[Congressional Record Volume 152, Number 106 (Thursday, August 3, 2006)]
[Senate]
[Pages S8804-S8857]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS
By Mr. REED:
S. 3784. A bill to provide wage parity for certain prevailing rate
employees in Rhode Island; to the Committee on Homeland Security and
Governmental Affairs.
Mr. REED. Mr. President, today I am introducing the Rhode Island
Federal Worker Fairness Act of 2006. This bill will merge the
Narragansett Bay wage area with the Boston, MA, wage area to provide
Rhode Island Federal blue-collar workers with pay equity in the region.
These workers include janitors, mechanics, machine tool operators,
munitions and explosive operators, electricians, and engineers.
Federal employees within the Narragansett Bay wage area are paid
under one of the lowest Federal wage system, FWS, pay scales while
residing in an area with one of the highest costs of living.
Significant disparities between Narragansett Bay wages and those in
proximate wage areas raise serious questions about the fairness and
equity of the Federal wage pay scales. The average wage grade worker in
Rhode Island earns $18.01 per hour compared to the same worker in
Boston who earns $20.25 per hour or an employee in Hartford who earns
$20.05 per hour. As a result, Rhode Island may be losing experienced
Federal employees to the same jobs, at the same grade levels, just
miles away because of better pay. Enacting this legislation would help
the approximately 500 wage rate workers in Rhode Island better provide
for their families, and it will ensure that Rhode Island keeps
qualified and trained Federal workers.
Roughly 80 percent of all FWS employees in the United States work
either in the Department of Defense or the Department of Veteran
Affairs. Indeed, Naval Station Newport employs the most FWS workers in
the Narragansett Bay area. These employees perform work that is
important to our national security, and competitive compensation is the
best way to ensure that these workers are qualified and effective.
Merging these two wage areas would reduce the disparity between the
salaries of these Federal workers and keep Federal workers in Rhode
Island from abandoning their Government jobs for higher paying
positions in Massachusetts and Connecticut.
[[Page S8805]]
Mr. President, I ask unanimous consent that the text of the bill be
printed in the Record.
There being no objection, the text of the bill was ordered to be
printed in the Record, as follows:
S. 3784
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 ``Rhode Island Federal Worker
Fairness Act of 2006''.
SEC. 2. WAGE PARITY FOR CERTAIN PREVAILING RATE EMPLOYEES IN
RHODE ISLAND.
The wage schedules and rates applicable to prevailing rate
employees (as defined in section 5342 of title 5, United
States Code) in the Narragansett Bay, Rhode Island, wage area
shall be the same as the wage schedules and rates applicable
to prevailing rate employees in the Boston, Massachusetts,
wage area.
SEC. 3. EFFECTIVE DATE.
Section 2 shall take effect beginning with the first pay
period beginning on or after the date of enactment of this
Act.
______
By Ms. SNOWE:
S. 3785. A bill to amend the Small Business Investment Act of 1958 to
improve surety bond guarantees, and for other purposes; to the
Committee on Small Business and Entrepreneurship.
Ms. SNOWE. Mr. President, I rise today to introduce the Surety Bond
Improvement Act, a bill designed to reinvigorate the Small Business
Administration's Surety Bond Guarantee Program. This bill's primary
purpose is to ensure that small businesses are able to secure the
surety bonds they need to compete for contracts, grow, and hire more
employees.
Surety bonds are critical to small companies' survival and
competitiveness. Without bonding, small firms cannot secure the
contracts they need to grow. Unfortunately, many new, small businesses
lack the stable credit histories and assets they need to secure surety
bonding. Many sureties also refuse to bond small companies because of
the greater risk that comes with insuring unproven firms. For many
small businesses, difficulties obtaining surety bonds act as a barrier
to entry and prevent them from competing in defense contracting,
construction, services, and other markets.
Insuring against loss, surety bonds are most often used on large
contracts where the sequential work of many subcontractors is necessary
to finish a project on time. The principal contractor will require that
each subcontractor obtain a surety bond. A subcontractor's surety bond
will guarantee that they will meet their contract's time and quality
requirements whether it be for framing a building or installing
specific computer equipment. The majority of small and large businesses
fulfill their contractual obligations, and claims against surety bonds
are infrequent. If a claim occurs, the surety firm is responsible for
any monetary damages that occur because the bonded company did not
fulfill its contractual obligations.
Many new small contractors are only able to obtain surety bonds
through the SBA's Surety Bond Guarantee Program. In order to reduce the
risk to- surety firms, the SBA promises to cover between 70 and 90
percent of any possible claims on bonds underwritten through the Surety
Bond Guarantee Program. The Surety Bond Guarantee Program then helps
small businesses establish a bonding history so that with time they can
outgrow the program and obtain bonds in the competitive marketplace.
It is critical to understand that the number of participating
sureties in the Surety Bond Guarantee Program directly affects the
number of small companies that can receive surety bonds. Over the last
several years, a number of SBA actions have greatly reduced the
profitability of surety companies participating in this SBA program.
Declining profitability has forced sureties to leave the program,
causing a severe downturn in the total number of small businesses
obtaining surety bonds.
In 2003, the Surety Bond Guarantee Program issued 8,974 bonds to
small businesses. In 2004, the number declined to 7,803 bonds, and in
2005, the number declined again to 5,678 bonds. This year, even though
the need for surety bonds has not decreased, as of March 2006, only
1,760 surety bonds have been issued. The sureties argue that SBA's
outdated fee structure and other actions, such as unwinding bond
guarantees and recent fee increases, make it impossible for them to
earn a profit and continue participating in the program.
One of the greatest obstacles to profitability is the Preferred
Surety Bond Program's outdated fee structure. Currently, sureties in
the preferred program are forced to use insurance rates set on August
1, 1987, almost 20 years ago. Many sureties have left the program
because the SBA's outdated rates prevent them from making a profit on
the small business bonds they issue.
To address this problem, my bill would grant participating sureties
greater rate setting flexibility by allowing them to charge rates that
are approved by the insurance commissioner of the State in which the
contract will be performed. It will also raise the current limit on the
maximum amount of a contract that a company can bond through the
program from $2 million to $3 million, an adjustment that inflation
makes necessary.
My bill prohibits the SBA from unwinding a surety bond guarantee
after the agency has already underwritten and approved the bond.
Currently, the SBA will often find technical reasons, which should have
been discovered during the underwriting process, to avoid paying on a
claim against an SBA guaranteed bond. When this occurs, the surety
companies must honor the SBA's financial obligations and cover any
losses caused by the breach of contract. Most sureties can only afford
to have the SBA unwind a bond once or twice before they are forced to
leave the Surety Bond Program.
My bill also addresses recent SBA fee increases. In August of 2005,
the SBA moved to increase surety bonding companies' premium fees by 60
percent and then directed that none of the fee increase could be passed
along to small companies seeking surety bonds. I was concerned that
this fee increase would provide an additional reason for surety
companies to stop underwriting small companies and further decrease the
ability of small firms to receive surety bonds.
The SBA's fee increase made it necessary for me to evaluate the
underlying terms of the surety program. After working with the SBA,
eventually the agency agreed to allow the surety companies to split the
fee increase with small firms, a much more palatable solution than
forcing the bonding companies--or the small businesses--to absorb all
of the increase.
The bill requires the SBA to be transparent in its fee structure and
any calculations the agency uses to justify future fee increases. The
bill also clarifies that Congress does not require the Surety Bond
Guarantee Program to be entirely self funding or self sufficient.
I am working with the SBA to reverse the decline in participating
sureties and increase the number of small businesses receiving surety
bonding. To achieve this goal, the Surety Bond Guarantee Program is
working to reduce approval times by increasing companies' ability to
submit underwriting applications and claim requests online. The program
also plans to restructure its field offices and conduct outreach to new
sureties and small businesses needing surety bonding. These changes,
along with the necessary legislative changes I have proposed today,
will help the program attract new sureties and increase the overall
number of small companies able to secure sureties underwriting through
the program.
Mr. President, I would like to encourage my colleagues to support the
Surety Bond Improvement Act. This bill was written after consulting
with small business owners and surety bonding companies on how best to
revitalize this critical program. Without these changes, the number of
sureties participating in the program will continue to decline--as will
the ability of small businesses to secure surety bonds. Without these
bonds many small businesses will be unable to compete for contracts and
government work. For new companies, obtaining a surety bond will become
a barrier to entry and competition they are unable to overcome.
______
By Ms. SNOWE:
S. 3786. A bill to reauthorize and improve the Small Business Act and
the Small Business Investment Act of 1958, and for other purposes; to
the Committee on Small Business and Entrepreneurship.
[[Page S8806]]
Ms. SNOWE. Mr. President, I rise today to introduce the Small
Business Information Security Act of 2006. This bill will establish
within the Small Business Administration a Small Business Information
Security Task Force to advise the SBA and help small businesses both
understand the information security challenges they face and identify
resources to help meet those challenges.
As chair of the Senate Committee on Small Business and
Entrepreneurship, one of my goals is to ensure small businesses are
protected from the mounting information security threats they face
every day. This legislation will create a clearinghouse of information,
resources, and tools--compiled by a task force consisting of public and
private sector experts in the field--that will ease the trouble,
confusion, and cost often associated with enhancing information
security measures within a small business. The task force will
continually update information and resources as new technologies and
new threats arise. Currently, potential and existing owners of small
businesses turn to the SBA for resources regarding a number of other
aspects when developing and maintaining their ventures. But information
security resources are not as readily available. This measure will
present an opportunity for the SBA to create a repository for small
businesses to meet their information security needs.
According to a 2005 survey by the Small Business Technology
Institute, more than half of all small businesses in the United States
experienced a security breach in the last year. Furthermore, the study
concludes that nearly one-fifth of small businesses do not use virus-
scanning for e-mail, over 60 percent do not protect their wireless
networks with encryption, and two-thirds of small businesses do not
have an information security plan.
As these statistics illustrate, small businesses are increasingly at
risk of data breaches and other forms of malicious attacks on their
information technology infrastructure. The Small Business Information
Security Task Force will provide resources and information to small
business owners to help them overcome these obstacles and decrease the
risks posed to their small businesses by cybercriminals. I encourage
all of my colleagues to support this vitally important legislation.
______
By Mr. SANTORUM (for himself, Mr. Pryor and Mrs. Dole):
S. 3787. A bill to establish a congressional Commission on the
Abolition of Modern-Day Slavery; to the Committee on Foreign Relations.
Mr. SANTORUM. Mr. President, I am joined today by Senator Pryor and
Senator Dole to address an important issue that is all too often hidden
from public view--the practice of modern day slavery.
One of my political heroes is the 18th century British statesman,
William Wilberforce. Wilberforce was one of the leaders of the moral
crusade to rid the British empire of slavery. He devoted 20 years to
abolishing the British slave trade and another 26 years to abolishing
slavery altogether. He and his fellow abolitionists had a profound
affect on the American abolitionist movement, and their dedication
fueled some of our greatest leaders, including John Quincy Adams,
Benjamin Franklin, James Monroe, and John Jay. His influence reached
William Wells Brown, Paul Cuffe, Benjamin Hughes, Frederick Douglass,
and Abraham Lincoln, and he helped pave the way for abolitionists like
Thaddeus Stevens and Richard Allen.
These great men opened the eyes of the United Kingdom and the United
States to see the injustice that marked our countries. Thankfully,
their work helped end the U.S. and U.K. slave trade. Later, our country
constitutionally abolished slavery and took a significant step to
effectuate the vision of the Declaration of Independence, that all
people are created equal.
We, as a country, often rush to divorce ourselves from our historic
malfeasance. We want to forget the stories of human beings--women and
children--suffocating on slave ships, tied to whipping posts and bound
with bruising fetters. We want to forget the blatant oppression, our
country's inhumane drive for profit and obvious disregard for the
value, worth and freedom inherent in every life. The slavery of our
past offends every modern sensibility we have; yet, we cannot bury
these stories as just part of the distant past.
Slavery exists today. Despite the heroic work of liberators centuries
before us, and despite the fact that almost every country in this world
has constitutionally outlawed slavery, as many as 27 million people are
in bondage according to the 2006 Trafficking in Persons Report. This
slavery, although in many ways different from the slavery in centuries
past, is equally horrifying and brutal. Among other practices, it
includes sexual exploitation, bonded labor, forced labor, forced
marriage, chattel slavery and child labor.
An estimated 800,000 persons are trafficked across international
borders each year, and an estimated 18,000 to 20,000 victims are
trafficked into the United States each year. Approximately 80 percent
of the victims are female and an estimated 40 to 50 percent are
children. Unfortunately, unlike the slavery of our past, modern-day
slavery takes on myriad, subtler forms, making it more difficult to
identify and eradicate. Within countries where the trade originates, a
seemingly endless supply of victims remains available for exploitation,
and within the destination countries there seems to be an endless
demand for the ``services'' of victims. Organized criminal networks--
some large and some small--have taken control of this economic supply
and demand situation, establishing an appalling, but often invisible
trade of humans in the 21 century.
This modern-day slavery is notable for the variety and complexity of
the trafficking networks that operate and sustain it. The forms of
slavery, such as sex-trafficking, are incredibly adaptive: these
networks extend to every region and virtually every country in the
world--representing a truly global industry. Slavery of all forms is
extremely profitable for the exploiters, and they capitalize on the
weak and vulnerable, the desperate and unstable. They are most
successful in areas of conflict and postconflict, transitioning states,
sudden political change, economic collapse, widespread poverty, and
natural disasters. Weak legal infrastructure, corrupt law enforcement
officials, globalization and the lack of equal employment opportunity
have fed this iniquitous multibillion-dollar criminal industry.
Women are often lured by promises of employment as shopkeepers,
maids, seamstresses, nannies, or waitresses but then find themselves
forced into prostitution upon arrival to their destination. Their
traffickers seize travel documents, create enormous and unsubstantiated
debt demands, and subject the women to brutal beatings if their
earnings are unsatisfactory.
Girls, as young as five, are often kidnapped or even sold by trusted
relatives into the transatlantic sex trade. They are often raped,
beaten, and forced to sleep with 10 to 15 men per night. These young
children are manipulated, coerced, and held in bondage. Victims are
often isolated, unable to speak the language of the land they are
transported to, and are often unfamiliar with the culture. Without the
support network of their family and friends, they are incredibly
vulnerable to their oppressors' demands.
The victims of modern-day slavery often face torture, violence, poor
nutrition, and drug and alcohol addiction. They contract HIV/AIDS,
suffer from severe trauma and depression, and are stripped of dignity
and hope for their future. As I have continued to work on legislation
that reaches the populations most deeply affected by the HIV/AIDS
epidemic, violence against women, and child exploitation, I am offended
by the complete disrespect for life that binds these horrors together.
We, as a nation, cannot stand idle. As William Wilberforce said, ``it
is we who are now truly on trial before the moral sense of [this
world], and if we shrink from it, deeply shall we hereafter repent our
conduct.'' As a Congress, we have come together to call our country and
others to action in the fight against human trafficking; I commend the
work of this administration, the NGOs, and the freedom-fighters
throughout the world who have been working to address this nefarious
issue.
Yet despite our hard work, we have an obligation to do more. Today I
am submitting a resolution and introducing a bill that call for a
deeper commitment to the cause of abolishing
[[Page S8807]]
modern-day slavery. The resolution calls us to make modern-day slavery
a priority in our foreign and domestic policy. This resolution resolves
that the abolition of modern-day slavery should be prioritized at the
2007 G8 Summit and calls for the trade policy of the United States to
reflect our commitment to freedom for all people.
I am also introducing a bill for the formation of a bipartisan
congressional commission that will conduct a thorough and thoughtful
study of all matters relating to modern-day slavery, working alongside
the programs we have implemented so far. This commission will make
recommendations for our country and for abolitionists worldwide
including identifying the countries which provide the greatest
opportunity for abolition of modern-day slavery specific to U.S.
involvement. Currently, many of the very qualified groups that work to
free slaves are scattered. Some of these groups are better at
extraction, while others are better at rehabilitation; the commission
will make recommendations that seek to bring these incredible groups
together to provide the most sustainable options for rescued victims.
The commission will examine the economic impact on communities and
countries that have demonstrated measured success in fighting modern-
day slavery. I recently learned of a small village in South Asia where
over 70 emancipated slaves have now been elected to positions of
leadership in their community. They have built their first well to
serve the community and are representing others who are vulnerable to
oppression.
Additionally, this commission will make recommendations which work to
increase education and awareness about modern-day slavery throughout
the United States with the purpose of fighting modern-day slavery.
The potential exists for real and systemic change. Together, this
commission and this resolution will work to support a full and rich
circle demonstrating the power of emancipation. We have a tremendous
opportunity to reaffirm our commitment as a nation to spreading freedom
for all people by eradicating the horrendous scourge of modern-day
slavery. I look forward to following the example of the abolitionists
before us to end this worldwide evil.
Mr. President, I ask unanimous consent that a copy of the bill be
printed in the Record.
There being no objection, the text of the bill was ordered to be
printed in the Record, as follows:
S. 3787
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 ``Congressional Commission on
the Abolition of Modern-Day Slavery Act''.
SEC. 2. MODERN-DAY SLAVERY.
In this Act, the term ``modern-day slavery'' means the
recruitment, harboring, transportation, receipt, procurement,
or control of persons through the use of force, fraud,
coercion, abduction, deception, abuse of power, or of a
position of vulnerability or of the giving or receiving of
payments or benefits to achieve the consent of a person
having control over another person, for the purpose of
subjection to debt bondage, serfdom, involuntary servitude,
forced labor, chattel, forced marriage, peonage, sexual
exploitation, or trafficking.
SEC. 3. FINDINGS.
Congress makes the following findings:
(1) The Declaration of Independence recognizes the inherent
dignity and worth of all people and states that all people
are created equal and are endowed by their Creator with
certain unalienable rights, and the right to be free from
slavery and involuntary servitude is among those unalienable
rights.
(2) Despite international laws outlawing modern-day
slavery, modern-day slavery affects virtually every country
in the world, and as many as 27,000,000 people are victims.
Modern-day slavery is one of the fastest growing areas of
international criminal activity and is an increasing concern
to the United States Administration, Congress, and the
international community; the Federal Bureau of Investigation
estimated that modern-day slavery generates over
$9,000,000,000 every year.
(3) Traffickers use threats, intimidation manipulation,
coercion, fraud, shame, and violence to force victims into
modern-day slavery. Traffickers capitalize on areas of
conflict and post-conflict, transitioning states, sudden
political change, economic collapse, civil unrest, internal
armed conflict, chronic unemployment, widespread poverty,
personal disaster, lack of economic opportunity, and natural
disasters.
(4) Modern-day slavery: contributes to the breakdown of
societies due to the loss of family support networks; has a
negative impact on the labor market in countries; brutalizes
men, women, and children and exposes them to rape, torture,
HIV/AIDS and other sexually transmitted diseases, violence,
dangerous working conditions, poor nutrition, drug and
alcohol addiction, severe psychological trauma from
separation, coercion, sexual abuse, and depression; and
strips human beings of dignity, respect, and hope for their
future.
(5) The United States has given priority to combating human
trafficking through the Victims of Trafficking and Violence
Protection Act of 2000 (Public Law 106-386) and the
Trafficking Victims Protection Reauthorization Act of 2005
(Public Law 109-164).
(6) The State Department issued its sixth congressionally
mandated Trafficking in Persons Report (TIP) in June, 2006,
which categorizes countries into tiered groups according to
the efforts they are making to combat trafficking. The
countries that do not cooperate in the fight against
trafficking (Tier 3 Countries) have been made subject to
United States sanctions since 2003, under the President's
direction.
SEC. 4. ESTABLISHMENT OF COMMISSION.
(a) Establishment.--There is established a congressional
Commission on the Abolition of Modern-Day Slavery (referred
to in this Act as the ``Commission'').
(b) Membership.--
(1) Composition.--The Commission shall be composed of 12
members, of whom--
(A) 3 shall be appointed by the Speaker of the House of
Representatives;
(B) 3 shall be appointed by the majority leader of the
Senate;
(C) 3 shall be appointed by the minority leader of the
House of Representatives; and
(D) 3 shall be appointed by the minority leader of the
Senate.
(2) Qualifications.--Members of the Commission shall be
appointed from among individuals with demonstrated expertise
and experience in combating modern-day slavery and
trafficking of persons.
(3) Date.--The appointments of the members of the
Commission shall be made not later than 30 days after the
date of enactment of this Act.
(c) Period of Appointment; Vacancies.--Members shall be
appointed for the life of the Commission. Any vacancy in the
Commission shall not affect its powers, but shall be filled
in the same manner as the original appointment.
(d) Cochairpersons.--The Speaker of the House of
Representatives shall designate 1 of the members appointed
under subsection (b)(1)(A) as a cochairperson of the
Commission. The majority leader of the Senate shall designate
1 of the members appointed under subsection (b)(1)(B) as a
cochairperson of the Commission.
(e) Initial Meeting.--Not later than 60 days after the date
of enactment of this Act, the Commission shall hold its first
meeting.
(f) Meetings.--The Commission shall meet at the call of
either cochairperson.
(g) Quorum.--A majority of the members of the Commission
shall constitute a quorum, but a lesser number of members may
hold hearings.
SEC. 5. DUTIES OF THE COMMISSION.
(a) Study.--
(1) In general.--The Commission shall--
(A) conduct a thorough and thoughtful study of all matters
relating to modern-day slavery, including vulnerabilities of
commonly affected populations, such as populations in areas
of conflict and post conflict, transitioning states, states
undergoing sudden political change, economic collapse, civil
unrest, internal armed conflict, chronic unemployment,
widespread poverty, lack of opportunity, and national
disasters;
(B) study the roles of the rule of law, lack of
enforcement, and corruption within international law
enforcement institutions that allow the proliferation of
modern-day slavery;
(C) review all relevant Governmental programs in existence
on the date of the beginning of the study, including the
United States Agency for International Development, the
Department of State, the Department of Defense, the
Department of Labor, the Department of Health and Human
Services, the Interagency Task Force to Monitor and Combat
Trafficking, and the Human Smuggling and Trafficking Center;
and
(D) convene additional experts from relevant
nongovernmental organizations as part of the Commission's
thorough review.
(2) Goals.--In making determinations under paragraph (1),
the Commission shall seek to promote goals of--
(A) providing a comprehensive and fully integrated
evaluation of best practices, to prevent modern-day slavery;
(B) providing a comprehensive and fully integrated
evaluation of the best practices to rescue and rehabilitate
victims of modern-day slavery;
(C) providing a comprehensive and fully integrated
evaluation of the best practices for prosecution of
traffickers and increasing accountability within countries;
(D) providing a comprehensive and fully integrated
evaluation of exportable models to prevent modern-day
slavery, rescue and rehabilitate victims of modern-day
slavery, prosecute offenders, and increase education and
accountability about modern-day slavery, which could
contribute governments, nongovernmental organizations, and
institutions;
[[Page S8808]]
(E) identifying countries which provide the greatest
opportunity for abolition of modern-day slavery specific to
United States involvement;
(F) connecting various organizations to facilitate
integration of information regarding identifying, extracting,
and rehabilitating victims;
(G) examining the economic impact on communities and
countries that demonstrate measured success in fighting
modern-day slavery;
(H) increasing education and awareness about modern-day
slavery throughout the United States to decrease modern-day
slavery within the United States and abroad; and
(I) providing a comprehensive evaluation of best practices
to educate high-risk populations.
(b) Recommendations.--The Commission shall develop
recommendations on how to best combat modern-day slavery,
including an economic, social, and judicial evaluation.
(c) Report.--Not later than 11 months after the date of
enactment of this Act, the Commission shall submit a report
to the Speaker and minority leader of the House of
Representatives and the majority leader and minority leader
of the Senate, which shall contain a detailed statement of
the legislation and administrative actions as it considers
appropriate.
SEC. 6. POWERS OF THE COMMISSION.
(a) Hearings.--The Commission may hold such hearings, sit
and act at such times and places, take such testimony, and
receive such evidence as the Commission considers necessary
to carry out this Act.
(b) Information From Governmental Agencies.--The Commission
may secure directly from any department or agency such
information as the Commission considers necessary to carry
out this Act. Upon request of either cochairperson of the
Commission, the head of such department or agency shall
furnish such information to the Commission.
SEC. 7. COMMISSION PERSONNEL MATTERS.
(a) Compensation of Members.--Each member of the Commission
who is not an officer or employee of the Federal Government
shall be compensated at a rate equal to the daily equivalent
of the annual rate of basic pay prescribed for level IV of
the Executive Schedule under section 5313 of title 5, United
States Code, for each day (including travel time) during
which such member is engaged in the performance of the duties
of the Commission. All members of the Commission who are
officers or employees of the United States shall serve
without compensation in addition to that received for their
services as officers or employees of the United States.
(b) Travel Expenses.--The members of the Commission shall
be allowed travel expenses, including per diem in lieu of
subsistence, at rates authorized for employees of agencies
under subchapter I of chapter 57 of title 5, United States
Code, while away from their homes or regular places of
business in the performance of services for the Commission.
(c) Staff.--
(1) In general.--The cochairpersons of the Commission,
acting jointly, may, without regard to the civil service laws
and regulations, appoint and terminate an executive director
and such other additional personnel as may be necessary to
enable the Commission to perform its duties. The employment
of an executive director shall be subject to confirmation by
the Commission.
(2) Compensation.--The cochairpersons of the Commission,
acting jointly, may fix the compensation of the executive
director and other personnel without regard to chapter 51 and
subchapter III of chapter 53 of title 5, United Sates Code,
relating to classification of positions and General Schedule
pay rates, except that the rate of pay for the executive
director and other personnel may not exceed the rate payable
for level V of the Executive Schedule under section 5316 of
such title.
(d) Detail of Government Employees.--Federal Government
employees may be detailed to the Commission without
reimbursement, and such detail shall be without interruption
or loss of civil service status or privilege.
(e) Procurement of Temporary and Intermittent Services.--
The cochairpersons of the Commission, acting jointly, may
procure temporary and intermittent services under section
3109 (b) of title 5, United States Code, at rates for
individuals which do not exceed the daily equivalent of the
annual rate of basic pay prescribed for level V of the
Executive Schedule under section 5316 of such title.
SEC. 8. TERMINATION OF THE COMMISSION.
The Commission shall terminate 90 days after the date on
which the Commission submits its report under section 5.
SEC. 9. AUTHORIZATION OF APPROPRIATIONS.
(a) In General.--There are authorized to be appropriated to
the Commission for fiscal year 2007 such sums as may be
necessary to carry out this Act.
(b) Availability.--Any sums appropriated under the
authorization contained in this section shall remain
available, without fiscal year limitation, until expensed.
______
By Mrs. CLINTON:
S. 3790. A bill to create a set of effective voluntary national
expectations, and a voluntary national curriculum, for mathematics and
science education in kindergarten through grade 12, and for other
purposes; to the Committee on Health, Education, Labor, and Pensions.
Mrs. CLINTON. Mr. President, I rise today to introduce legislation to
help ensure that American students are competitive in the global
economy of 21st century. If approved, The National Mathematics and
Science Consistency Act would ensure that America's children have
access to a rigorous math and science education. This bill will help
young men and women in America compete successfully with students from
around the world.
Last fall the National Academy of Sciences, NAS, outlined the
challenges to American competitiveness in its report, ``Rising Above
the Gathering Storm: Energizing and Employing America for a Brighter
Economic Future.'' The reality is that modern technology makes it
increasingly possible for employers to hire the most skilled workers
wherever in the world they live. Unfortunately, too many American
students--even some graduates of high school and college--are not
equipped with the skills they need to compete successfully in the
global economy.
Among 12th graders, America ranks 21st out of 40 industrialized
nations in tests of math and science knowledge. Just one in three of
America's college graduates earn degrees in math, science, and
engineering while two in three college graduates of other countries do
so. We must act now to improve education and research in science,
technology, engineering, and mathematics, STEM, if America is to retain
leadership of the global economy in the 21st century.
In ``Rising Above the Gathering Storm,'' the National Academy of
Sciences made 20 recommendations for how America can increase its
global competitiveness. Nineteen of the 20 recommendations were
proposed in the PACE Acts--PACE-Education, PACE-Energy, and PACE-
Finance. I was proud to cosponsor these bills, and it is a testament to
the widespread concern regarding this issue that each bill has been
cosponsored by more than 60 Senators.
The Mathematics and Science Consistency Act would implement the final
NAS recommendation--for the Department of Education to convene a
national panel of experts that will collect proven effective K-12
science and mathematics teaching materials, and, if effective models
don't exist, create new ones. All materials would be made available
online, free of charge, as a voluntary national curriculum that would
provide an effective standard for K-12 teachers to use as a resource.
Regrettably, many States have set standards for math and science
education at an abysmally low level. A Fordham report entitled ``The
State of State Science Standards 2005'' found that nearly half of the
States are doing a poor job of setting academic standards for science.
The result of low State standards is that States think their students
are passing, teachers think their students are passing, and students
think they are passing when they in fact are not. For example, a review
of 12 diverse States by a team at the University of California at
Berkeley found that the typical State reports that 77 percent of its
fourth graders are proficient in mathematics as assessed by the State
standard, while just 36.5 percent of fourth grade students in the
typical State score as proficient in mathematics as assessed by the
gold-standard National Assessment of Education Progress. Lowering
academic standards does not adequately prepare our students to meet the
demands of the global economy.
The Mathematics and Science Consistency Act will help States raise
standards and invest in high-quality teaching through the collection of
best practices and ensure that a world-class curriculum is available.
Under my bill, it is entirely up to States whether to adopt the
recommendations of the panel. States that do would be eligible for
grants to acquire instructional materials, to make those materials
available online and free to teachers and school staff, and to train
teachers to effectively use the instructional materials.
Again, I want to emphasize that this bill provides assistance to
States that wish to work together to ensure that all children are
taught a rigorous, common curriculum. The Mathematics and
[[Page S8809]]
Science Consistency Act would implement the final recommendation made
in the Gathering Storm report, and it will help ensure that our
children are prepared to compete with success in the 21st century.
It is high time to do what is best for our children and their
economic future. I am hopeful that my Senate colleagues from both sides
of the aisle will join me today to move this legislation to the floor
without delay.
______
By Mr. MARTINEZ:
S. 3792. A bill to amend the Internal Revenue Code of 1986 to allow a
credit against tax for qualified elementary and secondary education
tuition; to the Committee on Finance.
Mr. MARTINEZ. Mr. President, today I rise to discuss a bill that aims
to give America's children access to greater educational opportunities.
As history has taught us, advanced societies are always built on a
foundation of a few shared values--and education is a chief component
of that foundation.
For 21st century America to continue to lead the world, the leaders
of this great Nation of ours must remain committed to providing every
American child the opportunity to succeed in the classroom. A quality
education unlocks the doors that lead to bigger life opportunities. As
the axiom goes, knowledge is power [attributed to Sir Francis Bacon].
In addition, our educational system should be helping parents to make
better choices, not taking choices away from them.
That is why I am introducing the Tax and Education Assistance for
Children (TEACH) Act of 2006.
Representative Vito Fossella of New York has already introduced this
bill in the House of Representatives, where it has collected 34
cosponsors. Six of those cosponsors come from my home State of Florida.
Those cosponsors are Jeff Miller, Ginny Brown-Waite, Dave Weldon, John
Mica, Katherine Harris and Tom Feeney.
There is a good reason for this. In Florida and across America today,
our public schools are facing new and troubling challenges.
Many public schools are suffering from overcrowding, leading to a
myriad of problems such as teacher shortages, threats to campus
security, a lack of books, desks, and computers, to name a few. In this
country, known to the world as a ``land of opportunity,'' American
parents deserve better than to have their children suffer through a
failing school system.
We live in a consumer-driven society where numerous choices abound:
car or SUV, caffeinated or decaf, book in print or book on tape.
We live in a country where you can make airline reservations from a
portable electronic device, where a doctor can remotely assist in a
surgery from thousands of miles away, where we can power our homes with
Sun, wind, or water, and yet too often parents do not have a basic
choice for their children: public school or private school.
Many parents would like to send their children to a traditional
private, religious, or military school, however, they are often unable
to do so because of the high costs of such an endeavor.
Many middle-class parents make enough to take care of their families,
but not enough for their families to pick up and move to a better
school district or for them to send their children to a private school
where they are living.
As we know, it is the innate desire of parents to want to provide the
very best for their children. While public schools are the right choice
for tens of millions of American children each and every year, more
than 5 million American students currently attend private schools at
little or no cost to American taxpayers.
We want to help students reach their maximum potential. In this
country and around the globe, the best educated people are nearly
always the ones leading their respective communities forward.
This bill would establish a tax credit of up to $4,500 per family for
private elementary or secondary school tuition. Single parents would
also be eligible for the credit.
And because we always want to be responsible with how taxpayers'
money is spent, the tax credit is nonrefundable. To elaborate, this
means that if tuition is only three thousand dollars at a school,
families will only be able to deduct that amount.
This credit would pass along a small portion of taxpayer savings back
to the families that help generate it.
For all those middle-class and lower income families across America
who feel trapped, who feel as if they don't have the power to choose
what is best for their children and their educational needs, the TEACH
Act of 2006 will make it possible for them to choose the best learning
environment for their children.
It is also important to note that this bill does not institute a
voucher program. Instead, as a Federal income tax credit, it helps
families to have choices, while not detracting from the funding sources
needed to continue upkeep of and improvements in our public schools.
This bill would alleviate the financial burden on our public schools,
and thus allow schools to devote greater resources toward improving the
educational experience for all students.
And the American taxpayer should not worry that this bill will reduce
the funding for their child's school or for any other public school--it
won't. What it will do is increase the value of every child's
educational experience, be it in a public or private school.
According to the U.S. Census Bureau statistics from 2004, the cost of
educating a student in the public school system is close to $8,000 a
year. Multiplied out, this comes to a total savings of over $42 billion
a year for our public school systems.
If the millions of privately educated students in this country were
to be publicly educated, every taxpayer would have to bear that burden.
With this legislation, parents win because their children get the
best education possible and the American taxpayer wins because they owe
nothing more.
And where Florida is concerned, according to the aforementioned U.S.
Census Bureau statistics, approximately, $6,000 is spent annually per
public school student in the Sunshine State.
With more than 350,000 students attending private schools in Florida
annually, our State's taxpayers save $2.2 billion--and that savings can
benefit public schools.
The TEACH Act of 2006 would help to add to those savings.
America is an ownership society where people get to make choices
about how they spend their money and where they are going to spend it.
With a choice as important as where and how our children are
educated, we need to put more of the power in the hands of the parents.
While this is in no way comprehensive education reform, it is another
big step in the right direction.
I encourage my Senate colleagues to learn more about the TEACH Act
and to work with me to push through this legislation that will help our
children across America receive the education that they need.
Remember, if we do not continue to invest in our future today,
tomorrow will not show us the bright promise that it can. Let us carry
that promise home to more Americans today.
I ask unanimous consent that the text of the bill be printed in the
Record.
There being no objection, the text of the bill was ordered to be
printed in the Record, as follows:
S. 3792
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 ``Tax and Education Assistance
for Children (TEACH) Act of 2006''.
SEC. 2. CREDIT FOR QUALIFIED ELEMENTARY AND SECONDARY
EDUCATION TUITION.
(a) In General.--Subpart A of part IV of subchapter A of
chapter 1 of the Internal Revenue Code of 1986 (relating to
nonrefundable personal credits) is amended by inserting after
section 25D the following new section:
``SEC. 25E. QUALIFIED ELEMENTARY AND SECONDARY EDUCATION
TUITION.
``(a) Allowance of Credit.--There shall be allowed as a
credit against the tax imposed by this chapter for a taxable
year an amount equal to the qualified elementary and
secondary education tuition paid or incurred by the taxpayer
during the taxable year.
``(b) Dollar Limitation.--The amount allowed as a credit
under subsection (a) with
[[Page S8810]]
respect to the taxpayer for any taxable year shall not
exceed--
``(1) $4,500 in the case of a joint return,
``(2) $4,500 in the case of an individual who is not
married, and
``(3) $2,250 in the case of a married individual filing a
separate return.
``(c) Qualified Elementary and Secondary Education
Tuition.--
``(1) In general.--The term `qualified elementary and
secondary education tuition' means expenses for tuition which
are incurred in connection with the enrollment or attendance
of any dependent of the taxpayer with respect to whom the
taxpayer is allowed a deduction under section 151 as an
elementary or secondary school student at a private or
religious school.
``(2) School.--The term `school' means any school which
provides elementary education or secondary education
(kindergarten through grade 12), as determined under State
law.''.
(b) Clerical Amendment.--The table of sections for subpart
A of part IV of subchapter A of chapter 1 of such Code is
amended by inserting after the item relating to section 25D
the following new item:
``Sec. 25E. Qualified elementary and secondary education tuition.''.
(c) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2006.
______
By Mr. CRAPO:
S. 3794. A bill to provide for the implementation of the Owyhee
Initiative Agreement, and for other purposes; to the Committee on
Energy and Natural Resources.
Mr. CRAPO. Mr. President, I am pleased to introduce the Owyhee
Initiative Implementation Act of 2006, a bill which is the result of a
5-year collaborative effort between all levels of government, multiple
users of public lands, and conservationists to resolve decades of
heated land-use conflict in the Owyhee Canyonlands in the southwestern
part of my home State of Idaho.
This is comprehensive land management legislation that enjoys far-
reaching support among a remarkably diverse group of interests that
live, work and play in this special country.
Owyhee County contains some of the most unique and beautiful
canyonlands in the world and offers large areas in which all of us can
enjoy the grandeur and experience of untouched western trails, rivers,
and open sky. It is truly magical country, and its natural beauty and
traditional uses should be preserved for future generations.
Owyhee County is traditional ranching country. Seventy-three percent
of its land base is owned by the United States, and it is located
within an hour's drive of one of the fastest growing areas in the
nation, Boise, ID.
This combination of attributes, including location, is having an
explosive effect on property values, community expansion and
development and ever-increasing demands on public land. Given this
confluence of circumstances and events, Owyhee County has been at the
core of decades of conflict with heated political and regulatory
battles.
The diverse land uses co-exist in an area of intense beauty and
unique character. The conflict over land management is both inevitable
and understandable--how do we manage for this diversity and do so in a
way that protects and restores the quality of that fragile environment?
In this context, the Owyhee County Commissioners and several others
said ``enough is enough'' and decided to focus efforts on solving these
problems rather than wasting resources on an endless fight. In 2001,
The Owyhee County Commissioners, Hal Tolmie, Dick Reynolds and Chris
Salove met with me and asked for my help.
They asked whether I would support them if they could put together at
one table the interested parties involved in the future of the County
to try and reach some solutions. I told them that if they could get
together a broad base of interests who would agree to collaborate in a
process committed to problem-solving, I would dedicate myself to
working with them and if they were successful, I would introduce
resulting legislation. They agreed.
Together, we set out on a 5-year journey on a road that is as
challenging as any in the Owyhee Canyonlands. Sharp turns, steep
inclines and declines, big sharp rocks, deep ruts, sand burrs, dust and
a constant headwind is exactly what those of us who have worked so hard
on this have faced every day.
This is very difficult work and in speaking of difficult work, I want
to acknowledge the effort of my friend and colleague from Idaho,
Representative Mike Simpson, and the challenge he has taken on as he
advocates his Central Idaho Economic Development Act. I support his
work and his legislation.
The Commissioners appointed a chairman, an extraordinary gentleman,
Fred Grant. They formed the Work Group which included The Wilderness
Society, Idaho Conservation League, The Nature Conservancy, Idaho
Outfitters and Guides, the United States Air Force, the Sierra Club,
the county Soil Conservation Districts, Owyhee Cattleman's Association,
the Owyhee Borderlands Trust, People for the Owyhees, and the Shoshone
Paiute Tribes to join in their efforts. All accepted, and work on this
bill began.
As this collaborative process gained momentum, the county
commissioners expanded the Work Group to include the South Idaho Desert
Racing Association, Idaho Rivers United and the Owyhee County Farm
Bureau. Very recently, the commissioners have further expanded the
effort to include the Foundation for North American Wild Sheep and the
Idaho Backcountry Horsemen.
The commissioners also requested that the Idaho State Department of
Lands and the Bureau of Land Management serve, and those agencies have
provided important support.
This unique group of people chose to work without a professional
facilitator, preferring instead to deal with differences face-to-face
and together create new ideas. For me, one of the most gratifying and
emotional outcomes has been to see this group transform itself from
polarized camps into an extraordinary force that has become known for
its intense effort, comity, trust and willingness to work toward a
solution.
They operated on a true consensus basis, only making decisions when
there was no voiced objection to a proposal.
They involved everyone who wanted to participate in the process and
spent hundreds of hours discussing their findings, modifying
preliminary proposals and ultimately reaching consensus solutions. They
have driven thousands of miles inspecting roads and trails, listening
to and soliciting ideas from people from all walks of life who have in
common deep roots and deep interest in the Owyhee Canyonlands.
They sought to ensure that they had a thorough understanding of the
issues and could take proper advantage of the insights and experience
of all these people.
While this whole process and its outcomes are indeed remarkable, one
of the more notable developments is the Memorandum of Agreement between
the Shoshone Paiute Tribes and the County that establishes government-
to-government cooperation in several areas of mutual interest. I want
to particularly note the efforts and support of Mr. Terry Gibson,
Chairman of the Shoshone Paiute Tribes, a great leader and a personal
friend of mine.
All of these individuals and organizations have asked that I seek
Senate approval of their collaborative effort, built from the ground up
to chart their path forward.
The Owyhee Initiative transforms conflict and uncertainty into
conflict resolution and assurance of future activity. Ranchers can plan
for subsequent generations. Off-road vehicle users have access assured.
Wilderness is established. The Shoshone-Paiute Tribe knows its cultural
resources will be protected. The Air Force will continue to train its
pilots.
Local, state and Federal agencies will have structure to assist their
joint management of the region. And this will all happen within the
context of the preservation of environmental and ecological health.
This is indeed a revolutionary land management structure--and one that
looks ahead to the future.
Principal features of the legislation include:
Development, funding and implementation of a landscape-scale program
to review, recommend and coordinate landscape conservation and research
projects;
Scientific review process to assist the Bureau of Land Management;
Designation of Wilderness and Wild and Scenic Rivers;
Release of Wilderness Study Areas;
Protections of tribal cultural and historical resources against
intentional and unintentional abuse and desecration.
[[Page S8811]]
Development and implementation by the BLM of travel plans for public
lands;
A board of directors with oversight over the administration and
implementation of the Owyhee Initiative.
This can't be called ranching bill, or a wilderness bill, or an Air
Force bill, or a tribal bill. It is a comprehensive land management
bill.
Each interest got enough to enthusiastically support the final
product, advocate for its enactment, and, most importantly, support the
objectives of those with whom they had previous conflict.
Opposition will come from a few principal sources: those who simply
don't want to have wilderness designated; those who don't want
livestock anywhere on public land; and, those who do not want to see
collaboration succeed. While I respect that opposition, I prefer to
move forward in an effort that manages conflict and land, rather than
exploit disagreements.
The status quo is unacceptable. The Owyhee Canyonlands and its
inhabitants, including its people, deserve to have a process of
conflict management and a path to sustainability. The need for this
path forward is particularly acute given that this area is an hour's
drive from one of the nation's most rapidly-growing communities. The
Owyhee Initiative protects water rights, releases wilderness study
areas and protects traditional uses.
I commend the commitment and leadership of all involved. We have
established a long-term, comprehensive management approach. It's been
an honor for me to work with so many fine people and I will do
everything in my power to turn this into law.
The Owyhee Initiative sets a standard for managing and resolving
difficult land management issues in our country. After all, what better
place to forge an historical change in our approach to public land
management, than in this magnificent land that symbolizes livelihood,
heritage, diversity, opportunity and renewal?
And with that, I would like to recognize and thank the people who
have been the real driving force behind this process: Fred Grant,
Chairman of the Owyhee Initiative Work Group, his assistant Staci
Grant, and Dr. Ted Hoffman, Sheriff Gary Aman, the Owyhee County
Commissioners: Hal Tolmie, Chris Salova, and Dick Reynolds and Chairman
Terry Gibson of the Shoshone Paiute Tribes. I am grateful to Governor
Jim Risch of the Great State of Idaho for all of his support.
Thanks to: Colonel Rock of the United States Air Force at Mountain
Home Air Force Base, Craig Gherke and John McCarthy of The Wilderness
Society, Rick Johnson and John Robison of the Idaho Conservation
League, Inez Jaca representing Owyhee County, Dr. Chad Gibson
representing the Owyhee Cattleman's Association, Brenda Richards
representing private property owners in Owyhee County, Cindy and Frank
Bachman representing the Soil Conservation Districts in Owyhee County,
Marcia Argust with the Campaign for America's Wilderness, Grant Simmons
of the Idaho Outfitters and Guides Association, Bill Sedivy with Idaho
Rivers United, Tim Lowry of the Owyhee County Farm Bureau, Bill Walsh
representing Southern Idaho Desert Racing Association, Lou Lunte and
Will Whelan of the Nature Conservancy for all of their hard work and
dedication. I'd also like to thank the Idaho Back Country Horseman, the
Foundation for North American Wild Sheep, Roger Singer of the Sierra
Club, the South Board of Control, and the Owyhee Project managers, and
all the other water rights holders who support me today. This process
truly benefited from the diversity of these groups and their
willingness to cooperate to reach a common goal.
The Owyhee Canyonlands and its inhabitants are truly a treasure of
Idaho and the United States; I hope you will join me in ensuring their
future.
It is my honor and privilege to introduce this legislation today to
protect and preserve this tremendous part of Idaho and the people who
live there.
______
By Mr. SMITH (for himself, Mr. Rockefeller, Mr. Isakson, Mr.
DeWine, Mr. Burr, Mr. Bingaman, Ms. Stabenow, and Mr.
Menendez):
S. 3795. A bill to amend title XVIII of the Social Security Act to
provide for a two-year moratorium on certain Medicare physician payment
reductions for imaging services; to the Committee on Finance.
Mr. ROCKEFELLER. Mr. President, I rise today with my friend and
colleague from Oregon, Senator Smith, to introduce the Access to
Medicare Imaging Act of 2006. This legislation would require a 2-year
moratorium on the imaging cuts enacted as part of the Deficit Reduction
Act, pending the outcome of a comprehensive study of Medicare imaging
utilization and payment by the Government Accountability Office, GAO.
Each year, millions of Medicare patients receive medical imaging
services, including x-rays, CT-scans, MRIs, and PET scans, to name just
a few. Imaging devices allow doctors to more accurately diagnose and
treat a wide range of human conditions, and patients who receive
imaging services enjoy the peace of mind that comes from more precise
diagnoses of disease. It would not be an overstatement to say that
medical imaging has revolutionized the manner in which physicians
practice medicine and the manner in which patients receive health care.
The widespread use of digital imaging equipment allows providers to
easily exchange images across the Internet, facilitating greater and
more timely physician consultation and, most people believe, improving
the quality of care received by the patient. This same technology
allows greater access to radiology professionals across the country for
individuals living in rural and other medically underserved areas,
which is a big deal in West Virginia.
Consider, if you will, Braxton Memorial Hospital in the small town of
Gassaway in central West Virginia. Braxton Memorial is a remote,
critical access hospital without the services of a radiologist. Because
of imaging technology, trained medical staff at Braxton Memorial can
take a digital x-ray and, within minutes, send a precise copy to a
major medical facility in Charleston. There, it is read by a
radiologist, who then returns a written report by e-mail. A few years
back this was still science fiction, but now it happens every hour of
every day across the country.
As incredible as these services may seem and as important as they are
to the practice of effective clinical medicine, there is a perception
that imaging services also come with an increased cost. Over the past
few years, the use of imaging services by Medicare beneficiaries has
increased significantly. In fact, MedPAC reported in March 2005 that
imaging grew at twice the rate of all other physician fee schedule
services between 1999 and 2003. During that time, MRI and CT procedures
increased by 15 percent to 20 percent per year on their own.
In addition to rising costs, MedPAC further reinforced ongoing
concerns about potential overuse of imaging services and the sudden
increase of outpatient-based imaging in primary care settings. Citing a
lack of training and implementation of imaging guidelines, MedPAC
called upon Congress to direct the Secretary of Health and Human
Services to define and execute such standards.
Given the MedPAC report, imaging reimbursement became an easy budget
target during the reconciliation debate last year. I am concerned,
however, that the $8 billion in imaging cuts were prematurely added to
the Deficit Reduction Act. I believe these cuts were arbitrarily
determined in order to meet a budget target and were not based on sound
public policy. I am also very concerned about the impact these cuts
will have on the imaging profession and on Medicare beneficiaries'
access to imaging services.
We should not put the health of our seniors at risk in order to
achieve an arbitrary budget target. So today I join Senators Smith,
Bingaman, Isakson, Stabenow, DeWine, Menendez, and Burr in calling for
a 2-year delay of these cuts so that a comprehensive GAO study can be
completed. A thorough GAO analysis of Medicare reimbursement for
imaging services will provide greater insight into this important field
of medical practice and help inform our decisions going forward. I urge
my colleagues to join with us in supporting this timely legislation.
[[Page S8812]]
Mr. President, I ask unanimous consent that the text of the bill be
printed in the Record.
There being no objection, the text of the bill was ordered to be
printed in the Record, as follows:
S. 3795
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 ``Access to Medicare Imaging
Act of 2006''.
SEC. 2. TWO-YEAR MORATORIUM ON CERTAIN MEDICARE PHYSICIAN
PAYMENT REDUCTIONS FOR IMAGING SERVICES.
(a) Moratorium.--Subsections (b)(4)(A) and (c)(2)(B)(v)(II)
of section 1848 of the Social Security Act (42 U.S.C. 1395w-
4), as added by section 5102(b) of the Deficit Reduction Act
of 2005, are each amended by striking ``2007'' and inserting
``2009''.
(b) GAO Study and Report on Imaging Services Furnished
Under the Medicare Program.--
(1) Study.--The Comptroller General of the United States
shall conduct a comprehensive study on imaging services
furnished under the Medicare program.
(2) Report.--Not later than 1 year after the date of
enactment of this Act, the Comptroller General shall submit
to Congress and the Secretary of Health and Human Services a
report on the findings and conclusions of the study conducted
under paragraph (1) together with recommendations for such
legislation and administrative actions as the Comptroller
General considers appropriate.
______
By Mrs. CLINTON (for herself and Mr. Johnson):
S. 3797. A bill to establish demonstration projects to provide at-
home infant care benefits; to the Committee on Health, Education,
Labor, and Pensions.
Mrs. CLINTON. Mr. President, I am pleased to introduce today
legislation to provide parents new options to balance family and work.
The reality of today's economy is that most parents must work to
provide economic security for their families--a reality that is
particularly true when a new baby is welcomed into the family. In fact,
55 percent of women with infants younger than one year of age work. As
a result, working parents face the challenge of providing economic
security for their family while simultaneously ensuring that their
infant receives the quality care that he or she needs.
Research shows that the quality of caretaking in the first months and
years of life is critical to a newborn's brain development, social
development and well-being. Yet there is currently a severe shortage of
safe, affordable, quality care for infants. The number of licensed
child care slots for infants meets only 18 percent of the need. The
shortage is particularly acute in rural areas, and especially in rural
areas that have many low-income residents.
In the ideal circumstance, I think we would all agree, parents who
need affordable, high-quality care for their infant would provide that
care themselves. Unfortunately, in many low- and moderate-income
families, having a parent quit his or her job or reduce work hours to
care for an infant is not financially viable. Doing so would plunge the
family into an economic crisis. Rather, parents should have the choice
of using a state child care subsidy to obtain infant care outside the
home or of keeping the subsidy so they can stay home and care for their
child themselves without risking their family's financial security.
The Choices in Child Care Act of 2006 would provide parents this
choice. The bill amends the child care development block grant, CCDBG,
so that low- and moderate-income parents have the option of forgoing a
State childcare subsidy for infant care outside the home and instead
receiving a comparable stipend to provide the care themselves while
keeping the family economically stable. Providing support for at-home
infant care would give thousands of working families the help they need
to balance work and care for their infant children. The bill would also
help meet the critical shortage of infant childcare, provide cost
savings to state child care programs, support quality care for the
critical first years of a child's development, and value parenting as a
form of work.
The time has come for us to recognize the challenges facing families
today and give parents additional resources and options to address
those challenges. I urge my colleagues to join me in supporting the
Choices in Child Care Act of 2006.
______
By Mrs. FEINSTEIN:
S. 3798. A bill to direct the Secretary of the Interior to exclude
and defer from the pooled reimbursable costs of the Central Valley
Project the reimbursable capital costs of the unused capacity of the
Folsom South Canal, Auburn-Folsom South Unit, Central Valley Project,
and for other purposes; to the Committee on Energy and Natural
Resources.
Mrs. FEINSTEIN. Mr. President, I rise today to introduce a bill that
is based on the simple fairness principle that you should pay for what
you get, no more and no less. In this case California water districts
have been paying for years for conveyance capacity on the Folsom South
Canal that they do not use.
This bill would direct the Secretary of the Interior to exclude and
defer from the pooled, reimbursable costs of California's Central
Valley Project, CVP, the capital costs of the unused capacity of the
Folsom South Canal. Congressman Lungren has introduced similar
legislation in the House of Representatives.
In 1970, two CVP contractors signed contracts with the Bureau of
Reclamation to take water from the Folsom South Canal, which had yet to
be built. The canal diverts water out of Lake Natomas, a regulating
reservoir immediately downstream of Reclamation's Folsom Reservoir, to
areas in southern Sacramento County.
The canal was originally designed to incorporate five ``reaches''--or
sections--and deliver water to southern Sacramento County, San Joaquin
County, and to the San Francisco Bay area. Because the planned East
Side Division irrigation project was never constructed, the anticipated
deliveries through the Folsom South Canal never materialized. Only two
reaches of the canal were constructed, and those are dramatically
overbuilt. In a departure from normal reclamation policy, which
dictates that signed contracts are required prior to construction of
projects, signed contracts were not obtained.
The canal was built with the capacity to deliver 2.5 million acre-
feet of water per year, but the only entity currently diverting water
through the canal--the Sacramento Municipal Utility District, SMUD--has
only diverted a maximum of 20,000 acre-feet per year. In short, a
significantly oversized canal has been used to deliver a very small
quantity of water.
Under reclamation policy, the agency allocates the capital costs of
the canal to the pool of all CVP municipal and industrial water--M&I--
users regardless of whether they divert water through the Folsom South
Canal. There are 32 M&I customers that are paying for the canal,
including SMUD, Sacramento County Water District, East Bay MUD, Santa
Clara Valley Water District and Contra Costa Water District. Today,
only SMUD diverts any water through the canal, albeit only about 8
percent of the canal's capacity; the other customers have little or no
benefit to the project that they fund. This inequity is difficult to
explain to ratepayers that are already burdened with replacing aging
infrastructure and upgrading water treatment technologies.
My legislation would direct the Secretary of the Interior to exclude
and defer from those pooled reimbursable costs of the CVP, the costs of
the unused capacity of the Folsom South Canal. While final deferral
calculations will be performed by reclamation as directed by this bill,
it is estimated that this bill will result in a deferral of
approximately $35 million excess capacity costs.
The concept of deferring costs is not unique to the Folsom South
Canal. Congress has authorized deferrals for other elements of the CVP
and in other reclamation projects. Even though there are many instances
where customers pay for unused capacity, there are no instances that
come close to approaching the absurd inequity of being forced to pay
for a canal that is producing 8 percent of what reclamation promised it
would deliver.
Should the amount of CVP water conveyed through the Folsom South
Canal change in the future, this bill includes a provision directing
Interior to review the change and adjust the deferred costs accordingly
for unused capacity.
[[Page S8813]]
I strongly believe this deferral is the correct approach to this
issue. Reclamation made the decision to oversize this canal based on
future planned expansions--expansions that did not materialize. The
water districts that use the existing canal for limited conveyances
should not pay for the consequences of public policy decisions that
resulted in a significantly oversized canal. Water districts should pay
for the canal conveyance capacity that they use--I think this is a
fairness principle that we can all accept.
I ask unanimous consent that the text of the bill be printed in the
Record.
There being no objection, the text of the bill was ordered to be
printed in the Record, as follows:
S. 3798
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. CERTAIN AMOUNTS EXCLUDE AND DEFER FROM THE POOLED
REIMBURSABLE COSTS RELATED TO THE CENTRAL
VALLEY PROJECT.
(a) In General.--The Secretary of the Interior (referred to
in this section as the ``Secretary'') shall exclude and defer
from the pooled reimbursable costs of the Central Valley
Project the reimbursable capital costs of the unused capacity
of the Folsom South Canal, Auburn-Folsom South Unit, Central
Valley Project.
(b) Calculation of Amount of Deferred Use.--The Secretary
shall calculate the amount to be assigned to deferred use as
soon as practical and such shall be reflected in future
years' water rates.
(c) Calculation of Capital Costs.--For the purpose of
calculating the excluded reimbursable cost for the Folsom
South Canal facility, the Secretary shall multiply the
existing total reimbursable cost for the facility by a
factor, to be determined by dividing the current minimum
unused conveyance capacity of the canal by the original
design conveyance capacity of the canal. The minimum unused
conveyance capacity of the canal shall--
(1) be determined by the Secretary;
(2) be based upon actual historic measured flows in the
canal and planned future flows; and
(3) include the amount of Central Valley Project water that
was originally conveyed or was historically projected to be
conveyed through the Folsom South Canal which may have been
contractually assigned to another entity.
(d) Review and Adjustment.--The Secretary shall review and
adjust--
(1) the amount described in subsection (b)(3) as
appropriate and recalculate the amount of such unused
capacity of the Folsom South Canal; and
(2) the amount of reimbursable capital costs of the Folsom
South Canal.
(e) Conveyance of Certain Water.--So long as an entity that
is allocated and that pays capital, interest, and operation
and maintenance costs associated with an amount of Central
Valley Project water historically assigned to the Folsom
South Canal does not use the Folsom South Canal for the
conveyance of Central Valley Project water, that entity shall
be entitled, without additional cost, to convey up to an
equivalent amount of non-Central Valley Project water through
the Folsom South Canal.
______
By Mr. SMITH (for himself and Mr. Kennedy):
S. 3801. A bill to support the implementation of the Darfur Peace
Agreement and to protect the lives and address the humanitarian needs
of the people of Darfur, and for other purposes; to the Committee on
Foreign Relations.
Mr. SMITH. Mr. President, I rise today to introduce the Peace In
Darfur Act of 2006, along with my distinguished colleague from
Massachusetts, Senator Kennedy. Our intention is to continue to press
the Sudanese Government and rebel groups to honor the Abuja peace
agreement reached on May 5 in Nigeria. We hope that this legislation
will help bring about peace in the region.
Mr. President, I will ask animous consent to have printed in the
Record the following letters from the Hebrew Immigrant Aid Society, the
American Jewish Committee and the Archdiocese of Portland, OR.
Tragically, despite the Abuja peace agreement, the conflict in the
Darfur region of Sudan has continued unabated throughout this spring
and summer. The Janjaweed, a government supported militia, continues to
attack innocent citizens and the government is unable, or unwilling, to
stop this brutality.
This violence has led to an increasingly--dire humanitarian
situation. More then 3 million people are dependent upon humanitarian
assistance. Imagine the entire state of Oregon, which has three and a
half million citizens, dependent upon humanitarian aid. This is what we
face in Darfur today.
I commend the Bush administration for the work it has done in
bringing about the Abuja peace agreement. America has been
extraordinarily generous in providing over $1 billion worth of
humanitarian assistance to those suffering in the region. Yet more must
be done to bring an end to the conflict and give the Sudanese people a
chance to live a normal life.
The Peace in Darfur Act of 2006 seeks to increase the prospect of
full implementation of the Abuja peace agreement and address the unmet
humanitarian needs in Darfur. The bill supports the deployment of a
United Nations peacekeeping force to Darfur, intensifying the
international pressure on the Government of Sudan to comply with the
agreement and allow in U.N. peacekeepers. This bill also codifies
existing sanctions and calls for additional targeted sanctions on
Sudan's leaders.
While the African Union Mission in Sudan has performed admirably
under difficult conditions, a stronger force must be deployed to
provide stability, allow refugees to return to their homes, and restore
some semblance of normalcy to those affected by the fighting. Section 4
of our legislation calls upon the Government of Sudan to allow a United
Nations peacekeeping force into Darfur to achieve these important
objectives.
Section 4 of our legislation also assigns the special envoy for
Sudan, authorized in the fiscal year 2006 supplemental appropriations
bill, the task of supporting the peace process. The urgency of this
situation demands a constant level of attention at the highest level of
our government, a task that the special envoy can facilitate.
Section 5 of the bill codifies sanctions against Sudan that were
imposed by Executive Order 13067. Codifying these sanctions will send a
strong message to the Sudanese government that signing the peace
agreement is not sufficient--we expect their full compliance and
cooperation to bring about a peaceful resolution to the ongoing
conflict.
Section 6 of the bill requires the State Department to issue a report
on the implementation of the Darfur Peace Agreement and a description
of the humanitarian crisis. It also calls for the President to report
on the international community's efforts to support the peace process
and address humanitarian shortfalls. I believe this will hold
accountable those countries that are actively undermining the peace
agreement.
If the President certifies that the Government of Sudan is
implementing the peace agreement and has agreed to allow the presence
of a U.N. peacekeeping mission, then the legislation requires the
President to request recommendations to further the peace process from
the special envoy for Sudan.
However, if the President finds the Sudanese Government is impeding
the peace process, the bill calls for the President to impose
additional measures against Sudan, including enacting targeted
sanctions on the Sudanese leadership and their immediate families.
Section 7 requires a State Department report on those companies
investing $5 million or more in Sudan. This information can then be
used to deter investment groups, retirement funds, and others from
investing in corporations doing business in Sudan. The legislation
requires the Department of the Treasury to issue a report summarizing
the assets of Sudanese leaders in the United States and elsewhere. This
report will give a full accounting of the Sudanese leaders' assets and
will allow the Department of the Treasury to take actions on these
assets.
Finally, section 8 of the legislation authorizes $150 million for
humanitarian needs in Darfur (fiscal years 2008-2012 to alleviate the
suffering of these needy people.
Mr. President, I am pleased that Senator Kennedy has joined me in
this effort. Our legislation is an important step in the efforts needed
to bring peace to the region. We hope that it will continue to focus
attention on the crisis and pressure the major actors to abide by the
Abuja peace agreement.
Mr. President, I ask unanimous consent that the letters to which I
referred earlier by printed in the Record.
[[Page S8814]]
There being no objection, the material was ordered to be printed in
the Record, as follows:
The American Jewish Committee,
Washington, DC, August 2, 2006.
Dear Senator: ``First they came first for the Communists,
and I did not speak out because I was not a Communist. Then
they came for the Socialists, and I did not speak out,
because I was not a Socialist; Then they came for the trade
unionists, and I did not speak out because I was not a trade
unionist. Then they came for the Jews, and I did not speak
out because I was not a Jew. Then they came for me, and there
was no one left to speak out for me.''
In 1945 Lutheran Pastor Martin Niemoller's voice echoed
around the globe as the world grieved over millions of lives
lost at the hands of genocide. Sixty years later, America
grieves as millions of innocent victims are being displaced,
raped, tortured, and murdered in the Darfur region of Sudan.
Pressure is mounting for the Sudanese government to end its
genocide. Over the past two years, Congress has allocated
more than $250 million to expand and strengthen the role of
the African Union Mission in Darfur and to provide additional
humanitarian disaster relief throughout the region. As the
nation's oldest human relations organization, the American
Jewish Committee applauds Congress' action in approving these
funds, but we believe that more must be done.
The fragile peace agreement reached in May now seems
shattered as fighting continues to rage throughout the
region. To halt the killing and displacement, civilians must
be protected, the peace agreement must be implemented, and a
secure environment must be established for the delivery of
humanitarian aid. As atrocities, crimes against humanity and
genocidal acts continue throughout the region, we urge you to
take further action toward protecting besieged Sudanese
civilians by supporting the Peace in Darfur Act.
The Peace in Darfur Act, introduced by Senators Gordon
Smith and Edward Kennedy, directs the President to appoint a
new special envoy to Sudan. The Special Envoy, in
collaboration with international partners, would be best
positioned to advance the Darfur peace process. The bill also
calls on the government of Sudan to allow a UN peacekeeping
force to enter Darfur; NATO to provide humanitarian,
logistical, and personnel support to the UN; NATO to enforce
the no-fly zone over Darfur; and the international community
to not only support the African Union Mission (AMIS) in
Sudan, but also to provide humanitarian assistance. The bill
also authorizes an additional $150 million in humanitarian
aid for Fiscal Years 2008-2012. Further, the bill mandates a
Presidential report on the situation in Darfur that will cast
new light on the Sudanese government's actions and provide a
basis to impose targeted sanctions if necessary.
On behalf of a community that has suffered persecution and
even genocide all too often in our history, we urge you to
support this crucial piece of legislation. The time to act is
now. History has demonstrated the price of standing idly by
in the face of such horrors.
Respectfully,
Richard T. Foltin,
Legislative Director and Counsel.
____
The Hebrew Immigrant Aid
Society,
New York, NY July 28, 2006.
Hon. Gordon Smith,
Senate Russell Office Building,
Washington, DC.
Hon. Edward M. Kennedy,
Senate Russell Office Building,
Washington, DC.
Dear Senator Smith and Senator Kennedy: I am writing on
behalf of the Hebrew Immigrant Aid Society (HIAS) to express
our strong support for the ``Peace in Darfur Act of 2006.''
For over 125 years, HIAS has helped millions of people
fleeing persecution and poverty through rescue, resettlement
and reunion. The Jewish tradition's emphasis on refugee
protection and our community's experience with the trauma of
genocide and refugee flight make what's happening in Darfur
an issue of primary concern for the Jewish community. We
therefore applaud this bill for taking concrete steps to
alleviate the inconceivable suffering and hardship that so
many innocent Sudanese have endured in the past three years.
Specifically, we are pleased that this bill authorizes $150
million in additional funding to help meet tbe unmet
humanitarian needs in Darfur. With an office in eastern Chad
and programs in three refugee camps, HIAS has seen first-hand
the dire consequences when the basic necessities of life,
including food, water, and health services, are not met. In
June 2005, HIAS launched the Initiative for Sudanese Refugees
in Chad, which is intended to strengthen the refugees'
psychological and social conditions and to convey skills
needed to survive and function in the aftermath of extreme
violence. Re-acquisition of these basic skills is crucial to
break the chain of dependence and suffering caused by severe
psychological trauma. By allocating additional funding to
provide such basic necessities as food and water, this bill
will help remove yet another hurdle to the Darfuri refugees'
ability to support themselves and regain control over their
lives and well-being.
The Jewish community, knowing all too well what results
when genocide is met with silence and inaction, has
aggressively denounced the genocide in Darfur and called on
the U.S. Government to do more in response. By requiring the
Administration to take several important actions, including
appointing a Special Envoy for Sudan, the ``Peace in Darfur
Act of 2006'' is a significant and vital bill that should be
supported by all Members of Congress. To us, ``never again''
is more than just a quote--it is a mandate.
Sincerely,
Gideon Aronoff,
CEO and President.
____
Archdiocese of Portland in Oregon,
Portland, OR, July 31, 2006.
Sen. Gordon Smith,
Portland, OR.
Dear Senator Smith: Thank you for the opportunity to
comment on the draft legislation ``Supporting Peace and
Alleviating Suffering in Darfur'' that you are co-authoring
with Senator Kennedy. The continuing violence and atrocities
being committed in Darfur are tragic and deplorable. As
people of faith we are compelled to do everything in our
power to protect the lives and dignity of the victims. I
deeply appreciate your leadership on this issue, and in
particular your continuing efforts to introduce legislation
in the U.S. Senate.
Archbishop Vlazny wrote that people of faith must
demonstrate a willingness ``to go beyond our own boundaries
to serve those in need and to work for global justice and
peace. Ours is a shrinking and suffering world. Every once in
a while a particular need in some corner of today's world
becomes so acute that, for a time, it serves as the unique
moral test of our society with respect to our care for the
weakest among us . . . The Khartoum government has the
greatest responsibility [for the violence and harassment
directed against the Fur Zagahawa and Masaalite black African
ethnic groups by the Janjaweed] and must be pressured to do
what it can to bring an end to the conflict. We continue to
urge the United Nations and our own government to apply that
pressure.'' (Catholic Sentinel, August 26, 2004)
Even though the atrocities being committed against the
population of Darfur were declared to be genocide by the
international community in July 2004, the violence has
continued unabated. It is clear that much more intensive and
sustained engagement is required of the international
community.
In May 2006, the Sudanese Government of National Unity and
the Sudan Liberation Movement signed the Darfur Peace
Agreement. Bishop Wenski, Chairman of the U.S. Conference of
Catholic Bishops Committee on International Policy, said the
peace accord ``will open the way for the United States to
hold the Sudanese government to its promise of allowing the
African Union peacekeeping force (AMIS) to be transformed
into a more robust and mobile UN mission with a strong
mandate. It is essential to strengthen significantly the
presence and responsiveness of peacekeeping forces in Darfur,
both to guarantee implementation of the peace agreement and
to win the confidence of the people.''
In answer to the Gospel's call to protect human life and
dignity, the U.S. Conference of Catholic Bishops joined the
Save Darfur Coalition, an alliance of over 150 faith-based,
humanitarian, and human rights organizations that organized
the Million Voices for Darfur Campaign, in calling upon our
leaders to no longer remain silent in the face of the
killings, rape and wanton destruction occurring daily in
Darfur.
The specific actions that were requested included:
(1) Retain urgently needed funding for humanitarian relief
in the FY 2006 Emergency Supplemental Appropriations bill.
(2) Pressure the government in Khartoum to disarm the
warring factions, cease all attacks against innocent
civilians, provide unimpeded humanitarian access and bring to
justice those perpetrating crimes against humanity.
(3) Pressure both the government and the rebels to respect
the existing ceasefire agreement and to intensify the search
for a durable peace during ongoing negotiations in Abuja,
while simultaneously urging both Sudan and Chad to refrain
from any escalation that might lead to threatened
hostilities.
(4) Urge the U.S. to use its voice in the U.N. Security
Council to ensure the continuation of the mandate of the
African Union in Darfur to monitor the ceasefire, protect
innocent civilians, and assist international humanitarian
relief organizations, while urging NATO to provide AMIS with
all possible logistical support until the transition to full-
fledged UN peacekeeping force can be completed.
(5) Hold the signatories to the Comprehensive Peace
Agreement fully accountable, and honor the promise to provide
substantial financial and political support to the government
of national unity to undertake the reconstruction of the
country and its civil society.
(6) Urge the U.N. Security Council to continue its support
for the peacekeeping mission that is working with all parties
to the
[[Page S8815]]
national-unity government to implement the peace accord. The
United States should provide adequate funding and logistical
support so that peace and security might be achieved.
The draft legislation that you have proposed (``Supporting
Peace and Alleviating Suffering in Darfur Act'', July 12,
2006 version) addresses these requested actions in a
comprehensive and thorough manner. We are deeply grateful
that you have demonstrated leadership on this issue and are
willing to take the necessary steps to protect the people of
Darfur from further harm. We join you in hoping that these
measures will be fully effective.
The events of the past few months demonstrate that
significant progress can be made with high level engagement
on the part of the U.S. Congress and Administration. Please
share our appreciation and gratitude with everyone who made
this initial step toward peace possible. We offer our full
support for continued and sustained leadership in the
difficult time ahead.
Sincerely,
David Carrier, Ph.D.,
Director, Office of Justice and Peace.
Mr. KENNEDY. Mr. President, Senator Smith and I have sent a bill to
the desk to address the heart-wrenching crisis in Darfur and support
the peace process there, and we look for its early consideration.
The horrifying violence in the Darfur region of Sudan was recognized
by Congress and the Bush administration as genocide over 2 years ago,
and it continues unabated today. However, rays of hope for peace can be
seen on the horizon. On May 5, the Government of Sudan and the main
rebel group, the Sudan Liberation Movement led by Minni Minnawi, agreed
to a plan that, if implemented, could bring peace to Darfur.
The plan calls for an immediate cease-fire and requires the
Government of Sudan to neutralize and disarm the Janjaweed militia, the
gunmen supported by the government who have been conducting a bloody
campaign to forcibly displace non-Arab tribes from Darfur.
The Darfur Peace Agreement is an opportunity we need to seize. To do
so, greater international pressure on the Sudanese government will be
required in order to improve the prospects of effective implementation.
Developments since its signing indicate that the present level of
international pressure isn't enough.
Three months have passed, but the Sudanese Government has done little
to take the most important step in the peace plan--disarming the
Janjaweed. Khartoum's past record is not encouraging. It has pledged to
disarm the Janjaweed on previous occasions but then failed to follow
through. This reluctance is not unexpected in light of the government's
cynical use of the Janjaweed to exercise power in the Darfur region.
In recent months, the violence in Darfur has spilled over into
neighboring Chad. The two governments each support armed groups opposed
to the other. Sudanese helicopters and planes attack innocent villagers
in Darfur, despite a United Nations order not to fly over Darfur.
The African Union Mission in Sudan, which has 7,000 peacekeepers in
Darfur, has made a valiant effort to provide security and assist the
people of Darfur. Nonetheless, the African Union peacekeepers are not
able even to defend themselves, much less the two million refugees and
internally displaced persons fleeing the violence. This mission is
obviously unprepared and ill-equipped to press for and verify the
implementation of the May 5 peace agreement.
Sudan appears to be waiting to see whether the international
community will again just lament the crisis and make hollow threats, or
is now ready and willing to take concrete steps. As one high-ranking
Sudanese Government official said to a Boston Globe reporter, ``The
United Nations Security Council has threatened us so many times, we no
longer take it seriously.'' It is time for the United States and the
international community to let the Sudanese Government know that this
time we expect Sudan to carry through on its commitments in the Darfur
Peace Agreement. Fortunately, the international community has already
taken initial actions to support the May 5 Peace Agreement. The African
Union and the United Nations are planning for the transfer of
peacekeeping responsibilities from the African Union to the United
Nations. In addition, NATO has begun planning on how to support a U.N.
peacekeeping mission, and the European Union hosted a conference in
July on assistance for Darfur.
Although the international community has signaled support for the
Darfur Peace Agreement, Khartoum has been dragging its heels. In
particular, it has not yet agreed to allow a U.N. peacekeeping mission
into Darfur. The international community must strengthen its effort to
persuade the Sudanese Government to comply with the agreement and
permit the U.N. peacekeepers in Darfur.
One of the tragic outcomes of the Darfur violence is an alarming
humanitarian crisis. More than 3 million people in Darfur are dependent
on humanitarian assistance for survival. The violence in Darfur has
forced millions to flee from their homes. The U.N. Office for the
Coordination of Humanitarian Assistance reports that significant needs
for health, food and water, and sanitation are not being met in Darfur.
The World Food Program warns of a $400 million shortfall in the funds
it now has for Sudan. Because of the shortages in food relief, the
refugees are receiving only partial rations.
The children suffer most. One in four children in Darfur die before
the age of five. The most needy frequently remain hidden, because
insecurity in the region prevents them from making the dangerous trip
to international relief centers.
The United States has been the largest single donor of humanitarian
assistance to the people of Darfur, and we must continue our effort in
order to give the people of the region much-needed aid. We must do more
to encourage the international community to do so as well.
Sadly, the continuation of violence in the region has severely
hindered humanitarian aid efforts. In the past 6 months, aid groups in
eastern Chad have lost 26 vehicles to armed hijackers. One UNICEF
worker was shot and nearly killed. It is unfair to put relief agencies
in a situation where they must either risk having their aid workers
murdered or raped, or pull out and leave thousands in Darfur to die.
U.N. Secretary General Kofi Annan said of this crisis, ``Giving aid
without protection is like putting a Band-Aid on an open wound.''
To give peace the best chance of taking hold, peace, the Sudanese
Government must be persuaded to implement its commitment to neutralize
and disarm the Janjaweed. The Sudanese can be influenced by what the
rest of the world does. Sudan is not an isolated, remote land. It is
the largest country in Africa, and has significant economic and
political ties to the rest of Africa and the world.
Now is the time for the United States, in concert with other
countries, to act on Darfur. This is why Senator Smith and I have
introduced legislation to urge the Sudanese parties to honor their
commitment in the peace accord. The bill also helps to address the
unmet humanitarian needs in Darfur.
At its core, the legislation is intended to encourage greater
international pressure on the Government of Sudan to fulfill its
obligations in the peace agreement and to allow U.N. peacekeepers into
Darfur.
In preparing this legislation, we have worked closely with the NGO
community of experts. Groups such as the International Crisis Group,
Refugees International, Save Darfur Coalition, the Hebrew International
Aid Society, the American Jewish Committee, the American Jewish World
Service, and Physicians for Human Rights have endorsed it. I will ask
that the letters of endorsements that I have submitted be printed in
the Record.
The legislation assigns to the Presidential envoy for Sudan the
responsibility for supporting the Darfur peace process and, together
with the international community, to press the Sudanese parties to
implement the agreed-upon ceasefire and disarm the Janjaweed militia.
It calls on the Government of Sudan to immediately allow a U.N.
peacekeeping force to enter Darfur and to implement the Darfur Peace
Agreement.
It calls on NATO to enforce the no-fly zone over Darfur, if requested
by the U.N., and to provide airlift, and logistical and intelligence
support to the peacekeepers.
It calls on the international community to act promptly to meet the
outstanding humanitarian assistance
[[Page S8816]]
needs. We must do our part too. The legislation authorizes $150 million
in additional funds for each of the next 5 fiscal years to meet these
needs.
Under the legislation, the President will report on whether the
Sudanese Government is implementing the peace agreement and has agreed
to allow a U.N. peacekeeping mission to enter Darfur. If so, then the
Presidential special envoy for Sudan will be requested to develop
recommendations to advance the peace process. If the Sudanese
Government refuses, then the President will impose sanctions targeted
on the leaders of Sudan, urge the international community to do the
same, and continue to oppose normalization of its relations with Sudan.
In addition, the bill requires reports from the Commerce Department
identifying companies investing $5 million or more in Sudan and a
listing of the assets of Sudanese leaders in the United States and
elsewhere.
With so much other violence erupting in the world, we must not ignore
the crisis in Darfur. Without international action, the genocide will
go on. The Sudanese Government will balk or move slowly on disarming
the Janjaweed and bringing an end to the violence. Experts estimate
that since the conflict in Darfur began in 2004, up to 300,000 people
have been killed, and an estimated 1.9 million have been displaced.
Every day that we fail to act, those shameful numbers will increase.
I urge my colleagues to support this legislation.
Mr. President, I ask unanimous consent that the letters to which I
referred be printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
International Crisis Group,
Washington, DC, August 1, 2006.
Hon. Edward Kennedy,
Russell Senate Building,
Washington DC.
Dear Senator Kennedy: The International Crisis Group
strongly supports the Peace in Darfur Act of 2006, which you
are co-sponsoring with Senator Smith.
For the past 2 years, Crisis Group has advocated for tough
legislation to address the ongoing atrocities in Darfur,
Sudan. Last year, we endorsed the Darfur Accountability Act
(HR 1424) and the Darfur Peace and Accountability Act (HR
3127). The Peace in Darfur Act complements previous
legislation by calling explicitly for the U.S. to do the
following: name a special envoy and lead multilateral
efforts; increase pressure on the government of Sudan to
allow the deployment of a robust UN peace support mission
under Chapter VII of the UN Charter; and encourage non-
signatories to sign the Darfur Peace Agreement by addressing
its inadequacies.
Congressional action has been crucial in providing life-
saving humanitarian assistance to millions of conflict-
affected civilians in Darfur and in supporting African
peacekeepers, but the situation remains critical. Concerted
pressure on the government of Sudan, including U.S. support
for the work of the International Criminal Court, is vital to
hold perpetrators of atrocities accountable and to ensure
that UN forces are deployed to protect civilians.
Yours sincerely,
Mark L. Schneider,
Senior Vice President.
____
Refugees International,
Washington, DC, August 1, 2006.
Hon. Edward Kennedy,
U.S. Senate,
Russell Senate Office Building,
Washington, DC.
Dear Senator Kennedy: I am writing in support of the Peace
in Darfur Act of 2006, which you and Sen. Smith are co-
sponsoring. This important piece of legislation keeps the
pressure on the government of Sudan and other parties to
honor and implement the Darfur Peace Agreement. It recognizes
the need to support the African Union force (AM IS) while
moving toward a UN force in Darfur, and it calls for the
continuation of necessary humanitarian aid.
Last week I returned from Darfur, where death, displacement
and suffering are continuing, despite the signing of the
Darfur Peace Agreement on May 5th. Based on talks with
internally displaced people, rebel leaders, Sudanese
government officials, civil society leaders, diplomats and UN
officials, it is clear to me that the U.S. must keep the
pressure on the government of Sudan to disarm the Janjaweed
militia and work for peace. The appointment of a presidential
envoy will give the U.S. more leverage and focus in its
efforts to promote peace in Darfur.
Please ask your office to contact me if I can be of further
assistance in supporting the Peace in Darfur Act of 2006.
Sincerely,
Kenneth H. Bacon,
____
President.
Hebrew Immigrant Aid Society,
New York, NY, July 28, 2006.
Hon. Gordon Smith,
Senate Russell Office Building,
Washington, DC.
Hon. Edward M. Kennedy,
Senate Russell Office Building,
Washington, DC.
Dear Senator Smith and Senator Kennedy: I am writing on
behalf of the Hebrew Immigrant Aid Society (HIAS) to express
our strong support for the ``Peace in Darfur Act of 2006.''
For over 125 years, HIAS has helped millions of people
fleeing persecution and poverty through rescue, resettlement
and reunion. The Jewish tradition's emphasis on refugee
protection and our community's experience with the trauma of
genocide and refugee flight make what's happening in Darfur
an issue of primary concern for the Jewish community. We
therefore applaud this bill for taking concrete steps to
alleviate the inconceivable suffering and hardship that so
many innocent Sudanese have endured in the past three years.
Specifically, we are pleased that this bill authorizes $150
million in additional funding to help meet the unmet
humanitarian needs in Darfur. With an office in eastern Chad
and programs in three refugee camps, HIAS has seen first-hand
the dire consequences when the basic necessities of life,
including food, water, and health services, are not met. In
June 2005, HIAS launched the Initiative for Sudanese Refugees
in Chad, which is intended to strengthen the refugees'
psychological and social conditions and to convey skills
needed to survive and function in the aftermath of extreme
violence. Re-acquisition of these basic skills is crucial to
break the chain of dependence and suffering caused by severe
psychological trauma. By allocating additional funding to
provide such basic necessities as food and water, this bill
will help remove yet another hurdle to the Darfuri refugees'
ability to support themselves and regain control over their
lives and well-being.
The Jewish community, knowing all too well what results
when genocide is met with silence and inaction, has
aggressively denounced the genocide in Darfur and called on
the U.S. Government to do more in response. By requiring the
Administration to take several important actions, including
appointing a Special Envoy for Sudan, the ``Peace in Darfur
Act of 2006'' is a significant and vital bill that should be
supported by all Members of Congress. To us, ``never again''
is more than just a quote--it is a mandate.
Sincerely,
Gideon Aronoff,
CEO and President.
____
The American Jewish Committee,
Washington, DC, August 2, 2006.
Dear Senator:
``First they came first for the Communists, and I did not
speak out because I was not a Communist. Then they came for
the Socialists, and I did not speak out, because I was not a
Socialist; Then they came for the trade unionists, and I did
not speak out because I was not a trade unionist. Then they
came for the Jews, and I did not speak out because I was not
a Jew. Then they came for me, and there was no one left to
speak out for me.''
In 1945 Lutheran Pastor Martin Niemoller's voice echoed
around the globe as the world grieved over millions of lives
lost at the hands of genocide. Sixty years later, America
grieves as millions of innocent victims are being displaced,
raped, tortured, and murdered in the Darfur region of Sudan.
Pressure is mounting for the Sudanese government to end its
genocide. Over the past two years, Congress has allocated
more than $250 million to expand and strengthen the role of
the African Union Mission in Darfur and to provide additional
humanitarian disaster relief throughout the region. As the
nation's oldest human relations organization, the American
Jewish Committee applauds Congress' action in approving these
funds, but we believe that more must be done.
The fragile peace agreement reached in May now seems
shattered as fighting continues to rage throughout the
region. To halt the killing and displacement, civilians must
be protected, the peace agreement must be implemented, and a
secure environment must be established for the delivery of
humanitarian aid. As atrocities, crimes against humanity and
genocidal acts continue throughout the region, we urge you to
take further action toward protecting besieged Sudanese
civilians by supporting the Peace in Darfur Act.
The Peace in Darfur Act, introduced by Senators Gordon
Smith and Edward Kennedy, directs the President to appoint a
new special envoy to Sudan. The Special Envoy, in
collaboration with international partners, would be best
positioned to advance the Darfur peace process. The bill also
calls on the government of Sudan to allow a UN peacekeeping
force to enter Darfur; NATO to provide humanitarian,
logistical, and personnel support to the UN; NATO to enforce
the no-fly zone over Darfur; and the international community
to not only support the African Union Mission (AMIS) in
Sudan, but also to provide humanitarian assistance. The bill
also authorizes an additional $150 million in humanitarian
aid for Fiscal Years 2008-2012. Further, the bill mandates a
Presidential report on the situation in Darfur that will cast
new light on the Sudanese government's actions and provide a
basis to impose targeted sanctions if necessary.
On behalf of a community that has suffered persecution and
even genocide all too often
[[Page S8817]]
in our history, we urge you to support this crucial piece of
legislation. The time to act is now. History has demonstrated
the price of standing idly by in the face of such horrors.
Respectfully,
Richard T. Foltin,
Legislative Director and Counsel.
____
Physicians for Human Rights,
Washington, DC, August 2, 2006.
Office of Senator Edward Kennedy.
I wanted to let you know through this e-mail that
Physicians for Human Rights supports the Kennedy/Smith Darfur
legislation. You may use our name in list of organizations
supporting the bill.
Thank you,
Best regards,
Smita Baruah,
Senior Manager for Government Affairs.
____
Save Dafur Coalition,
Washington, DC, August 2, 2006.
Office of Senator Edward Kennedy.
Please include the Save Darfur Coalition in your list of
organizations supporting this bill.
Thanks,
Alex Meixner,
Communications and Legislative Coordinator.
____
American Jewish World Service,
Washington, DC, August 1, 2006.
Office of Senator Edward Kennedy.
American Jewish World Service can endorse the legislation.
Thanks,
Stefanie Ostfeld.
______
By Mrs. FEINSTEIN:
S. 3802. A bill to amend the Consolidated Omnibus Budget
Reconciliation Act of 1985 to expand the county organized health
insuring organizations authorized to enroll Medicaid beneficiaries; to
the Committee on Finance.
Mrs. FEINSTEIN. Mr. President, this bill will allow two California
counties, Ventura and Merced, to provide health care to Medi-Cal
beneficiaries through the model they have determined best meets their
communities' needs.
This legislation allows Merced and Ventura to establish community
operated health systems, COHS, and raises the percentage of Medi-Cal
beneficiaries who are enrolled in these programs from 16 percent to 18
percent.
I urge my colleagues to support this legislation, and I ask unanimous
consent that the text of the bill be printed in the Record.
There being no objection, the text of the bill was ordered to be
printed in the Record, as follows:
S. 3802
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. EXPANSION OF AUTHORIZED COUNTY MEDICAID ORGANIZED
HEALTH INSURING ORGANIZATIONS.
(a) In General.--Section 9517(c)(3) of the Consolidated
Omnibus Budget Reconciliation Act of 1985 (42 U.S.C. 1396b
note), as added by section 4734 of the Omnibus Budget
Reconciliation Act of 1990 and as amended by section 704 of
the Medicare, Medicaid, and SCHIP Benefits Improvement and
Protection Act of 2000, is amended--
(1) in subparagraph (A), by inserting ``, in the case of
any health insuring organization described in such
subparagraph that is operated by a public entity established
by Ventura county, and in the case of any health insuring
organization described in such subparagraph that is operated
by a public entity established by Merced county'' after
``described in subparagraph (B)''; and
(2) in subparagraph (C), by striking ``14 percent'' and
inserting ``16 percent''.
(b) Effective Date.--The amendments made by subsection (a)
shall take effect on the date of the enactment of this Act.
______
By Mr. AKAKA:
S. 3804. A bill to prohibit commercial air tour operations over
Kalaupapa National Historical Park, Kaloka-Honokohau National
Historical Park, Pu'uhonua o Honaunau National Historical Park, and
Pu'ukohola Heiau National Historic Site; to the Committee on Commerce,
Science, and Transportation.
Mr. AKAKA. Mr President, I rise today to introduce legislation that
will prohibit commercial air tour operations over Kalaupapa National
Historical Park, Kaloko-Honokohau National Historical Park, Pu`uhonua o
Honaunau National Historical Park and Pu`ukohola Heiau National
Historic Site.
When Congress first established the Hawaii Volcanoes National Park in
1916, the intent was to preserve the integrity and peace of the park's
nearly 400 square miles of volcanoes, rivers, forests, wildlife and
sacred sites. In the last few decades, however, the growth of the air
tourism industry has considerably interrupted the tranquility of
Hawaii's National Parks. Air tourism has had an adverse impact on the
ability of Native Hawaiians to practice peaceful protocols of sacred
sites. The sound from aircraft activity can significantly impinge on
the solemnity of sacred sites and ceremonies.
Sacred sites, including the airspace of the designated locales, are
an important resource for the Hawaiian people and we must do what is
necessary to ensure that the value of these sites is not diminished. By
prohibiting air tourism over these areas, the Hawaiian Sacred Sites
Noise Reduction Act affords Natives Hawaiians, residents and visitors
to our beautiful state the peace and tranquility to enjoy these sacred
sites. I urge my colleagues to support this important piece of
legislation.
______
By Ms. SNOWE (for herself, Mrs. Lincoln, Mrs. Hutchison, and Mr.
Kerry):
S. 3806. A bill to amend the Internal Revenue Code of 1986 to provide
a shorter recovery period for the depreciation of certain improvements
to retail space; to the Committee on Finance.
Ms. SNOWE. Mr. President, I rise today to introduce a bill that will
provide relief and equity to our Nation's 1.5 million retail
establishments, most of which have less than five employees. This
legislation is one in a series of proposals that, if enacted, will
reduce both the amount of taxes that small businesses pay, but also the
administrative burden that unfairly saddles them as they attempt to
comply with our Nation's tax laws.
The proposal reduces from 39 to 15 years the depreciable life of
improvements that are made to retail stores that are owned by the
retailer. Under current law, only retailers that lease their property
are allowed this accelerated depreciation, which means it excludes
retailers that also own the property in which they operate. My bill
simply seeks to provide equal treatment to all retailers.
Before I talk about the specifics of this particular provision, let
me first explain why it is so critical that we begin evaluating how we
can best reform the Tax Code, which increasingly keeps our small
businesses trapped in a paralyzing state of regulatory limbo. As is
well-known small businesses are the foundation of our Nation's economy.
According to the Small Business Administration, small businesses
represent 99 percent of all employers, employ 51 percent the private-
sector workforce, and contribute 51 percent of the private-sector
output.
Despite the fact that small businesses are the real job-creators for
our Nation's economy, the current tax system imposes large and
expensive requirements in terms of satisfying their reporting and
recordkeeping obligations. This is a problem Congress must address
because small companies are disadvantaged most in terms of the money
and time spent in satisfying their tax obligation. Why create
distractions for them as they simply seek to comply with the law?
For example, according to the Small Business Administration's Office
of Advocacy, small businesses spend an astounding 8 billion hours each
year complying with government reports. They also spend more than 80
percent of this time on completing tax forms. What's even more
troubling is that companies that employ fewer than 20 employees spend
nearly $1,304 per employee in tax compliance costs; an amount that is
nearly 67 percent more than larger firms.
These statistics are disturbing for several reasons. First, the fact
that small businesses are being required to spend so much money on
compliance costs means they have fewer earnings to reinvest into their
business. This, in turn, means that they have less money to spend on
new equipment or on worker training, which unfortunately has an adverse
effect on their overall production and the economy as a whole.
Second, the fact that small business owners are required to make such
a sizeable investment of their time into completing paperwork means
they have less time to spend on doing what they do best--running their
business and creating jobs.
Let me be clear that I am in no way suggesting that small business
owners are unique in having to pay income taxes, and I am certainly not
expecting them to receive a free pass. What I am
[[Page S8818]]
asking for, though, is a change to make the Tax Code fairer and simpler
so that small companies can satisfy this obligation without having to
expend the amount of resources that they do currently.
For that reason, the package of proposals that I have introduced will
provide not only targeted, affordable tax relief to small business
owners but also simpler rules under the Tax Code. By simplifying the
Tax Code, small business owners will be able to satisfy their tax
obligation in a cheaper, more efficient manner, allowing them to be
able to devote more time and resources to their business.
Specifically, the proposal that I am introducing today will simply
conform the tax codes to the realities that retailers on Main Street
face. Studies conducted by the Treasury Department, Congressional
Research Service and private economists have all found that the 39-year
depreciation life for buildings is too long and that the 39-year
depreciation life for building improvements is even worse. Retailers
generally remodel their stores every 5 to 7 years to reflect changes in
customer base and compete with newer stores. Moreover, many
improvements such as interior partitions, ceiling tiles, restroom
accessories, and paint, may only last a few years before requiring
replacement.
Mr. President, this legislation is a tremendous opportunity to help
small enterprises succeed by providing an incentive for reinvestment.
Every Member of this body has small retail constituents in small towns
who may be in buildings that they have owned for generations and are
struggling to compete. I urge my colleagues to join me in supporting
this vital legislation as we work with the President to transform such
a critical investment incentive into law. Finally, I would like to
thank Senators Lincoln, Hutchison, and Kerry for joining me as
cosponsors to this legislation.
I ask unanimous consent that the text of the bill be printed in the
Record.
There being no objection, the text of the bill was ordered to be
printed in the Record, as follows:
S. 3806
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. RECOVERY PERIOD FOR DEPRECIATION OF CERTAIN
IMPROVEMENTS TO RETAIL SPACE.
(a) 15-Year Recovery Period.--Subparagraph (E) of section
168(e)(3) of the Internal Revenue Code of 1986 (relating to
15-year property) is amended by striking ``and'' at the end
of clause (vii), by striking the period at the end of clause
(viii) and inserting ``, and'', and by adding at the end the
following new clause:
``(ix) any qualified retail improvement property.''.
(b) Qualified Retail Improvement Property.--Subsection (e)
of section 168 of such Code is amended by adding at the end
the following new paragraph:
``(8) Qualified retail improvement property.--
``(A) In general.--The term `qualified retail improvement
property' means any improvement to an interior portion of a
building which is nonresidential real property if--
``(i) such portion is open to the general public and is
used in the trade or business of selling tangible personal
property or services to the general public; and
``(ii) such improvement is placed in service more than 3
years after the date the building was first placed in
service.
``(B) Certain improvements not included.--Such term shall
not include any improvement for which the expenditure is
attributable to--
``(i) the enlargement of the building,
``(ii) any elevator or escalator, or
``(iii) the internal structural framework of the
building.''.
(c) Requirement to Use Straight Line Method.--Paragraph (3)
of section 168(b) of such Code is amended by adding at the
end the following new subparagraph:
``(I) Qualified retail improvement property described in
subsection (e)(8).''.
(d) Alternative System.--The table contained in section
168(g)(3)(B) of such Code is amended by inserting after the
item relating to subparagraph (E)(viii) the following new
item:
``(E)(ix).........................................................39''.
(e) Effective Date.--The amendments made by this section
shall apply to qualified retail improvement property placed
in service after the date of the enactment of this Act.
Mr. KERRY. Mr. President, along Main Street, in a countless number of
towns, many small businesses are placed at a competitive disadvantage
by our tax laws. Business owners need to remodel their store every 5 to
7 years. Consumers' tastes and needs change, and to stay competitive, a
store needs to reflect those changes. If a store is owned, the owner is
required to depreciate the renovation costs over 39 years, but a store
that has leased space in the strip-mall across town, depreciates
renovation costs over a 15-year period. The result: a Main Street store
owner pays twice as much to renovate as their counterpart who leases.
Today, I am introducing legislation along with Senator Snowe that
will even the playing field for businesses that own the real estate
where their business is located. We want parity between the business
owners who own and those who lease their property.
The Treasury Department, the Congressional Research Service, and
private economists have found that the depreciation life for
renovations is far too long. These tax rules generate high tax costs,
laying the burden on small town, rural retailers who are more likely to
own their property than retailers in urban areas. It is time to address
this inequity by reducing the 39-year tax depreciation period to 15
years. I urge my colleagues to support our Main Street stores through
support of this legislation.
______
By Mr. ENZI (for himself and Mr. Kennedy):
S. 3807. A bill to amend the Public Health Service Act and the
Federal Food, Drug, and Cosmetic Act to improve drug safety and
oversight, and for other purposes; to the Committee on Health,
Education, Labor, and Pensions.
Mr. ENZI. Mr. President, I rise today to introduce a very important
bill, one that my colleague Senator Kennedy and I have been working on
for some time.
In 2005, the HELP Committee held two hearings on the issue of drug
safety. We received over 50 recommendations from witnesses at those
hearings. At that time, Senator Kennedy and I pledged to develop a
comprehensive response to the drug safety issues raised. The Enhancing
Drug Safety and Innovation Act is the product of working across party
lines, and creates a structured framework for resolving safety
concerns.
Under the Enhancing Drug Safety and Innovation Act, FDA would begin
to approve drugs and biologics, and new indications for these products,
with risk evaluation and mitigation strategies, REMS. The REMS is
designed to be an integrated, flexible mechanism to acquire and adapt
to new safety information about a drug. The sponsor and FDA will assess
and review an approved REMS at least annually for the first 3 years, as
well as in applications for a new indication, when the sponsor suggests
changes, or when FDA requests a review based on new safety information.
The development of tools to evaluate medical products has not kept
pace with discoveries in basic science. New tools are needed to better
predict safety and efficacy, which in turn would increase the speed and
efficiency of applied biomedical research. The Enhancing Drug Safety
and Innovation Act would spur innovation by establishing a new public-
private partnership at the FDA to advance the Critical Path Initiative
and improve the sciences of developing, manufacturing, and evaluating
the safety and effectiveness of drugs, devices, biologics and
diagnostics.
The Enhancing Drug Safety and Innovation Act also establishes a
central clearinghouse for information about clinical trials and their
results to help patients, providers and researchers learn new
information and make more informed health care decisions.
Finally, the Enhancing Drug Safety and Innovation Act would make
improvements to FDA's process for screening advisory committee members
for financial conflicts of interest. FDA relies on its 30 advisory
committees to provide independent expert advice, lend credibility to
the product review process, and inform consumers of trends in product
development. The bill would clarify and streamline FDA's processes for
evaluating candidates for service on an advisory committee, and address
the key challenge of identifying a sufficient number of people with the
necessary expertise and a minimum of potential conflicts of interest to
serve on advisory committees.
I want to thank the dozens of stakeholders, including the Food and
Drug
[[Page S8819]]
Administration, patient and consumer groups, industry associations,
individual companies, and scientific experts who have taken the time
and effort to give us their comments and input on the bill. Their
assistance has been invaluable.
I look forward to working with my colleagues to advance this
important piece of legislation.
Mr. KENNEDY. Mr. President, Senator Enzi, chairman of the Senate
Health, Education, Labor, and Pensions Committee, and I are introducing
the Enhancing Drug Safety and Innovation Act of 2006. The goals of this
legislation are to enhance the Food and Drug Administration's authority
over the safety of prescription drugs after they are approved; to
encourage innovation in medical products; to improve access to clinical
trials for patients and ensure that the doctors and patients learn
about the results of clinical trials involving the drugs they prescribe
and use; and to improve the screening of members of FDA's scientific
advisory committees to avoid conflicts of interest.
The withdrawal of the drug Vioxx from the market nearly 2 years ago
showed us once again that all prescription drugs have risks, many of
which we may not know about when a drug is approved or even for years
after approval. That is why we need a more effective system to identify
and assess the serious risks of drugs, inform health care providers and
patients about such risks, and manage or minimize these risks as soon
as they are detected.
Our bill will require every drug to have a risk evaluation and
mitigation strategy, or REMS, when it is approved. For many drugs, the
REMS will include only the drug labeling, reports of adverse events, a
justification for why only such reporting is needed, and a timetable
for assessing how the REMS is working.
The FDA will be able to include additional requirements for a drug
that poses serious risks, such as by requiring the drug to be dispensed
to patients with labeling that patients can understand, that the drug
company have a plan to inform health care providers about how to use
the drug safely, or that a drug should not be advertised directly to
consumers for up to 2 years after approval. If a serious safety signal
needs to be understood, FDA can require further studies or even
clinical trials after the drug is approved. Enhanced data-collection
and data-mining techniques will help identify risk signals earlier and
more thoroughly.
For a drug with the most serious side effects, FDA will be able to
require that its REMS include the restrictions on distribution and use
needed to assure its safe use.
The FDA will be able to impose any of these requirements at the time
a drug is approved, and the agency can also modify the labeling or
otherwise alter a drug's REMS after the approval. The drug's
manufacturer will propose the REMS, or modifications to it, and the FDA
and the company will try to work out an adequate REMS. If the agency
and the company cannot agree, the agency's Drug Safety Oversight Board
can review the dispute and recommend a resolution to senior FDA
officials, who will make the final decision.
Civil monetary penalties are added to FDA's traditional enforcement
tools to ensure compliance. Drug user fees will be used to review and
implement the program.
The bill formalizes and makes mandatory what is now only informal and
voluntary. Our intent is not to change standards for approving drugs
but to ensure that the FDA has the ability to identify, assess, and
manage risks as they become known. Better risk management will mean
that drugs with special benefits for some patients will remain
available, despite their serious risks for other patients, because FDA
can better identify the risks and minimize them.
The bill helps to improve drug safety in other ways as well. The
Reagan-Udall Institute for Applied Biomedical Research will be a new
public-private partnership at the FDA to advance the agency's Critical
Path Initiative, which is intended to improve the science of
developing, manufacturing, and evaluating the safety and effectiveness
of drugs, biologics, medical devices, and diagnostics.
The institute will be supported by Federal funds and by contributions
from the pharmaceutical and device industries. Philanthropic
organizations will be able to supplement Federal support. The institute
will have a board of directors and an executive director, and will
report to Congress annually on its operations.
The bill will also expand the public database at NIH to encourage
more patients to enroll in clinical trials of drugs. This database
would build on the current systems and would include late phase II,
phase III, and all phase IV clinical trials for all drugs.
A second, publicly available database would include the results of
phase III and phase IV clinical trials of drugs, with the possibility
that late phase II trials would be added later. Posting of results
could be delayed for up to 2 years, pending the approval of the drug or
the publication of trial results in a peer-reviewed journal. The public
needs to know about the results of clinical trials on drugs.
Tragically, such information was not adequately available for the
clinical studies of antidepressants in children.
Posting information in the clinical trials registry and the clinical
trials results database will be requirements for Federal research
funding and for drug review and approval by the FDA. Both the FDA and
the Inspector General Office of the Department of Health and Human
Services would review the content of submissions to the results
database to ensure they are truthful and nonpromotional. These Federal
requirements would preempt State requirements for clinical trial
databases.
Finally, the bill will improve FDA's process for screening advisory
committee members for financial conflicts of interest. The agency
relies on its advisory committees to provide independent, expert,
nonbinding recommendations on significant issues. Ideally, committee
members should be free of any financial ties to the companies affected
by an issue before a committee. But at times, there may be no
individual without financial ties to such companies--for example, when
the issue involves a rare disease or a cutting edge medical technology.
In these cases, the FDA must be able to grant a waiver to allow an
individual with essential expertise to serve on the committee. The bill
will require the agency to seek qualified experts with minimal
conflicts, clarify how it makes waiver decisions, and disclose those
decisions at least 15 days before a committee meeting.
Our bill is a comprehensive response to drug safety and other
important issues involving prescription drugs and other medical
technologies. I commend Chairman Enzi and his dedicated staff--
especially Amy Muhlberg--for working closely with us on this proposal,
and I urge our Senate colleagues to support it.
______
By Mrs. FEINSTEIN:
S. 3809. A bill for the relief of Jacqueline W. Coats; to the
Committee on the Judiciary.
Mrs. FEINSTEIN. Mr. President, I offer today private relief
legislation to provide lawful permanent residence status to Jacqueline
Coats, a 26-year-old widow currently living in San Francisco.
Mrs. Coats came to the U.S. in 2001 from Kenya on a student visa to
study mass communications at San Jose State University. Her visa status
lapsed in 2003, and the Department of Homeland Security began
deportation proceedings against her.
Mrs. Coats married Marlin Coats on April 17, 2006, after dating for
several years. The couple was happily married and planning to start a
family when, on May 13, Mr. Coats tragically died in a heroic attempt
to save two young boys from drowning.
The couple had been on a Mother's Day outing at Ocean Beach with some
of Mr. Coats's nephews when they heard cries for help. Having worked as
a lifeguard in the past, Mr. Coats instinctively dove into the water.
The two children were saved with the help of a rescue crew, but Mr.
Coats, caught in a riptide, died. Mrs. Coats received a medal honoring
her husband.
Four days before Mr. Coats's death, the couple prepared and signed an
application for a green card at their attorney's office. Unfortunately
the petition was not filed until after his death,
[[Page S8820]]
rendering it invalid. Mrs. Coats currently has a hearing before an
immigration judge in San Francisco on August 24, but her attorney has
informed my staff that she has no relief available to her and will be
ordered deported.
Mrs. Coats, devastated by the loss of her husband, is now caught in a
battle for her right to stay in America. At a recent news conference
with her lawyer, Thip Ark, she explained of her situation, ``I feel
like I have nothing to live for. I have nothing to go home to. . . .
I've been here 4 years. . . . It would be like starting a new life.''
Ms. Ark explains that Mrs. Coats is extremely close with her late
husband's family, with whom she lives in San Leandro, CA. Mrs. Coats
has said that her husband's large family has become her own. Ramona
Burton of San Francisco, one of Marlin Coats's seven brothers and
sisters explains, ``She spent her first American Christmas with us, her
first American Thanksgiving. . . . I can't imagine looking around and
not seeing her there. She needs to be there.''
The San Francisco and bay area community is rallying strong support
for Mrs. Coats. The San Francisco chapters of the NAACP, the San
Francisco Board of Supervisors, and the San Francisco Police
Department, have all passed resolutions in support of Mrs. Coats's
right to remain in the country.
Unfortunately, if this private relief bill is not approved, this
young woman, and the Coats family, will face yet another disorienting
and heartbreaking tragedy. Mrs. Coats will be deported to Kenya, a
country she has not lived in since she was 21. In her time of grieving,
she will be forced to leave her home, her job with AC Transit, her new
family, and everything she has known for the past 5 years.
I cannot think of a compelling reason why the United States should
not allow this young widow to continue the green card process. Had her
husband lived, Mrs. Coats would have filed the papers without
difficulty. It was because of her husband's selfless and heroic act
that Mrs. Coats must now struggle to remain in the country. As one
concerned California constituent wrote to me, ``If ever there was a
case where common fairness, morality and decency should reign over
legal technicalities, this is it. We, as a country, need to reward
heroism and good.''
I believe that we can reward the late Mr. Coats for his noble actions
by granting his wife citizenship. It is what he intended for her. It
can even be argued that a green card for his wife was one of his dying
wishes, as the papers were signed just 4 days prior to his death.
For these reasons, I offer this private relief immigration bill and
ask my colleagues to support it on behalf of Mrs. Coats.
I also ask for unanimous consent that the text of the bill be printed
in the Record.
There being no objection, the text of the bill was ordered to be
printed in the Record, as follows:
S. 3809
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. PERMANENT RESIDENT STATUS FOR JACQUELINE W. COATS.
(a) In General.--Notwithstanding subsections (a) and (b) of
section 201 of the Immigration and Nationality Act (8 U.S.C.
1151), Jacqueline W. Coats shall be eligible for issuance of
an immigrant visa or for adjustment of status to that of an
alien lawfully admitted for permanent residence upon filing
an application for issuance of an immigrant visa under
section 204 of that Act or for adjustment of status to lawful
permanent resident.
(b) Adjustment of Status.--If Jacqueline W. Coats enters
the United States before the filing deadline specified in
subsection (c), Jacqueline W. Coats shall be considered to
have entered and remained lawfully and shall be eligible for
adjustment of status under section 245 of the Immigration and
Nationality Act (8 U.S.C. 1255) as of the date of enactment
of this Act.
(c) Deadline for Application and Payment of Fees.--
Subsections (a) and (b) shall apply only if the application
for issuance of an immigrant visa or the application for
adjustment of status is filed with appropriate fees within 2
years after the date of enactment of this Act.
(d) Reduction of Immigrant Visa Numbers.--Upon the granting
of an immigrant visa or permanent residence to Jacqueline W.
Coats, the Secretary of State shall instruct the proper
officer to reduce by 1, during the current or next following
fiscal year, the total number of immigrant visas that are
made available to natives of the country of birth of
Jacqueline W. Coats under section 203(a) of the Immigration
and Nationality Act or, if applicable, the total number of
immigrant visas that are made available to natives of the
country of birth of Jacqueline W. Coats under section 202(e)
of that Act.
______
By Mr. KOHL (for himself and Mr. Schumer):
S. 3810. A bill to prevent tobacco smuggling, to ensure the
collection of all tobacco taxes, and for other purposes; to the
Committee on the Judiciary.
Mr. KOHL. Mr. President, I rise today with Senator Schumer to
introduce the Prevent All Cigarette Trafficking, PACT, Act of 2006. As
the problem of cigarette trafficking continues to worsen, we must
provide law enforcement officials with the tools they need to crack
down on cigarette trafficking. The PACT Act closes loopholes in current
tobacco trafficking laws, enhances penalties for violations, and
provides law enforcement with new tools to combat the innovative new
methods being used by cigarette traffickers to distribute their
products. Each day we delay passage of this important legislation,
terrorists and criminals raise more money, states lose significant
amounts of tax revenue, and kids have easy access to tobacco products
over the Internet.
The cost to Americans is not merely financial. Tobacco smuggling also
poses a significant threat to innocent people around the world. It has
developed into a popular, and highly profitable, means of generating
revenue for criminal and terrorist organizations. Hezbollah, for
example, earned $1.5 million between 1996 and 2000 by engaging in
tobacco trafficking in the United States. Al-Qaida and Hamas have also
generated significant revenue from the sale of counterfeit cigarettes.
That money is often raised right here in the United States, and it is
then funneled back to these international terrorist groups. Cutting off
financial support to terrorist groups is an integral part of the
protecting this country against future attacks. We can no longer
continue to let terrorist organizations exploit weaknesses in our
tobacco laws to generate significant amounts of money. The cost of
doing nothing is too great.
This is not a minor problem. Cigarette smuggling is a multibillion
dollar a year phenomenon, and it is getting worse. In 1998, the Bureau
of Alcohol, Tobacco, Firearms and Explosives, BATFE, had six active
tobacco smuggling investigations. In 2005, the that number swelled to
452.
The number of cases alone, however, does not sufficiently put this
problem into perspective. The amount of money involved is truly
astonishing. Cigarette trafficking, including the illegal sale of
tobacco products over the Internet, costs States billions of dollars in
lost tax revenue each year. It is estimated that Federal tax losses to
Internet cigarette sales will reach $1.4 billion this year. As lost
tobacco tax revenue lines the pockets of criminals and terrorist
groups, states are being forced to raise college tuition and restrict
access to other public programs. Tobacco smuggling may provide some
with cheap access to cigarettes, but those cheap cigarettes are coming
at a significant cost to the rest of us.
According to the Government Accountability Office, GAO, each year,
cigarette trafficking investigations are growing more and more complex,
and take longer to resolve. More people are selling cigarettes
illegally, and they are getting better at it. As these cases get
tougher to solve, we owe it to law enforcement officials to do our part
to lend a helping hand. The PACT Act enhances BATFE's authority to
enter premises to investigate and enforce cigarette trafficking laws,
and increasing penalties for violations. Unless these existing laws are
strengthened, traffickers will continue to operate with near impunity.
Just as important, though, we must provide law enforcement with new
enforcement tools tools that enable them to combat the cigarette
smugglers of the 21st century. The Internet represents one of those new
obstacles to enforcement. Illegal tobacco vendors around the world
evade detection by conducting transactions over the Internet, and then
employing the services of common carriers and the U.S. Postal Service
to deliver their illegal products around the country. Just a few years
[[Page S8821]]
ago, there were less than 100 vendors selling cigarettes online. Today,
approximately 500 vendors sell illegal tobacco products over the
Internet.
Without new and innovative enforcement methods, law enforcement will
not be able to effectively address the growing challenges facing them
today. The PACT Act sets out to do just that by cutting off the
delivery. A significant part of this problem involves the shipment of
contraband cigarettes through the United States Postal Service, USPS.
This bill would cut off access to the USPS by making tobacco products
non-mailable. We would treat cigarettes just like we treat alcohol,
making it illegal to ship them through the US mails and cutting off a
large portion of the delivery system.
It also employs a novel approach, one being used in some of our
States today, to combat illegal sales of tobacco over the Internet.
Specifically, it will allow the Attorney General, in collaboration with
State and local law enforcement, to create a list of companies that are
illegally selling tobacco products. That list will then be distributed
to legitimate businesses whose services are indispensable to illegal
internet vendors--common carriers. Once a common carrier knows which
customers are breaking the law, this bill will ensure that they take
appropriate action to prevent their companies from being exploited by
terrorists and other criminals.
It is important to point out that this bill has been carefully
negotiated with the common carriers, including UPS, to ensure that it
does not place any unreasonable burdens on these businesses. Many
changes were made to the bill that was introduced in the last Congress
to ensure that the legislation was written to conform to the
technological capabilities of these companies. In light of these
changes, there is no question that private carriers will be able to
fully comply with this bill without interrupting their existing
delivery practices and procedures.
In addition, the legislation makes clear that we are not asking for
perfection. For example, carriers will not be held liable for the
actions of their employees if they have effective policies and
procedures in place to ensure compliance. The key word here is
``effective.'' These policies must be much more than mere words. We are
not asking common carriers to ensure that every single pack of
cigarettes is stopped before it moves through their delivery system,
but we do expect a vigorous effort to ensure that they and their
employees do the very best they can to stop doing business with people
they know to be using their services to violate State and Federal laws.
That is not too much to ask.
In addition to these important law enforcement needs, it is important
to mention another aspect of this legislation that is equally
important. One of the primary ways children get access to cigarettes
today is on the internet and through the mails. The PACT Act now
contains a strong age verification section that will ensure that online
vendors are not selling cigarettes to our children. This provision
would prohibit the sale of tobacco products to children, and it would
also require sellers to use a method of shipment that requires a
signature and photo ID check upon delivery. Most States already have
similar laws on the books, and this would simply make sure that we have
a national standard to ensure that the Internet is not being used to
evade similar ID checks we require at our grocery and convenience
stores.
The recognition that this is a significant problem, along with the
commonsense approach taken in the PACT Act to combat it, has brought
together a coalition of strange bedfellows. The legislation has not
just garnered the support of the law enforcement community, including
the National Association of Attorneys General, and public health
advocates, such as the Campaign for Tobacco Free Kids. It also has the
strong support of tobacco companies like Altria. These groups, who
sometimes find themselves on opposite sides of these issues, all agree
that this is an issue begging to be addressed. They all recognize the
urgent need to provide our law enforcement officials with the tools
they need to combat a very serious threat to our security and protect
public health.
I urge my colleagues to support this important legislation, and I ask
unanimous consent that the text of the bill be printed in the Record.
There being no objection, the text of the bill was ordered to be
printed in the Record, as follows:
S. 3810
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; FINDINGS; PURPOSE.
(a) Short Title.--This Act may be cited as the ``Prevent
All Cigarette Trafficking Act of 2006'' or ``PACT Act''.
(b) Findings.--Congress finds that--
(1) the sale of illegal cigarettes and smokeless tobacco
products significantly reduces Federal, State, and local
government revenues, with Internet sales alone accounting for
billions of dollars of lost Federal, State, and local tobacco
tax revenue each year;
(2) Hezbollah, Hamas, al Qaeda, and other terrorist
organizations have profited from trafficking in illegal
cigarettes or counterfeit cigarette tax stamps;
(3) terrorist involvement in illicit cigarette trafficking
will continue to grow because of the large profits such
organizations can earn;
(4) the sale of illegal cigarettes and smokeless tobacco
over the Internet, and through mail, fax, or phone orders,
make it cheaper and easier for children to obtain tobacco
products;
(5) the majority of Internet and other remote sales of
cigarettes and smokeless tobacco are being made without
adequate precautions to protect against sales to children,
without the payment of applicable taxes, and without
complying with the nominal registration and reporting
requirements in existing Federal law;
(6) unfair competition from illegal sales of cigarettes and
smokeless tobacco is taking billions of dollars of sales away
from law-abiding retailers throughout the United States;
(7) with rising State and local tobacco tax rates, the
incentives for the illegal sale of cigarettes and smokeless
tobacco have increased;
(8) the number of active tobacco investigations being
conducted by the Bureau of Alcohol, Tobacco, Firearms and
Explosives rose to 452 in 2005;
(9) the number of Internet vendors in the United States and
in foreign countries that sell cigarettes and smokeless
tobacco to buyers in the United States has increased from
only about 40 in 2000 to more than 500 in 2005; and
(10) the intrastate sale of illegal cigarettes and
smokeless tobacco over the Internet has a substantial effect
on interstate commerce.
(c) Purposes.--It is the purpose of this Act to--
(1) require Internet and other remote sellers of cigarettes
and smokeless tobacco to comply with the same laws that apply
to law-abiding tobacco retailers;
(2) create strong disincentives to illegal smuggling of
tobacco products;
(3) provide government enforcement officials with more
effective enforcement tools to combat tobacco smuggling;
(4) make it more difficult for cigarette and smokeless
tobacco traffickers to engage in and profit from their
illegal activities;
(5) increase collections of Federal, State, and local
excise taxes on cigarettes and smokeless tobacco; and
(6) prevent and reduce youth access to inexpensive
cigarettes and smokeless tobacco through illegal Internet or
contraband sales.
SEC. 2. COLLECTION OF STATE CIGARETTE AND SMOKELESS TOBACCO
TAXES.
(a) Definitions.--The Act of October 19, 1949 (15 U.S.C.
375 et seq.; commonly referred to as the ``Jenkins Act'')
(referred to in this Act as the ``Jenkins Act''), is amended
by striking the first section and inserting the following:
``SECTION 1. DEFINITIONS.
``As used in this Act, the following definitions apply:
``(1) Attorney general.--The term `attorney general', with
respect to a State, means the attorney general or other chief
law enforcement officer of the State, or the designee of that
officer.
``(2) Cigarette.--
``(A) In general.--For purposes of this Act, the term
`cigarette'--
``(i) shall have the same meaning given that term in
section 2341 of title 18, United States Code; and
``(ii) shall include `roll-your-own tobacco' (as that term
is defined in section 5702 of title 26, United States Code).
``(B) Exception.--For purposes of this Act, the term
`cigarette' does not include a `cigar,' as that term is
defined in section 5702 of title 26, United States Code.
``(3) Common carrier.--The term `common carrier' means any
person (other than a local messenger service or the United
States Postal Service) that holds itself out to the general
public as a provider for hire of the transportation by water,
land, or air of merchandise, whether or not the person
actually operates the vessel, vehicle, or aircraft by which
the transportation is provided, between a port or place and a
port or place in the United States.
``(4) Consumer.--The term `consumer' means any person that
purchases cigarettes or smokeless tobacco, but does not
include any person lawfully operating as a manufacturer,
distributor, wholesaler, or retailer of cigarettes or
smokeless tobacco.
[[Page S8822]]
``(5) Delivery sale.--The term `delivery sale' means any
sale of cigarettes or smokeless tobacco to a consumer if--
``(A) the consumer submits the order for such sale by means
of a telephone or other method of voice transmission, the
mails, or the Internet or other online service, or the seller
is otherwise not in the physical presence of the buyer when
the request for purchase or order is made; or
``(B) the cigarettes or smokeless tobacco are delivered by
use of a common carrier, private delivery service, or the
mails, or the seller is not in the physical presence of the
buyer when the buyer obtains possession of the cigarettes or
smokeless tobacco.
``(6) Delivery seller.--The term `delivery seller' means a
person who makes a delivery sale.
``(7) Indian country.--The term `Indian country' has the
meaning given that term in section 1151 of title 18, United
States Code, except that within the State of Alaska that term
applies only to the Metlakatla Indian Community, Annette
Island Reserve.
``(8) Indian tribe.--The term `Indian tribe', `tribe', or
`tribal' refers to an Indian tribes as defined in section
4(e) of the Indian Self-Determination and Education
Assistance Act (25 U.S.C. 450b(e)) or as listed pursuant to
section 104 of the Federally Recognized Indian Tribe List Act
of 1994 (25 U.S.C. 479a-1).
``(9) Interstate commerce.--The term `interstate commerce'
means commerce between a State and any place outside the
State, commerce between a State and any Indian country in the
State, or commerce between points in the same State but
through any place outside the State or through any Indian
country.
``(10) Person.--The term `person' means an individual,
corporation, company, association, firm, partnership,
society, State government, local government, Indian tribal
government, governmental organization of such government, or
joint stock company.
``(11) State.--The term `State' means each of the several
States of the United States, the District of Columbia, the
Commonwealth of Puerto Rico, or any territory or possession
of the United States.
``(12) Smokeless tobacco.--The term `smokeless tobacco'
means any finely cut, ground, powdered, or leaf tobacco, or
other product containing tobacco, that is intended to be
placed in the oral or nasal cavity or otherwise consumed
without being combusted.
``(13) Tobacco tax administrator.--The term `tobacco tax
administrator' means the State, local, or tribal official
duly authorized to collect the tobacco tax or administer the
tax law of a State, locality, or tribe, respectively.
``(14) Transfers for profit.--The term `transfers for
profit' means any transfer for profit or other disposition
for profit, including any transfer or disposition by an agent
to his principal in connection with which the agent receives
anything of value.
``(15) Use.--The term `use', in addition to its ordinary
meaning, means the consumption, storage, handling, or
disposal of cigarettes or smokeless tobacco.''.
(b) Reports to State Tobacco Tax Administrators.--Section 2
of the Jenkins Act (15 U.S.C. 376) is amended--
(1) by striking ``cigarettes'' each place it appears and
inserting ``cigarettes or smokeless tobacco'';
(2) in subsection (a)--
(A) in the matter preceding paragraph (1)--
(i) by inserting ``Contents.--''after ``(a)''
(ii) by striking ``or transfers'' and inserting ``,
transfers, or ships'';
(iii) by inserting ``, locality, or Indian country of an
Indian tribe'' after ``a State'';
(iv) by striking ``to other than a distributor licensed by
or located in such State,''; and
(v) by striking ``or transfer and shipment'' and inserting
``, transfer, or shipment'';
(B) in paragraph (1)--
(i) by striking ``with the tobacco tax administrator of the
State'' and inserting ``with the Attorney General of the
United States and with the tobacco tax administrators of the
State and place''; and
(ii) by striking ``; and'' and inserting the following: ``,
as well as telephone numbers for each place of business, a
principal electronic mail address, any website addresses, and
the name, address, and telephone number of an agent in the
State authorized to accept service on behalf of such
person;'';
(C) in paragraph (2), by striking ``and the quantity
thereof.'' and inserting ``the quantity thereof, and the
name, address, and phone number of the person delivering the
shipment to the recipient on behalf of the delivery seller,
with all invoice or memoranda information relating to
specific customers to be organized by city or town and by zip
code; and''; and
(D) by adding at the end the following:
``(3) with respect to each memorandum or invoice filed with
a State under paragraph (2), also file copies of such
memorandum or invoice with the tobacco tax administrators and
chief law enforcement officers of the local governments and
Indian tribes operating within the borders of the State that
apply their own local or tribal taxes on cigarettes or
smokeless tobacco.'';
(3) in subsection (b)--
(A) by inserting ``Presumptive Evidence.--'' after ``(b)'';
(B) by striking ``(1) that'' and inserting ``that''; and
(C) by striking ``, and (2)'' and all that follows and
inserting a period; and
(4) by adding at the end the following:
``(c) Use of Information.--A tobacco tax administrator or
chief law enforcement officer who receives a memorandum or
invoice under paragraph (2) or (3) of subsection (a) shall
use such memorandum or invoice solely for the purposes of the
enforcement of this Act and the collection of any taxes owed
on related sales of cigarettes and smokeless tobacco, and
shall keep confidential any personal information in such
memorandum or invoice not otherwise required for such
purposes.''.
(c) Requirements for Delivery Sales.--The Jenkins Act is
amended by inserting after section 2 the following:
``SEC. 2A. DELIVERY SALES.
``(a) In General.--With respect to delivery sales into a
specific State and place, each delivery seller shall comply
with--
``(1) the shipping requirements set forth in subsection
(b);
``(2) the recordkeeping requirements set forth in
subsection (c);
``(3) all State, local, tribal, and other laws generally
applicable to sales of cigarettes or smokeless tobacco as if
such delivery sales occurred entirely within the specific
State and place, including laws imposing--
``(A) excise taxes;
``(B) licensing and tax-stamping requirements;
``(C) restrictions on sales to minors; and
``(D) other payment obligations or legal requirements
relating to the sale, distribution, or delivery of cigarettes
or smokeless tobacco; and
``(4) the tax collection requirements set forth in
subsection (d).
``(b) Shipping and Packaging.--
``(1) Required statement.--For any shipping package
containing cigarettes or smokeless tobacco, the delivery
seller shall include on the bill of lading, if any, and on
the outside of the shipping package, on the same surface as
the delivery address, a clear and conspicuous statement
providing as follows: `CIGARETTES/SMOKELESS TOBACCO: FEDERAL
LAW REQUIRES THE PAYMENT OF ALL APPLICABLE EXCISE TAXES, AND
COMPLIANCE WITH APPLICABLE LICENSING AND TAX-STAMPING
OBLIGATIONS'.
``(2) Failure to label.--Any shipping package described in
paragraph (1) that is not labeled in accordance with that
paragraph shall be treated as nondeliverable matter by a
common carrier, other delivery service, or the United States
Postal Service if the common carrier, other delivery service,
or the United States Postal Service, as the case may be,
knows or should know the package contains cigarettes or
smokeless tobacco. Nothing in this paragraph shall require
the common carrier, other delivery service, or the United
States Postal Service to open any package to determine its
contents.
``(3) Weight restriction.--A delivery seller shall not
sell, offer for sale, deliver, or cause to be delivered in
any single sale or single delivery any cigarettes or
smokeless tobacco weighing more than 10 pounds.
``(4) Age verification.--Notwithstanding any other
provision of law, a delivery seller who mails or ships
cigarettes or smokeless tobacco in connection with a delivery
sale--
``(A) shall not sell, deliver, or cause to be delivered any
tobacco products to a person under the minimum age required
for the legal sale or purchase of tobacco products, as
determined by either State or local law at the place of
delivery; and
``(B) shall use a method of mailing or shipping that
requires--
``(i) the purchaser placing the delivery sale order, or an
adult who is at least the minimum age required for the legal
sale or purchase of tobacco products, as determined by either
State or local law at the place of delivery, to sign to
accept delivery of the shipping container at the delivery
address; and
``(ii) the person who signs to accept delivery of the
shipping container to provide proof, in the form of a valid,
government-issued identification bearing a photograph of the
individual, that the person is at least the minimum age
required for the legal sale or purchase of tobacco products,
as determined by either State or local law at the place of
delivery.
``(c) Records.--
``(1) In general.--Each delivery seller shall keep a record
of any delivery sale, including all of the information
described in section 2(a)(2), organized by the State, and
within such State, by the city or town and by zip code, into
which such delivery sale is so made.
``(2) Record retention.--Records of a delivery sale shall
be kept as described in paragraph (1) in the year in which
the delivery sale is made and for the next 4 years.
``(3) Access for officials.--Records kept under paragraph
(1) shall be made available to tobacco tax administrators of
the States, to local governments and Indian tribes that apply
their own local or tribal taxes on cigarettes or smokeless
tobacco, to the attorneys general of the States, to the chief
law enforcement officers of such local governments and Indian
tribes, and to the Attorney General of the United States in
order to ensure the compliance of persons making delivery
sales with the requirements of this Act.
``(d) Delivery.--
``(1) In general.--Except as provided in paragraph (2), no
delivery seller may sell or deliver to any consumer, or
tender to any common carrier or other delivery service,
[[Page S8823]]
any cigarettes or smokeless tobacco pursuant to a delivery
sale unless, in advance of the sale, delivery, or tender--
``(A) any cigarette or smokeless tobacco excise tax that is
imposed by the State in which the cigarettes or smokeless
tobacco are to be delivered has been paid to the State;
``(B) any cigarette or smokeless tobacco excise tax that is
imposed by the local government of the place in which the
cigarettes or smokeless tobacco are to be delivered has been
paid to the local government; and
``(C) any required stamps or other indicia that such excise
tax has been paid are properly affixed or applied to the
cigarettes or smokeless tobacco.
``(2) Exception.--Paragraph (1) does not apply to a
delivery sale of smokeless tobacco if the law of the State or
local government of the place where the smokeless tobacco is
to be delivered requires or otherwise provides that delivery
sellers collect the excise tax from the consumer and remit
the excise tax to the State or local government, and the
delivery seller complies with the requirement.
``(e) List of Unregistered or Noncompliant Delivery
Sellers.--
``(1) In general.--
``(A) Initial list.--Not later than 90 days after this
subsection goes into effect under section 10 of the Prevent
All Cigarette Trafficking Act of 2006, the Attorney General
of the United States shall compile a list of delivery sellers
of cigarettes or smokeless tobacco that have not registered
with the Attorney General, pursuant to section 2(a) or that
are otherwise not in compliance with this Act, and--
``(i) distribute the list to--
``(I) the attorney general and tax administrator of every
State;
``(II) common carriers and other persons that deliver small
packages to consumers in interstate commerce, including the
United States Postal Service; and
``(III) at the discretion of the Attorney General of the
United States, to any other persons; and
``(ii) publicize and make the list available to any other
person engaged in the business of interstate deliveries or
who delivers cigarettes or smokeless tobacco in or into any
State.
``(B) List contents.--To the extent known, the Attorney
General of the United States shall include, for each delivery
seller on the list described in subparagraph (A)--
``(i) all names the delivery seller uses in the transaction
of its business or on packages delivered to customers;
``(ii) all addresses from which the delivery seller does
business or ships cigarettes or smokeless tobacco;
``(iii) the website addresses, primary e-mail address, and
phone number of the delivery seller; and
``(iv) any other information that the Attorney General
determines would facilitate compliance with this subsection
by recipients of the list.
``(C) Updating.--The Attorney General of the United States
shall update and distribute the list at least once every 4
months, and may distribute the list and any updates by
regular mail, electronic mail, or any other reasonable means,
or by providing recipients with access to the list through a
nonpublic website that the Attorney General of the United
States regularly updates.
``(D) State, local, or tribal additions.--The Attorney
General of the United States shall include in the list under
subparagraph (A) any noncomplying delivery sellers identified
by any State, local, or tribal government under paragraph
(5), and shall distribute the list to the attorney general or
chief law enforcement official and the tax administrator of
any government submitting any such information and to any
common carriers or other persons who deliver small packages
to consumers identified by any government pursuant to
paragraph (5).
``(E) Confidentiality.--The list distributed pursuant to
subparagraph (A) shall be confidential, and any person
receiving the list shall maintain the confidentiality of the
list but may deliver the list, for enforcement purposes, to
any government official or to any common carrier or other
person that delivers tobacco products or small packages to
consumers. Nothing in this section shall prohibit a common
carrier, the United States Postal Service, or any other
person receiving the list from discussing with the listed
delivery sellers the delivery sellers' inclusion on the list
and the resulting effects on any services requested by such
listed delivery seller.
``(2) Prohibition on delivery.--
``(A) In general.--Commencing on the date that is 60 days
after the date of the initial distribution or availability of
the list under paragraph (1)(A), no person who receives the
list under paragraph (1), and no person who delivers
cigarettes or smokeless tobacco to consumers, shall knowingly
complete, cause to be completed, or complete its portion of a
delivery of any package for any person whose name and address
are on the list, unless--
``(i) the person making the delivery knows or believes in
good faith that the item does not include cigarettes or
smokeless tobacco;
``(ii) the delivery is made to a person lawfully engaged in
the business of manufacturing, distributing, or selling
cigarettes or smokeless tobacco; or
``(iii) the package being delivered weighs more than 100
pounds and the person making the delivery does not know or
have reasonable cause to believe that the package contains
cigarettes or smokeless tobacco.
``(B) Implementation of updates.--Commencing on the date
that is 30 days after the date of the distribution or
availability of any updates or corrections to the list under
paragraph (1), all recipients and all common carriers or
other persons that deliver cigarettes or smokeless tobacco to
consumers shall be subject to subparagraph (A) in regard to
such corrections or updates.
``(3) Shipments from persons on list.--
``(A) In general.--In the event that a common carrier or
other delivery service delays or interrupts the delivery of a
package it has in its possession because it determines or has
reason to believe that the person ordering the delivery is on
a list distributed under paragraph (1)--
``(i) the person ordering the delivery shall be obligated
to pay--
``(I) the common carrier or other delivery service as if
the delivery of the package had been timely completed; and
``(II) if the package is not deliverable, any reasonable
additional fee or charge levied by the common carrier or
other delivery service to cover its extra costs and
inconvenience and to serve as a disincentive against such
noncomplying delivery orders; and
``(ii) if the package is determined not to be deliverable,
the common carrier or other delivery service shall, in its
discretion, either provide the package and its contents to a
Federal, State, or local law enforcement agency or destroy
the package and its contents.
``(B) Records.--A common carrier or other delivery service
shall maintain, for a period of 5 years, any records kept in
the ordinary course of business relating to any deliveries
interrupted pursuant to this paragraph and provide that
information, upon request, to the Attorney General of the
United States or to the attorney general or chief law
enforcement official or tax administrator of any State,
local, or tribal government.
``(C) Confidentiality.--Any person receiving records under
subparagraph (B) shall use such records solely for the
purposes of the enforcement of this Act and the collection of
any taxes owed on related sales of cigarettes and smokeless
tobacco, and the person receiving records under subparagraph
(B) shall keep confidential any personal information in such
records not otherwise required for such purposes.
``(4) Preemption.--
``(A) In general.--No State, local, or tribal government,
nor any political authority of two or more State, local, or
tribal governments, may enact or enforce any law or
regulation relating to delivery sales that restricts
deliveries of cigarettes or smokeless tobacco to consumers by
common carriers or other delivery services on behalf of
delivery sellers by--
``(i) requiring that the common carrier or other delivery
service verify the age or identity of the consumer accepting
the delivery by requiring the person who signs to accept
delivery of the shipping container to provide proof, in the
form of a valid, government-issued identification bearing a
photograph of the individual, that such person is at least
the minimum age required for the legal sale or purchase of
tobacco products, as determined by either State or local law
at the place of delivery;
``(ii) requiring that the common carrier or other delivery
service obtain a signature from the consumer accepting the
delivery;
``(iii) requiring that the common carrier or other delivery
service verify that all applicable taxes have been paid;
``(iv) requiring that packages delivered by the common
carrier or other delivery service contain any particular
labels, notice, or markings; or
``(v) prohibiting common carriers or other delivery
services from making deliveries on the basis of whether the
delivery seller is or is not identified on any list of
delivery sellers maintained and distributed by any entity
other than the Federal Government.
Nothing in this paragraph may be construed to preempt or
supersede State laws prohibiting the delivery sale, or the
shipment or delivery pursuant to a delivery sale, of
cigarettes or smokeless tobacco to individual consumers.
``(B) Relationship to other laws.--Nothing in this
paragraph shall be construed to prohibit, expand, restrict,
or otherwise amend or modify--
``(i) section 14501(c)(1) or 41713(b)(4) of title 49,
United States Code;
``(ii) any other restrictions in Federal law on the ability
of State, local, or tribal governments to regulate common
carriers; or
``(iii) any provision of State, local, or tribal law
regulating common carriers that falls within the provisions
of chapter 49 of the United States Code, sections 14501(c)(2)
or 41713(b)(4)(B).
``(5) State, local, and tribal additions.--
``(A) In general.--Any State, local, or tribal government
shall provide the Attorney General of the United States
with--
``(i) all known names, addresses, website addresses, and
other primary contact information of any delivery seller that
offers for sale or makes sales of cigarettes or smokeless
tobacco in or into the State, locality, or tribal land but
has failed to register with or make reports to the respective
tax administrator, as required by this Act, or that has been
found in a legal proceeding to have otherwise failed to
comply with this Act; and
``(ii) a list of common carriers and other persons who make
deliveries of cigarettes or smokeless tobacco in or into the
State, locality, or tribal lands.
[[Page S8824]]
``(B) Updates.--Any government providing a list to the
Attorney General of the United States under subparagraph (A)
shall also provide updates and corrections every 4 months
until such time as such government notifies the Attorney
General of the United States in writing that such government
no longer desires to submit such information to supplement
the list maintained and distributed by the Attorney General
of the United States under paragraph (1).
``(C) Removal after withdrawal.--Upon receiving written
notice that a government no longer desires to submit
information under subparagraph (A), the Attorney General of
the United States shall remove from the list under paragraph
(1) any persons that are on the list solely because of such
government's prior submissions of its list of noncomplying
delivery sellers of cigarettes or smokeless tobacco or its
subsequent updates and corrections.
``(6) Deadline to incorporate additions.--The Attorney
General of the United States shall--
``(A) include any delivery seller identified and submitted
by a State, local, or tribal government under paragraph (5)
in any list or update that is distributed or made available
under paragraph (1) on or after the date that is 30 days
after the date on which the information is received by the
Attorney General of the United States; and
``(B) distribute any such list or update to any common
carrier or other person who makes deliveries of cigarettes or
smokeless tobacco that has been identified and submitted by
another government, pursuant to paragraph (5).
``(7) Notice to delivery sellers.--Not later than 14 days
prior to including any delivery seller on the initial list
distributed or made available under paragraph (1), or on any
subsequent list or update for the first time, the Attorney
General of the United States shall make a reasonable attempt
to send notice to the delivery seller by letter, electronic
mail, or other means that the delivery seller is being placed
on such list or update, with that notice including the text
of this Act.
``(8) Limitations.--
``(A) In general.--Any common carrier or other person
making a delivery subject to this subsection shall not be
required or otherwise obligated to--
``(i) determine whether any list distributed or made
available under paragraph (1) is complete, accurate, or up-
to-date;
``(ii) determine whether a person ordering a delivery is in
compliance with this Act; or
``(iii) open or inspect, pursuant to this Act, any package
being delivered to determine its contents.
``(B) Alternate names.--Any common carrier or other person
making a delivery subject to this subsection shall not be
required or otherwise obligated to make any inquiries or
otherwise determine whether a person ordering a delivery is a
delivery seller on the list under paragraph (1) who is using
a different name or address in order to evade the related
delivery restrictions, but shall not knowingly deliver any
packages to consumers for any such delivery seller who the
common carrier or other delivery service knows is a delivery
seller who is on the list under paragraph (1) but is using a
different name or address to evade the delivery restrictions
of paragraph (2).
``(C) Penalties.--Any common carrier or person in the
business of delivering packages on behalf of other persons
shall not be subject to any penalty under section 14101(a) of
title 49, United States Code, or any other provision of law
for--
``(i) not making any specific delivery, or any deliveries
at all, on behalf of any person on the list under paragraph
(1);
``(ii) not, as a matter of regular practice and procedure,
making any deliveries, or any deliveries in certain States,
of any cigarettes or smokeless tobacco for any person or for
any person not in the business of manufacturing,
distributing, or selling cigarettes or smokeless tobacco; or
``(iii) delaying or not making a delivery for any person
because of reasonable efforts to comply with this Act.
``(D) Other limits.--Section 2 and subsections (a), (b),
(c), and (d) of this section shall not be interpreted to
impose any responsibilities, requirements, or liability on
common carriers.
``(f) Presumption.--For purposes of this Act, a delivery
sale shall be deemed to have occurred in the State and place
where the buyer obtains personal possession of the cigarettes
or smokeless tobacco, and a delivery pursuant to a delivery
sale is deemed to have been initiated or ordered by the
delivery seller.''.
(d) Penalties.--The Jenkins Act is amended by striking
section 3 and inserting the following:
``SEC. 3. PENALTIES.
``(a) Criminal Penalties.--
``(1) In general.--Except as provided in paragraph (2),
whoever violates any provision of this Act shall be guilty of
a felony and shall be imprisoned not more than 3 years, fined
under title 18, United States Code, or both.
``(2) Exceptions.--
``(A) Governments.--Paragraph (1) shall not apply to a
State, local, or tribal government.
``(B) Delivery violations.--A common carrier or independent
delivery service, or employee of a common carrier or
independent delivery service, shall be subject to criminal
penalties under paragraph (1) for a violation of section
2A(e) only if the violation is committed intentionally for
the purpose of--
``(i) obtaining the business of delivery sellers known to
the common carrier or independent delivery service not to be
in compliance with this Act; or
``(ii) assisting a delivery seller to violate or otherwise
evade compliance with section 2A.
``(b) Civil Penalties.--
``(1) In general.--Except as provided in paragraph (3),
whoever violates any provision of this Act shall be subject
to a civil penalty in an amount not to exceed--
``(A) in the case of a delivery seller, the greater of--
``(i) $5,000 in the case of the first violation, or $10,000
for any other violation; or
``(ii) for any violation, 2 percent of the gross sales of
cigarettes or smokeless tobacco of such person during the 1-
year period ending on the date of the violation.
``(B) in the case of a common carrier or other delivery
service, $2,500 in the case of a first violation, or $5,000
for any violation within 1 year of a prior violation.
``(2) Relation to other penalties.--A civil penalty under
paragraph (1) for a violation of this Act shall be imposed in
addition to any criminal penalty under subsection (a) and any
other damages, equitable relief, or injunctive relief awarded
by the court, including, but not limited to, the payment of
any unpaid taxes to the appropriate Federal, State, local, or
tribal governments.
``(3) Exceptions.--
``(A) Delivery violations.--An employee of a common carrier
or independent delivery service shall be subject to civil
penalties under paragraph (1) for a violation of section
2A(e) only if the violation is committed intentionally for
the purpose of--
``(i) obtaining the business of delivery sellers known to
the common carrier or independent delivery service not to be
in compliance with this Act; or
``(ii) assisting a delivery seller to violate or otherwise
evade compliance with section 2A.
``(B) Other limitations.--No common carrier or independent
delivery service shall be subject to civil penalties under
paragraph (1) for a violation of section 2A(e) if--
``(i) the common carrier or independent delivery service
has implemented and enforces effective policies and practices
for complying with that section; or
``(ii) an employee of the common carrier or independent
delivery service who physically receives and processes
orders, picks up packages, processes packages, or makes
deliveries, takes actions that are outside the scope of
employment of the employee in the course of the violation, or
that violate the implemented and enforced policies of the
common carrier or independent delivery service described in
clause (i).''.
(e) Enforcement.--The Jenkins Act is amended by striking
section 4 and inserting the following:
``SEC. 4. ENFORCEMENT.
``(a) In General.--The United States district courts shall
have jurisdiction to prevent and restrain violations of this
Act and to provide other appropriate injunctive or equitable
relief, including money damages, for such violations.
``(b) Authority of the Attorney General.--The Attorney
General of the United States shall administer and enforce the
provisions of this Act.
``(c) State, Local, and Tribal Enforcement.--
``(1) In general.--
``(A) Standing.--A State, through its attorney general (or
a designee thereof), or a local government or Indian tribe
that levies a tax subject to section 2A(a)(3), through its
chief law enforcement officer (or a designee thereof), may
bring an action in a United States district court to prevent
and restrain violations of this Act by any person (or by any
person controlling such person) or to obtain any other
appropriate relief from any person (or from any person
controlling such person) for violations of this Act,
including civil penalties, money damages, and injunctive or
other equitable relief.
``(B) Sovereign immunity.--Nothing in this Act shall be
deemed to abrogate or constitute a waiver of any sovereign
immunity of a State or local government or Indian tribe
against any unconsented lawsuit under this Act, or otherwise
to restrict, expand, or modify any sovereign immunity of a
State or local government or Indian tribe.
``(2) Provision of information.--A State, through its
attorney general, or a local government or Indian tribe that
levies a tax subject to section 2A(a)(3), through its chief
law enforcement officer (or a designee thereof), may provide
evidence of a violation of this Act by any person not subject
to State, local, or tribal government enforcement actions for
violations of this Act to the Attorney General of the United
States or a United States attorney, who shall take
appropriate actions to enforce the provisions of this Act.
``(3) Use of penalties collected.--
``(A) In general.--There is established a separate account
in the Treasury known as the `PACT Anti-Trafficking Fund'.
Notwithstanding any other provision of law and subject to
subparagraph (B), an amount equal to 50 percent of any
criminal and civil penalties collected by the United States
Government in enforcing the provisions of this Act shall
[[Page S8825]]
be transferred into the PACT Anti-Trafficking Fund and shall
be available to the Attorney General of the United States for
purposes of enforcing the provisions of this Act and other
laws relating to contraband tobacco products.
``(B) Allocation of funds.--Of the amount available to the
Attorney General under subparagraph (A), not less than 50
percent shall be made available only to the agencies and
offices within the Department of Justice that were
responsible for the enforcement actions in which the
penalties concerned were imposed or for any underlying
investigations.
``(4) Nonexclusivity of remedy.--
``(A) In general.--The remedies available under this
section and section 3 are in addition to any other remedies
available under Federal, State, local, tribal, or other law.
``(B) State court proceedings.--Nothing in this Act shall
be construed to expand, restrict, or otherwise modify any
right of an authorized State official to proceed in State
court, or take other enforcement actions, on the basis of an
alleged violation of State or other law.
``(C) Tribal court proceedings.--Nothing in this Act shall
be construed to expand, restrict, or otherwise modify any
right of an authorized Indian tribal government official to
proceed in tribal court, or take other enforcement actions,
on the basis of an alleged violation of tribal law.
``(D) Local government enforcement.--Nothing in this Act
shall be construed to expand, restrict, or otherwise modify
any right of an authorized local government official to
proceed in State court, or take other enforcement actions, on
the basis of an alleged violation of local or other law.
``(d) Persons Dealing in Tobacco Products.--Any person who
holds a permit under section 5712 of the Internal Revenue
Code of 1986 (regarding permitting of manufacturers and
importers of tobacco products and export warehouse
proprietors) may bring an action in a United States district
court to prevent and restrain violations of this Act by any
person (or by any person controlling such person) other than
a State, local, or tribal government.
``(e) Notice.--
``(1) Persons dealing in tobacco products.--Any person who
commences a civil action under subsection (d) shall inform
the Attorney General of the United States of the action.
``(2) State, local, and tribal actions.--It is the sense of
Congress that the attorney general of any State, or chief law
enforcement officer of any locality or tribe, that commences
a civil action under this section should inform the Attorney
General of the United States of the action.
``(f) Public Notice.--
``(1) In general.--The Attorney General of the United
States shall make available to the public, by posting such
information on the Internet and by other appropriate means,
information regarding all enforcement actions undertaken by
the Attorney General or United States attorneys, or reported
to the Attorney General, under this section, including
information regarding the resolution of such actions and how
the Attorney General and the United States attorney have
responded to referrals of evidence of violations pursuant to
paragraph (2).
``(2) Reports to congress.--The Attorney General shall
submit to Congress each year a report containing the
information described in paragraph (1).''.
(f) Conforming and Clerical Amendments.--The section
heading for chapter 10A of title 15, United States Code, is
amended to read as follows: ``REMOTE SALES OF CIGARETTES AND
SMOKELESS TOBACCO''.
SEC. 3. TREATMENT OF CIGARETTES AND SMOKELESS TOBACCO AS
NONMAILABLE MATTER.
Section 1716 of title 18, United States Code, is amended--
(1) by redesignating subsections (j) and (k) as subsections
(k) and (l), respectively; and
(2) by inserting after subsection (i) the following:
``(j) Tobacco Products.--
``(1) Prohibition.--
``(A) In general.--Except as provided in subparagraphs (B)
and (C), all cigarettes (as that term is defined in section
1(2) of the Act of October 19, 1949 (15 U.S.C. 375; commonly
referred to as the `Jenkins Act')) and smokeless tobacco (as
that term is defined in section 1(12) of that Act), are
nonmailable and shall not be deposited in or carried through
the mails. The United States Postal Service shall not accept
for delivery or transmit through the mails any package that
it knows or has reasonable cause to believe contains any
cigarettes or smokeless tobacco made nonmailable by this
subsection.
``(B) Reasonable cause to believe.--For purposes of this
section, notification to the United States Postal Service by
the Attorney General, a United States attorney, or a State
Attorney General that an individual or entity is primarily
engaged in the business of transmitting cigarettes or
smokeless tobacco made nonmailable by this section shall
constitute reasonable cause to believe that any packages
presented to the United States Postal Service by such
individual or entity contain nonmailable cigarettes or
smokeless tobacco.
``(C) Cigars.--Subparagraph (A) shall not apply to cigars
(as that term is defined in section 5702(a) of the Internal
Revenue Code of 1986).
``(D) Geographic exception.--Subparagraph (A) shall not
apply to mailings within or into any State that is not
contiguous with at least 1 other State of the United States.
For purposes of this paragraph, `State' means any of the 50
States or the District of Columbia.
``(2) Packaging exceptions inapplicable.--Subsection (b)
shall not apply to any tobacco product made nonmailable by
this subsection.
``(3) Seizure and forfeiture.--Any cigarettes or smokeless
tobacco made nonmailable by this subsection that are
deposited in the mails shall be subject to seizure and
forfeiture, and any tobacco products so seized and forfeited
shall either be destroyed or retained by Government officials
for the detection or prosecution of crimes or related
investigations and then destroyed.
``(4) Additional penalties.--In addition to any other fines
and penalties imposed by this chapter for violations of this
section, any person violating this subsection shall be
subject to an additional penalty in the amount of 10 times
the retail value of the nonmailable cigarettes or smokeless
tobacco, including all Federal, State, and local taxes.
``(5) Use of penalties.--There is established a separate
account in the Treasury known as the `PACT Postal Service
Fund'. Notwithstanding any other provision of law, an amount
equal to 50 percent of any criminal and civil fines or
monetary penalties collected by the United States Government
in enforcing the provisions of this subsection shall be
transferred into the PACT Postal Service Fund and shall be
available to the Postmaster General for the purpose of
enforcing the provisions of this subsection.''.
SEC. 4. COMPLIANCE WITH MODEL STATUTE OR QUALIFYING STATUTE.
(a) In General.--A Tobacco Product Manufacturer or importer
may not sell in, deliver to, or place for delivery sale, or
cause to be sold in, delivered to, or placed for delivery
sale in a State that is a party to the Master Settlement
Agreement, any cigarette manufactured by a Tobacco Product
Manufacturer that is not in full compliance with the terms of
the Model Statute or Qualifying Statute enacted by such State
requiring funds to be placed into a qualified escrow account
under specified conditions, or any regulations promulgated
pursuant to such statute.
(b) Jurisdiction To Prevent and Restrain Violations.--
(1) In general.--The United States district courts shall
have jurisdiction to prevent and restrain violations of
subsection (a) in accordance with this subsection.
(2) Initiation of action.--A State, through its attorney
general, may bring an action in the United States district
courts to prevent and restrain violations of subsection (a)
by any person (or by any person controlling such person).
(3) Attorney fees.--In any action under paragraph (2), a
State, through its attorney general, shall be entitled to
reasonable attorney fees from a person found to have
willfully and knowingly violated subsection (a).
(4) Nonexclusivity of remedies.--The remedy available under
paragraph (2) is in addition to any other remedies available
under Federal, State, or other law. No provision of this Act
or any other Federal law shall be held or construed to
prohibit or preempt the Master Settlement Agreement, the
Model Statute (as defined in the Master Settlement
Agreement), any legislation amending or complementary to the
Model Statute in effect as of June 1, 2006, or any
legislation substantially similar to such existing, amending,
or complementary legislation hereinafter enacted.
(5) Other enforcement actions.--Nothing in this subsection
shall be construed to prohibit an authorized State official
from proceeding in State court or taking other enforcement
actions on the basis of an alleged violation of State or
other law.
(6) Authority of the attorney general.--The Attorney
General of the United States may administer and enforce
subsection (a).
(c) Definitions.--In this section the following definitions
apply:
(1) Delivery sale.--The term ``delivery sale'' means any
sale of cigarettes or smokeless tobacco to a consumer if--
(A) the consumer submits the order for such sale by means
of a telephone or other method of voice transmission, the
mails, or the Internet or other online service, or the seller
is otherwise not in the physical presence of the buyer when
the request for purchase or order is made; or
(B) the cigarettes or smokeless tobacco are delivered by
use of a common carrier, private delivery service, or the
mails, or the seller is not in the physical presence of the
buyer when the buyer obtains possession of the cigarettes or
smokeless tobacco.
(2) Importer.--The term ``importer'' means each of the
following:
(A) Shipping or consigning.--Any person in the United
States to whom non-tax-paid tobacco products manufactured in
a foreign country, Puerto Rico, the Virgin Islands, or a
possession of the United States are shipped or consigned.
(B) Manufacturing warehouses.--Any person who removes
cigars or cigarettes for sale or consumption in the United
States from a customs-bonded manufacturing warehouse.
(C) Unlawful importing.--Any person who smuggles or
otherwise unlawfully brings tobacco products into the United
States.
(3) Master settlement agreement.--The term ``Master
Settlement Agreement'' means the agreement executed November
23, 1998, between the attorneys general of 46
[[Page S8826]]
States, the District of Columbia, the Commonwealth of Puerto
Rico, and 4 territories of the United States and certain
tobacco manufacturers.
(4) Model statute; qualifying statute.--The terms ``Model
Statute'' and ``Qualifying Statute'' means a statute as
defined in section IX(d)(2)(e) of the Master Settlement
Agreement.
(5) Tobacco product manufacturer.--The term ``Tobacco
Product Manufacturer'' has the meaning given that term in
section II(uu) of the Master Settlement Agreement.
SEC. 5. UNDERCOVER CRIMINAL INVESTIGATIONS OF THE BUREAU OF
ALCOHOL, TOBACCO, FIREARMS AND EXPLOSIVES.
(a) Appropriations Available.--
(1) In general.--Commencing as of the date of the enactment
of this Act and without fiscal year limitation, the
authorities in section 102(b) of the Department of Justice
and Related Agencies Appropriations Act, 1993 (title I of
Public Law 102-395; 106 Stat. 1838) shall be available to the
Bureau of Alcohol, Tobacco, Firearms and Explosives for
undercover investigative operations of the Bureau which are
necessary for the detection and prosecution of crimes against
the United States.
(2) Conforming rule.--For purposes of the exercise by the
Bureau of Alcohol, Tobacco, Firearms and Explosives of the
authorities referenced in paragraph (1), a reference in
section 102(b) of the Department of Justice and Related
Agencies Appropriations Act, 1993 (title I of Public Law 102-
395; 106 Stat. 1838) to the Federal Bureau of Investigation
shall be deemed to be a reference to the Bureau of Alcohol,
Tobacco, Firearms and Explosives, and a reference to the
Director of the Federal Bureau of Investigation shall be
deemed to be a reference to the Director of the Bureau of
Alcohol, Tobacco, Firearms and Explosives.
(b) Limitations in Appropriations Acts.--The exercise of
the authorities referred to in subsection (a)(1) by the
Bureau of Alcohol, Tobacco, Firearms and Explosives shall be
subject to the provisions of appropriations Acts.
SEC. 6. INSPECTION BY BUREAU OF ALCOHOL, TOBACCO, FIREARMS
AND EXPLOSIVES OF RECORDS OF CERTAIN CIGARETTE
AND SMOKELESS TOBACCO SELLERS.
(a) In General.--Any officer of the Bureau of Alcohol,
Tobacco, Firearms and Explosives may, during normal business
hours, enter the premises of any person described in
subsection (b) for the purposes of inspecting--
(1) any records or information required to be maintained by
such person under the provisions of law referred to in
subsection (d); or
(2) any cigarettes or smokeless tobacco kept or stored by
such person at such premises.
(b) Covered Persons.--Subsection (a) applies to any person
who engages in a delivery sale, and who ships, sells,
distributes, or receives any quantity in excess of 10,000
cigarettes, or any quantity in excess of 500 single-unit
consumer-sized cans or packages of smokeless tobacco, within
a single month.
(c) Relief.--
(1) In general.--The district courts of the United States
shall have the authority in a civil action under this
subsection to compel inspections authorized by subsection
(a).
(2) Violations.--Whoever violates subsection (a) or an
order issued pursuant to paragraph (1) shall be subject to a
civil penalty in an amount not to exceed $10,000 for each
violation.
(d) Covered Provisions of Law.--The provisions of law
referred to in this subsection are--
(1) the Act of October 19, 1949 (15 U.S.C. 375; commonly
referred to as the ``Jenkins Act'');
(2) chapter 114 of title 18, United States Code; and
(3) this Act.
(e) Delivery Sale Defined.--In this section, the term
``delivery sale'' has the meaning given that term in 2343(e)
of title 18, United States Code, as amended by section
4(d)(4).
SEC. 7. COMPLIANCE WITH TARIFF ACT OF 1930.
(a) Inapplicability of Exemptions From Requirements for
Entry of Certain Cigarettes.--Section 802(b)(1) of the Tariff
Act of 1930 (19 U.S.C. 1681a(b)(1)) is amended by adding at
the end the following: ``This paragraph shall not apply to
any cigarettes sold in connection with a delivery sale (as
that term is defined in section 1(6) of the Act of October
19, 1949 (commonly referred to as the `Jenkins Act')).''.
(b) State and Tribal Access to Customs Certifications.--
Section 802 of the Tariff Act of 1930 (19 U.S.C. 1681a) is
amended by adding at the end the following:
``(d) State and Tribal Access to Customs Certifications.--A
State, through its attorney general, and an Indian tribe (as
that term is defined in section 4(e) of the Indian Self-
Determination and Education Assistance Act (25 U.S.C.
450b(e)), through its chief law enforcement officer, shall be
entitled to obtain copies of any certification required
pursuant to subsection (c) directly--
``(1) upon request to the agency of the United States
responsible for collecting such certification; or
``(2) upon request to the importer, manufacturer, or
authorized official of such importer or manufacturer.''.
(c) Enforcement Provisions.--Section 803 of the Tariff Act
of 1930 (19 U.S.C. 1681b) is amended--
(1) in subsection (b)--
(A) in the first sentence--
(i) by inserting ``any State of'' before ``the United
States'' the first and second places it appears; and
(ii) by inserting before the period the following: ``, to
any State in which such tobacco product, cigarette papers, or
tube was imported, or to the Indian tribe of any Indian
country (as that term is defined in section 1151 of title 18,
United States Code) in which such tobacco product, cigarette
papers, or tube was imported''; and
(B) in the second sentence, by inserting ``, or to any
State or Indian tribe,'' after ``the United States''; and
(2) by adding at the end the following:
``(c) Actions by States and Others.--
``(1) Persons dealing in tobacco products.--Any person who
holds a permit under section 5712 of the Internal Revenue
Code of 1986 (regarding permitting of manufacturers and
importers of tobacco products and export warehouse
proprietors) may bring an action in the United States
district courts to prevent and restrain violations of this
title by any person (or by any person controlling such
person), other than a State, local, or tribal government.
``(2) State, local, and tribal governments.--A State,
through its attorney general, or a local government or tribe
through its chief law enforcement officer (or a designee
thereof), may bring a civil action under this title to
prevent and restrain violations of this title by any person
(or by any person controlling such person) or to obtain any
other appropriate relief for violations of this title by any
person (or from any person controlling such person),
including civil penalties, money damages, and injunctive or
other equitable relief.
``(3) Construction generally.--
``(A) In general.--Nothing in this subsection shall be
deemed to abrogate or constitute a waiver of any sovereign
immunity of a State or local government or Indian tribe
against any unconsented lawsuit under this title or to
otherwise restrict, expand, or modify any sovereign immunity
of a State, local government, or Indian tribe.
``(B) Construction with other relief.--The remedies
available under this subsection are in addition to any other
remedies available under Federal, State, local, tribal, or
other law.
``(4) Construction with forfeiture provisions.--Nothing in
this subsection shall be construed to require a State or
Indian tribe to first bring an action under to paragraph (1)
when pursuing relief under subsection (b).
``(d) Construction With Other Authorities.--Nothing in this
title shall be construed to expand, restrict, or otherwise
modify the right of--
``(1) an authorized State official from proceeding in State
court, or taking other enforcement actions, on the basis of
alleged violation of State or other law; or
``(2) an authorized Indian tribal government official from
proceeding in tribal court, or taking other enforcement
actions, on the basis of alleged violation of tribal law.''.
(d) Inclusion of Smokeless Tobacco.--
(1) In general.--Sections 802 and 803(a) of the Tariff Act
of 1930 (19 U.S.C. 1202 et seq.) are amended by inserting
``or smokeless tobacco products'' after ``cigarettes'' each
place it appears.
(2) Conforming amendments.--
(A) Requirements for entry.--Section 802 of the Tariff Act
of 1930 (19 U.S.C. 1681a) is amended--
(i) in the heading, by inserting ``AND SMOKELESS TOBACCO''
after ``CIGARETTES'';
(ii) in subsection (a)--
(I) in paragraph (1), by inserting ``or section 4 of the
Comprehensive Smokeless Tobacco Health Education Act of 1986
(15 U.S.C. 4403), respectively'' after ``section 7 of the
Federal Cigarette Labeling and Advertising Act (15 U.S.C.
1335a)'';
(II) in paragraph (2), by inserting ``or section 3 of the
Comprehensive Smokeless Tobacco Health Education Act of 1986
(15 U.S.C. 4402), respectively,'' after ``section 4 of the
Federal Cigarette Labeling and Advertising Act (15 U.S.C.
1333)''; and
(III) in paragraph (3), by inserting ``or section 3(d) of
the Comprehensive Smokeless Tobacco Health Education Act of
1986 (15 U.S.C. 4402(d)), respectively,'' after ``section
4(c) of the Federal Cigarette Labeling and Advertising Act
(15 U.S.C. 1333(c))'';
(iii) in subsection (b)--
(I) in the heading of paragraph (1), by inserting ``or
smokeless tobacco'' after ``cigarettes''; and
(II) in the heading of paragraphs (2) and (3), by inserting
``or smokeless tobacco'' after ``Cigarettes''; and
(iv) in subsection (c)--
(I) in the heading, by inserting ``or Smokeless Tobacco''
after ``Cigarette'';
(II) in paragraph (1), by inserting ``or section 4 of the
Comprehensive Smokeless Tobacco Health Education Act of 1986
(15 U.S.C. 4403), respectively'' after ``section 7 of the
Federal Cigarette Labeling and Advertising Act (15 U.S.C.
1335a)'';
(III) in paragraph (2)(A), ``or section 3 of the
Comprehensive Smokeless Tobacco Health Education Act of 1986
(15 U.S.C. 4402), respectively,'' after ``section 4 of the
Federal Cigarette Labeling and Advertising Act (15 U.S.C.
1333)''; and
(IV) in paragraph (2)(B), by inserting ``or section 3(d) of
the Comprehensive Smokeless Tobacco Health Education Act of
1986 (15 U.S.C. 4402(d)), respectively'' after ``section 4(c)
of the Federal Cigarette Labeling and Advertising Act (15
U.S.C. 1333(c))''.
[[Page S8827]]
(B) Enforcement.--Section 803(b) of the Tariff Act of 1930
(19 U.S.C. 1681b(b)) is amended by inserting ``, or any
smokeless tobacco product,'' after ``or tube'' the first
place it appears.
(C) Title heading.--The heading of title VIII of the Tariff
Act of 1930 (19 U.S.C. 1681 et seq.) is amended by inserting
``AND SMOKELESS TOBACCO'' after ``CIGARETTES''.
SEC. 8. EXCLUSIONS REGARDING INDIAN TRIBES AND TRIBAL
MATTERS.
(a) In General.--Nothing in this Act or the amendments made
by this Act is intended nor shall be construed to affect,
amend, or modify--
(1) any agreements, compacts, or other intergovernmental
arrangements between any State or local government and any
government of an Indian tribe (as that term is defined in
section 4(e) of the Indian Self-Determination and Education
Assistance Act (25 U.S.C. 450b(e)) relating to the collection
of taxes on cigarettes or smokeless tobacco sold in Indian
country (as that term is defined in section 1151 of title 18,
United States Code);
(2) any State laws that authorize or otherwise pertain to
any such intergovernmental arrangements or create special
rules or procedures for the collection of State, local, or
tribal taxes on cigarettes or smokeless tobacco sold in
Indian country;
(3) any limitations under existing Federal law, including
Federal common law and treaties, on State, local, and tribal
tax and regulatory authority with respect to the sale, use,
or distribution of cigarettes and smokeless tobacco by or to
Indian tribes or tribal members or in Indian country;
(4) any existing Federal law, including Federal common law
and treaties, regarding State jurisdiction, or lack thereof,
over any tribe, tribal members, or tribal reservations; and
(5) any existing State or local government authority to
bring enforcement actions against persons located in Indian
country.
(b) Coordination of Law Enforcement.--Nothing in this Act
or the amendments made by this Act shall be construed to
inhibit or otherwise affect any coordinated law enforcement
effort by 1 or more States or other jurisdictions, including
Indian tribes, through interstate compact or otherwise,
that--
(1) provides for the administration of tobacco product laws
or laws pertaining to interstate sales or other sales of
tobacco products;
(2) provides for the seizure of tobacco products or other
property related to a violation of such laws; or
(3) establishes cooperative programs for the administration
of such laws.
(c) Treatment of State and Local Governments.--Nothing in
this Act or the amendments made by this Act is intended, and
shall not be construed to, authorize, deputize, or commission
States or local governments as instrumentalities of the
United States.
(d) Enforcement Within Indian Country.--Nothing in this Act
or the amendments made by this Act is intended to prohibit,
limit, or restrict enforcement by the Attorney General of the
United States of the provisions herein within Indian country.
(e) Ambiguity.--Any ambiguity between the language of this
section or its application and any other provision of this
Act shall be resolved in favor of this section.
SEC. 9. EFFECTIVE DATE.
(a) In General.--Except as provided in subsection (b), this
Act shall take effect on the date that is 90 days after the
date of enactment of this Act.
(b) BATFE Authority.--
(1) In general.--Sections 6 and 7 shall take effect on the
date of enactment of this Act.
(2) Definition.--For purposes of section 7, the definition
of delivery sale in section 2343(e)(1) of title 18, United
States Code, as amended by section 4(d)(4) of this Act, shall
take effect on the date of enactment of this Act.
SEC. 10. SEPARABILITY.
If any provision of this Act or the application thereof to
any person or circumstance is held invalid, the remainder of
the Act and the application of it to any other person or
circumstance shall not be affected thereby.
______
By Mr. HATCH (for himself, Mr. Bingaman, and Mr. Biden):
S. 3811. A bill to require the payment of compensation to members of
the Armed Forces and civilian employees of the United States who
performed slave labor for Japanese industries during World War II, or
the surviving spouses of such members, and for other purposes; to the
Committee on Armed Services.
Mr. HATCH. Mr. President, it is my privilege today to introduce
legislation that attempts to right wrongs and help those who have
suffered.
I can think of few Americans who have suffered more than those brave
World War II veterans who were subjected to slave labor conditions by
Japanese industries during that difficult conflict. This legislation
would provide long overdue compensation to our brave veterans who were
forced into slave labor by our enemies.
Some might ask: why don't these veterans seek a remedy from the
courts? The answer is that they have. Unfortunately, due to decisions
that were made during the Cold War, our government relinquished the
right of these veterans to successfully seek redress of their
grievances on this matter in our nation's courts.
Regrettably, the Japanese Government has also declined to provide
compensation.
Today, many of these American POWs are now in their eighties and
nineties. Every day, more and more of these veterans pass away without
ever realizing that their country truly cares for them and wants to
right the wrongs of the past. If those who remain are to receive
compensation, they must receive it now or this injustice will never be
righted.
Remember, many of these men are the survivors of the Bataan Death
March, which occurred in April of 1942 when the 70,000 Allied troops
that comprised the defense of Bataan peninsula were ordered to
surrender. Corregidor would fall a month later, but for the soldiers of
Bataan the infamous Death March from the peninsula to holding camps
throughout the Philippines was about to begin. During this march of 85
miles approximately 10,000 Allied forces were killed.
American POWs in the Pacific theater are also the survivors of the
``Hell Ships'' where servicemembers were placed in cargo ships destined
for Japanese industrial sites. These ships were usually incredibly
overcrowded and American POWs were subject to the horrific sanitary and
living conditions.
After all this, when American servicemembers arrived at their
destination, the majority were treated as slave labor, they faced
fierce corporal punishment for minor infractions, and unnecessary
starvation and cruel work environments.
It is important to note that this bill, which I am honored to say is
cosponsored by Senator Bingaman and Senator Biden, is not to embarrass
or to ridicule the people of Japan; far from it. For over 60 years,
Japan has been one of our great allies. As the ranking member on the
Senate Intelligence Committee, I well know the invaluable support and
assistance that Japan has rendered in the global war on terrorism,
including committing hundreds of ground troops to assist in the
development of Iraq's infrastructure. I know that all Americans are
grateful for this assistance.
Mr. President, it is time to do the right thing and provide these
veterans with the minimal level of compensation they deserve. I believe
that this limited compensation is a debt of honor that we should not
withhold.
______
By Mr. ISAKSON (for himself and Mr. Reed):
S. 3812. A bill to require the Food and Drug Administration to
conduct consumer testing to determine the appropriateness of the
current labeling requirements for indoor tanning devices and determine
whether such requirements provide sufficient information to consumers
regarding the risks that the use of such devices pose for the
development of irreversible damage to the skin, including skin cancer,
and for other purposes; to the Committee on Health, Education, Labor,
and Pensions.
Mr. REED. Mr. President, I rise today, along with my colleague,
Senator Isakson, to introduce the Tanning Accountability and
Notification--TAN--Act of 2006. A House counterpart measure was
introduced by Representatives Maloney and Brown-Waite in February.
Close to a million people will be diagnosed with skin cancer this
year. Approximately 1 in 5 Americans will develop skin cancer in their
lifetime, and these numbers are on the rise.
There are many factors that contribute to these startling figures. In
recent years efforts have been undertaken by various organizations to
better inform the public about the risk of sun exposure and ways to
decrease the chance of developing skin cancer. One area, however, where
better information is sorely needed is on the use of indoor tanning
salons.
Every day approximately 1 million people visit a tanning salon. It is
a practice particularly popular among teens, the group that seems most
at risk from the effects of indoor tanning. The American Academy of
Dermatology, the Food and Drug Administration, FDA, the National
Institutes of
[[Page S8828]]
Health, NIH, the Centers for Disease Control and Prevention, CDC, and
the World Health Organization, WHO, all discourage the use of indoor
tanning equipment.
This message and the current information about the risks of indoor
tanning I fear are not being adequately passed on to consumers. The FDA
has not updated its warnings on tanning beds since 1979. Regular users
of indoor tanning beds deserve to be fully informed.
The TAN Act calls upon the FDA to revisit the current label on indoor
tanning beds and determine through a process of public hearings and
consumer testing what kind of labeling requirements would convey
important information on the risks of indoor tanning.
This legislation is not about introducing new regulations but
ensuring that the current FDA regulations remain effective in
communicating accurate, current, and clear information to consumers of
indoor tanning salons.
I look forward to working with my colleagues towards passage of this
important, bipartisan legislation. Mr. President, I ask unanimous
consent that the text of the bill be printed in the Record.
______
By Mr. SMITH (for himself, Mr. Bingaman, and Ms. Murkowski):
S. 3813. A bill to permit individuals who are employees of a grantee
that is receiving funds under section 330 of the Public Health Service
Act to enroll in health insurance coverage provided under the Federal
Employees Health Benefits Program; to the Committee on Homeland
Security and Governmental Affairs.
Mr. SMITH. Mr. President, today I am introducing the Community Health
Center Employee Health Coverage Act, a bill that will help provide
community health centers, CHCs, better access to more affordable health
insurance for their employees. I am pleased to have my colleagues
Senators Bingaman and Murkowski join me as original cosponsors on this
important proposal.
CHCs form the backbone of the Nation's health care safety net. They
provide essential medical services to some of our most vulnerable
citizens, including the uninsured and Medicaid and Medicare
beneficiaries. In my home State of Oregon, health centers provide over
130 points of access, where upwards of 180,000 individuals receive care
each year. Approximately 41 percent of those served are uninsured and
36 percent are on Medicaid, and most all reside in either a rural or
economically depressed area. Clearly, CHCs have an important role in
ensuring that those who otherwise might be unable to afford health
coverage have access to the care they need.
CHCs also serve their patients in a very efficient manner. Studies
have shown that care provided Medicaid patients at CHCs costs 30
percent less than care provided in other settings. This is mainly due
to a lower number of specialty referrals and fewer overall hospital
admissions. CHCs effectively demonstrate how focusing on primary and
preventive care can help keep individuals healthier, which ultimately
enhances their lives and saves the broader health care system money.
Above and beyond the efficiencies CHCs have achieved in service
delivery, patients report overwhelming satisfaction for the treatment
they are provided. Health care providers across the spectrum would be
well-served by emulating CHCs' example of delivering affordable, high-
quality health care in an efficient manner.
Given the enormous value CHCs have to the U.S. health care system, I
believe Congress should do all it can to support their mission. I
commend President Bush's commitment to increasing funding for health
center expansion in recent years. I am pleased the administration's
request for $180 million in new funding in fiscal year 2007 was
included in the Senate's version of the budget resolution. As the
appropriations process continues to move forward, I hope that those
much-needed funds are ultimately approved by Congress.
The bill I am filing today will compliment the increased funding CHCs
have received in recent years. Just like businesses across the nation,
health centers are coping with the rising cost of providing health
benefits to their employees. Premiums for private health insurance grew
by 9.5 percent in 2005--the fifth consecutive year of increases over 9
percent. Because CHCs operate on very limited budgets, it has become
more and more difficult for them to absorb these increased costs while
continuing to provide affordable health care to their patients.
It is important to note that CHCs rely upon the Federal Government
for more than half of their operating revenues. Each year, health
centers receive 26 percent of their funding from direct Federal grants
and another 36 percent from the Medicaid Program. Because CHCs are
predominantly a Federal enterprise, I believe it makes sense for them
to be able to reap many of the same benefits of other Federal entities.
That is why the bill I am filing today would allow CHCs to purchase
more affordable health insurance coverage for their employees through
the Federal Employee Health Benefits Program, FEHBP.
Allowing federally funded entities to purchase health coverage
through FEHBP is not unprecedented. Employees of Gallaudet University
and certain U.S. Department of Agriculture grantees already are able to
participate in FEHBP as if they were directly employed by the Federal
Government. Considering that CHC providers are already deemed ``Federal
employees'' for the purpose of receiving medical liability protection
through the Federal Government, it is a logical next step to allow them
to purchase health coverage through FEHBP. In doing so, we will be able
to provide CHCs much needed security in knowing that their employees
will have steady access to affordable health insurance.
I believe that in the long run, CHCs will be able to achieve a great
deal of savings by purchasing health coverage for their employees
through FEHBP. Premiums for policies purchased through FEHBP
consistently grow at a much slower rate than other commercial policies.
Every dollar CHCs save in employee benefit costs can be redirected into
medical care for the vulnerable populations they serve. Access to FEHBP
coverage also may help some CHCs provide health benefits to their
employees for the first time. This could help recruit much needed
medical personnel in underserved and rural communities. I am hopeful
health centers in rural parts of my State will be able to attract the
physicians they so desperately need by offering them FEHBP coverage.
There is wide support for CHCs in the Senate, as evidenced by the
introduction of two other CHC-related measures this week. Senator
Bingaman and I also are filing the Strengthen the Safety Net Act that
will allocate unspent Medicaid disproportionate share hospital funds to
CHCs and other community-based health care providers. And, I am joining
a bipartisan group of my colleagues in introducing the CHC
Reauthorization Act to ensure that CHCs can continue providing health
care to some of our most vulnerable citizens for years to come. I hope
the Senate's leadership will move this package of three bills quickly
through the process, as a sign of appreciation for the important role
CHCs play in the U.S. health care system.
______
By Mr. SMITH (for himself and Mrs. Lincoln):
S. 3815. A bill to improve the quality of, and access to, long-term
care; to the Committee on Finance.
Mr. SMITH. Mr. President, I rise today to introduce the Long-Term
Care Quality and Modernization Act of 2006. I am pleased to be joined
by my colleague, Senator Blanche Lincoln of Arkansas.
As chairman of the Senate Special Committee on Aging, I am committed
to improving the financing and delivery of long-term care. The Centers
for Medicare and Medicaid Services estimate that national spending for
long-term care was almost $160 billion in 2002, representing about 12
percent of all personal health care expenditures. While those numbers
are already staggering, we also know that the need for long-term care
is expected to grow significantly in coming decades. Almost two-thirds
of people receiving long-term care are over age 65, with this number
expected to double by 2030.
I know that providing quality long-term care services for America's
frail, elderly, and disabled is the priority of
[[Page S8829]]
nursing homes and assisted-living facilities. I applaud their work but
recognize we must do more to improve care and contain costs. When you
consider that 8 of 10 nursing home residents rely on Medicare and
Medicaid for their long-term care needs, it is apparent that Congress
has a responsibility to improve these programs so they are sustainable
for years to come.
That is why I am introducing the Long-Term Care Quality and
Modernization Act of 2006 with Senator Lincoln. This bill will address
several problems nursing homes are experiencing with payments,
regulations, workforce shortages, taxes, and disaster preparedness
funding. The issue of long-term care expenditures need not be an
insurmountable task. It will require action and cooperation by public
officials and private providers as we work to find ways to help
Americans become better prepared for their long-term care needs.
However, we cannot do it alone. Individuals must take responsibility
and begin planning for their long-term care needs. With our national
savings rate in steady decline, I fear the American middle class is
woefully unprepared to meet the coming challenges of their long-term
care. As we move forward in our effort to help individuals stay
financially stable in their later years, we must encourage them to
purchase long-term care insurance and save for long-term care services.
Included in the bill I am introducing today is the Long-Term Care Trust
Account Act of 2006. My legislation will create a new type of savings
vehicle for the purpose of preparing for the costs associated with
long-term care services and purchasing long-term care insurance. An
individual who establishes a long-term care trust account can
contribute up to $5,000 per year to their account and receive a
refundable 10 percent tax credit on that contribution. Interest accrued
on these accounts will be tax free, and funds can be withdrawn for the
purchase of long-term care insurance or to pay for long-term care
services. The bill will also allow an individual to make contributions
to another person's long-term care trust account. This will help many
people in our country who want to help their parents or a loved one
prepare for their health care needs.
It is my hope that this legislation will help all Americans save for
their long-term care needs. I urge my colleagues on both sides of the
aisle to support this important bill.
______
By Ms. COLLINS:
S. 3816. A bill to prohibit the shipment of tobacco products in the
mail, and for other purposes; to the Committee on Homeland Security and
Governmental Affairs.
Ms. COLLINS. Mr. President, I rise today to introduce legislation
that will help crack down on illegal sales of tobacco to underaged
young people by banning the shipment of cigarettes and other tobacco
products through the U.S. mail. Not only does the delivery of
cigarettes and other tobacco products through the mail create
opportunities for tax evasion, but it also creates an easy means
through which children and young people can obtain these potentially
deadly products.
Tobacco remains the No. 1 preventable cause of death in the United
States today, accounting for more than 400,000 deaths a year and
billions of dollars in health care costs. Moreover, tobacco addiction
is a ``teen-onset'' disease: Ninety percent of all smokers start before
they are 21. If we are to put an end to this tragic, yet preventable,
epidemic, we must accelerate our efforts not only to help more smokers
to quit, but also to discourage young people from ever lighting up in
the first place.
Internet sales of tobacco are growing and growing fast.
Unfortunately, effective safeguards against illegal sales to young
people are virtually nonexistent on the more than 400 Web sites selling
tobacco, making it easier and cheaper for kids to buy cigarettes.
A 2002 American Journal of Public Health study found that 20 percent
of cigarette-selling Web sites do not say anything about sales to
minors being prohibited. More than half require only that the buyer say
they are of legal age. Another 15 percent require only that the buyer
type in their date of birth, and only 7 percent require any driver's
license information.
It is no wonder that Internet ``stings'' conducted by attorneys
general in at least 15 States have found that children as young as 9
years old are able to purchase cigarettes easily. One study in The
Journal of the American Medical Association reported that kids as young
as 11 were successful more than 90 percent of the time in purchasing
cigarettes over the Internet. Moreover, since Internet cigarette
vendors typically require a two-carton minimum purchase, many high
school and middle school buyers of Internet tobacco also end up serving
as suppliers of cigarettes to other kids.
In an effort to combat this problem, all of the major credit card
companies have taken steps to ensure that their systems are not used to
process payments for illegal cigarette sales. Moreover, all of the
major commercial carriers--UPS, DHL and FedEx--have agreed to put a
stop to the mail order sale and delivery of tobacco products. This
leaves our U.S. Postal Service as the sole remaining courier for the
delivery of tobacco products to minors. I believe that it is time for
us to close this final delivery gap so that cigarettes and other
tobacco products are not so easily accessible to our Nation's children.
The Postal Code already makes it illegal to mail alcoholic beverages
and guns. The legislation I am introducing today will amend title 39 of
the United States Code to add cigarettes and smokeless tobacco to the
list of restricted, nonmailable matter. Any person found guilty of
mailing such a product would be liable for a civil penalty of up to
$5,000 or 10 times the estimated retail value of the tobacco products,
including all Federal, State, and local taxes, whichever is highest,
for a first violation. Civil penalties of up to $100,000 would be
imposed for a second or each subsequent violation.
Mr. President, the U.S. Postal Service should not be the delivery
agent for illegal cigarette traffickers. The legislation I am
introducing today will close a loophole that has allowed Internet and
mail order companies to circumvent the law, and I urge my colleagues to
support this reform.
______
By Mr. HATCH (for himself and Mr. Leahy):
S. 3818. A bill to amend title 35, United States Code, to provide for
patent reform; to the Committee on the Judiciary.
Mr. HATCH. Mr. President, I rise today to introduce with Senator
Leahy the Patent Reform Act of 2006.
This bill addresses many of the issues and problems that my
colleague, Senator Leahy, and I have identified through a series of
hearings and discussions with stakeholders. We also had the benefit of
knowing the priorities identified by Chairman Lamar Smith and Ranking
Democratic Member Berman, who have introduced an analogous bill in the
House.
I would like to thank the Senator Leahy for all of his hard work and
assistance in developing this bill and for his willingness to reach a
compromise on those issues where our policy views conflicted.
This bill is not perfect, and is not the bill that either I or my
esteemed cosponsor would have introduced independently, but I believe
that it fairly reflects a compromise between my priorities and the
priorities of Senator Leahy.
We have also attempted to achieve some balance between the priorities
identified by the various industries and stakeholders that we consulted
while formulating our policy views in this area.
I am sure that further refinements will be made to this bill during
the legislative process, so I would encourage those who are either
pleased or displeased by any of the aspects of the bill to continue
working with us to resolve any outstanding issues.
This bill addresses many of the problems with the substantive,
procedural, and administrative aspects of the patent system, which
governs how entities here in the United States apply for, receive, and
eventually make use of patents covering everything from computer chips
to pharmaceuticals to medical devices to--I am told--at least one
variety of crustless peanut butter and jelly sandwich.
As the Founding Fathers made clear in Article 1, section 8 of the
Constitution, Congress is charged with ``promot[ing] the Progress of
Science
[[Page S8830]]
and useful Arts, by securing for limited Times to Authors and Inventors
the exclusive Right to their respective Writings and Discoveries.''
There is a growing consensus among those who use the patent system
that significant reform is needed.
While there appears to be a high degree of consensus on some issues
relating to patent reform--such as the advisability of creating a new
post-grant review process, there are significant disagreements about
other changes to the patent system and about how best to streamline
patent litigation.
By all accounts, patent litigation has become a significant problem
in some industries. There are a number of factors in patent law that
drive up the cost and uncertainty of litigation in ways that are
unjustified. However, some of the principal problems and costs
associated with patent litigation are not uniform across industrial
sectors. This has led to substantial and sometimes vociferous
disagreements about the nature of the underlying problems and, thus,
what the appropriate solutions might be. We have done our best to
resolve these disagreements based on our judgment about what is likely
to preserve a balance between patent holders and alleged infringers in
these actions.
There is also substantial consensus regarding a number of basic,
structural changes to the patent system. The most significant of these
involves moving from our current first-to-invent system to something
approximating a first-to-file rule in determining which of two
conflicting inventors has the right to obtain a patent.
While there is general agreement regarding some of the changes
necessary to move toward a first-to-file system, there are some
disagreements that remain unresolved by the current language of this
bill. Although we have done our best to preserve many of the principles
defining what constitutes ``prior art'' under current law, patent
experts continue to disagree over whether we have achieved this goal.
Additionally, shortly before introduction, a concern emerged that we
had not adequately preserved the changes enacted by the Cooperative
Research and Technology Enhancement Act--CREATE Act, P.L. 108-453--
involving some types of double patenting. Since Senator Leahy and I
were original cosponsors of that law, I can assure you that we will be
receptive to concerns in this regard and try to fix them.
With that preface, I would like to discuss several of the more
significant changes made to the current patent system by this bill.
Sections 1 and 2 of the bill contain the short title, table of
contents, and other similar provisions. Sections 3 and 4 contain
amendments to implement the first-to-file rule and other changes to the
manner in which patent applications are filed with the Patent and
Trademark Office and the process governing the examination of
applications. Much of this language is similar to language in previous
bills. However, as I have mentioned, several significant issues remain
unresolved, and we will continue to work with stakeholders and other
members to ensure an appropriate resolution.
Section 5 changes the remedies available to plaintiffs in patent
infringement suits, as well as the available defenses to patent
infringement. The two most substantial changes involve limitations on
the availability of enhanced damages upon a showing of ``willful''
infringement by a plaintiff and a parallel limitation on the
availability of unenforceability under the doctrine of ``inequitable
conduct.'' Willfulness and inequitable conduct were two of the three
major subjective elements that were identified in a major report on the
current patent system by the National Research Council of the National
Academy of Sciences. The report, entitled ``A Patent System for the
21st Century,'' recommended limiting both willfulness and the
inequitable conduct defense to streamline patent litigation. We were
unable to reach agreement on repealing the ``best mode'' requirement,
which was the third subjective element identified both in the report
and by various stakeholders, but I am hopeful that we will continue to
work toward a mutually-acceptable compromise on that issue.
Section 5 also contains a provision expanding ``prior user rights.''
These prior user rights are, in reality, a defense to infringement
liability for those making or preparing to make commercial use of an
invention prior to a patent being issued. Prior to a patent's issuance,
such a user often has no way of knowing that he is--or will be--
infringing a patent. In some cases, the user has independently invented
the subject matter in question, in which case it would be inequitable
to subject him or her to infringement liability. Currently, the prior
user defense is available only with respect to method patents. The bill
expands the prior user defense to all categories of patents and makes
related changes to this defense.
Additionally, Section 5 contains two of the more controversial
provisions in the bill. The first is a rough codification of an
``apportionment'' rule for calculation of damages. There is an
existing, uncodified rule for such apportionment that exists in case
law. However, codifying the rule will increase its clarity and mandate
its application in all appropriate cases.
The second controversial provision in this section is a mandatory fee
shifting provision. The language of this provision requires courts to
award attorneys' fees to a prevailing party in cases where the non-
prevailing party's legal position was not substantially justified. This
language is similar to the test used in the Equal Access to Justice
Act. This provision is intended to discourage litigation in those cases
where a plaintiff's or defendant's case is so weak as to be objectively
unreasonable.
Finally, this section also contains a repeal of Section 271(f) of
Title 35. Under current law, either a foreign or domestic patent holder
may be able to obtain damages based on foreign uses of domestically-
manufactured components of an infringing article. In essence, current
law provides for the extraterritorial application of domestic law in a
manner that benefits foreign manufacturers and patentees in some
situations.
Section 6 contains procedures for instituting a new type of post-
grant review preceding that will allow the validity of a patent to be
challenged in an administrative proceeding conducted by the Patent and
Trademark Office rather than in court litigation.
Under current law, there are narrow reexamination procedures by which
the PTO may reconsider a patent's validity at the request of an
interested party. However, current reexamination proceedings are very
limited and do not allow for a full consideration of a patent's
validity. As a result, even when reexamination is available, potential
litigants generally wait to challenge a patent's validity until an
infringement suit has been brought despite the higher costs and
prolonged uncertainty of doing so.
I believe that by adopting a more robust post-grant review proceeding
we are providing a more efficient means of challenging a patent's
validity in an administrative proceeding. This is necessary to address
systemic problems in our patent system, making post-grant review an
essential component of any meaningful reform legislation. While there
appears to be substantial agreement regarding the need for a more
meaningful post-issuance review, there are strong disagreements over
its specific attributes and scope.
During hearings conducted in the Subcommittee on Intellectual
Property and during meetings with stakeholders, we encountered widely
disparate proposals and suggestions regarding post-grant review from
stakeholders, academics, and lawmakers. At one end of the spectrum are
proposals that would create a low-cost, streamlined proceeding by
simply expanding the current inter partes reexamination. At the other
end of the spectrum are those that would like to see the creation of
specialized patent courts that would partially supplant Federal court
litigation. With this bill, we have introduced a proposal that falls
somewhere in between these two extremes.
This bill institutes a robust post-grant opposition system. The new
procedures for post-grant cancellation proceedings create a new system
for challenging the validity of problematic or suspect patents, which
will allow those who are concerned about infringing such a patent to
test its validity in an administrative proceeding instead of waiting to
assert invalidity as a defense in an infringement action. The
[[Page S8831]]
new procedures are tiered in such a way as to encourage challenges to
occur within the first year after a patent's issuance. After the one-
year ``first window,'' challenges may still be brought by those who are
able to demonstrate a substantial economic stake in the outcome of the
proceeding. To deter piecemeal litigation, if a party institutes a
proceeding after the first year, any challenge to patentability
available to that party with respect to the patent must be either
raised or waived. Thus, a challenger who participates in a proceeding
outside the first year is estopped from raising any grounds relating to
patentability that were or could have been raised in the previous
challenge.
In addition to the new post-grant review proceedings, language in
section 9 of this bill makes substantial improvements to the existing
inter partes reexamination proceeding that are based on recommendations
from the PTO and stakeholders. The most significant change to the
reexamination proceedings is the modification of the estoppel effect of
such proceedings. Currently, participants in an inter partes
reexamination are barred from subsequently raising any grounds they
``raised or could have raised.'' Thus, parties who wish to challenge a
patent more than a year after its issuance will have the option of
bringing a narrow challenge that will not subject them to full estoppel
as an alternative to bringing a full post-grant opposition proceeding
or reserving their arguments for court. This approach provides a range
of alternatives to legitimate challengers, while still providing
balanced protections against harassing or abusive litigation for the
patentee.
Section 8 would amend the current statutory provision that determines
the appropriate venue for patent litigation. The intent of the venue
language is to serve as a starting point for discussions as to what
restrictions--if any--are appropriate on the venue in which patent
cases may be brought. Section 8 also contains a provision allowing for
interlocutory appeals of decisions involving the claim construction of
a patent. Again, this language is intended to generate discussion about
the current interplay between the Federal district and appellate
courts. As both academics and the patent bar have noted, the resolution
of the legal questions involving claim construction appear to be taking
up a greater and greater portion of the docket of the Federal circuit
court of appeals.
Given the high percentage of reversals on claims construction issues,
some experts believe that an interlocutory appeal of Markman decisions
might allow parties to resolve disputes as to claim construction more
decisively prior to proceeding to a full trial. Alternatively, other
experts believe that a return to the treatment of claims construction
as a mixed question of law and fact might induce more deferential
review by the appellate court. Still others have suggested that
increased expertise among the district court judges trying patent cases
might result in a lower reversal rate. In that regard, I should note
that Congressman Issa has a bill authorizing a pilot project that
appears to be a promising approach to increasing the expertise of
Federal judges who handle patent cases, and I am considering
introducing a similar bill here in the Senate. While I am not wedded to
any particular approach or combination of approaches, I believe this is
an issue that should receive serious attention and consideration by
Congress.
Section 9 of the bill includes additional statutory changes that
either implement or complement provisions found elsewhere in the bill.
It also includes expanded authority for the PTO to conduct substantive
rulemaking, as well as the changes to the inter partes reexamination
procedures that I mentioned previously.
Section 10 includes a generic effective date provision. Obviously, I
will need to modify the effective dates of the various provisions in
the bill once we have been able to assess the difficulty of
implementing various provisions in this bill.
In closing, I would like to thank my cosponsor, the senior Senator
from Vermont, for all the work he has put into this bill and to
compliment his intellectual property counsel, Susan Davies, for her
efforts as well. I am committed to moving this legislation forward and
hope that my colleagues will join me in my efforts to refine and enact
this important bill.
Mr. LEAHY. Mr. President, the Senate is about to adjourn for its
August recess--4 weeks when we get to reconnect with our constituents,
catch up on the concerns of our home States, and study our legislative
plans with a depth and attention that we cannot devote during the
hectic days we are in session. Some of us may even spend a little time
with our families and friends. As I have done in years past, I will be
in Vermont. The choice between spending August in Washington, DC, or
Middlesex, VT, has always been an easy one for me.
When the Senate is in session, our obligations are many and varied,
as important as they are diverse. We hold hearings, and then we pursue
followup questions. We try to engage in oversight, though that has not
been a particularly fruitful exercise with this current administration.
We investigate issues, and then we endeavor to craft solutions. We vote
and we caucus and we deliberate.
It is not always a process that yields results, but today I can
report it has. I am pleased to join with the chairman of the
Intellectual Property Subcommittee today in introducing a bipartisan
bill on patent reform. The bill is the result of almost 2 years of hard
work on hard issues. We held several hearings, had innumerable meetings
with a universe of interested participants in the patent system, and
received input from a number of voices in debate about patent reform.
We delved deeply into the myriad problems plaguing our patent system,
especially those that hinder the issuance of high-quality patents.
In introducing this bill together, we take a productive step toward
updating the most outdated aspects of the patent code and attempt to
bolster the Patent and Trademark Office in its administrative review of
patents throughout the process. We are striving to place incentives on
the parties with the most information to assist the PTO by sharing that
information. We place our patent system in line with much of the rest
of the world, by moving from a ``first-to-invent'' system to a ``first-
to-file.''
Congress needs to address the urgent needs for revision and renewal
in our patent system, and we must harness the impressive intellectual
power and varied experiences of all the players in the patent community
as we finalize our new laws. I believe that, while introducing this
bill today is not the end of the process--and indeed, in many respects,
it is truly the beginning--it is a significant accomplishment that we
have come together to set down a comprehensive approach to overhauling
our patent system. If the United States is to preserve its position at
the forefront of innovation, as the global leader in intellectual
property and technology, then we need to move forward, and this bill is
our first step. We must improve and enhance the quality of our patent
system and the patents it produces.
This legislation is not an option but a necessity. Senator Hatch and
I have made genuine progress on this complex issue. We agreed on many
salutary changes, but it can be no surprise that we differed on some
aspects of the effort as well. Recognizing the critical importance of
compromise, of offering a bill to the interested public to study and
improve, and of taking a clear first step down the path to genuine
reform, we both made concessions. This is not the bill I would have
introduced if I were the sole author, and I expect Senator Hatch would
say the same. I appreciate the concessions that Senator Hatch made. I
have tried to be both reasonable and accommodating in honoring my
commitment to him--a commitment that he requested specifically--to
introduce a bill before the August recess.
In particular, I am concerned about how some of the changes proposed
would affect the generic pharmaceutical industry, especially the
provision that would limit the ``inequitable conduct'' defense to only
those cases in which a patentee's willful deception of the PTO results
in an invalid patent claim. While I think we should expect the highest
caliber of behavior by those who are seeking patents--which are, after
all, often highly profitable government monopolies--surely we can at
[[Page S8832]]
least insist on an absence of affirmative deceit. I hope and expect
that we can continue the discussion on this issue as the year
progresses.
I also want to ensure the delicate balance we have struck in the
post-grant review process and make certain that the procedure is both
efficient and effective at thwarting some strategic behavior in patent
litigation and at promoting a healthier body of existing patents. Fee-
shifting, even in a limited set of cases, likewise raises concerns that
should have a more public airing.
I respect the necessity for considering and balancing a number of
different concerns as we draft comprehensive and complicated
legislation. I will never sacrifice the quality of the laws we produce
to expediency, but I recognize the utility of such compromises when, as
with this bill, introduction is a first step in a larger and longer
discussion.
I am extremely pleased that Senator Hatch and I have come together to
tackle these important and urgent issues. Many hours of hard work were
spent by both of our offices to develop legislative language so that we
can, today, jointly introduce a bill to move the debate forward. The
bill is a remarkable achievement and a substantial step toward real
reform. I look forward to continuing to work with Senator Hatch, other
members of the Senate Judiciary Committee, and the affected parties on
these matters.
______
By Mr. BINGAMAN (for himself, Mr. Smith, Mrs. Lincoln, Mr. Pryor,
and Mr. Akaka):
S. 3819. A bill to amend title XIX of the Social Security Act to
provide for redistribution and extended availability of unexpended
medicaid DSH allotments, and for other purposes; to the Committee on
Finance.
Mr. BINGAMAN. Mr. President, I rise today to introduce legislation
with Senators Smith, Lincoln, Pryor, and Akaka entitled the
``Strengthening the Safety Net Act of 2006.'' This legislation is
important to the continued survival of many of our Nation's safety net
hospitals that provide critical health care access to our Nation's 46
million uninsured citizens through the Medicaid disproportionate share
hospital, or DSH, program.
In recognition of the burden certain hospitals bear in providing a
large share of health services to the low-income patients, including
Medicaid and the uninsured, the Congress established the Medicaid DSH
program in the mid-1980s to give additional funding to support such
``disproportionate share'' hospitals. By providing financial relief to
these hospitals, the Medicaid DSH program maintains hospital access for
the poor. As the National Governors Association has said, ``Medicaid
DSH's funds are an important part of statewide systems of health care
access for the uninsured.''
Mr. President, I request unanimous consent for the text of the bill
and the text of the fact sheet on the legislation be printed in the
Record.
There being no objection, the text of the bill was ordered to be
printed in the Record, as follows:
S. 3819
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 ``Strengthening the Safety Net
Act of 2006''.
SEC. 2. REDISTRIBUTION AND EXTENDED AVAILABILITY OF
UNEXPENDED MEDICAID DSH ALLOTMENTS.
Section 1923(f) of the Social Security Act (42 U.S.C.
1396r-4(f)) is amended--
(1) in paragraph (3)(A), by striking ``paragraph (5)'' and
inserting ``paragraphs (5) and (7)'';
(2) by redesignating paragraph (7) as paragraph (8); and
(3) by inserting after paragraph (6), the following new
paragraph:
``(7) Redistribution and extended availability of
unexpended allotments.--
``(A) Establishment of redistribution pool.--
``(i) In general.--Subject to clauses (ii) and (iii), the
Secretary shall establish, as of October 1 of fiscal year
2007, and of each fiscal year thereafter, the following
redistribution pool:
``(I) In the case of fiscal year 2007, a $150,000,000
redistribution pool from the total amount of the unexpended
State DSH allotments for fiscal year 2004.
``(II) In the case of fiscal year 2008, a $250,000,000
redistribution pool from the total amount of the unexpended
State DSH allotments for fiscal year 2005.
``(III) In the case of fiscal year 2009 and each succeeding
fiscal year thereafter, a $400,000,000 redistribution pool
from the total amount of the unexpended State DSH allotments
for the third preceding fiscal year.
``(ii) Unexpended state dsh allotments.--If a State claims
Federal financial participation for a payment adjustment made
under this section for a fiscal year from which a
redistribution pool of unexpended State DSH allotments has
already been created under clause (i), then, for purposes of
this paragraph, the total amount of unexpended State DSH
allotments in the fiscal year following the State claim for
such Federal financial participation, shall be reduced by the
Federal financial participation related to such claim.
``(iii) Reduction in amounts available.--If the total
amount of the unexpended State DSH allotments for a fiscal
year (taking into account any adjustment to such amount
required under clause (ii)) is less than the amount necessary
to provide, for such fiscal year, the redistribution pool
described in clause (i) and the amounts to be made available
for grants under section 3(g) of the Strengthening the Safety
Net Act of 2006 for such fiscal year, the Secretary shall
reduce the amounts that are to be available for the
redistribution pool under this paragraph and grants under
such section, respectively, to such total amount.
``(B) Redistribution.--
``(i) In general.--Not later than October 1, 2006, and
October 1 of each year thereafter, the Secretary shall allot
the redistribution pool established for that fiscal year
among eligible States.
``(ii) Priority.--In making allotments under clause (i),
the Secretary shall give priority--
``(I) first to eligible States described in paragraph
(5)(B) (without regard to the requirement that total
expenditures under the State plan for disproportionate share
hospital adjustments for fiscal year 2000 is greater than 0);
and
``(II) then to eligible States whose State DSH allotment
per medicaid enrollee and uninsured individual for the third
preceding fiscal year is below the national average DSH
allotment per medicaid enrollee and uninsured individual for
that fiscal year.
``(C) Expenditure rules.--An amount allotted to a State
from the redistribution pool established for a fiscal year--
``(i) shall not be included in the determination of the
State's DSH allotment for any fiscal year under this section;
``(ii) notwithstanding any other provision of law, shall
remain available for expenditure by the State through the end
of the second fiscal year after the fiscal year in which the
allotment from the redistribution pool is made for
expenditures incurred in any of such fiscal years; and
``(iii) shall only be used to make payment adjustments to
disproportionate share hospitals in accordance with the
requirements of this section.
``(D) Definitions.--In this paragraph:
``(i) Eligible state.--The term `eligible State' means,
with respect to the fiscal year from which a redistribution
pool is established under subparagraph (A)(i), a State that
has expended at least 90 percent of the State DSH allotment
for that fiscal year by the end of the succeeding fiscal
year.
``(ii) State dsh allotment per medicaid enrollee and
uninsured individual.--The term `State DSH allotment per
medicaid enrollee and uninsured individual' means the amount
equal to the State DSH allotment for a fiscal year divided by
the sum of the number of individuals who received medical
assistance under the State program under this title for that
fiscal year and the number of State residents with no health
insurance coverage for that fiscal year, as determined by the
Bureau of the Census.
``(iii) National average dsh allotment per medicaid
enrollee and uninsured individual.--The term `national
average DSH allotment per medicaid enrollee and uninsured
individual' means the amount equal to the total amount of
State DSH allotments for a fiscal year divided by the sum of
the total number of individuals who received medical
assistance under a State program under this title for that
fiscal year and the total number of residents with respect to
all States who did not have health insurance coverage for
that fiscal year, as determined by the Bureau of the
Census.''.
SEC. 3. HEALTH SERVICES FOR THE UNINSURED.
(a) Demonstration Grants To Health Access Networks.--
(1) In general.--The Secretary of Health and Human Services
(in this section referred to as the ``Secretary'') shall
award demonstration grants to health access networks.
(2) Application.--Each applying health access network shall
submit a plan that meets the requirements of subsection (c)
for the purpose of improving access, quality, and continuity
of care for uninsured individuals through better coordination
of care by the network.
(3) Authority to limit number of grants.--The number of
demonstration grants awarded under this section shall be
limited, in the discretion of the Secretary, so that grants
are sufficient to permit grantees to provide patient care
services to no fewer than the number of uninsured individuals
specified by each network in its grant application.
(b) Definition of Health Access Network.--
(1) In general.--In this section, the term ``health access
network'' means a collection
[[Page S8833]]
of safety net providers, including hospitals, community
health centers, public health departments, physicians, safety
net health plans, or other recognized safety net providers
organized for the purpose of restructuring and improving the
access, quality, and continuity of care to the uninsured and
underinsured, that offers patients access to all levels of
care, including primary, outpatient, specialty, certain
ancillary services, and acute inpatient care, within a
community or across a broad spectrum of providers across a
service region or State.
(2) Inclusion of section 330 networks and plans.--The term
``health access network'' includes networks and plans that
meet the requirements for funding under section 330(e)(1)(C)
of the Public Health Service Act (42 U.S.C. 254b(e)(1)(C)).
(3) Inclusion of integrated health care systems.--
(A) In general.--Such term also includes an integrated
health care system (including a pediatric system).
(B) Definition of integrated health care system.--For
purposes of this section, an integrated health care system
(including a pediatric system) is a health care provider that
is organized to provide care in a coordinated fashion and
assures access to a full range of primary, specialty, and
hospital care, to uninsured and under-insured individuals, as
appropriate.
(c) Plan Requirements.--
(1) In general.--A health access network that desires a
grant under this section shall submit a plan to the Secretary
that details how the network intends to--
(A) manage costs associated with the provision of health
care services to uninsured and underinsured individuals
served by the health access network;
(B) improve access to, and the availability of, health care
services provided to uninsured and underinsured individuals
served by the health access network;
(C) enhance the quality and coordination of health care
services provided to uninsured and underinsured individuals
served by the health access network;
(D) improve the health status of uninsured and underinsured
individuals served by the health access network; and
(E) reduce health disparities in the population of
uninsured and underinsured individuals served by the health
access network.
(2) Identification of measurable goals.--The health access
network shall--
(A) identify in the plan measurable performance targets for
at least 3 of the goals described in paragraph (1); and
(B) agree that a portion of the payment of grant funds for
patient care services after the first year for which such
payment is made shall be contingent upon the health access
network demonstrating success in achieving such targets.
(d) Use of Funds.--A health access network that receives
funds under this section shall expend--
(1) an amount equal to not less than 90 percent of such
funds for direct patient care services; and
(2) an amount equal to not more than 10 percent of such
funds for the network's operation and development for the
purpose of improving the efficiency and effectiveness of the
business and clinical operations of providers within the
health access network, including through the integration of
management information systems (including development and
implementation of electronic medical records) and financial,
administrative, or clinical functions across providers.
(e) Rule of Construction Regarding Direct Patient Care
Services.--With respect to health access networks described
in subsection (b)(2), the term ``direct patient care
services'' shall be construed to mean the provision or
purchase of services, such as specialty medical care and
diagnostic services, that are not available or are
insufficiently available through the network's providers. In
purchasing such services for uninsured and underinsured
individuals, networks shall, to the maximum extent feasible,
endeavor to purchase such services from safety net providers.
(f) Supplement, not supplant.--Funds paid to a health
access network under a grant made under this section shall
supplement and not supplant, other Federal or State payments
that are made to the health access network to support the
provision of health care services to low-income or uninsured
patients.
(g) Funding.--
(1) Transfer of portion of unexpended dsh allotments.--
Notwithstanding any other provision of law, as of October 1
of fiscal year 2007, and each fiscal year thereafter, amounts
described in paragraph (2) are hereby transferred from the
total amount of the unexpended State DSH allotments under
section 1923 of the Social Security Act (42 U.S.C. 1396r-4)
and made available for grants under this section.
(2) Amounts made available for grants.--The amounts to be
made available under this section for each fiscal year
beginning with fiscal year 2007 are equal to the
redistribution pool amounts determined for each fiscal year
under section 1923(f)(7)(A)(i) of the Social Security Act (42
U.S.C. 1396r-4(f)(7)(A)(i)) (as amended by section 2(3) of
the Strengthening the Safety Net Act of 2006).
____
There being no objection, the additional material was ordered to be
printed in the Record, as follows:
Strengthening the Safety Net Act of 2006
This legislation, introduced by Senators Bingaman, Smith,
Lincoln, Pryor, and Akaka, would redistribute unused federal
Medicaid Disproportionate Share Hospital (DSH) funds to
strengthen and augment the nation's health care safety net.
Half of the redistributed funds would be used to increase the
availability of DSH funds to states currently receiving low
or less than average DSH allotments and the other half would
be used to fund integrated ``health access networks'' of
community health centers, public hospitals, and other safety
net providers. These networks would be required to provide
high quality primary, outpatient, inpatient and specialty
care to uninsured and other medically vulnerable populations.
In 2007, the bill would redistribute $300 million in
unexpended funds; in 2008, $500 million; and in 2009 and
thereafter $800 million. These levels would be prorated
downward if there are insufficient unexpended funds to meet
the statutory amounts. This legislation will:
Keep funds allocated to the safety net with the safety net;
Provide money to test implementation of high quality
integrated networks of safety net providers; and, Allow
networks of community health centers to purchase specialty
care services.
Background
Congress created the Medicaid DSH requirement in 1981 to
ensure that state Medicaid programs provide adequate payments
to hospitals whose patient populations are disproportionately
composed of low income Medicaid and uninsured patients.
Medicaid DSH payments have evolved into one of the most
important sources of financing for the nation's safety net.
Each year, each individual state is allocated a DSH
allotment. The allotments vary considerably from state to
state and a state's ability to draw-down its DSH allotment
varies depending on its financial resources. Each year, some
states do not utilize their entire DSH allotment.
In part, this legislation would permit a redistribution of
unused DSH funds to states that have lower DSH allotments.
Two categories of states would be prioritized to receive
redistributed DSH money to supplement their existing DSH
allotment: (1) low DSH states (i.e. states that are
designated by the MMA as a low DSH state due to DSH
expenditures being less than 3 percent of total Medicaid
expenditures in fiscal year 2000) and (2) states whose DSH
allotment per Medicaid enrollee and uninsured individual is
below the national average. Only states that have spent at
least 90 percent of their DSH allotment would be eligible for
the redistribution.
Redistributed DSH dollars also would fund ``Health Access
Network'' demonstration projects designed to improve access,
quality, and continuity of care for uninsured individuals
through better coordination of care. To obtain funding under
this legislation, health access networks would be required to
submit a plan to the Secretary of the Department of Health
and Human Services that details how the network plans to:
Reduce costs associated with the provision of health care
services to uninsured individuals; Improve access to, and the
availability of, health care services provided to individuals
served by the health access network; Enhance the quality and
coordination of health care services provided to such
individuals; Improve the health status of communities served
by the health access network; and, Reduce health disparities
in such communities.
Health access networks would be required to identify
measurable performance targets and demonstrate progress in
order to qualify for future year funding. Grantees would have
to spend 90 percent of awarded funds for direct patient care
services.
______
By Mr. DURBIN:
s. 3820. A bill to expand broadband access for rural Americans; to
the Committee on Commerce, Science, and Transportation.
Mr. DURBIN. Mr. President, I rise to introduce a bill entitled
Broadband for Rural America Act of 2006.
There is no question that broadband is an essential component of our
lives, both at work and at home. Broadband access is becoming a vital
service, much like water, sewer, gas, and electricity are essential
resources for our daily living. Our homes and businesses need
affordable and easy access to an always-on, high speed and high
capacity Internet connection, much like our homes and businesses need
the traditional utility services.
Additionally, people who work outside the confines of an office
building need broadband access on the go. Often, it is not enough to
have only a cell phone to remain in touch with your boss, coworker,
client, or supplier. In today's global economy, we need easy methods to
transfer a vast quantity of data, fast and reliably, even if we are not
near a landline phone, fax, or computer terminal.
Yet for so many Americans today, broadband access is still a foreign
concept. The digital divide remains a reality. Rural broadband
deployment
[[Page S8834]]
continues to lag behind urban deployment, and the differential
continues to grow, even as broadband usage has grown significantly in
our Nation.
When I travel to small or rural towns in downstate Illinois and
elsewhere, I meet people who tell me that they cannot wait to have
broadband, but that there is no service available where they live. I am
certain that all of my colleagues in the Senate can identify with
situations like this, where they have met constituents who are eager to
jump onto the Information Superhighway, yet there is no on-ramp.
According to a 2004 report issued by the U.S. Department of Commerce,
only about 25 percent of rural households that use the Internet have
broadband access, compared to over 40 percent of the same households in
urban areas. Similarly, the U.S. Department of Agriculture's 2005
report found that farm households have home access to broadband at
almost half the level of all U.S. households nationwide.
The Pew Internet and American Life Project found similar results. In
its 2006 report, Pew found that only 18 percent of rural adults
reported a home broadband connection in the year 2005, compared to 31
percent of urban adults.
All these different studies issued by various authorities point to a
consistent conclusion: Americans living in urban areas are almost twice
as likely to have home broadband access as do their rural counterparts.
Contrary to popular belief, however, rural households use computers
and information technology in ways that are very similar to their urban
counterparts. Thus, it appears that the main obstacle to improving
rural broadband adoption is not differences in the users themselves,
but in the availability and price of broadband service.
It is clear that citizens in small towns and rural areas simply do
not have the same options that people in cities and urban areas do.
And, in some of the rural areas where broadband is available, these
customers often pay more for inferior quality than customers in the
more populated areas.
As our rural residents are falling behind city dwellers, so too, is
our Nation falling behind the rest of the developed world.
The Organization for Economic Cooperation and Development found that,
in 2004, America ranked 12th among developed nations in broadband
access per 100 inhabitants. However, the same study had found that in
2001, we ranked 4th in the developed world. So, this means that in just
3 short years, we lost our competitive edge to 8 countries.
Broadband is critical to community and economic development, as it
encourages investment, creates jobs, improves productivity, fosters
innovation, and increases consumer benefits in every corner of our
Nation.
A 2003 study by Criterion Economics found that adoption of current
generation broadband would increase the gross domestic product by
$179.7 billion, while sustaining an additional 61,000 jobs per year
over the next 19 years. The study also projected 1.2 million jobs could
be created if next generation broadband technology were rapidly
deployed.
In early 2004, President Bush called for universal and affordable
access to broadband by the year 2007, because it will enhance our
Nation's economic competitiveness and help improve education and health
care for all Americans. Kevin Martin, the chairman of the Federal
Communications Commission, has said he is committed to expanding the
number of broadband users in our country so that we can improve our
rank in the world.
I agree with both President Bush and Chairman Martin. The
administration, the FCC, Congress, and the States can all contribute to
closing the digital divide, ensuring that rural Americans are not left
behind in the 21st century's digital economy.
We need to work together to address this critical shortfall in our
Nation's infrastructure. We need a seamless national network of
broadband providers that will serve everyone in America.
Whether it is through telephone wire, cable, fiber, satellite,
wireless, powerline, or any other medium, we need every existing and
future broadband service provider to step up to the national challenge.
That is why I am introducing a bill that will encourage rapid
deployment of high quality and affordable high speed broadband service,
especially in the rural areas that desperately need this technology.
The Broadband for Rural America Act of 2006 includes five major
provisions. Each provision is designed to eliminate obstacles that
hinder broadband deployment in rural America today.
First, my bill creates a new Federal program specifically targeted to
assist people who are doing the necessary work at the earliest stages
to bring broadband to their communities.
These are future customers who are weary of waiting for
telecommunications and cable companies to eventually reach their
corners of the State. These are individuals, businesses, and co-ops who
want to create a demand pool to entice new or existing carriers to
quickly expand broadband service to areas where they work and live.
We have several groups like this in my home State of Illinois. They
cannot wait any longer, so they have taken the initiative to work for
access to affordable high quality broadband service.
Many of these groups and individuals work in collaboration with like-
minded community leaders, businesspeople, engineers, and other experts
to learn all they can about their region. They are the local experts on
the unique geographic, economic, and lifestyle needs of their market.
They can conduct the mapping and surveying work, to find out where
there are services and gaps in their neighborhoods, and what technology
is best suited to serve their region.
And, if they discover that no existing provider wants to expand
service to where they are, based on the company's internal cost-benefit
analysis, these groups are willing to start a communications service of
their own, using technology they can afford, to provide broadband for
and by themselves. These good people do not want to be left out of the
new economy. They need our help.
Yet, currently, there is no readily accessible source of funding from
the Federal Government for these groups that are undertaking the
critical early stage groundwork. If they were already communications
service providers, they could look for funding through other programs,
including the USDA's Rural Utilities Service Program, the universal
service fund, or the Small Business Administration. They could also go
to the financial markets to seek venture capital and operating funds
from established private sector investors.
But as startup groups trying hard to serve their local or rural
community's needs, they have few places to turn to for financial
assistance.
My bill creates a new Office of Broadband Access within the FCC that
would administer a trust fund from which Federal grants can be issued
to these startup groups. Under my bill, eligible entities include
nonprofits, academic institutions, local governments, and commercial
companies that will work to identify broadband access needs in unserved
areas of the country.
The types of projects to be funded through this new program will
include feasibility studies, mapping, economic analysis, and other
activities undertaken to determine the reasons for the current lack of
service and the scale, scope, and type of broadband services most
suitable for the particular unserved area.
To further assist with these startup projects, my bill requires the
FCC to collect more useful information from current broadband service
providers to ascertain where and how broadband service is available,
and to report to Congress on the areas that are unserved.
This reporting requirement is a bipartisan idea that Senator Bill
Nelson and Senator Jim DeMint recently presented before the Senate
Commerce Committee. I am happy to work with them to further encourage
the FCC to collect more useful data on the state of broadband
deployment.
Finally, the revenues to fund this trust fund will be derived from
direct appropriations of $10 million per year for 5 years, plus 1
percent of proceeds from all auction sales of spectrum conducted by the
FCC, which are to be set aside for this unique purpose. I believe this
should generate enough revenues to sustain this trust fund for the next
[[Page S8835]]
5 years, which is the critical time for Federal assistance.
When Congress created the Rural Utilities Service Broadband Loan and
Loan Guarantee Program in the 2002 farm bill, we charged the U.S.
Department of Agriculture with providing much needed funds to bring
broadband to rural America. The bill authorized $100 million for fiscal
years 2002 to 2007 to provide below market-rate loans and loan
guarantees for the construction and improvement of facilities and
equipment to provide broadband service.
While this loan program has had some successes over the past 4 years,
it has also faced serious internal and external criticism.
For example, in September 2005, USDA's inspector general issued an
internal audit report pointing out major problems with the program.
Among other concerns, the report alleges that, in decisions that were
inconsistent with provisions of authorizing statute, USDA has funded
entities in suburban--not rural--areas, and in places that are already
receiving broadband service.
The internal report also accuses the agency of mismanaging the
program, leading to irregularities and even fraud in the decisionmaking
and approval processes for applications.
To add more controversy to this program, in May of this year, USDA
was sued by the cable industry for allegedly failing to follow the
statutory mandates that created the broadband loan program.
Striking a tone similar to the inspector general's internal audit
report, the lawsuit alleges among other issues that USDA has diverted
Federal funds to suburban areas and has failed to ensure that unserved
communities receive first priority.
I support the USDA's rural broadband loan program, and I want to see
the program grow and continue to fund worthy projects. But I also
believe that these recent internal and external developments merit
serious consideration. So, in the spirit of working with the USDA to
reform the problematic areas, my bill reforms and extends the life of
the loan program for another 5 years, to expire in 2012, not 2007.
The bill goes to the heart of the concerns raised by the critics of
the program. It amends the definition of an eligible rural community to
exclude any area located within 10 miles of any city with a population
of over 25,000. This should prevent the program from funding urban or
suburban areas that may be technically considered rural under some
definitions, but are in reality, located adjacent to areas that already
receive broadband service.
Additionally, my bill prevents any rural area from being funded where
a majority of its residential customers already have access to
broadband service offered at a price per megabit of speed comparable to
the nearest urban area. Under this definition, any area where rural
residents are already enjoying affordable high speed broadband service
should not be allowed to receive additional Federal funds.
These funds should be saved for the truly needy communities.
My bill also provides language to authorize in statute a rural
broadband grant program to be administered by the USDA, together with
its rural broadband loan and loan guarantee program.
While the USDA has created its own grant programs to fund certain
broadband providers, a formal grant program was never authorized by
Congress. By authorizing it, Congress will have more oversight and
impose accountability, while keeping the grant program funded at an
operational level for many years to come.
Finally, although USDA's inspector general has recommended several
reform measures, I believe we should force the agency to implement
these changes in order to improve the loan and grant programs.
Therefore, my bill requires the USDA to undertake a comprehensive and
transparent rulemaking process in response to the recent internal
audit.
The FCC has been looking to make more spectrum available for
innovative unlicensed wireless uses, including wireless broadband. This
new ``unlicensed'' spectrum holds tremendous potential for allowing
wireless broadband to be deployed in rural areas. This would be
especially helpful in large rural geographic regions where it would be
cost prohibitive to build out a broadband infrastructure with wires,
cable, or fiber.
Some of this spectrum would come from space made newly available when
traditional analog over-the-air TV broadcasters transition to digital
transmission by 2009. Other spectrum may be found in narrow gaps
between currently existing licensed users that could be utilized by
smaller and localized products, such as garage openers, cordless
phones, wireless baby monitors, and of course, broadband.
While I support making more spectrum available to new users, I
believe we need to do so with clear safeguards in place so that new
wireless users will not cause undue interference problems with existing
broadcasters, public safety officials, and others that use wireless
products such as microphones.
My bill requires the FCC to complete a rulemaking process to make new
spectrum available for wireless broadband services in rural areas as
soon as practicable. The bill specifically requires the FCC to ensure
that new unlicensed wireless users provide engineering testing results
to prevent harmful interference problems.
The FCC also has been planning an auction sale of spectrum in the 700
MHz band, which is ideal for wireless broadband use. I support this
auction, and I encourage the FCC to conduct it as soon as possible, so
that new service providers can enter the wireless broadband market to
fill in the gaps in service that wireline providers cannot or will not
meet.
However, we have learned from previous FCC auctions that the true
value of spectrum depends on who uses it and for what purposes. We also
have learned that different carriers will bid in different auctions,
depending on the size of the blocks of airwaves available for purchase.
Large national wireless carriers will choose to bid on large geographic
markets, while smaller or local carriers will bid on smaller market
sizes.
For the 700 MHz band, I agree with a bipartisan idea that Senator
Olympia Snowe and Senator Byron Dorgan proposed in the Senate Commerce
Committee. In our view, it makes the most sense to configure the plan
for this band to designate up to 12 MHz of paired recovered analog
spectrum to be auctioned for smaller geographic licenses.
This will maximize the participation of small, regional, and rural
service providers, because these are the most likely entities to
provide wireless broadband service in rural areas.
My bill therefore requires the FCC to evaluate its auction plans and
to divide some of the frequency allocations into smaller area licenses
so that regional and rural wireless companies can compete in the
bidding process.
I look forward to working with Senators Snowe and Dorgan to ensure
that the FCC maximizes the value of these public airwaves for the
benefit of all Americans, especially those living in rural areas.
As with many States, my State of Illinois has struggled over the past
few years with ways to bring universal and affordable broadband to
every corner of our State. Many leaders in our State and local
governments have studied various proposals, and have sought the
guidance of experts in the private sector.
Additionally, telecommunications and cable companies that provide the
vast majority of broadband service in the nation today are generally
regulated at the state and local levels. Therefore, in our effort to
develop a national broadband policy, I think it makes sense for
Congress to learn from the varied experiences gained in many states
that have tried innovative solutions to encourage or mandate broadband
services in their regions.
My bill establishes a task force consisting of experts in Federal,
State, and local governments, trade associations, public interest
organizations, academic institutions, and other relevant areas, to
study best practices for rapid deployment of broadband services in
States, particularly those with large unserved rural areas.
The bill requires the task force, within 6 months, to provide to
Congress and to each governor a report detailing a comprehensive list
of specific measures adopted by State or local governments that have
helped provide incentives for
[[Page S8836]]
communications carriers to deploy broadband services in areas that
lacked such services.
For too long, we have been talking about the need to bring universal
and affordable broadband to every corner of our Nation. Yet progress
has been too slow. It is time to reengage our national, state, and
local policy leaders to focus our attention, and work with the private
sector toward achieving this goal.
I urge my colleagues to join me in supporting Broadband for Rural
America Act of 2006.
Mr. President, I ask unanimous consent that the text of the bill be
printed in the Record.
There being no objection, the text of the bill was ordered to be
printed in the Record, as follows:
S. 3820
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 ``Broadband for Rural America
Act of 2006''.
SEC. 2. FINDINGS.
Congress finds the following:
(1) High speed broadband communications is no longer a
luxury. It has become a vital service for all Americans, much
like water, sewer, gas, and electricity are essential
resources for our daily lives.
(2) Broadband infrastructure is critical to community and
economic development, by encouraging investment, creating
jobs, improving productivity, fostering innovation, and
increasing consumer benefits.
(3) Despite the ongoing efforts by traditional
communications carriers to expand broadband services, the
rate of deployment in America is still far from ideal. Recent
reports indicate that America continues to trail other
leading industrialized countries, per capita, in the
availability and use of broadband communications.
(4) As our Nation falls behind the developed world in
broadband access, so, too, are rural residents falling behind
city and urban residents. In small towns and rural America,
broadband service remains largely non existent. In places
where it is available, rural broadband customers often pay
more for inferior quality than customers in cities and urban
areas.
(5) A national policy is needed to accelerate the
deployment of broadband services so that, no matter where
they live, every American can have access to affordable and
high-quality broadband service as soon as possible.
SEC. 3. PURPOSE.
The purposes of this Act are to encourage the rapid
deployment of high quality and affordable high speed
broadband service to every corner of our Nation by--
(1) establishing a new source of funding for entities that
work to identify unserved regions of the Nation and to
address the lack of broadband service in those areas;
(2) reforming the rural broadband loan program to ensure
that Federal funds are provided only to qualified entities
that will serve truly rural and unserved regions of the
Nation, while providing statutory authority and Federal
funding for the rural broadband grant program;
(3) making more unlicensed spectrum available for
innovative wireless broadband uses that will not cause
harmful interference and degradation of service to other
wireless services;
(4) encouraging rural, regional, and smaller wireless
carriers to enter the wireless broadband market by
reconfiguring the size of spectrum auctions into smaller
market sizes; and
(5) studying policies and programs adopted by State and
local governments that have worked to provide incentives for
rapid broadband deployment.
SEC. 4. BROADBAND ACCESS TRUST FUND AND OFFICE OF BROADBAND
ACCESS.
(a) Establishment.--
(1) Fund established.--There is established in the Treasury
of the United States the Broadband Access Trust Fund.
(2) Office established.--
(A) In general.--There is established within the Federal
Communications Commission the Office of Broadband Access.
(B) Duties.--The Office of Broadband Access shall
coordinate the use of all resources within the Fund, as such
resources relate to the expansion of broadband technology
into rural or unserved areas.
(3) Deposits.--The Fund shall consist of--
(A) the amounts appropriated pursuant to subsection (f);
and
(B) 1 percent of the proceeds of any auction for any bands
of frequencies conducted pursuant to section 309(j) of the
Communications Act of 1934 (47 U.S.C. 309(j)).
(4) Fund availability.--
(A) Appropriation.--There are appropriated from the Fund
such sums as are authorized by the board to be disbursed for
grants under this section.
(B) Reversion of unused funds.--Any grant proceeds that
remain unexpended at the end of the grant period, as
determined under subsection (c)(3), shall revert to and be
deposited in the Fund.
(b) Board of Directors.--
(1) Establishment.--The Fund shall be administered by the
Office of Broadband Access, in consultation with a board of
directors comprised of 5 members, appointed by the Chairman
of the Federal Communications Commission, with experience in
1 or more of the following fields:
(A) Grant and investment management.
(B) Advanced communications technology.
(C) Rural communications services.
(D) Community-based economic development.
(2) Functions.--The board shall--
(A) establish reasonable and prudent criteria for the
selection of grant recipients under this section;
(B) determine the amount of grants awarded to such
recipients; and
(C) review the use of grant funds by such recipients.
(3) Compensation prohibited; expenses provided.--The
members of the board shall serve without compensation, but
may, from appropriated funds available for the administrative
expenses of the Federal Communications Commission, receive
travel expenses, including per diem in lieu of subsistence,
in accordance with applicable provisions under subchapter I
of chapter 57 of title 5, United States Code.
(c) Purpose and Activities of the Fund.--
(1) Grant purposes.--In order to achieve the objectives and
carry out the purposes of this section, the Office of
Broadband Access is authorized to make grants, from amounts
deposited pursuant to subsection (a)(2) and from the interest
or other income derived from the Fund--
(A) to study the lack of affordable broadband
communications services in particular unserved regions of the
nation, particularly in rural areas; and
(B) to take steps toward providing such services to such
regions.
(2) Grant preference.--In making grants from the Fund, the
Office of Broadband Access shall give preference to eligible
individuals or entities that are proposing rural or
community-based partnerships to encourage economic
development in unserved regions of the nation, particularly
in rural areas.
(3) Grant availability.--Grants from the Fund shall be made
available on a single or multi-year basis to facilitate long
term planning.
(d) Eligible Entities.--
(1) In general.--The following organizations and entities
are eligible to apply for funds under this section:
(A) An agency or instrumentality of a State or local unit
of government (including an agency or instrumentality of a
territory or possession of the United States).
(B) A nonprofit agency or organization that is exempt from
taxes under section 501(c)(3) of the Internal Revenue Code of
1986 (26 U.S.C. 501(c)(3)).
(C) An institution of higher education.
(D) Any legally organized incorporated organization or
other legal entity, including a cooperative, a private
corporation, or a limited liability company.
(2) Preference.--
(A) Nonlicensed entities.--In determining which legally
organized incorporated organizations or other legal entities
shall receive grants from the Fund, the Office of Broadband
Access shall give preference to those organizations and
entities that are not already licensed by the Federal
Communications Commission to provide voice, data, video, or
other communications or information services.
(B) Secondary priority for already licensed entities.--The
Office of Broadband Access shall only award grants from the
Fund to those organizations and entities that are already
licensed by the Federal Communications Commission to provide
voice, data, video, or other communications or information
services only after all applications by nonlicensed
organizations described in subparagraph (A) have been
considered.
(e) Permissible Uses of Funds.--Amounts made available by
grants from the Fund under this section may be used by
eligible entities for conducting feasibility studies,
mapping, economic analysis, and other activities done to
determine--
(1) the reasons for the lack of affordable broadband
communications services in particular unserved regions of the
nation, particularly in rural areas; and
(2) the scale, scope, and type of broadband services most
suitable for each particular unserved area.
(f) Authorization of Appropriations.--There are authorized
to be appropriated to the Fund $10,000,000 for fiscal year
2007 and each of the 5 succeeding fiscal years.
(g) Reports.--
(1) By grant recipients.--Each grant recipient shall submit
to the Federal Communications Commission and the board a
report on the use of the funds provided by the grant.
(2) By fcc.--
(A) In general.--The Federal Communications Commission
shall annually submit to Congress a report on the operations
of the Fund and the grants made by the Fund.
(B) Required content.--The report required under
subparagraph (A) shall include--
(i) an identification of the grants made, the recipients
thereof, and the planned uses of the amounts made available;
(ii) a financial report on the operations and condition of
the Fund; and
(iii) a description of the results of the use of funds
provided by grants under this section, including the status
of broadband availability in the regions covered by such
grants.
[[Page S8837]]
(C) Information required.--
(i) In general.--The Federal Communications Commission
shall revise FCC Form 477 reporting requirements not later
than 180 days after the date of enactment of this Act to
require broadband service providers to report the following
information:
(I) Identification of location where the provider provides
broadband service to customers, identified by zip code plus 4
digit location (referred to in this subparagraph as ``service
area'').
(II) Percentage of residential households and businesses in
each service area that are offered broadband service by the
provider, and the percentage of such residential households
and businesses that subscribe to each service plan offered.
(III) The average price per megabit of download speed and
upload speed in each service area.
(IV) Identification by service area of the provider's
broadband service's actual average throughput, and contention
ratio of the number of users sharing the same line.
(ii) Exception.--The Federal Communications Commission may
exempt a broadband service provider from the requirements of
this subparagraph if the Federal Communications Commission
determines that a provider's compliance with the reporting
requirements is cost prohibitive, as defined by the Federal
Communications Commission.
(D) Report.--The Federal Communications Commission shall
provide to Congress on an annual basis a report, using
available Census Bureau data, containing the following
information for each service area that is not served by any
broadband service provider;
(i) Population.
(ii) Population density.
(iii) Average per capita income.
(h) Regulations.--The Federal Communications Commission may
prescribe such regulations as may be necessary and
appropriate to carry out this section.
(i) Definitions.--As used in this section--
(1) the term ``the Fund'' means the Broadband Access Trust
Fund established pursuant to subsection (a); and
(2) the term ``the board'' means the board of directors
established pursuant to subsection (b).
SEC. 5. USDA BROADBAND PROGRAM REFORMS.
(a) Reauthorization.--Section 601(k) of the Rural
Electrification Act of 1936 (7 U.S.C. 950bb(k)) is amended by
striking ``2007'' and inserting ``2012''.
(b) Clarification of Eligible Rural Community.--Section
601(b)(2) of the Rural Electrification Act of 1936 (7 U.S.C.
950bb(b)(2)) is amended to read as follows:
``(2) Eligible rural community.--The term `eligible rural
community' means any area of the United States that is not--
``(A) included within the boundaries of any incorporated
city, village, borough, or town with a population in excess
of 25,000 inhabitants;
``(B) located within 10 miles of any such city, village,
borough, or town; and
``(C) an area where a majority of its residential customers
have access to broadband service offered at a price per
megabit of download speed and upload speed comparable to the
nearest urban area.''.
(c) Additional Requirements for Eligible Entities.--Section
601 of the Rural Electrification Act of 1936 (7 U.S.C. 950bb)
is amended--
(1) in subsection (c)--
(A) in paragraph (1), by striking ``(1) In general.--'';
and
(B) by striking paragraph (2); and
(2) in subsection (d)(1)--
(A) in subparagraph (A), by striking ``; and'' and
inserting a semicolon;
(B) in subparagraph (B), by striking the period at the end
and inserting ``; and''; and
(C) by adding at the end the following:
``(C) demonstrate that any loan or loan guarantee obtained
under this section will be used only to furnish, improve, or
extend broadband service to those eligible rural
communities.''.
(d) Community Connect Grant Program.--Title VI of the Rural
Electrification Act of 1936 (7 U.S.C. 950bb et seq.) is
amended by adding at the end the following:
``SEC. 602. COMMUNITY CONNECT GRANT PROGRAM.
``(a) Purposes.--The purposes of this section are--
``(1) to provide financial assistance in the form of grants
to eligible applicants that will provide, on a community-
oriented connectivity basis, broadband service that fosters
economic growth and delivers enhanced educational, health
care, and public safety services; and
``(2) to ensure the deployment of broadband service to
extremely rural, lower-income communities on a community-
oriented connectivity basis.
``(b) Grants Authorized.--
``(1) In general.--The Secretary may award a grant to any
eligible applicant to provide broadband services in
accordance with the provisions of this section.
``(2) Award basis.--The Secretary shall award grants under
this section on a competitive basis.
``(c) Eligible Applicant.--To be eligible to obtain a grant
under this section, an applicant shall--
``(1) be--
``(A) legally organized as an incorporated organization;
``(B) an Indian tribe or tribal organization, as defined in
subsections (b) and (c) of section 4 of the Indian Self-
Determination and Education Assistance Act (25 U.S.C. 450b(b)
and (c));
``(C) a State or local unit of government;
``(D) an institution of higher education; or
``(E) any other legal entity, including a cooperative, a
private corporation, or a limited liability company organized
on a for-profit or not-for-profit basis;
``(2) have the legal capacity and authority to--
``(A) own and operate the broadband facilities proposed in
its application;
``(B) enter into contracts; and
``(C) otherwise comply with applicable Federal statutes and
regulations; and
``(3) develop a project that--
``(A) serves an eligible rural community;
``(B) deploys basic broadband service, free of all charges
for at least 2 years, to all critical community facilities
located within a proposed service area;
``(C) offers basic broadband service to residential and
business customers within a proposed service area; and
``(D) provides--
``(i) a community center with at least 10 computer access
points within a proposed service area; and
``(ii) broadband service to such centers free of charge for
at least 2 years.
``(d) Application.--
``(1) Submission.--Each applicant seeking a grant under
this section shall submit an application containing--
``(A) any information or documentation required under
section 1739.15 of title 7, Code of Federal Regulations; and
``(B) such other information or documentation that the
Secretary may require.
``(2) Review and scoring of applications.--The Secretary
shall review and score any applications received under this
section using the same methods, and in the same manner, as
described in sections 1739.16 and 1739.17 of title 7, Code of
Federal Regulations.
``(e) Use of Funds.--A grant awarded to an eligible
applicant pursuant to this section may be used to--
``(1) construct, acquire, or lease facilities, including
spectrum, to deploy broadband service to all participating
critical community facilities and all required facilities
needed to offer such service to residential and business
customers located within a proposed service area;
``(2) improve, expand, construct, or acquire a community
center that furnishes free access to broadband service,
provided that such community center is open and accessible to
area residents before, during, and after normal working hours
and on Saturday or Sunday;
``(3) purchase any end user equipment needed to carry out
the project of the applicant described in subsection (c)(3);
``(4) pay the operating expenses incurred in providing--
``(A) broadband service to critical community facilities
for the first 2 years of operation; and
``(B) training and instruction on how to use such services;
and
``(5) purchase any land, building, or building construction
needed to carry out the project of the applicant described in
subsection (c)(3).
``(f) Matching Requirement.--
``(1) In general.--Each eligible applicant shall contribute
not less than 15 percent of the grant amount requested in any
application.
``(2) Form.--The matching contribution described in
paragraph (1) may be in the following form:
``(A) Cash for eligible grant purposes.
``(B) In-kind contributions for purposes that could have
been financed with grant funds under this section. In-kind
contributions shall be new or non-depreciated assets with
established monetary values. Manufacturers' or service
providers' discounts shall not be considered a matching
contribution.
``(C) The rental value of space provided within an existing
community center, provided that such space is provided free
of charge to such applicant, for the first 2 years of
operation.
``(D) Salary expenses incurred for any individual operating
the community center, for the first 2 years of operation.
``(E) Expenses incurred in operating a community center,
for the first 2 years of operation.
``(3) Prior costs.--Costs incurred by an applicant, or by
others on behalf of an applicant, for facilities, installed
equipment, or other services rendered prior to submission of
a completed application shall not be considered an acceptable
use of grant funds under subsection (e) or a matching
contribution.
``(4) Rental values.--Rental values of space provided, as
described in paragraph (1)(C), shall be substantiated by
rental agreements documenting the cost of space of a similar
size in a similar location.
``(5) Reasonableness review.--Rental values, salaries, and
other expenses incurred in operating a community center shall
be subject to review by the Secretary for reasonableness in
relation to the scope of the applicant's project described in
subsection (c)(3).
``(6) Other assistance.--Any financial assistance from any
other Federal source shall not be considered a matching
contribution under this section unless there is a Federal
statutory exception specifically authorizing the Federal
financial assistance to be considered as such.
[[Page S8838]]
``(g) Other Requirements.--Each applicant shall comply with
the reporting, oversight, and auditing requirements described
in sections 1739.19 and 1739.20 of title 7, Code of Federal
Regulations.
``(h) Definitions.--As used in this section:
``(1) Basic broadband service.--The term `basic broadband
service' means the broadband service level provided by an
applicant at the lowest rate or service package level for
residential or business customers, as appropriate, provided
that such service meets the requirements of this section.
``(2) Broadband service.--The term `broadband service'
means providing an information-rate equivalent to at least
200 kilobits/second in the consumer's connection to the
network, both from the provider to the consumer (downstream)
and from the consumer to the provider (upstream).
``(3) Community center.--The term `community center'--
``(A) means a public building, or a section of a public
building with at least 10 computer access points, that is
used for the purposes of providing free access to or
instruction in the use of broadband service, and is of the
appropriate size to accommodate this purpose; and
``(B) may include schools, libraries, or a city hall.
``(4) Computer access point.--The term `computer access
point' means a computer terminal with access to basic
broadband service.
``(5) Critical community facilities.--The term `critical
community facilities' means any public school or education
center, public library, public medical clinic, public
hospital, community college, public university, or any law
enforcement, fire, or ambulance station in a proposed service
area.
``(6) End user equipment.--The term `end user equipment'
means computer hardware and software, audio or video
equipment, computer network components, telecommunications
terminal equipment, inside wiring, interactive video
equipment, or other facilities required for the provision and
use of broadband service.
``(7) Rural area.--The term `rural area' means any area of
the United States that is not--
``(A) included within the boundaries of any incorporated or
unincorporated city, village, borough, or town with a
population in excess of 25,000 inhabitants; and
``(B) located within 10 miles of any such city, village,
borough, or town.
``(8) Secretary.--The term `Secretary' means the Secretary
of Agriculture.
``(9) Service area.--The term `service area' means a single
community, and may include the unincorporated areas or
locally recognized communities, not recognized in the most
recent decennial census performed by the Bureau of the
Census, located outside and contiguous to the boundaries of
such community, in which the applicant proposes to provide
broadband service.
``(10) Spectrum.--The term `spectrum' means a defined band
of frequencies that will accommodate broadband service.''.
SEC. 6. USDA RULEMAKING.
The Secretary of Agriculture shall initiate and complete a
rulemaking to--
(1) consider and adopt, as necessary in the discretion of
the Secretary, the recommendations set forth in audit report
09601-4-Te, issued in September 2005, entitled ``Rural
Utilities Service Broadband Grant and Loan Programs'' by the
Inspector General of the United States Department of
Agriculture; and
(2) review and propose recommendations as to how to best
coordinate the application process of the broadband loan and
loan guarantee program under section 601 of the Rural
Electrification Act of 1936 and the Community Connect Grant
program under section 602 of such Act, as added by section 2
of this Act.
SEC. 7. UNLICENSED DEVICES FOR RURAL WIRELESS BROADBAND.
(a) Completion of Order.--Not later than 18 months after
date of enactment of this Act, the Federal Communications
Commission shall issue a final order in the matter of
Unlicensed Operation in TV Broadcast Bands, ET Docket No. 04-
186.
(b) Conditions.--In completing the final order described in
subsection (a), the Federal Communications Commission shall--
(1) permit certified unlicensed devices to use, in non-
exclusive terms, unassigned, non-licensed television
broadcast channels between 54 MHz and 698 MHz in rural areas;
(2) protect incumbent certified low power auxiliary
stations from harmful interference by requiring certification
of unlicensed devices prior to permitting such devices to
access or use unassigned, non-licensed television broadcast
channels between 54 MHz and 698 MHz in rural areas, and
including in the certification proof of successful completion
of laboratory and field testing by an independent laboratory
demonstrating that unlicensed devices do not cause harmful
interference to incumbent certified low power auxiliary
stations;
(3) protect incumbent certified low power auxiliary
stations from harmful interference by prohibiting certified
unlicensed devices from operating on any television broadcast
channel between 54 MHz and 698 MHz in rural areas already in
use by an incumbent certified low power auxiliary station;
and
(4) consider additional ways to protect incumbent certified
low power auxiliary stations from harmful interference, such
as reserving certain television broadcast channels for
exclusive use by incumbent certified low power auxiliary
stations.
(c) Definitions.--As used in this section:
(1) Certified unlicensed device.--The term ``certified
unlicensed device'' means any unlicensed device certified
under subsection (b)(2)(D) operating in a fixed location,
whose primary purpose is to provide broadband service to
rural areas.
(2) Incumbent certified low power auxiliary station.--The
term ``incumbent certified low power auxiliary station''
means any certified low power wireless microphone, personal
wireless monitor, or other audio auxiliary equipment
operating on television broadcast channels between 54 MHz and
698 MHz, used for entertainment, religious, news-gathering,
governmental, business, or personal consumer purposes to
provide real-time, high-quality audio transmissions over
distances of approximately 100 meters.
(3) Rural area.--The term ``rural area'' means any rural
service area or rural statistical area, as defined by the
Federal Communications Commission.
SEC. 8. SPECTRUM AUCTION FOR RURAL WIRELESS BROADBAND.
Not later than February 1, 2007, the Federal Communications
Commission shall initiate a proceeding--
(1) to reevaluate and reconfigure its band plans for the
upper 700 MHz band (currently designated Auction 31) and for
the unauctioned portions of the lower 700 MHz band (currently
designated as Channel Blocks A, B, and E) so as to designate
up to 12 MHz of paired recovered analog spectrum (as defined
in section 309(j)(15)(C)(vi) of the Communications Act of
1934 (47 U.S.C. 309(j)(15)(C)(vi))); and
(2) to reconfigure its band plans to include spectrum to be
licensed for small geographic license areas, taking into
consideration the desire to promote infrastructure build-out
and service to rural and insular areas and the competitive
benefits, unique characteristics, and special needs of rural,
regional, and smaller wireless carriers.
SEC. 9. PUBLIC-PRIVATE TASK FORCE ON BROADBAND INITIATIVES.
(a) Establishment.--There is established a task force to be
known as the ``Rural Broadband Access Task Force'' (referred
to in this section as the ``Task Force'').
(b) Membership.--
(1) In general.--The Task Force established under this
section shall be composed of 11 members, of whom--
(A) 3 shall be appointed by the President;
(B) 2 shall be appointed by the Majority Leader of the
Senate;
(C) 2 shall be appointed by the minority Leader of the
Senate;
(D) 2 shall be appointed by the Speaker of the House of
Representatives; and
(E) 2 shall be appointed by the minority Leader of the
House of Representatives.
(2) Qualifications.--The membership of the Task Force
established under this section shall include--
(A) at least 6 members of whom--
(i) all shall be recognized experts in the field of
communications;
(ii) 2 shall be employees of the Federal Government;
(iii) 2 shall be employees of State governments; and
(iv) 2 shall be employees of local governments;
(B) at least 1 member who shall be a representative of a
consumer or public interest organization;
(C) at least 1 member who shall be a representative of
interested trade associations;
(D) at least 1 member who shall be a representative of
interested academic institutions; and
(E) at least 2 members all of whom shall be especially
qualified to serve on the Task Force by virtue of their
education, training, or experience, particularly in the field
of rural communications access issues.
(3) Chairperson.--Each year, the Task Force shall elect a
Chairperson from among its members.
(4) Vice chair.--Each year, the Task Force shall elect a
Vice Chair from among its members.
(c) Duties.--The Task Force shall--
(1) conduct a comprehensive survey of legislative,
regulatory, or administrative policies or programs adopted by
States to encourage rapid deployment of broadband services;
(2) study policies or programs that have been successful in
providing incentives for communications carriers to deploy or
expand services in areas that lacked such services before the
introduction of such incentives; and
(3) study traditional incentives, such as tax credits or
financial subsidies, as well as innovative efforts, including
public and private partnership programs and best practices
that have worked well in encouraging communications carriers
to deploy or expand services in areas that lacked such
services, particularly in those States with large unserved
rural areas.
(d) Report.--Not later than 6 months after all the members
of the Task Force have been appointed under subsection (b),
the Task Force shall submit a report to Congress and to the
governor of each State detailing a comprehensive list of
policies and programs adopted by States that have succeeded
in providing incentives for communications carriers to deploy
or expand services in areas that lacked such services before
the introduction of such incentives.
(e) Working Groups.--
[[Page S8839]]
(1) In general.--The Task Force may establish such working
groups as the Task Force determines necessary in order to
assist the Task Force in carrying out this subsection.
(2) Membership.--Any working group established under
paragraph (1) may include such members as the Task Force
determines necessary, including individuals who were not
appointed as a member of the Task Force under subsection (b).
(f) Authorization of Appropriations.--There are authorized
to be appropriated such sums as are necessary to carry out
this section.
______
By Ms. COLLINS (for herself, Mrs. Feinstein, Mr. Cornyn, Ms.
Mikulski, Mr. Leahy, and Mr. Lieberman):
S. 3821. A bill to authorize certain athletes to be admitted
temporarily into the United States to compete or perform in an athletic
league, competition, or performance; to the Committee on the Judiciary.
Ms. COLLINS. Mr. President, I rise to introduce the Creating
Opportunities for Minor League Professionals, Entertainers and Teams
through legal Entry--COMPETE--Act. This bill will level the playing
field for minor league sports teams that depend on getting the best
athletic talent. I thank Senators Feinstein, Cornyn, Lieberman,
Mikulski, and Leahy for joining me in introducing this measure.
The core problem we address is that under current law, minor league
players who have to use the H-2B visa category face severe visa
shortages, while major league players qualify automatically for
plentiful P-1 visas.
The H-2B visas are intended for use by industries facing seasonal
demands for labor, such as the hospitality and logging industries.
However, this type of visa is also used by many talented, highly
competitive foreign athletes who are recruited by U.S. teams.
A chronic H-2B visa shortage over the last few years has posed
challenges for all industries using the H-2B visa category. In recent
fiscal years, including 2006, the 66,000 visa cap was met early in the
year. While we were successful last year in crafting a temporary, 2-
year fix for the H-2B shortage, this fix will expire at the end of the
current fiscal year.
However, solving this problem goes beyond fixing the H-2B visa cap.
Minor league players simply do not belong in the same visa category as
seasonal workers. There is no rational basis for automatically
qualifying major league players for P-1 visas, which are granted to
talented athletes, artists, and entertainers, while denying them to
minor league players. My amendment would remedy this unfair situation.
The problem of requiring minor league athletes to use the H-2B visa
category has posed a particular challenge to those of us in Maine who
enjoy cheering on our sports teams. The MAINEiacs, a Canadian junior
hockey league team that plays its games in Lewiston, ME, has faced
tremendous difficulties obtaining the H-2B visas necessary for the
majority of its players to come to the United States to play in the
team's first home games.
Last year, due to uncertainty surrounding the availability of H-2B
visas at the end of the fiscal year, the team had to reschedule its
season home opener and cancel several early season games. This forced
the team to schedule make-up games for those normally played in
September. The problems created by the visa situation creates an
unnecessary hardship for this team, in addition to threatening the
revenue the team generates for the city of Lewiston and businesses in
the surrounding area.
The Portland Sea Dogs, a Double-A baseball team affiliated with the
Boston Red Sox, is another of the many teams that relies on H-2B visas
to bring some of its most skilled players to the United States.
Thousands of fans come each year to see this team, and others like it
across the country, play one of America's favorite sports. Due to the
shortage of H-2B visas, however, Major League Baseball reports that, in
2004 and early 2005, more than 350 talented young, foreign baseball
players were prevented from coming to the United States to play for
minor league teams. These teams have been a traditional proving ground
for athletes hoping to make it to the major leagues and players often
move from these teams to major league rosters.
Including these highly skilled athletes in the H-2B visa category
seems particularly unusual when you consider that major league athletes
are permitted to use an entirely different nonimmigrant visa category--
the P-1 visa. This visa is available to athletes who are deemed by the
Citizenship and Immigration Services to perform at an ``internationally
recognized level of performance.'' Arguably, any foreign athlete whose
achievements have earned him a contract with an American team would
meet this definition.
CIS, however, has interpreted this category to exclude minor and
amateur league athletes. Instead, the P-1 visa is typically reserved
for only those athletes who have already been promoted to major league
sports. Unfortunately, this creates something of a catch-22 for minor
league athletes--if an H-2B visa shortage means that promising athletes
are unable to hone their skills and prove themselves in the minor
leagues, they are far less likely to earn the major league contract
required for a P-1 visa.
A simple, commonsense solution would be to expand the P-1 visa
category to include minor league and certain amateur-level athletes who
have demonstrated a significant likelihood of graduating to the major
leagues. Major League Baseball strongly supports the expansion of the
P-1 visa category to include professional minor league baseball
players. In correspondence to me, the league has pointed out that
making P-1 visas available to this group of athletes, teams would be
able to make player development decisions based on the talent of its
players, without being constrained by visa quotas. The P-1 category,
the league believes, is appropriate for minor league players because
these are the players that major league clubs have selected as some of
the best baseball prospects in the world.
There is no question that Americans are passionate about sports. We
have high expectations for our teams and demand only the best from our
athletes. By expanding the P-1 visa category, we will make it possible
for athletes to be selected based on fair competition in talent and
skill, rather the artificial limits of visa availability. In addition,
we would reduce some pressure on the H-2B visa category making more of
those visas available to the industries that need them.
Mr. President, the inequity of our current policy is clear. Let us
take this simple step toward a more rational visa policy.
Mrs. FEINSTEIN. Mr. President, I am introducing today the COMPETE Act
of 2006, along with Senators Collins and Cornyn.
This is a bill which amends the Immigration and Nationality Act to
allow certain minor league athletes and ice skaters to be admitted
temporarily into the United States to compete or perform in an athletic
league, competition or performance under the same non-immigrant visa
category as professional athletes.
The purpose of this legislation is to level the playing field for
minor league sports teams that depend on getting the best athletic
talent, regardless of where in the world that talent is discovered.
Under current law, minor league players and ice skaters who use the
H-2B temporary visa category face severe visa shortages, while major
league players qualify for uncapped P-1 temporary visas.
This unfair discrepancy in the law needs to be remedied, and the bill
we are introducing today provides a commonsense solution because it
allows minor league athletes--whether in baseball, basketball, hockey,
or ice skating--who will perform competitively in the United States to
apply for a P-1 temporary visa as opposed to an H-2B visa.
By way of background, The H-2B temporary visa category allows U.S.
employers in industries with seasonal or intermittent needs to augment
their existing labor force with temporary workers or augment their
labor force when necessary due to a one-time occurrence which
necessitates a temporary increase in workers.
Typically, H-2B workers fill labor needs in occupational areas such
as construction, health care, landscaping, lumber, manufacturing, food
service and processing, and resort and hospitality services.
Additionally, and perhaps what people do not know, is that not only
is the
[[Page S8840]]
H-2B visa category used by loggers, lifeguards, crab pickers, amusement
park employees, hotel and restaurant employees, but it is also used by
many talented, highly competitive foreign athletes who are recruited by
U.S. teams and theatrical ice skating productions.
A chronic H-28 visa shortage over the last 3 years has posed
challenges for all industries using the H-2B visa category. In fiscal
years 2004, 2005, and 2006, the 66,000 visa cap has been reached,
leaving American teams and the athletes they are recruiting out in the
cold.
The COMPETE Act is a solution that not only helps professional
American teams, but it also relieves the stress on the H-2B visa
program added by a misclassified group.
The reality is that minor league athletes do not belong in the same
visa category as seasonal workers. There is no reason major league
athletes can't and shouldn't qualify for P-1 visas, which are granted
to talented athletes, artists, and entertainers. The COMPETE Act would
remedy this unfair situation.
What follows are some examples of how classifying minor leaguers and
ice skaters as H-2B workers harms American sports and how it would be
better that they be reclassified as other athletes for temporary P-1
visas.
Disney on Ice has seven domestic tours per year, bringing
approximately $400,000 to each of the 150 to 170 U.S. cities in which
it stops. There are not enough U.S. skaters to fill the roles each
production requires, thus the organization relies on foreign skaters to
supplement its cast. As the cap on H-28 visas has been consistently
reached before the commencement of their training period--(August in
Florida--and subsequent touring seasons--September through February or
March--they are often short of ice skaters for their productions.
Major League Baseball was unable to bring 350 baseball players to the
United States in the 2004 and 2005 seasons as a result of the H-28 visa
cap having been met. Promotions of promising young players to the U.S.
Minor League affiliates could not be made. Due to the unavailability of
visas, signings of Canadian players drafted in baseball's June first-
year player draft have declined by 80 percent. Furthermore, clubs who
have already signed talented non-U.S. citizens have been prevented from
bringing these players to the United States given that the H-2B cap has
been reached in past years.
National Hockey League recruits from independent minor league teams,
such as the American Hockey League, Central Hockey League, and the East
Coast Hockey League, for foreign players to fill its ranks. Most minor
hockey league teams' rosters are filled with a majority of foreign
national professional athletes. This is evident by the number of slots
that are requested each year by the minor leagues on their temporary
labor certification applications filed with the Labor Department. For
instance, the AHL requests approximately 21 player slots out of a
roster of approximately 26 players; the other leagues are similarly
situated where the number of requests for slots on temporary labor
certifications is usually in the ballpark of 80 percent of the roster.
Further, hockey leagues usually have a few if not more clubs that are
located in Canada. Of course these players do not need H-2Bs to play
for a Canadian team, but in the event that they are traded during the
season to a U.S. team, the acquiring team would have to file an H-2B.
This frequently presents problems when the numbers have been exhausted
as the trade becomes dependent upon the availability of a visa number
and not the professional needs of the team. In addition, players are
signed throughout the season; this can also prevent teams from signing
players if the numbers have been exhausted. This is particularly true
at the end of the season--usually March or April 1--when the numbers
have been exhausted and the need to sign players for playoffs and
finals increases.
National Basketball Association created a developmental league in
2001. The NBA Development League, or D-League, has functioned both as a
feeder system for the NBA, whose teams annually call up players to fill
out NBA rosters beginning in January and, commencing with the 2005-06
season, as a place where inexperienced NBA Players, within their first
two seasons, may be assigned to get additional playing time. The D-
League, currently comprised of 12 teams across the country, signs and
recruits the best basketball athletes from around the world who are not
playing in the NBA. On average, international players comprise
approximately 10 percent of active D-League rosters, which currently
stand at 10 players per team. The H-2B cap has prevented the D-League
from being able to sign a significant number of qualified international
players during each of the past two seasons.
So a simple, commonsense solution would be to expand the P-1 visa
category to include minor league and certain amateur-level athletes who
have demonstrated a significant likelihood of graduating to the major
leagues. This is what the COMPETE Act would do.
Major League Baseball, the National Basketball Association, the
National Hockey League, and Feld Entertainment, which owns Disney on
Ice, all support the expansion of the P-1 visa category to include
minor league players and ice skaters.
Americans love their sports teams and want to see the highest caliber
athletes competing or performing. By expanding the P-1 visa category,
we will make it possible for athletes to be selected based on talent
and skill rather than visa availability.
In addition, we would reduce some pressure on the H-28 visa category
making more of those visas available to the industries that need them.
I am pleased to be joined by Senators Collins and Cornyn, as well as
Mikulski, Leahy, and Lieberman, in introducing the COMPETE Act of 2006.
______
By Mr. OBAMA:
S. 3822. A bill to improve access to and appropriate utilization of
valid, reliable and accurate molecular genetic tests by all populations
thus helping to secure the promise of personalized medicine for all
Americans; to the Committee on Finance.
Mr. OBAMA. Mr. President, I rise today to introduce the Genomics and
Personalized Medicine Act of 2006. This bill will expand and accelerate
scientific advancement in the field of genomics, which is already
beginning to change the paradigm of medical practice as we know it and
will have profound implications for health and health care in this
Nation.
Almost 150 years ago, Gregor Mendel made history when he established
the Laws of Heredity, which detailed his early knowledge about the
fundamentals of inheritance. As has happened so many times throughout
history, Mr. Mendel's fellow scientists didn't fully understand,
support or necessarily agree with his hypotheses on genes, specifically
how they are transmitted from one generation to the next, and how they
help to define who we are. But he persevered--growing, observing and
experimenting on 10,000 pea plants for almost a decade--and we know now
that his ideas were right.
I mention Mr. Mendel not just because he was an early pioneer in the
field of genetics, and is considered by many to be the father of
genetics, but also because he had vision, intellectual curiosity,
courage to think independently and question the status quo, and of
course tenacity, all of which ultimately opened the door to a
scientific revolution.
Since that time, our knowledge about genetics has dramatically
increased. We have unlocked many of the mysteries about DNA and RNA,
their structure and function, and how their code is translated into the
proteins that make up the tissues and organs of the human body.
Researchers have also made discoveries about DNA replication, and
genetic recombination and regulation, just to name a few, and have
developed the necessary technologies to do all of this work.
This knowledge isn't just sitting in books on the shelf. We have used
these research findings to pinpoint the causes of many diseases, such
as sickle cell anemia, cystic fibrosis, and chronic myelogenous
leukemia. Moreover, scientists have used genetic information to develop
several treatments and therapies.
We have made so many achievements and come a long way in our
understanding and application of genetics
[[Page S8841]]
knowledge. And yet we are just beginning to realize the full potential
of this science to predict the onset of disease, diagnose earlier, and
develop therapies that can treat or cure Americans from so many
afflictions.
Just 3 years ago, scientists at the National Institutes of Health and
the Department of Energy reached another major landmark, with the
completion of the sequencing of the entire human genome, described by
many as the Holy Grail of biology.
The completion of the Human Genome Project, HGP, has paved the way
for a more sophisticated understanding of disease causation. HGP has
expanded focus from the science of genetics, which refers to study of
single genes, to genomics, which describes the study of all the genes
in an individual, as well as the interactions of those genes with each
other and with that person's environment.
We know that all human beings are 99.9 percent identical in genetic
makeup, but differences in the remaining 0.1 percent hold important
clues about the causes of disease and response to drugs. Simply put,
the study of genomics will help us learn why some people get sick and
others do not and will allow us to use this information to better
prevent and treat disease.
The relatively new field of genomics is the key to the practice of
personalized medicine. Personalized medicine is the use of genomic and
molecular data to better target the delivery of health care, facilitate
the discovery and clinical testing of new products, and help determine
a patient's predisposition to a particular disease or condition.
Personalized medicine represents a revolutionary and exciting change in
the fundamental approach and practice of medicine
Pharmacogenomics--the study of how genes affect a person's response
to drugs--is a critical component of personalized medicine. Even so-
called blockbuster drugs are typically effective in only 40 to 60
percent of patients who take them. Other studies have found that up to
15 percent of hospitalized patients experience a serious adverse drug
reaction, resulting in more than 100,000 deaths each year.
Pharmacogenomics has the potential to dramatically increase the
effectiveness and safety of drugs, both of which are major health care
concerns.
We have a few examples already of how pharmacogenomics research has
helped to save lives. For example, the chemotherapy Purinethol is a
lifesaver for kids with leukemia, but in 11 percent of cases, patients
suffer severe, sometimes fatal, side effects. In the 1990s, researchers
identified the gene variant that prevents affected patients from
properly breaking down Purinethol, allowing doctors to screen patients
and adjust dosages for safer use of the drug.
Herceptin is a breast cancer drug that initially failed in clinical
trials. However, researchers discovered that 1 in 4 breast cancers have
too many copies of a certain gene that helps cells grow, divide, and
repair themselves. Extra copies of this gene cause uncontrolled and
rapid tumor growth. As it turns out, Herceptin is an effective drug for
patients with this type of cancer, with significantly improved survival
for affected women.
Our Federal agencies have shown leadership in this area, as have many
of our private sector partners. I have introduced the Genomics and
Personalized Medicine Act today to support their efforts and to
encourage them to do even more and do it faster. Realizing the promise
of personalized medicine will require: continued Federal leadership and
agency collaboration; expansion and acceleration of genomics research;
a capable genomics workforce; incentives to encourage development of
genomic tests and therapies; and greater attention to the quality of
genetic tests, direct-to-consumer advertising, and use of personal
genomic information.
The Genomics and Personalized Medicine Act of 2006 will address each
of these issues. The bill requires the Secretary of Health and Human
Services to establish the Genomics and Personalized Medicine
Interagency Working Group to expand and accelerate genomics research,
and application of findings from such research, through enhanced
communication, collaboration and integration of relevant activities.
Genetic and genomics research will be expanded to increase the
collection of data that will advance both fields. The Secretary will
also develop a plan for a national biobanking research initiative and a
national distributed database, and provide support for local biobanking
initiatives.
This bill requests that the Administrator of the Health Resources and
Services Administration support efforts to recruit and retain health
professionals in the genomics workforce through educational and
research opportunities, financial incentives, and modernization of
training programs. In addition, the Secretary will promote initiatives
to increase the integration of genetics and genomics into all aspects
of medical and public health practice, with specific focus on training
and guideline development for providers without expertise or experience
in the field of genomics.
A financial incentive is included to encourage the development of
companion diagnostic tests. Specifically, this Act provides a 100-
percent tax credit for research and development costs associated with
companion diagnostic tests. This bill also requests the National
Academies of Science to formally study this issue in order to provide
expert guidance about the level of incentives and potential approaches
to really move this area forward.
The safety, efficacy, and availability of information about genetic
tests, including pharmacogenetic and pharmacogenomics tests, is another
focus of this bill. The Secretary will contract with the Institute of
Medicine to conduct a study and make recommendations regarding Federal
oversight and regulation of genetic tests. After this study is
complete, the Secretary will develop a decision matrix to help
determine which types of tests require review and the level of review
needed for such tests as well as the responsible agency. The Secretary
will also establish a specialty area for molecular and biochemical
genetics tests at CMS and direct a review the practice of direct-to-
consumer marketing.
Last but not least, the bill includes a sense of the Senate regarding
genetic nondiscrimination and privacy. The Genetic Information
Nondiscrimination Act of 2005, which passed the Senate with a vote of
98 to 0 in February of 2005, contained a number of important provisions
to protect the use of personal genetic information and prevent
discrimination based on such information. This section reaffirms the
importance and the necessity of that act for the responsible
advancement of personalized medicine.
Mr. President, we stand at this new frontier of personalized
medicine, and like Gregor Mendel, we must explore and test the
hypotheses and innovations in the area of genomics that can protect and
promote our health. Genomics holds unparalleled promise for public
health and for medicine, and the Genomics and Personalized Medicine Act
of 2006 will help us to fulfill this promise. I urge my colleagues to
support me in passing this critical legislation.
______
By Mr. DeWINE:
S. 3823. A bill to amend the Americans with Disabilities Act of 1990
and the Age Discrimination in Employment Act of 1967 to provide a means
to combat discrimination on the basis of age or disability, by
conditioning a State's receipt or use of Federal financial assistance
on the State's waiver of immunity from suit for violations under such
acts; to the Committee on Health, Education, Labor, and Pensions.
Mr. DeWINE. Mr. President, I am pleased to introduce the Civil Rights
Restoration Act of 2006. Today, there is a serious loophole in our
Nation's civil rights laws. If you are the victim of age or disability
discrimination and you work in the private sector, you can sue your
employer in Federal court for money damages. If, however, you work for
one of the States, you cannot sue in Federal court for money damages
under either the Age Discrimination in Employment Act, ADEA, or the
Americans with Disabilities Act, ADA.
This loophole is not the result of anything that we have done in
Congress. In fact, when we passed the ADEA and the ADA, we clearly
provided that the States, just like private entities, cannot
discriminate on the basis of age or disability. And, we said that if
they do, they can be sued for
[[Page S8842]]
money damages in Federal court. In our view, the right of an individual
to be free from discrimination on the basis of age or disability did
not depend on where one works.
Instead, this loophole was created by the Supreme Court. In several
recent decisions, the Supreme Court has reinterpreted the 11th
amendment to the Constitution and severely limited Congress's power to
subject States to lawsuits under section 5 of the 14th amendment. In
Kimel v. Florida Board of Regents, 528 U.S. 62, 2000, for instance, the
Court held that Congress lacks the power to subject States to suit for
money damages under the ADEA. In Board of Trustees of the University of
Alabama v. Garrett, 531 U.S. 356, 2001, the Court again held that
Congress lacked the power to subject States to suit for money damages,
this time under title I of the ADA.
Although individuals can still sue the States for injunctive relief,
the Supreme Court's restriction on suits for money damages has taken
away an essential tool for the victims of discrimination. As one
witness explained during hearings on the ADA, ``civil rights laws
depend heavily on private enforcement.'' ``[D]amages are essential to
provide private citizens a meaningful opportunity to vindicate their
rights. Attempts to weaken the remedies available under the ADA are
attacks on the ADA itself, and their success would make the ADA an
empty promise of equality.''
Unfortunately, by restricting the ability of individuals to sue for
money damages, the Garrett and Kimel decisions have severely limited
the ``promise of equality'' guaranteed by the ADA and the ADEA.
Lawsuits for money damages are the primary means for private
individuals to obtain redress for discrimination. They promote
deterrence and provide an important way for the Federal Government to
enforce antidiscrimination laws. By eliminating the ability of State
employees to sue their employers for such damages, the Supreme Court's
decisions in Kimel and Garrett have made enforcement of these civil
rights laws more difficult.
In addition, the Garrett and Kimel decisions have created a legal
regime that gives State employees fewer rights than other employees
covered by the ADA and the ADEA. At present, employees of local
governments and employees in the private sector are entitled to sue in
Federal court for money damages for violations of the ADA or the ADEA.
For the more than 2,500,000 individuals who work for the States,
however, such relief is no longer available.
Finally, the Garrett and Kimel decisions themselves are hardly a
model of clarity. In fact, several scholars have said that they find
them to be inconsistent with prior case law, at odds with the clear
language of the Constitution, disrespectful of Congress's role in our
system of government, and insensitive to the plight of those who are
the victims of discrimination.
In my opinion, Chairman Specter of the Judiciary Committee put it
well when he referred to these cases as ``inexplicable decisions.''
During the confirmation hearing for Chief Justice Roberts, Chairman
Specter said that the test that emerges from these Supreme Court
decisions ``has no grounding in the Constitution, no grounding in the
Federalist Papers, no grounding in the history of the country, [and]
comes out of thin air[.]''
I happen to agree with him. In my view, Garrett and Kimel were
wrongly decided. And, they should be overturned.
My bill will do just that. The Civil Rights Restoration Act of 2006
would provide that any State that receives Federal financial assistance
must allow plaintiffs the ability to sue the State for money damages in
Federal court if that State violates the terms of the ADEA or the ADA.
Of course, those plaintiffs must meet all the other requirements to
bring such a suit. My bill does not otherwise change the substance of
the ADA or ADEA, and it does not guarantee an outcome. It merely gives
the victims of discrimination access to federal courts so that they may
seek the relief to which they are otherwise entitled. In other words,
it will give the victims of age and disability discrimination the same
rights that we intended to give them when we first passed the ADEA and
the ADA.
This is a simple bill with a simple purpose: it closes a loophole
created by the Supreme Court; it re-establishes the original intent of
the ADA and the ADEA; and it restores to the victims of discrimination
the rights to which they have long been entitled. I am proud to
introduce the Civil Rights Restoration Act of 2006, and I ask my
colleagues to support it.
I ask unanimous consent that the text of the bill be printed in the
Record.
There being no objection, the text of the bill was ordered to be
printed in the Record, as follows:
S. 3823
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 ``Civil Rights Restoration Act
of 2006''.
SEC. 2. FINDINGS.
Congress finds the following:
(1) For over 30 years, Congress has outlawed employment
discrimination by State employers. In 1974, in the face of
pervasive age discrimination by State and other employers,
Congress amended the Age Discrimination in Employment Act of
1967 (29 U.S.C. 621 et seq.) (referred to in this Act as the
``ADEA'') to outlaw age discrimination by such employers. In
1990, Congress passed the Americans with Disabilities Act of
1990 (42 U.S.C. 12101 et seq.) (referred to in this Act as
the ``ADA'') to provide a ``clear and comprehensive national
mandate'', as described in section 2(b)(1) of that Act (42
U.S.C. 12101(b)(1)), to eliminate discrimination against
individuals with disabilities, even when that discrimination
came at the hands of States, including State employers.
(2)(A) Many years have passed since the enactment of those
laws, but discrimination on the basis of age or disability
remains a serious problem in the United States.
(B) Discrimination has invidious effects on its victims,
the workforce, the economy as a whole, and government
revenues. Discrimination on the basis of age or disability--
(i) increases the risk of unemployment among older workers
or individuals with disabilities, who may, as a result of the
discrimination, be forced to depend on government programs;
(ii) adversely affects the morale and productivity of the
workforce;
(iii) perpetuates unwarranted stereotypes about the
abilities of older workers or individuals with disabilities,
thus reducing the effectiveness of government programs
promoting nondiscrimination and integration; and
(iv) prevents the best use of both public and private
resources.
(3) Since the passage of the ADA and the ADEA, private
civil suits by the victims of discrimination have been an
essential tool in combating illegal discrimination. As one
witness explained during hearings on the legislation that
became the ADA, ``civil rights laws depend heavily on private
enforcement''. ``[D]amages are essential to provide private
citizens a meaningful opportunity to vindicate their rights.
Attempts to weaken the remedies available under the ADA are
attacks on the ADA itself, and their success would make the
ADA an empty promise of equality.''. Field Hearing on
Americans with Disabilities Act, Before the Subcommittee on
Select Education of the House Committee on Education and
Labor, 101st Cong. 68 (1989) (statement of Mr. Howard Wolf).
(4) In recent years, however, the Supreme Court has created
a serious loophole in the ADA and the ADEA, weakening their
``promise of equality''. In Kimel v. Florida Board of
Regents, 528 U.S. 62 (2000), for instance, the Supreme Court
held that Congress lacked the power to subject States to suit
for money damages under the ADEA. In Board of Trustees of the
University of Alabama v. Garrett, 531 U.S. 356 (2001), the
Court again held that Congress lacked the power to subject
States to suit for money damages, this time under title I of
the ADA (42 U.S.C. 12111 et seq.).
(5) As a result of those decisions, State employees who are
victimized by discrimination on the basis of age or
disability cannot sue in Federal court for money damages to
vindicate their Federal rights. Those decisions have, in
turn, had 2 unfortunate consequences.
(6) First, they have undermined the enforcement of the ADA
and the ADEA. Lawsuits for money damages are the primary
means for private individuals to obtain redress for
discrimination. In addition, lawsuits for money damages
promote deterrence and provide an important way for the
Federal Government to enforce antidiscrimination laws. By
eliminating the ability for State employees to sue their
employers for such damages, the Supreme Court's Kimel and
Garrett decisions have made enforcement of these civil rights
laws more difficult.
(7) Second, they have created a legal regime that gives
State employees fewer rights than other employees covered by
the ADA and the ADEA. At present, employees of local
governments and employees in the private sector are entitled
to sue in Federal court for money damages for violations of
the ADA or the ADEA. For the more than 2,500,000 individuals
who work for the States, however, such relief is no longer
available.
[[Page S8843]]
(8) Although most States have laws in effect that bar
discrimination on the basis of age or disability, those laws
are insufficient to provide redress for those individuals who
are subjected to discrimination by State employers or
agencies.
(9) A few States apply the doctrine of sovereign immunity
to completely bar State employees from suing in State court
for age discrimination. In several States, it is still
unclear whether State law claims can proceed in State court
for age discrimination or whether those claims are barred by
sovereign immunity. Finally, there are many States that
severely limit or restrict the kinds of remedies or monetary
relief available to State employees who bring suits for
discrimination on the basis of age.
(10) The same problems exist with State laws regarding
disability discrimination. In fact, one recent analysis has
shown that there are significant gaps in the coverage and
remedies available under State laws outlawing discrimination.
(11) Thus, while State laws are important in trying to stem
discrimination on the basis of age or disability, they are
currently inadequate to close the loophole created by the
Kimel and Garrett decisions.
(12) In the years since the Kimel and Garrett decisions,
many States have also challenged the constitutionality of
title II of the ADA (42 U.S.C. 12131 et seq.). These
challenges have forced individuals with disabilities into
extensive litigation about sovereign immunity when they seek
redress for disability discrimination in such fundamental
areas as access to the courts, access to community-based
services, access to State-sponsored health insurance, access
to public transportation, access to handicapped parking,
access to mental health services, and access to public
education. The Supreme Court has issued several decisions
that invite even more litigation. In Tennessee v. Lane, for
instance, the Court held that, under the particular facts of
that case, a plaintiff could sue the State for money damages
under title II of the ADA, even though the Court, in the
Garrett case, had barred a claim for such damages under title
I of that Act (42 U.S.C. 12111 et seq.) Tennessee v. Lane,
541 U.S. 509 (2004).
(13) After the Lane decision, some claims against States
are permitted to proceed under the ADA, while others are not.
This has made it extremely difficult for the victims of
discrimination, States, and Congress to determine precisely
when States are subject to suit under the ADA and when they
are not. The confusion has spawned a significant amount of
litigation in the lower Federal courts. This jurisprudence
has even caused the Chairman of the Committee on the
Judiciary of the Senate, Senator Arlen Specter, to condemn
the Court's recent decisions as ``inexplicable''.
(14) The Constitution provides Congress with the power to
enact legislation--
(A) to clarify that, despite the Supreme Court's decisions
in the Kimel and Garrett cases, the States are subject to
suit just like other entities when the States violate the ADA
and the ADEA; and
(B) to end the confusion created by the Court's decision in
the Lane case.
(15) Under section 8 of article I of the Constitution,
``The Congress shall have power to lay and collect taxes,
duties, imposts and excises, to pay the debts and provide for
the common defense and general welfare of the United
States''.
(16) Congress' power under this language, known as the
Spending Clause, is well-established. Under this Clause,
Congress has the power to require the States to abide by
certain conditions in exchange for receiving Federal
financial assistance. This authority has been recognized by
the Supreme Court repeatedly through the years and reaffirmed
recently. United States v. Butler, 297 U.S. 1 (1936)
(declaring that Congress may exert authority through its
spending power); South Dakota v. Dole, 483 U.S. 203 (1987)
(upholding condition requiring the establishment of a
drinking age of 21 years in exchange for the receipt of
Federal highway dollars). In fact, the Supreme Court has
specifically held that Congress may require a State, as a
condition of receiving Federal financial assistance, to waive
its immunity from suit for violations of Federal law. College
Savings Bank v. Florida Prepaid Postsecondary Education
Expense Board, 527 U.S. 666 (1999).
(17) Congress has previously used its spending power to
require States to waive their immunity from suit in exchange
for receiving Federal financial assistance. For instance, the
provisions of section 1003 of the Rehabilitation Act
Amendments of 1986 (42 U.S.C. 2000d-7) provide that a State
shall not be immune from suit under the 11th amendment for
violations of section 504 of the Rehabilitation Act of 1973
(29 U.S.C. 794), title IX of the Education Amendments of 1972
(20 U.S.C. 1681 et seq.), the Age Discrimination Act of 1975
(42 U.S.C. 6101 et seq.), and title VI of the Civil Rights
Act of 1964 (42 U.S.C. 2000d et seq.). At least one court,
however, has suggested that those provisions do not apply to
the ADA or the ADEA. Brown v. Washington Metro Area Transit
Authority, No. DKC 2005-0052, 2005 U.S. Dist. LEXIS 16881 (D.
Md. 2005).
(18) By requiring States to waive their immunity from suit
under the ADA and the ADEA in exchange for receiving Federal
assistance, the Federal government can ensure that Federal
dollars are not ``frittered away'' on unlawful
discrimination. Such a conditional waiver will help Congress
``protect the integrity of the vast sums of money distributed
through Federal programs''. Sabri v. United States, 541 U.S.
600 (2004). ``Simple justice requires that public funds, to
which all taxpayers . . . contribute, not be spent in any
fashion which encourages, entrenches, subsidizes, or results
in . . . discrimination''. Lau v. Nichols, 414 U.S. 563
(1974). This simple principle applies whether the
discrimination is based on race, as in the Lau case, or age,
or disability, as in Barbour v. Washington Metro Area Transit
Authority, 374 F.3d 1161 (D.C. Cir. 2004).
(19) Such a conditional waiver does not coerce a State in
any way. The Supreme Court has recognized that a State's
voluntary waiver of its 11th amendment right is
constitutional. College Savings Bank v. Florida Prepaid
Postsecondary Education Expense Board, 527 U.S. 666 (1999)
(citing Clark v. Barnard, 108 U.S. 436 (1883)). The Court has
explicitly recognized that a State's acceptance of Federal
funds constitutes a knowing agreement to a congressionally-
imposed condition on the funds. Thus, while Congress may not
compel States to waive their immunity granted under the 11th
amendment, a voluntary State waiver condition is wholly
permissible. Alden v. Maine, 527 U.S. 706 (1999).
(20) The Kimel and Garrett decisions frustrate the ability
of the ADA and the ADEA to protect individual rights and
remedy violations of Federal law. In the wake of those
decisions, and in recognition that State laws may be
insufficient to protect against discrimination on the basis
of age or disability, it is essential to require that States
waive their immunity from suit under the ADA and the ADEA for
those programs or activities receiving Federal financial
assistance.
SEC. 3. PURPOSES.
The purposes of this Act are--
(1) to provide to any State employee or person aggrieved by
any program or activity that receives Federal financial
assistance the right to sue the State for money damages for
any violation of the ADA or the ADEA; and
(2) to provide that a State's receipt or use of Federal
financial assistance for any program or activity of a State
shall constitute a waiver of sovereign immunity, under the
11th amendment to the Constitution or otherwise, to a suit
brought by any employee or person aggrieved by that program
or activity for any violation of the ADA or the ADEA.
SEC. 4. ABROGATION OF STATE SOVEREIGN IMMUNITY.
(a) Age Discrimination in Employment Act of 1967.--Section
7 of the Age Discrimination in Employment Act of 1967 (29
U.S.C. 626) is amended by adding at the end the following:
``(g) Waiver of Sovereign Immunity.--
``(1) Waiver.--A State's receipt or use of Federal
financial assistance for any program or activity of a State
shall constitute a waiver of sovereign immunity, under the
11th amendment to the Constitution or otherwise, to a suit
brought by any employee or person aggrieved by that program
or activity for equitable, legal, or other relief authorized
by or through this Act.
``(2) Abrogation for constitutional violation.--In addition
to the abrogation of sovereign immunity already accomplished
by this Act, a State's sovereign immunity, under the 11th
amendment to the Constitution or otherwise, is abrogated for
any suit brought by any employee or person for equitable,
legal, or other relief authorized by or through this Act, for
conduct that violates the 14th amendment (including the
constitutional rights incorporated in the 14th amendment) and
that also violates this Act.
``(3) Definitions.--In this subsection:
``(A) Program or activity.--
``(i) In general.--The term `program or activity' has the
meaning given the term in section 309 of the Age
Discrimination Act of 1975 (42 U.S.C. 6107).
``(ii) Operations included.--The term includes any
operation carried out, funded, or arranged by an entity
described in clause (i) or (ii) of section 309(4)(A) of such
Act (42 U.S.C. 6107(4)(A)) that receives Federal financial
assistance, even if the entity does not use the Federal
financial assistance for the operation.
``(B) Recipient.--A State shall be considered to receive
Federal financial assistance for a program or activity if the
program or activity--
``(i) receives the assistance from an intermediary; and
``(ii) is the intended recipient under the statutory
provision through which the intermediary receives the
assistance.
``(C) Construction.--Nothing in this paragraph shall be
construed to suggest that, for purposes of this subsection or
title III of such Act--
``(i) the term `program or activity' would not include the
operation described in subparagraph (A)(ii), in the absence
of this paragraph; or
``(ii) a State described in subparagraph (B) would not be
considered to receive Federal financial assistance for a
program or activity, in the absence of this paragraph.''.
(b) Title I of the Americans With Disabilities Act of
1990.--Section 107 of the Americans with Disabilities Act of
1990 (42 U.S.C. 12117) is amended by adding at the end the
following:
``(c) Waiver of Sovereign Immunity.--
``(1) Waiver.--A State's receipt or use of Federal
financial assistance for any program or activity of a State
shall constitute a waiver of sovereign immunity, under the
11th amendment to the Constitution or otherwise, to a suit
brought by any employee or
[[Page S8844]]
person alleging a violation of this title (including
regulations promulgated under section 106) or section 503, or
otherwise aggrieved, by that program or activity for
equitable, legal, or other relief authorized by or through
this Act or section 1977A of the Revised Statutes (42 U.S.C.
1981a).
``(2) Abrogation for constitutional violation.--In addition
to the abrogation of sovereign immunity already accomplished
by section 502, a State's sovereign immunity, under the 11th
amendment to the Constitution or otherwise, is abrogated for
any suit brought by any employee or person for equitable,
legal, or other relief authorized by or through this Act or
section 1977A of the Revised Statutes (42 U.S.C. 1981a), for
conduct that violates the 14th amendment (including the
constitutional rights incorporated in the 14th amendment) and
that also violates this title (including regulations
promulgated under section 106) or section 503.
``(3) Definitions.--In this subsection:
``(A) Program or activity.--
``(i) In general.--The term `program or activity' has the
meaning given the term in section 504(b) of the
Rehabilitation Act of 1973 (29 U.S.C. 794(b)).
``(ii) Operations included.--The term includes any
operation carried out, funded, or arranged by an entity
described in subparagraph (A) or (B) of section 504(b)(1) of
such Act (29 U.S.C. 794(b)(1)) that receives Federal
financial assistance, even if the entity does not use the
Federal financial assistance for the operation.
``(B) Recipient.--A State shall be considered to receive
Federal financial assistance for a program or activity if the
program or activity--
``(i) receives the assistance from an intermediary; and
``(ii) is the intended recipient under the statutory
provision through which the intermediary receives the
assistance.
``(C) Construction.--Nothing in this paragraph shall be
construed to suggest that, for purposes of this subsection or
such section 504--
``(i) the term `program or activity' would not include the
operation described in subparagraph (A)(ii), in the absence
of this paragraph; or
``(ii) a State described in subparagraph (B) would not be
considered to receive Federal financial assistance for a
program or activity, in the absence of this paragraph.''.
(c) Title II of the Americans With Disabilities Act of
1990.--Section 203 of the Americans with Disabilities Act of
1990 (42 U.S.C. 12133) is amended--
(1) by inserting ``(a) In General.--'' before ``The''; and
(2) by adding at the end the following:
``(b) Waiver of Sovereign Immunity.--
``(1) Waiver.--A State's receipt or use of Federal
financial assistance for any program or activity of a State
shall constitute a waiver of sovereign immunity, under the
11th amendment to the Constitution or otherwise, to a suit
brought by any employee or person alleging a violation of
this title (including regulations promulgated under section
204, 229, or 244) or section 503, or otherwise aggrieved, by
that program or activity for equitable, legal, or other
relief authorized by or through this Act.
``(2) Abrogation for constitutional violation.--In addition
to the abrogation of sovereign immunity already accomplished
by section 502, a State's sovereign immunity, under the 11th
amendment to the Constitution or otherwise, is abrogated for
any suit brought by any employee or person for equitable,
legal, or other relief authorized by or through this Act, for
conduct that violates the 14th amendment (including the
constitutional rights incorporated in the 14th amendment) and
that also violates this title (including regulations
promulgated under section 204, 229, or 244) or section 503.
``(3) Definitions.--In this subsection:
``(A) Program or activity.--
``(i) In general.--The term `program or activity' has the
meaning given the term in section 504(b) of the
Rehabilitation Act of 1973 (29 U.S.C. 794(b)).
``(ii) Operations included.--The term includes any
operation carried out, funded, or arranged by an entity
described in subparagraph (A) or (B) of section 504(b)(1) of
such Act (29 U.S.C. 794(b)(1)) that receives Federal
financial assistance, even if the entity does not use the
Federal financial assistance for the operation.
``(B) Recipient.--A State shall be considered to receive
Federal financial assistance for a program or activity if the
program or activity--
``(i) receives the assistance from an intermediary; and
``(ii) is the intended recipient under the statutory
provision through which the intermediary receives the
assistance.
``(C) Construction.--Nothing in this paragraph shall be
construed to suggest that, for purposes of this subsection or
such section 504--
``(i) the term `program or activity' would not include the
operation described in subparagraph (A)(ii), in the absence
of this paragraph; or
``(ii) a State described in subparagraph (B) would not be
considered to receive Federal financial assistance for a
program or activity, in the absence of this paragraph.''.
SEC. 5. EFFECTIVE DATE.
(a) Age Discrimination in Employment Act of 1967.--
(1) In general.--With respect to a particular program or
activity, paragraphs (1) and (3) of section 7(g) of the Age
Discrimination in Employment Act of 1967 (29 U.S.C. 626(g))
apply to conduct occurring on or after the day, after the
date of enactment of this Act, on which a State first
receives or uses Federal financial assistance for that
program or activity. Section 7(g)(2) of the Age
Discrimination in Employment Act of 1967 (29 U.S.C.
626(g)(2)) applies to all civil actions pending on that date
of enactment or filed thereafter.
(2) Program or activity; receives federal financial
assistance.--The definition and rule specified in
subparagraphs (A) and (B) of section 7(g)(3) of such Act (29
U.S.C. 626(g)(2)) shall apply for purposes of this
subsection.
(b) Americans With Disabilities Act of 1990.--
(1) In general.--With respect to a particular program or
activity, paragraphs (1) and (3) of section 107(c) and
paragraphs (1) and (3) of section 203(b) of the Americans
with Disabilities Act of 1990 (42 U.S.C. 12117(c), 12133(b))
apply to conduct occurring on or after the day, after the
date of enactment of this Act, on which a State first
receives or uses Federal financial assistance for that
program or activity. Sections 107(c)(2) and 203(b)(2) of the
Americans with Disabilities Act of 1990 (42 U.S.C.
12117(c)(2), 12133(b)(2)) apply to all civil actions pending
on that date of enactment or filed thereafter.
(2) Program or activity; receives federal financial
assistance.--The definition and rule specified in
subparagraphs (A) and (B) of section 107(c)(3) of such Act
(42 U.S.C. 12117(c)(3)) shall apply for purposes of this
subsection.
______
By Mr. BURNS (for himself, Mr. Frist, Mr. DeWine, Mr. Allard, Mr.
Coleman, Mr. Smith, and Mr. Allen):
S. 3825. A bill to end the flow of methamphetamine and precursor
chemicals coming across the border of the United States; to the
Committee on the Judiciary.
Mr. BURNS. Mr. President, I rise today because, despite the heroic
efforts of law enforcement agencies in Montana and elsewhere around the
country, the use of methamphetamine continues to rise. In the Senate,
we have passed legislation to fund efforts to go after domestic
production of meth--from provisions of the USA PATRIOT Act, which
restricted the sale of pseudoephedrine, to funds for the cleanup of
meth labs. While law enforcement officials report that these efforts
are in fact reducing the production of meth within our borders, they
also tell me that foreign-produced meth is being imported to fill the
supply void.
For this reason, I have introduced the ``Methamphetamine Trafficking
Prevention Act of 2006'' in order to bring additional Federal resources
to bear on this problem. I want to thank my colleagues, Senate Majority
Leader Frist, Senator DeWine, Senator Allard, Senator Coleman, Senator
Allen and Senator Smith for joining me in sponsoring this legislation.
The United States shares around 4,000 miles of border with Canada and
almost 2,000 miles with Mexico. Controlling what comes across these
borders must be a top priority for national security.
A report recently released by the President's Office of National Drug
Control Policy, the Department of Justice, and the Department of Health
and Human Services had this to say:
The most urgent priority of the Federal Government toward
reducing the supply of methamphetamine in the Untied States
will be to tighten the international market for chemical
precursors, such as pseudoephedrine and ephedrine, used to
produce the drug. Most of the methamphetamine used in
America--probably between 75 and 85 percent--is made with
chemical precursors that are diverted at some point from the
international stream of commerce . . . Although domestic
enforcement continues to be a priority, the impact of State
laws controlling retail access to precursors, together with
Federal, State, and local enforcement efforts, has had a
significant impact on the domestic production of
methamphetamine. As a result, a larger proportion of the
methamphetamine consumed in the United States is now coming
across the border as a final product . . .
Meth trafficking has quickly adapted to increased domestic efforts to
stem production and the need for an international solution is clear.
This legislation will provide an additional $15 million for the
Department of Justice's Meth Hot Spots Program for the creation of
``Border Technology Grants'' to support technology used to detect meth
and substances used to make meth on the border through aerial
surveillance and to find meth labs around the border with hyperspectral
sensors. Another $5 million will be provided to the Drug Enforcement
Agency for trace chemical detectors to be used
[[Page S8845]]
on U.S. borders. These sensors will also assist in locating explosive
devices.
The international nature of meth trafficking makes Federal action
necessary, but the United States cannot act alone. This legislation
will also coordinate Federal drug enforcement efforts with foreign
counterparts in order to devise a strategy to fight meth production
across national borders. Officials from the U.S. Trade Representative
will discuss meth trafficking with trading partners in multi- and bi-
lateral negotiations in order to curb the shipment of this dangerous
substance.
The impacts of the meth crisis are felt nationwide. In Montana, I
have seen first-hand the consequences of meth addiction on individuals,
their families, and communities. Nowhere are these problems more
serious than on Indian Reservations. In Montana, there are several
reservations on or near the Canadian border. While Montana's law
enforcement has done a good job shutting down meth labs in Montana, the
flow of meth from Canada and Mexico has more than replaced domestic
meth production. This bill would require the Department of Justice to
report to Congress the problems faced on these reservations with
respect to meth abuse and trafficking.
It is time to take the response to this crisis to a new--
international--level and I encourage my colleagues to support these
efforts.
______
By Mr. MENENDEZ:
S. 3826. A bill to amend the Internal Revenue Code of 1986 to exclude
from gross income military pay received by a member of a reserve
component of the Armed Forces of the United States who is called to
active duty; to the Committee on Finance.
Mr. MENENDEZ. Mr. President, over the past few decades, our country
has seen a major shift in the way that our Reserve component has been
used. Traditionally, National guardsmen and reservists have
supplemented our active-duty troops at times of a major war or
conflict. But as America faces ever-increasing military challenges, we
see these forces now replacing active duty troops in operations around
the world.
Since September 11, a large number of our Reserve component has been
called to active duty, and it is expected to remain that way for the
foreseeable future. Our Nation not only relies on the National Guard
during times of war, but during crises and disasters within our
borders. In my home State of New Jersey, we have witnessed the critical
role the Guard plays in supporting our first responders and assisting
with domestic emergencies. The Guard immediately responded to the 9/11
attacks, provided relief in the aftermath of the hurricanes on the gulf
coast, and aided New Jerseyans after the flooding in our State.
As our Nation continues to rely on the efforts of National Guard
members and reservists, it is imperative that we provide them and their
families the support they need at home. Unfortunately, many married
Guard members and reservists on active duty lose their income from
their civilian jobs when they are activated. It is unconscionable that
we would make these soldiers choose between their duty to our country
and the financial security of their families.
That is why I am introducing the Citizen Soldier Relief Act, which
would exempt from taxation incomes earned by members of the Reserve
component that are called to duty outside the traditional 1 weekend per
month and 2 weeks per year. My bill would address a current void that
exists in tax relief for our National Guard members and reservists who
serve in noncombat-related capacities.
By providing tax relief for these hard-working men and women, we can
show them that our Nation appreciates their service and their
sacrifice. I ask my colleagues to support this important legislation.
I ask unanimous consent that the text of the bill be printed in the
Record.
There being no objection, the text of the bill was ordered to be
printed in the Record, as follows:
S. 3826
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 ``Citizen Soldier Relief Act
of 2006''.
SEC. 2. EXCLUSION FROM GROSS INCOME FOR MILITARY PAY RECEIVED
BY A MEMBER OF A RESERVE COMPONENT OF THE ARMED
FORCES OF THE UNITED STATES CALLED TO ACTIVE
DUTY.
(a) In General.--Section 112 of the Internal Revenue Code
of 1986 (relating to certain combat zone compensation of
members of the Armed Services) is amended by adding at the
end the following new subsection:
``(e) Reserve Components Called to Active Duty.--In the
case of an individual--
``(1) who is called or ordered to active duty in the Armed
Forces of the United States for a period in excess of 180
days or for an indefinite period, and
``(2) at the time so called or ordered is a member of a
reserve component of the Armed Forces of the United States,
gross income shall not include military pay (as defined in
section 101(21) of title 37, United States Code) received by
such individual on account of such active duty service.''.
(b) Conforming Amendments.--
(1) The heading for section 112 of such Code is amended by
inserting before the period
``; PAY OF MEMBERS OF RESERVE COMPONENTS OF SUCH ARMED FORCES
CALLED TO ACTIVE DUTY''.
(2) The item relating to section 112 in the table of
sections for part III of subchapter B of chapter 1 of such
Code is amended by inserting before the period ``; pay of
members of reserve components of such Armed Forces called to
active duty''.
(3) Section 3401(a)(1) of such Code is amended by inserting
``; pay of members of reserve components of such Armed Forces
called to active duty'' after ``United States''.
(c) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after the date of the
enactment of this Act.
______
By Mr. INHOFE:
S. 3828. A bill to amend title 4, United States Code, to declare
English as the official language of the Government of the United
States, and for other purposes; to the Committee on Homeland Security
and Governmental Affairs.
Mr. INHOFE. Mr. President, there are many things we take for granted
that have made our Nation prosperous. The Founding Fathers spent their
lives seeking to create a United States of America that could survive
against the great powers of England, France, and Spain.
These men knew that America had at least one advantage over the
European powers: size. President Jefferson's Louisiana Purchase of 1803
effectively doubled the size of the United States and provided a means
by which America's inland farmers would have a guaranteed way to ship
their products to market.
Even today, the comparison remains striking when you ask, ``How far
will one gallon of fuel move one ton of freight?''
One gallon of fuel can move a ton of freight 59 miles by truck and
386 miles by rail. That same gallon of fuel will move a ton of freight
by water 522 miles.
One of the main reasons for the economy of waterborne shipping lies
in something physics students know as friction and we pilots know as
drag.
The more that friction or drag increase, the more that fuel economy
decreases. There is a lot of friction between a road and a truck. There
is far less between a ship and a river.
This simple rule led me to lead the fight for the Water Resources
Development Act a few days ago. As one of the most fiscally
conservative Members of this body, I have long argued that the two most
important functions of the Federal Government are to provide for
national defense and public infrastructure.
Efficiency and economics require the Government to not only plan but
to construct and maintain public infrastructure. Investments in real
public infrastructure, like waterways and barge canals, create
economies of scale that have made the American economy a wonder of the
world.
My determination to stand up in this Chamber at every opportunity on
behalf of national defense and public infrastructure is a large part of
the reason I am introducing legislation today to make English America's
official language.
A common means of communication has created one giant market for
goods and labor from Maine to California. A resident of Tulsa can seek
work in New Hampshire, Oregon, or Georgia without having to learn a
second language. A company based in Oklahoma City can readily sell its
products from Portland, ME, to Los Angeles, CA.
In Europe, by contrast, a resident of Berlin cannot look for work in
Paris or
[[Page S8846]]
Warsaw without surmounting considerable language barriers. A German
company cannot easily sell its products in Madrid, again, in part
because of the language barrier.
The European Union is an effort to create a United States-like common
market in Western Europe, among other things. Europeans are spending
billions of euros to try to replicate what we Americans have enjoyed
for free these past 230 years.
There are too many signs that we are allowing this great advantage of
an American nation united by a common language to slip through our
fingers.
President Bill Clinton created the most radical language policy 6
years ago when he signed Executive Order--E.O.--13166 on August 11,
2000.
E.O. 13166 declared that all recipients of Federal funds had to be
ready to provide all services in any language anyone wished to speak at
any time.
E.O. 13166 means that while Canada has only two official languages
and the United Nations just six, the United States now has over 200
official languages.
Efforts to repeal E.O. 13166 have run aground because of a
fundamental misunderstanding of what repeal would mean.
After the debate on my official English amendment, S.A. 4064, to the
Senate immigration bill, S. 2611, E.J. Dionne, Jr., told readers of the
May 23 Washington Post that he was still going to pray over his
children in French. I have only one word to say to Mr. Dionne: relax.
Neither my earlier amendment to the immigration legislation nor the
legislation I am introducing today will have any impact whatsoever on
the prayers of the Dionne family or, for that matter, a dinner table
chat in Spanish or a family discussion in Navajo.
Official English laws are not directed at the language people
themselves choose to speak but, rather, in what language the Government
speaks to the American people.
My bill basically recognizes the practical reality of the role of
English as our national language. It states explicitly that English is
our national language and provides English a status in law it has not
before held.
Making English the official language will clarify that there is no
entitlement to receive Federal documents and services in languages
other than English. My legislation declares that any rights of a
person, as well as services or materials in languages other than
English, must be authorized or provided by law. It recognizes the
decades of unbroken court opinions that civil rights laws protecting
against national origin and discrimination do not create rights to
Government services and materials in languages other than English.
If passed, my bill will also repeal all bilingual, or foreign-
language, ballot mandates. There is a reason bilingual ballots make so
many of my constituents upset. Gathering together at the polling place
is one of the few remaining civic rituals we perform as Americans.
I can remember going along with my mother on election day; the
American flag behind the table where voters signed in and were verified
as eligible; the sound of the ``thunk'' of the levers on the voting
machine. I remember thinking even then that voting was a privilege to
be approached seriously.
In all too many places these days, the local polling place resembles
nothing more than a branch of the Mexican consulate or an outpost of
the United Nations--signs in two, three, or even more languages; people
yelling at weary poll workers because a Cantonese speaker was summoned
to translate for a speaker of Mandarin Chinese.
My constituents ask me all the time how people are supposed to cast
an informed vote if they cannot follow the debates, which are in
English, and read the campaign literature, also in English. Bilingual
ballots strike many of my constituents as an invitation to all kinds of
voting fraud.
Of course, when the Government attempts to please everyone by
translating important documents into multiple languages, mistakes are
inevitable.
To mention just one example out of many, in 1993, the Chinese ballot
in New York City had the Chinese characters for the word ``no'' as a
translation of the English word ``yes.'' One can only imagine the
confusion that ensued.
Official English is popular, even among Hispanics. As I said before
during the debate on my amendment, if you look at some of the recent
polling data, such as the Zogby poll in 2006, it found 84 percent of
Americans, including 77 percent of Hispanics, believed that English
should be the national language of government operations. A poll of 91
percent of foreign-born Latino immigrants agreed that learning English
is essential to succeed in the United States, according to a 2002
Kaiser Family Foundation survey.
I wish to conclude by saying that I think it would be a tremendous
demonstration of good faith by the White House to support my
legislation. America has plenty of language problems already.
If the Senate version of the President's immigration proposals should
become law, every guest worker and ever recipient of amnesty would
arrive on our shores as a little bundle of linguistic entitlements.
Local government offices and public schools will be simply overwhelmed
by the costly language mandates each of these individuals and their
families will trigger.
A nation certain of its language and culture can continue to be a
welcoming nation to legal immigrants. A nation with uncontrolled
borders and no convictions about what it expects immigrants to do once
they arrive will soon become a nation in name only.
Mr. President, my legislation is good for America and good for
everyone in America. I urge its speedy passage by my colleagues.
______
By Mr. DOMENICI (for himself and Mr. Bingaman):
S. 3832. A bill to direct the Secretary of the Interior to establish
criteria to transfer title to reclamation facilities, and for other
purposes; to the Committee on Energy and Natural Resources.
Mr. DOMENICI. Mr. President, since its inception in 1902, the Bureau
of Reclamation has constructed numerous facilities which have supplied
much of the water and power necessary to populate the Western United
States. The National Research Council of the National Academy of
Sciences estimates that Reclamation currently owns 673 facilities that
are part of 178 major projects. When many of these facilities were
constructed, there were few local communities and utilities capable of
assuming title to the facilities. However, this is no longer the case.
Many project beneficiaries are both willing and able to receive title
to Reclamation facilities.
The growth of the environmental movement during the 1970s, explosive
population growth in the West, Indian water rights claims, and
urbanization transformed Reclamation from an agency that plans,
designs, and constructs large projects into one that manages existing
Reclamation facilities and allocates water resources in accordance with
applicable law. Correspondingly, appropriations for Reclamation have
decreased over the past 40 years. As chairman of the Energy and Water
Development Appropriations Subcommittee, I have become increasingly
concerned that Reclamation lacks adequate resources to fulfill its
current mission, particularly in light of increasing nonreimbursable
expenditures required for operations, maintenance, and rehabilitation
of Reclamation facilities. For this reason, we need to investigate
opportunities, including title transfers, to make more money available
to Reclamation.
Reclamation project beneficiaries frequently claim that Reclamation
services passed on to customers are far more expensive than comparable
services in the private sector and that Reclamation ownership of these
facilities imposes an unnecessary administrative burden on project
beneficiaries. For these reasons, many project beneficiaries who have
fulfilled their construction repayment obligations would like to pursue
the transfer of title to Reclamation facilities and land. In addition
to benefiting project beneficiaries, transfer of title to Reclamation
facilities also divests the Federal Government of the liability,
operation, maintenance, management, and regulation associated with
these facilities. In its framework for transfer of title to Reclamation
facilities, Reclamation acknowledged its commitment to a
[[Page S8847]]
Federal Government that ``works better and costs less.'' I believe that
pursuing title transfers on a widespread basis is consistent with this
policy.
While Reclamation currently has an administrative process for
determining which uncomplicated transfers should be pursued by
Congress, it is my belief that the process is not as aggressive or
comprehensive as it should be. The bill I introduce today would direct
the Secretary of the Interior to promulgate criteria for the transfer
of title to Reclamation facilities and lands, including multipurpose
and multibeneficiary projects. The bill also directs the Secretary of
the Interior to undertake a study to identify which Reclamation
facilities may be appropriate for transfer. Consistent with current
policy, Congress would evaluate which of these facilities should be
transferred.
I realize that title transfer may not be appropriate for every
Reclamation facility. However, I believe that there are a great number
of instances in which title transfer would benefit the United States
and Reclamation customers.
I thank Senator Bingaman, ranking member of the Energy and Natural
Resources Committee, for being an original cosponsor of this
legislation.
I ask unanimous consent that the text of the bill be printed in the
Record.
There being no objection, the text of the bill was orderd to be
printed in the Record, as follows:
S. 3832
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 ``Reclamation Facility Title
Transfer Act of 2006''.
SEC. 2. DEFINITIONS.
In this Act:
(1) Indian tribe.--The term ``Indian tribe'' means an
Indian tribe, band, Nation, or other organized group or
community that is recognized as eligible for the special
programs and services provided by the United States to
Indians because of their status as Indians.
(2) Project beneficiary.--The term ``project beneficiary''
means 1 or more contractors or other persons or entities that
receive a direct benefit under 1 or more of the authorized
purposes for a reclamation facility.
(3) Reclamation facility.--
(A) In general.--The term ``reclamation facility'' means
any single-purpose or multipurpose structure, reservoir,
impoundment, ditch, canal, pumping station, or other facility
for the storage, diversion, distribution, or conveyance of
water--
(i) that is--
(I) authorized by Federal reclamation law; and
(II) constructed by the United States under that law;
(ii) for which the United States holds title; and
(iii) for which any non-Federal construction repayment
obligations, as applicable, have been fulfilled.
(B) Inclusions.--The term ``reclamation facility'' includes
any land that is appurtenant to, and any administrative
buildings associated with, a reclamation facility.
(4) Secretary.--The term ``Secretary'' means the Secretary
of the Interior, acting through the Commissioner of
Reclamation.
(5) Stakeholder.--The term ``stakeholder'' means--
(A) a project beneficiary; and
(B) any person that--
(i) receives an indirect benefit from a reclamation
facility; or
(ii) may be particularly affected by any transfer of title
to a reclamation facility.
SEC. 3. TITLE TRANSFER.
(a) In General.--Not later than 1 year after the date of
enactment of this Act, the Secretary shall establish criteria
for the transfer of title to reclamation facilities from the
United States to project beneficiaries or an entity approved
by project beneficiaries.
(b) Inclusions.--The criteria established under subsection
(a) shall include--
(1) criteria requiring that--
(A) project beneficiaries (or an entity approved by the
project beneficiaries) be willing to have title to a
reclamation facility transferred to the project
beneficiaries;
(B) if the project beneficiaries have not yet assumed
operations, maintenance, and rehabilitation of the applicable
reclamation facility, the project beneficiaries be capable of
assuming operations, maintenance, and rehabilitation of the
reclamation facility;
(C) if there are multiple project beneficiaries, there is
an agreement among multiple project beneficiaries relating to
the transfer of title to a reclamation facility; and
(D) project beneficiaries be willing to assume any
liability associated with the reclamation facility for which
title is proposed to be transferred;
(2) criteria requiring an assessment by the Secretary of--
(A) any effects that the transfer of title would have on
the ability of the Federal Government to carry out the trust
responsibility of the Federal Government with respect to any
Indian tribe;
(B) the cost savings to the United States if title to a
reclamation facility is transferred;
(C) the interest of the project beneficiaries in owning the
reclamation facility;
(D) any environmental considerations associated with the
transfer of title to a reclamation facility;
(E) whether stakeholders will be adversely impacted by the
transfer;
(F) the ability of project beneficiaries to meet financial
obligations associated with a reclamation facility,
including--
(i) transactional costs; and
(ii) costs associated with meeting the compliance
requirements of the National Environmental Policy Act of 1969
(42 U.S.C. 4321 et seq.);
(G) any legal considerations associated with the transfer
of title to a reclamation facility, including any Federal,
State, tribal, and local laws, international treaties, and
interstate compacts that apply to the transfer of title of a
reclamation facility to project beneficiaries; and
(H) the willingness and ability of project beneficiaries to
fulfill any legal obligations associated with receiving title
to a reclamation facility, including compliance with any
Federal, State, tribal, and local laws, international
treaties, and interstate compacts that apply to the transfer
of title of a reclamation facility to project beneficiaries;
(3) procedures for--
(A) soliciting stakeholder involvement in the transfer of
title to a reclamation facility; and
(B) involving appropriate Federal, State, and local
entities in evaluating and carrying out the transfer of title
to a reclamation facility;
(4) the requirement that the Secretary prepare a
comprehensive list of any items that need to be accomplished
before the transfer of title to a reclamation facility;
(5) procedures to allow the Secretary to address real
property and cultural and historic preservation issues in a
more efficient manner; and
(6) any other criteria that the Secretary determines to be
appropriate.
(c) Use of Existing Criteria.--For purposes of establishing
the criteria under subsection (a), the Secretary shall, to
the maximum extent practicable and consistent with this Act,
incorporate any applicable criteria that are in existence on
the date of enactment of this Act, including the criteria for
the transfer of title to uncomplicated projects described in
the Bureau of Reclamation document entitled ``Framework for
the Transfer of Title: Bureau of Reclamation Projects'' and
dated August 7, 1995.
SEC. 4. REPORT.
Not later than 2 years after the date of enactment of this
Act, the Secretary shall submit to the Committee on Energy
and Natural Resources of the Senate and the Committee on
Resources of the House of Representatives a report that
includes any recommendations of the Secretary with respect to
which reclamation facilities may be appropriate for transfer
in accordance with the criteria established under section
3(a).
SEC. 5. AUTHORIZATION OF APPROPRIATIONS.
There is authorized to be appropriated to carry out this
Act $2,000,000 for the period of fiscal years 2007 through
2010.
SEC. 6. TERMINATION OF AUTHORITY.
The authority of the Secretary to carry out this Act
terminates on the date that is 5 years after the date of
enactment of this Act.
______
By Mr. KERRY:
S. 3833. A bill to authorize support for the Armed Forces Support
Foundation in assisting members of the National Guard and Reserve and
former members of the Armed Forces in securing employment in the
private sector, and for other purposes; to the Committee on Armed
Services.
Mr. KERRY. Mr. President, today I am introducing the Armed Forces
Employment Support Act, AFESA, which will help members of our Armed
Forces transition to employment after their military service. My
legislation will help the Armed Forces Support Foundation, AFSF, a
nonprofit organization that helps military veterans and members of the
National Guard and Reserve find jobs in the private sector, create new
programs that help veterans obtain jobs after their service to the
Nation.
This legislation is necessary to address disproportionate
unemployment rates for young veterans, the cost to the Government to
provide unemployment insurance, and skilled labor shortages in key
industries. For instance, the unemployment rate for veterans aged 22 to
26 is three times the national average. The Government has spent $87
million on unemployment benefits for recently discharged veterans and
lost an estimated $50 million in tax revenue. Further, a study
sponsored by the Federal Mediation and Conciliation concluded the
biggest problem facing the transportation industry is the shortage of
skilled labor.
[[Page S8848]]
The transportation industry will benefit from this legislation given
that many veterans have experience in transportation from their
military service.
Specifically, AFESA authorizes $10 million annually through fiscal
year 2011 for the National Guard to make grants to AFSF to help it
pursue agreements to hire veterans with businesses in industries
ranging from transportation to domestic security.
AFSF is modeled on a successful veterans employment transition
program, Helmets to Hardhats, which has helped more than 150,000
veterans find jobs in the construction industry and has referred 40,000
veterans into apprenticeship programs. Helmets to Hardhats evaluates
each veteran it works with to identify that veteran's experiences. It
then takes that information and targets various business within the
construction industry that has positions that require similar skills.
The agreements it enters into guarantee a long-term partnership that
benefit both parties. Helmets to Hardhats has also entered into an
agreement with the National Guard to assist with recruiting efforts. In
2005, it helped recruit 396 men and women into the National Guard,
which is estimated to have saved the military $3.7 million in
recruiting costs.
The success of Helmets to Hardhats has been noted in the media, by
the National Guard, the Department of Labor, 17 State Governors,
senators, congressmen, and others as an innovative organization that
has shown results and truly benefitted the veteran community and the
construction industry. AFSF will build upon the success of Helmets to
Hardhats by facilitating employment in multiple industries with
positions that are applicable to skills veterans acquired in the
military.
I can think of few causes more important that helping those who have
risked their lives defending our country find good jobs and realize the
American dream. Unfortunately, many veterans of the war in Iraq and
other theaters are finding it difficult to find a job when they return
from service. For instance, at 15.6 percent, the unemployment rate for
20- to 24-year-old veterans is nearly twice that of nonveterans. This
is an unacceptable fact that this legislation will help ameliorate.
Indeed, I am confident that the success of Helmets to Hardhats in the
construction industry will be replicated many times over by AFSF.
Mr. President, this legislation is based on the premise that no one
who has served our country in uniform should be left behind when they
return to civilian life. AFSF's mission is a worthwhile and important
cause that deserves the Government's support. I know that it will help
our veterans, and I hope my colleagues will support it.
______
By Mr. SESSIONS (for himself and Mrs. Feinstein).
S. 3834. A bill to amend the Controlled Substances Act to address
online pharmacies; to the Committee on the Judiciary.
Mr. SESSIONS. Mr. President, after working together with Senator
Feinstein, I am pleased to introduce the Online Pharmacy Consumer
Protection Act of 2006. I have worked to take the lead in protecting
consumers specifically as it relates to the sale and distribution of
controlled substances and prescription drugs over the Internet and
holding liable those who do so via unregistered online pharmacies. I
commend Senator Feinstein for her leadership on this issue and look
forward to working with her to pass this important piece of
legislation.
This bill would prohibit the distribution of controlled substances
and prescription drugs by means of the Internet without a valid
prescription and provides for the legitimate online distribution of
those drugs in certain circumstances. Two weeks ago, Attorney General
Gonzalez testified that sale and distribution of ``controlled
pharmaceuticals on the Internet is of great concern,'' since it ``gives
drug abusers the ability to circumvent the law, as well as sound
medical practice.'' This bill would go a long way in addressing the
concerns expressed by Attorney General Gonzalez by reigning in a
practice that has gone unregulated for far too long.
Recently, there has been an explosion in the number of online
pharmacies that provide prescription drugs--both controlled and
noncontrolled substances--to users without valid prescriptions. Most
illegal drug abuse involving prescription drugs is associated with
Internet purchases, where users are given a prescription without ever
seeing a doctor. The most prominent abuse occurs with regard to
controlled substances such as hydrocodone, Valium, Xanax, OxyContin,
and Vicodin. A 2002 study reported that nearly 15 million adults
admitted to abusing prescription drugs, with 2.4 million new abusers in
2001 alone. Currently, there is no way to police this illegal activity.
The ease with which consumers may purchase controlled substances and
other prescription drugs from online pharmacies without a prescription
is shocking. Often consumers can obtain a prescription from physicians
employed by the online pharmacy by simply filling out a brief
questionnaire on the pharmacy's Web site. Most online pharmacies have
no way to verify that the consumer ordering the prescription is
actually who they claim to be or that the medical condition the
consumer describes actually exists. Thus, drug addicts and minor
children can easily order controlled substances and prescription drugs
over the Internet simply by providing false identities or describing
nonexistent medical conditions.
In 2001, Ryan Haight, a California high school honors student and
athlete, died from an overdose of the painkiller hydrocodone that he
purchased from an online pharmacy. The doctor prescribing hydrocodone
had never met or personally examined Ryan. Ryan simply filled out the
pharmacy's online questionnaire and described himself as a 25-year-old
male suffering from chronic back pain. Ryan's death could have been
avoided.
I believe that Congress is in the best position to help prevent
teenagers from purchasing controlled substances and prescription drugs
from online rouge pharmacies. I also believe that Congress has the
ability to help prevent adult prescription drug abuse by making it
harder to purchase these drugs online without a valid prescription.
The Online Pharmacy Consumer Protection Act would provide criminal
penalties for those who knowingly or intentionally--unlawfully--
dispense controlled substances and prescription drugs over the
Internet; give State attorneys general a civil cause of action against
anyone who violates the act if they have reason to believe that the
violation affects the interests of their State's residents; and allow
the Federal Government to take possession of any tangible or intangible
property used illegally by online pharmacies.
The Online Pharmacy Consumer Protection Act would also require online
pharmacies to file an additional registration statement with the
Attorney General and meet additional registration requirements
promulgated by him/her; report to the Attorney General any controlled
substances or prescription drugs dispensed over the Internet, and
comply with licensing and disclosure requirements.
The Online Pharmacy Consumer Protection Act of 2006 takes a
substantial step toward plugging a loophole in our drug laws by
regulating the practice of distributing controlled substances and
prescription drugs via the Internet. By holding unregistered online
pharmacies accountable for their activity, we are ensuring that those
who seek to purchase prescription drugs by using the Internet are
protected from those engaged in reprehensible business practices.
Mr. President, once again I thank Senator Feinstein for her
leadership in addressing this serious issue. I commend this bill to my
colleagues for study, and I urge them to support this important
legislation.
Mrs. FEINSTEIN. Mr. President, I am pleased to join with Senator
Sessions to introduce the Online Pharmacy Consumer Protection Act. Our
legislation protects the safety of consumers who wish to purchase
prescription drugs over the Internet, while holding accountable those
who operate unregistered pharmacies.
Just a few weeks ago, Attorney General Alberto Gonzales appeared
before the Senate Judiciary Committee for a DOJ Oversight hearing. In
discussing the Department's priorities, he singled out how ``the
purchase of ... controlled pharmaceuticals on the Internet is of
[[Page S8849]]
great concern.'' He noted how the Internet's wide accessibility and
anonymity ``give drug abusers the ability to circumvent the law, as
well as sound medical practice, a[s] they dispense potentially
dangerous controlled pharmaceuticals.'' With ``no identifying...
information on these Web sites, it is very difficult for law
enforcement to track any of the individuals behind them.''
I believe this bill will address many of these problems that the
Attorney General has identified.
To understand how many of these Internet pharmacy Web sites exist,
just visit any Internet search engine. Type in the name of any
controlled substance or prescription drug. Several Web sites will
appear, offering to sell you these drugs without a prescription and
without a medical examination. Some of these Web sites simply ask
patients to send copies of medical records, with no verification of
their validity.
Patients use these pharmacies to obtain addictive drugs, like Vicodin
and Oxycontin. They can receive prescription medications like Viagra
without a doctor performing a physical exam to ensure that an
underlying health condition will not cause a dangerous side effect.
At the same time, receiving medications from a legitimate, licensed
Internet pharmacy is one of the new conveniences ushered in by the
Internet age. This bill preserves the ability of well-run pharmacies
and well-intentioned patients to access prescription drugs and
controlled substances by means of the Internet.
This legislation imposes basic, commonsense requirements on an
industry that presents both promise and peril.
First, this bill establishes disclosure standards for Internet
pharmacies.
Second, this bill prohibits an Internet pharmacy from dispensing or
selling a prescription drug or controlled substance without an in-
person examination by a physician.
Third, it allows a State attorney general to bring a civil action in
Federal district court to enjoin a pharmacy operating in violation of
the law and to enforce compliance with the provisions of this law.
The disclosure requirements contained in this bill will allow
patients to differentiate between shady offshore pharmacies, and
legitimate licensed ones. Under this legislation, pharmacies must
clearly disclose the name and address of the pharmacy, contact
information for the pharmacist-in-charge, and a list of States in which
the pharmacy is licensed to operate. They must also clearly post a
statement that they comply with the requirements in this legislation.
The bill states pharmacies can dispense to patients only if they have
a valid prescription from a practitioner who has performed an in-person
examination. This requirement will ensure that doctors can verify the
health status of a patient and ensure that the drug he or she will
receive from the pharmacy is medically appropriate.
This legislation recognizes that in the case of an emergency, a
patient may not always be able to see his or her typical physician. For
that reason, it allows a doctor to designate a covering practitioner to
write a valid prescription if he or she is not available.
Finally, this bill contains real penalties to hold accountable those
who continue to operate pharmacies in violation of these requirements.
First, for Internet sales of prescription drugs and controlled
substances, the bill makes clear that such activities are subject to
the current Federal laws against illegal distributions and the same
penalties applicable to hand-to-hand sales.
Second, the bill increases the penalties for illegal distributions of
controlled substances categorized by the DEA as schedule III, IV and V
substances, with new penalties if death or serious bodily injury
results and longer periods of supervised release available after
convictions.
The bill also allows a State's attorney general to file a Federal
motion to stop these pharmacies from operating illegally, no matter
where the entity is headquartered. Previously, this type of enforcement
would require a filing in every State.
I urge my colleagues to join me in supporting this legislation.
______
By Mr. CORNYN (for himself, Mr. Chambliss, Mr. Allen, Mr. Kyl,
Mr. Sessions, Mr. Graham, Mr. Inhofe, and Mr. Santorum):
S. 3835. A bill to provide adequate penalties for crimes committed
against United States judges and Federal law enforcement officers, to
provide appropriate security for judges and law enforcement officers,
and for other purposes; to the Committee on the Judiciary.
Mr. CORNYN. Mr. President, I rise today to speak in favor of the
Court and Law Enforcement Protection Act of 2006. This bill is designed
to address the critical issue of judicial and law enforcement security.
Police officers place their lives on the line every time they put on
their uniforms and report for duty. Likewise, the dedicated men and
women who work in America's courthouses--from the judges to the court
reporters--preside each day over difficult, contentious and at times
very emotional legal disputes. And these public servants, like our
police, are placed in hams way by the nature of their jobs. These
individuals fulfill essential roles that keep our democracy running
smoothly, and I have the greatest respect for them.
Unfortunately, violence directed at public servants is on the rise.
From escalating violence against police officers to courthouse
attacks--including in my home State of Texas--these despicable actions
threaten the administration of justice. This Congress has the power--
and now must exercise it--to ensure that certain and swift punishment
awaits those who engage in these unconscionable acts of violence.
The administration of justice--indeed, the health of American
democracy--depends on our ability to attract dedicated public servants,
including police officers and judges. And so we must do all that we can
to provide adequate security to these dedicated men and women who are
too often targeted for violence or harassment simply because of the
position they hold.
As a former State attorney general, I had the responsibility of
defending sentences on appeal of certain defendants who had been found
guilty of violence. So I am acutely aware of the devastating effects
criminal acts of violeave have on the victims and their families. And
because I also used to be a judge I am fortunate to have a number of
close, personal friends who serve in law enforcement and on the bench.
I personally know judges and their families who have been victims of
violence, and I have grieved with those families. I am outraged that
these cowardly and despicable acts continue to occur.
Police officers in this Nation are sworn to protect and to serve
their fellow citizens. They selflessly respond to dangerous situations
and often must diffuse highly emotional circumstances. And judges, for
their part, are impartial umpires of the law. We know that they cannot
help but disappoint people in their line of work because, in
litigation, there is normally a winning side and a losing one. But
judges, witnesses, courthouse personnel and law enforcement must not
face threats and violence for doing nothing more than simply carrying
out their duties.
The protection of the men and women who compose our judicial system
and serve the public in law enforcement are essential to the proper
administration of justice in our country. This bill takes steps toward
providing additional protections to these dedicated public servants.
First, it increases the punishments, including providing mandatory
minimums, against those who retaliate against judges, police officers,
or their family members, on account of the performance of their duties.
A high-ranking law enforcement official recently told me that detention
equals deterrence. What he meant was that those who know that they will
face significant incarceration think twice about committing criminal
acts. I agree with him, and we should carry out that idea in this
legislation.
Importantly, this bill curbs frivolous lawsuits against police
officers and streamlines the appellate process for those murderers who
receive the death penalty for murdering a judge or a police officer.
It is good policy to place reasonable limits on lawsuits involving
police officers by limiting claims to actual damages--unless the
defendant purposefully inflicted serious bodily injury on
[[Page S8850]]
the plaintiff, in which case the plaintiff may seek an additional
$250,000 in damages. And returning the attorney's fees provisions in
these cases to the traditional attorney's fees responsibility by
requiring each party to bear this burden is likewise good policy.
Placing time constraints on habeas corpus petitions, including the
time to file the petitions, the time to hold an evidentiary hearing on
the petition, and the time to rule on a petition when the murder of a
police officer is involved, is also good policy. This will eliminate
extensive and unnecessary delays for the families of victims that occur
when those who have victimized their loved ones find ways to delay the
imposition of justice.
Finally, this bill makes technical fixes to the law enforcement
concealed carry legislation passed in the 108th Congress. Some
technical barriers prevent retired officers from carrying a firearm to
defend themselves and their loved ones. These technical corrections
will facilitate the full implementation of that provision as Congress
originally intended.
Mr. President, the Court and Law Enforcement Protection Act of 2006
is an important piece of legislation. It targets those people who would
stand in the way of the proper, fair, and efficient administration of
justice. The men and women of law enforcement and the judiciary work
hard to carry out the duties entrusted to them by their State and the
Federal Constitution, and they deserve our support. This bill is a
significant step In providing them that much needed support. I look
forward to working with my colleagues on this issue and encourage their
support of this bill.
______
Mr. AKAKA (for himself, Mr. Inouye, Mr. Byrd, Mr. Stevens, Mr.
Jeffords, Ms. Murkowski, Mr. Kerry, Mr. Cochran, Mr. Lieberman, Mr.
Dodd, Mr. Rockefeller, Mr. Kennedy, Mr. Lott, Mr. Biden, Mrs. Clinton,
Mr. Reid, Mr. Dorgan, Mr. Reed, Mrs. Feinstein, Mr. Conrad, Mrs. Dole,
Mr. Domenici, and Mr. Roberts):
S. 3837. A bill to authorize the establishment of the Henry Kuualoha
Giugni Kupuna Memorial Archives at the University of Hawaii; to the
Committee on Health, Education, Labor, and Pensions.
Mr. AKAKA. Mr. President, I rise with my dear friend, the Senior
Senator from Hawaii, Dan Inouye, and several of our colleagues from
both sides of the aisle, to introduce a bill to pay tribute to one of
this body's most loyal servants. The Henry Kuualoha Giugni Kupuna
Memorial Archives bill honors Henry K. Giugni, our former Sergeant-at-
Arms of the U.S. Senate, through the establishment of a Native Hawaiian
cultural and historical digital archives. These archives will enable
the sharing and perpetuation of the unique culture, collective memory,
and history of the people Henry K. Giugni so dearly loved.
As many of my colleagues are aware, Henry K. Giugni was a man full of
life and loyalty who served our country with distinction. He enlisted
in the U.S. Army at the age of 16 after the attack on Pearl Harbor.
During World War II he served in combat at the battle of Guadalcanal.
Following World War II, he continued to serve the State of Hawaii and
our nation by working as a police officer and firefighter. After nearly
a decade of service with Senator Inouye in the Hawaii territorial
legislature, he came to Washington, DC, as the senior senator's Senior
Executive Assistant and then Chief of Staff for more than 20 years. Mr.
Giugni was appointed Sergeant-at-Arms of the United States Senate in
1987.
Henry K. Giugni also sought to tear down barriers in society. In 1965
it was Mr. Giugni who represented Senator Inouye's office, thus the
people of Hawaii, in the famous 1965 Selma to Montgomery civil rights
march led by Dr. Martin Luther King, Jr. As Senator Inouye's Chief of
Staff, Mr. Giugni served as a vital link between the Senator's office
and minority groups. In 1987 he was the first person of color and the
first Native Hawaiian to be appointed Sergeant-at-Arms of the United
States Senate. In this influential position, he sought out capable
minorities and women for promotion to ensure that our workforce
reflects America. He appointed the first minority, an African American,
to lead the Service Department, and was the first to assign women to
the Capitol Police plainclothes unit. Being particularly concerned
about people with disabilities, Henry K. Giugni enacted a major
expansion of the Special Services Office, which now conducts tours of
the U.S. Capitol for the blind, deaf, and wheelchair-bound, and
publishes Senate maps and documents in Braille.
In his capacity as Sergeant-at-Arms, Mr. Giugni was the chief law
enforcement officer of the U.S. Senate and an able manager of a
majority of the Senate's support services. He oversaw a budget of
nearly $120 million and approximately 2,000 employees. As Sergeant-at-
Arms, Mr. Giugni had the opportunity to preside over the inauguration
of President George H.W. Bush as well as escort numerous dignitaries,
including Nelson Mandela, Margaret Thatcher, and Vaclav Havel when they
visited the U.S. Capitol.
Establishing the Henry Kuualoha Giugni Memorial Archives would be a
poignant and appropriate way to honor our loyal friend, colleague, and
fellow American. Please allow me to explain. In Henry's passing there
is a fitting analogy that can be made for the need of establishing
these archives. Henry lived a life full of rich experiences and along
the way he accumulated a wealth of wisdom. His memory and spirit live
on but it is essential to perpetuate his wisdom and experiences so that
what he learned and accomplished will not be lost to future
generations. This is the primary impetus behind creating these
archives. For various reasons there is a dearth of physical archives,
museums, or libraries that are devoted to preserving and perpetuating
the history, culture, achievements and collective narratives of
indigenous peoples, including Native Hawaiians. As one generation
passes, a wealth of traditional knowledge may be lost forever.
Establishing these archives to perpetuate the traditional knowledge of
indigenous peoples such as Henry will ensure that future generations of
people have access to that knowledge and, in some sense, are able to
learn from the original sources themselves.
The development of the Internet in managing knowledge in electronic
format has enabled the most pervasive storing and sharing of
information the world has ever seen. An electronic, digital archives
would facilitate the sharing, preservation and perpetuation of the
unique Native Hawaiian culture, language, tradition and history. These
archives will be a source of enduring knowledge, accessible to all, and
will contribute to the cultural, social and economic advancement of
Native Hawaiians and the State of Hawaii. It will help to ensure that
the children of today and tomorrow will not be deprived of the rich
culture, history and collective knowledge of Native Hawaiians. These
archives will help to guarantee that the experiences, wisdom and
knowledge of kupuna, or grandfathers and grandmothers such as Henry K.
Giugni, will not be lost to future generations.
The first section of the Henry Kuualoha Giugni Memorial Archives bill
authorizes a grant awarded to the University of Hawaii's Academy for
Creative Media for the establishment, maintenance and update of the
archives which are to be located at the University of Hawaii. These
funds shall be used to enable a statewide archival effort which will
include the acquisition of a secure, web-accessible repository that
will house significant Native Hawaiian historical and cultural
information. This information may include oral histories, collective
narratives, photographs, video files, journals, creative works and even
documentation of practices and customs such as hula and music. The
funds will enable this important effort by assisting in the purchasing
of equipment, hiring of personnel, creating space for the collection
and transfer of media, housing the archives, and creating this in-depth
database.
The second section of this bill authorizes the use of these grant
funds for several different educational activities, many of which are
intended to magnify the effect and resourcefulness of these archives
and benefit the student populations who will likely access the archives
the most. This includes the development of educational materials from
the content of the archives that can be used in educating indigenous
students such as Native Hawaiians, Alaska Natives, and Native American
Indians. These materials are
[[Page S8851]]
meant to enhance the education of all students, even students from non-
native backgrounds. This also includes developing outreach initiatives
to introduce the archives to elementary and secondary schools as well
as enabling schools to access the archives through obtaining computer
equipment.
Grant funds can also be used to enable access to a college education
to students who otherwise cannot independently afford such an education
through scholarship awards. Additionally, funds can be used to address
the problem of cultural incongruence in teaching, an issue that impedes
effective learning in our Nation's classrooms. Such a lack of
congruence exists in a wide range of situations, from rural and
underserved communities in remote areas to well-populated urban
centers, from my state of Hawaii to areas on the Eastern seaboard. The
dynamic I am describing exists along lines of race and ethnicity,
socioeconomic strata, age, and many other vectors, which can muddy the
effective transmission of knowledge. Many of us, especially those from
rural, indigenous, or ethnic minority backgrounds including Henry
Giugni, have experienced this problem as we have worked our way through
the education system. This bill also seeks to improve student
achievement by addressing cultural incongruence between teachers and
the student population by providing professional development training
to teachers to enable them to teach in a culturally congruent way.
Finally, as financial illiteracy is a growing problem especially
among college age youth who are exposed to a variety of financial
products, funds can be used to increase the economic and financial
literacy of college students through the propagation of proven best
practices that have resulted in positive behavioral change in regards
to improved debt and credit management and economic decision making.
Such activities can help to ensure that students stay in school,
graduate in a better financial position, and remain disciplined in
effectively managing their finances throughout their working and
retirement years.
Henry K. Giugni served amongst us with distinction and honor. I am
very grateful to have known him. I encourage all of my colleagues to
perpetuate his memory by supporting the Henry Kuualoha Giugni Memorial
Archives bill. These archives are the most fitting way we can honor and
remember our friend and dear public servant, Henry Kuualoha Giugni.
I ask unanimous consent that the text of the bill be printed in the
Record.
Mr. INOUYE. Mr. President, I rise in support of the Henry Kuualoha
Giugni Kupuna Memorial Archives Bill.
Henry Giugni was my dear friend. He was an important part of my life
for nearly half a century. He tirelessly and proudly served the people
of Hawaii as my chief of staff. After leaving my office, he eagerly and
enthusiastically dedicated himself to serving the Senate and the
citizens of the United States as the Senate's 30th Sergeant-at-Arms.
In the days following his passing on November 3, 2005, I was deeply
touched by the hundreds of people who reached out to me, and shared,
through conversations and letters, their memories of Henry. The stories
were poignant. They were filled with love and affection for a bear of a
man who--while he could be gruff and outrageous at times--could never
camouflage his gentle soul and his willingness to help others,
especially those who were less fortunate or who were just beginning
their careers. The shared memories of Henry revealed that he enriched
lives, served as an inspiration, and gave hope.
Similarly, this bill, which bears Henry's name, will not only honor
him, but more importantly will serve the people of Hawaii, especially
the descendants of the islands' first settlers. It will also help
Hawaii's unique native traditions and culture to flourish. By
establishing a digital memorial archive at the University of Hawaii's
Academy for Creative Media, this bill will enrich the lives of the
people of Hawaii and those who live beyond Hawaii's shores. The digital
archive will be a 21st-century way of inspiring and giving hope by
preserving the invaluable lessons and insights from the collective
memory and history of Native Hawaiians.
During the years that Henry was a young boy attending school, the
history of Native Hawaiians and Hawaii was rarely--if ever--taught in
Hawaii. It was only relatively recently that Hawaiian history became an
essential part of the curriculum of Hawaii's schools. Henry was proud
that he was part-Hawaiian, and he was proud that someone like him, from
humble beginnings, could find success in Washington, in an environment
vastly different from his roots in Hawaii. While he became an
acquaintance of presidents and kings, his heart was always with the
native people of Hawaii, who are still struggling for their moment in
the sun.
In addition to creating a digital archive and preserving the
traditions and culture of Native Hawaiians, this legislation will
support initiatives to develop Web-based media projects from the
archive to create educational materials that can be used to enhance the
education of indigenous students. It also can serve to inspire higher
educational achievement by indigenous students by sharing with them the
stories and histories of accomplished individuals with indigenous
backgrounds, such as Henry.
So although Henry is no longer with us, his mentoring and sharing
spirit will live on through the digital archive created by this bill.
Through the archive, Henry will always be the embodiment of the
kupuna--the respected elder who has much wisdom and insight to share.
My colleagues, please join me in supporting the Henry Kuualoha Giugni
Kupuna Memorial Archives Bill.
______
By Mr. HATCH (for himself and Mrs. Lincoln):
S. 3838. A bill to amend the Internal Revenue Code of 1986 to provide
for S corporation reform, and for other purposes; to the Committee on
Finance.
Mr. HATCH. Mr. President, on behalf of myself and my friend and
colleague, Senator Lincoln, I rise today to introduce the S Corporation
Reform Act of 2006.
The bill we are introducing today is a continuation of a bipartisan
effort that began in the Senate over a decade ago when former Senators
Pryor and Danforth, me and six other Senators, introduced the S
Corporation Reform Act of 1993. We recognized then, as we do today,
that S corporations are a vital and growing part of our economy and
that our tax law should reflect the importance of these entities and
provide tax rules that allow S corporations to grow and compete with a
minimum of complexity and a maximum of flexibility.
According to the latest figures available from the Small Business
Administration, there were approximately 3.1 million S corporations in
the United States in 2002 with a total of $3.9 trillion in revenue.
There were about a half million S corporations in 1980, so the growth
of these entities has been striking. Surprisingly, the growth of S
corporations has continued even after the advent of the Limited
Liability Company, LLC, which offers many of the same benefits, but
more flexibility, as S corporations. In fact, S corporations now
outnumber both C corporations and partnerships. These are predominantly
small businesses in the retail and service sectors. In my home State of
Utah, over half the corporations have elected subchapter S treatment.
Subchapter S of the Internal Revenue Code was enacted in 1958 to help
remove tax considerations from small business owners' decisions to
incorporate. This elective tax treatment has been helpful to millions
of small businesses over the years, particularly to those just starting
out. Subchapter S provides entrepreneurs the advantage of corporate
protection from liability along with the single level of tax enjoyed by
partnerships and limited liability companies.
However, Subchapter S in its current state contains a variety of
limitations, restrictions, and pitfalls for the unwary. Even though
some very important improvements have been made over the years,
including many first introduced in the 1993 S Corporation Reform Act I
mentioned earlier, more needs to be done to bring the tax treatment of
these important businesses into the 21st century. The two biggest
constraints that small businesses face are difficulties in getting
access to capital and the tax burden. The bill we are
[[Page S8852]]
introducing today addresses both of these vital issues.
Small businesses create two-thirds of all new jobs in the economy and
account for roughly half of the overall employment in the country.
Throughout the 1990s small businesses accounted for sixty to eighty
percent of all new jobs. They are especially important in industries
where technological innovation is important. According to the
Congressional Research Service, small firms account for nearly forty
percent of all scientists, engineers, and computer specialists working
in the private sector.
During the most recent downturn of 2001-2002, when the state of Utah
lost jobs, small businesses actually created jobs and helped soften the
blow for many Utahns. Today, as our economy is booming, small
businesses continue to generate the bulk of new jobs.
In rural America, the role of small enterprises is even more
important. Small businesses account for 90 percent of all rural
establishments. In 1998, small companies employed 60 percent of rural
workers and provided half of rural payrolls.
Perhaps the biggest challenge facing many American businesses, but
especially smaller ones, is attracting adequate capital. Unfortunately,
subchapter S is currently a hindrance, rather than a help, for many
corporations facing this challenge. For example, current law allows for
only one class of stock for S corporations. Further, S corporations are
not currently allowed to issue convertible debt, nor are they allowed
to have a nonresident alien as a shareholder.
Several of the provisions of the S Corporation Reform Act of 2006 are
designed to alleviate these restrictions on S corporations and help
them attract capital. With these changes, S corporations will be more
competitive with other small enterprises doing business as partnerships
or limited liability companies that do not face such barriers.
Even though electing subchapter S currently offers significant tax
relief to a small corporation by eliminating the corporate level of
taxation, S corporations still face some significant tax burdens and a
myriad of potential pitfalls and tax traps for the unwary. Some of
these impediments exist in the requirements of elective S corporation
status, and others are in the rules governing the day-to-day operations
of the entities. In either case, these provisions can stifle growth and
impede job creation.
Most of the provisions in our bill aim to eliminate these barriers
and make it easier for companies to elect subchapter S and to operate
in this status once the election is made.
The Small Business Job Protection Act of 1996 made many important
changes to subchapter S. One of the most significant was to allow, for
the first time, small banks to elect to be S corporations. This opened
the door for many small community banks to become more competitive with
other financial institutions operating in towns and neighborhoods
throughout the country. The availability of Subchapter S has been a
positive development in increasing the profitability and
competitiveness of many community banks. Some 2,300 banks have chosen
to be S corporations, representing 25 percent of all banks. However,
some of the operating rules under subchapter S remain unduly
inflexible, complex, and harsh on banks.
The bill we introduce today attempts to address many of these
challenges by clarifying and relaxing some of the operational rules
that apply to S corporations. These changes are designed to make it
significantly easier for community banks to take advantage of the
benefits of subchapter S. In my opinion, businesses should be allowed
to focus on meeting their customers' needs and maximizing their
shareholders' profits, and not preoccupied with conforming to Byzantine
government rules.
While the corporate structure of an S corporation would not generally
make sense for larger companies, the tax structure applied to S
corporations is quite sensible and can serve as a model for other
companies. Economists hail the single level of taxation of profits in
the S corporation law as a much more efficient approach, and something
that would be desirable for all enterprises.
The S Corporation Reform Act of 2006 enjoys the support of a broad
range of associations and trade groups, many of which have worked with
us in crafting the bill.
I urge my colleagues to take a close look at this bill, and to
support it. Thousands of small and growing businesses in every state
will benefit from the improvements included in the bill. Its enactment
will lead to an increased ability of these enterprises to attract
capital and create new jobs.
I ask unanimous consent that the text of the bill and section-by-
section explanation of the bill be printed in the Record.
S. 3838
There being no objection, the text was ordered to be printed in the
Record, as follows:
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; REFERENCE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``S
Corporation Reform Act of 2006''.
(b) Amendment of 1986 Code.--Except as otherwise expressly
provided, whenever in this Act an amendment or repeal is
expressed in terms of an amendment to, or repeal of, a
section or other provision, the reference shall be considered
to be made to a section or other provision of the Internal
Revenue Code of 1986.
(c) Table of Contents.--The table of contents for this Act
is as follows:
Sec. 1. Short title; reference; table of contents.
TITLE I--ELIGIBLE SHAREHOLDERS OF AN S CORPORATION
Sec. 101. Nonresident aliens allowed to be shareholders.
Sec. 102. Expansion of S corporation eligible shareholders to include
IRAS.
TITLE II--QUALIFICATION AND ELIGIBILITY REQUIREMENTS OF S CORPORATIONS
Sec. 201. Issuance of preferred stock permitted.
Sec. 202. Safe harbor expanded to include convertible debt.
Sec. 203. Repeal of excessive passive investment income as a
termination event.
Sec. 204. Modifications to passive income rules.
Sec. 205. Adjustment to basis of s corporation stock for certain
charitable contributions.
TITLE III--TREATMENT OF S CORPORATION SHAREHOLDERS
Sec. 301. Treatment of losses to shareholders.
Sec. 302. Deductibility of interest expense incurred by an electing
small business trust to acquire S corporation stock.
Sec. 303. Back to back loans as indebtedness.
TITLE IV--EXPANSION OF S CORPORATION ELIGIBILITY FOR BANKS
Sec. 401. Treatment of qualifying director shares.
Sec. 402. Recapture of bad debt reserves.
TITLE V--QUALIFIED SUBCHAPTER S SUBSIDIARIES
Sec. 501. Treatment of the sale of interest in a qualified subchapter S
subsidiary.
TITLE VI--ADDITIONAL PROVISIONS
Sec. 601. Elimination of all earnings and profits attributable to pre-
1983 years.
Sec. 602. Repeal of LIFO recapture tax.
Sec. 603. Expansion of post-termination transition period.
Sec. 604. Reduction in tax rate on excess net passive income.
Sec. 605. Increase in cap on qualified small issue bonds.
Sec. 606. Special rules of application.
TITLE I--ELIGIBLE SHAREHOLDERS OF AN S CORPORATION
SEC. 101. NONRESIDENT ALIENS ALLOWED TO BE SHAREHOLDERS.
(a) Nonresident Aliens Allowed to Be Shareholders.--
(1) In general.--Paragraph (1) of section 1361(b) (defining
small business corporation) is amended--
(A) by adding ``and'' at the end of subparagraph (B),
(B) by striking subparagraph (C), and
(C) by redesignating subparagraph (D) as subparagraph (C).
(2) Conforming amendments.--
(A) Paragraph (4) and (5)(A) of section 1361(c) (relating
to special rules for applying subsection (b)) are each
amended by striking ``subsection (b)(1)(D)'' and inserting
``subsection (b)(1)(C)''.
(B) Clause (i) of section 280G(b)(5)(A) (relating to
general rule for exemption for small business corporations,
etc.) is amended by striking ``but without regard to
paragraph (1)(C) thereof''.
(b) Nonresident Alien Shareholder Treated as Engaged in
Trade or Business Within United States.--
(1) In general.--Section 875 is amended--
(A) by striking ``and'' at the end of paragraph (1),
(B) by striking the period at the end of paragraph (2) and
inserting ``, and'', and
[[Page S8853]]
(C) by adding at the end the following new paragraph:
``(3) a nonresident alien individual shall be considered as
being engaged in a trade or business within the United States
if the S corporation of which such individual is a
shareholder is so engaged.''.
(2) Pro rata share of s corporation income.--The last
sentence of section 1441(b) (relating to income items) is
amended to read as follows: ``In the case of a nonresident
alien individual who is a member of a domestic partnership or
a shareholder of an S corporation, the items of income
referred to in subsection (a) shall be treated as referring
to items specified in this subsection included in his
distributive share of the income of such partnership or in
his pro rata share of the income of such S corporation.''.
(3) Application of withholding tax on nonresident alien
shareholders.--Section 1446 (relating to withholding tax on
foreign partners' share of effectively connected income) is
amended by redesignating subsection (f) as subsection (g) and
by inserting after subsection (e) the following new
subsection:
``(f) S Corporation Treated as Partnership, etc.--For
purposes of this section--
``(1) an S corporation shall be treated as a partnership,
``(2) the shareholders of such corporation shall be treated
as partners of such partnership,
``(3) any reference to section 704 shall be treated as a
reference to section 1366, and
``(4) no withholding tax under subsection (a) shall be
required in the case of any income realized by such
corporation and allocable to a shareholder which is an
electing small business trust (as defined in section
1361(e)).''.
(4) Conforming amendments.--
(A) The heading of section 875 is amended to read as
follows:
``SEC. 875. PARTNERSHIPS; BENEFICIARIES OF ESTATES AND
TRUSTS; S CORPORATIONS.''.
(B) The heading of section 1446 is amended to read as
follows:
``SEC. 1446. WITHHOLDING TAX ON FOREIGN PARTNERS' AND S
CORPORATION SHAREHOLDERS' SHARE OF EFFECTIVELY
CONNECTED INCOME.''.
(5) Clerical amendments.--
(A) The item relating to section 875 in the table of
sections for subpart A of part II of subchapter N of chapter
1 is amended to read as follows:
``Sec. 875. Partnerships; beneficiaries of estates and trusts; S
corporations.''.
(B) The item relating to section 1446 in the table of
sections for subchapter A of chapter 3 is amended to read as
follows:
``Sec. 1446 Withholding tax on foreign partners' and S corporation
shareholders' share of effectively connected income.''.
(C) Permanent establishment of partners and s corporation
shareholders.--Section 894 (relating to income affected by
treaty) is amended by redesignating subsection (c) as
subsection (d) and by inserting after subsection (b) the
following new subsection:
``(c) Permanent Establishment of Partners and S Corporation
Shareholders.--If a partnership or S corporation has a
permanent establishment in the United States (within the
meaning of a treaty to which the United States is a party) at
any time during a taxable year of such entity, a nonresident
alien individual or foreign corporation which is a partner in
such partnership, or a nonresident alien individual who is a
shareholder in such S corporation, shall be treated as having
a permanent establishment in the United States for purposes
of such treaty.''.
(c) Application of Other Withholding Tax Rules on
Nonresident Alien Shareholders.--
(1) Section 1441.--Section 1441 (relating to withholding of
tax on nonresident aliens) is amended by redesignating
subsection (g) as subsection (h) and by inserting after
subsection (f) the following new subsection:
``(g) S Corporation Treated as Partnership, etc.--For
purposes of this section--
``(1) an S corporation shall be treated as a partnership,
``(2) the shareholders of such corporation shall be treated
as partners of such partnership, and
``(3) no deduction or withholding under subsection (a)
shall be required in the case of any item of income realized
by such corporation and allocable to a shareholder which is
an electing small business trust (as defined in section
1361(e)).''.
(2) Section 1445.--Section 1445(e) (relating to special
rules relating to distributions, etc., by corporations,
partnerships, trusts, or estates) is amended by redesignating
paragraph (6) as paragraph (7) and by inserting after
paragraph (5) the following new paragraph:
``(6) S corporation treated as partnership, etc.--For
purposes of this section--
``(A) an S corporation shall be treated as a partnership,
and
``(B) the shareholders of such corporation shall be treated
as partners of such partnership, and
``(C) no deduction or withholding under subsection (a)
shall be required in the case of any gain realized by such
corporation and allocable to a shareholder which is an
electing small business trust (as defined in section
1361(e)).''.
(d) Additional Conforming Amendments.--
(1) Section 1361(c)(2)(A)(i) is amended by striking ``who
is a citizen or resident of the United States''.
(2) Section 1361(d)(3)(B) is amended by striking ``who is a
citizen or resident of the United States''.
(3) Section 1361(e)(2) is amended by inserting ``(including
a nonresident alien)'' after ``person'' the first place it
appears.
(e) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2006.
SEC. 102. EXPANSION OF S CORPORATION ELIGIBLE SHAREHOLDERS TO
INCLUDE IRAS.
(a) In General.--Clause (vi) of section 1361(c)(2)(A)
(relating to certain trusts permitted as shareholders) is
amended to read as follows:
``(vi) A trust which constitutes an individual retirement
account under section 408(a), including one designated as a
Roth IRA under section 408A.''.
(b) Sale of Stock in IRA Relating to S Corporation Election
Exempt From Prohibited Transaction Rules.--Paragraph (16) of
section 4975(d) (relating to exemptions) is amended to read
as follows:
``(16) a sale of stock held by a trust which constitutes an
individual retirement account under section 408(a) to the
individual for whose benefit such account is established if
``(A) such sale is pursuant to an election under section
1362(a) by the issuer of such stock,
``(B) such sale is for fair market value at the time of
sale (as established by an independent appraiser) and the
terms of the sale are otherwise at least as favorable to such
trust as the terms that would apply on a sale to an unrelated
party,
``(C) such trust does not pay any commissions, costs, or
other expenses in connection with the sale, and
``(D) the stock is sold in a single transaction for cash
not later than 120 days after the S corporation election is
made.''.
(c) Effective Date.--The amendments made by this section
shall take effect on the date of the enactment of this Act.
TITLE II--QUALIFICATION AND ELIGIBILITY REQUIREMENTS OF S CORPORATIONS
SEC. 201. ISSUANCE OF PREFERRED STOCK PERMITTED.
(a) In General.--Section 1361 (defining S corporation) is
amended by adding at the end the following new subsection:
``(f) Treatment of Qualified Preferred Stock.--
``(1) In general.--For purposes of this subchapter--
``(A) qualified preferred stock shall not be treated as a
second class of stock, and
``(B) no person shall be treated as a shareholder of the
corporation by reason of holding qualified preferred stock.
``(2) Qualified preferred stock defined.--For purposes of
this subsection, the term `qualified preferred stock' means
stock which meets the requirements of subparagraphs (A), (B),
and (C) of section 1504(a)(4). Stock shall not fail to be
treated as qualified preferred stock merely because it is
convertible into other stock.
``(3) Distributions.--A distribution (not in part or full
payment in exchange for stock) made by the corporation with
respect to qualified preferred stock shall be includible as
ordinary income of the holder and deductible to the
corporation as an expense in computing taxable income under
section 1363(b) in the year such distribution is received.''.
(b) Conforming Amendments.--
(1) Paragraph (1) of section 1361(b) is amended by
inserting ``, except as provided in subsection (f),'' before
``which does not''.
(2) Subsection (a) of section 1366 is amended by adding at
the end the following new paragraph:
``(3) Allocation with respect to qualified preferred
stock.--The holders of qualified preferred stock (as defined
in section 1361(f)) shall not, with respect to such stock, be
allocated any of the items described in paragraph (1).''.
(3) So much of clause (ii) of section 354(a)(2)(C) as
precedes subclause (II) is amended to read as follows:
``(ii) Recapitalization of family-owned corporations and s
corporations.--
``(I) In general.--Clause (i) shall not apply in the case
of a recapitalization under section 368(a)(I)(E) of a family-
owned corporation or S corporation.''.
(4) Subsection (a) of section 1373 is amended by striking
``and'' at the end of paragraph (1), by striking the period
at the end of paragraph (2) and inserting ``, and'', and by
adding at the end the following new paragraph:
``(3) no amount of an expense deductible under this
subchapter by reason of section 1361(f)(3) shall be
apportioned or allocated to such income.''.
(c) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2006.
SEC. 202. SAFE HARBOR EXPANDED TO INCLUDE CONVERTIBLE DEBT.
(a) In General.--Subparagraph (B) of section 1361(c)(5)
(defining straight debt) is amended by striking clauses (ii)
and (iii) and inserting the following new clauses:
``(ii) in any case in which the terms of such promise
include a provision under which the obligation to pay may be
converted (directly or indirectly) into stock of the
corporation, such terms, taken as a whole, are substantially
the same as the terms which could have been obtained on the
effective date of the promise from a person which is not a
related person (within the meaning of section
[[Page S8854]]
465(b)(3)(C)) to the S corporation or its shareholders, and
``(iii) the creditor is--
``(I) an individual,
``(II) an estate,
``(III) a trust described in paragraph (2),
``(IV) an exempt organization described in paragraph (6),
or
``(V) a person which is actively and regularly engaged in
the business of lending money.''.
(b) Effective Date.--The amendment made by this section
shall apply to taxable years beginning after December 31,
2006.
SEC. 203. REPEAL OF EXCESSIVE PASSIVE INVESTMENT INCOME AS A
TERMINATION EVENT.
(a) In General.--Section 1362(d) (relating to termination)
is amended by striking paragraph (3).
(b) Conforming Amendments.--
(1) Section 1362(f)(1) is amended by striking ``or (3)''.
(2) Clause (i) of section 1042(c)(4)(A) is amended by
striking ``section 1362(d)(3)(C)'' and inserting ``section
1375(b)(3)''.
(c) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2006.
SEC. 204. MODIFICATIONS TO PASSIVE INCOME RULES.
(a) Increased Limit.--
(1) In general.--Subsection (a)(2) of section 1375
(relating to tax imposed when passive investment income of
corporation having accumulated earnings and profits exceeds
25 percent of gross receipts) is amended by striking ``25
percent'' and inserting ``60 percent''.
(2) Conforming amendments.--
(A) Subparagraph (J) of section 26(b)(2) is amended by
striking ``25 percent'' and inserting ``60 percent''.
(B) Clause (i) of section 1375(b)(1)(A) is amended by
striking ``25 percent'' and inserting ``60 percent''.
(C) The heading for section 1375 is amended by striking
``25 PERCENT'' and inserting ``60 PERCENT''.
(D) The table of sections for part III of subchapter S of
chapter 1 is amended by striking ``25 percent'' in the item
relating to section 1375 and inserting ``60 percent''.
(b) Repeal of Passive Income Capital Gain Category.--
(1) In general.--Subsection (b) of section 1375 (relating
to tax imposed when passive investment income of corporation
having accumulated earnings and profits exceeds 60 percent of
gross receipts), as amended by subsection (a), is amended by
striking paragraphs (3) and (4) and inserting the following
new paragraph:
``(3) Passive investment income defined.--
``(A) In general.--Except as otherwise provided in this
paragraph, the term `passive investment income' means gross
receipts derived from royalties, rents, dividends, interest,
and annuities.
``(B) Exception for interest on notes from sales of
inventory.--The term `passive investment income' shall not
include interest on any obligation acquired in the ordinary
course of the corporation's trade or business from its sale
of property described in section 1221(a)(1).
``(C) Treatment of certain lending or finance companies.--
If the S corporation meets the requirements of section
542(c)(6) for the taxable year, the term `passive investment
income' shall not include gross receipts for the taxable year
which are derived directly from the active and regular
conduct of a lending or finance business (as defined in
section 542(d)(1)).
``(D) Treatment of certain dividends.--If an S corporation
holds stock in a C corporation meeting the requirements of
section 1504(a)(2), the term `passive investment income'
shall not include dividends from such C corporation to the
extent such dividends are attributable to the earnings and
profits of such C corporation derived from the active conduct
of a trade or business.
``(E) Coordination with section 1374.--The amount of
passive investment income shall be determined by not taking
into account any recognized built-in gain or loss of the S
corporation for any taxable year in the recognition period.
Terms used in the preceding sentence shall have the same
respective meaning as when used in section 1374.''.
(2) Conforming amendments.--Section 1375(d) is amended by
striking ``subchapter C'' both places it appears and
inserting ``accumulated''.
(c) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2006.
SEC. 205. ADJUSTMENT TO BASIS OF S CORPORATION STOCK FOR
CERTAIN CHARITABLE CONTRIBUTIONS.
(a) In General.--Paragraph (1) of section 1367(a) (relating
to adjustments to basis of stock of shareholders, etc.) is
amended by striking ``and'' at the end of subparagraph (B),
by striking the period at the end of subparagraph (C) and
inserting ``, and'', and by adding at the end the following
new subparagraph:
``(D) the excess of the amount of the shareholder's
proportionate share of any charitable contribution made by
the S corporation over the shareholder's proportionate share
of the adjusted basis of the property contributed.''.
(b) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2006.
TITLE III--TREATMENT OF S CORPORATION SHAREHOLDERS
SEC. 301. TREATMENT OF LOSSES TO SHAREHOLDERS.
(a) Liquidations.--Section 331 (relating to gain or loss to
shareholders in corporate liquidations) is amended by
redesignating subsection (c) as subsection (d) and by
inserting after subsection (b) the following new subsection:
``(c) Loss on Liquidations of S Corporation.--
``(1) In general.--The portion of any net loss recognized
by a shareholder of an S corporation (as defined in section
1361(a)(1))--
``(A) on amounts received by such shareholder in a
distribution in complete liquidation of such S corporation,
or
``(B) on an installment obligation received by such
shareholder with respect to a sale or exchange by the
corporation during the 12-month period beginning on the date
a plan of complete liquidation is adopted if the liquidation
is completed during such 12-month period, which does not
exceed the ordinary income basis of stock of such S
corporation in the hands of such shareholder shall not be
treated as a loss from the sale or exchange of a capital
asset but shall be treated as an ordinary loss.
``(2) Ordinary income basis.--For purposes of this
subsection, the ordinary income basis of stock of an S
corporation in the hands of a shareholder of such S
corporation shall be an amount equal to the portion of such
shareholder's basis in such stock which is equal to the
aggregate increases in such basis under section 1367(a)(1)
resulting from such shareholder's pro rata share of ordinary
income of such S corporation attributable to the complete
liquidation.''.
(b) Suspended Passive Activity Losses.--Paragraph (3) of
section 1371(b) is amended to read as follows:
``(3) Treatment of s year as elapsed year; passive
losses.--Nothing in paragraphs (1) and (2) shall prevent
treating a taxable year for which a corporation is an S
corporation as a taxable year for purposes of determining the
number of taxable years to which an item may be carried back
or carried forward nor prevent the allowance of a passive
activity loss deduction to the extent provided by section
469(g).''.
(c) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2006.
SEC. 302. DEDUCTIBILITY OF INTEREST EXPENSE INCURRED BY AN
ELECTING SMALL BUSINESS TRUST TO ACQUIRE S
CORPORATION STOCK.
(a) In General.--Subparagraph (C) of section 641(c)(2)
(relating to modifications) is amended by inserting after
clause (iii) the following new clause:
``(iv) Any interest expense incurred to acquire stock in an
S corporation.''.
(b) Effective Date.--The amendment made by this section
shall apply to taxable years beginning after December 31,
2006.
SEC. 303. BACK TO BACK LOANS AS INDEBTEDNESS.
(a) In General.--Section 1366(d) (relating to special rules
for losses and deductions) is amended by adding at the end
the following new paragraph:
``(4) Loans included in indebtedness of an s corporation.--
For purposes of subsection (d), the indebtedness of an S
corporation to the shareholder shall include any loans made
or acquired (by purchase, gift, or distribution from another
person) by a shareholder to the S corporation, regardless of
whether the funds loaned by the shareholder to the S
corporation were obtained by the shareholder by means of a
recourse loan from another person (whether related or
unrelated to the shareholder).''.
(b) Effective Date.--The amendment made by this section
shall apply to taxable years beginning after December 31,
2006.
TITLE IV--EXPANSION OF S CORPORATION ELIGIBILITY FOR BANKS
SEC. 401. TREATMENT OF QUALIFYING DIRECTOR SHARES.
(a) In General.--Section 1361 (defining S corporation), as
amended by section 201(a), is amended by adding at the end
the following new subsection:
``(g) Treatment of Qualifying Director Shares.--
``(1) In general.--For purposes of this subchapter--
``(A) qualifying director shares shall not be treated as a
second class of stock, and
``(B) no person shall be treated as a shareholder of the
corporation by reason of holding qualifying director shares.
``(2) Qualifying director shares defined.--For purposes of
this subsection, the term `qualifying director shares' means
any shares of stock in a bank (as defined in section 581) or
in a bank holding company registered as such with the Federal
Reserve System--
``(A) which are held by an individual solely by reason of
status as a director of such bank or company or its
controlled subsidiary; and
``(B) which are subject to an agreement pursuant to which
the holder is required to dispose of the shares of stock upon
termination of the holder's status as a director at the same
price as the individual acquired such shares of stock.
``(3) Distributions.--A distribution (not in part or full
payment in exchange for stock) made by the corporation with
respect to qualifying director shares shall be includible as
ordinary income of the holder and deductible to the
corporation as an expense in computing taxable income under
section 1363(b) in the year such distribution is received.''.
(b) Conforming Amendments.--
[[Page S8855]]
(1) Section 1361(b)(1), as amended by section 201(b), is
amended by striking ``subsection (f)'' and inserting
``subsections (f) and (g)''.
(2) Section 1366(a), as amended by section 201(b), is
amended by adding at the end the following new paragraph:
``(4) Allocation with respect to qualifying director
shares.--The holders of qualifying director shares (as
defined in section 1361(g)) shall not, with respect to such
shares of stock, be allocated any of the items described in
paragraph (1).''.
(3) Section 1373(a), as amended by section 201(b), is
amended by striking ``and'' at the end of paragraph (2), by
striking the period at the end of paragraph (3) and inserting
``, and'', and adding at the end the following new paragraph:
``(4) no amount of an expense deductible under this
subchapter by reason of section 1361(g)(3) shall be
apportioned or allocated to such income.''.
(c) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
1996.
SEC. 402. RECAPTURE OF BAD DEBT RESERVES.
Notwithstanding section 481 of the Internal Revenue Code of
1986, with respect to any S corporation election made by any
bank in taxable years beginning after December 31, 1996, such
bank may recognize built-in gains from changing its
accounting method for recognizing bad debts from the reserve
method under section 585 or 593 of such Code to the charge-
off method under section 166 of such Code either in the
taxable year ending with or beginning with such an election.
TITLE V--QUALIFIED SUBCHAPTER S SUBSIDIARIES
SEC. 501. TREATMENT OF THE SALE OF INTEREST IN A QUALIFIED
SUBCHAPTER S SUBSIDIARY.
(a) In General.--Section 1361(b)(3) (relating to treatment
of certain wholly owned subsidiaries) is amended by adding at
the end the following new subparagraph:
``(F) Special rule on termination.--The tax treatment of
the disposition of the stock of the qualified subchapter S
subsidiary shall be determined as if such disposition were--
``(i) a sale of the undivided interest in the subsidiary's
assets based on the percentage of the stock transferred, and
``(ii) followed by a deemed contribution by the S
corporation and the transferee in a section 351
transaction.''.
(b) Effective Date.--The amendment made by this section
shall apply to taxable years beginning after December 31,
1996.
TITLE VI--ADDITIONAL PROVISIONS
SEC. 601. ELIMINATION OF ALL EARNINGS AND PROFITS
ATTRIBUTABLE TO PRE-1983 YEARS.
(a) In General.--Subsection (a) of section 1311 of the
Small Business Job Protection Act of 1996 is amended to read
as follows:
``(a) In General.--If a corporation was an electing small
business corporation under subchapter S of chapter 1 of the
Internal Revenue Code of 1986 for any taxable year beginning
before January 1, 1983, the amount of such corporation's
accumulated earnings and profits (as of the beginning of any
taxable year beginning after December 31, 1982) shall be
reduced by an amount equal to the portion (if any) of such
accumulated earnings and profits which were accumulated in
any taxable year beginning before January 1, 1983, for which
such corporation was an electing small business corporation
under such subchapter S.''.
(b) Effective Date.--The amendment made by this section
shall apply to taxable years beginning after December 31,
1996.
SEC. 602. REPEAL OF LIFO RECAPTURE TAX.
(a) In General.--Section 1363 (relating to effect on
election on corporations) is amended by striking subsection
(d).
(b) Effective Date.--The amendment made by this section
shall apply to elections made after the date of the enactment
of this Act.
SEC. 603. EXPANSION OF POST-TERMINATION TRANSITION PERIOD.
(a) In General.--Clause (ii) of section 1377(b)(1)(A)
(defining post-termination transition period) is amended to
read as follows:
``(ii) the date on which any refund or credit of any
overpayment of tax with respect to the return for such last
year as an S corporation is prevented by the operation of any
law or rule of law (including res judicata),''.
(b) Effective Date.--The amendment made by this section
shall apply to periods beginning after the date of the
enactment of this Act.
SEC. 604. REDUCTION IN TAX RATE ON EXCESS NET PASSIVE INCOME.
(a) In General.--Section 1375(a) (relating to tax imposed
when passive investment income of corporation having
accumulated earnings and profits exceeds 25 percent of gross
receipts) is amended by striking ``computed by multiplying
the excess net passive income by the highest rate of tax
specified in section 11(b)'' and inserting ``15 percent of
the excess net passive income''.
(b) Effective Date.--The amendment made by this section
shall apply to taxable years beginning after December 31,
2006.
SEC. 605. INCREASE IN CAP ON QUALIFIED SMALL ISSUE BONDS.
(a) In General.--Section 144(a)(4)(A)(i) (relating to
general rule for $10,000,000 limit in certain cases) is
amended by striking ``$10,000,000'' and inserting
``$10,000,000($30,000,000 in the case of any bank (as defined
in section 581) or any depository institution holding company
(as defined in section 3(w)(1) of the Federal Deposit
Insurance Act (12 U.S.C. 1813(w)(1)) which is an S
corporation)''.
(b) Adjustment of Cap for Inflation.--Section 144(a)
(relating to qualified small issue bond) is amended--
(1) by redesignating paragraph (12) as paragraph (13); and
(2) by inserting after paragraph (11) the following new
paragraph:
``(12) Inflation adjustment.--
``(A) In general.--In the case of any calendar year after
2006, the $30,000,000 amount contained in paragraph (4)(A)(i)
shall be increased by an amount equal to--
``(i) such dollar amount, multiplied by
``(ii) the cost-of-living adjustment determined under
section 1(f)(3) for such calendar year by substituting
`calendar year 2005' for `calendar year 1992' in subparagraph
(B) thereof.
``(B) Rounding.--Any increase under subparagraph (A) which
is not a multiple of $100,000 shall be rounded to the next
lowest multiple of $100,000.''.
(c) Effective Date.--The amendments made by this section
shall apply to--
(1) obligations issued after the date of the enactment of
this Act; and
(2) capital expenditures made after such date with respect
to obligations issued on or before such date.
SEC. 606. SPECIAL RULES OF APPLICATION.
(a) Waiver of Limitations.--If refund or credit of any
overpayment of tax resulting from the application of any
amendment made by this Act is prevented at any time before
the close of the 1-year period beginning on the date of the
enactment of this Act by the operation of any law or rule of
law (including res judicata), such refund or credit may
nevertheless be made or allowed if claimed therefor is filed
before the close of such period.
(b) Treatment of Certain Elections Under Prior Law.--For
purposes of section 1362(g) of the Internal Revenue Code of
1986 (relating to election after termination), any
termination or revocation under section 1362(d) of such Code
(as in effect on the day before enactment of this Act) shall
not be taken into account.
____
There being no objection, the additional material was ordered to be
printed in the Record, as follows:
S Corporation Reform Act of 2006--Section-by-Section Description
The Subchapter S Modernization Act of 2006 includes the
following provisions to help improve capital formation
opportunities for small business, preserve family-owned
businesses, and eliminate unnecessary and unwarranted traps
for taxpayers:
TITLE I--Eligible Shareholders of an S Corporation
section 101. nonresident aliens allowed to be shareholders
The Act would permit nonresident aliens to be S corporation
shareholders. To assure collection of the appropriate amount
of tax, the Act requires the S corporation to withhold and
pay a tax on effectively-connected income allocable to its
nonresident alien shareholders. The provision enhances an S
corporation's ability to expand into international markets
and expands an S corporation's access to capital.
section 102. expansion of S corporation eligible shareholders to
include iras
The Act permits Individual Retirement Accounts (IRAs) to
hold stock in an S corporation. Currently this is permitted
only for S corporations that are banks.
TITLE II--QUALIFICATION AND ELIGIBILITY REQUIREMENTS OF S CORPORATIONS
section 201. issuance of preferred stock permitted
The Act would permit S corporations to issue qualified
preferred stock (``QPS''). QPS generally would be stock that
(I) is not entitled to vote, (ii) is limited and preferred as
to dividends and does not participate in corporate growth to
any significant extent, and (iii) has redemption and
liquidation rights which do not exceed the issue price of
such stock (except for a reasonable redemption or liquidation
premium). Stock would not fail to be treated as QPS merely
because it is convertible into other stock. This provision
increases access to capital from investors who insist on
having a preferential return and facilitates family
succession by permitting the older generation of shareholders
to relinquish control of the corporation but maintain an
equity interest.
section 202. safe harbor expanded to include convertible debt
The Act permits S corporations to issue debt that may be
converted into stock of the corporation provided that the
terms of the debt are substantially the same as the terms
that could have been obtained from an unrelated party. The
Act also expands the current law safe-harbor debt provision
to permit nonresident alien individuals as creditors. The
provision facilitates the raising of investment capital.
section 203. repeal of excessive passive investment income as a
termination event
The Act would repeal the rule that an S corporation would
lose its S corporation status if it has excess passive income
for three consecutive years. A corporate-level ``sting'' (or
double) tax would still apply, as modified
[[Page S8856]]
in Sections 204 and 604 below, to excess passive income.
section 204. modifications to passive income rules
The Act would increase the threshold for taxing excess
passive income from 25 percent to 60 percent (consistent with
a Joint Tax Committee recommendation on simplification
measures). In addition, the Act removes gains from the sales
or exchanges of stock or securities from the definition of
passive investment income for purposes of the sting tax.
section 205. adjustment to basis of S corporation stock for certain
charitable contributions
Current rules discourage charitable gifts of appreciated
property by S corporations. The Act would remedy this problem
by providing for an increase in the basis of shareholders'
stock in an amount equal to the excess of the value of the
contributed property over the basis of the property
contributed. This provision conforms the S corporation rules
to those applicable to charitable contributions by
partnerships.
TITLE III--TREATMENT OF S CORPORATION SHAREHOLDERS
section 301. treatment of losses to shareholders
In the case of a liquidation of an S corporation, current
law can result in double taxation because of a mismatch of
ordinary income (realized at the corporate level and passed
through to the shareholder) and a capital loss (recognized at
the shareholder level on the liquidating distribution).
Although careful tax planning can avoid this result, many S
corporations do not have the benefit of sophisticated tax
advice. The Act eliminates this potential trap by providing
that any portion of any loss recognized by an S corporation
shareholder on amounts received by the shareholder in a
distribution in complete liquidation of the S corporation
would be treated as an ordinary loss to the extent of the
shareholder's basis in the S corporation stock.
section 302. deductibility of interest expense incurred by an electing
small business trust (esbt) to acquire s corporation stock
The Act provides that interest expense incurred by an ESBT
to acquire S corporation stock is deductible by the S portion
of the trust. Current regulations provide that interest
expense incurred by an ESBT to acquire stock in an S
corporation is allocable to the S portion of the trust, but
is not deductible. This result is contrary to the treatment
of other taxpayers, who are entitled to deduct interest
incurred to acquire an interest in a pass through entity.
Further, Congress never intended to place ESBTs at a
disadvantage relative to other taxpayers.
section 303. back-to-back loans as indebtedness
This provision would remove a significant trap for unwary
shareholders of unsophisticated S corporations. The amount of
a shareholder's pro rata share of corporate losses that may
be taken into account are currently limited to the sum of (1)
the basis in the stock, plus (2) the basis of any shareholder
loans to the S corporation. The debt must run directly to the
shareholder for the shareholder to receive basis for this
purpose; the creditor may not be a person related to the
shareholder. It is not uncommon for the shareholders of an S
corporation to own related entities. Often times, loans are
made among these related entities. Under current law, it is
extremely difficult for the shareholders of an S corporation
to restructure these loans in order to create basis in the S
corporation against which losses of the S corporation may be
claimed. The ability to create loan basis through the
restructuring of related party loans has been the subject of
numerous court cases and is an area of much uncertainty. The
Act will protect these taxpayers from an unfair and
unwarranted fate by providing that true indebtedness from an
S corporation to a shareholder (funds for which the
shareholder is truly obligated to either repay or for which
he/she experiences a true economic outlay) increases
shareholder debt basis, irrespective of the original source
of the funds to the corporation.
TITLE IV--EXPANSION OF S CORPORATION ELIGIBILITY FOR BANKS
section 401. treatment of qualifying director shares
The Act clarifies that qualifying director shares of a bank
are not to be treated as a second class of stock. Instead,
the qualifying director shares are treated as a liability of
the bank and no gain or loss from the S corporation will be
allocated to these qualifying director shares. The provision
clarifies the law and removes a significant obstacle unique
among banks contemplating an S corporation election.
section 402. recapture of bad debt reserves
The Act permits bank S corporations to recapture up to 100
percent of their bad debt reserves on their first S
corporation tax return and/or their last C corporation income
tax return prior to the effective date of the S election.
Under current law, banks that convert to S corporation status
must change from the reserve method of accounting for bad
debts to the specific charge-off method. The differential
must often be ``recaptured'' into income and is treated as
built-in gain subject to tax at both the shareholder and the
corporate level. The Act allows banks to accelerate the
recapture of bad debt reserves to their last C corporation
tax year. The corporate level tax would still be paid on the
recapture income, but the recapture would no longer trigger a
tax for the bank's shareholders.
TITLE V--QUALIFIED SUBCHAPTER S SUBSIDIARIES
section 501. treatment of the sale of interest in a qualified
subchapter s subsidiary (qsub)
The Act treats the disposition of QSub stock as a sale of
the undivided interest in the QSub's assets based on the
underlying percentage of stock transferred followed by a
deemed contribution by the S corporation and the acquiring
party in a nontaxable transaction. Under current law, an S
corporation may be required to recognize 100 percent of the
gain inherent in a QSub's assets if it sells as little as 21
percent of the QSub's stock. IRS regulations suggest this
result can be avoided by merging the QSub into a single
member LLC prior to the sale, then selling an interest in the
LLC (as opposed to stock in the QSub). The Act achieves this
result without any unnecessary merger and thus removes a trap
for the unwary.
TITLE VI--ADDITIONAL PROVISIONS
section 601. elimination of all earnings and profits attributable to
pre-1983 years
The Small Business Job Protection Act of 1996 eliminated
certain pre-1983 earnings and profits of S corporations that
had S corporation status for their first tax year beginning
after December 31, 1996. The provision should apply to all S
corporations with pre-1983 S earnings and profits without
regard to when they elect S status. There seems to be no
policy reason why the elimination was restricted to
corporations with an S election in effect for their first
taxable year beginning after December 31, 1996.
section 602. the repeal of the lifo recapture tax
Often the most significant hurdle faced by a corporation
desiring to elect S corporation status is the LIFO recapture
tax. In many cases, this tax makes it cost-prohibitive for a
corporation to elect S status. The LIFO recapture tax was
enacted in 1987 in response to concerns that a taxpayer using
the LIFO method of accounting, upon conversion to S
corporation status, could avoid a corporate-level tax on LIFO
layers because the S corporation would only be subject to a
corporate-level tax on LIFO layers for the first 10 years
after conversion instead of indefinitely, as in the case of a
C corporation.
These concerns are unfounded. Most corporations, whether S
or C, hold base LIFO layers far longer than the 10-year
recognition period (often holding them indefinitely). There
is no data to suggest that S corporations deplete such layers
any faster than their C corporation counterparts (for
example, in year 11 of the S election). Accordingly, the
making of an S election should not be grounds for a tax on
base LIFO layers. The Act would repeal this unwarranted
government windfall and properly put S corporations on par
with C corporations, which rarely pay tax on the old LIFO
layers.
section 603. expansion of post-termination transition period
The Act expands the post-termination transition period
(PTTP) to include the filing of an amended return for an S
year. The granting of the 120-day PTTP should be based on the
recognition that legitimate changes to an original return can
be made in several ways including through audit or through
the filing of a taxpayer-initiated amended return.
section 604. reduction in tax rate on excess net passive income
The Act would bring the punitive nature of the tax on
excess passive income closer in form and substance to the
personal holding company (PHC) rules by reducing the tax rate
on passive investment income to 15 percent as was recently
done for PHCs by Section 302(e) of the Jobs and Growth Tax
Relief Reconciliation Act of 2003.
section 605. increase in cap on qualified small issue bonds
The act would change the maximum size of a bond issuance
that would qualify as a ``small issue'' for S corporation
banks to $10 million, and $30 million. It also indexes this
number for inflation.
section 606. reduced recognition period for built-in gains
The effective recognition period for built-in gains of S
corporations is reduced from ten years to seven years.
section 607. special rules of application
If a refund or tax credit resulting from the application of
this act is prevented in the first year of its enactment, it
may still be taken as long as it is claimed within the year.
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By Mr. DODD:
S. 3839. A bill to amend title II of the Social Security Act to
provide that the eligibility requirement for disability insurance
benefits under which an individual must have 20 quarters of Social
Security coverage in the 40 quarters preceding a disability shall not
be applicable in the case of a disabled individual suffering from a
covered terminal disease; to the Committee on Finance.
[[Page S8857]]
Mr. DODD. Mr. President, I ask unanimous consent that the text of the
bill, the Claire Collier Social Security Disability Insurance Fairness
Act, be printed in the Record.
There being no objection, the text of the bill was ordered to be
printed in the Record, as follows:
S. 3839
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 ``Claire Collier Social
Security Disability Insurance Fairness Act''.
SEC. 2. EXCEPTION FROM 20/40 REQUIREMENT FOR DISABILITY
INSURANCE BENEFITS FOR INDIVIDUALS SUFFERING
FROM A COVERED TERMINAL DISEASE.
(a) Exception From Recent Work Requirement.--
(1) In general.--Section 223(c)(1) of the Social Security
Act (42 U.S.C. 423(c)(1)) is amended in the flush matter
following subparagraph (B)(iii) by inserting ``or suffering
from a covered terminal disease'' after ``216(i)(1))''.
(2) Conforming amendment.--Section 216(i)(3) of such Act
(42 U.S.C. 416(i)(3)) is amended in the flush matter
following subparagraph (B)(iii) by inserting ``or suffering
from a covered terminal disease'' after ``paragraph (1))''.
(b) Definition of Covered Terminal Disease.--Not later than
60 days after the date of enactment of this Act, the
Commissioner of Social Security shall issue a proposed rule
defining the term ``covered terminal disease'' for purposes
of sections 216(i)(3) and 223(c)(1) of the Social Security
Act (as amended by subsection (a)) that shall include (but
not be limited to) those diseases that are incurable,
progressive, and terminal, including neurodegenerative and
neurological diseases that are likely to cause death within a
5-year period of onset.
(c) Interim Final and Final Rules.--
(1) Interim final rule.--Not later than 90 days after the
date of enactment of this Act, the Commissioner of Social
Security shall issue an interim final rule defining the term
``covered terminal disease'' in accordance with the
requirements of subsection (b) and shall provide for a period
of public comments on such rule.
(2) Final rule.--Not later than 6 months after the date of
enactment of this Act, the Commissioner of Social Security
shall issue a final rule defining the term ``covered terminal
disease'' in accordance with the requirements of subsection
(b) and consideration of any public comments received during
the period required under paragraph (1).
(d) Effective Date.--The amendments made by subsection (a)
shall take effect on the date of enactment of this Act and
shall apply to any applications for disability insurance
benefits under title II of the Social Security Act that are
pending or filed on or after that date.
____________________