[Congressional Record Volume 153, Number 111 (Thursday, July 12, 2007)]
[Senate]
[Pages S9138-S9153]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS
By Ms. SNOWE:
S. 1773. A bill to amend the Internal Revenue Code of 1986 to
regulate payroll tax deposit agents; to the Committee on Finance.
Ms. SNOWE. Mr. President, I rise today to introduce the Small
Business Payroll Protection Act of 2007. This crucial legislation will
protect small businesses from payroll tax fraud and provide them with
greater security when working with IRS registered payroll service
providers.
By way of background, let me say that in the fall of 2003, small
businessman Roger Cyr, owner of the Lily Moon Cafe in Saco, Maine,
learned that he was the victim of payroll tax fraud and that he owed
$52,000 in back taxes. He was one of a number of small business owners
in Maine who were forced to pay their payroll taxes twice after an
unscrupulous payroll provider ran off with their tax deposits instead
of making the required payments to the Internal Revenue Service.
Unfortunately, this type of payroll fraud is not unique to my State
of Maine, with instances of malfeasance occurring in Georgia, Texas,
Utah, Iowa, Maryland, New York, and elsewhere throughout the U.S. It is
unconscionable that these small business owners, are required to pay
their payroll taxes twice. This additional and unexpected expense can
drive these companies out of business.
But let me be clear, these egregious examples of payroll fraud hide
the fact that most small businesses use payroll providers that are
honest, meticulous, and trustworthy. The majority of payroll tax agents
pay their clients' taxes accurately, and on time, providing outstanding
service as they help their clients with a myriad of complicated tax and
accounting issues. Consequently, the organizing principle behind the
bill I introduce today is to safeguard small business owners from afew
dishonest payroll providers, and to shield the honest payroll providers
from the bad actors in their industry.
To that end, this legislation contains a number of provisions
designed to guard small business owners against fraud. These provisions
include increasing IRS oversight of payroll service providers, creating
a separate section of the Internal Revenue code that will govern the
payroll industry, defining the responsibilities of payroll tax deposit
agents, and requiring all agents to register with the IRS or be
penalized. The bill also penalizes payroll providers that collect, but
fail to make, required tax payments by extending section 6672 penalties
to all payroll tax agents. Additionally, payroll clients will also be
informed of their continued liability for all of their payroll taxes as
well as their obligation to periodically verify that their payroll
taxes are paid in full.
Now, I recognize that the new regulations will be more costly for
small payroll companies to implement than for large payroll companies.
In order to keep client protections in place, while providing small
payroll services providers with some reasonable flexibility, the bill
offers a choice. Payroll providers can either obtain a surety bond, or
comply with quarterly third-party certifications.
Surety bonds can be very difficult for many small businesses to
obtain. Consequently, instead of bonding, many small payroll service
providers prefer the targeted quarterly certification option, which
ensures that payroll agents are depositing clients' tax funds
completely and on time. Small payroll agents assert that the
certification process actually provides their clients with greater
fraud protection than a surety bond because the certification verifies
the payroll agent's sound financial practices quarterly, while a surety
boud only requires an annual audit.
As Ranking Member of the Senate Committee on Small Business and
Entrepreneurship, I understand how critical it is to defend our small
business owners from tax fraud. Enacting these provisions will help
protect small companies in Maine, Utah, Georgia and in each of our
states, from the very few dangerous payroll providers that would steal
their clients' payroll taxes. At the same time, this bill recognizes
that small payroll tax agents must be provided flexible and reasonable
regulatory options that offer real protection to their clients. This
legislation contains both strong safeguards and small business
flexibility.
Mr. President, I urge my colleagues to help create a buffer for our
small businesses from devious pay roll tax agents by increasing IRS
oversight and protections as contained in this bill. I hope my
colleagues will strongly support the Small Business Payroll Protection
Act of 2007.
______
By Mr. BURR (for himself and Mr. Gregg):
S. 1775. A bill to reauthorize the Elementary and Secondary Education
Act of 1965 to ensure that no child is left behind; to the Committee on
Health, Education, Labor, and Pensions.
Mr. BURR. Mr. President, I rise today to speak on the No Child Left
Behind Act of 2007, which I am pleased to introduce with my colleague
Senator Gregg of New Hampshire. It has been an honor for my office to
work with Senator Gregg, one of the ``Big 4'' architects of the
original No Child Left Behind legislation that passed Congress with
overwhelmingly bipartisan support and that was signed into law by
President Bush in January 2002.
The No Child Left Behind Act of 2007 is the first comprehensive
reauthorization legislation to be introduced in either the Senate or
the House of Representatives. I hope our introduction today will kick-
start the legislative process and get the Senate and the House on the
path to a swift reauthorization of NCLB, the most sweeping and
important federal K-12 education legislation passed since the original
Elementary and Secondary Education Act was passed in 1965.
If ever there were a Federal law that needed to be reauthorized on
time, it is No Child Left Behind. As the headline to Ron Brownstein's
article in yesterday's Los Angeles Times read: ``Don't leave this law
behind: Progress is slow
[[Page S9139]]
under Bush's 2001 education reform, but No Child Left Behind is worth
improving.'' To be sure there has been lots of gnashing of teeth and
grimacing in the K-12 field since NCLB was passed. But as many of us in
Congress and across the country recognized when NCLB was passed in
2001, the point of No Child Left Behind wasn't, in the words of Kati
Haycock of the Education Trust, ``to make people happy.''
If we had wanted to make the adult stakeholders in K-12 happy, we
could have done nothing and just kept the status quo. However, in 2001
this Congress and a number of dedicated individuals and groups across
this Nation decided the status quo for our children was not acceptable
and that the time had come to eradicate, as President Bush called it,
the ``soft bigotry of low expectations.'' Together with strong
bipartisanship, this Congress with the passage of No Child Left Behind
stated to all the adult stakeholders that we can and will close the
achievement gap and to all of America's children that, regardless of
background, socio-economics, race, ethnicity, or disability, you can
and will learn and you can and will achieve.
We must not turn away from what we began when we passed the original
No Child Left Behind legislation. The stakes are too high both for our
children and the Nation as a whole. In the ever competitive global
economy, all our children, not just some and not just the lucky or the
fortunate, must be equipped with the academic skills to succeed. We
cannot afford to return to the status quo of days past. The time is now
to reauthorize No Child Left Behind and to reassert to all of America's
children that this Congress will not give up on them and will not stop
this endeavor until the too-long-standing achievement gap is closed
once and for all and until all children have the academic skills they
need to succeed in both postsecondary education and the workforce.
The No Child Left Behind Act of 2007 that Senator Gregg and I are
introducing today does not abandon the basic tenets of No Child Left
Behind. To be sure there is still a great deal of work to do to reach
our Nation's goal of having all children proficient in reading and math
by 2013-2014. Nevertheless, we are seeing historic increases in student
achievement. Since the passage of NCLB, the United States has witnessed
a greater increase in student achievement in the last five years than
in the 30 previous years combined, as well as a significant narrowing
in the achievement gap between African-American and Hispanic students
and their Caucasian peers. The No Child Left Behind Act of 2007 builds
on the original cornerstone laid by Congress in 2001 of holding schools
accountable for the academic achievement of all their students and of
empowering parents to make better choices for their child's education.
In particular, the No Child Left Behind Act of 2007 preserves the
foundational principles of NCLB. It maintains the goal that all
children will reach grade-level proficiency in reading in math by 2013-
2014; keeps in place annual testing in grades 3-8 and at the high
school level; and keeps in place an accountability system rooted in
State standards and State assessments. Further, our bill does not water
down accountability with the addition of multiple measures; rather, it
keeps a laser-like focus on grade-level achievement in math and
reading.
While maintaining the fundamentals of NCLB, the No Child Left Behind
Act of 2007 rightly responds to legitimate concerns parents, teachers,
and principals, have raised regarding the original legislation. In
response to concerns raised about impracticable accountability
timeframes, the No Child Left Behind Act of 2007 streamlines the
accountability timeline to make it easier for schools to develop and
implement plans to improve student achievement and to focus on what
matters most teaching and learning. Additionally, recognizing that
schools and their needs vary, the No Child Left Behind Act of 2007
allows for differentiated interventions for schools in restructuring to
allow districts and schools to target resources to students and schools
most in need of assistance. Further, in response to calls for the use
of a growth model to measure individual student progress and to
positively recognize schools and educators who are making tremendous
strides in improving the achievement of all children, the bill expands
the Department's seven State growth model demonstration to all 50
States.
The No Child Left Behind Act of 2007 also responds to legitimate
concerns regarding the special populations of limited English
proficient, LEP, students and students with disabilities, by providing
greater flexibility, focus, and resources to help schools educate these
students to high standards. Notably, the bill grants new flexibility
for LEP students who are new to the country and codifies in statute
recent flexibility granted by the Department of Education for special
education students, which permits the use of alternate academic
achievement standards for students with the most significant cognitive
disabilities and modified academic achievement standards for students
who have disabilities that preclude them from achieving grade-level
proficiency. Finally, the bill targets Federal assessment dollars to
develop and administer valid and reliable assessments for special
education and LEP students and targets professional development dollars
to empower teachers with better tools and information for teaching LEP
and special education children.
The No Child Left Behind Act of 2007 reasserts that high-quality
teachers are the most important factor to improved student academic
achievement. The bill authorizes programs to ensure that all students
are taught by a highly qualified teacher and to ensure that low-income
and minority students are not taught by unqualified and inexperienced
teachers at higher rates than their more affluent peers. The No Child
Left Behind Act of 2007 maintains the current definition of highly
qualified teacher; emphasizes alternative certification, incentive,
differential, and performance and merit pay; and has States and
districts conduct needs assessments to determine which districts and
schools have the most acute teacher quality and staffing needs in order
to better target resources to those schools and districts. Further, the
bill gives greater authority to local school districts to renegotiate
restrictions in collective bargaining agreements that contribute to the
least experienced and qualified teachers teaching in the schools with
students most in need of a highly qualified teacher.
Finally, the No Child Left Behind Act of 2007 focuses on improving
the Nation's high school graduation rate. Included in the legislation
is the Graduate for a Better Future Act, which I introduced earlier
this year in response to the high school dropout crisis in the United
States. The high school graduation rate for the class of 2003 was only
70 percent nationwide. Thus, almost one-third of American students who
enter high school in ninth grade drop out of school and never receive a
high school diploma. Large disparities exist in the high school
graduation rates among various subgroups of students. Although the high
school graduation rate for white students was 78 percent in 2003, the
rate for African American students was only 55 percent, and the rate
for Hispanic students was only 53 percent.
To remain competitive in the world economy, it is critical for
America's youth to graduate from high school and to have access to the
postsecondary education needed to succeed in the 21st century job
market. Funds under the Graduate for a Better Future Act will be used
to create models of excellence for academically rigorous high schools
to prepare all students for college and the 21st century workplace; to
implement accelerated academic catch-up programs for students who enter
high school behind; to implement an early warning system to quickly
identify students at risk of dropping out of high school; to implement
comprehensive college guidance programs; and to implement programs that
offer students opportunities for job-shadowing, internships, and
community service so that students are able to make the connection
between what they are learning in school and how that applies and is
used in the workplace.
Additionally, the No Child Left Behind Act of 2007 requires states to
get serious and to get accurate in their calculation of graduation
rates. The Nation's dropout crisis will not go away
[[Page S9140]]
by fudging on the numbers. The graduation rate in the No Child Left
Behind Act of 2007 builds on the work of all 50 states through the
National Governors Association, which has signed the Graduation Counts
Compact, an effort started in 2005 to find a common method for
calculating each state's high school graduation rate.
As I stated at the beginning of my remarks, continuing our endeavor
begun in 2001, the time is now to reauthorize No Child Left Behind. For
the future of our Nation, our children, we must not turn back. Once
again let us stand together and State to the American public that we
can and will close the achievement gap. And once again let us say to
every child, regardless of background, you can achieve.
Mr. GREGG. Mr. President, since its implementation, the No Child Left
Behind Act has been successful in narrowing the achievement gap and
improving student performance. Since its passage, the U.S. has
witnessed a greater increase in student achievement in the last 5 years
than in the previous 30 years combined, as well as a significant
narrowing in the achievement gap. Because of No Child Left Behind,
parents are now empowered with information on the quality of their
child's school and given the ability to improve their child's education
through additional tutorial services.
No Child Left Behind has been tremendously successful in ensuring
that all students have access to the same high academic standards. No
longer can a school hide behind the averages of their higher performing
students; now all students are given the same opportunities to reach
academic proficiency. Today I am introducing the No Child Left Behind
Act of 2007 with my colleague Mr. BURR. This bill builds upon the basic
tenets of No Child Left Behind and rightly responds to the legitimate
concerns of parents, teachers and principals. The No Child Left Behind
Act of 2007 maintains the expectation that all students can reach or
exceed proficiency when given the opportunity. Any rollback of
accountability simply ignores the progress already being made and the
belief that all students can reach proficiency when given the
opportunity.
Recognizing that each school and its needs vary tremendously, the No
Child Left Behind Act of 2007 allows for differentiated consequences to
ensure that schools where a majority of students are not performing at
grade-level are treated differently than schools where a small segment
of the school population is not meeting State standards. Coupled with
additional time before advancing into the next stage of Program
Improvement, these new differentiated consequences will allow schools
to target resources and interventions to the students who need the most
assistance in reaching state-determined levels proficiency.
Under this bill, the Federal Government will continue to support
States financially in their development, improvement, and
administration of State academic assessments through the
reauthorization of the Grants for State Assessments program.
Additionally, because many States are still striving to improve their
assessment systems to assess students with disabilities and limited
English proficient students validly and reliably, the No Child Left
Behind Act of 2007 creates a fund dedicated solely to the development
and improvement of assessments for these students.
The No Child Left Behind Act of 2007 recognizes that high quality
teachers are the most important factor to improved student academic
achievement. The bill authorizes several programs to ensure that all
students are taught by a highly-qualified teacher and to ensure that
low-income students are not taught by unqualified and inexperienced
teachers at higher rates than their more affluent peers. This bill
authorizes the Teacher Incentive Fund, a program to encourage State and
schools districts to expand performance-based compensation for teachers
and principals in high-need schools who raise student achievement and
close the achievement gap. The No Child Left Behind Act of 2007 also
authorizes the Adjunct Teacher Corp, a program to encourage highly
educated and trained professionals, particularly in the areas of math
and science, to teach high school courses in their area of expertise.
One of the key cornerstones of No Child Left Behind, options for
parents, is maintained and expanded in the No Child Left Behind Act of
2007. Notably, this bill makes supplemental services available at the
same time as public school choice, expands the time period parents can
enroll their children in tutorial services programs and makes it easier
for supplemental service providers to readily access school facilities.
The No Child Left Behind Act of 2007 authorizes a new ``money follows
the child'' program and provides financial assistance to districts that
permit Title I dollars to follow the child to the public school of his
or her choice. This child-centered program will infuse competition into
the public school system, empower parents with new choices and
encourage all public schools to improve the academic achievement of all
students.
The combination of strengthening supplemental services and the new
child-centered program will provide even greater resources for parents
to ensure that the educational needs of their children are being met.
This bill maintains what we know is working, accountability,
transparency and expanded options, without adding burdensome new
requirements. By maintaining the fundamentals of No Child Left Behind,
this bill combines maximum flexibility with differentiated consequences
to ensure that all schools and students have the tools necessary to
reach academic proficiency.
______
By Mr. DURBIN (for himself and Mr. Brown):
S. 1776. A bill to amend the Federal Food, Drug, and Cosmetic Act to
establish a user fee program to ensure food safety, and for other
purposes; to the Committee on Agriculture, Nutrition, and Forestry.
Mr. DURBIN. Mr. President, I rise today to introduce legislation to
strengthen the ability of the Food and Drug Administration, FDA, to
ensure the safety of food imported into the U.S.
The volume of food imports has increased significantly in recent
years, from $45.6 billion in 2003 to $64 billion in 2006. According to
the USDA, imported food accounts for 13 percent of the average
American's diet, including 31 percent of fruits, juices, and nuts; 9.5
percent of red meat; and 78.6 percent of fish and shellfish.
This upward trend in imported food has been accompanied by an
increasing number of health and safety incidents related to imported
food products. In the past 6 months, we have seen what appears to be
the intentional contamination of wheat gluten and rice protein
concentrate with melamine, which is an industrial product that should
never find its way into food products. In addition, we recently learned
that a significant volume of imported fish products from China have
been contaminated with chemicals and residues, including Malachine
green and Nitrofuren. We have found imported Chinese toothpaste in the
U.S. that was contaminated with diethylene glycol, which is a toxic
component used in antifreeze.
Unfortunately, the FDA currently lacks the resources and authority to
adequately determine the quality and safety of food imports, inspect an
adequate volume of imported food, and rapidly detect and respond to
incidents of contaminated imports. This legislation would take several
steps to correct these problems.
First, the bill would impose a fee for the FDA's oversight of
imported food products. These fees would generate revenues to be used
for inspections of imported food and critical food safety research. The
legislation directs the FDA to use some of this funding to perform
cutting-edge research to develop testing technologies and methods that
would quickly and accurately detect the presence of pervasive
contaminants such as E. coli and listeria. The legislation would also
establish a food importer certification program that would require
foreign firms and governments to demonstrate that their food safety
systems are equivalent to ours.
What has been made clear through the pet food recall and other
outbreaks of foodborne illnesses is that the FDA is a severely
underfunded and understaffed agency. Much of the responsibility for
overseeing and inspecting the safety of imported food rests with the
[[Page S9141]]
FDA. However, due to fairly flat budgets and increasing
responsibilities, the number of inspectors looking at these shipments
has actually decreased from more than 3,000 inspectors in 2003 to the
present level of around 2,700 inspectors.
The Centers for Disease Control, CDC, estimates that 76 million
Americans become sick from foodborne illnesses each year. More than
300,000 are hospitalized and 5,000 die each year. Less than 1.5 percent
of imported food is inspected by the FDA and the FDA lacks the
resources and authorities to certify the standards of our trading
partners. This situation presents an economic, public health, and
bioterrorism risk to the U.S.
The FDA office that is responsible for regulating more than $60
billion of imported food, the Center for Food Safety and Nutrition,
CFSAN, is also responsible for regulating $417 billion worth of
domestic food and $59 billion in cosmetics. All of this activity is
regulated by an office for which the President requested $467 million
in fiscal year 2008. Only $312 million of that amount would be for
inspectors. We clearly need to review FDA's funding to make sure that
it has the resources necessary to safeguard the 80 percent of our food
supply that it is responsible for regulating. For this reason, a group
of my colleagues and I sent a letter earlier this year to the
Agriculture Appropriations Subcommittee, which funds the FDA, asking
for a significant increase in the level of funding for the FDA foods
program.
But imports present a special challenge. It may cost more to ensure
the safety of food produced in other countries, and the logistical
challenges are greater. It is important that we supplement the FDA's
budget with additional funding streams to make sure that it has the
resources necessary to safeguard our food supply from contaminated
imports.
Specifically this legislation would direct the FDA to collect a user
fee on imported food products, for the administrative review,
processing, and inspection costs borne by the FDA. The legislation
would use that funding to bolster FDA's import inspection program,
which currently inspects less than 1.5 percent of all imports. It would
also fund critical research into rapid testing technologies for
detecting foodborne pathogens.
Lastly, this bill would establish an imported food certification
program. Today, any country and any company can export food products to
the United States as long as they inform regulators of the shipment. No
checks are performed to ensure that the producer has adequate sanitary
standards. The FDA does not ensure that trading partners have
equivalent regulatory systems or inspect overseas plants when problems
arise.
When the FDA does want to investigate an outbreak, it can be delayed
by uncooperative foreign governments. For example, during the pet food
recall, U.S. regulators were delayed three weeks in their request for
visas to inspect facilities.
This new program would mark a watershed change in the food import
safety posture of the U.S. This bill says that if you want a slice of
the lucrative U.S. market, you have to comply with the same common-
sense standards that apply to U.S. food producers. You have to have
equivalent food safety systems and processes in place to those of the
U.S. You need to give U.S. regulators access to your facilities and
records so they can check your safety record without unnecessary delay.
In addition, U.S. regulators would have the power to revoke the
certification of a company or country that fails to comply, and to
detain products that fail to meet U.S. standards.
For too long, we have gone without a solid safety standard for
imported foods. Instead, our regulators jump from alert to alert and
recall to recall. This legislation would close these loopholes that
allow dangerous imports into our country and put a solid, proactive
system in place to protect our food supply.
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. 1776
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; FINDINGS.
(a) Short Title.--This Act may be cited as the ``Imported
Food Security Act of 2007''.
(b) Findings.--Congress finds that--
(1) the safety and integrity of the United States food
supply is vital to the public health, to public confidence in
the food supply, and to the success of the food sector of the
Nation's economy;
(2) illnesses and deaths of individuals and companion pets
caused by contaminated food--
(A) have contributed to a loss of public confidence in food
safety; and
(B) have caused significant economic loses to manufactures
and producers not responsible for contaminated food items;
(3) the task of preserving the safety of the food supply of
the United States faces tremendous pressures with regard to--
(A) emerging pathogens and other contaminants and the
ability to detect all forms of contamination; and
(B) an increasing volume of imported food, without adequate
monitoring and inspection;
(4) the United States is increasing the amount of food that
it imports such that--
(A) from 2003 to the present, the value of food imports has
increased from $45,600,000,000 to $64,000,000,000; and
(B) imported food accounts for 13 percent of the average
Americans diet including 31 percent of fruits, juices, and
nuts, 9.5 percent of red meat and 78.6 percent of fish and
shellfish; and
(5) the number of full time equivalent Food and Drug
Administration employees conducting inspections has decreased
from 2003 to 2007.
SEC. 2. USER FEES REGARDING INSPECTIONS OF IMPORTED FOOD
SAFETY.
Chapter VIII of the Federal Food, Drug, and Cosmetic Act
(21 U.S.C. 381 et seq.) is amended by inserting after section
801 the following:
``USER FEES REGARDING FOOD SAFETY
``Sec. 801A. (a) In General.--
``(1) Assessment.--Beginning in fiscal year 2008, the
Secretary shall in accordance with this section assess and
collect fees on food imported into the United States.
``(2) Purpose of fees.--
``(A) In general.--The purpose of fees under paragraph (1)
is to defray the costs of carrying out section 801 with
respect to food. Costs referred to in the preceding sentence
include increases in such costs for an additional number of
full-time equivalent positions in the Department of Health
and Human Services to be engaged in carrying out such
section.
``(B) Allocations by secretary.--Of the total fee revenues
collected under paragraph (1) for a fiscal year, the
Secretary shall reserve and expend amounts in accordance with
the following:
``(i) The Secretary shall reserve not less than 50 percent
for carrying out section 801 with respect to food, other than
research under section 801(p). In expending the amount so
reserved, the Secretary shall give first priority to
inspections conducted at ports of entry into the United
States and second priority to the implementation of the
import certification program under section 805.
``(ii) The Secretary shall reserve not more than 50 percent
for carrying out research under section 801(p).
``(3) Amount of fee; collection.--A fee under paragraph (1)
shall be assessed on each line item of food, as defined by
the Secretary by regulation. The amount of the fee shall be
based on the number of line items, and may not exceed $20 per
line item, notwithstanding subsection (b). The liability for
the fee constitutes a personal debt due to the United States,
and such liability accrues on the date on which the Secretary
approves the food under section 801(c)(1). The Secretary may
coordinate with and seek the cooperation of other agencies of
the Federal Government regarding the collection of such fees.
``(b) Total Fee Revenues.--The total fee revenues collected
under subsection (a) for a fiscal year shall be the amount
appropriated under subsection (f)(3).
``(c) Annual Fee Adjustment.--Not later than 60 days after
the end of each fiscal year beginning after fiscal year 2008,
the Secretary, subject to not exceeding the maximum fee
amount specified in subsection (a)(3), shall adjust the
amounts that otherwise would under subsection (a) be assessed
as fees during the fiscal year in which the adjustment occurs
so that the total revenues collected in such fees for such
fiscal year equal the amount applicable pursuant to
subsection (b) for the fiscal year.
``(d) Fee Waiver or Reduction.--The Secretary shall grant a
waiver from or a reduction of a fee assessed under subsection
(a) where the Secretary finds that the fee to be paid will
exceed the anticipated present and future costs incurred by
the Secretary in carrying out section 801 with respect to
food (which finding may be made by the Secretary using
standard costs).
``(e) Assessment of Fees.--
``(1) Limitation.--Fees may not be assessed under
subsection (a) for a fiscal year beginning after fiscal year
2008 unless the amount appropriated for salaries and expenses
of the Food and Drug Administration for such fiscal year is
equal to or greater than the amount appropriated for salaries
and expenses of the Food and Drug Administration
[[Page S9142]]
for fiscal year 2008 multiplied by the adjustment factor
applicable to the fiscal year involved, except that in making
determinations under this paragraph for the fiscal years
involved there shall be excluded--
``(A) the amounts appropriated under subsection (f)(3) for
the fiscal years involved; and
``(B) the amounts appropriated under section 736(g) for
such fiscal years.
``(2) Authority.--If the Secretary does not assess fees
under subsection (a) during any portion of a fiscal year
because of paragraph (1) and if at a later date in such
fiscal year the Secretary may assess such fees, the Secretary
may assess and collect such fees, without any modification in
the rate of the fees, at any time in such fiscal year
notwithstanding the provisions of subsection (a)(3) relating
to the time at which fees are to be paid.
``(f) Crediting and Availability of Fees.--
``(1) In general.--Fees collected for a fiscal year
pursuant to subsection (a) shall be credited to the
appropriation account for salaries and expenses of the Food
and Drug Administration and shall be available in accordance
with appropriation Acts until expended without fiscal year
limitation. Such sums as may be necessary may be transferred
from the Food and Drug Administration salaries and expenses
appropriation account without fiscal year limitation to such
appropriation account for salaries and expenses with such
fiscal year limitation. The sums transferred shall be
available solely for carrying out section 801 with respect to
food, and the sums are subject to allocations under
subsection (a)(2)(B).
``(2) Collections and appropriation acts.--The fees
authorized in subsection (a)--
``(A) shall be collected in each fiscal year in accordance
with subsections (a)(3) and (b); and
``(B) shall only be collected and available for the purpose
specified in subsection (a)(2).
``(3) Authorization of appropriations; allocations by
secretary.--Subject to paragraph (4), there is authorized to
be appropriated for fees under this section such sums as may
be necessary to carry out the purposes of this section for
each of the fiscal years 2008 through 2012. Such appropriated
funds may be in addition to any other funds appropriated for
such purposes.
``(4) Offset.--Any amount of fees collected for a fiscal
year under subsection (a) that exceeds the amount of fees
specified in appropriation Acts for such fiscal year shall be
credited to the appropriation account of the Food and Drug
Administration as provided in paragraph (1), and shall be
subtracted from the amount of fees that would otherwise be
authorized to be collected under this section pursuant to
appropriation Acts for a subsequent fiscal year.
``(g) Collection of Unpaid Fees.--In any case where the
Secretary does not receive payment of a fee assessed under
subsection (a) within 30 days after it is due, such fee shall
be treated as a claim of the United States Government subject
to subchapter II of chapter 37 of title 31, United States
Code.
``(h) Construction.--This section may not be construed as
requiring that the number of full-time equivalent positions
in the Department of Health and Human Services, for officers,
employees, and advisory committees not engaged in carrying
out section 801 with respect to food be reduced to offset the
number of officers, employees, and advisory committees so
engaged.
``(i) Definition of Adjustment Factor.--For purposes of
this section, the term `adjustment factor' applicable to a
fiscal year is the Consumer Price Index for all urban
consumers (all items; United States city average) for April
of the preceding fiscal year divided by such Index for April
2007.''.
SEC. 3. RESEARCH ON TESTING TECHNIQUES FOR FOOD SAFETY
INSPECTIONS OF IMPORTED FOOD; PRIORITY
REGARDING DETECTION OF INTENTIONAL
ADULTERATION.
Section 801 of the Federal Food, Drug, and Cosmetic Act (21
U.S.C. 381) is amended by adding at the end the following:
``(p) Research on Testing Techniques for Food Safety
Inspections of Imported Food.--
``(1) In general.--The Secretary shall (directly or through
grants or contracts) provide for research on the development
of tests and sampling methodologies, for use in inspections
of food under this section--
``(A) whose purpose is to determine whether food is
adulterated by reason of being contaminated with
microorganisms or pesticide chemicals or related residues;
and
``(B) whose results are available not later than
approximately 60 minutes after the administration of the
tests.
``(2) Priority.--In providing for research under paragraph
(1), the Secretary shall give priority to conducting research
on the development of tests that are suitable for inspections
of food at ports of entry into the United States. In
providing for research under paragraph (1), the Secretary
shall under the preceding sentence give priority to
conducting research on the development of tests for detecting
the presence in food of the pathogens E. coli, salmonella,
cyclospora, cryptosporidium, hepatitis A, or listeria, the
presence in or on food of pesticide chemicals and related
residues, and the presence in or on food of such other
pathogens or substances as the Secretary determines to be
appropriate. The Secretary shall establish the goal of
developing, by the expiration of the 3-year period beginning
on the date of the enactment of the Imported Food Security
Act of 2007, tests under paragraph (1) for each of the
pathogens and substances receiving priority under the
preceding sentence.
``(3) Periodic reports.--The Secretary shall submit to
Congress periodic reports describing the progress that has
been made toward the goal referred to in paragraph (1) and
describing plans for future research toward the goal. Each of
the reports shall provide an estimate by the Secretary of the
amount of funds needed to meet such goal, and shall provide a
determination by the Secretary of whether there is a need for
further research under this subsection. The first such report
shall be submitted not later than March 1, 2008, and
subsequent reports shall be submitted semiannually after the
submission of the first report until the goal is met.
``(4) Consultation.--The Secretary shall carry out the
program of research under paragraph (1) in consultation with
the Director of the Centers for Disease Control and
Prevention, the Director of the National Institutes of
Health, and the Administrator of the Environmental Protection
Agency. The Secretary shall with respect to such research
coordinate the activities of the Department of Health and
Human Services. The Secretary shall in addition consult with
the Secretary of Agriculture (acting through the Food Safety
and Inspection Service of the Department of Agriculture) in
carrying out the program.
``(5) Awards to private entities.--Of the amounts reserved
under section 801A(a)(2)(B)(ii) for a fiscal year for
carrying out the program of research under paragraph (1), the
Secretary shall make available not less than 50 percent for
making awards of grants or contracts to private entities to
conduct such research.''.
SEC. 4. CERTIFICATION OF FOOD IMPORTS.
(a) In General.--Chapter VIII of the Federal Food, Drug,
and Cosmetic Act (21 U.S.C. 381 et seq.) is amended by adding
at the end the following:
``SEC. 805. CERTIFICATION OF FOOD IMPORTS.
``(a) In General.--Not later than 2 years after the date of
enactment of this section, the Secretary shall establish a
system under which a foreign government or foreign food
establishment seeking to import food to the United States
shall submit a request for certification to the Secretary.
``(b) Certification Standard.--A foreign government or
foreign food establishment requesting a certification to
import food to the United States shall demonstrate, in a
manner determined appropriate by the Secretary, that food
produced under the supervision of a foreign government or by
the foreign food establishment has met standards for food
safety, inspection, labeling, and consumer protection that
are at least equivalent to standards applicable to food
produced in the United States.
``(c) Certification Approval.--
``(1) Request by foreign government.--Prior to granting the
certification request of a foreign government, the Secretary
shall review, audit, and certify the food safety program of a
requesting foreign government (including all statutes,
regulations, and inspection authority) as at least equivalent
to the food safety program in the United States, as
demonstrated by the foreign government.
``(2) Request by foreign food establishment.--Prior to
granting the certification request of a foreign food
establishment, the Secretary shall certify, based on an
onsite inspection, the food safety programs and procedures of
a requesting foreign firm as at least equivalent to the food
safety programs and procedures of the United States.
``(d) Limitation.--A foreign government or foreign firm
approved by the Secretary to import food to the United States
under this section shall be certified to export only the
approved food products to the United States for a period not
to exceed 5 years.
``(e) Withdrawal of Certification.--The Secretary may
withdraw certification of any food from a foreign government
or foreign firm--
``(1) if such food is linked to an outbreak of human
illness;
``(2) following an investigation by the Secretary that
finds that the foreign government programs and procedures or
foreign food establishment is no longer equivalent to the
food safety programs and procedures in the United States; or
``(3) following a refusal to allow United States officials
to conduct such audits and investigations as may be necessary
to fulfill the requirements under this section.
``(f) Renewal of Certification.--The Secretary shall audit
foreign governments and foreign food establishments at least
every 5 years to ensure the continued compliance with the
standards set forth in this section.
``(g) Required Routine Inspection.--The Secretary shall
routinely inspect food and food animals (via a physical
examination) before it enters the United States to ensure
that it is--
``(1) safe;
``(2) labeled as required for food produced in the United
States; and
``(3) otherwise meets requirements under this Act.
``(h) Enforcement.--The Secretary is authorized to--
``(1) deny importation of food from any foreign government
that does not permit United States officials to enter the
foreign country to conduct such audits and inspections as may
be necessary to fulfill the requirements under this section;
[[Page S9143]]
``(2) deny importation of food from any foreign government
or foreign firm that does not consent to an investigation by
the Secretary when food from that foreign country or foreign
firm is linked to a food-borne illness outbreak or is
otherwise found to be adulterated or mislabeled; and
``(3) promulgate rules and regulations to carry out the
purposes of this section, including setting terms and
conditions for the destruction of products that fail to meet
the standards of this Act.
``(i) Detention and Seizure.--Any food imported for
consumption in the United States may be detained, seized, or
condemned pursuant to section 304.
``(j) Definition.--For purposes of this section, the term
`food establishment'--
``(1) means a slaughterhouse, factory, warehouse, or
facility owned or operated by a person located in any State
that processes food or a facility that holds, stores, or
transports food or food ingredients; and
``(2) does not include a farm, restaurant, other retail
food establishment, nonprofit food establishment in which
food is prepared for or served directly to the consumer, or
fishing vessel (other than a fishing vessel engaged in
processing, as that term is defined in section 123.3 of title
21, Code of Federal Regulations).''.
(b) Transitional Program.--Not later than 180 days after
the date of enactment of this Act, the Secretary of Health
and Human Services shall promulgate regulations to establish
a transitional food safety import review program, with
minimal disruption to commerce, that shall be in effect until
the date of implementation of the food import certification
program under section 805 of the Federal Food, Drug, and
Cosmetic Act (as added by subsection (a)).
______
By Mr. TESTER (for himself and Mr. Dorgan):
S. 1779. A bill to establish a program for tribal colleges and
universities within the Department of Health and Human Services and to
amend the Native American Programs Act of 1974 to authorize the
provision of grants and cooperative agreements to tribal colleges and
universities, and for other purposes; to the Committee on Indian
Affairs.
Mr. TESTER. Mr. President, Indian Education is perhaps the most
important issue facing Indian Country today because education
represents hope. Higher education leads to better job opportunities.
Better jobs lead to higher income and happier days. Higher income leads
to greater access to health care and adequate housing and overall, a
higher quality of life. Higher quality of life leads to strong
communities. Happy, healthy, and strong communities are more resistant
to the destructive forces of poverty such as chemical abuse, violence
and neglect.
No one disagrees that 85 percent unemployment in Indian Country is
unacceptable. No one disagrees that it is unacceptable that the
majority of America's at-risk youth live in Indian Country. However,
merely reciting these statistics over and over won't make the situation
any better. We need to work together to make Indian Country a better
place to live, work and raise a family.
Senator Dorgan and I introduce this vital legislation to help advance
the remarkable work tribal colleges and universities are doing. Through
grants awarded under this bill, tribal colleges and universities will
have additional resources necessary to strengthen Indian communities
through the provision of health promotion and disease prevention
education, outreach and workforce development programs, through program
implementation, research, and capacity building. Not only will it
improve education, but it will also improve the delivery of culturally
appropriate health care services. In addition to good education and
increased access to health care, this bill will also help create good
jobs in Indian Country.
Tribal colleges and universities are accredited by independent,
regional accreditation agencies, and like all institutions of higher
education, must undergo stringent performance reviews to retain their
accreditation status. In addition to offering postsecondary education
opportunities, tribal colleges serve reservation communities by
providing critical services including: libraries, community centers,
cultural, historical and language programs; tribal archives, career
centers, economic development and business centers; health and wellness
centers, public meeting places, child and elder care centers. Despite
their many obligations, functions, and notable achievements, tribal
colleges remain the most poorly funded institutions of higher education
in this country.
The continued success and future of the Nation's tribal colleges and
universities depends on their ability to provide higher education and
community outreach programs. For them to succeed however, they must
have the financial resources to do so. I am honored to rise today to
introduce this important legislation for improving conditions in
America's Indian Country. I am proud of the folks who came together to
help craft the bill and am proud to cosponsor it with my friend,
Chairman of the Senate Committee on Indian Affairs, Senator Dorgan.
I am proud to serve on the Indian Affairs Committee and to work to
improve conditions in Indian Country.
For example, on April 5th, I held a Tribal College Summit at the
Blackfeet Community College in Browning, the first of its kind.
Leaders of all the Tribal nations in Montana and leaders throughout
Indian higher education met to brainstorm about how we can improve
tribal colleges in the State of Montana and across the country. By the
end of the day, each group pledged to take specific actions to improve
tribal college education throughout the U.S.
Part of my pledge includes introducing this PATH legislation. By
training more Indian students to enter the health care field, we will
provide Indian country with more educated and self-sufficient members
and improve the quality of and access to healthcare in Indian Country.
Healthier communities and good-paying jobs lead to improved overall
conditions in Indian Country.
As a Montanan and member of the Senate Indian Affairs Community, I am
proud to introduce this legislation. I look forward to swift
consideration and eventual passage.
______
By Mrs. BOXER (for herself and Mrs. Feinstein):
S. 1781. A bill to designate the facility of the United States Postal
Service located at 118 Minner Avenue in Bakersfield, California, as the
``Buck Owens Post Office''; to the Committee on Homeland Security and
Governmental Affairs.
Mrs. BOXER. Mr. President, today I am joined by my colleague, Senator
Feinstein, to introduce legislation to designate the facility of the
United States Postal Service located at 118 Minner Avenue in
Bakersfield, California, as the Buck Owens Post Office.
Country western legend, Buck Owens was one of the pioneers of the
``Bakersfield Sound,'' that brought the raw edge of electric guitars
and a rock and roll beat to country music. A great musician and a
generous man, Buck left behind a legacy of artistry and love for his
adopted hometown of Bakersfield and California's Central Valley.
The son of a sharecropper, Buck was born Alvis Edgar Owens, Jr. in
Sherman, TX, in 1929. At an early age, he nicknamed himself ``Buck''
after a mule on the family farm. In 1937, the Owens family moved west
seeking better fortune during the Great Depression. When he was just 13
years old, Buck dropped out of school to find work, but he never
stopped pursuing his passion for music.
A natural musician, Buck taught himself to play guitar in his early
teens. When he was just 16, he had already landed a regular show on a
local radio station and was playing shows in honky tonks and bars
around Phoenix. Just 6 years later, Buck moved his young family to
Bakersfield, California, where he began to make his mark on country
music as a performer, a songwriter, and a recording artist.
Buck's trademark stinging electric guitar and rhythm sound
revolutionized country music and challenged the Nashville
establishment. His 20 number-one hits are a testament to his place
among the greatest artists in country music history. Throughout his
decades as an entertainer, Buck delighted audiences from Bakersfield to
Nashville, all the way to Japan and even the White House.
Buck's pioneering work has continued to inspire a new generation of
musicians. In 1986, when Buck had finished a 25-year run as the cohost
of the Hee Haw television show, Dwight Yoakam and other new traditional
performers were just beginning a revival of his hallmark Bakersfield
Sound.
I was fortunate to have met Buck back in 1997 at his Crystal Palace
in Bakersfield, when I was invited to
[[Page S9144]]
present one of his special red, white, and blue guitars to a promising
music student named William Villatoro. I still vividly remember how the
young man was deeply moved and inspired by Buck's generous gesture. I
will certainly remember Buck Owens as a man of great compassion who
possessed a profound love for his country. Although he is no longer
with us, I take great comfort in knowing that Buck Owens was able to be
a shining light not only in the life of a young man from Bakersfield
but also to the millions of others who admired his musical gifts and
were touched by his humanity.
I encourage my colleagues to join me in support of this legislation
as we commemorate an icon of American music whose artistry and
generosity touched so many lives in his community.
______
By Mr. FEINGOLD (for himself and Mr. Durbin):
S. 1782. A bill to amend chapter 1 of title 9 of United States Code
with respect to arbitration; to the Committee on the Judiciary.
Mr. FEINGOLD. Mr. President, today I will introduce the Arbitration
Fairness Act of 2007. Just as its name suggests, the Arbitration
Fairness Act is designed to return fairness to the arbitration system.
This bill is not an anti-arbitration bill. If anything, it is pro-
arbitration. I firmly believe that this bill will strengthen the
arbitration system by returning arbitration to a more equitable design
that reflects the intent of the original arbitration legislation, the
Federal Arbitration Act.
President Calvin Coolidge signed the Federal Arbitration Act, FAA,
into law on February 12, 1925. Congress passed the FAA to make
arbitration an enforceable alternative to the civil courts. Even as
early as the 1920s, there were concerns about the efficiency of the
civil court system and a desire to allow a speedier alternative. The
intent of the FAA, as expressed in a 1923 hearing before a subcommittee
of the Senate Judiciary Committee, was ``to enable business men to
settle their disputes expeditiously and economically.'' In a later
hearing on the FAA, it was clarified that the legislation was not
intended to apply to the employment contracts of those businesses. This
distinction is important because it illustrates that, while arbitration
was something that the FAA's original sponsors wanted to promote, they
were also careful to make clear that they didn't intend for arbitration
to become a weapon to be wielded by the powerful against those with
less financial and negotiating power.
Since the FAA's enactment, the use of arbitration has grown
exponentially. Arbitration certainly has advantages. It can be a fair
and efficient way to settle disputes. I strongly support voluntary,
alternative dispute resolution methods, and I believe we ought to
encourage their use. But I also believe that arbitration is a fair way
to settle disputes between consumers and lenders only when it is
entered into knowingly and voluntarily by both parties to the dispute
after the dispute has arisen. Otherwise arbitration can be used as a
weapon by the stronger party against the weaker party.
One of the most fundamental principles of our justice system is the
constitutional right to take a dispute to court. Indeed, all Americans
have the right in civil and criminal cases to a trial by jury. The
right to a jury trial in civil cases in Federal court is contained in
the Seventh Amendment to the Constitution. Many States provide a
similar right to a jury trial in civil matters filed in State court.
I have been concerned for many years that mandatory arbitration
clauses are slowly eroding the legal protections that should be
available to all Americans. A large and growing number of corporations
now require millions of consumers and employees to sign contracts that
include mandatory arbitration clauses. Most of these individuals have
little or no meaningful opportunity to negotiate the terms of their
contracts and so find themselves having to choose either to accept a
mandatory arbitration clause or to forgo securing employment or needed
goods and services. Incredibly, mandatory arbitration clauses have been
used to prevent individuals from trying to vindicate their civil rights
under statutes specifically passed by Congress to protect them.
There is a range of ways in which mandatory arbitration can be
particularly hostile to individuals attempting to assert their rights.
For example, the administrative fees, both to gain access to the
arbitration forum and to pay for the ongoing services of the arbitrator
or arbitrator, can be so high as to act as a de facto bar for many
individuals who have a claim that requires resolution. In addition,
arbitration generally lacks discovery proceedings and other civil due
process protections.
Furthermore, there is no meaningful judicial review of arbitrators'
decisions. Under mandatory, binding arbitration, even if a party
believes that the arbitrator did not consider all the facts or follow
the law, the party cannot file a suit in court. The only basis for
challenging a binding arbitration decision is fairly narrow: if there
is reason to believe that the arbitrator committed actual fraud, or was
biased, corrupt, or guilty of misconduct, or exceeded his or her
powers. Because mandatory, binding arbitration is so conclusive, it is
a credible means of dispute resolution only when all parties understand
the full ramifications of agreeing to it.
Unfortunately, in a variety of contexts, employment agreements,
credit card agreements, HMO contracts, securities broker contracts, and
other consumer and franchise agreements, mandatory arbitration is fast
becoming the rule, rather than the exception. The practice of forcing
employees to use arbitration has been on the rise since the Supreme
Court's Circuit City decision in 2001. Unless Congress acts, the
protections it has provided through law for American workers,
investors, and consumers, will slowly become irrelevant.
The Arbitration Fairness Act of 2007, which I am happy to say will
also be introduced in the House by Representative Hank Johnson, D-GA,
reinstates the FAA's original intent by requiring that agreements to
arbitrate employment, consumer, franchise, or civil rights disputes be
made after the dispute has arisen. The act does not apply to mandatory
arbitration systems agreed to in collective bargaining, and it does not
prohibit arbitration. What it does do is prevent a party with greater
bargaining power from forcing individuals into arbitration through a
contractual provision. It will ensure that citizens once again have a
true choice between arbitration and the traditional civil court system.
In our system of Government, Congress and State legislatures pass
laws and the courts are available to citizens to make sure those laws
are enforced. But the rule of law means little if the only forum
available to those who believe they have been wronged is an
alternative, unaccountable system where the law passed by the
legislature does not necessarily apply. This legislation both protects
Americans from exploitation and strengthens a valuable alternative
method of dispute resolution. These are both worthy ends, and I hope
that my colleagues in the Senate will join me in working to pass this
important bill.
I ask unanimous consent that the text of the bill and a section-by-
section analysis be printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
S. 1782
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 ``Arbitration Fairness Act of
2007''.
SEC. 2. FINDINGS.
The Congress finds the following:
(1) The Federal Arbitration Act (now enacted as chapter 1
of title 9 of the United States Code) was intended to apply
to disputes between commercial entities of generally similar
sophistication and bargaining power.
(2) A series of United States Supreme Court decisions have
changed the meaning of the Act so that it now extends to
disputes between parties of greatly disparate economic power,
such as consumer disputes and employment disputes. As a
result, a large and rapidly growing number of corporations
are requiring millions of consumers and employees to give up
their right to have disputes resolved by a judge or jury, and
instead submit their claims to binding arbitration.
(3) Most consumers and employees have little or no
meaningful option whether to submit their claims to
arbitration. Few people
[[Page S9145]]
realize, or understand the importance of the deliberately
fine print that strips them of rights; and because entire
industries are adopting these clauses, people increasingly
have no choice but to accept them. They must often give up
their rights as a condition of having a job, getting
necessary medical care, buying a car, opening a bank account,
getting a credit card, and the like. Often times, they are
not even aware that they have given up their rights.
(4) Private arbitration companies are sometimes under great
pressure to devise systems that favor the corporate repeat
players who decide whether those companies will receive their
lucrative business.
(5) Mandatory arbitration undermines the development of
public law for civil rights and consumer rights, because
there is no meaningful judicial review of arbitrators'
decisions. With the knowledge that their rulings will not be
seriously examined by a court applying current law,
arbitrators enjoy near complete freedom to ignore the law and
even their own rules.
(6) Mandatory arbitration is a poor system for protecting
civil rights and consumer rights because it is not
transparent. While the American civil justice system features
publicly accountable decision makers who generally issue
written decisions that are widely available to the public,
arbitration offers none of these features.
(7) Many corporations add to their arbitration clauses
unfair provisions that deliberately tilt the systems against
individuals, including provisions that strip individuals of
substantive statutory rights, ban class actions, and force
people to arbitrate their claims hundreds of miles from their
homes. While some courts have been protective of individuals,
too many courts have upheld even egregiously unfair mandatory
arbitration clauses in deference to a supposed Federal policy
favoring arbitration over the constitutional rights of
individuals.
SEC. 3. DEFINITIONS.
Section 1 of title 9, United States Code, is amended--
(1) by amending the heading to read as follows:
``Sec. 1. Definitions'';
(2) by inserting before `` `Maritime' '' the following:
``As used in this chapter--'';
(3) by striking `` `Maritime transactions' '' and inserting
the following:
``(1) `maritime transactions';'';
(4) by striking ``commerce'' and inserting the following:
``(2) `commerce' '';
(5) by striking ``, but nothing'' and all that follows
through the period at the end, and inserting a semicolon; and
(6) by adding at the end the following:
``(3) `employment dispute', as herein defined, means a
dispute between an employer and employee arising out of the
relationship of employer and employee as defined by the Fair
Labor Standards Act;
``(4) `consumer dispute', as herein defined, means a
dispute between a person other than an organization who seeks
or acquires real or personal property, services, money, or
credit for personal, family, or household purposes and the
seller or provider of such property, services, money, or
credit;
``(5) `franchise dispute', as herein defined, means a
dispute between a franchisor and franchisee arising out of or
relating to contract or agreement by which--
``(A) a franchisee is granted the right to engage in the
business of offering, selling, or distributing goods or
services under a marketing plan or system prescribed in
substantial part by a franchisor;
``(B) the operation of the franchisee's business pursuant
to such plan or system is substantially associated with the
franchisor's trademark, service mark, trade name, logotype,
advertising, or other commercial symbol designating the
franchisor or its affiliate; and
``(C) the franchisee is required to pay, directly or
indirectly, a franchise fee; and
``(6) `pre-dispute arbitration agreement', as herein
defined, means any agreement to arbitrate disputes that had
not yet arisen at the time of the making of the agreement.''.
SEC. 4. VALIDITY AND ENFORCEABILITY.
Section 2 of title 9, United States Code, is amended--
(1) by amending the heading to read as follows:
``Sec. 2. Validity and enforceability'',
(2) by inserting ``(a)'' before ``A written'';
(3) by striking ``, save'' and all that follows through
``contract'', and inserting ``to the same extent as contracts
generally, except as otherwise provided in this title''; and
(4) by adding at the end the following:
``(b) No predispute arbitration agreement shall be valid or
enforceable if it requires arbitration of--
``(1) an employment, consumer, or franchise dispute; or
``(2) a dispute arising under any statute intended to
protect civil rights or to regulate contracts or transactions
between parties of unequal bargaining power.
``(c) An issue as to whether this chapter applies to an
arbitration agreement shall be determined by Federal law.
Except as otherwise provided in this chapter, the validity or
enforceability of an agreement to arbitrate shall be
determined by the court, rather than the arbitrator,
irrespective of whether the party resisting arbitration
challenges the arbitration agreement specifically or in
conjunction with other terms of the contract containing such
agreement.
``(d) Nothing in this chapter shall apply to any
arbitration provision in a collective bargaining
agreement.''.
SEC. 5. EFFECTIVE DATE.
This Act, and the amendments made by this Act, shall take
effect on the date of the enactment of this Act and shall
apply with respect to any dispute or claim that arises on or
after such date.
____
Section-by-Section Analysis
When Congress enacted the Federal Arbitration Act
(``FAA''), its goal was to allow an alternative forum for
parties on equal footing to resolve their disputes. Yet a
series of court decisions moved the law away from its
original intent and opened the door for arbitration to be
used to deprive ordinary citizens in employment, consumer,
and franchise disputes of their constitutional right to use
the civil justice system.
The Arbitration Fairness Act of 2007, introduced in the
Senate by Sen. Russ Feingold (D-WI) and in the House by Rep.
Hank Johnson (D-GA), reflects the FAA's original intent by
requiring that agreements to arbitrate employment, consumer,
franchise, or civil rights disputes be made after the dispute
has arisen. The Act does not prohibit arbitration, but it
will prevent a party with greater bargaining power from
forcing individuals into arbitration through a contract
entered into prior to a dispute arising. It will ensure that
citizens have a true choice between arbitration and the
traditional civil court system.
Sec. 1: Short Title: the ``Arbitration Fairness Act of
2007''
Sec. 2: Findings: This section details how the law has
moved away from the original intent of the Federal
Arbitration Act and has now exposed growing numbers of
individual consumers and employees to mandatory arbitration
agreements. It also discusses the ways in which mandatory
arbitration systems are skewed in favor of powerful,
corporate, repeat players.
Sec. 3: Definitions: This section amends section 1 of the
FAA (9 U.S.C. Sec. 1) to include specific definitions of
``employment dispute,'' ``consumer dispute,'' and ``franchise
dispute,'' which are covered by the Act. An employment
dispute is any dispute between an employer and employee
arising out of the relationship as defined by the Fair Labor
Standards Act. A consumer dispute is a dispute between an
individual person who seeks or acquires property, services,
money, or credit for non-business purposes and the seller or
provider of those goods or services. A franchise dispute is a
dispute between a franchisor and franchisee arising out of or
relating to the contract establishing the franchise.
Sec. 4: Validity and Enforceability: This section amends
section 2 of the FAA (9 U.S.C. Sec. 2) to establish that
agreements to arbitrate employment, consumer, or franchise
disputes will not be enforceable if they are entered before
the actual dispute arises. It extends this rule to disputes
arising under civil rights statutes and statutes regulating
contracts or transactions between parties of unequal
bargaining power. This section also states that disputes as
to whether the Act applies shall be resolved by the court,
rather than through arbitration. Finally, the section
clarifies that the Act does not apply to collective
bargaining agreements.
Sec. 5: Effective Date: The Act shall apply to claims and
disputes arising on or after the date of enactment.
______
By Mr. ENZI:
S. 1783. A bill to provide 10 steps to transform health care in
America; to the Committee on Finance.
Mr. ENZI. Mr. President, I rise for the purpose of introducing a bill
on health care reform. I know the Presiding Officer has immense
interest in it, as do a number of other Senators. I have read his bill
and incorporated many parts of that.
Health care reform is one of the biggest needs in this country. It is
the fastest escalating price in this country. It is the biggest cost to
companies and individuals in this country. We need to have a solution.
I have been working with Senator Kennedy, who is the chairman of the
Health, Education, Labor and Pensions Committee. He has a very full
plate with the Higher Education Act, the higher education
reconciliation, information technology, and I could go on to mention
about 53 bills we are working on in that committee. So I have had some
latitude as ranking member to try to pull together some information--
some legislation that would deal with health care for this Nation. This
is a work in progress. This is not a finished document.
I wish to thank Senator Kennedy for working with me and his staff and
my staff to come up with some health care principles we wanted to
follow. Of course, I appreciate the work Senator Nelson did with me in
previous times and currently on small business health plans. I
appreciate Senator Baucus's efforts on health care and how the tax
[[Page S9146]]
package goes together with that. We can see there are a lot of moving
parts to anything we do with health. Senator Coburn has an outstanding
and very comprehensive package on how we can solve many of the health
care and health insurance problems in this Nation. Senator Lott,
Senator DeMint, Senator McConnell; as I mentioned, the Presiding
Officer, Senator Whitehouse; Senator Lincoln, Senator Carper, Senator
Salazar, and Senator Durbin--these are all people who have come up with
either a comprehensive plan or a piece of a plan that would work to
make an important difference in health care in this country.
Congressman McCreary on the House side has been a real leader on this
and, of course, the President and the administration have made
contributions as well. The President, in his State of the Union speech,
made some comments about how taxes would fit in with solving some of
the uninsured problems in the country, and some of those provisions are
in here as well.
Without the work of everyone on this, it can't be done. If it gets
polarized, it can't be done. This is something which has to be done in
a very bipartisan way. I hope we have a framework from which we can all
operate, making changes, finding third ways.
I work on an 80-percent rule. I anticipate and from experience have
found that usually everybody can agree on 80 percent of the issues, and
among the 80 percent of the issues on which they agree, they can agree
on 80 percent of any one of those issues. You never get a perfect bill
around here. If you can get 80 percent, you can get a lot done. That is
what we are trying to do on health care--make an 80-percent change for
the people of America. Eighty percent would be a huge difference and
will help out a lot of people.
So I rise today to talk about an issue that is literally a heartbeat
away from devastating the lives of every American; that is, our current
health care crisis. Undeniably, we have a problem. There are 46.1
million Americans, according to the last tabulation, who are uninsured.
Now, we always talk about that figure and change it slightly
differently because there are 7 million of those people who make over
$80,000 a year and don't have insurance, so they must choose not to
have insurance, but they are uninsured. People who are on Medicaid,
they don't have to sign up for anything before they have an emergency.
When they go to the hospital, they can sign up then. That is a
significant number of the 46.1 million people as well. So I don't know
whether to really say they don't have insurance, but at any rate, let's
just use that figure of 46.1 million Americans who are uninsured and
figure out a way to solve that, as well as to help people who also have
insurance to perhaps be able to handle the situation even better.
Health care costs are outstripping inflation. They are increasing
annually at three times the rate of the Consumer Price Index. It is
little surprise that three out of every four Americans are concerned
about health care--three out of four. I think probably, if you are
talking to people, you would think the percentage was even higher than
that.
Employer-provided health insurance is voluntary and in critical
condition. Sixty percent of the country's employers offer insurance
today, but that is down 9 percent from a few years ago. It is partly
due to the fact that the cost of health insurance for companies has
nearly doubled in the same amount of time. With employers expected to
pay over $8,000 per employee versus $4,000 5 years ago, we have no
choice but to stabilize the system and provide more options for
businesses so they can continue to provide health care for their
employees.
We must also provide real options--real options for those without
employer-based health care. My own home State of Wyoming is hard-hit.
On average, one in five Wyoming residents is uninsured, and more and
more residents are losing the coverage they do have as the costs go up.
It is largely due to the fact that much of Wyoming's economy is small
business. Nearly 70 percent of Wyoming employers are small business.
Actually, if you use the Federal definition of small business and you
talk about companies headquartered in Wyoming, 100 percent of the
companies are small business. We don't have a single one, according to
the Federal definition, that is based in Wyoming. But nearly 70 percent
of the employers find that it is nearly impossible to afford health
care coverage for their employees.
Thankfully, I am not here today to talk about these problems; I am
here to provide real solutions. Americans need and deserve real
solutions to this crisis now, and they are counting on this body to
work together to get that. The time has come to move beyond the
rhetoric and principles to true comprehensive health care reform.
Congress could enact 10 major steps for health care reform. These 10
steps are the basis of the legislation I am introducing today, the Ten
Steps to Transform Health Care in America, or simply ``Ten Steps.''
In putting together these 10 steps, I first wanted to understand the
problem, and all the proposals others have been discussing help with
that. I have studied those other proposals very carefully, and my
colleagues will find that I have included many of the concepts of those
other proposals in the 10 steps. I particularly wish to recognize again
and thank Senator Baucus, Senator Kennedy, Senator Nelson, Senator
Coburn, Senator Lott, Senator DeMint, Senator McConnell, Senator
Whitehouse, Senator Lincoln, Senator Carper, Senator Salazar, Senator
Durbin, Congressman McCreary, the President, the administration--all of
them for their contributions, for their patience, and for their
willingness to share their ideas.
However, to truly do this right, we have to move beyond the usual
jurisdictional issues, beyond the usual reauthorizations of a single
program at a time. We have to examine the whole health care system and
together--together, we have to put forward a bold and comprehensive
solution that addresses our health care crisis. That is what Ten Steps
does. It is a comprehensive solution to a very big problem. It can be
done in parts. It doesn't have to be done as one structure.
It needs to go through the committee process. I have pointed out
several times that bills that don't go through the committee process
usually don't make it through the process at all. They are good for
making rhetoric, they are good for making points, they are sometimes
good for advancing a principle, but they seldom ever make it to the
President's desk for signature. So I know this will have to go through
more than one committee. I know the jurisdictional issues between
Health, Education, Labor and Pensions and the Finance Committees. I
have no problem. We did the pensions bill last year, going through
those same kinds of multiple committees and getting agreement from
everybody, and that can be done on this issue as well--of course, as
long as we don't polarize it.
So I want to reiterate again that this is not a final bill. One of
the things we have done in the HELP Committee which has helped to move
things along is to consider every bill a work in progress. At a lot of
the committee meetings, when you have a markup, different amendments
are presented and they are voted up or down, just like on the floor.
Well, that doesn't result in a lot of compromise. So what we have done
on the HELP Committee is use the markup process as an indication of
problems and the level of intensity of those problems, and we have
agreed to work through those problems even after the bill makes it
through committee. As a result, it seldom makes it through committee
unanimously, but it makes it through committee in a bipartisan way, and
that encourages people to work together to find solutions. Sometimes it
is one way or the other, but usually it is finding a third way to come
up with a mechanism to do what we are trying to do. Once we can put
away some of the old ``diving into the weeds'' things that have
happened year after year, we are able to come up with something new and
different that actually reaches the goal we have been trying to reach
as we jumped into the weeds through the whole process.
So I want to remind everybody that it is a work in progress. We want
more ideas. We want some of those third ways. But primarily, we want
everybody to take a look at what is in here because it is a compilation
of a number of people who have really taken a look at the situation.
So what does it do? These 10 steps--I will break them down into the
actual 10 steps and go through each of them.
[[Page S9147]]
First, we eliminate unfair tax treatment of health insurance, which
expands choices and coverage and gives all Americans more control over
their health care.
Our current health insurance system is biased toward employer-based
coverage--kind of due to a historical accident. The wage controls of
World War II increased competition among employers for recruiting the
best employees and incentivized employers to offer health benefits
instead of what they couldn't do, which was increase wages. In 1954,
Congress codified a provision declaring that such a contribution would
not count as taxable income. This tax policy made it very favorable for
individuals to get their health benefits through their employers and
consequently has penalized individuals who get coverage through the
individual market. So if you work for a big company--a tax break. If
you don't--penalized.
The Joint Committee on Taxation estimated that moving this tax bias
and a few related health care tax policies will save the Government
$3.6 trillion over the next 10 years. Even around here, that is a lot
of money. That is a lot of money which can and should be used to expand
choices and access and give individuals more control over their health
care. Ten Steps ensures that every American can benefit from this
savings--whether they get their health care from their employer, from
the individual insurance market or they decide they want to get off
Medicaid and switch to private insurance.
Let me be clear. My goal is not to erode employer-based health
insurance, given that the Ten Steps does not alter the way employers
treat health insurance. Rather, I wish to provide more options for
individuals who don't currently have insurance through their employer.
Everyone should be treated equally.
Once the employee exclusion for health care insurance is eliminated,
we must provide additional tax incentives for the purchase of health
care insurance. Ten Steps is a hybrid approach, combining the standard
deduction for health insurance with a tax subsidy for those who need it
the most. That way, no particular population is adversely affected.
The second step of Ten Steps would increase affordable options for
working families to purchase health insurance through a standard tax
deduction. The national above-the-line standard deduction for health
insurance will equal $15,000 for a family and $7,500 for an individual.
I wish to also note the earned-income tax credit for taxpayers with
qualifying children is held harmless--that is very important--so those
receiving the earned-income tax credit will not be affected by these
changes. Actually, they will be affected in a positive way.
For example, say Bob from Gillette, WY, has total compensation of
$38,000, made up of $34,000 in wages and $4,000 in health insurance
premiums paid by his employer. Because of the current unfair tax
treatment of premiums, Bob's current taxable income is reduced to
$34,000, which means he paid about $5,000 in taxes. To an accountant,
this is all fascinating; for other people, I am not so sure.
Under the Ten Steps, which eliminates the exclusion of premiums from
tax, Bob's total compensation and thus taxable income would be $38,000.
By providing Bob with a $7,500 standard deduction for health insurance,
his taxable income under this bill would be lowered to $30,500, which
means he would pay about $4,000 in taxes. So Bob's total savings under
this proposal is $1,000 a year.
The third step of Ten Steps is what makes this a hybrid approach. I
couple the standard deduction with a refundable, advanceable,
assignable tax-based subsidy. That is a mouthful, but it ensures that
Americans receive this credit in a meaningful way that allows them to
purchase real insurance coverage.
Given that everybody is not familiar with these terms, I will explain
them. As a refundable credit, it benefits folks even if they don't have
tax liability. They don't have to owe taxes in order to get it. This
helps low-income individuals. Advanceable means the subsidy would be
paid at the beginning of the year so individuals can use the funds to
immediately purchase health insurance. If it wasn't advanceable,
individuals would need to first pay for their health insurance and then
get the money back at the end of the year to pay them back for that
purchase. To encourage everyone to obtain health insurance right away,
we should provide those funds upfront. Further, to ensure that the
subsidy goes toward the purchase of health care insurance, it is also
assignable--paid directly from the IRS to the insurance carrier that
the individual chooses.
Ten Steps includes the tax subsidy equal to $5,000 for a family or
$2,500 for an individual. The full subsidy amount is available to
individuals at or below 100 percent of the Federal poverty level, which
is $20,650 right now for a family of four. The subsidy is phased out
between up to 300 percent of Federal poverty level, with individuals at
200 percent receiving half the subsidy and individuals at 301 percent
receiving the standard deduction instead of the subsidy. I am sure
everybody got that.
The fourth key step for health care reform is to provide market-based
pooling to reduce growing health care costs and increase access not
only for small businesses, unions and other kinds of organizations and
their workers, members, and families. That is a change from anything I
have done on pooling before, but it is a change that was requested by
the other organizations and unions, as well as small business. Those of
you who know me well recognize how central this would be to any health
care reform proposal of mine.
While I have not yet introduced the small business health plan
legislation from last year, I have not abandoned those key principles.
Every day, emergency rooms treat more than 30,000 uninsured Americans
who work for or depend on small businesses. That is at least 30,000
reasons why I will not abandon the concept. However, in the proposal I
am introducing, I have addressed some of the criticisms of the bill,
and I have offered what I believe are appropriate solutions.
For instance, while the earlier bill focused heavily on small
businesses--and this one still does--it simply became clear that other
organizations, including unions and churches, can benefit from better
pooling options too. Therefore, under this bill, the umbrella of the
pooling option has been expanded to include more kinds of organizations
but with the same strong focus on consumer protections and State-based
oversight.
Of course, a big elephant in the room was dealing with those who were
misled to fear how the initial proposal dealt with insurance mandates.
I hope those who were so vocal before will pause this time around. By
incorporating what many have described as the Snowe amendment--which I
am sure we would have passed at the time we were talking about that
before--the legislation would require benefit mandate categories if a
majority of the States required them. While I still have some concerns,
I am comfortable with this compromise because the mandate requirement
is coupled with something it needs to encourage pooling and that is a
common definition of what that mandate means. We do it with the Federal
insurance plan because definitions in all the States run a little bit
different. If you are trying to do something comprehensively, it is
pretty hard to figure out what each definition means, so there needs to
be a way of streamlining it and coming up with a common definition for
that mandate. I don't think people have a problem with that, especially
since we do it with the Federal plan.
As I learned with the previous debate, mandates for many different
services and items are not consistent from State to State. Thus, if we
are to discuss requiring those, we should at least have a consistent
definition of what those mandates require. We should not further
complicate the pooling option with a multitude of definitions. We want
to make insurance as simple as possible. I know that is kind of an
oxymoron, I am sure, because I know nobody in America relishes having
their insurance agent come over and spend an evening explaining the
bill to them. But we want to have this little bit of streamlining so it
is simpler and people will be able to understand it, to the degree that
is possible with insurance.
While the next step is probably one of the most obvious ones, it is
also one many have not yet discussed. Currently, HIPAA portability
protections
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are provided to group health plans. The protections provide assurances
to consumers that insurers will deal with preexisting conditions fairly
and provide coverage, even to small groups.
These protections have been a great help for individuals purchasing
health care coverage in the group market. However, those consumer
protections are not provided nearly as well to individuals who are
purchasing in the individual market. Ten Steps blends the individual
and group market to extend important HIPAA portability protections to
the individual market so the insurance security can better move with
you from job to job. It allows people to take that new opportunity and
still be sure they will be covered, even if they have had some
preexisting conditions.
The sixth step emphasizes preventive benefits and helps individuals
with chronic diseases better manage their health. America should have
health care, not sick care. Prevention, prevention, prevention. That
makes a big difference in the cost.
We have all been discussing the need to do more to prevent disease,
not just treat its symptoms. Even though I leave much to the markets to
define some health insurance components, the one thing we must
emphasize is the need for prevention. Any plan purchased with the tax
subsidy must include basic preventive services and a medical self-
management component.
This concept is modeled after a very successful program in Wyoming.
In 2005, Wyoming EqualityCare, our Medicaid Program, began providing
one-on-one case management for Medicaid participants with chronic
illnesses, such as diabetes, asthma, depression or heart disease, to
encourage better self-management of these conditions. The program
provides educational information on self-management, as well as a nurse
health coach who follows up with each patient to ensure they have what
they need to take care of themselves.
In addition, EqualityCare provides a nursing hotline so all patients
have a direct line to a health care provider when they are concerned
about an illness. These programs targeting those with chronic illnesses
were estimated to save nearly $13 million for the EqualityCare program
in 2006. In a lot of States, that would not sound like a lot, but
Wyoming is the least-populated of all of the States. We are hoping to
get 500,000 people in the next census. When you talk about $13 million
being saved in this EqualityCare Program dealing with Medicaid
participants, it is a lot of money, proportionately, particularly
because it cut down on inappropriate use of emergency room services.
Now, another key step of the Ten Steps for health care reform is to
give individuals the choice to convert the value of their Medicaid and
SCHIP program benefits into private health insurance, putting them in
control of their health care, not the Federal Government. The rationale
for this step is simple. If the market can provide better coverage at a
lower price, why not allow Americans to access that care?
This gives low-income individuals more options about where they can
receive their care and what care is available to them. Some providers
don't see Medicaid and SCHIP patients. This provision will change that
by letting the market forces work and give all patients more choices.
It is time for people to start making decisions about their care. Let's
get the Government out of the doctors office.
About 6,000 kids are enrolled in the Wyoming SCHIP program. An
additional 6,000 kids are eligible for the program but are not
enrolled. I wonder why that is. Maybe it is because folks in Wyoming
are wary about accepting Government help, and they think there is a
negative stigma associated with SCHIP and Medicaid. Well, under Ten
Steps, they can use that money to purchase health care insurance
through the private sector so that their family can attain the high
quality care they need and deserve. This will cover more people.
The eighth step in Ten Steps is a bipartisan proposal which the HELP
Committee approved last month--the ``Wired for Health Care Quality
Act,'' which encouraged the adoption of cutting-edge information
technologies in health care to improve patient care, reduce medical
errors, and cut health care costs. Some of the most serious challenges
facing health care today--medical errors, inconsistent quality, and
rising costs--can be addressed through the effective application of
available health information technology linking all elements of the
health care system.
The widespread use of health IT can save lives. If somebody is
traveling and gets in a car wreck or gets hurt in some other way, the
emergency room doctor would be able to find out everything he or she
needs to know to make the right treatment decisions, without the person
having to fill out one of those little papers at the doctors office,
which they may not be capable of doing if they have been in a requiem
or have some other problem.
Better use of health IT would also allow medical data to move with
people when they go to other locations. When someone goes to the
doctor's office, they won't have to take the clipboard and a pencil and
write down everything they can remember about their history. It will
already be recorded and go with them. It will make a huge difference.
Beyond saving lives and saving time, more effective use of health
information technology would save us a lot of money. A RAND study
suggested that health IT has the potential to save--listen to this--
$162 billion a year. Even around here that is real money. In order for
these savings to be realized, we have to create an infrastructure for
interoperability.
All the different health providers and insurers and doctors have to
be able to get the information electronically, but doctors, hospitals,
health care advocates, the business community, including small
businesses, are clamoring for Congress to take action and establish
uniform health IT standards. That will cut down on the cost of the
software.
Time is of the essence. If Congress does not act, our health care
system will move forward in a highly inefficient, fragmented, and
disjointed way. Among other things, this bill will eliminate
duplicative tests and reduce medical errors. That is a lot of where
that $162 billion a year in savings comes from.
Health care reform cannot simply expand health insurance coverage. It
must also expand access to actual providers of care. There are growing
shortages of health care providers nationally, with a shortage of up to
200,000 primary care physicians and 1 million nurses expected by 2020.
Who is going to take care of us at the hospital if we don't have
nurses? Who is going to help make a diagnosis if we don't have doctors?
That is why the ninth step of Ten Steps helps future providers and
nurses pay for their education while encouraging them to serve in areas
with great need with five key reforms.
This legislation provides competitive matching grants for States to
encourage nurses to return to the profession after having left the
workforce for 3 years or more while reaffirming the commitment to
current programs targeting nurse educators and nurse education. So this
will encourage people to come back into providing that excellent
service. To deal with the shortage right now, this legislation will
expand the number of nonimmigrant skilled workers visa slots for nurses
serving in medically underserved areas.
To expand access to those most vulnerable, Ten Steps reaffirms the
commitment to current programs that are working, such as the Community
Health Centers program and the loan repayment programs at the National
Health Service Corps. Working together, these two programs provide key
support in underserved areas.
To allow for greater access to health care services, clarification
will be made that convenient care clinics may accept and receive
reimbursement from Medicaid and SCHIP patients. These convenient care
clinics are small health care facilities located in retail outlets
providing affordable and accessible nonemergency health care from
nurses, physician assistants, and physicians. Often open 7 days a week,
these clinics provide an option for those seeking routine and
preventive care services in a more convenient setting--at the retail
outlets--and with patients seen typically within 15 minutes.
Finally, building upon the successes of current rural health
programs, Ten Steps will ensure appropriate development of rural health
systems and access to care for residents in rural areas.
[[Page S9149]]
In providing access to health care, I believe it is important to
envision where we want to provide that care. Community and home-based
care is often much preferred, less costly, and proven to increase
quality of life. To encourage innovative approaches to keeping long-
term care in residential settings, competitive grants will be available
to give seniors more options for receiving care in home or community-
based settings. We just had a hearing on that subject in the HELP
Committee. It was both very helpful and very convincing.
The final step to Ten Steps decreases the skyrocketing cost of health
care by restoring reliability in our medical justice system through
State-based solutions. The bill I have been discussing today includes
the Fair and Reliable Medical Justice Act, which I just introduced with
Senator Baucus, for States to encourage early disclosure of preventable
health care errors, prompt and fair compensation for injured patients,
and careful analysis on patterns of health care errors to prevent
future injuries. By funding demonstration projects, States are enabled
to experiment with and learn from ideas leading to long-term solutions
tailored to the unique circumstances of each State.
No one--not patients or health care providers--is appropriately
served by our current medical litigation procedures. Right now, many
patients who are hurt by negligent actions receive no compensation for
their loss. Those who do receive merely 40 cents of every premium
dollar, given the high cost of legal fees and administrative costs.
That is simply a waste of medical resources.
Furthermore, the likelihood and the outcomes of lawsuits and
settlements bear little relation to whether the health care provider
was at fault. Consequently, we are not learning from our mistakes.
Rather, we are simply diverting our doctors. When someone has a medical
emergency, they want to see a doctor in an operating room, not a
courtroom.
The medical liability system is losing information that could be used
to improve the practice of medicine. Although zero medical errors is an
unattainable goal, the reduction of medical errors should be the
ultimate goal in medical reform. The Institute of Medicine, in its
landmark study called ``To Err is Human,'' estimated that preventable
medical errors kill somewhere between 44,000 and 98,000 Americans each
year. That study further emphasized that to improve our health care
outcomes, we should no longer focus on individual situations but on the
whole system of care that is failing American patients.
In the 8 years since that study, little progress has been made.
Instead, the practice of medicine has become more specialized and
complex while the tort system is more focused on individual blame than
on a system safety.
I realize I have talked for quite a bit about Ten Steps, and given
the current crisis, we should be talking a lot more about real
solutions, not just problems. I also want everyone to know I believe
the introduction of this bill today is simply the first step forward. I
look forward to talking with others about their thoughts on how to
improve this proposal, how to better refine it so it can better serve
all Americans.
With all of that talk, I also want action, real action, to provide
real coverage for Americans, not a large expansion of a government
program with a huge pricetag that does little to impact those who are
uninsured.
We have an opportunity, we have an obligation to take care of the
people of this country, and they are demanding it. Let's work from a
basis of some information and see where we can take it so that we get a
solution and we get action now.
______
By Mr. KERRY (for himself, Ms. Snowe, Ms. Cantwell, and Ms. Landrieu):
S. 1784. A bill to amend the Small Business Act to improve programs
for veterans, and for other purposes; to the Committee on Small
Business and Entrepreneurship.
Mr. KERRY. Mr. President, I am pleased to introduce today the
Military Reservist and Veteran Small Business Reauthorization and
Opportunity Act. As the Chairman of the Senate Committee on Small
Business and Entrepreneurship, I am gratified that I was able to work
with Ranking Member Senator Snowe on behalf of the 25 million veterans
currently in America, including over 1 million who have left military
service since September 11, 2001. As the conflicts in Iraq and
Afghanistan continue, the number of veterans, including service
disabled veterans, will increase and reservists will continue to carry
more of the burden then ever before. As veterans and reservists reenter
civilian life, the small business programs provided by the Federal
Government will become even more critical. I am serious about
addressing the problems affecting veterans and reservists who wish or
are already engaged in small business and this bill is another step
forward in doing so.
The Military Reservist and Veteran Small Business Reauthorization and
Opportunity Act of 2007 reauthorizes the veteran programs in the Small
Business Administration. Specifically, this legislation increases the
funding authorization for the Office of Veteran Business Development
from $2 million today to $2.5 million over three years. In light of the
large numbers of veterans returning from Iraq and Afghanistan and
increased responsibilities placed on this office by Executive Order
13360, it is high time that the Office of Veteran Business Development
receive the funding levels that it needs.
The bill also creates an Interagency Task Force to improve
coordination between agencies in administrating veteran small business
programs. One of the biggest complaints that our Committee heard at the
``Assessing Federal Small Business Assistance Programs for Veterans and
Reservists'' hearing held on January 31st was that Federal agencies do
not work together in reaching out to veterans and informing them about
small business programs. This task force is an attempt to improve that.
The task force is composed of representatives from Small Business
Administration, Department of Defense, Department of Veterans Affairs,
Department of Labor, General Services Administration, Office of
Management Budget and four veterans service organizations appointed by
the President. The task force will focus on increasing veterans' small
business success, including procurement and franchising opportunities,
access to capital, and other types of business development assistance.
This bill also permanently extends the SBA Advisory Committee on
Veterans Business Affairs. The committee was created to serve as an
independent source of advice and policy recommendations to the SBA, the
Congress, and the President. The veteran small business owners who
serve on this committee provide a unique perspective which is sorely
needed at this challenging time. Unfortunately, continuing uncertainty
about the Committee's future has, at times, distracted the committee
from focusing on its core function. Therefore, I have called for its
permanent extension. It is clear to me that more needs to be done to
address the issues facing veterans and reservists, and the role this
committee plays will continue to be important.
Additionally, I have taken a number of steps to better serve the
reservists who are serving their country abroad while their businesses
are suffering at home. Over the past decade, the Department of Defense
has increased its reliance on the National Guard and reserves. This has
intensified since September 11, 2001, and increased deployments are
expected to continue. The affect of this increase on reservists and
small businesses continues to remain of concern. A 2003 GAO report
indicated that 41 percent of reservists lost income when mobilized.
This had a higher effect on self-employed reservists, 55 percent of
whom lost income.
In 1999, I created the Military Reservist Economic Injury Disaster
Loan, MREIDL, program to provide loans to small businesses that incur
economic injury as a result of an essential employee being called to
active duty. However, since 2002, fewer than 300 of these loans have
been approved by the SBA, despite record numbers of reservists being
called to active duty. It is clear that changes need to be made, so
that reservists are informed about the availability of the MREIDL
program and that the program better meets their needs.
At the hearing on January 31, we heard suggestions for a number of
[[Page S9150]]
changes which would improve the Military Reservist Economic Injury
Disaster Loan program, and I have included those changes in this bill.
They include increasing the application deadline for such a loan from
90 days to 1 year following the date of discharge; creating a
predeployment loan approval process; and improved outreach and
technical assistance.
This bill also increases to $50,000 the amount SBA can disburse
without requiring collateral under the MREIDL program. Reservist
families have already sacrificed enough when a family member goes away
to serve their country and when their business is harmed as a result.
This loan program would allow reservist dependent businesses to access
the capital they need to stay afloat without having to sacrifice beyond
the service of the key employees. In order to give reservists time to
repay the loans, the non-collaterized loan created in this bill would
not accumulate interest or require payments for one year or until after
the deployment ends, whichever is longer.
While addressing the funding needs of reservists is essential, I also
want to make sure that reservists receive the technical and management
assistance they need to succeed. For that reason, this bill also
includes the establishment of the Reservists Enterprise Transition and
Sustainability Task Force. This grant program would allow Small
Business Development Centers, Women's Business Centers and veteran
centers to compete for grants to create programs that help small
businesses prepare for and cope with the mobilization of reservist-
employees and owners.
There are two more provisions which will help this Nation's service
members. One section of the bill will require the SBA to give priority
to MREIDL loans during loan processing. Another provision will give
activated service members an extension of any SBA time limitations
equal to the time spent on active duty. This will make it easier for
service members to serve their country while continuing to meet their
obligations at home.
Lastly, this bill calls for two reports. One report will look at the
needs of service-disabled veterans who are interested in becoming
entrepreneurs. As a result of the war on terror and improved medicine,
we are seeing more service-disabled veterans than we have seen in
decades. For some service-disabled veterans, entrepreneurship is the
best or only way of achieving economic independence. Therefore, it is
essential that we understand and take steps to address the needs of the
service-disabled veteran entrepreneur or small business owner.
This bill also calls for a study to investigate how to improve
relations between reservists and their employers. In January, the
Committee heard that recent changes by the Department of Defense to
policies regulating the length and frequency of reservist deployments
is harming the ability of reservists to find jobs and the ability of
small business owners to continue hiring them. Witnesses testified
about reservists being turned down or not considered for jobs because
they are reservists. I have heard reservists talk about being pressured
to leave the reserves if they would like to continue to advance at
work. I have also heard the concerns of small business owners who want
to support servicemembers; however, they cannot do so if it means the
survival of their business. Understanding more about this issue is
important and essential to making sure that policymakers can continue
to support citizen soldiers and the small businesses that employ them
across the Nation.
Veterans possess great technical skills and valuable leadership
experience, but they require financial resources and small business
training to turn that potential into a viable enterprise. A recent
report by the Small Business Administration stated that 22 percent of
veterans plan to start or are starting a business when they leave the
military. For service-disabled veterans, this number rises to 28
percent. This bill is another step forward in providing the necessary
resources for veterans and reservists to succeed in starting or growing
a small business.
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. 1784
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 ``Military Reservist and
Veteran Small Business Reauthorization and Opportunity Act of
2007''.
SEC. 2. DEFINITIONS.
In this Act--
(1) the term ``activated'' means receiving an order placing
a Reservist on active duty;
(2) the term ``active duty'' has the meaning given that
term in section 101 of title 10, United States Code;
(3) the terms ``Administration'' and ``Administrator'' mean
the Small Business Administration and the Administrator
thereof, respectively;
(4) the term ``Reservist'' means a member of a reserve
component of the Armed Forces, as described in section 10101
of title 10, United States Code;
(5) the term ``Service Corps of Retired Executives'' means
the Service Corps of Retired Executives authorized by section
8(b)(1) of the Small Business Act (15 U.S.C. 637(b)(1));
(6) the terms ``service-disabled veteran'' and ``small
business concern'' have the meanings given those terms in
section 3 of the Small Business Act (15 U.S.C. 632);
(7) the term ``small business development center'' means a
small business development center described in section 21 of
the Small Business Act (15 U.S.C. 648); and
(8) the term ``women's business center'' means a women's
business center described in section 29 of the Small Business
Act (15 U.S.C. 656).
TITLE I--VETERANS BUSINESS DEVELOPMENT
SEC. 101. INCREASED FUNDING FOR THE OFFICE OF VETERANS
BUSINESS DEVELOPMENT.
(a) In General.--There are authorized to be appropriated to
the Office of Veterans Business Development of the
Administration, to remain available until expended--
(1) $2,100,000 for fiscal year 2008;
(2) $2,300,000 for fiscal year 2009; and
(3) $2,500,000 for fiscal year 2010.
(b) Sense of Congress.--It is the sense of Congress that
any amounts provided pursuant to this section that are in
excess of amounts provided to the Administration for the
Office of Veterans Business Development in fiscal year 2007,
should be used to support Veterans Business Outreach Centers.
SEC. 102. INTERAGENCY TASK FORCE.
Section 32 of the Small Business Act (15 U.S.C. 657b) is
amended by adding at the end the following:
``(d) Interagency Task Force.--
``(1) Establishment.--Not later than 90 days after the date
of enactment of this subsection, the President shall
establish an interagency task force to coordinate the efforts
of Federal agencies necessary to increase capital and
business development opportunities for, and increase the
award of Federal contracting and subcontracting opportunities
to, small business concerns owned and controlled by service-
disabled veterans and small business concerns owned and
controlled by veterans (in this section referred to as the
`task force').
``(2) Membership.--The members of the task force shall
include--
``(A) the Administrator, who shall serve as chairperson of
the task force;
``(B) a representative from--
``(i) the Department of Veterans Affairs;
``(ii) the Department of Defense;
``(iii) the Administration (in addition to the
Administrator);
``(iv) the Department of Labor;
``(v) the General Services Administration; and
``(vi) the Office of Management and Budget; and
``(C) 4 representatives of veterans service organizations,
selected by the President.
``(3) Duties.--The task force shall coordinate
administrative and regulatory activities and develop
proposals relating to--
``(A) increasing capital access and capacity of small
business concerns owned and controlled by service-disabled
veterans and small business concerns owned and controlled by
veterans through loans, surety bonding, and franchising;
``(B) increasing access to Federal contracting and
subcontracting for small business concerns owned and
controlled by service-disabled veterans and small business
concerns owned and controlled by veterans through increased
use of contract reservations, expanded mentor-protege
assistance, and matching such small business concerns with
contracting opportunities;
``(C) increasing the integrity of certifications of status
as a small business concern owned and controlled by service-
disabled veterans or a small business concern owned and
controlled by veterans;
``(D) reducing paperwork and administrative burdens on
veterans in accessing business development and
entrepreneurship opportunities; and
``(E) making other improvements relating to the support for
veterans business development by the Federal Government.
``(4) Reporting.--The task force shall submit an annual
report regarding its activities and proposals to--
[[Page S9151]]
``(A) the Committee on Small Business and Entrepreneurship
and the Committee on Veterans' Affairs of the Senate; and
``(B) the Committee on Small Business and the Committee on
Veterans' Affairs of the House of Representatives.''.
SEC. 103. PERMANENT EXTENSION OF SBA ADVISORY COMMITTEE ON
VETERANS BUSINESS AFFAIRS.
(a) Assumption of Duties.--Section 33 of the Small Business
Act (15 U.S.C. 657c) is amended--
(1) by striking subsection (h); and
(2) by redesignating subsections (i) through (k) as
subsections (h) through (j), respectively.
(b) Permanent Extension of Authority.--Section 203 of the
Veterans Entrepreneurship and Small Business Development Act
of 1999 (15 U.S.C. 657b note) is amended by striking
subsection (h).
TITLE II--NATIONAL RESERVIST ENTERPRISE TRANSITION AND SUSTAINABILITY
SEC. 201. SHORT TITLE.
This title may be cited as the ``National Reservist
Enterprise Transition and Sustainability Act of 2007''.
SEC. 202. PURPOSE.
The purpose of this title is to establish a program to--
(1) provide managerial, financial, planning, development,
technical, and regulatory assistance to small business
concerns owned and operated by Reservists;
(2) provide managerial, financial, planning, development,
technical, and regulatory assistance to the temporary heads
of small business concerns owned and operated by Reservists;
(3) create a partnership between the Small Business
Administration, the Department of Defense, and the Department
of Veterans Affairs to assist small business concerns owned
and operated by Reservists;
(4) utilize the service delivery network of small business
development centers, women's business centers, Veterans
Business Outreach Centers, and centers operated by the
National Veterans Business Development Corporation to expand
the access of small business concerns owned and operated by
Reservists to programs providing business management,
development, financial, procurement, technical, regulatory,
and marketing assistance;
(5) utilize the service delivery network of small business
development centers, women's business centers, Veterans
Business Outreach Centers, and centers operated by the
National Veterans Business Development Corporation to quickly
respond to an activation of Reservists that own and operate
small business concerns; and
(6) utilize the service delivery network of small business
development centers, women's business centers, Veterans
Business Outreach Centers, and centers operated by the
National Veterans Business Development Corporation to assist
Reservists that own and operate small business concerns in
preparing for future military activations.
SEC. 203. NATIONAL GUARD AND RESERVE BUSINESS ASSISTANCE.
(a) In General.--Section 21(a)(1) of the Small Business Act
(15 U.S.C. 648(a)(1)) is amended by inserting ``any small
business development center, women's business center,
Veterans Business Outreach Center, or center operated by the
National Veterans Business Development Corporation providing
enterprise transition and sustainability assistance to
Reservists under section 37,'' after ``any women's business
center operating pursuant to section 29,''.
(b) Program.--The Small Business Act (15 U.S.C. 631 et
seq.) is amended--
(1) by redesignating section 37 (15 U.S.C. 631 note) as
section 38; and
(2) by inserting after section 36 the following:
``SEC. 37. RESERVIST ENTERPRISE TRANSITION AND
SUSTAINABILITY.
``(a) In General.--The Administrator shall establish a
program to provide business planning assistance to small
business concerns owned and operated by Reservists.
``(b) Definitions.--In this section--
``(1) the terms `activated' and `activation' mean having
received an order placing a Reservists on active duty, as
defined by section 101(1) of title 10, United States Code;
``(2) the term `Administrator' means the Administrator of
the Small Business Administration, acting through the
Associate Administrator for Small Business Development
Centers;
``(3) the term `Association' means the association
established under section 21(a)(3)(A);
``(4) the term `eligible applicant' means--
``(A) a small business development center that is
accredited under section 21(k);
``(B) a women's business center;
``(C) a Veterans Business Outreach Center that receives
funds from the Office of Veterans Business Development; or
``(D) an information and assistance center operated by the
National Veterans Business Development Corporation under
section 33;
``(5) the term `enterprise transition and sustainability
assistance' means assistance provided by an eligible
applicant to a small business concern owned and operated by a
Reservist, who has been activated or is likely to be
activated in the next 12 months, to develop and implement a
business strategy for the period while the owner is on active
duty and 6 months after the date of the return of the owner;
``(6) the term `Reservist' means any person who is--
``(A) a member of a reserve component of the Armed Forces,
as defined by section 10101 of title 10, United States Code;
and
``(B) on active status, as defined by section 101(d)(4) of
title 10, United States Code;
``(7) the term `small business development center' means a
small business development center as described in section 21
of the Small Business Act (15 U.S.C. 648);
``(8) the term `State' means each of the several States of
the United States, the District of Columbia, the Commonwealth
of Puerto Rico, the Virgin Islands, American Samoa, and Guam;
and
``(9) the term `women's business center' means a women's
business center described in section 29 of the Small Business
Act (15 U.S.C. 656).
``(c) Authority.--The Administrator may award grants, in
accordance with the regulations developed under subsection
(d), to eligible applicants to assist small business concerns
owned and operated by Reservists by--
``(1) providing management, development, financing,
procurement, technical, regulatory, and marketing assistance;
``(2) providing access to information and resources,
including Federal and State business assistance programs;
``(3) distributing contact information provided by the
Department of Defense regarding activated Reservists to
corresponding State directors;
``(4) offering free, one-on-one, in-depth counseling
regarding management, development, financing, procurement,
regulations, and marketing;
``(5) assisting in developing a long-term plan for possible
future activation; and
``(6) providing enterprise transition and sustainability
assistance.
``(d) Rulemaking.--
``(1) In general.--The Administrator, in consultation with
the Association and after notice and an opportunity for
comment, shall promulgate regulations to carry out this
section.
``(2) Deadline.--The Administrator shall promulgate final
regulations not later than 180 days of the date of enactment
of the Military Reservist and Veteran Small Business
Reauthorization and Opportunity Act of 2007.
``(3) Contents.--The regulations developed by the
Administrator under this subsection shall establish--
``(A) procedures for identifying, in consultation with the
Secretary of Defense, States that have had a recent
activation of Reservists;
``(B) priorities for the types of assistance to be provided
under the program authorized by this section;
``(C) standards relating to educational, technical, and
support services to be provided by a grantee;
``(D) standards relating to any national service delivery
and support function to be provided by a grantee;
``(E) standards relating to any work plan that the
Administrator may require a grantee to develop; and
``(F) standards relating to the educational, technical, and
professional competency of any expert or other assistance
provider to whom a small business concern may be referred for
assistance by a grantee.
``(e) Application.--
``(1) In general.--Each eligible applicant desiring a grant
under this section shall submit an application to the
Administrator at such time, in such manner, and accompanied
by such information as the Administrator may reasonably
require.
``(2) Contents.--Each application submitted under paragraph
(1) shall describe--
``(A) the activities for which the applicant seeks
assistance under this section; and
``(B) how the applicant plans to allocate funds within its
network.
``(3) Matching not required.--Subparagraphs (A) and (B) of
section 21(a)(4), requiring matching funds, shall not apply
to grants awarded under this section.
``(f) Award of Grants.--
``(1) Deadline.--The Administrator shall award grants not
later than 60 days after the promulgation of final rules and
regulations under subsection (d).
``(2) Amount.--Each eligible applicant awarded a grant
under this section shall receive a grant in an amount--
``(A) not less than $75,000 per fiscal year; and
``(B) not greater than $300,000 per fiscal year.
``(g) Report.--
``(1) In general.--The Comptroller General of the United
States shall--
``(A) initiate an evaluation of the program not later than
30 months after the disbursement of the first grant under
this section; and
``(B) submit a report not later than 6 months after the
initiation of the evaluation under paragraph (1) to--
``(i) the Administrator;
``(ii) the Committee on Small Business and Entrepreneurship
of the Senate; and
``(iii) the Committee on Small Business of the House of
Representatives.
``(2) Contents.--The report under paragraph (1) shall--
``(A) address the results of the evaluation conducted under
paragraph (1); and
``(B) recommend changes to law, if any, that it believes
would be necessary or advisable to achieve the goals of this
section.
``(h) Authorization of Appropriations.--
``(1) In general.--There are authorized to be appropriated
to carry out this section--
``(A) $5,000,000 for the first fiscal year beginning after
the date of enactment of the
[[Page S9152]]
Military Reservist and Veteran Small Business Reauthorization
and Opportunity Act of 2007; and
``(B) $5,000,000 for each of the 3 fiscal years following
the fiscal year described in subparagraph (A).
``(2) Limitation on use of other funds.--The Administrator
may carry out the program authorized by this section only
with amounts appropriated in advance specifically to carry
out this section.''.
TITLE III--RESERVIST PROGRAMS
SEC. 301. RESERVIST PROGRAMS.
(a) Application Period.--Section 7(b)(3)(C) of the Small
Business Act (15 U.S.C. 636(b)(3)(C)) is amended by striking
``90 days'' and inserting ``1 year''.
(b) Pre-Consideration Process.--
(1) Definition.--In this subsection, the term ``eligible
Reservist'' means a Reservist who--
(A) has not been ordered to active duty;
(B) expects to be ordered to active duty during a period of
military conflict; and
(C) can reasonably demonstrate that the small business
concern for which that Reservist is a key employee will
suffer economic injury in the absence of that Reservist.
(2) Establishment.--Not later than 6 months after the date
of enactment of this Act, the Administrator shall establish a
pre-consideration process, under which the Administrator--
(A) may collect all relevant materials necessary for
processing a loan to a small business concern under section
7(b)(3) of the Small Business Act (15 U.S.C. 636(b)(3))
before an eligible Reservist employed by that small business
concern is activated; and
(B) shall distribute funds for any loan approved under
subparagraph (A) if that eligible Reservist is activated.
(c) Outreach and Technical Assistance Program.--
(1) In general.--Not later than 6 months after the date of
enactment of this Act, the Administrator, in consultation
with the Secretary of Veterans Affairs and the Secretary of
Defense, shall develop a comprehensive outreach and technical
assistance program (in this subsection referred to as the
``program'') to--
(A) market the loans available under section 7(b)(3) of the
Small Business Act (15 U.S.C. 636(b)(3)) to Reservists, and
family members of Reservists, that are on active duty and
that are not on active duty; and
(B) provide technical assistance to a small business
concern applying for a loan under that section.
(2) Components.--The program shall--
(A) incorporate appropriate websites maintained by the
Administration, the Department of Veterans Affairs, and the
Department of Defense; and
(B) require that information on the program is made
available to small business concerns directly through--
(i) the district offices and resource partners of the
Administration, including small business development centers,
women's business centers, and the Service Corps of Retired
Executives; and
(ii) other Federal agencies, including the Department of
Veterans Affairs and the Department of Defense.
(3) Report.--
(A) In general.--Not later than 6 months after the date of
enactment of this Act, and every 6 months thereafter until
the date that is 30 months after such date of enactment, the
Administrator shall submit to Congress a report on the status
of the program.
(B) Contents.--Each report submitted under subparagraph (A)
shall include--
(i) for the 6-month period ending on the date of that
report--
(I) the number of loans approved under section 7(b)(3) of
the Small Business Act (15 U.S.C. 636(b)(3));
(II) the number of loans disbursed under that section; and
(III) the total amount disbursed under that section; and
(ii) recommendations, if any, to make the program more
effective in serving small business concerns that employ
Reservists.
SEC. 302. RESERVIST LOANS.
(a) In General.--Section 7(b)(3)(E) of the Small Business
Act (15 U.S.C. 636(b)(3)(E)) is amended by striking
``$1,500,000'' each place such term appears and inserting
``$2,000,000''.
(b) Loan Information.--
(1) In general.--The Administrator and the Secretary of
Defense shall develop a joint website and printed materials
providing information regarding any program for small
business concerns that is available to veterans or
Reservists.
(2) Marketing.--The Administrator is authorized--
(A) to advertise and promote the program under section
7(b)(3) of the Small Business Act jointly with the Secretary
of Defense and veterans' service organizations; and
(B) to advertise and promote participation by lenders in
such program jointly with trade associations for banks or
other lending institutions.
SEC. 303. NONCOLLATERALIZED LOANS.
Section 7(b)(3) of the Small Business Act (15 U.S.C.
636(b)(3)) is amended by adding at the end the following:
``(G)(i) Notwithstanding any other provision of law, the
Administrator may make a loan under this paragraph of not
more than $50,000 without collateral.
``(ii) The Administrator may defer payment of principal and
interest on a loan described in clause (i) during the longer
of--
``(I) the 1-year period beginning on the date of the
initial disbursement of the loan; and
``(II) the period during which the relevant essential
employee is on active duty.''.
SEC. 304. LOAN PRIORITY.
Section 7(b)(3) of the Small Business Act (15 U.S.C.
636(b)(3)), as amended by this Act, is amended by adding at
the end the following:
``(H) The Administrator shall give priority to any
application for a loan under this paragraph and shall process
and make a determination regarding such applications prior to
processing or making a determination on other loan
applications under this subsection, on a rolling basis.''.
SEC. 305. RELIEF FROM TIME LIMITATIONS FOR VETERAN-OWNED
SMALL BUSINESSES.
Section 3(q) of the Small Business Act (15 U.S.C. 632(q))
is amended by adding at the end the following:
``(5) Relief from time limitations.--
``(A) In general.--Any time limitation on any
qualification, certification, or period of participation
imposed under this Act on any program available to small
business concerns shall be extended for a small business
concern that--
``(i) is owned and controlled by--
``(I) a veteran who was called or ordered to active duty
under a provision of law specified in section 101(a)(13)(B)
of title 10, United States Code, on or after September 11,
2001; or
``(II) a service-disabled veteran who became such a veteran
due to an injury or illness incurred or aggravated in the
active military, naval, or air service during a period of
active duty pursuant to a call or order to active duty under
a provision of law referred to in subclause (I) on or after
September 11, 2001; and
``(ii) was subject to the time limitation during such
period of active duty.
``(B) Duration.--Upon submission of proper documentation to
the Administrator, the extension of a time limitation under
subparagraph (A) shall be equal to the period of time that
such veteran who owned or controlled such a concern was on
active duty as described in that subparagraph.''.
SEC. 306. SERVICE-DISABLED VETERANS.
Not later than 180 days after the date of enactment of this
Act, the Comptroller General of the United States shall
submit to the Committee on Small Business and
Entrepreneurship of the Senate and the Committee on Small
Business of the House of Representatives a report
describing--
(1) the types of assistance needed by service-disabled
veterans who wish to become entrepreneurs; and
(2) any resources that would assist such service-disabled
veterans.
SEC. 307. STUDY ON OPTIONS FOR PROMOTING POSITIVE WORKING
RELATIONS BETWEEN EMPLOYERS AND THEIR RESERVE
COMPONENT EMPLOYEES.
(a) Study Required.--The Secretary of Defense shall conduct
a study on options for promoting positive working relations
between employers and Reserve component employees of such
employers, including assessing options for improving the time
in which employers of Reservists are notified of the call or
order of such members to active duty other than for training.
(b) Report.--
(1) In general.--Not later than 180 days after the date of
enactment of this Act, the Secretary of Defense shall submit
to the appropriate committees of Congress a report on the
study conducted under subsection (a).
(2) Contents.--The report submitted under paragraph (1)
shall--
(A) provide a quantitative and qualitative assessment of--
(i) what measures, if any, are being taken to inform
Reservists of the obligations and responsibilities of such
members to their employers;
(ii) how effective such measures have been; and
(iii) whether there are additional measures that could be
taken to promote positive working relations between
Reservists and their employers, including any steps that
could be taken to ensure that employers are timely notified
of a call to active duty; and
(B) assess whether there has been a reduction in the hiring
of Reservists by business concerns because of--
(i) any increase in the use of Reservists after September
11, 2001; or
(ii) any change in any policy of the Department of Defense
relating to Reservists after September 11, 2001.
(c) Appropriate Committees of Congress Defined.--In this
section, the term ``appropriate committees of Congress''
means--
(1) the Committee on Armed Services and the Committee on
Small Business and Entrepreneurship of the Senate; and
(2) the Committee on Armed Services and the Committee on
Small Business of the House of Representatives.
Ms. SNOWE. Mr. President, as ranking member of the Senate Committee
on Small Business and Entrepreneurship, I rise today, with Senator
Kerry, to introduce the Military Reservist and Veteran Small Business
Reauthorization and Opportunity Act of 2007. This bill improves the
programs and resources available to our Nation's veteran entrepreneurs
and the small businesses that employ our veterans.
Thank you, Senator Kerry, for working so closely with me on this
bipartisan legislation and for your long
[[Page S9153]]
standing commitment to our Nation's veterans. This bipartisan measure
contains key provisions from both S. 904, the Veterans Small Business
Opportunity Act of 2007, which I introduced in March, and Senator
Kerry's S. 1005, Military Reservist and Veteran Small Business
Reauthorization Act of 2007. It is truly critical that all of our
fellow Senators, on both sides of the aisle, continue to collaborate on
our veterans' behalf and support swift passage of this legislation.
In October 2003, I requested a Congressional Budget Office Report
entitled ``The Effects of Reserve Call-Ups on Civilian Employers.''
That report, issued in May 2005, highlighted the problems that our
nation's small businesses face when their owners or key employees are
``called up'' to serve in defense of our Nation. In response to that
report's findings, I offered two bills to improve the resources and
programs targeted to these veterans and small businesses. Those bills,
S. 1014, the Supporting our Patriotic Businesses Act, and S. 3122, the
Patriot Loan Act of 2006, were the genesis of S. 904 that I introduced
earlier this year. Similarly, Senator Kerry has an established history
of working on these issues, and the Small Business Committee on January
31 held its first hearing of the 110th Congress regarding programs to
assist veterans and reservists.
In recent years, our Nation's Guard and Reserve forces, which I
collectively refer to as reservists, have selflessly answered the call
to duty in both Iraq and Afghanistan. In fact, there have been over
425,000 reservist deployments, including nearly 3,000 from my home
State of Maine, to those two countries since September 11, 2001. With
the majority of nongovernmental reservists either being self-employed
or working for small businesses, it is easy to see that veteran
entrepreneurs and small businesses are profoundly and
disproportionately impacted by these deployments.
As our reservists answer our Nation's call to duty, we must similarly
fulfill our obligations to help protect their livelihood back home. In
addition to addressing this responsibility, our legislation includes
other broad provisions to help our Nation's veteran entrepreneurs
across the board.
First, our bill makes vast improvements to the Small Business
Administration's, SBA, Military Reservist Economic Disaster Loan,
MREIDL, program. The MREIDL program provides funds to businesses to
meet ordinary and necessary business expenses that they could have
made, if not for the deployment of a reservist who is one of their
essential employees.
Specifically, the bill establishes a preapplication process so
businesses can be prepared, in advance, to apply for an MREIDL and
includes a provision allowing a businesses up to 1 year, as opposed to
90 days, to apply. The legislation increases, from $1.5 million to $2
million, the maximum MREIDL loan a business can take and raises, from
$5,000 to $50,000, the level of uncollateralized MREIDL loans available
to businesses. Finally, our changes to the MREIDL program would allow
the SBA Administrator to defer the payment of principal and interest
while the employee is deployed.
Second, the measure also includes a national reservist enterprise
transition and sustainability provision. This provision would allow the
SBA to award grants to entities that assist businesses with preparing
and implementing a business strategy to cover the period of time that
the owner is called-up on active duty through 6 months after that
owner's date of return.
Third, our bill would create a new Interagency Task Force to
coordinate the efforts of Federal agencies necessary to increase
capital and business development opportunities for, and increase the
award of Federal contracting opportunities to, small businesses owned
and controlled by veterans. This type of coordinated and targeted
effort by our Federal Government is long overdue.
Finally, today's legislation would increase funding for the SBA's
Office of Veterans Business Development, and permanently extend the
duties and responsibilities of the SBA Advisory Committee on Veterans
Business Affairs. It would also allow small businesses owned and
operated by veterans to extend their SBA program participation time
limitations by the duration of their owner's deployment.
While I have not provided an exhaustive list of this bill's
provisions and all that it would do, a simple review of the legislation
will reveal that it goes far toward helping our nation's veteran
entrepreneurs and our patriotic small businesses that employ
reservists, despite the risk that deployments entail. Our legislation
is not a silver bullet, but it is certainly a step in the right
direction. To that end, I urge my colleagues to join us in support of
this bill.
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