[Congressional Record Volume 153, Number 61 (Tuesday, April 17, 2007)]
[Senate]
[Pages S4602-S4617]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS
By Mr. KYL (for himself, Mr. McConnell, Mr. Grassley, Mr. Lott,
Mr. Ensign, Mr. Hatch, Mr. Thomas, Mr. Smith, Mr. Bunning, Mr.
Crapo, Mr. Roberts, Mr. DeMint, Mr. Alexander, Mr. Martinez,
Mr. Chambliss, Mr. Brownback, Mr. Craig, Mr. Allard, Mr.
Graham, Mr. Enzi, Mr. Inhofe, Mr. Burr, and Mr. Coburn):
S. 14. A bill to repeal the sunset on certain tax rates and other
incentives and to repeal the individual alternative minimum tax, and
for other purposes; to the Committee on Finance.
Mr. KYL. Mr. President, today, on behalf of the Senate Republican
leadership, I am introducing the Invest in America Act, a comprehensive
set of legislative proposals that are designed keep American families
and the American economy on the path of continued prosperity by
preventing--the largest tax increase in our Nation's history--a tax
increase that is scheduled to happen in 2011 if Congress fails to
extend current tax policies.
The American economy is the envy of the developed world. Our
unemployment rate is just 4.4 percent, and 7.8 million new jobs have
been created since mid-2003. Not only are more Americans working than
ever before, but the benefits of our growing economy are broadly shared
by all Americans. Real, inflation-adjusted wages rose 2.2 percent in
the last 12 months--faster than the average rate of the late 1990s.
This meant an extra $1,279 in the past year for the typical family with
two wage earners. To keep our economy growing on this strong and
sustainable path, we must avoid tax increases that could damage our
economy.
America's economy has been growing at a strong and sustainable pace
due in large measure to the fact that Americans are willing to work
harder and be more productive in their labor, thus creating more new
goods and services at lower costs. Americans will continue to be
productive and contribute to our strong economy if we reject marginal
tax rate increases on the income they earn. Studies have shown that
people really do work more if the tax imposed on their extra labor is
relatively low. Arizona State University's distinguished economics
professor, Dr. Edward Prescott, won a Nobel Prize in economics for
research that proved this theory.
It's interesting that the big investment bank, Goldman Sachs, studied
what would happen if taxes increase across-the-board, as is scheduled
to happen in 2011 when the various tax rates and other provisions
enacted since 2001 expire. The short answer is an immediate recession--
a recession that would not be avoided even if the Federal Reserve acted
to cut interest rates. This study demonstrates very clearly why
Congress cannot allow this tax hike to happen.
The President proposed in his fiscal year 2008 budget to make the tax
rates and many other tax incentives enacted since 2001 permanent. In
marked contrast, Democrats have produced budget resolutions in both the
House and the Senate that assume all of these tax policies will expire
and taxes will increase dramatically for virtually every American. In
fact, the average family will see its taxes increase by about $3,675 if
the Democrats are successful in canceling the tax relief. Today, Senate
Republicans are going on the record in support of making these
important tax policies permanent and in opposition to plans by
Democrats to allow these tax increases to occur.
Our legislation underscores our commitment to American families and
to a strong American economy by preventing the largest tax increase in
American history. We believe that American families pay enough in
taxes--indeed, revenues are running above historical levels. The Invest
in America Act makes all of the current-law tax rates permanent so that
no American family faces an automatic tax hike in 2011. I want to
underscore that Republicans believe that no American family should face
a tax increase--not young people just entering the job market and other
lower-income Americans who are benefiting so substantially from the 10
percent bracket; not middle-income families; and not more successful
Americans, including the almost 80 percent of taxpayers in the top
bracket who report small business income.
Our legislation also invests in American families by making the
$1,OOO-per-child tax credit, the marriage penalty relief, and the other
components of the Economic Growth and Tax Relief Reconciliation Act--
EGTRRA--of 2001 permanent. American moms and dads face an enormous and
unexpected reduction in the child tax credit in 2011,
[[Page S4603]]
when the child tax credit is scheduled to be cut in half. Republicans
know that the child tax credit helps countless parents offset some of
the costs associated with raising their children, and we know that
reducing the credit by 50 percent will be a terrible blow to many
families. That's why Republicans support making the current $1,000 per-
child tax credit permanent.
Married couples will face an unwelcome surprise when the marriage
penalty relief expires. The marriage penalty relief the Republicans
enacted is aimed squarely at middle-income families because the relief
is only provided for the standard deduction and the 15-percent bracket.
Republicans believe there is no reason a married couple should face a
higher tax burden than they would as two single taxpayers, and so we
propose to invest in American families by making the marriage penalty
relief permanent.
The Invest in America Act underscores our commitment to investing in
America's future by making the important education-related tax benefits
enacted in recent years permanent. This will help countless middle-
income Americans afford higher education costs. Our legislation invests
in America's future by extending the tuition deduction, extending the
modifications to Coverdell education savings accounts, extending
certain provisions for the student loan interest deduction, and
extending the exclusion for employer-provided educational assistance.
We also propose to permanently extend the $250 deduction for expenses
of elementary and secondary school teachers.
Republicans also believe that parents ought to be able to pass on the
fruits of their labor to their children without the Federal death tax
confiscating half of their estate, above a small exemption amount. The
death tax hits family businesses and family farms and ranches the
hardest because the owners are often not wealthy families, but rather
have most of their assets tied up in the value of the business or the
value of the land. And while the death tax hurts families, it also
hurts our economy if it forces family businesses to close down,
eliminating good-paying jobs in the process. Under current law, the
death tax is repealed in 2010, but springs back to life in 2011, when
more than 131,000 families will have to file estate tax returns in that
year alone. Americans pay taxes throughout their lives, and Republicans
believe they should not have more than half of their assets taken in
taxes at death too, so the Invest in America Act makes repeal of the
death tax permanent.
The Invest in America Act goes beyond the 2001 and 2003 tax relief
laws and also repeals--once and for all--the individual Alternative
Minimum Tax (AMT). If you go by rhetoric alone, there is overwhelming
bipartisan support in Congress for repealing the AMT. But, American
taxpayers want action. The problems we have encountered from the AMT
demonstrate what happens when Congress tries to target a tax
specifically at the ``wealthy''--we almost always end up hitting the
broad swath of middle-income families. The AMT was never intended to
hit middle-income taxpayers, and Congress ought to repeal it before it
imposes unnecessary and unexpected taxes on more and more families.
Republicans understand that, in addition to not raising taxes on
families, we cannot take our strong and dynamic economy for granted; we
believe we must invest in American competitiveness. While our
legislation should not be viewed as a comprehensive approach to
improving American competitiveness, we believe a necessary first step
is to prevent tax increases that will surely hurt America's competitive
position in the world economy. Specifically, the Invest in America Act
makes permanent the current tax rates for capital gains and dividends;
it makes the increased expensing amounts available for small businesses
permanent; and it makes permanent the newly-enhanced research and
development tax credit.
America cannot expect to be the home for worldwide capital markets if
it is hostile to American investors, so the Invest in America Act makes
the existing tax rates for long-term capital gains and for qualified
dividends permanent. These lower tax rates implemented in 2003 and
extended in 2006 have encouraged investors of all income categories to
put their money to work in the markets, generating solid returns for
American investors and providing much needed capital for American
businesses to grow and create new jobs. It has been 4 years since these
lower rates were enacted-long enough for us to determine once and for
all that lower rates really do encourage increased economic activity.
Growth since the 2003 tax relief has averaged more than 3.5 percent,
while it averaged just 1.3 percent from the first quarter of 2001
through the second quarter of 2003. The Dow Jones Industrial Average
has risen by 40 percent since the lower investment tax rates were
enacted. The average 401(k) balance has risen by about 65 percent since
2003. All of this investment activity makes it easier for entrepreneurs
and businesses to raise funds to expand and grow their businesses,
create more jobs, and improve standards of living around the country.
It's interesting to note that, while the conventional wisdom is that
these lower investment tax rates only benefit ``the rich,'' half of all
Americans own shares of stock, either on their own or in their
retirement savings. In fact, most of the Americans who are benefiting
from these lower rates are middle-income taxpayers. Moreover, the
current 5 percent rate, which is available for the lower-income
investors and drops to zero in 2008, is a sometimes-forgotten benefit,
but it is especially important to our senior citizens who rely on their
investment income. According to statistics calculated by the Joint
Committee on Taxation, the vast majority of elderly taxpayers who
report capital gains and dividends income have incomes under $100,000.
In addition to reducing tax rates to encourage more business
investment, Congress also significantly increased the amount of
investment that small businesses may expense in a given year. This has
helped countless small businesses expand their operations by making the
purchase of new equipment more cost-effective. Unfortunately, these
increased levels are only in effect through 2009. Small businesses
create most new jobs in the U.S. and comprise half of our private gross
domestic product, so the Invest in America Act proposes to make the
enhanced small business expensing levels permanent.
While low tax rates on income and investments are essential to
keeping America competitive, Republicans know that many countries
around the world are specifically and aggressively working to attract
some of the most high-quality jobs and economic activities available:
research and development. America hinders its ability to attract and
retain R&D here because the tax incentives we give to encourage R&D are
not permanent law, but must be extended every year or so. This makes it
very difficult for companies to commit to large-scale R&D investments
in the U.S., when other countries are offering permanent or longer-term
tax incentives. To ensure that America remains the most attractive
place for R&D, the Invest in America Act makes the R&D tax credit
permanent.
The Invest in America Act also acknowledges that the U.S. tax system
imposes a costly and frustrating burden on taxpayers, with filers
spending an average 30 hours to complete the typical Form 1040. Six in
ten Americans opt instead to hire a professional. The billions of
dollars spent each year simply complying with the tax system could be
put to a much better, and more economically beneficial, use. The Invest
in America Act expresses the Sense of the Senate that the Finance
Committee should report tax simplification legislation by the end of
the year to make the tax system fair, transparent, and efficient,
without raising tax rates.
Finally, I want to address the effect all of the tax changes have had
on our budget deficit and to dispute the notion that Congress must
raise taxes elsewhere if we are going to make existing tax rates and
incentives permanent and repeal the AMT. It is important for all
Americans to know that all of the additional tax revenue flowing into
the Treasury from our growing economy, hardworking Americans, and from
profitable investments has caused our budget deficit to shrink below 2
percent of GDP--well below its historical average. If we stay on our
current progrowth path, reject tax increases,
[[Page S4604]]
and impose reasonable restraints on spending growth, we will balance
the budget by 2012, if not sooner.
As for the notion that Congress must ``pay for'' tax relief with tax
increases, I would note that the official estimates about how much
certain tax provisions will ``cost'' the Treasury are just that,
estimates. And they often prove to be wrong. For example, since 2003,
the Treasury has collected $133 billion more in capital gains revenue
than was originally projected by the Congressional Budget Office;
revenues have exceeded official CBO projections by 68 percent. Second,
the concept of requiring corresponding tax increases falsely assumes
that the Government is entitled to the revenue, when it really belongs
to the American people. Third, revenues are running above their
historical average of about 18.2 percent and are projected to continue
increasing even if we make the current tax structure permanent, as we
propose in the Invest in America Act. If we raise taxes in order to
extend the tax policies, we will be taking even more resources out of
the private sector and spending them on government programs, which will
certainly damage our economy. To protect our growing economy, I believe
we must ensure that revenues, as a percentage of our economy, do not
rise much above their current level.
I am pleased to be the lead sponsor of this important legislation
that underscores the commitment of the Senate Republican leadership to
investing in American families, America's future, and American
competitiveness. America's economy is growing at a strong and
sustainable level, to the benefit of all American families, but this
growth will not continue if we unwisely allow taxes to be increased on
work, savings, and investment--the very engines of economic growth.
______
By Mr. REED (for himself and Mr. Cochran):
S. 1121. A bill to authorize the cancellation of Perkins Loans for
students who perform public service as librarians in low-income schools
and public libraries; to the Committee on Health, Education, Labor, and
Pensions.
Mr. REED. Mr. President, I am joined by Mr. Cochran in introducing
important legislation, the Librarian Incentive to Boost Recruitment and
Retention in Areas of Need (LIBRARIAN) Act, to support our Nation's
librarians. This legislation is also being introduced in the other body
by Representative Becerra, along with Representatives Grijalva, Ehlers,
and Shimkus.
Public libraries and schools across the Nation are experiencing a
shortage of librarians. Approximately 25 percent of America's school
libraries do not have a State certified library media specialist on
staff and with more than three in five librarians becoming eligible for
retirement in the next decade this shortage is anticipated to only
worsen.
The LIBRARIAN Act amends the Higher Education Act to provide for
Perkins loan forgiveness to individuals with master's degrees in
library science who become librarians in low-income schools and public
libraries. Librarians working full-time in low-income areas would
qualify for up to 100 percent Perkins loan forgiveness depending on the
number of years they serve.
Libraries and librarians play an essential role in our schools and
communities; this legislation aims to provide the same support to
librarians as other public service workers receive, including teachers
working in low-income schools, Head Start staff, law enforcement
officials, and nurses or medical technicians.
Today we celebrate National Library Workers Day, a day to recognize
the valuable contributions made by librarians and others who work in
libraries. With this legislation, we have an opportunity to encourage
more individuals to pursue the field of library science and retain
those skilled librarians who are already serving in our low-income
schools and communities.
I was pleased that the text of this bill was included in the Higher
Education Act reauthorization bill approved by the Senate Health,
Education, Labor, and Pensions Committee last Congress. I will again
press for its inclusion in the reauthorization bill the Committee is
currently working to develop. I urge my colleagues to join us in this
endeavor by cosponsoring the LIBRARIAN Act.
I ask unanimous consent that the text of this bill be printed in the
Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 1121
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 ``Librarian Incentive to Boost
Recruitment and Retention in Areas of Need Act of 2007'' or
the ``LIBRARIAN Act''.
SEC. 2. LOAN CANCELLATION.
(a) Amendments.--Section 465(a) of the Higher Education Act
of 1965 (20 U.S.C. 1087ee(a)) is amended--
(1) in paragraph (2)--
(A) by striking ``section 111(c)'' in subparagraph (A) and
inserting ``section 1113(a)(5)'';
(B) by striking ``or'' at the end of subparagraph (H);
(C) by striking the period at the end of subparagraph (I)
and inserting ``; or''; and
(D) by inserting after subparagraph (I) the following new
subparagraph:
``(J) as a full time librarian, if the librarian has a
master's degree in library science and is employed in--
``(i) an elementary school or secondary school that is
eligible for assistance under title I of the Elementary and
Secondary Education Act of 1965; or
``(ii) a public library that serves a geographic area that
contains 1 or more schools eligible for assistance under
title I of the Elementary and Secondary Education Act of
1965.''; and
(2) in paragraph (3)(A)(i), by striking out ``(H), or (I)''
and inserting ``(H), (I), or (J)''.
(b) Effective Date.--The amendments made by subsection (a)
shall apply with respect to any year of service that is
completed after the date of enactment of this Act.
______
By Mr. LEVIN (for himself and Mr. Coleman):
S. 1124. A bill to amend the Internal Revenue Code of 1986 to
simplify, modernize, and improve public notice of and access to tax
lien information by providing for a national, Internet accessible,
filing system for Federal tax liens, and for other purposes; to the
Committee on Finance.
Mr. LEVIN. Mr. President, today is the day that millions of Americans
across this country perform an important civic duty by paying their
taxes. It is also a day when many Members of Congress take the time to
reflect on the state of the Federal tax system and consider how we can
strengthen it, simplify it, make it more fair, and, in a responsible
way, ease the tax burden on our citizens.
Earlier this year, I introduced the Stop Tax Haven Abuse Act, S. 681,
to strengthen our tax system. That bipartisan bill, which I introduced
with my colleagues, Senators Norm Coleman and Barack Obama, targets
outrageous, offshore tax abuses that drain $100 billion each year from
the U.S. Treasury at the expense of honest, hardworking American
families who pay their fair share. Offshore tax abuses eat away at the
foundations of our tax system, draining billions in tax revenue,
diverting substantial IRS enforcement resources, and demoralizing
honest taxpayers who play by the rules. S. 681 offers a host of
provisions to stop offshore abuses, and I urge my colleagues to take a
serious look at that legislation on this tax day. If enacted, it would
make our tax system more effective, more fair, and more productive. It
deserves to be enacted into law this year.
Stopping offshore tax abuse, however, is far from the only tax
problem that needs to be addressed if we are to achieve a fair and cost
effective tax system. So today, I am introducing with Senator Coleman
legislation offering a cure to a completely different tax problem. The
target of this legislation is better administration of Federal tax
liens.
It has been 40 years since Congress made any significant changes to
the laws regulating how the Internal Revenue Service (IRS) files
Federal tax liens and makes them public. Right now, outdated laws are
forcing the IRS to waste taxpayer dollars on an old-fashioned,
inefficient, and burdensome paper tax lien filing system that should be
replaced by a modernized electronic filing system capable of operating
at a fraction of the cost. It is time to bring the Federal tax lien
system into the 21st century. That's why I am introducing today, along
with Senator Coleman, the Tax Lien Simplification
[[Page S4605]]
Act, which will simplify the process of recording tax liens at an
estimated ten-year cost savings of over half a billion dollars, while
at the same time improving taxpayer service by speeding up the release
of liens after taxes are paid.
Tax liens are a principal way to collect payment from persons who are
delinquent in paying their taxes. By law, Federal tax liens arise
automatically ten days after a taxpayer's failure to pay an assessed
tax. The lien automatically attaches to the taxpayer's real and
personal property and remains in effect until the tax is paid. However,
the tax lien is not effective against other creditors owed money by the
same taxpayer, until a notice of the Federal tax lien is publicly
recorded. Generally, between competing creditors, the first to file
notice has priority, so the filing of tax lien notices is very
important to the government and to the taxpaying public if taxes are to
be collected from persons who don't pay them.
Current law requires the IRS to file public notices of Federal tax
liens in State, county, or city recording offices around the country.
There are currently more than 4,100 of these local recording offices,
many of which have developed specific rules regulating how such liens
must be formatted and filed in their jurisdictions. This patchwork
system developed more by default than by plan, because those local
offices were where documents affecting title to real property,
judgments, and other lien and security interest documents had always
been filed.
In 1966, to help the IRS comply with a proliferating set of local
filing rules for Federal tax liens, Congress passed the Tax Lien Act to
standardize certain practices. This act provided, for example, that
liens against real estate had to be filed where the property was
located, and required each State to designate a single place to file
Federal tax liens applicable to personal property. Most States
subsequently adopted a version of the Uniform Tax Lien Filing Act,
enabling the IRS to file a notice of tax lien in each locality where
the taxpayer's real estate is located, and a single notice where the
taxpayer resides to reach any personal property. For corporations,
States typically require the IRS to file a notice to attach real estate
in each locality where the real estate is located, and a separate
notice, usually at the State level, to attach other types of property.
There are often additional rules for trusts and partnerships. The end
result of the law was to reduce some but not all of the multiple sets
of rules regulating the local filing of Federal tax liens.
In addition, in most cases, the IRS continued to have to physically
file the tax lien in the appropriate local recording office. In most
cases, that filing is accomplished by mail. Some jurisdictions also
allow electronic filings, but those jurisdictions are few and far
between. The same is true if a lien has to be corrected, or a related
certificate of discharge, subordination, or nonattachment needs to be
filed, or when a tax liability has been resolved and the IRS wants to
release a lien. Each usually requires a paper filing in one or more
local recording offices. If a paper filing is lost or misplaced, the
IRS often has to send an employee in person to deal with the problem,
adding travel costs to other administrative expenses.
The paper filing system imposes similar burdens on other persons
dealing with the tax lien system. Any person who is the subject of a
tax lien, for example, or who is a creditor trying to locate a tax
lien, is required to make a physical trip to one or more local
recording offices to search the documents and see if a lien has been
filed. Currently, there is no central database of locally filed tax
liens that can be accessed by any member of the public or by any
taxpayer that is the subject of a federal tax lien. Not even IRS
personnel have access to such a tax lien database. It does not exist.
The result is an inefficient, costly, and burdensome paper filing
system that can and should be completely revamped. Businesses across
the country learned long ago that electronic filing systems outperform
paper; they save personnel costs, material costs, time, and client
frustration. Government agencies have learned the same thing as they
have moved to electronic databases and recordkeeping, including systems
made available to the public on the Internet. Among the many examples
of government-sponsored, Internet-based systems currently in operation
are the contractor registry operated by the General Services
Administration to allow persons to register to bid on federal
contracts, the license registry operated by the Federal Communications
Commission to allow the public to search radio licenses, and the
registry operated by the U.S. Patent and Trademark Office to allow the
public to search currently registered patents and trademarks. Each of
these systems has saved taxpayer money, while improving service to the
public.
Just as government agencies gave up the horse and buggy for the
automobile, it is time for the IRS to move from a decentralized, paper-
based tax lien filing system to an electronic national tax lien
registry. But the IRS' hands are tied, until the Congress changes the
laws holding back modernization of the federal tax lien filing system.
The bill we are introducing today would make the changes necessary to
enable the IRS to take immediate steps to simplify and modernize the
Federal tax lien filing system. The operative provisions would require
the IRS to create a national registry for the filing of tax lien
notices as an electronic database that is Internet accessible and
searchable by the public at no cost. It would mandate the use of this
system in place of the existing system of local filings. It would
establish the priority of Federal tax liens according to the date and
time that the relevant notice was filed in the national registry, in
the same way that priorities are currently established from the date
and time of filing in local recording offices. The bill would also
shorten the time allowed to release a tax lien, after the related tax
liability has been resolved, from 30 days to 10 days.
To establish this new electronic filing system, the bill would give
the Treasury Secretary express authority to issue regulations or other
guidance governing the establishment and maintenance of the registry.
Among other obligations, Treasury would be required to ensure that the
registry was secure and prevent data tampering. In addition, prior to
the implementation of the national registry, the Treasury Secretary
would be required to review the information currently included in
public tax lien filings to determine whether any of that information
should be excluded or protected from disclosure on the Internet. For
example, the Treasury Secretary would be expected to prevent the
disclosure of social security numbers that are currently included in
many public tax lien filings, but if disclosed on the Internet, could
facilitate identity theft. While such identifying information could
continue to be included in a tax lien filing to ensure that the filing
is directed toward the correct person, the registry could be
constructed to prevent such information from being disclosed publicly
and to instead provide such information only upon request from
appropriate persons involved in the enforcement of the tax lien or
collection of the tax debt. By requiring this information review prior
to implementing the national tax lien registry, the bill is expected to
provide greater protection of some taxpayer information than occurs in
current tax lien filings.
The bill would require the Treasury Secretary to establish a
functioning tax lien registry by January 1, 2009, but would also allow
the IRS to continue to use the existing paper-based tax lien filing
system, in parallel with the new system, for an appropriate period to
ensure a smooth transition. The IRS has indicated that it would be able
to establish an electronic tax lien filing system within the specified
time period.
Moving to a centralized, electronic tax lien filing system, an
Internet-based National Registry of tax liens, would accomplish at
least three objectives. It would save taxpayer dollars, speed the
process for filing and releasing tax liens, and simplify the process
for researching Federal tax liens for taxpayers and creditors.
The IRS estimates that moving from a paper-based, locally filed tax
lien system to an Internet-based, Federal tax lien filing system would
save about $570 million over 10 years. That's half a billion dollars in
cost savings. These
[[Page S4606]]
savings would come from the elimination of State filing fees, IRS
personnel costs, travel costs related to local filing problems, and the
cost of lost taxes whenever the IRS makes an error or a tax lien filing
is misplaced or delayed. Filing fees, for example, vary widely from
state to state, but typically cost at least $10 per filing, and in some
States cost as much as $150. If a taxpayer has real estate in multiple
jurisdictions, those costs multiply. Personnel costs include the IRS
service center staff that is currently charged with filing tax liens
nationwide and complying with the myriad filing rules in effect in the
4,100 recording offices across the country. Additional anticipated
savings would come from reduced mailing and travel costs.
Electronic filing would not only save money, it would improve
taxpayer service. Taxpayers who are the subject of a tax lien filing,
for example, would benefit from a centralized registry in several ways.
First, taxpayers would be able to review their liens as soon as they
are filed online, without having to make a physical trip to one or more
local recording offices. Second, taxpayers would have an easy way to
look up their liens on multiple occasions, identify any problems, and
correct any errors. Third, once the underlying tax liability was
resolved, the IRS would be required to release the tax lien in 10 days,
instead of the 30 days allowed under current law. The longer 30-day
period is necessitated by the current complexities associated with
filing a paper lien in one or more local offices, complexities that
would be eliminated by the establishment of a centralized, electronic
registry.
Creditors who need to research Federal tax liens would also benefit
from a centralized, electronic registry. Lenders, security holders and
others, for example, would be able to use a simplified search process
that could take place online and would not require physical trips to
multiple locations. Simplifying the search process would also provide
greater certainty that all tax liens were found. The ability to
research Federal tax liens remotely and instantaneously should be of
particular benefit to larger lenders and to creditors of taxpayers with
widely distributed assets.
Federal tax liens are not a topic that normally excites the public's
interest. Sound tax administration, however, requires attention to
administrative as well as enforcement concerns. Federal law is
currently impeding development of a more efficient, cost effective tax
lien filing system. Amending the law as indicated in the Tax Lien
Simplification Act to streamline the tax lien filing system, moving it
from a paper-based to an electronic-based system, would not only
advance the more efficient, cost-effective tax system we all want, it
would also save half a billion dollars in taxpayer money. At the same
time, it would make the system work better for individual taxpayers by
reducing the possibility for mistakes and speeding up the release of
liens for taxpayers who have paid. Modernizing our tax lien filing
system makes sense in every way. I urge my colleagues to join Senator
Coleman and myself in enacting this bill into law this year.
I ask unanimous consent to print in the Record following these
remarks a section-by-section analysis of the bill.
There being no objection, the summary was ordered to be printed in
the Record, as follows:
The Tax Lien Simplification Act introduced by Senators
Levin and Coleman contains the following provisions.
Section 1
The short title of the bill is the ``Tax Lien
Simplification Act.''
Section 2
Section 2 contains the findings and purpose of the bill. It
finds that the current federal tax lien filing system is
inefficient, burdensome, and expensive, and that current
technology permits the creation of an electronic system that
would be more efficient, more timely, less burdensome, and
less expensive. It states that the purpose of the bill is to
simplify and modernize the tax lien filing process, to
improve public access to tax lien information, and to save
taxpayer dollars by replacing the current decentralized
system of local tax lien filings with a centralized,
nationwide, Internet accessible, and fully searchable tax
lien filing system.
Section 3
Section 3 contains the operative provisions of the bill.
Subsection (a) would amend section 6323(f) of title 26 by
eliminating the provisions in current law directing tax liens
to be filed in state and local recording offices, and by
authorizing the filing of federal tax lien notices in a
national tax lien registry to be established under a new
subsection 6323(k). It would deem such notices, and any
related certificate of release, discharge, subordination, or
nonattachment of a lien, to be effective for purpose of
determining the relative priority of a federal tax lien. It
would direct the Secretary of the Treasury to prescribe the
form and content of the tax lien notices to be filed on the
registry. Filings of tax lien notices and related documents
would become effective from the date and time of recording in
the national tax lien registry, just as they are now from the
date and time of a local filing.
Subsection (b) would provide that if an existing tax lien
notice must be re-filed, then the re-filing should be made in
the national tax lien registry.
Subsection (c) would require certificates of release,
discharge, subordination, and nonattachment of a tax lien to
be filed in the national tax lien registry. It would also
reduce from 30 days to 10 days the time allotted for the
release of a tax lien after the underlying tax liability has
been resolved. It would make various conforming amendments in
the provisions related to federal tax liens.
Subsection (d)(1) would amend section 6323 of title 26 by
establishing a National Registry of federal tax liens and
related documents. It would require this National Registry to
be established and maintained by the Secretary of the
Treasury, and made accessible to and searchable by the public
through the Internet at no cost. It would require the
registry to identify the taxpayer to whom the tax lien
applies and reflect the date and time the notice of lien was
filed. It would require the registry to be searchable by, at
a minimum, taxpayer name and address, the type of tax, the
tax period, and when Treasury determines it is feasible, by
the affected property.
Subsection (d)(2) would require Treasury to issue
regulations or other guidance for the maintenance and use of
the registry, and to secure the registry and prevent data
tampering. Prior to the implementation of the registry, the
Treasury Secretary would be required to review the
information currently provided in public tax lien filings to
determine whether any of that information should be excluded
or protected from public viewing in the National Registry.
Subsection (e) would establish a transition rule for the
move from the existing paper-based tax lien filing system to
the National Registry. It would authorize the Treasury
Secretary to issue regulations allowing for the continued
filing of notices in state and local offices for ``an
appropriate period to permit an orderly transition'' to the
National Registry.
Subsection (f) would require Treasury to make the National
Registry operational as of January 1, 2009, and make the bill
applicable to tax lien notices filed after December 31, 2008.
______
By Mr. DODD (for himself, Mr. Cochran, Mr. Kennedy, Mr. Stevens,
Mr. Bingaman, Mr. Kerry, and Mr. Rockefeller):
S. 1128. A bill to amend the National and Community Service Act of
1990 to establish a Summer of Service State grant program, a Summer of
Service national direct grant program, and related national activities,
and for other purposes; to the Committee on Health, Education, Labor,
and Pensions.
Mr. DODD. Mr. President, I rise today to introduce, along with
Senators Cochran, Kennedy, Stevens, Bingaman, Kerry and Rockefeller the
Summer of Service Act of 2007. This bill offers middle school students
the chance to spend a summer in service to their communities as they
transition into high school.
The Summer of Service Act would create a competitive grant program
that would enable States and localities to offer middle school students
an opportunity to participate in a structured community service program
over the summer months. It would employ service-learning to teach civic
participation skills, help young people see themselves as resources to
their communities, expand educational opportunities and discourage
``summer academic slide.'' Providing tangible benefits to their
communities, Summer of Service projects would direct grantees to work
on unmet human, educational, environmental and public safety needs and
encourage all youth, regardless of age, income, or disability, to
engage in community service. The program would also grant participants
with an educational award of up to $500 which can later be used to pay
for college.
Volunteerism not only brings support and services to communities in
need, it also provides significant benefits to the students who
participate. When young people participate in service activities they
feel better able to control their lives in a positive way, avoiding
risk
[[Page S4607]]
behaviors, strengthening their community connections and become more
engaged in their studies. When service is tied to what students are
learning in school, they often make gains on achievement tests,
complete their homework more often, and increase their grade point
average. Students who engage in service learning also improve their
communication skills, gain increased awareness of career possibilities,
and develop more positive workplace attitudes, setting the foundation
for their place as America's future leaders. Studies also show that
students who participate in community service are more likely to
graduate high school and demonstrate interest in going to college.
We often hear today of the tremendous pressures our young people face
at home, in school and in the afterschool hours. Summer of Service
provides young people with the chance to be a positive change in their
communities. For this reason, I urge my colleagues to join me in
supporting the Summer of Service Act of 2007. 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. 1128
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 ``Summer of Service Act of
2007''.
SEC. 2. FINDINGS AND PURPOSES.
(a) Findings.--Congress finds the following:
(1) Throughout the United States, there are pressing unmet
human, educational, environmental and public safety needs.
(2) Americans desire to affirm common responsibilities and
shared values, and join together in positive experiences,
that transcend race, religion, gender, age, disability,
region, income, and education.
(3) Americans of all ages can improve their communities and
become better citizens through service to their communities.
(4) When youth participate in service activities and see
that they are able to improve the lives of others, the youth
feel better able to control their own lives in a positive
way, avoiding risky behaviors, strengthening their community
connections, and becoming more engaged in their own
education.
(5) When youth service is tied to learning objectives, that
service is shown to decrease alienation and behavior
problems, and increase knowledge of community needs,
commitment to an ethic of service, and understanding of
politics and morality.
(6) When service is tied to what students are learning in
school, the students make gains on achievement tests,
complete their homework more often, and increase their grade
point averages.
(7) Students who engage in service-learning improve their
communication skills, increase their awareness of career
possibilities, have a deeper understanding of social and
economic issues that face the United States, and develop more
positive workplace attitudes, preparing them to take their
places as future leaders of the United States.
(8) In a national poll, more than 80 percent of parents
said that their child would benefit from an after school
program that offered community service and 95 percent of
teens agreed that is important to volunteer time to community
efforts.
(b) Purpose.--The purposes of this Act are to--
(1) offer youth the chance to spend a summer in service to
their communities as a rite of passage before high school;
(2) teach civic participation skills to youth and help
youth see themselves as resources and leaders for their
communities;
(3) expand educational opportunities and discourage
``summer slide'' by engaging youth in summer service-learning
opportunities;
(4) encourage youth, regardless of age, income, or
disability, to engage in community service;
(5) provide tangible benefits to the communities in which
Summer of Service programs are performed; and
(6) enhance the social-emotional development of youth of
all backgrounds.
SEC. 3. SUMMER OF SERVICE PROGRAMS.
Title I of the National and Community Service Act of 1990
(42 U.S.C. 12511 et seq.) is amended--
(1) by redesignating subtitles F, G, H, and I as subtitles
G, H, I, and J, respectively;
(2) by redesignating sections 160 through 166 as sections
159A through 159G, respectively; and
(3) by inserting after subtitle E the following:
``Subtitle F--Summer of Service Programs
``SEC. 161. DEFINITIONS.
``In this subtitle:
``(1) Educational award.--The term `educational award'
means an award disbursed under section 162B(d) or 163B(d).
``(2) Eligible entity.--The term `eligible entity' means a
public or private nonprofit organization, an institution of
higher education, a local educational agency, a public
elementary school or public secondary school, or a consortium
of 2 or more of the entities described in this paragraph.
``(3) Eligible youth.--The term `eligible youth' means a
youth who will be enrolled in the sixth, seventh, eighth, or
ninth grade at the end of the summer for which the youth
would participate in community service under this subtitle.
``PART I--SUMMER OF SERVICE STATE GRANT PROGRAM
``SEC. 162. GRANTS TO STATES.
``(a) Grants.--
``(1) In general.--The Chief Executive Officer shall award
grants on a competitive basis to States, to enable the State
Commissions--
``(A) to carry out State-level activities under subsection
(d); and
``(B) to award subgrants on a competitive basis under
section 162A to eligible entities to pay for the Federal
share of the cost of carrying out community service projects.
``(2) Funds for educational awards.--The Chief Executive
Officer shall decide whether funds appropriated to carry out
this part and available for educational awards (referred to
in this part as `educational award funds') shall be--
``(A) included in the funds for such grants to States and
subgrants to eligible entities; or
``(B) reserved by the Chief Executive Officer, deposited in
the National Service Trust for educational awards, and
disbursed according to paragraphs (1) and (3) of section
162B(d).
``(3) Periods of grants.--The Chief Executive Officer shall
award the grants for periods of 3 years.
``(4) Amounts of grants.--The Chief Executive Officer shall
award such a grant to a State for a program in a sum equal
to--
``(A) the amount obtained by multiplying $500 and the
number of youth who will participate in the program (to be
used for program expenses);
``(B) unless the Chief Executive Officer decides to deposit
funds for educational awards in the National Service Trust,
as described in paragraph (2)(B), an additional amount equal
to the amount described in subparagraph (A) (to be used for
educational awards); and
``(C) an amount sufficient to provide for the reservation
for State-level activities described in subsection (d).
``(b) State Application.--To be eligible to receive a grant
under this section, a State shall submit an application to
the Chief Executive Officer at such time, in such manner, and
containing such information as the Chief Executive Officer
may require, including information that--
``(1) designates the State Commission as the agency
responsible for the administration and supervision of the
community service program carried out under this part in the
State;
``(2) describes how the State Commission will use funds
received under this part, including funds reserved for State-
level activities under subsection (d);
``(3) describes the procedures and criteria the State
Commission will use for reviewing applications and awarding
subgrants on a competitive basis under section 162A to
eligible entities for projects, including how the State
Commission will give priority to an entity that--
``(A) offers a quality plan for or has an established track
record of carrying out the activities described in the
entity's application;
``(B) has a leadership position in the community from which
the youth participating in the project described in the
application will be drawn;
``(C) proposes a project that focuses on service by the
participants during the transition year before high school;
``(D) plans to ensure that at least 50 percent of the
participants are low-income eligible youth;
``(E) proposes a project that encourages or enables youth
to continue participating in community service throughout the
school year;
``(F) plans to involve the participants in the design and
operation of the project, including involving the
participants in conducting a needs-based assessment of
community needs;
``(G) proposes a project that involves youth of different
ages, races, sexes, ethnic groups, religions, disability
categories, or economic backgrounds serving together; and
``(H) proposes a project that provides high quality
service-learning experiences;
``(4) describes the steps the State Commission will take,
including the provision of ongoing technical assistance
described in subsection (d)(2) and training, to ensure that
projects funded under section 162A will implement effective
strategies; and
``(5) describes how the State Commission will evaluate the
projects, which shall include, at a minimum--
``(A) a description of the objectives and benchmarks that
will be used to evaluate the projects; and
``(B) a description of how the State Commission will
disseminate the results of the evaluations, as described in
subsection (d)(4)(C).
``(c) Applicant Review.--
``(1) Selection criteria.--The Chief Executive Officer
shall evaluate applications for grants under this section
based on the quality, innovation, replicability, and
sustainability of the State programs proposed by the
applicants.
[[Page S4608]]
``(2) Review panels.--The Chief Executive Officer shall
employ the review panels established under section 165A in
reviewing the applications.
``(3) Notification of applicants.--If the Chief Executive
Officer rejects an application submitted under this section,
the Chief Executive Officer shall promptly notify the
applicant of the reasons for the rejection of the
application.
``(4) Resubmission and reconsideration.--The Chief
Executive Officer shall provide an applicant notified of
rejection with a reasonable opportunity to revise and
resubmit the application. At the request of the applicant,
the Chief Executive Officer shall provide technical
assistance to the applicant as part of the resubmission
process. The Chief Executive Officer shall promptly
reconsider an application resubmitted under this paragraph.
``(d) State-Level Activities.--A State that receives a
grant under this section may reserve up to 5 percent of the
grant funds for State-level activities, which may include--
``(1) hiring staff to administer the program carried out
under this part in the State;
``(2) providing technical assistance, including technical
assistance concerning the professional development and
training of personnel, to eligible entities that receive
subgrants under section 162A;
``(3) conducting outreach and dissemination of program-
related information to ensure the broadest possible
involvement of eligible entities and local eligible youth in
the program carried out under this part; and
``(4)(A) conducting an evaluation of the projects carried
out by eligible entities under this part;
``(B) using the results of the evaluation to collect and
compile information on best practices and models for such
projects; and
``(C) disseminating widely the results of the evaluation.
``SEC. 162A. SUBGRANTS TO ELIGIBLE ENTITIES.
``(a) Subgrants.--
``(1) In general.--A State that receives a grant under
section 162 shall use the grant funds to award subgrants on a
competitive basis to eligible entities to pay for the Federal
share of the cost of carrying out community service projects.
``(2) Periods of subgrants.--The State shall award the
subgrants for periods of 3 years.
``(3) Amounts of subgrants.--The State shall award such a
subgrant to an eligible entity for a project in a sum equal
to--
``(A) the amount obtained by multiplying $500 and the
number of youth who will participate in the project (to be
used for project expenses); and
``(B) unless the Chief Executive Officer decides to deposit
funds for educational awards in the National Service Trust,
as described in section 162(a)(2)(B), an additional amount
equal to the amount described in subparagraph (A) (to be used
for educational awards).
``(b) Applications.--To be eligible to receive a subgrant
under this section for a project, an entity shall submit an
application to the State Commission at such time, in such
manner, and containing such information as the State
Commission may require, including information that--
``(1) designates the community in which the entity will
carry out the project, which community may be the service
area of an elementary school or secondary school, a school
district, a city, town, village, or other locality, a county,
the area in which a public housing project is located, a
neighborhood, or another geographically or politically
designated area;
``(2) describes the manner in which the entity will--
``(A) engage a substantial portion of the youth in the
designated community;
``(B) engage a variety of entities and individuals, such as
youth organizations, elementary schools or secondary schools,
elected officials, organizations offering summer camps, civic
groups, nonprofit organizations, and other entities within
the designated community to offer a variety of summer service
opportunities as part of the project;
``(C) ensure that the youth participating in the project
engage in service-learning;
``(D) engage as volunteers in the project business, civic,
or community organizations or individuals, which may include
older individuals, volunteers in the National Senior
Volunteer Corps established under title II of the Domestic
Volunteer Service Act of 1973 (42 U.S.C. 5000 et seq.),
participants in the school-based and community-based service-
learning programs carried out under parts I and II of
subtitle B, participants in the AmeriCorps program carried
out under subtitle C, or students enrolled in secondary
schools or institutions of higher education;
``(E) ensure that youth participating in the project
provide at least 100 hours of community service for the
project;
``(F) recruit eligible youth to participate in the project;
``(G) recruit service sponsors for community service
activities carried out through the project, if the eligible
entity intends to enter into an arrangement with such
sponsors to provide project placements for the youth;
``(H) promote leadership development and build an ethic of
civic responsibility among the youth;
``(I) provide team-oriented, adult-supervised experiences
through the project;
``(J) conduct opening and closing ceremonies honoring
participants in the project;
``(K) involve youth who are participating in the project in
the design and planning of the project; and
``(L) provide training, which may include life skills,
financial education, and employment training, in addition to
training concerning the specific community service to be
provided through the project, for the youth; and
``(3)(A) specifies project outcome objectives relating to
youth development or education achievement, community
strengthening, and community improvement;
``(B) describes how the eligible entity will establish
annual benchmarks for the objectives, and annually conduct an
evaluation to measure progress toward the benchmarks; and
``(C) provides an assurance that the eligible entity will
annually make the results of such evaluation available to the
State.
``(c) Continued Eligibility.--To be eligible to receive
funds under this section for a second or subsequent year of a
subgrant period, an entity shall demonstrate that the entity
has met the annual benchmarks for the objectives described in
subsection (b)(3).
``(d) Selection of Subgrant Recipients.--In awarding
subgrants under this section, the State shall ensure that
projects are funded in a variety of geographic areas,
including urban and rural areas.
``SEC. 162B. SUMMER OF SERVICE PROJECTS.
``(a) Use of Funds.--
``(1) In general.--An eligible entity that receives a
subgrant under section 162A shall use the subgrant funds to
carry out a community service project.
``(2) Specific uses.--The eligible entity may use the
subgrant funds to pay for--
``(A) hiring staff to administer the project;
``(B) developing or acquiring service-learning curricula
for the project, to be integrated into academic programs,
including making modifications for students who are
individuals with disabilities and students with limited
English proficiency;
``(C) forming local partnerships to develop and offer a
variety of service-learning programs for local youth
participating in the project;
``(D) establishing benchmarks, conducting evaluations, and
making evaluation results available, as described in
subparagraphs (B) and (C) of section 162A(b)(3);
``(E) conducting outreach and dissemination of program-
related information to ensure the broadest possible
involvement of local eligible youth and community partners in
the project;
``(F) conducting ceremonies as described in section
162A(b)(2)(J);
``(G) carrying out basic implementation of the community
service project; and
``(H) carrying out planning activities, during an initial 6
to 9 months of the subgrant period.
``(3) Non-federal share.--An eligible entity that receives
a subgrant under section 162A shall provide the non-Federal
share of the costs described in section 162A(a)(1) from
private or public sources other than the subgrant funds. The
sources may include fees charged to the parents of the youth
participating in the community service project involved and
determined on a sliding scale based on income.
``(b) Service Projects.--
``(1) Eligible service categories.--The eligible entity may
use the subgrant funds to carry out a community service
project to meet unmet human, educational, environmental, or
public safety needs.
``(2) Ineligible service categories.--The eligible entity
may not use the subgrant funds to carry out a service project
in which participants perform service described in section
132(a).
``(c) Period of Service Projects.--The eligible entity--
``(1) shall carry out the community service project funded
under section 162A during a period, the majority of which
occurs in the months of June, July, and August; and
``(2) may carry out the project in conjunction with a
related after school or in-school service-learning project
operated during the remaining months of the year.
``(d) Educational Award.--
``(1) Eligibility.--Each eligible youth who provides at
least 100 hours of community service for a project carried
out under this part shall be eligible to receive an
educational award of not more than $500. An eligible youth
may participate in more than 1 such project but shall not
receive in excess of $1,000 in total for such participation.
``(2) Disbursements by eligible entity.--If the Chief
Executive Officer decides under section 162(a)(2)(A) to
include educational award funds in subgrants under this part,
the eligible entity carrying out the project shall--
``(A) disburse an educational award described in paragraph
(1) in accordance with regulations issued by the Chief
Executive Officer, which--
``(i) may permit disbursal of the award to the parents of
the youth that have established a qualified tuition program
account under section 529 of the Internal Revenue Code of
1986, for deposit into the account; but
``(ii) shall not otherwise permit disbursal of the award to
the parents; or
``(B) enter into a contract with a private sector
organization to hold the educational award funds and disburse
the educational award as described in subparagraph (A).
``(3) Disbursements by chief executive officer.--If the
Chief Executive Officer decides under section 162(a)(2)(B) to
reserve
[[Page S4609]]
educational award funds, the Chief Executive Officer shall
disburse the educational award as described in paragraph
(2)(A).
``SEC. 162C. SUPPLEMENTAL GRANTS.
``(a) In General.--The Chief Executive Officer may award a
supplemental grant to an eligible entity that demonstrates
the matters described in subsection (b), to assist the entity
in carrying out a community service project in accordance
with the requirements of this part, as determined appropriate
by the Chief Executive Officer.
``(b) Application.--To be eligible to receive a
supplemental grant under subsection (a), an entity shall
submit an application to the Chief Executive Officer, at such
time, in such manner, and containing such information as the
Chief Executive Officer may require, including information
demonstrating--
``(1) that the entity received a subgrant under section
162A for a community service project; and
``(2) that the entity would be unable to carry out the
project without substantial hardship unless the entity
received a supplemental grant under subsection (a).
``(c) Amount of Grant.--The Chief Executive Officer shall
award such a grant to an eligible entity for the project in
the amount obtained by multiplying $250 and the number of
youth who will participate in the project (to be used for
project expenses).
``SEC. 162D. INDIAN TRIBES AND TERRITORIES.
``From the funds made available to carry out this part
under section 165(b)(2)(A) for any fiscal year, the Chief
Executive Officer shall reserve an amount of not more than 3
percent for payments to Indian tribes, the United States
Virgin Islands, Guam, American Samoa, and the Commonwealth of
the Northern Mariana Islands, to be used in accordance with
the requirements of this part, as determined appropriate by
the Chief Executive Officer.
``PART II--SUMMER OF SERVICE NATIONAL DIRECT GRANT PROGRAM
``SEC. 163. NATIONAL DIRECT GRANTS.
``(a) Grants.--
``(1) In general.--The Chief Executive Officer shall award
grants on a competitive basis to public or private
organizations (referred to individually in this part as an
`organization')--
``(A) to carry out quality assurance activities under
subsection (d); and
``(B) to pay for the Federal share of the cost of carrying
out a community service program--
``(i) in a State where the State Commission does not apply
for funding under part I; or
``(ii) in multiple States.
``(2) Funds for educational awards.--The Chief Executive
Officer shall decide whether funds appropriated to carry out
this part and available for educational awards (referred to
in this part as `educational award funds') shall be--
``(A) included in the funds for such grants to
organizations and any subgrants to local providers; or
``(B) reserved by the Chief Executive Officer, deposited in
the National Service Trust for educational awards, and
disbursed according to paragraphs (1) and (3) of section
163B(d).
``(3) Periods of grants.--The Chief Executive Officer shall
award the grants for periods of 3 years.
``(4) Amounts of grants.--The Chief Executive Officer shall
award such a grant to an organization for a program in a sum
equal to--
``(A) the amount obtained by multiplying $500 and the
number of youth who will participate in the program (to be
used for program expenses);
``(B) unless the Chief Executive Officer decides to deposit
funds for educational awards in the National Service Trust,
as described in paragraph (2)(B), an additional amount equal
to the amount described in subparagraph (A) (to be used for
educational awards); and
``(C) an amount sufficient to provide for the reservation
for quality assurance activities described in subsection (d).
``(b) National Direct Applications.--To be eligible to
receive a grant under this section for a community service
program, an organization shall submit an application to the
Chief Executive Officer at such time, in such manner, and
containing such information as the Chief Executive Officer
may require, including information that--
``(1) describes how the organization will use funds
received under this part, including funds reserved for
quality assurance activities under subsection (d);
``(2)(A) describes the procedures and criteria the
organization will use for reviewing applications and awarding
subgrants on a competitive basis under section 163A to local
providers for projects, including how the organization will
give priority to a provider that, with respect to each
project described in the application--
``(i) offers a quality plan for or has an established track
record of carrying out the activities described in the
provider's application;
``(ii) has a leadership position in the community from
which the youth participating in the project will be drawn;
``(iii) proposes a project that focuses on service by the
participants during the transition year before high school;
``(iv) plans to ensure that at least 50 percent of the
participants are low-income eligible youth;
``(v) proposes a project that encourages or enables youth
to continue participating in community service throughout the
school year;
``(vi) plans to involve the participants in the design and
operation of the project, including involving the
participants in conducting a needs-based assessment of
community needs;
``(vii) proposes a project that involves youth of different
ages, races, sexes, ethnic groups, religions, disability
categories, or economic backgrounds serving together; and
``(viii) proposes a project that provides high quality
service-learning experiences; or
``(B) if the organization will carry out the community
service program directly, demonstrates that the organization
meets the requirements of clauses (i) through (viii) of
subparagraph (A) with respect to each project described in
the application;
``(3) describes the steps the organization will take,
including the provision of ongoing technical assistance
described in subsection (d)(2)) and training, to ensure that
projects funded under this part will implement effective
strategies; and
``(4) describes how the organization will evaluate the
projects funded under this part, which shall include, at a
minimum--
``(A) a description of the objectives and benchmarks that
will be used to evaluate the projects; and
``(B) a description of how the organization will
disseminate widely the results of the evaluations, as
described in subsection (d)(3)(C).
``(c) Applicant Review.--
``(1) Selection criteria.--The Chief Executive Officer
shall evaluate applications for grants under this section
based on the quality, innovation, replicability, and
sustainability of the programs proposed by the applicants.
``(2) Review panels.--The Chief Executive Officer shall
employ the review panels established under section 165A in
reviewing the applications.
``(3) Notification of applicants.--If the Chief Executive
Officer rejects an application submitted under this section,
the Chief Executive Officer shall promptly notify the
applicant of the reasons for the rejection of the
application.
``(4) Resubmission and reconsideration.--The Chief
Executive Officer shall provide an applicant notified of
rejection with a reasonable opportunity to revise and
resubmit the application. At the request of the applicant,
the Chief Executive Officer shall provide technical
assistance to the applicant as part of the resubmission
process. The Chief Executive Officer shall promptly
reconsider an application resubmitted under this paragraph.
``(d) Quality Assurance Activities.--An organization that
receives a grant under this section may reserve up to 5
percent of the grant funds for quality assurance activities,
which may include--
``(1) hiring staff to administer the program carried out
under this part by the organization;
``(2) providing technical assistance, including technical
assistance concerning the professional development and
training of personnel, to local providers that receive
subgrants under section 163A; and
``(3)(A) conducting an evaluation of the projects carried
out by local providers of the organization under this part;
``(B) using the results of the evaluation to collect and
compile information on best practices and models for such
projects; and
``(C) disseminating widely the results of the evaluation.
``SEC. 163A. SUBGRANTS TO LOCAL PROVIDERS.
``(a) Subgrants.--
``(1) In general.--An organization that receives a grant
under section 163 may use the grant funds to award subgrants
on a competitive basis to local providers to pay for the
Federal share of the cost of carrying out community service
projects.
``(2) Periods of subgrants.--The organization shall award
the subgrants for periods of 3 years.
``(3) Amounts of subgrants.--The organization shall award
such a subgrant to a local provider for a project in a sum
equal to--
``(A) the amount obtained by multiplying $500 and the
number of youth who will participate in the project (to be
used for project expenses); and
``(B) unless the Chief Executive Officer decides to deposit
funds for educational awards in the National Service Trust,
as described in section 163(a)(2)(B), an additional amount
equal to the amount described in subparagraph (A) (to be used
for educational awards).
``(b) Local Provider Application.--To be eligible to
receive a subgrant under this section, a local provider shall
submit an application to the organization at such time, in
such manner, and containing such information as the
organization may require, including information that--
``(1) designates the communities in which the local
provider will carry out projects under the subgrant, each of
which communities may be the service area of an elementary
school or secondary school, a school district, a city, town,
village, or other locality, a county, the area in which a
public housing project is located, a neighborhood, or another
geographically or politically designated area;
``(2) for each project described in such application,
describes the manner in which the local provider will--
[[Page S4610]]
``(A) engage a substantial portion of the youth in the
designated community involved;
``(B) engage a variety of entities and individuals, such as
youth organizations, elementary schools or secondary schools,
elected officials, organizations offering summer camps, civic
groups, nonprofit organizations, and other entities within
the designated community to offer a variety of summer service
opportunities as part of the project;
``(C) ensure that the youth participating in the project
engage in service-learning;
``(D) engage as volunteers in the project business, civic,
or community organizations or individuals, which may include
older individuals, volunteers in the National Senior
Volunteer Corps established under title II of the Domestic
Volunteer Service Act of 1973 (42 U.S.C. 5000 et seq.),
participants in the school-based and community-based service-
learning programs carried out under parts I and II of
subtitle B, participants in the AmeriCorps program carried
out under subtitle C, or students enrolled in secondary
schools or institutions of higher education;
``(E) ensure that youth participating in the project
provide at least 100 hours of community service for the
project;
``(F) recruit eligible youth to participate in the project;
``(G) recruit service sponsors for community service
activities carried out through the project, if the local
provider intends to enter into an arrangement with such
sponsors to provide project placements for the youth;
``(H) promote leadership development and build an ethic of
civic responsibility among the youth;
``(I) provide team-oriented, adult-supervised experiences
through the project;
``(J) conduct opening and closing ceremonies honoring
participants in the project;
``(K) involve youth who are participating in the project in
the design and planning of the project; and
``(L) provide training, which may include life skills,
financial education, and employment training, in addition to
training concerning the specific community service to be
provided through the project, for the youth; and
``(3)(A) specifies project outcome objectives relating to
youth development or education achievement, community
strengthening, and community improvement;
``(B) describes how the local provider will establish
annual benchmarks for the objectives, and annually conduct an
evaluation to measure progress toward the benchmarks; and
``(C) provides an assurance that the local provider will
annually make the results of such evaluation available to the
organization.
``(c) Continued Eligibility.--To be eligible to receive
funds under this section for a second or subsequent year of a
subgrant period, a local provider shall demonstrate that all
the projects for which the subgrant was awarded met the
annual benchmarks for the objectives described in subsection
(b)(3).
``(d) Selection of Subgrant Recipients.--In awarding
subgrants under this section, the organization shall ensure
that projects are funded in a variety of geographic areas,
including urban and rural areas.
``SEC. 163B. SUMMER OF SERVICE PROJECTS.
``(a) Use of Funds.--
``(1) In general.--A local provider that receives a
subgrant under section 163A shall use the subgrant funds to
carry out a community service project.
``(2) Specific uses.--The local provider may use the
subgrant funds, to pay for--
``(A) hiring staff to administer the project;
``(B) developing or acquiring service-learning curricula
for the project, to be integrated into academic programs,
including making modifications for students who are
individuals with disabilities and students with limited
English proficiency;
``(C) forming local partnerships to develop and offer a
variety of service-learning programs for local youth
participating in the project;
``(D) establishing benchmarks, conducting evaluations, and
making evaluation results available, as described in
subparagraphs (B) and (C) of section 163A(b)(3);
``(E) conducting outreach and dissemination of program-
related information to ensure the broadest possible
involvement of local eligible youth and community partners in
the project;
``(F) conducting ceremonies as described in section
163A(b)(2)(J);
``(G) carrying out basic implementation of the community
service project; and
``(H) carrying out planning activities, during an initial 6
to 9 months of the grant period.
``(3) Non-federal share.--A local provider that receives a
subgrant under section 163A shall provide the non-Federal
share of the cost described in section 163A(a)(1) from
private or public sources other than the subgrant funds. The
sources may include fees charged to the parents of the youth
participating in the community service project involved and
determined on a sliding scale based on income.
``(b) Service Projects.--
``(1) Eligible service categories.--The local provider may
use the subgrant funds to carry out a community service
project to meet unmet human, educational, environmental, or
public safety needs.
``(2) Ineligible service categories.--The local provider
may not use the subgrant funds to carry out a service project
in which participants perform service described in section
132(a).
``(c) Period of Service Projects.--The local provider--
``(1) shall carry out the community service project funded
under section 163A during a period, the majority of which
occurs in the months of June, July, and August; and
``(2) may carry out the project in conjunction with a
related after school or in-school service-learning project
operated during the remaining months of the year.
``(d) Educational Award.--
``(1) Eligibility.--Each eligible youth who provides at
least 100 hours of community service for a project carried
out under this part shall be eligible to receive an
educational award of not more than $500. An eligible youth
may participate in more than 1 such project but shall not
receive in excess of $1,000 in total for such participation.
``(2) Disbursements by local provider.--If the Chief
Executive Officer decides under section 163(a)(2)(A) to
include educational award funds in subgrants under this part,
the local provider carrying out the project shall--
``(A) disburse an educational award described in paragraph
(1) in accordance with regulations issued by the Chief
Executive Officer, which--
``(i) may permit disbursal of the award to the parents of
the youth that have established a qualified tuition program
account under section 529 of the Internal Revenue Code of
1986, for deposit into the account; but
``(ii) shall not otherwise permit disbursal of the award to
the parents; or
``(B) enter into a contract with a private sector
organization to hold the educational award funds and disburse
the educational award as described in subparagraph (A).
``(3) Disbursements by chief executive officer.--If the
Chief Executive Officer decides under section 163(a)(2)(B) to
reserve educational award funds, the Chief Executive Officer
shall disburse the educational award as described in
paragraph (2)(A).
``(e) Application of Section.--References in this section
to local providers, with respect to the use of subgrant funds
received under section 163A, apply equally to organizations
that carry out community service projects directly, with
respect to the use of grant funds received under section 163.
``SEC. 163C. SUPPLEMENTAL GRANTS.
``(a) In General.--The Chief Executive Officer may award a
supplemental grant to a local provider that demonstrates the
matters described in subsection (b), to assist the provider
in carrying out a community service project in accordance
with the requirements of this part, as determined appropriate
by the Chief Executive Officer.
``(b) Application.--To be eligible to receive a
supplemental grant under subsection (a), a provider shall
submit an application to the Chief Executive Officer, at such
time, in such manner, and containing such information as the
Chief Executive Officer may require, including information
demonstrating--
``(1) that the provider received a subgrant under section
163A for a community service project; and
``(2) that the provider would be unable to carry out the
project without substantial hardship unless the provider
received a supplemental grant under subsection (a).
``(c) Amount of Grant.--The Chief Executive Officer shall
award such a grant to a local provider for the project in the
amount obtained by multiplying $250 and the number of youth
who will participate in the project (to be used for project
expenses).
``PART III--SUMMER OF SERVICE NATIONAL ACTIVITIES
``SEC. 164. NATIONAL ACTIVITIES.
``(a) National Quality and Outreach Activities.--The Chief
Executive Officer may use funds reserved under section
165(b)(1), either directly or through grants and contracts,
to--
``(1) provide technical assistance and training to
recipients of grants and subgrants under parts I and II;
``(2) conduct outreach and dissemination of program-related
information to ensure the broadest possible involvement of
States, eligible entities, organizations, local providers,
and eligible youth in programs carried out under parts I and
II; and
``(3) to carry out other activities designed to improve the
quality of programs carried out under parts I and II.
``(b) National Evaluation.--
``(1) Reservation.--For each fiscal year, the Chief
Executive Officer shall reserve not more than the greater of
$500,000, or 1 percent, of the funds described in subsection
(a) for the purposes described in paragraph (2).
``(2) Evaluation.--The Chief Executive Officer shall use
the reserved funds--
``(A) to arrange for an independent evaluation of the
programs carried out under parts I and II, to be conducted in
the second and third years in which the programs are
implemented; and
``(B) using the results of the evaluation, to collect and
compile information on models and best practices for such
programs; and
``(C) to disseminate widely the results of the evaluation.
``(3) Report.--The Chief Executive Officer shall annually
submit to the Committee on Health, Education, Labor, and
Pensions of the Senate and the Committee on Education and the
Workforce of the House of Representatives, a report
concerning the results
[[Page S4611]]
of the evaluations conducted under paragraph (2). Such
reports shall also contain information on models of best
practices and any other findings or recommendations developed
by the Chief Executive Officer based on such evaluations.
Such reports shall be made available to the general public.
``PART IV--GENERAL PROVISIONS
``SEC. 165. AUTHORIZATION OF APPROPRIATIONS AND AVAILABILITY.
``(a) Authorization of Appropriations.--There are
authorized to be appropriated to carry out this subtitle
$100,000,000 for fiscal year 2008 and such sums as may be
necessary for each subsequent fiscal year.
``(b) Availability.--Of the funds appropriated under
subsection (a) for a fiscal year, the Chief Executive
Officer--
``(1) shall reserve not more than 4 percent to carry out
activities under part III (relating to national activities);
and
``(2) from the remainder of such funds, shall make
available--
``(A) a portion equal to 66\2/3\ percent of such funds for
programs carried out under part I (relating to the State
grant program), including programs carried out under section
162D; and
``(B) a portion equal to 33\1/3\ percent of such funds for
programs carried out under part II (relating to the national
direct grant program).
``(c) Reallocation.--If the Chief Executive Officer
determines that funds from the portion described in
subsection (b)(2)(A) will not be needed to carry out programs
under part I for a fiscal year, the Chief Executive Officer
shall make the funds available for programs under part II for
that fiscal year.
``SEC. 165A. REVIEW PANELS.
``The Chief Executive Officer shall establish panels of
experts for the purpose of reviewing applications submitted
under sections 162, 162C, 162D, and 163.
``SEC. 165B. CONSTRUCTION.
``An individual participating in service in a program
described in this subtitle shall not be considered to be an
employee engaged in employment for purposes of the Fair Labor
Standards Act of 1938 (29 U.S.C. 201 et seq.).''.
SEC. 4. CONFORMING AMENDMENTS.
(a) Redesignation of Subtitles.--
(1) Section 118(a) of the National and Community Service
Act of 1990 (42 U.S.C. 12551(a)) is amended by striking
``subtitle H'' and inserting ``subtitle I''.
(2) Section 122(a)(2) of such Act (42 U.S.C. 12572(a)(2))
is amended by striking ``subtitle I'' and inserting
``subtitle J''.
(3) Section 193A(f)(1) of such Act (42 U.S.C. 12651d(f)(1))
is amended by striking ``subtitles C and I'' and inserting
``subtitles C and J''.
(4) Section 501(a)(2) of such Act (42 U.S.C. 12681(a)(2))
is amended--
(A) in the paragraph heading, by striking ``Subtitles c, d,
and h'' and inserting ``Subtitles c, d, and i'';
(B) in subparagraph (A), by striking ``subtitles C and H''
and inserting ``subtitles C and I''; and
(C) in subparagraph (B), by striking ``subtitle H'' and
inserting ``subtitle I''.
(b) Redesignation of Sections.--
(1) Section 155(d)(3) of such Act (42 U.S.C. 12615(d)(3))
is amended by striking ``section 162(a)(3)'' and inserting
``section 159C(a)(3)''.
(2) Section 156(d) of such Act (42 U.S.C. 12616(d)) is
amended by striking ``section 162(a)(3)'' and inserting
``section 159C(a)(3)''.
(3) Section 159(c) of such Act (42 U.S.C. 12619(c)) is
amended--
(A) in paragraph (2)(C)(i), by striking ``section
162(a)(2)'' and inserting ``section 159C(a)(2)''; and
(B) in paragraph (3), by striking ``section 162(a)(2)(A)''
and inserting ``section 159C(a)(2)(A)''.
(4) Section 159B(b)(1)(B) of such Act (as redesignated by
section 3(2)) is amended by striking ``section 162(a)(3)''
and inserting ``section 159C(a)(3)''.
(c) Relationship to National Service Educational Award
Provisions.--
(1) National service trust.--Section 145 of the National
and Community Service Act of 1990 (42 U.S.C. 12601) is
amended--
(A) in subsection (a)--
(i) in paragraph (2), by striking ``and'' at the end;
(ii) in paragraph (3), by striking the period and inserting
``, other than interest or proceeds described in paragraph
(4)(B); and''; and
(iii) by adding at the end the following:
``(4)(A) any amounts deposited in the Trust under subtitle
F; and
``(B) the interest on, and proceeds from the sale or
redemption of, any obligations held by the Trust for a
program carried out under subtitle F.''; and
(B) in subsection (c), by inserting ``(other than any
amounts deposited in the Trust under subtitle F)'' after
``Amounts in the Trust''.
(2) Availability of amounts in national service trust.--
Section 148(a) of the National and Community Service Act of
1990 (42 U.S.C. 12604(a)) is amended by inserting ``(other
than any amounts deposited in the Trust under subtitle F)''
after ``Amounts in the Trust''.
______
By Ms. COLLINS:
S. 1131. A bill to amend the Cooperative Forestry Assistance Act of
1978 to establish a program to provide assistance to States and
nonprofit organizations to preserve suburban forest land and open space
and contain suburban sprawl; to the Committee on Agriculture,
Nutrition, and Forestry.
Ms. COLLINS. Mr. President, the people of Maine have always been
faithful stewards of the forest because we understand its tremendous
value to our economy and to our way of life. From the vast tracts of
undeveloped land in the north to the small woodlots in the south,
forest land has helped to shape the character of our entire State.
While our commitment to stewardship has preserved the forest for
generations, there is a threat to Maine's working landscape that
requires a fresh approach. This threat is suburban sprawl, which has
already consumed tens of thousands of acres of forest land in southern
Maine. Sprawl occurs because the economic value of forest or farm land
cannot compete with the value of developed land.
Sprawl threatens our environment and our quality of life. It destroys
eco-systems, increasing the risk of flooding and other environmental
hazards. It burdens the infrastructure of the affected communities,
increases traffic on neighborhood streets, and wastes taxpayer money.
Sprawl causes the unnecessary fragmentation of open space that reduces
the economic viability of the remaining working forests.
In the State of Maine, suburban sprawl has already consumed tens of
thousands of acres of forest and farm land. The problem is particularly
acute in southern Maine where an 108 percent increase in urbanized land
over the past two decades has resulted in the labeling of greater
Portland as the ``sprawl capital of the Northeast.''
I am particularly alarmed by the amount of working forest and farm
land and open space in southern and coastal Maine that has given way to
strip malls and cul-de-sacs. Once these forests, farms, and meadows are
lost to development, they are lost forever.
Maine is trying to respond to this challenge. The people of Maine
continue to contribute their time and money to preserve important lands
and to support our State's 88 land trusts. It is time for the Federal
Government to help support these State and community-based efforts.
For these reasons, I have introduced the Suburban and Community
Forestry and Open Space Program Act. This legislation, which was
drafted with the advice of land owners and conservation groups,
establishes a $50 million grant program within the U.S. Forest Service
to support locally driven land conservation projects that preserve
working forests. Local government and nonprofit organizations would
compete for funds to purchase land or access to land to protect working
landscapes threatened by development.
Projects funded under this initiative must be targeted at lands
located in parts of the country that are threatened by sprawl. In
addition, this legislation requires that Federal grant funds be matched
dollar-for-dollar by State, local, or private resources.
This is a market-driven program that relies upon market forces rather
than government regulations to achieve its objectives. Rather than
preserving our working forests, farmland and open spaces by zoning or
other government regulation, with this program we will provide the
resources to allow a landowner who wishes to keep his or her land as a
working woodlot to do so.
My legislation also protects the rights of property owners with the
inclusion of a ``willing-seller'' provision, which requires the consent
of a landowner if a parcel of land is to participate in the program.
The $50 million that would be authorized by my bill would help
achieve stewardship objectives: First, this bill would help prevent
forest fragmentation and preserve working forests, helping to maintain
the supply of timber that fuels Maine's most significant industry.
Second, these resources would be a valuable tool for communities that
are struggling to manage growth and prevent sprawl.
Understanding that land ownership issues differ in other parts of the
Nation, I have included a geographic limitation in this bill. This
limitation would exempt any State where the Federal Government owns 25
percent or more of that State's land from the Suburban and Community
Forestry and Open Space Program. With the 25 percent limitation, a
figure used in previous bills, the twelve States with the highest
percentage of federally owned land would not be eligible to participate
in this new program. Those
[[Page S4612]]
States, however, who are struggling most with the loss of working
landscapes would be authorized to receive Federal assistance in their
efforts to combat sprawl.
Third, the bill would help to preserve open space and family farms.
Currently, if the town of Gorham, ME, or another community trying to
cope with the effects of sprawl turned to the Federal Government for
assistance, none would be found. My bill will change that by making the
Federal Government an active partner in preserving forest and farm land
and managing sprawl, while leaving decision-making at the State and
local level where it belongs.
The Suburban and Community Forestry and Open Space Program Act has
had a successful history in the Senate. In 2002, this legislation was
included in the forestry title of the Senate approved version of the
Farm Bill. Unfortunately, the forestry title was stripped out of the
Farm Bill conference report. And again, in 2003, this legislation
passed the Senate. This time, during consideration of the Healthy
Forests Restoration Act. Unfortunately, this provision was removed from
the Healthy Forests Restoration Act conference report. This new
Congress and the reauthorization of the Farm Bill provide an excellent
opportunity to enact this important legislation.
There is great work being done on the local level to protect working
landscapes for the next generation. By enacting the Suburban and
Community Forestry and Open Space Act, Congress can provide an
additional avenue of support for these conservation initiatives, help
prevent sprawl, and help sustain the vitality of natural resource-based
industries.
______
By Ms. MURKOWSKI:
S. 1132. A bill to amend the Internal Revenue Code of 1986 to allow
Indian tribes to receive charitable contributions of apparently
wholesome food; to the Committee on Finance.
Ms. MURKOWSKI. Mr. President, I rise to introduce a bill that will
help increase the amount of food donations going to American Indians
and Alaska Natives nationwide.
Unfortunately, the poverty rate among American Indians and Alaska
Natives continues to be high. Specifically, the poverty rate for our
Nation's American Indians and Alaska Natives is over three times that
of non-Hispanic whites, according to the U.S. Census Bureau. Not only
do natives face greater challenges in securing basic household
necessities, but in securing food as well.
According to a 2005 U.S. Department of Agriculture report, 35.1
million Americans face challenges in getting enough food to eat. This
includes 12.4 million children. Of these statistics, Natives constitute
a disproportionate number due to the higher poverty rate among this
group.
And yet, charitable organizations that provide hunger relief are
unable to meet the basic needs of Natives due to an oversight in the
federal tax code. Section 170(e)(3) of the Internal Revenue Code allows
corporations to take an enhanced tax deduction for donations of food;
however, the food must be distributed to 501(c)(3) nonprofit
organizations, such as food banks. Nonprofit organizations cannot then
transfer such donations to tribes. Although many donations to tribes
are tax deductible under section 7871 of the Internal Revenue Code,
tribes are not among the organizations listed under Section 501(c)(3)
of the Internal Revenue Code. To clarify, section 170(e)(3) does not
allow tribes to be eligible recipients of corporate food donations to
nonprofit organizations since they are not listed under Section
501(c)(3) as an eligible entity.
With this legislation, I intend to make a simple correction to the
tax code that clearly indicates that tribes are eligible recipients of
food donated under section 170(e)(3) of the Internal Revenue Code. This
correction is long overdue and would remedy an egregious inequity in
the Federal tax code that affects natives nationwide.
Please allow me to provide a few examples of how this legislation
could foster positive change. In Alaska, approximately half of the food
donated to the Food Bank of Alaska from corporations could go to tribes
throughout Alaska. Much of this food would go to villages that are only
accessible by air or water. In South Dakota, roughly 30 percent of the
food the Community Food Banks of South Dakota distributes could go to
reservations. In North Dakota, the amount of food donated to the Great
Plains Food Bank could double if this legislation were enacted. The
Montana Food Bank Network projects that food donations could increase
by 16 percent. A food bank based in Albuquerque, NM, estimates that
their food donations could triple in the first year alone.
It is imperative that we address this important issue expeditiously.
The health and well-being of low income American Indians and Alaska
Natives across the Nation is at stake.
I ask unanimous consent that the text of this 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. 1132
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. CHARITABLE CONTRIBUTIONS OF APPARENTLY WHOLESOME
FOOD TO INDIAN TRIBES.
(a) In General.--Section 170(e)(3) of the Internal Revenue
Code of 1986 (relating to special rule for contributions of
inventory and other property) is amended--
(1) by redesignating subparagraph (E) as subparagraph (F);
and
(2) by inserting after subparagraph (D) the following new
subparagraph:
``(E) Special rule for indian tribes.--
``(i) In general.--For purposes of this paragraph, an
Indian tribe (as defined in section 7871(c)(3)(E)(ii)) shall
be treated as an organization eligible to be a donee under
subparagraph (A) with respect to apparently wholesome food
(as defined in section 22(b)(2) of the Bill Emerson Good
Samaritan Food Donation Act (42 U.S.C. 1791(b)(2)) (as in
effect on the date of the enactment of this subparagraph))
only.
``(ii) Use of property.--For purposes of subparagraph
(A)(i), if the use of the apparently wholesome food donated
is related to the exercise of an essential governmental
function of the Indian tribal government (within the meaning
of section 7871), such use shall be treated as related to the
purpose or function constituting the basis for the
organization's exemption.''.
(b) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2007.
______
By Mr. AKAKA (for himself, Mr. Bingaman, and Mr. Durbin):
S. 1133. A bill to provide additional protections for recipients of
the earned income tax credit; to the Committee on Finance.
Mr. AKAKA. Mr. President, today, I am reintroducing the Taxpayer
Abuse Prevention Act. Earned income tax credit (EITC) benefits intended
for working families are significantly reduced by the use of refund
anticipation loans (RALs), which typically carry three or four digit
interest rates. In 2005, EITC filers accounted for more than half of
the refund anticipation loans issued despite being only 17 percent of
the taxpayer population. EITC recipients lost an estimated $649 million
in loan fees plus application or documentation fees in 2005. The EITC
is intended to help working families meet their food, clothing,
housing, transportation, and education needs. Working families cannot
afford to lose a significant portion of their EITC funds by expensive,
short-term, RALs.
The interest rates and fees charged on RALs are not justified because
of the short length of time that these loans are outstanding and the
minimal risk they present. These loans carry little risk because of the
Debt Indicator program.
The Debt Indicator (DI) is a service provided by the Internal Revenue
Service (IRS) that informs the lender whether or not an applicant owes
Federal or State taxes, child support, student loans, or other
government obligations, which assists tax preparers in ascertaining the
ability of applicants to obtain their full refund so that the RAL is
repaid. The Department of the Treasury should not be facilitating these
predatory loans that allow tax preparers to reap outrageous profits by
exploiting working families.
Unfortunately too many working families are susceptible to predatory
lending because they are left out of the financial mainstream. Between
25 and 56 million adults are unbanked, or not using mainstream, insured
financial institutions. The unbanked rely on alternative financial
service providers to obtain cash from checks, pay bills,
[[Page S4613]]
send remittances, utilize payday loans, and obtain credit. Many of the
unbanked are low-and moderate-income families that can ill afford to
have their earnings unnecessarily diminished by high-cost and often
predatory financial services. In addition, the unbanked are unable to
save securely to prepare for the loss of a job, a family illness, a
down payment on a first home, or education expenses.
My legislation will protect consumers against predatory loans, reduce
the involvement of the Department of the Treasury in facilitating the
exploitation of taxpayers, and expand access to opportunities for
saving and lending at mainstream financial services.
My bill prohibits refund anticipation loans that utilize EITC
benefits. Other Federal benefits, such as Social Security, have similar
restrictions to ensure that the beneficiaries receive the intended
benefit.
My bill also limits several of the objectionable practices of RAL
providers. It will prohibit lenders from using tax refunds to collect
outstanding obligations for previous RALs. In addition, mandatory
arbitration clauses for RALs that utilize federal tax refunds would be
prohibited to ensure that consumers have the ability to take future
legal action if necessary.
It is troubling that the Department of the Treasury facilitates
refund anticipation loans. In 1995, the use of the DI was suspended
because of massive fraud in e-filed returns with RALs. The use of the
DI was reinstated in 1999. Use of the Debt Indicator should once again
be stopped. The DI is helping tax preparers make excessive profits from
low- and moderate-income taxpayers who utilize RALs. The IRS should not
aide unscrupulous preparers who take the earned benefit away from low-
income families. My bill terminates the DI program. In addition, this
bill removes the incentive to meet congressionally mandated electronic
filing goals by facilitating the exploitation of taxpayers. My bill
would exclude any electronically filed tax returns resulting in tax
refunds distributed by refund anticipation loans from being counted
towards the goal established by the IRS Restructuring and Reform Act of
1998, which is to have at least 80 percent of all returns filed
electronically by 2007.
My bill also expands access to mainstream financial services.
Electronic Transfer Accounts (ETA) are low-cost accounts at banks and
credit unions intended for recipients of certain federal benefit
payments. Currently, ETAs are provided for recipients of other federal
benefits such as Social Security payments. My bill expands the
eligibility for ETAs to include EITC benefits. These accounts will
allow taxpayers to receive direct deposit refunds into an account
without the need for a refund anticipation loan. Furthermore, my bill
would mandate that low- and moderate-income taxpayers be provided
opportunities to open low-cost accounts at federally insured banks or
credit unions via appropriate tax forms. Providing taxpayers with the
option of opening a bank or credit union account through the use of tax
forms provides an alternative to RALs and immediate access to financial
opportunities found at banks and credit unions.
I want to thank my colleagues, Senators Bingaman and Durbin for
cosponsoring this legislation. I also appreciate the efforts of
Representative Jan Schakowsky who will be reintroducing the companion
legislation in the other body. I ask unanimous consent that the text of
the Taxpayer Abuse Prevention Act be printed in the Record.
I urge my colleagues to support this important legislation that will
restrict predatory RALs and expand access to mainstream financial
services.
There being no objection, the text of the bill was ordered to be
printed in the Record, as follows:
S. 1134
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 ``Taxpayer Abuse Prevention
Act''.
SEC. 2. PREVENTION OF DIVERSION OF EARNED INCOME TAX CREDIT
BENEFITS.
(a) In General.--Section 32 of the Internal Revenue Code of
1986 (relating to earned income tax credit) is amended by
adding at the end the following new subsection:
``(n) Prevention of Diversion of Credit Benefits.--The
right of any individual to any future payment of the credit
under this section shall not be transferable or assignable,
at law or in equity, and such right or any moneys paid or
payable under this section shall not be subject to any
execution, levy, attachment, garnishment, offset, or other
legal process except for any outstanding Federal obligation.
Any waiver of the protections of this subsection shall be
deemed null, void, and of no effect.''.
(b) Effective Date.--The amendment made by this section
shall take effect on the date of the enactment of this Act.
SEC. 3. PROHIBITION ON DEBT COLLECTION OFFSET.
(a) In General.--No person shall, directly or indirectly,
individually or in conjunction or in cooperation with another
person, engage in the collection of an outstanding or
delinquent debt for any creditor or assignee by means of
soliciting the execution of, processing, receiving, or
accepting an application or agreement for a refund
anticipation loan or refund anticipation check that contains
a provision permitting the creditor to repay, by offset or
other means, an outstanding or delinquent debt for that
creditor from the proceeds of the debtor's Federal tax
refund.
(b) Refund Anticipation Loan.--For purposes of subsection
(a), the term ``refund anticipation loan'' means a loan of
money or of any other thing of value to a taxpayer because of
the taxpayer's anticipated receipt of a Federal tax refund.
(c) Effective Date.--This section shall take effect on the
date of the enactment of this Act.
SEC. 4. PROHIBITION OF MANDATORY ARBITRATION.
(a) In General.--Any person that provides a loan to a
taxpayer that is linked to or in anticipation of a Federal
tax refund for the taxpayer may not include mandatory
arbitration of disputes as a condition for providing such a
loan.
(b) Effective Date.--This section shall apply to loans made
after the date of the enactment of this Act.
SEC. 5. TERMINATION OF DEBT INDICATOR PROGRAM.
The Secretary of the Treasury shall terminate the Debt
Indicator program announced in Internal Revenue Service
Notice 99-58.
SEC. 6. DETERMINATION OF ELECTRONIC FILING GOALS.
(a) In General.--Any electronically filed Federal tax
returns, that result in Federal tax refunds that are
distributed by refund anticipation loans, shall not be taken
into account in determining if the goals required under
section 2001(a)(2) of the Restructuring and Reform Act of
1998 that the Internal Revenue Service have at least 80
percent of all such returns filed electronically by 2007 are
achieved.
(b) Refund Anticipation Loan.--For purposes of subsection
(a), the term ``refund anticipation loan'' means a loan of
money or of any other thing of value to a taxpayer because of
the taxpayer's anticipated receipt of a Federal tax refund.
SEC. 7. EXPANSION OF ELIGIBILITY FOR ELECTRONIC TRANSFER
ACCOUNTS.
(a) In General.--The last sentence of section 3332(j) of
title 31, United States Code, is amended by inserting ``other
than any payment under section 32 of such Code'' after
``1986''.
(b) Effective Date.--The amendment made by this section
shall apply to payments made after the date of the enactment
of this Act.
SEC. 8. PROGRAM TO ENCOURAGE THE USE OF THE ADVANCE EARNED
INCOME TAX CREDIT.
(a) In General.--Not later than 6 months after the date of
the enactment of this Act, the Secretary of the Treasury
shall, after consultation with such private, nonprofit, and
governmental entities as the Secretary determines
appropriate, develop and implement a program to encourage the
greater utilization of the advance earned income tax credit.
(b) Reports.--Not later than the date of the implementation
of the program described in subsection (a), and annually
thereafter, the Secretary of the Treasury shall report to the
Committee on Finance of the Senate and the Committee on Ways
and Means of the House of Representatives on the elements of
such program and progress achieved under such program.
(c) Authorization of Appropriations.--There is authorized
to be appropriated such sums as are necessary to carry out
the program described in this section. Any sums so
appropriated shall remain available until expended.
SEC. 9. PROGRAM TO LINK TAXPAYERS WITH DIRECT DEPOSIT
ACCOUNTS AT FEDERALLY INSURED DEPOSITORY
INSTITUTIONS.
(a) Establishment of Program.--Not later than 1 year after
the date of the enactment of this Act, the Secretary of the
Treasury shall enter into cooperative agreements with
federally insured depository institutions to provide low- and
moderate-income taxpayers with the option of establishing
low-cost direct deposit accounts through the use of
appropriate tax forms.
(b) Federally Insured Depository Institution.--For purposes
of this section, the term ``federally insured depository
institution'' means any insured depository institution (as
defined in section 3 of the Federal Deposit Insurance Act (12
U.S.C. 1813)) and any insured credit union (as defined in
section 101 of the Federal Credit Union Act (12 U.S.C.
1752)).
(c) Operation of Program.--In providing for the operation
of the program described in
[[Page S4614]]
subsection (a), the Secretary of the Treasury is authorized--
(1) to consult with such private and nonprofit
organizations and Federal, State, and local agencies as
determined appropriate by the Secretary, and
(2) to promulgate such regulations as necessary to
administer such program.
(d) Authorization of Appropriations.--There is authorized
to be appropriated such sums as are necessary to carry out
the program described in this section. Any sums so
appropriated shall remain available until expended.
______
By Mr. SESSIONS:
S. 1135. A bill to amend chapter 1 of title 9, United States Code, to
establish fair procedures for arbitration clauses in contracts; to the
Committee on the Judiciary.
Mr. SESSIONS. Mr. President, I rise and send to the desk a bill
entitled the ``Fair Arbitration Act of 2007.'' This bill continues the
legislative process that I started several years ago with the
introduction of the ``Consumer and Employee Arbitration Bill of
Rights'' and the ``Arbitration Fairness Act of 2002.'' The purpose of
the Fair Arbitration Act of 2007, like my earlier proposals, is to
improve the Federal Arbitration Act so that it will remain a cost-
effective means of resolving disputes, but will do so in a fair way.
The Fair Arbitration Act will provide procedural protections to
everyone who enters into a contract with an arbitration clause. This
bill ensures that consumers, employees, and small businesses that enter
into contracts covered by the Federal Arbitration Act will have their
disputes resolved in accordance with fundamental principles of due
process, and in a speedy and cost-effective manner.
Congress originally enacted the Federal Arbitration Act in 1925. It
has served us well for over three-quarters of a century. Under the Act,
if the parties agree to a contract affecting interstate commerce that
contains a clause requiring arbitration, the clause will be enforceable
in court. In short, the Federal Arbitration Act allows parties to a
contract to agree not to take their disputes to court, but to resolve
any dispute arising from that contract before a neutral decision-maker,
generally selected by a nonprofit arbitration organization, such as the
American Arbitration Association or the National Arbitration Forum. The
parties can generally present evidence and be represented by counsel.
And the decision-makers will apply the relevant State law in resolving
the dispute. Arbitration is generally quicker and less expensive than
going to court.
In recent years, there have been some cases where the arbitration
process has not worked well, but thousands of disputes have been fairly
and effectively settled by arbitrators. Such a system is even more
important because of skyrocketing legal costs where attorneys require
large contingency fees. Accordingly, I have opposed piecemeal
legislative changes to the act. Instead, I believe that the Senate
should approach the Federal Arbitration Act in a comprehensive manner.
The approach of reforming arbitration rather than abandoning the
arbitration process provides a better solution in several respects.
Arbitration is one of the most cost-effective means of resolving
disputes. Unlike businesses, consumers and employees generally cannot
afford a team of lawyers to represent them. And their claims are often
not big enough so that a lawyer would take the case on a 25 percent or
even a 50 percent contingent fee. In a 1998 article in the Columbia
Human Rights Law Review, Lewis Maltby, then the Director of the
National Task Force on Civil Liberties in the Workplace of the American
Civil Liberties Union and a Director of the American Arbitration
Association, explained how court litigation is often just too expensive
for most employees:
Even if the client has clearly been wronged and is
virtually certain to prevail in court, the attorney will be
forced to turn down the case unless there are substantial
damages. A survey of plaintiff employment lawyers found that
a prospective plaintiff needed to have a minimum of $60,000
in provable damages not including pain and suffering or other
intangible damages before an attorney would take the case.
Even this, however, does not exhaust the financial
obstacles an employee must overcome to secure representation.
In light of their risk of losing such cases, many plaintiffs'
attorneys require a prospective client to pay a retainer,
typically about $3,000. Others require clients to pay out-of-
pocket expenses of the case as they are incurred. Expenses in
employment discrimination cases can be substantial. Donohue
and Siegelman found that expenses in Title VII cases are at
least $10,000 and can reach as high as $25,000. Finally, some
plaintiffs' attorneys now require a consultation fee,
generally $200-$300, just to discuss their situation with a
potential client.
The result of these formidable hurdles is that most people
with claims against their employer are unable to obtain
counsel, and thus never receive justice. Paul Tobias, founder
of the National Employment Lawyers' Association, has
testified that ninety-five percent of those who seek help
from the private bar with an employment matter do not obtain
counsel. Howard's survey of plaintiffs' lawyers produced the
same result. A Detroit firm reported that only one of eighty-
seven employees who came to them seeking representation was
accepted as a client.
Without arbitration, consumers and employees are faced with having to
pay a lawyer's hourly rate, which may amount to several thousand
dollars to litigate a claim in court. If that is what consumers and
employees are left with, many will have no choice but to drop their
claim. That is not right. It is not fair. Thus, Professor Stephen Ware
of the Cumberland Law School stated in a paper published by the CATO
Institute that ``current [arbitration] law is better for all consumers
[than an exemption from the Federal Arbitration Act] except those few
who are especially likely to have large liability claims. . . .''
Thus, while some have argued that the Congress should enact
exemptions from the Federal Arbitration Act for different classes of
contracts from automobile franchise contracts to employment contracts
to chicken farmers, such exemptions would not help the overwhelming
majority of the people who could not afford a lawyer to litigate in
court. This is where arbitration can give consumers and employees a
cost-effective forum to assert their claims. Thus, before we make
exceptions to the Federal Arbitration Act for special interests with
friends in Washington, I think it is our duty to consider how we can
improve the system for everyone.
We can improve the arbitration system, but we must take a balanced
approach. In such an approach, we must protect the sanctity of legal
contracts explicitly protected under Article I, Section 10 of the U.S.
Constitution. In any contract, the parties must agree to all the terms
and clauses included in the contract document. This includes the
arbitration clause. This is basic contract law, and the basic premise
of the Federal Arbitration Act for over 75 years.
Unfortunately, however, in certain situations consumers, employees,
and small businesses have not been treated fairly. That is what the
Fair Arbitration Act is designed to correct.
The bill will maintain the cost savings of binding arbitration, but
will grant several specific ``due process'' rights to all parties to an
arbitration proceeding. The bill is modeled after consumer and employee
due process protocols of the American Arbitration Association, which
have broad support. The bill provides the following rights:
1. Notice. Under the bill, to be enforceable, an arbitration clause
would have to have a heading in large, bold print, would have to state
whether arbitration is binding or optional, identify a source that the
parties may contact for more information, and state that a consumer
could opt out to small claims court.
This will ensure, for example, that consumers who receive credit card
notices in the mail will not miss an arbitration clause because it is
lost in the ``fine print.'' Further, it would give all parties a means
to obtain more information on how to resolve any disputes. Finally, the
clause would explain that if a party's claims could otherwise be
brought in small claims court, the party would be free to do so. Small
claims court, unlike regular trial court, provides another inexpensive
and quick means of dispute resolution.
2. Independent selection of arbitrators. The bill grants all parties
the right to have potential arbitrators disclose relevant information
concerning their business ties and employment. All parties to the
arbitration will have an equal voice in selecting a neutral arbitrator.
This ensures that the large company who sold a consumer a product will
not select the arbitrator itself, because the consumer with a grievance
will have the right to nominate potential arbitrators, too. As a
result, the
[[Page S4615]]
final arbitrator selected will have to have the explicit approval of
both parties to the dispute. This helps ensure that the arbitrator will
be a neutral party with no allegiance to either party.
3. Choice of law. The bill grants the non-drafting party, usually the
consumer or the employee, the right to have the arbitrator governed by
the substantive law that would apply under conflicts of laws principles
applicable in the forum in which the non-drafting party resided at the
time the contract was entered into. This means that the substantive
contract law that would apply in a court where the consumer, employee,
or business resides at the time of making the contract will apply in
the arbitration. Thus, in a dispute arising from the purchase of a
product by an Alabama consumer from an Illinois company, a court would
have to determine whether Alabama or Illinois law applied by looking to
the language of the contract and to the place where the contract was
entered into. The bill ensures that an arbitrator would use the same
conflict of laws principles that a court would in determining whether
Alabama or Illinois law would govern the arbitration proceedings.
4. Representation. The bill grants all parties the right to be
represented by counsel at their own expense. Thus, if the claim
involves complicated legal issues, consumers, employees, or small
businesses would be free to have their lawyer represent him in the
arbitration. Such representation should be substantially less expensive
than a trial in court because of the more abbreviated and expedited
process of arbitration.
5. Hearing. The bill grants all parties the right to a fair hearing
in a forum that is reasonably convenient to the consumer or employee.
This would prevent a large company from requiring consumers, employees,
or small business owners to travel across the country to arbitrate
their claim and to expend more in travel costs than their claim is
potentially worth.
6. Evidence. The bill grants all parties the right to conduct
discovery and to present evidence. This ensures that the arbitrator can
have all the facts before making a decision.
7. Cross examination. The bill grants all parties the right to cross
examine witnesses presented by the other party at the hearing. This
allows a party to test the statements of the other party's witnesses
and be sure that the evidence before the arbitrator is correct.
8. Record. The bill grants all parties the right to hire a
stenographer or tape record the hearing to produce a record. This right
is key to proving later whether the arbitration proceeding was fair.
9. Timely resolution. The bill grants all parties the right to have
an arbitration proceeding completed promptly so that they do not have
to wait for a year or more to have their claim resolved. Under the
bill, a defendant must file an answer not more than 30 days of the
filing of the complaint. The arbitrator has 90 days after the answer to
hold a hearing. The arbitrator must render a final decision within 30
days after the hearing. Extensions are available in extraordinary
circumstances.
10. Written decision. The bill grants all parties the right to a
written decision by the arbitrator explaining the resolution of the
case and his reasons therefor. If the consumer or employee takes a
claim to arbitration, he deserves to have an explanation of why he won
or lost.
11. Expenses. The bill grants all parties the right to have an
arbitrator provide for reimbursement of arbitration fees in the
interests of justice and the reduction, deferral, or waiver of
arbitration fees in cases of extreme hardship. It does little good to
take a claim to arbitration if the consumer or employee cannot even
afford the arbitration fee. This provision ensures that the arbitrator
can waive or reduce the fee or make the company reimburse the consumer
or employee for a fee if the interests of justice so require.
12. Small claims opt-out. The bill grants all parties the right to
opt out of arbitration into small claims court if that court has
jurisdiction over the claim and the claim does not exceed $50,000.
The bill also provides an effective mechanism for parties to enforce
these rights. At any time, if a consumer or employee believes that
another party violated his or her rights, the consumer or employee can
request and the arbitrator may award a penalty up to the amount of the
claim plus attorneys fees. For example, if a defendant party failed to
provide discovery to a plaintiff party, the plaintiff could move for an
award of fees. The amount of the fee award is limited, as it is in
court, to the amount of cost incurred by the employee in trying to
obtain the information from the company. This principle is taken from
Rule 37 of the Federal Rules of Civil Procedure. After the decision, if
the losing party believes that the rights granted to him by the Act
have been violated, it may file a petition with the Federal district
court. If the court finds by clear and convincing evidence that the
losing party's rights were violated, it may order a new arbitrator
appointed. Thus, if a consumer, employee, or small business has an
arbitrator that is unfair and this causes him to lose the case, the
plaintiff can obtain another arbitrator.
This bill is an important step to continuing a constructive dialog on
arbitration. This bill will ensure that those who can least afford to
go to court can go to a less expensive arbitrator and be treated
fairly. It will ensure that every arbitration carried out under the
Federal Arbitration Act is completed fairly, promptly, and
economically. I look forward to working with my colleagues in the
Senate to ensure that consumers, employees, and small businesses who
agree in a contract to arbitrate their claims will be treated fairly
under the Federal Arbitration Act.
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. 1135
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 ``Fair Arbitration Act of
2007''.
SEC. 2. ELECTION OF ARBITRATION.
(a) In General.--Chapter 1 of title 9, United States Code,
is amended by adding at the end the following:
``Sec. 17. Election of arbitration
``(a) Fair Disclosure.--In order to be binding on the
parties, a contract containing an arbitration clause shall--
``(1) have a printed heading in bold, capital letters
entitled `ARBITRATION CLAUSE', which heading shall be printed
in letters not smaller than \1/2\ inch in height;
``(2) explicitly state whether participation within the
arbitration program is mandatory or optional;
``(3) identify a source that a consumer or employee can
contact for additional information regarding--
``(A) costs and fees of the arbitration program; and
``(B) all forms and procedures necessary for effective
participation in the arbitration program; and
``(4) provide notice that all parties retain the right to
resolve a dispute in a small claims court, as provided in
subsection (b)(12).
``(b) Procedural Rights.--
``(1) In general.--If a contract provides for the use of
arbitration to resolve a dispute arising out of or relating
to the contract, each party to the contract shall be afforded
the rights described in this subsection, in addition to any
rights provided by the contract.
``(2) Competence and neutrality of arbitrator and
administrative process.--
``(A) In general.--Each party to the dispute (referred to
in this section as a `party') shall be entitled to a
competent, neutral arbitrator and an independent, neutral
administration of the dispute.
``(B) Arbitrator.--Each party shall have an vote in the
selection of the arbitrator, who--
``(i) unless otherwise agreed by the parties, shall be a
member in good standing of the bar of the highest court of
the State in which the hearing is to be held;
``(ii) shall comply with the Code of Ethics for Arbitrators
in Commercial Disputes of the American Bar Association and
the American Arbitration Association and any applicable code
of ethics of any bar of which the arbitrator is a member;
``(iii) shall have no--
``(I) personal or financial interest in the results of the
proceedings in which the arbitrator is appointed; or
``(II) relation to the underlying dispute or to the parties
or their counsel that may create an appearance of bias; and
``(iv) prior to accepting appointment, shall disclose all
information that might be relevant to neutrality (including
service as an arbitrator or mediator in any past or pending
case involving any of the parties or their representatives)
or that may prevent a prompt hearing.
``(C) Administration.--The arbitration shall be
administered by an independent,
[[Page S4616]]
neutral alternative dispute resolution organization to ensure
fairness and neutrality and prevent ex parte communication
between parties and the arbitrator. The arbitrator shall have
reasonable discretion to conduct the proceeding in
consideration of the specific type of industry involved.
``(3) Applicable law.--In resolving a dispute, the
arbitrator--
``(A) shall be governed by the same substantive law that
would apply under conflict of laws principles applicable in a
court of the State in which the party that is not drafter of
the contract resided at the time the contract was entered
into; and
``(B) shall be empowered to grant whatever relief would be
available in court under law or equity.
``(4) Representation.--Each party shall have the right to
be represented by an attorney, or other representative as
permitted by State law, at their own expense.
``(5) Hearing.--
``(A) In general.--Each party shall be entitled to a fair
arbitration hearing (referred to in this section as a
`hearing') with adequate notice and an opportunity to be
heard.
``(B) Electronic or telephonic means.--Subject to
subparagraph (C), in order to reduce cost, the arbitrator may
hold a hearing by electronic or telephonic means or by a
submission of documents.
``(C) Face-to-face meeting.--Each party shall have the
right to require a face-to-face hearing, which hearing shall
be held at a location that is reasonably convenient for the
party who did not draft the contract unless in the interest
of fairness the arbitrator determines otherwise, in which
case the arbitrator shall use the process described in
section 1391 of title 28, to determine the venue for the
hearing.
``(6) Evidence.--With respect to any hearing--
``(A) each party shall have the right to present evidence
at the hearing and, for this purpose, each party shall grant
access to all information reasonably relevant to the dispute
to the other parties, subject to any applicable privilege or
other limitation on discovery under applicable State law;
``(B) consistent with the expedited nature of arbitration,
relevant and necessary prehearing depositions shall be
available to each party at the direction of the arbitrator;
and
``(C) the arbitrator shall--
``(i) make reasonable efforts to maintain the privacy of
the hearing to the extent permitted by applicable State law;
and
``(ii) consider appropriate claims of privilege and
confidentiality in addressing evidentiary issues.
``(7) Cross examination.--Each party shall have the right
to cross examine witnesses presented by the other parties at
a hearing.
``(8) Record of proceeding.--Any party seeking a
stenographic record of a hearing shall make arrangements
directly with a stenographer and shall notify the other
parties of these arrangements not less than 3 days before the
date of the hearing. The requesting party shall pay the costs
of obtaining the record. If the transcript is agreed by the
parties, or determined by the arbitrator to be the official
record of the proceeding, it shall be provided to the
arbitrator and made available to the other parties for
inspection, at a date, time, and place determined by the
arbitrator.
``(9) Timely resolution.--
``(A) In general.--Upon submission of a complaint by the
claimant, the respondent shall have not more than 30 days to
file an answer.
``(B) Evidence.--After the answer is filed by the
respondent, the arbitrator shall direct each party to file
documents and to provide evidence in a timely manner so that
the hearing may be held not later than 90 days after the date
of the filing of the answer.
``(C) Extensions.--In extraordinary circumstances
(including multiparty, multidistrict, or complex litigation)
the arbitrator may grant a limited extension of the time
limits under this paragraph, or the parties may agree to such
an extension.
``(D) Decision.--The arbitrator shall notify each party of
its decision not later than 30 days after the hearing.
``(10) Written decision.--The arbitrator shall provide each
party with a written explanation of the factual and legal
basis for the decision. This written decision shall describe
the application of an identified contract term, statute, or
legal precedent. The decision of the arbitrator shall be
subject to review only as provided in subsection (c)(2) of
this section and sections 10, 11, and 16 of this title.
``(11) Expenses.--The arbitrator or independent arbitration
administration organization, as applicable, shall have the
authority to--
``(A) provide for reimbursement of arbitration fees to the
claimant, in whole or in part, as part of the remedy in
accordance with applicable law or in the interests of
justice; and
``(B) waive, defer, or reduce any fee or charge due from
the claimant in the event of extreme hardship.
``(12) Small claims opt out.--
``(A) In general.--Each party shall have the right to opt
out of binding arbitration and to proceed in any small claims
court with jurisdiction over the claim. For purposes of this
paragraph, no court with jurisdiction to hear claims in
excess of $50,000 shall be considered a small claims court.
``(B) Exception.--If a complaint in small claims court is
amended to exceed the lesser of the jurisdictional amount of
that court or a claim for $50,000 in total damages, the small
claims court exemption of this paragraph shall not apply and
the parties shall proceed by arbitration.
``(c) Denial of Rights.--
``(1) Denial of rights by party misconduct.--
``(A) In general.--At any time during an arbitration
proceeding, any party may file a motion with the arbitrator
asserting that another party has deprived the movant of a
right granted by this section and seeking relief.
``(B) Award by arbitrator.--If the arbitrator determines
that the movant has been deprived of a right granted by this
section by another party, the arbitrator shall award the
movant a monetary amount, which shall not exceed the
reasonable expenses incurred by the movant in filing the
motion, including attorneys' fees, unless the arbitrator
finds that--
``(i) the motion was filed without the movant first making
a good faith effort to obtain discovery or the realization of
another right granted by this section;
``(ii) the opposing party's nondisclosure, failure to
respond, response, or objection was substantially justified;
or
``(iii) the circumstances otherwise make an award of
expenses unjust.
``(2) Denial of rights by arbitrator.--
``(A) In general.--A losing party in an arbitration
proceeding may file a petition in the United States district
court in the State in which the party that did not draft the
contract resided at the time the contract was entered into to
assert that the arbitrator violated a right granted to the
party by this section and to seek relief.
``(B) Review.--A United States district court may grant a
petition filed under subparagraph (A) if the court finds
clear and convincing evidence that an action or omission of
the arbitrator resulted in a deprivation of a right of the
petitioner under this section that was not harmless. If such
a finding is made, the court shall order a rehearing before a
new arbitrator selected in the same manner as the original
arbitrator as the exclusive judicial remedy provided by this
section.
``(d) Limitation on Claims.--Except as otherwise expressly
provided in this section, nothing in this section may be
construed to be the basis for any claim in law or equity.
``(e) Definitions.--In this section--
``(1) the term `contract' means a contract evidencing a
transaction involving commerce; and
``(2) the term `State' includes the District of Columbia,
the Commonwealth of Puerto Rico, Guam, the Commonwealth of
the Northern Mariana Islands, and the Virgin Islands.''.
(b) Technical and Conforming Amendment.--The table of
sections at the beginning of chapter 1 of title 9, United
States Code, is amended by adding at the end the following:
``17. Election of arbitration.''.
(c) Effective Date.--The amendments made by this section
shall apply to any contract (as that term is defined in
section 17 of title 9, United States Code, as added by this
Act) entered into after the date that is 6 months after the
date of enactment of this Act.
______
By Mr. MENENDEZ (for himself, Mr. Baucus, and Ms. Cantwell):
S. 1137. A bill authorize grants to carry out projects to provide
education on preventing teen pregnancies, and for other purposes; to
the Committee on Health, Education, Labor, and Pensions.
Mr. MENENDEZ. Mr. President, today I am introducing the Teen
Pregnancy Prevention Responsibility and Opportunity Act, legislation
that creates a comprehensive approach to fighting teen pregnancy and
giving young people the support they need to make informed decisions.
The results of a 1997 congressionally-ordered study were released
this month. The 6-year study found that youth who participate in
abstinence education programs are no more or less likely to engage in
sex than those who do not participate in abstinence education programs.
Both groups are reported to have similar numbers of sexual partners,
and to have sex for the first time at about the same age; around 15
years old. This proves that abstinence-only education isn't working.
But rather than invest in proven programs, the Bush administration
continues to insist on a narrow-minded, misguided approach of
abstinence-only education. As this study demonstrates, abstinence-only
just doesn't cut it. The United States continues to have the highest
teen-pregnancy rate and teen birth rate in the western industrialized
world. In a human context, this impacts one-third of all teenage girls.
In a fiscal context, these unintended pregnancies cost the United
States at least $9 billion annually despite Federal appropriations of
about $176 million a
[[Page S4617]]
year towards promoting abstinence until marriage.
American taxpayers deserve a better rate of return on their
investment. American youth deserve quality education, positive role
models, effective after school programs, employment opportunities, and
medically and scientifically accurate family life education. The time
is now for a new direction in sex education.
Adolescents need to know we care. They need to know we care as
parents, as educators, as business people, as politicians, and as
healthcare providers. They need to know we want them to become
successful contributing members of society, but for that to happen we
must commit to and invest in them. We need to be opening doors for
these young people, and that is just what my Teen Pregnancy Prevention,
Responsibility and Opportunity Act will do.
The Teen Pregnancy Prevention, Responsibility and Opportunity Act
will establish a comprehensive program for reducing adolescent
pregnancy through education and information programs, as well as
positive activities and role models both in school and out of school.
While we have done a good job of progressively decreasing teen
pregnancy, we can do better. With the sons of teen mothers more likely
to end up in prison, and the daughters of teen mothers more likely to
end up teen mothers themselves, we must act now to break this
problematic cycle.
The time is now to make a real difference in the lives of our youth,
and to give them the support they need to grow and lead positive lives.
Our schools, community and faith-based organizations need access to
funds to teach age-appropriate, factually and medically accurate, and
scientifically-based family life education.
We need programs that encourage teens to delay sexual activity.
We need to provide services and interventions for sexually active
teens.
We need to educate both young men and women about the
responsibilities and pressures that come along with parenting.
We need to help parents communicate with teens about sexuality.
We need to teach young people responsible decision-making.
And, we need to fund after school programs that will enrich their
education, and offer character and counseling services.
We know that after school programs reduce risky adolescent behavior
by involving teens in positive activities that also provide positive
life skills. Teenage girls who play sports, for instance, are more
likely to wait to become sexually active, and to have fewer partners.
They are consequently less likely to become pregnant.
Let us join together to recommit ourselves to continuing to decrease
the incidence of teen pregnancy, and recommit ourselves to offering
family life education and positive after school programs that will
foster responsible young adults.
The time is now to invest in our teens. We cannot afford to let doors
close on them. Instead we must continue to open the door of
opportunity. I urge my colleagues to join me in supporting this
important legislation.
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