[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

[[Page S4634]]

     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

[[Page S4635]]

     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.

                          ____________________