[Congressional Record Volume 157, Number 120 (Tuesday, August 2, 2011)]
[Senate]
[Pages S5254-S5267]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS
By Mrs. GILLIBRAND (for herself and Mr. Hatch):
S. 1469. A bill to require reporting on the capacity of foreign
countries to combat cybercrime, to develop action plans to improve the
capacity of certain countries to combat cybercrime, and for other
purposes; to the Committee on Foreign Relations.
Mr. HATCH. Mr. President, I rise today to reintroduce the
International Cybercrime Reporting and Cooperation Act with Senator
Kirsten Gillibrand, which if enacted, will establish a framework for
global cooperation on the fight against cybercrime. As the United
States continues to work on combating cybercrime here at home, we must
simultaneously direct our attention to the international arena. With
bipartisan support and valued input from affected industry, we have
worked together on drafting a bill that encompasses reporting measures,
action plans, and multilateral efforts in support of government
cooperation to dismantle this global threat.
This bill increases the U.S. Government's focus on combating
cybercrime internationally by requiring the President, or his designee,
to annually report to Congress on the assessment of the cybercrime
fighting efforts of the countries chosen by key federal agencies in
consultation with private sector stakeholders. The countries to be
reviewed are those with a significant role in efforts to combat
cybercrime impacting U.S. Government, entities and persons, or
disrupting U.S. electronic commerce or intellectual property interests.
Cyberspace remains borderless, with no single proprietor.
Accordingly, the United States must take the lead on maintaining the
openness of the Internet, while securing accountability. If a country
is a haven for cybercrime, or simply has demonstrated a pattern of
uncooperative behavior with efforts to combat cybercrime, that nation
must be held accountable. The government of each country must conduct
criminal investigations and prosecute criminals when there is credible
evidence of cybercrime incidents against the U.S. government, our
private entities or our people.
With so many U.S. companies doing business overseas, we must do our
part to safeguard their employees, their jobs, and their clients from
cyber attacks. Our objective is simple: We need international
cooperation to increase assistance and prevention efforts of cybercrime
from those countries deemed to be of cyber concern. Without
international cooperation, our economy, security, and people will
continue to be under threat.
Cybercrime is a tangible threat to the security of our global
economy, which is why we need to coordinate our fight worldwide. Until
countries begin to take the necessary steps to fight criminals within
their borders, cybercrime havens will continue to flourish. Countries
that knowingly permit cybercriminals to attack within their borders
will now know that the United States is watching, the global community
is watching, and there will be consequences for not acting.
______
By Mr. HATCH (for himself and Mr. Coburn):
S. 1476. A bill to reduce the size of the Federal workforce and
Federal employee cost relating to pay, bonuses, and travel; to the
Committee on Homeland Security and Governmental Affairs.
Mr. HATCH. Mr. President, after a contentious several months
navigating the increase in the debt ceiling, Congress will be returning
home in the next few days. I think many of us are anxious to go back to
the States, where we will hear from our fellow citizens about their
thoughts on what we are doing well and where we are falling short.
Getting out of Washington and returning to our States will be a
relief, but I am fully aware that after this brief respite, we will
come back to Washington in the fall with many more contentious issues
still on our plates.
Our Nation is still on an unsustainable fiscal path, even with
today's temporary resolution of the issues surrounding the debt
ceiling. In addition, we have a government that has grown far too large
and has taken on far too many obligations.
Today, with all these concerns in mind, I am joined by Senator Tom
Coburn in introducing the Federal Workforce Reduction and Reform Act of
2011. If enacted, this bill will go a long way toward reducing the size
of the Federal Government and helping to get our Nation's fiscal house
in order.
Specifically, our bill would extend the current pay freeze for
Federal civilian employees for another 3 years. Bonuses paid Federal
employees would also be frozen during that time. Currently, Federal
workers receive an automatic cost-of-living adjustment every year and
are eligible for relocation, retention, and performance bonuses as
well.
While I don't begrudge government employees their compensation, these
automatic increases come with significant costs and far outpace those
typically offered in the private sector. By simply extending the
current pay freeze for another 3 years, we will save the Federal
Government roughly $140 billion over 10 years.
In addition, our bill would require the President, in consultation
with the Office of Management and Budget and the Office of Personnel
Management, to reduce the size of the Federal workforce by 15 percent--
roughly 300,000 employees--over the next 10 years. This could easily be
accomplished through attrition and would save taxpayers over $225
billion over that time.
The bill would require a similar reduction in the Federal contract
workforce as well. We have nothing against Federal agencies contracting
services out to private venders. However, the significant increase in
this practice
[[Page S5255]]
over the last several years has masked the size of the Federal
Government. Indeed, when you include the contract workforce, the
Federal Government is even larger than it appears.
Our bill would require that the President work with OMB and OPM to
count the number of employees working on Federal contracts and reduce
that number by 15 percent over the next 10 years. This would provide an
even greater reduction in the size of the Federal Government and save
taxpayers another $230 billion over the next decade.
Finally, this bill would reduce the travel budgets of Federal
agencies by 75 percent over time. All told, the Federal Government
spends over $15 billion a year on travel expenses. Most businesses
respond to difficult financial times by reducing or eliminating
unnecessary expenses. Most private sector leaders would tell you that
travel expenses are one of the first things on the chopping block.
Furthermore, improvements in teleconferencing technology and web-based
communication have made much of the government-sponsored travel that
was required in the past unnecessary.
Our bill would cut Federal travel expenses in half for the first 2
years, and then by three quarters thereafter. This will save American
taxpayers something in the neighborhood of $40 billion over 10 years.
Mr. President, our Nation is currently in the midst of a fundamental
debate over the constitutional limits on the Federal Government. The
President and his allies see no bounds for a living Constitution, while
conservatives like myself believe that Federal power has far exceeded
the Founders' limits and is a genuine threat to personal liberty.
While this debate will likely not be resolved anytime soon, most of
us can agree that we need to take immediate steps to address our
Nation's looming fiscal crisis. The deal that was approved today was a
step in the right direction, but it was only one step. We must do more,
and we can do more, to right our fiscal ship. Some may see things
differently, but I don't see any way that we can restore the integrity
of the Nation's fiscal position without significantly reducing the size
and cost of the Federal Government. The bill we are introducing today
would be an important and measurable step toward that goal.
According to the numbers and methodology used by the National
Commission on Fiscal Responsibility and Reform, these changes combined
will save American taxpayers more than $600 billion over 10 years.
These are significant numbers. They represent more than half of the
deficit reduction required in the first part of the deal agreed to
today, and they could easily be realized if we enact this small handful
of relatively simple reforms.
I want to thank Senator Coburn--who continues to be a leader in the
fight to bring us back to fiscal sanity--for his help and support on
this bill. His has been a tireless voice against government excess and
I am proud to join with him in this fight.
I urge all my colleagues to support the Federal Workforce Reduction
and Reform Act of 2011.
______
By Mr. LEVIN (for himself and Mr. Grassley):
S. 1483. A bill to ensure that persons who form corporations in the
United States disclose the beneficial owners of those corporations, in
order to prevent wrongdoers from exploiting United States corporations
in ways that threaten homeland security, to assist law enforcement in
detecting, preventing, and punishing terrorism, money laundering, and
other misconduct involving United States corporations, and for other
purposes; to the Committee on Homeland Security and Governmental
Affairs.
Mr. LEVIN. Today, I along with my colleague, Senator Grassley, am re-
introducing the Incorporation Transparency and Law Enforcement
Assistance Act, a bill designed to combat terrorism, money laundering,
tax evasion, and other wrongdoing facilitated by U.S. corporations with
hidden owners. This commonsense bill would end the practice of our
States forming over about 2 million new corporations each year for
unidentified persons, and instead require the States to ask for the
identities of the persons establishing those corporations. With those
names on record, U.S. law enforcement faced with corporate misconduct
would then have a trail to chase instead of what today is too often a
dead end.
Our bill is supported by key law enforcement organizations, including
the Federal Law Enforcement Officers Association, the Fraternal Order
of Police, the National Association of Assistant United States
Attorneys, the National Narcotic Officers' Associations Coalition, the
United States Marshals Service Association, the Society of Former
Special Agents of the Federal Bureau of Investigation, and the
Association of Former ATF Agents. It is also endorsed by a number of
small business and public interest groups, including the Main Street
Alliance, Sustainable Business Network of Washington, Global Financial
Integrity, Global Witness, Public Interest Research Group, Project on
Government Oversight, Jubilee USA, Citizens for Tax Justice, Tax
Justice Network USA, and the FACT Coalition.
This is the third time this bill has been introduced. In the 110th
Congress, when the bill was introduced for the first time and he was a
member of the U.S. Senate, President Obama served as an original
cosponsor. It's an issue that has become more urgent with time.
Right now, it takes more information to get a drivers license or open
a U.S. bank account than to form a U.S. corporation. Under current law,
U.S. corporations can be established anonymously, by hidden owners who
don't reveal their identity. Our bill would change that by requiring
any State that accepts anti-terrorism funding from DHS to add a new
question to their existing incorporation forms asking applicants who
want to set up a new U.S. corporation or limited liability company to
answer a simple but important question: who are the actual owners?
That is it. One new question on an existing form. It is not a
complicated question, yet the answer could play a key role in helping
law enforcement do their job. Our bill would not require States to
verify the information, but penalties would apply to persons who submit
false information. States, or licensed formation agents if a State has
delegated the task to them, would supply the ownership information to
law enforcement upon receipt of a subpoena or summons.
We have all seen the news reports about U.S. corporations involved in
wrongdoing, from facilitating terrorism to money laundering, financial
fraud, tax evasion, corruption, and more. Let me give you a few
examples.
We now know that some terrorists use U.S. shell corporations to carry
out their activities. Viktor Bout, an arms dealer who has been indicted
and incarcerated in the United States for conspiracy to kill U.S.
nationals, used shell corporations around the world in his work,
including a dozen formed in Texas, Delaware, and Florida. Mr. Bout was
recently extradited from Thailand to answer for his conduct at which
time Attorney General Eric Holder stated: ``Long considered one of the
world's most prolific arms traffickers, Mr. Bout will now appear in
federal court in Manhattan to answer to charges of conspiring to sell
millions of dollars worth of weapons to a terrorist organization for
use in trying to kill Americans.'' It is unacceptable that Mr. Bout was
able to set up shell corporations in three of our States and use them
in illicit activities without ever being asked who owned those
corporations.
In another case, a New York company called the Assa Corporation owned
a Manhattan skyscraper and, in 2007, wire transferred about $4.5
million in rental payments to a bank in Iran. U.S. law enforcement
tracking the funds had no idea who was behind that shell corporation,
until another government disclosed that it was owned by the Alavi
Foundation which was known to have ties to the Iranian military. In
other words, a New York corporation was being used to ship millions of
U.S. dollars to Iran, a notorious supporter of terrorism.
U.S. corporations with hidden owners have also been involved in
financial crimes. In 2011, a former Russian military officer, Victor
Kaganov, pled guilty to operating an illegal money transmitter business
from his home in
[[Page S5256]]
Oregon, and using Oregon shell corporations to wire more than $150
million around the world on behalf of Russian clients. U.S. Attorney
Dwight Holton of the District of Oregon used stark language when
describing the case: ``When shell corporations are illegally
manipulated in the shadows to hide the flow of tens of millions of
dollars overseas, it threatens the integrity of our financial system.''
Another recent case involves Florida attorney Scott Rothstein who, in
2010, pled guilty to fraud and money laundering in connection with a
$1.2 billion Ponzi investment scheme, in which he used 85 U.S. limited
liability companies to conceal his participation or ownership stake in
various real estate and business ventures.
Tax evasion is another type of misconduct which all too often
involves the use of U.S. corporations with hidden owners. In 2006, for
example, the Subcommittee showed how Kurt Greaves, a Michigan
businessman, worked with Terry Neal, an offshore promoter, to form
shell corporations in Nevada, Canada, and offshore secrecy
jurisdictions, to hide more than $400,000 in untaxed business income.
In 2004, both Mr. Greaves and Mr. Neal pled guilty to Federal tax
evasion. Also in 2006, the Subcommittee showed how two brothers from
Texas, Sam and Charles Wyly, created a network of 58 trusts and shell
corporations to dodge the payment of U.S. taxes, including using a set
of Nevada corporations to move offshore over $190 million in stock
options without paying any taxes on that compensation.
Still another area of abuse involves the misuse of U.S. corporations
in handling corruption proceeds. One example involves Teodoro Obiang,
who is the son of the President of Equatorial Guinea, holds office in
that country, and is currently under investigation by the U.S. Justice
Department, along with his father, for corruption and other misconduct.
Between 2004 and 2008, Mr. Obiang used U.S. lawyers to form multiple
California shell corporations with names like Beautiful Vision,
Unlimited Horizon, and Sweet Pink; open bank accounts in the names of
those corporations; and move millions of dollars in suspect funds
through those and other U.S. banks.
One last example involves 800 U.S. corporations whose hidden owners
have stumped U.S. law enforcement which, as a result, has given up
investigating their suspect conduct. In October 2004, the Homeland
Security Department's division of Immigration and Customs Enforcement
or ICE identified a single Utah corporation that had engaged in $150
million in suspicious transactions. ICE found that the corporation had
been formed in Utah and was owned by two Panama entities which, in
turn, were owned by a group of Panama holding corporations, all located
in the same Panama City office. By 2005, ICE had located 800 additional
U.S. corporations in nearly all 50 states associated with the same
shadowy group in Panama, but was unable to obtain the name of a single
natural person who owned one of the corporations. ICE learned that
those corporations were associated with multiple investigations into
tax fraud and other wrongdoing, but no one had been able to find the
corporate owners. The trail went cold, and ICE closed the case. Yet it
may be that many of those U.S. corporations are still operative.
These examples of U.S. corporations with hidden owners involved in or
facilitating terrorism, financial crime, tax evasion, corruption, or
other misconduct provide ample evidence of the need for legislation to
address the problem.
The Federal Law Enforcement Officers Association or FLEOA, which
represents more than 26,000 federal law enforcement officers and is a
strong supporter of the bill, has stated that ``the unfortunate lax
attitude demonstrated by certain states has enabled large criminal
enterprises to exploit those State's flawed filing systems.'' FLEOA has
stated further: ``[W]hile all Americans are inspired by the spirit of
free enterprise, our membership does not want to see the United States
adopt the financial hideaway image of Switzerland. We regard corporate
ownership in the same manner as we do vehicle ownership. Requiring the
driver of a vehicle to have a registration and insurance card is not a
violation of their privacy. This information does not need to be
published in a Yellow Pages, but it should be available to law
enforcement officers who make legally authorized requests pursuant to
official investigations.''
The National Association of Assistant United States Attorneys which
represents more than 1,500 federal prosecutors, urges Congress to take
legislative action to remedy inadequate state incorporation practices.
NAAUSA has written: ``[M]indful of the ease with which criminals
establish `front organizations' to assist in money laundering,
terrorist financing, tax evasion and other misconduct, it is shocking
and unacceptable that many State laws permit the creation of
corporations without asking for the identity of the corporation's
beneficial owners. Your legislation will guard against that from
happening, and no longer permit criminals to exploit the lack of
transparency in the registration of corporations.''
Just last week, the Administration released a new Strategy to Combat
Transnational Organized Crime that focused, in part, on the problem of
corporations with hidden owners. It stated that transnational organized
criminal networks ``rely on industry experts, both witting and
unwitting, to facilitate corrupt transactions and to create the
necessary infrastructure to pursue their illicit schemes, such as
creating shell corporations, opening offshore bank accounts in the
shell corporation's name, and creating front businesses for their
illegal activity and money laundering.'' The Strategy established as
one of its action plans to ``[w]ork with Congress to enact legislation
to require disclosure of beneficial ownership information of legal
entities at the time of company formation in order to enhance
transparency for law enforcement and other purposes.''
We need legislation not only to stop the abuses being committed by
U.S. corporations with hidden owners, but also to meet our
international commitments. In 2006, the leading international anti-
money laundering body in the world, the Financial Action Task Force on
Money Laundering, known as FATF, issued a report criticizing the United
States for its failure to comply with a FATF standard requiring
countries to obtain beneficial ownership information for the
corporations formed under their laws. This standard is one of 40 FATF
standards that this country has publicly committed itself to
implementing as part of its efforts to promote strong anti-money
laundering laws around the world.
FATF gave the United States two years, until 2008, to make progress
toward coming into compliance with the FATF standard on beneficial
ownership information. That deadline passed three years ago, and we
have yet to make any real progress. Enacting the bill we are
introducing today would bring the United States into compliance with
the FATF standard by requiring the States to obtain beneficial
ownership information for the corporations formed under their laws. It
would ensure that the United States meets its international commitment
to comply with FATF anti-money laundering standards.
The bill being introduced today is the product of years of work by
the Senate Permanent Subcommittee on Investigations, which I chair.
Over ten years ago, in 2000, the Government Accountability Office, at
my request, conducted an investigation and released a report entitled,
``Suspicious Banking Activities: Possible Money Laundering by U.S.
Corporations Formed for Russian Entities.'' That report revealed that
one person was able to set up more than 2,000 Delaware shell
corporations and, without disclosing the identity of the beneficial
owners, open U.S. bank accounts for those corporations, which then
collectively moved about $1.4 billion through the accounts. It is one
of the earliest government reports to give some sense of the law
enforcement problems caused by U.S. corporations with hidden owners.
The alarm it sounded years ago is still ringing.
In April 2006, in response to a second Subcommittee request, GAO
released a report entitled, ``Corporation Formations: Minimal Ownership
Information Is Collected and Available,'' which reviewed the corporate
formation laws in all 50 States. GAO disclosed that the
[[Page S5257]]
vast majority of the States do not collect any information at all on
the beneficial owners of the corporations and limited liability
companies, or LLCs, formed under their laws. The report also found that
several States have established automated procedures that allow a
person to form a new corporation or LLC in the State within 24 hours of
filing an online application without any prior review of that
application by State personnel. In exchange for a substantial fee, at
least two States will form a corporation or LLC within one hour of a
request. After examining these State incorporation practices, the GAO
report described the problems that the lack of beneficial ownership
information has caused for a range of law enforcement investigations.
In November 2006, our Subcommittee held a hearing on the problem. At
that hearing, representatives of the U.S. Department of Justice, the
Internal Revenue Service, and the Department of Treasury's Financial
Crimes Enforcement Network or FinCEN testified that the failure of
States to collect adequate information on the beneficial owners of the
legal entities they form had impeded federal efforts to investigate and
prosecute criminal acts such as terrorism, money laundering, securities
fraud, and tax evasion. At the hearing, the Justice Department
testified: ``We had allegations of corrupt foreign officials using
these [U.S.] shell accounts to launder money, but were unable--due to
lack of identifying information in the corporate records--to fully
investigate this area.'' The IRS testified: ``Within our own borders,
the laws of some states regarding the formation of legal entities have
significant transparency gaps which may even rival the secrecy afforded
in the most attractive tax havens.'' As part of its testimony, FinCEN
described identifying 768 incidents of suspicious international wire
transfer activity involving U.S. shell corporations.
The next year, in 2007, in a ``Dirty Dozen'' list of tax scams active
that year, the IRS highlighted shell corporations with hidden owners as
number four on the list. It wrote:
4. Disguised Corporate Ownership: Domestic shell
corporations and other entities are being formed and operated
in certain states for the purpose of disguising the ownership
of the business or financial activity. Once formed, these
anonymous entities can be, and are being, used to facilitate
underreporting of income, non-filing of tax returns, listed
transactions, money laundering, financial crimes and possibly
terrorist financing. The IRS is working with state
authorities to identify these entities and to bring their
owners into compliance.
It was also in 2007, that we first introduced our bipartisan
legislation, which was S. 2956 back then, to stop the formation of U.S.
corporations with hidden owners. It was a Levin-Coleman-Obama bill.
When asked about the bill in 2008, then DHS Secretary Michael Chertoff
wrote: ``In countless investigations, where the criminal targets
utilize shell corporations, the lack of law enforcement's ability to
gain access to true beneficial ownership information slows, confuses or
impedes the efforts by investigators to follow criminal proceeds.''
In 2009, the Senate Homeland Security and Governmental Affairs
Committee held two hearings which examined not only the problem, but
also possible solutions, including our by then revised bill, S. 569. At
the first hearing entitled, ``Examining State Business Incorporation
Practices: A Discussion of the Incorporation Transparency and Law
Enforcement Assistance Act,'' held in June 2009, DHS testified that
``shell corporations established in the United States have been
utilized to commit crimes against individuals around the world.'' The
Manhattan District Attorney's office testified: ``For those of us in
law enforcement, these issues with shell corporations are not some
abstract idea. This is what we do and deal with every day. We see these
shell corporations being used by criminal organizations, and the record
is replete with examples of their use for money laundering, for their
use in tax evasion, and for their use in securities fraud.''
At the second hearing, ``Business Formation and Financial Crime:
Finding a Legislative Solution,'' held in November 2009, the Justice
Department again testified about criminals using U.S. shell
corporations. It also noted that ``each of these examples involves the
relatively rare instance in which law enforcement was able to identify
the perpetrator misusing U.S. shell corporations. Far too often, we are
unable to do so.'' The Treasury Department testified that ``the ability
of illicit actors to form corporations in the United States without
disclosing their true identity presents a serious vulnerability and
there is ample evidence that criminal organizations and others who
threaten our national security exploit this vulnerability.''
The 2009 hearings also presented evidence of dozens of Internet
websites advertising corporate formation services that highlighted the
ability of corporations to be formed in the United States without
asking for the identity of the beneficial owners. These websites
explicitly pointed to anonymous ownership as a reason to incorporate
within the United States, and often listed certain States alongside
notorious offshore jurisdictions as preferred locations in which to
form new corporations, essentially providing an open invitation for
wrongdoers to form entities within the United States.
One website, for example, set up by an international incorporation
firm, advocated setting up corporations in Delaware by saying:
``DELAWARE--An Offshore Tax Haven for Non US Residents.'' It cited as
one of Delaware's advantages that: ``Owners' names are not disclosed to
the state.'' Another website, from a U.K. firm called
``formacorporation-offshore.com,'' listed the advantages to
incorporating in Nevada. Those advantages included: ``Stockholders are
not on Public Record allowing complete anonymity.''
During the 2009 hearings, I presented evidence of how one Wyoming
outfit was selling so-called shelf corporations--corporations formed
and then left ``on the shelf'' for later sale to purchasers who could
then pretend the corporations had been in operation for years. More
recently, a June 2011 Reuters news article wrote a detailed expose of
how that same outfit, called Wyoming Corporate Services, has formed
thousands of U.S. corporations all across the country, all with hidden
owners. The article quoted the website as follows: ``A corporation is a
legal person created by state statute that can be used as a fall guy, a
servant, a good friend or a decoy. A person you control . . . yet
cannot be held accountable for its actions. Imagine the
possibilities!''
The article described a small house in Cheyenne, Wyoming, which
Wyoming Corporate Services used to provide a U.S. address for more than
2,000 corporations that it had helped to form. The article described
``the walls of the main room'' as ``covered floor to ceiling with
numbered mailboxes labeled as corporate suites.'' The article reported
that among the corporations using the address was a shell corporation
controlled by a former Ukranian prime minister, Pavlo Lazarenko, who
had been convicted of money laundering and extortion; a corporation
indicted for helping online-poker operators evade a U.S. ban on
Internet gambling; and two corporations barred from U.S. federal
contracting for selling counterfeit truck parts to the Pentagon. The
article observed that Wyoming Corporate Services continued to sell
shelf corporations that existed solely on paper but could show a
history of regulatory and tax filings, despite having had no real U.S.
operations. That's what is going on right now, here in our own
backyard, with respect to U.S. corporations.
Despite the evidence of U.S. corporations being misused by organized
crime, terrorists, tax evaders, and other wrongdoers, and despite years
of law enforcement complaints, many of our States are reluctant to
admit there is a problem in establishing U.S. corporations and LLCs
with hidden owners. Too many of our States are eager to explain how
quick and easy it is to set up corporations within their borders,
without acknowledging that those same quick and easy procedures enable
wrongdoers to utilize U.S. corporations in a variety of crimes and tax
dodges both here and abroad.
Beginning in 2006, the Subcommittee worked with the States to
encourage them to recognize the homeland security problem they'd
created and to come up with their own solution. After the
Subcommittee's 2006 hearing on this issue, for example, the National
Association of Secretaries of State or
[[Page S5258]]
NASS convened a 2007 task force to examine state incorporation
practices. At the request of NASS and several States, I delayed
introducing legislation while they worked on a proposal to require the
collection of beneficial ownership information. My Subcommittee staff
participated in multiple conferences, telephone calls, and meetings;
suggested key principles; and provided comments to the Task Force.
In July 2007, the NASS task force issued a proposal. Rather than cure
the problem, however, the proposal had many deficiencies, leading the
Treasury Department to state in a letter that the NASS proposal ``falls
short'' and ``does not fully address the problem of legal entities
masking the identity of criminals.''
Among other shortcomings, the NASS proposal would not require States
to obtain the names of the natural individuals who would be the
beneficial owners of a U.S. corporation or LLC. Instead, it would allow
States to obtain a list of a corporation's ``owners of record'' who can
be, and often are, offshore corporations or trusts. The NASS proposal
also did not require the States themselves to maintain the beneficial
ownership information, or to supply it to law enforcement upon receipt
of a subpoena or summons. Instead, law enforcement would have to get
the information from the suspect corporation or one of its agents,
thereby tipping off the corporation to the investigation. The proposal
also failed to require the beneficial ownership information to be
updated over time. These and other flaws in the proposal were
identified by the Treasury Department, the Department of Justice, and
others, but NASS decided to continue on the same course.
NASS enlisted the help of the National Conference of Commissioners on
Uniform State Laws or NCCUSL, which produced a proposed model law for
States that wanted to adopt the NASS approach. NCCUSL presented its
proposal at the Homeland Security and Governmental Affairs Committee's
June 2009 hearing, where it was subjected to significant criticism. The
Manhattan District Attorney's office, for example, testified: ``I say
without hesitation or reservation--that from a law enforcement
perspective, the bill proposed by NCCUSL would be worse than no bill at
all. And there are two very basic reasons for this. It eliminates the
ability of law enforcement to get corporate information without
alerting the target of the investigation that the investigation is
ongoing. That is the primary reason. It also sets up a system that is
time-consuming and complicated.''
The Department of Justice testified: ``Senator, I would submit to you
that in a criminal organization everyone knows who is in control and
this will not be an issue of determining who is in control. What we are
concerned about here from the law enforcement perspective are the
criminals and the criminal organizations and so what we are asking is
that when criminals use shell companies, they provide the name of the
beneficial owner. That is the person who is in control, the criminal in
control, as opposed to the NCCUSL proposal where they are suggesting
that instead two nominees are provided--two nominees between law
enforcement and the criminal in control.''
Despite these criticisms, NCCUSL finalized its model law in July
2009, issuing it under the title, ``Uniform Law Enforcement Access to
Entity Information Act.'' At the November 2009 hearing, law enforcement
again criticized the NCCUSL model law. At the hearing, Senator Levin
asked: ``Now the NCCUSL, in their proposal just requires a records
contact and that records contact could simply be an owner of record,
which could be a shell corporation, putting us right back into a circle
which leads absolutely nowhere in terms of finding the beneficial
owners. Would you agree that the approach of NCCUSL in this regard is
not acceptable, Ms. Shasky?'' The Justice Department representative,
Jennifer Shasky, responded: ``Yes, Senator. To allow companies to
provide anything less than the beneficial owner information merely
provides criminals with an opportunity to evade responsibility and put
nominees between themselves and the true perpetrator.'' With regard to
NCCUSL's proposal, the Treasury representative, David Cohen, testified:
``[T]here is not an obligation for that live person to not be a
nominee. And what I think is important in the legislation is that we
get at the true beneficial owner and not someone who may be a
nominee.''
In addition to its flaws, the NCCUSL model law has proven unpopular
with the States for whom it was written. Despite the effort and fanfare
attached to this uniform law, after two years of sitting on the books,
not a single State has adopted it or given any indication of doing so.
It is deeply disappointing that the States, despite the passage of
five years since FATF first called upon the United States to meet its
commitment to collect beneficial ownership information, have been
unable to devise an effective proposal. Part of the difficulty is that
the States have a wide range of practices, differ on the extent to
which they rely on incorporation fees as a major source of revenue, and
differ on the extent to which they attract non-U.S. persons as
incorporators. In addition, the States are competing against each other
to attract persons who want to set up U.S. corporations, and that
competition creates pressure for each individual State to favor
procedures that allow quick and easy incorporations, with no questions
asked. It's a classic case of competition causing a race to the bottom,
making it difficult for any one State to do the right thing and request
the identity of the persons behind the incorporation efforts.
That is why Federal legislation in this area is critical. Federal
legislation is needed to level the playing field among the States, set
minimum standards for obtaining beneficial ownership information, put
an end to the practice of States forming millions of legal entities
each year without knowing who is behind them, and bring the United
States into compliance with its international commitments.
The bill's provisions would require the States to obtain from
incorporation applicants a list of the beneficial owners of each
corporation or LLC formed under their laws, to maintain this
information for a period of years after a corporation is terminated,
and to provide the information to law enforcement upon receipt of a
subpoena or summons. The bill would also require corporations and LLCs
to update their beneficial ownership information on a regular basis.
The ownership information would be kept by the State or, if a State
maintains a formation agent licensing system and delegates this task,
by a State's licensed formation agents.
The particular information that would have to be provided for each
beneficial owner is the owner's name, address, and unique identifying
number from a State drivers license or U.S. passport. The bill would
not require States or their licensed formation agents to verify this
information, but penalties would apply to persons who submitted false
information.
In the case of U.S. corporations formed by individuals who do not
possess a drivers license or passport from the United States, the bill
would require the incorporation application to include a written
certification from a formation agent residing within the State
attesting to the fact that the agent had obtained and verified the
identity of the non-U.S. beneficial owners of the corporation, by
obtaining their names, addresses, and identifying information from a
non-expired non-U.S. passport. The formation agent would be required to
retain this information in the State for a specified period of time and
produce it upon receipt of a subpoena or summons from law enforcement.
To ensure that its provisions are tightly targeted, the bill would
exempt a wide range of corporations from the disclosure obligation. It
would exempt, for example, virtually all highly regulated corporations,
because we already know who owns them. That includes all publicly-
traded corporations, banks, broker-dealers, commodity brokers,
registered investment funds, registered accounting firms, insurers,
utilities, and charities that file returns with the IRS. The bill would
also exempt corporations with a substantial U.S. presence, including at
least 20 employees physically located in the United States, since those
individuals could provide law enforcement with the leads needed to
trace a corporation's true owners. In addition, the bill would exempt
corporations whose beneficial
[[Page S5259]]
ownership information would not benefit the public interest or assist
law enforcement. These exemptions dramatically reduce the number of
corporations who would be required to provide beneficial ownership
information to ensure that the bill's disclosure obligation is focused
on only those whose owners' identities are currently hidden.
The bill does not take a position on the issue of whether the States
should make the beneficial ownership information available to the
public. Instead, the bill leaves it entirely up to the States to decide
whether, under what circumstances, and to what extent to make
beneficial ownership information available to the public. The bill
explicitly permits the States to place restrictions on providing
beneficial ownership information to persons other than government
officials. The bill focuses instead on ensuring that law enforcement
with a subpoena or summons is given ready access to the beneficial
ownership information.
Relative to the costs of compliance, the bill provides States with
access to two separate funding sources, neither of which involves
appropriated funds. For the first three years after the bill's
enactment, the bill directs both the Treasury and Justice Departments
to make funds available from their individual forfeiture programs to
States seeking to comply with the requirements of the Act. These
forfeiture funds are not appropriated taxpayer dollars; instead they
are the proceeds of forfeiture actions taken against persons involved
in money laundering, drug trafficking, or other wrongdoing. The two
forfeiture funds typically contain between $300 and $500 million at a
time. The bill would direct a total of $30 million over three years to
be provided to the States from the two funds to carry out the Act.
These provisions would ensure that States have adequate funds for the
modest compliance costs involved with adding a new question to their
incorporation forms requesting the names of the covered corporations'
beneficial owners.
It is common for bills establishing minimum Federal standards to seek
to ensure State action by making some Federal funding dependent upon a
State's meeting the specified standards. Our bill, however, states
explicitly that nothing in its provisions authorizes DHS to withhold
funds from a State for failing to modify its incorporation practices to
meet the beneficial ownership information requirements in the Act.
Instead, the bill calls for a GAO report in 2015 to identify which
States, if any, have failed to strengthen their incorporation practices
as required by the Act. After getting this status report, a future
Congress can decide what steps to take, including whether to reduce any
funding going to noncompliant States.
The bill also contains a provision that would require corporations
bidding on Federal contracts to provide the same beneficial ownership
information to the Federal Government as provided to the relevant
State. The Subcommittee has become aware of instances in which the
Federal Government has found itself doing business with U.S.
corporations whose owners are hidden. It's important that when the
Federal Government contracts to do business with someone, it knows who
it is dealing with.
Finally, the bill would require the Treasury Department to issue a
rule requiring U.S. formation agents to establish anti-money laundering
programs to ensure they are not forming U.S. corporations or LLCs for
wrongdoers. The bill requires the programs to be risk based so that
formation agents can target their preventative efforts toward persons
who pose a high risk of being involved with money laundering. GAO would
also be asked to conduct a study of existing State formation procedures
for partnerships, trusts, and charitable organizations.
We have worked with the Departments of Homeland Security, Treasury,
and Justice to craft a bill that would address, in a fair and
reasonable way, the homeland security problems created by States
allowing the formation of millions of U.S. corporations and LLCs with
hidden owners. What the bill comes down to is a simple requirement that
States change their incorporation applications to add a single question
requesting identifying information for the true owners of the
corporations they form. That is not too much to ask to protect this
country and the international community from wrongdoers seeking to
misuse U.S. corporations.
For those who say that, if the United States tightens its
incorporation rules, new corporations will be formed elsewhere, it is
appropriate to ask exactly where they will go. Every country in the
European Union is already required to have their formation agents
collect beneficial information for the corporations formed by those
agents. Most offshore jurisdictions also already require request this
information to be collected, including the Bahamas, Cayman Islands, and
the Channel Islands. Countries around the world already request
beneficial ownership information, in part because of their commitment
to FATF's international anti-money laundering standards. Our 50 States
should be asking for the same ownership information, but there is no
indication that they will any time in the near future, unless required
to do so.
I wish Federal legislation weren't necessary. I wish the States could
solve this homeland security problem on their own, but ongoing
competitive pressures make it unlikely that the States will do the
right thing. It is been more than five years since our 2006 hearing on
this issue and more than two years since the States came up with a
model law on the subject, with no progress to speak of, despite
repeated pleas from law enforcement.
Federal legislation is necessary to reduce the vulnerability of the
United States to wrongdoing by U.S. corporations with hidden owners, to
protect interstate and international commerce from criminals misusing
U.S. corporations, to strengthen the ability of law enforcement to
investigate suspect U.S. corporations, to level the playing field among
the States, and to bring the United States into compliance with its
international anti-money laundering obligations.
There is also an issue of consistency. For years, I have been
fighting offshore corporate secrecy laws and practices that enable
wrongdoers to secretly control offshore corporations involved in money
laundering, tax evasion, and other misconduct. I have pointed out on
more than one occasion that corporations were not created to hide
ownership, but to protect owners from personal liability for corporate
acts. Unfortunately, today, the corporate form has too often been
corrupted into serving those who wish to conceal their identities. It
is past time to stop this misuse of the corporate form. But if we want
to stop inappropriate corporate secrecy offshore, we need to stop it
here at home as well.
For these reasons, I urge my colleagues to join us in supporting this
legislation and putting an end to incorporation practices that promote
corporate secrecy and render the United States and other countries
vulnerable to abuse by U.S. corporations with hidden owners.
Mr. President, I ask unanimous consent that a bill summary be printed
in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
Summary of Incorporation Transparency and Law Enforcement Assistance
Act
August 2, 2011
To protect the United States from U.S. corporations being
misused to support terrorism, money laundering, tax evasion,
or other misconduct, the Levin-Grassley Incorporation
Transparency and Law Enforcement Assistance Act would:
Beneficial Ownership Information. Require the States
directly or through licensed formation agents to obtain the
names of beneficial owners of corporations or limited
liability companies (LLCs) formed under a State's laws,
ensure this information is updated, and provide the
information to law enforcement upon receipt of a subpoena or
summons.
Identifying Information. Require corporations to provide
beneficial owners' names, addresses, and a U.S. drivers
license or passport number; or if the owners do not have
either a U.S. drivers license nor passport, information from
their non-U.S. passports.
Federal Contractors. Require corporations bidding on
federal contracts to provide the same beneficial ownership
information to the federal government.
Shelf Corporations. Require formation agents selling
``shelf corporations''--companies formed for later sale to a
third party--to identify the beneficial owners of those
corporations.
Penalties for False Information. Establish penalties for
persons who knowingly provide false information, or willfully
fail to provide required information, on beneficial
ownership.
[[Page S5260]]
Exemptions. Exempt from the disclosure obligation regulated
corporations, including publicly traded companies, banks,
broker-dealers, insurers, registered investment funds, and
charities; corporations with a substantial U.S. presence; and
corporations whose beneficial ownership information would not
benefit the public interest or assist law enforcement.
Funding. Provide $30 million over three years to States
from existing Treasury and Justice Department forfeiture
funds to pay for the costs of complying with the Act.
State Compliance Report. Specify that nothing in the Act
authorizes funds to be withheld from any State for failure to
comply with the Act, but also require a GAO report by 2015
identifying which States are not in compliance so a future
Congress can determine what steps to take.
Transition Period. Give the State' s three years, until
October 2014, to require beneficial ownership information for
corporations and LLCs formed under their laws.
Anti-Money Laundering Safeguards. Require paid formation
agents to establish anti-money laundering programs to guard
against supplying U.S. corporations or LLCs that facilitate
misconduct. Attorneys using paid formation agents would be
exempt from this requirement.
GAO Study. Require GAO to complete a study of State
beneficial ownership information requirements for
partnerships, charities, and trusts.
______
By Mr. UDALL of New Mexico (for himself, Mr. Heller, Mr.
Bingaman, and Mrs. Feinstein):
S. 1485. A bill to amend the Tariff Act of 1930 to include ultralight
vehicles under the definition of aircraft for purposes of the aviation
smuggling provisions under that Act, and for other purposes; to the
Committee on Finance.
Mr. UDALL of New Mexico. Mr. President, today I rise to introduce the
Ultralight Aircraft Smuggling Prevention Act, legislation that will
crack down on smugglers who use ultralight aircraft, also known as
ULAs, to bring drugs across the U.S.-Mexico border. I am pleased to be
working on this in a bipartisan manner with Senator Heller, who
introduced a very similar bill last year in the House with
Congresswoman Gabrielle Giffords. That bill passed overwhelmingly by a
412-3 vote. I hope we can have a similar bipartisan result here in the
Senate.
ULAs are single-pilot aircraft capable of flying low, landing and
taking off quickly, and are typically used for sport or for recreation.
However, because of increased detection and interdiction of more
traditional smuggling conveyances, ULAs have increasingly been employed
along the Southwest border by Mexican drug trafficking organizations to
smuggle drugs into the United States.
The use of ULAs by drug smugglers presents a unique challenge for
Border Patrol and prosecutors. Every year hundreds of ULAs are flown
across the Southwest border and each one can carry hundreds of pounds
of narcotics. Under existing law, ULAs are not categorized as aircraft
by the Federal Aviation Administration, so they do not fall under the
aviation smuggling provisions of the Tariff Act of 1930. This means
that a drug smuggler piloting a small airplane is subject to much
stronger criminal penalties than a smuggler who pilots a ULA.
Our bill will close this unintended loophole and establish the same
penalties if convicted--a maximum sentence of 20 years in prison and a
$25,000 fine--for smuggling drugs on ULAs as currently exist for
smuggling on airplanes or in automobiles. This is a common sense
solution that will give our law enforcement agencies and prosecutors
additional tools they need to combat drug smuggling.
The bill would also add an attempt and conspiracy provision to the
aviation smuggling law to allow prosecutors to charge people other than
the pilot who are involved in aviation smuggling. This would give them
a new tool to prosecute the ground crews who aid the pilots as well as
those who pick up the drug loads that are dropped from ULAs in the U.S.
Finally, the bill directs the Department of Defense and Department of
Homeland Security to collaborate in identifying equipment and
technology used by DOD that could be used by U.S. Customs and Border
Protection to detect ULAs.
In addition to Senator Heller, I am pleased to be joined by Senators
Bingaman and Feinstein in introducing this legislation. I urge my
colleagues to support the Ultralight Aircraft Smuggling Prevention Act.
Mr. President, I ask unanimous consent that the text of the bill and
an article be printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
S. 1485
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 ``Ultralight Aircraft
Smuggling Prevention Act of 2011''.
SEC. 2. AMENDMENTS TO THE AVIATION SMUGGLING PROVISIONS OF
THE TARIFF ACT OF 1930.
(a) In General.--Section 590 of the Tariff Act of 1930 (19
U.S.C. 1590) is amended--
(1) by redesignating subsection (g) as subsection (h); and
(2) by inserting after subsection (f) the following:
``(g) Definition of Aircraft.--As used in this section, the
term `aircraft' includes an ultralight vehicle, as defined by
the Administrator of the Federal Aviation Administration.''.
(b) Criminal Penalties.--Subsection (d) of section 590 of
the Tariff Act of 1930 (19 U.S.C. 1590(d)) is amended in the
matter preceding paragraph (1), by inserting ``, or attempts
or conspires to commit,'' after ``commits''.
(c) Effective Date.--The amendments made by this section
apply with respect to violations of any provision of section
590 of the Tariff Act of 1930 on or after the 30th day after
the date of the enactment of this Act.
SEC. 3. INTERAGENCY COLLABORATION.
The Assistant Secretary of Defense for Research and
Engineering shall, in consultation with the Under Secretary
for Science and Technology of the Department of Homeland
Security, identify equipment and technology used by the
Department of Defense that could also be used by U.S. Customs
and Border Protection to detect and track the illicit use of
ultralight aircraft near the international border between the
United States and Mexico.
____
[From the Los Angeles Times, May 19, 2011]
Ultralight Aircraft Now Ferrying Drugs Across U.S.-Mexico Border
Mexican organized crime groups are using ultralight aircraft to drop
marijuana bundles in agricultural fields and desert scrub across the
U.S. border. The incursions are hard to detect and are on the upswing.
(By Richard Marosi)
They fly low and slow over the border, their wings painted
black and motors humming faintly under moonlit skies. The
pilots, some armed in the open cockpits, steer the horizontal
control bar with one hand and pull a latch with the other,
releasing 250-pound payloads that land with a thud, leaving
only craters as evidence of another successful smuggling run.
Mexican organized crime groups, increasingly stymied by
stepped-up enforcement on land, have dug tunnels and
captained boats to get drugs across the U.S.-Mexico border.
Now they are taking to the skies, using ultralight aircraft
that resemble motorized hang gliders to drop marijuana
bundles in agricultural fields and desert scrub across the
Southwest border.
What began with a few flights in Arizona in 2008 is now
common from Texas to California's Imperial Valley and, mostly
recently, San Diego, where at least two ultralights suspected
of carrying drugs have been detected flying over Interstate
8, according to U.S. border authorities.
The number of incursions by ultralights reached 228 in the
last federal fiscal year ending Sept. 30, almost double from
the previous year. Seventy-one have been detected in this
fiscal year through April, according to border authorities.
Flying at night with lights out, and zipping back across
the border in minutes, ultralight aircraft sightings are
rare, but often dramatic. At least two have been chased out
of Arizona skies by Black Hawk Customs and Border Protection
helicopters and F-16 jet fighters. Last month, a pair of
visiting British helicopter pilots almost crashed into an
ultralight during training exercises over the Imperial
Valley.
The smuggling work is fraught with danger. High winds can
flip the light aircraft. Moonlight provides illumination, but
some pilots wear night-vision goggles. Others fly over major
roads to orient themselves. Drop zones are illuminated by
ground crews using strobe lights or glow sticks. There is
little room for error.
At least one pilot has been paralyzed; another died in a
crash.
In Calexico, Det. Mario Salinas was walking to his car one
morning last year when he heard something buzzing over the
Police Department on 5th Street. ``I hear this weird noise,
like a lawn mower. I look up and I see this small plane,''
said Salinas, who pursued the aircraft before it eluded him
as it flew over the desert.
The ultralight activity is seen as strong evidence that
smugglers are having an increasingly difficult time getting
marijuana over land crossings. Authorities noticed a surge in
flights in Imperial County after newly erected fencing along
California's southeast corner blocked smugglers from crossing
desert dunes in all-terrain vehicles.
U.S. Border Patrol agents, accustomed to scouring for
footprints and tracks in the sand, have had to adapt. They
are now instructed to turn off their engines and roll
[[Page S5261]]
down their windows so they can listen for incursions by air.
``We're trained to look down and at the fence. Now we have
to look up for tell-tale signs of ultralight traffic,'' said
Roy D. Villarreal, deputy chief patrol agent of the El Centro
sector in the Imperial Valley.
Although the new trend poses serious challenges,
authorities point out that ultralights are a decidedly
inefficient way of getting drugs across the border.
Traffickers who once moved thousands of pounds of drugs
across the border now appear to be packing their loads by the
pound, not the ton, authorities say.
The ultralights--lightweight planes typically used as
recreational aircraft--are customized for smuggling purposes.
All-terrain wheels are added for bumpy landings. Second seats
are ripped out to add fuel capacity. Drugs are loaded onto
metal baskets affixed to the bottom of the framing. From 150
to 250 pounds of marijuana are generally carried, depending
on the weight of the pilot. Some ultralights are shrouded in
black paint, with even the plastic tarp covers for the
marijuana blackened for stealth entries.
Radar operators at Riverside County's Air and Marine
Operations Center, where general aviation air traffic across
the country is monitored, have trouble detecting the
aircraft.
Flying as low as 500 feet, their small frames are hard to
distinguish from trucks. Many appear, then disappear from
radar screens. Others never appear at all, and the ultralight
trend has prompted border authorities to develop new radar
technologies specifically designed to detect the aircraft.
``There are indications of larger amounts of activity,''
said Tony Crowder, director of the Air and Marine Operations
Center, which is housed at March Air Reserve Base.
The close cooperation among radar operators, helicopter
pilots and agents on the ground has resulted in some
successes.
Ultralight pilots no longer land on U.S. soil after
authorities began responding quickly to offloading sites. The
Mexican Army has seized four ultralights around Baja
California in recent weeks after being tipped off by U.S.
authorities.
______
By Mr. ROBERTS (for himself, Mr. Nelson of Florida, Mr. Crapo,
Mr. Wyden, Mr. Toomey, and Mr. Heller):
S. 1486. A bill to amend title XVIII of the Social Security Act to
clarify and expand on criteria applicable to patient admission to and
care furnished in long-term care hospitals participating in the
Medicare program, and for other purposes; to the Committee on Finance.
Mr. ROBERTS. Mr. President, I rise today to introduce the Long-Term
Care Hospital Improvement Act of 2011, with the support of my colleague
Mr. Nelson of Florida. This legislation develops new federal standards
and certification criteria for Long Term Acute Care Hospitals, LTCHs.
We are also joined by Senators Crapo, Wyden, Toomey and Heller, in
introducing this bill. We hope to get the support of many more of our
colleagues.
This legislation has the support of the major hospital associations,
including the American Hospital Association, AHA, the Federation of
American Hospitals, FAH, and the Acute Long Term Hospital Association,
ALTHA.
As many of you know, Long-Term Acute Care Hospitals, referred to as
LTCHs, specialize in treating medically complex patients who need
longer than usual hospital stays, on average 25 days. By comparison,
the average stay for a patient in a general acute hospital is only 5-6
days.
LTCHs, like rehabilitation hospitals and nursing homes, often care
for patients who are discharged from a general hospital. Because of
that, LTCHs are sometimes referred to as post-acute care providers.
However, LTCHs are fully licensed and certified as acute care
hospitals. There are approximately 425 LTCHs in the nation, compared to
approximately 12,000 nursing homes and 1,400 rehabilitation hospitals.
LTCH patients are very ill, with many suffering from complex
respiratory issues, including those who are ventilator dependent, or
other complex medical issues. LTCHs account for about of Medicare
spending.
The bill that I am introducing today implements a comprehensive set
of federal criteria that will supplement existing Medicare
classification criteria for LTCHs. These criteria are designed to
ensure that LTCHs are treating high acuity patients who need extended
hospital stays. Analysis by the Moran Company estimates that these
criteria could generate approximately $374 million over 5 years and
$2.7 billion over 10 years. The bill is expected to result in a net
savings of $500 million over 10 years. I plan to work with CBO to
confirm that estimate.
This legislation will generate savings for the Medicare program;
promote patients being cared for in the most appropriate setting; and,
protect access to LTCH care for medically acute beneficiaries who need
extended stays due to their complex condition.
This is not a new concept and the American Hospital Association has
been working on this issue for years. In August 2010, the AHA initiated
a workgroup representing a cross section of the nation' LTCHs and
larger general hospital systems including Geisinger Medical System,
Pennsylvania, and Partners HealthCare System, Inc., Boston. The goals
of the AHA workgroup were to develop policy recommendations for uniform
LTCH patient and facility criteria; distinguish LTCH hospitals from
general acute hospitals and all post-acute settings; assess fiscal
impact, with goal of showing overall Medicare savings; develop
consensus among AHA's LTCH members; and achieve relief from the LTCH
``25 percent Rule.''
We believe that we have accomplished these goals with my legislation.
Additionally, for a body that just voted on a debt ceiling increase,
this bill has the potential to achieve significant savings.
I hope that my colleagues will agree with me and that this
legislation is something that they can support. I urge my colleagues to
join me in cosponsoring the Long-Term Care Hospital Improvement Act of
2011.
______
By Mr. WYDEN:
S. 1491. A bill to amend the Public Utility Regulatory Policies Act
of 1978 to expand the electric rate-setting authority of States; to the
Committee on Energy and Natural Resources.
Mr. WYDEN. Mr. President, today I rise to introduce the PURPA PLUS
Act.
In my home State we have numerous emerging small renewable energy
technologies, such as wave energy buoys, hydropower turbines in
irrigation canals, biomass burning cogeneration facilities and rooftop
solar installations. Like Oregon, many States have sought to advance
new electricity technologies by providing these kinds of projects with
higher power purchase rates for their power than utility companies
normally pay for electricity. These incentive rates allow individuals
and small businesses to recover money they invest in solar panels or
other electricity generation projects over a reasonable period of time.
The PURPA PLUS Act simply provides States the clear legal authority
to set these incentive rates for small renewable energy projects.
Currently, the Federal Energy Regulatory Commission, FERC, has
exclusive jurisdiction over wholesale energy prices. Under the Public
Utility Regulatory Policies Act, PURPA, FERC regulates the price that
utility companies pay for electricity from small, independent power
providers and that rate can be no higher than what it would normally
cost a utility company to buy additional power, known as ``avoided
cost''. My bill would transfer the authority for setting power purchase
rates for small power projects of less than 2 megawatts from FERC to
the States. This transfer is voluntary. If a State chose to exercise
this authority to promote small wind energy development, or solar, or
cogeneration projects, it could. If a State chose not to use this
authority, FERC would continue to regulate these projects as before. By
capping the project size at 2 megawatts, the bill only extends this new
authority for small projects that are providing very small amounts of
power to the local utility company. It would leave regulation of large
wind farms, hydroprojects and other large renewable energy projects
that often sell their power to out-of-state customers unchanged.
Conversely, it shouldn't be necessary for the Federal Government to get
involved in setting rates for solar panels on top of a house or
apartment building.
At a time when both State legislatures and the Federal Government are
tightening their purse strings on grants, loans and tax incentives for
the development of renewable energy projects, this legislation would
give State public utility commissions another tool to promote small
renewable resources. In Oregon, the State legislature and State utility
commission have already established a pilot program to spur residential
rooftop solar projects.
[[Page S5262]]
Oregon's utility commission also has a program that allows net metering
of renewable customer-produced energy where customers are charged for
the extra energy they buy from the utility company minus the amount of
electricity produced themselves. This bill will simply provide these
programs stronger legal footing, and allow States to expand these sorts
of programs if they wish.
While I acknowledge that the power from these small projects may be
more expensive than a large central generation station powered by coal
or gas, I believe that States should be able to consider the associated
benefits of small renewable power and set higher prices when the
benefits outweigh the costs if they choose. Benefits of small renewable
energy projects include local job creation, less investment in high-
voltage transmission lines, diversity in an area's power generation
portfolio, and the environmental benefits of green energy.
The bill has the support of the National Association of Regulatory
Utility Commissioners, which represents the individual State
commissions, as well as the Solar Energy Industry Association, the
Distributed Wind Energy Association, the Clean Coalition and the Oregon
Public Utility Commission. I am very pleased to be introducing this
bill with my colleague on the Energy and Natural Resources Committee,
Senator Coons. I hope that many of our colleagues will join us in
supporting this bill.
______
By Mr. REID (for himself and Mr. Heller):
S. 1492. A bill to provide for the conveyance of certain Federal land
in Clark County, Nevada, for the environmental remediation and
reclamation of the Three Kids Mine Project Site, and for other
purposes; to the Committee on Energy and Natural Resources.
Mr. REID. Mr. President, I rise today to introduce the Three Kids
Mine Reclamation Act of 2011. My legislation transfers approximately
900 acres of federal land to the city of Henderson to facilitate the
remediation and redevelopment of a dangerous abandoned mine site near
Lake Mead.
The Three Kids mine was originally developed during World War I to
provide manganese needed to harden steel used by the U.S. military. The
mine and mill continued to support the building of warships and tanks
through 1961 after which it was mostly abandoned and used occasionally
as a storage site for federal manganese reserves. The Three Kids site
was forgotten for decades until the population explosion in southern
Nevada put the mine right in people's backyards.
The Three Kids Mine site is littered with hazards that include three
large mine pits that are hundreds of feet deep, ruins from the mine
facility, and a sludge pool of mine tailings made up of arsenic, lead,
and diesel fuel. As a result of how the mine was developed and managed,
approximately 75 percent of the area is federal land managed by the
Bureau of Land Management, BLM, and the Bureau of Reclamation, while
part of the site is privately owned. Unfortunately, because of the
complicated land ownership pattern and the immense cost of clean-up,
the Federal Government was never able to initiate the reclamation
process.
To turn the Three Kids Mine site into a job-creating opportunity
while also cleaning up this public health and safety hazard, my
legislation directs the BLM to convey the Federal portions of the site
to the Henderson Redevelopment Agency for the fair market value after
taking into consideration the cost of cleanup for the whole mine site.
The city of Henderson will then be able to take advantage of Nevada
redevelopment laws and work with local developers to finance and
implement a plan to remediate the abandoned toxic mine site. Local
officials and developers will finally be able to turn this wasteland
into safe, productive land for the local community. The project will
take decades from start to finish, but the city and the developers are
committed to the effort and worked hard to put together a viable plan
to fix this old problem without costing taxpayers a dime for cleanup.
Keeping our communities safe, healthy, and livable is critical.
Removing this physical and environmental hazard from southern Nevada is
a high priority for the city of Henderson and our delegation. I
appreciate your help and I look forward to working with the Senate
Energy Committee to move this legislation forward in the near future.
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. 1492
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 ``Three Kids Mine Remediation
and Reclamation Act''.
SEC. 2. DEFINITIONS.
In this Act:
(1) Federal land.--The term ``Federal land'' means the
approximately 948 acres of Bureau of Reclamation and Bureau
of Land Management land within the Three Kids Mine Project
site, as depicted on the map.
(2) Hazardous substance; pollutant or contaminant; release;
remedy; response.--The terms ``hazardous substance'',
``pollutant or contaminant'', ``release'', ``remedy'', and
``response'' have the meanings given those terms in section
101 of the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980 (42 U.S.C. 9601).
(3) Henderson redevelopment agency.--The term ``Henderson
Redevelopment Agency'' means the redevelopment agency of the
City of Henderson, Nevada, established and authorized to
transact business and exercise the powers of the agency in
accordance with the Nevada Community Redevelopment Law (Nev.
Rev. Stat. 279.382 to 279.685).
(4) Map.--The term ``map'' means the map entitled ``Three
Kids Mine Project Area'' and dated August 2, 2011.
(5) Secretary.--The term ``Secretary'' means the Secretary
of the Interior.
(6) State.--The term ``State'' means the State of Nevada.
(7) Three kids mine project site.--The term ``Three Kids
Mine Project Site'' means the approximately 1,262 acres of
land that is--
(A) comprised of--
(i) the Federal land; and
(ii) the approximately 314 acres of adjacent non-Federal
land; and
(B) depicted as the ``Three Kids Mine Project Site'' on the
map.
SEC. 3. LAND CONVEYANCE.
(a) In General.--Notwithstanding sections 202 and 203 of
the Federal Land Policy and Management Act of 1976 (43 U.S.C.
1712, 1713) and section 120 of the Comprehensive
Environmental Response, Compensation, and Liability Act of
1980 (42 U.S.C. 9620), and any other provision of law, as
soon as practicable after the conditions described in
subsection (b) have been met, and subject to valid existing
rights, the Secretary shall convey to the Henderson
Redevelopment Agency all right, title, and interest of the
United States in and to the Federal land.
(b) Conditions.--
(1) Appraisal; fair market value.--
(A) In general.--As consideration for the conveyance under
subsection (a), the Henderson Redevelopment Agency shall pay
the fair market value of the Federal land, if any, as
determined under subparagraph (B) and as adjusted under
subparagraph (E).
(B) Appraisal.--The Secretary shall determine the fair
market value of the Federal land based on an appraisal--
(i) that is conducted in accordance with nationally
recognized appraisal standards, including--
(I) the Uniform Appraisal Standards for Federal Land
Acquisitions; and
(II) the Uniform Standards of Professional Appraisal
Practice; and
(ii) that does not take into account any existing
contamination associated with historical mining on the
Federal land.
(C) Remediation and reclamation costs.--
(i) In general.--The Secretary shall prepare a reasonable
estimate of the costs to assess, remediate, and reclaim the
Three Kids Mine Project Site.
(ii) Considerations.--The estimate prepared under clause
(i) shall be--
(I) based on the results of a comprehensive Phase II
environmental site assessment of the Three Kids Mine Project
Site prepared by the Henderson Redevelopment Agency or a
designee that has been approved by the State; and
(II) prepared in accordance with the current version of the
ASTM International Standard E-2137-06 entitled ``Standard
Guide for Estimating Monetary Costs and Liabilities for
Environmental Matters.''
(iii) Assessment requirements.--The Phase II environmental
site assessment prepared under clause (ii)(I) shall, without
limiting any additional requirements that may be required by
the State, be conducted in accordance with the procedures
of--
(I) the most recent version of ASTM International Standard
E-1527-05 entitled ``Standard Practice for Environmental Site
Assessments: Phase I Environmental Site Assessment Process'';
and
(II) ASTM International Standard E-1903-97entitled
``Standard Guide for Environmental Site Assessments: Phase II
Environmental Site Assessment Process'' (2002).
(iv) Review of certain information.--
(I) In general.--The Secretary shall review and consider
cost information proffered
[[Page S5263]]
by the Henderson Redevelopment Agency and the State in the
preparation of the estimate under this subparagraph.
(II) Final determination.--If there is a disagreement among
the Secretary, Henderson Redevelopment Agency, and the State
over the reasonable estimate of costs under this
subparagraph, the parties shall jointly select 1 or more
experts to assist the Secretary in making the final estimate
of the costs.
(D) Deadline.--Not later than 30 days after the date of
enactment of this Act, the Secretary shall begin the
appraisal and cost estimates under subparagraphs (B) and (C),
respectively.
(E) Adjustment.--The Secretary shall administratively
adjust the fair market value of the Federal land, as
determined under subparagraph (B), based on the estimate of
remediation, and reclamation costs, as determined under
subparagraph (C).
(2) Mine remediation and reclamation agreement executed.--
(A) In general.--The conveyance under subsection (a) shall
be contingent on the Secretary receiving from the State
written notification that a mine remediation and reclamation
agreement has been executed in accordance with subparagraph
(B).
(B) Requirements.--The mine remediation and reclamation
agreement required under subparagraph (A) shall be an
enforceable consent order or agreement administered by the
State that--
(i) obligates a party to perform the remediation and
reclamation work at the Three Kids Mine Project Site
necessary to complete a permanent and appropriately
protective remedy to existing environmental contamination and
hazardous conditions; and
(ii) contains provisions determined to be necessary by the
State, including financial assurance provisions to ensure the
completion of the remedy.
(3) Notification from agency.--As a condition of the
conveyance under subsection (a), the Secretary shall receive
from the Henderson Redevelopment Agency written notification
that the Henderson Redevelopment Agency is prepared to accept
conveyance of the Federal land under that subsection.
SEC. 4. WITHDRAWAL.
(a) In General.--Subject to valid existing rights, for the
10-year period beginning on the earlier of the date of
enactment of this Act or the date of the conveyance required
by this Act, the Federal land is withdrawn from all forms
of--
(1) entry, appropriation, operation, or disposal under the
public land laws;
(2) location, entry, and patent under the mining laws; and
(3) disposition under the mineral leasing, mineral
materials, and the geothermal leasing laws.
(b) Existing Reclamation Withdrawals.--Subject to valid
existing rights, any withdrawal under the public land laws
that includes all or any portion of the Federal land for
which the Bureau of Reclamation has determined that the
Bureau of Reclamation has no further need under applicable
law is relinquished and revoked solely to the extent
necessary--
(1) to exclude from the withdrawal the property that is no
longer needed; and
(2) to allow for the immediate conveyance of the Federal
land as required under this Act.
SEC. 5. ACEC BOUNDARY ADJUSTMENT.
Notwithstanding section 203 of the Federal Land Policy and
Management Act of 1976 (43 U.S.C. 1713), the boundary of the
River Mountains Area of Critical Environmental Concern (NVN
76884) is adjusted to exclude any portion of the Three Kids
Mine Project Site consistent with the map.
SEC. 6. RELEASE OF THE UNITED STATES.
Upon making the conveyance under section 3, notwithstanding
any other provision of law, the United States is released
from any and all liabilities or claims of any kind or nature
arising from the presence, release, or threat of release of
any hazardous substance, pollutant, contaminant, petroleum
product (or derivative of a petroleum product of any kind),
solid waste, mine materials or mining-related features
(including tailings, overburden, waste rock, mill remnants,
pits, or other hazards resulting from the presence of mining
related features) at the Three Kids Mine Project Site in
existence on or before the date of the conveyance.
______
By Ms. MURKOWSKI:
S. 1495. A bill to amend the school dropout prevention program in the
Elementary and Secondary Education Act of 1965; to the Committee on
Health, Education, Labor, and Pensions.
Ms. MURKOWSKI. Mr. President, I rise today to introduce Early
Intervention for Graduation Success Authorization Act. This legislation
would, if enacted, amend the current School Dropout Prevention
provisions of the Elementary and Secondary Education Act. It would
focus attention on identifying and helping students who are at risk to
not graduate from high school as early as pre-kindergarten and through
elementary and middle school.
Some may ask, ``Why are you concentrating on toddlers and elementary
school children when you are trying to solve the high school dropout
crisis facing our Nation? Why not focus attention and our Nation's
scarce resources on high school students, or even middle school
students?''
The reason is simple. Early on is when children's troubles in school
begin, and an ounce of prevention is worth a pound of cure. High school
and middle school students do not just wake up one day and say, ``I
think I'll drop out of school today.'' Twenty-five years of research
tells us that dropping out is a long process of frustration,
alienation, and even boredom, it is not a sudden decision. We know that
students with disabilities, minority and poor children, and students
whose home lives are, in all sorts of ways, difficult have lower
graduation rates than their peers. The challenges children face today
are all too prevalent, and we know the factors that make it harder for
them to succeed in school. We know this.
It only makes sense that we re-work the program that is intended to
help schools increase their graduation rates so that it actually helps
schools help children when we can make the most difference. We need to
act before these children have fought for years just to stay afloat,
and before they are too tired, frustrated, alienated, and angry to
fight anymore.
Factors that have been shown to present a significant risk factor
even in elementary school include: low achievement, grade retention,
poor attendance, misbehavior and aggression, and low socioeconomic
status. Family background characteristics play a role as well, such as
family disruption, not living with parents, and parents' low
educational attainment. Even low birth weight has been shown by
numerous studies to be linked with poor educational outcomes.
My ``Early Intervention for Graduation Success'' bill would focus
Federal funds on states that have the lowest graduation rates. State
education agencies would be required to develop or update their plans
to increase graduation rates. They would also be required to work with
health, social services, juvenile justice, and other relevant state
agencies to help school districts and early childhood education
providers better identify which of their students have research-based
risk factors. In turn, schools and early learning providers would be
required to develop and update individual learning plans for these
students and ensure that the next school of enrollment has the child's
plan.
My bill also gives States and partnerships a menu of research-based
activities from which to choose to improve services to students,
including professional development, program quality improvement,
curriculum alignment, community integration and support services, and
setting high expectations for academic achievement.
In short, my bill helps States and schools to give students the
support they need to achieve their dreams, and inspires them to dream
big, right from the very start.
We can continue to spend millions of dollars every year on intensive
services for teenagers who are far behind in school, who are frustrated
beyond all measure, and who gave up on success long ago. We may even
have some limited success helping some young people get back on track
and graduate from high school. Or, we can start at the beginning,
making sure that the children who already have challenges get the help
they need to succeed.
I look forward to passage of this bill or incorporating it into the
reauthorization of the Elementary and Secondary Education Act.
______
By Ms. COLLINS (for herself, Mr. Lieberman, and Mr. Begich):
S. 1496. A bill to amend title 46, United States Code, to prohibit
the delegation by the United States of inspection, certification, and
related services to a foreign classification society that provides
comparable services to Iran, North Korea, North Sudan, or Syria, and
for other purposes; to the Committee on Commerce, Science, and
Transportation.
Ms. COLLINS. Mr. President, I rise to introduce the Ethical Shipping
Inspections Act of 2011. This bill would prohibit the Secretary of
Homeland Security and U.S. Coast Guard from delegating vessel
inspection and certification authority to a foreign-based
classification society that also provides these services on behalf of
the governments of Iran, North Korea, North Sudan, or Syria.
[[Page S5264]]
I am joined in the effort to close this critical loophole by my
colleagues, Senators Lieberman and Begich. With the introduction of the
Ethical Shipping Inspections Act of 2011, we seek to end U.S.
relationships with foreign-based classification societies that also
represent nations like the Islamic Republic of Iran.
Each year, non-governmental classification societies conduct more
than 4,500 statutory inspections of U.S. flagged vessels to verify that
these vessels meet international maritime conventions and national
regulatory requirements. World-wide, more than 100 governments have
established relationships with classification societies. In addition,
the vast majority of commercial ships are built to and surveyed for
compliance with the standards developed by classification societies.
The relationship between classification societies and the U.S.
Government was established in statute in the Merchant Marine Act of
1920, when the Secretary of the Department overseeing the U.S. Coast
Guard was granted the authority to delegate certain inspection and
certification services to the American Bureau of Shipping, ABS, or
another recognized Class Society. In 1996 Congress expanded this
program to allow foreign-based classification societies to also serve
on behalf of the U.S. Government in this capacity. Today, there are
four foreign-based classification societies that have established
Memorandums of Understanding with the U.S. Coast Guard to conduct these
inspections on the Coast Guard's behalf.
While this act would allow this relationship between the U.S.
Government and foreign-based classification societies to continue, it
would eliminate a loophole in the law that allows the foreign-based
classification societies that represent the United States to also
represent the governments of Iran, North Korea, North Sudan, or Syria.
Ironically, the current law provides more latitude to foreign-based
societies than we allow the American Bureau of Shipping. As a U.S.-
based non-profit, non-governmental organization, ABS is restricted from
providing such services in Iran under existing Iranian Transaction
Regulations. Yet, the Iran Sanctions Act of 1996, as amended by the
Comprehensive Iran Sanctions, Accountability, and Divestment Act of
2010, does not prevent foreign-based classification societies from
representing both the U.S. and Iranian governments.
With this in mind, my colleagues and I have introduced this
legislation to prohibit the U.S. from obtaining vessel inspection,
certification, and related services from a foreign-based class society
that also provides these services on behalf of the Iranian, North
Korean, North Sudanese, or Syrian governments. For the United States to
maintain such relationships runs directly contrary to the spirit of
United States policy.
It is important that we all understand the special nature of the
relationship between classification societies and our Government and
take action to ensure that our Government is represented by
classification societies in a manner befitting of our nation's values
and consistent with U.S. foreign policy. For these reasons, my
colleagues and I believe it is imperative that we amend the law to
prohibit this activity, and we urge our colleagues to support this
important 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. 1496
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 ``Ethical Shipping Inspections
Act of 2011''.
SEC. 2. LIMITATION ON DELEGATION OF INSPECTION,
CERTIFICATION, AND RELATED SERVICES.
Section 3316 of title 46, United States Code, is amended by
adding at the end the following new subsection:
``(e) The Secretary may not make a delegation, and shall
revoke an existing delegation made, to a foreign
classification society pursuant to subsection (b) or (d) to
provide inspection, certification, or related services if the
Secretary of State determines that the foreign classification
society provides comparable services--
``(1) in Iran, North Korea, North Sudan, or Syria; or
``(2) for the government of Iran, North Korea, North Sudan,
or Syria.''.
______
By Mr. AKAKA (for himself, Mr. Inouye, and Mr. Bingaman):
S. 1504. A bill to restore Medicaid eligibility for citizens of the
Freely Associated States; to the Committee on Finance.
Mr. AKAKA. Mr. President, I rise today to introduce the Medicaid
Restoration for Citizens of Freely Associated States Act of 2011. This
bill would reinstate eligibility for critical Federal health benefits
for citizens of certain Pacific Island nations who have been invited by
the Federal Government to live in the United States, but for whom the
costs of services have fallen to individual states, Hawaii in
particular. I would like to thank Senators Inouye and Bingaman for
joining me in introducing this bill.
The Freely Associated States, the Republic of the Marshall Islands,
the Federated States of Micronesia, and the Republic of Palau, are
island nations that have a unique political relationship with the
United States.
At the end of World War II, the United Nations established the
``Trust Territory of the Pacific Islands,'' which was administered by
the United States between 1947 and 1986. It included the islands that
now make up the FAS nations, as well as other Pacific islands liberated
from Japan after World War II.
This U.S. Trusteeship presented the Federal Government with new
strategic and military opportunities, allowing the United States to
establish military bases and station forces in the Trust Territory and
close off areas for security reasons. It also bestowed upon the United
States the responsibility to promote economic development and self-
reliance for the territory.
In the 1980s, the United States entered into a new phase in its
relationship with the FAS through the Compact of Free Association and
the Palau Compact of Free Association. The Compacts allow FAS citizens
to freely enter, reside, and work in the United States and authorize
their participation in certain Federal programs.
As a part of the Compacts, FAS citizens were extended Medicaid
eligibility.
Unfortunately, when the Personal Responsibility and Work Opportunity
Act of 1996 was enacted, FAS citizens lost many of their public
benefits, including Medicaid coverage.
Subsequently, state and territorial governments have been the sole
sources of funding for meeting the social service and public health
needs of this ever growing population. And FAS migrants to Hawaii often
arrive with serious medical needs, requiring costly health care
services such as dialysis and chemotherapy.
These costs will continue to rise, even as the State's resources are
increasingly constrained.
Restoration of Medicaid eligibility for these individuals is crucial
for states where many FAS citizens reside. In the Pacific, this
includes Hawaii, Guam, and the Northern Mariana Islands.
In the continental U.S., this includes California, Oregon,
Washington, and Arkansas. Health care providers that operate in areas
with high rates of uninsured are having difficulties meeting the health
care needs of their communities. Uninsured FAS citizens who seek health
care services contribute to the uncompensated costs that are creating
an ever-greater burden on health care providers.
I ask my colleagues for their support of the Medicaid Restoration for
Citizens of Freely Associated States Act of 2011. The decision to allow
citizens of the Freely Associated States to come to the United States
was a federal decision, with national benefits.
That we also accept the cost of that decision is a matter of fairness
and responsibility.
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. 1504
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 ``Medicaid Restoration for
Citizens of Freely Associated States Act of 2011''.
[[Page S5265]]
SEC. 2. MEDICAID ELIGIBILITY FOR CITIZENS OF FREELY
ASSOCIATED STATES.
(a) In General.--Section 402(b)(2) of the Personal
Responsibility and Work Opportunity Reconciliation Act of
1996 (8 U.S.C. 1612(b)(2)) is amended by adding at the end
the following:
``(G) Medicaid exception for citizens of freely associated
states.--With respect to eligibility for benefits for the
program defined in paragraph (3)(C) (relating to medicaid),
paragraph (1) shall not apply to any individual who lawfully
resides in the United States (including territories and
possessions of the United States) in accordance with--
``(i) section 141 of the Compact of Free Association
between the Government of the United States and the
Government of the Federated States of Micronesia, approved by
Congress in the Compact of Free Association Amendments Act of
2003;
``(ii) section 141 of the Compact of Free Association
between the Government of the United States and the
Government of the Republic of the Marshall Islands, approved
by Congress in the Compact of Free Association Amendments Act
of 2003; or
``(iii) section 141 of the Compact of Free Association
between the Government of the United States and the
Government of Palau, approved by Congress in Public Law 99-
658 (100 Stat. 3672).''.
(b) Exception to 5-Year Limited Eligibility.--Section
403(d) of such Act (8 U.S.C. 1613(d)) is amended--
(1) in paragraph (1), by striking ``or'' at the end;
(2) in paragraph (2), by striking the period at the end and
inserting ``; or''; and
(3) by adding at the end the following new paragraph:
``(3) an individual described in section 402(b)(2)(G), but
only with respect to the designated Federal program defined
in section 402(b)(3)(C).''.
(c) Definition of Qualified Alien.--Section 431(b) of the
Personal Responsibility and Work Opportunity Reconciliation
Act of 1996 (8 U.S.C. 1641(b)) is amended--
(1) in paragraph (6), by striking ``or'' at the end;
(2) in paragraph (7), by striking the period at the end and
inserting ``; or''; and
(3) by adding at the end the following:
``(8) an individual who lawfully resides in the United
States (including territories and possessions of the United
States) in accordance with a Compact of Free Association
referred to in section 402(b)(2)(G).''.
(d) Conforming Amendments.--Section 1108 of the Social
Security Act (42 U.S.C. 1308) is amended--
(1) in subsection (f), in the matter preceding paragraph
(1), by striking ``subsection (g)'' and inserting
``subsections (g) and (h)''; and
(2) by adding at the end the following:
``(h) The limitations of subsections (f) and (g) shall not
apply with respect to medical assistance provided to an
individual described in section 431(b)(8) of the Personal
Responsibility and Work Opportunity Reconciliation Act of
1996.''.
(e) Effective Date.--The amendments made by this section
take effect on the date of enactment of this Act and apply to
benefits for items and services furnished on or after that
date.
______
By Mr. HATCH (for himself, Mr. Burr, Mr. McCain, and Mr. Graham):
S. 1507. A bill to provide protections from workers with respect to
their right to select or refrain from selecting representation by a
labor organization; to the Committee on Health, Education, Labor, and
Pensions.
Mr. HATCH. Mr. President, today I have introduced the Employee Rights
Act, a comprehensive workers' rights bill that would address many
issues plaguing America's workers.
Our Nation's labor laws were designed to preserve the rights of
employees to join labor unions and engage in collective bargaining.
Contrary to what some may think, I am not anti-union and I do not want
to stand in the way of unionization if the decision to unionize is
truly the will of the employees. However, I believe that the right not
to join a union is equally important. It is this right that far too
often goes overlooked under our current laws, and particularly under
policies implemented by unelected bureaucrats at various administrative
agencies.
I am under no illusions that this legislation will be
noncontroversial. There will most certainly be opposition. Indeed, I
fully expect the unions and their supporters to come out against the
Employee Rights Act, and characterize it as a radical, anti-union bill.
But, that just isn't the case. There is not a single provision in
this bill that will empower employers at the expense of the union. The
only parties whose position will be improved by the Employee Rights Act
are employees. Anyone whose real concern is preserving the rights of
individual workers should support this bill.
Let me take a few minutes to go over the specific provisions.
First, the bill would conform and equalize unfair labor practices by
unions with those of employers under the National Labor Relations Act.
Currently, under Section 8 of the NLRA, employers face penalties if
they ``interfere with, restrain, or coerce employees'' in the exercise
of their rights under the Act. The same section punishes labor
organizations only if they ``restrain or coerce'' employees in the
exercise of those same rights.
There is no reasonable or logical justification for this difference,
and workers should have the benefit of equal protection against abuse
from both sides. That is why, under the Employee Rights Act, both sides
will be held to the higher standard.
Next, my bill would ensure that employees are guaranteed a right to a
federally supervised, secret ballot vote before a union can be
certified. According to the NLRB, 38 percent of all unions certified in
2009 did not have to go through a secret ballot election. Instead,
these unions were able to use card checks to unionize employees. True
enough, in such cases, employers voluntarily opted to recognize the
union without demanding a secret ballot election. But what about the
workers who wanted a secret ballot vote?
There is, of course, a long-standing debate over the integrity and
appropriateness of card check elections. But even the most committed
union supporter must admit that the card check process is unregulated
and less reliable than a secret ballot vote. Indeed, that's exactly why
the unions prefer it. Anyone who claims otherwise is either lacking in
common sense, on a union's payroll, or both.
We have all heard the accounts of unions obtaining signatures through
deception and intimidation. And, we've all heard about union organizing
campaigns and boycotts that have all but forced employers to give up
their right to demand a secret ballot vote. Well, Mr. President, under
the Employee Rights Act, that right will belong to the employees, and
it will be guaranteed.
For the record, the American people agree with me on this issue.
Earlier this year, the Opinion Research Corporation conducted a poll of
1,000 adults that addressed a number of these issues. All told, 75
percent--three out of every four--were somewhere between strongly
supportive and somewhat supportive of a rule requiring that all
employees be given the right to a secret ballot election when deciding
whether to join a union.
There is no way around it. If you are pro-worker, and not just pro-
union, you have to support the right to a secret ballot.
Next, my bill would require every unionized workplace to conduct a
secret ballot election every three years to determine whether a
majority of employees still want to be represented by the union.
According to the Bureau of Labor Statistics, less than 10 percent of
current union members voted for the union at their workplace. Most
union members simply took jobs at sites that were already unionized,
many of which require union membership as a condition of employment.
Under current law, if any of these employees want to decertify a
union, they must go through an arduous process. It is a nearly
impossible task. In addition to overcoming the many procedural hurdles
provided by laws and regulations, they are required to speak out
publicly against the union and subject themselves to public criticism,
if not outright intimidation. Not surprisingly, very few even make the
effort.
As a result, millions of American workers belong to unions they never
voted for and will never get to vote for. No one who claims to support
the rights of workers can argue that this is a good thing. Every
citizen is guaranteed an opportunity to vote out their representatives
in State, local, and Federal Government. Yet, a union, once certified,
is in place for perpetuity. This just shouldn't be the case.
Once again, I am not alone in my thinking. In the same survey I cited
earlier, 75 percent, again, 3/4 of those polled, supported a change
that would require unions to be periodically recertified.
This proposal is not outlandish or punitive. It is simply common
sense. It is fair to both employers and unions, and,
[[Page S5266]]
far more importantly, it is fair to workers.
Another provision of the bill would put a stop to the NLRB's current
proposal to shorten the required length of time between the filing of a
union certification petition and an election, commonly referred to as
the quickie or snap election proposal.
With this proposed rule, which is set to be finalized later this
year, the pro-union NLRB hopes to help unions catch unwitting employers
unprepared. Although there is no specific timeline in the proposal,
experts have concluded that, if the regulation is finalized, union
elections could occur within 7 days of a union filing a petition. Even
worse, the proposal would eliminate many of the pre-election
opportunities to appeal the petition and to resolve fundamental issues,
like the size and scope of the bargaining unit.
There is no need for this new rule. According to the NLRB, the
average time between the filing of a petition and an election is 39
days. This gives both the union and the employer an opportunity to
communicate their perspective on union membership to employees and
ensures that workers are able to make informed decisions.
Though the current rule is eminently reasonable and appears to be
working well for everyone, including the unions who already win the
majority of elections, the Obama Administration can't risk losing the
support of Big Labor. Richard Trumka, President of the AFL-CIO,
recently remarked that this and other similar so-called reforms are
effectively consolation prizes for the Democrats' loss in the fight to
pass the deceptively-named Employee Free Choice Act.
Indeed, the Obama administration, for obvious reasons, has
consistently been all too eager to stack the deck in favor of the
unions. Since they haven't been able to do it through the legislative
process, they're trying to do so via regulation.
Sadly, employees are caught in the middle. The NLRB doesn't care if
they have enough time to consider all their options. They simply want
to make sure the unions win more elections. To combat this, the
Employee Rights Act would preserve substantive and procedural
protections in the election process and ensure that workers have an
opportunity to make informed decisions.
The bill would also prevent a union from ordering a strike or work
stoppage unless it obtains the consent of a majority of the affected
workforce through a secret ballot vote.
This is important because the rules governing when and how a union
can order a strike are not uniform. They are determined by each union's
constitution. There is no federal rule whatsoever requiring that unions
obtain majority support before they can force members into unemployment
and possible replacement.
Many would be surprised to learn that union strike funds, kept to
provide financial assistance for striking union members, rarely pay
more than 20 percent of an employee's salary during a work stoppage.
And, more often than not, a member cannot receive any compensation for
lost wages unless they participate on a picket line.
Isn't it only fair to give workers an opportunity to weigh in before
a union orders a strike? Most people seem to think so. According to the
same poll I mentioned earlier, 74 percent of Americans support this
proposal.
Another provision of the Employee Rights Act would prevent an
employee's union dues or fees from being used for purposes unrelated to
the union's collective bargaining functions--including political
contributions and expenditures--without that member's written consent.
Exit polls have shown that America's union members are almost evenly
split between Democrats and Republicans, yet more than 90 percent of
union political contributions go to Democrats. This is, not to put too
fine a point on it, the reason why I expect strong opposition to this
bill.
However I would like anyone who would oppose this provision to
explain to me why it is fair to force workers to contribute to
political campaigns at all, regardless of the party on the receiving
end. Once again, the only people who would object to empowering
individual workers in this way are those who have a vested interest in
the status quo.
When asked about this issue, 78 percent of those polled agreed with
this idea.
The Employee Rights Act would do several more things. It would make
unions liable for lost wages, unlawfully collected union dues, and even
liquidated damages if they coerce, intimidate, or discipline workers
for exercising their rights under the NLRA, including the right to file
a decertification petition. Any union found to have unlawfully
interfered with the filing of a decertification petition would be
barred from filing objections to the subsequent decertification vote.
The bill would also strengthen prohibitions on the use or threat of
violence to achieve union goals, overturning an egregious Supreme Court
decision that all but exempted unions from Federal racketeering
statutes.
It would allow all affected workers, union and non-union alike, the
same rights as union members to vote to ratify a collective bargaining
agreement or to begin a strike.
These are not outlandish proposals. They would simply introduce some
long-overdue common sense into our labor laws. Not surprisingly, polls
have demonstrated that each of these ideas has broad support among the
public.
We have had many fierce debates in this chamber about the role of
labor unions in our nation's economy. In fact, I have been on the floor
several times in the last week decrying the steps taken by the Obama
Administration when it comes to helping out Big Labor.
But truthfully, I'm not interested in stopping unions from organizing
or preventing collective bargaining. I simply want to protect the
rights of individual workers and ensure that, if they do opt for union
representation, that choice is freely made and fairly determined.
For too long, American workers have been treated by union leaders as
little more than human ATMs. They claim to be progressives, supportive
of equality and democracy and the working man. This bill is consistent
with those principles, providing working men and women with a real and
meaningful voice in decisions regarding unionization. It is supported
by the National Right to Work Committee, and I am proud to have
Congressman Tim Scott of South Carolina introducing companion
legislation in the House.
I urge all of my colleagues to support the Employee Rights Act.
______
By Mr. WYDEN:
S. 1509. A bill to provide incentives for States to improve the well-
being of children in the child welfare system through systemic reforms
and innovations, increased collaboration between State agencies, and
incorporation of higher standards of accountability; to the Committee
on Finance.
Mr. WYDEN. Mr. President, I am pleased today to introduce the
Promoting Accountability and Excellence in Child Welfare Act, a bill
that would pave the way for new innovations that improve the lives and
well-being of vulnerable children and their families.
The Federal government spends roughly ten times as much money on
foster care as it does on preventative services, when foster care is,
in nearly every case, the worst possible outcome for a child. The
Promoting Accountability and Excellence in Child Welfare Act would
establish a 5-year grant program to give States and localities greater
flexibility to implement comprehensive reforms to existing child
welfare programs provided they can demonstrate success in improving
child well-being. This flexibility would allow States to use early-
intervention techniques to prevent youth from entering foster care,
heightened reunification or adoption practices to decrease a child's
time in care, and strengthened support services to ensure that children
and youth do not fall behind their peers while they remain in foster
care. Importantly, this act establishes strong performance measures
that allow successful practices to serve as scalable models.
Children and families that come into contact with the child welfare
system are often served through multiple local, State, and Federal
agencies including the Department of Health and Human Services, the
Department of Justice, the Department of Education, the Department of
Labor and the Department of Housing and Urban Development. Too often,
these agencies operate in silos, with the effects playing
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out at the State, local, and even individual level. This act promotes
collaboration by requiring an inter-agency working group to identify
existing Federal resources and streamline them to reduce duplication
and allow grantees to access additional services and funding streams.
States and localities have proven their ability to save money through
innovation while also working to promote the best interest of children
and families and the Federal government often turns to state best
practices to improve national laws. The history of subsidized
guardianship serves as one such example. Due to an all-time high in the
number of children in State foster care, in 1996 Illinois was granted
the authority to allow grandparents, aunts, uncles and other adult
relatives to receive Federal foster care payments if they opened their
homes permanently to their relative children in foster care. Raising a
child is expensive and these modest payments gave relatives the
financial means to care for their kin.
Allowing children and youth to remain with relatives is not only a
compassionate way to prevent unnecessary disruptions in a child's life
and keep families together, it also saves money. The Illinois
demonstration proved that children and youth did better living with
relative caregivers than they did when they remained in foster care. In
addition, offering guardianship assistance to relatives actually
increased the odds that they would be adopted. Due to the success of
kinship care in Illinois and other States, the Federal government now
realizes a cost savings by reimbursing States for a portion of the cost
of offering guardianship assistance. The Promoting Accountability and
Excellence in Child Welfare Act would further enable such innovations
and savings while improving child well-being.
Furthermore, the legislation directs the Secretary of Health and
Human Services to report to Congress with recommendations on how to
update Federal foster care financing. Under current law, eligibility
for Federal foster care assistance remains tied to the obsolete AFDC
program, meaning each year fewer children in foster care are eligible
for Federal funding. As a result, States are required to take on an
ever-increasing share of foster care financing. This structure forces
States to compensate by drawing funds from other programs such as
Temporary Assistance to Needy Families, TANF, and the Social Security
Block Grant, SSBG, to provide for children in care.
As a country, we cannot afford to let children fall through the
cracks of the many systems that exist to serve them. By targeting our
resources, improving collaboration, spurring innovation, and, above
all, holding ourselves accountable, we can systemically serve the best
interest of at-risk children, their families and communities, and the
Nation as a whole.
____________________