[Congressional Record Volume 147, Number 56 (Monday, April 30, 2001)]
[Senate]
[Pages S4045-S4050]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS
By Mr. LIEBERMAN:
S. 798. A bill to amend the Internal Revenue Code of 1986 to allow
small business employers certain credits against income tax, and for
other purposes; to the Committee on Finance.
Mr. LIEBERMAN. Mr. President, I rise today to introduce legislation,
the Productivity, Opportunity, and Prosperity Act of 2001, that I
believe will add some needed POP to our economy and that must be an
integral component of any strategy to extend our historic economic
growth.
The primary goal of the Productivity, Opportunity, and Prosperity Act
is to protect, stimulate and expand economic growth. Government's role
is not to create jobs but to help create the environment in which the
private sector will create jobs. This legislation helps to create the
right context for private sector growth by providing incentives for
investment in training, technology, and small entrepreneurial firms.
These investments are critical to economic growth and the creation of
jobs and wealth.
The Productivity, Opportunity, and Prosperity Act of 2001 is a tax
package with a purpose. And that purpose is, above all else, to
stimulate private sector economic growth, to raise the tide that lifts
the lot of all Americans. In the spirit of the ``New Economy,'' where
the fundamentals of our economy have changed through entrepreneurship
and innovation, this package includes business tax incentives that will
spur the real drivers of growth: innovation, investment, a skilled
workforce, and productivity.
The first component of this bill is a 30 percent tax credit for
companies that invest in remedial education for their employees. Many
companies today recognize that a skilled workforce is critical to
success and they are eager to invest continuously in their employees.
However, too often those companies seeking to upgrade worker skills are
having to first make sizeable investments to simply make up for the
skill deficits produced by the K-12 education system. For example, in
my home state of Connecticut, I am aware of one small manufacturer with
25 employees that will train 20 of them in English as a Second Language
at a cost of up to $15,000. That is a significant investment and
commitment by that company. Because too many workers did not learn the
basic math, reading, and language skills in school, companies have to
fix these deficiencies first, before they can train their workers on
more advanced skills. This credit will help to offset those
investments.
The bill's second component is a Small Business Digital Divide Tax
Credit. It would create a 10 percent tax credit for small businesses,
those with fewer than 100 employees, to encourage investment in
information technology, for example servers, network hardware, initial
broadband hookup, PCs, and e-Business software. This credit is critical
for two reasons. First, because there is truly a small business digital
divide in this country. Small firms are lagging in the productivity
growth that has driven the economic boom of the late 90s. While small
businesses account for 40 percent of our economy and 60 percent of the
new jobs, less than one-third of them are wired to the Internet today.
Those that are wired have grown 46 percent faster than their
counterparts who are unplugged. A recent study by the National
Association of Manufacturers, NAM, shows that those small manufacturers
surveyed averaged only about 2 percent of their sales over internet and
less than 1 percent were in the advanced stages of e-commerce. Without
expanding productivity improvements to small businesses, we cannot hope
to sustain the
[[Page S4046]]
economic growth of the last several years.
The second reason this credit is so important, is that it provides an
immediate stimulus to our slowing economy. We know today that there has
been a sharp downturn in technology-related capital spending that has
helped power our economic growth. For example, Cisco Systems, whose
products provide the foundation for our digital environment, estimates
that its sales for the current quarter would be about 30 percent lower
than the previous quarter and that they would fall again next quarter.
By some projections, PC sales in this country this year will slow
dramatically to virtually zero growth. In order to spur near term
investment and provide an economic stimulus, this credit would be
available immediately after enactment and through the end of 2002.
This bill's third component recognizes that entrepreneurship drives
growth and that small, emerging companies need capital investment to
innovate, create jobs, and create wealth. According to the National
Commission on Entrepreneurship, a small subset of entrepreneurial firms
that comprise only 5-15 percent of all U.S. businesses created about
two-thirds of new jobs between 1993-96. Although venture capital is
critical to the transition from a fledgling company to a growth
company, only a small share of it is associated with small and new
firms. In addition, we are currently experiencing a venture capital
slow down that makes it even more difficult for small and new firms to
attract capital. According to the National Venture Capital Association
(NCVA), investment in the fourth quarter of last year slowed by more
than 30 percent from the previous quarter.
For these reasons, the bill creates a zero capital gains rate for
new, direct, long term investments by individuals and corporations in
the stock of small businesses, those emerging, entrepreneurial
companies that are core to our economic growth. Specifically, this
legislation excludes from capital gains taxes 100 percent of new, long-
term investments in these capital-intensive small businesses. It also
changes the eligibility definition of a small business from $50 million
in capitalization to $300 million while reducing the holding period for
investments from 5 to 3 years. In addition, it also eliminates
incentive stock options from the calculation of the Alternative Minimum
Tax to help high tech employers recruit and retain the skilled
professionals that are critical to competitiveness in a knowledge
economy.
Finally, the bill's fourth component reduces the tax depreciation
period for semiconductor manufacturing equipment from five years to
three years, which more closely reflects the actual life of the
equipment. I believe this component is essential because we know that
advances in semiconductor technology improve productivity throughout
the economy. The pace of innovation in the semiconductor industry is
among the fastest of any U.S. or global industry. Following Moore's
Law, the semiconductor industry has been quadrupling the number of
transistors on a chip every three years and studies show that chip
manufacturing equipment quickly becomes obsolete as these new
generations of chips are introduced. Semiconductor companies spend a
greater percentage of their sales on R&D and capital equipment than any
other industry. Last year, the U.S. semiconductor industry spent 18
percent of its sales on capital investment and 14 percent on R&D. More
than 30 percent of this sector's revenue are invested in the future and
building the New Economy. To promote economic strength, we can no
longer afford to penalize the semiconductor manufacturing equipment
industry with tax law that requires a five year cost recovery.
Ten years from now we will be judged by the economic policy decisions
we make today. People will ask, did we fully understand the awesome
changes taking place in our economy and in our society? Did we give our
industry and workers the environment and the tools they need to seize
the opportunities an innovation economy offers? I believe that a true
Prosperity Agenda is within our grasp. Never before has America been in
a stronger position--economically, socially, or politically--to shape
our future. But it will take strong and focused leadership. I am
confident that if we in the public sector in Washington work in
partnership with the private sector throughout our country, we can
truly say of America's future that the best is yet to come. I believe
that the Productivity, Opportunity, and Prosperity Act of 2001 is an
important step toward that future.
______
By Mr. DURBIN (for himself, Mr. Voinovich, Mr. Cleland, Mr.
Kerry, Mr. Reid, Mr. Feingold, and Ms. Mikulski):
S. 799. A bill to prohibit the use of racial and other discriminatory
profiling in connection with searches and detentions of individuals by
the United States Customs Service personnel, and for other purposes; to
the Committee on Finance.
Mr. DURBIN. Mr. President, I rise today to reintroduce the Reasonable
Search Standards Act. This Act prohibits racial or other discriminatory
profiling by Customs Service personnel. I am please that Senator
Voinovich is an original cosponsor of this bipartisan legislation.
Last year, I released a study, conducted by GAO at my request, of the
U.S. Customs Service's procedures for conducting inspections of airport
passengers. The need for this study grew out of an investigative report
by Renee Ferguson of WMAQ-TV in Chicago and several complaints from
African-American women in my home state of Illinois who were strip-
searched at O'Hare Airport for suspicion of carrying drugs. No drugs
were found and the women felt that they had been singled out for these
highly intrusive searches because of their race. These women,
approximately 100 of them, have filed a class action law suit in
Chicago.
The purpose of the GAO study was to review Customs' policies and
procedures for conducting personal searches of airport passengers and
to determine the internal controls in place to ensure that airline
passengers are not inappropriately targeted or subjected to personal
searches. Approximately 140 million passengers entered the United
States on international flights during fiscal years 1997 and 1998.
Because there is no data available on the gender, race and citizenship
of this traveling population, GAO was not able to determine whether
specific groups of passengers are disproportionately selected to be
searched. However, once passengers are selected for searches, GAO was
able to evaluate the likelihood that people with various race and
gender characteristics would be subjected to searches that are more
personally intrusive, such as strip-searches and x-rays, rather than
simply being frisked or patted down.
The GAO study revealed some very troubling patterns in the searches
conducted by U.S. Customs Service inspectors. GAO found disturbing
disparities in the likelihood that passengers from certain population
groups, having been selected for some form of search, would be
subjected to the more intrusive searches, including strip-searches and
x-ray searches. Moreover, that increased likelihood of being
intrusively searched did not always correspond to an increased
likelihood of actual carrying contraband.
Because of the intrusive nature of strip-searches and x-ray searches,
it is important that the Customs Service avoid any discriminatory bias
in forcing passengers to undergo these searches. GAO found that
African-American women were much more likely to be strip-searched than
most other passengers. This disproportionate treatment was not
justified by the rate at which these women were found to be carrying
contraband.
Certain other groups also experienced a greater likelihood of being
strip-searched relative to their likelihood of being found carrying
contraband. Specifically, African-American women were nearly 3 times as
likely as African-American men to be strip-searched, even though they
were only half as likely to be found carrying contraband. Hispanic-
American and Asian-American women were also nearly 3 times as likely as
Hispanic-American and Asian-American men to be strip-searched, even
though they were 20 percent less likely to be found carrying
contraband. In addition, African-American women were 73 percent more
likely than White-American women to be strip-searched in 1998 and
nearly 3 times as likely to be strip-searched in
[[Page S4047]]
1997, despite only a 42 percent higher likelihood of being found
carrying contraband. Moreover, among non-citizens, White men and women
were more likely to be strip-searched than Black and Hispanic men and
women, despite lower rates of being found carrying contraband.
As with strip-searches, x-rays are personally intrusive and it is of
particular concern that the Customs Service avoid any discriminatory
bias in requiring x-ray searches of passengers suspected of carrying
contraband. GAO found that African-Americans and Hispanic-Americans
were much more likely to be x-rayed than other passengers. This
disproportionate treatment was not justified by the rate at which these
passengers were found to be carrying contraband. Specifically, GAO
found that African-American women were nearly 9 times as likely as
White-American women to be x-rayed even though they were half as likely
to be carrying contraband. African-American men were nearly 9 times as
likely as White-American men to be x-rayed, even though they were no
more likely than White-American men to be carrying contraband.
Moreover, Hispanic-American women and men were nearly 4 times as likely
as White-American women and men to be x-rayed, even though they were
only a little more than half as likely to be carrying contraband. And
among non-citizens, Black women and men were more than 4 times as
likely as White women and men to be x-rayed, even though Black women
were only half as likely and Black men were no more likely to be found
carrying contraband.
For these reasons, we are reintroducing the Reasonable Search
Standards Act. This bill is a direct response to the concerns raised by
the GAO report. The bill prohibits Customs Service personnel from
selecting passengers for searches based in whole or in part on the
passenger's actual or perceived race, religion, gender, national
origin, or sexual orientation. To ensure that a sound reason exists for
selecting someone to be searched, the bill requires Customs Service
personnel to document the reasons for searching a passenger before the
passenger is searched. The only exception to this requirement is when
the Customs official suspects that the passenger is carrying a weapon.
The bill also requires all Customs Service personnel to undergo
periodic training on the procedures for searching passengers, with a
particular emphasis on the prohibition of profiling. The training shall
include a review of the reasons given for searches, the results of the
searches and the effectiveness of the criteria used by Customs to
select passengers for searches. Finally, the bill calls for an annual
study and report on detentions and searches of individuals by Customs
Service personnel. The report shall include the number of searches
conducted by Customs Service personnel, the race and gender of
travelers subjected to the searches, the type of searches conducted--
including pat down searches and intrusive non-routine searches--and the
results of these searches.
Since the release of the GAO report, the Customs Service has assured
me that improvements have been made to ``. . . better gather and
analyze data, and to improve search procedures and results.'' These
changes, along with better training of Customs Service personnel, will
not only prevent unfair profiling practices, but will actually improve
the effectiveness of operations at Customs. I commend former
Commissioner Kelly for his quick response to the concerns raised by the
GAO study and for implementing changes to the Customs Service's
personal search policies.
The legislation we are introducing today will ensure that such
progress continues, and is reported to Congress on a periodic basis.
The Reasonable Search Standards Act will make the task at Customs
easier by ensuring that a key federal service--one where profiling
practices have already been demonstrated--remains focused on improving
its personal search procedures and eliminating any practices that bear
even the slightest resemblance to racial profiling.
President Bush and Attorney General Ashcroft have both said that
ending racial profiling will be a high priority for this
Administration. We applaud their commitment to this important issue. We
have written a letter to President Bush, co-signed by Representatives
Lewis and Houghton, to commend the President's attention to racial
profiling, and to urge him to support the Reasonable Search Standards
Act. Similar letters have been sent to Attorney General Ashcroft and to
Treasury Secretary O'Neill. This is not a black, or brown, or white
issue. It is not a Republican or a Democratic issue. Racial profiling
is an affront to all Americans. Allowing it to continue would diminish
democracy for all Americans.
Martin Luther King had a dream that the United States would become a
nation where children would not be judged by the color of their skin
but by the content of their character. We still have a long road to
travel to make Dr. King's dream a full reality for all people. The
Reasonable Search Standards Act is one step along that road. I urge my
colleagues to support this important piece of legislation.
I ask unanimous consent that the letter sent to President Bush be
printed in the Record.
There being no objection, the letter was ordered to be printed in the
Record, as follows:
Congress of the United States,
Washington, DC, April 6, 2001.
Hon. George W. Bush,
The White House,
Washington, DC.
Dear President Bush: We are writing to commend you and
Attorney General Ashcroft for the priority your
administration has given to the issue of racial profiling,
and to seek your assistance regarding ongoing efforts to
address this issue in the U.S. Customs Service. The insidious
practice of racial profiling undermines public confidence in
law enforcement and damages the credibility of police forces
around the country, even though the vast majority of police
are carrying out their duties responsibly and professionally.
Most importantly, racial profiling creates an atmosphere of
distrust and alienation that isolates broad segments of the
American population.
As you know, this issue affects federal, as well as state
and local law enforcement activities. In fact, a GAO study of
profiling practices of airline passengers concluded that the
U.S. Customs Service was intrusively searching African-
American women and other minorities for contraband at much
higher rates than they searched other segments of the
population. Ironically, the women being targeted were
statistically less likely than other passengers to be found
carrying contraband.
Commissioner Kelly quickly responded to the concerns raised
by the GAO study by implementing significant changes to the
Customs Service's personal search policies and data
collection activities. The Customs Service is to be commended
for its responsiveness that, we hope, will eventually
eliminate the practice or appearance of discrimination. Your
continued attention to this issue will insure that the rapid
pace of progress that the Customs Service has already made on
the issue of racial profiling will continue unabated. To that
end, we ask, first, that you quickly nominate someone who
shares your commitment to the issue of racial profiling to
the position of Commissioner of Customs.
We also introduced Customs search legislation to
specifically address the issue by codifying some of the
changes already made by the Customs Service, and adding a
modest reporting requirement. The legislation would prohibit
the use of race, gender or other inappropriate criteria as
the basis for Customs Service selection of people for
searches or detention, and require Customs to improve its
record-keeping and analysis, institute periodic training, and
report annually to Congress. There is every indication that
these types of measures will help the Customs Service make
more effective use of its resources, and avoid unwarranted
searches.
We are reintroducing these companion bills to address
profiling in the Customs Service and hope that you will work
with Congress to insure their passage as part of your effort
to bring an end to the inexcusable practice of racial
profiling.
Sincerely,
Richard J. Durbin,
U.S. Senator.
George V. Voinovich,
U.S. Senator.
John Lewis,
Member of Congress.
Amo Houghton,
Member of Congress.
______
By Mrs. FEINSTEIN:
S. 800. A bill to provide for post conviction DNA testing, to
establish a competent counsel grant program, and other purpose; to the
Committee on Judiciary.
Mrs. FEINSTEIN. Mr. President, I rise to introduce the Criminal
Justice Integrity and Innocence Protection Act of 2001.
It is my hope that this bill will jump-start the process of ensuring
that every innocent prisoner in this nation has access to DNA testing
that could set
[[Page S4048]]
them free, and that every criminal defendant has access to truly
competent counsel.
This is not the first bill to be introduced on this issue.
My good friend from Vermont and ranking member of the Judiciary
Committee, Senator Leahy, has twice introduced his Innocence Protection
Act, with an impressive and bipartisan group of supporters behind the
bill. I commend him for his work on this issue, and I look forward to
continuing to work with him to see a bill pass.
But I have had some concerns with certain provisions of the Leahy
bill, concerns that make it impossible for me to support the bill as
currently drafted.
Also last year, the chairman of the Judiciary Committee, Senator
Hatch, addressed the DNA issue in a bill of his own. However, that bill
did not include provisions on competent counsel, something that I very
strongly feel should be included.
So the real aim of my effort is to start moving this process forward.
It has been well over a year since these bills were first discussed,
and no real action has taken place. There are differences of opinion on
how to move forward on this issue, and I fully understand how committed
each side is to their position.
But I believe that these differences of opinion will continue to
prevent the Senate from considering this issue for the foreseeable
future, unless something is done to break the stalemate.
In the hopes of doing just that, breaking the stalemate, last year, I
invited both Senator hatch and Senator Leahy together, to try to
resolve the differences between their two approaches. We had a
constructive meeting, and some progress was made.
Since that time, each of us has gone back and forth with suggestions
and criticisms of various ideas, and our staffs have been working
diligently on trying to craft a solution to the impasse.
Nevertheless, time continues to run without action.
So today, I am introducing what I believe is a good compromise on
this issue, a piece of legislation, based on our discussions, that I
hope will spur debate, and provide a major step forward on this issue.
Essentially, the legislation I am introducing today does two things.
First, the bill provides a procedure by which prisoners who might be
able to prove their innocence with the use of new DNA technology can do
so.
The bill contains safeguards, of course, so that frivolous requests
will be minimized.
For instance, prisoners have to demonstrate that biological evidence
does exist that could possibly prove them innocent, and they must show
that DNA testing was unavailable to them at the time of trial.
But overall, the bill will allow for the testing of inmates where
evidence could lead to their exoneration.
If DNA testing proves innocence, the judge can release the prisoner
immediately or, if there are other crimes of which the defendant may
have been guilty, the judge can determine the best way to proceed in
the case.
Second, the bill also addresses the issue of competent counsel,
through the establishment of independent, national standards for legal
representation in capital cases.
Specifically, this legislation directs the State Justice Institute to
study this issue and to develop standards for competent counsel in
capital cases.
The bill then authorizes grants to states that agree to adopt those
standards.
The State Justice Institute has long served as a neutral facilitator
between the state and federal judicial systems, and the bill would
allow them to work with judges, prosecutors, and defense attorneys
alike to develop a model system for standards in these cases.
The combination of these two parts of the bill, competent counsel
standards and DNA testing, will serve as powerful tools in restoring
the public's confidence in the integrity of our judicial system.
I support the death penalty, and I have for a long time. And I have
spent much of my public career trying to ensure that guilty people face
the consequences of their actions.
But we must protect the innocent from a system of justice that can
make mistakes. That is what this bill is all about, and that is why I
hope we can move quickly to debate this issue fairly, with all opinions
on the table, and move forward towards passage of a reasoned, strong
bill.
______
By Mr. JEFFORDS (for himself, Mr. Conrad, Mr. Murkowski, Mr.
Hatch, and Mr. Breaux):
S. 801. A bill to amend the Internal Revenue Code of 1986 to repeal
the limitation on the use of foreign tax credits under the alternative
minimum tax; to the Committee on Finance.
Mr. JEFFORDS. Mr. President, today I am joining with four of my
colleagues on the Finance Committee, Senators Conrad, Murkowski, Hatch
and Breaux, to introduce a bill that will eliminate an aspect of our
tax laws that is fundamentally unfair to taxpayers with income from
foreign sources.
Under our system of taxation, United States citizens and domestic
corporations are subject to tax on income they earn from sources
outside the United States. In all likelihood, foreign-source income
will also be subject to tax by the country where it was earned. Absent
an Internal Revenue Code measure providing for other treatment, the
same income could be taxed twice, by two different countries. The tax
code does have a provision to address this problem of double taxation:
the foreign tax credit. This credit allows taxpayers to offset
otherwise payable U.S. taxes with foreign taxes paid on the same
foreign-source income. Like the other provisions governing
international taxation, the details of the foreign tax credit are
complex. The basic principle underlying the credit, however, is simple:
relief from double taxation.
The alternative minimum tax, AMT, requires taxpayers to compute their
taxes twice, once under the ``regular'' method, and once using the AMT
calculation. As a rule, taxpayers pay the larger of these two
computations. When taxpayers become subject to the AMT, th protection
against double taxation is undermined. In the ``regular'' tax
computation, foreign tax credits protect against double taxation. This
protection is only partial under AMT rules, however, where the
allowable foreign tax credit is limited to 90 percent of a taxpayer's
AMT liability. This limitation means that income subject to foreign tax
is also subject to U.S. tax.
There is no sound policy reason for denying relief from double
taxation under the AMT. When first enacted, the AMT was designed to
ensure that taxpayers claiming various tax ``preferences'' allowed by
the Internal Revenue Code should pay a minimum amount of tax. The
foreign tax credit is not a ``preference'' serving an incentive for a
particular activity or behavior. Rather, it merely reflects the
fundamental principle that income should not be subject to multiple
taxation. The 90 percent limitation was enacted as part of the 1986 tax
reform bill, solely for the purpose of raising revenue. The bill that
we're introducing today will eliminate the AMT's 90 percent limitation
on foreign tax credits. Elimination of this limitation will mean that
taxpayers subject to the AMT will get the same protection against
double taxation allowed to taxpayers subject to the regular tax.
Repeal of the limit on foreign tax credits is not a revolutionary
idea. In fact, Congress repealed the limitation in the Taxpayer Refund
and Relief Act of 1999, which was subsequently vetoed. Legislation
similar to the bill I'm introducing today has also been introduced in
the House of Representatives. At this point in time, it is questionable
whether the AMT still serves a valid purpose. In fact, in a study
released last week, the Joint Committee on Taxation concluded that both
the corporate and individual AMT should be repealed. In any event, the
AMT's treatment of foreign tax credits serves no valid purpose. The 90
percent limitation on foreign tax credits is probably the most unfair
aspect of the corporate AMT. Even those unwilling to support wholesale
AMT repeal should support elimination of this most unfair aspect of the
AMT. In the age of globalization, the AMT limitation on foreign tax
credits can put U.S. corporations at a competitive disadvantage with
their foreign rivals. The time has come to repeal this unfair tax
provision.
______
By Mr. BINGAMAN:
[[Page S4049]]
S. 802. A bill to assist low income taxpayers in preparing and filing
their tax returns and to protect taxpayers from unscrupulous refund
anticipation loan providers, and for other purposes; to the Committee
on Finance.
Mr. BINGAMAN. Mr. President, I rise today to introduce the Low Income
Taxpayer Protection Act of 2001. This legislation, if enacted, will
assist low and moderate income taxpayers with the annual task of
preparing their tax returns and give them some protection from
exploitive refund anticipation loans. RALs are high interest loans
offered to taxpayers who are entitled to a refund. Recently, an article
ran in the Albuquerque Journal about taxpayer abuses that were
particularly acute near the Navajo Reservation in Gallup, New Mexico.
While many taxpayers benefit from these loans, many more are hurt by
outrageously high interest rates and fees. Worse, many taxpayers get
caught with outstanding loans that they can't pay off because a mistake
was made on their tax return resulting in a smaller than anticipated
refund. Many of these loans, when annualized, have interest rates over
200 percent.
The majority of these loan recipients are low to moderate income
taxpayers, many of whom receive an earned income tax credit. The EITC
has become one of the most effective tools for fighting poverty and
benefitting working families, and so it is essential that every dollar
of this credit goes to the taxpayer.
Congress is not without fault. We have made the EITC so complicated
that many taxpayers feel they have to pay to have someone prepare their
return. According to the New Mexico Advocates for Children and
Families, 83 percent of the low income population in Gallup used a paid
preparer. Many of these taxpayers won't have the money to pay for this
service unless they are loaned the money up front, hence a
proliferation of refund anticipation loans. Although this bill does not
include simplification of the EITC, I am going to work with my
colleagues to be sure that any tax bill that is passed through this
body has made the EITC easier to calculate.
To help low and moderate income taxpayers, my bill requires all those
involved with RALs to register with the IRS. Treasury will then be
required to determine what is a fair amount of interest and fees to be
charged based on the benefit to the taxpayer and the risk to the
lender. It will also expand the Volunteer Income Tax Assistance program
by directly giving them funding to operate. VITA clinics are one of the
few places low income taxpayers can go to get assistance on their tax
returns. We need to expand this program. My bill also directs the IRS
to focus its electronic filing services on the taxpayer. I am afraid
that our desire to meet Congressional mandates for increasing
electronic filing rates may have caused the IRS to forget why we are
advancing electronic filing, to benefit the taxpayer.
Finally, this legislation will create several mobile electronic tax
filing centers, at least one of which must be located near a Native
American reservation or pueblo. Currently, many low income taxpayers do
not have the ability to file electronically unless they go to a
commercial electronic filer where there is a fee to file. This trial
program would allow these taxpayers to enjoy the benefits of electronic
filing, such as a shorter turn around time for a refund, without having
to find the money to pay for it.
I look forward to working with my colleagues to expand this important
legislation.
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. 802
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 ``Low Income Taxpayer
Protection Act of 2001''.
SEC. 2. REGULATION OF INCOME TAX RETURN PREPARERS AND REFUND
ANTICIPATION LOAN PROVIDERS.
(a) Definitions.--In this Act:
(1) Income tax return preparer.--
(A) In general.--The term ``income tax return preparer''
means any individual who is an income tax return preparer
(within the meaning of section 7701(a)(36) of the Internal
Revenue Code of 1986) who prepares not less than 5 returns of
tax imposed by subtitle A of such Code or claims for refunds
of tax imposed by such subtitle A per taxable year.
(B) Exception.--Such term shall not include a federally
authorized tax practitioner within the meaning of section of
7526(a)(3) of such Code.
(2) Refund anticipation loan provider.--The term ``refund
anticipation loan provider'' means a person who makes a loan
of money or of any other thing of value to a taxpayer because
of the taxpayer's anticipated receipt of a Federal tax
refund.
(3) Secretary.--The term ``Secretary'' means the Secretary
of the Treasury.
(b) Regulations.--
(1) Registration required.--
(A) In general.--Not later than 120 days after the date of
the enactment of this Act, the Secretary shall promulgate
regulations that--
(i) require the registration of income tax return preparers
and of refund anticipation loan providers with the Secretary
or the designee of the Secretary, and
(ii) prohibit the payment of a refund of tax to a refund
anticipation loan provider or an income tax return preparer
that is the result of a tax return which is prepared by the
refund anticipation loan provider or the income tax return
preparer which does not include the refund anticipation loan
provider's or the income tax return preparer's registration
number.
(B) No disciplinary action.--The regulations shall require
that an applicant for registration must not have demonstrated
any conduct that would warrant disciplinary action under part
10 of title 31, Code of Federal Regulations.
(C) Burden of registration.--In promulgating the
regulations, the Secretary shall minimize the burden and cost
on the registrant.
(2) Rules of conduct.--All registrants shall be subject to
rules of conduct that are consistent with the rules that
govern federally authorized tax practitioners.
(3) Reasonable fees and interest rates.--The Secretary,
after consultation with any expert as the Secretary deems
appropriate, shall include in the regulations guidance on
reasonable fees and interest rates charged to taxpayers in
connection with loans to taxpayers made by refund
anticipation loan providers.
(4) Renewal of registration.--The regulations shall
determine the time frame required for renewal of registration
and the manner in which a registered income tax return
preparer or a registered refund anticipation loan provider
must renew such registration.
(5) Fees.--
(A) In general.--The Secretary may require the payment of
reasonable fees for registration and for renewal of
registration under the regulations.
(B) Purpose of fees.--Any fees required under this
paragraph shall inure to the Secretary for the purpose of
reimbursement of the costs of administering the requirements
of the regulations.
(c) Prohibition.--Section 6695 of the Internal Revenue Code
of 1986 (relating to other assessable penalties with respect
to the preparation of income tax returns for other persons)
is amended by adding at the end the following new subsection:
``(h) Actions on a Taxpayer's Behalf by a Non-Registered
Person.--Any person not registered pursuant to the
regulations promulgated by the Secretary under the Low Income
Taxpayer Protection Act of 2001 who--
``(1) prepares a tax return for another taxpayer for
compensation, or
``(2) provides a loan to a taxpayer that is linked to or in
anticipation of a tax refund for the taxpayer,
shall be subject to a $500 penalty for each incident of
noncompliance.''.
(d) Coordination with Section 6060(a).--The Secretary shall
determine whether the registration required under the
regulations issued pursuant to this section should be in lieu
of the return requirements of section 6060.
(e) Paperwork Reduction.--The Secretary shall minimize the
amount of paperwork required of a income tax return preparer
or a refund anticipation loan provider to meet the
requirements of these regulations.
SEC. 3. IMPROVED SERVICES FOR TAXPAYERS.
(a) Electronic Filing Efforts.--
(1) In general.--The Secretary shall focus electronic
filing efforts on benefiting the taxpayer by--
(A) reducing the time between receipt of an electronically
filed return and remitting a refund, if any,
(B) reducing the cost of filing a return electronically,
(C) improving services provided by the Internal Revenue
Service to low and moderate income taxpayers, and
(D) providing tax-related computer software at no or
nominal cost to low and moderate income taxpayers.
(2) Report.--Not later than 120 days after the date of the
enactment of this Act, the Secretary shall prepare and submit
to Congress a report on the efforts made pursuant to
paragraph (1).
(b) Volunteer Income Tax Assistance Program.--
(1) Study.--The Secretary shall undertake a study on the
expansion of the volunteer income tax assistance program to
service more low income taxpayers.
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(2) Report.--Not later than 120 days after the date of the
enactment of this Act, the Secretary shall prepare and submit
to Congress a report on the study conducted pursuant to
paragraph (1).
(3) Authorization of appropriations.--
(A) In general.--There is authorized to be appropriated to
the Secretary for volunteer income tax assistance clinics
$6,000,000, to remain available until expended.
(B) Use of funds.--Such amounts appropriated under
subparagraph (A) shall be used for the operating expenses of
volunteer income tax assistance clinics, expenses for
providing electronic filing expenditures through such
clinics, and related expenses.
(c) Tele-Filing.--The Secretary shall ensure that tele-
filing is available for all taxpayers for the filing of tax
returns with respect to taxable years beginning in 2001.
(d) Deposit Indicator Program.--
(1) Review.--The Secretary shall review the decision to
reinstate the Deposit Indicator program.
(2) Report.--Not later than 120 days after the date of the
enactment of this Act, the Secretary shall prepare and submit
to Congress a report on the review made pursuant to paragraph
(1).
(e) Direct Deposit Accounts.--The Secretary shall allocate
resources to programs to assist low income taxpayers in
establishing accounts at financial institutions that receive
direct deposits from the United States Treasury.
(f) Pilot Program for Mobile Tax Return Filing Offices.--
(1) In general.--The Secretary shall establish a pilot
program for the creation of four mobile tax return filing
offices with electronic filing capabilities.
(2) Location of service.--
(A) In general.--The mobile tax return filing offices shall
be located in communities that the Secretary determines have
a high incidence of taxpayers claiming the earned income tax
credit.
(B) Indian reservation.--At least one mobile tax return
filing office shall be on or near an Indian reservation (as
defined in section 168(j)(6) of the Internal Revenue Code of
1986).
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