[Congressional Record Volume 154, Number 186 (Thursday, December 11, 2008)]
[Senate]
[Pages S10947-S10951]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      Mr. CASEY:
  S. 3732. A bill to assist in creating substantive culture change in 
long-term residential care by establishing a small house nursing home 
loan program to provide for the establishment, renovation, and 
construction of small house nursing homes; to the Committee on Banking, 
Housing, and Urban Affairs.
  Mr. CASEY. Mr. President, I rise today to introduce the Promoting 
Small House Nursing Homes Act. This is a bill I expect will play a 
significant role in the way we care for our older citizens in this 
country. I also hope and expect this bill to make an important 
contribution to the framing and substance of the landmark health care 
reform we anticipate in the coming year. Moreover, because our current 
economic problems are interwoven with out-of-control health care costs, 
this bill will contribute to a revitalization of our economy and the 
creation of new jobs. Finally, it will establish solid criteria for 
long term residential care that will not only improve the quality of 
life of older citizens, but save money through cost-effective, 
comprehensive and coordinated long term and health care.
  This bill provides a dramatically different approach to long term 
residential care for older citizens than is offered by the traditional 
nursing home model.
  The Promoting Small House Nursing Home Act incorporates the 
principles of person-centered care as a cornerstone of all aspects of 
long term residential care. What do we mean by person-centered care? 
The philosophy is simple: Our older citizens deserve to live lives of 
dignity and respect through all stages of life. About 10 years ago, the 
Philadelphia Inquirer reported, ``Life can have quality and meaning 
even until the very last breath.'' Our older citizens have a profound 
right to be decision-makers in their own care--to be at the center of 
their own care, with a partnership of family and providers. Our older 
citizens are critically important to the overall health and well-being 
of our society. I quote a well known expert in person-centered care, 
Dr. Bill Thomas, who says, ``People of all ages will live better lives 
when we succeed in bringing elders back to the heart of our society.''
  My bill translates this profound philosophy into a specific policy 
prescription by doing the following: creating a low-interest loan fund 
for building new or renovating existing long term care facilities that 
follow articulated small house nursing home model guidelines; 
etablishing clear and specific program requirements and guidelines that 
build upon existing programs that have successfully implemented 
substantial culture change and person-centered care; creating a home-
like and non-institutional model of care for long term care residential 
facilities that is based upon the principles of: collaborative 
decision-making; respect; and significantly improved quality of life 
for residents and staff alike.

  We currently have an estimated 38 million Americans over the age of 
65, and that number is expected to double within the next 20 years. In 
the midst of this, health care costs are rising exponentially, the 
quality of outcomes is not consistent, and older citizens are often 
abandoned to navigate a confusing and complex health care system. Older 
citizens also report extremely low levels of satisfaction with life in 
nursing homes. This $122 billion industry includes 16,000 nursing homes 
and significant concerns persist about maltreatment and neglect of our 
older citizens in 20 percent of these homes. As I know from my work in 
State government, most nursing homes provide quality care but that 20 
percent is what we hear most about. However, a recent survey by the 
AARP found that fewer than 1 percent of individuals over 50 with a 
disability want to move to a nursing home. There has to be a better 
way, and in fact there is.
  Person-centered care provides that better way. It is a 
straightforward concept and yet it has taken years of hard work to get 
concrete initiatives underway. We have a long way to go and much to 
learn. But in order to succeed, we must pass legislation like the bill 
I have introduced today.
  Traditional nursing facilities require residents' lives to revolve 
around institutional schedules for waking, bathing and dressing. 
Traditional facilities far too often identify residents by their health 
conditions, vulnerabilities and room numbers rather than their unique 
strengths and gifts. Staff members are attracted to the field of direct 
care service because they want to help older citizens but they are just 
as ill-served by this institutionalized culture as are the residents. 
Workers are minimally trained, over-worked and carry patient loads that 
make it impossible to engage in any personal time with residents--in 
fact, such relationships are often discouraged. They have little or no 
say in decision-making, relegated--like the residents--to the fringes 
of a system that places the needs of the institution over those of the 
human beings in it.

[[Page S10948]]

  In July of this year, I chaired a hearing for the Aging Committee 
that examined this small house nursing home model. One of our witnesses 
was a nursing assistant who previously worked for a traditional nursing 
home and now works in a small house nursing home in Pennsylvania. She 
recounted the difference, saying, ``Looking back on it, now, I realize 
that while we offered our residents excellent nursing care, that did 
not always translate into a high quality of life.'' She described 
handling a wider range of duties now, yet having more time to spend 
with individual residents and really getting to know--and even love--
them because the staffing is consistent and the turnover is almost non-
existent. Another witness at our July hearing was the daughter of a 
woman who moved from a traditional nursing home to a small house 
nursing home. She summed up the dramatic change in her mother with this 
simple phrase, ``Suddenly, life mattered again.''
  It should be a given that ``life matters'' to every person. While 
every citizen has this fundamental right, our older citizens who have 
worked hard their whole lives truly deserve to enjoy their later years 
in homes that offer them comfort, respect and autonomy. I strongly 
believe the Promoting Small House Nursing Homes Act will make this 
possible and I urge my Senate colleagues to join me in supporting this 
effort in its own right as well as the significant role it can play in 
the larger issues of comprehensive health care reform and revitalizing 
our economy. I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                S. 3732

       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 ``Promoting Small House 
     Nursing Homes Act''.

     SEC. 2. SMALL HOUSE NURSING HOME LOAN PROGRAM.

       (a) Establishment.--The Secretary of Health and Human 
     Services (in this section referred to as the ``Secretary'') 
     shall establish a small house nursing home loan program (in 
     this section referred to as the ``program'') under which the 
     Secretary makes grants to eligible lenders in order for such 
     eligible lenders to make direct loans to eligible borrowers 
     for the establishment, renovation, and construction of small 
     house nursing homes that meet the requirements of this 
     section.
       (b) Eligibility.--
       (1) Program grant eligibility.--To be eligible to obtain a 
     grant under the program, an eligible lender shall--
       (A) be a nonprofit, non-Federal lender;
       (B) have a track record of lending to small house nursing 
     homes, low income populations, or nursing homes that serve 
     low income populations; and
       (C) submit to the Secretary an application in such form as 
     the Secretary may reasonably require.
       (2) Small house advisory panel.--
       (A) In general.--Not later than 90 days after the date of 
     enactment of this Act, the Secretary shall establish an 
     advisory panel (in this section referred to as the ``Small 
     House Advisory Panel'') to--
       (i) evaluate applications for direct loans under the 
     program in conjunction with eligible lenders; and
       (ii) carry out other responsibilities determined 
     appropriate by the Secretary.
       (B) Membership.--The Small House Advisory Panel shall 
     consist of not less than 5 and not more than 7 individuals 
     who have expertise in the areas of person-centered long term 
     care culture change, long term care financing, consumers, and 
     direct care workers.
       (3) Evaluation of eligible borrower applicants.--
       (A) Establishment of evaluation tool and criteria.--
       (i) In general.--The Secretary, in collaboration with the 
     Small House Advisory Panel, shall establish an evaluation 
     tool and evaluation criteria with which to prioritize 
     eligible borrowers who submit to an eligible lender an 
     application for a direct loan under the program.
       (ii) Evaluation tool.--The evaluation tool established 
     under subparagraph (A) shall be based upon the model 
     guideline priorities under subsection (c)(5).
       (iii) Prioritization of eligible borrowers.--Eligible 
     borrowers shall be prioritized under the program in 
     accordance with the extent to which they meet such model 
     guideline priorities.
       (B) Evaluation of applications and recommendations.--
       (i) In general.--Applications for a direct loan under the 
     program shall be evaluated by the Secretary, in collaboration 
     with the Small House Advisory Panel.
       (ii) Recommendations.--The Secretary shall establish 
     procedural guidelines under which any recommendations of the 
     Secretary for making direct loans shall be provided to 
     eligible lenders.
       (4) Loan eligibility.--To be eligible for a direct loan 
     from an eligible lender under the program, an eligible 
     borrower shall be a private or public nonprofit entity or a 
     for-profit entity that--
       (A) agrees to use the proceeds from such direct loan to 
     construct or renovate a small house nursing home that--
       (i) is designed to establish substantive culture change; 
     and
       (ii) meets the model small house nursing home requirements 
     and guidelines under subsection (c);
       (B) submits a detailed plan describing--
       (i) the particular model or approach to person-centered 
     care that the small house nursing home will implement; and
       (ii) how the small house nursing home will meet such model 
     small house nursing home requirements and guidelines;
       (C) has been approved by a State or local entity (in 
     accordance with applicable State and local law) to operate a 
     skilled nursing facility (as defined in section 1819(a) of 
     the Social Security Act (42 U.S.C. 1395i-3(a)) or a nursing 
     facility (as defined in section 1919(a) of such Act (42 
     U.S.C. 1396r(a)));
       (D) with respect to the facility, ensures that at least 30 
     percent of the residents of the facility are Medicaid-funded 
     individuals under title XIX of the Social Security Act (42 
     U.S.C. 1396 et seq.), as determined in accordance with 
     guidelines to be issued by the Secretary that take into 
     consideration the number of days such residents spend in the 
     facility, and does not discharge residents based on their 
     ability to pay;
       (E) complies with lending standards developed, in 
     consultation with the Secretary, by a task force of experts 
     in long-term care financing, affordable housing with services 
     development, and nontraditional lending; and
       (F) agrees to share financial and operating data with 
     researchers and Federal agencies designated by the Secretary.
       (5) Loan disqualification.--In no case may an entity which 
     has displayed a pattern of failing to comply with State and 
     Federal quality of care standards (as determined by the 
     Secretary) or an entity with a pattern of violating State and 
     Federal labor laws (as determined by the Secretary) be an 
     eligible borrower under the program.
       (c) Model Small House Nursing Home Requirements and 
     Guidelines.--
       (1) In general.--
       (A) Development.--Not later than 90 days after the date of 
     enactment of this Act, the Secretary shall develop model 
     small house nursing home guidelines that meet the 
     requirements of this subsection.
       (B) Consistency with requirements applicable under the 
     social security act.--The guidelines established under 
     subparagraph (A) shall be consistent with, and in addition 
     to, any requirements applicable to an eligible borrower under 
     sections 1819 and 1919 of the Social Security Act (42 U.S.C. 
     1395i-3; 1396r).
       (2) Practice research and implementation.--
       (A) In general.--Under the guidelines under paragraph (1), 
     a small house nursing home that obtains proceeds from a 
     direct loan made under this section shall be based on methods 
     and practices that have been tested through pilot programs 
     and other research carried out at not less than 1 
     implementation site in the United States for at least a 2-
     year period.
       (B) Improvements in quality of life.--Pilot programs and 
     research referred to in subparagraph (A) shall be designed to 
     establish a clearly articulated, evidence-based approach to 
     creating improvements in the quality of life and care 
     outcomes of residents of small house nursing homes as well as 
     providing for improvements in the professional satisfaction 
     and career development of the staff of small house nursing 
     homes.
       (C) Research requirement.--Research referred to in 
     subparagraph (A) shall be conducted by a researcher--
       (i) who has expertise in long-term care; and
       (ii) who has no financial or professional interests in the 
     success of the methods or practices involved.
       (3) Requirements of small house nursing homes.--Under the 
     guidelines developed under paragraph (1), a small house 
     nursing home that obtains proceeds from a direct loan made 
     under this section shall--
       (A) establish a self-directed model of care for residents 
     that incorporates collaborative decisionmaking by residents 
     and nursing assistants;
       (B) provide for a universal worker approach to resident 
     care (including care available from a nursing assistant, 
     personal care, socialization services, meal preparation 
     services, and laundry housekeeping services) that is 
     organized to support and empower all staff to respond to the 
     needs and desires of residents;
       (C) provide for consistent staff assignments;
       (D) consist of a physical environment designed as a home, 
     rather than an institution--
       (i) that contains residential style design elements and 
     materials throughout the home that are similar to the 
     residential style design elements and materials in the 
     immediate surrounding community, including residential style 
     design elements in areas that have mixed-zoning purposes, and 
     do not use commercial and institutional elements and products 
     (such as a nurses' station, medication carts, hospital or 
     office type florescent

[[Page S10949]]

     lighting, acoustical tile ceilings, institutional style 
     railings and corner guards, and room numbering and labeling) 
     unless mandated by authorities with appropriate jurisdiction 
     over the small house nursing home;
       (ii) which is designed to be a fully independent and 
     disabled accessible house, apartment, or independent wing of 
     an existing structure with not more than 25 residents in the 
     house, apartment, or independent wing;
       (iii) that contains a full private bathroom for each 
     bedroom that, at a minimum, provides a toilet, sink, and 
     accessible shower;
       (iv) which has a life-safety rating that is sufficient to 
     appropriately accommodate individuals who cannot self-
     evacuate; and
       (v) in which the percentage of residents of the small house 
     nursing home who are short stay rehabilitation residents does 
     not exceed 20 percent at any time unless the small house 
     nursing home is entirely devoted to providing rehabilitation 
     services, except that a long-term resident returning to a 
     small house nursing home after an acute episode and who is 
     receiving rehabilitation services for which payment is made 
     under the Medicare program under title XVIII of the Social 
     Security Act shall not be counted toward such 20 percent 
     limitation;
       (E) provide for meals cooked in the small house nursing 
     home and not prepared in a central kitchen and transported to 
     the small house nursing home; and
       (F) provide for the training of staff in accordance with 
     paragraph (4).
       (4) Training of staff.--
       (A) In general.--Under the guidelines under paragraph (1), 
     a small house nursing home that obtains proceeds from a 
     direct loan made under this section shall provide training 
     for all staff involved in the operations of the small house 
     nursing home concerning the philosophy, operations, and 
     skills required to implement and maintain self-directed care, 
     self-managed work teams, a noninstitutional approach to life 
     and care in long-term care, appropriate safety and emergency 
     skills, and other elements required for the successful 
     operation of and outcomes in the small house nursing home.
       (B) Collaboration.--
       (i) In general.--Training under subparagraph (A) shall be 
     interdisciplinary and collaborative.
       (ii) Collective bargaining.--

       (I) In general.--In the case where staff involved in the 
     operations of the small house nursing home are represented by 
     a collective bargaining organization, the organization shall 
     be provided an opportunity to fully participate in the 
     development of a program for providing such training.
       (II) Prioritization.--In the case where there is an 
     existing jointly funded employer-labor training partnership, 
     or where a training program is funded through collective 
     bargaining, the small house nursing home shall prioritize the 
     utilization of or collaboration with those existing training 
     programs in meeting the requirements of this paragraph.

       (C) Amount.--Training under subparagraph (A) shall be not 
     less than 120 hours for each universal worker employed by the 
     small house nursing home and not less than 60 hours for each 
     leadership and clinical team member employed by such small 
     house nursing home. Such training shall be in addition to any 
     other State training requirements and shall be completed for 
     the majority of the staff prior to the initial start-up of 
     the small house nursing home.
       (5) Model guideline priorities for loan applicants.--An 
     eligible borrower applying for a direct loan under this 
     section shall be given priority in evaluation of loan 
     applications in proportion to their compliance with 1 or more 
     of the following model guidelines:
       (A) Residential model priorities.--Priority in evaluation 
     for loan eligibility shall be given to small house nursing 
     home models that--
       (i) have private, single occupancy bedrooms that are shared 
     only at the request of a resident to accommodate a spouse, 
     partner, family member, or friend;
       (ii) contain a living area where residents and staff may 
     socialize, dine, and prepare food together that, at a 
     minimum, provides a living room seating area, a dining area 
     large enough for a single table serving all residents and not 
     less than 2 staff members, and an open full kitchen;
       (iii) contain ample natural light in each habitable space 
     that is provided through exterior windows and other means, 
     with window areas, exclusive of skylights and clearstories, 
     being a minimum of 10 percent of the area of the room; and
       (iv) have built-in safety features to allow all areas of 
     the house to be accessible to the residents during the 
     majority of the day and night.
       (B) Direct care worker model priorities.--Priority in 
     evaluation for loan eligibility shall be given to small house 
     nursing home model operators that have a legally binding 
     collective bargaining agreement and a signed labor-management 
     partnership agreement covering the planning and 
     implementation of small house nursing homes. Where employees 
     are represented by a labor organization, a signed labor 
     management implementation agreement will be required.
       (d) Loan Provisions.--
       (1) In general.--Except as otherwise provided in this 
     subsection, each direct loan made under this section shall be 
     subject to such terms, conditions, and covenants relating to 
     repayment of principal, payment of interest, and other 
     matters as may be established by the eligible lender.
       (2) Maximum loan amount.--The Secretary, in consultation 
     with the Small House Advisory Panel, shall determine the 
     maximum amount of any direct loan made under this section.
       (3) Rate of interest.--A direct loan made under this 
     section shall bear interest at an annual rate of not more 
     than 3 percent, or as determined by the Secretary.
       (e) Authorization of Appropriations.--There is authorized 
     to be appropriated to carry out this section, $50,000,000 for 
     each of fiscal years 2009 through 2013. Amounts appropriated 
     under this subsection shall be available until expended.
       (f) Termination.--The program shall terminate, and no loan 
     may be made under this section, on or after the date that is 
     25 years after the date on which amounts are initially 
     appropriated under subsection (e).

     SEC. 3. REPORT.

       Not later than 5 years after the date of enactment of this 
     Act, the Secretary of Health and Human Services shall submit 
     to the appropriate committees of Congress a report on the 
     small house nursing home loan program established under 
     section 2(a). Such report shall include information on--
       (1) the use of direct loans made under the program to 
     establish, renovate, and construct small house nursing homes 
     that meet the requirements of section 2;
       (2) the quality of health care, quality of life, emotional 
     well-being, ability to perform functions of daily living, and 
     other outcomes found for residents of small house nursing 
     homes, as compared to such outcomes found for residents of 
     traditional nursing homes; and
       (3) staff wages, retention, and absenteeism rates, measures 
     of staff satisfaction, and workload and staffing levels for 
     small house nursing homes, as compared to traditional nursing 
     homes.
                                 ______
                                 
      By Mr. SPECTER:
  S. 3733. A bill to require the Federal Energy Regulatory Commission 
to hold at least 1 public hearing before issuance of a permit affecting 
public or private land use in a locality; to the Committee on Energy 
and Natural Resources.
  Mr. SPECTER. Mr. President, I seek recognition to speak on 
legislation I am introducing that will require the Federal Energy 
Regulatory Commission to hold at least one public hearing before 
issuance of a permit affecting public or private land use in a 
locality.
  Increasing demand for electricity throughout the Northeast is putting 
a strain on energy infrastructure in my state, necessitating new 
transmission lines and natural gas pipelines and the expansion of 
existing ones. In Southwestern and Northeast Pennsylvania transmission 
line expansions are planned over hundreds of miles of private property, 
while in the Southeast natural gas pipeline expansions are underway.
  There is no doubt these projects can be invasive, and rarely do they 
fail to be controversial. I make a point of touching all of 
Pennsylvania's 67 counties each year. In traveling Pennsylvania this 
fall I heard a lot of complaints from constituents who oppose these 
infrastructure projects, and who felt their concerns were being ignored 
by the energy companies and by FERC.
  I realize there will always be some opposition to large 
infrastructure projects. What is unacceptable, however, is for the 
voices of Pennsylvanians to be ignored. It may be the case that these 
projects are necessary to meet increased energy demand. Nonetheless, 
the Federal Energy Regulatory Commission must seriously consider and 
evaluate local concerns in a sensitive manner.
  To ensure citizens throughout the commonwealth have a voice in the 
development of energy infrastructure, my legislation will mandate that 
FERC hold an open hearing in the affected communities. State Public 
Utility Commissions, who have a great say in these matters, are beyond 
Congress' reach. But where the Federal Energy Regulatory Commission is 
involved we can take steps to ensure that our constituents' concerns 
receive due consideration. Holding a hearing may not lead to all sides 
agreeing on the proper route forward, but at the very least my 
Pennsylvania constituents will come away with the satisfaction of 
having publicly aired their grievances.
                                 ______
                                 
      By Ms. LANDRIEU:
  S. 3735. A bill to amend the Internal Revenue Code of 1986 to provide 
for the eligibility of computer technology and equipment development 
businesses for enterprise zone incentives; to the Committee on Finance.
  Ms. LANDRIEU. Mr. President, I come to the floor today to speak on 
behalf of a program which I believe has been extremely helpful in 
helping

[[Page S10950]]

rural/urban communities in my state of Louisiana. I would also like to 
discuss a commonsense improvement to the program which I believe will 
allow these and other communities nationwide to be at the cutting edge 
of 21st century innovation and research. In particular, to help spur 
economic development in distressed communities, the Congress enacted 
the Empowerment Zone and Enterprise Community, EZ and EC, Program in 
1993. In 2000, the Community Renewal Tax Relief Act further expanded 
this initiative by authorizing 40 Renewal Communities, RCs, and 9 more 
EZs. Overall, the RC/EZ/EC Initiative provides these designated 
communities with tax incentives, grants, loans, and technical 
assistance to encourage investment in communities that have experienced 
severe economic decline. According to the U.S. Department of Housing 
and Urban Development, HUD, which oversees the RC and EZ program, RC 
tax incentives are worth approximately $5.6 billion to eligible 
businesses of all sizes in Renewal Communities. EZ tax incentives are 
worth approximately $5.3 billion to small and large businesses in 
Empowerment Zones. In general, the tax incentives encourage businesses 
to open, expand, and to hire local residents. The administrative 
leaders of each Renewal Community and Empowerment Zone work closely 
with the Federal Government, business, and local community 
representatives to implement strategic plans to improve social/economic 
conditions throughout the designated areas.
  As I mentioned, this program is of particular interest to Louisiana 
as we have two Urban Renewal Communities, in New Orleans and Ouachita 
Parish, and also have two Rural Renewal Communities, in central 
Louisiana and in northern Louisiana. These designations have been 
extremely helpful in attracting businesses to these areas of my state 
and in encouraging existing businesses to expand their operations. 
However, the designations are set to terminate in December 31, 2009. I 
remain committed to work with my Senate colleagues next year to update 
and reauthorize such programs as this program. That is because this 
program helps distressed communities nationwide and is a key engine to 
spur public-private partnerships in rural/urban areas.
  While we often think of technology companies locating in areas such 
as Silicon Valley, California or the Research Triangle in North 
Carolina, Congress should not forget the role that rural small 
businesses and universities play in fostering innovation and 
development. In Louisiana, we have multiple universities participating 
in these cutting edge research programs and collaborating with local 
small businesses. Louisiana Technical University in Ruston, Louisiana, 
for example has grown into a leader in scientific research at a crucial 
time for the region. This is because the Barksdale Air Force base 
located in Shreveport, which is 70 miles from Ruston, is looking to 
secure the permanent Cyber Command. This command would protect the 
United States from cyber warfare. All of the universities, colleges, 
and parishes in this area, including the University of Louisiana--
Monroe, Grambling State University, and Louisiana State University--
Shreveport are collaborating on securing this command, which could mean 
thousands of jobs for the region. So big cities are not the only areas 
in the country that have growing technology sectors--rural communities 
also have these industries and would benefit from this commonsense 
correction to the program. Many of these rural communities are located 
in RC areas so it is important to support this program.

  In the next Congress, as I mentioned, we will work to reauthorize the 
RC/EZ program. As we do this, I believe that, among other corrections, 
we must address one glaring problem with these programs. That is the 
reason why I am filing this legislation today as it makes an important 
correction to this program. I am pleased that my colleague, Congressman 
Rodney Alexander is introducing the companion bill in the House of 
Representatives. All three programs share the definition for a 
``qualified business'' used for an EZ Business, which is Section 1397C 
of the Internal Revenue Code. For the EC and RC programs, this was 
legislated by Congress by the use of a substitution of ``Renewal 
Community'' or ``Enterprise Community'' for ``Empowerment Zone'' in the 
relevant section of the Internal Revenue Code, which is Section 
1394(b)(2)(A) for the EC program and Section 1400G for the RC program. 
Under this definition, generally any trade or business can be a 
qualified business; however, there is an exception for a business that 
consists primarily to develop or hold intangibles for sale or license. 
This clear distinction between businesses that trade ``tangibles'' 
versus those that trade in ``intangibles'' seems to be made as the 
intent was to encourage quality, high-wage manufacturing jobs in these 
areas. Businesses that trade in ``intangibles'' include companies that 
develop such things as patents, formulas, processes, copyrights, 
literary/musical works. However, businesses which manufacture computer 
software and computer or peripheral equipment are also included in this 
group of category of businesses which trade in ``intangible'' products. 
I feel that this excludes an industry that provides high-wage, highly 
skilled jobs in communities which could most benefit from these types 
of employers. This apparent oversight from Congress seems to discourage 
software/technology companies from locating in these distressed 
communities and does not reflect the fact that many of our rural/urban 
have excellent infrastructure to support them. Lastly, as an original 
cosponsor of the America COMPETES Act of 2007, I know how essential it 
is to promote U.S. technology competitiveness and innovation. By 
allowing software/technology companies to locate or expand operations 
in RC/EZ/EC communities, this would promote U.S. competitiveness and 
fully realize the intent of the program--to spur economic development 
in these distressed areas.
  To address this issue, the bill I am introducing today would clarify 
that companies which manufacture technology/software development are 
eligible for these RC/EZ incentives in taxable years after enactment of 
the bill, provided they meet other requirements for the RC/EZ program. 
In particular, Section 1397C(d)(4) of the Internal Revenue Code of 1986 
is amended to specify that businesses that trade in ``intangibles'' are 
excluded, with the exception of computer and software development 
companies. I would highlight that we are not creating a new definition 
from scratch or making new rules for the Internal Revenue Code, instead 
the bill uses the definition for computer and software companies that 
already exists elsewhere in the Internal Revenue Code. This definition, 
Section 170(e)(6)(F)(i) of the Internal Revenue Code, includes the 
following industries: computer software (as defined in section 
197(e)(3)(B)), computer or peripheral equipment (as defined by section 
168(i)(2)(B)), and fiber optic cable related to computer use.
  Furthermore, my staff has reviewed the Congressional Record and 
committee testimony since 1985 and could not find a clear Congressional 
intent to exclude software  or technology development companies from 
the definition of a ``qualified business'' for this program. On the 
other hand, Congress specifically prohibited the following businesses: 
private or commercial golf courses, country clubs, massage parlors, hot 
tub facilities, suntan facilities, racetracks or other facilities used 
for gambling, and liquor stores. Despite this specificity in relation 
to what industries may/may not qualify, the law is silent on software/
technology development companies. As I mentioned, this industry is 
simply caught up in an effort to not include companies that deal 
strictly in intellectual property, such as copyrights or patents. I 
believe that this warrants correction as we should not exclude 
industries that are key drivers of economic development and those which 
are also essential to U.S. competitiveness.

  Let me give you another example of how the current setup of this 
program is really discouraging further job creation and economic 
development. As currently structured, the renewal community employment 
credit provides a 15 percent credit for the first $10,000 of wages per 
year paid to each renewal community employee. So a bar in a RC/EZ 
community would receive a tax credit for hiring another bartender but a 
software development company would currently not receive any incentive 
to hire another engineer. Not only

[[Page S10951]]

does this discourage technology companies from locating in these areas 
but it is a disincentive for students graduating from universities or 
colleges in RC/EZ areas. I do not have a specific problem with 
including bars or restaurants in this program as the hospitality sector 
is also important to Louisiana's economy. However, I believe that 
computer/software companies should be given the opportunity to take 
advantage of these benefits that are already available to other 
industries, provided they meet the other requirements for qualified 
businesses.
  In closing, I would like to note that while I understand that this 
would allow businesses currently not eligible for the program to 
receive benefits moving forward, it is my sincere belief that this 
correction would follow congressional intent with the program. This is 
because, in my view, the bill would further improve the ability of the 
RC/EZ program to spur economic development in distressed areas. It 
would accomplish this goal by ensuring that high-wage, high technology 
industries are eligible to participate in the program. I urge my 
colleagues to support this commonsense legislation.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                S. 3735

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

     SECTION 1. ELIGIBILITY OF COMPUTER TECHNOLOGY AND EQUIPMENT 
                   DEVELOPMENT BUSINESSES FOR ENTERPRISE ZONE 
                   INCENTIVES.

       (a) In General.--Section 1397C(d)(4) of the Internal 
     Revenue Code of 1986 (relating to treatment of business 
     holding intangibles) is amended by inserting ``other than the 
     development of any computer technology or equipment (as 
     defined in section 170(e)(6)((F)(i))'' after ``license''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after the date of the 
     enactment of this Act.

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