[Congressional Record Volume 149, Number 95 (Wednesday, June 25, 2003)]
[Senate]
[Pages S8562-S8574]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS
By Mr. VOINOVICH:
S. 1326. A bill to establish the position of Assistant Secretary of
Commerce for Manufacturing in the Department of Commerce; to the
Committee on Commerce, Science, and Transportation.
Mr. VOINOVICH. 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. 1326
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. ASSISTANT SECRETARY OF COMMERCE FOR MANUFACTURING.
(a) Establishment.--There is in the Department of Commerce
the position of Assistant Secretary of Commerce for
Manufacturing. The Assistant Secretary shall be appointed by
the President by and with the advice and consent of the
Senate.
(b) Duties.--The Assistant Secretary of Commerce for
Manufacturing shall--
(1) represent and advocate for the interests of the
manufacturing sector;
(2) aid in the development of policies that promote the
expansion of the manufacturing sector;
(3) review policies that may adversely impact the
manufacturing sector; and
(4) perform such other duties as the Secretary of Commerce
shall prescribe.
(c) Reporting Requirements.--The Assistant Secretary of
Commerce for Manufacturing shall submit to Congress an annual
report that contains the following:
(1) An overview of the state of the manufacturing sector in
the United States.
(2) A forecast of the future state of the manufacturing
sector in the United States.
(3) An analysis of current and significant laws,
regulations, and policies that adversely impact the
manufacturing sector in the United States.
(d) Compensation.--Section 5314 of title 5, United States
Code, relating to Level IV of the Executive Schedule, is
amended by inserting before ``and Assistant'' in the item
relating to the Assistant Secretaries of Commerce the
following: ``Assistant Secretary of Commerce for
Manufacturing,''.
______
By Mr. CORZINE:
S. 1327. A bill to reduce unsolicited commercial electronic mail and
to protect children from sexually oriented advertisements; to the
Committee on Commerce, Science, and Transportation.
Mr. CORZINE. Mr. President, today I am introducing legislation, the
Restrict and Eliminate the Delivery of Unsolicited Commercial
Electronic Mail, REDUCE, Spam Act, to curb the influx of unwanted junk
e-mail, or ``spam,'' that is clogging our inboxes and wasting the time
and money of American consumers and businesses.
The flood of spam is growing so fast that it will soon account for
more than half of all e-mail sent in the United States. Spam already
accounts for nearly 40 percent of e-mail traffic, and costs U.S.
businesses $10 billion annually in lost productivity and additional
equipment, software and manpower costs necessary to manage this burden.
Microsoft Inc. estimates that more than 80 percent of the more than 2.5
billion e-mail messages sent each day to Hotmail users are spam. And
data suggests that the problem is only growing.
The problem of spam goes well beyond inconvenience and cost. The
Federal Trade Commission examined a random sample of 1000 spam messages
and, in a report issued on April 30, 2003, found staggering evidence of
fraud. According to the report, 33 percent of the messages sampled
contained false routing information; 22 percent contained false
information in the subject line; 40 percent contained false statements
in the text; and a full 66 percent contained false information of some
sort. Most alarmingly, in the case of spam touting business or
investment opportunities, 96 percent contained some sort of fraudulent
information.
In addition, pornographic spam is a growing problem for parents
trying to shield their children from such images. The FTC report found
that 17 percent of spam advertising pornographic websites included
adult images in the body of the message. This is not acceptable when
our children are using email more and more each day.
Unfortunately, it is very difficult to track down those who send
spam. Often, spammers use multiple e-mail addresses or disguise routing
information to avoid being identified. Finding spammers can take not
just real expertise, but persistence, time, energy and commitment.
To attack the problem of spam, my proposal adopts a two-prong
approach championed by the leading thinker about cyberlaw, Professor
Lawrence Lessig of Stanford Law School. Congresswoman Zoe Lofgren also
has introduced similar legislation in the House of Representatives. The
approach is simple: first, anyone sending bulk unsolicited commercial
e-mail would have to include on each e-mail a simple prefix--either
ADV: or ADV:ADLT. Second, anyone who finds a spam-source who has failed
to properly label unsolicited commercial e-mail would be eligible for a
monetary reward from the FTC.
The first part of this proposal would enable Internet Service
Providers, ISPs, employers and individual users to filter spam from
business and personal email. This would give people the ability to tell
their Internet service provider to block ADV e-mail, or they could
automatically filter such e-mail into a spam folder on their own
computer. This approach would enable far more effective filtering than
currently possible.
The second part of my proposal would require the FTC to pay a bounty
to anyone who tracks down a spammer who has failed properly to label
unsolicited commercial e-mail. The proposal would invite anyone across
the world who uses the Internet to hunt down these law-violating
spammers. The FTC would then fine them and pay a portion of that fine
as a reward to the bounty hunter who found them. The FTC could use the
remainder of the fine to track down and prosecute other spammers.
Creating incentives for private individuals to help track down
spammers is likely to substantially strengthen the enforcement of anti-
spam laws. And with proper enforcement, spammers would soon learn that
neglecting to label spam does not pay. In the end, that will mean that
more spammers will label their spam or give up and stop spamming
altogether. Either way, we will have fixed, or at least started to fix,
the problem.
Professor Lessig is so convinced that this approach will
substantially reduce spam that he has pledged to resign from his job at
Stanford if it does not. While I will not hold him to that warranty, I
do share his enthusiasm about this innovative approach, which is likely
to be much more effective than relying exclusively on government
investigators to identify spammers.
Having said that, I recognize that any domestic anti-spam legislation
potentially is subject to evasion by spammers who relocate overseas in
order to continue sending spam. To respond to that possibility, my bill
also orders the Administration to study the possibility of an
international agreement to reduce spam. This is an issue that affects
us globally, and, in my view, we should consider a coordinated
response.
In addition to these primary provisions, my bill would require
marketers to establish a valid return e-mail address to which an e-mail
recipient can write to ``opt-out'' of receiving further e-mails, and
would prohibit marketers from sending any further e-mails after a
person opts-out. The bill also would prohibit spam with false or
misleading routing information or deceptive subject headings, and would
authorize the Federal Trade Commission to collect civil fines against
marketers who violate these requirements. Furthermore, my proposal
would give Internet Service Providers the right to bring civil actions
against marketers who violate these requirements and disrupt their
networks, and, finally, the proposal would establish criminal penalties
for fraudulent spam.
I know that the Commerce Committee recently ordered reported
legislation to deal with the problem of spam, and I am hopeful that
bill will come before the full Senate before long. When it does, it is
my intention to work with my colleagues to see if some of the concepts
in the REDUCE Spam Act, such as the establishment of individual rewards
for bounty hunters, and a report on a possible international agreement
on spam, can be incorporated into the broader package, to ensure that
any legislation sent to the President will actually be effective in
reducing spam.
I ask unanimous consent that the text of the legislation be printed
in the
[[Page S8563]]
Record at this point, along with a related article by Professor
Lawrence Lessig.
There being no objection, the material was ordered to be printed in
the Record, as follows:
S. 1327
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 ``Restrict and Eliminate the
Delivery of Unsolicited Commercial Electronic Mail or Spam
Act of 2003'' or the ``REDUCE Spam Act of 2003''.
SEC. 2. DEFINITIONS.
In this Act:
(1) Commercial electronic mail message.--
(A) In general.--The term ``commercial electronic mail
message'' means any electronic mail message the primary
purpose of which is the commercial advertisement or promotion
of a commercial product or service (including content on an
Internet website operated for a commercial purpose).
(B) Reference to company or website.--The inclusion of a
reference to a commercial entity or a link to the website of
a commercial entity in an electronic mail message does not,
by itself, cause such message to be treated as a commercial
electronic mail message for purposes of this Act if the
contents or circumstances of the message indicate a primary
purpose other than commercial advertisement or promotion of a
commercial product or service.
(2) Commission.--The term ``Commission'' means the Federal
Trade Commission.
(3) Electronic mail address.--
(A) In general.--The term ``electronic mail address'' means
a destination (commonly expressed as a string of characters)
to which an electronic mail message can be sent or delivered.
(B) Inclusion.--In the case of the Internet, the term
``electronic mail address'' may include an electronic mail
address consisting of a user name or mailbox (commonly
referred to as the ``local part'') and a reference to an
Internet domain (commonly referred to as the ``domain
part'').
(4) FTC act.--The term ``FTC Act'' means the Federal Trade
Commission Act (15 U.S.C. 41 et seq.).
(5) Header information.--The term ``header information''
means the source, destination, and routing information
attached to an electronic mail message, including the
originating domain name and originating electronic mail
address.
(6) Initiate.--The term ``initiate'', when used with
respect to a commercial electronic mail message, means to
originate such message or to procure the transmission of such
message, either directly or through an agent, but shall not
include actions that constitute routine conveyance of such
message by a provider of Internet access service. For
purposes of this Act, more than 1 person may be considered to
have initiated the same commercial electronic mail message.
(7) Internet.--The term ``Internet'' has the meaning given
that term in section 231(e)(3) of the Communications Act of
1934 (47 U.S.C. 231(e)(3)).
(8) Internet access service.--The term ``Internet access
service'' has the meaning given that term in section
231(e)(4) of the Communications Act of 1934 (47 U.S.C.
231(e)(4)).
(9) Pre-existing business relationship.--
(A) In general.--The term ``pre-existing business
relationship'', when used with respect to a commercial
electronic mail message, means that either--
(i) within the 5-year period ending upon receipt of a
commercial electronic mail message, there has been a business
transaction between the sender and the recipient, including a
transaction involving the provision, free of charge, of
information, goods, or services requested by the recipient
and the recipient was, at the time of such transaction or
thereafter, provided a clear and conspicuous notice of an
opportunity not to receive further commercial electronic mail
messages from the sender and has not exercised such
opportunity; or
(ii) the recipient has given the sender permission to
initiate commercial electronic mail messages to the
electronic mail address of the recipient and has not
subsequently revoked such permission.
(B) Applicability.--If a sender operates through separate
lines of business or divisions and holds itself out to the
recipient as that particular line of business or division,
then such line of business or division shall be treated as
the sender for purposes of subparagraph (A).
(10) Recipient.--The term ``recipient'', when used with
respect to a commercial electronic mail message, means the
addressee of such message.
(11) Sender.--The term ``sender'', when used with respect
to a commercial electronic mail message, means the person who
initiates such message. The term ``sender'' does not include
a provider of Internet access service whose role with respect
to electronic mail messages is limited to handling,
transmitting, retransmitting, or relaying such messages.
(12) Unsolicited commercial electronic mail message.--The
term ``unsolicited commercial electronic mail message'' means
any commercial electronic mail message that--
(A) is not a transactional or relationship message; and
(B) is sent to a recipient without the recipient's prior
affirmative or implied consent.
SEC. 3. COMMERCIAL ELECTRONIC MAIL CONTAINING FRAUDULENT
HEADER OR ROUTING INFORMATION.
(a) In General.--Chapter 63 of title 18, United States
Code, is amended by adding at the end the following:
``Sec. 1351. Unsolicited commercial electronic mail
containing fraudulent header information
``(a) Any person who initiates the transmission of any
unsolicited commercial electronic mail message, with
knowledge and intent that the message contains or is
accompanied by header information that is false or materially
misleading, shall be fined or imprisoned for not more than 1
year, or both, under this title.
``(b) For purposes of this section, the terms `unsolicited
commercial electronic mail message' and `header information'
have the meanings given such terms in section 2 of the REDUCE
Spam Act of 2003.''.
(b) Conforming Amendment.--The chapter analysis at the
beginning of chapter 63 of title 18, United States Code, is
amended by adding at the end the following:
``1351. Unsolicited commercial electronic mail.''.
SEC. 4. REQUIREMENTS FOR UNSOLICITED COMMERCIAL ELECTRONIC
MAIL.
(a) Subject Line Requirements.--It shall be unlawful for
any person to initiate the transmission of an unsolicited
commercial electronic mail message to an electronic mail
address within the United States, unless the subject line
includes--
(1) except in the case of an unsolicited commercial
electronic mail message described in paragraph (2)--
(A) an identification that complies with the standards
adopted by the Internet Engineering Task Force for
identification of unsolicited commercial electronic mail
messages; or
(B) in the case of the absence of such standards, ``ADV:''
as the first four characters; or
(2) in the case of an unsolicited commercial electronic
mail message that contains material that may only be viewed,
purchased, rented, leased, or held in possession by an
individual 18 years of age and older--
(A) an identification that complies with the standards
adopted by the Internet Engineering Task Force for
identification of adult-oriented unsolicited commercial
electronic mail messages; or
(B) in the case of the absence of such standards,
``ADV:ADLT'' as the first eight characters.
(b) Return Address Requirements.--
(1) Establishment.--It shall be unlawful for any person to
initiate the transmission of an unsolicited commercial
electronic mail message to an electronic mail address within
the United States, unless the sender establishes a valid
sender-operated return electronic mail address where the
recipient may notify the sender not to send any further
commercial electronic mail messages.
(2) Included statement.--All unsolicited commercial
electronic mail messages subject to this subsection shall
include a statement informing the recipient of the valid
return electronic mail address referred to in paragraph (1).
(3) Prohibition of sending after objection.--Upon
notification or confirmation by a recipient of the
recipient's request not to receive any further unsolicited
commercial electronic mail messages, it shall be unlawful for
a person, or anyone acting on that person's behalf, to send
any unsolicited commercial electronic mail message to that
recipient. Such a request shall be deemed to terminate a pre-
existing business relationship for purposes of determining
whether subsequent messages are unsolicited commercial
electronic mail messages.
(c) Header and Subject Heading Requirements.--
(1) False or misleading header information.--It shall be
unlawful for any person to initiate the transmission of an
unsolicited commercial electronic mail message that such
person knows, or reasonably should know, contains or is
accompanied by header information that is false or materially
misleading.
(2) Deceptive subject headings.--It shall be unlawful for
any person to initiate the transmission of an unsolicited
commercial electronic mail message with a subject heading
that such person knows, or reasonably should know, is likely
to mislead a recipient, acting reasonably under the
circumstances, about a material fact regarding the contents
or subject matter of the message.
(d) Affirmative Defense.--A person who violates subsection
(a) or (b) shall not be liable if--
(1)(A) the person has established and implemented, with due
care, reasonable practices and procedures to effectively
prevent such violations; and
(B) the violation occurred despite good faith efforts to
maintain compliance with such practices and procedures; or
(2) within the 2-day period ending upon the initiation of
the transmission of the unsolicited commercial electronic
mail message in violation of subsection (a) or (b), such
person initiated the transmission of such message, or one
substantially similar to it, to less than 1,000 electronic
mail addresses.
SEC. 5. ENFORCEMENT.
(a) In General.--Section 4 shall be enforced by the
Commission under the FTC
[[Page S8564]]
Act. For purposes of such Commission enforcement, a violation
of this Act shall be treated as a violation of a rule under
section 18 (15 U.S.C. 57a) of the FTC Act prohibiting an
unfair or deceptive act or practice.
(b) Rulemaking.--Not later than 30 days after the date of
enactment of this Act, the Commission shall institute a
rulemaking proceeding concerning enforcement of this Act. The
rules adopted by the Commission shall prevent violations of
section 4 in the same manner, by the same means, and with the
same jurisdiction, powers, and duties as though all
applicable terms and provisions of the FTC Act were
incorporated into and made a part of this section, except
that the rules shall also include--
(1) procedures to minimize the burden of submitting a
complaint to the Commission concerning a violation of section
4, including procedures to allow the electronic submission of
complaints to the Commission;
(2) civil penalties for violations of section 4 in an
amount sufficient to effectively deter future violations, a
description of the type of evidence needed to collect such
penalties, and procedures to collect such penalties if the
Commission determines that a violation of section 4 has
occurred;
(3) procedures for the Commission to grant a reward of not
less than 20 percent of the total civil penalty collected to
the first person that--
(A) identifies the person in violation of section 4; and
(B) supplies information that leads to the successful
collection of a civil penalty by the Commission;
(4) a provision that enables the Commission to keep the
remainder of the civil penalty collected and use the funds
toward the prosecution of further claims, including for
necessary staff or resources; and
(5) civil penalties for knowingly submitting a false
complaint to the Commission.
(c) Regulations.--Not later than 180 days after the date of
enactment of this Act, the Commission shall conclude the
rulemaking proceeding initiated under subsection (b) and
shall prescribe implementing regulations.
SEC. 6. PRIVATE RIGHT OF ACTION.
(a) Action Authorized.--A recipient of an unsolicited
commercial electronic mail message, or a provider of Internet
access service, adversely affected by a violation of section
4 may bring a civil action in any district court of the
United States with jurisdiction over the defendant to--
(1) enjoin further violation by the defendant; or
(2) recover damages in an amount equal to--
(A) actual monetary loss incurred by the recipient or
provider of Internet access service as a result of such
violation; or
(B) at the discretion of the court, the amount determined
under subsection (b).
(b) Statutory Damages.--
(1) In general.--For purposes of subsection (a)(2)(B), the
amount determined under this subsection is the amount
calculated by multiplying the number of willful, knowing, or
negligent violations by an amount, in the discretion of the
court, of up to $10.
(2) Per-violation penalty.--In determining the per-
violation penalty under this subsection, the court shall take
into account the degree of culpability, any history of prior
such conduct, ability to pay, the extent of economic gain
resulting from the violation, and such other matters as
justice may require.
(c) Attorney Fees.--In any action brought pursuant to
subsection (a), the court may, in its discretion, require an
undertaking for the payment of the costs of such action, and
assess reasonable costs, including reasonable attorneys'
fees, against any party.
SEC. 7. INTERNET ACCESS SERVICE PROVIDERS.
Nothing in this Act shall be construed--
(1) to enlarge or diminish the application of chapter 121
of title 18, relating to when a provider of Internet access
service may disclose customer communications or records;
(2) to require a provider of Internet access service to
block, transmit, route, relay, handle, or store certain types
of electronic mail messages;
(3) to prevent or limit, in any way, a provider of Internet
access service from adopting a policy regarding commercial
electronic mail messages, including a policy of declining to
transmit certain types of commercial electronic mail
messages, or from enforcing such policy through technical
means, through contract, or pursuant to any other provision
of Federal, State, or local criminal or civil law; or
(4) to render lawful any such policy that is unlawful under
any other provision of law.
SEC. 8. EFFECT ON OTHER LAWS.
Nothing in this Act shall be construed to impair the
enforcement of section 223 or 231 of the Communications Act
of 1934 (47 U.S.C. 223 or 231), chapter 71 (relating to
obscenity) or 110 (relating to sexual exploitation of
children) of title 18, United States Code, or any other
Federal criminal statute.
SEC. 9. FTC STUDY.
Not later than 24 months after the date of enactment of
this Act, the Commission, in consultation with appropriate
agencies, shall submit a report to Congress that provides a
detailed analysis of the effectiveness and enforcement of the
provisions of this Act and the need, if any, for Congress to
modify such provisions.
SEC. 10. STUDY OF POSSIBLE INTERNATIONAL AGREEMENT.
Not later than 6 months after the date of enactment of this
Act, the President shall--
(1) conduct a study in consultation with the Internet
Engineering Task Force on the possibility of an international
agreement to reduce spam; and
(2) issue a report to Congress setting forth the findings
of the study required by paragraph (1).
SEC. 11. EFFECTIVE DATE.
The provisions of this Act shall take effect 180 days after
the date of enactment of this Act, except that subsections
(b) and (c) of section 5 shall take effect upon the date of
enactment of this Act.
____
[From the Philadelphia Inquirer, May 4, 2003]
How to Unspam the Internet
(By Lawrence Lessig)
The Internet is choking on spam. Billions of unsolicited
commercial messages--constituting almost 50 percent of all e-
mail traffic--fill the in-boxes of increasingly impatient
Internet users. These messages offer to sell everything from
human growth hormones to pornography. And increasingly the
offers to sell pornography are themselves pornographic.
So far, Congress has done nothing about this burden on the
Internet. Many states have passed laws that have tried.
Virginia just passed the most extreme of these laws, making
it a felony to send spam with a fraudulent return address.
Other states are considering the same.
Yet all of these regulations suffer from a similar flaw:
Spamsters know the laws will never be enforced. The cost of
bringing a lawsuit is extraordinarily high. Most of us have
better things to do than sue spamsters. Thus, despite a
patchwork of regulation that in theory should be restricting
spam, the practice of spam continues to increase at an
astonishing rate.
But last week, U.S. Rep. Zoe Lofgren (D., Calif.)
introduced a bill that, if properly implemented by the
Federal Trade Commission, would actually work. I am so
confident she is right that I've offered to resign my job if
her proposal does not significantly reduce the burden of
spam.
The Restrict and Eliminate Delivery of Unsolicited
Commercial E-mail (REDUCE) Spam Act has two important parts.
First, anyone sending bulk unsolicited commercial e-mail must
include on each e-mail a simple tag--either ADV: or ADV:ADLT.
Second, anyone who finds a spamster who fails properly to
label unsolicited commercial e-mail will be paid a bounty by
the FTC.
The first part of the proposal would enable simple filters
to block unwanted spam. Users could tell their Internet
service provider to block ADV e-mail, or they could
automatically filter such e-mail into a spam folder on their
own computer. These simple filters would replace the
extraordinarily sophisticated filters companies have been
developing to identify and block spam.
These complex filters, though ingenious, are necessarily
one step behind. Spamsters will always find a way to trick
them. The filters will be changed to respond, but the
spamsters will in turn change their spam to find a way around
the filters. Thus the filters will never block all spam, but
they will always block a certain number of messages that are
not spam.
But part one of the Lofgren legislation would never work if
it weren't for part two: A spamster bounty. Lofgren's
proposal would require the FTC to pay a bounty to anyone who
tracks down a spamster who has failed properly to label
unsolicited commercial e-mail. This proposal would invite
savvy 18-year-olds from across the world to hunt down these
law-violating spamsters. The FTC would then fine them, after
paying a reward to the bounty hunter who found them.
The bounty would assure that the spam law was enforced.
Properly enforced, the law would teach most spamsters that
failing to label spam doesn't pay. The spamsters in turn
would decide either to label their spam or give up and get a
real job. Either way, the burden of spam would be reduced.
No doubt no solution would eliminate 100 percent of spam.
Much is foreign; American laws would not easily reach those
spamsters. But the question lawmakers should ask is what is
the smallest, least burdensome regulation that would have the
most significant effect. If Lofgren's proposal were passed,
the vast majority of spamsters would have to change their
ways. Technologists could then target their filters on the
spamsters that remain.
What about free speech? Don't spamsters have First
Amendments rights?
Of course they do. And many of the laws proposed right now
go too far in censoring speech. Threatening a felony for a
bad return address, as the Virginia law does, is a dangerous
precedent. Laws that ban spam altogether are much worse.
But Lofgren's proposal simply requires a proper label so
consumers can choose whether they want to receive the speech
or not. And most important, by reducing the clutter of
unsolicited and unwanted spam, the law would improve the
opportunity for other speech--including political speech--to
get through.
More fundamentally, free speech is threatened just as much
by bad filters as by bad laws. A well-crafted law--narrow in
its scope, and moderate in its regulation--can in turn
eliminate the demand for bad filters. Lofgren's proposal
would have just this effect. Congress should act to follow
Lofgren's lead. In Internet time, not Washington time.
______
By Mr. HATCH (for himself and Mrs. Clinton):
[[Page S8565]]
S. 1328. A bill to provide for an evaluation by the Institute of
Medicine of the National Academy of Sciences of leading health care
performance measures and options to implement policies that align
performance with payment under the Medicare program under title XVIII
of the Social Security Act; to the Committee on Finance.
Mr. HATCH. Mr. President, I rise today to address an issue of
importance to all Americans, the quality and safety of health care in
the United States.
Numerous studies have identified serious shortcomings in the quality
and safety of health care. However, addressing these shortcomings and
improving health care outcomes in a complex health care system requires
long-range strategies and specific goals.
The Medicare program, as one of the largest purchasers of health
care, is ideally situated to take a leadership role in encouraging
quality improvement. Currently, however, Medicare's payment methods and
regulations provide few incentives to pursue innovative quality
improvement strategies and to reward those who achieve exemplary
performance.
Traditional Medicare pays most physicians according to a fee schedule
and pays hospitals according to a DRG-based payment system.
Medicare+Choice plans are paid a capitated rate and, in turn, pay
physicians using a range of approaches, from salary to capitation to
fee-for-service, none of which directly reward enhanced quality.
Attempts to adjust Medicare payments to reward performance
improvements in safety and quality have been hampered, in part, by the
lack of measures and data for assessing performance. Although the
Centers for Medicare and Medicaid Services recently began an initiative
to develop voluntary consensus performance measures for 10 clinical
conditions for hospitals, standardized measures of quality for
hospitals and providers do not otherwise exist.
As the Senate considers a new Medicare prescription drug benefit and
additional measures to reform the Medicare program, it is more
important than ever that we consider also measures to ensure that these
new benefits are provided as safely and effectively as possible.
That is why I am today introducing a bill charging the Institute of
Medicine with performing a study to evaluate leading health care
performance measures and options to implement policies that align
performance with payment in Medicare.
We have learned much about health care quality in the last several
years. The Institute of Medicine, in its studies entitled ``To Err Is
Human,'' and ``Crossing the Quality Chasm,'' has identified the health
care safety and quality shortcomings that exist and the need for
improvement. In a recent study performed at the request of Congress,
``Leadership by Example,'' the Institute of Medicine identified the
leadership role that Government can take in improving health care
quality in government sponsored health care programs and those in the
private sector.
The bill that I am introducing today, and the study that will result,
represents the next step toward improving health care quality and
safety in the United States. It is an important step and one that we
must take in order to ensure that Medicare beneficiaries receive the
highest quality health care services available. I urge my colleagues to
join me in supporting this legislation.
Mrs. CLINTON. Mr. President, I am pleased to join my friend from
Utah, Senator Hatch, today in introducing a bill that will commission a
study from IOM to identify performance measures and payment incentives
that reward high quality providers in Medicare.
Currently Medicare pays the same amount for good care as it does for
poor quality care. It's easy to assume that the dollars that go to
Medicare all yield high quality care, but the evidence is otherwise.
Take heart disease, the leading cause of death in the U.S.
Cholesterol management after a heart attack can mean the difference
between disability and an active lifestyle. Yet we don't have adequate
data that show us whether most Medicare beneficiaries are getting this
clinically appropriate care. And the only data that we do have, from
NCQA, The State of Health Care Quality 2002, tells us that in 2001
almost one-quarter, 23 percent, of Medicare beneficiaries in health
plans did not have their cholesterol managed after a heart attack.
In New York, between 14 and 22 percent of diabetic beneficiaries in
health plans did not get a blood sugar control test in 2001.
When Medicare and Medicare enrollees pay the same amount to providers
that give excellent care as it does to those who provide mediocre care,
that may unintentionally create incentives for providers to skimp or
cut corners on quality. We debate endlessly over ways to control costs
in Medicare, but we have not taken one of the simple steps that will,
almost certainly, drive quality up and assure that we are getting good
value for the dollars we spend.
Medicare should be a leader in national efforts to improve quality.
Medicare, with its $250 billion of purchasing power, 40 million
enrollees, programs data, and professional experience can bring more
resources to bear on these quality problems than any other purchaser.
The study we are proposing today would be the first step down this
path. It would cost relatively little but yield great rewards as a
guide to how to measure and pay for quality in the future. The study
would develop measures to assess quality, including outcome measures.
It would tell us what payment incentives have worked in the private
sector. And it would identify approaches to use incentives to improve
quality that can be implemented across all of Medicare.
So I am pleased that we are making this effort today, and hope that
it is just the first step of many more that we will take down the path
of improving Medicare for patients and consumers.
______
By Ms. MURKOWSKI:
S. 1330. A bill to establish the Kenai Mountains-Turnagain Arm
National Heritage Area in the State of Alaska, and for other purposes;
to the Committee on Energy and Natural Resources.
Ms. MURKOWSKI. Mr. President, the Kenai Mountains-Turnagain Arm
National Heritage Area is one of the best examples for preserving the
heritage of one of this Nation's first pioneer areas. This legislation
will create a national heritage corridor that covers an area from
Seward to Anchorage.
This national heritage corridor will protect the natural and cultural
resources of a well established region. The Kenai Mountains-Turnagain
Arm National Heritage Area will follow along a corridor that was
established by pioneering Alaskans. This route will partially follow
two nationally recognized treasures--the Iditarod Trail and the Seward
Highway National Scenic Byway. It will honor Native traders, gold rush
stampeders and the route of the Alaska Railroad. One of the biggest
gold discoveries along this route was the Bear Creek gold find near
Hope in 1895. The route of the Alaska Railroad was finished in 1923.
Unlike many others, this national heritage corridor will not be
managed by the Federal Government, but instead, by a group of local
community leaders. The preservation of historic areas depends largely
upon the community and its support, and clearly, no one entity can
provide the adequate management, protection and preservation for these
extensive resources. In fact, over the past five years, a group of
local community leaders has been working hard for this national
heritage designation. They have been successful in garnering support
from communities throughout this entire route. These local folks have
extensive knowledge of the resources; they are personally acquainted
with the area; they understand the ruggedness and the beauty of the
land, and certainly appreciate the potential economic value this
designation would bring to the area.
The preservation of history and heritage depends upon the mutual
support and assistance from public and private groups. This national
heritage designation has been a vision of many people from Seward to
Anchorage, and comprises lands in the Kenai Mountains and the upper
Turnagain Arm region. An 11-member board will be established and
charged with seeing the vision become a reality. This non-profit board
[[Page S8566]]
will be tasked with coordinating and supporting the protection of trail
resources; interpreting the trail, and identifying the cultural
landscapes of the Kenai Mountains-Turnagain Arm historic transportation
corridor. A plan will also be developed for the management of the
heritage corridor, and will complement existing Federal, State, borough
and local plans. To ensure even greater support of this designation,
there will be opportunities provided to the public for their full
participation as the plan is being developed.
The purposes of designating this national treasure are to: Enable all
people to envision and experience the heritage and impacts of
transportation routes used first by indigenous people, followed by
pioneers to the Nation's first frontier;
Encourage economic viability in the affected communities.
This national heritage corridor is significant for a whole host of
reasons: Allow citizens to help preserve the heritage of the pioneers;
protect and honor the history of Native traders, gold seekers and
pioneers; decisions and management will be made by local citizens;
support of several historical associations, the cities of Seward,
Girdwood, Hope and Anchorage; an 11-member non-profit local board will
plan and operate the heritage corridor; increase public awareness and
appreciation for the natural, historical and cultural resources, and
modern resource development of the heritage corridor; restore historic
buildings and structures that are located within the boundaries of the
heritage corridor; and, no additional lands will be acquired by the
Federal Government or by the local management group.
Rarely ever do we have such an opportunity when whole communities,
Federal, State and local governments agree on and support such a
national designation. Through adequate funding from the Department of
the Interior, interpretation signs and technical assistance to conduct
local planning will help to preserve and protect natural, historical,
landscape and cultural resource values for current and future
generations of the Kenai Mountains-Turnagain Arm National Heritage
Area.
And, finally, with the passage of this bill, visitors to the area can
enjoy the shore lines of Turnagain Arm and watch the world's second
largest tidal range move 30 foot tides in and out. A traveler through
the mountain passes of the heritage area can view evidence of
retreating glaciers and avalanches. Visitors will be amazed at the
abundant wildlife that make their home in the area. The history of
early settlers will be preserved for current and future generations.
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. 1330
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 ``Kenai Mountains-Turnagain
Arm National Heritage Area Act''.
SEC. 2. FINDINGS AND PURPOSES.
(a) Findings.--Congress finds that--
(1) The Kenai Mountains-Turnagain Arm transportation
corridor is a major gateway to Alaska and includes a range of
transportation routes used first by indigenous people who
were followed by pioneers who settled the Nation's last
frontier;
(2) the natural history and scenic splendor of the region
are equally outstanding; vistas of nature's power include
evidence of earthquake subsidence, recent avalanches,
retreating glaciers and tidal action along Turnagain Arm,
which has the world's second greatest tidal range;
(3) the cultural landscape formed by indigenous people and
then by settlement, transportation and modern resource
development in this rugged and often treacherous natural
setting stands as powerful testimony to the human fortitude,
perseverance, and resourcefulness that is America's proudest
heritage from the people who settled the frontier;
(4) there is a national interest in recognizing,
preserving, promoting, and interpreting these resources;
(5) the Kenai Mountains-Turnagain Arm region is
geographically and culturally cohesive because it is defined
by a corridor of historic routes--trail, water, railroad, and
roadways through a distinct landscape of mountains, lakes,
and fjords;
(6) national significance of separate elements of the
region include, but are not limited to, the Iditarod National
Historic Trail, the Seward Highway National Scenic Byway, and
the Alaska Railroad National Scenic Railroad;
(7) national heritage area designation provides for the
interpretation of these routes, as well as the national
historic districts and numerous historic routes in the region
as part of the whole picture of human history in the wider
transportation corridor including early Native trade routes,
connections by waterway, mining trail, and other routes;
(8) national heritage area designation also provides
communities within the region with the motivation and means
for ``grass roots'' regional coordination and partnerships
with each other and with borough, State, and Federal
agencies; and
(9) national heritage area designation is supported by the
Kenai Peninsula Historical Association, the Seward Historical
Commission, the Seward City Council, the Hope and Sunrise
Historical Society, the Hope Chamber of Commerce, the Alaska
Association for Historic Preservation, the Cooper Landing
Community Club, the Alaska Wilderness Recreation and Tourism
Association, Anchorage Historic Properties, the Anchorage
Convention and Visitors Bureau, the Cook Inlet Historical
Society, the Moose Pass Sportsman's Club, the Alaska
Historical Commission, the Girdwood Board of Supervisors, the
Kenai River Special Management Area Advisory Board, the
Bird/Indian Community Council, the Kenai Peninsula Borough
Trails Commission, the Alaska Division of Parks and
Recreation, the Kenai Peninsula Borough, the Kenai
Peninsula Tourism Marketing Council, and the Anchorage
Municipal Assembly.
(b) Purposes.--The purposes of this Act are--
(1) to recognize, preserve, and interpret the historic and
modern resource development and cultural landscapes of the
Kenai Mountains-Turnagain Arm historic transportation
corridor, and to promote and facilitate the public enjoyment
of these resources; and
(2) to foster, through financial and technical assistance,
the development of cooperative planning and partnership among
the communities and borough, State, and Federal Government
entities.
SEC. 3. DEFINITIONS.
In this Act:
(1) Heritage area.--The term ``Heritage Area'' means the
Kenai Mountains-Turnagain Arm National Heritage Area
established by section 4(a) of this Act.
(2) Management entity.--The term ``management entity''
means the 11 member Board of Directors of the Kenai
Mountains-Turnagain Arm National Heritage Corridor
Communities Association.
(3) Management plan.--The term ``management plan'' means
the management plan for the Heritage Area.
(4) Secretary.--The term ``Secretary'' means the Secretary
of the Interior.
SEC. 4. KENAI MOUNTAINS-TURNAGAIN ARM NATIONAL HERITAGE AREA.
(a) Establishment.--There is established the Kenai
Mountains-Turnagain Arm National Heritage Area.
(b) Boundaries.--The Heritage Area shall comprise the lands
in the Kenai Mountains and upper Turnagain Arm region
generally depicted on the map entitled ``Kenai Peninsula/
Turnagain Arm National Heritage Corridor'', numbered ``Map
#KMTA-1, and dated ``August 1999''. The map shall be on file
and available for public inspection in the offices of the
Alaska Regional Office of the National Park Service and in
the offices of the Alaska State Heritage Preservation
Officer.
SEC. 5. MANAGEMENT ENTITY.
(a) The Secretary shall enter into a cooperative agreement
with the management entity, to carry out the purposes of this
Act. The cooperative agreement shall include information
relating to the objectives and management of the Heritage
Area, including the following:
(1) A discussion of the goals and objectives of the
Heritage Area;
(2) An explanation of the proposed approach to conservation
and interpretation of the Heritage Area;
(3) A general outline of the protection measures, to which
the management entity commits.
(b) Nothing in this Act authorizes the management entity to
assume any management authorities or responsibilities on
Federal lands.
(c) Representatives of other organizations shall be invited
and encouraged to participate with the management entity and
in the development and implementation of the management plan,
including but not limited to: The State Division of Parks and
Outdoor Recreation; the State Division of Mining, Land and
Water; the Forest Service; the State Historic Preservation
Office; the Kenai Peninsula Borough; the Municipality of
Anchorage; the Alaska Railroad; the Alaska Department of
Transportation; and the National Park Service.
(d) Representation of ex-officio members in the non-profit
corporation shall be established under the bylaws of the
management entity.
SEC. 6. AUTHORITIES AND DUTIES OF MANAGEMENT
ENTITY.
(a) Management Plan.--
(1) In general.--Not later than 3 years after the Secretary
enters into a cooperative agreement with the management
entity, the management entity shall develop a management plan
for the Heritage Area, taking into consideration existing
Federal, State, borough, and local plans.
[[Page S8567]]
(2) Contents.--The management plan shall include, but not
be limited to--
(A) comprehensive recommendations for conservation,
funding, management, and development of the Heritage Area;
(B) a description of agreements on actions to be carried
out by Government and private organizations to protect the
resources of the Heritage Area;
(C) a list of specific and potential sources of funding to
protect, manage, and develop the Heritage Area;
(D) an inventory of the resources contained in the Heritage
Area; and
(E) a description of the role and participation of other
Federal, State, and local agencies that have jurisdiction on
lands within the Heritage Area.
(b) Priorities.--The management entity shall give priority
to the implementation of actions, goals, and policies set
forth in the cooperative agreement with the Secretary and the
heritage plan, including assisting communities within the
region in--
(1) carrying out programs which recognize important
resource values in the Heritage Area;
(2) encouraging economic viability in the affected
communities;
(3) establishing and maintaining interpretive exhibits in
the Heritage Area;
(4) improving and interpreting heritage trails;
(5) increasing public awareness and appreciation for the
natural, historical, and cultural resources and modern
resource development of the Heritage Area;
(6) restoring historic buildings and structures that are
located within the boundaries of the Heritage Area; and
(7) ensuring that clear, consistent, and appropriate signs
identifying public access points and sites of interest are
placed throughout the Heritage Area.
(c) Public Meetings.--The management entity shall conduct 2
or more public meetings each year regarding the initiation
and implementation of the management plan for the Heritage
Area. The management entity shall place a notice of each such
meeting in a newspaper of general circulation in the Heritage
Area and shall make the minutes of the meeting available to
the public.
SEC. 7. DUTIES OF THE SECRETARY.
(a) The Secretary, in consultation with the Governor of
Alaska, or his designee, is authorized to enter into a
cooperative agreement with the management entity. The
cooperative agreement shall be prepared with public
participation.
(b) In accordance with the terms and conditions of the
cooperative agreement and upon the request of the management
entity, and subject to the availability of funds, the
Secretary may provide administrative, technical, financial,
design, development, and operations assistance to carry out
the purposes of this Act.
SEC. 8. SAVINGS PROVISIONS.
(a) Regulatory Authority.--Nothing in this Act shall be
construed to grant powers of zoning or management of land use
to the management entity of the Heritage Area.
(b) Effect on Authority of Governments.--Nothing in this
Act shall be construed to modify, enlarge, or diminish any
authority of the Federal, State, or local governments to
manage or regulate any use of land as provided for by law or
regulation.
(c) Effect on Business.--Nothing in this Act shall be
construed to obstruct or limit business activity on private
development or resource development activities.
SEC. 9. PROHIBITION ON THE ACQUISITION OR REAL PROPERTY.
The management entity may not use funds appropriated to
carry out the purposes of this Act to acquire real property
or interest in real property.
SEC. 10. AUTHORIZATION OF APPROPRIATIONS.
(a) First Year.--For the first year $350,000 is authorized
to be appropriated to carry out the purposes of this Act, and
is made available upon the Secretary and the management
entity completing a cooperative agreement.
(b) In General.--There is authorized to be appropriated not
more than $1,000,000 to carry out the purposes of this Act
for any fiscal year after the first year. Not more than
$10,000,000, in the aggregate, may be appropriated for the
Heritage Area.
(c) Matching Funds.--Federal funding provided under this
Act shall be matched at least 25 percent by other funds or
in-kind services.
(d) Sunset Provision.--The Secretary may not make any grant
or provide any assistance under this Act beyond 15 years from
the date that the Secretary and management entity complete a
cooperative agreement.
______
By Mr. SANTORUM (for himself, Mr. Conrad, and Mr. Breaux):
S. 1331. A bill to clarify the treatment of tax attributes under
section 108 of the Internal Revenue Code of 1986 for taxpayers which
file consolidated returns; to the Committee on Finance.
Mr. SANTORUM. Mr. President, today I am introducing a bill along with
Senator Conrad that would close a gaping loophole in the Internal
Revenue Code. This loophole involves the treatment of companies whose
debt is cancelled in a bankruptcy proceeding. Under existing law, these
companies are not required to immediately pay tax on their income from
debt cancellation. The are, however, required to reduce their net
operating losses, NOLs, and other tax attributes. These attribute
reductions have the effect of allowing bankrupt companies to defer, but
not permanently avoid, paying tax on income from debt cancellation.
It has come to my attention that MCI/WorldCom and certain other
bankrupt companies are attempting to circumvent these rules. In plain
English, MCI/WorldCom--the group of corporations that has perpetrated
the greatest business fraud--is trying to relieve itself of $35 billion
of debt and yet emerge from bankruptcy with an NOL that is estimated to
range from $10 to $15 billion. Such an NOL will, post-bankruptcy,
eliminate federal income tax of $3.5 billion to $5.25 billion on MCI/
WorldCom's first $10 to $15 billion of income.
Plainly, if this tax loophole is not eliminated, MCI/WorldCom will
not pay taxes for the foreseeable future. By attempting to utilize this
loophole, MCI/WorldCom is demonstrating that it is not, in fact, a new
company--instead, it is the same reckless company that we have come to
know. The legislation I am introducing today will assure that MCI/
WorldCom doesn't get away with this outrageous behavior. It will also
prevent other companies from imitating this approach.
Such results would be bad tax policy for two reasons. First, they
would clearly be contrary to the policy objectives that Congress
intended to achieve when it enacted the current tax attribute reduction
rules. Second, equivalent taxpayers would be treated differently under
Section 108 based on their corporate structure and borrowing
practices--factors that, form a tax policy standpoint, do not justify
any difference in treatment.
Based on rulings and court cases, I believe this bill reflects the
current tax position of the Treasury Department with respect to NOLs.
Although it is also clear that aggressive taxpayers and their lawyers
have utilized this tax loophole. The approach to this provision is
contrary to United Dominion Industries, Inc. v. United States, 532 U.S.
822 (2001). Although not dealing directly with Section 108, the case is
clear that the only NOL of a consolidated group is the group's entire
NOL. I am introducing this bill with an effective date of today to
provide notice to MCI/WorldCom, and all similarly situated taxpayers,
that this Congress will not stand for this.
I encourage my colleagues to support closing this loophole to avoid
such abuse in the future. I ask unanimous consent to have the Business
Week story from May 12, 2003, ``Why This Tax Loophole For Losers Should
End,'' and the text of the bill be printed in the Record.
S. 1331
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. CLARIFICATION OF THE TREATMENT OF TAX ATTRIBUTES.
(a) In General.--Section 108(b) of the Internal Revenue
Code of 1986 (relating to reduction of tax attributes) is
amended by adding at the end the following new paragraph:
``(6) Affiliated groups.--If the taxpayer is a member of an
affiliated group of corporations which files a consolidated
return under section 1501, the tax attributes described in
paragraph (1) shall be the aggregate tax attributes of such
group. The Secretary shall prescribe such regulations as may
be necessary under section 1502 to carry out the purposes of
this paragraph.''.
(b) Effective Date.--The amendment made by subsection (a)
shall apply to discharges of indebtedness occurring after
June 25, 2003, except that discharges of indebtedness under
any plan of reorganization in a case under title 11, United
States Code, shall be deemed to occur on the date such plan
is confirmed.
There being no objection, the additional material ordered to be
printed in the Record, as follows:
[From Business Week, May 12, 2003]
(By David Henry)
Why This Tax Loophole for Losers Should End
Is there no end to the ugly superlatives that fallen
telecom giant WorldCom Inc. is amassing? First, its top execs
reigned over the greatest alleged accounting fraud in
history. Then, the company filed the largest corporate
bankruptcy. Now, it is lining up to collect what could be one
of the biggest single corporate tax breaks of all time.
To the fury of its competitors, WorldCom is angling to
snare a $2.5 billion benefit from Uncle Sam. How? By
exploiting a provision in the Internal Revenue Service code
so it
[[Page S8568]]
can hanging onto previous losses of at least $6.6 billion and
enjoy years of tax-free earnings. What's more, the ploy would
protect new management against any takeover for at least two
years. And, WorldCom could use the losses to offset even
income it picks up by taking over other companies. ``WorldCom
is in an enviable position,'' says Robert Willens, tax
accounting analyst at Lehman Brothers Inc. ``It will have a
copious tax losses and can be a powerful acquirer.''
WorldCom's new owners--the holders of its $41 billion of
dad debt--are driving a truck through a loophole that needs
to be closed pronto. It was left open by Congress when the
lawmakers overhauled IRS rules to stamp out a notorious trade
in corporate tax losses. At one time, owners of loss-making
businesses could sell their companies along with their
accumulated tax loss--often their only asssit--to profitable
companies. Now, tax losses are snuffed out when company
ownership changes hands.
So, WorldCom is going through hoops to avoid that fate.
Pending a final vote by creditors later this year, the
company is changing its bylaws to prohibit anyone from
building anyone from building a stake of more than 4.75
percent in the company. They have to keep bidders at bay for
at least two years, otherwise the IRS would argue that
control of WorldCom has changed hands and that the tax
losses--which, assuming a 38 percent tax rate, could give a
$2.5 billion boost to earnings--should be wiped out. ``It is
the perfect poison pill,'' says Carl M. Jenks, tax expert at
law firm Jones Day.
The perverse tactic is increasingly popular. The former
Williams Communication Group put a similar 5 percent
ownership limit in place last fall when it became WilTil
Communications Group Inc. after a bankruptcy reorganization.
The bankruptcy judge overseeing UAL Corp. agreed on Feb. 24
to a similar restriction on UAL securities in order to
preserve its $4 billion of tax losses. ``We will generally
recommend that any company with net operating losses worth
anything adopt these restrictions,'' says Douglas W. Killip,
a tax lawyer at Akin Gump Strauss Hauer & Field.
For WorldCom's rivals, the tax break is salt on a wound.
William P. Barr, a former U.S. attorney general and now
general counsel of Verizon Communications, fumes that
WorldCom is trying to ``compound its fraud by escaping the
payment of taxes.'' WorldCom's bankruptcy reorganization will
eliminate the cost of servicing some $30 billion of debt.
That, the company projects, will help it to make $2 billion
before taxes next year. By using the tax losses, it will be
able to keep about $780 million in cash it would otherwise
owe the government. In fact, it won't be liable for any tax
at least until the accumulated losses are worked through.
And, because it racked up the $6.6 billion in losses just
through 2001, WorldCom could have billions more to play with
once the numbers for 2002 are finally worked out.
What's more, the poison pill is likely to deter any company
from buying WorldCom and dumping some of the obsolete assets
still clogging and telecom industry. That will slow and
recovery in capital spending and hurt WorldCom's competitors.
``It is bad when business decisions are motivated by tax
reasons and not based on sound economics,'' says Anthony
Sabino, bankruptcy law professor at St. John's University.
Rivals are likely to push the IRS to find a way to stop
WorldCom from utilizing the losses, observers say. But their
chances of success are slim because the IRS never issued
regulations that could have nullified the ploy. And the
courts generally rule against the agency when it attempts to
write rules retroactively, Willens says.
Still, it's time to close the stable door before any more
horses bolt. Besides, Uncle Sam could use the money right
now.
______
By Mr. HATCH:
S. 1332. A bill to amend title XVIII of the Social Security Act to
provide regulatory relief, appeals process reforms, contracting
flexibility, and education improvements under the Medicare program, and
for other purposes; to the Committee on Finance.
Mr. HATCH. Mr. President, there is no question that our need to
improve the Medicare program by adding prescription drug coverage for
beneficiaries is extremely important, as this debate indicates.
But, our discussions would not be complete if we neglected another
major Medicare improvement which is also long overdue, and that is the
need to improve the climate in which providers strive to provide high
quality services to patients.
Medicare's anticipated regulations--three times longer than the U.S.
tax code--prevent providers from delivering health care efficiently and
beneficiaries from receiving the care they need.
Complex Federal regulations and reams of paperwork require physicians
to spend hours each day filling out government forms rather than caring
for their patients. The array of Federal Medicare rules with which
physicians must comply is overwhelming. Doctors are required to
complete claims forms, advance beneficiary notices, certify medical
necessity, file enrollment forms, and comply with code documentation
guidelines. Indeed, these rules and mandates are not only extensive,
they are constantly changing and they may be interpreted differently in
different regions of the country.
The complexity of the rules and the variation in their interpretation
has prompted outcries from all centers of our country. In fact, I have
heard loud and clear from the physicians in my home State of Utah about
the severity of the problem.
Leon Sorensen, Executive Vice President of the Utah Medical
Association, recently wrote to me and said:
``The Utah Medical Association has long been concerned
about the unnecessary burdens placed upon physicians by the
voluminous regulations of Medicare. Not only does compliance
with these regulations take physicians' time away from
patients, but also the regulations contribute to the high
cost of medical care while contributing little of value. They
discourage physicians from participating fully in Medicare.
They are often punitive in nature rather than an educational.
They use tactics that would not be tolerated by businesses or
government if applied to them.
An example is the practice of extrapolating a small sample
of billing errors over the physician's entire practice,
making the physician liable for payback of thousands of
dollars of ``overpaid'' claims when demonstrated over
billings may amount only to a few dollars. If this process
were used by the IRS in a tax audit, the public outcry would
be deafening.
Medicare also requires that alleged ``overpayments'' to
physicians by repaid within 60 days, even if a physician
chooses to appeal Medicare's allegations. When assessed a
Medicare overpayment, the only way physicians can appeal is
to subject their practices to another audit, using a
``statistically valid random sample.'' Statistical sample
audits can shut down a physician's practice for days,
preventing physicians from treating patients. Physicians are
forced to settle with Medicare rather than be subjected to
such unfair scrutiny.
Any defense against this kind of administrative abuse is
extremely costly, time consuming and often ineffective.
Indeed, failure to follow Medicare's complex rules--or just the
perception of such failure--can result in an audit of a physician's
billing records, withholding of payments and crippling of a physician's
practice.
And, physicians are not the only individuals affected by these rules.
Medicare beneficiaries are affected--both directly and indirectly--by
Medicare's onerous rules and burdensome paperwork. Both patients and
providers are confused by obscure paperwork and apparently conflicting
rules. Physicians have difficulty understanding how to bill for their
services and beneficiaries find it difficult to understand the forms
and billing information that they receive. Indeed, the administrative
costs associated with managing this paperwork and the fear of harsh
consequences in response to clerical errors has led some providers to
consider whether they should continue to participate in the Medicare
program.
The problem has not escaped the attention of the administration and
addressing it is a priority for President Bush and it should be for
Congress also. Secretary Thompson has said, ``Patients and providers
alike are fed up with voluminous and complex paperwork. Rules are
constantly changing. Complexity is overloading the system,
criminalizing honest mistakes and driving doctors, nurses, and other
health care professionals out of the program.''
Congress has considered legislation over the past few years to
provide relief from this regulatory burden. Former Senator Frank
Murkowski should be given great credit for drafting S. 452, the
``Medicare Education and Regulatory Fairness Act of 2001''--legislation
that he introduced in the Senate on March 5, 2001 but which never came
to a vote.
The legislation that I am introducing today, the ``Medicare Education
Regulatory Reform and Contracting Improvement Act of 2003,'' MERCI,
builds on that initiative. It will improve the Medicare program for
beneficiaries and providers alike by clarifying regulations, rewarding
quality and by enhancing services. I am introducing this legislation
today because the need for Medicare regulatory reform remains. In fact,
the need for Medicare regulatory reform has never been greater. In
addition, the regulatory reform that I am proposing in MERCI fits hand
in glove with the reforms that we have
[[Page S8569]]
proposed in S. 1, the ``Prescription Drug and Medicare Improvement Act
of 2003.'' The reformed Medicare program must include reformed
regulations if it is to provide efficient service to beneficiaries.
Let me take a moment to review a few of the important provisions in
this bill. The educational provisions of the MERCI Act are designed to
decrease Medicare billing and claims payment errors by improving
education and training programs for Medicare providers. It includes
also provisions that will improve communication between the Department
of Health and Human Services and Medicare providers. Furthermore, the
bill will improve communication with Medicare beneficiaries by
providing for central toll-free telephone services to require free,
appropriate referrals to individuals seeking information or assistance
with Medicare.
The MERCI Act includes regulatory reform provisions that are designed
to reduce waste, fraud and abuse in Medicare; provisions that are just
and fair for beneficiaries, contractors, and providers. Among other
things, the bill eliminates retroactive application of regulatory
changes and expedites the appeals processes for beneficiaries,
providers, and suppliers of Medicare services.
Finally, the MERCI Act will improve Medicare contracting; increasing
competition, improving service and reducing costs by providing for a
competitive bidding process for Medicare contractors that takes into
account performance quality, price and other factors that are important
to beneficiaries.
Medicare beneficiaries and Medicare providers have been suffering
from burdensome and confusing regulations for too long. It is time that
they received some mercy. The time for Medicare regulatory reform has
come and the bill that I am introducing today provides that mercy.
MERCI, the ``Medicare Education, Regulatory Reform and Contracting
Improvement Act of 2003'' takes a common sense approach to providing
relief for the Medicare beneficiaries and providers who have been
suffering this burden for so long.
I believe that MERCI will improve the delivery of health care
services to Medicare beneficiaries by enhancing the efficiency of the
Medicare program for all concerned.
Finally, I would be remiss if I did not thank Chairman Grassley and
Senator Baucus for working with me to include the MERCI legislative
language in S. 1, the ``Prescription Drug and Medicare Improvement Act
of 2003.'' Senators Grassley and Baucus have worked for many years to
reform Medicare's complex regulations, as have I, and their agreement
to include this language is appreciated greatly.
And so, it is with a great appreciation for my colleagues who have
worked with me on this legislation and for those who have worked on
similar legislation in the past, that I urge my colleagues in the
Senate today to join me in addressing the needs of Medicare
beneficiaries and providers by supporting this legislation.
______
By Mr. GRASSLEY (for himself, Mr. Bingaman, Mr. Bunning, Mr.
Daschle, Mr. Rockefeller, Mr. Baucus, Ms. Snowe, Mr. Thomas,
Mr. Smith, Mr. Conrad, Mr. Graham of Florida, Mr. Kerry, Mr.
Breaux, Mrs. Lincoln, and Mr. Jeffords):
S. 1333. A bill to amend the Internal Revenue Code of 1986 to provide
for the treatment of certain expenses of rural letter carriers; to the
Committee on Finance.
Mr. GRASSLEY. Mr. President, the U.S. Postal Service provides a vital
and important communication link for the Nation and the citizens of my
home State of Iowa. Rural Letter Carriers play a special role and have
a proud history as an important link in assuring the delivery of our
mail. Rural letter carriers first delivered the mail with their own
horses and buggies, later with their own motorcycles, and now in their
own cars and trucks. They are responsible for maintenance and operation
of their vehicles in all types of weather and road conditions. In the
winter, snow and ice is their enemy, while in the spring, the melting
snow and ice causes potholes and washboard roads. In spite of these
quite adverse conditions, rural letter carriers daily drive over 3
million miles and serve 24 million American families on over 66,000
routes.
Although the mission of rural carriers has not changed since the
horse and buggy days, the amount of mail they deliver has changed
dramatically. As the Nation's mail volume has increased throughout the
years, the Postal Service is now delivering more than 200 billion
pieces of mail a year. The average carrier delivers about 2,300 pieces
of mail a day to about 500 addresses.
Most recently, e-commerce has changed the type of mail rural letter
carriers deliver. This fact was confirmed in a GAO study entitled
``U.S. Postal Service: Challenges to Sustaining Performance
Improvements Remain Formidable on the Brink of the 21st Century,''
dated October 21, 1999. As this report explains, the Postal Service
expects declines in its core business, which is essentially letter
mail, in the coming years. The growth of e-mail on the Internet,
electronic communications, and electronic commerce has the potential to
substantially affect the Postal Service's mail volume.
First-Class mail has always been the bread and butter of the Postal
Service's revenue, but the amount of revenue from First-Class letters
is declining. E-commerce is providing the Postal Service with another
opportunity to increase another part of its business. That is because
what individuals and companies order over the Internet must be
delivered, sometimes by the Postal Service and often by rural letter
carriers. Currently, the Postal Service had about 33 percent of the
parcel business. Rural letter carriers are now delivering larger
volumes of business mail, parcels, and priority mail packages. But,
more parcel business means more cargo capacity is necessary in postal
delivery vehicles, especially in those owned and operated by rural
letter carriers.
When delivering greeting cards or bills, or packages ordered over the
Internet, rural letter carriers use vehicles they currently purchase,
operate and maintain. In exchange, they receive a reimbursement from
the Postal Service. This reimbursement is called an Equipment
Maintenance Allowance, EMA. Congress recognizes that providing a
personal vehicle to delivery the U.S. Mail is not typical vehicle use.
So, when a rural letter carrier is ready to sell such a vehicle, it's
going to have little trade-in value because of the typically high
mileage, extraordinary wear and tear, and the fact that it is probably
right-hand drive. Therefore, Congress intended to exempt the EMA
allowance from taxation in 1988 through a specific provision for rural
mail carriers in the Technical and Miscellaneous Revenue Act of 1988.
That provision allowed an employee of the U.S. Postal Service who was
involved in the collection and delivery of mail on a rural route, to
compute their business use mileage deduction as 150 percent of the
standard mileage rate for all business use mileage. As an alternative,
rural letter carrier taxpayers could elect to utilize the actual
expense method, business portion of actual operation and maintenance of
the vehicle, plus depreciation. If EMA exceeded the allowable vehicle
expense deductions, the excess was subject to tax. If EMA fell short of
the allowable vehicle expenses, a deduction was allowed only to the
extent that the sum of the shortfall and all other miscellaneous
itemized deductions exceeded two percent of the taxpayer's adjusted
gross income.
The Taxpayer Relief Act of 1997 further simplified the tax returns of
rural letter carriers. That Act permitted the EMA income and expenses
``to wash,'' so that neither income nor expenses would have to be
reported on a rural letter carrier's return. That simplified taxes for
approximately 120,000 taxpayers, but the provision eliminated the
option of filing the actual expense method for employee business
vehicle expenses. The lack of this option, combined with the dramatic
changes the Internet is having on the mail, specifically on rural
letter carriers and their vehicles, is a problem I believe Congress
must address.
The mail mix is changing and already Postal Service management has,
understandably, encouraged rural letter carriers to purchase larger
right-hand
[[Page S8570]]
drive vehicles, such as Sports Utility Vehicles, SUVs, to handle the
increase in parcel loads. Large SUVs are much more expensive than
traditional vehicles. So without the ability to use the actual expense
method and depreciation, rural letter carriers must use their salaries
to cover vehicle expenses. Additionally, the Postal Service has placed
11,000 postal vehicles on rural routes, which means those carriers
receive no EMA.
These developments have created a situation that is contrary to the
historical Congressional intent of using reimbursement to fund the
government service of delivering mail, and also has created an
inequitable tax situation for rural letter carriers. If actual business
expenses exceed the EMA, a deduction for those expenses should be
allowed. To correct this inequity, I am introducing a bill today that
reinstates the ability of a rural letter carrier to choose between
using the actual expense method for computing the deduction allowable
for business use of a vehicle, or using the current practice of
deducting the reimbursed EMA expenses.
Rural letter carriers perform a necessary and valuable service and
face may changes and challenges in this new Internet era. We must make
sure that these public servants receive fair and equitable tax
treatment as they perform their essential role in fulfilling the Postal
Service's mandate of binding the Nation together.
I urge my colleagues to join Senators Bingaman, Daschle, Bunning,
Rockefeller, Snowe, Thomas, Smith of Oregon, Conrad, Graham of Florida,
Kerry, Breaux, Lincoln and myself in sponsoring this 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. 1333
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. CERTAIN EXPENSES OF RURAL LETTER CARRIERS.
(a) In General.--Section 162(o) of the Internal Revenue
Code of 1986 (relating to treatment of certain reimbursed
expenses of rural mail carriers) is amended by redesignating
paragraph (2) as paragraph (3) and by inserting after
paragraph (1) the following:
``(2) Special rule where expenses exceed reimbursements.--
Notwithstanding paragraph (1)(A), if the expenses incurred by
an employee for the use of a vehicle in performing services
described in paragraph (1) exceed the qualified
reimbursements for such expenses, such excess shall be taken
into account in computing the miscellaneous itemized
deductions of the employee under section 67.''.
(b) Conforming Amendment.--The heading for section 162(o)
of the Internal Revenue Code of 1986 is amended by striking
``Reimbursed''.
(c) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2003.
Mr. BINGAMAN. Mr. President, I join Senator Grassley, the chairman of
the Finance Committee, and several of our colleagues in introducing
legislation that will allow rural letter carriers to deduct their
actual expenses when they use their own vehicle to deliver the mail.
This Tax Code correction will reduce the out-of-pocket costs currently
incurred by our Nation's rural letter carriers, giving them comparable
tax treatment enjoyed by others using their vehicles in their line of
business.
For many years, rural letter carriers were allowed to calculate their
deductible expenses by using either a special formula or keeping track
of their costs. In 1997, Congress simplified the tax treatment for
letter carriers, but disallowed them the ability to use the actual
expense method--business portion of actual operation and maintenance of
the vehicle, plus depreciation--for calculating their costs.
Unfortunately, this has resulted in many letter carriers being unable
to account for their real expenses when using their own vehicle to
deliver the mail. This problem is worse in more rugged parts of our
country where road conditions and severe weather can require letter
carriers to use an SUV or four-wheel-drive vehicle that are more
expensive to maintain. This legislation will ensure that these mail
carriers are fully reimbursed for the costs associated with the
operation of their vehicles.
Although the Internet has made the world seem smaller, purchased
goods must still be delivered. The benefits of Internet purchases in
remote locations is limited if the purchased item cannot be delivered.
For this reason, in rural States, such as New Mexico, these letter
carriers play an important role in delivering the majority of the
State's mail and parcels. On a daily basis across the Nation, rural
letter carriers drive over 3 million miles delivering mail and parcels
to over 30 million families. We need to be sure that we have not
created a tax impediment for these dedicated individuals. I look
forward to working with the chairman and my colleagues to get this
legislation passed this year.
I ask unanimous consent that the text of the bill be printed in the
Record immediately following the statement of Senator Grassley on the
introduction of this legislation.
______
By Mr. GRASSLEY (for himself, Mr. Graham of Florida, Ms.
Mikulski, and Mr. Breaux):
S. 1335. A bill to amend the Internal Revenue Code of 1986 to allow
individuals a deduction for qualified long-term care insurance
premiums, use of such insurance under cafeteria plans and flexible
spending arrangements, and a credit for individuals with long-term care
needs; to the Committee on Finance.
Mr. GRASSLEY. Mr. President, I rise today to introduce the Long-Term
Care and Retirement Security Act. This legislation, which I sponsored
in the 106th and 107th Congress with my distinguished colleague from
Florida, Senator Bob Graham, would ease the tremendous cost of long-
term care.
The bill that Senator Graham and I are re-introducing today would
allow individuals a tax deduction for the cost of long-term care
insurance premiums. Increasingly, Americans are interested in private
long-term care insurance to pay for nursing home stays, assisted
living, home health aides, and other services. However, most people
find the policies unaffordable. The younger the person, the lower the
insurance premium, yet most people aren't ready to buy a policy until
retirement. A deduction would encourage more people to buy long-term
insurance.
Our proposal would also give individuals or their care givers a
$3,000 tax credit to help cover their long-term care expenses. This
would apply to those who have been certified by a doctor as needing
help with at least three activities of daily living, such as eating,
bathing, or dressing. This credit would help care givers pay for
medical supplies, nursing care and any other expenses incurred while
caring for family members with disabilities.
One family that would benefit from this legislation is the Gardner
family of Waterloo, IA. Ruth Gardner is a 70-year-old mother of nine
who suffers from a degenerative tissue disorder, Scleroderma, atrial
fibrillation, congestive heart failure and is a breast cancer survivor.
For the last 3 years her nine children, their spouses and numerous
grandchildren have worked tirelessly to fulfill Ms. Gardner's wish of
spending her last months with dignity and respect at home.
While Ms. Gardner's wish may seem small, the task of managing her
care is not. Each week family members meet to organize their schedules
in an effort to provide over 20 hours of daily care for Ms. Gardner.
Working relentlessly, and at a considerable cost, the Gardner family
manages to provide around-the-clock care while balancing both work and
their family lives. All this effort comes at a great cost, both
emotionally and financially. The Gardners have been able to locate some
funding to help support the care for Ms. Gardner; however, the family
continues to bear considerable costs. These costs include weekly
nursing visits that cost $102 per visit, emergency response service at
$30 a month, daily hospice service at $32 an hour and not to mention
the hours and hours of personal time donated by the family.
The Long-Term Care and Retirement Security Act would help the 22
million family caregivers like the Gardners. A $3,000 tax credit would
help to pay for Ms. Gardner's monthly hospice care, weekly nurse visits
or help to hire a nurse to cover some of the time that the family
currently donates. This legislation would also help the increasing
number of families placed in the difficult situation by allowing them
to purchase long-term care insurance. Had this legislation been enacted
earlier, long-term care insurance would
[[Page S8571]]
have been an affordable option for Ms. Gardner, alleviating the
difficult situation that her family currently faces.
As it has in the past, the bill that Senator Graham and I are
introducing today has been endorsed by both the AARP and the Health
Insurance Association of America. A companion bill sponsored by
Representatives Nancy Johnson, Karen Thurman and Earl Pomeroy is
pending in the House of Representatives.
An aging nation has no time to waste in preparing for long-term care,
and the need to help people afford long-term care is more pressing than
ever. I look forward to working with Senator Graham and our colleagues
in the Senate to get our bill passed into law as soon as possible.
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. 1335
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 ``Long-Term Care and
Retirement Security Act of 2003''.
SEC. 2. TREATMENT OF PREMIUMS ON QUALIFIED LONG-TERM CARE
INSURANCE CONTRACTS.
(a) In General.--Part VII of subchapter B of chapter 1 of
the Internal Revenue Code of 1986 (relating to additional
itemized deductions) is amended by redesignating section 223
as section 224 and by inserting after section 222 the
following new section:
``SEC. 223. PREMIUMS ON QUALIFIED LONG-TERM CARE INSURANCE
CONTRACTS.
``(a) In General.--In the case of an individual, there
shall be allowed as a deduction an amount equal to the
applicable percentage of the amount of eligible long-term
care premiums (as defined in section 213(d)(10)) paid during
the taxable year for coverage for the taxpayer and the
taxpayer's spouse and dependents under a qualified long-term
care insurance contract (as defined in section 7702B(b)).
``(b) Applicable Percentage.--For purposes of subsection
(a)--
``(1) In general.--Except as otherwise provided in this
subsection, the applicable percentage shall be determined in
accordance with the following table based on the number of
years of continuous coverage (as of the close of the taxable
year) of the individual under any qualified long-term care
insurance contracts (as defined in section 7702B(b)):
``If the number of years of continuous coThe applicable percentage is--
Less than 1..................................................60
At least 1 but less than 2...................................70
At least 2 but less than 3...................................80
At least 3 but less than 4...................................90
At least 4.................................................100.
``(2) Special rules for individuals who have attained age
55.--In the case of an individual who has attained age 55 as
of the close of the taxable year, the following table shall
be substituted for the table in paragraph (1):
``If the number of years of continuous coThe applicable percentage is--
Less than 1..................................................70
At least 1 but less than 2...................................85
At least 2.................................................100.
``(3) Only coverage after 2003 taken into account.--Only
coverage for periods after December 31, 2003, shall be taken
into account under this subsection.
``(4) Continuous coverage.--An individual shall not fail to
be treated as having continuous coverage if the aggregate
breaks in coverage during any 1-year period are less than 60
days.
``(c) Coordination With Other Deductions.--Any amount paid
by a taxpayer for any qualified long-term care insurance
contract to which subsection (a) applies shall not be taken
into account in computing the amount allowable to the
taxpayer as a deduction under section 162(l) or 213(a).''.
(b) Long-Term Care Insurance Permitted To Be Offered Under
Cafeteria Plans and Flexible Spending Arrangements.--
(1) Cafeteria plans.--Section 125(f) of the Internal
Revenue Code of 1986 (defining qualified benefits) is amended
by inserting before the period at the end ``, except that
such term shall include the payment of premiums for any
qualified long-term care insurance contract (as defined in
section 7702B) to the extent the amount of such payment does
not exceed the eligible long-term care premiums (as defined
in section 213(d)(10)) for such contract''.
(2) Flexible spending arrangements.--Section 106 of such
Code (relating to contributions by an employer to accident
and health plans) is amended by striking subsection (c).
(c) Conforming Amendments.--
(1) Section 62(a) of the Internal Revenue Code of 1986 is
amended by inserting after paragraph (18) the following new
paragraph:
``(19) Premiums on qualified long-term care insurance
contracts.--The deduction allowed by section 223.''.
(2) The table of sections for part VII of subchapter B of
chapter 1 of such Code is amended by striking the last item
and inserting the following new items:
``Sec. 223. Premiums on qualified long-term care insurance contracts.
``Sec. 224. Cross reference.''.
(d) Effective Dates.--
(1) In general.--Except as provided in paragraph (2), the
amendments made by this section shall apply to taxable years
beginning after December 31, 2003.
(2) Cafeteria plans and flexible spending arrangements.--
The amendments made by subsection (b) shall apply to taxable
years beginning after December 31, 2004.
SEC. 3. CREDIT FOR TAXPAYERS WITH LONG-TERM CARE NEEDS.
(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. CREDIT FOR TAXPAYERS WITH LONG-TERM CARE NEEDS.
``(a) Allowance of Credit.--
``(1) In general.--There shall be allowed as a credit
against the tax imposed by this chapter for the taxable year
an amount equal to the applicable credit amount multiplied by
the number of applicable individuals with respect to whom the
taxpayer is an eligible caregiver for the taxable year.
``(2) Applicable credit amount.--For purposes of paragraph
(1), the applicable credit amount shall be determined in
accordance with the following table:
``For taxable years beginning in calenThe applicable credit amount is--
2004.......................................................$1,000
2005....................................................... 1,500
2006....................................................... 2,000
2007....................................................... 2,500
2008 or thereafter........................................ 3,000.
``(b) Limitation Based on Adjusted Gross Income.--
``(1) In general.--The amount of the credit allowable under
subsection (a) shall be reduced (but not below zero) by $100
for each $1,000 (or fraction thereof) by which the taxpayer's
modified adjusted gross income exceeds the threshold amount.
For purposes of the preceding sentence, the term `modified
adjusted gross income' means adjusted gross income increased
by any amount excluded from gross income under section 911,
931, or 933.
``(2) Threshold amount.--For purposes of paragraph (1), the
term `threshold amount' means--
``(A) $150,000 in the case of a joint return, and
``(B) $75,000 in any other case.
``(3) Indexing.--In the case of any taxable year beginning
in a calendar year after 2004, each dollar amount contained
in paragraph (2) shall be increased by an amount equal to the
product of--
``(A) such dollar amount, and
``(B) the medical care cost adjustment determined under
section 213(d)(10)(B)(ii) for the calendar year in which the
taxable year begins, determined by substituting `2003' for
`1996' in subclause (II) thereof.
If any increase determined under the preceding sentence is
not a multiple of $50, such increase shall be rounded to the
next lowest multiple of $50.
``(c) Definitions.--For purposes of this section--
``(1) Applicable individual.--
``(A) In general.--The term `applicable individual' means,
with respect to any taxable year, any individual who has been
certified, before the due date for filing the return of tax
for the taxable year (without extensions), by a physician (as
defined in section 1861(r)(1) of the Social Security Act) as
being an individual with long-term care needs described in
subparagraph (B) for a period--
``(i) which is at least 180 consecutive days, and
``(ii) a portion of which occurs within the taxable year.
Notwithstanding the preceding sentence, a certification shall
not be treated as valid unless it is made within the 39\1/2\
month period ending on such due date (or such other period as
the Secretary prescribes).
``(B) Individuals with long-term care needs.--An individual
is described in this subparagraph if the individual meets any
of the following requirements:
``(i) The individual is at least 6 years of age and--
``(I) is unable to perform (without substantial assistance
from another individual) at least 3 activities of daily
living (as defined in section 7702B(c)(2)(B)) due to a loss
of functional capacity, or
``(II) requires substantial supervision to protect such
individual from threats to health and safety due to severe
cognitive impairment and is unable to perform, without
reminding or cuing assistance, at least 1 activity of daily
living (as so defined), or to the extent provided in
regulations prescribed by the Secretary (in consultation with
the Secretary of Health and Human Services), is unable to
engage in age appropriate activities.
``(ii) The individual is at least 2 but not 6 years of age
and is unable due to a loss of functional capacity to perform
(without substantial assistance from another individual) at
least 2 of the following activities: eating, transferring, or
mobility.
[[Page S8572]]
``(iii) The individual is under 2 years of age and requires
specific durable medical equipment by reason of a severe
health condition or requires a skilled practitioner trained
to address the individual's condition to be available if the
individual's parents or guardians are absent.
``(2) Eligible caregiver.--
``(A) In general.--A taxpayer shall be treated as an
eligible caregiver for any taxable year with respect to the
following individuals:
``(i) The taxpayer.
``(ii) The taxpayer's spouse.
``(iii) An individual with respect to whom the taxpayer is
allowed a deduction under section 151(c) for the taxable
year.
``(iv) An individual who would be described in clause (iii)
for the taxable year if section 151(c)(1)(A) were applied by
substituting for the exemption amount an amount equal to the
sum of the exemption amount, the standard deduction under
section 63(c)(2)(C), and any additional standard deduction
under section 63(c)(3) which would be applicable to the
individual if clause (iii) applied.
``(v) An individual who would be described in clause (iii)
for the taxable year if--
``(I) the requirements of clause (iv) are met with respect
to the individual, and
``(II) the requirements of subparagraph (B) are met with
respect to the individual in lieu of the support test of
section 152(a).
``(B) Residency test.--The requirements of this
subparagraph are met if an individual has as his principal
place of abode the home of the taxpayer and--
``(i) in the case of an individual who is an ancestor or
descendant of the taxpayer or the taxpayer's spouse, is a
member of the taxpayer's household for over half the taxable
year, or
``(ii) in the case of any other individual, is a member of
the taxpayer's household for the entire taxable year.
``(C) Special rules where more than 1 eligible caregiver.--
``(i) In general.--If more than 1 individual is an eligible
caregiver with respect to the same applicable individual for
taxable years ending with or within the same calendar year, a
taxpayer shall be treated as the eligible caregiver if each
such individual (other than the taxpayer) files a written
declaration (in such form and manner as the Secretary may
prescribe) that such individual will not claim such
applicable individual for the credit under this section.
``(ii) No agreement.--If each individual required under
clause (i) to file a written declaration under clause (i)
does not do so, the individual with the highest modified
adjusted gross income (as defined in section 32(c)(5)) shall
be treated as the eligible caregiver.
``(iii) Married individuals filing separately.--In the case
of married individuals filing separately, the determination
under this subparagraph as to whether the husband or wife is
the eligible caregiver shall be made under the rules of
clause (ii) (whether or not one of them has filed a written
declaration under clause (i)).
``(d) Identification Requirement.--No credit shall be
allowed under this section to a taxpayer with respect to any
applicable individual unless the taxpayer includes the name
and taxpayer identification number of such individual, and
the identification number of the physician certifying such
individual, on the return of tax for the taxable year.
``(e) Taxable Year Must Be Full Taxable Year.--Except in
the case of a taxable year closed by reason of the death of
the taxpayer, no credit shall be allowable under this section
in the case of a taxable year covering a period of less than
12 months.''.
(b) Conforming Amendments.--
(1) Section 6213(g)(2) of the Internal Revenue Code of 1986
is amended by striking ``and'' at the end of subparagraph
(L), by striking the period at the end of subparagraph (M)
and inserting ``, and'', and by inserting after subparagraph
(M) the following new subparagraph:
``(N) an omission of a correct TIN or physician
identification required under section 25C(d) (relating to
credit for taxpayers with long-term care needs) to be
included on a return.''.
(2) 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. Credit for taxpayers with long-term care needs.''.
(c) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2003.
SEC. 4. ADDITIONAL CONSUMER PROTECTIONS FOR LONG-TERM CARE
INSURANCE.
(a) Additional Protections Applicable to Long-Term Care
Insurance.--Subparagraphs (A) and (B) of section 7702B(g)(2)
of the Internal Revenue Code of 1986 (relating to
requirements of model regulation and Act) are amended to read
as follows:
``(A) In general.--The requirements of this paragraph are
met with respect to any contract if such contract meets--
``(i) Model regulation.--The following requirements of the
model regulation:
``(I) Section 6A (relating to guaranteed renewal or
noncancellability), and the requirements of section 6B of the
model Act relating to such section 6A.
``(II) Section 6B (relating to prohibitions on limitations
and exclusions).
``(III) Section 6C (relating to extension of benefits).
``(IV) Section 6D (relating to continuation or conversion
of coverage).
``(V) Section 6E (relating to discontinuance and
replacement of policies).
``(VI) Section 7 (relating to unintentional lapse).
``(VII) Section 8 (relating to disclosure), other than
section 8F thereof.
``(VIII) Section 11 (relating to prohibitions against post-
claims underwriting).
``(IX) Section 12 (relating to minimum standards).
``(X) Section 13 (relating to requirement to offer
inflation protection), except that any requirement for a
signature on a rejection of inflation protection shall permit
the signature to be on an application or on a separate
form.
``(XI) Section 25 (relating to prohibition against
preexisting conditions and probationary periods in
replacement policies or certificates).
``(XII) The provisions of section 26 relating to contingent
nonforfeiture benefits, if the policyholder declines the
offer of a nonforfeiture provision described in paragraph
(4).
``(ii) Model act.--The following requirements of the model
Act:
``(I) Section 6C (relating to preexisting conditions).
``(II) Section 6D (relating to prior hospitalization).
``(III) The provisions of section 8 relating to contingent
nonforfeiture benefits, if the policyholder declines the
offer of a nonforfeiture provision described in paragraph
(4).
``(B) Definitions.--For purposes of this paragraph--
``(i) Model provisions.--The terms `model regulation' and
`model Act' mean the long-term care insurance model
regulation, and the long-term care insurance model Act,
respectively, promulgated by the National Association of
Insurance Commissioners (as adopted as of September 2000).
``(ii) Coordination.--Any provision of the model regulation
or model Act listed under clause (i) or (ii) of subparagraph
(A) shall be treated as including any other provision of such
regulation or Act necessary to implement the provision.
``(iii) Determination.--For purposes of this section and
section 4980C, the determination of whether any requirement
of a model regulation or the model Act has been met shall be
made by the Secretary.''.
(b) Excise Tax.--Paragraph (1) of section 4980C(c) of the
Internal Revenue Code of 1986 (relating to requirements of
model provisions) is amended to read as follows:
``(1) Requirements of model provisions.--
``(A) Model regulation.--The following requirements of the
model regulation must be met:
``(i) Section 9 (relating to required disclosure of rating
practices to consumer).
``(ii) Section 14 (relating to application forms and
replacement coverage).
``(iii) Section 15 (relating to reporting requirements),
except that the issuer shall also report at least annually
the number of claims denied during the reporting period for
each class of business (expressed as a percentage of claims
denied), other than claims denied for failure to meet the
waiting period or because of any applicable preexisting
condition.
``(iv) Section 22 (relating to filing requirements for
marketing).
``(v) Section 23 (relating to standards for marketing),
including inaccurate completion of medical histories, other
than paragraphs (1), (6), and (9) of section 23C, except
that--
``(I) in addition to such requirements, no person shall, in
selling or offering to sell a qualified long-term care
insurance contract, misrepresent a material fact; and
``(II) no such requirements shall include a requirement to
inquire or identify whether a prospective applicant or
enrollee for long-term care insurance has accident and
sickness insurance.
``(vi) Section 24 (relating to suitability).
``(vii) Section 29 (relating to standard format outline of
coverage).
``(viii) Section 30 (relating to requirement to deliver
shopper's guide).
The requirements referred to in clause (vi) shall not include
those portions of the personal worksheet described in
Appendix B relating to consumer protection requirements not
imposed by section 4980C or 7702B.
``(B) Model act.--The following requirements of the model
Act must be met:
``(i) Section 6F (relating to right to return), except that
such section shall also apply to denials of applications and
any refund shall be made within 30 days of the return or
denial.
``(ii) Section 6G (relating to outline of coverage).
``(iii) Section 6H (relating to requirements for
certificates under group plans).
``(iv) Section 6I (relating to policy summary).
``(v) Section 6J (relating to monthly reports on
accelerated death benefits).
``(vi) Section 7 (relating to incontestability period).
``(C) Definitions.--For purposes of this paragraph, the
terms `model regulation' and `model Act' have the meanings
given such terms by section 7702B(g)(2)(B).''.
(c) Effective Date.--The amendments made by this section
shall apply to policies issued more than 1 year after the
date of the enactment of this Act.
Mr. GRAHAM of Florida. Mr. President, there has been a renewed
interest in health issues, particularly the plight
[[Page S8573]]
of the uninsured. That issue presents lawmakers with significant
challenges, particularly finding the right mixes of programs to provide
health care coverage to the vastly different populations that make up
this group.
There is an equally daunting health care issue facing our country,
but it is one that has received far less attention. That issue is the
increasing need for long-term care. Over 13 million people in the
United States need help with basic activities of daily living such as
eating, getting in and out of bed, getting around inside, dressing,
bathing and using the toilet. While many Americans believe that long-
term care is an issue primarily affecting seniors, the reality is that
5.2 million adults between the ages of 18 to 64 and over 450,000
children need long-term care services. These numbers are expected to
double as the baby boom generation begins to retire.
Most long-term is provided at home or in the community by informal
caregivers. However, in situations where individuals must enter nursing
homes or other institutional facilities, costs are paid largely out-of-
pocket. Such a financing structure jeopardizes the retirement security
of many Americans who have worked hard their entire lives.
In order to help families address their long-term care needs, Senator
Grassley and I are re-introducing the ``Long-Term Care and Retirement
Security Act.'' This legislation provides two important tools to help
Americans and their families meet their immediate and future long-term
care needs--an above-the-line income tax deduction for the purchase of
long-term care insurance and a caregiver tax credit.
First, the bill provides an above-the-line deduction for long-term
care premiums to make long-term care insurance more affordable for a
greater number of Americans. Today, such premiums are deductible, but
the availability of the deduction is severely limited. First, the
current deduction is available only for the thirty percent of taxpayers
who itemize their deductions. That leaves the remaining seventy percent
of taxpayers with absolutely no benefit. Second, the deduction is
limited to an amount, which in addition to other medical expenses
exceeds 7.5 percent of the taxpayers adjusted gross income. This AGI
limit further decreases the utilization of the current deduction.
The Graham-Grassley legislation removes these restrictions and makes
the deduction for long-term care premiums available to all taxpayers.
In order to provide sufficient incentives for families to maintain
long-term care coverage, the deduction allowed under this bill
increases the longer the policy is maintained. The deduction starts at
60 percent for premiums paid during the first year of coverage and
gradually increases each year thereafter until the deduction reaches
100 percent after at least 4 years of continuous coverage. This
schedule is accelerated for those age 55 or older. For them, the
deduction starts at 70 percent for the first year and increases to 100
percent with at least two years of continuous coverage.
Second, the bill provides an income tax credit for taxpayers with
long-term care needs. The credit is phased in over 4 years, starting at
$1,000 for 2003 and eventually reaching $3,000. To target assistance to
those most in need, the credit phases out for married couples with
income above $150,000, $75,000 for single taxpayers.
In addition to the deduction and tax credit, our bill allows
employers to offer long-term care insurance under cafeteria plans and
include long-term care services as reimbursable costs under flexible
spending arrangements. The bill also updates the requirements that
long-term care policies must meet in order to qualify for the income
tax deduction. These updated requirements reflect the most recent model
regulations and code issued by the National Association of Insurance
Commissioners.
I urge my colleagues to join Senator Grassley and me in cosponsoring
this legislation.
______
By Mr. BROWNBACK (for himself and Mr. Kennedy):
S. 1336. A bill to allow North Koreans to apply for refugee status or
asylum; to the Committee on the Judiciary.
Mr. BROWNBACK. 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. 1336
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. PURPOSE.
The purpose of this Act is to ensure that North Koreans are
not barred from eligibility for refugee status or asylum in
the United States on account of any legal right to
citizenship they may enjoy under the Constitution of the
Republic of Korea. This Act is not intended in any way to
prejudice whatever rights to citizenship North Koreans may
enjoy under the Constitution of the Republic of Korea.
SEC. 2. TREATMENT OF NATIONALS OF THE DEMOCRATIC PEOPLE'S
REPUBLIC OF KOREA.
For purposes of eligibility for refugee status under
section 207 of the Immigration and Nationality Act (8 U.S.C.
1157), or for asylum under section 208 of such Act (8 U.S.C.
1158), a national of the Democratic People's Republic of
Korea shall not be considered a national of the Republic of
Korea.
______
By Mr. SMITH:
S. 1337. A bill to establish an incentive program to promote
effective safety belt laws and increase safety belt use; to the
Committee on Commerce, Science, and Transportation.
Mr. SMITH of Oregon. Mr. President, I rise today to introduce the
Safe, Efficient, Automobile Travel to Better Ensure Lives in Transit,
SEAT BELT, Act of 2003.
This bill will establish an incentive grant program that rewards
States that have enacted or will enact primary seat belt laws. The bill
also gives a premium to those States that increase seat belt usage.
According to the National Highway Traffic Safety Administration,
NHTSA, motor vehicle crashes are responsible for 95 percent of all
transportation-related deaths and 99 percent of all transportation-
related injuries. It is estimated that in 2002, 42,850 people were
killed in vehicle crashes and roughly 3 million more were injured.
Motor vehicle crashes are ranked as the leading cause of death for
Americans ages 1 to 34.
In addition to the thousands of transportation-related deaths and
injuries, the economic costs associated with vehicle crashes constitute
a serious public health problem and significant fiscal burden to the
Nation. The total annual economic cost to the U.S. economy of all motor
vehicle crashes is an astonishing $230.6 billion, or 2.3 percent of the
U.S. gross domestic product. This translates into an average of $820
for every person living in the United States.
Increasing seat belt usage is a guaranteed and proven way to lower
the number of transportation-related deaths and costs associated with
vehicle crashes. In 2002, 59 percent of vehicle occupants killed were
not restrained by seat belts or child safety seats. Safety experts
agree that the best short-term and most immediate way to reduce traffic
crash fatalities and serious injuries is to increase seat belt use.
Experience in the United States and other countries has shown that
sound laws coupled with high-visibility enforcement are the keys to
high seat belt use. Currently, the effectiveness of most State seat
belt laws is reduced by secondary enforcement provisions that preclude
law enforcement from stopping an unbelted motorist unless another
traffic law violation is also observed.
Primary enforcement seat belt laws are significantly correlated with
higher seat belt usage levels. States with primary enforcement laws
have an average of 80 percent belt usage, compared to just 69 percent
in States having secondary enforcement laws. Currently, only 19
jurisdictions have primary seat belt laws. Nearly 4000 lives would be
saved each year if seat belt use were to increase from the national
average of 75 percent to 90 percent.
The SEAT BELT Act creates two grant programs to encourage seat belt
use. The first grant program rewards States that have or will have
primary seat belt enforcement. Forty percent of the available funds for
this program will be applied to the first grant category.
Every State that enacts a primary seat belt law or currently has one
will receive two times their Section 402 allotment. Those States that
enact a primary seat belt law sooner will receive
[[Page S8574]]
their incentive grant sooner. Any funds not obligated by the end of FY
2008 will be made available to States qualified to receive funds under
the second grant category.
The second grant program would reward States that increase their seat
belt usage. Sixty percent of the available funds for this program will
be applied to the second grant category. The Secretary of
Transportation shall carry out this program which is designed to
maximize the effectiveness of the awarded funds and the fairness of the
distribution of such funds; increase the national seat belt usage rate
as expeditiously as possible; reward States that maintain a seat belt
usage rate above 85 percent, as determined by NHTSA; and reward States
that demonstrate an increase in their seat belt usage rates.
The SEAT BELT Act will ensure that funds are distributed fairly by
rewarding the 19 jurisdictions, including my home state of Oregon,
which took an early lead to enact a primary seat belt law. The Act also
provides sufficient financial incentives to persuade the States that
have not enacted a primary seat belt law to do so. And lastly, the Act
provides continuing incentives to States to encourage them to have high
seat belt usage rates and rewards them for their persistence in
striving towards higher usage rates.
I urge my colleagues to cosponsor this important legislation and 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. 1337
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 ``Safe, Efficient Automobile
Travel to Better Ensure Lives in Transit (SEATBELT) Act of
2003''.
SEC. 2. FINDINGS.
Congress makes the following findings:
(1) According to the National Highway Traffic Safety
Administration (NHTSA), motor vehicle crashes are responsible
for 95 percent of all transportation-related deaths and 99
percent of all transportation-related injuries.
(2) Motor vehicle crashes are the leading cause of death
for Americans between the ages of 1 and 34.
(3) It is estimated that, in 2002, 42,850 people were
killed and approximately 3,000,000 people were injured in
vehicle crashes.
(4) NHTSA estimates that if safety belt use were to
increase from 75 percent to 90 percent, nearly 4,000 lives
would be saved each year.
SEC. 3. SAFETY BELT INCENTIVE GRANTS.
(a) Requirements for Grant Programs.--
(1) In general.--Chapter 4 of title 23, United States Code,
is amended by adding at the end the following new section:
``Sec. 412. Safety belt incentive grants
``(a) Primary Enforcement Safety Belt Use Law Incentive
Grants.--
``(1) Eligibility.--The Secretary shall make a grant to
each State that, as determined by the Secretary, has in
effect a primary enforcement safety belt use law.
``(2) Amount of grant.--The amount of a grant for which a
State qualifies under this subsection shall equal the amount
of funds allocated to the State under section 402 of this
title for fiscal year 2003 multiplied by 2.
``(3) Distribution of funds.--Funds awarded to a State
under this subsection shall be distributed over a 2-year
period.
``(4) Funds available for grant program.--Forty percent of
the funds made available to carry out the occupant protection
programs under section 405 of this title in a fiscal year
shall be available for grants under this subsection during
such fiscal year.
``(5) Disposition of unused funds.--Any funds available for
grants under this subsection that have not been awarded by
the end of fiscal year 2008 shall be made available for the
safety belt usage grant program under subsection (b).
``(b) Safety Belt Usage Award Grants.--
``(1) In general.--The Secretary shall carry out a program
for making safety belt usage award grants to eligible States.
The program shall be designed to--
``(A) maximize the effectiveness of the awarded funds and
the fairness of the distribution of such funds;
``(B) increase the national seat belt usage rate as
expeditiously as possible;
``(C) reward States that maintain a seat belt usage rate
above 85 percent (as determined by the National Highway
Traffic Safety Administration); and
``(D) reward States that demonstrate an increase in their
seat belt usage rates.
``(2) Funds available for grant program.--Sixty percent of
the funds made available to carry out the occupant protection
programs under section 405 of this title in a fiscal year
shall be available for grants under this subsection during
such fiscal year.
``(c) Use of Funds.--Grants awarded under this section may
be used to carry out activities under this title.
``(d) Definitions.--In this section:
``(1) Passenger motor vehicle.--The term `passenger motor
vehicle' has the meaning given the term in section 405(f)(5)
of this title.
``(2) Primary Enforcement Safety Belt Use Law.--The term
`primary enforcement safety belt use law' means a law that
meets the criteria for such laws published by the Secretary
in a rule relating to the grant program under this section.
``(3) Safety belt.--The term `safety belt' has the meaning
given the term in section 405(f)(6) of this title.''.
(2) Clerical amendment.--The table of sections at the
beginning of that chapter is amended by inserting after the
item relating to section 411 the following new item:
``412. Safety belt incentive grants.''.
(b) Interim Final Rule.--Not later than 90 days after the
date of the enactment of this Act, the Secretary of
Transportation shall publish an interim final rule listing
the criteria for awarding grants pursuant to section 412 of
title 23, United States Code, as added by subsection (a),
including the criteria to be used by the Secretary in
determining whether a law is a primary enforcement safety
belt use law for purposes of such section.
____________________