[Congressional Record Volume 149, Number 62 (Tuesday, April 29, 2003)]
[Senate]
[Pages S5486-S5495]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS
By Mr. STEVENS (for himself, Mr. Campbell, Mr. Domenici, Mr.
Hatch, Mr. Inouye, and Ms. Murkowski):
S. 931. A bill to direct the Secretary of the Interior to undertake a
program to reduce the risks from and mitigate the effects of avalanches
on visitors to units of the National Park System and on other
recreational users of public land; to the Committee on Energy and
Natural Resources.
Mr. STEVENS. Mr. President, today I introduce, with Senators
Campbell, Domenici, Hatch, Inouye, and Murkowski, the Federal Land
Recreational Visitor Protection Act of 2003.
Across our State of Alaska, Western States, and areas of the
Northeast, local governments and businesses struggle each year to
remove potential avalanches or recover form the disastrous effects of
avalanches. The West Wide Avalanche Network calculated avalanche damage
totals for the Western U.S. between $600 thousand and $800 thousand
annually. These costs do not include the economic losses from town cut-
off by avalanches. In our state alone, the Safety Center estimates
upwards of $18 million in direct damages both to private property and
economic losses over the past 5 years.
While such damage can bring hardships to many local communities, none
can compare with the loss of a friend or family member. The U.S.
averages 30 deaths a year from avalanches, a majority of which are
results of recreational activities in unmitigated avalanche areas. Some
States set aside money for rescues prior to the winter season, knowing
that the resources required to clear all avalanche threats are not at
hand.
This bill brings those resources to the entities that need them the
most, enabling us to significantly reduce the effects of avalanches on
visitors, recreational users, transportation corridors, and our local
communities.
______
By Mr. BREAUX (for himself, Mr. Ensign, Mr. Crapo, and Mr.
Bunning):
S. 932. A bill to amend the Internal Revenue Code of 1986 to allow a
credit against income tax for taxpayers owning certain commercial power
takeoff vehicles; to the Committee on Finance.
Mr. BREAUX. Mr. President, today I rise to introduce the Fuel Tax
Equalization Credit for Substantial Power Takeoff Vehicles Act. This
bill upholds a long-held principle in the application of the Federal
fuels excise tax, and restores this principle for certain single engine
``dual-use'' vehicles.
This long-held principle is simple: fuel consumed for the purpose of
moving vehicles over the road is taxed, while fuel consumed for ``off-
road'' purposes is not taxed. The tax is designed to compensate for the
wear and tear impacts on roads. Fuel used for a non-propulsion ``off-
road'' purpose has no impact on the roads. It should not be taxed as if
it does. This bill is based on this principle, and it remedies a
problem created by IRS regulations that control the application of the
federal fuels excise tax to ``dual-use'' vehicles.
Duel-use vehicles are vehicles that use fuel both to propel the
vehicle on the road, and also to operate separate, on-board equipment.
The two prominent examples of duel-use vehicles are concrete mixers,
which use fuel to rotate the mixing drum, and sanitation trucks, which
use fuel to operate the compactor. Both of these trucks move over the
road, but at the same time, a substantial portion of their fuel use is
attributable to the non-propulsion function.
The current problem developed because progress in technology has
outstripped the regulatory process. In the past, duel-use vehicles
commonly had two engines, IRS regulations, written in the 1950's,
specifically exempt the portion of fuel used by the separate engine
that operates special equipment such as a mixing drum or a trash
compactor. These IRS regulations reflect the principle that fuel
consumed for non-propulsion purposes is not taxed.
Today, however, typical duel-use vehicles use only one engine. The
single engine both propels the vehicle over the road and powers the
non-propulsion function through ``power takeoff.'' a major reason for
the growth of these single-engine, power takeoff vehicles is that they
use less fuel. And a major benefit for everyone is that they are better
for the environment.
Power takeoff was not in widespread use when the IRS regulations were
drafted, and the regulations deny an exemption for fuel used in single-
engine, duel-use vehicles. The IRS defends its distinction between one-
engine and two-engine, vehicles based on possible administrative
problems if vehicle owners were permitted to allocate fuel between the
propulsion and non-propulsion functions.
Our bill is designed to address the administrative concerns expressed
by the
[[Page S5487]]
IRS, but at the same time, restore tax fairness for fuel-use vehicles
with one engine. The bill does this by establishing an annual tax
credit available for taxpayers that own a licensed and insured concrete
mixer or sanitation truck with a compactor. The amount of the credit is
$250 and is a conservative estimate of the excise taxes actually paid,
based on information compiled on typical sanitation trucks and concrete
mixers.
In sum, as a fixed income tax credit, no audit or administrative
issue will arise about the amount of fuel used for the off-road
purpose. At the same time, the credit provides a rough justice method
to make sure these taxpayers are not required to pay tax on fuels that
they shouldn't be paying. Also, as an income tax credit, the proposal
would have no effect on the highway trust fund.
I would like to stress that I believe the IRS' interpretation of the
law is not consistent with long-held principles under the tax law,
despite their administrative concerns. Quite simply, the law should not
condone a situation where taxpayers are required to pay the excise tax
on fuel attributable to non-propulsion functions. This bill corrects an
unfair tax that should have never been imposed in the first place, I
urge my colleagues to cosponsor this important piece of legislation.
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:
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 ``Fuel Tax Equalization Credit
for Substantial Power Takeoff Vehicles Act''.
SEC. 2. CREDIT FOR TAXPAYERS OWNING COMMERCIAL POWER TAKEOFF
VEHICLES.
(a) In General.--Subpart D of part IV of subchapter A of
chapter 1 of the Internal Revenue Code of 1986 (relating to
business-related credits) is amended by adding at the end the
following new section:
``SEC. 45G. COMMERCIAL POWER TAKEOFF VEHICLES CREDIT.
``(a) General Rule.--For purposes of section 38, the amount
of the commercial power takeoff vehicles credit determined
under this section for the taxable year is $250 for each
qualified commercial power takeoff vehicle owned by the
taxpayer as of the close of the calendar year with or within
which the taxable year ends.
``(b) Definitions.--For purposes of this section--
``(1) Qualified commercial power takeoff vehicle.--The term
`qualified commercial power takeoff vehicle' means any
highway vehicle described in paragraph (2) which--
``(A) is propelled by any fuel subject to tax under section
4041 or 4081, and
``(B) is used in a trade or business or for the production
of income (and is licensed and insured for such use).
``(2) Highway vehicle described.--A highway vehicle is
described in this paragraph if such vehicle is--
``(A) designed to engage in the daily collection of refuse
or recyclables from homes or businesses and is equipped with
a mechanism under which the vehicle's propulsion engine
provides the power to operate a load compactor, or
``(B) designed to deliver ready mixed concrete on a daily
basis and is equipped with a mechanism under which the
vehicle's propulsion engine provides the power to operate a
mixer drum to agitate and mix the product en route to the
delivery site.
``(c) Exception for Vehicles Used by Governments, Etc.--No
credit shall be allowed under this section for any vehicle
owned by any person at the close of a calendar year if such
vehicle is used at any time during such year by--
``(1) the United States or an agency or instrumentality
thereof, a State, a political subdivision of a State, or an
agency or instrumentality of one or more States or political
subdivisions, or
``(2) an organization exempt from tax under section 501(a).
``(d) Denial of Double Benefit.--The amount of any
deduction under this subtitle for any tax imposed by
subchapter B of chapter 31 or part III of subchapter A of
chapter 32 for any taxable year shall be reduced (but not
below zero) by the amount of the credit determined under this
subsection for such taxable year.''.
(b) Credit Made Part of General Business Credit.--
Subsection (b) of section 38 of the Internal Revenue Code of
1986 (relating to general business credit) is amended by
striking ``plus'' at the end of paragraph (14), by striking
the period at the end of paragraph (15) and inserting ``,
plus'', and by adding at the end the following new paragraph:
``(16) the commercial power takeoff vehicles credit under
section 45G(a).''.
(c) No Carryback Before January 1, 2003.--Subsection (d) of
section 39 of the Internal Revenue Code of 1986 (relating to
carryback and carryforward of unused credits) is amended by
adding at the end the following new paragraph:
``(11) No carryback of section 45g credit before january 1,
2003.--No portion of the unused business credit for any
taxable year which is attributable to the credit determined
under section 45G may be carried back to a taxable year
beginning before January 1, 2003.''.
(d) Clerical Amendment.--The table of sections for subpart
D of part IV of subchapter A of chapter 1 of the Internal
Revenue Code of 1986 is amended by adding at the end the
following new item:
``Sec. 45G. Commercial power takeoff vehicles credit.''.
(e) Effective Date.--The amendments made by this section
shall apply to taxable years ending after December 31, 2002.
______
By Mr. BAUCUS (for himself, Mr. Grassley, and Mr. McCain):
S. 936. A bill to amend the Internal Revenue Code of 1986 to deny any
deduction for certain fines, penalties, and other amounts; to the
Committee on Finance.
Mr. BAUCUS. Mr. President, today, we are introducing the ``Government
Settlement Transparency Act of 2003.'' Over the past several months, we
have become increasingly concerned about the approval of various
settlements that allow penalty payments made to the government in
settlement of a violation or potential violation of the law to be tax
deductible. This payment structure shifts the tax burden from the
wrongdoer onto the backs of the American people. This is unacceptable.
The issue of tax deductibility is particularly relevant in the
settlement of various SEC investigations into violations or potential
violations of the securities laws. The corporate meltdown of the past
two years has caused investors to lose confidence in the stock market.
To address investors' loss of faith, Congress passed the Sarbanes-Oxley
Act last July. However, Sarbanes-Oxley begins to address only part of
the corporate reform problem, as it applies solely to future corporate
activity. To more fully restore confidence in the markets, America's
State and Federal regulators are also working to hold accountable the
corporate executives and others in corporate America responsible for
damaging investor confidence. With these efforts to achieve greater
accountability in the business community and ensure the integrity of
our financial markets, it is important that the rules governing the
appropriate tax treatment of settlements be clear and adhered to by
taxpayers.
Section 162(f) of the Internal Revenue Code provides that no
deduction is allowed as a trade or business expense under section
162(a) for the payment of a fine or penalty to a government for
violation of any law. The enactment of section 162(f) in 1969 codified
existing case law that denied the deductibility of fines and penalties
as ordinary and necessary business expenses on the grounds that
``allowance of the deduction would frustrate sharply defined national
or state policies proscribing the particular types of conduct evidenced
by some governmental declaration thereof.'' Treasury regulations
provide that fine or penalty includes an amount paid in settlement of
the taxpayer's actual or potential liability for a fine or penalty.
The legislation introduced today modifies the rules regarding the
determination of whether payments are nondeductible payments of fines
of penalties under section 162(f). In particular, the bill generally
provides that amounts paid or incurred, whether by suit, agreement, or
otherwise to, or at the direction of, a government in relation to the
violation of any law or the investigation or inquiry into the potential
violation of any law are nondeductible. The bill applies to deny a
deduction for any payment, including those where there is no admission
of guilt or liability and those made for the purpose of avoiding
further investigation or litigation.
An exception applies to payments that the taxpayer establishes are
restitution. It is intended that a payment will be treated as
restitution only if the payment is required to be paid to the specific
persons, or in relation to the specific property, actually harmed by
the conduct of the taxpayer that resulted in the payment. Thus, a
payment to or with respect to a class broader than the specific persons
or property that were actually harmed, for example, to class including
similarly situated persons or property, does
[[Page S5488]]
not qualify as restitution. Restitution is limited to the amount that
bears a substantial quantitative relationship to the harm caused by the
past conduct or actions of the taxpayer that resulted in the payment in
question. If the party harmed is a government, then restitution
includes payment to such harmed government, provided the payment bears
a substantial quantitative relationship to the harm. However,
restitution does not include reimbursement of government investigative
or litigation costs, or do payments to whistleblowers.
The bill would be effective for amounts paid or incurred on or after
April 28th, 2003, except that it would not apply to amounts paid or
incurred under any binding order or agreement entered into before such
date.
We 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. 936
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 ``Government Settlement
Transparency Act of 2003''.
SEC. 2. DENIAL OF DEDUCTION FOR CERTAIN FINES, PENALTIES, AND
OTHER AMOUNTS.
(a) In General.--Subsection (f) of section 162 of the
Internal Revenue Code of 1986 (relating to trade or business
expenses) is amended to read as follows:
``(f) Fines, Penalties, and Other Amounts.--
``(1) In general.--Except as provided in paragraph (2), no
deduction otherwise allowable shall be allowed under this
chapter for any amount paid or incurred (whether by suit,
agreement, or otherwise) to, or at the direction of, a
government in relation to the violation of any law or the
investigation or inquiry into the potential violation of any
law.
``(2) Exception for amounts constituting restitution.--
Paragraph (1) shall not apply to any amount which the
taxpayer establishes constitutes restitution for damage or
harm caused by the violation of any law or the potential
violation of any law. This paragraph shall not apply to any
amount paid or incurred as reimbursement to the government
for the costs of any investigation or litigation.
``(3) Treatment of certain nongovernmental regulatory
entities.--For purposes of paragraph (1), amounts paid or
incurred to, or at the direction of, the following
nongovernmental entities shall be treated as amounts paid or
incurred to, or at the direction of, a government:
``(A) Any nongovernmental entity which exercises self-
regulatory powers (including imposing sanctions) in
connection with a qualified board or exchange (as defined in
section 1256(g)(7)).
``(B) To the extent provided in regulations, any
nongovernmental entity which exercises self-regulatory powers
(including imposing sanctions) as part of performing an
essential governmental function.''.
(b) Effective Date.--The amendment made by this section
shall apply to amounts paid or incurred after April 27, 2003,
except that such amendment shall not apply to amounts paid or
incurred under any binding order or agreement entered into on
or before April 27, 2003. Such exception shall not apply to
an order or agreement requiring court approval unless the
approval was obtained on or before April 27, 2003.
______
By Mr. HAGEL (for himself, Mr. Harkin, Mr. Warner, Mr. Chaffee,
Ms. Collins, Ms. Snowe, Mr. Coleman, Mr. Kennedy, Mr. Jeffords,
Mr. Dodd, Ms. Mikulski, Mrs. Clinton, Mrs. Murray, Mr.
Bingaman, and Mr. Reed.):
S. 939. A bill to amend part B of the individuals with Disabilities
Education Act to provide full Federal funding of such part, to provide
an exception to the local maintenance of effort requirements, and for
other purposes; to the Commitee on Health, Education, Labor, and
Pensions.
Mr. HAGEL. 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. 939
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 ``IDEA Full-Funding Act of
2003''.
SEC. 2. AMENDMENTS TO IDEA.
(a) Funding.--Section 611(j) of the Individuals with
Disabilities Education Act (20 U.S.C. 1411(j)) is amended to
read as follows:
``(j) Funding.--For the purpose of carrying out this part,
other than section 619, there are authorized to be
appropriated--
``(1) $10,874,000,000 for fiscal year 2004, and, there are
hereby appropriated $2,000,000,000 for fiscal year 2004,
which shall become available for obligation on July 1, 2004
and shall remain available through September 30, 2005;
``(2) $12,874,000,000 for fiscal year 2005, and, there are
hereby appropriated $4,000,000,000 for fiscal year 2005,
which shall become available for obligation on July 1, 2005
and shall remain available through September 30, 2006;
``(3) $14,874,000,000 for fiscal year 2006, and, there are
hereby appropriated $6,000,000,000 for fiscal year 2006,
which shall become available for obligation on July 1, 2006
and shall remain available through September 30, 2007;
``(4) $16,874,000,000 for fiscal year 2007, and, there are
hereby appropriated $8,000,000,000 for fiscal year 2007,
which shall become available for obligation on July 1, 2007
and shall remain available through September 30, 2008;
``(5) $18,874,000,000 for fiscal year 2008, and, there are
hereby appropriated $10,000,000,000 for fiscal year 2008,
which shall become available for obligation on July 1, 2008
and shall remain available through September 30, 2009;
``(6) $20,874,000,000 for fiscal year 2009, and, there are
hereby appropriated $12,000,000,000 for fiscal year 2009,
which shall become available for obligation on July 1, 2009
and shall remain available through September 30, 2010;
``(7) $22,874,000,000 for fiscal year 2010, and, there are
hereby appropriated $14,000,000,000 for fiscal year 2010,
which shall become available for obligation on July 1, 2010
and shall remain available through September 30, 2011;
``(8) $24,635,000,000 or the sum of the maximum amounts
that all States may receive under subsection (a)(2),
whichever is lower, for fiscal year 2011, and, there are
hereby appropriated $15,761,000,000 for fiscal year 2011,
which shall become available for obligation on July 1, 2011
and shall remain available through September 30, 2012, except
that if the sum of the maximum amounts that all States may
receive under subsection (a)(2) is less than $24,635,000,000,
then the amount appropriated in this paragraph shall be
reduced by the difference between $24,635,000,000 and the sum
of the maximum amounts that all States may receive under
subsection (a)(2);
``(9) $25,329,000,000 or the sum of the maximum amounts
that all States may receive under subsection (a)(2),
whichever is lower, for fiscal year 2012, and, there are
hereby appropriated $16,455,000,000 for fiscal year 2012,
which shall become available for obligation on July 1, 2012
and shall remain available through September 30, 2013, except
that if the sum of the maximum amounts that all States may
receive under subsection (a)(2) is less than $25,329,000,000,
then the amount appropriated in this paragraph shall be
reduced by the difference between $25,329,000,000 and the sum
of the maximum amounts that all States may receive under
subsection (a)(2);
``(10) $26,005,000,000 or the sum of the maximum amounts
that all States may receive under subsection (a)(2),
whichever is lower, for fiscal year 2013, and, there are
hereby appropriated $17,131,000,000 for fiscal year 2013,
which shall become available for obligation on July 1, 2013
and shall remain available through September 30, 2014, except
that if the sum of the maximum amounts that all States may
receive under subsection (a)(2) is less than $26,005,000,000,
then the amount appropriated in this paragraph shall be
reduced by the difference between $26,005,000,000 and the sum
of the maximum amounts that all States may receive under
subsection (a)(2); and
``(11) such sums as may be necessary for fiscal year 2014
and each succeeding fiscal year.''.
(b) Exception to the Local Maintenance of Effort
Requirements.--Section 613(a)(2)(B) of the Individuals with
Disabilities Education Act (20 U.S.C. 1413(a)(2)(B)) is
amended to read as follows:
``(B) Exception.--Notwithstanding the restriction in
subparagraph (A)(iii), a local educational agency may reduce
the level of expenditures, for 1 fiscal year at a time, if--
``(i) the State educational agency determines, and the
Secretary agrees, that the local educational agency is in
compliance with the requirements of this part during that
fiscal year (or, if appropriate, the preceding fiscal year);
and
``(ii) such reduction is--
``(I) attributable to the voluntary departure, by
retirement or otherwise, or departure for just cause, of
special education personnel;
``(II) attributable to a decrease in the enrollment of
children with disabilities;
``(III) attributable to the termination of the obligation
of the agency, consistent with this part, to provide a
program of special education to a particular child with a
disability that is an exceptionally costly program, as
determined by the State educational agency, because the
child--
``(aa) has left the jurisdiction of the agency;
``(bb) has reached the age at which the obligation of the
agency to provide a free appropriate public education to the
child has terminated; or
``(cc) no longer needs such program of special education;
``(IV) attributable to the termination of costly
expenditures for long-term purchases,
[[Page S5489]]
such as the acquisition of equipment or the construction of
school facilities; or
``(V) equivalent to the amount of Federal funding the local
educational agency receives under this part for a fiscal year
that exceeds the amount the agency received under this part
for the preceding fiscal year, but only if these reduced
funds are used for any activity that may be funded under the
Elementary and Secondary Education Act of 1965 (20 U.S.C.
6301 et seq.).''.
(c) Repeal.--Section 613(a)(2) of the Individuals with
Disabilities Education Act (20 U.S.C. 1413(a)(2)) is further
amended--
(1) by striking subparagraph (C);
(2) by redesignating subparagraph (D) as subparagraph (C);
and
(3) in subparagraph (A)(iii), by striking ``paragraphs (B)
and (C)'' and inserting ``paragraph (B)''.
____
Mr. HARKIN. Mr. President, today, Senator Hagel and I, and others
introduce ``The IDEA Full Funding Act of 2003.'' This bill will provide
increased mandatory funding for the Individuals with Disabilities
Education Act, IDEA, and meet the Federal Government's commitment to
pay 40 percent of the average per pupil expenditures. These additional
funds will ensure that every child with a disability gets a free,
appropriate public education.
In 1975, when the IDEA was passed in the House and Senate, there was
an agreement made by negotiators based on the understanding that the
Federal Government's goal would be to provide 40 percent of the average
per pupil expenditures in each local education area. There was no time
frame placed on this goal, but since that time it has been understood
that ``full funding'' for IDEA means reaching that 40 percent goal.
For the past 28 years, we have put additional resources into IDEA but
we have not come close to full funding. This bill will put our money
where our mouth is and say that the federal government will be full
partners with states and local governments in meeting the needs of
children with disabilities.
This bill fully funds the IDEA. It appropriates funds for the next 10
years, gradually increasing the percentage of funds which are mandatory
and increasing the amounts so that in year 8 we are at the level
projected to equal 40 percent of the average per pupil expenditure.
While we have seen welcome increases in IDEA spending over the past few
years, past year increases do not guarantee future increases. This bill
guarantees full funding, phased in over 8 years.
This bill does not create a new entitlement program. It provides
advanced appropriations for the next 10 years, but it has a set amount
for each year, not an open-ended figure.
This bill also provides incentive for compliance with the
requirements of IDEA. If all of the IDEA-eligible children are getting
the services that they are entitled to, then local property taxpayers
get relief.
Last year, the Senate passed an amendment to the reauthorization of
the Elementary and Secondary Education Act which would have required
full funding of IDEA. The full funding provision was not in the final
conference report. Prior to that amendment, there have been 22 separate
bills and resolutions in the House and Senate calling for full funding.
This year, the time has come for full funding to make it into law. It
has been 28 years since the Federal Government agreed to pay a share of
IDEA and it is time to meet that goal.
The IDEA has been remarkably successful. In 1975, only \1/5\ of
children with disabilities received a formal education and several
States had laws specifically excluding many children with disabilities,
including those who were blind, deaf, or had mental health needs from
receiving such an education. The most recent data on the number of
children served under IDEA indicates that over 6 million children are
currently benefiting from the law.
Although IDEA has been successful, there is more work to be done.
Every time I speak to school districts in Iowa, they tell me that the
costs of special education are very difficult for them to manage. Some
parents of children with disabilities also complain that their children
are not getting the education promised by IDEA.
This bill will provide significant additional resources. In 2003, we
are funding $17.6 percent of the cost at 8.8 billion dollars. Under our
bill, this number rises steeply to 22 percent of the cost and 10.8
billion dollars in 2004. The increases continue until 2011, when we
reach 40 percent and an expenditure of 24.6 billion. Iowa sees its
funding rise from 96 million in 2003 to 278.3 million in 2011. We are
more than doubling the resources going to special education in Iowa and
elsewhere.
I want to thank Senator Hagel for his ongoing leadership on this
issue and for his work in achieving bipartisan support for this bill. I
also want to thank Senators Kennedy, Jeffords and Dodd for their
longstanding commitment to fully funding IDEA. In addition, I want to
acknowledge all of the co-sponsors of this bill, who are joining me
today in leading the way for Congress to finally pass full funding into
law.
This is a win-win-win bill. With this advance appropriations,
students with disabilities will get the public education they have a
right to, school districts will be able to provide services without
cutting into their general education budgets, and in cases where all
IDEA-eligible children are getting the services they are entitled to,
property taxpayers get relief.
Ms. MIKULSKI. Mr. President, I rise in support of the IDEA Full
Funding Act of 2003. I'm so proud to cosponsor this important
legislation. This bill provides mandatory increases for IDEA funding
each year, so that the Federal Government will be paying its full share
of the cost of special education by 2011. This legislation is long
overdue. I think it's shocking that the President is fighting for tax
breaks for zillionaires while delaying help for those who need it
most--the children with special needs and their parents and teachers.
We must fully fund IDEA to ensure that children with disabilities are
receiving the services they need to succeed with their classmates in
public schools.
In 1975, Congress promised to pay 40 percent of the cost of special
education when it passed the Individuals with Disabilities Education
Act. Yet it has never paid more than 17.5 percent. That means local
districts must make up the difference, either by cutting from other
education programs or by raising taxes. I don't want to force States
and local school districts to forage for funds, cut back on teacher
training, or delay school repairs because the Federal Government has
failed to live up to its commitment to special education. That's why
fully funding IDEA is one of my top priorities.
Everywhere I go in Maryland, I hear about IDEA. I hear about it in
urban, rural, and suburban communities, from Democrats and Republicans,
and from parents and teachers. They tell me that the Federal Government
is not living up to its promise, that special education costs about 18
percent of the average school budget, that schools are suffering, and
the parents are worried.
Parents today are under a lot of stress--sometimes working two jobs
just to make ends meet, trying to find day care for their kids, and
elder care for their own parents. The Federal Government shouldn't add
to their worries by not living up to its obligations. With the Federal
Government not paying its share of special ed these parents have real
questions in their minds: Will my child will have a good teacher? Will
the classes have up-to-date textbooks? Will they be learning what they
need to know?
Parents of disabled children face such a tough burden already. School
should not be one of the many things they have to worry about,
particularly when the laws are already on the books to guarantee their
child a public school education. The bottom line is that the Federal
Government is shortchanging these parents by not paying its share of
special ed costs.
This bill will give local governments the resources they need to
improve education for all children. It will free up money in local
budgets for hiring more teachers, buying new textbooks and technology,
and repairing old school buildings. It will help the teachers who
struggle with teaching the toughest students. It will help students
with disabilities and their families by providing enough funding for
special education programs so parents can have one less thing to worry
about, and students get the opportunities they deserve.
Full funding of IDEA is essential. It will give disabled children a
chance to succeed in school and in life without
[[Page S5490]]
shortchanging other vital education programs. It will give parents
peace of mind about their children's education. Let's pass this bill as
soon as possible.
______
By Mr. GRAHAM of South Carolina:
S. 940. A bill to amend the Immigration and Nationality Act relating
to naturalization through service in the Armed Forces of the United
States; to the Committee on the Judiciary.
Mr. GRAHAM of South Carolina. 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. 940
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 ``Armed Forces Citizenship Act
of 2003''.
SEC. 2. NATURALIZATION THROUGH SERVICE IN THE ARMED FORCES OF
THE UNITED STATES.
(a) Minimum Period of Service Eliminated.--Section 328(a)
of the Immigration and Nationality Act (8 U.S.C. 1439(a)) is
amended by striking ``for a period or periods aggregating
three years,''.
(b) Prohibition on Imposition of Fees Relating to
Naturalization.--Section 328(b) of the Immigration and
Nationality Act (8 U.S.C. 1439(b)) is amended--
(1) in paragraph (3)--
(A) by striking ``honorable. The'' and inserting
``honorable (the''; and
(B) by striking ``discharge.'' and inserting ``discharge);
and''; and
(2) by adding at the end the following:
``(4) notwithstanding any other provision of law, no fee
shall be charged or collected from the applicant for filing
an application under subsection (a) or for the issuance of a
certificate of naturalization upon citizenship being granted
to the applicant, and no clerk of any State court shall
charge or collect any fee for such services unless the laws
of the State require such charge to be made, in which case
nothing more than the portion of the fee required to be paid
to the State shall be charged or collected.''.
(c) Conduct of Naturalization Proceedings Overseas for
Members of the Armed Forces of the United States.--
Notwithstanding any other provision of law, the Secretary of
Homeland Security, the Secretary of State, and the Secretary
of Defense shall ensure that any applications, interviews,
filings, oaths, ceremonies, or other proceedings under title
III of the Immigration and Nationality Act (8 U.S.C. 1401 et
seq.) relating to naturalization of members of the Armed
Forces are available through United States embassies,
consulates, and as practicable, United States military
installations overseas.
(d) Revocation of Citizenship for Separation from Military
Service Under Other Than Honorable Conditions.--Section 328
of the Immigration and Nationality Act (8 U.S.C. 1439) is
amended by adding at the end the following:
``(f) Citizenship granted pursuant to this section may be
revoked in accordance with section 340 if at any time
subsequent to naturalization the person is separated from the
military, air, or naval forces under other than honorable
conditions, and such ground for revocation shall be in
addition to any other provided by law. The fact that the
naturalized person was separated from the service under other
than honorable conditions shall be proved by a duly
authenticated certification from the executive department
under which the person was serving at the time of
separation.''.
(e) Technical and Conforming Amendment.--Section 328(b)(3)
of the Immigration and Nationality Act (8 U.S.C. 1439(b)(3))
is amended by striking ``Attorney General'' and inserting
``Secretary of Homeland Security''.
______
By Mr. BROWNBACK (for himself and Mr. Nelson of Nebraska):
S. 942. A bill to amend title XVIII of the Social Security Act to
provide for improvements in access to services in rural hospitals and
critical access hospitals; to the Committee on Finance.
Mr. BROWNBACK. Mr. President, rural America has been depopulating at
an alarming rate. The same is true for the rural counties in Kansas. In
fact, over half of the counties in the State are losing population.
We are going to stop that trend.
Senators, like Ben Nelson and I, who grew up in small towns know a
little secret. Rural America is a great place to live. However, for
rural towns to compete with urban areas for talented young people, they
have to be able to provide the basics--like high quality health care.
For the hospitals represented here today to be able to provide high
quality health care for rural America, they have to be able to count on
Medicare for fair reimbursement. For quite a few hospitals in Kansas,
70 and 80 percent of their caseload is paid for by Medicare. For the
communities these hospitals serve, fair Medicare reimbursement is
vitally important.
Unfortunately, much of the regulation that comes out of CMS is based
on economics of scale. The actuaries and accountants in Baltimore
produce payment systems and formulas for reimbursement. The assumption
is that the hospitals that are the most efficient will be the most
successful. Unfortunately, efficiency is often a product of volume. If
you treat 5,000 stroke patients in a year, you are probably going to be
more efficient than if you treat only 5.
Efficiency is a laudable goal, but it shouldn't be the only goal of
Medicare. Particularly, when it comes to providing health care in a
hospital with fewer than 50 beds.
That is why Senator Nelson and I are introducing the ``Rural
Community Hospital Assistance Act of 2003.'' Rather than rely on
formulas calculated by CMS bureaucrats in Baltimore, the hospitals
covered under our bill will rely on cost-based reimbursement. In
addition, the bill recognizes that these hospitals don't have the
volume to cover bad debt from patients and to keep up with growing
demands for new technology and infrastructure.
This bill will create a new Rural Community Hospital designation
within Medicare for rural hospitals with fewer than 50 beds.
These hospitals will be eligible for cost-based reimbursement for
impatient and outpatient services; a technology and infrastructure add
on; cost based reimbursement for home health services where the
provider is isolated; cost based reimbursement for ambulance services;
and the restoration of Medicare bad debt payments at 100 percent.
And the cost of the bill, which we believe with stabilize health care
in rural America, is less than \1/2\ of 1 percent of annual Medicare
expenditures.
This is an important bill for rural hospitals; and I don't think you
can overestimate the importance of rural hospitals to the communities
they serve.
Mr. NELSON of Nebraska. Mr. President, today I join Senator Brownback
in introducing the Rural Community Hospital Assistance Act. This
legislation is intended to ensure the future of small rural hospitals
by restructuring the way they are reimbursed for Medicare services by
basing the reimbursements on actual costs instead of the current pre-
set cost structure.
Current law allows for very small hospitals--designated Critical
Access Hospitals, CAH, to receive cost-based Medicare reimbursements.
To qualify as a CAH the facility must have no more than 15 acute care
beds.
In rural communities, hospital facilities that are slightly larger
than the 15 bed limit share with Critical Access Hospitals the same
economic conditions, the same treatment challenges, the same disparity
in coverage area but do not share the same reimbursement arrangement.
These rural hospitals have to compete with larger urban-based hospitals
that can perform the same services at drastically reduced costs. They
are also discouraged from investing in technology and other methods to
improve the quality of care in their communities because those
investments are not supported by Medicare reimbursement procedures.
The legislation would provide cost-based Medicare reimbursement by
creating a new ``rural'' designation under the Medicare reimbursement
system. This new designation would benefit seven Nebraska hospitals.
Hospitals in McCook, Alliance, Broken Bow, Beatrice, Columbus, Holdrege
and Lexington would fall under this new designation, and would have
similar benefits provided to nearly sixty other Nebraska hospitals
classified under the CAH system.
The legislation would also improve the hospitals with critical access
status. Nearly sixty existing CAH facilities in Nebraska already
receive cost-based reimbursements for inpatient and outpatient
services. The legislation would further assist these existing CAH
facilities by allowing them a return on equity for technology and
infrastructure investments and by extending the cost-based
reimbursement to certain post-acute services.
Rural hospitals cannot continue to provide these services without
having Medicare cover the costs. If something
[[Page S5491]]
is not done, the larger hospitals may be forced to cut back on the
number of beds they keep--and the number of people they care for, and
others may be forced to close their doors. These hospitals provide
jobs, good wages, health care and economic development opportunity for
these communities. Without access to these hospitals, these communities
would not survive. The Rural Community Hospital Assistance Act will
ensure that the community has access to high quality health care that
is affordable to the patient and the provider.
______
By Mr. JEFFORDS (for himself, Mr. Durbin, Mr. Reid, and Mr.
Kerry):
S. 944. A bill to enhance national security, environmental quality,
and economic stability by increasing the production of clean,
domestically produced renewable energy as a fuel source for the
national electric system; to the Committee on Energy and Natural
Resources.
Mr. JEFFORDS. Mr. President, I rise today to introduce, along with
Senators Durbin, Reid, and Kerry, the ``Renewable Energy Investment Act
of 2003.''
This legislation will guarantee that by the year 2020, twenty percent
of our electricity will be produced from renewable energy resources.
These resources include wind, biomass, solar, ocean, geothermal and
landfill gas.
Again and again, I have heard members come to this floor and say how
important renewable energy is to our environment, to our national
security, and to our domestic economic stability. I agree. But if we
want to achieve these great benefits, we must, as they say, ``put our
money where our mouth is.'' It is time to pass realistic, achievable
standards to guarantee that renewable energy is produced.
The Renewable Energy Investment Act of 2003 is a very important step
in that direction. It will create a renewable portfolio standard or
``RPS'' under which utilities and others who supply electricity to
retail consumers will be required to ensure that by the year 2020,
twenty percent of our domestic electricity is generated from renewable
energy sources. The RPS in this legislation provides a flexible,
market-driven system of tradeable credits by which utilities can
readily achieve these renewable energy requirements.
Why twenty percent by 2020? Because the U.S. Department of Energy,
through its Energy Information Administration, has repeatedly indicated
that requiring that twenty percent of our electricity come from
renewable energy by the year 2020 will actually lower overall consumer
energy costs, while at the same time achieving tremendous environmental
benefits.
According to the most recent estimates derived from the Department of
Energy, consumer electricity prices under a twenty percent renewable
portfolio standard would be largely the same as without one. According
to the Department of Energy, retail electricity costs by the year 2020
without an RPS would be 6.5 cents per kilowatt hour. If a 20 percent
RPS is in effect, retail electricity costs would be approximately 6.7
cents per kilowatt hour.
However, the Department of Energy studies also indicate that because
an RPS creates a more diverse and competitive market for energy supply,
overall domestic consumer energy costs will actually decrease by almost
nine percent.
Equally important, shifting to greater renewable energy production
will have dramatic impacts on human health and the environment. The
Department of Energy has found that, as demand for energy grows,
without changes to Federal law U.S. carbon emissions will increase
forty seven percent above the 1990 level by 2020. However, with a
twenty percent renewables standard, U.S. carbon dioxide emissions will
decrease by more than eighteen percent by 2020.
Electricity production, primarily from burning coal, is the source of
an estimated sixty six percent of sulfur oxide, SOx,
emissions. These chemicals are the main cause of acid rain, which kills
rivers and lakes, and damages crops and buildings. Burning fossil fuels
to produce electricity also emits nitrogen oxides, NOx,
which cause health-damaging smog. Ground-level ozone caused by nitrogen
oxide contributes to asthma, bronchitis and other respiratory problems.
Electricity produced from nuclear power, while not responsible for
the emissions associated with burning of fossil fuels, results in
highly toxic, and essentially permanent wastes for which no complete
disposal option currently exists.
Switching to renewable resources virtually eliminates these concerns.
The Renewable Energy Investment Act of 2003 will help reduce emissions
of carbon dioxide, sulfur dioxide, nitrogen dioxide, mercury and
particulate matter, without creation of toxic wastes.
The twenty percent RPS established in this legislation will also
create thousands of new, high quality jobs and bring significant new
investment to rural communities. It will create an estimated $80
million in new capitol investment, and result in more than $5 billion
in new property tax revenues.
It will bring increased diversity to our energy sector, creating
greater market stability and reducing the price spikes that so often
plague our domestic natural gas markets.
Greater diversity also reduces the vulnerability of our energy
infrastructure to terrorist threats.
In a letter to Congress shortly after the attacks of September 11,
2001, several national security experts endorsed congressional passage
of an RPS. The letter, signed by former CIA director James Woolsey;
former National Security Advisor to President Reagan, Robert McFarlane;
and former Chairman of the Joint Chiefs of Staff, Thomas Moorer, stated
that a strong RPS is an important component of addressing the
significant challenges to America's new energy security.
Rapidly increasing the production of renewable energy is vital to
America's future. We must be willing to take the steps necessary to
make that happen. The Renewable Energy Investment Act of 2003 is an
essential part of that goal and I urge my colleagues to join with me in
supporting this important legislation.
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. 944
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 ``Renewable Energy Investment
Act of 2003.''
SEC. 2. DEFINITIONS.
In this Act:
(1) Biomass.--
(A) In general.--The term ``biomass'' means--
(i) organic material from a plant that is planted for the
purpose of being used to produce energy;
(ii) nonhazardous, cellulosic or agricultural waste
material that is segregated from other waste materials and is
derived from--
(I) a forest-related resource, including--
(aa) mill and harvesting residue;
(bb) precommercial thinnings;
(cc) slash; and
(dd) brush;
(II) an agricultural resource, including--
(aa) orchard tree crops;
(bb) vineyards;
(cc) grains;
(dd) legumes;
(ee) sugar; and
(ff) other crop byproducts or residues; or
(III) miscellaneous waste such as--
(aa) waste pallet;
(bb) crate; and
(cc) landscape or right-of-way tree trimmings; and
(iii) animal waste that is converted to a fuel rather than
directly combusted, the residue of which is converted to a
biological fertilizer, oil, or activated carbon.
(B) Exclusions.--The term ``biomass'' does not include--
(i) incineration of municipal solid waste;
(ii) recyclable postconsumer waste paper;
(iii) painted, treated, or pressurized wood;
(iv) wood contaminated with plastic or metal; or
(v) tires.
(2) Distributed generation.--The term ``distributed
generation'' means reduced electricity consumption from the
electric grid due to use by a customer of renewable energy
generated at a customer site.
(3) Incremental hydropower.--The term ``incremental
hydropower'' means additional generation achieved from
increased efficiency after January 1, 2003, at a
hydroelectric dam that was placed in service before January
1, 2003.
(4) Landfill gas.--The term ``landfill gas'' means gas
generated from the decomposition of household solid waste,
commercial solid waste, or industrial solid waste disposed of
in a municipal solid waste landfill unit (as
[[Page S5492]]
those terms are defined in regulations promulgated under
subtitle D of the Solid Waste Disposal Act (42 U.S.C. 6941 et
seq.)).
(5) Renewable energy.--The term ``renewable energy'' means
electricity generated from--
(A) a renewable energy source; or
(B) hydrogen that is produced from a renewable energy
source.
(6) Renewable energy source.--The term ``renewable energy
source'' means--
(A) wind;
(B) ocean waves;
(C) biomass;
(D) solar sources;
(E) landfill gas;
(F) incremental hydropower; or
(G) a geothermal source.
(7) Retail electric supplier.--The term ``retail electric
supplier'', with respect to any calendar year, means a person
or entity that--
(A) sells retail electricity to consumers; and
(B) sold not less than 500,000 megawatt-hours of electric
energy to consumers for purposes other than resale during the
preceding calendar year.
(8) Secretary.--The term ``Secretary'' means the Secretary
of Energy.
SEC. 3. RENEWABLE ENERGY GENERATION STANDARDS.
(a) Renewable Energy Credits.--
(1) In general.--For each calendar year beginning in
calendar year 2006, each retail electric supplier shall
submit to the Secretary, not later than April 30 of each
year, renewable energy credits in an amount equal to the
required annual percentage of the retail electric supplier's
total amount of kilowatt-hours of nonhydropower electricity
sold to consumers during the previous calendar year.
(2) Carryover of renewable energy credits.--A renewable
energy credit for any year that is not used to satisfy the
minimum requirement for that year may be carried over for use
within the next 2 years.
(b) Required Annual Percentage.--Of the total amount of
nonhydropower electricity sold by each retail electric
supplier during a calendar year, the amount generated by
renewable energy sources shall be not less than the
percentage specified below:
Calendar year: Percentage of Renewable energy each year:
2006-2009......................................................5 ....
2010-2014.....................................................10 ....
2015-2019.....................................................15 ....
2020 and subsequent years.....................................20.....
(c) Submission of Renewable Energy Credits.--
(1) In general.--To meet the requirements under subsection
(a), a retail electric supplier shall submit to the
Secretary--
(A) renewable energy credits issued to the retail electric
supplier under subsection (e);
(B) renewable energy credits obtained by purchase or
exchange under subsection (f);
(C) renewable energy credits purchased from the United
States under subsection (g); or
(D) any combination of renewable energy credits obtained
under subsections (e), (f), and (g).
(2) No double counting.--A renewable energy credit may be
counted toward compliance with subsection (a) only once.
(d) Renewable Energy Credit Program.--Not later than 1 year
after the date of enactment of this Act, the Secretary shall
establish a program to issue, monitor the sale or exchange
of, and track renewable energy credits.
(e) Issuance of Renewable Energy Credits.--
(1) Application.--
(A) In general.--Under the program established under
subsection (d), an entity that generates electric energy
through the use of a renewable energy resource may apply to
the Secretary for the issuance of renewable energy credits.
(B) Contents.--An application under subparagraph (A) shall
indicate--
(i) the type of renewable energy resource used to produce
the electric energy;
(ii) the State in which the electric energy was produced;
and
(iii) any other information that the Secretary determines
to be appropriate.
(2) Issuances.--
(A) In general.--Except as provided in subparagraph (C),
the Secretary shall issue to an entity applying under this
subsection 1 renewable energy credit for each kilowatt-hour
of renewable energy generated in any State from the date of
enactment of this Act and in each subsequent calendar year.
(B) Vesting.--A renewable energy credit will vest with the
owner of the system or facility that generates the renewable
energy unless the owner explicitly transfers the renewable
energy credit.
(C) Amount.--The Secretary shall issue 3 renewable energy
credits for each kilowatt-hour of distributed generation.
(3) Eligibility.--
(A) In general.--To be eligible for a renewable energy
credit, the unit of electricity generated through the use of
a renewable energy resource shall be sold for retail
consumption or used by the generator.
(B) Energy generated from a combination of sources.--If
both a renewable energy resource and a nonrenewable energy
resource are used to generate the electric energy, the
Secretary shall issue renewable energy credits based on the
proportion of the renewable energy resource used.
(C) Identification of type and date.--The Secretary shall
identify renewable energy credits by the type and date of
generation.
(4) Sale under contract under purpa.--In a case in which a
generator sells electric energy generated through the use of
a renewable energy resource to a retail electric supplier
under a contract subject to section 210 of the Public
Utilities Regulatory Policies Act of 1978 (16 U.S.C. 824a-3),
the retail electric supplier shall be treated as the
generator of the electric energy for the purposes of this Act
for the duration of the contract.
(f) Sale or Exchange of Renwable Energy Credits.--
(1) In general.--A renewable energy credit may be sold or
exchanged by the entity issued the renewable energy credit or
by any other entity that acquires the renewable energy
credit.
(2) Manner of sale.--A renewable energy credit may be sold
or exchanged in any manner not in conflict with existing law,
including on the spot market or by contractual arrangements
of any duration.
(g) Purchase From the United States.--
(1) In general.--The Secretary shall offer renewable energy
credits for sale at the lesser of 3 cents per kilowatt-hour
or 110 percent of the average market value of renewable
energy credits for the applicable compliance period.
(2) Adjustment for inflation.--On January 1 of each year
following calendar year 2006, the Secretary shall adjust for
inflation the price charged per renewable energy credit for
the calendar year.
(h) State Programs.--Nothing in this section precludes any
State from requiring additional renewable energy generation
in the State under any renewable energy program conducted by
the State not in conflict with this Act.
(i) Consumer Allocation.--
(1) Rates.--The rates charged to classes of consumers by a
retail electric supplier shall reflect a proportional
percentage of the cost of generating or acquiring the
required annual percentage of renewable energy under
subsection (a).
(2) Representations to customers.--A retail electric
supplier shall not represent to any customer or prospective
customer that any product contains more than the percentage
of eligible resources if the additional amount of eligible
resources is being used to satisfy the renewable generation
requirement under subsection (a).
(j) Enforcement.--
(1) In general.--A retail electric supplier that does not
submit renewable energy credits as required under subsection
(a) shall be liable for the payment of a civil penalty.
(2) Amount.--The amount of a civil penalty under paragraph
(1) shall be calculated on the basis of the number of
renewable energy credits not submitted, multiplied by the
lesser of 4.5 cents or 300 percent of the average market
value of renewable energy credits for the compliance period.
(k) Information Collection.--The Secretary may collect the
information necessary to verify and audit--
(1) the annual electric energy generation and renewable
energy generation of any entity applying for renewable energy
credits under this section;
(2) the validity of renewable energy credits submitted by a
retail electric supplier to the Secretary; and
(3) the quantity of electricity sales of all retail
electric suppliers.
(l) Voluntary Participation.--The Secretary may issue a
renewable energy credit under subsection (e) to any entity
not subject to the requirements of this Act only if the
entity applying for the renewable energy credit meets the
terms and conditions of this Act to the same extent as
entities subject to this Act.
SEC. 4. STATE RENEWABLE ENERGY GRANT PROGRAM.
(a) Distribution of Amounts.--The Secretary shall
distribute amounts received from sales under subsection 3(h)
and from amounts received under subsection 3(k) to States to
be used for the purposes of this section.
(b) Program.--
(1) In general.--Not later than 1 year after the date of
enactment of this Act, the Secretary shall establish a
program to promote State renewable energy production and use.
(2) Use of funds.--The Secretary shall make funds available
under this section to State energy agencies for grant
programs for--
(A) renewable energy research and development;
(B) loan guarantees to encourage construction of renewable
energy facilities;
(C) consumer rebate or other programs to offset costs of
small residential or small commercial renewable energy
systems including solar hot water; or
(D) promotion of distributed generation.
(c) Preference.--In allocating funds under the program, the
Secretary shall give preference to--
(1) States that have a disproportionately small share of
economically sustainable renewable energy generation
capacity; and
(2) State grant programs that are most likely to stimulate
or enhance innovative renewable energy technologies.
______
By Mr. McCAIN:
S. 945. A bill to amend title 37, United States Code, to improve the
process for adjusting the rates of pay for members of the uniformed
services; to the Committee on Armed Services.
[[Page S5493]]
Mr. McCAIN. Mr. President, I am proud to sponsor the Military Pay
Comparability Act of 2003. In 1999, the Committee on Armed Services
passed landmark legislation providing significant benefits to the
entire Total Force. I believe we must improve upon this legislation so
that we not only eliminate ``pay comparability gap,'' but ensure that
we do not recreate one in the future.
Under the 1999 legislation, military raises will exceed growth in the
ECI by one-half percent per year through fiscal year 2006. However,
starting in 2007, military raises will revert to being capped one-half
percentage point below the ECI.
As a former ranking member and long-time member on the Personnel
Subcommittee when Senator John Glenn was the chairman, my experience
with capping military raises below ECI during the last three decades
shows that such caps inevitably lead to significant retention problems
among second-term and career service members.
Those retention problems cost our Nation more in the long run in
terms of lost military experience, decreased readiness, and increased
training costs. Since military pay was last comparable with private
sector pay in 1982, military pay raises have lagged a cumulative 6.4
percent behind private sector wage growth--although recent efforts of
the executive and legislative branches have reduced the gap
significantly from its peak of 13.5 percent in 1999. Our efforts in
1999 increased pay raises, reformed the pay tables, took nearly 12,000
service members off of food stamps, and established a military Thrift
Savings Plan.
We have to improve upon the 1999 law to ensure future raises track to
civilian pay growth so we don't fall back into pay caps that will get
us back in the negative retention/readiness cycle. Subsequent raises
after 2006 must sustain full comparability with increases in the ECI. A
key principal of the all volunteer force, AVF, is that military pay
raises must match private sector pay growth, as measured by ECI. Our
action in this area will send a strong message of support to our
service men and women and their families that will continue to promote
high morale, better quality-of-life, and a more ready military force.
I ask unanimous consent that the text of the legislation be printed
in the Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 945
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. REVISED ANNUAL PAY ADJUSTMENT PROCESS.
(a) Requirement for Annual Adjustment.--Subsection (a) of
section 1009 of title 37, United States Code, is amended to
read as follows:
``(a) Requirement for Annual Adjustment.--Effective on
January 1 of each year, the rates of basic pay for members of
the uniformed services under section 203(a) of this title
shall be increased under this section.''.
(b) Effectiveness of Adjustment.--Subsection (b) of such
section is amended by striking ``shall--'' and all that
follows and inserting ``shall have the force and effect of
law.''.
(c) Percentage of Adjustment.--Subsection (c) of such
section is amended to read as follow:
``(c) Equal Percentage Increase for All Members.--(1)
Subject to subsection (d), an adjustment made under this
section in a year shall provide all eligible members with an
increase in the monthly basic pay that is the percentage
(rounded to the nearest one-tenth of 1 percent) by which the
ECI for the base quarter of the year before the preceding
year exceeds the ECI for the base quarter of the second year
before the preceding calendar year (if at all).
``(2) Notwithstanding paragraph (1), but subject to
subsection (d), the percentage of the adjustment taking
effect under this section during each of fiscal years 2004,
2005, and 2006, shall be one-half of 1 percentage point
higher than the percentage that would otherwise be applicable
under such paragraph.''.
(d) Publication of Adjusted Rates.--Subsection (e) of such
section is amended--
(1) by striking ``(e) Notice of Allocations.--'' and
inserting ``(e) Notification and Publication Requirements.--
(1)''; and
(2) by adding at the end the following new paragraph:
``(2) The rates of basic pay that take effect under this
section shall be printed in the Federal Register and the Code
of Federal Regulations.''.
(e) Presidential Determination of Need for Alternative Pay
Adjustment.--Such section is further amended--
(1) by redesignating subsection (g) as subsection (h); and
(2) by inserting after subsection (f) the following new
subsection (g):
``(g) Presidential Determination of Need for Alternative
Pay Adjustment.--(1) If, because of national emergency or
serious economic conditions affecting the general welfare,
the President considers the pay adjustment which would
otherwise be required by this section in any year to be
inappropriate, the President shall prepare and transmit to
Congress before September 1 of the preceding year a plan for
such alternative pay adjustments as the President considers
appropriate, together with the reasons therefor.
``(2) In evaluating an economic condition affecting the
general welfare under this subsection, the President shall
consider pertinent economic measures including the Indexes of
Leading Economic Indicators, the Gross National Product, the
unemployment rate, the budget deficit, the Consumer Price
Index, the Producer Price Index, the Employment Cost Index,
and the Implicit Price Deflator for Personal Consumption
Expenditures.
``(3) The President shall include in the plan submitted to
Congress under paragraph (1) an assessment of the impact that
the alternative pay adjustments proposed in the plan would
have on the Government's ability to recruit and retain well-
qualified persons for the uniformed services.''.
(f) Definitions.--Such section, as amended by subsection
(e), is further amended by adding at the end the following:
``(i) Definitions.--In this section:
``(1) The term `ECI' means the Employment Cost Index (wages
and salaries, private industry workers) published quarterly
by the Bureau of Labor Statistics.
``(2) The term `base quarter' for any year is the 3-month
period ending on September 30 of such year.''.
______
By Mr. LEAHY (for himself, Mr. Grassley, Mr. Durbin, Mr.
Feingold, Mr. Kohl, and Mr. Schumer):
S. 946. A bill to enhance competition for prescription drugs by
increasing the ability of the Department of Justice and Federal Trade
Commission to enforce existing antitrust laws regarding brand name
drugs and generic drugs; to the Committee on the Judiciary.
Mr. LEAHY. Mr. President, last November, the Drug Competition Act
passed the Senate by unanimous consent. This morning, I am proud to
join Senator Grassley, along with Senators Durbin, Feingold, Kohl and
Schumer in re-introducing this important bill, I hope that in this
Congress it is actually enacted into law. Prescription drug prices are
rapidly increasing, and are a source of considerable concern to many
Americans, especially senior citizens and families. Generic drug prices
can be as much as 80 percent lower than the comparable brand name
version.
While the Drug Competition Act is small in terms of length, it is
large in terms of impact. It will ensure that law enforcement agencies
can take quick and decisive action against companies that are driven
more by greed than by good sense. It gives the Federal Trade Commission
and the Justice Department access to information about secret deals
between drug companies that keep generic drugs off the market. This is
a practice that hurts American families, particularly senior citizens,
by denying them access to low-cost generic drugs, and further inflating
medical costs.
Last fall, the Federal Trade Commission released a comprehensive
report on barriers the entry of generic drugs into the pharmaceutical
marketplace. The FTC had two recommendations to improve the current
situation and to close the loopholes in the law that allow drug
manufacturers to manipulate the timing of generics' introduction to the
market. One of those recommendations was simply to enact our bill, as
the most effective solution to the problem of ``sweetheart'' deals
between brand name and generic drug manufacturers that keep generic
drugs off the market, thus depriving consumers of the benefits of
quality drugs at lower prices. In short, this bill enjoys the
unqualified endorsement of the current FTC, which follows on the
support by the Clinton Administration's FTC during the initial stages
of our formulation of this bill. We can all have every confidence in
the common sense approach that our bill takes to ensuring that our law
enforcement agencies have the information they need to take quick
action, if necessary, to protect consumers from drug companies that
abuse the law.
Under current law, the first generic manufacturer that gets
permission to sell a generic drug before the patent on the brand-name
drug expires, enjoys protection from competition for 180
[[Page S5494]]
days--a headstart on other generic companies. That was a good idea--but
the unfortunate loophole exploited by a few is that secret deals can be
made that allow the manufacturer of the generic drug to claim the 180-
day grace period--to block other generic drugs from entering the
market--while, at the same time, getting paid by the brand-name
manufacturer not to sell the generic drug.
Our legislation closes this loophole for those who want to cheat the
public, but keeps the system the same for companies engaged in true
competition. I think it is important for Congress not to overreact and
throw out the good with the bad. Most generic companies want to take
advantage of this 180-day provision and deliver quality generic drugs
at much lower costs for consumers. We should not eliminate the
incentive for them. Instead, we should let the FTC and Justice look at
every deal that could lead to abuse, so that only the deals that are
consistent with the intent of that law will be allowed to stand. The
Drug Competition Act accomplishes precisely that goal, and helps ensure
effective and timely access to generic pharmaceuticals that can lower
the cost of prescription drugs for seniors, for families, and for all
of us.
I regret that some in the Senate stalled action on this worthwhile
measure until very late in the last Congress and that the House chose
not to act at all, and I hope that the growing need for more cost-
effective health care solutions will serve as a catalyst for quick
action on this needed legislation.
Mr. GRASSLEY. Mr. President, I am pleased to join Senator Leahy today
in introducing the Drug Competition Act of 2003. This bill will help
Federal regulators ensure that there is full and unfettered access to
competition for prescription drugs under the law. As the past Chairman
of the Special Committee on Aging and now as the Chairman of the
Finance Committee, I want to make sure that American consumers--
especially our seniors--are able to get the life-saving drugs they need
in a competitive manner.
Our patent laws provide drug companies with incentives to invest in
research and development of new drugs. But the law also provides that
generic drug companies have the ability to get their own drugs on the
market so that there can be price competition and lower prices for
prescription drugs. We have a legal system in place that provides for
such a balance--the Hatch-Waxman law. Ultimately, we want consumers and
seniors to have more choices and to get drugs at lower prices.
So, I was concerned when I heard reports that the Federal Trade
Commission had brought enforcement actions against brand-name and
generic drug manufacturers that had entered into anti-competitive
agreements, resulting in the delay of the introduction of lower priced
drugs. This bill targets that problem.
Under the Hatch-Waxman Act, manufacturers of generic drugs are
encouraged to challenge weak or invalid patents on brand-name drugs so
consumers can benefit from lower generic drug prices. Current law gives
temporary protection from competition to the first generic drug
manufacturer that gets exclusive permission to sell a generic drug
before the patent on the brand-name drug expires. This gives the
generic firm a 180-day head start on other generic companies.
However, the FTC discovered that some companies were exploiting this
law by entering into secret deals, which allowed the generic drug
makers to claim the 180-day grace period and to block other generic
drugs from entering the market, while at the same time getting paid by
the brand-name manufacturer for withholding sales of the generic
version of the drug. This meant that consumers continued to pay high
prices for drugs, rather than benefiting from more competitive and
lower prices. So the FTC brought enforcement actions against these
companies.
In addition, the FTC conducted a comprehensive review of agreements
that impacted the 180-day exclusivity period. The FTC found that there
are competition problems with some of these agreements that potentially
delayed generic drug entry into the market. The FTC recommended:
Given this history, we believe that notification of such
agreements to the Federal Trade Commission and the U.S.
Department of Justice is warranted. We support the Drug
Competition Act of 2001, S. 754, introduced by Senator Leahy,
as reported by the Committee on the Judiciary.
The Drug Competition Act is a simple solution to the 180-day
exclusivity problems that the FTC has identified. The bill would
require drug companies that enter agreements relating to the 180-day
period to file those documents with the FTC and DOJ. It would impose
sanctions on companies who do not provide timely notification. This
process would facilitate agency review of the agreements to determine
whether they have anti-competitive effects.
The Drug Competition Act will ensure that consumers are not hurt by
secret, anti-competitive contracts, so that consumers can get
competition and lower drug prices as soon as possible. I urge my
colleagues to support this bill.
______
By Mr. SCHUMER:
S. 948. A bill to require prescription drug manufacturers, packers,
and distributors to disclose certain gifts provided in connection with
detailing, promotional, or other marketing activities, and for other
purposes; to the Committee on Health, Education, Labor, and Pensions.
Mr. SCHUMER. Mr. President, I ask unanimous consent that the text of
the bill be printed in the Record.
There being no objection, the text of the bill was ordered to be
printed in the Record, as follows:
S. 948
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 ``Drug Company Gift
Disclosure Act''.
SEC. 2. DISCLOSURE BY PRESCRIPTION DRUG MANUFACTURERS,
PACKERS, AND DISTRIBUTORS OF CERTAIN GIFTS.
Section 503 of the Federal Food, Drug, and Cosmetics Act
(21 U.S.C. 353) is amended by adding at the end the
following:
``(h)(1) Each manufacturer, packer, or distributor of a
drug subject to subsection (b)(1) shall disclose to the
Commissioner--
``(A) not later than June 30, 2004, and each June 30
thereafter, the value, nature, and purpose of any--
``(i) gift provided during the preceding calendar year to
any covered health entity by the manufacturer, packer, or
distributor, or a representative thereof, in connection with
detailing, promotional, or other marketing activities; and
``(ii) cash rebate, discount, or any other financial
consideration provided during the preceding calendar year to
any pharmaceutical benefit manager by the manufacturer,
packer, or distributor, or a representative thereof, in
connection with detailing, promotional, or other marketing
activities; and
``(B) not later than the date that is 6 months after the
date of enactment of this subsection and each June 30
thereafter, the name and address of the individual
responsible for the compliance of the manufacturer, packer,
or distributor with the provisions of this subsection.
``(2) Subject to paragraph (3), the Commissioner shall make
all information disclosed to the Commissioner under paragraph
(1) publicly available, including by posting such information
on the Internet.
``(3) The Commissioner shall keep confidential any
information disclosed to or otherwise obtained by the
Commissioner under this subsection that relates to a trade
secret referred to in section 1905 of title 18, United States
Code. The Commissioner shall provide an opportunity in the
disclosure form required under paragraph (4) for a
manufacturer, packer, or distributor to identify any such
information.
``(4) Each disclosure under this subsection shall be made
in such form and manner as the Commissioner may require.
``(5) Each manufacturer, packer, and distributor described
in paragraph (1) shall be subject to a civil monetary penalty
of not more than $10,000 for each violation of this
subsection. Each unlawful failure to disclose shall
constitute a separate violation. The provisions of paragraphs
(3), (4), and (5) of section 303(g) shall apply to such a
violation in the same manner as such provisions apply to a
violation of a requirement of this Act that relates to
devices.
``(6) For purposes of this subsection:
``(A) The term `covered health entity' includes any
physician, hospital, nursing home, pharmacist, health benefit
plan administrator, or any other person authorized to
prescribe or dispense drugs that are subject to subsection
(b)(1), in the District of Columbia or any State,
commonwealth, possession, or territory of the United States.
``(B) The term `gift' includes any gift, fee, payment,
subsidy, or other economic benefit with a value of $50 or
more, except that such term excludes the following:
``(i) Free samples of drugs subject to subsection (b)(1)
intended to be distributed to patients.
``(ii) The payment of reasonable compensation and
reimbursement of expenses in connection with any bona fide
clinical trial conducted in connection with a research study
[[Page S5495]]
designed to answer specific questions about drugs, devices,
new therapies, or new ways of using known treatments.
``(iii) Any scholarship or other support for medical
students, residents, or fellows selected by a national,
regional, or specialty medical or other professional
association to attend a significant educational, scientific,
or policy-making conference of the association.''.
______
By Mrs. HUTCHISON (for herself and Mrs. Feinstein):
S. 949. A bill to establish a commission to assess the military
facility structure of the United States overseas, and for other
purposes; to the Committee on Armed Services.
Mrs. HUTCHISON. Mr. President, today Senator Feinstein and I are
introducing the ``Overseas Military Facility Structure Review Act'' to
establish a congressional panel to conduct a detailed study of U.S.
military facilities overseas. This bill creates a bipartisan
congressional commission charged with undertaking an objective and
thorough review of our overseas basing structure. The commission will
consider a host of criteria to determine whether our overseas bases are
prepared to meet our needs in the 21st Century. The commission will be
comprised of national security and foreign affairs experts who will
present their findings to the 2005 domestic Base Realignment and
Closure, BRAC, Commission, providing a comprehensive analysis of our
worldwide base and force structure.
We believe it is important to determine our overseas basing
requirements, assess training constraints, and provide recommendations
on future realignments. As a result, we are proposing legislation that
would create a congressional Overseas Basing Commission to review our
basing strategy to ensure that it is consistent with both our short-
and long-term national security objectives. We believe the time is
right to move forward with a more structured approach to reviewing
these overseas bases.
Such a review is timely. The 2005 BRAC is just around the corner and
some in the Pentagon have suggested it could result in the closure of
nearly one out of every four domestic bases. Before we close stateside
military bases, we must first analyze our overseas infrastructure. If
we reduce our overseas presence, we need stateside bases to station
returning troops. It is senseless to close bases on U.S. soil in 2005
only to determine a few years later that we made a costly, irrevocable
mistake. A painful lesson we learned in the last rounds of closures.
Though our military force structure has decreased since the Cold War,
the responsibilities placed upon our service members have significantly
increased. While operational effectiveness is paramount, it would be
irresponsible to build on an inefficient, obsolete overseas base
structure, as we face new strategic threats in the 21st century, taking
valuable dollars needed elsewhere.
____________________