Congressional Record, Volume 153 Issue 106 (Thursday, June 28, 2007)

[Congressional Record Volume 153, Number 106 (Thursday, June 28, 2007)]
[Senate]
[Pages S8693-S8714]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

By Mrs. McCASKILL:
S. 1723. A bill to amend the Inspector General Act of 1978 to enhance
the independence of the Inspectors General, to create a Council of the
Inspectors General on Integrity and Efficiency, and for other purposes;
to the Committee on Homeland Security and Governmental Affairs.
Mrs. McCASKILL. Mr. President, I rise to talk about something great
Congress did 30 years ago. They passed the Inspector General Act. That
act has provided a layer of accountability in our Government that is
very important. Unfortunately, there are still times that the inspector
generals in our Government are not given the respect and deference they
deserve. That is why today I am introducing the Improving Government
Accountability Act.
If one thinks about the inspector generals, what they are is a first
line of defense on behalf of taxpayers and against Government waste and
inefficiency. They are the first line of defense because they are
inside Federal agencies. Let's be honest, inspector generals inside
Federal agencies are facing mountains of waste and inefficiency. If
they are to do their jobs the way Congress intended, they must be
independent, and their work must be immediately accessible to the
public.
We have had some troubling incidents over the last several years as
it relates to the independence, the qualifications and, frankly, the
integrity of our inspector generals. That is why this legislation is
necessary. That is why this legislation is so important.
The legislation will do several things. First, all inspector generals
will be appointed for terms of 7 years. That will make sure they cannot
arbitrarily be removed from their position by a department head who is
getting nervous about information they are providing to the public in
terms of accountability.
Second, Congress must be notified of the removal of any inspector
general and, very importantly, the reasons for the removal before they
can be removed from office.
Third, all inspector generals will have their own legal counsel to
avoid using the agency counsel. This is important because if they are
going to have independence, they must have independent legal advice
about their ability to do their job.
Fourth, no inspector general can accept a bonus. The bonuses are
given by the heads of the agencies. That is an inherent conflict. If
you know that you please the head of your agency and you get more
money, what kind of shortcuts are you going to take? What are you going
to be willing to gloss over in order not to embarrass the head of that
agency with information you have discovered about waste and
inefficiency?
Fifth, in the event of a vacancy, the Council on Integrity and
Efficiency will recommend to the appointing authority three possible
replacements. They will not have the ability to dictate the replacement
for the IG, but it will provide the appointing authority with three
qualified people to take

[[Page S8694]]

over the important function of inspector general.
Also key in this legislation is that instead of making their annual
budget requests to the agencies they oversee, the IG budget requests
will go straight to the Office of Management and Budget, or OMB, that
sends the President's budget request to Congress.
Next, all inspector general Web sites must be directly accessible
from the home page of the agency. I asked my staff to take a tour
through Government agency Web sites to see how easy it was to find out
what the IGs had been up to in those agencies. It was remarkably
difficult. In many instances we couldn't even find the inspector
general's information on the home page of that agency. The public ought
to be able to go on the page of any Federal agency and immediately
click on the last inspector general report, find out what that
inspector general found and, frankly, ought to be able to ask the
question, what has been done about it. There will be a way for the
public to anonymously send allegations of waste, fraud, and abuse
directly to the IG offices.
Our office found that only three of 27 sampled Federal agencies have
an obvious direct link from their home page to the IG's Web site.
Clearly, we are not focused on making this information available to the
public. Frankly, all the auditors in the world, all the inspector
generals in the world do no good if the public can't learn the
information. Because if the public doesn't know about it, it isn't
going to have the cleansing effect it should. Only six of the 27
sampled IGs have an obvious direct link on their home page to report
waste, fraud, and abuse. That is very important.
I give credit to Representative Jim Cooper of Tennessee who has been
working on this legislation in the House. I am excited to join him in
this effort. Senator Collins and Senator Lieberman have some of these
provisions in their Accountability in Government Contracting Act, of
which I am also proud to be a cosponsor.
There have been specific examples that have occurred recently. I
won't go into them other than to say, we had one Commerce IG who
refused to resign after an investigation showed that he had committed
malfeasance in office. However, after much pressure from Congress, he
finally did step down. We have another inspector general who has been
accused of trying to block the serving of a search warrant at NASA.
Think about that, trying to block the serving of a search warrant that
had been issued by a court of law. We have another IG who was not
reappointed by President Bush and said publicly it was because at the
Department of Homeland Security, he was seen as a traitor, and he was
intimidated about not issuing reports that might reflect badly on the
agency.
Bottom line, we should protect inspector generals. They are precious.
They are important to what we do. We can talk all we want about
oversight, but if we can't get the information from inside these
agencies, frankly, we are not going to be effective in Congress with
any kind of oversight. The information the inspector generals provide
is crucial to Congress and crucial to the public. This legislation
would make sure that they are qualified, protected, independent, and
the public knows what they are up to.
I urge my colleagues to get excited about this legislation and maybe,
uncharacteristically, move it quickly through the Senate.
______

By Mr. SCHUMER (for himself and Mr. Crapo):
S. 1726. A bill to regulate certain State taxation of interstate
commerce, and for other purposes; to the Committee on Finance.
Mr. SCHUMER. Mr. President, I want to speak about the bill I am
introducing today with Senator Crapo, the Business Activity Tax
Simplification Act of 2007. Our bill tries to address a very important
question: How should States tax businesses that locate their operations
in a few States, but have customers and earn income in many States?
This issue has grown in importance in recent years, and the Supreme
Court's decision last week not to get involved in the issue raises the
stakes even further.
The crux of the issue is this: A majority of States impose corporate
income and other so-called ``business activity taxes'' only when
companies have ``physical presence,'' such as employees or property, in
their States. However, some States contend that the mere presence of a
business's customers, or an ``economic presence,'' is all that is
necessary to impose a business activity tax. These companies are facing
a confusing and costly assortment of State and local tax rules, some
enacted by legislatures and others imposed upon them by State revenue
authorities and upheld by State courts.
Senator Crapo and I introduced similar legislation in the 109th
Congress to try to address this problem of double taxation and tax
practices that vary from State to State. That bill came close to
passing the House, but some last-minute objections were raised. Now,
the need for legislation and congressional action has taken on new
urgency, and we have revised the bill to address many of the concerns
expressed last year.
Just last week, the U.S. Supreme Court denied certiorari in two cases
that challenged the constitutionality of State taxation of out-of-State
companies with no physical presence in a State. The States involved in
these cases, West Virginia and New Jersey, asserted theories of
economic nexus to tax out-of-State corporations. They claimed that
because some customers of such corporations reside in the State, even
though the corporation is not physically present, they are subject to
business activity taxes.
The first case involves a credit card company headquartered in
Delaware. The bank issued credit cards nationwide, including credit
cards issued to West Virginia customers. The bank had no property or
employees, no office or any other physical presence, in the State. The
second case involves a Delaware holding company that licensed
intellectual property trademarks and trade names to a customer that
does business in New Jersey. The holding company itself had no offices,
employees, or property in New Jersey, and did not otherwise have a
physical presence in the State. In both cases, the State courts ruled
that the out-of-State corporation was taxable.
What is so disappointing about the Supreme Court's silence on this
issue is the fact that these State court decisions conflict with an
earlier Supreme Court ruling. In 1992, in Quill Corp. v. North Dakota,
the Supreme Court prohibited States from forcing out-of-State
corporations from collecting sales and use tax, unless the corporation
has a physical presence in the taxing State. However, some State courts
have held that the physical presence test established by Quill creates
no such limitations on the imposition of business activity taxes.

Currently, 19 States take the position that a State has the right to
tax a business merely because it has a customer within the State, even
if the business has no physical presence in the State whatsoever.
These States' actions in pursuing these taxes have caused uncertainty
and widespread litigation, so much so that it has created a chilling
effect on foreign and interstate commerce. I have spoken out against
double taxation on many issues in the past, and the double tax in these
cases, while not as large, is just as wrong.
Let me be clear about this: I know that several Governors and State
revenue commissioners have spoken out against the legislation because
they don't like the Federal Government telling them what they can and
cannot tax. They are also concerned about any revenue they might lose
as a result. But if the States are collecting a tax they shouldn't be
collecting in the first place, the fact that they might lose a small
amount of revenue is not the most persuasive argument, in my view.
I believe Congress has a responsibility to create a uniform nexus
standard for tax purposes so that goods and services can flow freely
between the States. Firm guidance on what activities can be conducted
within a State will provide certainty to tax administrators and
businesses, reduce multiple taxation or the same income, and will
reduce compliance and enforcement costs for States and businesses
alike.
The last time Congress acted on this issue was in 1959, when Public
Law 86-272 was enacted to prohibit States from imposing ``income
taxes'' on sales of ``tangible personal property'' by a business whose
sole activity within a State

[[Page S8695]]

was soliciting sales. No one can deny that in the almost 50 years
since, interstate commerce has taken on a whole new character. New
technologies allow companies headquartered in one State to provide
services to consumers across the country. The Internet is replacing
bricks-and-mortar stores. Companies and consumers are increasingly
linked across State lines.
The Business Activity Tax Simplification Act of 2007 addresses these
changes over the last 48 years both modernizing Public Law 86-272 and
codifying the physical presence standard. Our bill extends the
protections of the 1959 law to include solicitation activities
performed in connection with all sales and transactions, not just sales
of tangible personal property. The bill protects the free flow of
information, including broadcast signals from outside the State, from
becoming the basis for taxation of out-of-State businesses.
BATSA also protects activities where the business is a consumer in
the State. It makes little sense to impose tax on out-of-State
businesses that purchases goods or services from an in-State company.
Obviously, in this very common scenario, the out-of-State business is
not using these goods or services to generate any revenue in the State.
Why should they be subject to tax?
Most importantly, BATSA codifies the physical presence standard.
States and localities can only impose business activity taxes on
businesses within their jurisdiction that have employees in the State,
or real or tangible personal property that is either leased or owned.
It is consistent with current law and sound tax policy, which holds
that a tax should not be imposed by a State unless that State provides
benefits or protections to the taxpayer. Further, the physical presence
standard is the basis for each and every one of our treaties with
foreign nations--adoption of a more nebulous standard by the States
undermines these international treaties.
We need to act now. Already, State legislatures are interpreting the
court's denial of cert as an affirmation of their position that they
are free to enact whatever policies affecting interstate commerce that
are beneficial to their particular State revenue needs, regardless of
the national impact. Because the court will not review their nexus
standard and Congress has not acted, States now have an ideal
opportunity to raise revenues from out-of-State corporations regardless
of the national impact.
Only 3 days after the Supreme Court denied cert, the New Hampshire
Assembly added an amendment to the State budget at 3:40 a.m. to allow
the State to collect revenue from out-of-State businesses. The denial
of cert thereby resulted almost immediately in a $10 million to $100
million windfall for New Hampshire. No one can deny that this was an
extremely aggressive action; why else would the legislature have taken
such drastic measures to tack on this amendment it? the wee hours of
the morning?
States are clearly overreaching in their efforts to collect these
taxes, and it creates a difficult situation for businesses. It is
laughable to think that a company would decide to cut off all
transactions with individuals within a certain State to avoid similar
laws. And so they will have to start paying taxes to States where they
start generating no revenue, hiring no employees, and contributing
nothing to the State's economy from their phantom presence aside from
these taxes. But these companies are not going to stand idly by and be
double-taxed; they will simply declare less income in their home States
as a result.
I know that my legislation with Senator Crapo has raised concerns in
the past. The States have argued that BAT legislation represents an
intrusion into their authority to govern. But I believe the contrary: A
fundamental aspect of American federalism is that Congress has the
authority and responsibility under the commerce clause to ensure that
interstate commerce is not burdened by State actions.
In fact, the exercise of such congressional power is necessary in
order to prevent excessive burdens from being placed on businesses
engaged on interstate activity by virtue of their customer's residing
in a particular State. Congress must act to ensure certainty,
predictability, and fairness of taxation of multistate corporations.
The lack of a bright-line physical presence standard encourages each
State to act in its own self interest by taking action to maximize its
revenues, regardless of the potential double taxation that results.
Let me address a few concerns that have been raised about the bill.
Opponents claim that BATSA includes so many exceptions to the physical
presence standard that large, multistate companies will utilize the
legislation to ensure they pay minimum State tax nationwide. But our
bill explicitly States that it preserves States' authority to adopt or
continue to use their own tax compliance tools.
In response to those who say that this legislation will be a huge hit
to State budgets, the figures just don't add up. There have been a
number of studies done, but even the highest revenue estimate
represents only a very small percentage of the total amount of business
activity taxes collected by the States. The studies leave out one
important fact, however: Companies affected by double-taxation are
going to declare less income in their home States, if they have to pay
taxes on that same income to another State.
Let me cite just one example from a company in my State. In 2005,
Citigroup paid 63 percent of all it State and local taxes to New York
State and New York City, all based on physical presence in the State
and the city. As more States follow the lead of New Hampshire, the city
and State of New York will be getting less from Citibank, one way or
another, as they won't want to be double taxed, once by New York
because of our physical presence and again in New Hampshire and other
States because they have customers in those States. This is why any
revenue loss estimates from any city or State are overblown.
In short, this is no longer a theoretical discussion. Federal
legislation is required to stop this food fight.
I believe that Congress has a duty to prevent some States from
impeding the free flow and development of interstate commerce and to
prevent double taxation. That is why I am asking my colleagues on both
sides of the aisle, including the chairman and ranking member of the
Finance Committee, to carefully consider this legislation.
Mr. CRAPO. Mr. President, I would like to thank my colleague from New
York, Senator Schumer, for the work he has done on this bill. He shares
my grave concerns about the devastating impact that legal
interpretations of Public Law 86-272 are having on foreign and
interstate commerce. I'm pleased that we can work together in a
bipartisan effort to make changes to a law that is in serious need of
updating and clarification in view of the more service-oriented economy
we have today driven in large part by modern technology's profound
transformation of business transactions. This is why we are introducing
the Business Activity Tax Simplification Act of 2007, or BATSA, today.
Congress has a Constitutional responsibility to ensure that
interstate commerce is not unduly burdened by State actions, including
unfair and burdensome taxation of such commerce. Public Law 86-272 was
enacted almost 50 years ago, for just these purposes. Ways of
conducting multi-state business have changed, and, in the absence of
any clarifying legislation, some state courts have interpreted taxation
activity under an ``economic presence'' approach. This approach does
not reflect the intent or spirit of the Commerce Clause of the
Constitution; furthermore, it creates a climate of uncertainty that
inhibits business expansion and innovation. Businesses have to take
into account the very real possibility that they will be taxed multiple
times for the same business activity. These ``business activity taxes''
are certainly appropriate when a business has a physical presence in a
State; these taxes are inappropriate when imposed by a State where that
business's customer happens to reside, but in which the business has no
physical presence.
States' efforts to impose improper business activity taxes have been
furthered by the Supreme Court's recent silence on this issue. Recent
State court rulings are in conflict with the high Court's ruling in
Quill Corp. v. North Dakota in 1992. In that ruling,

[[Page S8696]]

the Supreme Court prohibited States from forcing out-of-state
corporations to collect sales and use taxes unless such corporation had
a physical presence in the taxing State. As my colleague from New York
pointed out a few minutes ago, State courts in both New Jersey and West
Virginia have held that the physical presence test in Quill only
applies to sales and use taxes, not business activity taxes. I share my
colleague's deep concern with the fact that the appeals of these two
cases to the Supreme Court were denied certiorari just last week. This
denial underscores the urgency of BATSA.
This effort by a large number of States to impose business activity
taxes based on economic presence has the potential to open a Pandora's
Box of negative implications for businesses. Without clarification by
Congress, States will be free to enact revenue-raising nexus
legislation and policies that, by definition, will not and cannot take
into account the national impact of such activities. The eleventh-hour
enactment of economic nexus legislation by the New Hampshire State
Legislature just days after the Supreme Court denial of certiorari in
the New Jersey and West Virginia cases is a sign of things to come. For
many businesses, this will serve as a death knell for growth and
expansion.
BATSA will help clarify the intent of Public Law 86-272. BATSA
codifies the ``physical presence'' standard and will eliminate
confusion for State tax administrators and businesses alike. It's
consistent with current law and the notion that a tax should not be
imposed by a State unless that State provides benefits or protections
to the taxpayer. BATSA clarifies that an out-of-state business must
have nexus under both the Due Process Clause and the Commerce Clause.
This standard is also consistent with the standards we have in place
with regard to our trading partners abroad.
BATSA modernizes Public Law 86-272 by extending the protections under
that law to include solicitation activities performed in connection
with all sales and transactions, not just tangible personal property.
BATSA applies to all business activity taxes, not just net income
taxes. This includes gross receipts taxes, gross profits taxes, single
business taxes, franchise taxes, capital stock taxes and business and
occupation taxes. It does not apply to transaction taxes such as sales
and use taxes.
BATSA protects the free flow of information, critical in our modern
era of Internet business and protects the activities where the business
is a consumer in that State. And, as my colleague, Senator Schumer,
rightly pointed out, it is counterintuitive to impose taxes on an out-
of-state company purchasing goods or services from an in-State company,
since the out-of-state company isn't generating any revenue for the
State.
BATSA upholds the approach of disregarding certain de minimus
activities codified in Public Law 86-272.
States have argued that BATSA will result in substantial lost State
tax revenue. In fact, according to the Congressional Budget Office, the
projected total loss of revenue to states from BATSA in year one of
enactment represents just 0.2 percent of all State and local taxes paid
by businesses in 2005. And the CBO cost estimate is actually less than
the cost claimed by the National Governor's Association in its own
revenue estimates.
I will tell you what BATSA does not do. BATSA does not help large
companies avoid paying their fair share of State taxes, stating
explicitly that States retain the authority to adopt or continue to use
anti-tax avoidance compliance tools. It expressly endorses statutory
and regulatory tools at States' disposal to combat tax abuse. Industry
and activity-specific safe harbors included in prior bills do not exist
in this legislation.
In the glaring absence of Supreme Court clarification on Quill Corp.
v. North Dakota, and in the presence of confusing state court
interpretations of that decision and ongoing, and legally-creative
revenue-raising schemes by States, it's imperative that Congress act
now to preserve the free flow of commerce between States. The Business
Activity Tax Simplification Act of 2007 provides that clarification.
BATSA ensures that one standard of taxation applies for taxing multi-
state companies, so that companies are not unjustly taxed multiple
times by different States on the same income. I hope that our
colleagues here in the Senate will support this important legislation
that will protect the business expansion in our country that keeps our
economy competitive and thriving.
______

By Ms. COLLINS (for herself, Mr. Warner, Mr. Chambliss, Ms.
Snowe, Mr. Isakson, Mr. Lugar, Mr. Cornyn, Mr. Coleman, and Mr.
Voinovich):
S. 1727. A bill to amend the Internal Revenue Code of 1986 to provide
for a credit against income tax for certain educator expenses, and for
other purposes; to the Committee on Finance.
Ms. COLLINS. Mr. President, I rise today, along with my good friends,
Senators Warner, Chambliss, Snowe, Isakson, Lugar, Cornyn, Coleman, and
Voinovich, to introduce the Teacher Tax Credit Act of 2007.
As we approach the end of the school year, it is appropriate once
again to consider tax relief to help cover the out-of-pocket expenses
our Nation's teachers incur to improve the education of our children.
Many times in the past, we have come to the floor to offer
legislation on this subject. In 2001, Senator Warner and I offered
legislation which resulted in the enactment of the existing $250
teacher tax deduction. That deduction expires at the end of this year.
Earlier this session, Senator Warner and I offered legislation to make
that deduction permanent, raise it to $400, and expand it to cover
professional development expenses.
Today, we introduce legislation that would provide teachers with an
alternative tax credit for books, supplies, and equipment they purchase
for their students, as well as for professional development expenses.
The tax credit would be set at 50 percent of such expenditures so that
teachers would receive 50 cents of tax relief for every dollar of their
own money they spend, up to $300.
Our rationale in proposing a tax credit as an alternative to the
existing deduction is simple, deductions only reduce tax liability
indirectly, by reducing taxable income. The value of the deduction is
equal to the taxpayer's marginal tax rate, or what we call their tax
``bracket.'' For example, for teachers in the 25 percent tax bracket, a
$100 deduction would reduce their tax liability by 25 percent, or $25.
By contrast, the tax credit we are proposing would reduce the amount
of taxes paid by a teacher by 50 percent for each dollar that a teacher
spends on school supplies or professional development expenses,
regardless of the tax bracket the teacher is in. A teacher who took the
maximum credit amount of $300 would save 50 percent of that amount--
$150--in taxes.
We have made an effort to ensure that the tax benefit we are
proposing will make all teachers who use it better off, relative to the
current deduction. Let me take a moment to explain how we have done
this: first, the tax credit is structured as an alternative teachers
can choose either the deduction or the credit, whichever works best for
their tax situation. Second, the level of the credit, if adopted in its
present form, would provide a net after-tax benefit of $150. This is
significantly higher than the net after-tax benefit that most teachers
can receive using the current $250 deduction.
It is even higher than the net after-tax benefit that would result
from the $400 deduction Senator Warner and I proposed earlier this
year. Teachers in the 25 percent tax bracket would get a net after-tax
benefit of $100 from a $400 deduction, so they will see an increase of
$50 under the credit system that we are proposing today. Even teachers
in the highest tax bracket, which is currently set at 35 percent, would
see a small increase in the net benefit they would receive under this
credit, compared to a $400 deduction.
I should also note that some teachers make so little they do not even
have the tax liability to offset this credit. To make sure these
teachers are also compensated for the money they spend on classroom
supplies and professional development, the credit Senator Warner and I
are proposing is fully refundable.
It is remarkable how much the average teacher spends every year out
of

[[Page S8697]]

his or her own pocket to buy supplies and other materials for their
students. Many of us are familiar with a survey of the National
Education Association that found that teachers spend, on average, $443
a year on classroom supplies. Other surveys show that they are spending
even more than that.
The NEA's data also shows that the average teacher in the U.S. still
does not make $50,000, and in many States, including Maine, they
average less than $40,000. When you realize that the average teacher is
not particularly well paid, it speaks volumes about their dedication
that they are willing to make that kind of investment to support the
teaching they provide to their students.
Indeed, I have spoken to dozens of teachers in my home State who tell
me they routinely spend far in excess of the $300 credit limit on
materials they use in their classrooms. At every school I visit, I find
teachers who are spending their own money to improve the educational
experiences of their students by supplementing classroom supplies. Year
after year, these teachers spend hundreds of dollars on books, bulletin
boards, computer software, crayons, construction paper, tissue paper,
stamps and inkpads. For example, Anita Hopkins and Kathi Toothaker,
elementary school teachers from Augusta, Maine, purchase books for
their students to have as a classroom library as well as workbooks and
sight cards. They also purchase special prizes for positive
reinforcement for students. Mrs. Hopkins estimates that she spends $800
to $1,000 of her own money on extra materials to make learning fun and
to create a stimulating learning experience.
It is important that this credit also be available to teachers who
incur expenses for professional development. While this tax relief
provides modest assistance to educators, it is my view that students
are its ultimate beneficiaries. Studies consistently show that well-
qualified teachers, and involved parents, are the most important
contributors to student success. Educators themselves understand just
how important professional development is to their ability to make a
positive impact in the classroom. Teachers in Maine repeatedly tell me
that they need, and want, more professional development. But tight
school budgets often make funds to support this development impossible
to get. By providing a credit for professional development expenses,
this amendment will help teachers take that additional course or pursue
that advanced degree that will make them even better at what they love
to do.
Our bill makes it a priority to reimburse educators for just a small
part of what they invest in our children's future. It is both sound
education policy and sensible tax policy. I hope our colleagues will
join us in support of this important initiative.
I ask unanimous consent that a letter of support be printed in the
Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:

National Education Association,

Washington, DC, June 27, 2007.
Senator Susan Collins,
Senator John Warner,
U.S. Senate,
Washington, DC.
Dear Senators Collins and Warner: On behalf of the National
Education Association's (NEA) 3.2 million members, we would
like to express our strong support for your proposal to
create a tax credit for educators' classroom supply and
professional development expenses. We thank you for your
continued leadership and advocacy on this important issue.
As you know, educators across the country make considerable
financial sacrifices as they reach into their own pockets to
purchase classroom supplies. Studies show that teachers spend
more of their own funds each year to supply their classrooms,
including purchasing essential items such as pencils, glue,
scissors, and facial tissues. For example, NEA's 2003 report
Status of the American Public School Teacher, 2000-2001 found
that teachers spent an average of $443 a year on classroom
supplies. More recently, the National School Supply and
Equipment Association found that in 2005-2006, educators
spent out of their own pockets an average of $826.00 for
supplies and an additional $926 for instructional materials,
for a total of $1,752.
By creating a tax credit, your legislation would reduce the
amount of taxes paid by a teacher by 50 percent for each
dollar he or she spends on school supplies. Thus, a teacher
taking the maximum credit of $300 would save $150 in taxes,
regardless of his or her tax bracket. As a result, your bill
will make a real difference for many educators, who often
must sacrifice other personal needs in order to pay for
classroom supplies.
NEA also strongly supports your proposal to cover out-of-
pocket professional development expenses under the tax
credit. Teacher quality is the single most critical factor in
maximizing student achievement. Ongoing professional
development is essential to ensure that educators stay up-to-
date on the skills and knowledge necessary to prepare
students for the challenges of the 21st century. Your bill
will make a critical difference in helping educators access
quality training.
We thank you again for your work on this important
legislation and look forward to continuing to work with you
to support our nation's educators.
Sincerely,
Diane Shust,
Director of Government Relations.
Randall Moody,
Manager of Federal Advocacy.

Mr. WARNER. Mr. President, I rise today in support, once again, of
America's teachers by joining with Senator Collins in introducing the
Teacher Tax Credit Act of 2007. Other original cosponsors of this bill
include Senators Chambliss, Coleman, Cornyn, Isakson, Lugar, Snowe, and
Voinovich.
Senator Collins and I have worked closely for some time now in
support of legislation to provide our teachers with tax relief in
recognition of the many out-of-pocket expenses they incur as part of
their profession. In the 107th Congress, we were successful in
providing much needed tax relief for our Nations' teachers with passage
of H.R. 3090, the Job Creation and Worker Assistance Act of 2002.
This legislation, which was signed into law by President Bush,
included the Collins/Warner Teacher Tax Relief Act of 2001 provisions
that provided a $250 above-the-line deduction for educators who incur
out-of-pocket expenses for supplies they bring into the classroom to
better the education of their students. These important provisions
provided almost half a billion dollars worth of tax relief to teachers
all across America in 2002 and 2003.
In the 108th Congress we were able to successfully extend the
provisions of the Teacher Tax Relief Act for 2004 and 2005. In the
109th Congress we were able to successfully extend the provisions for
2006 and 2007.
While these provisions will provide substantial relief to America's
teachers, our work is not yet complete.
It is now estimated that the average teacher spends $826 out of their
own pocket each year on classroom materials--materials such as pens,
pencils, and books. First-year teachers spend even more. Why do they do
this? Simply because school budgets are not adequate to meet the costs
of education. Our teachers dip into their own pocket to better the
education of America's youth.
Moreover, in addition to spending substantial money on classroom
supplies, many teachers spend even more money out of their own pocket
on professional development. Such expenses include tuition, fees,
books, and supplies associated with courses that help our teachers
become even better instructors.
The fact is that these out-of-pocket costs place lasting financial
burdens on our teachers. This is one reason our teachers are leaving
the profession. Little wonder that our country is in the midst of a
teacher shortage.
Accordingly, Senator Collins and I have joined together to take
another step forward by introducing legislation today that creates a
refundable tax credit for teachers. The Teacher Tax Credit Act of 2007
will simply provide a refundable tax credit up to $150 for classroom
expenses and professional development expenses.
I ask unanimous consent to have printed in the Record at the end of
my statement the attached letter from the National Education
Association endorsing the Collins-Warner Teacher Tax Credit Act of
2007. I will also ask unanimous consent to have printed in the Record
at the end of my statement the attached letter from the Virginia
Education Association endorsing the Collins-Warner Teacher Tax Credit
Act of 2007.
Mr. President, our teachers have made a personal commitment to
educate the next generation and to strengthen America. In my view, the
Federal Government should recognize

[[Page S8698]]

the many sacrifices our teachers make in their career.
In addition to the refundable tax credit legislation that we are
introducing today, earlier this year Senator Collins and I introduced
S. 505, The Teacher Tax Relief Act of 2007. S. 505 will build upon
current law by increasing the above-the-line deduction, as President
Bush has called for, from $250 allowed under current law to $400;
allowing educators to include professional development costs within
that $400 deduction; and making the teacher tax relief provisions in
the law permanent.
The Teacher Tax Credit Act of 2007 is another step forward in
providing our educators with the recognition they deserve.
Mr. President, I ask unanimous consent that the letters to which I
referred be printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:

National Education Association,

Washington, DC, June 27, 2007
Senator Susan Collins,
Senator John Warner,
U.S. Senate,
Washington, DC.
Dear Senators Collins and Warner: On behalf of the National
Education Association's (NEA) 3.2 million members, we would
like to express our strong support for your proposal to
create a tax credit for educators' classroom supply and
professional development expenses. We thank you for your
continued leadership and advocacy on this important issue.
As you know, educators across the country make considerable
financial sacrifices as they reach into their own pockets to
purchase classroom supplies. Studies show that teachers spend
more of their own funds each year to supply their classrooms,
including purchasing essential items such as pencils, glue,
scissors, and facial tissues. For example, NEA's 2003 report
Status of the American Public School Teacher, 2000-2001 found
that teachers spent an average of $443 a year on classroom
supplies. More recently, the National School Supply and
Equipment Association found that in 2005-2006, educators
spent out of their own pockets an average of $826.00 for
supplies and an additional $926 for instructional materials,
for a total of $1,752.
By creating a tax credit, your legislation would reduce the
amount of taxes paid by a teacher by 50 percent for each
dollar he or she spends on school supplies. Thus, a teacher
taking the maximum credit of $300 would save $150 in taxes,
regardless of his or her tax bracket. As a result, your bill
will make a real difference for many educators, who often
must sacrifice other personal needs in order to pay for
classroom supplies.
NEA also strongly supports your proposal to cover out-of-
pocket professional development expenses under the tax
credit. Teacher quality is the single most critical factor in
maximizing student achievement. Ongoing professional
development is essential to ensure that educators stay up-to-
date on the skills and knowledge necessary to prepare
students for the challenges of the 21st century. Your bill
will make a critical difference in helping educators access
quality training.
We thank you again for your work on this important
legislation and look forward to continuing to work with you
to support our nation's educators.
Sincerely,
Diane Shust,
Director of Government Relations.
Randall Moody,
Manager of Federal Advocacy.
____

Virginia Education Association,

Richmond, VA, June 28, 2007.
Senator John Warner,
U.S. Senate,
Washington, DC.
Dear Senator Warner: On behalf of the members of the
Virginia Education Association, I am delighted and proud that
you are again proposing to create a tax credit for educators'
classroom supply and professional development expenses.
Virginia teachers and I appreciate your continued leadership
on this matter because it obviously affects Virginia
educators--and educators around the nation--directly in the
pocketbook.
As I'm sure you are aware, the National Education
Association reported in a study entitled the Status of the
American Public School Teacher, 2000-2001 that teachers spent
an average of $443 a year on classroom supplies. Since that
time, the average spending for supplies and materials is
estimated to have increased to over $1,750 annually. Add to
that the out of pocket expense of professional development
and you realize the sacrifice and commitment of our nation's
teachers to a quality education for their classrooms and the
professional commitment they have for themselves.
The bill you are sponsoring with Senator Collins recognizes
teachers' dedication and will make a significance difference
for many educators. Again, I thank you.
Sincerely,

Princess Moss,

President,
Virginia Education Association.
______

By Mr. LEAHY (for himself and Mr. Cochran):
S. 1729. A bill to amend titles 18 and 28 of the United States Code
to provide incentives for the prompt payments of debts owed to the
United States and the victims of crime by imposing surcharges on unpaid
judgments owed to the United States and to the victims of crime, to
provide for offsets on amounts collected by the Department of Justice
for Federal agencies, to increase the amount of special assessments
imposed upon convicted persons, to establish an Enhanced Financial
Recovery Fund to enhance, supplement, and improve the debt collection
activities of the Department of Justice, to amend title 5, United
States Code, to provide to assistant United States attorneys the same
retirement benefits as are afforded to Federal law enforcement
officers, and for authorized purposes; to the Committee on the
Judiciary.
Mr. LEAHY. Mr. President, today I join with Senator Cochran to
introduce a bill that will provide parity between the retirement
benefits granted to assistant U.S. attorneys and those granted to other
Federal law enforcement officers.
There are 5,500 assistant U.S. attorneys in 93 offices throughout the
United States, all of whom are serving on the front lines to uphold the
rule of law. Having served as a prosecutor for many years in Vermont, I
know well the integral role prosecutors play in the administration of
justice. Prosecutors are a crucial component of our justice system, and
should be recognized as such when they reach the end of their careers.
Probation officers, deputy marshals, corrections officers, and even
corrections employees not serving in a law enforcement role receive
enhanced benefits greater than those received by assistant U.S.
attorneys. This is an inequity that should be remedied. By correcting
this disparity, Congress would also help the Federal justice system
retain experienced prosecutors. Of all the prosecutors who leave the
government for the private sector, 60 to 70 percent do so with
experience of between 6 and 15 years. With the Department of Justice's
rapidly expanding role in combating terrorism, we cannot afford to lose
the experienced men and women who serve in this vital role.
This legislation also addresses concerns about the cost to the
Federal Government of providing enhanced retirement benefits to
assistant U.S. attorneys. Proponents of the bill have helped craft
provisions that would assist the Department of Justice in recovering
money owed to the Federal Government as a result of judgments and other
fines. By bolstering the Department's ability to collect the funds it
is owed, resources would be freed up to provide the parity in
retirement benefits sought by assistant U.S. attorneys. The result of
the creative efforts to fund these benefits in an alternative manner is
that the Department of Justice will, through its duties as the Nation's
law enforcement agency, be able to provide the benefits its employees
deserve at little or no cost to the taxpayer.
By passing this legislation, we will signal the Federal Government's
recognition that prosecutors in our society fulfill a critical role.
Congress can send the message that the service of these prosecutors is
a valued and indispensable component of our Federal justice system. I
hope all Senators will join us in supporting this legislation to ensure
that Federal policy equally respects the contributions of all members
of the law enforcement community in keeping our society safe and
secure.
I ask unanimous consent that the text of the bill be printed in the
Record.
There being no objection, the text was ordered to be printed in the
Record, as follows:

S. 1729

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 ``Enhanced Financial Recovery
and Equitable Retirement Treatment Act of 2007''.

TITLE I--ENHANCED FINANCIAL RECOVERY

SEC. 101. IMPOSITION OF CRIMINAL SURCHARGE.

(a) In General.--Section 3612 of title 18, United States
Code, is amended by striking subsection (g) and inserting the
following:

[[Page S8699]]

``(g) Imposition of Surcharge.--
``(1) In general.--A surcharge shall be imposed upon a
defendant if there are any unpaid criminal monetary penalties
as of the date specified in subsection (f)(1).
``(2) Amount of surcharge.--The surcharge imposed under
paragraph (1) shall be--
``(A) 5 percent of the unpaid principal balance; or
``(B) $50, if the unpaid balance is less than $1,000.
``(3) Allocation of payments.--
``(A) Fine or special assessment.--If a surcharge is
imposed under paragraph (1) for a fine or special
assessment--
``(i) an amount equal to 95 percent of each principal
payment made by a defendant shall be credited to the Crime
Victims Fund established under section 1402 of the Victims of
Crime Act of 1984 (42 U.S.C. 10601); and
``(ii) an amount equal to 5 percent of each principal
payment shall be credited to the Department of Justice
Enhanced Financial Recovery Fund established under section
104 of the Enhanced Financial Recovery and Equitable
Retirement Treatment Act of 2007.
``(B) Restitution.--If a surcharge is imposed under
paragraph (1) for a restitution obligation--
``(i) an amount equal to 95 percent of each principal
payment shall be paid to any victim identified by the court;
and
``(ii) an amount equal to 5 percent of each principal
payment shall be credited to the Department of Justice
Enhanced Financial Recovery Fund established under section
104 of the Enhanced Financial Recovery and Equitable
Retirement Treatment Act of 2007.
``(C) Surcharges.--For any payment made by a defendant
after the full amount of a surcharge imposed under paragraph
(1) has been satisfied, the full amount of such payment shall
be credited to the principal amount due or accrued interest,
as the case may be.
``(4) Definitions.--In this section--
``(A) the term `criminal monetary penalties' includes the
principal amount of any amount imposed as a fine, restitution
obligation, or special assessment, regardless of whether any
payment schedule has been imposed; and
``(B) the term `principal payment' does not include any
amount that is imposed as interest, penalty, or a
surcharge.''.
(b) Conforming Amendments.--Section 3612 of title 18,
United States Code, is amended--
(1) by striking subsections (d) and (e); and
(2) by redesignating subsections (f) through (i), as
amended by this Act, as subsection (d) through (g),
respectively.

SEC. 102. IMPOSITION OF CIVIL SURCHARGE.

(a) In General.--Section 3011 of title 28, United States
Code, is amended to read as follows:

``Sec. 3011. Imposition of surcharge

``(a) In General.--A surcharge shall be imposed on a
defendant if there is an unpaid balance due to the United
States on any money judgment in a civil matter recovered in a
district court as of--
``(1) the fifteenth day after the date of the judgment; or
``(2) if the day described in paragraph (1) is a Saturday,
Sunday, or legal public holiday, the next day that is not a
Saturday, Sunday, or legal holiday.
``(b) Amount of Surcharge.--A surcharge imposed under
subsection (a) shall be--
``(1) 5 percent of the unpaid principal balance; or
``(2) $50, if the unpaid balance is less than $1,000.
``(c) Allocation of Payments.--If a surcharge is imposed
under subsection (a)--
``(1) an amount equal to 95 percent of each principal
payment made by a defendant shall be credited as otherwise
provided by law; and
``(2) an amount equal to 5 percent of each principal
payment shall be credited to the Department of Justice
Enhanced Financial Recovery Fund established under section
104 of the Enhanced Financial Recovery and Equitable
Retirement Treatment Act of 2007.
``(d) Surcharges.--For any payment made by a defendant
after the full amount of a surcharge imposed under
subsection(a) has been satisfied, the full amount of such
payment shall be credited to the principal amount due or
accrued interest, as the case may be.
``(e) Definitions.--In this section--
``(1) the term `principal payment' does not include any
amount that is imposed as interest, penalty, or a surcharge;
and - included in title 18, but not here?
``(2) the term `unpaid balance due to the United States'
includes any unpaid balance due to a person that was
represented by the Department of Justice in the civil matter
in which the money judgment was entered.''.
(b) Technical and Conforming Amendment.--The table of
sections at the beginning of subchapter A of chapter 176 of
title 28, United States Code, is amended by striking the item
relating to section 3011 and inserting the following:

``3011. Imposition of surcharge.''.

SEC. 103. INCREASE IN THE AMOUNT OF SPECIAL ASSESSMENTS.

Section 3013 of title 18, United States Code, is amended by
striking subsection (a) and inserting the following:
``(a) The court shall assess on any person convicted of an
offense against the United States--
``(1) in the case of an infraction or a misdemeanor--
``(A) if the defendant is an individual--
``(i) the amount of $10 in the case of an infraction or a
class C misdemeanor;
``(ii) the amount of $25 in the case of a class B
misdemeanor; and
``(iii) the amount of $100 in the case of a class A
misdemeanor; and
``(B) if the defendant is a person other than an
individual--
``(i) the amount of $100 in the case of an infraction or a
class C misdemeanor;
``(ii) the amount of $200 in the case of a class B
misdemeanor; and
``(iii) the amount of $500 in the case of a class A
misdemeanor; and
``(2) in the case of a felony--
``(A) the amount of $200 if the defendant is an individual;
and
``(B) the amount of $1,000 if the defendant is a person
other than an individual.''.

SEC. 104. ENHANCED FINANCIAL RECOVERY FUND.

(a) Establishment.--There is established in the Treasury a
separate account known as the Department of Justice Enhanced
Financial Recovery Fund (in this section referred to as the
``Fund'').
(b) Deposits.--Notwithstanding section 3302 of title 31,
United States Code, or any other law regarding the crediting
of collections, there shall be credited as an offsetting
collection to the Fund an amount equal to--
(1) 2 percent of any amount collected pursuant to civil
debt collection litigation activities of the Department of
Justice (in addition to any amount credited under section
11013 of the 21st Century Department of Justice
Appropriations Authorization Act (28 U.S.C. 527 note));
(2) 5 percent of all amounts collected as restitution due
to the United States pursuant to the criminal debt collection
litigation activities of the Department of Justice;
(3) any surcharge collected under section 3612(g) of title
18, United States Code, as amended by this Act, or section
3011 of title 28, United States Code, as amended by this Act;
and
(4) 50 percent of any special assessment collected under
section 3013(a) of title 18, United States Code, as amended
by this Act.
(c) Availability.--The amounts credited to the Fund shall
remain available until expended.
(d) Payments From the Fund.--
(1) Amount.--
(A) In general.--Except as provided in subparagraph (B),
the Attorney General shall use not less than $20,000,000 of
the Fund in each fiscal year, to the extent that funds are
available, for the civil and criminal debt collection
activities of the Department of Justice, including
restitution judgments where the beneficiaries are the victims
of crime.
(B) Exceptions.--
(i) Adjustment of amount.--In each fiscal year following
the first fiscal year in which deposits into the Fund are
greater than $20,000,000, the amount to be used under
paragraph (1) shall be increased by a percentage equal to the
change in the Consumer Price Index for the calendar year
preceding that fiscal year.
(ii) Limitation.--In any fiscal year, amounts in the Fund
shall be available to the extent that the amount appropriated
in that fiscal year for the purposes described in
subparagraph (A) is not less than an amount equal to the
amount appropriated for such activities in fiscal year 2006,
adjusted annually in the same proportion as increases
reflected in the amount of aggregate level of appropriations
for the Executive Office of United States Attorneys and
United States Attorneys.
(2) Use of funds.--
(A) In general.--Funds used under paragraph (1) shall be
used to enhance, supplement, and improve civil and criminal
debt collection litigation activities of the Department of
Justice, primarily such activities by United States
attorneys' offices. A portion of such sums may be used by the
Department of Justice to provide legal, investigative,
accounting, and training support to the United States
attorneys' offices.
(B) Limitation on use.--Funds used under paragraph (1) may
not be used to determine whether a defendant is guilty of an
offense or liability to the United States (except
incidentally for the provision of assistance necessary or
desirable in a case to ensure the preservation of assets or
the imposition of a judgment which assists in the enforcement
of a judgment or in a proceeding directly related to the
failure of a defendant to satisfy the monetary portion of a
judgment).
(e) Other Use of Funds.--After using funds under subsection
(d), the Attorney General may use amounts remaining in the
Fund for additional civil or criminal debt collection
activities, for personnel expenses, for personnel benefit
expenses incurred as a result of this Act or the amendments
made by this Act, or for other prosecution and litigation
expenses. The availability of amounts from the Fund shall
have no effect on the implementation of title II or the
amendments made by title II.
(f) Definition.--In this section, the term ``United
States''--
(1) includes--
(A) the executive departments, the judicial and legislative
branches, the military departments, and independent
establishments of the United States; and
(B) corporations primarily acting as instrumentalities or
agencies of the United States; and
(2) except as provided in paragraph (1), does not include
any contractor of the United States.

[[Page S8700]]

SEC. 105. EFFECTIVE DATES.

(a) In General.--The amendments made by section 101 and
section 103 shall apply to any offense committed on or after
the date of enactment of this Act, including any offense
involving conduct that continued on or after the date of
enactment of this Act.
(b) Fund and Surcharges.--
(1) In general.--Section 104 and the amendments made by
section 102 shall take effect 30 days after the date of
enactment of this Act.
(2) Pending cases.--The amendments made by section 102
shall apply to any case pending on or after the date of
enactment of this Act.

TITLE II--EQUITABLE RETIREMENT TREATMENT OF ASSISTANT UNITED STATES
ATTORNEYS

SEC. 201. RETIREMENT TREATMENT OF ASSISTANT UNITED STATES
ATTORNEYS.

(a) Civil Service Retirement System.--
(1) Assistant united states attorney defined.--Section 8331
of title 5, United States Code, is amended--
(A) in paragraph (28), by striking ``and'' at the end;
(B) in paragraph (29) relating to dynamic assumptions, by
striking the period and inserting a semicolon;
(C) by redesignating paragraph (29) relating to air traffic
controllers as paragraph (30);
(D) in paragraph (30), as so redesignated, by striking the
period and inserting ``; and''; and
(E) by adding at the end the following:
``(31) `assistant United States attorney' means an
assistant United States attorney appointed under section 542
of title 28.''.
(2) Retirement treatment.--Chapter 83 of title 5, United
States Code, is amended by adding after section 8351 the
following:

``Sec. 8352. Assistant United States attorneys

``Except as provided under the Enhanced Financial Recovery
and Equitable Retirement Treatment Act of 2007 (including the
provisions relating to the non-applicability of mandatory
separation requirements under section 8335(b) and 8425(b) of
this title), an assistant United States attorney shall be
treated in the same manner and to the same extent as a law
enforcement officer for purposes of this chapter.''.
(3) Technical and conforming amendments.--
(A) Table of sections.--The table of sections for chapter
83 of title 5, United States Code, is amended by inserting
after the item relating to section 8351 the following:

``8352. Assistant United States attorneys.''.
(B) Mandatory separation.--Section 8335(a) of title 5,
United States Code, is amended by striking ``8331(29)(A)''
and inserting ``8331(30)(A)''.
(b) Federal Employees' Retirement System.--
(1) Assistant united states attorney defined.--Section 8401
of title 5, United States Code, is amended--
(A) in paragraph (34), by striking ``and'' at the end;
(B) in paragraph (35), by striking the period and inserting
``; and''; and
(C) by adding at the end the following:
``(36) `assistant United States attorney' means an
assistant United States attorney appointed under section 542
of title 28.''.
(2) Retirement treatment.--Section 8402 of title 5, United
States Code, is amended by adding at the end the following:
``(h) Except as provided under the Enhanced Financial
Recovery and Equitable Treatment Act of 2006 (including the
provisions relating to the non-applicability of mandatory
separation requirements under section 8335(b) and 8425(b) of
this title), an assistant United States attorney shall be
treated in the same manner and to the same extent as a law
enforcement officer for purposes of this chapter.''.
(c) Mandatory Separation.--Sections 8335(b)(1) and
8425(b)(1) of title 5, United States Code, are each amended
by adding at the end the following: ``This subsection shall
not apply in the case of an assistant United States
attorney.''.

SEC. 202. PROVISIONS RELATING TO INCUMBENTS.

(a) Definitions.--In this section--
(1) the term ``assistant United States attorney'' means an
assistant United States attorney appointed under section 542
of title 28, United States Code.
(2) the term ``incumbent'' means an individual who is
serving as an assistant United States attorney on the
effective date of this section.
(b) Notice Requirement.--Not later than 9 months after the
date of enactment of this Act, the Department of Justice
shall take measures reasonably designed to provide notice to
incumbents on--
(1) their election rights under this title; and
(2) the effects of making or not making a timely election
under this title.
(c) Election Available to Incumbents.--
(1) In general.--An incumbent may elect, for all purposes,
to be treated--
(A) in accordance with the amendments made by this title;
or
(B) as if this title had never been enacted.
(2) Failure to elect.--Failure to make a timely election
under this subsection shall be treated in the same way as an
election under paragraph (1)(A), made on the last day
allowable under paragraph (3).
(3) Time limitation.--An election under this subsection
shall not be effective unless the election is made not later
than the earlier of--
(A) 120 days after the date on which the notice under
subsection (b) is provided; or
(B) the date on which the incumbent involved separates from
service.
(d) Limited Retroactive Effect.--
(1) Effect on retirement.--In the case of an incumbent who
elects (or is deemed to have elected) the option under
subsection (c)(1)(A), all service performed by that
individual as an assistant United States attorney (and, with
respect to subparagraph (B) of this paragraph, any service
performed by such individual pursuant to an appointment under
sections 515, 541, 543, and 546 of title 28, United States
Code) shall--
(A) to the extent performed on or after the effective date
of that election, be treated in accordance with applicable
provisions of subchapter III of chapter 83 or chapter 84 of
title 5, United States Code, as amended by this title; and
(B) to the extent performed before the effective date of
that election, be treated in accordance with applicable
provisions of subchapter III of chapter 83 or chapter 84 of
title 5, United States Code, as if the amendments made by
this title had then been in effect.
(2) No other retroactive effect.--Nothing in this title
(including the amendments made by this title) shall affect
any of the terms or conditions of an individual's employment
(apart from those governed by subchapter III of chapter 83 or
chapter 84 of title 5, United States Code) with respect to
any period of service preceding the date on which such
individual's election under subsection (c) is made (or is
deemed to have been made).
(e) Individual Contributions for Prior Service.--
(1) In general.--An individual who makes an election under
subsection (c)(1)(A) shall, with respect to prior service
performed by such individual, deposit, with interest, to the
Civil Service Retirement and Disability Fund the difference
between the individual contributions that were actually made
for such service and the individual contributions that would
have been made for such service if the amendments made by
section 202 of this title had then been in effect.
(2) Effect of not contributing.--If the deposit required
under paragraph (1) is not paid, all prior service of the
incumbent shall remain fully creditable as law enforcement
officer service, but the resulting annuity shall be reduced
in a manner similar to that described in section
8334(d)(2)(B) of title 5, United States Code.
(3) Prior service defined.--In this subsection, the term
``prior service'' means, with respect to any individual who
makes an election (or is deemed to have made an election)
under subsection (c)(1)(A), all service performed as an
assistant United States attorney, but not exceeding 20 years,
performed by such individual before the date as of which
applicable retirement deductions begin to be made in
accordance with such election.
(f) Regulations.--The Office of Personnel Management shall
prescribe regulations necessary to carry out this title,
including provisions under which any interest due on the
amount described under subsection (e) shall be determined.

SEC. 203. EFFECTIVE DATES.

(a) In General.--The amendments made by section 201 shall
take effect on the first day of the first applicable pay
period beginning on or after 120 days after the date of
enactment of this Act.
(b) Incumbents.--Section 202 of this title shall take
effect 120 days after the date of enactment of this Act.
______

By Mr. SMITH (for himself, Mr. Conrad, Ms. Stabenow, Ms. Snowe,
and Ms. Collins):
S. 1730. A bill to amend part A of title IV of the Social Security
Act, to reward States for engaging individuals with disabilities in
work activities, and for other purposes; to the Committee on Finance.
Mr. SMITH. Mr. President, I rise today to introduce Pathways to
Independence Act of 2007, along with Senators Conrad, Stabenow, Snowe,
and Collins. This legislation includes two important provisions that
will help States transition Temporary Assistance for Needy Fami1ies,
TANF, recipients who have disabilities into work.
States currently face a conflict between the new Federal TANF
requirements, as reauthorized by the Deficit Reduction Act of 2006,
DRA, and the nondiscrimination requirements of the Americans with
Disabilities Act. In order to comply with the ADA, States must make
modifications to the work requirements they impose on TANF recipients
with disabilities to ensure that they can participate in the program
and move toward gainful employment. However, under new Federal TANF
rules, States only get credit when recipients participate in a narrow
set of activities for a specific number of hours each week, with
limited flexibility for people with disabilities.
Our legislation would allow States to create modified employability
plans for people with disabilities and get credit toward the TANF
participation rate if

[[Page S8701]]

recipients comply with the requirements in those plans. This would
encourage States to engage people with disabilities in appropriate
employment-focused activities without fear of facing Federal penalties
for not meeting their TANF work rates. The bill also would allow states
To exclude people with pending SSI applications and severe temporary
disabilities from the work rates.
This legislation allows states to receive full credit when a modified
employability plan is developed for a family that includes a person
with a disability. The bill requires States that receive credit for
families on their caseload with modified employability plans to submit
annual reports to the Department of Health and Human Services, HHS, on
the types of modifications made and disabled populations served. It
also requires HHS to compile this information and send an annual report
to Congress.
This approach is appealing to States for many reasons. It allows
States to design a system and receive credit for moving a person
progressively over time from rehabilitation toward work. It also
creates a more realistic work structure for individuals with
disabilities and/or addictions who otherwise may fall out of the system
either through sanction or discouragement, despite their need for
financial assistance.
In July 2002, the General Accounting Office reported that as many as
44 percent of TANF families have a parent or child with a physical or
mental impairment. This is almost three times higher than the rate
among the non-TANF population in the United States. In 8 percent of
TANF families, there is both a parent and a child with a disability;
among non-TANF families, this figure is 1 percent. The GAO's work
confirmed the findings of earlier studies, including work by the Urban
Institute and the HHS Inspector General.
These figures mean that we need to make sure that the TANF program
gives States the ability and incentives to serve families in their TANF
programs and help them to move from welfare to work. This is the lesson
that Oregon and many other States already have learned when they
developed and refined their TANF programs.
Most individuals with disabilities who receive TANF are able to
engage in work activities and move toward employment, and many will
either need no modifications to standard work activities or only minor
modifications. Those with more serious conditions may need more
intensive services and more significant adjustment to the basic work
requirements. Under the bill, a qualified professional must make a
determination that an individual has a disability and the state must
document the types of modifications, if any, that the individual needs
to succeed in moving toward employment.
Our bill proposes the creation of a more appropriate path for those
who have disabling conditions, both short- and long-term, recognizing
the barriers many of these families face both financially and
emotionally. The current strategy of rapid employment for all TANF
recipients is not always feasible. This bill will help families with
disabilities achieve and maintain stability during the transition from
welfare to becoming more financially secure and independent of
Government assistance.
Over 20 individual States, including Oregon, and the National
Governors Association, representing all 50 States and five territories
have identified problems with how the current rules affect their
ability to serve individuals with disabilities appropriately and meet
the TANF work requirements. They have asked for modifications to the
new TANF requirements like the ones proposed in our bill.
I look forward to working with my cosponsors, Senators Conrad,
Stabenow, Snowe, and Collins on these important provisions, and I urge
my colleagues to join us in support of this legislation.
I ask unanimous consent that the text of the bill and letters of
support be printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:

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 ``Pathways to Independence Act
of 2007''.

SEC. 2. AUTHORIZATION OF MODIFIED EMPLOYABILITY PLAN FOR
INDIVIDUALS WITH DISABILITIES.

(a) In General.--Section 407(c)(2) of the Social Security
Act (42 U.S.C. 607(c)(2)) is amended by adding at the end the
following new subparagraph:
``(E) Individuals with disabilities complying with a
modified employability plan deemed to be meeting work
participation requirements.--
``(i) Modified employability plan.--A State may develop a
modified employability plan for an adult or minor child head
of household recipient of assistance who has been determined
by a qualified medical, mental health, addiction, or social
services professional (as determined by the State) to have a
disability, or who is caring for a family member with a
disability (as so determined). The modified employability
plan shall--

``(I) include a determination that, because of the
disability of the recipient or the individual for whom the
recipient is caring, reasonable modification of work
activities, hourly participation requirements, or both, is
needed in order for the recipient to participate in work
activities;
``(II) set forth the modified work activities in which the
recipient is required to participate;
``(III) set forth the number of hours per week for which
the recipient is required to participate in such modified
work activities based on the State's evaluation of the
family's circumstances;
``(IV) set forth the services, supports, and modifications
that the State will provide to the recipient or the
recipient's family;
``(V) be developed in cooperation with the recipient; and
``(VI) be reviewed not less than every 6 months.

``(ii) Inclusion in monthly participation rates.--For the
purpose of determining monthly participation rates under
subsection (b)(1)(B)(i), and notwithstanding paragraphs (1),
(2)(A), (2)(B), (2)(C), and (2)(D) of this subsection and
subsection (d) of this section, a recipient is deemed to be
engaged in work for a month in a fiscal year if--

``(I) the State has determined that the recipient is in
substantial compliance with activities and hourly
participation requirements set forth in a modified
employability plan that meets the requirements set forth in
clause (i); and
``(II) the State complies with the reporting requirement
set forth in clause (iii) for the fiscal year in which the
month occurs.

``(iii) Reports.--

``(I) Report by state.--With respect to any fiscal year for
which a State counts a recipient as engaged in work pursuant
to a modified employability plan, the State shall submit a
report entitled `Annual State Report on TANF Recipients
Participating in Work Activities Pursuant to Modified
Employability Plans Due to Disability' to the Secretary not
later than March 31 of the succeeding fiscal year. The report
shall provide the following information:

``(aa) The aggregate number of recipients with modified
employability plans due to a disability.
``(bb) The percentage of all recipients with modified
employability plans who substantially complied with
activities set forth in the plans each month of the fiscal
year.
``(cc) Information regarding the most prevalent types of
physical and mental impairments that provided the basis for
the disability determinations.
``(dd) The percentage of cases with a modified
employability plan in which the recipient had a disability,
was caring for a child with a disability, or was caring for
another family member with a disability.
``(ee) A description of the most prevalent types of
modification in work activities or hours of participation
that were included in the modified employability plans.
``(ff) A description of the qualifications of the staff who
determined whether individuals had a disability, of the staff
who determined that individuals needed modifications to their
work requirements, and of the staff who developed the
modified employability plans.

``(II) Report by secretary.--The Secretary shall submit an
annual report to Congress entitled `Efforts in State TANF
Programs to Promote and Support Employment for Individuals
with Disabilities' not later than July 31 of each fiscal year
that includes information on State efforts to engage
individuals with disabilities in work activities for the
preceding fiscal year. The report shall include the
following:

``(aa) The number of individuals for whom each State has
developed a modified employability plan.
``(bb) The types of physical and mental impairments that
provided the basis for the disability determination, and
whether the individual with the disability was an adult
recipient or minor child head of household, a child, or a
non-recipient family member.
``(cc) The types of modifications that States have included
in modified employability plans.
``(dd) The extent to which individuals with a modified
employability plan are participating in work activities.
``(ee) An analysis of the extent to which the option to
establish such modified employability plans was a factor in
States' achieving or not achieving the minimum participation
rates under subsection (a) for the fiscal year.
``(iv) Definitions.--

[[Page S8702]]

``(I) Disability.--For purposes of this subparagraph, the
term `disability' means a mental or physical impairment,
including substance abuse or addiction, that--

``(aa) constitutes or results in a substantial impediment
to employment; or
``(bb) substantially limits 1 or more major life
activities.

``(II) Modified work activities.--For purposes of this
subparagraph, the term `modified work activities' means
activities the State has determined will help the recipient
become employable and which are not subject to and do not
count against the limitations and requirements under the
preceding provisions of this subsection and of subsection
(d).''.

(b) Effective Date.--The amendments made by this section
shall take effect on October 1, 2007.

SEC. 3. STATE OPTION TO EXCLUDE SSI APPLICANTS IN WORK
PARTICIPATION RATE.

(a) In General.--Section 407(b)(5) of the Social Security
Act (42 U.S.C. 607(b)(5)) is amended by striking ``at its
option, not require an individual'' and all that follows and
inserting ``at its option--
``(A) not require an individual who is a single custodial
parent caring for a child who has not attained 12 months of
age to engage in work, and may disregard such an individual
in determining the participation rates under subsection (a)
of this section for not more than 12 months;
``(B) disregard for purposes of determining such rates for
any month, on a case-by-case basis, an individual who is an
applicant for or a recipient of supplemental security income
benefits under title XVI or of social security disability
insurance benefits under title II, if--
``(i) the State has determined that an application for such
benefits has been filed by or on behalf of the individual;
``(ii) the State has determined that there is a reasonable
basis to conclude that the individual meets the disability or
blindness criteria applied under title II or XVI;
``(iii) there has been no final decision (including a
decision for which no appeal is pending at the administrative
or judicial level or for which the time period for filing
such an appeal has expired) denying benefits; and
``(iv) not less than every 6 months, the State reviews the
status of such application and determines that there is a
reasonable basis to conclude that the individual continues to
meet the disability or blindness criteria under title II or
XVI; and
``(C) disregard for purposes of determining such rates for
any month, on a case-by-case basis, an individual who the
State has determined would meet the disability criteria for
supplemental security income benefits under title XVI or
social security disability insurance benefits under title II
but for the requirement that the disability has lasted or is
expected to last for a continuous period of not less than 12
months.''.
(b) Effective Date.--The amendments made by this section
shall take effect on October 1, 2007.
____

Mental Health America,

Alexandria, VA, June 28, 2007.
Hon. Gordon Smith,
Hon. Debbie Stabenow,
Hon. Susan Collins,
Hon. Kent Conrad,
Hon. Olympia Snowe,
U.S. Senate,
Washington, DC.
Dear Senators Smith, Conrad, Stabenow, Snowe, and Collins:
I am writing to commend you for introducing the ``Pathways to
Independence Act of 2007''. This legislation will enable
States to engage individuals with mental health and substance
use conditions in programs to help them successfully move
from welfare to work.
Mental Health America is dedicated to helping all people
live mentally healthier lives. Our network of over 320 State
and local affiliates nationwide includes advocates, consumers
of mental health services, family members of consumers,
providers of mental health care, and other concerned
citizens--all dedicated to improving mental health care and
promoting mental wellness.
A large percentage of individuals who need and rely on the
Temporary Assistance for Needy Families (TANF) program have
significant mental health conditions and substance use
disorders. Studies indicate that one-fourth to one-third of
TANF recipients has serious mental health conditions, and
some studies show that up to one-fifth of TANF recipients
have substance use disorders. Moreover, more than one-fifth
have learning disabilities and more than one-fifth have
physical impairments. As you know, these rates are well above
those for the general population and indicate a pressing need
for access to care.
We are very concerned about changes made to the TANF
program in reauthorizing legislation included in the Deficit
Reduction Act (DRA). Individuals with mental health
conditions, substance use disorders, or other disabling
conditions will need assistance meeting the work requirements
of the TANF program that were significantly tightened by the
DRA. However, the regulations issued by the Department of
Health and Human Services implementing the new DRA
requirements provide such narrow definitions of the types of
activities that can count toward a state's work participation
rate (which determines Federal funding), we fear States will
be discouraged from providing the services these individuals
need in order to be engaged in the program and able to work.
We are particularly alarmed that States are only allowed to
count individuals receiving mental health or substance abuse
treatment or rehabilitation activities as job readiness
activities for 4 consecutive weeks and 6 weeks total per year
before requiring that these individuals be engaged in full-
time employment.
States are required under the Americans with Disabilities
Act (ADA) and Section 504 of the Rehabilitation Act of 1973
(Rehab Act) to make modifications to Federal programs,
including TANF, to enable individuals with disabilities to
participate. However, if States provide ADA-required
modifications to the work requirements for individuals with
disabilities, including those with serious mental health
conditions, they may not meet their work participation rates
even if these TANF recipients are actively engaged in
activities designed to help them secure full-time jobs.
Your bill would give States the flexibility they need in
order to fully engage individuals with serious mental health
conditions or substance use disorders in activities designed
to move them successfully into employment. Specifically, your
bill would allow States to develop ``modified employability
plans'' for TANF recipients who are determined by qualified
medical, mental health, or social services professionals
either to have a disability or to be caring for a family
member with a disability. These provisions would also enable
States to meet the ADA and Rehab Act requirements to provide
reasonable accommodations to these families without losing
Federal TANF funds.
We greatly appreciate your on-going leadership in working
to ensure that individuals with mental health conditions,
substance use disorders, and other disabling conditions are
able to fully participate in and benefit from the TANF
program. We look forward to working with you toward swift
enactment of the ``Pathways to Independence Act of 2007''.
Sincerely,
David Shern,
President & CEO.
Consortium for Citizens with

Disabilities,

Washington, DC, June 28, 2007.
Hon. Gordon Smith,
Hon. Debbie Stabenow,
Hon. Susan Collins,
Hon. Kent Conrad,
Hon. Olympia Snowe,
U.S. Senate,
Washington, DC.
Dear Senators Smith, Conrad, Stabenow, Snowe, and Collins:
We are writing to thank you for introducing legislation that
will allow States to more effectively serve families that
include a person with a disability in the Temporary
Assistance to Needy Families (TANF) program. We believe this
legislation, if enacted, will significantly improve the
ability of States to help families successfully move from
welfare toward work while also ensuring that the needs of
family members with disabilities are met. The undersigned
organizations enthusiastically support this legislation.
The Consortium for Citizens with Disabilities (CCD) is a
coalition of national consumer, advocacy, provider and
professional organizations headquartered in Washington, DC.
We work together to advocate for national public policy that
ensures the self determination, independence, empowerment,
integration, and inclusion of children and adults with
disabilities in all aspects of society. The CCD TANF Task
Force seeks to ensure that families that include persons with
disabilities are afforded equal opportunities and appropriate
accommodations under the TANF block grant.
Congress explicitly stated in the Personal Responsibility
and Work Opportunity Reconciliation Act that, in implementing
TANF, States are to comply with the Americans with
Disabilities Act (ADA) and Section 504 of the Rehabilitative
Services Act of 1973. The expectation, therefore, is that
States will provide individualized treatment and an effective
and meaningful opportunity to fully participate in the
program. To achieve this, States must provide appropriate
services, modify as necessary policies, practices, and
procedures, and adopt non-discriminatory methods of
administering the program. This expectation is also conveyed
in guidance to the States issued by the Office of Civil
Rights in the Department of Health and Human Services.
Under the Deficit Reduction Act (DRA), Congress
reauthorized the TANF block grant program. The legislation
retained States' obligation to comply fully with the ADA and
Section 504 of the Rehabilitation Act of 1973, as amended
while hindering States' ability to fully engage families that
include a person with a disability. The DRA effectively
increases the work participation rate for the TANF program
and imposes penalties on States that fail to meet the
participation rates. It does not allow States to receive
credit toward the work participation rate for families whose
employability plan has been modified to accommodate a person
with a disability. It fails to ensure that States receive
adequate credit for providing rehabilitative services to
parents with disabilities to help them prepare for a
successful transition to work. In short, existing policies do
not provide States with credit for offering appropriate
accommodation and services to families that include a person
with a disability. Instead it increases the likelihood States
offering such accommodations and services that ``do not
count'' will face financial penalties.

[[Page S8703]]

HHS received comments from TANF administrators across the
country who argued that the TANF provisions adopted under the
DRA and reflected in HHS interim regulations severely impedes
their ability to appropriately serve families that include a
person with a disability. In a letter to Secretary Leavitt in
response to the interim proposed regulations, the National
Governor's Association stated that:
Governors continue to believe that States should have
maximum flexibility in receiving credit for key
rehabilitative and supportive services such as substance
abuse, behavioral/mental health and domestic violence
treatments in one or more work activity. These services are
an imperative part of moving recipients, with barriers, to
work and retaining employment. States need credit for these
services in work activities that are fully countable for all
hours of participation without time limit.
We believe your legislation provides appropriate
flexibility for families who require accommodation due to a
disability. Under this bill, States will receive credit, not
face penalties, for investing in the supports necessary to
help individuals with disabilities succeed in the labor
market and achieve a higher degree of self-reliance. The
flexibility provided in this bill can improve the overall
performance of the TANF program by helping families at
greatest risk move toward employment. To date, studies have
demonstrated that a disproportionate number of families who
exit the program without employment or other sources of
financial assistance include a person with a disability.
States can and must serve these families better and Congress
should provide them with the tools to do so by supporting
this legislation.
Thank you again for introducing this legislation and your
leadership on this very important issue. We are grateful for
your leadership on behalf of families that include an adult
or child with a disability. We look forward to working with
you and your staffs to ensure that this provision becomes
law.
Sincerely,
American Dance Therapy Association.
American Music Therapy Association.
American Association on Intellectual & Developmental
Disabilities.
American Psychological Association.
Association of University Centers on Disabilities (AUCD).
Bazelon Center for Mental Health Law.
Easter Seals, Inc.
Epilepsy Foundation.
Goodwill Industries International, Inc.
Learning Disabilities Association of America.
Mental Health America.
National Alliance on Mental Illness.
National Alliance to End Homelessness.
National Association of Councils on Developmental
Disabilities.
National Association of County Behavioral Health and
Developmental Disability Directors.
National Association of State Directors of Special
Education.
National Association of State Head Injury Administrators.
National Association of State Mental Health Program
Directors.
National Council for Community Behavioral Healthcare.
National Disability Rights Network.
The Arc of the United States.
United Cerebral Palsy.
United Spinal Association.
______

By Mr. CORNYN (for himself, Mr. Voinovich, and Mr. Chambliss):
S. 1731. A bill to provide for the continuing review of unauthorized
Federal programs and agencies and to establish a bipartisan commission
for the purposes of improving oversight and eliminating wasteful
Government spending; to the Committee on Homeland Security and
Governmental Affairs.
Mr. CORNYN. Mr. President, I rise to introduce the United States
Authorization and Sunset Commission Act of 2007. I am very pleased to
be joined by my colleagues and good friends, Senator George Voinovich
and Senator Saxby Chambliss, who share my commitment that every dime
sent by taxpayers to Washington, DC, is spent wisely.
The United States Authorization and Sunset Commission Act of 2007
creates an eight member bipartisan Commission, made up of four Senators
and four Representatives. The Commission will look at the effectiveness
and efficiency of all Federal programs, but will especially focus on
unauthorized and ineffective programs. The bill is modeled after the
sunset process that the State of Texas instituted in 1977 to identify
and eliminate waste, duplication, and inefficiency in government
agencies. This process has led to the elimination of dozens of agencies
that have outlived their usefulness and has saved Texas taxpayers
hundreds of millions of dollars.
The job of the Commission is to ask the fundamental question: ``Is an
agency or program still needed?''
The Commission has two major responsibilities. First, the Commission
must submit a legislative proposal to Congress at least once every 10
years that includes a review schedule of at least 25 percent of
unauthorized Federal programs and at least 25 percent of ineffective
Federal programs or where effectiveness cannot be shown by the Office
of Management and Budget's, OMB, Performance Assessment Rating Tool,
PART. The Commission's schedule will abolish each program if Congress
fails to either reauthorize the program or consider the Commission's
recommendations within 2 years.
Second, the Commission must conduct a review of each program
identified in its review schedule and send its recommendations for
congressional review. Congress will then have 2 years to consider and
pass the Commission's recommendations or to reauthorize the program
before it is abolished.
Congress has two bites of the apple when it comes to evaluating
Federal spending. First, when it authorizes a program and second when
it appropriates the money for it. Yet a study by the Congressional
Budget Office found that Congress spent just under $160 billion in 2006
on agencies and programs despite the fact that their authorization had
expired. The list included hundreds of accounts, big and small, ranging
from the Coast Guard, $8 billion, to the Administration on Aging, $1.5
billion, to section 8 tenant-based housing, $15.6 billion, to foreign
relations programs, $9.5 billion. Many of these expired programs and
agencies, perhaps most, deserve reauthorization. Nonetheless, Congress
should aggressively determine whether these programs and agencies are
working as intended and the Commission will help serve this purpose.
In addition, the Commission will use OMB's PART, which is a tool to
assess and improve program performance. PART looks at all factors that
affect and reflect program performance including program purpose and
design, performance measurement, evaluations, and strategic planning,
program management, and program results. Using PART, OMB has scored 793
Government programs and found that 4 percent are ineffective and the
results for 24 percent could not be shown. Programs rated as
``ineffective'' or ``results not demonstrated'' account for $152
billion in budget authority.
The Commission's work will be guided by 10 criteria, including the
program's effectiveness and efficiency, achievement of performance
goals, and whether the program has fulfilled its legislative intent.
Unfortunately Congress has a tendency to create commissions and then
ignore their work and continue on with business as usual. This bill
solves this problem. It requires Congress to consider, debate, and vote
on the Commission's report under expedited procedures.
The United States Authorization and Sunset Commission Act of 2007 is
an important step to getting our fiscal house in order and to making
sure that Congress gets back to the hard work of oversight to determine
if programs actually fulfill their stated purpose or yield some
unintended or counterproductive results. Periodic assessments are
essential to good Government and this is what the Commission will
provide to Congress and to taxpayers across the country. For this
reason, I ask that my colleagues join me in cosponsoring the United
States Authorization and Sunset Commission 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 printed in the
Record, as follows:

S. 1731

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 ``United States Authorization
and Sunset Commission Act of 2007''.

SEC. 2. DEFINITIONS.

In this Act--
(1) the term ``agency'' means an Executive agency as
defined under section 105 of title 5, United States Code;
(2) the term ``Commission'' means the United States
Authorization and Sunset Commission established under section
3; and
(3) the term ``Commission Schedule and Review bill'' means
the proposed legislation submitted to Congress under section
4(b).

[[Page S8704]]

SEC. 3. ESTABLISHMENT OF COMMISSION.

(a) Establishment.--There is established the United States
Authorization and Sunset Commission.
(b) Composition.--The Commission shall be composed of 8
members (in this Act referred to as the ``members''), as
follows:
(1) Four members appointed by the majority leader of the
Senate, 1 of whom may include the majority leader of the
Senate, with minority members appointed with the consent of
the minority leader of the Senate.
(2) Four members appointed by the Speaker of the House of
Representatives, 1 of whom may include the Speaker of the
House of Representatives, with minority members appointed
with the consent of the minority leader of the House of
Representatives.
(3) The Director of the Congressional Budget Office and the
Comptroller of the Government Accountability Office shall be
non-voting ex officio members of the Commission.
(c) Qualifications of Members.--
(1) In general.--
(A) Senate members.--Of the members appointed under
subsection (b)(1), 4 shall be members of the Senate (not more
than 2 of whom may be of the same political party).
(B) House of representative members.--Of the members
appointed under subsection (b)(2), 4 shall be members of the
House of Representatives, not more than 2 of whom may be of
the same political party.
(2) Continuation of membership.--
(A) In general.--If a member was appointed to the
Commission as a Member of Congress and the member ceases to
be a Member of Congress, that member shall cease to be a
member of the Commission.
(B) Actions of commission unaffected.--Any action of the
Commission shall not be affected as a result of a member
becoming ineligible under subparagraph (A).
(d) Initial Appointments.--Not later than 90 days after the
date of enactment of this Act, all initial appointments to
the Commission shall be made.
(e) Chairperson; Vice Chairperson.--
(1) Initial chairperson.--An individual shall be designated
by the Speaker of the House of Representatives from among the
members initially appointed under subsection (b)(2) to serve
as chairperson of the Commission for a period of 2 years.
(2) Initial vice chairperson.--An individual shall be
designated by the majority leader of the Senate from among
the individuals initially appointed under subsection (b)(1)
to serve as vice-chairperson of the Commission for a period
of 2 years.
(3) Alternate appointments of chairmen and vice chairmen.--
Following the termination of the 2-year period described
under paragraphs (1) and (2), the Speaker and the majority
leader of the Senate shall alternate every 2 years in
appointing the chairperson and vice-chairperson of the
Commission.
(f) Terms of Members.--
(1) Members of congress.--Each member appointed to the
Commission shall serve for a term of 6 years, except that, of
the members first appointed under paragraphs (1) and (2) of
subsection (b), 2 members shall be appointed to serve a term
of 3 years.
(2) Term limit.--A member of the Commission who serves more
than 3 years of a term may not be appointed to another term
as a member.
(g) Initial Meeting.--If, after 90 days after the date of
enactment of this Act, 5 or more members of the Commission
have been appointed--
(1) members who have been appointed may--
(A) meet; and
(B) select a chairperson from among the members (if a
chairperson has not been appointed) who may serve as
chairperson until the appointment of a chairperson; and
(2) the chairperson shall have the authority to begin the
operations of the Commission, including the hiring of staff.
(h) Meeting; Vacancies.--After its initial meeting, the
Commission shall meet upon the call of the chairperson or a
majority of its members. Any vacancy in the Commission shall
not affect its powers, but shall be filled in the same manner
in which the original appointment was made.
(i) Powers of the Commission.--
(1) In general.--
(A) Hearings, testimony, and evidence.--The Commission may,
for the purpose of carrying out the provisions of this Act--
(i) hold such hearings and sit and act at such times and
places, take such testimony, receive such evidence,
administer such oaths; and
(ii) require, by subpoena or otherwise, the attendance and
testimony of such witnesses and the production of such books,
records, correspondence, memoranda, papers, and documents,
that the Commission or such designated subcommittee or
designated member may determine advisable.
(B) Subpoenas.--Subpoenas issued under subparagraph (A)(ii)
may be issued to require attendance and testimony of
witnesses and the production of evidence relating to any
matter under investigation by the Commission.
(C) Enforcement.--The provisions of sections 102 through
104 of the Revised Statutes of the United States (2 U.S.C.
192 through 194) shall apply in the case of any failure of
any witness to comply with any subpoena or to testify when
summoned under authority of this paragraph.
(2) Contracting.--The Commission may contract with and
compensate government and private agencies or persons for
services without regard to section 3709 of the Revised
Statutes (41 U.S.C. 5) to enable the Commission to discharge
its duties under this Act.
(3) Information from federal agencies.--The Commission is
authorized to secure directly from any executive department,
bureau, agency, board, commission, office, independent
establishment, or instrumentality of the Government,
information, suggestions, estimates, and statistics for the
purposes of this section. Each such department, bureau,
agency, board, commission, office, establishment, or
instrumentality shall, to the extent authorized by law,
furnish such information, suggestions, estimates, and
statistics directly to the Commission, upon request made by
the chairperson.
(4) Support services.--
(A) Government accountability office.--The Government
Accountability Office is authorized on a nonreimbursable
basis to provide the Commission with administrative services,
funds, facilities, staff, and other support services for the
performance of the functions of the Commission.
(B) General services administration.--The Administrator of
General Services shall provide to the Commission on a
nonreimbursable basis such administrative support services as
the Commission may request.
(C) Agencies.--In addition to the assistance under
subparagraphs (A) and (B), departments and agencies of the
United States are authorized to provide to the Commission
such services, funds, facilities, staff, and other support
services as the Commission may determine advisable as may be
authorized by law.
(5) Postal services.--The Commission may use the United
States mails in the same manner and under the same conditions
as departments and agencies of the United States.
(6) Immunity.--The Commission is an agency of the United
States for purposes of part V of title 18, United States Code
(relating to immunity of witnesses).
(7) Director and staff of the commission.--
(A) Director.--The chairperson of the Commission may
appoint a staff director and such other personnel as may be
necessary to enable the Commission to carry out its
functions, without regard to the provisions of title 5,
United States Code, governing appointments in the competitive
service and without regard to the provisions of chapter 51
and subchapter III of chapter 53 of that title relating to
classification and General Schedule pay rates, except that no
rate of pay fixed under this subsection may exceed the
equivalent of that payable to a person occupying a position
at level II of the Executive Schedule. Any Federal Government
employee may be detailed to the Commission without
reimbursement from the Commission, and such detailee shall
retain the rights, status, and privileges of his or her
regular employment without interruption.
(B) Personnel as federal employees.--
(i) In general.--The executive director and any personnel
of the Commission who are employees shall be employees under
section 2105 of title 5, United States Code, for purposes of
chapters 63, 81, 83, 84, 85, 87, 89, 89A, 89B, and 90 of that
title.
(ii) Members of commission.--Clause (i) shall not be
construed to apply to members of the Commission.
(C) Procurement of temporary and intermittent services.--
With the approval of the majority of the Commission, the
chairperson of the Commission may procure temporary and
intermittent services under section 3109(b) of title 5,
United States Code, at rates for individuals which do not
exceed the daily equivalent of the annual rate of basic pay
prescribed for level V of the Executive Schedule under
section 5316 of such title.
(8) Compensation and travel expenses.--
(A) Compensation.--Members shall not be paid by reason of
their service as members.
(B) Travel expenses.--Each member of the Commission shall
be allowed travel expenses, including per diem in lieu of
subsistence, in accordance with sections 5702 and 5703(b) of
title 5, United States Code.
(j) Authorization of Appropriations.--There are authorized
to be appropriated such sums as necessary for the purposes of
carrying out the duties of the Commission.
(k) Termination.--The Commission shall terminate on
December 31, 2037.

SEC. 4. DUTIES AND RECOMMENDATIONS OF THE UNITED STATES
AUTHORIZATION AND SUNSET COMMISSION.

(a) Schedule and Review.--
(1) In general.--Not later than 18 months after the date of
the enactment of this Act and at least once every 10 years
thereafter, the Commission shall submit to Congress a
legislative proposal that includes the schedule of review and
abolishment of agencies and programs (in this section
referred to as the ``Commission Schedule and Review bill'').
(2) Schedule.--The schedule of the Commission shall provide
a timeline for the Commission's review and proposed
abolishment of--
(A) at least 25 percent of unauthorized agencies or
programs as measured in dollars, including those identified
by the Congressional Budget Office under section 602(e)(3) of
title 2, United States Code; and
(B) if applicable, at least 25 percent of the programs as
measured in dollars identified by the Office of Management
and Budget through its Program Assessment Rating

[[Page S8705]]

Tool program or other similar review program established by
the Office of Management and Budget as ineffective or results
not demonstrated.
(3) Review of agencies.--In determining the schedule for
review and abolishment of agencies under paragraph (1), the
Commission shall provide that any agency that performs
similar or related functions be reviewed concurrently.
(4) Criteria and review.--The Commission shall review each
agency and program identified under paragraph (1) in
accordance with the following criteria as applicable:
(A) The effectiveness and the efficiency of the program or
agency.
(B) The achievement of performance goals (as defined under
section 1115(g)(4) of title 31, United States Code).
(C) The management of the financial and personnel issues of
the program or agency.
(D) Whether the program or agency has fulfilled the
legislative intent surrounding its creation, taking into
account any change in legislative intent during the existence
of the program or agency.
(E) Ways the agency or program could be less burdensome but
still efficient in protecting the public.
(F) Whether reorganization, consolidation, abolishment,
expansion, or transfer of agencies or programs would better
enable the Federal Government to accomplish its missions and
goals.
(G) The promptness and effectiveness of an agency in
handling complaints and requests made under section 552 of
title 5, United States Code (commonly referred to as the
Freedom of Information Act).
(H) The extent that the agency encourages and uses public
participation when making rules and decisions.
(I) The record of the agency in complying with requirements
for equal employment opportunity, the rights and privacy of
individuals, and purchasing products from historically
underutilized businesses.
(J) The extent to which the program or agency duplicates or
conflicts with other Federal agencies, State or local
government, or the private sector and if consolidation or
streamlining into a single agency or program is feasible.
(b) Schedule and Abolishment of Agencies and Programs.--
(1) In general.--Not later than 18 months after the date of
the enactment of this Act and at least once every 10 years
thereafter, the Commission shall submit to the Congress a
Commission Schedule and Review bill that--
(A) includes a schedule for review of agencies and
programs; and
(B) abolishes any agency or program 2 years after the date
the Commission completes its review of the agency or program,
unless the agency or program is reauthorized by Congress.
(2) Expedited congressional consideration procedures.--In
reviewing the Commission Schedule and Review bill, Congress
shall follow the expedited procedures under section 6.
(c) Recommendations and Legislative Proposals.--
(1) Report.--Not later than 2 years after the date of
enactment of this Act, the Commission shall submit to
Congress and the President--
(A) a report that reviews and analyzes according to the
criteria established under subsection (a)(4) for each agency
and program to be reviewed in the year in which the report is
submitted under the schedule submitted to Congress under
subsection (a)(1);
(B) a proposal, if appropriate, to reauthorize, reorganize,
consolidate, expand, or transfer the Federal programs and
agencies to be reviewed in the year in which the report is
submitted under the schedule submitted to Congress under
subsection (a)(1); and
(C) legislative provisions necessary to implement the
Commission's proposal and recommendations.
(2) Additional reports.--The Commission shall submit to
Congress and the President additional reports as prescribed
under paragraph (1) on or before June 30 of every other year.
(d) Rule of Construction.--Nothing in this section shall be
construed to limit the power of the Commission to review any
Federal program or agency.
(e) Approval of Reports.--The Commission Schedule and
Review bill and all other legislative proposals and reports
submitted under this section shall require the approval of
not less than 5 members of the Commission.

SEC. 5. EXPEDITED CONSIDERATION OF COMMISSION
RECOMMENDATIONS.

(a) Introduction and Committee Consideration.--
(1) Introduction.--If any legislative proposal with
provisions is submitted to Congress under section 4(c), a
bill with that proposal and provisions shall be introduced in
the Senate by the majority leader, and in the House of
Representatives, by the Speaker. Upon introduction, the bill
shall be referred to the appropriate committees of Congress
under paragraph (2). If the bill is not introduced in
accordance with the preceding sentence, then any Member of
Congress may introduce that bill in their respective House of
Congress beginning on the date that is the 5th calendar day
that such House is in session following the date of the
submission of such proposal with provisions.
(2) Committee consideration.--
(A) Referral.--A bill introduced under paragraph (1) shall
be referred to any appropriate committee of jurisdiction in
the Senate, any appropriate committee of jurisdiction in the
House of Representatives, the Committee on the Budget and the
Committee on Homeland Security and Governmental Affairs of
the Senate, and the Committee on the Budget and the Committee
on Homeland Security and Governmental Affairs of the House of
Representatives.
(B) Reporting.--Not later than 30 calendar days after the
introduction of the bill, each committee of Congress to which
the bill was referred shall report the bill or a committee
amendment thereto.
(C) Discharge of committee.--If a committee to which is
referred a bill has not reported such bill at the end of 30
calendar days after its introduction or at the end of the
first day after there has been reported to the House involved
a bill, whichever is earlier, such committee shall be deemed
to be discharged from further consideration of such bill, and
such bill shall be placed on the appropriate calendar of the
House involved.
(b) Expedited Procedure.--
(1) Consideration.--
(A) In general.--Not later than 5 calendar days after the
date on which a committee has been discharged from
consideration of a bill, the majority leader of the Senate,
or the majority leader's designee, or the Speaker of the
House of Representatives, or the Speaker's designee, shall
move to proceed to the consideration of the committee
amendment to the bill, and if there is no such amendment, to
the bill. It shall also be in order for any member of the
Senate or the House of Representatives, respectively, to move
to proceed to the consideration of the bill at any time after
the conclusion of such 5-day period.
(B) Motion to proceed.--A motion to proceed to the
consideration of a bill is highly privileged in the House of
Representatives and is privileged in the Senate and is not
debatable. The motion is not subject to amendment, to a
motion to postpone consideration of the bill, or to a motion
to proceed to the consideration of other business. A motion
to reconsider the vote by which the motion to proceed is
agreed to or not agreed to shall not be in order. If the
motion to proceed is agreed to, the Senate or the House of
Representatives, as the case may be, shall immediately
proceed to consideration of the bill without intervening
motion, order, or other business, and the bill shall remain
the unfinished business of the Senate or the House of
Representatives, as the case may be, until disposed of.
(C) Limited debate.--Debate on the bill and all amendments
thereto and on all debatable motions and appeals in
connection therewith shall be limited to not more than 50
hours, which shall be divided equally between those favoring
and those opposing the bill. A motion further to limit debate
on the bill is in order and is not debatable. All time used
for consideration of the bill, including time used for quorum
calls (except quorum calls immediately preceding a vote) and
voting, shall come from the 50 hours of debate.
(D) Amendments.--No amendment that is not germane to the
provisions of the bill shall be in order in the Senate. In
the Senate, an amendment, any amendment to an amendment, or
any debatable motion or appeal is debatable for not to exceed
1 hour to be divided equally between those favoring and those
opposing the amendment, motion, or appeal.
(E) Vote on final passage.--Immediately following the
conclusion of the debate on the bill, and the disposition of
any pending amendments under subparagraph (D), the vote on
final passage of the bill shall occur.
(F) Other motions not in order.--A motion to postpone
consideration of the bill, a motion to proceed to the
consideration of other business, or a motion to recommit the
bill is not in order. A motion to reconsider the vote by
which the bill is agreed to or not agreed to is not in order.
(2) Consideration by other house.--If, before the passage
by one House of the bill that was introduced in such House,
such House receives from the other House a bill as passed by
such other House--
(A) the bill of the other House shall not be referred to a
committee and may only be considered for final passage in the
House that receives it under subparagraph (C);
(B) the procedure in the House in receipt of the bill of
the other House, with respect to the bill that was introduced
in the House in receipt of the bill of the other House, shall
be the same as if no bill had been received from the other
House; and
(C) notwithstanding subparagraph (B), the vote on final
passage shall be on the bill of the other House.

Upon disposition of a bill that is received by one House from
the other House, it shall no longer be in order to consider
the bill that was introduced in the receiving House.
(3) Consideration in conference.--
(A) Convening of conference.--Immediately upon final
passage of a bill that results in a disagreement between the
2 Houses of Congress with respect to a bill, conferees shall
be appointed and a conference convened.
(B) Action on conference reports in the senate.--
(i) Motion to proceed.--The motion to proceed to
consideration in the Senate of the conference report on a
bill may be made even though a previous motion to the same
effect has been disagreed to.
(ii) Debate.--Consideration in the Senate of the conference
report (including a message between Houses) on a bill, and
all

[[Page S8706]]

amendments in disagreement, including all amendments thereto,
and debatable motions and appeals in connection therewith,
shall be limited to 20 hours, equally divided and controlled
by the majority leader and the minority leader or their
designees. Debate on any debatable motion or appeal related
to the conference report (or a message between Houses) shall
be limited to 1 hour, to be equally divided between, and
controlled by, the mover and the manager of the conference
report (or a message between Houses).
(iii) Conference report defeated.--Should the conference
report be defeated, debate on any request for a new
conference and the appointment of conferrees shall be limited
to 1 hour, to be equally divided between, and controlled by,
the manager of the conference report and the minority leader
or the minority leader's designee, and should any motion be
made to instruct the conferees before the conferees are
named, debate on such motion shall be limited to \1/2\ hour,
to be equally divided between, and controlled by, the mover
and the manager of the conference report. Debate on any
amendment to any such instructions shall be limited to 20
minutes, to be equally divided between and controlled by the
mover and the manager of the conference report. In all cases
when the manager of the conference report is in favor of any
motion, appeal, or amendment, the time in opposition shall be
under the control of the minority leader or the minority
leader's designee.
(iv) Amendments in disagreement.--In any case in which
there are amendments in disagreement, time on each amendment
shall be limited to 30 minutes, to be equally divided
between, and controlled by, the manager of the conference
report and the minority leader or the minority leader's
designee. No amendment that is not germane to the provisions
of such amendments shall be received.
(v) Limitation on motion to recommit.--A motion to recommit
the conference report is not in order.
(c) Rules of the Senate and the House of Representatives.--
This section is enacted by Congress--
(1) as an exercise of the rulemaking power of the Senate
and the House of Representatives, respectively, and is deemed
to be part of the rules of each House, respectively, but
applicable only with respect to the procedure to be followed
in that House in the case of a bill, and it supersedes other
rules only to the extent that it is inconsistent with such
rules; and
(2) with full recognition of the constitutional right of
either House to change the rules (so far as they relate to
the procedure of that House) at any time, in the same manner,
and to the same extent as in the case of any other rule of
that House.

SEC. 6. EXPEDITED CONSIDERATION OF COMMISSION SCHEDULE AND
REVIEW BILL.

(a) Introduction and Committee Consideration.--
(1) Introduction.--The Commission Schedule and Review bill
submitted under section 4(b) shall be introduced in the
Senate by the majority leader, or the majority leader's
designee, and in the House of Representatives, by the
Speaker, or the Speaker's designee. Upon such introduction,
the Commission Schedule and Review bill shall be referred to
the appropriate committees of Congress under paragraph (2).
If the Commission Schedule and Review bill is not introduced
in accordance with the preceding sentence, then any member of
Congress may introduce the Commission Schedule and Review
bill in their respective House of Congress beginning on the
date that is the 5th calendar day that such House is in
session following the date of the submission of such
aggregate legislative language provisions.
(2) Committee consideration.--
(A) Referral.--A Commission Schedule and Review bill
introduced under paragraph (1) shall be referred to any
appropriate committee of jurisdiction in the Senate, any
appropriate committee of jurisdiction in the House of
Representatives, the Committee on the Budget and the
Committee on Homeland Security and Governmental Affairs of
the Senate and the Committee on the Budget and the Committee
on Oversight and Government Reform of the House of
Representatives. A committee to which a Commission Schedule
and Review bill is referred under this paragraph may review
and comment on such bill, may report such bill to the
respective House, and may not amend such bill.
(B) Reporting.--Not later than 30 calendar days after the
introduction of the Commission Schedule and Review bill, each
Committee of Congress to which the Commission Schedule and
Review bill was referred shall report the bill.
(C) Discharge of committee.--If a committee to which is
referred a Commission Schedule and Review bill has not
reported such Commission Schedule and Review bill at the end
of 30 calendar days after its introduction or at the end of
the first day after there has been reported to the House
involved a Commission Schedule and Review bill, whichever is
earlier, such committee shall be deemed to be discharged from
further consideration of such Commission Schedule and Review
bill, and such Commission Schedule and Review bill shall be
placed on the appropriate calendar of the House involved.
(b) Expedited Procedure.--
(1) Consideration.--
(A) In general.--Not later than 5 calendar days after the
date on which a committee has been discharged from
consideration of a Commission Schedule and Review bill, the
majority leader of the Senate, or the majority leader's
designee, or the Speaker of the House of Representatives, or
the Speaker's designee, shall move to proceed to the
consideration of the Commission Schedule and Review bill. It
shall also be in order for any member of the Senate or the
House of Representatives, respectively, to move to proceed to
the consideration of the Commission Schedule and Review bill
at any time after the conclusion of such 5-day period.
(B) Motion to proceed.--A motion to proceed to the
consideration of a Commission Schedule and Review bill is
highly privileged in the House of Representatives and is
privileged in the Senate and is not debatable. The motion is
not subject to amendment, to a motion to postpone
consideration of the Commission Schedule and Review bill, or
to a motion to proceed to the consideration of other
business. A motion to reconsider the vote by which the motion
to proceed is agreed to or not agreed to shall not be in
order. If the motion to proceed is agreed to, the Senate or
the House of Representatives, as the case may be, shall
immediately proceed to consideration of the Commission
Schedule and Review bill without intervening motion, order,
or other business, and the Commission Schedule and Review
bill shall remain the unfinished business of the Senate or
the House of Representatives, as the case may be, until
disposed of.
(C) Limited debate.--Debate on the Commission Schedule and
Review bill and on all debatable motions and appeals in
connection therewith shall be limited to not more than 10
hours, which shall be divided equally between those favoring
and those opposing the Commission Schedule and Review bill. A
motion further to limit debate on the Commission Schedule and
Review bill is in order and is not debatable. All time used
for consideration of the Commission Schedule and Review bill,
including time used for quorum calls (except quorum calls
immediately preceding a vote) and voting, shall come from the
10 hours of debate.
(D) Amendments.--No amendment to the Commission Schedule
and Review bill shall be in order in the Senate and the House
of Representatives.
(E) Vote on final passage.--Immediately following the
conclusion of the debate on the Commission Schedule and
Review bill, the vote on final passage of the Commission
Schedule and Review bill shall occur.
(F) Other motions not in order.--A motion to postpone
consideration of the Commission Schedule and Review bill, a
motion to proceed to the consideration of other business, or
a motion to recommit the Commission Schedule and Review bill
is not in order. A motion to reconsider the vote by which the
Commission Schedule and Review bill is agreed to or not
agreed to is not in order.
(2) Consideration by other house.--If, before the passage
by one House of the Commission Schedule and Review bill that
was introduced in such House, such House receives from the
other House a Commission Schedule and Review bill as passed
by such other House--
(A) the Commission Schedule and Review bill of the other
House shall not be referred to a committee and may only be
considered for final passage in the House that receives it
under subparagraph (C);
(B) the procedure in the House in receipt of the Commission
Schedule and Review bill of the other House, with respect to
the Commission Schedule and Review bill that was introduced
in the House in receipt of the Commission Schedule and Review
bill of the other House, shall be the same as if no
Commission Schedule and Review bill had been received from
the other House; and
(C) notwithstanding subparagraph (B), the vote on final
passage shall be on the Commission Schedule and Review bill
of the other House. Upon disposition of a Commission Schedule
and Review bill that is received by one House from the other
House, it shall no longer be in order to consider the
Commission Schedule and Review bill that was introduced in
the receiving House.
(c) Rules of the Senate and the House of Representatives.--
This section is enacted by Congress--
(1) as an exercise of the rulemaking power of the Senate
and the House of Representatives, respectively, and is deemed
to be part of the rules of each House, respectively, but
applicable only with respect to the procedure to be followed
in that House in the case of a Commission Schedule and Review
bill, and it supersedes other rules only to the extent that
it is inconsistent with such rules; and
(2) with full recognition of the constitutional right of
either House to change the rules (so far as they relate to
the procedure of that House) at any time, in the same manner,
and to the same extent as in the case of any other rule of
that House.

Mr. VOINOVICH. Mr. President, I am pleased to join my good friend and
colleague Senator Cornyn in introducing the United States Authorization
and Sunset Commission Act of 2007. This legislation would create a
bipartisan commission to make recommendations to Congress on whether to
reauthorize, reorganize, or terminate Federal programs. It would
establish a systematic process to review unauthorized programs and
agencies, and, if applicable, programs that are rated as ineffective or
results not demonstrated under the

[[Page S8707]]

Program Assessment Rating Tool, PART. The Comptroller General and the
Director of the Congressional Budget Office, CBO, would serve as ex-
officio members, bringing their knowledge and experience and that of
their organizations to the process.
Earlier this year, as it does every year, the CBO reported on
programs that at one time had an explicit authorization that has either
expired or will expire during the current session. This is always a
lengthy report that runs 75 pages or more. In recent years, the total
amount of unauthorized programs receiving appropriations reported by
CBO has ranged between $160 billion and $170 billion annually.
I make this point, not to criticize or to imply that all unauthorized
programs should be eliminated. Instead, it is to point out that what we
are doing now is not working for us. We know that oversight is an
important part of our job, but oversight takes time. How do we explain
to our constituents that we do not have the time to distinguish between
worthwhile programs and those that have outlived their purpose, are
poorly targeted, operate inefficiently, or simply are not producing
results?
As a sponsor of The Stop Over-Spending Act of 2007, ``S.O.S.,''
legislation, which includes several provisions from bills I introduced
earlier this year, I want to work with my colleagues to pass
legislation that allows us to convert some of the time spent on the
annual budget cycle into time spent on oversight. A biennial budget
cycle plus commissions such as this one and others that I have proposed
to examine entitlement programs and increase program accountability all
have a similar goal--to provide the time and the tools to reinvigorate
congressional oversight.
This legislation does not take away our obligation to make difficult
decisions about what programs to continue and those that we can no
longer afford to support. What it does do is provide an opportunity to
work smarter. I believe by establishing this Commission to do a
thorough examination of programs and agencies, using established
criteria, and a transparent reporting process, that we can carry out
our responsibilities more efficiently and effectively.
I urge my colleagues to support The United States Authorization and
Sunset Commission Act of 2007.
______

By Mr. DURBIN (for himself, Mr. Schumer, Ms. Stabenow, and Mr.
Brown):
S. 1733. A bill to authorize funds to prevent housing discrimination
through the use of nationwide testing, to increase funds for the Fair
Housing Initiatives Program, and for other purposes; to the Committee
on Banking, Housing, and Urban Affairs.
Mr. DURBIN. Mr. President, today, I introduce the Housing Fairness
Act of 2007, legislation that would strengthen efforts to detect
discrimination and enforce equal housing opportunities. This
legislation is especially timely given that June is National
Homeownership Month.
The Housing Fairness Act promotes equal housing opportunities for all
people by authorizing funds to process complaints, investigate cases of
housing discrimination, and develop and operate education and outreach
programs to inform the general public of fair housing rights. The
legislation also creates a competitive matching grant program for
private nonprofit organizations to examine the causes of housing
discrimination and segregation and their effects on education, poverty
and economic development.
Despite the passage of the Fair Housing Act almost 40 years ago, more
than 4 million fair housing violations still occur each year. When the
Department of Housing and Urban Development designated certain real
estate companies for investigation, studies uncovered an 87 percent
rate of racial steering and a 20 percent denial rate for African-
Americans and Latinos. In part due to fair housing violations, the
homeownership gap between people of different racial and ethnic groups
is larger than it was in 1940. These facts confirm that we need to be
doing more to promote fair housing.
I invite my colleagues to cosponsor this legislation and work with me
to find solutions to further detect discrimination and enforce the Fair
Housing 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. 1733

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 ``Housing Fairness Act of
2007''.

SEC. 2. TESTING FOR DISCRIMINATION.

(a) In General.--The Secretary of Housing and Urban
Development shall conduct a nationwide program of testing
to--
(1) detect and document differences in the treatment of
persons seeking to rent or purchase housing or obtain or
refinance a home mortgage loan, and measure patterns of
adverse treatment because of the race, color, religion, sex,
familial status, disability status, or national origin of a
renter, home buyer, or borrower; and
(2) measure the prevalence of such discriminatory practices
across the housing and mortgage lending markets as a whole.
(b) Administration.--The Secretary of Housing and Urban
Development shall enter into agreements with qualified fair
housing enforcement organizations, as such organizations are
defined under subsection (h) of section 561 of the Housing
and Community Development Act of 1987 (42 U.S.C. 3616a(h)),
for the purpose of conducting the testing required under
subsection (a) .
(c) Report.--The Secretary of Housing and Urban Development
shall report to Congress--
(1) on a biennial basis, the results of each round of
testing required under subsection (a) along with any
recommendations or proposals for legislative or
administrative action to address any issues raised by such
testing; and
(2) on an annual basis, a detailed summary of the calls
received by the Fair Housing Administration's 24-hour toll-
free telephone hotline.
(d) Use of Results.--The results of any testing required
under subsection (a) may be used as the basis for the
Secretary, or any State or local government or agency, public
or private nonprofit organization or institution, or other
public or private entity that the Secretary has entered into
a contract or cooperative agreement with under section 561 of
the Housing and Community Development Act of 1987 (42 U.S.C.
3616a) to commence, undertake, or pursue any investigation or
enforcement action to remedy any discrimination uncovered as
a result of such testing.
(e) Definitions.--As used in this section:
(1) Disability status.--The term ``disability status'' has
the same meaning given the term ``handicap'' in section 802
of the Civil Rights Act of 1968 (42 U.S.C. 3602).
(2) Familial status.--The term ``familial status'' has the
same meaning given that term in section 802 of the Civil
Rights Act of 1968 (42 U.S.C. 3602).
(f) Authorization of Appropriations.--There are authorized
to be appropriated to carry out the provisions of this
section $20,000,000 for fiscal year 2008 and each fiscal year
thereafter.

SEC. 3. INCREASE IN FUNDING FOR THE FAIR HOUSING INITIATIVES
PROGRAM.

Section 561 of the Housing and Community Development Act of
1987 (42 U.S.C. 3616a) is amended--
(1) in subsection (b)--
(A) in paragraph (1), by inserting ``qualified'' before
``private nonprofit fair housing enforcement
organizations,''; and
(B) in paragraph (2), by inserting ``qualified'' before
``private nonprofit fair housing enforcement
organizations,'';
(2) by striking subsection (g) and inserting the following:
``(g) Authorization of Appropriations.--
``(1) In general.--There are authorized to be appropriated
to carry out the provisions of this section $52,000,000 for
each of fiscal years 2008 through 2012, of which--
``(A) not less than 75 percent of such amounts shall be for
private enforcement initiatives authorized under subsection
(b);
``(B) not more than 10 percent of such amounts shall be for
education and outreach programs under subsection (d); and
``(C) any remaining amounts shall be used for program
activities authorized under this section.
``(2) Availability.--Any amount appropriated under this
section shall remain available until expended.'';
(3) in subsection (h), in the matter following subparagraph
(C), by inserting ``and meets the criteria described in
subparagraphs (A) and (C)'' after ``subparagraph (B)''; and
(4) in subsection (d)--
(A) in paragraph (1)--
(i) in subparagraph (C), by striking ``; and'' and
inserting a semicolon;
(ii) in subparagraph (D), by striking the period and
inserting ``; and''; and
(iii) by adding at the end the following new subparagraph:
``(E) websites and other media outlets.'';
(B) in paragraph (2), by striking ``or other public or
private entities'' and inserting ``or other public or private
nonprofit entities''; and
(C) in paragraph (3), by striking ``or other public or
private entities'' and inserting ``or other public or private
nonprofit entities''.

[[Page S8708]]

SEC. 4. SENSE OF CONGRESS.

It is the sense of Congress that the Secretary of Housing
and Urban Development should--
(1) fully comply with the requirements of section 561(d) of
the Housing and Community Development Act of 1987 (42 U.S.C.
3616a(d)) to establish, design, and maintain a national
education and outreach program to provide a centralized,
coordinated effort for the development and dissemination of
the fair housing rights of individuals who seek to rent,
purchase, sell, or facilitate the sale of a home;
(2) utilize all amounts appropriated for such education and
outreach program under section 561(g) of such Act; and
(3) promulgate regulations regarding the fair housing
obligations of each recipient of Federal housing funds to
affirmatively further fair housing, as that term is defined
under title VIII of the Civil Rights Act of 1968 (42 U.S.C.
3601 et seq.).

SEC. 5. GRANTS TO PRIVATE ENTITIES TO STUDY HOUSING
DISCRIMINATION.

(a) Grant Program.--The Secretary of Housing and Urban
Development shall carry out a competitive matching grant
program to assist private nonprofit organizations in--
(1) conducting comprehensive studies that examine--
(A) the causes of housing discrimination and segregation;
and
(B) the effects of housing discrimination and segregation
on education, poverty, and economic development; and
(2) implementing pilot projects that test solutions that
will help prevent or alleviate housing discrimination and
segregation.
(b) Eligibility.--To be eligible to receive a grant under
this section, a private nonprofit organization shall--
(1) submit an application to the Secretary of Housing and
Urban Development, containing such information as the
Secretary shall require; and
(2) agree to provide matching non-Federal funds for 25
percent of the total amount of the grant, such funds may
include items donated on an in-kind contribution basis.
(c) Preference.--In awarding any grant under this section,
the Secretary of Housing and Urban Development shall give
preference to any applicant who is--
(1) a qualified fair housing enforcement organization, as
such organization is defined under subsection (h) of section
561 of the Housing and Community Development Act of 1987 (42
U.S.C. 3616a(h)); or
(2) a partner of any such organization.
(d) Authorization of Appropriations.--There are authorized
to be appropriated to carry out the provisions of this
section $5,000,000 for each of fiscal years 2008 through
2012.
______

By Mrs. BOXER (for herself, Mr. Lautenberg, and Mr. Kerry):
S. 1734. A bill to provide for prostate cancer imaging research and
education; to the Committee on Health, Education, Labor, and Pensions.
Mrs. BOXER. Mr. President, today I rise to introduce the Prostate
Research, Imaging, and Men's Education Act. This important legislation
addresses the urgent need for the development of new technologies to
detect and diagnose prostate cancer, and for the education of the
dangers of this deadly disease.
I thank my colleagues, Senator Frank Lautenberg and Senator John
Kerry, for joining me as original cosponsors of this important
legislation.
Prostate cancer is the second most common cancer in the United
States, and the second leading cause of cancer related deaths in men.
This cancer strikes one in every six men, making it even more prevalent
than breast cancer, which strikes one in every seven women.
In 2007, more than 218,000 men will be diagnosed with prostate
cancer, and more than 27,000 men will die from the disease. One new
case occurs every 2.5 minutes and a man dies from prostate cancer every
19 minutes.
The Prostate Research, Imaging, and Men's Education Act, also known
as the PRIME Act, will mirror the investment the Federal Government
made in advanced imaging technologies, which led to life-saving
breakthroughs in detection, diagnosis and treatment of breast cancer.
This bill directs the Secretary of the Department of Health and Human
Services, HHS, to expand research on prostate cancer, and provides the
resources to develop innovative advanced imaging technologies for
prostate cancer detection, diagnosis, and treatment.
The Prostate Research, Imaging, and Men's Education Act would also
create a national campaign conducted through HHS to increase awareness
about the need for prostate cancer screening, and the development of
better screening techniques. Since African American men are 56 percent
more likely to develop prostate cancer compared with Caucasian men and
nearly 2.5 times as likely to die from the disease, this campaign will
work with the Offices of Minority Health at HHS and the Centers for
Disease Control and Prevention to ensure that this effort will reach
the men most at risk from this disease.
The Prostate Research, Imaging and Men's Education Act will also
promote research that improves prostate cancer screening blood tests.
According to a recent National Cancer Institute study, current blood
tests result in false-negative reassurances and numerous false-positive
alarms. Some 15 percent of men with normal blood test levels actually
have prostate cancer. Even when levels are abnormal, some 88 percent of
men end up not having prostate cancer but undergoing unnecessary
biopsies. Furthermore, the prostate is one of the last organs in a
human body where biopsies are performed blindly, which can miss cancer
even when multiple samples are taken.
Government initiative in research and education can be the key to
diagnosing prostate cancer earlier and more accurately. This
legislation would strengthen our efforts to fight this disease.
As June is Men's Health Month, this is an ideal time to draw
attention to the issue affecting so many men across the Nation. I ask
all my fellow Senators to join with me in ensuring the health of our
husbands, brothers, sons, and friends against this disease.
______

By Mr. DODD:
S. 1736. A bill to amend title II of the Social Security Act to
provide that the eligibility requirements for disability insurance
benefits under which an individual must have 20 quarters of Social
Security coverage in the 40 quarters preceding a disability shall not
be applicable in the case of a disabled individual suffering from a
covered terminal disease; to the Committee on Finance.
Mr. DODD. Mr. President, today I am introducing the Claire Collier
Social Security Disability Insurance Fairness Act. This legislation
will ensure that individuals suffering from certain terminal diseases
are entitled to receive Social Security disability benefits. Under
current law, an individual who contracts a covered terminal illness,
and who has not been part of the workforce for a period of time, may
not qualify for Social Security disability benefits they would
otherwise be entitled to.
This bill is named after Claire Collier, a Stamford, Connecticut
mother of three, who I first met a few years ago after she was
diagnosed with amyotrophic lateral sclerosis, ALS, in 2003. ALS,
commonly known as Lou Gehrig's disease, first strikes the nerve cells,
then weakens the muscles, causes paralysis and tragically leads to
death.
Three years ago, Claire applied for Social Security disability
benefits. However, she was denied the benefits because she did not have
enough work credits. Ms. Collier, who worked for more than 15 years as
an events planner, does not qualify for Social Security disability
benefits, even though she paid Social Security and Medicare taxes for
more than 15 years. The reason is the Social Security Act mandates that
an individual earn 20 quarters of Social Security earnings during the
10 years preceding a disability to collect benefits. This discriminates
against people who have earned the required number of credits outside
of the time period prescribed under current law.
Under the present system, hardworking Americans, such as Claire
Collier, are being denied benefits at a time when they need them most.
In Claire's case, the rules are especially unfair since she has been
penalized for choosing to stay at home with her children prior to being
diagnosed with ALS.
The bill I am sponsoring will change the eligibility standard. The
Claire Collier legislation will amend the Social Security Act to
provide that the eligibility standard for disability insurance benefits
not be applicable in the case of a disabled individual suffering from a
terminal illness.
Passage of this important legislation will simply ensure fairness. We
should reward individuals who contribute to Social Security, not punish
them. The Claire Collier Social Security Disability Insurance Fairness
Act will eliminate inequity in the current system. I look forward to
working with

[[Page S8709]]

my colleagues to see that this legislation is not only passed by this
body soon, but that it is signed into law.
______

By Mr. BIDEN (for himself and Mrs. Boxer)
S. 1738. A bill to establish a Special Counsel for Child Exploitation
Prevention and Interdiction within the Office of the Deputy Attorney
General, to improve the Internet Crimes Against Children Task Force, to
increase resources for regional computer forensic labs, and to make
other improvements to increase the ability of law enforcement agencies
to investigate and prosecute predators; to the Committee on the
Judiciary.
Mr. BIDEN. Mr. President, I rise today to introduce the Combating
Child Exploitation Act of 2007. This legislation takes a bold step
forward in addressing child exploitation.
And, Mr. President, let me assure you, we need bold action. We have
taken some important steps here in the Senate, including passing the
Jacob Weterling Act, the Pam Lyncher Act, the Amber Alert program, and
last year's Adam Walsh Act.
But, this is a problem that keeps growing and growing, and we need
bold action to address this problem. If we do not act, we will probably
be back here naming a new bill after another unfortunate child victim.
The bottom line is that the Internet has facilitated an exploding,
multi-billion dollar market for child pornography, with 20,000 new
images posted every week. This is a market that can only be supplied by
the continued sexual assault and exploitation of more children and the
research shows that victims are getting younger and they are being
exposed to more sadistic abuse.
The FBI and the Department of Justice have testified before Congress
that there are hundreds of thousands of people trafficking child
pornography in this country and millions around the world.
We are not making a dent in this problem.
Don't get me wrong, there are many Federal, State and local
investigators and prosecutors out there working tirelessly, but need to
do much more.
We have not dedicated enough Federal agents to this problem and we
have not provided enough support for States and local government.
The most troubling aspect, one that led to the drafting of this
legislation is that we know where many of these people are and if we
set the right priorities we can go pick them up.
Let me repeat that, we have new investigative techniques that will
allow us to identify many of the people who are trafficking child
pornography and we can go pick them up.
A very conservative estimate is that there are more than 400,000
people who we know who are trafficking child pornography on the
Internet in the U.S. right now.
We can, with minimal effort, take these people down. But, due to lack
of resources we are investigating less than 2 percent of these cases.
Again, we are only investigating 2 percent of the known child
pornography traffickers.
We also know that when law enforcement agents do investigate these
cases, there is a local abused child in 30 percent off the cases. And,
research shows that at least 55 percent of child pornography possessors
have previously sexually assaulted children or attempted to do so. So,
by picking up these known offenders, we are saving children.
Finally, it is important to note that every time one of these images
or videos are shared, the child is victimized again and again.
So, to help ensure that law enforcement has the capacity to get the
job done, I am introducing the Combating Child Exploitation Act of
2007.
First, this legislation will establish a Special Counsel in the
Deputy Attorney General's Office to coordinate all activities related
to preventing child exploitation. This will be one person who will be
held accountable for results.
We will also congressionally require that there be at least one
Internet Crimes Against Children Task Force, CAC, in each State. This
program is poised to become the backbone for our investigative efforts
here in the U.S. by forming a network of highly trained investigators
to focus exclusively on combating child exploitation. Under this bill,
we will triple the funding for the ICAC program to help with hiring,
training, and investigative resources to form this Nation-wide network.
In addition, we will authorize over 250 new Federal agents to focus
exclusively on this problem, including 125 new FBI agents, which will
double the number of agents under the Innocent Images Program at the
FBI, 95 new agents for the Immigration and Customs Enforcement Agency,
ICE, and 31 new postal inspectors.
This bill will help us form a coordinated effort to go after child
predators. As stated previously, we know where many of these people are
and we need to go get them.
In my view, it is inexcusable that we are not putting the resources
toward tracking the ones down who we know about and doing much more to
find the others who are lurking in the shadows.
This legislation will get us on the right track and I urge my
colleagues to support this effort.
______

By Mr. ROCKEFELLER (for himself and Mr. Brown):
S. 1739. A bill to amend section 35 of the Internal Revenue Code of
1986 to improve the health coverage tax credit, and for other purposes;
to the Committee on Finance.
Mr. ROCKEFELLER. Mr. President, last month, the Government
Accountability Office, GAO, released yet another report about the Trade
Adjustment Assistance, TAA, health coverage tax credit, HCTC. The
report confirms what many in Congress have been saying since the HCTC
program began, the credit is not enough, the program has several
barriers to enrollment, the premiums are prohibitively high for some
workers because of medical underwriting, and the program is very
confusing and expensive to administer. Although the GAO reported a $19
million decrease in costs of administration between 2003 and the end of
fiscal year 2006, administrative costs still make up approximately 34
percent of the total spending for the HCTC.
The Trade Adjustment Assistance Act is up for reauthorization this
year. It is long past time for Congress to focus on the problems with
the TAA health coverage tax credit and reauthorization presents us with
that opportunity. That is why I am introducing legislation today that
will make much-needed improvements to the HCTC program. And, I am proud
that the distinguished Senator from Ohio, Mr. Brown, is joining me in
introducing this important bill. The TAA Health Coverage Improvement
Act of 2007 offers solutions to many of the problems with the HCTC
identified by the GAO. This legislation will go a long way to make the
TAA health care tax credit a realistic option for displaced workers and
their families.
When Congress passed the Trade Act of 2002, we made a promise to
American workers that the potential loss of jobs will not equal the
loss of health care coverage. Unfortunately, Congress has failed to
make good on that promise. Since we passed this bill, I have heard from
steel retirees and widows in my State about how unaffordable the TAA
health care tax credit is. And I have been very frustrated, just as I
was when this bill passed, that we were not able to make the credit
more affordable and accessible for people who need it the most--laid-
off workers and retirees with very limited income. We can fix these
problems by including provisions from the TAA Health Coverage
Improvement Act in the TAA reauthorization bill.
For a good number of supporters of the Trade Act of 2002, the health
insurance tax credit was the single most important factor in overcoming
their concerns about giving the President fast-track authority to move
trade agreements through Congress. In my own judgment, the fast-track
would not have passed Congress without the health care tax credit. The
TAA health credit was the trade-off to balance the President's
authority.
Yet, the success many of us envisioned for the health care tax credit
has not been realized through implementation. The number of people who
have been able to access the health care tax credit over the last 2
years is extremely disappointing. As of January 31, 2007, only 15,506
out of 252,280 who are eligible for the credit are enrolled

[[Page S8710]]

in the program. That is just over 6 percent, which means that almost 94
percent of those eligible are not participating.
In my home State of West Virginia, we have worked hard to promote the
HCTC for trade-displaced workers. When Weirton Steel instituted
significant layoffs, thousands of employees lost their jobs. In the
aftermath, State and national officials, health plan staff, and
representatives of the Independent Steelworkers Union and United Steel
Workers worked collaboratively to provide continuous health care
coverage for HCTC-eligible workers and retirees. The community really
came together and worked around the clock to educate workers and
retirees about their coverage options and to ensure they were enrolled
in the HCTC.

Loss of employment is absolutely devastating to workers and their
families. While health care coverage alone cannot replace job loss, it
does help to ease the burden on displaced workers and their dependents.
West Virginia is a model example of how HCTC can work. However, with
only 6 percent of those eligible for HCTC enrolled across the country,
there is still much more that needs to be done.
I must say to my colleagues that Congress has had a hand in these
disappointing enrollment figures. We have ignored every opportunity to
improve the health coverage tax credit and enhance the lives of workers
displaced by trade. Members of this body have previously voted against
TAA bills that would have extended Trade Adjustment Assistance to
service workers and also addressed some of the problems the GAO has
identified with the health coverage credit.
The TAA Health Coverage Improvement Act makes long overdue
improvements to the TAA health care tax credit. First, this legislation
addresses the issue of affordability. In addition to the GAO, several
consumer advocacy groups and research organizations, including the
Commonwealth Fund, the Center on Budget and Policy Priorities, and
Families USA, have cited affordability of the credit as the primary
reason for low participation in the HCTC program. The bottom line is
that a 65 percent subsidy is not enough. With a 65 percent credit, an
eligible individual still has to pay an average of $2,104 in annual
premium costs for single coverage plus additional amounts for
deductibles and co-payments. This figure is particularly astounding
given the fact that the average worker, while actively employed and
earning a paycheck, paid just $627 annually in 2006 for single
employer-sponsored health insurance coverage. In other words, if you
lose your job, you have to pay more than three times as much for health
insurance, even if you get the HCTC. The TAA Health Coverage
Improvement Act makes the credit more affordable by increasing the
subsidy amount to 95 percent.
This legislation also addresses the issue of affordability by placing
limits on the use of the individual market, as Congress intended under
the original law. The Trade Act of 2002 specified that the health
insurance credit could not be used for the purchase of health insurance
coverage in the individual market except for HCTC-eligible workers who
previously had a private, non-group coverage policy 30 days prior to
separation from employment. However, States have been allowed by this
Administration to create State-based coverage options in the individual
market for any HCTC beneficiaries, including those who did not have
individual market coverage one month prior to separation from
employment.
Because of the Administration's interpretation of the law, there are
people who had employer-based coverage prior to separation from
employment who are now being covered in the individual market. This was
not the intent of the law. To make matters worse, this interpretation
undermines the consumer protections set forth in the law because
individual market plans are allowed to vary premiums based on age and
medical status. In one state that GAG reviewed for a previous report,
because of medical underwriting, HCTC recipients in less-than-perfect
health were charged almost 6 times the premiums charged to recipients
rated in the healthiest category. The legislation I am introducing
today addresses this problem by clarifying that States can only
designate individual market coverage within guidelines of 30-day
restriction and by requiring individual market plans to be community-
rated.
Second, this legislation guarantees that eligible workers will have
access to comprehensive group health coverage. Group coverage is what
people know. The vast majority of laid-off workers and PBGC retirees
had employer-sponsored group coverage prior to losing their jobs or
pension benefits. The TAA Health Coverage Improvement Act designates
the Federal Employees Health Benefit Plan, FEHBP, as a qualified group
option in every State, so that displaced workers Nationwide will have
access to the same type of affordable, comprehensive coverage they were
used to when they were employed.
Third, the TAA Health Coverage Act clarifies the 3 month continuous
coverage requirement. Under the original TAA statute, displaced workers
are required to maintain 3 months of continuous health insurance
coverage in order to qualify for certain consumer protections. Those
protections are guaranteed issue, no preexisting condition exclusion,
comparable premiums, and comparable benefits. Congress intended this 3
month period to be counted as the 3 months prior to separation from
employment. However, the administration has interpreted the 3 month
requirement as 3 months of health insurance coverage prior to
enrollment in the new health plan, which usually is after separation
from employment and after certification of TAA eligibility. Many laid-
off workers and PBGC recipients cannot afford to maintain health
coverage in the months between losing their jobs and TAA certification
and, therefore, lose eligibility for the statutorily-provided consumer
protections. This legislation corrects this problem by clarifying that
three months of continuous coverage means 3 months prior to separation
from employment.
Fourth, this bill allows spouses and dependents to receive the health
coverage tax credit. Over the last 2 years, younger spouses and
dependents of Medicare-eligible individuals have not been able to
receive the subsidy because eligibility runs through the worker or
retiree. This technicality is unfair to individuals who rely on health
coverage through their spouses or parents. The TAA Health Coverage
Improvement Act allows younger spouses and dependent children to retain
eligibility for the health coverage tax credit in the event the
qualified beneficiary becomes eligible for Medicare.
Finally, this legislation streamlines the HCTC enrollment process and
makes it easier for trade-displaced workers to access health insurance
coverage. According to GAO, two of the factors contributing to low
participation include the complex nature of the HCTC program and the
inability of workers to pay 100 percent of the premium during the up to
3 months before they begin to receive advance payments. The TAA Health
Coverage Improvement Act improves consumer information about the HCTC
by requiring that the Treasury Secretary's eligibility notice include a
description of the HCTC program; specific contact information for state
offices responsible for determining eligibility and providing
enrollment assistance; a list of the HCTC coverage options in the sate;
and a statement informing eligible individuals of the deadline to
enroll in HCTC in order to avoid lapses in coverage. Additionally, our
legislation includes a presumptive eligibility provision that allows
displaced workers to enroll in a qualified health plan and receive the
HCTC immediately upon application to the Department of Labor for
certification. There is also a provision which directs the Treasury
Secretary to pay 100 percent of the cost of premiums directly to the
health plans during the months TAA-eligible workers are waiting for
advance payment to begin.
As a former Governor, I know how important Trade Adjustment
Assistance is to individuals who have lost their jobs due to trade. In
West Virginia, thousands of workers have lost their jobs as a result of
trade policy. While adjusting to the loss of employment, these
individuals still have to pay mortgages, put food on the table, and
care for their families. Finding affordable health care adds a
significant burden to their worries. The TAA health coverage tax credit
is designed

[[Page S8711]]

to help American workers retain health insurance coverage during this
very difficult transition.
Unfortunately, the HCTC program is not living up to its potential.
The Government Accountability Office has given us a very specific
diagnosis of the problems. Now, it is up to us to fix them. I look
forward to working with my colleagues to pass this important
legislation in conjunction with reauthorization of the Trade Adjustment
Assistance program.
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 printed in the
Record, as follows:

S. 1739

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

(a) Short Title.--This Act may be cited as the ``TAA Health
Coverage Improvement Act of 2007''.
(b) Table of Contents.--The table of contents for this Act
is as follows:

Sec. 1. Short title; table of contents.
Sec. 2. Improvement of the affordability of the credit.
Sec. 3. 100 percent credit and payment for monthly premiums paid prior
to certification of eligibility for the credit.
Sec. 4. Eligibility for certain pension plan participants; presumptive
eligibility.
Sec. 5. Clarification of 3-month creditable coverage requirement.
Sec. 6. TAA pre-certification period rule for purposes of determining
whether there is a 63-day lapse in creditable coverage.
Sec. 7. Continued qualification of family members after certain events.
Sec. 8. Offering of Federal group coverage.
Sec. 9. Additional requirements for individual health insurance costs.
Sec. 10. Alignment of COBRA coverage with TAA period for TAA-eligible
individuals.
Sec. 11. Notice requirements.
Sec. 12. Annual report on enhanced TAA benefits.
Sec. 13. Extension of national emergency grants.

SEC. 2. IMPROVEMENT OF THE AFFORDABILITY OF THE CREDIT.

(a) Improvement of Affordability.--
(1) In general.--Section 35(a) of the Internal Revenue Code
of 1986 (relating to credit for health insurance costs of
eligible individuals) is amended by striking ``65'' and
inserting ``95''.
(2) Conforming amendment.--Section 7527(b) of such Code
(relating to advance payment of credit for health insurance
costs of eligible individuals) is amended by striking ``65''
and inserting ``95''.
(b) Effective Date.--The amendments made by this section
apply to taxable years beginning after December 31, 2007.

SEC. 3. 100 PERCENT CREDIT AND PAYMENT FOR MONTHLY PREMIUMS
PAID PRIOR TO CERTIFICATION OF ELIGIBILITY FOR
THE CREDIT.

(a) In General.--Subsection (a) of section 35 of the
Internal Revenue Code of 1986, as amended by section 2(a)(1),
is amended--
(1) by striking the subsection heading and all that follows
through ``In case'' and inserting ``Amount of Credit.--
``(1) In general.--In case''; and
(2) by adding at the end the following new paragraph:
``(2) 100 percent credit for months prior to issuance of
eligibility certificate.--The amount allowed as a credit
against the tax imposed by subtitle A shall be equal to 100
percent in the case of the taxpayer's first eligible coverage
months occurring prior to the issuance of a qualified health
insurance costs credit eligibility certificate.''.
(b) Payment for Premiums Due Prior to Certification of
Eligibility for the Credit.--Section 7527 of the Internal
Revenue Code of 1986 (relating to advance payment of credit
for health insurance costs of eligible individuals) is
amended by adding at the end the following new subsection:
``(e) Payment for Premiums Due Prior to Issuance of
Certificate.--The program established under subsection (a)
shall provide--
``(1) that the Secretary shall make payments on behalf of a
certified individual of an amount equal to 100 percent of the
premiums for coverage of the taxpayer and qualifying family
members under qualified health insurance for eligible
coverage months (as defined in section 35(b)) occurring prior
to the issuance of a qualified health insurance costs credit
eligibility certificate; and
``(2) that any payments made under paragraph (1) shall not
be included in the gross income of the taxpayer on whose
behalf such payments were made.''.
(c) Effective Date.--The amendments made by this section
shall apply to months beginning after the date of the
enactment of this Act in taxable years ending after such
date.

SEC. 4. ELIGIBILITY FOR CERTAIN PENSION PLAN RECIPIENTS;
PRESUMPTIVE ELIGIBILITY.

(a) Eligibility for Certain Pension Plan Recipients.--
Subsection (c) of section 35 of the Internal Revenue Code of
1986 is amended--
(1) in paragraph (1)--
(A) in subparagraph (B), by striking ``and'' at the end;
(B) in subparagraph (C), by striking the period and
inserting ``, and''; and
(C) by adding at the end the following:
``(D) an eligible multiemployer pension participant.''; and
(2) by adding at the end the following new paragraph:
``(5) Eligible multiemployer pension recipient.--The term
`eligible multiemployer pension recipient' means, with
respect to any month, any individual--
``(A) who has attained age 55 as of the first day of such
month,
``(B) who is receiving a benefit from a multiemployer plan
(as defined in section 3(37)(A) of the Employee Retirement
Income Security Act of 1974), and
``(C) whose former employer has withdrawn from such
multiemployer plan pursuant to section 4203(a) of such
Act.''.
(b) Presumptive Eligibility for Petitioners for Trade
Adjustment Assistance.--Subsection (c) of section 35 of the
Internal Revenue Code of 1986, as amended by subsection (a),
is amended by adding at the end the following new paragraph:
``(6) Presumptive status as a taa recipient.--The term
`eligible individual' shall include any individual who is
covered by a petition filed with the Secretary of Labor under
section 221 of the Trade Act of 1974. This paragraph shall
apply to any individual only with respect to months which--
``(A) end after the date that such petition is so filed,
and
``(B) begin before the earlier of--
``(i) the 90th day after the date of filing of such
petition, or
``(ii) the date on which the Secretary of Labor makes a
final determination with respect to such petition.''.
(c) Conforming Amendments.--
(1) Paragraph (1) of section 7527(d) of such Code is
amended by striking ``or an eligible alternative TAA
recipient (as defined in section 35(c)(3))'' and inserting
``, an eligible alternative TAA recipient (as defined in
section 35(c)(3)), an eligible multiemployer pension
recipient (as defined in section 35(c)(5), or an individual
who is an eligible individual by reason of section
35(c)(6)''.
(2) Section 173(f)(4) of the Workforce Investment Act of
1998 (29 U.S.C. 2918(f)(4)) is amended--
(A) in subparagraph (B), by striking ``and'' at the end;
(B) in subparagraph (C), by striking the period and
inserting a comma; and
(C) by inserting after subparagraph (C), the following new
subparagraphs:
``(D) an eligible multiemployer pension recipient (as
defined in section 35(c)(5) of the Internal Revenue Code of
1986), and
``(E) an individual who is an eligible individual by reason
of section 35(c)(6) of the Internal Revenue Code of 1986.''.
(d) Technical Amendment Clarifying Eligibility of Certain
Displaced Workers Receiving a Benefit Under a Defined Benefit
Pension Plan.--The first sentence of section 35(c)(2) of the
Internal Revenue Code of 1986 is amended by inserting before
the period the following: ``, and shall include any such
individual who would be eligible to receive such an allowance
but for the fact that the individual is receiving a benefit
under a defined benefit plan (as defined in section 3(35) of
the Employee Retirement Income Security Act of 1974).''.
(e) Effective Date.--The amendments made by this section
shall apply to months beginning after the date of the
enactment of this Act in taxable years ending after such
date.

SEC. 5. CLARIFICATION OF 3-MONTH CREDITABLE COVERAGE
REQUIREMENT.

(a) In General.--Clause (i) of section 35(e)(2)(B) of the
Internal Revenue Code of 1986 (defining qualifying
individual) is amended by inserting ``(prior to the
employment separation necessary to attain the status of an
eligible individual)'' after ``9801(c)''.
(b) Conforming Amendment.--Section 173(f)(2)(B)(ii)(I) of
the Workforce Investment Act of 1998 (29 U.S.C.
2918(f)(2)(B)(ii)(I)) is amended by inserting ``(prior to the
employment separation necessary to attain the status of an
eligible individual)'' after ``1986''.
(c) Effective Date.--The amendments made by this section
shall apply to months beginning after the date of the
enactment of this Act in taxable years ending after such
date.

SEC. 6. TAA PRE-CERTIFICATION PERIOD RULE FOR PURPOSES OF
DETERMINING WHETHER THERE IS A 63-DAY LAPSE IN
CREDITABLE COVERAGE.

(a) ERISA Amendment.--Section 701(c)(2) of the Employee
Retirement Income Security Act of 1974 (29 U.S.C. 1181(c)(2))
is amended by adding at the end the following new
subparagraph:
``(C) TAA-eligible individuals.--
``(i) TAA pre-certification period rule.--In the case of a
TAA-eligible individual, the period beginning on the date the
individual has a TAA-related loss of coverage and ending on
the date that is 5 days after the postmark date of the notice
by the Secretary (or by any person or entity designated by
the Secretary) that the individual is eligible for a
qualified health insurance costs credit eligibility
certificate for purposes of section 7527 of the Internal
Revenue Code of 1986 shall not be taken into account in
determining the continuous period under subparagraph (A).

[[Page S8712]]

``(ii) Definitions.--The terms `TAA-eligible individual',
and `TAA-related loss of coverage' have the meanings given
such terms in section 605(b)(4)(C).''.
(b) PHSA Amendment.--Section 2701(c)(2) of the Public
Health Service Act (42 U.S.C. 300gg(c)(2)) is amended by
adding at the end the following new subparagraph:
``(C) TAA-eligible individuals.--
``(i) TAA pre-certification period rule.--In the case of a
TAA-eligible individual, the period beginning on the date the
individual has a TAA-related loss of coverage and ending on
the date that is 5 days after the postmark date of the notice
by the Secretary (or by any person or entity designated by
the Secretary) that the individual is eligible for a
qualified health insurance costs credit eligibility
certificate for purposes of section 7527 of the Internal
Revenue Code of 1986 shall not be taken into account in
determining the continuous period under subparagraph (A).
``(ii) Definitions.--The terms `TAA-eligible individual',
and `TAA-related loss of coverage' have the meanings given
such terms in section 2205(b)(4)(C).''.
(c) IRC Amendment.--Section 9801(c)(2) of the Internal
Revenue Code of 1986 (relating to not counting periods before
significant breaks in creditable coverage) is amended by
adding at the end the following new subparagraph:
``(D) TAA-eligible individuals.--
``(i) TAA pre-certification period rule.--In the case of a
TAA-eligible individual, the period beginning on the date the
individual has a TAA-related loss of coverage and ending on
the date which is 5 days after the postmark date of the
notice by the Secretary (or by any person or entity
designated by the Secretary) that the individual is eligible
for a qualified health insurance costs credit eligibility
certificate for purposes of section 7527 shall not be taken
into account in determining the continuous period under
subparagraph (A).
``(ii) Definitions.--The terms `TAA-eligible individual',
and `TAA-related loss of coverage' have the meanings given
such terms in section 4980B(f)(5)(C)(iv).''.
(d) Effective Date.--The amendments made by this section
shall apply to months beginning after the date of the
enactment of this Act in taxable years ending after such
date.

SEC. 7. CONTINUED QUALIFICATION OF FAMILY MEMBERS AFTER
CERTAIN EVENTS.

(a) In General.--Subsection (g) of section 35 of the
Internal Revenue Code of 1986 is amended by redesignating
paragraph (9) as paragraph (10) and inserting after paragraph
(8) the following new paragraph:
``(9) Continued qualification of family members after
certain events.--
``(A) Eligible individual becomes medicare eligible.--In
the case of a month which would be an eligible coverage month
with respect to an eligible individual but for subsection
(f)(2)(A), such month shall be treated as an eligible
coverage month with respect to any qualifying family member
of such eligible individual (but not with respect to such
eligible individual).
``(B) Divorce.--In the case of a month which would be an
eligible coverage month with respect to a former spouse of a
taxpayer but for the finalization of a divorce between the
spouse and the taxpayer that occurs during the period in
which the taxpayer is an eligible individual, such month
shall be treated as an eligible coverage month with respect
to such former spouse.
``(C) Death.--In the case of a month which would be an
eligible coverage month with respect to an eligible
individual but for the death of such individual, such month
shall be treated as an eligible coverage month with respect
to any qualifying family of such eligible individual.''.
(b) Conforming Amendment.--Section 173(f) of the Workforce
Investment Act of 1998 (29 U.S.C. 2918(f)) is amended by
adding at the end the following:
``(8) Continued qualification of family members after
certain events.--
``(A) Eligible individual becomes medicare eligible.--In
the case of a month which would be an eligible coverage month
with respect to an eligible individual but for subsection
(f)(2)(A), such month shall be treated as an eligible
coverage month with respect to any qualifying family member
of such eligible individual (but not with respect to such
eligible individual).
``(B) Divorce.--In the case of a month which would be an
eligible coverage month with respect to a former spouse of a
taxpayer but for the finalization of a divorce between the
spouse and the taxpayer that occurs during the period in
which the taxpayer is an eligible individual, such month
shall be treated as an eligible coverage month with respect
to such former spouse.
``(C) Death.--In the case of a month which would be an
eligible coverage month with respect to an eligible
individual but for the death of such individual, such month
shall be treated as an eligible coverage month with respect
to any qualifying family of such eligible individual.''.
(c) Effective Date.--The amendments made by this section
shall apply to months beginning after the date of the
enactment of this Act in taxable years ending after such
date.

SEC. 8. OFFERING OF FEDERAL GROUP COVERAGE.

(a) Provision of Group Coverage.--
(1) In general.--The Director of the Office of Personnel
Management jointly with the Secretary of the Treasury shall
establish a program under which eligible individuals (as
defined in section 35(c) of the Internal Revenue Code of
1986) are offered enrollment under health benefit plans that
are made available under FEHBP.
(2) Terms and conditions.--The terms and conditions of
health benefits plans offered under paragraph (1) shall be
the same as the terms and coverage offered under FEHBP,
except that the percentage of the premium charged to eligible
individuals (as so defined) for such health benefit plans
shall be equal to 5 percent.
(3) Study.--The Director of the Office of Personnel
Management jointly with the Secretary of the Treasury shall
conduct a study of the impact of the offering of health
benefit plans under this subsection on the terms and
conditions, including premiums, for health benefit plans
offered under FEHBP and shall submit to Congress, not later
than 2 years after the date of the enactment of this Act, a
report on such study. Such report may contain such
recommendations regarding the establishment of separate risk
pools for individuals covered under FEHBP and eligible
individuals covered under health benefit plans offered under
paragraph (1) as may be appropriate to protect the interests
of individuals covered under FEHBP and alleviate any adverse
impact on FEHBP that may result from the offering of such
health benefit plans.
(4) FEHBP defined.--In this section, the term ``FEHBP''
means the Federal Employees Health Benefits Program offered
under chapter 89 of title 5, United States Code.
(b) Conforming Amendments.--
(1) Paragraph (1) of section 35(e) of the Internal Revenue
Code of 1986 is amended by adding at the end the following
new subparagraph:
``(K) Coverage under a health benefits plan offered under
section 8(a)(1) of the TAA Health Coverage Improvement Act of
2007.''.
(2) Section 173(f)(2)(A) of the Workforce Investment Act of
1998 (29 U.S.C. 2918(f)(2)(A)) is amended by adding at the
end the following new clause:
``(xi) Coverage under a health benefits plan offered under
section 8(a)(1) of the TAA Health Coverage Improvement Act of
2007.''.

SEC. 9. ADDITIONAL REQUIREMENTS FOR INDIVIDUAL HEALTH
INSURANCE COSTS.

(a) In General.--Subparagraph (A) of section 35(e)(2) of
such Code is amended by striking ``subparagraphs (B) through
(H) of paragraph (1)'' and inserting ``paragraph (1) (other
than subparagraphs (A), (I), and (K) thereof)''.
(b) Rating System Requirement.--Subparagraph (J) of section
35(e)(1) of such Code is amended by adding at the end the
following: ``For purposes of this subparagraph and clauses
(ii), (iii), and (iv) of subparagraph (F), such term does not
include any insurance unless the premiums for such insurance
are restricted based on a community rating system (determined
other than on the basis of age).''.
(c) Clarification of Congressional Intent to Limit Use of
Individual Health Insurance Coverage Option.--Section
35(e)(1)(J) (relating to qualified health insurance) is
amended in the matter preceding clause (i), by inserting ``,
but only'' after ``under individual health insurance''.
(d) Conforming Amendments.--Section 173(f)(2) of the
Workforce Investment Act of 1998 (29 U.S.C. 2918(f)(2)) is
amended--
(1) in subparagraph (A)(x), by adding at the end the
following: ``Such term does not include any insurance unless
the premiums for such insurance are restricted based on a
community rating system (determined other than on the basis
of age).''; and
(2) in subparagraph (B)--
(A) in the matter preceding subclause (I), by inserting ``,
but only'' after ``under individual health insurance''; and
(B) in clause (i), by striking ``clauses (ii) through
(viii) of subparagraph (A)'' and inserting ``subparagraph (A)
(other than clauses (i), (x), and (xi) thereof)''.

SEC. 10. ALIGNMENT OF COBRA COVERAGE WITH TAA PERIOD FOR TAA-
ELIGIBLE INDIVIDUALS.

(a) ERISA.--Section 605(b) of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1165(b)) is amended--
(1) in the subsection heading, by inserting ``and
Coverage'' after ``Election''; and
(2) in paragraph (2)--
(A) in the paragraph heading, by inserting ``and period''
after ``Commencement'';
(B) by striking ``and shall'' and inserting ``, shall'';
and
(C) by inserting ``, and in no event shall the maximum
period required under section 602(2)(A) be less than the
period during which the individual is a TAA-eligible
individual'' before the period at the end.
(b) Internal Revenue Code of 1986.--Section 4980B(f)(5)(C)
of the Internal Revenue Code of 1986 is amended--
(1) in the subparagraph heading, by inserting ``and
coverage'' after ``election''; and
(2) in clause (ii)--
(A) in the clause heading, by inserting ``and period''
after ``Commencement'';
(B) by striking ``and shall'' and inserting ``, shall'';
and
(C) by inserting ``, and in no event shall the maximum
period required under paragraph (2)(B)(i) be less than the
period during which the individual is a TAA-eligible
individual'' before the period at the end.
(c) Public Health Service Act.--Section 2205(b) of the
Public Health Service Act (42 U.S.C. 300bb-5(b)) is amended--

[[Page S8713]]

(1) in the subsection heading, by inserting ``and
Coverage'' after ``Election''; and
(2) in paragraph (2)--
(A) in the paragraph heading, by inserting ``and period''
after ``Commencement'';
(B) by striking ``and shall'' and inserting ``, shall'';
and
(C) by inserting ``, and in no event shall the maximum
period required under section 2202(2)(A) be less than the
period during which the individual is a TAA-eligible
individual'' before the period at the end.

SEC. 11. NOTICE REQUIREMENTS.

Section 7527 of the Internal Revenue Code of 1986 (relating
to advance payment of credit for health insurance costs of
eligible individuals), as amended by section 3(b), is amended
by adding at the end the following new subsection:
``(f) Inclusion of Certain Information.--The notice by the
Secretary (or by any person or entity designated by the
Secretary) that an individual is eligible for a qualified
health insurance costs credit eligibility certificate shall
include--
``(1) information explaining how the program established
under subsection (a) works with the credit established under
section 35,
``(2) the name, address, and telephone number of the State
office or offices responsible for determining that the
individual is eligible for such certificate and for providing
the individual with assistance with enrollment in qualified
health insurance (as defined in section 35(e)),
``(3) a list of the coverage options that are treated as
qualified health insurance (as so defined) by the State in
which the individual resides, and
``(4) in the case of a TAA-eligible individual (as defined
in section 4980B(f)(5)(C)(iv)(II)), a statement informing the
individual that the individual has 63 days from the date that
is 5 days after the postmark date of such notice to enroll in
such insurance without a lapse in creditable coverage (as
defined in section 9801(c)).''.

SEC. 12. ANNUAL REPORT ON ENHANCED TAA BENEFITS.

Not later than October 1 of each year (beginning in 2008)
the Secretary of the Treasury, after consultation with the
Secretary of Labor, shall report to the Committee on Finance
and the Committee on Health, Education, Labor, and Pensions
of the Senate and the Committee on Ways and Means and the
Committee on Education and the Workforce of the House of
Representatives the following information with respect to the
most recent taxable year ending before such date:
(1) The total number of participants utilizing the health
insurance tax credit under section 35 of the Internal Revenue
Code of 1986, including a measurement of such participants
identified--
(A) by State, and
(B) by coverage under COBRA continuation provisions (as
defined in section 9832(d)(1) of such Code) and by non-COBRA
coverage (further identified by group and individual market).
(2) The range of monthly health insurance premiums offered
and the average and median monthly health insurance premiums
offered to TAA-eligible individuals (as defined in section
4980B(f)(5)(C)(iv)(II) of such Code) under COBRA continuation
provisions (as defined in section 9832(d)(1) of such Code),
State-based continuation coverage provided under a State law
that requires such coverage, and each category of coverage
described in section 35(e)(1) of such Code, identified by
State and by the actuarial value of such coverage and the
specific benefits provided and cost-sharing imposed under
such coverage.
(3) The number of States applying for and receiving
national emergency grants under section 173(f) of the
Workforce Investment Act of 1998 (29 U.S.C. 2918(f)) and the
time necessary for application approval of such grants.
(4) The cost of administering the health credit program
under section 35 of such Code, by function, including the
cost of subcontractors.

SEC. 13. EXTENSION OF NATIONAL EMERGENCY GRANTS.

(a) In General.--Section 173(f) of the Workforce Investment
Act of 1998 (29 U.S.C. 2918(f)) is amended--
(1) by striking paragraph (1) and inserting the following
new paragraph:
``(1) Use of funds.--
``(A) Health insurance coverage for eligible individuals in
order to obtain qualified health insurance that has
guaranteed issue and other consumer protections.--Funds made
available to a State or entity under paragraph (4)(A) of
subsection (a) shall be used to provide an eligible
individual described in paragraph (4)(C) and such
individual's qualifying family members with health insurance
coverage for the 3-month period that immediately precedes the
first eligible coverage month (as defined in section 35(b) of
the Internal Revenue Code of 1986) in which such eligible
individual and such individual's qualifying family members
are covered by qualified health insurance that meets the
requirements described in clauses (i) through (iv) of section
35(e)(2)(A) of the Internal Revenue Code of 1986 (or such
longer minimum period as is necessary in order for such
eligible individual and such individual's qualifying family
members to be covered by qualified health insurance that
meets such requirements).
``(B) Additional uses.--Funds made available to a State or
entity under paragraph (4)(A) of subsection (a) may be used
by the State or entity for the following:
``(i) Health insurance coverage.--To assist an eligible
individual and such individual's qualifying family members
with enrolling in health insurance coverage and qualified
health insurance or paying premiums for such coverage or
insurance.
``(ii) Administrative expenses and start-up expenses to
establish group health plan coverage options for qualified
health insurance.--To pay the administrative expenses related
to the enrollment of eligible individuals and such
individuals' qualifying family members in health insurance
coverage and qualified health insurance, including--

``(I) eligibility verification activities;
``(II) the notification of eligible individuals of
available health insurance and qualified health insurance
options;
``(III) processing qualified health insurance costs credit
eligibility certificates provided for under section 7527 of
the Internal Revenue Code of 1986;
``(IV) providing assistance to eligible individuals in
enrolling in health insurance coverage and qualified health
insurance;
``(V) the development or installation of necessary data
management systems; and
``(VI) any other expenses determined appropriate by the
Secretary, including start-up costs and on going
administrative expenses, in order for the State to treat the
coverage described in subparagraph (C), (D), (E), or (F)(i)
of section 35(e)(1) of the Internal Revenue Code of 1986, or,
only if the coverage is under a group health plan, the
coverage described in subparagraph (F)(ii), (F)(iii),
(F)(iv), (G), or (H) of such section, as qualified health
insurance under that section.

``(iii) Outreach.--To pay for outreach to eligible
individuals to inform such individuals of available health
insurance and qualified health insurance options, including
outreach consisting of notice to eligible individuals of such
options made available after the date of enactment of this
clause and direct assistance to help potentially eligible
individuals and such individual's qualifying family members
qualify and remain eligible for the credit established under
section 35 of the Internal Revenue Code of 1986 and advance
payment of such credit under section 7527 of such Code.
``(iv) Bridge funding.--To assist potentially eligible
individuals purchase qualified health insurance coverage
prior to issuance of a qualified health insurance costs
credit eligibility certificate under section 7527 of the
Internal Revenue Code of 1986 and commencement of advance
payment, and receipt of expedited payment, under subsections
(a) and (e), respectively, of that section.
``(C) Rule of construction.--The inclusion of a permitted
use under this paragraph shall not be construed as
prohibiting a similar use of funds permitted under subsection
(g).''; and
(2) by striking paragraph (2) and inserting the following
new paragraph:
``(2) Qualified health insurance.--For purposes of this
subsection and subsection (g), the term `qualified health
insurance' has the meaning given that term in section 35(e)
of the Internal Revenue Code of 1986.''.
(b) Funding.--Section 174(c)(1) of the Workforce Investment
Act of 1998 (29 U.S.C. 2919(c)(1)) is amended--
(1) in the paragraph heading, by striking ``Authorization
and appropriation for fiscal year 2002'' and inserting
``Appropriations''; and
(2) by striking subparagraph (A) and inserting the
following new subparagraph:
``(A) to carry out subsection (a)(4)(A) of section 173--
``(i) $10,000,000 for fiscal year 2002; and
``(ii) $300,000,000 for the period of fiscal years 2008
through 2010; and''.
(c) Report Regarding Failure to Comply With Requirements
for Expedited Approval Procedures.--Section 173(f) of the
Workforce Investment Act of 1998 (29 U.S.C. 2918(f)) is
amended by adding at the end the following new paragraph:
``(8) Report for failure to comply with requirements for
expedited approval procedures.--If the Secretary fails to
make the notification required under clause (i) of paragraph
(3)(A) within the 15-day period required under that clause,
or fails to provide the technical assistance required under
clause (ii) of such paragraph within a timely manner so that
a State or entity may submit an approved application within 2
months of the date on which the State or entity's previous
application was disapproved, the Secretary shall submit a
report to Congress explaining such failure.''.
(d) Technical Amendment.--Effective as if included in the
enactment of the Trade Act of 2002 (Public Law 107-210; 116
Stat. 933), subsection (f) of section 203 of that Act is
repealed.
______

By Mr. HATCH (for himself, Mr. Kohl, Mr. Specter, and Mr. Crapo):
S. 1743. A bill to amend the Internal Revenue Code of 1986 to repeal
the dollar limitation on contributions to funeral trusts; to the
Committee on Finance.
Mr. HATCH. Mr. President, I rise today to introduce a bill to
eliminate the current dollar limitation on Qualified Funeral Trusts,
QFTs. Congress created these savings vehicles in 1997 to assist
individuals and families who wanted to plan for, and prepay, funeral
expenses. Yet, funeral costs are rising

[[Page S8714]]

rapidly, and the arbitrary cap that Congress imposed on QFTs makes
planning more difficult. Today I am proud to introduce this bipartisan
legislation, along with my colleague from Wisconsin, the chairman of
the Special Committee on Aging, Senator Kohl. We are also joined by two
of our distinguished colleagues, Senators Specter and Crapo. The change
would have a positive impact on the lives of older Americans and on
their families. In addition, according to the Joint Committee on
Taxation, it would have a slight, but positive, impact on the Federal
treasury.
When Congress created QFTs, it did so as a tax simplification
measure. Unfortunately, it capped the size of these trusts at $7,000,
adjusted regularly for inflation. This year, the inflation-adjusted cap
is $8,800, but in many instances, this amount is no longer sufficient
to cover a family's funeral expenses. In Utah, the average cost of a
full funeral and burial is $12,685. I am sure that in many other states
it is even higher. Because of this contribution limit, even those who
preplan their own funerals too often leave their heirs with substantial
expenses. Even those who attempt to cover the entire expense may not
have enough money to cover all costs after administrative fees and
taxes are deducted.
This proposal would make Qualified Funeral Trusts more effective. The
principal reason individuals set up Qualified Funeral Trust plans is to
lift a financial burden from their children. Ordinarily, trusts for
funeral expenses are grantor trusts, and the beneficiary is responsible
for paying any tax on income generated by the trust. Congress
recognized, however, that this result created an administrative burden
for the beneficiary or the funeral director trustee. As a result,
Congress enacted Section 685 of the Internal Revenue Code, allowing
funeral director trustees to elect to pay the tax on income earned by
funeral trusts. This tax simplification measure eased the paperwork
burden and administrative costs on funeral director trustees, who were
previously required to issue hundreds of 1099 forms to their elderly
customers. It also eliminated the tax liability and confusion of many
elderly Americans who previously received these forms. Unfortunately,
only those trusts under the cap are currently eligible for designation
as QFTs. By removing this restrictive cap, our legislation will
eliminate unnecessary administrative burdens on beneficiaries and
trustees.
Let me give you an example of how the current cap creates unnecessary
confusion for families. I have used this example before. It remains
worth telling. Four years ago, a constituent of mine wrote me about
this situation. He was suffering from Parkinson's disease. So he began
planning his own funeral in order that these decisions and this burden
would be lifted from his children. Because of the cap on QFTs, however,
which at the time was $7,800, this Utahn was not able to fully fund the
funeral services he desired. It became necessary to have one of his
sons complete this planning for him by opening up his own, separate
trust that would help to cover the remaining expenses. We should not be
making it hard for families to do the right thing. We should not be
making families jump through extra hoops when all they are trying to do
is make these responsible decisions, well in advance of need.

For older Americans, the primary benefits of this legislation are the
ability to have all the money they have saved in the trust be applied
to final expenses, instead of taxes, and the incentive to increase the
amount of their contribution. Sixty percent of prefunded funerals were
funded by trusts and elimination of the cap should raise this
percentage. For funeral directors, this change would eliminate the
burden and expense of issuing information documents to report income
earned from the trust.
The National Funeral Directors Association supports this legislation.
So too do numerous funeral homes that serve the people of Utah.
I have no doubt that many more of these funeral businesses, many of
which are family-owned and family-run, that serve local communities
from coast to coast support this legislation as well.
I think we can all agree that we should make it easier for those who
are willing to provide for these necessary expenses in advance. Today,
I ask my colleagues to join me in an effort to enact this important
measure.
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. 1743

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

SECTION 1. REPEAL OF DOLLAR LIMITATION ON CONTRIBUTIONS TO
FUNERAL TRUSTS.

(a) In General.--Subsection (c) of section 685 of the
Internal Revenue Code of 1986 (relating to treatment of
funeral trusts) is repealed.
(b) Conforming Amendment.--Subsections (d), (e), and (f) of
such section are redesignated as subsections (c), (d), and
(e), respectively.
(c) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2006.

____________________