[Congressional Record Volume 149, Number 52 (Tuesday, April 1, 2003)]
[Senate]
[Pages S4631-S4645]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS
By Mrs. CLINTON (for herself, Mr. Schumer, Mrs. Feinstein, Ms.
Landrieu, Mrs. Murray, Ms. Cantwell, and Ms. Collins):
S. 749. A bill to authorize the Secretary of the Interior to
establish the Votes for Women History Trail in the State of New York;
to the Committee on Energy and Natural Resources.
Mrs. CLINTON. Mr. President, today, I am introducing the Votes for
Women's History Trail Act today in honor of Women's History Month. I
recognize that this is a very difficult time in the history of our
country. Our brave soldiers are putting their lives on the line in a
war halfway around the world. At times like this it is important to
remember our pioneers, the people who fought for equality and liberty
for all Americans. Their courage should serve as an inspiration at
troubling times like these.
The Votes for Women's History Trail Act would create a moving
memorial to the women's suffrage movement in upstate New York, home to
many of the most notable figures and events in the fight for women's
suffrage. The Women's Rights movement began in 1848 when the first
Women's Rights Convention occurred in Seneca Falls, NY. Although this
convention was planned on very short notice, more than 300 people
descended on Seneca Falls to challenge the subordination of women to
men and call for equal rights.
After the Seneca Falls convention, the women's movement, lead in
large part by Elizabeth Cady Stanton and Susan B. Anthony, continued
their efforts to break down barriers for women. At times, they suffered
major setbacks. Susan B. Anthony was arrested when she tried to vote by
claiming that the 14th amendment entitled her to as a ``citizen.'' In
1875, the United States Supreme Court upheld the decision, forcing the
women's movement to pursue a different strategy. They were undeterred
and launched statewide campaigns for voting rights for women. Their
efforts eventually paved the way for the passage of the 19th amendment
in 1920--72 years after the first Women's Rights Convention.
These pioneers believed that women ought to be full and equal
partners in the social, cultural, religious, economic, educational, and
political life. To a large degree, their vision has been realized. But
the journey is not complete. Women still earn only $.73 for every
dollar earned by men. They are still underrepresented in the highest
levels of virtually every occupation and field, including the United
States Congress.
The Votes for Women's History Trail Act would create a fitting
tribute to this critical period in our history and to the people whose
strength and clarity of vision led us through the journey. For young
children and older Americans alike, it would serve as an important
reminder of how very far we have come.
The National Park Service has already conducted a feasibility study
about this trail. Their study concluded that the Votes for Women's
History Trail is of historical value, national significance, and
possesses significant potential for public use and enjoyment. The study
examined over 300 properties and narrowed the list to the 20 of the
most significant and easily accessible to the public.
I am proud to introduce this bill on behalf of Senators Schumer,
Feinstein, Landrieu, Cantwell, and Murray, and Stabenow. I look forward
to working with them and so many of my other colleagues to make the
Votes for Women's History Trail a reality.
______
By Mr. McCAIN (for himself, Mr. Dodd, Mr. Allen, Mr. Breaux, Mr.
Warner, Mr. Akaka, Mr. Bennett, Mrs. Lincoln, Ms. Collins, Mr.
Hollings, Mr. Chafee, Mr. Fitzgerald, Ms. Landrieu, Mr.
Brownback, Mr. Campbell, Mr. Hagel, Mr. Roberts, Mr. Sarbanes,
Mr. Smith, and Ms. Snowe):
S. 750. A bill to amend title II of the Social Security Act to
increase the level of earnings under which no individual who is blind
is determined to have demonstrated an ability to engage in substantial
gainful activity for purposes of determining disability; to the
Committee on Finance.
Mr. McCAIN. Mr. President, I rise today to introduce an important
piece of legislation, which will have a tremendous impact on the lives
of blind people throughout the country. In 1996, with the passage of
the Senior Citizens Freedom to Work Act, Congress broke the historic
20-year link between blind people and senior citizens in regards to the
Social Security earnings. Previously, that linkage to earnings limits
helped many blind people become self-sufficient and productive members
of society.
The Senior Citizens Freedom to Work Act raised the earnings limit for
seniors, without giving blind people the same opportunity. My intent
when I sponsored that legislation was not to break the link between
blind people and the senior population. Since then, I have worked with
a bipartisan group of senators, in the spirit of fairness, to ensure
that the blind population receives a raise in earnings limits, similar
to that afforded to seniors under the 1996 Act. We must not continue
policies which discourage blind individuals from working and
contributing to our nation. I believe we should provide blind people
with the opportunity to be productive and ``make it'' on their own.
Today I am joined by my good friend Senator Dodd, and a bipartisan
group of senators, in introducing the Blind Empowerment Act of 2003.
This bill is
[[Page S4632]]
similar in purpose to the Blind Person's Earnings Equity Act, which I
sponsored in previous Congresses. Over a five year period of time, the
Blind Empowerment Act raises the earnings exemption for blind persons
to afford them with greater flexibility to achieve their professional
and personal goals, without sacrificing Social Security benefits.
The earnings test treatment of our blind and senior populations
historically has been identical. From 1977, blind persons and senior
citizens shared the identical earnings exemption threshold under Title
II of the Social Security Act. The earnings limit for the blind is
currently $1,330 a month for fiscal year (FY) 2003, had the link not
been broken in the Senior Citizens Freedom to Work Act, it would be
$2,560 today. Senior citizens are now given unlimited opportunity to
increase their earnings without losing a portion of their Social
Security benefits. The blind, however, have been left behind.
The Social Security earnings test imposes as great a work
disincentive for blind people as it once did for senior citizens. In
fact, the earnings test probably provides a greater aggregate
disincentive for blind individuals because many blind beneficiaries are
of working age and are capable of valuable and productive work.
Blindness is often associated with adverse social and economic
consequences. Many blind individuals who desperately want to work
encounter enormous obstacles to achieve sustained employment or any
employment at all. They take great pride in being able to work and
contribute to society. By linking the blind with seniors in 1977,
Congress provided a great deal of hope and an incentive for blind
people to enter the work force. By not allowing blind individuals the
opportunity to increase their earnings, as we have for senior citizens,
we are now taking that hope away from them.
Blind people are likely to respond favorably to an increase in the
earnings test by working more, which will increase their tax payments
and purchasing power allowing the blind to make a greater contribution
to the general economy. In addition, encouraging blind individuals to
work and allowing them to work more without being penalized would bring
additional revenue into the Social Security trust funds as well as the
federal Treasury.
I hope that this Congress will finally address issues regarding the
overall structure of the Social Security system and work towards
solutions that will strengthen the system for seniors of today and
tomorrow without placing an unfair burden on working Americans. It is
absolutely crucial that we include raising the earnings test for blind
individuals as a part of any Social Security bill we enact this year.
I urge each of my colleagues to join me in sponsoring the Blind
Empowerment Act of 2003, to restore fair and equitable treatment for
our blind citizens and to give the blind community increased financial
independence. Our Nation would be better served if we restore hope for
the blind and provide them with the freedom, opportunities and fairness
afforded to our Nation's seniors.
I ask unanimous consent that the text of the Blind Empowerment Act of
2003 be printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 750
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
The Act may be cited as the ``Blind Empowerment Act of
2003''.
SEC. 2. INCREASE IN AMOUNT DEMONSTRATING SUBSTANTIAL GAINFUL
ACTIVITY IN THE CASE OF BLIND INDIVIDUALS.
Section 223(d)(4) of the Social Security Act (42 U.S.C.
423(d)(4)) is amended--
(1) by striking the second sentence of subparagraph (A);
and
(2) by adding at the end the following new subparagraph:
``(C)(i) No individual who is blind shall be regarded as
having demonstrated an ability to engage in substantial
gainful activity on the basis of monthly earnings in any
taxable year that do not exceed an amount equal to--
``(I) in the case of earnings in the taxable year beginning
after December 31, 2002, and before January 1, 2004, $1,330
per month;
``(II) in the case of earnings in the taxable year
beginning after December 31, 2003, and before January 1,
2005, $1,720 per month;
``(III) in the case of earnings in the taxable year
beginning after December 31, 2004, and before January 1,
2006, $2,110 per month;
``(IV) in the case of earnings in the taxable year
beginning after December 31, 2005, and before January 1,
2007, $2,500 per month; and
``(V) in the case of earnings in taxable years beginning
after December 31, 2006, the dollar amount determined for
purposes of this clause under clause (ii).
``(ii) The Commissioner of Social Security shall, on or
before November 1 of 2006 and of every year thereafter,
determine and publish in the Federal Register the monthly
dollar amount for purposes of clause (i) in the case of
taxable years beginning with or during the succeeding
calendar year. Such dollar amount shall be the larger of--
``(I) the monthly dollar amount in effect under clause (i)
for taxable years beginning with or during the calendar year
in which the determination under this clause is made, or
``(II) the product of $2,500 and the ratio of the national
average wage index (as defined in section 209(k)(1)) for the
calendar year before the year in which the determination
under this clause is made to the national average wage index
(as so defined) for 2004,
with such product, if not a multiple of $10, being rounded to
the next higher multiple of $10 where such amount is a
multiple of $5 but not of $10 and to the nearest multiple of
$10 in any other case.''.
SEC. 3. EFFECTIVE DATE.
The amendments made by this Act shall apply with respect to
taxable years beginning after December 31, 2002.
Mr. DODD. Mr. President, I rise today with my colleague from Arizona,
Senator John McCain, to reintroduce legislation that we've sponsored in
the past, the ``Blind Empowerment Act of 2003.'' This legislation would
restore the 20-year link between blind people and senior citizens with
respect to the Social Security earnings limit. It will have a
tremendous impact on the lives of many blind people, helping them
become more self-sufficient and productive members of society.
Today there are nearly 1.1 million Americans who are blind, with
75,000 more becoming blind each year. With today's technology, blind
and visually-impaired individuals can do just about anything. Blind
people today are employed as farmers, lawyers, secretaries, nurses,
managers, childcare workers, social workers, teachers, librarians,
stockbrokers, accountants, and journalists, among many other things.
The Federal Government should do all within its power to facilitate and
encourage the blind and visually-impaired to enter the workforce. Many
public and private initiatives provide the technical advancement
necessary to educate and employ the blind at the same level as their
sighted peers. For example, the National Federation of the Blind, NFB,
has created an institute to utilize technological advancements for the
blind in an effort to promote employment of the blind throughout the
nation. The NFB helps employers provide adaptive technology,
consultation, and training so that they can better accommodate the
needs of blind and visually-impaired employees.
In 1996, Congress passed the Senior Citizens Freedom to Work Act,
which broke the longstanding linkage between the treatment of blind
people and seniors under Social Security. This allowed the earnings
limit to be raised for seniors, but not for the blind. As a result,
blind people do not have the opportunity to increase their earnings
without jeopardizing their Social Security benefits. In 2002, that
limit was at $14,800. If a blind individual earns more than that, his
or her Social Security benefits are not protected.
The purpose of the Senior Citizens Freedom to Work Act was to allow
seniors to continue contributing to society as productive workers while
still receiving social security benefits. Historically, the earnings
test treatment of seniors and blind people has been identical under
Title II of the Social Security Act. With this legislation, we must do
the same for the blind population of America as we have done for the
seniors. We must provide blind people the same opportunity to be
productive and contribute to their own stability. We must not
discourage these individuals from working.
The current earnings test provides a disincentive for the blind
population, many of whom are working age and capable of productive
work. Work provides one of the fundamental ways individuals express
their talents and allow them to make a contribution to society and to
their loved ones. Blind individuals face constant hurdles when it comes
to employment. Parents,
[[Page S4633]]
teachers, or counselors may tell them they can't do it. Employers
sometimes don't even give them the opportunity to try. But blind people
and others with severe visual impairments take great pride in being
able to work, just like the rest of us. They are likely to respond
favorably to an increase in the earnings test because they want to
work. We don't want to create yet another hurdle to employment for
blind individuals with the Social Security earnings test. By allowing
those with visual impairments to work more without penalty, we would
increase both their tax contribution and their purchasing power. By
doing so we would also bring additional funds into the Social Security
trust fund and the Federal Treasury.
I urge my colleagues to join me in sponsoring this important
legislation to restore the fair and equal treatment for the blind
citizens of America. The ``Blind Empowerment Act of 2003'' will provide
the blind population with the same freedom and opportunities as our
Nation's seniors and the rest of the citizens of this nation.
______
By Mr. BAUCUS (for himself, Mr. Daschle, Mr. Johnson, Mr.
Campbell, Mr. Bingaman, Mr. Inouye, and Mr. Akaka):
S. 751. A bill to amend part A of title IV of the Social Security Act
to reauthorize and improve the operation of temporary assistance to
needy families programs operated by Indian tribes, and for other
purposes; to the Committee on Finance.
Mr. BAUCUS. Mr. President, today, I am re-introducing the American
Indian Welfare Reform Act, an important step in improving the lives of
this country's Native Americans. I originally introduced this bill last
year and worked to include important elements of it in the welfare
reform reauthorization bill approved by the Finance Committee.
Unfortunately, we did not finish work on welfare reform
reauthorization. So I am again offering this bill, with some
improvements based on advice from tribes and other experts. I am glad
to be joined by Senators Daschle, Johnson, Campbell, Bingaman, Inouye,
and Akaka.
In 1996 we enacted a sweeping welfare reform law. It was a long past-
due fundamental change and ended a failed system for helping low-income
families in America. I was a strong supporter of that law. This year,
we continue to work to reauthorize it. As we in the Finance Committee
have reviewed the evidence I have been struck by how successful it has
been. The ranks of those dependent on welfare in this country has been
reduced by half in just five years. There is more to be done, of
course. Child poverty has declined but not by as much as the fall in
the welfare caseload, for example. I plan to work with my Finance
Committee colleague Senator Grassley on comprehensive legislation to
renew and improve the 1996 law.
One often overlooked important aspect of the 1996 law is that it
didn't just devolve authority to States--it also permitted Indian
tribes to operate their own welfare programs for the first time. The
new welfare program, Temporary Assistance for Needy Families, TANF, is
very flexible. Tribes can take advantage of that flexibility to design
culturally-appropriate programs to move people from welfare to work.
This is smart policy and is consistent with the important value of
tribal sovereignty. I support it.
My own State of Montana is home to several tribes and I have given
much thought to how we can build upon the provisions of the 1996
welfare law to help them and their members. Too often in Montana--and
elsewhere--poverty has an Indian face. The numbers are cold and hard.
According to the Census Bureau, 25.9 percent of American Indians live
in poverty, more than twice the national poverty rate. The average
household income for Indians in 2000 was only 75 percent of that of the
rest of Americans. This is simply not right. We must do better. Welfare
reform needs to work for everyone.
Luckily, the provisions of the 1996 law provide a good start. Now we
must build upon them. The legislation I introduce today, the product of
extensive dialogue and consultation, does that in several important
ways.
First, more than 30 tribes--including the Confederated Salish-
Kootenai and Fort Belknap tribes of Montana--have taken advantage of
the opportunity to operate their own TANF programs. This bill contains
provisions to help those tribes improve their programs. For example,
under current law, tribes operating TANF are not eligible for the TANF
high performance bonus or the TANF contingency fund while state TANF
programs are. This oversight is rectified by this bill.
Second, there are many tribes interested in operating TANF programs
who do not believe the current set-up allows them to do so. They want
to exercise their sovereignty and adapt their program to better fit the
needs of their people. We should help them do so. To that end, I
propose creating a new grant fund to improve tribal governmental
capacity. We have funded State administrative capacity for decades,
helping States buy computer systems and train workers. We should do the
same for tribal human services administration. Under this bill, a tribe
which wants to operate TANF but needs to upgrade its computers to do it
could receive the funding it needs--which will enable it to take over
TANF.
Third, there are some tribes not interested in running a TANF program
or a long time from being able to do it. Their low-income families will
continue to receive assistance from State programs. I have included
provisions to facilitate State-tribe dialogue in these cases so that
the state can better understand the unique circumstances of each Indian
reservation. There is also an important provision to allow States the
same flexibility in designing welfare-to-work programs on high
unemployment reservations that tribes gain when they operate TANF
programs. We must ensure all Indian families are able to get help when
they need it.
Finally, there is the all-important issue of economic development. A
General Accounting Office review of Census Bureau data found that 25 of
the 26 counties in the U.S. with a majority of American Indians had
poverty rates ``significantly'' higher than average. Welfare reform is
about moving people to work. On most of our Indian reservations there
is simply far too little work to be had. Like everyone else, Indians
want to work. We need to do better in giving them the opportunity.
This legislation provides tribes with an expanded authority to issue
bonds, which will encourage additional economic activity on
reservations, such as housing construction. This means more jobs, as
well as a better quality of life. It also includes grants to help
tribes improve their own economic development strategies. Tribes with
uniform commercial codes and effective micro-enterprise programs can
see more business activity on their lands. This bill helps tribes helps
themselves. We need to let Indians find their own way to prosperity,
not impose top-down strategies. But we must make sure they have the
tools to get there.
This is an important bill. It includes other key provisions. One is a
fine bill originally introduced by Senators Daschle and McCain to allow
tribes to receive direct Federal reimbursement for operating foster
care programs. Another provision funds research on tribal welfare
reform programs so we can learn what works as well as providing funds
for ``peer-learning'' so that tribes can learn from one another. I am a
strong supporter of welfare reform. We need to make sure it works for
everyone. This bill does that.
I ask unanimous consent that a summary of the legislation be printed
in the Record.
There being no objection, the additional material was ordered to be
printed in the Record, as follows:
Summary of the American Indian Welfare Reform Act
1. Findings
The Federal Government bears a unique trust responsibility
for American Indians. Despite this responsibility, Indians
remain remarkably impoverished. According to the Census
Bureau, 25.9 percent of American Indians live in poverty,
more than twice the national poverty rate. The average
household income for Indians in 2000 was only 75 percent of
that of the rest of Americans. In some states with
substantial Indian populations the welfare caseload has
become increasingly Indian because some Indians face
substantial barriers in moving from welfare to work. A
General Accounting Office review of Census Bureau data found
that 25 of the 26 counties in the U.S. with a majority of
American Indians had poverty rates ``significantly'' higher
than average. Further, many Indian tribes are located in
isolated rural areas, far from economic opportunity. Tribal
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Temporary Assistance for Needy Families, TANF, programs have
demonstrated remarkable success in moving Indians from
welfare to work. Tribal governments have not been afforded
equal opportunity to administer foster care and adoption
assistance programs. Welfare reform has not brought enough
change to Indian Country.
2. The Tribal TANF Improvement Fund
The 1996 welfare reform law permits tribes to opt to
operate their own Temporary Assistance for Needy Families,
TANF, programs. A new Tribal TANF Improvement Fund of $500
million, to be available for 5 years, would be created to
build upon these programs and allow more tribes to start
them. It would have four parts:
Tribal Capacity Grants. State governments have benefitted
from decades of federal investment in their administrative
capacity, particularly in their information management
systems. $185 million of the Fund would be reserved for
grants to improve tribal human services program
infrastructure, with a priority for management information
systems and training. Tribes applying to operate TANF would
be given priority. Tribes already operating TANF, applying to
operate IV-E foster care programs with direct federal
funding, and operating the new consolidated tribal job
training program would also be eligible for grants. HHS would
be required to assure that tribes of all sizes received
funding and to maximize the number of tribes which receive
funding. Tribes would be eligible for one grant per year.
Adjusted Tribal TANF Grants. Tribes which take over
operation of TANF often experience significant increases in
caseload as poor families apply for help for the first time
because they are more comfortable asking assistance from the
tribe or simply because they are more able to access
services. Yet tribal TANF allocations are based on estimates
of Indians served by state programs in 1994, which can
leave the tribe facing funding levels which are too low.
To better support families in tribal TANF programs, $140
million of the fund would be reserved for grants to tribal
TANF programs where the tribe can demonstrate it has a
significantly higher true caseload than originally
estimated. Tribes with cash assistance caseloads two years
after beginning operation of a TANF program which are 20
percent higher than originally estimated would be eligible
for additional funding. The funds would be allocated
proportionate to a tribe's size and service population as
well as the caseload increase, on the basis of a formula
to be determined by HHS in consultation, by region, with
tribes. The funding level would be $35 million per year,
from FY 2004-2007.
Tribal TANF MOE Incentive. A key factor in tribes being
able to operate TANF programs has been the willingness and
ability of states to contribute funding as part of the
broader state maintenance of effort, MOE, requirement. To
encourage states to do this, up to an additional $160 million
would be available for ``rebates'' of TANF funds to states
which provide MOE support to tribal TANF programs. For each
$1 in MOE funds provided, the federal government would
provide an additional 50 cents in TANF funding to the state.
If funding is insufficient, HHS would provide pro-rata
funding to ensure each state contributing MOE receives a
share of the incentive funds.
Technical Assistance. HHS would receive $15 million to
provide technical assistance to tribes. At least $5 million
of these funds would be reserved to support peer-learning
programs among tribal administrators and at least $5 million
would be reserved for grants to tribes to conduct feasibility
studies of their capacity to operate TANF.
III. Tribal TANF High Performance Bonus and Contingency Fund Access
There are separate sources of funding within TANF that
tribes do not have the ability to access. To better support
tribal TANF programs, 3 percent of the current TANF ``high
performance'' bonus--or $6 million/year--would be reserved
for distribution to tribal TANF programs. The criteria would
be determined by HHS through consultation with tribes, but
should involve effectiveness in moving TANF recipients into
employment and self-sufficiency. In addition, $50 million of
the $2 billion TANF Contingency fund would be reserved for
tribal TANF programs operating in situations of increased
economic hardship. The criteria for tribal access to the
Contingency Fund would also be determined by HHS through
consultation with the tribes, but would include a worsening
economic condition, loss of reservation employers, or a loss
of state match funding. In addition, current restrictions on
the use of ``carryover'' TANF funds would be eliminated,
permitting tribes to spend prior year TANF funds with just as
much flexibility as current year TANF funds.
IV. Economic Development
There are four elements in the bill to stimulate more
economic activity on economically-depressed reservations.
Expanded tribal authority to issue tax-exempt private
activity bonds. Currently, tribes have a limited authority to
issue private activity bonds for ``essential'' governmental
functions and for certain manufacturing-related purposes.
This provision would allow bonds to be used for residential
rental properties and qualified mortgage bonds, spurring
construction. In addition, tribes could allocate authority
for financing businesses that would qualify as enterprise
zone businesses if the reservation were a zone. All property
financed would have to be on the reservation of the issuing
tribal government and qualified tribal governments would have
to have an unemployment rate of at least 20 percent. Casinos
and certain other forms of businesses could not be financed
by the bonds. The authority would be for calendar years 2004-
2008, and up to $10 million total would be available for each
qualifying tribe.
Tribal Development Grants. A key part of tribal economic
development is the investment climate on the reservation.
Tribes with clear legal codes and which encourage micro-
enterprise activities are more likely to generate economic
growth. To facilitate this, the Administration for Native
Americans within HHS would receive $50 million to distribute
in grants to tribes, tribal organizations and non-profit
organizations to provide technical assistance to tribes in
the areas of: Development and improvement of uniform
commercial codes; creating or expanding small business or
micro-enterprise programs; development and improvement of
tort liability codes; creating or expanding tribal marketing
efforts; for-profit collaborative business networks; and
telecommunications.
Job Access and Reverse Commute Grants. A lack of
transportation often hinders tribal economic development. To
help address this need, tribes would be made directly
eligible to receive Job Access and Reverse Commute grants
from the federal Department of Transportation, which would
permit tribes to pursue innovative TANF strategies around
transportation. A tribal set-aside of 3 percent would be
established in the program. Matching funds could be provided
by tribes on an in-kind basis or with other federal funds,
such as TANF.
Transportation Grants. A lack of transportation also often
hinders individual Indians from moving from welfare-to-work.
This need is particularly acute given the remote nature of
many reservations. To assist Indians in acquiring reliable
automobiles, a $10 million per year grant program would be
created, beginning in FY 2004. Tribes would be given priority
in receiving grants to create car ownership assistance
programs. This program is based on a proposal originally put
forward by Senator Jeffords.
V. Tribal Job Training Programs
There are currently two tribal job training programs, the
NEW program and Welfare-to-Work grantees. To simplify and
better co-ordinate programs, a new Tribal Employment Services
Program, TESP, would be created in the Department of Labor by
combining the two programs. It would be funded at $37 million
annually and distributed to current Tribal NEW and Welfare-
to-Work grantees as well as new applicants. TESP funds could
be used for employment training efforts for those on, or at-
risk of being on, public assistance. Tribes could also use
the funds to assist non-custodial parents of children on, or
at risk of being on, public assistance. To encourage state-
tribal partnerships, TANF funds transferred to tribal TESP
programs would be governed by TESP rules, not TANF rules. The
bill also clarifies that the single plan, single budget, and
single reporting requirements of PL 102-477 should be
respected.
VI. Tribal Child Care
The availability and quality of child care is basic to the
success of welfare reform. Tribal welfare reform efforts are
no exception. The tribal set-aside within the Child Care and
Development Block Grant, CCDBG, would be increased to 5
percent to better support tribal welfare reform programs. HHS
would be required to go through a negotiated rulemaking
process, in consultation with tribal representatives, to
determine an equitable allocation of the base funding among
tribes. In addition, each tribe receiving CCDBG funding would
develop their own health and safety standards, subject to
approval of HHS. Tribal child care programs would have
additional authority to use funds for construction and
renovation.
VII. ``Equitable Access''
Many American Indians are--and will continue to be--served
by state TANF programs. States will be required to consult
with tribes within their borders on TANF state plans. Under
current law, states are required to provide ``equitable
access'' to services for Indians. State and tribal TANF plans
would be required to describe how ``equitable access'' is
provided to encourage better State-tribal co-operation. HHS
would also be required to include in the annual TANF report
to Congress state-specific information on the demographics
and caseload characteristics of Indians served by state TANF
programs.
In addition, HHS would be required to convene a new
advisory committee on the status of non-reservation Indians.
Too little is known about how these Indians are faring. The
committee is to make recommendations for ensuring these
Indians receive appropriate assistance. The committee would
include federal, state, and tribal representatives as well as
representatives of Indians not residing on reservations. A
majority of those on the committee would be representatives
of Indians not residing on reservations. GAO would also be
required to conduct a study of the demographics of Indians
not residing on reservations, including economic and health
information, as well as reviewing their access to public
benefits.
VIII. ``Joblessness''
As acknowledged by the 1996 welfare law, the federal time
limit on assistance is not an appropriate policy on Indian
reservations with severe unemployment. This provision
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would be adjusted so that the time limit will not apply
during months where the joblessness is above 20 percent,
provided that TANF recipients are not in sanction status. In
addition, in these areas of high joblessness, states would
have flexibility to define work activities required for TANF
participants, provided the recipient is participating in
activities in accordance with an Individual Responsibility
Plan and the state has included information in its state plan
describing its policies in Indian Country areas of high
joblessness, Tribal TANF programs already have flexibility in
work activity definition.
IX. Alaska provisions
The 1996 limits the ability of tribes in Alaska to design
and operate programs. These provisions involving differential
treatment for Alaskan Natives, such as those requiring tribal
TANF programs to be ``comparable'' to the state program,
would be removed.
X. Tribal Foster Care Programs
Due to a long-standing oversight, tribes are not allowed to
receive direct federal reimbursement when they operate foster
care programs to take care of abused and neglected children.
The provisions of S. 331, the Daschle-McCain legislation to
rectify this oversight and allow tribes to receive direct
federal funding to operate foster care programs, are
included.
XI. Food Stamps, Medicaid, and SCHIP
Up to 10 tribes operating TANF programs could receive
waivers to perform eligibility determinations and/or operate
Food Stamps, Medicaid, and the State Children's Health
Insurance Program, SCHIP, as well. Matching requirements
could be waived but not program integrity requirements. In
addition, the programs would remain consistent with state
rules. However, tribes would be able to demonstrate their
ability to operate these programs and to serve low-income
Indian families better.
XII. Child Support Enforcement
HHS would be required to promulgate final regulations
concerning tribal child support programs within one year of
enactment. In addition, HHS would be required to submit a
report to Congress on the most appropriate ways of including
tribal programs in the methodology of determining child
support incentive payments.
XIII. ``Break the Cycle'' Demonstration Program
Inter-generational poverty is a frequent occurrence on
Indian reservations. In an effort to reach the children of
TANF recipients, a ``Break the Cycle'' demonstration program
would be created. Up to 10 tribes would receive grants to
develop programs aimed at ensuring children of TANF
recipients complete high school or receive G.E.D.s. The
tribes would submit proposals involving mentoring, tutoring,
altering TANF rules, or teen pregnancy prevention towards
this goal, and could collaborate with States. It would be
authorized at $20 million per year for FY 2005-2008.
XIV. Social Services Block Grant (SSBG)
SSBG is an important source of flexible funding to address
the needs of the elderly, disabled, and low-income families.
But tribes do not currently receive SSBG funds. Under this
bill, when funding for SSBG exceeds $2.4 billion in a year,
$10 million plus 2 percent of all funds beyond $2.4 billion
is reserved for tribes. All tribes operating social service
programs would be eligible for a share. HHS is required to
develop a distribution formula through a consultation process
with the tribes.
XV. Research
While there have been a handful of important initial
studies of welfare reform in Indian Country, much remains
unknown about how it has impacted Native Americans.
Therefore, $2 million would be provided to HHS for research
on tribal welfare programs and efforts to reduce poverty
among American Indians in general. These funds could also be
used to assist tribes in collecting data. To expend the
funds, HHS would first have to issue a planned course of
research and consultation with the tribes. Research funding
applicants which propose to include tribal governments and
tribal colleges in their work would have priority.
______
By Mr. BINGAMAN (for himself and Mrs. Hutchison):
S. 752. A bill to amend the Internal Revenue Code of 1986 to treat
distributions from publicly traded partnerships as qualifying income of
regulated investment companies, and for other purposes; to the
Committee on Finance.
Mr. BINGAMAN. Mr. President, I rise today with my colleague from
Texas, Senator Hutchison to introduce legislation that will allow
publicly traded partnerships to sell their stock to mutual funds so
they can raise sufficient capital for new investments in pipelines and
infrastructure. Because of current restrictions, publicly traded
partnerships are hindered in their ability to sell their equity to
mutual funds even though their equity is sold on public exchanges. The
overwhelming majority of these partnerships are energy-related
companies that need the ability to raise capital from mutual funds to
build pipelines and other facilities. This legislation would be a
strong shot in the arm for the economy as it encourages companies to
begin new projects that are currently on hold for lack of capital. It
also provides us with the ability to expand our pipeline network to
meet our current demands for natural gas. I look forward to working
with my colleagues to advance this important legislation.
Mrs. HUTCHISON. Mr. President, I am pleased to introduce a bill with
Senator Bingaman that takes an important step toward modernizing the
Internal Revenue Code.
Decades ago, investment companies which manage mutual funds were
limited in the amount of income they could receive from investments in
partnerships.
At the time, this restriction was established to address legitimate
concerns and protect the interests of investors. Ownership interests in
partnerships can be illiquid, so it is difficult to get one's money out
of the investment. Partnerships are also not required to be transparent
in their financial statements, so it could be difficult for investors
to accurately assess a business
However, the world has changed. Some partnerships have been able to
go public and offer shares on the stock markets, so the problem of
liquidity is solved. By going public, they must meet much higher
standards of financial transparency, including regularly publishing
audited financial statements for investors. Currently, 50 publicly
traded partnerships trade on major U.S. stock exchanges; 14 of these
companies are headquartered in my home State, Texas.
Unfortunately, tax laws have not reflected this change in the
business and financial worlds. Mutual funds are still restricted in how
much they can invest in any partnership, including those that are
publicly traded. This significantly impedes the ability of these
companies to raise capital. It limits their ability to grow and create
jobs.
Publicly traded partnerships play an important role in the economy.
About half are in the energy sector, actively involved in building and
operating infrastructure to gather, process and transport oil and
natural gas. These partnerships also include timber and real estate
companies. It is clear we need a healthy energy sector to ensure the
availability of oil and gas at reasonable prices.
The bill Senator Bingaman and I introduce today will lead to a
dramatic increase in the flow of capital to these companies. Mutual
funds, which often purchase a majority of equity offerings, will be
able to participate in stock offerings from publicly traded
partnerships. This will expand the investor base and lower the cost of
capital, ultimately helping to lower energy prices.
Our bill will also provide millions of investors an opportunity,
through their mutual funds, to participate in another investment
opportunity if their professional mutual fund managers believe it is an
attractive investment.
It is wrong for the Federal Government to use the tax code to make
decisions for investors. The bill we are introducing will modernize our
tax laws so families can make their own financial planning decisions.
This legislation will also provide an important source of capital for
key areas of the economy. I hope my colleagues will support this long
overdue improvement.
______
By Mr. HATCH (for himself, Mr. Breaux, Mr. Baucus, and Mr.
Grassley):
S. 753. A bill to amend the internal Revenue Code of 1986 to provide
for the modernization of the United States Tax Court, and for other
purposes; to the Committee on Finance.
Mr. HATCH. Mr. President, I rise today to introduce the Tax Court
Modernization Act. I am joined in this legislation by my colleague
Senator Breaux, and by the Chairman and Ranking Democrat of the Finance
Committee, Senator Grassley and Senator Baucus.
The United States Tax Court plays an important role in our tax
system. However, it has been years since Congress has taken a good hard
look at the Tax Court. This bipartisan piece of legislation will
improve this Court in a number of ways, and I would like to take a
moment to summarize some of its provisions.
First, the TCMA would make minor changes in the Tax Court's
jurisdiction. These are small changes that will
[[Page S4636]]
have a big impact on the Court's efficiency. For example, the bill
would allow the Tax Court to hire employees on its own, just as other
courts do. Currently, the Tax Court is forced to hire through the
Executive Branch's Office of Personnel Management, entangling the
executive power with the judicial power. Restoring the constitutional
separation of powers in the hiring process will increase the
independence of the Tax Court.
Second, the TCMA would improve the way that Tax Court judges receive
retirement benefits and other non-salary benefits. I believe that Tax
Court judges should be treated the same way that bankruptcy, Court of
Federal Claims, and Article III judges are treated when it comes to
fringe benefits.
Tax Court judges are often not provided with the same benefits as
similarly appointed Article I and Article III judges. For example,
Congress allows Article III, bankruptcy, and Court of Federal Claims
judges to participate in the Thrift Savings Plan in addition to the
Civil Service Retirement System, while Tax Court judges are ineligible
to participate in this program. These disparities in the treatment of
our Tax Court judges affect the Court's ability to attract and retain
seasoned judges, as well as talented employees.
I have spent many years observing the Federal judiciary. I have spent
many years trying to improve the Judicial Branch of our government and
to make it the very finest court system the world has ever known. I
look forward to working with my colleagues on the Senate Finance
Committee on this important piece of legislation. I urge my colleagues,
both on the Finance Committee and in the Senate as a whole, to support
this legislation.
Mr. BAUCUS. Mr. President, I rise today to support the Tax Court
Modernization Act. I am pleased to be an original cosponsor of this
important legislation.
In 1969, Congress elevated the U.S. Tax Court as a Federal court of
record under Article I of the Constitution of the United States.
Congress created the Tax Court to provide a judicial forum in which
affected persons could dispute tax deficiencies determined by the
Commissioner of the Internal Revenue Service prior to payment of the
disputed amounts. That means that the Tax Court's jurisdictional
requirements are, in part, a recognition that lower and middle income
taxpayers cannot necessarily pay the tax deficiency before taking their
dispute to court.
Congress also closely linked the legislation governing the Tax Court
with the laws governing the Article III District Courts. Unfortunately,
the Congress did not include the Tax Court in the changes made for
Article III courts.
This legislation is designed to restore parity between the Tax Court
and Article III courts, and to modernize their personnel and pension
systems.
I also want to thank Senators Breaux and Hatch for their efforts in
moving this legislation forward. The Finance Committee intends to
markup the Tax Court Modernization Act tomorrow. It is my hope that the
Committee favorably reports the legislation. I also hope that, soon
after Committee action, Majority Leader Frist and Minority Leader
Daschle bring the Tax Court Modernization Act to the floor for swift
passage.
______
By Mr. BAUCUS (for himself, Mr. Grassley, Mr. Hatch, Mr. Thomas,
Mrs. Lincoln, and Mr. Rockfeller):
S. 755. A bill to amend the Internal Revenue Code of 1986 to provide
a uniform definition of child, and for other purposes; to the Committee
on Finance.
Mr. BAUCUS. Mr. President, today Senator Grassley and I are taking a
significant step forward in our efforts to simplify the tax code.
Today, we are introducing an important simplification legislation--the
Uniform Definition of Child Act.
This legislation is based on the support of many for simplification
in this area of the tax law. The President's FY 2004 budget, which was
released on April 15, 2002, includes a simplification proposal to
provide a uniform definition of a qualifying child. This is the first
in a series of Department of Treasury ``white papers'' on
simplification.
The concept of a uniform definition of qualifying child also enjoys
support from the American Bar Association, the American Institute of
CPAs, the Tax Executives Institute, the Internal Revenue Service's
Taxpayer Advocate, and staff of the Joint Committee on Taxation.
Under current law, the complexity in this area is daunting. There are
five commonly used provisions that provide benefits to taxpayers with
children: the dependency exemption, the child credit, the earned income
credit, the dependent care credit, and head of household filing status.
Each of the five provisions uses variations of four principal
criteria to determine whether a taxpayer qualifies for applicable tax
benefits with respect to a particular child: age of the child,
relationship of the child to the taxpayer, residency of the child with
the taxpayer, and the amount of financial support provided the child by
the taxpayer.
Thus, a taxpayer is required to apply different definitions with
respect to the same child when determining eligibility for these
provisions. A taxpayer who qualifies with respect to a child for one
provision does not necessarily qualify for another. As a result,
publications, forms, instructions and schedules that are applicable to
child related provisions number about 200 pages for the preparation of
an individual income tax return.
A tremendous number of families are impacted by these Code
provisions. For example, 44 million taxpayers claimed the dependency
exemption in the 2001 tax year. The IRS also indicates that a
significant portion of the issued math error notices are attributable
to these five provisions of the Internal Revenue Code. In 1999, for
example, 44 percent of the 7.6 million math error notices were
attributable to these provisions--40 percent of the total math error
notices were attributable the dependency exemption, the child tax
credit and the earned income tax credit alone.
The legislation reduces complexity through reconciliation of the
varying child definitions into a single definition for a ``qualifying
child.'' The uniform child definition generally establishes eligibility
for all five tax benefits if the child meets the age requirements
described below, a relationship requirement, and a residency
requirement--i.e., the child has the same principal place of abode as
the taxpayer for more than one-half the taxable year.
The residency requirement is an important departure from current law
in which the child tax benefits frequently rely upon financial support
tests which impose significantly higher administrative burdens in the
form of additional record-keeping not otherwise required under the tax
law. The legislation also preserves the tax rights of children who
provide more than half of their own support by excluding those children
from the uniform definition of a qualifying child.
The underlying policy objectives of the present law provisions are
retained. For example, the legislation retains underlying policy by not
adjusting the ages of qualification--i.e., under age for the dependent
care credit, under age 17 for the child tax credit, and under age 19--
or age 24 if a full-time student for the dependency exemption, the
earned income tax credit, and head of household filing status.
The legislation applies a single relationship test to the varying
Code sections. Significantly, the proposal retains current law as an
alternative to the extent that a person does not meet the revised
uniform child definition--e.g., an elderly parent can still be claimed
for purposes of the dependency exemption.
Under the Uniform Definition of Child Act, there will be instances in
which multiple taxpayers qualify with respect to a given child. To
address this issue, the proposal extends the present law earned income
credit tie-breaker rule to the other benefits for multiple eligible
claimants. That rule awards the tax benefit (i) to a parent over a non-
parent, (ii) to the parent with longer residency or the highest AGI if
residency is not determinative between parents, and (iii) to the
taxpayer with the highest AGI if all claimants are non-parents.
Finally, the legislation continues to allow divorced or separated
spouses to assign the dependency exemption and the child tax credit to
non-custodial parents provided that certain support and residency tests
are met.
[[Page S4637]]
Simplification of the tax code should be more than just rhetoric. It
is time for us to put legislation behind our words. We intend to
continue to look at other areas of the tax code in need of
simplification.
Senator Grassley and I also want to thank our Finance Committee
colleagues, Senators Hatch, Thomas and Lincoln, for their support of
the Uniform Definition of Child Act of 2003. Simplification of the tax
laws for the families of our nation is not partisan, it is not
political, it is simply common sense.
Mr. President, I ask unanimous consent that the Uniform Definition of
Child Act of 2003 be printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 755
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 ``Uniform Definition of Child
Act of 2003''.
SEC. 2. UNIFORM DEFINITION OF CHILD, ETC.
Section 152 of the Internal Revenue Code of 1986 is amended
to read as follows:
``SEC. 152. DEPENDENT DEFINED.
``(a) In General.--For purposes of this subtitle, the term
`dependent' means--
``(1) a qualifying child, or
``(2) a qualifying relative.
``(b) Exceptions.--For purposes of this section--
``(1) Dependents ineligible.--If an individual is a
dependent of a taxpayer for any taxable year of such taxpayer
beginning in a calendar year, such individual shall be
treated as having no dependents for any taxable year of such
individual beginning in such calendar year.
``(2) Married dependents.--An individual shall not be
treated as a dependent of a taxpayer under subsection (a) if
such individual has made a joint return with the individual's
spouse under section 6013 for the taxable year beginning in
the calendar year in which the taxable year of the taxpayer
begins.
``(3) Citizens or nationals of other countries.--
``(A) In general.--The term `dependent' does not include an
individual who is not a citizen or national of the United
States unless such individual is a resident of the United
States or a country contiguous to the United States.
``(B) Exception for adopted child.--Subparagraph (A) shall
not exclude any child of a taxpayer (within the meaning of
subsection (f)(1)(B)) from the definition of `dependent' if--
``(i) for the taxable year of the taxpayer, the child's
principal place of abode is the home of the taxpayer, and
``(ii) the taxpayer is a citizen or national of the United
States.
``(c) Qualifying Child.--For purposes of this section--
``(1) In general.--The term `qualifying child' means, with
respect to any taxpayer for any taxable year, an individual--
``(A) who bears a relationship to the taxpayer described in
paragraph (2),
``(B) who has the same principal place of abode as the
taxpayer for more than one-half of such taxable year,
``(C) who meets the age requirements of paragraph (3), and
``(D) who has not provided over one-half of such
individual's own support for the calendar year in which the
taxable year of the taxpayer begins.
``(2) Relationship test.--For purposes of paragraph (1)(A),
an individual bears a relationship to the taxpayer described
in this paragraph if such individual is--
``(A) a child of the taxpayer or a descendant of such a
child, or
``(B) a brother, sister, stepbrother, or stepsister of the
taxpayer or a descendant of any such relative.
``(3) Age requirements.--
``(A) In general.--For purposes of paragraph (1)(C), an
individual meets the requirements of this paragraph if such
individual--
``(i) has not attained the age of 19 as of the close of the
calendar year in which the taxable year of the taxpayer
begins, or
``(ii) is a student who has not attained the age of 24 as
of the close of such calendar year.
``(B) Special rule for disabled.--In the case of an
individual who is permanently and totally disabled (as
defined in section 22(e)(3)) at any time during such calendar
year, the requirements of subparagraph (A) shall be treated
as met with respect to such individual.
``(4) Special rule relating to 2 or more claiming
qualifying child.--
``(A) In general.--Except as provided in subparagraph (B)
and subsection (e), if (but for this paragraph) an individual
may be claimed as a qualifying child by 2 or more taxpayers
for a taxable year beginning in the same calendar year, such
individual shall be treated as the qualifying child of the
taxpayer who is--
``(i) a parent of the individual, or
``(ii) if clause (i) does not apply, the taxpayer with the
highest adjusted gross income for such taxable year.
``(B) More than 1 parent claiming qualifying child.--If the
parents claiming any qualifying child do not file a joint
return together, such child shall be treated as the
qualifying child of--
``(i) the parent with whom the child resided for the
longest period of time during the taxable year, or
``(ii) if the child resides with both parents for the same
amount of time during such taxable year, the parent with the
highest adjusted gross income.
``(d) Qualifying Relative.--For purposes of this section--
``(1) In general.--The term `qualifying relative' means,
with respect to any taxpayer for any taxable year, an
individual--
``(A) who bears a relationship to the taxpayer described in
paragraph (2),
``(B) whose gross income for the calendar year in which
such taxable year begins is less than the exemption amount
(as defined in section 151(d)),
``(C) with respect to whom the taxpayer provides over one-
half of the individual's support for the calendar year in
which such taxable year begins, and
``(D) who is not a qualifying child of such taxpayer or of
any other taxpayer for any taxable year beginning in the
calendar year in which such taxable year begins.
``(2) Relationship.--For purposes of paragraph (1)(A), an
individual bears a relationship to the taxpayer described in
this paragraph if the individual is any of the following with
respect to the taxpayer:
``(A) A child or a descendant of a child.
``(B) A brother, sister, stepbrother, or stepsister.
``(C) The father or mother, or an ancestor of either.
``(D) A stepfather or stepmother.
``(E) A son or daughter of a brother or sister of the
taxpayer.
``(F) A brother or sister of the father or mother of the
taxpayer.
``(G) A son-in-law, daughter-in-law, father-in-law, mother-
in-law, brother-in-law, or sister-in-law.
``(H) An individual (other than an individual who at any
time during the taxable year was the spouse, determined
without regard to section 7703, of the taxpayer) who, for the
taxable year of the taxpayer, has as such individual's
principal place of abode the home of the taxpayer and is a
member of the taxpayer's household.
``(3) Special rule relating to multiple support
agreements.--For purposes of paragraph (1)(C), over one-half
of the support of an individual for a calendar year shall be
treated as received from the taxpayer if--
``(A) no one person contributed over one-half of such
support,
``(B) over one-half of such support was received from 2 or
more persons each of whom, but for the fact that any such
person alone did not contribute over one-half of such
support, would have been entitled to claim such individual as
a dependent for a taxable year beginning in such calendar
year,
``(C) the taxpayer contributed over 10 percent of such
support, and
``(D) each person described in subparagraph (B) (other than
the taxpayer) who contributed over 10 percent of such support
files a written declaration (in such manner and form as the
Secretary may by regulations prescribe) that such person will
not claim such individual as a dependent for any taxable year
beginning in such calendar year.
``(4) Special rule relating to income of handicapped
dependents.--
``(A) In general.--For purposes of paragraph (1)(B), the
gross income of an individual who is permanently and totally
disabled (as defined in section 22(e)(3)) at any time during
the taxable year shall not include income attributable to
services performed by the individual at a sheltered workshop
if--
``(i) the availability of medical care at such workshop is
the principal reason for the individual's presence there, and
``(ii) the income arises solely from activities at such
workshop which are incident to such medical care.
``(B) Sheltered workshop defined.--For purposes of
subparagraph (A), the term `sheltered workshop' means a
school--
``(i) which provides special instruction or training
designed to alleviate the disability of the individual, and
``(ii) which is operated by an organization described in
section 501(c)(3) and exempt from tax under section 501(a),
or by a State, a possession of the United States, any
political subdivision of any of the foregoing, the United
States, or the District of Columbia.
``(5) Special support test in case of students.--For
purposes of paragraph (1)(C), in the case of an individual
who is--
``(A) a child of the taxpayer, and
``(B) a student,
amounts received as scholarships for study at an educational
organization described in section 170(b)(1)(A)(ii) shall not
be taken into account in determining whether such individual
received more than one-half of such individual's support from
the taxpayer.
``(6) Special rules for support.--For purposes of this
subsection--
``(A) payments to a spouse which are includible in the
gross income of such spouse under section 71 or 682 shall not
be treated as a payment by the payor spouse for the support
of any dependent,
``(B) amounts expended for the support of a child or
children shall be treated as received from the noncustodial
parent (as defined in subsection (e)(3)(B)) to the extent
that such parent provided amounts for such support, and
[[Page S4638]]
``(C) in the case of the remarriage of a parent, support of
a child received from the parent's spouse shall be treated as
received from the parent.
``(e) Special Rule for Divorced Parents.--
``(1) In general.--Notwithstanding subsection (c)(4) or
(d)(1)(C), if--
``(A) a child receives over one-half of the child's support
during the calendar year from the child's parents--
``(i) who are divorced or legally separated under a decree
of divorce or separate maintenance,
``(ii) who are separated under a written separation
agreement, or
``(iii) who live apart at all times during the last 6
months of the calendar year, and
``(B) such child is in the custody of 1 or both of the
child's parents for more than \1/2\ of the calendar year,
such child shall be treated as being the qualifying child or
qualifying relative of the noncustodial parent for a calendar
year if the requirements described in paragraph (2) are met.
``(2) Requirements.--For purposes of paragraph (1), the
requirements described in this paragraph are met if--
``(A) a decree of divorce or separate maintenance or
written agreement between the parents applicable to the
taxable year beginning in such calendar year provides that--
``(i) the noncustodial parent shall be entitled to any
deduction allowable under section 151 for such child, or
``(ii) the custodial parent will sign a written declaration
that such parent will not claim such child as a dependent for
such taxable year, and
``(B) in the case of such an agreement executed before
January 1, 1985, the noncustodial parent provides at least
$600 for the support of such child during such calendar year.
``(3) Custodial parent and noncustodial parent.--For
purposes of this subsection--
``(A) Custodial parent.--The term `custodial parent' means
the parent with whom a child shared the same principal place
of abode for the greater portion of the calendar year.
``(B) Noncustodial parent.--The term `noncustodial parent'
means the parent who is not the custodial parent.
``(4) Exception for multiple-support agreements.--This
subsection shall not apply in any case where over one-half of
the support of the child is treated as having been received
from a taxpayer under the provision of subsection (d)(3).
``(f) Other Definitions and Rules.--For purposes of this
section--
``(1) Child defined.--
``(A) In general.--The term `child' means an individual who
is--
``(i) a son, daughter, stepson, or stepdaughter of the
taxpayer, or
``(ii) an eligible foster child of the taxpayer.
``(B) Adopted child.--In determining whether any of the
relationships specified in subparagraph (A)(i) or paragraph
(4) exists, a legally adopted individual of the taxpayer, or
an individual who is placed with the taxpayer by an
authorized placement agency for adoption by the taxpayer,
shall be treated as a child of such individual by blood.
``(C) Eligible foster child.--For purposes of subparagraph
(A)(ii), the term `eligible foster child' means an individual
who is placed with the taxpayer by an authorized placement
agency or by judgment, decree, or other order of any court of
competent jurisdiction.
``(2) Student defined.--The term `student' means an
individual who during each of 5 calendar months during the
calendar year in which the taxable year of the taxpayer
begins--
``(A) is a full-time student at an educational organization
described in section 170(b)(1)(A)(ii), or
``(B) is pursuing a full-time course of institutional on-
farm training under the supervision of an accredited agent of
an educational organization described in section
170(b)(1)(A)(ii) or of a State or political subdivision of a
State.
``(3) Place of abode.--An individual shall not be treated
as having the same principal place of abode of the taxpayer
if at any time during the taxable year of the taxpayer the
relationship between the individual and the taxpayer is in
violation of local law.
``(4) Brother and sister.--The terms `brother' and `sister'
include a brother or sister by the half blood.
``(5) Treatment of missing children.--
``(A) In general.--Solely for the purposes referred to in
subparagraph (B), a child of the taxpayer--
``(i) who is presumed by law enforcement authorities to
have been kidnapped by someone who is not a member of the
family of such child or the taxpayer, and
``(ii) who had, for the taxable year in which the
kidnapping occurred, the same principal place of abode as the
taxpayer for more than one-half of the portion of such year
before the date of the kidnapping,
shall be treated as meeting the requirement of subsection
(c)(1)(B) with respect to a taxpayer for all taxable years
ending during the period that the individual is kidnapped.
``(B) Purposes.--Subparagraph (A) shall apply solely for
purposes of determining--
``(i) the deduction under section 151(c),
``(ii) the credit under section 24 (relating to child tax
credit),
``(iii) whether an individual is a surviving spouse or a
head of a household (as such terms are defined in section 2),
and
``(iv) the earned income credit under section 32.
``(C) Comparable treatment of certain qualifying
relatives.--For purposes of this section, a child of the
taxpayer--
``(i) who is presumed by law enforcement authorities to
have been kidnapped by someone who is not a member of the
family of such child or the taxpayer, and
``(ii) who was (without regard to this paragraph) a
qualifying relative of the taxpayer for the portion of the
taxable year before the date of the kidnapping,
shall be treated as a qualifying relative of the taxpayer for
all taxable years ending during the period that the child is
kidnapped.
``(D) Termination of treatment.--Subparagraphs (A) and (C)
shall cease to apply as of the first taxable year of the
taxpayer beginning after the calendar year in which there is
a determination that the child is dead (or, if earlier, in
which the child would have attained age 18).
``(6) Cross references.--
``For provision treating child as dependent of both parents for
purposes of certain provisions, see sections 105(b), 132(h)(2)(B), and
213(d)(5).''.
SEC. 3. MODIFICATIONS OF DEFINITION OF HEAD OF HOUSEHOLD.
(a) Head of Household.--Clause (i) of section 2(b)(1)(A) of
the Internal Revenue Code of 1986 is amended to read as
follows:
``(i) a qualifying child of the individual (as defined in
section 152(c), determined without regard to section 152(e)),
but not if such child--
``(I) is married at the close of the taxpayer's taxable
year, and
``(II) is not a dependent of such individual by reason of
section 152(b)(2) or 152(b)3), or both, or''.
(b) Conforming Amendments.--
(1) Section 2(b)(2) of the Internal Revenue Code of 1986 is
amended by striking subparagraph (A) and by redesignating
subparagraphs (B), (C), and (D) as subparagraphs (A), (B),
and (C), respectively.
(2) Clauses (i) and (ii) of section 2(b)(3)(B) of such Code
are amended to read as follows:
``(i) subparagraph (H) of section 152(d)(2), or
``(ii) paragraph (3) of section 152(d).''.
SEC. 4. MODIFICATIONS OF DEPENDENT CARE CREDIT.
(a) In General.--Section 21(a)(1) of the Internal Revenue
Code of 1986 is amended by striking ``In the case of an
individual who maintains a household which includes as a
member one or more qualifying individuals (as defined in
subsection (b)(1))'' and inserting ``In the case of an
individual for which there are 1 or more qualifying
individuals (as defined in subsection (b)(1)) with respect to
such individual''.
(b) Qualifying Individual.--Paragraph (1) of section 21(b)
of the Internal Revenue Code of 1986 is amended to read as
follows:
``(1) Qualifying individual.--The term `qualifying
individual' means--
``(A) a dependent of the taxpayer (as defined in section
152(a)(1)) who has not attained age 13,
``(B) a dependent of the taxpayer who is physically or
mentally incapable of caring for himself or herself and who
has the same principal place of abode as the taxpayer for
more than one-half of such taxable year, or
``(C) the spouse of the taxpayer, if the spouse is
physically or mentally incapable of caring for himself or
herself and who has the same principal place of abode as the
taxpayer for more than one-half of such taxable year.''.
(c) Conforming Amendment.--Paragraph (1) of section 21(e)
of the Internal Revenue Code of 1986 is amended to read as
follows:
``(1) Place of abode.--An individual shall not be treated
as having the same principal place of abode of the taxpayer
if at any time during the taxable year of the taxpayer the
relationship between the individual and the taxpayer is in
violation of local law.
SEC. 5. MODIFICATIONS OF CHILD TAX CREDIT.
(a) In General.--Paragraph (1) of section 24(c) of the
Internal Revenue Code of 1986 is amended to read as follows:
``(1) In general.--The term `qualifying child' means a
qualifying child of the taxpayer (as defined in section
152(c)) who has not attained age 17.''.
(b) Conforming Amendment.--Section 24(c)(2) of the Internal
Revenue Code of 1986 is amended by striking ``the first
sentence of section 152(b)(3)'' and inserting ``subparagraph
(A) of section 152(b)(3)''.
SEC. 6. MODIFICATIONS OF EARNED INCOME CREDIT.
(a) Qualifying Child.--Paragraph (3) of section 32(c) of
the Internal Revenue Code of 1986 is amended to read as
follows:
``(3) Qualifying child.--
``(A) In general.--The term `qualifying child' means a
qualifying child of the taxpayer (as defined in section
152(c), determined without regard to paragraph (1)(D) thereof
and section 152(e)).
``(B) Married individual.--The term `qualifying child'
shall not include an individual who is married as of the
close of the taxpayer's taxable year unless the taxpayer is
entitled to a deduction under section 151 for such taxable
year with respect to such individual (or would be so entitled
but for section 152(e)).
``(C) Place of abode.--For purposes of subparagraph (A),
the requirements of section 152(c)(1)(B) shall be met only if
the principal place of abode is in the United States.
[[Page S4639]]
``(D) Identification requirements.--
``(i) In general.--A qualifying child shall not be taken
into account under subsection (b) unless the taxpayer
includes the name, age, and TIN of the qualifying child on
the return of tax for the taxable year.
``(ii) Other methods.--The Secretary may prescribe other
methods for providing the information described in clause
(i).''.
(b) Conforming Amendments.--
(1) Section 32(c)(1) of the Internal Revenue Code of 1986
is amended by striking subparagraph (C) and by redesignating
subparagraphs (D), (E), (F), and (G) as subparagraphs (C),
(D), (E), and (F), respectively.
(2) Section 32(c)(4) of such Code is amended by striking
``(3)(E)'' and inserting ``(3)(C)''.
(3) Section 32(m) of such Code is amended by striking
``subsections (c)(1)(F)'' and inserting ``subsections
(c)(1)(E)''.
SEC. 7. MODIFICATIONS OF DEDUCTION FOR PERSONAL EXEMPTION FOR
DEPENDENTS.
Subsection (c) of section 151 of the Internal Revenue Code
of 1986 is amended to read as follows:
``(c) Additional Exemption for Dependents.--An exemption of
the exemption amount for each individual who is a dependent
(as defined in section 152) of the taxpayer for the taxable
year.''
SEC. 8. TECHNICAL AND CONFORMING AMENDMENTS.
(1) Section 21(e)(5) of the Internal Revenue Code of 1986
is amended--
(A) by striking ``paragraph (2) or (4) of'' in subparagraph
(A), and
(B) by striking ``within the meaning of section 152(e)(1)''
and inserting ``as defined in section 152(e)(3)(A)''.
(2) Section 21(e)(6)(B) of such Code is amended by striking
``section 151(c)(3)'' and inserting ``section 152(f)(1)''.
(3) Section 25B(c)(2)(B) of such Code is amended by
striking ``151(c)(4)'' and inserting ``152(f)(2)''.
(4)(A) Subparagraphs (A) and (B) of section 51(i)(1) of
such Code are each amended by striking ``paragraphs (1)
through (8) of section 152(a)'' both places it appears and
inserting ``subparagraphs (A) through (G) of section
152(d)(2)''.
(B) Section 51(i)(1)(C) of such Code is amended by striking
``152(a)(9)'' and inserting ``152(d)(2)(H)''.
(5) Section 72(t)(7)(A)(iii) of such Code is amended by
striking ``151(c)(3)'' and inserting ``152(f)(1)''.
(6) Section 129(c)(2) of such Code is amended by striking
``151(c)(3)'' and inserting ``152(f)(1)''.
(7) The first sentence of section 132(h)(2)(B) of such Code
is amended by striking ``151(c)(3)'' and inserting
``152(f)(1)''.
(8) Section 153 of such Code is amended by striking
paragraph (1) and by redesignating paragraphs (2), (3), and
(4) as paragraphs (1), (2), and (3), respectively.
(9) Section 170(g)(3) of such Code is amended by striking
``paragraphs (1) through (8) of section 152(a)'' and
inserting ``subparagraphs (A) through (G) of section
152(d)(2)''.
(10) The second sentence of section 213(d)(11) of such Code
is amended by striking ``paragraphs (1) through (8) of
section 152(a)'' and inserting ``subparagraphs (A) through
(G) of section 152(d)(2)''.
(11) Section 529(e)(2)(B) of such Code is amended by
striking ``paragraphs (1) through (8) of section 152(a)'' and
inserting ``subparagraphs (A) through (G) of section
152(d)(2)''.
(12) Section 2032A(c)(7)(D) of such Code is amended by
striking ``section 151(c)(4)'' and inserting ``section
152(f)(2)''.
(13) Section 7701(a)(17) of such Code is amended by
striking ``152(b)(4), 682,'' and inserting ``682''.
(14) Section 7702B(f)(2)(C)(iii) of such Code is amended by
striking ``paragraphs (1) through (8) of section 152(a)'' and
inserting ``subparagraphs (A) through (G) of section
152(d)(2)''.
(15) Section 7703(b)(1) of such Code is amended--
(A) by striking ``151(c)(3)'' and inserting ``152(f)(1)'',
and
(B) by striking ``paragraph (2) or (4) of''.
SEC. 9. EFFECTIVE DATE.
The amendments made by this Act shall apply to taxable
years beginning after December 31, 2003.
______
By Mr. THOMAS (for himself and Mr. Gregg):
S. 756. A bill to amend the Internal Revenue Code of 1986 to modify
the qualified small issue bond provisions; to the Committee on Finance.
Mr. THOMAS: Mr. President, I am pleased to rise to introduce
legislation with my distinguished colleague from New Hampshire, Mr.
Gregg. Specifically, the bill we offer today would amend the Internal
Revenue Code of 1986 to modify the qualified small issue bond
provisions. Current restrictions built into the law decades ago prevent
small manufacturers from realizing the full financial benefit from
these bonds.
The manufacturing sector is a key component of the U.S. economy. It
was particularly hard-hit in the most recent recession and continues to
struggle. More than two million high-wage, quality jobs have been lost.
These losses occurred in both large and small manufacturing facilities.
Reversing the decline is critical for our Nation's economic well-being.
This bill targets a problem faced by many small manufacturers: the
lack of investment capital. These manufacturers need access to
financial resources to build, to grow, to employ new workers and to
survive. One of the lowest-cost capital investment options currently
available is tax-exempt Industrial Development Bonds or IDBs. These
bonds are issued by state governments throughout the country and
provide an excellent financial resource for companies looking to build
or expand their manufacturing facilities.
The maximum IDB available for qualified projects was set in 1978 at
$10 million. The purchasing power of that amount has declined by more
than fifty percent over time, severely reducing the effectiveness of
this financial tool. In addition, the ten million dollar ceiling is
subject to a dollar reduction for other funding used in the project.
These limits create a significant and unnecessary barrier. To help
small manufacturers and acknowledge the technological advances made in
the past 25 years, it is time to change the law.
This bill makes the necessary changes to ensure that the law reflects
economic realities. It increases the bond cap and capital expenditure
amounts from ten to twenty million dollars. An inflation adjuster is
added to avoid a similar reduction in purchasing power in the future.
Finally, we would expand the definition of manufacturing facilities to
capture new technologies, namely biotech and software production.
Many factors are responsible for the current decline in the
manufacturing sector. Our bill will not solve all the problems, but it
does break down the capital investment barrier facing many small
manufacturers. These businesses, and the communities in which they are
located, need our help. This proposal will go a long way in achieving
that objective and I urge all my colleagues to become a cosponsor.
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. 756
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. MODIFICATIONS TO SMALL ISSUE BOND PROVISIONS.
(a) Increase in Amount of Qualified Small Issue Bonds
Permitted for Facilities To Be Used by Related Principal
Users.--
(1) In general.--Clause (i) of section 144(a)(4)(A)
(relating to $10,000,000 limit in certain cases) is amended
by striking ``$10,000,000'' and inserting ``$20,000,000''.
(2) Cost-of-living adjustment.--Section 144(a)(4) is
amended by adding at the end the following:
``(G) Cost-of-living adjustment.--In the case of a taxable
year beginning in a calendar year after 2002, the $20,000,000
amount under subparagraph (A) shall be increased by an amount
equal to--
``(i) such dollar amount, multiplied by
``(ii) the cost-of-living adjustment under section 1(f)(3)
for the calendar year in which the taxable year begins,
determined by substituting `calendar year 2001' for `calendar
year 1992' in subparagraph (B) thereof.''.
(3) Clerical amendment.--The heading of paragraph (4) of
section 144(a) is amended by striking ``$10,000,000'' and
inserting ``$20,000,000''.
(4) Effective date.--The amendments made by this subsection
shall apply to--
(A) obligations issued after the date of the enactment of
this Act, and
(B) capital expenditures made after such date with respect
to obligations issued on or before such date.
(b) Definition of Manufacturing Facility.--
(1) In general.--Section 144(a)(12)(C) (relating to
definition of manufacturing facility) is amended to read as
follows:
``(C) Manufacturing facility.--For purposes of this
paragraph, the term `manufacturing facility' means any
facility which is used in--
``(i) the manufacturing or production of tangible personal
property (including the processing resulting in a change in
the condition of such property),
``(ii) the manufacturing, development, or production of
specifically developed software products or processes if--
``(I) it takes more than 6 months to develop or produce
such products,
``(II) the development or production could not with due
diligence be reasonably expected to occur in less than 6
months, and
``(III) the software product or process comprises programs,
routines, and attendant documentation developed and
maintained for use in computer and telecommunications
technology, or
[[Page S4640]]
``(iii) the manufacturing, development, or production of
specially developed biobased or bioenergy products or
processes if--
``(I) it takes more than 6 months to develop or produce,
``(II) the development or production could not with due
diligence be reasonably expected to occur in less than 6
months, and
``(III) the biobased or bioenergy product or process
comprises products, processes, programs, routines, and
attendant documentation developed and maintained for the
utilization of biological materials in commercial or
industrial products, for the utilization of renewable
domestic agricultural or forestry materials in commercial or
industrial products, or for the utilization of biomass
materials.
``(D) Related facilities.--For purposes of subparagraph
(C), the term `manufacturing facility' includes a facility
which is directly and functionally related to a manufacturing
facility (determined without regard to subparagraph (C)) if--
``(i) such facility, including an office facility and a
research and development facility, is located on the same
site as the manufacturing facility, and
``(ii) not more than 40 percent of the net proceeds of the
issue are used to provide such facility,
but shall not include a facility used solely for research and
development activities.''.
(2) Effective date.--The amendment made by this subsection
shall apply to obligations issued after the date of the
enactment of this Act.
______
By Mr. LIEBERMAN (for himself, Ms. Snowe, Mr. Dodd, Mr. Allen,
Mrs. Clinton, Mr. Harkin, and Mr. Akaka):
S. 758. A bill to amend the Internal Revenue Code of 1986 to allow a
credit against income tax for certain energy-efficient property; to the
Committee on Finance.
(At the request of Mr. DODD, the following statement was ordered to
be printed in the Record.)
Mr. LIEBERMAN. Mr. President, I rise today to introduce a
bill, with Senator Olympia Snowe, to encourage the use of fuel cells, a
clean and cutting-edge energy technology. Specifically, the bill would
give consumers a tax credit for purchasing residential and commercial
fuel cell systems to power their electricity. The tax credit would
apply to stationary and portable fuel cell systems, and would be
applicable for 5 years.
First used for space missions in the 1960s, fuel cells use an
electrochemical reaction to convert energy from hydrogen-rich fuel
sources into electricity. Because no combustion is involved, fuel cells
produce virtually no air pollution and significantly reduce carbon
dioxide emissions. Fuel cell units in operation today are capable of
running 24 hours a day, 7 days a week, with only routine maintenance.
They are installed around the world in power plants, hospitals,
schools, banks, military installations, and manufacturing facilities.
Smaller units for homeowners and small businesses will enter the
commercial market shortly.
Fuel cell technology offers a clean, secure, and dependable source of
energy that should be part of our national energy strategy. With oil
and gas prices now reaching record highs, fuel cells are one excellent
answer to our heightened energy demand and dependence on foreign oil.
This legislation will power fuel cell technology by speeding its market
introduction and by increasing its uses in our everyday lives.
Mr. President, I ask that the bill be printed in the Record.
S. 758
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. CREDIT FOR CERTAIN ENERGY-EFFICIENT PROPERTY.
(a) Business Property.--
(1) In general.--Subparagraph (A) of section 48(a)(3) of
the Internal Revenue Code of 1986 (defining energy property)
is amended by striking ``or'' at the end of clause (i), by
adding ``or'' at the end of clause (ii), and by inserting
after clause (ii) the following new clause:
``(iii) energy-efficient building property,''.
(2) Energy-efficient building property.--Subsection (a) of
section 48 of such Code is amended by redesignating
paragraphs (4) and (5) as paragraphs (5) and (6),
respectively, and by inserting after paragraph (3) the
following new paragraph:
``(4) Energy-efficient building property.--For purposes of
this subsection--
``(A) In general.--The term `energy-efficient building
property' means a fuel cell power plant that--
``(i) generates electricity using an electrochemical
process,
``(ii) has an electricity-only generation efficiency
greater than 30 percent, and
``(iii) generates at least 0.5 kilowatt of electricity
using an electrochemical process.
``(B) Limitation.--In the case of energy-efficient building
property placed in service during the taxable year, the
credit determined under paragraph (1) for such year with
respect to such property shall not exceed an amount equal to
the lesser of--
``(i) 30 percent of the basis of such property, including
expenditures for labor costs properly allocable to the onsite
preparation, assembly, or original installation of the
property and for piping or wiring to interconnect such
property, or
``(ii) $1,000 for each kilowatt of capacity of such
property.
``(C) Special rules.--For purposes of subparagraph
(A)(ii)--
``(i) Electricity-only generation efficiency.--The
electricity-only generation efficiency percentage of a fuel
cell power plant is the fraction--
``(I) the numerator of which is the total useful electrical
power produced by such plant at normal operating rates, and
expected to be consumed in its normal application, and
``(II) the denominator of which is the lower heating value
of the fuel source for such plant.
``(ii) Determinations made on btu basis.--The electricity-
only generation efficiency percentage shall be determined on
a Btu basis.
``(D) Fuel cell power plant.--The term `fuel cell power
plant' means an integrated system comprised of a fuel cell
stack assembly and associated balance of plant components
that converts a fuel into electricity using electrochemical
means.
``(E) Termination.--Such term shall not include any
property placed in service after December 31, 2008.''.
(3) Limitation.--Section 48(a)(2)(A) of such Code (relating
to energy percentage) is amended to read as follows:
``(A) In general.--The energy percentage is--
``(i) in the case of energy-efficient building property, 30
percent, and
``(ii) in the case of any other energy property, 10
percent.''.
(4) Conforming amendments.--
(A) Section 29(b)(3)(A)(i)(III) of such Code is amended by
striking ``section 48(a)(4)(C)'' and inserting ``section
48(a)(5)(C)''.
(B) Section 48(a)(1) of such Code is amended by inserting
``except as provided in paragraph (4)(B),'' before ``the
energy''.
(5) Effective date.--The amendments made by this subsection
shall apply to property placed in service after December 31,
2003, under rules similar to the rules of section 48(m) of
the Internal Revenue Code of 1986 (as in effect on the day
before the date of the enactment of the Revenue
Reconciliation Act of 1990).
(b) Nonbusiness Property.--
(1) In general.--Subpart A of part IV of subchapter A of
chapter 1 of the Internal Revenue Code of 1986 (relating to
nonrefundable personal credits) is amended by inserting after
section 25B the following new section:
``SEC. 25C. NONBUSINESS ENERGY-EFFICIENT BUILDING PROPERTY.
``(a) Credit Allowed.--
``(1) In general.--In the case of an individual, there
shall be allowed as a credit against the tax imposed by this
chapter for the taxable year an amount equal to the
nonbusiness energy-efficient building property expenditures
which are paid or incurred during such year.
``(2) Limitation.--The credit allowed under paragraph (1)
with respect to property placed in service by the taxpayer
during the taxable year shall not exceed an amount equal to
the lesser of--
``(A) 30 percent of the basis of such property, or
``(B) $1,000 for each kilowatt of capacity of such
property.
``(b) Nonbusiness Energy-Efficient Building Property
Expenditures.--For purposes of this section--
``(1) In general.--The term `nonbusiness energy-efficient
building property expenditures' means expenditures made by
the taxpayer for nonbusiness energy-efficient building
property installed on or in connection with a dwelling unit--
``(A) which is located in the United States, and
``(B) which is used by the taxpayer as a residence.
Such term includes expenditures for labor costs properly
allocable to the onsite preparation, assembly, or original
installation of the property.
``(2) Nonbusiness energy-efficient building property.--The
term `nonbusiness energy-efficient building property' means
energy-efficient building property (as defined in section
48(a)(4)) if--
``(A) the original use of such property commences with the
taxpayer, and
``(B) such property meets the standards (if any) applicable
to such property under section 48(a)(3).
``(c) Special Rules.--For purposes of this section--
``(1) Dollar amounts in case of joint occupancy.--In the
case of any dwelling unit which is jointly occupied and used
during any calendar year as a residence by 2 or more
individuals the following shall apply:
``(A) The amount of the credit allowable, under subsection
(a) by reason of expenditures (as the case may be) made
during such
[[Page S4641]]
calendar year by any of such individuals with respect to such
dwelling unit shall be determined by treating all of such
individuals as 1 taxpayer whose taxable year is such calendar
year.
``(B) There shall be allowable, with respect to such
expenditures to each of such individuals, a credit under
subsection (a) for the taxable year in which such calendar
year ends in an amount which bears the same ratio to the
amount determined under subparagraph (A) as the amount of
such expenditures made by such individual during such
calendar year bears to the aggregate of such expenditures
made by all of such individuals during such calendar year.
``(2) Tenant-stockholder in cooperative housing
corporation.--In the case of an individual who is a tenant-
stockholder (as defined in section 216) in a cooperative
housing corporation (as defined in such section), such
individual shall be treated as having made his tenant-
stockholder's proportionate share (as defined in section
216(b)(3)) of any expenditures of such corporation.
``(3) Condominiums.--
``(A) In general.--In the case of an individual who is a
member of a condominium management association with respect
to a condominium which the individual owns, such individual
shall be treated as having made his proportionate share of
any expenditures of such association.
``(B) Condominium management association.--For purposes of
this paragraph, the term `condominium management association'
means an organization which meets the requirements of
paragraph (1) of section 528(c) (other than subparagraph (E)
thereof) with respect to a condominium project substantially
all of the units of which are used as residences.
``(4) Allocation in certain cases.--If less than 80 percent
of the use of an item is for nonbusiness purposes, only that
portion of the expenditures for such item which is properly
allocable to use for nonbusiness purposes shall be taken into
account.
``(5) When expenditure made; amount of expenditure.--
``(A) In general.--Except as provided in subparagraph (B),
an expenditure with respect to an item shall be treated as
made when the original installation of the item is completed.
``(B) Expenditures part of building construction.--In the
case of an expenditure in connection with the construction or
reconstruction of a structure, such expenditure shall be
treated as made when the original use of the constructed or
reconstructed structure by the taxpayer begins.
``(C) Amount.--The amount of any expenditure shall be the
cost thereof.
``(6) Property financed by subsidized energy financing.--
For purposes of determining the amount of nonbusiness energy-
efficient building property expenditures made by any
individual with respect to any dwelling unit, there shall not
be taken into account expenditures which are made from
subsidized energy financing (as defined in section
48(a)(5)(C)).
``(d) Basis Adjustments.--For purposes of this subtitle, if
a credit is allowed under this section for any expenditure
with respect to any property, the increase in the basis of
such property which would (but for this subsection) result
from such expenditure shall be reduced by the amount of the
credit so allowed.
``(e) Termination.--This section shall not apply to any
expenditure made after December 31, 2008.''.
(2) Conforming amendments.--
(A) Subsection (a) of section 1016 of such Code is amended
by striking ``and'' at the end of paragraph (27), by striking
the period at the end of paragraph (28) and inserting ``;
and'', and by adding at the end the following new paragraph:
``(29) to the extent provided in section 25C(d), in the
case of amounts with respect to which a credit has been
allowed under section 25C.''.
(B) The table of sections for subpart A of part IV of
subchapter A of chapter 1 of such Code is amended by
inserting after the item relating to section 25B the
following new item:
``Sec. 25C. Nonbusiness energy-efficient building property.''.
(3) Effective date.--The amendments made by this subsection
shall apply to expenditures made after December 31, 2003.
Ms. SNOWE. Mr. President, I rise today with my colleague from
Connecticut, Senator Lieberman, to introduce a bill that will promote
the expanded use of an environmentally sound and efficient energy
technology--fuel cell power.
The United States has had a long, inseparable relationship with
energy. The Americans of the 19th century would not have populated the
West as they did without the railroad and its steam engines. New York's
Pearl Street Station, designed by Thomas Edison in 1882, demonstrated
the immense possibilities of large-scale electricity generation that
would revolutionize our Nation and the world. And, of course, the 20th
century is posted with landmark American innovations an inventions in
oil use and production, nuclear power, and solar energy.
As we begin our journey into the 21st century, we must begin a new
chapter for energy use through fuel cell power. Fuel cells are not a
futuristic dream, as every manned U.S. space mission has relied upon
fuel cells for electricity and drinking water. From a New York City
police station to a postal facility in Alaska to hospitals, schools,
banks, military installations and manufacturing facilities around the
world, fuel cell units are efficiently generating dependable power 24
hours a day, 7 days a week for upwards of 2 years with only routine
maintenance.
Fuel cell technology offers a clean, secure, efficient, and
dependable source of energy that should be part of our national energy
strategy. Not only do fuel cells deliver the high quality, reliable
power that is considered an absolute necessity for many portions of our
society, they reduce grid demand while improving grid flexibility. Fuel
cells are an ideal energy source to address the Nation's pressing
energy needs.
Using electro-chemical reaction to convert energy from hydrogen-rich
fuel cell sources into electricity, fuel cells reduce the need for
fossil fuel consumption. And, since no combustion is involved, fuel
cells produce virtually no air pollution and significantly reduce
carbon dioxide emissions, the major greenhouse gas thought to be
responsible for climate change variability. In fact, a 200 kilowatt
fuel power plant produces less than one ounce of pollutants for every
1,000 kilowatt hours of electricity it yields. In comparison, the
average fossil fuel plans produces nearly 25 pounds of pollutants to
generate the same 1,000 kilowatt hours of electricity. That is 400
times the amount of a fuel cell power plant.
The current problem is that it is difficult for the consumer to take
advantage of fuel cells because, as with any new technology, the
introductory price is high. To create the market incentives necessary
to speed the commercialization of this technology, the Lieberman-Snow
legislation provides a property owner a five year, $1,000 per kilowatt
stationary fuel cell tax credit, including labor and installation
costs, for business and non business power plants--stationary and
portable--that have an electrical generation efficiency greater than 30
percent and generate at least 0.5 kilowatts of electricity using an
electrochemical process. To put this electrical generation in
perspective, a home uses approximately 1 to 2 kilowatts of power, on
average.
By lowering the initial price for consumers, market introduction and
production volume of fuel cells will be accelerated with the end result
being a significant reduction in manufacturing costs. The decrease in
price would enable even more consumers to use one of the cleanest, most
reliable and most efficient means to generate electricity. This
tailored fuel cell tax credit for a stationary and portable fuel cells
is designed to benefit the widest range of potential fuel cell
customers and manufacturers with a meaningful incentive for the
purchase of fuel cells for residential and commercial use.
As summer approaches, power shortages and interruptions can be
expected throughout the country. We must increase our investment and
commitment to non-traditional energy sources such as fuel cells. This
reliable, combustion-free power provided by fuel cells in a sensible
alternative that is available today. I urge my colleagues to support us
for a sensible fuel cell power tax credit.
______
By Mr. DURBIN (for himself, Mr. Allard, Mr. Conrad, Mr. Harkin,
Mr. Johnson, Mr. Leahy, Mr. Dorgan, and Mr. Jeffords):
S. 759. A bill to amend the Internal Revenue Code of 1986 to provide
a tax credit for individuals and businesses for the installation of
certain wind energy property; to the Committee on Finance.
Mr. DURBIN. Mr. President, I rise today to introduce the Residential,
Farm, Ranch and Small Business Energy Systems Act of 2003, also known
as the Small Wind Energy Systems Act. I am honored to be joined by
Senators Allard, Conrad, Harkin, Johnson, Leahy and Dorgan in
introducing this legislation.
In order to foster a forward-looking energy policy, the United States
needs to broaden its energy portfolio beyond fossil fuels, which are a
finite energy source. Any serious attempt to create a
[[Page S4642]]
national energy policy must include innovative proposals for exploring
and developing the use of alternative and renewable energy sources. The
legislation I am introducing today would help spur the production of
electricity from a limitless source--wind.
This bill, similar to legislation I introduced last year, offers a
tax credit to help defray the cost of installing a small wind energy
system to generate electricity for individual homes, farms, ranches and
businesses. The credit can be applied only to systems up to 75 kW, and
is equal to 30 percent of the cost of installation, up to $1,000 per
kilowatt. I am offering this legislation in the hope that this tax
credit will help make it economical for people to invest in small wind
systems, thereby reducing pressures on the national power grid and
increasing America's energy independence one family and business at a
time.
Small wind systems are the most cost-competitive home-sized renewable
energy technology, but the high up-front cost has been a barrier. A
typical small, rural wind system rated at 10 kW costs $30,000-$35,000
to install. A 30 percent business investment credit would make wind
energy more viable for rural America. In addition, farmers and ranchers
can utilize a small wind energy system while simultaneously continuing
to use their land for crop growing or grazing. Facilitating the
production of renewable energy on land that is already being worked for
other purposes would be a boon to our economy, environment, and
national security. Finally, the tax credit would help us promote a
healthier environment. A typical small system can offset seven tons of
carbon dioxide per year; carbon dioxide is the most significant
contributor to climate change.
I am pleased to see that others in the Senate are working to promote
renewable energy. In the context of our deliberations on energy policy,
I hope to work with Senators Grassley and Baucus, and others, in order
to build on these efforts. In particular, I hope we can expand the
residential credit provided for wind energy systems in the Energy Tax
Incentives Act of 2003, S. 597, so that the cap is raised to $1,000 per
kilowatt. In addition, I hope to add wind to the business investment
credit section of the tax code. Although there is currently in law a
business investment credit for solar and geothermal power, there is
currently no Federal program to support small wind systems being
installed by farmers and ranchers. The Energy Tax Incentives Act of
2003 would add fuel cells to this section of the code. I hope I can
work with my colleagues to also add wind to this section, because we
need to encourage investments in this source of energy.
Last year, a portion of this legislation was included in the Senate
energy bill by unanimous consent. I hope to build on this success this
year, by securing passage of the full measure.
For the good of our rural economy, homeowners and business owners,
the environment and energy security, I encourage my colleagues to
support this legislation. I ask unanimous consent that the legislation
be printed in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 759
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 ``Residential, Farm, Ranch,
and Small Business Wind Energy Systems Act of 2003'' or the
``Small Wind Energy Systems Act of 2003''.
SEC. 2. CREDIT FOR RESIDENTIAL WIND ENERGY PROPERTY.
(a) In General.--Subpart A of part IV of subchapter A of
chapter 1 of the Internal Revenue Code of 1986 (relating to
nonrefundable personal credits) is amended by inserting after
section 25B the following new section:
``SEC. 25C. RESIDENTIAL SMALL WIND ENERGY SYSTEMS.
``(a) Allowance of Credit.--In the case of an individual,
there shall be allowed as a credit against the tax imposed by
this chapter for the taxable year an amount equal to 30
percent of the qualified wind energy property expenditures
made by the taxpayer during such year.
``(b) Limitations.--
``(1) Maximum credit.--The credit allowed under subsection
(a) shall not exceed $1,000 for each kilowatt of capacity.
``(2) Safety certifications.--No credit shall be allowed
under this section for an item of property unless such
property meets appropriate fire and electric code
requirements.
``(c) Carryforward of Unused Credit.--If the credit
allowable under subsection (a) exceeds the limitation imposed
by section 26(a) for such taxable year reduced by the sum of
the credits allowable under this subpart (other than this
section), such excess shall be carried to the succeeding
taxable year and added to the credit allowable under
subsection (a) for such succeeding taxable year.
``(d) Qualified Wind Energy Property Expenditure.--For
purposes of this section--
``(1) Qualified wind energy property expenditure defined.--
``(A) In general.--The term `qualified wind energy property
expenditure' means an expenditure for qualified wind energy
property installed on or in connection with a dwelling unit
located in the United States and used as a residence by the
taxpayer, including all necessary installation fees and
charges.
``(B) Qualified wind energy property.--The term `qualified
wind energy property' means a qualifying wind turbine--
``(i) the original use of which commences with the
taxpayer, and
``(ii) which carries at least a 5-year limited warranty
covering defects in design, material, or workmanship, and,
for any qualifying wind turbine that is not installed by the
taxpayer, at least a 5-year limited warranty covering defects
in installation.
``(C) Qualifying wind turbine.--The term `qualifying wind
turbine' means a wind turbine of 75 kilowatts of rated
capacity or less which at the time of manufacture and not
more than one year from the date of purchase meets the latest
performance rating standards published by the American Wind
Energy Association or the International Electrotechnical
Commission and which is used to generate electricity.
``(2) Labor costs.--Expenditures for labor costs properly
allocable to the onsite preparation, assembly, or original
installation of qualified wind energy property and for piping
or wiring to interconnect such property to the dwelling unit
or to the local energy grid shall be taken into account for
purposes of this section.
``(3) Swimming pools, etc., used as storage medium.--
Expenditures which are properly allocable to a swimming pool,
hot tub, or any other energy storage medium which has a
function other than the function of storage shall not be
taken into account for purposes of this section.
``(e) Special Rules.--For purposes of this section--
``(1) Dollar amounts in case of joint occupancy.--In the
case of any dwelling unit which is jointly occupied and used
during any calendar year as a residence by 2 or more
individuals the following shall apply:
``(A) The amount of the credit allowable, under subsection
(a) by reason of expenditures (as the case may be) made
during such calendar year by any of such individuals with
respect to such dwelling unit shall be determined by treating
all of such individuals as 1 taxpayer whose taxable year is
such calendar year.
``(B) There shall be allowable, with respect to such
expenditures to each of such individuals, a credit under
subsection (a) for the taxable year in which such calendar
year ends in an amount which bears the same ratio to the
amount determined under subparagraph (A) as the amount of
such expenditures made by such individual during such
calendar year bears to the aggregate of such expenditures
made by all of such individuals during such calendar year.
``(2) Tenant-stockholder in cooperative housing
corporation.--In the case of an individual who is a tenant-
stockholder (as defined in section 216) in a cooperative
housing corporation (as defined in such section), such
individual shall be treated as having made his tenant-
stockholder's proportionate share (as defined in section
216(b)(3)) of any expenditures of such corporation.
``(3) Condominiums.--
``(A) In general.--In the case of an individual who is a
member of a condominium management association with respect
to a condominium which the individual owns, such individual
shall be treated as having made the individual's
proportionate share of any expenditures of such association.
``(B) Condominium management association.--For purposes of
this paragraph, the term `condominium management association'
means an organization which meets the requirements of
paragraph (1) of section 528(c) (other than subparagraph (E)
thereof) with respect to a condominium project substantially
all of the units of which are used as residences.
``(4) Allocation in certain cases.--If less than 80 percent
of the use of a qualified wind energy property is for
nonbusiness purposes and for generation of energy to be sold
to others, only that portion of the expenditures for such
property which is properly allocable to use for nonbusiness
purposes and for generation of energy to be sold to others
shall be taken into account.
``(5) When expenditure made; amount of expenditure.--
``(A) In general.--Except as provided in subparagraph (B),
an expenditure with respect to any qualified wind energy
property shall be treated as made when the original
installation of such property is completed and the property
has begun to be used to generate energy.
``(B) Expenditures part of building construction.--In the
case of an expenditure in connection with the construction or
reconstruction of a structure, such expenditure shall be
treated as made when the original
[[Page S4643]]
use of the constructed or reconstructed structure by the
taxpayer begins.
``(C) Amount.--The amount of any expenditure shall be the
cost thereof.
``(6) Property financed by subsidized energy financing.--
For purposes of determining the amount of expenditures made
by any individual with respect to any dwelling unit, there
shall not be taken in to account expenditures which are made
from subsidized energy financing (as defined in section
48(a)(5)(C)).
``(f) Basis Adjustments.--For purposes of this subtitle, if
a credit is allowed under this section for any expenditure
with respect to any qualified wind energy property, the
increase in the basis of such property which would (but for
this subsection) result from such expenditure shall be
reduced by the amount of the credit so allowed.
``(g) Termination.--This section shall not apply to
property installed in taxable years beginning after December
31, 2008.''.
(b) Credit Allowed Against Regular Tax and Alternative
Minimum Tax.--
(1) In general.--Section 25C(b) of the Internal Revenue
Code of 1986, as added by subsection (a), is amended by
adding at the end the following new paragraph:
``(3) Limitation based on amount of tax.--The credit
allowed under subsection (a) for the taxable year shall not
exceed the excess of--
``(A) the sum of the regular tax liability (as defined in
section 26(b)) plus the tax imposed by section 55, over
``(B) the sum of the credits allowable under this subpart
(other than this section) and section 27 for the taxable
year.''.
(2) Conforming amendments.--
(A) Section 25C(c) of such Code, as added by subsection
(a), is amended by striking ``section 26(a) for such taxable
year reduced by the sum of the credits allowable under this
subpart (other than this section)'' and inserting
``subsection (b)(3)''.
(B) Section 23(b)(4)(B) of such Code is amended by
inserting ``and section 25C'' after ``this section''.
(C) Section 24(b)(3)(B) of such Code is amended by striking
``23 and 25B'' and inserting ``23, 25B, and 25C''.
(D) Section 25(e)(1)(C) of such Code is amended by
inserting ``25C,'' after ``25B,''.
(E) Section 25B(g)(2) of such Code is amended by striking
``section 23'' and inserting ``sections 23 and 25C''.
(F) Section 26(a)(1) of such Code is amended by striking
``and 25B'' and inserting ``25B, and 25C''.
(G) Section 904(h) of such Code is amended by striking
``and 25B'' and inserting ``25B, and 25C''.
(H) Section 1400C(d) of such Code is amended by striking
``and 25B'' and inserting ``25B, and 25C''.
(c) Additional Conforming Amendments.--
(1) Section 23(c) of the Internal Revenue Code of 1986, as
in effect for taxable years beginning before January 1, 2004,
is amended by striking ``section 1400C'' and inserting
``sections 25C and 1400C''.
(2) Section 25(e)(1)(C) of such Code, as in effect for
taxable years beginning before January 1, 2004, is amended by
inserting ``, 25C,'' after ``sections 23''.
(3) Subsection (a) of section 1016 of such Code is amended
by striking ``and'' at the end of paragraph (27), by striking
the period at the end of paragraph (28) and inserting ``,
and'', and by adding at the end the following new paragraph:
``(29) to the extent provided in section 25C(f), in the
case of amounts with respect to which a credit has been
allowed under section 25C.''.
(4) Section 1400C(d) of such Code, as in effect for taxable
years beginning before January 1, 2004, is amended by
inserting ``and section 25C'' after ``this section''.
(5) The table of sections for subpart A of part IV of
subchapter A of chapter 1 of such Code is amended by
inserting after the item relating to section 25B the
following new item:
``Sec. 25C. Residential wind energy property.''.
(d) Effective Dates.--
(1) In general.--Except as provided by paragraph (2), the
amendments made by this section shall apply to expenditures
after December 31, 2002, in taxable years ending after such
date.
(2) Subsection (b).--The amendments made by subsection (b)
shall apply to taxable years beginning after December 31,
2003.
SEC. 3. CREDIT FOR BUSINESS INSTALLATION OF SMALL WIND ENERGY
PROPERTY.
(a) In General.--Subparagraph (A) of section 48(a)(3) of
the Internal Revenue Code of 1986 (defining energy property)
is amended by striking ``or'' at the end of clause (i), by
adding ``or'' at the end of clause (ii), and by inserting
after clause (ii) the following new clause:
``(iii) qualified wind energy property installed before
January 1, 2009,''.
(b) Qualified Wind Energy Property.--Subsection (a) of
section 48 is amended by redesignating paragraphs (4) and (5)
as paragraphs (5) and (6), respectively, and by inserting
after paragraph (3) the following new paragraph:
``(4) Qualified wind energy property.--For purposes of this
subsection--
``(A) In general.--The term `qualified wind energy
property' means a qualifying wind turbine--
``(i) installed on or in connection with a farm (as defined
in section 6420(c)), a ranch, or an establishment of an
eligible small business (as defined in section 44(b)) which
is located in the United States and which is owned and used
by the taxpayer,
``(ii) the original use of which commences with the
taxpayer, and
``(iii) which carries at least a 5-year limited warranty
covering defects in design, material, or workmanship, and,
for any qualifying wind turbine that is not installed by the
taxpayer, at least a 5-year limited warranty covering defects
in installation.
``(B) Limitation.--In the case of any qualified wind energy
property placed in service during the taxable year, the
credit determined under paragraph (1) for such year with
respect to such property shall not exceed an amount equal to
the lesser of--
``(i) 30 percent of the basis of such property, including
all necessary installation fees and charges, or
``(ii) $1,000 for each kilowatt of capacity of such
property.
``(C) Qualifying wind turbine.--For purposes of this
paragraph the term `qualifying wind turbine' means a wind
turbine of 75 kilowatts of rated capacity or less which at
the time of manufacture and not more than one year from the
date of purchase meets the latest performance rating
standards published by the American Wind Energy Association
or the International Electrotechnical Commission and which is
used to generate electricity.
``(D) Safety certifications.--No credit shall be allowed
under this section for any qualified wind energy property
unless such property meets appropriate fire and electric code
requirements.''.
(c) Limitation.--Section 48(a)(2)(A) of the Internal
Revenue Code of 1986 (relating to energy percentage) is
amended to read as follows:
``(A) In general.--The energy percentage is--
``(i) in the case of qualified wind energy property, 30
percent, and
``(ii) in the case of any other energy property, 10
percent.''.
(d) Conforming Amendment.--Section 29(b)(3)(A)(i)(III) of
the Internal Revenue Code of 1986 is amended by striking
``section 48(a)(4)(C)'' and inserting ``section
48(a)(5)(C)''.
(e) Effective Date.--The amendments made by this subsection
shall apply to property placed in service after December 31,
2003, under rules similar to the rules of section 48(m) of
the Internal Revenue Code of 1986 (as in effect on the day
before the date of the enactment of the Revenue
Reconciliation Act of 1990).
______
By Mr. GRASSLEY (for himself, Mr. Baucus, Mr. DeWine, Mr. Durbin,
Mr. Gregg, Mr. Bingaman, Mr. Feingold, Ms. Snowe, Mr.
Rockfeller, Mr. Santorum, and Mr. Leahy):
S. 780. A bill to implement effective measures to stop trade in
conflict diamonds, and for other purposes; to the Committee on Finance.
Mr. GRASSLEY. Mr. President, I rise today to introduce the Clean
Diamond Trade Act. Technically, this act will implement a certification
process for imports of rough diamonds. But, as many of you know, this
bill goes far beyond technicalities. This bill will help put an end to
trade in conflict diamonds. As many of you know, conflict diamonds are
diamonds mined and used by rebel movements in many African nations as a
source of revenue to fuel armed conflict and the activities of rebel
movements aimed at undermining or overthrowing legitimate governments
in African countries. Millions of people have been driven from their
homes by wars that have been fought for control of these diamonds.
Families and entire countries have been torn apart.
That is why it is vitally important that we pass this legislation.
Passage of this legislation would be a true bipartisan success and a
significant step forward in stopping trade in conflict diamonds. And I
would like to thank my colleagues for helping to develop the compromise
legislation in this Act. I would especially like to recognize the hard
work of Senators Gregg, DeWine, Durbin, Bingaman, and Feingold, whose
devotion and dedication to stopping trade in conflict diamonds is
unsurpassed.
Prior attempts to move similar bills have stalled in both the House
and the Senate. As Chairman of the Finance Committee, I took great care
to try and achieve the right balance so that we might implement a
certification process that meets our international responsibilities,
that can pass the House and the Senate, and most importantly, that
works.
The Clean Diamond Trade Act will implement the Kimberley Process
Certification Scheme. This is an international agreement establishing
minimal acceptable international standards
[[Page S4644]]
for national certification schemes relating to cross-border trade in
rough diamonds. It represents over two years of negotiations among more
than 50 countries, human rights advocacy groups, the diamond industry
and non-government organizations.
The next plenary session of the Kimberley Process is scheduled to
convene in Johannesburg, South Africa, from April 28 to the 30, 2003.
The U.S. played a leadership role in crafting the Kimberley Process
Certification Scheme, and it is critical that we implement the
certification process before April 28 if we are to retain this
leadership. We also need to do this to ensure that the flow of
legitimate diamonds into and out of the United States will continue
without interruption. Most important, we need to do everything we can
to stop trade in conflict diamonds as soon as possible.
Mr. President, we plan to mark-up this legislation in the Finance
Committee tomorrow morning. I am confident the bill will receive strong
bipartisan support in committee and am hopeful we can pass this bill by
unanimous consent in the full Senate before we adjourn for the April
recess. The people and countries in Africa affected by the damage of
conflict diamonds deserve our support. Passing this bill is the right
thing to do.
Mr. DeWINE. Today, Mr. President, violent conflicts and other global
threats and humanitarian concerns extend across many parts of our
world. We are at war with Iraq. North Korea possesses nuclear weapons.
HIV/AIDS is pandemic. And, terrorism threatens our daily lives.
Our world is, indeed, a very dangerous and unstable place. We know
this. And, while we are well aware of the many global ``hotspots''--the
conflicts and the violence and the human suffering--there are parts of
the world, which I believe, we have neglected. There are parts of the
world, where human tragedy is the order of the day--where children are
killed, where women are raped and beaten, and where people are
routinely tortured--their bodies maimed and mutilated.
One area of the world where such atrocities are occurring on a daily
basis is in Sierra Leone, Africa. For at least a decade, Sierra Leone,
one of the world's poorest nations, has been embroiled in civil war.
Rebel groups--most notably, the Revolutionary United Front (RUF)--have
been fighting for years to overthrow the recognized government. In the
process, violence has erupted as the rebels have fought to seize
control of the country's profitable diamond fields, which in turn,
helps finance their terrorist regime.
Once in control of a diamond field, the rebels confiscate the
diamonds and then launder them onto the legitimate market through other
nearby nations, like Liberia. Known as ``conflict'' or ``blood''
diamonds, these gems are a very lucrative business for the rebel
groups. In fact, over the past decade, the rebels have smuggled out of
Africa approximately $10 billion dollars in these diamonds.
It is nearly impossible to distinguish the illegally gathered
diamonds from legitimate or ``clean'' stones. And so, regrettably and
unwittingly, the United States--as the world's biggest buyer of
diamonds--has contributed to the violence. Our nation accounted for
more than half of the $57.5 billion in global retail diamond trade last
year, and some estimates suggest that illegal diamonds from Africa
account for as much as 15 percent of the overall diamond trade.
Since the start of the rebel's quest for control of Sierra Leone's
diamond supply, half of the nation's population of 4.5 million have
left their homes, and at least a half-million have left the country.
But, it is the children of Sierra Leone who are bearing the biggest
brunt of the rebel insurgency. For over eight years, the RUF has
conscripted children--children often as young as 7 or 8 years old--to
be soldiers in their make-shift army. They have ripped at least 12,000
children from their families.
As a result of deliberate and systematic brutalization, child
soldiers have become some of the most vicious--and effective--fighters
within the rebel factions. The rebel army--child-soldiers included--has
terrorized Sierra Leone's population, killing, abducting, raping, and
hacking off the limbs of victims with their machetes. This chopping off
of limbs is the RUF's trademark strategy. In Freetown, the surgeons are
frantic. Scores of men, women, and children--their hands partly chopped
off--have flooded the main hospital. Amputating as quickly as they can,
doctors toss severed hands into a communal bucket.
The RUF frequently and forcibly injects the children with cocaine in
preparation for battle. In many cases, the rebels force the child-
soldiers at gunpoint to kill their own family members or neighbors and
friends. Not only are these children traumatized by what they are
forced to do, they also are afraid to be reunited with their families
because of the possibility of retribution.
Mr. President, I cannot understate nor can I fully describe the
horrific abuses these children are suffering. The most vivid accounts
come from the child-soldiers themselves. I'd like to read a few of
their stories, taken from Amnesty International's 1998 report, ``Sierra
Leone--A Year of Atrocities against Civilians.'' According to one
child's recollection:
Civilians were rounded up, in groups or in lines, and then
taken individually to a pounding block in the village where
their hands, arms, or legs were cut with a machete. In some
villages, after the civilians were rounded up, they were
stripped naked. Men were then ordered to rape members of
their own family. If they refused, their arms were cut off
and the women were raped by rebel forces, often in front of
their husbands . . . victims of these atrocities also
reported women and children being rounded up and locked into
houses which were then set [on fire].
A young man from Lunsar, describing a rebel attack, said this:
Ten people were captured by the rebels and they asked us to
form a [line]. My brother was removed from the [line], and
they killed him with a rifle, and they cut his head with a
knife. After this, they killed his pregnant wife. There was
an argument among the rebels about the sex of the baby she
was carrying, so they decided to open her stomach to see the
baby.
According to Komba, a teenager:
My legs were cut with blades and cocaine was rubbed in the
wounds. Afterwards, I felt like a big person. I saw the other
people like chickens and rats. I wanted to kill them.
Rape, sexual slavery and other forms of sexual abuse of girls and
women have been systematic, organized, and widespread. Many of those
abducted have been forced to become the ``wives'' of combatants.
According to Isatu, an abducted teenage girl:
I did not want to go; I was forced to go. They killed a lot
of women who refused to go with them.
She was forced to become the sexual partner of the combatant who
captured her and is now the mother of their three-month-old baby:
When they capture young girls, you belong to the soldier
who captured you. I was `married' to him.
We are losing these children--an entire generation of children. If
the situation does not improve, these kids have no future. But, as long
as the rebel's diamond trade remains unchallenged, nothing will change.
That is why I have been working with Senators Durbin, Feingold, and
Gregg for over two years to pass legislation that would help stem this
illegal trade in conflict diamonds. Together, we have worked
extensively with our House colleagues, including my good friend and
former colleague from Ohio, Tony Hall, and Frank Wolf from Virginia, to
develop much needed legislation to help remove the rebel's market
incentive.
And, while we have not yet been successful in getting this
legislation signed into law, I credit my colleagues' continued
commitment to this often forgotten issue. I know our countless
congressional hearings, meetings, letters and legislative initiatives
have encouraged the Administration and the international community to
keep this issue alive. We have kept the pressure on, and we are
beginning to see some positive results.
Mr. President, just this past January 1st, an international agreement
called the Kimberley Process Certification Scheme was launched.
Specifically, this is a voluntary, international diamond certification
system among over 50 participant countries, including all of the major
diamond producing and trading countries. This is a positive step in the
right direction, and I commend the tireless work of human rights
[[Page S4645]]
advocates and the diamond industry for making this certification system
a reality.
Because of their success, Mr. President, today we are faced with the
urgent need of providing legislative measures to enable effective U.S.
implementation of the certification scheme. We need to provide the
Administration with the authorization necessary to ensure U.S.
compliance with this global, regulatory framework. That is why I am
here today to introduce legislation that commits the United States to
mandatory implementation of the Kimberley Process Certification Scheme.
I join my distinguished colleagues, Senators Grassley, Durbin,
Feingold, Bingaman, Talent, and Snowe, to introduce the ``Clean Diamond
Trade Act.'' This legislation is very similar to a measure introduced
in the House last week, H.R. 1415. Our bill is very simple. The whole
idea behind it is to commit the United States to a system of controls
on the export and import of diamonds, so that buyers can be certain
that their purchases are not fueling the rebel campaign.
Specifically, our legislation would prohibit the import of any rough
diamond that has not been controlled through the Kimberley Process
Certification Scheme. Put simply, this means that every diamond brought
into the United States would require a certificate of origin and
authenticity, indicating that a rebel or terrorist group has not
laundered it onto the legitimate market.
Additionally, the bill calls on the President to report annually to
Congress on the control system's effectiveness and also requires the
General Accounting Office to report on the law's effectiveness within
two years of enactment.
Finally, Mr. President, our bill emphasizes that the Kimberley
Process Certification Scheme is an ongoing process and that our
government should continue to work with the international community to
strengthen the effectiveness of this global regulatory framework. As
the world's biggest diamond customer--purchasing well over half of the
world's diamonds--our nation has a moral responsibility to show
continued leadership on this issue.
Quite candidly, there are a lot of things in this world--a lot of
terrible, tragic things--that we don't have the power to change or to
fix. But today, we can change something. We can make a difference. We
have the power to help put an end to the indescribable suffering and
violence caused by diamond-related conflicts. We have that power, and
we must use it. And so, I urge my colleagues to join me in support of
this much-needed legislation.
We have an obligation--a moral responsibility--to help stop the
violence, the brutality, the needless killing and maiming. No other
child should kill or be killed in diamond-related conflicts. I believe
that it is absolutely imperative that we pass the bill we have
introduced quickly and help end these atrocities once and for all.
It is the humane thing to do. It is the right thing to do. It is the
only thing to do.
I thank the Chair and yield the Floor.
____________________