[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.

                          ____________________