[Congressional Record Volume 148, Number 136 (Wednesday, October 16, 2002)]
[Senate]
[Pages S10573-S10587]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS
By Mr. LEAHY (for himself, Mr. Jeffords, and Ms. Collins):
S. 3114. A bill to ensure that a public safety officer who suffers a
fatal heart attack or stroke while on duty shall be presumed to have
died in the line of duty for purposes of public safety officer survivor
benefits; to the Committee on the Judiciary.
Mr. LEAHY. Mr. President, I rise today with Senators Jeffords and
Collins to introduce the Hometown Heroes Survivors Benefits Act of
2002. Our bipartisan legislation will improve the Department of
Justice's Public Safety Officers' Benefits, PSOB, Program by allowing
families of public safety officers who suffer fatal heart attacks or
strokes to qualify for Federal survivor benefits.
Public safety officers are among our most brave and dedicated public
servants. I applaud the efforts of all members of fire, law
enforcement, and rescue organizations nationwide who are the first to
respond to more than 1.6 million emergency calls annually, whether
those calls involve a crime, fire, medical emergency, spill of
hazardous materials, natural disaster, act of terrorism, or
transportation accident, without reservation. They act with an
unwavering commitment to the safety and protection of their fellow
citizens, and are forever willing to selflessly sacrifice their own
lives to provide safe and reliable emergency services to their
communities. Sadly, this dedication to service can result in tragedy,
as was evident by the bravery displayed on September 11th.
In the days and months since September 11th, I have been particularly
touched by the stories of unselfish sacrifices made by scores of New
York City first responders who bravely entered the World Trade Center
that day with the singular goal of saving lives. More than one hundred
firefighters in America lose their lives every year and thousands are
injured in the line of duty. While PSOB benefits can never be a
substitute for the loss of a loved one, the families of all our fallen
heroes deserve to collect these funds.
The PSOB Program provides a one-time financial benefit to the
eligible survivors of federal, state, and local public safety officers
whose deaths are the direct and proximate result of a traumatic injury
sustained in the line of duty. Last year, Congress improved the PSOB
Program by streamlining the process for families of public safety
officers killed or injured in connection with prevention,
investigation, rescue or recovery efforts related to a terrorist
attack. We also retroactively increased the total benefits available by
$100,000 as part of the USA PATRIOT Act. The PSOB Program now provides
approximately $250,000 in benefits to the families of law enforcement
officers, firemen, emergency response squad members, and ambulance crew
members who are killed in the line of duty. Unfortunately, the issue of
including heart attack and stroke victims in the PSOB Program was not
addressed at that time.
The PSOB Program does not cover deaths resulting from occupational
illness or pulmonary or heart disease unless a traumatic injury is a
substantial factor to the death. However, if toxicology reports
demonstrate a carbon monoxide level of 10 percent or greater, 15
percent or greater for the smoker, at the onset of a heart attack
benefits are paid. The PSOB Program has developed a formula that
addresses oxygen therapy provided to the victim prior to the death.
Heart attack and cardiac related deaths account for almost half of
all firefighter fatalities, between 45-50 deaths, and an average of 13
police officer deaths each year. Yet the families of these fallen
heroes are rarely eligible to receive PSOB benefits. In January 1978,
special Deputy Sheriff Bernard Demag of the Chittenden County Sheriff's
Office suffered a fatal heart attack within two hours of his chase and
apprehension of an escaped juvenile whom he had been transporting. Mr.
Demag's family spent nearly two decades fighting in court for workers'
compensation death benefits all to no avail. Clearly, we should be
treating surviving family members with more decency and respect.
Public safety is dangerous, exhausting, and stressful work. A first
responder's chances of suffering a heart attack or stroke greatly
increase when he or she puts on heavy equipment and rushes into a
burning building to fight a fire and save lives. The families of these
brave public servants deserve to participate in the PSOB Program if
their loved ones die of a heart attack or other cardiac related
ailments while selflessly protecting us from harm.
First responders across the country now face a new series of
challenges as they respond to over 1.6 million emergency calls this
year, from responding to fires and hazardous material spills to
providing emergency medical services to reacting to weapons of mass
destruction. They do this with an unwavering commitment to the safety
of their fellow citizens, and are forever willing to selflessly
sacrifice their own lives to protect the lives and property of their
fellow citizens. It is time for Congress to show its support and
appreciation for these extraordinarily brave and heroic public safety
officers. We should quickly work to pass the Hometown Heroes Survivors
Benefit Act.
Mr. JEFFORDS. Mr. President, I am pleased to join with Senators Leahy
and Collins in introducing the Senate counterpart of the Hometown
Heroes Survivors Benefits Act of 2002. This legislation closes a gap in
the survivor benefits the Federal Government provides to the families
of public safety officers who die in the line of duty.
These public safety officers are the people that keep our streets
safe, help to fight fires, and respond to emergency calls. The Federal
Government has rightfully created a one-time financial benefit for the
families of public safety officers who die in the line of duty to
recognize the sacrifice and importance of public safety officers in our
society.
Unfortunately, due to a technicality in the law some families of
public safety officers that die of a heart attack or stroke are being
denied this important financial benefit. This is unacceptable and we
need to make sure that we enact this legislation to ensure that the
families of these public safety officers are covered.
Many years ago I was a volunteer firefighter in my small town of
Shrewsbury, VT. It was a very demanding, stressful, and exhausting job.
Every year almost half the firefighter fatalities in the United States
are from heart attack or cardiac related reasons. Not all of these
deaths occur while fighting the fire, but are related to their
unselfish dedication to the task at hand.
This legislation would provide that a public safety officer who dies
as the result of a heart attack or stroke suffered while on duty or
within 24 hours after participating in a training exercise or
responding to an emergency situation shall be presumed to have died as
the direct and proximate result of a personal injury sustained in the
line of duty for purposes of survivor benefits. These public safety
officers are out there everyday ensuring our safety; Congress needs to
ensure that the surviving families receive this important financial
benefit.
I encourage my colleagues to join me in recognizing the heroism and
sacrifice of public safety officers by co-sponsoring this important
legislation.
______
By Mr. CORZINE:
S. 3116. A bill to permanently eliminate a procedure under which the
Bureau of alcohol, Tobacco, and Firearms
[[Page S10574]]
can waive prohibitions on the possession of firearms and explosives by
convicted felons, drug offenders, and other disqualified individuals;
to the Committee on the Judiciary.
Mr. CORZINE. Mr. President, I rise today to introduce important gun
control legislation that would shut down permanently the guns for
felons program.
For too many years the Federal Government spent millions of dollars a
year to restore the gun privileges of convicted felons. Fortunately,
for the last ten years, Congress has seen fit to defund the program,
through annual funding restrictions.
Congress was right to defund a program that, according to the
Violence Policy Center, restored gun privileges for thousands of
convicted felons, at a cost of millions of dollars to the taxpayer. As
the Violence Policy Center demonstrated, a number of these felons went
on to commit violent crimes.
I believe strongly that we must do all we can to keep guns out of
criminals' hands. I am pleased that every year Congress has renewed the
funding ban, which prohibits ATF from processing firearms applications
from convicted felons. Indeed, by introducing this legislation today, I
do not in any way intend to imply that the annual funding bans are not
sufficient to shut down the guns for felons program.
Today the Supreme Court is hearing arguments in a case that could
jeopardize our efforts to ensure that convicted felons do not have
access to guns by possibly giving Federal judges the power to rearm
those felons regardless of the Congressional funding ban. I have been
active in pushing for the funding ban, and it certainly was not my
intention, nor do I believe it was anyone else's intention, to give
judges power to unilaterally give felons their firearm privileges back.
It is hard enough for ATF, after conducting an intensive investigation,
to make judgments about an individual felon; for a court to do it on
its own is completely inappropriate. To put it simply, courts will lack
the resources to make an informed judgment in this regard. In any case,
Congress' intent, and the appropriate rule, is that felons should be
prohibited from owning guns period. Enacting my legislation will
eliminate the guns for felons program permanently and prevent the need
for Congress to revisit this issue every year.
______
By Mr. BURNS:
S. 3117. A bill to extend the cooling off period in the labor dispute
between the Pacific Maritime Association and the International
Longshore and Warehouse Union; to the Committee on Health, Education,
Labor, and Pensions.
Mr. BURNS. Mr. President, last year our Nation's economy was briefly
held hostage by an attack on American soil. We have overcome that
challenge and are now charging ahead in the right direction.
It is this kind of American resolve that has built this Nation into
the thriving world power it is today.
However, recent developments on the West Coast have created a
different kind of crisis but no less damaging to America's economy.
On Sunday, September 29, the Pacific Maritime Association, PMA,
locked out workers in twenty-nine West Coast ports for more than a week
in response to a reported work-slow down by members of the
International Longshore and Warehouse Union, ILWU.
Last week, President Bush invoked the Taft-Hartley Act that ended the
lock out allowing workers to go back to work and negotiators to work
through these problems over the course of an 80-day cooling-off period.
I applaud the President's action. However, I am concerned about
conflicting messages being sent by the ILWU and the PMA. More
importantly, I am concerned about the lack of interest either party,
management or labor, has regarding the economic fate of America's
workers and America's agricultural economy.
The economic impact of this labor dispute has temporarily crippled
our Nation's economy. This dispute has threatened America's national
health and safety. In many economic sectors, jobs were lost, workers
were sent home and Americans will temporarily pay higher prices for
consumer goods.
However, once the President made his intention known to invoke Taft-
Hartley, the AFL-CIO issued an Oct. 7 press release charging the
President's action: ``preempts the collective bargaining process and
undermines the rights of workers with union representation to negotiate
on equal footing with their employers''.
Neither side in a collective bargaining negotiating process should be
able to leverage the nation's economy in an attempt to control the
debate. Doing so is a very selfish act. And criticizing the President
for his action is a very shortsighted approach to these negotiations.
The ILWU claims they want to go back to work. Due to the only
recourse available on behalf of the American economy, they are, today,
back at work.
I question the AFL-CIO's interest in the American economy. Does the
AFL-CIO not recognize the impact this labor disruption has on the
nation's economy? At stake are thousands of jobs and millions of
dollars in commerce. Let me clarify that impact and put a Montana stamp
on it.
Exports are critical to the American economy. American exporters ship
their products overseas, including agricultural exports such as wheat,
corn, soybeans, and pork products, and manufactured goods of all shapes
and sizes.
West Coast ports are crucial to U.S. trade, handling over $300
billion in trade each year. These ports handle more than half of
all containerized imports and exports.
West Coast ports handle 25 percent of all U.S. grain exports, 40
percent of all wheat, 14 percent of all corn, and seven percent of all
soybeans exports.
Sixty-five percent of all U.S. containerized food trade moved through
these ports in 2001. During the lockout, the dispute was estimated to
have cost the America's economy $2 billion a day.
Trade with Asia is particularly affected. Japan, Korea, Taiwan, Hong
Kong, China, Indonesia, Thailand, the Philippines, India, and Malaysia
are the top 10 destinations for containerized U.S. agriculture
products. Together, these nations receive 85 percent of all
agricultural shipments from the West Coast.
If these countries cannot count on U.S. exports, they will turn to
our competitors. Our farmers and ranchers spend precious resources on
market development activities. It's very frustrating to lose shares of
those markets solely because a small group of labor and management
representatives cannot agree on a resolution.
Again, I applaud President Bush's decision last week. I encouraged
his action and stand by him now. Invoking Taft-Hartley was the only
short-term remedy for the dispute that temporarily closed the West
Coast ports.
Furthermore, during the cooling off period, I urge the President to
use his powers to judicially enforce productivity is not purposely
restricted.
I do not stand here today in support of the PMA's position, nor do I
stand here today in support of the ILWU's position. Rather, I stand
here today in support of the Nation's economy, the American worker, the
Montana farmer, the retailer, the food distributor, the truck and rail
operators, the consumer, and every other American that is being harmed
by this action.
I believe collective bargaining can and has worked more often than
not. However, it is arrogant for any management or labor group to
paralyze commerce in our nation.
Reopening the ports, even if only for 80 days, will benefit the
economy. The parties will be given time to settle the dispute.
Manufacturers and retailers will be given additional time to adjust and
prepare.
Invoking Taft-Hartley was the right thing to do. It was the
appropriate action to take to protect our economy, to protect American
workers, to ensure we have a healthy and happy holiday season.
The 80-day cooling-off period will allow both parties to re-evaluate
their respective positions. Furthermore, it will give the ports an
opportunity to clear up a mounting backlog that has
[[Page S10575]]
paralyzed much of our West Coast export and import commerce. And
finally, it will allow the ILWU workers to go back to work earning a
living for their families.
Today, I would like to introduce a bill that would extend the
cooling-off period thirty days until the end of January. At present the
80 day cooling off period will end between Christmas Day and New Years
Day.
This is a move that will not impact the negotiations between the two
parties. However, it will allow the cooling-off period to end at the
end of January rather than the end of December and between Christmas
and New Years.
Extending the deadline beyond the Holiday season will help to unsnarl
the mess created by this dispute; give the ports another thirty days to
clear up the backlog. Finally, it will give Congress and the American
people an ability to approach the end of this cooling-off period fully
aware of the importance of this negotiation and uninterrupted by the
holiday season.
If negotiators are able to work out a resolution, we have lost
nothing. However, if in the case, there is no resolution by the end of
the cooling-off period, this extension could save thousands of American
jobs and millions of dollars in economic losses.
I encourage my colleagues to join me in this effort.
______
By Mr. ENSIGN (for himself, Mr. Allard, and Ms. Cantwell):
S. 3118. A bill to strengthen enforcement of provisions of the Animal
Welfare Act relating to animal fighting, and for other purposes; to the
Committee on Agriculture, Nutrition, and Forestry.
Mr. ENSIGN. Mr. President, I am pleased to be joined by Senators
Allard and Cantwell to introduce the Animal Fighting Enforcement Act. I
would like to thank my colleagues for their support in this endeavor to
protect the welfare of animals. This legislation targets the troubling,
widespread and sometimes underground activities of dogfighting and
cockfighting where dogs and birds are bred and trained to fight to the
death. This is done for the sheer enjoyment and illegal wagering of the
animals' handlers and spectators.
These activities are reprehensible and despicable. Our States' laws
reflect this sentiment. All 50 States have prohibited dogfighting. It
is considered a felony in 46 States. Cockfighting is illegal in 47
States, and it is a felony in 26 States. In my home State of Nevada,
both dogfighting and cockfighting are considered felonies. In fact, it
is a felony to even attend a dogfighting or cockfighting match.
Unfortunately, in spite of public opposition to extreme animal
suffering, these animal fighting industries thrive. There are 11
underground dogfighting publications, and several above-ground
cockfighting magazines. These magazines advertise and sell animals and
the materials associated with animal fighting. They also seek to
legitimize this shocking practice.
During the consideration of the Farm Bill, a provision was included
that closed loopholes in Section 26 of the Animal Welfare Act. Both the
House and the Senate increased the maximum jail time for individuals
who violate any provision of Section 26 of the Animal Welfare Act from
one year to two years, making any violation a Federal felony. However,
during the conference, the jail time increase was removed.
The legislation that I am introducing today seeks to do three things.
First, it restores the jail time increase to treat the violations as a
felony. I am informed by U.S. Attorneys that they are hesitant to
pursue animal fighting cases with merely a misdemeanor penalty. To
illustrate this, it is important to note that only three cases since
1976 have advanced, even though the USDA has received innumerable tips
from informants and requests to assist with state and local
prosecutions. Increased penalties will provide a greater incentive for
federal authorities to pursue animal fighting cases.
Second, the bill prohibits the interstate shipment of cockfighting
implements, such as razor-sharp knives and gaffs. The specific knives
are commonly known as ``slashers.'' The slashers and ice-pick-like
gaffs are attached to the legs of birds to make the cockfights more
violent and to induce bleeding of the animals. These weapons are used
only in cockfights. Since Congress has restricted shipment of birds for
fighting, it should also restrict implements designed specifically for
fights.
Finally, the bill updates language regarding the procedures that
enforcement agents follow when they seize the animals. This regards the
proper care and transportation of the animals that are seized. It also
states that the court may order the convicted person to pay for the
costs incurred in the housing, care, feeding, and treatment of the
animals.
I appreciate the support of both Senators Allard and Cantwell in this
effort, and look forward to the overwhelming support of my other
colleagues in the Senate. I also wish to recognize Representative
Robert Andrews for his leadership on the House version of this bill.
Surely, this is an issue that must be addressed as soon as possible. We
cannot allow this barbaric practice to continue in our civilized
society.
______
By Mr. GRAHAM (for himself and Mr. Fitzgerald):
S. 3119. A bill to amend the Public Health Service Act to ensure the
guaranteed renewability of individual health insurance coverage
regardless of the health status-related factors of an enrollee; to the
Committee on Health, Education, Labor, and Pensions.
Mr. GRAHAM. Mr. President, I am pleased to introduce the ``Health
Insurance Fairness Act of 2002'' and I am very pleased to have Senator
Fitzgerald join me as an original cosponsor. This legislation would
prohibit the insurance practice of reunderwriting at renewal, thereby
protecting the millions of Americans relying on individual health
insurance policies.
The need for this legislation was brought to my attention by an
excellent April 9, 2002 article in the Wall Street Journal that
documented the impact of reunderwriting on a married couple from
Florida.
Shaneen Wahl of Port Charlotte, FL was diagnosed with breast cancer
in 1996. At that time, she and her husband Tom were paying $417 a month
for health insurance. In addition to coping with cancer, the Wahls
began to face rapidly increasing premiums, and by August 2000 their
insurer informed them that their new rate would be $1,881 a month. This
premium increase wasn't due to non-payment of premiums or any other
action of the Wahls. It was the result of reunderwriting conducted by
the Wahl's insurance company.
Reunderwriting at renewal is a practice that forces people who have
become ill to pay substantial premium increases or lose their health
insurance. While most insurers evaluate an individual's medical history
only at the outset, some have adopted the practice of reviewing
customers' health status annually. The purpose of this review is to
determine if the individual has developed a medical condition or has
filed claims; if such a determination is made, the company raises the
individual's premium. This practice contributes enormously to the
instability of health insurance by making it difficult, it not
impossible, for people who have paid insurance premiums for years to
continue that health insurance at the very time they need it the most.
How does it work? Carriers reunderwriting at renewal charge
substantially higher renewal premiums to policyholders who have been
diagnosed with an illness or had medical claims than they charge other
policyholders. The carriers do this by transferring a policyholder to a
higher risk class than the policyholder was in when the policy was
issued or in some cases by manually adjusting the policyholder's rate
based on his or her medical claims. In either case, the individual's
premium is based on his or her claims or health status during the
policy year. For example, in another case from Florida, Bruce and Wanda
Chambers of St. Augustine saw their rates increase from $300 per month
to $780 per month in just one year after Wanda was diagnosed with
diabetes.
Consumers purchase insurance so that they will have access to health
care should they become ill, as in the example of Wanda Chambers. If
carriers are allowed to increase premium rates based on health status
at renewal, consumers face a choice between the very two outcomes they
had
[[Page S10576]]
planned to avoid by purchasing insurance in the first place: they can
drop the insurance policy and thus likely forgo access to health care
in times of illness, or they can pay the grossly inflated premiums and
thus face financial ruin.
The practice of reunderwriting at renewal violates the spirit of
health insurance guaranteed renewability requirements under state and
federal law. In the 1990's, the National Association of Insurance
Commissioners, NAIC, developed model laws to prohibit insurance
companies from canceling policies once an individual became sick. In
1997, the Health Insurance Portability and Accountability Act, HIPAA,
applied this requirement to all health insurance policies subject to
HIPAA. As a result, carriers can no longer cancel individuals because
of their medical claims.
Reunderwriting is a way to circumvent these requirements, and has
been justified as a means of holding down premiums, for the healthy.
However, a July 17, 2002 memo to all NAIC Members from Steven B.
Larsen, Chair of the Health Insurance & Managed Care (B) Committee
clarifies that the practice of reunderwriting is illegal under NAIC
Model Laws:
The committee also noted that the practice is contrary to
adopted NAIC policy, and is illegal under NAIC Model Laws
governing the individual market. The Small Employer and
Individual Health Insurance Availability Model Act (Model
#35) provides for adjusted community rating, and health
status is not one of the factors that can be used to set
rates. The Individual Health Insurance Portability Model Act
(Model #37) provides for the use of rating characteristics,
and health status is not one of the listed characteristics.
More specifically that model also provides that changes in
health status after issue, and durational rating, are not to
be used in setting premiums for individual policies.
Insurance companies should not be allowed to manage health-care costs
by targeting individuals for premium increases because an individual
was diagnosed with an illness or has had medical claims. Doubling or
tripling premiums for only the individuals who have been diagnosed with
an illness forces those individuals to drop their policies and is
functionally the same as not renewing coverage.
Not only is reunderwriting bad for consumers, but it creates a
competitive disadvantage to the many reputable insurance companies that
agree that this practice is contrary to the public interest and
undermines the theory behind insurance. Faced with the practice being
used by some companies, the Wall Street Journal has reported that other
carriers are ``closely watching'' this practice intending to adopt a
similar practice either to avoid a competitive disadvantage or to
improve their bottom line. While selective targeting improves the
profitability of the reunderwriter, it shifts the responsibility for
higher risk people to other insurers or employers or local and state
government health programs.
The legislation we are introducing today would make health insurance
more secure. The legislation would clarify that guaranteed renewal of
health insurance means that insurers cannot target individuals for
premium increases because the have had claims or a new disease
diagnosis. The bill would ensure that individuals will not be priced
out of the market for health insurance at the very time that they need
it most.
The goals of this legislation are simple: 1. To strengthen HIPAA's
promise of guaranteed renewable coverage and make private health
insurance more secure for millions of Americans, and 2. to hold all
insurers accountable to a level playing field of reasonable standards
so they can compete fairly without dumping customers when they get
sick.
The ``Health Insurance Fairness Act'' will help the many millions of
people who rely on the individual health insurance market: those that
are self-employed, those employed by small businesses unable to get
group coverage, early retirees who rely disproportionately on
individual health insurance if their COBRA runs out before Medicare
begins, and others whose employers don't provide health benefits.
I urge my colleagues to cosponsor the ``Health Insurance Fairness
Act'' and I thank the Chair.
______
By Mr. GRASSLEY (for himself, Mr. Baucus, and Ms. Collins):
S. 3120. A bill to impose restrictions on the ability of officers and
employees of the United States to enter into contracts with
corporations or partnerships that move outside the United States while
retaining substantially the same ownership; to the Committee on
Governmental Affairs.
Mr. GRASSLEY. Mr. President, I rise today to offer a bill on behalf
of Sen. Baucus and myself to address the issue of inverting
corporations that are awarded contracts by the federal government. Our
bill is the ``Reclaiming Expatriated Contracts and Profits'', RECAP,
Act.
Inverting corporations set up a folder in a foreign filing cabinet or
a mail box overseas and call that their new foreign ``headquarters.''
This allows companies to escape millions of dollars of Federal taxes
every year. In April of this year, Sen. Baucus and I introduced the
``Reversing the Expatriation of Profits Offshore'', REPO, Act to shut
down these phony corporate inversions. Today, our REPO bill sits in the
Care Act, awaiting Senate passage.
You would think that the ``greed-grab'' of corporate inversions would
satisfy most companies, but unfortunately it is not enough. After these
corporations invert and save millions in taxes, they then come back
into the United States to obtain juicy contracts with the Federal
Government.
Imagine the nerve. They create phony foreign headquarters to escape
taxes and then use other peoples' taxes to turn a profit. That's really
something, something that needs to be stopped.
Let's look at some of the numbers. Tyco had over 1700 contracts in
2001, worth over $286 million dollars. Accenture had contracts worth
nearly $279 million. Ingersoll Rand left the United States for Bermuda,
where it reportedly pays less than $28,000 a year to register its phony
headquarters and receives $40 million in U.S. tax savings. Ingersoll
Rand had more than 200 government contracts in 2001, worth over $12
million.
I was the first member of Congress to disclose that inverting
corporations were receiving Federal contracts, back in March of this
year. Out of respect for the committee system, I have waited for the
committees with jurisdiction over government contracts to act on this
issue. They have not. Instead, we have seen a series of politically-
inspired amendments offered in Congress, all of which are ineffective,
easily evaded, and, if enacted, could cost thousands of Americans their
jobs. I then read in the paper last week that the Defense
Appropriations conferees dropped one of those amendments, rather than
try to rewrite it. I decided enough is enough. It is time for serious
legislation on this issue.
Chairman Baucus and I offer our bipartisan RECAP bill as a compliment
to our earlier REPO bill on corporate inversions. For future corporate
inversions, our RECAP bill will bar the inverting company from
receiving Federal contracts. For the inversions that have already
gotten out before the REPO bill can be enacted, our RECAP bill will
make them send back their ill-gotten tax savings by forcing them to
lower their bids in order to obtain government contracts. The RECAP
bill does not unwind Federal contracts that were legal when they were
entered into. Therefore, unlike the other proposals, our RECAP bill
will not throw thousands of Americans out of a job. The bill we submit
today has only one objective: to permanently place corporate inversions
on the endangered species list.
I am aware that many of my colleagues believe this measure is
unnecessary because inverting corporations pay U.S. taxes on their
profits from Federal contracts. It is generally true that profits
earned from a Federal contract are taxable in the United States, but
those profits are easily reduced when an inverter creates phony
deductions through its inversion structure. For example, most inverted
companies create phony interest deductions for interest that is
fictitiously paid to the ``file folder'' foreign headquarters.
Objections to this bill simply overlook the real insult to the American
people: these inverted companies take other peoples' tax dollars to
make a profit, but they won't pay their share of taxes to keep America
strong. And that's just wrong.
So let me be clear to everyone developing or contemplating one of
these inversion deals, you proceed at your own peril. We are not only
going after the
[[Page S10577]]
corporate expatriation abuse, but also the abusers who seek big
government contracts while skirting their U.S. tax obligations. I
intend to pursue this issue throughout the remainder of this Congress
and into the next.
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. 3120
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 ``Reclaiming Expatriated
Contracts and Profits Act''.
SEC. 2. RESTRICTIONS ON FEDERAL CONTRACTS WITH CERTAIN
INVERTED ENTITIES.
(a) Restrictions.--
(1) Ban on certain inverted entities.--Notwithstanding any
other provision of law--
(A) no officer or employee of the United States may enter
into, extend, or modify a contract with a foreign
incorporated entity treated as an inverted domestic
corporation under subsection (c) during the restriction
period for the entity, and
(B) any officer or employee of the United States entering
into a contract after the date of the enactment of this Act
shall include in the contract a prohibition on the
subcontracting of any portion of the contract to any foreign
incorporated entity treated as an inverted domestic
corporation under subsection (c) during the restriction
period for the entity.
(2) Mandatory reduction in contract evaluation of certain
entities.--
(A) In general.--If, during the restriction period for an
acquired entity to which this section applies, the entity
makes an offer in response to a solicitation of offers for a
contract with the United States, any officer or employee of
the United States evaluating the offer shall, solely for
purposes of awarding the contract, adjust the evaluation as
follows:
(i) In the case of a contract to be entered into with an
offeror selected solely on the basis of price, the price
offered by such acquired entity shall be deemed to be equal
to 110 percent of the price actually offered.
(ii) In the case of a contract to be entered into with an
offeror on the basis of two or more evaluation factors, the
quantitative evaluation of the offer made by such acquired
entity shall be deemed to be reduced by 10 percent.
(B) Application to certain contractors.--If a person other
than an entity to which this paragraph applies makes an offer
for a contract with the United States, and it is reasonable
to assume at the time of the offer that any portion of the
work will be subcontracted to such an entity, subparagraph
(A) shall be applied to such offer in the same manner as if
the person making the offer were such an entity.
(3) Application to related entities.--Paragraphs (1) and
(2) shall also apply during the restriction period for an
entity to--
(A) a member of an expanded affiliated group which includes
the entity, and
(B) any other related person with respect to the entity.
(b) Exceptions.--
(1) Presidential waiver.--The President of the United
States may waive the application of subsection (a) with
respect to any contract if the President determines that the
waiver is necessary in the interest of national security.
(2) Exception where no tax avoidance purpose.--
(A) In general.--This section shall not apply to a foreign
incorporated entity or an acquired entity if the entity
requests, and the Secretary of the Treasury issues, a
determination letter that the acquisition described in
subsection (c)(1)(A) with respect to the entity did not have
as one of its principal purposes the avoidance of Federal
income taxation.
(B) Procedures.--The Secretary of the Treasury shall
prescribe the time and manner of filing a request under this
paragraph.
(C) Stay of restriction period.--
(i) In general.--The restriction period with respect to an
entity filing a request under this paragraph shall not begin
until the Secretary of the Treasury notifies the entity that
it will not issue a determination letter with respect to the
request.
(ii) No action.--If the Secretary takes no action with
respect to a request during the 1-year period beginning on
the date of the request (or such longer period as the
Secretary and the entity may agree upon), the Secretary shall
be treated as having issued a determination letter described
in subparagraph (A). This clause shall not apply to a request
if the entity does not submit the request in proper form or
the entity does not provide the information the Secretary
requests to process the request.
(c) Inverted Domestic Corporation.--For purposes of this
section--
(1) In general.--A foreign incorporated entity shall be
treated as an inverted domestic corporation if, pursuant to a
plan (or a series of related transactions)--
(A) the entity completes after the date of the enactment of
this Act the direct or indirect acquisition of substantially
all of the properties held directly or indirectly by a
domestic corporation or substantially all of the properties
constituting a trade or business of a domestic partnership,
(B) after the acquisition at least 80 percent of the stock
(by vote or value) of the entity is held--
(i) in the case of an acquisition with respect to a
domestic corporation, by former shareholders of the domestic
corporation by reason of holding stock in the domestic
corporation, or
(ii) in the case of an acquisition with respect to a
domestic partnership, by former partners of the domestic
partnership by reason of holding a capital or profits
interest in the domestic partnership, and
(C) the expanded affiliated group which after the
acquisition includes the entity does not have substantial
business activities in the foreign country in which or under
the law of which the entity is created or organized when
compared to the total business activities of such expanded
affiliated group.
(2) Rules for application of subsection.--In applying this
subsection, the following rules shall apply:
(A) Certain stock disregarded.--There shall not be taken
into account in determining ownership for purposes of
paragraph (1)(B)--
(i) stock held by members of the expanded affiliated group
which includes the foreign incorporated entity, or
(ii) stock of such entity which is sold in a public
offering related to the acquisition described in paragraph
(1)(A).
(B) Plan deemed in certain cases.--If a foreign
incorporated entity acquires directly or indirectly
substantially all of the properties of a domestic corporation
or partnership during the 4-year period beginning on the date
which is 2 years before the ownership requirements of
paragraph (1)(B) are met with respect to such corporation or
partnership, such actions shall be treated as pursuant to a
plan.
(C) Certain transfers disregarded.--The transfer of
properties or liabilities (including by contribution or
distribution) shall be disregarded if such transfers are part
of a plan a principal purpose of which is to avoid the
purposes of this section.
(D) Special rule for related partnerships.--For purposes of
applying this subsection to the acquisition of a domestic
partnership, except as provided in regulations, all
partnerships which are under common control (within the
meaning of section 482 of the Internal Revenue Code of 1986)
shall be treated as 1 partnership.
(E) Treatment of certain rights.--The Secretary of the
Treasury shall prescribe such regulations as may be
necessary--
(i) to treat warrants, options, contracts to acquire stock,
convertible debt instruments, and other similar interests as
stock, and
(ii) to treat stock as not stock.
(d) Acquired Entity to Which Section Applies.--
(1) In general.--This section shall apply to an acquired
entity if a foreign incorporated entity would be treated as
an inverted domestic corporation with respect to the acquired
entity if subsection (c)(1)(B) were applied by substituting
``50 percent'' for ``80 percent''.
(2) Application to certain acquisitions before enactment.--
This section shall apply to an acquired entity if a foreign
incorporated entity would be treated as an inverted domestic
corporation if subsection (c)(1) were applied--
(A) by substituting ``after December 31, 1996, and on or
before the date of the enactment of this Act,'' for ``after
the date of the enactment of this Act'' in subparagraph (A),
and
(B) by substituting ``50 percent'' for ``80 percent'' in
subparagraph (B).
(3) Acquired entity.--For purposes of this section--
(A) In general.--The term `acquired entity' means the
domestic corporation or partnership substantially all of the
properties of which are directly or indirectly acquired in an
acquisition described in subsection (c)(1)(A) to which this
subsection applies.
(B) Aggregation rules.--Any domestic person bearing a
relationship described in section 267(b) or 707(b) of the
Internal Revenue Code of 1986 to an acquired entity shall be
treated as an acquired entity with respect to the acquisition
described in subparagraph (A).
(e) Definitions.--For purposes of this section--
(1) Expanded affiliated group.--The term ``expanded
affiliated group'' means an affiliated group as defined in
section 1504(a) of the Internal Revenue Code of 1986 (without
regard to section 1504(b)(3) of such Code), except that
section 1504(a) of such Code shall be applied by substituting
``more than 50 percent'' for ``at least 80 percent'' each
place it appears.
(2) Foreign incorporated entity.--The term ``foreign
incorporated entity'' means any entity which is treated as a
foreign corporation for purposes of such Code.
(3) Related person.--The term ``related person'' means,
with respect to any entity, a person which--
(A) bears a relationship to such entity described in
section 267(b) or 707(b) of such Code, or
(B) is under the same common control (within the meaning of
section 482 of such Code) as such entity.
(4) Restriction period.--
(A) In general.--The term ``restriction period'' means,
with respect to any entity, the period--
[[Page S10578]]
(i) beginning on the date substantially all of the
properties to be acquired as part of the acquisition
described in subsection (c)(1)(A) are acquired, and
(ii) to the extent provided by the Secretary of the
Treasury, ending on the date the income and gain from such
properties is subject to United States taxation in the same
manner as if such properties were held by a United States
person.
(B) Special rules for acquired entities.--
(i) 10-year limit.--In the case of an acquired entity to
which subsection (a)(2) applies, the restriction period shall
end no later than the date which is 10 years from the date
described in subparagraph (A)(i) (or, if later, the date of
the enactment of this Act).
(ii) Subsequent acquisitions by unrelated domestic
corporations.--
(I) In general.--Subject to such conditions, limitations,
and exceptions as the Secretary of the Treasury may
prescribe, if, after an acquisition described in subsection
(c)(1)(A) to which subsection (a)(2) applies, a domestic
corporation the stock of which is traded on an established
securities market acquires directly or indirectly any
properties of one or more acquired entities, then the
restriction period for any such acquired entity with respect
to which the requirements of clause (ii) are met shall end
immediately after such acquisition.
(II) Requirements.--The requirements of this subclause are
met with respect to a transaction involving any acquisition
described in subclause (I) if--
(aa) before such transaction the domestic corporation did
not have a relationship described in section 267(b) or 707(b)
of such Code, and was not under common control (within the
meaning of section 482 of such Code), with the acquired
entity, or any member of an expanded affiliated group
including such entity, and
(bb) after such transaction, such acquired entity is a
member of the same expanded affiliated group which includes
the domestic corporation or has such a relationship or is
under such common control with any member of such group, and
is not a member of, and does not have such a relationship and
is not under such common control with any member of, the
expanded affiliated group which before such acquisition
included such entity.
(5) Other definitions.--The terms ``person'', ``domestic'',
and ``foreign'' have the same meanings given such terms by
section 7701(a) of such Code.
(f) Assistance.--The Secretary of the Treasury or his
delegate shall assist officers and employees of the United
States in carrying out the provisions of this section,
including providing assistance in identifying entities to
which this section applies.
Mr. BAUCUS. Mr. President, I join the Ranking Republican Member of
the Finance Committee, Senator Grassley, in introducing bipartisan
legislation to further address the increasing problem of U.S.
corporations reincorporating to tax haven countries to avoid taxes, a
practice also known as a corporate inversion. I am pleased to cosponsor
the Reclaiming Expatriated Contracts and Profits, RECAP, Act which
prohibits the most egregious inverted corporations from receiving
Federal Government contracts.
Last March, Senator Grassley and I announced our intention to
introduce legislation to curb the proliferation of U.S. corporations
changing their Articles of Incorporation to become a corporation of a
foreign tax haven country. On April 11, 2002, we introduced legislation
to address this problem. S. 2119, the Reversing the Expatriation of
Profits Offshore, REPO, Act, was designed to put the brakes on the
potential rush to move U.S. corporate headquarters to tax haven
countries. On June 18, 2002, the Senate Finance Committee sent a strong
message to corporate America by passing S. 2119 by unanimous vote.
But the REPO Act was just the first step to curb inversions. Senator
Wellstone led the effort to eliminate another incentive for these
corporations by restricting them from qualification for government
contracts. The idea is simple. If a corporation wants to, in essence,
renounce their U.S. citizenship, then they shouldn't be entitled to
compete for U.S. government contracts. I applaud Senator Wellstone for
his leadership and willingness to press ahead with restricting inverted
corporations from winning government contracts.
Today, Senator Chuck Grassley and I cosponsor legislation focused on
the same goal as that of Senator Wellstone. The legislation we
introduce today will prevent the most egregious of these inverted
corporations from receiving any U.S. government contracts. These
companies have placed tax avoidance as their first priority and their
U.S. identity as their second priority. The reduction in taxes for
inverted corporations allows them to underbid those corporations that
choose to remain U.S. corporations. This is wrong.
I welcome the opportunity to support RECAP and I urge Congress to act
quickly on this legislation, as it will go a long way toward restoring
public confidence in corporate America.
______
By Mr. BIDEN (for himself, Mr. Lugar, Mr. Domenici, Mrs. Clinton,
Mr. Gregg, and Mr. Schumer):
S. 3121. A bill to authorize the Secretary of State to undertake
measures in support of international programs to detect and prevent
acts of nuclear or radiological terrorism, to authorize appropriations
to the Department of State to carry out those measures, and for other
purposes; to the Committee on Foreign Relations.
Mr. BIDEN. Mr. President, today I am introducing the ``Nuclear and
Radiological Terrorism Threat Reduction Act of 2002.'' This is a bill
to strengthen the efforts of the world community to gain control over
the vast amounts of radioactive materials that, left uncontrolled,
could cause economic disruption and sow terror in American cities.
In the Senate Foreign Relations Committee's hearing on March 6 of
this year, experts testified that an amount of ground up radioactive
cobalt-60 the size of the ball in your ball point pen could contaminate
an area of Manhattan greater than the footprint of the World Trade
Center. The damage and risk would be so great that buildings in the
affected area might have to be abandoned, destroyed, and trucked away
as radioactive waste.
We learned that if a terrorist dispersed a few hundred curies of
radioactive material, the resulting public panic could make much of
downtown Washington, DC uninhabitable without a difficult and expensive
clean-up. Decontamination is a serious and poorly understood problem
because many of the radioactive isotopes a terrorist might choose will
bind chemically to construction materials such as marble and stone used
in our most precious buildings.
One curie of radioactive cesium-137, strontium-90, cobalt-60 or
iridium-192 poses a significant risk. But sources as strong as several
hundred curies are used every day in world-wide commerce. They serve to
estimate the oil in active oil wells, to provide a compact and
convenient source of x-rays to check the quality of welds in the field,
and to provide pencil beams of radiation to measure the amount of soda
or beer in an aluminum can.
Hospitals, primarily in poorer countries, but also in the United
States, use cesium-137 or cobalt-60 sources as strong as several
thousand curies to provide radiation therapy in cancer treatment. Some
of these sources are used in Southern California in mobile treatment
centers mounted in trucks. These rolling radioactive sources move on
the highways and through the streets of our country and perhaps of
other countries, where they are vulnerable to accident or foul play.
Each year many radioactive sources, world wide, are abandoned or
stolen and leak out of the existing control system. They become
``orphan'' sources, unwanted and with nobody to care for them or keep
them out of trouble. Sometimes industrial sources are abandoned in
place when their owners go out of business. They can then find their
way into the scrap metal pool, and may arrive on the doorstep of a
steel mill.
That happened shortly before our March 6 hearing. A 2-curie cesium-
137 source turned up on the conveyor belt of the Nucor Steel Mill in
Hertford, NC. Caught just before it would have gone into the furnace,
it was identified, removed, and taken into safe custody by the North
Carolina radiation protection authorities. Where did it come from? A
bankrupt chemical company in the Baltimore area whose equipment was
sold for scrap. But when the records were traced it was found that the
company had bought not one, but four, such sources. Fortunately, two
more were traced and recovered, but one of those ``gauge sources''
still is missing.
If the source found at Nucor had gone into the molten steel, the
clean-up would have cost the company millions of dollars. If it had
gotten into the
[[Page S10579]]
hands of a terrorist who could disperse it with high explosives, it
could have contaminated many square blocks of an American city and the
recovery might have run into the billions.
Far more intense radioactive sources turn up in strange places from
time to time.
In 1987, two junk collectors in Brazil broke open an abandoned gamma
ray cancer treatment machine containing 1,400 curies of Cesium-137.
Inside they found about 2/3 of an ounce of softly glowing powder.
Several people were delighted at the idea of glowing in the dark and
they rubbed the powder on their bodies. They contaminated not only
themselves, but their homes and families. The toll: 5 people dead, 21
requiring intensive care, 49 requiring some hospitalization, 249
contaminated, and 111,800 people tested in improvised medical
facilities at a local soccer stadium.
And that was an accident. A deliberate attack using the same 20 grams
of material could have had far greater consequences, as our witnesses
told the Committee.
``Dirty bombs'' do not even need to explode. Murders have been
committed by the simple act of inserting a small radioactive source in
the victim's desk chair and simply waiting until radiation sickness and
death followed. If a terrorist is willing to die, he could merely fling
finely powdered material from the window of a tall building and allow
the wind to spread his poison.
Finally, I worry that other terrorist groups, not just Al Qaeda,
could make a radiological dispersion device. Radioactive material is
out there for the taking, especially in the former Soviet Union.
In January of this year, three hunters gathering firewood in a forest
in the former Soviet republic of Georgia found two abandoned cans of
strontium-90, each containing 40,000 curies of material. Because the
heat from these sources melted the snow for yards around, the hunters
were delighted to find free warmth for their tent. They picked up and
carried off the sources in their backpacks. All three woodsmen were
critically injured, but since they did not break open the two cans,
environmental contamination was limited.
A team from the government of Georgia, assisted by the International
Atomic Energy Agency, recovered the sources, but several more are
apparently missing and unaccounted for. The nuclear industry of the
former Soviet Union made hundreds of similar devices.
In fact, 40,000 curies of strontium-90 represents a small source by
Soviet standards. A string of 131 arctic sites in Russia is powered by
radioisotope thermal generators--portable power plants that draw energy
from the heat liberated by the decay of radioactive nuclei. Each site
uses a 300,000-curie source. That raises the maximum damage that a
terrorist dirty bomb could do by a factor of ten beyond anything the
Committee heard at our March hearing.
There once were 136 sites in this chain, but the Norwegian government
replaced five with solar-powered installations. The remaining 131
should be replaced as soon as possible so as to remove a potential
source of truly destructive dirty bombs.
We must, and we can, raise significant and sensible barriers to
protect against terrorists who would use the power of the atom to do us
harm. To that end, Senators Lugar, Domenici, Clinton, Gregg and Schumer
join me today in introducing the ``Nuclear and Radiological Terrorism
Threat Reduction Act of 2002.''
The bill's principal cosponsors, Senators Lugar and Domenici, have
been among the Senate's long-time leaders in the causes of non-
proliferation, threat reduction and counter-terrorism, and I welcome
their support. Senator Gregg's position on the Appropriations Committee
has sensitized him to the need to protect our embassies. And both of
the Senators from New York, Mr. Schumer and Mrs. Clinton, attended the
Foreign Relations Committee's classified session where we learned some
of the specifics regarding the threat of nuclear and radiological
terrorism.
Our bill takes the initiative in several significant areas:
One, it creates a new program to establish a network of five regional
shelters around the globe to provide secure, temporary storage of
unwanted, unused, obsolete and orphaned radioactive sources. The bill
authorizes $5 million to get started in Fiscal Year 2003, and up to $20
million a year for construction and operation of the facilities in the
future. We envision accomplishing our goals through bilateral
negotiations with the host nations or, when advantageous to the United
States, through special contributions to the International Atomic
Energy Agency, the IAEA. Regional storage facilities can remove some of
the most dangerous material from circulation.
Two, to round up the sources to be stored in the regional facilities,
we propose an accelerated program--in cooperation with the IAEA--to
discover, inventory, and recover unwanted radioactive material from
around the world. This would be similar to the Department of Energy's
Off-site Source Recovery Program, but aimed at material outside our
borders. This bill will make a modest start by authorizing $5 million a
year in special voluntary contributions to the IAEA.
Three, recognizing the threat posed by the very intense radioactive
sources packaged by the former Soviet Union to provide electric power
to very remote locations, such as lighthouses, weather stations,
communications nets, and other measuring equipment, the bill authorizes
funding to replace that equipment with non-nuclear technologies. We
believe that $10 million a year over the next three years should not
merely make a dent in this problem; it should largely solve it.
Four, other bills this year have provided funding to train American
first responders to handle a radiological emergency. The bill we
introduce today authorizes $5 million a year for the next three years
to train responders abroad. This is a matter of self-protection for the
United States: we have diplomatic missions at risk around the world,
and we will be funding the construction and operation of temporary
storage sites for radioactive material. Should accidents or incidents
occur, we would like to be able to rely upon competent responses by our
host countries.
Five, this bill requires the Secretary of State to conduct a global
assessment of the radiological threat to U.S. missions overseas and to
provide the results to the appropriate committees of the Congress in an
unclassified form, but with a classified annex giving details if he
deems necessary. We hope the Secretary will take into account the
locations of the interim storage facilities and also the results of
this threat assessment in choosing where first to provide the overseas
first responder training authorized by this bill.
Six, the Customs Service is charged with preventing illicit shipments
of radioactive material and fissile material from reaching our shores.
Inspection of today's large cargo containers for fissile material, in
particular, is a technologically challenging task, one performed most
safely and easily before the containers are loaded aboard ship. Customs
has agreements to permit U.S. inspectors to do their jobs in ports of
embarkation. In order to assist the Service, the Nuclear and
Radiological Threat Prevention Act establishes a special representative
with the rank of ambassador within the State Department for negotiation
of international agreements that ensure inspection of cargoes of
nuclear material at ports of embarkation. This special representative
will work in close cooperation with the Customs Service to make certain
that the agreements meet the Service's needs.
Seven, we could diminish the threat of Dirty bombs by reducing use of
radioactive material where other technologies could be substituted.
This bill mandates a study by the National Academy of Sciences to tell
us how and where safe sources of radiation can replace dangerous ones.
Some substitutions are well known: for many applications, X-ray
machines powered by the electric grid are almost as convenient as the
gamma ray ``cameras'' that use intense iridium-178 sources. Powered
radiation sources can replace radioactive sources in some oil well
logging work. Linear accelerators are replacing radioactive cobalt and
cesium in cancer therapy. All of the substitute sources have one thing
in common: a switch. When that switch is turned ``off,'' the radiation
source is safe. There may be many more applications
[[Page S10580]]
in which a switchable source can replace a radioactive one and be at
least as economical, particularly when the risks of dirty bombs are
accounted for properly.
Fissile material is the indispensable element of a true nuclear
weapon. At our March 6, 2002, hearing experts from the Department of
Energy weapons laboratories told the Committee that terrorists in
possession of highly enriched uranium or plutonium could assemble a
crude ``improvised nuclear device'' with a yield large enough to smash
Washington from the White House to the Capitol. Such an improvised
nuclear device would not require a Manhattan Project. In a study done
in the 1970s, the Congressional Office of Technology Assessment wrote
that a group of two or three technically competent individuals in
possession of enriched uranium or weapons-grade plutonium could
probably build a one-kiloton device in a few months.
For that reason, one provision of this bill deals specifically with
developing the tools to guard against illicit traffic in highly
enriched uranium and plutonium.
Last summer, a meeting in Washington to discuss ``nuclear science and
Homeland Security'' was sponsored by the Department of Energy, the
National Science Foundation, NSF, and other Federal science funding
agencies. It brought together some of the best scientists in our
universities and colleges, all of whom were willing to put aside their
normal research to help strengthen our security at home. But few of
those scientists can use the research money they already have for this
work. Research support given for one purpose usually may not be
channeled into other uses.
Therefore, this bill establishes a small program within the NSF to
support researchers at colleges and universities who will work on the
detection of fissile materials--the hardest and most critical task or
on real-time identification of radioisotopes and decontamination of
buildings after a dirty bomb goes off.
The Department of Energy has a special role to play in this program:
we expect that Department and its national laboratories to work in
cooperation with NSF to transition laboratory apparatus into field-
ready operational hardware. This bill authorizes $10 million a year for
research funded by the NSF and an additional $5 million a year for the
Department of Energy to accomplish the transition.
The threat of radiological terrorism, and even of true nuclear terror
attacks, is real. We know that most radiological attacks will kill few
Americans, but there is little doubt they will lead to economic crimes
of the greatest consequence. The radioactive source that killed only a
few people in Brazil cost hundreds of millions of dollars to clean up.
And nobody tried to cause that destruction.
We must do something to head off the nuclear and radiological
terrorist threat where it will most likely first appear: in foreign
countries.
The ``Nuclear and Radiological Terrorism Threat Reduction Act'' gives
us a good start at doing just that.
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. 3121
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 ``Nuclear and Radiological
Terrorism Threat Reduction Act of 2002''.
SEC. 2. FINDINGS.
Congress makes the following findings:
(1) It is feasible for terrorists to obtain and to
disseminate radioactive material using a radiological
dispersion device (RDD), or by emplacing discrete radioactive
sources in major public places.
(2) It is not difficult for terrorists to improvise a
nuclear explosive device of significant yield once they have
acquired the fissile material, highly enriched uranium, or
plutonium, to fuel the weapon.
(3) An attack by terrorists using a radiological dispersion
device, lumped radioactive sources, an improvised nuclear
device (IND), or a stolen nuclear weapon is a plausible
event.
(4) Such an attack could cause catastrophic economic and
social damage and could kill large numbers of Americans.
(5) The first line of defense against both nuclear and
radiological terrorism is preventing the acquisition of
radioactive sources, special nuclear material, or nuclear
weapons by terrorists.
SEC. 3. DEFINITIONS.
In this Act:
(1) Appropriate congressional committees.--The term
``appropriate congressional committees'' means the Committee
on Foreign Relations of the Senate and the Committee on
International Relations of the House of Representatives.
(2) Byproduct material.--The term ``byproduct material''
has the same meaning given the term in section 11 e. of the
Atomic Energy Act of 1954 (42 U.S.C. 2014(e)).
(3) IAEA.--The term ``IAEA'' means the International Atomic
Energy Agency.
(4) Independent states of the former soviet union.--The
term ``independent states of the former Soviet Union'' has
the meaning given the term in section 3 of the FREEDOM
Support Act (22 U.S.C. 5801).
(5) Nuclear explosive device.--The term ``nuclear explosive
device'' means any device, whether assembled or disassembled,
that is designed to produce an instantaneous release of an
amount of nuclear energy from special nuclear material that
is greater than the amount of energy that would be released
from the detonation of one pound of trinitrotoluene (TNT).
(6) Radiological dispersion device.--The term
``radiological dispersion device'' is any device meant to
spread or disperse radioactive material by the use of
explosives or otherwise.
(7) Radioactive material.--The term ``radioactive
material'' means--
(A) source material and special nuclear material, but does
not include natural or depleted uranium;
(B) nuclear by-product material;
(C) material made radioactive by bombardment in an
accelerator; and
(D) all refined isotopes of radium.
(8) Radioactive source.--The term ``radioactive source''
means radioactive material that is permanently sealed in a
capsule or closely bonded and includes any radioactive
material released if the source is leaking or stolen, but
does not include any material within the nuclear fuel cycle
of a research or power reactor.
(9) Radioisotope thermal generator.--The term
``radioisotope thermal generator'' or ``RTG'' means an
electrical generator which derives its power from the heat
produced by the decay of a radioactive source by the emission
of alpha, beta, or gamma radiation. The term does not include
nuclear reactors deriving their energy from the fission or
fusion of atomic nuclei.
(10) Secretary.--The term ``Secretary'' means the Secretary
of State.
(11) Source material.--The term ``source material'' has the
meaning given that term in section 11 z. of the Atomic Energy
Act of 1954 (42 U.S.C. 2014(z)).
(12) Special nuclear material.--The term ``special nuclear
material'' has the meaning given that term in section 11 aa.
of the Atomic Energy Act of 1954 (42 U.S.C. 2014(aa)).
SEC. 4. INTERNATIONAL REPOSITORIES.
(a) Authority.--The Secretary, acting through the United
States Permanent Representative to the IAEA, is authorized to
propose that the IAEA conclude agreements with up to five
countries under which each country would provide temporary
secure storage for orphaned, unused, surplus, or other
radioactive sources other than special nuclear material,
nuclear fuel, or spent nuclear fuel.
(b) Voluntary Contributions Authorized.--
(1) In general.--The Secretary is authorized to make a
voluntary contribution to the IAEA to fund the United States
share of the program authorized by subsection (a) if the IAEA
agrees to protect sources under the standards of the United
States or IAEA code of conduct, whichever is stricter.
(2) Fiscal year 2003.--The United States share of the costs
of the program described in subsection (a) is authorized to
be 100 percent for fiscal year 2003.
(c) Technical Assistance.--The Secretary is authorized to
provide the IAEA, through contracts with the Department of
Energy or the Nuclear Regulatory Commission, with technical
assistance to carry out the program described in subsection
(a).
(d) Nonapplicability of NEPA.--The National Environmental
Policy Act shall not apply to any activity conducted under
this section.
(e) Authorization of Appropriations.--
(1) In general.--There are authorized to be appropriated
for the Department of State $5,000,000 for fiscal year 2003
and $20,000,000 for each fiscal year thereafter to carry out
this section.
(2) Availability of funds.--Amounts appropriated pursuant
to paragraph (1) are authorized to remain available until
expended.
SEC. 5. RADIOACTIVE SOURCE DISCOVERY, INVENTORY, AND
RECOVERY.
(a) Authority.--The Secretary is authorized to make United
States voluntary contributions to the IAEA to support a
program to promote radioactive source discovery, inventory,
and recovery.
(b) Authorization of Appropriations.--
(1) In general.--There is authorized to be appropriated to
the Department of State $5,000,000 for each of the fiscal
years 2003 through 2012 to carry out subsection (a).
(2) Availability of funds.--Amounts appropriated pursuant
to paragraph (1) are authorized to remain available until
expended.
[[Page S10581]]
SEC. 6. RADIOISOTOPE THERMAL GENERATOR-POWERED FACILITIES IN
THE INDEPENDENT STATES OF THE FORMER SOVIET
UNION.
(a) RTG power units.--The Secretary is authorized to assist
the Government of the Russian Federation to substitute solar
(or other non-nuclear) power sources to replace RTG power
units operated by the Russian Federation and other
independent states of the former Soviet Union in applications
such as lighthouses in the Arctic, remote weather stations,
unattended sensors, and for providing electricity in remote
locations. Any replacement shall, to the maximum extent
practicable, be based upon tested technologies that have
operated for at least one full year in the environment where
the replacement will be used.
(b) Allocation of Funds.--Of the funds made available to
carry out this section, the Secretary may use not more than
20 percent of the funds in any fiscal year to replace
dangerous RTG facilities that are similar to those described
in subsection (a) in countries other than the independent
states of the former Soviet Union.
(c) Authorization of Appropriations.--
(1) In general.--There is authorized to be appropriated to
the Department of State $10,000,000 for each of the fiscal
years 2003, 2004, and 2005 to carry out this section.
(2) Availability of funds.--Amounts appropriated pursuant
to paragraph (1) are authorized to remain available until
expended.
SEC. 7. FOREIGN FIRST RESPONDERS.
(a) In General.--The Secretary is authorized to conclude an
agreement with a foreign country, or, acting through the
United States Permanent Representative to the IAEA, to
propose that the IAEA conclude an agreement with that
country, under which that country will carry out a program to
train first responders to--
(1) detect, identify, and characterize radioactive
material;
(2) understand the hazards posed by radioactive
contamination;
(3) understand the risks encountered at various dose rates;
(4) enter contaminated areas safely and speedily; and
(5) evacuate persons within a contaminated area.
(b) United States Participation.--The Department of State
is hereby designated as the lead Federal entity for
cooperation with the IAEA in implementing subsection (a)
within the United States. In carrying out activities under
this subsection the Secretary of State shall take into
account the findings of the threat assessment report required
by section 8 and the location of the interim storage
facilities under section 4.
(c) Authorization of Appropriations.--
(1) In general.--There are authorized to be appropriated to
the Department of State $2,000,000 for fiscal year 2003,
$5,000,000 for fiscal year 2004, and $5,000,000 for fiscal
year 2005 to carry out this section.
(2) Availability of funds.--Amounts appropriated pursuant
to paragraph (1) are authorized to remain available until
expended.
SEC. 8. THREAT ASSESSMENT REPORT.
(a) In General.--Not later than 180 days after the date of
enactment of this Act, and annually thereafter, the Secretary
of State shall submit a report to the appropriate
congressional committees--
(1) detailing the preparations made at United States
diplomatic missions abroad to detect and mitigate a
radiological attack on United States missions and other
United States facilities under the control of the Secretary;
and
(2) setting forth a rank-ordered list of the Secretary's
priorities for improving radiological security and
consequence management at United States missions, including a
rank-ordered list of the missions where such improvement is
most important.
(b) Budget Request.--The report shall also include a
proposed budget for the improvements described in subsection
(a)(2).
(c) Form of Submission.--The report shall be unclassified
with a classified annex if necessary.
SEC. 9. SPECIAL REPRESENTATIVE FOR INSPECTIONS OF NUCLEAR AND
RADIOLOGICAL MATERIALS.
Section 1 of the State Department Basic Authorities Act of
1956 (22 U.S.C. 2651a) is amended by adding at the end the
following new subsection:
``(h) Special Representative for Inspections of Nuclear and
Radiological Materials.--
``(1) Establishment of position.--There shall be within the
Bureau of the Department of State primarily responsible for
nonproliferation matters a Special Representative for
Inspections of Nuclear and Radiological Materials (in this
subsection referred to as the `Special Representative'), who
shall be appointed by the President, by and with the advice
and consent of the Senate. The Special Representative shall
have the rank and status of ambassador.
``(2) Responsibilities.--The Special Representative shall
have the primary responsibility within the Department of
State for assisting the Secretary of State in negotiating
international agreements that ensure inspection of cargoes of
nuclear and radiological materials destined for the United
States at ports of embarkation, and such other agreements as
may control radioactive materials.
``(3) Cooperation with united states customs service.--In
carrying out the negotiations described in paragraph (2), the
Special Representative shall cooperate with, and accept the
assistance and participation of, appropriate officials of the
United States Customs Service.''.
SEC. 10. RESEARCH AND DEVELOPMENT GRANTS.
(a) In General.--Subject to the availability of
appropriations, there is established a program under which
the Director of the National Science Foundation shall award
grants for university-based research into the detection of
fissile materials, identification of radioactive isotopes in
real time, the protection of sites from attack by
radiological dispersion device, mitigation of consequences of
such an attack, and attribution of materials used in attacks
by radiological dispersion device or by improvised nuclear
devices. Such grants shall be available only to investigators
at baccalaureate and doctoral degree granting academic
institutions. In carrying out the program, the Director of
the National Science Foundation shall consult about this
program with the Secretary of Energy in order to minimize
duplication and increase synergies. The consultation shall
also include consideration of the use of the Department of
Energy to develop promising basic ideas into field-ready
hardware. The Secretary of Energy shall work with the
national laboratories and industry to develop field-ready
prototype detectors.
(b) Authorization of Appropriations.--
(1) In general.--There is authorized to be appropriated to
the National Science Foundation $10,000,000, and to the
Department of Energy $5,000,000, to carry out this section in
fiscal years 2003 through 2008.
(2) Availability of funds.--Amounts appropriated pursuant
to paragraph (1) are authorized to remain available until
expended.
SEC. 11. STUDY AND REPORTS BY THE NATIONAL ACADEMY OF
SCIENCES.
(a) Study.--Not later than 90 days after the date of
enactment of this Act, the Secretary, in consultation with
the Chairman of the Nuclear Regulatory Commission, acting
through a contract with the National Academy of Sciences,
shall conduct a study of the use of radioactive sources in
industry and of potential substitutes for those sources.
(b) Reports.--Not later than six months after entry into
the contract referred to in subsection (a), the National
Academy of Sciences shall submit an initial report to the
Secretary and the appropriate congressional committees and,
not later than three months after submission of the initial
report, shall submit to the Secretary and those committees a
final report.
Mr. DOMENICI. Mr. President, I'm pleased to join Senator Biden and
Senator Lugar in sponsoring the Nuclear and Radiological Terrorism
Threat Reduction Act of 2002.
Only a few months ago, I introduced the Nuclear Nonproliferation Act
of 2002 with these same Senators and many others as co-sponsors. It's
being called the Domenici-Biden-Lugar bill. I am pleased to learn that
most provisions of that Act are being incorporated in the Conference on
the Armed Services bill.
The current bill and the Domenici-Biden-Lugar bill are highly
complementary. The first bill focused entirely on the contributions
that the Department of Energy should be authorized to make to minimize
risks of nuclear and radiological risks to our citizens. The current
bill focuses on the contributions that the Department of State should
make in that same arena. And in both cases, there is careful
recognition of the importance of a tight partnership between those two
Departments in accomplishing this vital mission.
I'm particularly pleased with this bill's focus on assisting in the
creation of a number of international repositories that can be used to
store radioactive sources safely, while ensuring that they don't become
``orphaned'' sources that might fuel a terrorist's dirty bomb. Other
provisions to assist the IAEA in promoting source inventory and
recovery are also critical.
One important application of this new bill must be to help the
Russian Federation address the large number of Radio-isotope Thermal
Generators that rely on large quantities of radioactive material to
power many remote installations, especially lighthouses. These large
radioactive sources, in isolated locations, are very vulnerable to
compromise. With this bill, we can assist other nations, like Norway,
in shifting the power for these lighthouses away from radioactive
materials to other means of power.
Another important aspect of the bill involves the authorization for
the State Department to help other nations in developing their own
First Responder program for response to dirty bomb or nuclear threats.
In this country, we now have a First Responder program that grows
stronger each year, thanks to the Nunn-Lugar-Domenici bill that created
the effort. Now we need to share the lessons we have been learning with
others.
[[Page S10582]]
This new bill is another important contribution to our nation's
efforts to ensure that terrorists will never threaten the United States
or other nations with radiological or nuclear weapons.
______
By Mr. BROWNBACK (for himself and Mr. Helms):
S. 3122. A bill to allow North Korean's to apply for refugee status
or asylum; to the Committee on the Judiciary.
Mr. BROWNBACK. Mr. President, I rise today to introduce legislation
that will clarify the status of North Korean refugees.
As a Nation, the United States is the world's leader in the
protection of refugees. The world takes its lead from the United States
when reacting to asylum-seekers, and the example we set have far-
reaching implications for those who flee persecution. For this reason,
we have stood firm against excuses for the denial of basic human rights
and life's basic liberties.
The tenuous status of North Korean refugees in China is well
documented. As we all know from news reports, including several news
programs, that few North Koreans are able to seek asylum and refuge, be
it in China or elsewhere. The few that do, however, are functionally
barred from seeking asylum in the United States or being admitted to
the United States as refugees. As I understand it, the State Department
has expressed concerns that the legal hurdle to admitting North Koreans
refugees is the fact that South Korea automatically conveys its
citizenship to any escapee from North Korea who makes it to South
Korea. In short, the State Department claims it cannot, as a matter of
law, consider any North Korean to be a refugee.
I am not persuaded that this is the case, but even if we assume that
to be true, we must stand firm for the proposition that the moral
obligation that we have for refugees everywhere seeking basic human
liberties should not be laid aside because of that legal technicality
and it should not preclude the United State from providing refugee
protections to North Korean refugees.
The bill I am introducing today clarifies and fixes that
technicality. It says quite simply that, for asylum and refugee
purposes, a North Korean is a North Korean. This bill in no way
detracts from the generosity of the South Korean government or the
South Korean people. It does not encourage refugees to choose the
United States over South Korea as a safe haven. Far from it, since
those refugees who are able to reach South Korea will go there and will
be afforded the rights that refugees escaping from persecution
rightfully deserve whether under various international conventions or
the South Korean Constitution. Instead, this bill recognizes the
physical obstacles facing North Korean refugees and removes the
technicality that compromises our ability to help them.
The bill I am introducing today has the support of the Lawyers
Committee on Human Rights, Amnesty International, the International
Rescue Committee, the U.S. Committee on Refugees, Immigration and
Refugee Services of America, among others.
______
By Mr. DeWINE:
S. 3123. A bill to expand certain preferential trade treatment of
Haiti; to the Committee on Finance.
Mr. DeWINE. Mr. President, I have many long-standing concerns about
the dire situation, political, economic, and humanitarian, in Haiti. As
one who has witnessed the unbelievable poverty and despair in that tiny
nation, I believe we must pay closer attention to what is happening
there. We must be engaged.
That is why I am introducing the ``Haiti Economic Recovery
Opportunity Act of 2002.'' This bill would help improve the economic
and political situation in Haiti through an important tool of our
foreign policy, and that is trade. I would like to thank
Representatives Gilman and others for introducing a similar measure in
the House.
The situation in Haiti is bleak. Haiti is the poorest country in our
Hemisphere, with approximately 70 percent of its population out of work
and 80 percent living in abject poverty. Less than one-half of Haiti's
8.2 million people can read or write. Haiti's infant mortality rate is
the highest in our hemisphere. And, one in four children under the age
of five are malnourished.
Roughly one in 12 Haitians has HIV/AIDS, and, according to the
Centers for Disease Control projections, Haiti will experience up to
44,000 new HIV/AIDS cases this year, that's 4,000 more than the number
expected here in the United States, where our population is 35 times
that of Haiti's. AIDS already has orphaned over 163,000 children, and
this number is expected to skyrocket to between 323,000 and 393,000
over the next ten years.
The violence, corruption, and instability caused by the flow of drugs
through Haiti cannot be overstated. An estimated 15 percent of all
cocaine entering the United States passes through Haiti, the Dominican
Republic, or both.
Haiti still lacks democracy and political stability. The U.S. policy
of not providing assistance directly to the Haitian Government is based
on President Aristide's failure to enact necessary reforms to uphold
democracy and help the people of his own country.
All of this creates an environment where the logical course of action
for many Haitians is simply to flee. We have seen this in the past, and
we may see it again. So far this fiscal year, the Coast Guard has
interdicted and rescued over 1,485 Haitian migrants at sea, compared to
1,113 during the entire fiscal year 2000. And, according to the State
Department, migrants recently interdicted and repatriated to Haiti have
cited economic conditions as their reason for attempting to migrate by
sea. I do not think that a mass exodus is imminent, but we cannot
ignore any increase in migrant departures from Haiti. In addition to
being an immigration issue for the United States, these migrant
departures frequently result in the loss of life at sea.
The bill I am introducing today attempts to change this situation by
granting limited duty-free treatment on certain Haitian apparel
articles if, and only if, the President is able to certify that the
Haitian government is making serious market, political, and social
reforms. The bill would correct a glitch or oversight in U.S. trade law
that recognized the special economic needs of least developed countries
in Africa, but did not recognize those needs for the least developed
country in the Western Hemisphere, Haiti.
Specifically, the bill would allow duty-free entry of Haitian apparel
articles assembled from fabrics from countries with which the U.S. has
a free trade or a regional trade agreement. It also would grant duty-
free status on articles, regardless of the origin of the fabrics and
yarns, if the fabrics and yarns were not commercially available in the
United States.
The bill would cap duty-free apparel imports made of fabrics and
yarns from the designated countries at 1.5 percent of total U.S.
apparel imports. This limit grows modestly over time to 3.5 percent.
The enactment of this legislation would promote employment in Haitian
industry by allowing the country to become a garment production center.
While the benefits of this bill would be modest by U.S. standards, in
Haiti they are substantial. It is estimated that the bill could create
thousands of jobs, thereby reducing the unemployment rate and breaking
the shackles of poverty. Before the 1991 coup, Haiti was one of the
largest apparel suppliers in the Caribbean. But today, Haitian apparel
accounts for less than one percent of all apparel imports into the
United States.
The type of assembly carried out in Haiti would have minimal impact
on employment in the United States. In fact, it would encourage the
emigration of jobs from the Far East back to our hemisphere, including
the United States, because most Haitian foreign exchange earnings,
unlike in the Far East, are utilized to purchase American products.
And, the ``Trade and Development Act'' already includes strong
safeguards against transshipment.
In order for Haiti to be eligible for the trade benefits under the
bill, the President must certify that Haiti is making progress on
matters like the rule of law. This will not be an easy task for the
Haitian government. However, I believe that because of the incentives
provided in the bill, it would be more and more apparent to them that
it is in their interest to reform.
[[Page S10583]]
During my most recent trip to Haiti, I met with President Aristide
and raised many concerns. I explained that it is essential that he call
for peace and domestic order, and that he take the necessary measures
to bring an end to the political impasse. I explained the need to
cooperate with the opposition, and to work with the Organization of
American States, OAS.
I also met with leaders of the opposition and told them that they,
too, must be willing to compromise and cooperate. I am pleased to see
that the OAS Special Mission in Haiti is up and running, but I remain
cautious about the prospects for resolving the political crisis. In the
meantime, the United States must take responsibility by continuing and
increasing our humanitarian and trade efforts in Haiti. This is in our
own best interest, and we have a moral obligation to remain committed
to the people of Haiti.
Adopting the Haiti Economic Recovery Opportunity Act of 2002 would be
a powerful demonstration of that commitment. I encourage my colleagues
to join in support of this legislation.
______
By Mr. McCAIN (for himself, Mr. Feingold, and Mr. Durbin):
S. 3124. A bill to amend the Communications Act of 1934 to revise and
expand the lowest unit cost provision applicable to political campaign
broadcasts, to establish commercial broadcasting station minimum
airtime requirements for candidate-centered and issue-centered
programming before primary and general elections, to establish a
voucher system for the purchase of commercial broadcast airtime for
political advertisements, and for other purposes; to the Committee on
Commerce, Science, and Transportation.
Mr. McCAIN. Mr. President, today we begin another chapter in the
effort to reform our political campaign system. I am proud to be joined
by Senator Russ Feingold, my longtime colleague on campaign finance
reform, and Senator Richard Durbin, in introducing the Political
Campaign Broadcast Activity Improvements Act.
The bill establishes a program to provide candidates and national
committees of political parties, with vouchers that they may use for
political advertisements on radio and television broadcast stations. An
annual spectrum use fee paid by broadcasters would fund the voucher
system. In addition, the bill requires broadcast television and radio
stations to provide candidates and parties with the lowest rate
provided to any other advertiser in the previous 120 days, and in most
cases, would prohibit states from preempting advertisements purchased
by candidates or parties. Finally, the bill requires these stations to
air a minimum of two hours per week of candidate-centered or issue-
centered programming before a primary or general federal election.
This legislation builds on the long history of requiring broadcasters
to serve the public interest in exchange for the privilege of obtaining
an exclusive license to use a scarce public resource: the
electromagnetic spectrum. The burden imposed on broadcasters pales in
comparison to the enormous value of this spectrum, which recent
estimates suggest is worth as much as $367 billion.
The purpose of the legislation is to increase the flow of political
information in broadcast media and to reduce the cost to candidates of
reaching voters. Our democracy is stronger when a candidate's success
is achieved by ideas, and not by dollars. The benefits of free airtime
are not only for candidates, however. By increasing the flow of
political information, free airtime can better inform the public about
candidates and invite viewers to become more engaged in their
government by learning more about the individuals seeking to represent
them.
We recognize that the bill will not be considered during the 107th
Congress. We look forward, however, to hearing how we might improve the
approach when we reintroduce it in the future.
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. 3124
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 ``Political Campaign Broadcast
Activity Improvements Act.''
SEC. 2. MEDIA RATES.
(a) Lowest Unit Charge; National Committees.--Section
315(b) of the Communications Act of 1934 (47 U.S.C. 315(b))
is amended--
(1) by striking ``to such office'' in paragraph (1) and
inserting ``to such office, or by a national committee of a
political party on behalf of such candidate in connection
with such campaign,''; and
(2) by inserting ``(at any time during the 120-day period
preceding the date of the use)'' in subparagraph (A) of
paragraph (1) after ``charge''.
(b) Preemption; Audits.--
(1) In general.--Section 315 of such Act (47 U.S.C. 315) is
amended--
(A) by redesignating subsections (c) and (d) as subsections
(e) and (f), respectively and moving them to follow the
existing subsection (e);
(B) by redesignating the existing subsection (e) as
subsection (c); and
(B) by inserting after subsection (c) the following:
``(d) Preemption.--
``(1) In general.--Except as provided in paragraph (2), a
license shall not preempt the use of a broadcasting station
by an eligible candidate or political committee of a
political party who has purchased and paid for such use.
``(2) Circumstances beyond control of licensee.--If a
program to be broadcast by a broadcasting station is
preempted because of circumstances beyond the control of the
station, any candidate or party advertising spot scheduled to
be broadcast during that program may also be preempted.
``(e) Audits.--During the 45-day period preceding a primary
election and the 60-day period preceding a general election,
the Commission shall conduct such audits as it deems
necessary to ensure that each broadcaster to which this
section applies is allocating television broadcast
advertising time in accordance with this section and section
312.''
(2) Conforming amendment.--Section 504 of the Bipartisan
Campaign Reform Act of 2002 is amended by striking ``315), as
amended by this Act, is amended by redesignating subsections
(e) and (f) as subsections (f) and (g), respectively, and''
and inserting ``315) is amended by''.
(c) Stylistic Amendments.--Section 315 of such Act (47
U.S.C. 315) is amended)--
(1) by striking ``For purposes of this section--'' in
subsection (e), as redesignated by subsection (b)(1)(A) of
this section, and inserting ``Definitions.--In this
section:'';
(2) by striking ``the'' in paragraph (1) of that subsection
and inserting ``Broadcasting station.--The'';
(3) by striking ``the'' in paragraph (2) of that subsection
and inserting ``Licensee; station licensee.--The''; and
(4) by inserting ``Regulations.--'' in subsection (f), as
so redesignated, before ``The Commission''.
SEC. 3. MINIMUM TIME REQUIREMENTS FOR CANDIDATE-CENTERED OR
ISSUE-CENTERED BROADCASTS BY BROADCASTING
STATIONS.
(a) In General.--
(1) Program content requirements.--In the administration of
the Communications Act of 1934 (47 U.S.C. 151 et seq.), the
Federal Communications Commission may not determine that a
broadcasting station has met its obligation to operate in the
public interest unless the station demonstrates to the
satisfaction of the Commission that--
(A) it broadcast at least 2 hours per week of candidate-
centered programming or issue-centered programming during
each of the 6 weeks preceding a Federal election, including
at least 4 of the weeks immediately preceding a general
election; and
(B) not less than 1 hour of such programming was broadcast
in each of those weeks during the period beginning at 5:00
p.m. and ending at 11:35 p.m. in the time zone in which the
primary broadcast audience for the station is located.
(2) Nightowl broadcasts not counted.--For purposes of
paragraph (1) any such programming broadcast between midnight
and 6:00 a.m. in the time zone in which the primary broadcast
audience for the station is located shall not be taken into
account.
(b) Definitions.--In this section:
(1) Broadcasting station.--The term ``broadcasting
station''--
(A) has the meaning given that term by section 315(e)(1) of
the Communications Act of 1934.
(2) Candidate-centered programming.--The term ``candidate-
centered programming''--
(A) includes debates, interviews, candidate statements, and
other program formats that provide for a discussion of issues
by the candidate; but
(B) does not include paid political advertisements.
(3) Federal election.--The term ``Federal election'' has
the meaning given that term in section 315A(g)(2) of the
Communications Act of 1934.
(4) Issue-centered programming.--The term ``issue-centered
programming''--
(A) includes debates, interviews, statements, and other
program formats that provide for a discussion of any ballot
measure which appears on a ballot in a forthcoming election;
but
[[Page S10584]]
(B) does not include paid political advertisements.
SEC. 4. POLITICAL ADVERTISEMENTS VOUCHER PROGRAM.
(a) In General.--Title III of the Communications Act of
1934 (47 U.S.C. 301 et seq.) is amended by inserting after
section 315 the following:
``SEC. 315A. POLITICAL ADVERTISEMENT VOUCHER PROGRAM.
``(a) In General.--The Commission shall establish and
administer a voucher program for the purchase of airtime on
broadcast stations for political advertisements in accordance
with the provisions of this section.
``(b) Candidates.--
``(1) Disbursement of vouchers.--Beginning no earlier than
January of each even-numbered year after 2002, the Commission
shall disburse vouchers at least once each month for the
purchase of radio or television broadcast airtime for
political advertisements on broadcasting stations to each
individual certified by the Federal Election Commission under
paragraph (2) as an eligible candidate.
``(2) FEC to certify eligible candidates.--The Commission
may not disburse vouchers under paragraph (1) to an
individual, until the Federal Election Commission has made
the following certifications with respect to that individual:
``(A) Qualification.--The individual is a legally-qualified
candidate in a Federal election.
``(B) Agreement.--The individual has agreed in writing--
``(i) to keep and furnish to the Federal Election
Commission such records, books, and other information as it
may require; and
``(ii) to repay to the Federal Communications Commission an
amount equal to 150 percent of the dollar value of vouchers
received from the Commission if the Federal Election
Commission makes a final determination that the individual
violated any term of the agreement.
``(C) House of representatives candidates.--For candidates
for election to the House of Representatives, that--
``(i) the individual has received at least $25,000 in
contributions from individuals, not counting any amount in
excess of $250 received from any individual;
``(ii) the individual agrees not knowingly to make
expenditures from the individual's personal funds, or the
personal funds of the individual's immediate family, in
connection with the campaign for election to the House of
Representatives in excess of, in the aggregate, $125,000; and
``(iii) the individual faces opposition by at least 1 other
candidate who has received contributions or made expenditures
of, in the aggregate, at least $25,000 or who has been
certified by the Federal Election Commission under this
paragraph as eligible to receive vouchers under paragraph
(1).
``(D) Senate candidates.--For candidates for election to
the Senate, that--
``(i) the individual has received at least $25,000 in
contributions from individuals, not counting any amount in
excess of $250 received from any individual, multiplied by
the number of Representatives from the State in which the
individual seeks election;
``(ii) the individual agrees not knowingly to make
expenditures from the individual's personal funds, or the
personal funds of the individual's immediate family, in
connection with the campaign for election to the House of
Representatives in excess of, in the aggregate, $500,000; and
``(iii) the individual faces opposition by at least 1 other
candidate who has received contributions or made expenditures
of, in the aggregate, at least $25,000 multiplied by the
number of Representatives from the State in which the
individual seeks election or who has been certified by the
Federal Election Commission under this paragraph as eligible
to receive vouchers under paragraph (1).
``(E) Presidential candidates.--For candidates for
nomination for election, or election, to the Office of
President--
``(i) the term `Federal election' includes a primary
election (as defined in section 9032(7) of the Internal
Revenue Code of 1986 (26 U.S.C. 9032(7))); and
``(ii) in order to be eligible to receive vouchers under
this section, the candidate shall execute the agreement
described in subparagraph (B).
``(3) Certification process.--In carrying out its duties
under paragraph (2), the Federal Election Commission shall--
``(A) provide the requested certification, if the
individual meets the requirements for certification, within 7
days after it receives the information necessary therefor;
and
``(B) shall comply with the requirements of chapter 35 of
title 44, United States Code, (commonly known as the
Paperwork Reduction Act) and take other appropriate steps to
minimize the paperwork burden on candidates seeking
certification under this subsection.
``(c) Political Parties.--
``(1) Disbursement of vouchers.--In January, 2004, and
January of each even-numbered year thereafter, the Commission
shall disburse vouchers for the purchase of radio or
television broadcast airtime for political advertisements on
broadcasting stations to each political party committee
certified by the Federal Election Commission under paragraph
(2) as an eligible committee.
``(2) FEC to certify eligible committees.--The Commission
may not disburse vouchers under paragraph (1) to a political
party committee, until the Federal Election Commission has
made the following certifications with respect to that
committee:
``(A) National party committees.--The committee is the
national committee of a political party or the national
congressional campaign committee of a political party (as
those terms are used in section 323(a)(1) of the Federal
Election Campaign Act of 1971 (2 U.S.C. 441i(a)(1))).
``(B) Minor party committees.--In the case of a political
party committee that is not described in subparagraph (A),
the committee meets the candidate base requirement of
subparagraph (C).
``(C) Candidate base.--The committee has candidates--
``(i) for election to the House of Representatives who have
been certified by the Federal Election Commission under
subsection (b)(2) as eligible candidates in at least 22
districts; or
``(ii) for election to the Senate in at least 5 States who
have been certified by the Federal Election Commission under
subsection (b)(2) as eligible candidates.
``(D) Agreement.--The committee agrees in writing--
``(i) to keep and furnish to the Federal Election
Commission such records, books, and other information as it
may require; and
``(ii) to repay to the Federal Communications Commission an
amount equal to 150 percent of the dollar value of vouchers
received from the Commission if the Federal Election
Commission makes a final determination that the committee
violated any term of the agreement.
``(d) Amounts.--
``(1) Calendar year 2004 aggregates.--For calendar year
2004, the Commission shall disburse vouchers in the aggregate
amount of not more than $750,000,000, of which--
``(A) not more than $650,000,000 shall be available for
disbursement to candidates under subsection (b); and
``(B) not more than $100,000,000 shall be available for
disbursement to political parties under subsection (c).
``(2) Per-candidate amount.--
``(A) In general.--Except as provided in subparagraphs (B)
and (C), the Commission shall disburse vouchers to an
individual candidate under subsection (b)(1) with respect to
a Federal election equal, in the aggregate, to $3 multiplied
by the contributions received by that individual with respect
to that election, not counting any amount in excess of $250
received from any individual.
``(B) Maximum.--Except as provided in subparagraph (C), the
Commission may not disburse vouchers to an individual
candidate under subsection (b)(1) with respect to a Federal
election of more than--
``(i) $375,000, for a candidate for election to the House
of Representatives; or
``(ii) $375,000 multiplied by the number of Representatives
from the State from which the individual seeks election, for
a candidate for election to the Senate.
``(C) Special rule for presidential candidates.--The
Commission shall disburse vouchers to a candidate for
nomination for election, or election, to the Office of
President who receives payments under section 9037 or 9006 of
the Internal Revenue Code of 1986 (26 U.S.C. 9037 or 9006),
respectively, equal to--
``(i) $1 for each dollar received under section 9037 of
such Code; and
``(ii) 50 cents for each dollar received under section 9006
of such Code.
``(3) Per-committee amount.--
``(A) In general.--The $100,000,000 available to be
disbursed to political parties shall disbursed as follows:
``(i) The Commission shall reserve a percentage, determined
by the Commission, of the amount available for disbursement
as provided in subparagraph (B) to political party committees
described in subsection (C)(2)(B) that have been or will be
certified by the Federal Election Commission as eligible
political party committees.
``(ii) The Commission shall disburse the remainder of the
amount available for disbursement in equal amounts among
political party committees described in subsection (c)(2)(A)
that have been or will be certified by the Federal Election
Commission as eligible political party committees.
``(B) Minor party committee amount.--From the amount
reserved under subparagraph (A)(i), the Commission shall
disburse to political party committees described in
subsection (C)(2)(B) certified by the Federal Election
Commission as eligible political party committees--
``(i) the same amount as the Commission disburses to each
political party committee under subparagraph (A)(ii) if the
political party with which the political committee is
affiliated has--
``(I) candidates for election to the House of
Representatives certified by the Federal Election Commission
under subsection (b)(2) as eligible candidates in 218 or more
districts; or
``(II) candidates for election to the Senate certified by
the Federal Election Commission under subsection (b)(2) as
eligible candidates in 17 or more of the States in which
elections for United States Senator are being held; and
``(ii) a percentage of such amount, determined under
subparagraph (C), if the political party with which the
political committee is affiliated does not qualify for the
full amount under clause (i).
``(C) Proportionate amount determination.--The amount the
Commission may disburse to a political party committee
described in subparagraph (B)(ii) is a percentage of the
amount disbursed to a political
[[Page S10585]]
party committee under subparagraph (A)(2) equal to the
greater of the following percentages:
(i) A percentage--
``(I) the numerator of which is the number of districts in
which the party has candidates for election to the House of
Representatives certified by the Federal Election Commission
under subsection (b)(2) as eligible candidates; and
``(II) the denominator of which is 435.
(ii) A percentage--
``(I) the numerator of which is the number of States in
which the party has candidates for election to the Senate
certified by the Federal Election Commission under subsection
(b)(2) as eligible candidates; and
``(II) the denominator of which is 33 (or 34 in any year in
which there are 34 Senators for election).
``(e) Inflation Adjustment.--Each dollar amount in this
section shall be adjusted for even-numbered years after 2002
in the same manner as the limitations in section 315(b) and
(d) of the Federal Election Campaign Act of 1971 are adjusted
under section 301(c) of that Act, except that, for the
purpose of applying section 301(c)--
``(1) `(commencing in 2004)' shall be substituted for
`(commencing in 1976)' in paragraph (1) of that section; and
``(2) `2002' shall be substituted for `1974' in paragraph
(2)(B) of that section.
``(f) Use.--
``(1) Exclusive use.--Vouchers disbursed by the Commission
under this section may be used exclusively for the purpose
described in subsection (b) by the candidate or political
party committee to which the vouchers were disbursed, except
that--
``(A) a candidate may exchange vouchers with a political
party under paragraph (2); and
``(B) a political party may use vouchers to purchase
broadcast airtime for political advertisements for its
candidates in a general election for any Federal, State, or
local office.
``(2) Exchange with political party committee.--
``(A) In general.--A individual who receives a voucher
under this section may transfer the right to use all or a
portion of the value of the voucher to a committee, described
in subsection (c)(2)(A), of the political party of which the
individual is a candidate in exchange for money in an amount
equal to the cash value of the voucher or portion exchanged.
``(B) Continuation of candidate obligations.--The transfer
of a voucher, in whole or in part, to a political party
committee under this paragraph does not release the
candidate from any obligation under the agreement made
under the agreement made under subsection (b)(2) or
otherwise modify that agreement or its application to that
candidate.
``(C) Party committee obligations.--Any political party
committee to which a voucher or portion thereof is
transferred under subparagraph (A)--
``(i) shall account fully, in accordance with such
requirements as the Commission may establish, for the receipt
of the voucher; and
``(ii) may not use the transferred voucher or portion
thereof for any purpose other than a purpose described in
paragraph (1)(B).
``(D) Voucher as a contribution under feca.--If a candidate
transfers a voucher or any portion thereof to a political
party committee under subparagraph (A)--
``(i) the value of the voucher or portion thereof
transferred shall be treated as a contribution from the
candidate to the committee for purposes of sections 302 and
304 of the Federal Election Campaign Act of 1971 (2 U.S.C.
432 and 434);
``(ii) the committee may, in exchange, provide to the
candidate only funds subject to the prohibitions,
limitations, and reporting requirements of the Federal
Election Campaign Act of 1971 (2 U.S.C. 431 et seq.);
``(iii) the money received in exchange by the candidate
shall be treated as a contribution from the committee to the
candidate for purposes of those sections; and
``(iv) the amount, if identified as a `voucher exchange'
shall not be considered a contribution for the purposes of
section 315 of that Act (2 U.S.C. 441a).
``(g) Value; Acceptance; Redemption.--
``(1) Voucher.--Each voucher disbursed by the Commission
under this section shall have a value in dollars, redeemable
upon presentation to the Commission, together with such
documentation and other information as the Commission may
require, for the purchase of broadcast airtime for political
advertisements in accordance with this section.
``(2) Acceptance.--A broadcasting station shall accept
vouchers in payment for the purchase of broadcast airtime for
political advertisements in accordance with this section.
``(3) Redemption.--The Commission shall redeem vouchers
accepted by broadcasting stations under paragraph (2) upon
presentation, subject to such documentation, verification,
accounting, and application requirements as the Commission
may impose to ensure the accuracy and integrity of the
voucher redemption system. The Commission shall use amounts
in the Political Advertising Voucher Account established
under subsection (h) to redeem vouchers presented under this
subsection.
``(4) Expiration.--
``(A) Candidates.--A voucher may only be used to pay for
broadcast airtime for political advertisements to be
broadcast before midnight on the day before the date of the
Federal election in connection with which it was issued and
shall be null and void for any other use or purpose.
``(B) Exeption for political party committees.--A voucher
held by a political party committee may be used to pay for
broadcast airtime for political advertisements to be
broadcast before midnight on December 31st of the odd-
numbered year following the year in which the voucher was
issued by the Commission.
``(5) Voucher as expenditure under feca.--
``(A) Congressional campaigns.--Except as provided in
subparagraph (B), for purposes of the Federal Election
Campaign Act of 1971 (2 U.S.C. 431 et seq.), the use of a
voucher to purchase broadcast airtime constitutes an
expenditure as defined in section 301(9)(A) of that Act (2
U.S.C. 431(9)(A)).
``(B) Presidential campaigns.--Notwithstanding any
provision of the Federal Election Campaign Act of 1971 or
chapter 95 or 96 of the Internal Revenue Code of 1986 to the
contrary, the use of a voucher by a candidate for nomination
for election, or election, to the Office of President does
not constitute an expenditure for purposes of that Act or
chapter.
``(h) Political Advertising Voucher Account.--
``(1) In general.--The Commission shall establish an
account to be known as the Political Advertising Voucher
Account, which shall be credited with commercial television
spectrum use fees assessed under this subsection, together
with any amounts repaid or otherwise reimbursed under this
section.
``(2) Spectrum use fee.--
``(A) In general.--The Commission shall assess, and collect
annually, a spectrum use fee based on a percentage of a
broadcasting station's gross revenues in an amount necessary
to carry out the provisions of this section.
``(B) Limitations.--The percentage under subparagraph (A)
may not be--
``(i) greater than 1 percent; nor
``(ii) less than .05 percent.
``(C) Availability.--Any amount assessed and collected
under this paragraph shall be retained by the Commission as
an offsetting collection for the purposes of making
disbursements under this section, except that--
``(i) the salaries and expenses account of the Commission
shall be credited with such sums as are necessary from those
amounts for the costs of developing and implementing the
program established by this section; and
``(ii) the Commission may reimburse the Federal Election
Commission for any expenses incurred by the Commission under
this section.
``(D) Fee does not apply to public broadcasting stations.--
Subparagraph (A) does not apply to a public
telecommunications entity (as defined in section 397(12) of
this Act).
``(3) Administrative provisions.--Except as otherwise
provided in this subsection, section 9 applies to the
assessment and collection of fees under this subsection to
the same extent as if those fees were regulatory fees imposed
under section 9.
``(i) Definitions.--In this section:
``(1) Broadcasting station.--The term `broadcasting
station' has the meaning given that term by section
315(e)(1).
``(2) Federal election.--The term `Federal election' means
any regularly-scheduled, primary, runoff, or special election
held to nominate or elect a candidate to Federal office.
``(3) Federal office.--The term `Federal office' has the
meaning given that term by section 101(3) of the Federal
Election Campaign Act of 1971 (2 U.S.C. 431(3)).
``(4) Legally-qualified candidate.--The term `legally-
qualified candidate' means a legally qualified candidate
within the meaning of section 315.
``(5) Political party.--The term `political party' means a
major party or a minor party as defined in section 9002(3) or
(4) of the Internal Revenue Code of 1986 (26 U.S.C. 9002(3)
or (4)).
``(6) Other terms.--Except as otherwise provided in this
section, any term used in this section that is defined in
section 301 of the Federal Election Campaign of 1971 (2
U.S.C. 431) has the meaning given that term by section 301 of
that Act.
``(j) Regulations.--The Commission shall prescribe such
regulations as may be necessary to carry out the provisions
of this section. In developing the regulations, the
Commission shall consult with the Federal Elections
Commission.''.
(b) Delayed Effective Date for Presidential Candidates.--
The provisions of subsections (b)(2)(E) and (d)(2)(C) of
section 315A of the Commissions Act of 1934, as added by
subsection (a), shall take effect on January 1, 2008.
Mr. FEINGOLD. Mr. President, I am pleased to join with the Senator
from Arizona, Senator McCain, in introducing legislation that we
believe will significantly improve media coverage of elections and
reduce the negative impact that skyrocketing TV advertising costs have
on Federal campaigns. And I am very glad that the Senator from
Illinois, Senator Durbin, has joined us as an original cosponsor of
this bill.
Although broadcast advertising is one of the most effective forms of
communication in our democracy, it also diminishes the quality of our
electoral process in two ways. First, broadcasters often fail to
provide adequate coverage to the issues in elections, focusing instead
on the horse race, if they cover elections at all. Second, the
extraordinarily high cost of advertising time fuels the insatiable need
for candidates to spend more and more time fundraising instead of
talking with voters. These two problems interact to undermine the great
promise that television has for promoting democratic discourse in our
country.
It need not be this way. The public owns the airwaves and licenses
them to broadcasters. Broadcasters pay nothing for their use of this
scarce and very valuable public resource. Their only ``payment'' is a
promise to meet public interest standards, a promise that often goes
unfulfilled. A recent study by the Committee for the Study of the
American Electorate found that only 18
[[Page S10586]]
percent of gubernatorial, senatorial and congressional debates held in
2000 were televised by network TV and an additional 18 percent were
covered by PBS or small independent TV stations. More than 63 percent
were not televised at all. This is shocking in a democracy that depends
on information and open debate.
The bill we introduce today addresses these problems by requiring
broadcast stations to devote a reasonable amount of air time to
election programming. It would also direct the FCC to create a voucher
system in which candidates and parties would receive vouchers they
could use for paid radio or TV advertising time financed by a broadcast
spectrum usage fee. Candidates would qualify for vouchers based on a
ratio matched to the amount of small dollar donations they raise.
Our proposal would allow candidates to leverage their grassroots
fundraising and would provide greater campaign resources to candidates
without requiring them to become more beholden to special interests.
The proposal would also make air time available to political parties,
which could be directed to underfunded candidates and challengers who
have a harder and harder time getting their message out under the
current system as the costs of advertising continue to rise.
Senator McCain and I remain devoted to improving the way our
electoral process functions and reducing the impact of big money on our
democracy. This new bill will advance that cause in a very significant
and necessary way. We recognize, of course, that little will happen on
this bill before the end of this session of Congress. We are
introducing it now so that the public and our colleagues can review it
and make suggestions on how to improve it. We hope to make significant
progress on this legislation next year and look forward to working with
our colleagues, as we did on campaign finance reform to make this bill
even better and then enact it into law.
______
By Mr. BROWNBACK (for himself, Mr. Nelson of Florida, Mr.
Lieberman, Mr. Murkowski, Mr. Sessions, and Mr. Miller):
S. 3125. A bill to designate ``God Bless America'' as the national
song of the United States; to the Committee on the Judiciary.
Mr. BROWNBACK. Mr. President, I rise today to introduce legislation,
with Senators Nelson, Lieberman, Murkowski, Sessions and Miller, to
honor one of our Nation's most stirring songs, ``God Bless America.''
This patriotic masterpiece was written by Irving Berlin, a man whose
background as an immigrant to our shores gave him a keen understanding
and appreciation of our nation and how important its existence was. The
United States has long been a symbol to peoples across the world, of
opportunity, freedom, and the rule of law, but at the time of ``God
Bless America,'' the US's importance was even more plain. This is
because the song was originally written in 1918 during the height of
the First World War, and then released for the first time in 1938 as
the clouds of war again gathered over Europe.
When Berlin first wrote ``God Bless America'' in 1918, he intended it
to be a solemn paean to his adopted nation as he looked across the
ocean to a war-torn Europe. Unfortunately, its somber and serious tone
made it incompatible with the musical revue he was working on at the
time. When the drums of war again sounded on distant shores, Berlin
realized his song had a purpose, and knew it was time to offer it to an
anxious country. After revising the lyrics to reflect the difference
twenty years and one Great War make, he introduced the song on
Armistice Day 1938, a simple song of peace, yet one that reminded both
Americans and people of all nations that our Nation was a great one.
This song accomplished exactly the author's intent--it so eloquently
expressed his love for our country that it has provided for all of us a
means to express our own love and feelings. It is why we have sung it
so many times over the past year since those terrible events of
September 11, and why we will continue to sing it for the years to
come. It captures the feelings every citizen shares, of love, of pride,
of patriotism, of sacrifice, and of freedom.
An instant sensation since its release, the power of this song to
uplift and comfort us particularly in the dark days of this past year,
reminds all of us of the strength of words to inspire. For that reason,
the time has come to give this song its long overdue recognition. That
is why today I propose legislation to designate ``God Bless America''
as our national ``song.''
This is not to replace our rousing national anthem, which is an
unforgettable salute to our hard-fought and triumphant birth as a
Nation, but to offer recognition to ``God Bless America.'' For ``God
Bless America'' is truly the perfect tribute for a Nation rising from
the ashes of September 11 to reclaim our firm and unwavering belief in
the goodness of man and the universal rights of liberty.
I ask unanimous consent that the text of the bill and the lyrics of
the song be printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
S. 3125
SECTION 1. NATIONAL SONG.
(a) In General.--The composition consisting of the words
and music known as ``God Bless America'' is designated as the
national song of the United States.
(b) Rule of Construction.--The designation of a national
song shall not be construed as affecting the national anthem.
____
God Bless America
Words and Lyrics by irving Berlin--Copyright 1939
While the storm clouds gather far across the sea,
Let us swear allegiance to a land that's free,
Let us all be grateful for a land so fair,
As we raise our voices in a solemn prayer:
God Bless America.
Land that I love
Stand beside her, and guide her
Thru the night with a light from above,
From the mountains, to the prairies,
To the oceans, white with foam,
God bless America,
My home sweet home.
God Bless America,
Land that I love,
Stand beside her,
And guide her,
Through the night,
With the light from above.
From the mountains,
To the prairies,
To the ocean,
White with foam,
God bless America,
My home sweet home.
God bless America,
My home sweet home.
______
By Mr. KERRY (for himself, Mr. Santorum, and Mr. Sarbanes):
S. 3126. A bill to amend the Internal Revenue Code of 1986 to allow
an income tax credit for the provision of homeownership and community
development, and for other purposes, to the Committee on Finance.
Mr. KERRY. Mr. President, owning your own home is the foundation of
the American dream. It encourages personal responsibility, provides
economic security and gives families a greater stake in the development
of their communities. Families who own their home are more civic-minded
and more willing to help develop the communities where they live.
Communities where homeownership rates are highest have lower crime
rates, better schools and provide a better quality of life for families
to raise their children. However, too many working families and
minorities have not been able to share in the dream of homeownership
due to the cost or lack of available housing.
That is why I am introducing the Community Development Tax Credit
Act, along with Senators Rick Santorum and Paul Sarbanes, which will
create a new homeownership tax credit program, based on the Low Income
Housing Tax Credit program, to encourage the construction and
substantial rehabilitation of homes for low and moderate-income
families in economically distressed areas. I believe this legislation
will increase the supply of affordable homes for sale in inner-cities,
rural areas and low and moderate-income neighborhoods across the United
States. The tax credit will bridge the gap that exists between the cost
of developing affordable housing and the price at which these homes can
be sold in many low-income neighborhoods by providing investors with a
tax credit of up to 50 percent of the cost of home construction or
rehabilitation.
Over the past decade, we have made substantial progress in increasing
the homeownership rate in the United States. In 2000, the U.S.
homeownership rate reached a record high of 67.1
[[Page S10587]]
percent with some 71 million U.S. Households owning their own home.
However, too many working families in low- and moderate-income
neighborhoods and minorities across our Nation have not been able to
share in this piece of the American Dream due to the high cost or lack
of available housing.
According to Census data for the second quarter of 2002, non-Hispanic
whites have a 74.3 percent homeownership rate while minority groups
have just a 53.7 percent homeownership rate. African-Americans have
only a 48 percent homeownership rate and Hispanics have a mere 47.6
percent homeownership rate in the same study. These numbers are
unacceptable.
Many middle-income working families increasingly struggle to either
find or afford a median-priced home in our Nation's cities. Over the
past two generations, many families have moved out of cities and into
the suburbs, which has had a negative effect on the development of
housing in the inner-city. In 1999, the homeownership rate in the
central-city areas was 50.4 percent, this is 23.2 percent lower than
the suburban homeownership rate of 73.6 percent. Today, developers are
unlikely to invest in any new housing development in inner-cities and
rural areas that may not be sold for the cost of construction. This is
especially true in low-income areas. There is a lack of affordable
single-family housing in areas where a majority of residents are
minority families. Properties will sit vacant and neighborhoods will
remain undeveloped unless the gap between development costs and market
prices can be filled.
Working families in this country are increasingly finding themselves
unable to afford housing. A person trying to live in Boston would have
to make more than $35,000, annually, just to rent a two-bedroom
apartment. This means teachers, janitors, social workers, police
officers and other full-time workers are having trouble affording even
a modest two-bedroom apartment when they should have a chance to buy a
home.
The story of Benjamin and Rita Okafor show how working families in
Massachusetts have great difficulty obtaining a decent home of their
own. For many years, the Okafor's and their two young children were
forced to live in a one-bedroom apartment. Benjamin Okafor, who worked
full time as a cab driver in Boston, spent days and months looking for
a bigger apartment for his family. However, the lack of affordable
housing in the Boston area made it impossible for him to find
appropriate housing for his family. When his wife Rita became pregnant
with their third child, the Okafor's knew something had to change in
their living situation. Luckily, Ben was accepted into the Habitat for
Humanity program and worked for 300 sweat equity hours constructing a
house. In August 2000, the Okafor family moved into a new home of their
own in Dorchester. Ben says that this new home gives them the hope and
stability they need. There are still too many working families living
in substandard housing and many more families that desperately need
assistance from Habitat for Humanity or from the Federal government to
become a homeowner.
Today, our Nation is facing an affordable rental housing crisis.
Thousands of low-income families with children, the disabled, and the
elderly are finding it difficult to obtain or afford privately owned
affordable rental housing units. Recent changes in the housing market
have limited the availability of affordable housing across the country,
while the growth in our economy in the last decade has dramatically
increased the cost of the housing that remains. Moving thousands of
working families from apartments to homes each year will help ease our
rental housing crisis and help many families now living in substandard
housing increase their quality of life.
By facing the mounting challenge of affordable housing we can
dramatically assist in the economic development low- and moderate-
income communities across our country. The production of new homes will
create millions of jobs in the inner city and rural areas where
unemployment has been for too long fact of life. The production of
housing has always been considered a driver of economic growth in our
economy. New housing production can turn many low income communities
around and help end the spiral of unemployment and crime which plague
too many of our inner cities today.
For these reasons, we need a new tax incentive for developers to
build affordable homes in distressed areas to allow working families to
buy their first home at a reasonable rate.
The Community Development Tax Credit Act, which I am introducing
today, bridges the gap between development costs and market value to
enable the development of new or refurbished homes in these areas to
blossom. The tax credit would be available to developers or investors
that build or substantially rehabilitate homes for sale to low- or
moderate-income buyers in low-income areas. The credit would generate
equity investment sufficient to cover the gap between the cost of
development and the price at which the home can be sold to an eligible
buyer
The tax credit volume would be limited to $1.75 per capita for each
State and allocated by the States themselves. Credits would be claimed
over five years, starting when homes are sold. This legislation will
result in approximately 50,000 homes built or refurbished annually,
assuming about $40,000 per home.
The maximum tax credit equals 50 percent of the cost of construction,
substantial rehabilitation, and building acquisition. The eligible cost
may not exceed the Federal Housing Administration single-family
mortgage limits. The minimum rehabilitation cost is $25,000. Eligible
building acquisition costs are limited to one-half of rehabilitation
costs. States will allocate only the level of tax credits necessary for
financial feasibility. Ten percent of the available credit will be set
aside for nonprofit organizations.
The eligible areas for the tax credit are defined as Census Tracts
with median income below 80 percent of the area or state median. Rural
areas that are currently eligible for USDA housing programs will be
eligible for the tax credit. Indian tribal lands will be eligible for
the tax credit. State-identified areas of chronic economic distress
will be eligible for the tax credit, subject to disapproval by the
Department of Housing and Urban Development
Those eligible to buy homes built or refurbished using the tax credit
include: individuals with incomes up to 80 percent of the area or state
median and up to 100 percent of area median income in low-income/high-
poverty Census Tracts.
Individual states will write plans for allocating the tax credits
using the following selection criteria: contribution of the development
to community stability and revitalization; community and local
government support; need for homeownership development in the area;
sponsor capability; and the long-term sustainability of the project as
owner-occupied residences. Individual developers along with investors
then can apply to the State to be awarded a tax credit for developing a
property in a low- or moderate-income area. If chosen by the State,
investors can start to claim the tax credits as the homes are sold to
eligible buyers. They can continue to claim the tax credit over five
years. Investors are not subject to recapture. If the home owner sold
the residence within five years, a scale would determine the percentage
of the gain would be recaptured by the Federal Government. In the first
two years, 100 percent of the gain and 80, 70 and 60 percent in the
third, fourth, and fifth years, respectively would be recaptured.
This legislation is supported by the U.S. Conference of Mayors,
Fannie Mae, Freddie Mac, the Enterprise Foundation, Local Initiatives
Support Coalition, Mortgage Bankers Association of America, National
Association of Home Builders, National Low Income Housing Coalition,
National Association of Local Housing Finance Agencies, National
Association of Realtors, National Council of La Raza, National Hispanic
Housing Conference, Habitat for Humanity International and others.
____________________