[Congressional Record Volume 159, Number 14 (Thursday, January 31, 2013)]
[Senate]
[Pages S439-S445]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. COONS (for himself, Mr. Enzi, Mr. Schumer, Mr. Rubio, Mr. 
        Blunt, Ms. Stabenow, and Mr. Moran):
  S. 193. A bill to amend the Internal Revenue Code of 1986 to provide 
for startup businesses to use a portion of the research and development 
credit to offset payroll taxes; to the Committee on Finance.
  Mr. COONS. Mr. President, each and every day the folks I represent in 
Delaware ask me why doesn't the Senate, why doesn't the Congress focus 
on jobs and focus on getting our economy moving again instead of what 
seem to be endless partisan struggles over secondary issues.
  What I wanted to speak to was a bipartisan bill, which I am 
introducing, which focuses on how to help create innovation-focused 
jobs again in the United States.
  As you know all too well, our economic recovery has been slower than 
we had hoped. Although it has been steady, there are still far too many 
Americans out of work in my home State of Delaware, more than 30,000, 
but we are building our way back.
  The task before us is to think not just about an immediate economic 
crisis but to take a breath and, instead, focus strategically on the 
long-term future, to take account of what kind of an economy we want to 
build for our children and our grandchildren for the America of today 
and tomorrow.
  The engine of our Nation's greatest economic successes has always 
been innovation. From the light bulb to the search engine, American 
inventors and innovators, those who have taken risks and started 
companies, have created jobs by the thousands and changed lives by the 
millions. Before new ideas scaled to market and reach out to change the 
world, they first have to start in a lab or garage.
  I know from my own 8 years in the private sector, my work for a 
materials-based science company in Delaware, the products we take for 
granted that are today household items in the world marketplace, often 
started as just the sliver of an idea, an idea that

[[Page S440]]

needed refining through determined investment in research and 
development.
  If we want to fuel the next generation of innovation, if we want to 
lay a strong foundation for job creation through invention, I think we 
have to start by supporting research and development. Research and 
development is the lifeblood of great American companies and is what 
will allow us to make things in this country and to be a leading 
manufacturer in the world and deserves focused investment.
  If we look at it, nearly 70 percent of America's private sector R&D 
and about 90 percent our patents are actually in manufacturing, a 
sector that deserves particular attention. Revitalizing American 
manufacturing will create high-quality, middle-class jobs for the long 
run, but doing so depends on our ability to take great ideas and turn 
them into marketable products or improvements in manufacturing 
processes that can and will result in things being made right here in 
America. Startups and small businesses all across this country are 
already taking chances to do just that, and I think it is time for all 
of us in Congress to take a chance on them.
  Last year, I worked in a bipartisan way with Senator Enzi, Senator 
Rubio, Senator Schumer, and others to introduce a bill that would make 
startup companies eligible for the existing research and development or 
R&D tax credit. I am proud to reintroduce that legislation as the 
Startup Innovation Credit Act of 2013 with our original cosponsors, as 
well as Senator Blunt, Senator Stabenow, and Senator Moran.
  This broad bipartisan support suggests a bill whose time has come. 
Although we represent, among the cosponsors, very different parts of 
our country, very different backgrounds, all of us know that to 
strengthen our economy we have to support innovation and 
entrepreneurship. Each of us is committed to fostering the kind of 
environment which supports the private sector and which turns ideas 
into innovations, innovations into products, and products into 
companies that help create good jobs.
  Under current policy, one way we do that federally is by supporting 
research and development through the existing R&D tax credit. Companies 
that invest in R&D generate new products, which sparks new industries 
with spillover benefits for all kinds of sectors. That is why there has 
long been strong bipartisan support for the existing R&D tax credit. By 
all accounts it is working. The R&D has helped tens of thousands of 
American companies succeed and create jobs.
  But there is a critical gap in the existing R&D credit. It isn't 
available to startups because they are not yet profitable, and thus 
they don't have an income tax liability against which to take a credit. 
In fact, more than half the R&D credit last year was taken by companies 
with revenue over $1 billion, well-established, profitable companies. 
There is nothing wrong with that; it is just not targeting these tax 
expenditures toward the sector of our economy that is taking the 
greatest risk and in some ways has the greatest potential.
  This gaping hole in our policy around R&D can be fixed with a 
relatively simple tweak. I have been working on finding this solution 
since I first came here. In fact, the very first bill I introduced 
included an expanded version of the R&D credit.
  Today, we take another step toward seeing this solution implemented 
with the reintroduction of this bipartisan Startup Innovation Credit 
Act. It says in order to spur research and development, we should allow 
companies to claim the R&D tax credit against their employment taxes, 
against their W-2 instead of their income tax liability. That opens 
this credit to new companies that don't yet have an income tax 
liability.
  There lots of companies we could choose. Let me pick one example, 
DeNovix, a small company based in my home State of Delaware that is 
developing instrumentation for bioresearch with a team that includes 
molecular biologists and engineering professionals.
  The managing director of DeNovix, Fred Kielhorn, said the legislation 
we are introducing would help that company to offset some of the costs 
of bringing new, innovative, technology-based products to market and 
for that this bill earned his strong support.
  He is just one of many. There is a remarkable list of outside groups, 
companies, and organizations that have supported it. I will mention a 
few: Silicon Valley Leadership Group; Revolution, led by Steve Case of 
AOL; Delaware Chamber of Commerce; the Association for Manufacturing 
Technology Policy; American Small Manufacturers Coalition; and BIO, a 
national organization that supports companies doing research and 
development in the biotechnology space.
  Supporting small innovative companies in critical early stages of 
research and development, in my view could unleash untold innovations 
for growth and create new jobs for America. At its heart, today's 
legislation is a jobs bill.
  Between 1980 and 2005, all net new jobs created in the United States 
were created by firms 5 years old or less, all of them, about 40 
million jobs over those 25 years. This credit is specifically designed 
toward those new, young, risk-taking firms. It does not pick winners 
and losers, it doesn't focus on a specific area of the economy or 
technology, but instead supports all private sector investments, 
judgments, and decisions that prioritize investment in research and 
development. Cash in the pocket of small startup companies, such as 
this tax credit, can make a real difference, especially with financing 
and credit so hard to come by.
  It was once said the States are the laboratory of democracy. In fact, 
that is where this idea has come from. Credits just like this have been 
done before in Iowa, Arizona, New York, Connecticut, Pennsylvania, and 
they have been game changers, helping companies get off the ground and 
keep their doors open during those demanding first years where they 
invest and spend so much on hiring and growth.
  We know this can work. We also know more than half our current 
Fortune 500 companies were launched during a recession or a bear 
market. The next great American company that may redefine whole 
categories that may be known worldwide for its products, its services, 
may be starting right now in a garage or lab somewhere in this great 
country. It is an exciting prospect.
  In fact, we are depending on our inventors, our innovators, and our 
small business owners to help innovate our way to a stronger economy 
and fuel a new generation of job creation. Let's give them the support 
they need and they deserve at a time when they need it the most.
  I am grateful for all the cosponsors of this bipartisan legislation 
in this Chamber and as well to Congressman Gerlach of Pennsylvania and 
Congressman Kind of Wisconsin, who will introduce the House version of 
this legislation next week.
  Rather than shutting our startups out of the R&D tax credit, let's 
open the doors to these innovators and see what they can do. I am 
confident they will surprise us yet again with how high they can reach 
and how far they can go. I think this is a wise investment in opening 
the doors of innovation, invention, and job creation for our future.
                                 ______
                                 
      By Mr. DURBIN (for himself, Mr. Lautenberg, and Mr. Blumenthal):
  S. 194. A bill to amend the Internal Revenue Code of 1986 to provide 
tax rate parity among all tobacco products, and for other purposes; to 
the Committee on Finance.
  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. 194

       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 ``Tobacco Tax Equity Act of 
     2013''.

     SEC. 2. ESTABLISHING EXCISE TAX EQUITY AMONG ALL TOBACCO 
                   PRODUCT TAX RATES.

       (a) Tax Parity for Pipe Tobacco and Roll-Your-Own 
     Tobacco.--Section 5701(f) of the Internal Revenue Code of 
     1986 is amended by striking ``$2.8311 cents'' and inserting 
     ``$24.78''.
       (b) Tax Parity for Smokeless Tobacco.--
       (1) Section 5701(e) of the Internal Revenue Code of 1986 is 
     amended--
       (A) in paragraph (1), by striking ``$1.51'' and inserting 
     ``$13.42'';

[[Page S441]]

       (B) in paragraph (2), by striking ``50.33 cents'' and 
     inserting ``$5.37''; and
       (C) by adding at the end the following:
       ``(3) Smokeless tobacco sold in discrete single-use 
     units.--On discrete single-use units, $50.33 per thousand.''.
       (2) Section 5702(m) of such Code is amended--
       (A) in paragraph (1), by striking ``or chewing tobacco'' 
     and inserting ``chewing tobacco, or discrete single-use 
     unit'';
       (B) in paragraphs (2) and (3), by inserting ``that is not a 
     discrete single-use unit'' before the period in each such 
     paragraph;
       (C) by adding at the end the following:
       ``(4) Discrete single-use unit.--The term `discrete single-
     use unit' means any product containing tobacco that--
       ``(A) is not intended to be smoked; and
       ``(B) is in the form of a lozenge, tablet, pill, pouch, 
     dissolvable strip, or other discrete single-use or single-
     dose unit.''.
       (c) Tax Parity for Large Cigars.--Paragraph (2) of section 
     5701(a) of the Internal Revenue Code of 1986 is amended by 
     striking ``but not more than 40.26 cents per cigar'' and 
     inserting ``but not less than 5.033 cents per cigar and not 
     more than 100.66 cents per cigar''.
       (d) Tax Parity for Roll-Your-Own Tobacco and Certain 
     Processed Tobacco.--Subsection (o) of section 5702 of the 
     Internal Revenue Code of 1986 is amended by inserting ``, or 
     processed tobacco removed or transferred to a person other 
     than a person with a permit provided under section 5713'' 
     after ``wrappers thereof''.
       (e) Clarifying Tobacco Product Definition and Tax Rate.--
       (1) In general.--Subsection (c) of section 5702 of the 
     Internal Revenue Code of 1986 is amended to read as follows:
       ``(c) Tobacco Products.--The term `tobacco products' 
     means--
       ``(1) cigars, cigarettes, smokeless tobacco, pipe tobacco, 
     and roll-your-own tobacco, and
       ``(2) any other product containing tobacco that is intended 
     or expected to be consumed.''.
       (2) Tax rate.--Section 5701 of the Internal Revenue Code of 
     1986 is amended by adding at the end the following new 
     subsection:
       ``(i) Other Tobacco Products.--Any product described in 
     section 5702(c)(2) or not otherwise described under this 
     section, including any product that has been determined to be 
     a tobacco product by the Food and Drug Administration through 
     its authorities under the Family Smoking Prevention and 
     Tobacco Control Act, shall be taxed at a level of tax 
     equivalent to the tax rate for cigarettes on an estimated per 
     use basis as determined by the Secretary.''.
       (f) Effective Dates.--
       (1) In general.--Except as provided in paragraph (2), the 
     amendments made by this section shall apply to articles 
     removed (as defined in section 5702(j) of the Internal 
     Revenue Code of 1986) after the last day of the month which 
     includes the date of the enactment of this Act.
       (2) Discrete single-use units and processed tobacco.--The 
     amendments made by subsections (b)(1)(C), (b)(2), and (d) 
     shall apply to articles removed (as defined in section 
     5702(j) of the Internal Revenue Code of 1986) after the date 
     that is 6 months after the date of the enactment of this Act.
                                 ______
                                 
      By Mrs. FEINSTEIN (for herself and Mrs. Boxer):
  S. 197. A bill to authorize improvements to flood damage reduction 
facilities adjacent to the American and Sacramento Rivers near 
Sacramento, California, and for other purposes; to the Committee on 
Environment and Public Works.
  Mrs. FEINSTEIN. Mr. President, I rise today to reintroduce the 
Natomas Basin Flood Protection Improvements Act of 2013.
  This legislation authorizes the U.S. Army Corps of Engineers to 
improve the flood control infrastructure in the Sacramento area. The 
improvements will safeguard hundreds of thousands of homes and 
businesses.
  There is a pressing need to improve levees in Sacramento.
  The Army Corps perpetually cites the city as one of our nation's most 
at-risk for severe flooding. A quick review of the Corps' National 
Levee Database will tell you why. Of the nearly 300 miles of levees 
within 10 miles of Sacramento the Corps has deemed 94 miles of levees, 
or 32 percent, ``unacceptable.'' An unacceptable designation means the 
levee is deficient to the point where it does not provide the 
protection it is supposed to.
  The Corps has deemed 29 miles of levees, only 10 percent, ``minimally 
acceptable.''
  The Corps has yet to even review the remaining 172 miles, 58 percent.
  None of the 300 miles of levees within 10 miles of Sacramento 
received the passing grade of ``acceptable.''
  But even in this high-risk city, there are priority areas. And the 
Natomas basin, which lies between the American and Sacramento rivers, 
is the top priority for Sacramento flood control.
  More than 100,000 people in the Natomas flood plain are at high or 
moderate risk of flooding.
  The vast majority of these homes would be inundated with more than 10 
feet of water should a levee break.
  In some places, inundation levels would exceed 20 feet.
  The risks are clear. The Army Corps of Engineers estimates the damage 
from a single flood could top $7 billion.
  Recognizing the need to upgrade the Natomas levees, the Corps of 
Engineers completed a Chief's Report in December 2010 that identified 
$1.1 billion in essential levee improvements.
  According to the report, the principal levee modifications include 
the widening of 41.9 miles of existing levees; installation of about 
34.8 miles of soil bentonite cutoff wall; installation of 8.3 miles of 
seepage berms, and bridge remediation on State Route 99.
  In addition, the report recommends the creation of 75 acres of canal 
habitat, 200 acres of marsh habitat, and 60 acres of woodland habitat 
to ensure the project complies with the Endangered Species Act.
  The cost of these improvements will be significant, but the burden 
will be shared.
  Understanding the urgency of this work, the Sacramento Area Flood 
Control Agency, SAFCA, and the California Department of Water Resources 
have begun work on the levee. They have invested more than $400 million 
in the Natomas Basin project, far more than their share, and completed 
about 18 miles of the basin's 42 miles of levees.
  I want to recognize SAFCA and the people of Sacramento for this good 
work. They have done the right thing, moving ahead before the federal 
authorization, because people's lives and property are in danger.
  I am proud to say the people of Sacramento have really stepped up and 
contributed. On two occasions county voters approved special tax 
assessments to begin paying for the repairs on the levee system, first 
in 2007 and again in 2011.
  The most recent assessment passed overwhelmingly with 84.5 percent of 
voters supporting the measure.
  This kind of local commitment should be a model for the Nation. When 
such major vulnerabilities exist that threaten a community, it is 
imperative to act quickly.
  If the Sacramento levees fail, the results will be devastating 
Sacramento International Airport, which serves 4.4 million passengers 
per year and is the primary air-cargo hub for the region, will be 
largely underwater.
  Interstate 5, Interstate 80 and State Route 99 will be closed or 
restricted. These roads serve as freight arteries and facilitate the 
passage of more than 2,500 trucks per day.
  Access to the Port of West Sacramento, the city's primary seaport, 
will be jeopardized.
  Just months ago Super-storm Sandy slammed into the East Coast. The 
destruction in New York and New Jersey reminded us that unpredictable 
weather events can overwhelm our infrastructure with devastating 
consequences.
  But with well-placed timely investments, much of worst damage can be 
averted. That's why even during the worst economic downturns in a 
generation, Sacramento voters stood together and passed the local tax-
measure to fund this critical project.
  We don't know when the next flood will occur, but we do know 
Sacramento has a well-documented history of catastrophic flooding.
  Record-breaking storms hit the region in 1956, 1964, 1986 and 1997.
  During the 1997 storm, levee failures in the nearby cities of 
Olivehurst, Arboga, Wilton, Manteca and Modesto caused mass evacuations 
and millions of dollars in damage.
  Going back even further, an even more devastating flood in 1861 
occurred when the American River Levee failed. California's newly 
elected Governor, Leland Stanford, was forced to take a row-boat to his 
inauguration at the State Capitol. The flooding was so bad the state 
government was temporarily relocated to San Francisco.
  U.S. Geological Survey scientists now believe that the 1861 storm may 
have been an atmospheric river storm, or ``ARkStorm.'' These events, 
which occur every 200 to 400 years, can produce truly devastating 
floods.
  In 2011, the USGS conducted a study about the impacts of a large 
ARkStorm in California's Central Valley. The results were shocking.

[[Page S442]]

  The storm would cause a 300 mile long, 20 mile wide flood zone across 
much of our nation's most productive agriculture lands. It would force 
the evacuation of 1.5 million residents and cause hundreds of 
landslides damaging roads, highways, and homes. The study estimates the 
cost to private homeowners and businesses would be $725 billion, nearly 
three times the cost of a major earthquake in the State.
  The bottom line is this: the infrastructure currently in place will 
not stand up to a storm of this magnitude.
  And the Natomas Basin Flood Protection Improvements Act of 2011 is 
one small step toward preparing for such a disaster.
  This legislation is nearly identical to the bill I introduced with my 
friend and colleague Senator Boxer, the Chairwoman of the Environment 
and Public Works Committee, last Congress. The only change is that the 
current bill does not include language from the previous bill that 
specifically allowed ``credits'' for non-federal work on the project.
  This modification should not be interpreted to reflect a change my 
support for the work of the local entities; I believe they have done 
the right thing by beginning construction on this project, and I 
support them receiving credit for their work.
  Instead, the modification was included to comport with work being 
done by Chairwoman Boxer on the upcoming Water Resources Development 
Act, or WRDA. That bill will generically address non-Federal crediting 
provisions and I will work with Chairman Boxer to ensure that 
Sacramento can still receive credits for the work they have completed.
  I urge my colleagues to support this 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. 197

       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 ``Natomas Basin Flood 
     Protection Improvements Act of 2013''.

     SEC. 2. PROJECT MODIFICATION, AMERICAN AND SACRAMENTO RIVERS, 
                   CALIFORNIA.

       The project for flood damage reduction, American and 
     Sacramento Rivers, California, authorized by section 
     101(a)(1) of the Water Resources Development Act of 1996 
     (Public Law 104-303; 110 Stat. 3662; 113 Stat. 319; 117 Stat. 
     1839; 121 Stat. 1947), is modified to authorize the Secretary 
     of the Army, acting through the Chief of Engineers, to 
     construct improvements to flood damage reduction facilities 
     adjacent to the American and Sacramento Rivers in the 
     vicinity of Sacramento, California, substantially in 
     accordance with the report of the Chief of Engineers entitled 
     ``American River Watershed (Common Features) Project, Natomas 
     Basin, Sacramento and Sutter Counties, California'', and 
     dated December 30, 2010, at an estimated total cost of 
     $1,389,500,000, with an estimated Federal cost of 
     $921,200,000 and an estimated non-Federal cost of 
     $468,300,000.
                                 ______
                                 
      By Mr. BEGICH:
  S. 199. A bill to amend the Outer Continental Shelf Lands Act to 
require that oil produced from Federal leases in certain Arctic waters 
be transported by pipeline to onshore facilities and to provide for the 
sharing of certain outer Continental Shelf revenues from areas in the 
Alaska Adjacent Zone; to the Committee on Energy and Natural Resources.
  Mr. BEGICH. Mr. President, I wish to speak about legislation I am 
introducing today that would restore basic fairness to how our Nation 
shares revenue from energy produced Federal waters.
  The Alaska Adjacent Zone Safe Oil Transport and Revenue Sharing Act 
would provide Alaskans with the same share of Federal bonus bid and 
royalty revenue, 37.5 percent, as residents of Gulf Coast States. This 
is about fairness and a fix that is long overdue. Alaskans deserve to 
be treated as well as residents of the Gulf Coast. We bear the risks 
and the responsibilities of offshore development. It is only fair that 
we share in the proceeds.
  Revenue sharing will provide funding for the State of Alaska, local 
governments and tribes to mitigate effects of development and provide 
support for public sector infrastructure required to both develop the 
resources and respond in terms of emergency.
  The measure distributes to Alaska 37.5 percent of the Federal bonus 
bids and royalty share from any energy development, fossil or 
renewable. Of that 37.5 percent; 25 percent is directed to local 
governments; 25 percent is directed to Alaska Native corporations; 10 
percent is directed to tribal governments; and 40 percent is directed 
to the State of Alaska.
  Additionally, the Federal share is subdivided with 15 percent of the 
Federal royalties directed, without further appropriation, to the Land 
and Water Conservation Fund; and 7.5 percent directly to deficit 
reduction.
  In addition, this legislation requires oil produced in the Federal 
waters of the Chukchi and Beaufort Seas to be brought ashore by 
pipeline, a method that is safer than tanker transport and secures 
future throughput for the Trans-Alaska Pipeline.
  I am committed to putting in place all the pieces necessary to 
responsibly develop oil and gas from the Arctic Ocean. Beyond better 
permit coordination, that I have worked on in other legislation and 
with the administration, this includes more accurate marine science and 
the two main features of this bill: sharing revenue with the state and 
coastal communities as well as keeping Trans-Alaska Pipeline System, 
TAPS, flowing into the 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. 199

       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 ``Alaska Adjacent Zone Safe 
     Oil Transport and Revenue Sharing Act''.

     SEC. 2. PRODUCTION OF OIL FROM CERTAIN ARCTIC OFFSHORE 
                   LEASES.

       Section 5 of the Outer Continental Shelf Lands Act (43 
     U.S.C. 1334) is amended by adding at the end the following:
       ``(k) Oil Transportation in Arctic Waters.--The Secretary 
     shall--
       ``(1) require that oil produced from Federal leases in 
     Arctic waters in the Chukchi Sea planning area, Beaufort Sea 
     planning area, or Hope Basin planning area be transported by 
     pipeline to onshore facilities; and
       ``(2) provide for, and issue appropriate permits for, the 
     transportation of oil from Federal leases in Arctic waters in 
     preproduction phases (including exploration) by means other 
     than pipeline.''.

     SEC. 3. REVENUE SHARING FROM AREAS IN ALASKA ADJACENT ZONE.

       Section 18 of the Outer Continental Shelf Lands Act (43 
     U.S.C. 1344) is amended by adding at the end the following:
       ``(i) Revenue Sharing From Areas in Alaska Adjacent Zone.--
       ``(1) Definitions.--In this subsection:
       ``(A) Coastal political subdivision.--The term `coastal 
     political subdivision' means a county-equivalent subdivision 
     of the State all or part of which--
       ``(i) lies within the coastal zone (as defined in section 
     304 of the Coastal Zone Management Act of 1972 (16 U.S.C. 
     1453)); and
       ``(ii) the closest point of which is not more than 300 
     statute miles from the geographical center of any leased 
     tract.
       ``(B) Distance.--The terms `distance' means minimum great 
     circle distance.
       ``(C) Indian tribe.--The term `Indian tribe' means an 
     Alaska Native entity recognized and eligible to receive 
     services from the Bureau of Indian Affairs, the headquarters 
     of which is located within 300 miles of the geographical 
     center of a leased tract.
       ``(D) Leased tract.--The term `leased tract' means a tract 
     leased under this Act for the purpose of drilling for, 
     developing, and producing oil or natural gas resources.
       ``(E) Renewable energy.--The term `renewable energy' means 
     solar, wind, ocean, current, wave, tidal, or geothermal 
     energy.
       ``(F) State.--The term `State' means the State of Alaska.
       ``(2) Revenue sharing.--Subject to paragraphs (3), (4), and 
     (5), effective beginning on the date of enactment of this 
     subsection, the State shall, without further appropriation or 
     action, receive 37.5 percent of all revenues derived from all 
     rentals, royalties, bonus bids, and other sums due and 
     payable to the United States from energy development in any 
     area of the Alaska Adjacent Zone, including from all sources 
     of renewable energy leased, developed, or produced in any 
     area in the Alaska Adjacent Zone.
       ``(3) Allocation among coastal political subdivisions of 
     the state.--
       ``(A) In general.--The Secretary shall pay 25 percent of 
     any allocable share of the State, as determined under 
     paragraph (2), directly to coastal political subdivisions.
       ``(B) Allocation.--
       ``(i) In general.--For each leased tract used to calculate 
     the allocation of the State, the Secretary shall pay the 
     coastal political subdivisions within 300 miles of the 
     geographical center of the leased tract based on

[[Page S443]]

     the relative distance of the coastal political subdivisions 
     from the leased tract in accordance with this subparagraph.
       ``(ii) Distances.--For each coastal political subdivision, 
     the Secretary shall determine the distance between the point 
     on the coastal political subdivision coastline closest to the 
     geographical center of the leased tract and the geographical 
     center of the tract.
       ``(iii) Payments.--The Secretary shall divide and allocate 
     the qualified outer Continental Shelf revenues derived from 
     the leased tract among coastal political subdivisions in 
     amounts that are inversely proportional to the applicable 
     distances determined under clause (ii).
       ``(4) Allocation among regional corporations.--
       ``(A) In general.--The Secretary shall pay 25 percent of 
     any allocable share of the State, as determined under this 
     subsection, directly to certain Regional Corporations 
     established under section 7(a) of the Alaska Native Claims 
     Settlement Act (43 U.S.C. 1606(a)).
       ``(B) Allocation.--
       ``(i) In general.--For each leased tract used to calculate 
     the allocation of the State, the Secretary shall pay the 
     Regional Corporations, after determining those Native 
     villages within the region of the Regional Corporation which 
     are within 300 miles of the geographical center of the leased 
     tract based on the relative distance of such villages from 
     the leased tract, in accordance with this paragraph.
       ``(ii) Distances.--For each such village, the Secretary 
     shall determine the distance between the point in the village 
     closest to the geographical center of the leased tract and 
     the geographical center of the tract.
       ``(iii) Payments.--The Secretary shall divide and allocate 
     the qualified outer Continental Shelf revenues derived from 
     the leased tract among the qualifying Regional Corporations 
     in amounts that are inversely proportional to the distances 
     of all of the Native villages within each qualifying region.
       ``(iv) Revenues.--All revenues received by each Regional 
     Corporation under clause (iii) shall be--

       ``(I) treated by the Regional Corporation as revenue 
     subject to the distribution requirements of section 
     7(i)(1)(A) of the Alaska Native Claims Settlement Act (43 
     U.S.C. 1606(i)(1)(A)); and
       ``(II) divided annually by the Regional Corporation among 
     all 12 Regional Corporations in accordance with section 7(i) 
     of that Act.

       ``(v) Further distribution to village corporations.--A 
     Regional Corporation receiving revenues under clause (iii) or 
     (iv)(II) shall further distribute 50 percent of the revenues 
     received to the Village Corporations in the region and the 
     class of stockholders who are not residents of those villages 
     in accordance with section 7(j) of that Act (43 U.S.C. 
     1606(j)).
       ``(5) Allocation among indian tribes.--
       ``(A) In general.--The Secretary shall pay 10 percent of 
     any allocable share of the State, as determined under this 
     subsection, directly to Indian tribes.
       ``(B) Allocation.--
       ``(i) In general.--For each leased tract used to calculate 
     the allocation of the State, the Secretary shall pay Indian 
     tribes based on the relative distance of the headquarters of 
     the Indian tribes from the leased tract, in accordance with 
     this subparagraph.
       ``(ii) Distances.--For each Indian tribe, the Secretary 
     shall determine the distance between the location of the 
     headquarters of the Indian tribe and the geographical center 
     of the tract.
       ``(iii) Payments.--The Secretary shall divide and allocate 
     the qualified outer Continental Shelf revenues derived from 
     the leased tract among the Indian tribes in amounts that are 
     inversely proportional to the distances described in clause 
     (ii).
       ``(6) Conservation royalty.--After making distributions 
     under paragraph (2) and section 31, the Secretary shall, 
     without further appropriation or action, distribute a 
     conservation royalty equal to 15 percent of Federal royalty 
     revenues derived from an area leased under this subsection 
     from all areas leased under this subsection for any year, 
     into the land and water conservation fund established under 
     section 2 of the Land and Water Conservation Fund Act of 1965 
     (16 U.S.C. 460l-5) to provide financial assistance to States 
     under section 6 of that Act (16 U.S.C. 460l-8).
       ``(7) Deficit reduction.--After making distributions in 
     accordance with paragraph (2) and in accordance with section 
     31, the Secretary shall, without further appropriation or 
     action, distribute an amount equal to 7.5 percent of Federal 
     royalty revenues derived from an area leased under this 
     subsection from all areas leased under this subsection for 
     any year, into direct Federal deficit reduction.''.

     SEC. 4. IMPOSITION OF EXCISE TAX ON BITUMEN TRANSPORTED INTO 
                   THE UNITED STATES.

       (a) In General.--Subsection (a) of section 4612 of the 
     Internal Revenue Code of 1986 is amended--
       (1) in paragraph (1), by striking ``and natural gasoline'' 
     and inserting ``, natural gasoline, and bitumen'', and
       (2) by inserting at the end the following new paragraph:
       ``(10) Bitumen.--The term `bitumen' includes diluted 
     bitumen, bituminous mixtures, or any oil manufactured from 
     bitumen or a bituminous mixture.''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to oil and petroleum products received or entered 
     after December 31, 2013.
                                 ______
                                 
      By Mr. GRASSLEY (for himself, Mr. Boozman, Mr. Corker, Mr. 
        Johanns, Mr. Lee, Mr. Sessions, Mr. Vitter, Mr. Wicker, Mrs. 
        Fischer, Mr. Hatch, and Mr. Enzi):
  S. 202. A bill to expand the use of E-Verify, to hold employers 
accountable, and for other purposes; to the Committee on the Judiciary.
  Mr. GRASSLEY. Mr. President, today, along with several colleagues, I 
am introducing legislation to permanently authorize and expand the E-
Verify program. My bill, the Accountability Through Electronic 
Verification Act, wil1 be a tool for employers who want a legal 
workforce and it will enhance our ability to hold employers accountable 
for their hiring practices.
  Known as the Basic Pilot Program, E-Verify currently provides 
employers with a simple, web-based tool to verify the work eligibility 
of new hires. In 1986, Congress made it unlawful for employers to 
knowingly hire or employ aliens not eligible to work in the United 
States. Under current law, if the documents provided by an employee 
reasonably appear on their face to be genuine, the employer has met its 
obligation to review the worker's documents.
  Because identity theft and counterfeit documents became a thriving 
industry after the 1986 bill, Congress looked to create a program to 
help employers verify the work eligibility of its new hires. We created 
the Basic Pilot Program in 1996. Employers in this program can 
electronically verify a new hires' employment authorization by checking 
data of employees with records maintained by the Department of Homeland 
Security and the Social Security Administration.
  Currently, the E-Verify program is voluntary and free for all 
employers to use. It is a proven tool in combating illegal immigration. 
Today, I am proposing that the program be a staple in every workplace 
so that American workers are on a level playing field with cheaper 
foreign labor.
  My legislation would increase penalties on employers who continue to 
hire people unauthorized to work in the country. Employers would be 
required to check the status of current employees within 3 years, and 
would allow employers to run a check prior to offering a job, saving 
that employer valuable time and resources. Employers will also be 
required to re-check those workers whose authorization is about to 
expire, such as those who come to the United States on temporary visas.
  My bill also addresses identity theft concerns. The Social Security 
Administration would be required to develop algorithm technology that 
would flag social security numbers that are being used more than once. 
For those who find themselves victim of identity theft, this bill would 
amend the criminal code to clarify identity fraud is punishable 
regardless if the defendant did not have knowledge of the victim. This 
provision stems from the 2009 Supreme Court decision holding that 
identity theft requires proof that an individual knew the number being 
used belonged to an actual person.
  While everyone may not agree with every aspect of this bill, it 
serves as a starting point for a much-needed conversation about 
worksite enforcement. The President and many members in Congress are 
going to make it a priority to pass an immigration reform bill this 
year. We need to act. We need change. We need a better system in place 
for future generations.
  Part of the discussion on immigration will be on a reliable 
employment verification program. People back home want employers to be 
held accountable. And, employers want to be responsible. People want to 
see our government do more to reduce the magnet for people to cross our 
borders illegally. We must take this opportunity to make sure that 
employers are abiding by, and able to abide by, the rules. Let us give 
them the tools they need to do that. I hope more colleagues will join 
me in my effort to achieve accountability through electronic 
verification and by making E-Verify a permanent program.

[[Page S444]]

                                 ______
                                 
      By Ms. COLLINS (for herself and Mr. King):
  S. 206. A bill to expand the HUBZone program for communities affected 
by base realignment and closure, and for other purposes; to the 
Committee on Small Business and Entrepreneurship.
  Ms. COLLINS. Mr. President, today I am introducing legislation to 
expand the geographic boundaries of HUBZones located at former U.S. 
military installations closed through the so-called Base Closure and 
Realignment--or BRAC--process. This legislation mirrors S. 3675, the 
HUBZone Expansion Act of 2012, which I introduced with Senator Snowe 
last session.
  I am pleased to have my new colleague from Maine, Senator Angus King, 
join me in offering this legislation. Senator King knows the impact a 
base closing can have on a local community all too well, coming as he 
does from Brunswick, ME, which recently lost a major military 
installation through the BRAC process. Military bases are often the 
economic heart of the towns and cities in which they are located, and 
communities can struggle for years to overcome the closure of those 
facilities.
  In recognition of this fact, Congress passed legislation providing 
HUBZone status for 5 years to military facilities closed through the 
BRAC process. This allows small businesses located within the HUBZone 
to obtain certain federal contracting preferences. The HUBZone program 
is also available to small businesses located in ``economically 
distressed communities,'' that suffer from low income, high poverty 
rates, or high unemployment.
  According to the Congressional Research Service, there are currently 
127 BRAC-related HUBZones in the United States. Unfortunately, for many 
of the military bases that have been closed, HUBZone status has not 
brought the benefits we had hoped for. One of the reasons is simple--
the law defines the geographic boundaries of a BRAC-related HUBZone to 
be the same as the boundaries of the base that was closed. When that is 
combined with the requirement that 35 percent of the employees of a 
qualifying business must live within the HUBZone, the problem is clear: 
very few people live on these former bases, so it is difficult or 
impossible for businesses to get the workers they need to meet the 
requirements of the HUBZone program.
  As I mentioned, one of these HUBZones is located at the former 
Brunswick Naval Air Station, in Brunswick, Maine. This facility closed 
in 2011, as a result of the 2005 BRAC round. When the Navy left, 
Brunswick and its neighbor, Topsham, lost more than 2400 military and 
civilian personnel. These two towns have a combined population of just 
22,000, so losing the Naval Air Station has had a significant economic 
impact on them. Because so few people actually live within the 
boundaries of the former base, its HUBZone designation does not provide 
the help they need, and that we had hoped for.
  My legislation would expand the geographic boundaries of BRAC-related 
HUBZones to include the town or county where the closed installation is 
located, or census tracts contiguous to the installation, up to a total 
population base of 50,000. This would provide a large enough pool of 
potential workers to enable qualifying businesses to locate within the 
HUBZone, and to help host communities overcome the loss of military 
installations closed through the BRAC process.
  The Association of Defense Communities has endorsed the concept of 
expanding BRAC-related HUBZones in this manner. In December, the ADC 
wrote to Senate Armed Services Committee Chairman Levin and Ranking 
Member McCain, noting how important it is that ``Congress restore its 
intent to support BRAC-impacted communities attracting small businesses 
to help build and strengthen their local economies.''
  Steve Levesque, the Executive Director of the Midcoast Regional 
Redevelopment Authority, or ``MRRA,'' which oversees the redevelopment 
of the former Brunswick Naval Air Station, has also urged Congress to 
modify the HUBZone program. In a letter to me last month, Steve 
explained that BRAC facilities do not have the residential areas needed 
to support the 35 percent residency requirement for businesses located 
within the HUBZone. As a consequence, these businesses cannot ``realize 
the HUBZone benefits for BRAC'd installations as envisioned by 
Congress.''
  This point was underscored in a letter from Heather Blease, an 
entrepreneur who is hoping to locate a new business at the former 
Brunswick Naval Air Station. Ms. Blease describes the HUBZone law as 
``flawed,'' because the 35 percent residency requirement makes it 
impossible for businesses like hers to achieve HUBZone status.
  I ask my collegues to consider the legislation we are offering today 
to help communities get back on their feet after the loss of a military 
installation closed through the BRAC process.
  Mr. President, I ask unanimous consent that letters of support be 
printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                                    Association of


                                          Defense Communities,

                                Washington, DC, December 11, 2012.
     Hon. Carl Levin,
     Chairman, Committee on Armed Services, U.S. Senate, 
         Washington, DC.
     Hon. John McCain,
     Ranking Member, Committee on Armed Services, U.S. Senate, 
         Washington, DC.
       Dear Mr. Chairman and Ranking Member McCain: The 
     Association of Defense Communities (ADC) admires your 
     longstanding support of current and former military 
     communities. ADC, the leading organization representing those 
     communities, always appreciates the opportunity to share 
     information with you and your staff that may help strengthen 
     communities with active installations and those that continue 
     to redevelop following base closure or realignment.
       Communities that have been impacted by Base Realignment and 
     Closure (BRAC) often face severe economic distress for years, 
     especially during times of national economic difficulty. To 
     assist in these communities' recovery, Congress authorized in 
     the Small Business Reauthorization Act of 1997 that BRAC-
     impacted communities would receive Small Business 
     Administration HUBZone certification, a federal initiative 
     that further helps small businesses in disadvantaged areas to 
     compete for federal contracts. The designation gives small 
     businesses relocating to closed military installation areas 
     equal footing with businesses in other disadvantaged areas 
     that receive the designation because of their location in 
     under-utilized census tracts.
       While the intent of Congress was to provide the HUBZone 
     designation to help closed military installations attract 
     small businesses, one aspect of the HUBZone program actually 
     works against these redevelopment areas. To maintain HUBZone 
     status, 35 percent of a business' employees must also live in 
     a HUBZone area. Because a military installation's HUBZone 
     area encompasses only the base itself, many closed military 
     installations do not have a substantial number of HUBZone-
     certified residential areas from which to draw sufficient 
     future employees for the businesses desiring to locate on 
     those properties. Thus, it is often impossible for a business 
     to qualify for HUBZone status and compete fairly against 
     other small businesses.
       Many defense community leaders are hopeful this issue can 
     be resolved without additional spending, creation of a new 
     government program or a change in government contracting 
     goals. Senator Susan Collins is also working to address this 
     issue during the final stages of the FY 2013 National Defense 
     Authorization Act. We look forward to sharing further 
     information with your office and hers to help explain why it 
     is important to defense communities that Congress restore its 
     intent to support BRAC-impacted communities attracting small 
     businesses to help build and strengthen their local 
     economies.
       As always, ADC appreciate your service and support and 
     hopes you will contact us if we may be of further assistance.
           Respectfully,

                                            Robert M. Murdock,

                                         President, Association of
     Defense Communities.
                                  ____

                                                 Midcoast Regional


                                      Redevelopment Authority,

                                 Brunswick, ME, December 11, 2012.
     Hon. Susan Collins,
     U.S. Senator, Dirksen Senate Office Building,
     Washington, DC.
       Dear Senator Collins: I represent the Midcoast Regional 
     Redevelopment Authority, which is charged with redeveloping 
     the former Naval Air Station Brunswick, Maine that closed in 
     2011 and is now known as Brunswick Landing.
       We seek your assistance in modifying the current federal 
     program related to SBA HUBZones to make it a more effective 
     tool for businesses locating at Brunswick Landing. Over the 
     past several years, we have had several companies inquire 
     about the current HUBZone status of the former NAS Brunswick. 
     In fact, we are currently working with one company who is 
     willing to locate here and create upwards of 200 jobs, if we 
     are successful in getting the current HUBZone program for 
     closed military installations broadened.

[[Page S445]]

       With the implementation of the latest 2005 BRAC round, a 
     number of military installations have been closed across the 
     country resulting in severe economic distress for those 
     communities and States that have realized these closures. 
     Redeveloping these BRAC'd properties proved quite difficult 
     in good economic times, and now it is made even more 
     difficult with the national and State economic recession we 
     are experiencing.
       While it would seem that the HUBZone designation for a 
     closed military installation would be an aid to its 
     redevelopment efforts, the 35% residency rule in the existing 
     law actually makes the program not a very effective 
     redevelopment tool for these properties at all. With the 
     exception of closed military installations, most of the 
     HUBZones in the Country are census tract based. Under current 
     law, only the closed military base itself (i.e., the 
     geographic area which used to be the former base) is 
     designated as a HUBZone, which is a much smaller area than 
     the census tract basis. Furthermore, many closed military 
     installations do not have a substantial amount of residential 
     areas from which to draw sufficient future employees (35%) 
     for the businesses desiring to locate on those properties.
       In addition the above, the Small Business Act established a 
     five year time-frame for the duration of the HUBZone from the 
     actual date of base closure. This is of particular concern 
     given that the actual transfer of properties from the 
     military services to the base closure communities often 
     occurs many years following closure. Thus, these properties 
     are not available for business development until actually 
     transferred.
       The net effect is that eligible HUB businesses seeking new 
     or expanded opportunities on closed installations cannot meet 
     these requirements and thus are not able to realize the 
     HUBZone benefits for BRAC'd installations as envisioned by 
     Congress. This issue exacerbates the difficulties for us and 
     other similar communities to overcome the devastating 
     economic effects of base closures.
       In order to make the BRAC HUBZone designation an effective 
     economic development tool for Brunswick Landing, as well as 
     all the other closed installations across the country, the 
     attached amendment language to the existing law is 
     recommended. It should be noted that these recommendations do 
     not create a new program, require additional government 
     spending, or increase federal contracting goals.
       Thank you for your service to our Country and the State of 
     Maine and your thoughtful consideration of this request.
           Sincerely,
                                               Steven H. Levesque,
     Executive Director.
                                  ____



                                            Heather D. Blease,

                                  Freeport, ME, December 12, 2012.
     Hon. Susan Collins,
     U.S. Senator, Dirksen Senate Office Building,
     Washington, DC.
       Dear Senator Collins: I have established a new contact 
     center business that focuses on providing service to the 
     federal government. A key strategy for our success hinges 
     upon the establishment of my business as a HUBZone certified 
     entity.
       As a native of Brunswick, Maine, I am keenly interested in 
     locating my business at the former Brunswick Naval Air 
     Station, now called Brunswick Landing. As a BRAC facility, 
     the SBA rules limit the boundary of the HUBZone 
     geographically to base property which has very few housing 
     units.
       In order to achieve HUBZone certification, 35% of my 
     employees need to reside within the HUBZone.
       As the law is written, I cannot locate at Brunswick Landing 
     and hope to achieve HUBZone status. The BRAC HUBZone law is 
     flawed as written. Our Congress attempted to create an 
     economic development vehicle to help communities recover from 
     base closures, but unless the law is tweaked, the HUBZone 
     designation is meaningless.
       Please help modify the existing definition for BRAC 
     HUBZones by broadening the boundary of the HUBZone for closed 
     military installations to include the surrounding community. 
     In the case of my company, it provides me with HUBZone 
     employees to put to work so I can meet the HUBZone 
     certification requirements.
       If the law is changed, I will locate my business at 
     Brunswick Landing and provide hundreds of jobs to the 
     economically depressed area. Otherwise, I will need to seek 
     out other alternatives.
       Thank you for your service to our country, the State of 
     Maine and your interest in helping small businesses thrive.
           With greatest respect,
                                                Heather D. Blease,
     CEO, Savi Systems, LLC.

                          ____________________