[Congressional Record Volume 147, Number 18 (Thursday, February 8, 2001)]
[Senate]
[Pages S1218-S1228]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS
By Mr. WYDEN (for himself and Mr. Burns):
[[Page S1219]]
S. 285. A bill to amend the Federal Water Pollution Control Act to
authorize the use of State revolving loan funds for construction of
water conservation and quality improvements; to the Committee on
Environment and Public Works.
Mr. WYDEN. Mr. President, 25 years after enactment of the Clean Water
Act, we still have not achieved the law's original goal that all our
nation's lakes, rivers and streams would be safe for fishing and
swimming.
After 25 years, it's time for the next generation of strategies to
solve our remaining water quality problems. We need to give States new
tools to overcome the new water quality challenges they are now facing.
The money that has been invested in controlling water pollution from
factories and upgrading sewage treatment plants has gone a long way to
controlling these urban pollution sources. In most cases, the remaining
water quality problems are no longer caused by pollution spewing out of
factory pipes. Instead, they are caused by runoff from a myriad of
sources ranging from farm fields to city streets and parking lots.
In my home State of Oregon, more than half of our streams don't fully
meet water quality standards. And the largest problems are
contamination from runoff and meeting the standards for water
temperature.
In many cases, conventional approaches will not solve these problems.
But we can achieve water temperature standards and obtain other water
quality benefits by enhancing stream flows and improving runoff
controls.
A major problem for many streams in Oregon and in many other areas of
the Western United States is that water supplies are fully appropriated
or over-appropriated. There is currently no extra water to spare for
increased stream flows.
We can't create new water to fill the gap. But we can make more water
available for this use through increased water conservation and more
efficient use of existing water supplies.
The key to achieving this would be to create incentives to reduce
wasteful water use.
In the Western United States, irrigated agriculture is the single
largest user of water. Studies indicate that substantial quantities of
water diverted for irrigation do not make it to the fields, with a
significant portion lost to evaporation or leakage from irrigation
canals.
In Oregon and other States that recognize rights to conserved water
for those who conserve it, irrigators and other water users could gain
rights to use conserved water while also increasing the amount of water
available for other uses by implementing conservation and efficiency
measures to reduce water loss.
The Federal government can play a role in helping meet our nation's
changing water needs. In many Western States, water supply problems can
be addressed by providing financial incentives to help water users
implement cost effective water conservation and efficiency measures
consistent with State water law.
And, we can improve water quality throughout the nation by giving
greater flexibility to States to use Clean Water Act funds to control
polluted runoff, if that's where the money is needed most.
Today, I am pleased to be joined by my colleague, Senator Burns, in
introducing legislation to authorize the Clean Water State Revolving
Fund program to provide loans to water users to fund conservation
measures or runoff controls. States would be authorized, but not
required, to use their SRF funds for these purposes. Participation by
water users, farmers, ranchers and other eligible loan recipients would
also be entirely voluntary.
The conservation program would be structured to allow participating
users to receive a share of the water saved through conservation or
more efficient use, which they could use in accordance with State law.
This type of approach would create a win/win situation with more water
available for both the conservers and for instream flows. And, by using
the SRF program, the Federal seed money would be repaid over time and
gradually become available to fund conservation or other measures to
solve water quality problems in other areas.
My proposal has the support of the Farm Bureau, Oregon water users,
the Environmental Defense Fund, and the Oregon Water Trust.
I urge my colleagues to support giving States greater flexibility to
use their clean water funds for water conservation or runoff control
when the State decides that is the best way to solve water quality
problems and the water users voluntarily agree to participate.
Mr. BURNS. Mr. President, I am pleased today to join my colleague
from Oregon, Senator Wyden, in introducing the Water Conservation and
Quality Incentives Act. This bill aims to authorize the use of State
revolving loan funds for construction of water conservation and quality
improvements. Senator Wyden and I have worked together to bring some
common sense improvements to the existing revolving fund program. One
of the big changes we would like to see will encourage additional
conservation of water resources by the many irrigation districts in the
Nation. Every Montanan understands that water is the lifeblood of our
State, and I am glad to be working on this bipartisan effort to more
effectively use this vital resource.
This bill will encourage water conservation by providing the
opportunity for loans to be made to irrigation districts from the State
revolving funds. These loans will be used to construct pipelines and
develop additional conservation measures. In the West, irrigators are
by far the largest water users. They use the water to produce the many
agricultural products we enjoy in this country. Between the water
source and the field, a large portion of the water used in irrigation
is displaced due to seepage as the water flows through the canals and
ditches. The water is not lost, since it seeps into the soil and
assists in the overall soil moisture, but it makes for an inefficient
system because it is not immediately available to the irrigator.
One of the reasons this is damaging to producers is the fact that in
most irrigation districts, irrigators pay for water that is released to
them whether it makes it to the crop or not. Displacement of this water
does not help a producer's bottom line. At a time when prices are low
and markets are questionable, it is important that we give tools to the
producer to make sure they have every opportunity to stay in business.
Water saved under the proposal in this bill will not only assist the
producer in water and cost savings, but will also make certain the
future of water in the many rivers and streams in the west. Efficient
irrigations systems make good environmental sense because the more
water you have to pump out of a river, the less water there is left for
the fish and animals that depend on it as part of their habitat.
This bill creates a win-win situation both for water users and for
the multiple users of water in our states, particularly Oregon and
Montana. We have an opportunity here to do something useful and
worthwhile for the irrigators and also for those who enjoy fishing,
boating and other instream water uses. I thank Senator Wyden for his
work on this measure and I am pleased to work with him on this issue of
great importance.
______
By Mrs. FEINSTEIN:
S. 286. A bill to direct the Secretary of Commerce to establish a
program to make no-interest loans to eligible small business concerns
to address economic harm resulting from shortages of, and increases in
the price of, electricity and natural gas; to the Committee on Banking,
Housing, and Urban Affairs.
Mrs. FEINSTEIN. Mr. President, I am very proud today to introduce
legislation designed to help small businesses hurt by the power crisis
in the Western United States.
This bill authorizes funds for the Economic Development
Administration to operate a revolving loan fund to assist small
business owners in California and other States affected by the
shortage.
This fund will help dozens of small manufacturers with so-called
``interruptible contracts'' that have been forced to lay off employees
and, in many cases, close their doors.
Interruptible contracts are defined as price discounts to users who
agree to
[[Page S1220]]
reduce consumption during peak demand periods.
But while companies can withstand infrequent power interruptions, the
fact is that California has been hit hard by the electricity crisis and
the service interruptions have come far too frequently.
Today, even small business owners who chose not to join the
interruptible list--and opted instead to brave the higher gas and
electric bills--have found the price spikes too much to handle.
Sadly, many of these firms have discovered that they too are being
forced to shut down because they can't pay their electricity bills.
Here are a few examples of companies that have been affected:
A small business owner in San Diego operating a fluff-and-fold
laundry facility was forced to close when his December electricity bill
jumped fourfold to $4,000. At this time last year, his monthly bill was
roughly $1,000.
The Saint-Gobain Calmar company--a plastics manufacturer in Los
Angeles with roughly 300 employees--has been forced to stop production
22 times in the past six months because of the business'
``interruptible'' status. Although the company has been able to avoid
layoffs up to now, the owners say the outlook is not good.
Another example is the McKoen and Associates potato-flake plant in
Tulelake, California. The owner of the facility says he may be forced
to lay off about 100 employees permanently due to the mandatory shut
downs.
While all California companies, both large and small, are feeling the
crunch of the power shortage, smaller firms are taking a larger hit
because these companies pay a larger percentage of their budgets to
energy and gas bills.
Small businesses, classified as those with 500 workers or fewer,
employ 37 percent of the California's total workforce.
This current power drain has led to higher costs for businesses
throughout the Northwest.
Some aluminum and paper manufacturers in Washington and Oregon have
already been forced out of business--and they are not alone.
The bill I am introducing today authorizes $25 million for a
revolving no-interest loan fund to be operated by the Economic
Development Administration.
The bill allows small businesses, as defined by the Small Business
Administration to be eligible for loans if their monthly gas or
electric bills are at least double what they were a year ago.
If a company's gas bill, for example, was $4,000 in the months of
January, February, and March 2001 and the company averaged only $2,000
in January, February, and March 2000, that company is eligible for a
loan.
The legislation will allow small business customers of the Pacific
Gas and Electric Company, Southern California Edison, or San Diego Gas
and Electric who are not covered by a State-mandated cap to apply for
the no-interest loans to stave off lay offs, re-hire employees, and
keep their facilities up and running.
Small business that were covered by a State cap on energy expenses
will not be eligible for the loan program.
The bill is designed to help both small business owners who opted for
the ``interruptible list'' and those who tried to brave the cost spikes
and failed.
The legislation will not affect those who are not covered by a State
mandated program that caps retail electric commodity rates.
I believe this measure will be of great assistance to the hundreds of
small businesses in the Western region that are facing skyrocketing
costs for power.
I urge my colleagues to join me on this important legislation to help
keep these hard working businessmen and women from being forced to lay
off employees and close their doors.
______
By Mrs. FEINSTEIN (for herself and Mrs. Boxer):
S. 287. A bill to direct the Federal Energy Regulatory Commission to
impose cost-of-service based rates on sales by public utilities of
electric energy at wholesale in the western energy market; to the
Committee on Energy and Natural Resources.
Mrs. FEINSTEIN. I rise today to introduce a bill to direct the
Federal Energy Regulatory Commission to institute cost-of-service based
rates with a reasonable rate of return on energy produced in the
western energy market.
I had planned on introducing this bill as an amendment to the
pipeline safety bill but I understand that the chairman of the Energy
and Natural Resources Committee, Senator Murkowski and the ranking
member of that committee, Senator Bingaman, would be amendable to
scheduling a hearing on this bill before the end of the month, if the
legislation is introduced as a stand-alone bill rather than as an
amendment to the pipeline safety bill.
After the hearing, I intend to exercise my right under the rules of
the committee to ask that the chairman put this bill on the schedule
for mark-up.
Mr. MURKOWSKI. I remain concerned about the energy crisis that is
affecting not just California but other Western states as well. I am
willing to hold a hearing on your legislation during the week of
February 26, right after the Senate recess.
I cannot commit to a markup of the bill, but I expect that the
Senator's legislation will be given its due consideration by the
committee in a timely manner.
Mr. BINGAMAN. The situation in California is very serious. It is now
affecting not only the price and supply of electricity in California
but the price and supply of electricity throughout the West. It poses a
grave danger to the economy of the nation as a whole. The State of
California is doing what it can to cope with this crisis. It is past
time for the Federal Energy Regulatory Commission to use its existing
authority to bring wholesale prices under control.
I commend the Senator from California, Senator Feinstein, for her
initiative in crafting the bill, and the chairman of the Energy
Committee, Senator Murkowski, for agreeing to give us a hearing on it.
______
By Mr. SESSIONS (for himself, Mr. Graham, Mr. Bingaman, Mr.
Frist, Mr. Gramm, Mr. Hutchinson, Mr. Murkowski, Mr. Breaux,
Mr. Shelby, Ms. Collins, Mr. Helms, Mr. Inhofe, Mr. Roberts,
Mr. Santorum, and Ms. Landrieu):
S. 289. A bill to amend the Internal Revenue Code of 1986 to provide
additional tax incentives for education; to the Committee on Finance.
Mr. SESSIONS. Mr. President, I rise today to discuss the concept of
prepaid tuition plans and why they are so critically important to
America's families. As a parent who has put two children through
college and who has another currently enrolled in college, I know
firsthand that America's families are struggling to meet the rising
cost of higher education. In fact, American families accrued more
college debt in the 1990's than during the previous three decades
combined. The reason is twofold: the Federal Government subsidizes
student debt with interest rate breaks and penalizes educational
savings by taxing the interest earned on those savings.
In recent years, however, many families have tackled rising tuition
costs by taking advantage of prepaid college tuition and savings plans.
These plans allow families to purchase tuition credits years in
advance. Families are able to pay for their child's future college
education at today's price. Currently, 48 states have or are in the
process of creating a tuition savings or prepaid tuition plan. These
plans are extremely popular with parents, students, and alumni. They
make it easier for families to save for college, while at the same time
taking the uncertainty out of the future cost of college.
My home State of Alabama was one of the first in the nation to
establish a prepaid college tuition plan. Nearly 50,000 Alabamians are
currently enrolled in the Prepaid Alabama College Tuition Plan.
Families across the State of Alabama are setting aside a few dollars
each month to pay for the future college education of their child.
Alabama is not the only success story, 18,000 children have been
enrolled in the College Savings Iowa plan.
Mr. President, 2,500 families in Montana are saving for their child's
college education through the Montana Family Education Savings Program:
13,000 are enrolled in the Alaska Advance College Tuition Plan;
100,000 are
[[Page S1221]]
participating in the Texas Tomorrow Fund; 7,000 children have accounts
in the West Virginia Prepaid College Plan; 38,000 have joined the Maine
Next Generation College Investing Plan; over 10,000 parents have
contracts in the Mississippi Prepaid Affordable College Tuition Program
for their children.
As you can see, people across the country are wisely taking advantage
of these plans. Congress has supported participating families by
expanding the scope of the prepaid tuition plans and by deferring the
taxes on the interest earned until the student goes off to college. I
believe that we must go one step further. That is why today, I along
with Senators, Bob Graham, Collins, Bingaman, Phil Gramm, Frist,
Breaux, Shelby, Helms, Inhofe, Tim Hutchinson, Santorum, Murkowski,
Landrieu, and Roberts are introducing the Collegiate Learning and
Student Savings, CLASS, Act.
This is a common sense piece of legislation that will make the
interest earned on all education tuition savings plans completely tax-
free. Currently, the interest earned by families saving for college is
taxed twice. Families are taxed on the income when they earn it, and
then again on the interest that accrues from the savings. We strongly
believe that this trend must no longer continue.
In order to provide families a new alternative, the CLASS Act will
provide tax-free treatment to all tuition savings plans. This
bipartisan piece of legislation is sound education policy and tax
policy that provides incentives for savings rather than bureaucratic
solutions. It is a small tax break--estimated at less than $200 million
over 5 years--but the CLASS Act will give families an extra incentive
to be prudent savers for their children's education. Indeed, this small
tax relief plan could produce billions in savings for college in the
years to come. Many individuals have questioned whether these plans
will benefit all types of students.
Let me say this, it is wrong to assume that tuition savings and
prepaid plans benefit mainly the wealthy. In fact, the track record of
existing state prepaid plans indicates that working, middle-income
families, not the rich, benefit the most from prepaid plans. For
example, in 1996 families with an annual income of less than $35,000
purchased 62 percent of the prepaid tuition contracts offered by the
State of Pennsylvania. In the same year, 71 percent of the 600,000
families participating in the Florida Prepaid College Program had an
income of less than $50,000. It is clear this plan is helping middle
income families save for college.
In 1995, the average monthly contribution to a family's college
savings account in Kentucky was $43. These families in Kentucky are
putting a few dollars aside each month to save for their child's
education. Tax-free treatment for tuition savings plans must become
law. We passed this legislation as part of a larger tax bill last
Congress. However, it was vetoed by President Clinton.
President Bush articulated his support for this plan during the
campaign. The time to act is now. This is not expensive, and the small
cost will produce a huge benefit. I encourage my colleagues to work
with me to push for passage of this common sense piece of legislation.
Mr. GRAHAM. Mr. President, I am proud to join Senator Sessions and my
other Senate colleagues in launching an initiative to increase
Americans' access to college education. Today, we are introducing the
Collegiate Learning and Student Savings Act. This bill extends tax-free
treatment to all state sponsored prepaid tuition plans and state
savings plans. This legislation also gives prepaid tuition plans
established by private colleges and universities tax-deferred treatment
in 2001, and tax-exempt status by 2005.
Prepaid college tuition and savings programs have flourished at the
State level in the face of spiraling college costs. According to the
College Board, between 1980 and 2000, the cost of going to a four-year
college has increased 115 percent above the rate of inflation. The
cause of this dramatic increase in tuition is the subject of
significant debate. But whether these increases are attributable to
increased costs to the universities, reductions in state funding for
public universities, or the increased value of a college degree, the
fact remains that financing a college education has become increasingly
difficult.
In response to higher college costs the States have engineered
innovative ways to help its families afford college. Michigan
implemented the first prepaid tuition plan in 1986. Florida followed in
1988. Today 49 States have either implemented or are in the process of
implementing prepaid tuition plans or state education savings plans.
Prepaid college tuition plans allow parents to pay prospectively for
their children's higher education at participating universities. States
pool these funds and invest them in a manner that will match or exceed
the pace of educational inflation. This ``locks in'' current tuition
and guarantees financial access to a future college education. In 1996,
Congress acted to ensure that the tax on the earnings in these state-
sponsored programs is tax-deferred.
Mr. Sessions and I believe the 107th Congress must move to make these
programs completely tax free. Students should be able to enroll in
college without the fear of incurring a significant tax liability just
because they went to school. The legislation extends this same tax
treatment to private college prepaid programs beginning in 2005.
We believe that these programs should be tax free for numerous
reasons. First, prepaid tuition and savings programs help middle income
families afford a college education. Florida's experience shows that it
is not higher income families who take most advantage of these plans.
It is middle income families who want the discipline of monthly
payments. They know that they would have a difficult time coming up
with funds necessary to pay for college if they waited until their
child enrolled. In Florida, more than 70 percent of participants in the
state tuition program have family income of less than $50,000. Second,
Congress should make these programs tax free in order to encourage
savings and college attendance. Finally, for most families, these plans
simply represent the purchase of service to be provided in the future.
The accounts are not liquid, and the funds are transferred from the
state directly to the college or university. The imposition of a tax
liability on earnings represents a substantial burden, because the
student is required to find other means of generating the funds to pay
the tax.
I am pleased to have this opportunity to join my colleagues in
introducing this bill which makes a college education easier to obtain.
______
By Mr. DODD (for himself and Mr. Shelby):
S. 290. A bill to increase parental involvement and protect student
privacy; to the Committee on Health, Education, Labor, and Pensions.
Mr. DODD. Mr. President, I rise to introduce the Student Privacy
Protection Act with my friend and colleague from Alabama, Senator
Shelby. Senator Shelby recently asked me to join him as a co-chair of
the Congressional Privacy Caucus and I am pleased that we are today
introducing legislation to help protect the privacy of one of America's
most vulnerable groups-- our students.
A recent GAO report confirms that more and more, schools are being
perceived by some not just as centers for learning, but as centers for
commercial research. Our children should be instilled with knowledge,
not mined for knowledge on their commercial preferences and interests.
Schools are there to help children grow up to be good citizens--not to
provide a captive audience for market researchers and major
advertisers.
Our bill is simple--it provides parents and their children with
modest, appropriate, privacy protections from market research in
schools that would gather personal information about students, during
school hours, for purely commercial purposes. It does not ban
advertising, nor does it ban market research. It simply requires that,
before a researcher can start asking a young student to provide
personal information, that researcher must obtain parental consent or
its equivalent.
Surely, that is not too much to ask. If someone came to your home and
started to ask your child about his or her age, gender, neighborhood,
food
[[Page S1222]]
preferences, and entertainment preferences, surely you would want to
know the purpose of such questions before deciding whether to consent
to them. We think parents and children are entitled to no less
consideration just because a child is in school.
This is part of a larger phenomenon that is familiar to anyone who
has walked through a school in the past few years--the stunning
increase in commercial advertising in schools. Gone are the days when
commercial advertising simply meant the local hardware store's name on
the basketball scoreboard or the local dry-cleaner's name on the
football scoreboard.
Schools, teachers and their students are daily barraged with
commercial messages aimed at influencing the buying habits of children
and their parents. A 1997 study from Texas A&M, estimated that
children, age 4 to 12, spent more than $24 billion themselves and
influenced their parents to spend $187 billion.
One major spaghetti sauce firm has encouraged science teachers to
have their students test different sauces for thickness as part of
their science classes. A cable television channel in New Jersey had
elementary school students fill our a 27-page booklet called ``My All
About Me Journal'' as part of a marketing survey. In one school, a
student was suspended for wearing a Pepsi T-shirt on the school's Coke
Day. In another, credit card applications were sent home with
elementary school students for their parents and the school collected a
fee for every family that signed up.
Advertisers focus on students and schools for the same reason Willie
Sutton robbed banks--because that's where the money is. And many
schools enter into commercial contracts with advertisers because, as
the GAO found, they are strapped for cash. Schools often are faced with
two poor choices--provide computers, books, and other educational and
recreational equipment with commercial advertising, or not at all.
The bill that Senator Shelby and I offer today does not second guess
the hard decisions that school administrators are making each and every
day. Nor does it ignore the fact that business leaders often are the
strongest advocates for school improvement and the greatest benefactors
of the educational process. What it does is address what the GAO report
considers to be perhaps the most troubling form of commercial activity
in schools--the ``growing phenomenon'' of market research.
According to GAO, ``none of the education officials we interviewed
said schools were appropriate venues for market research. . . .''
Nevertheless, none of the districts surveyed by GAO had policies
specifically addressing market research and the GAO found that this
activity is widespread. One firm alone has conducted market research in
more than 1,000 schools.
Another company, which since has discontinued these activities,
provided computers to 1,800 schools, about 8.6 percent of all U.S.
secondary schools. In exchange, the company was allowed to advertise to
and ask questions of students using these computers. There are other
examples. Suffice it to say that this is a practice that not only is
inappropriate in the opinion of education officials, but is unknown to
many parents. Nearly half of parents in a recent survey were not aware
that websites can collect personal information about students without
their knowledge.
This bill would return to parents the right to protect their
children's privacy. It's simple, it's modest, it contains appropriate
exceptions, and it's our hope that it will become law together with
other educational reforms being considered by this Congress.
Mr. SHELBY. Mr. President, I rise today with my colleague Senator
Dodd to introduce the ``Student Privacy Protection Act''. This
legislation is intended to ensure that parents have the ability to
protect their children's privacy by requiring that anyone who wishes to
collect data for commercial purposes from kids in school must first
seek and obtain parental permission.
The need for this legislation stems from the fact that a large number
of marketing companies are going into classrooms and using class time
to gather personal information about students and their families for
commercial gain. In many cases, parents are not even aware that these
companies have entered their children's school, much less that they are
exploiting them in the one place they should be the safest, their
classroom.
Our legislation builds on a long line of privacy legislation to
protect kids, such as the Family Educational Rights Act, the Children's
Online Privacy Protection Act and the Protection of Pupil Rights Act.
The goal of these laws, as is the case with our legislation, is to
ensure that the privacy of children is protected and that their
personal information cannot be collected and/or disseminated without
the prior knowledge, and in most cases, consent of the parents.
We understand that schools today are financially strapped and many of
these companies offer enticing financial incentives to gain access. Our
goal is not to make it more difficult for schools to access the
educational materials and the computers that they so desperately need.
Rather our goal is to ensure that the details of these arrangements are
disclosed and that parents are allowed to participate in the decision-
making process.
The bottom line here is that parents have a right and a
responsibility to be involved in their children's education. Much of
what is occurring now is being done at the expense of the parents'
decision making authority because schools are allowing companies direct
access to students. This legislation enhances parental involvement by
giving them an opportunity to decide for themselves who does and does
not get access to their children during the school day.
______
By Mr. THOMPSON (for himself, Mr. Frist, Mrs. Hutchison, and Mr.
Gramm):
S. 291. A bill to amend the Internal Revenue Code of 1986 to allow a
deduction for State and local sales taxes in lieu of State and local
income taxes and to allow the State and local income tax deduction
against the alternative minimum tax; to the Committee on Finance.
Mr. THOMPSON. Mr. President, today I am introducing legislation that
will address an inequity in the tax code that affects the citizens of
my state and citizens of other states that do not have a state income
tax. Tennesseans are discriminated against under federal tax laws
simply because our state choose to raise revenue primarily through a
sales tax instead of an income tax. My bill would end this inequity by
allowing taxpayers to deduct either their state and local sales taxes
or their state and local income taxes on their federal tax forms, but
not both. My bill would also ensure that Tennesseans who benefit from
this deduction would not be caught under the federal alternative
minimum tax, AMT, by allowing individuals to deduct their state and
local taxes paid when computing their AMT tax liability.
Under current law, individuals who itemize their deductions for
federal tax purposes are only permitted to deduct state and local
income taxes and property taxes paid. State and local sales taxes are
not deductible. Therefore, residents of nine states are treated
differently from residents of states that have an income tax. Seven
states--Texas, Wyoming, Alaska, Florida, South Dakota, Washington, and
Nevada--have no state income tax. Two states--Tennessee and New
Hampshire--only impose an income tax on interest and dividends, but not
wages.
Prior to 1986, taxpayers were permitted to deduct all of their state
and local taxes paid, including income, sales and property taxes, when
computing their federal tax liability. The ability to deduct all state
and local taxes is based on the principle that levying a tax on a tax
is unfair.
In 1986, however, Congress made dramatic changes to the tax code. The
Tax Reform Act of 1986 significantly reduced federal tax rates on
individuals. In exchange for these lower rates, Congress broadened the
base of income that is taxed by eliminating many of the deductions and
credits that previously existed in the code, including the deduction
for state and local sales taxes. The deduction for state and local
income taxes, however, was retained.
The 1986 Act also tightened the alternative minimum tax rules. The
AMT is a separate, complicated tax system that was originally intended
to ensure
[[Page S1223]]
that wealthy taxpayers could not use the tax code's many deductions and
credits to completely zero out their federal tax liability. However,
each year more and more middle income individuals are being caught
under the AMT who were never intended to be affected by it. Under
current law, individuals are not permitted to deduct their state and
local taxes when computing their alternative minimum tax liability.
This is a major factor pushing Americans under the AMT. By allowing
individuals to deduct state and local taxes under the AMT, my bill will
ensure that restoring equity in this area will not push more
Tennesseans under the AMT. It makes no sense to me to give Tennesseans
a tax cut on the one hand, then take it away with the other.
I believe that our federal tax laws should be neutral with respect to
the treatment of state and local taxes. As I have said, that is not the
case now. The current tax code is biased in favor of states that raise
revenue through an income tax. The current tax code is also needlessly
complex. There is widespread agreement among tax experts that the AMT
is a primary cause of complexity in the tax code and should be
repealed. I strongly support comprehensive reform of the tax code that
will address issues such as neutrality, fairness and simplicity. As we
work to reform the overall tax code, restoring equality in these areas
and should be a part of the discussion.
______
By Mr. CLELAND (for himself and Mr. Wyden):
S. 292. A bill to amend the Internal Revenue Code of 1986 to expand
the enhanced deduction for corporate donations of computer technology
to senior centers and community centers; to the Committee on Finance.
Mr. CLELAND. Mr. President, the U.S. Department of Commerce's latest
report on Internet access in the U.S. is out. According to the
Department's Falling Through the Net: Toward Digital Inclusion,
published last October, more Americans than ever have Internet access
and own computers.
The number of Americans using the Internet jumped to 116.5 million in
August 2000, 31.9 million more Americans than were online in December
1998. And groups that have traditionally been digital ``have nots'' are
making significant gains, according to the Commerce report's findings.
Almost 39 percent of rural households, for example, now have Internet
connections, a 75 percent increase over the last 20 months. The report
found that African American households are now more than twice as
likely to have Internet access at home than they were 20 months ago.
Similarly, Internet access in Hispanic households has also nearly
doubled and now stands at 23.6 percent. And more Americans at every
income level have Internet access in their homes, especially at the
middle income levels. Today, two out of every three households earning
more than $50,000 have Internet connections.
Although more Americans than ever are connected to the Internet, the
report concludes that a ``digital divide'' still exists ``between those
with different levels of income and education, different racial and
ethnic groups, old and young, single and dual-parent families, and
those with and without disabilities.'' According to the Commerce
Department report, for example, more than three-fourths of all
households earning in excess of $75,000 use the Internet at home, while
less than one-fifth of the households with incomes of under $15,000 do.
In some cases, the digital divide has even expanded over the last 20
months. The gap in Internet access rates between African American
households and the nation as a whole is now 18 percent--3 percent more
than in December 1998. And the gap in Internet access between Hispanic
households and the national average is 17.9 percent--4.3 percent more
than it was 20 months ago.
Increasing numbers of Americans are using the Internet to vote, shop,
pay bills, take education courses, and acquire new skills. It is
therefore becoming more and more critical that all Americans have the
tools necessary for full participation in the Information Age economy.
Access to these tools is essential to ensure that our economy continues
to grow and that in the future no one is left behind.
A viable alternative for many of these under-served individuals is
Internet access outside the home, and statistics show that computer use
at schools, libraries, and other public access points such as community
centers is on the rise. Today I am joined by my distinguished
colleague, Senator Wyden, in introducing the Community Technology
Assistance Act. Currently, the special enhanced tax deduction exists in
the case of computer equipment donated to elementary and secondary
schools and public libraries. Our bill would expand this tax incentive
to include computer donations to community and senior centers as well.
Consider the many high-profile technology and Internet related
companies, such as Microsoft, Intel and AmericaOnline, that have
donated computer equipment and web access to schools and universities
across America. Our bill would encourage companies and individuals to
invest in their community and jump start efforts to help bridge the
digital divide in rural and low-income areas everywhere.
In addition, we know a digital divide exists between seniors and the
population as a whole. In fact, the October 2000 Commerce Department
report found that individuals over the age of 50 are among the least
likely to be connected to the Internet, with an Internet use rate of
less than 30 percent. Internet access at senior centers offers older
Americans a promising opportunity. According to the National
Association of State Units on Aging, eight states have conducted
surveys on computer and on-line access at their senior centers.
Pennsylvania reports, for example, that while more than 250 of their
650 senior centers are linked to the Internet, many more need
computers. West Virginia indicates that every center that has opened a
computer training program presently has a waiting list. In an informal
survey, Georgia reports that no more than half of the state's
approximately 200 senior centers have computers available for
participant use--and ``that would be a generous estimate.'' Clearly,
the need is there to increase the availability of 21st Century
technology to America's senior citizens.
In a society that increasingly relies on computers and the Internet
to deliver information and enhance communication, we need to ensure
that all Americans have access to the fundamental tools of the
Information Age. As the Commerce Department report concludes, there is
still much more to be done to make certain that we close the gap
between the digital ``haves'' and ``have nots" and ensure that everyone
is included in the 21st Century economy. The Community Technology
Assistance Act is a positive step in creating digital opportunity for
all Americans.
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. 292
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 ``Community Technology
Assistance Act''.
SEC. 2. FINDINGS.
Congress finds the following:
(1) From December 1998 to August 2000, the share of
Americans using the Internet jumped by over 35 percent, from
32.7 percent to 44.4 percent, according to the recent United
States Department of Commerce report, Falling Through the
Net: Toward Digital Inclusion. If growth continues at that
rate, more than half of all Americans will be using the
Internet by the middle of this year, the report projects.
(2) Although more Americans than ever are connected to the
Internet, the most recent data show that a ``digital divide''
still exists between those with different levels of income
and education, different racial and ethnic groups, old and
young, single and dual parent families, and those with and
without disabilities, according to the United States
Department of Commerce.
(3) Although both African Americans and Hispanic Americans
have shown gains in Internet access over the past 20 months,
still only about 16 percent of Hispanic Americans and just
under 19 percent of African Americans use the Internet at
home, compared to a third of the United States population as
a whole.
(4) The gap in Internet access rates between African
American households and the national average is 18 percent; 3
percent more than in December 1998 and the gap in Internet
access between Hispanic American households and the national
average is 17.9 percent; 4.3 percent more than it was in
1998.
(5) Individuals over 50 years old are among the least
likely to be Internet users, with an
[[Page S1224]]
Internet use rate of less than 30 percent. However,
individuals in this age group are almost 3 times as likely to
be Internet users if they are in the labor force than if they
are not.
(6) Less than 1 in 5 individuals living in households with
incomes of less than $15,000 were Internet users in August
2000. In contrast, 7 out of 10 individuals living in
households with incomes of at least $75,000 had Internet
access.
(7) Schools, libraries, and other public access points,
such as community centers, continue to serve those groups
that do not have access at home.
(8) Of those States that have surveyed computer access at
senior centers, many report a need for computer and software
acquisition.
SEC. 3. ENHANCED DEDUCTION FOR CORPORATE DONATIONS OF
COMPUTER TECHNOLOGY TO SENIOR CENTERS AND
COMMUNITY CENTERS.
(a) Expansion of Computer Technology Donations to Senior
Centers and Community Centers.--Section 170(e)(6)(B)(i)(II)
of the Internal Revenue Code of 1986 (relating to qualified
computer contribution) is amended by striking ``or'' at the
end of subclause (II) and by inserting after subclause (III)
the following:
``(IV) a multipurpose senior center (as defined in section
102(35) of the Older Americans Act of 1965 (42 U.S.C.
3002(35)), as in effect on the date of the enactment of the
Community Technology Assistance Act which is described in
section 501(c)(3) and exempt from tax under section 501(a)
for use by individuals who have attained 60 years of age to
improve job skills in computers, or
``(V) a nonprofit or governmental community center,
including any center within which an after-school or
employment training program is operated,''.
(b) Effective Date.--The amendments made by this section
shall apply to contributions made after December 31, 2001.
______
By Mr. HARKIN (for himself, Mr. Durbin, Mrs. Clinton, Mr. Dorgan,
and Mr. Kennedy):
S. 293. A bill to amend the Internal Revenue Code of 1986 to provide
a refundable tax credit against increased residential energy costs and
for other purposes; to the Committee on Finance.
Mr. HARKIN. Mr. President, today I am introducing the Home Energy
Assistance Tax Act with Senators Durbin, Clinton, Dorgan, and Kennedy.
The rising cost of utility bills has reached near crisis proportions
in my home state and in states across this country. Right now, millions
of Americans are being buried by massive home heating bills. And if we
don't do something soon, a lot of people are going to be left out in
the cold.
This winter has been an especially cold one. As a result, demand for
natural gas is way up, and prices have skyrocketed.
In the past few months, I've gotten phone calls and letters from
people all across Iowa telling me about their outrageous heating bills.
A man in West Des Moines told me that while his gas bill was $189.87 in
December--it jumped to $601.67 in January.
A couple in Duncombe said that their $79 gas bill in December was
followed by a $330 gas bill in January--even though they never paid
more than $120 a month last year.
And a man from Merrill told me that his bill was $575 this month and
$475 last month, even though it was never higher than $280 last year.
This man and his wife receive $1,300 a month for Social Security--
$100 of which goes for Medicare and $300 for Medicare supplement. After
food and other expenses, they just don't have enough left to pay their
utility bills.
Heating bills this high force people to make the kind of sacrifices
that no one should have to make. A recent survey showed that 20 percent
of the Iowa residents who asked for LIHEAP assistance went without
medical care because of high heating bills. 12.3 percent went without
food. 7.4 percent didn't pay their rent or make their house payment.
The bottom line here is that people are struggling, and they need our
help to keep from freezing in their homes this winter.
That's why I believe that we should take the following three steps
immediately:
First, we've got to provide more emergency funds for the Low Income
Home Energy Assistance Program or LIHEAP. Many low income and elderly
people simply cannot afford $300 and $400 and $500 heating bills. We
also need to increase the income limits on who can receive LIHEAP
assistance.
Second, bills have gotten so high that even middle income Americans
are struggling--we've got to find a way to help them pay their energy
utility bills as well. That's why I am introducing the Home Energy
Assistance Tax Act to give taxpayers a 50 percent tax credit for the
difference between their utility bills this winter compared to last
winter.
This credit will also cover the estimated increased costs of heating
a home from heating oil or propane. It will not cover the first $100 in
increased costs. It will not benefit high-income tax-payers. The credit
is phased out for those making more than $100,000. However, this credit
will be refundable so that people with low incomes could still receive
it.
One key problem with using the tax code to provide assistance is that
people do not normally see its benefit until after they file their next
tax return and receive a refund. However, taxpayers can reduce their
payroll withholding by the amount of this credit and get the money
quickly. So this credit can provide quick and meaningful help.
The bill--much like a measure introduced by Senator Bob Smith--will
also propose tax credits for energy efficient new homes and energy
efficient heating, air conditioning and water-heating appliances. It
will also provide tax benefits for similar energy conservation by
businesses.
Energy efficiency is crucial for quelling our home heating crisis. By
helping people conserve energy, we reduce consumption and help them
lower their heating bills. And when we reduce the demand that has
driven prices up, we restore balance to the market and lower prices for
everyone. Also, when we use less fuel, we create less air pollution and
reduce our dependence on foreign sources. So energy efficiency tax
credits are a win-win-win solution.
I am also joining Senator Kerry in introducing a separate bill today
that will provide some relief for small business owners by allowing
them to acquire low interest emergency.
I am, of course, fully aware that high gas prices have spurred new
drilling which should eventually increase supply and bring prices back
down. But this could take years. People are being hammered by high
heating bills right now, and we need to act now to help our
constituents.
No one should be left out in the cold this winter. I hope that we can
come together in the next few weeks and pass important legislation to
help keep America warm.
I urge that the Senate consider and pass this measure.
I ask unanimous consent that a fact sheet be printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
Home Energy Assistance Tax Act (HEAT)
Exactly what is covered? Who is covered? What is covered?
Provides a refundable 50 percent credit from the first
utility bill covering a period starting in November till the
one ending during March this year minus a similar period last
winter. This is a one time benefit.
Who: All taxpayers who have a principal residence and who
have energy utility costs this winter that are more than $100
more than last year's costs. There is a phase out of benefits
for those with higher incomes stating at $75,000 adjusted
gross income. The benefit is completely phased out at
$100,000.
What: All energy utility bills plus any fuel used to heat
the home like heating oil or propane.
It covers bills that people are responsible for, not
including LIHEAP and other government payments. A renter
benefits if they are responsible for their bills.
How easy is this going to be for people to figure out?
Utilities can very easily supply customers with the total
bills for the period from a year ago. Then all they need to
do is subtract.
For those who use a bulk purchased fuel such as heating oil
or propane to heat their homes: There will be an estimated
average cost for each county determined by: (1) The number of
degree days in the two years from November 15 to May 15; (2)
the difference in the price of the fuel used this winter and
last, and (3) the amount needed to heat an average home. That
figure would be used to cover the cost of that fuel in
addition to the other energy utility bills.
The IRS would calculate this number, getting their numbers
from NOAA, DOE and HUD.
What about those who just bought their home?
They would be allowed to use a government estimate of the
average increase for their county.
____
By Mr. SANTORUM (for himself and Mr. Kohl):
S. 294. A bill to amend the Agricultural Market Transition Act to
establish a program to provide dairy farmers
[[Page S1225]]
a price safety net for small- and medium-sized dairy producers; to the
Committee on Agriculture, Nutrition, and Forestry.
Mr. SANTORUM. Mr. President, I rise today to introduce legislation to
assist our nation's dairy farmers. I represent a state where
agriculture is the number one industry--dairy being the leading sector,
and ranks fourth in national dairy production. Agriculture has, and
continues to be, the backbone of our rural communities and our social
character. While heated debates and regional politics have eclipsed
opportunities to pass meaningful dairy legislation, I feel strongly
that we must forge consensus in order to assist our nation's dairy
families.
I am pleased to have joining me in this effort my colleague from
Wisconsin Senator Herb Kohl. While I am grateful for the opportunity to
work with Senator Kohl on an issue of great importance to both of our
home states, it unfortunately signals that our nation's dairy industry
continues to grapple with difficult economic times.
Senator Kohl and I worked together over the past year to forge a
consensus plan that addresses the concerns of dairy farmers nationwide.
For far too long, regional politics have plagued efforts to achieve a
fair and equitable national dairy policy. As a result, milk pricing has
become increasingly complex and overly prescriptive. Given that dairy
farmers have been receiving the lowest price for their milk in more
than twenty years, I feel strongly that Congress needs to step to the
plate and offer a fair and responsible solution.
The National Dairy Farmers Fairness Act has two major goals: (1)
Create a dairy policy that is equitable for farmers in all regions of
the country; and (2) provide more certainty for farmers in the prices
they receive for their milk. To accomplish these goals, this
legislation creates a safety net for farmers by providing supplemental
assistance when milk prices are low. Specifically, a sliding scale
payment is made based upon the previous year's price for the national
average of Class III milk. In short, the payment rate to farmers is
highest when the prices they received were the lowest. In order to be
eligible, a farmer must have produced milk for commercial sale in the
previous year, and would be compensated on the first 26,000
hundredweight of production. All dairy producers would be eligible to
participate under this scenario.
Without a doubt, our dairy pricing policy is flawed. Many solutions--
modest to sweeping--have been proposed, discussed, and debated on the
Senate floor yet final agreement among interested parties has eluded us
for years. Considering that we will begin laying the groundwork for
reauthorization of the Farm Bill over the next year, the time for
consensus is now.
I am committed to preserving the viability of Pennsylvania's dairy
farmers. This legislative proposal represents the strong concern and
interest of mine to find a middle ground in the often heated debate on
dairy policy. I am pleased to join with Senator Kohl in this effort,
and I believe it sends a strong signal that compromise can be achieved
even on the most contentious of issues.
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. 294
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 ``National Dairy Farmers
Fairness Act of 2001''.
SEC. 2. FINDINGS.
Congress finds that--
(1) dairy farm families of the United States are enduring
an unprecedented financial crisis;
(2) the price of raw milk sent to the market by the dairy
farm families has fallen to the levels received in 1978; and
(3) the number of family-sized dairy operations has
decreased by almost 75 percent in the last 2 decades, with
some States losing nearly 10 percent of their dairy farmers
in recent months.
SEC. 3. DAIRY FARMERS PROGRAM.
Chapter 1 of subtitle D of the Agricultural Market
Transition Act (7 U.S.C. 7251 et seq.) is amended by adding
at the end the following:
``SEC. 153. DAIRY FARMERS PROGRAM.
``(a) Definitions.--In this section:
``(1) Applicable fiscal year.--The term `applicable fiscal
year' means each of fiscal years 2001 through 2008.
``(2) Class III milk.--The term `Class III milk' means milk
classified as Class III milk under a Federal milk marketing
order issued under section 8c of the Agricultural Adjustment
Act (7 U.S.C. 608c), reenacted with amendments by the
Agricultural Marketing Agreement Act of 1937.
``(b) Payments.--For each applicable fiscal year, the
Secretary shall make a payment to producers on a farm that,
during the applicable fiscal year, produced milk for
commercial sale, in the amount obtained by multiplying--
``(1) the payment rate for the applicable fiscal year
determined under subsection (c); by
``(2) the payment quantity for the applicable fiscal year
determined under subsection (d).
``(c) Payment Rate.--
``(1) In general.--Subject to paragraph (2), the payment
rate for a payment made to producers on a farm for an
applicable fiscal year under subsection (b) shall be
determined as follows:
``If the average price received by producers in the United States for
Class III milk during the preceding fiscal year was (per
The payment rate for a payment made to producers on a farm for the
applicable fiscal year under subsection (b) shall be (per
hundredweight)--
$10.50 or less................................................50 ....
$10.51 through $11.00.........................................42 ....
$11.01 through $11.50.........................................34 ....
$11.51 through $12.00.........................................26 ....
$12.01 through $12.50.........................................18.....
``(2) Increased payment rate.--If the producers on a farm
produce during an applicable fiscal year a quantity of all
milk that is not more than the quantity of all milk produced
by the producers on the farm during the preceding fiscal
year, the payment rate for a payment to the producers on the
farm for the applicable fiscal year under paragraph (1) shall
be increased as follows:
``If the average price received by producers in the United States for
Class III milk during the preceding fiscal year was (per
The payment rate for a payment made to the producers on the farm for
the applicable fiscal year under paragraph (1) shall be increased
by (per hundredweight)--
$10.50 or less................................................30 ....
$10.51 through $11.00.........................................26 ....
$11.01 through $11.50.........................................22 ....
$11.51 through $12.00.........................................18 ....
$12.01 through $12.50.........................................14.....
``(d) Payment Quantity.--
``(1) In general.--Subject to paragraph (2), the quantity
of all milk for which the producers on a farm shall receive a
payment for an applicable fiscal year under subsection (b)
shall be equal to the quantity of all milk produced by the
producers on the farm during the applicable fiscal year.
``(2) Maximum quantity.--The quantity of all milk for which
the producers on a farm shall receive a payment for an
applicable year under subsection (b) shall not exceed 26,000
hundredweight of all milk.
``(e) Commodity Credit Corporation.--The Secretary shall
carry out the program authorized by this section through the
Commodity Credit Corporation.''.
______
By Mr. KERRY (for himself, Mr. Lieberman, Ms. Snowe, Mr.
Bingaman, Ms. Landrieu, Mr. Johnson, Mr. Domenici, Mr. Levin,
Mr. Wellstone, Mr. Jeffords, Mr. Harkin, Mr. Schumer, Mrs.
Clinton, Mr. Kohl, Mr. Edwards, Mr. Leahy, Mr. Baucus, Ms.
Collins, Mr. Smith of New Hampshire, Mr. Dodd, Mr. Chafee, and
Mr. Bayh):
S. 295. A bill to provide emergency relief to small businesses
affected by significant increases in the prices of heating oil, natural
gas, propane, and kerosene, and for other purposes; to the Committee on
Small Business.
Mr. KERRY. Mr. President, today I rise to introduce legislation that
helps to address the significant price increase of heating fuels and
the adverse impact those prices are having on our 24 million small
businesses and the self-employed. I thank my colleagues who are
cosponsors. Senators Lieberman, Snowe, Bingaman, Landrieu, Johnson,
Domenici, Levin, Wellstone, Jeffords, Harkin, Schumer, Clinton, Kohl,
Edwards, Leahy, Baucus, and Collins.
As so many of my colleagues know, many small businesses are dependent
upon heating oil, propane, kerosene and natural gas. They are dependent
either because they sell or distribute the product, or because they use
it to heat their facilities or as part of their business. The
significant and unforseen rise in the price of these fuels over the
past two years, compounded by cold snaps and slowed economic conditions
this winter, threatens their economic viability.
The financial falter or failure of small businesses has the potential
to extend far beyond the businesses themselves, and we simply can't
afford that.
[[Page S1226]]
Jobs alone make this a reason to mitigate the small business
disruptions or failures because they provide more than 50 percent of
private-sector jobs. And the self-employed, who largely work out of
their homes, and number 16 million according to the National
Association for the Self-Employed, NASE, represent more than 7 percent
of the nation's workforce.
My bill, the Small Business Energy Emergency Relief Act of 2001,
would provide emergency relief, through affordable, low-interest Small
Business Administration Disaster loans, to small businesses adversely
affected by, or likely to be adversely affected by, significant
increases in the prices of four heating fuels--heating oil, propane,
kerosene, and natural gas.
Who are these business owners? They are the self-employed who work
out of their homes and can't turn down the thermostat to 55 degrees
while they are at the office from 8 am to 6 pm. They are the home
heating oil distributers who see the price of their inventory skyrocket
beyond the reach of their credit lines and cash flows. They are the
Mom-and-Pop stores, local restaurants and corner cafes that need to
keep a warm place for folks to enjoy. They are the small day-cares for
children and nursing homes for the elderly.
According to Department of Energy statistics, the cost of heating
fuel has been highly volatile in recent years. For example,
The cost of heating oil nationally climbed 72 percent from February
1999 to February 2000.
The cost of natural gas nationally climbed 27 percent from September
1999 to September 2000.
And the cost of propane climbed 54 percent from January 2000 to
January 2001.
While these national fluctuations capture the larger market trends,
they do not demonstrate how some localities have been even harder hit
by unpredictable and sudden price spikes because of a greater
dependence on a single fuel, insufficient inventories, distribution
problems and other reasons. Last year in New England, for example, the
threat of a relatively common cold winter snap put such serious
pressure on the insufficient supply of heating oil that Massachusetts
declared a state of emergency. With consumers at the mercy of a
market--need up and supply down--the price of heating oil soared. In a
matter of weeks, the average price per gallon of heating oil fuel went
up 60 percent, from $1.12 to $1.79. When operating costs rise
gradually, small businesses have time to plan and adjust their pricing
and operations accordingly. Rapid shifts in operating costs, however,
can disrupt a small company's business plans causing short-term cash
flow difficulties. It is the kind of volatility that can make planning
month to month as difficult as planning year to year.
Here's the situation. For those businesses in danger of or suffering
from significant economic injury caused by crippling increases in the
costs of heating fuel, they need access to capital to mitigate or avoid
serious losses. However, commercial lenders typically won't make loans
to these small businesses because they often don't have the increased
cash flow to demonstrate the ability to repay the loan. In fact, the
Massachusetts Oilheat Council in Wellesley Hills, which is a state
trade association that represents the heating oil industry, and whose
members deliver more than 60 percent of the heating oil to homes and
businesses across the state, retailers of heating oil faced not only
``stretched credit lines'' but even ``negative cash flows.'' Who is
going to give you a loan when you have a negative cash flow?
To exacerbate the situation, banks have tightened their lending to
small businesses by 45 percent over the past three months. According to
the Federal Reserve Board's quarterly survey on lending practices that
was released Monday, February 5th, banks surveyed said they have
tightened credit to small businesses, particularly on riskier loans, by
making borrowing more expensive and requiring customers to have less
outstanding debt. They have changed their lending policies because they
are concerned about ``a less favorable or more uncertain economic
outlook . . . and a reduced tolerance for risk.'' While the banks say
that only a handful of borrowers canceled their plans under the
stricter lending policies, I think the Federal Reserve Board's survey
reinforces the need for this legislation.
You see, Mr. President, commercial lenders are unlikely to make the
type of loans we're talking about without an added incentive, such as a
Federal loan guarantee. And last year I supported that approach to help
small businesses deal with the heating oil problem by enlisting the
SBA, its lending partners, and relevant trade associations to use and
publicize the SBA 7(a) government guaranteed loan program to make loans
to affected small businesses. In the 7(a) loan program, the bank makes
the loan, and the SBA guarantees 75 to 80 percent so that if the
borrower can't repay the loan, the bank isn't on the hook for every
outstanding dollar.
I wrote to the SBA. I called the Massachusetts Bankers Association,
and I called individual bank presidents and asked them to use this tool
for affected small businesses and to aggressively market the
availability of the 7(a) loans and SBA's other programs. Some of the
publications helped to spread the word, including the Boston Business
Journal and the Boston Herald. It was a real team effort.
While tapping into the SBA's guaranteed loan programs was helpful for
some, and one part of the solution, the heating fuel price spike has
turned out to be more than a one-year anomaly and so there is a need to
go a step further--we need to make capital accessible to even more
small businesses. We can do that through the SBA's Economic Injury
Disaster Loans.
Economic injury disaster loans give affected small business necessary
working capital until normal operations resume, or until they can
restructure or change the business to address the market changes. These
are direct loans, made through the SBA, at subsidized interest rates,
of 4 percent or less, versus the current Federally guaranteed lending
rate of Prime + 2\1/4\ percent, 10\3/4\ percent on Monday. Paying 4
percent versus almost 11 percent in interest makes a big difference to
that small business owner. Further, SBA tailors the repayment of each
economic injury disaster loan to each borrower's financial capability,
enabling them to avoid the robbing Peter to pay Paul syndrome, as they
juggle bills.
Clearly, these loans are much more affordable for the already
struggling small businesses, and, since time is of the essence, the
infrastructure is already in place to quickly distribute the loans. SBA
delivers disaster loans through four specialized Disaster Area Offices
located in New York, Georgia, Texas and California. In addition, the 70
SBA District Offices can help small businesses learn the program and
direct the paperwork to the disaster offices. And there are the Small
Business Development Centers in every state, with a network of more
than 1,000 service locations, the Business Information Centers, and the
Women's Business Centers to help small businesses seeking information
about and applying for these loans.
Building on the SBA's Disaster Loan Program so that small businesses
adversely affected by the heating fuel prices are eligible to apply for
economic injury loans complements our efforts last year. I encourage
SBA's lending partners to continue to publicize and provide guaranteed
loans to affected small businesses. It creates a comprehensive approach
to helping small businesses across the nation get the assistance they
need, and gives us one more way to assist in the success of our small
businesses. And again, economic injury disaster loans are a reasonable
approach to the problem.
By providing assistance in the form of loans which are repaid to the
Treasury, the SBA disaster loan program helps reduce the Federal
emergency and disaster costs, compared to other forms of disaster
assistance, such as grants.
On practical terms, SBA considers economic injury to be when a small
business is unable, or likely to be unable, to meet its obligations as
they mature or to pay its ordinary and necessary operating expenses. To
be eligible to apply for an economic injury loan, you must be a small
business, you must have used all reasonably available funds, and you
must be unable to obtain credit elsewhere.
Under this program, the disaster must be declared by the President,
the SBA Administrator, or a governor at
[[Page S1227]]
the discretion of the Administrator. Small businesses will have six
months to apply from November 1, 2000 or, for future disasters, from
the day a disaster is declared.
This legislation will help those who have nowhere else to turn. We've
got the tools at the SBA to assist them, and I believe it's more than
justified, if not obligatory, to use the economic injury disaster loan
program to help these small businesses.
The volatile price jumps of heating fuels are tied to international
factors relating to larger energy issues--among them the supply and
demand of crude oil--and therefore beyond the control of small business
owners. While you have scholars and industry experts making
prognostications about whether the price spikes were temporary or here
for the long haul, I have grown weary of long-term prognostications. As
Yogi Berra is alleged to have said, ``Predictions are always difficult,
especially about the future.''
I believe small business owners can be cautious and budget for the
proverbial rainy day, but I think it is unreasonable to expect that
they can anticipate, and afford to budget enough money to cover, price
jumps of 60 to 100 percent. And who can predict the weather,
particularly cold snaps during historically mild winter conditions?
These price spikes are largely unforeseeable, even though there will
always be the people who say, ``I told you so.''
Introducing this legislation is only a first step. We need to
consider it in Committee, Congress to pass it, and the President to
sign if before it is too late to help struggling small business owners.
I thank Senator Bond for his cooperation on this legislation,
particularly his willingness to expedite judicious consideration by the
Small Business Committee.
I urge my colleagues to support this legislation. SBA's programs make
recovery affordable, and with the right support, can help mitigate the
cost of significant economic disruption in your states caused when
affected small businesses falter or fail, leading to job lay-offs and
unstable tax bases.
I ask unanimous consent that the text of the bill and a letter to
Aida Alvarez be printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
S. 295
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 ``Small Business Energy
Emergency Relief Act of 2001''.
SEC. 2. FINDINGS.
The Congress finds that--
(1) a significant number of small businesses in the United
States use heating oil, natural gas, propane, or kerosene to
heat their facilities and for other purposes;
(2) a significant number of small businesses in the United
States sell, distribute, market, or otherwise engage in
commerce directly related to heating oil, natural gas,
propane, and kerosene; and
(3) sharp and significant increases in the price of heating
oil, natural gas, propane, or kerosene--
(A) disproportionately harm small businesses dependent on
those fuels or that use, sell, or distribute those fuels in
the ordinary course of their business, and can cause them
substantial economic injury;
(B) can negatively affect the national economy and regional
economies;
(C) have occurred in the winters of 1983-1984, 1988-1989,
1996-1997, and 1999-2000; and
(D) can be caused by a host of factors, including global or
regional supply difficulties, weather conditions,
insufficient inventories, refinery capacity, transportation,
and competitive structures in the markets, causes that are
often unforeseeable to those who own and operate small
businesses.
SEC. 3. SMALL BUSINESS ENERGY EMERGENCY DISASTER LOAN
PROGRAM.
Section 7(b) of the Small Business Act (15 U.S.C. 636(b))
is amended by inserting after paragraph (3) the following:
``(4)(A) In this paragraph--
``(i) the term `heating fuel' means heating oil, natural
gas, propane, and kerosene; and
``(ii) the term `sharp and significant increase' shall have
the meaning given that term by the Administrator, in
consultation with the Secretary of Energy.
``(B) The Administration may make such disaster loans,
including revolving lines of credit, either directly or in
cooperation with banks or other lending institutions through
agreements to participate on an immediate or deferred basis,
to assist a small business concern that has suffered or that
is likely to suffer substantial economic injury as the result
of a sharp and significant increase in the price of heating
fuel.
``(C) A small business concern described in subparagraph
(B) shall be eligible to apply for assistance under this
paragraph beginning on the date on which the sharp and
significant increase in heating fuel cost occurs, as
determined by the Administration, and ending 6 months after
that date.
``(D) Any loan or guarantee extended pursuant to this
paragraph shall be made at the same interest rate as economic
injury loans under paragraph (2).
``(E) No loan may be made under this paragraph, either
directly or in cooperation with banks or other lending
institutions through agreements to participate on an
immediate or deferred basis, if the total amount outstanding
and committed to the borrower under this subsection would
exceed $1,500,000, unless such applicant constitutes a major
source of employment in its surrounding area, as determined
by the Administration, in which case the Administration, in
its discretion, may waive the $1,500,000 limitation.
``(F) For purposes of assistance under this paragraph--
``(i) a declaration of a disaster area shall be required,
and shall be made by the President or the Administrator; or
``(ii) if no declaration has been made pursuant to clause
(i), the Governor of a State in which a sharp and significant
increase in the price of heating fuel has occurred may
certify to the Administration that small business concerns
have suffered economic injury as a result of such increase
and are in need of financial assistance which is not
available on reasonable terms in that State, and upon receipt
of such certification, the Administration may make such loans
as would have been available under this paragraph if a
disaster declaration had been issued.''.
SEC. 4. GUIDELINES.
Not later than 30 days after the date of enactment of this
Act, the Administrator of the Small Business Administration
shall issue such guidelines as the Administrator determines
to be necessary to carry out this Act and the amendments made
by this Act.
SEC. 5. EFFECTIVE DATE.
The amendments made by this Act shall apply to economic
injury suffered or likely to be suffered as the result of
sharp and significant increases in the price of heating fuel
occurring on or after November 1, 2000.
____
U.S. Senate,
Committee on Small Business,
Washington, DC, January 31, 2000.
Hon. Aida Alvarez,
Administrator, Small Business Administration,
Washington, DC.
Dear Administrator Alvarez: I am writing to urge immediate
action on a critical problem facing small businesses in the
Northeast that deliver home heating oil. As you may know, the
price of home heating oil has increased dramatically in
recent weeks--as much as 80 to 100 percent in certain areas--
creating a tremendous burden on the financial resources of
several small companies. Many of these businesses do not have
the credit lines or cash flow to compensate for the price
increase and are in dire need of assistance.
As a general matter, home heating oil distributors develop
seasonal business plans, including credit lines, based on
anticipated oil prices, customer demand, customer repayment
schedules and obligations to repay suppliers. However, the
surge in heating oil prices exceeds what most businesses
could have possibly anticipated, and it has placed a
tremendous strain on several companies' cash-flow.
Compounding this problem is the fact that the repayment
schedules to pay suppliers is often considerably shorter than
the repayment schedules for customers. This problem is
becoming acute and is threatening the financial viability of
many small businesses in the home heating oil market place.
The financial failure of these small businesses has the
potential to extend far beyond the businesses themselves if
the delivery of the fuel to commercial and residential
consumers is disrupted.
SBA, with its network of district offices in every state,
is uniquely situated to respond quickly to this situation. On
behalf of the businesses and consumers affected by this
current price spike, I ask that you immediately start working
with SBA-participating lenders in affected states to expedite
short-term loans to credit-worthy home heating oil dealers.
Thank you for your immediate attention to this problem. I
am ready to facilitate this assistance in any way I can.
Sincerely,
John F. Kerry.
______
By Ms. COLLINS:
S. 296. A bill to authorize the conveyance of a segment of the Loring
Petroleum Pipeline, Maine, and related easements; to the Committee on
Armed Services.
Ms. COLLINS. Mr. President, I rise today to introduce the Loring
Pipeline Reunification Act, a bill to authorize the conveyance of a
segment of the Loring Petroleum Pipeline from the U.S. Air Force to the
Loring Development Authority, LDA, in Limestone, ME. The LDA will soon
control more than two-thirds of this pipeline as the result of a
process that was initiated nearly 3 years ago. By conveying the
remaining segment to the LDA with this bill and placing the pipeline
under the control of one entity, its value will
[[Page S1228]]
be maximized as will its ability to foster the economic development of
northern Maine.
The pipeline at issue originally was built to supply the Loring Air
Base with fuel products critical to its mission. Prior to the base's
closure in 1994, Defense Fuels, now known as the Defense Energy Support
Center, DESC, would deliver fuel products by tanker to Searsport, where
the line originates, and then pump them through the line to the base.
For a period following the base closure, the Maine Air National Guard
continued to use the Searsport to Bangor segment to supply their
activities in Bangor. After a study by Defense Fuels, however, the Air
National Guard changed their means of transporting fuel from pipeline
to truck. Consequently, in 1999, the U.S. Air Force made the largest
segment of the pipeline, which runs from Bangor to Limestone, available
to LDA for reuse. The Air National Guard supports the reunification of
this pipeline under LDA's control as does the Maine State Department of
Transportation.
In consideration of the large geographical expanse of my State, the
often treacherous winter driving conditions, and the fuel shortages
that have vexed the Northeast over the past two winters, I believe that
the reunification and return to use of this pipeline would serve the
public good in northern Maine. It would provide a safer and more
efficient means of transporting fuel and, thereby improve the climate
for manufacturing and processing plants currently considering new
operations in the economically challenged area surrounding Limestone.
It is also worth noting, that from a cost-avoidance perspective, my
bill will save the U.S. taxpayer more than $100,000 which would
otherwise be required to support the administrative disposal of this
currently unused pipeline. By passing this bill, the Senate and,
ultimately, the Congress can help expand the options and opportunities
for Aroostook County.
______
By Mr. McCONNELL (for himself and Mr. Dodd):
S. 298. A bill to amend the Internal Revenue Code of 1986 to allow
non-itemizers a deduction for a portion of their charitable
contributions, and for other purposes; to the Committee on Finance.
Mr. McCONNELL. 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. 298
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 ``Giving Incentives for
Taxpayers Act''.
SEC. 2. DEDUCTION FOR PORTION OF CHARITABLE CONTRIBUTIONS TO
BE ALLOWED TO INDIVIDUALS WHO DO NOT ITEMIZE
DEDUCTIONS.
(a) In General.--Section 170 of the Internal Revenue Code
of 1986 (relating to charitable, etc., contributions and
gifts) is amended by redesignating subsection (m) as
subsection (n) and by inserting after subsection (l) the
following new subsection:
``(m) Deduction for Individuals Not Itemizing Deductions.--
``(1) In general.--In the case of an individual who does
not itemize the individual's deductions for the taxable year,
the amount allowable under subsection (a) shall be taken into
account as a direct charitable deduction under section 63.
``(2) Limitation.--The portion of the amount allowable
under subsection (a) to which paragraph (1) applies for the
taxable year shall not exceed $500 ($1,000 in the case of a
joint return).''
(b) Direct Charitable Deduction.--
(1) In general.--Section 63(b) of the Internal Revenue Code
of 1986 (relating to individuals who do not itemize their
deductions) is amended by striking ``and'' at the end of
paragraph (1), by striking the period at the end of paragraph
(2) and inserting ``, and'', and by adding at the end the
following new paragraph:
``(3) the direct charitable deduction.''
(2) Definition.--Section 63 of such Code (relating to
taxable income defined) is amended by redesignating
subsection (g) as subsection (h) and by inserting after
subsection (f) the following new subsection:
``(g) Direct Charitable Deduction.--For purposes of this
section, the term `direct charitable deduction' means that
portion of the amount allowable under section 170(a) which is
taken as a direct charitable deduction for the taxable year
under section 170(m).''
(3) Conforming amendment.--Section 63(d) of such Code
(defining itemized deductions) is amended by striking ``and''
at the end of paragraph (1), by striking the period at the
end of paragraph (2) and inserting ``, and'', and by adding
at the end the following new paragraph:
``(3) the direct charitable deduction.''
(c) Time When Contributions Deemed Made.--Section 170(f) of
the Internal Revenue Code of 1986 (relating to disallowance
of deduction in certain cases and special rules) is amended
by adding at the end the following new paragraph:
``(10) Time when contributions deemed paid.--For purposes
of this section, in the case of an individual, a taxpayer
shall be deemed to have paid a charitable contribution on the
last day of the preceding taxable year if the contribution is
paid on account of such taxable year and is paid not later
than the time prescribed by law for filing the return for
such taxable year (not including extensions thereof).''
(d) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2000.
______
By Mr. THOMAS (for himself, Mr. Craig, Mr. Crapo, Mr. Murkowski,
and Mr. Enzi):
S. 301. A bill to amend the National Environmental Policy Act of 1969
to require that Federal agencies consult with state agencies and county
and local governments on environmental impact statements; to the
Committee on Environment and Public Works.
Mr. THOMAS. Mr. President, I rise today to introduce the State and
Local Government Participation Act of 2001 which would amend the
National Environmental Policy Act, NEPA. This bill is designed to
guarantee that federal agencies identify state, county and local
governments as cooperating agencies when fulfilling their environmental
planning responsibilities under NEPA.
NEPA was designed to ensure that the environmental impacts of a
proposed federal action are considered and minimized by the federal
agency taking that action. It was supposed to provide for adequate
public participation in the decision making process on these federal
activities and document an agency's final conclusions with respect to
the proposed action.
Although this sounds simple and quite reasonable, NEPA has become a
real problem in Wyoming and many states throughout the nation. A
statute that was supposed to provide for additional public input in the
federal land management process has instead become an unworkable and
cumbersome law. Instead of clarifying and expediting the public
planning process on federal lands, NEPA now serves to delay action and
shut-out local governments that depend on the proper use of these
federal lands for their existence.
The State and Local Government Participation Act is designed to
provide for greater input from state and local governments in the NEPA
process. This measure would simply guarantee that state, county and
local agencies be identified as cooperating entities when preparing
land management plans under NEPA. Although the law already provides for
voluntary inclusion of state and local entities in the planning
process, too often, the federal agencies choose to ignore local
governments when preparing planning documents under NEPA.
Unfortunately, many federal agencies have become so engrossed in
examining every environmental aspect of a proposed action on federal
land, they have forgotten to consult with the folks who actually live
near and depend on these areas for their economic survival.
States and local communities must be consulted and included when
proposed actions are being taken on federal lands in their state. Too
often, federal land managers are more concerned about the comments of
environmental organizations located in Washington, D.C. or New York
City than the people who actually live in the state where the proposed
action will take place. This is wrong. The concerns, comments and input
of state and local communities is vital for the proper management of
federal lands in the West. The State and Local Government Participation
Act of 2001 will begin to address this troubling problem and guarantee
that local folks will be involved in proposed decisions that will
affect their lives.
____________________