[Congressional Record Volume 148, Number 150 (Tuesday, November 19, 2002)]
[Senate]
[Pages S11575-S11580]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS
By Mr. KYL:
S. 3. A bill to repeal the sunset of the provisions of the Economic
Growth and Tax Relief Reconciliation Act of 2001, and for other
purposes; to the Committee on Finance.
Mr. KYL. Mr. President, Investors are the backbone of the U.S.
economic system. They provide the capital that entrepreneurs use to
start and grow businesses. Investors invest in everything from
corporations like General Electric to the local Mom and Pop convenience
store. These are the businesses that employ our American workers and
compete against other businesses throughout the United States and the
world. It is investor capital that fuels the most dynamic workings of
our economy.
Too often, our Federal Government has taken the American investor for
granted. Even worse, our Federal Government has singled him out for
adverse treatment by placing significant impediments in his path.
Congress needs to refocus our government's attention on helping our
investors as well as making our U.S. businesses more attractive
entities in which to invest.
Today, I am introducing legislation, the ``Contract with Investors,''
which incorporates a number of proposals to foster a better investment
environment.
In order to satisfy an arcane Senate budget rule, the 2001 tax-relief
law's provisions will expire in 2011. Making this bipartisan tax relief
permanent will eliminate a large source of investor uncertainty that
currently exists in the marketplace. Businesses are having a hard time
planning with the Tax Code potentially reverting back to old tax laws.
Businesses, and the investors who own them, need certainty and a stable
environment in which to prosper. Making last year's tax provisions
permanent will go a long way towards providing that certainty.
The second thing my bill does is accelerate last year's marginal
income tax rate reductions. Instead of reducing the tax brackets in
2004 and 2006, as currently scheduled, my bill will move the 2004 rate
reductions up to 2003 and the 2006 rate reductions up to 2004. Marginal
tax-rate reductions benefit all income tax-paying Americans. Many
investors invest in businesses that are sole proprietorships, i.e. non-
incorporated business entities. Owners of these businesses pay the
highest individual marginal income tax rate; under my bill the highest
rate they would pay in 2004 and beyond would be 35 percent, the same
rate as corporations.
The third provision would accelerate the repeal of the estate, or
more accurately ``death'', tax. A December 1998 report by the Joint
Economic Committee concluded that the existence of the death tax during
the last century has reduced the stock of investors' capital in the
economy by nearly half a
[[Page S11576]]
trillion dollars. The Joint Committee estimates that, by repealing the
death tax and putting those resources to better use, as many as 240,000
jobs could be created over seven years, and Americans would have an
additional $24.4 billion in disposable personal income.
Last year, Dr. Wilbur Steger, President of Consad Research
Corporation and a professor at Carnegie Mellon University testified
before the Senate Finance Committee that an immediate death-tax repeal
would provide a $40 billion automatic stimulus to the economy. This is
based on estimates of the amount of net unrealized capital gains that
would be unlocked by such a repeal. Many Americans choose to hold onto
their assets until death in order to obtain for their heirs a ``step-
up'' in basis. Eliminating the death tax and a limited step-up in basis
will provide an incentive for Americans to sell assets before death,
hence the term ``unlocking.''
Under current law, the death tax will go down to zero in 2010 but
reappear thereafter, at potent 2001 levels, thus adding significant
complexity to future death-tax planning, increasing costs that are a
drag on productivity, and retreating from a principled rejection of a
frankly immoral tax. This is unsatisfactory. Until the death tax is
repealed, family businesses, farms and ranches must still pay for
expensive life-insurance policies, death-tax planners, and tax
attorneys. These expenses total more than $12 billion a year, according
to Consad Research Corporation. A more efficient utilization of these
resources would result in an immediate stimulus for the economy. More
workers will be hired, more capital assets purchased and more
productive goods made if we accelerate the elimination of the death tax
and make it permanent. In short, Congress should hurry up and bury the
death tax for all time to enable family businesses, farms, and ranches
to begin investing those billions of wasted resources in the economy,
creating jobs and expanding services, providing a powerful stimulus for
their long-term survival. My bill would permanently repeal the death
tax in 2005, thus allowing all Americans 2 years to plan for a future
in which the federal government no longer taxes the death of its
citizens.
The fourth provision in my Contract with Investors addresses the
taxation of capital gains. My bill would reduce it to 10 percent. The
capital-gains tax is a form of double-taxation that penalizes risk-
taking and entrepreneurship. As many economists, including Federal
Reserve Chairman Alan Greenspan, note, the capital-gains tax should not
exist. Short of eliminating this tax, Congress must enact a large, and
permanent, reduction in the capital-gains tax rate in order to
stimulate new investment and more productive use of resources for both
the short-term and the long-term health of our economy.
According to a recent study by the American Council for Capital
Formation, American taxpayers face capital-gain tax rates that are 35
percent higher than those paid by the average investor in other
countries. In addition, the United States is one of a small number of
countries that requires a holding period for an investment to qualify
for a lower capital-gain treatment.
In the last decade, individual capital-gains rate reductions and
shortening of the holding period has boosted U.S. economic growth.
Reducing the cost of capital will promote the promote the type of
productive business investment that fosters growth in output and high-
paying jobs. Lowering rates will aid entrepreneurs in their effort to
promote technological advances in products and services that people
want and need.
And let's not forget about our national savings. Reducing capital-
gains taxes means fewer taxes on Americans who choose to save for their
future. What our economy needs is to remove impediments for savings and
capital formation. When Americans choose to save for their retirement
security and other financial goals, they are investing in the United
States. We need to make that choice more attractive so that Americans
choose to invest more in the United States. Reducing the capital-gains
taxes will help achieve this goal.
My bill will also modernize the capital-loss provisions by increasing
the amount of capital loss an individual may deduct against ordinary
income to $10,000 from the current-law $3,000, and indexing it for
future inflation. This $3,000 limit was arbitrarily set over 25 years
ago and would have grown to $10,000 had it been indexed when it was
enacted. Due to this lack of indexation, many investors are forced to
hold on to unproductive investments. Updating this $3,000 limit will
permit investors to sell these unproductive assets and invest the
proceeds in more productive assets.
Next, my bill will provide additional incentives for Americans to
increase the amounts and periods of time in which they invest for their
retirement security. Increasing the annual, maximum IRA contribution
from $3,000 to $5,000 and the annual, maximum 401(k) plan contribution
from $11,000 to $15,000 would enable American workers to save more for
their future by investing in businesses. Increasing from 70.5 to 75 the
age at which those tax-deferred retirement-savings accounts must begin
making minimum required annual withdrawals will allow American seniors
who are approaching this arbitrary age to choose whether to maintain
their investments. They will not longer be forced to divest.
The next provision in my bill would eliminate the double taxation of
corporate profits. Currently, businesses pay income taxes on their
profits. Their investors are forced to pay a second income tax on the
amounts that corporations distribute to them in the form of dividends.
The national Center for Policy Analysis has calculated that the
combined tax rate on corporate profits is approximately 60 percent.
My bill would remedy this problem by exempting from income tax the
dividends received by individuals from publicly traded C corporations.
Eliminating this taxation will produce higher returns on dividend-
yielding equity investments. Companies will have an incentive to make
money and give it to the investor/shareholders in order to increase the
value of the stock. Investors and businesses will benefit from this
proposal.
Finally, I have included five provisions under Sense of the Senate
language. I believe that the Senate must act on these issues and I
stand ready and willing to assist my fellow Senators in solving these
problems.
First, Congress should pass legislation to safeguard American
workers' pension and retirement accounts. This year, the Finance
Committee unanimously passed out of committee such a bill. The Senate
and the House of Representatives should act quickly to pass similar
legislation as soon as possible.
Second, Congress should modernize this country's international tax
provisions in order to permit U.S. companies to better compete
internationally. Our Tax Code's provisions, particularly the
international tax, are placing our U.S. companies and the investors who
own them at a distinct competitive disadvantage. Congress must
modernize these provisions and move towards ending the current practice
of taxing profits earned outside our country's boundaries.
Third, Congress must take the trouble to purge redundant, outdated,
and unscientific regulatory burdens on investors and U.S. companies.
Congress is quick to pass onerous new laws but slow to repeal them.
This is an abdication of our responsibilities as legislators. Before
placing new burdens on investors and businesses, Congress should be
required to perform a cost-benefit analysis as well as instituting
performance criteria to monitor and evaluate these new burdens on U.S.
businesses and investors.
Fourth, Congress should enact meaningful tort reform as soon as
possible.
Finally, Congress should enact meaningful tax reform that simplifies
the Federal Tax Code and reduces the cost-recovery periods that
businesses are forced to use to recover the costs of capital.
Now is the time for bold action. A ``Contract with Investors'' is
long overdue. I have laid out my principles. I look forward to future
hearings and discussions with my colleagues. It's time to get working.
______
By Mr. GRAMM (for himself and Mr. Hagel):
S. 5. A bill to strengthen and permanently preserve social security
through the power of investment and compound interest without benefit
reductions or tax increases, and for other purposes; to the Committee
on Finance.
[[Page S11577]]
Mr. HAGEL. Mr. President, I rise today to join the senior Senator
from Texas in introducing the Social Security Preservation Act. He has
worked a decade on this proposal, and I want to ensure that, as he
leaves this distinguished body in a few short weeks, his time and
effort will not have been wasted, for the stakes are far too high.
Everyone knows that America's demographics are rapidly changing. In
just nine short years, in 2011, the first of my generation of baby
boomers will retire. In the 20 years thereafter, the number of
Americans aged 65 and older will grow four times as fast as the number
of working Americans. Under the current system, where no real
investments are ever made and current benefits are paid entirely by
taxing current workers, how do we expect to pay for this shift in
demographics? In 2015, Social Security will be distributing more in
benefits than it collects in payroll taxes, and by 2038, the system
will be completely bankrupt. Congress will be forced to either raise
taxes on the next generation of workers by nearly 40 percent or cut the
benefits of retirees by nearly 30 percent. If we continue to defer the
difficult decisions on how we fix the system, that will be the position
we will find ourselves in. If we begin now, however, we can stabilize
and enhance the system before it is scheduled to go broke. But we must
start now.
In his message to Congress on Social Security in 1935, Franklin
Delano Roosevelt called for a Social Security system of ``voluntary
contributory annuities by which individual initiative can increase the
annual amounts received in old age.'' This bill embraces that vision,
and will strengthen and permanently preserve Social Security by
actually making investments. All workers will have the option of
investing a portion of their wages into accounts that earn a higher
rate of return. Upon retirement, these investing workers would use the
money in their accounts to purchase an annuity to pay benefits promised
under the current system plus a bonus for participating in the new
system. They could keep any excess. All workers, both those who invest
and those who choose to remain in the current system, would be
guaranteed every dollar of their currently promised benefit. No worker
would ever experience a cut in benefits or a hike in taxes at any time.
And when fully implemented, these changes to Social Security will yield
benefits over two times those currently provided to an average worker.
And the system's coming insolvency in 2038 would be reversed.
It is time for our Nation to confront Social Security's impending
financial crisis. For too long, we have ignored our nation's changing
demographics which will result in a crushing burden being placed on our
Social Security and Medicare systems if we don't deal with this
challenge now. It will demand either higher taxes or reduced benefits
later if we continue to defer our responsibilities. For too long, we
have feared open and informative debate about reforming the Social
Security system, believing that the American people are unwilling to
consider the realities that we face. Politicians have been afraid of
the political risks in honestly dealing with Social Security. The
Congress and the President must face up to their responsibilities in
dealing with this challenge. I will reintroduce this legislation to
reform the Social Security system at the beginning of the next Congress
and look forward to working with my colleagues and President Bush in
this effort.
______
By Mr. DURBIN:
S. 3173. A bill to amend title 5, United States Code, to establish a
national health program administered by the Office of Personnel
Management to offer Federal employee health benefits plans to
individuals who are not Federal employees, and for other purposes; to
the Committee on Governmental Affairs.
Mr. DURBIN. Mr. President, today I am introducing legislation to make
available to all Americans the same range of private health insurance
plans available to Members of Congress and other Federal employees
through the Federal Employees Health Benefits Program, FEHBP.
Too many Americans do not have real insurance options. Many
individuals lack insurance because no insurer is willing to cover them
at a reasonable price. Others work for employers who do not provide
health insurance or offer only one insurance provider. This legislation
addresses these issues by giving individuals and businesses access to
the group purchasing power of FEHBP and the wide range of health plans
in that program.
The OPTION Act, Offering People True Insurance Options Nationwide,
would expand insurance options by allowing individuals to enroll in
private health insurance plans nearly identical to the plans available
to federal employees. Though the OPTION program would be separate from
the Federal employees program, it would be modeled after FEHBP and
would draw from FEHBP's strengths: plan choice, group purchasing
savings, comprehensive benefits, and open enrollment periods.
Under this legislation, all FEHBP health plans would be required to
offer an OPTION health plan to non-Federal employees with the same
range of benefits they offer Federal employees through FEHBP.
OPTION enrollees would be placed in a separate risk pool to prevent
any adverse effect on current FEHBP employees, annuitants, and their
families. The OPTION Act would not result in any changes to the
premiums or benefits of today's FEHBP health plans.
OPTION health plans would not be allowed to impose any preexisting
condition exclusions on new OPTION enrollees who have at least one year
of health insurance coverage immediately prior to enrollment in an
OPTION plan. To prevent people from waiting until they are sick to
enroll, health plans would be allowed to exclude coverage for
preexisting conditions for up to one year for people without coverage
immediately prior to enrollment.
One of the few differences from FEHBP is that OPTION plans would be
allowed to vary premiums by age so that younger enrollees would be more
likely to enroll. OPTION plans also would be required to offer rebates
or lower premiums to encourage and reward longevity of health coverage.
These provisions would act as an incentive for people to sign up when
they are young and to maintain continuous coverage.
Along with making FEHBP available in the individual market, the
OPTION program will allow businesses to tap into the type of group
buying power in the federal employees program if they voluntarily
choose to participate. To be eligible, a business would have to be
willing to pay at least a minimum percentage of premiums, varying from
40 percent to 60 percent depending on the size of the business.
Employers would also be offered an incentive to begin enrolling their
employees by allowing them to pay as little as 20 percent of the
premium for the first year. This innovative employer option would
encourage employer health coverage rather than shifting coverage away
from the private sector. I want to emphasize that employer
participation would be entirely voluntary.
Under the OPTION Act, premiums would not be government-subsidized.
Instead, enrollees and those employers who choose to participate would
be responsible for the cost of the premiums.
The OPTION program would be administered by the Office of Personnel
Management, OPM, which administers the FEHBP program, and would
generally follow the rules for FEHBP. OPM has developed considerable
expertise in negotiating and working with health plans and has shown
that it can run a health program well at a minimal cost. We can build
on OPM's expertise to extend the same health insurance options to all
Americans.
Finally, once it is up and running, this program would pay for
itself. Administrative costs would be covered from a portion of the
OPTION premiums. Those who benefit from the program would pay for its
overhead costs.
This legislation could open the door for many Americans to obtain
good health insurance coverage. Health insurance premiums in today's
market can be especially high, both for individuals and for small
businesses buying insurance on their own. This legislation will reduce
the cost of insurance, and as a result will help to reduce the number
of uninsured Americans. It will also expand insurance options. I
encourage my colleagues to support this very important legislation.
[[Page S11578]]
I ask unanimous consent that the text of the legislation be printed
in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 3173
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 ``Offering People True
Insurance Options Nationwide Act of 2002''.
SEC. 2. OPTION HEALTH INSURANCE.
Subpart G of part III of title 5, United States Code, is
amended by adding at the end the following:
``CHAPTER 90A--HEALTH INSURANCE FOR NON-FEDERAL EMPLOYEES
``Sec.
``9051. Definitions.
``9052. Health insurance for non-Federal employees.
``9053. Contract requirement.
``9054. Eligibility.
``9055. Alternative conditions to Federal employee plans.
``9056. Coordination with social security benefits.
``9057. Non-Federal employer participation.
``Sec. 9051. Definitions
``In this chapter--
``(1) the terms defined under section 8901 shall have the
meanings given such terms under that section; and
``(2) the term `Office' means the Office of Personnel
Management.
``Sec. 9052. Health insurance for non-Federal employees
``(a) The Office of Personnel Management shall administer a
health insurance program for non-Federal employees in
accordance with this chapter.
``(b) Except as provided under this chapter, the Office
shall prescribe regulations to apply the provisions of
chapter 89 to the greatest extent practicable to eligible
individuals covered under this chapter.
``(c) In no event shall the enactment of this chapter
result in--
``(1) any increase in the level of individual or Government
contributions required under chapter 89, including copayments
or deductibles;
``(2) any decrease in the types of benefits offered under
chapter 89; or
``(3) any other change that would adversely affect the
coverage afforded under chapter 89 to employees and
annuitants and members of family under that chapter.
``(d) The Office shall develop methods to facilitate
enrollment under this chapter, including the use of the
Internet.
``(e) The Office may enter into contracts for the
performance of appropriate administrative functions under
this chapter.
``Sec. 9053. Contract requirement
``(a) Each contract entered into under section 8902 shall
require a carrier to offer to eligible individuals under this
chapter, throughout each term for which the contract remains
effective, the same benefits (subject to the same maximums,
limitations, exclusions, and other similar terms or
conditions) as would be offered under such contract or
applicable health benefits plan to employees, annuitants, and
members of family.
``(b)(1) The Office may waive the requirements of this
section, if the Office determines, based on a petition
submitted by a carrier that--
``(A) the carrier is unable to offer the applicable health
benefits plan because of a limitation in the capacity of the
plan to deliver services or assure financial solvency;
``(B) the applicable health benefits plan is not sponsored
by a carrier licensed under applicable State law; or
``(C) bona fide enrollment restrictions make the
application of this chapter inappropriate, including
restrictions common to plans which are limited to individuals
having a past or current employment relationship with a
particular agency or other authority of the Government.
``(2) The Office may require a petition under this
subsection to include--
``(A) a description of the efforts the carrier proposes to
take in order to offer the applicable health benefits plan
under this chapter; and
``(B) the proposed date for offering such a health benefits
plan.
``(3) A waiver under this subsection may be for any period
determined by the Office. The Office may grant subsequent
waivers under this section.
``Sec. 9054. Eligibility
``An individual shall be eligible to enroll in a plan under
this chapter, unless the individual is enrolled or eligible
to enroll in a plan under chapter 89.
``Sec. 9055. Alternative conditions to Federal employee plans
``(a) For purposes of enrollment in a health benefits plan
under this chapter, an individual who had coverage under a
health insurance plan and is not a qualified beneficiary as
defined under section 4980B(g)(1) of the Internal Revenue
Code of 1986 shall be treated in a similar manner as an
individual who begins employment as an employee under chapter
89.
``(b) In the administration of this chapter, covered
individuals under this chapter shall be in a risk pool
separate from covered individuals under chapter 89.
``(c)(1) Each contract under this chapter may include a
preexisting condition exclusion as defined under section
9801(b)(1) of the Internal Revenue Code of 1986.
``(2)(A) The preexisting condition exclusion under this
subsection shall provide for coverage of a preexisting
condition to begin not more than 1 year after the date of
coverage of an individual under a health benefits plan,
reduced by 1 month for each month that individual was covered
under a health insurance plan immediately preceding the date
the individual submitted an application for coverage under
this chapter.
``(B) For purposes of this paragraph, a lapse in coverage
of not more than 63 days immediately preceding the date of
the submission of an application for coverage shall not be
considered a lapse in continuous coverage.
``(d)(1) Rates charged and premiums paid for a health
benefits plan under this chapter--
``(A) may be adjusted and differ from such rates charged
and premiums paid for the same health benefits plan offered
under chapter 89;
``(B) shall be negotiated in the same manner as negotiated
under chapter 89; and
``(C) shall be adjusted to cover the administrative costs
of this chapter.
``(2) In determining rates and premiums under this
chapter--
``(A) the age of covered individuals may be considered; and
``(B) rebates or lower rates and premiums shall be set to
encourage longevity of coverage.
``(e) No Government contribution shall be made for any
covered individual under this chapter.
``(f) If an individual who is enrolled in a health benefits
plan under this chapter terminates the enrollment, the
individual shall not be eligible for reenrollment until the
first open enrollment period following 6 months after the
date of such termination.
``Sec. 9056. Coordination with social security benefits
``Benefits under this chapter shall, with respect to an
individual who is entitled to benefits under part A of title
XVIII of the Social Security Act, be offered (for use in
coordination with those social security benefits) to the same
extent and in the same manner as if coverage were under
chapter 89.
``Sec. 9057. Non-Federal employer participation
``(a) In this section the term--
``(1) `employee', notwithstanding section 9051, means an
employee of a non-Federal employer;
``(2) `non-Federal employer' means an employer that is not
the Federal Government; and
``(3) `total premium amount' means the total premiums for
individual coverage for the health benefits plan under which
the employee is enrolled, regardless of whether the employee
is enrolled as an individual or for self and family.
``(b)(1) The Office shall prescribe regulations under which
non-Federal employers may participate under this chapter,
including--
``(A) the offering of health benefits plans under this
chapter to employees through participating non-Federal
employers; and
``(B) a requirement for participating non-Federal employer
contributions to the payment of premiums for employees who
enroll in a health benefits plan under this chapter.
``(2) A participating non-Federal employer shall pay an
employer contribution for the premiums of an employee or
other applicable covered individual as follows:
``(A) A non-Federal employer that employs not more than 2
employees shall not be required to pay an employer
contribution.
``(B) A non-Federal employer that employs more than 2 and
not more than 25 employees shall pay not less than 40 percent
of the total premium amount.
``(C) A non-Federal employer that employs more than 25 and
not more than 50 employees shall pay not less than 50 percent
of the total premium amount.
``(D) A non-Federal employer that employs more than 50
employees shall pay not less than 60 percent of the total
premium amount.
``(3) Notwithstanding paragraph (2) (B), (C), or (D), a
non-Federal employer that employs more than 2 employees shall
pay not less than 20 percent of the total premium amount with
respect to the first year in which that employer participates
under this chapter.
``(c)(1) A participating non-Federal employer shall ensure
that each eligible full-time employee may enroll in a plan
under this chapter.
``(2)(A) A participating non-Federal employer may not offer
a health insurance plan to employees (other than a health
benefits plan under this chapter) unless such health
insurance plan is offered continuously on and after the date
of enactment of this chapter.
``(B) If a participating non-Federal employer offers
coverage under this chapter and under another plan as
provided under subparagraph (A), the non-Federal employer--
``(i) shall treat all employees in the same manner with
respect to such offerings; and
``(ii) may not use financial incentives or disincentives to
encourage an employee or class of employees to enroll in the
health insurance plan not offered under this chapter.''.
[[Page S11579]]
SEC. 3. TECHNICAL AND CONFORMING AMENDMENTS.
(a) Contract Requirement Under Chapter 89.--Section 8902 of
title 5, United States Code, is amended by adding after
subsection (o) the following:
``(p) Each contract under this chapter shall include a
provision that the carrier shall offer any health benefits
plan as required under chapter 90A.''.
(b) Table of Chapters.--The table of chapters for part III
of title 5, United States Code, is amended by inserting after
the item relating to chapter 90 the following:
``90A. Health Insurance for Non-Federal Employees...........9051''.....
SEC. 4. EFFECTIVE DATE.
This Act and the amendments made by this Act shall take
effect on the date of enactment of this Act and shall apply
to contracts that take effect with respect to calendar year
2003 and each calendar year thereafter.
______
By Ms. LANDRIEU (for herself and Mr. Breaux):
S. 3176. A bill to amend the Internal Revenue Code of 1986 to allow
employers in renewal communities to qualify for the renewal community
employment credit by employing residents of certain other renewal
communities; to the Committee on Finance.
Ms. LANDRIEU. Mr. President, today I am introducing a modification of
legislation I introduced earlier in the 107th Congress relating to the
Renewal Community program. The Renewal Community program has been
tremendously valuable in promoting job growth and economic development
in the poorest areas of the country.
There are 40 urban and rural renewal community areas designated under
the Community Renewal Tax Relief Act of 2000. The poverty rate in
renewal communities is at least 20 percent, and the unemployment rate
is one-and-a-half times the national level. The households in the
renewal communities have incomes that are 80 percent below the median
income of households in their local jurisdictions. Four areas of
Louisiana received renewal community designations.
Businesses in a renewal community can receive a variety of tax
benefits for hiring residents of the same renewal community. These tax
benefits include A $1,500 Federal credit for hiring workers from the
renewal community, as well as a $2,400 work opportunity credit for
hiring employees from groups with traditionally high unemployment
rates. There is one important qualification in the program that poses a
peculiar problem in Louisiana, as well as a few other parts of the
country: a business can only take advantage of these credits if it
hires residents from the same renewal community that the business is
in.
Why is this a problem for Louisiana? Because, some of our renewal
communities border each other. Under the rules of the program, the
business cannot receive the credit for hiring a resident of a different
renewal community. In Louisiana, the closest available job for someone
might be at a business two or three miles away, but if that business is
not in the same renewal community as the worker, the business cannot
get the tax credit.
A good example of what I am talking about is in the northern part of
Louisiana, home of the North Louisiana Renewal Community and the
Ouachita Renewal Community. The city of Monroe is located at the heart
of the Ouachita Renewal Community and it serves as the economic hub for
Northeast Louisiana. All around Monroe and the Ouachita Renewal
Community there are parishes which fall in the North Louisiana Renewal
Community, Morehouse Parish to the north, Richland Parish to the east,
Caldwell Parish to the south, and Lincoln Parish to the west. People
from these parishes will naturally look in Monroe for jobs. But under
the rule, businesses in Monroe cannot take advantage of the tax credits
even if they hire wokers from only a short distance away.
My legislation, the Renewal Community Tax Benefit Improvement Act of
2002, will allow the employers in one renewal community to hire
employees from an adjacent or nearby renewal community area and still
receive the tax benefits granted through the act. The bill I am
introducing today is a slightly more narrow version of my earlier bill
to bring needed flexibility to the renewal community program. I am
pleased that my colleague from Louisiana, Senator Breaux, is an
original cosponsor of this bill.
This legislation is a small change that will make a big difference to
the people of Louisiana. I urge my colleagues to support this bill.
______
By Mr. HOLLINGS:
S. 3177. A bill to authorize appropriations for the programs of the
Department of Commerce's National Institute of Standards and
Technology, to amend the National Institute of Standards and Technology
Act, and for other purposes; to the Committee on Commerce, Science, and
Transportation.
Mr. HOLLINGS. Mr. President, today I am pleased to introduce the
National Institutes of Standards and Technology, NIST, Authorization
Act. The bill is a routine authorization of appropriations for NIST. It
includes some provisions to change the Institute's Advanced Technology
Program that were the subject of hearings in the Commerce Committee
earlier this year. In addition, the bill includes several technical
changes to the NIST Act which the agency has requested.
NIST is really a hidden treasure. Twice in the past five years, NIST
Scientists have shared in the Physics Nobel Prize. Whether they are
investigating the collapse of the World Trade Center, making small
manufacturers better, sponsoring innovative research, or improving
timekeeping, the people of this little-noticed agency continue to do
amazing work, and I commend them.
Nonetheless, we continue to be embroiled in an annual tug-of-war on
funding for the Advanced Technology Program, known as ATP. I am
encouraged that Secretary Evans and Deputy Secretary Bodman want to
stabilize this program. I am introducing this bill to help them in that
cause by including several of the Department's suggestions to improve
the ATP.
The benefits of the ATP are well-documented. The program has been
studied thoroughly from individual case studies, to comprehensive
examinations like the 2001 study by the National Academy of Sciences'
National Research Council. The results are clear. ATP is stimulating
collaboration, accelerating the development of high-risk technologies,
and paying off for the nation.
The Commerce Department has proposed several changes to the ATP. The
bill includes provisions to allow universities to lead ATP projects and
to have interest in the intellectual property developed under those
projects, as well as provisions to further clarify that projects are to
remove scientific and technical barriers and to evaluate ATP's review
process.
In addition, the bill would clarify that the program should operate
free of political influence by ensuring that final project decisions
are made by career NIST officials, as they have been since the
program's inception.
However, the Administration's proposal for recoupment of up to 5
times the original amount of funding is not acceptable and is not
included. The record on recoupment was made at our hearing in April of
this year. It is an approach which the program has tried and failed.
More importantly, recoupment discourages companies from participating
in the program, imposing overwhelming accounting burdens that companies
may be unable to fulfill.
In the end, the bill hopes to build on ATP's tremendous successes.
Since its inception in 1989 this industry-led, competitive, and cost-
shared program has helped the U.S. develop the next generation of
breakthrough technologies in advance of its foreign competitors.
The Commerce Committee heard testimony from Scott Donnelly of GE. His
company, with ATP funding, developed a new method to produce the X-ray
panels that are the heart of a new digital mammography system. This
system is giving women and their doctors access to better, cheaper
digital mammograms.
A March 1999 study found that future returns from just three of the
completed ATP projects, improving automobile manufacturing processes,
reducing the cost of blood and immune cell production, and using a new
material for prosthesis devices, would pay for all projects funded to
date by the ATP.
The bill also provides full funding for the Manufacturing Extension
Partnership, MEP, Centers which the Administration has proposed to cut.
Ironically,
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these MEP Centers help fulfill one of the top priorities stated in the
Administration's budget: ``revitalize the economy and create jobs.''
MEP helps small manufacturers stay competitive and, in 2000, helped
these businesses attain $2.3 billion in increased or retained sales,
save costs of $480 million, and create or retain more than 25,000 jobs.
While the time remaining in this session is short, I want to
introduce this NIST Authorization bill to stimulate the productive
dialog that we have had with interested members and the Administration
on the programs of NIST. I look forward to continuing this work during
the 108th Congress.
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