Congressional Record, Volume 151 Issue 72 (Thursday, May 26, 2005)

[Congressional Record Volume 151, Number 72 (Thursday, May 26, 2005)]
[Senate]
[Pages S6023-S6057]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

By Mr. LUGAR (for himself and Mr. Hagel):
S. 1129. A bill to provide authorizations of appropriations for
certain development banks, and for other purposes; to the Committee on
Foreign Relations.
Mr. LUGAR. Mr. President, I rise today to introduce legislation
authorizing replenishment of funds to three of the five multilateral
development banks, as requested by the U.S. Department of the Treasury.
In addition, this legislation includes a long list of reform measures,
intended to bring about transparency and accountability at all of the
MDBs--the World Bank, the African Development Bank, the Asian Bank, the
Inter-American Bank and the European Bank for Reconstruction and
Development.
The World Bank, was the first MDB to be established in 1944, followed
by the African Development Bank, 1964 and the Asian Development Bank,
1966. The shared original purpose of the three banks was to encourage
economic development and reduce poverty in geographic regions impacted
by the respective institutions.
I support the original operating purpose of the banks. However, I am
deeply concerned that massive amounts of funds are not utilized as
originally intended, due to diversion of those funds.
In 2003, I received information from credible sources within the MDBs
alleging corruption on various fronts. As a result, I instructed staff
of the Senate Foreign Relations Committee to commence collecting
information on the anti-corruption strategies, and successes of each
bank.
Based on the initial findings, I launched an investigation, reviewing
corruption at the banks and their efforts to combat it. To date, I have
chaired four hearings and sent letters of inquiry regarding individual
projects to the bank presidents. Committee staff have interviewed
scores of NGO representatives, bank insiders, academics and others, and
have visited problem projects in six countries. Far too often, projects
intended to boost economic development are derailed, and the poor
suffer, unable to realize projected benefits in quality health care,
clean water and education.
While the United States is one of dozens of donors, the financial
contribution of American taxpayers over the years to these three
institutions alone

[[Page S6024]]

exceeds $30 billion. The Congress has an obligation to our own
citizens, as well as the intended beneficiaries of MDB projects, to
press for transparency and accountability in the banks' operations.
Through adoption of the package of reforms I propose, the United
States would set an example for other donor countries, encouraging
their officials to also press for transparency and accountability.
I am pleased there is good news to report. The World Bank has
embarked on an anti-corruption voluntary cooperation initiative, based
in part on the Pentagon's anticorruption efforts. In addition, leading
government officials from Italy, Spain and other countries have
contacted the Committee, asking for more information about our review,
and comparing strategies on ways of improving bank transparency.
Finally, we have witnessed incremental improvements of greater
transparency among the banks as a result of the Committee's ongoing
work.
However, there is more to accomplish. This substantive package of
reforms is based on our findings to date, and the input of many who
support the original stated purpose of the multilateral development
banks.
The Committee's oversight work continues, with the goal of enduring
results.
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. 1129

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 ``Development Bank Reform and
Authorization Act of 2005''.

SEC. 2. FINDINGS.

Congress makes the following findings:
(1) The United States has strong national security and
humanitarian interests in alleviating poverty and promoting
development around the world.
(2) The World Bank, the African Development Bank, the Asian
Development Bank, the European Bank for Reconstruction and
Development, and the Inter-American Development Bank leverage
the resources that the United States and other donors can
devote to such goals.
(3) Contributions from the United States and other donors
to the multilateral development banks must be well managed so
that the mission of such banks is fully realized and not
undermined by corruption. Bribes can influence important bank
decisions on projects and contractors and misuse of funds can
inflate project costs, cause projects to fail, and undermine
development effectiveness.
(4) Officials of the World Bank have identified corruption
as the single greatest obstacle to economic and social
development. Corruption undermines development by distorting
the rule of law and weakening the institutional foundation on
which economic growth depends.
(5) Officials of the World Bank have determined that the
harmful effects of corruption are especially severe on the
poor, who are hardest hit by economic decline, are most
reliant on the provision of public services, and are least
capable of paying the extra costs associated with bribery,
fraud, and the misappropriation of economic privileges.
(6) In hearings before the Foreign Relations Committee of
the Senate, it was demonstrated that--
(A) significant multilateral development bank funding has
been lost to corruption and it is difficult to ascertain such
amount precisely, in part because the multilateral
development banks have not implemented procedures to
calculate such amounts, either in the aggregate or on a
country basis;
(B) the multilateral development banks are taking action to
address fraud and corruption but additional measures remain
to be carried out;
(C) the capability of anti-corruption mechanisms are not
consistent among the multilateral development banks and
divergences in anti-corruption policies exist that may hinder
coordination on fighting corruption;
(D) weaknesses in whistleblower policy and practice exist
at the multilateral development banks, to varying degree,
that impede anti-fraud and anti-corruption efforts;
(E) greater transparency is necessary to provide effective
development aid;
(F) the Secretary of the Treasury encourages anti-
corruption efforts at the multilateral development banks and
reviews loans made by such banks, however, the United States
has limited ability to investigate the misuse of funds from
such banks; and
(G) in some cases, the countries bearing the cost of
prosecuting corruption related to the multilateral
development banks are the countries that can least afford
such costs, for example, the Government of Lesotho incurred
considerable expense, despite competing priorities, such as
those arising from an HIV/AIDS rate of more than 25 percent
in that country, to investigate and prosecute fraud and
corruption related to a project that received funding from
the World Bank and the World Bank did not contribute money
towards the prosecution or investigation.
(7) The General Accounting Office issued a report in 2001
that evaluated the external audit reporting of the African
Development Bank, the Asian Development Bank, the European
Bank for Reconstruction and Development, and the Inter-
American Development Bank and a report in 2000 that evaluated
the internal controls of the World Bank, and recommended
measures to strengthen such audit reporting and controls.
(8) The International Financial Institutions Advisory
Commission (also known as the ``Meltzer Commission'')
concluded in 2000, among other things, that--
(A) pressure to lend for lending's sake is built into the
structure of the multilateral development banks;
(B) although several of the multilateral development banks
recognize this problem and have called attention to the need
for change, there is, at most, weak counterbalance to the
pressure to lend; and
(C) the multilateral development banks' systems for project
evaluation, performance evaluation, and project selection
must be improved, and that such evaluation should be a
repetitive process spread over time, including many years
after final disbursement of funds.

SEC. 3. DEFINITIONS.

In this Act:
(1) Appropriate congressional committees.--The term
``appropriate congressional committees'' means the Committee
on Foreign Relations and the Committee on Banking, Housing,
and Urban Affairs of the Senate and the Committee on
International Relations and the Committee on Financial
Services of the House of Representatives.
(2) Group of 7.--The term ``Group of 7'' means Canada,
France, Germany, Italy, Japan, the United Kingdom, and the
United States.
(3) Group of 8.--The term ``Group of 8'' means the Group of
7 and Russia.
(4) Multilateral development banks.--The term
``multilateral development banks'' means the African
Development Bank, the Asian Development Bank, the European
Bank for Reconstruction and Development, the Inter-American
Development Bank, the World Bank, and any subsidiary or
affiliate of such institutions.
(5) Person.--The term ``person'' includes a government, a
government-controlled entity, a corporation, a company, an
association, a firm, a partnership, a society, and a joint
stock company, as well as an individual.
(6) Secretary.--Except as otherwise provided, the term
``Secretary'' means the Secretary of the Treasury.
(7) World bank.--The term ``World Bank'' means the
International Bank for Reconstruction and Development, the
International Development Association, the International
Finance Corporation, and the Multilateral Investment
Guarantee Agency and any subsidiary or affiliate of such
institutions.

SEC. 4. REFORMS.

(a) Authority.--The Secretary is authorized to seek the
creation of a pilot program that establishes an Anti-
Corruption Trust at the World Bank, as described in this
section.
(b) Purposes.--The purposes of the Anti-Corruption Trust
pilot program shall include--
(1) to assist poor countries in investigations and
prosecutions of fraud and corruption related to a loan,
grant, or credit of the World Bank; and
(2) to determine whether such a program should be carried
out at other multilateral development banks.
(c) Repayment of Funds.--If a poor country assesses a fine
or receives any renumeration as part of a prosecution paid
for with funds from the Anti-Corruption Trust pilot program,
such country shall repay the amount received from the Trust
until the total amount received by such country is repaid.
(d) Monitoring.--The Secretary shall be responsible for
establishing a system for monitoring the disbursement and use
of funds from the Anti-Corruption Trust pilot program and
promoting access to such funds by poor countries that are
challenged by the high cost of investigating and prosecuting
corruption and fraud linked to a loan from, or a project
funded by, the World Bank.
(e) Other Donors.--The Secretary shall encourage other
donors to the multilateral development banks to contribute
funds to the Anti-Corruption Trust.
(f) Poor Countries Defined.--In this section, the term
``poor countries'' means countries eligible to borrow from
the International Development Association, as such
eligibility is determined by gross national product per
capita, lack of creditworthiness to borrow on market terms,
and good policy performance.
(g) Reports.--
(1) Report on implementation.--Not later than September 1,
2006, the Secretary shall submit to the appropriate
congressional committees a report that describes the actions
taken to establish the Anti-Corruption Trust as described in
this section.
(2) Report on evaluation.--Not later than September 1,
2007, the Secretary shall submit to the appropriate
congressional committees a report that--

[[Page S6025]]

(A) evaluates the effectiveness of the Anti-Corruption
Trust pilot program; and
(B) evaluates the feasibility of establishing similar
trusts at other multilateral development banks.
(h) Authorization of Appropriations.--There is authorized
to be appropriated to the Secretary such sums as may be
necessary for contribution on behalf of the United States to
an Anti-Corruption Trust if a pilot program establishing such
a Trust is established as described in this section.

SEC. 5. PROMOTION OF POLICY GOALS AT MULTILATERAL DEVELOPMENT
BANKS.

Title XV of the International Financial Institutions Act
(22 U.S.C. 262o) is amended by adding at the end the
following:

``SEC. 1505. PROMOTION OF POLICY GOALS.

``(a) Definitions.--In this section:
``(1) Appropriate congressional committees.--The term
`appropriate congressional committees' means the Committee on
Foreign Relations and the Committee on Banking, Housing, and
Urban Affairs of the Senate and the Committee on
International Relations and the Committee on Financial
Services of the House of Representatives.
``(2) Multilateral development banks.--The term
`multilateral development banks' means the African
Development Bank, the Asian Development Bank, the European
Bank for Reconstruction and Development, the Inter-American
Development Bank, the World Bank, and any subsidiary or
affiliate of such institutions.
``(3) Person.--The term `person' includes a government, a
government-controlled entity, a corporation, a company, an
association, a firm, a partnership, a society, and a joint
stock company, as well as an individual.
``(4) Secretary.--Except as otherwise provided, the term
`Secretary' means the Secretary of the Treasury.
``(5) World bank.--The term `World Bank' means the
International Bank for Reconstruction and Development, the
International Development Association, the International
Finance Corporation, and the Multilateral Investment
Guarantee Agency, and any subsidiary or affiliate of such
institutions.
``(b) Transparency.--
``(1) Publication of statements.--
``(A) In general.--Not later than 60 calendar days after a
meeting of the board of directors of a multilateral
development bank, the Secretary shall provide for publication
on the Internet Web site of the Department of the Treasury
of--
``(i) the justification for each vote by the United States
Executive Director at the multilateral development bank on
any matter before the board of directors of the bank; and
``(ii) any written statement presented at the meeting by
such United States Executive Director at the bank
concerning--

``(I) a lending, grant, or guarantee operation which would
result or be likely to result in significant social or
environmental effects;
``(II) an institutional policy or strategy of the bank that
generates significant public interest, including operational
policies and sector or thematic strategies;
``(III) a project on which a claim has been made to the
inspection mechanism of the bank; or
``(IV) a case pending before the inspection mechanism of
the bank.

``(B) Redacted material.--The Secretary may redact material
from the material to be made available under subparagraph (A)
if the Secretary determines such material is too sensitive
for public distribution.
``(2) Voice and vote.--The Secretary shall instruct the
United States Executive Director at each multilateral
development bank to inform the bank of the publication policy
described in paragraph (3), and use the voice and vote of the
United States to implement such policy.
``(3) Publication policy.--
``(A) In general.--The publication policy referred to in
paragraph (2) is a policy that each multilateral development
bank shall--
``(i) make available to the public, including on the
Internet Web site of such bank, the loan, credit, and grant
documents, country assistance strategies, sector strategies,
and sector policies prepared by the bank that are to be
presented for endorsement or approval by the board of
directors of the bank, 15 calendar days prior to the date
that such document, strategy, or policy will be considered by
the board or, if not available at that time, at the time the
documents are distributed to the board;
``(ii) make available to the public all draft country
strategies 120 calendar days prior to consideration of such
strategies by the board of directors of the bank;
``(iii) make a concerted effort to distribute paper copies
of the material referred to in clauses (i) and (ii) to
communities affected by the documents referred to in such
clauses;
``(iv) make available to the public, including on the
Internet Web site of such bank, the minutes of a meeting of
the board of directors of the bank, not later than 60
calendar days after the date that the bank approves the
minutes of the board meeting;
``(v) make available to the public, including on the
Internet Web site of such bank, a summary of discussion of
the meeting of the board of directors of the bank, not later
than 90 calendar days after the date of the meeting;
``(vi) keep a written transcript or electronic recording of
each meeting of its board of directors and preserve the
transcript or recording for not less than 10 years after the
date of such meeting; and
``(vii) make available to the public a written transcript
or an electronic recording of a meeting of the board of
directors of the bank during the 5-year period beginning on
the date that is 5 years after the date of the meeting.
``(B) Redacted material.--The president of a multilateral
development bank may redact material from the material to be
made available under subparagraph (A) if the president of a
multilateral development bank determines such material is too
sensitive for public distribution.
``(c) Strengthening Development Bank Administration.--The
Secretary shall instruct the United States Executive Director
at each multilateral development bank to inform the bank of,
and use the voice and vote of the United States to achieve at
the bank, the following United States policy goals:
``(1) Each multilateral development bank shall require
mandatory financial disclosure of any possible or apparent
conflict of interest by each employee of the bank, consultant
to the bank, or independent expert to the bank whose duties
and responsibilities include, through decision or the
exercise of judgment, the taking of any action regarding--
``(A) contracting or procurement;
``(B) developing, administering, managing, or monitoring
loans, grants, programs, projects, subsidies, or other
conferred financial or operational benefits provided by the
bank; or
``(C) evaluating or auditing any project, program or
entity.
``(2) Each multilateral development bank shall reform the
`pressure to lend' incentive structure at such bank by
linking project design and implementation to staff
performance appraisals and shall require that staff increase
its focus on monitoring existing loans.
``(3) Each multilateral development bank shall continue
strengthening whistleblower policies at the bank to the level
of emerging standards for national and international law in
the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7201 et seq.), the
Inspector General Act of 1978 (5 U.S.C. App.), and the model
approved for member nations by the Organization of American
States to implement the Inter-American Convention Against
Corruption, done at Caracas on March 29, 1996.
``(4) All loan, credit, guarantee, and grant documents and
other agreements with borrowers shall include provisions for
the financial resources and conditionality necessary to
ensure that a person who obtains financial support from a
multilateral development bank complies with applicable bank
policies and national and international laws in carrying out
the terms and conditions of such documents and agreements,
including bank policies and national and international laws
pertaining to the comprehensive assessment and transparency
of the activities supported, such as those concerning public
consultation, access to information, public health, safety,
and environmental protection.
``(5) Each multilateral development bank shall develop
clear procedures setting forth the circumstances under which
a person will be barred from receiving a loan, contract,
grant, or credit from such bank, shall make such procedures
available to the public, and shall make the identities of
such person available to the public.
``(6) Each multilateral development bank shall coordinate
policies across international institutions on issues
including debarment, cross-debarment, procurement and
consultant guidelines, and fiduciary standards so that a
person that is debarred by one multilateral development bank
is automatically declared ineligible to conduct business with
the other multilateral development banks during the specified
ineligibility period.
``(d) Anti-Corruption Practices.--
``(1) Voice and vote.--The Secretary shall instruct the
United States Executive Director at each multilateral
development bank to inform the bank of the United States
anti-corruption policy described in paragraph (2), and use
the voice and vote of the United States to implement such
policy at the bank.
``(2) Anti-corruption policy.--The anti-corruption policy
referred to in paragraph (1) is the United States policy that
a person that receives money from a multilateral development
bank shall sign a code of conduct that embodies the standards
set out in section 104 of the Foreign Corrupt Practices Act
of 1977 (15 U.S.C. 78dd-2), and that prohibits such person
from corruptly in furtherance of an offer, payment, promise
to pay, or authorization of the payment of any money, or
offer, gift, promise to give, or authorization of the giving
of anything of value to any official for purposes, directly
or indirectly--
``(A)(i) influencing any act or decision of such official
in his or her official capacity;
``(ii) supporting any political party, political entity,
any official of a political party, or any candidate for
political office;
``(iii) inducing such official to do or omit to do any act
in violation of the lawful duty of such official; or
``(iv) securing any improper advantage; or
``(B) inducing such official to use the official's
influence with a government or instrumentality thereof, to
affect or influence any act or decision of such government or
instrumentality,
in order to assist such person in obtaining or retaining
business for or with, or directing business to, any other
person.
``(e) Strengthening Development Bank Auditing.--

[[Page S6026]]

``(1) Voice and vote.--The Secretary shall instruct the
United States Executive Director at each multilateral
development bank to inform the bank of, and use the voice and
vote of the United States to achieve at the bank, the
following United States policy goals:
``(A) Each multilateral development bank shall--
``(i) establish an independent Office of an Inspector
General, establish or strengthen an independent auditing
function at the bank, and require that the Inspector General
and the auditing function report directly to the board of
directors of the bank; and
``(ii) adopt and implement an internationally recognized
internal controls framework, allocate adequate staffing to
auditing and supervision, require external audits of internal
controls, and external and forensic audits of loans where
fraud is suspected.
``(B) Each multilateral development bank shall establish a
plan and schedule for conducting regular, independent audits
of internal management controls and procedures for meeting
operational objectives, complying with the policies of such
bank, and preventing fraud, and making reports describing the
scope and findings of such audits available to the public.
``(C) Each multilateral development bank shall establish
effective procedures for the receipt, retention, and
treatment of--
``(i) complaints received by the bank regarding fraud,
accounting, mismanagement, internal accounting controls, or
auditing matters; and
``(ii) the confidential, anonymous submission, particularly
by employees of the bank, of concerns regarding fraud,
accounting, mismanagement, internal accounting controls, or
auditing matters.
``(D) Each multilateral development bank shall post on the
Internet Web site of such bank an annual report containing
statistical summaries and case studies of the fraud and
corruption cases pursued by the bank's investigations unit.
``(f) Compensation Packages for People Negatively Affected
by Development Bank Projects.--
``(1) Voice and vote.--The Secretary shall instruct the
United States Executive Director at each multilateral
development bank to inform the bank of the United States
policy goals related to compensation described in paragraph
(2), and use the voice and vote of the United States to
implement such policy at the bank.
``(2) Compensation policy.--The compensation policy
referred to in paragraph (1) is a policy that each
multilateral development bank shall, for each project funded
by the bank where compensation, including resettlement or
rehabilitation assistance, is to be provided to persons
adversely impacted by the project, require that an
independent mechanism be established for, or included in the
design of, the project to receive and adjudicate complaints
from a person who is eligible for compensation if such
person, not more than 6 years after the date of the
completion of the project, finds that the compensation is
either inadequate or improperly implemented.
``(g) Evaluation.--The Secretary shall instruct the United
States Executive Director at each multilateral development
bank to inform the bank of, and use the voice and vote of the
United States to achieve at the bank, the following goals:
``(1) Each multilateral development bank shall make the
results of project and non-project operations evaluations
available to the public, including through the Internet Web
site of the bank and including information on the quantity of
projects evaluated per year as a percentage of total projects
carried out.
``(2) Each multilateral development bank shall require that
all loans, grants, credits, policies, and strategies,
including budget support, prepared by the bank include
specific outcome and output indicators to measure results,
and that the indicators and results be published periodically
during the execution and at the completion of the appropriate
project or program, and at the number of years after such
completion determined to be appropriate for such loan, grant,
credit, policy, or strategy.
``(3) Each multilateral development bank shall promote
rigorous evaluation of projects and policies to ensure that
the intent of such projects and policies is realized. Such a
bank shall favor grants and loans to applicants who agree, in
consultation with an independent evaluator or evaluators, to
design projects to facilitate the evaluation of outcomes.
Rigorous evaluations shall measure the impact on those served
by a loan, grant, or credit and shall have a carefully
constructed comparison group to help measure the impacts of
the loan, grant, or credit.
``(h) Qualification Policy.--
``(1) Voice and vote.--The Secretary shall instruct the
United States Executive Director at each multilateral
development bank to encourage the bank to implement the
qualification policy for borrowing countries described in
paragraph (2), and use the voice and vote of the United
States to achieve such policy at each bank.
``(2) Qualification policy for borrowing countries.--The
qualification policy for borrowing countries referred to in
paragraph (1) is a policy that requires, in addition to the
standards in effect on the date of the enactment of the
Development Bank Reform and Authorization Act of 2005, each
multilateral development bank to qualify a country for budget
support, adjustment lending, policy lending for non-project
loans, grants, or credits, or other loans directed to the
country's budget based on transparency in procurement and
fiduciary requirements and requiring the borrowing country to
make its budget available to the public before funds are
disbursed to that country.
``(i) Microfinance and Business Development.--The Secretary
shall inform the management of each multilateral development
bank and the public that it is the policy of the United
States to encourage microfinance services for the poor and
very poor (as that term is defined in section 259 of the
Foreign Assistance Act of 1961 (22 U.S.C. 2214a)), and micro-
, small-, and medium-enterprise development programs,
particularly in a country where the government of such
country ranks poorly in the World Bank Institute's governance
indicators.
``(j) Resource Dependent Country Revenue Transparency.--
``(1) Requirements for resource assistance for a
government.--The Secretary shall inform the management of
each multilateral development bank and the public that it is
the policy of the United States that any assistance provided
by a such bank including any investment, loan, credit, grant,
or guarantee, to a government of a resource-dependent country
or for any project located in a resource-dependent country,
other than humanitarian assistance, assistance to address
HIV/AIDS, tuberculosis, malaria or food aid, may not be
provided unless the government has in place or is taking the
necessary steps to establish functioning systems for--
``(A) accurately accounting for all revenues received by a
borrowing government from a person and all payments to a
government in connection with the extraction or export of
natural resources, such as gas, oil, oil shale, tar sands,
coal, any metal, mineral, or timber;
``(B) the independent auditing of such payments and such
revenues by a credible, independent auditor, applying
international auditing standards, and the widespread regular
public dissemination of the auditor's findings, including a
reconciliation of aggregate payments and revenues;
``(C) verifying such revenues against the records for such
payments made by each person, including widespread
dissemination of aggregate payment information in a manner
that protects proprietary information, that observes the law
of the borrowing country, and that the person determines does
not cause substantial competitive harm;
``(D) making available to the public all contracts between
the government of such country or any person owned or
controlled by such government, and any person that is engaged
in the extraction or export of natural resources through a
project or program supported by a bank, unless the person
determines such disclosure would cause substantial
competitive harm;
``(E) applying the revenue transparency approach described
in this paragraph equally and fully to all extractive
industry companies operating in the country, including state-
owned entities; and
``(F) establishing a legal framework for disclosure of
payments from a person or contracts with a person and
outlining the level and extent of disclosure or payment
information by companies in the extractive industries.
``(2) Requirements for other natural resource assistance.--
The Secretary shall inform the management of each
multilateral development bank and the public that it is the
policy of the United States that any assistance, including
any investment, loan, or guarantee, provided by such a bank
to private sector sponsors for the extraction or export of
natural resources in a resource-dependent country shall only
be provided if the government of the country has in place or
is taking necessary steps to establish the functioning
systems described in subparagraphs (A) through (F) in
paragraph (1) and if the private sector sponsors of such
projects publicly disclose revenue payments made to the
government of such country, in accordance with the laws of
such country regarding the required level and extent of such
disclosure.
``(3) Compliance with transparency guidelines prior to
approval of assistance.--In furtherance of the policy
described in paragraph (1), not later than 2 years after the
date of the enactment of the Development Bank Reform and
Authorization Act of 2005, the Secretary shall inform the
management of each multilateral development bank and the
public that it is the policy of the United States that any
assistance by such a bank, including any investment, loan,
credit, grant, or guarantee, other than humanitarian
assistance, assistance to address HIV/AIDS, tuberculosis, or
malaria or to provide food, to any government of a resource-
dependent country or for any project located in such country,
shall not be provided unless the bank, prior to the approval
of such assistance, has--
``(A) determined that the government has in place the
systems described in subparagraphs (A) through (F) of
paragraph (1), based on all information that is relevant,
applicable and reasonably available to the bank, including,
the views of other international financial institutions
active in such country and the views of civil society
organizations that are active within and outside such
country;
``(B) determined that private sector sponsors of projects
for the extraction and export of natural resources have
agreed to publicly

[[Page S6027]]

disclose revenue payments to host governments; and
``(C) made available to the public the findings and
conclusions identifying the information taken into
consideration in making such determinations and the reasons
for such determinations.
``(4) Resource-dependent country defined.--In this
subsection, the term `resource-dependent country' means a
country that has--
``(A) an average share of natural resource-derived fiscal
revenues of at least 25 percent of the total fiscal revenues
during the preceding 3-year period; or
``(B) an average share of natural resource export proceeds
of at least 25 percent of the total export proceeds during
the preceding 3-year period.''.

SEC. 6. SENSE OF CONGRESS ON THE EXTRACTIVE INDUSTRY
TRANSPARENCY INITIATIVE AND G-8 AGREEMENTS.

It is the sense of Congress that--
(1) the President should continue promoting the Extractive
Industry Transparency Initiative as one approach to help
ensure that the revenues from extractive industries
contribute to sustainable development and poverty reduction,
as such Initiative is a voluntary initiative intended--
(A) to promote greater transparency of developing country
government revenues and expenditures, procurement,
concession-granting systems; and
(B) to work to recover stolen assets and enforce
antibribery laws;
(2) the United States should encourage the continued work
of the G-8 to promote the Extractive Industries Transparency
Initiative; and
(3) the United States should support and encourage the
carrying out of the agreements of the G-8 made at the 2004
Summit at Sea Island, Georgia, and at the 2003 Summit at
Evian, France, to promote transparency in public budgets,
including revenues and expenditures, government procurement,
public concessions, the granting of licenses with special
emphasis on countries with large extractive industries
sectors, including the agreements made at the Summit at Sea
Island which specifically--
(A) support the efforts of the Public Expenditure and
Financial Accountability program at the World Bank to help
developing countries achieve accountability in public finance
and expenditure and to extend harmonized approaches to the
assessment and reform of their public financial,
accountability, and procurement systems;
(B) invite developing countries to prepare anticorruption
action plans to implement the commitments of such countries
in regional and international conventions; and
(C) achieve agreement on full disclosure of the World Bank
International Development Association's Country Policy and
Institutional Assessment results, with disclosure to begin
with the 2005 ratings.

SEC. 7. REPORTS FROM THE GOVERNMENT ACCOUNTABILITY OFFICE.

(a) Sense of Congress on Access to Information.--It is the
sense of Congress that--
(1) to evaluate the compliance of the multilateral
development banks with the policies of the United States
described in section 1505 of the International Financial
Institutions Act, as added by section 5 of this Act, and to
prepare the reports required by this section, the Comptroller
General of the United States should have full and complete
access to financial information relating to the multilateral
development banks, including information related to the
performance, accountability, oversight, financial
transactions, organization, and activities of the
multilateral development banks;
(2) the Secretary should seek to conclude memorandums of
understanding with the multilateral development banks to
ensure that the United States will have access to documents
related to information described in paragraph (1); and
(3) the Secretary of the Treasury should facilitate access
by the Comptroller General of the United States to the
financial information described in paragraph (1).
(b) Report on Effectiveness of Multilateral Development
Banks.--Not later than 3 years after the date of the
enactment of this Act, the Comptroller General of the United
States shall--
(1) conduct a review of the effectiveness of each
multilateral development bank in achieving the mission of
such bank as set out in the articles of agreement of such
bank, specifically poverty reduction and economic
development; and
(2) submit to the appropriate congressional committees a
report on the findings of the review.
(c) Report on Consistency of Multilateral Development Bank
Practices With Statutory Policies.--Not later than 3 years
after the date of the enactment of this Act, the Comptroller
General of the United States shall prepare and submit to the
appropriate congressional committees a report on the extent
to which the practices of the multilateral development banks
are consistent with the policies of the United States, as
expressly contained in Federal law applicable to the
multilateral development banks.
(d) Report on Reforms at the Multilateral Development
Banks.--Not later than 1 year after the date of the enactment
of this Act, the Comptroller General of the United States
shall prepare and submit to the appropriate congressional
committees a report on the extent of the implementation of
the reforms called for by the Group of 8 or by the Group of
7, starting with the 2000 Okinawa Summit, as delineated in
communiques, chairman's statements, and other official
communication through the summit or finance ministerial
processes of the Group of 8 or the Group of 7.

SEC. 8. CONTRIBUTIONS TO MULTILATERAL DEVELOPMENT BANKS.

(a) World Bank.--The International Development Association
Act (22 U.S.C. 284 et seq.) is amended by adding at the end
the following new section:

``SEC. 23. FOURTEENTH REPLENISHMENT.

``(a) Contribution Authority.--
``(1) In general.--The United States Governor of the
Association is authorized to contribute on behalf of the
United States $2,850,000,000 to the fourteenth replenishment
of the resources of the Association.
``(2) Subject to appropriations.--Any commitment to make
the contribution authorized by paragraph (1) shall be
effective only to such extent or in such amounts as are
provided in advance in appropriations Acts.
``(b) Authorization of Appropriations.--For the
contribution authorized by subsection (a), there are
authorized to be appropriated, without fiscal year
limitation, $2,850,000,000 for payment by the Secretary of
the Treasury.''.
(b) African Development Bank Fund.--The African Development
Fund Act (22 U.S.C. 290g et seq.) is amended by adding at the
end the following new section:

``SEC. 218. TENTH REPLENISHMENT.

``(a) Contribution Authority.--
``(1) In general.--The United States Governor of the Fund
is authorized to contribute on behalf of the United States
$407,000,000 to the tenth replenishment of the resources of
the Fund.
``(2) Subject to appropriations.--Any commitment to make
the contribution authorized by paragraph (1) shall be
effective only to such extent or in such amounts as are
provided in advance in appropriations Acts.
``(b) Authorization of Appropriations.--For the
contribution authorized by subsection (a), there are
authorized to be appropriated, without fiscal year
limitation, $407,000,000 for payment by the Secretary of the
Treasury.''.
(c) Asian Development Fund of the Asian Development Bank.--
The Asian Development Bank Act (22 U.S.C. 285 et seq.) is
amended by adding at the end the following new section:

``SEC. 32. EIGHTH REPLENISHMENT.

``(a) Contribution Authority.--
``(1) In general.--The United States Governor of the Bank
is authorized to contribute on behalf of the United States
$461,000,000 to the eighth replenishment of the resources of
the Fund.
``(2) Subject to appropriations.--Any commitment to make
the contribution authorized by paragraph (1) shall be
effective only to such extent or in such amounts as are
provided in advance in appropriations Acts.
``(b) Authorization of Appropriations.--For the
contribution authorized by subsection (a), there are
authorized to be appropriated, without fiscal year
limitation, $461,000,000 for payment by the Secretary of the
Treasury.''.

SEC. 9. ANNUAL REPORTS.

(a) Initial Report.--Not later than September 1, 2006, the
Secretary shall submit a report to the appropriate
congressional committees the describes the actions taken by
the United States Executive Director at each multilateral
development bank to implement the policy goals described in
this Act and the amendments made by this Act and any other
actions that should be taken to implement such goals.
(b) Updates.--The Secretary shall submit to the appropriate
congressional committees an annual update of the report
required by subsection (a) for each of the fiscal years 2007,
2008, and 2009.
______

By Mr. CRAIG:
S. 1131. A bill to authorize the exchange of certain Federal land
within the State of Idaho, and for other purposes; to the Committee on
Energy and Natural Resources.
Mr. CRAIG. Mr. President, I rise today to introduce the Idaho Land
Enhancement Act of 2005. Simply put, this legislation directs the
Secretaries of Agriculture and Interior to exchange land with the State
of Idaho involving key parcels of land from the Boise Foothills to
North Idaho.
The proposed exchange is exceptional in many respects. First, the
concept for the proposed land exchange originated from a local
conservation effort led by the city of Boise and local conservation
groups including the Idaho Conservation League. Since the late 1960's
the issue of conserving the Boise Foothills has been a significant
concern of the community. Conservation efforts have continued to grow
in support within the community, culminating in May 2001 with the
citizens of Boise, in one of the highest voter turnouts in city
history, electing to tax themselves in order to provide funding to
secure permanent public open space in the Boise Foothills.

[[Page S6028]]

Next, the collaboration between the city of Boise, the State of
Idaho, the Forest Service and the Bureau of Land Management has
produced an agreement that has yielded a proposal benefiting the
State's endowment beneficiaries while addressing the common threats of
fire and hazardous fuels, invasive species, habitat fragmentation and
unmanaged recreation associated with urban interface with Federal
lands. The proposal uses both Bureau of Land Management and Forest
Service land to balance an exchange with Idaho State Endowment lands on
an equal value basis.
Last, the process has been open, transparent, and has wide support
throughout the State. The city of Boise has facilitated public
meetings, provided opportunities for public comment, and has made the
maps of the exchange available to the public. The City has met with all
of the affected tribes and counties. In addition, the multi-agency
group completed evaluations of timber values, minerals, cultural
resources, water rights, legal access, wildlife, fisheries, vegetation,
hydrology, wetlands, threatened and endangered species, and specific
habitat. The evaluations show that no major environmental effect will
occur as a result of the exchange. In fact, The Nature Conservancy
independently reviewed the data and compared it to their eco-regional
planning efforts and concluded that the exchange has ``limited
potential to impact biodiversity values'' and they support the
exchange.
The city of Boise has made a substantial investment of local property
tax dollars in the facilitation of this land exchange package. This
exchange will complete a statewide collaborative process that
represents a legacy of local, State and Federal cooperation benefiting
land management interests throughout the State.
This exchange will enhance land in both the northern and southern
parts of the State. It is an example of how local, State, and Federal
partners can come together to collaboratively develop an exchange in
which the public and the land are the ultimate beneficiaries.
______

By Mr. COLEMAN (for himself, Ms. Landrieu, Mr. DeWine, Ms. Snowe,
Mr. Cochran, Mr. Vitter, Mr. Bayh, and Mr. Smith):
S. 1132. A bill to amend the Public Health Service Act, the Employee
Retirement Income Security Act of 1974, and the Internal Revenue Code
of 1986 to require that group and individual health insurance coverage
and group health plans provide coverage for treatment of a minor
child's congenital or developmental deformity or disorder due to
trauma, infection, tumor, or disease; to the Committee on Health,
Education, Labor, and Pensions.
Mr. COLEMAN. Mr. President, I am pleased today to be introducing the
bipartisan Treatment of Children's Deformities Act. I am pleased to be
joined by many of my friends and colleagues, including Senators
Landrieu, DeWine, Snowe, Cochran, Vitter and Bayh.
Imagine being a parent with a child who has a cleft lip and palate or
another more severe congenital facial deformity that requires
reconstructive surgery to achieve a sense of normalcy and function. Now
imagine receiving a letter from your insurance carrier that states the
following:

The reviewer determined that although the procedures listed
above would enhance the appearance of the patient, the
procedures listed are not necessary to correct a functional
disorder and therefore do not meet the criteria for benefits
as outlined in the medical plan.

Unfortunately, there are numerous examples of children and families
around the country that have been confronted with this kind of heart
wrenching situation. Examples of congenital deformities include cleft
lip, cleft palate, skin lesions, vascular anomalies, malformations of
the ear, hand, or foot, and other more profound craniofacial
deformities. It is essential for children with these problems to
receive timely surgical care in order to have a chance at leading
normal, healthy, happy lives. And yet, an increasing number of kids go
without life changing treatment because treatment is regarded as
``cosmetic'' or ``non-functional.''
It's unfortunate that legislation is necessary. However, this
legislation will ensure that children who are born with a congenital
deformity--whether a cleft lip and palate or a more severe deformity--
receive the reconstructive surgery they need to achieve a sense of
normalcy and function.
According to the March of Dimes, 150,000 newborns suffer from birth
defects each year. Of the 150,000 born, approximately 50,000 require
reconstructive surgery. Although surgeons are able to correct many of
these problems, an increasing number of these children are denied
access to care by the labeling of the procedures as ``cosmetic'' or
``non-functional'' in nature.
A common Federal definition of reconstructive surgery, based on the
American Medical Association's definition, will help clarify coverage
nationally and reduce the delay for children in need of surgery.
It is essential for children with these problems to receive timely
surgical care in order to have a chance at leading normal, healthy, and
happy lives. Also, many times these surgeries are best performed while
children are young and their bodies can more readily recover and
respond to the corrective surgery.
The Treatment of Children's Deformities Act differentiates between
cosmetic and reconstructive surgery. The legislation defines
reconstructive surgery as that being performed on abnormal structures
of the body, caused by congenital defects, developmental abnormalities,
trauma, infection, tumors or disease.
Cosmetic surgery, in contrast, is defined by the American Medical
Association as being performed to reshape normal structures of the body
in order to improve the patient's appearance and self-esteem.
Children born with deformities should receive the help they need and
this legislation will make it happen. I look forward to working with my
colleagues to pass this legislation that will improve the quality of
life for children born with congenital deformities. I urge my
colleagues to join me in supporting 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. 1132

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 ``Treatment of Children's
Deformities Act of 2005''.

SEC. 2. COVERAGE OF MINOR CHILD'S CONGENITAL OR DEVELOPMENTAL
DEFORMITY OR DISORDER.

(a) Group Health Plans.--
(1) Public health service act amendments.--
(A) In general.--Subpart 2 of part A of title XXVII of the
Public Health Service Act (42 U.S.C. 300gg-4 et seq.) is
amended by adding at the end the following:

``SEC. 2707. STANDARDS RELATING TO BENEFITS FOR MINOR CHILD'S
CONGENITAL OR DEVELOPMENTAL DEFORMITY OR
DISORDER.

[[Page S6029]]

``(b) Notice.--A group health plan under this part shall
comply with the notice requirement under section 714(b) of
the Employee Retirement Income Security Act of 1974 with
respect to the requirements of this section as if such
section applied to such plan.''.
(B) Conforming amendment.--Section 2723(c) of the Public
Health Service Act (42 U.S.C. 300gg-23(c)) is amended by
striking ``section 2704'' and inserting ``sections 2704 and
2707''.
(2) ERISA amendments.--
(A) In general.--Subpart B of part 7 of subtitle B of title
I of the Employee Retirement Income Security Act of 1974 (29
U.S.C. 1185 et seq.) is amended by adding at the end the
following:

``SEC. 714. STANDARDS RELATING TO BENEFITS FOR MINOR CHILD'S
CONGENITAL OR DEVELOPMENTAL DEFORMITY OR
DISORDER.

``(a) Requirements for Reconstructive Surgery.--
``(1) In general.--A group health plan, and a health
insurance issuer offering group health insurance coverage,
that provides coverage for surgical benefits shall provide
coverage for outpatient and inpatient diagnosis and treatment
of a minor child's congenital or developmental deformity,
disease, or injury. A minor child shall include any
individual through 21 years of age.
``(2) Requirements.--Any coverage provided under paragraph
(1) shall be subject to pre-authorization or pre-
certification as required by the plan or issuer, and such
coverage shall include any surgical treatment which, in the
opinion of the treating physician, is medically necessary to
approximate a normal appearance.
``(3) Treatment defined.--
``(A) In general.--In this section, the term `treatment'
includes reconstructive surgical procedures (procedures that
are generally performed to improve function, but may also be
performed to approximate a normal appearance) that are
performed on abnormal structures of the body caused by
congenital defects, developmental abnormalities, trauma,
infection, tumors, or disease, including--
``(i) procedures that do not materially affect the function
of the body part being treated; and
``(ii) procedures for secondary conditions and follow-up
treatment.
``(B) Exception.--Such term does not include cosmetic
surgery performed to reshape normal structures of the body to
improve appearance or self-esteem.
``(b) Notice Under Group Health Plan.--The imposition of
the requirements of this section shall be treated as a
material modification in the terms of the plan described in
section 102(a)(1), for purposes of assuring notice of such
requirements under the plan; except that the summary
description required to be provided under the last sentence
of section 104(b)(1) with respect to such modification shall
be provided by not later than 60 days after the first day of
the first plan year in which such requirements apply.''.
(B) Conforming amendments.--
(i) Section 731(c) of the Employee Retirement Income
Security Act of 1974 (29 U.S.C. 1191(c)) is amended by
striking ``section 711'' and inserting ``sections 711 and
714''.
(ii) Section 732(a) of the Employee Retirement Income
Security Act of 1974 (29 U.S.C. 1191a(a)) is amended by
striking ``section 711'' and inserting ``sections 711 and
714''.
(iii) The table of contents in section 1 of the Employee
Retirement Income Security Act of 1974 is amended by
inserting after the item relating to section 713 the
following:

``Sec. 714. Standards relating to benefits for minor child's congenital
or developmental deformity or disorder''.

(3) Internal revenue code amendments.--Subchapter B of
chapter 100 of the Internal Revenue Code of 1986 is amended--
(A) in the table of sections, by inserting after the item
relating to section 9812 the following:

``Sec. 9813. Standards relating to benefits for minor child's
congenital or developmental deformity or disorder''; and

(B) by inserting after section 9812 the following:

``SEC. 9813. STANDARDS RELATING TO BENEFITS FOR MINOR CHILD'S
CONGENITAL OR DEVELOPMENTAL DEFORMITY OR
DISORDER.

``SEC. 2753. STANDARDS RELATING TO BENEFITS FOR MINOR CHILD'S
CONGENITAL OR DEVELOPMENTAL DEFORMITY OR
DISORDER.

``(a) Requirements for Reconstructive Surgery.--
``(1) In general.--A group health plan, and a health
insurance issuer offering group health insurance coverage,
that provides coverage for surgical benefits shall provide
coverage for outpatient and inpatient diagnosis and treatment
of a minor child's congenital or developmental deformity,
disease, or injury. A minor child shall include any
individual through 21 years of age.
``(2) Requirements.--Any coverage provided under paragraph
(1) shall be subject to pre-authorization or pre-
certification as required by the plan or issuer, and such
coverage shall include any surgical treatment which, in the
opinion of the treating physician, is medically necessary to
approximate a normal appearance.
``(3) Treatment defined.--
``(A) In general.--In this section, the term `treatment'
includes reconstructive surgical procedures (procedures that
are generally performed to improve function, but may also be
performed to approximate a normal appearance) that are
performed on abnormal structures of the body caused by
congenital defects, developmental abnormalities, trauma,
infection, tumors, or disease, including--
``(i) procedures that do not materially affect the function
of the body part being treated; and
``(ii) procedures for secondary conditions and follow-up
treatment.
``(B) Exception.--Such term does not include cosmetic
surgery performed to reshape normal structures of the body to
improve appearance or self-esteem.
``(b) Notice.--A health insurance issuer under this part
shall comply with the notice requirement under section 714(b)
of the Employee Retirement Income Security Act of 1974 with
respect to the requirements referred to in subsection (a) as
if such section applied to such issuer and such issuer were a
group health plan.''.
(2) Conforming amendment.--Section 2762(b)(2) of the Public
Health Service Act (42 U.S.C. 300gg-62(b)(2)) is amended by
striking ``section 2751'' and inserting ``sections 2751 and
2753''.
(c) Effective Dates.--
(1) Group health coverage.--The amendments made by
subsection (a) shall apply with respect to group health plans
for plan years beginning on or after January 1, 2006.
(2) Individual health coverage.--The amendment made by
subsection (b) shall apply with respect to health insurance
coverage offered, sold, issued, renewed, in effect, or
operated in the individual market on or after such date.
(d) Coordinated Regulations.--Section 104(1) of Health
Insurance Portability and Accountability Act of 1996 (42
U.S.C. 300gg-92 note) is amended by striking ``this subtitle
(and the amendments made by this subtitle and section 401)''
and inserting ``the provisions of part 7 of subtitle B of
title I of the Employee Retirement Income Security Act of
1974, the provisions of parts A and C of title XXVII of the
Public Health Service Act, and chapter 100 of the Internal
Revenue Code of 1986''.
______

By Mr. BYRD (for himself, Mr. Rockefeller, and Mr. Specter):
S. 1133. A bill to authorize the Secretary of Energy to develop and
implement an accelerated research, development, and demonstration
program for advanced clean coal technologies for use in coal-based
generation facilities and to provide financial incentives to encourage
the early commercial deployment of advanced clean coal technologies
through the retrofitting, repowering, replacement, and new construction
of coal-based electricity generating facilities and industrial
gasification facilities; to the Committee on Energy and Natural
Resources.
Mr. BYRD. Mr. President, today I am introducing S. 1133, the Clean
Coal Research, Development, Demonstration, and Deployment Act of 2005.
I am proud to have Senators Rockefeller and Specter as cosponsors of my
bill. This comprehensive clean coal technology legislation will help
provide for a new era for coal. I have looked into the past; I
recognize the enormous challenges that are before us; and I see coal's
future.
The bill authorizes important programs at the Department of Energy as

[[Page S6030]]

well as provides a major package of targeted federal energy tax
incentives. It supports a research and development program and tax
incentives to encourage the use of advanced coal technologies at coal-
fired power plants. The bill also promotes a major investment in a
national industrial gasification program. It is a balanced and
financially sound proposal, and it recognizes that there are new
horizons opening for coal.
The Byrd-Rockefeller-Specter bill works to balance these ever
expanding opportunities in a very reasonable and responsible way. We
must move forward with the development and deployment of advanced power
generation and carbon capture and sequestration technologies. Coal also
has a future in producing chemicals, alternative transportation fuels,
and other important products for use in the economy. My legislation can
begin to initiate that effort.
There are those who have wanted to push coal aside like stove wood
and horse power as novelties from a bygone era. But we cannot ignore
coal as part of the solution to our future energy challenges. Over the
past several years, I have been diligently assembling a set of
proposals that can provide a comprehensive approach for the near- and
long-term viability for coal, both at home and abroad. It is time that
we reexamine the opportunities for coal, and let the past be our guide
to the future.
Mr. President, I hope other Senators will review S. 1133, and I urge
them to cosponsor this legislation.
______

By Mr. BENNETT (for himself and Mr. Hatch):
S. 1135. A bill to authorize the exchange of certain land in Grand
and Uintah Counties, Utah, and for other purposes; to the Committee on
Energy and Natural Resources.
Mr. BENNETT. Mr. President, I am pleased to be able to re-introduce
the Utah Recreational Land Exchange Act of 2005, together with my
colleague Senator Hatch. Legislation was introduced in the previous
Congress to lay the groundwork for our efforts in the 109th Congress.
This legislation will ensure the protection of critical lands along
the Colorado River corridor in southeastern Utah and will help provide
important funding for Utah's school children. In Utah we treasure the
education of our children. A key component of our education system is
the 3.5 million acres of school trust lands scattered throughout the
State. These lands are dedicated to the support of public education.
Revenue from Utah school trust lands, whether from grazing, forestry,
surface leasing or mineral development, is placed in the State School
Fund. This fund is a permanent income producing endowment created by
Congress upon statehood to fund public education. Unfortunately, the
majority of these lands are trapped within federal ownership patterns
that make it impossible for responsible development. It is critical to
both the State of Utah and the Bureau of Land Management, BLM, that we
consolidate their respective lands to ensure that both public agencies
are permitted to fulfill their mandates.
The legislation we are introducing today is yet another chapter in
our State's long history of consolidating these State lands for the
financial well being of our education system. These efforts serve a
dual purpose as they help the Federal land management agencies to
consolidate Federal lands in environmentally sensitive areas that can
then be reasonably managed. We see this exchange as a win-win solution
for the State of Utah and its school children, as well as the
Department of the Interior as the caretaker of our public lands.
Beginning in 1998 Congress passed the first major Utah school trust
land exchange which consolidated hundreds of thousands of acres. Again
in 2000, Congress enacted an exchange consolidating another 100,000
acres. I was proud to playa role in those efforts, and the bill we are
introducing today is yet another step in the longjoumey toward giving
the school children the deal they were promised in 1896 when Utah was
admitted to the Union.
The School Trust of Utah currently owns some of the most spectacular
lands in America, located along the Colorado River in southeastern
Utah. This legislation will ensure that places like Westwater Canyon of
the Colorado River, the world famous Kokopelli and Slickrock biking
trails, some of the largest natural rock arches in the United States,
wilderness study areas, and viewsheds for Arches National Park will be
traded into Federal ownership and for the benefit of future
generations. At the same time, the school children of Utah will receive
mineral and development lands that are not environmentally sensitive,
in locations where responsible development makes sense. This will be an
equal value exchange, with approximately 40,000 acres exchanged on
either side, with both taxpayers and the school children of Utah
receiving a fair deal. Moreover, the legislation establishes a
valuation process that is transparent to the public, yet will ensure
the exchange process occurs in a timely manner.
This legislation represents a truly collaborative process. We have
convened all of the players to give us input into this legislation:
local government, the State, the recreation community, the
environmental community and other interested parties. At the same time
we are working closely with the Department of Interior. We introduced
this bill in the 108th Congress in order to initiate some discussion of
moving forward with this exchange proposal. Since that time, some
changes have been made in an effort to improve this legislation. We
remain receptive to additional changes that might make further
improvements. The State has been working with all of these groups over
the past year at a grass-roots level to address concerns. We look
forward to working with the appropriate committees and the Department
of Interior toward a successful resolution of this proposed exchange.
I urge all of my colleagues to support our efforts to fund the
education of our children in Utah and to protect some of this Nation's
truly great lands. I urge support of the Utah Recreational Land
Exchange Act of 2005.
______

By Mr. GRASSLEY (for himself, Mr. McCain, and Mr. Allen):
S. 1137. A bill to include dehydroepiandrosterone as an anabolic
steroid; to the Committee on the Judiciary.
Mr. GRASSLEY. Mr. President, recently, the problem of steroid abuse
has been getting a great deal of media attention. While this publicity
has helped to raise public awareness about the dangers of illegal
steroids, recent studies indicate that more and more young people are
taking these drugs to improve their performance, appearance, or self
image. In fact, some recent studies indicate that as many as 5 percent
to 7 percent of students, even as young as middle school, admit to
using illegal steroids.
Even more widespread among adolescents, however, is the use of over-
the-counter supplements. Many young people are turning to
``supplements'' as an alternative to illegal steroids, mistakenly
believing that because they are sold over the counter, they must be
safe. However, many of these over the counter ``supplements'' actually
produce the same dangerous effects on the body as illegal steroids.
Some, even become steroids in the bloodstream.
Last year, the President signed into law the Anabolic Steroid Control
Act of 2004, which added 18 anabolic steroid precursors to the list of
anabolic steroids that are classified as controlled substances. Yet as
I speak, on the shelves of health stores across the country, sits one
anabolic steroid that can be bought by anyone, at any age, without the
need of a doctor's prescription.
Dehydroepiandrosterone, or DHEA, is an anabolic steroid that once
ingested, the body turns into testosterone. DHEA like all other
steroids, may cause a number of long term physical and psychological
effects, including: heart disease, cancer, stroke, liver damage, severe
acne, baldness, dramatic mood swings, aggression etc. In fact, DHEA is
already banned by the Olympics, the World Anti-Doping Agency, the
National Collegiate Athletic Association, the National Football League,
the National Basketball Association, and Minor League Baseball, yet it
actually enjoys special protections under the Anabolic Steroid Control
Act.
In an effort to keep all potentially dangerous steroids out of the
hands of unsuspecting consumers and children, I am pleased to introduce
legislation

[[Page S6031]]

today that would add DHEA to the list of controlled substances under
the Anabolic Steroid Control Act. This legislation will eliminate the
special exemption granted to DHEA, thereby treating it as every other
substance in the steroid family.
With the dramatic rise in the use of steroids among our nation's
youth, now is the time to act to curb this increasingly growing
problem. Just like all other anabolic steroids, DHEA should not be
available over the counter, but only under a doctor's supervision. I
encourage my colleagues to join in support of this legislation.
I ask unanimous consent that the text of this bill be printed in the
Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 1137

Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,

SECTION 1. INCLUSION OF DEHYDROEPIANDROSTERONE.

Section 102(41)(A) of the Controlled Substances Act (21
U.S.C. 802(41)(A)) is amended--
(1) in the matter preceding clause (i), by striking
``corticosteroids, and dehydroepiandrosterone'' and inserting
``and corticosteroids'';
(2) by redesignating clauses (x) through (xlx) as clauses
(xi) through (xlxi), respectively; and
(3) by inserting after clause (ix) the following:
``(x) dehydroepiandrosterone (androst-5-en-3b-ol-17-
one);''.
______

By Mr. SANTORUM:
S. 1139. A bill to amend the Animal Welfare Act to strengthen the
ability of the Secretary of Agriculture to regulate the pet industry;
to the Committee on Agriculture, Nutrition, and Forestry.
Mr. SANTORUM. Mr. President, I rise today to introduce the Pet Animal
Welfare Statute of 2005 (PAWS). The introduction of this important
animal welfare legislation demonstrates my continued interest in humane
treatment of animals. As the proud owner of a German Shepherd, it is
disturbing to see the number of high volume breeders who are careless
and disregard their responsibilities to care properly for their
animals.
Across the United States, there are more than 3,000 commercial dog-
breeding facilities that are licensed to operate by the United States
Department of Agriculture (USDA). Owners of these facilities are
required to comply with the rules and regulations of the Animal Welfare
Act (AWA), which sets forth standards for humane handling and
treatment. USDA inspections are also required to ensure compliance with
AWA standards.
Unfortunately, enforcement of AWA has not effectively stopped the
inhumane treatment of animals within the pet industry. Because the AWA
only covers breeders and others who sell at wholesale, many puppy mill
owners have successfully avoided AWA requirements by selling directly
to the public. The ability to use the Internet as a marketing tool for
direct sales has only made selling directly to the public more
prevalent and popular. Because USDA can only regulate wholesalers under
the AWA, it has very limited authority to oversee the care and
conditions of animals in these facilities.
PAWS addresses this growing problem. PAWS would regulate breeders who
raise seven or more litters of dogs or cats each year. This threshold
test would differentiate those breeders who raise animals in mass
numbers from those who are hobby breeders.
In addition, this broad ranging legislation would cover importers and
other non-breeder dealers who sell more than 25 dogs or cats per year,
strengthen USDA's enforcement authority, and assure USDA access to
source records of persons who acquire dogs for resale. Finally, PAWS
expands the USDA's authority to seek injunctions against unlicensed dog
and cat dealers.
The term ``puppy mill'' is not new to many people, be it pet owners,
consumers, animal welfare advocates, inspectors or just casual
observers. Puppy mills are large breeding operations that mass-produce
puppies for commercial sale with little regard for the humane handling
and treatment of the dogs. Breeding and raising dogs without respect to
the animal's welfare guarantees bad results for the unknowing owner,
and for the health of the dog and her puppies. For dogs, puppy mill
conditions can mean overcrowded cages, lack of protection from weather
conditions, and an overall lack of veterinary care.
The benefits of regulating commercial breeders and sellers are
obvious. PAWS addresses the commerce in pets from many different
angles, including imports, large direct sellers, Internet sellers,
enforcement tools, and source records. As a member of the Senate
Agriculture Committee and Chairman of the Subcommittee on Research,
Nutrition and General Legislation, the subcommittee with jurisdiction,
I am prepared to work aggressively to advance this legislation. I urge
my colleagues to join Senator Durbin and me in supporting this
legislation.
Mr. DURBIN. Mr. President, I rise today to introduce the Pet Animal
Welfare Statute, PAWS, along with my colleague, Senator Santorum.
For more than three decades, Congress has given the responsibility of
ensuring minimum standards of humane care and treatment of animals to
the U.S. Department of Agriculture, USDA, under the Animal Welfare Act,
AWA.
The current guidelines within the AWA do not go far enough to protect
puppies at large breeding facilities; they merely ensure the provision
of water and food, and that is inadequate. The AWA has been largely
ineffective because of weak enforcement procedures and limited
resources. Another severe limitation of the current AWA is that it does
not regulate overseas breeders who submit their animals to deplorable
conditions before exporting them to the United States, leaving many
imported animals with diseases and behavioral disorders. PAWS
strengthens the AWA to better control the practices of puppy breeding
in large facilities, addresses cruel puppy treatment and places
stricter regulations on overseas breeders.
In large breeding facilities, puppies are often kept in cramped,
dirty cages; sometimes stacked on top of each other; exposed to the
elements in extreme cold and heat; forced to breed too frequently; and
deprived of adequate food, water, veterinary care, and any semblance of
loving contact. In fact, current law allows many of these breeders to
evade all federal oversight.
This inhumane treatment has a direct bearing on the physical and
mental health of dogs in these facilities. Often, after these puppies
join a family, they turn out to have serious health and behavioral
problems that cause them pain, cause their owners great distress, and
require expensive medical care.
I believe PAWS will address these problems by filling gaps in the
current law and encouraging stronger enforcement by USDA to crack down
on chronic violators. The bill also applies to cats.
PAWS requires that any commercial hreeder who sells seven or more
litters of dogs or cats directly to the public in a year must be
licensed by the USDA. The statute also allows the USDA to obtain the
identity of breeders, a measure that would help the USDA to address
inhumane treatment. PAWS extends the suspension period for facilities
with AWA violations from 21 days to 60 days and provides the USDA with
direct authority to apply for injunctions.
I've heard from many of my constituents in Illinois who are deeply
concerned about the puppy mill problem and want this legislation
enacted. PAWS is supported by national organizations, including the
Humane Society of the United States, the American Kennel Club, Doris
Day Animal League, and the Animal Welfare Institute.
I am pleased that we have obtained additional funds for USDA to
improve its enforcement of the AWA. This piece of legislation will
complement those ongoing efforts by strengthening USDA's authority to
crack down on the bad actors.
PAWS will ensure that any commercial dog breeder licensed by the
Federal Government is meeting basic humane standards of care. We owe at
least this much to the animals that have earned the title ``man's best
friend.'' This safety net for dogs and cats will protect pets and the
consumers who care about them against the poor treatment practices of
the worst dealers: the ones who provide no

[[Page S6032]]

interaction; the ones who violate industry norms against over-breeding;
the ones who repeatedly violate the law governing humane care. The good
dealers, however, should be recognized for the value they bring to pet
lovers everywhere.
Currently, the good dealers suffer at the hands of the bad ones, the
ones who give the industry a bad reputation. This bill will help draw a
clear distinction in favor of the good dealers. I thank my colleagues
for their attention to this issue, and I urge their support for the Pet
Animal Welfare Statute.
______

By Mr. COCHRAN (for himself, Mr. Pryor, Mr. Chambliss, and Mr.
Roberts):
S. 1141. A bill to authorize the Secretary of Homeland Security to
regulate ammonium nitrate; to the Committee on Homeland Security and
Governmental Affairs.
Mr. COCHRAN. Mr. President, fertilizers provide essential nutrients
to the food we eat. Without fertilizer, roughly one-third of the
world's people would go hungry. Ammonium nitrate fertilizer is an
effective source of nitrogen that all crops need to grow. Thousands of
American farmers value its use in certain applications including cool
weather fertilization and other low-till cropping systems. Thus, the
continued availability of ammonium nitrate fertilizer to U.S. farmers
has economic, agronomic and environmental benefits to farmers and
society as a whole.
At the same time, the April 1995 attack on the Alfred P. Murrah
Federal Building in Oklahoma City showed America that this highly
valuable fertilizer can be subject to adulteration and misuse by
criminals intent on engaging in acts of terror.
After the Oklahoma City tragedy, Congress enacted legislation calling
for a study on the feasibility and practicability of imposing controls
on certain precursor chemicals, including ammonium nitrate. Congress
recognized that it is simply not possible for the agriculture community
to guarantee against the criminal misuse of ammonium nitrate or for any
community to guarantee that the thousands of everyday products that can
be converted to criminal use will not be misused by those with the
intent and capability to do so.
Over the past 10 years, the security landscape has continued to
change. The agriculture community and the fertilizer industry recognize
that more needs to be done to strengthen the controls regarding the
handling and purchase of ammonium nitrate fertilizer in order to ensure
American farmers continue to have access to this valued input. Today,
with my colleague from Arkansas Mr. Pryor, my colleague from Georgia
Mr. Chambliss, and my colleague from Kansas Mr. Roberts, I am pleased
to introduce legislation that provides a practical and workable
solution to enhance the secure handling of ammonium nitrate ensuring
that ammonium nitrate remains available for agricultural use.
The legislation is entitled ``The Secure Handling of Ammonium Nitrate
Act of 2005.'' It calls for Federal and State cooperation to secure
ammonium nitrate fertilizer. It requires any person who produces,
stores, sells, or distributes ammonium nitrate to register their
facility with their State department of agriculture and to maintain
records of sales or distribution of the product. Additionally, it
requires all purchasers of ammonium nitrate to register with their
State department of agriculture.
We believe these requirements are necessary measures to help provide
additional security for ammonium nitrate fertilizer and will not unduly
burden agriculture professionals or farmers who use ammonium nitrate.
Furthermore, we believe this important legislation will effectively
enhance ongoing security measures and help to keep ammonium nitrate out
of the hands of those who wish to harm our Nation.
I urge Senators to support 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. 1141

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 ``Secure Handling of Ammonium
Nitrate Act of 2005''.

SEC. 2. FINDINGS.

Congress finds that--
(1) ammonium nitrate is an important fertilizer used to
produce a reliable and affordable food supply for the United
States and the world;
(2) in the wrong hands, ammonium nitrate may be used for
illegal activities;
(3) the production, importation, storage, sale, and
distribution of ammonium nitrate affects interstate and
intrastate commerce; and
(4) it is necessary to regulate the production, storage,
sale, and distribution of ammonium nitrate.

SEC. 3. DEFINITIONS.

In this Act:
(1) Ammonium nitrate.--The term ``ammonium nitrate'' means
solid ammonium nitrate that is chiefly the ammonium salt of
nitric acid and contains not less than 33 percent nitrogen,
of which--
(A) 50 percent is in ammonium form; and
(B) 50 percent is in nitrate form.
(2) Facility.--
(A) In general.--The term ``facility'' means any site where
ammonium nitrate is produced, stored, or held for
distribution, sale, or use.
(B) Inclusions.--The term ``facility'' includes--
(i) all buildings or structures used to produce, store, or
hold ammonium nitrate for distribution, sale, or use at a
single site; and
(ii) multiple sites described in clause (i), if the sites
are--

(I) contiguous or adjacent; and
(II) owned or operated by the same person.

(3) Handle.--The term ``handle'' means to produce, store,
sell, or distribute ammonium nitrate.
(4) Handler.--The term ``handler'' means any person that
produces, stores, sells, or distributes ammonium nitrate.
(5) Purchaser.--The term ``purchaser'' means any person
that purchases ammonium nitrate.
(6) Secretary.--The term ``Secretary'' means the Secretary
of Homeland Security.

SEC. 4. REGULATION OF HANDLING AND PURCHASE OF AMMONIUM
NITRATE.

(a) In General.--The Secretary may regulate the handling
and purchase of ammonium nitrate to prevent the
misappropriation or use of ammonium nitrate in violation of
law.
(b) Regulations.--The Secretary may promulgate regulations
that require--
(1) handlers--
(A) to register facilities;
(B) to sell or distribute ammonium nitrate only to handlers
and purchasers registered under this Act; and
(C) to maintain records of sale or distribution that
include the name, address, telephone number, and registration
number of the immediate subsequent purchaser of ammonium
nitrate; and
(2) purchasers to be registered.
(c) Use of Previously Submitted Information.--Prior to
requiring a facility or handler to submit new information for
registration under this section, the Secretary shall--
(1) request from the Attorney General, and the Attorney
General shall provide, any information previously submitted
to the Attorney General by the facility or handler under
section 843 of title 18, United States Code; and
(2) at the election of the facility or handler--
(A) use the license issued under that section in lieu of
requiring new information for registration under this
section; and
(B) consider the license to fully comply with the
requirement for registration under this section.
(d) Consultation.--In promulgating regulations under this
section, the Secretary shall consult with the Secretary to
Agriculture to ensure that the access of agricultural
producers to ammonium nitrate is not unduly burdened.
(e) Data Confidentiality.--
(1) In general.--Notwithstanding section 552 of title 5,
United States Code, or the USA PATRIOT ACT (Public Law 107-
56; 115 Stat. 272) or an amendment made by that Act, except
as provided in paragraph (2), the Secretary may not disclose
to any person any information obtained from any facility,
handler, or purchaser--
(A) regarding any action taken, or to be taken, at the
facility or by the handler or purchaser to ensure the secure
handling of ammonium nitrate; or
(B) that would disclose--
(i) the identity or address of any purchase of ammonium
nitrate;
(ii) the quantity of ammonium nitrate purchased; or
(iii) the details of the purchase transaction.
(2) Exceptions.--The Secretary may disclose any information
described in paragraph (1)--
(A) to an officer or employee of the United States, or a
person that has entered into a contract with the United
States, who needs to know the information to perform the
duties of the officer, employee, or person, or to a State
agency pursuant to an arrangement under section 6, under
appropriate arrangements to ensure the protection of the
information;

[[Page S6033]]

(B) to the public, to the extent the Secretary specifically
finds that disclosure of particular information is required
in the public interest; or
(C) to the extent required by order of a Federal court in a
proceeding in which the Secretary is a party, under such
protective measures as the court may prescribe.

SEC. 5. ENFORCEMENT.

(a) Inspections.--The Secretary, without a warrant, may
enter any place during business hours that the Secretary
believes may handle ammonium nitrate to determine whether the
handling is being conducted in accordance with this Act,
including regulations promulgated under this Act.
(b) Prevention of Sale or Distribution Order.--In any case
in which the Secretary has reason to believe that ammonium
nitrate has been handled other than in accordance with this
Act, including regulations promulgated under this Act, the
Secretary may issue a written order preventing any person
that owns, controls, or has custody of the ammonium nitrate
from selling or distributing the ammonium nitrate.
(c) Appeal Procedures.--
(1) In general.--A person subject to an order under
subsection (b) may request a hearing to contest the order,
under such administrative adjudication procedures as the
Secretary may establish.
(2) Rescission.--If an appeal under paragraph (1) is
successful, the Secretary shall rescind the order.
(d) In Rem Proceedings.--The Secretary may institute in rem
proceedings in the United States district court for the
district in which the ammonium nitrate is located to seize
and confiscate ammonium nitrate that has been handled in
violation of this Act, including regulations promulgated
under this Act.

SEC. 6. ADMINISTRATIVE PROVISIONS.

(a) Cooperative Agreements.--The Secretary may enter into a
cooperative agreement with the Secretary of Agriculture, or
the head of any State department of agriculture or other
State agency that regulates plant nutrients, to carry out
this Act, including cooperating in the enforcement of this
Act through the use of personnel or facilities.
(b) Delegation.--
(1) In general.--The Secretary may delegate to a State the
authority to assist the Secretary in the administration and
enforcement of this Act, including regulations promulgated
under this Act.
(2) Delegation required.--On the request of a Governor of a
State, the Secretary shall delegate to the State the
authority to carry out section 4 or 5, on a determination by
the Secretary that the State is capable of satisfactorily
carrying out that section.
(3) Funding.--If the Secretary enters into an agreement
with a State under this subsection to delegate functions to
the State, the Secretary shall provide to the State adequate
funds to enable the State to carry out the functions.
(4) Inapplicability.--Notwithstanding any other provision
of this subsection, this subsection does not authorize a
State to carry out a function under section 4 or 5 relating
to a facility or handler in the State that makes the election
described in section 4(c)(2).

SEC. 7. CIVIL LIABILITY.

(a) Unlawful Acts.--It is unlawful for any person--
(1) to fail to perform any duty required by this Act,
including regulations promulgated under this Act;
(2) to violate the terms of registration under this Act;
(3) to fail to keep any record, make any report, or allow
any inspection required by this Act; or
(4) to violate any sale or distribution order issued under
this Act.
(b) Penalties.--
(1) In general.--A person that violates this Act (including
a regulation promulgated under this Act) may only be assessed
a civil penalty by the Secretary of not more than $50,000 per
violation.
(2) Notice and opportunity for a hearing.--No civil penalty
shall be assessed under this Act unless the person charged
has been given notice and opportunity for a hearing on the
charge in the county, parish, or incorporated city of
residence of the person charged.
(c) Jurisdiction Over Actions for Civil Damages.--The
district courts of the United States shall have exclusive
jurisdiction over any action for civil damages against a
handler for any harm or damage that is alleged to have
resulted from the use of ammonium nitrate in violation of law
that occurred on or after the date of enactment of this Act.

SEC. 8. STATE LAW PREEMPTION.

This Act preempts any State law (including a regulation)
that regulates the handling of ammonium nitrate to prevent
the misappropriation or use of ammonium nitrate in violation
of law.

SEC. 9. AUTHORIZATION OF APPROPRIATIONS.

There are authorized to be appropriated such sums as are
necessary to carry out this Act.
Mr. PRYOR. Mr. President, I stand today in support of legislation
that will better protect our homeland by securing the trade and
handling of ammonium nitrate. While ammonium nitrate is well known in
the agriculture community to be an important fertilizer, it has also
become a common ingredient in creating highly explosive bombs like the
one used in the unforgettable April 1995 bombing attack of the Alfred
P. Murrah Federal Building in Oklahoma City, Oklahoma. A little more
than a month ago, we reflected on the tenth anniversary of this tragic
moment in our nation's history. Despite the enormous potential for
misuse if in the wrong hands, the purchase and use of ammonium nitrate
is still largely unregulated by the federal government. It is our hope
that we can reduce this potential for misuse. By better securing the
trade and handling of this chemical, we will make it more difficult for
individuals and groups to misuse the chemical and threaten the lives of
Americans. The purpose of our legislation is to protect our homeland
from future threats and attacks that may be similar in nature to that
of the Oklahoma City Bombing while still ensuring that law abiding
citizens can use this valuable fertilizer for agricultural activities.
Fertilizer provides essential nutrients to the food we eat by
providing an effective source of nitrogen that all crops need to grow.
I recognize the importance of fertilizer to our Nation's farming
community, and that is why I believe that we must continue the
availability of ammonium nitrate fertilizer to farmers in order to
maintain the economic, agronomic and environmental benefits that this
product provides. I also understand the negative impact of that
fertilizer can have on our people if misused by criminals intent on
engaging in acts of terror.
Since the 1995 Oklahoma City tragedy, many studies have been
conducted by the Federal Government to determine the feasibility and
practicability of imposing controls on certain precursor chemicals,
including ammonium nitrate. In addition, the fertilizer industry and
the Bureau of Alcohol Tobacco and Firearms (ATF) created the
``America's Security Begins with You'' ammonium nitrate security
campaign in 1995 as an effort to minimize possible misuse of ammonium
nitrate fertilizer. These studies and campaigns have both led to show
that it is impossible for the agricultural community to guarantee
against the criminal misuse of ammonium nitrate under current laws and
regulations and that more can and should be done to protect against
this threat.
The agricultural community and the fertilizer industry both recognize
that more can and should be done to strengthen the controls regarding
the handling and purchase of ammonium nitrate fertilizer in order to
ensure American farmers continue to have access to this valued input. I
believe that the Federal government must do its part in helping to
assure that ammonium nitrate fertilizer stays in the hands of
agricultural professionals and encourage all who handle this chemical
to protect their community and America by establishing effective
security measures.
I am proud to join my colleague from Mississippi, Senator Cochran, in
introducing this legislation along with Senator Chambliss and Senator
Roberts. I believe it provides a very practical and workable solution
to enhance the secure handling of ammonium nitrate and ensure that
ammonium nitrate remains available for agricultural use. ``The Secure
Handling of Ammonium Nitrate Act of 2005'' calls for a federal and
state cooperation to secure ammonium nitrate fertilizer. It requires
the Department of Homeland Security to enter into cooperative
agreements with state departments of agriculture to ensure that any
person who produces, stores, sells, or distributes ammonium nitrate
registers their facility and maintains records of sales or distribution
of the product. As such, purchasers of ammonium nitrate would also be
required to register with their state's department of agriculture.

My colleagues and I agree that these requirements are necessary
measures that provide additional security for ammonium nitrate
fertilizer and will not unduly burden agriculture professionals or
farmers who use this product. Furthermore, we firmly believe that this
legislation will effectively enhance ongoing security measures by
helping to keep ammonium nitrate out of the hands of those who wish to
harm our Nation.
I thank the Chairman of the Appropriations Committee, as well as the

[[Page S6034]]

Chairmen of the Agriculture and Intelligence Committees for their
leadership on this issue, and I urge my colleagues in the Senate to
support this important legislation.
Mr. CHAMBLISS. Mr. President, I would like to echo the comments of
the senior Senator from Mississippi regarding the ``Secure Handling of
Ammonium Nitrate Act of 2005.'' The importance of ammonium nitrate
fertilizer to the agricultural industry cannot be understated. However,
its use in acts of terror has led the industry and public alike
searching for a way to further secure the handling and use of ammonium
nitrate. I believe this legislation accomplishes that goal. If passed,
this bill will help us to track both where this fertilizer is, and who
is in possession of it. The answers to both of these very important
questions will further ongoing efforts to keep our Nation safe from
people who may wish to do it harm. I feel this legislation provides
additional security for ammonium nitrate while maintaining its
viability as an agricultural fertilizer.
I urge my colleagues to support this important legislation.
______

By Ms. LANDRIEU (for herself, Mr. Graham, Mr. Allen, Mr. Durbin,
and Mr. Lautenberg):
S. 1142. A bill to provide pay protection for members of the Reserve
and the National Guard, and for other purposes; to the Committee on
Finance.
Ms. LANDRIEU. Mr. President, over 50 years ago, Sir Winston Churchill
uttered the immortal words, ``never in the field of human conflict has
so much been owed by so many to so few.'' Although Prime Minister
Churchill was referring to the selfless and courageous effort of the
Royal Air Force in their defeat of the Germans in World War II, I would
like to argue that these words apply equally to the men and women
fighting to preserve democracy in Iraq and Afghanistan. These men and
women are not only making it possible for each and every one of us to
go about our daily lives under the blanket of safety and freedom to
which Americans have become accustomed, but they are also striving to
bring these benefits to people who have never had them before.
If you have had the opportunity to spend time with these men and
women, as I have, you quickly observe that they embody everything good
about America. Their patriotism, their unyielding commitment to serve
their country, their selflessness and their sacrifice should serve as
examples to us all. Perhaps what amazes me most, is that although these
men and women are prepared to make the ultimate sacrifice for their
country, they ask for little in return from it. It is therefore
incumbent on us to recognize the debt we owe to them, and honor it.
Today there are 80,000 members of the National Guard and our Reserve
armed forces serving bravely in the war on terror. In addition, close
to 89,000 members of the Guard and Reserve have been activated in
anticipation of being sent to Iraq, Afghanistan, or any other place
their country calls on them to serve. While deployed, these citizen
soldiers are asked, in a moment's notice, to leave their families,
their jobs, and their communities behind, causing tremendous stress on
the home front and in the workplace.
While having a loved one in harm's way is reason for stress alone,
many of the families of these men and women have the added stress of
trying to fill the void left. Many families have lost the main bread
winner when a Guardsmen or Reservist gets deployed. As a result, they
have trouble paying bills, the rent, the mortgage, or medicine for
their children.
The primary reason these families cannot make ends meet is because
for Guardsmen and Reservists military pay is often less than civilian
pay. We call that the ``pay gap.'' According to the most recent Status
of Forces Survey of Reserve Components, 51 percent of our citizen
soldiers take a pay cut when they get deployed and 11 percent of them
lose more than $2,500 per month.
We ask these men and women to make so many sacrifices on our behalf.
I think that it is time that we be willing to make one in return. The
least we can do is to help these families find relief from the
financial woes caused by this gap. To help do this, my colleagues
Senator Graham, Senator Allen, Senator Durbin, and myself are pleased
to introduce the Helping Our Patriotic Employers at Helping our
Military Employees Act of 2005. We call the bill by its nickname: HOPE
at HOME. Our guard and reserve families have enough to worry about when
a loved one gets called away, the least we can do is relieve some of
the financial worry by encouraging employers to make up the pay gap.
Let me describe for my colleagues how this legislation works.

HOPE at HOME will give a 50 percent tax credit to the thousands of
employers around the country who have taken the patriotic step of
continuing to pay the salary of their guard and reservists employees
who have been called to active duty. There are literally thousands of
employers out there who already take this noble step--they do it
voluntarily, selflessly and at great sacrifice. The HOPE at HOME Act
honors that sacrifice.
HOPE at HOME will also encourage companies that cannot afford to make
up the pay-gap an incentive to do it. One survey found that only 173 of
the Fortune 500 companies make up the pay gap. If the wealthiest
companies cannot afford to help their active duty employees, imagine
how difficult this is for smaller companies. HOPE at HOME will allow
companies large and small to do the patriotic thing and reward those
employees who are serving to keep us all free.
HOPE at HOME will also give small patriotic employers additional tax
relief if they need to hire a worker to temporarily replace the active
duty Guardsmen or Reservist. In addition, the bill clarifies the tax
treatment of any pay-gap payments to make income tax filing easier for
our Guard and Reservists.
A moment ago, I mentioned that thousands of employers make up the
pay-gap for their employees. There is one employer, however, and it
happens to be the Nation's largest, that does not make up the pay gap:
Uncle Sam. The Federal Government, which should set the bar for
patriotism in our country, does not do its part to help citizen
soldiers. Senator Durbin has been a leader in this area, so our bill
includes language that he has been fighting to require the Federal
Government to make up the pay gap. We cannot ask the private sector to
do more than they are doing if the Federal Government is not willing to
step up and do its part for our military men and women.
This is not only the right thing to do, it is the smart thing to do.
Today our Nation relies on the Guard and Reserve to meet our armed
forces needs more than at any other time in our history. At times in
the war on terror, forty-percent of our troops in Iraq and Afghanistan
were citizen soldiers. Many of them performed multiple tours of duty or
found their duties extended.
All of the experts tell us that our need for our Guard and Reserve
troops will only get greater. In the post-Cold War world, we have
drastically reduced our standing Army from 800,000 in 1989 to
approximately 482,000 today, a 40 percent decrease. The number of
deployments has increased by over 300 percent. The Guard and Reserve
have made it possible to meet these challenges. We still find ourselves
stretched thin, but without the Guard and Reserve we would never be
able to meet our obligation as guardians of freedom in the World.
But this over-reliance on the Guard and Reserve is starting to have a
toll on our ability to recruit and retain these men and women. The
percentage of Army Reserve personnel who plan to remain in the military
after their tour of duty ends fell from 73 percent to 66 percent over
2004. The top reasons for leaving the Guard and Reserve, according to
the Status of Forces Survey of Reserve Components, are family stress,
the number and lengths of deployments, income loss, and conflict with
civilian employment.
We are beginning to have recruitment problems as well for our
standing military. Back in February, the Army and the National Guard
and Reserve recruited 3,824 soldiers, but this was only 69 percent of
their monthly goal. The numbers went up in March, but still fell short
by 12 percent of the goal.
HOPE at HOME recognizes that a soldier who is worrying about how his
or her family is paying the bills is not focusing on the mission at
hand. A soldier who is worrying about whether the family is paying the
rent, is not going

[[Page S6035]]

to reenlist. And every time one of our soldiers leaves, our Nation
loses the experience and service of a highly trained, capable
professional. We need to make every effort to keep our citizen soldiers
in service to their country. HOPE at HOME is a first step to addressing
our military's larger recruitment and retention issues.
During the Cold War we built our strength on having the biggest, best
equipped standing army in the World. Now our military gathers its
strength from a large reserve of qualified men and women in the Guard
and Reserve who are ready to fight at a moment's call. We will lose
that strength if we do not give our Guardsmen and Reservists and their
families HOPE at HOME.
I hope my colleagues will join Senators Allen, Graham, Durbin and
myself in supporting the HOPE at HOME Act.
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. 1142

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 ``Helping Our Patriotic
Employers at Helping Our Military Employees Act of 2005'' or
the ``HOPE at HOME Act of 2005''.

SEC. 2. NONREDUCTION IN PAY WHILE FEDERAL EMPLOYEE IS
PERFORMING ACTIVE SERVICE IN THE UNIFORMED
SERVICES.

(a) In General.--Subchapter IV of chapter 55 of title 5,
United States Code, is amended by adding at the end the
following:

``Sec. 5538. Nonreduction in pay while serving in the
uniformed services

``(a) An employee who is absent from a position of
employment with the Federal Government in order to perform
service in the uniformed services for a period of more than
90 days shall be entitled to receive, for each pay period
described in subsection (b), an amount equal to the amount by
which--
``(1) the amount of basic pay which would otherwise have
been payable to such employee for such pay period if such
employee's civilian employment with the Government had not
been interrupted by that service, exceeds (if at all)
``(2) the amount of pay and allowances which (as determined
under subsection (d))--
``(A) is payable to such employee for that service; and
``(B) is allocable to such pay period.
``(b)(1) Amounts under this section shall be payable with
respect to each pay period (which would otherwise apply if
the employee's civilian employment had not been
interrupted)--
``(A) during which such employee is entitled to
reemployment rights under chapter 43 of title 38 with respect
to the position from which such employee is absent (as
referred to in subsection (a)); and
``(B) for which such employee does not otherwise receive
basic pay (including by taking any annual, military, or other
paid leave) to which such employee is entitled by virtue of
such employee's civilian employment with the Government.
``(2) For purposes of this section, the period during which
an employee is entitled to reemployment rights under chapter
43 of title 38--
``(A) shall be determined disregarding the provisions of
section 4312(d) of title 38; and
``(B) shall include any period of time specified in section
4312(e) of title 38 within which an employee may report or
apply for employment or reemployment following completion of
service in the uniformed services.
``(c) Any amount payable under this section to an employee
shall be paid--
``(1) by such employee's employing agency;
``(2) from the appropriation or fund which would be used to
pay the employee if such employee were in a pay status; and
``(3) to the extent practicable, at the same time and in
the same manner as would basic pay if such employee's
civilian employment had not been interrupted.
``(d) The Office of Personnel Management shall, in
consultation with Secretary of Defense, prescribe any
regulations necessary to carry out the preceding provisions
of this section.
``(e)(1) The head of each agency referred to in section
2302(a)(2)(C)(ii) shall, in consultation with the Office,
prescribe procedures to ensure that the rights under this
section apply to the employees of such agency.
``(2) The Administrator of the Federal Aviation
Administration shall, in consultation with the Office,
prescribe procedures to ensure that the rights under this
section apply to the employees of that agency.
``(f) For purposes of this section--
``(1) the terms `employee', `Federal Government', and
`uniformed services' have the same respective meanings as
given in section 4303 of title 38;
``(2) the term `service in the uniformed services' has the
meaning given that term in section 4303 of title 38 and
includes duty performed by a member of the National Guard
under section 502(f) of title 32 at the direction of the
Secretary of the Army or Secretary of the Air Force;
``(3) the term `employing agency', as used with respect to
an employee entitled to any payments under this section,
means the agency or other entity of the Government (including
an agency referred to in section 2302(a)(2)(C)(ii)) with
respect to which such employee has reemployment rights under
chapter 43 of title 38; and
``(4) the term `basic pay' includes any amount payable
under section 5304.''.
(b) Clerical Amendment.--The table of sections for chapter
55 of title 5, United States Code, is amended by inserting
after the item relating to section 5537 the following:

``5538. Nonreduction in pay while serving in the uniformed services or
National Guard''.

(c) Effective Date.--The amendments made by this section
shall apply with respect to pay periods (as described in
section 5538(b) of title 5, United States Code, as added by
this section) beginning on or after September 11, 2001.

SEC. 3. READY RESERVE-NATIONAL GUARD EMPLOYEE CREDIT ADDED TO
GENERAL BUSINESS CREDIT.

(a) Ready Reserve-National Guard Credit.--Subpart D of part
IV of subchapter A of chapter 1 of the Internal Revenue Code
of 1986 (relating to business-related credits) is amended by
adding at the end the following:

``SEC. 45J. READY RESERVE-NATIONAL GUARD EMPLOYEE CREDIT.

``(a) General Rule.--For purposes of section 38, the Ready
Reserve-National Guard employee credit determined under this
section for any taxable year is an amount equal to 50 percent
of the actual compensation amount for such taxable year.
``(b) Definition of Actual Compensation Amount.--For
purposes of this section, the term `actual compensation
amount' means the amount of compensation paid or incurred by
an employer with respect to a Ready Reserve-National Guard
employee on any day during a taxable year when the employee
was absent from employment for the purpose of performing
qualified active duty.
``(c) Limitation.--No credit shall be allowed with respect
to a Ready Reserve-National Guard employee who performs
qualified active duty on any day on which the employee was
not scheduled to work (for reason other than to participate
in qualified active duty).
``(d) Definitions.--For purposes of this section--
``(1) Qualified active duty.--The term `qualified active
duty' means--
``(A) active duty, other than the training duty specified
in section 10147 of title 10, United States Code (relating to
training requirements for the Ready Reserve), or section
502(a) of title 32, United States Code (relating to required
drills and field exercises for the National Guard), in
connection with which an employee is entitled to reemployment
rights and other benefits or to a leave of absence from
employment under chapter 43 of title 38, United States Code,
and
``(B) hospitalization incident to such duty.
``(2) Compensation.--The term `compensation' means any
remuneration for employment, whether in cash or in kind,
which is paid or incurred by a taxpayer and which is
deductible from the taxpayer's gross income under section
162(a)(1).
``(3) Ready reserve-national guard employee.--The term
`Ready Reserve-National Guard employee' means an employee who
is a member of the Ready Reserve of a reserve component of an
Armed Force of the United States as described in sections
10142 and 10101 of title 10, United States Code.
``(4) Certain rules to apply.--Rules similar to the rules
of section 52 shall apply.
``(e) Portion of Credit Made Refundable.--
``(1) In general.--In the case of an eligible employer of a
Ready Reserve-National Guard employee, the aggregate credits
allowed to a taxpayer under subpart C shall be increased by
the lesser of--
``(A) the credit which would be allowed under this section
without regard to this subsection and the limitation under
section 38(c), or
``(B) the amount by which the aggregate amount of credits
allowed by this subpart (determined without regard to this
subsection) would increase if the limitation imposed by
section 38(c) for any taxable year were increased by the
amount of employer payroll taxes imposed on the taxpayer
during the calendar year in which the taxable year begins.

The amount of the credit allowed under this subsection shall
not be treated as a credit allowed under this subpart and
shall reduce the amount of the credit otherwise allowable
under subsection (a) without regard to section 38(c).
``(2) Eligible employer.--For purposes of this subsection,
the term `eligible employer' means an employer which is a
State or local government or subdivision thereof.
``(3) Employer payroll taxes.--For purposes of this
subsection--
``(A) In general.--The term `employer payroll taxes' means
the taxes imposed by--
``(i) section 3111(b), and
``(ii) sections 3211(a) and 3221(a) (determined at a rate
equal to the rate under section 3111(b)).
``(B) Special rule.--A rule similar to the rule of section
24(d)(2)(C) shall apply for purposes of subparagraph (A).''.
(b) Credit To Be Part of General Business Credit.--
Subsection (b) of section 38 of

[[Page S6036]]

such Code (relating to general business credit) is amended by
striking ``plus'' at the end of paragraph (18), by striking
the period at the end of paragraph (19) and inserting ``,
plus'', and by adding at the end the following:
``(20) the Ready Reserve-National Guard employee credit
determined under section 45J(a).''.
(c) Denial of Double Benefit.--Section 280C(a) (relating to
rule for employment credits) is amended by inserting
``45J(a),'' after ``45A(a),''.
(d) Conforming Amendment.--The table of sections for
subpart D of part IV of subchapter A of chapter 1 of the
Internal Revenue Code of 1986 is amended by inserting after
the item relating to section 45I the following:

``Sec. 45J. Ready Reserve-National Guard employee credit.''.

(e) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after the date of the
enactment of this Act.

SEC. 4. READY RESERVE-NATIONAL GUARD REPLACEMENT EMPLOYEE
CREDIT.

(a) In General.--Subpart B of part IV of subchapter A of
chapter 1 of the Internal Revenue Code of 1986 (relating to
foreign tax credit, etc.) is amended by adding after section
30A the following new section:

``SEC. 30B. READY RESERVE-NATIONAL GUARD REPLACEMENT EMPLOYEE
CREDIT.

``(a) Allowance of Credit.--
``(1) In general.--In the case of an eligible taxpayer,
there shall be allowed as a credit against the tax imposed by
this chapter for the taxable year the sum of the employment
credits for each qualified replacement employee under this
section.
``(2) Employment credit.--The employment credit with
respect to a qualified replacement employee of the taxpayer
for any taxable year is equal to 50 percent of the lesser
of--
``(A) the individual's qualified compensation attributable
to service rendered as a qualified replacement employee, or
``(B) $12,000.
``(b) Qualified Compensation.--The term `qualified
compensation' means--
``(1) compensation which is normally contingent on the
qualified replacement employee's presence for work and which
is deductible from the taxpayer's gross income under section
162(a)(1),
``(2) compensation which is not characterized by the
taxpayer as vacation or holiday pay, or as sick leave or pay,
or as any other form of pay for a nonspecific leave of
absence, and
``(3) group health plan costs (if any) with respect to the
qualified replacement employee.
``(c) Qualified Replacement Employee.--For purposes of this
section--
``(1) In general.--The term `qualified replacement
employee' means an individual who is hired to replace a Ready
Reserve-National Guard employee or a Ready Reserve-National
Guard self-employed taxpayer, but only with respect to the
period during which--
``(A) such Ready Reserve-National Guard employee is
receiving an actual compensation amount (as defined in
section 45J(b)) from the employee's employer and is
participating in qualified active duty, including time spent
in travel status, or
``(B) such Ready Reserve-National Guard self-employed
taxpayer is participating in such qualified active duty.
``(2) Ready reserve-national guard employee.--The term
`Ready Reserve-National Guard employee' has the meaning given
such term by section 45J(d)(3).
``(3) Ready reserve-national guard self-employed
taxpayer.--The term `Ready Reserve-National Guard self-
employed taxpayer' means a taxpayer who--
``(A) has net earnings from self-employment (as defined in
section 1402(a)) for the taxable year, and
``(B) is a member of the Ready Reserve of a reserve
component of an Armed Force of the United States as described
in section 10142 and 10101 of title 10, United States Code.
``(d) Coordination With Other Credits.--The amount of
credit otherwise allowable under sections 51(a) and 1396(a)
with respect to any employee shall be reduced by the credit
allowed by this section with respect to such employee.
``(e) Limitations.--
``(1) Application with other credits.--The credit allowed
under subsection (a) for any taxable year shall not exceed
the excess (if any) of--
``(A) the regular tax for the taxable year reduced by the
sum of the credits allowable under subpart A and sections 27,
29, and 30, over
``(B) the tentative minimum tax for the taxable year.
``(2) Disallowance for failure to comply with employment or
reemployment rights of members of the reserve components of
the armed forces of the united states.--No credit shall be
allowed under subsection (a) to a taxpayer for--
``(A) any taxable year, beginning after the date of the
enactment of this section, in which the taxpayer is under a
final order, judgment, or other process issued or required by
a district court of the United States under section 4323 of
title 38 of the United States Code with respect to a
violation of chapter 43 of such title, and
``(B) the 2 succeeding taxable years.
``(f) General Definitions and Special Rules.--For purposes
of this section--
``(1) Eligible taxpayer.--The term `eligible taxpayer'
means a small business employer or a Ready Reserve-National
Guard self-employed taxpayer.
``(2) Small business employer.--
``(A) In general.--The term `small business employer'
means, with respect to any taxable year, any employer who
employed an average of 50 or fewer employees on business days
during such taxable year.
``(B) Controlled groups.--For purposes of subparagraph (A),
all persons treated as a single employer under subsection
(b), (c), (m), or (o) of section 414 shall be treated as a
single employer.
``(3) Qualified active duty.--The term `qualified active
duty' has the meaning given such term by section 45J(d)(1).
``(4) Special rules for certain manufacturers.--
``(A) In general.--In the case of any qualified
manufacturer--
``(i) subsection (a)(2)(B) shall be applied by substituting
`$20,000' for `$12,000', and
``(ii) paragraph (2)(A) of this subsection shall be applied
by substituting `100' for `50'.
``(B) Qualified manufacturer.--For purposes of this
paragraph, the term `qualified manufacturer' means any person
if--
``(i) the primary business of such person is classified in
sector 31, 32, or 33 of the North American Industrial
Classification System, and
``(ii) all of such person's facilities which are used for
production in such business are located in the United States.
``(5) Carryback and carryforward allowed.--
``(A) In general.--If the credit allowable under subsection
(a) for a taxable year exceeds the amount of the limitation
under subsection (e)(1) for such taxable year (in this
paragraph referred to as the `unused credit year'), such
excess shall be a credit carryback to each of the 3 taxable
years preceding the unused credit year and a credit
carryforward to each of the 20 taxable years following the
unused credit year.
``(B) Rules.--Rules similar to the rules of section 39
shall apply with respect to the credit carryback and credit
carryforward under subparagraph (A).
``(6) Certain rules to apply.--Rules similar to the rules
of subsections (c), (d), and (e) of section 52 shall
apply.''.
(b) No Deduction for Compensation Taken Into Account for
Credit.--Section 280C(a) of the Internal Revenue Code of 1986
(relating to rule for employment credits), as amended by this
Act, is amended--
(1) by inserting ``or compensation'' after ``salaries'',
and
(2) by inserting ``30B,'' before ``45A(a),''.
(c) Conforming Amendment.--Section 55(c)(2) of the Internal
Revenue Code of 1986 is amended by inserting ``30B(e)(1),''
after ``30(b)(3),''.
(d) Clerical Amendment.--The table of sections for subpart
B of part IV of subchapter A of chapter 1 of the Internal
Revenue Code of 1986 is amended by adding after the item
relating to section 30A the following new item:

``Sec. 30B. Credit for replacement of activated military reservists.''.

(e) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after the date of the
enactment of this Act.

SEC. 5. INCOME TAX WITHHOLDING ON DIFFERENTIAL WAGE PAYMENTS.

(a) In General.--Section 3401 of the Internal Revenue Code
of 1986 (relating to definitions) is amended by adding at the
end the following new subsection:
``(i) Differential Wage Payments to Active Duty Members of
the Uniformed Services.--
``(1) In general.--For purposes of subsection (a), any
differential wage payment shall be treated as a payment of
wages by the employer to the employee.
``(2) Differential wage payment.--For purposes of paragraph
(1), the term `differential wage payment' means any payment
which--
``(A) is made by an employer to an individual with respect
to any period during which the individual is performing
service in the uniformed services while on active duty for a
period of more than 30 days, and
``(B) represents all or a portion of the wages the
individual would have received from the employer if the
individual were performing service for the employer.''.
(b) Effective Date.--The amendment made by this section
shall apply to remuneration paid after December 31, 2004.

SEC. 6. TREATMENT OF DIFFERENTIAL WAGE PAYMENTS FOR
RETIREMENT PLAN PURPOSES.

(a) Pension Plans.--
(1) In general.--Section 414(u) of the Internal Revenue
Code of 1986 (relating to special rules relating to veterans'
reemployment rights under USERRA) is amended by adding at the
end the following new paragraph:
``(11) Treatment of differential wage payments.--
``(A) In general.--Except as provided in this paragraph,
for purposes of applying this title to a retirement plan to
which this subsection applies--
``(i) an individual receiving a differential wage payment
shall be treated as an employee of the employer making the
payment,
``(ii) the differential wage payment shall be treated as
compensation, and

[[Page S6037]]

``(iii) the plan shall not be treated as failing to meet
the requirements of any provision described in paragraph
(1)(C) by reason of any contribution which is based on the
differential wage payment.
``(B) Special rule for distributions.--
``(i) In general.--Notwithstanding subparagraph (A)(i), for
purposes of section 401(k)(2)(B)(i)(I), 403(b)(7)(A)(ii),
403(b)(11)(A), or 457(d)(1)(A)(ii), an individual shall be
treated as having been severed from employment during any
period the individual is performing service in the uniformed
services described in section 3401(i)(2)(A).
``(ii) Limitation.--If an individual elects to receive a
distribution by reason of clause (i), the plan shall provide
that the individual may not make an elective deferral or
employee contribution during the 6-month period beginning on
the date of the distribution.
``(C) Nondiscrimination requirement.--Subparagraph (A)(iii)
shall apply only if all employees of an employer performing
service in the uniformed services described in section
3401(i)(2)(A) are entitled to receive differential wage
payments on reasonably equivalent terms and, if eligible to
participate in a retirement plan maintained by the employer,
to make contributions based on the payments. For purposes of
applying this subparagraph, the provisions of paragraphs (3),
(4), and (5), of section 410(b) shall apply.
``(D) Differential wage payment.--For purposes of this
paragraph, the term `differential wage payment' has the
meaning given such term by section 3401(i)(2).''.
(2) Conforming amendment.--The heading for section 414(u)
of such Code is amended by inserting ``and to Differential
Wage Payments to Members on Active Duty'' after ``USERRA''.
(b) Differential Wage Payments Treated as Compensation for
Individual Retirement Plans.--Section 219(f)(1) of the
Internal Revenue Code of 1986 (defining compensation) is
amended by adding at the end the following new sentence:
``The term `compensation' includes any differential wage
payment (as defined in section 3401(i)(2)).''.
(c) Effective Date.--The amendments made by this section
shall apply to plan years beginning after December 31, 2004.
(d) Provisions Relating to Plan Amendments.--
(1) In general.--If this subsection applies to any plan or
annuity contract amendment--
(A) such plan or contract shall be treated as being
operated in accordance with the terms of the plan or contract
during the period described in paragraph (2)(B)(i), and
(B) except as provided by the Secretary of the Treasury,
such plan shall not fail to meet the requirements of the
Internal Revenue Code of 1986 or the Employee Retirement
Income Security Act of 1974 by reason of such amendment.
(2) Amendments to which section applies.--
(A) In general.--This subsection shall apply to any
amendment to any plan or annuity contract which is made--
(i) pursuant to any amendment made by this section, and
(ii) on or before the last day of the first plan year
beginning on or after January 1, 2007.
(B) Conditions.--This subsection shall not apply to any
plan or annuity contract amendment unless--
(i) during the period beginning on the date the amendment
described in subparagraph (A)(i) takes effect and ending on
the date described in subparagraph (A)(ii) (or, if earlier,
the date the plan or contract amendment is adopted), the plan
or contract is operated as if such plan or contract amendment
were in effect, and
(ii) such plan or contract amendment applies retroactively
for such period.
______

By Mr. KENNEDY (for himself, Mr. Specter, Mr. Smith, Mr. Leahy,
Ms. Collins, Mr. Lieberman, Ms. Snowe, Mr. Wyden, Mr. Jeffords,
Mr. Schumer, Mr. Chafee, Mr. Akaka, Mr. Ensign, Mr. Bayh, Mr.
Biden, Mr. Bingaman, Mrs. Boxer, Ms. Cantwell, Mrs. Clinton,
Mr. Coleman, Mr. Corzine, Mr. Dayton, Mr. Dodd, Mr. Durbin,
Mrs. Feinstein, Mr. Harkin, Mr. Inouye, Mr. Johnson, Mr. Kerry,
Ms. Landrieu, Mr. Levin, Mrs. Lincoln, Ms. Mikulski, Mrs.
Murray, Mr. Nelson of Nebraska, Mr. Nelson of Florida, Mr.
Obama, Mr. Reed, Mr. Salazar, Mr. Sarbanes, Ms. Stabenow, Mr.
Lautenberg, Mr. Pryor, and Mr. Rockefeller):
S. 1145. A bill to provide Federal assistance to States and local
jurisdictions to prosecute hate crimes; to the Committee on the
Judiciary.
Mr. KENNEDY. Mr. President, hate crimes are a violation of everything
our country stands for. They send the poisonous message that some
Americans deserve to be victimized solely because of who they are.
They're basically acts of domestic terrorism. Hate crimes have an
impact far greater than the impact on their individual victim. They're
crimes against entire communities, against the whole Nation, and
against the fundamental ideals on which America was founded.
The vast majority of Congress agrees. Last year, Senator Smith and I
offered the same measure. The Senate passed it as an amendment to the
Defense Authorization Bill by a nearly 2-1 bi-partisan vote of 65-33.
By a vote of 213-186, the House instructed its conferees to support it
in the conference report on the bill. Unfortunately, House leaders
insisted that the provision be dropped in conference. This week,
Senator Smith and I are introducing the identical bill.
The provision is supported by a broad coalition of law enforcement
and civil rights groups, including the National Sheriff's Association,
the International Association of Chiefs of Police, the Anti-Defamation
League, and the National Center for Victims of Crime, and I'm
optimistic the bill would have the same broad support it did before.
Those who commit hate crimes prey on the vulnerable and terrorize them,
because they can't protect themselves. If our Nation stands for
anything, it's to protect the vulnerable.
We know that hate crimes are a serious problem that continues to
plague us. According to FBI statistics, over 9,000 people were victims
of hate crimes reported in the United States in 2003. That's almost 25
people victimized a day, every day, based on their race, religion,
sexual orientation, ethnic background, or disability. Sadly, these
F.B.I. statistics show only part of the problem, because many hate
crimes go unreported. The Southern Poverty Law Center, a nonprofit
organization that monitors hate groups and extremist activity,
estimates that the actual number of hate crimes committed in the United
States each year is closer to 50,000.
Congress can't ignore the problem. Our bill will strengthen the
ability of Federal, State, and local governments to investigate and
prosecute these vicious and senseless crimes. Current Federal law,
obviously isn't adequate to protect our citizens.
It contains excessive restrictions requiring proof that victims were
attacked because they were engaged in certain ``federally protected
activities.'' It doesn't include violence committed because of person's
sexual orientation, gender, or disability. It covers only hate crimes
based on race, religion, or ethnic background.
The federally protected activity requirement is outdated, unwise, and
unnecessary. In June 2003, three men saw 6 Latino teenagers in a family
restaurant on Long Island. The teenagers, 3 boys and 3 girls, between
13-15 years old, knew each other from church and baseball teams. They
were there together to celebrate the birthday of one of the girls,
whose parents made her take her 13 year old sister along as
``chaperone.'' A parent dropped them all off in his mini-van and
promised to pick them up after dinner and a movie. But, moments after
leaving, he received a panicked phone call from one of the children,
telling him they'd been attacked.
As the group entered the restaurant, three men were leaving the bar,
after drinking there for hours. For no apparent reason, they assaulted
the teenagers, pummeling one boy and severing a tendon in his hand with
a sharp weapon. During the attack, the men screamed racial slurs and
one identified himself as a skinhead. The children, who had never
experienced anything like this, have been traumatized ever since.
Two of the defendants were tried under current Federal law for
committing a hate crime and were acquitted. The Jurors said they
acquitted them because the government had not proved the attack took
place because the victims were engaged in a federally protected
activity--using the restaurant.
The bill we introduce today eliminates the federally protected
activity requirement. Under this bill, these defendants who walked out
of the front door of the courthouse free that day would almost
certainly have left in handcuffs through a different door.
The bill also recognizes that hate crimes are committed against
people because of their sexual orientation, their gender, and their
disability. Current Federal law didn't protect gay campers in Honolulu
from attempted murder when their tents were doused

[[Page S6038]]

with a flammable liquid and set on fire because they were gay.
It didn't protect Brandon Teena, in Humboldt, NE who was raped and
beaten by two male friends when they discovered that he was living as a
male but was anatomically female. The local sheriff refused to arrest
the offenders, and they later shot and stabbed Brandon to death.
Current law did not protect a 23-year-old mentally disabled man in
Port Monmouth, New Jersey who was kidnapped by 9 men and women and
tortured for three hours before being dumped in the woods because he
was disabled.
Our bill will close all these flagrant loopholes. In addition to
removing the federally protected activity requirement and expanding the
class of protected people:
The bill protects State interests with a strict certification
procedure that requires the Federal Government to consult with local
officials before bringing a Federal case.
It offers Federal assistance to help State and local law enforcement
investigate and prosecute hate crimes in any of the categories.
It offers training grants for local law enforcement.
It amends the Federal Hate Crime Statistics Act to add gender to the
existing categories of race, religion, ethnic background, sexual
orientation, and disability.
A strong Federal role in prosecuting hate crimes is essential for
practical and symbolic reasons. In practical terms, the bill will have
a real world impact on actual criminal investigations and prosecutions
by State and Federal officials.
The presence or absence of the ``federally protected activity''
requirement frequently determines whether state and local resources
must be used to prosecute these crimes or whether the Federal
Government can bring its full weight to bear on the case.
Hate crime investigations tend to be expensive, requiring
considerable law enforcement legwork and extensive use of investigative
grand juries. State officials regularly seek federal assistance in
bringing hate crime offenders to justice under current law. This bill
expands the opportunity for the Justice Department to provide that
support.
Our bill fully respects the primary role of State and local law
enforcement in responding to violent crime. The vast majority of hate
crimes will continue to be prosecuted at the state and local level. The
bill authorizes the Justice Department to assist state and local
authorities in hate crimes cases, it authorizes Federal prosecutions
only when a State does not have jurisdiction, or when it asks the
Federal Government to take jurisdiction, or when it fails to act
against hate-motivated violence.
In other words, the bill establishes an appropriate back-up for State
and local law enforcement to deal with hate crimes in cases where
states request assistance, or cases that would not otherwise be
effectively investigated and prosecuted.
The symbolic value of the bill is equally important. Hate crimes
target whole communities, not just individuals. They are intended to
send messages of fear that extend beyond the moment and beyond the
individual victim of the attack. Attacking people because they are gay,
or African-American, or Jewish, or any other criteria in the bill is
bigotry at its worst. Hate crimes are designed to de-humanize and
diminish, and we must say loud and clear to those inclined to commit
them that they'll go to prison if they do.
The vast majority of us in Congress recognized the importance of
making that statement last year. This year, we can make the statement
even louder, by turning this bill into law.
Mr. SMITH. Mr. President, as I have done so many times before, I rise
today to speak about the need for hate crimes legislation and to
introduce the Local Law Enforcement Enhancement Act of 2005. I first
sponsored this bill with my colleague, Senator Kennedy, in 1999 and
again in 2001 and 2003.
In the Senate, this legislation passed as an amendment to the
Commerce, Justice, State appropriations bill in 1999 and the Defense
Department authorization bill in 2000 and 2004, but removed in
conference in each case. In 2003, it was introduced as an amendment to
the Foreign Relations Authorization Act, but did not pass due to a
procedural vote. Clearly, hate crimes legislation has strong support in
the Senate.
Senator Kennedy and I are reintroducing this bill again today because
the need for Federal hate crimes legislation is greater than ever. The
high prevalence of hate crimes is staggering. Every day there is
another America that is attacked or even murdered in an act solely
motivated by hate.
Hate crimes tear at the very fabric of our Nation by intimidating
entire groups of Americans and creating fear across communities. No one
in America should be victimized because of who they are, how they look,
or what religion they worship. And the Federal Government should be
able to come to the aid of those who have been wronged and protect
victims.
Since 1969, Federal law has permitted prosecution of hate crimes
motivated by race, religion, national origin, or color, if the victim
was engaging in one of six ``Federally protected'' activities. It has
become clear that the statue needs to be amended--and that is what our
legislation does. Our legislation would expand on current laws to
encompass sexual orientation, gender and disability. It would enable
Federal prosecutors to pursue hate crimes cases where local authorities
often lack the resources or the ability to prosecute such crimes.
Nobel laureate Eli Wiesel once said: ``To hate is to deny another
person's humanity.'' As a Nation that serves as the beacon of justice,
freedom and liberty everywhere, we simply cannot tolerate violence
against our own citizens based on their race, color, religion, or
national origin. No matter how far the United States has come and the
progress we have made in protecting American's civil rights, much work
remains. We cannot fight terror abroad and bow down to terror at home.
This legislation is a symbol that can become substance. As I have
often said, the law is a teacher, and we should teach our fellow
Americans that bigotry will not be tolerated. Our government must have
the ability to persuade, to pursue, and to prosecute when hate is the
motive of violence against another American, no matter their race,
sexual orientation, religion, disability, or gender. By changing the
law, I truly believe we can change hearts and minds as well.
I urge my colleagues to help me to change the hearts and minds and to
make it widely known that we live in a society and a country that does
not tolerate those who impose on the civil rights of others simply
because they are different.
This year, Congress needs to act. I look forward to President Bush
signing this legislation into law.
______

By Mrs. BOXER:
S. 1146. A bill to require the Federal Trade Commission to monitor
and investigate gasoline prices under certain circumstances; to the
Committee on Commerce, Science, and Transportation.
Mrs. BOXER. Mr. President, in March 2000, I introduced legislation to
deal with the high price of gasoline. At the time, the price of
gasoline had reached a startlingly high $2.15 per gallon in California.
Today, gasoline prices on average in California are $2.43 per gallon,
13 percent higher. The problem is getting worse, not better, and so
today I am reintroducing my bill to control the manipulation of
gasoline prices.
We have heard that higher gasoline prices are due solely to higher
crude oil prices. I just do not buy it.
According to the U.S. Energy Information Administration, from January
17 through April 11, the cost of crude oil rose 10.8 percent. During
the same time period, the average retail price of gasoline in the
United States rose 24.9 percent. Something is not right.
Look at the profits that are being pocketed by the big oil companies.
Compared to the same time last year, oil companies' first-quarter
profits are dramatically higher.
Look at the number of mergers and acquisitions in the industry over
the past several months. The continued consolidation only reduces
competition and increases energy costs.
Look at the refiners that may be taking plants off-line at will for
``routine

[[Page S6039]]

maintenance,'' which is reminiscent of the electricity crisis when
generators took their plants off-line for ``routine maintenance'' in
order to artificially increase prices.
My legislation will shed light on manipulation and hopefully curtail
it.
The bill requires the Federal Trade Commission to automatically
investigate the gasoline market for manipulation anytime average
gasoline prices increase in any State by 20 percent in a period of 3
months or less and remain at that level for 7 days or more.
Market manipulation would include, but it is not limited to,
collusion or the creation of artificial shortages such as unnecessarily
taking refineries off-line. In determining the trigger, the gasoline
price used would be the Energy Information Agency's weekly pricing of
regular grade gasoline. A report on the FTC's investigation would be
due to Congress 14 days after the price trigger.
Under the bill, the FTC would be required within 2 weeks of issuing
the report to hold a public meeting to discuss the findings. If the
finings indicate that there is market manipulation, then the FTC would
work with the State's attorney general to determine the penalties.
If the findings indicate that there is no market manipulation, then
the U.S. Department of Energy must officially decide, within 2 weeks,
the Strategic Petroleum Reserve should be used in order to ease prices
and stabilize supply.
We need to deter market manipulation. Otherwise, we risk serious
price gouging with no accountability to consumers. My legislation
offers a reasonable standard for an investigation and a reasonable time
frame in which to complete that investigation. I believe the threat of
these investigations and the public light that would be shed on the
system will keep gasoline prices down.
I urge my colleagues to cosponsor this bill.
______

By Mr. ROCKEFELLER (for himself, Ms. Snowe, Mr. Baucus, Mr.
Burns, Mr. Schumer, Mr. Bunning, and Ms. Cantwell):
S. 1147. A bill to amend the Internal Revenue Code of 1986 to provide
for the expensing of broadband Internet access expenditures, and for
other purposes; to the Committee on Finance.
Mr. ROCKEFELLER. Mr. President, I am introducing legislation that
would accelerate the deployment of advanced broadband internet access
technologies in rural and underserved regions. This bipartisan
legislation is very similar to bills that I have introduced in the last
several Congresses. I want to thank Senators Snowe, Baucus, Burns,
Schumer, Cantwell, and Bunning for co-sponsoring this bill.
The convergence of computing and communications has fundamentally and
forever changed the way Americans live and work. Individuals,
businesses, schools, libraries, hospitals, and many others share
information through computer networks. We shop online. Some of us work
at home, or in other locations, using networked computers to interact
with our colleagues and associates. Distance learning and telemedicine
provide important services in remote locations. In our personal lives
we look to our networked computers for entertainment and to communicate
with family and friends. These trends are accelerating dramatically.
A decade ago, telephone-based low-bandwidth services met most of our
limited data communications needs. Today this technology is obsolete.
Most businesses and many individuals find that they require the ability
to transmit information much faster, using what is commonly known as
broadband communications. Several technologies compete to provide
customers with broadband communications. Among the most prominent are
optical fiber, wireless, digital-subscriber lines, cable modems, power
line transmission, and satellites.
Indeed, as the need for faster services compounds, the technologies
must be improved and even the definition of broadband communications
must be revised and updated. The now-obsolete telephone-based systems
transmit data at up to 56 thousand bits per second. Today, internet
service providers commonly install first generation broadband systems
that transmit data at rates between 256 thousand bits per second and 4
million bits per second. But we can now see clearly that these current-
generation systems will be superseded by second-generation systems,
already being installed in a few areas, which operate at data rates of
up to 30 million bits per second. In other countries, services that
transmit and receive data at 100 million bits per second are already
available to individuals. Some industry experts predict that within 5
to 10 years there will be a substantial demand for systems that operate
at 1 billion bits per second.
Despite the industry downturn over the past few years, America's
telecommunications providers are working to make higher speed
communications more widely available. Progress is fastest, and the
business case for investment is most attractive, in affluent urban and
suburban areas, especially newly developing areas. Rural areas are less
fortunate. Low population densities, rugged terrain, and other factors
make these areas difficult and expensive to serve. Similarly, the
business case for providers to invest in underserved areas, mostly low
income areas, is generally weak.
As was the case with electric power and telephone systems in the 20th
century, financial incentives will be necessary to assure the extension
of broadband communications infrastructure into rural and underserved
regions. These incentives will also provide a substantial benefit to
the American economy. In the same way that extending electric power
systems into rural areas stimulated a new demand for electric
appliances and other products, the wider availability of broadband
communications will stimulate electronic commerce and new commercial
services.
For my State of West Virginia, and other rural and low income States,
the availability of advanced communications systems will allow
residents to participate in the 21st century economy and have access to
the economic and cultural benefits of urban living while retaining
their cherished rural values and lifestyles.
The consequences of failing to act are serious. Businesses in
infrastructure-rich regions will prosper at the expense of those in
rural and underserved regions. New businesses will locate where the
information infrastructure is strong. The migration of jobs to urban
and affluent areas will accelerate and tax revenue in rural and
underserved areas will continue to decline. Residents of West Virginia
and other rural states will continue to be at an economic and
educational disadvantage. The ``digital divide'' will widen and the gap
between ``have'' and ``have-not'' regions will expand.
Decisions on how this country chooses to deploy information
technology have the power to fundamentally transform the future of
rural America. I firmly believe, and I am sure this view is shared by
many of my colleagues, that rural communities deserve the same
opportunities as their wealthier urban and suburban counterparts. We
must make a commitment to them now, while there is still time, that
their communications infrastructure will not always be a generation or
more behind that of urban and suburban areas.
My bill would provide incentives for broadband deployment by allowing
providers, under certain conditions, to treat their investments in
broadband technologies as current-tax-year expenses. Under my
legislation, the incentives provided by this bill would be
differentiated to favor investments in technologies that will continue
to meet communications needs further into the future.
Half of investments in systems that permit data to be received at
rates of 1.0 million bits per second and transmitted at rates of 128
thousand bits per second would qualify. This is a substantial incentive
to provide residents of rural and underserved areas the capabilities
already enjoyed by individuals and businesses in urban and suburban
areas.
Investments in systems that permit data to be received at 22 million
bits per second and transmitted at 5 million bits per second would
fully qualify. This more powerful incentive challenges internet service
providers to provide the capabilities that they have already begun to
introduce in urban and suburban areas. Forward-looking

[[Page S6040]]

providers will use this opportunity to invest in technologies that can
be upgraded further as the demand grows.
Americans believe strongly in equal opportunity. This bill is just
one part of an effort to make sure that all Americans have equal access
to modern communications systems and the opportunities that those
systems are bringing in the 21st century.
I hope that the Members of this body will support this important
legislation.
I ask unanimous consent that the text of the bill be printed in the
Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 1147

Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,

SECTION 1. EXPENSING OF BROADBAND INTERNET ACCESS
EXPENDITURES.

(a) In General.--Part VI of subchapter B of chapter 1 of
the Internal Revenue Code of 1986 (relating to itemized
deductions for individuals and corporations) is amended by
inserting after section 190 the following new section:

``SEC. 191. BROADBAND EXPENDITURES.

``(a) Treatment of Expenditures.--
``(1) In general.--A taxpayer may elect to treat any
qualified broadband expenditure which is paid or incurred by
the taxpayer as an expense which is not chargeable to capital
account. Any expenditure which is so treated shall be allowed
as a deduction.
``(2) Election.--An election under paragraph (1) shall be
made at such time and in such manner as the Secretary may
prescribe by regulation.
``(b) Qualified Broadband Expenditures.--For purposes of
this section--
``(1) In general.--The term `qualified broadband
expenditure' means, with respect to any taxable year, any
direct or indirect costs incurred after the date of the
enactment of this Act and before the date which is 10 years
after such date and properly taken into account with respect
to--
``(A) the purchase or installation of qualified equipment
(including any upgrades thereto), and
``(B) the connection of such qualified equipment to any
qualified subscriber.
``(2) Certain satellite expenditures excluded.--Such term
shall not include any costs incurred with respect to the
launching of any satellite equipment.
``(3) Leased equipment.--Such term shall include so much of
the purchase price paid by the lessor of qualified equipment
subject to a lease described in subsection (c)(2)(B) as is
attributable to expenditures incurred by the lessee which
would otherwise be described in paragraph (1).
``(4) Limitation with regard to current generation
broadband services.--Only 50 percent of the amounts taken
into account under paragraph (1) with respect to qualified
equipment through which current generation broadband services
are provided shall be treated as qualified broadband
expenditures.
``(c) When Expenditures Taken Into Account.--For purposes
of this section--
``(1) In general.--Qualified broadband expenditures with
respect to qualified equipment shall be taken into account
with respect to the first taxable year in which--
``(A) current generation broadband services are provided
through such equipment to qualified subscribers, or
``(B) next generation broadband services are provided
through such equipment to qualified subscribers.
``(2) Limitation.--
``(A) In general.--Qualified expenditures shall be taken
into account under paragraph (1) only with respect to
qualified equipment--
``(i) the original use of which commences with the
taxpayer, and
``(ii) which is placed in service, after the date of the
enactment of this Act.
``(B) Sale-leasebacks.--For purposes of subparagraph (A),
if property--
``(i) is originally placed in service after the date of the
enactment of this Act by any person, and
``(ii) sold and leased back by such person within 3 months
after the date such property was originally placed in
service,

such property shall be treated as originally placed in
service not earlier than the date on which such property is
used under the leaseback referred to in clause (ii).
``(d) Special Allocation Rules.--
``(1) Current generation broadband services.--For purposes
of determining the amount of qualified broadband expenditures
under subsection (a)(1) with respect to qualified equipment
through which current generation broadband services are
provided, if the qualified equipment is capable of serving
both qualified subscribers and other subscribers, the
qualified broadband expenditures shall be multiplied by a
fraction--
``(A) the numerator of which is the sum of the number of
potential qualified subscribers within the rural areas and
the underserved areas which the equipment is capable of
serving with current generation broadband services, and
``(B) the denominator of which is the total potential
subscriber population of the area which the equipment is
capable of serving with current generation broadband
services.
``(2) Next generation broadband services.--For purposes of
determining the amount of qualified broadband expenditures
under subsection (a)(1) with respect to qualified equipment
through which next generation broadband services are
provided, if the qualified equipment is capable of serving
both qualified subscribers and other subscribers, the
qualified expenditures shall be multiplied by a fraction--
``(A) the numerator of which is the sum of--
``(i) the number of potential qualified subscribers within
the rural areas and underserved areas, plus
``(ii) the number of potential qualified subscribers within
the area consisting only of residential subscribers not
described in clause (i),

which the equipment is capable of serving with next
generation broadband services, and
``(B) the denominator of which is the total potential
subscriber population of the area which the equipment is
capable of serving with next generation broadband services.
``(e) Definitions.--For purposes of this section--
``(1) Antenna.--The term `antenna' means any device used to
transmit or receive signals through the electromagnetic
spectrum, including satellite equipment.
``(2) Cable operator.--The term `cable operator' has the
meaning given such term by section 602(5) of the
Communications Act of 1934 (47 U.S.C. 522(5)).
``(3) Commercial mobile service carrier.--The term
`commercial mobile service carrier' means any person
authorized to provide commercial mobile radio service as
defined in section 20.3 of title 47, Code of Federal
Regulations.
``(4) Current generation broadband service.--The term
`current generation broadband service' means the transmission
of signals at a rate of at least 1,000,000 bits per second to
the subscriber and at least 128,000 bits per second from the
subscriber.
``(5) Multiplexing or demultiplexing.--The term
`multiplexing' means the transmission of 2 or more signals
over a single channel, and the term `demultiplexing' means
the separation of 2 or more signals previously combined by
compatible multiplexing equipment.
``(6) Next generation broadband service.--The term `next
generation broadband service' means the transmission of
signals at a rate of at least 22,000,000 bits per second to
the subscriber and at least 5,000,000 bits per second from
the subscriber.
``(7) Nonresidential subscriber.--The term `nonresidential
subscriber' means any person who purchases broadband services
which are delivered to the permanent place of business of
such person.
``(8) Open video system operator.--The term `open video
system operator' means any person authorized to provide
service under section 653 of the Communications Act of 1934
(47 U.S.C. 573).
``(9) Other wireless carrier.--The term `other wireless
carrier' means any person (other than a telecommunications
carrier, commercial mobile service carrier, cable operator,
open video system operator, or satellite carrier) providing
current generation broadband services or next generation
broadband service to subscribers through the radio
transmission of energy.
``(10) Packet switching.--The term `packet switching' means
controlling or routing the path of any digitized transmission
signal which is assembled into packets or cells.
``(11) Provider.--The term `provider' means, with respect
to any qualified equipment--
``(A) a cable operator,
``(B) a commercial mobile service carrier,
``(C) an open video system operator,
``(D) a satellite carrier,
``(E) a telecommunications carrier, or
``(F) any other wireless carrier,

providing current generation broadband services or next
generation broadband services to subscribers through such
qualified equipment.
``(12) Provision of services.--A provider shall be treated
as providing services to 1 or more subscribers if--
``(A) such a subscriber has been passed by the provider's
equipment and can be connected to such equipment for a
standard connection fee,
``(B) the provider is physically able to deliver current
generation broadband services or next generation broadband
services, as applicable, to such a subscriber without making
more than an insignificant investment with respect to such
subscriber,
``(C) the provider has made reasonable efforts to make such
subscribers aware of the availability of such services,
``(D) such services have been purchased by 1 or more such
subscribers, and
``(E) such services are made available to such subscribers
at average prices comparable to those at which the provider
makes available similar services in any areas in which the
provider makes available such services.
``(13) Qualified equipment.--
``(A) In general.--The term `qualified equipment' means
equipment which provides current generation broadband
services or next generation broadband services--
``(i) at least a majority of the time during periods of
maximum demand to each subscriber who is utilizing such
services, and
``(ii) in a manner substantially the same as such services
are provided by the provider to subscribers through equipment
with respect to which no deduction is allowed under
subsection (a)(1).

[[Page S6041]]

``(B) Only certain investment taken into account.--Except
as provided in subparagraph (C) or (D), equipment shall be
taken into account under subparagraph (A) only to the extent
it--
``(i) extends from the last point of switching to the
outside of the unit, building, dwelling, or office owned or
leased by a subscriber in the case of a telecommunications
carrier,
``(ii) extends from the customer side of the mobile
telephone switching office to a transmission/receive antenna
(including such antenna) owned or leased by a subscriber in
the case of a commercial mobile service carrier,
``(iii) extends from the customer side of the headend to
the outside of the unit, building, dwelling, or office owned
or leased by a subscriber in the case of a cable operator or
open video system operator, or
``(iv) extends from a transmission/receive antenna
(including such antenna) which transmits and receives signals
to or from multiple subscribers, to a transmission/receive
antenna (including such antenna) on the outside of the unit,
building, dwelling, or office owned or leased by a subscriber
in the case of a satellite carrier or other wireless carrier,
unless such other wireless carrier is also a
telecommunications carrier.
``(C) Packet switching equipment.--Packet switching
equipment, regardless of location, shall be taken into
account under subparagraph (A) only if it is deployed in
connection with equipment described in subparagraph (B) and
is uniquely designed to perform the function of packet
switching for current generation broadband services or next
generation broadband services, but only if such packet
switching is the last in a series of such functions performed
in the transmission of a signal to a subscriber or the first
in a series of such functions performed in the transmission
of a signal from a subscriber.
``(D) Multiplexing and demultiplexing equipment.--
Multiplexing and demultiplexing equipment shall be taken into
account under subparagraph (A) only to the extent it is
deployed in connection with equipment described in
subparagraph (B) and is uniquely designed to perform the
function of multiplexing and demultiplexing packets or cells
of data and making associated application adaptions, but only
if such multiplexing or demultiplexing equipment is located
between packet switching equipment described in subparagraph
(C) and the subscriber's premises.
``(14) Qualified subscriber.--The term `qualified
subscriber' means--
``(A) with respect to the provision of current generation
broadband services--
``(i) any nonresidential subscriber maintaining a permanent
place of business in a rural area or underserved area, or
``(ii) any residential subscriber residing in a dwelling
located in a rural area or underserved area which is not a
saturated market, and
``(B) with respect to the provision of next generation
broadband services--
``(i) any nonresidential subscriber maintaining a permanent
place of business in a rural area or underserved area, or
``(ii) any residential subscriber.
``(15) Residential subscriber.--The term `residential
subscriber' means any individual who purchases broadband
services which are delivered to such individual's dwelling.
``(16) Rural area.--The term `rural area' means any census
tract which--
``(A) is not within 10 miles of any incorporated or census
designated place containing more than 25,000 people, and
``(B) is not within a county or county equivalent which has
an overall population density of more than 500 people per
square mile of land.
``(17) Rural subscriber.--The term `rural subscriber' means
any residential subscriber residing in a dwelling located in
a rural area or nonresidential subscriber maintaining a
permanent place of business located in a rural area.
``(18) Satellite carrier.--The term `satellite carrier'
means any person using the facilities of a satellite or
satellite service licensed by the Federal Communications
Commission and operating in the Fixed-Satellite Service under
part 25 of title 47 of the Code of Federal Regulations or the
Direct Broadcast Satellite Service under part 100 of title 47
of such Code to establish and operate a channel of
communications for distribution of signals, and owning or
leasing a capacity or service on a satellite in order to
provide such point-to-multipoint distribution.
``(19) Saturated market.--The term `saturated market' means
any census tract in which, as of the date of the enactment of
this section--
``(A) current generation broadband services have been
provided by a single provider to 85 percent or more of the
total number of potential residential subscribers residing in
dwellings located within such census tract, and
``(B) such services can be utilized--
``(i) at least a majority of the time during periods of
maximum demand by each such subscriber who is utilizing such
services, and
``(ii) in a manner substantially the same as such services
are provided by the provider to subscribers through equipment
with respect to which no deduction is allowed under
subsection (a)(1).
``(20) Subscriber.--The term `subscriber' means any person
who purchases current generation broadband services or next
generation broadband services.
``(21) Telecommunications carrier.--The term
`telecommunications carrier' has the meaning given such term
by section 3(44) of the Communications Act of 1934 (47 U.S.C.
153(44)), but--
``(A) includes all members of an affiliated group of which
a telecommunications carrier is a member, and
``(B) does not include a commercial mobile service carrier.
``(22) Total potential subscriber population.--The term
`total potential subscriber population' means, with respect
to any area and based on the most recent census data, the
total number of potential residential subscribers residing in
dwellings located in such area and potential nonresidential
subscribers maintaining permanent places of business located
in such area.
``(23) Underserved area.--The term `underserved area'
means--
``(A) any census tract which is located in--
``(i) an empowerment zone or enterprise community
designated under section 1391, or
``(ii) the District of Columbia Enterprise Zone established
under section 1400, or
``(B) any census tract--
``(i) the poverty level of which is at least 30 percent
(based on the most recent census data), and
``(ii) the median family income of which does not exceed--

``(I) in the case of a census tract located in a
metropolitan statistical area, 70 percent of the greater of
the metropolitan area median family income or the statewide
median family income, and
``(II) in the case of a census tract located in a
nonmetropolitan statistical area, 70 percent of the
nonmetropolitan statewide median family income.

``(24) Underserved subscriber.--The term `underserved
subscriber' means any residential subscriber residing in a
dwelling located in an underserved area or nonresidential
subscriber maintaining a permanent place of business located
in an underserved area.
``(f) Special Rules.--
``(1) Property used outside the united states, etc., not
qualified.--No expenditures shall be taken into account under
subsection (a)(1) with respect to the portion of the cost of
any property referred to in section 50(b) or with respect to
the portion of the cost of any property specified in an
election under section 179.
``(2) Basis reduction.--
``(A) In general.--For purposes of this title, the basis of
any property shall be reduced by the portion of the cost of
such property taken into account under subsection (a)(1).
``(B) Ordinary income recapture.--For purposes of section
1245, the amount of the deduction allowable under subsection
(a)(1) with respect to any property which is of a character
subject to the allowance for depreciation shall be treated as
a deduction allowed for depreciation under section 167.
``(3) Coordination with section 38.--No credit shall be
allowed under section 38 with respect to any amount for which
a deduction is allowed under subsection (a)(1).''.
(b) Special Rule for Mutual or Cooperative Telephone
Companies.--Section 512(b) of the Internal Revenue Code of
1986 (relating to modifications) is amended by adding at the
end the following new paragraph:
``(18) Special rule for mutual or cooperative telephone
companies.--A mutual or cooperative telephone company which
for the taxable year satisfies the requirements of section
501(c)(12)(A) may elect to reduce its unrelated business
taxable income for such year, if any, by an amount that does
not exceed the qualified broadband expenditures which would
be taken into account under section 191 for such year by such
company if such company was not exempt from taxation. Any
amount which is allowed as a deduction under this paragraph
shall not be allowed as a deduction under section 191 and the
basis of any property to which this paragraph applies shall
be reduced under section 1016(a)(32).''.
(c) Conforming Amendments.--
(1) Section 263(a)(1) of the Internal Revenue Code of 1986
(relating to capital expenditures) is amended by striking
``or'' at the end of subparagraph (H), by striking the period
at the end of subparagraph (I) and inserting ``, or'', and by
adding at the end the following new subparagraph:
``(J) expenditures for which a deduction is allowed under
section 191.''.
(2) Section 1016(a) of such Code is amended by striking
``and'' at the end of paragraph (30), by striking the period
at the end of paragraph (31) and inserting ``, and'', and by
adding at the end the following new paragraph:
``(32) to the extent provided in section 191(f)(2).''.
(3) The table of sections for part VI of subchapter A of
chapter 1 of such Code is amended by inserting after the item
relating to section 190 the following new item:

``Sec. 191. Broadband expenditures.''.

(d) Designation of Census Tracts.--
(1) In general.--The Secretary of the Treasury shall, not
later than 90 days after the date of the enactment of this
Act, designate and publish those census tracts meeting the
criteria described in paragraphs (16), (22), and (23) of
section 191(e) of the Internal Revenue Code of 1986 (as added
by this section). In making such designations, the Secretary
of the Treasury shall consult with such other departments and
agencies as the Secretary determines appropriate.
(2) Saturated market.--

[[Page S6042]]

(A) In general.--For purposes of designating and publishing
those census tracts meeting the criteria described in
subsection (e)(19) of such section 191--
(i) the Secretary of the Treasury shall prescribe not later
than 30 days after the date of the enactment of this Act the
form upon which any provider which takes the position that it
meets such criteria with respect to any census tract shall
submit a list of such census tracts (and any other
information required by the Secretary) not later than 60 days
after the date of the publication of such form, and
(ii) the Secretary of the Treasury shall publish an
aggregate list of such census tracts and the applicable
providers not later than 30 days after the last date such
submissions are allowed under clause (i).
(B) No subsequent lists required.--The Secretary of the
Treasury shall not be required to publish any list of census
tracts meeting such criteria subsequent to the list described
in subparagraph (A)(ii).
(e) Other Regulatory Matters.--
(1) Prohibition.--No Federal or State agency or
instrumentality shall adopt regulations or ratemaking
procedures that would have the effect of eliminating or
reducing any deduction or portion thereof allowed under
section 191 of the Internal Revenue Code of 1986 (as added by
this section) or otherwise subverting the purpose of this
section.
(2) Treasury regulatory authority.--It is the intent of
Congress in providing the election to deduct qualified
broadband expenditures under section 191 of the Internal
Revenue Code of 1986 (as added by this section) to provide
incentives for the purchase, installation, and connection of
equipment and facilities offering expanded broadband access
to the Internet for users in certain low income and rural
areas of the United States, as well as to residential users
nationwide, in a manner that maintains competitive neutrality
among the various classes of providers of broadband services.
Accordingly, the Secretary of the Treasury shall prescribe
such regulations as may be necessary or appropriate to carry
out the purposes of section 191 of such Code, including--
(A) regulations to determine how and when a taxpayer that
incurs qualified broadband expenditures satisfies the
requirements of section 191 of such Code to provide broadband
services, and
(B) regulations describing the information, records, and
data taxpayers are required to provide the Secretary to
substantiate compliance with the requirements of section 191
of such Code.
(f) Effective Date.--The amendments made by this section
shall apply to expenditures incurred after the date of the
enactment of this Act.
______

By Ms. MIKULSKI (for herself, Ms. Stabenow, Mr. Bingaman, Mrs.
Murray, Mr. Corzine, Mr. Johnson, and Mr. Inouye):
S. 1148. A bill to amend title XVIII of the Social Security Act to
permit direct payment under the medicare program for clinical social
worker services provided to residents of skilled nursing facilities; to
the Committee on Finance.
Ms. MIKULSKI. Mr. President, in honor of Older Americans' Mental
Health Week, I rise today to introduce the Clinical Social Work
Medicare Equity Act of 2005. I am proud to sponsor this legislation
that will ensure that clinical social workers can receive Medicare
reimbursements for the mental health services they provide in skilled
nursing facilities. Under the current system, social workers may not be
paid for services they provide. Psychologists and psychiatrists, who
provide similar counseling, are able to separately bill Medicare for
their services. Congressmen Stark and Leach are introducing a companion
bill today in the House of Representatives.
Since my first days in Congress, I have been fighting to protect and
strengthen the safety of our Nation's seniors. Making sure that seniors
have access to quality, affordable mental health care is an important
part of this fight. I know that millions of seniors do not have access
to, or are not receiving, the mental health services they urgently
need. Nearly 6 million seniors are affected by depression, but only
one-tenth ever gets treated. According to the American Psychiatric
Association, up to 25 percent of the elderly population in the United
States suffers from significant symptoms of mental illness and among
nursing home residents the prevalence is as high as 80 percent. These
mental disorders, which include severe depression and debilitating
anxiety, interfere with the person's ability to carryout activities of
daily living and adversely affect their quality of life. Furthermore,
older people have a 20 percent suicide rate, the highest of any age
group. Every year nearly 6,000 older Americans kill themselves. This is
unacceptable and must be addressed.
As a former social worker, I understand the role that social workers
play in the overall care of patients and seniors. This bill protects
patients across the country and ensures that seniors living in
underserved urban and rural areas, where clinical social workers are
often the only available option for mental health care, continue to
receive the treatment they need. Clinical social workers, much like
psychologists and psychiatrists, treat and diagnose mental illnesses.
In fact, clinical social workers are the primary mental health
providers for nursing home residents and also seniors residing in rural
environments. But unlike other mental health providers, clinical social
workers cannot bill directly for the important services they provide to
their patients. Protecting seniors' access to clinical social workers
can help make sure that our most vulnerable citizens get the quality,
affordable mental health care they need and deserve. This bill will
correct this inequity and make sure clinical social workers get the
payments and respect they deserve.
Before the Balanced Budget Act of 1997, clinical social workers
billed Medicare Part B directly for mental health services provided in
nursing facilities to each patient they served. Under the Prospective
Payment System, services provided by clinical social workers are
lumped, or ``bundled,'' along with the services of other health care
providers for the purposes of billing and payments. Psychologists and
psychiatrists, who provide similar counseling, were exempted from this
system and continue to bill Medicare directly. This bill would exempt
clinical social workers, like their mental health colleagues, from the
prospective payment system, and would make sure that clinical social
workers are paid for the services they provide to patients in skilled
nursing facilities. The Medicare, Medicaid, and SCHIP Benefits
Improvement and Protection Act addressed some of these concerns, but
this legislation would remove the final barrier to ensuring that
clinical social workers are treated fairly and equitably for the care
they provide.
This bill is about more than paperwork and payment procedures. This
billis about equal access to Medicare payments for the equal and
important work done by clinical social workers. It is about making sure
our Nation's most vulnerable citizens have access to quality,
affordable mental health care. The overarching goal we should be
striving to achieve for our seniors is an overall improved quality of
life. Without clinical social workers, many nursing home residents may
never get the counseling they need when faced with a life threatening
illness or the loss of a loved one. I think we can do better by our
Nation's seniors, and I'm fighting to make sure we do.
The Clinical Social Work Medicare Equity Act of 2005 is strongly
supported by the National Association of Social Workers and the
Association for Geriatric Psychiatry. I also want to thank Senators
Stabenow, Bingaman, Murray, Corzine, Johnson, and Inouye for their
cosponsorship of this bill. I look forward to working with my
colleagues to enact this important legislation.
Mr. President, I ask unanimous consent that the text of the bill and
letters of support be printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:

National Association of Social Workers--Political Action
for Candidate Election,
Washington, DC, May 25, 2005.
Senator Barbara Mikulski,
Hart Senate Office Building,
Washington, DC.
Dear Senator Mikulski: I am writing on behalf of the
National Association of Social Workers (NASW), the largest
professional social work organization with over 153,000
members nationwide. NASW promotes, develops, and protects the
affective practice of social work and social workers. NASW
also seeks to enhance the well being of individuals,
families, and communities through its work, service, and
advocacy.
NASW strongly supports the Clinical Social Work Medicare
Equity Act of 2005, which will end the unfair treatment of
clinical social workers under the Medicare Part B Prospective
Payment System (PPS) for Skilled Nursing Facilities (SNFs).
Section 4432 of the Balanced Budget Act of 1997 authorized
the creation of the PPS, under which the cost of a variety of
daily services provided to SNF patients is bundled into a
single amount. Prior to PPS, a separate Medicare Part B claim
was filed by the

[[Page S6043]]

provider for each individual service rendered to a patient.
Congress made this change in an attempt to capitate the
rapidly rising costs of additional patient services delivered
by Medicare providers to SNF patients, with the precise
target being physical, occupational, and speech-language
therapy services. However, Congress recognized that some
services, such as mental health and anesthesia, are best
provided on an individual basis rather than as part of the
bundle of services. Thus, the following types of providers
are specifically excluded from the PPS: physicians, clinical
psychologists, certified nurse-midwives, and certified
registered nurse anesthetists. Unfortunately, due to an
unintentional oversight during the drafting process, clinical
social workers were not listed among the aforementioned
providers in the legislation.
In 1996, Department of Health and Human Services Inspector
General June Gibbs Brown published a report entitled ``Mental
Health Services in Nursing Facilities''. The purpose of the
report was to describe the types of mental health services
provided in nursing facilities and identify potential
vulnerabilities in the mental health services covered by
Medicare. One critical finding of the report was 70% of
nursing home respondents stated that permitting clinical
social workers and clinical psychologists to bill
independently had a beneficial effect on the provision of
mental health services in nursing facilities. The Clinical
Social Work Medicare Equity will maintain this beneficial
effect on SNF patients by ensuring the continuation of direct
Medicare billing by clinical social workers for mental health
services rendered to SNF patients.
Your efforts on behalf of mental health patients and
professional social workers nationwide are greatly
appreciated by our members. We thank you for your strong
interest in and commitment to this important issue as
demonstrated by your sponsorship of the Clinical Social Work
Medicare Equity Act. NASW looks forward to working with you
on this and future issues of mutual concern.
Sincerely,
David Dempsey,
Manager, Government Relations and PACE.
____

American Association for

Geriatric Psychiatry,

Bethesda, MD, May 25, 2005.
Hon. Barbara Mikulski,
U.S. Senate,
Washington, DC.
Dear Senator Mikulski: On behalf of the American
Association for Geriatric Psychiatry (AAGP), I am writing to
endorse the ``Clinical Social Work Medicare Equity Act of
2005.''
AAGP is a professional membership organization dedicated to
promoting the mental health and well-being of older people
and improving the care of those with late-life mental
disorders. AAGP's membership consists of 2,000 geriatric
psychiatrists, as well as other health professionals who
focus on the mental health problems faced by senior citizens.
This legislation would permit direct payment under the
Medicare program for clinical social worker services provided
to residents of skilled nursing facilities. The numbers of
mental health professionals available to treat older adults,
including residents of nursing homes, are already inadequate,
and as the baby boom generation ages, the needs will only
increase. Clinical social workers constitute a crucial
component of the team of mental health professionals who are
able to deliver this care, and assuring that they are able to
bill for their services in the same way as psychiatrists and
psychologists is not only fair but also necessary if nursing
home residents are to have access to the mental health care
they need.
AAGP commends you for your introduction of this important
legislation, and we look forward to working with you towards
its enactment.
Sincerely,
Christine M. de Vries,
Executive Director.

S. 1148

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 ``Clinical Social Work
Medicare Equity Act of 2005''.

SEC. 2. PERMITTING DIRECT PAYMENT UNDER THE MEDICARE PROGRAM
FOR CLINICAL SOCIAL WORKER SERVICES PROVIDED TO
RESIDENTS OF SKILLED NURSING FACILITIES.

(a) In General.--Section 1888(e)(2)(A)(ii) of the Social
Security Act (42 U.S.C. 1395yy(e)(2)(A)(ii)) is amended by
inserting ``clinical social worker services,'' after
``qualified psychologist services,''.
(b) Conforming Amendment.--Section 1861(hh)(2) of the
Social Security Act (42 U.S.C. 1395x(hh)(2)) is amended by
striking ``and other than services furnished to an inpatient
of a skilled nursing facility which the facility is required
to provide as a requirement for participation''.
(c) Effective Date.--The amendments made by this section
shall apply to items and services furnished on or after the
date that regulations relating to payment for physicians'
services for calendar year 2005 take effect, but in no case
later than the first day of the third month beginning after
the date of the enactment of this Act.
______

By Mr. ISAKSON (for himself and Mr. Kennedy):
S. 1149. A bill to amend the Federal Employees' Compensation Act to
cover services provided to injured Federal workers by physician
assistants and nurse practitioners, and for other purposes; to the
Committee on Homeland Security and Governmental Affairs.
Mr. ISAKSON. Mr. President, I am pleased to rise and join Senator
Kennedy in introducing the Improving Access to Workers' Compensation
for Injured Federal Workers Act.
One of Congress's biggest challenges year in and year out is
providing access to affordable quality healthcare for the American
people. Today, I am pleased to announce that Senator Kennedy and I have
found an opportunity to provide injured Federal workers with a better
system of reimbursable healthcare for their workers compensation
claims.
Physicians assistants and nurse practitioners are vital contributors
to our healthcare system. Together, they provide economical quality
medical care to the American people. Unfortunately, however, they are
currently not recognized in the current FECA statute. When Federal
workers' compensation claims are signed by NPs or PAs, the Federal
Government denies these claims. With the introduction of this bill,
Senator Kennedy and I want to correct this hurdle to economical medical
care.
The need for this straightforward legislation is clear. In some rural
area health clinics, NPs and PAs are the only full-time providers of
medical care. Likewise, NPs and PAs may be the only healthcare
professionals on-site after hours at local clinics.
These professions are regulated by all States and are covered
providers within Medicare, Tri-Care, and nearly all private insurance
plans. Indeed, many Federal workers already regularly receive medical
care from NPs and PAs through their Federal Employee Health Benefits
Plan. NPs and PAs are also employed by the Federal Government,
including the Department of Veterans Affairs, Department of State,
Department of Defense, and the Public and Indian Health Services. In
fact, most State workers' compensation programs cover NPs and PAs as
reimbursable providers.
Again, I thank Senator Kennedy for his cooperation in ensuring cost-
effective quality medical care is available to injured Federal workers.
Mr. KENNEDY. Mr. President, today, with my distinguished colleague
Senator Isakson, I am pleased to introduce the Improving Access to
Workers' Compensation for Injured Federal Workers Act.
Our federal employees serve the American public. Day in and day out,
they keep our homeland secure, protect our environment, and oversee and
care for those in need. They ensure the safety of our food and our
medicines, deliver our daily mail, and undertake countless other duties
that, while they sometimes go unnoticed, should never be taken for
granted.
More than two-and-a-half million of these workers are covered by the
Federal Employees' Compensation Act (FECA). In addition to compensating
workers for lost wages, FECA provides medical treatment to Federal
workers injured on the job, to help them return to health and to work
quickly.
FECA is an effective and fair compensation system. This bill will
make it even better by expanding it to cover services provided by nurse
practitioners and physician assistants. This will protect many workers
who are now without access to needed care when a job-related injury
strikes.
Nurse practitioners and physicians' assistants play growing role in
medical care, with more than 100,000 nurse practitioners and 46,000
physicians' assistants across the country. They provide crucial
services--diagnosing and treating illnesses, ordering and interpreting
diagnostic and laboratory tests and educating and counseling patients
and families. In many States they can also prescribe medications.
Nurse practitioners and physicians' assistants provide these top
quality services in a cost-effective way. The Department of Health and
Human Services reports that an office visit to see a nurse practitioner
costs 10 percent to 40 percent less than comparable services from a
physician, and the Bureau of Labor Statistics calls physicians'
assistants ``cost-effective and

[[Page S6044]]

productive members of the healthcare team.''
While their impact is felt throughout our nation, these care
providers play a particularly important role in rural and low-income
urban areas, which are often underserved by doctors. In fact, in some
rural areas, an injured Federal worker may be required to travel more
than one-hundred miles to see a physician and receive care that is
covered under FECA. This bill would expand Federal workers' service
options to include physicians' assistants or nurse practitioners who
are more likely to be located nearby.
I urge my colleagues to join me in supporting this bill and
recognizing the invaluable work done by our Federal employees and the
high-quality cost-effective care provided by nurse practitioners and
physicians' assistants.
______

By Mrs. CLINTON:
S. 1150. A bill to increase the security of radiation sources, and
for other purposes; to the Committee on Environment and Public Works.
Mrs. CLINTON. Mr. President, I rise to discuss the Dirty Bomb
Prevention Act of 2005, which I am introducing today in the Senate, and
Congressman Markey is introducing in the House.
Since September 11, we have increased our focus on dirty bombs, and
rightly so.
Most Americans are not aware of how common this radioactive material
is in our country. Often we think of warheads or rods used in nuclear
reactors. However, we use less radioactive materials in positive ways
in our hospitals, research laboratories, food irradiation plants, oil
drilling facilities, airport runway lighting, and even in smoke
detectors.
And although these materials have beneficial uses, the fact is that
some of them, in the hands of a terrorist, could be used to make a
dirty bomb that could be used to contaminate a wide area in New York
City or in many other places across the country.
According to the Federation of American Scientists, ``material that
could easily be lost or stolen from U.S. research institutions and
commercial sites could contaminate tens of city blocks at a level that
would require prompt evacuation . . . Areas as large as tens of square
miles could be contaminated at levels that exceed recommended civilian
exposure limits. ``
Even if such contamination caused by a dirty bomb did not pose severe
health threats, efforts to determine the extent of contamination and
clean it up would be both expensive and disruptive.
And we know that radiation sources are numerous in the United States.
The Nuclear Regulatory Commission (NRC) reports that about 157,000
general and specific licenses have been issued authorizing the use of
radioactive materials for industrial, medical, and other uses. About
1.8 million devices containing radioactive sources have been
distributed under these licenses.
And we know that some of these sources get lost or stolen. A 2003 GAO
report found that since 1998, there have been more than 1,300 incidents
where radiation sources were lost, stolen or abandoned.
While not all of these sources and incidents present potential dirty
bomb threats, it's clear that we need to do a better job.
This legislation fills in remaining gaps to enable the U.S. to more
effectively control radiation sources.
First, the bill would give the Nuclear Regulatory Commission the
authority and the mandate to control Radium-226 and other naturally
occurring radioactive materials that for historical reasons have
remained outside of federal control.
Radium-226 is of particular concern, as it is on the list of
radiation sources that the United States has agreed to control as part
of adhering to the International Atomic Energy Agency Code of Conduct
on the Safety and Security of Radioactive Sources.
Radium-226 was used in medicine, starting early in the 20th century.
Its use increased until the 1950s, when there were more than 5,000
radium users in the U.S. Since then, its use declined, and we don't
have a good handle on what is left out there. Because it is naturally
occurring, it has stayed out federal regulatory net. So we need to give
the NRC the authority to go out and get control of it.
Second, the bill requires the NRC to develop within 6 months of
enactment a ``cradle-to-grave'' tracking system to ensure that we know
where radiation sources of concern are at all times. That's just common
sense, and if FedEx can do it, I think we ought to be able to do it for
materials that could be used in a dirty bomb.
Third, the bill requires the establishment of import and export
controls for radiation sources. This is obvious--we need to know what's
coming and going as part of our efforts to control these materials.
These 3 provisions are fundamental steps that we know we need to take
today to reduce the risk that radioactive materials will fall into the
wrong hands.
But the bill also looks forward in several ways.
First, the bill requires an inter-agency task force on radiation
source protection to make periodic recommendations to Congress and the
NRC about the safety and security of radiation sources. That way we
will know how we're doing, and what we need to do in the future.
Second, the bill requires a National Academy of Sciences study of
whether some current industrial uses of radiation sources could be
replaced with non-radioactive or less dangerous radioactive materials.
As I stated early on, there are many beneficial and necessary uses of
radioactive materials, such as in medicine.
But there are some cases where use of radioactive materials can be
replaced with newer technologies. Just to give one example, some steel
mills have been replacing nuclear process gauges with other
technologies.
By exploring other opportunities to reduce the use of radioactive
materials where possible and appropriate, we can shrink the pool of
radioactive materials that are available to make a dirty bomb in the
future.
So I hope we can take action on this legislation soon. Here in the
Senate I will be working with my colleagues to see whether we can
include this legislation in a nuclear plant security bill that the
committee will be marking up in June.
I ask unanimous consent that the text of bill be printed in the
Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 1150

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 ``Dirty Bomb Prevention Act''.

SEC. 2. RADIATION SOURCE PROTECTION.

(a) Amendment.--Chapter 14 of the Atomic Energy Act of 1954
(42 U.S.C. 2201 et seq.) is amended by adding at the end the
following new section:

``SEC. 170C. RADIATION SOURCE
PROTECTION. --

``a. Nuclear Regulatory Commission Approval.--Not later
than 180 days after the date of enactment of this section,
the Nuclear Regulatory Commission shall issue regulations
prohibiting a person from--
``(1) exporting a radiation source unless the Nuclear
Regulatory Commission has specifically found, with respect to
that export, that--
``(A) the appropriate regulatory agency in the recipient
country--
``(i) has been informed of the proposed export; and
``(ii) has determined that the proposed export will be made
in accordance with the recipient nation's laws and
regulations;
``(B) the recipient nation has the appropriate technical
and administrative capability, resources, and regulatory
structure to ensure that the radiation source will be managed
in a safe and secure manner; and
``(C) the person exporting the radiation source has made
arrangements to retake possession of it when the recipient is
no longer using it;
``(2) importing a radiation source unless the Nuclear
Regulatory Commission has specifically found, with respect to
that import, that--
``(A) the proposed recipient is authorized under law to
receive the shipment; and
``(B) the shipment will be made in accordance with all
applicable Federal and State laws and regulations; and
``(3) selling or otherwise transferring ownership of a
radiation source unless the Nuclear Regulatory Commission has
specifically found, with respect to that sale or transfer,
that--
``(A) the proposed recipient is authorized under law to
receive the radiation source; and
``(B) the transfer will be made in accordance with all
applicable Federal and State laws and regulations.
``b. Tracking System.--Not later than 180 days after the
date of enactment of this section, the Nuclear Regulatory
Commission

[[Page S6045]]

shall issue regulations establishing a mandatory tracking
system for all radiation sources in the United States. Such
system shall--
``(1) enable the identification of each radiation source by
serial number or other unique identifier;
``(2) require reporting within 24 hours of any change of
geographic location or ownership of a radiation source,
including any change of geographic location that occurs while
the radiation source is being transported;
``(3) require reporting within 24 hours of any loss of
control of or accountability for a radiation source; and
``(4) provide for reporting through a secure Internet
connection.
``c. Penalty.--Each violation of regulations issued under
subsection a. or b. shall be punishable by a civil penalty of
up to $1,000,000.
``d. National Academy of Sciences Study.--Not later than 60
days after the date of enactment of this section, the Nuclear
Regulatory Commission shall enter into an arrangement with
the National Academy of Sciences for a study of industrial,
research, and commercial uses for radiation sources. The
study shall review the current uses for radiation sources,
identifying industrial or other processes that utilize
radiation sources that could be replaced with economically
and technically equivalent (or improved) processes that do
not require the use of radiation sources, or that can be used
with radiation sources that would pose a lesser risk to
public health and safety in the event of an accident or
attack involving the radiation source. The Nuclear Regulatory
Commission shall transmit the results of the study to
Congress not later than 24 months after the date of enactment
of this section.
``e. Commission Actions.--Not later than 60 days after
receipt by Congress and the President of a report required
under subsection f.(3)(B), the Nuclear Regulatory Commission,
in accordance with the recommendations of the task force,
shall take any appropriate actions, including commencing
revision of its system for licensing radiation sources, and
shall take necessary steps to ensure that States that have
entered into an agreement under section 274 b. establish
compatible programs in a timely manner.
``f. Task Force on Radiation Source Protection and
Security.--
``(1) Establishment.--There is hereby established a task
force on radiation source protection and security.
``(2) Membership.--The task force shall be headed by the
Chairman of the Nuclear Regulatory Commission or the
Chairman's designee. Its members shall be the following:
``(A) The Secretary of Homeland Security or the Secretary's
designee.
``(B) The Secretary of Defense or the Secretary's designee.
``(C) The Secretary of Energy or the Secretary's designee.
``(D) The Secretary of Transportation or the Secretary's
designee.
``(E) The Attorney General or the Attorney General's
designee.
``(F) The Secretary of State or the Secretary's designee.
``(G) The Director of National Intelligence or the
Director's designee.
``(H) The Director of the Central Intelligence Agency or
the Director's designee.
``(I) The Director of the Federal Emergency Management
Agency or the Director's designee.
``(J) The Director of the Federal Bureau of Investigation
or the Director's designee.
``(3) Duties.--
``(A) In general.--The task force, in consultation with
other State, Federal, and local agencies and appropriate
members of the public, after public notice and an opportunity
for public comment, shall evaluate and provide
recommendations to ensure the security of radiation sources
from potential terrorist threats, including acts of sabotage,
theft, or use of such radiation sources in a radiological
dispersal device.
``(B) Recommendations to congress and the president.--Not
later than 1 year after the date of enactment of this
section, and not less than once every 3 years thereafter, the
task force shall submit a report to Congress and to the
President, in unclassified form with a classified annex if
necessary, providing recommendations, including
recommendations for appropriate regulatory and legislative
changes, for--
``(i) a list of additional radiation sources that should be
required to be secured under this Act, based on their
potential attractiveness to terrorists and the extent of the
threat to public health and safety, taking into account
radiation source radioactivity levels, dispersability,
chemical and material form, and, for radiopharmaceuticals,
the availability of these substances to physicians and
patients whose medical treatments relies on them, and other
factors as appropriate;
``(ii) the establishment of or modifications to a national
system for recovery of radiation sources that have been lost
or stolen;
``(iii) the storage of radiation sources not currently in
use in a safe and secure manner;
``(iv) modification to the national tracking system for
radiation sources;
``(v) the establishment of or modifications to a national
system to impose fees to be collected from users of radiation
sources, to be refunded when the radiation sources are
properly disposed of, or any other method to ensure the
proper disposal of radiation sources;
``(vi) any modifications to export controls on radiation
sources necessary to ensure that foreign recipients of
radiation sources are able and willing to control United
States-origin radiation sources in the same manner as United
States recipients;
``(vii) whether alternative technologies are available that
can perform some or all of the functions currently performed
by devices or processes that employ radiation sources, and if
so, the establishment of appropriate regulations and
incentives for the replacement of such devices or processes
with alternative technologies in order to reduce the number
of radiation sources in the United States, or with radiation
sources that would pose a lesser risk to public health and
safety in the event of an accident or attack involving the
radiation source; and
``(viii) the creation of or modifications to procedures for
improving the security of radiation sources in use,
transportation, and storage, which may include periodic
Nuclear Regulatory Commission audits or inspections to ensure
that radiation sources are properly secured and can be fully
accounted for, Nuclear Regulatory Commission evaluation of
security measures, increased fines for violations of Nuclear
Regulatory Commission regulations relating to security and
safety measures applicable to licensees who possess radiation
sources, criminal and security background checks for certain
individuals with access to radiation sources (including
individuals involved with transporting radiation sources),
assurances of the physical security of facilities that
contain radiation sources (including facilities used to
temporarily store radiation sources being transported),
requirements and a mechanism for effective and timely
exchanges of information regarding the results of such
criminal and security background checks between the Nuclear
Regulatory Commission and States with which the Commission
has entered into an agreement under section 274 b., and the
screening of shipments to facilities particularly at risk for
sabotage of radiation sources to ensure that they do not
contain explosives.
``g. Definition.--For purposes of this section, the term
`radiation source' means any sealed or unsealed source whose
activity levels are within Category 1, Category 2, or
Category 3 as defined under the Code of Conduct on the Safety
and Security of Radioactive Sources, approved by the Board of
Governors of the International Atomic Energy Agency on
September 8, 2003.''.
(b) Table of Sections Amendment.--The table of sections of
the Atomic Energy Act of 1954 is amended by adding at the end
of the items relating to chapter 14 the following new items:

``Sec. 170B. Uranium supply
``Sec. 170C. Radiation source protection''.

SEC. 3. TREATMENT OF ACCELERATOR-PRODUCED AND OTHER
RADIOACTIVE MATERIAL AS BY-PRODUCT MATERIAL.

(a) Definition of Byproduct Material.--Section 11 e. of the
Atomic Energy Act of 1954 (42 U.S.C. 2014(e)) is amended--
(1) by striking ``means (1) any radioactive'' and inserting
``means--
``(1) any radioactive'';
(2) by striking ``material, and (2) the tailings'' and
inserting ``material;
``(2) the tailings''; and
(3) by striking ``content.'' and inserting ``content;
``(3)(A) any discrete source of radium that is produced,
extracted, or converted after extraction, before, on, or
after the date of enactment of this paragraph for use in
commercial, medical, or research activity; or
``(B) any material that--
``(i) has been made radioactive by use of a particle
accelerator; and
``(ii) is produced, extracted, or converted after
extraction, before, on, or after the date of enactment of
this paragraph for use in commercial, medical, or research
activity; and
``(4) any discrete source of naturally occurring
radioactive material, other than source material, that--
``(A) has been removed from the natural environment and has
been concentrated to levels greater than that found in the
natural environment due to human activities; and
``(B) before, on, or after the date of enactment of this
paragraph, is extracted or converted after extraction for use
in commercial, medical, or research activity.''.
(b) Agreements.--Section 274 b. of the Atomic Energy Act of
1954 (42 U.S.C. 2021(b)) is amended--
(1) by amending paragraph (1) to read as follows:
``(1) byproduct materials (as defined in section 11 e.);'';
(2) by striking paragraph (2); and
(3) by redesignating paragraphs (3) and (4) as paragraphs
(2) and (3), respectively.
(c) Regulations.--
(1) In general.--Not later than 1 year after the date of
enactment of this Act, the Nuclear Regulatory Commission,
after consultation with States and other stakeholders, shall
promulgate final regulations as the Commission considers
necessary to implement this Act and the amendments made by
this Act. Such regulations shall include a definition of the
term ``discrete'' for purposes of paragraphs (3) and (4) of
section 11 e. of the Atomic Energy Act of 1954 (as added by
subsection (a)) that is designed to ensure that byproduct
material is controlled in a manner consistent with other
materials that pose the same threat to public health and
safety and the common defense and security.

[[Page S6046]]

(2) Cooperation.--The Commission shall cooperate with the
States in formulating the regulations under paragraph (1),
and to the extent practicable shall use existing State
consensus standards.
(3) Transition.--To ensure an orderly transition of
regulatory authority with respect to byproduct material as
defined in paragraphs (3) and (4) of section 11 e. of the
Atomic Energy Act of 1954 (as added by subsection (a)), the
regulations promulgated under paragraph (1) shall include a
transition plan, developed in coordination with States, for--
(A) States that have not, before such plan is issued,
entered into an agreement with the Commission under section
274 b. of the Atomic Energy Act of 1954 (42 U.S.C. 2021(b));
and
(B) States that have entered into such an agreement with
the Commission, including, in the case of a State that has
entered into such an agreement and has certified that it has
an existing State program for licensing of the byproduct
material defined in paragraphs (3) and (4) of section 11 e.
of the Atomic Energy Act of 1954 (as added by subsection (a))
that is adequate to protect public health and safety,
provision for assumption by the State of regulatory
responsibility for such byproduct material through an
administrative process that--
(i) provides interim provisional recognition of an existing
State program for licensing the byproduct material until
adoption of an amended agreement under section 274 b.; and
(ii) requires that the byproduct material is included in
the periodic reviews of the State programs for adequacy and
compatibility required under section 274 j.(1).
(4) Availability of radiopharmaceuticals.--In its
promulgation of final rules under paragraph (1), the
Commission shall consider the impact on the availability of
radiopharmaceuticals to the physicians and patients whose
medical treatment relies on them.
(d) Waste Disposal.--
(1) In general.--Section 81 of the Atomic Energy Act of
1954 (42 U.S.C. 2111) is amended by adding at the end the
following: ``Byproduct material may only be transferred to
and disposed of in a disposal facility licensed by the
Commission, if the disposal facility meets the licensing
requirements of the Commission and is adequate to protect
public health and safety, or a disposal facility licensed by
a State that has entered into an agreement with the
Commission under section 274 b., if the disposal facility
meets requirements of the State that are compatible with the
licensing requirements of the Commission and is adequate to
protect public health and safety.''.
(2) Byproduct material not considered low-level radioactive
waste.--Section 2(9) of the Low-Level Radioactive Waste
Policy Act (42 U.S.C. 2021b(9)) is amended by adding after
subparagraph (B) the following:
``Such term shall not include byproduct material as defined
in paragraphs (3) and (4) of section 11 e. of the Atomic
Energy Act of 1954.''.
(e) Effective Date.--Subsections (a), (b), and (d) shall
take effect 1 year after the date of enactment of this Act.

SEC. 4. RADIATION SOURCES CONTROLLED BY DEPARTMENT OF ENERGY.

(a) Nuclear Fuel.--
(1) Report.--Not later than 6 months after the date of
enactment of this Act, the Secretary of Energy shall transmit
to Congress a report accounting for the location and status
of all nuclear fuel that has been exported by the Federal
Government.
(2) Reacquisition.--
(A) In general.--The Secretary of Energy shall, to the
maximum extent practicable, reacquire nuclear fuel described
in paragraph (1) for disposal, giving highest priority to
nuclear fuel that is--
(i) in a location that is not secure; or
(ii) in a country that does not have sufficient resources
to either properly dispose of the nuclear fuel or return the
nuclear fuel to the United States for disposal.
(B) Authorization of appropriations.--There are authorized
to be appropriated to the Secretary of Energy $50,000,000 for
each of the fiscal years 2006 through 2010 for carrying out
subparagraph (A).
(b) Radiation Sources and Sealed Sources of Plutonium.--
(1) Report.--Not later than 6 months after the date of
enactment of this Act, the Secretary of Energy shall transmit
to Congress a report accounting for the location and status
of all radiation sources (as defined in section 170C(g) of
the Atomic Energy Act of 1954, as added by section 1 of this
Act) and sealed sources of plutonium weighing more than 1
gram that have been exported by the Federal Government.
(2) Reacquisition.--
(A) In general.--The Secretary of Energy shall, to the
maximum extent practicable, reacquire radiation sources and
sealed sources of plutonium described in paragraph (1) for
disposal that are--
(i) in a location that is not secure; or
(ii) in a country that does not have sufficient resources
to either properly dispose of the radiation sources and
sealed sources of plutonium or return the radiation sources
and sealed sources of plutonium to the United States for
disposal.
(B) Authorization of appropriations.--There are authorized
to be appropriated to the Secretary of Energy $30,000,000 for
each of the fiscal years 2006 through 2010 for carrying out
subparagraph (A).
______

By Mr. McCAIN (for himself and Mr. Lieberman):
S. 1151. A bill to provide for a program to accelerate the reduction
of greenhouse gas emissions in the United States by establishing a
market-driven system of greenhouse gas tradeable allowances, to limit
greenhouse gas emissions in the United States and reduce dependence
upon foreign oil, to support the deployment of new climate change-
related technologies, and ensure benefits to consumers; to the
Committee on Environment and Public Works.
Mr. McCAIN. Mr. President, I am pleased to join with Senator
Lieberman today in introducing an amended version of the Climate
Stewardship Act, which we introduced in February.
The legislation we submit today incorporates the provisions of S.
342, the Climate Stewardship Act of 2005, in its entirety, along with a
new comprehensive title regarding the development and deployment of
climate change reduction technologies. This new title, when combined
with the ``cap and trade'' provisions of the previously introduced
bill, will promote the commercialization of technologies that can
significantly reduce greenhouse gas emissions, mitigate the impacts of
climate change, and increase the Nation's energy independence. And, it
will help to keep America at the cutting edge of innovation where the
jobs and trade opportunities of the new economy are to be found.
In fact, the ``cap and trade'' provisions and the new technology
title are complementary parts of a comprehensive program that will
allow us to usher in an new energy era, an era of responsible and
innovative energy production and use that will yield enormous
environmental, economic, and diplomatic benefits. The ``cap and trade''
portion provides the economic driver for existing and new technologies
capable of supplying reliable and clean energy and making the best use
of America's available energy resources. Because of the multiple
benefits promised by this comprehensive program, we expect that the new
bill will attract additional support for the vital purposes of the
Climate Stewardship Act. We simply need the political will to match the
public's concern about climate change, the economic interests of
business and consumers, and American technological ingenuity and
expertise.
Our comprehensive bill sets forth a sound course toward a productive,
secure, and clean energy future. Its provisions are based on the
important efforts undertaken by academia, Government, and business over
the past decade to determine the best ways and means towards This
energy future. Most of these studies have shared two common findings.
First, significant reductions in greenhouse gases--well beyond the
modest goals of our bill--are feasible over the next 10 to 20 years
using technologies available today. Second, the most important
technological deployment opportunities to reduce emissions over the
next two decades lie with energy efficient technologies and renewable
energy sources, including solar, wind, and biofuels. For example, in
the electric power sector, which accounts for one-third of U.S.
emissions, major pollution reductions can be achieved by improving the
efficiency of existing fossil fuel plants, adding new reactors designs
for nuclear power, expanding use of renewable power sources, and
significantly reducing electricity demand with the use of energy-saving
technologies currently available to residential and commercial
consumers. These clean technologies need to be promoted and that is
what spurs our action today.
Before describing the details of this legislation, I think it is
important to talk about what has occurred since the Senate vote on this
issue in October 2003. For example, the scientific evidence of human-
induced climate change has grown even more abundant. But just since
February of this year, when I highlighted the results of the Arctic
Climate Impact Assessment, even more startling evidence about the
Arctic region has been revealed. In a recent Congressional briefing,
Dr. Robert Corell, chair of Arctic Climate Impact Assessment, presented
recent data indicating that climate change in the Arctic is occurring
more rapidly than previously thought. Annual average arctic
temperatures have increased at

[[Page S6047]]

twice the rate of global temperatures over the past several decades,
with some regions increasing by five to ten times the global average.
The latest observations show Alaska's 2004 June-July-August mean
temperature to be nearly 5 degrees Fahrenheit, 2.8 degrees Celsius,
above the 1971-2000 historic mean, and permafrost temperature
increasing enough to cause it to start melting. Dr. Corell said the
Greenland ice sheet is melting more rapidly than thought even 5 years
ago, and that the climate models indicate that warming over Greenland
is likely to be up to three times the global average, with warming
projected to be in the range of 5 to 11 degrees Fahrenheit, 3 to 6
degrees Celsius, which will most certainly lead to sea-level rise.
These are remarkable new scientific findings.
It isn't surprising that just this past Tuesday, indigenous leaders
from Arctic regions called on the European Union to do more to fight
global warming and to consider giving aid to their peoples, saying
their way of life is at risk. Global warming is said to be causing the
arrival in the far north of mosquitoes bearing infectious diseases. And
in Scandinavia, more frequent rains in the winter are causing sheets of
ice to develop on top of snow, causing animals to die of hunger because
they cannot reach the grass underneath.

We are not asking for sympathy, said Larisa Abrutina of the
Russian Association of Indigenous Peoples of the North. We
are asking each country in the world to examine if it is
truly doing its part to slow climate change.

The efforts taking place globally to address climate change have
gained even greater prominence. For example, British Prime Minister
Tony Blair has made climate change one of his top two issues during his
Presidency of the G8. Mr. Blair's commitment to addressing climate
change should be commended. He has chosen to take action and not to
hide behind the uncertainties that the science community will soon
resolve. The Prime Minister made it clear in a January speech at World
Economic Forum in Davos as to his intentions when he said:

. . . if America wants the rest of the world to be a part of
the agenda it has set, it must be a part of their agenda too.

The top two issues that Prime Minister Blair has chosen to deal with
are climate change and poverty in Africa. It is interesting to note
that a recent article in the New York Times highlighted the connection
between the two issues. The article highlights that a 50-year-long
drying trend is likely to continue and appears to be tightly linked to
substantial warming of the Indian Ocean. According to Dr. James
Hurrell, a scientist at the National Center for Atmospheric Research:

. . . the Indian Oceans shows very clear and dramatic warming
into the future, which means more and more drought for
southern Africa. It is consistent with what we would expect
from an increase in greenhouse gases.

It appears that Mr. Blair's two priorities are quickly becoming one
enormous challenge.
In its September 2004 issue, The National Geographic devotes 74 pages
laying out in great detail the necessity of tackling our planet's
problem of global warming. In an introductory piece, Editor-in-Chief
Bill Allen described just how important he thinks this particular
series of articles is:

Why would I publish articles that make people angry enough
to stop subscribing? That's easy. These three stories cover
subjects that are too important to ignore. From Antarctica to
Alaska to Bangladesh, a global warming trend is altering
habitats, with devastating ecological and economic effects. .
. This isn't science fiction or a Hollywood movie. We're not
going to show you waves swamping the Statue of Liberty. But
we are going to take you all over the world to show you the
hard truth as scientists see it. I can live with some
canceled memberships. I'd have a harder time looking at
myself in the mirror if I didn't bring you the biggest story
in geography today.

The articles highlight many interesting facts. Dr. Lonnie Thompson of
Ohio State University collects ice cores from glaciers around the
world, including the famed snows of Kilimanjaro, which could vanish in
15 years. According to Dr. Thompson, ``What glaciers are telling us, is
that it is now warmer than it has been in the past 2,000 years over
vast areas of the planet.'' Many of the ice cores he has in his freezer
may soon contain the only remains of the glaciers from which they came
from.
Highlighted quotes from the articles include: Things that normally
happen in geologic time are happening during the span of a human
lifetime. The future breakdown of the thermohaline circulation remains
a disturbing possibility. More than a hundred million people worldwide
live within 3 feet of mean sea level. At some point, as temperatures
continue to rise, species will have no room to run. The natural cycles
of interdependent creatures may fall out of sync. We will have a better
idea of the actual changes in 30 years. But it is going to be a very
different world.
Global warming demands urgent action on all fronts, and we have an
obligation to promote the technologies that can help us meet the
challenge. Our aim has never been simply to introduce climate
stewardship legislation. Rather our purpose is to have legislation
enacted to begin to address the urgent global warming crisis that is
upon us. This effort cannot be about political expediency. It must be
about practical realities and addressing the most pressing issue facing
not only our nation, but the world. We believe that our legislation
offers practical and effective solutions and we urge each members
careful consideration and support.

I will include for the Record a more detailed description of the
various components of the new technology title. However, I do want to
describe some of the key provisions designed to enhance innovation and
commercialization in key areas. These include zero and low greenhouse
gas emitting power generation, such as nuclear, coal gasification,
solar and other renewables, geological carbon sequestration, and
biofuels:
The bill directs the Secretary of Commerce, through the former
Technology Administration, which would be renamed the Innovation
Administration, to develop and implement new policies that foster
technological innovation to address global warming. These new
directives include: developing and implementing strategic plans to
promote technological innovation; identifying and removing barriers to
the research, development, and commercialization of key technologies;
prioritizing and maximizing key federal R&D programs to aid innovation;
(establishing public/private partnerships to meet vital innovation
goals; and promoting national infrastructure and educational
initiatives that support innovation objectives.
It also authorizes the Secretary of Energy to establish public/
private partnerships to promote the commercialization of climate change
technologies by working with industry to advance the design and
demonstration of zero and low emission technologies in the
transportation and electric generation sectors. Specifically, the
Secretary would be authorized to partner with industry to share the
cost, 50/50, of ``first-of-a-kind'' designs for advanced coal, nuclear
energy, solar and biofuels. Moreover, each time that a utility builds a
plant based on the ``first-of-a-kind engineering'' design authorized by
this bill, a ``royalty'' type payment will be paid by the utility to
reimburse the original amount provided by the Government.
After the detail design phase is complete, the Secretary would be
able to provide loans or loan guarantees, Up to 80 percent, for the
construction of these new designs including three nuclear plant designs
certified by the NRC that would produce zero greenhouse gas emissions;
three advanced coal gasification plants with carbon capture and storage
that make use of our abundant coal resources while storing carbon
emissions underground; three large scale solar energy plants to begin
to tap the enormous potential of this completely clean energy source;
and three large scale facilities to produce the clean, efficient, and
plentiful biofuel of the future--cellulosic ethanol.

The loan program will be administered by a Climate Technology
Financing Board, whose membership will include the Secretary of Energy,
a representative from the Climate Change Credit Corporation, as would
be created in the bill, and others with pertinent expertise. Once each
plant is operational, the private partner will be obligated to pay back
these loans from the government, as is the case with any construction
loan.

[[Page S6048]]

I think it is important to be very clear about this ambitious, but
necessary, technology title. We intend that much, if not all, of the
costs of the demonstration initiatives, along with the loan program,
will be financed by the early sale of emission allowances through the
Climate Change Credit Corporation under the cap and trade program, so
that industry and the market will foot much of the bill, not the
taxpayers. And, as I already mentioned, the bill requires that any
Federal money used to build plants will be repaid by the utility when
the plant becomes operational.
Finally, the bill contains a mechanism requiring utilities to pay
reimbursement ``royalties'' as they build plants based on zero and low
emission designs created with Federal assistance. These funding
provisions are more fair and certain than requiring taxpayers to cover
the entire costs of these programs and depending upon future
appropriations. But there will be some costs involved. That is why it
is important to weigh these expenditures against the staggering cost of
inaction on global warming. I think we will find more than a justified
cost-benefit outcome.
In addition to promoting new or underutilized technologies, the bill
also includes a provision to aid in the deployment of available and
efficient energy technologies. This would be accomplished through a
``reverse auction'' provision, which would establish a cost effective
and proven mechanism for Federal procurement and incentives. Providers'
``bids'' would be evaluated by the Secretary on their ability to
reduce, eliminate, or sequester greenhouse gas emissions.
The ``reverse auction'' program would be funded initially by the
taxpayers but eventually would be funded by the proceeds from the
annual auction of tradeable allowances conducted by the Climate Change
Credit Corporation under the cap and trade program.
I want to clarify that this bill doesn't propose to dictate to
industry what is economically prudent for their particular operations.
Rather, it provides a basis for the selection and implementation of
their own market-based solutions, using a flexible emissions trading
system model that has successfully reduced acid rain pollution under
the Clean Air Act at a fraction of anticipated costs--less than 10
percent of the costs that some had predicted when the legislation was
enacted. That successful model can and must be used to address this
urgent and growing global warming crisis.
The ``cap and trade'' approach to emission management is a method
endorsed by Congress and free-market proponents for over 15 years after
it was first applied to sulfur dioxide pollution. Applying the same
model to carbon dioxide and other greenhouse gases is a matter of good
policy and simple, common sense. It is an approach endorsed by industry
leaders such as Jeffrey Immelt, CEO of General Electric, one of the
largest companies in the U.S.
Moreover, using the proven market principles that underlie cap and
trade will harness American ingenuity and innovation and do more to
spur the innovation and commercialization of advanced environmental
technologies than any system of previous energy-bill style subsidies
that Congress can devise.
Three decades of assorted energy bills prove that while subsidies to
promote alternative energy technologies may sometimes help, alone they
are not transformational. In the 1970s, Americans were waiting in line
for limited supplies of high priced gasoline. We created a Department
of Energy to help us find a better way. Yet today, 30 years later, we
remain wedded to fossil fuels, economically beholden to the Middle East
and we continue to alter the makeup of the upper atmosphere with the
ever-increasing volume of greenhouse gas emissions. Our dividend is
continued energy dependence and global warming that places our nation
and the globe at enormous environmental and economic risk. Not a very
good deal.
Cap and trade is the transformational mechanism for reducing carbon
dioxide emissions, protecting the global environment, diversifying the
Nation's energy mix, advancing our economy, and spurring the
development and deployment of new and improved technologies that can do
the job. It is indispensable to the task before us.
The Climate Stewardship and Innovation Act does not prescribe the
exact formula by which allowances will be allocated under a cap and
trade system. This should be determined administratively through a
process developed with great care to achieve the principles and
purposes of the Act. This includes assuring that high emitting
utilities have ample incentives to clean up and can make emission
reductions economically and that low emitting utilities are treated
justly and recognized for their efficiency. Getting this balance right
will not be easy, but it can and must be done.
The fact remains that, if enacted, the bill's emission cap will not
go into effect for another 5 years. In the interim there is much that
the country can and should do to promote the most environmentally and
economically promising technologies. This includes removing unnecessary
barriers to commercialization of new technologies so that new plants,
products, and processes can move more efficiently from design and
development, to demonstration and, ultimately, to the marketplace.
Again, without cap and trade, these efforts will pale, but the new
technology title we propose will work hand in glove with the emission
cap and trade system to meet our objectives.
As I mentioned, the new title contains a host of measures to promote
the commercialization of zero and low-emission electric generation
technologies, including nuclear, clean coal, solar and other renewable
energies, and biofuels.
I want to take some time to address the bill's nuclear provisions.
Although these provisions are only part of the comprehensive technology
package, I am sure they will be the focus of much attention.
I know that some of our friends in the environmental community
maintain strong objections to nuclear energy, even though it supplies
nearly 20 percent of the electricity generated in the U.S. and much
higher proportions in places such as France, Belgium, Sweden and
Switzerland--countries that aren't exactly known for their
environmental disregard. But the fact is, nuclear is clean, producing
zero emissions, while the burning of fossil fuels to generate
electricity produces approximately 33 percent of the greenhouse gases
accumulating in the atmosphere, and is a major contributor to air
pollution affecting our communities
The idea that nuclear power should play no role in our energy mix is
an unsustainable position, particularly given the urgency and magnitude
of the threat posed by global warming which most regard as the greatest
environmental threat to the planet.
The International Energy Agency estimates that the world's energy
consumption is expected to rise over 65 percent within the next 15
years. If the demand for electricity is met using traditional coal-
fired power plants, not only will we fail to reduce carbon emissions as
necessary, the level of carbon in the atmosphere will skyrocket,
intensifying the greenhouse effect and the global warming it produces.
As nuclear plants are decommissioned, the percentage of U.S.
electricity produced by this zero emission technology will actually
decline. Therefore, at a minimum, we must make efforts to maintain
nuclear energy's level of contribution, so that this capacity is not
replaced with higher emitting alternatives. I, for one, believe it can
and should play an even greater role, not because I have some
inordinate love affair with splitting the atom, but for the very simple
reason that we must support sustainable, zero-emission alternatives
such as nuclear if we are serious about addressing the problem of
global warming.
I would like to submit for the record a piece written by Nicholas
Kristof of the New York Times. Mr. Kristof made the following
observation: ``It's increasingly clear that the biggest environmental
threat we face is actually global warming and that leads to a
corollary: nuclear energy is green.'' He goes on to quote James
Lovelock, a British scientist who created the Gaia principle that holds
the earth is a self-regulating organism. He quoted Mr. Lovelock as
follows:

[[Page S6049]]

I am a Green, and I entreat my friends in the movement to
drop their wrongheaded objection to nuclear energy. Every
year that we continue burning carbon makes it worse for our
descendents. Only one immediately available source does not
cause global warming, and that is nuclear energy.

I have always been and will remain a committed supporter of solar and
renewable energy. Renewables hold great promise, and, indeed, the
technology title contains equally strong incentives in their favor. But
today solar and renewables account for only about 3 percent our energy
mix. We have a long way to go, and that is one of the objectives of
this legislation--to help promote these energy technologies.
I want to stress nothing in this title alters, in any way, the
responsibilities and authorities of the Nuclear Regulatory Commission.
Safety and security will remain, as they should, paramount in the
citing, design, construction and operation of nuclear power plants. And
the winnowing effect of the free market, as it should, will still
determine which technologies succeed or fail in the market place. But
the idea that a zero-emission technology such as nuclear has little or
no place in our energy mix is just as antiquated, out-of-step and
counter-productive as our continued dependence on fossil fuels. Should
it prevail, our climate stewardship and clean air goals will be
virtually impossible to meet.
The environmental benefit of nuclear energy is exactly why during his
tenure, my friend, Morris Udall, one of the greatest environmental
champions the United States has ever known, sponsored legislation in
the House, as I did in the Senate, to develop a standardized nuclear
reactor that would maximize safety, security, and efficiency. The
Department of Energy has done much of the work called for by that
legislation. Now it is time for the logical next steps. The new title
of this legislation promotes these steps by authorizing Federal
partnership to develop first of a kind engineering for the latest
reactor designs, and then to construct three demonstration plants. Once
the demonstration has been made, free-market competition will take it
from there. And the bill provides similar partnership mechanisms for
the other clean technologies, so we are in no way favoring one
technology over another.
No doubt, some people will object to the idea of the Federal
Government playing any role in helping demonstrate and commercialize
new and beneficial nuclear designs. I have spent 20 years in this body
fighting for the responsible use of taxpayer dollars and against
porkbarrel spending and corporate welfare. I will continue to do so.
The fact remains that fossil fuels have been subsidized for many
decades at levels that can scarcely be calculated. The enormous
economic costs of damage caused by air pollution and greenhouse gas
emissions to the environment and human health are not factored into the
price of power produced by fossil-fueled technologies. Yet it is a cost
that we all bear, too often in terms of ill-health and diminished
quality of life. That is simply a matter of fact.
It is also inescapable that the ability to ``externalize'' these
costs places clean competitors at a great disadvantage. Based on that
fact, and in light of the enormous environmental and economic risk
posed by global warming, I believe that providing zero and low emission
technologies such as nuclear a boost into the market place where they
can compete, and either sink or swim, is responsible public policy, and
a matter of simple public necessity, particularly, as we enact a cap on
carbon emissions.
The Navy has operated nuclear powered submarine for more than 50
years and has an impressive safety and performance record. The Naval
Reactors program has demonstrated that nuclear power can be done
safely. One of the underpinning of its safety record is the approach
used in its reactor designs, which is to learn and build upon previous
designs. Unfortunately for the commercial nuclear industry, they have
not had the opportunity to use such an approach since the industry has
not been able to build a reactor in over the past 25 years. This lapse
in construction has led us to where we are today with the industry's
aging infrastructure. As we have learned from other industries, this in
itself represents a great risk to public safety.

I want to close my comments on the nuclear provisions with two
thoughts. A recent article in Technology Review seems particularly
pertinent to those with reservations about nuclear power. It stated:

The best way for doubters to control a new technology is to
embrace it, lest it remain in the hands of the enthusiasts.

This is particularly sage advice because, frankly, the facts make it
inescapably clear--those who are serious about the problem of global
warming are serious about finding a solution. And the rule of nuclear
energy which has no emissions has to be given due consideration.
Mr. President, don't simply take my word regarding the magnitude of
the global warming problem. Consider the National Academy of Sciences
which reported in 2001 that:

Greenhouse gases are accumulating in the Earth's atmosphere
as a result of human activities, causing surface air
temperatures and subsurface ocean temperatures to rise.
Temperatures are, in fact, rising. The changes observed over
the last several decades are likely mostly due to human
activities. . . .

Also consider the warning on NASA's website which states:

With the possible exception of another world war, a giant
asteroid, or an incurable plague, global warming may be the
single largest threat to our planet.

Consider the words of the EPA that

Rising global temperatures are expected to raise sea level,
and change precipitation and other local climate conditions.
Changing regional climate could alter forest, crop yields and
water supplies. . . .

And, let's consider the views of President Bush's Science Advisor,
Dr. John Marburger who says that,

Global warming exists, an we have to do something about it,
and what we have to do about it is reduce carbon dioxide.

Again, the chief science advisor to the President of the United
States says that global warming exists, and what we have to do about it
is to reduce carbon dioxide.
The road ahead on climate change is a difficult and challenging one.
However, with the appropriate investments in technology and the
innovation process, we can and will prevail. Innovation and technology
have helped us face many of our national challenges in the past, and
can be equally important in this latest global challenge.

Advocates of the status quo seem to suggest that we do nothing, or
next to nothing, about global warming because we don't know how bad the
problem might become, and many of the worst effects of climate change
are expected to occur in the future. This attitude reflects a selfish,
live-for-today attitude unworthy of a great nation, and thankfully, not
one practiced by preceding generations of Americans who devoted
themselves to securing a bright and prosperous tomorrow for future
generations, not just their own.
When looking back at Earth from space, the astronauts of Apollo 11
could see features such as the Great Wall of China and forest fires
dotting the globe. They were moved by how small, solitary and fragile
the earth looked from space. Our small, solitary and fragile planet is
the only one we have and the United States of America is privileged to
lead in all areas bearing on the advance of mankind. And lead again, we
must, Mr. President. It is our privilege and sacred obligation as
Americans.
I ask unanimous consent an editorial from the New York Times be
printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:

[From the New York Times, Apr. 12, 2005]

Nuclear Power Has Become a Green Source of Energy

(By Nicholas Kristof)

If only one thing used to be crystal clear to any
environmentalist, it was that nuclear energy was the
deadliest threat this planet faced. That's why Dick Gregory
pledged at a huge antinuke demonstration in 1979 that he
would eat no solid food until all U.S. nuclear plants were
shut down.
Gregory may be getting hungry.
But it's time for the rest of us to drop that hostility to
nuclear power. It's increasingly clear that the biggest
environmental threat we face is actually global warming, and
that leads to a corollary: Nuclear energy is green.
Nuclear power, in contrast to other sources, produces no
greenhouse gases. President Bush's overall environmental
policy gives me the shivers, but he's right to push ahead for
nuclear energy. There haven't been any successful orders for
new nuclear plants since 1973, but several proposals for new
plants are now moving ahead--and that's good for the world we
live in.

[[Page S6050]]

Global energy demand will rise 60 percent during the next
25 years, according to the International Energy Agency, and
nuclear power is the cleanest and best bet to fill that gap.
Solar power is a disappointment, still accounting for only
about one-fifth of 1 percent of the nation's electricity and
costing about five times as much as other sources. Wind is
promising because its costs have fallen 80 percent, but it
suffers from one big problem: Wind doesn't blow all the time.
It's difficult to rely on a source that comes and goes.
In contrast, nuclear energy already makes up 20 percent of
America's power, not to mention 75 percent of France's. A
sensible energy plan must encourage conservation--far more
than Bush's plans do--and promote things like hybrid vehicles
and hydrogen fuel cells. But for now, nuclear power is the
only source that doesn't contribute to global warming and
that can quickly become a mainstay of the grid.
Is it safe? No, not entirely. Three Mile Island and
Chernobyl demonstrated that, and there are also risks from
terrorists.
Then again, the world now has a half-century of experience
with nuclear power plants, 440 of them around the world, and
they have proved safer so far than the alternatives.
America's biggest power source is now coal, which kills about
25,000 people a year through soot in the air.
To put it another way, nuclear energy seems much safer than
our dependency on coal, which kills more than 60 people every
day.
Moreover, nuclear technology has become far safer through
the years. The future may belong to pebble-bed reactors, a
new design that promises to be both highly efficient and
incapable of a meltdown.
Radioactive wastes are a challenge. But burdening future
generations with nuclear wastes in deep shafts is probably
more reasonable than burdening them with a warmer world in
which Manhattan is under water.
Right now, the only significant U.S. source of electricity
that does not involve carbon emissions is hydropower. But
salmon runs have declined so much that we should be ripping
out dams, not adding more.
What killed nuclear power in the past was cold economics.
Major studies at MIT and elsewhere show that nuclear power is
still a bit more expensive than new coal or natural gas
plants, but in the same ballpark if fossil fuel prices rise.
And if a $200-per-ton tax were imposed on carbon emissions,
nuclear energy would become cheaper than coal from new
plants.
So it's time to welcome nuclear energy as green (though not
to subsidize it with direct handouts, as the nuclear industry
would like). Indeed, some environmentalists are already
climbing onboard. For example, the National Commission on
Energy Policy, a privately financed effort involving
environmentalists, academics and industry representatives,
issued a report in December that favors new nuclear plants.
One of the most eloquent advocates of nuclear energy is
James Lovelock, the British scientist who created the Gaia
hypothesis, which holds that Earth is, in effect, a self-
regulating organism.
``I am a Green, and I entreat my friends in the movement to
drop their wrongheaded objection to nuclear energy,''
Lovelock writes, adding: ``Every year that we continue
burning carbon makes it worse for our descendents. Only one
immediately available source does not cause global warming,
and that is nuclear energy.''

Mr. LIEBERMAN. Mr. President, I rise today with my friend and
colleague Senator John McCain to introduce a second version of our
Climate Stewardship Act with improvements--the Climate Stewardship AND
Innovation Act (CSIA).
In the computer age, we might call this Climate Stewardship 2.0. In
this new version we take the time-tested strengths of the Climate
Stewardship Act--like the emissions cap and trade program--and add new
features to spur innovation and lead us into a 21st Century energy
economy that prizes zero- or low-carbon emission technologies.
And we do all this with market-driven programs that will promote a
competition for efficient technologies and that don't drain the federal
budget.
Let me start with the basics.
Climate change is real and its costs to the economy will be
devastating if we don't act.
Consider this very real example: 184 Alaskan coastal villages already
need to be relocated because their land and infrastructure are being
destroyed by advancing seas and warmer temperatures that are melting
the permafrost.
It will cost more than $100 million to relocate just one of these
towns.
What would be the price if we needed to do the same for New Orleans,
Miami, or Santa Cruz, California?
SwissRe, North America's leading reinsurer, projects that climate
driven disasters could cost global financial centers more than $150
billion per year within the next ten years.
The original Climate Stewardship Act asked the American people and
businesses to reduce their carbon emissions to 2000 levels--which were
quite close to today's levels by the end of the decade.
All we are saying is ``Don't make the problem worse! Do no further
harm.''
Our proposal--then and now--will reduce carbon emissions by putting a
price on them with a cap and trade policy similar to the one used so
successfully in the Clean Air Act of 1990 which reduced acid rain.
Simply put, a business that doesn't reach its emissions target can
buy emissions credits from those under the target.
And, by the way, at the time we debated the acid rain program,
industry estimated it would cost $1,000 a ton to comply and would ruin
the economy. Today those emissions credits sell for between $100 and
$200 a ton.
America's innovators found a way to make it work for the economy and
the environment--twin challenges that can and must move together in
concert, not conflict.
Because ``cap-and-trade'' creates a price for greenhouse emissions,
it exposes the true cost of burning fossil fuels and will drive
investment toward lower-emitting technologies.
If we are going to meet the challenge of climate change, while making
sure that our economy remains strong, we need a program that gives
business and industry both a push and pull.
The push will come from requiring business and industry to cut their
greenhouse gas pollution; the pull from giving them incentives to
innovate, along with financial support for bringing the best
innovations forward.
There are many actions we can take today to meet the targets set in
our original bill, ranging from increasing the efficiency of our
operations, to boosting the use of renewable energy, for which so many
states are now admirably pushing. But to advance beyond this goal and
maintain emissions reductions in the future with a growing economy, we
will need to push both innovation and the deployment of climate
friendly technologies that already exist.
While we're on the subject of technology and investment, I want to be
sure that everybody sees that our emissions trading market itself will
unleash a multi-billion dollar flow of capital into technology and
innovation. Our opponents insist that everybody see the emissions
reduction requirements of this bill as costs. The truth is that these
so-called costs are vital investment flows necessary to bring about
innovation, invention and technological change in an era where our
climate, our economy and even our national security depend on our
ability to wean ourselves from our dependence on oil, so much of which
is imported from unstable regions in the world.
Because technological change and innovation are so important for both
climate change and energy independence, our bill creates a dedicated
public sector mechanism for ensuring that some of that investment flow
is directed at the technologies we need--including, for example,
biofuels and clean ways of burning coal, to name just two examples from
a potentially open-ended menu of climate-friendly technology choices.
The new bill we are introducing today helps assure that the most
important and efficient technological alternatives are supported. We do
not pick winners or losers. That's for the market to do. Our bill is
technology neutral, but does make sure that if there are barriers to
developing or using new technologies, the resources are available to
knock those barriers down.
This bill provides support for first-of-its-kind innovation or early-
adoption of new energy technologies with minimal cost to the federal
budget.
Instead of turning to the taxpayer, our bill uses a self-funding
mechanism by empowering the Secretary of Energy to use some of the
money generated through the purchase of emissions credits, funneled
through a new public corporation our bill creates, to help bring
innovations to market. And this is not small change. It is a
substantial multibillion dollar contribution every year.
Mr. President, this kind of public sector support has many
encouraging precedents.
From the telegraph to the Internet, it was the timely intervention of
the

[[Page S6051]]

federal government that helped bring new technologies to market.
And, if we don't help bring these new low-carbon or zero-carbon
technologies to market, we will be buying them from the nations that
do.
We only need look at the popular hybrid cars--low-emitting vehicles
that consumers have shown they want by the long waiting lists that
exist to buy them. And then remember that American manufacturers must
license this technology from Japan.
Our bill also ensures that assistance is provided to help with the
transition to new technology and energy production with programs to
reduce consumer costs, to help dislocated workers and communities, and
to substantially support the deployment of climate friendly technology
and energy production.
We also know that some regions--like my State of Connecticut--and
businesses like DuPont, BP, and Kodak have already acted pro actively
and are working to reduce emissions on their own. We commend these
actions. Even more important, our bill ensures that credit will be
given to them for their good work.
Just a few months ago, the head of the international panel on climate
change, Dr. R. Pachauri, said that ``we are already at a dangerous
point when it comes to global warming. . . . Immediate and very deep
cuts in greenhouse gases are needed if humanity is to survive.''
Let me repeat those last words, ``If humanity is to survive.''
When I quoted Dr. Pachauri on this floor in February, I reminded the
Senate that the Bush Administration lobbied heavily for Dr. Pachauri's
appointment to the IPCC leadership because it considered him a more
cautious and pragmatic scientist.
I quote him today because his warning words are so clear and strong.
Global warming is truly one of the great challenges of our age--a
challenge where the Heavens and the Earth meet.
It is a challenge of Biblical proportions--to meet God's call in
Corinthians to be ``stewards'' of His mysteries--and in Genesis to go
forth and ``replenish the earth'' to both work and guard the garden.
If we don't take these simple steps now--steps that are well within
both our technological and financial grasp--the generations to come
will rightfully look back at us with scorn and ask why we acted so
selfishly . . . why we cared only for our own short-term profits and
comforts . . . and why we left them a world environment in danger. We
must act on our vision of a better future, a future that is most
definitely within our reach.
That is what Senator McCain and I are convinced our CSIA will do.
We put forth this innovation and technology proposal to start a
conversation here in the Senate with colleagues whose support we need
to get to a majority, and to provide some ideas for how to accelerate
and build a climate friendly future. We hope that our colleagues will
join us in this conversation so we can put forth--and pass--the best
proposal possible.
______

By Ms. SNOWE (for herself, Mr. Kerry, Mr. Smith, and Ms.
Collins):
S. 1152. A bill to amend title XVIII of the Social Security Act to
eliminate discriminatory copayment rates for outpatient psychiatric
services under the Medicare Program; to the Committee on Finance.
Ms. SNOWE. Mr. President, I rise today to introduce the Medicare
Mental Health Copayment Equity Act of 2005 with my colleagues, Senator
John Kerry, Senator Gordon Smith, and Senator Susan Collins.
Briefly, our bill would correct a serious disparity in Medicare
payment policy for mental health treatment. Medicare beneficiaries
typically pay 20 percent of the cost of covered outpatient services,
including doctor's visits, as a ``copayment'' or coinsurance, and
Medicare pays the remaining 80 percent. But Medicare law imposes a
special limitation for outpatient mental health services which requires
patients to pay a much higher copayment, 50 percent. As a result,
Medicare beneficiaries pay two and a half times as much--50 percent
coinsurance--for treatment of any mental disorders.
Our bill will eliminate the disparity in payment by reducing this
discriminatory copayment over a 6-year period, starting in 2006, from
the current 50 percent to the standard 20 percent. This means that, in
2012, patients seeking outpatient treatment for mental illness will pay
the same 20 percent copayment that is required of Medicare patients
today who receive outpatient treatment for other illnesses. The goal of
our bill is ultimately to achieve ``copayment equity'' for Medicare
mental health services.
Let me give an example of the current disparity in copayments. If a
Medicare patient sees a doctor in an office for treatment of cancer,
heart disease, or the flu, the patient must pay 20 percent of the fee
for the visit. But if a Medicare patient sees a psychiatrist,
psychologist, social worker, or other professional in an office for
treatment of depression, schizophrenia, or any other type of mental
illness, the patient must pay 50 percent of the fee. What sense does
this make?
Indeed, our bill has a larger purpose, to help end an outdated
distinction--between treatment of physical and mental disorders--and to
ensure that Medicare beneficiaries have equal access to treatment for
all their health conditions. Perhaps this disparity would not matter so
much if mental disorders were less prevalent. But the Surgeon General
has told us otherwise.
A landmark report of the Surgeon General in 1999 emphasized the
importance of access to treatment for mental disorders. The Surgeon
General found that mental illness was a leading cause--second only to
cardiovascular diseases--of otherwise healthy years of life lost to
premature death or disability. The Surgeon General found that the
occurrence of mental illness among older adults is widespread, with a
substantial portion of the population aged 55 and older--almost 20
percent--experiencing specific disorders that are not a part of
``normal'' aging.
Older Americans also have the highest rate of suicide in the country,
and the risk of suicide increases with age. In fact, in the State of
Maine, the suicide rate for seniors is three times as high as the rate
for adolescents. It is not surprising, therefore, to find that
untreated depression among the elderly has substantially increased
their risk of death by suicide.
Another sad irony involves individuals with disabilities. Medicare is
often viewed as health insurance for people over age 65 but it also
provides health insurance for those with severe disabilities. The
single most frequent cause of disability for both Social Security and
Medicare benefits is mental disorders--affecting almost 1.4 million of
6 million Americans who receive Social Security disability benefits.
Yet, Medicare pays far less for the critical mental health services
needed by these beneficiaries than it does for medical treatment for
their physical disabilities.
However, the good news is that, today, there are increasingly
effective treatments for mental illness. The majority of people with
mental disorders who receive proper treatment can lead productive
lives. Congress should remove disincentives that inhibit access to
mental health services so that those seeking treatment for these
disorders do not have to face financial barriers to care. It is time to
remove stigmas and overcome the lack of understanding of mental
disorders by equalizing Medicare copayment requirements for mental
health services.
I urge my colleagues to join with me and bring Medicare payment
policy into the 21st century.
I would also like to submit letters from the American Psychiatric
Association and the Mental Health Liaison Group, 36 national
organizations supporting this legislation, and I ask unanimous consent
that these letters of support be printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:

American Psychiatric Association,

Arlington, VA, May 26, 2005.
Hon. Olympia Snowe,
U.S. Senate,
Washington, DC.
Hon. John Kerry,
U.S. Senate,
Washington, DC.
Dear Senator Snowe and Senator Kerry: Later today you will
receive a letter, initiated by the American Psychiatric
Association, from some 35 members of the Mental Health
Liaison Group (MHLG) thanking you for your leadership in
again introducing legislation to phase out Medicare's
discriminatory 50 percent coinsurance.

[[Page S6052]]

We are of course a cosigner of the MHLG letter, but I
wanted to add my own personal thanks for your tireless
efforts to end 40 years of discrimination against patients
seeking outpatient mental health services under Medicare Part
B. It should be simply unacceptable to compel such patients
to pay 50 percent of the cost of their care out of their own
pockets. The real ``winners'' under your legislation are
patients.
I also wish to specifically acknowledge the hard work and
dedication of Sue Walden, Heather Mizeur, and Aaron Jenkins
of your staffs. You are each extremely well served by their
efforts.
Sincerely,
James H. Scully, Jr.,
Medical Director.
____

Mental Health Liaison Group,

Washington, DC, May 26, 2005.
Hon. Olympia Snowe,
Russell Senate Office Building,
Washington, DC.
Hon. John Kerry,
Russell Senate Office Building,
Washington, DC.
Dear Senators Snowe and Kerry: The undersigned
organizations in the Mental Health Liaison Group,
representing patients, health professionals and family
members, are pleased to support your legislation, the
Medicare Mental Health Copayment Equity Act. Under your
legislation, Medicare's historic discriminatory 50 percent
coinsurance for outpatient mental health care would be
reduced over six years to 20 percent, bringing the
coinsurance into line with that required of Medicare
beneficiaries for other Part B services.
Simply put, current law discriminates against Medicare
beneficiaries who seek treatment for mental illness. This
affects elderly and non-elderly Medicare beneficiaries alike
when they seek mental health care. According to the 1999 U.S.
Surgeon General's report on mental health, almost 20 percent
of elderly individuals have some type of mental disorder
uncommon in typical aging. In addition, elderly individuals
have the highest rate of suicide in the U.S., often the
result of depression. The Surgeon General's report states,
``Late-life depression is particularly costly because of the
excess disability that it causes and its deleterious
interaction with physical health. Older primary care patients
with depression visit the doctor and emergency rooms more
often, use more medication, incur higher outpatient charges,
and stay longer at the hospital.''
The 50 percent coinsurance requirement also is unfair to
the non-elderly disabled Medicare population. Because many of
these individuals have severe mental illnesses combined with
low incomes and high medical expenses, a 50 percent
coinsurance obligation is a serious patient burden. For
elderly and non-elderly Medicare beneficiaries alike,
Medicare is a critical source of care. Your legislation to
ensure that Medicare beneficiaries needing mental health care
incur only the same cost-sharing obligations as required of
all other Medicare patients would end the statutory
discrimination against Medicare beneficiaries seeking
treatment for mental disorders.
Thank you for your leadership in addressing this important
issue for the nation's 40 million Medicare patients.
Sincerely,
Alliance for Children and Families; American Academy of
Child and Adolescent Psychiatry; American Association for
Geriatric Psychiatry; American Association of Children's
Residential Centers; American Association of Pastoral
Counselors; American Association of Practicing Psychiatrists;
American Group Psychotherapy Association; American Managed
Behavioral Healthcare Association; American Mental Health
Counselors Association; American Occupational Therapy
Association; American Psychiatric Association; American
Psychiatric Nurses Association.
American Psychoanalytic Association; American Psychological
Association; American Psychotherapy Association; Anxiety
Disorders Association of America; Association for the
Advancement of Psychology; Association for Ambulatory
Behavioral Healthcare; Bazelon Center for Mental Health Law;
Children and Adults with Attention-Deficit/Hyperactivity
Disorder; Clinical Social Work Federation; Clinical Social
Work Guild; Depression and Bipolar Support Alliance; Eating
Disorders Coalition for Research, Policy & Action.
Ensuring Solutions to Alcohol Problems; International
Society of Psychiatric-Mental Health Nurses; NAADAC, The
Association for Addiction Professionals; National Alliance
for the Mentally Ill; National Association for Children's
Behavioral Health; National Association for Rural Mental
Health; National Association of Anorexia Nervosa and
Associated Disorders (ANAD); National Association of Mental
Health Planning & Advisory Councils; National Association of
Protection and Advocacy Systems; National Association of
Psychiatric Health Systems; National Mental Health
Association; and Suicide Prevention Action Network USA.
______

By Ms. COLLINS (for herself and Ms. Snowe):
S. 1154. A bill to extend the Acadia National Park Advisory
Commission, to provide improved visitor services at the park, and for
other purposes; to the Committee on Energy and Natural Resources.
Ms. COLLINS. Mr. President, I rise today to introduce the Acadia
National Park Improvement Act of 2005. This legislation takes important
steps to ensure the long-term health of one of America's most beloved
national parks. It would increase the land acquisition ceiling at
Acadia by $10 million; facilitate an off-site intermodal transportation
center for the Island Explorer bus system; and extend the Acadia
National Park Advisory Commission.
In 1986, Congress enacted legislation designating the boundary of
Acadia National Park. However, many private lands were contained within
the permanent authorized boundary. Congress authorized the Park to
spend $9.1 million to acquire those lands from willing sellers only.
While all of that money has now been spent, rising land prices have
prevented the money from going as far as Congress originally intended.
There are over 100 private tracts left within the official park
boundary. Nearly 20 of these tracts are currently available from
willing sellers, but the park does not have the funds to purchase them.
My legislation would authorize an additional $10 million to help
acquire these lands. Since these lands already fall within the
congressionally authorized boundary, this effort would ``fill in the
holes'' at Acadia, rather than enlarging the park.
My legislation will also facilitate the development of an intermodal
transportation center as part of the Island Explorer bus system. The
Island Explorer has been extremely successful over its first 5 years.
These low-emission propane-powered vehicles have carried more than 1.5
million riders since 1999. In doing so, they removed 424,000 vehicles
from the park and reduced pollution by 24 tons.
Unfortunately, the system lacks a central parking and bus boarding
area. As a result, day use visitors do not have ready access to the
Island Explorer. My legislation would authorize the Secretary of the
Interior to provide assistance in the planning, construction, and
operation of an intermodal transportation center in Trenton, ME. This
center will include parking for day users, a visitor orientation
facility highlighting park and regional points of interest, a bus
boarding area, and a bus maintenance garage. This center, which will be
built in partnership with the Federal Highway Administration, U.S.
Department of Transportation, Maine Department of Transportation, and
other partners, will reduce traffic congestion, preserve park resources
and the visitor experience, and ensure a vibrant tourist economy.
Finally, my legislation would extend the 16-member Acadia National
Park Advisory Commission for an additional 20-year period. This
commission was created by Congress in 1986 and is currently due to
expire in 2006. That would be a mistake. The commission consists of
three Federal representatives, three State representatives, four
representatives from local towns on Mount Desert Island, three from
adjacent mainland communities, and three from adjacent offshore
islands. These representatives have provided invaluable advice relating
to the management and development of the Park. The commission has
proven its worth many times over and deserves to be extended for an
additional 20 years.
Acadia National Park is a true gem of the Maine coastline. The park
is one of Maine's most popular tourist destinations, with nearly 3
million visitors every year. While unsurpassed in beauty, the park's
ecosystem is also very fragile. Unless we are careful, we risk
substantial harm to the very place that Mainers and Americans hold so
dear.
In 11 years, Acadia will be 100 years old. Age has brought both
increasing popularity and greater pressures. By providing an extra $10
million to protect sensitive lands, expanding the highly successful
Island Explorer transportation system, and extending the Acadia
National Park Advisory Commission, this legislation will help make the
park stronger and healthier than ever on the occasion of its centennial
anniversary.
Ms. SNOWE. Mr. President, I rise today to offer my cosponsorship to
the Acadia National Park Improvement Act of 2005. For those of you who
have not had the good fortune to visit one of the crown jewels in the
National Park system, Acadia National Park, the first national park
established east of the

[[Page S6053]]

Mississippi, is located on the rugged coast of Maine, encompassing over
47,000 acres that follow the shoreline, go up mountains of sheer
granite, dotted with numerous lakes and ponds, diverse habitats that
create striking scenery and make the park a haven for wildlife and
plants. This past Earth Day was celebrated by one of my staff members
along with devotees of the Park on the South Ridge Trail of Cadillac
Mountain, the highest point on the U.S. Atlantic coast, on the same
ground where the Wabanaki Indians walked over 6,000 years ago. They
called the surrounding Mount Desert Island Pemetic, ``the sloping
land''.
Acadia National Park certainly covers a land of contrast and
diversity, with a variety of freshwater, estuarine, forest and
intertidal resources and is one of the most visited Parks in the
national park system, and rightfully so, as it offers magnificent views
from Cadillac Mountain that sweep down 1,530 feet to the rocky coast
and ocean below. Besides its natural beauty, the Park brings in $130
million a year into the State's economy.
It is because of the great beauty of the Park and its scenic views
that I have continued my efforts to achieve cleaner air for the area
and for the entire State. The pristine Park is, unfortunately, a good
example of how the State is affected by dirty air that blows in from
away, estimated to be around 80 percent, that is affecting both the air
we breathe and our ability to enjoy the natural beauty of the 47,000
acres of the Park.
I am a devoted fan of the Island Explorer bus system, whose clean
propane-powered vehicles offer visitors and residents free
transportation to hiking trails, the unique carriage roads, the island
beaches and for in-town shopping. It is estimated that the Island
Explorer buses took the place of an estimated 300,000 vehicles during
the last four years, and prevented the release of 24 tons of nitrogen
oxide and volatile organic compounds from car exhaust. I understand
that other national parks are considering using the positive benefits
of the Island Explorer system as a transportation model for parks all
around the country. A great deal of thanks should go to the surrounding
towns and to L.L. Bean for financing this successful system that helps
to make the air cleaner and adds to our enjoyment of the activities the
Park provides.
The legislation introduced today will help the Park in three specific
areas; one, it will help the Park by extending the Acadia National Park
Advisory Commission for 20 years giving local residents the opportunity
for input into the management of the Park; two, it will increase the
authorized ceiling for land acquisition funding by $10 million to $28
million to realize the sharp rise in real estate prices so that
properties from willing sellers within the Park's boundaries can be
included into the Park; and, three, the legislation will allow the Park
to locate an intermodal center outside of park boundaries off of Mt.
Desert Island to give even more assistance to the one road entering and
exiting the Park by alleviating auto traffic to and on the island and
to achieve cleaner air.
I will continue to take actions for additions within the Park
boundaries, for local input into the management process, for a better
public transportation system for the Island that will create a
healthier environment, and better support the Park's ecological
protections. I look forward to continue working with the people of Mt.
Desert Island, the Park's Supervisor, and the Friends of Acadia, a
devoted, independent philanthropy that has raised $15 million in
private endowments for the Park, on issues important to all of us for
the preservation of the beautiful landscape, the ocean's coastline, and
for environmental improvements in Acadia National Park, the very place
where the first light of day shines on our glorious Nation.
______

By Mr. BROWNBACK (for himself, Mr. Alexander, Mr. Allard, Mr.
Bunning, Mr. Chambliss, Mr. Coburn, Mr. Cornyn, Mr. Craig, Mr.
Crapo, Mr. DeMint, Mr. Ensign, Mr. Enzi, Mr. Graham, Mrs.
Hutchison, Mr. Inhofe, Mr. Isakson, Mr. McCain, Mr. Santorum,
Mr. Sessions, Mr. Sununu, Mr. Talent and Mr. Thune):
S. 1155. A bill to establish a commission to conduct a comprehensive
review of Federal agencies and programs and to recommend the
elimination or realignment of duplicative, wasteful, or outdated
functions, and for other purposes; to the Committee on Homeland
Security and Governmental Affairs.
Mr. BROWNBACK. Mr. President, I rise today to introduce the
Commission on the Accountability and Review of Federal Agencies, CARFA,
Act with over 20 original cosponsors.
This is an important measure that I have been developing and
advocating over the past few years. CARFA's premise is simple: Members
of Congress need a tool that will help them use taxpayer dollars more
efficiently.
Members of Congress need a tool like CARFA because the special
interest in keeping a program alive is almost always more powerful than
the general interest to realign or even end a Federal program.
A good example of this is tobacco. While there is a general interest
in discouraging smoking--and while we spend many taxpayer dollars to
this end--there is also strong special interest pressure to keep
taxpayer tobacco subsidies alive. Thus, the Federal Government both
subsidizes and discourages tobacco.
CARFA is the tool that would give members a chance to advance the
general interest. CARFA would take all Federal Government agencies and
programs--both discretionary and entitlement--and put them under the
review of a bipartisan commission. Members of the commission would be
appointed by both majority and minority leaders in both House of
Congress and by the President.
The commission would review Federal agencies and programs in order to
present draft legislation to the Congress that would realign or
eliminate duplicative, wasteful, inefficient, outdated, irrelevant, or
failed agencies and programs.
Each House of Congress would get one vote on the draft legislation--
up or down--without amendment.
CARFA would create a new approach to increase the efficiency of the
Federal Government by giving the general interest a stronger voice in
the system. For example, there might be a program that is important to
my home State of Kansas that would be cut by the proposed legislation,
but I only get one vote and there are a variety of other programs that
I really do think need to be eliminated.
Since I only have one vote, I can justify voting for the measure when
I go back home by showing to my constituents that there were a number
of other programs that needed to be realigned or cut. Thus, CARFA makes
the overall goal of balancing the Federal budget more achievable.
We need CARFA now more than ever. The Federal Government spends
$2,292,000,000 per year on discretionary and mandatory spending. That
is a lot of money. My Kansas constituents often say: ``I don't mind
paying my taxes, but make sure my hard-earned money is well spent.'' At
a time when Federal spending is at an all time high, topping $20,000
per household, we owe our constituents the accountability that would
result from CARFA.
Last year, we had a bipartisan hearing on CARFA, at which all
witnesses supported the CARFA concept. We have incorporated some of the
suggestions made at that hearing, and I believe this year's version of
CARFA is even better.
I am pleased that the Senate is already on record supporting the
CARFA concept through Section 502 of this year's budget resolution, and
it is my hope that we will be able to work with leadership to see CARFA
become a reality this year.
______

By Mr. HATCH:
S. 1156. A bill to amend the Internal Revenue Code of 1986 to extend
the credit period for electricity produced from renewable resources at
certain facilities, to extend the credit for electricity produced from
certain renewable resources, and for other purposes; to the Committee
on Finance.
Mr. HATCH. Mr. President, I rise today to introduce a bill, S. 1156,
to extend and enhance a provision in the Internal Revenue Code that
gives tax incentives for the production of electricity from renewable
resources.

[[Page S6054]]

The legislation I am introducing today is central to our Nation's
goal of achieving energy independence, which is at the heart of the
energy bill that will soon be considered by the Senate. The Committee
on Energy and Natural Resources has included in its energy bill a
renewable energy title that directs the Federal Government ``to the
extent economically feasible and technically practicable'' to implement
programs that will produce at least 7.5 percent of the electricity from
renewable sources by 2013.
The Senate Committee on Finance, on which I serve, will soon consider
an energy tax bill to complement the bill from the Energy and Natural
Resources Committee. The legislation I am introducing today is designed
to provide incentives to help us reach this level of renewable energy
production.
Specifically, my bill would amend the Internal Revenue Code to extend
the Section 45 production tax credit for electricity produced from
renewable resources for facilities placed in service before January 1,
2011, pursuant to a written binding contract in effect on December 31,
2007. This extension is designed to take into account the extended
length of time it takes for many renewable energy facilities,
particularly geothermal facilities, to be built.
In addition, my bill would provide for a 10-year credit period for
all renewable energy sources covered by this tax credit. Current law
allows a 10-year credit period for certain renewable sources, such as
wind, but only a 5-year credit period for other renewable sources, such
as geothermal. This results in an uneven playing field under current
law that tilts investors toward certain renewable energy resources over
others. This represents poor energy policy and it represents poor tax
policy.
I believe this disparity in credit periods undermines the development
of all of our renewable energy resources and thereby inhibits our goal
of energy independence. This legislation would equalize the tax credit
period for all renewable resources and even up the playing field.
I would like my colleagues to know more about the importance of our
Nation's vast supply of geothermal energy resources. Geothermal is a
clean, renewable energy resource that presently contributes over 2,718
megawatts to the U.S. energy supply. Renewable energy, excluding
hydroelectric, makes up 2 percent of U.S. energy consumption; of that 2
percent, geothermal energy accounts for .44 percent, solar .06 percent
and wind 1 percent. Geothermal technology is used in commercial,
industrial and residential application in 26 States.
However, geothermal energy generation has not been fully exploited.
According to the U.S. Department of Energy, there is almost 25,000
megawatts of undeveloped geothermal energy production potential in the
United States. This is enough power to serve more than 22 million
homes. Furthermore, this is an energy source that is not subject to the
price and supply volatility of fossil fuels. Our energy policy should
not overlook this potential or sell short its potential.
My home State of Utah has an abundance of high and low temperature
geothermal resources that this bill would allow to be economically
developed. For example, a new 36 megawatt geothermal plant near Cove
Fort, UT, is scheduled to be under construction by the spring of 2006
with completion expected by the end of 2007. Without this legislation,
it is unlikely that this plant, as well as others around the Nation,
would be able to be built. That would be very unfortunate.
The area around Cove Fort has one of the largest, proven geothermal
resources in the Nation. There are 3,000 contiguous acres of leased
land associated with the project now on the drawing boards. At 2,000
feet underground, the geothermal resource there is relatively shallow
and is considered by most geologic experts to be one of the largest
underground hot water reservoirs in North America. A leading geothermal
engineering company recently issued a report indicating that the Cove
Fort hot water resource can support and sustain power production in
excess of 100 megawatts.
Utah is but one State with geothermal resources that can help lead
our Nation toward energy independence. Other States with considerable
geothermal resources include Nevada, California, Montana, Washington,
Oregon, Idaho, Wyoming, Colorado, North Dakota, South Dakota, Nebraska,
Arizona, New Mexico, Texas, Pennsylvania, West Virginia, Louisiana,
Hawaii, and Kansas. We need to get the process of developing these
resources started, and the bill I am introducing today would make sure
that happens.
This legislation would provide the necessary boost to the development
of our geothermal energy resources as well as all other renewable
energy resources available to our Nation. I urge my colleagues to join
me by cosponsoring this bill.
There being no objection, the bill was ordered to be printed in the
Record, as follows:

S. 1156

Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,

SECTION 1. EXTENSION AND MODIFICATION OF CREDIT FOR PRODUCING
ELECTRICITY FROM RENEWABLE RESOURCES.

(a) Extension of Credit Period for Electricity Produced at
Certain Facilities.--Subparagraph (B) of section 45(b)(4) of
the Internal Revenue Code of 1986 is amended to read as
follows:
``(B) Credit period.--In the case of any facility described
in subsection (d)(3)(A)(ii) placed in service before October
22, 2004, the 5-year period beginning on October 22, 2004,
shall be substituted for the 10-year period in subsection
(a)(2)(A)(ii).''.
(b) Extension of Credit.--Subsection (d) of section 45 of
the Internal Revenue Code of 1986 (relating to qualified
facilities) is amended by striking ``January 1, 2006'' each
place it appears and inserting ``January 1, 2008''.
(c) Binding Contracts for Facilities.--Subsection (d) of
section 45 of the Internal Revenue Code of 1986 is amended by
adding at the end the following:
``For purposes of this subsection, a facility shall be
treated as placed in service before January 1, 2008, if such
facility is placed in service before January 1, 2011,
pursuant to a written binding contract in effect on December
31, 2007, and at all times thereafter before such facility is
placed in service.''.
(d) Effective Date.--
(1) In general.--Except as provided in paragraph (2), the
amendments made by this section shall apply to electricity
produced and sold after the date of the enactment of this
Act, in taxable years ending after such date.
(2) Subsection (a).--The amendment made by subsection (a)
shall apply to electricity produced and sold after December
31, 2004, in taxable years ending after such date.
______

By Mr. KENNEDY (for himself, Mr. Akaka, and Mr. Lautenberg):
S. 1158. A bill to impose a 6-month moratorium on terminations of
certain plans instituted under section 4042 of the Employee Retirement
Income Security Act of 1974 in cases in which reorganization of
contributing sponsors is sought in bankruptcy or insolvency
proceedings; to the Committee on Health, Education, Labor, and
Pensions.
Mr. KENNEDY. Mr. President, the bill we are introducing today is
urgently needed to protect the pension benefits of workers across
America.
A decent retirement in today's world depends on Social Security,
private pensions, and private savings. But today's working families
find their retirement severely threatened. President Bush wants to
privatize Social Security. Private savings are at an all-time low, and
now private pensions are in great jeopardy, too.
This challenge has been brought home all too clearly by United
Airlines' recent announcement that it intends to end its pension plans
and turn them over to the Pension Benefit Guaranty Corporation. The
pensions of over 120,000 workers are at stake. Over $3 billion in their
benefits are not guaranteed by the corporation, and the future pensions
they have been promised will be lost as well.
These hard-working Americans include thousands of flight attendants
like Patrice Anderson, who have made only a modest wage throughout
their working lives and for whom ``the possible loss of hundreds of
dollars a month in old age changes a dignified retirement into a
subsistence-level retirement.''
The loss is particularly painful because so many of the employees
have accepted lower pay or given back wages and other benefits in order
to keep their pension plans. Marilyn King of California worked for
United for 25 years. She says: ``I used to be proud of working for
United. Now, I am embarrassed and angry. I am angry that we

[[Page S6055]]

took 25 percent in pay cuts, that we gave other concessions; and then
our COO and CEO get their bonuses and perks.''
We have heard from families and workers across the country. In
Massachusetts, Kevin Creighan and his wife Cathy Hampton in Lynn have
spent a lifetime with United, ``working hard, earning a living, and all
along expecting a pension.'' They hoped to retire in 7 years, with a
combined 70 years of loyal service between them. Now, if they want the
retirement they were promised by the United Airlines pension plan, they
will have to work for an additional 15 years.
George Raymond of Arizona retired at the age of 60 after 38 years. He
writes that because of this pension termination, he will not be able to
afford his medical bills. Richard Myer of California retired after 32
years as a United pilot, and now he has to go back to work and sell his
home to support his children and his elderly father-in-law.
Americans who work hard and play by the rules should not be
victimized by these broken promises. No wonder they feel betrayed. They
share the view of Robert Lamica of Virginia, who says, ``I kept my
promise to United for 36 years by working in rain, snow, heat, and
whatever else nature would throw our way . . . My back and knees have
been destroyed along with my ability to get another job . . . We need
not be left on the curb just because United can.''
These loyal men and women cannot turn back the clock and make
different decisions. But Congress can stop that clock and reach a fair
solution.
This legislation we are introducing will prevent bankrupt companies
from abandoning their pension plans for the next 6 months.
Our action will also ease the growing threat to all defined benefit
pension plans. The Pension Benefit Guaranty Corporation estimates that
if it takes over the remaining airline defined benefit pension plans,
90 percent of the claims it must cover will come from airline companies
or steel companies, even though such plans include only 5 percent of
the employees covered by the corporation. The legislation will buy time
for us to develop real solutions for the serious problems of these
ailing industries.
I urge my colleagues to join me in support of this bill. We owe it to
all these hard working Americans whose retirement has been put at risk.
______

By Mr. HATCH (for himself, Mr. Baucus, Mr. Smith, Mr. Schumer,
Mr. Crapo, Mr. Lott, Mr. Kyl, and Mrs. Lincoln):
S. 1159. A bill to amend the Internal Revenue Code of 1986 to
permanently extend the subpart F exemption for active financing; to the
Committee on Finance.
Mr. HATCH. Mr. President, I rise today to introduce a bill, S. 1159,
to make permanent a provision under subpart F of the Internal Revenue
Code regarding active financial services income earned abroad. I am
joined in this effort by my colleagues Senators Baucus, Smith, Schumer,
Crapo, Lott, Kyl, and Lincoln. Under current law, the provision will
expire at the end of next year.
This legislation would ensure that U.S. financial services firms and
U.S. manufacturing companies with financial services operations are
subject to U.S. tax on income from their active overseas financial
services operations only when such earnings are sent home to the U.S.
parent company. As my colleagues know, this is the treatment provided
under the U.S. tax law for other active business income earned
overseas. Our legislation simply extends, on a permanent basis, the
expiring provision that ensures this same treatment for the financial
services industry.
The permanent extension of this provision is critically important in
today's global marketplace. Over the last few years, the financial
services industry has seen technological and global changes that have
altered the very nature of the way these corporations do business, both
here and abroad. The U.S. financial industry is a worldwide leader that
plays a pivotal role in maintaining confidence in the international
marketplace and positively contributes to the U.S. international trade
balance. We believe it is essential that our tax laws not impose anti-
competitive burdens on this important U.S. industry.
If we allow the active financial services provision to lapse, U.S.
companies would have to pay both local tax and current U.S. tax on the
financial services income they generate overseas. While some of this
double taxation is often alleviated by the foreign tax credit, we all
know that this system works imperfectly. The result is that U.S. firms
end up with a cost that is not borne by their European and Asian
competitors, because companies based in these areas do not face current
home country taxation on financial services income. In an industry
where companies compete on price and a few basis points can mean the
difference between getting the business or losing it to a competitor,
the imposition of this additional tax cost on U.S.-based companies
would translate into a competitive disadvantage for U.S. companies and
a competitive advantage for their foreign counterparts. Given the
thousands of U.S. jobs at stake, many of them in Utah, we do not
believe our tax policy should allow this to happen.
While this provision may seem far removed from the average Utahn or
the average American, I can assure you that this is not true. For
example, the Salt Lake City area serves as the headquarters location
for the banking operations of American Express Centurion Bank and
American Express Bank, FSB, which are important parts of the worldwide
American Express Card system. Salt Lake City is also the headquarters
of American Express Travelers Cheques, with its Utah facility servicing
Travelers Cheques clients on a worldwide basis. Thousands of Utahns are
employed by these companies.
These businesses are tied to the international marketplace through
the competitive strength of the American Express global franchise. For
American Express and other U.S. companies to compete on par with their
foreign competitors, the U.S. tax rules need to provide fair and
equitable treatment of their overseas operations. To the extent foreign
competitors can take business away from U.S. firms because of an uneven
playing field, U.S. jobs are at risk.
The bill we are introducing today would provide equitable and
consistent tax treatment for this important component of our economy.
Making this provision permanent would provide American companies much-
needed stability. The current provision has been renewed several times,
most recently for 5 years in the Job Creation and Worker Assistance Act
of 2002. Our ``on-again, off-again'' habit of extensions prevents U.S.-
based firms from competing fully in the global marketplace by
interfering with their ability to make business decisions and plan on a
long-term basis. The permanent extension of this subpart F provision
would ensure that the U.S. financial services industry is on a
competitive footing with their foreign-based competitors and would
provide tax treatment that is consistent with the tax treatment
accorded other U.S. businesses.
The Congress and the administration took an important step toward
modernizing our international tax rules with the enactment of the
American Jobs Creation Act of 2004. The legislation we introduce today
furthers that act's goals of ensuring that American firms can compete
in the 21st century economy.
I urge my colleagues to support this important bill and ask 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. 1159

Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,

SECTION 1. PERMANENT EXTENSION OF SUBPART F EXEMPTION FOR
ACTIVE FINANCING.

(a) In General.--Section 954(h)(9) of the Internal Revenue
Code of 1986 is amended by striking ``and before January 1,
2007,''.
(b) Conforming Amendments.--Section 953(e)(10) of the
Internal Revenue Code of 1986 is amended--
(1) by striking ``and before January 1, 2007,'', and
(2) by striking the second sentence thereof.

Mr. BAUCUS. Mr. President, today I am pleased to join my friend and
colleague, Senator Hatch, in introducing legislation to make permanent
the subpart F provision for active financial serviced income earned
abroad.

[[Page S6056]]

The legislation we are filing today is identical to a bill we filed
in the 107th Congress. Since then, this exemption has been temporarily
extended but that will expire at the end of next year. This exemption
ensures that the active financial services income earned abroad by U.S.
financial services companies, or U.S. manufacturing firms with a
financial service operation, is not subject to U.S. tax until that
income is brought home to the U.S. parent company.
By making this provision permanent, our legislation will put the U.S.
financial services industry on an equal footing with its foreign-based
competitors, which do not face current home country taxation on active
financial services income. I will tell my colleagues that this bill is
about jobs in Montana, and in each of our States. In fact, one of these
competitive U.S. financial services companies employs hundreds of
Montanans in Great Falls alone, so the health of that company is
critically important to my constituents.
American financial services companies successfully compete in world
financial markets. We need to make sure, however, that the U.S. tax
rules do not change that situation and make them less competitive in
the world arena. This legislation will extend a provision that I
believe preserves the international competitiveness of U.S.-based
financial service companies, including finance and credit companies,
commercial banks, securities firms, and insurance companies. This
provision also contains appropriate safeguards to ensure that only
truly active businesses benefit.
As my colleagues have heard year after year, the active financial
services provision is critically important in today's global economy.
Our U.S. financial services industry is a global leader playing a
pivotal role in maintaining confidence in the international
marketplace. It is a fiercely competitive business. And U.S.-based
companies would surely be disadvantaged with an additional tax burden
if we allow this exemption to lapse. Through our network of trade
treaties, we have made tremendous progress in gaining access to new
foreign markets for this industry in recent years. Our tax laws should
complement, rather than undermine, this effort.
The temporary nature of the active financial services provision, like
other expiring provisions, denies U.S. companies the stability enjoyed
by their foreign competitors. It is time to make permanent this subpart
F active financial services provision in order to allow U.S. business
companies to make business decisions on a long-term basis. I ask my
colleagues to join us in supporting this legislation, providing
consistent, equitable, and stable tax treatment for the U.S. financial
services industry.
______

By Mr. WYDEN (for himself and Mr. Sununu):
S. 1128. A bill to amend title XIX of the Social Security Act to
provide for increased rebates under the medicaid program for
prescription drugs that are directly advertised to consumers, to
require other Federal programs purchasing or reimbursing for such drugs
to establish payment and reimbursement mechanisms that reduce the costs
of those drugs, and for other purposes; to the Committee on Finance.
Mr. WYDEN. Madam President, the cost of medicine is a matter of
concern to every Senator. Today, Senator Sununu and I have introduced
legislation to take a fresh approach to holding down the cost of
medicines in our country. Under our bipartisan legislation, the Federal
Government would pay less for pharmaceuticals that are advertise when
the Federal Government buys those medicines for Medicaid, the Veterans'
Administration, the Department of Defense, and the Public Health
Service.
One can barely turn on the television or open a magazine these days
without getting the hard sale on a hot new medicine. There is no doubt
that medical science is making miracles for our citizens who need help
with their health. For that, we are, of course, grateful. But the
advent of advertising for prescription drugs presents pitfalls as well,
not just for patients but for every American taxpayer.
Senator Sununu and I introduced our legislation today because as the
marketing gets savvier, the Federal Government needs to get smarter and
contain costs wherever possible for these popular and expensive drugs.
The fresh approach that Senator Sununu and I unveil today will amp up
the Government's purchasing power on prescription drugs that are
advertised directly to consumers. The Pharmaceutical Advertising and
Prudent Purchasing Act will reduce drug costs for the beneficiaries of
Medicaid and other Federal programs. It will ease the burden on States
struggling to stretch their health care dollars through Medicaid, and
it will lower the overall costs for taxpayers footing the bill for
these advertised drugs.
When a drug company figures the price of a pill, it passes along the
advertising costs to consumers. Right now, Medicare and Medicaid pay
that cost like any other consumer. But it is time to take the
advertising costs out of the equation for taxpayer funded programs. The
Federal Government, of course, gives drug companies a tax break for
advertising which, of course, every other American company gets for its
business expenses. There is no need for a double subsidy. There is a
need for more prudent purchasing of prescription drugs by the Federal
Government. If that is going to happen, the changes in the
pharmaceutical market that have been caused by the explosion of
advertising cannot be ignored any longer.
I do not have to tell our colleagues that drug advertising in the
United States is an immense and growing industry. The Wall Street
Journal reported last week that the pharmaceutical industry spent
nearly $4.5 billion on advertising to consumers. The penetration of
this advertising may be more than most people realize. A recent Kaiser
Family Foundation poll found that 90 percent of Americans had seen or
heard an advertisement for prescription drugs. Today, more and more
Americans can go to their doctor and ask to have a medication they have
seen advertised on TV, in a magazine, on the radio or on the Internet.
Of course, that is what is happening.
There is a proven direct connection between the advertising of drugs
and a big uptick in the rate of prescriptions written for them. Take a
look at the 10 most advertised drugs in the United States. That is
2003, and I would guess that few Americans would say they have not
heard of any of these drugs.
On each of these drugs, at least $100 million was spent in 2003 alone
on direct consumer advertising. The advertising works. A study
published in the April issue of the Journal of the American Medical
Association demonstrates the link. Researchers sent actors to doctors'
offices to complain of mild depression. Those who mentioned seeing an
ad were five times more likely to get a prescription for an
antidepressant as those who simply described their supposed symptoms
without talking about a drug ad they had seen. It is no wonder the
heavily advertised drugs make up most of the top 10 medicines
prescribed under Federal health programs like Medicare, Medicaid, and
others. Take a look.

These are the 10 drugs on which Medicare spends the most total money
for outpatient care. Nine are advised directly to consumers.
Here are the 10 drugs on which Medicaid spends the most money. Four
of the ten are advised directly to consumers. The next 4 drugs, Nos. 11
through 14, are advertised as well. It is the view of Senator Sununu
and I that the Federal Government is one consumer that does not need to
receive advertising from the drug companies.
The Federal Government is buying medicine for a lot of people with a
limited pool of funds. It is vital to get a handle now on the
connection between advertising and increased sales and to insist on
more prudent purchasing.
Our legislation does just that. It makes the Government a more
prudent purchaser in a straightforward way. It will require Medicaid
and other vital programs under Health and Human Services and the
Veterans' Administration to get a discount that cuts out the
advertising costs figured in each pill. In Medicaid, this would be done
by adjustments in the Medicaid rebate program. That is an existing
program that requires a pricing agreement between drug manufacturers
and the Federal Government for any drug to be sold through the Medicaid
program.
The Health and Human Services Secretary and the VA Secretary will
also

[[Page S6057]]

be able to negotiate reduced prices for other Federal programs such as
the Public Health Service, programs administered by the Indian Health
Service, the Department of Veterans Affairs, the Department of Defense
and the Defense Health Program.
This is smart and effective spending. It ends the spending of
taxpayer dollars to fund advertising that has already received a tax
break. It is a commonsense step, the kind of common sense that is all
too uncommon when the Federal Government buys drugs.
Our legislation will address another issue that speaks both to the
taxpayers' interests and the health of patients in these programs. When
advertised drugs are purchased, it is not enough to make sure the price
is right, although that is important. It is vital the drug is right for
the patient's particular problem. Taxpayer dollars should buy drugs
that will work best for patients by a doctor's best judgment. Just
because a patient recognizes a drug's name enough to request it from
their provider does not mean it is the best medicine.
More and more drug companies are treating doctors as a middleman they
wish to skip. They make a lot more money if patients, without medical
degrees, are encouraged to start writing their own prescriptions,
whether the drug is the right one or not. Medicare, Medicaid, and other
Federal programs have a charge to keep for their patients and a trust
to maintain with American taxpayers. They should not be exploited
financially by the pharmaceutical ``flavor of the month.''
I close by expressing my thanks to the Senator from New Hampshire.
This is a bipartisan approach that is going to hold down the cost of
medicine for taxpayers in our country. It will be a benefit to
beneficiaries certainly at a time when the Medicaid Commission is
trying to find responsible savings. We ensure that we take the time to
study how this approach would work for other programs such as Medicare.
And because I see my friend in the Chamber, I will wrap up simply by
saying that it is time to take out a sharp pencil and eliminate the
hidden costs for taxpayers from advertised drugs.
I yield the floor.
The PRESIDING OFFICER. The Senator from New Hampshire.
Mr. SUNUNU. Madam President, I am pleased to join Senator Wyden in
the introduction of this legislation, which is a good-faith effort to
try to find that fresh approach Senator Wyden talked about, a fresh
approach to deal with costs in health care, specifically in those areas
where the Federal Government is directly purchasing pharmaceuticals: in
the VA, where we have a very large direct purchase program that exists
today, and within Medicaid, where both the Federal Government and the
States are directly involved in purchasing and negotiating the pricing
of drugs.
We are focusing on direct-to-consumer advertising. This is an area
where activity and cost have exploded over the last 6 or 7 years. Since
1997, when the Federal Government changed the regulations associated
with direct-to-consumer advertising, we have seen advertising outlays
for pharmaceuticals go from a little bit over $1 billion to nearly $5
billion per year this year. Those costs, as any costs would be, are
passed on to consumers. In the case of these programs where the Federal
Government is purchasing the pharmaceuticals in the VA and in Medicaid,
that means that the cost, the impact, is disproportionately felt by the
taxpayer.
This is an effort to try to find a way to reduce those costs, to give
the Federal Government the power to make a distinction, as they
negotiate prices--to make a distinction between those drugs that are
advertised directly to consumers or marketed directly to consumers and
those that are not, and to provide discounts to those companies or
those drugs that avoid the additional costs of advertising.
This advertising, as I say, is expensive. The cost is passed on to
taxpayers in these particular programs. I think there are also a lot of
questions about the value that a flood of advertising might provide.
We have all been inundated by different types of advertisement, on TV
or in magazines. It is costly, as I mentioned, but it also carries with
it some risk of overutilization; of, in some cases, encouraging or
leading consumers to believe that they need or would benefit by a
particular medicine when it is not necessarily the best approach for
them.
In some cases it is clear this advertising has been used to drive
consumers away from lower priced generic drugs. I think this is one of
the most problematic areas, and that has been seen and discussed at
some length in the States, in their Medicaid programs.
This legislation presents an opportunity to get our hands around the
cost issue, to fund some important studies, to take a closer look at
questions of overutilization and the substitution I described. It
represents a good start, I think, opening the debate with this
discussion about dealing directly with health care costs in areas of
the Federal Government as the principal purchaser.
There may be other options. In fact, Senator Wyden and I talked about
a few other approaches that are not included in this legislation. I
think I can speak for the Senator from Oregon when I say we look
forward to talking to our colleagues about other ideas that might be
out there. We look forward to sharing ideas and information with
producers themselves who, I hope, are willing to look at ways to help
save the consumers money, help save taxpayers money, and help deal with
direct-to-consumer advertising in a more responsible way.
We are going to do a Medicaid bill this year in the Senate. While we
also deal with some issues at HHS and the VA in this bill, certainly
the costs associated with Medicaid and our recommendations with regard
to Medicaid are a central part of the bill. I will work with Senator
Wyden and any of my interested colleagues to try to include and capture
some of these ideas in Medicaid legislation this year.
It is a great opportunity to look at the issue of health costs and
drug costs in a fresh way, in a different way. I very much appreciate
the work Senator Wyden has done in helping to craft this legislation
and his willingness to lend his strong support, as a longstanding and
more senior Member than I, as a member of the Senate Finance Committee,
and as a Member of the Senate on the other side of the aisle.

____________________