[Congressional Record Volume 156, Number 124 (Wednesday, September 15, 2010)]
[Senate]
[Pages S7135-S7137]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS
By Mr. KERRY (for himself, Mr. Brown of Ohio, Mrs. Murray, Mr.
Franken, Mr. Akaka, Mr. Schumer, Mr. Leahy, Mrs. Gillibrand,
and Mr. Menendez):
S. 3786. A bill to amend the Internal Revenue Code of 1986 to permit
the Secretary of the Treasury to issue prospective guidance clarifying
the employment status of individuals for purposes of employment taxes
and to prevent retroactive assessments with respect to such
clarifications; to the Committee on Finance.
Mr. KERRY. Mr. President, today I am introducing the Fair Playing
Field Act of 2010 to provide a fairer playing field to America's
businesses and workers. It will ensure workers are afforded protections
already in the law, such as workers' compensation, Social Security,
Medicare, payment of overtime, unemployment compensation, and the
minimum wage. It will also ensure help
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employers who play by the rules are not forced to compete against those
businesses that don't. This legislation is identical to legislation
being introduced in the House of Representatives by Representative
McDermott. Senators Murray, Gillibrand, Sherrod Brown, Franken, Akaka,
Schumer, and Leahy are cosponsors.
Under current law, employers are required to take certain actions on
behalf of their employees including withholding income taxes, paying
Social Security and Medicare taxes, paying for unemployment insurance,
and providing a safe and nondiscriminatory workplace. Employers are not
required to undertake these obligations for independent contractors.
Too often, workers are misclassified by businesses looking to avoid
paying taxes. These businesses receive an unfair advantage over
businesses that play by the rules.
The Internal Revenue Service, IRS, currently uses a common law test
to determine whether a worker is an employee or independent contractor.
Unfortunately, a loophole exists which allows a business to escape
liability for misclassifying employees as independent contractors.
Furthermore, there is statutory prohibition on the IRS providing
guidance through regulation on employee classification.
Federal and State revenue is lost when businesses misclassify their
workers as independent contractors. A study estimated that, between
1996 and 2004, $34.7 billion of Federal tax revenues went uncollected
due to the misclassification of workers and the tax loopholes that
allow it. Recently, GAO and Treasury Inspector General reports have
cited misclassification as posing significant concerns for workers,
their employers, and government revenue.
Section 530 of the Revenue Act of 1978 generally allows taxpayers to
treat a worker as not being an employee for employment tax purposes,
regardless of the worker's actual status under the common law test,
unless the taxpayer has no reasonable basis for such treatment or fails
to meet certain requirements. Section 530 is commonly referred to as a
``safe harbor.'' This provision was initially enacted in 1978 for a
year to give Congress time to resolve these complex issues. In 1982,
the safe harbor was made permanent. In addition, section 530 prevents
the IRS from requiring an employer afforded a safe harbor to reclassify
a worker prospectively.
The Fair Playing Field Act of 2010 ends the moratorium on IRS
guidance addressing the worker classification issue. The legislation
requires the Secretary of Treasury to issue prospective guidance
clarifying the employment status of individuals for Federal employment
tax purposes. The effective date for the provision of authority to
issue guidance is the date of enactment.
Under the Fair Playing Field Act of 2010, the section 530 safe harbor
will continue to be available to employers with respect to the
treatment of an individual for Federal employment tax purposes until
the individual has a reclassification date. An individual's
``reclassification date'' is the earlier of the following two dates:
the first day of the first calendar quarter beginning more than 180
days after the date of an ``employee classification determination''
with respect to such individual; or the effective date of the ``first
application final regulation'' issued by the Secretary of the Treasury
with respect to such individual. An ``employee classification
determination'' with respect to an individual is a determination by the
Secretary of the Treasury, in connection with an audit of the taxpayer
that begins after the date that is one year after the date of
enactment, that a class of individuals holding positions with the
taxpayer that are substantially similar to the position held by the
individual are employees.
I urge my colleagues to cosponsor the Fair Playing Field Act of 2010
which will provide valuable protections to workers who are erroneously
misclassified and help combat the underground economy.
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By Mr. WYDEN (for himself and Mr. Crapo):
S. 3788. A bill to amend the Internal Revenue Code of 1986 to
temporarily increase the investment tax credit for geothermal energy
property; to the Committee on Finance.
Mr. WYDEN. Mr. President, I am pleased to join with my colleague from
Idaho, Senator Mike Crapo, in introducing the Geothermal Energy
Investment Act of 2010. This legislation will amend an already existing
investment tax credit for geothermal energy authorized under Sec. 48 of
the tax code. The bill would provide geothermal energy with the same 30
percent investment tax credit that is now available to solar energy and
fuel cell technologies in Sec. 48 and extend this 30 percent tax credit
for geothermal through December 31, 2016, as it is for these other
technologies. Without this legislation, new geothermal energy projects
would be allowed only a 10 percent investment tax credit under Section
48. This legislation will create a more level playing field among
clean, renewable energy technologies and support substantial growth in
utility scale geothermal power, distributed on-site power generation,
and heating for buildings and commercial processes.
Geothermal energy facilities provide a continuous supply of renewable
energy with very few environmental impacts. Although the United States
has more geothermal capacity than any other country, this potential has
been barely tapped. This shortfall is partly due to the high initial
cost and risk involved in locating and developing geothermal resources.
Extending the 30 percent tax credit through 2016 will help give
geothermal developers the assurance they need to make the long lead-
time investments in exploration and development necessary to make
expansion of geothermal energy a reality.
This legislation is identical to a bipartisan companion bill, H.R.
5612, that Representative Earl Blumenauer from Oregon has introduced in
the House.
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. 3788
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 ``Geothermal Energy Investment
Act of 2010''.
SEC. 2. TEMPORARY INCREASE IN INVESTMENT TAX CREDIT FOR
GEOTHERMAL ENERGY PROPERTY.
(a) In General.--Subclause (II) of section 48(a)(2)(A)(i)
of the Internal Revenue Code of 1986 is amended by striking
``paragraph (3)(A)(i)'' and inserting ``clause (i) or (iii)
of paragraph (3)(A)''.
(b) Effective Date.--The amendment made by this section
shall apply to periods after the date of the enactment of
this Act, under rules similar to the rules of section 48(m)
of the Internal Revenue Code of 1986 (as in effect on the day
before the date of the enactment of the Revenue
Reconciliation Act of 1990).
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By Mr. COBURN (for himself, Mr. Burr, Mr. Ensign, Mr. Thune, and
Mr. Isakson):
S. 3790. A bill to amend title 5, United States Code to provide that
persons having seriously delinquent tax debts shall be ineligible for
Federal employment; read the first time.
Mr. COBURN. Mr. President, today I have introduced two separate
bills, S. 3790 and S. 3791, intended to hold members of Congress and
other Federal employees to the same tax rules Washington imposes on the
rest of America.
In 2009, the Internal Revenue Service, IRS, found nearly 100,000
civilian Federal employees were delinquent on their Federal income
taxes, owing over $1 billion in unpaid Federal income taxes. When
considering retirees and military, more than 282,000 Federal employees
owed $3.3 billion in taxes.
These bills are not intended to single out the majority of Federal
employees who work hard and pay their taxes, but members of Congress
and Federal employees have a clear obligation to pay their Federal
income taxes. Legislators and government employees should not be exempt
from the laws they write and enforce. The very nature of Federal
employment and the concept inherent to ``public service'' demands those
being paid by taxpayers contribute their fair share of taxes. They
should lead by example.
Tax delinquency rate among congressional employees exceeds the rate
of all returns filed nationwide. Taxpayers are fed up with those in
Washington living under a different set of rules than the
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rest of America. At a time when Congress may allow taxes to increase on
some or even all Americans, Congress should not expect other Americans
to pay more taxes when they are not even paying the taxes they owe
under the rates they set themselves.
The bills I am introducing are fair to Federal employees and other
taxpayers. Both bills carefully reach only those paid by the taxpayers
who have willfully neglected to pay their incomes taxes.
The legislation excludes elected officials or Federal employees who
made oversights in their personal taxes but willfully agree to pay
them, or if they are challenging the delinquency in court or through
the IRS. Instead, it targets those who willfully neglect or avoid the
pay their taxes.
Specifically, it excludes Federal employees from termination and
Members of Congress from repercussions if the individual is currently
paying the taxes, interest, and penalties owed to IRS under an
installment plan; the individual and the IRS have worked out a
compromise on the amount of taxes, interest and penalties owed and the
compromise amount agreed upon is being repaid to IRS; the individual
has not exhausted his or her right to due process under the law; or the
individual filed a joint return and successfully contends he or she
should not be fully liable for the taxes, interest, and/or penalties
owed because of something the other party to the return did or did not
do.
The first bill requires all Federal employees to be current on their
Federal income taxes or be fired from their jobs.
The second bill requires Members of Congress to report any
outstanding tax liability. If the Member possesses a tax liability,
this bill would require the appropriate congressional committee to
launch an ethics investigation and the Member's salary would be reduced
in accordance with the amount he or she owes.
These bills require no more of members of Congress or Federal
employees than is required of other Americans.
It should be a priority of this Congress to pass these solutions as a
way to guarantee equal treatment under the law. This is especially
important at this time when our national debt exceeds $13.5 trillion
since this legislation is estimated to reduce the Federal deficit by at
least $3 billion.
I hope my colleagues on both sides of the aisle will support these
bills to demonstrate their commitment to requiring Congress to live
under the same rules it imposes on the rest of the country. It is time
for every member of Congress to pay their taxes rather than simply
spending the taxes of others.
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