[Congressional Record Volume 159, Number 113 (Thursday, August 1, 2013)]
[Senate]
[Pages S6211-S6236]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS
By Mr. WYDEN (for himself and Ms. Murkowski):
S. 1419. A bill to promote research, development, and demonstration
of marine and hydrokinetic renewable energy technologies, and for other
purposes; to the Committee on Energy and Natural Resources.
Mr. WYDEN. Mr. President, today Senator Murkowski and I are
introducing legislation to promote a new form of hydropower, marine
hydrokinetic renewable energy, or MHK. An MHK project generates energy
from waves, currents, and tides in the ocean, an estuary or a tidal
area as well as from the free-flowing water in a river, lake, or
stream.
Our bill will help commercialize MHK technologies through research
and development and a more efficient and timely regulatory process for
the siting of pilot projects intended to demonstrate the viability of
these technologies. It is an ideal follow-up to a pair of bills, H.R.
267 and H.R. 678, to streamline the regulatory process for low-impact
conventional hydropower that were reported by the Committee on Energy
and Natural Resources by unanimous bipartisan votes a few months ago.
Considered together, the two conventional hydropower bills approved by
the Committee along with this MHK legislation are a major step forward
in advancing carbon-free hydropower technologies.
MHK has tremendous potential to generate a substantial amount of
clean renewable energy in the United States and across the globe. It is
poised to be a key participant in the transition to a low carbon
economy.
What distinguishes MHK from conventional hydropower is that it
generates energy without the use of a dam or other impoundment. This
gets MHK off on the right foot in terms of minimizing any adverse
environmental impact. Investments to capture our nation's rich domestic
marine energy resources can also play a major role in the creation of
essential domestic engineering and manufacturing jobs.
The energy contained in predictable waves, tidal flows and currents
is the basis for worldwide investments in this emerging industry. Water
is approximately 800 times denser than air, providing great potential
power density along with predictability. These characteristics mean
that MHK technologies could provide predictable
[[Page S6212]]
base-load renewable power in the future.
At the present time there are many different types of MHK
technologies with multiple applications under development that are
intended to capture the power contained in waves, tides and currents.
Wave energy devices capture the heave and/or surge power of waves and
convert them via hydraulic or geared direct drive systems into
electricity. Some of these devices are moored to the ocean floor, some
are floating on the surface, while others are attached to breakwaters
near shore. By last count, there are over 100 wave energy devices under
development worldwide. Tidal energy technologies capture the ebb and
flow of tides. It is estimated that 60 different tidal energy
technologies are under development worldwide. There are other
technologies that include run-of-river systems and offshore ocean
current technologies. Most of these technologies under development
capture uni-directional water flows and look similar to the tidal
devices.
The United States has not been a world leader in the development of
these cutting edge technologies to date. Instead, our country is seen
as a huge potential market for our international competitors in this
new industrial sector. The United States has significant wave, tidal,
current and in-stream energy resources. The Electric Power Research
Institute has estimated that the commercially available wave energy
potential off the coast of the United States is roughly 252 million
megawatt hours--equal to 6.5 percent of today's entire generating
portfolio. This is approximately the amount of electricity presently
being produced by the existing fleet of American conventional
hydroelectric dams.
The Department of Energy, DOE, has released two nationwide resource
assessments that indicate the waves, tides, and ocean currents off the
nation's coasts could contribute significantly to the United States'
total annual electricity production. DOE is currently developing an
aggressive strategy to support its vision of producing at least fifteen
percent of our nation's electricity from water power, including
conventional hydropower, by 2030.
Our goal should be the establishment of a commercially viable U.S.
MHK renewable energy industry, supported by a robust domestic supply
chain for fabrication, installation, operations and maintenance of MHK
devices. The development of a substantial marine hydrokinetic industry
in the U.S. could drive billions of dollars of investment in heavy
industrial and maritime sectors, as well as in advanced electrical
systems and materials common to many renewable technologies. Federal
investments would stimulate private funds and jobs in the construction,
manufacturing, engineering, and environmental science sectors.
I am very pleased that my home State of Oregon has made a strategic
decision to be an international leader in the commercialization of the
marine renewable energy industry. Led by the Oregon Wave Energy Trust,
the Northwest National Marine Renewable Energy Center co-located at
Oregon State University, and several private companies that are part of
the MHK supply chain, Oregon is positioning itself to be a leading
force supporting this newly emerging industry.
Unfortunately, the U.S. is falling behind in the race to capture the
rich energy potential of our oceans and the jobs that will come with
this new industry. The United Kingdom, Ireland, Portugal, Scotland,
Australia, and other countries are committed to producing emission-
free, renewable energy from MHK sources. Scotland has had a grid-
connected, wave energy convertor unit in operation since 2001 and
maintains a national goal of producing 2 GW of generation capacity from
MHK renewable energy. The U.K. and Ireland have also set aggressive
goals for MHK generation by 2020.
The Ocean Renewable Energy Coalition, the industry's trade group here
in Washington DC, calculates that more than $782 million has been spent
by the UK government on wave energy R&D over the past 10 years. That
total approaches $1 billion over the same period if you add in the
commitments to ocean energy R&D from France, Portugal, Spain, Norway,
and Denmark.
Early funding support, along with development of full-scale device
testing centers, demonstrates that the significant technological
advances and the competitive advantages in this industry are trending
in Europe's direction. As an example of the disparity in investments,
Europe currently has several wave and tidal energy test facilities, led
by the European Marine Energy Center in Scotland, that are helping
technology developers commercialize their wave and tidal energy
convertors. The United States clearly has a need for such
infrastructure. I know that Oregon State University has a strong desire
to compete for funding to help establish a testing center in the
Pacific Northwest. Unfortunately, recent funding levels have not
supported development of such offshore testing infrastructure in the
U.S. to date.
Given this internationally competitive situation, I believe that
Congress must make targeted Federal investments to close the gap.
Commercialization of technologies to harness marine renewable energy
resources will require Federal funding to augment research and
development efforts already underway in the private sector. Just as the
wind and solar industries have received DOE funding support for over 3
decades, which has resulted in the rapid deployment of these
technologies in recent years, the nascent marine energy industry seeks
similar Federal assistance to develop promising technologies that are
on the verge of commercial viability.
Unfortunately, in addition to the limited private sector funding
available to these startup companies, permitting and regulatory
obstacles are tremendous disincentives to technology developers of
marine energy projects in the United States. While other countries have
adopted permitting and regulatory regimes that appear to be more
efficient, the United States is still struggling with how to permit and
regulate these technologies. I cannot overstate the seriousness of this
problem. To give just one example, it took one MHK developer 5 years
and $2 million to obtain a license from the Federal Energy Regulatory
Commission for a 1.5 megawatt project.
The regulatory situation is simply unacceptable and is greatly
slowing progress in the MHK industry. Until companies get projects in
the water, Congress and the public will not learn about the
environmental impacts, engineering challenges or the true costs of
offshore renewables.
Capturing the benefits of our vast marine-based renewable resources
will require a mix of new incentives, updated regulatory regimes and
general outreach and education. However, the most important actions
that can be taken by the Federal Government in the short term are to
provide the necessary resources for research, development and
demonstration of various marine renewable energy technology platforms
and a workable and efficient regulatory process. Increased federal
support will accelerate deployment of these technologies, create
thousands of high paying jobs, give confidence to investors, and help
attract private capital.
The Marine and Hydrokinetic Renewable Energy Act of 2013 helps
accomplish these goals in a number of ways. It reauthorizes the DOE's
MHK research, development and demonstration 3 programs, including the
National Marine Renewable Energy Research, Development, and
Demonstration Centers.
Increased resources for the DOE Water Power Program will enable the
United States to leverage its technological superiority in shipbuilding
and offshore oil and gas production. This will create jobs and
diversify these maritime industries. In the absence of such funding,
however, the United States will have to depend on foreign suppliers for
ocean energy technologies, and will have missed a significant
opportunity to expand our economic competiveness in this renewable
energy sector.
The regulatory component of the bill makes the regulatory process for
MHK of not more than 10 MW more efficient and timely. It modifies and
improves the FERC ``pilot license'' process in many ways. Improvements
include a goal to complete the pilot license process in 12 months or
less; a designation of FERC as the ``Lead Agency'' for the purpose of
coordinating environmental review; a clarification that any shut
[[Page S6213]]
down requirement be ``reasonable,'' and a clarification that an MHK
project does not need to be removed when it is shut down if FERC deems
leaving it in place is preferable for environmental and other reasons
MHK is a clean, home-grown, emissions-free source of electricity that
can improve the security and reliability of the electric grid.
Investing in MHK research, development and demonstration today will pay
great dividends in the future. MHK has tremendous potential to benefit
the United States and the entire world. Now is the time to move forward
on MHK and the Marine and Hydrokinetic Renewable Energy Act is the way
to do it.
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. 1419
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Marine and
Hydrokinetic Renewable Energy Act of 2013''.
(b) Table of Contents.--The table of contents of this Act
is as follows:
Sec. 1. Short title; table of contents.
TITLE I--MARINE AND HYDROKINETIC RENEWABLE ENERGY TECHNOLOGIES
Sec. 101. Definition of marine and hydrokinetic renewable energy.
Sec. 102. Marine and hydrokinetic renewable energy research and
development.
Sec. 103. National Marine Renewable Energy Research, Development, and
Demonstration Centers.
Sec. 104. Authorization of appropriations.
TITLE II--MARINE AND HYDROKINETIC RENEWABLE ENERGY REGULATORY
EFFICIENCY
Sec. 201. Marine and hydrokinetic renewable energy projects and
facilities.
TITLE I--MARINE AND HYDROKINETIC RENEWABLE ENERGY TECHNOLOGIES
SEC. 101. DEFINITION OF MARINE AND HYDROKINETIC RENEWABLE
ENERGY.
Section 632 of the Energy Independence and Security Act of
2007 (42 U.S.C. 17211) is amended in the matter preceding
paragraph (1) by striking ``electrical''.
SEC. 102. MARINE AND HYDROKINETIC RENEWABLE ENERGY RESEARCH
AND DEVELOPMENT.
Section 633 of the Energy Independence and Security Act of
2007 (42 U.S.C. 17212) is amended to read as follows:
``SEC. 633. MARINE AND HYDROKINETIC RENEWABLE ENERGY RESEARCH
AND DEVELOPMENT.
``The Secretary, in consultation with the Secretary of the
Interior, the Secretary of Commerce, and the Federal Energy
Regulatory Commission, shall carry out a program of research,
development, demonstration, and commercial application to
expand marine and hydrokinetic renewable energy production,
including programs--
``(1) to assist technology development to improve the
components, processes, and systems used for power generation
from marine and hydrokinetic renewable energy resources;
``(2) to establish critical testing infrastructure
necessary--
``(A) to cost effectively and efficiently test and prove
marine and hydrokinetic renewable energy devices; and
``(B) to accelerate the technological readiness and
commercialization of those devices;
``(3) to support efforts to increase the efficiency of
energy conversion, lower the cost, increase the use, improve
the reliability, and demonstrate the applicability of marine
and hydrokinetic renewable energy technologies by
participating in demonstration projects;
``(4) to investigate variability issues and the efficient
and reliable integration of marine and hydrokinetic renewable
energy with the utility grid;
``(5) to identify and study critical short- and long-term
needs to create a sustainable marine and hydrokinetic
renewable energy supply chain based in the United States;
``(6) to increase the reliability and survivability of
marine and hydrokinetic renewable energy technologies,
including development of corrosion-resistant and anti-fouling
materials;
``(7) to verify the performance, reliability,
maintainability, and cost of new marine and hydrokinetic
renewable energy device designs and system components in an
operating environment;
``(8) to coordinate and avoid duplication of activities
across programs of the Department and other applicable
Federal agencies, including National Laboratories;
``(9) to identify opportunities for joint research and
development programs and development of economies of scale
between--
``(A) marine and hydrokinetic renewable energy
technologies; and
``(B) other renewable energy and fossil energy programs,
offshore oil and gas production activities, and activities of
the Department of Defense; and
``(10) to support in-water technology development with
international partners using existing cooperative procedures
(including memoranda of understanding)--
``(A) to allow cooperative funding and other support of
value to be exchanged and leveraged; and
``(B) to encourage the participation of international
research centers and companies in the United States and the
participation of research centers and companies of the United
States in international projects.''.
SEC. 103. NATIONAL MARINE RENEWABLE ENERGY RESEARCH,
DEVELOPMENT, AND DEMONSTRATION CENTERS.
Section 634 of the Energy Independence and Security Act of
2007 (42 U.S.C. 17213) is amended by striking subsection (b)
and inserting the following:
``(b) Purposes.--The Centers (in coordination with the
Department and National Laboratories) shall--
``(1) advance research, development, demonstration, and
commercial application of marine and hydrokinetic renewable
energy technologies;
``(2) support in-water testing and demonstration of marine
and hydrokinetic renewable energy technologies, including
facilities capable of testing--
``(A) marine and hydrokinetic renewable energy systems of
various technology readiness levels and scales;
``(B) a variety of technologies in multiple test berths at
a single location; and
``(C) arrays of technology devices; and
``(3) serve as information clearinghouses for the marine
and hydrokinetic renewable energy industry by collecting and
disseminating information on best practices in all areas
relating to developing and managing marine and hydrokinetic
renewable energy resources and energy systems.''.
SEC. 104. AUTHORIZATION OF APPROPRIATIONS.
Section 636 of the Energy Independence and Security Act of
2007 (42 U.S.C. 17215) is amended by striking ``2008 through
2012'' and inserting ``2014 through 2017''.
TITLE II--MARINE AND HYDROKINETIC RENEWABLE ENERGY REGULATORY
EFFICIENCY
SEC. 201. MARINE AND HYDROKINETIC RENEWABLE ENERGY PROJECTS
AND FACILITIES.
Part I of the Federal Power Act (16 U.S.C. 792 et seq.) is
amended by adding at the end the following:
``SEC. 34. PILOT LICENSE FOR MARINE AND HYDROKINETIC
RENEWABLE ENERGY PROJECTS.
``(a) Definition of Hydrokinetic Pilot Project.--
``(1) In general.--In this section, the term `hydrokinetic
pilot project' means a facility that generates energy from--
``(A) waves, tides, or currents in an ocean, estuary, or
tidal area; or
``(B) free-flowing water in a river, lake, or stream.
``(2) Exclusions.--The term `hydrokinetic pilot project'
does not include a project that uses a dam or other
impoundment for electric power purposes.
``(b) Pilot Licenses Authorized.--The Commission may issue
a pilot license to construct, operate, and maintain a
hydrokinetic pilot project that meets the criteria listed in
subsection (c).
``(c) License Criteria.--The Commission may issue a pilot
license for a hydrokinetic pilot project if the project--
``(1) will have an installed capacity of not more than 10
megawatts;
``(2) is for a term of not more than 10 years;
``(3) will not cause a significant adverse environmental
impact or interfere with navigation;
``(4) is removable and can shut down on reasonable notice
in the event of a significant adverse safety, navigation, or
environmental impact;
``(5) can be removed, and the site can be restored, by the
end of the license term, unless the project has obtained a
new license or the Commission has determined, based on
substantial evidence, that the project should not be removed
because it would be preferable for environmental or other
reasons not to; and
``(6) is primarily for the purpose of--
``(A) testing new hydrokinetic technologies;
``(B) locating appropriate sites for new hydrokinetic
technologies; or
``(C) determining the environmental and other effects of a
hydrokinetic technology.
``(d) Lead Agency.--In carrying out this section, the
Commission shall act as the lead agency--
``(1) to coordinate all applicable Federal authorizations;
and
``(2) to comply with the National Environmental Policy Act
of 1969 (42 U.S.C. 4321 et seq.).
``(e) Schedule Goals.--
``(1) In general.--Not later than 30 days after the date on
which the Commission receives a completed application, and
following consultation with Federal, State, and local
agencies with jurisdiction over the hydrokinetic pilot
project, the Commission shall develop and issue pilot license
approval process scheduling goals that cover all Federal,
State, and local permits required by law.
``(2) Compliance.--Applicable Federal, State, and local
agencies shall comply with the goals established under
paragraph (1) to the maximum extent practicable, consistent
with applicable law.
[[Page S6214]]
``(3) 1-year goal.--It shall be the goal of the Commission
and the other applicable agencies to complete the pilot
license process by not later than 1 year after the date on
which the Commission receives the completed application.
``(f) Size Limitations.--
``(1) In general.--The Commission may grant a pilot license
for a project located in the ocean if the project covers a
surface area of not more than 1 square nautical mile.
``(2) Exception.--The Commission, at the discretion of the
Commission and for good cause, may grant a pilot license for
a project that covers a surface area of more than 1 square
nautical mile.
``(3) Limitation.--For proposed projects located in an
estuary, tidal area, river, lake, or stream, the Commission
shall determine the size limit on a case-by-case basis,
taking into account all relevant factors.
``(g) Extensions Authorized.--On application by a project,
the Commission may make a 1-time extension of a pilot license
for a term not to exceed 5 years.''.
______
By Mrs. FISCHER (for herself, Mr. Grassley, Mr. Crapo, and Mr.
Risch):
S. 1420. A bill to amend title 31, United States Code, to provide for
transparency of payments made from the Judgment Fund; to the Committee
on the Judiciary.
Mrs. FISCHER. Mr. President, I rise to discuss legislation that I am
introducing in the U.S. Senate today, the Judgment Fund Transparency
Act.
As my colleagues may or may not know, the Judgment Fund is
administered by the Treasury Department and is used to pay certain
court judgments and settlements against the Federal Government. It is
essentially an unlimited amount of money available to pay for Federal
Government liability. It is not subject to the annual appropriations
process, and even more remarkably, the Treasury Department has no
reporting requirements, so these funds are paid out with very little
oversight or scrutiny.
This is no small matter, as the Judgment Fund disburses billions of
dollars in payments per year. In recent years, Treasury has paid the
following from the Fund: fiscal year 2012--$2.9 billion, fiscal year
2011--$2.2 billion, fiscal year 2010--$1.1 billion, fiscal year 2009--
$2.3 billion, fiscal year 2008--$790 million, fiscal year 2007--$1
billion, and fiscal year 2006--$628 million.
Before the Judgment Fund was established, claims against the
government were assigned to a Congressional committee that would
appropriate funds in order to pay liability, attorneys' fees, and costs
associated with the claim. Once the Judgment Fund was established in
1956, however, Congressional committees stopped appropriating funds
explicitly for this purpose. Now, if a government agency does not use
its own annual budget to cover the costs, Treasury simply pays the bill
out of the Fund.
Because the Treasury Department has no binding reporting
requirements, few public details exist about where the funds are going
and why, and the information that is readily accessible is only made
available at the administration's discretion.
The U.S. Chamber of Commerce highlighted the nature of this problem
in an article about the Judgment Fund written by Bill Kovacs on
February 1, 2013:
Without knowing who is being paid under the Judgment Fund
and for what reason, not to mention the validity of the
claim, Congress cannot oversee and control the federal
governments litigation costs, risks and exposure. Simply,
without disclosure Congress is being denied the opportunity
to take effective mitigation measures against improper agency
action that results in claims against the federal government.
Non-disclosure of Judgment Fund payments hides from Congress
what might be excessive markers of agency mismanagement and/
or structural defects in statutes and programs. And due to a
lack of reporting, Congress is denied the opportunity to
understand claims against agencies that might shed light on
how to improve agency operations.
The National Cattlemen's Beef Association has also decried the lack
of oversight of the Judgment Fund by stating, ``Certain groups
continuously sue the federal government, and Treasury simply writes a
check to foot the bill without providing Members of Congress and
American taxpayers basic information about the payment.''
The Judgment Fund Transparency Act seeks to address these problems by
requiring a public accounting of the taxpayer funds distributed via the
Judgment Fund to parties who bring successful claims against the
Federal government.
The Judgment Fund Transparency Act promotes transparency and
oversight by requiring the Treasury Department to post on a publicly
accessible website the claimant, counsel, agency, fact summary, and
payment amount for each claim from the Judgment Fund, unless a law or
court order otherwise prohibits the disclosure of such information.
The Judgment Fund Transparency Act would increase transparency and
oversight of the Fund and would provide Members of Congress and the
public with the ability to see how taxpayers' dollars are being spent.
I am proud to introduce the Judgment Fund Transparency Act today and
invite my colleagues to cosponsor this legislation.
______
By Mr. LEAHY:
S. 1421. A bill to amend the Internal Revenue Code of 1986 to provide
a refundable tax credit for the installation of sprinklers and
elevators in historic structures; to the Committee on Finance.
Mr. LEAHY. Mr. President, each year fire destroys hundreds of
vulnerable historic buildings that serve as the anchors of America's
vibrant villages and downtowns. These fires leave gaping holes in Main
Streets all across the country. All have destroyed property. Some have
taken lives. And many could have been prevented by sprinkler systems.
This upfront but costly investment could have helped prevent the loss
of life, reduced property damage, and decreased federal expenditures on
rebuilding efforts after these fires.
To prevent fires from destroying buildings in historic downtowns and
to preserve access to upper-story office, retail, and housing space in
these buildings, I am introducing legislation today--the Historic
Downtown Preservation and Access Act--that will create a 50 percent
refundable tax credit, capped at $50,000, for the installation of fire
sprinklers and elevators in older, multi-use buildings in historic
downtowns.
Since 2000, Vermont has had more than a dozen significant downtown
fires causing tens of millions of dollars of damage and taking at least
three lives. The original owners of at least 8 of these buildings were
unable to rebuild--leaving the critical task of rebuilding both the
building and the community to nonprofit entities that rely primarily on
Federal funds. These 8 projects cost the Federal Government $20 million
in Low Income Housing Tax Credits, Community Development Block-Grant
building, and HOME funding. Only one of these 8 buildings had a
sprinkler system. If the building owners had installed sprinklers in
all eight buildings using the credit created by this legislation, the
Federal Government may have saved $19.6 million, dozens of Vermonters
would still be in their homes, more than a dozen businesses would have
been sparred, and at least three Vermonters might still be alive today.
According to the National Fire Sprinkler Association, housing units
with sprinklers receive 69 percent less property damage during a fire
than units without sprinklers, the death rate per fire in a home with a
sprinkler is 83 percent less than in a home without a sprinkler, and
firefighters are 65 percent less likely to be injured in a fire where a
sprinkler is present than in a fire where a sprinkler is not present.
This legislation also incentivizes the installation of elevators
because too often upper story office, retail, and housing space in
historic downtown buildings goes unused due to accessibility
requirements.
Financial cost-benefit modeling and existing federal incentives for
rehabbing an historic building with sprinklers or an elevator fail to
adequately incentivize building owners to install these assets. For
instance, the Qualified Rehabilitation Tax Credit requires significant
rehabilitation to a building equal to the value of the building before
renovation in order to claim the credit. Asset depreciation tax
benefits take decades for a building owner to offset the cost of a
sprinkler or elevator system, and building owners who make no profit or
minimal profit have no use for existing tax credits.
The new refundable tax credit I am introducing today--modeled after
the State of Vermont's highly successful
[[Page S6215]]
downtown historic tax credit--would allow private entities with little
tax liability and nonprofits alike to install these important property-
and life-saving devices in historic buildings.
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. 1421
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 ``Historic Downtown
Preservation and Access Act''.
SEC. 2. CREDIT FOR INSTALLATION OF SPRINKLERS AND ELEVATORS
IN HISTORIC BUILDINGS.
(a) In General.--Subpart C of part IV of subchapter A of
chapter 1 of the Internal Revenue Code of 1986 is amended by
inserting after section 36B the following new section:
``SEC. 36C. HISTORIC BUILDING EXPENSES.
``(a) In General.--There shall be allowed a credit against
the tax imposed by this subtitle for the taxable year an
amount equal to 50 percent of the qualified historic building
expenses paid or incurred by the taxpayer during such taxable
year.
``(b) Limitation.--The credit allowed under subsection (a)
with respect to any taxpayer for any taxable year shall not
exceed $50,000.
``(c) Qualified Historic Building Expenses.--For purposes
of this section--
``(1) In general.--The term `qualified historic building
expenses' means amounts paid or incurred to install in a
certified historic structure an elevator system or a
sprinkler system that meets the requirements found in the
most recent edition of NFPA 13: Standard for the Installation
of Sprinkler Systems.
``(2) National historic landmarks.--In the case of a
certified historic structure that is designated as a National
Historic Landmark in accordance with section 101(a) of the
National Historic Preservation Act (16 U.S.C. 470a(a)) and
that is open to the public, the term `qualified historic
building expenses' shall not include an expense described in
paragraph (1), unless the installation of property described
in such paragraph meets the requirements for a certified
rehabilitation under section 47(c)(2)(C).
``(3) Certified historic structure.--The term `certified
historic structure' has the meaning given such term in
section 47(c)(3), except that such term shall not include any
structure which is a single-family residence.''.
(b) Conforming Amendments.--
(1) Section 1324 of title 31, United States Code, is
amended by inserting ``, 36C'' after ``, 36B''.
(2) The table of sections for subpart C of part IV of
subchapter A of chapter 1 of the Internal Revenue Code of
1986 is amended by inserting after the item relating to
section 36B the following new item:
``Sec. 36C. Historic building expenses.''.
(c) Effective Date.--The amendments made by this section
shall apply to amounts paid or incurred in taxable years
beginning after the date of the enactment of this Act.
______
By Mr. CARDIN (for himself, Mr. Crapo, Mr. King, Mr. Udall of New
Mexico, and Mrs. Shaheen):
S. 1422. A bill to amend the Congressional Budget Act of 1974
respecting the scoring of preventive health savings; to the Committee
on the Budget.
Mr. CARDIN. Mr. President, I rise to introduce legislation to
modernize the Congressional budget scoring process with respect to
health spending and the effects of preventive health care.
Although the United States spends more than any other Nation in the
world on health care, $2.6 trillion in 2010, our citizens' health
status lags behind that of most developed countries, and we have the
highest rate of preventable deaths among 19 industrialized nations. One
reason is that the United States' expenditures for the treatment of
disease far exceed our investments in preventive health.
Our neglect of prevention has been costly. Spending on the treatment
of chronic diseases is overwhelming our health care budgets,
particularly those of the Medicare and Medicaid programs. The following
statistics come from the U.S. Centers for Disease Control and
Prevention: 7 out of 10 deaths among Americans each year are from
chronic diseases. Heart disease, cancer and stroke account for more
than 50 percent of all deaths each year.
In 2005, 133 million Americans almost 1 out of every 2 adults had at
least one chronic illness.
About \1/4\ of people with chronic conditions have one or more daily
activity limitations.
Arthritis is the most common cause of disability, with nearly 19
million Americans reporting activity limitations.
Diabetes continues to be the leading cause of kidney failure,
nontraumatic lower-extremity amputations, and blindness among adults,
aged 20-74.
Excessive alcohol consumption is the third leading preventable cause
of death in the U.S., behind diet, physical activity, and tobacco.
CDC also tells us that four health risk behaviors--lack of physical
activity, poor nutrition, tobacco use, and excessive alcohol
consumption--are responsible for much of the illness, suffering, and
early death related to chronic diseases.
More than \1/3\ of all adults do not meet recommendations for aerobic
physical activity based on the 2008 Physical Activity Guidelines for
Americans, and 23 percent report no leisure-time physical activity at
all in the preceding month.
In 2007, 22 percent of high school students and only 24 percent of
adults reported eating 5 or more servings of fruits and vegetables per
day.
More than 43 million American adults, approximately 1 in 5, smoke.
Lung cancer is the leading cause of cancer death, and cigarette smoking
causes almost all cases. Compared to nonsmokers, men who smoke are
about 23 times more likely to develop lung cancer and women who smoke
are about 13 times more likely. Smoking causes about 90 percent of lung
cancer deaths in men and almost 80 percent in women. Smoking also
causes cancer of the voicebox, mouth and throat, esophagus, bladder,
kidney, pancreas, cervix, and stomach, and causes acute myeloid
leukemia.
Excessive alcohol consumption contributes to over 54 different
diseases and injuries, including cancer of the mouth, throat,
esophagus, liver, colon, and breast, liver diseases, and other
cardiovascular, neurological, psychiatric, and gastrointestinal health
problems.
Binge drinking, the most dangerous pattern of drinking, defined as
consuming more than 4 drinks on an occasion for women or 5 drinks for
men, is reported by 17 percent of U.S. adults, averaging 8 drinks per
binge.
By addressing just these four behaviors, we can alter the trajectory
of chronic disease and the health costs associated with them. That is
the power of prevention. As Dr. Albert Reece of the University of
Maryland School of Medicine once said, ``Lifestyle is primary care.''
Prevention also means early screening. In addition to increasing
survival rates, identifying diseases early reduces health care costs.
In the case of colorectal cancer, Medicare will pay under $400 for a
colonoscopy, but if the patient is not diagnosed until the disease has
metastasized, the costs of care can exceed $58,000 over the patient's
lifetime. A screening mammography costs the Medicare program a small
fraction of the tens of thousands of dollars that treatment of breast
cancer costs, depending on when the cancer is found and the course of
treatment used. One drug used to treat late stage breast cancer can
cost as much as $40,000 a year.
Research has shown that increasing to 90 percent the number of women
aged 40 and older who have been screened for breast cancer in the past
two years would save more than 100,000 lives each year in the United
States.
One of the most compelling cases for prevention is in the area of
oral health. The tragic, preventable death of 12 year-old Marylander
Deamonte Driver in 2007 illustrated the consequences of poor access to
oral health care. His untreated tooth abscess spread to his brain and
after two extensive operations, he died. Although a tooth extraction
would have cost about $80, the final total cost of his medical care
exceeded $250,000.
The American Academy of Pediatric Dentistry tells us that dental
decay is the most common chronic childhood disease among children in
the United States. It affects one in five children aged 2 to 4, half of
those aged 6 to 8, and nearly \3/5\ of 15 year olds. But it is also the
most preventable disease if basic oral care is provided starting at an
early age.
The good news in that for nearly every category of chronic disease we
can reduce its prevalence by making preventive health care a priority.
All around us are examples of why prevention is an essential part of
health care
[[Page S6216]]
and why effective use of preventive measures, such as screening and
smoking cessation can save lives and lower health care costs in the
long run.
But the current Congressional budget process has hindered our ability
to get appropriate credit for the cost savings that prevention can
bring. For this reason, investing in initiatives that can move our
Nation forward toward optimal health often requires us to cut funding
in other important areas because of the budget rules.
Today, budget resolutions, budget reconciliation, and CBO scoring
analyses use a ten-year ``scoring'' window. But the research performed
at the National Institutes of Health in Bethesda, MD and at research
centers across the nation has demonstrated that some expenditures for
preventive services result in cost savings when considered in the long
term. Unfortunately, Congressional budget scoring rules only permit
taking into account the first ten years, a time frame in which savings
may not be apparent.
We want to change that. Today, with Senators Mike Crapo, Angus King,
Tom Udall, and Jeanne Shaheen, I am introducing the Preventive Health
Savings Act of 2013. It would allow the Chairman or Ranking Member of
the House or Senate Budget Committee, or the health committees--HELP,
Finance, Ways and Means, or Energy and Commerce--to request an analysis
of preventive measures extending beyond the existing 10-year window to
two additional ten-year periods.
Re-evaluating our budget rules is not a new phenomenon. In recent
years, Congress has increasingly looked for ways to assess long-term
budget consequences. For example, Congress currently requests that CBO
report on measures that would cause a large future increase in the
deficit--more than $5 billion in the following four decades.
The Preventive Health Savings Act would direct CBO to incorporate
credible data on prevention. Because we want to ensure that CBO's
projections are tied to scientific data, our bill would define
preventive health as ``an action designed to avoid future health care
costs that is demonstrated by credible and publicly available
epidemiological projection models, incorporating clinical trials or
observational studies in humans, longitudinal studies, and meta-
analysis.'' This narrow, responsible approach encourages a sensible
review of health policy that Congress believes will promote public
health, and it will make it easier for us to invest in proven methods
of saving lives and money.
CBO would be required to conduct an initial analysis to determine
whether the provision would result in substantial savings outside the
10-year scoring window and to include a description of those future-
year savings in its budget projections.
The broad coalition of groups supporting this bill includes: the
Academy of Nutrition and Dietetics, Aetna, Allscripts, American
Association of Diabetes Educators, American College of Occupational
Medicine, American College of Preventative Medicine, American Diabetes
Association, BlueCross BlueShield Tennessee, Building Healthier
America, Care Continuum Alliance, Council for Affordable Health
Coverage, Dialysis Patient Citizens, The Endocrine Society, Healthcare
Leadership Council, Healthways, IHRSA: International Health Racquet &
Sportsclub Association, Johnson & Johnson, Marshfield Clinic, Memorial
Care Health System, National Association of Public Hospitals and Health
Systems, National Retail Federation, National Kidney Foundation, Novo
Nordisk, the Partnership to Fight Chronic Disease, Sanofi, Texas Health
Resources, and Weight Watchers.
I also wish to applaud the bipartisan House sponsors of this
legislation--two physicians--Representatives Michael Burgess of Texas
and Donna Christensen of the U.S. Virgin Islands, for their vision in
introducing the companion bill, HR 2663, which now has 19 cosponsors.
I urge my colleagues to cosponsor this legislation, which will give
our budget process the flexibility needed to dramatically bend the
health care cost curve.
______
By Mr. UDALL of Colorado (for himself, Mr. Alexander, Ms.
Murkowski, Mr. Udall of New Mexico, and Mr. Heinrich):
S. 1423. A bill to amend the Energy Employees Occupational Illness
Compensation Program Act of 2000 to strengthen the quality control
measures in place for part B lung disease claims and to establish the
Advisory Board on Toxic Substances and Worker Health for the contractor
employee compensation program under subtitle E of such Act; to the
Committee on Health, Education, Labor, and Pensions.
Mr. UDALL of Colorado. Mr. President, I rise to speak about
bipartisan legislation I am introducing today with Senator Alexander to
provide much needed help to our Cold War patriots.
In 2000, Congress passed the Energy Employees Occupational Illness
Compensation Program to help Cold War workers like those from Rocky
Flats in my home state of Colorado and other nuclear weapons facilities
around the country. This effort was designed to get these patriots the
help they need to treat cancer and other illnesses they developed as a
result of exposure to radiation. Since then, the program has been
plagued by procedural inconsistencies and delays preventing former
nuclear workers from accessing the benefits they are owed.
In March 2010, the U.S. Government Accountability Office issued a
report on the efficacy of EEOICPA, confirming workers' ongoing
frustrations with the program and recommending that Congress consider
creating an advisory board. More recently, in March 2013, the Institute
of Medicine issued a report recommending that an external advisory
panel be created to review the health effects of the Department of
Labor's approach to awarding benefits.
Today, Senator Alexander and I are reintroducing our bill requiring
the President to establish an independent advisory panel to do just
that. This advisory board would add much needed transparency and
certainty to decisions made affecting workers' compensation and access
to benefits.
Some 600,000 Cold War era workers, including thousands of workers at
Rocky Flats, put their health on the line to preserve our national
security during one of the most uncertain times in our nation's
history. They were exposed to radiation and are sick and dying. Our
country made a commitment to these patriots, but so far that promise
has not been kept. Coloradans find that unacceptable. We cannot let
another family suffer through the uncertainty of delays caused by
bureaucratic red tape or see their loved ones denied the benefits they
deserve. It is time for us to do right by these workers.
I urge my colleagues to join me and Senator Alexander in this fight
by cosponsoring this important legislation.
______
By Mr. DURBIN (for himself and Mr. Blumenthal):
S. 1425. A bill to improve the safety of dietary supplements by
amending the Federal Food, Drug, and Cosmetic Act to require
manufacturers of dietary supplements to register dietary supplements
with the Food and Drug Administration and to amend labeling
requirements with respect to dietary supplements; to the Committee on
Health, Education, Labor, and Pensions.
Mr. DURBIN. 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. 1425
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 ``Dietary Supplement Labeling
Act of 2013''.
SEC. 2. REGULATION OF DIETARY SUPPLEMENTS.
(a) Registration Requirements.--
(1) In general.--Section 415(a) of the Federal Food, Drug,
and Cosmetic Act (21 U.S.C. 350d(a)) is amended by adding at
the end the following:
``(6) Requirements with respect to dietary supplements.--
``(A) In general.--A facility engaged in manufacturing or
processing dietary supplements that is required to register
under this section shall comply with the requirements of this
paragraph, in addition to the other requirements of this
section.
``(B) Additional information.--
``(i) In general.--A facility described in subparagraph (A)
shall submit a registration under paragraph (1) that
includes, in addition to the information required under
paragraph (2)--
[[Page S6217]]
``(I) a description of each dietary supplement manufactured
or processed by such facility;
``(II) a list of all ingredients in each such dietary
supplement; and
``(III) a copy of the label for each such dietary
supplement.
``(ii) Public availability.--The Secretary shall make the
information provided under clause (i) publicly available,
including by posting such information on the Internet Web
site of the Food and Drug Administration.
``(C) Registration with respect to new, reformulated, and
discontinued dietary supplements.--
``(i) In general.--Not later than the date described in
clause (ii), if a facility described in subparagraph (A)--
``(I) manufactures or processes a dietary supplement that
the facility previously did not manufacture or process and
for which the facility did not submit the information
required under subclauses (I) through (III) of subparagraph
(B)(i);
``(II) reformulates a dietary supplement for which the
facility previously submitted the information required under
subclauses (I) through (III) of subparagraph (B)(i); or
``(III) no longer manufactures or processes a dietary
supplement for which the facility previously submitted the
information required under subclauses (I) through (III) of
subparagraph (B)(i),
such facility shall submit to the Secretary an updated
registration describing the change described in subclause
(I), (II), or (III) and, in the case of a facility described
in subclause (I) or (II), containing the information required
under subclauses (I) through (III) of subparagraph (B)(i).
``(ii) Date described.--The date described in this clause
is--
``(I) in the case of a facility described in subclause (I)
of clause (i), 30 days after the date on which such facility
first markets the dietary supplement described in such
subclause;
``(II) in the case of a facility described in subclause
(II) of clause (i), 30 days after the date on which such
facility first markets the reformulated dietary supplement
described in such subclause; or
``(III) in the case of a facility described in subclause
(III) of clause (i), 30 days after the date on which such
facility removes the dietary supplement described in such
subclause from the market.''.
(2) Enforcement.--Section 403 of the Federal Food, Drug,
and Cosmetic Act (21 U.S.C. 343) is amended by adding at the
end the following:
``(z) If it is a dietary supplement for which a facility is
required to submit the registration information required
under section 415(a)(6) and such facility has not complied
with the requirements of such section 415(a)(6) with respect
to such dietary supplement.''.
(b) Labeling.--
(1) Establishment of labeling requirements.--Chapter IV of
the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 341 et
seq.) is amended by inserting after section 411 the
following:
``SEC. 411A. DIETARY SUPPLEMENTS.
``(a) Dietary Supplement Ingredients.--Not later than 1
year after the date of enactment of the Dietary Supplement
Labeling Act of 2013, the Secretary shall compile a list of
dietary supplement ingredients and proprietary blends of
ingredients that the Secretary determines could cause
potentially serious adverse events, drug interactions, or
contraindications, or potential risks to subgroups such as
children and pregnant or breastfeeding women.
``(b) IOM Study.--The Secretary shall seek to enter into a
contract with the Institute of Medicine under which the
Institute of Medicine shall evaluate dietary supplement
ingredients and proprietary blends of ingredients, including
those on the list compiled by the Secretary under subsection
(a), and scientific literature on dietary supplement
ingredients and, not later than 18 months after the date of
enactment of the Dietary Supplement Labeling Act of 2013,
submit to the Secretary a report evaluating the safety of
dietary supplement ingredients and proprietary blends of
ingredients the Institute of Medicine determines could cause
potentially serious adverse events, drug interactions, or
contraindications, or potential risks to subgroups such as
children and pregnant or breastfeeding women.
``(c) Establishment of Requirements.--Not later than 2
years after the date on which the Institute of Medicine
issues the report under subsection (b), the Secretary, after
providing for public notice and comment and taking into
consideration such report, shall--
``(1) establish mandatory warning label requirements for
dietary supplement ingredients that the Secretary determines
to cause potentially serious adverse events, drug
interactions, or contraindications, or potential risks to
subgroups; and
``(2) identify proprietary blends of ingredients for which,
because of potentially serious adverse events, drug
interactions, or contraindications, or potential risks to
subgroups such as children and pregnant or breastfeeding
women, the weight per serving of the ingredient in the
proprietary blend shall be provided on the label.
``(d) Updates.--As appropriate, the Secretary, after
providing for public notice and comment, shall update--
``(1) the list compiled under subsection (a);
``(2) the mandatory warning label requirements established
under paragraph (1) of subsection (c); and
``(3) the requirements under paragraph (2) of subsection
(c).''.
(2) Enforcement.--Section 403 of the Federal Food, Drug,
and Cosmetic Act (21 U.S.C. 343) is amended--
(A) in paragraph (q)(5)(F)(ii), by inserting ``, and for
each proprietary blend identified by the Secretary under
section 411A(c)(2), the weight of such proprietary blend,''
after ``ingredients)''; and
(B) in paragraph (s)(2)--
(i) in clause (A)(ii)(II), by inserting ``, and for each
proprietary blend identified by the Secretary under section
411A(c)(2), the weight of each such proprietary blend per
serving'' before the semicolon at the end;
(ii) in clause (D)(iii), by striking ``or'' at the end;
(iii) in clause (E)(ii)(II), by striking the period at the
end and inserting a semicolon; and
(iv) by adding at the end the following:
``(F) the label does not include information with respect
to potentially serious adverse events, drug interactions, or
contraindications, or potential risks to subgroups such as
children and pregnant or breastfeeding women, as required
under section 411A(c)(1); or
``(G) the label does not include the batch number.''.
(c) Structure and Function Claims.--Section 403(r)(6)(B) of
the Federal Food, Drug, and Cosmetic Act (21 U.S.C.
343(r)(6)(B)) is amended by inserting ``, and provides such
substantiation to the Secretary, as the Secretary may
require'' after ``misleading''.
(d) Conventional Foods.--The Secretary of Health and Human
Services, not later than 1 year after the date of enactment
of this Act and after providing for public notice and
comment, shall establish a definition for the term
``conventional food'' for purposes of the Federal Food, Drug,
and Cosmetic Act (21 U.S.C. 301 et seq.). Such definition
shall take into account conventional foods marketed as
dietary supplements, including products marketed as dietary
supplements that simulate conventional foods.
______
By Mr. GRASSLEY (for himself and Mr. Franken):
S. 1427. A bill to amend title 11 of the United States Code to
clarify the rule allowing discharge as a nonpriority claim of
governmental claims arising from the disposition of farm assets under
chapter 12 bankruptcies; to the Committee on Finance.
Mr. GRASSLEY. Mr. President, I rise today to introduce, along with
Senator Franken, the Family Farmer Bankruptcy Clarification Act of
2013. We introduced similar legislation in the 112th Congress, but the
Senate never had a chance to consider the bill. The bill addresses the
2012 United States Supreme Court case Hall v. United States. In a 5-4
decision, the Supreme Court ruled that a provision I inserted into the
2005 Bankruptcy Abuse Prevention and Consumer Protection Act did not
accomplish what we in Congress intended. The Family Farmer Bankruptcy
Clarification Act of 2013 corrects this and clarifies that bankrupt
family farmers reorganizing their debts are able to treat capital gains
taxes owed to a governmental unit, arising from the sale of farm assets
during a bankruptcy, as general unsecured claims. This bill will remove
the Internal Revenue Service's veto power over a bankruptcy
reorganization plan's confirmation, giving the family farmer a chance
to reorganize successfully.
In 1986 Congress enacted Chapter 12 of the Bankruptcy Code to provide
a specialized bankruptcy process for family farmers. In 2005 Chapter 12
was made permanent. Between 1986 and 2005 we learned what aspects
worked and did not work for family farmers reorganizing in bankruptcy.
One problematic area was where a family farmer needed to sell assets in
order to generate cash for the reorganization. Specifically, a family
farmer would have to sell portions of the farm to generate cash to fund
a reorganization plan so that the creditors could receive payment.
Unfortunately, in situations like this, the family farmer is selling
land that has been owned for a very long time, with a very low cost
basis. Thus, when the land is sold, the family farmer is hit with a
substantial capital gains tax, which is owed to the Internal Revenue
Service.
Under the Bankruptcy Code, taxes owed to the Internal Revenue Service
receive priority treatment. Holders of priority claims must receive
payment in full, unless the claim holder agrees to be treated
differently. This creates problems for the family farmer who needs the
cash to pay creditors to reorganize. However, since the Internal
Revenue Service has the ability to require full payment, they hold veto
[[Page S6218]]
power over a plan's confirmation, which means in many instances the
plan will not be confirmed. This does not make sense if the goal is to
give the family farmer a fresh start. Thus, in 2005 Congress said that
in these limited situations, the taxes owed to the Internal Revenue
Service would be stripped of their priority and treated as general,
unsecured debt. This removed the government's veto power over plan
confirmation and paved the way for family farmers to reorganize.
Unfortunately, in Hall v. United States, the Supreme Court ruled that
despite Congress's express goal of helping family farmers, the language
inserted into the Bankruptcy Code in 2005 conflicted with the Tax Code.
The Hall case was one of statutory interpretation. There is no question
what Congress was trying to do; rather, did Congress use the correct
language? My goal, along with others at the time, was to relieve family
farmers from having their reorganization plans fail because of huge tax
liabilities to the federal government. Justice Breyer noted this in the
dissent: ``Congress was concerned about the effect on the farmer of
collecting capital gains tax debts that arose during, and were
connected with, the Chapter 12 proceedings themselves. . . . The
majority does not deny the importance of Congress' objective. Rather,
it feels compelled to hold that Congress put the Amendment in the wrong
place.'' Hall v. United States, 132 S.Ct. 1882, 1897 (2012) (Breyer,
J., dissenting) (internal citations and quotations omitted).
As a result of the Hall case, family farmers facing bankruptcy now
find themselves caught in a tough spot. The rules have now changed and
must be corrected in order to provide certainty and clarity in the law.
The Family Farmer Bankruptcy Clarification Act of 2013 will provide the
clarity needed to help family farmers.
This bill, which has been worked on over the past year to make sure
the problem is addressed correctly, adds a new section 1232 to title 11
of the United States Code. This new section, along with other
conforming changes to the Bankruptcy Code, will provide clarity to
practitioners and courts as to how these claims are to be treated
during bankruptcy. I am pleased that what we are introducing today,
building from the bill we introduced last Congress, is an improved
product that can help family farmers who are facing hard times. The
Family Farmer Bankruptcy Clarification Act of 2013 will ensure that
what Congress sought to do in 2005 actually occurs. In the wake of the
Hall decision, clarification is needed to help family farmers
reorganize successfully.
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. 1427
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 ``Family Farmer Bankruptcy
Clarification Act of 2013''.
SEC. 2. CLARIFICATION OF RULE ALLOWING DISCHARGE TO
GOVERNMENTAL CLAIMS ARISING FROM THE
DISPOSITION OF FARM ASSETS UNDER CHAPTER 12
BANKRUPTCIES.
(a) In General.--Subchapter II of chapter 12 of title 11,
United States Code, is amended by adding at the end the
following:
``Sec. 1232. Claim by a governmental unit based on the
disposition of property used in a farming operation
``(a) Any unsecured claim of a governmental unit against
the debtor or the estate that arises before the filing of the
petition, or that arises after the filing of the petition and
before the debtor's discharge under section 1228, as a result
of the sale, transfer, exchange, or other disposition of any
property used in the debtor's farming operation--
``(1) shall be treated as an unsecured claim arising before
the date on which the petition is filed;
``(2) shall not be entitled to priority under section 507;
``(3) shall be provided for under a plan; and
``(4) shall be discharged in accordance with section 1228.
``(b) For purposes of applying sections 1225(a)(4),
1228(b)(2), and 1229(b)(1) to a claim described in subsection
(a) of this section, the amount that would be paid on such
claim if the estate of the debtor were liquidated in a case
under chapter 7 of this title shall be the amount that would
be paid by the estate in a chapter 7 case if the claim were
an unsecured claim arising before the date on which the
petition was filed and were not entitled to priority under
section 507.
``(c) For purposes of applying sections 523(a), 1228(a)(2),
and 1228(c)(2) to a claim described in subsection (a) of this
section, the claim shall not be treated as a claim of a kind
specified in section 523(a)(1).
``(d)(1) A governmental unit may file a proof of claim for
a claim described in subsection (a) that arises after the
date on which the petition is filed.
``(2) If a debtor files a tax return after the filing of
the petition for a period in which a claim described in
subsection (a) arises, and the claim relates to the tax
return, the debtor shall serve notice of the claim on the
governmental unit charged with the responsibility for the
collection of the tax at the address and in the manner
designated in section 505(b)(1). Notice under this paragraph
shall state that the debtor has filed a petition under this
chapter, state the name and location of the court in which
the case under this chapter is pending, state the amount of
the claim, and include a copy of the filed tax return and
documentation supporting the calculation of the claim.
``(3) If notice of a claim has been served on the
governmental unit in accordance with paragraph (2), the
governmental unit may file a proof of claim not later than
180 days after the date on which such notice was served. If
the governmental unit has not filed a timely proof of the
claim, the debtor or trustee may file proof of the claim that
is consistent with the notice served under paragraph (2). If
a proof of claim is filed by the debtor or trustee under this
paragraph, the governmental unit may not amend the proof of
claim.
``(4) A claim filed under this subsection shall be
determined and shall be allowed under subsection (a), (b), or
(c) of section 502, or disallowed under subsection (d) or (e)
of section 502, in the same manner as if the claim had arisen
immediately before the date of the filing of the petition.''.
(b) Technical and Conforming Amendments.--
(1) In general.--Subchapter II of chapter 12 of title 11,
United States Code, is amended--
(A) in section 1222(a)--
(i) in paragraph (2), by striking ``unless--'' and all that
follows through ``the holder'' and inserting ``unless the
holder'';
(ii) in paragraph (3), by striking ``and'' at the end;
(iii) in paragraph (4), by striking the period at the end
and inserting ``; and''; and
(iv) by adding at the end the following:
``(5) subject to section 1232, provide for the treatment of
any claim by a governmental unit of a kind described in
section 1232(a).'';
(B) in section 1228--
(i) in subsection (a)--
(I) in the matter preceding paragraph (1)--
(aa) by inserting a comma after ``all debts provided for by
the plan''; and
(bb) by inserting a comma after ``allowed under section 503
of this title''; and
(II) in paragraph (2), by striking ``the kind'' and all
that follows and inserting ``a kind specified in section
523(a) of this title, except as provided in section
1232(c).''; and
(ii) in subsection (c)(2), by inserting ``, except as
provided in section 1232(c)'' before the period at the end;
and
(C) in section 1229(a)--
(i) in paragraph (2), by striking ``or'' at the end;
(ii) in paragraph (3), by striking the period at the end
and inserting ``; or''; and
(iii) by adding at the end the following:
``(4) provide for the payment of a claim described in
section 1232(a) that arose after the date on which the
petition was filed.''.
(2) Table of sections.--The table of sections for
subchapter II of chapter 12 of title 11, United States Code,
is amended by adding at the end the following:
``1232. Claim by a governmental unit based on the disposition of
property used in a farming operation.''.
(c) Effective Date.--The amendments made by this section
shall apply to any bankruptcy case that--
(1) is pending on the date of enactment of this Act and
relating to which an order of discharge under section 1228 of
title 11, United States Code, has not been entered; or
(2) commences on or after the date of enactment of this
Act.
______
By Mr. RISCH (for himself and Mr. Crapo):
S. 1430. A bill to authorize the continued use of certain water
diversions located on National Forest System land in the Frank Church-
River of No Return Wilderness and the Selway-Bitterroot Wilderness in
the State of Idaho, and for other purposes; to the Committee on Energy
and Natural Resources.
Mr. RISCH. Mr. President, I rise today to introduce a bill called the
Idaho Wilderness Water Facilities Act. This bill is identical to the
House version, H.R. 876, which was introduced and carried through the
House by my colleague from Idaho, Representative Mike Simpson, who did
yeoman's work on pursuing this and putting it together and shepherding
it through. It passed unanimously in the House. I thank him on behalf
of all Idahoans for his work on this issue.
[[Page S6219]]
The need for this legislation is simple. The Frank Church River of No
Return Wilderness, which was designated by Congress in 1980, abuts the
Selway-Bitterroot Wilderness area, which was designated by Congress in
1964. These areas contain some of the largest and most rugged remote
tracts of land in the lower 48 States. It is magnificent in its
beauty--substantially better, in my opinion, than the Alps.
There are a number of water diversions within the Idaho wilderness
areas that have existed since the time of this legislation--since the
time these wilderness areas were established. Although the diversions
continue to exist, the owners currently lack authority to maintain and
repair the facilities.
Predating the existence of these two wilderness areas, private
landowners had received permits to maintain and repair water diversions
that existed on National Forest System lands. The water is used for a
combination of many things, including, but not limited to, drinking
water for private cabins and ranches and also for generating
electricity in some places on a very small scale. Many of the permits
have since expired, leaving those who own the water diversions without
any options for mechanically maintaining their water systems. In some
cases, this lack of management threatens the environment and the
watersheds in which they exist.
The Idaho Wilderness Water Facilities Act will give the Secretary of
Agriculture the authority to reissue and issue special use
authorizations to the owners of these diversion facilities within the
Frank Church and the Selway Wilderness areas for the continued
maintenance of their water facilities. The permits would only be issued
if the owner could prove the facility existed prior to those lands
being designated as wilderness, the facility has been used to deliver
water to the owner's land since the designation, and the owner had a
valid water right and it would not be practical to move the facility
outside of the wilderness area. Undoubtedly, in exercising the
discretion, the Secretary would ensure that in no way would it
denigrate these wilderness areas. There are several different
individuals or businesses that have water diversions in these
wilderness areas that meet the description I have given.
Earlier this week the Senate Committee on Energy and Natural
Resources held a hearing on H.R. 876. The U.S. Forest Service appeared
at that hearing and testified in support of this bill. I look forward
to working with Chairman Wyden and Ranking Member Murkowski to pass
this bill quickly so as to allow for the maintenance of this water
infrastructure.
______
By Ms. HIRONO:
S. 1432. A bill to direct the Secretary of the Interior to study the
suitability and feasibility of designating portions of the Ka'u Coast
in the State of Hawaii as a unit of the National Park System; to the
Committee on Energy and Natural Resources.
Ms. HIRONO. Mr. President, I rise today to introduce the Ka`u Coast
Preservation Act of 2013, a bill directing the National Park Service to
assess the feasibility of designating certain coastal lands on the Ka`u
Coast of the island of Hawaii as units of the National Park System.
The National Park Service conducted a reconnaissance survey in 2006
that made a preliminary assessment of whether the Ka`u Coast would meet
the National Park Service's demanding criteria as a resource of
national significance. The reconnaissance survey concluded that ``based
upon the significance of the resources in the study area and the
current integrity and intact condition of these resources, a
preliminary finding of national significance and suitability can be
concluded.'' The report goes on to recommend that Congress proceed with
a full resource study of the area.
Since the time of the initial reconnaissance report and my
introduction of this Act in previous Congresses, two additional
properties in the Ka`u that deserve evaluation have come to my
attention: the Kahuku Coastal Property, also known as Sands of South
Kona and Road to the Sea, and the Nani Kahuku `Aina property adjacent
to Pohue Bay. I have added these areas to the study area for the full
resource study.
The coastline of Ka`u is still largely unspoiled. The study area
contains significant natural, geological, and archeological features.
The northern part of the study area is adjacent to Hawaii Volcanoes
National Park and contains a number of noteworthy geological features,
including an ancient lava tube known as the Great Crack, which the
National Park Service has expressed interest in acquiring in the past.
The study area includes both black and green sand beaches as well as
a significant number of endangered and threatened species, most notably
the endangered hawksbill turtle, at least half of the Hawaiian
population of this rare sea turtle nests within the study area, the
threatened green sea turtle, the highly endangered Hawaiian monk seal,
the endangered Hawaiian hawk, the endangered Hawaiian bat, native bees,
the endangered and very rare Hawaiian orange-black damselfy, the
largest population in the State, and a number of native birds. Humpback
whales and spinner dolphins also frequent the area. The Ka`u Coast also
boasts some of the best remaining examples of native coastal vegetation
in Hawaii.
The archeological resources related to ancient Hawaiian settlements
within the study area are also very impressive. These include dwelling
complexes, heiau, religious shrines, walls, fishing and canoe houses or
sheds, burial sites, petroglyphs, water and salt collection sites,
caves, and trails. The Ala Kahakai National Historic Trail runs through
the study area.
The Ka'u Coast is a truly remarkable area: its combination of
natural, archeological, cultural, and recreational resources, as well
as its spectacular viewscapes, are an important part of Hawaii's and
our nation's natural and cultural heritage.
As this process evolves, the successful preservation of this pristine
land will depend on the federal government working closely with local
stakeholders, seeking their input, and collaborating with them to
address concerns as they arise. I encourage the National Park Service
to continue working with all involved to ensure this coastline is
preserved for decades to come.
I believe a full feasibility study, which was recommended in the
reconnaissance survey, will confirm that the area meets the National
Park Service's high standards as an area of national significance.
I urge my colleagues to join me in supporting this bill.
______
By Mr. WYDEN (for himself and Mr. Merkley):
S. 1437. A bill to provide for the release of the reversionary
interest held by the United States in certain land conveyed in 1954 by
the United States, acting through the Director of the Bureau of Land
Management, to the State of Oregon for the establishment of the
Hermiston Agricultural Research and Extension Center of Oregon State
University in Hermiston, Oregon; to the Committee on Energy and Natural
Resources.
Mr. WYDEN. Mr. President, today I rise to introduce a bill that will
give Oregon State University the flexibility to continue its important
agricultural work in Hermiston, Oregon. I am pleased to be joined on
this bill with my colleague from Oregon, Senator Merkely. I look
forward to working with Senator Merkley, other colleagues, and
supporters of the bill to update the federal interests in the land to
match current needs and conditions.
The Hermiston Agricultural Research & Extension Center, HAREC,
provides support to one of the most unique and important agricultural
areas in the world: the Columbia Basin region of Oregon and Washington.
As one of Oregon State University's, OSU, 12 Agricultural Experiment
Stations, HAREC concentrates on the discovery and implementation of
agricultural opportunities while also providing solutions to production
issues for regional growers and beyond.
Research at HAREC emphasizes identification of new crop
opportunities, improved production practices that save money while
reducing inputs, plant breeding and varietal evaluation of cereals and
potatoes. Through this work it has developed new lines with higher
nutritional value, integrated pest management of insects and insect-
[[Page S6220]]
transmitted diseases, and provided information related to environmental
issues and salmon restoration. In recent years the center provided
leadership, research, and new knowledge essential to allow growers to
diversify production and convert 30,000 acres of commodity crops to
high-value crops. The station has led efforts to cultivate value-added
agriculture in Morrow and Umatilla counties, resulting in over
$50,000,000 in annual economic return.
The history of HAREC and a Umatilla agricultural research center
spans more than a century. The Federal Government paved the way in the
development of farming and ranching in the Umatilla Basin. In 1954, the
Bureau of Land Management granted land to the State of Oregon on the
condition that the land is used for cooperative agricultural
experimental work. Over the past nearly 60 years, OSU has developed a
center with state-of-the-art laboratories, irrigation technology
abilities, greenhouses, screenhouses and research and extension
faculty. HAREC now supports nearly 500,000 acres of irrigated
agriculture.
Just as agriculture in the Columbia Basin has grown by leaps and
bounds since 1954, so has the community of Hermiston. This bill removes
the reversionary clause from the original land grant while conditioning
that any consideration gained by OSU from the sale, lease, or other use
of the land be put back into agricultural experimental and research
work. It gives OSU the flexibility to adapt to the population growth
and city expansion that will ultimately necessitate the relocation of
HAREC from inside the urban growth boundary to a more rural location.
Without this bill, moving the station would mean triggering the federal
reversionary clause and losing HAREC land and all the buildings and
improvements over nearly six decades to the Federal Government. I'm
sponsoring this bill to ensure HAREC can continue for another hundred
years.
Regional leaders and Oregon State University support removing the
barriers to the continued operation of the center. I express my
gratitude for their work with me on this legislation. I also look
forward to working with Senator Merkley to advance this bill and
support the agricultural heart of the regional economy.
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. 1437
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 ``Hermiston Agricultural
Research and Extension Center Land Conveyance Act''.
SEC. 2. DEFINITIONS.
In this Act:
(1) Research center land.--The term ``research center
land'' means the approximately 290 acres of land in
Hermiston, Oregon, identified as the ``Reversionary Interest
Area'' on the map entitled ``Hermiston Agricultural Research
and Extension Center'' and dated July 23, 2013, including any
improvements to, and building on, the land.
(2) Patent.--The term ``patent'' means the patent granted
by the Director of the Bureau of Land Management (acting on
behalf of the United States) to the State, numbered 130889,
and dated September 17, 1954.
(3) State.--The term ``State'' means the State of Oregon
(acting through the Oregon State Board of Higher Education on
behalf of Oregon State University).
SEC. 3. RELEASE OF REVERSIONARY INTEREST AND RESERVATION OF
MINERAL RIGHTS TO BUREAU OF LAND MANAGEMENT
LAND CONVEYED TO THE STATE OF OREGON FOR THE
ESTABLISHMENT OF HERMISTON AGRICULTURAL
RESEARCH AND EXTENSION CENTER.
(a) Release of Reversionary Interest and Reservation of
Mineral Rights.--Subject to subsection (b), there are
released by the United States without consideration--
(1) the reversionary interest retained by the United States
to the research center land under the patent; and
(2) the reservation of mineral rights by the United States
to the research center land under the patent.
(b) Condition.--The release of the reversionary interest
under subsection (a)(1) is subject to the condition that the
State agrees to use any consideration received by the State
from the sale, lease, or other conveyance of the research
center land after the date of enactment of this Act for
agricultural experimental and research work of Oregon State
University.
(c) Instrument of Release.--The Secretary of the Interior
(acting through the Director of the Bureau of Land
Management) shall execute and file in the appropriate office
a deed of release, amended deed, or other appropriate
instrument reflecting the release under subsection (a).
______
By Mr. REID (for Ms. Landrieu):
S. 1440. A bill to amend the Small Business Act to allow the use of
physical damage disaster loans for the construction of safe rooms; to
the Committee on Small Business and Entrepreneurship.
Ms. LANDRIEU. Mr. President, I come to the floor today to speak on an
issue that is of great importance to my home state of Louisiana:
disaster preparedness. As you know, along the Gulf Coast, we keep an
eye trained on the Gulf of Mexico during hurricane season. This is
following the devastating one-two punch of Hurricanes Katrina and Rita
of 2005 as well as Hurricanes Gustav and Ike in 2008. Unfortunately,
our region also has had to deal with the economic and environmental
damage from the Deepwater Horizon disaster in 2010 and more recently
Hurricane Isaac. For this reason, as Chair of the Senate Committee on
Small Business and Entrepreneurship, ensuring Federal disaster programs
are effective and responsive to disaster victims is one of my top
priorities. While the Gulf Coast is prone to hurricanes, other parts of
the country are no strangers to disaster. For example, the Midwest and
Southeast have tornadoes, California experiences earthquakes and
wildfires, and the Northeast sees crippling snowstorms. So no part of
our country is spared from disasters--disasters which can and will
strike at any moment. This certainly hit home when the northeast was
struck by Hurricane Sandy in October of last year and when Moore,
Oklahoma was hit by a massive tornado earlier this summer. With this in
mind, we must ensure that families have the resources they need to be
better prepared the next time disasters strike their communities.
In order to give families in tornado prone areas more resources to
protect lives and property, I am proud to file the Tornado Family
Safety Act of 2013. Representative Tom Cole from Oklahoma is filing the
House companion bill today as well. I want to thank him for being my
partner in this effort as his district has seen firsthand how
destructive these tornadoes can be to homes and businesses. In
particular, our bill would allow U.S. Small Business Administration,
SBA, disaster home mitigation loans to go towards the construction of
tornado safe rooms. Under current law, SBA can increase the size of a
home disaster loan by 20 percent of the total damage to decrease future
disaster risk. The Small Business Act lists out examples of mitigation
activities such as ``. . . retaining walls, sea walls, grading and
contouring land, relocating utilities and modifying structures . . .''
The bill would add safe rooms as an eligible activity so homeowners
would have access to these low-interest loans. It does not replace or
duplicate other programs, but instead provides a backstop for families
in disaster prone areas.
Under guidelines from the Federal Emergency Management Agency, FEMA,
and the International Code Council, ICC, a safe room should withstand
250 mph winds and the impact of a 15-pound plank hitting a wall at 100
miles per hour, according to the Insurance Institute for Business and
Home Safety, IBHS. Safe rooms designed to the FEMA and ICC standards
are recommended for both tornadoes and hurricanes. For individual
homes, a safe room could range anywhere from $3,000 to $12,000.
The concept for the bill came about after discussions with the FEMA
and the SBA on recent disasters. We learned that safe rooms are not
allowable under FEMA preparedness grant programs. Safe rooms would be
considered construction and FEMA only allows for limited construction
under the preparedness grants for very specific items, such as
communications towers, as specified in the appropriations acts. Safe
rooms are an eligible activity under the FEMA Hazard Mitigation Grant
Program, HMGP. States decide how they use their HMGP, and reimbursing
safe room construction for homeowners could be eligible. However, given
the larger cost involved in reimbursing individual homeowners, HMGP
funded safe rooms are oftentimes community-owned not residential.
[[Page S6221]]
As I have indicated, FEMA Individual Assistance does not allow the
construction of safe rooms. FEMA does allow HMGP grants for safe rooms
and states can decide to reimburse safe room construction for
homeowners. However, most are typically community-owned not residential
since HMGP funds both single and multi-use facilities--schools,
community centers, etc. For example, according to FEMA data, out of 21
states funding safe rooms, only four states, Oklahoma, Alabama,
Mississippi, and Arkansas, represent the bulk of residential safe
rooms, appproximately 21,600 of the 21,880 funded.
But let me give you an example of how the needs for these types of
structures are often outpacing the resources currently available.
Following the May 20, 2013 tornado there, Moore, OK, Mayor Glenn Lewis
proposed a requirement that all new homes built in the city include a
safe room. Oklahoma Governor Fallin also told the Associated Press that
only 100 of the 1,752 public schools in Oklahoma have a safe room. In a
subsequent June 9, 2013, interview, Albert Ashwood, Director of the
Oklahoma Department of Emergency Management, estimated that putting
safe rooms in 1,000 Oklahoma schools, via traditional FEMA grant
programs, would cost between $500 million to $1 billion alone. So in
the near future, there is likely to be less, not more, Federal funding
available at the State level for these types of residential safe rooms.
Our bill would allow a backstop to homeowners in the event that other
Federal/State funds are not available for safe rooms for that
particular disaster.
In closing, I believe that this commonsense disaster reform will
greatly benefit homeowners impacted by future tornadoes and other
disasters.
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. 1440
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 ``Tornado Family Safety Act of
2013''.
SEC. 2. USE OF PHYSICAL DAMAGE DISASTER LOANS.
Section 7(b)(1)(A) of the Small Business Act (15 U.S.C.
636(b)(1)(A)) is amended--
(1) by striking ``the Administration may increase'' and
inserting ``the Administration may, subject to section 18(a),
increase''; and
(2) by striking ``and modifying structures'' and inserting
``, and modifying structures (including construction of a
safe room or similar storm shelter designed to protect
property and occupants from tornadoes or other natural
disasters)''.
______
By Mr. UDALL of Colorado (for himself and Mr. Bennet):
S. 1443. A bill to facilitate the remediation of abandoned hardrock
mines, and for other purposes; to the Committee on Environment and
Public Works.
Mr. UDALL of Colorado. Mr. President, today I am reintroducing
legislation designed to help promote the cleanup of abandoned and
inactive hard rock mines that are a great detriment to the environment
and public health throughout the country, but especially to the West. I
want to thank my colleague Senator Bennet for joining me in this
effort.
For over one hundred years, miners and prospectors have searched for
and developed valuable ``hard rock'' minerals--gold, silver, copper,
molybdenum, and others. Hard rock mining has played a key role in the
history of Colorado and other states, and the resulting mineral wealth
has been an important contributor to our economy and the development of
essential products.
Too often, however, the miners would abandon their work and move on,
seeking riches over the next mountain. The resulting legacy of unsafe
open mine shafts and acid mine drainages can be seen throughout the
country and especially on public lands in the West where mineral
development was encouraged to help settle our region.
Unfortunately, many of our current environmental laws designed to
mitigate the impact from operating hard rock mines are of limited
effectiveness when applied to abandoned and inactive mines. As a
result, many of these old mines continue to pollute streams and rivers
and pose a risk to the health of people who live nearby or downstream.
The bill I am reintroducing today will help address this impediment
and make it easier for volunteers, who had no role in creating the
problem, to help clean up these sites and improve the environment. It
does so by providing a new permit program under the Clean Water Act
whereby volunteers can, under an approved plan, reduce the water
pollution flowing from an abandoned mine. At the same time, volunteers
will not be exposed to the full liability and ongoing responsibility
provisions of the Clean Water Act.
I would be remiss not to thank the Environmental Protection Agency
for its work in addressing this issue. Most recently, EPA issued a
memorandum on December 12, 2012, to reduce the Clean Water Act legal
vulnerability faced by ``Good Samaritans'' by clarifying that parties
who volunteer to clean up these abandoned sites are generally not
responsible for obtaining a permit under the Clean Water Act both
during and following a successful cleanup. While this was an important
step forward, my legislation will provide binding legal protections for
Good Samaritans, allowing them to move forward--knowing the long-term
certainty of their rights--with the imperative work of mine cleanup.
The new permits proposed in this bill would help address problems
that have frustrated federal and state agencies throughout the country.
As population growth continues near these old mines, more and more
risks to public health and safety are likely to occur. We simply must
begin to address this issue--not only to improve the environment, but
also to ensure that our water supplies are safe and usable. This bill
does not address all the concerns some would-be Good Samaritans may
have about initiating cleanup projects and I am committed to continue
working to address those additional concerns, through additional
legislation and in other ways. However, this bill can make a real
difference, and I think it deserves approval without unnecessary delay.
______
By Mr. WYDEN (for himself and Mr. Isakson):
S. 1444. A bill to amend title XVIII of the Social Security Act to
provide payment under part A of the Medicare Program on a reasonable
cost basis for anesthesia services furnished by an anesthesiologist in
certain rural hospitals in the same manner as payments are provided for
anesthesia services furnished by anesthesiologist assistants and
certified anesthetists in such hospitals; to the Committee on Finance.
Mr. WYDEN. Mr. President. I am honored to join my colleague from
Georgia, Senator Johnny Isakson, in introducing a bill essential to
expanding health care options for rural hospitals and beneficiaries
living in rural areas, the Medicare Access to Rural Anesthesiology Act.
As it stands today, low Medicare Part B anesthesia payments and low
patient volume in rural areas makes it difficult for rural hospitals to
attract and retain anesthesiologists. Our legislation would take an
important step towards leveling the playing field between urban and
rural health care by ensuring that rural Medicare beneficiaries have
similar access to anesthesia services.
Generally, Medicare pays for anesthesia services under the Medicare
Part B fee schedule, but in order to attract anesthesia providers to
rural areas, a statutory exception was created in the 1980s that allows
eligible rural hospital to use Part A funds to employ or contract with
non-physician anesthesiologist assistants, AA, or certified registered
nurse anesthetists, CRNA. This policy however, does not permit eligible
hospitals to use pass-through funds to pay anesthesiologists. Leaving
anesthesiologists out also prevents AAs from receiving pass through
payment because AAs must have an anesthesiologist on premises in order
to practice. As a result, many folks in rural areas only have access to
one type of anesthesia provider compared to folks in urban areas who
can easily visit an anesthesiologist, CRNA, or an AA.
Our legislation would allow eligible rural hospitals to use ``pass-
through'' Part A funds to employ CRNAs, AAs, and anesthesiologists.
This common
[[Page S6222]]
sense change would give eligible rural hospitals the power to choose
the anesthesia providers that best suit the medical needs of their
patients, and would provide these hospitals with another tool to
recruit and retain anesthesiology professionals as well as expand the
availability of anesthesiology care in medically underserved areas.
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. 1444
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 ``Medicare Access to Rural
Anesthesiology Act of 2013''.
SEC. 2. MEDICARE PART A PAYMENT FOR ANESTHESIOLOGIST SERVICES
IN CERTAIN RURAL HOSPITALS BASED ON CRNA PASS-
THROUGH RULES.
(a) In General.--Section 1814 of the Social Security Act
(42 U.S.C. 1395f) is amended by adding at the end the
following new subsection:
``Anesthesiologist Services Provided in Certain Rural Hospitals
``(m)(1) Notwithstanding any other provision of this title,
coverage and payment shall be provided under this part for
physicians' services that are anesthesia services furnished
by a physician who is an anesthesiologist in a rural hospital
described in paragraph (3) in the same manner as payment is
made under the exception provided in section 9320(k) of the
Omnibus Budget Reconciliation Act of 1986, as amended by
section 6132 of the Omnibus Budget Reconciliation Act of 1989
(42 U.S.C. 1395k note) (relating to payment on a reasonable
cost, pass-through basis), for certified registered nurse
anesthetist services furnished by a certified registered
nurse anesthetist in a hospital described in such section.
``(2) No payment shall be made under any other provision of
this title for physicians' services for which payment is made
under this subsection.
``(3) A rural hospital described in this paragraph is a
hospital described in section 9320(k) of the Omnibus Budget
Reconciliation Act of 1986, as so amended (42 U.S.C. 1395k
note), except that--
``(A) any reference in such section to a `certified
registered nurse anesthetist' or `anesthetist' is deemed a
reference to a `physician who is an anesthesiologist' or
`anesthesiologist', respectively; and
``(B) any reference to `January 1, 1988' or `1987' is
deemed a reference to such date and year as the Secretary
shall specify.''.
(b) Effective Date.--The amendment made by subsection (a)
shall apply to services furnished during cost reporting
periods beginning on or after the date of the enactment of
this Act.
______
By Mr. ROCKEFELLER:
S. 1449. A bill to amend the Internal Revenue Code of 1986 to provide
that income attributable to certain passenger cruise voyages beginning
or ending in the United States shall be treated as effectively
connected with the conduct of a trade or business within the United
States; to the Committee on Finance.
Mr. ROCKEFELLER. Mr. President, today I am introducing comprehensive
legislation to repeal corporate tax loopholes that allow the cruise
industry to avoid paying its fair share of U.S. corporate income taxes.
These bills change the treatment of the revenue that foreign-based
cruise lines earn from ships that embark or disembark nearly 15 million
passengers a year in the United States. A string of recent incidents
has demonstrated that when cruise ships get into trouble, the companies
rely on the resources and assistance of the U.S. Navy and Coast Guard.
The industry also uses the services of over 20 other U.S. agencies to
the tune of millions of taxpayer dollars every year.
The majority of cruise companies are organized as foreign
corporations, even though many of their headquarters and executives are
located in the United States. By incorporating in foreign countries,
the cruise industry enjoys a special exemption under section 883 of the
Internal Revenue Code, which provides that certain foreign corporations
are not subject to U.S. taxes on income derived from the international
operation of ships, even if the source of the income is in the United
States.
Today, I am introducing two bills, S. 1449 and S. 1450. The first
would eliminate the section 883 special exemption for cruise industry
income derived from passenger cruise voyages that embark or disembark
passengers in the United States. This income would be treated as being
U.S. sourced and effectively connected with a U.S. trade or business,
so it would be subject to U.S. taxes at the same rate as other income.
The second bill would impose a 5 percent excise tax on gross income
from cruises where passengers embark or disembark in the United States.
Funds generated from the excise tax will help fund a national program
to make infrastructure improvements vital to the efficient
transportation of goods and services.
For too long, the cruise industry has been able to use taxpayer
provided services without actually paying for them. It is time the
cruise industry begins to pay for the services it uses.
Mr. President, I ask unanimous consent that the text of the bills be
printed in the Record.
There being no objection, the text of the bills were ordered to be
printed in the Record, as follows:
S. 1449
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. TAXATION OF UNITED STATES CRUISE INDUSTRY INCOME
OF NONRESIDENT ALIENS AND FOREIGN CORPORATIONS.
(a) United States Cruise Industry Income Treated as
Effectively Connected to the Conduct of a Trade or Business
Within the United States.--
(1) Income from sources without the united states.--
(A) In general.--Paragraph (4) of section 864(c) of the
Internal Revenue Code of 1986 is amended by redesignating
subparagraph (D) as subparagraph (C) and by inserting after
subparagraph (C) the following new subparagraph:
``(C) United states cruise industry income.--
``(i) In general.--United States cruise industry income
shall be treated as effectively connected with the conduct of
a trade or business within the United States.
``(ii) United states cruise industry income.--For purposes
of this subparagraph, the term `United States cruise industry
income' means income attributable to any covered passenger
cruise (as defined in paragraph (8)), including income
directly or indirectly attributable to the carriage of
passengers and any on-board or off-board activities
incidental to such covered passenger cruise.''.
(B) Covered passenger cruise.--Subsection (c) of section
864 of such Code is amended by adding at the end the
following new paragraph:
``(8) Covered passenger cruise.--For purposes of paragraph
(4)(C)--
``(A) Definition.--
``(i) In general.--The term `covered passenger cruise'
means a voyage of a commercial passenger cruise vessel--
``(I) that extends over 1 or more nights,
``(II) during which passengers embark or disembark the
vessel in the United States.
``(ii) Exceptions for certain voyages.--Such term shall not
include any voyage--
``(I) on any vessel owned or operated by the United States,
a State, or any subdivision thereof,
``(II) which occurs exclusively on the inland waterways of
the United States, or
``(III) in which a vessel in the usual course of employment
proceeds, without an intervening foreign port of call from
one port or place in the United States to the same port or
place or to another port or place in the United States.
``(B) Passenger cruise vessel.--For purposes of
subparagraph (A)--
``(i) In general.--The term `passenger cruise vessel' means
any passenger vessel having berth or stateroom accommodations
for at least 250 passengers.
``(ii) Exceptions.--Such term shall not include any ferry,
recreational vessel, sailing school vessel, small passenger
vessel, offshore supply vessel, or any other vessel
determined under regulations by the Secretary to be excluded
from the application of this part.
``(iii) Definitions.--Any term used in this section which
used in chapter 21 of title 46, United States Code, shall
have the meaning given such term under section 2101 of such
title.''.
(C) Conforming amendment.--Subparagraph (A) of section
864(c)(4) of such Code is amended by striking ``subparagraphs
(B) and (C)'' and inserting ``subparagraphs (B), (C), and
(D)''.
(2) Income from sources within the united states.--
Paragraph (4) of section 887(b) of such Code is amended by
adding at the end the following flush sentence:
``The preceding sentence shall not apply to with respect to
any United State source gross transportation income which is
United States cruise industry income (as defined in section
864(c)((4)(C)(ii)).''.
(b) Repeal of Exemption From Gross Income for Certain
Taxpayers.--
(1) Nonresident aliens.--Paragraph (1) of section 872(b) of
the Internal Revenue Code of 1986 is amended by inserting
``(other than United States cruise industry income (as
defined in section 864(c)(4)(C)))'' after ``or ships''.
(2) Foreign corporations.--Paragraph (1) of section 883(a)
of such Code is amended by inserting ``(other than United
States cruise industry income (as defined in section
864(c)(4)(C)))'' after ``or ships''.
[[Page S6223]]
(c) Income Tax Treaties.--Section 894 of the Internal
Revenue Code of 1986 is amended by adding at the end the
following new subsection:
``(d) Special Rule for United States Cruise Industry
Income.--Notwithstanding subsection (a), no tax exemption or
reduced tax rate shall be permitted under any treaty of the
United States with respect to United States cruise industry
income (as defined in section 864(c)(4)(C)).''.
(d) Effective Date.--The amendments made by this section
shall apply to income attributable to voyages made after the
date of the enactment of this Act.
S. 1450
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. EXCISE TAX ON GROSS RECEIPTS DERIVED FROM CRUISES.
(a) In General.--Subchapter B of chapter 36 of the Internal
Revenue Code of 1986 is amended by inserting after section
4472 the following:
``PART II--AD VALOREM TAX
``Sec. 4476. Imposition of tax.
``Sec. 4477. Definitions.
``SEC. 4476. IMPOSITION OF TAX.
``(a) In General.--In addition to any other tax, there is
hereby imposed a tax of 5 percent of the allocable amount
with respect to any covered passenger cruise.
``(b) By Whom Paid.--The tax imposed by this section shall
be paid by the person providing the covered passenger cruise.
``SEC. 4477. DEFINITIONS.
``For purposes of this section--
``(1) Covered passenger cruise.--
``(A) In general.--The term `covered passenger cruise'
means a voyage of a commercial passenger cruise vessel--
``(i) that extends over 1 or more nights,
``(ii) during which passengers embark or disembark the
vessel in the United States.
``(B) Exceptions for certain voyages.--Such term shall not
include any voyage--
``(i) on any vessel owned or operated by the United States,
a State, or any subdivision thereof,
``(ii) which occurs exclusively on the inland waterways of
the United States, or
``(iii) in which a vessel in the usual course of employment
proceeds, without an intervening foreign port of call from
one port or place in the United States to the same port or
place or to another port or place in the United States.
``(2) Passenger cruise vessel.--
``(A) In general.--The term `passenger cruise vessel' means
any passenger vessel--
``(i) having berth or stateroom accommodations for at least
250 passengers, and
``(ii) that is used in the business of carrying passengers
for hire.
``(B) Exceptions.--Such term shall not include any ferry,
recreational vessel, sailing school vessel, small passenger
vessel, offshore supply vessel, or any other vessel
determined under regulations by the Secretary to be excluded
from the application of this part.
``(C) Definitions.--Any term used in this section which is
used in chapter 21 of title 46, United States Code, shall
have the meaning given such term under section 2101 of such
title.
``(3) Allocable amount.--The term `allocable amount'
means--
``(A) in the case in which a majority of the passengers on
any covered passenger cruise embark or disembark in the
United States, 100 percent of the gross receipts attributable
to such covered passenger cruise, and
``(B) in any other case, 50 percent of the gross receipts
attributable to such covered passenger cruise.
``(4) United states.--The term `United States' includes any
possession of the United States.''.
(b) Conforming Amendment.--Subchapter B of chapter 36 of
the Internal Revenue Code of 1986 is amended by striking all
preceding section 4471 and inserting the following:
``Subchapter B--Transportation by Water
``PART I--Per Passenger Tax
``PART II--Ad Valorem Tax
``PART I--PER PASSENGER TAX
``Sec. 4471. Imposition of tax.
``Sec. 4472. Definitions.''.
(c) Effective Date.--The amendments made by this section
shall apply to voyages made after the date of the enactment
of this Act.
SEC. 2. INTERMODAL INFRASTRUCTURE TRUST FUND.
(a) In General.--Subchapter A of Chapter 98 of the Internal
Revenue Code of 1986 is amended by adding at the end the
following new section:
``SEC. 9512. INTERMODAL INFRASTRUCTURE TRUST FUND.
``(a) Creation of Trust Fund.--There is hereby established
in the Treasury of the United States a trust fund to be known
as the `Intermodal Infrastructure Trust Fund', consisting of
such amounts as may be appropriated or credited to the
Intermodal Infrastructure Trust Fund in this section or
section 9602(b).
``(b) Transfers to Intermodal Infrastructure Trust Fund.--
There are hereby appropriated to the Intermodal
Infrastructure Trust Fund amounts equivalent to the taxes
received in the Treasury under section 4471.
``(c) Expenditures From Intermodal Infrastructure Trust
Fund.--Amounts in the Intermodal Infrastructure Trust Fund
shall be available, as provided in appropriations Acts, for
transportation improvement, including--
``(1) the construction or improvement of--
``(A) passenger or freight rail lines,
``(B) highways,
``(C) bridges,
``(D) airports,
``(E) air traffic control systems,
``(F) port or marine facilities,
``(G) inland waterways,
``(H) transmission or distribution pipelines,
``(I) public transportation facilities or systems
``(J) intercity passenger bus or passenger rail facilities
or equipment, and
``(K) freight rail facilities or equipment, and
``(2) planning, preparation, or design of any project
described in paragraph (1).''.
(b) Clerical Amendment.--The table of sections for
subchapter A of Chapter 98 of such Code is amended by adding
at the end the following new item:
``Sec. 9512. Intermodal Infrastructure Trust Fund.''.
______
By Mrs. FEINSTEIN (for herself, Mr. Reid, Mr. Heller, and Mrs.
Boxer):
S. 1451. A bill to provide for environmental restoration activities
and forest management activities in the Lake Tahoe Basin, to amend
title 18, United States Code, to prohibit the importation or shipment
of quagga mussels, and for other purposes; to the Committee on
Environment and Public Works.
Mrs. FEINSTEIN. Mr. President, I rise today to again discuss the need
to restore and protect Lake Tahoe. Lake Tahoe is a national treasure.
Her alpine beauty has drawn and inspired people for centuries: artists
and poets, John Muir and Mark Twain, and countless millions the world
over.
As a girl, I went to Lake Tahoe to ride horses through the woods, to
swim in the clear blue waters and to bike around the magnificent Basin.
For over 16 years, representatives from different ends of the
political spectrum have come together to Keep Tahoe Blue.
The challenges are great. Climate change and drought have created a
persistent threat from catastrophic wildfire. Sedimentation and
pollution threaten water quality and the lake's treasured clarity. And
invasive species threaten the economy of the region.
The time to act is now, and the federal government must take a
leading role--78 percent of the land surrounding Lake Tahoe is public
land, primarily the Eldorado, Toiyabe and Tahoe National Forests.
That is why today I am reintroducing the Lake Tahoe Restoration Act
of 2013, which is co-sponsored by Senators Harry Reid, Dean Heller and
Barbara Boxer.
The bill would continue the Federal commitment at Lake Tahoe by
authorizing $415 million over ten years to improve water clarity,
reduce the threat of catastrophic fire, combat invasive species, and
restore and protect the environment in the Lake Tahoe Basin.
Specifically, it would do the following:
Provide $243 million over 10 years for the highest priority
restoration projects, according to scientific data. The legislation
authorizes at least $138 million for stormwater management and
watershed restoration projects scientifically determined to be the most
effective ways to improve water clarity.
This bill also requires prioritized ranking of environmental
restoration projects and authorizes $80 million for State and local
agencies to implement these projects with costs being split evenly
between the Federal agencies and non-federal partners.
Eligible projects must demonstrate their cost effectiveness,
stakeholder support, ability to leverage non-federal contributions and
meet environmental improvement goals.
Implementation of priority projects will improve water quality,
forest health, air quality and fish and wildlife habitat around Lake
Tahoe.
Authorizes $135 million over ten years to reduce the threat of
wildfire in Lake Tahoe. These funds will finance hazardous fuels
reduction projects including grants to local fire agencies, who must
contribute at least 25 percent of project costs.
The bill also authorizes important restoration work related to the
devastating 2007 Angora fire, which destroyed 242 residences and 67
commercial structures. Fuels treatment on Washoe Tribal lands, wildfire
prevention planning, and improvements to
[[Page S6224]]
local water district infrastructure to fight wildfires that reach urban
areas are eligible for grant funding.
The bill also creates incentives for local communities to have
dedicated funding for defensible space inspections and enforcement.
Protecting Lake Tahoe from the threat of quagga mussels and other
invasive aquatic species. Protecting Lake Tahoe from the threat of
quagga mussels and other invasive aquatic species is a major priority
because of the serious threats posed to Lake Tahoe.
University of California, Davis and University of Nevada, Reno
scientists report that they have found up to 3,000 Asian clams per
square meter at spots between Zephyr Point and Elk Point in Lake Tahoe.
The spreading Asian clam population could put sharp shells and rotting
algae on the Lake's beaches and help spread other invasive species such
as quagga mussels.
The bill would authorize $30 million for watercraft inspections and
removal of existing invasive species. It would require all watercraft
to be inspected and decontaminated if they are determined to be a risk
to the lake.
These invasive species threats are serious. For example, one quagga
or zebra mussel can lay 1 million eggs in a year. This means that a
single boat carrying quagga could devastate the lake's biology, local
infrastructure, and the local economy.
The threat to Lake Tahoe cannot be overstated. In 2007 quagga mussels
were discovered in Lake Mead. In the 6 years since, there population
has swelled exponentially. Today there are more than 3 trillion. The
infestation is probably irreversible.
There is good news. There is promising news on this front. Scientists
have begun testing a new strategy by placing long rubber mats across
the bottom of Lake Tahoe to cut off the oxygen to the Asian clams.
Early research suggests that these mats were very effective at killing
the clams. We continue to learn from this important research about how
best to manage invasive species.
We can fight off these invaders. But it will require drive and
imagination and the help authorized within this bill.
Supports reintroduction of the Lahontan Cutthroat Trout. The
legislation authorizes $20 million over 10 years for the Lahontan
Cutthroat Trout Recovery Plan. The Lahontan Cutthroat Trout is an
iconic species that has an important historic legacy in Lake Tahoe.
When John C. Fremont first explored the Truckee River in January of
1844, he called it the Salmon Trout River because he found the Pyramid
Lake Lahontan Cutthroat Trout. The trout relied on the Truckee River
and its tributaries for their spawning runs in spring, traveling up the
entire river's length as far as Lake Tahoe and Donner Lake, where they
used the cool, pristine waters and clean gravel beds to lay their eggs.
But dams, pollution and overfishing caused the demise of the Lahontan
Cutthroat Trout.
Lake Tahoe is one of the historic 11 lakes where Lahontan Cutthroat
Trout flourished in the past, and it's a critical part of the strategy
to recover the species.
Funds scientific research. The legislation authorizes $30 million
over ten years for scientific programs and research which will produce
information on long-term trends in the Basin and inform the most cost-
effective projects.
Prohibiting mining operations in the Tahoe Basin. This legislation
would prohibit new mining operations in the Basin, ensuring that the
fragile watershed and Lake Tahoe's water clarity are not threatened by
pollution from mining operations.
Increases accountability and oversight. Every project funded by this
legislation will have monitoring and assessment to determine the most
cost-effective projects and best management practices for future
projects.
The legislation also requires the Chair of the Federal Partnership to
work with the Forest Service, Environmental Protection Agency, Fish and
Wildlife Service and regional and state agencies, to prepare an annual
report to Congress detailing the status of all projects undertaken,
including project scope, budget and justification and overall
expenditures and accomplishments.
This will ensure that Congress can have oversight on the progress of
environmental restoration in Lake Tahoe.
Provides for public outreach and education. The Forest Service,
Environmental Protection Agency, Fish and Wildlife Service and Tahoe
Regional Planning Agency will implement new public outreach and
education programs including encouraging Basin residents and visitors
to implement defensible space, conducting best management practices for
water quality and preventing the introduction and proliferation of
invasive species. In addition, the legislation requires signage on
federally financed projects to improve public awareness of restoration
efforts.
Allows for increased efficiency in the management of public land.
Under this legislation, the Forest Service would have increased
flexibility to exchange land with state agencies which will allow for
more cost-efficient management of public land. There is currently a
checkerboard pattern of ownership in some areas of the Basin.
Under this new authority, the Forest Service could exchange land with
the California Tahoe Conservancy and the California Department of Parks
and Recreation of approximately equal value without going through a
lengthy process to assess the land.
For example, if there are several plots of Forest Service land that
surround or are adjacent to Tahoe Conservancy or California State Parks
land, the state could transfer that land to the Forest Service so that
it can be managed more efficiently.
This legislation is needed because the ``Jewel of the Sierra'' is in
big trouble. If we don't act now, we could lose Lake Tahoe, lose it
with stunning speed, to several devastating threats.
Anyone doubting that climate change poses a severe threat to Lake
Tahoe should read an alarming recent report by the UC Davis Tahoe
Environmental Research Center.
It was written for the U.S. Forest Service by scientists who have
devoted their professional careers to studying Lake Tahoe. And it
paints a distinctly bleak picture of the future for the ``Jewel of the
Sierra.''
Among its findings are the Tahoe Basin's regional snowpack could
decline by as much as 60 percent in the next century, with increased
floods likely by 2050 and prolonged droughts by 2100.
Even ``under the most optimistic projections,'' average snowpack in
the Sierra Nevada around Tahoe will decline by 40 to 60 percent by
2100, according to the report.
This would likely bankrupt Tahoe's ski industry, threaten the water
supply of Reno and other communities, and degrade the lake's fabled
water clarity. It is devastating.
According to the UC Davis report, an all-out attack on pollution and
sedimentation may be the lake's last best hope.
Geoff Schladow, director of the UC Davis Tahoe Environmental Research
Center and one of the report's authors, noted the need to restore
short-term water quality in Lake Tahoe--while there's still time to do
it.
``Reducing the load of external nutrients entering the lake in the
coming decades may be the only possible mitigation measure to reduce
the impact of climate change on lake clarity . . . ,'' the report said.
Without such an effort, the ``internal loading of nutrients'' could
fundamentally change the lake and fuel algal growth, creating a
downward spiral in water quality and clarity.
Water clarity is one of the central problems the legislation would
address.
Pollution and sedimentation have threatened Lake Tahoe's water
clarity for years now. In 1968, the first year UC Davis scientists made
measurements using a device called a Secchi disk, clarity was measured
at an average depth of 102.4 feet. Clarity declined over the next three
decades, hitting a low of 64 feet in 1997.
There has been some improvement in this decade. Last year scientists
recorded average clarity at 75.3 feet--the clearest readings in a
decade. But it is a fragile gain. Sedimentation and stormwater runoff
pose a persistent threat.
Climate change has already made itself apparent at Lake Tahoe. It
makes the basin dry and tinder-hot, raising the risks of catastrophic
wildfire. Daily air temperatures have increased 4 degrees since 1911.
Snow has
[[Page S6225]]
declined as a fraction of total precipitation, from an average of 52
percent in 1910 to just 36 percent in recent years.
Climate change has caused Lake Tahoe's surface water temperature to
rise over 2 degrees in 44 years. That means the cyclical deep-water
mixing of the lake's waters will occur less frequently, and this could
significantly disrupt Lake Tahoe's ecosystem.
This legislation is intended to address these problems.
Last year, the Senate Environment and Public Works Committee reported
out the bill favorably, but there was not enough time for a floor vote.
It is my hope that this legislation can move through committee quickly
and be passed later this year.
A lot of good work has been done. But there's a lot more work to do,
and time is running out.
Mark Twain called Lake Tahoe ``the fairest picture the whole world
affords.'' We must not be the generation who lets this picture fall
into ruin. We must rise to the challenge, and do all we can to preserve
this ``noble sheet of water.''
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. 1451
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 ``Lake Tahoe Restoration Act
of 2013''.
SEC. 2. FINDINGS AND PURPOSES.
The Lake Tahoe Restoration Act (Public Law 106-506; 114
Stat. 2351) is amended by striking section 2 and inserting
the following:
``SEC. 2. FINDINGS AND PURPOSES.
``(a) Findings.--Congress finds that--
``(1) Lake Tahoe--
``(A) is 1 of the largest, deepest, and clearest lakes in
the world;
``(B) has a cobalt blue color, a biologically diverse
alpine setting, and remarkable water clarity; and
``(C) is recognized nationally and worldwide as a natural
resource of special significance;
``(2) in addition to being a scenic and ecological
treasure, the Lake Tahoe Basin is 1 of the outstanding
recreational resources of the United States, which--
``(A) offers skiing, water sports, biking, camping, and
hiking to millions of visitors each year; and
``(B) contributes significantly to the economies of
California, Nevada, and the United States;
``(3) the economy in the Lake Tahoe Basin is dependent on
the protection and restoration of the natural beauty and
recreation opportunities in the area;
``(4) the Lake Tahoe Basin continues to be threatened by
the impacts of land use and transportation patterns developed
in the last century that damage the fragile watershed of the
Basin;
``(5) the water clarity of Lake Tahoe declined from a
visibility level of 105 feet in 1967 to only 70 feet in 2008;
``(6) the rate of decline in water clarity of Lake Tahoe
has decreased in recent years;
``(7) a stable water clarity level for Lake Tahoe could be
achieved through feasible control measures for very fine
sediment particles and nutrients;
``(8) fine sediments that cloud Lake Tahoe, and key
nutrients such as phosphorus and nitrogen that support the
growth of algae and invasive plants, continue to flow into
the lake from stormwater runoff from developed areas, roads,
turf, other disturbed land, and streams;
``(9) the destruction and alteration of wetland, wet
meadows, and stream zone habitat have compromised the natural
capacity of the watershed to filter sediment, nutrients, and
pollutants before reaching Lake Tahoe;
``(10) approximately 25 percent of the trees in the Lake
Tahoe Basin are either dead or dying;
``(11) forests in the Tahoe Basin suffer from over a
century of fire suppression and periodic drought, which have
resulted in--
``(A) high tree density and mortality;
``(B) the loss of biological diversity; and
``(C) a large quantity of combustible forest fuels, which
significantly increases the threat of catastrophic fire and
insect infestation;
``(12) the establishment of several aquatic and terrestrial
invasive species (including perennial pepperweed, milfoil,
and Asian clam) threatens the ecosystem of the Lake Tahoe
Basin;
``(13) there is an ongoing threat to the Lake Tahoe Basin
of the introduction and establishment of other invasive
species (such as yellow starthistle, New Zealand mud snail,
and quagga mussel);
``(14) the report prepared by the University of California,
Davis, entitled the `State of the Lake Report', found that
conditions in the Lake Tahoe Basin had changed, including--
``(A) the average surface water temperature of Lake Tahoe
has risen by more than 1.2 degrees Fahrenheit in the past 43
years;
``(B) since 1910, the percent of precipitation that has
fallen as snow in the Lake Tahoe Basin decreased from 51
percent to 35.5 percent; and
``(C) daily air temperatures have increased by more than 4
degrees Fahrenheit and the trend in daily maximum temperature
has risen by approximately 2 degrees Fahrenheit;
``(15) 75 percent of the land in the Lake Tahoe Basin is
owned by the Federal Government, which makes it a Federal
responsibility to restore environmental health to the Basin;
``(16) the Federal Government has a long history of
environmental preservation at Lake Tahoe, including--
``(A) congressional consent to the establishment of the
Tahoe Regional Planning Agency with--
``(i) the enactment in 1969 of Public Law 91-148 (83 Stat.
360); and
``(ii) the enactment in 1980 of Public Law 96-551 (94 Stat.
3233);
``(B) the establishment of the Lake Tahoe Basin Management
Unit in 1973;
``(C) the enactment of Public Law 96-586 (94 Stat. 3381) in
1980 to provide for the acquisition of environmentally
sensitive land and erosion control grants in the Lake Tahoe
Basin;
``(D) the enactment of sections 341 and 342 of the
Department of the Interior and Related Agencies
Appropriations Act, 2004 (Public Law 108-108; 117 Stat.
1317), which amended the Southern Nevada Public Land
Management Act of 1998 (Public Law 105-263; 112 Stat. 2346)
to provide payments for the environmental restoration
projects under this Act; and
``(E) the enactment of section 382 of the Tax Relief and
Health Care Act of 2006 (Public Law 109-432; 120 Stat. 3045),
which amended the Southern Nevada Public Land Management Act
of 1998 (Public Law 105-263; 112 Stat. 2346) to authorize
development and implementation of a comprehensive 10-year
hazardous fuels and fire prevention plan for the Lake Tahoe
Basin;
``(17) the Assistant Secretary of the Army for Civil Works
was an original signatory in 1997 to the Agreement of Federal
Departments on Protection of the Environment and Economic
Health of the Lake Tahoe Basin;
``(18) the Chief of Engineers, under direction from the
Assistant Secretary of the Army for Civil Works, has
continued to be a significant contributor to Lake Tahoe Basin
restoration, including--
``(A) stream and wetland restoration;
``(B) urban stormwater conveyance and treatment; and
``(C) programmatic technical assistance;
``(19) at the Lake Tahoe Presidential Forum in 1997, the
President renewed the commitment of the Federal Government to
Lake Tahoe by--
``(A) committing to increased Federal resources for
environmental restoration at Lake Tahoe; and
``(B) establishing the Federal Interagency Partnership and
Federal Advisory Committee to consult on natural resources
issues concerning the Lake Tahoe Basin;
``(20) at the 2011 and 2012 Lake Tahoe Forums, Senator
Reid, Senator Feinstein, Senator Heller, Senator Ensign,
Governor Gibbons, Governor Sandoval, and Governor Brown--
``(A) renewed their commitment to Lake Tahoe; and
``(B) expressed their desire to fund the Federal and State
shares of the Environmental Improvement Program through 2022;
``(21) since 1997, the Federal Government, the States of
California and Nevada, units of local government, and the
private sector have contributed more than $1,620,000,000 to
the Lake Tahoe Basin, including--
``(A) $521,100,000 from the Federal Government;
``(B) $636,200,000 from the State of California;
``(C) $101,400,000 from the State of Nevada;
``(D) $68,200,000 from units of local government; and
``(E) $299,600,000 from private interests;
``(22) significant additional investment from Federal,
State, local, and private sources is necessary--
``(A) to restore and sustain the environmental health of
the Lake Tahoe Basin;
``(B) to adapt to the impacts of changing water temperature
and precipitation; and
``(C) to protect the Lake Tahoe Basin from the introduction
and establishment of invasive species; and
``(23) the Secretary has indicated that the Lake Tahoe
Basin Management Unit has the capacity for at least
$10,000,000 for the Fire Risk Reduction and Forest Management
Program.
``(b) Purposes.--The purposes of this Act are--
``(1) to enable the Chief of the Forest Service, the
Director of the United States Fish and Wildlife Service, and
the Administrator of the Environmental Protection Agency, in
cooperation with the Planning Agency and the States of
California and Nevada, to fund, plan, and implement
significant new environmental restoration activities and
forest management activities to address in the Lake Tahoe
Basin the issues described in paragraphs (4) through (14) of
subsection (a);
``(2) to ensure that Federal, State, local, regional,
tribal, and private entities continue to work together to
manage land in
[[Page S6226]]
the Lake Tahoe Basin and to coordinate on other activities in
a manner that supports achievement and maintenance of--
``(A) the environmental threshold carrying capacities for
the region; and
``(B) other applicable environmental standards and
objectives;
``(3) to support local governments in efforts related to
environmental restoration, stormwater pollution control, fire
risk reduction, and forest management activities; and
``(4) to ensure that agency and science community
representatives in the Lake Tahoe Basin work together--
``(A) to develop and implement a plan for integrated
monitoring, assessment, and applied research to evaluate the
effectiveness of the Environmental Improvement Program; and
``(B) to provide objective information as a basis for
ongoing decisionmaking, with an emphasis on decisionmaking
relating to public and private land use and resource
management in the Basin.''.
SEC. 3. DEFINITIONS.
The Lake Tahoe Restoration Act (Public Law 106-506; 114
Stat. 2351) is amended by striking section 3 and inserting
the following:
``SEC. 3. DEFINITIONS.
``In this Act:
``(1) Administrator.--The term `Administrator' means the
Administrator of the Environmental Protection Agency.
``(2) Assistant secretary.--The term `Assistant Secretary'
means the Assistant Secretary of the Army for Civil Works.
``(3) Chair.--The term `Chair' means the Chair of the
Federal Partnership.
``(4) Compact.--The term `Compact' means the Tahoe Regional
Planning Compact included in the first section of Public Law
96-551 (94 Stat. 3233).
``(5) Directors.--The term `Directors' means--
``(A) the Director of the United States Fish and Wildlife
Service; and
``(B) the Director of the United States Geological Survey.
``(6) Environmental improvement program.--The term
`Environmental Improvement Program' means--
``(A) the Environmental Improvement Program adopted by the
Planning Agency; and
``(B) any amendments to the Program.
``(7) Environmental threshold carrying capacity.--The term
`environmental threshold carrying capacity' has the meaning
given the term in article II of the compact.
``(8) Federal partnership.--The term `Federal Partnership'
means the Lake Tahoe Federal Interagency Partnership
established by Executive Order 13957 (62 Fed. Reg. 41249) (or
a successor Executive order).
``(9) Forest management activity.--The term `forest
management activity' includes--
``(A) prescribed burning for ecosystem health and hazardous
fuels reduction;
``(B) mechanical and minimum tool treatment;
``(C) road decommissioning or reconstruction;
``(D) stream environment zone restoration and other
watershed and wildlife habitat enhancements;
``(E) nonnative invasive species management; and
``(F) other activities consistent with Forest Service
practices, as the Secretary determines to be appropriate.
``(10) Maps.--The term `Maps' means the maps--
``(A) entitled--
``(i) `LTRA USFS-CA Land Exchange/North Shore';
``(ii) `USFS-CA Land Exchange/West Shore'; and
``(iii) `USFS-CA Land Exchange/South Shore'; and
``(B) dated April 12, 2013, and on file and available for
public inspection in the appropriate offices of--
``(i) the Forest Service;
``(ii) the California Tahoe Conservancy; and
``(iii) the California Department of Parks and Recreation.
``(11) National wildland fire code.--The term `national
wildland fire code' means--
``(A) the most recent publication of the National Fire
Protection Association codes numbered 1141, 1142, 1143, and
1144;
``(B) the most recent publication of the International
Wildland-Urban Interface Code of the International Code
Council; or
``(C) any other code that the Secretary determines provides
the same, or better, standards for protection against
wildland fire as a code described in subparagraph (A) or (B).
``(12) Planning agency.--The term `Planning Agency' means
the Tahoe Regional Planning Agency established under Public
Law 91-148 (83 Stat. 360) and Public Law 96-551 (94 Stat.
3233).
``(13) Priority list.--The term `Priority List' means the
environmental restoration priority list developed under
section 8.
``(14) Secretary.--The term `Secretary' means the Secretary
of Agriculture, acting through the Chief of the Forest
Service.
``(15) Stream environment zone.--The term `Stream
Environment Zone' means an area that generally owes the
biological and physical characteristics of the area to the
presence of surface water or groundwater.
``(16) Total maximum daily load.--The term `total maximum
daily load' means the total maximum daily load allocations
adopted under section 303(d) of the Federal Water Pollution
Control Act (33 U.S.C. 1313(d)).
``(17) Watercraft.--The term `watercraft' means motorized
and non-motorized watercraft, including boats, seaplanes,
personal watercraft, kayaks, and canoes.''.
SEC. 4. ADMINISTRATION OF THE LAKE TAHOE BASIN MANAGEMENT
UNIT.
Section 4 of the Lake Tahoe Restoration Act (Public Law
106-506; 114 Stat. 2353) is amended--
(1) in subsection (b)(3), by striking ``basin'' and
inserting ``Basin''; and
(2) by adding at the end the following:
``(c) Transit.--
``(1) In general.--The Lake Tahoe Basin Management Unit
shall, consistent with the regional transportation plan
adopted by the Planning Agency, manage vehicular parking and
traffic in the Lake Tahoe Basin Management Unit, with
priority given--
``(A) to improving public access to the Lake Tahoe Basin,
including the prioritization of alternatives to the private
automobile, consistent with the requirements of the Compact;
``(B) to coordinating with the Nevada Department of
Transportation, Caltrans, State parks, and other entities
along Nevada Highway 28 and California Highway 89; and
``(C) to providing support and assistance to local public
transit systems in the management and operations of
activities under this subsection.
``(2) National forest transit program.--Consistent with the
support and assistance provided under paragraph (1)(C), the
Secretary, in consultation with the Secretary of
Transportation, may enter into a contract, cooperative
agreement, interagency agreement, or other agreement with the
Department of Transportation to secure operating and capital
funds from the National Forest Transit Program.
``(d) Forest Management Activities.--
``(1) Coordination.--
``(A) In general.--In conducting forest management
activities in the Lake Tahoe Basin Management Unit, the
Secretary shall, as appropriate, coordinate with the
Administrator and State and local agencies and organizations,
including local fire departments and volunteer groups.
``(B) Goals.--The coordination of activities under
subparagraph (A) should aim to increase efficiencies and
maximize the compatibility of management practices across
public property boundaries.
``(2) Multiple benefits.--
``(A) In general.--In conducting forest management
activities in the Lake Tahoe Basin Management Unit, the
Secretary shall conduct the activities in a manner that--
``(i) except as provided in subparagraph (B), attains
multiple ecosystem benefits, including--
``(I) reducing forest fuels;
``(II) maintaining or restoring biological diversity;
``(III) improving wetland and water quality, including in
Stream Environment Zones; and
``(IV) increasing resilience to changing water temperature
and precipitation; and
``(ii) helps achieve and maintain the environmental
threshold carrying capacities established by the Planning
Agency.
``(B) Exception.--Notwithstanding clause (A)(i), the
attainment of multiple ecosystem benefits shall not be
required if the Secretary determines that management for
multiple ecosystem benefits would excessively increase the
cost of a project in relation to the additional ecosystem
benefits gained from the management activity.
``(3) Ground disturbance.--Consistent with applicable
Federal law and Lake Tahoe Basin Management Unit land and
resource management plan direction, the Secretary shall--
``(A) establish post-project ground condition criteria for
ground disturbance caused by forest management activities;
and
``(B) provide for monitoring to ascertain the attainment of
the post-project conditions.
``(e) Withdrawal of Federal Land.--
``(1) In general.--Subject to valid existing rights and
paragraph (2), the Federal land located in the Lake Tahoe
Basin Management Unit is withdrawn from--
``(A) all forms of entry, appropriation, or disposal under
the public land laws;
``(B) location, entry, and patent under the mining laws;
and
``(C) disposition under all laws relating to mineral and
geothermal leasing.
``(2) Exceptions.--A conveyance of land shall be exempt
from withdrawal under this subsection if carried out under--
``(A) the Lake Tahoe Restoration Act (Public Law 106-506;
114 Stat. 2351); or
``(B) the Santini-Burton Act (Public Law 96-586; 94 Stat.
3381).
``(f) Environmental Threshold Carrying Capacity.--The Lake
Tahoe Basin Management Unit shall support the attainment of
the environmental threshold carrying capacities.
``(g) Cooperative Authorities.--During the 4 fiscal years
following the date of enactment of the Lake Tahoe Restoration
Act of 2013, the Secretary, in conjunction with land
adjustment projects or programs, may enter into contracts and
cooperative agreements with States, units of local
government, and other public and private entities to provide
for fuel reduction, erosion control, reforestation, Stream
Environment Zone restoration, and similar management
activities on Federal land and non-Federal land within the
projects or programs.''.
[[Page S6227]]
SEC. 5. CONSULTATION.
The Lake Tahoe Restoration Act (Public Law 106-506; 114
Stat. 2351) is amended by striking section 5 and inserting
the following:
``SEC. 5. CONSULTATION.
``In carrying out this Act, the Secretary, the
Administrator, and the Directors shall, as appropriate and in
a timely manner, consult with the heads of the Washoe Tribe,
applicable Federal, State, regional, and local governmental
agencies, and the Lake Tahoe Federal Advisory Committee.''.
SEC. 6. AUTHORIZED PROJECTS.
The Lake Tahoe Restoration Act (Public Law 106-506; 114
Stat. 2351) is amended by striking section 6 and inserting
the following:
``SEC. 6. AUTHORIZED PROJECTS.
``(a) In General.--The Secretary, the Assistant Secretary,
the Directors, and the Administrator, in coordination with
the Planning Agency and the States of California and Nevada,
may carry out or provide financial assistance to any project
or program that--
``(1) is described in subsection (d);
``(2) is included in the Priority List under section 8; and
``(3) furthers the purposes of the Environmental
Improvement Program if the project has been subject to
environmental review and approval, respectively, as required
under Federal law, article 7 of the Compact, and State law,
as applicable.
``(b) Restriction.--The Administrator shall use not more
than 3 percent of the funds provided under subsection (a) for
administering the projects or programs described in
paragraphs (1) and (2) of subsection (d).
``(c) Monitoring and Assessment.--All projects authorized
under subsection (d) shall--
``(1) include funds for monitoring and assessment of the
results and effectiveness at the project and program level
consistent with the program developed under section 11; and
``(2) use the integrated multiagency performance measures
established under section 13.
``(d) Description of Activities.--
``(1) Stormwater management, erosion control, and total
maximum daily load implementation.--Of the amounts made
available under section 17(a), $75,000,000 shall be made
available--
``(A) to the Secretary or the Administrator for the Federal
share of stormwater management and related projects and
programs consistent with the adopted Total Maximum Daily Load
and near-shore water quality goals; and
``(B) for grants by the Secretary and the Administrator to
carry out the projects and programs described in subparagraph
(A).
``(2) Stream environment zone and watershed restoration.--
Of the amounts made available under section 17(a),
$38,000,000 shall be made available--
``(A) to the Secretary or the Assistant Secretary for the
Federal share of the Upper Truckee River restoration projects
and other watershed restoration projects identified in the
priority list established under section 8; and
``(B) for grants by the Administrator to carry out the
projects described in subparagraph (A).
``(3) Fire risk reduction and forest management.--
``(A) In general.--Of the amounts made available under
section 17(a), $135,000,000 shall be made available to the
Secretary to carry out, including by making grants, the
following projects:
``(i) Projects identified as part of the Lake Tahoe Basin
Multi-Jurisdictional Fuel Reduction and Wildfire Prevention
Strategy 10-Year Plan.
``(ii) Competitive grants for fuels work to be awarded by
the Secretary to communities that have adopted national
wildland fire codes to implement the applicable portion of
the 10-year plan described in clause (i).
``(iii) Biomass projects, including feasibility assessments
and transportation of materials.
``(iv) Angora Fire Restoration projects under the
jurisdiction of the Secretary.
``(v) Washoe Tribe projects on tribal lands within the Lake
Tahoe Basin.
``(vi) Development of an updated Lake Tahoe Basin
multijurisdictional fuel reduction and wildfire prevention
strategy, consistent with section 4(d).
``(vii) Development of updated community wildfire
protection plans by local fire districts.
``(viii) Municipal water infrastructure that significantly
improves the firefighting capability of local government
within the Lake Tahoe Basin.
``(B) Minimum allocation.--Of the amounts made available to
the Secretary to carry out subparagraph (A), at least
$80,000,000 shall be used by the Secretary for projects under
subparagraph (A)(i).
``(C) Priority.--Units of local government that have
dedicated funding for inspections and enforcement of
defensible space regulations shall be given priority for
amounts provided under this paragraph.
``(D) Cost-sharing requirements.--
``(i) In general.--As a condition on the receipt of funds,
communities or local fire districts that receive funds under
this paragraph shall provide a 25 percent match.
``(ii) Form of non-federal share.--
``(I) In general.--The non-Federal share required under
clause (i) may be in the form of cash contributions or in-
kind contributions, including providing labor, equipment,
supplies, space, and other operational needs.
``(II) Credit for certain dedicated funding.--There shall
be credited toward the non-Federal share required under
clause (i) any dedicated funding of the communities or local
fire districts for a fuels reduction management program,
defensible space inspections, or dooryard chipping.
``(III) Documentation.--Communities and local fire
districts shall--
``(aa) maintain a record of in-kind contributions that
describes--
``(AA) the monetary value of the in-kind contributions; and
``(BB) the manner in which the in-kind contributions assist
in accomplishing project goals and objectives; and
``(bb) document in all requests for Federal funding, and
include in the total project budget, evidence of the
commitment to provide the non-Federal share through in-kind
contributions.
``(4) Invasive species management.--Of the amounts to be
made available under section 17(a), $30,000,000 shall be made
available to the Director of the United States Fish and
Wildlife Service for the Aquatic Invasive Species Program and
the watercraft inspections described in section 9.
``(5) Special status species management.--Of the amounts to
be made available under section 17(a), $20,000,000 shall be
made available to the Director of the United States Fish and
Wildlife Service for the Lahontan Cutthroat Trout Recovery
Program.
``(6) Lake tahoe basin science program.--Of the amounts to
be made available under section 17(a), $30,000,000 shall be
made available to the Chief of the Forest Service to develop
and implement, in coordination with the Tahoe Science
Consortium, the Lake Tahoe Basin Science Program established
under section 11.
``(7) Program performance and accountability.--
``(A) In general.--Of the amounts to be made available
under section 17(a), $5,000,000 shall be made available to
the Secretary to carry out sections 12, 13, and 14.
``(B) Planning agency.--Of the amounts described in
subparagraph (A), not less than 50 percent shall be made
available to the Planning Agency to carry out the program
oversight, coordination, and outreach activities established
under sections 12, 13, and 14.
``(8) Land conveyance.--
``(A) In general.--Of the amount made available under
section 17(a), $2,000,000 shall be made available to the
Secretary to carry out the activities under section 3(b)(2)
of Public Law 96-586 (94 Stat. 3384) (commonly known as the
`Santini-Burton Act').
``(B) Other funds.--Of the amounts available to the
Secretary under subparagraph (A), not less than 50 percent
shall be provided to the California Tahoe Conservancy to
facilitate the conveyance of land described in section
3(b)(2) of Public Law 96-586 (94 Stat. 3384) (commonly known
as the `Santini-Burton Act').''.
SEC. 7. ENVIRONMENTAL RESTORATION PRIORITY LIST.
The Lake Tahoe Restoration Act (Public Law 106-506; 114
Stat. 2351) is amended--
(1) by striking sections 8 and 9;
(2) by redesignating sections 10, 11, and 12 as sections
15, 16, and 17, respectively; and
(3) by inserting after section 7 the following:
``SEC. 8. ENVIRONMENTAL RESTORATION PRIORITY LIST.
``(a) Deadline.--Not later than February 15 of the year
after the date of enactment of the Lake Tahoe Restoration Act
of 2013, the Chair, in consultation with the Secretary, the
Administrator, the Directors, the Planning Agency, the States
of California and Nevada, the Federal Partnership, the Washoe
Tribe, the Lake Tahoe Federal Advisory Committee, and the
Tahoe Science Consortium shall submit to Congress a
prioritized list of all Environmental Improvement Program
projects for the Lake Tahoe Basin for each program category
described in section 6(d).
``(b) Criteria.--
``(1) In general.--The priority of projects included in the
Priority List shall be based on the best available science
and the following criteria:
``(A) The 5-year threshold carrying capacity evaluation.
``(B) The ability to measure progress or success of the
project.
``(C) The potential to significantly contribute to the
achievement and maintenance of the environmental threshold
carrying capacities identified in the Compact for--
``(i) air quality;
``(ii) fisheries;
``(iii) noise;
``(iv) recreation;
``(v) scenic resources;
``(vi) soil conservation;
``(vii) forest health;
``(viii) water quality; and
``(ix) wildlife.
``(D) The ability of a project to provide multiple
benefits.
``(E) The ability of a project to leverage non-Federal
contributions.
``(F) Stakeholder support for the project.
``(G) The justification of Federal interest.
``(H) Agency priority.
``(I) Agency capacity.
``(J) Cost-effectiveness.
``(K) Federal funding history.
``(2) Secondary factors.--In addition to the criteria under
paragraph (1), the Chair
[[Page S6228]]
shall, as the Chair determines to be appropriate, give
preference to projects in the Priority List that benefit
existing neighborhoods in the Basin that are at or below
regional median income levels, based on the most recent
census data available.
``(c) Revisions.--
``(1) In general.--The Priority List submitted under
subsection (b) shall be revised--
``(A) every 2 years; or
``(B) on a finding of compelling need under paragraph (2).
``(2) Finding of compelling need.--
``(A) In general.--If the Secretary, the Administrator, or
the Director of the United States Fish and Wildlife Service
makes a finding of compelling need justifying a priority
shift and the finding is approved by the Secretary, the
Executive Director of the Planning Agency, the California
Natural Resources Secretary, and the Director of the Nevada
Department of Conservation, the Priority List shall be
revised in accordance with this subsection.
``(B) Inclusions.--A finding of compelling need includes--
``(i) major scientific findings;
``(ii) results from the threshold evaluation of the
Planning Agency;
``(iii) emerging environmental threats; and
``(iv) rare opportunities for land acquisition.
``(d) Funding.--Of the amount made available under section
17(a), $80,000,000 shall be made available to the Secretary
to carry out this section.
``SEC. 9. AQUATIC INVASIVE SPECIES PREVENTION.
``(a) In General.--The Director of the United States Fish
and Wildlife Service, in coordination with the Planning
Agency, the California Department of Fish and Game, and the
Nevada Department of Wildlife, shall deploy strategies
consistent with the Lake Tahoe Aquatic Invasive Species
Management Plan to prevent the introduction of aquatic
invasive species into the Lake Tahoe Basin.
``(b) Criteria.--The strategies referred to in subsection
(a) shall provide that--
``(1) combined inspection and decontamination stations be
established and operated at not less than 2 locations in the
Lake Tahoe Basin; and
``(2) watercraft not be allowed to launch in waters of the
Lake Tahoe Basin if the watercraft has not been inspected in
accordance with the Lake Tahoe Aquatic Invasive Species
Management Plan.
``(c) Certification.--The Planning Agency may certify State
and local agencies to perform the decontamination activities
described in subsection (b)(3) at locations outside the Lake
Tahoe Basin if standards at the sites meet or exceed
standards for similar sites in the Lake Tahoe Basin
established under this section.
``(d) Applicability.--The strategies and criteria developed
under this section shall apply to all watercraft to be
launched on water within the Lake Tahoe Basin.
``(e) Fees.--The Director of the United States Fish and
Wildlife Service may collect and spend fees for
decontamination only at a level sufficient to cover the costs
of operation of inspection and decontamination stations under
this section.
``(f) Civil Penalties.--
``(1) In general.--Any person that launches, attempts to
launch, or facilitates launching of watercraft not in
compliance with strategies deployed under this section shall
be liable for a civil penalty in an amount not to exceed
$1,000 per violation.
``(2) Other authorities.--Any penalties assessed under this
subsection shall be separate from penalties assessed under
any other authority.
``(g) Limitation.--The strategies and criteria under
subsections (a) and (b), respectively, may be modified if the
Secretary of the Interior, in a nondelegable capacity and in
consultation with the Planning Agency and State governments,
issues a determination that alternative measures will be no
less effective at preventing introduction of aquatic invasive
species into Lake Tahoe than the strategies and criteria.
``(h) Supplemental Authority.--The authority under this
section is supplemental to all actions taken by non-Federal
regulatory authorities.
``(i) Savings Clause.--Nothing in this title shall be
construed as restricting, affecting, or amending any other
law or the authority of any department, instrumentality, or
agency of the United States, or any State or political
subdivision thereof, respecting the control of invasive
species.
``SEC. 10. CORPS OF ENGINEERS; INTERAGENCY AGREEMENTS.
``(a) In General.--The Assistant Secretary may enter into
interagency agreements with non-Federal interests in the Lake
Tahoe Basin to use Lake Tahoe Partnership-Miscellaneous
General Investigations funds to provide programmatic
technical assistance for the Environmental Improvement
Program.
``(b) Local Cooperation Agreements.--
``(1) In general.--Before providing technical assistance
under this section, the Assistant Secretary shall enter into
a local cooperation agreement with a non-Federal interest to
provide for the technical assistance.
``(2) Components.--The agreement entered into under
paragraph (1) shall--
``(A) describe the nature of the technical assistance;
``(B) describe any legal and institutional structures
necessary to ensure the effective long-term viability of the
end products by the non-Federal interest; and
``(C) include cost-sharing provisions in accordance with
paragraph (3).
``(3) Federal share.--
``(A) In general.--The Federal share of project costs under
each local cooperation agreement under this subsection shall
be 65 percent.
``(B) Form.--The Federal share may be in the form of
reimbursements of project costs.
``(C) Credit.--The non-Federal interest may receive credit
toward the non-Federal share for the reasonable costs of
related technical activities completed by the non-Federal
interest before entering into a local cooperation agreement
with the Assistant Secretary under this subsection.
``SEC. 11. LAKE TAHOE BASIN SCIENCE PROGRAM.
``The Secretary (acting through the Station Director of the
Forest Service, Pacific Southwest Research Station), the
Administrator, the Planning Agency, the States of California
and Nevada, and the Tahoe Science Consortium, shall develop
and implement the Lake Tahoe Basin Science Program that--
``(1) develops and regularly updates an integrated
multiagency programmatic assessment and monitoring plan--
``(A) to evaluate the effectiveness of the Environmental
Improvement Program;
``(B) to evaluate the status and trends of indicators
related to environmental threshold carrying capacities; and
``(C) to assess the impacts and risks of changing water
temperature, precipitation, and invasive species;
``(2) produces and synthesizes scientific information
necessary for--
``(A) the identification and refinement of environmental
indicators for the Lake Tahoe Basin; and
``(B) the evaluation of standards and benchmarks;
``(3) conducts applied research, programmatic technical
assessments, scientific data management, analysis, and
reporting related to key management questions;
``(4) develops new tools and information to support
objective assessments of land use and resource conditions;
``(5) provides scientific and technical support to the
Federal Government and State and local governments in--
``(A) reducing stormwater runoff, air deposition, and other
pollutants that contribute to the loss of lake clarity; and
``(B) the development and implementation of an integrated
stormwater monitoring and assessment program;
``(6) establishes and maintains independent peer review
processes--
``(A) to evaluate the Environmental Improvement Program;
and
``(B) to assess the technical adequacy and scientific
consistency of central environmental documents, such as the
5-year threshold review; and
``(7) provides scientific and technical support for the
development of appropriate management strategies to
accommodate changing water temperature and precipitation in
the Lake Tahoe Basin.
``SEC. 12. PUBLIC OUTREACH AND EDUCATION.
``(a) In General.--The Secretary, the Administrator, and
the Directors will coordinate with the Planning Agency to
conduct public education and outreach programs, including
encouraging--
``(1) owners of land and residences in the Lake Tahoe
Basin--
``(A) to implement defensible space; and
``(B) to conduct best management practices for water
quality; and
``(2) owners of land and residences in the Lake Tahoe Basin
and visitors to the Lake Tahoe Basin, to help prevent the
introduction and proliferation of invasive species as part of
the private share investment in the Environmental Improvement
Program.
``(b) Scientific and Technical Guidance.--The Director of
the United States Geological Survey shall provide scientific
and technical guidance to public outreach and education
programs conducted under this section.
``(c) Required Coordination.--Public outreach and education
programs for aquatic invasive species under this section
shall--
``(1) be coordinated with Lake Tahoe Basin tourism and
business organizations; and
``(2) include provisions for the programs to extend outside
of the Lake Tahoe Basin.
``SEC. 13. REPORTING REQUIREMENTS.
``Not later than February 15 of each year, the Secretary,
in cooperation with the Chair, the Administrator, the
Directors, the Planning Agency, and the States of California
and Nevada, consistent with section 6(d)(6), shall submit to
Congress a report that describes--
``(1) the status of all Federal, State, local, and private
projects authorized under this Act, including to the maximum
extent practicable, for projects that will receive Federal
funds under this Act during the current or subsequent fiscal
year--
``(A) the project scope;
``(B) the budget for the project; and
``(C) the justification for the project, consistent with
the criteria established in section 8(b)(1);
``(2) Federal, State, local, and private expenditures in
the preceding fiscal year to implement the Environmental
Improvement Program and projects otherwise authorized under
this Act;
``(3) accomplishments in the preceding fiscal year in
implementing this Act in accordance with the performance
measures and
[[Page S6229]]
other monitoring and assessment activities; and
``(4) public education and outreach efforts undertaken to
implement programs and projects authorized under this Act.
``SEC. 14. ANNUAL BUDGET PLAN.
``As part of the annual budget of the President, the
President shall submit information regarding each Federal
agency involved in the Environmental Improvement Program
(including the Forest Service, the Environmental Protection
Agency, the United States Fish and Wildlife Service), the
United States Geological Survey, and the Corps of Engineers),
including--
``(1) an interagency crosscut budget that displays the
proposed budget for use by each Federal agency in carrying
out restoration activities relating to the Environmental
Improvement Program for the following fiscal year;
``(2) a detailed accounting of all amounts received and
obligated by Federal agencies to achieve the goals of the
Environmental Improvement Program during the preceding fiscal
year; and
``(3) a description of the Federal role in the
Environmental Improvement Program, including the specific
role of each agency involved in the restoration of the Lake
Tahoe Basin.''.
SEC. 8. RELATIONSHIP TO OTHER LAWS.
Section 16 of The Lake Tahoe Restoration Act (Public Law
106-506; 114 Stat. 2358) (as redesignated by section 7(2)) is
amended by inserting ``, Director, or Administrator'' after
``Secretary''.
SEC. 9. AUTHORIZATION OF APPROPRIATIONS.
The Lake Tahoe Restoration Act (Public Law 106-506; 114
Stat. 2351) is amended by striking section 17 (as
redesignated by section 7(2)) and inserting the following:
``SEC. 17. AUTHORIZATION OF APPROPRIATIONS.
``(a) Authorization of Appropriations.--There is authorized
to be appropriated to carry out this Act $415,000,000 for a
period of 10 fiscal years beginning the first fiscal year
after the date of enactment of the Lake Tahoe Restoration Act
of 2013.
``(b) Effect on Other Funds.--Amounts authorized under this
section and any amendments made by this Act--
``(1) shall be in addition to any other amounts made
available to the Secretary, the Administrator, or the
Directors for expenditure in the Lake Tahoe Basin; and
``(2) shall not reduce allocations for other Regions of the
Forest Service, Environmental Protection Agency, or the
United States Fish and Wildlife Service.
``(c) Cost-Sharing Requirement.--Except as provided in
subsection (d) and section 6(d)(3)(D), the States of
California and Nevada shall pay 50 percent of the aggregate
costs of restoration activities in the Lake Tahoe Basin
funded under section 6.
``(d) Relocation Costs.--Notwithstanding subsection (c),
the Secretary shall provide to local utility districts two-
thirds of the costs of relocating facilities in connection
with--
``(1) environmental restoration projects under sections 6
and 8; and
``(2) erosion control projects under section 2 of Public
Law 96-586 (94 Stat. 3381).
``(e) Signage.--To the maximum extent practicable, a
project provided assistance under this Act shall include
appropriate signage at the project site that--
``(1) provides information to the public on--
``(A) the amount of Federal funds being provided to the
project; and
``(B) this Act; and
``(2) displays the visual identity mark of the
Environmental Improvement Program.''.
SEC. 10. ADMINISTRATION OF ACQUIRED LAND.
(a) In General.--Section 3(b) of Public Law 96-586 (94
Stat. 3384) (commonly known as the ``Santini-Burton Act'') is
amended--
(1) by striking ``(b) Lands'' and inserting the following:
``(b) Administration of Acquired Land.--
``(1) In general.--Land''; and
(2) by adding at the end the following:
``(2) Conveyance.--
``(A) In general.--If the State of California (acting
through the California Tahoe Conservancy and the California
Department of Parks and Recreation) offers to donate to the
United States acceptable title to the non-Federal land
described in subparagraph (B)(i), the Secretary--
``(i) may accept the offer; and
``(ii) not later than 180 days after the date on which the
Secretary receives acceptable title to the non-Federal land
described in subparagraph (B)(i), convey to the State of
California, subject to valid existing rights and for no
consideration, all right, title, and interest of the United
States in and to the Federal land that is acceptable to the
State of California.
``(B) Description of land.--
``(i) Non-federal land.--The non-Federal land referred to
in subparagraph (A) includes--
``(I) the approximately 1,981 acres of land administered by
the Conservancy and identified on the Maps as `Conservancy to
the United States Forest Service'; and
``(II) the approximately 187 acres of land administered by
California State Parks and identified on the Maps as `State
Parks to the U.S. Forest Service'.
``(ii) Federal land.--The Federal land referred to in
subparagraph (A) includes the approximately 1,995 acres of
Forest Service land identified on the Maps as `U.S. Forest
Service to Conservancy and State Parks'.
``(C) Conditions.--Any land conveyed under this paragraph
shall--
``(i) be for the purpose of consolidating Federal and State
ownerships and improving management efficiencies;
``(ii) not result in any significant changes in the uses of
the land; and
``(iii) be subject to the condition that the applicable
deed include such terms , restrictions, covenants,
conditions, and reservations as the Secretary determines
necessary to--
``(I) ensure compliance with this Act; and
``(II) ensure that the development rights associated with
the conveyed parcels shall not be recognized or available for
transfer under section 90.2 of the Code of Ordinances for the
Tahoe Regional Planning Agency.''.
______
By Mr. McCONNELL (for himself and Mr. Paul):
S. 1457. A bill to exempt the aging process of distilled spirits from
the production period for purposes of capitalization of interest costs;
to the Committee on Finance.
Mr. McCONNELL. 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. 1457
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 ``Aged Distilled Spirits
Competitiveness Act''.
SEC. 2. PRODUCTION PERIOD OF DISTILLED SPIRITS.
(a) In General.--Section 263A(f) of the Internal Revenue
Code of 1986 is amended--
(1) by redesignating paragraph (4) as paragraph (5), and
(2) by inserting after paragraph (3) the following new
paragraph:
``(4) Exemption for aging process of distilled spirits.--
For purposes of this subsection, the production period shall
not include the aging period for distilled spirits (as
described in section 5002(a)(8)).''.
(b) Effective Date.--The amendments made by this section
shall apply to the production of distilled spirits that
begins on or after the date of the enactment of this Act.
______
By Mr. LEVIN (for himself, Mr. Grassley, Mrs. Feinstein, and Mr.
Harkin):
S. 1465. A bill to ensure that persons who form corporations in the
United States disclose the beneficial owners of those corporations, in
order to prevent the formation of corporations with hidden owners, stop
the misuse of United States corporations by wrongdoers, and assist law
enforcement in detecting, preventing, and punishing terrorism, money
laundering, tax evasion, and other criminal and civil misconduct
involving United States corporations, and for other purposes; to the
Committee on the Judiciary.
Mr. LEVIN. Mr. President, today, along with my colleagues, Senator
Grassley, Senator Feinstein, and Senator Harkin, I am reintroducing 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 about 2
million new corporations each year for unidentified persons, and
instead require a list of the real owners to be submitted so that, if
misconduct later occurred, law enforcement could access the owners list
and have a trail to chase, instead of confronting what has all too
often been 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, and the Society of Former Special Agents of the Federal
Bureau of Investigation, as well as by Manhattan District Attorney
Cyrus Vance. It is also endorsed by a number of small business, public
interest, and good government groups, including the Main Street
Alliance, American Sustainable Business Council, National Money
Transmitters Association, AFL-CIO, SEIU, Global Financial Integrity,
Global Witness, U.S. Public Interest Research Group, Transparency
International, Public Citizen, Project on Government Oversight, Jubilee
USA Network, Tax Justice Network USA, Human Rights Watch, Friends of
the Earth, Open Society Policy Center, Revenue Watch Institute, the
FACT Coalition, and more. .
This is the fourth Congress in which this bill has been introduced to
provide a solution to a problem that has gained only more urgency with
time. In 2008,
[[Page S6230]]
when the bill was first introduced, President Obama was a member of the
U.S. Senate and an original cosponsor. In 2013, President Obama stood
with other international leaders at a G8 summit in June to condemn
corporations with hidden owners who commit crimes, tax evasion, and
other wrongdoing. The G8 leaders made a joint commitment to combat that
problem. President Obama immediately responded with a U.S. action plan
that, among other measures, calls for enacting legislation to end the
shameful practice in this country of forming U.S. corporations with
unnamed owners and unleashing them on, not only our own communities,
but the international community as well.
A World Bank study found that the United States forms more
corporations per year than all the rest of the countries in the world
put together. Under current law, those U.S. corporations can be
established anonymously, by hidden owners who don't reveal their
identity. According to another recent study by Griffith University
examining multiple jurisdictions, it is easier to obtain an anonymous
shell company in the United States than almost anywhere else in the
world. That study also found that ``only a tiny portion of U.S.
providers of any kind met the international standard of requiring
notarized identity documents.''
Right now, in the United States, it takes more information to get a
driver's license or to open a U.S. bank account than to form a U.S.
corporation. Our bill would change that by requiring any State that
accepts crime-fighting grants from the Department of Justice to add one
new question to their existing incorporation forms asking applicants to
identify the company's true 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 jobs. 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.
The Problem. 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 that indicate the scope of the problem.
We now know that some terrorists use U.S. corporations to carry out
their activities. Viktor Bout, an arms dealer who was found guilty in
November 2011 of conspiring to kill U.S. nationals and selling weapons
to a terrorist organization, used corporations around the world in his
work, including a dozen formed in Texas, Delaware, and Florida. At the
time of Mr. Bout's extradition to face justice here in America,
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 corporations in three of our States and use them in
illicit activities without ever being asked for the names of the
corporate owners.
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 corporation, until
another government disclosed that it was owned by the Alavi Foundation
which had known 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 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 financial fraud 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
and ownership stake in various business ventures. In still another case
earlier this year, the Securities and Exchange Commission suspended
trading in 61 shell corporations suspected of being misused to defraud
investors.
Shell corporations are also notorious for their role in health care
fraud. One example involves an individual named Michel Huarte who
formed 29 shell companies in several states including Florida,
Louisiana, and North Carolina, used them to make fraudulent health care
claims, and bilked Medicare out of more than $50 million. In 2010, he
was sentenced to 22 years in prison. He is one in a long line of
fraudsters who have hidden behind U.S. corporations to defraud Medicare
and Medicaid.
Tax evasion is another type of misconduct which all too often
involves the use of U.S. corporations with hidden owners. One
Subcommittee investigation showed, for example, 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.
Both Mr. Greaves and Mr. Neal later pled guilty to federal tax evasion.
The Subcommittee also 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 taxes on that compensation.
Still another area of abuse involves corrupt foreign officials using
U.S. corporations to hide and spend their illicit funds. One example
involves Teodoro Obiang, who is the son of the President of Equatorial
Guinea, holds office in that country, and has purchased luxury homes,
cars, and even a personal jet here in the United States. A Subcommittee
investigation disclosed that, as part of his actions, Mr. Obiang used
U.S. lawyers to form several California shell corporations with names
like Beautiful Vision, Unlimited Horizon, and Sweet Pink to open bank
accounts in the names of those corporations, move millions of dollars
in suspect funds into the United States, and use those funds to support
an affluent lifestyle. The Department of Justice has since filed suit
to seize his U.S. property, alleging that Mr. Obiang acquired it
through corruption and money laundering.
One last example involves 800 U.S. corporations whose hidden owners
have stumped U.S. law enforcement trying to investigate 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 Panamanian entities which, in turn, were owned by
a group of Panamanian holding corporations, all located at the same
Panama City office. By 2005, ICE had located 800 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
any one of the corporations. ICE had learned that the 800 corporations
were associated with multiple U.S. 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 enaged in wrongdoing.
These examples of U.S. corporations with hidden owners facilitating
terrorism, financial crime, health care fraud, tax evasion, corruption,
and other misconduct provide ample evidence of the need for legislation
to find out who is behind the mayhem. That's
[[Page S6231]]
why law enforcement officials are among the bill's strongest
supporters.
The Federal Law Enforcement Officers Association or FLEOA, which
represents more than 26,000 Federal law enforcement officers, has
explained its strong support for the bill as follows:
Suspected terrorists, drug trafficking organizations and
other criminal enterprises continue to exploit the anonymity
afforded to them through the current corporate filing process
in a few states. Hiding behind a registered agent, these
criminals are able to incorporate without disclosing who the
beneficial owners are for their company(s). This enables them
to establish corporate flow-through entities, otherwise known
as shell companies,' to facilitate money laundering and
narcoterrorist financing.
Even through the due process of proper service of a court
order, law enforcement officers are unable to determine who
the beneficial owners are of these entities. This has to
stop. While we fully recognize and respect the privacy
concerns of law abiding citizens, we need to install a
baseline of checks and balances to deter the criminal
exploitation of our corporate filing process.
The Fraternal Order of Police, which has 330,000 members across the
country, offers a similar explanation for its support of the bill:
For years corporations have been used as front
organizations by criminals conducting illegal activity such
as money laundering, fraud, and tax evasion. . . . This bill
is critical to our work because, all too often,
investigations are stymied when we encounter a company with
hidden ownership. . . . [T]he sharing of beneficial ownership
information with law enforcement will greatly assist our
investigations. When we are able to expose the link between
shell companies and drug trafficking, corruption, organized
crime and terrorist finance, the law enforcement community is
better able to keep America safe from these illegal
activities and keep the proceeds of these crimes out of the
U.S. financial system.
The National Association of Assistant United States Attorneys, which
represents more than 1,500 federal prosecutors, has urged Congress to
take legislative action to strengthen inadequate state incorporation
practices: ``[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.
The legislation will guard against that and no longer permit criminals
to exploit the lack of transparency in the registration of
corporations.''
Manhattan District Attorney Cyrus Vance Jr. has publicly urged
Congress to enact this bill. He wrote: ``I have spoken with many
colleagues in the law enforcement community, and every one of us
supports the bill as a simple and common sense movement to help prevent
white collar crime. . . . Because there is no national standard
requiring disclosure of beneficial ownership, criminals can set up U.S.
corporations anonymously and use them as fronts for all kinds of
illicit activity without having to identify who actually controls and
profits from the activity. In a simple stroke, the proposed bill would
eliminate this needless barrier to the detection and prosecution of
financial crimes.''
Some members of the U.S. financial industry with obligations under
U.S. anti-money laundering laws to know their customers, including when
doing business with a shell corporation, support the legislation
because it will help them know who is behind U.S. corporations seeking
to open accounts with them. The National Money Transmitters
Association, NMTA, for example, which represents state-licensed money
transmitters, has written in support of the bill, explaining: ``The
NMTA urges you to give us the KYC, know-your-customer, tools we need to
do our job efficiently and make sure that our nation's standards are
brought up to a level equal to that of other advanced countries.''
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 complying with the FATF standard on beneficial ownership
information. But that deadline passed five years ago, with no real
progress. Enacting the bill we are introducing today would help 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 help ensure that the
United States meets its international anti-money laundering
commitments.
Combating the misuse of corporations with hidden owners has
increasingly become a global priority. In a letter to President Obama
earlier this year, prominent prosecutors and corruption hunters from
across the globe urged the United States to collect company beneficial
ownership information to fight wrongdoing. According to the letter:
``Grand corruption would not be possible without the help of the global
financing system--in particular, banks that accept corrupt assets and
secrecy rules that allow money launderers to disguise their activity. .
. . We believe that part of the solution is for governments to require
existing company registers to collect information on the ultimate
owners of companies.''
As I mentioned earlier, countries around the world have begun to take
action to tackle the problem. Just last month, during the G8 summit in
Northern Ireland, leaders announced their commitment to ending the
practice of establishing anonymous shell companies and declared:
``Companies should know who really owns them and tax collectors and law
enforcers should be able to obtain this information easily.'' To
implement that principle, the G8 leaders pledged to publish national
Action Plans outlining the concrete steps each country will take to
ensure that law enforcement and tax authorities have ready access to
information on who owns and controls the companies formed under their
laws.
In announcing the U.S. Action Plan, the White House expressed its
commitment to ensuring that law enforcement and tax authorities have
access to ownership information for companies formed within U.S.
borders. The Plan explicitly calls for enactment of legislation that
meets certain principles, all of which are met by the bill introduced
today. Those principles are the following:
``Requirements for covered legal entities to disclose beneficial
ownership to states or regulated corporate formation agents at the time
of company formation.
``Requirements for verification of the identity of the beneficial
owner.
``Options for covering legal entities depending on whether the
applicant forms the legal entity directly or uses a regulated company
formation agent.
``Requirements for law enforcement authorities, including tax
authorities, to be able to access beneficial ownership information upon
appropriate request through a central registry at the state level.
``An extension of anti-money laundering obligations to company
formation agents, including an obligation to identify and verify
beneficial ownership information.
``A mandate that entities provide updated information when changes of
beneficial ownership occur within 60 days; and
``The imposition of civil and criminal penalties for knowingly
providing false information.''
The White House and the international community have made the
collection of beneficial ownership information for corporations a
global priority this year. It is time for Congress to step up to the
plate and take the necessary action.
The bill introduced today is the product of years of work by the
Senate Permanent Subcommittee on Investigations, which I chair. Over
twelve years ago, in 2000, the Government Accountability Office, at my
request, conducted an investigation and released a report entitled,
``Suspicious Banking
[[Page S6232]]
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 any 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 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 had
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 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.
In 2008, we first introduced our bipartisan legislation to stop the
formation of U.S. corporations with hidden owners. It was a Levin-
Coleman-Obama bill, S. 2956, back then. 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 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 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. Those 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. A June
2011 Reuters news article wrote a detailed expose of how that same
outfit, Wyoming Corporate Services, had 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 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 the type of
deceptive conduct going on right now, here in our own backyard, with
respect to U.S. corporations with hidden owners.
Despite the evidence of U.S. corporations being misused by organized
[[Page S6233]]
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 law enforcement and national 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 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 on the issue.
In July 2007, the NASS task force issued a proposal. Rather than cure
the problem, however, the proposal had multiple serious 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 with their own
hidden owners. The NASS proposal also did not require the States 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 continued 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 for failing to provide the names of
the true owners of the corporations being formed. The Justice
Department testified: ``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, Treasury
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 the uniform model, after four 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
many years, have been unable to devise an effective proposal to stop
the formation of corporations with hidden owners. One key difficulty is
that the States are competing against each other to attract persons who
want to set up U.S. corporations. 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 ask for the identity of the persons
behind the corporations being formed.
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 ask incorporation
applicants for 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 a unique identifying
number from a State driver's license or a U.S. passport. The bill would
not require States to verify this information, but penalties would
apply to persons who submit false information.
In the case of U.S. corporations formed by individuals who do not
possess a driver's license or passport from the United States, the bill
would permit them to submit their names, addresses, and identifying
information from a non-U.S. passport to a formation agent residing
within the State. They would have to include a copy of a passport
photograph. The incorporation application would have to include a
written certification that the formation agent had obtained the
information and verified the identity of the non-U.S. corporate owners.
The formation agent would have to retain the 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, and
utilities. 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
[[Page S6234]]
owners. In addition, the bill would exempt businesses set up by
governments, churches, charities, and nonprofit corporations, since
disclosure of their beneficial ownership information would not advance
the public interest or assist law enforcement. These exemptions
dramatically reduce the number of corporations who would actually have
to file beneficial ownership information on state incorporation forms
in order to ensure that the bill's disclosure obligations focus only on
owners whose identities are currently hidden.
The bill does not take a position on the issue of whether the States
should make 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 requires both the Justice and Treasury Departments
to make funds available from their individual forfeiture programs to
States incurring reasonable expenses to comply with the Act. These
forfeiture funds do not contain taxpayer dollars; instead they contain
the proceeds of forfeiture actions taken against persons involved in
money laundering, drug trafficking, or other wrongdoing. The bill would
direct a total of $40 million over 3 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.
The compliance costs would be modest, because the bill does not
require any State to change its laws, set up new forms, create new
databases of information, or verify the information provided. To the
contrary, the only steps that a State would need to take would be to
add one question to its existing incorporation form asking for the
corporation's beneficial owners, keep that incorporation application on
file which all States do already, and make the ownership information
available to law enforcement upon receipt of a subpoena or summons.
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 the withholding of
federal funds from a State for failing to modify its incorporation
practices to meet the beneficial ownership information requirements of
the act. Instead, the bill calls for a GAO report within 5 years of
enactment to identify any States that had 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 in the
event there are any 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, including owners under
investigation for suspect conduct. It is 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 wrongdoing. GAO would also
be asked to conduct a study of existing State formation procedures for
partnerships, trusts, and charitable organizations to see if additional
ownership disclosure requirements are warranted.
We have worked with the Departments of Justice, Treasury, and
Homeland Security to craft a bill that would address, in a fair and
reasonable way, the significant law enforcement problems created by
States allowing the formation of millions of U.S. corporations and LLCs
with hidden owners. When those corporations commit crimes, they affect
not only interstate commerce with U.S. victims, but also our
relationships with other countries whose citizens may become victims of
U.S. corporate wrongdoing. What the bill comes down to is a simple
requirement that States strengthen 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
misusing 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. A recent report found
that virtually every other country is already tougher than the United
States in terms of demanding and verifying beneficial ownership
information. Most offshore tax havens, for example, already require
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 meeting the same standards, but there is no
indication that they will, unless required to do so.
I wish Federal legislation weren't necessary. I wish the States could
solve this law enforcement problem on their own, but ongoing
competitive pressures make it unlikely that the States will do the
right thing. It's been nearly seven years since our 2006 hearing on
this issue and more than four 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 summary of the bill 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
To protect the United States from U.S. corporations being
misused to support terrorism, money laundering, tax evasion,
and other misconduct, the Levin-Grassley-Feinstein-Harkin
Incorporation Transparency and Law Enforcement Assistance Act
would:
[[Page S6235]]
Beneficial Ownership Information. Require the States
directly or through licensed formation agents to obtain the
names of beneficial owners of the corporations or limited
liability companies (LLCs) formed under State law, ensure
this information is updated, and provide the information to
law enforcement upon receipt of a subpoena or summons.
Shelf Corporations. Require formation agents who sell
``shelf corporations''--corporations formed for later sale to
third parties--to identify the beneficial owners who buy
them.
Federal Contractors. Require corporations or LLCs bidding
on federal contracts to provide beneficial ownership
information to the federal government.
Identifying Information. Require the provision of
beneficial owners' names, addresses, and a U.S. drivers
license or passport number, or information from a non-U.S.
passport.
Penalties for False Information. Establish penalties for
persons who knowingly provide false information, or willfully
fail to provide required information, on beneficial
ownership.
Exemptions. Exempt from the disclosure obligation regulated
corporations, including publicly traded companies, banks,
broker-dealers, insurers, and accounting firms; 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 $40 million over three years to States
from existing Justice and Treasury Department forfeiture
funds to pay for the costs of complying with the Act.
State Compliance Report. Specify that funds may not be
withheld from any State for failure to comply with the Act,
but also require a GAO report in five years identifying any
States not in compliance so a future Congress can determine
if additional steps are needed.
Transition Period. Give the States two years to begin
requiring existing corporations and LLCs to provide
beneficial ownership information.
Anti-Money Laundering Safeguards. Require paid formation
agents to establish anti-money laundering programs to guard
against supplying U.S. corporations or LLCs to wrongdoers.
Attorneys using paid formation agents would be exempt from
this requirement.
GAO Study. Require GAO to complete a study of existing
beneficial ownership information requirements for
partnerships, charities, and trusts.
______
By Mr. KAINE (for himself and Mr. Warner):
S. 1470. A bill to amend the Federal Water Pollution Control Act with
respect to the guidelines for specification of certain disposal sites
for dredged or fill material; to the Committee on Environment and
Public Works.
Mr. KAINE. Mr. President, today, my colleague Senator Mark Warner and
I are introducing the Commonsense Permitting for Job Creation Act of
2013, a bipartisan, bicameral piece of legislation to address an aspect
of water permitting law that has touched several economic development
projects.
In my home State of Virginia, there is a county that has been working
on securing a permit for the proposed site of a business center, where
one or multiple firms could establish job-creating manufacturing
plants. This area--Henry County, on the North Carolina border, has seen
profound economic challenges in recent years. The county's 5-year
average unemployment rate is 11 percent. In the county's largest city,
Martinsville, the 5-year average unemployment rate is over 17 percent.
This part of Virginia would benefit greatly from the jobs this site
could bring.
Henry County has worked with the U.S. Army Corps of Engineers on site
preparation. However, the Corps has been reluctant to issue the permit
because no company has yet committed to the site and prepared detailed
blueprints. The problem is that a company will not relocate to the site
without an approved permit, but a permit cannot be approved without a
company willing to relocate.
Henry County, the Martinsville-Henry Co. Economic Development Corp.,
and the Commonwealth of Virginia have together devoted more than $16
million to this project. They have worked in good faith, at great cost
in money and personnel hours, to promote economic development in line
with environmental protection and all requirements of the law. Yet due
to this regulatory ambiguity, this process is unable to move forward.
Our legislation clarifies that ambiguity. It specifies that the lack
of a committed end-user shall not be a reason to deny a Corps permit
that meets all other legal requirements. I believe this bill will allow
the site in Henry County, and similar sites elsewhere, to move forward,
while maintaining all environmental protections.
Senator Warner and I have introduced this legislation in partnership
with our friends and Virginia colleagues in the House, U.S.
Representatives Robert Hurt and Morgan Griffith. We believe this will
expedite the approval of important economic development projects, and
we are proud to be able to work across the aisle and with state and
local officials on this commonsense, bipartisan solution.
______
By Mr. REED (for himself and Mr. Blumenthal):
S. 1476. A bill to amend the Internal Revenue Code of 1986 to expand
the denial of deduction for certain excessive employee remuneration,
and for other purposes; to the Committee on Finance.
Mr. REED. Mr. President, today I am introducing, along with Senator
Blumenthal, the Stop Subsidizing Multimillion Dollar Corporate Bonuses
Act. This bill closes a loophole that allows publicly traded
corporations to deduct an executive's pay over $1 million from their
tax bill.
Under current tax law, when a public corporation calculates its
taxable income, generally it is permitted to deduct the cost of
compensation from its revenues, with limits up to $1 million for some
of the firm's most senior executives. However, a loophole has allowed
many public corporations to avoid such limits and freely deduct
excessive executive compensation. For example, because of this
loophole, if a CEO receives $15 million in compensation in a given
year, that amount can cause the corporation's taxable income to decline
by $15 million. With the current corporate tax rate at 35 percent, the
corporation in this case would pay less tax to the U.S. Treasury, up to
35 percent of $15 million, leaving the corporation's shareholders to
bear only $9.75 million of the $15 million cost of executive pay, while
U.S. taxpayers foot the remaining $5.25 million.
The Stop Subsidizing Multimillion Dollar Corporate Bonuses Act would
allow a public corporation to deduct compensation up to only $1
million. Using the same example, this would mean that corporate
shareholders would bear $14.65 million of the $15 million in
compensation.
Over a ten-year window, the Joint Committee on Taxation has estimated
this legislation would close a loophole that costs U.S. taxpayers over
$50 billion by making some simple changes to existing law.
First, our legislation extends section 162(m) of the tax code to all
employees of publicly traded corporations so that all compensation is
subject to a deductibility cap of $1 million. Publicly traded
corporations would still be permitted to pay their executives as much
as they want, but compensation above and beyond $1 million would no
longer be bankrolled, in part, through our tax code.
Second, our bill removes the exemption for performance-based
compensation, which currently permits compensation deductions above and
beyond $1 million when executives have met performance benchmarks set
by the corporation's Board of Directors. As a result, publicly traded
corporations would still be able to incentivize their executives, but
all such incentives would be subject to a corporate deductibility cap
of $1 million.
Finally, our legislation makes a technical correction to ensure that
all publicly traded corporations that are required to provide quarterly
and annual reports to their investors under Securities and Exchange
Commission rules and regulations are subject to section 162(m).
Currently, this section of the tax code only covers some publicly
traded corporations who are required to provide these periodic reports
to their shareholders. Discouraging unrestrained compensation packages
shouldn't hinge on whether a publicly traded corporation falls into one
SEC reporting requirement or another, and my bill closes this technical
loophole.
With this legislation, we aim to put an end to some of the
extravagant tax breaks that exclusively benefit public corporations.
This is simply a matter of fairness at a time of fiscal belt
tightening, when so many of our constituents have already sacrificed.
I want to thank Senator Blumenthal and his staff for working with me
on this issue, and I urge our colleagues to
[[Page S6236]]
join us by cosponsoring this legislation.
____________________