremation Association of North America
     Direct Selling Association
     Electronics Representatives Association
     Health Industry Representatives Association
     Helicopter Association International
     Independent Bankers Association of America
     Independent Medical Distributors Association
     International Association of Refrigerated Warehouses
     International Franchise Association
     Machinery Dealers National Association
     Mail Advertising Service Association
     Manufacturers Agents for the Food Service Industry
     Manufacturers Agents National Association
     Manufacturers Representatives of America, Inc.
     National Association for the Self-Employed
     National Association of Plumbing-Heating-Cooling Contractors
     National Association of Realtors
     National Association of RV Parks and Campgrounds
     National Association of Small Business Investment Companies
     National Association of the Remodeling Industry
     National Community Pharmacists Association
     National Electrical Contractors Association
     National Electrical Manufacturers Representatives Association
     National Lumber & Building Material Dealers Association
     National Ornamental & Miscellaneous Metals Association
     National Paperbox Association
     National Retail Hardware Association
     National Society of Accountants
     National Tooling and Machining Association
     National Wood Flooring Association
     Organization for the Promotion and Advancement of Small 
         Telephone Companies
     Painting and Decorating Contractors of America
     Petroleum Marketers Association of America
     Printing Industries of America, Inc.
     Professional Lawn Care Association of America
     Promotional Products Association International
     The Retailer's Bakery Association
     Saturation Mailers Coalition
     Small Business Council of America, Inc.
     Small Business Exporters Association
     Small Business Exporters Association
     SMC Business Councils
     Society of American Florists
     Tire Association of North America
     Turfgrass Producers International
     United Motorcoach Association
     Washington Area New Automotive Dealers Association
                                  ____

                                            National Federation of


                                         Independent Business,

                                 Washington, DC, January 24, 2001.
     Hon. Kit Bond,
     Chairman, Senate Small Business Committee, Washington, DC.
       Dear Chairman Bond: On behalf of the 600,000 members of the 
     National Federation of Independent Business (NFIB), I want to 
     express our strong support for the ``Small Business Works Act 
     of 2001'' which would provide badly needed tax relief to 
     America's small business. NFIB urges the Senate to quickly 
     support its adoption.
       While economic conditions for small business remain 
     relatively strong, economic activity has cooled over the past 
     few months. According to NFIB's monthly Small Business 
     Economic Trends (SBET) index, confidence in the economy is 
     approximately half as strong as it was a year ago. Over the 
     coming months, it appears likely that the problem of the 
     slowing economy will only continue.
       Small businesses are forced by Washington to spend an 
     overwhelming amount of time, money, and energy complying with 
     the tax and regulatory burdens. With the economy showing 
     signs of slowing, tax relief will significantly help spur 
     immediate economic recovery for America's small businesses.
       Your bill goes a long way towards providing America's small 
     business owners valuable tax relief.
       Cash vs. Accrual Accounting--Clarifying the IRS code to 
     state clearly that small business owners with gross revenues 
     below $5 million are eligible to use cash accounting methods 
     would save small business owners from spending valuable 
     resources on high-priced tax accountants and lawyers.
       Accelerate 100% Self-Employed Health Insurance Deduction--
     Currently, self-employed workers can only deduct 60% of their 
     health-insurance costs from their taxable income. Raising 
     that threshold to 100% in 2001 would cut health-care costs 
     for the typical small-business owner by hundreds of dollars 
     per year.
       Increase Section 179 Expensing--A majority of NFIB members 
     exceed the current small-business expensing limits in only 
     three months. The limit for 2001 is only $24,000. Raising the 
     threshold to $50,000 and indexing it with inflation will 
     allow additional investments in the business to be expensed 
     thus helping small businesses expand and create new jobs. 
     This provision lowers the cost of capital for tangible 
     property and eliminates depreciation record-keeping 
     requirements. Updating our tax code to reflect the reality of 
     today's technology-based workplace is critical to the 
     continued success of our economy and to the daily advancement 
     of small business in America. Allowing small business to 
     depreciate software assets while they are still useful and 
     efficient technologies is critical to future technological 
     development in the job producing engines of our economy. This 
     change would provide small business owners the opportunity to 
     compete in today's high technology markets.
       Increase Deduction for Business Meals--For many self-
     employed and small business owners, discussing business over 
     lunch is an efficient use of time and an absolute necessity 
     when courting new clients. Increasing the deductibility 
     reduces a large and disproportionate tax on small-business 
     owners who rely on mealtime to conduct business.
       Federal Unemployment Insurance Surtax Repeal--The .2% 
     surtax was adopted in 1976 to repay loans to the federal 
     unemployment fund during the 1974 recession. This debt was 
     fully repaid in 1987. This so-called temporary surtax has 
     long outlived its original purpose and is now used to pay for 
     government programs totally unrelated to the unemployment 
     compensation system.
       AMT Relief and Repeal--According to the Joint Committee on 
     Taxation, fewer than 1 in 150 taxpayers is subjected to the 
     AMT today. By 2007, however, that number if expected to grow 
     to 1 in 14, with the largest increase coming from taxpayers 
     earning between $50,000 and $100,000. The individual AMT is a 
     remarkably complex and obtuse provision in a tax code not 
     known for its clarity. It literally requires taxpayers to 
     calculate their taxes twice, and then pay the larger amount. 
     While originally designed to ensure that wealthy Americans 
     pay a reasonable level of their income in taxes, the AMT has 
     the side effect of hitting taxpayers--increasingly middle-
     class taxpayers--when they can least afford the bill. The AMT 
     literally kicks taxpayers when they are down. NFIB supports 
     abolishing the individual Alternative Minimum Tax. NFIB also 
     supports your efforts to increase the exemption for small 
     businesses from the heavily burdensome corporate AMT.
       Mr. Chairman, we applaud your proactive efforts to reduce 
     the tax burden on small business. We thank you for your 
     continued support of small businesses, and we look forward to 
     working with you to see the ``Small Business Works Act of 
     2001'' enacted into law.
           Sincerely,

                                                   Dan Danner,

                                            Senior Vice President,
                                            Federal Public Policy.
                                 ______
                                 
      By Mr. FEINGOLD:
  S. 191. A bill to abolish the death penalty under Federal Law; to the 
Committee on the Judiciary.
  Mr. FEINGOLD. Mr. President, I rise today to introduce the Federal 
Death Penalty Abolition Act of 2001. This bill will abolish the death 
penalty at the Federal level. It will put an immediate halt to 
executions and forbid the imposition of the death penalty as a sentence 
for violations of Federal law.
  The most recent Gallup poll shows that, while a majority of Americans 
continue to support capital punishment, this support has reached a 
nearly 20-year low. This diminished support comes amid rising concern 
that the system by which we impose the sentence of death is seriously 
flawed. In the last year or so since I first introduced this bill, the 
American people have learned about the risk of executing innocent 
people and other fairness and reliability concerns with the 
administration of the death penalty. I am confident that in the weeks 
and months to come, the American people will continue to learn and 
continue to question the fairness of our death penalty system.
  In recent years, this Chamber has echoed with debate on violence in 
America. We've heard about violence in our schools and neighborhoods. 
Some say it's because of the availability of guns to minors. Some say 
Hollywood has contributed to a culture of violence. Others argue that 
the roots of the problem are far deeper and more complex. Whatever the 
causes, a culture of violence has certainly infected our nation. As 
schoolhouse killings have shown, our children are now reached by that 
culture of violence, not merely as casual observers, but as 
participants and victims.
  But, I'm not so sure that we in government don't contribute to this 
casual attitude we sometimes see toward killing and death. With each 
new death penalty statute enacted and each execution carried out, our 
executive, judicial and legislative branches, at both the state and 
federal level, add to a culture of violence and killing. With each 
person executed, we're teaching

[[Page S582]]

our children that the way to settle scores is through violence, even to 
the point of taking a human life. Sadly, total executions in the last 
two years--98 in 1999 and 85 in 2000--mark the highest number of total 
annual executions since the death penalty was reinstated in 1976.
  At the same time, I am pleased that the public debate on the death 
penalty, which was an intense national debate not very long ago, 
appears to have been revived. In the wake of recent controversies 
involving DNA technology and the discovery of condemned innocents, we 
are once again having a national debate on this important issue of 
justice. Those who favor the death penalty should be pressed to explain 
why fallible human beings should presume to use the power of the state 
to extinguished the life of a fellow human being on our collective 
behalf. Those who oppose the death penalty should demand that 
explanation adamantly, and at every turn. But only a zealous few try.
  Our Nation is a great Nation. We have the strongest democracy in the 
world. We have expended blood and treasure to protect so many 
fundamental human rights at home and abroad and not always for only our 
own interests. But we can do better. We should do better. Courtesy of 
the Internet and CNN International, the world observes, perplexed and 
sometimes horrified, the violence in our nation. Across the globe, with 
every American who is executed, the entire world watches and asks how 
can the Americans, the champions of human rights, compromise their own 
professed beliefs in this way.
  Religious groups and leaders express their revulsion at the continued 
practice of capital punishment. Pope John Paul II frequently appeals to 
American governors when a death row inmate is about to die. I am 
pleased that in one case in January 1999, involving an inmate on death 
row in Missouri, the late Missouri Governor Mel Carnahan heeded the 
good advice of the pontiff and commuted the killer's sentence to life 
without parole. That case generated a lot of press--but only as a 
political issue, rather than a moral question or a human rights 
challenge.
  But the Pope is not standing alone against the death penalty. He is 
joined by the chorus of voices of various people of faith who abhor the 
death penalty. Religious groups from the National Conference of 
Catholic Bishops, the United Methodist Church, the Presbyterian Church, 
the Evangelical Lutheran Church in America, the Mennonites, the Central 
Conference of American Rabbis, and so many more people of faith have 
proclaimed their opposition to capital punishment. And, I might add, 
even conservative Pat Robertson protested the execution in 1998 of 
Karla Faye Tucker, a born-again Christian on Texas death row. Mr. 
President, I would like to see the commutation of sentences to life 
without parole for all death row inmates--whether they are Christians, 
Muslims, Jews, Buddhists, or some other faith, or no faith at all.
  The United States' imposition of capital punishment is abhorrent not 
only to people of faith. Our use of the death penalty also stands in 
stark contrast to the majority of nations that have abolished the death 
penalty in law or practice. Even South Africa and Russia--nations that 
for years were violators of basic human rights and liberties--have 
abolished the death penalty or are moving toward abolition of the death 
penalty, respectively. The United Nations Commission on Human Rights 
has called for a worldwide moratorium on the use of the death penalty. 
The European Union denies membership in the alliance to those nations 
that use the death penalty. In fact, it passed a resolution calling for 
the immediate and unconditional global abolition of the death penalty, 
and it specifically called on all states within the United States to 
abolish the death penalty. This is significant because it reflects the 
unanimous view of the nations with which the United States enjoys its 
closet relationships--nations that so often follow our lead.

  What is even more troubling in the international context is that the 
United States is now one of only six countries that imposes the death 
penalty for crimes committed by children. I'll repeat that because it 
is remarkable. We are one of only six nations on this earth that puts 
to death people who were under 18 years of age when they committed 
their crimes. The others are Iran, Pakistan, Nigeria, Saudi Arabia and 
Yemen. These are countries that are often criticized for human rights 
abuses. When will we rectify this clear human rights violation--the 
execution of people who were not even adults when they committed the 
crimes for which they were sentenced to die?
  Let's look at the numbers. Since 1990, the United States has executed 
14 child offenders. That's more than all of the five aforementioned 
nations combined. In 2000, the rest of the world watched as the United 
States not only executed four juvenile offenders, but was the only 
nation to engage in such an egregious practice at all. Even China--the 
country that many members of Congress, including myself, have 
criticized for its human rights abuses--apparently has the decency not 
to execute its children. This is embarrassing. Is this the kind of 
company we want to keep? Is this the kind of world leader we want to 
be? But these are the facts, from the last decade of the 20th century 
to the present. No one, Mr. President, no one can reasonably argue that 
based on this data, executing child offenders is a normal or acceptable 
practice in the world community. And I don't think we should be proud 
of the fact that the United States is the world leader in the execution 
of child offenders.
  Is the death penalty a deterrent for our children's conduct, as well 
as that of adult Americans? The numbers prove that those who believe 
that capital punishment is an effective deterrent are sadly, sadly 
mistaken. The Federal Government and most States in the U.S. have a 
death penalty, while our European counterparts do not. Following the 
logic of death penalty supporters who believe it is a deterrent, you 
would think that our European allies, who don't use the death penalty, 
would have a higher murder rate than the United States. Yet, they don't 
and it's not even close. In fact, the murder rate in the U.S. is six 
times higher than the murder rate in Britain, seven times higher than 
in France, and five times higher than in Sweden.
  But we don't even need to look across the Atlantic to see that 
capital punishment has no deterrent effect on crime. The geographical 
disparities within the United States lead to the same conclusion. Let's 
compare Wisconsin and Texas. I'm proud of the fact that in 1853, my 
home state of Wisconsin became the first state in the nation to abolish 
the death penalty completely. Wisconsin has been death penalty-free for 
nearly 150 years. In contrast, Texas is the most prodigious user of the 
death penalty, having executed 241 people since 1976. Let's look at the 
murder rate in Wisconsin and Texas. During the period 1995 to 1998, 
Texas has had a murder rate that is nearly double the murder rate in 
Wisconsin. The same trend can also be detected on a regional scale. The 
Southern region of the United States has a higher murder rate than any 
other region. Yet, executions taking place in that region constituted 
almost 90 percent of executions in the nation as a whole. These and 
countless other data continue to call into question the argument that 
the death penalty is a deterrent to murder.
  In fact, according to a 1995 Hart Research poll, the majority of our 
nation's police chiefs do not believe the death penalty is a 
particularly effective law enforcement tool. When asked to rank the 
various factors in reducing crime, police chiefs rank the death penalty 
last. Rather, the police chiefs--the people who deal with hardened 
criminals day in and day out--cite reducing drug abuse as the primary 
factor in reducing crime, along with a better economy and jobs, 
simplifying court rules, longer prison sentences, more police officers, 
and reducing guns. It looks like most police chiefs recognize what our 
European allies and a few states like Wisconsin have known all along; 
the death penalty is not an effective deterrent.
  Let me be clear. I believe murderers and other violent offenders 
should be severely punished. I'm not seeking to open the prison doors 
and let murderers come rushing out into our communities. I don't want 
to free them. The question is: should the death penalty be a means of 
punishment in our

[[Page S583]]

society? One of the most frequent refrains from death penalty 
supporters is the claim that the majority of Americans support the 
death penalty. But Mr. President, an August 2000 Gallup poll shows that 
while 67 percent of Americans support the death penalty, only 28 
percent do so without reservations. In contrast, 37 percent support the 
death penalty with reservations and 26 percent of Americans do not 
support the death penalty at all.

  Furthermore, surveys show that when sentencing alternatives are 
offered, support for the death penalty drops to below 50 percent. And a 
plurality of Americans prefer life without parole plus restitution for 
the victim's family to the death penalty. According to a 1993 national 
poll, 44 percent of Americans supported the alternative of life without 
parole plus restitution. Only 41 percent preferred the death penalty 
and 15 percent were unsure. This is remarkable. Sure, if you ask 
Americans the simple, isolated question of whether they support the 
death penalty, a majority of Americans will agree. But if you ask them 
whether they support the death penalty or a realistic, practical 
alternative sentence like life without parole plus restitution, support 
for the death penalty falls dramatically to below 50 percent. More 
Americans support the alternative sentence than the death penalty.
  The fact that our society relies on killing as punishment is 
disturbing enough. Even more disturbing, however, is the fact that the 
States' and federal use of the death penalty is often not consistent 
with principles of due process, fairness and justice. These principles 
are the foundation of our criminal justice system and, in a broader 
sense, the stability of our nation. It is clearer than ever before that 
we have put innocent people on death row. In addition, statistics show 
that those States that have the death penalty are more likely to put 
people to death for killing white victims than for killing black 
victims.
  Are we certain that innocent persons are not being executed? 
Obviously not. Are we certain that racial bias is not infecting the 
criminal justice system and the administration of the death penalty? I 
doubt it.
  It simply cannot be disputed that we are sending innocent people to 
death. Since the modern death penalty was reinstated in the 1970s, we 
have released 93 men and women in 22 states from death row. Why? 
Because they were innocent. Ninety-three men and women sitting on death 
row, awaiting a firing squad, lethal injection or electrocution, but 
later found innocent. That's one death row inmate found innocent for 
every seven executed. One in seven! That's a pretty poor performance 
for American justice. A wrongful conviction means that the real killer 
may have gotten away. What an injustice that the victims' loved ones 
cannot rest because the killer is still not caught. What an injustice 
that an innocent man or woman has to spend even one day in jail. What a 
staggering injustice that innocent people are sentenced to death for 
crimes they did not commit. What a disgrace when we carry out those 
sentences, actually taking the lives of innocent people in the name of 
justice.
  I call my colleagues' attention to the recent example of an Illinois 
death row inmate, Anthony Porter, who was freed in 1999 after 16 years 
of his life were wasted awaiting execution for a crime he did not 
commit. Mr. Porter came within two days of execution when his life was 
spared only because of questions regarding his mental competency. Mr. 
Porter owes his freedom, as some previous Illinois death row inmates 
do, to investigation by Northwestern University journalism students. 
They persuaded the true killer to confess on videotape. A statement by 
the true killer's estranged wife that Chicago police pressured her into 
testifying against Porter further represents the level of unreliability 
and failures in the administration of the death penalty surrounding 
this case. College students were able to successfully spare the lives 
of innocent men. Men were freed from death row not because of 
technicalities, but because they were truly innocent. Mr. President, it 
is clear that our criminal justice system is sometimes far from just 
and sometimes just plain wrong.
  One is left with the inescapable conclusion that even if it is not 
absolutely certain, it is very possible that innocent people have been 
executed. Why? We can all agree that it is profoundly wrong to convict 
and condemn innocent people to death. But sadly, that's what's 
happening. With the greater accuracy and sophistication of DNA testing 
available today compared to even a couple of years ago, states like 
Illinois are finding that people sitting on death row did not commit 
the crimes to which earlier, less accurate DNA tests appeared to link 
them. This DNA technology should be further reviewed and compared to 
other tests. We should make sure that the most sophisticated, modern 
DNA tests are made available to those on death row.
  Some argue that the discovery of the innocence of a death row inmate 
proves that the system works. This is absurd. How can you say the 
criminal justice system works when a group of students--not lawyers or 
investigators but students with no special powers, who were very much 
outside the system--discover that a man about to be executed was, in 
fact, innocent? A recent NBC News/Wall Street Journal Poll shows that 
63 percent of Americans favor suspending capital punishment until 
fairness questions can be adequately studied. Americans recognize the 
failures of our justice system and are demanding answers.
  A primary reason why our justice system has sometimes been less than 
just is a series of U.S. Supreme Court decisions that seem to fail to 
grasp the significance and responsibility of their task when a human 
life is at stake. The Supreme Court has been narrowly focused on 
procedural technicalities, ignoring the fact that the death penalty is 
a unique punishment that cannot be undone to correct mistakes. In Jones 
v. United States, which involved an inmate on death row in Texas and 
the interpretation of the 1994 Federal Death Penalty Act, the judge 
refused to tell the jury that if they deadlocked on the sentence, the 
law required the judge to impose a sentence of life without possibility 
of parole. As a result, some jurors were under the grave 
misunderstanding that lack of unanimity would mean the judge could give 
a sentence where the defendant might one day go free. The jurors 
therefore returned a sentence of death. The Supreme Court upheld the 
lower court's imposition of the death penalty. And one more person will 
lose a life, when a simple correction of a misunderstanding could have 
resulted in a severe, yet morally correct, sentence of life without 
parole.

  As legal scholar Ronald Dworkin recently observed, ``[t]he Supreme 
Court has become impatient, and super due process has turned into due 
process-lite. Its impatience is understandable, but is also 
unacceptable.'' Mr. President, America's impatience with the protracted 
appeals of death row inmates is understandable. But this impatience is 
unacceptable. The ruse to judgment is unacceptable. And the rush to 
execute men, women and children who might well be innocent is 
horrifying.
  The discovery of the innocence of death row inmates and misguided 
Supreme Court decisions disallowing potentially dispositive and/or 
exculpatory evidence, however, aren't the only reasons we need to 
abolish the death penalty. Another reason we need to abolish the death 
penalty is the continuing evidence of racial bias in our criminal 
justice system. Our nation is facing a crucial test. A test of moral 
and political will. We have come a long way through this nation's 
history, and especially in this century, to dismantle state-sponsored 
and societal racism. Brown v. Board of Education, ensuring the right to 
equal educational opportunities for whites and blacks, was decided 
almost half a century ago. Unfortunately, however, we are still living 
with vestiges of institutional racism. In some cases, racism can be 
found at every stage of a capital trial--in the selection of jurors, 
during the presentation of evidence, when the prosecutor contrasts the 
race of the victim and defendant to appeal to the prejudice of the 
jury, and sometimes during jury deliberations.
  After the 1976 Supreme Court Gregg decision upholding the use of the 
death penalty, the death penalty was first enacted as a sentence at the 
federal level with passage of the Drug Kingpin Statute in 1988. Since 
that time, numerous additional Federal crimes have become

[[Page S584]]

death penalty-eligible, bringing the total to about 60 federal crimes 
today. At the federal level, 20 people currently sit on death row. 
Another seven men sit on the military's death row. Of those 2 
defendants on the federal government's death row, 14 are black and only 
4 are white. One defendant is Hispanic and another Asian. That means 16 
of the 20 people on federal death row are members of a racial or ethnic 
minority. That's 80 percent. And the numbers are worse on the 
military's death row. Six of the seven, or 86 percent, on military 
death row are minorities.
  Some of my colleagues may remember the debates of the late 1980's and 
early 1990's, when Congress considered the Racial Justice Act and other 
attempts to eradicate racial bias in the administration of capital 
punishment. A noted study evaluating the role of race in death penalty 
cases was frequently discussed. This was the study by David Baldus, a 
professor at the University of Iowa College of Law. The Baldus study 
found that defendants who kill white victims are more than four times 
more likely to be sent to death row than defendants who kill black 
victims. An argument against the Baldus study was made by some 
opponents of the Racial Justice Act. They argued that we just needed to 
``level up'' the playing field. In other words, send all the defendants 
who killed black victims to death row, too. They argued that 
legislative remedies were not needed, just tell prosecutors and judges 
to go after perpetrators of black homicide as strong as against 
perpetrators of white homicide. I believe such arguments displayed a 
shocking insensitivity to racial bias in our criminal justice system.
  Problems with bias and arbitrariness have not escaped the federal 
death penalty system. In September 2000, the Department of Justice 
released a report on the federal death penalty system. That report that 
whether one will live or die in the federal system appears to be 
related to the color of one's skin or the federal district in which the 
prosecution takes place. I think we can all agree that the report is 
deeply disturbing. There is a glaring lack of uniformity in the 
application of the federal death penalty. Why do these disparities 
exist? How can they be addressed? The Justice Department report doesn't 
have answers to these and other questions. I am pleased that Attorney 
General Janet Reno initiated additional, internal reviews, and it is my 
fervent hope that the next Attorney General will follow through on this 
important further study and analysis.
  One thing is clear: no matter how hard we try, we cannot overcome the 
inevitable fallibility of being human. That fallibility means that we 
will be unable to apply the death penalty in a fair and just manner. 
The risk that we will condemn innocent people to death will always 
lurk. Mr. President, let's restore some certainty, fairness, and 
justice to our criminal justice system. Let's have the courage to 
recognize human fallibility.

  The American Bar Association has also raised fairness and due process 
concerns. In 1997, the American Bar Association became the first 
organization to call for a moratorium on the death penalty. Several 
states are finally beginning to recognize the great injustice when the 
ultimate punishment is carried out in a biased and unfair way. In 
January 2000, Governor George Ryan became the first chief executive to 
place a moratorium on executions. Moratorium bills have been considered 
by the legislatures of at least ten states over the last two years.
  I am glad to see that some states are finally taking steps to correct 
the practice of legalized killing that was again unleashed by the 
Supreme Court's Gregg decision in 1976. The first post-Gregg execution 
took place in 1977 in Utah, when Gary Gilmore did not challenge and 
instead aggressively sought his execution by a firing squad. The first 
post-Gregg involuntary execution took place on May 25, 1979. I vividly 
remember that day. I had just finished my last law school exam that 
morning. Later that day, I recall turning on the television and 
watching the news report that Florida had just executed John 
Spenkelink. I was overcome with a sickening feeling. Here I was, fresh 
out of law school and firm in my belief that our legal system was 
advancing through the latter quarter of the twentieth century. Instead, 
to my great dismay, I was witnessing a throwback to the electric chair, 
the gallows, and the routine executions of our Nation's earlier 
history.
  I haven't forgotten that experience or what I thought and felt on 
that day. At the beginning of 2001, at the end of a remarkable century 
and millennium of progress and at the beginning of a new century and 
millennium with hopes for even greater progress, I cannot help but 
believe that our progress has been tarnished by our Nation's not only 
continuing, but increasing use of the death penalty. As of today, the 
United States has executed 690 people since the reinstatement of the 
death penalty in 1976. This is astounding and it is embarrassing. We 
are a Nation that prides itself on the fundamental principles of 
justice, liberty, equality and due process. We are a Nation that 
scrutinizes the human rights records of other nations. We are one of 
the first nations to speak out against torture and killings by foreign 
governments. It is time for us to look in the mirror.
  Two former Supreme Court justices did just that. Justice Harry 
Blackmun penned the following eloquent dissent in 1994:

       From this day forward, I no longer shall tinker with the 
     machinery of death. For more than 20 years I have 
     endeavored--indeed, I have struggled--along with a majority 
     of this Court, to develop procedural and substantive rules 
     that would lend more than the mere appearance of fairness to 
     the death penalty endeavor. Rather than continue to coddle 
     the Court's delusion that the desired level of fairness has 
     been achieved and the need for regulation eviscerated, I feel 
     morally and intellectually obligated simply to concede that 
     the death penalty experiment has failed. It is virtually 
     self-evident to me now that no combination of procedural 
     rules or substantive regulations ever can save the death 
     penalty from its inherent constitutional deficiencies. The 
     basic question--does the system accurately and consistently 
     determine which defendants ``deserve'' to die?--cannot be 
     answered in the affirmative. . . . The problem is that the 
     inevitability of factual, legal, and moral error gives us a 
     system that we know must wrongly kill some defendants, a 
     system that fails to deliver the fair, consistent, and 
     reliable sentences of death required by the Constitution.

  Justice Lewis Powell also had a similar change of mind. Justice 
Powell dissented from the Furman decision in 1972, which struck down 
the death penalty as a form of cruel and unusual punishment. He also 
wrote the decision in McCleskey v. Kemp in 1987, which denied a 
challenge to the death penalty on the grounds that it was applied in a 
discriminatory manner against African Americans. In 1991, however, 
Justice Powell told his biographer that he had decided that capital 
punishment should be abolished.
  After sitting on our Nation's highest court for over 20 years, 
Justices Blackmun and Powell came to understand the randomness and 
unfairness of the death penalty. Mr. President, it is time for our 
Nation to follow the lead of these two distinguished jurists and re-
visit its support for this form of punishment.
  At the beginning of 2001, as we enter a new millennium, our society 
is still far from fully just. The continued use of the death demenas 
us. The penalty is at odds with our best traditions. It is wrong and it 
is immoral. The adage ``two wrongs do not make a right,'' could not be 
more appropriate here. Our Nation has long ago done away with other 
barbaric punishments like whipping and cutting off the ears of 
suspected criminals. Just as our nation did away with these punishments 
as contrary to our humanity and ideals, it is time to abolish the death 
penalty as we enter the next century. And it's not just a matter of 
morality. The continued viability of our justice system as a truly just 
system requires that we do so. And in the world's eyes, the ability of 
our nation to say truthfully that we are the leader and defender of 
freedom, liberty and equality demands that we do so.

  I close with the following remarks from Aundre Herron, an attorney 
who was recently honored in California for her outstanding service in 
defense of those charged with capital crimes:

       .  .  . [T]he death penalty is America's dark underbelly--
     the worst of America--the part we seek desperately to hide 
     from public view. . . . It is here--in the worst of America--
     that the death penalty finds its truest and most sinister 
     meaning--the death penalty is where all the contradictions 
     converge. It is this country's way of destroying the evidence 
     of its failures, its hypocrisy, its shame. It is the last 
     relic of America's worst

[[Page S585]]

     legacies--slavery, segregation, lynching, racism, classism 
     and violence.

  Abolishing the death penalty will not be an easy task. It will take 
patience, persistence and courage. As we head to a new millennium, let 
us leave this archaic practice behind.
  I ask my colleagues to join me in taking the first step in abolishing 
the death penalty in our great nation. I also call on each state that 
authorizes the use of the death penalty to cease this practice. Let us 
step away from the culture of violence and restore fairness and 
integrity to our criminal justice system.
  I ask that the text of the bill be printed in the Record following my 
remarks.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 191

       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 ``Federal Death Penalty 
     Abolition Act of 2001''.

     SEC. 2. REPEAL OF FEDERAL LAWS PROVIDING FOR THE DEATH 
                   PENALTY.

       (a) Homicide-Related Offenses.--
       (1) Murder related to the smuggling of aliens.--Section 
     274(a)(1)(B)(iv) of the Immigration and Nationality Act (8 
     U.S.C. 1324(a)(1)(B)(iv)) is amended by striking ``punished 
     by death or''.
       (2) Destruction of aircraft, motor vehicles, or related 
     facilities resulting in death.--Section 34 of title 18, 
     United States Code, is amended by striking ``to the death 
     penalty or''.
       (3) Murder committed during a drug-related drive-by 
     shooting.--Section 36(b)(2)(A) of title 18, United States 
     Code, is amended by striking ``death or''.
       (4) Murder committed at an airport serving international 
     civil aviation.--Section 37(a) of title 18, United States 
     Code, is amended, in the matter following paragraph (2), by 
     striking ``punished by death or''.
       (5) Civil rights offenses resulting in death.--Chapter 13 
     of title 18, United States Code, is amended--
       (A) in section 241, by striking ``, or may be sentenced to 
     death'';
       (B) in section 242, by striking ``, or may be sentenced to 
     death'';
       (C) in section 245(b), by striking ``, or may be sentenced 
     to death''; and
       (D) in section 247(d)(1), by striking ``, or may be 
     sentenced to death''.
       (6) Murder of a member of congress, an important executive 
     official, or a supreme court justice.--Section 351 of title 
     18, United States Code, is amended--
       (A) in subsection (b)(2), by striking ``death or''; and
       (B) in subsection (d)(2), by striking ``death or''.
       (7) Death resulting from offenses involving transportation 
     of explosives, destruction of government property, or 
     destruction of property related to foreign or interstate 
     commerce.--Section 844 of title 18, United States Code, is 
     amended--
       (A) in subsection (d), by striking ``or to the death 
     penalty'';
       (B) in subsection (f)(3), by striking ``subject to the 
     death penalty, or'';
       (C) in subsection (i), by striking ``or to the death 
     penalty''; and
       (D) in subsection (n), by striking ``(other than the 
     penalty of death)''.
       (8) Murder committed by use of a firearm during commission 
     of a crime of violence or a drug trafficking crime.--Section 
     924(j)(1) of title 18, United States Code, is amended by 
     striking ``by death or''.
       (9) Genocide.--Section 1091(b)(1) of title 18, United 
     States Code, is amended by striking ``death or''.
       (10) First degree murder.--Section 1111(b) of title 18, 
     United States Code, is amended by striking ``by death or''.
       (11) Murder by a federal prisoner.--Section 1118 of title 
     18, United States Code, is amended--
       (A) in subsection (a), by striking ``by death or''; and
       (B) in subsection (b), in the third undesignated 
     paragraph--
       (i) by inserting ``or'' before ``an indeterminate''; and
       (ii) by striking ``, or an unexecuted sentence of death''.
       (12) Murder of a state or local law enforcement official or 
     other person aiding in a federal investigation; murder of a 
     state correctional officer.--Section 1121 of title 18, United 
     States Code, is amended--
       (A) in subsection (a), by striking ``by sentence of death 
     or''; and
       (B) in subsection (b)(1), by striking ``or death''.
       (13) Murder during a kidnaping.--Section 1201(a) of title 
     18, United States Code, is amended by striking ``death or''.
       (14) Murder during a hostage-taking.--Section 1203(a) of 
     title 18, United States Code, is amended by striking ``death 
     or''.
       (15) Murder with the intent of preventing testimony by a 
     witness, victim, or informant.--Section 1512(a)(2)(A) of 
     title 18, United States Code, is amended by striking ``the 
     death penalty or''.
       (16) Mailing of injurious articles with intent to kill or 
     resulting in death.--Section 1716(i) of title 18, United 
     States Code, is amended by striking ``to the death penalty 
     or''.
       (17) Assassination or kidnaping resulting in the death of 
     the president or vice president.--Section 1751 of title 18, 
     United States Code, is amended--
       (A) in subsection (b)(2), by striking ``death or''; and
       (B) in subsection (d)(2), by striking ``death or''.
       (18) Murder for hire.--Section 1958(a) of title 18, United 
     States Code, is amended by striking ``death or''.
       (19) Murder involved in a racketeering offense.--Section 
     1959(a)(1) of title 18, United States Code, is amended by 
     striking ``death or''.
       (20) Willful wrecking of a train resulting in death.--
     Section 1992(b) of title 18, United States Code, is amended 
     by striking ``to the death penalty or''.
       (21) Bank robbery-related murder or kidnaping.--Section 
     2113(e) of title 18, United States Code, is amended by 
     striking ``death or''.
       (22) Murder related to a carjacking.--Section 2119(3) of 
     title 18, United States Code, is amended by striking ``, or 
     sentenced to death''.
       (23) Murder related to aggravated child sexual abuse.--
     Section 2241(c) of title 18, United States Code, is amended 
     by striking ``unless the death penalty is imposed,''.
       (24) Murder related to sexual abuse.--Section 2245 of title 
     18, United States Code, is amended by striking ``punished by 
     death or''.
       (25) Murder related to sexual exploitation of children.--
     Section 2251(d) of title 18, United States Code, is amended 
     by striking ``punished by death or''.
       (26) Murder committed during an offense against maritime 
     navigation.--Section 2280(a)(1) of title 18, United States 
     Code, is amended by striking ``punished by death or''.
       (27) Murder committed during an offense against a maritime 
     fixed platform.--Section 2281(a)(1) of title 18, United 
     States Code, is amended by striking ``punished by death or''.
       (28) Terrorist murder of a united states national in 
     another country.--Section 2332(a)(1) of title 18, United 
     States Code, is amended by striking ``death or''.
       (29) Murder by the use of a weapon of mass destruction.--
     Section 2332a of title 18, United States Code, is amended--
       (A) in subsection (a), by striking ``punished by death 
     or''; and
       (B) in subsection (b), by striking ``by death, or''.
       (30) Murder by act of terrorism transcending national 
     boundaries.--Section 2332b(c)(1)(A) of title 18, United 
     States Code, is amended by striking ``by death, or''.
       (31) Murder involving torture.--Section 2340A(a) of title 
     18, United States Code, is amended by striking ``punished by 
     death or''.
       (32) Murder related to a continuing criminal enterprise or 
     related murder of a federal, state, or local law enforcement 
     officer.--Section 408 of the Controlled Substances Act (21 
     U.S.C. 848) is amended--
       (A) in each of subparagraphs (A) and (B) of subsection 
     (e)(1), by striking ``, or may be sentenced to death'';
       (B) by striking subsections (g) and (h) and inserting the 
     following:
       ``(g) [Reserved.]
       ``(h) [Reserved.]'';
       (C) in subsection (j), by striking `` and as to 
     appropriateness in that case of imposing a sentence of 
     death'';
       (D) in subsection (k), by striking ``, other than death,'' 
     and all that follows before the period at the end and 
     inserting ``authorized by law''; and
       (E) by striking subsections (l) and (m) and inserting the 
     following:
       ``(l) [Reserved.]
       ``(m) [Reserved.]''.
       (33) Death resulting from aircraft hijacking.--Section 
     46502 of title 49, United States Code, is amended--
       (A) in subsection (a)(2), by striking ``put to death or''; 
     and
       (B) in subsection (b)(1)(B), by striking ``put to death 
     or''.
       (b) Non-Homicide Related Offenses.--
       (1) Espionage.--Section 794(a) of title 18, United States 
     Code, is amended by striking ``punished by death or'' and all 
     that follows before the period and inserting ``imprisoned for 
     any term of years or for life''.
       (2) Treason.--Section 2381 of title 18, United States Code, 
     is amended by striking ``shall suffer death, or''.
       (c) Repeal of Criminal Procedures Relating To Imposition of 
     Death Sentence.--
       (1) In general.--Chapter 228 of title 18, United States 
     Code, is repealed.
       (2) Technical and conforming amendment.--The table of 
     chapters for part II of title 18, United States Code, is 
     amended by striking the item relating to chapter 228.

     SEC. 3. PROHIBITION ON IMPOSITION OF DEATH SENTENCE.

       (a) In General.--Notwithstanding any other provision of 
     law, no person may be sentenced to death or put to death on 
     or after the date of enactment of this Act for any violation 
     of Federal law .
       (b) Persons Sentenced Before Date of Enactment.--
     Notwithstanding any other provision of law, any person 
     sentenced to death before the date of enactment of this Act 
     for any violation of Federal law shall serve a sentence of 
     life imprisonment without the possibility of parole.
                                 ______
                                 
      By Mr. FEINGOLD (for himself and Mr. Leahy):

[[Page S586]]

  S. 192. A bill to amend title 9, United States Code, with respect to 
consumer credit transactions; to the Committee on the Judiciary.
  Mr. FEINGOLD. Mr. President, I rise today to introduce the Consumer 
Credit Fair Dispute Resolution Act of 2001, a bill that will protect 
and preserve American consumers' right to take their disputes with 
creditors to court. I first introduced this legislation last year, both 
as a bill and as an amendment to the bankruptcy reform bill. I am 
pleased that my distinguished colleague from Vermont, the ranking 
member of the Judiciary Committee, Senator Leahy, has joined me again 
as an original cosponsor of this important legislation.
  Credit card companies and consumer credit lenders are increasingly 
requiring their customers to use binding arbitration when a dispute 
arises. Consumers are barred by contract from taking a dispute to 
court, even small claims court. While arbitration can be an efficient 
tool to settle claims, it is credible and effective only when consumers 
enter into it knowingly, intelligently and voluntarily. Unfortunately, 
that's not happening in the credit card and consumer credit lending 
arenas.
  One of the most fundamental principles of our justice system is the 
constitutional right to take a dispute to court. Indeed, all Americans 
have the right in civil and criminal cases to a trial by jury. The 
right to a jury trial in civil cases in Federal court is contained in 
the Seventh Amendment to the Constitution. Many States provide a 
similar right to a jury trial in civil matters filed in state court.
  Some argue that Americans are over-using the courts. Court dockets 
across the country are congested with civil cases. In part as a 
response to these concerns, various ways to resolve disputes, short of 
going to court, have been developed. Alternatives to court litigation 
are collectively known as alternative dispute resolution, or ADR. ADR 
includes mediation and arbitration. Mediation and arbitration are often 
efficient ways to resolve disputes because the parties can have their 
case heard well before they would have received a trial date in court.
  Arbitration, like a court proceeding, involves a third party--an 
arbitrator or arbitration panel. The arbitrator issues a decision after 
reviewing the arguments by all parties. Arbitration uses rules of 
evidence and procedure, although it may use rules that are simpler or 
more flexible than the evidentiary and procedural rules that the 
parties would follow in a court proceeding.
  Arbitration can be either binding or non-binding. Non-binding 
arbitration means that the decision issued by the arbitrator or 
arbitration panel takes effect only if the parties agree to it after 
they know what the decision is. In binding arbitration, parties agree 
in advance to accept and abide by the decision, whatever it is.
  Some contracts contain clauses that require arbitration to be used to 
resolve disputes that arise after the contract is signed. This is 
called ``mandatory arbitration.'' This means that if there is a 
dispute, the complaining party cannot file suit in court and instead is 
required to pursue arbitration. ``Mandatory, binding arbitration'' 
therefore means that under the contract, the parties must use 
arbitration to resolve a future disagreement and the decision of the 
arbitrator or arbitration panel is final. The parties have no ability 
to seek relief in court or through mediation. In fact, if they are not 
satisfied with the arbitration outcome, they are probably stuck with 
the decision.
  Under mandatory, binding arbitration, even if a party believes that 
the arbitrator did not consider all the facts or follow the law, the 
party cannot file a suit in court. The only basis for challenging a 
binding arbitration decision is fairly narrow: if there is reason to 
believe that the arbitrator committed actual fraud, or was partial, 
corrupt or guilty of misconduct, or exceeded his or her powers. In 
contrast, if a dispute is resolved by a court, the parties can have 
broader grounds upon which to pursue an appeal of the lower court's 
decision.
  Because mandatory, binding arbitration is so conclusive, it is a 
credible means of dispute resolution only when all parties understand 
the full ramifications of agreeing to it. But that's not what's 
happening in a variety of contexts--from motor vehicle franchise 
agreements, to employment agreements, to credit card agreements. I'm 
proud to have sponsored legislation addressing employment agreements 
and motor vehicle franchise agreements. Many of my colleagues have 
joined as cosponsor of one or both bills. And just last spring, my 
distinguished colleague from Iowa, Senator Grassley, chaired a hearing 
in the Judiciary Subcommittee on Administrative Oversight and the 
Courts on contractual mandatory, binding arbitration. That hearing 
included a discussion of mandatory arbitration in the consumer credit 
agreement context.
  There is a growing, menacing trend of credit card companies and 
consumer credit lenders inserting mandatory, binding arbitration 
clauses in agreements with consumers. Companies like First USA Bank, 
American Express, and Green Tree Discount Company unilaterally insert 
mandatory, binding arbitration clauses in their agreements with 
consumers, often without the consumer's knowledge or consent.
  The most common way credit card companies have done this is through 
the use of a ``bill stuffer.'' Bill stuffers are the advertisements and 
other materials that credit card companies insert into envelopes with 
the customers' monthly statements. Some credit card issuers like 
American Express have placed mandatory arbitration clauses in bill 
stuffers. The arbitration provision is usually buried in fine print in 
a mailing that includes a bill and various advertising materials. It is 
often described in a lengthy legal document that most consumers 
probably don't even skim, much less read carefully.

  American Express's mandatory arbitration provision took effect on 
June 1, 1999. So, if you're an American Express cardholder and you have 
a dispute with American Express, as of June 1999, you can't take your 
claim to court, even small claims court. You are bound to use 
arbitration, and you are bound to the final arbitration decision. In 
this case, you are also bound to use an arbitration organization 
selected by American Express, the National Arbitration Forum.
  American Express is not the only credit card company imposing 
mandatory arbitration on its customers. First USA Bank, the largest 
issuer of Visa cards, with 58 million customers, has been doing the 
same thing since 1997. First USA also alerted its cardholders with a 
bill stuffer, containing a condensed set of terms and conditions in 
fine print. The cardholder, by virtue of continuing to use the First 
USA card, gave up the right to go to court, even small claims court, to 
resolve a dispute.
  This growing practice extends beyond credit cards into the consumer 
loan industry. Consumer credit lenders like Green Tree Consumer 
Discount Company are inserting mandatory, binding arbitration clauses 
in their loan agreements. The problem is that these loan agreements are 
usually adhesion contracts, which means that consumers must either sign 
the agreement as is, or forego a loan. In other words, consumers lack 
the bargaining power to have the clause removed.
  More importantly, when signing on the dotted line of the loan 
agreement, consumers may not even understand what mandatory arbitration 
means. In all likelihood, they do not understand that they have just 
signed away a right to go to court to resolve a dispute with the 
lender. It might be argued that if consumers are not pleased with being 
subjected to a mandatory arbitration clause, they can cancel their 
credit card, or not execute on their loan agreement, and take their 
business elsewhere. Unfortunately, that's easier said than done. As I 
mentioned, First USA Bank, the nation's largest Visa card issuer, is 
part of this questionable practice. In fact, the practice is becoming 
so pervasive that consumers may soon no longer have an alternative, 
unless they forego use of a credit card or a consumer loan entirely. 
Consumers should not be forced to make that choice.
  Companies like First USA, American Express and Green Tree argue that 
they rely on mandatory arbitration to resolve disputes faster and 
cheaper than in court litigation. The claim may be resolved faster but 
is it really cheaper? Is it as fair as a court of law? I don't think 
so. Arbitration organizations often charge exorbitant fees to

[[Page S587]]

the consumer who brings a dispute. These costs can be much higher than 
bringing the matter to small claims court and paying a court filing 
fee. Or, the fees could very well be greater than the consumer's claim. 
So as a result, a consumer's claim is not necessarily resolved more 
efficiently with arbitration. It is resolved either at greater cost to 
the consumer or not at all, if the consumer cannot afford the costs, or 
the costs outweigh the amount in dispute.
  In December 2000, in Green Tree Financial Corp. Alabama et. al. v. 
Randolph, the U.S. Supreme Court found that an arbitration clause that 
is silent as to the costs and fees of arbitration is enforceable. It, 
however, left unanswered the question of whether large arbitration 
costs, which effectively preclude a litigant from vindicating federal 
statutory rights in the arbitral forum, render the arbitration clause 
unenforceable.
  Another significant problem with mandatory, binding arbitration is 
that the lender gets to decide in advance who the arbitrator will be. 
In the case of American Express and First USA, they have chosen the 
National Arbitration Forum. All credit card disputes with consumers 
involving American Express or First USA are handled by that entity. 
There would seem to be a significant danger that this would result in 
an advantage for the lenders who are ``repeat players.'' After all, if 
the National Arbitration Forum develops a pattern of reaching decisions 
that favor cardholders, American Express or First USA may very well 
decide to take their arbitration business elsewhere. A system where the 
arbitrator has a financial interest in reaching an outcome that favors 
the credit card company is not a fair alternative dispute resolution 
system.
  At least one state court has found that mandatory arbitration 
provisions in credit card bill stuffers are unenforceable. A suit filed 
in California state court arose out of a mandatory arbitration 
provision announced in mailings by Bank of America to its credit card 
and deposit account holders. In 1998, the California Court of Appeals 
ruled that the mandatory arbitration clauses unilaterally imposed on 
the Bank's customers were invalid and unenforceable. The California 
Supreme Court refused to review the decision of the lower court. As a 
result, credit card companies in California cannot invoke mandatory 
arbitration in their disputes with customers. In fact, the American 
Express bill stuffer notes that the mandatory, binding arbitration 
provision will not apply to California residents until further notice 
from the company. The California appellate court decision was wise and 
well-reasoned, but consumers in other states cannot be sure that all 
courts will reach the same conclusion.
  My bill extends the wisdom of the California appellate decision to 
every credit cardholder and consumer loan borrower. It amends the 
Federal Arbitration Act to invalidate mandatory, binding arbitration 
provisions in consumer credit agreements. Now, let me be clear. I 
believe that arbitration can be a fair and efficient way to settle 
disputes. I agree we ought to encourage alternative dispute resolution. 
But I also believe that arbitration is a fair way to settle disputes 
between consumers and lenders only when it is entered into knowingly 
and voluntarily by both parties to the dispute after the dispute has 
arisen. Pre-dispute agreements to take disputes to arbitration cannot 
be voluntary and knowing in the consumer lending context because the 
bargaining power of the parties is so unequal. My bill does not 
prohibit arbitration of consumer credit transactions. It merely 
prohibits mandatory, binding arbitration provisions in consumer credit 
agreements.
  Credit card companies and consumer credit lenders are increasingly 
slamming the courthouse doors shut on consumers, often unbeknownst to 
them. This is grossly unjust. We need to restore fairness to the 
resolution of consumer credit disputes. I urge my colleagues to support 
the Consumer Credit Fair Dispute Resolution Act.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record following my statement.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 192

       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 ``Consumer Credit Fair Dispute 
     Resolution Act of 2001''.

     SEC. 2. CONSUMER CREDIT TRANSACTIONS.

       (a) Definitions.--Section 1 of title 9, United States Code, 
     is amended--
       (1) in the section heading, by striking ``AND `COMMERCE' 
     DEFINED'' and inserting ``, `COMMERCE', `CONSUMER CREDIT 
     TRANSACTION', AND `CONSUMER CREDIT CONTRACT' DEFINED''; and
       (2) by inserting before the period at the end the 
     following: ``; `consumer credit transaction', as herein 
     defined, means the right granted to a natural person to incur 
     debt and defer its payment, where the credit is intended 
     primarily for personal, family, or household purposes; and 
     `consumer credit contract', as herein defined, means any 
     contract between the parties to a consumer credit 
     transaction.''.
       (b) Agreements To Arbitrate.--Section 2 of title 9, United 
     States Code, is amended--
       (1) by striking ``A written'' and inserting ``(a) In 
     General.--A written''; and
       (2) by adding at the end the following:
       ``(b) Consumer Credit Contracts.--
       ``(1) In general.--Notwithstanding the preceding sentence, 
     a written provision in any consumer credit contract 
     evidencing a transaction involving commerce to settle by 
     arbitration a controversy thereafter arising out of the 
     contract, or the refusal to perform the whole or any part 
     thereof, shall not be valid or enforceable.
       ``(2) Limitation.--Nothing in this section shall prohibit 
     the enforcement of any written agreement to settle by 
     arbitration a controversy arising out of a consumer credit 
     contract, if such written agreement has been entered into by 
     the parties to the consumer credit contract after the 
     controversy has arisen.''.

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